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SVB&T Corporation, Parent Company of Springs Valley Bank & Trust Company, Reports 2020 Fourth Quarter and Annual Earnings

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SVB&T Corporation (OTCQX: SVBT) reported near-record fourth quarter 2020 earnings of $1.4 million or $2.44 EPS, reflecting a 24.49% year-over-year increase. The company achieved a return on average assets (ROAA) of 1.10%, up from 0.96% the previous year. Key growth drivers included a rise in net interest income to $4.7 million, boosted by PPP loans and reduced funding costs. YTD earnings for 2020 reached $4.8 million (EPS: $8.66), marking a 19.94% increase. Total assets grew to $496.1 million, with loans increasing to $375.1 million and deposits rising to $397.0 million.

Positive
  • Fourth quarter 2020 EPS of $2.44, up 24.49% year-over-year.
  • YTD 2020 EPS of $8.66 reflects a 19.94% increase over 2019.
  • Total assets rose by $43.2 million to $496.1 million.
  • Net interest income increased to $4.7 million, up from $3.8 million in Q4 2019.
  • Total loans grew by $24.8 million to $375.1 million.
Negative
  • Provision expense increased by $1.1 million due to economic uncertainty from Covid-19.
  • Non-interest expense rose by $262,000 in Q4 2020, mainly from employee costs.

JASPER, IN / ACCESSWIRE / February 1, 2021 / SVB&T Corporation (OTCQX:SVBT), parent company of Springs Valley Bank & Trust Company, today announced near-record 2020 fourth quarter unaudited earnings of $1.4 million or $2.44 earnings per share (EPS), a 24.49% increase over the same prior-year period earnings on a per-share basis. This fourth quarter 2020 performance translates to a return on average assets (ROAA) of 1.10%, compared to the same prior-year period of 0.96%.

Net interest income before provision expense for the fourth quarter ended December 31, 2020 was $4.7 million compared to $3.8 million for the same period in 2019, an increase of $926,000. This increase can primarily be attributed to growth in earning assets over the prior year, including Paycheck Protection Program (PPP) loans, and reduced funding costs of both deposits and borrowings resulting from the reduced rate environment after the Fed's 150 basis point reduction to the federal funds rate in March of 2020. Provision expense increased by $1.1 million over the prior-year fourth quarter to adequately provide for the elevated economic uncertainty resulting from the Covid-19 pandemic and its potential impact on the loan portfolio. Additionally, as compared to the prior-year fourth quarter, non-interest income increased approximately $706,000 to $2.2 million from $1.5 million, largely due to elevated sold mortgage income. This increase more than offset the increase in non-interest expense of $262,000 to $4.1 million from $3.9 million, resulting mainly from additional employee salary and benefits expenses attributable to the opening of new banking centers and elevated employee bonuses as 2020 performance significantly outpaced budgeted performance.

Quarter over trailing quarter earnings increased approximately $72,000 or 5.59%. The biggest contributors to this variance were positive earnings contributions from increased net interest income and sold mortgage income, partially offset by an expected write-down of Springs Valley's mortgage servicing asset as of year-end 2020.

SVB&T Corporation book value has risen from $82.03 per share as of December 31, 2019 to $91.87 as of December 31, 2020, a 12.00% increase. SVB&T Corporation stock closed at $72.00 per share on the OTCQX exchange on January 29, 2021.

Total assets increased $43.2 million to $496.1 million on December 31, 2020 compared to December 31, 2019 assets of $452.9 million. Total loans before allowance increased $24.8 million to $375.1 million on December 31, 2020 from $350.3 million on December 31, 2019. The loan growth was primarily generated with commercial and agriculture real estate lending, as well as small business lending via the SBA's Paycheck Protection Program (PPP). Springs Valley Bank & Trust made 414 PPP loans for approximately $21.7 million in 2020, of which about 57.0% have been forgiven by year-end. Allowance as a percent of total loans was 1.60% as of December 31, 2020 compared to 1.24% as of December 31, 2019. Total deposits increased $35.8 million to $397.0 million on December 31, 2020 from $361.2 million on December 31, 2019. The deposit growth has been generated in both interest-bearing, and non-interest-bearing deposit accounts for both businesses and consumers, seemingly due to government stimulus initiatives and a generally elevated propensity for saving because of the overall level of economic uncertainty.

