TINTON FALLS, N.J., Oct. 25, 2016 (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 third quarter and nine months ended September 30, 2016.
Third Quarter 2016 Operating and Financial Highlights
- Net income available to common shareholders increased 57.7% to $2.64 million, or $0.33 per diluted share, up from $1.68 million, or $0.21 per diluted share, in the corresponding prior year’s quarter.
- During the period, the Company received a tax-free Bank Owned Life Insurance (“BOLI”) death benefit of $862,000, or $0.11 per diluted share, which was included in non-interest income. The receipt of this benefit positively affected several quarterly and year-to-date metrics.
- Non-interest income increased 137.2% to $1.98 million compared to the same period in 2015 as a result of the BOLI benefit, higher gains on the sale of SBA loans and other loan fees.
- Non-performing assets to total assets decreased to 0.20% at September 30, 2016, from 0.42% at December 31, 2015 and 0.50% at September 30, 2015. Non-performing assets at September 30, 2016 have declined by $1.7 million, or 48.5%, from December 31, 2015.
- Return on average assets (ROAA) was 1.16% for the third quarter of 2016, compared to 0.78% for the previous quarter and 0.79% for the same prior year’s quarter.
- Return on average equity (ROAE) was 10.81% for the three months ended September 30, 2016, compared to 7.28% for the previous quarter and 6.95% for the same prior year’s quarter.
- Tangible book value per share was $10.11 at September 30, 2016, compared to $9.44 at December 31, 2015, and $9.28 at September 30, 2015.
- Total assets at September 30, 2016 were $909.2 million, compared with $863.7 million at December 31, 2015.
- Total loans as of September 30, 2016 were $754.0 million, an increase of $60.8 million, or 8.8% (11.7% annualized), from December 31, 2015, predominantly due to growth in both the commercial real estate and residential mortgage sectors.
- Total deposits as of September 30, 2016 were $739.2 million, an increase of $30.8 million, or 4.3% (5.8% annualized), compared with $708.4 million as of December 31, 2015.
Management Commentary
William D. Moss, President and CEO, stated, “Our third quarter core results are indicative of a continued commitment to achieving long-term sustainable growth, profitability, and shareholder value without compromising asset quality. We experienced annualized loan growth of 11.7% and deposit growth of 5.8%, reflecting our strong commitment to fostering customer relationships within our core markets. The increase in net interest income over the past several quarters primarily reflects this growth in the loan portfolio despite a challenging rate environment. The tax-free BOLI benefit positively affected our non-interest income and earnings during the quarter; however, we achieved strong growth in core operations excluding this item. Non-interest income increased by over 34%, excluding the BOLI benefit, and we continued positive momentum in our core earnings. The Bank concluded the third quarter with a favorable credit profile, ample liquidity, and a strong pipeline of potential new business.”
Dividend Information
On October 19, 2016, the Company's Board of Directors declared a quarterly cash dividend of $0.04 per share, payable on November 30, 2016 to shareholders of record as of the close of business on November 9, 2016. This marks the 15th consecutive quarterly cash dividend paid by the Company to its shareholders.
Key Quarterly Performance Metrics
3rd Qtr. | 2nd Qtr. | 1st Qtr. | 4th Qtr. | 3rd Qtr. | 9 Mo. Ended | 9 Mo. Ended | ||||||||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | 9/30/2016 | 9/30/2015 | ||||||||||||||||||||
| Net Income (in thousands) | $ | 2,644 | $ | 1,727 | $ | 1,693 | $ | 1,751 | $ | 1,692 | $ | 6,064 | $ | 4,596 | ||||||||||||
| | ||||||||||||||||||||||||||
| Net Income Available to Common Shareholders (in thousands) | $ | 2,644 | $ | 1,727 | $ | 1,693 | $ | 1,739 | $ | 1,677 | $ | 6,064 | $ | 4,551 | ||||||||||||
| Earnings per Common Share – Diluted | $ | 0.33 | $ | 0.21 | $ | 0.21 | $ | 0.21 | $ | 0.21 | $ | 0.75 | $ | 0.56 | ||||||||||||
