GlobeNewswire Inc | Jul 21, 2021 12:35PM EDT

July 21, 2021

-- Second Quarter 2021 Net Income of $1.53 per Basic Common Share -- Quarterly Cash Dividend Increases 3.3% to $0.31 Per Common Share for Third Quarter 2021 -- Quarterly Results Reflected a $1.1 Million Net Release of Credit Reserves -- Non-performing Assets were 0.39% of Total Assets Compared with 0.44% at December 31, 2020 -- Common Equity Tier 1 and Total Risk-Based Capital Ratios of 13.42% and 14.67%, Respectively

LAKEVILLE, Conn., July 21, 2021 (GLOBE NEWSWIRE) -- Salisbury Bancorp, Inc. (Salisbury), (NASDAQ Capital Market: SAL), the holding company for Salisbury Bank and Trust Company (the Bank), announced results for its second quarter ended June 30, 2021.

Net income available to common shareholders was $4.3 million, or $1.53 per basic common share, for Salisburys second quarter ended June 30, 2021 (second quarter 2021), compared with $4.5 million, or $1.59 per basic common share, for the first quarter ended March 31, 2021 (first quarter 2021), and $2.7 million, or $0.96 per basic common share, for the second quarter ended June 30, 2020 (second quarter 2020). Net income for second quarter 2021 included a pre-tax release of credit reserves of approximately $1.4 million, or $0.38 per basic common share, due to improved business conditions in Salisburys market areas. This reserve release was partially offset by a pre-tax increase in credit reserves of $0.3 million due to loan growth during the quarter.

Salisburys President and Chief Executive Officer, Richard J. Cantele, Jr., stated, Thanks to the continued dedication and commitment of our employees, we reported solid results for the second quarter. The business environment continues to improve across our markets as COVID-19 restrictions have been lifted, and we are cautiously optimistic that the economic rebound will continue. We have continued to support our customers and local communities this year by processing 472 loan applications for $48 million under the Small Business Administrations (SBA) Paycheck Protection Program (PPP), which ended in May. As we move into the second half of the year, residential loan demand remains healthy, commercial activity continues to build, and credit quality is strong. Salisbury Bank is well-positioned to meet the needs of our customers, and our employees remain committed to providing outstanding customer service.

Net Interest and Dividend Income

Tax equivalent net interest income of $9.7 million for the second quarter 2021 decreased $0.8 million, or 7.4%, versus first quarter 2021, and declined slightly compared with second quarter 2020. Tax equivalent interest income of $10.8 million for second quarter 2021 decreased $470 thousand, or 4.2%, versus first quarter 2021 and decreased $317 thousand, or 2.9%, from second quarter 2020. The reduction in interest income from first quarter 2021 primarily reflected lower PPP fee income.

The cost of interest-bearing liabilities of $1.1 million for second quarter 2021 increased $311 thousand, or 41.7%, compared to first quarter 2021 and declined $270 thousand, or 20.4% from second quarter 2020. Interest expense for second quarter 2021 included approximately $180 thousand for interest and the amortization of issuance costs on subordinated debt, which Salisbury issued in 2015 and fully redeemed on May 28, 2021. Second quarter 2021 also included interest expense and issuance costs of $233 thousand on subordinated debt that Salisbury issued in March 2021.

Average earning assets of $1.4 billion for second quarter 2021 increased $115 million, or 9.1% from first quarter 2021, and increased $194.9 million, or 16.5%, versus second quarter 2020. The growth in average earning assets from comparative periods primarily reflected higher average short-term fund balances due to deposit growth and higher average balances in the available-for-sale portfolio. Average earning assets for second quarter 2021 included average PPP loan balances of $80.4 million, net of deferred fees, compared with $92.8 million in first quarter 2021 and $57.0 million in second quarter 2020. Average total interest bearing liabilities of $1.0 billion for second quarter 2021 increased $91 million, or 10.5% from first quarter 2021 and increased $146.5 million, or 18.0%, versus second quarter 2020 primarily due to higher average deposit balances.

