LOS ANGELES--(BUSINESS WIRE)--CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank, doing business as "CBB Bank" (the "Bank"), announced today net income of $7.0 million for the fourth quarter 2023 or $0.66 per diluted share, an increase of 5.0% compared to $6.7 million, or $0.63 per diluted share, in the prior quarter and a decrease of 4.5% compared to $7.3 million, or $0.70 per diluted share, in the same period last year.
Additionally, CBB reported net income for the year ended December 31, 2023 of $28.9 million, or $2.73 per diluted share, an increase of 3.4% from the $27.9 million, or $2.68 per diluted share, of net income for the year ended December 31, 2022.
OVERALL RESULTS
Net income for the fourth quarter 2023 increased from the prior quarter primarily due to higher gain on sale of SBA loans and lower noninterest expenses. The return on average assets for the fourth quarter 2023 was 1.54% compared to 1.46% for the third quarter 2023 and 1.64% for the fourth quarter 2022. The return on average equity for the fourth quarter 2023 was 11.94%, compared to 11.66% for the third quarter 2023 and 14.04% for the fourth quarter 2022. The net interest margin for the fourth quarter 2023 was 3.86%, compared to 4.01% for the third quarter 2023 and 4.59% for the fourth quarter 2022. The efficiency ratio for the fourth quarter 2023 was 49.45%, compared to 52.23% for the third quarter 2023 and 51.41% for the fourth quarter 2022.
James Hong, President and CEO, commented, "We are pleased to announce that the Bank's performance was solid in 2023 with strong liquidity, credit, and capital metrics. While the Bank has sold comparatively less SBA loans in 2023 than in 2022, the higher yield on SBA loans retained by the Bank contributed to a comparatively higher net interest income contributing to overall profitability."
INCOME STATEMENT
Net Interest Income
Net interest income for the fourth quarter 2023 was $17.2 million, a decrease of $846 thousand, or 4.7%, from the third quarter 2023, and a decrease of $2.9 million, or 14.5%, from the fourth quarter 2022. The decrease in net interest income compared with both the third quarter 2023 and the fourth quarter 2022 was primarily due to the impact of relatively higher increases in interest expenses on deposits.
Net Interest Margin
The net interest margin for the fourth quarter 2023 was 3.86%, compared to 4.01% for the third quarter 2023 and 4.59% for the fourth quarter 2022. The decrease in the net interest margin from the prior quarter and from the same quarter of 2022 is due primarily to the rising cost of funds. The cost of funds for the fourth quarter 2023 increased to 3.20% compared to 2.91% for the third quarter 2023 and 1.19% for the fourth quarter 2022.
Provision for Credit Losses
No provision for credit losses was recorded for the fourth or the third quarter 2023 or for the fourth quarter 2022. Please refer to financial tables in this press release for additional information and trends.
Noninterest Income
Noninterest income in the fourth quarter 2023 was $2.0 million, an increase of $504 thousand compared to $1.46 million for the third quarter 2023, and an increase of $1.0 million compared to $0.95 million in the fourth quarter 2022. The quarter-over-quarter increase in noninterest income was primarily the result of higher gain on sale of loans. The Bank sold $21.7 million in SBA loans with an average premium of 6.7% during the fourth quarter 2023 compared to sale of $9.2 million in SBA loans with an average premium of 8.3% during the third quarter 2023. There was no sale of loans during the fourth quarter 2022.
Noninterest Expense
Noninterest expense for the fourth quarter 2023 was $9.5 million, compared to $10.2 million for the third quarter 2023 and $10.8 million for the fourth quarter 2022. Total noninterest expenses for the full year 2023 were $40.1 million compared to $43.2 million for the full year 2022.
Salaries and employee benefits expenses totaled $5.4 million for the fourth quarter 2023 compared to $5.6 million for the third quarter 2023 and $6.2 million for the fourth quarter 2022. Salaries and employee benefits expenses for 2023 were $22.6 million compared to $27.2 million in 2022.
Income Taxes
The Company's effective tax rate for fourth quarter 2023 was 27.6% compared to 28.3% for third quarter 2023 and 28.2% for fourth quarter 2022. The effective tax rate for the year 2023 was 28.2% compared to 28.3% for 2022.
BALANCE SHEET
Investment Securities
Investment securities were $59.9 million at December 31, 2023, a decrease of $1.7 million or 2.8% at September 30, 2023, and a decrease of $12.7 million or 17.5% from December 31, 2022. The decreases were due to principal paydowns and an absence of portfolio additions during 2023. The unrealized losses on available for sale investments were approximately $0.4 million at December 31, 2023, $1.1 million at September 30, 2023, and $1.1 million at December 31, 2022, net of taxes. Management believes that the Bank currently has adequate liquidity and does not need to sell securities for liquidity purposes.
Loans Receivable
Loans receivable (including loans held-for-sale) at December 31, 2023, was $1.4 billion, an increase of $1.7 million, or 0.1% from September 30, 2023, and a decrease of $93.4 million, or 6.2%, from December 31, 2022. The slight rise in loans receivable since last quarter, paired with the reduction from the previous year, reflects the challenging loan origination landscape, influenced by diminished demand amid the prevailing high-interest rate environment.
Allowance for Credit Losses and Asset Quality
The allowance for credit losses at December 31, 2023 was $15.3 million or 1.27% of loans held-for-investment, compared to $15.6 million at September 30, 2023, or 1.27% of loans held-for-investment, and compared to $15.5 million at December 31, 2022, or 1.21% of total loans held-for-investment. Total Nonperforming assets at December 31, 2023 was $2.5 million, compared to $0.7 million at September 30, 2023, and $6.8 million at December 31, 2022. The coverage ratio of allowance for credit losses to nonperforming assets exceeded 615% at December 31, 2023.
SBA Loans Held-for-Sale
Total SBA loans held-for-sale at December 31, 2023, was $218.3 million, compared to $219.4 million at September 30 2023, and $230.4 million at December 31, 2022. We continue to assess SBA loan market premiums and plan to sell loans when it is advantageous to do so. See comments under "Noninterest Income," and Table 7 for additional SBA loan origination and sale data.
Deposits
Total deposits were $1.5 billion at December 31, 2023, down $95.7 million, or 6.2%, from September 30, 2023, and down $84.7 million, or 5.5%, from December 31, 2022. DDAs were 21.6% of total deposits at December 31, 2023, compared to 26.6% at September 30, 2023, and 30.0% at December 31, 2022. NOW and MMDA deposits comprised 16.3% of total deposits at December 31, 2023 compared to 14.7% at September 30, 2023, and 17.9% at December 31, 2022. The quarter-over-quarter and year-over-year declines in DDAs can be attributed to the higher interest rate environment. Depositors were eager to capitalize on the rising interest rates, leading to a decrease in DDAs and a simultaneous increase in CD and MMDA balances.
As of December 31, 2023, the average time deposits increased $4.6 million, or 0.6%, quarter-over-quarter, but increased $199.1 million, or 31.81%, from December 31, 2022. The change in deposit composition reflects depositors' preferences for higher paying term deposits over money market and checking accounts as rates have risen significantly since March 2022. The primary reason for the decrease in noninterest-bearing deposits during 2023 was a decline in escrow-related deposits as the higher interest rate environment caused a significant slowdown in business activities for that sector.
Borrowings
The Bank has maintained $50.0 million of Federal Home Loan Bank advances since September 30, 2022. The blended cost of FHLB advances was 0.94% as of December 31, 2023.
Capital
Stockholders' equity was $235.7 million at December 31, 2023 representing an increase of $6.8 million, or 3.0%, from $228.9 million at September 30, 2023. Tangible book value per share at December 31, 2023, was $22.03, compared with $21.39 at September 30, 2023, an increase of $0.64, or 3.0%, per share.
