TFB Bancorp, Inc. Announces Second Quarter 2016 Earnings
TFB Bancorp, Inc. (OTC Symbol "TBBN") today reported financial results for the period ended June 30, 2016.
About TFB Bancorp, Inc.
TFB Bancorp, Inc. (the "Holding Company") is a bank holding company, whose consolidated financial statements include TFB Bancorp, Inc. and its wholly owned subsidiary, The Foothills Bank (the "Bank"). The Bank is an Arizona state-chartered commercial bank that provides comprehensive service community banking services from four branch office locations serving the Arizona counties of Yuma, Pinal and Yavapai. Please visit www.foothillsbank.com to learn more about the Bank.
Second quarter 2016 highlights:
- Declaration and payment of a $0.10 per share cash dividend
- Annualized return on average assets and return on average equity of 1.08% and 8.39%, respectively
- Year-to-date loan growth of 12.0%
- Year-to-date deposit growth of 4.2%
- Net interest margin of 4.46%
- Cost of interest-bearing liabilities of .06%
- Core deposits exceed 90% of total deposit balances
Loans totaled $252.6 million at June 30, 2016 representing growth of $27.0, or 12.0%, compared to December 31, 2015. Investment securities decreased $3.9 million compared to December 31, 2015 as a result of called Agency bonds and normal maturities.
Deposits increased to $272.5 million at June 30, 2016, an increase of $10.9 million, or 4.2% compared to December 31, 2015. The cost of interest bearing liabilities remains low, decreasing from .07% at December 31, 2015 to .06% at June 30, 2016. Demand deposits continue to comprise more than 50% of the deposit portfolio at June 30, 2016 and December 31, 2015. Core deposits, defined as total deposits excluding brokered deposits, comprise more than 90% of total deposit balances at June 30, 2016 and December 31, 2015.
Year-to-date loan loss provision expense totaled $39,000 through June 30, 2016 compared to a credit of $724,000 through June 30, 2015. The credit in 2015 was the result of a $694,000 recovery of a previously charged off loan. The allowance for loan losses as a percentage of gross loans decreased to 1.21% at June 30, 2016 compared to 1.30% at December 31, 2015. Nonperforming assets were $2.8 million at June 30, 2016, a decrease of $1.0 million, or 26%, compared to December 31, 2015. Nonperforming assets as a percent of total assets decreased from 1.25% at December 31, 2015 to 0.88% at June 30, 2016.
The efficiency ratio improved to 64.50% at June 30, 2016 compared to 72.01% at December 31, 2015. Year-to-date noninterest income totaled $737,000, an increase of $395,000 compared to the same period in 2015, due to increases in deposit and other fees of $179,000, a $155,000 increase in gains on sales of investment securities and a $130,000 increase in gains on sales of other real estate owned. Noninterest expense reductions associated with the mid year 2015 branch consolidations and a third quarter 2015 core system conversion continue to be recognized through the second quarter of 2016 as noninterest expenses were $487,000 or 10%, lower year over year.
Capital ratios for the Bank continue to be augmented by profitability and remain well above the levels required for a "well capitalized" institution as designated by bank regulatory agencies. The Holding Company's book value and tangible book value increased to $17.74 and $15.61 per share at June 30, 2016, respectively, representing an increase of 4% and 5%, respectively compared to those ratios at December 31, 2015.
Strong profitability resulted in an annualized return on average assets and return on average equity of 1.08% and 8.39%, respectively.
"We are pleased that our strategic plan continues to drive results. Loan growth remains strong, evidencing the renewed strength of the Arizona economy and the Bank's ability to attract new commercial relationships," said Mary Lynn Lenz, President of The Holding Company and President and CEO of The Bank.
|TFB Bancorp, Inc.|
|Consolidated Balance Sheets|
|(Dollars in $000s)|
|As of||As of||As of|
|June 30,||December 31,||June 30,|
|Cash and due from banks:|
|Total cash and due from banks||12,084||17,794||15,007|
|Investment securities available-for-sale at fair value||37,697||41,554||42,828|
|Loans, net of unearned fees||252,560||225,589||212,180|
|Allowance for loan losses||(3,064||)||(2,937||)||(3,199||)|
|Premises and equipment, net||4,115||4,130||4,780|
|Real estate held for sale||-||392||-|
|Other real estate owned||219||913||654|
|Core deposit intangible||169||211||254|
|Bank owned life insurance||7,753||7,654||7,552|
|FHLB and other bank stock at cost||1,455||1,455||1,455|
|Savings and money market||118,873||105,029||104,161|
|Certificates of deposit||16,674||20,184||22,731|
|Total Liabilities and Shareholders' Equity||$||319,278||$||302,938||$||295,198|
|Total loans to deposits||93||%||86||%||84||%|
|Book value per share||$||17.74||$||17.12||$||16.31|
|Tangible book value per share||$||15.61||$||14.94||$||14.11|
|TFB Bancorp, Inc.|
|Consolidated Income Statements|
|(Dollars in $000s)|
|Six months ended||Three months ended|
|June 30, 2016||June 30, 2015||June 30, 2016||June 30, 2015|
|Cash equivalents||$ 31||$ 6||$ 19||$ 3|
|Net interest income||6,192||6,169||3,138||3,169|
|(Credit) Loan loss provision||39||(724)||95||(624)|
|Net interest income after provision for loan losses||6,152||6,894||3,043||3,793|
|Gain (loss) on sale of investment securities||10||(145)||1||(163)|
|Gain (loss) on sale of REO||59||(71)||(7)||4|
|Other non interest income (loss)||(30)||11||(14)||(15)|
|Salaries and employee benefits||2,536||2,245||1,264||1,073|
|Legal and professional||203||290||99||157|
|Net operating income before provision for income taxes||2,409||2,268||1,100||1,413|
|Income tax expense||771||732||344||465|
|Net income after tax||$ 1,638||$ 1,535||$ 756||$ 948|
Statements in this press release that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. You can identify these forward-looking statements by the use of words like "strategy," "anticipates," "expects," "plans," "believes," "will," "estimates," "intends," "projects," "goals," "targets" and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts. Forward-looking statements include, but are not limited to, those made in connection with attractiveness of common stock to potential investors following a stock split and with respect to the future results of operations, financial condition and the business of TFB which are subject to change based on the impact of various factors that could cause actual results to differ materially from those projected or suggested due to certain risks and uncertainties. These risks and uncertainties include, but are not limited to, changes in general economic conditions, interest rates, deposit flows, loan demand, internal controls, legislation or regulation and accounting principles, policies or guidelines, as well as other economic, competitive, governmental, regulatory and accounting and technological factors affecting the Company's operations. The Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments.