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CBB Bancorp, Inc. Reports Second Quarter 2023 Financial Results

CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank (the "Bank"), announced today net income for second quarter 2023 of $8.1 million, or $0.76 per diluted share, an increase of 14.3% compared to $7.1 million, or $0.67 per diluted share, in the prior quarter and an increase of 25.5% compared to $6.5 million, or $0.62 per diluted share, in the same period last year.

Overall Results

Net income for second quarter 2023 includes the benefit of both a gain on the sale of SBA loans and reduced noninterest expense, which more than offset a decline in net interest margin. The return on average assets for second quarter 2023 was 1.79% compared to 1.59% for first quarter 2023 and 1.43% for second quarter 2022. The return on average equity for second quarter 2023 was 14.76%, compared to 13.45% for first quarter 2023 and 13.30% for second quarter 2022. The net interest margin for second quarter 2023 was 4.23%, compared to 4.38% for first quarter 2023 and 3.75% for second quarter 2022. The efficiency ratio for second quarter 2023 was 47.29%, compared to 51.04% for first quarter 2023 and 49.45% for second quarter 2022.

James Hong, President, and CEO, commented, “We are pleased to announce earnings growth for the second quarter of 2023, during a period in which we have continued to emphasize balance sheet safety and liquidity over growth. In addition to solid gains from the Bank’s SBA operations, the Company’s continued emphasis on cost control has helped to sustain the Company’s profitability.”

Net Interest Income and Margin

Net Interest Income

Net interest income for second quarter 2023 was $18.7 million, a decrease of $346 thousand, or 1.8%, from first quarter 2023, and an increase of $2.3 million, or 14.0%, from second quarter 2022. The decrease in net interest income compared with first quarter 2023 was primarily due to the impact of interest rate increases on the cost of deposits. The increase in net interest income compared with the second quarter 2022 was due to the increased yield on the Bank’s variable rate loans, which were impacted by the rising interest rate environment over the past year.

Net Interest Margin

The net interest margin for second quarter 2023 was 4.23%, compared to 4.38% for first quarter 2023 and 3.75% for second quarter 2022. The decrease in net interest margin from the prior quarter was primarily attributable to the rising cost of funds. The cost of funds for second quarter 2023 increased to 2.53% from 2.10% for first quarter 2023 and increased from 0.34% for second quarter 2022.

Provision for Loan Losses:

No provision for credit losses was recorded for the second quarter 2023 as asset quality remained steady and there was a decline in loan balances. The provision for loan losses for first quarter 2023 was also zero, compared with a provision for loan losses of $1.6 million for second quarter 2022. See Table 10 in this press release for additional information and trends.

Noninterest Income:

Noninterest income for second quarter 2023 was $2.8 million, compared to $1.1 million for first quarter 2023 and $4.5 million for second quarter 2022. The increase in noninterest income in second quarter 2023 compared to first quarter 2023 was primarily the result of gains on sales of loans. Sales of SBA loans were $42.4 million with an average premium percentage received of 6.8% during the second quarter 2023. There were no sales of SBA loans during the first quarter 2023 while there were SBA loan sales totaling $50.8 million, with an average premium percentage received of 8.0%, during the second quarter 2022.

Noninterest Expense:

Noninterest expense for second quarter 2023 was $10.2 million, compared to $10.3 million for the first quarter 2023 and $10.4 million for the second quarter 2022. Salaries and employee benefits were substantially lower at $5.6 million in second quarter 2023 compared with the prior quarter total of $6.1 million, and down from $ 7.0 million in the second quarter 2022. Lower salaries and employee benefits in the current quarter reflect both ongoing cost control efforts and lower incentive payments due to lower levels of loan originations. The increase in other expenses compared to the first quarter 2023 includes the effect of an increase in the cost of FDIC deposit insurance as the FDIC raised its general deposit insurance assessment rates effective on January 1, 2023.

Income Taxes:

The Company’ s effective tax rate for second quarter 2023 was 28.6% compared to 28.1% for first quarter 2023 and 28.3% for second quarter 2022.

Balance Sheet:

Investment Securities:

Investment securities were $66.4 million on June 30, 2023, a decrease of $2.5 million from March 31, 2023, and $11.1 million from June 30, 2022. The decreases were due to principal paydowns and an absence of portfolio additions in the six months of 2023, or in the second quarter 2022.

Loans Receivable:

Loans receivable (including loans held for sale) at June 30, 2023, was $1.4 billion, a decrease of $50.3 million, or 3.4%, from loans receivable at March 31, 2023, and an increase of $14.3 million, or 1.0%, from loans receivable at June 30, 2022. The decrease in loans receivable at June 30, 2023 compared to loans receivable at March 31, 2023, was due to slower loan origination due to reduced demand for loans resulting from the comparatively higher interest rate environment.

The weighted average loan-to-value ratio of commercial real estate loans (“CRE”) was 67.07% at June 30, 2023. Excluding SBA loans, the weighted average loan-to-value ratio of CRE loans was 49.91%.

Allowance for Credit Losses and Asset Quality:

The allowance for credit losses at June 30, 2023 was $15.6 million, or 1.30% of portfolio loans, compared to $15.6 million, or 12.8% of portfolio loans, at March 31, 2023, and compared to $14.7 million, or 1.17% of portfolio loans, at June 30, 2022. Nonperforming loans as of June 30, 2023, were $684 thousand, compared to $636 thousand at March 31, 2023, and compared to $2.5 million at June 30, 2022. The coverage ratio of allowance for credit losses to nonperforming assets exceeded 2200% at June 30, 2023.