Year to date (YTD) unaudited earnings for the twelve months ended December 31, 2020 was $4.8 million or $8.66 EPS, a 19.94% increase over the same prior-year period earnings on a per-share basis. This YTD performance translates to an ROAA of 1.00%, compared to the same prior-year period of 0.93%.

Net interest income before provision expense for the twelve months ended December 31, 2020 was $16.6 million compared to $14.0 million for the same period in 2019, an increase of $2.6 million. Growth in earning assets resulted in $854,000 of additional interest income as compared to the same prior-year period, even in a decreasing rate environment. Additionally, interest expense decreased by $1.7 million 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. YTD provision expense increased by $2.1 million to adequately provide for the economic uncertainty resulting from the Covid-19 pandemic, as well as to reserve for current year charge-offs resulting from a few legacy credits. Total non-interest income increased $1.9 million to $7.8 million YTD December 2020 from $5.9 million for the same period in 2019. The largest contributing factor to the positive variance was sold mortgage income, which surged during the last three quarters of 2020 due to the low-interest-rate environment and the strategic pricing of the bank's mortgage rates. Growing non-interest income to reduce margin dependence continues to be a strategic focus of Springs Valley Bank & Trust. Non-interest expense increased $1.4 million to $15.8 million YTD December 2020 from $14.4 million for the same period in 2019. This expense increase was largely 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. The largest components of this expense have been increased staffing expenses, additional premises and equipment expenses, and additional data processing expenses. Elevated employee expenses related to mortgage volume have also been a contributing factor to increased non-interest expense in 2020.

"The first half of 2020 presented Springs Valley and the world at large with seemingly insurmountable disruption and uncertainty around Covid-19," stated President & CEO, Jamie Shinabarger. "However, as the year played out, Springs Valley's staff, management, and board were able to successfully achieve impressive results through precise execution in the areas of balance sheet management (reducing funding costs and expanding net interest margin), sold mortgages (assisting over 900 households with refinances which put real money back into family budgets, home purchases, or home constructions), and SBA PPP lending of $21.7 million that helped over 400 small businesses live to fight another day."

Another notable contributor to the Springs Valley's 2020 performance came from the Financial Advisory Group's rebound the second half of the year on the strength of a resilient equities market, helping households maintain, grow, or pass on generational assets to beneficiaries.

Shinabarger concluded by adding, "With Springs Valley having successfully bolstered loan reserves, managed overall asset quality indicators, and grown our newest banking centers in Princeton and Washington, 2020 was truly a remarkable year both in terms of challenges and results. Perhaps the best indicator of SVB&T's performance is its EPS of $8.66 (19.94% growth compared to 2019), which, combining the year with the previous eight, creates the ninth (2012-2020) consecutive year of record performance in the company's 119-year history." Additionally, over the same nine-year timeframe, Springs Valley has grown loans and deposits at a compounded annual growth rate (CAGR) of 10.17% and 8.76%, respectively.

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
31-Dec 31-Dec
2020 2019
Assets
Cash and due from banks
 $25,704 $10,535
Interest-bearing time deposits
 1,267 1,200
Fed funds sold
 10,201 10,745
Available for sale securities
 61,460 57,820
Other investments
 2,738 2,567
Loans held for sale
 894 156
Loans net of allowance for loan losses
 368,266 345,822
Premises and equipment
 6,141 6,636
Bank-owned life insurance
 9,002 8,820
Accrued interest receivable
 2,853 2,413
Foreclosed assets held for sale
 720 129
Other assets
 6,872 6,007
Total assets
 $496,118 $452,850

