Revere Bank Announces Record Earnings for the Third Quarter of 2019 – Net Income of $8.25 Million Increased 17.7% Over the Third Quarter of 2018

Published

ROCKVILLE, Md., Oct. 24, 2019 (GLOBE NEWSWIRE) -- Revere Bank (the “Bank”) (OTCQX: REVB) today reported record quarterly net income of $8.25 million for the quarter ended September 30, 2019, a 17.7% increase compared to net income of $7.01 million for the quarter ended September 30, 2018, and a 4.3% increase over the quarter ended June 30, 2019.  Net income per diluted common share increased 3.1% to $0.67 for the third quarter of 2019 compared to $0.65 for the same period in 2018.  Net income per basic common share for the third quarter of 2019 was $0.69 compared to $0.68 for the same period in 2018, an increase of 1.5%. Both diluted earnings per share and basic earnings per share increased due to higher net income, and were also affected by our successful capital raise in September 2018, in which we issued 1.6 million additional shares of common stock.  Compared to the second quarter of 2019, diluted earnings per share and basic earnings per share increased by 3.1% and 4.5%, respectively, driven primarily by increased earnings.

For the nine months ended September 30, 2019, net income was $23.66 million, a 15.9% increase compared to net income of $20.42 million for the nine months ended September 30, 2018.  Despite increased earnings, our year-to-date net income per diluted common share decreased $0.01 per diluted common share to $1.93 for the nine months ended September 30, 2019, compared to $1.94 per diluted common share for the nine months ended September 30, 2018.  This decrease in our diluted earnings per share was caused by the September 2018 capital raise.

Quarterly Highlights

  • On September 24, 2019, we announced that Revere Bank will be acquired by Sandy Spring Bancorp, Inc., in an all stock transaction that is expected to close during the first half of 2020.
  • Net income grew by 17.7% compared to the third quarter of 2018 and by 4.3% compared to the second quarter of 2019.
  • Period end loans grew 18.5%, or $369.0 million, compared to the third quarter of 2018, and grew 3.1%, or $71.5 million, compared to the second quarter of 2019.
  • Period end deposits grew 19.8%, or $387.0 million, compared to the third quarter of 2018, and grew 9.9%, or $209.6 million, compared to the second quarter of 2019.
  • Net interest margin was 3.57% for the third quarter of 2019 compared to 3.69% for the third quarter of 2018, and 3.72% for the second quarter of 2019.  The margin decrease in the third quarter was primarily driven by the strong deposit growth and a large increase in our cash balances which impacted our earning asset mix compared to prior periods.
  • Efficiency ratio improved to 48.84% for the third quarter of 2019 compared to 52.53% for the same period last year and increased slightly compared to 48.47% for the linked quarter.
  • Return on average equity was 11.20% for the third quarter of 2019, compared to 13.00% for the third quarter of 2018 and 11.27% for the second quarter of 2019.
  • Tangible book value was $22.14 as of the quarter ended September 30, 2019, compared to $19.09 and $21.40 for the third quarter of 2018 and the second quarter of 2019, respectively.

Ken Cook, Co-President and CEO, said, "Our loan, deposit and profit momentum continues as we posted strong quarterly, year-to-date, and year-over-year results.  We are very proud of our team and the alignment throughout the Bank as we continue to establish and grow relationships with businesses and individuals throughout our market."

Drew Flott, Co-President and CEO, added, "We are very pleased with another quarter of strong loan, deposit and earnings growth.  While we saw a dip in the net interest margin, due primarily to a swing in our earning asset mix, our strong balance sheet growth allowed us to increase our net interest income by more than $1 million, or over 5%, compared to last quarter."

Earnings and Growth Highlights

Quarter end highlights

                   
  For the Three Months Ended   Change Compared to
In thousands,except per share data September 30, 2019   June 30,  2019   September 30, 2018   June 30,  2019   September 30, 2018
Net Income $ 8,247     $ 7,906     $ 7,006     $ 341     $ 1,241  
Earnings per share - basic 0.69     0.66     0.68     0.03     0.01  
Earnings per share - diluted 0.67     0.65     0.65     0.02     0.02  
                   
Loans (period end) $ 2,366,490     $ 2,294,945     $ 1,997,511     $ 71,545     $ 368,979  
Deposits (period end) 2,337,430     2,127,831     1,950,385     209,599     387,045  
                   

Third quarter net income increased $1.24 million, or 17.7%, compared to the third quarter of 2018, and increased $341 thousand, or 4.3%, compared to the second quarter of 2019.  The increase compared to both periods was primarily driven by loan growth and the FDIC small bank premium credit partially offset by the impact of higher interest rates on deposits, an increase in salaries and benefits expense, and merger costs.  The third quarter diluted earnings per share increased $0.02 per diluted share compared to the second quarter of 2019, driven by increased net income.  Compared to the prior year quarter, diluted earnings per share increased $0.02 per share, due to an increase in net income which was offset partially by the impact of the incremental share count increase from our capital raise late in the third quarter of 2018.