| Return on Average Assets | 1.16 | % | 0.78 | % | 0.78 | % | 0.81 | % | 0.79 | % | 0.91 | % | 0.75 | % | ||||||||||||
| Return on Average Tangible Assets (1) | 1.19 | % | 0.80 | % | 0.80 | % | 0.83 | % | 0.80 | % | 0.93 | % | 0.76 | % | ||||||||||||
| Return on Average Equity | 10.81 | % | 7.28 | % | 7.25 | % | 7.14 | % | 6.95 | % | 8.48 | % | 6.44 | % | ||||||||||||
| Return on Average Tangible Equity (1) | 13.29 | % | 8.98 | % | 8.98 | % | 8.78 | % | 8.55 | % | 10.46 | % | 7.94 | % | ||||||||||||
| Net Interest Margin | 3.55 | % | 3.57 | % | 3.57 | % | 3.65 | % | 3.65 | % | 3.56 | % | 3.69 | % | ||||||||||||
| Non-Performing Assets to Total Assets | 0.20 | % | 0.22 | % | 0.22 | % | 0.42 | % | 0.50 | % | 0.20 | % | 0.50 | % | ||||||||||||
| Allowance as a % of Loans | 1.25 | % | 1.30 | % | 1.27 | % | 1.26 | % | 1.25 | % | 1.25 | % | 1.25 | % | ||||||||||||
| (1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release. | ||||||||||||||||||||||||||
Loan Composition
The components of the Company’s loan portfolio at September 30, 2016 and December 31, 2015 are as follows:
| (In Thousands) | ||||||||
| September 30, 2016 | December 31, 2015 | |||||||
| Commercial and industrial | $ | 103,050 | $ | 100,154 | ||||
| Real estate – construction | 102,658 | 104,231 | ||||||
| Real estate – commercial | 467,118 | 422,665 | ||||||
| Real estate – residential | 54,580 | 39,524 | ||||||
| Consumer | 27,162 | 27,136 | ||||||
| Unearned fees | (586 | ) | (560 | ) | ||||
| 753,982 | 693,150 | |||||||
| Allowance for loan losses | (9,452 | ) | (8,713 | ) | ||||
| Net Loans | $ | 744,530 | $ | 684,437 | ||||
Deposit Composition
The components of the Company’s deposits at September 30, 2016 and December 31, 2015 are as follows:
| (In Thousands) | ||||||||
| September 30, 2016 | December 31, 2015 | |||||||
| Non-interest bearing | $ | 152,412 | $ | 144,627 | ||||
| NOW accounts | 138,162 | 148,373 | ||||||
| Savings deposits | 234,326 | 222,091 | ||||||
| Money market deposits | 73,286 | 75,323 | ||||||
| Listed service CD’s | 47,896 | 33,261 | ||||||
| Time deposits / IRA | 55,443 | 46,902 | ||||||
| Wholesale deposits | 37,722 | 37,859 | ||||||
| Total Deposits | $ | 739,247 | $ | 708,436 | ||||
2016 Third Quarter and First Nine Month Financial Review
Net Income
Net income available to common shareholders for the three months ended September 30, 2016 was $2.64 million, or $0.33 per diluted common share, compared to $1.68 million, or $0.21 per diluted common share, for the same period last year, an increase of 57.7%. The increase was largely due to both higher net interest income and non-interest income, which included the previously noted BOLI benefit of $862,000, or $0.11 per diluted common share, which was partially offset by a higher loan loss provision. Expenses during this period were unchanged. On a linked quarter basis, third quarter 2016 net income available to common shareholders increased 53.1% from the second quarter of 2016.
Net income available to common shareholders for the nine months ended September 30, 2016 increased 33.2% to $6.06 million, or $0.75 per diluted common share, compared to $4.55 million, or $0.56 per diluted common share, in the same prior year period.
Net Interest Income
Net interest income for the quarter ended September 30, 2016 was $7.47 million, an increase of 3.1% compared to $7.25 million in the corresponding prior year period. This increase was largely due to an increase of $49.5 million, or 6.3%, in average interest earning assets, primarily attributable to growth in the Company’s loan portfolio. On a linked quarter basis, net interest income increased $200,000, or 2.8%, from $7.27 million.
For the first nine months of 2016, net interest income increased 4.4% to $21.9 million from $21.0 million in the same prior year period.
Net Interest Margin
The Company reported a net interest margin of 3.55% for the third quarter of 2016, slightly less than the 3.57% in the second quarter of 2016 and 3.65% reported for the third quarter of 2015.
The net interest margin for the first nine months of 2016 was 3.56%, compared to 3.69% in the prior year period.