SBA Loans Held for Sale:

Total SBA loans held for sale at June 30, 2023, was $215.1 million, compared to $ 243.8 million at March 31 2023, and $141.1 million at June 30, 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 $ 1.5 billion at June 30, 2023, down $15.0 million, or 1.0% of, from March 31, 2023, and up $7.0 million, or 0.5%, from June 30, 2022. Noninterest-bearing demand deposits (“DDAs”) decreased $2.2 million, or 0.5%, to $426.3 million at June 30, 2023, from March 31, 2023, and decreased $140.3 million, or 24.8%, from June 30, 2022. DDAs were 28.6% of total deposits at June 30, 2023, compared to 28.6% at March 31, 2023, and 38.2% at June 30, 2022. NOW and MMDA accounts decreased $1.4 million, or 0.6%, to $210.4 million at June 30, 2023, from March 31, 2023, and decreased $117.0 million, or 35.7%, from June 30, 2022. Time deposits decreased $9.6 million, or 1.2%, at June 30, 2023, from March 31, 2023, and increased $279.5 million, or 52.3%, from June 30, 2022. Time deposits at June 30, 2023, were $814.3 million, or 53.5% of total deposits, compared to $823.9 million, or 53.6% of total deposits, at March 31, 2023, and $534.7 million, or 35.3% of total deposits, at June 30, 2022. The increases in time deposits during the first two quarters of 2023 compared with the second quarter 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. The primary cause of the decreases in noninterest bearing deposit balances during 2023 compared with the second quarter 2022 was a decline in escrow-related deposits as the higher interest rate environment caused a significant slowdown in activity for that sector.

Borrowings:

Borrowings at June 30, 2023, March 31, 2023, and June 30, 2022, consisted of $50.0 million of Federal Home Loan Bank of San Francisco advances at each date.

Capital:

Stockholders’ equity was $223.3 million at June 30, 2023, representing an increase of $7.1 million, or 3.3%, over stockholders’ equity of $216.2 million at March 31, 2023. Tangible book value per share at June 30, 2023, was $20.85, compared with $20.18 at March 31, 2023, an increase of $0.67 per share, or 3.3%.

Each of the Company’s and the Bank’s regulatory capital ratios increased at June 30, 2023, from March 31, 2023, and from June 30, 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 June 30, 2023, was 17.08% at the Company level and 17.03% 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 June 30, 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 2Q 2023 Overview and COVID-19 update presentation.

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. 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

 

Six Months Ended

 

 

June 30,

 

March 31,

 

$

%

 

June 30,

 

$

%

 

June 30,

 

June 30,

 

$

%

 

 

 

2023

 

 

 

2023

 

 

Change

Change

 

 

2022

 

 

Change

Change

 

 

2023

 

 

 

2022

 

 

Change

Change

 
Interest income

$

28,664

 

$

27,248

 

$

1,416

 

5.2

%

$

17,807

 

$

10,857

 

61.0

%

$

55,912

 

$

34,839

 

$

21,073

 

60.5

%

Interest expense

 

9,930

 

 

8,168

 

 

1,762

 

21.6

%

 

1,369

 

 

8,561

 

625.3

%

 

18,098

 

 

2,578

 

 

15,520

 

602.0

%

Net interest income

 

18,734

 

 

19,080

 

 

(346

)

(1.8

%)

 

16,438

 

 

2,296

 

14.0

%

 

37,814

 

 

32,261

 

 

5,553

 

17.2

%

 
Provision for credit losses

 

-

 

 

-

 

 

-

 

-

 

 

1,600

 

 

(1,600

)

(100.0

%)

 

-

 

 

433

 

 

(433

)

(100.0

%)

Net interest income after provision for credit losses

 

18,734

 

 

19,080

 

 

(346

)

(1.8

%)

 

14,838

 

 

3,896

 

26.3

%

 

37,814

 

 

31,828

 

 

5,986

 

18.8

%

 
Gain on sale of loans

 

1,952

 

 

-

 

 

1,952

 

100.0

%

 

3,298

 

 

(1,346

)

(40.8

%)

 

1,952

 

 

7,966

 

 

(6,014

)

(75.5

%)

Gain (loss) on sale of OREO

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

-

 

SBA servicing fee income, net

 

440

 

 

654

 

 

(214

)

(32.7

%)

 

778

 

 

(338

)

(43.4

%)

 

1,094

 

 

1,247

 

 

(153

)

(12.3

%)

Service charges and other income

 

407

 

 

398

 

 

9

 

2.3

%

 

462

 

 

(55

)

(11.9

%)

 

805

 

 

960

 

 

(155

)

(16.1

%)

Noninterest income

 

2,799

 

 

1,052

 

 

1,747

 

166.1

%

 

4,538

 

 

(1,739

)

(38.3

%)

 

3,851

 

 

10,173

 

 

(6,322

)

(62.1

%)

 
Salaries and employee benefits

 

5,581

 

 

6,079

 

 

(498

)

(8.2

%)

 

6,994

 

 

(1,413

)

(20.2

%)

 

11,660

 

 

14,059

 

 

(2,399

)

(17.1

%)

Occupancy and equipment

 

1,122

 

 

1,124

 

 

(2

)

(0.2

%)

 

1,114

 

 

8

 

0.7

%

 

2,246

 

 

2,234

 

 

12

 

0.5

%

Marketing expense

 

409

 

 

374

 

 

35

 

9.4

%

 

511

 

 

(102

)

(20.0

%)

 

783

 

 

996

 

 

(213

)

(21.4

%)

Professional expense

 

436

 

 

454

 

 

(18

)

(4.0

%)

 

517

 

 

(81

)

(15.7

%)

 

890

 

 

932

 

 

(42

)

(4.5

%)

Merger related expense

 

2

 

 

9

 

 

(7

)

(77.8

%)

 

123

 

 

(121

)

(98.4

%)

 

11

 

 

123

 

 

(112

)

(91.1

%)

Other expenses

 

2,633

 

 

2,235

 

 

398

 

17.8

%

 

1,114

 

 

1,519

 

136.4

%

 

4,868

 

 

2,910

 

 

1,958

 

67.3

%

Noninterest expense

 

10,183

 

 

10,275

 

 

(92

)

(0.9

%)

 

10,373

 

 

(190

)

(1.8

%)

 

20,458

 

 

21,254

 

 

(796

)

(3.7

%)

 
Income before income tax expense

 

11,350

 

 

9,857

 

 

1,493

 

15.1

%

 

9,003

 

 

2,347

 

26.1

%

 

21,207

 

 

20,747

 

 

460

 

2.2

%

 
Income tax expense

 

3,248

 

 

2,767

 

 

481

 

17.4

%

 

2,547

 

 

701

 

27.5

%

 

6,015

 

 

5,883

 

 

132

 

2.2

%

 
Net income

$

8,102

 

$

7,090

 

