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CBB Bancorp, Inc. Reports Fourth Quarter and Full Year 2022 Financial Results

CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank, doing business as CBB Bank (the "Bank"), announced today net income for fourth quarter 2022 of $7.3 million, or $0.70 per diluted share, an increase of 28.0% compared to $5.7 million, or $0.54 per diluted share, in the prior quarter and a decrease of 8.5% compared to $8.0 million, or $0.77 per diluted share, in the same period last year.

Additionally, CBB reported net income for the year ended December 31, 2022 of $27.9 million, or $2.66 per diluted share, an increase of 0.4% from the $27.5 million, or $2.65 per diluted share, of net income for the year ended December 31, 2021.

Overall Results

Net income for fourth quarter 2022 was positively impacted by an improved net interest margin and a lower loan loss reserve requirement. The Company’s annualized return on average assets for fourth quarter 2022 was 1.64% compared to 1.27% for third quarter 2022 and 1.68% for fourth quarter 2021. The annualized return on average equity for fourth quarter 2022 was 14.04% compared to 11.24% for third quarter 2022 and 17.54% for fourth quarter 2021. The net interest margin for fourth quarter 2022 was 4.59% compared to 4.28% for third quarter 2022 and 3.49% for fourth quarter 2021. The efficiency ratio for fourth quarter 2022 was 51.41% compared to 55.64% for third quarter 2022 and 52.84% for fourth quarter 2021.

“We are pleased to announce our positive earnings performance for the fourth quarter, as our earnings continue to benefit from loan growth and higher net interest income, while maintaining excellent asset quality,” said James Hong, President and CEO.

Net Interest Income and Margin:

Net Interest Income

Net interest income for fourth quarter 2022 was $20.1 million, an increase of $1.2 million, or 6.6%, from third quarter 2022, and an increase of $3.8 million, or 23.2%, from fourth quarter 2021. For the year ended December 31, 2022, net interest income was $71.2 million, an increase of $12.4 million, or 20.1%, over 2021. The increase in net interest income over the prior year was primarily driven by the increase in total loans, as well as increased variable rate asset yields resulting from recent increases in interest rates by the Federal Reserve Bank.

Net Interest Margin

Our net interest margin for fourth quarter 2022 was 4.59% compared to 4.28% for third quarter 2022 and 3.49% for fourth quarter 2021. The increase in net interest margin was due to the impact of increases in the prime and federal funds rates, which were only partially offset by rising deposit costs. For the year ended December 31, 2022, net interest margin was 4.08% compared to 3.67% in 2021. Our cost of funds increased for fourth quarter 2022 to 1.19% from 0.63% for third quarter 2022 and 0.30% for fourth quarter 2021. For the year ended December 31, 2022, the cost of funds was 0.62% compared to 0.38% in 2021.

Provision for Loan Losses:

The Company recorded no provision for loan losses for fourth quarter 2022, compared to a provision of $0.9 million for third quarter 2022 and a negative provision of $0.8 million for fourth quarter 2021. A provision for loan losses of $1.3 million was recorded for the year ended December 31, 2022, compared to a $0.3 million negative provision for the corresponding period in 2021. The zero loan loss provision during the fourth quarter of 2022 was due to continued strong performance by our borrowers, which offset any provision that would otherwise have been recorded due to loan portfolio growth. See Table 10 for additional information.

Noninterest Income:

Noninterest income for fourth quarter 2022 was $0.9 million compared to $1.2 million for third quarter 2022 and $5.3 million for fourth quarter 2021. For the year ended December 31, 2022, noninterest income was $12.3 million compared to $19.6 million in 2021. There were no sales of SBA loans during the third and fourth quarter of 2022, compared with SBA loan sales of $42.2 million with an average premium percentage received of 11.1% during the fourth quarter of 2021. For the year ended December 31, 2022, the gain on sale of SBA loans was $8.0 million compared to $14.9 million for the year 2021.

Noninterest Expense:

Noninterest expense for fourth quarter 2022 was $10.8 million compared to $11.2 million for third quarter 2022 and $11.4 million for fourth quarter 2021. The decrease in noninterest expense in the fourth quarter of 2022 was largely due to a decrease in salaries and employee benefits. Salaries and employee benefits were at $6.2 million in fourth quarter 2022, down $0.6 million from $6.9 million in the prior quarter, and down $ 0.4 million from $6.6 million in the fourth quarter of 2021.

For the year ended December 31, 2022, noninterest expense was $43.2 million compared to $40.3 million for the corresponding period in 2021 year. The increase in noninterest expense in 2022 compared to 2021 was primarily driven by an increase in salaries and employee benefits which was offset by a decrease in merger-related expenses.

Income Taxes:

The Company’s effective tax rate for fourth quarter 2022 was 28.2% compared to 28.3% for third quarter 2022 and 27.1% for fourth quarter 2021. For the year ended December 31, 2022, the effective tax rate was 28.3% compared to 28.2% in 2021.

Balance Sheet:

Investment Securities:

Investment securities were $72.6 million at December 31, 2022, a decrease from $75.8 million at September 30, 2022 and from $84.2 million from December 31, 2021. The decreases were due to net principal paydowns. There were no portfolio additions in 2022.

