SBBX SB One Bancorp

SB One Bancorp (the “Company”) (Nasdaq: SBBX), the holding company for SB One Bank (the “Bank”), today reported net income of $5.1 million, or $0.55 per basic and diluted share, for the quarter ended September 30, 2019, an increase of 57.3%, as compared to net income of $3.3 million, or $0.42 per basic share and $0.41 per diluted share, for the quarter ended September 30, 2018. The increase in net income for the quarter ended September 30, 2019 was driven by a $3.7 million, or 33.6%, increase in net interest income attributable to loan and deposit growth and the merger with Enterprise Bank NJ (“Enterprise”), and a $585 thousand increase in non-interest income as compared to the same period last year. The increase in net income was partially offset by a $1.2 million, or 13.7%, increase in non-interest expense. The non-interest expense increase was mainly due to a $1.2 million, or 23.7%, increase in compensation mainly from the Enterprise merger, net of realized cost savings, and to support the continued growth of the Company offset by a decrease in merger related expenses of $605 thousand.

The Company reported net income of $17.2 million, or $1.84 per basic and $1.83 diluted share, for the nine months ended September 30, 2019, an increase of 127.4%, as compared to $7.6 million, or $0.97 per basic share and $0.96 per diluted share, for the same period last year. For the nine months ended September 30, 2019, net income growth was driven by an increase in net interest income of $11.4 million, or 34.7%, resulting from growth of $18.9 million in loan interest income which was attributable to organic loan growth and the merger with Enterprise. In addition, non-interest income increased $2.9 million, or 34.8%, from a $1.2 million increase in insurance commissions and fees as compared to the same period last year. The increase in net income was partially offset by an increase in non-interest expense of $754 thousand, or 2.5%.

Anthony Labozzetta, President and CEO of SB One Bancorp and SB One Bank stated, “We continue to have strong growth in all of our business lines.  Despite the volatile interest rate environment, our commercial lending team grew loans at an annualized rate of 10.2%.  Our Insurance Company continues to out-perform and grew commission income 19.4% over the same period last year.  Our Retail deposits grew at an annualized rate of 14.5%.  Furthermore, the activities and pipelines in each of our business lines remain robust.”  Mr. Labozzetta added, “While our margin compressed this quarter, we are seeing a reduction in our costs of deposits and borrowings, which was evident in the month of September and we expect that positive trend to continue into the fourth quarter”. 

Mr. Labozzetta also stated, “We continue to experience improving trends in asset quality with our ratio of non-performing assets to total assets decreasing 26 basis points to 0.87%”.

Declaration of Quarterly DividendOn October 24, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.085 per share, which is payable on November 20, 2019 to common shareholders of record as of the close of business on November 6, 2019.

Financial PerformanceNet Income. For the quarter ended September 30, 2019, the Company reported net income of $5.1 million, or $0.55 per basic and diluted share, an increase of 57.3%, as compared to net income of $3.3 million, or $0.42 per basic and $0.41 diluted share, for the quarter ended September 30, 2018.

The increase in net income for the quarter ended September 30, 2019 was driven by a $3.7 million, or 33.6%, increase in net interest income resulting from loan and deposit growth, the Enterprise merger, and a $585 thousand increase in non-interest income mainly due to a $297 thousand increase in insurance commissions and fees. Non-interest expenses increased $1.2 million to $10.2 million for the third quarter 2019 as compared to $9.0 million for the third quarter 2018. The increase in non-interest expenses was primarily attributable to an increase in salaries and employee benefits of $1.2 million resulting from the merger with Enterprise and the continued growth of the Company. In addition, data processing increased $290 thousand and write-downs related to foreclosed real estate increased $152 thousand. The increase in non-interest expenses was partially offset by a decrease in merger related expenses of $605 thousand as compared to the same quarter of 2018.

For the nine months ended September 30, 2019, the Company reported net income of $17.2 million, or $1.84 per basic share and $1.83 per diluted share, an increase of 127.4%, as compared to net income of $7.6 million, or $0.97 per basic share and $0.96 diluted share, for the same period last year. 

