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CBB Bancorp, Inc. Reports Third Quarter 2022 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 third quarter 2022 of $5.7 million, or $.54 per diluted share, a decrease of 11.3% compared to $6.5 million, or $.62 per diluted share, in the prior quarter and a decrease of 27.3% compared to $7.9 million, or $.75 per diluted share, in the same period last year.

Overall Results

Net income for third quarter 2022 was lower than prior periods due to the absence of SBA loan sales during the period. The recent volatility in pricing for SBA loans in the secondary market and the higher value of holding the variable-rate assets until the premiums stabilize were the two reasons for temporarily suspending the SBA loans sales. Net interest margin improved from the prior quarter, but the reduction in gains on SBA loan sales affected the return ratios for the period. Our return on average assets for third quarter 2022 was 1.27% compared to 1.43% for second quarter 2022 and 1.73% for third quarter 2021. Our return on average equity for third quarter 2022 was 11.24%, compared to 13.30% for second quarter 2022 and 17.87% for third quarter 2021. Our net interest margin for third quarter 2022 was 4.28%, compared to 3.75% for second quarter 2022 and 3.62% for third quarter 2021.

James Hong, President and CEO, commented, “In spite of the uncertainty in the markets caused by rising interest rates, we continue to see opportunities to add to our core earnings going forward through the addition of quality loan and deposit customers. We remain committed to continued growth while managing the risks of a more uncertain economic environment for the coming year.”

Net Interest Income and Margin

Net Interest Income

Net interest income for third quarter 2022 was $18.8 million, an increase of $2.4 million, or 14.5%, from second quarter 2022, and an increase of $2.7 million, or 16.9%, from third quarter 2021. The increase in net interest income compared with the prior quarter was driven by the increase in loans held for sale, as well as increased variable rate asset yields due to recent increases in interest rates by the Federal Reserve Bank.

Net Interest Margin

Our net interest margin for third quarter 2022 was 4.28%, compared to 3.75% for second quarter 2022 and 3.62% for third quarter 2021. The increase in net interest margin compared to second quarter 2022 was due to increased loan yields as well as interest income on cash and due from banks balances. Variable Rate loans comprised 45.6% of the loan portfolio at September 30, 2022. Our cost of funds for third quarter 2022 increased to 0.63% from 0.34% for second quarter 2022 and from 0.33% for third quarter 2021, as the rising interest rate environment has affected costs for both money market accounts and certificates of deposit.

Provision for Loan Losses:

The Company had a provision for loan losses for third quarter 2022 of $0.9 million, compared to $1.6 million for second quarter 2022 and no provision for loan losses for third quarter 2021. The provision recorded for the current quarter was due both loan growth and an increase of potential risks in the economy. See Table 10 in this press release for additional information and trends.

Noninterest Income:

Noninterest income for third quarter 2022 was $1.2 million, compared to $4.5 million for second quarter 2022 and $5.5 million for third quarter 2021. The decrease in noninterest income in third quarter 2022 was primarily the result of decreased gains on sales of loans. There were no sales of SBA loans during the third quarter of 2022, compared with SBA loan sales of $50.8 million with an average premium percentage received of 8.0% during the second quarter of 2022 and SBA loan sales of $42.0 million with an average premium percentage received of 11.5% during the third quarter of 2021.

Noninterest Expense:

Noninterest expense for third quarter 2022 was $11.2 million, compared to $10.4 million for second quarter 2022 and $10.6 million for third quarter 2021The increase in other expenses compared to the second quarter of 2022 was due to a credit to expense that occurred in the second quarter of $800 thousand. That credit related to the reversal of an earlier provision for probable loss on the anticipated repurchase of SBA loans sold. The noninterest expense in the third quarter of 2022 compared to the same period of 2021 increased by $553 thousand, or 5.2%. Salaries and employee benefits were substantially unchanged at $6.9 million in third quarter 2022 compared with the prior quarter, and up from $6.5 million in the third quarter of 2021.

Income Taxes:

The Company’ s effective tax rate for third quarter 2022 was 28.3% compared to 28.3% for second quarter 2022 and 28.6% for third quarter 2021.

Balance Sheet:

Investment Securities:

Investment securities were $75.8 million on September 30, 2022, a decrease of $1.6 million from June 30, 2022, and $10.6 million from September 30, 2021. The decreases were due to principal paydowns along with an increase in unrealized loss on securities available for sale. There were no portfolio additions in third quarter 2022, or in the comparable period of 2021.

Loans Receivable:

Loans receivable (including loans held for sale) on September 30, 2022 were $1.4 billion, an increase of $45.0 million, or 3.2%, from loans receivable at June 30, 2022, and an increase of $54.8 million, or 3.9%, from loans receivable at September 30, 2021. The increase in loan balances compared with earlier periods was primarily due to the increase in SBA loans held for sale, which typically yield between 1% and 2.50% over the prime rate.

Our weighted average loan-to-value ratio of commercial real estate loans was 69.3% at September 30, 2022. Excluding SBA loans, our weighted average loan-to-value ratio of CRE loans was 53.4%. For additional information, please go to www.cbb-bank.com under tab “About Us” and select “Investors Relations” to see 3Q 2022 Overview.

Allowance for Loan Losses and Asset Quality:

Our allowance for loan losses at September 30, 2022 was $15.6 million, or 1.24% of portfolio loans, compared to $14.7 million, or 1.17% of portfolio loans, at June 30 2022 and compared to $15.0 million, or 1.19% of portfolio loans, at September 30, 2021. Excluding Paycheck Protection Program (PPP) loans of $2.0 million, which are government guaranteed, the allowance for loan losses at September 30, 2022 was 1.24%, compared to 1.18% and 1.26%, respectively, at June 30 2022 and September 30, 2021. Non-performing loans were $690 thousand at September 30, 2022, compared to $2.5 million at June 30, 2022 and $768 thousand at September 30, 2021. Loans with payment deferments are considered to be performing loans in accordance with regulatory guidance. For additional information, please go to www.cbb-bank.com under tab “About Us” and select “Investors Relations” to see 3Q 2022 Overview.