The 10 and 13 basis point declines in net interest margin from the third quarter and first nine months of 2015, respectively, were mainly due to the interest expense associated with the Company’s $10 million subordinated debenture placement, which was funded in December 2015 and accounted for approximately 8 basis points of the contraction. The subordinated debentures have a maturity date of December 31, 2025 and currently bear an annual interest rate of 6.25%.
Non-Interest Income
Non-interest income for the quarter ended September 30, 2016 totaled $1.98 million, an increase of $1.15 million, or 137.2%, compared to the same period in 2015. The increase included the receipt of a tax-free Bank Owned Life Insurance (“BOLI”) death benefit of $862,000. Additionally, the Company reported higher gains on the sale of SBA loans and other loan fees. Residential mortgage banking revenue was $316,000 during the third quarter of 2016, which was slightly lower than the $327,000 reported in the prior year period. However, the 2015 period included a one-time $113,000 gain on the sale of $5.6 million in residential adjustable rate mortgage (“ARM”) loans.
On a linked quarter basis, non-interest income increased $817,000, or 70.1%, from $1.17 million in the second quarter of 2016 mainly due to the BOLI benefit. Residential mortgage banking revenue increased $35,000, or 12.5%, from $281,000 during the second quarter of 2016, while other loan fees increased by $126,000, due to higher loan prepayment fees. However, gains on the sale of SBA loans decreased $249,000, or 68.2%, from $365,000 during the second quarter of 2016 due to the timing of loan closings.
For the nine months ended September 30, 2016, non-interest income increased $1.49 million, or 58.3%, to $4.04 million from the same period in 2015.
Non-Interest Expense
Non-interest expense for the quarter ended September 30, 2016 totaled $5.34 million, remaining largely flat from the same period in 2015 and on a linked quarter basis, as higher salaries and benefits were offset by lower other real estate owned (“OREO”) property expenses resulting primarily from a $250,000 recovery of settlement expenses from an OREO property.
For the nine months ended September 30, 2016, non-interest expense increased $269,000, or 1.7%, to $16.12 million compared to the same prior year period.
Provision for Loan Losses
During the quarter, a provision for loan losses of $470,000 was required, compared to $120,000 in the same prior year period. The Company recorded a specific allowance of $113,000 against one commercial loan whereby the underlying collateral value had been impaired by an environmental issue, which the Company fully charged off during the current quarter. The remaining $357,000 of loan loss provision was to support the Company’s strong loan growth.
For the first nine months of 2016, a provision of $860,000 was expensed, compared to $400,000 for the same prior year period. The Company had $121,000 of net loan charge-offs during the first nine months of 2016, compared to $40,000 in net loan recoveries in the same prior year period.
The Bank continues to be proactive in identifying troubled credits early, to record charge-offs promptly based on current collateral values, and to maintain an adequate allowance for loan losses. The Company closely monitors local and regional real estate markets in its core Monmouth, Middlesex, Union and Ocean County, New Jersey market areas and other risk factors related in its loan portfolio.
As of September 30, 2016, the Company's allowance for loan losses was $9.45 million, as compared to $8.71 million as of December 31, 2015. The loss allowance as a percentage of total loans was 1.25% at September 30, 2016 compared to 1.26% at December 31, 2015.
Financial Condition / Balance Sheet
At September 30, 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 9.11%, common equity Tier 1 to risk weighted assets ratio was 10.10%, Tier 1 capital to risk weighted assets ratio was 10.10%, and total capital to risk weighted assets ratio was 12.54%.
Total assets as of September 30, 2016 were $909.2 million, compared to $863.7 million as of December 31, 2015.
Total loans as of September 30, 2016 were $754.0 million, compared to $693.2 million reported at December 31, 2015.
Total deposits as of September 30, 2016 were $739.2 million, compared to $708.4 million as of December 31, 2015. Core checking deposits at September 30, 2016 decreased slightly to $290.6 million compared to $293.0 at year-end 2015, due primarily to seasonality in municipal relationships. The Company continues to focus on building core funded non-interest bearing deposit relationships.
Asset Quality
The Company's non-performing assets at September 30, 2016 decreased to $1.85 million as compared to $3.59 million at December 31, 2015 and $4.18 million at September 30, 2015. Non-performing assets to total assets at September 30, 2016 declined to 0.20%, compared to 0.42% at December 31, 2015, and 0.50% at September 30, 2015.
Non-accrual loans decreased to $1.59 million at September 30, 2016, compared to $3.18 million at December 31, 2015 and $3.68 million at September 30, 2015. OREO was $259,000 at September 30, 2016, compared to $411,000 at December 31, 2015 and $495,000 at September 30, 2015.
