SVB&T Corporation, Parent Company of Springs Valley Bank & Trust Company, Reports 2019 Year to Date and Second Quarter Earnings and Declares Quarterly Dividend

JASPER, IN / ACCESSWIRE / August 2, 2019 / SVB&T Corporation (OTCQX:SVBT) parent company of Springs Valley Bank & Trust Company, today announced unaudited net income for the six months ended June 30, 2019 of $1.7 Million or $2.99 earnings per share (EPS), a 24.69% decrease over the same period 2018 EPS. This also compares unfavorably in total dollars to $2.2 Million of net income over the same period in 2018. This year to date (YTD) June 30, 2019 performance translates to a return on average assets (ROAA) of 0.80%, compared to the same period 2018 of 1.14%.

SVB&T Corporation declared a quarterly dividend of $0.25 per share of the Corporation’s common stock. The quarterly dividend is payable on or about October 15th, 2019 to shareholders of record at the close of business on September 15, 2019.

Book value has risen from $72.70 per share at December 31, 2018 to $78.23 at June 30, 2019 or a 7.61% increase. The SVB&T Corporation stock closed at $80.00 per share on the OTCQX exchange on July 30, 2019.

Total assets increased $40.0 Million to $441.0 Million at June 30, 2019 compared to December 31, 2018 assets of $401.0 Million. Total Loans before allowances increased $33.8 Million to $343.7 Million at June 30, 2019 from $309.9 Million at December 31, 2018. The loan growth was primarily generated in commercial real estate and commercial lines of credit with agriculture real estate and lines of credit being large contributors. Total deposits increased $7.2 Million to $339.1 Million at June 30, 2019 from $331.9 Million at December 31, 2018. The deposit growth has been generated primarily in higher rate products such as the money market savings, as well as an increase in brokered time deposits.

Net interest income before provision expense for the six months ended June 30, 2019 was $6.8 Million compared to $6.4 Million for the same period 2018, an increase of $401,000. Earning assets continued to grow during the first six months, including an uptick in yield on earning assets, which drove an increase in interest income of $1.3 Million over the same prior year period. However, the cost of funds increased by $905,000 due to higher deposit balances, rate increases resulting from local competition for deposits, and increased borrowings to fund the gap between our loan and deposit growth, which muted the positive impact to net interest income. Total non-interest income decreased $133,000 from $2.6 Million YTD June 2018 to $2.5 Million for the same period 2019. This decrease was primarily a result of lower Financial Advisory Group revenue as compared to the prior year due to a structural change within the department that transitioned a Financial Advisor to an assets under management fee structure from the previously front loaded brokerage fee structure; this change will essentially move upfront revenue to later years. Additionally, our sale of SBA guaranteed loans has lagged that of the same period in 2018, also contributing to the year over year variance. This is primarily a timing issue as a large SBA sale is scheduled to occur in the third quarter of 2019. Non-interest expense increased $944,000 from $6.0 Million YTD June 2018 to $6.9 Million for the same period 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. Some of the largest components of this expense have been increased staffing, additional premises and equipment, and additional information technology initiatives including further developing our digital service offering, implementing an integrated teller machine (ITM) network, and data processing support.

Second quarter 2019 unaudited earnings of $991,000 or $1.77 EPS, was a 16.11% decrease over the same period 2018 EPS. This also compares unfavorably in total dollars to $1.2 Million over the same period in 2018. This second quarter 2019 performance translates to a return on average assets (ROAA) of 0.93%, compared to the same period 2018 of 1.19%. Net interest income experienced an uptick with increased loan balances and higher average rates, but this bump was muted as our cost of funding has also been increasing at a significant rate. This increase was not enough to cover a decrease in non-interest income and elevated non-interest expenses as discussed above, leading to the decrease in net income highlighted above. As mentioned in the YTD discussion, the decrease in net income has primarily been a function of layering on staffing and infrastructure to set the stage for future growth both organically and inorganically if the opportunity presents itself. Quarter over trailing quarter, earnings increased approximately $308,000 or 45.10%. As discussed in the first quarter earnings announcement, there were significant accounting adjustments that negatively impacted the first quarter that did not impact the second quarter. As the second quarter earnings are a better indication of future operating income, we expect this recent level of earnings to continue in 2019.

“As anticipated, second quarter performance rebounded positively from the first, bolstering Management’s optimism for a strong finish as we embark upon the remainder of the 2019 campaign,” stated President/CEO, Jamie Shinabarger. He went on to say, “While 2019’s earnings have moderated as compared to 2018’s, this isn’t purely by accident. Management remains focused on the long-term, investing in infrastructure necessary to grow the Bank’s brand beyond our hyper-competitive, saturated legacy markets. We anticipate opening the Washington Banking Center in September of this year which further reinforces the rural, county-seat business model that the Board has chosen. Our aggressive spending on digital platforms and products are strategically positioning us to successfully compete well into the future, even against banking behemoths with much larger IT budgets.” Shinabarger added, “Complimented by a modest increase in our branch network, these moves are aimed at finding the right mix of physical and digital delivery systems, supported by our team of Relationship Bankers for a superior, high-touch, customized customer experience.”

