Two River Bancorp Reports 2017 Second Quarter Financial Results Highlighted by a 23.2% Increase in Net Income

Company Release - 7/25/2017 8:00 AM ET

TINTON FALLS, N.J., July 25, 2017 (GLOBE NEWSWIRE) -- Two River Bancorp (Nasdaq:TRCB) (the "Company"), the parent company of Two River Community Bank ("the Bank"), today reported financial results for the second quarter and six months ended June 30, 2017. All share and per share data for all referenced reporting periods have been adjusted for a 5% stock dividend paid on February 28, 2017.

2017 Second Quarter Operating and Financial Highlights
(all comparisons to the same prior year’s quarter unless otherwise noted)

  • Net income increased 23.2% to $2.13 million, or $0.25 per diluted share, from $1.73 million, or $0.20 per diluted share. The 2017 quarter included a benefit to income tax expense related to the adoption of ASU 2016-09, Compensation - Stock Compensation, Improvements to Employee Share-Based Payment Accounting, which increased net income by $145,000, or $0.02 per diluted share.
  • Non-interest income increased 31.9% to $1.54 million, as a result of a 68.7% increase in mortgage banking revenue, higher gains on the sale of SBA loans and other loan fees.
  • Return on average assets (ROAA) improved to 0.87%, compared to 0.78%. 
  • Return on average equity (ROAE) improved to 8.26%, compared to 7.28%.
  • Non-performing assets to total assets were 0.32% at June 30, 2017, an increase from 0.19% at December 31, 2016 and 0.22% at June 30, 2016.
  • Tangible book value per share was $10.25 at June 30, 2017, compared to $9.88 at December 31, 2016 and $9.34 at June 30, 2016.
  • Total assets at June 30, 2017 were $983.1 million, compared to $940.2 million at December 31, 2016.
  • Total loans as of June 30, 2017 were $794.9 million, up 5.6% from $753.1 million at December 31, 2016. 
  • Total deposits as of June 30, 2017 were $810.7 million, up 4.4% from $776.6 million at December 31, 2016. 

Management Commentary
William D. Moss, President and CEO, stated, “The Company reported an excellent quarter highlighted by higher net income, loan and deposit growth, and success in increasing non-interest income. We have grown the loan portfolio by $41.8 million since year-end 2016, and will continue to benefit from a strong pipeline within our core markets of Monmouth, Middlesex, Union and Ocean Counties. The largest component continues to be CRE lending, which is expected to be a principal driver of revenues throughout the remainder of 2017. We are also seeing significant contributions from virtually all aspects of our business resulting in, among other things, additional non-interest income. Our mortgage banking business has experienced accelerating growth, which is evidence that our proactive approach in cultivating a vast network of referral sources and improving the Bank’s brand recognition throughout our densely populated marketplace is working. The Company’s gain on sales of SBA loans increased significantly on both a linked quarter and year-to-date basis, and this trend is expected to continue in the current quarter.”

Mr. Moss concluded, “In keeping with our Strategic Plan, which includes optimizing the profitability of our branch network, the Company will be closing two branches and consolidating them into a new location, which will provide cost efficiency and greater market share potential. We expect to open a new branch in Sea Girt, along the Route 35 corridor in Monmouth County, and will integrate the operations of our Allaire office in Wall Township and our office in Manasquan into this branch in the third quarter of 2017. We anticipate annual pre-tax expense savings of approximately $300,000 beginning in the fourth quarter of 2017.”

Dividend Increased to $0.045 per share
On July 19, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.045 per share, payable on August 29, 2017 to shareholders of record as of the close of business on August 11, 2017. This marks the 18th consecutive quarterly cash dividend and represents a 12.5% increase from the prior quarter, which is in addition to the 5% stock dividend paid in February 2017. 