Troubled debt restructured loan balances amounted to $8.52 million at September 30, 2016, with all but $157,000 performing. This compared to $10.84 million at December 31, 2015 and $12.87 million at September 30, 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 and 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 Three and Nine Months Ended September 30, 2016 and 2015 | |||||||||||||||
| (in thousands, except per share data) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | | |||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 8,337 | $ | 7,834 | $ | 24,335 | $ | 22,720 | |||||||
| Securities: | |||||||||||||||
| Taxable | 187 | 178 | 571 | 607 | |||||||||||
| Tax-exempt | 234 | 188 | 664 | 412 | |||||||||||
| Interest bearing deposits | 19 | 18 | 84 | 58 | |||||||||||
| Total Interest Income | 8,777 | 8,218 | 25,654 | 23,797 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 972 | 799 | 2,800 | 2,325 | |||||||||||
| Securities sold under agreements to repurchase | 15 | 19 | 44 | 51 | |||||||||||
| Federal Home Loan Bank (“FHLB”) and other borrowings | 157 | 155 | 452 | 468 | |||||||||||
| Subordinated debt | 164 | - | 492 | - | |||||||||||
| Total Interest Expense | 1,308 | 973 | 3,788 | 2,844 | |||||||||||
| Net Interest Income | 7,469 | 7,245 | 21,866 | 20,953 | |||||||||||
| PROVISION FOR LOAN LOSSES | 470 | 120 | 860 | 400 | |||||||||||
| Net Interest Income after Provision for Loan Losses | 6,999 | 7,125 | 21,006 | 20,553 | |||||||||||
| NON-INTEREST INCOME: | |||||||||||||||
| Service fees on deposit accounts | 154 | 142 | 427 | 433 | |||||||||||
| Mortgage banking | 316 | 327 | 831 | 613 | |||||||||||
| Other loan fees | 188 | 32 | 311 | 112 | |||||||||||
| Earnings from investment in bank owned life insurance | 118 | 112 | 337 | 335 | |||||||||||
| Death benefit on bank owned life insurance | 862 | - | 862 | - | |||||||||||
| Gain on sale of SBA loans | 116 | 32 | 575 | 309 | |||||||||||
| Net realized gain on sale of securities | - | 9 | 72 | 37 | |||||||||||
| Gain on sale of premises and equipment | - | - | - | 208 | |||||||||||
| Other income | 229 | 182 | 627 | 506 | |||||||||||
| Total Non-Interest Income | 1,983 | 836 | 4,042 | 2,553 | |||||||||||
| NON-INTEREST EXPENSES: | |||||||||||||||
| Salaries and employee benefits | 3,309 | 3,198 | 9,609 | 9,318 | |||||||||||
| Occupancy and equipment | 1,056 | 964 | 3,084 | 2,940 | |||||||||||
| Professional | 273 | 272 | 888 | 718 | |||||||||||
| Insurance | 56 | 74 | 160 | 249 | |||||||||||
| FDIC insurance and assessments | 114 | 119 | 324 | 324 | |||||||||||
| Advertising | 85 | 120 | 315 | 365 | |||||||||||
| Data processing | 135 | 110 | 405 | 352 | |||||||||||
| Outside services fees | 131 | 131 | 369 | 376 | |||||||||||
| Amortization of identifiable intangibles | - | 10 | 9 | 38 | |||||||||||
| OREO expenses, impairment and sales, net | (245 | ) | (137 | ) | (271 | ) | (161 | ) | |||||||
| Loan workout expenses | 44 | 65 | 142 | 278 | |||||||||||
| Other operating | 381 | 382 | 1,081 | 1,049 | |||||||||||
| Total Non-Interest Expenses | 5,339 | 5,308 | 16,115 | 15,846 | |||||||||||
| Income before Income Taxes | 3,643 | 2,653 | 8,933 | 7,260 | |||||||||||
| INCOME TAX EXPENSE | 999 | 961 | 2,869 | 2,664 | |||||||||||
| Net Income | 2,644 | 1,692 | 6,064 | 4,596 | |||||||||||
| Preferred stock dividend | - | (15 | ) | - | (45 | ) | |||||||||