SBA Loans Held for Sale:

SBA loans held for sale at September 30, 2022 were $186.4 million, compared to $141.1 million at June 30 2022 and $136.4 million at September 30, 2021. 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 September 30, 2022, up $17.9 million, or 1.2%, from June 30 2022 and down $132.7 million, or 8.0%, from September 30, 2021. Noninterest-bearing demand deposits (“DDAs”) decreased $4.6 million, or 0.8%, to $562.0 million at September 30, 2022 from June 30 2022 and decreased $108.4 million, or 16.2%, from September 30, 2021. DDAs were 36.7% of total deposits at September 30, 2022, compared to 37.4% at June 30 2022 and 40.2% at September 30, 2021. NOW and MMDA accounts decreased $13.8 million, or 4.2%, to $313.7 million at September 30, 2022 from June 30 2022 and decreased $62.8 million, or 16.7%, from September 30, 2021. Time deposits increased $45.9 million, or 8.6%, at September 30, 2022 from June 30 2022 and increased $48.0 million, or 9.0%, from September 30, 2021. Time deposits at September 30, 2022 were $580.6 million, or 37.8% of total deposits, compared to $534.7 million, or 35.3% of total deposits, at June 30, 2022, and $532.6 million, or 32.1% of total deposits, at September 30, 2021. The primary cause of the decreases in noninterest bearing deposit balances during 2022 compared with the comparable period of 2021 was a decline in escrow-related deposits. The reduction in escrow related deposits is due to both the impact of the rising interest rate environment, and reduced marketing efforts in this area.

Borrowings:

Borrowings at September 30, 2022, June 30, 2022 and September 30, 2021 consisted of $50.0 million of Federal Home Loan Bank of San Francisco advances at each date.

Capital:

Stockholders’ equity was $202.7 million at September 30, 2022, representing an increase of $5.6 million, or 2.9%, over stockholders’ equity of $197.1 million at June 30, 2022. Tangible book value per share at September 30, 2022 was $18.95, compared with $18.68 at June 30, 2022, an increase of $0.27 per share or 1.5%.

All of our regulatory capital ratios continue to exceed the minimum levels required to be considered “Well Capitalized” as defined for bank regulatory purposes and in compliance with the fully phased-in Basel III capital requirements, as shown in Table 11 in this press release. Our Common Equity Tier 1 risked-based capital at September 30, 2022 was 14.82% at the Company level and 14.70% 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 September 30, 2022, 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 tab “About Us” and select “Investors Relations” to see 3Q 2022 Overview.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements. These statements typically include words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar terms and phrases, including references to assumptions. You should not place undue reliance on such statements. Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management’s experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the anticipated future results expressed or implied by such forward-looking statements. Factors that could affect our results include, without limitation, the following: the timing and occurrence or non-occurrence of anticipated events may be subject to circumstances beyond the Company’s control; increases in competitive pressure among financial institutions or from non-financial institutions may occur; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company and the Bank; significant increases in loan losses may occur; changes in accounting principles, policies or guidelines may cause the Company’s financial condition to be perceived differently by investors and stock market analysts; changes in corporate and/or individual income tax laws may adversely affect the Company’s financial condition or results of operations or the results of operations or behavior of our loan and deposit customers; changes in general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, the effects of the COVID-19 pandemic, and of other widespread outbreaks of disease or pandemics, together with related impacts on general economic conditions, including adverse impacts on our customers’ ability to make timely payments on their loans from us, reduced fee income due to reduced loan origination activity, reductions in or absence of gains on loan sales due to uncertainty in the loan sale market, and increased operating expense due to required changes in how we conduct our business may adversely affect us; conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company’s business; technological changes may be more difficult or expensive to implement or accommodate than the Company anticipates; there may be failures or breaches of our information technology security systems or those of our third party service providers; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates; we may encounter greater difficulty, delay and expense than we anticipate in integrating the personnel and operations of Ohana Pacific Bank or any other companies we acquire. The Company undertakes no obligation to revise any forward-looking statement contained herein to reflect any future 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 Nine Months Ended

September 30,

 

June 30,

 

$

%

 

September 30,

 

$

%

 

September 30,

 

September 30,

 

$

%

 

 

 

2022

 

 

 

2022

 

 

Change

Change

 

 

2021

 

 

Change

Change

 

 

2022

 

 

 

2021

 

 

Change

Change

 
Interest income

$

21,334

 

$

17,807

 

$

3,527

 

19.8

%

$

17,437

 

$

3,897

 

22.3

%

$

56,173

 

$

46,732

 

$

9,441

 

20.2

%

Interest expense

 

2,507

 

 

1,369

 

 

1,138

 

83.1

%

 

1,337

 

 

1,170

 

87.5

%

 

5,085

 

 

4,228

 

 

857

 

20.3

%

Net interest income

 

18,827

 

 

16,438

 

 

2,389

 

14.5

%

 

16,100

 

 

2,727

 

16.9

%

 

51,088

 

 

42,504

 

 

8,584

 

20.2

%

 
Provision for loan losses

 

910

 

 

1,600

 

 

(690

)

(43.1

%)

 

-

 

 

910

 

100.0

%

 

1,343

 

 

500

 

 

843

 

168.6

%

Net interest income after provision for loan losses

 

17,917

 

 

14,838

 

 

3,079

 

20.8

%

 

16,100

 

 

1,817

 

11.3

%

 

49,745

 

 

42,004

 

 

7,741

 

18.4

%

 
Gain on sale of loans

 

-

 

 

3,298

 

 

(3,298

)

(100.0

%)

 

4,305

 

 

(4,305

)

(100.0

%)

 

7,966

 

 

10,749

 

 

(2,783

)

(25.9

%)

Gain (loss) on sale of OREO

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

-

 

SBA servicing fee income, net

 

709

 

 

778

 

 

(69

)

(8.9

%)

 

698

 

 

11

 

1.6

%

 

1,956

 

 

2,167

 

 

(211

)

(9.7

%)

Reversal of valuation allowance on servicing assets

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

-

 

Service charges and other income

 

518

 

 

462

 

 

56

 

12.1

%

 

540

 

 

(22

)

(4.1

%)

 

1,478

 

 

1,314

 

 

164

 

12.5

%

Noninterest income

 

1,227

 

 

4,538

 

 

(3,311

)

(73.0

%)

 

5,543

 

 

(4,316

)

(77.9

%)

 

11,400

 

 

14,230

 

 

(2,830

)

(19.9

%)

 
Salaries and employee benefits

 

6,861

 

 

6,994

 

 

(133

)

(1.9

%)

 

6,500

 

 

361

 

5.6

%

 

20,920

 

 

17,353

 

 

3,567

 

20.6

%

Occupancy and equipment

 

1,118

 

 

1,114

 

 

4

 

0.4

%

 

1,067

 

 

51

 

4.8

%

 

3,352

 

 

2,991

 

 

361

 

12.1

%

Marketing expense

 

489

 

 

511

 

 

(22

)

(4.3

%)

 

287

 

 

202

 

70.4

%

 

1,485

 

 

883

 

 

602

 

68.2

%

Professional expense

 

519

 

 

517

 

 

2

 

0.4

%

 

495

 

 

24

 

4.8

%

 

1,451

 