For more information contact: Darrell Blocker, Treasurer & CFO, SVB&T Corporation, at 812.634.4803 or dblocker@svbt.com (on the OTCQX trading platform, find us under ticker symbol SVBT at www.otcmarkets.com).

Information conveyed in this press release regarding SVB&T Corporation 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 or capital market conditions and other factors.

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. Springs Valley has two locations in both Dubois and Orange Counties. Its subsidiary Springs Valley Bank & Trust Company offers full-service bank and trust services. Springs Valley has products and services for all types of families and businesses: checking and savings accounts; certificates of deposit; electronic services; online mortgage applications and a variety of other loan options. In addition, the company has a full-service trust department 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. Springs Valley Bank & Trust’s online address is www.svbt.com, and phone number is 800.843.4947.

Springs Valley Bank 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

2019

2018

Assets

Cash and Due From Banks

$10,312

$9,352

$8,931

Interest Bearing Time Deposits

1,175

2,180

1,175

Fed Funds Sold

6,070

8,508

7,068

Available for Sale Securities

61,230

53,337

55,644

Other Investments

2,281

2,236

2,169

Loans held for sale

670

1,019

150

Loans net of allowance for loan losses

338,694

300,372

305,879

Premises and Equipment

5,471

5,395

5,273

Bank-owned Life Insurance

8,137

7,965

8,052

Accrued Interest Receivable

2,358

1,837

1,824

Foreclosed Assets Held for Sale

133

Other Assets

4,459

4,452

4,730

Total Assets

440,990

396,718

400,953

Liabilities and Stockholders Equity

Non-interest bearling deposits

11,520

50,844

52,178

Interest bearing deposits

327,592

279,847

279,676

Borrowed Funds

48,988

23,930

19,710

Subordinated Debentures

5,000

Accrued interest payable and other liabilities

4,151

3,079

3,738

Total Liabilities

397,251

357,700

360,302

Stockholders’ equity – substantially restricted

43,739

39,018

40,651

Total Liabilities and Shareholders’ Equity

440,990

396,718

400,953

Three Months Ended

Six Months Ended

30-Jun

2019

2018

2019

2018

Operating Data:

Interest & Dividend Income

$4,873

$4,135

$9,389

$8,084

Interest Expense

1,373

921

2,586

1,681

Net Interest Income

$3,500

$3,214

$6,803

$6,403

Provision for Loan Loss

257

205

492

437

Net Interest Income after Provision for Loan Losses

$3,243

$3,009

$6,311

$5,966

Fiduciary activitities

711

735

1,402

1,499

Customer service fees

317

299

640

613

Increase in cash surender value of life insurance

Other income

162

293

375

436

Total noninterest income

1,233

1,371

2,503

2,636

Salary & employee benefits

1,964

1,661

4,017

3,398

Occupancy

393

389

817

734

Data processing

287

297

681

614

Deposit insurance premium

Professional fees

207

184

410

366

Other expenses

453

415

928

789

Total noninterest expense

3,341

2,979

6,919

5,975

Income before Income Taxes

1,135

1,401

1,895

2,627

Income Tax Expense

144

223

221

409

Net Income

$991

$1,178

$1,674

$2,218

Shares Outstanding

559,136

558,865

559,136

558,865

Average Shares – Basic

559,136

558,865

559,136

558,850

Average Shares – Diluted

559,136

Basic Earnings per Share

$1.77

$2.11

$2.99

$3.97

Diluted Earnings per Share

$1.77

$2.11

$2.99

$3.97

Other Data:

Yield on all Interest-earning Average Assets

4.75
%

4.41
%

4.75
%

4.39
%

Cost on all Interest-earning Average Assets

1.35
%

0.98
%

1.31
%

0.91
%

Interest Rate Spread

3.40
%

3.43
%

3.44
%

3.48
%

Net Interest Margin

3.45
%

3.43
%

3.44
%

3.48
%

Number of Full Service Banking Centers

Return on Average Assets (net income divided by average total assets)

0.93
%

1.19
%

0.80
%

1.14
%

Average Assets

$427,281

$395,303

$417,262

$388,791

Return on Average Equity (net income divided by average total equity)

9.38
%

12.34
%

8.05
%

11.73
%

Average Equity

$42,243

$38,172

$41,583

$37,821

Equity to Assets Ratio (EOP)

9.92
%

9.84
%

9.92
%

9.84
%

Book Value per Share

$78.23

$69.82

$78.23

$69.82

Market Value per Share – End of Period Close

$80.73

$67.50

$80.73

$67.50

SOURCE: SVB&T Corporation

ReleaseID: 554443

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