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Salisbury Bancorp, Inc. Reports Results For Fourth Quarter And Full Year 2012; Balance Sheet Repositioning Impacts Earnings; Declares 28 Cent Dividend

Stocks in this article: SAL

LAKEVILLE, Conn., Jan. 25, 2013 (GLOBE NEWSWIRE) -- Salisbury Bancorp, Inc. ("Salisbury"), NASDAQ Capital Market: "SAL", the holding company for Salisbury Bank and Trust Company (the "Bank"), announced results for its fourth quarter and full year ended December 31, 2012.

Selected fiscal year 2012 highlights

Net income available to common shareholders was $3,859,000, or $2.28 per common share, for 2012, compared with $3,588,000, or $2.12 per common share, for 2011.

  • Earnings per common share increased $0.16, or 7.5%, to $2.28.
  • Tax equivalent net interest income decreased $19,000, or 0.1%.
  • Provision for loan losses was $1,070,000, versus $1,440,000 for 2011. Net loan charge-offs were $786,000 and $1,284,000, respectively, for 2012 and 2011.
  • Non-interest income increased $1,658,000, or 29.3%.
  • Non-interest expense increased $1,915,000, or 10.9%. Non-interest expense included certain non-recurring items:

-- Federal Home Loan Bank advance prepayment fee of $450,000

-- Litigation settlement of $400,000

-- Pension curtailment of $342,000

  • Preferred stock dividends were $241,000, versus $524,000 for 2011.

Fourth quarter 2012 dividend

The Board of Directors of Salisbury Bancorp, Inc. declared a $0.28 per common share quarterly cash dividend at their January 25, 2013 meeting. The dividend will be paid on February 22, 2013 to shareholders of record as of February 8, 2013.

Selected fourth quarter 2012 highlights

Net income available to common shareholders was $531,000, or $0.31 per common share, for its fourth quarter ended December 31, 2012 (fourth quarter 2012), compared with $1,094,000, or $0.65 per common share, for the third quarter ended September 30, 2012 (third quarter 2012), and $1,184,000, or $0.70 per common share, for the fourth quarter ended December 31, 2011 (fourth quarter 2011). Fourth quarter 2012 results included a $450,000 non-recurring expense to the FHLBB that will be recovered in 2013 through reduced interest expense

  • Earnings per common share decreased $0.34, or 52.3%, to $0.31 versus third quarter 2012, and $0.39, or 55.7%, versus fourth quarter 2011.
  • Tax equivalent net interest income decreased $142,000, or 2.9%, versus third quarter 2012, and decreased $288,000, or 5.8%, versus fourth quarter 2011.
  • Provision for loan losses was $380,000, versus $330,000 for third quarter 2012 and $580,000 for fourth quarter 2011. Net loan charge-offs were $199,000, versus $359,000 for third quarter 2012 and $531,000 for fourth quarter 2011.
  • Non-interest income decreased $10,000, or 0.53%, versus third quarter 2012 and increased $186,000, or 11.0%, versus fourth quarter 2011.
  • Non-interest expense increased $641,000, or 13.7%, versus third quarter 2012 and increased $1,085,000, or 25.5%, versus fourth quarter 2011. Non-interest expense for fourth quarter 2012 includes a $450,000 Federal Home Loan Bank advance prepayment fee.
  • Preferred stock dividends paid were $46,000, versus $48,000 third quarter 2012 and $39,000 fourth quarter 2011.
  • Non-performing assets increased $0.2 million, or 2.37%, to $10.1 million, or 1.68% of total assets, versus third quarter 2012 and decreased $0.7 million, or 6.62%, versus fourth quarter 2011. Loans receivable 30 days or more past due increased $1.8 million to $13.6 million, or 3.47% of gross loans, versus third quarter 2012 and increased $3.9 million versus fourth quarter 2011.

Richard J. Cantele, Jr., President and Chief Executive Officer, stated, "Our fourth quarter earnings were significantly impacted by the following three non-recurring items:

  • Loan charge-off of $193,000 to facilitate the liquidation of a $993,000 non-performing loan relationship
  • OREO loss of $99,000 to liquidate $778,000 of OREO
  • Prepayment fee of $450,000 to prepay $10 million FHLBB advance, which we will recoup in 2013 through interest expense savings

"Excluding these three items, adjusted earnings per share would have been $0.60. These actions better position Salisbury for 2013. Other significant accomplishments for the quarter included:

  • Record commercial loan originations of $20 million
  • Residential mortgage loan originations of $27 million
  • Sales of $13 million of fixed rate mortgage loans, down from $18 million sold last quarter
  • Increase in gross loans receivable of $11.6 million, or 3%
  • Trust and Wealth Advisory fourth quarter year-over-year revenue growth of 13%"

Net Interest Income

Tax equivalent net interest income for fourth quarter 2012 decreased $142,000, or 2.9%, versus third quarter 2012, and $288,000, or 5.8%, versus fourth quarter 2011. Average total interest bearing deposits decreased $9.4 million versus third quarter 2012 and decreased $7.9 million, or 1.96%, versus fourth quarter 2011. Average earning assets decreased $5.2 million versus third quarter 2012 and decreased $5.5 million, or 0.95%, versus fourth quarter 2011. The net interest margin decreased 7 basis points versus third quarter 2012 and decreased 17 basis points versus fourth quarter 2011 to 3.32% for fourth quarter 2012.

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