TINTON FALLS, N.J., Jan. 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 fourth quarter and twelve months ended December 31, 2016. All share and per share data for all referenced reporting periods have been adjusted for a 5% stock dividend declared on January 19, 2017, payable on February 28, 2017 to shareholders of record as of February 9, 2017.
Operating and Financial Highlights
Fourth Quarter 2016
- Net income available to common shareholders increased 47.6% to $2.57 million, or $0.30 per diluted share, from $1.74 million, or $0.20 per diluted share, in the corresponding prior year’s quarter. Several positive factors contributed to the fourth quarter 2016 financial results, including a reverse loan loss provision recorded during the period.
- Non-interest income increased 47.1% to $1.45 million compared to the same period in 2015, as a result of a 94.7% increase in mortgage banking revenue, higher gains on the sale of SBA loans and other loan fees.
- Return on average assets (ROAA) was 1.08% for the fourth quarter of 2016, compared to 0.81% for the same prior year’s quarter.
- Return on average equity (ROAE) was 10.25% for the three months ended December 31, 2016, and 7.14% for the same prior year’s quarter.
Annual 2016
- Net income available to common shareholders increased 37.2% to a Company record $8.63 million, or $1.01 per diluted share, from $6.29 million, or $0.74 per diluted share, in the corresponding prior year.
- Non-interest income increased 55.2% to $5.49 million compared to the prior year, largely due to a 48.4% increase in mortgage banking revenue, higher gains on the sale of SBA loans, and a tax-free Bank Owned Life Insurance (“BOLI”) death benefit of $862,000.
- Return on average assets (ROAA) was 0.96% for the year ended December 31, 2016, compared to 0.76% for the previous year.
- Return on average equity (ROAE) was 8.94% for the year ended December 31, 2016, compared to 6.59% in the prior year.
- Non-performing assets to total assets decreased to 0.19% at December 31, 2016, from 0.20% at September 30, 2016 and 0.42% at December 31, 2015.
- Tangible book value per share was $9.88 at December 31, 2016, compared to $9.63 at September 30, 2016 and $9.00 at December 31, 2015.
- Total assets at December 31, 2016 were a Company record $940.2 million, compared to $909.2 million at September 30, 2016 and $863.7 million at December 31, 2015.
- Total loans as of December 31, 2016 were $753.1 million, an increase of $59.9 million, or 8.6%, from $693.2 million at December 31, 2015.
- Total deposits as of December 31, 2016 were $776.6 million, an increase of $68.2 million, or 9.6%, compared with $708.4 million as of December 31, 2015.
Management Commentary
William D. Moss, President and CEO, stated, “The Company reported excellent results for the year, which included record net income driven by improvements in non-interest income while continuing our core growth. We were pleased to maintain a stable expense structure while simultaneously achieving loan growth of 8.6% and deposit growth of 9.6% during 2016. This is largely a result of our team continuing to drive loan production in our core markets. Loan growth was relatively flat during the fourth quarter as originations were offset by higher than expected payoffs, which included approximately $4.1 million of adversely classified credits. The fourth quarter was also positively impacted by a recovery of a previously charged off credit, along with the collection of several loan prepayments.”
Mr. Moss continued, “Over the last two years, one of our key strategic initiatives has been to improve non-interest income by proactively expanding residential mortgage and SBA lending. The Bank achieved a 48.4% increase in residential mortgage banking fees for the year, and increased its gains on the sale of SBA loans by 54.7%. The Bank is achieving this organic growth while steadily improving operating efficiencies, all of which will help to drive further increases in net income.”
Dividend Information
On January 19, 2017, the Company’s Board of Directors announced that it declared a quarterly cash dividend of $0.04 per share, payable on February 27, 2017 to shareholders of record as of the close of business on February 8, 2017. This marks the 16th consecutive quarterly cash dividend.
In addition, the Board of Directors declared a 5% stock dividend payable on February 28, 2017 to shareholders of record as of February 9, 2017. The dividend will increase the number of outstanding shares of the Company by approximately 399,000 bringing the total common shares outstanding to approximately 8,365,000.