$

1,012

 

14.3

%

$

6,456

 

$

1,646

 

25.5

%

$

15,192

 

$

14,864

 

$

328

 

2.2

%

 
Effective tax rate

 

28.6

%

 

28.1

%

 

0.5

%

1.9

%

 

28.3

%

 

0.3

%

1.2

%

 

28.4

%

 

28.4

%

 

0.0

%

0.0

%

 
Outstanding number of shares

 

10,588,136

 

 

10,588,136

 

 

-

 

-

 

 

10,416,601

 

 

171,535

 

1.6

%

 

10,588,136

 

 

10,416,601

 

 

171,535

 

1.6

%

 
Weighted average shares for basic EPS

 

10,588,136

 

 

10,576,191

 

 

11,945

 

0.1

%

 

10,305,014

 

 

283,122

 

2.7

%

 

10,582,197

 

 

10,298,081

 

 

284,116

 

2.8

%

Weighted average shares for diluted EPS

 

10,591,350

 

 

10,600,189

 

 

(8,839

)

(0.1

%)

 

10,409,663

 

 

181,687

 

1.7

%

 

10,595,803

 

 

10,441,230

 

 

154,573

 

1.5

%

 
Basic EPS

$

0.77

 

$

0.67

 

$

0.10

 

14.9

%

$

0.62

 

$

0.15

 

24.2

%

$

1.44

 

$

1.44

 

$

-

 

-

 

Diluted EPS

$

0.76

 

$

0.67

 

$

0.09

 

13.4

%

$

0.62

 

$

0.14

 

22.6

%

$

1.43

 

$

1.42

 

$

0.01

 

0.7

%

 
Return on average assets

 

1.79

%

 

1.59

%

 

0.20

%

12.6

%

 

1.43

%

 

0.36

%

25.2

%

 

1.69

%

 

1.67

%

 

0.02

%

1.2

%

Return on average equity

 

14.76

%

 

13.45

%

 

1.31

%

9.7

%

 

13.30

%

 

1.46

%

11.0

%

 

14.12

%

 

15.64

%

 

(1.52

%)

(9.7

%)

 
Efficiency ratio¹

 

47.29

%

 

51.04

%

 

(3.75

%)

(7.4

%)

 

49.45

%

 

(2.16

%)

(4.4

%)

 

49.10

%

 

50.09

%

 

(0.99

%)

(2.0

%)

Yield on interest-earning assets²

 

6.46

%

 

6.24

%

 

0.22

%

3.5

%

 

4.06

%

 

2.40

%

59.1

%

 

6.36

%

 

4.01

%

 

2.35

%

58.6

%

Cost of funds

 

2.53

%

 

2.10

%

 

0.43

%

20.5

%

 

0.34

%

 

2.19

%

644.1

%

 

2.32

%

 

0.33

%

 

1.99

%

603.0

%

Net interest margin²

 

4.23

%

 

4.38

%

 

(0.15

%)

(3.4

%)

 

3.75

%

 

0.48

%

12.8

%

 

4.30

%

 

3.71

%

 

0.59

%

15.9

%

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

$

%

 

June 30,

 

$

%

 

 

 

2023

 

 

 

2023

 

 

Change

Change

 

 

2022

 

 

Change

Change

ASSETS
Cash and due from banks

$

12,704

 

$

13,788

 

$

(1,084

)

(7.9

%)

$

18,087

 

$

(5,383

)

(29.8

%)

Interest-earning deposits at the FRB and other banks

 

293,394

 

 

240,602

 

 

52,792

 

21.9

%

 

243,072

 

 

50,322

 

20.7

%

Investment securities¹

 

66,400

 

 

68,943

 

 

(2,543

)

(3.7

%)

 

77,469

 

 

(11,069

)

(14.3

%)

Loans held-for-sale

 

215,083

 

 

243,753

 

 

(28,670

)

(11.8

%)

 

141,104

 

 

73,979

 

52.4

%

 
Loans held-for-investment

 

1,201,237

 

 

1,222,867

 

 

(21,630

)

(1.8

%)

 

1,260,939

 

 

(59,702

)

(4.7

%)

Less: Allowance for credit losses ("ACL")

 

(15,626

)

 

(15,627

)

 

1

 

0.0

%

 

(14,739

)

 

(887

)

(6.0

%)

Loans held-for-investment, net

 

1,185,611

 

 

1,207,240

 

 

(21,629

)

(1.8

%)

 

1,246,200

 

 

(60,589

)

(4.9

%)

 
OREO

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

Restricted stock investments

 

11,011

 

 

10,121

 

 

890

 

8.8

%

 

10,111

 

 

900

 

8.9

%

Servicing assets

 

8,426

 

 

8,528

 

 

(102

)

(1.2

%)

 

10,996

 

 

(2,570

)

(23.4

%)

Goodwill

 

2,185

 

 

2,185

 

 

-

 

-

 

 

2,185

 

 

-

 

-

 

Intangible assets

 

279

 

 

291

 

 

(12

)

(4.1

%)

 

331

 

 

(52

)

(15.7

%)

Other assets

 

24,537

 

 

25,697

 

 

(1,160

)

(4.5

%)

 

28,060

 

 

(3,523

)

(12.6

%)

Total assets

$

1,819,630

 

$

1,821,148

 

$

(1,518

)

(0.1

%)

$

1,777,615

 

$

42,015

 

2.4

%

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing

$

426,333

 

$

428,559

 

$

(2,226

)

(0.5

%)

$

566,610

 

$

(140,277

)

(24.8

%)

Interest-bearing

 

1,096,078

 

 

1,108,754

 

 

(12,676

)

(1.1

%)

 

948,760

 

 

147,318

 

15.5

%

Total deposits

 

1,522,411

 

 

1,537,313

 

 

(14,902

)

(1.0

%)

 

1,515,370

 

 

7,041

 

0.5

%

 
FHLB advances and other borrowing

 

50,000

 

 

50,000

 

 

-

 

-

 

 

50,000

 

 

-

 

-

 

Other liabilities

 

23,956

 

 

17,651

 

 

6,305

 

35.7

%

 

15,134

 

 

8,822

 

58.3

%

Total liabilities

 

1,596,367

 

 

