ROCKAWAY, N.J., Feb. 01, 2019 (GLOBE NEWSWIRE) -- SB One Bancorp (the “Company”) (Nasdaq: SBBX), the holding company for SB One Bank (the “Bank”), today reported net income of $9.9 million, or $1.26 per basic and $1.25 per diluted share, for the year ended December 31, 2018, an increase of 74.4%, as compared to $5.7 million, or $1.06 per basic share and $1.05 per diluted share, for the year ended December 31, 2017.

The Company closed on two acquisitions during 2018, completing the acquisition of Community Bank of Bergen County (“Community Bank”) with total assets of $365.6 million on January 4, 2018 and the acquisition of Enterprise Bank, NJ (“Enterprise”) with total assets of $279.8 million on December 21, 2018, and engaged in the rebranding of the Company, the Bank and its insurance subsidiary to SB One.  The mergers and the double digit organic growth in commercial loans and deposits, drove an 83.5% growth in total assets to $1.8 billion at December 31, 2018 from $979.4 million at December 31, 2017.  This growth drove higher core net income, which when adjusted for tax effected merger-related expenses and non-recurring expenses, increased 91.1%. In addition, diluted earnings per share (“diluted EPS”), as adjusted for tax effected merger-related expenses and non-recurring expenses, increased 30.4% for the year ended December 31, 2018 as compared to the year ended December 31, 2017.

The Company’s net income, when adjusted for tax effected merger-related expenses and non-recurring expenses of $4.5 million and $271 thousand, respectively, increased $7.0 million, or 91.1%, to $14.7 million for the year ended December 31, 2018, as compared to the year ended December 31, 2017.  Diluted EPS, as adjusted for tax effected merger-related expenses and non-recurring expenses, increased 30.4% to $1.86 for the year ended December 31, 2018 as compared to $1.42 for the year ended December 31, 2017.  The Company’s return on average assets, adjusted for tax effected merger-related expenses and non-recurring expenses, for the year ended December 31, 2018, was 1.03%, an increase from 0.84% for the year ended December 31, 2017.

For the quarter ended December 31, 2018, the Company reported net income of $2.4 million, or $0.29 per basic and diluted share, an increase of 358.7%, as compared to $513 thousand, or $0.09 per basic and diluted share, for the same period in 2017.  The Company’s net income, adjusted for tax effected merger-related expenses and non-recurring expenses of $1.3 million and $119 thousand, respectively, increased $1.6 million, or 77.1%, to $3.8 million, or $0.47 per diluted share, for the quarter ended December 31, 2018, as compared to the same period in 2017.  The Company’s return on average assets, adjusted for tax effected merger-related expenses and non-recurring expenses, for the quarter ended December 31, 2018, was 0.99%, an increase from 0.88% from the quarter ended December 31, 2017.

The increase in net income for the three and twelve months ended December 31, 2018 was mainly attributable to continued double digit organic commercial loan and deposit growth, the merger with Community Bank, the positive impact from the Tax Cuts and Jobs Act, and an increase in SB One Insurance Agency twelve month pretax profit of over 40%.

“2018 was a very successful year for our Company as we nearly doubled our core earnings and total assets.  We accomplished this by growing our business lines organically by double digits and completing two mergers,” said Anthony Labozzetta, President and Chief Executive Officer of SB One Bancorp and SB One Bank.  Mr. Labozzetta went on to say, “These are very exciting times for our shareholders, customers, and employees and although there may be headwinds ahead of us resulting from the flattening of the yield curve, we continue to be very optimistic that there will be as many opportunities for us to continue our disciplined growth and strong performance over the short and long run.  We continue to maintain strong pipelines for loans and deposits, which will help us build our earnings into the foreseeable future.”

Declaration of Quarterly Dividend
On January 23, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.075 per share, which is payable on March 6, 2019 to common shareholders of record as of the close of business on February 20, 2019.

Financial Performance
Net Income. For the quarter ended December 31, 2018, the Company reported net income of $2.4 million, or $0.29 per basic and diluted share, as compared to net income of $513 thousand, or $0.09 per basic and diluted share, for the same period in 2017.  The Company’s net income, adjusted for tax effected merger-related expenses and non-recurring expenses of $1.3 million and $119 thousand, respectively, increased $1.6 million, or 77.1%, to $3.8 million, or $0.47 per diluted share, for the quarter ended December 31, 2018, as compared to the same period in 2017.

The increase in net income for the quarter ended December 31, 2018 was driven by a $3.5 million, or 44.0%, increase in net interest income resulting from strong loan and deposit growth and a $532 thousand increase in non-interest income driven by insurance commissions and fees, which were partially offset by a $3.5 million increase in non-interest expenses.  The changes were largely attributed to double digit organic commercial loan and deposit growth, the growth of the Company resulting from the merger with Community Bank, net of non-interest expense savings, and the positive impacts from the Tax Cuts and Jobs Act.

