JASPER, IN / ACCESSWIRE / May 1, 2019 / SVB&T Corporation (OTCQX: SVBT), parent company of Springs Valley Bank & Trust Company, announced unaudited earnings for the three months ended March 31, 2019 of $683,000 or $1.22 earnings per share (EPS) - a 34.41% decrease compared to the first quarter 2018 EPS. First quarter earnings compares unfavorably in total dollars to 2018 earnings of $1.0 Million. This year to date (YTD) March 2019 performance translates to a return on average assets (ROAA) of 0.67%, compared to the same period 2018 of 1.09%.
Book value has risen by 2.70% to $74.66 per share at March 2019, compared to $72.70 per share at December 31, 2018. The SVB&T Corporation stock closed at $81.75 per share on April 29, 2019.
Total assets increased $18.9 Million to $419.9 Million at March 31, 2019, compared to December 31, 2018 assets of $401.0 Million. Total loans, including loans held for sale, before allowances increased $11.1 Million to $321.0 Million at March 31, 2019 from $309.9 Million at December 31, 2018. Total deposits increased $9.8 Million to $341.7 Million at March 31, 2019 from $331.9 Million at December 31, 2018.
Net interest income before provision expense for the three months ended March 31, 2019 was $3.3 Million compared to $3.2 Million for the same period 2018, an increase of $114,000. While earning assets grew (including an increased yield on earning assets) and therefore interest income increased by $567,000, the cost of funds increased by $453,000 due to using more wholesale funding along with a higher costs for funds as a result of increased competition for local deposits.
Total non-interest income increased $5,000 for the period ending March 31, 2019 from $1.3 Million over the same period 2018. The variance included an increase in sold loan income of $29,000, an increase in eBanking income of $12,000, and a nonrecurring gain on bond sales of $36,000. These increases were partially offset by the drop in value of the equity market at the end of 2018 which impacted Financial Advisory Group revenue negatively by $73,000 as the market took time to rebound in the first quarter of 2019.
YTD 2019 non-interest expense increased $581,000 to $3.6 Million, compared to the first three months ended March 31, 2018. This increase in non-interest expense is due in large part to elevated salary and employee benefits expense for the first quarter of 2019 (an increase of $316,000) due to increased staffing to support growth, as well as accrual changes for bonuses, payroll taxes, and 401K contributions. These accrual changes will not have a significant impact on future quarters' earnings in 2019. Another substantial contributing factor to elevated non-interest expense in the first quarter of 2019 was considerable start-up, operational costs (staffing, data processing, and marketing) to prepare the Washington, IN banking center prior to opening in the second half of the year.
The decrease in net income, when comparing the first quarter 2019 to the first quarter 2018, is primarily attributable to the increase in non-interest expense as discussed in the preceding paragraph. The outlook for the rest of 2019 remains optimistic as the majority of the primary drivers of the non-interest expense variance over the prior year were absorbed in the first quarter and should not have a major impact on the remainder of the year.
"While first quarter net income was soft relative to one year ago, Management remains confident that Spring Valley's bottom-line performance will rally as the year plays out," stated President & CEO Jamie Shinabarger. "The cause for optimism rests in a handful of impactful and forward looking revenue (offensive) indicators: robust loan demand in the commercial lending space (commercial loan balance up 5.46% from year-end), continued strength in the housing sector (sold mortgage income is up 20.78% over the first quarter of 2018 fueled by low unemployment, historically affordable interest rates, and solid consumer confidence confidence), and a substantially stronger equities market through the first quarter, driven by solid business fundamentals (lower taxes, low interest rates, improved margins, and stronger demand), forecasts improved profitability from the Financial Advisory Group (formerly Trust Department)."
Shinabarger went on to say, "When Management considers Springs Valley's prospects for strengthening revenue as outlined above and combines that with the impact from several very focused core deposit and balance sheet strategies which have been deployed to mitigate the impact of higher cost of funds driven by a flat yield curve (defensive measures), the combination of the two is expected to nudge bank operating income closer to the normalized performance range that Shareholders have come to expect in the post-recession era of the last seven years."