Loans Receivable:

Loans receivable (including loans held for sale) at December 31, 2022 was $1.5 billion, an increase of $68.7 million, or 4.7%, from September 30, 2022, and an increase of $116.3 million, or 8.3%, from December 31, 2021. The increase in loan balances in 2022 compared with 2021 can be attributed, in part, to the decision not to sell SBA loans during the period due to their attractive variable rate yields and declining premiums on sale in the market.

The weighted average loan-to-value ratio of Commercial Real Estate loans was 69.4% at December 31, 2022. Excluding SBA loans, the weighted average loan-to-value ratio of CRE loans was 53%.

Allowance for Loan Losses and Asset Quality:

The allowance for loan losses at December 31, 2022 was $15.5 million, or 1.21% of portfolio loans, compared to $15.6 million, or 1.24% of portfolio loans, at September 30, 2022. Non-performing loans as of December 31, 2022 were $6.8 million, up from $690 thousand at September 30, 2022. The increase in non-performing loans was due to $6.1 million in real estate secured loans that were in the process of payoff or refinancing at year-end. The entire $6.1 million was paid off or refinanced and returned to performing status in January 2023. Loans payment deferments are considered performing loans in accordance with regulatory guidance. Our coverage ratio of allowance for loan losses to nonperforming assets continues to exceed 1900%.

SBA Loans Held for Sale:

SBA loans held for sale at December 31, 2022 were $230.4 million, compared to $186.4 million at September 30 2022 and $158.1 million at December 31, 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 December 31, 2022, up $4.9 million, or 0.3%, from September 30, 2022 and down $19.9 million, or 1.3%, from December 31, 2021. Noninterest-bearing demand deposits (DDAs) decreased $110.4 million, or 19.6%, from September 30, 2022 and decreased $168.1 million, or 27.1%, from December 31, 2021. DDAs were 30.0% of total deposits at December 31, 2022 compared to 37.3% at September 30, 2022 and 40.5% at December 31, 2021. The decrease in DDA deposits in the fourth quarter of 2022 was primarily due to a decrease in escrow related deposits, which have been adversely affected by the higher interest rate environment.

NOW and MMDA decreased $39.2 million, or 12.5%, from September 30, 2022 and $50.8 million, or 15.6% from December 31, 2021. Time deposits increased $169.8 million, or 29.2%, from September 30, 2022 and increased $224.6 million, or 42.7%, from December 31, 2021. Our time deposits at December 30, 2022 were $750.4 million, or 48.7% of total deposits, up from $580.6 million, or 37.9% of total deposits, at September 30, 2022 and up from $525.7 million, or 33.7% of total deposits, at December 31, 2021. The increases in time deposits during the fourth quarter of 2022 reflects a shift in depositors’ preferences for the higher rate term deposits over money market rates as rates have risen in the second half of 2022.

Borrowings:

Borrowings at December 31, 2022, September 30, 2022 and December 31, 2021 consisted of $50.0 million of Federal Home Loan Bank of San Francisco (FHLB-SF) advances at each date.

Capital:

Stockholders’ equity was $209.5 million at December 31, 2022, representing an increase of $6.8 million, or 3.3%, over stockholders’ equity of $202.7 million at September 30, 2022. Tangible book value per share at December 31, 2022 was $19.59 compared to $18.95 at September 30, 2022, an increase of $0.64 per share, or 3.4%.

Each of the Company’s and the Bank’s regulatory capital ratios increased at December 31, 2022 from September 30, 2022 and from December 31, 2021 and continue to exceed the minimum levels required to be considered “Well Capitalized” under the applicable regulatory capital rules and remain in compliance with the fully phased-in Basel III requirements, which went into effect on January 1, 2021, as shown on Table 11 in this press release. The Common Equity Tier 1 risked-based capital ratio at December 31, 2022 was 14.92% at the Company level and 14.87% 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 December 31, 2022, the Bank has ten full-service banking offices in Los Angeles and Orange Counties in California, Dallas County in Texas and Honolulu, Hawaii; three 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 4Q 2022 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 for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. 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. Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this news release. Factors that might cause such differences include, but are not limited to: the Company’s ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally, in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company’s operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

Schedules and Financial Data: All tables and data to follow

STATEMENT OF INCOME AND PERFORMANCE HIGHLIGHT (Unaudited) - Table 1
(Dollars in thousands, except per share amounts)

Three Months Ended

 

Twelve Months Ended

December 31,

 

September 30,

 

$

%

 

December 31,

 

$

%

 

December 31,

 

December 31,

 

$

%

2022

 

2022

 

Change

Change

 

2021

 

Change

Change

 

2022

 

2021

 

Change

Change

 
Interest income

$

24,744

 

$

21,334

 

$

3,410

 

16.0

%

$

17,553

 

$

7,191

 

41.0

%

$

80,917

 

$

64,285

 

$

16,632

 

25.9

%

Interest expense

 

4,677

 

 

2,507

 

 

2,170

 

86.6

%

 

1,265

 

 

3,412

 

269.7

%

 

9,762

 

 

5,493

 

 

4,269

 

77.7

%

Net interest income

 

20,067

 

 

18,827

 

 

1,240

 

6.6

%

 

16,288

 

 

3,779

 

23.2

%

 

71,155

 

 

58,792

 

 

12,363

 

21.0

%

 
Provision for loan losses

 

-

 

 

910

 

 

(910

)

(100.0

%)

 

(800

)

 

800

 

(100.0

%)

 

1,343

 

