EXHIBIT 99.1
Two River Bancorp Reports Record 2018 First Quarter Financial Results Highlighted by a 48.5% Increase in Net Income and EPS of $0.31
Company Declares Quarterly Cash Dividend of $0.045 per share
TINTON FALLS, N.J., April 19, 2018 (GLOBE NEWSWIRE) -- Two River Bancorp (Nasdaq:TRCB) (the "Company"), the parent company of Two River Community Bank (the "Bank"), today reported financial results for the first quarter ended March 31, 2018, highlighted by record first quarter net income and earnings per diluted share driven by 10.1% annualized loan growth and continued solid asset quality.
2018 First Quarter Financial Highlights
(comparisons to respective prior year’s period)
- Net income increased 48.5% to $2.68 million
- Earnings per diluted share (EPS) increased 47.6% to $0.31
- Return on average assets of 1.04%, up from 0.76%
- Return on average equity of 10.08%, up from 7.18%
- Net interest margin improved 18 basis points to 3.63%
- Net interest income increased 15.3% to $8.80 million
- Non-interest income increased 16.4% to $1.31 million
(Totals at March 31, 2018; comparisons to December 31, 2017)
- Total loans were $872.3 million, an increase of $21.5 million, or 10.1% annualized
- Total deposits were $870.9 million, an increase of $9.3 million, or 4.3% annualized
- Total assets increased to a record $1.042 billion, compared to $1.040 billion
- Tangible book value per share(1) increased to $10.66, compared to $10.44
Management Commentary
William D. Moss, President and CEO, stated, “We achieved record bottom line results and solid improvement in all key performance metrics during the first quarter. Total loan growth increased by over 10% annualized, despite the sale of a $5.0 million pool of portfolio residential adjustable rate mortgages. The growth in our commercial loan sector originated from a wide range of office, industrial, and residential lending sources without any significant product concentration. On an annualized basis, C&I and construction lending grew over 20% in the first quarter, driven by local relationships and subsequent referrals in our markets. The first quarter volume of loan closings and sizable pipeline will continue to support our performance for the balance of the year.”
Dividend Information
On April 18, 2018, the Company's Board of Directors declared a regular quarterly cash dividend of $0.045 per share, payable May 30, 2018 to shareholders of record as of May 11, 2018, which marks the 21st consecutive quarterly cash dividend paid by the Company to its shareholders.
(1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.
Key Quarterly Performance Metrics
| | 1st Qtr.
| 4th Qtr.
| 3rd Qtr. | 2nd Qtr. | 1st Qtr. |
2018
| 2017
| 2017
| 2017
| 2017
|
| Net Income (in thousands) | $ | 2,676 | | $ | 335 | | $ | 2,237 | | $ | 2,128 | | $ | 1,802 | |
| Earnings per Common Share – Diluted | $ | 0.31 | | $ | 0.04 | | $ | 0.26 | | $ | 0.25 | | $ | 0.21 | |
| Return on Average Assets | | 1.04 | % | | 0.13 | % | | 0.89 | % | | 0.87 | % | | 0.76 | % |
| Return on Average Tangible Assets(1) | | 1.06 | % | | 0.13 | % | | 0.91 | % | | 0.88 | % | | 0.77 | % |
| Return on Average Equity | | 10.08 | % | | 1.24 | % | | 8.39 | % | | 8.26 | % | | 7.18 | % |
| Return on Average Tangible Equity(1) | | 12.12 | % | | 1.49 | % | | 10.13 | % | | 10.01 | % | | 8.74 | % |
| Net Interest Margin | | 3.63 | % | | 3.56 | % | | 3.62 | % | | 3.49 | % | | 3.45 | % |
| Non-Performing Assets to Total Assets | | 0.19 | % | | 0.20 | % | | 0.23 | % | | 0.32 | % | | 0.18 | % |
| Allowance as a % of Loans | | 1.26 | % | | 1.25 | % | | 1.25 | % | | 1.25 | % | | 1.25 | % |
(1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.
