SVB&T Corporation, Parent Company of Springs Valley Bank & Trust Company, Reports 2023 First Quarter Earnings

JASPER, IN / ACCESSWIRE / May 12, 2023 / SVB&T Corporation (OTCQX:SVBT), parent company of Springs Valley Bank & Trust Company, today announced 2023 first quarter unaudited earnings of $1.46 million or $1.33 earnings per share (EPS), an 18.40% decrease over the same prior year period earnings on a per share basis. This first quarter 2023 performance translates to a return on average assets (ROAA) of 1.03%, compared to the same prior year period of 1.42%.

Net interest income before provision expense for the first quarter ended March 31, 2023 was $4.52 million compared to $4.43 million for the same period in 2022. Interest income increased $1.89 million compared to the prior year first quarter, primarily due to increased loan balances and increased interest rates on loans resulting from the rising rate environment. Interest expense increased $1.80 million compared to the same prior year quarter, again due to the rising interest rate environment and increased deposit balances, as well as the mix between interest- and noninterest-bearing deposits. Provision expense decreased by $45,000 over the prior year first quarter. Additionally, noninterest income decreased approximately $412,000 to $1.98 million from $2.39 million. The reduced income can primarily be attributed to lower revenue from Financial Services, resulting from fewer annuity sales in the first quarter of 2023 as compared to the first quarter of 2022; reduced revenue from sold loans, primarily due to decreased mortgage volume, as one would expect, due to the rising interest rate environment and its effect on mortgage originations and refinancings as compared to 2022 volume; and reduced income from the sale of Other Real Estate Owned (OREO) as there was a $133,000 gain in the first quarter of 2022 and no OREO sales in the first quarter of 2023. That said, noninterest income generation continues to be a strategic focus of SVB&T's by growing the Financial Advisory Group, increasing sold loan income, expanding electronic banking services, and other avenues, to continue to reduce margin dependence. Noninterest expense increased $206,000 to $4.57 million from $4.36 million, attributable to increases in general operating expenses, the largest of which being increased salary expense.

Quarter over trailing quarter earnings increased approximately $27,000 or 1.92%. The earnings increase was driven by slightly higher noninterest income, primarily due to increases in Financial Advisory Group and Financial Services income, and a reduction in noninterest expense from lower employee benefits expenses, including health insurance claims and profit-sharing contributions, as well as lower advertising and marketing expenses. Although earnings from interest income increased quarter over quarter, the increase in interest expense eroded any positive net interest income contribution to the quarter over quarter change.

SVB&T Corporation book value (adjusted for the 2022 stock split) has increased from $50.20 per share as of March 31, 2022, to $51.36 as of March 31, 2023, a 2.31% increase. SVB&T Corporation stock closed at $45.50 per share on the OTCQX exchange on March 31, 2023. In February of 2021, the Corporation's Board of Directors authorized a share repurchase program through December 31, 2022. Under the program, the Corporation was authorized to repurchase, from time to time as the Corporation deemed appropriate, shares of SVB&T Corporation's common stock with an aggregate purchase price of up to $2.00 million. As of December 31, 2022, SVB&T had repurchased (adjusted for 2022 stock split) 24,400 shares, with an average purchase price of $40.59, under the program. As of March 31, 2023, this repurchase program has expired and has not been renewed or replaced at this time.

Total assets increased $4.83 million to $565.49 million on March 31, 2023, compared to December 31, 2022 assets of $560.66 million. Total loans before allowance increased $10.83 million to $463.87 million on March 31, 2023, from $453.04 million on December 31, 2022. The loan growth was primarily generated through commercial and agriculture real estate (including commercial real estate construction), commercial and agriculture lines of credit, and consumer real estate lending. Springs Valley experienced substantial loan demand throughout 2022 and has a healthy pipeline so far in 2023 as well. The Bank does intend to strategically manage growth in 2023 to alleviate some of the pressure on the funding side of the balance sheet, as well as to help mitigate any potential credit concerns that could arise due to the high interest rate and economic environment. Allowance as a percent of total loans was 1.59% as of March 31, 2023, compared to 1.55% as of December 31, 2022. Total deposits increased $11.60 million to $480.82 million on March 31, 2023, from $469.22 million on December 31, 2022. Noninterest-bearing deposits decreased by approximately $10.92 million due primarily to decreases in business accounts. Interest-bearing deposits have increased by approximately $22.52 million. These increases occurred primarily in Springs Valley's reciprocal deposit products (ICS and CDARS), public funds accounts, and retail CDs, as well as increases due to the utilization of wholesale funding in the form of brokered deposits.

