Calvin B. Taylor Bankshares, Inc. Reports Fourth Quarter and Year End Financial Results for 2021

Rhea-AI Summary

Calvin B. Taylor Bankshares, Inc. (OTCQX: TYCB) reported a net income of $9.48 million for 2021, up from $7.27 million in 2020. The fourth quarter net income was $2.14 million, a 51.4% increase year-over-year. Total assets grew 27.1% to $904.5 million, while average deposits surged by 31.1%. Net interest income rose 9.6% to $21.68 million, driven by organic loan growth and PPP loan repayments, although net interest margin decreased to 2.79%. Dividends declared were $1.16 per share, reflecting a 5.5% increase.

Positive

• Net income increased 30.4% year-over-year to $9.48 million in 2021.
• Total assets grew by 27.1% to $904.5 million.
• Average deposits increased 31.1% year-over-year.
• Net interest income rose 9.6% to $21.68 million.
• Dividends declared increased 5.5% to $1.16 per share.

Negative

• Net interest margin decreased to 2.79% from 3.36% in 2020.
• Total assets decreased 4.2% from $914.0 million as of September 30, 2021.

BERLIN, MD, Feb. 21, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire – Calvin B. Taylor Bankshares, Inc. (the “Company”) (OTCQX: TYCB), parent company of Calvin B. Taylor Bank, today reported net income of $9.48 million for the twelve months ended December 31, 2021, as compared to $7.27 million for the twelve months ended December 31, 2020.  Net income was $2.14 million for the fourth quarter ended December 31, 2021 (“4Q21”), as compared to $1.41 million for the fourth quarter ended December 31, 2020 (“4Q20”) and $2.67 million for the third quarter ended September 30, 2021 (“3Q21”). Highlights of the company’s financial results are noted below and included in the following tables.

• Repayments of Paycheck Protection Program (“PPP”) loans by the Small Business Administration (“SBA”) associated with loan forgiveness were $15.6 million in 4Q21 and was partially offset by growth in non-PPP loans of $4.7 million. Loan growth, excluding PPP loans, was $29.5 million or 7.4% since December 31, 2020 which is attributable to strong residential and commercial real estate loan demand.
• Net interest income increased $759 thousand or 15.3% in 4Q21, as compared to 4Q20, including a $399 thousand increase in PPP interest revenue, including fees.  Net interest income increased $1.90 million in 2021 as compared to 2020 which was primarily due to a $1.76 million increase in PPP interest revenue, including fees.
• The provision for loan losses in 4Q21 decreased $165 thousand, as compared to 4Q20, and decreased $840 thousand in 2021 as compared to 2020, as economic conditions related to the COVID-19 pandemic have improved.
• Total assets decreased to $904.5 million at December 31, 2021, a 4.2% decrease compared to September 30, 2021, as the result of seasonal deposit outflows but were partially offset by continued organic growth in core deposits. Total assets increased by $192.7 million or 27.1% since December 31, 2020 and 2021 average assets increased $195.9 million or 31.1% compared to 2020 average assets.
• Net interest margin was 2.79% in 2021 and 3.36% in 2020.  The decrease in net interest margin is attributable to the continued growth in deposits and assets resulting from changes in customer behavior and government economic stimulus programs associated with the COVID-19 pandemic.   
• Dividends declared were $1.16 per share in the twelve months ended December 31, 2021 compared to $1.10 per share for the same period in 2020, an increase of 5.5%.  

Quarterly Results of Operations

Loan interest revenue, including fees, increased to $5.37 million in 4Q21, as compared to $4.81 million in 4Q20, as the result of continued organic loan growth and repayment of SBA PPP loans. Upon repayment of a PPP loan by the SBA, unamortized net loan fees are recognized and reported as loan interest revenue.  SBA PPP loan interest revenue, including fees, was $734 thousand in 4Q21, as compared to $335 thousand in 4Q20 and $852 thousand in 3Q21. Unamortized net loan fees related to SBA PPP loans were $290 thousand as of December 31, 2021, as compared to $641 thousand as of December 31, 2020 and $994 thousand as of September 30, 2021. The yield on loans was 4.90% in 4Q21, as compared to 4.56% in 4Q20 and 4.81% in 3Q21. The increase in loan yields in 4Q21 is primarily due to the increase in SBA PPP loan interest revenue, including fees, recognized in 4Q21 as a result of SBA PPP loan repayments.    