Net Interest Income.  Net interest income on a fully tax equivalent basis increased $3.5 million, or 31.5%, to $14.8 million for the third quarter of 2019, as compared to $11.2 million for the same period in 2018.  The increase in net interest income was largely due to a $440.4 million, or 32.5%, increase in average interest earning assets, principally loans receivable, which increased $395.8 million, or 34.3%, led by organic growth and the December 2018 closing of the Enterprise merger.  The net interest margin decreased 3 basis points to 3.26% for the third quarter of 2019, as compared to the same period in 2018, as a result of an increase in cost of funds of 44 basis points mainly due to a surge in rates on deposits. The increase in the Company’s cost of funds was partially offset by an increase in yield on earning assets of 34 basis points driven by an increase in yields on loans receivable of 42 basis points.  

Net interest income on a fully tax equivalent basis increased $11.2 million, or 33.5%, to $44.6 million for the first nine months of 2019 as compared to $33.4 million for the same period in 2018.  The increase in net interest income was largely due to a $446.1 million, or 34.2%, increase in average interest earning assets, principally loans receivable, which increased $412.2 million, or 37.1%, driven by organic growth and the Enterprise merger.

Provision for Loan Losses. Provision for loan losses increased $315 thousand, or 98.1%, to $636 thousand for the third quarter of 2019, as compared to $321 thousand for the same period in 2018.

Provision for loan losses increased $756 thousand, or 61.6%, to $2.0 million for the first nine months of 2019, as compared to $1.2 million for the same period in 2018.

Non-interest Income. Non-interest income increased $585 thousand, or 23.2%, to $3.1 million for the third quarter of 2019, as compared to the same period in 2018.  The growth was largely due to an increase in insurance commissions and fees relating to SB One Insurance Agency of $297 thousand, or 19.4%, for the third quarter of 2019, as compared to the same period in 2018. 

Non-interest income increased $2.9 million, or 34.8%, to $11.1 million for the first nine months of 2019 as compared to the same period last year.  The increase was principally due to $1.2 million increase in insurance commissions and fees relating to SB One Insurance Agency, and a $1.5 million increase in gains on sale of securities. The aforementioned increases were partially offset by a $292 thousand loss on the disposal of fixed assets relating to closing of the Company’s corporate center in Rockaway, NJ, and the sale of the Andover branch.

Non-interest Expense. The Company’s non-interest expenses increased $1.2 million, or 13.7%, to $10.2 million for the third quarter of 2019, as compared to the same period in 2018. The increase in non-interest expenses occurred largely in salaries and employee benefits of $1.2 million, data processing of $290 thousand and expenses and write-downs related to foreclosed real estate of $152 thousand. The increase in non-interest expenses for the third quarter of 2019, as compared to the same period in 2018, was the result of the Company’s continued growth, inclusive of the Enterprise merger net of cost savings. The increase in expenses and write-downs related to foreclosed real estate was driven by a one-time charge for write-downs of $149 thousand on three properties. The aforementioned increases were partially offset by decreases in professional fees and FDIC assessment costs of $111 thousand and $45 thousand, respectively.

The Company’s non-interest expenses increased $754 thousand, or 2.5%, to $30.9 million for the first nine months of 2019 as compared to the same period last year. The increase in non-interest expenses was primarily due to increases in salaries and employee benefits of $3.2 million, occupancy of $518 thousand and data processing of $499 thousand.  The aforementioned increase was partially offset by a decrease in merger related expenses of $4.3 million.

Income Tax Expense. The Company’s income tax expenses increased $863 thousand to $1.8 million for the third quarter of 2019, as compared to the same period last year. The Company’s effective tax rate for the third quarter of 2019 was 26.1%, as compared to 22.6% for the same period in 2018.

The Company’s income tax expenses increased $3.1 million to $5.2 million for the first nine months of 2019, as compared to the same period last year as a result of increased pre-tax income. The Company’s effective tax rate for the first nine months of 2019 was 23.1%, as compared to 21.5% for the nine months ended September 30, 2018.

Financial ConditionAt September 30, 2019, the Company’s total assets were $1.9 billion, an increase of $138.6 million, or 7.7%, as compared to total assets of $1.8 billion at December 31, 2018.  The increase was mainly attributable to an increase in loans receivable of $88.8 million, or 6.0%, to $1.6 billion.