 

1,441

 

 

10

 

0.7

%

Merger related expense

 

47

 

 

123

 

 

(76

)

(61.8

%)

 

450

 

 

(403

)

(89.6

%)

 

170

 

 

1,731

 

 

(1,561

)

(90.2

%)

Other expenses

 

2,125

 

 

1,114

 

 

1,011

 

90.8

%

 

1,807

 

 

318

 

17.6

%

 

5,035

 

 

4,463

 

 

572

 

12.8

%

Noninterest expense

 

11,159

 

 

10,373

 

 

786

 

7.6

%

 

10,606

 

 

553

 

5.2

%

 

32,413

 

 

28,862

 

 

3,551

 

12.3

%

 
Income before income tax expense

 

7,985

 

 

9,003

 

 

(1,018

)

(11.3

%)

 

11,037

 

 

(3,052

)

(27.7

%)

 

28,732

 

 

27,372

 

 

1,360

 

5.0

%

 
Income tax expense

 

2,258

 

 

2,547

 

 

(289

)

(11.3

%)

 

3,156

 

 

(898

)

(28.5

%)

 

8,141

 

 

7,854

 

 

287

 

3.7

%

 
Net income

$

5,727

 

$

6,456

 

$

(729

)

(11.3

%)

$

7,881

 

$

(2,154

)

(27.3

%)

$

20,591

 

$

19,518

 

$

1,073

 

5.5

%

 
Effective tax rate

 

28.3

%

 

28.3

%

 

(0.0

%)

(0.0

%)

 

28.6

%

 

(0.3

%)

(1.1

%)

 

28.3

%

 

28.7

%

 

(0.4

%)

(1.3

%)

 
Outstanding number of shares

 

10,569,601

 

 

10,416,601

 

 

153,000

 

1.5

%

 

10,284,962

 

 

284,639

 

2.8

%

 

10,569,601

 

 

10,284,962

 

 

284,639

 

2.8

%

 
Weighted average shares for basic EPS

 

10,516,394

 

 

10,305,014

 

 

211,380

 

2.1

%

 

10,279,962

 

 

236,432

 

2.3

%

 

10,371,652

 

 

10,263,523

 

 

108,129

 

1.1

%

Weighted average shares for diluted EPS

 

10,545,544

 

 

10,409,663

 

 

135,881

 

1.3

%

 

10,427,632

 

 

117,912

 

1.1

%

 

10,476,560

 

 

10,373,645

 

 

102,915

 

1.0

%

 
Basic EPS

$

0.54

 

$

0.62

 

$

(0.08

)

(12.9

%)

$

0.77

 

$

(0.23

)

(29.9

%)

$

1.98

 

$

1.90

 

$

0.08

 

4.2

%

Diluted EPS

$

0.54

 

$

0.62

 

$

(0.08

)

(12.9

%)

$

0.75

 

$

(0.21

)

(28.0

%)

$

1.96

 

$

1.88

 

$

0.08

 

4.3

%

 
Return on average assets

 

1.27

%

 

1.43

%

 

(0.16

%)

(11.2

%)

 

1.73

%

 

(0.46

%)

(26.6

%)

 

1.53

%

 

1.68

%

 

(0.15

%)

(8.9

%)

Return on average equity

 

11.24

%

 

13.30

%

 

(2.06

%)

(15.5

%)

 

17.87

%

 

(6.63

%)

(37.1

%)

 

14.10

%

 

15.42

%

 

(1.32

%)

(8.6

%)

 
Efficiency ratio¹

 

55.64

%

 

49.45

%

 

6.19

%

12.5

%

 

49.00

%

 

6.64

%

13.6

%

 

51.87

%

 

50.87

%

 

1.00

%

2.0

%

Yield on interest-earning assets²

 

4.85

%

 

4.06

%

 

0.79

%

19.5

%

 

3.92

%

 

0.93

%

23.7

%

 

4.29

%

 

4.11

%

 

0.18

%

4.4

%

Cost of funds

 

0.63

%

 

0.34

%

 

0.29

%

85.3

%

 

0.33

%

 

0.30

%

90.9

%

 

0.43

%

 

0.41

%

 

0.02

%

4.9

%

Net interest margin²

 

4.28

%

 

3.75

%

 

0.53

%

14.1

%

 

3.62

%

 

0.66

%

18.2

%

 

3.91

%

 

3.74

%

 

0.17

%

4.5

%

 
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)
 
September 30, June 30, $ % September 30, $ %

 

2022

 

 

 

2022

 

 

Change

Change

 

 

2021

 

 

Change

Change

ASSETS
Cash and due from banks

$

17,232

 

$

18,087

 

$

(855

)

(4.7

%)

$

11,621

 

$

5,611

 

48.3

%

Interest-earning deposits at the FRB and other banks

 

225,044

 

 

243,072

 

 

(18,028

)

(7.4

%)

 

386,087

 

 

(161,043

)

(41.7

%)

Investment securities¹

 

75,839

 

 

77,469

 

 

(1,630

)

(2.1

%)

 

86,440

 

 

(10,601

)

(12.3

%)

Loans held-for-sale, at the lower of cost or fair value

 

186,438

 

 

141,104

 

 

45,334

 

32.1

%

 

136,394

 

 

50,044

 

36.7

%

 
Loans receivable

 

1,260,590

 

 

1,260,939

 

 

(349

)

(0.0

%)

 

1,255,814

 

 

4,776

 

0.4

%

Allowance for loan losses

 

(15,602

)

 

(14,739

)

 

(863

)

(5.9

%)

 

(15,000

)

 

(602

)

(4.0

%)

Loans receivable, net

 

1,244,988

 

 

1,246,200

 

 

(1,212

)

(0.1

%)

 

1,240,814

 

 

4,174

 

0.3

%

 
OREO

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

Restricted stock investments

 

10,121

 

 

10,111

 

 

10

 

0.1

%

 

8,850

 

 

1,271

 

14.4

%

Servicing assets

 

10,158

 

 

10,996

 

 

(838

)

(7.6

%)

 

10,392

 

 

(234

)

(2.3

%)

Goodwill

 

2,185

 

 

2,185

 

 

-

 

-

 

 

2,269

 

 

(84

)

(3.7

%)

Intangible assets

 

317

 

 

331

 

 

(14

)

(4.2

%)

 

375

 

 

(58

)

(15.5

%)

Other assets

 

27,845

 

 

28,060

 

 

(215

)

(0.8

%)

 

25,859

 

 

1,986

 

7.7

%

Total assets

$

1,800,167

 

$

1,777,615

 

$

22,552

 

1.3

%

$

1,909,101

 

$

(108,934

)

(5.7

%)

