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Calvin B. Taylor Bankshares, Inc. Reports Fourth Quarter and Year End Financial Results for 2022

BERLIN, MD / ACCESSWIRE / February 22, 2023 / Calvin B. Taylor Bankshares, Inc. (the "Company") (OTCQX:TYCB), parent company of Calvin B. Taylor Bank, today reported net income of $11.77 million for the year ended December 31, 2022, as compared to $9.48 million for the year ended December 31, 2021. Net income was $3.09 million for the fourth quarter ended December 31, 2022 ("4Q22"), as compared to $2.14 million for the fourth quarter ended December 31, 2021 ("4Q21") and $3.71 million for the third quarter ended September 30, 2022 ("3Q22"). President and Chief Executive Officer Raymond M. Thompson remarked, "The Company experienced strong fourth quarter performance. Continued loan demand and substantial increases in the fed funds rate in the last 12 months contributed to a 44.3% increase in net income in the fourth quarter of 2022, as compared to the fourth quarter of 2021. Total loans increased $78.2 million, or 18.0% since December 31, 2021. Robust loan growth combined with higher yields on investment securities and fed funds contributed to yet another year of record earnings, with 2022 net income increasing 24.1% over the prior year. While the company continued to grow organically during 2022, the slowdown in asset growth was anticipated following the expiration of COVID-19 related stimulus programs. As a result of the Company's strong financial performance, the Board of Directors declared a total dividend of $1.26 per share in 2022, an 8.6% increase over the prior year. We will continue to monitor economic and industry trends heading into 2023, and make operational adjustments as circumstances dictate." Highlights of the company's financial results are noted below and included in the following tables.

  • Organic loan growth, excluding Paycheck Protection Program ("PPP") loans, was $84.2 million, or 19.6%, since December 31, 2021. Loans increased $24.5 million, or 5.0%, since September 30, 2022.
  • Average deposits were $101.3 million, or 14.0%, higher during the year ended December 31, 2022, as compared to the prior year.
  • Loan growth combined with higher yields on securities and fed funds sold resulted in a $599 thousand, or 8.4%, increase in net interest income in 4Q22 as compared to the previous quarter. Net interest income for the year ended December 31, 2022 increased $4.7 million, or 21.8%, as compared to the prior year, due to higher revenue from loans, securities, and fed funds sold.
  • Net interest margin increased to 3.44% in 4Q22, as compared to 2.64% in 4Q21 and 3.14% in 3Q22. Loan growth accompanied by rising yields on securities and fed funds sold increased net interest margin by 30 basis points in 4Q22 as compared to 3Q22. Net interest margin increased to 2.98% for the year ended December 31, 2022, as compared to 2.79% in 2021.
  • The provision for loan losses decreased $20 thousand for the year ended December 31, 2022, as compared to the prior year. The provision expense related to 2022 loan growth was offset by a loan loss recovery received in 4Q22.
  • Net income growth outpaced average asset growth, which increased Return on Average Assets ("ROA") to 1.27% in 2022, as compared to 1.15% in 2021.
  • Dividends declared were $1.26 per share for the year ended December 31, 2022 compared to $1.16 per share for 2021, an increase of 8.6%.

Year to Date Results of Operations

Loan interest income, including fees, was $21.4 million for the year ended December 31, 2022, as compared to $20.7 million in the previous year, which is the result of continued organic loan growth and higher interest revenue on variable rate loans. Loan interest income, including fees, increased over the previous year despite a $2.1 million decrease in PPP loan interest income, including fees. Loan interest income, excluding PPP interest revenue, increased 15.1% in 2022 as compared to 2021. Loan yields were 4.49% for the year ended December 31, 2022, as compared to 4.63% in the previous year. PPP loan fees recognized in 2021 resulted in higher yields on loans during that period.

Net interest income increased 21.8% to $26.4 million for the year ended December 31, 2022, as compared to $21.7 million in the prior year. Increases in the average balances of loans, debt securities and fed funds sold combined with higher yields on those asset classes resulted in higher net interest income. Deposit costs increased $815 thousand, or 104.1%, for the year ended December 31, 2022, as compared to the prior year. Higher deposit costs were attributable to a $79.4 million, or 17.4%, increase in the average balance of interest-bearing deposits and an increase in the cost of interest-bearing deposits from 0.17% in 2021 to 0.30% in 2022. Average interest-earning assets for the year ended December 31, 2022 increased by $104.2 million, or 13.3%, when compared to the prior year. The growth in net interest income outpaced the growth in interest-earning assets in 2022, thus increasing net interest margin to 2.98% for the year ended December 31, 2022, as compared to 2.79% for the year ended December 31, 2021.

