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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): October 25, 2019

 

  

SB ONE BANCORP

(Exact name of registrant as specified in its charter)

 

New Jersey
(State or other jurisdiction of
incorporation or organization)
 

001-12569

(Commission
File Number)

  22-3475473
(I.R.S. Employer
Identification No.)

 

100 Enterprise Dr.

Rockaway, New Jersey 07866
(Address of principal executive offices, zip code)

 

Registrant’s telephone number, including area code: (844) 256-7328 

 

Not Applicable

(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))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, no par value SBBX The NASDAQ Stock Market LLC

 

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

 

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 October 25, 2019, SB One Bancorp (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2019. A copy of the press release is furnished as Exhibit 99.1 hereto and is hereby incorporated by reference herein.

 

The information contained in this Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information or exhibit be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

 

Item 9.01.Financial Statements and Exhibits.

 

(d)Exhibits.

 

Exhibit

Number

  Description
99.1   Press Release, dated October 25, 2019.

 

 

 

 

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.

 

  SB ONE BANCORP
     
     
Date: October 25, 2019 By: /s/ Adriano Duarte
    Adriano Duarte
   

Executive Vice President and

Chief Financial Officer

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit 99.1

95 State Route 17

Paramus, NJ 07652

 

 

SB ONE BANCORP REPORTS A 57% INCREASE IN NET INCOME AND DILUTED EPS OF $0.55 FOR THE THIRD QUARTER 2019

 

PARAMUS, NEW JERSEY – October 25, 2019 – SB One Bancorp (the “Company”) (Nasdaq: SBBX), the holding company for SB One Bank (the “Bank”), today reported net income of $5.1 million, or $0.55 per basic and diluted share, for the quarter ended September 30, 2019, an increase of 57.3%, as compared to net income of $3.3 million, or $0.42 per basic share and $0.41 per diluted share, for the quarter ended September 30, 2018. The increase in net income for the quarter ended September 30, 2019 was driven by a $3.7 million, or 33.6%, increase in net interest income attributable to loan and deposit growth and the merger with Enterprise Bank NJ (“Enterprise”), and a $585 thousand increase in non-interest income as compared to the same period last year. The increase in net income was partially offset by a $1.2 million, or 13.7%, increase in non-interest expense. The non-interest expense increase was mainly due to a $1.2 million, or 23.7%, increase in compensation mainly from the Enterprise merger, net of realized cost savings, and to support the continued growth of the Company offset by a decrease in merger related expenses of $605 thousand.

 

The Company reported net income of $17.2 million, or $1.84 per basic and $1.83 diluted share, for the nine months ended September 30, 2019, an increase of 127.4%, as compared to $7.6 million, or $0.97 per basic share and $0.96 per diluted share, for the same period last year. For the nine months ended September 30, 2019, net income growth was driven by an increase in net interest income of $11.4 million, or 34.7%, resulting from growth of $18.9 million in loan interest income which was attributable to organic loan growth and the merger with Enterprise. In addition, non-interest income increased $2.9 million, or 34.8%, from a $1.2 million increase in insurance commissions and fees as compared to the same period last year. The increase in net income was partially offset by an increase in non-interest expense of $754 thousand, or 2.5%.

 

Anthony Labozzetta, President and CEO of SB One Bancorp and SB One Bank stated, “We continue to have strong growth in all of our business lines. Despite the volatile interest rate environment, our commercial lending team grew loans at an annualized rate of 10.2%. Our Insurance Company continues to out-perform and grew commission income 19.4% over the same period last year. Our Retail deposits grew at an annualized rate of 14.5%. Furthermore, the activities and pipelines in each of our business lines remain robust.” Mr. Labozzetta added, “While our margin compressed this quarter, we are seeing a reduction in our costs of deposits and borrowings, which was evident in the month of September and we expect that positive trend to continue into the fourth quarter”.

 

Mr. Labozzetta also stated, “We continue to experience improving trends in asset quality with our ratio of non-performing assets to total assets decreasing 26 basis points to 0.87%”.

 

Declaration of Quarterly Dividend

On October 24, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.085 per share, which is payable on November 20, 2019 to common shareholders of record as of the close of business on November 6, 2019.

 

Financial Performance

Net Income. For the quarter ended September 30, 2019, the Company reported net income of $5.1 million, or $0.55 per basic and diluted share, an increase of 57.3%, as compared to net income of $3.3 million, or $0.42 per basic and $0.41 diluted share, for the quarter ended September 30, 2018.

