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Press Release

SB One Bancorp Reports a 30% Growth in Core EPS for 2018 and Declares a Cash Dividend

Company Release - 2/1/2019 8:30 AM ET

ROCKAWAY, N.J., Feb. 01, 2019 (GLOBE NEWSWIRE) -- SB One Bancorp (the “Company”) (Nasdaq: SBBX), the holding company for SB One Bank (the “Bank”), today reported net income of $9.9 million, or $1.26 per basic and $1.25 per diluted share, for the year ended December 31, 2018, an increase of 74.4%, as compared to $5.7 million, or $1.06 per basic share and $1.05 per diluted share, for the year ended December 31, 2017.

The Company closed on two acquisitions during 2018, completing the acquisition of Community Bank of Bergen County (“Community Bank”) with total assets of $365.6 million on January 4, 2018 and the acquisition of Enterprise Bank, NJ (“Enterprise”) with total assets of $279.8 million on December 21, 2018, and engaged in the rebranding of the Company, the Bank and its insurance subsidiary to SB One.  The mergers and the double digit organic growth in commercial loans and deposits, drove an 83.5% growth in total assets to $1.8 billion at December 31, 2018 from $979.4 million at December 31, 2017.  This growth drove higher core net income, which when adjusted for tax effected merger-related expenses and non-recurring expenses, increased 91.1%. In addition, diluted earnings per share (“diluted EPS”), as adjusted for tax effected merger-related expenses and non-recurring expenses, increased 30.4% for the year ended December 31, 2018 as compared to the year ended December 31, 2017.

The Company’s net income, when adjusted for tax effected merger-related expenses and non-recurring expenses of $4.5 million and $271 thousand, respectively, increased $7.0 million, or 91.1%, to $14.7 million for the year ended December 31, 2018, as compared to the year ended December 31, 2017.  Diluted EPS, as adjusted for tax effected merger-related expenses and non-recurring expenses, increased 30.4% to $1.86 for the year ended December 31, 2018 as compared to $1.42 for the year ended December 31, 2017.  The Company’s return on average assets, adjusted for tax effected merger-related expenses and non-recurring expenses, for the year ended December 31, 2018, was 1.03%, an increase from 0.84% for the year ended December 31, 2017.

For the quarter ended December 31, 2018, the Company reported net income of $2.4 million, or $0.29 per basic and diluted share, an increase of 358.7%, as compared to $513 thousand, or $0.09 per basic and diluted share, for the same period in 2017.  The Company’s net income, adjusted for tax effected merger-related expenses and non-recurring expenses of $1.3 million and $119 thousand, respectively, increased $1.6 million, or 77.1%, to $3.8 million, or $0.47 per diluted share, for the quarter ended December 31, 2018, as compared to the same period in 2017.  The Company’s return on average assets, adjusted for tax effected merger-related expenses and non-recurring expenses, for the quarter ended December 31, 2018, was 0.99%, an increase from 0.88% from the quarter ended December 31, 2017.

The increase in net income for the three and twelve months ended December 31, 2018 was mainly attributable to continued double digit organic commercial loan and deposit growth, the merger with Community Bank, the positive impact from the Tax Cuts and Jobs Act, and an increase in SB One Insurance Agency twelve month pretax profit of over 40%.

“2018 was a very successful year for our Company as we nearly doubled our core earnings and total assets.  We accomplished this by growing our business lines organically by double digits and completing two mergers,” said Anthony Labozzetta, President and Chief Executive Officer of SB One Bancorp and SB One Bank.  Mr. Labozzetta went on to say, “These are very exciting times for our shareholders, customers, and employees and although there may be headwinds ahead of us resulting from the flattening of the yield curve, we continue to be very optimistic that there will be as many opportunities for us to continue our disciplined growth and strong performance over the short and long run.  We continue to maintain strong pipelines for loans and deposits, which will help us build our earnings into the foreseeable future.”

Declaration of Quarterly Dividend
On January 23, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.075 per share, which is payable on March 6, 2019 to common shareholders of record as of the close of business on February 20, 2019.

Financial Performance
Net Income. For the quarter ended December 31, 2018, the Company reported net income of $2.4 million, or $0.29 per basic and diluted share, as compared to net income of $513 thousand, or $0.09 per basic and diluted share, for the same period in 2017.  The Company’s net income, adjusted for tax effected merger-related expenses and non-recurring expenses of $1.3 million and $119 thousand, respectively, increased $1.6 million, or 77.1%, to $3.8 million, or $0.47 per diluted share, for the quarter ended December 31, 2018, as compared to the same period in 2017.