The tax equivalent net interest margin for second quarter 2021 was 2.82% compared with 3.34% for first quarter 2021 and 3.31% for second quarter 2020. Excluding the impact of PPP loans, the tax equivalent net interest margin for second quarter 2021 was 2.76% compared with 3.16% for first quarter 2021 and 3.28% for second quarter 2020. The decline in the tax equivalent net interest margin versus comparative quarters primarily reflected a significant increase in average deposit balances during second quarter 2021, which were invested primarily in short-term investments including cash and cash equivalents. See SUPPLEMENTAL INFORMATION Net Interest and Dividend Income on page 9 on this release for additional details.

Non-Interest Income

Non-interest income of $3.0 million for second quarter 2021 increased $130 thousand versus first quarter 2021 and increased $655 thousand versus second quarter 2020.

Trust and Wealth Advisory fees of $1.3 million for second quarter 2021 increased $108 thousand from first quarter 2021 and increased $223 thousand versus second quarter 2020. The increase from first quarter 2021 primarily reflected higher asset-based fees and seasonal tax preparation fees. The increase from second quarter 2020 primarily reflected higher asset-based fees. Assets under administration were $970.3 million at June 30, 2021 compared with $944.3 million at December 31, 2020 and $704.1 million at June 30, 2020. Discretionary assets under administration of $614.3 million in second quarter 2021 increased from $555.0 million in fourth quarter 2020 and $480.5 million in second quarter 2020 primarily due to higher market valuations. Non-discretionary assets under administration of $356.0 million in second quarter 2021 decreased from $389.4 million in fourth quarter 2020 and increased from $223.6 million in second quarter 2020. The decline from fourth quarter 2020 primarily reflected the lower valuation of certain partnership assets under administration whereas the increase from second quarter 2020 reflected the addition of partnership assets under administration for an existing client relationship. The trust and wealth business records only a nominal annual fee on this non-discretionary relationship.

Service charges and fees of $1.4 million for second quarter 2021 increased $424 thousand versus first quarter 2021 and increased $776 thousand versus second quarter 2020. The increase from comparative quarters was primarily driven by non-recurring loan prepayment fees of $286 thousand as well as higher interchange and deposit fees. Salisbury waived approximately $240 thousand in deposit fees in second quarter 2020 due to the COVID-19 pandemic. Income from mortgage sales and servicing decreased $412 thousand versus first quarter 2021 and decreased $123 thousand versus second quarter 2020 on lower sales volume of residential mortgage loans to the FHLB Boston.

Non-interest income for the second quarter 2021 included BOLI income of $125 thousand consistent with first quarter 2021 and slightly below second quarter 2020.

Non-Interest Expense

Non-interest expense of $8.1 million for second quarter 2021 increased $827 thousand versus first quarter 2021 and increased $1.3 million versus second quarter 2020. Compensation expense of $4.8 million for second quarter 2021 increased $546 thousand from first quarter 2021 and increased $1.3 million versus second quarter 2020. The increase from the comparative quarters primarily reflected higher salaries and benefits, production and incentive accruals as well as lower deferred loan origination expenses. Deferred loan origination expenses in second quarter 2021 declined $179 thousand and $464 thousand from first quarter 2021 and second quarter 2020, respectively, primarily due to the processing of PPP loans in the comparative quarters.

Excluding compensation, other non-interest expenses for second quarter 2021 increased $281 thousand from first quarter 2021 and decreased $14 thousand from second quarter 2020. The increase from first quarter 2021 primarily reflected higher premises and equipment, data processing and marketing expenses. The decrease from second quarter 2020 primarily reflected lower professional fees and other expenses partially offset by higher marketing and data processing costs. Marketing expenses for second quarter 2021 included costs associated with an ongoing review of Salisburys web site and branding initiatives.