Key Quarterly Performance Metrics

 2nd Qtr.1st Qtr.4th Qtr.3rd Qtr.2nd Qtr.6 Mo.
Ended

6 Mo.
Ended

 20172017 2016
 2016
 2016
6/30/2017
6/30/2016
Net Income (in thousands)$2,128 $1,802 $2,567 $2,644 $1,727 $3,930  $3,420 
Earnings per Common Share – Diluted$0.25 $0.21 $0.30 $0.31 $0.20 $0.45  $0.40 
Return on Average Assets 0.87% 0.76% 1.08% 1.16% 0.78% 0.81% 0.78%
Return on Average Tangible Assets(1) 0.88% 0.77% 1.10% 1.19% 0.80% 0.83% 0.80%
Return on Average Equity 8.26% 7.18% 10.25% 10.81% 7.28% 7.73% 7.26%
Return on Average Tangible Equity(1) 10.01% 8.74% 12.53% 13.29% 8.98% 9.39% 8.98%
Net Interest Margin 3.49% 3.45% 3.43% 3.55% 3.57% 3.47% 3.57%
Non-Performing Assets to Total Assets 0.32% 0.18% 0.19% 0.20% 0.22% 0.32% 0.22%
Allowance as a % of Loans 1.25% 1.25% 1.27% 1.25% 1.30% 1.25% 1.30%
 
(1)  Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.

Loan Composition
The components of the Company’s loan portfolio at June 30, 2017 and December 31, 2016 are as follows:  

  (in thousands)
  June 30,
2017
  December 31,
2016
 
Commercial and industrial $  99,688  $  93,697 
Real estate – construction  112,102   111,914 
Real estate – commercial  496,400   460,685 
Real estate – residential  59,624   59,065 
Consumer  27,828   28,279 
Unearned fees  (734)  (548)
   794,908   753,092 
Allowance for loan losses  (9,953)  (9,565)
Net Loans $  784,955  $  743,527 

Deposit Composition
The components of the Company’s deposits at June 30, 2017 and December 31, 2016 are as follows:  

  (in thousands)
  June 30,
2017
  December 31,
 2016
 
Non-interest-bearing $  172,737  $  160,104 
NOW accounts  184,534   152,771 
Savings deposits  260,715   261,438 
Money market deposits  63,474   62,495 
Listed service CD’s  41,949   47,648 
Time deposits / IRA  56,044   56,489 
Wholesale deposits  31,272   35,622 
Total Deposits $  810,725  $  776,567 

2017 Second Quarter Financial Review

Net Income
Net income for the three months ended June 30, 2017 increased 23.2% to $2.13 million, or $0.25 per diluted common share, compared to $1.73 million, or $0.20 per diluted common share, for the same period last year. The increase was largely due to both higher net interest income and non-interest income, coupled with a benefit to income tax expense related to the adoption of ASU 2016-09, Compensation - Stock Compensation, Improvements to Employee Share-Based Payment Accounting, which increased net income by $145,000, or $0.02 per diluted share.  On a linked quarter basis, second quarter 2017 net income increased 18.1% from the first quarter of 2017.

Net income for the six months ended June 30, 2017 increased 14.9% to $3.93 million, or $0.45 per diluted share, compared to $3.42 million, or $0.40 per diluted share, in the same prior year period.

Net Interest Income
Net interest income for the quarter ended June 30, 2017 was $7.96 million, an increase of 9.5% compared to $7.27 million in the corresponding prior year period. This was largely due to an increase of $95.3 million, or 11.6%, in average interest-earning assets, primarily attributable to growth in the loan portfolio. On a linked quarter basis, net interest income increased $328,000, or 4.3%, from $7.63 million.

For the first half of 2017, net interest income increased 8.3% to $15.6 million from $14.4 million in the prior year period.

Net Interest Margin
The Company reported a net interest margin of 3.49% for the second quarter of 2017, compared to 3.45% in the first quarter of 2017 and 3.57% reported for the second quarter of 2016. The net interest margin improvement from the first quarter of 2017 was the result of slightly higher yielding interest-earning assets coupled with a higher level of average non-interest-bearing demand deposits.