 

(300

)

 

1,643

 

(547.7

%)

Net interest income after provision for loan losses

 

20,067

 

 

17,917

 

 

2,150

 

12.0

%

 

17,088

 

 

2,979

 

17.4

%

 

69,812

 

 

59,092

 

 

10,720

 

18.1

%

 
Gain on sale of loans

 

-

 

 

-

 

 

-

 

-

 

 

4,151

 

 

(4,151

)

(100.0

%)

 

7,966

 

 

14,900

 

 

(6,934

)

(46.5

%)

Gain (loss) on sale of OREO

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

-

 

SBA servicing fee income, net

 

491

 

 

709

 

 

(218

)

(30.7

%)

 

683

 

 

(192

)

(28.1

%)

 

2,447

 

 

2,850

 

 

(403

)

(14.1

%)

Reversal of valuation allowance on servicing assets

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

-

 

Service charges and other income

 

457

 

 

518

 

 

(61

)

(11.8

%)

 

499

 

 

(42

)

(8.4

%)

 

1,935

 

 

1,813

 

 

122

 

6.7

%

Noninterest income

 

948

 

 

1,227

 

 

(279

)

(22.7

%)

 

5,333

 

 

(4,385

)

(82.2

%)

 

12,348

 

 

19,563

 

 

(7,215

)

(36.9

%)

 
Salaries and employee benefits

 

6,233

 

 

6,861

 

 

(628

)

(9.2

%)

 

6,614

 

 

(381

)

(5.8

%)

 

27,153

 

 

23,967

 

 

3,186

 

13.3

%

Occupancy and equipment

 

1,133

 

 

1,118

 

 

15

 

1.3

%

 

1,028

 

 

105

 

10.2

%

 

4,485

 

 

4,019

 

 

466

 

11.6

%

Marketing expense

 

434

 

 

489

 

 

(55

)

(11.2

%)

 

111

 

 

323

 

291.0

%

 

1,919

 

 

994

 

 

925

 

93.1

%

Professional expense

 

418

 

 

519

 

 

(101

)

(19.5

%)

 

368

 

 

50

 

13.6

%

 

1,869

 

 

1,809

 

 

60

 

3.3

%

Merger related expense

 

7

 

 

47

 

 

(40

)

(85.1

%)

 

454

 

 

(447

)

(98.5

%)

 

177

 

 

2,185

 

 

(2,008

)

(91.9

%)

Other expenses

 

2,579

 

 

2,125

 

 

454

 

21.4

%

 

2,850

 

 

(271

)

(9.5

%)

 

7,614

 

 

7,313

 

 

301

 

4.1

%

Noninterest expense

 

10,804

 

 

11,159

 

 

(355

)

(3.2

%)

 

11,425

 

 

(621

)

(5.4

%)

 

43,217

 

 

40,287

 

 

2,930

 

7.3

%

 
Income before income tax expense

 

10,211

 

 

7,985

 

 

2,226

 

27.9

%

 

10,996

 

 

(785

)

(7.1

%)

 

38,943

 

 

38,368

 

 

575

 

1.5

%

 
Income tax expense

 

2,882

 

 

2,258

 

 

624

 

27.6

%

 

2,984

 

 

(102

)

(3.4

%)

 

11,023

 

 

10,838

 

 

185

 

1.7

%

 
Net income

$

7,329

 

$

5,727

 

$

1,602

 

28.0

%

$

8,012

 

$

(683

)

(8.5

%)

$

27,920

 

$

27,530

 

$

390

 

1.4

%

 
Effective tax rate

 

28.2

%

 

28.3

%

 

(0.1

%)

(0.2

%)

 

27.1

%

 

1.1

%

4.0

%

 

28.3

%

 

28.2

%

 

0.1

%

0.2

%

 
Outstanding number of shares

 

10,569,601

 

 

10,569,601

 

 

-

 

-

 

 

10,284,962

 

 

284,639

 

2.8

%

 

10,569,601

 

 

10,284,962

 

 

284,639

 

2.8

%

 
Weighted average shares for basic EPS

 

10,569,601

 

 

10,516,394

 

 

53,207

 

0.5

%

 

10,284,962

 

 

284,639

 

2.8

%

 

10,421,546

 

 

10,268,940

 

 

152,606

 

1.5

%

Weighted average shares for diluted EPS

 

10,600,053

 

 

10,545,544

 

 

54,509

 

0.5

%

 

10,424,771

 

 

175,282

 

1.7

%

 

10,509,800

 

 

10,389,885

 

 

119,915

 

1.2

%

 
Basic EPS

$

0.70

 

$

0.54

 

$

0.16

 

29.6

%

$

0.78

 

$

(0.08

)

(10.3

%)

$

2.68

 

$

2.68

 

$

-

 

-

 

Diluted EPS

$

0.70

 

$

0.54

 

$

0.16

 

29.6

%

$

0.77

 

$

(0.07

)

(9.1

%)

$

2.66

 

$

2.65

 

$

0.01

 

0.4

%

 
Return on average assets

 

1.64

%

 

1.27

%

 

0.37

%

29.1

%

 

1.68

%

 

(0.04

%)

(2.4

%)

 

1.56

%

 

1.68

%

 

(0.12

%)

(7.1

%)

Return on average equity

 

14.04

%

 

11.24

%

 

2.80

%

24.9

%

 