1,604,964

 

 

(8,597

)

(0.5

%)

 

1,580,504

 

 

15,863

 

1.0

%

 
Stockholders' Equity

 

223,263

 

 

216,184

 

 

7,079

 

3.3

%

 

197,111

 

 

26,152

 

13.3

%

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,819,630

 

$

1,821,148

 

$

(1,518

)

(0.1

%)

$

1,777,615

 

$

42,015

 

2.4

%

 
CAPITAL RATIOS
Leverage ratio
Company

 

12.23

%

 

11.86

%

 

0.37

%

3.1

%

 

10.80

%

 

1.43

%

13.2

%

Bank

 

12.20

%

 

11.82

%

 

0.38

%

3.2

%

 

10.73

%

 

1.47

%

13.7

%

Common equity tier 1 risk-based capital ratio
Company

 

17.08

%

 

16.15

%

 

0.93

%

5.7

%

 

14.47

%

 

2.60

%

18.0

%

Bank

 

17.03

%

 

16.10

%

 

0.93

%

5.8

%

 

14.38

%

 

2.65

%

18.4

%

Tier 1 risk-based capital ratio
Company

 

17.08

%

 

16.15

%

 

0.93

%

5.7

%

 

14.47

%

 

2.60

%

18.0

%

Bank

 

17.03

%

 

16.10

%

 

0.93

%

5.8

%

 

14.38

%

 

2.65

%

18.4

%

Total risk-based capital ratio
Company

 

18.32

%

 

17.37

%

 

0.95

%

5.5

%

 

15.63

%

 

2.69

%

17.2

%

Bank

 

18.27

%

 

17.31

%

 

0.96

%

5.5

%

 

15.53

%

 

2.74

%

17.6

%

Tangible common equity per share

$

20.85

 

$

20.18

 

$

0.67

 

3.3

%

$

18.68

 

$

2.17

 

11.6

%

Loan-to-Deposit (LTD) ratio

 

78.90

%

 

79.55

%

 

(0.65

%)

(0.8

%)

 

83.21

%

 

(4.31

%)

(5.2

%)

Nonperforming assets

$

684

 

$

636

 

$

48

 

7.5

%

$

2,532

 

$

(1,848

)

(73.0

%)

Nonperforming assets as a % of loans held-for-investment

 

0.06

%

 

0.05

%

 

0.01

%

20.00

%

 

0.20

%

 

(0.14

%)

(70.0

%)

ACL as a % of loans held-for-investment

 

1.30

%

 

1.28

%

 

0.02

%

1.56

%

 

1.17

%

 

0.13

%

11.1

%

1 Includes AFS and HTM

FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3

(Dollars in thousands, except per share amounts)

 

 

 

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

 

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 

 
Interest income

$

28,664

 

$

27,248

 

$

24,744

 

$

21,334

 

$

17,807

 

Interest expense

 

9,930

 

 

8,168

 

 

4,677

 

 

2,507

 

 

1,369

 

Net interest income

 

18,734

 

 

19,080

 

 

20,067

 

 

18,827

 

 

16,438

 

 
Provision for credit losses

 

-

 

 

-

 

 

-

 

 

910

 

 

1,600

 

Net interest income after provision for credit losses

 

18,734

 

 

19,080

 

 

20,067

 

 

17,917

 

 

14,838

 

 
Gain on sale of loans

 

1,952

 

 

-

 

 

-

 

 

-

 

 

3,298

 

Gain (loss) on sale of OREO

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

SBA servicing fee income, net

 

440

 

 

654

 

 

491

 

 

709

 

 

778

 

Service charges and other income

 

407

 

 

398

 

 

457

 

 

518

 

 

462

 

Noninterest income

 

2,799

 

 

1,052

 

 

948

 

 

1,227

 

 

4,538

 

 
Salaries and employee benefits

 

5,581

 

 

6,079

 

 

6,233

 

 

6,861

 

 

6,994

 

Occupancy and equipment

 

1,122

 

 

1,124

 

 

1,133

 

 

1,118

 

 

1,114

 

Marketing expense

 

409

 

 

374

 

 

434

 

 

489

 

 

511

 

Professional expense

 

436

 

 

454

 

 

418

 

 

519

 

 

517

 

Merger related expense

 

2

 

 

9

 

 

7

 

 

47

 

 

123

 

Other expenses

 

2,633

 

 

2,235

 

 

2,579

 

 

2,125

 

 

1,114

 

Noninterest expense

 

10,183

 

 

10,275

 

 

10,804

 

 

11,159

 

 

10,373

 

 
Income before income tax expense

 

11,350

 

 

9,857

 

 

10,211

 

 

7,985

 

 

9,003

 

 
Income tax expense

 

3,248

 

 

2,767

 

 

2,882

 

 

2,258

 

 

2,547

 

 
Net income

$

8,102

 

$

7,090

 

$

7,329

 

$

5,727

 

$

6,456

 

 
Effective tax rate

 

28.6

%

 

28.1

%

 

28.2

%

 

28.3

%

 

28.3

%

 
Outstanding number of shares

 

10,588,136

 

 

10,588,136

 

 

10,569,601

 

 

10,569,601

 

 

10,416,601

 

 
Weighted average shares for basic EPS

 

10,588,136

 

 

10,576,191

 

 

10,569,601

 

 

10,516,394

 

 

10,305,014

 

Weighted average shares for diluted EPS

 

10,591,350

 

 

10,600,189

 

 

10,600,053

 

 

10,545,544

 

 

10,409,663

 

 
Basic EPS

$

0.77

 

$

0.67

 

$

0.70

 

$

0.54

 

$

0.62

 

Diluted EPS

$

0.76

 

$

0.67

 

$

0.70

 

$

0.54

 

$

0.62

 

FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At or for the Three Months Ended

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

 

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 

 
Salaries and benefits

$

5,581

 

$

6,079

 

$

6,233

 

$

6,861

 

$

6,994

 

FTE at the end of period

 

165

 

 

170

 

 

179

 

 

190

 

 

199

 

Average FTE during the period

 

164

 

 

174

 

 

184

 

 

193

 

 

201

 

Salaries and benefits/average FTE¹

$

137

 

$

142

 

$

134

 

$

141

 