| Net Income Available to Common Shareholders | $ | 2,644 | $ | 1,677 | $ | 6,064 | $ | 4,551 | |||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||
| Basic | $ | 0.33 | $ | 0.21 | $ | 0.77 | $ | 0.57 | |||||||
| Diluted | $ | 0.33 | $ | 0.21 | $ | 0.75 | $ | 0.56 | |||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 7,926 | 7,930 | 7,923 | 7,932 | |||||||||||
| Diluted | 8,131 | 8,130 | 8,109 | 8,130 | |||||||||||
| TWO RIVER BANCORP | ||||||
| CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||
| (in thousands, except share data) | ||||||
| September 30, | December 31, | |||||
| 2016 | 2015 | |||||
| ASSETS | ||||||
| Cash and due from banks | $ | 18,102 | $ | 21,566 | ||
| Interest bearing deposits in bank | 8,843 | 25,161 | ||||
| Cash and cash equivalents | 26,945 | 46,727 | ||||
| Securities available for sale | 31,366 | 33,530 | ||||
| Securities held to maturity | 46,349 | 43,167 | ||||
| Restricted investments, at cost | 4,962 | 3,596 | ||||
| Loans held for sale | 2,561 | 3,050 | ||||
| Loans | 753,982 | 693,150 | ||||
| Allowance for loan losses | (9,452 | ) | (8,713 | ) | ||
| Net loans | 744,530 | 684,437 | ||||
| OREO | 259 | 411 | ||||
| Bank owned life insurance | 20,889 | 17,294 | ||||
| Premises and equipment, net | 4,835 | 5,083 | ||||
| Accrued interest receivable | 1,928 | 1,912 | ||||
| Goodwill | 18,109 | 18,109 | ||||
| Other intangible assets | - | 9 | ||||
| Other assets | 6,437 | 6,371 | ||||
| TOTAL ASSETS | $ | 909,170 | $ | 863,696 | ||
| LIABILITIES | ||||||
| Deposits: | ||||||
| Non-interest bearing | $ | 152,412 | $ | 144,627 | ||
| Interest bearing | 586,835 | 563,809 | ||||
| Total Deposits | 739,247 | 708,436 | ||||
| Securities sold under agreements to repurchase | 18,645 | 19,545 | ||||
| FHLB and other borrowings | 35,300 | 26,500 | ||||
| Subordinated debt | 9,847 | 9,824 | ||||
| Accrued interest payable | 89 | 118 | ||||
| Other liabilities | 7,448 | 6,271 | ||||
| Total Liabilities | 810,576 | 770,694 | ||||
| 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 – 8,257,170 and 8,213,196 at September 30, 2016 and December 31, 2015, respectively | ||||||
| Outstanding – 7,959,938 and 7,929,196 at September 30, 2016 and December 31, 2015, respectively | 73,181 | 72,890 | ||||
| Retained earnings | 27,948 | 22,759 | ||||
| Treasury stock, at cost; 297,232 shares and 284,000 shares at September 30, 2016 and December 31, 2015, respectively | (2,396 | ) | (2,248 | ) | ||
| Accumulated other comprehensive loss | (139 | ) | (399 | ) | ||
| Total Shareholders' Equity | 98,594 | 93,002 | ||||
| TOTAL LIABILITIES and SHAREHOLDERS’ EQUITY | $ | 909,170 | $ | 863,696 | ||
| TWO RIVER BANCORP | ||||||||||||||||||
| Selected Consolidated Financial Data (Unaudited) | ||||||||||||||||||
| Selected Consolidated Earnings Data | ||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| Sept. 30, | June 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||
| Selected Consolidated Earnings Data: | 2016 | 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Total Interest Income | $ | 8,777 | $ | 8,539 | $ | 8,218 | $ | 25,654 | $ | 23,797 | ||||||||
| Total Interest Expense | 1,308 | 1,270 | 973 | 3,788 | 2,844 | |||||||||||||
| Net Interest Income | 7,469 | 7,269 | 7,245 | 21,866 | 20,953 | |||||||||||||
| Provision for Loan Losses | 470 | 390 | 120 | 860 | 400 | |||||||||||||
