BERLIN, MD, Feb. 21, 2022 (GLOBE NEWSWIRE) — via NewMediaWire � Calvin B. Taylor Bankshares, Inc. (the Company) (OTCQX: TYCB), parent company of Calvin B. Taylor Bank, today reported net income of $9.48 million for the twelve months ended December 31, 2021, as compared to $7.27 million for the twelve months ended December 31, 2020. Net income was $2.14 million for the fourth quarter ended December 31, 2021 (4Q21), as compared to $1.41 million for the fourth quarter ended December 31, 2020 (4Q20) and $2.67 million for the third quarter ended September 30, 2021 (3Q21). Highlights of the companys financial results are noted below and included in the following tables.
Quarterly Results of Operations
Loan interest revenue, including fees, increased to $5.37 million in 4Q21, as compared to $4.81 million in 4Q20, as the result of continued organic loan growth and repayment of SBA PPP loans. Upon repayment of a PPP loan by the SBA, unamortized net loan fees are recognized and reported as loan interest revenue. SBA PPP loan interest revenue, including fees, was $734 thousand in 4Q21, as compared to $335 thousand in 4Q20 and $852 thousand in 3Q21. Unamortized net loan fees related to SBA PPP loans were $290 thousand as of December 31, 2021, as compared to $641 thousand as of December 31, 2020 and $994 thousand as of September 30, 2021. The yield on loans was 4.90% in 4Q21, as compared to 4.56% in 4Q20 and 4.81% in 3Q21. The increase in loan yields in 4Q21 is primarily due to the increase in SBA PPP loan interest revenue, including fees, recognized in 4Q21 as a result of SBA PPP loan repayments.
Net interest income increased to $5.72 million in 4Q21, as compared to $4.96 million in 4Q20 and was $5.76 million in 3Q21. Increases in loan interest revenue related to PPP loans, as noted above, was the primary contributor to the growth in net interest income. Interest revenue associated with debt securities and other earning assets also increased due to growth in underlying balances. Interest expense associated with customer deposits is slightly higher in 4Q21 due to growth in the underlying balances. Net interest margin decreased to 2.63% in 4Q21, as compared to 2.99% in 4Q20 and 2.76% in 3Q21. Average deposits increased in 4Q21 by $201.9 million, or 33.2%, as compared to 4Q20, and was the primary reason for the decrease in net interest margin. Net interest margin decreased in 4Q21, as compared to the prior quarter, due to higher average deposits balances in 4Q21.
A provision for loan losses was not recorded in 4Q21, as compared to $165 thousand recorded in 4Q20. Net charge offs in 4Q21 were $11 thousand, as compared to net charge offs of $16 thousand recognized in 4Q20 and were primarily related to overdraft deposit accounts. Government economic stimulus payments, PPP loans, foreclosure moratoriums, and increasing residential real estate prices have mitigated charge offs related to the COVID-19 pandemic. However, uncertainty about borrowers ability to repay and real estate values subsequent to the pandemic and a reduction in government economic stimulus has prevented a reduction in the allowance for loan losses at this time.
Noninterest income was $888 thousand in 4Q21, as compared to $775 thousand in 4Q20 and $1.03 million in 3Q21. The increase in noninterest income in 4Q21 over 4Q20 is primarily related to higher noninterest income from debit card interchange fees and merchant payment processing fees. The improvements in both revenue sources can be attributed to increased consumer spending as COVID-19 pandemic restrictions were removed and consumers resumed spending.
Noninterest expense increased 2.4% to $3.85 million in 4Q21, as compared to $3.76 million in 4Q20, due to higher costs of employee salary and benefits, marketing, and data processing. The increases in net interest income and noninterest income exceeded the increases in noninterest expense which resulted in the efficiency ratio decreasing from 65.72% in 4Q20 to 58.21% in 4Q21. Noninterest expense increased $673 thousand in 4Q21 compared to 3Q21 which primarily relates to year end discretionary bonuses and 401K contributions.
