JASPER, IN / ACCESSWIRE / July 31, 2020 / SVB&T Corporation, parent company of Springs Valley Bank & Trust Company, today announced 2020 second quarter unaudited earnings of $1.4M or $2.46 earnings per share (EPS), a 39.0% increase over the same prior year period EPS. This also compares favorably in total dollars to $991,000 of net income in the second quarter of 2019. This second quarter 2020 performance translates to a return on average assets (ROAA) of 1.14%, compared to the same prior year period of 0.93%.
Net interest income increased over the prior year second quarter due to growth in earning assets and reduced funding costs of both deposits and borrowings resulting from the reduced rate environment subsequent to the Fed's 150 basis point decrease in the federal funds rate in March. Additionally, as compared to the prior year second quarter, non-interest income increased approximately $685,000, primarily due to elevated sold mortgage income, which more than offset the increase in non-interest expense of $399,000, resulting primarily from expanding Springs Valley's footprint into two new markets and the subsequent staffing and other overhead expenses necessary to support this growth. Quarter over trailing quarter earnings increased approximately $559,000 or 68.62%. The biggest contributors to this positive variance, again, were increased non-interest income, with sold mortgage income being the largest contributor, and reduced interest expense due to lower rates on deposits and borrowings.
SVB&T Corporation book value has risen from $82.03 per share at December 31, 2019 to $87.18 at June 30, 2020, a 6.28% increase. SVB&T Corporation stock closed at $61.00 per share on the OTCQX exchange on July 30, 2020.
Total assets increased $42.0 Million to $494.8 Million at June 30, 2020 compared to December 31, 2019 assets of $452.9 Million. Total loans before allowances increased $35.7 Million to $386.0 Million at June 30, 2020 from $350.3 Million at December 31, 2019. The loan growth was primarily generated in commercial lines of credit from agriculture lines of credit and SBA lending resulting from the SBA's Paycheck Protection Program (PPP). Springs Valley Bank & Trust made 396 PPP loans for approximately $21.3 Million as of June 30, 2020. Total deposits increased $19.2 Million to $380.4 Million at June 30, 2020 from $361.2 Million at December 31, 2019. The deposit growth has been generated in both interest bearing and non-interest bearing deposits accounts, seemingly as a result of PPP lending, economic impact payments, and a generally elevated propensity for saving as a result of the overall level of economic uncertainty.
Unaudited net income for the six months ended June 30, 2020 was $2.2 Million or $3.92 EPS, a 31.10% increase over the same prior year period EPS. This also compares favorably in total dollars to $1.7 Million of net income over the same period in 2019. This year to date (YTD) June 30, 2020 performance translates to a return on average assets (ROAA) of 0.94%, compared to the same prior year period of 0.80%.
Net interest income before provision expense for the six months ended June 30, 2020 was $7.6 Million compared to $6.8 Million for the same period in 2019, an increase of $821,000. Growth in earning assets resulted in $521,000 of additional interest income as compared to the same prior year period, even with the Fed's 150 basis point rate reduction in March. Additionally, interest expense decreased by $300,000 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. Total non-interest income increased $937,000 to $3.4 Million YTD June 2020 from $2.5 Million for the same period in 2019. The largest contributing factor to the positive variance was sold mortgage income which has experienced a significant uptick in volume, as noted above. Growing non-interest income to reduce margin dependence continues to be a strategic focus of Springs Valley Bank & Trust. Non-interest expense increased $741,000 to $7.7 Million YTD June 2020 from $6.9 Million for the same period in 2019. This expense increase was primarily 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, as discussed in the 2020 second quarter earnings commentary above. The largest components of this expense have been increased staffing, additional premises and equipment expense, and additional data processing expense.
"At the midpoint of 2020, revenue is running ahead of budget largely due to historically low mortgage rates, which are a direct by-product of the Fed's 150 basis point reduction to the federal funds rate in response to COVID-19's impact on the US," commented President and CEO, Jamie Shinabarger. This exceptionally strong sold mortgage loan revenue is on pace to double Springs Valley's best year of production (which occurred in 2019) by year-end 2020. Shinabarger went on to tout Springs Valley's "best in class" mortgage experience, "when you combine the aggressive pricing stance that SEVP and CLO, Craig Buse, adopted early in the year, which drove demand through the roof, with the superior execution by Springs Valley's Mortgage Loan Officers (MLO's) and Loan Support Staff (LSS), who were supported by others in the bank who were re-deployed during the shelter-in-place period, the results speak for themselves. When coupling this elevated revenue with a tremendous reduction in Springs Valley's cost of funds on the expense side of the income statement, you get the mid-year performance results reported here." Management and the Board remain intently focused on the increased stress in the loan portfolio and want to be clear that these operating results are after provisioning at a substantially higher rate, since the first of the year, in anticipation of challenges that may occur in certain sectors of the loan portfolio if the COVID-19 pandemic turn out to be a sustained event beyond the next 6 months.
SVB&T Corporation (OTCQX:SVBT), the parent company of Springs Valley Bank & Trust Company, announced that its Board of Directors declared a quarterly dividend of $0.26 per share of the Corporation's common stock. The quarterly dividend is payable on or about October 15, 2020 to shareholders of record as of the close of business on September 15, 2020. The dividend declared is a 4.00% annualized increase over the total dividend declared for the 2019 fiscal year.
