Two River Bancorp Reports 2019 First Quarter Financial Results Highlighted by Strong Loan and Deposit Growth

Company Release - 4/23/2019 8:00 AM ET

TINTON FALLS, N.J., April 23, 2019 (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 first quarter ended March 31, 2019, highlighted by improved net income driven by solid loan and deposit growth.

2019 First Quarter Financial Highlights
(comparisons to 2018 first quarter)

  • Net income increased 4.0% to $2.78 million
  • Earnings per diluted share (EPS) increased 3.3% to $0.32
  • Return on average assets of 1.01%, compared to 1.04%
  • Return on average equity of 9.59%, compared to 10.08%
  • Net interest margin decreased by 3 basis points to 3.60%
  • Net interest income increased 6.2% to $9.3 million
  • Non-interest income decreased 11.7% to $1.2 million
  • Efficiency ratio(1) improved to 59.95% from 61.59%

(Totals at March 31, 2019; comparisons to December 31, 2018)

  • Total loans were $948.5 million, an increase of $27.2 million, or 11.8% annualized
  • Total deposits were $959.7 million, an increase of $42.3 million, or 18.4% annualized
  • Total assets increased to a record $1.141 billion, compared to $1.096 billion
  • Tangible book value per share(2) increased to $11.66, compared to $11.43

(1) Efficiency ratio represents the ratio of non-interest expense to the sum of net interest income and non-interest income.
(2) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.

Management Commentary
Mr. William D. Moss, Chairman, President and CEO, stated, “I am very pleased with our growth in the first quarter, as loans increased 11.8% and deposits grew by 18.4% on an annualized basis. Commercial and residential real estate lending drove top-line growth and we continue to convert a strong loan pipeline, driven by long-standing relationships and referrals in our markets. All of our efforts have led to higher net income, which we believe has laid the groundwork for continued growth and profitability throughout 2019.”

Mr. Moss continued, “We continue to focus on optimizing our branch network and to that end, opened a new branch in the Ironbound district of Newark, NJ in Essex County in early April. We were able to reallocate human resources from our former New Brunswick office, which we closed in December 2018. This new branch will build on the existing success we have enjoyed since our entry into this market over the past year.”

Dividend Information
On April 18, 2019, the Company's Board of Directors declared a quarterly cash dividend of $0.07 per share, payable May 30, 2019 to shareholders of record as of the close of business on May 10, 2019. This marks the 25th consecutive quarterly cash dividend, represents a 27% increase from the prior quarter, and is the sixth consecutive year the Company has raised its cash dividend. 

Key Quarterly Performance Metrics

 1st Qtr.4th Qtr.3rd Qtr.2nd Qtr.
1st Qtr.
 2019
2018
2018
2018
2018
Net Income (in thousands)$2,783 $3,046 $2,834 $2,650 $2,676 
Earnings per Common Share – Diluted$0.32 $0.35 $0.33 $0.30 $0.31 
Return on Average Assets 1.01% 1.10%1.04% 1.00% 1.04%
Return on Average Tangible Assets(1) 1.02% 1.11%1.06% 1.02% 1.06%
Return on Average Equity 9.59  % 10.52%9.98% 9.67% 10.08%
Return on Average Tangible Equity(1) 11.33%  12.49%11.90% 11.57% 12.12%
Net Interest Margin 3.60% 3.56%3.55% 3.59% 3.63%
Efficiency Ratio(2) 59.95% 60.69%61.78% 62.59% 61.59%
Non-Performing Assets to Total Assets 0.39% 0.18%0.18% 0.18% 0.19%
Allowance as a % of Loans 1.22% 1.24%1.26% 1.26% 1.26%
 
(1)  Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.
(2)  Efficiency ratio represents the ratio of non-interest expense to the sum of net interest income and non-interest income.
 