"Despite the multitude of headwinds facing the banking sector, including the rising interest rate environment, inverted yield curve, slowing economy, deposit and liquidity headlines, and looming potential credit concerns resulting from the aggressive rate hikes and position in the economic cycle, SVB&T Corporation posted another solid earnings quarter," remarked President and CEO, Jamie Shinabarger. "Springs Valley continues to focus on balance sheet management in terms of the deposit portfolio and interest expense, as well as general balance sheet liquidity," Shinabarger added. Mr. Shinabarger went on to say, "It's worthwhile to note that, unlike some of the bank headlines you may have seen recently, Springs Valley's balance sheet and deposit portfolio are very strong, with minimal exposure to uninsured deposits and a wide array of established contingent funding sources."

While the current forecast for future rate hikes is expected to have halted for the time being, the impact on inflation and the overall economy remains to be seen as there is generally a 12-month lag between the rate hike and resulting impact. "With this challenging backdrop for 2023, Springs Valley has and will continue to perform by focusing on our core community banking fundamentals and relationship-based business model," Shinabarger concluded.

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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. Springs Valley Bank is a member of FDIC and is an Equal Housing Lender.

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. Trust and investment products are not deposits; not insured by the FDIC; not a deposit or other obligation of, or guaranteed by, the depository institution; not insured by any Federal Government Agency; and may lose value - subject to investment risks, including possible loss of the principal amount invested.

More information can be found online at www.svbt.bank. The Corporation'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.

Selected Consolidated Financial Data of SVB&T Corporation
(In Thousands, Except Shares Outstanding and Per Share Data)

		Unaudited								Audited
		31-Mar								31-Dec
		2023				2022				2022
Assets
Cash and due from banks		$	9,335			$	12,865			$	11,834
Interest-bearing time deposits			988				1,248				992
Fed funds sold			6,068				14,586				10,790
Available for sale securities			58,653				63,345				58,090
Other investments			2,517				2,517				2,517
Loans held for sale			0				659				44
Loans net of allowance for loan losses			456,761				391,703				445,959
Premises and equipment			6,664				6,720				6,676
Bank-owned life insurance			9,375				9,214				9,335
Accrued interest receivable			2,964				2,871				2,981
Foreclosed assets held for sale			123				49				49
Mortgage servicing rights			2,074				1,497				2,049
Lender risk account (FHLBI)			1,616				1,521				1,590
Other assets			8,347				7,002				7,750
Total assets		$	565,485			$	515,797			$	560,656
Liabilities and Stockholders' Equity
Noninterest-bearing deposits			85,488				88,059				96,412
Interest-bearing deposits			395,329				329,475				372,812
Borrowed funds			17,000				32,500				24,000
Subordinated debentures			5,000				5,000				5,000
Accrued interest payable and other liabilities			6,227				5,533				7,235
Total liabilities		$	509,044			$	460,567			$	505,459
Stockholders' equity - substantially restricted			56,441				55,230				55,197
Total liabilities and stockholders' equity		$	565,485			$	515,797			$	560,656

		Three Months Ended
		31-Mar
		2023				2022
Operating Data:
Interest and dividend income		$	6,758			$	4,864
Interest expense			2,235				435
Net interest income		$	4,523			$	4,429
Provision for loan losses			242				287
Net interest income after provision for loan losses		$	4,281			$	4,142
Fiduciary activities			1,079				1,076
Customer service fees			207				193
Increase in cash surrender value of life insurance			40				41
Net gain on loan sales			186				368
Realized gain/(loss) on securities			0				0
Other income			464				710
Total noninterest income		$	1,976			$	2,388
Salary and employee benefits			2,696				2,609
Premises and equipment			549				522
Data processing			412				469
Deposit insurance premium			68				33
Professional fees			218				197
Other expenses			628				535
Total noninterest expense		$	4,571			$	4,365
Income before taxes			1,686				2,165
Income tax expense			229				378
Net income		$	1,457			$	1,787
Shares outstanding (adjusted for stock split)			1,098,836				1,100,144
Average shares - basic (adjusted for stock split)			1,098,216				1,099,628
Average shares - diluted (adjusted for stock split)			1,098,216				1,099,628
Basic earnings per share (adjusted for stock split)		$	1.33			$	1.63
Diluted earnings per share (adjusted for stock split)		$	1.33			$	1.63
Other Data:
Yield on average assets			4.79	%			3.86	%
Cost on average assets			1.58	%			0.35	%
Interest rate spread			3.21	%			3.51	%
Net interest margin			3.37	%			3.76	%
Number of full service banking centers			6				6
Return on average assets			1.03	%			1.42	%
Average assets		$	563,909			$	504,403
Return on average equity			10.49	%			12.74	%
Average equity		$	55,531			$	56,101
Equity to assets ratio (EOP)			9.98	%			10.71	%
Average total deposits		$	474,485			$	401,311
Loans past due 30 to 89 days (still accruing)		$	1,478			$	414
Loans past due 90 days or more (still accruing)		$	158			$	540
Nonaccrual loans		$	3,178			$	1,117
Book value per share (adjusted for stock split)		$	51.36			$	50.20
Market value per share - end of period close (adjusted for stock split)		$	45.50			$	51.66

SOURCE: SVB&T Corporation

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