Provision for loan losses was $105 thousand for the year ended December 31, 2022, as compared to $125 thousand in the prior year. Net recoveries were $591 thousand for the year ended December 31, 2022, as compared to net recoveries of $75 thousand for the year ended December 31, 2021. The increase in net recoveries in 2022 was related to the resolution of a longstanding nonaccrual loan that required partial charge-offs in previous years due to decreases in the underlying collateral values. Changes in local real estate demand following the COVID-19 pandemic resulted in substantial increases in value of the underlying collateral and resulted in full recovery of principal previously charged-off. The total recovery related to this loan was $608 thousand. Higher provision expense associated with organic loan growth, excluding PPP loans, of 19.6% in 2022 was partially offset by this recovery. Government economic stimulus payments, PPP loans, foreclosure moratoriums, and increasing residential real estate prices have mitigated charge offs subsequent to the COVID-19 pandemic. However, uncertainty about borrowers' ability to repay absent government stimulus programs and rapid increases in real estate values have prevented a reduction in the allowance for loan losses at this time.

Noninterest income was $3.5 million for the year ended December 31, 2022, which is a decrease of $581 thousand, or 14.4%, as compared to the prior year. The decrease in noninterest income was primarily attributable to an increase in realized losses on available for sale debt securities and a decrease in noninterest income from death proceeds of bank owned life insurance policies. Realized losses on available for sale debt securities increased by $700 thousand in 2022 as a result of restructuring the debt securities portfolio to sell lower-yielding securities and purchase new securities at substantially higher yields to maximize future interest revenue. Noninterest income from death proceeds of bank owned life insurance policies decreased by $212 thousand for the year ended December 31, 2022, as compared to the prior year. While income from the increase in cash surrender value of bank owned life insurance is generally consistent and recurring income, the income from death proceeds is not, and occurs upon the death of an insured employee or former employee. Bank owned life insurance investments recover present and long-term costs of employee benefits and compensation. Increases in debit card interchange fees, merchant payment processing fees, and overdraft fees partially offset the decrease in noninterest income associated with unrealized losses on available for sale debt securities and bank owned life insurance death proceeds.

Noninterest expense increased 8.2% from $13.2 million for the year ended December 31, 2021 to $14.3 million for the year ended December 31, 2022, and was primarily attributable to an increase salaries, marketing and data processing expenses. Salaries expense increased in 2022 by $538 thousand, or 9.4%, as compared to the prior year, including a $111 thousand decrease in salaries expense deferred for loan origination activities. Significant PPP loan origination activity in the year ended December 31, 2021 resulted in a higher percentage of salaries expense deferred for loan origination activities. The remaining increase in salaries expense was related to fulfillment of open positions and higher salaries paid to remain competitive in the current labor market. Employee benefits costs decreased in 2022 by $225 thousand, or 12.1%, as compared to the prior year, and partially offset the increases in noninterest expense related to salaries, marketing and data processing costs. Employee health insurance is provided through a partially self-funded plan and claims incurred by the plan were lower in 2022, as compared to 2021, resulting in the decrease in employee benefits costs. Increases in net interest income exceeded the increases in noninterest expense, which caused the efficiency ratio to decrease from 51.5% for the year ended December 31, 2021 to 46.9% for the year ended December 31, 2022.