Each of the Company's and the Bank's regulatory capital ratios increased at December 31, 2023 when compared to September 30, 2023 and December 31, 2022. Capital ratios continue to exceed the minimum levels required to be considered "Well Capitalized" under the applicable regulatory capital rules and in compliance with the fully phased-in Basel III requirements as shown on Table 11 in this press release.
The Common Equity Tier 1 Risked-Based Capital Ratios at December 31, 2023, were 18.08% and 18.05% for the Company and the Bank, respectively, and Total Capital Ratios were 19.30% and 19.27% for the Company and the Bank, respectively. The Common Equity Tier 1 Risked-Based Capital Ratios at December 31, 2022, were 14.92% and 14.87% for the Company and the Bank, respectively, and Total Capital Ratios were 16.08% and 16.03% for the Company and the Bank, respectively.
About CBB Bancorp, Inc.:
CBB Bancorp, Inc. is the holding company of Commonwealth Business Bank, a full-service commercial bank which specializes in loans to small-to-medium-sized businesses and does business as "CBB Bank." As of December 31, 2023, the Bank had eleven full-service banking offices in Los Angeles and Orange Counties in California, Dallas County in Texas and Honolulu, Hawaii; two SBA regional offices in Los Angeles and Dallas Counties; and loan production offices in Georgia and Washington. For additional information, please go to www.cbb-bank.com under the tab "About Us" and select "Investors Relations" to see the 4Q 2023 Overview.
FORWARD-LOOKING STATEMENTS:
This press release includes forward-looking statements 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. CBB Bancorp, Inc. (the "Company") intends that such forward-looking statements be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described herein are necessarily subject to risks and uncertainties that may cause actual results to differ materially and adversely from those described herein. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Factors that might cause actual results to differ materially from those presented, either expressed or implied, in this news release include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.
The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances, except to the extent required by law.
Schedules and Financial Data: All tables and data to follow
STATEMENT OF INCOME AND PERFORMANCE HIGHLIGHT (Unaudited) - Table 1 (Dollars in thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||||||||||||
| December 31, | September 30, | $ | % | December 31, | $ | % | December 31, | December 31, | $ | % | ||||||||||||||||||||||||||||
2023 | 2023 | Change | Change | 2022 | Change | Change | 2023 | 2022 | Change | Change | ||||||||||||||||||||||||||||
| Interest income | $ | 29,624 | $ | 29,450 | $ | 174 | 0.6 | % | $ | 24,744 | $ | 4,880 | 19.7 | % | $ | 114,986 | $ | 80,917 | $ | 34,069 | 42.1 | % | ||||||||||||||||
| Interest expense | 12,462 | 11,442 | 1,020 | 8.9 | % | 4,677 | 7,785 | 166.5 | % | 42,002 | 9,762 | 32,240 | 330.3 | % | ||||||||||||||||||||||||
| Net interest income | 17,162 | 18,008 | (846 | ) | (4.7 | %) | 20,067 | (2,905 | ) | (14.5 | %) | 72,984 | 71,155 | 1,829 | 2.6 | % | ||||||||||||||||||||||
| Provision for credit losses | - | - | - | - | - | - | 100.0 | % | - | 1,343 | (1,343 | ) | (100.0 | %) | ||||||||||||||||||||||||
| Net interest income after provision for credit losses | 17,162 | 18,008 | (846 | ) | (4.7 | %) | 20,067 | (2,905 | ) | (14.5 | %) | 72,984 | 69,812 | 3,172 | 4.5 | % | ||||||||||||||||||||||
| Gain on sale of loans | 838 | 419 | 419 | 100.0 | % | - | 838 | 100.0 | % | 3,209 | 7,966 | (4,757 | ) | (59.7 | %) | |||||||||||||||||||||||
| SBA servicing fee income, net | 690 | 639 | 51 | 8.0 | % | 491 | 199 | 40.5 | % | 2,423 | 2,447 | (24 | ) | (1.0 | %) | |||||||||||||||||||||||
| Service charges and other income | 436 | 402 | 34 | 8.5 | % | 457 | (21 | ) | (4.6 | %) | 1,643 | 1,935 | (292 | ) | (15.1 | %) | ||||||||||||||||||||||
| Noninterest income | 1,964 | 1,460 | 504 | 34.5 | % | 948 | 1,016 | 107.2 | % | 7,275 | 12,348 | (5,073 | ) | (41.1 | %) | |||||||||||||||||||||||
| Salaries and employee benefits | 5,356 | 5,569 | (213 | ) | (3.8 | %) | 6,233 | (877 | ) | (14.1 | %) | 22,585 | 27,153 | (4,568 | ) | (16.8 | %) | |||||||||||||||||||||
| Occupancy and equipment | 1,128 | 1,103 | 25 | 2.3 | % | 1,133 | (5 | ) | (0.4 | %) | 4,477 | 4,485 | (8 | ) | (0.2 | %) | ||||||||||||||||||||||
| Marketing expense | 250 | 475 | (225 | ) | (47.4 | %) | 434 | (184 | ) | (42.4 | %) | 1,508 | 1,919 | (411 | ) | (21.4 | %) | |||||||||||||||||||||
| Professional expense | 360 | 443 | (83 | ) | (18.7 | %) | 418 | (58 | ) | (13.9 | %) | 1,693 | 1,869 | (176 | ) | (9.4 | %) | |||||||||||||||||||||
| Merger related expense | 1 | 5 | (4 | ) | (80.0 | %) | 7 | (6 | ) | (85.7 | %) | 17 | 177 | (160 | ) | (90.4 | %) | |||||||||||||||||||||
| Other expenses | 2,362 | 2,574 | (212 | ) | (8.2 | %) | 2,579 | (217 | ) | (8.4 | %) | 9,804 | 7,614 | 2,190 | 28.8 | % | ||||||||||||||||||||||
| Noninterest expense | 9,457 | 10,169 | (712 | ) | (7.0 | %) | 10,804 | (1,347 | ) | (12.5 | %) | 40,084 | 43,217 | (3,133 | ) | (7.2 | %) | |||||||||||||||||||||
| Income before income tax provision | 9,669 | 9,299 | 370 | 4.0 | % | 10,211 | (542 | ) | (5.3 | %) | 40,175 | 38,943 | 1,232 | 3.2 | % | |||||||||||||||||||||||
| Income tax provision | 2,670 | 2,630 | 40 | 1.5 | % | 2,882 | (212 | ) | (7.4 | %) | 11,315 | 11,023 | 292 | 2.6 | % | |||||||||||||||||||||||
| Net income | $ | 6,999 | $ | 6,669 | $ | 330 | 4.9 | % | $ | 7,329 | $ | (330 | ) | (4.5 | %) | $ | 28,860 | $ | 27,920 | $ | 940 | 3.4 | % | |||||||||||||||
| Effective tax rate | 27.6 | % | 28.3 | % | (0.7 | %) | (2.4 | %) | 28.2 | % | (0.6 | %) | (2.2 | %) | 28.2 | % | 28.3 | % | (0.1 | %) | (0.5 | %) | ||||||||||||||||