Our continued earnings growth is driven by strong loan and deposit growth.  As of September 30, 2019, loans were $2.37 billion, an increase of 18.5% compared to loans of $2.00 billion as of September 30, 2018, and an increase of 3.1% compared to loans of $2.29 billion as of June 30, 2019.  Total deposits increased by 19.8% compared to $1.95 billion as of September 30, 2018, and core deposits, defined as total deposits excluding brokered deposits and listing service deposits, increased by 21.2% compared to the same period.  Total deposits increased 9.9% to $2.34 billion as of September 30, 2019, compared to $2.13 billion as of June 30, 2019.

Year-to-date highlights

           
  For the Nine Months Ended
In thousands, except per share data September 30, 2019   September 30, 2018   Change
Net Income $ 23,662     $ 20,415     $ 3,247  
Earnings per share - basic 1.99     2.02     (0.03 )
Earnings per share - diluted 1.93     1.94     (0.01 )
           

For the nine months ended September 30, 2019, net income increased $3.25 million, or 15.9%, to $23.66 million compared to $20.42 million for the nine months ended September 30, 2018.  The increase in net income was primarily due to an increase in income due to higher loan growth partially offset by an increase in the cost of deposits and an increase in salaries and benefits expense.  Diluted earnings per share for the nine months ended September 30, 2019, decreased $0.01 per share compared to the same period last year, driven by the capital raise, despite increased earnings.

Income Statement Review

For the three months ended September 30, 2019

Net interest income

                   
  For the Three Months Ended   Change Compared to
In thousands September 30,   June 30,   September 30,   June 30,   September 30,
2019 2019 2018 2019 2018
Interest income $ 33,718   $ 31,622   $ 27,403   $ 2,096   $ 6,315
Interest expense 9,743   8,831   6,559   912   3,184
Net interest income $ 23,975   $ 22,791   $ 20,844   $ 1,184   $ 3,131
                   
Yield on interest-earning assets 5.02%   5.16%   4.85%   (14) bps   17 bps
Cost of interest-bearing liabilities 1.95%   1.93%   1.51%   2 bps   44 bps
Net interest margin 3.57%   3.72%   3.69%   (15) bps   (12) bps
                   

On a year-over-year basis, our net interest income continues to grow and drive increased earnings.  Third quarter net interest income increased 15.0% compared to the same period last year driven primarily by strong loan growth and an increase in the yield on interest-earnings assets, offset by an increase in our cost of deposits.  Compared to the linked quarter, net interest income improved 5.2%.  This improvement was primarily caused by loan growth and significant overnight investments combined with one additional day in the period, offset by a moderate increase in the cost of interest-bearing liabilities.

Our current quarter’s net interest margin decreased 15 basis points from the linked quarter.  Our deposit growth was significantly stronger than our robust loan growth in the third quarter. This mismatch changed the mix within our earning assets.  More than half of the decrease in our quarterly margin is attributable to the change in our earning asset mix.  The majority of the rest of the margin decrease was associated with the two Federal Reserve rate decreases and deposit rates declining at a slower pace than loan rates.  Also impacting the lower net interest margin was a slightly higher cost of interest-bearing liabilities caused by a change in deposit mix.

When compared to the quarter ended September 30, 2018, our net interest margin decreased 12 basis points.  This decrease was driven by a flattened yield curve.  Our cost of interest-bearing liabilities has increased 44 basis points which was partially offset by an increase of 17 basis points in our yield on interest-earning assets.

The impact of the increase in the cost of interest-bearing liabilities on net income has been partially mitigated by strong growth in our non-interest-bearing deposits of 14.5% and 27.1% compared to the second quarter of 2019 and the third quarter of 2018, respectively.

Provision for Loan LossesFor the third quarter of 2019, the provision for loan losses decreased $34 thousand and increased $757 thousand compared to the second quarter of 2019 and third quarter of 2018, respectively.  Exceptionally strong loan growth during the second quarter of 2019 required a larger provision than was required during the third quarter of 2019.  The provisions were also impacted by net charge-offs of $503 thousand in the current quarter and net recoveries of $128 thousand in the second quarter of 2019.  Our provision continues to reflect our strong credit quality.

Our allowance for loan losses to total loans as of September 30, 2019, was 0.93% compared to 0.88% as of September 30, 2018.  As of September 30, 2019 and 2018, we had purchase accounting discounts, associated with our two bank acquisitions, remaining of $3.55 million and $4.77 million, respectively.  Adjusting for the remaining purchase accounting discounts, our allowance for loan losses to total loans would have been 1.08% and 1.12%, respectively.

Non-interest income and Non-interest expense

                   
  For the Three Months Ended   Change Compared to
Dollars in thousands September 30,   June 30,   September 30,   June 30,   September 30,
2019 2019 2018 2019 2018
Non-interest income $ 911   $ 812   $ 425   $ 99   $ 486
Non-interest expense $ 12,154   $ 11,441   $ 11,173   $ 713   $ 981
                   
Efficiency ratio 48.84%   48.47%   52.53%   37 bps   (369) bps
                   

Non-interest income was $911 thousand for the third quarter of 2019, an increase of $486 thousand, or 114.4%, compared to the third quarter of 2018, and $99 thousand, or 12.2% compared to the second quarter of 2019.  The increase compared to the prior year period was driven by an increase in referral fee income, recorded in other non-interest income, and an increase in fees earned on deposit accounts.  Compared to the second quarter of 2019, the increase was driven by an increase in referral fee income.