Net income increased 24.1% to $11.8 million for the year ended December 31, 2022, as compared to $9.5 million for the year ended December 31, 2021, and was primarily attributable to a 21.8% increase in net interest income. Sustained growth in deposits in the last 12 months associated with the COVID-19 pandemic resulted in an increase in average assets of 12.3% for the year ended December 31, 2022, as compared to the prior year. Net income growth outpaced the growth in average assets in 2022, which resulted in the Return on Average Assets ("ROA") increasing to 1.27% for the year ended December 31, 2022, as compared to 1.15% in 2021. Return on Average Stockholders' Equity ("ROE") increased from 9.7% for the year ended December 31, 2021 to 12.3% for the year ended December 31, 2022, due to a decrease in average equity of 2.3%, as compared to an 24.1% increase in net income in the same period. The decrease in average equity is due to an increase in unrealized losses, net of deferred income taxes, on available for sale debt securities that resulted from a rapid increase in market interest rates in 2022. Dividends declared were $1.26 per share for the year ended December 31, 2022, as compared to $1.16 per share in the previous year, an increase of 8.6%. Dividend payout ratios were 21.8% for the year ended December 31, 2022, as compared to 33.8% in the previous year.

Quarterly Results of Operations

Loan interest income, including fees, increased to $5.80 million in 4Q22, as compared to $5.37 million in 4Q21 and $5.49 million in 3Q22, as the result of continued organic loan growth and higher interest income on variable rate loans. Average loan balances in 4Q22 increased by 14.7% compared to 4Q21 and 1.8% compared to 3Q22. Higher loan interest income attributable to organic loan growth was partially offset by a decrease in PPP loan interest income, including fees. PPP loan interest income, including fees, was zero in 4Q22, as compared to $734 thousand in 4Q21 and $7 thousand in 3Q22. The outstanding balance of PPP loans as of December 31, 2022 was $3 thousand. Loan yields were 4.61% in 4Q22, as compared to 4.90% in 4Q21 and 4.45% in 3Q22. PPP loan fees recognized in 4Q21 resulted in higher yields on loans during that period.

Net interest income increased to $7.8 million in 4Q22, as compared to $5.7 million in 4Q21 and $7.2 million in 3Q22. Increases in the average balances of loans and debt securities combined with higher yields on fed funds sold and debt securities in 4Q22 resulted in higher net interest income. Deposit costs in 4Q22 increased $354 thousand, or 89.0%, as compared to 3Q22. Higher deposit costs were attributable to a $4.4 million, or 0.8%, increase in the average balance of interest-bearing deposits in 4Q22, as compared to 3Q22, and an increase in the costs of interest-bearing deposits from 0.29% in 3Q22 to 0.55% in 4Q22. Deposit costs in 4Q22 increased $542 thousand, or 257.0%, as compared to 4Q21. Higher deposit costs were attributable to a $29.0 million, or 5.6%, increase in the average balance of interest-bearing deposits in 4Q22, as compared to 4Q21, and an increase in the costs of interest-bearing deposits from 0.16% in 4Q21 to 0.55% in 4Q22. Net interest margin increased to 3.44% in 4Q22, as compared to 2.63% in 4Q21 and 3.14% in 3Q22. Growth in interest income outpaced the increase in deposit costs during the same period thus increasing net interest margin.

The provision for loan losses was ($170) thousand in 4Q22, as compared to $50 thousand recorded in 3Q22, while no provision was recorded in 4Q21. Net recoveries were $589 thousand in 4Q22, as compared to net charge-offs of $11 thousand in 4Q21 and $30 thousand in 3Q22. Charge-offs in 4Q21 and 3Q22 primarily relate to overdraft deposit accounts and consumer loans. Net recoveries recorded in 4Q22 relate to the resolution of a longstanding nonaccrual loan that required partial charge-offs in previous years due to decreases in the underlying collateral values. Changes in local real estate demand following the COVID-19 pandemic resulted in substantial increases in value of the underlying collateral and resulted in full recovery of principal previously charged-off. The total recovery related to this loan was $608 thousand. Higher provision expense associated with organic loan growth, excluding PPP loans, of 5.0% in 4Q22 was partially offset by this recovery. Government economic stimulus payments, PPP loans, foreclosure moratoriums, and increasing residential real estate prices have mitigated charge offs subsequent to the COVID-19 pandemic. However, uncertainty about borrowers' ability to repay absent government stimulus programs and rapid increases in real estate values have prevented a reduction in the allowance for loan losses at this time.