| Outstanding number of shares | 10,588,136 | 10,588,136 | - | - | 10,569,601 | 18,535 | 0.2 | % | 10,588,136 | 10,569,601 | 18,535 | 0.2 | % | |||||||||||||||||||||||||
| Weighted average shares for basic EPS | 10,588,136 | 10,588,136 | - | - | 10,569,601 | 18,535 | 0.2 | % | 10,585,191 | 10,421,546 | 163,645 | 1.6 | % | |||||||||||||||||||||||||
| Weighted average shares for diluted EPS | 10,588,937 | 10,594,155 | (5,218 | ) | (0.0 | %) | 10,600,053 | (11,116 | ) | (0.1 | %) | 10,594,055 | 10,509,800 | 84,255 | 0.8 | % | ||||||||||||||||||||||
| Basic EPS | $ | 0.66 | $ | 0.63 | $ | 0.03 | 4.8 | % | $ | 0.70 | $ | (0.04 | ) | (5.7 | %) | $ | 2.73 | $ | 2.68 | $ | 0.05 | 1.9 | % | |||||||||||||||
| Diluted EPS | $ | 0.66 | $ | 0.63 | $ | 0.03 | 4.8 | % | $ | 0.70 | $ | (0.04 | ) | (5.7 | %) | $ | 2.72 | $ | 2.66 | $ | 0.06 | 2.3 | % | |||||||||||||||
| Return on average assets | 1.54 | % | 1.46 | % | 0.08 | % | 5.5 | % | 1.64 | % | (0.10 | %) | (6.1 | %) | 1.59 | % | 1.56 | % | 0.03 | % | 1.9 | % | ||||||||||||||||
| Return on average equity | 11.94 | % | 11.66 | % | 0.28 | % | 2.4 | % | 14.04 | % | (2.10 | %) | (15.0 | %) | 12.95 | % | 14.09 | % | (1.14 | %) | (8.1 | %) | ||||||||||||||||
| Efficiency ratio¹ | 49.45 | % | 52.23 | % | (2.78 | %) | (5.3 | %) | 51.41 | % | (1.96 | %) | (3.8 | %) | 49.94 | % | 51.76 | % | (1.82 | %) | (3.5 | %) | ||||||||||||||||
| Yield on interest-earning assets² | 6.65 | % | 6.55 | % | 0.10 | % | 1.5 | % | 5.66 | % | 0.99 | % | 17.5 | % | 6.48 | % | 4.64 | % | 1.84 | % | 39.7 | % | ||||||||||||||||
| Cost of funds | 3.20 | % | 2.91 | % | 0.29 | % | 10.0 | % | 1.19 | % | 2.01 | % | 168.9 | % | 2.68 | % | 0.62 | % | 2.06 | % | 332.3 | % | ||||||||||||||||
| Net interest margin² | 3.86 | % | 4.01 | % | (0.15 | %) | (3.7 | %) | 4.59 | % | (0.73 | %) | (15.9 | %) | 4.12 | % | 4.08 | % | 0.04 | % | 1.0 | % | ||||||||||||||||
¹ Represents the ratio of noninterest expense less other real estate owned operations to the sum of net interest income before provision for credit losses and total noninterest income. | ||||||||||||||||||||||||||||||||||||||
² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate | ||||||||||||||||||||||||||||||||||||||
BALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2 (Dollars in thousands) | ||||||||||||||||||||||||
| December 31, | September 30, | $ | % | December 31, | $ | % | ||||||||||||||||||
2023 | 2023 | Change | Change | 2022 | Change | Change | ||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Cash and due from banks | $ | 14,282 | $ | 11,188 | $ | 3,094 | 27.7 | % | $ | 20,134 | $ | (5,852 | ) | (29.1 | %) | |||||||||
| Interest-earning deposits at the FRB and other banks | 233,255 | 335,016 | (101,761 | ) | (30.4 | %) | 170,839 | 62,416 | 36.5 | % | ||||||||||||||
| Investment securities¹ | 59,883 | 61,617 | (1,734 | ) | (2.8 | %) | 72,550 | (12,667 | ) | (17.5 | %) | |||||||||||||
| Loans held-for-sale | 218,258 |
| 219,355 | (1,097 | ) | (0.5 | %) | 230,431 | (12,173 | ) | (5.3 | %) | ||||||||||||
| Loans held-for-investment | 1,204,009 | 1,201,230 | 2,779 | 0.2 | % | 1,285,278 | (81,269 | ) | (6.3 | %) | ||||||||||||||
| Less: Allowance for credit losses ("ACL") | (15,291 | ) | (15,284 | ) | (7 | ) | (0.0 | %) | (15,525 | ) | 234 | 1.5 | % | |||||||||||
| Loans held-for-investment, net | 1,188,718 | 1,185,946 | 2,772 | 0.2 | % | 1,269,753 | (81,035 | ) | (6.4 | %) | ||||||||||||||
| Other real estate owned ("OREO") | 55 | 55 | - | - | - | 55 | 100.0 | % | ||||||||||||||||
| Restricted stock investments | 11,011 | 11,011 | - | - | 10,121 | 890 | 8.8 | % | ||||||||||||||||
| Servicing assets | 7,673 | 7,873 | (200 | ) | (2.5 | %) | 9,232 | (1,559 | ) | (16.9 | %) | |||||||||||||
| Goodwill | 2,185 | 2,185 | - | - | 2,185 | - | - | |||||||||||||||||
| Intangible assets | 255 | 267 | (12 | ) | (4.5 | %) | 303 | (48 | ) | (15.8 | %) | |||||||||||||
| Other assets | 24,838 | 24,799 | 39 | 0.2 | % | 26,939 | (2,101 | ) | (7.8 | %) | ||||||||||||||
| Total assets | $ | 1,760,413 | $ | 1,859,312 | $ | (98,899 | ) | (5.3 | %) | $ | 1,812,487 | $ | (52,074 | ) | (2.9 | %) | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||
| Noninterest-bearing | $ | 305,923 | $ | 406,033 | $ | (100,110 | ) | (24.7 | %) | $ | 451,651 | $ | (145,728 | ) | (32.3 | %) | ||||||||
| Interest-bearing | 1,147,662 | 1,143,257 | 4,405 | 0.4 | % | 1,086,599 | 61,063 | 5.6 | % | |||||||||||||||
| Total deposits | 1,453,585 | 1,549,290 | (95,705 | ) | (6.2 | %) | 1,538,250 | (84,665 | ) | (5.5 | %) | |||||||||||||
| FHLB advances and other borrowing | 50,000 | 50,000 | - | - | 50,000 | - | - | |||||||||||||||||
| Other liabilities | 21,114 | 31,141 | (10,027 | ) | (32.2 | %) | 14,706 | 6,408 | 43.6 | % | ||||||||||||||
| Total liabilities | 1,524,699 | 1,630,431 | (105,732 | ) | (6.5 | %) | 1,602,956 | (78,257 | ) | (4.9 | %) | |||||||||||||
| Stockholders' Equity | 235,714 | 228,881 | 6,833 | 3.0 | % | 209,531 | 26,183 | 12.5 | % | |||||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 1,760,413 | $ | 1,859,312 | $ | (98,899 | ) | (5.3 | %) | $ | 1,812,487 | $ | (52,074 | ) | (2.9 | %) | ||||||||
| CAPITAL RATIOS | ||||||||||||||||||||||||
| Leverage ratio | ||||||||||||||||||||||||
| Company | 12.98 | % | 12.53 | % | 0.45 | % | 3.6 | % | 11.71 | % | 1.27 | % | 10.8 | % | ||||||||||
| Bank | 12.96 | % | 12.50 | % | 0.46 | % | 3.7 | % | 11.67 | % | 1.29 | % | 11.0 | % | ||||||||||
| Common equity tier 1 risk-based capital ratio | ||||||||||||||||||||||||
| Company | 18.08 | % | 17.61 | % | 0.47 | % | 2.6 | % | 14.92 | % | 3.16 | % | 21.2 | % | ||||||||||
| Bank | 18.05 | % | 17.57 | % | 0.48 | % | 2.7 | % | 14.87 | % | 3.18 | % | 21.4 | % | ||||||||||
| Tier 1 risk-based capital ratio | ||||||||||||||||||||||||