Non-interest expense increased by $981 thousand, or 8.8%, in the third quarter of 2019 compared to the same period last year.  The year-over-year increase was due to higher salaries and benefits, related to an increase in staff necessary to support our continued growth, merger costs, and an increase in occupancy costs, offset partially by an FDIC small bank premium credit related to the second quarter of 2019.  Compared to the second quarter of 2019, non-interest expense increased $713 thousand, or 6.2%, primarily driven by increases in salaries and benefits, professional fees, and merger costs, offset partially by the previously mentioned FDIC small bank premium credit.  Approximately $200 thousand of the increase in salaries and benefits was associated with the addition of a team of commercial lenders and support staff who joined the Bank during the second quarter of 2019.  Also impacting non-interest expense for the three months ended September 30, 2019, was a $48 thousand reversal of gains recorded during the second quarter of 2019 on other real estate owned ("OREO"), as well as additional costs associated with carrying the OREO of $55 thousand, primarily driven by loan closing costs.

During the third quarter of 2019, our efficiency ratio improved to 48.84% compared to 52.53% in the same period last year.  The improvement is primarily due to strong net interest income growth, non-interest income growth and continued economies of scale as we continue to grow.  Compared to the linked quarter, our efficiency ratio increased slightly to 48.84% from 48.47%.

Performance Ratios

                   
  For the Three Months Ended   Change Compared to
  September 30, 2019   June 30,  2019   September 30, 2018   June 30,  2019   September 30, 2018
Return on average assets (annualized) 1.20%   1.25%   1.21%   (5) bps   (1) bps
Return on average equity (annualized) 11.20%   11.27%   13.00%   (7) bps   (180) bps
                   

Return on average assets decreased five basis points and return on average equity decreased seven basis points, compared to the second quarter of 2019.  The decrease in return on average assets and return on average equity, compared to the second quarter of 2019, was driven by the change in our earning asset mix resulting in a larger cash position, despite strong earnings during the period. Return on average assets and return on average equity declined by one basis point and 180 basis points compared to the third quarter of 2018, despite stronger earnings, due to the impact of our capital raise late in the third quarter of 2018, as well as the previously mentioned large increase in cash. In addition when compared to the three months ended September 30, 2018, return on equity was impacted by the continued improvement in the fair value of available-for-sale investment securities, which does not have an impact on earnings.

For the nine months ended September 30, 2019

Net interest income

           
  For the Nine Months Ended
In thousands September 30,   September 30,   Change
2019 2018
Interest income $ 95,188   $ 77,451   $ 17,737
Interest expense 26,756   16,767   9,989
Net interest income $ 68,432   $ 60,684   $ 7,748
           
Yield on interest-earning assets 5.07%   4.82%   25 bps
Cost of interest-bearing liabilities 1.91%   1.35%   56 bps
Net interest margin 3.65%   3.77%   (12) bps
           

Net interest income increased $7.75 million for the nine months ended September 30, 2019, to $68.43 million as compared to $60.68 million for the nine months ended September 30, 2018.  The increase was driven by loan growth over the period as well as higher rates charged on loans, partially offset by a higher cost of funds.

The net interest margin for the nine months ended September 30, 2019, decreased 12 basis points compared to the nine months ended September 30, 2018, due primarily to a flattened yield curve and changes in our earning asset mix.  The cost of interest-bearing liabilities has risen 56 basis points.  The increase in the cost of liabilities was primarily due to higher rates on certificate of deposit and money market accounts.  The increased cost of interest-bearing liabilities was offset partially by higher yields on interest-earning assets, driven mostly by an increase in rates charged on loans.

Provision for Loan LossesFor the nine months ended September 30, 2019, the provision for loan losses was $3.61 million, compared to $2.75 million for the same period last year.  The provision was impacted by our loan growth, very strong asset quality, and net charge-offs during the nine months ended September 30, 2019, of $367 thousand.

Non-interest income and Non-interest expense

           
  For the Nine Months Ended
Dollars in thousands September 30,   September 30,   Change
2019 2018
Non-interest income $ 2,212   $ 1,613   $ 599
Non-interest expense $ 34,709   $ 32,411   $ 2,298
           
Efficiency ratio 49.13%   52.03%   (290) bps
           

For the nine months ended September 30, 2019, non-interest income increased $599 thousand, or 37.1%, to $2.21 million compared to $1.61 million for the nine months ended September 30, 2018.  The increase was driven by an increase in deposit account fees and an increase in referral fee income, which is recorded in other non-interest income.

Non-interest expense increased to $34.71 million for the nine months ended September 30, 2019, compared to $32.41 million for the nine months ended September 30, 2018.  The increase of $2.30 million, or 7.1%, was primarily driven by increases in salaries and benefits, occupancy expenses, and merger costs, offset partially by the FDIC premium credit, as previously mentioned.

Also impacting non-interest expense for the nine months ended September 30, 2019, was a gain on OREO of $93 thousand, offset by costs associated with carrying and selling the OREO of $180 thousand, primarily related to occupancy expense.

For the nine months ended September 30, 2019, the efficiency ratio was 49.13% compared to 52.03% for the nine months ended September 30, 2018, driven by our strong net interest income growth, non-interest income growth and moderate non-interest expense growth over the previous twelve months.

