SAL Salisbury Bancorp Inc

Salisbury Bancorp, Inc. (“Salisbury”), (NASDAQ Capital Market: “SAL”), the holding company for Salisbury Bank and Trust Company (the “Bank”), announced results for its third quarter ended September 30, 2022.

Net income available to common shareholders was $4.3 million, or $0.75 per basic common share, for the third quarter ended September 30, 2022 (third quarter 2022), compared with $3.8 million, or $0.67 per basic common share, for the second quarter ended June 30, 2022 (second quarter 2022), and $3.4 million, or $0.60 per basic common share, for the third quarter ended September 30, 2021 (third quarter 2021).

Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “We reported another quarter of strong earnings and loan growth and the credit quality of our loan portfolio continued to improve. As we approach the end of the year, we are cautiously optimistic that the business environment will remain favorable despite rising interest rates, persistent inflation and volatile financial markets. We are focused on prudently extending credit and enhancing the Bank’s profitability while continuing to provide outstanding customer service.”

Net Interest and Dividend Income

Tax equivalent net interest income of $12.1 million for the third quarter 2022 increased $993 thousand, or 9.0%, versus second quarter 2022, and increased $1.7 million, or 16.5%, versus third quarter 2021. Tax equivalent interest income of $13.2 million for third quarter 2022 increased $1.3 million, or 10.9%, versus second quarter 2022 and increased $2.0 million, or 18.2%, from third quarter 2021. The cost of interest-bearing liabilities of $1.2 million for third quarter 2022 increased $308 thousand, or 35.9%, from second quarter 2022 and increased $329 thousand, or 39.4%, from third quarter 2021.

Average earning assets of $1.5 billion for third quarter 2022 increased $66.3 million, or 4.8%, from second quarter 2022, and increased $53.8 million, or 3.8%, versus third quarter 2021. Average earning assets for third quarter 2022 included average PPP loan balances of $1.3 million, net of deferred fees, compared with $8.8 million and $51.8 million in second quarter 2022 and third quarter 2021, respectively. Average total interest bearing liabilities of $972 million for third quarter 2022 increased $28.6 million, or 3.0%, from second quarter 2022 and increased $22.6 million, or 2.4%, versus third quarter 2021.

The tax equivalent net interest margin for third quarter 2022 was 3.27% compared with 3.15% for second quarter 2022 and 2.92% for third quarter 2021. Excluding PPP loans, the tax equivalent net interest margin for third quarter 2022 was 3.25% compared with 3.10% for second quarter 2022 and 2.78% for third quarter 2021. See SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income on page 8 of this release for additional details.

Non-Interest Income

Non-interest income of $2.7 million for third quarter 2022 decreased $604 thousand versus second quarter 2022 and decreased $147 thousand versus third quarter 2021.

Trust and Wealth Advisory fees of $1.2 million for third quarter 2022 decreased $65 thousand from second quarter 2022 and decreased $58 thousand from third quarter 2021. Assets under administration were $1.2 billion at September 30, 2022 compared with $1.1 billion at December 31, 2021 and $973.2 million at September 30, 2021. Discretionary assets under administration of $522.1 million at September 30, 2022 compared with $657.8 million at December 31, 2021 and $608.2 million at September 30, 2021. The decline from the comparative quarters primarily reflected lower market valuations. Non-discretionary assets under administration of $710.2 million at September 30, 2022 increased from $425.4 million at December 31, 2021 and increased from $365.0 million at September 30, 2021. The increase in non-discretionary assets from the comparative quarters primarily reflected a higher valuation of certain partnership assets for an existing client relationship. The trust and wealth business records only a nominal annual fee on this relationship.

Service charges and fees of $1.2 million for third quarter 2022 decreased $504 thousand versus second quarter 2022 and was essentially unchanged from third quarter 2021. The decrease from second quarter 2022 primarily reflected non-recurring loan prepayment fees of $425 thousand, which were recorded in the second quarter. Deposit fees for third quarter 2022 were essentially unchanged from the comparative quarters. Net fees from mortgage banking activities were slightly below the comparative quarters. Salisbury did not sell any residential loans to FHLBB during third quarter 2022 compared with sales of $2.0 million in second quarter 2022 and $1.8 million in third quarter 2021.

