Salisbury Bancorp : 2020 Annual Meeting Presentation

Forward Looking Statements

This presentation contains certain statements that may be considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results, performance or achievements of Salisbury may differ materially from those discussed in these forward-looking statements. We refer you to the documents Salisbury files from time to time with the Securities and Exchange Commission, especially the Company's last filed Form 10-K and Form 10-Q. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward- looking statements. You should carefully review all of these factors, and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this presentation, and Salisbury assumes no obligation to update forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Unaudited data

All of the financial data presented herein is unaudited.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

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Welcome

• Richard J. Cantele, Jr., President and CEO Salisbury Bancorp, Inc.

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In Appreciation

Michael A. Varet

• SAL Director since 1998
• Presiding Director 2007-2010
• Board Chair 2010-2019

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Board Retirement

Polly Diane Hoe

• SAL Director since 2014
• Former Director of Riverside Bank
• Recent Committees:
• • Audit
  • HR Compensation
  • Nominating and Governance
  • Trust

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Board Retirement

Michael D. Gordon

• SAL Director since 2014
• Founding Member and Director of Riverside Bank
• Recent Committees:
• • ALCO Investment
  • Loan
  • Trust

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New Board Member

Neila B. Radin

• Joined the Board November of 2019
• Former Managing Director and Associate General Counsel of JPMorgan Chase & Co. (retired)
• Recent Committees:
• • Audit
  • Executive
  • HR Compensation
  • Nominating and Governance

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New Board Member

Grace E. Schalkwyk

• Joined the Board November of 2019
• Advisor to Fintech and other technology companies
• Recent Committees:
• • ALCO Investment
  • Audit
  • Executive

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Business of the Meeting

1. Election of three (3) Directors for a three (3) year term; election of two (2) Directors for a two (2) year term; and election of one (1) Director for a one (1) year term to join those continuing Directors whose terms do not expire at this meeting
2. Ratification of the Appointment of Independent Auditors
3. Non-bindingadvisory vote on the compensation of the Named Executive Officers
4. Other Business

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1. Election of Directors

For terms expiring in 2023

• George E. Banta
• Richard J. Cantele, Jr.
• Grace E. Schalkwyk

For terms expiring in 2022

• Nancy F. Humphreys
• Neila B. Radin

For terms expiring in 2021

• Charles M. Andola

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2. Ratification of the Appointment of Independent Auditors

• Baker Newman & Noyes, P.A., LLC

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3. Non-binding Advisory Vote on the Compensation of the Named Executive Officers

• To approve, on a non-binding advisory basis, the compensation of the Named Executive Officers.

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Polls Closed

• Tabulation of Votes

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Questions

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Outline

• COVID -19 Update
• Company Profile
• 2019 and Q1 2020 Results
• 2020 Initiatives

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Company Response to COVID - 19

• Appointed an internal task force comprised of the Company's management to address both operational and financial risks posed by COVID-19
• Modified branch operations
• Branch lobbies available, but on an appointment only basis
• Primarily drive thru transactions
• Increased emphasis on digital banking platforms
• Implemented physical separation of critical operational workforce
• Expanded paid time off benefits for employees
• Implemented work from home strategy
• The majority of the Company's non-branch and non-critical operational employees are working remotely
• Instituted daily calls with key staff
• Adopted Illness/Exposure and self-quarantine procedures
• Implemented enhanced cleaning protocols
• Redeployed staff to critical customer service operations to expedite payment deferral requests and Paycheck Protection Program (PPP) lending efforts
• Initiated re-entry planning

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COVID - 19 Financial Impact

Loan Payment

Deferrals

Fees and

Allowance for Loan

Losses

Liquidity & Capital

Paycheck

Protection Program

• As of May 5, 2020, 144 residential and consumer borrowers ($36 million of loan balances) and 263 commercial borrowers ($157 million of loan balances) have requested payment deferrals up to three months.
• Approximately $30 thousand in overdraft, ATM and other deposit fees were waived in March 2020.1
• The allowance for loan losses increased by $1.7 million in 1Q 2020 primarily due to COVID-19.
• Salisbury has not experienced significant deposit outflows or draw downs on credit lines.
• The Bank remains well-capitalized with a Tier 1 Capital ratio of 11.79% as of March 31, 2020.
• As of May 5, 2020 Salisbury processed 779 customer loan applications for nearly $98 million.