Net interest income increased to $5.72 million in 4Q21, as compared to $4.96 million in 4Q20 and was $5.76 million in 3Q21. Increases in loan interest revenue related to PPP loans, as noted above, was the primary contributor to the growth in net interest income.  Interest revenue associated with debt securities and other earning assets also increased due to growth in underlying balances. Interest expense associated with customer deposits is slightly higher in 4Q21 due to growth in the underlying balances.  Net interest margin decreased to 2.63% in 4Q21, as compared to 2.99% in 4Q20 and 2.76% in 3Q21.  Average deposits increased in 4Q21 by $201.9 million, or 33.2%, as compared to 4Q20, and was the primary reason for the decrease in net interest margin. Net interest margin decreased in 4Q21, as compared to the prior quarter, due to higher average deposits balances in 4Q21.           

A provision for loan losses was not recorded in 4Q21, as compared to $165 thousand recorded in 4Q20.  Net charge offs in 4Q21 were $11 thousand, as compared to net charge offs of $16 thousand recognized in 4Q20 and were primarily related to overdraft deposit accounts.  Government economic stimulus payments, PPP loans, foreclosure moratoriums, and increasing residential real estate prices have mitigated charge offs related to the COVID-19 pandemic.  However, uncertainty about borrowers’ ability to repay and real estate values subsequent to the pandemic and a reduction in government economic stimulus has prevented a reduction in the allowance for loan losses at this time.    

Noninterest income was $888 thousand in 4Q21, as compared to $775 thousand in 4Q20 and $1.03 million in 3Q21. The increase in noninterest income in 4Q21 over 4Q20 is primarily related to higher noninterest income from debit card interchange fees and merchant payment processing fees. The improvements in both revenue sources can be attributed to increased consumer spending as COVID-19 pandemic restrictions were removed and consumers resumed spending.  

Noninterest expense increased 2.4% to $3.85 million in 4Q21, as compared to $3.76 million in 4Q20, due to higher costs of employee salary and benefits, marketing, and data processing. The increases in net interest income and noninterest income exceeded the increases in noninterest expense which resulted in the efficiency ratio decreasing from 65.72% in 4Q20 to 58.21% in 4Q21. Noninterest expense increased $673 thousand in 4Q21 compared to 3Q21 which primarily relates to year end discretionary bonuses and 401K contributions.

Net income was $2.14 million in 4Q21, as compared to $1.41 million in 4Q20 and $2.67 million in 3Q21.  Sustained growth in deposits in the last 12 months associated with the COVID-19 pandemic resulted in an increase in average assets of 29.7% from 4Q20 to 4Q21. Net income increased by 51.4% during the same period which resulted in an increase to Return on Average Assets (“ROA”) from 0.80% in 4Q20 to 0.94% in 4Q21. Return on Average Stockholders’ Equity (“ROE”) increased from 6.00% in 4Q20 to 8.58% in 4Q21 due to an increase in average equity of 5.9%, as compared to a 51.4% increase in net income. Dividends declared were $0.29 per share in 4Q21 and 4Q20 which resulted in dividend payout ratios of 37.4% for 4Q21 and 56.9% for 4Q20.  

Year to Date Results of Operations

Loan interest revenue, including fees, increased 11.3% to $20.7 million for the twelve months ended December 31, 2021, as compared to $18.6 million for the twelve months ended December 31, 2020, which is the result of continued organic loan growth and repayment of SBA PPP loans. Upon repayment of a PPP loan by the SBA, unamortized net loan fees are recognized and reported as loan interest revenue. PPP loan interest revenue, including fees, was $2.39 million for the twelve months ended December 31, 2021, as compared to $629 thousand for the twelve months ended December 31, 2020.  

