JASPER, IN / ACCESSWIRE / February 1, 2021 / SVB&T Corporation (OTCQX:SVBT), parent company of Springs Valley Bank & Trust Company, today announced near-record 2020 fourth quarter unaudited earnings of $1.4 million or $2.44 earnings per share (EPS), a 24.49% increase over the same prior-year period earnings on a per-share basis. This fourth quarter 2020 performance translates to a return on average assets (ROAA) of 1.10%, compared to the same prior-year period of 0.96%.
Net interest income before provision expense for the fourth quarter ended December 31, 2020 was $4.7 million compared to $3.8 million for the same period in 2019, an increase of $926,000. This increase can primarily be attributed to growth in earning assets over the prior year, including Paycheck Protection Program (PPP) loans, and reduced funding costs of both deposits and borrowings resulting from the reduced rate environment after the Fed's 150 basis point reduction to the federal funds rate in March of 2020. Provision expense increased by $1.1 million over the prior-year fourth quarter to adequately provide for the elevated economic uncertainty resulting from the Covid-19 pandemic and its potential impact on the loan portfolio. Additionally, as compared to the prior-year fourth quarter, non-interest income increased approximately $706,000 to $2.2 million from $1.5 million, largely due to elevated sold mortgage income. This increase more than offset the increase in non-interest expense of $262,000 to $4.1 million from $3.9 million, resulting mainly from additional employee salary and benefits expenses attributable to the opening of new banking centers and elevated employee bonuses as 2020 performance significantly outpaced budgeted performance.
Quarter over trailing quarter earnings increased approximately $72,000 or 5.59%. The biggest contributors to this variance were positive earnings contributions from increased net interest income and sold mortgage income, partially offset by an expected write-down of Springs Valley's mortgage servicing asset as of year-end 2020.
SVB&T Corporation book value has risen from $82.03 per share as of December 31, 2019 to $91.87 as of December 31, 2020, a 12.00% increase. SVB&T Corporation stock closed at $72.00 per share on the OTCQX exchange on January 29, 2021.
Total assets increased $43.2 million to $496.1 million on December 31, 2020 compared to December 31, 2019 assets of $452.9 million. Total loans before allowance increased $24.8 million to $375.1 million on December 31, 2020 from $350.3 million on December 31, 2019. The loan growth was primarily generated with commercial and agriculture real estate lending, as well as small business lending via the SBA's Paycheck Protection Program (PPP). Springs Valley Bank & Trust made 414 PPP loans for approximately $21.7 million in 2020, of which about 57.0% have been forgiven by year-end. Allowance as a percent of total loans was 1.60% as of December 31, 2020 compared to 1.24% as of December 31, 2019. Total deposits increased $35.8 million to $397.0 million on December 31, 2020 from $361.2 million on December 31, 2019. The deposit growth has been generated in both interest-bearing, and non-interest-bearing deposit accounts for both businesses and consumers, seemingly due to government stimulus initiatives and a generally elevated propensity for saving because of the overall level of economic uncertainty.
Year to date (YTD) unaudited earnings for the twelve months ended December 31, 2020 was $4.8 million or $8.66 EPS, a 19.94% increase over the same prior-year period earnings on a per-share basis. This YTD performance translates to an ROAA of 1.00%, compared to the same prior-year period of 0.93%.
Net interest income before provision expense for the twelve months ended December 31, 2020 was $16.6 million compared to $14.0 million for the same period in 2019, an increase of $2.6 million. Growth in earning assets resulted in $854,000 of additional interest income as compared to the same prior-year period, even in a decreasing rate environment. Additionally, interest expense decreased by $1.7 million over the same time frame due to the lower rate environment and its impact on deposit and borrowing rates, further contributing to the growth in net interest income. YTD provision expense increased by $2.1 million to adequately provide for the economic uncertainty resulting from the Covid-19 pandemic, as well as to reserve for current year charge-offs resulting from a few legacy credits. Total non-interest income increased $1.9 million to $7.8 million YTD December 2020 from $5.9 million for the same period in 2019. The largest contributing factor to the positive variance was sold mortgage income, which surged during the last three quarters of 2020 due to the low-interest-rate environment and the strategic pricing of the bank's mortgage rates. Growing non-interest income to reduce margin dependence continues to be a strategic focus of Springs Valley Bank & Trust. Non-interest expense increased $1.4 million to $15.8 million YTD December 2020 from $14.4 million for the same period in 2019. This expense increase was largely driven by various overhead components that have been necessary to build out the infrastructure to support the future growth of the bank and serve a growing customer base. The largest components of this expense have been increased staffing expenses, additional premises and equipment expenses, and additional data processing expenses. Elevated employee expenses related to mortgage volume have also been a contributing factor to increased non-interest expense in 2020.
