Investor Presentation
NASDAQ: SAL
Investor Information
Richard J. Cantele, Jr. | Peter Albero | Shelly L. Humeston |
President | Executive Vice President | Senior Vice President |
Chief Executive Officer | Chief Financial Officer | Secretary |
rcantele@salisburybank.com | palbero@salisburybank.com | shumeston@salisburybank.com |
860-453-3430 | 860-453-3440 | 860-453-3432 |
Forward Looking Statements
This presentation contains certain statements that may be considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results, performance or achievements of Salisbury may differ materially from those discussed in these forward-looking statements. We refer you to the documents Salisbury files from time to time with the Securities and Exchange Commission, especially the Company's last filed Form 10-K. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward- looking statements. You should carefully review all of these factors, and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this presentation, and Salisbury assumes no obligation to update forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
Unaudited data
All of the financial data presented herein is unaudited.
Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
1
Corporate Overview
- Full service community banking institution offering consumer and business banking products and services as well as trust and wealth advisory services with roots dating back to 1848
- Operating footprint includes 14 banking locations in Litchfield County, CT, Berkshire County, MA, and Dutchess County, Orange County, and Ulster County, NY ("Operating Counties")
- Franchise extends to within 50 miles of New York City
- 20 plus year history of dividend payments
- Seasoned and experienced management team
Key Statistics | Branch Footprint | |||
(as of December 31, 2019) | ||||
Total Assets ($000) | 1,112,448 | |||
Net Loans ($000) | 927,413 | |||
Total Deposits ($000) | 919,506 | |||
Total Shareholder's Equity ($000) | 113,655 | |||
Tangible Book Value per Common Share ($) | 34.98 | |||
Wealth Assets Under Administration ($000) | 777,503 | |||
Net Income - Year to date ($000) | 11,136 | |||
FTEs | 173 | |||
Common Stock Price ($) | 45.67 | |||
Market Capitalization ($MM) | 129.1 | |||
Price / Tangible Book Value (%) | 130.6 |
2
Core Businesses Serving Individuals, Families & Businesses
Retail / Business Banking | Business Lending |
- Retail / Business Deposits
- Electronic Banking Services
- Mobile
- Debit/Credit Card
- Remote Capture
- Cash Management
- Investment Management
- Trust & Estate Services
- Financial Planning
- Retirement Plan Advisory
- Private Banking
- Business Loans
- Commercial Mortgages
- Lines of Credit
- Government Guaranteed Loans
- Letters of Credit
- Mortgage Loans
- Home Equity Loans
- Consumer Loans
- Construction Loans
Trust & Wealth Advisory | Retail Lending | 3 |
Market Demographics
- Litchfield County's prestigious private and public school systems and Berkshire County's cultural offerings attract affluent individuals
- Dutchess County's median household income is 18% higher than the NY state median
- Orange County's median household income is 13% higher than the NY state median
- New Paltz, NY branch provides new opportunities in Ulster County
Deposits by County1
Ulster,
Orange, NY 5%
NY 11%
Litchfield,
Dutchess,CT 38%
NY 37%
Berkshire,
MA 9%
Deposits by State1
$451 Million | $322 Million |
NY | CT |
53% | 38% |
MA | |
9% |
$79 Million
County Market Share1
County | Number of | Market |
Branches | Share | |
Litchfield, CT | 4 | 9% |
Berkshire, MA | 3 | 2% |
Dutchess, NY | 5 | 4% |
Orange, NY | 1 | 1% |
Ulster, NY | 1 | 1% |
Source: S&P Global and Company data. 1 Excludes Broker deposits, CDARS one-ways buys and balances held in Branch Administration. | 4 |
Financial Overview | Assets | |||||
Disciplined asset growth driven organically and | $1,200 | |||||
through strategic acquisitions | $1,100 | $1,121.6 | $1,112.4 | |||
Acquired Riverside Bank (assets $239 million) in | ||||||
$987.0 | ||||||
2014 to expand footprint and diversify loan | $1,000 | |||||
$935.4 | ||||||
portfolio | $891.2 | |||||
$900 | ||||||
Acquired branches in New Paltz (2017) and | ||||||
$800 | ||||||
Fishkill, NY (2018) and relocated existing | ||||||
branches in Fishkill and Newburgh, NY (2018) | $700 | |||||
Trust & Wealth Advisory business diversifies | $600 | |||||
bank revenue streams | 2015 | 2016 | 2017 | 2018 | 2019 | |
Earnings Per Share (Basic) | |||||||
$4.50 | $3.95 | ||||||
$4.00 | |||||||
$3.50 | $3.04 | $3.15 | |||||
$3.00 | |||||||
$2.43 | |||||||
$2.50 | $2.25 | ||||||
$2.00 | |||||||
$1.50 | |||||||
$1.00 | |||||||
$0.50 | |||||||
$0.00 | |||||||
2015 | 2016 | 2017 | 2018 | 2019 | |||
Source: Company SEC filings. Dividend payout ratio based on reported basic EPS.
