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Calvin B. Taylor Bankshares, Inc. (OTCQX: TYCB), Parent Company of Calvin B. Taylor Bank, Reports First-Quarter 2021 Financial Results

Berlin, Maryland – (NewMediaWire) – May 6, 2021 – Calvin B. Taylor Bankshares, Inc. (the “Company”) (OTCQX: TYCB), parent company of Calvin B. Taylor Bank, today reported unaudited financial results for the first-quarter ended March 31, 2021.  Highlights of the company’s financial results for the first-quarter ended March 31, 2021 (“1Q21”) as compared to the first-quarter ended March 31, 2020 (“1Q20”) and the fourth-quarter ended December 31, 2020 (“4Q20”) are noted below and included in the following tables.

·         Net income increased $684 thousand to $2.60 million in 1Q21, a 35.8% increase compared to 1Q20

·         Net income increased $1.18 million in 1Q21 compared to 4Q20, a 83.6% increase

·         Nonrecurring and nontaxable income of $618 thousand related to bank owned life insurance death proceeds was recognized in 1Q21

·         Organic asset growth continued in 1Q21 with assets growing $39.6 million, or 5.6%, since December 31, 2020

·         Organic loan growth continued in 1Q21 with loans growing $32.2 million, or 7.6%, since December 31, 2020

·         Small Business Administration Paycheck Protection Program (“SBA PPP”) loans originated in 1Q21 totaled $29.2 million

·         Net interest margin improved from 2.99% in 4Q20 to 3.05% in 1Q21

·         Provision for loan losses decreased 43.2% to $125 thousand in 1Q21 as compared to $220 thousand in 1Q20 and decreased 24.2% compared to the $165 thousand recorded in 4Q20

Quarterly Results of Operations

Loan interest revenue, including fees, increased to $4.96 million in 1Q21, as compared to $4.50 million in 1Q20 and $4.81 million in 4Q20, as the result of continued organic loan growth and funding of Small Business Administration Paycheck Protection Program (“SBA PPP”) loans.  SBA PPP loan balances increased in 1Q21 as new loan origination activity associated with 2nd draw SBA PPP loans exceeded loan repayments by the SBA associated with loan forgiveness of existing 1st draw SBA PPP loans.  Upon repayment by the SBA, unamortized net loan fees are recognized and reported as loan interest revenue which resulted in an increase in loan interest revenue in 1Q21 as compared to 4Q20.  SBA PPP loan interest revenue increased from $335 thousand in Q420 to $458 thousand in 1Q21.  SBA PPP loan originations in 1Q21 resulted in an increase in unamortized net loan fees from $756 thousand as of December 31, 2020 to $1.9 million as of March 31, 2021. 

Net interest income increased 2.3% to $5.08 million in 1Q21, as compared to $4.96 million in 1Q20 and 4Q20.  Increases in loan interest revenue, as noted above, were partially offset by lower yields on other earning assets as interest rates remain historically low.  Net interest margin decreased to 3.05% in 1Q21, as compared to 3.93% in 1Q20, and is attributable to significant increases in average deposits from customer behavior changes and government economic stimulus programs related to the COVID-19 pandemic.  Average deposits increased in 1Q21 by $174.9 million, or 38.8%, when compared to 1Q20 and increased $17.5 million, or 2.9%, as compared to 4Q20.  SBA PPP loan originations of $29.2 million and additional government economic stimulus payments in 1Q21 was a primary factor in the continued growth in average deposits when compared to 4Q20.                      

The provision for loan losses was $125 thousand in 1Q21, as compared to $220 thousand in 1Q20 and $165 thousand in 4Q20.  The provision for loan losses recorded in 1Q21 was primarily attributable to loan portfolio growth and further adjustments to qualitative factors used to estimate the allowance for loan losses.  Qualitative factors were adjusted due to the continued uncertainty associated with the economic recovery from the COVID-19 pandemic.  Net charge offs were $6 thousand in 1Q21, as compared to $29 thousand in 1Q20 and $15 thousand in 4Q20.  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 $1.34 million in 1Q21, as compared to $605 thousand in 1Q20 and $775 thousand in 4Q20.  The increase in noninterest income is primarily attributable to nonrecurring income recognized in 1Q21 related to income from death proceeds of bank owned life insurance policies.  While income from increases 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.   Noninterest income also increased as a result of improving consumer spending as COVID-19 pandemic restrictions are removed which has resulted in higher debit card interchange income in 1Q21 as compared to 1Q20 and 4Q20.  Other sources of noninterest income have been negatively impacted by the COVID-19 pandemic including certain deposit account and placement fees, but were offset by higher interchange and overdraft fees in 1Q21. 