The increase in net income for the quarter ended December 31, 2018 was driven by a $3.5 million, or 44.0%, increase in net interest income resulting from strong loan and deposit growth and a $532 thousand increase in non-interest income driven by insurance commissions and fees, which were partially offset by a $3.5 million increase in non-interest expenses.  The changes were largely attributed to double digit organic commercial loan and deposit growth, the growth of the Company resulting from the merger with Community Bank, net of non-interest expense savings, and the positive impacts from the Tax Cuts and Jobs Act.

For the year ended December 31, 2018, the Company reported net income of $9.9 million, or $1.26 per basic and $1.25 per diluted share, or a 74.4% increase, as compared to net income of $5.7 million, or $1.06 per basic share and $1.05 per diluted share, for the year ended December 31, 2017.  The Company’s net income, adjusted for tax effected merger-related expenses and non-recurring expenses of $4.5 million and $271 thousand, respectively, increased $7.0 million, or 91.1%, to $14.7 million for the year ended December 31, 2018, as compared to the year ended December 31, 2017.  Diluted EPS, as adjusted for tax effected merger-related expenses and non-recurring expenses, increased 30.4% to $1.86 for the year ended December 31, 2018 as compared to $1.42 for the year ended December 31, 2017.  The changes were largely attributed to the growth of the Company resulting from the merger with Community Bank, net of non-interest expense savings, double digit organic commercial loan and deposit growth, and the positive impacts from the Tax Cuts and Jobs Act, and a 41% increase in SB One Insurance pretax income.

Net Interest Income.  Net interest income on a fully tax equivalent basis increased $3.6 million, or 44.0%, to $11.6 million for the fourth quarter of 2018, as compared to $8.0 million for the same period in 2017.  The increase in net interest income was largely due to a $507.1 million, or 54.9%, increase in average interest earning assets, principally loans receivable, which increased $420.7 million, or 52.3%. The aforementioned was partly offset by a decrease in the net interest margin of 25 basis points to 3.21% for the fourth quarter of 2018, as compared to the same period in 2017.  The decrease was primarily driven by the effects of higher market rates on interest bearing liabilities costs, which increased 46 basis points, and was partially offset by an increase in earning asset yields, which grew 13 basis points during the comparison period.  The increase in interest bearing liabilities was partly impacted by an increase in wholesale funding to support strong loan growth.  The increase in interest earning asset yields was partially attributed to purchase accounting accretion of $311.7 thousand ($233.4 thousand from the Community Bank merger and $78.3 thousand from the Enterprise merger) for the fourth quarter of 2018 as compared to the same period in 2017.

Net interest income on a fully tax equivalent basis increased $15.2 million, or 51.2%, to $45.0 million for the year ended December 31, 2018 as compared to $29.7 million for the same period in 2017.  The increase in net interest income was largely due to a $461.1 million, or 52.6%, increase in average interest earning assets, principally loans receivable, which increased $382.4 million, or 50.5%.  The aforementioned was partly offset by a decrease in the net interest margin of 3 basis points to 3.36% for the year ended December 31, 2018, as compared to the same period in 2017.  The decrease was primarily driven by the effects of higher market rates on interest bearing liabilities costs, which increased 25 basis points, and were partially offset by an increase in earning asset yields, which grew 16 basis points during the comparison period.  The increase in interest earning asset yields was partially attributed to purchase accounting accretion of $1.2 million ($1.1 million from the Community Bank merger and $78.3 thousand from the Enterprise merger) for the fiscal year of 2018 as compared to the same period for 2017.

Provision for Loan Losses. Provision for loan losses decreased $249 thousand, or 54.2%, to $210 thousand for the fourth quarter of 2018, as compared to $459 thousand for the same period in 2017.

Provision for loan losses decreased $149 thousand, or 9.4%, to $1.4 million for the year ended December 31, 2018, as compared to $1.6 million for the year ended December 31, 2017.

Non-interest Income. Non-interest income increased $532 thousand, or 27.1%, to $2.5 million for the fourth quarter of 2018, as compared to the same period in 2017.  The increase was largely due to an increase of $206 thousand, or 17.6%, in insurance commissions and fees relating to SB One Insurance Agency.  In addition, other income, ATM and debit card fees, and bank owned life insurance, increased $132 thousand, $67 thousand, and $54 thousand, respectively, largely due to the completion of the merger with Community Bank.

The Company’s non-interest income increased $2.5 million, or 29.7%, to $10.7 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017.  The increase was largely due to growth of $1.3 million in insurance commissions and fees related to SB One Insurance Agency.  In addition, other income, bank owned life insurance, ATM and debit card fees and service fees on deposit accounts, increased $411 thousand, $239 thousand, $206 thousand, and $167 thousand, respectively, largely due to the completion of the merger with Community Bank.