The effective income tax rates for second quarter 2021, first quarter 2021 and second quarter 2020 were 21.2%, 21.6% and 18.1%, respectively. The higher tax rate in first and second quarter 2021 primarily reflected a lower mix of tax-exempt income from municipal bonds, tax advantaged loans and bank-owned life insurance on a comparatively higher level of pre-tax income.

Loans

Gross loans receivable of $1.0 billion at June 30, 2021 decreased $10.0 million from first quarter 2021 and $7.7 million from second quarter 2020 primarily due to the forgiveness of PPP loans by the SBA. PPP loan balances of $61.9 million at June 30, 2021 declined $35.1 million and $37.0 million from March 31, 2021 and June 30, 2020, respectively. The increase in residential real estate balances during second quarter 2021 reflected continued strong origination volume and lower sales to FHLB Boston. Approximately $7.1 million of residential loans were sold to FHLB Boston in second quarter 2021 compared with $21.3 million during first quarter 2021 and $14.7 million in second quarter 2020. The ratio of gross loans to deposits for second quarter 2021 was 84.1% compared with 87.1% for first quarter 2021 and 97.0% for second quarter 2020. Balances by loan type for the comparative periods were as follows:

Loan Type Q2 2021 Q1 2021 Q2 2020Residential Real Estate $ 428,137 $ 418,991 $ 437,198 Commercial Real Estate 354,629 341,142 323,634 Commercial & Industrial ex PPP 156,849 152,388 148,510 LoansPPP Loans 61,908 96,969 98,930 Commercial & Industrial ? Total 218,757 249,357 247,440 Farm Land 3,529 3,606 3,324 Vacant Land 13,006 13,228 13,879 Municipal 18,341 21,495 20,707 Consumer 9,543 8,617 7,886 Deferred (Fees)/Costs (889 ) (1,365 ) (1,339 )Gross Loans Receivable $ 1,045,053 $ 1,055,071 $ 1,052,729

Asset Quality

In March 2020, Salisbury implemented a loan payment deferral program which allowed residential, commercial and consumer borrowers, who have been adversely affected by the COVID-19 pandemic, to defer loan payments for up to three months. Customers may also apply for additional deferments. As of June 30, 2021, loan payments were deferred on 10 commercial loans ($20 million loan balance) compared with 14 commercial loan deferrals ($27 million loan balance) as of March 31, 2021. There were no outstanding residential and consumer loan deferrals as of June 30, 2021.

Non-performing assets were $5.5 million, or 0.39% of total assets at June 30, 2021, compared with $5.6 million, or 0.44% of total assets at December 31, 2020, and $4.8 million, or 0.37% of total assets, at June 30, 2020.

The amount of total impaired and potential problem loans was $47.1 million or 4.50% of gross loans receivable at June 30, 2021 compared with $30.1 million, or 2.90% of gross loans receivable at December 31, 2020 and $26.9 million, or 2.55% of gross loans receivable at June 30, 2020. The increase from year-end 2020 primarily reflected the reduction of internal risk ratings on loans to certain borrowers in the hospitality and entertainment and recreation industries due to COVID-19.

Accruing loans receivable 30-to-89 days past due decreased to $1.4 million, or 0.13% of gross loans receivable at June 30, 2021 compared with $6.9 million, or 0.66% of gross loans receivable, at December 31, 2020 and $2.7 million, or 0.25% of gross loans receivable, at June 30, 2020.

The allowance for loan losses for second quarter 2021 was $12.7 million compared with $13.9 million for first quarter 2021 and $13.8 million for fourth quarter 2020.The second quarter 2021 included a net release of credit reserves of approximately $1.1 million compared with charges of $158 thousand in first quarter 2021 and $1.8 million in the second quarter 2020, respectively. The net release of reserves in second quarter 2021 reflected managements current assessment of the impact of the COVID-19 pandemic on the Banks loan portfolio. Net loan charge-offs were $103 thousand for the second quarter 2021, $26 thousand for first quarter 2021 and $87 thousand for the fourth quarter 2020. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, excluding PPP loans, was 1.29% for the second quarter 2021, versus 1.45% for first quarter 2021 and 1.44% for fourth quarter 2020. Similarly, reserve coverage, as measured by the ratio of the allowance for loan losses to non-performing loans was 229% for the second quarter 2021, versus 243% for first quarter 2021 and 244% for fourth quarter 2020.

