Market Newsdesk

BAYONNE, N.J., April 21, 2021 (GLOBE NEWSWIRE) — BCB Bancorp, Inc. (the “Company”), (NASDAQ: BCBP), the holding company for BCB Community Bank (the “Bank”), today reported net income of $7.1 million for the first quarter of 2021, compared to $7.3 million in the fourth quarter of 2020, and $2.5 million in the first quarter of 2020. Earnings per diluted share in the first quarter of 2021 were $0.40, compared to $0.41 in the preceding quarter and $0.12 in the first quarter of 2020. The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.14 per share. The dividend will be payable May 24, 2021, to common shareholders of record on May 10, 2021.

“Earnings for the first quarter of the year were strong, with higher net interest income and improved efficiencies,” stated Thomas Coughlin, President and Chief Executive Officer. “Loan accommodations continued to decline during the quarter as our clients experienced steady recoveries and local markets resumed activity. We have remained focused on credit quality and maintaining our strong capital position while helping our customers. Our continued efforts to deleverage the balance sheet, control interest expense, and deploy excess cash helped expand our net interest margin by 13 basis points during the first quarter of 2021, compared to the prior quarter. We believe our reserve levels are adequate to cover potential loan losses stemming from the pandemic. As the Federal Reserve anticipates economic growth in the second half of the year and as vaccinations continue to roll out, the Company has laid a solid foundation from which to emerge from the pandemic even stronger.

“At the early onset of the pandemic, we were active participants in the first round of the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”), allowing us to assist approximately 1,100 of our customers who received $133 million in PPP funding during 2020. As regulations, guidance, and the forgiveness process for PPP loans continued to evolve, we recognized the operational risk and complexity associated with this portfolio. As a result, we sold the PPP loan portfolio during the fourth quarter of 2020 to a third party.”

The Company is particpating in the latest round of PPP lending pursuant to the Consolidated Appropriations Act of 2021 (“CAA”), the PPP Extension Act of 2021 and the American Rescue Plan Act (“ARPA”). The CAA provided additional COVID-19 stimulus relief and included $284 billion allocated for another round of PPP lending. The program offered new PPP loans for companies that did not receive a PPP loan in 2020, as well as second-draw loans targeted at hard-hit businesses that have already spent their initial PPP proceeds. “We have been active participants in this new round of PPP funding by partnering as a referral agent with an SBA Small Business Lending Company, The Loan Source Inc., for the application, forgiveness, and ongoing-service process of PPP loans, thereby eliminating our operational risk and allowing us to continue to help our business customers as we did during the first round of funding,” said Coughlin.

Executive Summary

• Net interest margin was 3.48 percent for the first quarter of 2021, a 13-basis point increase compared to 3.35 percent for the fourth quarter of 2020, and an 85-basis point improvement from 2.63 percent for the first quarter of 2020.
  • Total yield on interest-earning assets decreased 3 basis points to 4.15 percent for the first quarter of 2021, compared to 4.18 percent for the fourth quarter of 2020, and increased 3 basis points from 4.12 percent for the first quarter of 2020.
  • Total cost of interest-bearing liabilities decreased 19 basis points to 0.85 percent for the first quarter of 2021, compared to 1.04 percent for the fourth quarter of 2020 and decreased 93 basis points from 1.78 percent for the first quarter of 2020.
• Net income was $7.1 million in the first quarter of 2021, compared to $7.3 million in the prior quarter and $2.5 million in the first quarter a year ago.
• Earnings per diluted share were $0.40 in the first quarter of 2021, compared to $0.41 in the prior quarter and $0.12 in the first quarter of 2020.
• The efficiency ratio for the first quarter improved to 53.24% compared to both the previous quarter and year-ago quarters.
• Loans receivable, net of allowance for loan losses, increased by 6.1 percent, to $2.296 billion at March 31, 2021, from $2.164 billion a year earlier.
• The provision for loan losses increased by $0.4 million, to $1.9 million for the first quarter of 2021, compared to a provision for loan losses of $1.5 million for the first quarter of 2020; this increase was primarily due to factors related to the COVID-19 pandemic.
• Allowance for loan losses as a percentage of non-accrual loans was 246.3 percent at March 31, 2021, compared to 205.2 percent for the prior quarter and 585.4 percent at March 31, 2020, as total non-accrual loans decreased to $14.4 million at March 31, 2021 from $16.4 million for the prior quarter and increased compared to $4.4 million at March 31, 2020.
• Total deposits were $2.404 billion at March 31, 2020, up from $2.376 billion a year ago.
• The Company purchased $8.5 million of BOLI during the first quarter of 2021.
• On April 14, 2021, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.14 per share. The dividend will be payable May 24, 2021, to common shareholders of record on May 10, 2021.  

Balance Sheet Review
Total assets increased by $31.4 million, or 1.1 percent, to $2.852 billion at March 31, 2021 from $2.821 billion at December 31, 2020. The increase in total assets was mainly related to an increase in total cash and cash equivalents, partly offset by a decrease in investment securities.

Total cash and cash equivalents increased by $35.7 million, or 13.7 percent, to $296.9 million at March 31, 2021 from $261.2 million at December 31, 2020. This increase was mainly related to an increase in deposits, partly offset by net repayments of borrowings.

Loans receivable, net increased by $1.4 million, or 0.1 percent, to $2.296 billion at March 31, 2021 from $2.295 billion at December 31, 2020. Total loan increases for the first quarter of 2021 included increases of $11.3 million in construction loans, $9.3 million in commercial real estate and multi-family loans, and $29,000 in consumer loans, partly offset by decreases of $10.0 million in residential one-to-four family loans, $7.0 million in commercial business loans, and $307,000 in home equity loans. The allowance for loan losses increased $1.8 million to $35.5 million, or 246.3 percent of non-accruing loans and 1.52 percent of gross loans, at March 31, 2021 as compared to an allowance for loan losses of $33.6 million, or 205.2 percent of non-accruing loans and 1.44 percent of gross loans, at December 31, 2020.

Total investment securities decreased by $5.6 million, or 4.8 percent, to $111.9 million at March 31, 2021 from $117.5 million at December 31, 2020, representing repayments, calls and maturities, partly offset by purchases of $757,000.

Deposit liabilities increased by $86.1 million, or 3.7 percent, to $2.404 billion at March 31, 2021 from $2.318 billion at December 31, 2020. The increase in deposit liabilities mainly related to the recent payments to individuals under the ARPA and the second round of PPP payments under the CAA. Total increases for the three months ended March 31, 2021 included $52.0 million in non-interest-bearing deposit accounts, $20.2 million in money market checking accounts, $13.5 million in savings and club accounts and $6.3 million in NOW deposit accounts. The increase in deposits was partly offset by decreases of $5.9 million in certificates of deposit, including listing service and brokered deposit accounts. The Company utilizes listing service and brokered certificates of deposit as additional sources of deposit liquidity to fund loan growth. At March 31, 2021, the Company had $17.0 million in listing service deposits and no brokered certificates of deposit.

Debt obligations decreased by $57.8 million, or 25.3 percent, to $170.4 million at March 31, 2021 from $228.2 million at December 31, 2020. The weighted average interest rate of FHLB advances was 1.40 percent at March 31, 2021 and 1.66 percent at December 31, 2020. The fixed interest rate of our subordinated debt balances was 5.625 percent at March 31, 2021 and December 31, 2020. During the three months ended March 31, 2021, the Company opted to extinguish $68.0 million in FHLB advances which held a weighted average rate of 2.00%. The advances were originally set to mature in 2021 and 2022. The effect of the extinguishment of the debt reduced the weighted average cost of FHLB borrowings by approximately 20 basis points on an annualized basis. The related expense for the extinguishment of this debt is included in noninterest expense.

Stockholders’ equity increased by $4.3 million, or 1.7 percent, to $253.5 million at March 31, 2021 from $249.2 million at December 31, 2020. The increase was primarily attributable to the increase in retained earnings of $4.4 million, or 7.6 percent, to $62.8 million at March 31, 2021 from $58.4 million at December 31, 2020, related to the net effect of net income less dividends paid for the three months ended March 31, 2021.