The Company’s total deposits increased $172.9 million, or 12.8%, to $1.5 billion at September 30, 2019, from $1.4 billion at December 31, 2018. The growth in deposits was mostly due to an increase in interest bearing deposits of $157.0 million, or 14.3%, and an increase in non-interest bearing deposits of $15.9 million, or 6.1%, at September 30, 2019, as compared to December 31, 2018.

At September 30, 2019, the Company’s total stockholders’ equity was $196.1 million, an increase of $10.6 million when compared to December 31, 2018.  At September 30, 2019, the leverage, Tier I risk-based capital, total risk-based capital and common equity Tier I capital ratios for the Bank were 10.22%, 12.00%, 12.61% and 12.00%, respectively, all in excess of the ratios required to be deemed “well-capitalized.”

Asset and Credit QualityThe ratio of non-performing assets (“NPAs”), which include non-accrual loans, loans 90 days past due and still accruing, troubled debt restructured loans currently performing in accordance with renegotiated terms and foreclosed real estate, to total assets decreased to 0.87% at September 30, 2019 as compared to 1.43% at December 31, 2018.  The decrease in NPAs is mainly attributable to the payoff of two non-accrual commercial real estate loans totaling approximately $8.9 million. NPAs exclude $3.0 million of Purchased Credit-Impaired (“PCI”) loans acquired through the merger with Community Bank of Bergen County (“Community Bank”). NPAs decreased $8.9 million to $16.9 million at September 30, 2019, as compared to $25.8 million at December 31, 2018.  Non-accrual loans, excluding $3.0 million of PCI loans, decreased $8.7 million, or 41.9%, to $12.0 million at September 30, 2019, as compared to $20.7 million at December 31, 2018.  Loans past due 30 to 89 days totaled $5.5 million at September 30, 2019, representing an increase of $1.7 million, or 45.8%, as compared to $3.8 million at December 31, 2018.

The Company continues to actively market its foreclosed real estate properties, the value of which decreased $549 thousand to $3.6 million at September 30, 2019 as compared to $4.1 million at December 31, 2018.  The decrease in foreclosed real estate properties was largely attributable to the sale of six properties totaling $1.5 million which was partially offset by two new foreclosed properties valued at $1.1 million. At September 30, 2019, the Company’s foreclosed real estate properties had an average carrying value of approximately $400 thousand per property.

The Company’s allowance for loan losses increased $975 thousand, or 11.1%, to $9.8 million, at September 30, 2019 as compared to $8.8 million at December 31, 2018. The Company’s outstanding credit mark recorded on the legacy Community Bank and Enterprise portfolios of $433.8 million totaled $6.8 million at September 30, 2019. The Company’s combined coverage of allowance for loan loss and credit mark on the legacy Community Bank and Enterprise portfolios totaled $16.8 million, or 1.05% of the overall loan portfolio, at September 30, 2019. The Company recorded $2.0 million in provision for loan losses for the nine months ended September 30, 2019 as compared to $1.2 million for the nine months ended September 30, 2018.  Additionally, the Company recorded net charge-offs of $1.0 million for the nine months ended September 30, 2019, as compared to $33 thousand in net recoveries for the nine months ended September 30, 2018. The allowance for loan losses as a percentage of non-accrual loans increased to 81.1% at September 30, 2019 from 43.5% at December 31, 2018.

About SB One 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 statements that may be identified by the use of words such as "expect," "estimate," “assume,” "believe," "anticipate," "will," "forecast," "plan," "project" or similar words. Such statements are based on SB One Bancorp’s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, (1) difficulties and delays in integrating the business or fully realizing cost savings and other benefits; (2) operating costs, customer loss and business disruption following the mergers with Community Bank and Enterprise, including adverse effects on relationships with employees, may be greater than expected; (3) changes to interest rates; (4) the ability to control costs and expenses; (5) general economic conditions; (6) the success of SB One Bancorp’s efforts to diversify its revenue base by developing additional sources of non-interest income while continuing to manage its existing fee-based business; and (7) risks associated with the quality of SB One Bancorp’s assets and the ability of its borrowers to comply with repayment. Further information about these and other relevant risks and uncertainties may be found in SB One Bancorp’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in subsequent filings with the Securities and Exchange Commission. SB One Bancorp undertakes no obligation to publicly release the results of any revisions to those forward looking statements that may be made to reflect events or circumstances after this date or to reflect the occurrence of unanticipated events.