Noninterest income was $343 thousand in 4Q22, as compared to $888 thousand in 4Q21 and $1.2 million in 3Q22. The decrease in noninterest income in 4Q22, as compared to 4Q21 and 3Q22, is primarily attributable to an increase in realized losses on available for sale debt securities. Realized losses on available for sale debt securities increased by $652 thousand in 4Q22, as compared to 4Q21, and increased by $657 thousand compared to 3Q22. The increase was the result of restructuring the debt securities portfolio in 4Q22 to sell lower-yielding securities and purchase new securities at substantially higher yields to maximize future interest revenue. Noninterest income from death proceeds of bank owned life insurance policies decreased by $132 thousand in 4Q22, as compared to 3Q22. While income from the increase in cash surrender value of bank owned life insurance is generally consistent and recurring income, the income from death proceeds is not, and occurs upon the death of an insured employee or former employee. Bank owned life insurance investments recover present and long-term costs of employee benefits and compensation.

Noninterest expense increased 10.4% to $4.25 million in 4Q22, as compared to $3.85 million in 4Q21, and is primarily attributable to a $190 thousand, or 10.8%, increase in salaries expense. Higher salaries expense relates to the fulfillment of open positions and higher salaries paid to remain competitive in the current labor market. Other categories of noninterest expense have also increased due to vendor price increases associated with current inflation trends including higher labor costs. Increases in net interest income in 4Q22, compared to 4Q21, far exceeded increases in noninterest expense during the same period, which caused the efficiency ratio to decrease from 58.21% in 4Q21 to 48.53% in 4Q22. Noninterest expense increased in 4Q22 by $847 thousand, or 24.9%, as compared to 3Q22, and primarily relates to yearend bonuses and contributions to the employee 401K plan based on profit sharing. The increase in noninterest expense in 4Q22, compared to 3Q22, exceeded the increase in net interest income during the same period, which caused the efficiency ratio to increase from 40.76% in 3Q22 to 48.53% in 4Q22.
Net income increased 44.3% to $3.1 million in 4Q22, as compared to $2.1 million in 4Q21, and was primarily attributable to a 35.6% increase in net interest income and decrease in the provision for loan losses. Growth in deposits during the last 12 months has slowed following the rapid growth experienced during the COVID-19 pandemic. Average assets increased 2.0% in 4Q22, as compared to 4Q21. Net income growth outpaced the growth in average assets, which resulted in the ROA increasing from 0.94% 4Q21 to 1.33% in 4Q22. ROE increased from 8.6% in 4Q21 to 13.3% in 4Q22 due to a decrease in average equity of 6.7%, as compared to a 44.3% increase in net income. The decrease in average equity is due to an increase in unrealized losses, net of deferred income taxes, on available for sale debt securities that resulted from a rapid increase in market interest rates in 2022. Dividends declared were $0.33 per share in 4Q22 compared to $0.29 per share in 4Q21, which resulted in dividend payout ratios of 29.5% for 4Q22 and 37.4% for 4Q21. Compared to the prior quarter, net income in 4Q22 decreased $619 thousand, or 16.7%, and was related to an $848 thousand decrease in noninterest income and $847 thousand increase in noninterest expense as previously noted. ROA decreased from 1.56% in 3Q22 to 1.33% in 4Q22 and ROE decreased from 15.52% in 3Q22 to 13.31% in 4Q22.

Financial Condition

Total assets were $905.9 million as of December 31, 2022, an increase of 0.2%, as compared to total assets of $904.5 million as of December 31, 2021. Asset growth has recently slowed compared to growth experienced during and immediately after the COVID-19 pandemic. Growth during the COVID-19 pandemic was primarily the result of customer behavior changes and government economic stimulus programs, which resulted in a significant increase in customer deposits and total assets. Rapid increases in market interest rates during 2022 increased unrealized losses, net of deferred income taxes, on available for sale debt securities by $13.1 million since December 31, 2021. Asset growth excluding the change in unrealized loss, net of deferred incomes taxes, was $14.6 million, or 1.6%, since December 31, 2021. Total assets have decreased by $26.7 million, or 2.9%, since September 30, 2022 which is attributable to seasonal deposit decreases and outflows of other deposits that are earning higher interest rates currently offered by short term government bond investments.