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing

$

562,051

 

$

566,610

 

$

(4,559

)

(0.8

%)

$

670,489

 

$

(108,438

)

(16.2

%)

Interest-bearing

 

971,263

 

 

948,760

 

 

22,503

 

2.4

%

 

995,574

 

 

(24,311

)

(2.4

%)

Total deposits

 

1,533,314

 

 

1,515,370

 

 

17,944

 

1.2

%

 

1,666,063

 

 

(132,749

)

(8.0

%)

 
FHLB advances and other borrowing

 

50,000

 

 

50,000

 

 

-

 

-

 

 

50,000

 

 

-

 

-

 

Other liabilities

 

14,109

 

 

15,134

 

 

(1,025

)

(6.8

%)

 

14,719

 

 

(610

)

(4.1

%)

Total liabilities

 

1,597,423

 

 

1,580,504

 

 

16,919

 

1.1

%

 

1,730,782

 

 

(133,359

)

(7.7

%)

 
Stockholders' Equity

 

202,744

 

 

197,111

 

 

5,633

 

2.9

%

 

178,319

 

 

24,425

 

13.7

%

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,800,167

 

$

1,777,615

 

$

22,552

 

1.3

%

$

1,909,101

 

$

(108,934

)

(5.7

%)

 
CAPITAL RATIOS
Leverage ratio
Company

 

11.25

%

 

10.80

%

 

0.45

%

4.1

%

 

9.61

%

 

1.63

%

17.0

%

Bank

 

11.15

%

 

10.73

%

 

0.42

%

3.9

%

 

9.60

%

 

1.55

%

16.2

%

Common equity tier 1 risk-based capital ratio
Company

 

14.82

%

 

14.47

%

 

0.35

%

2.4

%

 

13.61

%

 

1.21

%

8.9

%

Bank

 

14.70

%

 

14.38

%

 

0.32

%

2.2

%

 

13.59

%

 

1.10

%

8.1

%

Tier 1 risk-based capital ratio
Company

 

14.82

%

 

14.47

%

 

0.35

%

2.4

%

 

13.61

%

 

1.21

%

8.9

%

Bank

 

14.70

%

 

14.38

%

 

0.32

%

2.2

%

 

13.59

%

 

1.10

%

8.1

%

Total risk-based capital ratio
Company

 

16.02

%

 

15.63

%

 

0.39

%

2.5

%

 

14.86

%

 

1.16

%

7.8

%

Bank

 

15.89

%

 

15.53

%

 

0.36

%

2.3

%

 

14.84

%

 

1.06

%

7.1

%

Tangible common equity per share

$

18.95

 

$

18.68

 

$

0.27

 

1.5

%

$

17.08

 

$

1.87

 

11.0

%

Loan-to-Deposit (LTD) ratio

 

82.21

%

 

83.21

%

 

(1.00

%)

(1.2

%)

 

75.38

%

 

6.83

%

9.1

%

Nonperforming assets

$

690

 

$

2,532

 

$

(1,842

)

(72.7

%)

$

768

 

$

(78

)

(10.2

%)

Nonperforming assets as a % of loans receivable

 

0.05

%

 

0.20

%

 

-0.15

%

-75.0

%

 

0.06

%

 

(0.01

%)

(16.7

%)

ALLL as a % of loans receivable

 

1.24

%

 

1.17

%

 

0.07

%

6.0

%

 

1.19

%

 

0.05

%

4.2

%

ALLL as a % of loans receivable exc. SBA PPP loans

 

1.24

%

 

1.18

%

 

0.06

%

5.1

%

 

1.26

%

 

(0.02

%)

(1.6

%)

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

(Dollars in thousands, except per share amounts)

 
September 30, June 30, March 31, December 31, September 30,

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

 

2021

 

 
Interest income

$

21,334

 

$

17,807

 

$

17,032

 

$

17,553

 

$

17,437

 

Interest expense

 

2,507

 

 

1,369

 

 

1,209

 

 

1,265

 

 

1,337

 

Net interest income

 

18,827

 

 

16,438

 

 

15,823

 

 

16,288

 

 

16,100

 

 
Provision for loan losses

 

910

 

 

1,600

 

 

(1,167

)

 

(800

)

 

-

 

Net interest income after provision for loan losses

 

17,917

 

 

14,838

 

 

16,990

 

 

17,088

 

 

16,100

 

 
Gain on sale of loans

 

-

 

 

3,298

 

 

4,668

 

 

4,151

 

 

4,305

 

Gain (loss) on sale of OREO

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

SBA servicing fee income, net

 

709

 

 

778

 

 

469

 

 

683

 

 

698

 

Reversal of valuation allowance on servicing assets

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Service charges and other income

 

518

 

 

462

 

 

498

 

 

499

 

 

540

 

Noninterest income

 

1,227

 

 

4,538

 

 

5,635

 

 

5,333

 

 

5,543

 

 
Salaries and employee benefits

 

6,861

 

 

6,994

 

 

7,065

 

 

6,614

 

 

6,500

 

Occupancy and equipment

 

1,118

 

 

1,114

 

 

1,120

 

 

1,028

 

 

1,067

 

Marketing expense

 

489

 

 

511

 

 

485

 

 

111

 

 

287

 

Professional expense

 

519

 

 

517

 

 

415

 

 

368

 

 

495

 

Merger related expense

 

47

 

 

123

 

 

-

 

 

454

 

 

450

 

Other expenses

 

2,125

 

 

1,114

 

 

1,796

 

 

2,850

 

 

1,807

 

Noninterest expense

 

11,159

 

 

10,373

 

 

10,881

 

 

11,425

 

 

10,606

 

 
Income before income tax expense

 

7,985

 

 

9,003

 

 

11,744

 

 

10,996

 

 

11,037

 

 
Income tax expense

 

2,258

 

 

2,547

 

 

3,336

 

 

2,984

 

 

3,156

 

 
Net income

$

5,727

 

$

6,456

 

$

8,408

 

$

8,012

 

$

7,881

 

 
Effective tax rate

 

28.3

%

 

28.3

%

 

28.4

%

 

27.1

%

 

28.6

%

 
Outstanding number of shares

 

10,569,601

 

 

10,416,601

 

 

10,299,361

 

 

10,284,962

 

 

10,284,962

 

 
Weighted average shares for basic EPS

 

10,516,394

 

 

10,305,014

 

 

10,291,071

 

 

10,284,962

 

 

10,280,016

 

Weighted average shares for diluted EPS

 

10,545,544

 

 

10,409,663

 

 

10,479,488

 

 

10,424,771

 

 

10,427,687

 

 
Basic EPS

$

0.54

 

$

0.62

 

$

0.82

 

