TINTON FALLS, N.J., Jan. 30, 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 fourth quarter and twelve months ended December 31, 2017, highlighted by solid loan growth during the quarter. All share and per share data for all referenced reporting periods have been adjusted for a 5% stock dividend paid on February 28, 2017.
Tax Cuts and Jobs Act
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. Among the other changes was a permanent reduction in the Federal corporate income tax rate from 34% to 21%, effective January 1, 2018. As a result of this change, the Company had to revalue its net deferred tax asset at December 31, 2017. The Company reduced its net deferred tax asset by $1.78 million, or $0.21 per diluted share, which was recorded as a one-time non-cash charge to income tax expense in the fourth quarter of 2017. The reduction of the Company’s 2018 Federal corporate tax rate to 21% will result in a significant tax benefit in 2018 and beyond and it is anticipated that the majority of this charge will be recouped in 2018. A portion of this tax benefit will be used to reinvest in the Company’s people, fund its growth, and further support the communities it serves. The charge impacted several metrics throughout the quarter and annual results.
Operating and Financial Highlights
(all comparisons to the respective prior year’s period unless otherwise noted)
Fourth Quarter 2017
- Net income was $335,000, or $0.04 per diluted share, compared to $2.57 million, or $0.30 per diluted share.
-- The 2017 fourth quarter included the above-mentioned charge to income tax expense of $1.78 million, or $0.21 per diluted share. Excluding this one-time charge, 2017 fourth quarter net income was $2.11 million, or $0.24 per diluted share. - Net interest income increased 12.3% to $8.53 million due to strong loan growth.
- Total loans increased $34.8 million in the fourth quarter to $850.9 million. As a result of this loan growth, the Company reported a $675,000 loan loss provision, compared to a loan loss recovery of $345,000 in the same prior year period.
- Total deposits grew by $39.7 million during the quarter to $861.6 million as core checking deposits increased by $28.0 million.
Annual 2017
- Net income was $6.50 million, or $0.75 per diluted share, compared to $8.63 million, or $1.01 per diluted share. Net income for 2017 was impacted by the above-mentioned charge to income tax expense of $1.78 million, or $0.21 per diluted share. In 2016, the Company received an $862,000, or $0.10 per diluted share, tax-free BOLI death benefit. Excluding the one-time charge to income tax expense and the BOLI event in the prior year, 2017 net income increased 6.6%.
- Net interest income increased 10.4% to $32.53 million, largely due to higher interest-earning assets driven by loan growth.
- Non-interest income decreased 0.5% to $5.46 million, due the impact of the previously announced BOLI death benefit received in 2016. Excluding the BOLI death benefit, non-interest income increased 18.0%.
- Non-performing assets to total assets decreased to 0.20% at December 31, 2017, from 0.23% at September 30, 2017, and increased from 0.19% at December 31, 2016.
- Tangible book value per share was $10.44 at December 31, 2017, compared to $10.46 at September 30, 2017 and $9.88 at December 31, 2016.
- Total assets at December 31, 2017 were a record $1.04 billion, an increase of $99.6 million, or 10.6%, from $940.2 million at December 31, 2016.
- Total loans as of December 31, 2017 were $850.9 million, an increase of $97.8 million, or 13.0%, from $753.1 million at December 31, 2016.
- Total deposits as of December 31, 2017 were $861.6 million, an increase of $85.0 million, or 10.9%, compared with $776.6 million as of December 31, 2016.
Management Commentary
William D. Moss, President and CEO, stated, “The Company achieved exceptional loan and deposit growth in the fourth quarter, which fueled a strong finish to the year and provides a very strong base for 2018. Commercial real estate loans remain the strongest catalyst for this growth, as we benefited from a robust loan pipeline across our geographic footprint. The fee income contributions from both our SBA and mortgage business lines were strong throughout 2017, reflected in a 21.1% and 36.2% increase, respectively. We are pleased to have exceeded the $1.0 billion mark in assets during the year, and expect earnings to benefit by loan growth in future quarters, along with the positive impact of the lower tax rate.”
Dividend Information
On January 17, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.045 per share, payable on February 28, 2018 to shareholders of record as of the close of business on February 7, 2018. This marks the 20th consecutive quarterly cash dividend, which is in addition to the 5% stock dividend paid in February 2017.