Non-interest Expense. The Company’s non-interest expenses increased $3.5 million to $10.3 million for the fourth quarter of 2018, as compared to the same period in 2017.  Merger-related expenses increase $755 thousand to $1.5 million in the fourth quarter of 2018 as compared to $705 thousand in the comparable 2017 quarter.  The increase was largely attributable to Enterprise merger, which was consummated in December. Non-interest expenses, adjusted to remove the aforementioned merger-related expenses along with other non-recurring expenses of $170 thousand in the fourth quarter of 2018, increased $2.5 million to $8.6 million for the fourth quarter of 2018 as compared to the same period in 2017.  In addition, approximately $55 thousand of operating expenses for the period in 2018 that Enterprise was included in the Company’s results.  The increase in non-interest expenses occurred largely in salaries and employee benefits of $1.4 million, data processing of $381 thousand, other expenses of $252 thousand, and occupancy of $228 thousand. The growth in operating expenses was largely due to the merger with Community Bank, net of expense savings, and an increase in expenses to support the Company’s growth.

The Company’s non-interest expenses increased $14.8 million to $40.4 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017.  Non-interest expenses, adjusted to remove merger related expenses and other non-recurring expenses of $5.8 million and $376 thousand, respectively, in 2018, and $1.2 million and $75 thousand, respectively, in 2017, increased $9.8 million to $34.2 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017.  The increase in non-interest expenses occurred largely in salaries and employee benefits of $5.9 million, data processing of $1.2 million, occupancy of $896 thousand, other expenses of $485 thousand, advertising and promotion of $279 thousand, furniture and equipment of $256 thousand and amortization of intangible assets of $247 thousand.  The growth in operating expenses was largely due to the merger with Community Bank, net of expense savings, and an increase in expenses to support the Company’s growth.

Income Tax Expense. The Company’s income tax expenses decreased $1.0 million, or 51.4% to $991 thousand for the fourth quarter of 2018, as compared to the same period last year.  The Company’s effective tax rate for the fourth quarter of 2018 was 29.6%, as compared to 79.9% for the fourth quarter of 2017, due to the reduction in the statutory federal tax rate to 21% effective January 1, 2018 and the newly enacted New Jersey tax legislation in 2018.  The Company’s re-measurement of its net deferred tax asset resulted in additional income tax expense of $942 thousand in the quarter ended December 31, 2017.

The Company’s income tax expenses decreased $1.4 million, or 31.7%, to $3.1 million for the year ended December 31, 2018, as compared to the year ended December 31, 2017.  The Company’s effective tax rate for the year ended December 31, 2018 was 23.6%, as compared to 44.0% for the year ended December 31, 2017, due to the reduction in the statutory federal tax rate to 21% effective January 1, 2018 and the newly enacted New Jersey tax legislation in 2018.  The Company’s re-measurement of its net deferred tax asset resulted in additional income tax expense of $942 thousand in year ended December 31, 2017.

Financial Condition
At December 31, 2018, the Company’s total assets were $1.8 billion, an increase of $817.4 million, or 83.5%, as compared to total assets of $979.4 million at December 31, 2017.  The increase was largely attributable to the mergers with Community Bank and Enterprise, of $365.6 million and $279.8 million, respectively, of total assets at the closing date of each of the merger transactions.

Total loans receivable, net of unearned income, increased $654.1 million, or 79.7%, to $1.5 billion at December 31, 2018, as compared to $820.7 million at December 31, 2017.  The mergers with Community Bank and Enterprise resulted in an increase in total loans of $236.1 million and $258.8 million, respectively. During the twelve months ended December 31, 2018, the Company also had $220.1 million of commercial loan production, which was partly offset by $52.8 million in commercial loan payoffs.

The Company’s total deposits increased $591.4 million, or 77.6%, to $1.4 billion at December 31, 2018, from $762.5 million at December 31, 2017. The mergers with Community Bank and Enterprise resulted in an increase in total deposits of $300.2 million and $196.2 million, respectively. The growth in deposits was mostly due to an increase in interest bearing deposits of $477.7 million, or 77.5%, and non-interest bearing deposits of $113.6 million, or 77.7%, at December 31, 2018, as compared to December 31, 2017, respectively.