SB ONE BANCORPAnthony Labozzetta, President/CEOAdriano Duarte, CFO (p) 844-256-7328

SB ONE BANCORP
SUMMARY FINANCIAL HIGHLIGHTS
(In Thousands, Except Percentages and Per Share Data)
(Unaudited)
																			9/30/2019 VS.
		9/30/19				6/30/19				12/31/18				9/30/18					6/30/19					12/31/18					9/30/18
BALANCE SHEET HIGHLIGHTS - Period End Balances
Total securities		$	211,467			$	198,191			$	186,217			$	177,547					6.7		%			13.6		%			19.1		%
Total loans			1,563,610				1,530,668				1,474,775				1,171,738					2.2		%			6.0		%			33.4		%
Allowance for loan losses			(9,750	)			(9,627	)			(8,775	)			(8,594	)				1.3		%			11.1		%			13.5		%
Total assets			1,934,259				1,866,344				1,795,703				1,459,642					3.6		%			7.7		%			32.5		%
Total deposits			1,526,856				1,476,488				1,353,939				1,114,646					3.4		%			12.8		%			37.0		%
Total borrowings and junior subordinated debt			191,715				180,535				247,765				187,756					6.2		%			(22.6	)	%			2.1		%
Total shareholders' equity			196,079				192,416				185,444				151,222					1.9		%			5.7		%			29.7		%
FINANCIAL DATA - QUARTER ENDED:
Net interest income (tax equivalent) (a)		$	14,753			$	15,161			$	11,575			$	11,217					(2.7	)	%			27.5		%			31.5		%
Provision for loan losses			636				776				210				321					(18.0	)	%			202.9		%			98.1		%
Total non-interest income			3,103				4,392				2,493				2,518					(29.3	)	%			24.5		%			23.2		%
Total non-interest expense			10,187				10,526				10,273				8,963					(3.2	)	%			(0.8	)	%			13.7		%
Income before provision for income taxes (tax equivalent)			7,033				8,251				3,585				4,451					(14.8	)	%			96.2		%			58.0		%
Provision for income taxes			1,820				1,836				991				957					(0.9	)	%			83.7		%			90.2		%
Taxable equivalent adjustment (a)			68				171				807				224					(60.2	)	%			(91.6	)	%			(69.6	)	%
Net income		$	5,145			$	6,244			$	1,787			$	3,270					(17.6	)	%			187.9		%			57.3		%
Net income per common share - Basic		$	0.55			$	0.67			$	0.29			$	0.42					(17.9	)	%			89.7		%			32.2		%
Net income per common share - Diluted		$	0.55			$	0.66			$	0.29			$	0.41					(16.7	)	%			89.7		%			33.1		%
Return on average assets			1.08		%		1.35		%		0.53		%		0.91		%			(20.0	)	%			102.4		%			19.0		%
Return on average equity			10.56		%		12.98		%		4.97		%		8.67		%			(18.6	)	%			112.6		%			21.9		%
Efficiency ratio (b)			57.27		%		54.31		%		77.47		%		66.34		%			5.5		%			(26.1	)	%			(13.7	)	%
Net interest margin (tax equivalent)			3.26		%		3.49		%		3.55		%		3.29		%			(6.6	)	%			(8.2	)	%			(0.9	)	%
Avg. interest earning assets/Avg. interest bearing liabilities			1.26				1.27				1.27				1.28					(0.7	)	%			(1.2	)	%			(1.8	)	%
FINANCIAL DATA - YEAR TO DATE:
Net interest income (tax equivalent) (a)		$	44,580											$	33,393															33.5		%
Provision for loan losses			1,983												1,227															61.6		%
Total non-interest income			11,128												8,256															34.8		%
Total non-interest expense			30,891												30,137															2.5		%
Income before provision for income taxes (tax equivalent)			22,834												10,285															122.0		%
Provision for income taxes			5,156												2,068															149.3		%
Taxable equivalent adjustment (a)			466												647															(28.0	)	%
Net income		$	17,212											$	7,570															127.4		%
