TINTON FALLS, N.J., July 25, 2017 (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 second quarter and six months ended June 30, 2017. All share and per share data for all referenced reporting periods have been adjusted for a 5% stock dividend paid on February 28, 2017.
2017 Second Quarter Operating and Financial Highlights
(all comparisons to the same prior year’s quarter unless otherwise noted)
- Net income increased 23.2% to $2.13 million, or $0.25 per diluted share, from $1.73 million, or $0.20 per diluted share. The 2017 quarter included a benefit to income tax expense related to the adoption of ASU 2016-09, Compensation - Stock Compensation, Improvements to Employee Share-Based Payment Accounting, which increased net income by $145,000, or $0.02 per diluted share.
- Non-interest income increased 31.9% to $1.54 million, as a result of a 68.7% increase in mortgage banking revenue, higher gains on the sale of SBA loans and other loan fees.
- Return on average assets (ROAA) improved to 0.87%, compared to 0.78%.
- Return on average equity (ROAE) improved to 8.26%, compared to 7.28%.
- Non-performing assets to total assets were 0.32% at June 30, 2017, an increase from 0.19% at December 31, 2016 and 0.22% at June 30, 2016.
- Tangible book value per share was $10.25 at June 30, 2017, compared to $9.88 at December 31, 2016 and $9.34 at June 30, 2016.
- Total assets at June 30, 2017 were $983.1 million, compared to $940.2 million at December 31, 2016.
- Total loans as of June 30, 2017 were $794.9 million, up 5.6% from $753.1 million at December 31, 2016.
- Total deposits as of June 30, 2017 were $810.7 million, up 4.4% from $776.6 million at December 31, 2016.
Management Commentary
William D. Moss, President and CEO, stated, “The Company reported an excellent quarter highlighted by higher net income, loan and deposit growth, and success in increasing non-interest income. We have grown the loan portfolio by $41.8 million since year-end 2016, and will continue to benefit from a strong pipeline within our core markets of Monmouth, Middlesex, Union and Ocean Counties. The largest component continues to be CRE lending, which is expected to be a principal driver of revenues throughout the remainder of 2017. We are also seeing significant contributions from virtually all aspects of our business resulting in, among other things, additional non-interest income. Our mortgage banking business has experienced accelerating growth, which is evidence that our proactive approach in cultivating a vast network of referral sources and improving the Bank’s brand recognition throughout our densely populated marketplace is working. The Company’s gain on sales of SBA loans increased significantly on both a linked quarter and year-to-date basis, and this trend is expected to continue in the current quarter.”
Mr. Moss concluded, “In keeping with our Strategic Plan, which includes optimizing the profitability of our branch network, the Company will be closing two branches and consolidating them into a new location, which will provide cost efficiency and greater market share potential. We expect to open a new branch in Sea Girt, along the Route 35 corridor in Monmouth County, and will integrate the operations of our Allaire office in Wall Township and our office in Manasquan into this branch in the third quarter of 2017. We anticipate annual pre-tax expense savings of approximately $300,000 beginning in the fourth quarter of 2017.”
Dividend Increased to $0.045 per share
On July 19, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.045 per share, payable on August 29, 2017 to shareholders of record as of the close of business on August 11, 2017. This marks the 18th consecutive quarterly cash dividend and represents a 12.5% increase from the prior quarter, which is in addition to the 5% stock dividend paid in February 2017.