TBVPS and Dividend Payout Ratio
$40 | 60% | ||||
$35 | $29.39 | $34.98 | |||
$28.90 | $31.45 | 50% | |||
$30 | $27.69 | ||||
40% | |||||
$25 | 46.1% | 50.0% | |||
36.8% | |||||
$20 | 35.6% | 30% | |||
$15 | 28.4% | ||||
$10 | 20% | ||||
10% | |||||
$5 | |||||
$0 | 0% | ||||
2015 | 2016 | 2017 | 2018 | 2019 | |
5 |
Profitability Indicators
- Competition for deposits and loans continue to exert pressure on NIM
- Depositors are increasingly interest rate sensitive and we compete against mutuals and savings banks for loans
- Efficiency ratio for 2018 included non-recurring expenses of $266k; 2019 included non-recurring BOLI credit of $328k
- Improving efficiency and profitability are key strategic initiatives
Efficiency Ratio 2
75% | ||
70% | 69.1% | |
66.7% | 66.8% | |
65% | 63.0% | 64.1% |
60% |
55%
50%
2015 | 2016 | 2017 | 2018 | 2019 |
Net Interest Margin1 | ||||||
Return on Average Assets | ||||||
4.5% | NIM ex Purchase Accounting Impact | 1.25% | |||||||||
4.0% | 3.99% | ||||||||||
3.69% | 1.00% | 1.00% | |||||||||
3.58% | |||||||||||
0.94% | |||||||||||
3.5% | 3.35% | ||||||||||
3.66% | 3.27% | ||||||||||
3.47% | 3.45% | 0.75% | 0.72% | 0.83% | |||||||
3.0% | 3.27% | 3.27% | |||||||||
0.50% | 0.63% | ||||||||||
2.5% | |||||||||||
2.0% | 0.25% | ||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2015 | 2016 | 2017 | 2018 | 2019 | 6 | |
Source: Company SEC filings. | 1 Tax equivalent basis. | 2 Excluding $328k BOLI accounting adjustment, 2019 ratio was 64.9%. |
Balance Sheet Composition | |||||||||
$1,200 | Assets ($ Thousands) | 1,121,554 | 1,112,448 | 85% | |||||
$1,000 | 891,192 | 935,366 | 986,984 | 84% | |||||
83.4% | 83% | ||||||||
$800 | |||||||||
82% | |||||||||
$600 | 81.6% | 81.3% | 81.1% | 81% | |||||
80% | Gross Loans / Deposits | ||||||||
$400 | |||||||||
79% | |||||||||
$200 | 78.5% | 2015 | 93.4% | ||||||
78% | |||||||||
$0 | 77% | 2016 | 98.4% | ||||||
2015 | 2016 | 2017 | 2018 | 2019 | |||||
2017 | 99.1% | ||||||||
Loans, Net | Securities | Other | Net Loans as % of Assets | ||||||
2018 | 99.0% | ||||||||
$1,200 | 96% | ||||||||
Liabilities ($ Thousands) | 2019 | 101.8% | |||||||
1,018,095 | 94% | ||||||||
$1,000 | 94.2% | 92.9% | 998,793 | ||||||
889,470 | |||||||||
$800 | 800,618 | 841,359 | 92.1% | 92% | |||||
91.7% | 91.0% | 90% | |||||||
$600 | 88% | ||||||||
$400 | 86% | ||||||||
84% | |||||||||
$200 | |||||||||
82% | |||||||||
$0 | 2015 | 2016 | 2017 | 2018 | 2019 | 80% | |||
Deposits | FHLB Advances | Deposits as % of Liabilities |
Source: Company SEC filings. | 7 |
2015
Cons., HE
Land 6%
2%
C&I, | |
Municipal | Residential |
19% | 41% |
$704
Million
CRE 33%
Loans ($ millions) | 2015 | |
Residential | $289.8 | 41.2% |
CRE | 229.7 | 32.6% |
C&I, Municipality | 131.0 | 18.6% |
Land | 11.8 | 1.7% |
Cons., HE | 41.3 | 5.9% |
Gross Loans | $703.5 | 100.0% |
Loan Portfolio Yield: 4.68%1
CRE Loans / RBC2: 117%
Loan Composition
2017
Cons., HE
Land 5%
1%
C&I, | Residential |
Municipal | 43% |
19% |
$807
Million
CRE 32%
Loans ($ millions) | 2017 | |