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 | |||||||||||
| 2020 | 2019 | 2019 | ||||||||||
| Assets | ||||||||||||
| Cash and Due From Banks | $ | 18,395 | $ | 10,312 | $ | 10,535 | ||||||
| Interest Bearing Time Deposits | 1,200 | 1,175 | 1,200 | |||||||||
| Fed Funds Sold | 6,446 | 6,070 | 10,745 | |||||||||
| Available for Sale Securities | 59,192 | 61,230 | 57,820 | |||||||||
| Other Investments | 2,738 | 2,214 | 2,567 | |||||||||
| Loans held for sale | 2,784 | 670 | 156 | |||||||||
| Loans net of allowance for loan losses | 378,588 | 338,694 | 345,822 | |||||||||
| Premises and Equipment | 6,408 | 5,471 | 6,636 | |||||||||
| Bank-owned Life Insurance | 8,913 | 8,137 | 8,820 | |||||||||
| Accrued Interest Receivable | 2,540 | 2,358 | 2,413 | |||||||||
| Foreclosed Assets Held for Sale | 1,374 | 133 | 129 | |||||||||
| Other Assets | 6,241 | 4,526 | 6,007 | |||||||||
| Total Assets | 494,819 | 440,990 | 452,850 | |||||||||
| Liabilities and Stockholders Equity | ||||||||||||
| Non-interest bearing deposits | 76,860 | 52,045 | 51,344 | |||||||||
| Interest bearing deposits | 303,588 | 287,068 | 309,846 | |||||||||
| Borrowed Funds | 55,038 | 48,988 | 34,764 | |||||||||
| Subordinated Debentures | 5,000 | 5,000 | 5,000 | |||||||||
| Accrued interest payable and other liabilities | 5,585 | 4,150 | 6,029 | |||||||||
| Total Liabilities | 446,071 | 397,251 | 406,983 | |||||||||
| Stockholders' equity - substantially restricted | 48,748 | 43,739 | 45,867 | |||||||||
| Total Liabilities and Shareholders' Equity | 494,819 | 440,990 | 452,850 | |||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| 30-Jun | 30-Jun | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Operating Data: | ||||||||||||||||
| Interest & Dividend Income | $ | 5,030 | $ | 4,873 | $ | 9,910 | $ | 9,389 | ||||||||
| Interest Expense | 998 | 1,373 | 2,286 | 2,586 | ||||||||||||
| Net Interest Income | $ | 4,032 | $ | 3,500 | $ | 7,624 | $ | 6,803 | ||||||||
| Provision for Loan Loss | 601 | 257 | 893 | 492 | ||||||||||||
| Net Interest Income after Provision for Loan Losses | $ | 3,431 | $ | 3,243 | $ | 6,731 | $ | 6,311 | ||||||||
| Fiduciary activitities | 693 | 697 | 1,476 | 1,370 | ||||||||||||
| Customer service fees | 111 | 176 | 290 | 339 | ||||||||||||
| Increase in cash surender value of life insurance | 45 | 43 | 92 | 86 | ||||||||||||
| Other income | 1,070 | 318 | 1,582 | 708 | ||||||||||||
| Total noninterest income | 1,919 | 1,234 | 3,440 | 2,503 | ||||||||||||
| Salary & employee benefits | 2,167 | 1,964 | 4,366 | 4,017 | ||||||||||||
| Occupancy | 506 | 393 | 991 | 817 | ||||||||||||
| Data processing | 407 | 287 | 807 | 681 | ||||||||||||
| Deposit insurance premium | 25 | 37 | 61 | 66 | ||||||||||||
| Professional fees | 200 | 207 | 402 | 410 | ||||||||||||
| Other expenses | 436 | 454 | 1,033 | 928 | ||||||||||||
| Total noninterest expense | 3,741 | 3,342 | 7,660 | 6,919 | ||||||||||||
| Income before Income Taxes | 1,609 | 1,135 | 2,511 | 1,895 | ||||||||||||
| Income Tax Expense | 235 | 144 | 321 | 221 | ||||||||||||
| Net Income | $ | 1,374 | $ | 991 | $ | 2,190 | $ | 1,674 | ||||||||
| 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 | $ | 2.46 | $ | 1.77 | $ | 3.92 | $ | 2.99 | ||||||||
| Diluted Earnings per Share | $ | 2.46 | $ | 1.77 | $ | 3.92 | $ | 2.99 | ||||||||
| Other Data: | ||||||||||||||||
| Yield on all Interest-earning Average Assets | 4.43 | % | 4.81 | % | 4.50 | % | 4.75 | % | ||||||||
| Cost on all Interest-earning Average Assets | 0.88 | % | 1.35 | % | 1.04 | % | 1.31 | % | ||||||||
| Interest Rate Spread | 3.55 | % | 3.46 | % | 3.46 | % | 3.44 | % | ||||||||
| Net Interest Margin | 3.55 | % | 3.45 | % | 3.46 | % | 3.44 | % | ||||||||
| Number of Full Service Banking Centers | 6 | 4 | 6 | 4 | ||||||||||||
| Return on Average Assets (net income divided by average total assets) | 1.14 | % | 0.93 | % | 0.94 | % | 0.80 | % | ||||||||
| Average Assets | $ | 481,986 | $ | 427,281 | $ | 467,506 | $ | 417,262 | ||||||||
| Return on Average Equity (net income divided by average total equity) | 11.71 | % | 9.38 | % | 9.39 | % | 8.05 | % | ||||||||
| Average Equity | $ | 46,915 | $ | 42,243 | $ | 46,651 | $ | 41,583 | ||||||||
| Equity to Assets Ratio (EOP) | 9.85 | % | 9.92 | % | 9.85 | % | 9.92 | % | ||||||||
| Book Value per Share | $ | 87.18 | $ | 78.23 | $ | 87.18 | $ | 78.23 | ||||||||
| Market Value per Share - End of Period Close | $ | 64.00 | $ | 80.73 | $ | 64.00 | $ | 80.73 | ||||||||
SOURCE: SVB&T Corporation
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