Deposits have increased 0.7% to $809.0 million as of December 31, 2022, as compared to $803.2 million as of December 31, 2021. Interest-bearing deposits increased 4.4% since December 31, 2021 while noninterest-bearing deposits have decreased 6.1% in the same period. The rapid increase in short term interest rates during 2022 has motivated customers to move funds into interest-bearing accounts. Seasonal deposit decreases and outflows of other deposits that are earning higher interest rates currently offered by short term government bond investments resulted in a decrease in total deposits of $30.5 million, or 3.6%, since September 30, 2022.

Total loans as of December 31, 2022 were $513.0 million, as compared to $434.9 million as of December 31, 2021, which represents growth of $78.2 million, or 18.0%, in the last twelve months. Loan growth, excluding PPP loans, was $84.2 million, or 19.6%, since December 31, 2021 and is the result of strong commercial and residential real estate loan demand in our markets. Repayments of PPP loans resulted in a $6.0 million decrease in PPP loans since December 31, 2021, which relate to ongoing repayments by the Small Business Administration as customers receive forgiveness of their PPP loans. Loans increased $24.5 million, or 5.0%, since September 30, 2022. PPP loans, net of unamortized loan fees, were $3 thousand as of December 31, 2022, as compared to $6.0 million as of December 31, 2021. The loans to deposits ratio as of December 31, 2022 was 63.4%, as compared to 54.1% as of December 31, 2021 and 58.2% as of September 30, 2022.

Nonaccrual loans and loans past due 30 days or more totaled $2.4 million as of December 31, 2022, as compared to $2.1 million as of December 31, 2021 and $1.3 million as of September 30, 2022. Nonaccrual loans were $95 thousand as of December 31, 2022, as compared to $247 thousand as of December 31, 2021 and $214 thousand as of September 30, 2022. The majority of nonaccrual loans and loans past due 30 days or more as of December 31, 2022 were loans secured by residential mortgages. The allowance for loan losses was $2.6 million as of December 31, 2022 and represents 0.51% of total loans.

Average assets grew by 12.3% to $926.7 million for the year ended December 31, 2022, as compared to $825.1 million for the year ended December 31, 2021. 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 deposits increased 14.0% for the year ended December 31, 2022, as compared to the previous year. Average loans increased $30.7 million, or 6.9%, to $477.5 million for the year ended December 31, 2022, as compared to $446.8 million for the year ended December 31, 2021. Growth in average loans occurred despite a $28.9 million decrease in the average balance of PPP loans for the year ended December 31, 2022, as compared to the previous year. The average balance of other loan categories increased in 2022 by $59.6 million as commercial and residential real estate loan demand continued. The average loans to average deposits ratio decreased to 57.8% for the year ended December 31, 2022, as compared to 61.6% in 2021, and relates to significant growth in average deposits associated with the COVID-19 pandemic.