| Net Interest Income after Provision for Loan Losses | 6,999 | 6,879 | 7,125 | 21,006 | 20,553 | |||||||||||||
| Other Non-Interest Income | 1,983 | 1,166 | 836 | 4,042 | 2,553 | |||||||||||||
| Other Non-Interest Expenses | 5,339 | 5,379 | 5,308 | 16,115 | 15,846 | |||||||||||||
| Income before Income Taxes | 3,643 | 2,666 | 2,653 | 8,933 | 7,260 | |||||||||||||
| Income Tax Expense | 999 | 939 | 961 | 2,869 | 2,664 | |||||||||||||
| Net Income | 2,644 | 1,727 | 1,692 | 6,064 | 4,596 | |||||||||||||
| Preferred Stock Dividend | - | - | (15 | ) | - | (45 | ) | |||||||||||
| Net Income Available to Common Shareholders | $ | 2,644 | $ | 1,727 | $ | 1,677 | $ | 6,064 | $ | 4,551 | ||||||||
| Per Common Share Data: | ||||||||||||||||||
| Basic Earnings | $ | 0.33 | $ | 0.22 | $ | 0.21 | $ | 0.77 | $ | 0.57 | ||||||||
| Diluted Earnings | $ | 0.33 | $ | 0.21 | $ | 0.21 | $ | 0.75 | $ | 0.56 | ||||||||
| Book Value | $ | 12.39 | $ | 12.09 | $ | 11.57 | $ | 12.39 | $ | 11.57 | ||||||||
| Tangible Book Value (1) | $ | 10.11 | $ | 9.81 | $ | 9.28 | $ | 10.11 | $ | 9.28 | ||||||||
| Average Common Shares Outstanding (in thousands): | ||||||||||||||||||
| Basic | 7,926 | 7,927 | 7,930 | 7,923 | 7,932 | |||||||||||||
| Diluted | 8,131 | 8,110 | 8,130 | 8,109 | 8,130 | |||||||||||||
(1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.
| Selected Period End Balances | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | ||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||
| Total Assets | $ | 909,170 | $ | 884,700 | $ | 881,857 | $ | 863,696 | $ | 842,269 | ||||||
| Investment Securities and Restricted Stock | 82,677 | 84,246 | 83,376 | 80,293 | 82,081 | |||||||||||
| Total Loans | 753,982 | 726,414 | 704,401 | 693,150 | 675,584 | |||||||||||
| Allowance for Loan Losses | (9,452 | ) | (9,418 | ) | (8,963 | ) | (8,713 | ) | (8,429 | ) | ||||||
| Goodwill and Other Intangible Assets | 18,109 | 18,109 | 18,109 | 18,118 | 18,128 | |||||||||||
| Total Deposits | 739,247 | 726,264 | 727,104 | 708,436 | 690,665 | |||||||||||
| Repurchase Agreements | 18,645 | 21,683 | 20,132 | 19,545 | 21,303 | |||||||||||
| FHLB and Other Borrowings | 35,300 | 23,800 | 23,800 | 26,500 | 26,500 | |||||||||||
| Subordinated Debt | 9,847 | 9,839 | 9,831 | 9,824 | - | |||||||||||
| Shareholders' Equity | 98,594 | 96,293 | 94,613 | 93,002 | 97,640 | |||||||||||
| Asset Quality Data (by Quarter) | ||||||||||||||||
| (dollars in thousands) | ||||||||||||||||
| Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | ||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | ||||||||||||
| Nonaccrual Loans | $ | 1,587 | $ | 1,697 | $ | 1,723 | $ | 3,178 | $ | 3,680 | ||||||
| OREO | 259 | 259 | 259 | 411 | 495 | |||||||||||
| Total Non-Performing Assets | 1,846 | 1,956 | 1,982 | 3,589 | 4,175 | |||||||||||
| Troubled Debt Restructured Loans: | ||||||||||||||||
| Performing | 8,366 | 8,492 | 8,920 | 9,289 | 11,290 | |||||||||||
| Non-Performing | 157 | 158 | 161 | 1,552 | 1,578 | |||||||||||
| Non-Performing Loans to Total Loans | 0.21 | % | 0.23 | % | 0.24 | % | 0.46 | % | 0.54 | % | ||||||
| Non-Performing Assets to Total Assets | 0.20 | % | 0.22 | % | 0.22 | % | 0.42 | % | 0.50 | % | ||||||
| Allowance as a % of Loans | 1.25 | % | 1.30 | % | 1.27 | % | 1.26 | % | 1.25 | % | ||||||
| Capital Ratios | ||||||||||||||||||||||||||||||
| September 30, 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 | 10.10 | % | 9.11 | % | 10.10 | % | 12.54 | % | 10.13 | % | 8.97 | % | 10.13 | % | 12.65 | % | ||||||||||||||
| Two River Community Bank | 11.28 | % | 10.18 | % | 11.28 | % | 12.46 | % | 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) | September 30, 2016 | September 30, 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 | $ | 18,179 | $ | 19 | 0.42 | % | $ | 28,062 | $ | 18 | 0.25 | % | ||||||
| Investment securities | 83,541 | 421 | 2.02 | % | 80,533 | 366 | 1.82 | % | ||||||||||
| Loans, net of unearned fees (1) (2) | 735,626 | 8,337 | 4.51 | % | 679,279 | 7,834 | 4.58 | % | ||||||||||
| Total Interest Earning Assets | 837,346 | 8,777 | 4.17 | % | 787,874 | 8,218 | 4.14 | % | ||||||||||
| Non-Interest Earning Assets: | ||||||||||||||||||
| Allowance for loan losses | (9,519 | ) | (8,344 | ) | ||||||||||||||
| All other assets | 75,277 | 73,829 | ||||||||||||||||
| Total Assets | $ | 903,104 | $ | 853,359 | ||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||
| NOW deposits | $ | 148,664 | 167 | 0.45 | % | $ | 142,022 | 143 | 0.40 | % | ||||||||
| Savings deposits | 228,862 | 281 | 0.49 | % | 229,999 | 278 | 0.48 | % | ||||||||||
| Money market deposits | 73,031 | 31 | 0.17 | % | 72,520 | 29 | 0.16 | % | ||||||||||
| Time deposits | 139,052 | 493 | 1.41 | % | 105,048 | 349 | 1.32 | % | ||||||||||
| Securities sold under agreements to repurchase | 18,995 | 15 | 0.31 | % | 23,907 | 19 | 0.32 | % | ||||||||||
| FHLB and other borrowings | 26,967 | 157 | 2.32 | % | 27,299 | 155 | 2.26 | % | ||||||||||
| Subordinated debt | 9,844 | 164 | 6.66 | % | - | - | - | |||||||||||
| Total Interest Bearing Liabilities | 645,415 | 1,308 | 0.81 | % | 600,795 | 973 | 0.64 | % | ||||||||||
| Non-Interest Bearing Liabilities: | ||||||||||||||||||
| Demand deposits | 153,274 | 149,381 | ||||||||||||||||
| Other liabilities | 7,144 | 6,541 | ||||||||||||||||
| Total Non-Interest Bearing Liabilities | 160,418 | 155,922 | ||||||||||||||||
| Stockholders’ Equity | 97,271 | 96,642 | ||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 903,104 | $ | 853,359 | ||||||||||||||
| NET INTEREST INCOME | $ | 7,469 | $ | 7,245 | ||||||||||||||
| NET INTEREST SPREAD (3) | 3.36 | % | 3.50 | % | ||||||||||||||
| NET INTEREST MARGIN (4) | 3.55 | % | 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 | ||||||||||||||||||
| Nine Months Ended | Nine Months Ended | |||||||||||||||||
| (dollars in thousands) | September 30, 2016 | September 30, 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 | $ | 22,411 | $ | 84 | 0.50 | % | $ | 30,754 | $ | 58 | 0.25 | % | ||||||
| Investment securities | 82,346 | 1,235 | 2.00 | % | 76,145 | 1,019 | 1.78 | % | ||||||||||
| Loans, net of unearned fees (1) (2) | 715,260 | 24,335 | 4.54 | % | 652,822 | 22,720 | 4.65 | % | ||||||||||
| Total Interest Earning Assets | 820,017 | 25,654 | 4.18 | % | 759,721 | 23,797 | 4.19 | % | ||||||||||
| Non-Interest Earning Assets: | ||||||||||||||||||
| Allowance for loan losses | (9,117 | ) | (8,192 | ) | ||||||||||||||
| All other assets | 77,185 | 72,167 | ||||||||||||||||
| Total Assets | $ | 888,085 | $ | 823,696 | ||||||||||||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||||
| Interest-Bearing Liabilities: | ||||||||||||||||||
| NOW deposits | $ | 151,299 | 491 | 0.43 | % | $ | 126,284 | 402 | 0.43 | % | ||||||||