At December 31, 2018, the Company’s total stockholders’ equity was $185.4 million, an increase of $91.2 million when compared to December 31, 2017, largely due to the merger with Community Bank and Enterprise.  The Company completed the Community Bank merger on January 4, 2018 which was the primary driver in an increase in book value per common share of 24.8% from $15.59 at December 31, 2017 to $19.45 at December 31, 2018.  At December 31, 2018, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 12.06%, 12.34%, 12.94% and 12.34%, 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 increased to 1.40% at December 31, 2018 from 0.94% at December 31, 2017.  NPAs exclude $3.3 million of Purchased Credit-Impaired (“PCI”) loans acquired through the merger with Community Bank. NPAs increased $16.0 million to $25.2 million at December 31, 2018, as compared to $9.2 million at December 31, 2017.  Non-accrual loans, excluding $3.3 million of PCI loans, increased $14.2 million, or 235.1%, to $20.2 million at December 31, 2018, as compared to $6.0 million at December 31, 2017.  The increase in non-accrual loans was largely attributed to two commercial real estate loans totaling $8.9 million, $2.5 million in loans acquired from Community Bank not classified as PCI, and  consumer loans totaling $3.1 million.  Loans past due 30 to 89 days totaled $3.8 million at December 31, 2018, representing a decrease of $2.7 million, or 41.7%, as compared to $6.5 million at December 31, 2017.

The Company continues to actively market its foreclosed real estate properties, the value of which increased $1.9 million to $4.1 million at December 31, 2018 as compared to $2.3 million at December 31, 2017.  The mergers with Community Bank and Enterprise resulted in an increase in foreclosed real estate properties of $1.1 million and $1.3 million, respectively.  At December 31, 2018, the Company’s foreclosed real estate properties had an average carrying value of approximately $319 thousand per property.

The allowance for loan losses increased $1.4 million, or 19.6%, to $8.8 million, or 0.60% of total loans, at December 31, 2018, compared to $7.3 million, or 0.89% of total loans, at December 31, 2017.  The decline in allowance coverage was primarily driven by the addition of Community Bank and Enterprise acquired loans with no allowance for loan losses; such loans were recorded at fair value at their acquisition dates.  The Company’s outstanding credit mark recorded on the legacy Community Bank portfolio of $203.6 million totaled $5.2 million at December 31, 2018. The Company’s outstanding credit mark recorded on the legacy Enterprise portfolio of $261.6 million totaled $3.8 million at December 31, 2018. The Company’s combined coverage of allowance for loan loss and credit mark on the legacy Community Bank and Enterprise portfolios totaled $17.8 million, or 1.20% of the overall loan portfolio, at December 31, 2018. The Company recorded $1.4 million in provision for loan losses for the twelve months ended December 31, 2018 as compared to $1.6 million for the twelve months ended December 31, 2017.  Additionally, the Company recorded net recoveries of $3 thousand for the twelve months ended December 31, 2018, as compared to $947 thousand in net charge-offs for the twelve months ended December 31, 2017.  The allowance for loan losses as a percentage of non-accrual loans decreased to 43.5% at December 31, 2018 from 121.8% at December 31, 2017.

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, (i) statements about the benefits of the merger between SB One Bancorp and Community Bank, including future financial and operating results, cost savings and accretion to reported earnings that may be realized from the merger; and (ii) 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, 2017 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
Steve Fusco, CFO
(p) 844-256-7328

SB ONE BANCORP
SUMMARY FINANCIAL HIGHLIGHTS
(In Thousands, Except Percentages and Per Share Data)
(Unaudited)
                   
          12/31/2018 VS.
  12/31/2018 9/30/2018 12/31/2017  9/30/2018 12/31/2017
 BALANCE SHEET HIGHLIGHTS - Period End Balances                
 Total securities  $186,217  $177,547  $104,034      4.9 %    79.0 %
 Total loans   1,474,775   1,171,738   820,700      25.9 %    79.7 %
 Allowance for loan losses     (8,775)    (8,594)    (7,335)     2.1 %    19.6 %
 Total assets   1,796,827   1,459,642   979,383      23.1 %    83.5 %
 Total deposits   1,353,939   1,114,646   762,491      21.5 %    77.6 %
 Total borrowings and junior subordinated debt     247,765     187,756     118,198      32.0 %    109.6 %
 Total shareholders' equity     185,383     151,222     94,193      22.6 %    96.8 %
                   
 FINANCIAL DATA - QUARTER ENDED:                   
 Net interest income (tax equivalent) (a)  $11,575  $11,217  $8,038      3.2 %    44.0 %
 Provision for loan losses   210   321   459      (34.6)%    (54.2)%
 Total other income   2,493   2,518   1,961      (1.0)%    27.1 %
 Total other expenses   10,273   8,963   6,820      14.6 %    50.6 %
 Income before provision for income taxes (tax equivalent)     3,585     4,451     2,720      (19.5)%    31.8 %
 Provision for income taxes   991   957   2,039      3.6 %    (51.4)%
 Taxable equivalent adjustment (a)   241   224   168      7.6 %    43.5 %
 Net income  $2,353  $3,270  $513      (28.0)%    358.7 %
                   