Non-interest income for second quarter 2022 included a non-recurring non-taxable gain of $89 thousand related to proceeds receivable from a bank-owned life insurance policy (“BOLI”) due to the death of a former covered employee.

Non-Interest Expense

Non-interest expense of $8.5 million for third quarter 2022 declined slightly from second quarter 2022 and increased $228 thousand versus third quarter 2021. Compensation expense of $5.0 million for third quarter 2022 increased $81 thousand from second quarter 2022 and increased $343 thousand versus third quarter 2021. The increase in compensation expense from the comparative periods primarily reflected higher salary expense as well as higher production and incentive accruals, partially offset by lower benefits expense.

Excluding compensation expense, other non-interest expenses for third quarter 2022 decreased $101 thousand from second quarter 2022 and decreased $115 thousand from third quarter 2021. The decrease from the prior quarter primarily reflected lower professional fees, lower marketing expense and lower Director fees, partially offset by higher facilities and deposit related costs. The decrease from third quarter 2021 primarily reflected lower facilities related costs as well as lower marketing expenses, partially offset by higher information processing costs.

The effective income tax rates for third quarter 2022, second quarter 2022 and third quarter 2021 were 18.7%, 15.3% and 20.1%, respectively. The tax provision for second quarter 2022 included a non-recurring credit of $63 thousand to adjust for an over statement of the Bank’s 2021 tax liability to New York state as well as non-recurring BOLI proceeds noted above.

Loans

Gross loans receivable of $1.2 billion increased $41.4 million, or 3.6%, from second quarter 2022, and increased $120.2 million, or 11.2%, from third quarter 2021. Excluding PPP loans, gross loans receivable increased $43.8 million, or 3.8%, from second quarter 2022 and $160.4 million, or 15.6%, from third quarter 2021. Residential 5+ multifamily gross loans receivable at September 30, 2022 and June 30, 2022 included a loan for approximately $16.0 million. At September 30, 2021 this loan, which had a gross balance of $11.7 million, was reported in the commercial real estate category while the project was under construction. The ratio of gross loans to deposits for third quarter 2022 was 89.9% compared with 87.3% for second quarter 2022 and 83.0% for third quarter 2021. Balances by loan type for the comparative periods were as follows:

Loan Type		Q3 2022			Q2 2022				Q3 2021
Residential Real Estate (1-4 Family)		$	461,379		$	444,698			$	408,231
Residential 5+ Multifamily			70,459			69,272				46,237
Commercial Real Estate			413,019			387,787				361,965
Commercial & Industrial ex PPP Loans			186,527			189,086				167,528
PPP Loans			469			2,894				40,652
Commercial & Industrial – Total			186,996			191,980				208,180
Farm Land			4,225			3,668				3,409
Vacant Land			14,796			15,397				13,698
Municipal			18,607			17,486				18,061
Consumer			20,344			18,155				11,152
Deferred Costs/(Fees)			1,002			1,018				(314	)
Gross Loans Receivable		$	1,190,827		$	1,149,461			$	1,070,619
Gross Loans Receivable ex PPP		$	1,190,358		$	1,146,567			$	1,029,967

Asset Quality

Asset quality improved in third quarter 2022. Non-performing assets of $1.9 million, or 0.12% of total assets at September 30, 2022, decreased $2.3 million from $4.2 million, or 0.27% of total assets at December 31, 2021, and decreased $3.1 million from $5.0 million, or 0.34% of total assets, at September 30, 2021.

The amount of total impaired and potential problem loans decreased $2.7 million during the quarter to $11.2 million or 0.94% of gross loans receivable at September 30, 2022 compared to $32.8 million, or 3.04% of gross loans receivable at December 31, 2021 and $45.7 million, or 4.27% of gross loans receivable at September 30, 2021. The decrease in the balance from the comparative quarters primarily reflected management’s upgrade of the internal risk rating on certain hospitality related loans, which were previously downgraded due to concerns over COVID-19. These businesses have demonstrated a return to pre-pandemic levels of activity and liquidity, warranting the improvement in risk rating.