Key Quarterly Performance Metrics
| 4th Qtr. | 3rd Qtr. | 2nd Qtr. | 1st Qtr. | 4th Qtr. | 12 Mo. Ended | 12 Mo. Ended | ||||||||||||||||||||||
| 2016 | 2016 | 2016 | 2016 | 2015 | 12/31/2016 | 12/31/2015 | ||||||||||||||||||||||
| Net Income (in thousands) | $ | 2,567 | $ | 2,644 | $ | 1,727 | $ | 1,693 | $ | 1,751 | $ | 8,631 | $ | 6,347 | ||||||||||||||
| Net Income Available to Common Shareholders (in thousands) | $ | 2,567 | $ | 2,644 | $ | 1,727 | $ | 1,693 | $ | 1,739 | $ | 8,631 | $ | 6,290 | ||||||||||||||
| Earnings per Common Share – Diluted(1) | $ | 0.30 | $ | 0.31 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 1.01 | $ | 0.74 | ||||||||||||||
| Return on Average Assets | 1.08 | % | 1.16 | % | 0.78 | % | 0.78 | % | 0.81 | % | 0.96 | % | 0.76 | % | ||||||||||||||
| Return on Average Tangible Assets(2) | 1.10 | % | 1.19 | % | 0.80 | % | 0.80 | % | 0.83 | % | 0.98 | % | 0.78 | % | ||||||||||||||
| Return on Average Equity | 10.25 | % | 10.81 | % | 7.28 | % | 7.25 | % | 7.14 | % | 8.94 | % | 6.59 | % | ||||||||||||||
| Return on Average Tangible Equity(2) | 12.53 | % | 13.29 | % | 8.98 | % | 8.98 | % | 8.78 | % | 11.00 | % | 8.12 | % | ||||||||||||||
| Net Interest Margin | 3.43 | % | 3.55 | % | 3.57 | % | 3.57 | % | 3.65 | % | 3.53 | % | 3.68 | % | ||||||||||||||
| Non-Performing Assets to Total Assets | 0.19 | % | 0.20 | % | 0.22 | % | 0.22 | % | 0.42 | % | 0.19 | % | 0.42 | % | ||||||||||||||
| Allowance as a % of Loans | 1.27 | % | 1.25 | % | 1.30 | % | 1.27 | % | 1.26 | % | 1.27 | % | 1.26 | % | ||||||||||||||
| (1) Per share data for all referenced reporting periods have been adjusted for a 5% stock dividend declared on January 19, 2017, payable on February 28, 2017 to shareholders of record as of February 9, 2017. | ||||||||||||||||||||||||||||
| (2) 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, 2016 and December 31, 2015 are as follows:
| (In Thousands) | ||||||||
| December 31, 2016 | December 31, 2015 | |||||||
| Commercial and industrial | $ | 93,697 | $ | 100,154 | ||||
| Real estate – construction | 111,914 | 104,231 | ||||||
| Real estate – commercial | 460,685 | 422,665 | ||||||
| Real estate – residential | 59,065 | 39,524 | ||||||
| Consumer | 28,279 | 27,136 | ||||||
| Unearned fees | (548 | ) | (560 | ) | ||||
| 753,092 | 693,150 | |||||||
| Allowance for loan losses | (9,565 | ) | (8,713 | ) | ||||
| Net Loans | $ | 743,527 | $ | 684,437 | ||||
Deposit Composition
The components of the Company’s deposits at December 31, 2016 and December 31, 2015 are as follows:
| (In Thousands) | ||||||||
| December 31, 2016 | December 31, 2015 | |||||||
| Non-interest bearing | $ | 160,104 | $ | 144,627 | ||||
| NOW accounts | 152,771 | 148,373 | ||||||
| Savings deposits | 261,438 | 222,091 | ||||||
| Money market deposits | 62,495 | 75,323 | ||||||
| Listed service CD’s | 47,648 | 33,261 | ||||||
| Time deposits / IRA | 56,489 | 46,902 | ||||||
| Wholesale deposits | 35,622 | 37,859 | ||||||
| Total Deposits | $ | 776,567 | $ | 708,436 | ||||
2016 Fourth Quarter and Year End Financial Review
Net Income
Net income available to common shareholders for the three months ended December 31, 2016 was $2.57 million, or $0.30 per diluted common share, compared to $1.74 million, or $0.20 per diluted common share, for the same period last year, an increase of 47.6%. The increase was largely due to both higher net interest income and non-interest income, coupled with a $345,000 reverse loan loss provision due to the recovery of a loan charged off in the third quarter of 2016. The Company also recaptured $144,000 of expenses related to this credit, which lowered loan workout expenses. On a linked quarter basis, fourth quarter 2016 net income available to common shareholders decreased 2.9% from the third quarter of 2016, largely due to the previously noted BOLI death benefit of $862,000 received in the prior quarter.
Net income available to common shareholders for the year ended December 31, 2016 increased 37.2% to $8.63 million, or $1.01 per diluted common share, compared to $6.29 million, or $0.74 per diluted common share, in the prior year.