First Quarter 2021 Income Statement Review

Net interest income increased by $4.8 million, or 25.5 percent, to $23.6 million for the first quarter of 2021 from $18.8 million for the first quarter of 2020. The increase in net interest income resulted primarily from a $6.1 million decrease in interest expense related to a decrease in the average rate on interest-bearing liabilities of 93 basis points to 0.85 percent for the first quarter of 2021 from 1.78 percent for the first quarter of 2020, as well as a decrease in the average balance of interest-bearing liabilities of $273.5 million, or 11.4 percent, to $2.120 billion for the first quarter of 2021 from $2.393 billion for the first quarter of 2020.

Interest income was $1.3 million lower than the prior year, related to a decrease in the average balance of interest-earning assets of $153.7 million, or 5.4 percent, to $2.705 billion for the first quarter of 2021 from $2.859 billion for the first quarter of 2020. The decrease in the average balance of interest-earning assets was partly offset by an increase in the average yield of interest-earning assets of three basis points to 4.15 percent for the first quarter of 2021 from 4.12 percent for the first quarter of 2020. The decrease in the average balance of interest earning assets mainly relates to a decrease in the Company’s level of cash balances for the first quarter of 2021 as compared to the first quarter of 2020, as the average balances of deposits and FHLB advances decreased.

Interest expense decreased by $6.1 million, or 57.6 percent, to $4.5 million for the first quarter of 2021 from $10.6 million for the first quarter of 2020. This decrease resulted primarily from a decrease in the average rate on interest-bearing liabilities of 93 basis points to 0.85 percent for the first quarter of 2021 from 1.78 percent for the first quarter of 2020, as well as a decrease in the average balance of interest-bearing liabilities of $273.5 million, or 11.4 percent, to $2.120 billion for the first quarter of 2021 from $2.393 billion for the first quarter of 2020. The decreases in the average cost of funds and the average balance of interest-bearing liabilities primarily resulted from the declining interest rate environment and the Company’s strategy of a heightened focus on cost of funds and continued deleveraging.

Net interest margin was 3.48 percent for the first quarter of 2021, compared to 2.63 percent for the first quarter of 2020. The increase in the net interest margin compared to the prior-year period was the result of the volatile financial markets attributable to the COVID-19 pandemic and the low interest rate environment that were more prevalent in the prior period. Management has been proactive in managing its cost of funds and has significantly decreased the average cost of total interest-bearing liabilities, while slightly improving the average yield on interest-earning assets for the first quarter of 2021 compared to the first quarter of 2020. Despite the ongoing pandemic, the Company has been able to increase its average balance of loans receivable for the first quarter of 2021 as compared to the first quarter of 2020. This increase in the average balance of loans receivable, and the corresponding decrease in cash balances, highlight management’s efforts to maintain a strong net interest margin.

Non-interest income increased by $1.3 million, or 185.5 percent, to $2.0 million for the first quarter of 2021 from $683,000 for the first quarter of 2020. The increase in total noninterest income was mainly related to higher BOLI income of $701,000, higher fees and service charges of $385,000, a lower unrealized loss on equity securities of $244,000, and a higher gain on the sales of loans of $213,000, partly offset by lower other noninterest income of $276,000. The increase in BOLI income relates to an initial purchase of $60.0 million of BOLI product in the third quarter of 2020, and an additional purchase of $8.5 million in the first quarter of 2021. The higher fees and service charges related primarily to $328,000 of referral fees for PPP loans. The decrease in other noninterest income related to the reversal of $295,000 of liabilities previously recorded for acquired loans that paid off in the prior-year quarter. Unrealized gains or losses on equity securities, and the gain on loan sales, are based on market conditions.

Non-interest expense decreased by $781,000, or 5.4 percent, to $13.6 million for the first quarter of 2021 from $14.4 million for the first quarter of 2020. Salaries and employee benefits expense decreased by $844,000, or 11.4 percent, to $6.5 million for the first quarter of 2021 from $7.4 million for the first quarter of 2020, primarily related to fewer full-time equivalent employees, partly offset by normal compensation increases. The number of full-time equivalent employees for the first quarter of 2021 was 312, as compared with 371 for the same period in 2020. Occupancy and equipment expense increased by $129,000, or 4.6 percent, to $3.0 million for the first quarter of 2021 from $2.8 million for the first quarter of 2020, largely related to building sanitization costs associated with the COVID-19 pandemic, which costs were partly offset by the closure of two of the Company’s branch offices in the fourth quarter of 2020.The Company recognized an expense of $540,000 for a loss on extinguishment of debt, related to the prepayment of higher-cost FHLB borrowings, for the first quarter of 2021. Other noninterest expense decreased by $491,000, or 24.8 percent, to $1.5 million for the first quarter of 2021 from $2.0 million for the first quarter of 2020. Other noninterest expense consisted of loan expense, business development, office supplies, correspondent bank fees, telephone and communication and miscellaneous fees and expenses. The decrease in the current period was primarily related to a reduction of business development and loan-related expenses, largely attributable to the current pandemic condition.

The income tax provision increased by $1.9 million, or 173.9 percent, to $2.9 million for the first quarter of 2021 from $1.0 million for the first quarter of 2020. The increase in the income tax provision was a result of higher taxable income for the first quarter of 2021 as compared with that same period for 2020. The consolidated effective tax rate for the first quarter of 2021 was 29.3 percent compared to 29.9 percent for the first quarter of 2020. The lower rate in the current period related primarily to non-taxable BOLI income and lower non-deductible costs in the current year period.

Asset Quality

During the first quarter of 2021, the Company recognized $27,000 in net charge-offs, compared to $300,000 in net recoveries for the first quarter of 2020.

The COVID-19 pandemic has caused disruption to the global economy, but the extent and duration of the disruption is uncertain at this time. Management will continue to monitor any activity for loan deferment requests and delinquencies on a regular basis.

“While we experienced some decline in asset quality metrics during 2020, we have since seen a turnaround as non-accrual loans, impaired loans, and classified loans declined as of the end of the current quarter, despite the continued challenges from COVID-19. With respect to chargeoffs, we have been in a net recovery position looking back over the last four quarters, but continue to provide additional loan loss reserves in response to the ongoing business disruption caused by the pandemic,” said Coughlin.

The provision for loan losses increased by $400,000, to $1.9 million, for the first quarter of 2021, compared to $1.5 million for the first quarter of 2020; this increase was primarily due to COVID-19 related factors. The Bank had non-accrual loans totaling $14.4 million, or 0.62 percent, of gross loans at March 31, 2021, as compared to $16.4 million, or 0.70 percent, of gross loans at December 31, 2020.

Performing troubled debt restructured (“TDR”) loans that were not included in nonaccrual loans at March 31, 2021, were $13.5 million, compared to $13.8 million at December 31, 2020. Borrowers who are in financial difficulty and who have been granted concessions (excluding COVID-19 modifications) that may include interest rate reductions, term extensions, or payment alterations, are categorized as TDR loans.

The allowance for loan losses was $35.5 million, or 1.52 percent of gross loans at March 31, 2021, and $33.6million, or 1.44 percent of gross loans at December 31, 2020. The allowance for loan losses was 246.3 percent of non-accrual loans at March 31, 2021, and 205.2 percent of non-accrual loans at December 31, 2020.

COVID-19 Response

With the global outbreak of COVID-19, the Company remains focused on protecting the health and well-being of its employees and the communities in which it operates while assuring the continuity of its business operations. 

The Company activated its dedicated pandemic team that proactively implemented its business continuity plans and has taken a variety of measures to ensure the ongoing availability of services, while taking health and safety measures, including enhanced cleaning and hygiene protocols in all of its facilities and remote work policies, where possible. To date, as a result of these business continuity measures, the Company has not experienced significant disruptions in its operations. 