| Company | 18.08 | % | 17.61 | % | 0.47 | % | 2.6 | % | 14.92 | % | 3.16 | % | 21.2 | % | ||||||||||
| Bank | 18.05 | % | 17.57 | % | 0.48 | % | 2.7 | % | 14.87 | % | 3.18 | % | 21.4 | % | ||||||||||
| Total risk-based capital ratio | ||||||||||||||||||||||||
| Company | 19.30 | % | 18.83 | % | 0.46 | % | 2.5 | % | 16.08 | % | 3.21 | % | 20.0 | % | ||||||||||
| Bank | 19.27 | % | 18.79 | % | 0.48 | % | 2.5 | % | 16.03 | % | 3.24 | % | 20.2 | % | ||||||||||
| Tangible book value per share | $ | 22.03 | $ | 21.39 | $ | 0.64 | 3.0 | % | $ | 19.59 | $ | 2.44 | 12.5 | % | ||||||||||
| Loans Held for Investments-to-Deposit ("LHFITD") ratio | 82.83 | % | 77.53 | % | 5.30 | % | 6.8 | % | 83.55 | % | (0.72 | %) | (0.9 | %) | ||||||||||
| Net Loan-to-Deposit ("LTD") ratio | 96.79 | % | 90.71 | % | 6.08 | % | 6.7 | % | 97.53 | % | (0.74 | %) | (0.8 | %) | ||||||||||
| Nonperforming assets | $ | 2,484 | $ | 673 | $ | 1,811 | 269.1 | % | $ | 6,807 | $ | (4,323 | ) | (63.5 | %) | |||||||||
| Nonperforming assets as a % of loans held-for-investment | 0.21 | % | 0.06 | % | 0.15 | % | 250.0 | % | 0.53 | % | (0.32 | %) | (60.4 | %) | ||||||||||
| ACL as a % of loans held-for-investment | 1.27 | % | 1.27 | % | 0.00 | % | 0.00 | % | 1.21 | % | 0.06 | % | 5.0 | % | ||||||||||
| ¹ Includes AFS and HTM | ||||||||||||||||||||||||
FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3 (Dollars in thousands, except per share amounts) | |||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||||
2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||||
| Interest income | $ | 29,624 | $ | 29,450 | $ | 28,664 | $ | 27,248 | $ | 24,744 | |||||||||||
| Interest expense | 12,462 | 11,442 | 9,930 | 8,168 | 4,677 | ||||||||||||||||
| Net interest income | 17,162 | 18,008 | 18,734 | 19,080 | 20,067 | ||||||||||||||||
| Provision for credit losses | - | - | - | - | - | ||||||||||||||||
| Net interest income after provision for credit losses | 17,162 | 18,008 | 18,734 | 19,080 | 20,067 | ||||||||||||||||
| Gain on sale of loans | 838 | 419 | 1,952 | - | - | ||||||||||||||||
| SBA servicing fee income, net | 690 | 639 | 440 | 654 | 491 | ||||||||||||||||
| Service charges and other income | 436 | 402 | 407 | 398 | 457 | ||||||||||||||||
| Noninterest income | 1,964 | 1,460 | 2,799 | 1,052 | 948 | ||||||||||||||||
| Salaries and employee benefits | 5,356 | 5,569 | 5,581 | 6,079 | 6,233 | ||||||||||||||||
| Occupancy and equipment | 1,128 | 1,103 | 1,122 | 1,124 | 1,133 | ||||||||||||||||
| Marketing expense | 250 | 475 | 409 | 374 | 434 | ||||||||||||||||
| Professional expense | 360 | 443 | 436 | 454 | 418 | ||||||||||||||||
| Merger related expense | 1 | 5 | 2 | 9 | 7 | ||||||||||||||||
| Other expenses | 2,362 | 2,574 | 2,633 | 2,235 | 2,579 | ||||||||||||||||
| Noninterest expense | 9,457 | 10,169 | 10,183 | 10,275 | 10,804 | ||||||||||||||||
| Income before income tax expense | 9,669 | 9,299 | 11,350 | 9,857 | 10,211 | ||||||||||||||||
| Income tax expense | 2,670 | 2,630 | 3,248 | 2,767 | 2,882 | ||||||||||||||||
| Net income | $ | 6,999 | $ | 6,669 | $ | 8,102 | $ | 7,090 | $ | 7,329 | |||||||||||
| Effective tax rate | 27.6 | % | 28.3 | % | 28.6 | % | 28.1 | % | 28.2 | % | |||||||||||
| Outstanding number of shares | 10,588,136 | 10,588,136 | 10,588,136 | 10,588,136 | 10,569,601 | ||||||||||||||||
| Weighted average shares for basic EPS | 10,588,136 | 10,588,136 | 10,588,136 | 10,576,191 | 10,569,601 | ||||||||||||||||
| Weighted average shares for diluted EPS | 10,588,937 | 10,594,155 | 10,591,351 | 10,600,189 | 10,600,053 | ||||||||||||||||
| Basic EPS | $ | 0.66 | $ | 0.63 | $ | 0.77 | $ | 0.67 | $ | 0.70 | |||||||||||
| Diluted EPS | $ | 0.66 | $ | 0.63 | $ | 0.76 | $ | 0.67 | $ | 0.70 | |||||||||||
FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4 (Dollars in thousands) | |||||||||||||||||||||
| At or for the Three Months Ended | |||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||||
2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||||
| Salaries and benefits | $ | 5,356 | $ | 5,569 | $ | 5,581 | $ | 6,079 | $ | 6,233 | |||||||||||
| FTE at the end of period | 169 | 172 | 165 | 170 | 179 | ||||||||||||||||
| Average FTE during the period | 169 | 168 | 164 | 174 | 184 | ||||||||||||||||
| Salaries and benefits/average FTE¹ | $ | 126 | $ | 131 | $ | 137 | $ | 142 | $ | 134 | |||||||||||
| Salaries and benefits/average assets¹ | 1.18 | % | 1.22 | % | 1.23 | % | 1.36 | % | 1.39 | % | |||||||||||
| Noninterest expense/average assets¹ | 2.08 | % | 2.22 | % | 2.25 | % | 2.30 | % | 2.41 | % | |||||||||||
| ¹ Annualized | |||||||||||||||||||||
FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5 (Dollars in thousands) | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 14,282 | $ | 11,188 | $ | 12,704 | $ | 13,788 | $ | 20,134 | ||||||||||
| Interest-earning deposits at the FRB and other banks | 233,255 | 335,016 | 293,394 | 240,602 | 170,839 | |||||||||||||||
| Investment securities | 59,883 | 61,617 | 66,400 | 68,943 | 72,550 | |||||||||||||||
| Loans held-for-sale | 218,258 | 219,355 | 215,083 | 243,753 | 230,431 | |||||||||||||||
| Loans held-for-investment | 1,204,009 | 1,201,230 | 1,201,237 | 1,222,867 | 1,285,278 | |||||||||||||||
| Less: Allowance for credit losses | (15,291 | ) | (15,284 | ) | (15,626 | ) | (15,627 | ) | (15,525 | ) | ||||||||||
| Loans held-for-investment, net | 1,188,718 | 1,185,946 | 1,185,611 | 1,207,240 | 1,269,753 | |||||||||||||||
| Other real estate owned | 55 | 55 | - | - | - | |||||||||||||||
| Restricted stock investments | 11,011 | 11,011 | 11,011 | 10,121 | 10,121 | |||||||||||||||
| Servicing assets | 7,673 | 7,873 | 8,426 | 8,528 | 9,232 | |||||||||||||||
| Goodwill | 2,185 | 2,185 | 2,185 | 2,185 | 2,185 | |||||||||||||||
| Intangible assets | 255 | 267 | 279 | 291 | 303 | |||||||||||||||
| Other assets | 24,838 | 24,799 | 24,537 | 25,697 | 26,939 | |||||||||||||||