Net Interest Income
Net interest income for the quarter ended December 31, 2016 was $7.59 million, an increase of 4.2% compared to $7.29 million in the corresponding prior year period. This increase was largely due to an increase of $87.1 million, or 11.0%, in average interest earning assets, primarily attributable to growth in the loan portfolio. On a linked quarter basis, net interest income increased $125,000, or 1.7%, from $7.47 million.
For the year ended December 31, 2016, net interest income increased 4.3% to $29.5 million from $28.2 million in the prior year.
Net Interest Margin
The Company reported a net interest margin of 3.43% for the fourth quarter of 2016, compared to 3.55% in the third quarter of 2016 and 3.65% reported for the fourth quarter of 2015. The margin decline from both prior quarters was primarily due to a higher average cash position resulting from an increase in average deposits. Additionally, the interest expense associated with the Company’s $10 million subordinated debenture placement, which funded in December 2015, accounted for approximately 8 basis points of the contraction when compared to the prior year period. The subordinated debentures have a maturity date of December 31, 2025 with a current coupon interest rate of 6.25%.
Net interest margin for the year ended December 31, 2016 was 3.53%, compared to 3.68% in the prior year, due mainly to the associated interest expense on the subordinated debenture placement.
Non-Interest Income
Non-interest income for the quarter ended December 31, 2016 totaled $1.45 million, an increase of $463,000, or 47.1%, compared to the same period in 2015. The Company reported higher gains from the sale of SBA loans and other loan fees, primarily due to higher loan prepayment fees. Residential mortgage banking revenue was $331,000 during the quarter, an increase of 94.7% compared to $170,000 in the prior year period.
On a linked quarter basis, non-interest income decreased by $536,000 from the third quarter of 2016, mainly due to the previously noted BOLI death benefit of $862,000. Residential mortgage banking revenue increased $15,000, or 4.7%, from $316,000 during the third quarter of 2016, while other loan fees increased by $111,000 due mainly to higher loan prepayment fees. Gains on the sale of SBA loans increased $177,000, or 152.6%, from $116,000 during the third quarter of 2016 due to the timing of loan closings.
For the year ended December 31, 2016, non-interest income increased $1.95 million, or 55.2%, to $5.49 million from the prior year.
Non-Interest Expense
Non-interest expense for the quarter ended December 31, 2016 totaled $5.36 million, a decrease of $149,000 from the $5.51 million reported in same period in 2015, primarily due to lower loan workout expenses resulting from the recapture of $144,000 of expenses related to a credit previously charged off. On a linked quarter basis, non-interest expense remained unchanged.
For the year ended December 31, 2016, non-interest expense increased $120,000, or 0.6%, to $21.5 million compared to the prior year.
Provision for Loan Losses
During the quarter, the Company reported a $345,000 reverse loan loss provision, compared to a loan loss provision of $90,000 in the same prior year period. The benefit to the Company was largely the result of a full recovery from one commercial loan where the underlying collateral value had been previously impaired by an environmental issue, which the Company fully charged off during the third quarter.
For the year ended December 31, 2016, a provision of $515,000 was expensed, compared to $490,000 for the prior year. The Company had $337,000 of net loan recoveries during 2016, compared to $154,000 in net loan recoveries in the prior year.
The Bank continues to be proactive in identifying troubled credits and to record charge-offs promptly based on current collateral values and cash flows, while maintaining an adequate allowance for loan losses. The Company closely monitors local and regional real estate markets and other risk factors in its loan portfolio.
As of December 31, 2016, the Company's allowance for loan losses was $9.57 million, compared to $8.71 million as of December 31, 2015. The loss allowance as a percentage of total loans was 1.27% at December 31, 2016 compared to 1.26% at December 31, 2015.
Financial Condition / Balance Sheet
At December 31, 2016, 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 8.94%, common equity Tier 1 to risk weighted assets ratio was 10.33%, Tier 1 capital to risk weighted assets ratio was 10.33%, and total capital to risk weighted assets ratio was 12.76%.
Total assets as of December 31, 2016 were $940.2 million, an increase of 8.9% compared to $863.7 million as of December 31, 2015.
Total loans as of December 31, 2016 were $753.1 million, an increase of 8.6% compared to $693.2 million reported at December 31, 2015.
Total deposits as of December 31, 2016 were $776.6 million, an increase of 9.6% compared to $708.4 million as of December 31, 2015. Core checking deposits at December 31, 2016 increased to $312.9 million compared to $293.0 million at year-end 2015. This growth was primarily driven by the focus on building core checking account deposit relationships.