Net interest income increased 9.6% to $21.7 million for the twelve months ended December 31, 2021, as compared to $19.8 million for the twelve months ended December 31, 2020. Increases in loan interest revenue, as noted above, were partially offset by lower yields on debt securities and other earning assets as interest rates remain historically low. Net interest margin decreased to 2.79% for the twelve months ended December 31, 2021, as compared to 3.36% for the twelve months ended December 31, 2020.  Average deposits for the twelve months ended December 31, 2021 increased by $195.9 million, or 31.1%, as compared to the same period in 2020, and was the primary reason for the lower net interest margin. SBA PPP loan originations, changes in consumer behavior, and additional government economic stimulus payments have contributed to the growth in average deposits.         

Provision for loan losses was $125 thousand for the twelve months ended December 31, 2021, as compared to $965 thousand for the twelve months ended December 31, 2020.  Net recoveries were $37 thousand for the twelve months ended December 31, 2021, as compared to net recoveries of $18 thousand in the same period in 2020.  Government economic stimulus payments, PPP loans, foreclosure moratoriums, and increasing residential real estate prices have mitigated charge offs during the COVID-19 pandemic.  However, uncertainty about borrowers’ ability to repay and real estate values subsequent to the pandemic and related reduction in government economic stimulus has prevented a reduction in the allowance for loan losses at this time.    

Noninterest income increased to $4.0 million for the twelve months ended December 31, 2021, as compared to $2.9 million for the twelve months ended December 31, 2020, and was primarily due to nonrecurring and nontaxable income of $622 thousand recognized in 1Q21 related to income from death proceeds of bank owned life insurance.  While income from the increase in cash surrender value of bank owned life insurance is generally consistent and recurring income, the income from death proceeds is not, and is triggered upon the death of an insured employee or former employee.  Bank owned life insurance investments are used to recover present and long term costs of employee benefits and compensation.  The remaining increase in noninterest income was related to a $566 thousand increase in noninterest income from debit card interchange fees and merchant payment processing fees which can be attributed to increased consumer spending as COVID-19 pandemic restrictions were removed and consumers resumed spending.     

Noninterest expense increased from $12.1 million for the twelve months ended December 31, 2020 to $13.2 million for the twelve months ended December 31, 2021, and was primarily attributable to the opening of a new branch in Onley, Virginia in July 2020 and a decrease in the amount of salaries expense deferred due to lower origination costs for 2nd round PPP loans originated in 2021.  In addition, FDIC deposit insurance premiums increased $122 thousand for the twelve months ended December 31, 2021, as compared to the same period in 2020, due to Small Bank Assessment Credits received in 2020 that offset the quarterly expense assessed by the FDIC.  The efficiency ratio for the twelve months ended December 31, 2021 was 51.46%, as compared to 53.66% for the same period in 2020. 

Net income increased 30.4% to $9.5 million for the twelve months ended December 31, 2021, as compared to $7.3 million for the twelve months ended December 31, 2020.  Interest revenue from PPP loans and noninterest income from bank owned life insurance, debit card interchange fees, and merchant payment processing fees outpaced growth in noninterest expense resulting in an increase to net income.  Sustained growth in deposits associated with the COVID-19 pandemic resulted in an increase in average assets of 31.1% for the twelve months ended December 31, 2021, as compared to the same period in 2020.  Growth in net income and average assets were approximately the same which resulted in an ROA of 1.15% for the twelve months ended December 31, 2021 and December 31, 2020.  ROE increased from 7.84% for the twelve months ended December 31, 2020 to 9.73% for the twelve months ended December 31, 2021 due to an increase in average equity of 5.0%, as compared to an increase in net income of 30.4%.  Dividends declared were $1.16 per share in the twelve months ended December 31, 2021 compared to $1.10 per share for the same period in 2020, an increase of 5.5%.  Dividend payout ratios were 33.8% for the twelve months ended December 31, 2021 and 42.0% for the same period in 2020. 

