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SB One Bancorp Reports Diluted EPS of $0.55 for the First Quarter of 2020

PARAMUS, N.J., April 29, 2020 (GLOBE NEWSWIRE) -- SB One Bancorp (the “Company”) (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 March 31, 2020, as compared to net income of $5.8 million, or $0.62 per basic and diluted share, for the quarter ended March 31, 2019. The Company reported net income, adjusted for merger-related expenses net of tax of $249 thousand, of $5.4 million, or $0.58 per basic and diluted share, for the quarter ended March 31, 2020.

The Company reported net income of $5.1 million, or $0.55 per basic and diluted share, and net income adjusted for merger-related expenses net of tax, of $249 thousand, of $5.4 million, or $0.58 per basic and diluted share, for the quarter ended March 31, 2020, as compared to net income of $5.3 million, or $0.57 per basic and diluted share, for the quarter ended December 31, 2019.

On March 12, 2020, the Company announced the signing of a definitive merger agreement with Provident Financial Services, Inc. (“Provident”) where Provident will acquire the Company in an all-stock transaction (the “Merger”). Each outstanding share of Company common stock will be exchanged for 1.357 shares of Provident common stock. The Merger is expected to close in the third quarter of 2020, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approval by the shareholders of the Company.

Anthony Labozzetta, President and CEO of SB One Bancorp and SB One Bank stated, “As we closed out the first quarter, like most, we were confronted with the social and economic uncertainty associated with Covid-19. Our employees quickly rose to the challenge and implemented our pandemic plan. Being an essential service, we remained open and implemented plans to protect our employees and customers. At the same time, we worked intensely to assist many of our customers who needed temporary relief in loan payments and/or help accessing the SBA Paycheck Protection Program (“PPP”) loans. I am grateful to my colleagues for their hard work and dedication”. Through April 28, 2020, approximately 374 loans totaling $318.8 million have received some form of payment assistance due to the COVID-19 pandemic. In addition, we have processed approximately $72.5 million in PPP loans and an additional $20.4 million in PPP loans through our Fintech partner.

“The first quarter began with strong momentum in our business lines. Beginning the year with a strong pipeline, the commercial lending group grew loans at an annualized rate of 18.1% and the retail banking group grew deposits at an annualized rate 19.3%. Notably, our non-interest bearing deposits grew 17.1%. In addition, we expanded our core net interest margin approximately 4 basis points. The growth and improvement in core net interest margin helped offset the year over year decrease in accretion income resulting from prior mergers,” stated Mr. Labozzetta.

Mr. Labozzetta also stated, “we are very excited about the prospects of our future partnership with Provident Bank. As we begin the merger process and interact with the Provident Bank team, albeit virtually, our decision to combine our organization is further reinforced. It is great to see two strong cultures come together.”

Declaration of Quarterly Dividend
On April 29, 2020, the Company’s Board of Directors declared a quarterly cash dividend of $0.085 per share, which is payable on May 26, 2020 to common shareholders of record as of the close of business on May 12, 2020.

Financial Performance
Net Income. For the quarter ended March 31, 2020, the Company reported net income of $5.1 million, or $0.55 per basic and diluted share, a decrease of 11.9%, as compared to net income of $5.8 million, or $0.62 per basic and diluted share, for the quarter ended March 31, 2019. The decrease in net income was primarily driven by a decrease in purchase accounting amortization of $653 thousand and merger-related expenses net of tax of $249 thousand as a result of the merger with Provident.

For the quarter ended March 31, 2020, the Company reported net income of $5.1 million, or $0.55 per basic and diluted share, a decrease of 3.8%, as compared to net income of $5.3 million, or $0.57 per basic and diluted share, for the quarter ended December 31, 2019. The decrease in net income was primarily driven by merger-related expenses net of tax of $249 thousand.

The Company reported net income, adjusted for merger-related expenses net of tax of $249 thousand, of $5.4 million, or $0.58 per basic and diluted share, for the quarter ended March 31, 2020.