Noninterest expense increased to $3.04 million in 1Q21, as compared to $2.79 million in 1Q20, which can be attributed to the opening of a new branch in Onley, Virginia in July 2020, costs to purchase personal protective equipment, cleaning supplies, and cleaning services associated with the COVID-19 pandemic, increases in employee benefits expense and higher FDIC deposit insurance premiums due to significant deposit growth.  The increases in noninterest expense were offset by increases in net interest income and noninterest income, which decreased the efficiency ratio from 50.24% in 1Q20 to 47.80% in 1Q21.  Noninterest expense decreased in 1Q21 to $3.04 million, as compared to $3.76 million in 4Q20, which primarily relates to higher salaries expense associated with yearend discretionary bonuses and 401K contributions recorded in 4Q20.  A reduction in noninterest expense accompanied by increases in net interest income and noninterest income decreased the efficiency ratio to 47.80% in 1Q21, as compared to 65.72% in 4Q20.     

Net income increased 35.8% to $2.60 million in 1Q21, as compared to $1.91 million in 1Q20, and is primarily attributable to nonrecurring and nontaxable income of $618 thousand recorded in 1Q21 related to income from bank owned life insurance death proceeds.  Average assets had a comparable increase of 32.8% in 1Q21, as compared to 1Q20, which resulted in a modest increase to Return on Average Assets (“ROA”) from 1.41% in 1Q20 to 1.44% in 1Q21.  Average equity increased 4.5% to $95.15 million in 1Q21, as compared to 1Q20, but net income growth of 35.8% during the same period increased the Return on Average Stockholders’ Equity (“ROE”) from 8.40% in 1Q20 to 10.91% in 1Q21. 

Net income increased 83.6% to $2.60 million in 1Q21, as compared to $1.41 million in 4Q20, due to nonrecurring and nontaxable income of $618 thousand recorded in 1Q21 related to income from bank owned life insurance death proceeds and higher noninterest expense in 4Q20 related to year end discretionary bonuses and 401K contributions.  Average assets continued their recent pattern of growth and increased 2.6% in 1Q21 as compared to 4Q20 and was primarily the result of additional government economic stimulus including 2nd draw SBA PPP loans.  Average equity also increased during 1Q21, and was 0.9% higher than 4Q20.  The significant growth in net income compared to the modest increases in average assets and average equity resulted in an increase in ROA from 0.80% in 4Q20 to 1.44% in 1Q21 and an increase in ROE from 6.00% in 4Q20 to 10.91% in 1Q21.  Dividends declared were $0.29 per share in 1Q21 and 4Q20, and $0.26 per share in 1Q20.  Dividend payout ratios were 30.90% for 1Q21, 37.74% for 1Q20, and 56.89% for 4Q20. 

Financial Condition

Total assets were $751.4 million as of March 31, 2021, as compared to $545.3 million as of March 31, 2020 and $711.8 million as of December 31, 2020.  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 $653.5 million as of March 31, 2021, as compared to $451.5 million as of March 31, 2020 and $614.4 million as of December 31, 2020.  A portion of deposit growth since March 31, 2020 was utilized to fund loan originations including $62.7 million of SBA PPP loans.  SBA PPP loans, net of unamortized loans fees, were $41.9 million as of March 31, 2021 as compared to $24.1 million as of December 31, 2020.  SBA PPP loan balances increased in 1Q21 as new loan origination activity associated with 2nd draw SBA PPP loans exceeded loan repayments by the SBA associated with loan forgiveness of existing 1st draw SBA PPP loans.  Total loans as of March 31, 2021 were $455.7 million as compared to $370.9 million as of March 31, 2020 which represents growth of $84.8 million, or 22.9%.  The growth in loans since March 31, 2020 is attributable to $41.9 million in SBA PPP loans and $42.9 million of organic loan growth attributable to strong commercial and residential real estate loan demand in our markets.  Loans increased $32.2 million, or 7.6%, since December 31, 2020 which can be attributed to $17.8 million in SBA PPP loan growth and $14.4 million of organic loan growth attributable to continued strong demand in commercial and residential real estate loans in our markets.  The loans to deposits ratio as of March 31, 2021 was 69.7%, as compared to 82.2% as of March 31, 2020 and 68.9% as of December 31, 2020.              