| Total assets | $ | 1,760,413 | $ | 1,859,312 | $ | 1,819,630 | $ | 1,821,148 | $ | 1,812,487 | ||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
| Noninterest-bearing | $ | 305,923 | $ | 406,033 | $ | 426,333 | $ | 428,559 | $ | 451,651 | ||||||||||
| Interest-bearing | 1,147,662 | 1,143,257 | 1,096,078 | 1,108,754 | 1,086,599 | |||||||||||||||
| Total deposits | 1,453,585 | 1,549,290 | 1,522,411 | 1,537,313 | 1,538,250 | |||||||||||||||
| FHLB advances | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | |||||||||||||||
| Other liabilities | 21,114 | 31,141 | 23,956 | 17,651 | 14,706 | |||||||||||||||
| Total liabilities | 1,524,699 | 1,630,431 | 1,596,367 | 1,604,964 | 1,602,956 | |||||||||||||||
| Stockholders' Equity | 235,714 | 228,881 | 223,263 | 216,184 | 209,531 | |||||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 1,760,413 | $ | 1,859,312 | $ | 1,819,630 | $ | 1,821,148 | $ | 1,812,487 | ||||||||||
FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6 (Dollars in thousands) | ||||||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||
| Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | |||||||||||||||||||||
| Construction | $ | 34,886 | 2.9 | % | $ | 30,924 | 2.6 | % | $ | 20,106 | 1.7 | % | $ | 19,550 | 1.6 | % | $ | 17,537 | 1.4 | % | ||||||||||
| Commercial real estate | 1,010,495 | 83.9 | % | 1,005,735 | 83.7 | % | 1,014,785 | 84.5 | % | 1,033,124 | 84.5 | % | 1,078,588 | 83.9 | % | |||||||||||||||
| Commercial and industrial | 108,123 | 9.0 | % | 113,374 | 9.4 | % | 114,106 | 9.4 | % | 114,184 | 9.3 | % | 125,298 | 9.7 | % | |||||||||||||||
| Home mortgage | 44,920 | 3.7 | % | 45,452 | 3.8 | % | 45,987 | 3.8 | % | 49,155 | 4.0 | % | 52,031 | 4.1 | % | |||||||||||||||
| Consumer | 630 | 0.1 | % | 616 | 0.1 | % | 1,074 | 0.1 | % | 1,049 | 0.1 | % | 6,260 | 0.5 | % | |||||||||||||||
| Gross loans held-for-investment | 1,199,054 | 99.6 | % | 1,196,101 | 99.6 | % | 1,196,058 | 99.6 | % | 1,217,062 | 99.5 | % | 1,279,714 | 99.6 | % | |||||||||||||||
| Deferred loan fees/costs, net | 4,955 | 0.4 | % | 5,129 | 0.4 | % | 5,179 | 0.4 | % | 5,805 | 0.5 | % | 5,564 | 0.4 | % | |||||||||||||||
| Loans held-for-investment | $ | 1,204,009 | 100.0 | % | $ | 1,201,230 | 100.0 | % | $ | 1,201,237 | 100.0 | % | $ | 1,222,867 | 100.0 | % | $ | 1,285,278 | 100.0 | % | ||||||||||
| Loans held-for-sale | $ | 218,258 | $ | 219,355 | $ | 215,083 | $ | 243,753 | $ | 230,431 | ||||||||||||||||||||
| Total loans receivable | $ | 1,422,267 | $ | 1,420,585 | $ | 1,416,320 | $ | 1,466,620 | $ | 1,515,709 | ||||||||||||||||||||
FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7 (Dollars in thousands) | ||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||
2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| SBA loans held-for-sale at beginning of the quarter/year | $ | 219,355 | $ | 215,083 | $ | 243,753 | $ | 230,431 | $ | 186,438 | $ | 230,431 | $ | 158,128 | ||||||||||||||
| SBA loans originated/transferred from/to held-for- | ||||||||||||||||||||||||||||
| investment during the quarter/year | 27,022 | 16,260 | 18,273 | 16,890 | 45,184 | 78,445 | 181,689 | |||||||||||||||||||||
| SBA loans sold during the quarter/year | (21,749 | ) | (9,245 | ) | (42,437 | ) | - | - | (73,431 | ) | (101,376 | ) | ||||||||||||||||
| SBA loans principal paydown/payoff, net of advance | (6,370 | ) | (2,743 | ) | (4,506 | ) | (3,568 | ) | (1,191 | ) | (17,187 | ) | (8,010 | ) | ||||||||||||||
| SBA loans held-for-sale at end of the quarter/year | $ | 218,258 | $ | 219,355 | $ | 215,083 | $ | 243,753 | $ | 230,431 | $ | 218,258 | $ | 230,431 | ||||||||||||||
| Gain on sale of SBA loans | $ | 838 | $ | 419 | $ | 1,952 | $ | - | $ | - | $ | 3,209 | $ | 7,966 | ||||||||||||||
| Premium on sale (weighted average) | 6.7 | % | 8.3 | % | 6.8 | % | - | - | 7.0 | % | 9.5 | % | ||||||||||||||||
| SBA loan production | $ | 37,821 | $ | 24,270 | $ | 24,013 | $ | 21,719 | $ | 60,746 | $ | 107,823 | $ | 241,179 | ||||||||||||||
FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8 (Dollars in thousands) | ||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||
2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| SBA servicing assets @ beginning of the quarter/year | $ | 7,873 | $ | 8,426 | $ | 8,528 | $ | 9,232 | $ | 10,158 | $ | 9,232 | $ | 10,632 | ||||||||||||||
| Newly added SBA servicing assets from SBA loans sold | 430 | 182 | 806 | - | - | 1,418 | 2,133 | |||||||||||||||||||||
| Regular quarterly/annual servicing assets amortization | (356 | ) | (371 | ) | (379 | ) | (403 | ) | (434 | ) | (1,509 | ) | (1,845 | ) | ||||||||||||||
| SBA servicing assets amortized from SBA loans paid off/charged off | (274 | ) | (364 | ) | (529 | ) | (301 | ) | (492 | ) | (1,468 | ) | (1,688 | ) | ||||||||||||||
| Subtotal before impairment | 7,673 | 7,873 | 8,426 | 8,528 | 9,232 | 7,673 | 9,232 | |||||||||||||||||||||
| Reversal of valuation allowance on servicing assets | - | - | - | - | - | - | - | |||||||||||||||||||||
| SBA servicing assets @ the end of the quarter/year | $ | 7,673 | $ | 7,873 | $ | 8,426 | $ | 8,528 | $ | 9,232 | $ | 7,673 | $ | 9,232 | ||||||||||||||
FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9 (Dollars in thousands) | |||||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
| Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 305,923 | 21.1 | % | $ | 406,033 | 26.2 | % | $ | 426,333 | 28.0 | % | $ | 428,559 | 27.9 | % | $ | 451,651 | 29.4 | % | |||||||||
| Interest-bearing demand | 7,504 | 0.5 | % | 6,395 | 0.4 | % | 9,056 | 0.6 | % | 10,883 | 0.7 | % | 8,878 | 0.6 | % | ||||||||||||||
| NOW & MMDA | 237,548 | 16.3 | % | 227,283 | 14.7 | % | 210,429 | 13.8 | % | 211,793 | 13.8 | % | 274,521 | 17.9 | % | ||||||||||||||
| Savings | 88,689 | 6.1 | % | 78,969 | 5.1 | % | 62,324 | 4.1 | % | 62,188 | 4.0 | % | 52,845 | 3.4 | % | ||||||||||||||