Loan Composition
The components of the Company’s loan portfolio at March 31, 2019 and December 31, 2018 are as follows:  

            
  (in thousands)  
  March 31,
2019
  December 31,
2018
 %
Change
  
Commercial and industrial $112,157  $109,362 2.6 %
Real estate – construction  140,279   144,865 (3.2)%
Real estate – commercial  577,270   552,549 4.5 %
Real estate – residential  89,455   84,123 6.3 %
Consumer  30,122   31,144 (3.3)%
Unearned fees  (790)  (742)6.6 %
   948,493   921,301 3.0 %
Allowance for loan losses  (11,582)  (11,398)1.6 %
Net Loans $936,911  $909,903 3.0 %
            

Deposit Composition
The components of the Company’s deposits at March 31, 2019 and December 31, 2018 are as follows:  


 
           
  (in thousands)  
  March 31,
2019
  December 31,
 2018
 % Change  
Non-interest-bearing $177,938  $176,655 0.7 %
NOW accounts  200,513   193,347 3.7 %
Savings deposits  256,527   258,666 (0.8)%
Money market deposits  41,742   43,936 (5.0)%
Listed service CD’s  46,259   39,807 16.2 %
Time deposits / IRA  153,918   130,863 17.6 %
Wholesale deposits  82,758   74,080 11.7 %
Total Deposits $959,655  $917,354 4.6 %
            

2019 First Quarter Financial Review

Net Income
Net income for the three months ended March 31, 2019 was $2.8 million, or $0.32 per diluted common share, compared to $2.7 million, or $0.31 per diluted common share, for the same period last year, an increase of 4.0%. The increase was due primarily to higher net interest income, partially offset by lower non-interest income and a higher effective tax rate of 26.4% compared to 23.2% during the same period last year.

Net Interest Income
Net interest income for the quarter ended March 31, 2019 was $9.3 million, an increase of 6.2% compared to $8.8 million in the corresponding prior year period. This was largely due to an increase of $66.8 million, or 6.8%, in average interest earning assets, primarily driven from strong growth in the loan portfolio.  

Net Interest Margin
The Company reported a net interest margin of 3.60% for the first quarter of 2019, compared to the 3.56% reported in the fourth quarter of 2018 and 3.63% reported in the first quarter of 2018. The 4 basis point improvement from the fourth quarter of 2018 was primarily the result of higher yielding interest-earning assets. The 3 basis point decline from the first quarter of 2018 was primarily the result of higher cost of funds.

Non-Interest Income
Non-interest income for the quarter ended March 31, 2019 totaled $1.2 million, a decrease of $153,000, or 11.7%, compared to $1.3 million in the corresponding prior-year period. This was largely the result of lower gains on the sale of SBA loans, mortgage banking revenues and service fees on deposit accounts, partially offset by higher other loan fees, primarily due to loan prepayment fees.

Non-Interest Expense
Non-interest expense for the quarter ended March 31, 2019 totaled $6.3 million, an increase of $68,000, or 1.1%, compared to the same period in 2018, mainly due to higher professional fees, partially offset by lower salaries and benefits and occupancy and equipment costs. The Company’s efficiency ratio was 59.95% for the quarter, compared to 61.59% for the same period in 2018.

Income Tax Expense
The Company’s effective tax rate increased to 26.4% for the three months ended March 31, 2019 compared to 23.2% for the same period last year. This was due to a lower tax benefit related to the accounting treatment of equity-based compensation, in which a $41,000 benefit was recognized in the first quarter of 2019 compared to a $90,000 benefit from the same period last year. Additionally, New Jersey enacted a Corporation Business Tax surtax of 2.5%, which did not take effect until July 1, 2018 and, as such, negatively impacted income tax expense by approximately $75,000 in the first quarter of 2019 compared to the same period in 2018.

At the present time, the Company is anticipating a 2019 effective tax rate of 28%.