The net interest margin for the first half of 2017 was 3.47%, compared to 3.57% in the prior year period.

Non-Interest Income
Non-interest income for the quarter ended June 30, 2017 totaled $1.54 million, an increase of $372,000, or 31.9%, compared to the same period in 2016. Residential mortgage banking revenue increased $193,000, or 68.7%, which included an $86,000 gain from the sale of $3.6 million of portfolio adjustable rate mortgages.  Additionally, higher gains from the sale of SBA loans and other loan fees, primarily due to higher loan prepayment fees, contributed to the increase.

On a linked quarter basis, non-interest income increased by $413,000, or 36.7%, from the first quarter of 2017, mainly due to higher gains on the sale of SBA loans, residential mortgage banking revenues, and other loan fees.

For the six months ended June 30, 2017, non-interest income increased $604,000, or 29.3%, to $2.7 million from the same period in 2016.

Non-Interest Expense
Non-interest expense for the quarter ended June 30, 2017 totaled $6.07 million, an increase of $692,000, or 12.9%, from the $5.38 million reported in same period in 2016, primarily due to salary increases and higher loan workout expenses. On a linked quarter basis, non-interest expense increased $294,000, or 5.1%, largely due to higher loan workout expenses and other operating expenses.

For the six months ended June 30, 2017, non-interest expense increased $1.07 million, or 9.9%, to $11.8 million compared to the same prior year period.

Provision for Loan Losses
During the quarter, a provision for loan losses of $375,000 was expensed, compared to $390,000 in the same prior year period. The majority of the second quarter 2017 provision was to support the Company’s strong loan growth. The Company had $11,000 in net loan recoveries during the quarter, compared to $65,000 in net loan recoveries during the same period last year. For the first half of 2017, a provision of $600,000 was expensed, compared to $390,000 for the same prior year period. The Company had $212,000 of net loan charge-offs during the first half of 2017, compared to $315,000 in net loan recoveries in the same prior year period.

As of June 30, 2017, the Company's allowance for loan losses was $9.95 million, as compared to $9.57 million as of December 31, 2016. The loss allowance as a percentage of total loans was 1.25% at June 30, 2017 compared to 1.27% at December 31, 2016. 

Financial Condition / Balance Sheet

At June 30, 2017, the Company maintained capital ratios that were in excess of regulatory standards for well capitalized institutions. The Company's Tier 1 capital to average assets ratio was 8.95%, its common equity Tier 1 to risk weighted assets ratio was 10.08%, its Tier 1 capital to risk weighted assets ratio was 10.08%, and its total capital to risk weighted assets ratio was 12.40%.

Total assets as of June 30, 2017 were $983.1 million, an increase of 4.6% compared to $940.2 million as of December 31, 2016.

Total loans as of June 30, 2017 were $794.9 million, an increase of 5.6% compared to $753.1 million at December 31, 2016.

Total deposits as of June 30, 2017 were $810.7 million, an increase of 4.4% compared to $776.6 million as of December 31, 2016. Core checking deposits at June 30, 2017 increased to $357.3 million, up $44.4 million, or 14.2% from year-end. This growth was primarily driven by a new municipal relationship in the first half of 2017 and the Company’s focus on building core checking account deposit relationships.

Asset Quality
The Company's non-performing assets at June 30, 2017 were $3.18 million as compared to $1.81 million at December 31, 2016 and $1.96 million at June 30, 2016. Non-performing assets to total assets at June 30, 2017 were 0.32% compared to 0.19% at December 31, 2016 and 0.22% at June 30, 2016.

Non-accrual loans were $2.95 million at June 30, 2017, compared to $1.55 million at December 31, 2016 and $1.70 million at June 30, 2016.  During the quarter, three relationships migrated to non-accrual status.  These relationships were previously identified as TDRs or exhibited negative financial trends which management had identified. OREO decreased to $233,000 at June 30, 2017, compared to $259,000 at both December 31, 2016 and June 30, 2016 due to a $26,000 writedown taken during the current quarter. 