Asset Quality
The Company's non-performing assets at December 31, 2016 decreased to $1.81 million as compared to $1.85 million at September 30, 2016 and $3.59 million at December 31, 2015. Non-performing assets to total assets at December 31, 2016 declined to 0.19% compared to 0.20% at September 30, 2016 and 0.42% at December 31, 2015.
Non-accrual loans decreased to $1.55 million at December 31, 2016, compared to $1.59 million at September 30, 2016 and $3.18 million at December 31, 2015. OREO was $259,000 at December 31, 2016, unchanged from September 30, 2016 and a decline from $411,000 at December 31, 2015.
Troubled debt restructured loan balances amounted to $8.23 million at December 31, 2016, with all but $157,000 performing. This compared to $8.52 million at September 30, 2016 and $10.84 million at December 31, 2015.
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, 2015. 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 Twelve Months Ended December 31, 2016 and 2015 | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 8,463 | $ | 7,904 | $ | 32,798 | $ | 30,624 | |||||||
| Securities: | |||||||||||||||
| Taxable | 205 | 175 | 776 | 782 | |||||||||||
| Tax-exempt | 253 | 211 | 917 | 623 | |||||||||||
| Interest bearing deposits | 49 | 16 | 133 | 74 | |||||||||||
| Total Interest Income | 8,970 | 8,306 | 34,624 | 32,103 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 1,029 | 816 | 3,829 | 3,141 | |||||||||||
| Securities sold under agreements to repurchase | 17 | 17 | 61 | 68 | |||||||||||
| Federal Home Loan Bank (“FHLB”) and other borrowings | 166 | 153 | 618 | 621 | |||||||||||
| Subordinated debt | 164 | 33 | 656 | 33 | |||||||||||
| Total Interest Expense | 1,376 | 1,019 | 5,164 | 3,863 | |||||||||||
| Net Interest Income | 7,594 | 7,287 | 29,460 | 28,240 | |||||||||||
| PROVISION FOR LOAN LOSSES | (345 | ) | 90 | 515 | 490 | ||||||||||
| Net Interest Income after Provision for Loan Losses | 7,939 | 7,197 | 28,945 | 27,750 | |||||||||||
| NON-INTEREST INCOME: | |||||||||||||||
| Service fees on deposit accounts | 160 | 145 | 587 | 578 | |||||||||||
| Mortgage banking | 331 | 170 | 1,162 | 783 | |||||||||||
| Other loan fees | 299 | 102 | 610 | 214 | |||||||||||
| Earnings from investment in bank owned life insurance | 140 | 110 | 477 | 445 | |||||||||||
| Death benefit on bank owned life insurance | - | - | 862 | - | |||||||||||
| Gain on sale of SBA loans | 293 | 252 | 868 | 561 | |||||||||||
| Net realized gain on sale of securities | - | - | 72 | 37 | |||||||||||
| Gain on sale of premises and equipment | - | - | - | 208 | |||||||||||
| Other income | 224 | 205 | 851 | 711 | |||||||||||
| Total Non-Interest Income | 1,447 | 984 | 5,489 | 3,537 | |||||||||||
| NON-INTEREST EXPENSES: | |||||||||||||||
| Salaries and employee benefits | 3,235 | 3,168 | 12,844 | 12,486 | |||||||||||
| Occupancy and equipment | 1,033 | 1,002 | 4,117 | 3,942 | |||||||||||
| Professional | 310 | 264 | 1,198 | 982 | |||||||||||
| Insurance | 56 | 19 | 216 | 268 | |||||||||||
| FDIC insurance and assessments | 88 | 109 | 412 | 433 | |||||||||||
| Advertising | 100 | 38 | 415 | 403 | |||||||||||
| Data processing | 149 | 123 | 554 | 475 | |||||||||||
| Outside services fees | 131 | 123 | 500 | 499 | |||||||||||
| Amortization of identifiable intangibles | - | 10 | 9 | 48 | |||||||||||
| OREO expenses, impairment and sales, net | (3 | ) | 91 | (274 | ) | (70 | ) | ||||||||
| Loan workout expenses | (69 | ) | 153 | 73 | 431 | ||||||||||
| Other operating | 330 | 409 | 1,411 | 1,458 | |||||||||||
| Total Non-Interest Expenses | 5,360 | 5,509 | 21,475 | 21,355 | |||||||||||
| Income before Income Taxes | 4,026 | 2,672 | 12,959 | 9,932 | |||||||||||
| INCOME TAX EXPENSE | 1,459 | 921 | 4,328 | 3,585 | |||||||||||
| Net Income | 2,567 | 1,751 | 8,631 | 6,347 | |||||||||||
| Preferred stock dividend | - | (12 | ) | - | (57 | ) | |||||||||
| Net Income Available to Common Shareholders | $ | 2,567 | $ | 1,739 | $ | 8,631 | $ | 6,290 | |||||||
| EARNINGS PER COMMON SHARE(1): | |||||||||||||||
| Basic | $ | 0.31 | $ | 0.21 | $ | 1.04 | $ | 0.76 | |||||||
| Diluted | $ | 0.30 | $ | 0.20 | $ | 1.01 | $ | 0.74 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 8,322 | 8,298 | 8,321 | 8,304 | |||||||||||
| Diluted | 8,565 | 8,505 | 8,530 | 8,507 | |||||||||||
(1) All share and per share data for all referenced reporting periods have been adjusted for a 5% stock dividend declared on January 19, 2017, payable on February 28, 2017 to shareholders of record as of February 9, 2017.