Provision / Allowance for Loan Losses
During the quarter, the Company reported a $425,000 provision for loan losses, compared to $400,000 in the prior year period. The increase was largely due to the strong loan growth during the period. The Company also had $241,000 in net loan charge-offs during the quarter, compared to $106,000 of net loan charge-offs in the same period last year. The charge-offs during the first quarter of 2019 were primarily related to a $242,000 partial writedown on a $2.9 million residential construction loan, which was placed into non-accrual status during the quarter.

As of March 31, 2019, the Company's allowance for loan losses was $11.6 million, compared to $11.4 million at December 31, 2018. The loss allowance as a percentage of total loans was 1.22% at March 31, 2019, compared to 1.24% at December 31, 2018.

Financial Condition / Balance Sheet
At March 31, 2019, the Bank maintained capital ratios that were in excess of regulatory standards for well-capitalized institutions. The Bank’s Tier 1 capital to average assets ratio was 10.03%, common equity Tier 1 to risk weighted assets ratio was 11.00%, Tier 1 capital to risk weighted assets ratio was 11.00%, and total capital to risk weighted assets ratio was 12.16%. Due to the adoption of ASU 2016-02 (Topic 842), Leases, the Company recognized an operating right-of-use asset of $5.0 million and a lease liability of $5.1 million on its balance sheet as of March 31, 2019. This negatively impacted the Company’s capital ratios by approximately 5 basis points compared to December 31, 2018.

Total assets as of March 31, 2019 were $1.141 billion, compared to $1.096 billion at December 31, 2018 and $1.042 billion at March 31, 2018.

Total loans as of March 31, 2019 grew to $948.5 million, compared to $921.3 million reported at December 31, 2018 and $872.3 million at March 31, 2018. This loan growth was funded primarily from the increase in deposits.

Total deposits as of March 31, 2019 grew to $959.7 million, compared to $917.4 million as of December 31, 2018 and $870.9 million at March 31, 2018. Core checking deposits at March 31, 2019 were $378.5 million, compared to $370.0 million at December 31, 2018 and $375.9 million at March 31, 2018. The Company continues to focus on building core checking account relationships, which can vary from quarter to quarter due to seasonality in municipal and other relationships.

Asset Quality
The Company's non-performing assets at March 31, 2019 were $4.5 million, compared to $2.0 million at both December 31, 2018 and March 31, 2018. Non-performing assets to total assets at March 31, 2019 were 0.39%, compared to 0.18% at December 31, 2018 and 0.19% at March 31, 2018.

Non-accrual loans were $3.9 million at March 31, 2019, compared to $1.4 million at December 31, 2018 and $2.0 million at March 31, 2018. As previously mentioned, a $2.9 million residential construction loan was placed into non-accrual status during the current quarter and the Company subsequently recorded a $242,000 partial writedown on the loan. OREO was $585,000 at March 31, 2019 and December 31, 2018, compared to no OREO at March 31, 2018.

Troubled debt restructured loan balances amounted to $7.4 million at March 31, 2019, with all but $711,000 performing. This compared to $7.7 million at December 31, 2018 and $6.8 million at March 31, 2018.

About the Company
Two River Bancorp is the holding company for Two River Community Bank, which is headquartered in Tinton Falls, New Jersey. Two River Community Bank operates 14 branches along with two loan production offices throughout Monmouth, Union, Essex, and Ocean Counties, New Jersey. More information about Two River Community Bank and Two River Bancorp is available at www.tworiver.bank.

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 "continuing," "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; unanticipated effects of our new banking platform; 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, 2018. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company assumes no obligation for updating any such forward-looking statements at any time, except as required by law.