 

 

 

 

The increase in net income for the quarter ended September 30, 2019 was driven by a $3.7 million, or 33.6%, increase in net interest income resulting from loan and deposit growth, the Enterprise merger, and a $585 thousand increase in non-interest income mainly due to a $297 thousand increase in insurance commissions and fees. Non-interest expenses increased $1.2 million to $10.2 million for the third quarter 2019 as compared to $9.0 million for the third quarter 2018. The increase in non-interest expenses was primarily attributable to an increase in salaries and employee benefits of $1.2 million resulting from the merger with Enterprise and the continued growth of the Company. In addition, data processing increased $290 thousand and write-downs related to foreclosed real estate increased $152 thousand. The increase in non-interest expenses was partially offset by a decrease in merger related expenses of $605 thousand as compared to the same quarter of 2018.

 

For the nine months ended September 30, 2019, the Company reported net income of $17.2 million, or $1.84 per basic share and $1.83 per diluted share, an increase of 127.4%, as compared to net income of $7.6 million, or $0.97 per basic share and $0.96 diluted share, for the same period last year.

 

Net Interest Income. Net interest income on a fully tax equivalent basis increased $3.5 million, or 31.5%, to $14.8 million for the third quarter of 2019, as compared to $11.2 million for the same period in 2018. The increase in net interest income was largely due to a $440.4 million, or 32.5%, increase in average interest earning assets, principally loans receivable, which increased $395.8 million, or 34.3%, led by organic growth and the December 2018 closing of the Enterprise merger. The net interest margin decreased 3 basis points to 3.26% for the third quarter of 2019, as compared to the same period in 2018, as a result of an increase in cost of funds of 44 basis points mainly due to a surge in rates on deposits. The increase in the Company’s cost of funds was partially offset by an increase in yield on earning assets of 34 basis points driven by an increase in yields on loans receivable of 42 basis points.

 

Net interest income on a fully tax equivalent basis increased $11.2 million, or 33.5%, to $44.6 million for the first nine months of 2019 as compared to $33.4 million for the same period in 2018. The increase in net interest income was largely due to a $446.1 million, or 34.2%, increase in average interest earning assets, principally loans receivable, which increased $412.2 million, or 37.1%, driven by organic growth and the Enterprise merger.

 

Provision for Loan Losses. Provision for loan losses increased $315 thousand, or 98.1%, to $636 thousand for the third quarter of 2019, as compared to $321 thousand for the same period in 2018.

 

Provision for loan losses increased $756 thousand, or 61.6%, to $2.0 million for the first nine months of 2019, as compared to $1.2 million for the same period in 2018.

 

Non-interest Income. Non-interest income increased $585 thousand, or 23.2%, to $3.1 million for the third quarter of 2019, as compared to the same period in 2018. The growth was largely due to an increase in insurance commissions and fees relating to SB One Insurance Agency of $297 thousand, or 19.4%, for the third quarter of 2019, as compared to the same period in 2018.

 

Non-interest income increased $2.9 million, or 34.8%, to $11.1 million for the first nine months of 2019 as compared to the same period last year. The increase was principally due to $1.2 million increase in insurance commissions and fees relating to SB One Insurance Agency, and a $1.5 million increase in gains on sale of securities. The aforementioned increases were partially offset by a $292 thousand loss on the disposal of fixed assets relating to closing of the Company’s corporate center in Rockaway, NJ, and the sale of the Andover branch.

 

Non-interest Expense. The Company’s non-interest expenses increased $1.2 million, or 13.7%, to $10.2 million for the third quarter of 2019, as compared to the same period in 2018. The increase in non-interest expenses occurred largely in salaries and employee benefits of $1.2 million, data processing of $290 thousand and expenses and write-downs related to foreclosed real estate of $152 thousand. The increase in non-interest expenses for the third quarter of 2019, as compared to the same period in 2018, was the result of the Company’s continued growth, inclusive of the Enterprise merger net of cost savings. The increase in expenses and write-downs related to foreclosed real estate was driven by a one-time charge for write-downs of $149 thousand on three properties. The aforementioned increases were partially offset by decreases in professional fees and FDIC assessment costs of $111 thousand and $45 thousand, respectively.

 

The Company’s non-interest expenses increased $754 thousand, or 2.5%, to $30.9 million for the first nine months of 2019 as compared to the same period last year. The increase in non-interest expenses was primarily due to increases in salaries and employee benefits of $3.2 million, occupancy of $518 thousand and data processing of $499 thousand. The aforementioned increase was partially offset by a decrease in merger related expenses of $4.3 million.

 

 

 

 

Income Tax Expense. The Company’s income tax expenses increased $863 thousand to $1.8 million for the third quarter of 2019, as compared to the same period last year. The Company’s effective tax rate for the third quarter of 2019 was 26.1%, as compared to 22.6% for the same period in 2018.

 

The Company’s income tax expenses increased $3.1 million to $5.2 million for the first nine months of 2019, as compared to the same period last year as a result of increased pre-tax income. The Company’s effective tax rate for the first nine months of 2019 was 23.1%, as compared to 21.5% for the nine months ended September 30, 2018.