17.54

%

 

(3.50

%)

(20.0

%)

 

14.09

%

 

15.98

%

 

(1.89

%)

(11.8

%)

 
Efficiency ratio¹

 

51.41

%

 

55.64

%

 

(4.23

%)

(7.6

%)

 

52.84

%

 

(1.43

%)

(2.7

%)

 

51.76

%

 

51.42

%

 

0.34

%

0.7

%

Yield on interest-earning assets²

 

5.66

%

 

4.85

%

 

0.81

%

16.7

%

 

3.76

%

 

1.90

%

50.5

%

 

4.64

%

 

4.01

%

 

0.63

%

15.7

%

Cost of funds

 

1.19

%

 

0.63

%

 

0.56

%

88.9

%

 

0.30

%

 

0.89

%

296.7

%

 

0.62

%

 

0.38

%

 

0.24

%

63.2

%

Net interest margin²

 

4.59

%

 

4.28

%

 

0.31

%

7.2

%

 

3.49

%

 

1.10

%

31.5

%

 

4.08

%

 

3.67

%

 

0.41

%

11.2

%

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)
 

December 31,

 

September 30,

 

$

%

 

December 31,

 

$

%

2022

 

2022

 

Change

Change

 

2021

 

Change

Change

ASSETS
Cash and due from banks

$

20,134

 

$

17,232

 

$

2,902

 

16.8

%

$

7,702

 

$

12,432

 

161.4

%

Interest-earning deposits at the FRB and other banks

 

170,839

 

 

225,044

 

 

(54,205

)

(24.1

%)

 

284,583

 

 

(113,744

)

(40.0

%)

Investment securities¹

 

72,550

 

 

75,839

 

 

(3,289

)

(4.3

%)

 

84,238

 

 

(11,688

)

(13.9

%)

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

 

230,431

 

 

186,438

 

 

43,993

 

23.6

%

 

158,128

 

 

72,303

 

45.7

%

 
Loans receivable

 

1,285,278

 

 

1,260,590

 

 

24,688

 

2.0

%

 

1,241,319

 

 

43,959

 

3.5

%

Allowance for loan losses

 

(15,525

)

 

(15,602

)

 

77

 

0.5

%

 

(14,192

)

 

(1,333

)

(9.4

%)

Loans receivable, net

 

1,269,753

 

 

1,244,988

 

 

24,765

 

2.0

%

 

1,227,127

 

 

42,626

 

3.5

%

 
OREO

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

Restricted stock investments

 

10,121

 

 

10,121

 

 

-

 

0.0

%

 

8,850

 

 

1,271

 

14.4

%

Servicing assets

 

9,232

 

 

10,158

 

 

(926

)

(9.1

%)

 

10,632

 

 

(1,400

)

(13.2

%)

Goodwill

 

2,185

 

 

2,185

 

 

-

 

-

 

 

2,185

 

 

-

 

0.0

%

Intangible assets

 

303

 

 

317

 

 

(14

)

(4.4

%)

 

360

 

 

(57

)

(15.8

%)

Other assets

 

26,939

 

 

27,845

 

 

(906

)

(3.3

%)

 

25,450

 

 

1,489

 

5.9

%

Total assets

$

1,812,487

 

$

1,800,167

 

$

12,320

 

0.7

%

$

1,809,255

 

$

3,232

 

0.2

%

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing

$

451,651

 

$

562,051

 

$

(110,400

)

(19.6

%)

$

619,774

 

$

(168,123

)

(27.1

%)

Interest-bearing

 

1,086,599

 

 

971,263

 

 

115,336

 

11.9

%

 

938,338

 

 

148,261

 

15.8

%

Total deposits

 

1,538,250

 

 

1,533,314

 

 

4,936

 

0.3

%

 

1,558,112

 

 

(19,862

)

(1.3

%)

 
FHLB advances and other borrowing

 

50,000

 

 

50,000

 

 

-

 

-

 

 

50,000

 

 

-

 

-

 

Other liabilities

 

14,706

 

 

14,109

 

 

597

 

4.2

%

 

15,901

 

 

(1,195

)

(7.5

%)

Total liabilities

 

1,602,956

 

 

1,597,423

 

 

5,533

 

0.3

%

 

1,624,013

 

 

(21,057

)

(1.3

%)

 
Stockholders' Equity

 

209,531

 

 

202,744

 

 

6,787

 

3.3

%

 

185,242

 

 

24,289

 

13.1

%

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,812,487

 

$

1,800,167

 

$

12,320

 

0.7

%

$

1,809,255

 

$

3,232

 

0.2

%

 
CAPITAL RATIOS
Leverage ratio
Company

 

11.71

%

 

11.25

%

 

0.46

%

4.1

%

 

9.55

%

 

2.16

%

22.6

%

Bank

 

11.67

%

 

11.15

%

 

0.52

%

4.7

%

 

9.55

%

 

2.12

%

22.2

%

Common equity tier 1 risk-based capital ratio
Company

 

14.92

%

 

14.82

%

 

0.10

%

0.7

%

 

13.83

%

 

1.09

%

7.9

%

Bank

 

14.87

%

 

14.70

%

 

0.17

%

1.2

%

 

13.82

%

 

1.04

%

7.6

%

Tier 1 risk-based capital ratio
Company

 

14.92

%

 

14.82

%

 

0.10

%

0.7

%

 

