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Section 1: 8-K (FORM 8-K)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________

Form 8-K
______________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): January 30, 2018

Two River Bancorp
(Exact Name of Registrant as Specified in Charter)

New Jersey000-5188920-3700861
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

766 Shrewsbury Avenue, Tinton Falls, New Jersey 07724
(Address of Principal Executive Offices) (Zip Code)

(732) 389-8722
(Registrant's telephone number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 
 

Item 2.02. Results of Operations and Financial Condition.

On January 30, 2018, Two River Bancorp issued a press release containing financial information regarding its results of operations and financial condition for the fourth quarter and twelve months ended December 31, 2017.

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated January 30, 2018


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Two River Bancorp
   
   
Date: January 30, 2018By: /s/ A. Richard Abrahamian        
  A. Richard Abrahamian
  Executive Vice President and Chief Financial Officer
  

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Section 2: EX-99.1 (PRESS RELEASE)

EdgarFiling

EXHIBIT 99.1

Two River Bancorp Reports 2017 Fourth Quarter and Annual Financial Results

TINTON FALLS, N.J., Jan. 30, 2018 (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, 2017, highlighted by solid loan growth during the quarter. All share and per share data for all referenced reporting periods have been adjusted for a 5% stock dividend paid on February 28, 2017.

Tax Cuts and Jobs Act
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. Among the other changes was a permanent reduction in the Federal corporate income tax rate from 34% to 21%, effective January 1, 2018. As a result of this change, the Company had to revalue its net deferred tax asset at December 31, 2017. The Company reduced its net deferred tax asset by $1.78 million, or $0.21 per diluted share, which was recorded as a one-time non-cash charge to income tax expense in the fourth quarter of 2017. The reduction of the Company’s 2018 Federal corporate tax rate to 21% will result in a significant tax benefit in 2018 and beyond and it is anticipated that the majority of this charge will be recouped in 2018. A portion of this tax benefit will be used to reinvest in the Company’s people, fund its growth, and further support the communities it serves. The charge impacted several metrics throughout the quarter and annual results.

Operating and Financial Highlights
(all comparisons to the respective prior year’s period unless otherwise noted)

Fourth Quarter 2017

Annual 2017

Management Commentary
William D. Moss, President and CEO, stated, “The Company achieved exceptional loan and deposit growth in the fourth quarter, which fueled a strong finish to the year and provides a very strong base for 2018. Commercial real estate loans remain the strongest catalyst for this growth, as we benefited from a robust loan pipeline across our geographic footprint. The fee income contributions from both our SBA and mortgage business lines were strong throughout 2017, reflected in a 21.1% and 36.2% increase, respectively. We are pleased to have exceeded the $1.0 billion mark in assets during the year, and expect earnings to benefit by loan growth in future quarters, along with the positive impact of the lower tax rate.”

Dividend Information
On January 17, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.045 per share, payable on February 28, 2018 to shareholders of record as of the close of business on February 7, 2018. This marks the 20th consecutive quarterly cash dividend, which is in addition to the 5% stock dividend paid in February 2017. 

Key Quarterly Performance Metrics

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

 12 Mo.
Ended

2017
 2017
 2017
 2017
 2016
  12/31/2017
 12/31/2016
Net Income (in thousands)$335  $2,237  $2,128   $1,802  $2,567    $6,502   $8,631 
Earnings per Common Share – Diluted$0.04  $0.26  $0.25   $0.21  $0.30    $0.75   $1.01  
Return on Average Assets 0.13%  0.89%  0.87%  0.76%  1.08%   0.66%  0.96%
Return on Average Tangible Assets(1) 0.13%  0.91%  0.88%  0.77%  1.10%   0.67%  0.98%
Return on Average Equity 1.24%  8.39%  8.26%  7.18%  10.25%   6.22%  8.94%
Return on Average Tangible Equity(1) 1.49%  10.13%  10.01%  8.74%  12.53%   7.52%  11.00%
Net Interest Margin 3.56%  3.62%  3.49%  3.45%  3.43%   3.53%  3.53%
Non-Performing Assets to Total Assets 0.20%  0.23%  0.32%  0.18%  0.19%   0.20%  0.19%
Allowance as a % of Loans 1.25%  1.25%  1.25%  1.25%  1.27%   1.25%  1.27%
 