"The first half of 2020 presented Springs Valley and the world at large with seemingly insurmountable disruption and uncertainty around Covid-19," stated President & CEO, Jamie Shinabarger. "However, as the year played out, Springs Valley's staff, management, and board were able to successfully achieve impressive results through precise execution in the areas of balance sheet management (reducing funding costs and expanding net interest margin), sold mortgages (assisting over 900 households with refinances which put real money back into family budgets, home purchases, or home constructions), and SBA PPP lending of $21.7 million that helped over 400 small businesses live to fight another day."
Another notable contributor to the Springs Valley's 2020 performance came from the Financial Advisory Group's rebound the second half of the year on the strength of a resilient equities market, helping households maintain, grow, or pass on generational assets to beneficiaries.
Shinabarger concluded by adding, "With Springs Valley having successfully bolstered loan reserves, managed overall asset quality indicators, and grown our newest banking centers in Princeton and Washington, 2020 was truly a remarkable year both in terms of challenges and results. Perhaps the best indicator of SVB&T's performance is its EPS of $8.66 (19.94% growth compared to 2019), which, combining the year with the previous eight, creates the ninth (2012-2020) consecutive year of record performance in the company's 119-year history." Additionally, over the same nine-year timeframe, Springs Valley has grown loans and deposits at a compounded annual growth rate (CAGR) of 10.17% and 8.76%, respectively.
For more information, contact: Ryan Heim, Treasurer & CFO, SVB&T Corporation, at 812.634.4889 or rheim@svbt.com.
SVB&T Corporation is headquartered at 8482 West State Road 56, French Lick, Indiana 47432, with administrative offices at 1500 Main Street, Jasper, Indiana 47546. Its subsidiary, Springs Valley Bank & Trust Company, has locations in Dubois, Daviess, Gibson, and Orange Counties, offering full-service bank and financial services. Springs Valley has products and services for all types of families and businesses, including checking and savings accounts, certificates of deposit, electronic services, online consumer and mortgage applications, and a variety of other loan options. In addition, the company has a full-service financial advisory group managed by experienced, talented professionals specializing in estate planning, tax planning, and wealth management. Investment Services are also offered by a licensed, professional Springs Valley representative. More information can be found online at www.svbt.bank. The company's stock is traded on the OTCQX trading platform under ticker symbol SVBT (www.otcmarkets.com).
Information conveyed in this press release regarding SVB&T Corporation's and its subsidiaries' anticipated future performance is forward-looking and therefore involves risks and uncertainties that could cause the results or developments to differ significantly from those indicated in these statements. These risks and uncertainties include, but are not limited to, risks and uncertainties inherent in general and local banking, as well as mortgage conditions, competitive factors specific to markets in which the company and its subsidiaries operate, future interest rate levels, changes in local real estate markets, legislative and regulatory decisions, capital market conditions, and/or other factors.
Springs Valley Bank & Trust is a member of FDIC and is an Equal Housing Lender.
Selected Consolidated Financial Data of SVB&T Corporation
(In Thousands, Except Shares Outstanding and Per Share Data)
| Unaudited | Audited | |||||||
| 31-Dec | 31-Dec | |||||||
| 2020 | 2019 | |||||||
| Assets | ||||||||
| Cash and due from banks | $ | 25,704 | $ | 10,535 | ||||
| Interest-bearing time deposits | 1,267 | 1,200 | ||||||
| Fed funds sold | 10,201 | 10,745 | ||||||
| Available for sale securities | 61,460 | 57,820 | ||||||
| Other investments | 2,738 | 2,567 | ||||||