| TCDs of $250K and under | 315,920 | 21.7 | % | 312,704 | 20.2 | % | 298,520 | 19.6 | % | 294,074 | 19.1 | % | 278,952 | 18.1 | % | ||||||||||||||
| TCDs of $250K over | 353,866 | 24.4 | % | 373,345 | 24.1 | % | 368,262 | 24.2 | % | 367,167 | 23.9 | % | 320,386 | 20.8 | % | ||||||||||||||
| Wholesale TCDs | 144,135 | 9.9 | % | 144,561 | 9.3 | % | 147,487 | 9.7 | % | 162,649 | 10.6 | % | 151,017 | 9.8 | % | ||||||||||||||
| Total Deposits | $ | 1,453,585 | 100.0 | % | $ | 1,549,290 | 100.0 | % | $ | 1,522,411 | 100.0 | % | $ | 1,537,313 | 100.0 | % | $ | 1,538,250 | 100.0 | % | |||||||||
| Recap: | |||||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 305,923 | 21.0 | % | $ | 406,033 | 26.2 | % | $ | 426,333 | 28.0 | % | $ | 428,559 | 27.9 | % | $ | 451,651 | 29.4 | % | |||||||||
| Interest-bearing demand | 7,504 | 0.5 | % | 6,395 | 0.4 | % | 9,056 | 0.6 | % | 10,883 | 0.7 | % | 8,878 | 0.6 | % | ||||||||||||||
| NOW & MMDA | 237,548 | 16.3 | % | 227,283 | 14.7 | % | 210,429 | 13.8 | % | 211,793 | 13.8 | % | 274,521 | 17.8 | % | ||||||||||||||
| Savings | 88,689 | 6.1 | % | 78,969 | 5.1 | % | 62,324 | 4.1 | % | 62,188 | 4.0 | % | 52,845 | 3.5 | % | ||||||||||||||
| TCDs of $250K and under | 315,920 | 21.7 | % | 312,704 | 20.2 | % | 298,520 | 19.6 | % | 294,074 | 19.1 | % | 278,952 | 18.1 | % | ||||||||||||||
| Core Deposits | 955,584 | 65.7 | % | 1,031,384 | 66.6 | % | 1,006,662 | 66.1 | % | 1,007,497 | 65.5 | % | 1,066,847 | 69.4 | % | ||||||||||||||
| TCDs of $250K over | 353,866 | 24.3 | % | 373,345 | 24.1 | % | 368,262 | 24.2 | % | 367,167 | 23.9 | % | 320,386 | 20.8 | % | ||||||||||||||
| Wholesale TCDs | 144,135 | 9.9 | % | 144,561 | 9.3 | % | 147,487 | 9.7 | % | 162,649 | 10.6 | % | 151,017 | 9.8 | % | ||||||||||||||
| Noncore Deposits | 498,001 | 34.3 | % | 517,906 | 33.4 | % | 515,749 | 33.9 | % | 529,816 | 34.5 | % | 471,403 | 30.6 | % | ||||||||||||||
| Total Deposits | $ | 1,453,585 | 100.0 | % | $ | 1,549,290 | 100.0 | % | $ | 1,522,411 | 100.0 | % | $ | 1,537,313 | 100.0 | % | $ | 1,538,250 | 100.0 | % | |||||||||
FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10 (Dollars in thousands) | ||||||||||||||||||||||
| 4th Qtr. | 3rd Qtr. | 2nd Qtr. | 1st Qtr. | 4th Qtr. | ||||||||||||||||||
2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||||
| Balance at beginning of period | $ | 15,284 | $ | 15,626 | $ | 15,627 | $ | 15,525 | $ | 15,602 | ||||||||||||
| CECL transition provision | - | - | - | 250 | - | |||||||||||||||||
| Provision for credit losses | - | - | - | - | - | |||||||||||||||||
| Charge-offs | (2 | ) | (350 | ) | (11 | ) | (159 | ) | (90 | ) | ||||||||||||
| Recoveries | 9 | 8 | 10 | 11 | 13 | |||||||||||||||||
| Balance at the end of period | $ | 15,291 | $ | 15,284 | $ | 15,626 | $ | 15,627 | $ | 15,525 | ||||||||||||
| Nonperforming Assets:¹ | ||||||||||||||||||||||
| Over 90 days still accruing | $ | 399 | $ | 2 | $ | 39 | $ | - | $ | 6,006 | ||||||||||||
| Nonaccrual loans | 2,030 | 616 | 645 | 636 | 801 | |||||||||||||||||
| Total nonperforming loans | 2,429 | 618 | 684 | 636 | 6,807 | |||||||||||||||||
| Other real estate owned | $ | 55 | 55 | - | - | - | ||||||||||||||||
| Total nonperforming assets | $ | 2,484 | $ | 673 | $ | 684 | $ | 636 | $ | 6,807 | ||||||||||||
| Classified Assets:¹ | ||||||||||||||||||||||
| Substandard | $ | 11,063 | $ | 10,105 | $ | 10,491 | $ | 7,673 | $ | 8,165 | ||||||||||||
| Doubtful | - | - | - | - | - | |||||||||||||||||
| Loss | ||||||||||||||||||||||
| Total classified loans | $ | 11,063 | $ | 10,105 | $ | 10,491 | $ | 7,673 | $ | 8,165 | ||||||||||||
| Other real estate owned | $ | 55 | 55 | - | - | - | ||||||||||||||||
| Total classified assets | $ | 11,118 | $ | 10,160 | $ | 10,491 | $ | 7,673 | $ | 8,165 | ||||||||||||
| Performing TDR loans:¹ | $ | 3,336 | $ | 3,336 | $ | 3,336 | $ | - | $ | 4,471 | ||||||||||||
| Delinquent Loans:¹ | ||||||||||||||||||||||
| Loans 30-89 days past due | $ | 5,981 | $ | 10,620 | $ | 4,420 | $ | 3,551 | $ | 381 | ||||||||||||
| 90 days or more past due and still accruing | 399 | 2 | 39 | - | 6,006 | |||||||||||||||||
| Nonaccrual | 2,030 | 616 | 645 | 636 | 801 | |||||||||||||||||
| Total delinquent loans | $ | 8,410 | $ | 11,238 | $ | 5,104 | $ | 4,187 | $ | 7,188 | ||||||||||||
| Asset Quality Ratios: | ||||||||||||||||||||||
| Net (recoveries) charge-offs to average loans² | 0.00 | % | 0.10 | % | 0.00 | % | 0.04 | % | 0.02 | % | ||||||||||||
| Nonaccrual loans to loans held-for-investment | 0.17 | % | 0.05 | % | 0.05 | % | 0.05 | % | 0.06 | % | ||||||||||||
| Nonperforming loans to loans held-for-investment | 0.20 | % | 0.05 | % | 0.06 | % | 0.05 | % | 0.53 | % | ||||||||||||
| Nonperforming assets to total assets | 0.14 | % | 0.04 | % | 0.04 | % | 0.03 | % | 0.38 | % | ||||||||||||
| Classified loans to loans held-for-investment | 0.92 | % | 0.84 | % | 0.87 | % | 0.63 | % | 0.64 | % | ||||||||||||
| Classified loans to Tier 1 and ACL | 4.45 | % | 4.18 | % | 4.44 | % | 3.35 | % | 3.67 | % | ||||||||||||
| Classified assets to total assets | 0.63 | % | 0.55 | % | 0.58 | % | 0.42 | % | 0.45 | % | ||||||||||||
| Classified assets to Tier 1 and ACL | 4.47 | % | 4.20 | % | 4.44 | % | 3.35 | % | 3.67 | % | ||||||||||||
| ACL to loans held-for-investment | 1.27 | % | 1.27 | % | 1.30 | % | 1.28 | % | 1.21 | % | ||||||||||||
| ACL to nonaccrual loans | 753.25 | % | 2481.17 | % | 2422.64 | % | 2457.08 | % | 1938.20 | % | ||||||||||||
| ACL to nonperforming loans | 629.52 | % | 2473.14 | % | 2284.50 | % | 2457.08 | % | 228.07 | % | ||||||||||||
| ACL to nonperforming assets | 615.58 | % | 2271.03 | % | 2284.50 | % | 2457.08 | % | 228.07 | % | ||||||||||||
| Texas ratio ³ | 1.00 | % | 0.28 | % | 0.29 | % | 0.28 | % | 3.06 | % | ||||||||||||
| 1 Net of SBA guaranteed balance | ||||||||||||||||||||||