Investor Contact:Media Contact:
Adam Prior, Senior Vice PresidentAdam Cadmus, Marketing Director
The Equity Group Inc.Two River Community Bank
Phone: (212) 836-9606Phone: (732) 982-2167
Email: aprior@equityny.comEmail: acadmus@tworiverbank.com
  


 
TWO RIVER BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended March 31, 2019 and 2018
(in thousands, except per share data)
    
  Three Months Ended
March 31,
 
  2019  2018 
Interest Income:      
Loans, including fees $  11,312   $9,821 
Securities:      
Taxable  331   297 
Tax-exempt  239   282 
Interest-bearing deposits  187   67 
Total Interest Income  12,069   10,467 
Interest Expense:      
Deposits  2,418   1,358 
Securities sold under agreements to repurchase  11   14 
Federal Home Loan Bank (“FHLB”) and other borrowings  132   130 
Subordinated debt  165   165 
Total Interest Expense  2,726   1,667 
Net Interest Income  9,343   8,800 
Provision for Loan Losses     425    400 
Net Interest Income after Provision for Loan Losses  8,918   8,400 
Non-Interest Income:      
Service fees on deposit accounts  166   238 
Mortgage banking  280   338 
Other loan fees  160   111 
Earnings from investment in bank owned life insurance  143   130 
Gain on sale of SBA loans     206   331 
Other income     202   162 
Total Non-Interest Income  1,157   1,310 
Non-Interest Expenses:      
Salaries and employee benefits    3,841   3,885 
Occupancy and equipment    1,042   1,090 
Professional     434   340 
Insurance    65   57 
FDIC insurance and assessments     124   123 
Advertising     70   60 
Data processing     188   152 
Outside service fees     54   81 
OREO expenses, impairment and sales, net    4   (1)
Loan workout expenses  (8)  51 
Other operating     481   389 
Total Non-Interest Expenses  6,295   6,227 
Income before Income Taxes  3,780   3,483 
Income Tax Expense  997   807 
Net Income $  2,783  $2,676 
Earnings Per Common Share:      
Basic $  0.32  $0.32 
Diluted $  0.32  $0.31 
Weighted average common shares outstanding:      
Basic  8,583   8,447 
Diluted  8,712   8,675 
       


 
TWO RIVER BANCORP
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except share data)
     
 March 31, December 31, 
 2019 2018 
ASSETS      
Cash and due from banks$15,945 $24,067 
Interest-bearing deposits in bank 46,743   24,059 
Cash and cash equivalents 62,688  48,126 
        
Securities available for sale 23,552  24,407 
Securities held to maturity 45,838  47,455 
Equity securities 2,497  2,451 
Restricted investments, at cost 6,017  6,082 
Loans held for sale    1,496  1,496 
Loans 948,493  921,301 
Allowance for loan losses (11,582) (11,398)
Net loans 936,911  909,903 
       
OREO 585  585 
Bank owned life insurance 22,060  22,098 
Premises and equipment, net    6,173  5,917 
Operating right-of-use asset 4,997  - 
Accrued interest receivable  2,793  2,583 
Goodwill  18,109  18,109 
Other assets   6,805  7,207 
        
Total Assets$  1,140,521  $1,096,419 
       
LIABILITIES AND SHAREHOLDERS’ EQUITY       
Liabilities:      
Deposits:       
Non-interest-bearing$177,938  $176,655 
Interest-bearing   781,717  740,699 
Total Deposits   959,655   917,354 
        
Securities sold under agreements to repurchase  15,185   19,402 
FHLB and other borrowings   20,700  22,500 
Subordinated debt  9,932  9,923 
Accrued interest payable   153  119 
Lease liability 5,127  - 
Other liabilities   10,613   10,623 
       
Total Liabilities 1,021,365  979,921 
        
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 – 8,996,545 and 8,935,437 at March 31, 2019 and December 31, 2018, respectively      
Outstanding – 8,668,100 and 8,606,992 at March 31, 2019 and December 31, 2018, respectively 80,759   80,481 
Retained earnings   41,416  39,109 
Treasury stock, at cost; 328,445 shares at March 31, 2019 and December 31, 2018  (2,647) (2,647)
Accumulated other comprehensive loss   (372) (445)
Total Shareholders' Equity  119,156   116,498 
        
Total Liabilities and Shareholders’ Equity$1,140,521  $1,096,419 
       


 
TWO RIVER BANCORP
Selected Consolidated Financial Data (Unaudited)
 