Troubled debt restructured loan balances amounted to $7.95 million at June 30, 2017, with all but $960,000 performing. This compared to $8.23 million at December 31, 2016 and $8.65 million at June 30, 2016.

About the Company
Two River Bancorp is the holding company for Two River Community Bank, which is headquartered in Tinton Falls, New Jersey. Two River Community Bank operates 15 branches along with two Loan Production Offices throughout Monmouth, Middlesex, Union, and Ocean Counties, New Jersey. More information about Two River Community Bank and Two River Bancorp is available at www.tworiverbank.com.

The foregoing contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's current views and expectations about new and existing programs and products, relationships, opportunities, technology and market conditions. These statements may be identified by such forward-looking terminology as "continue," "expect," "look," "believe," "anticipate," "may," "will," "should," "projects," "strategy" or similar statements. Actual results may differ materially from such forward-looking statements, and no reliance should be placed on any forward-looking statement. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, unanticipated changes in the financial markets and the direction of interest rates; volatility in earnings due to certain financial assets and liabilities held at fair value; competition levels; loan and investment prepayments differing from our assumptions; insufficient allowance for credit losses; a higher level of loan charge-offs and delinquencies than anticipated; material adverse changes in our operations or earnings; a decline in the economy in our market areas; changes in relationships with major customers; changes in effective income tax rates; higher or lower cash flow levels than anticipated; inability to hire or retain qualified employees; a decline in the levels of deposits or loss of alternate funding sources; a decrease in loan origination volume or an inability to close loans currently in the pipeline; changes in laws and regulations; adoption, interpretation and implementation of accounting pronouncements; operational risks, including the risk of fraud by employees, customers or outsiders; and the inability to successfully implement or expand new lines of business or new products and services. For a list of other factors which would affect our results, see the Company's filings with the Securities and Exchange Commission, including those risk factors identified in the "Risk Factor" section and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2016. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company assumes no obligation for updating any such forward-looking statements at any time, except as required by law.



TWO RIVER BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months and Six Months Ended June 30, 2017 and 2016
(in thousands, except per share data)
 
  Three Months Ended
June 30,
 Six Months Ended
June 30,
 
   2017   2016  2017   2016 
INTEREST INCOME:           
Loans, including fees $  8,733  $  8,085 $  17,136  $   15,998 
Securities:           
Taxable  235   192  468   384 
Tax-exempt  279   230  564   430 
Interest-bearing deposits  102   32  174   65 
Total Interest Income  9,349   8,539  18,342   16,877 
INTEREST EXPENSE:           
Deposits  1,063   945  2,101   1,828 
Securities sold under agreements to repurchase  17   15  32   29 
Federal Home Loan Bank ("FHLB") and other borrowings  147   147  292   295 
Subordinated debt  164   163  329   328 
Total Interest Expense  1,391   1,270  2,754   2,480 
Net Interest Income  7,958   7,269  15,588   14,397 
PROVISION FOR LOAN LOSSES  375   390  600   390 
Net Interest Income after Provision for Loan Losses  7,583   6,879  14,988   14,007 
NON-INTEREST INCOME:           
Service fees on deposit accounts  161   137  311   273 
Mortgage banking  474   281  900   515 
Other loan fees  122   62  214   123 
Earnings from investment in bank owned life insurance  138   110  274   219 
Gain on sale of SBA loans  394   365  511   459 
Net gain on sale of securities  -   -  -   72 
Other income  249   211  453   398 
Total Non-Interest Income  1,538     1,166  2,663   2,059 
NON-INTEREST EXPENSES:           
Salaries and employee benefits  3,460   3,195  6,913   6,300 
Occupancy and equipment  1,049   1,033  2,103   2,028 
Professional  395   280  736   615 
Insurance  53     57  101   104 
FDIC insurance and assessments  108   105  231   210 
Advertising  125    120  235   230 
Data processing  125    135  255   270 
Outside services fees  124    115  227   238 
Amortization of identifiable intangibles  -    -  -   9 
OREO expenses, impairment and sales, net  22   (45) 19   (26)
Loan workout expenses  139   18  166   98 
Other operating  471    366  862   700 
Total Non-Interest Expenses  6,071    5,379  11,848   10,776 
Income before Income Taxes  3,050    2,666  5,803   5,290 
INCOME TAX EXPENSE  922    939  1,873   1,870 
Net Income  $  2,128  $  1,727 $  3,930  $  3,420 
EARNINGS PER COMMON SHARE:           
Basic $  0.25  $  0.21 $  0.47  $  0.41 
Diluted $  0.25  $  0.20 $  0.45  $  0.40 
Weighted average common shares outstanding:           
Basic  8,372   8,323  8,363   8,319 
Diluted  8,654   8,516  8,642   8,506 


