YUMA, Ariz.--(BUSINESS WIRE)--TFB Bancorp, Inc. (OTC:TBBN) today reported financial results for the year ended December 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 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.
- Return on average assets and return on average equity of 1.04% and 7.98%, respectively. Excluding fourth quarter merger related costs return on average equity and assets of 1.14% and 8.74%, respectively.
- Loan growth of 24.0%
- Deposit growth of 7.9%
- Net interest margin of 4.57%
- Noninterest income increase of 159%
- Efficiency Ratio of 66.02%
- Cost of interest-bearing liabilities of .07%
- Core deposits exceed 90% of total deposit balances
“2016 was a great year for TFB as loan growth in the Arizona market soared,” said Mary Lynn Lenz, President of the Holding Company and President and CEO of the Bank. “Quality credit and 'on-the-ground' relationship management propelled TFB to an enviable position. We are delighted by the 2016 results and look forward to completing our pending merger with Glacier Bancorp, Inc. (NASDAQ Symbol “GBCI”). The combination will provide the capital strength to continue this great growth strategy in 2017 and beyond.”
Loans grew $54.2 million, or 24.0%, to $279.8 million at December 31, 2016 compared to $225.6 million at December 31, 2015. Investment securities declined $16.1 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 of available-for-sale securities and the sale of approximately $9.2 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 $20.6 million, or 7.9%, to $282.2 million at December 31, 2016, as compared to December 31, 2015. The cost of interest bearing liabilities remained low at .07% at December 31, 2016 and 2015. Demand deposits comprised 51% and 52%, respectively, of the deposit portfolio at December 31, 2016 and 2015. Core deposits, defined as total deposits excluding brokered deposits, comprised more than 90% of total deposit balances at December 31, 2016 and 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 de minimis $5,000 benefit compared to a benefit of $791,000 in 2015. Strong asset quality trends, including a 26% year over year reduction in classified assets, mitigated reserve requirements related to portfolio growth. Nonperforming assets totaled $3.3 million, or 0.99% of total assets at December 31, 2016 compared to $3.8 million, or 1.25% of total assets at December 31, 2015, a decrease of 13%. The allowance for loan losses as a percentage of gross loans decreased to 1.18% at December 31, 2016 compared to 1.30% at December 31, 2015.
Net interest income totaled $13.2 million in 2016 compared to $12.6 million in 2015, an increase of 5%, due to the strong loan growth supported by the redeployment of lower yielding investment securities. Noninterest income totaled $1.7 million through December 31, 2016, an increase of $1.0 million, or 159%, compared to the same period in 2015, due to increases in deposit and other fees of $221,000, a $548,000 increase in gains on sales of investment securities and a $124,000 increase in gains on sales of other real estate owned.
Noninterest expenses were $267,000, or 3%, higher than the year ended December 31, 2015 primarily due to fourth quarter merger costs included in legal and professional costs. Excluding merger related costs, noninterest expenses decreased $214,000, or 2% year over year. Ongoing expense controls accompanied by significant year over year increases in noninterest income contributed to an improved efficiency ratio of 66.02% at December 31, 2016 compared to 72.01% at December 31, 2015. Excluding fourth quarter merger related costs of approximately $481,000, the efficiency ratio improves to 63.93% at December 31, 2016.
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 $18.09 and $15.99 per share, respectively, at December 31, 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 1.04% and 7.98%, respectively, for the year ended December 31, 2016. Excluding fourth quarter merger costs, return on average assets and equity was 1.14% and 8.74%, respectively, for the year ended December 31, 2016.
|TFB Bancorp, Inc.|
|Consolidated Balance Sheets|
|(Dollars in $000s)|
|As of||As of|
|December 31,||December 31,|
|Cash and due from banks:|
|Total cash and due from banks||12,476||17,794|
|Investment securities available-for-sale at fair value||25,502||41,554|
|Loans, net of unearned fees||279,777||225,589|
|Allowance for loan losses||(3,299||)||(2,937||)|
|Premises and equipment, net||3,984||4,130|
|Real estate held for sale||-||392|
|Other real estate owned||226||913|
|Core deposit intangible||128||211|
|Bank owned life insurance||7,853||7,654|
|FHLB and other bank stock at cost||1,455||1,455|
|Savings and money market||122,925||105,029|
|Certificates of deposit||15,791||20,184|
|Total Liabilities and Shareholders' Equity||$||334,791||$||302,938|
|Total loans to deposits||99||%||86||%|
|Book value per share||$||18.09||$||17.12|
|Tangible book value per share||$||15.99||$||14.94|
|TFB Bancorp, Inc.|
|Consolidated Income Statements|
|(Dollars in $000s)|
|Year ended December 31,||Three months ended December 31,|
|Net interest income||13,188||12,594||3,544||3,090|
|(Credit) Loan loss provision||(5||)||(791||)||172||202|
|Net interest income after provision for loan losses||13,193||13,385||3,372||2,888|
|Gain (loss) on sale of investment securities||403||(145||)||-||0|
|Gain (loss) on sale of REO||16||(108||)||(39||)||9|
|Other non interest income (loss)||(30||)||(150||)||(1||)||(14||)|
|Salaries and employee benefits||5,300||4,607||1,471||1,191|
|Legal and professional||858||480||564||68|
|Net operating income before provision for income taxes||5,048||4,495||715||1,027|
|Income tax expense||1,805||1,432||387||328|
|Net income after tax||$||3,243||$||3,063||$||328||$||699|
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.