Key Quarterly Performance Metrics
| 4th Qtr. | 3rd Qtr. | 2nd Qtr. | 1st Qtr. | 4th Qtr. | 12 Mo. Ended | 12 Mo. Ended | |||||||||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | 12/31/2017 | 12/31/2016 | |||||||||||||||||||||||
| Net Income (in thousands) | $ | 335 | $ | 2,237 | $ | 2,128 | $ | 1,802 | $ | 2,567 | $ | 6,502 | $ | 8,631 | |||||||||||||||
| Earnings per Common Share – Diluted | $ | 0.04 | $ | 0.26 | $ | 0.25 | $ | 0.21 | $ | 0.30 | $ | 0.75 | $ | 1.01 | |||||||||||||||
| Return on Average Assets | 0.13 | % | 0.89 | % | 0.87 | % | 0.76 | % | 1.08 | % | 0.66 | % | 0.96 | % | |||||||||||||||
| Return on Average Tangible Assets(1) | 0.13 | % | 0.91 | % | 0.88 | % | 0.77 | % | 1.10 | % | 0.67 | % | 0.98 | % | |||||||||||||||
| Return on Average Equity | 1.24 | % | 8.39 | % | 8.26 | % | 7.18 | % | 10.25 | % | 6.22 | % | 8.94 | % | |||||||||||||||
| Return on Average Tangible Equity(1) | 1.49 | % | 10.13 | % | 10.01 | % | 8.74 | % | 12.53 | % | 7.52 | % | 11.00 | % | |||||||||||||||
| Net Interest Margin | 3.56 | % | 3.62 | % | 3.49 | % | 3.45 | % | 3.43 | % | 3.53 | % | 3.53 | % | |||||||||||||||
| Non-Performing Assets to Total Assets | 0.20 | % | 0.23 | % | 0.32 | % | 0.18 | % | 0.19 | % | 0.20 | % | 0.19 | % | |||||||||||||||
| Allowance as a % of Loans | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | 1.27 | % | 1.25 | % | 1.27 | % | |||||||||||||||
| (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 December 31, 2017 and December 31, 2016 are as follows:
| (in thousands) | ||||||||
| December 31, 2017 | December 31, 2016 | |||||||
| Commercial and industrial | $ | 101,371 | $ | 93,697 | ||||
| Real estate – construction | 118,094 | 111,914 | ||||||
| Real estate – commercial | 537,733 | 460,685 | ||||||
| Real estate – residential | 64,238 | 59,065 | ||||||
| Consumer | 30,203 | 28,279 | ||||||
| Unearned fees | (765 | ) | (548 | ) | ||||
| 850,874 | 753,092 | |||||||
| Allowance for loan losses | (10,668 | ) | (9,565 | ) | ||||
| Net Loans | $ | 840,206 | $ | 743,527 | ||||
Deposit Composition
The components of the Company’s deposits at December 31, 2017 and December 31, 2016 are as follows:
| (in thousands) | ||||||||
| December 31, 2017 | December 31, 2016 | |||||||
| Non-interest-bearing | $ | 167,297 | $ | 160,104 | ||||
| NOW accounts | 232,673 | 152,771 | ||||||
| Savings deposits | 242,448 | 261,438 | ||||||
| Money market deposits | 59,818 | 62,495 | ||||||
| Listed service CD’s | 44,436 | 47,648 | ||||||
| Time deposits / IRA | 74,183 | 56,489 | ||||||
| Wholesale deposits | 40,702 | 35,622 | ||||||
| Total Deposits | $ | 861,557 | $ | 776,567 | ||||
2017 Fourth Quarter and Year End Financial Review
Net Income
Net income for the three months ended December 31, 2017 was $335,000, or $0.04 per diluted common share, compared to $2.57 million, or $0.30 per diluted common share, for the same period last year. The decrease in net income was largely the result of the previously mentioned $1.78 million, or $0.21 per diluted share, write-down of the Company’s deferred tax asset from 34% to 21%, which will be the Company’s new corporate tax rate beginning in 2018. Additionally, the provision for loan losses was $675,000 for the quarter due to strong loan growth, compared to a loan loss recovery of $345,000 in the same prior year period, which was the result of a recovery related to a credit previously charged off.
On a linked quarter basis, fourth quarter 2017 net income decreased to $335,000 from $2.24 million for the third quarter of 2017.