Net income was $2.14 million in 4Q21, as compared to $1.41 million in 4Q20 and $2.67 million in 3Q21. Sustained growth in deposits in the last 12 months associated with the COVID-19 pandemic resulted in an increase in average assets of 29.7% from 4Q20 to 4Q21. Net income increased by 51.4% during the same period which resulted in an increase to Return on Average Assets (ROA) from 0.80% in 4Q20 to 0.94% in 4Q21. Return on Average Stockholders Equity (ROE) increased from 6.00% in 4Q20 to 8.58% in 4Q21 due to an increase in average equity of 5.9%, as compared to a 51.4% increase in net income. Dividends declared were $0.29 per share in 4Q21 and 4Q20 which resulted in dividend payout ratios of 37.4% for 4Q21 and 56.9% for 4Q20.
Year to Date Results of Operations
Loan interest revenue, including fees, increased 11.3% to $20.7 million for the twelve months ended December 31, 2021, as compared to $18.6 million for the twelve months ended December 31, 2020, which is the result of continued organic loan growth and repayment of SBA PPP loans. Upon repayment of a PPP loan by the SBA, unamortized net loan fees are recognized and reported as loan interest revenue. PPP loan interest revenue, including fees, was $2.39 million for the twelve months ended December 31, 2021, as compared to $629 thousand for the twelve months ended December 31, 2020.
Net interest income increased 9.6% to $21.7 million for the twelve months ended December 31, 2021, as compared to $19.8 million for the twelve months ended December 31, 2020. Increases in loan interest revenue, as noted above, were partially offset by lower yields on debt securities and other earning assets as interest rates remain historically low. Net interest margin decreased to 2.79% for the twelve months ended December 31, 2021, as compared to 3.36% for the twelve months ended December 31, 2020. Average deposits for the twelve months ended December 31, 2021 increased by $195.9 million, or 31.1%, as compared to the same period in 2020, and was the primary reason for the lower net interest margin. SBA PPP loan originations, changes in consumer behavior, and additional government economic stimulus payments have contributed to the growth in average deposits.
Provision for loan losses was $125 thousand for the twelve months ended December 31, 2021, as compared to $965 thousand for the twelve months ended December 31, 2020. Net recoveries were $37 thousand for the twelve months ended December 31, 2021, as compared to net recoveries of $18 thousand in the same period in 2020. Government economic stimulus payments, PPP loans, foreclosure moratoriums, and increasing residential real estate prices have mitigated charge offs during the COVID-19 pandemic. However, uncertainty about borrowers ability to repay and real estate values subsequent to the pandemic and related reduction in government economic stimulus has prevented a reduction in the allowance for loan losses at this time.
Noninterest income increased to $4.0 million for the twelve months ended December 31, 2021, as compared to $2.9 million for the twelve months ended December 31, 2020, and was primarily due to nonrecurring and nontaxable income of $622 thousand recognized in 1Q21 related to income from death proceeds of bank owned life insurance. While income from the increase in cash surrender value of bank owned life insurance is generally consistent and recurring income, the income from death proceeds is not, and is triggered upon the death of an insured employee or former employee. Bank owned life insurance investments are used to recover present and long term costs of employee benefits and compensation. The remaining increase in noninterest income was related to a $566 thousand increase in noninterest income from debit card interchange fees and merchant payment processing fees which can be attributed to increased consumer spending as COVID-19 pandemic restrictions were removed and consumers resumed spending.
Noninterest expense increased from $12.1 million for the twelve months ended December 31, 2020 to $13.2 million for the twelve months ended December 31, 2021, and was primarily attributable to the opening of a new branch in Onley, Virginia in July 2020 and a decrease in the amount of salaries expense deferred due to lower origination costs for 2nd round PPP loans originated in 2021. In addition, FDIC deposit insurance premiums increased $122 thousand for the twelve months ended December 31, 2021, as compared to the same period in 2020, due to Small Bank Assessment Credits received in 2020 that offset the quarterly expense assessed by the FDIC. The efficiency ratio for the twelve months ended December 31, 2021 was 51.46%, as compared to 53.66% for the same period in 2020.