| Loans held for sale | 894 | 156 | ||||||
| Loans net of allowance for loan losses | 368,266 | 345,822 | ||||||
| Premises and equipment | 6,141 | 6,636 | ||||||
| Bank-owned life insurance | 9,002 | 8,820 | ||||||
| Accrued interest receivable | 2,853 | 2,413 | ||||||
| Foreclosed assets held for sale | 720 | 129 | ||||||
| Other assets | 6,872 | 6,007 | ||||||
| Total assets | $ | 496,118 | $ | 452,850 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Noninterest-bearing deposits | 82,900 | 51,344 | ||||||
| Interest-bearing deposits | 314,087 | 309,846 | ||||||
| Borrowed funds | 37,000 | 34,764 | ||||||
| Subordinated debentures | 5,000 | 5,000 | ||||||
| Accrued interest payable and other liabilities | 5,761 | 6,029 | ||||||
| Total liabilities | $ | 444,748 | $ | 406,983 | ||||
| Stockholders' equity - substantially restricted | 51,370 | 45,867 | ||||||
| Total liabilities and stockholders' equity | $ | 496,118 | $ | 452,850 | ||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| 31-Dec | 31-Dec | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Operating Data: | ||||||||||||||||
| Interest & dividend income | $ | 5,429 | $ | 5,242 | $ | 20,412 | $ | 19,558 | ||||||||
| Interest expense | 700 | 1,439 | 3,810 | 5,513 | ||||||||||||
| Net interest income | $ | 4,729 | $ | 3,803 | $ | 16,602 | $ | 14,045 | ||||||||
| Provision for loan loss | 1,212 | 157 | 2,967 | 885 | ||||||||||||
| Net interest income after provision for loan losses | $ | 3,517 | $ | 3,646 | $ | 13,635 | $ | 13,160 | ||||||||
| Fiduciary activities | 878 | 773 | 3,211 | 2,915 | ||||||||||||
| Customer service fees | 152 | 195 | 584 | 713 | ||||||||||||
| Increase in cash surrender value of life insurance | 45 | 42 | 181 | 168 | ||||||||||||
| Other income | 1,116 | 475 | 3,817 | 2,078 | ||||||||||||
| Total noninterest income | $ | 2,191 | $ | 1,485 | $ | 7,793 | $ | 5,874 | ||||||||
| Salary & employee benefits | 2,529 | 2,254 | 9,391 | 8,290 | ||||||||||||
| Premises and equipment | 485 | 453 | 1,964 | 1,666 | ||||||||||||
| Data processing | 412 | 401 | 1,621 | 1,442 | ||||||||||||
| Deposit insurance premium | 31 | 0 | 123 | 22 | ||||||||||||
| Professional fees | 182 | 222 | 761 | 877 | ||||||||||||
| Other expenses | 473 | 520 | 1,960 | 2,053 | ||||||||||||
| Total noninterest expense | $ | 4,112 | $ | 3,850 | $ | 15,820 | $ | 14,350 | ||||||||
| Income before taxes | 1,596 | 1,281 | 5,608 | 4,684 | ||||||||||||
| Income tax expense | 234 | 188 | 767 | 628 | ||||||||||||
| Net income | $ | 1,362 | $ | 1,093 | $ | 4,841 | $ | 4,056 | ||||||||
| Shares outstanding | 559,136 | 559,136 | 559,136 | 559,136 | ||||||||||||
| Average shares - basic | 559,136 | 559,136 | 559,136 | 559,136 | ||||||||||||
| Average shares - diluted | 559,136 | 559,136 | 559,136 | 559,136 | ||||||||||||
| Basic earnings per share | $ | 2.44 | $ | 1.96 | $ | 8.66 | $ | 7.22 | ||||||||
| Diluted earnings per share | $ | 2.44 | $ | 1.96 | $ | 8.66 | $ | 7.22 | ||||||||
| Other Data: | ||||||||||||||||
| Yield on all interest-earning average assets | 4.37 | % | 4.60 | % | 4.24 | % | 4.50 | % | ||||||||
| Cost on all interest-earning average assets | 0.56 | % | 1.26 | % | 0.79 | % | 1.27 | % | ||||||||
| Interest rate spread | 3.81 | % | 3.34 | % | 3.45 | % | 3.23 | % | ||||||||
| Net interest margin | 4.02 | % | 3.52 | % | 3.65 | % | 3.39 | % | ||||||||
| Number of full-service banking centers | 6 | 5 | 6 | 5 | ||||||||||||
| Return on average assets | 1.10 | % | 0.96 | % | 1.00 | % | 0.93 | % | ||||||||
| Average assets | $ | 497,357 | $ | 455,761 | $ | 482,010 | $ | 434,962 | ||||||||
| Return on average equity | 10.80 | % | 9.62 | % | 10.04 | % | 9.38 | % | ||||||||
| Average equity | $ | 50,432 | $ | 45,440 | $ | 48,234 | $ | 43,217 | ||||||||
| Equity to assets ratio (EOP) | 10.35 | % | 10.13 | % | 10.35 | % | 10.13 | % | ||||||||
| Book value per share | $ | 91.87 | $ | 82.03 | $ | 91.87 | $ | 82.03 | ||||||||
| Market value per share - end of period close | $ | 72.00 | $ | 79.95 | $ | 72.00 | $ | 79.95 | ||||||||
SOURCE: SVB&T Corporation
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