$

0.78

 

$

0.77

 

Diluted EPS

$

0.54

 

$

0.62

 

$

0.80

 

$

0.77

 

$

0.75

 

FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4
(Dollars in thousands)
 
At or for the Three Months Ended
September 30, June 30, March 31, December 31, September 30,

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

 

2021

 

 
Salaries and benefits

$

6,861

 

$

6,994

 

$

7,065

 

$

6,614

 

$

6,500

 

FTE at the end of period

 

190

 

 

199

 

 

208

 

 

205

 

 

200

 

Average FTE during the period

 

193

 

 

201

 

 

206

 

 

201

 

 

202

 

Salaries and benefits/average FTE¹

$

141

 

$

140

 

$

139

 

$

131

 

$

127

 

Salaries and benefits/average assets¹

 

1.52

%

 

1.55

%

 

1.60

%

 

1.39

%

 

1.43

%

Noninterest expense/average assets¹

 

2.47

%

 

2.30

%

 

2.47

%

 

2.40

%

 

2.33

%

 
1 Annualized
FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3
(Dollars in thousands, except per share amounts)
 
September 30, June 30, March 31, December 31, September 30,

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

 

2021

 

ASSETS
Cash and due from banks

$

17,232

 

$

18,087

 

$

14,579

 

$

7,702

 

$

11,621

 

Interest-earning deposits at the FRB and other banks

 

225,044

 

 

243,072

 

 

288,603

 

 

284,583

 

 

386,087

 

Investment securities

 

75,839

 

 

77,469

 

 

80,104

 

 

84,238

 

 

86,440

 

Loans held-for-sale, at the lower of cost or fair value

 

186,438

 

 

141,104

 

 

149,733

 

 

158,128

 

 

136,394

 

 
Loans receivable

 

1,260,590

 

 

1,260,939

 

 

1,225,739

 

 

1,241,319

 

 

1,255,814

 

Allowance for loan losses

 

(15,602

)

 

(14,739

)

 

(13,089

)

 

(14,192

)

 

(15,000

)

Loans receivable, net

 

1,244,988

 

 

1,246,200

 

 

1,212,650

 

 

1,227,127

 

 

1,240,814

 

 
OREO

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Restricted stock investments

 

10,121

 

 

10,111

 

 

8,850

 

 

8,850

 

 

8,850

 

Servicing assets

 

10,158

 

 

10,996

 

 

10,671

 

 

10,632

 

 

10,392

 

Goodwill

 

2,185

 

 

2,185

 

 

2,185

 

 

2,185

 

 

2,269

 

Intangible assets

 

317

 

 

331

 

 

346

 

 

360

 

 

375

 

Other assets

 

27,845

 

 

28,060

 

 

24,061

 

 

25,450

 

 

25,859

 

Total assets

$

1,800,167

 

$

1,777,615

 

$

1,791,782

 

$

1,809,255

 

$

1,909,101

 

 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing

$

562,051

 

$

566,610

 

$

576,378

 

$

619,774

 

$

670,489

 

Interest-bearing

 

971,263

 

 

948,760

 

 

957,633

 

 

938,338

 

 

995,574

 

Total deposits

 

1,533,314

 

 

1,515,370

 

 

1,534,011

 

 

1,558,112

 

 

1,666,063

 

 
FHLB advances

 

50,000

 

 

50,000

 

 

50,000

 

 

50,000

 

 

50,000

 

Other liabilities

 

14,109

 

 

15,134

 

 

16,687

 

 

15,901

 

 

14,719

 

Total liabilities

 

1,597,423

 

 

1,580,504

 

 

1,600,698

 

 

1,624,013

 

 

1,730,782

 

 
Stockholders' Equity

 

202,744

 

 

197,111

 

 

191,084

 

 

185,242

 

 

178,319

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,800,167

 

$

1,777,615

 

$

1,791,782

 

$

1,809,255

 

$

1,909,101

 

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

(Dollars in thousands, except per share amounts)

September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021
Balance % Balance % Balance % Balance % Balance %
 
Construction

$ 14,919

1.2%

$ 23,431

1.9%

$ 18,541

1.5%

$ 23,939

1.9%

$ 21,725

1.7%

Commercial real estate

1,050,154

83.3%

1,023,298

81.1%

976,924

79.7%

978,995

78.9%

971,387

77.3%

Commercial and industrial

128,099

10.1%

146,175

11.6%

159,111

13.0%

169,489

13.7%

198,217

15.8%

Home mortgage

57,773

4.6%

57,612

4.6%

59,836

4.9%

61,030

4.9%

60,075

4.8%

Consumer

4,839

0.4%

6,609

0.5%

7,589

0.6%

4,269

0.3%

2,185

0.2%

Gross loans

1,255,784

99.6%

1,257,125

99.7%

1,222,001

99.7%

1,237,722

99.7%

1,253,589

99.8%

 
Net deferred loan fees/costs

4,806

0.4%

3,814

0.3%

3,738

0.3%

3,597

0.3%

2,225

0.2%

Loans receivable

$ 1,260,590

100.0%

$ 1,260,939

100.0%

$ 1,225,739

100.0%

$ 1,241,319

100.0%

$ 1,255,814

100.0%

 
Loans held-for-sale

$ 186,438

$ 141,104

$ 149,733

$ 158,128

$ 136,394

Loans receivable, including loans held-for-sale

$ 1,447,028

$ 1,402,043

$ 1,375,472

$ 1,399,447

$ 1,392,208

 
FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3
(Dollars in thousands, except per share amounts)
 
Three Months Ended
September 30, June 30, March 31, December 31, September 30,

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

 

2021

 

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

$

141,104

 

$

149,733

 

$

158,128

 

$

136,394

 

$

96,554

 

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

 

49,922

 

 

43,451

 

 

43,132

 

 

68,136

 

 

82,303

 

SBA loans sold during the quarter/year

 

-

 

 

(50,845

)

 

(50,531

)

 

(42,210

)

 

(42,019

)

SBA loans principal payment, net of advance

 

(4,588

)

 

(1,235

)

 

(996

)

 

(4,193

)

 

(444

)

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

$

186,438

 

$

141,104

 

$

149,733

 

$

158,128

 

$

136,394

 

 
Gain on sale of SBA loans

$

-

 

$

3,298

 

$

4,668

 

$

4,151

 

$

4,305

 

Premium on sale (weighted average)

 

-

 

 

8.0

%

 

11.0

%

 

11.1

%

 

11.5

%

 
SBA loan production

$

69,234

 

$

56,676

 

$

54,523

 

$

82,448

 

$

93,986

 

FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3
(Dollars in thousands, except per share amounts)
 