Selected Consolidated Earnings Data
(in thousands, except per share data)
   
  Three Months Ended 
 March 31, December 31, March 31, 
Selected Consolidated Earnings Data:2019 2018 2018 
Total Interest Income$12,069  $11,776 $10,467 
Total Interest Expense 2,726   2,523  1,667 
Net Interest Income 9,343   9,253  8,800 
Provision for Loan Losses 425  -  400 
Net Interest Income after Provision for Loan Losses 8,918   9,253  8,400 
Other Non-Interest Income 1,157  1,370  1,310 
Other Non-Interest Expenses 6,295  6,447  6,227 
Income before Income Taxes 3,780  4,176  3,483 
Income Tax Expense 997   1,130  807 
Net Income$2,783 $3,046 $2,676 
       
Per Common Share Data:      
Basic Earnings$0.32  $0.36 $0.32 
Diluted Earnings$0.32  $0.35 $0.31 
Book Value$13.75  $13.54 $12.78 
Tangible Book Value(1)$11.66  $11.43 $10.66 
Average Common Shares Outstanding (in thousands):      
Basic 8,583   8,536  8,447 
Diluted 8,712   8,693  8,675 
          

 (1)  Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.

 
Selected Period End Balances
(in thousands)
           
 March 31, Dec. 31, Sept. 30, June 30, March 31, 
 2019 2018 2018 2018 2018 
Total Assets$   1,140,521 $1,096,419 $1,086,299 $1,055,527 $1,042,277 
Investment Securities and Restricted Stock 77,904  80,395  91,296  94,449  96,251 
Total Loans 948,493  921,301  900,895  890,369  872,327 
Allowance for Loan Losses (11,582) (11,398) (11,390) (11,201) (10,962)
Goodwill and Other Intangible Assets 18,109  18,109  18,109  18,109  18,109 
Total Deposits 959,655  917,354  905,745  880,879  870,904 
Repurchase Agreements 15,185  19,402  22,153  19,878  18,472 
FHLB and Other Borrowings 20,700  22,500  24,500  24,500  24,500 
Subordinated Debt 9,932  9,923  9,914  9,905  9,896 
Shareholders' Equity 119,156  116,498  113,891  111,347  108,980 
           
Asset Quality Data (by Quarter)          
(dollars in thousands)March 31, Dec. 31, Sept. 30, June 30, March 31, 
 2019 2018 2018 2018 2018 
Nonaccrual Loans$  3,908 $1,390 $1,390 $1,930 $1,972 
OREO 585  585  585  -  - 
Total Non-Performing Assets 4,493  1,975  1,975  1,930  1,972 
           
Troubled Debt Restructured Loans:          
Performing 6,726  6,842  5,678  5,831  5,965 
Non-Performing 711  877  877  877  878 
           
Non-Performing Loans to Total Loans 0.41% 0.15% 0.15% 0.22% 0.23%
Non-Performing Assets to Total Assets 0.39% 0.18% 0.18% 0.18% 0.19%
Allowance as a % of Loans 1.22% 1.24% 1.26% 1.26% 1.26%
           


      
Capital Ratios     
 March 31, 2019 December 31, 2018 
 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 Bancorp10.10 %9.20%10.10%12.25%10.14%9.10%10.14%12.34%
Two River Community Bank11.00%10.03%11.00%12.16%11.09%9.95%11.09%12.26%
"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” under the Federal Reserve definitions for bank holding companies, the Company is only required to have a Tier 1 Capital to Risk Weighted Assets ratio of at least 6.00% and a Total Capital to Risk Weighted Assets ratio of at least 10.0%.
 