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 were $1.2 billion at June 30, 2021 compared with $1.1 billion at December 31, 2020 and $1.1 billion at June 30, 2020. Deposits at June 30, 2021 included brokered deposits, including CDARS one-way buys, of $7.9 compared with $18.0 million at December 31, 2020 and $38.2 million at June 30, 2020. Average total deposits for the second quarter 2021 were $1.2 billion compared with $1.2 billion for the first quarter 2020 and $1.0 billion for the second quarter 2020. Average total deposits for the second quarter 2021 included average brokered deposits of $15.4 million compared with $18.0 million for first quarter 2021 and $44.2 million for second quarter 2020.

Federal Home Loan Bank of Boston (FHLBB) advances were $10.2 million at June 30, 2021 compared with $12.6 million and $55.1 million at December 31, 2020 and June 30, 2020, respectively. Salisburys excess borrowing capacity at FHLBB was approximately $248 million at June 30, 2021.

Capital

Shareholders equity increased $4.5 million in the second quarter to $131.7 million at June 30, 2021 as net income of $4.4 million, unrealized gains in the available-for-sale securities portfolio of $0.7 million and restricted stock activity of $0.3 million were partly offset by common stock dividends paid of $0.9 million. Book value per common share increased $1.30 during the second quarter 2021 to $46.02 per share and increased $4.36 from the second quarter 2020. Tangible book value per common share increased $1.36 during second quarter 2021 to $41.01 and increased $4.50 from second quarter 2020.

The Banks regulatory capital ratios remain in compliance with regulatory well capitalized requirements. At June 30, 2021, the Banks Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 9.33%, 14.67%, and 13.42%, respectively, compared with regulatory well capitalized minimums of 5.00%, 10.00%, and 6.5%, respectively.

On May 28, 2021 Salisbury redeemed in full the $10 million of subordinated debt that was issued in 2015. During second quarter 2021, Salisbury did not repurchase any of its outstanding common stock pursuant to its stock repurchase plan adopted in March 2021, which authorizes Salisbury to repurchase Salisburys common stock in amounts up to an aggregate of five percent (5%) of the outstanding shares of Salisburys common stock from time to time over a period of twelve (12) months.

Dividend on Common Shares

The Board of Directors of Salisbury approved a $0.01 increase in the quarterly dividend at its July 21, 2021 meeting. The quarterly cash dividend of $0.31 per common share will be paid on August 27, 2021 to shareholders of record as of August 13, 2021.

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.

Forward-Looking Statements

This news release may contain statements relating to Salisburys and the Banks 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 Salisburys quarterly reports on Form 10-Q and its annual report on Form 10-K, which are available at the Securities and Exchange Commissions 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 Salisburys 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 June 30, 2021, are available in the Shareholder Relations section of Salisburys website at salisburybank.com under Shareholder Relations/News & Market Information/Presentations.