Three Months Ended
September 30, June 30, March 31, December 31, September 30,

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

 

2021

 

 

 
 
SBA servicing assets @ beginning of the quarter/year

$

10,996

 

$

10,671

 

$

10,632

 

$

10,392

 

$

10,189

 

 
Newly added SBA servicing assets from SBA loans sold

 

-

 

 

1,081

 

 

1,052

 

 

1,006

 

 

920

 

Regular quarterly/annual servicing assets amortization

 

(471

)

 

(478

)

 

(462

)

 

(453

)

 

(421

)

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

 

(367

)

 

(278

)

 

(551

)

 

(313

)

 

(296

)

 
Subtotal before impairment

 

10,158

 

 

10,996

 

 

10,671

 

 

10,632

 

 

10,392

 

 
Reversal of valuation allowance on servicing assets

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 
SBA servicing assets @ the end of the quarter/year

$

10,158

 

$

10,996

 

$

10,671

 

$

10,632

 

$

10,392

 

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9
(Dollars in thousands, except per share amounts)
September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021
Balance % Balance % Balance % Balance % Balance %
 
Noninterest-bearing demand

$

562,051

36.7

%

$

566,610

37.4

%

$

576,378

37.6

%

$

619,774

39.8

%

$

670,489

40.2

%

Interest-bearing demand

 

10,268

0.7

%

 

12,754

0.8

%

 

12,059

0.8

%

 

10,723

0.7

%

 

10,904

0.7

%

NOW & MMDA

 

313,719

20.5

%

 

327,477

21.6

%

 

344,501

22.5

%

 

325,313

20.9

%

 

376,549

22.6

%

Savings

 

66,673

4.3

%

 

73,791

4.9

%

 

79,685

5.2

%

 

76,588

4.9

%

 

75,497

4.5

%

TCDs of $250K and under

 

246,886

16.1

%

 

245,203

16.2

%

 

253,617

16.5

%

 

259,758

16.7

%

 

264,130

15.9

%

TCDs of $250K over

 

242,700

15.8

%

 

198,518

13.1

%

 

176,754

11.5

%

 

174,939

11.2

%

 

177,477

10.7

%

Wholesale TCDs

 

91,017

5.9

%

 

91,017

6.0

%

 

91,017

5.9

%

 

91,017

5.8

%

 

91,017

5.5

%

Total Deposits

$

1,533,314

100.00

%

$

1,515,370

100.0

%

$

1,534,011

100.0

%

$

1,558,112

100.0

%

$

1,666,063

100.0

%

 
Recap:
Noninterest-bearing demand

$

562,051

36.7

%

$

566,610

37.4

%

$

576,378

37.6

%

$

619,774

39.8

%

$

670,489

40.2

%

Interest-bearing demand

 

10,268

0.7

%

 

12,754

0.8

%

 

12,059

0.8

%

 

10,723

0.7

%

 

10,904

0.7

%

NOW & MMDA

 

313,719

20.5

%

 

327,477

21.6

%

 

344,501

22.5

%

 

325,313

20.9

%

 

376,549

22.6

%

Savings

 

66,673

4.3

%

 

73,791

4.9

%

 

79,685

5.2

%

 

76,588

4.9

%

 

75,497

4.5

%

TCDs of $250K and under

 

246,886

16.1

%

 

245,203

16.2

%

 

253,617

16.5

%

 

259,758

16.7

%

 

264,130

15.9

%

Core Deposits

 

1,199,597

78.3

%

 

1,225,835

80.9

%

 

1,266,240

82.6

%

 

1,292,156

83.0

%

 

1,397,569

83.9

%

 
TCDs of $250K over

 

242,700

15.8

%

 

198,518

13.1

%

 

176,754

11.5

%

 

174,939

11.2

%

 

177,477

10.7

%

Wholesale TCDs

 

91,017

5.9

%

 

91,017

6.0

%

 

91,017

5.9

%

 

91,017

5.8

%

 

91,017

5.4

%

Noncore Deposits

 

333,717

21.7

%

 

289,535

19.1

%

 

267,771

17.4

%

 

265,956

17.0

%

 

268,494

16.1

%

Total Deposits

$

1,533,314

100.0

%

$

1,515,370

100.0

%

$

1,534,011

100.0

%

$

1,558,112

100.0

%

$

1,666,063

100.0

%

FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3
(Dollars in thousands, except per share amounts)
 
3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr.

 

2022

 

 

 

2022

 

 

 

2022

 

 

 

2021

 

 

 

2021

 

Allowance for Loan Losses
Balance at beginning of period

$

14,739

 

$

13,089

 

$

14,192

 

$

15,000

 

$

14,908

 

Provision for loan losses

 

910

 

 

1,600

 

 

(1,167

)

 

(800

)

 

-

 

Charge-offs

 

(89

)

 

-

 

 

-

 

 

(89

)

 

-

 

Recoveries

 

42

 

 

50

 

 

64

 

 

81

 

 

92

 

Balance at the end of period

$

15,602

 

$

14,739

 

$

13,089

 

$

14,192

 

$

15,000

 

 
Nonperforming Assets:¹
Over 90 days still accruing

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

Nonaccrual loans

 

690

 

 

2,532

 

 

723

 

 

747

 

 

768

 

Total nonperforming loans

 

690

 

 

2,532

 

 

723

 

 

747

 

 

768

 

 
Other real estate owned

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total nonperforming assets

$

690

 

$

2,532

 

$

723

 

$

747

 

$

768

 

 
Classified Assets:¹
Substandard

$

9,146

 

$

11,133

 

$

9,300

 

$

11,156

 

$

10,672

 

Doubtful

 

-

 

 

-

 

 

-

 

 

-

 

Loss

 

-

 

 

-

 

 

-

 

 

-

 

Total classified loans

$

9,146

 

$

11,133

 

$

9,300

 

$

11,156

 

$

10,672

 

 
Other real estate owned

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total classified assets

$

9,146

 

$

11,133

 

$

9,300

 

$

11,156

 

$

10,672

 

 
Performing TDR loans:¹

$

4,797

 

$

4,744

 

$

3,253

 

$

3,521

 

$

3,658

 

 
Delinquent Loans:¹
Loans 30-89 days past due

$

3,936

 

$

11,553

 

$

6,275

 

$

267

 

$

1,688

 

90 days or more past due and still accruing

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Nonaccrual

 

690

 

 

2,532

 

 

723

 

 

747

 

 

768

 

Total delinquent loans

$

4,626

 

$

14,085

 

$

6,998

 

$

1,014

 

$

2,456

 

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

 

0.01

%

 

(0.01

%)

 

(0.02

%)

 

0.00

%

 

(0.03

%)