Residential | $346.9 | 43.0% |
CRE | 259.3 | 32.1% |
C&I, Municipality | 150.2 | 18.6% |
Land | 12.2 | 1.5% |
Cons., HE | 38.6 | 4.8% |
Gross Loans | $807.2 | 100.0% |
Loan Portfolio Yield: 4.33%1
CRE Loans / RBC2: 136%
2019 | |
Land | Cons., HE |
1% | 4% |
C&I, Municipal | |
20% | Residential |
42% |
$936
Million
CRE 33%
Loans ($ millions) | 2019 | |
Residential | $393.6 | 42.0% |
CRE | 299.6 | 32.0% |
C&I, Municipality | 191.3 | 20.4% |
Land | 11.5 | 1.2% |
Cons., HE | 40.2 | 4.4% |
Gross Loans | $936.3 | 100% |
Loan Portfolio Yield: 4.34%
CRE Loans / RBC2: 165%
2015 - 2019 Loan CAGR: 7%
Source: Company SEC filings and S&P Global. 1 Yield reflected purchase accounting adjustments related to Riverside acquisition. 2 Risk-Based Capital. | 8 |
Credit Quality
- Continued improvements in credit quality with significant reduction in NPAs since 2015
- NCOs continue to trend lower, while coverage ratio has increased since 2016
- Loans past due 30 days or more 0.47% of gross loans at 12/31/19, down from 1.13% at 12/31/17
NCOs / Average Loans
0.250%
2.0%
1.5%
1.0%
0.5%
0.0%
1.00%
NPAs / Assets
1.82%
1.34%
0.74% 0.74%
0.35%
2015 | 2016 | 2017 | 2018 | 2019 |
Loan Loss Reserves / Gross Loans
0.200%0.19%
0.150%
0.100% | 0.08% | |
0.05% | 0.05% | |
0.050% | 0.04% | |
0.000% | ||
0.95%
0.90%
0.85%
0.80%
0.75%
0.81%
0.95%
0.85%
0.84%
0.80%
2015 | 2016 | 2017 | 2018 | 2019 |
Source: S&P Global and Company data and SEC filings.
2015 | 2016 | 2017 | 2018 | 2019 9 |
2015 | ||||
Jumbo Time | ||||
8% | NIB | |||
Retail Time | 27% | |||
8% | ||||
$755 | ||||
Million | ||||
IB Demand, | ||||
Savings & | ||||
MMDA | ||||
57% | ||||
Deposits ($ millions) | 2015 | |||
NIB | $201.3 | 26.7% | ||
IB Demand, Savings & MMDA | 428.9 | 56.8% | ||
Retail Time (< $100k) | 60.2 | 8.0% | ||
Jumbo Time (> $ 100k) | 64.2 | 8.5% | ||
Total | $754.5 | 100% |
Core Deposits: 83.5%
Cost of Deposits: 0.33%
Deposit Composition
2017
Jumbo Time
8%
Retail Time | NIB |
7% | |
27% | |
$816
Million
IB Demand,
Savings &
MMDA
59%
Deposits ($ millions) | 2017 | |
NIB | $220.5 | 27.0% |
IB Demand, Savings & MMDA | 478.1 | 58.6% |
Retail Time (< $100k) | 53.2 | 6.5% |
Jumbo Time (> $ 100k) | 63.6 | 7.8% |
Total | $815.5 | 100% |
Core Deposits: 85.7%
Cost of Deposits: 0.42%
2019
Jumbo Time
10%
Retail Time
6%NIB
26%
$920
Million
IB Demand,
Savings &
MMDA
58%
Deposits ($ millions) | 2019 | |
NIB | $237.9 | 25.9% |
IB Demand, Savings & MMDA | 553.9 | 60.2% |
Retail Time (< $100k) | 53.3 | 5.8% |
Jumbo Time (> $ 100k) | 74.4 | 8.1% |
Total | $919.5 | 100.0% |
Core Deposits: 86.1%
Cost of Deposits: 1.03%
2015 - 2019 Deposit CAGR: 5%
Source: Company SEC filings and Company data. | 10 |
AFS Securities Portfolio (2019)
Corp. Sub Debt
5%
SBA 20%
Municipal
30%
CMO
28%
US Gov't
Agency
3%
MBS 14%
Highlights
- Book value of $90.1 million or 8.1% of total assets
- Primarily collateralizes deposits and provides liquidity
- Average Yield: 3.06%
- Duration: 3.6 years
11
Source: Company SEC filings and Company data.