Net income per common share - Basic		$	1.84											$	0.97															89.7		%
Net income per common share - Diluted		$	1.83											$	0.96															90.6		%
Return on average assets			1.23		%										0.72		%													70.4		%
Return on average equity			11.97		%										6.84		%													74.9		%
Efficiency ratio (b)			55.92		%										73.50		%													(23.9	)	%
Net interest margin (tax equivalent)			3.40		%										3.42		%													(0.6	)	%
Avg. interest earning assets/Avg. interest bearing liabilities			1.26												1.28															(1.4	)	%
SHARE INFORMATION:
Book value per common share		$	20.81			$	20.35			$	19.45			$	19.00					2.3		%			7.0		%			9.5		%
Tangible book value per common share			17.71				17.25				16.36				15.73					2.7		%			8.3		%			12.6		%
Outstanding shares- period ending			9,423,931				9,456,778				9,532,943				7,959,489					(0.3	)	%			(1.1	)	%			18.4		%
Average diluted shares outstanding (year to date)			9,410,311				9,406,175				7,921,269				7,868,280					0.0		%			18.8		%			19.6		%
CAPITAL RATIOS:
Total equity to total assets			10.14		%		10.31		%		10.32		%		10.36		%			(1.7	)	%			(1.7	)	%			(2.2	)	%
Leverage ratio (c)			10.22		%		10.32		%		12.06		%		10.51		%			(1.0	)	%			(15.3	)	%			(2.8	)	%
Tier 1 risk-based capital ratio (c)			12.00		%		12.10		%		12.34		%		12.74		%			(0.8	)	%			(2.8	)	%			(5.8	)	%
Total risk-based capital ratio (c)			12.61		%		12.72		%		12.94		%		13.48		%			(0.9	)	%			(2.6	)	%			(6.5	)	%
Common equity Tier 1 capital ratio (c)			12.00		%		12.10		%		12.34		%		12.74		%			(0.8	)	%			(2.8	)	%			(5.8	)	%
ASSET QUALITY:
Non-accrual loans (e)		$	12,019			$	16,243			$	20,704			$	19,758					(26.0	)	%			(41.9	)	%			(39.2	)	%
Loans 90 days past due and still accruing			1				-				-				-					-		%			-		%			-		%
Troubled debt restructured loans ("TDRs") (d)			1,238				1,246				906				1,986					(0.6	)	%			36.6		%			(37.7	)	%
Foreclosed real estate			3,600				3,576				4,149				2,657					0.7		%			(13.2	)	%			35.5		%
Non-performing assets ("NPAs")		$	16,858			$	21,065			$	25,759			$	24,401					(20.0	)	%			(34.6	)	%			(30.9	)	%
Foreclosed real estate, criticized and classified assets (e)		$	24,233			$	29,039			$	24,006			$	22,945					(16.6	)	%			0.9		%			5.6		%
Loans past due 30 to 89 days		$	5,522			$	8,904			$	3,787			$	3,339					(38.0	)	%			45.8		%			65.4		%
Charge-offs (Recoveries) , net (quarterly)		$	440			$	339			$	30			$	(9	)				29.8		%			1,366.7		%			(4,988.9	)	%
Charge-offs (Recoveries) , net as a % of average loans (annualized)			0.11		%		0.09		%		0.01		%		(0.00	)	%			27.1		%			1,061.1		%			(3,739.4	)	%
Non-accrual loans to total loans			0.77		%		1.06		%		1.40		%		1.69		%			(27.6	)	%			(45.1	)	%			(54.4	)	%
NPAs to total assets			0.87		%		1.13		%		1.43		%		1.67		%			(22.8	)	%			(39.1	)	%			(47.9	)	%
NPAs excluding TDR loans (d) to total assets			0.81		%		1.06		%		1.35		%		1.54		%			(24.0	)	%			(40.3	)	%			(47.4	)	%
Non-accrual loans to total assets			0.62		%		0.87		%		1.12		%		1.35		%			(28.6	)	%			(44.6	)	%			(54.1	)	%
Allowance for loan losses as a % of non-accrual loans			81.12		%		59.27		%		43.51		%		43.50		%			36.9		%			86.5		%			86.5		%
Allowance for loan losses to total loans			0.62		%		0.63		%		0.60		%		0.73		%			(0.9	)	%			4.8		%			(15.0	)	%
(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 $3.0 million

