CBB Bancorp, Inc. Reports First Quarter 2023 Financial Results
The return on average assets for first quarter 2023 was 1.59% compared to 1.64% for fourth quarter 2022 and 1.91% for first quarter 2022.
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 for first quarter 2023 of $7.1 million, or $0.67 per diluted share, a decrease of 3.3% compared to $7.3 million, or $0.70 per diluted share, in the prior quarter and a decrease of 15.7% compared to $8.4 million, or $0.80 per diluted share, in the same period last year.
Overall Results
Net income for first quarter 2023 declined as a result of lower loan volume and the impact of interest rate increases on the Bank’s cost of funds. The return on average assets for first quarter 2023 was 1.59% compared to 1.64% for fourth quarter 2022 and 1.91% for first quarter 2022. The return on average equity for first quarter 2023 was 13.45% compared to 14.04% for fourth quarter 2022 and 18.05% for first quarter 2022. The net interest margin for first quarter 2023 was 4.38% compared to 4.59% for fourth quarter 2022 and 3.68% for first quarter 2022. The efficiency ratio for first quarter 2023 was 51.04% compared to 51.41% for fourth quarter 2022 and 50.71% for first quarter 2022.
“With the recent uncertainty in the banking sector, we are pleased to be able to report reliable earnings combined with continual strengthening of our capital and liquidity ratios for the current quarter.,” said James Hong, President and CEO.
Net Interest Income and Margin:
Net Interest Income
Net interest income for first quarter 2023 was $19.1 million, a decrease of $987 thousand, or 4.9%, from fourth quarter 2022, and an increase of $3.3 million, or 20.6%, from first quarter 2022. The decrease in net interest income compared with the fourth quarter of 2022 was primarily due to the impact of interest rate increases on the cost of deposits. The increase in net interest income compared with the first quarter of 2022 was due to the increased yield on the Bank’s variable rate loans which were impacted by the rising interest rate environment for the past year.
Net Interest Margin
Our net interest margin for first quarter 2023 was 4.38% compared to 4.59% for fourth quarter 2022 and 3.68% for first quarter 2022. The decrease in net interest margin from the prior quarter was primarily attributable to the rising cost of deposits. Our average cost of funds increased for first quarter 2023 to 2.10% from 1.19% for fourth quarter 2022 and from 0.31% for first quarter 2022.
Provision for Credit Losses:
The Company implemented the current expected credit losses methodology (“CECL”) as of January 1, 2023, which resulted in an increase in the allowance for credit losses of $250 thousand and was reflected in an adjustment to retained earnings as of January 1, 2023. No provision for credit losses was recorded for first quarter 2023 as asset quality metrics remained steady and there was a decline in loan balances. The provision for loan losses for fourth quarter of 2022 was also zero, compared with a negative provision for loan losses of $1.2 million for first quarter 2022. See Table 10 for additional information.
Noninterest Income:
Noninterest income for first quarter 2023 was $1.1 million, compared to $0.9 million for fourth quarter 2022 and $5.6 million for first quarter 2022. There were no sales of SBA loans during the first quarter of 2023 and fourth quarter of 2022, compared with SBA loan sales of $50.5 million, with an average premium percentage received of 11.0%, during the first quarter of 2022.
Noninterest Expense:
Noninterest expense for first quarter 2023 was $10.3 million, compared to $10.8 million for fourth quarter 2022 and $10.9 million for first quarter 2022. Salaries and employee benefits decreased by $154 thousand to $6.1 million, compared to $6.2 million in the prior quarter, due to a decrease in the number of employees. Other noninterest expense in first quarter 2023 was lower than in fourth quarter 2022, due primarily to a decrease in third-party processing fees.
Income Taxes:
The Company’s effective tax rate for first quarter 2023 was 28.1% compared to 28.2% for fourth quarter 2022 and 28.4% for first quarter 2022.
Balance Sheet:
Investment Securities:
Investment securities were $69.0 million at March 31, 2023, a decrease of $3.6 million from December 31, 2022 and $11.2 million from March 31, 2022. The decreases were due to principal paydowns and an absence of portfolio additions in the first quarter 2023, or in the fourth and first quarters 2022.
Loans Receivable:
Loans receivable (including loans held for sale) at March 31, 2023 was $1.5 billion, a decrease of $49.1.0 million, or 3.2%, from December 31, 2022, and an increase of $91.1 million, or 6.6%, from March 31, 2022. The decrease in loans compared to December 31, 2022 was due to slower loan originations as higher interest rates have affected the level of loan demand.
The weighted average loan-to-value ratio of Commercial Real Estate (“CRE”) loans was 69.4% at March 31, 2023. Excluding SBA loans, the weighted average loan-to-value of CRE loans was 52.8%.
Allowance for Credit Losses and Asset Quality:
The allowance for credit losses at March 31, 2023 was $15.6 million, or 1.28% of portfolio loans, compared to $15.5 million, or 1.21% of portfolio loans, at December 31, 2022 and compared to $13.1 million, or 1.07% of portfolio loans, at March 31, 2022. Non-performing loans as of March 31, 2023 were $636 thousand, compared to $6.8 million at December 31, 2022 and compared to $723 thousand at March 31, 2022. Our coverage ratio of allowance for credit losses to nonperforming assets exceeded 2400%.
SBA Loans Held for Sale:
Total SBA loans held for sale at March 31, 2023 was $243.8 million, compared to $230.4 million at December 31, 2022 and $149.7 million at March 31, 2022. We continue to assess SBA loan sale premiums and plan to sell loans when we believe it is advantageous to do so. See comments under “Noninterest Income,” and Table 7 for additional SBA loan origination and sale data.
Deposits:
Deposits were $1.537 billion at March 31, 2023, down $0.9 million from $1.538 billion at December 31, 2022 and up $3.3 million from $1.534 billion at March 31, 2022. Noninterest-bearing demand deposits decreased $23.1 million, or 5.1%, to $428.6 million at March 31, 2023, from December 31, 2022 and decreased $147.8 million, or 25.6%, from March 31, 2022. Demand deposits were 28.6% of total deposits at March 31, 2023 compared to 30.0% at December 31, 2022 and 38.4% at March 31, 2022. NOW and MMDA balances at March 31, 2023 decreased $62.7 million, or 22.8%, to $211.8 million, from December 31, 2022 and $132.7 million, or 38.5%, from March 31, 2022. Time deposits at March 31, 2023 increased $73.5 million, or 9.8%, to $823.9 million from December 31, 2022 and increased $302.5 million, or 58.0%, from March 31, 2022. Time deposits at March 31, 2023 were 53.6% of total deposits compared to 48.7% of total deposits, at December 31, 2022, and 34.0% of total deposits, at March 31, 2022. The increases in time deposits during the first quarter of 2023 and fourth quarter of 2022 reflect a shift in depositors’ preferences for the higher rate term deposits over money market and checking accounts as rates have risen over the course of the past year.
Borrowings:
Borrowings at March 31, 2023, December 31, 2022, and March 31, 2022, consisted of $50.0 million of Federal Home Loan Bank of San Francisco (FHLB-SF) advances at each date.
Capital:
Stockholders’ equity was $216.2 million at March 31, 2023, representing an increase of $6.7 million, or 3.2%, over stockholders’ equity of $209.5 million at December 31, 2022. Tangible book value per share at March 31, 2023 was $20.18, compared with $19.59 at December 31, 2022, an increase of $0.59 per share, or 3.0%.