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 March 31, 2021, loans past due 30 days or more totaled $2.3 million which includes $459 thousand of loans that previously received temporary payment deferral. 

Average assets grew by 32.8% to $722.3 million in 1Q21, as compared to $544.1 million in 1Q20.  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 loans grew 19.1% to $440.4 million in 1Q21, as compared to $369.9 million in 1Q20.  SBA PPP loans contributed to $32.2 million of the increase in average loans while the remaining $38.3 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 70.4% in 1Q21, as compared to 82.0% in 1Q20, and relates to significant growth in average deposits associated with the COVID-19 pandemic. 









































  Three Months Ended     Three Months Ended  
  March 31, %   March 31, December 31, %
Results of Operations 2021 2020 Change   2021 2020 Change
Net interest income  $        5,076,193  $        4,963,552 2.3%    $        5,076,193  $        4,961,837 2.3%
Provision for loan losses  $           125,000  $           220,000 -43.2%    $           125,000  $           165,000 -24.2%
Noninterest income  $        1,344,561  $           605,150 122.2%    $        1,344,561  $           774,876 73.5%
Noninterest expense  $        3,040,326  $        2,786,894 9.1%    $        3,040,326  $        3,761,079 -19.2%
Net income  $        2,595,428  $        1,911,308 35.8%    $        2,595,428  $        1,413,634 83.6%
Net income per share  $                  0.94  $                  0.69 36.0%    $                  0.94  $                  0.51 83.8%
Dividend per share  $                  0.29  $                  0.26 11.5%    $                  0.29  $                  0.29 0.0%
Dividend payout ratio 30.90% 37.74%     30.90% 56.89%  
               
Average assets  $   722,291,769  $   544,076,794 32.8%    $   722,291,769  $   704,175,818 2.6%
Average loans  $   440,383,147  $   369,907,305 19.1%    $   440,383,147  $   419,211,495 5.1%
Average deposits  $   625,914,322  $   450,993,182 38.8%    $   625,914,322  $   608,449,556 2.9%
Average loans to average deposits 70.36% 82.02%     70.36% 68.90%  
Average stockholders’ equity  $     95,153,292  $     91,023,635 4.5%    $     95,153,292  $     94,308,170 0.9%
Average stockholders’ equity to average assets 13.17% 16.73%     13.17% 13.39%  
               
Ratios              
Net interest margin 3.05% 3.93%     3.05% 2.99%  
Return on average assets 1.44% 1.41%     1.44% 0.80%  
Return on average stockholders’ equity 10.91% 8.40%     10.91% 6.00%  
Efficiency ratio 47.80% 50.24%     47.80% 65.72%  
               
Stock Repurchased              
Number of shares                    7,480                       380 1868.4%                      7,480                       700 968.6%
Repurchase amount  $           253,572  $             12,008 2011.7%    $           253,572  $             23,933 959.5%
Average price per share  $                33.90  $                31.60 7.3%    $                33.90  $                34.19 -0.8%
               
  March 31, March 31, %   March 31, December 31, %
Financial Condition 2021 2020 Change   2021 2020 Change
Assets  $   751,416,895  $   545,342,222 37.8%    $   751,416,895  $   711,791,004 5.6%
Loans  $   455,677,254  $   370,901,684 22.9%    $   455,677,254  $   423,467,766 7.6%
Deposits  $   653,484,299  $   451,478,843 44.7%    $   653,484,299  $   614,437,080 6.4%
Stockholders’ equity  $     95,735,742  $     91,657,497 4.4%    $     95,735,742  $     94,785,130 1.0%
Common stock – shares outstanding            2,765,452            2,774,546 -0.3%              2,765,452            2,772,932 -0.3%
Book value per share  $                34.62  $                33.04 4.8%    $                34.62  $                34.18 1.3%
Loans to deposits 69.73% 82.15%     69.73% 68.92%  
Equity to assets 12.74% 16.81%     12.74% 13.32%  

 














