Net income increased 30.4% to $9.5 million for the twelve months ended December 31, 2021, as compared to $7.3 million for the twelve months ended December 31, 2020. Interest revenue from PPP loans and noninterest income from bank owned life insurance, debit card interchange fees, and merchant payment processing fees outpaced growth in noninterest expense resulting in an increase to net income. Sustained growth in deposits associated with the COVID-19 pandemic resulted in an increase in average assets of 31.1% for the twelve months ended December 31, 2021, as compared to the same period in 2020. Growth in net income and average assets were approximately the same which resulted in an ROA of 1.15% for the twelve months ended December 31, 2021 and December 31, 2020. ROE increased from 7.84% for the twelve months ended December 31, 2020 to 9.73% for the twelve months ended December 31, 2021 due to an increase in average equity of 5.0%, as compared to an increase in net income of 30.4%. Dividends declared were $1.16 per share in the twelve months ended December 31, 2021 compared to $1.10 per share for the same period in 2020, an increase of 5.5%. Dividend payout ratios were 33.8% for the twelve months ended December 31, 2021 and 42.0% for the same period in 2020.
Financial Condition
Total assets were $904.5 million as of December 31, 2021, as compared to $711.8 million as of December 31, 2020 and $914.0 million as of September 30, 2021. Significant asset growth was primarily the result of customer behavior changes and government economic stimulus programs related to the COVID-19 pandemic which resulted in a significant increase in customer deposits. Deposits totaled $803.2 million as of December 31, 2021, as compared to $614.4 million as of December 31, 2020 and $807.9 million as of September 30, 2021. Total loans as of December 31, 2021 were $434.9 million, as compared to $423.5 million as of December 31, 2020 which represents growth of $11.4 million, or 2.7%. Loan growth since December 31, 2020 is the result of $29.5 million of organic loan growth attributable to strong commercial and residential real estate loan demand in our markets. This growth was offset by an $18.1 million decrease in PPP loans in the last 12 months as a result of ongoing repayments by the SBA as customers receive forgiveness of their PPP loans. Loans decreased $11.0 million since September 30, 2021 which can be attributed to $15.6 million decrease in PPP loans that was partially offset by $4.6 million in organic loan growth. PPP loans, net of unamortized loans fees, were $6.0 million as of December 31, 2021, as compared to $24.2 million as of December 31, 2020 and $21.7 million as of September 30, 2021. The loans to deposits ratio as of December 31, 2021 was 54.1%, as compared to 68.9% as of December 31, 2020 and 55.2% as of September 30, 2021.
As a result of the COVID-19 pandemic and related economic uncertainty in our markets, a temporary loan payment deferral program was established in the 2nd quarter of 2020 for both commercial and consumer borrowers impacted by the pandemic. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided financial institutions the ability to provide loan payment accommodations and short-term modifications without requiring the loans to be reported and accounted for as Troubled Debt Restructurings. The majority of borrowers in the program received 6 month payment deferral periods and the related deferral period expired in 4th quarter of 2020. Certain borrowers voluntarily resumed their contractual payments prior to the end of the deferral period. As of December 31, 2020, all loans in the temporary payment deferral program were restored and resumed contractual payments. As of December 31, 2021, loans past due 30 days or more totaled $1.99 million which includes $458 thousand of loans that previously received temporary payment deferral.
Average assets grew by 31.1% to $825.4 million for the twelve months ended December 31, 2021, as compared to $629.5 million for the twelve months ended December 31, 2020. Significant average asset growth was primarily the result of customer behavior changes and government economic stimulus programs related to the COVID-19 pandemic which resulted in a significant increase in average deposits. Average deposits increased 35.7% for the twelve months ended December 31, 2021, as compared to same period in 2020, while average loans grew by 11.1%. Average loans increased $44.5 million and were $446.8 million for the twelve months ended December 31, 2021, as compared to $402.3 million for the twelve months ended December 31, 2020. SBA PPP loans contributed to $8.9 million of the increase in average loans while the remaining $35.6 million increase in average loans was attributable to strong commercial and residential real estate loan demand in the last 12 months. The average loans to average deposits ratio decreased to 61.5% for the twelve months ended December 31, 2021, as compared to 75.2% for the same period in 2020, and relates to significant growth in average deposits associated with the COVID-19 pandemic.