Accruing loans receivable 30-to-89 days past due decreased $0.6 million during third quarter 2022 to $0.4 million, or 0.03% of gross loans receivable, from $1.3 million, or 0.12% of gross loans receivable at December 31, 2021, and decreased $0.5 million from $0.9 million, or 0.08% of gross loans receivable at September 30, 2021.

The allowance for loan losses for third quarter 2022 was $14.3 million compared with $13.7 million for second quarter 2022 and $13.2 million for third quarter 2021.The provision expense was $0.7 million for third quarter 2022 compared with a provision expense of $1.1 million for second quarter 2022 and a provision expense of $0.4 million for the third quarter 2021. The provision expense for third quarter 2022 reflected the strong quarterly loan growth and adjustments to qualitative factors due to the uncertain macroeconomic environment. Net loan charge-offs (recoveries) were $64 thousand for the third quarter 2022 compared with $312 thousand for second quarter 2022 and ($60) thousand for the third quarter 2021.

Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, excluding PPP loans, was 1.20% for the third quarter 2022 versus 1.20% for the second quarter 2022 and 1.28% for the third quarter 2021. Similarly, reserve coverage, as measured by the ratio of the allowance for loan losses to non-performing loans was 771% for the third quarter 2022 versus 324% for second quarter 2022 and 263% for third quarter 2021.

Salisbury endeavors to work constructively to resolve its non-performing loan issues with customers. Substantially all non-performing loans are collateralized with real estate and the repayment of such loans is largely dependent on the return of such loans to performing status or the liquidation of the underlying real estate collateral.

Deposits and Borrowings

Deposits of $1.3 billion at September 30, 2022 decreased $11.0 million, or 0.8%, from December 31, 2021 and increased $35.6 million, or 2.8%, from September 30, 2021. At September 30, 2022, Salisbury did not have any outstanding brokered deposits balances compared with balances of $7.9 million at December 31, 2021 and September 30, 2021, respectively. Average total deposits were $1.3 billion for third quarter 2022, second quarter 2022 and third quarter 2021. Average total deposits for third quarter 2022 included average brokered deposits of $17.6 million compared with $18.0 million for second quarter 2022 and $7.9 million for third quarter 2021.

Salisbury had $20.0 million of outstanding advances from FHLBB at September 30, 2022 compared with $7.7 million and $8.9 million at December 31, 2021 and September 30, 2021, respectively. Salisbury’s excess borrowing capacity at FHLBB was approximately $227 million at September 30, 2022.

Capital

Shareholders’ equity decreased $4.1 million in third quarter to $123.2 million at September 30, 2022 as unrealized losses in the available-for-sale securities (“AFS”) portfolio increased by $7.8 million and common stock dividends were paid of $0.9 million, which were partially offset by net income of $4.3 million and other activity of $0.2 million. The unrealized losses in the AFS portfolio, which reflected the continued increase in market interest rates during third quarter 2022, reduced both book value and tangible book value at September 30, 2022. Book value per common share of $21.29 at September 30, 2022 decreased $0.72 from second quarter 2022 and decreased $2.04 from third quarter 2021. Tangible book value per common share of $18.86 at September 30, 2022 decreased $0.71 from second quarter 2022 and decreased $1.97 from third quarter 2021.

The Bank’s regulatory capital ratios remain in compliance with regulatory “well capitalized” requirements. At September 30, 2022, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 9.83%, 13.24%, and 12.07%, respectively, compared with regulatory “well capitalized” minimums of 5.00%, 10.00%, and 6.5%, respectively. The unrealized losses in the AFS portfolio noted above do not affect the Bank’s regulatory capital ratios.

During third quarter 2022, Salisbury did not repurchase any of its outstanding common stock pursuant to its stock repurchase program established in March 2021.

Dividend on Common Shares

On October 19, 2022, the Board of Directors of Salisbury approved a quarterly cash dividend of $0.16 per common share that will be paid on November 25, 2022 to shareholders of record as of November 11, 2022.