For the year ended December 31, 2018, the Company reported net income of $9.9 million, or $1.26 per basic and $1.25 per diluted share, or a 74.4% increase, as compared to net income of $5.7 million, or $1.06 per basic share and $1.05 per diluted share, for the year ended December 31, 2017.  The Company’s net income, adjusted for tax effected merger-related expenses and non-recurring expenses of $4.5 million and $271 thousand, respectively, increased $7.0 million, or 91.1%, to $14.7 million for the year ended December 31, 2018, as compared to the year ended December 31, 2017.  Diluted EPS, as adjusted for tax effected merger-related expenses and non-recurring expenses, increased 30.4% to $1.86 for the year ended December 31, 2018 as compared to $1.42 for the year ended December 31, 2017.  The changes were largely attributed to the growth of the Company resulting from the merger with Community Bank, net of non-interest expense savings, double digit organic commercial loan and deposit growth, and the positive impacts from the Tax Cuts and Jobs Act, and a 41% increase in SB One Insurance pretax income.

Net Interest Income.  Net interest income on a fully tax equivalent basis increased $3.6 million, or 44.0%, to $11.6 million for the fourth quarter of 2018, as compared to $8.0 million for the same period in 2017.  The increase in net interest income was largely due to a $507.1 million, or 54.9%, increase in average interest earning assets, principally loans receivable, which increased $420.7 million, or 52.3%. The aforementioned was partly offset by a decrease in the net interest margin of 25 basis points to 3.21% for the fourth quarter of 2018, as compared to the same period in 2017.  The decrease was primarily driven by the effects of higher market rates on interest bearing liabilities costs, which increased 46 basis points, and was partially offset by an increase in earning asset yields, which grew 13 basis points during the comparison period.  The increase in interest bearing liabilities was partly impacted by an increase in wholesale funding to support strong loan growth.  The increase in interest earning asset yields was partially attributed to purchase accounting accretion of $311.7 thousand ($233.4 thousand from the Community Bank merger and $78.3 thousand from the Enterprise merger) for the fourth quarter of 2018 as compared to the same period in 2017.

Net interest income on a fully tax equivalent basis increased $15.2 million, or 51.2%, to $45.0 million for the year ended December 31, 2018 as compared to $29.7 million for the same period in 2017.  The increase in net interest income was largely due to a $461.1 million, or 52.6%, increase in average interest earning assets, principally loans receivable, which increased $382.4 million, or 50.5%.  The aforementioned was partly offset by a decrease in the net interest margin of 3 basis points to 3.36% for the year ended December 31, 2018, as compared to the same period in 2017.  The decrease was primarily driven by the effects of higher market rates on interest bearing liabilities costs, which increased 25 basis points, and were partially offset by an increase in earning asset yields, which grew 16 basis points during the comparison period.  The increase in interest earning asset yields was partially attributed to purchase accounting accretion of $1.2 million ($1.1 million from the Community Bank merger and $78.3 thousand from the Enterprise merger) for the fiscal year of 2018 as compared to the same period for 2017.

Provision for Loan Losses. Provision for loan losses decreased $249 thousand, or 54.2%, to $210 thousand for the fourth quarter of 2018, as compared to $459 thousand for the same period in 2017.

Provision for loan losses decreased $149 thousand, or 9.4%, to $1.4 million for the year ended December 31, 2018, as compared to $1.6 million for the year ended December 31, 2017.

Non-interest Income. Non-interest income increased $532 thousand, or 27.1%, to $2.5 million for the fourth quarter of 2018, as compared to the same period in 2017.  The increase was largely due to an increase of $206 thousand, or 17.6%, in insurance commissions and fees relating to SB One Insurance Agency.  In addition, other income, ATM and debit card fees, and bank owned life insurance, increased $132 thousand, $67 thousand, and $54 thousand, respectively, largely due to the completion of the merger with Community Bank.

The Company’s non-interest income increased $2.5 million, or 29.7%, to $10.7 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017.  The increase was largely due to growth of $1.3 million in insurance commissions and fees related to SB One Insurance Agency.  In addition, other income, bank owned life insurance, ATM and debit card fees and service fees on deposit accounts, increased $411 thousand, $239 thousand, $206 thousand, and $167 thousand, respectively, largely due to the completion of the merger with Community Bank.

Non-interest Expense. The Company’s non-interest expenses increased $3.5 million to $10.3 million for the fourth quarter of 2018, as compared to the same period in 2017.  Merger-related expenses increase $755 thousand to $1.5 million in the fourth quarter of 2018 as compared to $705 thousand in the comparable 2017 quarter.  The increase was largely attributable to Enterprise merger, which was consummated in December. Non-interest expenses, adjusted to remove the aforementioned merger-related expenses along with other non-recurring expenses of $170 thousand in the fourth quarter of 2018, increased $2.5 million to $8.6 million for the fourth quarter of 2018 as compared to the same period in 2017.  In addition, approximately $55 thousand of operating expenses for the period in 2018 that Enterprise was included in the Company’s results.  The increase in non-interest expenses occurred largely in salaries and employee benefits of $1.4 million, data processing of $381 thousand, other expenses of $252 thousand, and occupancy of $228 thousand. The growth in operating expenses was largely due to the merger with Community Bank, net of expense savings, and an increase in expenses to support the Company’s growth.