13.83

%

 

1.09

%

7.9

%

Bank

 

14.87

%

 

14.70

%

 

0.17

%

1.2

%

 

13.82

%

 

1.04

%

7.6

%

Total risk-based capital ratio
Company

 

16.08

%

 

16.02

%

 

0.06

%

0.4

%

 

14.98

%

 

1.10

%

7.3

%

Bank

 

16.03

%

 

15.89

%

 

0.14

%

0.9

%

 

14.97

%

 

1.06

%

7.1

%

Tangible common equity per share

$

19.59

 

$

18.95

 

$

0.64

 

3.4

%

$

17.76

 

$

1.83

 

10.3

%

Loan-to-Deposit (LTD) ratio

 

83.55

%

 

82.21

%

 

1.34

%

1.6

%

 

79.67

%

 

3.88

%

4.9

%

Nonperforming assets

$

6,807

 

$

690

 

$

6,117

 

886.5

%

$

747

 

$

6,060

 

811.2

%

Nonperforming assets as a % of loans receivable

 

0.53

%

 

0.05

%

 

0.48

%

960.0

%

 

0.06

%

 

0.47

%

783.3

%

ALLL as a % of loans receivable

 

1.21

%

 

1.24

%

 

(0.03

%)

(2.4

%)

 

1.14

%

 

0.07

%

6.1

%

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

 

1.21

%

 

1.24

%

 

(0.03

%)

(2.4

%)

 

1.18

%

 

0.03

%

2.5

%

1 Includes AFS and HTM

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

(Dollars in thousands, except per share amounts)

Three Months Ended

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

2022

 

2022

 

2022

 

2022

 

2021

 
Interest income

$

24,744

 

$

21,334

 

$

17,807

 

$

17,032

 

$

17,553

 

Interest expense

 

4,677

 

 

2,507

 

 

1,369

 

 

1,209

 

 

1,265

 

Net interest income

 

20,067

 

 

18,827

 

 

16,438

 

 

15,823

 

 

16,288

 

 
Provision for loan losses

 

-

 

 

910

 

 

1,600

 

 

(1,167

)

 

(800

)

Net interest income after provision for loan losses

 

20,067

 

 

17,917

 

 

14,838

 

 

16,990

 

 

17,088

 

 
Gain on sale of loans

 

-

 

 

-

 

 

3,298

 

 

4,668

 

 

4,151

 

Gain (loss) on sale of OREO

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

SBA servicing fee income, net

 

491

 

 

709

 

 

778

 

 

469

 

 

683

 

Reversal of valuation allowance on servicing assets

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Service charges and other income

 

457

 

 

518

 

 

462

 

 

498

 

 

499

 

Noninterest income

 

948

 

 

1,227

 

 

4,538

 

 

5,635

 

 

5,333

 

 
Salaries and employee benefits

 

6,233

 

 

6,861

 

 

6,994

 

 

7,065

 

 

6,614

 

Occupancy and equipment

 

1,133

 

 

1,118

 

 

1,114

 

 

1,120

 

 

1,028

 

Marketing expense

 

434

 

 

489

 

 

511

 

 

485

 

 

111

 

Professional expense

 

418

 

 

519

 

 

517

 

 

415

 

 

368

 

Merger related expense

 

7

 

 

47

 

 

123

 

 

-

 

 

454

 

Other expenses

 

2,579

 

 

2,125

 

 

1,114

 

 

1,796

 

 

2,850

 

Noninterest expense

 

10,804

 

 

11,159

 

 

10,373

 

 

10,881

 

 

11,425

 

 
Income before income tax expense

 

10,211

 

 

7,985

 

 

9,003

 

 

11,744

 

 

10,996

 

 
Income tax expense

 

2,882

 

 

2,258

 

 

2,547

 

 

3,336

 

 

2,984

 

 
Net income

$

7,329

 

$

5,727

 

$

6,456

 

$

8,408

 

$

8,012

 

 
Effective tax rate

 

28.2

%

 

28.3

%

 

28.3

%

 

28.4

%

 

27.1

%

 
Outstanding number of shares

 

10,569,601

 

 

10,569,601

 

 

10,416,601

 

 

10,299,361

 

 

10,284,962

 

 
Weighted average shares for basic EPS

 

10,569,601

 

 

10,516,394

 

 

10,305,014

 

 

10,291,071

 

 

10,284,962

 

Weighted average shares for diluted EPS

 

10,600,053

 

 

10,545,544

 

 

10,409,663

 

 

10,479,488

 

 

10,424,771

 

 
Basic EPS

$

0.70

 

$

0.54

 

$

0.62

 

$

0.82

 

$

0.78

 

Diluted EPS

$

0.70

 

$

0.54

 

$

0.62

 

$

0.80

 

$

0.77

 

FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4
(Dollars in thousands)
 

At or for the Three Months Ended

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

2022

 

2022

 

2022

 

2022

 

2021

 
Salaries and benefits

$

6,233

 

$

6,861

 

$

6,994

 

$

7,065

 

$

6,614

 

FTE at the end of period

 

179

 

 

190

 

 

199

 

 

208

 

 

205

 

Average FTE during the period

 

184

 

 

193

 

 

201

 

 

206

 

 

201

 

Salaries and benefits/average FTE¹

$

134

 

$

141

 

$

140

 

$

139

 

$

131

 