| TWO RIVER BANCORP | ||||||
| CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||
| (in thousands, except share data) | ||||||
| December 31, | December 31, | |||||
| 2016 | 2015 | |||||
| ASSETS | ||||||
| Cash and due from banks | $ | 19,844 | $ | 21,566 | ||
| Interest bearing deposits in bank | 22,233 | 25,161 | ||||
| Cash and cash equivalents | 42,077 | 46,727 | ||||
| Securities available for sale | 34,464 | 33,530 | ||||
| Securities held to maturity | 57,843 | 43,167 | ||||
| Restricted investments, at cost | 4,805 | 3,596 | ||||
| Loans held for sale | 4,537 | 3,050 | ||||
| Loans | 753,092 | 693,150 | ||||
| Allowance for loan losses | (9,565 | ) | (8,713 | ) | ||
| Net loans | 743,527 | 684,437 | ||||
| OREO | 259 | 411 | ||||
| Bank owned life insurance | 21,029 | 17,294 | ||||
| Premises and equipment, net | 4,662 | 5,083 | ||||
| Accrued interest receivable | 2,234 | 1,912 | ||||
| Goodwill | 18,109 | 18,109 | ||||
| Other intangible assets | - | 9 | ||||
| Other assets | 6,665 | 6,371 | ||||
| TOTAL ASSETS | $ | 940,211 | $ | 863,696 | ||
| LIABILITIES | ||||||
| Deposits: | ||||||
| Non-interest bearing | $ | 160,104 | $ | 144,627 | ||
| Interest bearing | 616,463 | 563,809 | ||||
| Total Deposits | 776,567 | 708,436 | ||||
| Securities sold under agreements to repurchase | 19,915 | 19,545 | ||||
| FHLB and other borrowings | 25,300 | 26,500 | ||||
| Subordinated debt | 9,855 | 9,824 | ||||
| Accrued interest payable | 100 | 118 | ||||
| Other liabilities | 7,758 | 6,271 | ||||
| Total Liabilities | 839,495 | 770,694 | ||||
| SHAREHOLDERS' EQUITY(1) | ||||||
| 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 – 8,676,276 and 8,213,196 at December 31, 2016 and 2015, respectively | ||||||
| Outstanding – 8,364,182 and 7,929,196 at December 31, 2016 and 2015, respectively | 79,038 | 72,890 | ||||
| Retained earnings | 24,465 | 22,759 | ||||
| Treasury stock, at cost; 312,094 shares and 284,000 shares at December 31, 2016 and 2015, respectively | (2,396 | ) | (2,248 | ) | ||
| Accumulated other comprehensive loss | (391 | ) | (399 | ) | ||
| Total Shareholders' Equity | 100,716 | 93,002 | ||||
| TOTAL LIABILITIES and SHAREHOLDERS’ EQUITY | $ | 940,211 | $ | 863,696 | ||
(1) Outstanding shares at December 31, 2016 have been adjusted for a 5% stock dividend declared on January 19, 2017, payable on February 28, 2017 to shareholders of record as of February 9, 2017.