The Company’s non-interest expenses increased $14.8 million to $40.4 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017.  Non-interest expenses, adjusted to remove merger related expenses and other non-recurring expenses of $5.8 million and $376 thousand, respectively, in 2018, and $1.2 million and $75 thousand, respectively, in 2017, increased $9.8 million to $34.2 million for the year ended December 31, 2018 as compared to the year ended December 31, 2017.  The increase in non-interest expenses occurred largely in salaries and employee benefits of $5.9 million, data processing of $1.2 million, occupancy of $896 thousand, other expenses of $485 thousand, advertising and promotion of $279 thousand, furniture and equipment of $256 thousand and amortization of intangible assets of $247 thousand.  The growth in operating expenses was largely due to the merger with Community Bank, net of expense savings, and an increase in expenses to support the Company’s growth.

Income Tax Expense. The Company’s income tax expenses decreased $1.0 million, or 51.4% to $991 thousand for the fourth quarter of 2018, as compared to the same period last year.  The Company’s effective tax rate for the fourth quarter of 2018 was 29.6%, as compared to 79.9% for the fourth quarter of 2017, due to the reduction in the statutory federal tax rate to 21% effective January 1, 2018 and the newly enacted New Jersey tax legislation in 2018.  The Company’s re-measurement of its net deferred tax asset resulted in additional income tax expense of $942 thousand in the quarter ended December 31, 2017.

The Company’s income tax expenses decreased $1.4 million, or 31.7%, to $3.1 million for the year ended December 31, 2018, as compared to the year ended December 31, 2017.  The Company’s effective tax rate for the year ended December 31, 2018 was 23.6%, as compared to 44.0% for the year ended December 31, 2017, due to the reduction in the statutory federal tax rate to 21% effective January 1, 2018 and the newly enacted New Jersey tax legislation in 2018.  The Company’s re-measurement of its net deferred tax asset resulted in additional income tax expense of $942 thousand in year ended December 31, 2017.

Financial Condition
At December 31, 2018, the Company’s total assets were $1.8 billion, an increase of $817.4 million, or 83.5%, as compared to total assets of $979.4 million at December 31, 2017.  The increase was largely attributable to the mergers with Community Bank and Enterprise, of $365.6 million and $279.8 million, respectively, of total assets at the closing date of each of the merger transactions.

Total loans receivable, net of unearned income, increased $654.1 million, or 79.7%, to $1.5 billion at December 31, 2018, as compared to $820.7 million at December 31, 2017.  The mergers with Community Bank and Enterprise resulted in an increase in total loans of $236.1 million and $258.8 million, respectively. During the twelve months ended December 31, 2018, the Company also had $220.1 million of commercial loan production, which was partly offset by $52.8 million in commercial loan payoffs.

The Company’s total deposits increased $591.4 million, or 77.6%, to $1.4 billion at December 31, 2018, from $762.5 million at December 31, 2017. The mergers with Community Bank and Enterprise resulted in an increase in total deposits of $300.2 million and $196.2 million, respectively. The growth in deposits was mostly due to an increase in interest bearing deposits of $477.7 million, or 77.5%, and non-interest bearing deposits of $113.6 million, or 77.7%, at December 31, 2018, as compared to December 31, 2017, respectively.

At December 31, 2018, the Company’s total stockholders’ equity was $185.4 million, an increase of $91.2 million when compared to December 31, 2017, largely due to the merger with Community Bank and Enterprise.  The Company completed the Community Bank merger on January 4, 2018 which was the primary driver in an increase in book value per common share of 24.8% from $15.59 at December 31, 2017 to $19.45 at December 31, 2018.  At December 31, 2018, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 12.06%, 12.34%, 12.94% and 12.34%, 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 increased to 1.40% at December 31, 2018 from 0.94% at December 31, 2017.  NPAs exclude $3.3 million of Purchased Credit-Impaired (“PCI”) loans acquired through the merger with Community Bank. NPAs increased $16.0 million to $25.2 million at December 31, 2018, as compared to $9.2 million at December 31, 2017.  Non-accrual loans, excluding $3.3 million of PCI loans, increased $14.2 million, or 235.1%, to $20.2 million at December 31, 2018, as compared to $6.0 million at December 31, 2017.  The increase in non-accrual loans was largely attributed to two commercial real estate loans totaling $8.9 million, $2.5 million in loans acquired from Community Bank not classified as PCI, and  consumer loans totaling $3.1 million.  Loans past due 30 to 89 days totaled $3.8 million at December 31, 2018, representing a decrease of $2.7 million, or 41.7%, as compared to $6.5 million at December 31, 2017.

The Company continues to actively market its foreclosed real estate properties, the value of which increased $1.9 million to $4.1 million at December 31, 2018 as compared to $2.3 million at December 31, 2017.  The mergers with Community Bank and Enterprise resulted in an increase in foreclosed real estate properties of $1.1 million and $1.3 million, respectively.  At December 31, 2018, the Company’s foreclosed real estate properties had an average carrying value of approximately $319 thousand per property.