Performance Ratios

           
  For the Nine Months Ended
  September 30, 2019   September 30, 2018   Change
Return on average assets (annualized) 1.23%   1.23%   0 bps
Return on average equity (annualized) 11.24%   13.50%   (226) bps
           

For the nine months ended September 30, 2019, return on average assets was unchanged and return on average equity decreased by 226 basis points.  Return on average assets was flat despite higher earnings year to date in 2019, due to a significant increase in cash and due from banks, as previously mentioned.  The decline in return on average equity for the nine months ended September 30, 2019, when compared to the nine months ended September 30, 2018, was impacted by our capital raise late in the third quarter of 2018 and the significant improvement in the fair value of available-for-sale investment securities during the period.

Balance Sheet Review

                   
  For the Quarters Ended   Change Compared to
In thousands September 30,   June 30,   September 30,   June 30,   September 30,
2019 2019 2018 2019 2018
Assets $ 2,835,191   $ 2,626,721   $ 2,317,700   $ 208,470   $ 517,491
Loans 2,366,490   2,294,945   1,997,511   71,545   368,979
Deposits 2,337,430   2,127,831   1,950,385   209,599   387,045
Federal Home Loan Bank advances 148,442   158,526   74,594   (10,084)   73,848
Stockholders' equity 295,228   286,281   255,905   8,947   39,323
                   

Asset growth from September 30, 2018, to September 30, 2019, was $517.5 million, or 22.3%, and was driven primarily by loan growth and an increase in cash and due from banks.  Assets increased $208.5 million compared to the prior quarter, or 7.9%, due to an increase in cash and due from banks and loan growth.

Loans increased $369.0 million, or 18.5%, compared to September 30, 2018, and increased $71.5 million, or 3.1%, compared to June 30, 2019.  Loan increases over both periods continued to be primarily related to commercial real estate and commercial loan growth.

During the second quarter of 2019, we acquired OREO with a fair market value to the Bank of approximately $1.6 million at the time of acquisition, which was sold during the third quarter of 2019 at approximately its fair value.

Deposits increased $387.0 million, or 19.8%, and increased $209.6 million, or 9.9%, compared to September 30, 2018, and June 30, 2019, respectively.  The increase compared to the prior year period was primarily driven by increases in money market, certificate of deposit and non-interest bearing accounts. When compared to the second quarter of 2019, deposit increases were driven by increases in money market and non-interest-bearing accounts.  Non-interest-bearing deposits grew by 27.1% compared to September 30, 2018, and by 14.5% compared to June 30, 2019, reflecting our focus on growing non-interest-bearing deposits.

Federal Home Loan Bank ("FHLB") advances increased $73.8 million, or 99.0%, compared to the same period last year, and decreased $10.1 million, or 6.4%, compared to the linked quarter.  The increase compared to the prior year was due to a strategic decision to borrow from the FHLB during the first half of 2019, as rates were more favorable than running deposit specials.  During the third quarter of 2019 deposit rates normalized and FHLB borrowing rates were no longer comparatively more favorable.  We added $46.0 million and $106.0 million of new FHLB advances during the first and second quarters of 2019, respectively.  New advances were offset partially by repayments throughout the year of existing advances.

Stockholders’ equity increased $39.3 million, or 15.4%, compared to September 30, 2018.  The very strong equity growth compared to the third quarter of 2018 was achieved primarily by continuing to accomplish record earnings each quarter.  Stockholders’ equity increased by $8.9 million, or 3.1%, compared to June 30, 2019, driven by record earnings for the three months ended September 30, 2019.  The increases in equity were also impacted by activity in the investment portfolio resulting in net unrealized gains of $1.4 million as of the September 30, 2019, compared to net unrealized losses of $3.1 million as of September 30, 2018, and net unrealized gains of $1.3 million as of June 30, 2019.

Our capital ratios remain well above regulatory guidelines for well-capitalized banks. As of September 30, 2019, our total risk-based capital ratio and tier 1 leverage ratio were 13.30% and 9.79%, respectively, compared to 13.85% and 10.11%, respectively, as of September 30, 2018.  As of September 30, 2019, our tangible equity to total tangible assets ratio was 9.46% compared to 9.85% as of September 30, 2018.

As of September 30, 2019, our tangible book value per share was $22.14, up 16.0% compared to $19.09 as of September 30, 2018.  The increase in tangible book value per share was due to strong earnings per share during the trailing twelve month period.

Asset Quality Review

                   
  For the Quarters Ended   Change Compared To
Dollars in thousands September 30,   June 30,   September 30,   June 30,   September 30,
2019 2019 2018 2019 2018
Non-performing assets $ 903   $ 2,694   $ 1,809   $ (1,791 )   $ (906 )
Non-performing assets to total assets 0.03%   0.1%   0.08%   (7) bps   (5) bps
                   
Loans 30-89 days past due and still accruing interest $ 8,079   $ 7,730   $ 1,177   $ 349   $ 6,902
Loans 30-89 days past due and still accruing interest to total assets 0.28%   0.29%   0.05%   (1) bps   23 bps
Quarterly net charge-offs (recoveries) $ 503   $ (128)   $   $ 631   $ 503
                   

Asset quality continues to remain very strong.  As of September 30, 2019, non-performing assets as a percentage of total assets improved even further to 0.03% compared to 0.10% and 0.08% as of June 30, 2019, and September 30, 2018, respectively.  Non-performing assets decreased $1.8 million and $906 thousand compared to June 30, 2019, and September 30, 2018, respectively, primarily due to the previously mentioned sale of OREO.