Financial Condition

Total assets were $904.5 million as of December 31, 2021, as compared to $711.8 million as of December 31, 2020 and $914.0 million as of September 30, 2021.  Significant asset growth was primarily the result of customer behavior changes and government economic stimulus programs related to the COVID-19 pandemic which resulted in a significant increase in customer deposits.  Deposits totaled $803.2 million as of December 31, 2021, as compared to $614.4 million as of December 31, 2020 and $807.9 million as of September 30, 2021.  Total loans as of December 31, 2021 were $434.9 million, as compared to $423.5 million as of December 31, 2020 which represents growth of $11.4 million, or 2.7%.  Loan growth since December 31, 2020 is the result of $29.5 million of organic loan growth attributable to strong commercial and residential real estate loan demand in our markets.  This growth was offset by an $18.1 million decrease in PPP loans in the last 12 months as a result of ongoing repayments by the SBA as customers receive forgiveness of their PPP loans.  Loans decreased $11.0 million since September 30, 2021 which can be attributed to $15.6 million decrease in PPP loans that was partially offset by $4.6 million in organic loan growth.  PPP loans, net of unamortized loans fees, were $6.0 million as of December 31, 2021, as compared to $24.2 million as of December 31, 2020 and $21.7 million as of September 30, 2021.  The loans to deposits ratio as of December 31, 2021 was 54.1%, as compared to 68.9% as of December 31, 2020 and 55.2% as of September 30, 2021.              

As a result of the COVID-19 pandemic and related economic uncertainty in our markets, a temporary loan payment deferral program was established in the 2nd quarter of 2020 for both commercial and consumer borrowers impacted by the pandemic.  The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provided financial institutions the ability to provide loan payment accommodations and short-term modifications without requiring the loans to be reported and accounted for as Troubled Debt Restructurings.  The majority of borrowers in the program received 6 month payment deferral periods and the related deferral period expired in 4th quarter of 2020.  Certain borrowers voluntarily resumed their contractual payments prior to the end of the deferral period.  As of December 31, 2020, all loans in the temporary payment deferral program were restored and resumed contractual payments.  As of December 31, 2021, loans past due 30 days or more totaled $1.99 million which includes $458 thousand of loans that previously received temporary payment deferral.  

Average assets grew by 31.1% to $825.4 million for the twelve months ended December 31, 2021, as compared to $629.5 million for the twelve months ended December 31, 2020.  Significant average asset growth was primarily the result of customer behavior changes and government economic stimulus programs related to the COVID-19 pandemic which resulted in a significant increase in average deposits.  Average deposits increased 35.7% for the twelve months ended December 31, 2021, as compared to same period in 2020, while average loans grew by 11.1%.  Average loans increased $44.5 million and were $446.8 million for the twelve months ended December 31, 2021, as compared to $402.3 million for the twelve months ended December 31, 2020.  SBA PPP loans contributed to $8.9 million of the increase in average loans while the remaining $35.6 million increase in average loans was attributable to strong commercial and residential real estate loan demand in the last 12 months.  The average loans to average deposits ratio decreased to 61.5% for the twelve months ended December 31, 2021, as compared to 75.2% for the same period in 2020, and relates to significant growth in average deposits associated with the COVID-19 pandemic.  