Each of the Company’s and the Bank’s regulatory capital ratios increased at March 31, 2023 from December 31, 2022 and from March 31, 2022 and 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, which went into effect on January 1, 2022, as shown on Table 11 in this press release. The Common Equity Tier 1 risked-based capital at March 31, 2023 was 16.15% at the Company level and 16.10% at the Bank level.
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 March 31, 2023, the Bank has ten 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 five loan production offices in Texas, Georgia, Colorado, and Washington. For additional information, please go to www.cbb-bank.com under the tab “About Us” and select “Investors Relations” to see 1Q 2023 Overview.
FORWARD-LOOKING STATEMENTS:
This news release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, and CBB Bancorp and Commonwealth Business Bank (together, the “Company”) intend 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. Actual results may differ materially from those presented, either expressed or implied, in this news release. Factors that might cause such differences 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 | |||||||||||||||||||||||
| March 31, | December 31, | $ | % | March 31, | $ | % | |||||||||||||||||
|
2023 |
2022 |
Change | Change |
2022 |
Change | Change | |||||||||||||||||
| Interest income |
$ |
27,248 |
|
$ |
24,744 |
|
$ |
2,504 |
|
10.1 |
% |
$ |
17,032 |
|
$ |
10,216 |
|
60.0 |
% |
||||
| Interest expense |
|
8,168 |
|
|
4,677 |
|
|
3,491 |
|
74.6 |
% |
|
1,209 |
|
|
6,959 |
|
575.6 |
% |
||||
| Net interest income |
|
19,080 |
|
|
20,067 |
|
|
(987 |
) |
(4.9 |
%) |
|
15,823 |
|
|
3,257 |
|
20.6 |
% |
||||
| Provision for credit losses |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
(1,167 |
) |
|
1,167 |
|
(100.0 |
%) |
||||
| Net interest income after provision for credit losses |
|
19,080 |
|
|
20,067 |
|
|
(987 |
) |
(4.9 |
%) |
|
16,990 |
|
|
2,090 |
|
12.3 |
% |
||||
| Gain on sale of loans |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
4,668 |
|
|
(4,668 |
) |
(100.0 |
%) |
||||
| Gain (loss) on sale of OREO |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
- |
|
- |
|
||||
| SBA servicing fee income, net |
|
654 |
|
|
491 |
|
|
163 |
|
33.2 |
% |
|
469 |
|
|
185 |
|
39.4 |
% |
||||
| Service charges and other income |
|
398 |
|
|
457 |
|
|
(59 |
) |
(12.9 |
%) |
|
498 |
|
|
(100 |
) |
(20.1 |
%) |
||||
| Noninterest income |
|
1,052 |
|
|
948 |
|
|
104 |
|
11.0 |
% |
|
5,635 |
|
|
(4,583 |
) |
(81.3 |
%) |
||||
| Salaries and employee benefits |
|
6,079 |
|
|
6,233 |
|
|
(154 |
) |
(2.5 |
%) |
|
7,065 |
|
|
(986 |
) |
(14.0 |
%) |
||||
| Occupancy and equipment |
|
1,124 |
|
|
1,133 |
|
|
(9 |
) |
(0.8 |
%) |
|
1,120 |
|
|
4 |
|
0.4 |
% |
||||
| Marketing expense |
|
374 |
|
|
434 |
|
|
(60 |
) |
(13.8 |
%) |
|
485 |
|
|
(111 |
) |
(22.9 |
%) |
||||
| Professional expense |
|
454 |
|
|
418 |
|
|
36 |
|
8.6 |
% |
|
415 |
|
|
39 |
|
9.4 |
% |
||||
| Merger related expense |
|
9 |
|
|
7 |
|
|
2 |
|
28.6 |
% |
|
- |
|
|
9 |
|
100.0 |
% |
||||
| Other expenses |
|
2,235 |
|
|
2,579 |
|
|
(344 |
) |
(13.3 |
%) |
|
1,796 |
|
|
439 |
|
24.4 |
% |
||||
| Noninterest expense |
|
10,275 |
|
|
10,804 |
|
|
(529 |
) |
(4.9 |
%) |
|
10,881 |
|
|
(606 |
) |
(5.6 |
%) |
||||
| Income before income tax expense |
|
9,857 |
|
|
10,211 |
|
|
(354 |
) |
(3.5 |
%) |
|
11,744 |
|
|
(1,887 |
) |
(16.1 |
%) |
||||
| Income tax expense |
|
2,767 |
|
|
2,882 |
|
|
(115 |
) |
(4.0 |
%) |
|
3,336 |
|
|
(569 |
) |
(17.1 |
%) |
||||
| Net income |
$ |
7,090 |
|
$ |
7,329 |
|
$ |
(239 |
) |
(3.3 |
%) |
$ |
8,408 |
|
$ |
(1,318 |
) |
(15.7 |
%) |
||||
| Effective tax rate |
|
28.1 |
% |
|
28.2 |
% |
|
(0.2 |
%) |
(0.5 |
%) |
|
28.4 |
% |
|
(0.3 |
%) |
(1.2 |
%) |
||||
| Outstanding number of shares |
|
10,588,136 |
|
|
10,569,601 |
|
|
18,535 |
|
0.18 |
% |
|
10,299,361 |
|
|
288,775 |
|
2.8 |
% |
||||
| Weighted average shares for basic EPS |
|
10,576,191 |
|
|
10,569,601 |
|
|
6,590 |
|
0.1 |
% |
|
10,291,071 |
|
|
285,120 |
|
2.8 |
% |
||||
| Weighted average shares for diluted EPS |
|
10,600,189 |
|
|
10,600,053 |
|
|
136 |
|
0.0 |
% |
|
10,479,488 |
|
|
120,701 |
|
1.2 |
% |
||||
| Basic EPS |
$ |
0.67 |
|
$ |
0.70 |
|
$ |
(0.03 |
) |
(4.3 |
%) |
$ |
0.82 |
|
$ |
(0.15 |
) |
(18.3 |
%) |
||||
| Diluted EPS |
$ |
0.67 |
|
$ |
0.70 |
|
$ |
(0.03 |
) |
(4.3 |
%) |
$ |
0.80 |
|
$ |
(0.13 |
) |
(16.3 |
%) |
||||
| Return on average assets |
|
1.59 |
% |
|
1.64 |
% |
|
(0.05 |
%) |
(3.1 |
%) |
|
1.91 |
% |
|
(0.32 |
%) |
(16.8 |
%) |
||||
| Return on average equity |
|
13.45 |
% |
|
14.04 |
% |
|
(0.59 |
%) |
(4.2 |
%) |
|
18.08 |
% |
|
(4.63 |
%) |
(25.6 |
%) |
||||
| Efficiency ratio¹ |
|
51.04 |
% |
|
51.41 |
% |
|
(0.37 |
%) |
(0.7 |
%) |
|
50.71 |
% |
|
0.33 |
% |
0.7 |
% |
||||
| Yield on interest-earning assets² |
|
6.24 |
% |
|
5.66 |
% |
|
0.58 |
% |
10.3 |