Salisbury Bancorp, Inc. and SubsidiaryCONSOLIDATED BALANCE SHEETS

June 30, December 31,(in thousands, except share data) 2021 2020 (unaudited)ASSETS Cash and due from banks $ 8,853 $ 10,599 Interest bearing demand deposits with other banks 170,973 82,563 Total cash and cash equivalents 179,826 93,162 Interest bearing Time Deposits with Financial 750 750 InstitutionsSecurities Available-for-sale at fair value 150,530 98,411 CRA mutual fund at fair value 909 917 Federal Home Loan Bank of Boston stock at cost 1,504 1,713 Loans held-for-sale 415 2,735 Loans receivable, net (allowance for loan losses: 1,032,345 1,027,738 $12,708 and $13,754)Bank premises and equipment, net 21,375 20,355 Goodwill 13,815 13,815 Intangible assets (net of accumulated amortization: 538 674 $5,343 and $5,207)Accrued interest receivable 6,357 6,373 Cash surrender value of life insurance policies 21,433 21,182 Deferred taxes 2,390 2,412 Other assets 4,479 3,423 Total Assets $ 1,436,666 $ 1,293,660 LIABILITIES and SHAREHOLDERS' EQUITY Deposits Demand (non-interest bearing) $ 359,517 $ 310,769 Demand (interest bearing) 224,791 218,869 Money market 315,518 278,146 Savings and other 206,887 189,776 Certificates of deposit 136,656 131,514 Total deposits 1,243,369 1,129,074 Repurchase agreements 17,492 7,116 Federal Home Loan Bank of Boston advances 10,152 12,639 Subordinated debt 24,445 9,883 Note payable 189 208 Finance lease obligations 1,646 1,673 Accrued interest and other liabilities 7,664 8,315 Total Liabilities 1,304,957 1,168,908 Shareholders' Equity Common stock - $0.10 per share par value Authorized: 5,000,000; Issued: 2,861,697 and 2,843,292 Outstanding: 2,861,697 and 2,843,292 286 284 Unearned compensation ? restricted stock awards (1,224 ) (774 )Paid-in capital 46,217 45,264 Retained earnings 84,174 76,974 Accumulated other comprehensive income, net 2,256 3,004 Total Shareholders' Equity 131,709 124,752 Total Liabilities and Shareholders' Equity $ 1,436,666 $ 1,293,660

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

Three months ended Six months endedPeriods ended June 30,(in thousands, except 2021 2020 2021 2020per share amounts)Interest and dividend incomeInterest and fees on $ 9,901 $ 10,313 $ 20,377 $ 20,300 loansInterest on debt securitiesTaxable 488 409 912 864 Tax exempt 172 171 334 356 Other interest and 61 51 95 142 dividendsTotal interest 10,622 10,944 21,718 21,662 and dividend incomeInterest expense Deposits 567 988 1,121 2,497 Repurchase agreements 4 4 8 10 Finance lease 36 35 69 71 Note payable 3 4 6 7 Subordinated debt 415 156 534 312 Federal Home Loan Bank 32 140 65 359 of Boston advancesTotal interest 1,057 1,327 1,803 3,256 expenseNet interest and 9,565 9,617 19,915 18,406 dividend income(Release) provision for (1,075 ) 1,806 (917 ) 3,512 loan lossesNet interestand dividend incomeafter (release) 10,640 7,811 20,832 14,894 provision for loanlossesNon-interest income Trust and wealth 1,254 1,031 2,399 2,061 advisoryService charges and 1,374 598 2,325 1,503 feesMortgage banking 196 318 804 446 activities, netGains (losses) on CRA 3 8 (14 ) 22 mutual fund(Losses) gains on (9 ) 181 (9 ) 182 securities, netBank-owned lifeinsurance (?BOLI?) 125 133 251 266 incomeOther 28 47 57 80 Total 2,971 2,316 5,813 4,560 non-interest incomeNon-interest expense Salaries 3,403 2,411 6,304 5,261 Employee benefits 1,356 1,037 2,668 2,183 Premises and equipment 1,019 981 1,973 1,891 Data processing 628 557 1,193 1,098 Professional fees 644 758 1,355 1,385 Collections, OREO, and 113 79 197 104 loan relatedFDIC insurance 80 103 225 208 Marketing and community 214 169 296 293 supportAmortization of 65 83 136 170 intangiblesOther 564 611 1,133 1,000Total 8,086 6,789 15,347 13,726 non-interest expenseIncome before income 5,525 3,338 11,298 5,728 taxesIncome tax provision 1,172 604 2,419 947 Net income $ 4,353 $ 2,734 $ 8,879 $ 4,781 Net income available to $ 4,287 $ 2,691 $ 8,749 $ 4,704 common shareholders Basic earnings per $ 1.53 $ 0.96 $ 3.12 $ 1.68 common shareDiluted earnings per $ 1.52 $ 0.96 $ $ 1.68 common share 3.10Common dividends per $ 0.30 $ 0.29 $ 0.59 $ 0.58 share