Liabilities and Stockholders' Equity
Noninterest-bearing deposits
 82,900 51,344
Interest-bearing deposits
 314,087 309,846
Borrowed funds
 37,000 34,764
Subordinated debentures
 5,000 5,000
Accrued interest payable and other liabilities
 5,761 6,029
Total liabilities
 $444,748 $406,983
Stockholders' equity - substantially restricted
 51,370 45,867
Total liabilities and stockholders' equity
 $496,118 $452,850

Three Months Ended Twelve Months Ended
31-Dec 31-Dec
2020 2019 2020 2019
Operating Data:
Interest & dividend income
 $5,429 $5,242 $20,412 $19,558
Interest expense
 700 1,439 3,810 5,513
Net interest income
 $4,729 $3,803 $16,602 $14,045
Provision for loan loss
 1,212 157 2,967 885
Net interest income after provision for loan losses
 $3,517 $3,646 $13,635 $13,160
Fiduciary activities
 878 773 3,211 2,915
Customer service fees
 152 195 584 713
Increase in cash surrender value of life insurance
 45 42 181 168
Other income
 1,116 475 3,817 2,078
Total noninterest income
 $2,191 $1,485 $7,793 $5,874
Salary & employee benefits
 2,529 2,254 9,391 8,290
Premises and equipment
 485 453 1,964 1,666
Data processing
 412 401 1,621 1,442
Deposit insurance premium
 31 0 123 22
Professional fees
 182 222 761 877
Other expenses
 473 520 1,960 2,053
Total noninterest expense
 $4,112 $3,850 $15,820 $14,350
Income before taxes
 1,596 1,281 5,608 4,684
Income tax expense
 234 188 767 628
Net income
 $1,362 $1,093 $4,841 $4,056
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
 $2.44 $1.96 $8.66 $ { "@context": "https://schema.org", "@type": "FAQPage", "name": "SVB&T Corporation, Parent Company of Springs Valley Bank & Trust Company, Reports 2020 Fourth Quarter and Annual Earnings FAQs", "mainEntity": [ { "@type": "Question", "name": "What were SVBT's earnings for the fourth quarter of 2020?", "acceptedAnswer": { "@type": "Answer", "text": "SVBT reported fourth quarter earnings of $1.4 million or $2.44 EPS." } }, { "@type": "Question", "name": "How did SVBT's total assets change in 2020?", "acceptedAnswer": { "@type": "Answer", "text": "Total assets increased by $43.2 million to $496.1 million as of December 31, 2020." } }, { "@type": "Question", "name": "What contributed to the increase in SVBT's net interest income in Q4 2020?", "acceptedAnswer": { "@type": "Answer", "text": "The increase was primarily due to growth in earning assets, including PPP loans, and reduced funding costs." } }, { "@type": "Question", "name": "What was the year-to-date EPS for SVBT in 2020?", "acceptedAnswer": { "@type": "Answer", "text": "The year-to-date EPS for SVBT in 2020 was $8.66, a 19.94% increase from the prior year." } }, { "@type": "Question", "name": "How much did SVBT's deposits increase in 2020?", "acceptedAnswer": { "@type": "Answer", "text": "SVBT's deposits increased by $35.8 million to $397.0 million as of December 31, 2020." } } ] }

FAQ

What were SVBT's earnings for the fourth quarter of 2020?

SVBT reported fourth quarter earnings of $1.4 million or $2.44 EPS.

How did SVBT's total assets change in 2020?

Total assets increased by $43.2 million to $496.1 million as of December 31, 2020.

What contributed to the increase in SVBT's net interest income in Q4 2020?

The increase was primarily due to growth in earning assets, including PPP loans, and reduced funding costs.

What was the year-to-date EPS for SVBT in 2020?

The year-to-date EPS for SVBT in 2020 was $8.66, a 19.94% increase from the prior year.

How much did SVBT's deposits increase in 2020?

SVBT's deposits increased by $35.8 million to $397.0 million as of December 31, 2020.

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