YUMA, Ariz.--(BUSINESS WIRE)--TFB Bancorp, Inc. (OTC Symbol “TBBN”) today reported financial results for the quarter ended March 31, 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 full 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.
First quarter 2016 highlights:
- The Bank received a 5-Star "Superior" rating by Bauer Financial, Inc.
- First quarter annualized return on average assets and return on average equity of 1.20% and 9.36%, respectively
- Net income increase of 29% in the first quarter of 2016 compared to the fourth quarter of 2015
- Stable net interest margin of 4.50%
- Cost of interest-bearing liabilities of .06%
During the continuous low interest rate environment, net interest margin remained stable at 4.50% in the first quarter of 2016 and the fourth quarter of 2015. Net loans decreased $1.1 million, less than 1%, to $221.5 million at March 31, 2016 compared to $222.7 million at December 31, 2015. Compared to March 31, 2015 net loans increased more than $16 million, or 8%. Investment securities decreased $2.3 million during the quarter ended March 31, 2016 and have decreased $12.9 million, or 25% compared to March 31, 2015. The liquidity generated by called and sold investment securities will be available to fund future loan demand.
Deposits increased to $264.8 million at March 31, 2016, a $3.2 million, or 1% increase compared to December 31, 2015. Deposits increased $10.9 million, or 4%, compared to March 31, 2015. The cost of interest bearing liabilities remains low decreasing from .07% at December 31, 2015 to .06% at March 31, 2016. Demand deposits continue to comprise more than 50% of the deposit portfolio at March 31, 2016 and December 31, 2015.
Continued strong asset quality in the loan portfolio resulted in a first quarter 2016 credit to the provision for loan and lease losses of $56,000 versus a charge of $203,000 for the fourth quarter 2015. The allowance for loan losses as a percentage of gross loans increased marginally to 1.31% at March 31, 2016 compared to 1.30% at December 31, 2015. Nonperforming assets were $3.4 million at March 31, 2016, a decrease of $400,000, or 9%, compared to December 31, 2015.
Operational efficiencies and cost savings associated with the mid year 2015 branch consolidations and a third quarter 2015 core system conversion are being realized in first quarter 2016 as noninterest expenses decreased $256,000, or 10% compared to first quarter 2015. The efficiency ratio improved to 63.69% at March 31, 2016 compared to 72.01% at December 31, 2015.
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 $17.69 and $15.52 per share at March 31, 2016, respectively, for an increase of 3% and 4%, respectively compared to December 31, 2015.
Strong profitability in the first quarter resulted in an annualized return on average assets and return on average equity of 1.20% and 9.36%, respectively.
“The operational efficiencies undertaken throughout 2015 are now being realized, greatly benefiting the efficiency ratio and bottom line performance,” said Mary Lynn Lenz, President of the Holding Company and President and CEO of the Bank. “Management and the Board of Directors are strategically focused on driving shareholder value and delivering superior levels of customer satisfaction. The Bank’s Bauer rating and the Holding Company’s ROA and ROE are evidence that the plan is meeting expectations. The Foothills Bank is proud to operate throughout the state of Arizona, helping local businesses to make a difference.”
| TFB Bancorp, Inc. | ||||||||||||||||
| Consolidated Balance Sheets | ||||||||||||||||
| (Dollars in $000's) | ||||||||||||||||
| As of | As of | As of | ||||||||||||||
| March 31, | December 31, | March 31, | ||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| 2016 | 2015 | 2015 | ||||||||||||||
| Assets | ||||||||||||||||
| Cash and due from banks: | ||||||||||||||||
| Interest-bearing | $ | 20,881 | $ | 13,073 | $ | 16,731 | ||||||||||
| Noninterest-bearing | 5,371 | 4,721 | 2,630 | |||||||||||||
| Total cash and due from banks | 26,252 | 17,794 | 19,361 | |||||||||||||