Key Quarterly Performance Metrics
| 2nd Qtr. | 1st Qtr. | 4th Qtr. | 3rd Qtr. | 2nd Qtr. | 6 Mo. Ended | 6 Mo. Ended | |||||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | 6/30/2017 | 6/30/2016 | |||||||||||||||||
| Net Income (in thousands) | $ | 2,128 | $ | 1,802 | $ | 2,567 | $ | 2,644 | $ | 1,727 | $ | 3,930 | $ | 3,420 | |||||||||
| Earnings per Common Share – Diluted | $ | 0.25 | $ | 0.21 | $ | 0.30 | $ | 0.31 | $ | 0.20 | $ | 0.45 | $ | 0.40 | |||||||||
| Return on Average Assets | 0.87 | % | 0.76 | % | 1.08 | % | 1.16 | % | 0.78 | % | 0.81 | % | 0.78 | % | |||||||||
| Return on Average Tangible Assets(1) | 0.88 | % | 0.77 | % | 1.10 | % | 1.19 | % | 0.80 | % | 0.83 | % | 0.80 | % | |||||||||
| Return on Average Equity | 8.26 | % | 7.18 | % | 10.25 | % | 10.81 | % | 7.28 | % | 7.73 | % | 7.26 | % | |||||||||
| Return on Average Tangible Equity(1) | 10.01 | % | 8.74 | % | 12.53 | % | 13.29 | % | 8.98 | % | 9.39 | % | 8.98 | % | |||||||||
| Net Interest Margin | 3.49 | % | 3.45 | % | 3.43 | % | 3.55 | % | 3.57 | % | 3.47 | % | 3.57 | % | |||||||||
| Non-Performing Assets to Total Assets | 0.32 | % | 0.18 | % | 0.19 | % | 0.20 | % | 0.22 | % | 0.32 | % | 0.22 | % | |||||||||
| Allowance as a % of Loans | 1.25 | % | 1.25 | % | 1.27 | % | 1.25 | % | 1.30 | % | 1.25 | % | 1.30 | % | |||||||||
| (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 June 30, 2017 and December 31, 2016 are as follows:
| (in thousands) | ||||||||
| June 30, 2017 | December 31, 2016 | |||||||
| Commercial and industrial | $ | 99,688 | $ | 93,697 | ||||
| Real estate – construction | 112,102 | 111,914 | ||||||
| Real estate – commercial | 496,400 | 460,685 | ||||||
| Real estate – residential | 59,624 | 59,065 | ||||||
| Consumer | 27,828 | 28,279 | ||||||
| Unearned fees | (734 | ) | (548 | ) | ||||
| 794,908 | 753,092 | |||||||
| Allowance for loan losses | (9,953 | ) | (9,565 | ) | ||||
| Net Loans | $ | 784,955 | $ | 743,527 | ||||
Deposit Composition
The components of the Company’s deposits at June 30, 2017 and December 31, 2016 are as follows:
| (in thousands) | ||||||||
| June 30, 2017 | December 31, 2016 | |||||||
| Non-interest-bearing | $ | 172,737 | $ | 160,104 | ||||
| NOW accounts | 184,534 | 152,771 | ||||||
| Savings deposits | 260,715 | 261,438 | ||||||
| Money market deposits | 63,474 | 62,495 | ||||||
| Listed service CD’s | 41,949 | 47,648 | ||||||
| Time deposits / IRA | 56,044 | 56,489 | ||||||
| Wholesale deposits | 31,272 | 35,622 | ||||||
| Total Deposits | $ | 810,725 | $ | 776,567 | ||||
2017 Second Quarter Financial Review
Net Income
Net income for the three months ended June 30, 2017 increased 23.2% to $2.13 million, or $0.25 per diluted common share, compared to $1.73 million, or $0.20 per diluted common share, for the same period last year. The increase was largely due to both higher net interest income and non-interest income, coupled with a benefit to income tax expense related to the adoption of ASU 2016-09, Compensation - Stock Compensation, Improvements to Employee Share-Based Payment Accounting, which increased net income by $145,000, or $0.02 per diluted share. On a linked quarter basis, second quarter 2017 net income increased 18.1% from the first quarter of 2017.
Net income for the six months ended June 30, 2017 increased 14.9% to $3.93 million, or $0.45 per diluted share, compared to $3.42 million, or $0.40 per diluted share, in the same prior year period.
Net Interest Income
Net interest income for the quarter ended June 30, 2017 was $7.96 million, an increase of 9.5% compared to $7.27 million in the corresponding prior year period. This was largely due to an increase of $95.3 million, or 11.6%, in average interest-earning assets, primarily attributable to growth in the loan portfolio. On a linked quarter basis, net interest income increased $328,000, or 4.3%, from $7.63 million.
For the first half of 2017, net interest income increased 8.3% to $15.6 million from $14.4 million in the prior year period.
Net Interest Margin
The Company reported a net interest margin of 3.49% for the second quarter of 2017, compared to 3.45% in the first quarter of 2017 and 3.57% reported for the second quarter of 2016. The net interest margin improvement from the first quarter of 2017 was the result of slightly higher yielding interest-earning assets coupled with a higher level of average non-interest-bearing demand deposits.