% |
|
3.96 |
% |
|
2.28 |
% |
57.6 |
% |
||||
| Cost of funds |
|
2.10 |
% |
|
1.19 |
% |
|
0.91 |
% |
76.5 |
% |
|
0.31 |
% |
|
1.79 |
% |
577.4 |
% |
||||
| Net interest margin² |
|
4.38 |
% |
|
4.59 |
% |
|
(0.21 |
%) |
(4.6 |
%) |
|
3.68 |
% |
|
0.70 |
% |
19.0 |
% |
||||
|
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, less gains/(loss) on sale of securities, other-than-temporary impairment recovery/(loss) on investment securities and gain/(loss) from other real estate owned. |
||||
|
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) | |||||||||||||||||||||||
| March 31, | December 31, | $ | % | March 31, | $ | % | |||||||||||||||||
|
2023 |
2022 |
Change | Change |
2022 |
Change | Change | |||||||||||||||||
| ASSETS | |||||||||||||||||||||||
| Cash and due from banks |
$ |
13,788 |
|
$ |
20,134 |
|
$ |
(6,346 |
) |
(31.5 |
%) |
$ |
14,579 |
|
$ |
(791 |
) |
(5.4 |
%) |
||||
| Interest-earning deposits at the FRB and other banks |
|
240,602 |
|
|
170,839 |
|
|
69,763 |
|
40.8 |
% |
|
288,603 |
|
|
(48,001 |
) |
(16.6 |
%) |
||||
| Investment securities¹ |
|
68,943 |
|
|
72,550 |
|
|
(3,607 |
) |
(5.0 |
%) |
|
80,104 |
|
|
(11,161 |
) |
(13.9 |
%) |
||||
| Loans held-for-sale |
|
243,753 |
|
|
230,431 |
|
|
13,322 |
|
5.8 |
% |
|
149,733 |
|
|
94,020 |
|
62.8 |
% |
||||
| Loans held-for-investment |
|
1,222,867 |
|
|
1,285,278 |
|
|
(62,411 |
) |
(4.9 |
%) |
|
1,225,739 |
|
|
(2,872 |
) |
(0.2 |
%) |
||||
| Less: Allowance for credit losses ("ACL") |
|
(15,627 |
) |
|
(15,525 |
) |
|
(102 |
) |
(0.7 |
%) |
|
(13,089 |
) |
|
(2,538 |
) |
(19.4 |
%) |
||||
|
Loans held-for-investment, net |
|
1,207,240 |
|
|
1,269,753 |
|
|
(62,513 |
) |
(4.9 |
%) |
|
1,212,650 |
|
|
(5,410 |
) |
(0.4 |
%) |
||||
|
OREO |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
|
- |
|
- |
|
||||
| Restricted stock investments |
|
10,121 |
|
|
10,121 |
|
|
- |
|
- |
|
|
8,850 |
|
|
1,271 |
|
14.4 |
% |
||||
| Servicing assets |
|
8,528 |
|
|
9,232 |
|
|
(704 |
) |
(7.6 |
%) |
|
10,671 |
|
|
(2,143 |
) |
(20.1 |
%) |
||||
| Goodwill |
|
2,185 |
|
|
2,185 |
|
|
- |
|
- |
|
|
2,185 |
|
|
- |
|
- |
|
||||
| Intangible assets |
|
291 |
|
|
303 |
|
|
(12 |
) |
(4.0 |
%) |
|
346 |
|
|
(55 |
) |
(15.9 |
%) |
||||
| Other assets |
|
25,697 |
|
|
26,939 |
|
|
(1,242 |
) |
(4.6 |
%) |
|
24,061 |
|
|
1,636 |
|
6.8 |
% |
||||
| Total assets |
$ |
1,821,148 |
|
$ |
1,812,487 |
|
$ |
8,661 |
|
0.5 |
% |
$ |
1,791,782 |
|
$ |
29,366 |
|
1.6 |
% |
||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||
| Noninterest-bearing |
$ |
428,559 |
|
$ |
451,651 |
|
$ |
(23,092 |
) |
(5.1 |
%) |
$ |
576,378 |
|
$ |
(147,819 |
) |
(25.6 |
%) |
||||
| Interest-bearing |
|
1,108,754 |
|
|
1,086,599 |
|
|
22,155 |
|
2.0 |
% |
|
957,633 |
|
|
151,121 |
|
15.8 |
% |
||||
| Total deposits |
|
1,537,313 |
|
|
1,538,250 |
|
|
(937 |
) |
(0.1 |
%) |
|
1,534,011 |
|
|
3,302 |
|
0.2 |
% |
||||
| FHLB advances and other borrowing |
|
50,000 |
|
|
50,000 |
|
|
- |
|
- |
|
|
50,000 |
|
|
- |
|
- |
|
||||
| Other liabilities |
|
17,651 |
|
|
14,706 |
|
|
2,945 |
|
20.0 |
% |
|
16,687 |
|
|
964 |
|
5.8 |
% |
||||
| Total liabilities |
|
1,604,964 |
|
|
1,602,956 |
|
|
2,008 |
|
0.1 |
% |
|
1,600,698 |
|
|
4,266 |
|
0.3 |
% |
||||
| Stockholders' Equity |
|
216,184 |
|
|
209,531 |
|
|
6,653 |
|
3.2 |
% |
|
191,084 |
|
|
25,100 |
|
13.1 |
% |
||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
$ |
1,821,148 |
|
$ |
1,812,487 |
|
$ |
8,661 |
|
0.5 |
% |
$ |
1,791,782 |
|
$ |
29,366 |
|
1.6 |
% |
||||
| CAPITAL RATIOS | |||||||||||||||||||||||
| Leverage ratio | |||||||||||||||||||||||
| Company |
|
11.86 |
% |
|
11.71 |
% |
|
0.15 |
% |
1.3 |
% |
|
10.56 |
% |
|
1.30 |
% |
12.3 |
% |
||||
| Bank |
|
11.82 |
% |
|
11.67 |
% |
|
0.15 |
% |
1.3 |
% |
|
10.55 |
% |
|
1.27 |
% |
12.0 |
% |
||||
| Common equity tier 1 risk-based capital ratio | |||||||||||||||||||||||
| Company |
|
16.15 |
% |
|
14.92 |
% |
|
1.23 |
% |
8.3 |
% |
|
14.50 |
% |
|
1.65 |
% |
11.4 |
% |
||||
| Bank |
|
16.10 |
% |
|
14.87 |
% |
|
1.23 |
% |
8.3 |
% |
|
14.50 |
% |
|
1.60 |
% |
11.0 |
% |
||||
| Tier 1 risk-based capital ratio | |||||||||||||||||||||||
| Company |
|
16.15 |
% |
|
14.92 |
% |
|
1.23 |
% |
8.3 |
% |
|
14.50 |
% |
|
1.65 |
% |
11.4 |
% |
||||
| Bank |
|
16.10 |
% |
|
14.87 |
% |
|
1.23 |
% |
8.3 |
% |
|
14.50 |
% |
|
1.60 |
% |
11.0 |
% |
||||
| Total risk-based capital ratio | |||||||||||||||||||||||
| Company |
|
17.37 |
% |
|
16.08 |
% |
|
1.28 |
% |
8.0 |
% |
|
15.57 |
% |
|
1.80 |
% |
11.5 |
% |
||||
| Bank |
|
17.31 |
% |
|
16.03 |
% |
|
1.28 |
% |
8.0 |
% |
|
15.57 |
% |
|
1.74 |
% |
11.2 |
% |
||||
| Tangible common equity per share |
$ |
20.18 |
|
$ |
19.59 |
|
$ |
0.59 |
|
3.0 |
% |
$ |
18.31 |
|
$ |
1.87 |
|
10.2 |
% |
||||
| Loan-to-Deposit (LTD) ratio |
|
79.55 |
% |
|
83.55 |
% |
|
(4.00 |
%) |
(4.8 |
%) |
|
79.90 |
% |
|
(0.35 |
%) |
(0.4 |
%) |
||||
| Nonperforming assets |
$ |
636 |
|
$ |
6,807 |