(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 December 31, 2017 and December 31, 2016 are as follows:  

   
  (in thousands)
  December 31,
2017
  December 31,
2016
 
Commercial and industrial $  101,371  $  93,697 
Real estate – construction  118,094   111,914 
Real estate – commercial  537,733   460,685 
Real estate – residential  64,238   59,065 
Consumer  30,203   28,279 
Unearned fees  (765)  (548)
   850,874   753,092 
Allowance for loan losses  (10,668)  (9,565)
Net Loans $  840,206  $  743,527 
 

Deposit Composition

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


 
  
  (in thousands)
  December 31,
2017
  December 31,
 2016
 
Non-interest-bearing $  167,297  $  160,104 
NOW accounts  232,673   152,771 
Savings deposits  242,448   261,438 
Money market deposits  59,818   62,495 
Listed service CD’s  44,436   47,648 
Time deposits / IRA  74,183   56,489 
Wholesale deposits  40,702   35,622 
Total Deposits $  861,557  $  776,567 
 

2017 Fourth Quarter and Year End Financial Review

Net Income  
Net income for the three months ended December 31, 2017 was $335,000, or $0.04 per diluted common share, compared to $2.57 million, or $0.30 per diluted common share, for the same period last year. The decrease in net income was largely the result of the previously mentioned $1.78 million, or $0.21 per diluted share, write-down of the Company’s deferred tax asset from 34% to 21%, which will be the Company’s new corporate tax rate beginning in 2018. Additionally, the provision for loan losses was $675,000 for the quarter due to strong loan growth, compared to a loan loss recovery of $345,000 in the same prior year period, which was the result of a recovery related to a credit previously charged off.

On a linked quarter basis, fourth quarter 2017 net income decreased to $335,000 from $2.24 million for the third quarter of 2017.

Net income for the twelve months ended December 31, 2017 decreased to $6.50 million, or $0.75 per diluted share, compared to $8.63 million, or $1.01 per diluted share, in the same prior year period. Excluding the effect of the previously mentioned deferred tax asset writedown in 2017 and the BOLI death benefit in 2016, net income increased 6.6% for the twelve months ended December 31, 2017.

Net Interest Income  
Net interest income for the quarter ended December 31, 2017 was $8.53 million, an increase of 12.3% compared to $7.59 million in the corresponding prior year period. This increase was largely due to an increase of $71.6 million, or 8.4%, in total interest earning assets, primarily attributable to growth in the loan portfolio. On a linked quarter basis, net interest income increased $113,000, or 1.3%, from $8.42 million.

For the year ended December 31, 2017, net interest income increased 10.4% to $32.5 million from $29.5 million in the prior year.

Net Interest Margin
The Company reported a net interest margin of 3.56% for the fourth quarter of 2017, compared to 3.62% in the third quarter of 2017 and 3.43% reported for the fourth quarter of 2016. The margin improvement from the prior year was primarily the result of slightly higher yielding interest-earning assets coupled with a higher level of average core checking deposits.  

Net interest margin for the year ended December 31, 2017 was 3.53%, unchanged from the prior year.

Non-Interest Income  
Non-interest income for the quarter ended December 31, 2017 totaled $1.34 million, a decrease of $104,000, or 7.19%, compared to the same period in 2016. The Company reported lower loan fees and, to a lesser extent, lower gains from the sale of SBA loans. Residential mortgage banking revenue was $325,000 during the quarter, as compared to $331,000 in the prior year period. 

On a linked quarter basis, non-interest income decreased by $110,000 from the third quarter of 2017, mainly due to decreases in residential mortgage banking income and gains from the sale of SBA loans. Residential mortgage banking revenue decreased $33,000, or 9.2%, from $358,000 during the third quarter of 2017. Gains from the sale of SBA loans decreased $71,000, or 23.2%, from $306,000 during the third quarter of 2017 due to the timing of loan closings.

For the year ended December 31, 2017, non-interest income decreased slightly by $30,000, or 0.5%, to $5.46 million from the prior year due to the BOLI death benefit in 2016. Excluding this death benefit, non-interest income increased $832,000, or 18.0%. Mortgage banking revenue increased by 36.2% to $1.58 million, while gains from the sale of SBA loans increased 21.2% to $1.05 million.