Other Matters

In July 2022, Salisbury management discovered that the Bank’s trust department terminated a trust account in May 2020 and distributed approximately $1.0 million that should have been retained in continuance of the trust account. Salisbury has engaged legal counsel and is currently evaluating the Company’s potential financial exposure. At this time, management believes that Salisbury’s exposure is not yet known or knowable and could potentially range from zero to approximately $1.0 million depending upon the facts and circumstances and the scope of Salisbury’s insurance coverage.

Background

Salisbury Bancorp, Inc. is the parent company of Salisbury Bank and Trust Company, a Connecticut chartered commercial bank serving the communities of northwestern Connecticut and proximate communities in New York and Massachusetts, since 1848, through full service branches in Canaan, Lakeville, Salisbury and Sharon, Connecticut; Great Barrington, South Egremont and Sheffield, Massachusetts; and Dover Plains, Fishkill, Millerton, Newburgh, New Paltz, Poughkeepsie, and Red Oaks Mill, New York. The Bank offers a broad spectrum of consumer and business banking products and services, as well as trust and wealth advisory services. For more information, please visit www.salisburybank.com. 

Forward-Looking Statements

This news release may contain statements relating to Salisbury’s and the Bank’s future results that are considered “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and expectations of management as well as the assumptions and estimates made by management using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions, including among others: changes in market interest rates and general and regional economic conditions; changes in laws and regulations; changes in accounting principles; and the quality or composition of the loan and investment portfolios, technological changes and cybersecurity matters, and other factors that may be described in Salisbury’s quarterly reports on Form 10-Q and its annual report on Form 10-K, which are available at the Securities and Exchange Commission’s website (www.sec.gov) and to which reference is hereby made. Forward-looking statements made by Salisbury in this news release speak only as of the date they are made. Events or other facts that could cause Salisbury’s actual results to differ may arise from time to time and Salisbury cannot predict all such events and factors. Salisbury undertakes no obligation to publicly update any forward-looking statement unless as may be required by law.

Investor presentation slides, which include a review of financial results and trends through the period ended September 30, 2022, are available in the Shareholder Relations section of Salisbury’s website at salisburybank.com under About Us/Shareholder Relations/News & Market Information/Presentations.

Salisbury Bancorp, Inc. and SubsidiaryCONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)	September 30, 2022			December 31, 2021
ASSETS
Cash and due from banks	$	6,314		$	6,404
Interest bearing demand deposits with other banks		49,983			168,931
Total cash and cash equivalents		56,297			175,335
Interest bearing Time Deposits with Financial Institutions		-			750
Securities
Available-for-sale at fair value		189,161			202,396
Mutual funds at fair value		1,882			901
Federal Home Loan Bank of Boston stock at cost		1,487			1,397
Loans held-for-sale		-			2,684
Loans receivable, net (allowance for loan losses: $14,334 and $12,962)		1,176,493			1,066,750
Bank premises and equipment, net		22,502			22,625
Goodwill		13,815			13,815
Intangible assets (net of accumulated amortization: $5,613 and $5,462)		269			418
Accrued interest receivable		6,012			6,260
Cash surrender value of life insurance policies		30,187			27,738
Deferred taxes		8,882			2,588
Other assets		5,151			5,527
Total Assets	$	1,512,138		$	1,529,184
LIABILITIES and SHAREHOLDERS' EQUITY
Deposits
Demand (non-interest bearing)	$	413,584		$	416,073
Demand (interest bearing)		241,236			233,600
Money market		313,987			330,436
Savings and other		246,538			237,075
Certificates of deposit		109,859			119,009
Total deposits		1,325,204			1,336,193
Repurchase agreements		7,109			11,430
Federal Home Loan Bank of Boston advances		20,000			7,656
Subordinated debt		24,517			24,474
Note payable		139			170
Finance lease obligations		4,296			4,107
Accrued interest and other liabilities		7,713			8,554
Total Liabilities		1,388,978			1,392,584
Shareholders' Equity
Common stock - $0.10 per share par value
Authorized: 10,000,000;
Issued: 5,783,966 and 5,723,394
Outstanding: 5,783,966 and 5,723,394		578			286
Unearned compensation – restricted stock awards		(1,328	)		(925	)
Paid-in capital		46,893			46,374
Retained earnings		99,338			89,995
Accumulated other comprehensive (loss) income, net		(22,321	)		870
Total Shareholders' Equity		123,160			136,600
Total Liabilities and Shareholders' Equity	$	1,512,138		$	1,529,184