Net Interest Income. Net interest income on a fully tax equivalent basis increased $572 thousand, or 3.9%, to $15.2 million for the first quarter of 2020, as compared to $14.7 million for the same period in 2019. The increase in net interest income was largely due to a $191.3 million, or 11.1%, increase in average interest earning assets, principally organic growth of loans receivable, which increased $155.6 million, or 10.4%. Net interest margin decreased 25 basis points to 3.21% for the first quarter of 2020, as compared to the same period in 2019. The decrease in net interest margin for the first quarter 2020 is mostly due to a decrease in purchase accounting amortization of $653 thousand, a decrease of prepayment penalties on loans receivable of $207 thousand and a down rate environment on interest earning assets. The Company’s average deposits grew $153.9 million, or 10.9%, for the first quarter of 2020, as compared to the same period in 2019. The Company’s cost of funds in the first quarter of 2020 decreased by 6 basis points as compared to the first quarter of 2019.

Net interest income on a fully tax equivalent basis increased $227 thousand, or 1.5%, to $15.2 million for the quarter ended March 31, 2020 as compared to $15.0 million for the quarter ended December 31, 2019. The increase in net interest income was largely due to a $75.2 million growth in average interest earning assets, principally loans receivable, which increased $64.1 million, or 4.0%, for the quarter ended March 31, 2020, as compared to the quarter ended December 31, 2019. The rate earned on interest bearing assets decreased 12 basis points, to 4.41%, for the quarter ended March 31, 2020, as compared to 4.53% for the quarter ended December 31, 2019. The decrease in rate earned on interest bearing assets for the first quarter 2020 is mostly due to a decrease of prepayment penalties on loans receivable of $203 thousand. The Company’s average deposits grew $42.6 million, or 2.8%, for the first quarter of 2020, as compared to the fourth quarter of 2019. The Company’s cost of funds decreased by 8 basis points as compared to the fourth quarter of 2019.

Provision for Loan Losses. Provision for loan losses increased $308 thousand, or 53.9%, to $879 thousand for the first quarter of 2020, as compared to $571 thousand for the same period in 2019.

Provision for loan losses increased $331 thousand, or 60.4%, to $879 thousand for the first quarter of 2020, as compared to $548 thousand for the fourth quarter of 2019.

The increase in provision for loan losses was primarily driven by changes to our qualitative modeling factors for a possible deterioration of the economic environment due to the circumstances surrounding the state of COVID-19.

Non-interest Income. Non-interest income increased $48 thousand, or 1.3%, to $3.7 million for the first quarter of 2020, as compared to the same period in 2019. The growth was largely due to increases in other income of $52 thousand, and insurance commissions and fees relating to SB One Insurance Agency of $36 thousand, for the first quarter of 2020, as compared to the same period in 2019. The increases in non-interest income were partially offset by a decrease in investment brokerage fees of $41 thousand for the first quarter of 2020, as compared to the same period in 2019.

Non-interest income increased $464 thousand, or 14.4%, to $3.7 million for the quarter ended March 31, 2020 as compared to the quarter ended December 31, 2019. The increase was principally due to a $1.1 million increase in insurance commissions and fees relating to SB One Insurance Agency, partially offset by a $531 thousand decrease in gains on sale of securities.

Non-interest Expense. The Company’s non-interest expenses excluding merger related expenses of $315 thousand increased $0.9 million, or 8.6%, to $11.1 million for the first quarter of 2020, as compared to the same period in 2019. The increase in non-interest expenses, excluding merger related expenses, occurred largely in salaries and employee benefits, which increased $640 thousand, data processing, which increased $114 thousand, and occupancy, which increased $100 thousand, for the first quarter of 2020, as compared to the same period in 2019.

Salary and employee benefits increased for the first quarter of 2020 versus the first quarter of 2019 mostly due to annual staff pay increases and additional staff to support the continued growth of the Company. Data processing increased as a result of increased customer transaction volume period over period.

The Company’s non-interest expenses increased $1.0 million, or 9.9%, to $11.4 million for the first quarter of 2020, as compared to the fourth quarter of 2019. The increase in non-interest expenses occurred largely in salaries and employee benefits, which increased $524 thousand, merger-related expenses, which increased $315 thousand, and FDIC assessment, which increased $131 thousand, for the first quarter of 2020, as compared to the fourth quarter of 2019. The increase in non-interest expenses for the first quarter of 2020 as compared to the fourth quarter of 2019 were partially offset by a decrease in professional fees of $138 thousand.