|
$ |
(6,171 |
) |
(90.7 |
%) |
$ |
723 |
|
$ |
(87 |
) |
(12.0 |
%) |
||||
| Nonperforming assets as a % of loans held-for-investment |
|
0.05 |
% |
|
0.53 |
% |
|
(0.48 |
%) |
(90.57 |
%) |
|
0.06 |
% |
|
(0.01 |
%) |
(16.7 |
%) |
||||
| ACL as a % of loans held-for-investment |
|
1.28 |
% |
|
1.21 |
% |
|
0.07 |
% |
5.79 |
% |
|
1.07 |
% |
|
0.21 |
% |
19.6 |
% |
||||
| ¹ Includes AFS and HTM | |||||||||||||||||||||||
| FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3 | |||||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
|
2023 |
2022 |
2022 |
2022 |
2022 |
|||||||||||||||
| Interest income |
$ |
27,248 |
|
$ |
24,744 |
|
$ |
21,334 |
|
$ |
17,807 |
|
$ |
17,032 |
|
||||
| Interest expense |
|
8,168 |
|
|
4,677 |
|
|
2,507 |
|
|
1,369 |
|
|
1,209 |
|
||||
| Net interest income |
|
19,080 |
|
|
20,067 |
|
|
18,827 |
|
|
16,438 |
|
|
15,823 |
|
||||
| Provision for credit losses |
|
- |
|
|
- |
|
|
910 |
|
|
1,600 |
|
|
(1,167 |
) |
||||
| Net interest income after provision for credit losses |
|
19,080 |
|
|
20,067 |
|
|
17,917 |
|
|
14,838 |
|
|
16,990 |
|
||||
| Gain on sale of loans |
|
- |
|
|
- |
|
|
- |
|
|
3,298 |
|
|
4,668 |
|
||||
| Gain (loss) on sale of OREO |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
| SBA servicing fee income, net |
|
654 |
|
|
491 |
|
|
709 |
|
|
778 |
|
|
469 |
|
||||
| Service charges and other income |
|
398 |
|
|
457 |
|
|
518 |
|
|
462 |
|
|
498 |
|
||||
| Noninterest income |
|
1,052 |
|
|
948 |
|
|
1,227 |
|
|
4,538 |
|
|
5,635 |
|
||||
| Salaries and employee benefits |
|
6,079 |
|
|
6,233 |
|
|
6,861 |
|
|
6,994 |
|
|
7,065 |
|
||||
| Occupancy and equipment |
|
1,124 |
|
|
1,133 |
|
|
1,118 |
|
|
1,114 |
|
|
1,120 |
|
||||
| Marketing expense |
|
374 |
|
|
434 |
|
|
489 |
|
|
511 |
|
|
485 |
|
||||
| Professional expense |
|
454 |
|
|
418 |
|
|
519 |
|
|
517 |
|
|
415 |
|
||||
| Merger related expense |
|
9 |
|
|
7 |
|
|
47 |
|
|
123 |
|
|
- |
|
||||
| Other expenses |
|
2,235 |
|
|
2,579 |
|
|
2,125 |
|
|
1,114 |
|
|
1,796 |
|
||||
| Noninterest expense |
|
10,275 |
|
|
10,804 |
|
|
11,159 |
|
|
10,373 |
|
|
10,881 |
|
||||
| Income before income tax expense |
|
9,857 |
|
|
10,211 |
|
|
7,985 |
|
|
9,003 |
|
|
11,744 |
|
||||
| Income tax expense |
|
2,767 |
|
|
2,882 |
|
|
2,258 |
|
|
2,547 |
|
|
3,336 |
|
||||
| Net income |
$ |
7,090 |
|
$ |
7,329 |
|
$ |
5,727 |
|
$ |
6,456 |
|
$ |
8,408 |
|
||||
| Effective tax rate |
|
28.1 |
% |
|
28.2 |
% |
|
28.3 |
% |
|
28.3 |
% |
|
28.4 |
% |
||||
| Outstanding number of shares |
|
10,588,136 |
|
|
10,569,601 |
|
|
10,569,601 |
|
|
10,416,601 |
|
|
10,299,361 |
|
||||
| Weighted average shares for basic EPS |
|
10,576,191 |
|
|
10,569,601 |
|
|
10,516,394 |
|
|
10,305,014 |
|
|
10,291,071 |
|
||||
| Weighted average shares for diluted EPS |
|
10,600,189 |
|
|
10,600,053 |
|
|
10,545,544 |
|
|
10,409,663 |
|
|
10,479,488 |
|
||||
| Basic EPS |
$ |
0.67 |
|
$ |
0.70 |
|
$ |
0.54 |
|
$ |
0.62 |
|
$ |
0.82 |
|
||||
| Diluted EPS |
$ |
0.67 |
|
$ |
0.70 |
|
$ |
0.54 |
|
$ |
0.62 |
|
$ |
0.80 |
|
||||
| FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4 | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| At or for the Three Months Ended | ||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
|
2023 |
2022 |
2022 |
2022 |
2022 |
||||||||||||||||
| Salaries and benefits |
$ |
6,079 |
|
$ |
6,233 |
|
$ |
6,861 |
|
$ |
6,994 |
|
$ |
7,065 |
|
|||||
| FTE at the end of period |
|
170 |
|
|
179 |
|
|
190 |
|
|
199 |
|
|
208 |
|
|||||
| Average FTE during the period |
|
174 |
|
|
184 |
|
|
193 |
|
|
201 |
|
|
206 |
|
|||||
| Salaries and benefits/average FTE¹ |
$ |
142 |
|
$ |
134 |
|
$ |
141 |
|
$ |
140 |
|
$ |
139 |
|
|||||
| Salaries and benefits/average assets¹ |
|
1.36 |
% |
|
1.39 |
% |
|
1.52 |
% |
|
1.55 |
% |
|
1.60 |
% |
|||||
| Noninterest expense/average assets¹ |
|
2.30 |
% |
|
2.41 |
% |
|
2.47 |
% |
|
2.30 |
% |
|
2.47 |
% |
|||||
| 1 Annualized | ||||||||||||||||||||
| FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5 | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
|
2023 |
2022 |
2022 |
2022 |
2022 |
|||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks |
$ |
13,788 |
|
$ |
20,134 |
|
$ |
17,232 |
|
$ |
18,087 |
|
$ |
14,579 |
|
||||
| Interest-earning deposits at the FRB and other banks |
|
240,602 |
|
|
170,839 |
|
|
225,044 |
|
|
243,072 |
|
|
288,603 |
|
||||
| Investment securities |
|
68,943 |
|
|
72,550 |
|
|
75,839 |
|
|
77,469 |
|
|
80,104 |
|
||||
| Loans held-for-sale |
|
243,753 |
|
|
230,431 |
|
|
186,438 |
|
|
141,104 |
|
|
149,733 |
|
||||
| Loans held-for-investment |
|
1,222,867 |
|
|
1,285,278 |
|
|
1,260,590 |
|
|
1,260,939 |
|
|
1,225,739 |
|
||||
| Less: Allowance for credit losses |
|
(15,627 |
) |
|
(15,525 |
) |
|
(15,602 |
) |
|
(14,739 |
) |
|
(13,089 |
) |
||||
|
Loans held-for-investment, net |
|
1,207,240 |
|
|
1,269,753 |
|
|
1,244,988 |
|
|
1,246,200 |
|
|
1,212,650 |
|
||||
|