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 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 | |||||||||||
31-Mar | 31-Dec | |||||||||||
2019 | 2018 | 2018 | ||||||||||
Assets | ||||||||||||
Cash and Due From Banks | $ | 14,408 | $ | 6,469 | $ | 8,931 | ||||||
Interest Bearing Time Deposits | 1,175 | 2,180 | 1,175 | |||||||||
Fed Funds Sold | 9,173 | 7,580 | 7,068 | |||||||||
Available for Sale Securities | 55,904 | 53,343 | 55,644 | |||||||||
Other Investments | 2,236 | 2,236 | 2,169 | |||||||||
Loans held for sale | 31 | 0 | 150 | |||||||||
Loans net of allowance for loan losses | 316,891 | 292,764 | 305,879 | |||||||||
Premises and Equipment | 5,268 | 5,482 | 5,273 | |||||||||
Bank-owned Life Insurance | 8,095 | 7,921 | 8,052 | |||||||||
Accrued Interest Receivable | 1,820 | 1,667 | 1,824 | |||||||||
Foreclosed Assets Held for Sale | 58 | 65 | 58 | |||||||||
Other Assets | 4,828 | 4,439 | 4,730 | |||||||||
Total Assets | 419,887 | 384,146 | 400,953 | |||||||||
Liabilities and Stockholders Equity | ||||||||||||
Non-interest bearling deposits | 55,137 | 56,250 | 52,178 | |||||||||
Interest bearing deposits | 286,589 | 262,776 | 279,676 | |||||||||
Borrowed Funds | 27,599 | 24,040 | 19,710 | |||||||||
Subordinated Debentures | 5,000 | 0 | 5,000 | |||||||||
Accrued interest payable and other liabilities | 3,815 | 3,215 | 3,738 | |||||||||
Total Liabilities | 378,140 | 346,281 | 360,302 | |||||||||
Stockholders' equity - substantially restricted | 41,747 | 37,865 | 40,651 | |||||||||
Total Liabilities and Shareholders' Equity | 419,887 | 384,146 | 400,953 |
Three Months Ended | ||||||||
31-Mar | ||||||||
2019 | 2018 | |||||||
Operating Data: | ||||||||
Interest & Dividend Income | $ | 4,516 | $ | 3,949 | ||||
Interest Expense | 1,213 | 760 | ||||||
Net Interest Income | $ | 3,303 | $ | 3,189 | ||||
Provision for Loan Loss | 235 | 232 | ||||||
Net Interest Income after Provision for Loan Losses | $ | 3,068 | $ | 2,957 | ||||
Fiduciary activitities | 691 | 764 | ||||||
Customer service fees | 324 | 315 | ||||||
Increase in cash surender value of life insurance | 43 | 44 | ||||||
Other income | 211 | 141 | ||||||
Total noninterest income | 1,269 | 1,264 | ||||||
Salary & employee benefits | 2,053 | 1,737 | ||||||
Occupancy | 424 | 346 | ||||||
Data processing | 394 | 317 | ||||||
Deposit insurance premium | 30 | 41 | ||||||
Professional fees | 203 | 182 | ||||||
Other expenses | 473 | 372 | ||||||
Total noninterest expense | 3,577 | 2,995 | ||||||
Income before Income Taxes | 760 | 1,226 | ||||||
Income Tax Expense | 77 | 186 | ||||||
Net Income | $ | 683 | $ | 1,040 | ||||
Shares Outstanding | 559,136 | 558,865 | ||||||
Average Shares - Basic | 559,136 | 558,836 | ||||||
Average Shares - Diluted | 559,136 | 559,136 | ||||||
Basic Earnings per Share | $ | 1.22 | $ | 1.86 | ||||
Diluted Earnings per Share | $ | 1.22 | $ | 1.86 | ||||
Other Data: | ||||||||
Yield on all Interest-earning Average Assets | 4.68 | % | 4.37 | % | ||||
Cost on all Interest-bearing Average Liabilities | 1.59 | % | 1.07 | % | ||||
Interest Rate Spread | 3.09 | % | 3.30 | % | ||||
Net Interest Margin | 3.43 | % | 3.53 | % | ||||
Number of Full Service Banking Centers | 4 | 4 | ||||||
Return on Average Assets (net income divided by average total assets) | 0.67 | % | 1.09 | % | ||||
Average Assets | $ | 407,131 | $ | 382,207 | ||||
Return on Average Equity (net income divided by average total equity) | 6.68 | % | 11.10 | % | ||||
Average Equity | $ | 40,916 | $ | 37,465 | ||||
Equity to Assets Ratio (EOP) | 9.94 | % | 9.86 | % | ||||
Book Value per Share | $ | 74.66 | $ | 67.75 | ||||
Market Value per Share - End of Period Close | $ | 80.00 | N/A |
SOURCE: SVB&T Corporation