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| Calvin B. Taylor Bankshares, Inc. & Subsidiary | ||||||||
| Financial Highlights | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||
| December 31, | % | December 31, | % | |||||
| Results of Operations | 2021 | 2020 | Change | 2021 | 2020 | Change | ||
| Net interest income | $5,721,130 | $4,961,837 | 15.3% | $21,680,227 | $19,775,842 | 9.6% | ||
| Provision for loan losses | $ - | $165,000 | -100.0% | $125,000 | $965,000 | -87.0% | ||
| Noninterest income | $888,386 | $774,876 | 14.6% | $4,049,613 | $2,873,476 | 40.9% | ||
| Noninterest expense | $3,850,768 | $3,761,079 | 2.4% | $13,213,173 | $12,063,304 | 9.5% | ||
| Net income | $2,140,748 | $1,413,634 | 51.4% | $9,480,667 | $7,268,014 | 30.4% | ||
| Net income per share | $0.78 | $0.51 | 52.1% | $3.43 | $2.62 | 30.8% | ||
| Dividend per share | $0.29 | $0.29 | 0.0% | $1.16 | $1.10 | 5.5% | ||
| Dividend payout ratio | 37.40% | 56.89% | 33.82% | 41.98% | ||||
| Average assets | $913,335,154 | $704,175,818 | 29.7% | $825,408,616 | $629,497,297 | 31.1% | ||
| Average loans | $435,123,740 | $419,211,495 | 3.8% | $446,813,318 | $402,298,573 | 11.1% | ||
| Average deposits | $810,312,556 | $608,449,556 | 33.2% | $726,035,888 | $534,995,652 | 35.7% | ||
| Average loans to average deposits | 53.70% | 68.90% | 61.54% | 75.20% | ||||
| Average stockholders’ equity | $99,849,273 | $94,308,170 | 5.9% | $97,425,334 | $92,746,273 | 5.0% | ||
| Average stockholders’ equity to average assets | 10.93% | 13.39% | 11.80% | 14.73% | ||||
| Ratios | ||||||||
| Net interest margin | 2.63% | 2.99% | 2.79% | 3.36% | ||||
| Return on average assets | 0.94% | 0.80% | 1.15% | 1.15% | ||||
| Return on average stockholders’ equity | 8.58% | 6.00% | 9.73% | 7.84% | ||||
| Efficiency ratio | 58.21% | 65.72% | 51.46% | 53.66% | ||||
| Stock Repurchased | ||||||||
| Number of shares | 4,404 | 700 | 529.1% | 12,172 | 1,994 | 510.4% | ||
| Repurchase amount | $158,254 | $23,933 | 561.2% | $421,834 | $63,337 | 566.0% | ||
| Average price per share | $35.93 | $34.19 | 5.1% | $34.66 | $31.76 | 9.1% | ||
| December 31, | December 31, | % | December 31, | September 30, | % Change | |||
| Financial Condition | 2021 | 2020 | Change | 2021 | 2021 | Annualized | ||
| Assets | $904,478,786 | $711,795,304 | 27.1% | $904,478,786 | $914,014,070 | -4.2% | ||
| Loans | $434,866,477 | $423,467,766 | 2.7% | $434,866,477 | $445,837,961 | -9.8% | ||
| Deposits | $803,245,622 | $614,437,080 | 30.7% | $803,245,622 | $807,902,713 | -2.3% | ||
| Stockholders’ equity | $99,088,916 | $94,785,130 | 4.5% | $99,088,916 | $98,753,483 | 1.4% | ||
| Common stock – shares outstanding | 2,760,760 | 2,772,932 | -0.4% | 2,760,760 | 2,765,164 | -0.6% | ||
| Book value per share | $35.89 | $34.18 | 5.0% | $35.89 | $35.71 | 2.0% | ||
| Loans to deposits | 54.14% | 68.92% | 54.14% | 55.18% | ||||
| Equity to assets | 10.96% | 13.32% | 10.96% | 10.80% | ||||
| Calvin B. Taylor Bankshares, Inc. and Subsidiary | |||
| Consolidated Balance Sheets | |||
| (unaudited) | |||
| December 31, | December 31, | ||
| 2021 | 2020 | ||
| Assets | |||