The net interest margin for the first half of 2017 was 3.47%, compared to 3.57% in the prior year period.
Non-Interest Income
Non-interest income for the quarter ended June 30, 2017 totaled $1.54 million, an increase of $372,000, or 31.9%, compared to the same period in 2016. Residential mortgage banking revenue increased $193,000, or 68.7%, which included an $86,000 gain from the sale of $3.6 million of portfolio adjustable rate mortgages. Additionally, higher gains from the sale of SBA loans and other loan fees, primarily due to higher loan prepayment fees, contributed to the increase.
On a linked quarter basis, non-interest income increased by $413,000, or 36.7%, from the first quarter of 2017, mainly due to higher gains on the sale of SBA loans, residential mortgage banking revenues, and other loan fees.
For the six months ended June 30, 2017, non-interest income increased $604,000, or 29.3%, to $2.7 million from the same period in 2016.
Non-Interest Expense
Non-interest expense for the quarter ended June 30, 2017 totaled $6.07 million, an increase of $692,000, or 12.9%, from the $5.38 million reported in same period in 2016, primarily due to salary increases and higher loan workout expenses. On a linked quarter basis, non-interest expense increased $294,000, or 5.1%, largely due to higher loan workout expenses and other operating expenses.
For the six months ended June 30, 2017, non-interest expense increased $1.07 million, or 9.9%, to $11.8 million compared to the same prior year period.
Provision for Loan Losses
During the quarter, a provision for loan losses of $375,000 was expensed, compared to $390,000 in the same prior year period. The majority of the second quarter 2017 provision was to support the Company’s strong loan growth. The Company had $11,000 in net loan recoveries during the quarter, compared to $65,000 in net loan recoveries during the same period last year. For the first half of 2017, a provision of $600,000 was expensed, compared to $390,000 for the same prior year period. The Company had $212,000 of net loan charge-offs during the first half of 2017, compared to $315,000 in net loan recoveries in the same prior year period.
As of June 30, 2017, the Company's allowance for loan losses was $9.95 million, as compared to $9.57 million as of December 31, 2016. The loss allowance as a percentage of total loans was 1.25% at June 30, 2017 compared to 1.27% at December 31, 2016.
Financial Condition / Balance Sheet
At June 30, 2017, 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 8.95%, its common equity Tier 1 to risk weighted assets ratio was 10.08%, its Tier 1 capital to risk weighted assets ratio was 10.08%, and its total capital to risk weighted assets ratio was 12.40%.
Total assets as of June 30, 2017 were $983.1 million, an increase of 4.6% compared to $940.2 million as of December 31, 2016.
Total loans as of June 30, 2017 were $794.9 million, an increase of 5.6% compared to $753.1 million at December 31, 2016.
Total deposits as of June 30, 2017 were $810.7 million, an increase of 4.4% compared to $776.6 million as of December 31, 2016. Core checking deposits at June 30, 2017 increased to $357.3 million, up $44.4 million, or 14.2% from year-end. This growth was primarily driven by a new municipal relationship in the first half of 2017 and the Company’s focus on building core checking account deposit relationships.
Asset Quality
The Company's non-performing assets at June 30, 2017 were $3.18 million as compared to $1.81 million at December 31, 2016 and $1.96 million at June 30, 2016. Non-performing assets to total assets at June 30, 2017 were 0.32% compared to 0.19% at December 31, 2016 and 0.22% at June 30, 2016.
Non-accrual loans were $2.95 million at June 30, 2017, compared to $1.55 million at December 31, 2016 and $1.70 million at June 30, 2016. During the quarter, three relationships migrated to non-accrual status. These relationships were previously identified as TDRs or exhibited negative financial trends which management had identified. OREO decreased to $233,000 at June 30, 2017, compared to $259,000 at both December 31, 2016 and June 30, 2016 due to a $26,000 writedown taken during the current quarter.
Troubled debt restructured loan balances amounted to $7.95 million at June 30, 2017, with all but $960,000 performing. This compared to $8.23 million at December 31, 2016 and $8.65 million at June 30, 2016.