• Operational Initiatives  
  • The pandemic response team meets on an as-needed basis and actively monitors guidance released by regulators and banking associations.
  • In-person meetings are closely managed and are held on an as needed basis only.
  • Many employees are working remotely, temporarily relocated or are working alternate days to increase social distancing.
  • Barriers have been installed in branches and back offices to provide protection.
  • Branch and operational offices are cleaned and sanitized biweekly and employees have access to masks, gloves and disinfectant.
  • Masks are required for entry and social distancing is strictly enforced.  
  • Management provides updates to employees on a regular basis.
  • The Call Center is open six days a week to assist with customer inquiries.
  • Branch offices are open; however customers have the ability to make an appointment if they choose. The company is encouraging customers to utilize the ATM, drive-through and electronic banking services wherever possible.
  • The Bank is working with a local provider to have the vaccine administered at one of the bank’s locations.
• Allowance for Loan Losses (“ALLL”)
  
  • The Bank increased its loan loss reserves through the addition of $1.9 million in loan loss provisions for the three-month period ending March 31, 2021, as compared to $1.5 million for the same period last year. The Bank considered qualitative factors, such as changes in underwriting policies, current economic conditions, delinquency statistics, the adequacy of the underlying collateral and the financial strength of borrowers in arriving at its loan loss provision. All of these factors are likely to be affected by the COVID-19 pandemic. Loan categories for specific business types were stressed due to rising delinquencies within those market sectors (hospitality, restaurants, office space, and commercial condos) to determine the potential for collateral shortfalls. The impact of COVID-19 is likely to be felt over the next several quarters. Adjustments to the ALLL may be required as the full impact of COVID-19 on the borrowers’ capacity to make payments and the value of the underlying collateral becomes known.

• Loan Deferments
  • The banking regulatory agencies, through an Interagency Statement dated April 7, 2020, encouraged financial institutions to work prudently with borrowers who request loan modifications or deferrals as a result of COVID-19. The Bank did so in 2020, but now has no deferred loans within its portfolio.
  • The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and provided over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. Under Section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 modifications. A financial institution can then suspend the requirements under GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a TDR, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes. Most of these loans are accruing interest and the Bank is considering the loans within the overall allowance for loan loss analysis.
  • The Bank has worked with customers that previously requested loan deferments and entered into COVID-19 modifications. The loan balances for these customers at March 31, 2021 was approximately $86.2 million. The modifications generally provide a short-term, interest-only period. The Bank does not believe that these modified loans will result in losses, so long as the borrowers’ representation of cash flows is realized. Borrowers that have requested modifications with less definitive cash flow projections have been denied and are being analyzed as part of the loan stress testing and Allowance for Loan Loss calculation.

• Paycheck Protection Program (PPP)  
  • The Bank has partnered with The Loan Source, Inc. and recognized $328,000 in referral fees for the second round of PPP loans in the first quarter of 2021.

• IT Changes
  • To protect the well-being of our staff and customers, the Company has set up resources for some employees to work from home. To facilitate the move, we allocated laptop computers to staff and enhanced our ability to access the network offsite. We have taken additional steps to minimize the increased risk of security breaches (including privacy breaches and cyber-attacks), given the increased number of employees working remotely.

• Liquidity and Capital Resources
  • The Company was well positioned with adequate levels of cash and liquid assets as of March 31, 2021, as well as wholesale borrowing capacity of over $800 million. At March 31, 2021, the Company’s equity to assets ratio was 8.89 percent and the Bank is considered “well capitalized” under its regulatory requirements. The Company will continue to monitor the effects of COVID-19 in determining future cash dividends and any requirement for additional capital each quarter.

About BCB Bancorp, Inc.

Established in 2000 and headquartered in Bayonne, N.J., BCB Community Bank is the wholly-owned subsidiary of BCB Bancorp, Inc. (NASDAQ: BCBP). The Bank has 29 branch offices in Bayonne, Carteret, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lyndhurst, Maplewood, Monroe Township, Newark, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, and three branches in Hicksville and Staten Island, New York. The Bank provides businesses and individuals a wide range of loans, deposit products, and retail and commercial banking services. For more information, please go to www.bcb.bank.

Forward-Looking Statements

This release, like many written and oral communications presented by BCB Bancorp, Inc., and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “could,” “may,” “should,” “will,” “would,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.

In addition to factors previously disclosed in the Company’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”) and those identified elsewhere in this release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of the Bank’s products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and actions of governmental agencies and legislative and regulatory actions and reforms.

As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, the Company could be subject to any of the following additional risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations:

• demand for our products and services may decline, making it difficult to grow assets and income;
• if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income;
• collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase;
• our allowance for loan losses may have to be increased if borrowers experience financial difficulties beyond forbearance periods, which will adversely affect our net income;
• the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us;
• as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income;
• a material decrease in net income over several quarters could result in a decrease in the rate of our quarterly cash dividend;
• our cyber security risks are increased as the result of an increase in the number of employees working remotely;
• we rely on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us;
• FDIC premiums may increase if the agency experiences additional resolution costs; and
• civil unrest could occur in the communities that the Company serves.
  

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). This press release also contains certain supplemental Non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

The Company provides measurements and ratios based on tangible stockholders’ equity and efficiency ratios. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

For a reconciliation of GAAP to Non-GAAP financial measures included in this press release, see “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

	Statements of Income – Three Months Ended,
	March 31, 2021			December 31, 2020			March 31, 2020			March 31, 2021 vs. December 31, 2020		March 31, 2021 vs. March 31, 2020
Interest and dividend income:	(In thousands, except per share amounts)
Loans, including fees	$	26,863		$	27,090		$	26,814		-0.8	%	0.2	%
Mortgage-backed securities		206			298			563		-30.9	%	-63.4	%
Other investment securities		784			743			8		5.5	%	9700.0	%
FHLB stock and other interest earning assets		222			204			2,034		8.8	%	-89.1	%
Total interest and dividend income		28,075			28,335			29,419		-0.9	%	-4.6	%
Interest expense:
Deposits:
Demand		1,198			1,220			2,208		-1.8	%	-45.7	%
Savings and club		118			116			105		1.7	%	12.4	%
Certificates of deposit		1,992			2,702			6,432		-26.3	%	-69.0	%
		3,308			4,038			8,745		-18.1	%	-62.2	%
Borrowings		1,205			1,546			1,896		-22.1	%	-36.4	%
Total interest expense		4,513			5,584			10,641		-19.2	%	-57.6	%
Net interest income		23,562			22,751			18,778		3.6	%	25.5	%
Provision for loan losses		1,865			1,915			1,500		-2.6	%	24.3	%
Net interest income after provision for loan losses		21,697			20,836			17,278		4.1	%	25.6	%
Non-interest income:
Fees and service charges		1,111			805			726		38.0	%	53.0	%
Gain on sales of loans		274			600			61		-54.3	%	349.2	%
Gain on sale of impaired loans		–			26			–		-100.0	%	0.0	%
Loss on sales of other real estate owned		–			(38	)		–		-100.0	%	0.0	%
Gain on sale of investment securities		–			658			–		-100.0	%	0.0	%
BOLI income		701			648			–		8.2	%	0.0	%
Realized and unrealized (loss) gain on equity investments		(196	)		970			(440	)	-120.2	%	55.5	%
Other		60			75			336		-20.0	%	-82.1	%
Total non-interest income		1,950			3,744			683		-47.9	%	185.5	%
Non-interest expense:
Salaries and employee benefits		6,545			6,460			7,389		1.3	%	-11.4	%
Occupancy and equipment		2,953			3,018			2,824		-2.2	%	4.6	%
Data processing and service fees		1,008			986			938		2.2	%	7.5	%
Professional fees		412			393			470		4.8	%	-12.3	%
Director fees		247			354			358		-30.2	%	-31.0	%
Regulatory assessment fees		376			461			321		-18.4	%	17.1	%
Advertising and promotional		12			22			61		-45.5	%	-80.3	%
Other real estate owned, net		4			43			26		-90.7	%	-84.6	%
Loss from extinguishment of debt		540			837			–		-35.5	%	0.0	%
Other		1,486			1,804			1,977		-17.6	%	-24.8	%
Total non-interest expense		13,583			14,378			14,364		-5.5	%	-5.4	%
Income before income tax provision		10,064			10,202			3,597		-1.4	%	179.8	%
Income tax provision		2,947			2,904			1,076		1.5	%	173.9	%
Net Income		7,117			7,298			2,521		-2.5	%	182.3	%
Preferred stock dividends		283			286			344		-1.0	%	-17.7	%
Net Income available to common stockholders	$	6,834		$	7,012		$	2,177		-2.5	%	213.9	%
Net Income per common share-basic and diluted
Basic	$	0.40		$	0.41		$	0.12		-2.4	%	233.3	%
Diluted	$	0.40		$	0.41		$	0.12		-2.4	%	233.3	%
Weighted average number of common shares outstanding
Basic		17,115			17,094			17,502		0.1	%	-2.2	%
Diluted		17,232			17,104			17,551		0.7	%	-1.8	%