Salisbury Bancorp, Inc. and SubsidiaryCONSOLIDATED STATEMENTS OF INCOME (unaudited)

	Three months ended								Nine months ended
Periods ended September 30, (in thousands, except per share amounts)		2022			2021			2022				2021
Interest and dividend income
Interest and fees on loans	$	11,541		$	10,264		$	32,280			$	30,642
Interest on debt securities
Taxable		903			486			2,486				1,398
Tax exempt		213			172			575				506
Other interest and dividends		352			79			517				174
Total interest and dividend income		13,009			11,001			35,858				32,720
Interest expense
Deposits		883			532			1,938				1,652
Repurchase agreements		4			5			11				13
Finance lease		41			33			122				102
Note payable		2			3			7				9
Subordinated debt		233			233			699				767
Federal Home Loan Bank of Boston advances		2			30			57				96
Total interest expense		1,165			836			2,834				2,639
Net interest and dividend income		11,844			10,165			33,024				30,081
Provision (release) for loan losses		695			400			2,158				(517	)
Net interest and dividend income after provision (release) for loan losses		11,149			9,765			30,866				30,598
Non-interest income
Trust and wealth advisory		1,228			1,286			3,762				3,685
Service charges and fees		1,219			1,211			4,080				3,536
Mortgage banking activities, net		64			108			497				912
Losses on mutual fund		(47	)		(4	)		(119		)		(18	)
Gains (losses) gains on securities, net		-			7			165				(2	)
Bank-owned life insurance (“BOLI”) income		201			135			615				386
Gain on sale of assets		-			73			-				73
Other		28			24			84				81
Total non-interest income		2,693			2,840			9,084				8,653
Non-interest expense
Salaries		3,802			3,361			10,938				9,664
Employee benefits		1,224			1,322			3,789				3,990
Premises and equipment		1,117			1,060			3,200				3,034
Write-down of assets		-			144			3				144
Information processing and services		711			632			2,098				1,824
Professional fees		689			735			2,297				2,090
Collections, OREO, and loan related		67			120			300				317
FDIC insurance		98			146			391				370
Marketing and community support		214			256			661				552
Amortization of intangibles		46			61			150				198
Other		544			447			1,872				1,448
Total non-interest expense		8,512			8,284			25,699				23,631
Income before income taxes		5,330			4,321			14,251				15,620
Income tax provision		994			868			2,501				3,288
Net income	$	4,336		$	3,453		$	11,750			$	12,332
Net income available to common shareholders	$	4,264		$	3,400		$	11,543			$	12,148
Basic earnings per common share	$	0.75		$	0.60		$	2.04			$	2.16
Diluted earnings per common share	$	0.75		$	0.60		$	2.03			$	2.15
Common dividends per share	$	0.16		$	0.16		$	0.48			$	0.45

Salisbury Bancorp, Inc. and SubsidiarySELECTED CONSOLIDATED FINANCIAL DATA (unaudited)