Loan Composition
The components of the Company’s loan portfolio at March 31, 2018 and December 31, 2017 are as follows:
| | | |
| | | (In Thousands) |
| | | March 31,
2018
| | December 31,
2017
|
| Commercial and industrial | | $ | 106,758 | | | $ | 101,371 | |
| Real estate – construction | | | 124,828 | | | | 118,094 | |
| Real estate – commercial | | | 545,728 | | | | 537,733 | |
| Real estate – residential | | | 65,035 | | | | 64,238 | |
| Consumer | | | 30,748 | | | | 30,203 | |
| Unearned fees | | | (770 | ) | | | (765 | ) |
| | | | 872,327 | | | | 850,874 | |
| Allowance for loan losses | | | (10,962 | ) | | | (10,668 | ) |
| Net Loans | | $ | 861,365 | | | $ | 840,206 | |
Deposit Composition
The components of the Company’s deposits at March 31, 2018 and December 31, 2017 are as follows:
| | |
| | | (In Thousands) |
| | | March 31,
2018 | | | December 31,
2017 | |
| Non-interest bearing | | $ | 158,775 | | | $ | 167,297 | |
| NOW accounts | | | 217,083 | | | | 232,673 | |
| Savings deposits | | | 257,711 | | | | 242,448 | |
| Money market deposits | | | 56,367 | | | | 59,818 | |
| Listed service CD’s | | | 45,688 | | | | 44,436 | |
| Time deposits / IRA | | | 82,230 | | | | 74,183 | |
| Wholesale deposits | | | 53,050 | | | | 40,702 | |
| Total Deposits | | $ | 870,904 | | | $ | 861,557 | |
2018 First Quarter Financial Review
Net Income
Net income for the three months ended March 31, 2018 was $2.68 million, or $0.31 per diluted common share, compared to $1.80 million, or $0.21 per diluted common share, for the same period last year, an increase of 48.5%. The increase was due primarily to higher net interest income and non-interest income, coupled with a $90,000 tax benefit related to the accounting treatment of equity-based compensation, along with a lower corporate tax rate.
Net Interest Income
Net interest income for the quarter ended March 31, 2018 was $8.80 million, an increase of 15.3% compared to $7.63 million in the corresponding prior year period. This was largely due to an increase of $87.9 million, or 9.8%, in average interest earning assets, primarily driven from growth in the Company’s loan portfolio.
Net Interest Margin
The Company reported a net interest margin of 3.63% for the first quarter of 2018, compared to the 3.56% reported in the fourth quarter of 2017 and 3.45% reported in the first quarter of 2017. The net interest margin improvement of 7 basis points from the fourth quarter of 2017 was primarily the result of higher yielding interest-earning assets.
Non-Interest Income
Non-interest income for the quarter ended March 31, 2018 totaled $1.31 million, an increase of $185,000, or 16.4%, compared to the same period in 2017. This was largely the result of a $214,000, or 182.9%, increase in gains on the sale of SBA loans. For the first quarter of 2018, mortgage banking revenue was $338,000, which included a $100,000 gain from the sale of a pool of residential adjustable rate mortgages, compared to $426,000 in the corresponding period in 2017, which included a $91,000 gain from the sale of a pool of residential adjustable rate mortgages. The Company experienced a slowdown in residential lending activity partially due to a prolonged winter that led to a late start to the spring housing market, coupled with tighter competition for purchase transactions.
Non-Interest Expense
Non-interest expense for the quarter ended March 31, 2018 totaled $6.23 million, an increase of $450,000, or 7.8%, compared to the same period in 2017, mainly due to higher salaries and benefits resulting from annual merit increases, along with new hires within the lending and deposit teams.
Provision / Allowance for Loan Losses
During the quarter, the Company reported a $400,000 provision for loan losses, compared to $225,000 in the prior year period. The increase was largely due to the strong loan growth during the period. The Company had $106,000 in net loan charge-offs during the quarter, compared to $223,000 of net loan charge offs in the same period last year.