Calvin B. Taylor Bankshares, Inc. & Subsidiary
Financial Highlights

Three Months Ended Year Ended
December 31, % December 31, %
Results of Operations
2022 2021 Change 2022 2021 Change
Net interest income
$ 7,757,754 $ 5,721,130 35.6 % $ 26,403,331 $ 21,680,227 21.8 %
Provision for loan losses
$ (170,000 ) $ - - $ 105,000 $ 125,000 -16.0 %
Noninterest income
$ 342,840 $ 888,386 -61.4 % $ 3,468,391 $ 4,049,613 -14.4 %
Noninterest expense
$ 4,249,788 $ 3,850,768 10.4 % $ 14,301,377 $ 13,213,173 8.2 %
Net income
$ 3,089,306 $ 2,140,748 44.3 % $ 11,769,345 $ 9,480,667 24.1 %
Net income per share
$ 1.12 $ 0.78 44.5 % $ 4.26 $ 3.43 24.4 %
Dividend per share
$ 0.33 $ 0.29 13.8 % $ 1.26 $ 1.16 8.6 %
Dividend payout ratio
29.48 % 37.40 % 21.81 % 33.82 %
Average assets
$ 931,189,951 $ 912,895,443 2.0 % $ 926,743,588 $ 825,119,989 12.3 %
Average loans
$ 498,911,981 $ 435,123,740 14.7 % $ 477,481,342 $ 446,811,889 6.9 %
Average deposits
$ 833,783,684 $ 810,312,556 2.9 % $ 826,721,654 $ 725,385,781 14.0 %
Average loans to average deposits
59.84 % 53.70 % 57.76 % 61.60 %
Average stockholders' equity
$ 92,830,965 $ 99,522,182 -6.7 % $ 95,496,485 $ 97,707,915 -2.3 %
Average stockholders' equity to average assets
9.97 % 10.90 % 10.30 % 11.84 %
Ratios
Net interest margin
3.44 % 2.64 % 2.98 % 2.79 %
Return on average assets
1.33 % 0.94 % 1.27 % 1.15 %
Return on average stockholders' equity
13.31 % 8.60 % 12.32 % 9.70 %
Efficiency ratio
48.53 % 58.21 % 46.86 % 51.46 %
Stock Repurchased
Number of shares
- 4,404 -100.0 % 1,720 12,172 -85.9 %
Repurchase amount
$ - $ 158,254 -100.0 % $ 62,797 $ 421,834 -85.1 %
Average price per share
- $ 35.93 -100.0 % $ 36.51 $ 34.66 5.3 %
December 31, December 31, % December 31, September 30, %
Financial Condition
2022 2021 Change 2022 2022 Change
Assets
$ 905,940,143 $ 904,478,786 0.2 % $ 905,940,143 $ 932,633,236 -2.9 %
Loans
$ 513,025,696 $ 434,866,477 18.0 % $ 513,025,696 $ 488,548,319 5.0 %
Deposits
$ 809,008,459 $ 803,245,622 0.7 % $ 809,008,459 $ 839,553,890 -3.6 %
Stockholders' equity
$ 94,224,247 $ 99,088,916 -4.9 % $ 94,224,247 $ 90,828,716 3.7 %
Common stock - shares outstanding
2,759,040 2,760,760 -0.1 % 2,759,040 2,759,360 0.0 %
Book value per share
$ 34.15 $ 35.89 -4.8 % $ 34.15 $ 32.92 3.7 %
Loans to deposits
63.41 % 54.14 % 63.41 % 58.19 %
Equity to assets
10.40 % 10.96 % 10.40 % 9.74 %

Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Balance Sheets

(unaudited) (unaudited)
December 31, 2022 December 31, 2021 September 30, 2022
Assets
Cash and cash equivalents
Cash and due from banks
$ 9,060,252 $ 9,931,724 $ 10,274,435
Federal funds sold and interest-bearing deposits
133,316,028 280,331,067 186,358,548
Total cash and cash equivalents
142,376,280 290,262,791 196,632,983
Time deposits in other financial institutions
1,225,953 3,478,221 1,726,929
Debt securities available for sale, at fair value
167,934,059 128,654,564 168,803,379
Debt securities held to maturity, at amortized cost
39,110,156 13,967,244 35,410,939
Equity securities, at cost
748,833 748,833 748,833
Restricted stock, at cost
469,500 355,000 467,000
Loans
513,025,696 434,866,477 488,548,319
Less: allowance for loan losses
(2,624,369 ) (1,998,728 ) (2,205,383 )
Net loans
510,401,327 432,867,749 486,342,936
Accrued interest receivable
2,036,468 1,701,446 1,660,109
Debt securities sold receivable
1,789,635 - -
Prepaid expenses
730,891 645,725 436,997
Other real estate owned
- - -
Premises and equipment, net
12,751,025 12,904,446 12,848,920
Computer software, net
238,009 342,148 276,546
Deferred income taxes, net
4,467,476 - 5,013,425
Bank owned life insurance and annuities
21,398,096 18,223,348 21,244,217
Other assets
262,435 327,271 1,020,023
Total assets
$ 905,940,143 $ 904,478,786 $ 932,633,236
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing
$ 265,805,939 $ 283,096,833 $ 306,074,106
Interest-bearing
543,202,520 520,148,789 533,479,784
Total deposits
809,008,459 803,245,622 839,553,890
Accrued interest payable
75,438 26,029 48,040
Dividends payable
910,483 800,620 910,589
Accrued expenses
703,052 623,132 244,502
Non-qualified deferred compensation
654,674 645,716 614,217
Deferred income taxes
- 6,759 -
Other liabilities
363,790 41,992 433,282
Total liabilities
811,715,896 805,389,870 841,804,520
Stockholders' equity
Common stock, par value $1 per share; authorized 10,000,000 shares
2,759,040 2,760,760 2,759,360
Additional paid-in capital
2,337,456 2,398,533 2,349,297
Retained earnings
102,963,224 94,670,987 100,784,401
Accumulated other comprehensive loss, net of tax
(13,835,473 ) (741,364 ) (15,064,342 )
Total stockholders' equity
94,224,247 99,088,916 90,828,716
Total liabilities and stockholders' equity
$ 905,940,143 $ 904,478,786 $ 932,633,236

Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)

For the three months ended For the twelve months ended
Dec 31, 2022 Dec 31, 2021 Dec 31, 2022 Dec 31, 2021
Interest income
Loans, including fees
$ 5,797,668 $ 5,370,705 $ 21,423,142 $ 20,743,244
U. S. Treasury and government agency debt securities
397,198 107,108 1,041,598 316,116
Mortgage-backed debt securities
636,438 253,779 1,826,957 763,388
State and municipal debt securities
105,325 57,812 412,724 204,809
Federal funds sold and interest-bearing deposits
1,567,249 118,048 3,262,234 296,319
Time deposits in other financial institutions
6,185 24,421 34,842 139,461
Total interest income
8,510,063 5,931,873 28,001,497 22,463,337
Interest expense
Deposits
752,309 210,743 1,598,166 783,110
Net interest income
7,757,754 5,721,130 26,403,331 21,680,227
Provision for loan losses
(170,000 ) - 105,000 125,000
Net interest income after provision for loan losses
7,927,754 5,721,130 26,298,331 21,555,227
Noninterest income
Debit card and ATM
358,558 351,665 1,449,508 1,394,789
Service charges on deposit accounts
241,731 220,951 949,622 776,076
Merchant payment processing
93,613 90,453 490,147 454,985
Income from bank owned life insurance and annuities
155,216 79,862 399,518 362,890
Income from bank owned life insurance death proceeds
1,755 3,992 410,684 622,455
Dividends
47,552 39,780 64,879 57,746
Gain (loss) on disposition of investment securities
(657,178 ) (5,456 ) (649,515 ) 50,869
Loss on disposition of fixed assets
(20,601 ) (13,875 ) (20,541 ) (24,564 )
Miscellaneous
122,194 121,014 374,089 354,367
Total noninterest income
342,840 888,386 3,468,391 4,049,613
Noninterest expenses
Salaries
1,958,714 1,768,257 6,289,401 5,751,045
Employee benefits
636,891 654,364 1,631,081 1,856,256
Occupancy
255,728 238,192 964,046 925,648
Furniture and equipment
202,682 188,168 860,933 777,574
Data processing
241,435 178,358 855,900 727,825
Debit card and ATM
159,966 157,161 635,243 545,657
Marketing
85,356 105,901 460,015 304,173
Directors fees
74,550 68,100 312,350 311,650
Telecommunication services
86,207 81,915 316,534 328,468
Deposit insurance premiums
65,910 60,300 248,288 217,306
Other operating
482,349 350,052 1,727,586 1,467,571
Total noninterest expenses
4,249,788 3,850,768 14,301,377 13,213,173
Income before income taxes
4,020,806 2,758,748 15,465,345 12,391,667
Income taxes
931,500 618,000 3,696,000 2,911,000
Net income
$ 3,089,306 $ 2,140,748 $ 11,769,345 $ 9,480,667
Earnings per common share - basic and diluted
$ 1.12 $ 0.78 $ 4.26 $ 3.43

Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Comprehensive Income (unaudited)

For the three months ended For the twelve months ended
Dec 31, 2022 Dec 31, 2021 Dec 31, 2022 Dec 31, 2021
Net income
$ 3,089,306 $ 2,140,748 $ 11,769,345 $ 9,480,667
Other comprehensive income (loss)
Net unrealized gain (loss) on available for sale debt securities, net of deferred income tax
1,228,869 (846,440 ) (13,094,109 ) (1,548,567 )
Total other comprehensive income (loss)
1,228,869 (846,440 ) (13,094,109 ) (1,548,567 )
Total comprehensive income (loss)
$ 4,318,175 $ 1,294,308 $ (1,324,764 ) $ 7,932,100

Calvin B. Taylor Bankshares, Inc. and Subsidiary
Consolidated Statements of Cash Flows (unaudited)