Nonaccrual loans to loans receivable

 

0.05

%

 

0.20

%

 

0.06

%

 

0.06

%

 

0.06

%

Nonperforming loans to loans receivable

 

0.05

%

 

0.20

%

 

0.06

%

 

0.06

%

 

0.06

%

Nonperforming assets to total assets

 

0.04

%

 

0.14

%

 

0.04

%

 

0.04

%

 

0.04

%

Classified loans to loans receivable

 

0.73

%

 

0.88

%

 

0.76

%

 

0.90

%

 

0.85

%

Classified loans to Tier 1 and ALLL

 

4.24

%

 

5.32

%

 

4.61

%

 

5.67

%

 

5.53

%

Classified assets to total assets

 

0.51

%

 

0.63

%

 

0.52

%

 

0.62

%

 

0.56

%

Classified assets to Tier 1 and ALLL

 

4.24

%

 

5.32

%

 

4.61

%

 

5.67

%

 

5.53

%

ALLL to loans receivable

 

1.24

%

 

1.17

%

 

1.07

%

 

1.14

%

 

1.19

%

ALLL to loans receivable exc. SBA PPP loans

 

1.24

%

 

1.18

%

 

1.09

%

 

1.18

%

 

1.26

%

ALLL to nonaccrual loans

 

2261.16

%

 

582.11

%

 

1810.37

%

 

1899.87

%

 

1953.13

%

ALLL to nonperforming loans

 

2261.16

%

 

582.11

%

 

1810.37

%

 

1899.87

%

 

1953.13

%

ALLL to nonperforming assets

 

2261.16

%

 

582.11

%

 

1810.37

%

 

1899.87

%

 

1953.13

%

Texas ratio ³

 

0.32

%

 

1.21

%

 

0.36

%

 

0.38

%

 

0.40

%

 
1 Net of SBA guaranteed balance
2 Includes loans held-for-sale
3 Nonperforming assets divided by tangible common equity and ALLL
FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11
 
Well Capitalized Adequately Capitalized September 30, June 30, March 31, December 31, September 30,
Regulatory BASEL III
Requirement Fully Phased In

2022

 

2022

 

2022

 

2021

 

2021

 
Leverage ratio
Company

N/A

N/A

11.25%

10.80%

10.56%

9.55%

9.61%

Bank

5.00%

4.00%

11.15%

10.73%

10.55%

9.55%

9.60%

Common equity tier 1 risk-based capital ratio
Company

N/A

N/A

14.82%

14.47%

14.50%

13.83%

13.61%

Bank

6.50%

7.00%

14.70%

14.38%

14.50%

13.82%

13.59%

Tier 1 risk-based capital ratio
Company

N/A

N/A

14.82%

14.47%

14.50%

13.83%

13.61%

Bank

8.00%

8.50%

14.70%

14.38%

14.50%

13.82%

13.59%

Total risk-based capital ratio
Company

N/A

N/A

16.02%

15.63%

15.57%

14.98%

14.86%

Bank

10.00%

10.50%

15.89%

15.53%

15.57%

14.97%

14.84%

 
Tangible common equity/total assets

11.14%

10.96%

10.54%

10.11%

9.21%

Tangible common equity per share

$ 18.95

$ 18.68

$ 18.31

$ 17.76

$ 17.08

FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3
(Dollars in thousands, except per share amounts)
 
Three Months Ended
September 30, 2022 June 30, 2021 March 31, 2022 December 31, 2021 September 30, 2021
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 ¹

$

1,413,632

 

$

19,299

5.42

%

$

1,389,968

 

$

16,643

4.80

%

$

1,368,996

 

$

16,352

4.84

%

$

1,396,201

 

$

16,893

4.80

%

$

1,390,851

 

$

16,800

4.79

%

Investment securities²

 

77,304

 

 

543

2.79

%

 

78,709

 

 

488

2.49

%

 

82,818

 

 

471

2.31

%

 

85,555

 

 

454

2.11

%

 

87,585

 

 

460

2.08

%

Interest-earning deposits at the FRB and other banks

 

246,955

 

 

1,398

2.25

%

 

286,974

 

 

599

0.84

%

 

288,966

 

 

141

0.20

%

 

365,501

 

 

144

0.16

%

 

282,512

 

 

112

0.16

%

Other earning assets

 

10,121

 

 

145

5.68

%

 

9,861

 

 

129

5.25

%

 

8,850

 

 

119

5.45

%

 

8,850

 

 

115

5.16

%

 

8,925

 

 

116

5.16

%

Total interest-earning assets ²

 

1,748,012

 

 

21,385

4.85

%

 

1,765,512

 

 

17,859

4.06

%

 

1,749,630

 

 

17,083

3.96

%

 

1,856,107

 

 

17,606

3.76

%

 

1,769,873

 

 

17,488

3.92

%

 
NONINTEREST-EARNING ASSETS
Cash and due from banks

 

17,429

 

 

14,866

 

 

13,338

 

 

13,318

 

 

13,079

 

Other noninterest-earning assets

 

40,251

 

 

38,621

 

 

36,714

 

 

37,779

 

 

36,548

 

Total noninterest-earning assets

 

57,680

 

 

53,487

 

 

50,052

 

 

51,097

 

 

49,627

 

 
Less: Allowance for loan losses

 

(14,756

)

 

(13,126

)

 

(14,200

)

 

(14,849

)

 

(14,958

)

TOTAL ASSETS

$

1,790,936

 

$

1,805,873

 

$

1,785,482

 

$

1,892,355

 

$

1,804,542

 

 
INTEREST-BEARING DEPOSITS
Interest-bearing demand

$

23,461

 

$

8

0.14

%

$

26,781

 

$

4

0.06

%

$

27,442

 

$

3

0.04

%

$

27,904

 

$

3

0.04

%

$

36,670

 

$

4

0.04

%

Money market

 

316,964

 

 

894

1.12

%

 

308,377

 

 

443

0.58

%

 

321,694

 

 

356

0.45

%

 

338,937

 

 

401

0.47

%

 

312,606

 

 

388

0.49

%

Savings

 

71,519

 

 

85

0.47

%

 

75,306

 

 

59

0.31

%

 

76,967

 

 

61

0.32

%

 

77,057

 

 

68

0.35

%

 

74,266

 

 

71

0.38

%

Time deposits

 

556,919

 

 

1,401

1.00

%

 

523,504

 

 

746

0.57

%

 

529,421

 

 

673

0.52

%

 

527,634

 

 

674

0.51

%

 

542,901

 

 

756

0.55

%

Total interest-bearing deposits

 

968,863

 

 

2,388

0.98

%

 

933,968

 

 

1,252

0.54

%

 