As of March 31, 2018, the Company's allowance for loan losses was $10.96 million, compared to $10.67 million at December 31, 2017. The loss allowance as a percentage of total loans was 1.26% at March 31, 2018, compared to 1.25% at December 31, 2017.
Financial Condition / Balance Sheet
At March 31, 2018, the Company maintained capital ratios that were in excess of regulatory standards for well-capitalized institutions. The Company's Tier 1 capital to average assets ratio was 8.88%, common equity Tier 1 to risk weighted assets ratio was 9.73%, Tier 1 capital to risk weighted assets ratio was 9.73%, and total capital to risk weighted assets ratio was 11.96%.
Total assets as of March 31, 2018 were $1.042 billion, compared to $1.040 billion at December 31, 2017 and $967.1 million at March 31, 2017.
Total loans as of March 31, 2018 grew to $872.3 million, compared to $850.9 million reported at December 31, 2017 and $762.7 million at March 31, 2017. This loan growth was funded primarily by a combination of deposit growth and excess cash on hand.
Total deposits as of March 31, 2018 grew to $870.9 million, compared to $861.6 million as of December 31, 2017 and $799.7 million at March 31, 2017. Core checking deposits at March 31, 2018 were $375.9 million, compared to $400.0 million at December 31, 2017 and $344.5 million at March 31, 2017. The Company continues to focus on building core checking account deposit relationships, which can vary from quarter to quarter due to seasonality in municipal relationships.
Asset Quality
The Company's non-performing assets at March 31, 2018 were $1.97 million, compared to $2.07 million at December 31, 2017 and $1.77 million at March 31, 2017. Non-performing assets to total assets at March 31, 2018 were 0.19%, compared to 0.20% at December 31, 2017 and 0.18% at March 31, 2017.
Non-accrual loans were $1.97 million at March 31, 2018, compared to $2.07 million at December 31, 2017 and $1.77 million at March 31, 2017. There was no OREO at both March 31, 2018 and December 31, 2017, compared to $259,000 at March 31, 2017.
Troubled debt restructured loan balances amounted to $6.84 million at March 31, 2018, with all but $878,000 performing. This compared to $7.05 million at December 31, 2017 and $8.16 million at March 31, 2017.
About the Company
Two River Bancorp is the holding company for Two River Community Bank, which is headquartered in Tinton Falls, New Jersey. Two River Community Bank operates 14 branches along with two loan production offices throughout Monmouth, Middlesex, Union, and Ocean Counties, New Jersey. More information about Two River Community Bank and Two River Bancorp is available at www.tworiverbank.com.
The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's current views and expectations about new and existing programs and products, relationships, opportunities, technology and market conditions. These statements may be identified by such forward-looking terminology as "continue," "expect," "look," "believe," "anticipate," "may," "will," "should," "projects," "strategy," or similar statements. Actual results may differ materially from such forward-looking statements, and no reliance should be placed on any forward-looking statement. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, unanticipated changes in the financial markets and the direction of interest rates; volatility in earnings due to certain financial assets and liabilities held at fair value; competition levels; loan and investment prepayments differing from our assumptions; insufficient allowance for credit losses; a higher level of loan charge-offs and delinquencies than anticipated; material adverse changes in our operations or earnings; a decline in the economy in our market areas; changes in relationships with major customers; changes in effective income tax rates; higher or lower cash flow levels than anticipated; inability to hire or retain qualified employees; a decline in the levels of deposits or loss of alternate funding sources; a decrease in loan origination volume or an inability to close loans currently in the pipeline; changes in laws and regulations; adoption, interpretation and implementation of accounting pronouncements; operational risks, including the risk of fraud by employees, customers or outsiders; and the inability to successfully implement or expand new lines of business or new products and services. For a list of other factors which would affect our results, see the Company's filings with the Securities and Exchange Commission, including those risk factors identified in the "Risk Factor" section and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2017. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company assumes no obligation for updating any such forward-looking statements at any time, except as required by law.
Investor Contact:
Adam Prior, Senior Vice President
The Equity Group Inc.