Statements of Financial Condition	March 31, 2021			December 31, 2020			March 31, 2020			March 31, 2021 vs. December 31, 2020		March 31, 2021 vs. March 30, 2020
ASSETS	(In Thousands, except per share amounts)
Cash and amounts due from depository institutions	$	24,796		$	23,201		$	24,292		6.9	%	2.1	%
Interest-earning deposits		272,142			238,028			570,894		14.3	%	-52.3	%
Total cash and cash equivalents		296,938			261,229			595,186		13.7	%	-50.1	%
Interest-earning time deposits		735			735			735		–		–
Debt securities available for sale		93,582			99,756			95,429		-6.2	%	-1.9	%
Equity investments		18,278			17,717			1,580		3.2	%	1056.8	%
Loans held for sale		1,147			3,530			838		-67.5	%	36.9	%
Loans receivable, net of allowance for loan losses
of $35,477, $33,639, and $25,534 respectively		2,296,434			2,295,021			2,164,057		0.1	%	6.1	%
Federal Home Loan Bank of New York stock, at cost		8,920			11,324			14,586		-21.2	%	-38.8	%
Premises and equipment, net		14,796			15,272			19,292		-3.1	%	-23.3	%
Accrued interest receivable		12,056			12,924			8,936		-6.7	%	34.9	%
Other real estate owned		414			414			1,623		0.0	%	-74.5	%
Deferred income taxes		13,239			12,574			10,653		5.3	%	24.3	%
Goodwill and other intangibles		5,472			5,488			5,535		-0.3	%	-1.1	%
Operating lease right-of-use asset		14,328			14,988			14,084		-4.4	%	1.7	%
Bank-owned life insurance (“BOLI”)		70,234			61,033			–		15.1	%	0.0	%
Other assets		5,887			9,011			9,469		-34.7	%	-37.8	%
Total Assets	$	2,852,460		$	2,821,016		$	2,942,003		1.1	%	-3.0	%
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Non-interest bearing deposits	$	454,061		$	402,100		$	293,174		12.9	%	54.9	%
Interest bearing deposits		1,950,074			1,915,950			2,082,547		1.8	%	-6.4	%
Total deposits		2,404,135			2,318,050			2,375,721		3.7	%	1.2	%
FHLB advances		133,298			191,161			262,800		-30.3	%	-49.3	%
Subordinated debentures		37,101			37,042			36,868		0.2	%	0.6	%
Operating lease liability		14,589			15,224			14,246		-4.2	%	2.4	%
Other liabilities		9,883			10,328			11,730		-4.3	%	-15.7	%
Total Liabilities		2,599,006			2,571,805			2,701,365		1.1	%	-3.8	%
STOCKHOLDERS’ EQUITY
Preferred stock: $0.01 par value, 10,000 shares authorized		–			–			–		–		–
Additional paid-in capital preferred stock		25,723			25,723			24,876		0.0	%	3.4	%
Common stock: no par value, 40,000 shares authorized		–			–			–		–		–
Additional paid-in capital common stock		192,633			192,276			190,658		0.2	%	1.0	%
Retained earnings		62,777			58,335			48,168		7.6	%	30.3	%
Accumulated other comprehensive (loss) income		(349	)		(205	)		271		70.2	%	-228.8	%
Treasury stock, at cost		(27,330	)		(26,918	)		(23,335	)	1.5	%	17.1	%
Total Stockholders’ Equity		253,454			249,211			240,638		1.7	%	5.3	%
Total Liabilities and Stockholders’ Equity	$	2,852,460		$	2,821,016		$	2,942,003		1.1	%	-3.0	%
Outstanding common shares		17,121			17,108			17,407		0.1	%	-1.6	%

	Three Months Ended March 31,
	2021							2020
	Average Balance		Interest Earned/Paid		Average Yield/Rate (3)			Average Balance		Interest Earned/Paid		Average Yield/Rate (3)
	(Dollars in thousands)
Interest-earning assets:
Loans Receivable	$	2,326,230	$	26,863	4.62	%		$	2,185,753	$	26,814	4.91	%
Investment Securities		114,461		990	3.46	%			92,306		571	2.47	%
FHLB stock and Interest-earning assets		264,308		222	0.34	%			580,623		2,034	1.40	%
Total Interest-earning assets		2,704,999		28,075	4.15	%			2,858,682		29,419	4.12	%
Non-interest-earning assets		109,987							73,509
Total assets	$	2,814,986						$	2,932,191
Interest-bearing liabilities:
Interest-bearing demand accounts	$	610,893	$	757	0.50	%		$	407,339	$	858	0.84	%
Money market accounts		317,151		441	0.56	%			321,233		1,350	1.68	%
Savings accounts		302,741		118	0.16	%			259,721		105	0.16	%
Certificates of Deposit		682,975		1,992	1.17	%			1,120,060		6,432	2.30	%
Total interest-bearing deposits		1,913,760		3,308	0.69	%			2,108,353		8,745	1.66	%
Borrowed funds		205,956		1,205	2.34	%			284,830		1,896	2.66	%
Total interest-bearing liabilities		2,119,716		4,513	0.85	%			2,393,183		10,641	1.78	%
Non-interest-bearing liabilities		444,787							299,679
Total liabilities		2,564,503							2,692,862
Stockholders’ equity		250,483							239,329
Total liabilities and stockholders’ equity	$	2,814,986						$	2,932,191
Net interest income			$	23,562						$	18,778
Net interest rate spread(1)					3.30	%						2.34	%
Net interest margin(2)					3.48	%						2.63	%
(1)     Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.
(2)     Net interest margin represents net interest income divided by average total interest-earning assets.
(3)     Annualized.

	Financial Condition data by quarter
	Q1 2021			Q4 2020			Q3 2020			Q2 2020			Q1 2020
	(In thousands, except book values)
Total assets	$	2,852,460		$	2,821,016		$	2,842,319		$	2,986,876		$	2,942,003
Cash and cash equivalents		296,938			261,229			160,551			412,249			595,186
Securities		111,860			117,473			134,144			140,201			97,009
Loans receivable, net		2,296,434			2,295,021			2,391,990			2,343,593			2,164,057
Deposits		2,404,135			2,318,050			2,273,338			2,442,233			2,375,721
Borrowings		170,399			228,203			296,584			279,726			299,668
Stockholders’ equity		253,454			249,211			242,687			241,019			240,638
Book value per common share1	$	13.30		$	13.06		$	12.83		$	12.49		$	12.40
Tangible book value per common share2	$	12.99		$	12.76		$	12.53		$	12.18		$	12.09
	Operating data by quarter
	Q1 2021			Q4 2020			Q3 2020			Q2 2020			Q1 2020
	(In thousands, except for per share amounts)
Net interest income	$	23,562		$	22,751		$	20,890		$	17,991		$	18,778
Provision (credit) for loan losses		1,865			1,915			2,726			3,300			1,500
Non-interest income		1,950			3,744			6,955			1,108			683
Non-interest expense		13,583			14,378			13,342			11,952			14,364
Income tax expense		2,947			2,904			3,465			1,121			1,076
Net income	$	7,117		$	7,298		$	8,312		$	2,726		$	2,521
Net income per diluted share	$	0.40		$	0.41		$	0.47		$	0.14		$	0.12
Common Dividends declared per share	$	0.14		$	0.14		$	0.14		$	0.14		$	0.14
	Financial Ratios 3
	Q1 2021			Q4 2020			Q3 2020			Q2 2020			Q1 2020
Return on average assets		1.01	%		1.03	%		1.15	%		0.36	%		0.34	%
Return on average stockholder’s equity		11.37	%		11.93	%		14.06	%		4.57	%		4.21	%
Net interest margin		3.48	%		3.35	%		2.98	%		2.45	%		2.63	%
Stockholder’s equity to total assets		8.89	%		8.83	%		8.54	%		8.07	%		8.18	%
Efficiency Ratio4		53.24	%		54.27	%		47.92	%		62.58	%		73.81	%
	Asset Quality Ratios
	Q1 2021			Q4 2020			Q3 2020			Q2 2020			Q1 2020
	(In thousands, except for ratio %)
Non-Accrual Loans	$	14,405		$	16,396		$	7,151		$	4,495		$	4,362
Non-Accrual Loans as a % of Total Loans		0.62	%		0.70	%		0.29	%		0.19	%		0.20	%
ALLL as % of Non-Accrual Loans		246.3	%		205.2	%		444.1	%		641.6	%		585.4	%
Impaired Loans		67,344			83,201			31,318			26,839			23,022
Classified Loans		56,178			68,580			18,138			13,584			9,882
(1) Calculated by dividing stockholders’ equity to shares outstanding.
(2) Calculated by dividing tangible stockholders’ common equity, a non-GAAP measure, by shares outstanding. Tangible stockholders’ common equity is stockholders’ equity less goodwill and preferred stock. See “Reconciliation of GAAP to Non-GAAP Financial Measures by quarter.”
(3) Ratios are presented on an annualized basis, where appropriate.
(4) The Efficiency Ratio, a non-GAAP measure, was calculated by dividing non-interest expense by the total of net interest income and non-interest income. See “Reconciliation of GAAP to Non-GAAP Financial Measures by quarter.”