Salary and employee benefits increased for the first quarter of 2020 versus the fourth quarter of 2019 due to a discretionary bonus payment to Company employees of $225 thousand, annual staff pay increases and additional staff to support the continued growth of the Company. The increase in FDIC assessment period over period was driven by an FDIC assessment credit the Company received during the third and fourth quarter of 2019.

Income Tax Expense. The Company’s income tax expenses decreased $13 thousand to $1.5 million for the first quarter of 2020, as compared to the same period last year. The Company’s effective tax rate for the first quarter of 2020 was 22.5%, as compared to 20.5% for the same period in 2019.

The Company’s income tax expenses decreased $453 thousand to $1.5 million for the quarter ended March 31, 2020, as compared to the quarter ended December 31, 2019. The Company’s effective tax rate for the quarter ended March 31, 2020 was 22.5%, as compared to 26.7% for the quarter ended December 31, 2019.

Financial Condition
At March 31, 2020, the Company’s total assets were $2.1 billion, an increase of $78.6 million, or 3.9%, as compared to total assets of $2.0 billion at December 31, 2019. The increase was mainly attributable to an increase in loans receivable of $56.3 million, or 3.5%, to $1.7 billion.

The Company’s total deposits increased $73.5 million, or 4.8%, to $1.6 billion at March 31, 2020, from $1.5 billion at December 31, 2019. The growth in deposits was mostly due to an increase in interest bearing deposits of $46.0 million, or 3.6%.

At March 31, 2020, the Company’s total stockholders’ equity was $194.9 million, a decrease of $4.3 million when compared to December 31, 2019. At March 31, 2020, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 9.97%, 11.52%, 12.15% and 11.52%, 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 0.85% at March 31, 2020, as compared to 0.83% at December 31, 2019. The ratio of NPAs to total assets decreased to 0.85% at March 31, 2020, as compared to 1.35% at March 31, 2019. NPAs exclude $2.5 million of Purchased Credit-Impaired (“PCI”) loans acquired through the merger with Community Bank of Bergen County (“Community Bank”). NPAs increased $942 thousand to $17.6 million at March 31, 2020, as compared to $16.7 million at December 31, 2019. Non-accrual loans, excluding $2.5 million of PCI loans, increased $1.6 million, or 14.4%, to $13.1 million at March 31, 2020, as compared to $11.4 million at December 31, 2019. Loans past due 30 to 89 days totaled $5.0 million at March 31, 2020, representing a decrease of $2.8 million, or 36.4%, as compared to $7.8 million at December 31, 2019.

The Company continues to actively market its foreclosed real estate properties, the value of which decreased $696 thousand to $3.1 million at March 31, 2020 as compared to $3.8 million at December 31, 2019. The decrease in foreclosed real estate properties was attributable to the sale of two properties totaling $696 thousand. At March 31, 2020, the Company’s foreclosed real estate properties had an average carrying value of approximately $310 thousand per property.

The Company’s allowance for loan losses increased $600 thousand, or 5.8%, to $10.9 million, at March 31, 2020 as compared to $10.3 million at December 31, 2019. The Company’s outstanding credit mark recorded on the legacy Community Bank and Enterprise Bank, N.J. (“Enterprise”) portfolios of $315.5 million totaled $6.1 million at March 31, 2020. The Company’s combined coverage of allowance for loan loss and credit mark on the legacy Community Bank and Enterprise portfolios totaled $17.0 million, or 1.00% of the overall loan portfolio, at March 31, 2020. The Company recorded $866 thousand in provision for loan losses for the quarter ended March 31, 2020, as compared to $552 thousand for the quarter ended March 31, 2019. Additionally, the Company recorded net charge-offs of $276 thousand for the quarter ended March 31, 2020, as compared to $163 thousand in net charge-offs for the quarter ended March 31, 2019.