955,524

 

 

1,093

0.46

%

 

971,532

 

 

1,146

0.47

%

 

966,443

 

 

1,219

0.50

%

 
Borrowings

 

50,001

 

 

119

0.94

%

 

50,000

 

 

117

0.94

%

 

50,000

 

 

116

0.94

%

 

50,000

 

 

119

0.94

%

 

50,000

 

 

118

0.94

%

Total interest-bearing liabilities

 

1,018,864

 

 

2,507

0.98

%

 

983,968

 

 

1,369

0.56

%

 

1,005,524

 

 

1,209

0.49

%

 

1,021,532

 

 

1,265

0.49

%

 

1,016,443

 

 

1,337

0.52

%

 
Noninterest-bearing deposits

 

555,291

 

 

611,395

 

 

574,436

 

 

673,154

 

 

597,056

 

Other liabilities

 

14,596

 

 

15,818

 

 

16,966

 

 

16,425

 

 

16,046

 

 
Stockholders' equity

 

202,185

 

 

194,692

 

 

188,556

 

 

181,244

 

 

174,997

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,790,936

 

$

1,805,873

 

$

1,785,482

 

$

1,892,355

 

$

1,804,542

 

 
Net interest income²

$

18,878

$

16,490

$

15,874

$

16,341

$

16,151

 
Net interest spread

3.87

%

3.50

%

3.47

%

3.27

%

3.40

%

 
Effect of noninterest-bearing sources

0.41

%

0.25

%

0.21

%

0.22

%

0.22

%

 
Net interest margin²

4.28

%

3.75

%

3.68

%

3.49

%

3.62

%

 
 
Cost of deposits

$

1,524,154

 

$

2,388

0.62

%

$

1,545,363

 

$

1,252

0.32

%

$

1,529,960

 

$

1,093

0.29

%

$

1,644,686

 

$

1,146

0.28

%

$

1,563,499

 

$

1,219

0.31

%

 
Cost of funds

$

1,574,155

 

$

2,507

0.63

%

$

1,595,363

 

$

1,369

0.34

%

$

1,579,960

 

$

1,209

0.31

%

$

1,694,686

 

$

1,265

0.30

%

$

1,613,499

 

$

1,337

0.33

%

 
1 Includes 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
September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
 
Contractual yield

$

18,134

 

5.09

%

$

15,496

4.47

%

$

14,596

4.32

%

$

15,142

4.30

%

$

15,032

4.29

%

SBA discount accretion

 

1,078

 

0.30

%

 

1,035

0.30

%

 

1,421

0.42

%

 

1,024

0.29

%

 

1,038

0.30

%

Prepayment penalties & late fees

 

94

 

0.03

%

 

56

0.02

%

 

107

0.03

%

 

72

0.02

%

 

41

0.01

%

Amortization of net deferred costs

 

(7

)

0.00

%

 

56

0.01

%

 

228

0.07

%

 

655

0.19

%

 

689

0.20

%

As reported yield on loans

$

19,299

 

5.42

%

$

16,643

4.80

%

$

16,352

4.84

%

$

16,893

4.80

%

$

16,800

4.79

%

MARGIN ANALYSIS (Unaudited) - Table 14
(Dollars in thousands)
 
Nine Months Ended
September 30,2022 September 30,2021
Avg Balance Interest Yield Avg Balance Interest Yield
Number of Days in the Period
INTEREST-EARNING ASSETS
Loans ¹

$

1,391,029

 

$

52,294

5.03

%

$

1,242,557

 

$

44,975

4.84

%

Investment securities²

 

79,590

 

 

1,502

2.52

%

 

85,149

 

 

1,350

2.12

%

Interest-earning deposits at the FRB and other banks

 

274,180

 

 

2,138

1.04

%

 

187,078

 

 

202

0.14

%

Other earning assets

 

9,615

 

 

393

5.46

%

 

8,622

 

 

348

5.40

%

Total interest-earning assets ²

 

1,754,414

 

 

56,327

4.29

%

 

1,523,406

 

 

46,875

4.11

%

 
NONINTEREST-EARNING ASSETS
Cash and due from banks

 

15,226

 

 

11,296

 

Other noninterest-earning assets

 

38,542

 

 

33,218

 

Total noninterest-earning assets

 

53,768

 

 

44,514

 

 
Less: Allowance for loan losses

 

(14,029

)

 

(14,748

)

 
TOTAL ASSETS

$

1,794,153

 

$

1,553,172

 

 
INTEREST-BEARING DEPOSITS
Interest-bearing demand

$

25,880

 

$

15

0.08

%

$

22,028

 

$

8

0.05

%

Money market

 

315,661

 

 

1,692

0.72

%

 

280,940

 

 

1,107

0.53

%

Savings

 

74,577

 

 

206

0.37

%

 

55,423

 

 

185

0.45

%

Time deposits

 

536,715

 

 

2,820

0.70

%

 

488,085

 

 

2,562

0.70

%

Total interest-bearing deposits

 

952,833

 

 

4,733

0.66

%

 

846,476

 

 

3,862

0.61

%

 
Borrowings

 

50,000

 

 

352

0.94

%

 

55,678

 

 

366

0.88

%

Total interest-bearing liabilities

 

1,002,833

 

 

5,085

0.68

%

 

902,154

 

 

4,228

0.63

%

 
Noninterest-bearing deposits

 

580,340

 

 

467,812

 

Other Liabilities

 

15,785

 

 

13,943

 

 
Stockholders' equity

 

195,195

 

 

169,263

 

 
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,794,153

 

$

1,553,172

 

 
Net interest income²

$

51,242

$

42,647

 
Net interest spread

3.61

%

3.48

%

 
Effect of noninterest-bearing sources

0.30

%

0.26

%

 
Net interest margin²

3.91

%

3.74

%

 
 
Cost of deposits

$

1,533,173

 

$

4,733

0.41

%

$

1,314,288

 

$

3,862

0.39

%

 
Cost of funds

$

1,583,173

 

$

5,085

0.43

%

$

1,369,966

 

$

4,228

0.41

%

 
1 Includes loans held-for-sale
² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate
COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 15
(Dollars in thousands)
 
Nine Months Ended
September 30, 2022 September 30, 2021
Amount Yield Amount Yield
 
Contractual yield

$

48,226

4.64

%

$

39,850

4.29

%

SBA discount accretion

 

3,534

0.34

%

 

2,803

0.30

%

Prepayment penalties & late fees

 

257

0.02

%

 

251

0.03

%

Amortization of net deferred costs

 

277

0.03

%

 

2,071

0.22

%

As reported yield on loans

$

52,294

5.03

%

$

44,975

4.84

%

 

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