Salaries and benefits/average assets¹

 

1.39

%

 

1.52

%

 

1.55

%

 

1.60

%

 

1.39

%

Noninterest expense/average assets¹

 

2.41

%

 

2.47

%

 

2.30

%

 

2.47

%

 

2.40

%

1 Annualized
FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5
(Dollars in thousands)
 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

2022

 

2022

 

2022

 

2022

 

2021

ASSETS
Cash and due from banks

$

20,134

 

$

17,232

 

$

18,087

 

$

14,579

 

$

7,702

 

Interest-earning deposits at the FRB and other banks

 

170,839

 

 

225,044

 

 

243,072

 

 

288,603

 

 

284,583

 

Investment securities

 

72,550

 

 

75,839

 

 

77,469

 

 

80,104

 

 

84,238

 

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

 

230,431

 

 

186,438

 

 

141,104

 

 

149,733

 

 

158,128

 

 
Loans receivable

 

1,285,278

 

 

1,260,590

 

 

1,260,939

 

 

1,225,739

 

 

1,241,319

 

Allowance for loan losses

 

(15,525

)

 

(15,602

)

 

(14,739

)

 

(13,089

)

 

(14,192

)

Loans receivable, net

 

1,269,753

 

 

1,244,988

 

 

1,246,200

 

 

1,212,650

 

 

1,227,127

 

 

OREO

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Restricted stock investments

 

10,121

 

 

10,121

 

 

10,111

 

 

8,850

 

 

8,850

 

Servicing assets

 

9,232

 

 

10,158

 

 

10,996

 

 

10,671

 

 

10,632

 

Goodwill

 

2,185

 

 

2,185

 

 

2,185

 

 

2,185

 

 

2,185

 

Intangible assets

 

303

 

 

317

 

 

331

 

 

346

 

 

360

 

Other assets

 

26,939

 

 

27,845

 

 

28,060

 

 

24,061

 

 

25,450

 

Total assets

$

1,812,487

 

$

1,800,167

 

$

1,777,615

 

$

1,791,782

 

$

1,809,255

 

 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing

$

451,651

 

$

562,051

 

$

566,610

 

$

576,378

 

$

619,774

 

Interest-bearing

 

1,086,599

 

 

971,263

 

 

948,760

 

 

957,633

 

 

938,338

 

Total deposits

 

1,538,250

 

 

1,533,314

 

 

1,515,370

 

 

1,534,011

 

 

1,558,112

 

 
FHLB advances

 

50,000

 

 

50,000

 

 

50,000

 

 

50,000

 

 

50,000

 

Other liabilities

 

14,706

 

 

14,109

 

 

15,134

 

 

16,687

 

 

15,901

 

Total liabilities

 

1,602,956

 

 

1,597,423

 

 

1,580,504

 

 

1,600,698

 

 

1,624,013

 

 
Stockholders' Equity

 

209,531

 

 

202,744

 

 

197,111

 

 

191,084

 

 

185,242

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,812,487

 

$

1,800,167

 

$

1,777,615

 

$

1,791,782

 

$

1,809,255

 

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6
(Dollars in thousands)
December 31,

2022
September 30,

2022
June 30,

2022
March 31,

2022
December 31,

2021
Balance % Balance % Balance % Balance % Balance %
 
Construction

$

17,537

1.4

%

$

14,919

1.2

%

$

23,431

1.9

%

$

18,541

1.5

%

$

23,939

1.9

%

Commercial real estate

 

1,078,588

83.9

%

 

1,050,154

83.3

%

 

1,023,298

81.1

%

 

976,924

79.7

%

 

978,995

78.9

%

Commercial and industrial

 

125,298

9.7

%

 

128,099

10.1

%

 

146,175

11.6

%

 

159,111

13.0

%

 

169,489

13.7

%

Home mortgage

 

52,031

4.1

%

 

57,773

4.6

%

 

57,612

4.6

%

 

59,836

4.9

%

 

61,030

4.9

%

Consumer

 

6,260

0.5

%

 

4,839

0.4

%

 

6,609

0.5

%

 

7,589

0.6

%

 

4,269

0.3

%

Gross loans

 

1,279,714

99.6

%

 

1,255,784

99.6

%

 

1,257,125

99.7

%

 

1,222,001

99.7

%

 

1,237,722

99.7

%

 
Net deferred loan fees/costs

 

5,564

0.4

%

 

4,806

0.4

%

 

3,814

0.3

%

 

3,738

0.3

%

 

3,597

0.3

%

Loans receivable

$

1,285,278

100.0

%

$

1,260,590

100.0

%

$

1,260,939

100.0

%

$

1,225,739

100.0

%

$

1,241,319

100.0

%

 
Loans held-for-sale

$

230,431

$

186,438

$

141,104

$

149,733

$

158,128

Loans receivable, including loans held-for-sale

$

1,515,709

$

1,447,028

$

1,402,043

$

1,375,472

$

1,399,447

FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7
(Dollars in thousands)
 
Three Months Ended Twelve Months Ended
December 31, September 30, June 30, March 31, December 31, December 31, December 31,

2022

2022

2022

2022

 

2021

2022

2021

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

$

186,438

 

$

141,104

 

$

149,733

 

$

158,128

 

$

136,394

 

$

158,128

 

$

59,077

 

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

 

45,184

 

 

49,922

 