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

At or for the quarters ended(in thousands,except per share Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020amounts andratios)Total assets $ 1,436,666 $ 1,403,129 $ 1,293,660 $ 1,292,760 $ 1,287,137 Loans receivable, 1,032,345 1,041,185 1,027,738 1,031,593 1,039,524 netTotal securities 152,943 129,960 101,041 99,794 93,717 Deposits 1,243,369 1,211,171 1,129,074 1,095,141 1,085,599 FHLBB advances 10,152 11,396 12,639 43,880 55,118 Shareholders? 131,709 127,242 124,752 122,240 118,444 equityWealth assetsunder 970,306 902,141 944,349 748,188 704,052 administrationDiscretionarywealth assets 614,312 578,199 554,997 514,988 480,456 underadministrationNon-discretionarywealth assets 355,994 323,942 389,352 233,200 223,596 underadministrationNon-performing 5,539 5,706 5,648 4,681 4,815 loansNon-performing 5,539 5,706 5,648 4,681 4,815 assetsAccruing loanspast due 30-89 1,400 2,374 6,850 1,638 2,656 daysNet interest and 9,565 10,350 9,817 9,925 9,617 dividend incomeNet interest anddividend income, 9,739 10,520 9,993 10,101 9,786 tax equivalent^(1)Provision(release) expense (1,075 ) 158 840 686 1,806 for loan lossesNon-interest 2,971 2,841 2,476 3,286 2,316 incomeNon-interest 8,086 7,259 8,054 7,259 6,789 expenseIncome before 5,525 5,774 3,399 5,266 3,338 income taxesIncome tax 1,172 1,248 596 910 604 provisionNet income 4,353 4,526 2,803 4,356 2,734 Net incomeallocated to 4,287 4,462 2,764 4,288 2,691 commonshareholders Per share data Basic earnings $ 1.53 $ 1.59 $ 0.99 $ 1.53 $ 0.96 per common shareDiluted earnings 1.52 1.59 0.98 1.53 0.96 per common shareDividends per 0.30 0.29 0.29 0.29 0.29 common shareBook value per 46.02 44.72 43.88 42.99 41.66 common shareTangible bookvalue per common 41.01 39.65 38.78 37.87 36.51 share - Non-GAAP?^2?Common sharesoutstanding at 2,862 2,845 2,843 2,843 2,843 end of period (inthousands)Weighted averagecommon sharesoutstanding, tocalculate basic 2,810 2,804 2,803 2,799 2,796 earnings pershare (inthousands)Weighted averagecommon sharesoutstanding, tocalculate diluted 2,829 2,815 2,811 2,807 2,803 earnings pershare (inthousands) Profitability ratiosNet interestmargin (tax 2.82 % 3.34 % 3.17 % 3.29 % 3.31 %equivalent) ^(1)Efficiency ratio 63.07 53.75 63.88 56.33 56.23 ^(3)Effective income 21.21 21.61 17.52 17.28 18.11 tax rateReturn on average 1.21 1.38 0.85 1.34 0.89 assetsReturn on averagecommon 13.51 14.53 8.97 14.31 9.36 shareholders?equity Credit quality ratiosNon-performingloans to loans 0.53 % 0.54 % 0.54 % 0.45 % 0.46 %receivable, grossAccruing loanspast due 30-89 0.13 0.23 0.66 0.16 0.25 days to loansreceivable, grossAllowance forloan losses to 1.22 1.32 1.32 1.24 1.18 loans receivable,grossAllowance forloan losses to 229.4 243.4 243.5 277.8 256.9 non-performingloansNon-performingassets to total 0.39 0.41 0.44 0.36 0.37 assets Capital ratios Commonshareholders' 9.17 % 9.07 % 9.64 % 9.46 % 9.20 %equity to assetsTangible commonshareholders'equity to 8.25 8.12 8.62 8.42 8.16 tangible assets -Non-GAAP^(2)Tier 1 leverage 9.33 9.83 8.90 8.93 8.95 capital ^(4)Total risk-based 14.67 14.58 13.57 13.60 13.15 capital ^(4)Common equitytier 1 capital ^ 13.42 13.33 12.31 12.35 11.90 (4)