TWO RIVER BANCORP 
CONSOLIDATED BALANCE SHEETS (Unaudited) 
(in thousands, except share data) 
  
 June 30, December 31, 
 2017 2016 
ASSETS       
Cash and due from banks$21,267 $19,844 
Interest-bearing deposits in bank  23,431  22,233 
Cash and cash equivalents  44,698  42,077 
        
Securities available for sale  31,598  34,464 
Securities held to maturity  55,750  57,843 
Restricted investments, at cost  5,286  4,805 
Loans held for sale 6,786  4,537 
Loans  794,908  753,092 
Allowance for loan losses  (9,953) (9,565)
Net loans  784,955  743,527 
        
OREO  233  259 
Bank owned life insurance  21,303  21,029 
Premises and equipment, net  5,215  4,662 
Accrued interest receivable  2,337  2,234 
Goodwill  18,109  18,109 
Other assets  6,829  6,665 
        
  TOTAL ASSETS$983,099 $940,211 
       
LIABILITIES       
Deposits:       
Non-interest-bearing$172,737 $160,104 
Interest-bearing  637,988  616,463 
Total Deposits  810,725  776,567 
        
Securities sold under agreements to repurchase  25,823  19,915 
FHLB and other borrowings  24,300  25,300 
Subordinated debt 9,871  9,855 
Accrued interest payable  94  100 
Other liabilities  7,762  7,758 
        
Total Liabilities  878,575  839,495 
        
SHAREHOLDERS' EQUITY       
Preferred stock, no par value; 6,500,000 shares authorized, no shares issued and outstanding  -  - 
Common stock, no par value; 25,000,000 shares authorized;       
Issued –  8,740,865 and 8,677,536 at June 30, 2017 and December 31, 2016, respectively      
Outstanding –  8,428,771 and 8,365,442 at June 30, 2017 and December 31, 2016 respectively 79,394  79,056 
Retained earnings  27,722  24,447 
Treasury stock, at cost; 312,094 shares at June 30, 2017 and December 31, 2016 (2,396) (2,396)
Accumulated other comprehensive loss  (196) (391)
Total Shareholders' Equity  104,524  100,716 
        
TOTAL LIABILITIES and SHAREHOLDERS’ EQUITY$983,099 $940,211 

    


TWO RIVER BANCORP 
Selected Consolidated Financial Data (Unaudited) 
  
Selected Consolidated Earnings Data 
(in thousands, except per share data) 
  