| 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: | 2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||
| Total Interest Income | $ | 8,970 | $ | 8,777 | $ | 8,306 | $ | 34,624 | $ | 32,103 | |||||
| Total Interest Expense | 1,376 | 1,308 | 1,019 | 5,164 | 3,863 | ||||||||||
| Net Interest Income | 7,594 | 7,469 | 7,287 | 29,460 | 28,240 | ||||||||||
| Provision for Loan Losses | (345 | ) | 470 | 90 | 515 | 490 | |||||||||
| Net Interest Income after Provision for Loan Losses | 7,939 | 6,999 | 7,197 | 28,945 | 27,750 | ||||||||||
| Other Non-Interest Income | 1,447 | 1,983 | 984 | 5,489 | 3,537 | ||||||||||
| Other Non-Interest Expenses | 5,360 | 5,339 | 5,509 | 21,475 | 21,355 | ||||||||||
| Income before Income Taxes | 4,026 | 3,643 | 2,672 | 12,959 | 9,932 | ||||||||||
| Income Tax Expense | 1,459 | 999 | 921 | 4,328 | 3,585 | ||||||||||
| Net Income | 2,567 | 2,644 | 1,751 | 8,631 | 6,347 | ||||||||||
| Preferred Stock Dividend | - | - | (12 | ) | - | (57 | ) | ||||||||
| Net Income Available to Common Shareholders | $ | 2,567 | $ | 2,644 | $ | 1,739 | $ | 8,631 | $ | 6,290 | |||||
| Per Common Share Data(1): | |||||||||||||||
| Basic Earnings | $ | 0.31 | $ | 0.32 | $ | 0.21 | $ | 1.04 | $ | 0.76 | |||||
| Diluted Earnings | $ | 0.30 | $ | 0.31 | $ | 0.20 | $ | 1.01 | $ | 0.74 | |||||
| Book Value | $ | 12.04 | $ | 11.80 | $ | 11.17 | $ | 12.04 | $ | 11.17 | |||||
| Tangible Book Value(2) | $ | 9.88 | $ | 9.63 | $ | 9.00 | $ | 9.88 | $ | 9.00 | |||||
| Average Common Shares Outstanding (in thousands): | |||||||||||||||
| Basic | 8,322 | 8,322 | 8,298 | 8,321 | 8,304 | ||||||||||
| Diluted | 8,565 | 8,538 | 8,505 | 8,530 | 8,507 | ||||||||||
(1) All share and per share data for all referenced reporting periods have been adjusted for a 5% stock dividend declared on January 19, 2017, payable on February 28, 2017 to shareholders of record as of February 9, 2017.
(2) 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, | |||||||||||
| 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||
| Total Assets | $ | 940,211 | $ | 909,170 | $ | 884,700 | $ | 881,857 | $ | 863,696 | |||||
| Investment Securities and Restricted Stock | 97,112 | 82,677 | 84,246 | 83,376 | 80,293 | ||||||||||
| Total Loans | 753,092 | 753,982 | 726,414 | 704,401 | 693,150 | ||||||||||
| Allowance for Loan Losses | (9,565 | ) | (9,452 | ) | (9,418 | ) | (8,963 | ) | (8,713 | ) | |||||
| Goodwill and Other Intangible Assets | 18,109 | 18,109 | 18,109 | 18,109 | 18,118 | ||||||||||
| Total Deposits | 776,567 | 739,247 | 726,264 | 727,104 | 708,436 | ||||||||||
| Repurchase Agreements | 19,915 | 18,645 | 21,683 | 20,132 | 19,545 | ||||||||||
| FHLB and Other Borrowings | 25,300 | 35,300 | 23,800 | 23,800 | 26,500 | ||||||||||
| Subordinated Debt | 9,855 | 9,847 | 9,839 | 9,831 | 9,824 | ||||||||||
| Shareholders' Equity | 100,716 | 98,594 | 96,293 | 94,613 | 93,002 | ||||||||||
| Asset Quality Data (by Quarter) | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | |||||||||||
| 2016 | 2016 | 2016 | 2016 | 2015 | |||||||||||
| Nonaccrual Loans | $ | 1,548 | $ | 1,587 | $ | 1,697 | $ | 1,723 | $ | 3,178 | |||||
| OREO | 259 | 259 | 259 | 259 | 411 | ||||||||||
| Total Non-Performing Assets | 1,807 | 1,846 | 1,956 | 1,982 | 3,589 | ||||||||||
| Troubled Debt Restructured Loans: | |||||||||||||||
| Performing | 8,075 | 8,366 | 8,492 | 8,920 | 9,289 | ||||||||||
| Non-Performing | 157 | 157 | 158 | 161 | 1,552 | ||||||||||
| Non-Performing Loans to Total Loans | 0.21 | % | 0.21 | % | 0.23 | % | 0.24 | % | 0.46 | % | |||||