| 2 Includes loans held-for-sale | ||||||||||||||||||||||
| 3 Nonperforming assets divided by tangible common equity and ACL | ||||||||||||||||||||||
| FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11 | |||||||||||||||||||||||||||
| Well Capitalized | Adequately Capitalized | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||||||||
| Regulatory | BASEL III | ||||||||||||||||||||||||||
| Requirement | Fully Phased In | 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||||||||
| Leverage ratio | |||||||||||||||||||||||||||
| Company | N/A | N/A | 12.98 | % | 12.53 | % | 12.23 | % | 11.86 | % | 11.71 | % | |||||||||||||||
| Bank | 5.00 | % | 4.00 | % | 12.96 | % | 12.50 | % | 12.20 | % | 11.82 | % | 11.67 | % | |||||||||||||
| Common equity tier 1 risk-based capital ratio | |||||||||||||||||||||||||||
| Company | N/A | N/A | 18.08 | % | 17.61 | % | 17.08 | % | 16.15 | % | 14.92 | % | |||||||||||||||
| Bank | 6.50 | % | 7.00 | % | 18.05 | % | 17.57 | % | 17.03 | % | 16.10 | % | 14.87 | % | |||||||||||||
| Tier 1 risk-based capital ratio | |||||||||||||||||||||||||||
| Company | N/A | N/A | 18.08 | % | 17.61 | % | 17.08 | % | 16.15 | % | 14.92 | % | |||||||||||||||
| Bank | 8.00 | % | 8.50 | % | 18.05 | % | 17.57 | % | 17.03 | % | 16.10 | % | 14.87 | % | |||||||||||||
| Total risk-based capital ratio | |||||||||||||||||||||||||||
| Company | N/A | N/A | 19.30 | % | 18.83 | % | 18.32 | % | 17.37 | % | 16.08 | % | |||||||||||||||
| Bank | 10.00 | % | 10.50 | % | 19.27 | % | 18.79 | % | 18.27 | % | 17.31 | % | 16.03 | % | |||||||||||||
| Tangible common equity/total assets | 13.27 | % | 12.19 | % | 12.15 | % | 11.75 | % | 11.44 | % | |||||||||||||||||
| Tangible common equity per share | $ | 22.03 | $ | 21.39 | $ | 20.85 | $ | 20.18 | $ | 19.59 | |||||||||||||||||
| FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12 | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||
| Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | |||||||||||||||||||||||||||||||
| Number of Days in the Period | |||||||||||||||||||||||||||||||||||||||||||||
| INTEREST-EARNING ASSETS | |||||||||||||||||||||||||||||||||||||||||||||
| Loans Receivable¹ | $ | 1,410,971 | $ | 24,926 | 7.01 | % | $ | 1,417,148 | $ | 24,734 | 6.92 | % | $ | 1,444,608 | $ | 24,661 | 6.85 | % | $ | 1,502,078 | $ | 24,379 | 6.58 | % | $ | 1,473,100 | $ | 22,407 | 6.03 | % | |||||||||||||||
| Investment securities ² | 60,094 | 563 | 3.72 | % | 64,587 | 577 | 3.54 | % | 67,958 | 595 | 3.51 | % | 70,146 | 577 | 3.34 | % | 73,371 | 552 | 2.98 | % | |||||||||||||||||||||||||
| Interest-earning deposits at the FRB and other banks | 288,769 | 3,973 | 5.46 | % | 293,081 | 3,994 | 5.41 | % | 258,236 | 3,296 | 5.12 | % | 190,692 | 2,178 | 4.63 | % | 180,358 | 1,666 | 3.66 | % | |||||||||||||||||||||||||
| Other earning assets | 11,011 | 212 | 7.64 | % | 11,011 | 196 | 7.06 | % | 10,825 | 163 | 6.04 | % | 10,121 | 164 | 6.57 | % | 10,121 | 169 | 6.62 | % | |||||||||||||||||||||||||
| Total interest-earning assets ² | 1,770,845 | 29,674 | 6.65 | % | 1,785,827 | 29,501 | 6.55 | % | 1,781,627 | 28,715 | 6.46 | % | 1,773,037 | 27,298 | 6.24 | % | 1,736,950 | 24,794 | 5.66 | % | |||||||||||||||||||||||||
| NONINTEREST-EARNING ASSETS | |||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 12,567 | 13,045 | 12,792 | 14,262 | 15,632 | ||||||||||||||||||||||||||||||||||||||||
| Other noninterest-earning assets | 32,985 | 33,331 | 34,060 | 36,643 | 38,529 | ||||||||||||||||||||||||||||||||||||||||
| Total noninterest-earning assets | 45,552 | 46,376 | 46,852 | 50,905 | 54,161 | ||||||||||||||||||||||||||||||||||||||||
| Less: Allowance for credit losses | (15,291 | ) | (15,622 | ) | (15,627 | ) | (15,552 | ) | (15,581 | ) | |||||||||||||||||||||||||||||||||||
| TOTAL ASSETS | $ | 1,801,106 | $ | 1,816,581 | $ | 1,812,852 | $ | 1,808,390 | $ | 1,775,530 | |||||||||||||||||||||||||||||||||||
| INTEREST-BEARING DEPOSITS | |||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 12,657 | $ | 7 | 0.22 | % | $ | 12,347 | $ | 6 | 0.19 | % | $ | 14,522 | $ | 7 | 0.19 | % | $ | 18,021 | $ | 9 | 0.20 | % | $ | 20,352 | $ | 10 | 0.19 | % | |||||||||||||||
| Money market | 222,289 | 2,158 | 3.85 | % | 211,152 | 1,907 | 3.58 | % | 192,872 | 1,414 | 2.94 | % | 231,865 | 1,469 | 2.57 | % | 288,611 | 1,433 | 1.97 | % | |||||||||||||||||||||||||
| Savings | 82,403 | 664 | 3.20 | % | 70,579 | 494 | 2.78 | % | 63,786 | 324 | 2.04 | % | 55,576 | 164 | 1.20 | % | 61,152 | 96 | 0.62 | % | |||||||||||||||||||||||||
| Time deposits | 824,900 | 9,515 | 4.58 | % | 820,335 | 8,916 | 4.31 | % | 839,198 | 8,068 | 3.86 | % | 797,072 | 6,410 | 3.26 | % | 625,823 | 3,020 | 1.91 | % | |||||||||||||||||||||||||
| Total interest-bearing deposits | 1,142,249 | 12,344 | 4.29 | % | 1,114,413 | 11,323 | 4.03 | % | 1,110,378 | 9,813 | 3.54 | % | 1,102,534 | 8,052 | 2.96 | % | 995,938 | 4,559 | 1.82 | % | |||||||||||||||||||||||||
| Borrowings | 50,001 | 118 | 0.94 | % | 50,001 | 119 | 0.94 | % | 50,000 | 117 | 0.94 | % | 50,000 | 116 | 0.94 | % | 50,001 | 118 | 0.94 | % | |||||||||||||||||||||||||
| Total interest-bearing liabilities | 1,192,250 | 12,462 | 4.15 | % | 1,164,414 | 11,442 | 3.90 | % | 1,160,378 | 9,930 | 3.43 | % | 1,152,534 | 8,168 | 2.87 | % | 1,045,939 | 4,677 | 1.77 | % | |||||||||||||||||||||||||
| Noninterest-bearing deposits | 350,656 | 397,791 | 411,432 | 425,190 | 507,719 | ||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 25,602 | 27,519 | 20,934 | 16,947 | 14,732 | ||||||||||||||||||||||||||||||||||||||||
| Stockholders' equity | 232,598 | 226,857 | 220,108 | 213,719 | 207,140 | ||||||||||||||||||||||||||||||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 1,801,106 | $ | 1,816,581 | $ | 1,812,852 | $ | 1,808,390 | $ | 1,775,530 | |||||||||||||||||||||||||||||||||||