  Three Months Ended Six Months Ended 
 June 30, March 31, June 30, June 30, June 30, 
Selected Consolidated Earnings Data: 2017  2017  2016  2017  2016 
Total Interest Income$  9,349 $  8,993 $  8,539 $  18,342 $  16,877 
Total Interest Expense 1,391  1,363  1,270  2,754  2,480 
Net Interest Income 7,958  7,630  7,269  15,588  14,397 
Provision for Loan Losses 375  225  390  600  390 
Net Interest Income after Provision for Loan Losses 7,583  7,405  6,879  14,988  14,007 
Other Non-Interest Income 1,538  1,125  1,166  2,663  2,059 
Other Non-Interest Expenses 6,071  5,777  5,379  11,848  10,776 
Income before Income Taxes 3,050  2,753  2,666  5,803  5,290 
Income Tax Expense 922  951  939  1,873  1,870 
Net Income$  2,128 $  1,802 $  1,727 $  3,930 $  3,420 
           
Per Common Share Data:          
Basic Earnings$  0.25 $  0.22 $  0.21 $  0.47 $  0.41 
Diluted Earnings$  0.25 $  0.21 $  0.20 $  0.45 $  0.40 
Book Value$  12.40 $  12.21 $  11.51 $  12.40 $  11.51 
Tangible Book Value(1)$   10.25  $   10.05 $  9.34 $  10.25 $  9.34 
Average Common Shares Outstanding (in thousands):          
Basic 8,372  8,341  8,323  8,363  8,319 
Diluted 8,654  8,618  8,516  8,642  8,506 
                
(1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.




Selected Period End Balances
(in thousands)
 
 June 30, March 31, Dec. 31, Sept. 30, June 30,  
  2017  2017  2016  2016  2016 
Total Assets$   983,099 $  967,073 $  940,211 $  909,170 $  884,700 
Investment Securities and Restricted Stock 92,634  94,850  97,112  82,677  84,246 
Total Loans 794,908  762,687  753,092  753,982  726,414 
Allowance for Loan Losses (9,953) (9,567) (9,565) (9,452) (9,418)
Goodwill and Other Intangible Assets 18,109  18,109  18,109  18,109  18,109 
Total Deposits 810,725  799,705  776,567  739,247  726,264 
Repurchase Agreements 25,823  21,437  19,915  18,645  21,683 
FHLB and Other Borrowings 24,300  24,300  25,300  35,300  23,800 
Subordinated Debt 9,871  9,863  9,855  9,847  9,839 
Shareholders' Equity 104,524  102,406  100,716  98,594  96,293 


Asset Quality Data (by Quarter)
(dollars in thousands)
 
 June 30, March 31, Dec. 31, Sept. 30, June 30,  
  2017  2017  2016  2016  2016  
Nonaccrual Loans$  2,946 $  1,511 $  1,548 $  1,587 $  1,697  
OREO 233  259  259  259  259  
Total Non-Performing Assets 3,179  1,770  1,807  1,846  1,956  
            
Troubled Debt Restructured Loans:           
Performing 6,990  7,754  8,075  8,366  8,492  
Non-Performing 960  405  157  157  158  
            
Non-Performing Loans to Total Loans 0.37% 0.20% 0.21% 0.21% 0.23% 
Non-Performing Assets to Total Assets 0.32% 0.18% 0.19% 0.20% 0.22% 
Allowance as a % of Loans 1.25% 1.25% 1.27% 1.25% 1.30% 


Capital Ratios 
  
 June 30, 2017 December 31, 2016
 CET 1
Capital
to Risk Weighted
Assets
Ratio
 Tier 1
Capital
to
Average
Assets
Ratio
 Tier 1
Capital
to Risk
Weighted
Assets
Ratio
 Total
Capital
to Risk Weighted
Assets
Ratio
  CET 1
Capital

to Risk Weighted
Assets
Ratio
 Tier 1
Capital
to
Average Assets
Ratio
 Tier 1
Capital
to Risk Weighted
Assets
Ratio
 Total
Capital to
Risk Weighted
Assets
Ratio
 
Two River Bancorp10.08%8.95%10.08%12.40% 10.33%8.94%10.33%12.76%
Two River Community Bank11.14%9.90%11.14%12.30%
 11.49%9.95%11.49%12.68%
"Well capitalized" institution (under prompt corrective action regulations.)*6.50%5.00%8.00%10.00%
 6.50%5.00%8.00%10.00%
                 
*Applies to Bank only.  For the Company to be “well capitalized,” the Tier 1 Capital to Risk Weighted Assets has to be at least 6.00%.