SB ONE BANCORP
CONSOLIDATED BALANCE SHEETS
(Dollars In Thousands)
ASSETS	September 30, 2019				December 31, 2018
Cash and due from banks	$	11,561			$	11,768
Interest-bearing deposits with other banks		36,380				14,910
Cash and cash equivalents		47,941				26,678
Interest bearing time deposits with other banks		200				200
Securities available for sale, at fair value		207,136				182,139
Securities held to maturity		4,331				4,078
Other Bank Stock, at cost		9,382				11,764
Loans receivable, net of unearned income		1,563,610				1,474,775
Less: allowance for loan losses		9,750				8,775
Net loans receivable		1,553,860				1,466,000
Foreclosed real estate		3,600				4,149
Premises and equipment, net		19,663				19,215
Right-of-use assets, net		4,734				-
Accrued interest receivable		6,253				6,546
Goodwill and intangibles		29,141				29,446
Bank-owned life insurance		36,475				35,778
Other assets		11,543				9,710
Total Assets	$	1,934,259			$	1,795,703
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	275,730			$	259,807
Interest bearing		1,251,126				1,094,132
Total Deposits		1,526,856				1,353,939
Borrowings		163,849				219,906
Lease liability		4,870				-
Accrued interest payable and other liabilities		14,739				8,555
Subordinated debentures		27,866				27,859
Total Liabilities		1,738,180				1,610,259
Total Stockholders' Equity		196,079				185,444
Total Liabilities and Stockholders' Equity	$	1,934,259			$	1,795,703

SB ONE BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Dollars In Thousands Except Per Share Data)
(Unaudited)
	Three Months Ended September 30,						Nine Months Ended
	2019			2018			9/30/19				9/30/18
INTEREST INCOME
Loans receivable, including fees	$	19,135		$	13,009		$	56,354			$	37,471
Securities:
Taxable		1,490			936			3,942				2,476
Tax-exempt		135			442			920				1,272
Federal funds sold		-			-			-				-
Interest bearing deposits		97			23			211				69
Total Interest Income		20,857			14,410			61,427				41,288
INTEREST EXPENSE
Deposits		4,755			2,156			13,078				5,273
Borrowings		1,099			943			3,286				2,323
Junior subordinated debentures		318			318			949				946
Total Interest Expense		6,172			3,417			17,313				8,542
Net Interest Income		14,685			10,993			44,114				32,746
PROVISION FOR LOAN LOSSES		636			321			1,983				1,227
Net Interest Income after Provision for Loan Losses		14,049			10,672			42,131				31,519
NON-INTEREST INCOME
Service fees on deposit accounts		351			320			1,048				959
ATM and debit card fees		289			254			798				717
Bank owned life insurance		235			190			697				563
Insurance commissions and fees		1,824			1,527			6,482				5,261
Investment brokerage fees		49			29			126				92
Gain (loss) gain on securities transactions		-			-			1,524				36
(Loss) gain on disposal of fixed assets		89			-			(292	)			9
Other		266			198			745				619
Total Non-Interest Income		3,103			2,518			11,128				8,256
NON-INTEREST EXPENSE
Salaries and employee benefits		6,224			5,033			18,688				15,502
Occupancy, net		840			757			2,604				2,086
Data processing		1,000			710			2,939				2,440
Furniture and equipment		343			286			975				893
Advertising and promotion		139			147			394				488
Professional fees		272			383			1,106				1,002
Director fees		146			121			471				410
FDIC assessment		138			183			585				393
Insurance		31			35			94				182
Stationary and supplies		73			59			247				205
Merger-related expenses		-			605			-				4,344
Loan collection costs		96			53			233				203
Expenses and write-downs related to foreclosed real estate		172			20			333				228
Amortization of intangible assets		102			61			305				182
Other		611			510			1,917				1,579
Total Non-Interest Expense		10,187			8,963			30,891				30,137
Income before Income Taxes		6,965			4,227			22,368				9,638
INCOME TAX EXPENSE		1,820			957			5,156				2,068
Net Income	$	5,145		$	3,270		$	17,212			$	7,570
EARNINGS PER SHARE
Basic	$	0.55		$	0.42		$	1.84			$	0.97
Diluted	$	0.55		$	0.41		$	1.83			$	0.96