 

Financial Condition

At September 30, 2019, the Company’s total assets were $1.9 billion, an increase of $138.6 million, or 7.7%, as compared to total assets of $1.8 billion at December 31, 2018. The increase was mainly attributable to an increase in loans receivable of $88.8 million, or 6.0%, to $1.6 billion.

 

The Company’s total deposits increased $172.9 million, or 12.8%, to $1.5 billion at September 30, 2019, from $1.4 billion at December 31, 2018. The growth in deposits was mostly due to an increase in interest bearing deposits of $157.0 million, or 14.3%, and an increase in non-interest bearing deposits of $15.9 million, or 6.1%, at September 30, 2019, as compared to December 31, 2018.

 

At September 30, 2019, the Company’s total stockholders’ equity was $196.1 million, an increase of $10.6 million when compared to December 31, 2018. At September 30, 2019, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 10.22%, 12.00%, 12.61% and 12.00%, respectively, all in excess of the ratios required to be deemed “well-capitalized.”

 

Asset and Credit Quality

The ratio of non-performing assets (“NPAs”), which include non-accrual loans, loans 90 days past due and still accruing, troubled debt restructured loans currently performing in accordance with renegotiated terms and foreclosed real estate, to total assets decreased to 0.87% at September 30, 2019 as compared to 1.43% at December 31, 2018. The decrease in NPAs is mainly attributable to the payoff of two non-accrual commercial real estate loans totaling approximately $8.9 million. NPAs exclude $3.0 million of Purchased Credit-Impaired (“PCI”) loans acquired through the merger with Community Bank of Bergen County (“Community Bank”). NPAs decreased $8.9 million to $16.9 million at September 30, 2019, as compared to $25.8 million at December 31, 2018. Non-accrual loans, excluding $3.0 million of PCI loans, decreased $8.7 million, or 41.9%, to $12.0 million at September 30, 2019, as compared to $20.7 million at December 31, 2018. Loans past due 30 to 89 days totaled $5.5 million at September 30, 2019, representing an increase of $1.7 million, or 45.8%, as compared to $3.8 million at December 31, 2018.

 

The Company continues to actively market its foreclosed real estate properties, the value of which decreased $549 thousand to $3.6 million at September 30, 2019 as compared to $4.1 million at December 31, 2018. The decrease in foreclosed real estate properties was largely attributable to the sale of six properties totaling $1.5 million which was partially offset by two new foreclosed properties valued at $1.1 million. At September 30, 2019, the Company’s foreclosed real estate properties had an average carrying value of approximately $400 thousand per property.

 

The Company’s allowance for loan losses increased $975 thousand, or 11.1%, to $9.8 million, at September 30, 2019 as compared to $8.8 million at December 31, 2018. The Company’s outstanding credit mark recorded on the legacy Community Bank and Enterprise portfolios of $433.8 million totaled $6.8 million at September 30, 2019. The Company’s combined coverage of allowance for loan loss and credit mark on the legacy Community Bank and Enterprise portfolios totaled $16.8 million, or 1.05% of the overall loan portfolio, at September 30, 2019. The Company recorded $2.0 million in provision for loan losses for the nine months ended September 30, 2019 as compared to $1.2 million for the nine months ended September 30, 2018. Additionally, the Company recorded net charge-offs of $1.0 million for the nine months ended September 30, 2019, as compared to $33 thousand in net recoveries for the nine months ended September 30, 2018. The allowance for loan losses as a percentage of non-accrual loans increased to 81.1% at September 30, 2019 from 43.5% at December 31, 2018.

 

 

 

 

About SB One Bancorp

 

SB One Bancorp (Nasdaq: SBBX), is the holding company for SB One Bank, a full-service, commercial bank that operates regionally with 18 branch locations in New Jersey and New York. Established in 1975, SB One Bank's strength is in its ability to build strong personal relationships with its customers and to serve the communities in which it operates. In addition to its branches and loan production offices, SB One Bank offers a full-service insurance agency, SB One Insurance Agency, Inc. and wealth services through SB One Wealth. SB One Bank reinforces its commitment to the communities in which it lives and serves through the SB One Foundation, Inc. which supports various local charitable organizations.

 

SB One Bancorp was recently added to the Russell 2000® Index and Russell 3000® Index. In 2017, it was recognized as one of the top 29 banks and thrifts nationwide and one of three from New Jersey that comprise the Sandler O’Neill Sm-All Stars Class of 2017. SB One Bancorp is one of the 50 Fastest Growing Companies in New Jersey as ranked by NJBIZ Magazine. SB One Bancorp President and Chief Executive Officer, Anthony Labozzetta, was named one of America’s Business Leaders in Banking by Forbes magazine and American Banker’s Community Banker of the Year in 2016.