Loans 30-89 days past due and still accruing interest increased $349 thousand compared to the linked quarter and $6.9 million compared to the same period last year. We had $503 thousand of net charge-offs during the third quarter of 2019, compared to no net charge-offs during the third quarter of 2018, and $128 thousand of net recoveries during the second quarter of 2019.

We are proactive in monitoring our loan portfolio for any indication of weakness and attempt to mitigate future risks across all lines of business.

Revere Bank is a Maryland state-chartered bank that commenced operations in November 2007.  Our Bank is headquartered in Rockville and has 11 branches located in the suburban Maryland counties of Anne Arundel, Baltimore, Frederick, Howard, Montgomery, and Prince George’s.  Revere Bank is a community-based, full-service commercial bank that emphasizes the banking needs of community-based businesses, professional entities, and individuals.  Further information on Revere Bank can be obtained by visiting our website at www.reverebank.com.

Contact:    
Kenneth Cook, Co-President & CEO   Andrew Flott, Co-President & CEO
(240) 264-5372   (240) 264-5340
kenneth.cook@reverebank.com   andrew.flott@reverebank.com

Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of the Securities and Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Bank operations and policies and regarding general economic conditions.  In some cases, forward-looking statements can be identified by use of words such as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,” “estimates,” “potential,” “continue,” “should,” and similar words or phrases.  These statements are based upon current and anticipated economic conditions, nationally and in the Bank’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast, and are subject to significant uncertainty.  Because of these uncertainties and the assumptions on which this discussion and the forward-looking statements are based, actual future operations and results may differ materially from those indicated herein.  Readers are cautioned against placing undue reliance on any such forward-looking statements.  The Bank’s past results are not necessarily indicative of future performance.

Non-GAAP Financial MeasuresStatements included in this press release include non-GAAP financial measures and should be read along with the Financial Highlights table, which provides a reconciliation of non-GAAP financial measures to GAAP financial measures.  This press release and the accompanying tables discuss financial measures, such as tangible common equity, tangible assets, return on tangible common equity, tangible book value per share and allowance for loan losses, adjusted, which are non-GAAP measures.  We believe that such non-GAAP measures are useful because they enhance the ability of investors and management to evaluate and compare the Bank’s operating results from period to period in a meaningful manner.  Non-GAAP measures should not be considered as an alternative to any measure of performance as promulgated under GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks.  Investors should consider the Bank’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Bank.  Non-GAAP measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the Bank’s results or financial condition as reported under GAAP.

Revere Bank and SubsidiaryConsolidated Balance Sheets(Dollars in thousands)

 

  September 30, 2019   June 30, 2019   December 31, 2018   September 30, 2018
  (Unaudited)   (Unaudited)   (Audited)   (Unaudited)
Assets              
Cash and due from banks $ 220,894     $ 82,281     $ 136,442     $ 104,740  
Federal funds sold             12  
Total cash and cash equivalents 220,894     82,281     136,442     104,752  
Securities available-for-sale, at fair value 182,696     180,630     187,558     167,911  
Equity securities, at cost 8,651     9,058     4,698     5,230  
Loans 2,366,490     2,294,945     2,084,806     1,997,511  
Less allowance for loan losses 21,952     21,052     18,712     17,521  
Loans, net 2,344,538     2,273,893     2,066,094     1,979,990  
Premises and equipment, net 3,887     3,872     4,283     4,169  
Right-of-use assets 16,166     17,064          
Accrued interest receivable 7,387     7,873     6,854     6,556  
Deferred tax assets 5,982     5,712     6,397     6,528  
Bank-owned life insurance 11,077     11,019     10,902     10,842  
Goodwill 26,815     26,815     26,815     26,815  
Core deposit intangibles 3,094     3,272     3,627     3,804  
Other real estate owned     1,591          
Other assets 4,004     3,641     1,541     1,103  
Total Assets $ 2,835,191     $ 2,626,721     $ 2,455,211     $ 2,317,700  
               
Liabilities and Stockholders' Equity              
Liabilities              
Deposits:              
Non-interest-bearing demand $ 448,076     $ 391,300     $ 368,063     $ 352,560  
Interest-bearing 1,889,354     1,736,531     1,720,904     1,597,825  
Total deposits 2,337,430     2,127,831     2,088,967     1,950,385  
Federal Home Loan Bank advances 148,442     158,526     63,456     74,594  
Subordinated debt, net 30,793     30,767     30,715     30,690  
Lease liabilities 16,841     17,709          
Accrued interest payable 1,408     1,700     1,320     791  
Other liabilities 5,049     3,907     5,862     5,335  
Total Liabilities 2,539,963     2,340,440     2,190,320     2,061,795  
               