	Recorded Investment in Loans Receivable by quarter
	Q1 2021			Q4 2020			Q3 2020			Q2 2020			Q1 2020
	(In thousands)
Residential one-to-four family	$	234,375		$	244,369		$	241,796		$	247,471		$	268,137
Commercial and multi-family		1,700,113			1,690,836			1,677,668			1,643,954			1,577,816
Construction		167,224			155,967			134,769			111,463			101,692
Commercial business		177,340			184,357			311,204			309,284			177,146
Home equity		53,360			53,667			60,973			63,481			64,857
Consumer		851			822			770			603			1,029
	$	2,333,263		$	2,330,018		$	2,427,180		$	2,376,256		$	2,190,677
Less:
Deferred loan fees, net		(1,352	)		(1,358	)		(3,430	)		(3,821	)		(1,086	)
Allowance for loan loss		(35,477	)		(33,639	)		(31,760	)		(28,842	)		(25,534	)
Total loans, net	$	2,296,434		$	2,295,021		$	2,391,990		$	2,343,593		$	2,164,057
	Non-Accruing Loans in Portfolio by quarter
	Q1 2021			Q4 2020			Q3 2020			Q2 2020			Q1 2020
	(In thousands)
Originated loans:
Residential one-to-four family	$	701		$	1,736		$	1,412		$	1,332		$	1,390
Commercial and multi-family		7,962			8,721			1,436			849			976
Commercial business		5,307			5,383			3,630			1,642			1,702
Home equity		435			556			673			672			294
Total:	$	14,405		$	16,396		$	7,151		$	4,495		$	4,362

	Reconciliation of GAAP to Non-GAAP Financial Measures by quarter
	Tangible Book Value per Share
	Q1 2021			Q4 2020			Q3 2020			Q2 2020			Q1 2020
	(In thousands, except per share amounts)
Total Stockholders’ Equity	$	253,454		$	249,211		$	242,687		$	241,019		$	240,638
Less: goodwill		5,253			5,253			5,253			5,253			5,253
Less: preferred stock		25,723			25,723			23,481			27,956			24,876
Total tangible common stockholders’ equity		222,478			218,235			213,953			207,810			210,509
Shares common shares outstanding		17,121			17,108			17,081			17,057			17,407
Book value per common share	$	13.30		$	13.06		$	12.83		$	12.49		$	12.40
Tangible book value per common share	$	12.99		$	12.76		$	12.53		$	12.18		$	12.09
	Efficiency Ratios
	Q1 2021			Q4 2020			Q3 2020			Q2 2020			Q1 2020
	(In thousands, except for ratio %)
Net interest income	$	23,562		$	22,751		$	20,890		$	17,991		$	18,778
Non-interest income		1,950			3,744			6,955			1,108			683
Total income		25,512			26,495			27,845			19,099			19,461
Non-interest expense		13,583			14,378			13,342			11,952			14,364
Efficiency Ratio		53.24	%		54.27	%		47.92	%		62.58	%		73.81	%

	Distribution of Deposits by quarter
	Q1 2021		Q4 2020		Q3 2020		Q2 2020		Q1 2020
	(In thousands)
Demand:
Non-Interest Bearing	$	454,061	$	402,100	$	395,630	$	390,912	$	293,174
Interest Bearing		620,171		613,882		504,863		472,064		428,683
Money Market		335,440		315,208		311,074		319,113		321,973
Sub-total:	$	1,409,672	$	1,331,190	$	1,211,567	$	1,182,089	$	1,043,830
Savings and Club		311,259		297,765		287,513		275,567		260,291
Certificates of Deposit		683,204		689,095		774,258		984,577		1,071,600
Total Deposits:	$	2,404,135	$	2,318,050	$	2,273,338	$	2,442,233	$	2,375,721

        

Contact:	Thomas Coughlin,
	President & CEO
	Thomas Keating, CFO
	(201) 823-0700

ATLANTA, April 21, 2021 (GLOBE NEWSWIRE) — American Virtual Cloud Technologies Inc. (NASDAQ: AVCT) (AVCtechnologies), the leading cloud communications and IT service provider, announced today that it has been named to the CRN^® 2021 Tech Elite 250 list. This is the ninth consecutive year AVCtechnologies’ brand, Computex, has been included on the list. The annual list features IT solution providers of all sizes in North America that have earned cutting-edge technical certifications from leading technology suppliers. These companies have separated themselves from the pack as top solution providers, earning multiple, premier IT certifications, specializations, and partner program designations from industry-leading technology providers.

Each year, The Channel Company’s research group and CRN editors distinguish the most client-driven technical certifications in the North American IT channel. Solution providers that earn these high honors — which enable them to deliver exclusive products, services, and customer support — are then selected from a pool of online applicants as well as from The Channel Company’s solution provider database.

“We’re honored to be included in the CRN Tech Elite 250 list for the ninth consecutive year. Our team is client-driven and strives to provide products, services, and support to our partners and customers that make an impact on their businesses,” said Worth Davis, President, Solution Provider at AVCtechnologies.

“Throughout the year we’ve seen our customers migrate to the cloud at a rapid pace and deal with unexpected cybersecurity adjustments. We’re happy to have been at the forefront of these adjustments as they navigate through their digital transformations to provide them with world class support along the way,” said Faisal Bhutto, President, Cloud & Cybersecurity at AVCtechnologies.

As a part of AVCtechnologies, Computex Technology Solutions (“Computex”) offers flexible, reliable services that enable enterprise customers to navigate the changing cybersecurity ecosystem impacted by the pandemic. AVCtechnologies encourages high levels of training and certifications for its engineers, enabling them to rise through the ranks of vendor partner programs. The AVCtechnologies team provides around the clock customer service and prioritizes the customer experience as a means to establish long standing relationships. Businesses rely on solution providers for an enormous amount of technologies, services, support and expertise to help them meet today’s IT challenges — whether it’s a new implementation, day-to-day operations or digital transformation initiatives.

“CRN’s Tech Elite 250 list highlights the top solution providers in the IT channel with the most in-depth technical knowledge, expertise, and certifications for providing the best level of service for their customers,” said Blaine Raddon, CEO of The Channel Company. “These solution providers have continued to extend their talents and abilities across various technologies and IT practices, demonstrating their commitment to really conveying the most exceptional business value to their customers.”

The Tech Elite 250 will be featured in the April issue of CRN® Magazine and online at www.CRN.com/techelite250.

About American Virtual Cloud Technologies, Inc.

American Virtual Cloud Technologies (Nasdaq: AVCT) is a premier global IT solutions provider offering a comprehensive bundle of services including unified cloud communications, managed services, cybersecurity, and enhanced connectivity. Our mission is to provide global technology solutions with a superior customer experience. For more information, visit https://www.avctechnologies.com.