 
Net Loan Charge-offs
(dollars in thousands)
                     
 Three Months Ended   
 March 31,  Dec. 31,  Sept. 30,  June 30,  March 31,  
 2019  2018  2018  2018  2018  
Net loan (charge-offs) recoveries:               
Charge-offs$(247) $-  $-  $(13) $(115) 
Recoveries 6   8   39   27   9  
Net loan (charge-offs) recoveries$(241) $8  $39  $14  $(106) 
Net loan (charge-offs) recoveries to average loans (annualized) (0.10)% 0.00 % 0.02 % 0.01 % (0.05)%
                     


 
Consolidated Average Balance Sheets & Yields
With Resultant Interest and Average Rates
    
 Three Months Ended Three Months Ended
(dollars in thousands)March 31, 2019 March 31, 2018
          
ASSETS                  
Interest-Earning Assets:Average
Balance
 Interest /
Income
Expense

 Average
Yield /
Rate

 Average
Balance

 Interest /
Income
Expense
 Average
Yield /
Rate
Interest-bearing deposits in banks$30,370 $187 2.50% $18,135 $67 1.50%
Investment securities79,234 570 2.88% 97,625 579 2.37%
Loans, net of unearned fees(1) (2)941,488 11,312 4.87% 868,544 9,821 4.59%
              
Total Interest-Earning Assets1,051,092 12,069 4.66% 984,304 10,467 4.31%
              
Non-Interest-Earning Assets:             
Allowance for loan losses(11,434)     (10,840)    
All other assets79,742      72,889     
              
Total Assets$1,119,400       $1,046,353      
              
LIABILITIES & SHAREHOLDERS' EQUITY             
Interest-Bearing Liabilities:             
NOW deposits$205,693 413 0.81% $236,674 310 0.53%
Savings deposits255,687 592 0.94% 248,488 354 0.58%
Money market deposits41,580 23 0.22% 58,348 25 0.17%
Time deposits256,603 1,390 2.20% 168,327 669 1.61%
Securities sold under agreements to repurchase15,549 11 0.29% 19,636 14 0.29%
FHLB and other borrowings25,711 132 2.08% 28,217 130 1.87%
Subordinated debt9,929 165 6.65% 9,893 165 6.67%
               
Total Interest-Bearing Liabilities810,752 2,726 1.36% 769,583 1,667 0.88%
               
Non-Interest-Bearing Liabilities:              
Demand deposits174,822      160,060     
Other liabilities16,075      9,033     
               
Total Non-Interest-Bearing Liabilities190,897      169,093     
               
Shareholders’ Equity117,751      107,677     
               
Total Liabilities and Shareholders’ Equity$1,119,400       $1,046,353      
              
NET INTEREST INCOME  $9,343      $8,800   
              
NET INTEREST SPREAD(3)    3.30%     3.43%
              
NET INTEREST MARGIN(4)    3.60%     3.63%

(1)  Included in interest income on loans are net unearned 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 
 March 31, Dec. 31, Sept. 30, June 30, March 31, 
 2019 2018 2018 2018 2018 
Total shareholders' equity$119,156 $116,498 $113,891 $111,347 $108,980 
Less: goodwill and other tangibles (18,109) (18,109) (18,109) (18,109) (18,109)
Tangible common shareholders’ equity$101,047 $98,389 $95,782 $93,238 $90,871 
                
Common shares outstanding 8,668  8,607  8,584  8,555  8,525 
Book value per common share$13.75 $13.54 $13.27 $13.02 $12.78 
                
Book value per common share$13.75 $13.54 $13.27 $13.02 $12.78 
Effect of intangible assets (2.09) (2.11) (2.11) (2.12) (2.12)
Tangible book value per common share$11.66 $11.43 $11.16 $10.90 $10.66 
           
Return on average assets1.01%1.10%1.04%1.00%1.04%
Effect of average intangible assets0.01%0.01%0.02%0.02%0.02%
Return on average tangible assets1.02%1.11%1.06%1.02%1.06%
           
Return on average equity9.59%10.52%9.98%9.67%10.08%
Effect of average intangible assets1.74%1.97%1.92%1.90%2.04%
Return on average tangible equity11.33%12.49%11.90%11.57%12.12%
           

 

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Source: Two River Bancorp

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