SB ONE BANCORP
COMPARATIVE AVERAGE BALANCES AND AVERAGE INTEREST RATES
(Dollars In Thousands)
(Unaudited)
		Three Months Ended September 30,
		2019											2018
		Average								Average			Average								Average
		Balance				Interest				Rate (2)			Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	17,712			$	203			4.55	%		$	63,752			$	666			4.14	%
Taxable			195,463				1,490			3.02	%			126,961				936			2.92	%
Total securities			213,175				1,693			3.15	%			190,713				1,602			3.33	%
Total loans receivable (1) (4)			1,548,515				19,135			4.90	%			1,152,741				13,009			4.48	%
Other interest-earning assets			32,383				97			1.19	%			10,219				23			0.89	%
Total earning assets			1,794,073				20,925			4.63	%			1,353,673				14,634			4.29	%
Non-interest earning assets			122,954											97,181
Allowance for loan losses			(9,898	)										(8,388	)
Total Assets		$	1,907,129										$	1,442,466
Sources of Funds:
Interest bearing deposits:
NOW		$	242,258			$	498			0.82	%		$	257,671			$	365			0.56	%
Money market			234,127				1,080			1.83	%			125,430				538			1.70	%
Savings			221,892				369			0.66	%			213,152				266			0.50	%
Time			531,178				2,808			2.10	%			262,244				987			1.49	%
Total interest bearing deposits			1,229,455				4,755			1.53	%			858,497				2,156			1.00	%
Borrowed funds			168,998				1,099			2.58	%			170,168				943			2.20	%
Subordinated debentures			27,865				318			4.53	%			27,854				318			4.53	%
Total interest bearing liabilities			1,426,318				6,172			1.72	%			1,056,519				3,417			1.28	%
Non-interest bearing liabilities:
Demand deposits			268,864											228,993
Other liabilities			17,141											6,081
Total non-interest bearing liabilities			286,005											235,074
Stockholders' equity			194,806											150,873
Total Liabilities and Stockholders' Equity		$	1,907,129										$	1,442,466
Net Interest Income and Margin (5)							14,753			3.26	%							11,217			3.29	%
Tax-equivalent basis adjustment							(68	)										(224	)
Net Interest Income						$	14,685										$	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 30.09% in 2019 and 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)
		Three Months Ended September 30, 2019											Three Months Ended June 30, 2019
		Average								Average			Average								Average
		Balance				Interest				Rate (2)			Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	17,712			$	203			4.55	%		$	46,888			$	508			4.35	%
Taxable			195,463				1,490			3.02	%			158,258				1,277			3.24	%
Total securities			213,175				1,693			3.15	%			205,146				1,785			3.49	%
Total loans receivable (1) (4)			1,548,515				19,135			4.90	%			1,516,945				19,059			5.04	%
Other interest-earning assets			32,383				97			1.19	%			20,386				65			1.28	%
Total earning assets			1,794,073				20,925			4.63	%			1,742,477				20,909			4.81	%
Non-interest earning assets			122,954											118,391
Allowance for loan losses			(9,898	)										(9,332	)
Total Assets		$	1,907,129										$	1,851,536
Sources of Funds:
Interest bearing deposits:
NOW		$	242,258			$	498			0.82	%		$	249,647			$	453			0.73	%
Money market			234,127				1,080			1.83	%			230,766				1,165			2.02	%
Savings			221,892				369			0.66	%			226,511				372			0.66	%
Time			531,178				2,808			2.10	%			494,823				2,469			2.00	%
Total interest bearing deposits			1,229,455				4,755			1.53	%			1,201,747				4,459			1.49	%
Borrowed funds			168,998				1,099			2.58	%			145,937				973			2.67	%
Subordinated debentures			27,865				318			4.53	%			27,863				316			4.55	%
Total interest bearing liabilities			1,426,318				6,172			1.72	%			1,375,547				5,748			1.68	%
Non-interest bearing liabilities:
Demand deposits			268,864											272,667
Other liabilities			17,141											10,934