Net income for the twelve months ended December 31, 2017 decreased to $6.50 million, or $0.75 per diluted share, compared to $8.63 million, or $1.01 per diluted share, in the same prior year period. Excluding the effect of the previously mentioned deferred tax asset writedown in 2017 and the BOLI death benefit in 2016, net income increased 6.6% for the twelve months ended December 31, 2017.
Net Interest Income
Net interest income for the quarter ended December 31, 2017 was $8.53 million, an increase of 12.3% compared to $7.59 million in the corresponding prior year period. This increase was largely due to an increase of $71.6 million, or 8.4%, in total interest earning assets, primarily attributable to growth in the loan portfolio. On a linked quarter basis, net interest income increased $113,000, or 1.3%, from $8.42 million.
For the year ended December 31, 2017, net interest income increased 10.4% to $32.5 million from $29.5 million in the prior year.
Net Interest Margin
The Company reported a net interest margin of 3.56% for the fourth quarter of 2017, compared to 3.62% in the third quarter of 2017 and 3.43% reported for the fourth quarter of 2016. The margin improvement from the prior year was primarily the result of slightly higher yielding interest-earning assets coupled with a higher level of average core checking deposits.
Net interest margin for the year ended December 31, 2017 was 3.53%, unchanged from the prior year.
Non-Interest Income
Non-interest income for the quarter ended December 31, 2017 totaled $1.34 million, a decrease of $104,000, or 7.19%, compared to the same period in 2016. The Company reported lower loan fees and, to a lesser extent, lower gains from the sale of SBA loans. Residential mortgage banking revenue was $325,000 during the quarter, as compared to $331,000 in the prior year period.
On a linked quarter basis, non-interest income decreased by $110,000 from the third quarter of 2017, mainly due to decreases in residential mortgage banking income and gains from the sale of SBA loans. Residential mortgage banking revenue decreased $33,000, or 9.2%, from $358,000 during the third quarter of 2017. Gains from the sale of SBA loans decreased $71,000, or 23.2%, from $306,000 during the third quarter of 2017 due to the timing of loan closings.
For the year ended December 31, 2017, non-interest income decreased slightly by $30,000, or 0.5%, to $5.46 million from the prior year due to the BOLI death benefit in 2016. Excluding this death benefit, non-interest income increased $832,000, or 18.0%. Mortgage banking revenue increased by 36.2% to $1.58 million, while gains from the sale of SBA loans increased 21.2% to $1.05 million.
Non-Interest Expense
Non-interest expense for the quarter ended December 31, 2017 totaled $5.92 million, an increase from the $5.36 million reported in same period in 2016, primarily due to a rise in salaries and employee benefits along with a one-time $144,000 expense recovery in the fourth quarter of 2016 related to a credit previously charged off. On a linked quarter basis, non-interest expense decreased $256,000, or 4.1%, from $6.18 million due to lower salaries and benefits.
For the year ended December 31, 2017, non-interest expense increased $2.47 million, or 11.5%, to $23.9 million compared to the prior year. The increase in non-interest expense was largely attributable to a rise in salaries and employee benefits coupled with $394,000 of one-time expense recoveries in 2016 relating to both the settlement of an OREO property and the collection from the above-mentioned credit previously charged off.
Provision for Loan Losses
During the quarter, the Company expensed a $675,000 loan loss provision, compared to a loan loss recovery of $345,000 in the same prior year period. The loan loss provision was largely due to the $34.8 million of loan growth in the fourth quarter 2017. The Company had net charge-offs of approximately $230,000 for the period.
For the year ended December 31, 2017, a loan loss provision of $1.53 million was expensed, compared to $515,000 for the prior year.
As of December 31, 2017, the Company's allowance for loan losses was $10.67 million, compared to $9.57 million as of December 31, 2016. The loss allowance as a percentage of total loans was 1.25% at December 31, 2017, compared to 1.27% at December 31, 2016.
Financial Condition / Balance Sheet
At December 31, 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 8.85%, common equity Tier 1 to risk weighted assets ratio was 9.68%, Tier 1 capital to risk weighted assets ratio was 9.68%, and total capital to risk weighted assets ratio was 11.93%.
Total assets as of December 31, 2017 were $1.04 billion, an increase of 10.6% compared to $940.2 million as of December 31, 2016.
Total loans as of December 31, 2017 were $850.9 million, an increase of 13.0% compared to $753.1 million reported at December 31, 2016.