| Investment securities available-for-sale at fair value | 39,267 | 41,554 | 52,164 | |||||||||||||
| Loans, net of unearned fees | 224,477 | 225,589 | 208,232 | |||||||||||||
| Allowance for loan losses | (2,932 | ) | (2,937 | ) | (3,129 | ) | ||||||||||
| Net loans | 221,545 | 222,652 | 205,103 | |||||||||||||
| Other Assets | ||||||||||||||||
| Premises and equipment, net | 4,182 | 4,130 | 4,866 | |||||||||||||
| Real estate held for sale | - | 392 | - | |||||||||||||
| Other real estate owned | 822 | 913 | 1,021 | |||||||||||||
| Goodwill | 4,723 | 4,723 | 4,723 | |||||||||||||
| Core deposit intangible | 190 | 211 | 275 | |||||||||||||
| Bank owned life insurance | 7,704 | 7,654 | 7,501 | |||||||||||||
| FHLB and other bank stock at cost | 1,455 | 1,455 | 1,266 | |||||||||||||
| Other | 1,100 | 1,460 | 1,199 | |||||||||||||
| Total Assets | $ | 307,240 | $ | 302,938 | $ | 297,479 | ||||||||||
| Liabilities | ||||||||||||||||
| Deposits: | ||||||||||||||||
| Noninterest-bearing demand | $ | 90,730 | $ | 89,923 | $ | 78,336 | ||||||||||
| Interest-bearing demand | 45,845 | 46,465 | 44,557 | |||||||||||||
| Savings and money market | 108,731 | 105,029 | 108,000 | |||||||||||||
| Certificates of deposit | 19,453 | 20,184 | 23,003 | |||||||||||||
| Total | 264,759 | 261,601 | 253,896 | |||||||||||||
| Other liabilities | 2,406 | 2,546 | 7,309 | |||||||||||||
| Equity | ||||||||||||||||
| Stockholders' equity | 40,075 | 38,791 | 36,274 | |||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 307,240 | $ | 302,938 | $ | 297,479 | ||||||||||
| Selected data: | ||||||||||||||||
| Total loans to deposits | 85 | % | 86 | % | 82 | % | ||||||||||
| Tangible equity | $ | 35,162 | $ | 33,857 | $ | 31,276 | ||||||||||
| Shares outstanding | 2,266,062 | 2,266,062 | 2,261,232 | |||||||||||||
| Book value per share | $ | 17.69 | $ | 17.12 | $ | 16.04 | ||||||||||
| Tangible book value per share | $ | 15.52 | $ | 14.94 | $ | 13.83 | ||||||||||
| TFB Bancorp, Inc. | ||||||||||||||||
| Consolidated Income Statements | ||||||||||||||||
| (Dollars in $000's) | ||||||||||||||||
| Three months ended | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| March 31, 2016 | March 31, 2015 | December 31, 2015 | ||||||||||||||
| Interest income | ||||||||||||||||
| Cash equivalents | $ | 12 | $ | 3 | $ | 5 | ||||||||||
| Interest-bearing CD's | 10 | 18 | 11 | |||||||||||||
| Investment securities | 281 | 332 | 293 | |||||||||||||
| Loans | 2,796 | 2,714 | 2,773 | |||||||||||||
| Total | 3,099 | 3,067 | 3,082 | |||||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 27 | 34 | 20 | |||||||||||||
| Other borrowings | - | 1 | - | |||||||||||||
| Total | 27 | 35 | 20 | |||||||||||||
| Net interest income | 3,072 | 3,032 | 3,062 | |||||||||||||
| (Credit) Loan loss provision | (56 | ) | (100 | ) | 203 | |||||||||||
| Net interest income after provision for loan losses | 3,128 | 3,132 | 2,859 | |||||||||||||
|
Noninterest income |
||||||||||||||||
| Deposit fees | 159 | 90 | 192 | |||||||||||||
| Other fees | 111 | 88 | 111 | |||||||||||||
| BOLI income | 68 | 68 | 69 | |||||||||||||
| Stock dividends | 33 | 26 | 30 | |||||||||||||
| Gain (loss) on sale of Investment Securities | 9 | 18 | - | |||||||||||||
| Gain (loss) on sale of REO | 66 | (75 | ) | 9 | ||||||||||||
|
Other noninterest income (loss) |
(16 | ) | 27 | (14 | ) | |||||||||||
| Total | 430 | 242 | 397 | |||||||||||||
|
Noninterest expense |
||||||||||||||||
| Salaries and employee benefits | 1,273 | 1,171 | 1,190 | |||||||||||||
| Occupancy | 235 | 300 | 283 | |||||||||||||
| Data processing | 196 | 432 | 216 | |||||||||||||
| Legal and professional | 104 | 133 | 68 | |||||||||||||
| Other | 423 | 451 | 473 | |||||||||||||
| 2,231 | 2,487 | 2,230 | ||||||||||||||
| Net operating income before provision for income taxes | 1,327 | 887 | 1,026 | |||||||||||||
| Income tax expense | 427 | 268 | 328 | |||||||||||||
| Net income after tax | $ | 900 | $ | 619 | $ | 698 | ||||||||||
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.