 Net income per common share - Basic  $0.29  $0.42  $0.09      225.5 %    225.5 %
 Net income per common share - Diluted  $0.29  $0.41  $0.09      223.5 %    223.5 %
                   
 Return on average assets     0.62 %  0.91 %  0.21 %   (31.7)%    190.8 %
 Return on average equity     6.00 %  8.67 %  2.16 %   (30.8)%    178.1 %
 Efficiency ratio (b)     74.30 %  66.34 %  69.37 %   12.0 %    7.1 %
 Net interest margin (tax equivalent)     3.21 %  3.29 %  3.46 %   (2.4)%    (7.2)%
 Avg. interest earning assets/Avg. interest bearing liabilities     1.27     1.28     1.29      (0.5)%    (1.2)%
                   
 FINANCIAL DATA - YEAR TO DATE:                   
 Net interest income (tax equivalent) (a)  $44,968     $29,732          51.2 %
 Provision for loan losses   1,437      1,586          (9.4)%
 Total other income     10,749        8,285          29.7 %
 Total other expenses   40,410      25,617          57.7 %
 Income before provision for income taxes (tax equivalent)     13,870        10,814          28.3 %
 Provision for income taxes     3,059        4,479          (31.7)%
 Taxable equivalent adjustment (a)     888        644          37.9 %
 Net income  $  9,923     $  5,691          74.4 %
                   
 Net income per common share - Basic  $1.26     $1.06          18.9 %
 Net income per common share - Diluted  $1.25     $1.05          19.0 %
                   
 Return on average assets     0.70 %     0.62 %       11.8 %
 Return on average equity     6.62 %     7.17 %       (7.7)%
 Efficiency ratio (b)     73.70 %     68.54 %       7.5 %
 Net interest margin (tax equivalent)     3.36 %     3.39 %       (0.9)%
 Avg. interest earning assets/Avg. interest bearing liabilities     1.28        1.27          0.8 %
                   
 SHARE INFORMATION:                   
 Book value per common share  $  19.45  $  19.07  $  15.59      2.4 %    24.7 %
 Tangible book value per common share     16.36     15.79     11.29      (12.3)%    44.9 %
Outstanding shares- period ending  9,532,943   7,929,613   6,040,564      19.8 %    57.8 %
Average diluted shares outstanding (year to date)  7,921,269   7,868,280   5,404,381      0.7 %    46.6 %
                   
 CAPITAL RATIOS:                   
 Total equity to total assets     10.32 %  10.36 %  9.62 %   (0.4)%    7.3 %
 Leverage ratio (c)   12.06 %10.51 %11.86 %   14.7 %    1.7 %
 Tier 1 risk-based capital ratio (c)   12.34 %12.74 %14.26 %   (3.1)%    (13.5)%
 Total risk-based capital ratio (c)   12.94 %13.48 %15.17 %   (4.0)%    (14.7)%
 Common equity Tier 1 capital ratio (c)   12.34 %12.74 %  14.26 %   (3.1)%    (13.5)%
                   
 ASSET QUALITY:                   
 Non-accrual loans (e)  $20,170  $19,758  $6,020      2.1 %    235.0 %
 Loans 90 days past due and still accruing     -      -      -       -  %    -  %
 Troubled debt restructured loans ("TDRs") (d)     905     1,986     932      (54.4)%    (2.9)%
 Foreclosed real estate     4,149     2,657     2,275      56.2 %    82.4 %
 Non-performing assets ("NPAs")  $25,224  $24,401  $9,227      3.4 %    173.4 %
                   
 Foreclosed real estate, criticized and classified assets (e)  $24,006  $22,945  $18,992      4.6 %    26.4 %
 Loans past due 30 to 89 days  $3,787  $3,339  $6,497      13.4 %    (41.7)%
 Charge-offs (Recoveries) , net (quarterly)  $  30  $  (9) $  626     (433.3)%    (95.2)%
 Charge-offs (Recoveries) , net as a % of average loans (annualized)     0.01 %  (0.00)%  0.31 %  (413.4)%    (96.9)%
 Non-accrual loans to total loans     1.37 %  1.69 %  0.73 %   (18.9)%    86.5 %
 NPAs to total assets     1.40 %  1.67 %  0.94 %   (16.0)%    49.0 %
 NPAs excluding TDR loans (d) to total assets     1.35 %  1.54 %  0.85 %   (11.9)%    59.8 %
 Non-accrual loans to total assets     1.12 %  1.35 %  0.61 %   (17.1)%    82.6 %
 Allowance for loan losses as a % of non-accrual loans     43.51 %  43.50 %  121.84 %   0.0 %    (64.3)%
 Allowance for loan losses to total loans     0.60 %  0.73 %  0.89 %   (18.9)%    (33.4)%
                   
