PARAMUS, N.J., Oct. 25, 2019 (GLOBE NEWSWIRE) — SB One Bancorp (the “Company”) (Nasdaq: SBBX), the holding company for SB One Bank (the “Bank”), today reported net income of $5.1 million, or $0.55 per basic and diluted share, for the quarter ended September 30, 2019, an increase of 57.3%, as compared to net income of $3.3 million, or $0.42 per basic share and $0.41 per diluted share, for the quarter ended September 30, 2018. The increase in net income for the quarter ended September 30, 2019 was driven by a $3.7 million, or 33.6%, increase in net interest income attributable to loan and deposit growth and the merger with Enterprise Bank NJ (“Enterprise”), and a $585 thousand increase in non-interest income as compared to the same period last year. The increase in net income was partially offset by a $1.2 million, or 13.7%, increase in non-interest expense. The non-interest expense increase was mainly due to a $1.2 million, or 23.7%, increase in compensation mainly from the Enterprise merger, net of realized cost savings, and to support the continued growth of the Company offset by a decrease in merger related expenses of $605 thousand.
The Company reported net income of $17.2 million, or $1.84 per basic and $1.83 diluted share, for the nine months ended September 30, 2019, an increase of 127.4%, as compared to $7.6 million, or $0.97 per basic share and $0.96 per diluted share, for the same period last year. For the nine months ended September 30, 2019, net income growth was driven by an increase in net interest income of $11.4 million, or 34.7%, resulting from growth of $18.9 million in loan interest income which was attributable to organic loan growth and the merger with Enterprise. In addition, non-interest income increased $2.9 million, or 34.8%, from a $1.2 million increase in insurance commissions and fees as compared to the same period last year. The increase in net income was partially offset by an increase in non-interest expense of $754 thousand, or 2.5%.Anthony Labozzetta, President and CEO of SB One Bancorp and SB One Bank stated, “We continue to have strong growth in all of our business lines. Despite the volatile interest rate environment, our commercial lending team grew loans at an annualized rate of 10.2%. Our Insurance Company continues to out-perform and grew commission income 19.4% over the same period last year. Our Retail deposits grew at an annualized rate of 14.5%. Furthermore, the activities and pipelines in each of our business lines remain robust.” Mr. Labozzetta added, “While our margin compressed this quarter, we are seeing a reduction in our costs of deposits and borrowings, which was evident in the month of September and we expect that positive trend to continue into the fourth quarter”. Mr. Labozzetta also stated, “We continue to experience improving trends in asset quality with our ratio of non-performing assets to total assets decreasing 26 basis points to 0.87%”.Declaration of Quarterly Dividend
On October 24, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.085 per share, which is payable on November 20, 2019 to common shareholders of record as of the close of business on November 6, 2019.Financial Performance
Net Income. For the quarter ended September 30, 2019, the Company reported net income of $5.1 million, or $0.55 per basic and diluted share, an increase of 57.3%, as compared to net income of $3.3 million, or $0.42 per basic and $0.41 diluted share, for the quarter ended September 30, 2018.The increase in net income for the quarter ended September 30, 2019 was driven by a $3.7 million, or 33.6%, increase in net interest income resulting from loan and deposit growth, the Enterprise merger, and a $585 thousand increase in non-interest income mainly due to a $297 thousand increase in insurance commissions and fees. Non-interest expenses increased $1.2 million to $10.2 million for the third quarter 2019 as compared to $9.0 million for the third quarter 2018. The increase in non-interest expenses was primarily attributable to an increase in salaries and employee benefits of $1.2 million resulting from the merger with Enterprise and the continued growth of the Company. In addition, data processing increased $290 thousand and write-downs related to foreclosed real estate increased $152 thousand. The increase in non-interest expenses was partially offset by a decrease in merger related expenses of $605 thousand as compared to the same quarter of 2018.For the nine months ended September 30, 2019, the Company reported net income of $17.2 million, or $1.84 per basic share and $1.83 per diluted share, an increase of 127.4%, as compared to net income of $7.6 million, or $0.97 per basic share and $0.96 diluted share, for the same period last year. Net Interest Income. Net interest income on a fully tax equivalent basis increased $3.5 million, or 31.5%, to $14.8 million for the third quarter of 2019, as compared to $11.2 million for the same period in 2018. The increase in net interest income was largely due to a $440.4 million, or 32.5%, increase in average interest earning assets, principally loans receivable, which increased $395.8 million, or 34.3%, led by organic growth and the December 2018 closing of the Enterprise merger. The net interest margin decreased 3 basis points to 3.26% for the third quarter of 2019, as compared to the same period in 2018, as a result of an increase in cost of funds of 44 basis points mainly due to a surge in rates on deposits. The increase in the Company’s cost of funds was partially offset by an increase in yield on earning assets of 34 basis points driven by an increase in yields on loans receivable of 42 basis points. Net interest income on a fully tax equivalent basis increased $11.2 million, or 33.5%, to $44.6 million for the first nine months of 2019 as compared to $33.4 million for the same period in 2018. The increase in net interest income was largely due to a $446.1 million, or 34.2%, increase in average interest earning assets, principally loans receivable, which increased $412.2 million, or 37.1%, driven by organic growth and the Enterprise merger.Provision for Loan Losses. Provision for loan losses increased $315 thousand, or 98.1%, to $636 thousand for the third quarter of 2019, as compared to $321 thousand for the same period in 2018.Provision for loan losses increased $756 thousand, or 61.6%, to $2.0 million for the first nine months of 2019, as compared to $1.2 million for the same period in 2018.Non-interest Income. Non-interest income increased $585 thousand, or 23.2%, to $3.1 million for the third quarter of 2019, as compared to the same period