(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) Calculated as follows: Noninterest expense before OREO expense, amortization of intangibles, and goodwill impairments as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains from securities transactions and litigation expenses. (4)Represents the capital ratios of the Bank.

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

At or for thequarters ended(inthousands,except per Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 share amountsand ratios)CommonShareholders' $ 131,709 $ 127,242 $ 124,752 $ 122,240 $ 118,444 EquityLess: (13,815 ) (13,815 ) (13,815 ) (13,815 ) (13,815 )GoodwillLess:Intangible (538 ) (603 ) (674 ) (748 ) (825 )assetsTangibleCommon $ 117,356 $ 112,824 $ 110,263 $ 107,677 $ 103,804 Shareholders'EquityTotal Assets $ 1,436,666 $ 1,403,129 $ 1,293,660 $ 1,292,760 $ 1,287,137 Less: (13,815 ) (13,815 ) (13,815 ) (13,815 ) (13,815 )GoodwillLess:Intangible (538 ) (603 ) (674 ) (748 ) (825 )assetsTangible $ 1,422,313 $ 1,388,711 $ 1,279,171 $ 1,278,197 $ 1,272,497 Total AssetsCommon Shares 2,862 2,845 2,843 2,843 2,843 outstanding Book valueper Common $ 46.02 $ 44.72 $ 43.88 $ 42.99 $ 41.66 Share ? GAAPTangible bookvalue per 41.01 39.65 38.78 37.87 36.51 Common Share- Non-GAAPTangiblecommonshareholders?equity to 8.25 % 8.12 % 8.62 % 8.42 % 8.16 %tangibletotal assets- Non-GAAPConsolidated: Non-interest $ 8,086 $ 7,259 $ 8,054 $ 7,259 $ 6,789 expenseLess:Amortizationof core (65 ) (71 ) (74 ) (78 ) (83 )depositintangiblesLess:Foreclosedpropertyexpense - - - 2 (7 )includingOREO gains,losses andWrite downsAdjustednon-interest $ 8,021 $ 7,188 $ 7,980 $ 7,183 $ 6,699 expenseNet interestand dividend $ 9,739 $ 10,520 $ 9,993 $ 10,101 $ 9,786 income, taxequivalentNon-interest 2,971 2,841 2,476 3,286 2,316 incomeLosses(gains) on 6 16 24 (34 ) (189 )securitiesBOLI proceeds - - - (601 ) - Adjusted $ 12,716 $ 13,377 $ 12,493 $ 12,752 $ 11,914 revenueEfficiencyRatio ? 63.07 % 53.75 % 63.88 % 56.33 % 56.23 %Non-GAAP ^1

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q2 2021: 61.59%; Q1 2021: 51.97%; Q4 2020: 62.62%; Q3 2020: 54.76%; Q2 2020: 54.29%.