Non-Interest Expense
Non-interest expense for the quarter ended December 31, 2017 totaled $5.92 million, an increase from the $5.36 million reported in same period in 2016, primarily due to a rise in salaries and employee benefits along with a one-time $144,000 expense recovery in the fourth quarter of 2016 related to a credit previously charged off. On a linked quarter basis, non-interest expense decreased $256,000, or 4.1%, from $6.18 million due to lower salaries and benefits.

For the year ended December 31, 2017, non-interest expense increased $2.47 million, or 11.5%, to $23.9 million compared to the prior year. The increase in non-interest expense was largely attributable to a rise in salaries and employee benefits coupled with $394,000 of one-time expense recoveries in 2016 relating to both the settlement of an OREO property and the collection from the above-mentioned credit previously charged off.

Provision for Loan Losses  
During the quarter, the Company expensed a $675,000 loan loss provision, compared to a loan loss recovery of $345,000 in the same prior year period. The loan loss provision was largely due to the $34.8 million of loan growth in the fourth quarter 2017. The Company had net charge-offs of approximately $230,000 for the period. 

For the year ended December 31, 2017, a loan loss provision of $1.53 million was expensed, compared to $515,000 for the prior year.

As of December 31, 2017, the Company's allowance for loan losses was $10.67 million, compared to $9.57 million as of December 31, 2016. The loss allowance as a percentage of total loans was 1.25% at December 31, 2017, compared to 1.27% at December 31, 2016.

Financial Condition / Balance Sheet

At December 31, 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 8.85%, common equity Tier 1 to risk weighted assets ratio was 9.68%, Tier 1 capital to risk weighted assets ratio was 9.68%, and total capital to risk weighted assets ratio was 11.93%.

Total assets as of December 31, 2017 were $1.04 billion, an increase of 10.6% compared to $940.2 million as of December 31, 2016.

Total loans as of December 31, 2017 were $850.9 million, an increase of 13.0% compared to $753.1 million reported at December 31, 2016.

Total deposits as of December 31, 2017 were $861.6 million, an increase of 10.9% compared to $776.6 million as of December 31, 2016. Core checking deposits at December 31, 2017 increased to $400.0 million, up $87.1 million, or 27.8%, from December 31, 2016.

Asset Quality  
The Company's non-performing assets at December 31, 2017 were $2.07 million compared to $2.35 million at September 30, 2017 and $1.81 million at December 31, 2016. Non-performing assets to total assets at December 31, 2017 declined to 0.20%, compared to 0.23% at September 30, 2017, and remained relatively unchanged compared to 0.19% at December 31, 2016.

Non-accrual loans decreased to $2.07 million at December 31, 2017, as compared to $2.35 million at September 30, 2017, and increased from $1.55 million at December 31, 2016. There was no OREO at both December 31, 2017 and September 30, 2017, compared to OREO of $259,000 at December 31, 2016. 

Troubled debt restructured loan balances amounted to $7.05 million at December 31, 2017, with all but $994,000 performing. This compared to $8.05 million at September 30, 2017 and $8.23 million at December 31, 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 14 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.

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


TWO RIVER BANCORP
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months and Twelve Months Ended December 31, 2017 and 2016
(in thousands, except per share data)

