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SVB&T Corporation, Parent Company of Springs Valley Bank & Trust Company, Reports 2021 Second Quarter and Year to Date Earnings and Declares Quarterly Dividend

2021-08-02 14:46 ET - News Release

JASPER, IN / ACCESSWIRE / August 2, 2021 / SVB&T Corporation (OTCQX:SVBT), parent company of Springs Valley Bank & Trust Company, today announced 2021 second quarter unaudited earnings of $2.0 million or $3.67 earnings per share (EPS), a 49.19% increase over the same prior year period earnings on a per share basis. This second quarter 2021 performance translates to a return on average assets (ROAA) of 1.61%, compared to the same prior year period of 1.14%. SVB&T Corporation also announced that its Board of Directors declared a quarterly dividend of $0.27 per share of the Corporation's common stock. The quarterly dividend is payable on or about October 15, 2021, to shareholders of record as of the close of business on September 15, 2021.The dividend declared is a 3.85% annualized increase over the total dividend declared for the 2020 fiscal year.

Net interest income before provision expense for the second quarter ended June 30, 2021 was $4.7 million compared to $4.0 million for the same period in 2020, an increase of $663,000. This increase can primarily be attributed to Paycheck Protection Program (PPP) loans and amortization of the associated origination fees, and, to an even greater degree, reduced funding costs of both deposits and borrowings resulting from balance sheet management strategies and the current low interest rate environment. Provision expense decreased $339,000 over the prior year second quarter as Springs Valley made substantial provisions to the allowance in the second quarter last year as the pandemic began, and Springs Valley also had a large recovery in March of 2021 that allowed the institution to make smaller provision expenses in the second quarter of 2021. Additionally, compared to the prior year second quarter, noninterest income increased approximately $384,000 to $2.3 million from $1.9 million, largely due to elevated Financial Advisory Group income resulting from a resilient equities market and strategic investing by Springs Valley's financial advisors to properly position customer portfolios in this low-rate environment. Noninterest expense increased $579,000 to $4.3 million from $3.7 million, with the largest contributor to the increase being employee salary and benefits expenses.

Quarter over trailing quarter earnings decreased approximately $210,000 or 9.45%. There were positive earnings contributions from increased net interest income due to increased interest income, lower interest expense, and lower provision expense, as well as an increase in noninterest income largely due to increased Financial Advisory Group earnings. However, the increase in noninterest expense more than offset the positive earnings contributions outlined above.

SVB&T Corporation book value has risen from $91.87 per share as of December 31, 2020, to $98.79 as of June 30, 2021, a 7.53% increase. SVB&T Corporation stock closed at $88.80 per share on the OTCQX exchange on July 30, 2021.

Total assets increased $2.0 million to $498.1 million on June 30, 2021, compared to December 31, 2020 assets of $496.1 million. Total loans before allowance increased $11.1 million to $386.2 million on June 30, 2021, from $375.1 million on December 31, 2020. The loan growth was primarily generated through commercial and agriculture real estate lending, as well as small business lending via the SBA's Paycheck Protection Program. Springs Valley Bank & Trust made 445 PPP loans during Round 2 in 2021 for approximately $12.9 million. PPP lending was a benefit to local, small businesses and therefore was a primary focus for Springs Valley while funds were available through the SBA's Paycheck Protection Program. Allowance as a percent of total loans was 1.86% as of June 30, 2021, compared to 1.60% as of December 31, 2020. Springs Valley has continued to conservatively reserve for potential future loan losses that could result from the economic impact of the ongoing Covid-19 pandemic. Total deposits increased $1.8 million to $398.8 million on June 30, 2021, from $397.0 million on December 31, 2020. The deposit growth has been generated in both interest-bearing and noninterest-bearing deposit accounts for both businesses and consumers, seemingly due to government stimulus initiatives, a generally elevated propensity for saving because of the overall level of economic uncertainty due to the pandemic, and Round 2 PPP loan funds that have been deposited into customers' business accounts until ultimately utilized by the respective businesses.

Year to date (YTD) unaudited earnings for the six months ended June 30, 2021 was $4.2 million or $7.68 EPS, a 95.92% increase over the same prior year period earnings on a per share basis. This YTD performance translates to an ROAA of 1.70%, compared to the same prior year period of 0.94%.

Net interest income before provision expense for the six months ended June 30, 2021 was $9.3 million compared to $7.6 million for the same period in 2020, an increase of $1.7 million. Interest income increased approximately $394,000 as compared to the same prior year period, largely due to the amortization of PPP loan origination fees. Additionally, interest expense decreased by $1.3 million over the same time frame due to the lower rate environment and its impact on deposit and borrowing rates, as well as balance sheet management strategies that have involved letting higher cost borrowings mature without being replaced, further contributing to the growth in net interest income. YTD provision expense decreased by $319,000 largely due to the fact that Springs Valley had a large recovery in March of 2021 which allowed the institution to make smaller provision expenses in the second quarter of 2021. Total noninterest income increased $1.1 million to $4.5 million YTD June 2021 from $3.4 million for the same period in 2020. The largest contributing factors to the positive variance were increased Financial Advisory Group income and sold mortgage income which surged starting in the second quarter of 2020 due to the low interest rate environment and the strategic pricing of Springs Valley's mortgage rates. Growing noninterest income to reduce margin dependence continues to be a strategic focus of Springs Valley Bank & Trust. Noninterest expense increased $410,000 to $8.1 million YTD June 2021 from $7.7 million for the same period in 2020. 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.