Phone: (212) 836-9606
Email: aprior@equityny.com
Media Contact:
Adam Cadmus, Marketing Director
Two River Community Bank
Phone: (732) 982-2167
Email: acadmus@tworiverbank.com
TWO RIVER BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended March 31, 2018 and 2017
(in thousands, except per share data)
| | | Three Months Ended
March 31, | |
| | | 2018 | | | 2017 | |
| Interest Income: | | | | | | |
| Loans, including fees | | $ | 9,821 | | | $ | 8,403 | |
| Securities: | | | | | | |
| Taxable | | | 297 | | | | 233 | |
| Tax-exempt | | | 282 | | | | 285 | |
| Interest-bearing deposits | | | 67 | | | | 72 | |
| Total Interest Income | | | 10,467 | | | | 8,993 | |
| Interest Expense: | | | | | | |
| Deposits | | | 1,358 | | | | 1,038 | |
| Securities sold under agreements to repurchase | | | 14 | | | | 15 | |
| Federal Home Loan Bank (“FHLB”) and other borrowings | | | 130 | | | | 145 | |
| Subordinated debt | | | 165 | | | | 165 | |
| Total Interest Expense | | | 1,667 | | | | 1,363 | |
| Net Interest Income | | | 8,800 | | | | 7,630 | |
| Provision for Loan Losses | | | 400 | | | | 225 | |
| Net Interest Income after Provision for Loan Losses | | | 8,400 | | | | 7,405 | |
| Non-Interest Income: | | | | | | |
| Service fees on deposit accounts | | | 238 | | | | 150 | |
| Mortgage banking | | | 338 | | | | 426 | |
| Other loan fees | | | 111 | | | | 92 | |
| Earnings from investment in bank owned life insurance | | | 130 | | | | 136 | |
| Gain on sale of SBA loans | | | 331 | | | | 117 | |
| Other income | | | 162 | | | | 204 | |
| Total Non-Interest Income | | | 1,310 | | | | 1,125 | |
| Non-Interest Expenses: | | | | | | |
| Salaries and employee benefits | | | 3,885 | | | | 3,453 | |
| Occupancy and equipment | | | 1,090 | | | | 1,054 | |
| Professional | | | 340 | | | | 341 | |
| Insurance | | | 57 | | | | 48 | |
| FDIC insurance and assessments | | | 123 | | | | 123 | |
| Advertising | | | 60 | | | | 110 | |
| Data processing | | | 152 | | | | 130 | |
| Outside service fees | | | 81 | | | | 103 | |
| OREO expenses, impairment and sales, net | | | (1 | ) | | | (3 | ) |
| Loan workout expenses | | | 51 | | | | 27 | |
| Other operating | | | 389 | | | | 391 | |
| Total Non-Interest Expenses | | | 6,227 | | | | 5,777 | |
| Income before Income Taxes | | | 3,483 | | | | 2,753 | |
| Income Tax Expense | | | 807 | | | | 951 | |
| Net Income | | $ | 2,676 | | | $ | 1,802 | |
| Earnings Per Common Share: | | | | | | |
| Basic | | $ | 0.32 | | | $ | 0.22 | |
| Diluted | | $ | 0.31 | | | $ | 0.21 | |
| Weighted average common shares outstanding: | | | | | | |
| Basic | | | 8,447 | | | | 8,341 | |
| Diluted | | | 8,675 | | | | 8,618 | |
TWO RIVER BANCORP
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except share data)
| | March 31, | | December 31, | |
| | 2018 | | 2017 | |
| ASSETS | | | | | | |
| Cash and due from banks | $ | 13,452 | | $ | 29,575 | |
| Interest-bearing deposits in bank | | 15,143 | | | 18,644 | |
| Cash and cash equivalents | | 28,595 | | | 48,219 | |
| | | | | | | |
| Securities available for sale | | 32,835 | | | 31,132 | |
| Securities held to maturity | | 57,819 | | | 58,002 | |
| Restricted investments, at cost | | 5,597 | | | 5,430 | |
| Loans held for sale | | 1,834 | | | 2,581 | |
| Loans | | 872,327 | | | 850,874 | |
