Arizona Tribune - SVB&T Corporation, Parent Company of Springs Valley Bank & Trust Company, Reports 2024 Third Quarter and Year to Date Earnings

Net interest income before provision expense for the third quarter ended September 30, 2024 was $4.34 million compared to $4.39 million for the same period in 2023. Interest income increased $1.07 million compared to the prior year third quarter, primarily due to increased loan balances and increased interest rates on loans resulting from the elevated rate environment and assets repricing. Interest expense increased $1.12 million compared to the same prior year quarter, again due to the elevated interest rate environment and increased deposit balances, as well as the mix between interest- and noninterest-bearing deposits. Provision expense decreased by $125,000 over the prior year third quarter. Additionally, noninterest income increased approximately $239,000 to $2.62 million from $2.38 million. The higher income can be attributed to increased revenue over the prior year third quarter from a variety of areas, including the Financial Advisory Group, electronic banking, and a gain on sale of other real estate owned. As it has been in the past, noninterest income generation continues to be a strategic focus of SVB&T's by growing the Financial Advisory Group, increasing sold loan income, expanding electronic banking services, and other avenues, to continue to reduce margin dependence. Noninterest expense increased $286,000 to $5.00 million from $4.71 million, attributable to increases in general operating expenses, the largest of which being increased salary expenses, health insurance expenditures, and core processing expenses in the third quarter of 2024.

Quarter over trailing quarter earnings increased approximately $15,000 or 0.89%. The slight earnings increase was largely driven by higher net interest income, Financial Advisory Group income, and sold loan income.

SVB&T Corporation book value has increased from $51.99 per share as of September 30, 2023, to $58.77 as of September 30, 2024, a 13.04% increase. SVB&T Corporation stock closed at $42.20 per share on the OTCQX exchange on September 30, 2024. In February of 2021, the Corporation's Board of Directors authorized a share repurchase program through December 31, 2022. Under the program, the Corporation was authorized to repurchase, from time to time as the Corporation deemed appropriate, shares of SVB&T Corporation's common stock with an aggregate purchase price of up to $2.00 million. As of December 31, 2022, SVB&T had repurchased (adjusted for 2022 stock split) 24,400 shares, with an average purchase price of $40.59, under the program. As of May 16, 2023, the repurchase program has been renewed with an aggregate purchase price of up to $1.00 million. As of the end of the third quarter of 2024, 5,952 additional shares have been repurchased under the newly approved plan, with an average purchase price of $42.00.

Total assets increased $8.54 million to $622.09 million on September 30, 2024, compared to December 31, 2023 assets of $613.55 million. Total loans before allowance increased $5.01 million to $488.61 million on September 30, 2024, from $483.60 million on December 31, 2023. Most of the loan growth in 2024 has come from commercial real estate loans, followed by consumer mortgages, agriculture lines of credit, and consumer home equity loans. Springs Valley has experienced healthy loan demand in 2024; however, the Bank is strategically managing loan growth to alleviate some of the pressure on the funding side of the balance sheet as cost of funds remain elevated. Allowance as a percent of total loans was 1.46% as of September 30, 2024, compared to 1.44% as of December 31, 2023. Total deposits increased $15.52 million to $548.98 million on September 30, 2024, from $533.46 million on December 31, 2023. Noninterest-bearing deposits decreased by approximately $2.66 million due largely to decreases in business account balances and the Bank's free checking account product balances. Interest-bearing deposits have increased by approximately $18.19 million. These increases occurred primarily in Springs Valley's public funds accounts and retail CDs. Core deposit growth continues to be a primary focus of Springs Valley's as it is a critical component in generating sustainable, long-term profitability for the institution.

Year to date (YTD) unaudited earnings for the nine months ended September 30, 2024 was $4.81 million or $4.38 EPS, a 5.54% increase over the same prior year period earnings on a per share basis. This YTD performance translates to an ROAA of 1.05%, which is in line with the same prior year period ROAA of 1.05% as well.

Net interest income before provision expense for the nine months ended September 30, 2024 was $12.47 million compared to $13.38 million for the same period in 2023, a decrease of $908,000. Interest income increased approximately $3.31 million as compared to the same prior year period, largely due to increased loan balances and increased interest rates on loans resulting from the elevated rate environment and assets repricing. Additionally, interest expense increased by $4.22 million over the same period, again due to the elevated interest rate environment and increased deposit balances, as well as the mix between interest- and noninterest-bearing deposits. YTD provision expense decreased by $375,000, compared to the same prior year period, as the Bank had a sufficient coverage ratio to adequately cover risk in the loan portfolio, and therefore, less provision was needed so far in 2024. Total noninterest income increased $1.48 million to $7.76 million YTD September 2024 from $6.28 million for the same period in 2023. The largest contributing factors to the favorable variance were increased Financial Advisory Group revenues, Financial Services income from annuity sales, electronic banking income, servicing fees on sold loans, sold mortgage income, and a gain on sale of other real estate owned. Growing noninterest income to reduce margin dependence continues to be a strategic focus of Springs Valley Bank & Trust. Noninterest expense increased $742,000 to $14.60 million YTD September 2024 from $13.86 million for the same period in 2023. This expense increase was 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 increase have been increased salary, health insurance, core processing and electronic banking expenses.

President J. Craig Buse commented, "Springs Valley continues to focus on relationship-oriented community banking while following our Mission Statement and staying true to our Core Values. This approach has resulted in a healthy 1.05% ROAA year to date. We are seeing margin compression begin to stall, seemingly at its bottom, as the Fed has begun decreasing the fed funds target rate. With this in mind, we remain optimistic regarding the Bank's future performance as we expect margin expansion to be on the horizon as the Bank's cost of funds is poised to drop, and asset quality continues to hold up very well."

CEO Jamie Shinabarger concurred and added, "It's been an eventful year in banking so far in 2024 given the inverted yield curve, elevated interest rates, stubborn inflation, international concerns, and the recent presidential election just to name a few things. Springs Valley continues to strategically pivot when necessary to reposition our balance sheet and realign our various initiatives to make the most of this ever-changing external environment. However, with that said, as President Buse noted, one thing that remains constant through it all is the Bank's Mission…to enhance the financial quality of life in our communities by focusing on you."

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For more information contact: Ryan Heim, Treasurer & CFO, SVB&T Corporation, at 812.634.4889 or [email protected].

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)

SOURCE: SVB&T Corporation

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