The allowance for loan losses increased $1.4 million, or 19.6%, to $8.8 million, or 0.60% of total loans, at December 31, 2018, compared to $7.3 million, or 0.89% of total loans, at December 31, 2017.  The decline in allowance coverage was primarily driven by the addition of Community Bank and Enterprise acquired loans with no allowance for loan losses; such loans were recorded at fair value at their acquisition dates.  The Company’s outstanding credit mark recorded on the legacy Community Bank portfolio of $203.6 million totaled $5.2 million at December 31, 2018. The Company’s outstanding credit mark recorded on the legacy Enterprise portfolio of $261.6 million totaled $3.8 million at December 31, 2018. The Company’s combined coverage of allowance for loan loss and credit mark on the legacy Community Bank and Enterprise portfolios totaled $17.8 million, or 1.20% of the overall loan portfolio, at December 31, 2018. The Company recorded $1.4 million in provision for loan losses for the twelve months ended December 31, 2018 as compared to $1.6 million for the twelve months ended December 31, 2017.  Additionally, the Company recorded net recoveries of $3 thousand for the twelve months ended December 31, 2018, as compared to $947 thousand in net charge-offs for the twelve months ended December 31, 2017.  The allowance for loan losses as a percentage of non-accrual loans decreased to 43.5% at December 31, 2018 from 121.8% at December 31, 2017.

About SB One Bancorp

SB 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.bank

Forward-Looking Statements

This 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, (i) statements about the benefits of the merger between SB One Bancorp and Community Bank, including future financial and operating results, cost savings and accretion to reported earnings that may be realized from the merger; and (ii) 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, 2017 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
Steve Fusco, CFO
(p) 844-256-7328