 

For more details on SB One Bank, visit: www.SBOne.bank

 

 

Forward-Looking Statements


This press release contains statements that are forward looking and are made pursuant to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to statements that may be identified by the use of words such as "expect," "estimate," “assume,” "believe," "anticipate," "will," "forecast," "plan," "project" or similar words. Such statements are based on SB One Bancorp’s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, (1) difficulties and delays in integrating the business or fully realizing cost savings and other benefits; (2) operating costs, customer loss and business disruption following the mergers with Community Bank and Enterprise, including adverse effects on relationships with employees, may be greater than expected; (3) changes to interest rates; (4) the ability to control costs and expenses; (5) general economic conditions; (6) the success of SB One Bancorp’s efforts to diversify its revenue base by developing additional sources of non-interest income while continuing to manage its existing fee-based business; and (7) risks associated with the quality of SB One Bancorp’s assets and the ability of its borrowers to comply with repayment. Further information about these and other relevant risks and uncertainties may be found in SB One Bancorp’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in subsequent filings with the Securities and Exchange Commission. SB One Bancorp undertakes no obligation to publicly release the results of any revisions to those forward looking statements that may be made to reflect events or circumstances after this date or to reflect the occurrence of unanticipated events.

 

SB ONE BANCORP

Anthony Labozzetta, President/CEO

Adriano Duarte, CFO

(p) 844-256-7328

 

 

 

 

SB ONE BANCORP

SUMMARY FINANCIAL HIGHLIGHTS

(In Thousands, Except Percentages and Per Share Data)

(Unaudited)

 

                   9/30/2019 VS. 
   9/30/2019   6/30/2019   12/31/2018   9/30/2018   12/31/2018   6/30/2019   9/30/2018 
BALANCE SHEET HIGHLIGHTS - Period End Balances                            
 Total securities  $211,467   $198,191   $186,217   $177,547    13.6%   6.7%   19.1%
 Total loans   1,563,610    1,530,668    1,474,775    1,171,738    6.0%   2.2%   33.4%
 Allowance for loan losses   (9,750)   (9,627)   (8,775)   (8,594)   11.1%   1.3%   13.5%
 Total assets   1,934,259    1,866,344    1,795,703    1,459,642    7.7%   3.6%   32.5%
 Total deposits   1,526,856    1,476,488    1,353,939    1,114,646    12.8%   3.4%   37.0%
 Total borrowings and junior subordinated debt   191,715    180,535    247,765    187,756    (22.6)%   6.2%   2.1%
 Total shareholders' equity   196,079    192,416    185,444    151,222    5.7%   1.9%   29.7%
                                    
 FINANCIAL DATA - QUARTER ENDED:                                   
 Net interest income (tax equivalent) (a)  $14,753   $15,161   $11,575   $11,217    27.5%   (2.7)%   31.5%
 Provision for loan losses   636    776    210    321    202.9%   (18.0)%   98.1%
 Total other income   3,103    4,392    2,493    2,518    24.5%   (29.3)%   23.2%
 Total other expenses   10,187    10,526    10,273    8,963    (0.8)%   (3.2)%   13.7%
 Income before provision for income taxes (tax equivalent)   7,033    8,251    3,585    4,451    96.2%   (14.8)%   58.0%
 Provision for income taxes   1,820    1,836    991    957    83.7%   (0.9)%   90.2%
 Taxable equivalent adjustment (a)   68    171    807    224    (91.6)%   (60.2)%   (69.6)%
 Net income  $5,145   $6,244   $1,787   $3,270    187.9%   (17.6)%   57.3%
                                    
 Net income per common share - Basic  $0.55   $0.67   $0.29   $0.42    89.7%   (17.9)%   32.2%
 Net income per common share - Diluted  $0.55   $0.66   $0.29   $0.41    89.7%   (16.7)%   33.1%
                                    
 Return on average assets   1.08%   1.35%   0.53%   0.91%   102.4%   (20.0)%   19.0%
 Return on average equity   10.56%   12.98%   4.97%   8.67%   112.6%   (18.6)%   21.9%
 Efficiency ratio (b)   57.27%   54.31%   77.47%   66.34%   (26.1)%   5.5%   (13.7)%
 Net interest margin (tax equivalent)   3.26%   3.49%   3.55%   3.29%   (8.2)%   (6.6)%   (0.9)%
 Avg. interest earning assets/Avg. interest bearing liabilities   1.26    1.27    1.27    1.28    (1.2)%   (0.7)%   (1.8)%
                                    