 (a) Full taxable equivalent basis, using a 21% 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 $3.3 million      

 

SB ONE BANCORP 
CONSOLIDATED BALANCE SHEETS 
(Dollars In Thousands) 
      
ASSETSDecember 31, 2018  December 31, 2017 
     
Cash and due from banks$  11,768  $  3,270 
Interest-bearing deposits with other banks   14,910     8,376 
  Cash and cash equivalents   26,678     11,646 
      
Interest bearing time deposits with other banks   200     100 
Securities available for sale, at fair value   182,139     98,730 
Securities held to maturity   4,078     5,304 
Other Bank Stock, at cost   11,764     4,925 
      
Loans receivable, net of unearned income   1,474,775     820,700 
  Less:  allowance for loan losses   8,775     7,335 
  Net loans receivable   1,466,000     813,365 
      
Foreclosed real estate   4,149     2,275 
Premises and equipment, net   19,215     8,389 
Accrued interest receivable   6,546     2,472 
Goodwill and intangibles   29,446     2,820 
Bank-owned life insurance   35,778     22,054 
Other assets   10,834     7,303 
      
Total Assets$  1,796,827  $  979,383 
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
      
Liabilities:     
  Deposits:     
  Non-interest bearing $  259,807  $  146,167 
  Interest bearing    1,094,132     616,324 
  Total Deposits   1,353,939     762,491 
      
Borrowings   219,906     90,350 
Accrued interest payable and other liabilities   9,740     4,501 
Subordinated debentures   27,859     27,848 
      
Total Liabilities   1,611,444     885,190 
      
Total Stockholders' Equity   185,383     94,193 
      
Total Liabilities and Stockholders' Equity$  1,796,827  $  979,383 
      

 

SB ONE BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands Except Per Share Data)
(Unaudited)
 Three Months Ended December 31, Year Ended December 31,
  2018  2017   2018  2017 
INTEREST INCOME        
        
  Loans receivable, including fees$  13,888 $  8,923  $  51,359 $  32,953 
  Securities:       
     Taxable   1,031    373     3,507    1,437 
     Tax-exempt   472    331     1,744    1,274 
  Interest bearing deposits   30    7     99    35 
       Total Interest Income   15,421    9,634     56,709    35,699 
        
INTEREST EXPENSE       
  Deposits   2,805    1,052     8,078    3,584 
  Borrowings   965    391     3,288    1,749 
  Junior subordinated debentures   317    321     1,263    1,278 
       Total Interest Expense   4,087    1,764     12,629    6,611 
        
       Net Interest Income   11,334    7,870     44,080    29,088 
PROVISION FOR LOAN LOSSES   210    459     1,437    1,586 
       Net Interest Income after Provision for Loan Losses   11,124    7,411     42,643    27,502 
        
OTHER INCOME       
  Service fees on deposit accounts   331    311     1,290    1,123 
  ATM and debit card fees   266    199     983    777 
  Bank owned life insurance   198    144     761    522 
  Insurance commissions and fees   1,379    1,173     6,640    5,326 
  Investment brokerage fees   12    12     104    24 
  (Loss) gain on securities transactions   -    (60)    36    (9)
  Gain (loss) on disposal of fixed assets   -    7     9    7 
  Other   307    175     926    515 
     Total Other Income   2,493    1,961     10,749    8,285 
        
OTHER EXPENSES       
  Salaries and employee benefits   5,208    3,783     20,710    14,773 
  Occupancy, net   690    462     2,776    1,880 
  Data processing   911    530     3,351    2,173 
  Furniture and equipment   301    233     1,194    938 
  Advertising and promotion   99    49     587    308 
  Professional fees   410    395     1,412    1,173 
  Director fees   140    109     550    399 
  FDIC assessment   136    70     529    263 
  Insurance   28    77     210    279 
  Stationary and supplies   80    30     285    148 
  Merger-related expenses   1,460    705     5,804    1,187 
  Loan collection costs   52    47     255    122 
  Expenses and write-downs related to foreclosed real estate   96    (15)    324    283 
  Amortization of intangible assets   65    -     247    - 
  Other    597    345     2,176    1,691 
     Total Other Expenses   10,273    6,820     40,410    25,617 
        
     Income before Income Taxes   3,344    2,552     12,982    10,170 
 INCOME TAX EXPENSE    991    2,039     3,059    4,479 
     Net Income $  2,353 $  513  $  9,923 $  5,691 
        
EARNINGS PER SHARE       
        
  Basic$  0.29 $  0.09  $  1.26 $  1.06 
  Diluted$  0.29 $  0.09  $  1.25 $  1.05 

 