SB ONE BANCORP
SUMMARY FINANCIAL HIGHLIGHTS
(In Thousands, Except Percentages and Per Share Data)
(Unaudited)
															12/31/2018 VS.
		12/31/2018				9/30/2018				12/31/2017					9/30/2018					12/31/2017
BALANCE SHEET HIGHLIGHTS - Period End Balances
Total securities		$	186,217			$	177,547			$	104,034					4.9		%			79.0		%
Total loans			1,474,775				1,171,738				820,700					25.9		%			79.7		%
Allowance for loan losses			(8,775	)			(8,594	)			(7,335	)				2.1		%			19.6		%
Total assets			1,796,827				1,459,642				979,383					23.1		%			83.5		%
Total deposits			1,353,939				1,114,646				762,491					21.5		%			77.6		%
Total borrowings and junior subordinated debt			247,765				187,756				118,198					32.0		%			109.6		%
Total shareholders' equity			185,383				151,222				94,193					22.6		%			96.8		%
FINANCIAL DATA - QUARTER ENDED:
Net interest income (tax equivalent) (a)		$	11,575			$	11,217			$	8,038					3.2		%			44.0		%
Provision for loan losses			210				321				459					(34.6	)	%			(54.2	)	%
Total other income			2,493				2,518				1,961					(1.0	)	%			27.1		%
Total other expenses			10,273				8,963				6,820					14.6		%			50.6		%
Income before provision for income taxes (tax equivalent)			3,585				4,451				2,720					(19.5	)	%			31.8		%
Provision for income taxes			991				957				2,039					3.6		%			(51.4	)	%
Taxable equivalent adjustment (a)			241				224				168					7.6		%			43.5		%
Net income		$	2,353			$	3,270			$	513					(28.0	)	%			358.7		%
Net income per common share - Basic		$	0.29			$	0.42			$	0.09					225.5		%			225.5		%
Net income per common share - Diluted		$	0.29			$	0.41			$	0.09					223.5		%			223.5		%
Return on average assets			0.62		%		0.91		%		0.21		%			(31.7	)	%			190.8		%
Return on average equity			6.00		%		8.67		%		2.16		%			(30.8	)	%			178.1		%
Efficiency ratio (b)			74.30		%		66.34		%		69.37		%			12.0		%			7.1		%
Net interest margin (tax equivalent)			3.21		%		3.29		%		3.46		%			(2.4	)	%			(7.2	)	%
Avg. interest earning assets/Avg. interest bearing liabilities			1.27				1.28				1.29					(0.5	)	%			(1.2	)	%
FINANCIAL DATA - YEAR TO DATE:
Net interest income (tax equivalent) (a)		$	44,968							$	29,732										51.2		%
Provision for loan losses			1,437								1,586										(9.4	)	%
Total other income			10,749								8,285										29.7		%
Total other expenses			40,410								25,617										57.7		%
Income before provision for income taxes (tax equivalent)			13,870								10,814										28.3		%
Provision for income taxes			3,059								4,479										(31.7	)	%
Taxable equivalent adjustment (a)			888								644										37.9		%
Net income		$	9,923							$	5,691										74.4		%
Net income per common share - Basic		$	1.26							$	1.06										18.9		%
Net income per common share - Diluted		$	1.25							$	1.05										19.0		%
Return on average assets			0.70		%						0.62		%								11.8		%
Return on average equity			6.62		%						7.17		%								(7.7	)	%
Efficiency ratio (b)			73.70		%						68.54		%								7.5		%
Net interest margin (tax equivalent)			3.36		%						3.39		%								(0.9	)	%
Avg. interest earning assets/Avg. interest bearing liabilities			1.28								1.27										0.8		%
SHARE INFORMATION:
Book value per common share		$	19.45			$	19.07			$	15.59					2.4		%			24.7		%
Tangible book value per common share			16.36				15.79				11.29					(12.3	)	%			44.9		%
Outstanding shares- period ending			9,532,943				7,929,613				6,040,564					19.8		%			57.8		%
Average diluted shares outstanding (year to date)			7,921,269				7,868,280				5,404,381					0.7		%			46.6		%
CAPITAL RATIOS:
Total equity to total assets			10.32		%		10.36		%		9.62		%			(0.4	)	%			7.3		%
Leverage ratio (c)			12.06		%		10.51		%		11.86		%			14.7		%			1.7		%
Tier 1 risk-based capital ratio (c)			12.34		%		12.74		%		14.26		%			(3.1	)	%			(13.5	)	%
Total risk-based capital ratio (c)			12.94		%		13.48		%		15.17		%			(4.0	)	%			(14.7	)	%
Common equity Tier 1 capital ratio (c)			12.34		%		12.74		%		14.26		%			(3.1	)	%			(13.5	)	%
ASSET QUALITY:
Non-accrual loans (e)		$	20,170			$	19,758			$	6,020					2.1		%			235.0		%
Loans 90 days past due and still accruing			-				-				-					-		%			-		%
Troubled debt restructured loans ("TDRs") (d)			905				1,986				932					(54.4	)	%			(2.9	)	%
Foreclosed real estate			4,149				2,657				2,275					56.2		%			82.4		%
Non-performing assets ("NPAs")		$	25,224			$	24,401			$	9,227					3.4		%			173.4		%
Foreclosed real estate, criticized and classified assets (e)		$	24,006			$	22,945			$	18,992					4.6		%			26.4		%
Loans past due 30 to 89 days		$	3,787			$	3,339			$	6,497					13.4		%			(41.7	)	%
Charge-offs (Recoveries) , net (quarterly)		$	30			$	(9	)		$	626					(433.3	)	%			(95.2	)	%
Charge-offs (Recoveries) , net as a % of average loans (annualized)			0.01		%		(0.00	)	%		0.31		%			(413.4	)	%			(96.9	)	%
Non-accrual loans to total loans			1.37		%		1.69		%		0.73		%			(18.9	)	%			86.5		%
NPAs to total assets			1.40		%		1.67		%		0.94		%			(16.0	)	%			49.0		%
NPAs excluding TDR loans (d) to total assets			1.35		%		1.54		%		0.85		%			(11.9	)	%			59.8		%
Non-accrual loans to total assets			1.12		%		1.35		%		0.61		%			(17.1	)	%			82.6		%
Allowance for loan losses as a % of non-accrual loans			43.51		%		43.50		%		121.84		%			0.0		%			(64.3	)	%
Allowance for loan losses to total loans			0.60		%		0.73		%		0.89		%			(18.9	)	%			(33.4	)	%
(a) Full taxable equivalent basis, using a 21% effective tax rate and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance
(b) Efficiency ratio calculated non-interest expense divided by net interest income plus non-interest income
(c) SB One Bank capital ratios
(d) Troubled debt restructured loans currently performing in accordance with renegotiated terms
(e) PCI loans acquired through merger with Community Bank excluded from non-accrual loans and criticized and classified assets totaled $3.3 million

 

SB ONE BANCORP
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
ASSETS	December 31, 2018				December 31, 2017
Cash and due from banks	$	11,768			$	3,270
Interest-bearing deposits with other banks		14,910				8,376
Cash and cash equivalents		26,678				11,646
Interest bearing time deposits with other banks		200				100
Securities available for sale, at fair value		182,139				98,730
Securities held to maturity		4,078				5,304
Other Bank Stock, at cost		11,764				4,925
Loans receivable, net of unearned income		1,474,775				820,700
Less:  allowance for loan losses		8,775				7,335
Net loans receivable		1,466,000				813,365
Foreclosed real estate		4,149				2,275
Premises and equipment, net		19,215				8,389
Accrued interest receivable		6,546				2,472
Goodwill and intangibles		29,446				2,820
Bank-owned life insurance		35,778				22,054
Other assets		10,834				7,303
Total Assets	$	1,796,827			$	979,383
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	259,807			$	146,167
Interest bearing		1,094,132				616,324
Total Deposits		1,353,939				762,491
Borrowings		219,906				90,350
Accrued interest payable and other liabilities		9,740				4,501
Subordinated debentures		27,859				27,848
Total Liabilities		1,611,444				885,190
Total Stockholders' Equity		185,383				94,193
Total Liabilities and Stockholders' Equity	$	1,796,827			$	979,383

 