 FINANCIAL DATA - YEAR TO DATE:                                   
 Net interest income (tax equivalent) (a)  $44,580             $33,393              33.5%
 Provision for loan losses   1,983              1,227              61.6%
 Total other income   11,128              8,256              34.8%
 Total other expenses   30,891              30,137              2.5%
 Income before provision for income taxes (tax equivalent)   22,834              10,285              122.0%
 Provision for income taxes   5,156              2,068              149.3%
 Taxable equivalent adjustment (a)   466              647              (28.0)%
 Net income  $17,212             $7,570              127.4%
                                    
 Net income per common share - Basic  $1.84             $0.97              89.7%
 Net income per common share - Diluted  $1.83             $0.96              90.6%
                                    
 Return on average assets   1.23%             0.72%             70.4%
 Return on average equity   11.97%             6.84%             74.9%
 Efficiency ratio (b)   55.92%             73.50%             (23.9)%
 Net interest margin (tax equivalent)   3.40%             3.42%             (0.6)%
 Avg. interest earning assets/Avg. interest bearing liabilities   1.26              1.28              (1.4)%
                                    
 SHARE INFORMATION:                                   
 Book value per common share  $20.81   $20.35   $19.45   $19.00    7.0%   2.3%   9.5%
 Tangible book value per common share   17.71    17.25    16.36    15.73    8.3%   2.7%   12.6%
Outstanding shares- period ending   9,423,931    9,456,778    9,532,943    7,959,489    (1.1)%   (0.3)%   18.4%
Average diluted shares outstanding (year to date)   9,410,311    9,406,175    7,921,269    7,868,280    18.8%   0.0%   19.6%
                                    
 CAPITAL RATIOS:                                   
 Total equity to total assets   10.14%   10.31%   10.32%   10.36%   (1.7)%   (1.7)%   (2.2)%
 Leverage ratio (c)   10.22%   10.32%   12.06%   10.51%   (15.3)%   (1.0)%   (2.8)%
 Tier 1 risk-based capital ratio (c)   11.99%   12.10%   12.34%   12.74%   (2.8)%   (0.9)%   (5.9)%
 Total risk-based capital ratio (c)   12.60%   12.72%   12.94%   13.48%   (2.6)%   (0.9)%   (6.5)%
 Common equity Tier 1 capital ratio (c)   11.99%   12.10%   12.34%   12.74%   (2.8)%   (0.9)%   (5.9)%
                                    
 ASSET QUALITY:                                   
 Non-accrual loans (e)  $12,019   $16,243   $20,704   $19,758    (41.9)%   (26.0)%   (39.2)%
 Loans 90 days past due and still accruing   1    -    -    -    -%   -%   -%
 Troubled debt restructured loans ("TDRs") (d)   1,238    1,246    906    1,986    36.6%   (0.6)%   (37.7)%
 Foreclosed real estate   3,600    3,576    4,149    2,657    (13.2)%   0.7%   35.5%
 Non-performing assets ("NPAs")  $16,858   $21,065   $25,759   $24,401    (34.6)%   (20.0)%   (30.9)%
                                    
 Foreclosed real estate, criticized and classified assets (e)  $29,063   $29,039   $24,006   $22,945    21.1%   0.1%   26.7%
 Loans past due 30 to 89 days  $5,522   $8,904   $3,787   $3,339    45.8%   (38.0)%   65.4%
 Charge-offs (Recoveries) , net (quarterly)  $440   $339   $30   $(9)   1,366.7%   29.8%   (4,988.9)%
 Charge-offs (Recoveries) , net as a % of average loans (annualized)   0.11%   0.09%   0.01%   (0.00)%   1,061.1%   27.1%   (3,739.4)%
 Non-accrual loans to total loans   0.77%   1.06%   1.40%   1.69%   (45.1)%   (27.6)%   (54.4)%
 NPAs to total assets   0.87%   1.13%   1.43%   1.67%   (39.1)%   (22.8)%   (47.9)%
 NPAs excluding TDR loans (d) to total assets   0.81%   1.06%   1.35%   1.54%   (40.3)%   (24.0)%   (47.4)%
 Non-accrual loans to total assets   0.62%   0.87%   1.12%   1.35%   (44.6)%   (28.6)%   (54.1)%
 Allowance for loan losses as a % of non-accrual loans   81.12%   59.27%   43.51%   43.50%   86.5%   36.9%   86.5%
 Allowance for loan losses to total loans   0.62%   0.63%   0.60%   0.73%   4.8%   (0.9)%   (15.0)%

 

 (a) Full taxable equivalent basis, using a 30.09% effective tax rate and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance

 (b) Efficiency ratio calculated non-interest expense divided by net interest income plus non-interest income

 (c) SB One Bank capital ratios

 (d) Troubled debt restructured loans currently performing in accordance with renegotiated terms