About Computex Technology Solutions

Computex Technology Solutions, an AVCtechnologies company, is an award-winning solutions provider that enables its clients to grow, differentiate and evolve their business via innovative and proven technology. Computex combines over 30 years of hands-on experience with unparalleled processes to deliver enterprise networking, cloud, and cybersecurity data center solutions, as well as managed services, to meet customers’ unique IT, business, and budgetary goals. To learn more, please visit: https://computex.net/ or call 888-335-2789.

About the Channel Company

The Channel Company enables breakthrough IT channel performance with our dominant media, engaging events, expert consulting and education, and innovative marketing services and platforms. As the channel catalyst, we connect and empower technology suppliers, solution providers, and end users. Backed by more than 30 years of unequalled channel experience, we draw from our deep knowledge to envision innovative new solutions for ever-evolving challenges in the technology marketplace. www.thechannelcompany.com
   
Follow The Channel Company: Twitter, LinkedIn, and Facebook.

© 2021. CRN is a registered trademark of The Channel Company, LLC. All rights reserved.

Press Contact

Jackie D’Andrea
Inkhouse for AVCtechnologies
avctechnologies@inkhouse.com

The Channel Company Contact

Jennifer Hogan
The Channel Company
[email protected]

• Revenues of $1.2 billion, net income of $45.3 million
• Earnings per diluted share of $0.79
• Absorption ratio 122.6%
• Economic recovery from COVID-19 impact continues, but supply chain issues remain
• Board declares cash dividend of $0.18 per share of Class A and Class B common stock

SAN ANTONIO, April 21, 2021 (GLOBE NEWSWIRE) —  Rush Enterprises, Inc. (NASDAQ: RUSHA & RUSHB), which operates the largest network of commercial vehicle dealerships in North America, today announced that for the quarter ended March 31, 2021, the Company achieved revenues of $1.232 billion and net income of $45.3 million, or $0.79 per diluted share, compared with revenues of $1.287 billion and net income of $23.1 million, or $0.41 per diluted share, in the quarter ended March 31, 2020. Additionally, the Company’s Board of Directors declared a cash dividend of $0.18 per share of Class A and Class B Common Stock, to be paid on June 10, 2021, to all shareholders of record as of May 10, 2021.

“We are proud of our strong financial results for the first quarter of 2021, which were primarily driven by the continuing recovery of the national economy and widespread activity across the market segments we support,” said W.M. “Rusty” Rush, Chairman, Chief Executive Officer and President of Rush Enterprises, Inc. “Gradually increasing demand for aftermarket products and services, and strong demand for Class 8 new and used trucks contributed to our strong quarter,” said Rush. “Further, in the first quarter, we maintained our strict focus on expense management, which helped us nearly double our net income over the first quarter of 2020,” he said. “While the COVID-19 pandemic is not over, business conditions have improved significantly and, consumer spending remains strong. We expect the general economic recovery to continue as more states re-open across the country and businesses return to operating at full or close-to-full capacity,” he added.

“Though our industry will likely be impacted by supply constraints over the next few quarters affecting the availability of new commercial vehicles, we believe there is strong demand and that our sales will increase throughout the year as vehicle availability increases. We also expect that our parts and service revenues will improve steadily throughout the year, and with a continued focus on expense management, we believe we will achieve strong financial results in 2021,” said Rush.

“As always, I would like to thank our employees for their dedication to our customers and for their superb performance, which directly lead to us having such a positive start to the year,” said Rush.

Operations

Aftermarket Products and Services

Aftermarket products and services accounted for approximately 63% of the Company’s total gross profit in the first quarter of 2021, with parts, service and collision center revenues reaching $415.7 million, down 2.9% compared to the first quarter of 2020. The Company achieved a quarterly absorption ratio of 122.6% in the first quarter of 2021, compared to 114.3% in the first quarter of 2020.  

“Our parts and services revenues are down slightly year-over-year, but they improved over the fourth quarter of 2020, and we expect to see gradual improvements as the year progresses,” said Rush. “Much of our quarter over quarter aftermarket growth can be attributed to parts sales related to the continued economic recovery, as well as healthy aftermarket activity from our refuse, construction and public sector customers. While service revenues are improving at a slower pace than parts revenues, we are currently adding service technicians to our network in anticipation of increased demand as the year progresses,” Rush said.

“It should also be noted that winter storms throughout Texas and the Southern United States negatively impacted revenue in the first quarter,” added Rush.

“Looking ahead, supply constraints are expected to impact the industry over the next two quarters. However, we intend to leverage the size of our nationwide dealership network and the scale of our nationwide parts inventory to attempt to mitigate parts supply chain issues as much as possible. Currently, we do not believe parts supply constraints will have a significant effect on our aftermarket revenues in 2021. We plan to continue to add technicians to our workforce with a focus on contract and preventive maintenance, which will offer not only expanded services for customers, but learning opportunities and a career path for less-experienced technicians. As the economic recovery continues, we believe aftermarket demand will grow throughout the remainder of 2021,” Rush noted.

Commercial Vehicle Sales

New U.S. Class 8 retail truck sales totaled 55,402 units in the first quarter of 2021, up 13.9% over the same time period last year, according to ACT Research. The Company sold 2,995 new Class 8 trucks in the first quarter, a decrease of 2.7% compared to the first quarter of 2020, and accounted for 5.4% of the new U.S. Class 8 truck market.

“In the first quarter, solid consumer spending and strong freight rates continued, and Class 8 truck manufacturers ramped up production capabilities. Our Class 8 new truck sales results were down slightly year-over-year, largely because we made some large fleet deliveries in the first quarter of 2020. However, we experienced a very strong first quarter in stock truck sales this year with robust activity from over-the-road customers, as well as vocational and construction customers nationwide,” Rush said.

“As we look ahead, we expect component manufacturers’ supply chain issues to impact second and third quarter new Class 8 truck sales across the industry. That said, there is currently strong demand for new Class 8 trucks and we believe sales will accelerate through the end of 2021. We also believe we are well positioned to increase our market share as the year progresses,” said Rush.

New U.S. Class 4 through 7 retail commercial vehicle sales totaled 62,088 units in the first quarter of 2021, up 13.5% over the same time period last year, according to ACT Research. The Company sold 2,334 Class 4-7 medium-duty commercial vehicles in the first quarter, a decrease of 28.5% compared to the first quarter of 2020, and accounted for 3.8% of the U.S. Class 4 through 7 commercial vehicle market.  

“Our first quarter Class 4-7 new commercial truck sales were down primarily due to decreased activity from our lease and rental and food service customers. In addition, production shutdowns from some of the manufacturers we represent, and component supplier constraints also negatively impacted our first quarter Class 4 through 7 new commercial vehicle sales. Looking ahead, demand for Class 4 through 7 new commercial vehicles appears to be strong and we expect our market share to increase throughout 2021,” Rush said.

The Company sold 1,924 used commercial vehicles in the first quarter of 2021, a 23.5% increase compared to the first quarter of 2020. “We estimate that used commercial vehicle values increased approximately 10% in the first quarter of 2021 compared to the fourth quarter of 2020, and demand remained strong due to production constraints of new commercial vehicles. Though demand and pricing may soften somewhat as more new commercial vehicles are available, we believe overall used commercial vehicle values and demand will remain strong through 2021. Despite limited supply of used commercial vehicles, we believe our inventory is positioned appropriately to meet the needs of the market,” said Rush.

Network Expansion

The Company bolstered its support of customers nationwide by adding Rush Truck Center – Phoenix East, a parts and service location, to its nationwide network. “We are proud to announce this new location, as it is a reflection of our steadfast commitment to support or customers and keep them up and running,” said Rush.

Financial Highlights

In the first quarter of 2021, the Company’s gross revenues totaled $1.232 billion, a 4.3% decrease from $1.287 billion in the first quarter of 2020. Net income for the quarter was $45.3 million, or $0.79 per diluted share, compared to net income of $23.1 million, or $0.41 per diluted share, in the quarter ended March 31, 2020.  

Aftermarket products and services revenues were $415.7 million in the first quarter of 2021, compared to $428.0 million in the first quarter of 2020. The Company delivered 2,995 new heavy-duty trucks, 2,334 new medium-duty commercial vehicles, 395 new light-duty commercial vehicles and 1,924 used commercial vehicles during the first quarter of 2021, compared to 3,078 new heavy-duty trucks, 3,264 new medium-duty commercial vehicles, 267 new light-duty commercial vehicles and 1,558 used commercial vehicles during the first quarter of 2020.