| Non-Performing Assets to Total Assets | 0.19 | % | 0.20 | % | 0.22 | % | 0.22 | % | 0.42 | % | |||||
| Allowance as a % of Loans | 1.27 | % | 1.25 | % | 1.30 | % | 1.27 | % | 1.26 | % | |||||
| Capital Ratios | |||||||||||||||||||||||||||||
| December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||||||||
| 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 | 10.33 | % | 8.94 | % | 10.33 | % | 12.76 | % | 10.13 | % | 8.97 | % | 10.13 | % | 12.65 | % | |||||||||||||
| Two River Community Bank | 11.49 | % | 9.95 | % | 11.49 | % | 12.68 | % | 11.39 | % | 10.09 | % | 11.39 | % | 12.56 | % | |||||||||||||
| "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, 2016 | December 31, 2015 | ||||||||||||||||
| 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 | $ | 37,650 | $ | 49 | 0.52 | % | $ | 22,341 | $ | 16 | 0.28 | % | ||||||
| Investment securities | 89,828 | 458 | 2.04 | % | 81,616 | 386 | 1.89 | % | ||||||||||
| Loans, net of unearned fees(1) (2) | 752,067 | 8,463 | 4.48 | % | 688,507 | 7,904 | 4.55 | % | ||||||||||
| Total Interest Earning Assets | 879,545 | 8,970 | 4.06 | % | 792,464 | 8,306 | 4.16 | % | ||||||||||
| Non-Interest Earning Assets: | ||||||||||||||||||
| Allowance for loan losses | (9,749 | ) | (8,664 | ) | ||||||||||||||
| All other assets | 76,546 | 73,634 | ||||||||||||||||
| Total Assets | $ | 946,342 | $ | 857,434 | ||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||
| NOW deposits | $ | 151,543 | 158 | 0.41 | % | $ | 143,624 | 149 | 0.41 | % | ||||||||
| Savings deposits | 253,281 | 336 | 0.53 | % | 226,306 | 278 | 0.49 | % | ||||||||||
| Money market deposits | 69,303 | 28 | 0.16 | % | 73,159 | 30 | 0.16 | % | ||||||||||
| Time deposits | 141,336 | 507 | 1.43 | % | 106,992 | 359 | 1.33 | % | ||||||||||
| Securities sold under agreements to repurchase | 21,085 | 17 | 0.32 | % | 21,272 | 17 | 0.32 | % | ||||||||||
| FHLB and other borrowings | 34,213 | 166 | 1.93 | % | 26,501 | 153 | 2.29 | % | ||||||||||
| Subordinated debt | 9,852 | 164 | 6.66 | % | 1,922 | 33 | 6.75 | % | ||||||||||
| Total Interest Bearing Liabilities | 680,613 | 1,376 | 0.80 | % | 599,776 | 1,019 | 0.67 | % | ||||||||||
| Non-Interest Bearing Liabilities: | ||||||||||||||||||
| Demand deposits | 157,511 | 154,018 | ||||||||||||||||
| Other liabilities | 8,631 | 6,410 | ||||||||||||||||
| Total Non-Interest Bearing Liabilities | 166,142 | 160,428 | ||||||||||||||||
| Stockholders’ Equity | 99,587 | 97,230 | ||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 946,342 | $ | 857,434 | ||||||||||||||
| NET INTEREST INCOME | $ | 7,594 | $ | 7,287 | ||||||||||||||
| NET INTEREST SPREAD(3) | 3.26 | % | 3.49 | % | ||||||||||||||
| NET INTEREST MARGIN(4) | 3.43 | % | 3.65 | % | ||||||||||||||
(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, 2016 | December 31, 2015 | ||||||||||||||||
| 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 | $ | 26,241 | $ | 133 | 0.51 | % | $ | 28,633 | $ | 74 | 0.26 | % | ||||||
| Investment securities | 84,227 | 1,693 | 2.01 | % | 77,525 | 1,405 | 1.81 | % | ||||||||||
| Loans, net of unearned fees(1) (2) | 724,511 | 32,798 | 4.53 | % | 661,817 | 30,624 | 4.63 | % | ||||||||||
| Total Interest Earning Assets | 834,979 | 34,624 | 4.15 | % | 767,975 | 32,103 | 4.18 | % | ||||||||||
| Non-Interest Earning Assets: | ||||||||||||||||||
| Allowance for loan losses | (9,275 | ) | (8,311 | ) | ||||||||||||||
| All other assets | 77,181 | 72,744 | ||||||||||||||||
| Total Assets | $ | 902,885 | $ | 832,408 | ||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||
| NOW deposits | $ | 151,360 | 649 | 0.43 | % | $ | 130,658 | 551 | 0.42 | % | ||||||||