 

43,451

 

 

43,132

 

 

68,136

 

 

181,689

 

 

261,455

 

SBA loans sold during the quarter/year

 

-

 

 

-

 

 

(50,845

)

 

(50,531

)

 

(42,210

)

 

(101,376

)

 

(156,630

)

SBA loans principal payment, net of advance

 

(1,191

)

 

(4,588

)

 

(1,235

)

 

(996

)

 

(4,193

)

 

(8,010

)

 

(5,775

)

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

$

230,431

 

$

186,438

 

$

141,104

 

$

149,733

 

$

158,128

 

$

230,431

 

$

158,128

 

 
Gain on sale of SBA loans

$

-

 

$

-

 

$

3,298

 

$

4,668

 

$

4,151

 

$

7,966

 

$

14,900

 

Premium on sale (weighted average)

 

-

 

 

-

 

 

8.0

%

 

11.0

%

 

11.1

%

 

9.5

%

 

11.4

%

 
SBA loan production

$

60,746

 

$

69,234

 

$

56,676

 

$

54,523

 

$

82,448

 

$

287,633

 

$

378,254

 

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

Three Months Ended

 

Twelve Months Ended

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

December 31,

 

December 31,

2022

 

2022

 

2022

 

2022

 

2021

 

2022

 

2021

 
 
SBA servicing assets @ beginning of the quarter/year

$

10,158

 

$

10,996

 

$

10,671

 

$

10,632

 

$

10,392

 

$

10,632

 

$

9,873

 

 
Newly added SBA servicing assets from SBA loans sold

 

-

 

 

-

 

 

1,081

 

 

1,052

 

 

1,006

 

 

2,133

 

 

3,458

 

Regular quarterly/annual servicing assets amortization

 

(434

)

 

(471

)

 

(478

)

 

(462

)

 

(453

)

 

(1,845

)

 

(1,654

)

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

 

(492

)

 

(367

)

 

(278

)

 

(551

)

 

(313

)

 

(1,688

)

 

(1,045

)

 
Subtotal before impairment

 

9,232

 

 

10,158

 

 

10,996

 

 

10,671

 

 

10,632

 

 

9,232

 

 

10,632

 

 
Reversal of valuation allowance on servicing assets

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 
SBA servicing assets @ the end of the quarter/year

$

9,232

 

$

10,158

 

$

10,996

 

$

10,671

 

$

10,632

 

$

9,232

 

$

10,632

 

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9
(Dollars in thousands)
December 31,

2022
September 30,

2022
June 30,

2022
March 31,

2022
December 31,

2021
Balance % Balance % Balance % Balance % Balance %
 
Noninterest-bearing demand

$

451,651

29.4

%

$

562,051

36.7

%

$

566,610

37.4

%

$

576,378

37.6

%

$

619,774

39.8

%

Interest-bearing demand

 

8,878

0.6

%

 

10,268

0.7

%

 

12,754

0.8

%

 

12,059

0.8

%

 

10,723

0.7

%

NOW & MMDA

 

274,521

17.9

%

 

313,719

20.5

%

 

327,477

21.6

%

 

344,501

22.5

%

 

325,313

20.9

%

Savings

 

52,845

3.4

%

 

66,673

4.3

%

 

73,791

4.9

%

 

79,685

5.2

%

 

76,588

4.9

%

TCDs of $250K and under

 

278,952

18.1

%

 

246,886

16.1

%

 

245,203

16.2

%

 

253,617

16.5

%

 

259,758

16.7

%

TCDs of $250K over

 

320,386

20.8

%

 

242,700

15.8

%

 

198,518

13.1

%

 

176,754

11.5

%

 

174,939

11.2

%

Wholesale TCDs

 

151,017

9.8

%

 

91,017

5.9

%

 

91,017

6.0

%

 

91,017

5.9

%

 

91,017

5.8

%

Total Deposits

$

1,538,250

100.0

%

$

1,533,314

100.0

%

$

1,515,370

100.0

%

$

1,534,011

100.0

%

$

1,558,112

100.0

%

 
Recap:
Noninterest-bearing demand

$

451,651

29.4

%

$

562,051

36.7

%

$

566,610

37.4

%

$

576,378

37.6

%

$

619,774

39.8

%

Interest-bearing demand

 

8,878

0.6

%

 

10,268

0.7

%

 

12,754

0.8

%

 

12,059

0.8

%

 

10,723

0.7

%

NOW & MMDA

 

274,521

17.8

%

 

313,719

20.5

%

 

327,477

21.6

%

 

344,501

22.5

%

 

325,313

20.9

%

Savings

 

52,845

3.5

%

 

66,673

4.3

%

 

73,791

4.9

%

 

79,685

5.2

%

 

76,588

4.9

%

TCDs of $250K and under

 

278,952

18.1

%

 

246,886

16.1

%

 

245,203

16.2

%

 

253,617

16.5

%

 

259,758

16.7

%

Core Deposits

 

1,066,847

69.4

%

 

1,199,597

78.3

%

 

1,225,835

80.9

%

 

1,266,240

82.6

%

 

1,292,156

83.0

%

 
TCDs of $250K over

 

320,386

20.8

%

 

242,700

15.8

%

 

198,518

13.1

%

 

176,754

11.5

%

 

174,939

11.2

%

Wholesale TCDs

 

151,017

9.8

%

 

91,017

5.9

%

 

91,017

6.0

%

 

91,017

5.9

%

 

91,017

5.8

%

Noncore Deposits

 

471,403

30.6

%

 

333,717

21.7

%

 

289,535

19.1

%

 

267,771

17.4

%

 

265,956

17.0

%

Total Deposits

$

1,538,250

100.0

%

$

1,533,314

100.0

%

$

1,515,370

100.0

%

$

1,534,011

100.0

%

$

1,558,112

100.0

%

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

4th Qtr.