   (unaudited)         (unaudited) 
   March 31,     December 31,     March 31, 
Balance Sheet 2021   2020   2020
Assets          
Cash and cash equivalents          
Cash and due from banks  $    10,759,131    $    14,398,578    $    10,613,174
Federal funds sold and interest bearing deposits      164,416,904        156,706,746           45,495,801
Total cash and cash equivalents      175,176,035        171,105,324           56,108,975
Time deposits in other financial institutions           8,732,396             8,733,754           20,524,375
Debt securities available for sale, at fair value         78,437,955           72,166,997           60,680,486
Debt securities held to maturity, at amortized cost           3,515,601             5,994,955           10,337,668
Equity securities, at cost           1,103,733             1,240,233             1,240,233
Loans      455,677,254        423,467,766        370,901,684
Less: allowance for loan losses         (1,955,434)           (1,836,451)           (1,044,056)
Net loans      453,721,820        421,631,315        369,857,628
Accrued interest receivable           2,123,934             2,402,222             1,320,664
Prepaid expenses              521,291                612,188                421,812
Other real estate owned                          –                              –                              –  
Premises and equipment, net         12,827,221           12,951,511           11,166,811
Computer software              365,169                389,236                297,543
Bank owned life insurance         13,491,712           13,405,779           13,035,405
Other assets           1,400,028             1,157,490                350,622
Total assets  $  751,416,895    $  711,791,004    $  545,342,222
           
Liabilities and Stockholders’ Equity          
Deposits          
Non-interest bearing  $  232,686,437    $  211,945,179    $  153,876,312
Interest bearing      420,797,862        402,491,901        297,602,531
Total deposits      653,484,299        614,437,080        451,478,843
Accrued interest payable                 26,079                   26,837                   26,822
Dividends payable              801,981                804,150                721,382
Accrued expenses              249,640                602,027                110,009
Non-qualified deferred compensation              519,539                485,626                301,386
Deferred income taxes              534,278                601,057                620,878
Other liabilities                 65,337                   49,097                425,405
Total liabilities      655,681,153        617,005,874        453,684,725
Stockholders’ equity          
Common stock, par value $1 per share;          
authorized 10,000,000 shares; issued and outstanding           2,765,452             2,772,932             2,774,546
Additional paid-in capital           2,562,103             2,808,195             2,857,911
Retained earnings         90,190,247           88,396,800           85,369,742
Accumulated other comprehensive income, net of tax              217,940                807,203                655,298
Total stockholders’ equity         95,735,742           94,785,130           91,657,497
Total liabilities and stockholders’ equity  $  751,416,895    $  711,791,004    $  545,342,222
           

 





















































  For the three months ended
Statement of Comprehensive Income (unaudited)  Mar 31, 2021     Mar 31, 2020 
Interest revenue      
Loans, including fees  $        4,957,754    $        4,502,173
U. S. Treasury and government agency debt securities                  57,228                 146,726
Mortgage-backed debt securities               116,772                 155,834
State and municipal debt securities                  51,003                    49,202
Federal funds sold and interest bearing deposits                  35,932                 152,506
Time deposits in other financial institutions                  44,674                 134,506
Total interest revenue            5,263,363              5,140,947
       
Interest expense      
Deposits               187,170                 177,395
Net interest income            5,076,193              4,963,552
Provision for loan losses               125,000                 220,000
Net interest income after provision for loan losses            4,951,193              4,743,552
       
Noninterest income      
Debit card and ATM               316,116                 234,847
Service charges on deposit accounts               179,087                 184,327
Merchant payment processing                  13,517                    35,360
Increase in cash surrender value of bank owned life insurance                  85,933                    30,706
Income from bank owned life insurance death proceeds               618,463                             –  
Dividends                    4,595                      6,975
Gain on disposition of investment securities                  60,453                    21,484
Gain (loss) on disposition of fixed assets                  (4,931)                      1,400
Miscellaneous                  71,328                    90,051
Total noninterest income            1,344,561                 605,150
       
Noninterest expenses      
Salaries            1,248,957              1,253,898
Employee benefits               399,265                 317,464
Occupancy                227,368                 201,769
Furniture and equipment                203,685                 169,024
Data processing               166,115                 131,478
ATM and debit card               112,250                 111,350
Marketing                  35,614                    63,159
Directors fees                  75,100                    75,700
Telecommunication services                  82,145                    80,627
Deposit insurance premiums                  49,895                             –  
Other operating               439,932                 382,425
Total noninterest expenses            3,040,326              2,786,894
Income before income taxes             3,255,428              2,561,808
Income taxes               660,000                 650,500
Net income            2,595,428              1,911,308
       
Other comprehensive income, net of tax      
Unrealized gains (losses) on available for sale debt securities      
arising during the period, net of tax              (589,263)                 487,019
Comprehensive income  $        2,006,165    $        2,398,327
       
Earnings per common share – basic and diluted  $                  0.94    $                  0.69



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, Vice President and Chief Financial Officer

410-641-1700, taylorbank.com

 

 

 

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