$

140

 

Salaries and benefits/average assets¹

 

1.23

%

 

1.36

%

 

1.39

%

 

1.52

%

 

1.55

%

Noninterest expense/average assets¹

 

2.25

%

 

2.30

%

 

2.41

%

 

2.47

%

 

2.30

%

1 Annualized
FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5
(Dollars in thousands)
 
June 30, March 31, December 31, September 30, June 30,

 

2023

 

 

2023

 

 

2022

 

 

2022

 

 

2022

 

ASSETS
Cash and due from banks

$

12,704

 

$

13,788

 

$

20,134

 

$

17,232

 

$

18,087

 

Interest-earning deposits at the FRB and other banks

 

293,394

 

 

240,602

 

 

170,839

 

 

225,044

 

 

243,072

 

Investment securities

 

66,400

 

 

68,943

 

 

72,550

 

 

75,839

 

 

77,469

 

Loans held-for-sale

 

215,083

 

 

243,753

 

 

230,431

 

 

186,438

 

 

141,104

 

 
Loans held-for-investment

 

1,201,237

 

 

1,222,867

 

 

1,285,278

 

 

1,260,590

 

 

1,260,939

 

Less: Allowance for credit losses

 

(15,626

)

 

(15,627

)

 

(15,525

)

 

(15,602

)

 

(14,739

)

Loans held-for-investment, net

 

1,185,611

 

 

1,207,240

 

 

1,269,753

 

 

1,244,988

 

 

1,246,200

 

 
OREO

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Restricted stock investments

 

11,011

 

 

10,121

 

 

10,121

 

 

10,121

 

 

10,111

 

Servicing assets

 

8,426

 

 

8,528

 

 

9,232

 

 

10,158

 

 

10,996

 

Goodwill

 

2,185

 

 

2,185

 

 

2,185

 

 

2,185

 

 

2,185

 

Intangible assets

 

279

 

 

291

 

 

303

 

 

317

 

 

331

 

Other assets

 

24,537

 

 

25,697

 

 

26,939

 

 

27,845

 

 

28,060

 

Total assets

$

1,819,630

 

$

1,821,148

 

$

1,812,487

 

$

1,800,167

 

$

1,777,615

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing

$

426,333

 

$

428,559

 

$

451,651

 

$

562,051

 

$

566,610

 

Interest-bearing

 

1,096,078

 

 

1,108,754

 

 

1,086,599

 

 

971,263

 

 

948,760

 

Total deposits

 

1,522,411

 

 

1,537,313

 

 

1,538,250

 

 

1,533,314

 

 

1,515,370

 

 
FHLB advances

 

50,000

 

 

50,000

 

 

50,000

 

 

50,000

 

 

50,000

 

Other liabilities

 

23,956

 

 

17,651

 

 

14,706

 

 

14,109

 

 

15,134

 

Total liabilities

 

1,596,367

 

 

1,604,964

 

 

1,602,956

 

 

1,597,423

 

 

1,580,504

 

 
Stockholders' Equity

 

223,263

 

 

216,184

 

 

209,531

 

 

202,744

 

 

197,111

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,819,630

 

$

1,821,148

 

$

1,812,487

 

$

1,800,167

 

$

1,777,615

 

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

Balance

 

%

 

Balance

 

%

 

Balance

 

%

 

Balance

 

%

 

Balance

 

%

 
Construction

$

20,106

1.7

%

$

19,550

1.6

%

$

17,537

1.4

%

$

14,919

1.2

%

$

23,431

1.9

%

Commercial real estate

 

1,014,785

84.5

%

 

1,033,124

84.5

%

 

1,078,588

83.9

%

 

1,050,154

83.3

%

 

1,023,298

81.1

%

Commercial and industrial

 

114,106

9.5

%

 

114,184

9.3

%

 

125,298

9.7

%

 

128,099

10.1

%

 

146,175

11.6

%

Home mortgage

 

45,987

3.8

%

 

49,155

4.0

%

 

52,031

4.1

%

 

57,773

4.6

%

 

57,612

4.6

%

Consumer

 

1,074

0.1

%

 

1,049

0.1

%

 

6,260

0.5

%

 

4,839

0.4

%

 

6,609

0.5

%

Gross loans held-for-investment

 

1,196,058

99.6

%

 

1,217,062

99.5

%

 

1,279,714

99.6

%

 

1,255,784

99.6

%

 

1,257,125

99.7

%

 
Deferred loan fees/costs, net

 

5,179

0.4

%

 

5,805

0.5

%

 

5,564

0.4

%

 

4,806

0.4

%

 

3,814

0.3

%

Loans held-for-investment

$

1,201,237

100.0

%

$

1,222,867

100.0

%

$

1,285,278

100.0

%

$

1,260,590

100.0

%

$

1,260,939

100.0

%

 
Loans held-for-sale

$

215,083

$

243,753

$

230,431

$

186,438

$

141,104

Total loans receivable

$

1,416,320

$

1,466,620

$

1,515,709

$

1,447,028

$

1,402,043

FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 
SBA loans held-for-sale at beginning of the quarter/year

$

243,753

 

$

230,431

 

$

186,438

 

$

141,104

 

$

149,733

 

SBA loans originated/transferred from/to held-for-
investment during the quarter/year

 

18,273

 

 

16,890

 

 

45,184

 

 

49,922

 

 

43,451

 

SBA loans sold during the quarter/year

 

(42,437

)

 

-

 

 

-

 

 

-

 

 

(50,845

)

SBA loans principal paydown/payoff, net of advance

 

(4,506

)

 

(3,568

)

 

(1,191

)

 

(4,588

)

 

(1,235

)

SBA loans held-for-sale at end of the quarter/year

$

215,083

 

$

243,753

 

$

230,431

 

$

186,438

 

$

141,104

 

 
Gain on sale of SBA loans

$

1,952

 

$

-

 

$

-

 

$

-

 

$

3,298

 

Premium on sale (weighted average)

 

6.8

%

 

-

 

 

-

 

 

-

 

 

8.0

%

 
SBA loan production

$

24,013

 

$

21,719

 

$

60,746

 

$

69,234

 

$

56,676

 

FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 
 
SBA servicing assets @ beginning of the quarter/year

$

8,528

 