SB ONE BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands Except Per Share Data)
(Unaudited)
	Three Months Ended December 31,							Year Ended December 31,
		2018			2017				2018			2017
INTEREST INCOME
Loans receivable, including fees	$	13,888		$	8,923			$	51,359		$	32,953
Securities:
Taxable		1,031			373				3,507			1,437
Tax-exempt		472			331				1,744			1,274
Interest bearing deposits		30			7				99			35
Total Interest Income		15,421			9,634				56,709			35,699
INTEREST EXPENSE
Deposits		2,805			1,052				8,078			3,584
Borrowings		965			391				3,288			1,749
Junior subordinated debentures		317			321				1,263			1,278
Total Interest Expense		4,087			1,764				12,629			6,611
Net Interest Income		11,334			7,870				44,080			29,088
PROVISION FOR LOAN LOSSES		210			459				1,437			1,586
Net Interest Income after Provision for Loan Losses		11,124			7,411				42,643			27,502
OTHER INCOME
Service fees on deposit accounts		331			311				1,290			1,123
ATM and debit card fees		266			199				983			777
Bank owned life insurance		198			144				761			522
Insurance commissions and fees		1,379			1,173				6,640			5,326
Investment brokerage fees		12			12				104			24
(Loss) gain on securities transactions		-			(60	)			36			(9	)
Gain (loss) on disposal of fixed assets		-			7				9			7
Other		307			175				926			515
Total Other Income		2,493			1,961				10,749			8,285
OTHER EXPENSES
Salaries and employee benefits		5,208			3,783				20,710			14,773
Occupancy, net		690			462				2,776			1,880
Data processing		911			530				3,351			2,173
Furniture and equipment		301			233				1,194			938
Advertising and promotion		99			49				587			308
Professional fees		410			395				1,412			1,173
Director fees		140			109				550			399
FDIC assessment		136			70				529			263
Insurance		28			77				210			279
Stationary and supplies		80			30				285			148
Merger-related expenses		1,460			705				5,804			1,187
Loan collection costs		52			47				255			122
Expenses and write-downs related to foreclosed real estate		96			(15	)			324			283
Amortization of intangible assets		65			-				247			-
Other		597			345				2,176			1,691
Total Other Expenses		10,273			6,820				40,410			25,617
Income before Income Taxes		3,344			2,552				12,982			10,170
INCOME TAX EXPENSE		991			2,039				3,059			4,479
Net Income	$	2,353		$	513			$	9,923		$	5,691
EARNINGS PER SHARE
Basic	$	0.29		$	0.09			$	1.26		$	1.06
Diluted	$	0.29		$	0.09			$	1.25		$	1.05

 