Rush Truck Leasing operates 45 PacLease and Idealease franchises in markets across the country with more than 8,500 trucks in its lease and rental fleet and more than 1,000 trucks under contract maintenance agreements. Lease and rental revenue declined 4.2% in the first quarter of 2021 compared to the first quarter of 2020. However, due to efficient management of the fleet and increased rental fleet utilization, our lease and rental gross profit increased 18.6% over the same time period.

During the first quarter of 2021, the Company repurchased $6.5 million of its common stock pursuant to its stock repurchase plan. In addition, the Company paid a cash dividend of $9.9 million during the first quarter. “In the first quarter, our disciplined adherence to expense management, as well as our laser focus on earning every sale possible, resulted in a record-high $316 million in cash and cash equivalents. With our strong balance sheet and free cash flow, we continue to return capital to our shareholders through our dividend and share repurchase programs while we also invest in our strategic initiatives, which will help us achieve our long-term growth goals,” said Rush.

Conference Call Information

Rush Enterprises will host its quarterly conference call to discuss earnings for the first quarter on Thursday, April 22, 2021, at 10 a.m. Eastern/9 a.m. Central. The call can be heard live by dialing 877-638-4557 (U.S.) or 914-495-8522 (International) or via the Internet at http://investor.rushenterprises.com/events.cfm.

For those who cannot listen to the live broadcast, the webcast will be available on our website at the above link until July 10, 2021. Listen to the audio replay until April 29, 2021 by dialing 855-859-2056 (U.S.) or 404-537-3406 (International) and entering the Conference ID 4369865.

About Rush Enterprises, Inc.

Rush Enterprises, Inc. is the premier solutions provider to the commercial vehicle industry. The Company owns and operates Rush Truck Centers, the largest network of commercial vehicle dealerships in North America, with more than 100 dealership locations in 22 states. These vehicle centers, strategically located in high traffic areas on or near major highways throughout the United States, represent truck and bus manufacturers, including Peterbilt, International, Hino, Isuzu, Ford, IC Bus and Blue Bird. They offer an integrated approach to meeting customer needs — from sales of new and used vehicles to aftermarket parts, service and collision center operations plus financing, insurance, leasing and rental. Rush Enterprises’ operations also provide vehicle upfitting, CNG fuel systems and vehicle telematics products. Additional information about Rush Enterprises’ products and services is available at www.rushenterprises.com. Follow our news on Twitter at @rushtruckcenter and on Facebook at facebook.com/rushtruckcenters.

Certain statements contained in this release, including those concerning current and projected market conditions, sales forecasts, market share forecasts, demand for the Company’s services, the effects the COVID-19 pandemic may have on our business and financial results, including future issuances of cash dividends and future repurchases of the Company’s common stock, are “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements only speak as of the date of this release and the Company assumes no obligation to update the information included in this release. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, competitive factors, general U.S. economic conditions, economic conditions in the new and used commercial vehicle markets, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, product introductions and acceptance, changes in industry practices, the duration and severity of the COVID-19 pandemic and governmental mandates in connection therewith, one-time events and other factors described herein and in filings made by the Company with the Securities and Exchange Commission, including in our annual report on Form 10-K for the fiscal year ended December 31, 2020.
In addition, the declaration and payment of cash dividends and authorization of future share repurchase programs remains at the sole discretion of the Company’s Board of Directors and the issuance of future dividends and authorization of future share repurchase programs will depend upon the Company’s financial results, cash requirements, future prospects, applicable law and other factors that may be deemed relevant by the Company’s Board of Directors. Although we believe that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect our actual business and financial results and could cause actual results to differ materially from those in the forward-looking statements. All future written and oral forward-looking statements by us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except for our ongoing obligations to disclose material information as required by the federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events.

Contact:                                                         
Rush Enterprises, Inc., San Antonio
Steven L. Keller, 830-302-5226

-Tables and Additional Information to Follow-

RUSH ENTERPRISES, INC. AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEETS


(In Thousands, Except Shares and Per Share Amounts)

		March 31,			December 31,
		2021			2020
		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	316,070		$	312,048
Accounts receivable, net		187,171			172,481
Inventories, net		877,876			858,291
Prepaid expenses and other		15,635			14,906
Total current assets		1,396,752			1,357,726
Property and equipment, net		1,183,437			1,203,719
Operating lease right-of-use assets, net		64,512			60,577
Goodwill, net		292,142			292,142
Other assets, net		71,580			71,229
Total assets	$	3,008,423		$	2,985,393
Liabilities and shareholders’ equity
Current liabilities:
Floor plan notes payable	$	550,304		$	511,786
Current maturities of long-term debt		135,523			141,672
Current maturities of finance lease obligations		26,448			26,373
Current maturities of operating lease obligations		10,329			10,196
Trade accounts payable		136,329			110,728
Customer deposits		42,966			74,209
Accrued expenses		126,407			151,830
Total current liabilities		1,028,306			1,026,794
Long-term debt, net of current maturities		369,587			387,982
Finance lease obligations, net of current maturities		93,584			90,740
Operating lease obligations, net of current maturities		55,229			51,155
Other long-term liabilities		34,424			34,246
Deferred income taxes, net		118,064			126,439
Shareholders’ equity:
Preferred stock, par value $.01 per share; 1,000,000 shares authorized; 0 shares outstanding in 2021 and 2020		–			–
Common stock, par value $.01 per share; 60,000,000 Class A shares and 20,000,000 Class B shares authorized; 42,885,268 Class A shares and 12,659,918 Class B shares outstanding in 2021; and 42,503,925 Class A shares and 12,470,308 Class B shares outstanding in 2020		558			551
Additional paid-in capital		449,790			437,646
Treasury stock, at cost: 12,999 Class A shares and 228,849 Class B shares in 2021; and 10,335 Class A shares and 73,437 Class B shares in 2020		(9,362	)		(2,879	)
Retained earnings		867,119			831,850
Accumulated other comprehensive income		1,124			869
Total shareholders’ equity		1,309,229			1,268,037
Total liabilities and shareholders’ equity	$	3,008,423		$	2,985,393

RUSH ENTERPRISES, INC. AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF OPERATIONS


(In Thousands, Except Per Share Amounts)
(Unaudited)

		Three Months Ended March 31,
		2021			2020
		(Unaudited)			(Unaudited)
Revenues
New and used commercial vehicle sales	$	747,719		$	789,554
Aftermarket products and services sales		415,737			427,978
Lease and rental		58,227			60,781
Finance and insurance		6,465			4,467
Other		3,658			3,883
Total revenue		1,231,806			1,286,663
Cost of products sold
New and used commercial vehicle sales		677,092			728,539
Aftermarket products and services sales		261,842			271,415
Lease and rental		48,058			52,208
Total cost of products sold		986,992			1,052,162
Gross profit		244,814			234,501
Selling, general and administrative expense		174,955			185,074
Depreciation and amortization expense		13,726			14,330
Gain on sale of assets		92			100
Operating income		56,225			35,197
Other income		919			1,241
Interest expense, net		507			4,769
Income before taxes		56,637			31,669
Income tax provision		11,304			8,562
Net income	$	45,333		$	23,107
Earnings per common share:
Basic	$	0.82		$	0.42
Diluted	$	0.79		$	0.41
Weighted average shares outstanding:
Basic		55,567			54,727
Diluted		57,734			55,989
Dividends declared per common share	$	0.18		$	0.13

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as Adjusted net income, Adjusted total debt, Adjusted net (cash) debt, EBITDA, Adjusted EBITDA, Free cash flow, Adjusted free cash flow and Adjusted invested capital, which exclude certain items disclosed in the attached financial tables. The Company provides reconciliations of these measures to the most directly comparable GAAP measures.

Management believes the presentation of these non-GAAP financial measures provides useful information about the results of operations of the Company for the current and past periods. Management believes that investors should have the same information available to them that management uses to assess the Company’s operating performance and capital structure. These non-GAAP financial measures should not be considered in isolation or as a substitute for the most comparable GAAP financial measures. Investors are cautioned that non-GAAP financial measures utilized by the Company may not be comparable to similarly titled non-GAAP financial measures used by other companies.