$

9,232

 

$

10,158

 

$

10,996

 

$

10,671

 

 
Newly added SBA servicing assets from SBA loans sold

 

806

 

 

-

 

 

-

 

 

-

 

 

1,081

 

Regular quarterly/annual servicing assets amortization

 

(379

)

 

(403

)

 

(434

)

 

(471

)

 

(478

)

SBA servicing assets amortized from SBA loans paid off/charged off

 

(529

)

 

(301

)

 

(492

)

 

(367

)

 

(278

)

 
Subtotal before impairment

 

8,426

 

 

8,528

 

 

9,232

 

 

10,158

 

 

10,996

 

 
Reversal of valuation allowance on servicing assets

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 
SBA servicing assets @ the end of the quarter/year

$

8,426

 

$

8,528

 

$

9,232

 

$

10,158

 

$

10,996

 

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9
(Dollars in thousands)
 
June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022
Balance % Balance % Balance % Balance % Balance %
 
Noninterest-bearing demand

$

426,333

28.0

%

$

428,559

27.9

%

$

451,651

29.4

%

$

562,051

36.7

%

$

566,610

37.4

%

Interest-bearing demand

 

9,056

0.6

%

 

10,883

0.7

%

 

8,878

0.6

%

 

10,268

0.7

%

 

12,754

0.8

%

NOW & MMDA

 

210,429

13.8

%

 

211,793

13.8

%

 

274,521

17.9

%

 

313,719

20.5

%

 

327,477

21.6

%

Savings

 

62,324

4.1

%

 

62,188

4.0

%

 

52,845

3.4

%

 

66,673

4.3

%

 

73,791

4.9

%

TCDs of $250K and under

 

298,520

19.6

%

 

294,074

19.1

%

 

278,952

18.1

%

 

246,886

16.1

%

 

245,203

16.2

%

TCDs of $250K over

 

368,262

24.2

%

 

367,167

23.9

%

 

320,386

20.8

%

 

242,700

15.8

%

 

198,518

13.1

%

Wholesale TCDs

 

147,487

9.7

%

 

162,649

10.6

%

 

151,017

9.8

%

 

91,017

5.9

%

 

91,017

6.0

%

Total Deposits

$

1,522,411

100.0

%

$

1,537,313

100.0

%

$

1,538,250

100.0

%

$

1,533,314

100.0

%

$

1,515,370

100.0

%

 
Recap:
Noninterest-bearing demand

$

426,333

28.0

%

$

428,559

27.9

%

$

451,651

29.4

%

$

562,051

36.7

%

$

566,610

37.4

%

Interest-bearing demand

 

9,056

0.6

%

 

10,883

0.7

%

 

8,878

0.6

%

 

10,268

0.7

%

 

12,754

0.8

%

NOW & MMDA

 

210,429

13.8

%

 

211,793

13.8

%

 

274,521

17.8

%

 

313,719

20.5

%

 

327,477

21.6

%

Savings

 

62,324

4.1

%

 

62,188

4.0

%

 

52,845

3.5

%

 

66,673

4.3

%

 

73,791

4.9

%

TCDs of $250K and under

 

298,520

19.6

%

 

294,074

19.1

%

 

278,952

18.1

%

 

246,886

16.1

%

 

245,203

16.2

%

Core Deposits

 

1,006,662

66.1

%

 

1,007,497

65.5

%

 

1,066,847

69.4

%

 

1,199,597

78.3

%

 

1,225,835

80.9

%

 
TCDs of $250K over

 

368,262

24.2

%

 

367,167

23.9

%

 

320,386

20.8

%

 

242,700

15.8

%

 

198,518

13.1

%

Wholesale TCDs

 

147,487

9.7

%

 

162,649

10.6

%

 

151,017

9.8

%

 

91,017

5.9

%

 

91,017

6.0

%

Noncore Deposits

 

515,749

33.9

%

 

529,816

34.5

%

 

471,403

30.6

%

 

333,717

21.7

%

 

289,535

19.1

%

Total Deposits

$

1,522,411

100.0

%

$

1,537,313

100.0

%

$

1,538,250

100.0

%

$

1,533,314

100.0

%

$

1,515,370

100.0

%

FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2nd Qtr.

 

1st Qtr.

 

4th Qtr.

 

3rd Qtr.

 

2nd Qtr.

 

 

 

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

Allowance for Credit Losses
Balance at beginning of period

$

15,627

 

$

15,525

 

$

15,602

 

$

14,739

 

$

13,089

 

CECL transition provision

 

250

 

Provision for credit losses

 

-

 

 

-

 

 

910

 

 

1,600

 

Charge-offs

 

(11

)

 

(159

)

 

(90

)

 

(89

)

 

-

 

Recoveries

 

10

 

 

11

 

 

13

 

 

42

 

 

50

 

Balance at the end of period

$

15,626

 

$

15,627

 

$

15,525

 

$

15,602

 

$

14,739

 

 
Nonperforming Assets:¹
Over 90 days still accruing

$

39

 

$

-

 

$

6,006

 

$

-

 

$

-

 

Nonaccrual loans

 

645

 

 

636

 

 

801

 

 

690

 

 

2,532

 

Total nonperforming loans

 

684

 

 

636

 

 

6,807

 

 

690

 

 

2,532

 

 
Other real estate owned

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total nonperforming assets

$

684

 

$

636

 

$

6,807

 

$

690

 

$

2,532

 

 
Classified Assets:¹
Substandard

$

10,491

 

$

7,673

 

$

8,165

 

$

9,146

 

$

11,133

 

Doubtful

 

-

 

 

-

 

 

-

 

Loss

 

-

 

Total classified loans

$

10,491

 

$

7,673

 

$

8,165

 

$

9,146

 

$

11,133

 

 
Other real estate owned

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total classified assets

$

10,491

 

$

7,673

 

$

8,165

 

$

9,146

 

$

11,133

 

 
Performing TDR loans:¹

$

7,220

 

$

4,332

 

$

4,471

 

$

4,797

 

$

4,744

 

 
Delinquent Loans:¹
Loans 30-89 days past due

$

4,420

 

$

3,551

 

$

381

 

$

3,936

 

$

11,553

 

90 days or more past due and still accruing

 