Total deposits as of December 31, 2017 were $861.6 million, an increase of 10.9% compared to $776.6 million as of December 31, 2016. Core checking deposits at December 31, 2017 increased to $400.0 million, up $87.1 million, or 27.8%, from December 31, 2016.
Asset Quality
The Company's non-performing assets at December 31, 2017 were $2.07 million compared to $2.35 million at September 30, 2017 and $1.81 million at December 31, 2016. Non-performing assets to total assets at December 31, 2017 declined to 0.20%, compared to 0.23% at September 30, 2017, and remained relatively unchanged compared to 0.19% at December 31, 2016.
Non-accrual loans decreased to $2.07 million at December 31, 2017, as compared to $2.35 million at September 30, 2017, and increased from $1.55 million at December 31, 2016. There was no OREO at both December 31, 2017 and September 30, 2017, compared to OREO of $259,000 at December 31, 2016.
Troubled debt restructured loan balances amounted to $7.05 million at December 31, 2017, with all but $994,000 performing. This compared to $8.05 million at September 30, 2017 and $8.23 million at December 31, 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 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, 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.
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
Phone: (732) 982-2167
Email: acadmus@tworiverbank.com
TWO RIVER BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months and Twelve Months Ended December 31, 2017 and 2016
(in thousands, except per share data)
| Three Months Ended December 31, | Twelve Months Ended December 31, | | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Interest Income: | |||||||||||||||
| Loans, including fees | $ | 9,438 | $ | 8,463 | $ | 35,801 | $ | 32,798 | |||||||
| Securities: | |||||||||||||||
| Taxable | 273 | 205 | 988 | 776 | |||||||||||
| Tax-exempt | 270 | 253 | 1,101 | 917 | |||||||||||
| Interest-bearing deposits | 93 | 49 | 350 | 133 | |||||||||||
| Total Interest Income | 10,074 | 8,970 | 38,240 | 34,624 | |||||||||||
| Interest Expense: | |||||||||||||||
| Deposits | 1,193 | 1,029 | 4,363 | 3,829 | |||||||||||
| Securities sold under agreements to repurchase | 16 | 17 | 66 | 61 | |||||||||||
| Federal Home Loan Bank ("FHLB") and other borrowings | 171 | 166 | 620 | 618 | |||||||||||
| Subordinated debt | 165 | 164 | 658 | 656 | |||||||||||
| Total Interest Expense | 1,545 | 1,376 | 5,707 | 5,164 | |||||||||||
| Net Interest Income | 8,529 | 7,594 | 32,533 | 29,460 | |||||||||||
| Provision for (Recovery of) Loan Losses | 675 | (345 | ) | 1,530 | 515 | ||||||||||
| Net Interest Income after Provision for (Recovery of) Loan Losses | 7,854 | 7,939 | 31,003 | 28,945 | |||||||||||
| Non-Interest Income: | |||||||||||||||
| Service fees on deposit accounts | 237 | 160 | 772 | 587 | |||||||||||
| Mortgage banking | 325 | 331 | 1,583 | 1,162 | |||||||||||
| Other loan fees | 186 | 299 | 588 | 610 | |||||||||||
| Earnings from investment in bank owned life insurance | 133 | 140 | 544 | 477 | |||||||||||
| Death benefit on bank owned life insurance | - | - | - | 862 | |||||||||||
| Gain on sale of SBA loans | 235 | 293 | 1,052 | 868 | |||||||||||
| Net gain on sale of securities | - | - | - | 72 | |||||||||||
| Other income | 227 | 224 | 920 | 851 | |||||||||||
| Total Non-Interest Income | 1,343 | 1,447 | 5,459 | 5,489 | |||||||||||
| Non-Interest Expenses: | |||||||||||||||