About SB One Bancorp

SB One Bancorp (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 is a member of 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 was recognized as one of the 50 Fastest Growing Companies in New Jersey as ranked by NJBIZ Magazine in 2016. 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 the Company and Provident, 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) the effects of the COVID-19 pandemic on the economy generally and on the Company in particular; (2) the businesses of the Company and Provident may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; (3) the expected growth opportunities or cost savings from the Merger may not be fully realized or may take longer to realize than expected; (4) deposit attrition, operating costs, customer losses and business disruption following the Merger, including adverse effects on relationships with employees and customers, may be greater than expected; (5) the regulatory approvals required for the Merger may not be obtained on the proposed terms or on the anticipated schedule; (6) the Company’s shareholders may fail to approve the Merger; (7) changes to interest rates; (8) the ability to control costs and expenses; (9) general economic conditions; (10) the success of the Company’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 (11) risks associated with the quality of the Company’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 the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in subsequent filings with the Securities and Exchange Commission. The Company 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

SB ONE BANCORP

SUMMARY FINANCIAL HIGHLIGHTS

(In Thousands, Except Percentages and Per Share Data)

(Unaudited)

3/31/2020 VS.

3/31/2020

3/31/2019

12/31/2019

3/31/19

12/31/19

BALANCE SHEET HIGHLIGHTS - Period End Balances

Total securities

$

238,544

$

196,081

$

216,193

21.7

%

10.3

%

Total loans

1,685,138

1,513,645

1,628,846

11.3

%

3.5

%

Allowance for loan losses

(10,867

)

(9,190

)

(10,267

)

18.2

%

5.8

%

Total assets

2,080,236

1,840,129

2,001,657

13.0

%

3.9

%

Total deposits

1,598,551

1,461,324

1,525,041

9.4

%

4.8

%

Total borrowings and junior subordinated debt

258,143

179,370

260,983

43.9

%

(1.1

)

%

Total shareholders' equity

194,914

189,695

199,229

2.8

%

(2.2

)

%

FINANCIAL DATA - QUARTER ENDED:

Net interest income (tax equivalent) (a)

$

15,238

$

14,666

$

15,011

3.9

%

1.5

%

Provision for loan losses

879

571

548

53.9

%

60.4

%

Total non-interest income

3,681

3,633

3,217

1.3

%

14.4

%

Total non-interest expense

11,367

10,178

10,344

11.7

%

9.9

%

Income before provision for income taxes (tax equivalent)

6,673

7,550

7,336

(11.6

)

%

(9.0

)

%

Provision for income taxes

1,487

1,500

1,940

(0.9

)

%

(23.4

)

%

Taxable equivalent adjustment (a)

58

227

65

(74.4

)

%

(10.8

)

%

Net income

$

5,128

$

5,823

$

5,331

(11.9

)

%

(3.8

)

%

Net income per common share - Basic

$

0.55

$

0.62

$

0.57

(11.3

)

%

(3.5

)

%

Net income per common share - Diluted

$

0.55

$

0.62

$

0.57

(11.3

)

%

(3.5

)

%

Return on average assets

1.01

%

1.28

%

1.09

%

(20.6

)

%

(7.3

)

%

Return on average equity

10.15

%

12.39

%

10.77

%

(18.0

)

%

(5.8

)

%

Efficiency ratio (b)

60.27

%

56.32

%

56.95

%

7.0

%

5.8

%

Net interest margin (tax equivalent)

3.21

%

3.46

%

3.24

%

(7.2

)

%

(0.9

)

%

Avg. interest earning assets/Avg. interest bearing liabilities

1.26

1.25

1.25

0.3

%

0.3

%

SHARE INFORMATION:

Book value per common share

$

20.70

$

20.03

$

21.29

3.3

%

(2.8

)

%

Tangible book value per common share

17.62

16.93

18.19

4.1

%

(3.1

)

%

Outstanding shares- period ending

9,417,933

9,470,730

9,357,811

(0.6

)

%

0.6

%

Average diluted shares outstanding (year to date)

9,304,617

9,460,118

9,381,642

(1.6

)

%

(0.8

)

%

CAPITAL RATIOS:

Total equity to total assets

9.37

%

10.31

%

9.95

%

(9.1

)

%

(5.9

)

%

Leverage ratio (c)

9.97

%

10.21

%

10.16

%

(2.4

)

%

(1.9

)

%

Tier 1 risk-based capital ratio (c)

11.52

%

12.09

%

11.65

%

(4.7

)

%

(1.1

)

%

Total risk-based capital ratio (c)

12.15

%

12.70

%

12.27

%

(4.3

)

%

(1.0

)

%

Common equity Tier 1 capital ratio (c)

11.52

%

12.09

%

11.65

%

(4.7

)

%

(1.1

)

%

ASSET QUALITY:

Non-accrual loans (e)

$

13,061

$

20,638

$

11,415

(36.7

)

%

14.4

%

Loans 90 days past due and still accruing

-

-

-

-

%

-

%

Troubled debt restructured loans ("TDRs") (d)

1,448

1,035

1,456

39.9

%

(0.5

)

%

Foreclosed real estate

3,097

3,241

3,793

(4.4

)

%

(18.3

)

%

Non-performing assets ("NPAs")

$

17,606

$

24,914

$

16,664

(29.3

)

%

5.7

%

Foreclosed real estate, criticized and classified assets (e)

$

24,571

$

28,704

$

25,180

(14.4

)

%

(2.4

)

%

Loans past due 30 to 89 days

$

4,963

$

4,842

$

7,797

2.5

%

(36.3

)

%

Charge-offs (Recoveries) , net (quarterly)

$

276

$

163

$

30

69.3

%

820.0

%

Charge-offs (Recoveries) , net as a % of average loans (annualized)

0.07

%

0.04

%

0.01

%

53.4

%

784.4

%

Non-accrual loans to total loans

0.78

%

1.36

%

0.70

%

(43.2

)

%

10.6

%

NPAs to total assets

0.85

%

1.35

%

0.83

%

(37.5

)

%

1.7

%

NPAs excluding TDR loans (d) to total assets

0.78

%

1.30

%

0.76

%

(40.1

)

%

2.2

%

Non-accrual loans to total assets

0.63

%

1.12

%

0.57

%

(44.0

)

%

10.1

%

Allowance for loan losses as a % of non-accrual loans

83.20

%

44.53

%

89.94

%

86.8

%

(7.5

)

%

Allowance for loan losses to total loans

0.64

%

0.61

%

0.63

%

6.2

%

2.3

%

(a) Full taxable equivalent basis, using a 30.09% 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 $2.5 million


SB ONE BANCORP

CONSOLIDATED BALANCE SHEETS

(Dollars In Thousands)

ASSETS

March 31, 2020

December 31, 2019

Cash and due from banks

$

12,377

$

9,525

Interest-bearing deposits with other banks

27,928

34,161

Cash and cash equivalents

40,305

43,686

Interest bearing time deposits with other banks

200

200

Securities available for sale, at fair value

232,205

212,181

Securities held to maturity

6,339

4,012

Other Bank Stock, at cost

12,487

12,498

Loans receivable, net of unearned income

1,685,138

1,628,846

Less: allowance for loan losses

10,867

10,267

Net loans receivable

1,674,271

1,618,579

Foreclosed real estate

3,097

3,793

Premises and equipment, net

19,055

19,080

Right-of-use assets, net

4,535

4,644

Accrued interest receivable

6,856

6,175

Goodwill and intangibles

28,948

29,039

Bank-owned life insurance

36,936

37,209

Other assets

15,002

10,561

Total Assets

$

2,080,236

$

2,001,657

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest bearing

$

285,857

$

258,311

Interest bearing

1,312,694

1,266,730

Total Deposits

1,598,551

1,525,041

Borrowings

230,272

233,114

Lease liability

4,676

4,727

Accrued interest payable and other liabilities

23,952

11,677

Subordinated debentures

27,871

27,869

Total Liabilities

1,885,322

1,802,428

Total Stockholders' Equity

194,914

199,229

Total Liabilities and Stockholders' Equity

$

2,080,236

$

2,001,657


SB ONE BANCORP

CONSOLIDATED STATEMENTS OF INCOME

(Dollars In Thousands Except Per Share Data)