OREO |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
| Restricted stock investments |
|
10,121 |
|
|
10,121 |
|
|
10,121 |
|
|
10,111 |
|
|
8,850 |
|
||||
| Servicing assets |
|
8,528 |
|
|
9,232 |
|
|
10,158 |
|
|
10,996 |
|
|
10,671 |
|
||||
| Goodwill |
|
2,185 |
|
|
2,185 |
|
|
2,185 |
|
|
2,185 |
|
|
2,185 |
|
||||
| Intangible assets |
|
291 |
|
|
303 |
|
|
317 |
|
|
331 |
|
|
346 |
|
||||
| Other assets |
|
25,697 |
|
|
26,939 |
|
|
27,845 |
|
|
28,060 |
|
|
24,061 |
|
||||
| Total assets |
$ |
1,821,148 |
|
$ |
1,812,487 |
|
$ |
1,800,167 |
|
$ |
1,777,615 |
|
$ |
1,791,782 |
|
||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
| Noninterest-bearing |
$ |
428,559 |
|
$ |
451,651 |
|
$ |
562,051 |
|
$ |
566,610 |
|
$ |
576,378 |
|
||||
| Interest-bearing |
|
1,108,754 |
|
|
1,086,599 |
|
|
971,263 |
|
|
948,760 |
|
|
957,633 |
|
||||
| Total deposits |
|
1,537,313 |
|
|
1,538,250 |
|
|
1,533,314 |
|
|
1,515,370 |
|
|
1,534,011 |
|
||||
| FHLB advances |
|
50,000 |
|
|
50,000 |
|
|
50,000 |
|
|
50,000 |
|
|
50,000 |
|
||||
| Other liabilities |
|
17,651 |
|
|
14,706 |
|
|
14,109 |
|
|
15,134 |
|
|
16,687 |
|
||||
| Total liabilities |
|
1,604,964 |
|
|
1,602,956 |
|
|
1,597,423 |
|
|
1,580,504 |
|
|
1,600,698 |
|
||||
| Stockholders' Equity |
|
216,184 |
|
|
209,531 |
|
|
202,744 |
|
|
197,111 |
|
|
191,084 |
|
||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
$ |
1,821,148 |
|
$ |
1,812,487 |
|
$ |
1,800,167 |
|
$ |
1,777,615 |
|
$ |
1,791,782 |
|
||||
| FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6 | |||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |||||||||||||||||||||||||
| Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | ||||||||||||||||||||
| Construction |
$ |
19,550 |
1.6 |
% |
$ |
17,537 |
1.4 |
% |
$ |
14,919 |
1.2 |
% |
$ |
23,431 |
1.9 |
% |
$ |
18,541 |
1.5 |
% |
|||||||||
| Commercial real estate |
|
1,033,124 |
84.5 |
% |
|
1,078,588 |
83.9 |
% |
|
1,050,154 |
83.3 |
% |
|
1,023,298 |
81.1 |
% |
|
976,924 |
79.7 |
% |
|||||||||
| Commercial and industrial |
|
114,184 |
9.3 |
% |
|
125,298 |
9.7 |
% |
|
128,099 |
10.1 |
% |
|
146,175 |
11.6 |
% |
|
159,111 |
13.0 |
% |
|||||||||
| Home mortgage |
|
49,155 |
4.0 |
% |
|
52,031 |
4.1 |
% |
|
57,773 |
4.6 |
% |
|
57,612 |
4.6 |
% |
|
59,836 |
4.9 |
% |
|||||||||
| Consumer |
|
1,049 |
0.1 |
% |
|
6,260 |
0.5 |
% |
|
4,839 |
0.4 |
% |
|
6,609 |
0.5 |
% |
|
7,589 |
0.6 |
% |
|||||||||
| Gross loans held-for-investment |
|
1,217,062 |
99.5 |
% |
|
1,279,714 |
99.6 |
% |
|
1,255,784 |
99.6 |
% |
|
1,257,125 |
99.7 |
% |
|
1,222,001 |
99.7 |
% |
|||||||||
| Deferred loan fees/costs, net |
|
5,805 |
0.5 |
% |
|
5,564 |
0.4 |
% |
|
4,806 |
0.4 |
% |
|
3,814 |
0.3 |
% |
|
3,738 |
0.3 |
% |
|||||||||
| Loans held-for-investment |
$ |
1,222,867 |
100.0 |
% |
$ |
1,285,278 |
100.0 |
% |
$ |
1,260,590 |
100.0 |
% |
$ |
1,260,939 |
100.0 |
% |
$ |
1,225,739 |
100.0 |
% |
|||||||||
| Loans held-for-sale |
$ |
243,753 |
$ |
230,431 |
$ |
186,438 |
$ |
141,104 |
$ |
149,733 |
|||||||||||||||||||
| Total loans receivable |
$ |
1,466,620 |
$ |
1,515,709 |
$ |
1,447,028 |
$ |
1,402,043 |
$ |
1,375,472 |
|||||||||||||||||||
| FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7 | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
|
2023 |
2022 |
2022 |
2022 |
2022 |
|||||||||||||||
| SBA loans held-for-sale at beginning of the quarter/year |
$ |
230,431 |
|
$ |
186,438 |
|
$ |
141,104 |
|
$ |
149,733 |
|
$ |
158,128 |
|
||||
| SBA loans originated/transferred from/to held-for-investment during the quarter/year |
16,890 |
45,184 |
49,922 |
43,451 |
43,132 |
||||||||||||||
| SBA loans sold during the quarter/year |
|
- |
|
|
- |
|
|
- |
|
|
(50,845 |
) |
|
(50,531 |
) |
||||
| SBA loans principal paydown/payoff, net of advance |
|
(3,568 |
) |
|
(1,191 |
) |
|
(4,588 |
) |
|
(1,235 |
) |
|
(996 |
) |
||||
| SBA loans held-for-sale at end of the quarter/year |
$ |
243,753 |
|
$ |
230,431 |
|
$ |
186,438 |
|
$ |
141,104 |
|
$ |
149,733 |
|
||||
| Gain on sale of SBA loans |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
3,298 |
|
$ |
4,668 |
|
||||
| Premium on sale (weighted average) |
|
- |
|
|
- |
|
|
- |
|
|
8.0 |
% |
|
11.0 |
% |
||||
| SBA loan production |
$ |
21,719 |
|
$ |
60,746 |
|
$ |
69,234 |
|
$ |
56,676 |
|
$ |
54,523 |
|
||||
| FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8 | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
|
2023 |
2022 |
2022 |
2022 |
2022 |
|||||||||||||||
| SBA servicing assets @ beginning of the quarter/year |
$ |
9,232 |
|
$ |
10,158 |
|
$ |
10,996 |
|
$ |
10,671 |
|
$ |
10,632 |
|
||||
| Newly added SBA servicing assets from SBA loans sold |
|
- |
|
|
- |
|
|
- |
|
|
1,081 |
|
|
1,052 |
|
||||
| Regular quarterly/annual servicing assets amortization |
|
(403 |
) |
|
(434 |
) |
|
(471 |
) |
|
(478 |
) |
|
(462 |
) |
||||
| SBA servicing assets amortized from SBA loans paid off/charged off |
|
(301 |
) |
|
(492 |