| Net interest income² | $ | 17,212 | $ | 18,059 | $ | 18,785 | $ | 19,130 | $ | 20,117 | |||||||||||||||||||||||||||||||||||
| Net interest spread | 2.50 | % | 2.65 | % | 3.03 | % | 3.37 | % | 3.89 | % | |||||||||||||||||||||||||||||||||||
| Effect of noninterest-bearing sources | 1.36 | % | 1.36 | % | 1.20 | % | 1.01 | % | 0.70 | % | |||||||||||||||||||||||||||||||||||
| Net interest margin² | 3.86 | % | 4.01 | % | 4.23 | % | 4.38 | % | 4.59 | % | |||||||||||||||||||||||||||||||||||
| Cost of deposits | $ | 1,492,905 | $ | 12,344 | 3.28 | % | $ | 1,512,204 | $ | 11,323 | 2.97 | % | $ | 1,521,810 | $ | 9,813 | 2.59 | % | $ | 1,527,724 | $ | 8,052 | 2.14 | % | $ | 1,503,657 | $ | 4,559 | 1.20 | % | |||||||||||||||
| Cost of funds | $ | 1,542,906 | $ | 12,462 | 3.20 | % | $ | 1,562,205 | $ | 11,442 | 2.91 | % | $ | 1,571,810 | $ | 9,930 | 2.53 | % | $ | 1,577,724 | $ | 8,168 | 2.10 | % | $ | 1,553,658 | $ | 4,677 | 1.19 | % | |||||||||||||||
| ¹ Loan held-for-investment, plus loans held-for-sale | |||||||||||||||||||||||||||||||||||||||||||||
| ² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate | |||||||||||||||||||||||||||||||||||||||||||||
FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13 (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | June 30,2023 | March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||
| Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||||
| Contractual yield | $ | 24,235 | 6.81 | % | $ | 23,932 | 6.70 | % | $ | 23,767 | 6.60 | % | $ | 23,643 | 6.38 | % | $ | 21,534 | 5.80 | % | |||||||||||||||||
| SBA discount accretion | 845 | 0.24 | % | 921 | 0.25 | % | 1,124 | 0.31 | % | 937 | 0.25 | % | 1,172 | 0.32 | % | ||||||||||||||||||||||
| Prepayment penalties and late fees | 40 | 0.01 | % | 18 | 0.01 | % | 60 | 0.02 | % | 30 | 0.01 | % | 17 | 0.00 | % | ||||||||||||||||||||||
| Amortization of net deferred costs | (194 | ) | -0.05 | % | (137 | ) | -0.04 | % | (290 | ) | -0.08 | % | (231 | ) | -0.06 | % | (316 | ) | -0.09 | % | |||||||||||||||||
| As reported yield on loans | $ | 24,926 | 7.01 | % | $ | 24,734 | 6.92 | % | $ | 24,661 | 6.85 | % | $ | 24,379 | 6.58 | % | $ | 22,407 | 6.03 | % | |||||||||||||||||
MARGIN ANALYSIS (Unaudited) - Table 14 (Dollars in thousands) | |||||||||||||||||||
| Twelve Months Ended | |||||||||||||||||||
| December 31,2023 | December 31,2022 | ||||||||||||||||||
| Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | ||||||||||||||
| Number of Days in the Period | |||||||||||||||||||
| INTEREST-EARNING ASSETS | |||||||||||||||||||
| Loans Receivable ¹ | $ | 1,443,379 | $ | 98,700 | 6.84 | % | $ | 1,411,715 | $ | 74,701 | 5.29 | % | |||||||
| Investment securities ² | 65,666 | 2,312 | 3.52 | % | 78,022 | 2,054 | 2.63 | % | |||||||||||
| Interest-earning deposits at the FRB and other banks | 258,060 | 13,441 | 5.21 | % | 250,532 | 3,804 | 1.52 | % | |||||||||||
| Other earning assets | 10,745 | 735 | 6.84 | % | 9,743 | 562 | 5.77 | % | |||||||||||
| Total interest-earning assets ² | 1,777,850 | 115,188 | 6.48 | % | 1,750,012 | 81,121 | 4.64 | % | |||||||||||
| NONINTEREST-EARNING ASSETS | |||||||||||||||||||
| Cash and due from banks | 13,161 | 15,328 | |||||||||||||||||
| Other noninterest-earning assets | 34,195 | 38,539 | |||||||||||||||||
| Total noninterest-earning assets | 47,356 | 53,867 | |||||||||||||||||
| Less: Allowance for credit losses | (15,522 | ) | (14,420 | ) | |||||||||||||||
| TOTAL ASSETS | $ | 1,809,684 | $ | 1,789,459 | |||||||||||||||
| INTEREST-BEARING DEPOSITS | |||||||||||||||||||
| Interest-bearing demand | $ | 14,367 | $ | 29 | 0.20 | % | $ | 24,487 | $ | 25 | 0.10 | % | |||||||
| Money market | 214,509 | 6,948 | 3.24 | % | 308,843 | 3,125 | 1.01 | % | |||||||||||
| Savings | 68,166 | 1,646 | 2.41 | % | 71,193 | 302 | 0.42 | % | |||||||||||
| Time deposits | 820,452 | 32,909 | 4.01 | % | 559,176 | 5,840 | 1.04 | % | |||||||||||
| Total interest-bearing deposits | 1,117,494 | 41,532 | 3.72 | % | 963,699 | 9,292 | 0.96 | % | |||||||||||
| Borrowings | 50,001 | 470 | 0.94 | % | 50,000 | 470 | 0.94 | % | |||||||||||
| Total interest-bearing liabilities | 1,167,495 | 42,002 | 3.60 | % | 1,013,699 | 9,762 | 0.96 | % | |||||||||||
| Noninterest-bearing deposits | 396,837 | 562,035 | |||||||||||||||||
| Other liabilities | 22,497 | 15,520 | |||||||||||||||||
| Stockholders' equity | 222,855 | 198,205 | |||||||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 1,809,684 | $ | 1,789,459 | |||||||||||||||
| Net interest income² | $ | 73,186 | $ | 71,359 | |||||||||||||||
| Net interest spread | 2.88 | % | 3.68 | % | |||||||||||||||
| Effect of noninterest-bearing sources | 1.24 | % | 0.40 | % | |||||||||||||||
| Net interest margin² | 4.12 | % | 4.08 | % | |||||||||||||||
| Cost of deposits | $ | 1,514,331 | $ | 41,532 | 2.74 | % | $ | 1,525,734 | $ | 9,292 | 0.61 | % | |||||||
| Cost of funds | $ | 1,564,332 | $ | 42,002 | 2.68 | % | $ | 1,575,734 | $ | 9,762 | 0.62 | % | |||||||
| ¹ Loan held-for-investment, plus loans held-for-sale | |||||||||||||||||||
| ² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate | |||||||||||||||||||
COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 15 (Dollars in thousands) | |||||||||||||||
| Twelve Months Ended | |||||||||||||||
| December 31, 2023 | December 31, 2022 | ||||||||||||||
| Amount | Yield | Amount | Yield | ||||||||||||
| Contractual yield | $ | 95,577 | 6.62 | % | $ | 69,760 | 4.94 | % | |||||||
| SBA discount accretion | 3,827 | 0.27 | % | 4,706 | 0.33 | % | |||||||||
| Prepayment penalties and late fees | 148 | 0.01 | % | 274 | 0.02 | % | |||||||||
| Amortization of net deferred costs | (852 | ) | -0.06 | % | (39 | ) | 0.00 | % | |||||||
| As reported yield on loans | $ | 98,700 | 6.84 | % | $ | 74,701 | 5.29 | % | |||||||
Contacts
Richard Koh, EVP & CFO
(323) 988-3037
RichardK@cbb-bank.com