At or for the quarters ended
(in thousands, except per share amounts and ratios)	Q3 2022					Q2 2022		Q1 2022			Q4 2021			Q3 2021
Total assets	$	1,512,138		$	1,496,521			$	1,465,082		$	1,529,184		$	1,476,849
Loans receivable, net		1,176,493			1,135,758				1,066,216			1,066,750			1,057,451
Total securities		192,530			205,727				217,591			204,694			177,979
Deposits		1,325,204			1,316,539				1,290,474			1,336,193			1,289,628
FHLBB advances		20,000			-				419			7,656			8,905
Shareholders’ equity		123,160			127,303				130,066			136,600			133,533
Wealth assets under administration		1,232,272			1,261,244				1,049,240			1,083,152			973,198
Discretionary wealth assets under administration		522,109			546,506				625,346			657,789			608,228
Non-discretionary wealth assets under administration		710,163			714,738				423,894			425,363			364,970
Non-performing loans		1,860			4,229				2,765			4,199			5,001
Non-performing assets		1,860			4,229				2,765			4,199			5,001
Accruing loans past due 30-89 days		390			1,001				2,349			1,342			909
Net interest and dividend income		11,844			10,872				10,306			10,543			10,165
Net interest and dividend income, tax equivalent (1)		12,054			11,061				10,484			10,735			10,345
Provision (release) expense for loan losses		695			1,100				363			(202	)		400
Non-interest income		2,693			3,297				3,094			2,847			2,840
Non-interest expense		8,512			8,532				8,653			8,471			8,284
Income before income taxes		5,330			4,537				4,384			5,121			4,321
Income tax provision		994			692				816			980			868
Net income		4,336			3,845				3,568			4,141			3,453
Net income allocated to common shareholders		4,264			3,772				3,508			4,076			3,400
Per share data
Basic earnings per common share	$	0.75		$	0.67			$	0.62		$	0.72		$	0.60
Diluted earnings per common share		0.75			0.66				0.62			0.72			0.60
Dividends per common share		0.16			0.16				0.16			0.16			0.16
Book value per common share		21.29			22.01				22.56			23.87			23.33
Tangible book value per common share - Non-GAAP ⁽2⁾		18.86			19.57				20.10			21.38			20.83
Common shares outstanding at end of period (in thousands)		5,784			5,784				5,765			5,723			5.723
Weighted average common shares outstanding, to calculate basic earnings per share (in thousands)		5,687			5,666				5,636			5,635			5,635
Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands)		5,713			5,699				5,694			5,670			5,686
Profitability ratios
Net interest margin (tax equivalent) (1)		3.27	%		3.15		%		2.95	%		2.99	%		2.92	%
Efficiency ratio (2)		57.38			59.49				63.38			61.91			61.63
Effective income tax rate		18.65			15.25				18.60			19.13			20.09
Return on average assets		1.13			1.06				0.97			1.10			0.93
Return on average common shareholders’ equity		13.23			11.98				10.65			12.14			10.27
Credit quality ratios
Non-performing loans to loans receivable, gross		0.16	%		0.37		%		0.26	%		0.39	%		0.47	%
Accruing loans past due 30-89 days to loans receivable, gross		0.03			0.09				0.22			0.12			0.08
Allowance for loan losses to loans receivable, gross		1.20			1.19				1.20			1.20			1.23
Allowance for loan losses to non-performing loans		770.6			324.0				467.3			308.7			263.3
Non-performing assets to total assets		0.12			0.28				0.19			0.27			0.34
Capital ratios
Common shareholders' equity to assets		8.14	%		8.51		%		8.88	%		8.93	%		9.04	%
Tangible common shareholders' equity to tangible assets - Non-GAAP (2)		7.28			7.63				7.99			8.08			8.15
Tier 1 leverage capital (3)		9.83			10.04				9.66			9.42			9.31
Total risk-based capital (3)		13.24			13.28				13.98			14.08			14.20
Common equity tier 1 capital (3)		12.07			12.13				12.80			12.87			12.95

(1) Adjusted to reflect the U.S. federal statutory benefit on income derived from tax-exempt securities and loans. (2) Refer to schedule labeled “Supplemental Information – Non-GAAP Financial Measures”.(3) Represents the capital ratios of the Bank.

