SVB&T Corporation, Parent Company of Springs Valley Bank & Trust Company, Reports 2021 Third Quarter and Year to Date Earnings

*JASPER, IN / ACCESSWIRE / November 1, 2021 /* SVB&T Corporation (OTCQX:SVBT), parent company of Springs Valley Bank & Trust Company, today announced 2021 third quarter unaudited earnings of $1.91 million or $3.48 earnings per share (EPS), a 50.65% increase over the same prior year period earnings on a per share basis. This third quarter 2021 performance translates to a return on average assets (ROAA) of 1.53%, compared to the same prior year period of 1.04%.

Net interest income before provision expense for the third quarter ended September 30, 2021 was $4.75 million compared to $4.25 million for the same period in 2020, an increase of $504,000. This increase can primarily be attributed to Paycheck Protection Program (PPP) loans and amortization of the associated origination fees, and, to an even greater degree, reduced funding costs of both deposits and borrowings resulting from balance sheet management strategies and the current low interest rate environment. These results drove net interest margin expansion for the corporation from 3.63% in the third quarter of 2020 to 4.05% for the third quarter of 2021. Provision expense decreased $475,000 over the prior year third quarter as Springs Valley made substantial provisions to the allowance in the third quarter last year as the pandemic was in full swing. Additionally, compared to the prior year third quarter, noninterest income decreased approximately $21,000 to $2.14 million from $2.16 million. Increases in E-Banking income and Financial Advisory Group income, resulting from a resilient equities market and strategic investing to properly position customer portfolios in this low-rate environment, 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 somewhat, 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 $173,000 to $4.22 million from $4.05 million, attributable to increases in general operating expenses.

Quarter over trailing quarter earnings decreased approximately $103,000 or 5.11%. The earnings reduction was driven by lower net interest income as increased provision expense for the quarter more than offset higher interest income and lower interest expense, as well as a decrease in noninterest income due to slowing sold mortgage volume, as discussed above. However, the decrease in noninterest expense for the quarter did mitigate the earnings reduction.

SVB&T Corporation book value has risen from $91.87 per share as of December 31, 2020, to $101.77 as of September 30, 2021, a 10.78% increase. SVB&T Corporation stock closed at $93.50 per share on the OTCQX exchange on September 30, 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 September 30, 2021, SVB&T has repurchased 10,700 shares, with an average purchase price of $79.31, under the program.

Total assets increased $198,000 to $496.32 million on September 30, 2021, compared to December 31, 2020 assets of $496.12 million. Total loans before allowance increased $8.21 million to $383.36 million on September 30, 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 extremely low, even potentially negative, from a historical standpoint, Springs Valley has seen an uptick in loan demand in the third quarter and has a healthy pipeline heading into the fourth quarter of 2021. 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 September 2021, Springs Valley has 170 PPP loans for approximately $4.41 million still on the balance sheet. Essentially 100% of the 2020 Round 1 PPP loans have been forgiven, and approximately 66% of Round 2 PPP loans have already been forgiven as of the end of September. Allowance as a percent of total loans was 1.86% as of September 30, 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 $1.78 million to $395.21 million on September 30, 2021, from $396.99 million on December 31, 2020. Noninterest-bearing deposits have increased by approximately $6.98 million, primarily due to growth in consumer accounts. Interest-bearing deposits have decreased by approximately $8.76 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 nine months ended September 30, 2021 was $6.16 million or $11.16 EPS, a 79.42% increase over the same prior year period earnings on a per share basis. This YTD performance translates to an ROAA of 1.65%, compared to the same prior year period of 0.97%.

Net interest income before provision expense for the nine months ended September 30, 2021 was $14.03 million compared to $11.87 for the same period in 2020, an increase of $2.16 million. Interest income increased approximately $553,000 as compared to the same prior year period, largely due to the amortization of PPP loan origination fees. Additionally, interest expense decreased by $1.60 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 3.52% to 3.99%, through September 30 of 2020 and 2021, respectively. YTD provision expense decreased by $794,000 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 early stages of the pandemic. Total noninterest income increased $1.01 million to $6.61 million YTD September 2021 from $5.60 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 $584,000 to $12.29 million YTD September 2021 from $11.71 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, 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.

"The economy is clearly facing headwinds in the areas of inflation, lack of workforce, lack of affordable housing stock, supply chain disruption, conflicting realities surrounding energy, and a deeply divided political environment," stated President and CEO, Jamie Shinabarger. He continued, "But in spite of these drags, the momentum that began in 2020 in response to the pandemic (historically low interest rates, a very strong equities market, and government spending that resulted in robust household and small business liquidity) slowed but continued through the third quarter of 2021." Mortgage refinances have slowed but purchase and construction mortgages are still in demand by borrowers wishing to lock-in low fixed rates. The Financial Advisory division is enjoying the benefits of a strong stock market which continues to bolster their financial contribution to bank performance. Funding the balance sheet remains at unprecedented low levels and is expected to remain muted through year-end. Loan growth is modest but compares favorably to national loan demand metrics and should continue to rebound as excess business liquidity moderates and business fundamentals strengthen, which is what we're seeing locally as we move into the fourth quarter with a healthy loan pipeline. Asset quality indicators remain solid by all measures. "In totality, these combined factors validate that Springs Valley is well-positioned to finish strong in 2021," Shinabarger concluded.