) |
|
(367 |
) |
|
(278 |
) |
|
(551 |
) |
||||
| Subtotal before impairment |
|
8,528 |
|
|
9,232 |
|
|
10,158 |
|
|
10,996 |
|
|
10,671 |
|
||||
| Reversal of valuation allowance on servicing assets |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
||||
| SBA servicing assets @ the end of the quarter/year |
$ |
8,528 |
|
$ |
9,232 |
|
$ |
10,158 |
|
$ |
10,996 |
|
$ |
10,671 |
|
||||
| FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9 | |||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |||||||||||||||||||||||||
| Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | ||||||||||||||||||||
| Noninterest-bearing demand |
$ |
428,559 |
27.9 |
% |
$ |
451,651 |
29.4 |
% |
$ |
562,051 |
36.7 |
% |
$ |
566,610 |
37.4 |
% |
$ |
576,378 |
37.6 |
% |
|||||||||
| Interest-bearing demand |
|
10,883 |
0.7 |
% |
|
8,878 |
0.6 |
% |
|
10,268 |
0.7 |
% |
|
12,754 |
0.8 |
% |
|
12,059 |
0.8 |
% |
|||||||||
| NOW & MMDA |
|
211,793 |
13.8 |
% |
|
274,521 |
17.9 |
% |
|
313,719 |
20.5 |
% |
|
327,477 |
21.6 |
% |
|
344,501 |
22.5 |
% |
|||||||||
| Savings |
|
62,188 |
4.0 |
% |
|
52,845 |
3.4 |
% |
|
66,673 |
4.3 |
% |
|
73,791 |
4.9 |
% |
|
79,685 |
5.2 |
% |
|||||||||
| TCDs of $250K and under |
|
294,074 |
19.1 |
% |
|
278,952 |
18.1 |
% |
|
246,886 |
16.1 |
% |
|
245,203 |
16.2 |
% |
|
253,617 |
16.5 |
% |
|||||||||
| TCDs of $250K over |
|
367,167 |
23.9 |
% |
|
320,386 |
20.8 |
% |
|
242,700 |
15.8 |
% |
|
198,518 |
13.1 |
% |
|
176,754 |
11.5 |
% |
|||||||||
| Wholesale TCDs |
|
162,649 |
10.6 |
% |
|
151,017 |
9.8 |
% |
|
91,017 |
5.9 |
% |
|
91,017 |
6.0 |
% |
|
91,017 |
5.9 |
% |
|||||||||
| Total Deposits |
$ |
1,537,313 |
100.0 |
% |
$ |
1,538,250 |
100.0 |
% |
$ |
1,533,314 |
100.0 |
% |
$ |
1,515,370 |
100.0 |
% |
$ |
1,534,011 |
100.0 |
% |
|||||||||
| Recap: | |||||||||||||||||||||||||||||
| Noninterest-bearing demand |
$ |
428,559 |
27.9 |
% |
$ |
451,651 |
29.4 |
% |
$ |
562,051 |
36.7 |
% |
$ |
566,610 |
37.4 |
% |
$ |
576,378 |
37.6 |
% |
|||||||||
| Interest-bearing demand |
|
10,883 |
0.7 |
% |
|
8,878 |
0.6 |
% |
|
10,268 |
0.7 |
% |
|
12,754 |
0.8 |
% |
|
12,059 |
0.8 |
% |
|||||||||
| NOW & MMDA |
|
211,793 |
13.8 |
% |
|
274,521 |
17.8 |
% |
|
313,719 |
20.5 |
% |
|
327,477 |
21.6 |
% |
|
344,501 |
22.5 |
% |
|||||||||
| Savings |
|
62,188 |
4.0 |
% |
|
52,845 |
3.5 |
% |
|
66,673 |
4.3 |
% |
|
73,791 |
4.9 |
% |
|
79,685 |
5.2 |
% |
|||||||||
| TCDs of $250K and under |
|
294,074 |
19.1 |
% |
|
278,952 |
18.1 |
% |
|
246,886 |
16.1 |
% |
|
245,203 |
16.2 |
% |
|
253,617 |
16.5 |
% |
|||||||||
| Core Deposits |
|
1,007,497 |
65.5 |
% |
|
1,066,847 |
69.4 |
% |
|
1,199,597 |
78.3 |
% |
|
1,225,835 |
80.9 |
% |
|
1,266,240 |
82.6 |
% |
|||||||||
| TCDs of $250K over |
|
367,167 |
23.9 |
% |
|
320,386 |
20.8 |
% |
|
242,700 |
15.8 |
% |
|
198,518 |
13.1 |
% |
|
176,754 |
11.5 |
% |
|||||||||
| Wholesale TCDs |
|
162,649 |
10.6 |
% |
|
151,017 |
9.8 |
% |
|
91,017 |
5.9 |
% |
|
91,017 |
6.0 |
% |
|
91,017 |
5.9 |
% |
|||||||||
| Noncore Deposits |
|
529,816 |
34.5 |
% |
|
471,403 |
30.6 |
% |
|
333,717 |
21.7 |
% |
|
289,535 |
19.1 |
% |
|
267,771 |
17.4 |
% |
|||||||||
| Total Deposits |
$ |
1,537,313 |
100.0 |
% |
$ |
1,538,250 |
100.0 |
% |
$ |
1,533,314 |
100.0 |
% |
$ |
1,515,370 |
100.0 |
% |
$ |
1,534,011 |
100.0 |
% |
|||||||||
| FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10 | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| 1st Qtr. | 4th Qtr. | 3rd Qtr. | 2nd Qtr. | 1st Qtr. | ||||||||||||||||
|
2023 |
2022 |
2022 |
2022 |
2022 |
||||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||
| Balance at beginning of period |
$ |
15,525 |
|
$ |
15,602 |
|
$ |
14,739 |
|
$ |
13,089 |
|
$ |
14,192 |
|
|||||
| CECL transition provision |
|
250 |
|
|||||||||||||||||
| Provision for credit losses |
|
- |
|
|
- |
|
|
910 |
|
|
1,600 |
|
|
(1,167 |
) |
|||||
| Charge-offs |
|
(159 |
) |
|
(90 |
) |
|
(89 |
) |
|
- |
|
|
- |
|
|||||
| Recoveries |
|
11 |
|
|
13 |
|
|
42 |
|
|
50 |
|
|
64 |
|
|||||
| Balance at the end of period |
$ |
15,627 |
|
$ |
15,525 |
|
$ |
15,602 |
|
$ |
14,739 |
|
$ |
13,089 |
|
|||||
| Nonperforming Assets:¹ | ||||||||||||||||||||
| Over 90 days still accruing |
$ |
6,006 |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
||||||||
| Nonaccrual loans |
|
636 |
|
|
801 |
|
|
690 |
|
|
2,532 |
|
|
723 |
|
|||||
| Total nonperforming loans |
|
636 |
|
|
6,807 |
|
|
690 |
|
|
2,532 |
|
|
723 |
|
|||||
| Other real estate owned |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Total nonperforming assets |
$ |
636 |
|
$ |
6,807 |
|
$ |
690 |
|
$ |
2,532 |
|
$ |
723 |
|
|||||
| Classified Assets:¹ | ||||||||||||||||||||
| Substandard |
$ |
7,673 |
|
$ |
8,165 |
|
$ |
9,146 |
|
$ |
11,133 |
|
$ |
9,300 |
|
|||||
| Doubtful |
|
- |
|
|
- |
|
|
- |
|
|||||||||||
| Loss |
|
- |
|
|
- |
|
||||||||||||||
| Total classified loans |
$ |
7,673 |
|
$ |
8,165 |
|
$ |
9,146 |
|
$ |
11,133 |
|
$ |
9,300 |
