SVB&T Corporation, Parent Company of Springs Valley Bank & Trust Company, Reports 2021 Fourth Quarter and Record Annual Earnings

JASPER, IN / ACCESSWIRE / February 7, 2022 / SVB&T Corporation (OTCQX:SVBT), parent company of Springs Valley Bank & Trust Company, today announced 2021 fourth quarter unaudited earnings of $1.22 million or $2.20 earnings per share (EPS), an 8.71% decrease over the same prior year period earnings on a per share basis. This fourth quarter 2021 performance translates to a return on average assets (ROAA) of 0.98%, compared to the same prior year period of 1.10%.

Net interest income before provision expense for the fourth quarter ended December 31, 2021 was $4.73 million compared to $4.73 million for the same period in 2020. Interest income decreased compared to the prior year fourth quarter due to repricing of assets in this low-rate environment as well as a reduction in PPP loan origination income. However, interest expense decreased to the same degree, primarily due to repricing of retail CD's and reduced balances in public funds, brokered CD's, and FHLB advances as elevated core deposit levels allowed these funding sources to be replaced at a lower cost. These results helped support the corporation's net interest margin which did not materially change from 4.02% in the fourth quarter of 2020 to 4.01% for the fourth quarter of 2021. Provision expense decreased $888,000 over the prior year fourth quarter as Springs Valley made substantial provisions to the allowance in the fourth quarter of 2020 as the Covid-19 pandemic was in full swing. Additionally, compared to the prior year fourth quarter, noninterest income decreased approximately $214,000 to $1.98 million from $2.19 million. Increased income from servicing fees on sold loans, electronic banking (E-Banking) services, and the Financial Advisory Group were exceeded by a decrease in sold mortgage income as this low mortgage rate cycle is waning and housing inventories remain low. Although sold mortgage volume has decreased, to maintain perspective, Springs Valley is on pace to record the second-best year in the company's history in terms of sold mortgage income; second only to 2020. Mortgage origination continues to be a strategic focus of Springs Valley's as it is a vital component of both serving the communities in which we operate and continuing to generate the superb financial performance highlighted in this earnings release. Noninterest expense increased $870,000 to $4.98 million from $4.11 million, attributable to increases in general operating expenses, the largest of which being increased salary and employee benefits expenses.

Quarter over trailing quarter earnings decreased approximately $692,000 or 36.14%. The earnings reduction was driven by higher noninterest expense, primarily due to adjustments to discretionary pay in the form of bonus and incentives and profit-sharing for employees as SVB&T Corporation had a record year with earnings of $7.38 million. Fourth quarter net interest income and noninterest income were relatively in line with 2021 third quarter results.

SVB&T Corporation book value has risen from $91.87 per share as of December 31, 2020, to $103.07 as of December 31, 2021, a 12.19% increase. SVB&T Corporation stock closed at $99.30 per share on the OTCQX exchange on December 31, 2021. In February of 2021, the corporation's board of directors authorized a share repurchase program through December 31, 2022. Under the program, the corporation is authorized to repurchase, from time to time as the corporation deems appropriate, shares of SVB&T Corporation's common stock with an aggregate purchase price of up to $2.00 million. As of December 31, 2021, SVB&T has repurchased 10,700 shares, with an average purchase price of $79.31, under the program.