39

 

 

-

 

 

6,006

 

 

-

 

 

-

 

Nonaccrual

 

645

 

 

636

 

 

801

 

 

690

 

 

2,532

 

Total delinquent loans

$

5,104

 

$

4,187

 

$

7,188

 

$

4,626

 

$

14,085

 

 
Asset Quality Ratios:
Net (recoveries) charge-offs to average loans²

 

0.00

%

 

0.04

%

 

0.02

%

 

0.01

%

 

(0.01

%)

Nonaccrual loans to loans held-for-investment

 

0.05

%

 

0.05

%

 

0.06

%

 

0.05

%

 

0.20

%

Nonperforming loans to loans held-for-investment

 

0.06

%

 

0.05

%

 

0.53

%

 

0.05

%

 

0.20

%

Nonperforming assets to total assets

 

0.04

%

 

0.03

%

 

0.38

%

 

0.04

%

 

0.14

%

Classified loans to loans held-for-investment

 

0.87

%

 

0.63

%

 

0.64

%

 

0.73

%

 

0.88

%

Classified loans to Tier 1 and ACL

 

4.44

%

 

3.35

%

 

3.67

%

 

4.24

%

 

5.32

%

Classified assets to total assets

 

0.58

%

 

0.42

%

 

0.45

%

 

0.51

%

 

0.63

%

Classified assets to Tier 1 and ACL

 

4.44

%

 

3.35

%

 

3.67

%

 

4.24

%

 

5.32

%

ACL to loans held-for-investment

 

1.30

%

 

1.28

%

 

1.21

%

 

1.24

%

 

1.17

%

ACL to nonaccrual loans

 

2422.64

%

 

2457.08

%

 

1938.20

%

 

2261.16

%

 

582.11

%

ACL to nonperforming loans

 

2284.50

%

 

2457.08

%

 

228.07

%

 

2261.16

%

 

582.11

%

ACL to nonperforming assets

 

2284.50

%

 

2457.08

%

 

228.07

%

 

2261.16

%

 

582.11

%

Texas ratio ³

 

0.29

%

 

0.28

%

 

3.06

%

 

0.32

%

 

1.21

%

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

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

Regulatory

 

BASEL III

 

 

 

 

 

 

 

 

 

 

 

 

Requirement

 

Fully Phased In

 

 

2023

 

 

 

2023

 

 

 

2022

 

 

 

2022

 

 

 

2022

 

 
Leverage ratio
Company

N/A

 

N/A

 

 

12.23

%

 

11.86

%

 

11.71

%

 

11.25

%

 

10.80

%

Bank

5.00

%

4.00

%

 

12.20

%

 

11.82

%

 

11.67

%

 

11.15

%

 

10.73

%

Common equity tier 1 risk-based capital ratio
Company

N/A

 

N/A

 

 

17.08

%

 

16.15

%

 

14.92

%

 

14.82

%

 

14.47

%

Bank

6.50

%

7.00

%

 

17.03

%

 

16.10

%

 

14.87

%

 

14.70

%

 

14.38

%

Tier 1 risk-based capital ratio
Company

N/A

 

N/A

 

 

17.08

%

 

16.15

%

 

14.92

%

 

14.82

%

 

14.47

%

Bank

8.00

%

8.50

%

 

17.03

%

 

16.10

%

 

14.87

%

 

14.70

%

 

14.38

%

Total risk-based capital ratio
Company

N/A

 

N/A

 

 

18.32

%

 

17.37

%

 

16.08

%

 

16.02

%

 

15.63

%

Bank

10.00

%

10.50

%

 

18.27

%

 

17.31

%

 

16.03

%

 

15.89

%

 

15.53

%

 
Tangible common equity/total assets

 

12.15

%

 

11.75

%

 

11.44

%

 

11.14

%

 

10.96

%

Tangible common equity per share

$

20.85

 

$

20.18

 

$

19.59

 

$

18.95

 

$

18.68

 

FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12
(Dollars in thousands)
           
Three Months Ended
June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 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

$

1,444,608

 

$

24,661

 

6.85

%

$

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

%

Investment securities ²

 

67,958

 

 

595

 

3.51

%

 

70,146

 

 

577

 

3.34

%

 

73,371

 

 

552

 

2.98

%

 

77,304

 

 

543

 

2.79

%

 

78,709

 

 

488

 

2.49

%

Interest-earning deposits at the FRB and other banks

 

258,236

 

 

3,296

 

5.12

%

 

190,692

 

 

2,178

 

4.63

%

 

180,358

 

 

1,666

 

3.66

%

 

246,955

 

 

1,398

 

2.25

%

 

286,974

 

 

599

 

0.84

%

Other earning assets

 

10,825

 

 

163

 

6.04

%

 

10,121

 

 

164

 

6.57

%

 

10,121

 

 

169

 

6.62

%

 

10,121

 

 

145

 

5.68

%

 

9,861

 

 

129

 

5.25

%

Total interest-earning assets ²

 

1,781,627

 

 

28,715

 

6.46

%

 

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

%

           
NONINTEREST-EARNING ASSETS          
Cash and due from banks

 

12,792

 

 

 

14,262

 

 

 

15,632

 

 

 

17,429

 

 

 

14,866

 

 
Other noninterest-earning assets

 

34,060

 

 

 

36,643

 

 

 

38,529

 

 

 

40,251

 

 

 

38,621

 

 
Total noninterest-earning assets

 

46,852

 

 

 

50,905

 

 

 

54,161

 

 

 

57,680

 

 

 

53,487

 

 
           
Less: Allowance for credit losses

 

(15,627

)

 

 

(15,552

)

 

 

(15,581

)

 

 

(14,756

)

 

 

(13,126

)

 
           
TOTAL ASSETS

$

1,812,852

 

 

$

1,808,390

 

 

$

1,775,530

 

 

$

1,790,936

 

 

$

1,805,873

 

 
           
INTEREST-BEARING DEPOSITS          
Interest-bearing demand

$

14,522

 

$

7

 

0.19

%

$

18,021

 

$

9

 

0.20

%

$

20,352

 

$

10

 

0.19

%

$

23,461

 

$

8

 

0.14

%

$

26,781

 

$

4

 