| Cash and cash equivalents | |||
| Cash and due from banks | $9,931,724 | $14,392,359 | |
| Federal funds sold and interest bearing deposits | 280,331,067 | 156,712,965 | |
| Total cash and cash equivalents | 290,262,791 | 171,105,324 | |
| Time deposits in other financial institutions | 3,478,221 | 8,733,754 | |
| Debt securities available for sale, at fair value | 128,654,564 | 72,166,997 | |
| Debt securities held to maturity, at amortized cost | 13,967,244 | 5,994,955 | |
| Equity securities, at cost | 1,103,833 | 1,240,233 | |
| Loans | 434,866,477 | 423,467,766 | |
| Less: allowance for loan losses | (1,998,728) | (1,836,451) | |
| Net loans | 432,867,749 | 421,631,315 | |
| Accrued interest receivable | 1,701,446 | 2,402,222 | |
| Prepaid expenses | 645,725 | 612,188 | |
| Other real estate owned | - | - | |
| Premises and equipment, net | 12,904,446 | 12,951,511 | |
| Computer software | 342,148 | 389,236 | |
| Bank owned life insurance | 18,223,348 | 13,405,779 | |
| Other assets | 327,271 | 1,161,790 | |
| Total assets | $904,478,786 | $711,795,304 | |
| Liabilities and Stockholders’ Equity | |||
| Deposits | |||
| Non-interest bearing | $283,096,833 | $211,945,179 | |
| Interest bearing | 520,148,789 | 402,491,901 | |
| Total deposits | 803,245,622 | 614,437,080 | |
| Accrued interest payable | 26,029 | 26,837 | |
| Dividends payable | 800,620 | 804,150 | |
| Accrued expenses | 623,132 | 602,027 | |
| Non-qualified deferred compensation | 645,716 | 485,626 | |
| Deferred income taxes | 6,759 | 605,357 | |
| Other liabilities | 41,992 | 49,097 | |
| Total liabilities | 805,389,870 | 617,010,174 | |
| Stockholders’ equity | |||
| Common stock, par value $1 per share; | |||
| authorized 10,000,000 shares; issued and outstanding | 2,760,760 | 2,772,932 | |
| Additional paid-in capital | 2,398,533 | 2,808,195 | |
| Retained earnings | 94,670,987 | 88,396,800 | |
| Accumulated other comprehensive income (loss), net of tax | (741,364) | 807,203 | |
| Total stockholders’ equity | 99,088,916 | 94,785,130 | |
| Total liabilities and stockholders’ equity | $904,478,786 | $711,795,304 | |
| Calvin B. Taylor Bankshares, Inc. and Subsidiary | |||||||
| Consolidated Statements of Comprehensive Income (unaudited) | |||||||
| For the three months ended | For the twelve months ended | ||||||
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2021 | Dec 31, 2020 | ||||
| Interest revenue | |||||||
| Loans, including fees | $5,370,705 | $4,808,154 | $20,743,244 | $18,629,385 | |||
| U. S. Treasury and government agency debt securities | 107,108 | 104,428 | 316,116 | 494,008 | |||
| Mortgage-backed debt securities | 253,779 | 83,045 | 763,388 | 518,458 | |||
| State and municipal debt securities | 57,812 | 51,762 | 204,809 | 213,978 | |||
| Federal funds sold and interest bearing deposits | 118,048 | 46,137 | 296,319 | 251,653 | |||
| Time deposits in other financial institutions | 24,421 | 66,243 | 139,461 | 383,376 | |||
| Total interest revenue | 5,931,873 | 5,159,769 | 22,463,337 | 20,490,858 | |||
| Interest expense | |||||||
| Deposits | 210,743 | 197,932 | 783,110 | 715,016 | |||