 (e) PCI loans acquired through merger with Community Bank excluded from non-accrual loans and criticized and classified assets totaled $3.0 million                 

 

 

 

 

SB ONE BANCORP

CONSOLIDATED BALANCE SHEETS

(Dollars In Thousands)        

 

ASSETS  September 30, 2019   December 31, 2018 
         
Cash and due from banks  $11,561   $11,768 
Interest-bearing deposits with other banks   36,380    14,910 
Cash and cash equivalents   47,941    26,678 
           
Interest bearing time deposits with other banks   200    200 
Securities available for sale, at fair value   207,136    182,139 
Securities held to maturity   4,331    4,078 
Other Bank Stock, at cost   9,382    11,764 
           
Loans receivable, net of unearned income   1,563,610    1,474,775 
Less:  allowance for loan losses   9,750    8,775 
Net loans receivable   1,553,860    1,466,000 
           
Foreclosed real estate   3,600    4,149 
Premises and equipment, net   19,663    19,215 
Right-of-use assets, net   4,734    - 
Accrued interest receivable   6,253    6,546 
Goodwill and intangibles   29,141    29,446 
Bank-owned life insurance   36,475    35,778 
Other assets   11,543    9,710 
           
Total Assets  $1,934,259   $1,795,703 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Liabilities:          
Deposits:          
Non-interest bearing  $275,730   $259,807 
Interest bearing   1,251,126    1,094,132 
Total Deposits   1,526,856    1,353,939 
           
Borrowings   163,849    219,906 
Lease liability   4,870    - 
Accrued interest payable and other liabilities   14,739    8,555 
Subordinated debentures   27,866    27,859 
           
Total Liabilities   1,738,180    1,610,259 
           
Total Stockholders' Equity   196,079    185,444 
           
Total Liabilities and Stockholders' Equity  $1,934,259   $1,795,703 

 

 

 

 

SB ONE BANCORP

CONSOLIDATED STATEMENTS OF INCOME

(Dollars In Thousands Except Per Share Data)

(Unaudited)

 

   Three Months Ended September 30,   Nine Months Ended 
   2019   2018   9/30/2019   9/30/2018 
INTEREST INCOME                    
   Loans receivable, including fees  $19,135   $13,009   $56,354   $37,471 
   Securities:                    
      Taxable   1,490    936    3,942    2,476 
      Tax-exempt   135    442    920    1,272 
   Federal funds sold   -    -    -    - 
   Interest bearing deposits   97    23    211    69 
         Total Interest Income   20,857    14,410    61,427    41,288 
                     
INTEREST EXPENSE                    
   Deposits   4,755    2,156    13,078    5,273 
   Borrowings   1,099    943    3,286    2,323 
   Junior subordinated debentures   318    318    949    946 
        Total Interest Expense   6,172    3,417    17,313    8,542 
                     
        Net Interest Income   14,685    10,993    44,114    32,746 
PROVISION FOR LOAN LOSSES   636    321    1,983    1,227 
        Net Interest Income after Provision for Loan Losses   14,049    10,672    42,131    31,519 
                     
OTHER INCOME                    
   Service fees on deposit accounts   351    320    1,048    959 
   ATM and debit card fees   289    254    798    717 
   Bank owned life insurance   235    190    697    563 
   Insurance commissions and fees   1,824    1,527    6,482    5,261 
   Investment brokerage fees   49    29    126    92 
   Gain (loss) gain on securities transactions   -    -    1,524    36 
   (Loss) gain on disposal of fixed assets   89    -    (292)   9 
   Other   266    198    745    619 
      Total Other Income   3,103    2,518    11,128    8,256 
                     
OTHER EXPENSES                    
   Salaries and employee benefits   6,224    5,033    18,688    15,502 
   Occupancy, net   840    757    2,604    2,086 
   Data processing   1,000    710    2,939    2,440 
   Furniture and equipment   343    286    975    893 
   Advertising and promotion   139    147    394    488 
   Professional fees   272    383    1,106    1,002 
   Director fees   146    121    471    410 
   FDIC assessment   138    183    585    393 
   Insurance   31    35    94    182 
   Stationary and supplies   73    59    247    205 
   Merger-related expenses   -    605    -    4,344 
   Loan collection costs   96    53    233    203 
   Expenses and write-downs related to foreclosed real estate   172    20    333    228 
   Amortization of intangible assets   102    61    305    182 
   Other   611    510    1,917    1,579 
      Total Other Expenses   10,187    8,963    30,891    30,137 
                     
      Income before Income Taxes   6,965    4,227    22,368    9,638 
 INCOME TAX EXPENSE   1,820    957    5,156    2,068 
      Net Income  $5,145   $3,270   $17,212   $7,570 
                     
