SVB&T Corporation, Parent Company of Springs Valley Bank & Trust Company, Reports 2020 Second Quarter and Year to Date Earnings and Declares Quarterly Dividend

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

ReleaseID: 599884