  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
 

 
   2017   2016  2017   2016 
Interest Income:           
Loans, including fees $  9,438    $   8,463  $  35,801   $  32,798 
Securities:                 
Taxable   273    205   988   776 
Tax-exempt   270    253   1,101   917 
Interest-bearing deposits   93    49   350   133 
Total Interest Income   10,074    8,970   38,240   34,624 
Interest Expense:                
Deposits   1,193     1,029   4,363   3,829 
Securities sold under agreements to repurchase   16     17   66   61 
Federal Home Loan Bank ("FHLB") and other borrowings  171   166  620   618 
Subordinated debt   165     164   658   656 
Total Interest Expense   1,545     1,376   5,707   5,164 
Net Interest Income   8,529     7,594   32,533   29,460 
Provision for (Recovery of) Loan Losses     675        (345 1,530   515 
Net Interest Income after Provision for (Recovery of) Loan Losses   7,854     7,939   31,003   28,945 
Non-Interest Income:                
Service fees on deposit accounts   237     160   772   587 
Mortgage banking  325   331  1,583   1,162 
Other loan fees   186     299   588   610 
Earnings from investment in bank owned life insurance   133     140   544   477 
Death benefit on bank owned life insurance   -         -     862 
Gain on sale of SBA loans  235   293  1,052   868 
Net gain on sale of securities    -         -     72 
Other income  227   224  920   851 
Total Non-Interest Income   1,343     1,447   5,459   5,489 
Non-Interest Expenses:               
Salaries and employee benefits   3,492     3,235   14,046   12,844 
Occupancy and equipment   1,026     1,033   4,241   4,117 
Professional   395     310   1,497   1,198 
Insurance   58     56   216   216 
FDIC insurance and assessments   113     88   467   412 
Advertising   105     100   450   415 
Data processing   147     149   553   554 
Outside services fees   126     131   473   500 
Amortization of identifiable intangibles          -       -     9 
OREO expenses, impairment and sales, net  4    (3) 48   (274)
Loan workout expenses  59   (69) 233   73 
Other operating   394     330   1,718   1,411 
Total Non-Interest Expenses   5,919     5,360   23,942   21,475 
Income before Income Taxes   3,278     4,026   12,520   12,959 
Income Tax Expense   2,943     1,459   6,018   4,328 
Net Income  $  335   $  2,567 $  6,502  $  8,631 
Earnings Per Common Share:            
Basic $  0.04    $  0.31  $  0.78   $  1.04  
Diluted $  0.04    $  0.30  $  0.75   $  1.01  
Weighted average common shares outstanding:               
Basic   8,420     8,322   8,388   8,321 
Diluted   8,673     8,565   8,658   8,530 
                


TWO RIVER BANCORP
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except share data)

  December 31, December 31, 
  2017 2016 
ASSETS        
Cash and due from banks$29,575  $19,844 
Interest-bearing deposits in bank  18,644    22,233 
Cash and cash equivalents  48,219    42,077 
           
Securities available for sale    31,132    34,464 
Securities held to maturity   58,002    57,843 
Restricted investments, at cost    5,430    4,805 
Loans held for sale   2,581   4,537 
Loans  850,874    753,092 
Allowance for loan losses  (10,668)  (9,565)
Net loans  840,206    743,527 
          
OREO     -     259 
Bank owned life insurance  21,573    21,029 
Premises and equipment, net    6,239    4,662 
Accrued interest receivable    2,554    2,234 
Goodwill    18,109    18,109 
Other assets    5,753    6,665 
           
Total Assets$  1,039,798  $940,211 
       
LIABILITIES AND SHAREHOLDERS’ EQUITY         
Liabilities:      
Deposits:         
Non-interest-bearing$167,297  $160,104 
Interest-bearing    694,260    616,463 
Total Deposits    861,557    776,567 
           
Securities sold under agreements to repurchase    27,120    19,915 
FHLB and other borrowings    25,800    25,300 
Subordinated debt  9,888   9,855 
Accrued interest payable    70    100 
Other liabilities    8,792    7,758 
           
Total Liabilities  933,227    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 –  8,782,124 and 8,677,536 at December 31, 2017 and 2016, respectively      
Outstanding –  8,470,030 and 8,365,442 at December 31, 2017 and 2016, respectively  79,678   79,056 
Retained earnings    29,593    24,447 
Treasury stock, at cost; 312,094 shares at December 31, 2017 and 2016, respectively  (2,396) (2,396)
Accumulated other comprehensive loss    (304)  (391)
Total Shareholders' Equity    106,571    100,716 
           