| Allowance for loan losses | | (10,962 | ) | | (10,668 | ) |
| Net loans | | 861,365 | | | 840,206 | |
| | | | | | | |
| Bank owned life insurance | | 21,703 | | | 21,573 | |
| Premises and equipment, net | | 6,157 | | | 6,239 | |
| Accrued interest receivable | | 2,492 | | | 2,554 | |
| Goodwill | | 18,109 | | | 18,109 | |
| Other assets | | 5,721 | | | 5,753 | |
| | | | | | | |
| Total Assets | $ | 1,042,227 | | $ | 1,039,798 | |
| | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
| Liabilities: | | | | | | |
| Deposits: | | | | | | |
| Non-interest-bearing | $ | 158,775 | | $ | 167,297 | |
| Interest-bearing | | 712,129 | | | 694,260 | |
| Total Deposits | | 870,904 | | | 861,557 | |
| | | | | | | |
| Securities sold under agreements to repurchase | | 18,472 | | | 27,120 | |
| FHLB and other borrowings | | 24,500 | | | 25,800 | |
| Subordinated debt | | 9,896 | | | 9,888 | |
| Accrued interest payable | | 69 | | | 70 | |
| Other liabilities | | 9,406 | | | 8,792 | |
| | | | | | | |
| Total Liabilities | | 933,247 | | | 933,227 | |
| | | | | | | |
| Shareholders’ Equity | | | | | | |
| Preferred stock, no par value; 6,500,000 shares authorized, no shares issued and outstanding | | - | | | - | |
| Common stock, no par value; 25,000,000 shares authorized; | | | | | | |
| Issued – 8,836,726 and 8,782,124 at March 31, 2018 and December 31, 2017, respectively | | | | | | |
| Outstanding – 8,524,632 and 8,470,030 at March 31, 2018 and December 31, 2017, respectively | | 79,932 | | | 79,678 | |
| Retained earnings | | 31,907 | | | 29,593 | |
| Treasury stock, at cost; 312,094 shares at March 31, 2018 and December 31, 2017, respectively | | (2,396 | ) | | (2,396 | ) |
| Accumulated other comprehensive loss | | (463 | ) | | (304 | ) |
| Total Shareholders' Equity | | 108,980 | | | 106,571 | |
| | | | | | | |
| Total Liabilities and Shareholders’ Equity | $ | 1,042,227 | | $ | 1,039,798 | |
TWO RIVER BANCORP
Selected Consolidated Financial Data (Unaudited)
Selected Consolidated Earnings Data
(in thousands, except per share data)
| | Three Months Ended |
| | March 31, | | December 31, | | March 31, |
| Selected Consolidated Earnings Data: | 2018 | | 2017 | | 2017 |
| Total Interest Income | $ | 10,467 | | $ | 10,074 | | $ | 8,993 |
| Total Interest Expense | | 1,667 | | | 1,545 | | | 1,363 |
| Net Interest Income | | 8,800 | | | 8,529 | | | 7,630 |
| Provision for Loan Losses | | 400 | | | 675 | | | 225 |
| Net Interest Income after Provision for Loan Losses | | 8,400 | | | 7,854 | | | 7,405 |
| Other Non-Interest Income | | 1,310 | | | 1,343 | | | 1,125 |
| Other Non-Interest Expenses | | 6,227 | | | 5,919 | | | 5,777 |
| Income before Income Taxes | | 3,483 | | | 3,278 | | | 2,753 |
| Income Tax Expense | | 807 | | | 2,943 | | | 951 |
| Net Income | $ | 2,676 | | $ | 335 | | $ | 1,802 |
| | | | | | |
| Per Common Share Data: | | | | | |
| Basic Earnings | $ | 0.32 | | $ | 0.04 | | $ | 0.22 |
| Diluted Earnings | $ | 0.31 | | $ | 0.04 | | $ | 0.21 |
| Book Value | $ | 12.78 | | $ | 12.58 | | $ | 12.21 |
| Tangible Book Value(1) | $ | 10.66 | | $ | 10.44 | | $ | 10.05 |
| Average Common Shares Outstanding (in thousands): | | | | | |
| Basic | | 8,447 | | | 8,420 | | | 8,341 |
| Diluted | | 8,675 | | | 8,673 | | | 8,618 |
(1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.