"At the halfway mark of this year, it's clear that 2021 will be one for the record books," stated President and CEO, Jamie Shinabarger. "Unprecedented strength in noninterest income (sold mortgages and robust Financial Advisory Group revenue generated by our over $600 million assets under management), coupled with extraordinary interest income (amortized PPP loan origination income) and a balance sheet funded by historically low retail and wholesale sources, have created a positive perfect storm," he added. Fundamental asset quality indicators (historically low delinquency ratio of 0.40%, net loan recovery of $635,000, and a vigorous ALLL coverage ratio of 1.86%) demonstrate Management's commitment and focus on quality in the face of a difficult COVID-19 period dating back to March 2020. Shinabarger concluded, "2021 has been a testament to the tried-and-true philosophy, follow your purpose and the underlying financial results will take care of themselves. Our Mission Statement states: Springs Valley Bank & Trust Company will enhance the financial quality of life in our communities by focusing on you. Never has that been truer than in 2020 and 2021, and the results speak for themselves!"


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

30-Jun 31-Dec

2021 2020 2020

Cash and due from banks
$16,283 $18,395 $25,704
Interest-bearing time deposits
1,014 1,200 1,267
Fed funds sold
8,834 6,446 10,201
Available for sale securities
64,497 59,192 61,460
Other investments
2,738 2,738 2,738
Loans held for sale
1,890 2,784 894
Loans net of allowance for loan losses
377,157 378,588 368,266
Premises and equipment
6,110 6,408 6,141
Bank-owned life insurance
9,088 8,913 9,002
Accrued interest receivable
2,817 2,540 2,853
Foreclosed assets held for sale
612 1,374 720
Mortgage servicing rights
1,239 773 835
Lender risk account (FHLBI)
1,319 799 1,100
Other assets
4,491 4,669 4,937
Total assets
$498,089 $494,819 $496,118
Liabilities and Stockholders' Equity
Noninterest-bearing deposits
84,203 76,860 82,900
Interest-bearing deposits
314,608 303,588 314,087
Borrowed funds
35,500 55,038 37,000
Subordinated debentures
5,000 5,000 5,000
Accrued interest payable and other liabilities
4,437 5,585 5,761
Total liabilities
$443,748 $446,071 $444,748
Stockholders' equity - substantially restricted
54,341 48,748 51,370
Total liabilities and stockholders' equity
$498,089 $494,819 $496,118

Three Months Ended Six Months Ended

30-Jun 30-Jun

2021 2020 2021 2020
Operating Data:
Interest and dividend income
$5,191 $5,030 $10,304 $9,910
Interest expense
496 998 1,030 2,286
Net interest income
$4,695 $4,032 $9,274 $7,624
Provision for loan losses
262 601 574 893
Net interest income after provision for loan losses
$4,433 $3,431 $8,700 $6,731
Fiduciary activities
1,012 693 1,939 1,476
Customer service fees
147 111 266 290
Increase in cash surrender value of life insurance
43 45 87 92
Sold mortgage income
637 922 1,441 1,183
Realized gain/(loss) on securities
0 8 9 8
Other income
464 140 729 391
Total noninterest income
$2,303 $1,919 $4,471 $3,440
Salary and employee benefits
2,613 2,167 4,719 4,366
Premises and equipment
485 506 1,042 991
Data processing
464 407 868 807
Deposit insurance premium
32 25 62 61
Professional fees
184 200 374 402
Other expenses
542 436 1,005 1,033
Total noninterest expense
$4,320 $3,741 $8,070 $7,660
Income before taxes
2,416 1,609 5,101 2,511
Income tax expense
398 235 855 321
Net income
$2,018 $1,374 $4,246 $2,190
Shares outstanding
550,046 559,136 550,046 559,136
Average shares - basic
550,046 559,136 553,130 559,136
Average shares - diluted
550,046 559,136 553,130 559,136
Basic earnings per share
$3.67 $2.46 $7.68 $3.92
Diluted earnings per share
$3.67 $2.46 $7.68 $3.92
Other Data:
Yield on average assets
4.15% 4.17% 4.13% 4.24%
Cost on average assets
0.40% 0.83% 0.41% 0.98%
Interest rate spread
3.75% 3.34% 3.72% 3.26%
Net interest margin
4.00% 3.58% 3.96% 3.48%
Number of full service banking centers
6 6 6 6
Return on average assets
1.61% 1.14% 1.70% 0.94%
Average assets
$500,291 $481,986 $498,476 $467,506
Return on average equity
15.37% 11.71% 16.33% 9.39%
Average equity
$52,509 $46,915 $52,011 $46,651
Equity to assets ratio (EOP)
10.91% 9.85% 10.91% 9.85%
Average total deposits
401,729 371,751 399,740 366,293
Loans past due 30 to 89 days (still accruing)
180 1,321 180 1,321
Loans past due 90 days or more (still accruing)
382 578 382 578
Nonaccrual loans
2,050 1,399 2,050 1,399
Book value per share
$98.79 $87.18 $98.79 $87.18
Market value per share - end of period close
$91.40 $64.00 $91.40 $64.00

SOURCE: SVB&T Corporation

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