Calvin B. Taylor Bankshares, Inc. & Subsidiary
Financial Highlights
	Three Months Ended				Twelve Months Ended
	December 31,		%		December 31,		%
Results of Operations	2021	2020	Change		2021	2020	Change
Net interest income	$5,721,130	$4,961,837	15.3%		$21,680,227	$19,775,842	9.6%
Provision for loan losses	$ -	$165,000	-100.0%		$125,000	$965,000	-87.0%
Noninterest income	$888,386	$774,876	14.6%		$4,049,613	$2,873,476	40.9%
Noninterest expense	$3,850,768	$3,761,079	2.4%		$13,213,173	$12,063,304	9.5%
Net income	$2,140,748	$1,413,634	51.4%		$9,480,667	$7,268,014	30.4%
Net income per share	$0.78	$0.51	52.1%		$3.43	$2.62	30.8%
Dividend per share	$0.29	$0.29	0.0%		$1.16	$1.10	5.5%
Dividend payout ratio	37.40%	56.89%			33.82%	41.98%
Average assets	$913,335,154	$704,175,818	29.7%		$825,408,616	$629,497,297	31.1%
Average loans	$435,123,740	$419,211,495	3.8%		$446,813,318	$402,298,573	11.1%
Average deposits	$810,312,556	$608,449,556	33.2%		$726,035,888	$534,995,652	35.7%
Average loans to average deposits	53.70%	68.90%			61.54%	75.20%
Average stockholders' equity	$99,849,273	$94,308,170	5.9%		$97,425,334	$92,746,273	5.0%
Average stockholders' equity to average assets	10.93%	13.39%			11.80%	14.73%
Ratios
Net interest margin	2.63%	2.99%			2.79%	3.36%
Return on average assets	0.94%	0.80%			1.15%	1.15%
Return on average stockholders' equity	8.58%	6.00%			9.73%	7.84%
Efficiency ratio	58.21%	65.72%			51.46%	53.66%
Stock Repurchased
Number of shares	4,404	700	529.1%		12,172	1,994	510.4%
Repurchase amount	$158,254	$23,933	561.2%		$421,834	$63,337	566.0%
Average price per share	$35.93	$34.19	5.1%		$34.66	$31.76	9.1%
	December 31,	December 31,	%		December 31,	September 30,	% Change
Financial Condition	2021	2020	Change		2021	2021	Annualized
Assets	$904,478,786	$711,795,304	27.1%		$904,478,786	$914,014,070	-4.2%
Loans	$434,866,477	$423,467,766	2.7%		$434,866,477	$445,837,961	-9.8%
Deposits	$803,245,622	$614,437,080	30.7%		$803,245,622	$807,902,713	-2.3%
Stockholders' equity	$99,088,916	$94,785,130	4.5%		$99,088,916	$98,753,483	1.4%
Common stock - shares outstanding	2,760,760	2,772,932	-0.4%		2,760,760	2,765,164	-0.6%
Book value per share	$35.89	$34.18	5.0%		$35.89	$35.71	2.0%
Loans to deposits	54.14%	68.92%			54.14%	55.18%
Equity to assets	10.96%	13.32%			10.96%	10.80%

Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Balance Sheets
	(unaudited)
	December 31,		December 31,
	2021		2020
Assets
Cash and cash equivalents
Cash and due from banks	$9,931,724		$14,392,359
Federal funds sold and interest bearing deposits	280,331,067		156,712,965
Total cash and cash equivalents	290,262,791		171,105,324
Time deposits in other financial institutions	3,478,221		8,733,754
Debt securities available for sale, at fair value	128,654,564		72,166,997
Debt securities held to maturity, at amortized cost	13,967,244		5,994,955
Equity securities, at cost	1,103,833		1,240,233
Loans	434,866,477		423,467,766
Less: allowance for loan losses	(1,998,728)		(1,836,451)
Net loans	432,867,749		421,631,315
Accrued interest receivable	1,701,446		2,402,222
Prepaid expenses	645,725		612,188
Other real estate owned	-		-
Premises and equipment, net	12,904,446		12,951,511
Computer software	342,148		389,236
Bank owned life insurance	18,223,348		13,405,779
Other assets	327,271		1,161,790
Total assets	$904,478,786		$711,795,304
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing	$283,096,833		$211,945,179
Interest bearing	520,148,789		402,491,901
Total deposits	803,245,622		614,437,080
Accrued interest payable	26,029		26,837
Dividends payable	800,620		804,150
Accrued expenses	623,132		602,027
Non-qualified deferred compensation	645,716		485,626
Deferred income taxes	6,759		605,357
Other liabilities	41,992		49,097
Total liabilities	805,389,870		617,010,174
Stockholders' equity
Common stock, par value $1 per share;
authorized 10,000,000 shares; issued and outstanding	2,760,760		2,772,932
Additional paid-in capital	2,398,533		2,808,195
Retained earnings	94,670,987		88,396,800
Accumulated other comprehensive income (loss), net of tax	(741,364)		807,203
Total stockholders' equity	99,088,916		94,785,130
Total liabilities and stockholders' equity	$904,478,786		$711,795,304

Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Comprehensive Income (unaudited)
	For the three months ended				For the twelve months ended
	Dec 31, 2021		Dec 31, 2020		Dec 31, 2021		Dec 31, 2020
Interest revenue
Loans, including fees	$5,370,705		$4,808,154		$20,743,244		$18,629,385
U. S. Treasury and government agency debt securities	107,108		104,428		316,116		494,008
Mortgage-backed debt securities	253,779		83,045		763,388		518,458
State and municipal debt securities	57,812		51,762		204,809		213,978
Federal funds sold and interest bearing deposits	118,048		46,137		296,319		251,653
Time deposits in other financial institutions	24,421		66,243		139,461		383,376
Total interest revenue	5,931,873		5,159,769		22,463,337		20,490,858
Interest expense
Deposits	210,743		197,932		783,110		715,016
Net interest income	5,721,130		4,961,837		21,680,227		19,775,842
Provision for loan losses	-		165,000		125,000		965,000
Net interest income after provision for loan losses	5,721,130		4,796,837		21,555,227		18,810,842
Noninterest income
Debit card and ATM	351,665		295,411		1,394,789		1,060,624
Service charges on deposit accounts	220,951		190,551		776,076		674,955
Merchant payment processing	90,453		42,259		454,985		223,101
Increase in cash surrender value of bank owned life insurance	83,854		114,667		362,890		344,049
Income from bank owned life insurance death proceeds	-		-		622,455		-
Dividends	39,780		41,382		57,746	-	65,993
Gain (loss) on disposition of debt securities	(5,456)		13,444		50,869		168,757
Gain (loss) on disposition of fixed assets	(13,875)		-		(24,564)		1,400
Miscellaneous	121,014		77,162		354,367		334,597
Total noninterest income	888,386		774,876		4,049,613		2,873,476
Noninterest expenses
Salaries	1,768,257		1,687,638		5,751,045		5,224,862
Employee benefits	654,364		641,100		1,856,256		1,750,621
Occupancy	238,192		255,955		925,648		877,435
Furniture and equipment	188,168		196,976		777,574		714,354
Data processing	178,358		148,183		727,825		557,725
ATM and debit card	157,161		132,311		545,657		457,494
Marketing	105,901		70,294		304,173		347,190
Directors fees	68,100		82,100		311,650		321,950
Telecommunication services	81,915		80,466		328,468		320,428
Deposit insurance premiums	60,300		37,880		217,306		95,255
Other operating	350,052		428,176		1,467,571		1,395,990
Total noninterest expenses	3,850,768		3,761,079		13,213,173		12,063,304
Income before income taxes	2,758,748		1,810,634		12,391,667		9,621,014
Income taxes	618,000		397,000		2,911,000		2,353,000
Net income	2,140,748		1,413,634		9,480,667		7,268,014
Other comprehensive income, net of tax
Unrealized gains (losses) on available for sale debt securities
arising during the period, net of tax	(846,440)		(76,931)		(1,548,567)		638,924
Comprehensive income	$1,294,308		$1,336,703		$7,932,100		$7,906,938
Earnings per common share - basic and diluted	$0.78		$0.51		$3.43		$2.62

About Calvin B. Taylor Banking Company 

Calvin B. Taylor Banking Company, the bank subsidiary of Calvin B. Taylor Bankshares, Inc. (OTCQX: TYCB), founded in 1890, offers a wide range of loan, deposit, and ancillary banking services through both physical and digital delivery channels. The Company has 12 banking locations within the eastern coastal area of the Delmarva Peninsula including Worcester County, Maryland, Sussex County, Delaware and Accomack County, Virginia.  

Contact

M. Dean Lewis, Senior Vice President and Chief Financial Officer

410-641-1700, taylorbank.com

FAQ

What were Calvin B. Taylor Bankshares' earnings for 2021?

The company reported a net income of $9.48 million for the year ended December 31, 2021.

How much did dividends increase for TYCB in 2021?

Dividends declared increased by 5.5% to $1.16 per share in 2021.

What was the net interest income for TYCB in 2021?

Net interest income for the year totaled $21.68 million, a 9.6% increase from 2020.

What is the net interest margin for TYCB?

The net interest margin decreased to 2.79% for the year ended December 31, 2021.

How did total assets change for TYCB in 2021?

Total assets grew by 27.1% to $904.5 million in 2021.