Stockholders' Equity              
Common stock, par value $5 per share; 30,000,000 shares authorized; shares issued and outstanding of 11,983,404 for September 2019, 11,972,628 for June 2019, 11,817,361 for December 2018, and 11,803,007 for September 2018 59,917     59,863     59,087     59,015  
Surplus 147,350     146,861     145,076     144,538  
Retained earnings 86,540     78,293     62,878     55,473  
Accumulated other comprehensive income (loss) 1,421     1,264     (2,150 )   (3,121 )
Total Stockholders' Equity 295,228     286,281     264,891     255,905  
Total Liabilities and Stockholders' Equity $ 2,835,191     $ 2,626,721     $ 2,455,211     $ 2,317,700  
                               

 

 

Revere Bank and SubsidiaryConsolidated Income Statements(Dollars in thousands, except per share data)(Unaudited)

 

  Three Months Ended   Nine Months Ended
  September 30,   June 30,   September 30,   September 30,   September 30,
2019 2019 2018 2019 2018
Interest income                  
Loans, including fees $ 31,741     $ 29,971     $ 25,933     $ 89,780     $ 73,662  
Securities 1,093     1,159     929     3,430     2,646  
Federal funds sold and other 884     492     541     1,978     1,143  
Total interest income 33,718     31,622     27,403     95,188     77,451  
Interest expense                  
Deposits 8,366     7,573     5,625     23,350     14,378  
Borrowed funds 910     797     471     2,018     1,000  
Subordinated debt 467     461     463     1,388     1,389  
Total interest expense 9,743     8,831     6,559     26,756     16,767  
Net interest income 23,975     22,791     20,844     68,432     60,684  
Provision for loan losses 1,402     1,436     645     3,607     2,751  
Net interest income after provision for loan losses 22,573     21,355     20,199     64,825     57,933  
Non-interest income                  
Service charges on deposits 338     364     254     1,045     743  
Disposal of premises and equipment         (26 )       (26 )
Earnings on bank owned life insurance 59     58     61     175     178  
Other non-interest income 514     390     136     992     718  
Total non-interest income 911     812     425     2,212     1,613  
Non-interest expense                  
Salaries and employee benefits 8,129     7,468     7,265     22,953     21,172  
Occupancy and equipment 1,227     1,177     988     3,519     2,920  
Legal and professional fees 280     226     388     765     1,081  
Advertising 305     388     430     920     878  
Data processing 696     664     657     1,997     1,887  
FDIC premiums 3     332     330     648     1,029  
Merger and acquisitions costs 200             200      
Core deposit intangible amortization 178     177     178     533     533  
Other real estate owned expense 55     125         180      
(Gain) loss on other real estate owned 48     (141 )       (93 )    
Other 1,033     1,025     937     3,087     2,911  
Total non-interest expense 12,154     11,441     11,173     34,709     32,411  
Income before taxes 11,330     10,726     9,451     32,328     27,135  
Income tax expense 3,083     2,820     2,445     8,666     6,720  
Net Income $ 8,247     $ 7,906     $ 7,006     $ 23,662     $ 20,415  
                   
Basic earnings per common share $ 0.69     $ 0.66     $ 0.68     $ 1.99     $ 2.02  
Diluted earnings per common share $ 0.67     $ 0.65     $ 0.65     $ 1.93     $ 1.94  

 

 

Revere Bank and SubsidiaryAverage Balance Sheets, Interest and Rate(Dollars in thousands)(Unaudited)

 

  Three Months Ended September 30, 2019   Three Months Ended September 30, 2018
  Average    Interest   Average   Average   Interest   Average
Balance(1) Income- Yields/ Balance(1) Income- Yields/
  Expense Rates   Expense Rates
Assets                      
Loans, net (2) $ 2,333,261     $ 31,741     5.4 %   $ 1,969,777     $ 25,933     5.22 %
Securities (3) 177,881     1,093     2.44 %   166,094     929     2.22 %
Federal funds sold and other (4) 156,139     884     2.25 %   106,801     541     2.01 %
Total interest-earning assets 2,667,281     33,718     5.02 %   2,242,672     27,403     4.85 %
Less: Allowance for loan losses 21,628             17,180          
Other assets 89,261             70,342          
Total Assets $ 2,734,914             $ 2,295,834          
                       
Liabilities & Stockholders' Equity                      
Interest-bearing deposits $ 1,798,640     8,366     1.85 %   $ 1,589,091     5,625     1.4 %
Federal Home Loan Bank advances 148,886     910     2.42 %   100,253     471     1.86 %
Subordinated debt 30,777     467     6.02 %   30,673     463     5.99 %
Total interest-bearing liabilities 1,978,303     9,743     1.95 %   1,720,017     6,559     1.51 %
Non-interest-bearing demand deposits 440,060             355,627          
Other liabilities 24,314             6,359          
Total Liabilities 2,442,677             2,082,003          
Stockholders' equity 292,237             213,831          
Total Liabilities & Stockholders' Equity $ 2,734,914             $ 2,295,834          
                       
Net interest income and margin (5)(6)     $ 23,975     3.57 %       $ 20,844     3.69 %
                                           

 

 

  Three Months Ended June 30, 2019            
  AverageBalance(1)   InterestIncome-Expense   Average Yields/Rates            
Assets                      
Loans, net (2) $ 2,195,845     $ 29,971     5.47 %            
Securities (3) 185,301     1,159     2.51 %            
Federal funds sold and other (4) 77,877     492     2.53 %            
Total interest-earnings assets 2,459,023     31,622     5.16 %            
Less: Allowance for loan losses 19,902                      
Other assets 90,347                      
Total Assets $ 2,529,468                      
                       