| Net interest income | 5,721,130 | 4,961,837 | 21,680,227 | 19,775,842 | |||
| Provision for loan losses | - | 165,000 | 125,000 | 965,000 | |||
| Net interest income after provision for loan losses | 5,721,130 | 4,796,837 | 21,555,227 | 18,810,842 | |||
| Noninterest income | |||||||
| Debit card and ATM | 351,665 | 295,411 | 1,394,789 | 1,060,624 | |||
| Service charges on deposit accounts | 220,951 | 190,551 | 776,076 | 674,955 | |||
| Merchant payment processing | 90,453 | 42,259 | 454,985 | 223,101 | |||
| Increase in cash surrender value of bank owned life insurance | 83,854 | 114,667 | 362,890 | 344,049 | |||
| Income from bank owned life insurance death proceeds | - | - | 622,455 | - | |||
| Dividends | 39,780 | 41,382 | 57,746 | - | 65,993 | ||
| Gain (loss) on disposition of debt securities | (5,456) | 13,444 | 50,869 | 168,757 | |||
| Gain (loss) on disposition of fixed assets | (13,875) | - | (24,564) | 1,400 | |||
| Miscellaneous | 121,014 | 77,162 | 354,367 | 334,597 | |||
| Total noninterest income | 888,386 | 774,876 | 4,049,613 | 2,873,476 | |||
| Noninterest expenses | |||||||
| Salaries | 1,768,257 | 1,687,638 | 5,751,045 | 5,224,862 | |||
| Employee benefits | 654,364 | 641,100 | 1,856,256 | 1,750,621 | |||
| Occupancy | 238,192 | 255,955 | 925,648 | 877,435 | |||
| Furniture and equipment | 188,168 | 196,976 | 777,574 | 714,354 | |||
| Data processing | 178,358 | 148,183 | 727,825 | 557,725 | |||
| ATM and debit card | 157,161 | 132,311 | 545,657 | 457,494 | |||
| Marketing | 105,901 | 70,294 | 304,173 | 347,190 | |||
| Directors fees | 68,100 | 82,100 | 311,650 | 321,950 | |||
| Telecommunication services | 81,915 | 80,466 | 328,468 | 320,428 | |||
| Deposit insurance premiums | 60,300 | 37,880 | 217,306 | 95,255 | |||
| Other operating | 350,052 | 428,176 | 1,467,571 | 1,395,990 | |||
| Total noninterest expenses | 3,850,768 | 3,761,079 | 13,213,173 | 12,063,304 | |||
| Income before income taxes | 2,758,748 | 1,810,634 | 12,391,667 | 9,621,014 | |||
| Income taxes | 618,000 | 397,000 | 2,911,000 | 2,353,000 | |||
| Net income | 2,140,748 | 1,413,634 | 9,480,667 | 7,268,014 | |||
| Other comprehensive income, net of tax | |||||||
| Unrealized gains (losses) on available for sale debt securities | |||||||
| arising during the period, net of tax | (846,440) | (76,931) | (1,548,567) | 638,924 | |||
| Comprehensive income | $1,294,308 | $1,336,703 | $7,932,100 | $7,906,938 | |||
| Earnings per common share – basic and diluted | $0.78 | $0.51 | $3.43 | $2.62 | |||
About Calvin B. Taylor Banking Company
Calvin B. Taylor Banking Company, the bank subsidiary of Calvin B. Taylor Bankshares, Inc. (OTCQX: TYCB), founded in 1890, offers a wide range of loan, deposit, and ancillary banking services through both physical and digital delivery channels. The Company has 12 banking locations within the eastern coastal area of the Delmarva Peninsula including Worcester County, Maryland, Sussex County, Delaware and Accomack County, Virginia.
Contact
M. Dean Lewis, Senior Vice President and Chief Financial Officer
410-641-1700, taylorbank.com
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