Selected Period End Balances
(in thousands)
| | March 31, | | Dec. 31, | | Sept. 30, | | June 30, | | March 31, | |
| | 2018 | | 2017 | | 2017 | | 2017 | | 2017 | |
| Total Assets | $ | 1,042,227 | | $ | 1,039,798 | | $ | 1,000,245 | | $ | 983,099 | | $ | 967,073 | |
| Investment Securities and Restricted Stock | | 96,251 | | | 94,564 | | | 92,641 | | | 92,634 | | | 94,850 | |
| Total Loans | | 872,327 | | | 850,874 | | | 816,078 | | | 794,908 | | | 762,687 | |
| Allowance for Loan Losses | | (10,962 | ) | | (10,668 | ) | | (10,223 | ) | | (9,953 | ) | | (9,567 | ) |
| Goodwill and Other Intangible Assets | | 18,109 | | | 18,109 | | | 18,109 | | | 18,109 | | | 18,109 | |
| Total Deposits | | 870,904 | | | 861,557 | | | 821,872 | | | 810,725 | | | 799,705 | |
| Repurchase Agreements | | 18,472 | | | 27,120 | | | 22,576 | | | 25,823 | | | 21,437 | |
| FHLB and Other Borrowings | | 24,500 | | | 25,800 | | | 30,300 | | | 24,300 | | | 24,300 | |
| Subordinated Debt | | 9,896 | | | 9,888 | | | 9,879 | | | 9,871 | | | 9,863 | |
| Shareholders' Equity | | 108,980 | | | 106,571 | | | 106,567 | | | 104,524 | | | 102,406 | |
| | | | | | | | | | | |
| Asset Quality Data (by Quarter) | | | | | | | | | | |
| (dollars in thousands) | March 31, | | Dec. 31, | | Sept. 30, | | June 30, | | March 31, | |
| | 2018 | | 2017 | | 2017 | | 2017 | | 2017 | |
| Nonaccrual Loans | $ | 1,972 | | $ | 2,070 | | $ | 2,345 | | $ | 2,946 | | $ | 1,511 | |
| OREO | | - | | | - | | | - | | | 233 | | | 259 | |
| Total Non-Performing Assets | | 1,972 | | | 2,070 | | | 2,345 | | | 3,179 | | | 1,770 | |
| | | | | | | | | | | |
| Troubled Debt Restructured Loans: | | | | | | | | | | |
| Performing | | 5,965 | | | 6,053 | | | 6,925 | | | 6,990 | | | 7,754 | |
| Non-Performing | | 878 | | | 994 | | | 1,129 | | | 960 | | | 405 | |
| | | | | | | | | | | |
| Non-Performing Loans to Total Loans | | 0.23 | % | | 0.24 | % | | 0.29 | % | | 0.37 | % | | 0.20 | % |
| Non-Performing Assets to Total Assets | | 0.19 | % | | 0.20 | % | | 0.23 | % | | 0.32 | % | | 0.18 | % |
| Allowance as a % of Loans | | 1.26 | % | | 1.25 | % | | 1.25 | % | | 1.25 | % | | 1.25 | % |
| | | | | | | | | | | |
| Capital Ratios | | | | | |
| | | March 31, 2018 | | December 31, 2017 | |
| | CET 1 Capital
to Risk Weighted
Assets Ratio |
| Tier 1
Capital
to
Average
Assets
Ratio |
| Tier 1
Capital
to Risk
Weighted
Assets Ratio |
| Total
Capital
to Risk Weighted
Assets
Ratio | | CET 1 Capital
to Risk Weighted
Assets Ratio |
| Tier 1
Capital
to
Average Assets
Ratio |
| Tier 1
Capital
to Risk Weighted
Assets Ratio | | Total
Capital to
Risk Weighted
Assets
Ratio | |
| | |
| | |
| Two River Bancorp | 9.73 | % | 8.88 | % | 9.73 | % | 11.96 | % | 9.68 | % | 8.85 | % | 9.68 | % | 11.93 | % |
| Two River Community Bank | 10.66 | % | 9.74 | % | 10.66 | % | 11.83 | % | 10.66 | % | 9.76 | % | 10.66 | % | 11.82 | % |
| "Well capitalized" institution (under prompt corrective action regulations)* | 6.50 | % | 5.00 | % | 8.00 | % | 10.00 | % | 6.50 | % | 5.00 | % | 8.00 | % | 10.00 | % |