SB ONE BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
		Three Months Ended December 31,
			2018											2017
		Average								Average			Average								Average
		Balance				Interest				Rate (2)			Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	63,114			$	713			4.48	%		$	47,223			$	499			4.19	%
Taxable			130,105				1,031			3.14	%			63,055				373			2.35	%
Total securities			193,219				1,744			3.58	%			110,278				872			3.14	%
Total loans receivable (1) (4)			1,225,917				13,888			4.49	%			805,179				8,923			4.40	%
Other interest-earning assets			10,973				30			1.08	%			7,527				7			0.37	%
Total earning assets			1,430,109				15,662			4.34	%			922,984				9,802			4.21	%
Non-interest earning assets			98,408											48,143
Allowance for loan losses			(8,753	)										(7,528	)
Total Assets		$	1,519,764										$	963,599
Sources of Funds:
Interest bearing deposits:
NOW		$	261,737			$	417			0.63	%		$	192,595			$	185			0.38	%
Money market			185,419				879			1.88	%			99,115				250			1.00	%
Savings			210,092				284			0.54	%			134,803				70			0.21	%
Time			292,389				1,225			1.66	%			186,896				547			1.16	%
Total interest bearing deposits			949,637				2,805			1.17	%			613,409				1,052			0.68	%
Borrowed funds			144,703				965			2.65	%			74,255				391			2.09	%
Subordinated debentures			27,857				317			4.51	%			27,847				321			4.57	%
Total interest bearing liabilities			1,122,197				4,087			1.44	%			715,511				1,764			0.98	%
Non-interest bearing liabilities:
Demand deposits			235,342											148,420
Other liabilities			5,304											4,515
Total non-interest bearing liabilities			240,646											152,935
Stockholders' equity			156,921											95,153
Total Liabilities and Stockholders' Equity		$	1,519,764										$	963,599
Net Interest Income and Margin (5)							11,575			3.21	%							8,038			3.46	%
Tax-equivalent basis adjustment							(241	)										(168	)
Net Interest Income						$	11,334										$	7,870
(1) Includes loan fee income
(2) Average rates on securities are calculated on amortized costs
(3) Full taxable equivalent basis, using an effective tax rate of 21% in 2018 and 39% in 2017 and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance
(4) Loans outstanding include non-accrual loans
(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets
SB ONE BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
		Three Months Ended December 31, 2018											Three Months Ended September 30, 2018
		Average								Average			Average								Average
		Balance				Interest				Rate (2)			Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	63,114			$	713			4.48	%		$	63,752			$	666			4.14	%
Taxable			130,105				1,031			3.14	%			126,961				936			2.92	%
Total securities			193,219				1,744			3.58	%			190,713				1,602			3.33	%
Total loans receivable (1) (4)			1,225,917				13,888			4.49	%			1,152,741				13,009			4.48	%
Other interest-earning assets			10,973				30			1.08	%			10,219				23			0.89	%
Total earning assets			1,430,109				15,662			4.34	%			1,353,673				14,634			4.29	%
Non-interest earning assets			98,408											97,181
Allowance for loan losses			(8,753	)										(8,388	)
Total Assets		$	1,519,764										$	1,442,466
Sources of Funds:
Interest bearing deposits:
NOW		$	261,737			$	417			0.63	%		$	257,671			$	365			0.56	%
Money market			185,419				879			1.88	%			125,430				538			1.70	%
Savings			210,092				284			0.54	%			213,152				266			0.50	%
Time			292,389				1,225			1.66	%			262,244				987			1.49	%
Total interest bearing deposits			949,637				2,805			1.17	%			858,497				2,156			1.00	%
Borrowed funds			144,703				965			2.65	%			170,168				943			2.20	%
Subordinated debentures			27,857				317			4.51	%			27,854				318			4.53	%
Total interest bearing liabilities			1,122,197				4,087			1.44	%			1,056,519				3,417			1.28	%
Non-interest bearing liabilities:
Demand deposits			235,342											228,993
Other liabilities			5,304											6,081
Total non-interest bearing liabilities			240,646											235,074
Stockholders' equity			156,921											150,873
Total Liabilities and Stockholders' Equity		$	1,519,764										$	1,442,466
Net Interest Income and Margin (5)							11,575			3.21	%							11,217			3.29	%
Tax-equivalent basis adjustment							(241	)										(224	)
Net Interest Income						$	11,334										$	10,993
(1) Includes loan fee income
(2) Average rates on securities are calculated on amortized costs
(3) Full taxable equivalent basis, using an effective tax rate of 21% in 2018 and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance
(4) Loans outstanding include non-accrual loans
(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets
SB ONE BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
		Year Ended December 31,
			2018											2017
		Average								Average			Average								Average
		Balance				Interest				Rate (2)			Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	61,673			$	2,632			4.27	%		$	46,449			$	1,918			4.13	%
Taxable			126,104				3,507			2.78	%			64,636				1,437			2.22	%
Total securities			187,777				6,139			3.27	%			111,085				3,355			3.02	%
Total loans receivable (1) (4)			1,139,199				51,359			4.51	%			756,766				32,953			4.35	%
Other interest-earning assets			10,586				99			0.94	%			8,611				35			0.41	%
Total earning assets			1,337,562				57,597			4.31	%			876,462				36,343			4.15	%
Non-interest earning assets			97,078											45,398
Allowance for loan losses			(8,185	)										(7,113	)
Total Assets		$	1,426,455										$	914,747
Sources of Funds:
Interest bearing deposits:
NOW		$	257,314			$	1,527			0.59	%		$	183,457			$	584			0.32	%
Money market			124,973				1,952			1.56	%			93,505				843			0.90	%
Savings			216,275				818			0.38	%			137,120				285			0.21	%
Time			270,807				3,781			1.40	%			171,163				1,872			1.09	%
Total interest bearing deposits			869,369				8,078			0.93	%			585,245				3,584			0.61	%
Borrowed funds			150,294				3,288			2.19	%			78,551				1,749			2.23	%
Subordinated debentures			27,853				1,263			4.53	%			27,844				1,278			4.59	%
Total interest bearing liabilities			1,047,516				12,629			1.21	%			691,640				6,611			0.96	%
Non-interest bearing liabilities:
Demand deposits			223,984											139,611
Other liabilities			5,060											4,167
Total non-interest bearing liabilities			229,044											143,778
Stockholders' equity			149,895											79,329
Total Liabilities and Stockholders' Equity		$	1,426,455										$	914,747
Net Interest Income and Margin (5)							44,968			3.36	%							29,732			3.39	%
Tax-equivalent basis adjustment							(888	)										(644	)
Net Interest Income						$	44,080										$	29,088
(1) Includes loan fee income
(2) Average rates on securities are calculated on amortized costs
(3) Full taxable equivalent basis, using an effective tax rate of 21% in 2018 and 39% in 2017 and adjusted for TEFRA (Tax and Equity Fiscal Responsibility Act) interest expense disallowance
(4) Loans outstanding include non-accrual loans
(5) Represents the difference between interest earned and interest paid, divided by average total interest-earning assets

 