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 15 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, 2016. 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.
| TWO RIVER BANCORP | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||||||
| For the Three Months and Six Months Ended June 30, 2017 and 2016 | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 8,733 | $ | 8,085 | $ | 17,136 | $ | 15,998 | |||||||
| Securities: | |||||||||||||||
| Taxable | 235 | 192 | 468 | 384 | |||||||||||
| Tax-exempt | 279 | 230 | 564 | 430 | |||||||||||
| Interest-bearing deposits | 102 | 32 | 174 | 65 | |||||||||||
| Total Interest Income | 9,349 | 8,539 | 18,342 | 16,877 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 1,063 | 945 | 2,101 | 1,828 | |||||||||||
| Securities sold under agreements to repurchase | 17 | 15 | 32 | 29 | |||||||||||
| Federal Home Loan Bank ("FHLB") and other borrowings | 147 | 147 | 292 | 295 | |||||||||||
| Subordinated debt | 164 | 163 | 329 | 328 | |||||||||||
| Total Interest Expense | 1,391 | 1,270 | 2,754 | 2,480 | |||||||||||
| Net Interest Income | 7,958 | 7,269 | 15,588 | 14,397 | |||||||||||
| PROVISION FOR LOAN LOSSES | 375 | 390 | 600 | 390 | |||||||||||
| Net Interest Income after Provision for Loan Losses | 7,583 | 6,879 | 14,988 | 14,007 | |||||||||||
| NON-INTEREST INCOME: | |||||||||||||||
| Service fees on deposit accounts | 161 | 137 | 311 | 273 | |||||||||||
| Mortgage banking | 474 | 281 | 900 | 515 | |||||||||||
| Other loan fees | 122 | 62 | 214 | 123 | |||||||||||
| Earnings from investment in bank owned life insurance | 138 | 110 | 274 | 219 | |||||||||||
| Gain on sale of SBA loans | 394 | 365 | 511 | 459 | |||||||||||
| Net gain on sale of securities | - | - | - | 72 | |||||||||||
| Other income | 249 | 211 | 453 | 398 | |||||||||||
| Total Non-Interest Income | 1,538 | 1,166 | 2,663 | 2,059 | |||||||||||
| NON-INTEREST EXPENSES: | |||||||||||||||
| Salaries and employee benefits | 3,460 | 3,195 | 6,913 | 6,300 | |||||||||||
| Occupancy and equipment | 1,049 | 1,033 | 2,103 | 2,028 | |||||||||||
| Professional | 395 | 280 | 736 | 615 | |||||||||||
| Insurance | 53 | 57 | 101 | 104 | |||||||||||
| FDIC insurance and assessments | 108 | 105 | 231 | 210 | |||||||||||
| Advertising | 125 | 120 | 235 | 230 | |||||||||||
| Data processing | 125 | 135 | 255 | 270 | |||||||||||
| Outside services fees | 124 | 115 | 227 | 238 | |||||||||||
| Amortization of identifiable intangibles | - | - | - | 9 | |||||||||||
| OREO expenses, impairment and sales, net | 22 | (45 | ) | 19 | (26 | ) | |||||||||
| Loan workout expenses | 139 | 18 | 166 | 98 | |||||||||||
| Other operating | 471 | 366 | 862 | 700 | |||||||||||
| Total Non-Interest Expenses | 6,071 | 5,379 | 11,848 | 10,776 | |||||||||||
| Income before Income Taxes | 3,050 | 2,666 | 5,803 | 5,290 | |||||||||||
| INCOME TAX EXPENSE | 922 | 939 | 1,873 | 1,870 | |||||||||||
| Net Income | $ | 2,128 | $ | 1,727 | $ | 3,930 | $ | 3,420 | |||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||
| Basic | $ | 0.25 | $ | 0.21 | $ | 0.47 | $ | 0.41 | |||||||
| Diluted | $ | 0.25 | $ | 0.20 | $ | 0.45 | $ | 0.40 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 8,372 | 8,323 | 8,363 | 8,319 | |||||||||||
| Diluted | 8,654 | 8,516 | 8,642 | 8,506 | |||||||||||
| TWO RIVER BANCORP | ||||||
| CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||
| (in thousands, except share data) | ||||||
| June 30, | December 31, | |||||
| 2017 | 2016 | |||||
| ASSETS | ||||||
| Cash and due from banks | $ | 21,267 | $ | 19,844 | ||
| Interest-bearing deposits in bank | 23,431 | 22,233 | ||||
| Cash and cash equivalents | 44,698 | 42,077 | ||||
| Securities available for sale | 31,598 | 34,464 | ||||
| Securities held to maturity | 55,750 | 57,843 | ||||
| Restricted investments, at cost | 5,286 | 4,805 | ||||
| Loans held for sale | 6,786 | 4,537 | ||||
| Loans | 794,908 | 753,092 | ||||
| Allowance for loan losses | (9,953 | ) | (9,565 | ) | ||
| Net loans | 784,955 | 743,527 | ||||
| OREO | 233 | 259 | ||||
| Bank owned life insurance | 21,303 | 21,029 | ||||
| Premises and equipment, net | 5,215 | 4,662 | ||||
| Accrued interest receivable | 2,337 | 2,234 | ||||
| Goodwill | 18,109 | 18,109 | ||||
| Other assets | 6,829 | 6,665 | ||||
| TOTAL ASSETS | $ | 983,099 | $ | 940,211 | ||
| LIABILITIES | ||||||
| Deposits: | ||||||
| Non-interest-bearing | $ | 172,737 | $ | 160,104 | ||
| Interest-bearing | 637,988 | 616,463 | ||||
| Total Deposits | 810,725 | 776,567 | ||||
| Securities sold under agreements to repurchase | 25,823 | 19,915 | ||||
| FHLB and other borrowings | 24,300 | 25,300 | ||||
| Subordinated debt | 9,871 | 9,855 | ||||
| Accrued interest payable | 94 | 100 | ||||
| Other liabilities | 7,762 | 7,758 | ||||
| Total Liabilities | 878,575 | 839,495 | ||||
| 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 – 8,740,865 and 8,677,536 at June 30, 2017 and December 31, 2016, respectively | ||||||
| Outstanding – 8,428,771 and 8,365,442 at June 30, 2017 and December 31, 2016 respectively | 79,394 | 79,056 | ||||
| Retained earnings | 27,722 | 24,447 | ||||
| Treasury stock, at cost; 312,094 shares at June 30, 2017 and December 31, 2016 | (2,396 | ) | (2,396 | ) | ||
| Accumulated other comprehensive loss | (196 | ) | (391 | ) | ||
| Total Shareholders' Equity | 104,524 | 100,716 | ||||
| TOTAL LIABILITIES and SHAREHOLDERS’ EQUITY | $ | 983,099 | $ | 940,211 | ||
| TWO RIVER BANCORP | |||||||||||||||
| Selected Consolidated Financial Data (Unaudited) | |||||||||||||||
| Selected Consolidated Earnings Data | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||
| Selected Consolidated Earnings Data: | 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||
| Total Interest Income | $ | 9,349 | $ | 8,993 | $ | 8,539 | $ | 18,342 | $ | 16,877 | |||||
| Total Interest Expense | 1,391 | 1,363 | 1,270 | 2,754 | 2,480 | ||||||||||
| Net Interest Income | 7,958 | 7,630 | 7,269 | 15,588 | 14,397 | ||||||||||
| Provision for Loan Losses | 375 | 225 | 390 | 600 | 390 | ||||||||||
| Net Interest Income after Provision for Loan Losses | 7,583 | 7,405 | 6,879 | 14,988 | 14,007 | ||||||||||
| Other Non-Interest Income | 1,538 | 1,125 | 1,166 | 2,663 | 2,059 | ||||||||||
| Other Non-Interest Expenses | 6,071 | 5,777 | 5,379 | 11,848 | 10,776 | ||||||||||
| Income before Income Taxes | 3,050 | 2,753 | 2,666 | 5,803 | 5,290 | ||||||||||
| Income Tax Expense | 922 | 951 | 939 | 1,873 | 1,870 | ||||||||||
| Net Income | $ | 2,128 | $ | 1,802 | $ | 1,727 | $ | 3,930 | $ | 3,420 | |||||
| Per Common Share Data: | |||||||||||||||
| Basic Earnings | $ | 0.25 | $ | 0.22 | $ | 0.21 | $ | 0.47 | $ | 0.41 | |||||