| Savings deposits | 226,877 | 829 | 0.49 | % | 229,516 | 828 | 0.48 | % | ||||||||||
| Money market deposits | 73,869 | 91 | 0.16 | % | 72,050 | 86 | 0.16 | % | ||||||||||
| Time deposits | 131,325 | 1,389 | 1.41 | % | 102,088 | 1,009 | 1.32 | % | ||||||||||
| Securities sold under agreements to repurchase | 18,713 | 44 | 0.31 | % | 22,340 | 51 | 0.31 | % | ||||||||||
| FHLB and other borrowings | 24,985 | 452 | 2.42 | % | 27,236 | 468 | 2.30 | % | ||||||||||
| Subordinated debt | 9,836 | 492 | 6.67 | % | - | - | - | |||||||||||
| Total Interest Bearing Liabilities | 636,904 | 3,788 | 0.79 | % | 579,514 | 2,844 | 0.66 | % | ||||||||||
| Non-Interest Bearing Liabilities: | ||||||||||||||||||
| Demand deposits | 148,139 | 142,326 | ||||||||||||||||
| Other liabilities | 7,470 | 6,380 | ||||||||||||||||
| Total Non-Interest Bearing Liabilities | 155,609 | 148,706 | ||||||||||||||||
| Shareholders’ Equity | 95,572 | 95,476 | ||||||||||||||||
| Total Liabilities and Shareholders’ Equity | $ | 888,085 | $ | 823,696 | ||||||||||||||
| NET INTEREST INCOME | $ | 21,866 | $ | 20,953 | ||||||||||||||
| NET INTEREST SPREAD (3) | 3.39 | % | 3.53 | % | ||||||||||||||
| NET INTEREST MARGIN (4) | 3.56 | % | 3.69 | % | ||||||||||||||
(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 Nine Months Ended | |||||||||||||||||||||
| Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | ||||||||||||||||
| Total shareholders' equity | $ | 98,594 | $ | 96,293 | $ | 94,613 | $ | 93,002 | $ | 97,640 | $ | 98,594 | $ | 97,640 | ||||||||
| Less: preferred stock | - | - | - | - | (6,000 | ) | - | (6,000 | ) | |||||||||||||
| Common shareholders' equity | $ | 98,594 | $ | 96,293 | $ | 94,613 | $ | 93,002 | $ | 91,640 | $ | 98,594 | $ | 91,640 | ||||||||
| Less: goodwill and other tangibles | (18,109 | ) | (18,109 | ) | (18,109 | ) | (18,118 | ) | (18,128 | ) | (18,109 | ) | (18,128 | ) | ||||||||
| Tangible common shareholders’ equity | $ | 80,485 | $ | 78,184 | $ | 76,504 | $ | 74,884 | $ | 73,512 | $ | 80,485 | $ | 73,512 | ||||||||
| Common shares outstanding | 7,960 | 7,967 | 7,943 | 7,929 | 7,918 | 7,960 | 7,918 | |||||||||||||||
| Book value per common share | $ | 12.39 | $ | 12.09 | $ | 11.91 | $ | 11.73 | $ | 11.57 | $ | 12.39 | $ | 11.57 | ||||||||
| Book value per common share | $ | 12.39 | $ | 12.09 | $ | 11.91 | $ | 11.73 | $ | 11.57 | $ | 12.39 | $ | 11.57 | ||||||||
| Effect of intangible assets | (2.28 | ) | (2.28 | ) | (2.28 | ) | (2.29 | ) | (2.29 | ) | (2.28 | ) | (2.29 | ) | ||||||||
| Tangible book value per common share | $ | 10.11 | $ | 9.81 | $ | 9.63 | $ | 9.44 | $ | 9.28 | $ | 10.11 | $ | 9.28 | ||||||||
| Return on average assets | 1.16 | % | 0.78 | % | 0.78 | % | 0.81 | % | 0.79 | % | 0.91 | % | 0.75 | % | ||||||||
| Effect of intangible assets | 0.03 | % | 0.02 | % | 0.02 | % | 0.02 | % | 0.01 | % | 0.02 | % | 0.01 | % | ||||||||
| Return on average tangible assets | 1.19 | % | 0.80 | % | 0.80 | % | 0.83 | % | 0.80 | % | 0.93 | % | 0.76 | % | ||||||||
| Return on average equity | 10.81 | % | 7.28 | % | 7.25 | % | 7.14 | % | 6.95 | % | 8.48 | % | 6.44 | % | ||||||||
| Effect of average intangible assets | 2.48 | % | 1.70 | % | 1.73 | % | 1.64 | % | 1.60 | % | 1.98 | % | 1.50 | % | ||||||||
| Return on average tangible equity | 13.29 | % | 8.98 | % | 8.98 | % | 8.78 | % | 8.55 | % | 10.46 | % | 7.94 | % | ||||||||