Jasper-Based SVB&T Releases Earnings Reports For Third Quarter and Year-to-Date


JASPER - Jasper-based SVB&T released its earnings reports this week.

It shows the local bank had an un-audited net income of $3 million dollars or $5.30 per share for the first 9 months of 2019.

That’s down just over 5% from the same period last year.

Book value has risen from $72.70 a share back in December to $80.79 as of September 30th.  That’s up 11% from last year.

Total assets increased $52.6 Million to $453.6 Million at September 30, 2019 compared to December 31, 2018 assets of $401.0 Million. Total Loans before allowances increased $36.5 Million to $346.4 Million at September 30, 2019 from $309.9 Million at December 31, 2018.

Net interest income before provision expense for the nine months ended September 30, 2019 was $10.2 Million compared to $9.6 Million for the same period 2018, an increase of $627,000. This increase was primarily a result of growth in earnings assets during the first nine months of the year as well as higher yields on earning assets which generated an increase in interest income of $1.9 Million over the same prior year period. 

However, cost of funds increased by $1.3 Million due to higher deposit balances, rate increases resulting from local competition for deposits, and increased borrowings to fund the gap between our loan and deposit growth, which negated some of the positive impact to net interest income. 

Total non-interest income increased $428,000 to $4.4 Million YTD September 2019 from $4.0 Million YTD for the same period 2018. This increase was primarily a result of the rebalancing opportunity from sold bonds in the investment portfolio, providing a pretax gain of $406,000 in the third quarter.

Non-interest expense increased $1.3 Million to $10.5 Million YTD September 2019 from $9.2 Million YTD for the same period 2018. As noted in the prior quarter’s earnings release, this expense increase was primarily driven by various overhead components that have been necessary to build out the infrastructure to support the future growth of Springs Valley Bank & Trust Company. Some of the largest components of this expense have been increased staffing, additional premises and equipment, and additional information technology initiatives, including further developing our digital service offering, implementing an integrated teller machine (ITM) network, and data processing support. 

Third quarter 2019 unaudited earnings of $1.3 Million or $2.30 EPS, was a 42.86% increase over the same period 2018 EPS. This also compares favorably in total dollars to $900,000 of unaudited earnings over the same period in 2018. This third quarter 2019 performance translates to a return on average assets (ROAA) of 1.15%, compared to the same prior year period of 0.89%. 

Following the year to date trend, third quarter net interest income experienced an uptick over the prior year third quarter with increased loan balances and higher average rates driving income higher, but this bump was muted to some degree as our cost of funding also increased. The bank did, along with an increase in non-interest income, more than offset the elevated non-interest expense leading to the increase in net income for the quarter as noted above.

 Factors driving higher non-interest income for the quarter, in addition to the bond sale from the investment portfolio, included fee income from both sold mortgages and sold SBA loans as these two sources of revenue significantly outpaced both the third quarter of 2018 by $91,000 and the trailing quarter by $198,000. This is an ongoing point of focus for the bank as we continue to strategically diversify revenue streams with specific emphasis on these sources of fee income to help mitigate reliance on margin via net interest income generation. 

Financial Advisory Group income (including both Trust and Brokerage services) has rebounded as well with third quarter 2019 income surpassing both the third quarter of 2018 by $59,000 and the trailing quarter by $63,000. 

The current third quarter over trailing quarter earnings increased approximately $297,000 or 29.96%. However, third quarter earnings, adjusted for the one-time, after tax gain on sale of bonds in 2019, were $967,000 or $24,000 lower than the trailing second quarter 2019 earnings, primarily resulting from higher non-interest expense, following the same theme as discussed in the year to date narrative above.