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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.

*Selected Consolidated Financial Data of SVB&T Corporation*
*(In Thousands, Except Shares Outstanding and Per Share Data)*

*Unaudited*

*Audited*

*30-Sep*

*31-Dec*

*2021*

*2020*

*2020*

*Assets*
Cash and due from banks $13,058

$13,865

$25,704

Interest-bearing time deposits 1,255

1,246

1,267

Fed funds sold 9,835

6,557

10,201

Available for sale securities 66,480

61,153

61,460

Other investments 2,738

2,738

2,738

Loans held for sale 1,382

3,662

894

Loans net of allowance for loan losses 374,840

380,286

368,266

Premises and equipment 6,459

6,265

6,141

Bank-owned life insurance 9,130

8,957

9,002

Accrued interest receivable 3,055

3,061

2,853

Foreclosed assets held for sale 562

670

720

Mortgage servicing rights 1,342

917

835

Lender risk account (FHLBI) 1,408

943

1,100

Other assets 4,772

4,564

4,937

*Total assets*

*$496,316*

*$494,884*

*$496,118*


*Liabilities and Stockholders' Equity*
Noninterest-bearing deposits 89,880

73,647

82,900

Interest-bearing deposits 305,328

305,390

314,087

Borrowed funds 35,500

55,000

37,000

Subordinated debentures 5,000

5,000

5,000

Accrued interest payable and other liabilities 4,700

5,833

5,761

*Total liabilities*

*$440,408*

*$444,870*

*$444,748*


Stockholders' equity - substantially restricted 55,908

50,014

51,370

*Total liabilities and stockholders' equity*

*$496,316*

*$494,884*

*$496,118*

*Three Months Ended*

*Nine Months Ended*

*30-Sep*

*30-Sep*

*2021*

*2020*

*2021*

*2020*

*Operating Data:*
Interest and dividend income $5,232

$5,074

$15,536

$14,983

Interest expense 479

825

1,509

3,110

Net interest income

$4,753

$4,249

$14,027

$11,873

Provision for loan losses 387

862

961

1,755

*Net interest income after provision for loan losses*

*$4,366*

*$3,387*

*$13,066*

*$10,118*

Fiduciary activities 1,056

856

2,995

2,333

Customer service fees 186

142

452

432

Increase in cash surrender value of life insurance 42

44

129

137

Sold mortgage income 566

904

2,006

2,087

Realized gain/(loss) on securities 1



10

8

Other income 290

216

1,020

605

*Total noninterest income*

*$2,141*

*$2,162*

*$6,612*

*$5,602*

Salary and employee benefits 2,545

2,495

7,265

6,862

Premises and equipment 511

488

1,553

1,479

Data processing 441

402

1,309

1,209

Deposit insurance premium 32

31

94

91

Professional fees 185

176

559

578

Other expenses 507

456

1,512

1,489

*Total noninterest expense*

*$4,221*

*$4,048*

*$12,292*

*$11,708*

Income before taxes 2,286

1,501

7,386

4,012

Income tax expense 371

211

1,225

533

*Net income* *$1,915*

*$1,290*

*$6,161*

*$3,479*


Shares outstanding 549,346

559,136

549,346

559,136

Average shares - basic 549,650

559,136

551,957

559,136

Average shares - diluted 549,650

559,136

551,957

559,136

Basic earnings per share $3.48

$2.31

$11.16

$6.22

Diluted earnings per share $3.48

$2.31

$11.16

$6.22


*Other Data:*
Yield on average assets 4.18%

4.10%

4.15%

4.19%

Cost on average assets 0.38%

0.67%

0.40%

0.87%

Interest rate spread 3.80%

3.43%

3.75%

3.32%


Net interest margin 4.05%

3.63%

3.99%

3.52%


Number of full service banking centers 6

6

6

6


Return on average assets 1.53%

1.04%

1.65%

0.97%

Average assets $500,673

$495,354

$499,217

$476,856


Return on average equity 13.95%

10.49%

15.50%

9.77%

Average equity $54,924

$49,167

$52,992

$47,496


Equity to assets ratio (EOP) 11.26%

10.11%

11.26%

10.11%


Average total deposits $400,183

$378,722

$399,890

$370,466


Loans past due 30 to 89 days (still accruing) $665

$1,492

$665

$1,492

Loans past due 90 days or more (still accruing) $385

$524

$385

$524

Nonaccrual loans $1,476

$1,611

$1,476

$1,611


Book value per share $101.77

$89.45

$101.77

$89.45

Market value per share - end of period close $93.50

$63.00

$93.50

$63.00

*SOURCE: *SVB&T Corporation
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