| Salaries and employee benefits | 3,492 | 3,235 | 14,046 | 12,844 | |||||||||||
| Occupancy and equipment | 1,026 | 1,033 | 4,241 | 4,117 | |||||||||||
| Professional | 395 | 310 | 1,497 | 1,198 | |||||||||||
| Insurance | 58 | 56 | 216 | 216 | |||||||||||
| FDIC insurance and assessments | 113 | 88 | 467 | 412 | |||||||||||
| Advertising | 105 | 100 | 450 | 415 | |||||||||||
| Data processing | 147 | 149 | 553 | 554 | |||||||||||
| Outside services fees | 126 | 131 | 473 | 500 | |||||||||||
| Amortization of identifiable intangibles | - | - | - | 9 | |||||||||||
| OREO expenses, impairment and sales, net | 4 | (3 | ) | 48 | (274 | ) | |||||||||
| Loan workout expenses | 59 | (69 | ) | 233 | 73 | ||||||||||
| Other operating | 394 | 330 | 1,718 | 1,411 | |||||||||||
| Total Non-Interest Expenses | 5,919 | 5,360 | 23,942 | 21,475 | |||||||||||
| Income before Income Taxes | 3,278 | 4,026 | 12,520 | 12,959 | |||||||||||
| Income Tax Expense | 2,943 | 1,459 | 6,018 | 4,328 | |||||||||||
| Net Income | $ | 335 | $ | 2,567 | $ | 6,502 | $ | 8,631 | |||||||
| Earnings Per Common Share: | |||||||||||||||
| Basic | $ | 0.04 | $ | 0.31 | $ | 0.78 | $ | 1.04 | |||||||
| Diluted | $ | 0.04 | $ | 0.30 | $ | 0.75 | $ | 1.01 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 8,420 | 8,322 | 8,388 | 8,321 | |||||||||||
| Diluted | 8,673 | 8,565 | 8,658 | 8,530 | |||||||||||
TWO RIVER BANCORP
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except share data)
| December 31, | December 31, | |||||
| 2017 | 2016 | |||||
| ASSETS | ||||||
| Cash and due from banks | $ | 29,575 | $ | 19,844 | ||
| Interest-bearing deposits in bank | 18,644 | 22,233 | ||||
| Cash and cash equivalents | 48,219 | 42,077 | ||||
| Securities available for sale | 31,132 | 34,464 | ||||
| Securities held to maturity | 58,002 | 57,843 | ||||
| Restricted investments, at cost | 5,430 | 4,805 | ||||
| Loans held for sale | 2,581 | 4,537 | ||||
| Loans | 850,874 | 753,092 | ||||
| Allowance for loan losses | (10,668 | ) | (9,565 | ) | ||
| Net loans | 840,206 | 743,527 | ||||
| OREO | - | 259 | ||||
| Bank owned life insurance | 21,573 | 21,029 | ||||
| Premises and equipment, net | 6,239 | 4,662 | ||||
| Accrued interest receivable | 2,554 | 2,234 | ||||
| Goodwill | 18,109 | 18,109 | ||||
| Other assets | 5,753 | 6,665 | ||||
| Total Assets | $ | 1,039,798 | $ | 940,211 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Liabilities: | ||||||
| Deposits: | ||||||
| Non-interest-bearing | $ | 167,297 | $ | 160,104 | ||
| Interest-bearing | 694,260 | 616,463 | ||||
| Total Deposits | 861,557 | 776,567 | ||||
| Securities sold under agreements to repurchase | 27,120 | 19,915 | ||||
| FHLB and other borrowings | 25,800 | 25,300 | ||||
| Subordinated debt | 9,888 | 9,855 | ||||
| Accrued interest payable | 70 | 100 | ||||
| Other liabilities | 8,792 | 7,758 | ||||
| Total Liabilities | 933,227 | 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 – 8,782,124 and 8,677,536 at December 31, 2017 and 2016, respectively | ||||||
| Outstanding – 8,470,030 and 8,365,442 at December 31, 2017 and 2016, respectively | 79,678 | 79,056 | ||||
| Retained earnings | 29,593 | 24,447 | ||||
| Treasury stock, at cost; 312,094 shares at December 31, 2017 and 2016, respectively | (2,396 | ) | (2,396 | ) | ||
| Accumulated other comprehensive loss | (304 | ) | (391 | ) | ||
| Total Shareholders' Equity | 106,571 | 100,716 | ||||