*Applies to Bank only. For the Company to be “well capitalized,” the Tier 1 Capital to Risk Weighted Assets has to be at least 6.00%. |
Consolidated Average Balance Sheets & Yields
With Resultant Interest and Average Rates
| | Three Months Ended | | Three Months Ended |
| (dollars in thousands) | March 31, 2018 | | March 31, 2017 |
| | | Interest /
Income
Expense | | | | Interest /
Income
Expense | |
| ASSETS | Average
Balance | | | Average
Yield /
Rate | | Average
Balance | | | Average
Yield /
Rate |
| Interest-Earning Assets: | | | | | |
| Interest-bearing deposits in banks | $ | 18,135 | | $ | 67 | | 1.50 | % | | $ | 38,263 | | $ | 72 | | 0.76 | % |
| Investment securities | 97,625 | | 579 | | 2.37 | % | | 96,030 | | 518 | | 2.16 | % |
| Loans, net of unearned fees(1) (2) | 868,544 | | 9,821 | | 4.59 | % | | 762,150 | | 8,403 | | 4.47 | % |
| | | | | | | | | | | | | | |
| Total Interest-Earning Assets | 984,304 | | 10,467 | | 4.31 | % | | 896,443 | | 8,993 | | 4.07 | % |
| | | | | | | | | | | | | | |
| Non-Interest-Earning Assets: | | | | | | | | | | | | | |
| Allowance for loan losses | (10,840 | ) | | | | | | (9,645 | ) | | | | |
| All other assets | 72,889 | | | | | | | 75,551 | | | | | |
| | | | | | | | | | | | | | |
| Total Assets | $ | 1,046,353 | | | | | | | | $ | 962,349 | | | | | | |
| | | | | | | | | | | | | | |
| LIABILITIES & SHAREHOLDERS' EQUITY | | | | | | | | | | | | | |
| Interest-Bearing Liabilities: | | | | | | | | | | | | | |
| NOW deposits | $ | 236,674 | | 310 | | 0.53 | % | | $ | 191,903 | | 212 | | 0.45 | % |
| Savings deposits | 248,488 | | 354 | | 0.58 | % | | 256,499 | | 327 | | 0.52 | % |
| Money market deposits | 58,348 | | 25 | | 0.17 | % | | 61,668 | | 26 | | 0.17 | % |
| Time deposits | 168,327 | | 669 | | 1.61 | % | | 136,474 | | 473 | | 1.41 | % |
| Securities sold under agreements to repurchase | 19,636 | | 14 | | 0.29 | % | | 19,376 | | 15 | | 0.31 | % |
| FHLB and other borrowings | 28,217 | | 130 | | 1.87 | % | | 24,447 | | 145 | | 2.41 | % |
| Subordinated debt | 9,893 | | 165 | | 6.67 | % | | 9,860 | | 165 | | 6.69 | % |
| | | | | | | | | | | | | | |
| Total Interest-Bearing Liabilities | 769,583 | | 1,667 | | 0.88 | % | | 700,227 | | 1,363 | | 0.79 | % |
| | | | | | | | | | | | | | |
| Non-Interest-Bearing Liabilities: | | | | | | | | | | | | | |
| Demand deposits | 160,060 | | | | | | | 153,185 | | | | | |
| Other liabilities | 9,033 | | | | | | | 7,185 | | | | | |
| | | | | | | | | | | | | | |
| Total Non-Interest-Bearing Liabilities | 169,093 | | | | | | | 160,370 | | | | | |
| | | | | | | | | | | | | | |
| Shareholders’ Equity | 107,677 | | | | | | | 101,752 | | | | | |
| | | | | | | | | | | | | | |
| Total Liabilities and Shareholders’ Equity | $ | 1,046,353 | | | | | | | | $ | 962,349 | | | | | | |
| | | | | | | | | | | | | | |
| NET INTEREST INCOME | | | $ | 8,800 | | | | | | | $ | 7,630 | | | |
| | | | | | | | | | | | | | |
| NET INTEREST SPREAD(3) | | | | | 3.43 | % | | | | | | 3.28 | % |
| | | | | | | | | | | | | | |
| NET INTEREST MARGIN(4) | | | | | 3.63 | % | | | | | | 3.45 | % |
(1) Included in interest income on loans are loan fees.