Tier 1 Capital Ratio 1 | Total Capital Ratio 2 | |||||||||||||||||||||||||
14% | 12.2% | 12.1% | 11.6% | 11.8% | 14% | 13.1% | 12.9% | 12.5% | 12.1% | 12.8% | ||||||||||||||||
12% | 11.2% | 12% | ||||||||||||||||||||||||
10% | 10% | |||||||||||||||||||||||||
8% | 8% | |||||||||||||||||||||||||
6% | 6% | |||||||||||||||||||||||||
4% | 4% | |||||||||||||||||||||||||
2% | 2% | |||||||||||||||||||||||||
0% | 0% | |||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||
Bank | Well Capitalized | |||||||||||||||||||||||||
Leverage Ratio 3 | ||||||||||||||||||||||||||
12% | ||||||||||||||||||||||||||
10% | 9.4% | 9.5% | 9.3% | 8.8% | 9.6% | |||||||||||||||||||||
8%
6%
4%
2%
0%
2015 | 2016 | 2017 | 2018 | 2019 | 12 | |
Source: Company SEC filings. | 1 Tier 1 Capital / Risk Weighted Assets | 2 Total Capital / Risk Weighted Assets | 3 Tier 1 Capital / Average Assets | |||
Trust & Wealth Advisory
- Trust & Wealth Advisory provides a source of diversified revenues (~ 9% of Bank revenue)
- This business differentiates us from our community banking peers
- Services include Trust and Estate Administration, Asset Management, 401k Advisory and Financial Planning
- Expansion into Hudson Valley continued with Trust office opening in Newburgh, NY
Gross Revenues
$4,500 | Thousands | |
$3,995 | ||
$3,750 | $3,700 | |
$3,477 | ||
$3,265 | $3,338 | |
$3,000 |
$2,250
$1,500
2015 | 2016 | 2017 | 2018 | 2019 |
Source: Company SEC filings.
Assets Under Administration | |||
$900 | Millions | ||
$800 | $777.5 | ||
$700 | $648.0 | ||
$610.2 |
$600
$516.4
$500
$400 $371.0
$300
$200
2015 | 2016 | 2017 | 2018 | 2019 |
13
Common Stock Price: NASDAQ: SAL
$50 | $44.65 | $45.67 | |||||||||
$45 | |||||||||||
$37.50 | |||||||||||
$40 | $33.48 | $36.18 | |||||||||
$35 | |||||||||||
$30 | $25.22 | $23.35 | $23.34 | $26.89 | $27.34 | ||||||
$25 | $21.75 | ||||||||||
$20 | |||||||||||
$15 | |||||||||||
$10 | |||||||||||
$5 | |||||||||||
$0 | |||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |
Period Ending | 2015 | 2016 | 2017 | 2018 | 2019 | |||
Tangible BV per common share ($) | 27.69 | 28.90 | 29.39 | 31.45 | 34.98 | |||
Price/Book (%) | 101.0 | 110.0 | 127.5 | 98.2 | 113.6 | |||
Market capitalization ($ in millions) | 91.5 | 103.4 | 124.4 | 101.0 | 129.1 | |||
Common shares outstanding (000s) | 2,734 | 2,758 | 2,785 | 2,807 | 2,826 | |||
Insider Ownership (%) | 18.7 | 19.1 | 12.08 1 | 12.12 | 10.17 | |||
Institutional Ownership (%) | 9.12 | 8.68 | 11.33 | 10.62 | 11.09 | |||
Annual Highs / | 33.70 / | 38.15 / | 48.35 / | 49.85 / | 47.05 / | |||
Lows ($) | 26.60 | 29.51 | 37.30 | 38.25 | 35.25 | 14 | ||
Source: S&P Global and Company SEC filings. 1 In April 2017, Salisbury Director Rudolph P. Russo passed away. Mr. Russo held approximately 6% of Salisbury's shares. |
Relative Stock Price Performance
60% | NASDAQ:SAL: 27.40 % | SNL U.S. Bank and Thrift: 31.68 % | S&P 500: 38.84 % | ||
50% | |||||
40% | |||||
30% | |||||
20% | |||||
10% | |||||
0% | |||||
10/1/2016 | 4/1/2017 | 10/1/2017 | 4/1/2018 | 10/1/2018 | 4/1/2019 |
Highlights:
- 20 + years of dividend payments
- Dividend yield of 2.45% at 12/31/19
- Quarterly dividend increased to $0.29 per common share in January 2020
Source: S&P Global and Company data.
15
Strategic Priorities:
- Organic growth and strategic acquisitions
- Wealth advisory
- Branches
- Whole bank
- Enhance efficiency and profitability
- Deepen penetration of existing markets
- Establish new client relationships
16
Why invest in Salisbury Bank…..
1
2
3
4
Steady Performance
Salisbury has delivered stable earnings, consistently paid a dividend and is well- capitalized.
Experienced Management
Salisbury's management team has extensive banking and financial services experience as well as in-depth local market knowledge.
Growth Potential
Salisbury has a proven track record for growing organically and through strategic acquisitions. Salisbury also has consolidated new and existing branches to realize efficiencies and savings.
Strong Governance
Salisbury's Board of Directors is actively engaged, experienced and holds management accountable.
17
Investor Presentation
NASDAQ: SAL
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Disclaimer
Salisbury Bancorp Inc. published this content on 24 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 January 2020 17:39:03 UTC