Salisbury Bancorp, Inc. and SubsidiarySUPPLEMENTAL INFORMATION – Non-GAAP Financial Measures (unaudited)

At or for the quarters ended
(in thousands, except per share amounts and ratios)	Q3 2022			Q2 2022				Q1 2022				Q4 2021					Q3 2021
Common Shareholders' Equity	$	123,160		$	127,303			$	130,066			$	136,600				$	133,533
Less: Goodwill		(13,815	)		(13,815		)		(13,815		)		(13,815			)		(13,815		)
Less: Intangible assets		(269	)		(314		)		(364		)		(418			)		(476		)
Tangible Common Shareholders' Equity	$	109,076		$	113,174			$	115,887			$	122,367				$	119,242
Total Assets	$	1,512,138		$	1,496,521			$	1,465,082			$	1,529,184				$	1,476,849
Less: Goodwill		(13,815	)		(13,815		)		(13,815		)		(13,815			)		(13,815		)
Less: Intangible assets		(269	)		(314		)		(364		)		(418			)		(476		)
Tangible Total Assets	$	1,498,054		$	1,482,392			$	1,450,903			$	1,514,951				$	1,462,558
Common Shares outstanding (in thousands)		5,784			5,784				5,765				5,723					5,723
Book value per Common Share – GAAP	$	21.29		$	22.01			$	22.56			$	23.87				$	23.33
Tangible book value per Common Share - Non-GAAP		18.86			19.57				20.10				21.38					20.83
Tangible common shareholders’ equity to tangible total assets - Non-GAAP		7.28	%		7.63		%		7.99		%		8.08			%		8.15		%
Consolidated:
Non-interest expense	$	8,512		$	8,532			$	8,653			$	8,471				$	8,284
Amortization of core deposit intangibles		(46	)		(50		)		(54		)		(57			)		(61		)
OREO recovery		15			-				-				-					-
Write-down of fixed assets		-			-				-				-					(144		)
Fraud-related recovery (losses)		-			50				(251		)		-					-
Adjusted non-interest expense	$	8,481		$	8,532			$	8,348			$	8,414				$	8,079
Net interest and dividend income, tax equivalent	$	12,054		$	11,061			$	10,484			$	10,735				$	10,345
Non-interest income		2,693			3,297				3,094				2,847					2,840
Losses (gains) on securities		47			75				(168		)		9					(3		)
Gains on sale of fixed assets		-			-				-				-					(73		)
BOLI proceeds receivable		-			(89		)		-				-					-
Gains on sale of loans		(15	)		-				(239		)		-					-
Adjusted revenue	$	14,779		$	14,344			$	13,171			$	13,591				$	13,109
Efficiency Ratio – Non-GAAP 1		57.38	%		59.49		%		63.38		%		61.91			%		61.63		%

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q3 2022: 55.28%; Q2 2022: 57.21%; Q1 2022: 61.83%; Q4 2021: 60.62%; Q3 2021: 60.70%.

Salisbury Bancorp, Inc. and SubsidiarySUPPLEMENTAL INFORMATION – Net Interest and Dividend Income (unaudited)

At or for the quarters ended	Average Balance						Income / Expense						Average Yield / Rate
(dollars in thousands)	Q3 2022		Q2 2022		Q3 2021		Q3 2022		Q2 2022		Q3 2021		Q3 2022		Q2 2022		Q3 2021
Loans (a)(d)	$	1,168,037	$	1,112,120	$	1,056,266	$	11,675	$	10,693	$	10,382	3.95	%	3.81	%	3.90	%
Securities (c)(d)		221,620		225,458		150,841		1,192		1,117		720	2.15		1.98		1.91
FHLBB stock		1,191		1,221		1,743		8		10		6	2.92		3.20		1.38
Short term funds (b)		68,818		54,553		196,997		344		98		73	1.98		0.73		0.15
Total interest-earning assets		1,459,666		1,393,352		1,405,847		13,219		11,918		11,181	3.58		3.40		3.15
Other assets		60,283		61,790		72,547
Total assets	$	1,519,949	$	1,455,142	$	1,478,394
Interest-bearing demand deposits	$	233,547	$	229,625	$	227,291		106		108		111	0.18		0.19		0.19
Money market accounts		320,552		299,870		327,861		356		156		140	0.44		0.21		0.17
Savings and other		246,101		236,728		217,541		179		97		58	0.29		0.16		0.11
Certificates of deposit		131,918		137,034		125,768		242		216		223	0.73		0.63		0.70
Total interest-bearing deposits		932,118		903,257		898,461		883		577		532	0.38		0.26		0.23
Repurchase agreements		9,684		10,216		14,296		4		4		5	0.18		0.15		0.15
Finance lease		5,318		5,283		2,685		41		41		33	3.05		3.09		4.98
Note payable		142		153		183		2		2		3	6.15		6.13		6.11
Subordinated debt (f)		24,508		24,494		24,452		233		233		233	3.80		3.80		3.82
FHLBB advances		217		-		9,329		2		-		30	3.15		-		1.28
Total interest-bearing liabilities		971,987		943,403		949,406		1,165		857		836	0.48		0.36		0.35
Demand deposits		410,861		376,694		388,557
Other liabilities		7,065		6,258		6,965
Shareholders’ equity		130,036		128,787		133,466
Total liabilities & shareholders’ equity	$	1,519,949	$	1,455,142	$	1,478,394
Net interest income							$	12,054	$	11,061	$	10,345
Spread on interest-bearing funds													3.11		3.03		2.80
Net interest margin (e)													3.27		3.15		2.92