| Savings deposits | 233,514 | 1,165 | 0.50 | % | 228,707 | 1,106 | 0.48 | % | ||||||||||
| Money market deposits | 72,721 | 119 | 0.16 | % | 72,329 | 116 | 0.16 | % | ||||||||||
| Time deposits | 133,842 | 1,896 | 1.42 | % | 103,324 | 1,368 | 1.32 | % | ||||||||||
| Securities sold under agreements to repurchase | 19,309 | 61 | 0.32 | % | 22,071 | 68 | 0.31 | % | ||||||||||
| FHLB and other borrowings | 27,304 | 618 | 2.26 | % | 27,051 | 621 | 2.30 | % | ||||||||||
| Subordinated debt | 9,840 | 656 | 6.67 | % | 494 | 33 | 6.68 | % | ||||||||||
| Total Interest Bearing Liabilities | 647,890 | 5,164 | 0.80 | % | 584,634 | 3,863 | 0.66 | % | ||||||||||
| Non-Interest Bearing Liabilities: | ||||||||||||||||||
| Demand deposits | 150,495 | 144,980 | ||||||||||||||||
| Other liabilities | 7,919 | 6,509 | ||||||||||||||||
| Total Non-Interest Bearing Liabilities | 158,414 | 151,489 | ||||||||||||||||
| Shareholders’ Equity | 96,581 | 96,285 | ||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 902,885 | $ | 832,408 | ||||||||||||||
| NET INTEREST INCOME | $ | 29,460 | $ | 28,240 | ||||||||||||||
| NET INTEREST SPREAD(3) | 3.35 | % | 3.52 | % | ||||||||||||||
| NET INTEREST MARGIN(4) | 3.53 | % | 3.68 | % | ||||||||||||||
(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 Twelve Months Ended | ||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||
| 2016 | 2016 | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
| Total shareholders' equity | $ | 100,716 | $ | 98,594 | $ | 96,293 | $ | 94,613 | $ | 93,002 | $ | 100,667 | $ | 93,002 | |||||||
| Less: preferred stock | - | - | - | - | - | - | - | ||||||||||||||
| Common shareholders' equity | $ | 100,716 | $ | 98,594 | $ | 96,293 | $ | 94,613 | $ | 93,002 | $ | 100,667 | $ | 93,002 | |||||||
| Less: goodwill and other tangibles | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,118 | ) | (18,109 | ) | (18,118 | ) | |||||||
| Tangible common shareholders’ equity | $ | 82,607 | $ | 80,485 | $ | 78,184 | $ | 76,504 | $ | 74,884 | $ | 82,558 | $ | 74,884 | |||||||
| Common shares outstanding(1) | 8,364 | 8,358 | 8,366 | 8,341 | 8,325 | 8,364 | 8,325 | ||||||||||||||
| Book value per common share(1) | $ | 12.04 | $ | 11.80 | $ | 11.51 | $ | 11.34 | $ | 11.17 | $ | 12.04 | $ | 11.17 | |||||||
| Book value per common share(1) | $ | 12.04 | $ | 11.80 | $ | 11.51 | $ | 11.34 | $ | 11.17 | $ | 12.04 | $ | 11.17 | |||||||
| Effect of intangible assets | (2.16 | ) | (2.17 | ) | (2.16 | ) | (2.17 | ) | (2.17 | ) | (2.16 | ) | (2.17 | ) | |||||||
| Tangible book value per common share(1) | $ | 9.88 | $ | 9.63 | $ | 9.35 | $ | 9.17 | $ | 9.00 | $ | 9.88 | $ | 9.00 | |||||||
| Return on average assets | 1.08 | % | 1.16 | % | 0.78 | % | 0.78 | % | 0.81 | % | 0.96 | % | 0.76 | % | |||||||
| Effect of intangible assets | 0.02 | % | 0.03 | % | 0.02 | % | 0.02 | % | 0.02 | % | 0.02 | % | 0.02 | % | |||||||
| Return on average tangible assets | 1.10 | % | 1.19 | % | 0.80 | % | 0.80 | % | 0.83 | % | 0.98 | % | 0.78 | % | |||||||
| Return on average equity | 10.25 | % | 10.81 | % | 7.28 | % | 7.25 | % | 7.14 | % | 8.94 | % | 6.59 | % | |||||||
| Effect of average intangible assets | 2.28 | % | 2.48 | % | 1.70 | % | 1.73 | % | 1.64 | % | 2.06 | % | 1.53 | % | |||||||
| Return on average tangible equity | 12.53 | % | 13.29 | % | 8.98 | % | 8.98 | % | 8.78 | % | 11.00 | % | 8.12 | % | |||||||
(1) All share and per share data for all referenced reporting periods have been adjusted for a 5% stock dividend declared on January 19, 2017, payable on February 28, 2017 to shareholders of record as of February 9, 2017.