| Diluted Earnings | $ | 0.25 | $ | 0.21 | $ | 0.20 | $ | 0.45 | $ | 0.40 | |||||
| Book Value | $ | 12.40 | $ | 12.21 | $ | 11.51 | $ | 12.40 | $ | 11.51 | |||||
| Tangible Book Value(1) | $ | 10.25 | $ | 10.05 | $ | 9.34 | $ | 10.25 | $ | 9.34 | |||||
| Average Common Shares Outstanding (in thousands): | |||||||||||||||
| Basic | 8,372 | 8,341 | 8,323 | 8,363 | 8,319 | ||||||||||
| Diluted | 8,654 | 8,618 | 8,516 | 8,642 | 8,506 | ||||||||||
| (1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release. | |||||||||||||||
| Selected Period End Balances | |||||||||||||||
| (in thousands) | |||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | |||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | |||||||||||
| Total Assets | $ | 983,099 | $ | 967,073 | $ | 940,211 | $ | 909,170 | $ | 884,700 | |||||
| Investment Securities and Restricted Stock | 92,634 | 94,850 | 97,112 | 82,677 | 84,246 | ||||||||||
| Total Loans | 794,908 | 762,687 | 753,092 | 753,982 | 726,414 | ||||||||||
| Allowance for Loan Losses | (9,953 | ) | (9,567 | ) | (9,565 | ) | (9,452 | ) | (9,418 | ) | |||||
| Goodwill and Other Intangible Assets | 18,109 | 18,109 | 18,109 | 18,109 | 18,109 | ||||||||||
| Total Deposits | 810,725 | 799,705 | 776,567 | 739,247 | 726,264 | ||||||||||
| Repurchase Agreements | 25,823 | 21,437 | 19,915 | 18,645 | 21,683 | ||||||||||
| FHLB and Other Borrowings | 24,300 | 24,300 | 25,300 | 35,300 | 23,800 | ||||||||||
| Subordinated Debt | 9,871 | 9,863 | 9,855 | 9,847 | 9,839 | ||||||||||
| Shareholders' Equity | 104,524 | 102,406 | 100,716 | 98,594 | 96,293 | ||||||||||
| Asset Quality Data (by Quarter) | ||||||||||||||||
| (dollars in thousands) | ||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | ||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | ||||||||||||
| Nonaccrual Loans | $ | 2,946 | $ | 1,511 | $ | 1,548 | $ | 1,587 | $ | 1,697 | ||||||
| OREO | 233 | 259 | 259 | 259 | 259 | |||||||||||
| Total Non-Performing Assets | 3,179 | 1,770 | 1,807 | 1,846 | 1,956 | |||||||||||
| Troubled Debt Restructured Loans: | ||||||||||||||||
| Performing | 6,990 | 7,754 | 8,075 | 8,366 | 8,492 | |||||||||||
| Non-Performing | 960 | 405 | 157 | 157 | 158 | |||||||||||
| Non-Performing Loans to Total Loans | 0.37 | % | 0.20 | % | 0.21 | % | 0.21 | % | 0.23 | % | ||||||
| Non-Performing Assets to Total Assets | 0.32 | % | 0.18 | % | 0.19 | % | 0.20 | % | 0.22 | % | ||||||
| Allowance as a % of Loans | 1.25 | % | 1.25 | % | 1.27 | % | 1.25 | % | 1.30 | % | ||||||
| Capital Ratios | |||||||||||||||||||||||||||||||
| June 30, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||
| 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 | 10.08 | % | 8.95 | % | 10.08 | % | 12.40 | % | 10.33 | % | 8.94 | % | 10.33 | % | 12.76 | % | |||||||||||||||
| Two River Community Bank | 11.14 | % | 9.90 | % | 11.14 | % | 12.30 | % | 11.49 | % | 9.95 | % | 11.49 | % | 12.68 | % | |||||||||||||||
| "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) | June 30, 2017 | June 30, 2016 | ||||||||||||||||
| Interest / Income Expense | Interest / Income Expense | |||||||||||||||||
| ASSETS | Average Balance | Average Yield / Rate | Average Balance | Average Yield / Rate | ||||||||||||||
| Interest-Earning Assets: | ||||||||||||||||||