(a) Includes non-accrual loans.(b) Includes interest-bearing deposits in other banks and federal funds sold.(c) Average balances of securities are based on amortized cost.(d) Includes tax exempt income benefit of $0.2 million, $0.2 million and $0.2 million, respectively, for Q3 2022, Q2 2022 and Q3 2021 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2022 and 2021.(e) Net interest income divided by average interest-earning assets.(f) Net of issuance costs.

Salisbury Bancorp, Inc. and SubsidiarySUPPLEMENTAL INFORMATION – Net Interest and Dividend Income (unaudited)

Nine months ended September 30,	Average Balance				Income / Expense				Average Yield / Rate
(dollars in thousands)		2022		2021		2022		2021	2022		2021
Loans (a)(d)	$	1,120,246	$	1,053,451	$	32,646	$	30,989	3.85	%	3.90	%
Securities (c)(d)		218,455		130,864		3,270		2,080	2.00		2.12
FHLBB stock		1,281		1,840		26		26	2.69		1.89
Short term funds (b)		82,075		160,055		491		148	0.80		0.12
Total earning assets		1,422,057		1,346,210		36,433		33,243	3.39		3.27
Other assets		65,570		71,421
Total assets	$	1,487,627	$	1,417,631
Interest-bearing demand deposits	$	231,883	$	224,479		313		332	0.18		0.20
Money market accounts		313,871		310,908		639		408	0.27		0.18
Savings and other		238,688		209,180		339		173	0.19		0.11
Certificates of deposit		133,339		134,143		647		739	0.65		0.74
Total interest-bearing deposits		917,781		878,710		1,938		1,652	0.28		0.25
Repurchase agreements		9,024		11,608		11		13	0.16		0.15
Finance lease		5,233		2,753		122		102	3.12		4.95
Note payable		153		192		7		9	6.14		6.13
Subordinated Debt (f)		24,495		21,851		699		767	3.80		4.68
FHLBB advances		1,054		10,567		57		96	7.16		1.20
Total interest-bearing liabilities		957,740		925,681		2,834		2,639	0.40		0.38
Demand deposits		391,537		355,352
Other liabilities		6,818		6,897
Shareholders’ equity		131,532		129,701
Total liabilities & shareholders’ equity	$	1,487,627	$	1,417,631
Net interest income					$	33,599	$	30,604
Spread on interest-bearing funds									3.00		2.89
Net interest margin (e)									3.12		3.01

(a) Includes non-accrual loans.(b) Includes interest-bearing deposits in other banks and federal funds sold.(c) Average balances of securities are based on historical cost.(d) Includes tax exempt income benefit of $0.6 million and $0.5 million, respectively for 2022 and 2021 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2022 and 2021.(e) Net interest income divided by average interest-earning assets.(f) Net of issuance costs.

Source: Salisbury Bancorp, Inc.

Salisbury Contact: Richard J. Cantele, Jr., President and Chief Executive Officer860-435-9801 or rcantele@salisburybank.com