| Total Liabilities and Shareholders’ Equity | $ | 1,039,798 | $ | 940,211 | ||
TWO RIVER BANCORP
Selected Consolidated Financial Data (Unaudited)
Selected Consolidated Earnings Data
(in thousands, except per share data)
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| Dec. 31, | Sept. 30, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||
| Selected Consolidated Earnings Data: | 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||
| Total Interest Income | $ | 10,074 | $ | 9,824 | $ | 8,970 | $ | 38,240 | $ | 34,624 | |||||
| Total Interest Expense | 1,545 | 1,408 | 1,376 | 5,707 | 5,164 | ||||||||||
| Net Interest Income | 8,529 | 8,416 | 7,594 | 32,533 | 29,460 | ||||||||||
| Provision for (Recovery of) Loan Losses | 675 | 255 | (345 | ) | 1,530 | 515 | |||||||||
| Net Interest Income after Provision for (Recovery of) Loan Losses | 7,854 | 8,161 | 7,939 | 31,003 | 28,945 | ||||||||||
| Other Non-Interest Income | 1,343 | 1,453 | 1,447 | 5,459 | 5,489 | ||||||||||
| Other Non-Interest Expenses | 5,919 | 6,175 | 5,360 | 23,942 | 21,475 | ||||||||||
| Income before Income Taxes | 3,278 | 3,439 | 4,026 | 12,520 | 12,959 | ||||||||||
| Income Tax Expense | 2,943 | 1,202 | 1,459 | 6,018 | 4,328 | ||||||||||
| Net Income | $ | 335 | $ | 2,237 | $ | 2,567 | $ | 6,502 | $ | 8,631 | |||||
| Per Common Share Data: | |||||||||||||||
| Basic Earnings | $ | 0.04 | $ | 0.27 | $ | 0.31 | $ | 0.78 | $ | 1.04 | |||||
| Diluted Earnings | $ | 0.04 | $ | 0.26 | $ | 0.30 | $ | 0.75 | $ | 1.01 | |||||
| Book Value | $ | 12.58 | $ | 12.60 | $ | 12.04 | $ | 12.58 | $ | 12.04 | |||||
| Tangible Book Value(1) | $ | 10.44 | $ | 10.46 | $ | 9.88 | $ | 10.44 | $ | 9.88 | |||||
| Average Common Shares Outstanding (in thousands): | |||||||||||||||
| Basic | 8,420 | 8,393 | 8,322 | 8,388 | 8,321 | ||||||||||
| Diluted | 8,673 | 8,656 | 8,565 | 8,658 | 8,530 | ||||||||||
| (1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release. | |||||||||||||||
Selected Period End Balances
(in thousands)
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||
| Total Assets | $ | 1,039,798 | $ | 1,000,245 | $ | 983,099 | $ | 967,073 | $ | 940,211 | |||||
| Investment Securities and Restricted Stock | 94,564 | 92,641 | 92,634 | 94,850 | 97,112 | ||||||||||
| Total Loans | 850,874 | 816,078 | 794,908 | 762,687 | 753,092 | ||||||||||
| Allowance for Loan Losses | (10,668 | ) | (10,223 | ) | (9,953 | ) | (9,567 | ) | (9,565 | ) | |||||
| Goodwill and Other Intangible Assets | 18,109 | 18,109 | 18,109 | 18,109 | 18,109 | ||||||||||
| Total Deposits | 861,557 | 821,872 | 810,725 | 799,705 | 776,567 | ||||||||||
| Repurchase Agreements | 27,120 | 22,576 | 25,823 | 21,437 | 19,915 | ||||||||||
| FHLB and Other Borrowings | 25,800 | 30,300 | 24,300 | 24,300 | 25,300 | ||||||||||
| Subordinated Debt | 9,888 | 9,879 | 9,871 | 9,863 | 9,855 | ||||||||||
| Shareholders' Equity | 106,571 | 106,567 | 104,524 | 102,406 | 100,716 | ||||||||||
| Asset Quality Data (by Quarter) | |||||||||||||||
| (dollars in thousands) | Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||
| Nonaccrual Loans | $ | 2,070 | $ | 2,345 | $ | 2,946 | $ | 1,511 | $ | 1,548 | |||||
| OREO | - | - | 233 | 259 | 259 | ||||||||||
| Total Non-Performing Assets | 2,070 | 2,345 | 3,179 | 1,770 | 1,807 | ||||||||||
| Troubled Debt Restructured Loans: | |||||||||||||||
| Performing | 6,053 | 6,925 | 6,990 | 7,754 | 8,075 | ||||||||||