SB ONE BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
             
  Three Months Ended December 31,
   2018       2017     
    Average   Average    Average   Average 
   Balance  Interest Rate (2)  Balance  Interest Rate (2)
Earning Assets:            
Securities:            
    Tax exempt (3) $  63,114  $  713  4.48% $  47,223  $  499  4.19%
    Taxable     130,105     1,031  3.14%    63,055     373  2.35%
Total securities    193,219     1,744  3.58%    110,278     872  3.14%
Total loans receivable (1) (4)    1,225,917     13,888  4.49%    805,179     8,923  4.40%
Other interest-earning assets    10,973     30  1.08%    7,527     7  0.37%
Total earning assets    1,430,109     15,662  4.34%  922,984     9,802  4.21%
             
Non-interest earning assets    98,408         48,143     
Allowance for loan losses    (8,753)        (7,528)    
Total Assets $  1,519,764      $  963,599     
             
Sources of Funds:            
Interest bearing deposits:            
    NOW  $  261,737  $  417  0.63% $  192,595  $  185  0.38%
    Money market     185,419     879  1.88%    99,115     250  1.00%
    Savings     210,092     284  0.54%    134,803     70  0.21%
    Time     292,389     1,225  1.66%    186,896     547  1.16%
Total interest bearing deposits    949,637     2,805  1.17%  613,409     1,052  0.68%
    Borrowed funds  144,703   965  2.65%  74,255     391  2.09%
    Subordinated debentures  27,857   317  4.51%  27,847     321  4.57%
Total interest bearing liabilities    1,122,197     4,087  1.44%  715,511     1,764  0.98%
             
Non-interest bearing liabilities:            
    Demand deposits    235,342         148,420     
    Other liabilities    5,304         4,515     
Total non-interest bearing liabilities    240,646         152,935     
Stockholders' equity    156,921         95,153     
Total Liabilities and Stockholders' Equity $  1,519,764      $  963,599     
             
Net Interest Income and Margin (5)      11,575  3.21%      8,038  3.46%
Tax-equivalent basis adjustment       (241)        (168)  
Net Interest Income    $  11,334      $  7,870   
             
(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 21% in 2018 and 39% in 2017 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 December 31, 2018 Three Months Ended September 30, 2018
    Average   Average    Average   Average 
   Balance  Interest Rate (2)  Balance  Interest Rate (2)
Earning Assets:            
Securities:            
    Tax exempt (3) $  63,114  $  713  4.48% $  63,752  $  666  4.14%
    Taxable     130,105     1,031  3.14%    126,961     936  2.92%
Total securities    193,219     1,744  3.58%    190,713     1,602  3.33%
Total loans receivable (1) (4)    1,225,917     13,888  4.49%    1,152,741     13,009  4.48%
Other interest-earning assets    10,973     30  1.08%    10,219     23  0.89%
Total earning assets    1,430,109     15,662  4.34%  1,353,673     14,634  4.29%
             
Non-interest earning assets    98,408         97,181     
Allowance for loan losses    (8,753)        (8,388)    
Total Assets $  1,519,764      $  1,442,466     
             
Sources of Funds:            
Interest bearing deposits:            
    NOW  $  261,737  $  417  0.63% $  257,671  $  365  0.56%
    Money market     185,419     879  1.88%    125,430     538  1.70%
    Savings     210,092     284  0.54%    213,152     266  0.50%
    Time     292,389     1,225  1.66%    262,244     987  1.49%
Total interest bearing deposits    949,637     2,805  1.17%  858,497     2,156  1.00%
    Borrowed funds  144,703   965  2.65%  170,168     943  2.20%
    Subordinated debentures  27,857   317  4.51%  27,854     318  4.53%
Total interest bearing liabilities    1,122,197     4,087  1.44%  1,056,519     3,417  1.28%
             
Non-interest bearing liabilities:            
    Demand deposits    235,342         228,993     
    Other liabilities    5,304         6,081     
Total non-interest bearing liabilities    240,646         235,074     
Stockholders' equity    156,921         150,873     
Total Liabilities and Stockholders' Equity $  1,519,764      $  1,442,466     
             
Net Interest Income and Margin (5)      11,575  3.21%      11,217  3.29%
Tax-equivalent basis adjustment       (241)        (224)  
Net Interest Income    $  11,334      $  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 21% in 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)
             