(Unaudited)

Three Months Ended March 31,

3/31/2020

3/31/2019

12/31/2019

INTEREST INCOME

Loans receivable, including fees

$

19,330

$

18,160

$

19,183

Securities:

Taxable

1,508

1,175

1,524

Tax-exempt

119

448

128

Federal funds sold

-

-

-

Interest bearing deposits

20

49

47

Total Interest Income

20,977

19,832

20,882

INTEREST EXPENSE

Deposits

4,340

3,864

4,517

Borrowings

1,141

1,214

1,102

Junior subordinated debentures

316

315

317

Total Interest Expense

5,797

5,393

5,936

Net Interest Income

15,180

14,439

14,946

PROVISION FOR LOAN LOSSES

879

571

548

Net Interest Income after Provision for Loan Losses

14,301

13,868

14,398

NON-INTEREST INCOME

Service fees on deposit accounts

319

330

355

ATM and debit card fees

245

231

277

Bank owned life insurance

228

230

234

Insurance commissions and fees

2,598

2,562

1,535

Investment brokerage fees

15

56

8

Gain (loss) on securities transactions

-

-

531

(Loss) gain on disposal of fixed assets

-

-

(42

)

Other

276

224

319

Total Non-Interest Income

3,681

3,633

3,217

NON-INTEREST EXPENSE

Salaries and employee benefits

6,770

6,130

6,246

Occupancy, net

879

779

779

Data processing

1,054

940

1,053

Furniture and equipment

318

318

370

Advertising and promotion

112

132

151

Professional fees

443

462

581

Director fees

177

145

166

FDIC assessment

252

166

121

Insurance

32

30

32

Stationary and supplies

91

84

84

Merger-related expenses

315

-

-

Loan collection costs

75

120

43

Expenses and write-downs related to foreclosed real estate

90

65

(47

)

Amortization of intangible assets

91

102

101

Other

668

705

664

Total Non-Interest Expense

11,367

10,178

10,344

Income before Income Taxes

6,615

7,323

7,271

INCOME TAX EXPENSE

1,487

1,500

1,940

Net Income

$

5,128

$

5,823

$

5,331

EARNINGS PER SHARE

Basic

$

0.55

$

0.62

$

0.57

Diluted

$

0.55

$

0.62

$

0.57


SB ONE BANCORP

COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES

(Dollars In Thousands)

(Unaudited)

Three Months Ended March 31,

2020

2019

Average

Average

Average

Average

Balance

Interest

Rate (2)

Balance

Interest

Rate (2)

Earning Assets:

Securities:

Tax exempt (3)

$

16,638

$

179

4.33

%

$

62,654

$

675

4.37

%

Taxable

212,922

1,508

2.85

%

142,137

1,175

3.35

%

Total securities

229,560

1,687

2.96

%

204,791

1,850

3.66

%

Total loans receivable (1) (4)

1,656,231

19,330

4.69

%

1,500,604

18,160

4.91

%

Other interest-earning assets

25,591

20

0.31

%

14,691

49

1.35

%

Total earning assets

1,911,382

21,037

4.43

%

1,720,086

20,059

4.73

%

Non-interest earning assets

125,001

114,358

Allowance for loan losses

(10,457

)

(8,815

)

Total Assets

$

2,025,926

$

1,825,629

Sources of Funds:

Interest bearing deposits:

NOW

$

250,791

$

431

0.69

%

$

255,959

$

446

0.71

%

Money market

253,810

898

1.42

%

240,936

1,178

1.98

%

Savings

218,326

222

0.41

%

221,608

327

0.60

%

Time

562,388

2,791

2.00

%

436,376

1,913

1.78

%

Total interest bearing deposits

1,285,315

4,342

1.36

%

1,154,879

3,864

1.36

%

Borrowed funds

206,398

1,141

2.22

%

188,983

1,214

2.61

%

Subordinated debentures

27,870

316

4.56

%

27,860

315

4.59

%

Total interest bearing liabilities

1,519,583

5,799

1.53

%

1,371,722

5,393

1.59

%

Non-interest bearing liabilities:

Demand deposits

282,875

259,363

Other liabilities

21,395

6,481

Total non-interest bearing liabilities

304,270

265,844

Stockholders' equity

202,073

188,063

Total Liabilities and Stockholders' Equity

$

2,025,926

$

1,825,629

Net Interest Income and Margin (5)

15,238

3.21

%

14,666

3.46

%

Tax-equivalent basis adjustment

(58

)

(227

)

Net Interest Income

$

15,180

$

14,439

(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 30.09% in 2020 and 2019 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 March 31, 2020

Three Months Ended December 31, 2019

Average

Average

Average

Average

Balance

Interest

Rate (2)

Balance

Interest

Rate (2)

Earning Assets:

Securities:

Tax exempt (3)

$

16,638

$

179

4.33

%

$

17,566

$

193

4.36

%

Taxable

212,922

1,508

2.85

%

205,615

1,524

2.94

%

Total securities

229,560

1,687

2.96

%

223,181

1,717

3.05

%

Total loans receivable (1) (4)

1,656,231

19,330

4.69

%

1,592,100

19,183

4.78

%

Other interest-earning assets

25,591

20

0.31

%

20,872

47

0.89

%

Total earning assets

1,911,382

21,037

4.43

%

1,836,153

20,947

4.53

%

Non-interest earning assets

125,001

125,299

Allowance for loan losses

(10,457

)

(10,001

)

Total Assets

$

2,025,926

$

1,951,451

Sources of Funds:

Interest bearing deposits:

NOW

$

250,791

$

431

0.69

%

$

256,906

$

482

0.74

%

Money market

253,810

898

1.42

%

246,363

965

1.55

%

Savings

218,326

222

0.41

%

219,585

283

0.51

%

Time

562,388

2,791

2.00

%

531,415

2,787

2.08

%

Total interest bearing deposits

1,285,315

4,342

1.36

%

1,254,269

4,517

1.43

%

Borrowed funds

206,398

1,141

2.22

%

182,274

1,102

2.40

%

Subordinated debentures

27,870

316

4.56

%

27,867

317

4.51

%

Total interest bearing liabilities

1,519,583

5,799

1.53

%

1,464,410

5,936

1.61

%

Non-interest bearing liabilities:

Demand deposits

282,875

271,282

Other liabilities

21,395

17,810

Total non-interest bearing liabilities

304,270

289,092

Stockholders' equity

202,073

197,949

Total Liabilities and Stockholders' Equity

$

2,025,926

$

1,951,451

Net Interest Income and Margin (5)

15,238

3.21

%

15,011

3.24

%

Tax-equivalent basis adjustment

(58

)

(65

)

Net Interest Income

$

15,180

$

14,946

(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 30.09% in 2020 and 2019 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 March 31, 2020

Three Months Ended March 31, 2019

Banking and

Banking and

Financial

Insurance

Financial

Insurance

Services

Services

Total

Services

Services

Total

Net interest income from external sources

$

15,180

$

-

$

15,180

$

14,439

$

-

$

14,439

Other income from external sources

1,028

2,653

3,681

1,032

2,601

3,633

Depreciation and amortization

467

12

479

525

12

537

Income before income taxes

5,437

1,178

6,615

6,057

1,266

7,323

Income tax expense (1)

1,016

471

1,487

1,119

381

1,500

Total assets

2,073,562

6,674

2,080,236

1,834,400

5,729

1,840,129


SB ONE BANCORP

Non-GAAP Reporting

(Dollars In Thousands)

(Unaudited)

Three Months Ended March 31,

2020

2019

Net income (GAAP)

$

5,128

$

5,823

Merger related expenses net of tax (1)

249

-

Net income, as adjusted

$

5,377

$

5,823

Average diluted shares outstanding (GAAP)

9,304,617

9,460,118

Diluted EPS, as adjusted

$

0.58

$

0.62

Average assets

2,025,926

1,825,629

Return on average assets, as adjusted

1.06

%

1.28

%

Return on average equity, as adjusted

10.64

%

12.39

%

(1) The tax effect on the merger related expense was $66 thousand QTD 2020