0.06

%

Money market

 

192,872

 

 

1,414

 

2.94

%

 

231,865

 

 

1,469

 

2.57

%

 

288,611

 

 

1,433

 

1.97

%

 

316,964

 

 

894

 

1.12

%

 

308,377

 

 

443

 

0.58

%

Savings

 

63,786

 

 

324

 

2.04

%

 

55,576

 

 

164

 

1.20

%

 

61,152

 

 

96

 

0.62

%

 

71,519

 

 

85

 

0.47

%

 

75,306

 

 

59

 

0.31

%

Time deposits

 

839,198

 

 

8,068

 

3.86

%

 

797,072

 

 

6,410

 

3.26

%

 

625,823

 

 

3,020

 

1.91

%

 

556,919

 

 

1,401

 

1.00

%

 

523,504

 

 

746

 

0.57

%

Total interest-bearing deposits

 

1,110,378

 

 

9,813

 

3.54

%

 

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

%

           
Borrowings

 

50,000

 

 

117

 

0.94

%

 

50,000

 

 

116

 

0.94

%

 

50,001

 

 

118

 

0.94

%

 

50,001

 

 

119

 

0.94

%

 

50,000

 

 

117

 

0.94

%

Total interest-bearing liabilities

 

1,160,378

 

 

9,930

 

3.43

%

 

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

%

           
Noninterest-bearing deposits

 

411,432

 

 

 

425,190

 

 

 

507,719

 

 

 

555,291

 

 

 

611,395

 

 
Other liabilities

 

20,934

 

 

 

16,947

 

 

 

14,732

 

 

 

14,596

 

 

 

15,818

 

 
           
Stockholders' equity

 

220,108

 

 

 

213,719

 

 

 

207,140

 

 

 

202,185

 

 

 

194,692

 

 
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,812,852

 

 

$

1,808,390

 

 

$

1,775,530

 

 

$

1,790,936

 

 

$

1,805,873

 

 
           
Net interest income²

$

18,785

 

$

19,130

 

$

20,117

 

$

18,878

 

$

16,490

 
           
Net interest spread  

3.03

%

 

3.37

%

 

3.89

%

 

3.87

%

 

3.50

%

           
Effect of noninterest-bearing sources  

1.20

%

 

1.01

%

 

0.70

%

 

0.41

%

 

0.25

%

           
Net interest margin²  

4.23

%

 

4.38

%

 

4.59

%

 

4.28

%

 

3.75

%

           
           
Cost of deposits

$

1,521,810

 

$

9,813

 

2.59

%

$

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

%

           
Cost of funds

$

1,571,810

 

$

9,930

 

2.53

%

$

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

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
June 30,2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
 
Contractual yield

$

23,767

 

6.60

%

$

23,643

 

6.38

%

$

21,534

 

5.80

%

$

18,134

 

5.09

%

$

15,496

4.47

%

SBA discount accretion

 

1,124

 

0.31

%

 

937

 

0.25

%

 

1,172

 

0.32

%

 

1,078

 

0.30

%

 

1,035

0.30

%

Prepayment penalties & late fees

 

60

 

0.02

%

 

30

 

0.01

%

 

17

 

0.00

%

 

94

 

0.03

%

 

56

0.02

%

Amortization of net deferred costs

 

(290

)

-0.08

%

 

(231

)

-0.06

%

 

(316

)

-0.09

%

 

(7

)

0.00

%

 

56

0.01

%

As reported yield on loans

$

24,661

 

6.85

%

$

24,379

 

6.58

%

$

22,407

 

6.03

%

$

19,299

 

5.42

%

$

16,643

4.80

%

MARGIN ANALYSIS (Unaudited) - Table 14

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

June 30,2023

 

June 30,2022

 

Avg Balance

 

Interest

 

Yield

 

Avg Balance

 

Interest

 

Yield

Number of Days in the Period        
INTEREST-EARNING ASSETS        
Loans Receivable ¹

$

1,473,184

 

 

$

49,040

 

6.71

%

$

1,379,540

 

 

$

32,995

 

4.82

%

Investment securities ²

 

69,046

 

 

 

1,172

 

3.42

%

 

80,752

 

 

 

959

 

2.39

%

Interest-earning deposits at the FRB and other banks

 

224,651

 

 

 

5,474

 

4.91

%

 

288,018

 

 

 

740

 

0.52

%

Other earning assets

 

10,475

 

 

 

327

 

6.30

%

 

9,358

 

 

 

248

 

5.34

%

Total interest-earning assets ²

 

1,777,356

 

 

 

56,013

 

6.36

%

 

1,757,668

 

 

 

34,942

 

4.01

%

         
NONINTEREST-EARNING ASSETS        
Cash and due from banks

 

13,523

 

   

 

14,106

 

   
Other noninterest-earning assets

 

35,296

 

   

 

37,674

 

   
Total noninterest-earning assets

 

48,819

 

   

 

51,780

 

   
         
Less: Allowance for credit losses

 

(15,590

)

   

 

(13,660

)

   
         
TOTAL ASSETS

$

1,810,585

 

   

$

1,795,788

 

   
         
INTEREST-BEARING DEPOSITS        
Interest-bearing demand

$

16,261

 

 

$

16

 

0.20

%

$

27,110

 

 

$

7

 

0.05

%

Money market

 

212,261

 

 

 

2,883

 

2.74

%

 

314,999

 

 

 

799

 

0.51

%

Savings

 

59,704

 

 

 

488

 

1.65

%

 

76,132

 

 

 

120

 

0.32

%

Time deposits

 

818,251

 

 

 

14,478

 

3.57

%

 

526,446

 

 

 

1,419

 

0.54

%

Total interest-bearing deposits

 

1,106,477

 

 

 

17,865

 

3.26

%

 

944,687

 

 

 

2,345

 

0.50

%

         
Borrowings

 

50,000

 

 

 

233

 

0.94

%

 

50,000

 

 

 

233

 

0.94

%

Total interest-bearing liabilities

 

1,156,477

 

 

 

18,098

 

3.16

%

 

994,687

 

 

 

2,578

 

0.52

%

         
Noninterest-bearing deposits

 

418,273

 

   

 

593,071

 

   
Other Liabilities

 

18,904