SVB&T reports steady Q3 earnings amid challenging environment

Jasper — SVB&T Corporation, parent company of Springs Valley Bank & Trust, announced its third quarter 2023 earnings results this week, reporting steady performance amid a challenging economic climate.

The bank posted earnings of $1.62 million for the third quarter, equal to $1.47 per share. This matched earnings of $1.62 million and $1.47 per share in last year’s third quarter.

Return on average assets, a key profitability metric, was 1.11 percent in the third quarter of 2023 compared to 1.23 percent in the third quarter of 2022.

Net interest income fell from $4.87 million in Q3 2022 to $4.39 million in Q3 2023, as higher interest expense outpaced growth in interest revenue.

Noninterest income rose year-over-year, driven by more revenue from sold mortgages, financial services, and electronic banking.

SVB&T Corporation book value (adjusted for the 2022 stock split) has increased from $48.09 per share as of September 30, 2022, to $51.99 as of September 30, 2023, an 8.11 percent increase. SVB&T Corporation stock closed at $39.50 per share on the OTCQX exchange on September 30, 2023.

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, no shares have been repurchased under the newly approved plan.

“The old proverb (some characterize it more correctly as a curse) goes, ‘May you live in interesting times’ and 2023, nine months in, unequivocally qualifies as ‘interesting’ given the global upheaval (wars in Ukraine and Middle East), a UAW strike, the behemoth FTX cryptocurrency collapse and subsequent trial, and an economy that just won’t substantively slow down even in the face of interest rates up 225 basis points compared to just over a year ago,” said CEO Jamie Shinabarger.

He continued, “While the US and global economy, by the numbers, have shown resiliency, there are signs that consumer households are weakening under the weight of inflation, and several business segments are finding it challenging to maintain profit margins. Banks in particular are one of these industries.”

Total assets grew to $583.38 million as of September 30, 2023, up from $560.66 million at the start of the year. The growth came mainly from increased lending, as total loans grew to $474.29 million. Deposits also swelled to $507.72 million compared to $469.22 million last December.

While noting economic headwinds, Shinabarger said the bank will prioritize managing liquidity, costs, and risk prudently through year-end.

“We are committed to keeping our head down and managing through the challenges as we wrap up 2023,” he stated. “That means providing the day-to-day relationship banking services to our communities that our brand has come to be associated with while preparing to embark on 2024 with our eyes wide open, staying nimble for a change in business climate, and mitigating risk across our various operational areas.”