EARNINGS PER SHARE                    
   Basic  $0.55   $0.42   $1.84   $0.97 
   Diluted  $0.55   $0.41   $1.83   $0.96 

  

 

 

 

SB ONE BANCORP

COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES

(Dollars In Thousands)

(Unaudited)

                         

   Three Months Ended September 30, 
   2019   2018 
   Average       Average   Average       Average 
   Balance   Interest   Rate (2)   Balance   Interest   Rate (2) 
Earning Assets:                              
Securities:                              
Tax exempt (3)  $17,712   $203    4.55%  $63,752   $666    4.14%
Taxable   195,463    1,490    3.02%   126,961    936    2.92%
Total securities   213,175    1,693    3.15%   190,713    1,602    3.33%
Total loans receivable (1) (4)   1,548,515    19,135    4.90%   1,152,741    13,009    4.48%
Other interest-earning assets   32,383    97    1.19%   10,219    23    0.89%
Total earning assets   1,794,073    20,925    4.63%   1,353,673    14,634    4.29%
                               
Non-interest earning assets   122,954              97,181           
Allowance for loan losses   (9,898)             (8,388)          
Total Assets  $1,907,129             $1,442,466           
                               
Sources of Funds:                              
Interest bearing deposits:                              
NOW  $242,258   $498    0.82%  $257,671   $365    0.56%
Money market   234,127    1,080    1.83%   125,430    538    1.70%
Savings   221,892    369    0.66%   213,152    266    0.50%
Time   531,178    2,808    2.10%   262,244    987    1.49%
Total interest bearing deposits   1,229,455    4,755    1.53%   858,497    2,156    1.00%
Borrowed funds   168,998    1,099    2.58%   170,168    943    2.20%
Subordinated debentures   27,865    318    4.53%   27,854    318    4.53%
Total interest bearing liabilities   1,426,318    6,172    1.72%   1,056,519    3,417    1.28%
                               
Non-interest bearing liabilities:                              
Demand deposits   268,864              228,993           
Other liabilities   17,141              6,081           
Total non-interest bearing liabilities   286,005              235,074           
Stockholders' equity   194,806              150,873           
Total Liabilities and Stockholders' Equity  $1,907,129             $1,442,466           
                               
Net Interest Income and Margin (5)        14,753    3.26%        11,217    3.29%
Tax-equivalent basis adjustment        (68)             (224)     
Net Interest Income       $14,685             $10,993      

 

(1) Includes loan fee income

(2) Average rates on securities are calculated on amortized costs

(3) Full taxable equivalent basis, using an effective tax rate of 30.09% in 2019 and 2018 and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance

(4) Loans outstanding include non-accrual loans

(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets

 

 

 

SB ONE BANCORP

COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES

(Dollars In Thousands)

(Unaudited)

 

   Three Months Ended September 30, 2019   Three Months Ended June 30, 2019 
   Average     Average   Average     Average 
   Balance   Interest   Rate (2)   Balance   Interest   Rate (2) 
Earning Assets:                              
Securities:                              
      Tax exempt (3)  $17,712   $203    4.55%  $46,888   $508    4.35%
      Taxable   195,463    1,490    3.02%   158,258    1,277    3.24%
Total securities   213,175    1,693    3.15%   205,146    1,785    3.49%
Total loans receivable (1) (4)   1,548,515    19,135    4.90%   1,516,945    19,059    5.04%
Other interest-earning assets   32,383    97    1.19%   20,386    65    1.28%
Total earning assets   1,794,073    20,925    4.63%   1,742,477    20,909    4.81%
                               
Non-interest earning assets   122,954              118,391           
Allowance for loan losses   (9,898)             (9,332)          
Total Assets  $1,907,129             $1,851,536           
                               
Sources of Funds:                              
Interest bearing deposits:                              
      NOW  $242,258   $498    0.82%  $249,647   $453    0.73%
      Money market   234,127    1,080    1.83%   230,766    1,165    2.02%
      Savings   221,892    369    0.66%   226,511    372    0.66%
      Time   531,178    2,808    2.10%   494,823    2,469    2.00%
Total interest bearing deposits   1,229,455    4,755    1.53%   1,201,747    4,459    1.49%
      Borrowed funds   168,998    1,099    2.58%   145,937    973    2.67%
      Subordinated debentures   27,865    318    4.53%   27,863    316    4.55%
Total interest bearing liabilities   1,426,318    6,172    1.72%   1,375,547    5,748    1.68%
                               
Non-interest bearing liabilities:                              
      Demand deposits   268,864              272,667           
      Other liabilities   17,141              10,934           
Total non-interest bearing liabilities   286,005              283,601           
Stockholders' equity   194,806              192,388           
Total Liabilities and Stockholders' Equity  $1,907,129             $1,851,536           
                               