Total Liabilities and Shareholders’ Equity$1,039,798  $940,211 
 

    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: 2017  2017  2016  2017  2016 
Total Interest Income$  10,074  $  9,824  $  8,970  $  38,240  $  34,624  
Total Interest Expense 1,545   1,408   1,376   5,707     5,164  
Net Interest Income 8,529   8,416   7,594   32,533   29,460  
Provision for (Recovery of) Loan Losses 675   255   (345) 1,530   515  
Net Interest Income after Provision for (Recovery of) Loan Losses 7,854   8,161   7,939   31,003   28,945  
Other Non-Interest Income 1,343   1,453   1,447   5,459   5,489  
Other Non-Interest Expenses 5,919   6,175   5,360   23,942   21,475  
Income before Income Taxes 3,278   3,439   4,026   12,520   12,959  
Income Tax Expense 2,943   1,202   1,459   6,018   4,328  
Net Income $  335  $  2,237  $  2,567  $  6,502  $  8,631  
           
Per Common Share Data:          
Basic Earnings$   0.04  $  0.27  $  0.31  $  0.78  $  1.04  
Diluted Earnings$  0.04  $  0.26  $  0.30  $  0.75  $  1.01  
Book Value$  12.58  $  12.60  $  12.04  $  12.58  $  12.04  
Tangible Book Value(1)$  10.44  $   10.46  $  9.88  $  10.44  $   9.88  
Average Common Shares Outstanding (in thousands):               
Basic 8,420   8,393   8,322   8,388   8,321  
Diluted 8,673   8,656   8,565   8,658   8,530  
 
(1)   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, 
  2017  2017  2017  2017  2016 
Total Assets$  1,039,798 $  1,000,245 $  983,099 $  967,073 $  940,211 
Investment Securities and Restricted Stock 94,564  92,641  92,634  94,850  97,112 
Total Loans 850,874  816,078  794,908  762,687  753,092 
Allowance for Loan Losses (10,668) (10,223) (9,953) (9,567) (9,565)
Goodwill and Other Intangible Assets 18,109  18,109  18,109  18,109  18,109 
Total Deposits 861,557  821,872  810,725  799,705  776,567 
Repurchase Agreements 27,120  22,576  25,823  21,437  19,915 
FHLB and Other Borrowings 25,800  30,300  24,300  24,300  25,300 
Subordinated Debt 9,888  9,879  9,871  9,863  9,855 
Shareholders' Equity 106,571  106,567  104,524  102,406  100,716 
           
Asset Quality Data (by Quarter)          
           
(dollars in thousands)Dec. 31, Sept. 30, June 30, March 31, Dec. 31, 
  2017  2017  2017  2017  2016 
Nonaccrual Loans$  2,070 $  2,345 $  2,946 $  1,511 $  1,548 
OREO  -  -  233  259  259 
Total Non-Performing Assets 2,070  2,345  3,179  1,770  1,807 
           
Troubled Debt Restructured Loans:          
Performing 6,053  6,925  6,990  7,754  8,075 
Non-Performing 994  1,129  960  405  157 
           
Non-Performing Loans to Total Loans 0.24% 0.29% 0.37% 0.20% 0.21%
Non-Performing Assets to Total Assets  0.20% 0.23% 0.32% 0.18% 0.19%
Allowance as a % of Loans  1.25% 1.25% 1.25% 1.25% 1.27%
           

Capital Ratios

  December 31, 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 Bancorp9.68 % 8.85% 9.68% 11.93% 10.33%  8.94% 10.33% 12.76%
Two River Community Bank10.66% 9.76% 10.66% 11.82% 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)December 31, 2017 December 31, 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$28,598 $93 1.29% $37,650 $49 0.52%
Investment securities93,841 543 2.31% 89,828 458 2.04%
Loans, net of unearned fees(1) (2)828,725 9,438 4.52% 752,067 8,463 4.48%
              
Total Interest-Earning Assets951,164 10,074 4.20% 879,545 8,970 4.06%
              
Non-Interest-Earning Assets:             
Allowance for loan losses(10,326)     (9,749)    
All other assets79,802      76,546     
              
Total Assets$1,020,640       $946,342      
              
LIABILITIES & SHAREHOLDERS' EQUITY             
Interest-Bearing Liabilities:             
NOW deposits$215,563 276 0.51% $151,543 158 0.41%
Savings deposits247,655 326 0.52% 253,281 336 0.53%
Money market deposits63,284 27 0.17% 69,303 28 0.16%
Time deposits147,035 564 1.52% 141,336 507 1.43%
Securities sold under agreements to repurchase22,103 16 0.29% 21,085 17 0.32%
FHLB and other borrowings31,199 171 2.17% 34,213 166 1.93%
Subordinated debt9,885 165 6.68% 9,852 164 6.66%
               