in 2018. The growth was largely due to an increase in insurance commissions and fees relating to SB One Insurance Agency of $297 thousand, or 19.4%, for the third quarter of 2019, as compared to the same period in 2018. Non-interest income increased $2.9 million, or 34.8%, to $11.1 million for the first nine months of 2019 as compared to the same period last year. The increase was principally due to $1.2 million increase in insurance commissions and fees relating to SB One Insurance Agency, and a $1.5 million increase in gains on sale of securities. The aforementioned increases were partially offset by a $292 thousand loss on the disposal of fixed assets relating to closing of the Company’s corporate center in Rockaway, NJ, and the sale of the Andover branch.Non-interest Expense. The Company’s non-interest expenses increased $1.2 million, or 13.7%, to $10.2 million for the third quarter of 2019, as compared to the same period in 2018. The increase in non-interest expenses occurred largely in salaries and employee benefits of $1.2 million, data processing of $290 thousand and expenses and write-downs related to foreclosed real estate of $152 thousand. The increase in non-interest expenses for the third quarter of 2019, as compared to the same period in 2018, was the result of the Company’s continued growth, inclusive of the Enterprise merger net of cost savings. The increase in expenses and write-downs related to foreclosed real estate was driven by a one-time charge for write-downs of $149 thousand on three properties. The aforementioned increases were partially offset by decreases in professional fees and FDIC assessment costs of $111 thousand and $45 thousand, respectively.The Company’s non-interest expenses increased $754 thousand, or 2.5%, to $30.9 million for the first nine months of 2019 as compared to the same period last year. The increase in non-interest expenses was primarily due to increases in salaries and employee benefits of $3.2 million, occupancy of $518 thousand and data processing of $499 thousand. The aforementioned increase was partially offset by a decrease in merger related expenses of $4.3 million.Income Tax Expense. The Company’s income tax expenses increased $863 thousand to $1.8 million for the third quarter of 2019, as compared to the same period last year. The Company’s effective tax rate for the third quarter of 2019 was 26.1%, as compared to 22.6% for the same period in 2018.The Company’s income tax expenses increased $3.1 million to $5.2 million for the first nine months of 2019, as compared to the same period last year as a result of increased pre-tax income. The Company’s effective tax rate for the first nine months of 2019 was 23.1%, as compared to 21.5% for the nine months ended September 30, 2018.Financial Condition
At September 30, 2019, the Company’s total assets were $1.9 billion, an increase of $138.6 million, or 7.7%, as compared to total assets of $1.8 billion at December 31, 2018. The increase was mainly attributable to an increase in loans receivable of $88.8 million, or 6.0%, to $1.6 billion.The Company’s total deposits increased $172.9 million, or 12.8%, to $1.5 billion at September 30, 2019, from $1.4 billion at December 31, 2018. The growth in deposits was mostly due to an increase in interest bearing deposits of $157.0 million, or 14.3%, and an increase in non-interest bearing deposits of $15.9 million, or 6.1%, at September 30, 2019, as compared to December 31, 2018.At September 30, 2019, the Company’s total stockholders’ equity was $196.1 million, an increase of $10.6 million when compared to December 31, 2018. At September 30, 2019, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 10.22%, 12.00%, 12.61% and 12.00%, 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 decreased to 0.87% at September 30, 2019 as compared to 1.43% at December 31, 2018. The decrease in NPAs is mainly attributable to the payoff of two non-accrual commercial real estate loans totaling approximately $8.9 million. NPAs exclude $3.0 million of Purchased Credit-Impaired (“PCI”) loans acquired through the merger with Community Bank of Bergen County (“Community Bank”). NPAs decreased $8.9 million to $16.9 million at September 30, 2019, as compared to $25.8 million at December 31, 2018. Non-accrual loans, excluding $3.0 million of PCI loans, decreased $8.7 million, or 41.9%, to $12.0 million at September 30, 2019, as compared to $20.7 million at December 31, 2018. Loans past due 30 to 89 days totaled $5.5 million at September 30, 2019, representing an increase of $1.7 million, or 45.8%, as compared to $3.8 million at December 31, 2018.The Company continues to actively market its foreclosed real estate properties, the value of which decreased $549 thousand to $3.6 million at September 30, 2019 as compared to $4.1 million at December 31, 2018. The decrease in foreclosed real estate properties was largely attributable to the sale of six properties totaling $1.5 million which was partially offset by two new foreclosed properties valued at $1.1 million. At September 30, 2019, the Company’s foreclosed real estate properties had an average carrying value of approximately $400 thousand per property.The Company’s allowance for loan losses increased $975 thousand, or 11.1%, to $9.8 million, at September 30, 2019 as compared to $8.8 million at December 31, 2018. The Company’s outstanding credit mark recorded on the legacy Community Bank and Enterprise portfolios of $433.8 million totaled $6.8 million at September 30, 2019. The Company’s combined coverage of allowance for loan loss and credit mark on the legacy Community Bank and Enterprise portfolios totaled $16.8 million, or 1.05% of the overall loan portfolio, at September 30, 2019. The Company recorded $2.0 million in provision for loan losses for the nine months ended September 30, 2019 as compared to $1.2 million for the nine months ended September 30, 2018. Additionally, the Company recorded net charge-offs of $1.0 million for the nine months ended September 30, 2019, as compared to $33 thousand in net recoveries for the nine months ended September 30, 2018. The allowance for loan losses as a percentage of non-accrual loans increased to 81.1% at September 30, 2019 from 43.5% at December 31, 2018.About SB One BancorpSB 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.bankForward-Looking StatementsThis 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 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, 2018 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
Adriano Duarte, CFO
(p) 844-256-7328
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