Two River Bancorp Reports 47.6% Increase in Fourth Quarter Net Income and Record 2016 Annual Results

Company Release - 1/25/2017 8:00 AM ET

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 Bancorp10.33 %8.94%10.33%12.76%10.13%8.97%10.13%12.65%
Two River Community Bank11.49%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 securities89,828 458 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 Assets879,545 8,970 4.06% 792,464 8,306 4.16%
              
Non-Interest Earning Assets:             
Allowance for loan losses(9,749)     (8,664)    
All other assets76,546      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 deposits253,281 336 0.53% 226,306 278 0.49%
Money market deposits69,303 28 0.16% 73,159 30 0.16%
Time deposits141,336 507 1.43% 106,992 359 1.33%
Securities sold under agreements to repurchase21,085 17 0.32% 21,272 17 0.32%
FHLB and other borrowings34,213 166 1.93% 26,501 153 2.29%
Subordinated debt9,852 164 6.66% 1,922 33 6.75%
              
     Total Interest Bearing Liabilities680,613  1,376 0.80% 599,776 1,019 0.67%
              
Non-Interest Bearing Liabilities:             
Demand deposits157,511       154,018     
Other liabilities8,631      6,410     
              
     Total Non-Interest Bearing Liabilities166,142      160,428     
              
Stockholders’ Equity99,587      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 securities84,227 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 Assets834,979 34,624 4.15% 767,975 32,103 4.18%
              
Non-Interest Earning Assets:             
Allowance for loan losses(9,275)     (8,311)    
All other assets77,181      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 deposits233,514 1,165 0.50% 228,707 1,106 0.48%
Money market deposits72,721 119 0.16% 72,329 116 0.16%
Time deposits133,842 1,896 1.42% 103,324 1,368 1.32%
Securities sold under agreements to repurchase19,309 61 0.32% 22,071 68 0.31%
FHLB and other borrowings27,304 618 2.26% 27,051 621 2.30%
Subordinated debt9,840 656 6.67% 494 33 6.68%
              
    Total Interest Bearing Liabilities647,890 5,164 0.80% 584,634 3,863 0.66%
              
Non-Interest Bearing Liabilities:             
Demand deposits150,495      144,980     
Other liabilities7,919      6,509     
              
    Total Non-Interest Bearing Liabilities158,414      151,489     
              
Shareholders’ Equity96,581      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 assets1.08%1.16%0.78%0.78%0.81%0.96%0.76%
Effect of intangible assets0.02%0.03%0.02%0.02%0.02%0.02%0.02%
Return on average tangible assets1.10%1.19%0.80%0.80%0.83%0.98%0.78%
               
Return on average equity10.25%10.81%7.28%7.25%7.14%8.94%6.59%
Effect of average intangible assets2.28%2.48%1.70%1.73%1.64%2.06%1.53%
Return on average tangible equity12.53%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.

 

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

Primary Logo

Source: Two River Bancorp

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