Total Interest-Bearing Liabilities736,724 1,545 0.83% 680,613 1,376 0.80%
               
Non-Interest-Bearing Liabilities:              
Demand deposits167,945      157,511     
Other liabilities8,593      8,631     
               
Total Non-Interest-Bearing Liabilities176,538      166,142     
               
Stockholders’ Equity107,378      99,587     
               
Total Liabilities and Shareholders’ Equity$1,020,640       $946,342      
              
NET INTEREST INCOME  $8,529      $7,594   
              
NET INTEREST SPREAD(3)    3.37%     3.26%
              
NET INTEREST MARGIN(4)    3.56%     3.43%
 
(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, 2017 December 31, 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$33,255 $350 1.05% $26,241 $133 0.51%
Investment securities94,052 2,089 2.22% 84,227 1,693 2.01%
Loans, net of unearned fees(1) (2)793,671 35,801 4.51% 724,511 32,798 4.53%
              
Total Interest-Earning Assets920,978 38,240 4.15% 834,979 34,624 4.15%
              
Non-Interest Earning Assets:             
Allowance for loan losses(9,933)     (9,275)    
All other assets79,850      77,181     
              
Total Assets$990,895       $902,885      
              
LIABILITIES & SHAREHOLDERS' EQUITY             
Interest-Bearing Liabilities:             
NOW deposits$201,490 958 0.48% $151,360 649 0.43%
Savings deposits256,222 1,330 0.52% 233,514 1,165 0.50%
Money market deposits63,093 107 0.17% 72,721 119 0.16%
Time deposits135,326 1,968 1.45% 133,842 1,896 1.42%
Securities sold under agreements to repurchase22,066 66 0.30% 19,309 61 0.32%
FHLB and other borrowings26,544 620 2.34% 27,304 618 2.26%
Subordinated debt9,872 658 6.67% 9,840 656 6.67%
               
Total Interest-Bearing Liabilities714,613 5,707 0.80% 647,890 5,164 0.80%
                
Non-Interest-Bearing Liabilities:               
Demand deposits163,707      150,495     
Other liabilities8,003      7,919     
                
Total Non-Interest-Bearing Liabilities171,710      158,414     
                
Shareholders’ Equity104,572      96,581     
               
Total Liabilities and Shareholders’ Equity$990,895       $902,885      
              
NET INTEREST INCOME  $32,533      $29,460   
              
NET INTEREST SPREAD(3)    3.35%     3.35%
              
NET INTEREST MARGIN(4)    3.53%     3.53%
 
(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 "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, 
 2017 2017 2017 2017 2016 2017 2016 
Total shareholders' equity$106,571 $106,567 $104,524 $102,406 $100,716 $106,571 $100,716 
Less: goodwill and other tangibles (18,109) (18,109) (18,109) (18,109) (18,109) (18,109) (18,109)
Tangible common shareholders’ equity$88,462 $88,458 $86,415 $84,297 $82,607 $88,462 $82,607 
                      
Common shares outstanding 8,470  8,454  8,429  8,389  8,365  8,470  8,365 
Book value per common share$12.58 $12.60 $12.40 $12.21 $12.04 $12.58 $12.04 
                      
Book value per common share$12.58 $12.60 $12.40 $12.21 $12.04 $12.58 $12.04 
Effect of intangible assets (2.14) (2.14) (2.15) (2.16) (2.16) (2.14) (2.16)
Tangible book value per common share$10.44 $10.46 $10.25 $10.05 $9.88 $10.44 $9.88 
               
Return on average assets0.13%0.89%0.87%0.76%1.08%0.66%0.96%
Effect of average intangible assets- 0.02%0.01%0.01%0.02%0.01%0.02%
Return on average tangible assets0.13%0.91%0.88%0.77%1.10%0.67%0.98%
               
Return on average equity1.24%8.39%8.26%7.18%10.25%6.22%8.94%
Effect of average intangible assets0.25%1.74%1.75%1.56%2.28%1.30%2.06%
Return on average tangible equity1.49%10.13%10.01%8.74%12.53%7.52%11.00%

 

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