Net Interest Income and Margin (5)        14,753    3.26%        15,161    3.49%
Tax-equivalent basis adjustment        (68)             (171)     
Net Interest Income       $14,685             $14,990      

 

(1) Includes loan fee income

(2) Average rates on securities are calculated on amortized costs

(3) Full taxable equivalent basis, using an effective tax rate of 30.09% in 2019 and 2018 and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance

(4) Loans outstanding include non-accrual loans

(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets

 

 

 

SB ONE BANCORP

COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES

(Dollars In Thousands)

(Unaudited)

                         

   Nine Months Ended September 30, 
   2019   2018 
   Average       Average   Average       Average 
   Balance   Interest   Rate (2)   Balance   Interest   Rate (2) 
Earning Assets:                              
Securities:                              
      Tax exempt (3)  $42,253   $1,386    4.39%  $61,187   $1,919    4.19%
      Taxable   165,482    3,942    3.18%   124,756    2,476    2.65%
Total securities   207,735    5,328    3.43%   185,943    4,395    3.16%
Total loans receivable (1) (4)   1,522,197    56,354    4.95%   1,109,975    37,471    4.51%
Other interest-earning assets   22,588    211    1.25%   10,456    69    0.88%
Total earning assets   1,752,520    61,893    4.72%   1,306,374    41,935    4.29%
                               
Non-interest earning assets   118,562              96,629           
Allowance for loan losses   (9,353)             (7,993)          
Total Assets  $1,861,729             $1,395,010           
                               
Sources of Funds:                              
Interest bearing deposits:                              
      NOW  $249,238   $1,397    0.75%  $255,823   $1,110    0.58%
      Money market   235,252    3,423    1.95%   104,603    1,073    1.37%
      Savings   223,338    1,068    0.64%   218,359    534    0.33%
      Time   487,806    7,190    1.97%   263,533    2,556    1.30%
Total interest bearing deposits   1,195,634    13,078    1.46%   842,318    5,273    0.84%
      Borrowed funds   167,899    3,286    2.62%   152,178    2,323    2.04%
      Subordinated debentures   27,863    949    4.55%   27,852    946    4.54%
Total interest bearing liabilities   1,391,396    17,313    1.66%   1,022,348    8,542    1.12%
                               
Non-interest bearing liabilities:                              
      Demand deposits   266,999              220,156           
      Other liabilities   11,558              4,978           
Total non-interest bearing liabilities   278,557              225,134           
Stockholders' equity   191,776              147,528           
Total Liabilities and Stockholders' Equity  $1,861,729             $1,395,010           
                               
Net Interest Income and Margin (5)        44,580    3.40%        33,393    3.42%
Tax-equivalent basis adjustment        (466)             (647)     
Net Interest Income       $44,114             $32,746      

 

(1) Includes loan fee income

(2) Average rates on securities are calculated on amortized costs

(3) Full taxable equivalent basis, using an effective tax rate of 30.09% in 2019 and 2018 and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance

(4) Loans outstanding include non-accrual loans

(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets        

 

 

 

 

SB ONE BANCORP

Segment Reporting

(Dollars In Thousands)

(Unaudited)

 

   Three Months Ended September 30, 2019   Three Months Ended September 30, 2018 
   Banking and         Banking and         
   Financial   Insurance       Financial   Insurance     
   Services   Services   Total   Services   Services   Total 
Net interest income from external sources  $14,685   $-   $14,685   $10,993   $-   $10,993 
Other income from external sources   1,239    1,864    3,103    967    1,551    2,518 
Depreciation and amortization   488    10    498    455    7    462 
Income before income taxes   6,648    317    6,965    3,907    320    4,227 
Income tax expense (1)   1,693    127    1,820    829    128    957 
Total assets   1,927,351    6,908    1,934,259    1,453,536    6,106    1,459,642 

 

 

   Nine Months Ended September 30, 2019   Nine Months Ended September 30, 2018 
   Banking and         Banking and         
   Financial   Insurance       Financial   Insurance     
   Services   Services   Total   Services   Services   Total 
Net interest income from external sources  $44,114   $-   $44,114   $32,746   $-   $32,746 
Other income from external sources   4,518    6,610    11,128    2,901    5,355    8,256 
Depreciation and amortization   1,529    33    1,562    1,347    19    1,366 
Income before income taxes   20,205    2,163    22,368    7,809    1,829    9,638 
Income tax expense (1)   4,291    865    5,156    1,336    732    2,068 
Total assets   1,927,351    6,908    1,934,259    1,453,536    6,106    1,459,642 

  

(1) Calculated at statutory tax rate of 30.09% in 2019 and 2018 for the insurance services segment

 

 

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