SVB&T Corporation (OTCQX: SVBT), the parent company of Springs Valley Bank & Trust Company, today announced unaudited fourth quarter 2021 earnings of $1.22 million or earnings per share (EPS) of 2 $.20, a decrease of 8.71% compared to the same period of the previous year. on a per share basis. This performance in the fourth quarter of 2021 translates into a return on average assets (ROAA) of 0.98%, compared to the same period of the previous year of 1.10%.
Net interest income before provisions for the fourth quarter ended December 31, 2021 was $4.73 million, compared to $4.73 million for the same period in 2020. decreased compared to the fourth quarter of the previous year due to the revaluation of assets in this low rate environment. as well as a reduction in PPP loan origination revenue. However, interest expense declined to the same extent, primarily due to the repricing of retail CDs and the reduction in balances of public funds, traded CDs and FHLB advances, as high levels of basic deposit have made it possible to replace these sources of financing at a lower cost. These results helped support the company’s net interest margin, which did not change materially from 4.02% in the fourth quarter of 2020 to 4.01% in the fourth quarter of 2021. fourth quarter of 2020 as the Covid-19 pandemic was in full swing. Also, compared to the fourth quarter of the previous year, non-interest income decreased by approximately $214,000 to $1.98 million from $2.19 million. The increase in revenue from servicing fees for loans sold, e-Banking and the financial advisory group was outpaced by a decrease in mortgage revenue sold as this cycle of low mortgage rates fades and housing stocks remain low. Although the volume of mortgages sold has declined, to stay the course, Springs Valley is poised to record the second-best year in company history for mortgage income sold; second only to 2020. Mortgage origination continues to be a strategic focus of Springs Valley, as it is essential both to serve the communities in which we operate and to continue to generate the superb performance financial statements highlighted in this press release. Non-interest expense increased by $870,000 to $4.98 million from $4.11 million, due to higher general operating expenses, the most significant of which is the increase in salary and benefits expenses.
Quarter-over-quarter earnings decreased by approximately $692,000 or 36.14%. The reduction in profit was driven by an increase in non-interest expense, primarily due to discretionary compensation adjustments in the form of bonuses and incentives and profit sharing for employees, as SVB&T Corporation experienced a record year with profits of $7.38 million. Fourth quarter net interest income and non-interest income were relatively in line with the results for the third quarter of 2021.
The book value of SVB&T Corporation increased from $91.87 per share as of December 31, 2020 to $103.07 as of December 31, 2021, an increase of 12.19%. Shares of SVB&T Corporation closed at $99.30 per share on the OTCQX exchange on December 31, 2021. In February 2021, the company’s board of directors authorized a share buyback program through December 31, 2022 Under this program, the Company is authorized to repurchase, from time to time, as the Company deems appropriate, common stock of SVB&T Corporation 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 by $6.02 to $490.10 million as of December 31, 2021, compared to assets of $496.12 million as of December 31, 2020. Total loans before provision decreased increased by $12.07 million to $387.22 million as of December 31, 2021, from $375.15 million as of December 31, 2020. Loan growth was primarily generated by commercial real estate and agricultural loans. Although national loan demand levels are historically low, Springs Valley saw an increase in loan demand in the fourth quarter and has a healthy pipeline heading into 2022. Additionally, Springs Valley has been active in small business lending through SBA Paycheck Protection. Program. Springs Valley Bank & Trust made 445 PPP loans in the second round in 2021 for around $12.94 million. PPP loans were a benefit to local small businesses and therefore a primary focus for Springs Valley, while funds were available through the SBA’s Paycheck Protection Program. At the end of December 2021, Springs Valley still had 62 PPP loans for about $1.08 million on the balance sheet. Virtually 100% of 2020 Round 1 PPP loans have been forgiven, and more than 83% of Round 2 PPP loans have been forgiven by the end of December. The provision as a percentage of total loans was 1.88% as of December 31, 2021, compared to 1.60% as of December 31, 2020. Springs Valley continued to reserve itself cautiously out of caution for potential future credit issues that may result from the economic impact of the current Covid-19 pandemic. Total deposits decreased by $10.08 million to $386.91 million as of December 31, 2021 from $396.99 million as of December 31, 2020. Non-interest bearing deposits increased by approximately $9.82 million due to growth in business and personal accounts. Interest bearing deposits decreased by approximately $19.90 million. The decline is due to the reduction in cash held by the financial advisory group and the reduction in retail and brokerage CDs. Springs Valley strategically used excess cash to let higher cost traded CDs mature without being replaced to reduce the institution’s cost of funds.
Unaudited year-to-date earnings for the twelve months ended December 31, 2021 reached a record $7.38 million or $13.36 per share, an increase of 54.81% over earnings per share for the same period of the previous year. This YTD performance translates into an ROAA of 1.48%, compared to the same period of the previous year of 1.00%.
Net interest income before provisions 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 by approximately $298,000 compared to the same prior year period, largely due to the amortization of a higher amount of PPP loan origination fees and balances higher commercial real estate loans. In addition, interest expense decreased by $1.86 million over the same period due to the low rate environment and its impact on deposit and borrowing rates, as well as strategies balance sheet management which consisted of allowing higher cost borrowings to mature without being replaced, further contributing to the growth of net interest income. Net interest margin also increased from 3.65% to 3.99% for fiscal 2020 and 2021, respectively. Year-to-date provision expense decreased by $1.68 million as Springs Valley experienced a significant recovery in March 2021, allowing the institution to reduce provision expense in the second quarter by 2021, coupled with the fact that larger provisions were made in 2020 while the country was still in the early stages of the Covid-19 pandemic. Total non-interest income increased by $797,000 to $8.59 million since December 2021, compared to $7.79 million for the same period in 2020. The main factors contributing to the positive variance were the increase in financial advisory group revenue and online banking revenue. Growth of non-interest income to reduce reliance on margins continues to be a strategic objective of Springs Valley Bank & Trust. Non-interest expenses increased by $1.46 million to $17.28 million since December 2021, compared to $15.82 million for the same period in 2020. This increase in expenses continues to be largely due to various overhead items that were required to build the infrastructure necessary for the bank’s future growth. and serve a growing clientele. The most significant elements of these expenses were increased personnel and personnel expenses (including high discretionary compensation in the form of bonuses and profit sharing contributions due to the record profit year), additional expenditure on premises and equipment and additional expenditure on data processing. Springs Valley continues to have a strategic focus on 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 has had its share of turmoil and uncertainty in economic markets, both domestically and internationally, the banking environment has remained incredibly resilient,” said Chairman and Chief Executive Officer Jamie Shinabarger. . He continued, “As a result, Springs Valley Bank & Trust Company recorded our best year in the franchise’s 120-year history with earnings per share recording $13.36 (vs. $8.63 in 2020).” Diversified non-interest income streams comprised of sold mortgages, PPP residuals, financial advisory group fees and banking service fees, combined with high net interest income (largely due to a cost of very low funds), produced extraordinary income. Shinabarger acknowledged the bank’s two newest banking centers, commenting, “I’m especially pleased that Princeton and Washington have met their 2021 budget targets and continue to gain momentum. This is proof that our community banking model, characterized by “a personalized and highly tactile customer service experience”, delivered by relationship-minded staff, is alive and well in our rural markets. »