Liabilities & Stockholders' Equity                      
Interest-bearing deposits $ 1,666,409     7,573     1.82 %            
Federal Home Loan Bank Advances 137,100     797     2.33 %            
Subordinated debt 30,751     461     6.01 %            
Other borrowed funds 2         2.70 %            
Total interest-bearing liabilities 1,834,262     8,831     1.93 %            
Non-interest-bearing demand deposits 387,780                      
Other liabilities 26,097                      
Total Liabilities 2,248,139                      
Stockholders' equity 281,329                      
Total Liabilities & Stockholders' Equity $ 2,529,468                      
                       
Net interest income and margin (5)(6)     $ 22,791     3.72 %            

(1) Average balances are computed on a daily basis.(2) Loans are presented net of average non-accrual loans for the period and unearned revenue.(3) Includes securities available-for-sale.(4) Includes federal funds sold, FHLB stock and interest-bearing deposits at other banks.(5) Total interest income less total interest expense.(6) Net interest margin is net interest income, expressed as a percentage of average interest-earning assets.

Revere Bank and SubsidiaryAverage Balance Sheets, Interest and Rate(Dollars in thousands)(Unaudited)

 

  Nine Months Ended September 30, 2019   Nine Months Ended September 30, 2018
  Average   Interest   Average   Average   Interest   Average
Balance(1) Income- Yields/  Balance(1) Income-  Yields/
  Expense Rates   Expense Rates
Assets                      
Loans, net (2) $ 2,212,892     $ 89,780     5.42 %   $ 1,909,302     $ 73,662     5.16 %
Securities (3) 183,853     3,430     2.49 %   164,275     2,646     2.15 %
Federal funds sold and other (4) 111,974     1,978     2.36 %   76,804     1,143     1.99 %
Total interest-earnings assets 2,508,719     95,188     5.07 %   2,150,381     77,451     4.82 %
Less: Allowance for loan losses 20,172             16,177          
Other assets 88,068             77,246          
Total Assets $ 2,576,615             $ 2,211,450          
                       
Liabilities & Stockholders' Equity                      
Interest-bearing deposits $ 1,723,077     23,350     1.81 %   $ 1,541,122     14,378     1.25 %
Federal Home Loan Bank Advances 117,735     2,018     2.29 %   84,380     1,000     1.58 %
Subordinated debt 30,751     1,388     6.03 %   30,647     1,389     6.06 %
Other borrowed funds 1         2.7 %   1         2.25 %
Total interest-bearing liabilities 1,871,564     26,756     1.91 %   1,656,150     16,767     1.35 %
Non-interest-bearing demand deposits 400,266             345,798          
Other liabilities 23,266             7,335          
Total Liabilities 2,295,096             2,009,283          
Stockholders' equity 281,519             202,167          
Total Liabilities & Stockholders' Equity $ 2,576,615             $ 2,211,450          
                       
Net interest income and margin (5)(6)     $ 68,432     3.65 %       $ 60,684     3.77 %
                                           

(1) Average balances are computed on a daily basis.(2) Loans are presented net of average non-accrual loans for the period and unearned revenue.(3) Includes securities available-for-sale.(4) Includes federal funds sold, FHLB stock and interest-bearing deposits at other banks.(5) Total interest income less total interest expense.(6) Net interest margin is net interest income, expressed as a percentage of average interest-earning assets.

Revere Bank and SubsidiaryFinancial Highlights(Dollars in thousands, except per share data)(Unaudited)