| Interest-bearing due from banks | $ | 40,442 | $ | 102 | 1.01 | % | $ | 19,378 | $ | 32 | 0.66 | % | ||||||
| Investment securities | 94,123 | 514 | 2.18 | % | 84,308 | 422 | 2.00 | % | ||||||||||
| Loans, net of unearned fees(1) (2) | 779,508 | 8,733 | 4.49 | % | 715,114 | 8,085 | 4.55 | % | ||||||||||
| Total Interest-Earning Assets | 914,073 | 9,349 | 4.10 | % | 818,800 | 8,539 | 4.19 | % | ||||||||||
| Non-Interest-Earning Assets: | ||||||||||||||||||
| Allowance for loan losses | (9,698 | ) | (9,031 | ) | ||||||||||||||
| All other assets | 80,633 | 79,644 | ||||||||||||||||
| Total Assets | $ | 985,008 | $ | 889,413 | ||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||
| NOW deposits | $ | 197,949 | 231 | 0.47 | % | $ | 154,633 | 173 | 0.45 | % | ||||||||
| Savings deposits | 259,860 | 336 | 0.52 | % | 226,545 | 275 | 0.49 | % | ||||||||||
| Money market deposits | 63,841 | 26 | 0.16 | % | 74,726 | 30 | 0.16 | % | ||||||||||
| Time deposits | 131,209 | 470 | 1.44 | % | 131,407 | 467 | 1.43 | % | ||||||||||
| Securities sold under agreements to repurchase | 23,577 | 17 | 0.29 | % | 19,440 | 15 | 0.31 | % | ||||||||||
| FHLB and other borrowings | 24,303 | 147 | 2.43 | % | 23,800 | 147 | 2.48 | % | ||||||||||
| Subordinated debt | 9,868 | 164 | 6.65 | % | 9,836 | 163 | 6.63 | % | ||||||||||
| Total Interest-Bearing Liabilities | 710,607 | 1,391 | 0.79 | % | 640,387 | 1,270 | 0.80 | % | ||||||||||
| Non-Interest-Bearing Liabilities: | ||||||||||||||||||
| Demand deposits | 163,198 | 146,667 | ||||||||||||||||
| Other liabilities | 7,854 | 6,901 | ||||||||||||||||
| Total Non-Interest-Bearing Liabilities | 171,052 | 153,568 | ||||||||||||||||
| Stockholders’ Equity | 103,349 | 95,458 | ||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 985,008 | $ | 889,413 | ||||||||||||||
| NET INTEREST INCOME | $ | 7,958 | $ | 7,269 | ||||||||||||||
| NET INTEREST SPREAD(3) | 3.31 | % | 3.39 | % | ||||||||||||||
| NET INTEREST MARGIN(4) | 3.49 | % | 3.57 | % | ||||||||||||||
| (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. | ||||||||||||||||||
| Consolidated Average Balance Sheets & Yields | ||||||||||||||||||
| With Resultant Interest and Average Rates | ||||||||||||||||||
| Six Months Ended | Six Months Ended | |||||||||||||||||
| (dollars in thousands) | June 30, 2017 | June 30, 2016 | ||||||||||||||||
| Interest / Income Expense | Interest / Income Expense | |||||||||||||||||
| ASSETS | Average Balance | Average Yield / Rate | Average Balance | Average Yield / Rate | ||||||||||||||
| Interest-Earning Assets: | ||||||||||||||||||
| Interest-bearing due from banks | $ | 39,359 | $ | 174 | 0.89 | % | $ | 24,550 | $ | 65 | 0.53 | % | ||||||
| Investment securities | 95,072 | 1,032 | 2.17 | % | 81,738 | 814 | 1.99 | % | ||||||||||
| Loans, net of unearned fees(1) (2) | 770,860 | 17,136 | 4.48 | % | 704,964 | 15,998 | 4.56 | % | ||||||||||
| Total Interest-Earning Assets | 905,291 | 18,342 | 4.09 | % | 811,252 | 16,877 | 4.18 | % | ||||||||||
| Non-Interest-Earning Assets: | ||||||||||||||||||
| Allowance for loan losses | (9,671 | ) | (8,913 | ) | ||||||||||||||
| All other assets | 78,119 | 77,860 | ||||||||||||||||
| Total Assets | $ | 973,739 | $ | 880,199 | ||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||
| NOW deposits | $ | 194,943 | 443 | 0.46 | % | $ | 152,631 | 324 | 0.43 | % | ||||||||