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

At or for the Average Yield /three months Average Balance Income / Expense Rateended(dollars in Q2 2021 Q1 2021 Q2 2020 Q2 2021 Q1 2021 Q2 2020 Q2 Q1 Q2thousands) 2021 2021 2020Loans (a)(d) $ 1,052,381 $ 1,051,658 $ 1,038,551 $ 10,015 $ 10,592 $ 10,428 3.78% 4.02% 4.02%Securities (c) 138,164 103,062 86,987 720 640 634 2.08 2.48 2.92(d)FHLBB stock 1,830 1,948 3,580 11 9 39 2.41 1.85 4.36Short term funds 180,716 101,401 49,105 50 25 12 0.11 0.10 0.10(b)Totalinterest-earning 1,373,091 1,258,069 1,178,223 10,796 11,266 11,113 3.13 3.57 3.77assetsOther assets 70,447 71,252 60,288 Total assets $ 1,443,538 $ 1,329,321 $ 1,238,511 Interest-bearing $ 227,623 $ 218,425 $ 172,811 117 106 103 0.21 0.20 0.24demand depositsMoney market 315,665 288,767 237,667 138 129 239 0.18 0.18 0.40accountsSavings and 212,253 197,526 171,436 59 56 102 0.11 0.11 0.24otherCertificates of 147,103 129,603 157,288 252 264 544 0.69 0.83 1.38depositTotalinterest-bearing 902,644 834,321 739,202 566 555 988 0.25 0.27 0.53depositsRepurchase 12,010 8,453 4,773 4 3 4 0.15 0.15 0.34agreementsFinance lease 2,751 2,824 2,987 36 32 35 5.26 4.60 4.69Note payable 192 200 231 3 3 4 6.09 6.18 6.93Subordinated 30,789 10,156 9,866 415 119 156 5.39 4.68 6.32debt (f)FHLBB advances 10,576 11,825 55,374 33 34 140 1.21 1.14 1.01Totalinterest-bearing 958,962 867,779 812,433 1,057 746 1,327 0.44 0.35 0.65liabilitiesDemand deposits 348,561 328,372 302,965 Other 6,786 6,839 6,029 liabilitiesShareholders? 129,229 126,331 117,084 equityTotalliabilities & $ 1,443,538 $ 1,329,321 $ 1,238,511 shareholders?equityNet interest $ 9,739 $ 10,520 $ 9,786 incomeSpread oninterest-bearing 2.69 3.22 3.12fundsNet interest 2.82 3.34 3.31margin (e)

(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 Q2 2021, Q1 2021 and Q2 2020 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 2021 and 2020. (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)

Six months ended June Average Balance Income / Expense Average Yield30, / Rate(dollars in thousands) 2021 2020 2021 2020 2021 2020Loans (a)(d) $ 1,052,020 $ 993,293 $ 20,605 $ 20,524 3.90% 4.13%Securities (c)(d) 120,710 88,292 1,360 1,332 2.25 3.02FHLBB stock 1,889 3,310 20 72 2.13 4.35Short term funds (b) 141,278 36,161 76 70 0.11 0.39Total earning assets 1,315,897 1,121,056 22,061 21,998 3.34 3.92Other assets 70,848 62,365 Total assets $ 1,386,745 $ 1,183,421 Interest-bearing demand $ 223,049 $ 163,707 223 222 0.20 0.27depositsMoney market accounts 302,290 239,173 267 799 0.18 0.67Savings and other 204,930 167,805 115 336 0.11 0.40Certificates of deposit 138,402 156,078 516 1,140 0.75 1.46Total interest-bearing 868,671 726,763 1,121 2,497 0.26 0.69depositsRepurchase agreements 10,241 5,223 8 10 0.15 0.38Finance lease 2,787 3,019 69 71 4.93 4.70Note payable 196 235 6 7 6.14 5.96Subordinated Debt (f) 20,529 9,864 534 312 5.20 6.33FHLBB advances 11,197 46,247 65 359 1.17 1.55Total interest-bearing 913,621 791,351 1,803 3,256 0.40 0.82liabilitiesDemand deposits 338,486 269,031 Other liabilities 6,851 6,460 Shareholders? equity 127,787 116,579 Total liabilities & $ 1,386,745 $ 1,183,421 shareholders? equityNet interest income $ 20,258 $ 18,742 Spread on 2.95 3.10interest-bearing fundsNet interest margin (e) 3.06 3.33

(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 $0.3 million and $0.3 million, respectively for 2021 and 2020 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 2021 and 2020.(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