		Three Months Ended
Commercial Vehicle Sales Revenue     (in thousands)		March 31, 2021			March 31, 2020
New heavy-duty vehicles	$	449,997		$	470,784
New medium-duty vehicles (including bus sales revenue)		188,218			243,972
New light-duty vehicles		18,407			11,498
Used vehicles		88,343			59,710
Other vehicles		2,754			3,590
Absorption Ratio		122.6%			114.3%

Absorption Ratio


Management uses several performance metrics to evaluate the performance of its commercial vehicle dealerships and considers Rush Truck Centers’ “absorption ratio” to be of critical importance. Absorption ratio is calculated by dividing the gross profit from the parts, service and collision center departments by the overhead expenses of all of a dealership’s departments, except for the selling expenses of the new and used commercial vehicle departments and carrying costs of new and used commercial vehicle inventory. When 100% absorption is achieved, then gross profit from the sale of a commercial vehicle, after sales commissions and inventory carrying costs, directly impacts operating profit.

Debt Analysis    (in thousands)		March 31, 2021			March 31, 2020
Floor plan notes payable	$	550,304		$	888,680
Current maturities of long-term debt		135,523			183,727
Current maturities of finance lease obligations		26,448			23,339
Long-term debt, net of current maturities		369,587			426,727
Finance lease obligations, net of current maturities		93,584			75,300
Total Debt (GAAP)		1,175,446			1,597,773
Adjustments:
Debt related to lease & rental fleet		(581,692)			(648,054)
Floor plan notes payable		(550,304)			(888,680)
Adjusted Total Debt (Non-GAAP)		43,450			61,039
Adjustment:
Cash and cash equivalents		(316,070)			(137,540)
Adjusted Net Debt (Cash) (Non-GAAP)	$	(272,620)		$	(76,501)

Management uses “Adjusted Total Debt” to reflect the Company’s estimated financial obligations less debt related to lease and rental fleet (L&RFD) and floor plan notes payable (FPNP), and “Adjusted Net (Cash) Debt” to present the amount of Adjusted Total Debt net of cash and cash equivalents on the Company’s balance sheet. The FPNP is used to finance the Company’s new and used inventory, with its principal balance changing daily as vehicles are purchased and sold and the sale proceeds are used to repay the notes. Consequently, in managing the business, management views the FPNP as interest bearing accounts payable, representing the cost of acquiring the vehicle that is then repaid when the vehicle is sold, as the Company’s credit agreements require it to repay loans used to purchase vehicles when such vehicles are sold. The Company’s lease & rental fleet are fully financed and are either (i) leased to customers under long-term lease arrangements or (ii), to a lesser extent, dedicated to the Company’s rental business. In both cases, the lease and rental payments received fully cover the capital costs of the lease & rental fleet (i.e., the interest expense on the borrowings used to acquire the vehicles and the depreciation expense associated with the vehicles), plus a profit margin for the Company.   The Company believes excluding the FPNP and L&RFD from the Company’s total debt for this purpose provides management with supplemental information regarding the Company’s capital structure and leverage profile and assists investors in performing analysis that is consistent with financial models developed by Company management and research analysts. “Adjusted Total Debt” and “Adjusted Net (Cash) Debt” are both non-GAAP financial measures and should be considered in addition to, and not as a substitute for, the Company’s debt obligations, as reported in the Company’s consolidated balance sheet in accordance with U.S. GAAP. Additionally, these non-GAAP measures may vary among companies and may not be comparable to similarly titled non-GAAP measures used by other companies.

		Twelve Months Ended
EBITDA    (in thousands)		March 31, 2021			March 31, 2020
Net Income (GAAP)	$	137,113		$	127,586
Provision for income taxes		39,578			44,048
Interest expense		4,752			26,218
Depreciation and amortization		56,852			56,777
(Gain) loss on sale of assets		(1,844)			59
EBITDA (Non-GAAP)		236,451			254,688
Adjustment:
Interest expense associated with FPNP		(3,808)			(25,279)
Adjusted EBITDA (Non-GAAP)	$	232,643		$	229,409

The Company presents EBITDA and Adjusted EBITDA, for the twelve months ended each period presented, as additional information about its operating results. The presentation of Adjusted EBITDA that excludes the addition of interest expense associated with FPNP to EBITDA is consistent with management’s presentation of Adjusted Total Debt, in each case reflecting management’s view of interest expense associated with the FPNP as an operating expense of the Company, and to provide management with supplemental information regarding operating results and to assist investors in performing analysis that is consistent with financial models developed by management and research analyst. “EBITDA” and “Adjusted EBITDA” are both non-GAAP financial measures and should be considered in addition to, and not as a substitute for, net income of the Company, as reported in the Company’s consolidated statements of income in accordance with U.S. GAAP. Additionally, these non-GAAP measures may vary among companies and may not be comparable to similarly titled non-GAAP measures used by other companies.

		Twelve Months Ended
Free Cash Flow    (in thousands)		March 31, 2021			March 31, 2020
Net cash provided by operations (GAAP)	$	664,308		$	599,342
Acquisition of property and equipment		(119,644)			(279,411)
Free cash flow (Non-GAAP)		544,664			319,931
Adjustments:
Payments on floor plan financing, net		(238,495)			(177,997)
Proceeds from L&RFD		80,333			200,409
Principal payments on L&RFD		(179,423)			(172,412)
Non-maintenance capital expenditures		6,918			36,486
Adjusted Free Cash Flow (Non-GAAP)	$	213,997		$	206,417

“Free Cash Flow” and “Adjusted Free Cash Flow” are key financial measures of the Company’s ability to generate cash from operating its business. Free Cash Flow is calculated by subtracting the acquisition of property and equipment included in the Cash flows from investing activities from Net cash provided by (used in) operating activities. For purposes of deriving Adjusted Free Cash Flow from the Company’s operating cash flow, Company management makes the following adjustments: (i) adds back draws (or subtracts payments) on the floor plan financing that are included in Cash flows from financing activities as their purpose is to finance the vehicle inventory that is included in Cash flows from operating activities; (ii) adds back proceeds from notes payable related specifically to the financing of the lease and rental fleet that are reflected in Cash flows from financing activities; (iii) subtracts draws on floor plan financing, net and proceeds from L&RFD related to business acquisition assets that are included in Cash flows from investing activities; (iv) subtracts principal payments on notes payable related specifically to the financing of the lease and rental fleet that are included in Cash flows from financing activities; and (v) adds back non-maintenance capital expenditures that are for growth and expansion (i.e. building of new dealership facilities) that are not considered necessary to maintain the current level of cash generated by the business. “Free Cash Flow” and “Adjusted Free Cash Flow” are both presented so that investors have the same financial data that management uses in evaluating the Company’s cash flows from operating activities. “Free Cash Flow” and “Adjusted Free Cash Flow” are both non-GAAP financial measures and should be considered in addition to, and not as a substitute for, net cash provided by (used in) operations of the Company, as reported in the Company’s consolidated statement of cash flows in accordance with U.S. GAAP. Additionally, these non-GAAP measures may vary among companies and may not be comparable to similarly titled non-GAAP measures used by other companies.

Invested Capital (in thousands)		March 31, 2021			March 31, 2020
Total Shareholders’ equity (GAAP)	$	1,309,229		$	1,165,476
Adjusted net debt (cash) (Non-GAAP)		(272,620)			(76,501)
Adjusted Invested Capital (Non-GAAP)	$	1,036,609		$	1,088,975

“Adjusted Invested Capital” is a key financial measure used by the Company to calculate its return on invested capital. For purposes of this analysis, management excludes L&RFD, FPNP, and cash and cash equivalents, for the reasons provided in the debt analysis above and uses Adjusted Net Debt in the calculation. The Company believes this approach provides management a more accurate picture of the Company’s leverage profile and capital structure and assists investors in performing analysis that is consistent with financial models developed by Company management and research analysts. “Adjusted Net (Cash) Debt” and “Adjusted Invested Capital” are both non-GAAP financial measures. Additionally, these non-GAAP measures may vary among companies and may not be comparable to similarly titled non-GAAP measures used by other companies.