| Non-Performing | 994 | 1,129 | 960 | 405 | 157 | ||||||||||
| Non-Performing Loans to Total Loans | 0.24 | % | 0.29 | % | 0.37 | % | 0.20 | % | 0.21 | % | |||||
| Non-Performing Assets to Total Assets | 0.20 | % | 0.23 | % | 0.32 | % | 0.18 | % | 0.19 | % | |||||
| Allowance as a % of Loans | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | 1.27 | % | |||||
Capital Ratios
| December 31, 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 | 9.68 | % | 8.85 | % | 9.68 | % | 11.93 | % | 10.33 | % | 8.94 | % | 10.33 | % | 12.76 | % | ||||||||
| Two River Community Bank | 10.66 | % | 9.76 | % | 10.66 | % | 11.82 | % | 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) | December 31, 2017 | December 31, 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 | $ | 28,598 | $ | 93 | 1.29 | % | $ | 37,650 | $ | 49 | 0.52 | % | ||||||
| Investment securities | 93,841 | 543 | 2.31 | % | 89,828 | 458 | 2.04 | % | ||||||||||
| Loans, net of unearned fees(1) (2) | 828,725 | 9,438 | 4.52 | % | 752,067 | 8,463 | 4.48 | % | ||||||||||
| Total Interest-Earning Assets | 951,164 | 10,074 | 4.20 | % | 879,545 | 8,970 | 4.06 | % | ||||||||||
| Non-Interest-Earning Assets: | ||||||||||||||||||
| Allowance for loan losses | (10,326 | ) | (9,749 | ) | ||||||||||||||
| All other assets | 79,802 | 76,546 | ||||||||||||||||
| Total Assets | $ | 1,020,640 | $ | 946,342 | ||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||
| NOW deposits | $ | 215,563 | 276 | 0.51 | % | $ | 151,543 | 158 | 0.41 | % | ||||||||
| Savings deposits | 247,655 | 326 | 0.52 | % | 253,281 | 336 | 0.53 | % | ||||||||||
| Money market deposits | 63,284 | 27 | 0.17 | % | 69,303 | 28 | 0.16 | % | ||||||||||
| Time deposits | 147,035 | 564 | 1.52 | % | 141,336 | 507 | 1.43 | % | ||||||||||
| Securities sold under agreements to repurchase | 22,103 | 16 | 0.29 | % | 21,085 | 17 | 0.32 | % | ||||||||||
| FHLB and other borrowings | 31,199 | 171 | 2.17 | % | 34,213 | 166 | 1.93 | % | ||||||||||
| Subordinated debt | 9,885 | 165 | 6.68 | % | 9,852 | 164 | 6.66 | % | ||||||||||
| Total Interest-Bearing Liabilities | 736,724 | 1,545 | 0.83 | % | 680,613 | 1,376 | 0.80 | % | ||||||||||
| Non-Interest-Bearing Liabilities: | ||||||||||||||||||
| Demand deposits | 167,945 | 157,511 | ||||||||||||||||
| Other liabilities | 8,593 | 8,631 | ||||||||||||||||
| Total Non-Interest-Bearing Liabilities | 176,538 | 166,142 | ||||||||||||||||
| Stockholders’ Equity | 107,378 | 99,587 | ||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 1,020,640 | $ | 946,342 | ||||||||||||||
| NET INTEREST INCOME | $ | 8,529 | $ | 7,594 | ||||||||||||||
| NET INTEREST SPREAD(3) | 3.37 | % | 3.26 | % | ||||||||||||||
| NET INTEREST MARGIN(4) | 3.56 | % | 3.43 | % | ||||||||||||||
| (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
| Twelve Months Ended | Twelve Months Ended | |||||||||||||||||
| (dollars in thousands) | December 31, 2017 | December 31, 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 | $ | 33,255 | $ | 350 | 1.05 | % | $ | 26,241 | $ | 133 | 0.51 | % | ||||||
| Investment securities | 94,052 | 2,089 | 2.22 | % | 84,227 | 1,693 | 2.01 | % | ||||||||||
| Loans, net of unearned fees(1) (2) | 793,671 | 35,801 | 4.51 | % | 724,511 | 32,798 | 4.53 | % | ||||||||||
| Total Interest-Earning Assets | 920,978 | 38,240 | 4.15 | % | 834,979 | 34,624 | 4.15 | % | ||||||||||
| Non-Interest Earning Assets: | ||||||||||||||||||