  At or For the Three Months Ended   At or For the Nine Months Ended
  September 30,   June 30,   September 30,   September 30,   September 30,
2019 2019 2018 2019 2018
Per Share Data and Shares Outstanding            
Earnings per share - basic $ 0.69     $ 0.66     $ 0.68     $ 1.99     $ 2.02  
Earnings per share - diluted $ 0.67     $ 0.65     $ 0.65     $ 1.93     $ 1.94  
Book value per share (1) $ 24.64     $ 23.91     $ 21.68     $ 24.64     $ 21.68  
Tangible book value per share (1) $ 22.14     $ 21.4     $ 19.09     $ 22.14     $ 19.09  
Weighted-average common shares - basic 11,979,830     11,925,915     10,329,900     11,918,528     10,098,968  
Weighted-average common shares - diluted 12,251,743     12,222,396     10,705,221     12,230,398     10,530,008  
Common shares outstanding at end of period 11,983,404     11,972,628     11,803,007     11,983,404     11,803,007  
Performance Ratios                  
Return on average assets (annualized) 1.2 %   1.25 %   1.21 %   1.23 %   1.23 %
Return on average equity (annualized) 11.2 %   11.27 %   13 %   11.24 %   13.5 %
Yield on interest-earning assets (annualized) 5.02 %   5.16 %   4.85 %   5.07 %   4.82 %
Cost of interest-bearing liabilities (annualized) 1.95 %   1.93 %   1.51 %   1.91 %   1.35 %
Net interest margin 3.57 %   3.72 %   3.69 %   3.65 %   3.77 %
Efficiency ratio (2) 48.84 %   48.47 %   52.53 %   49.13 %   52.03 %
Asset Quality                  
Loans 30-89 days past due and accruing interest $ 8,079     $ 7,730     $ 1,177     $ 8,079     $ 1,177  
Loans 30-89 days past due and accruing interest to total assets 0.28 %   0.29 %   0.05 %   0.28 %   0.05 %
Non-accrual loans $ 903     $ 1,103     $ 1,809     $ 903     $ 1,809  
Other real estate owned $     $ 1,591     $     $     $  
Non-performing assets (3) $ 903     $ 2,694     $ 1,809     $ 903     $ 1,809  
Non-performing assets to total assets (3) 0.03 %   0.1 %   0.08 %   0.03 %   0.08 %
Allowance for loan losses to total loans (4) 0.93 %   0.92 %   0.88 %   0.93 %   0.88 %
Allowance for loan losses, adjusted to total loans (4) 1.08 %   1.08 %   1.12 %   1.08 %   1.12 %
Allowance for loan losses to non-performing loans 2,431.00 %   1,908.60 %   968.5 %   2,431.00 %   968.5 %
Net loan charge-offs (recoveries) $ 503     $ (128 )   $     $ 367     $ 57  
Regulatory Capital Ratios                  
Total risk-based capital ratio 13.3 %   13.21 %   13.85 %   13.3 %   13.85 %
Tier 1 risk-based capital ratio 11.09 %   10.99 %   11.45 %   11.09 %   11.45 %
Tier 1 leverage ratio 9.79 %   10.23 %   10.11 %   9.79 %   10.11 %
Common equity tier 1 ratio 11.09 %   10.99 %   11.45 %   11.09 %   11.45 %
Common equity to total assets ratio (1) 10.41 %   10.9 %   11.04 %   10.41 %   11.04 %
Tangible common equity to total tangible assets ratio (1) 9.46 %   9.87 %   9.85 %   9.46 %   9.85 %
Other Information                  
Number of full time equivalent employees 248     243     229     248     229  
# Full service branch offices 11     11     11     11     11  

(1) Tangible common equity, tangible assets, tangible common equity to tangible assets and tangible book value per common share are non-GAAP financial measures.  Tangible common equity is computed as total stockholders’ equity excluding intangible assets and goodwill.  Tangible assets is computed as total assets excluding intangible assets and goodwill.  Tangible common equity to tangible assets is the ratio of tangible common equity to tangible assets.  Tangible book value per common share is computed by dividing the total tangible common equity by the common shares issued and outstanding.  The following table provides a reconciliation of total stockholders’ to tangible common equity and a reconciliation of total assets to tangible assets:

  At or For the Three Months Ended        
  September 30, 2019   June 30,  2019   September 30, 2018        
                   
Total stockholders' equity (GAAP) $ 295,228     $ 286,281     $ 255,905          
Less:                  
Goodwill 26,815     26,815     26,815          
Core deposits intangible 3,094     3,272     3,804          
Tangible stockholders' equity (non-GAAP) $ 265,319     $ 256,194     $ 225,286          
                   
Total assets (GAAP) $ 2,835,191     $ 2,626,721     $ 2,317,700          
Less:                  
Goodwill 26,815     26,815     26,815          
Core deposits intangible 3,094     3,272     3,804          
Total tangible assets (non-GAAP) $ 2,805,282     $ 2,596,634     $ 2,287,081          
                   
Common equity to total assets ratio (GAAP) 10.41 %   10.90 %   11.04 %        
                   
Tangible common equity to total tangible assets ratio (non-GAAP) 9.46 %   9.87 %   9.85 %        
                   
Common shares outstanding 11,983,404     11,972,628     11,803,007          
                   
Book value per share (GAAP) $ 24.64     $ 23.91     $ 21.68          
                   
Tangible book value per share (non-GAAP) $ 22.14     $ 21.40     $ 19.09          

(2) Efficiency ratio is non-interest expense divided by the sum of net interest income and non-interest income.(3) Non-performing assets consist of non-accrual loans, loans 90 days or more past due and still accruing interest, and other real estate owned.(4) Allowance for loan losses, adjusted and the allowance for loan losses, adjusted to total loans are non-GAAP financial measures.  Allowance for loan losses, adjusted is calculated by adding credit marks established for acquired loans to the allowance for loan losses.  The allowance for loan losses, adjusted to total loans is calculated by dividing the allowance for loan losses, adjusted by total loans for the period.  The following table provides a reconciliation of allowance for loan losses to allowance for loan losses, adjusted:

  At or For the Three Months Ended        
  September 30, 2019   June 30,  2019   September 30, 2018        
                   
Allowance for loan losses $ 21,952     $ 21,052     $ 17,521          
Plus:                  
Purchase accounting discounts 3,553     3,734     4,765          
Allowance for loan losses, adjusted (non-GAAP) $ 25,505     $ 24,786     $ 22,286          
                   
Total loans $ 2,366,490     $ 2,294,945     $ 1,997,511          
                   
Allowance for loan losses to total loans (GAAP) 0.93 %   0.92 %   0.88 %        
                   
Allowance for loan losses, adjusted  to total loans (non-GAAP) 1.08 %   1.08 %   1.12 %        

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