1 Salisbury will continue to waive these fees, which approximate $350 thousand per quarter, for 2Q 2020.

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Annual Employee Award Winners

Each year we seek to recognize some of our truly exceptional employees with awards. Each award recipient has contributed to our Company's success in ways that extend far beyond expectation.

The 2019 President's Award went to the entire bank

Leadership Development Team and Executive Sponsors pictured above

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Annual Employee Award Winners

Employee of the Year Rookie of the Year	Rookie of the Year	Volunteer of the Year

Cindy Bradley	Kassidy Baker	Margaret Ham	Amanda Goewey
Senior Vice President	Customer Support	Customer Associate	Vice President
Loan Administration	Associate		Berkshire Regional
Manager			Branch Manager

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2019 and 2020 Q1 results

Deposits and Loans

$1,200			Deposits		$1,200
	$ Millions
$1,000					$966
			$927	$920	$1,000
	$782	$815
$800				$800
$600					$600
$400					$400
$200					$200
$0					$0
	2016	2017	2018	2019	1Q 2020

$ Millions	Loan Portfolio, Net
		$909	$927	$949
$763	$802
2016	2017	2018	2019	1Q 2020
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2019 and 2020 Q1 results

Tier 1 Capital

14%
12%	12.1%	11.6%	11.8%	11.8%
		11.2%

10%

8%

6%

4%

2%

0%

2016	2017		2018	2019	1Q 2020
			Bank		Well Capitalized

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2019 and 2020 Q1 results

Trust and Wealth Advisory

		Assets Under Administration	$4,500
$900		$ Millions
$800					$777.5
										$3,750
$700				$648.0
					$639.5
			$610.2
$600									$3,000
		$516.4
$500
$400										$2,250
$300
$200										$1,500
2016	2017	2018	2019	1Q 2020

Gross Revenues

$ Thousands

$4,120

$3,995

$3,700

$3,477

$3,338

2016	2017	2018	2019	1Q 2020
				Annualized

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2019 and 2020 Q1 results

4.5%

Net Interest Margin

Efficiency Ratio

75%

4.0%	3.69%
	3.58%
3.5%				3.35%	3.27%	3.35%
3.0%
2.5%
2.0%
2016	2017	2018	2019		1Q 2020
		Return on Average Equity
12%					10.22%
10%				8.84%
8%	7.16%					7.07%
	6.42%
6%
4%
2016	2017	2018	2019		1Q 2020

70%			69.1%
	66.8%
66.7%
65%				64.1%
				61.4%
60%
55%
50%
2016	2017	2018	2019	1Q 2020

Return on Average Assets

1.25%

1.00%				1.00%
			0.83%
0.75%	0.72%				0.73%
	0.63%
0.50%
0.25%
2016	2017	2018	2019	1Q 2020
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2019 and 2020 Q1 results

					Other Real Estate Owned
								2.0%
$1,800						1,810		1.5%
$1,300								1.0%
$800		719				0.5%
$300							314		0.0%
	2017		2018	2019	1Q 2020
					NCOs / Average Loans
0.25%		0.19%					1.15%
0.20%
0.15%								1.05%
0.10%								0.95%
0.05%					0.05%	0.05%	0.04%	0.85%
0.00%									0.75%
		2016		2017	2018	2019	1Q20

NPAs / Assets

1.34%

0.74% 0.74%

0.35% 0.28%

2016

2017

2018

2019

1Q20

Loan Loss Reserves / Gross Loans

1.11%

0.95%

0.84% 0.85%

0.80%

2016

2017

2018

2019

1Q20

Source: S&P Global and Company SEC filings.

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2019 and 2020 Q1 results

Shareholder Value

Tangible Book Value

$4.50

Earnings Per Share

$40

$35

$34.98 $35.85

$4.00

$3.95

$31.45

$30 $28.90 $29.39

$25

$20

$3.50

$3.00

$2.50

$2.00

$2.43

$3.15

$2.25$3.09

$2.43

$15

$10

$5

$0

2016

2017

2018

2019

1Q 2020

$1.50

$1.00

$0.50

$-

$1.88 $1.67

$0.55	$0.58	$0.72	$0.86	$0.72
2016	2017	2018	2019	1Q 2020
			1Q		Remainder of Year

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2020 Strategic and Tactical Objectives

• Continue to protect employees and customers
• Develop a plan to re-open branches, when appropriate
• Prudently navigate through economic slowdown and COVID-19
• Enhance efficiency to reduce costs
• Deepen penetration of existing markets
• Establish new client relationships

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