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TFB Bancorp, Inc. Announces Earnings Increase of 23% for the First Nine Months of 2016 Compared to the Same Period in 2015

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YUMA, Ariz.--(BUSINESS WIRE)--

TFB Bancorp, Inc. (OTC Symbol "TBBN") today reported financial results for the period ended September 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 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.

Year to date 2016 highlights:

  • Annualized return on average assets and return on average equity of 1.07% and 8.26%, respectively
  • Year-to-date loan growth of 14.1%
  • Year-to-date deposit growth of 1.4%
  • Net interest margin of 4.49%
  • Noninterest income increase of 264%
  • Noninterest expense decrease of 6.3%
  • Cost of interest-bearing liabilities of .07%
  • Core deposits exceed 90% of total deposit balances

"We are enthusiastic about our loan growth and credit quality. With new additions to our lending team, we have widened the Arizona geography we serve. It has become apparent that Arizona businesses are clamoring for the personal attention and service delivery that Foothills Bank strives to deliver every day," said Mary Lynn Lenz, President of the Holding Company, and President and CEO of the Bank.

Loans grew $31.9 million, or 14.1%, to $257.4 million at September 30, 2016 compared to $225.6 million at December 31, 2015. Investment securities declined $14.7 million compared to December 31, 2015 as lower yielding investment securities were redeployed into higher yielding loans. A year-to-date gain of $403,000 was recognized on the call of $2.0 million and the sale of approximately $9.8 million of available-for-sale securities. Normal principal reductions and amortization, along with calls of two agency securities, also contributed to the decline in investment securities.

Total deposits increased to $265.3 million at September 30, 2016, an increase of $3.7 million, or 1.4% compared to December 31, 2015. The cost of interest bearing liabilities remains low at .07% at September 30, 2016 compared to .06% at December 31, 2015. Demand deposits comprise 49% and 52%, respectively, of the deposit portfolio at September 30, 2016 and December 31, 2015. Core deposits, defined as total deposits excluding brokered deposits, comprise more than 90% of total deposit balances at September 30, 2016 and December 31, 2015.

Due to strong loan portfolio performance and success in pursuing recoveries from previous problem loans, the year-to-date provision for loan and lease losses was a benefit of $177,000 through September 30, 2016 compared to a benefit of $993,000 for the same period in 2015. Nonperforming assets totaled $2.4 million, or 0.77% of total assets at September 30, 2016 compared to $3.8 million, or 1.25% of total assets at December 31, 2015, a decrease of 36%. The allowance for loan losses as a percentage of gross loans decreased to 1.21% at September 30, 2016 compared to 1.30% at December 31, 2015.

Ongoing expense controls accompanied by significant year over year increases in noninterest income contributed to an improved efficiency ratio of 63.69% at September 30, 2016 compared to 72.01% at December 31, 2015. Noninterest income totaled $1.5 million through September 30, 2016, an increase of $1.1 million compared to the same period in 2015, due to increases in deposit and other fees of $255,000, a $548,000 increase in gains on sales of investment securities and a $172,000 increase in gains on sales of other real estate owned. Noninterest expenses are $459,000, or 6.3%, lower than prior 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 $18.11 and $16.00 per share, respectively, at September 30, 2016 representing an increase of 6% and 7%, 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 1.07% and 8.26%, respectively.

TFB Bancorp, Inc.
Consolidated Balance Sheets
(Dollars in $000s)
             
As of As of As of
September 30, December 31, September 30,
(Unaudited) (Audited) (Unaudited)
2016 2015 2015
Assets
Cash and due from banks:
Interest-bearing $ 7,380 $ 13,073 $ 10,675
Noninterest-bearing   7,093     4,721     1,925  
Total cash and due from banks 14,473 17,794 12,600
 
Investment securities available-for-sale at fair value 26,840 41,554 42,490
 
Loans, net of unearned fees 257,439 225,589 220,521
Allowance for loan losses   (3,113 )   (2,937 )   (2,799 )
Net loans 254,326 222,652 217,722
 
Other Assets
Premises and equipment, net 4,059 4,130 4,197
Real estate held for sale - 392 396
Other real estate owned 293 913 791
Goodwill 4,723 4,723 4,723
Core deposit intangible 148 211 232
Bank owned life insurance 7,803 7,654 7,603
FHLB and other bank stock at cost 1,455 1,455 1,455
Other   1,469     1,460     1,265  
Total Assets $ 315,589   $ 302,938   $ 293,474  
 
Liabilities
Deposits:
Noninterest-bearing demand $ 81,680 $ 89,923 $ 85,851
Interest-bearing demand 47,478 46,465 41,467
Savings and money market 120,264 105,029 99,837
Certificates of deposit   15,835     20,184     22,029  
Total 265,257 261,601 249,184
 
Borrowings 5,800 - 3,400
Other liabilities 2,676 2,546 2,839
Equity
Shareholders' Equity   41,856     38,791     38,051  
Total Liabilities and Shareholders' Equity $ 315,589   $ 302,938   $ 293,474  
 
Selected data:
Total loans to deposits 97 % 86 % 88 %
Tangible equity $ 36,985 $ 33,857 $ 33,096
Shares outstanding 2,311,349 2,266,062 2,266,062
Book value per share $ 18.11 $ 17.12 $ 16.79
Tangible book value per share $ 16.00 $ 14.94 $ 14.61
 

 

 

 

TFB Bancorp, Inc.
Consolidated Income Statements
(Dollars in $000s)
               
Nine months ended September 30, Three months ended September 30,
(Unaudited) (Unaudited)
2016 2015 2016 2015
 
Interest income
Cash equivalents $ 35 $ 11 $ 4 $ 5
Interest-bearing CDs 26 44 8 12
Investment securities 780 960 239 293
Loans   8,807     8,457     3,130     2,893  
Total 9,648 9,472 3,381 3,203
 
Interest expense
Deposits 91 92 34 27
Other borrowings   11     3     11     0  
Total   102     95     45     27  
Net interest income 9,546 9,377 3,336 3,176
 
(Credit) Loan loss provision   (177 )   (993 )   (216 )   (269 )
Net interest income after provision for loan losses 9,723 10,370 3,552 3,445
 
Non-interest income
Deposit fees 433 234 136 73
Other fees 285 229 88 75
BOLI income 205 206 68 69
Stock dividends 98 127 31 32
Gain (loss) on sale of investment securities 403 (145 ) 393 (0 )
Gain (loss) on sale of REO 55 (117 ) (4 ) (46 )
Other non interest income (loss)   (29 )   (136 )   0     (148 )
Total 1,450 398 712 55
 
Non-interest expense
Salaries and employee benefits 3,829 3,416 1,293 1,171
Occupancy 750 876 260 270
Data processing 600 1,161 202 309
Legal and professional 294 412 91 122
Other   1,367     1,435     512     460  
6,840 7,300 2,358 2,332
 
Net operating income before provision for income taxes 4,333 3,468 1,906 1,168
 
Income tax expense   1,418     1,104     647     371  
Net income after tax $ 2,915   $ 2,364   $ 1,259   $ 797  
 
 

Forward-Looking Statements

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.

TFB Bancorp, Inc.
Mary Lynn Lenz, 928-217-1135
President
marylynn.lenz@foothillsbank.com
or
Danelle Thomsen, 928-217-1122
Secretary-Treasurer
danelle.thomsen@foothillsbank.com

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