Consolidated Average Balance Sheets & Yields
With Resultant Interest and Average Rates
 
 Three Months Ended Three Months Ended
(dollars in thousands)June 30, 2017 June 30, 2016
  Interest /
Income
Expense
   Interest /
Income
Expense
 
ASSETS Average
Balance
  Average
Yield /
Rate
 Average
Balance
  Average
Yield /
Rate
Interest-Earning Assets:     
Interest-bearing due from banks$40,442 $102 1.01% $19,378 $32 0.66%
Investment securities94,123 514 2.18% 84,308 422 2.00%
Loans, net of unearned fees(1) (2)779,508 8,733 4.49% 715,114 8,085 4.55%
              
Total Interest-Earning Assets914,073 9,349 4.10% 818,800 8,539 4.19%
              
Non-Interest-Earning Assets:             
Allowance for loan losses(9,698)     (9,031)    
All other assets80,633      79,644     
              
Total Assets$985,008       $889,413      
              
LIABILITIES & SHAREHOLDERS' EQUITY             
Interest-Bearing Liabilities:             
NOW deposits$197,949 231 0.47% $154,633 173 0.45%
Savings deposits259,860 336 0.52% 226,545 275 0.49%
Money market deposits63,841 26 0.16% 74,726 30 0.16%
Time deposits131,209 470 1.44% 131,407 467 1.43%
Securities sold under agreements to repurchase23,577 17 0.29% 19,440 15 0.31%
FHLB and other borrowings24,303 147 2.43% 23,800 147 2.48%
Subordinated debt9,868 164 6.65% 9,836 163 6.63%
              
Total Interest-Bearing Liabilities710,607 1,391 0.79% 640,387 1,270 0.80%
              
Non-Interest-Bearing Liabilities:             
Demand deposits163,198      146,667     
Other liabilities7,854      6,901     
              
Total Non-Interest-Bearing Liabilities171,052      153,568     
              
Stockholders’ Equity103,349      95,458     
              
Total Liabilities and Shareholders’ Equity$985,008       $889,413      
              
NET INTEREST INCOME  $7,958      $7,269   
              
NET INTEREST SPREAD(3)    3.31%     3.39%
              
NET INTEREST MARGIN(4)    3.49%     3.57%
              
(1) Included in interest income on loans are loan fees.
(2) Includes non-performing loans.
(3) The interest rate spread is the difference between the weighted average yield on average interest-earning and the weighted average cost of average interest-bearing liabilities.
(4) The interest rate margin is calculated by dividing annualized net interest income by average interest earning assets.



Consolidated Average Balance Sheets & Yields
With Resultant Interest and Average Rates
 
 Six Months Ended Six Months Ended
(dollars in thousands)June 30, 2017 June 30, 2016
  Interest /
Income
Expense
   Interest /
Income
Expense
 
ASSETS Average
Balance
  Average
Yield /
Rate
 Average
Balance
  Average
Yield /
Rate
Interest-Earning Assets:     
Interest-bearing due from banks$39,359 $174 0.89% $24,550 $65 0.53%
Investment securities95,072 1,032 2.17% 81,738 814 1.99%
Loans, net of unearned fees(1) (2)770,860 17,136 4.48% 704,964 15,998 4.56%
              
Total Interest-Earning Assets905,291 18,342 4.09% 811,252 16,877 4.18%
              
Non-Interest-Earning Assets:             
Allowance for loan losses(9,671)     (8,913)    
All other assets78,119      77,860     
              
Total Assets$973,739       $880,199      
              
LIABILITIES & SHAREHOLDERS' EQUITY             
Interest-Bearing Liabilities:             
NOW deposits$194,943 443 0.46% $152,631 324 0.43%
Savings deposits258,189 663 0.52% 225,871 548 0.49%
Money market deposits62,760 52 0.17% 74,293 60 0.16%
Time deposits133,827 943 1.42% 127,420 896 1.41%
Securities sold under agreements to repurchase21,488 32 0.30% 18,570 29 0.31%
FHLB and other borrowings24,374 292 2.42% 23,983 295 2.47%
Subordinated debt9,864 329 6.67% 9,832 328 6.67%
              
Total Interest-Bearing Liabilities705,445 2,754 0.79% 632,600 2,480 0.79%
              
Non-Interest-Bearing Liabilities:             
Demand deposits158,219      145,544     
Other liabilities7,522      7,342     
              
Total Non-Interest-Bearing Liabilities165,741      152,886     
              
Shareholders’ Equity102,553      94,713     
              
Total Liabilities and Shareholders’ Equity$973,739       $880,199      
              
NET INTEREST INCOME  $15,588      $14,397   
              
NET INTEREST SPREAD(3)    3.30%     3.39%
              
NET INTEREST MARGIN(4)    3.47%     3.57%
 
(1) Included in interest income on loans are loan fees.
(2) Includes non-performing loans.
(3) The interest rate spread is the difference between the weighted average yield on average interest-earning and the weighted average cost of average interest-bearing liabilities.
(4) The interest rate margin is calculated by dividing annualized net interest income by average interest earning assets.


Reconciliation of Non-GAAP Financial Measures

The press release contains certain financial information determined by methods other than in accordance with generally accepted accounting policies in the United States (GAAP). These non-GAAP financial measures are "book value per common share," "tangible book value per common share," "return on average tangible assets," and "return on average tangible equity." This non-GAAP disclosure has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Our management uses these non-GAAP measures in its analysis of our performance because it believes these measures are material and will be used as a measure of our performance by investors.

(in thousands, except per share data)    
 As of and for the Three Months Ended As of and for the
Six Months Ended
 
 June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30, 
 2017 2017 2016 2016 2016 2017 2016 
Total shareholders' equity$104,524 $102,406 $100,716 $98,594 $96,293 $104,524 $96,293 
Less: goodwill and other tangibles (18,109) (18,109) (18,109) (18,109) (18,109) (18,109) (18,109)
Tangible common shareholders’ equity$86,415 $84,297 $82,607 $80,485 $78,184 $86,415 $78,184 
                      
Common shares outstanding 8,429  8,389  8,365  8,358  8,366  8,429  8,366 
Book value per common share$12.40 $12.21 $12.04 $11.80 $11.51 $12.40 $11.51 
                      
Book value per common share$12.40 $12.21 $12.04 $11.80 $11.51 $12.40 $11.51 
Effect of intangible assets (2.15) (2.16) (2.16) (2.17) (2.17) (2.15) (2.17)
Tangible book value per common share$10.25 $10.05 $9.88 $9.63 $9.34 $10.25 $9.34 
               
Return on average assets0.87%0.76%1.08%1.16%0.78%0.81%0.78%
Effect of average intangible assets0.01%0.01%0.02%0.03%0.02%0.02%0.02%
Return on average tangible assets0.88%0.77%1.10%1.19%0.80%0.83%0.80%
               
Return on average equity8.26%7.18%10.25%10.81%7.28%7.73%7.26%
Effect of average intangible assets1.75%1.56%2.28%2.48%1.70%1.66%1.72%
Return on average tangible equity10.01%8.74%12.53%13.29%8.98%9.39%8.98%

 

Investor Contact:
Adam Prior, Senior Vice President
The Equity Group Inc.
Phone: (212) 836-9606
E-mail: aprior@equityny.com

Media Contact:
Adam Cadmus, Marketing Director
Phone: (732) 982-2167
Email: acadmus@tworiverbank.com

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Source: Two River Bancorp

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