| Allowance for loan losses | (9,933 | ) | (9,275 | ) | ||||||||||||||
| All other assets | 79,850 | 77,181 | ||||||||||||||||
| Total Assets | $ | 990,895 | $ | 902,885 | ||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||
| NOW deposits | $ | 201,490 | 958 | 0.48 | % | $ | 151,360 | 649 | 0.43 | % | ||||||||
| Savings deposits | 256,222 | 1,330 | 0.52 | % | 233,514 | 1,165 | 0.50 | % | ||||||||||
| Money market deposits | 63,093 | 107 | 0.17 | % | 72,721 | 119 | 0.16 | % | ||||||||||
| Time deposits | 135,326 | 1,968 | 1.45 | % | 133,842 | 1,896 | 1.42 | % | ||||||||||
| Securities sold under agreements to repurchase | 22,066 | 66 | 0.30 | % | 19,309 | 61 | 0.32 | % | ||||||||||
| FHLB and other borrowings | 26,544 | 620 | 2.34 | % | 27,304 | 618 | 2.26 | % | ||||||||||
| Subordinated debt | 9,872 | 658 | 6.67 | % | 9,840 | 656 | 6.67 | % | ||||||||||
| Total Interest-Bearing Liabilities | 714,613 | 5,707 | 0.80 | % | 647,890 | 5,164 | 0.80 | % | ||||||||||
| Non-Interest-Bearing Liabilities: | ||||||||||||||||||
| Demand deposits | 163,707 | 150,495 | ||||||||||||||||
| Other liabilities | 8,003 | 7,919 | ||||||||||||||||
| Total Non-Interest-Bearing Liabilities | 171,710 | 158,414 | ||||||||||||||||
| Shareholders’ Equity | 104,572 | 96,581 | ||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 990,895 | $ | 902,885 | ||||||||||||||
| NET INTEREST INCOME | $ | 32,533 | $ | 29,460 | ||||||||||||||
| NET INTEREST SPREAD(3) | 3.35 | % | 3.35 | % | ||||||||||||||
| NET INTEREST MARGIN(4) | 3.53 | % | 3.53 | % | ||||||||||||||
| (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 | As of and for the Twelve Months Ended | ||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| Total shareholders' equity | $ | 106,571 | $ | 106,567 | $ | 104,524 | $ | 102,406 | $ | 100,716 | $ | 106,571 | $ | 100,716 | |||||||
| Less: goodwill and other tangibles | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,109 | ) | |||||||
| Tangible common shareholders’ equity | $ | 88,462 | $ | 88,458 | $ | 86,415 | $ | 84,297 | $ | 82,607 | $ | 88,462 | $ | 82,607 | |||||||
| Common shares outstanding | 8,470 | 8,454 | 8,429 | 8,389 | 8,365 | 8,470 | 8,365 | ||||||||||||||
| Book value per common share | $ | 12.58 | $ | 12.60 | $ | 12.40 | $ | 12.21 | $ | 12.04 | $ | 12.58 | $ | 12.04 | |||||||
| Book value per common share | $ | 12.58 | $ | 12.60 | $ | 12.40 | $ | 12.21 | $ | 12.04 | $ | 12.58 | $ | 12.04 | |||||||
| Effect of intangible assets | (2.14 | ) | (2.14 | ) | (2.15 | ) | (2.16 | ) | (2.16 | ) | (2.14 | ) | (2.16 | ) | |||||||
| Tangible book value per common share | $ | 10.44 | $ | 10.46 | $ | 10.25 | $ | 10.05 | $ | 9.88 | $ | 10.44 | $ | 9.88 | |||||||
| Return on average assets | 0.13 | % | 0.89 | % | 0.87 | % | 0.76 | % | 1.08 | % | 0.66 | % | 0.96 | % | |||||||
| Effect of average intangible assets | - | 0.02 | % | 0.01 | % | 0.01 | % | 0.02 | % | 0.01 | % | 0.02 | % | ||||||||
| Return on average tangible assets | 0.13 | % | 0.91 | % | 0.88 | % | 0.77 | % | 1.10 | % | 0.67 | % | 0.98 | % | |||||||
| Return on average equity | 1.24 | % | 8.39 | % | 8.26 | % | 7.18 | % | 10.25 | % | 6.22 | % | 8.94 | % | |||||||
| Effect of average intangible assets | 0.25 | % | 1.74 | % | 1.75 | % | 1.56 | % | 2.28 | % | 1.30 | % | 2.06 | % | |||||||
| Return on average tangible equity | 1.49 | % | 10.13 | % | 10.01 | % | 8.74 | % | 12.53 | % | 7.52 | % | 11.00 | % | |||||||