For the three months ended For the twelve months ended
Dec 31, 2022 Dec 31, 2021 Dec 31, 2022 Dec 31, 2021
Cash flows from operating activities
Net income
$ 3,089,306 $ 2,140,748 $ 11,769,345 $ 9,480,667
Adjustments to reconcile net income to net cash provided by
operating activities
Premium amortization and discount accretion
89,722 213,683 627,443 769,325
Loss (gain) on disposition of investment securities
657,178 5,456 649,515 (50,869 )
Provision for loan losses
(170,000 ) - 105,000 125,000
Depreciation and amortization
236,376 235,114 943,882 963,237
Loss on disposition of premises, equipment, and software
20,601 13,875 20,541 24,564
Income from bank owned life insurance and annuities
(155,216 ) (124,473 ) (399,518 ) (407,501 )
Income from bank owned life insurance death proceeds
(1,755 ) (3,982 ) (410,684 ) (622,445 )
Accrued and deferred income taxes
(233,362 ) (91,501 ) 77,423 393,548
Decrease (increase) in
Deferred loan fees and costs, net
18,053 (633,214 ) (41,942 ) (113,035 )
Accrued interest receivable
(376,359 ) 55,141 (335,022 ) 700,776
Other assets
463,691 (107,826 ) (154,232 ) 339,385
Increase (decrease) in other liabilities
608,443 482,298 436,960 173,281
Net cash provided by operating activities
4,246,678 2,185,319 13,288,711 11,775,933
Cash flows from investing activities
Time deposits matured, net of purchases
499,999 2,000,000 2,248,000 5,250,000
Available for sale debt securities
Sales
11,783,906 2,715,037 12,097,904 10,149,255
Maturities, prepayments and calls
5,985,343 8,575,189 18,733,714 27,161,328
Purchases
(15,745,155 ) (20,746,368 ) (88,847,204 ) (96,571,247 )
Held to maturity debt securities
Maturities, prepayments and calls
- 3,000,000 - 7,000,000
Purchases
(5,531,561 ) (14,991,229 ) (26,961,340 ) (14,991,229 )
Loans originated, net of principal reductions
(23,906,443 ) 11,593,412 (77,596,636 ) (11,248,399 )
Liquidating distribution from equity security
- - 7,018 -
Purchase of restricted stock, at cost
(2,500 ) - (114,500 ) -
Redemption of restricted stock, at cost
- - - 136,400
Proceeds from sale of premises and equipment
- - 60 3,449
Purchases of premises, equipment, and computer software
(120,545 ) (623,998 ) (706,923 ) (897,098 )
Bank owned life insurance death proceeds
1,755 (11 ) 1,312,710 1,269,408
Purchase of bank owned life insurance and annuities
- - (3,680,821 ) (5,057,031 )
Net cash used by investing activities
(27,035,201 ) (8,477,968 ) (163,508,018 ) (77,795,164 )
Cash flows from financing activities
Net increase (decrease) in
Time deposits
(92,754 ) 404,927 (141,665 ) 8,236,755
Other deposits
(30,452,678 ) (5,062,019 ) 5,904,503 180,571,787
Common shares repurchased
(12,160 ) (158,254 ) (62,797 ) (421,834 )
Dividends paid
(910,588 ) (801,897 ) (3,367,245 ) (3,210,010 )
Net cash provided by financing activities
(31,468,180 ) (5,617,243 ) 2,332,796 185,176,698
Net increase (decrease) in cash and cash equivalents
(54,256,703 ) (11,909,892 ) (147,886,511 ) 119,157,467
Cash and cash equivalents at beginning of period
196,632,983 302,172,683 290,262,791 171,105,324
Cash and cash equivalents at end of period
$ 142,376,280 $ 290,262,791 $ 142,376,280 $ 290,262,791
Supplemental disclosure of cash flow information
Cash payments for:
Interest
$ 724,911 $ 211,544 $ 1,548,757 $ 783,918
Income taxes
$ 1,164,862 $ 703,501 $ 3,618,577 $ 2,517,452

###

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, Senior Vice President and Chief Financial Officer
410-641-1700, taylorbank.com

SOURCE: Calvin B. Taylor Bankshares, Inc.



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