Total non-interest bearing liabilities			286,005											283,601
Stockholders' equity			194,806											192,388
Total Liabilities and Stockholders' Equity		$	1,907,129										$	1,851,536
Net Interest Income and Margin (5)							14,753			3.26	%							15,161			3.49	%
Tax-equivalent basis adjustment							(68	)										(171	)
Net Interest Income						$	14,685										$	14,990
(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 2019 and 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)
		Nine Months Ended September 30,
		2019											2018
		Average								Average			Average								Average
		Balance				Interest				Rate (2)			Balance				Interest				Rate (2)
Earning Assets:
Securities:
Tax exempt (3)		$	42,253			$	1,386			4.39	%		$	61,187			$	1,919			4.19	%
Taxable			165,482				3,942			3.18	%			124,756				2,476			2.65	%
Total securities			207,735				5,328			3.43	%			185,943				4,395			3.16	%
Total loans receivable (1) (4)			1,522,197				56,354			4.95	%			1,109,975				37,471			4.51	%
Other interest-earning assets			22,588				211			1.25	%			10,456				69			0.88	%
Total earning assets			1,752,520				61,893			4.72	%			1,306,374				41,935			4.29	%
Non-interest earning assets			118,562											96,629
Allowance for loan losses			(9,353	)										(7,993	)
Total Assets		$	1,861,729										$	1,395,010
Sources of Funds:
Interest bearing deposits:
NOW		$	249,238			$	1,397			0.75	%		$	255,823			$	1,110			0.58	%
Money market			235,252				3,423			1.95	%			104,603				1,073			1.37	%
Savings			223,338				1,068			0.64	%			218,359				534			0.33	%
Time			487,806				7,190			1.97	%			263,533				2,556			1.30	%
Total interest bearing deposits			1,195,634				13,078			1.46	%			842,318				5,273			0.84	%
Borrowed funds			167,899				3,286			2.62	%			152,178				2,323			2.04	%
Subordinated debentures			27,863				949			4.55	%			27,852				946			4.54	%
Total interest bearing liabilities			1,391,396				17,313			1.66	%			1,022,348				8,542			1.12	%
Non-interest bearing liabilities:
Demand deposits			266,999											220,156
Other liabilities			11,558											4,978
Total non-interest bearing liabilities			278,557											225,134
Stockholders' equity			191,776											147,528
Total Liabilities and Stockholders' Equity		$	1,861,729										$	1,395,010
Net Interest Income and Margin (5)							44,580			3.40	%							33,393			3.42	%
Tax-equivalent basis adjustment							(466	)										(647	)
Net Interest Income						$	44,114										$	32,746
(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 2019 and 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
Segment Reporting
(Dollars In Thousands)
(Unaudited)
	Three Months Ended September 30, 2019									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	$	14,685		$	-		$	14,685		$	10,993		$	-		$	10,993
Other income from external sources		1,239			1,864			3,103			967			1,551			2,518
Depreciation and amortization		488			10			498			455			7			462
Income before income taxes		6,648			317			6,965			3,907			320			4,227
Income tax expense (1)		1,693			127			1,820			829			128			957
Total assets		1,927,351			6,908			1,934,259			1,453,536			6,106			1,459,642
	Nine Months Ended September 30, 2019									Nine 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	$	44,114		$	-		$	44,114		$	32,746		$	-		$	32,746
Other income from external sources		4,518			6,610			11,128			2,901			5,355			8,256
Depreciation and amortization		1,529			33			1,562			1,347			19			1,366
Income before income taxes		20,205			2,163			22,368			7,809			1,829			9,638
Income tax expense (1)		4,291			865			5,156			1,336			732			2,068
Total assets		1,927,351			6,908			1,934,259			1,453,536			6,106			1,459,642
(1) Calculated at statutory tax rate of 30.09% in 2019 and 2018 for the insurance services segment