  Year Ended December 31,
   2018   2017 
    Average   Average    Average   Average 
   Balance  Interest Rate (2)  Balance  Interest Rate (2)
Earning Assets:            
Securities:            
    Tax exempt (3) $  61,673  $  2,632  4.27% $  46,449  $  1,918  4.13%
    Taxable     126,104     3,507  2.78%    64,636     1,437  2.22%
Total securities    187,777     6,139  3.27%    111,085     3,355  3.02%
Total loans receivable (1) (4)    1,139,199     51,359  4.51%    756,766     32,953  4.35%
Other interest-earning assets    10,586     99  0.94%    8,611     35  0.41%
Total earning assets  1,337,562     57,597  4.31%  876,462     36,343  4.15%
             
Non-interest earning assets    97,078         45,398     
Allowance for loan losses    (8,185)        (7,113)    
Total Assets $  1,426,455      $  914,747     
             
Sources of Funds:            
Interest bearing deposits:            
    NOW  $  257,314  $  1,527  0.59% $  183,457  $  584  0.32%
    Money market     124,973     1,952  1.56%    93,505     843  0.90%
    Savings     216,275     818  0.38%    137,120     285  0.21%
    Time     270,807     3,781  1.40%    171,163     1,872  1.09%
Total interest bearing deposits  869,369     8,078  0.93%  585,245     3,584  0.61%
    Borrowed funds  150,294     3,288  2.19%  78,551     1,749  2.23%
    Subordinated debentures  27,853     1,263  4.53%  27,844     1,278  4.59%
Total interest bearing liabilities  1,047,516     12,629  1.21%  691,640     6,611  0.96%
             
Non-interest bearing liabilities:            
    Demand deposits    223,984         139,611     
    Other liabilities    5,060         4,167     
Total non-interest bearing liabilities    229,044         143,778     
Stockholders' equity    149,895         79,329     
Total Liabilities and Stockholders' Equity $  1,426,455      $  914,747     
             
Net Interest Income and Margin (5)      44,968  3.36%      29,732  3.39%
Tax-equivalent basis adjustment       (888)        (644)  
Net Interest Income    $  44,080      $  29,088   
             
(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 21% in 2018 and 39% in 2017 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 December 31, 2018 Three Months Ended December 31, 2017
 Banking and       Banking and      
 Financial Insurance    Financial Insurance   
 Services Services Total Services Services Total
Net interest income from external sources$  11,334 $  - $  11,334 $  7,870 $  - $  7,870
Other income from external sources   1,074    1,419    2,493    723    1,238    1,961
Depreciation and amortization   376    8    384    257    5    262
Income before income taxes   3,178    166    3,344    2,333    219    2,552
Income tax expense (1)   925    66    991    1,952    87    2,039
Total assets   1,791,975    4,852    1,796,827    975,123    4,260    979,383
                  
                  
                  
 Three Months Ended December 31, 2018 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$  11,334 $  - $  11,334 $  10,993 $  - $  10,993
Other income from external sources   1,074    1,419    2,493    967    1,551    2,518
Depreciation and amortization   376    8    384    455    7    462
Income before income taxes   3,178    166    3,344    3,907    320    4,227
Income tax expense (1)   925    66    991    829    128    957
Total assets   1,791,975    4,852    1,796,827    1,453,536    6,106    1,459,642
                  
                  
                  
 Year Ended December 31, 2018 Year Ended December 31, 2017
 Banking and       Banking and      
 Financial Insurance    Financial Insurance   
 Services Services Total Services Services Total
Net interest income from external sources$  44,080 $  - $  44,080 $  29,088 $  - $  29,088
Other income from external sources   3,975    6,774    10,749    2,864    5,421    8,285
Depreciation and amortization   1,723    27    1,750    1,037    24    1,061
Income before income taxes   10,987    1,995    12,982    8,757    1,413    10,170
Income tax expense (1)   2,261    798    3,059    3,914    565    4,479
Total assets   1,791,975    4,852    1,796,827    975,123    4,260    979,383
                  
(1) Calculated at statutory tax rate of 28.1% in 2018 and 39.9% in 2017 for the insurance services segment         

 

SB ONE BANCORP
Non-GAAP Reporting
(Dollars In Thousands)
(Unaudited)
      
      
 Three Months Ended December 31,
 2018  2017 
Net income (GAAP)$  2,353  $  513 
Merger related expenses net of tax (1)   1,301     676 
Tax Cuts and Jobs Act adjusted (2)   -     942 
Non-recurring expenses net of tax (3)   119     - 
Net income, as adjusted$  3,773  $  2,131 
      
Average diluted shares outstanding (GAAP)   8,082,270     6,011,574 
Average diluted shares outstanding, as adjusted   8,082,270     6,011,574 
Diluted EPS, as adjusted$  0.47  $  0.35 
Return on average assets, as adjusted 0.99%  0.88%
Return on average equity, as adjusted 9.62%  8.96%
      
(1) Merger related expense net of tax expense of $160 thou