SB ONE BANCORP
Segment Reporting
(Dollars In Thousands)
(Unaudited)
	Three Months Ended December 31, 2018									Three Months Ended December 31, 2017
	Banking and									Banking and
	Financial			Insurance						Financial			Insurance
	Services			Services			Total			Services			Services			Total
Net interest income from external sources	$	11,334		$	-		$	11,334		$	7,870		$	-		$	7,870
Other income from external sources		1,074			1,419			2,493			723			1,238			1,961
Depreciation and amortization		376			8			384			257			5			262
Income before income taxes		3,178			166			3,344			2,333			219			2,552
Income tax expense (1)		925			66			991			1,952			87			2,039
Total assets		1,791,975			4,852			1,796,827			975,123			4,260			979,383
	Three Months Ended December 31, 2018									Three Months Ended September 30, 2018
	Banking and									Banking and
	Financial			Insurance						Financial			Insurance
	Services			Services			Total			Services			Services			Total
Net interest income from external sources	$	11,334		$	-		$	11,334		$	10,993		$	-		$	10,993
Other income from external sources		1,074			1,419			2,493			967			1,551			2,518
Depreciation and amortization		376			8			384			455			7			462
Income before income taxes		3,178			166			3,344			3,907			320			4,227
Income tax expense (1)		925			66			991			829			128			957
Total assets		1,791,975			4,852			1,796,827			1,453,536			6,106			1,459,642
	Year Ended December 31, 2018									Year Ended December 31, 2017
	Banking and									Banking and
	Financial			Insurance						Financial			Insurance
	Services			Services			Total			Services			Services			Total
Net interest income from external sources	$	44,080		$	-		$	44,080		$	29,088		$	-		$	29,088
Other income from external sources		3,975			6,774			10,749			2,864			5,421			8,285
Depreciation and amortization		1,723			27			1,750			1,037			24			1,061
Income before income taxes		10,987			1,995			12,982			8,757			1,413			10,170
Income tax expense (1)		2,261			798			3,059			3,914			565			4,479
Total assets		1,791,975			4,852			1,796,827			975,123			4,260			979,383
(1) Calculated at statutory tax rate of 28.1% in 2018 and 39.9% in 2017 for the insurance services segment

 

SB ONE BANCORP
Non-GAAP Reporting
(Dollars In Thousands)
(Unaudited)
	Three Months Ended December 31,
	2018				2017
Net income (GAAP)	$	2,353			$	513
Merger related expenses net of tax (1)		1,301				676
Tax Cuts and Jobs Act adjusted (2)		-				942
Non-recurring expenses net of tax (3)		119				-
Net income, as adjusted	$	3,773			$	2,131
Average diluted shares outstanding (GAAP)		8,082,270				6,011,574
Average diluted shares outstanding, as adjusted		8,082,270				6,011,574
Diluted EPS, as adjusted	$	0.47			$	0.35
Return on average assets, as adjusted		0.99	%			0.88	%
Return on average equity, as adjusted		9.62	%			8.96	%
(1) Merger related expense net of tax expense of $160 thousand QTD 2018 and $30 thousand in 2017.
(2) Represents acceleration of $942 thousand of deferred tax assets into expense due to recent enactment of the Tax Cuts and Jobs Act
(3) Non-recurring expenses net of tax expense of $51 thousand QTD 2018
	Three Months Ended
	December 31, 2018				September 30, 2018
Net income (GAAP)	$	2,353			$	3,270
Merger related expenses net of tax (1)		1,301				538
Non-recurring expenses net of tax (2)		119				-
Net income, as adjusted	$	3,773			$	3,808
Average diluted shares outstanding (GAAP)		8,082,270				7,910,449
Average diluted shares from capital raise (2)		-				-
Average diluted shares outstanding, as adjusted		8,082,270				7,910,449
Diluted EPS, as adjusted	$	0.47			$	0.48
Return on average assets, as adjusted		0.99	%			1.06	%
Return on average equity, as adjusted		9.62	%			10.10	%
(1) Merger related expense net of tax expense of $160 thousand QTD December 2018, $67 thousand QTD September 2018.
(2) Non-recurring expenses net of tax expense of $51 thousand QTD 2018
	Year Ended December 31,
	2018				2017
Net income (GAAP)	$	9,923			$	5,691
Merger related expenses net of tax (1)		4,521				1,021
Non-recurring expenses inclusive of rebrand net of tax (3)		271
S-3 Registration filing expenses net of tax (1)		-				45
Tax Cuts and Jobs Act adjusted (2)		-				942
Net income, as adjusted	$	14,715			$	7,699
Average diluted shares outstanding (GAAP)		7,921,269				5,404,381
Average diluted shares outstanding, as adjusted		7,921,269				5,404,381
Diluted EPS, as adjusted	$	1.86			$	1.42
Return on average assets, as adjusted		1.03	%			0.84	%
Return on average equity, as adjusted		9.82	%			9.71	%
(1) Merger related expenses net of tax expenses $1.3 million YTD 2018 and $137 thousand YTD 2017; S-3 registration filing net of tax expenses of $30 thousand in 2017.
(2) Represents acceleration of $942 thousand of deferred tax assets into expense due to recent enactment of the Tax Cuts and Jobs Act
(3) Non-recurring rebrand expenses net of tax expense of $54 thousand and non-recurring expenses of $51 thousand
(4) Calculation is based on 1,249,999 common stock shares issued and outstanding as part of the capital raise completed on June 21, 2017 divided by the number of days in the period.