Salisbury Bancorp Inc Reports Operating Results (10-Q)

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May 17, 2010
Salisbury Bancorp Inc (SAL, Financial) filed Quarterly Report for the period ended 2010-03-31.

Salisbury Bancorp Inc has a market cap of $37.87 million; its shares were traded at around $22.45 with a P/E ratio of 26.41 and P/S ratio of 1.25. The dividend yield of Salisbury Bancorp Inc stocks is 4.99%.

Highlight of Business Operations:

Salisbury assumed approximately $11 million in deposits and acquired approximately $2.5 million in loans and the branch office located at 10 Granite Ave., Canaan, Connecticut from Webster Bank, National Association, as of the close of business on December 4, 2009. Salisbury recorded a core deposit intangible of $463,000 for deposits assumed.

Net income available to common shareholders was $479,000, or $0.28 per common share, for the first quarter ended March 31, 2010 compared with $1,081,000, or $0.64 per common share, for the first quarter of 2009.

Net interest income for the first quarter of 2010 decreased by $140,000, or 3%, from the first quarter of 2009. Average earning assets grew $55.3 million, or 12%, over the period, as a result of significant deposit growth, of which $34.0 million was invested in short term funds. The net interest margin (tax equivalent) declined 55 basis points to 3.25% compared with 3.80% a year ago due to several factors. The average yield on securities declined 103 basis points, due to the re-pricing of callable Agency bonds, increased prepayments on mortgage backed securities and lower volume. The increase in holdings of short-term funds also had a dilutive effect on the net interest margin of approximately 15 basis points.

The provision for loan losses for the first quarter of 2010 was $180,000, compared with $430,000 for the first quarter of 2009, which included a provision for emerging risks or unallocated reserves. Net loan charge-offs were $4,000 and $149,000 for the respective periods.

Non-interest income for the first quarter of 2010 decreased $480,000, or 30%, due to several one-time benefits in the first quarter of 2009, including $427,000 of securities gains, a $72,000 market adjustment gain from the re-financing of Bank Owned Life Insurance, and a $39,000 mortgage servicing rights impairment benefit. Income from sales of mortgage loans decreased $22,000 in the first quarter of 2010 due to lower loan origination volume. Loan sales were $4.4 million and $6.9 million, respectively, for the 2010 and 2009 periods. Service fees and charges increased $71,000, or 18%, in the first quarter of 2010 due to higher interchange, overdraft and other fees. Trust and Wealth Advisory revenues were substantially unchanged.

On a tax equivalent basis, interest income decreased $507,000, or 7.5%, to $6.3 million for the first quarter of 2010 as compared with the first quarter of 2009. Loan income decreased $22,000, or 0.5%, primarily due to a lower average yield, down 61 basis points, the impact of which was substantially offset by a $32.1 million, or 10.7%, increase in average loans. The decline in the average loan yield was caused by the effect of lower market interest rates on new loan origination, re-financing and adjustable rate re-pricing activity.

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