Total assets decreased $6.02 to $490.10 million on December 31, 2021, compared to December 31, 2020 assets of $496.12 million. Total loans before allowance increased $12.07 million to $387.22 million on December 31, 2021, from $375.15 million on December 31, 2020. The loan growth was primarily generated through commercial and agriculture real estate lending. Although national loan demand levels are low from a historical standpoint, Springs Valley saw an uptick in loan demand in the fourth quarter and has a healthy pipeline heading into 2022. Additionally, Springs Valley was an active participant in small business lending via the SBA's Paycheck Protection Program. Springs Valley Bank & Trust made 445 PPP loans during Round 2 in 2021 for approximately $12.94 million. PPP lending was a benefit to local, small businesses and therefore was a primary focus for Springs Valley while funds were available through the SBA's Paycheck Protection Program. As of the end of December 2021, Springs Valley has 62 PPP loans for approximately $1.08 million still on the balance sheet. Essentially 100% of the 2020 Round 1 PPP loans have been forgiven, and over 83% of Round 2 PPP loans have been forgiven as of the end of December. Allowance as a percent of total loans was 1.88% as of December 31, 2021, compared to 1.60% as of December 31, 2020. Springs Valley has continued to conservatively reserve out of an abundance of caution for potential future credit concerns that could result from the economic impact of the ongoing Covid-19 pandemic. Total deposits decreased $10.08 million to $386.91 million on December 31, 2021, from $396.99 million on December 31, 2020. Noninterest-bearing deposits increased by approximately $9.82 million due to growth in both business and consumer accounts. Interest-bearing deposits have decreased by approximately $19.90 million. The decrease was driven by reductions in cash held by the Financial Advisory Group and reductions in both retail and brokered CD's. Springs Valley has strategically utilized excess cash to let higher cost brokered CD's mature without being replaced in order to reduce the institution's cost of funds.

Year to date (YTD) unaudited earnings for the twelve months ended December 31, 2021 was a record $7.38 million or $13.36 EPS, a 54.81% increase over the same prior year period earnings on a per share basis. This YTD performance translates to a ROAA of 1.48%, compared to the same prior year period of 1.00%.

Net interest income before provision expense for the twelve months ended December 31, 2021 was $18.76 million compared to $16.60 million for the same period in 2020, an increase of $2.16 million. Interest income increased approximately $298,000 compared to the same prior year period, largely due to the amortization of a greater amount of PPP loan origination fees and higher commercial real estate loan balances. Additionally, interest expense decreased by $1.86 million over the same time frame due to the low-rate environment and its impact on deposit and borrowing rates, as well as balance sheet management strategies that have involved letting higher cost borrowings mature without being replaced, further contributing to the growth in net interest income. Net interest margin expanded as well, from 3.65% to 3.99% for fiscal years 2020 and 2021, respectively. YTD provision expense decreased by $1.68 million as Springs Valley had a large recovery in March of 2021 which allowed the institution to make smaller provision expenses in the second quarter of 2021, coupled with the fact that larger provisions were made in 2020 as the country was still in the initial stages of the Covid-19 pandemic. Total noninterest income increased $797,000 to $8.59 million YTD December 2021 from $7.79 million for the same period in 2020. The largest contributing factors to the positive variance were increased Financial Advisory Group income and E-Banking income. Growing noninterest income to reduce margin dependence continues to be a strategic focus of Springs Valley Bank & Trust. Noninterest expense increased $1.46 million to $17.28 million YTD December 2021 from $15.82 million for the same period in 2020. This expense increase continues to be 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 personnel and staffing expenses (including elevated discretionary pay in the form of bonuses and profit-sharing contributions due to the record earnings year), additional premises and equipment expenses, and additional data processing expenses. Springs Valley continues to have a strategic focus in the Daviess and Gibson County markets, as we are relatively new entrants with the addition of our banking centers in Washington and Princeton, respectively.

"While 2021 had its share of turmoil and uncertainty in the economic markets, both domestically and globally, the banking environment remained incredibly resilient," stated President and CEO, Jamie Shinabarger. He continued, "As a result, Springs Valley Bank & Trust Company recorded our best year in the 120-year franchise history with per share earnings registering $13.36 (compared to 2020's $8.63)." Diversified noninterest income streams comprised of sold mortgages, PPP residuals, Financial Advisory Group fees, and bank service fees, combined with strong net interest income (due in large part to a very low cost of funds), produced extraordinary top-line revenue. Shinabarger recognized the bank's two newest banking centers by commenting, "I am especially pleased that Princeton and Washington met their 2021 budgeted goals and continue to gain traction. It is proof-positive that the community banking model we operate with hallmarks of "a high-touch, personalized customer service experience," delivered by relationship-minded staff, is alive and well in our rural markets."

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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.

SOURCE: SVB&T Corporation