|
|||||
| Other real estate owned |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Total classified assets |
$ |
7,673 |
|
$ |
8,165 |
|
$ |
9,146 |
|
$ |
11,133 |
|
$ |
9,300 |
|
|||||
| Performing TDR loans:¹ |
$ |
4,332 |
|
$ |
4,471 |
|
$ |
4,797 |
|
$ |
4,744 |
|
$ |
3,253 |
|
|||||
| Delinquent Loans:¹ | ||||||||||||||||||||
| Loans 30-89 days past due |
$ |
3,551 |
|
$ |
381 |
|
$ |
3,936 |
|
$ |
11,553 |
|
$ |
6,275 |
|
|||||
| 90 days or more past due and still accruing |
|
- |
|
|
6,006 |
|
|
- |
|
|
- |
|
|
- |
|
|||||
| Nonaccrual |
|
636 |
|
|
801 |
|
|
690 |
|
|
2,532 |
|
|
723 |
|
|||||
| Total delinquent loans |
$ |
4,187 |
|
$ |
7,188 |
|
$ |
4,626 |
|
$ |
14,085 |
|
$ |
6,998 |
|
|||||
| Asset Quality Ratios: | ||||||||||||||||||||
| Net (recoveries) charge-offs to average loans² |
|
0.04 |
% |
|
0.02 |
% |
|
0.01 |
% |
|
(0.01 |
%) |
|
(0.02 |
%) |
|||||
| Nonaccrual loans to loans held-for-investment |
|
0.05 |
% |
|
0.06 |
% |
|
0.05 |
% |
|
0.20 |
% |
|
0.06 |
% |
|||||
| Nonperforming loans to loans held-for-investment |
|
0.05 |
% |
|
0.53 |
% |
|
0.05 |
% |
|
0.20 |
% |
|
0.06 |
% |
|||||
| Nonperforming assets to total assets |
|
0.03 |
% |
|
0.38 |
% |
|
0.04 |
% |
|
0.14 |
% |
|
0.04 |
% |
|||||
| Classified loans to loans held-for-investment |
|
0.63 |
% |
|
0.64 |
% |
|
0.73 |
% |
|
0.88 |
% |
|
0.76 |
% |
|||||
| Classified loans to Tier 1 and ACL |
|
3.35 |
% |
|
3.67 |
% |
|
4.24 |
% |
|
5.32 |
% |
|
4.61 |
% |
|||||
| Classified assets to total assets |
|
0.42 |
% |
|
0.45 |
% |
|
0.51 |
% |
|
0.63 |
% |
|
0.52 |
% |
|||||
| Classified assets to Tier 1 and ACL |
|
3.35 |
% |
|
3.67 |
% |
|
4.24 |
% |
|
5.32 |
% |
|
4.61 |
% |
|||||
| ACL to loans held-for-investment |
|
1.28 |
% |
|
1.21 |
% |
|
1.24 |
% |
|
1.17 |
% |
|
1.07 |
% |
|||||
| ACL to nonaccrual loans |
|
2457.08 |
% |
|
1938.20 |
% |
|
2261.16 |
% |
|
582.11 |
% |
|
1810.37 |
% |
|||||
| ACL to nonperforming loans |
|
2457.08 |
% |
|
228.07 |
% |
|
2261.16 |
% |
|
582.11 |
% |
|
1810.37 |
% |
|||||
| ACL to nonperforming assets |
|
2457.08 |
% |
|
228.07 |
% |
|
2261.16 |
% |
|
582.11 |
% |
|
1810.37 |
% |
|||||
| Texas ratio ³ |
|
0.28 |
% |
|
3.06 |
% |
|
0.32 |
% |
|
1.21 |
% |
|
0.36 |
% |
|||||
|
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 |
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||
| Regulatory | BASEL III | |||||||||||||||||
| Requirement | Fully Phased In |
2023 |
2022 |
2022 |
2022 |
2022 |
||||||||||||
| Leverage ratio | ||||||||||||||||||
| Company |
N/A |
N/A |
|
11.86% |
|
11.71% |
|
11.25% |
|
10.80% |
|
10.56% |
||||||
| Bank |
5.00% |
4.00% |
|
11.82% |
|
11.67% |
|
11.15% |
|
10.73% |
|
10.55% |
||||||
| Common equity tier 1 risk-based capital ratio |
|
|
||||||||||||||||
| Company |
N/A |
N/A |
|
16.15% |
|
14.92% |
|
14.82% |
|
14.47% |
|
14.50% |
||||||
| Bank |
6.50% |
7.00% |
|
16.10% |
|
14.87% |
|
14.70% |
|
14.38% |
|
14.50% |
||||||
| Tier 1 risk-based capital ratio |
|
|
||||||||||||||||
| Company |
N/A |
N/A |
|
16.15% |
|
14.92% |
|
14.82% |
|
14.47% |
|
14.50% |
||||||
| Bank |
8.00% |
8.50% |
|
16.10% |
|
14.87% |
|
14.70% |
|
14.38% |
|
14.50% |
||||||
| Total risk-based capital ratio |
|
|
||||||||||||||||
| Company |
N/A |
N/A |
|
17.37% |
|
16.08% |
|
16.02% |
|
15.63% |
|
15.57% |
||||||
| Bank |
10.00% |
10.50% |
|
17.31% |
|
16.03% |
|
15.89% |
|
15.53% |
|
15.57% |
||||||
| Tangible common equity/total assets |
|
11.75% |
|
11.44% |
|
11.14% |
|
10.96% |
|
10.54% |
||||||||
| Tangible common equity per share |
$ |
20.18 |
$ |
19.59 |
$ |
18.95 |
$ |
18.68 |
$ |
18.31 |
||||||||
| FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 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 |
$ |
1,502,078 |
|
$ |
24,379 |
6.58 |
% |
$ |
1,473,100 |
|
$ |
22,407 |
6.03 |
% |
$ |
1,413,632 |
|
$ |
19,299 |
5.42 |
% |
$ |
1,389,968 |
|
$ |
16,643 |
4.80 |
% |
$ |
1,368,996 |
|
$ |
16,352 |
4.84 |
% |
|||||||||||||||||||
| Investment securities ² |
|
70,146 |
|
|
577 |
|
3.34 |
% |
|
73,371 |
|
|
552 |
|
2.98 |
% |
|
77,304 |
|
|
543 |
|
2.79 |
% |
|
78,709 |
|
|
488 |
|
2.49 |
% |
|
82,818 |
|
|
471 |
|
2.31 |
% |
||||||||||||||
| Interest-earning deposits at the FRB and other banks |
|
190,692 |
|
|
2,178 |
|
4.63 |
% |
|
180,358 |
|
|
1,666 |
|
3.66 |
% |
|
246,955 |
|
|
1,398 |
|
2.25 |
% |
|
286,974 |
|
|
599 |
|
0.84 |
% |
|
288,966 |
|
|
141 |
|
0.20 |
% |
||||||||||||||
| Other earning assets |
|
10,121 |
|
|
164 |
|
6.57 |
% |
|
10,121 |
|
|
169 |
|
6.62 |
% |
|
10,121 |
|
|
145 |
|
5.68 |
% |
|
9,861 |
|
|
129 |
|
5.25 |
% |
|
8,850 |
|
|
119 |
|
5.45 |
% |
||||||||||||||
| Total interest-earning assets ² |
|
1,773,037 |
|
|
27,298 |
|
6.24 |
% |
|
1,736,950 |
|
|
24,794 |
|
5.66 |
% |
|
1,748,012 |
|
|
21,385 |
|
4.85 |
% |
|
1,765,512 |
|
|
17,859 |
|
4.06 |
% |
|
1,749,630 |
|
|
17,083 |
|
3.96 |
% |
||||||||||||||
| NONINTEREST-EARNING ASSETS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks |
|
14,262 |
|
|
15,632 |
|
|
17,429 |
|
|
14,866 |
|
|
13,338 |
|
|||||||||||||||||||||||||||||||||||||||
| Other noninterest-earning assets |
|
36,643 |
|
|
38,529 |
|
|
40,251 |
|
|
38,621 |
|
|
36,714 |
|
|||||||||||||||||||||||||||||||||||||||
| Total noninterest-earning assets |
|
50,905 |
|
|
54,161 |
|
|
57,680 |
|
|
53,487 |
|
|
50,052 |
|
|||||||||||||||||||||||||||||||||||||||
| Less: Allowance for credit losses |
|
(15,552 |
) |
|
(15,581 |
) |
|
(14,756 |
) |
|
(13,126 |
) |
|
(14,200 |
) |
|||||||||||||||||||||||||||||||||||||||
| TOTAL ASSETS |
$ |
1,808,390 |
|
$ |
1,775,530 |
|
$ |
1,790,936 |
|
$ |
1,805,873 |
|
$ |
1,785,482 |
|
|||||||||||||||||||||||||||||||||||||||
| INTEREST-BEARING DEPOSITS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand |
$ |
18,021 |
|
$ |
9 |
|
0.20 |
% |
$ |
20,352 |
|
$ |
10 |
|
0.19 |
% |
$ |
23,461 |
|
$ |
8 |
|
0.14 |
% |
$ |
26,781 |
|
$ |
4 |
|
0.06 |
% |
$ |
27,442 |
|
$ |
3 |
|
0.04 |
% |
||||||||||||||
| Money market |
|
231,865 |
|
|
1,469 |
|
2.57 |
% |
|
288,611 |
|
|
1,433 |
|
1.97 |
% |
|
316,964 |
|
|
894 |
|
1.12 |
% |
|
308,377 |
|
|
443 |
|
0.58 |
% |
|
321,694 |
|
|
356 |
|
0.45 |
% |
||||||||||||||
| Savings |
|
55,576 |
|
|
164 |
|
1.20 |
% |
|
61,152 |
|
|
96 |
|
0.62 |
% |
|
71,519 |
|
|
85 |
|
0.47 |
% |
|
75,306 |
|
|
59 |
|
0.31 |
% |
|
76,967 |
|
|
61 |
|
0.32 |
% |
||||||||||||||
| Time deposits |
|
797,072 |
|
|
6,410 |
|
3.26 |
% |
|
625,823 |
|
|
3,020 |
|
1.91 |
% |
|
556,919 |
|
|
1,401 |
|
1.00 |
% |
|
523,504 |
|
|
746 |
|
0.57 |
% |
|
529,421 |
|
|
673 |
|
0.52 |
% |
||||||||||||||
| Total interest-bearing deposits |
|
1,102,534 |
|
|
8,052 |
|
2.96 |
% |
|
995,938 |
|
|
4,559 |
|
1.82 |
% |
|
968,863 |
|
|
2,388 |
|
0.98 |
% |
|
933,968 |
|
|
1,252 |
|
0.54 |
% |
|
955,524 |
|
|
1,093 |
|
0.46 |
% |
||||||||||||||
| Borrowings |
|
50,000 |
|
|
116 |
|
0.94 |
% |
|
50,001 |
|
|
118 |
|
0.94 |
% |
|
50,001 |
|
|
119 |
|
0.94 |
% |
|
50,000 |
|
|
117 |
|
0.94 |
% |
|
50,000 |
|
|
116 |
|
0.94 |
% |
||||||||||||||
| Total interest-bearing liabilities |
|
1,152,534 |
|
|
8,168 |
|
2.87 |
% |
|
1,045,939 |
|
|
4,677 |
|
1.77 |
% |
|
1,018,864 |
|
|
2,507 |
|
0.98 |
% |
|
983,968 |
|
|
1,369 |
|
0.56 |
% |
|
1,005,524 |
|
|
1,209 |
|
0.49 |
% |
||||||||||||||
| Noninterest-bearing deposits |
|
425,190 |
|
|
507,719 |
|
|
555,291 |
|
|
611,395 |
|
|
574,436 |
|
|||||||||||||||||||||||||||||||||||||||
| Other liabilities |
|
16,947 |
|
|
14,732 |
|
|
14,596 |
|
|
15,818 |
|
|
16,966 |
|
|||||||||||||||||||||||||||||||||||||||
| Stockholders' equity |
|
213,719 |
|
|
207,140 |
|
|
202,185 |
|
|
194,692 |
|
|
188,556 |
|
|||||||||||||||||||||||||||||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY |
$ |
1,808,390 |
|
$ |
1,775,530 |
|
$ |
1,790,936 |
|
$ |
1,805,873 |
|
$ |
1,785,482 |
|
|||||||||||||||||||||||||||||||||||||||
| Net interest income² |
$ |
19,130 |
|
$ |
20,117 |
|
$ |
18,878 |
|
$ |
16,490 |
|
$ |
15,874 |
|
|||||||||||||||||||||||||||||||||||||||
| Net interest spread |
3.37 |
% |
3.89 |
% |
3.87 |
% |
3.50 |
% |
3.47 |
% |
||||||||||||||||||||||||||||||||||||||||||||
| Effect of noninterest-bearing sources |
1.01 |
% |
0.70 |
% |
0.41 |
% |
0.25 |
% |
0.21 |
% |
||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin² |
4.38 |
% |
4.59 |
% |
4.28 |
% |
3.75 |
% |
3.68 |
% |
||||||||||||||||||||||||||||||||||||||||||||
| Cost of deposits |
$ |
1,527,724 |
|
$ |
8,052 |
|
2.14 |
% |
$ |
1,503,657 |
|
$ |
4,559 |
|
1.20 |
% |
$ |
1,524,154 |
|
$ |
2,388 |
|
0.62 |
% |
$ |
1,545,363 |
|
$ |
1,252 |
|
0.32 |
% |
$ |
1,529,960 |
|
$ |
1,093 |
|
0.29 |
% |
||||||||||||||
| Cost of funds |
$ |
1,577,724 |
|
$ |
8,168 |
|
2.10 |
% |
$ |
1,553,658 |
|
$ |
4,677 |
|
1.19 |
% |
$ |
1,574,155 |
|
$ |
2,507 |
|
0.63 |
% |
$ |
1,595,363 |
|
$ |
1,369 |
|
0.34 |
% |
$ |
1,579,960 |
|
$ |
1,209 |
|
0.31 |
% |
||||||||||||||
|
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 | |||||||||||||||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |||||||||||||||||||||||||||||
| Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||
| Contractual yield |
$ |
23,643 |
|
6.38 |
% |
$ |
21,534 |
|
5.80 |
% |
$ |
18,134 |
|
5.09 |
% |
$ |
15,496 |
4.47 |
% |
$ |
14,596 |
4.32 |
% |
||||||||||
| SBA discount accretion |
|
937 |
|
0.25 |
% |
|
1,172 |
|
0.32 |
% |
|
1,078 |
|
0.30 |
% |
|
1,035 |
0.30 |
% |
|
1,421 |
0.42 |
% |
||||||||||
| Prepayment penalties & late fees |
|
30 |
|
0.01 |
% |
|
17 |
|
0.00 |
% |
|
94 |
|
0.03 |
% |
|
56 |
0.02 |
% |
|
107 |
0.03 |
% |
||||||||||
| Amortization of net deferred costs |
|
(231 |
) |
-0.06 |
% |
|
(316 |
) |
-0.09 |
% |
|
(7 |
) |
0.00 |
% |
|
56 |
0.01 |
% |
|
228 |
0.07 |
% |
||||||||||
| As reported yield on loans |
$ |
24,379 |
|
6.58 |
% |
$ |
22,407 |
|
6.03 |
% |
$ |
19,299 |
|
5.42 |
% |
$ |
16,643 |
4.80 |
% |
$ |
16,352 |
4.84 |
% |
||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230427005846/en/