| Savings deposits | 258,189 | 663 | 0.52 | % | 225,871 | 548 | 0.49 | % | ||||||||||
| Money market deposits | 62,760 | 52 | 0.17 | % | 74,293 | 60 | 0.16 | % | ||||||||||
| Time deposits | 133,827 | 943 | 1.42 | % | 127,420 | 896 | 1.41 | % | ||||||||||
| Securities sold under agreements to repurchase | 21,488 | 32 | 0.30 | % | 18,570 | 29 | 0.31 | % | ||||||||||
| FHLB and other borrowings | 24,374 | 292 | 2.42 | % | 23,983 | 295 | 2.47 | % | ||||||||||
| Subordinated debt | 9,864 | 329 | 6.67 | % | 9,832 | 328 | 6.67 | % | ||||||||||
| Total Interest-Bearing Liabilities | 705,445 | 2,754 | 0.79 | % | 632,600 | 2,480 | 0.79 | % | ||||||||||
| Non-Interest-Bearing Liabilities: | ||||||||||||||||||
| Demand deposits | 158,219 | 145,544 | ||||||||||||||||
| Other liabilities | 7,522 | 7,342 | ||||||||||||||||
| Total Non-Interest-Bearing Liabilities | 165,741 | 152,886 | ||||||||||||||||
| Shareholders’ Equity | 102,553 | 94,713 | ||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 973,739 | $ | 880,199 | ||||||||||||||
| NET INTEREST INCOME | $ | 15,588 | $ | 14,397 | ||||||||||||||
| NET INTEREST SPREAD(3) | 3.30 | % | 3.39 | % | ||||||||||||||
| NET INTEREST MARGIN(4) | 3.47 | % | 3.57 | % | ||||||||||||||
| (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 "book value per common share," "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 | As of and for the Six Months Ended | ||||||||||||||||||||
| June 30, | March 31, | Dec. 31, | Sept. 30, | June 30, | June 30, | June 30, | |||||||||||||||
| 2017 | 2017 | 2016 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||
| Total shareholders' equity | $ | 104,524 | $ | 102,406 | $ | 100,716 | $ | 98,594 | $ | 96,293 | $ | 104,524 | $ | 96,293 | |||||||
| Less: goodwill and other tangibles | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,109 | ) | |||||||
| Tangible common shareholders’ equity | $ | 86,415 | $ | 84,297 | $ | 82,607 | $ | 80,485 | $ | 78,184 | $ | 86,415 | $ | 78,184 | |||||||
| Common shares outstanding | 8,429 | 8,389 | 8,365 | 8,358 | 8,366 | 8,429 | 8,366 | ||||||||||||||
| Book value per common share | $ | 12.40 | $ | 12.21 | $ | 12.04 | $ | 11.80 | $ | 11.51 | $ | 12.40 | $ | 11.51 | |||||||
| Book value per common share | $ | 12.40 | $ | 12.21 | $ | 12.04 | $ | 11.80 | $ | 11.51 | $ | 12.40 | $ | 11.51 | |||||||
| Effect of intangible assets | (2.15 | ) | (2.16 | ) | (2.16 | ) | (2.17 | ) | (2.17 | ) | (2.15 | ) | (2.17 | ) | |||||||
| Tangible book value per common share | $ | 10.25 | $ | 10.05 | $ | 9.88 | $ | 9.63 | $ | 9.34 | $ | 10.25 | $ | 9.34 | |||||||
| Return on average assets | 0.87 | % | 0.76 | % | 1.08 | % | 1.16 | % | 0.78 | % | 0.81 | % | 0.78 | % | |||||||
| Effect of average intangible assets | 0.01 | % | 0.01 | % | 0.02 | % | 0.03 | % | 0.02 | % | 0.02 | % | 0.02 | % | |||||||
| Return on average tangible assets | 0.88 | % | 0.77 | % | 1.10 | % | 1.19 | % | 0.80 | % | 0.83 | % | 0.80 | % | |||||||
| Return on average equity | 8.26 | % | 7.18 | % | 10.25 | % | 10.81 | % | 7.28 | % | 7.73 | % | 7.26 | % | |||||||
| Effect of average intangible assets | 1.75 | % | 1.56 | % | 2.28 | % | 2.48 | % | 1.70 | % | 1.66 | % | 1.72 | % | |||||||
| Return on average tangible equity | 10.01 | % | 8.74 | % | 12.53 | % | 13.29 | % | 8.98 | % | 9.39 | % | 8.98 | % | |||||||