(2) Includes non-performing loans.
(3) The interest rate spread is the difference between the weighted average yield on average interest-earning and the weighted average cost of average interest-bearing liabilities.
(4) The interest rate margin is calculated by dividing annualized net interest income by average interest-earning assets.
Reconciliation of Non-GAAP Financial Measures
The press release contains certain financial information determined by methods other than in accordance with generally accepted accounting policies in the United States (GAAP). These non-GAAP financial measures are "tangible book value per common share," "return on average tangible assets," and "return on average tangible equity." This non-GAAP disclosure has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Our management uses these non-GAAP measures in its analysis of our performance because it believes these measures are material and will be used as a measure of our performance by investors.
(in thousands, except per share data)
| | |
| | As of and for the Three Months Ended | |
| | March 31, | | Dec. 31, | | Sept. 30, | | June 30, | | March 31, | | |
| | 2018 | | 2017 | | 2017 | | 2017 | | 2017 | | |
| Total shareholders' equity | $ | 108,980 | | $ | 106,571 | | $ | 106,567 | | $ | 104,524 | | $ | 102,406 | | |
| Less: goodwill and other tangibles | | (18,109 | ) | | (18,109 | ) | | (18,109 | ) | | (18,109 | ) | | (18,109 | ) | |
| Tangible common shareholders’ equity | $ | 90,871 | | $ | 88,462 | | $ | 88,458 | | $ | 86,415 | | $ | 84,297 | | |
| | | | | | | | | | | | | | | | | |
| Common shares outstanding | | 8,525 | | | 8,470 | | | 8,454 | | | 8,429 | | | 8,389 | | |
| Book value per common share | $ | 12.78 | | $ | 12.58 | | $ | 12.60 | | $ | 12.40 | | $ | 12.21 | | |
| | | | | | | | | | | | | | | | | |
| Book value per common share | $ | 12.78 | | $ | 12.58 | | $ | 12.60 | | $ | 12.40 | | $ | 12.21 | | |
| Effect of intangible assets | | (2.12 | ) | | (2.14 | ) | | (2.14 | ) | | (2.15 | ) | | (2.16 | ) | |
| Tangible book value per common share | $ | 10.66 | | $ | 10.44 | | $ | 10.46 | | $ | 10.25 | | $ | 10.05 | | |
| | | | | | | | | | | | |
| Return on average assets | 1.04 | % | 0.13 | % | 0.89 | % | 0.87 | % | 0.76 | % | |
| Effect of average intangible assets | 0.02 | % | - | | 0.02 | % | 0.01 | % | 0.01 | % | |
| Return on average tangible assets | 1.06 | % | 0.13 | % | 0.91 | % | 0.88 | % | 0.77 | % | |
| | | | | | | | | | | | |
| Return on average equity | 10.08 | % | 1.24 | % | 8.39 | % | 8.26 | % | 7.18 | % | |
| Effect of average intangible assets | 2.04 | % | 0.25 | % | 1.74 | % | 1.75 | % | 1.56 | % | |
| Return on average tangible equity | 12.12 | % | 1.49 | % | 10.13 | % | 10.01 | % | 8.74 | % | |