 

3rd Qtr.

 

2nd Qtr.

 

1st Qtr.

 

4th Qtr.

2022

 

2022

 

2022

 

2022

 

2021

Allowance for Loan Losses
Balance at beginning of period

$

15,602

 

$

14,739

 

$

13,089

 

$

14,192

 

$

15,000

 

Provision for loan losses

 

910

 

 

1,600

 

 

(1,167

)

 

(800

)

Charge-offs

 

(90

)

 

(89

)

 

-

 

 

-

 

 

(89

)

Recoveries

 

13

 

 

42

 

 

50

 

 

64

 

 

81

 

Balance at the end of period

$

15,525

 

$

15,602

 

$

14,739

 

$

13,089

 

$

14,192

 

 
Nonperforming Assets:¹
Over 90 days still accruing

$

6,006

 

$

-

 

$

-

 

$

-

 

$

-

 

Nonaccrual loans

 

801

 

 

690

 

 

2,532

 

 

723

 

 

747

 

Total nonperforming loans

 

6,807

 

 

690

 

 

2,532

 

 

723

 

 

747

 

 
Other real estate owned

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total nonperforming assets

$

6,807

 

$

690

 

$

2,532

 

$

723

 

$

747

 

 
Classified Assets:¹
Substandard

$

8,165

 

$

9,146

 

$

11,133

 

$

9,300

 

$

11,156

 

Doubtful

 

-

 

 

-

 

 

-

 

Loss

 

-

 

 

-

 

 

-

 

Total classified loans

$

8,165

 

$

9,146

 

$

11,133

 

$

9,300

 

$

11,156

 

 
Other real estate owned

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total classified assets

$

8,165

 

$

9,146

 

$

11,133

 

$

9,300

 

$

11,156

 

 
Performing TDR loans:¹

$

4,471

 

$

4,797

 

$

4,744

 

$

3,253

 

$

3,521

 

 
Delinquent Loans:¹
Loans 30-89 days past due

$

381

 

$

3,936

 

$

11,553

 

$

6,275

 

$

267

 

90 days or more past due and still accruing

 

6,006

 

 

-

 

 

-

 

 

-

 

 

-

 

Nonaccrual

 

801

 

 

690

 

 

2,532

 

 

723

 

 

747

 

Total delinquent loans

$

7,188

 

$

4,626

 

$

14,085

 

$

6,998

 

$

1,014

 

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

 

0.02

%

 

0.01

%

 

(0.01

%)

 

(0.02

%)

 

0.00

%

Nonaccrual loans to loans receivable

 

0.06

%

 

0.05

%

 

0.20

%

 

0.06

%

 

0.06

%

Nonperforming loans to loans receivable

 

0.53

%

 

0.05

%

 

0.20

%

 

0.06

%

 

0.06

%

Nonperforming assets to total assets

 

0.38

%

 

0.04

%

 

0.14

%

 

0.04

%

 

0.04

%

Classified loans to loans receivable

 

0.64

%

 

0.73

%

 

0.88

%

 

0.76

%

 

0.90

%

Classified loans to Tier 1 and ALLL

 

3.67

%

 

4.24

%

 

5.32

%

 

4.61

%

 

5.67

%

Classified assets to total assets

 

0.45

%

 

0.51

%

 

0.63

%

 

0.52

%

 

0.62

%

Classified assets to Tier 1 and ALLL

 

3.67

%

 

4.24

%

 

5.32

%

 

4.61

%

 

5.67

%

ALLL to loans receivable

 

1.21

%

 

1.24

%

 

1.17

%

 

1.07

%

 

1.14

%

ALLL to loans receivable exc. SBA PPP loans

 

1.21

%

 

1.24

%

 

1.18

%

 

1.09

%

 

1.18

%

ALLL to nonaccrual loans

 

1938.20

%

 

2261.16

%

 

582.11

%

 

1810.37

%

 

1899.87

%

ALLL to nonperforming loans

 

228.07

%

 

2261.16

%

 

582.11

%

 

1810.37

%

 

1899.87

%

ALLL to nonperforming assets

 

228.07

%

 

2261.16

%

 

582.11

%

 

1810.37

%

 

1899.87

%

Texas ratio ³

 

3.06

%

 

0.32

%

 

1.21

%

 

0.36

%

 

0.38

%

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

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

Regulatory

 

BASEL III

 

 

 

 

 

 

 

 

 

 

Requirement

 

Fully Phased In

 

2022

 

2022

 

2022

 

2022

 

2021

 
Leverage ratio
Company

N/A

 

N/A

 

 

11.71

%

 

11.25

%

 

10.80

%

 

10.56

%

 

9.55

%

Bank

5.00

%

4.00

%

 

11.67

%

 

11.15

%

 

10.73

%

 

10.55

%

 

9.55

%

Common equity tier 1 risk-based capital ratio
Company

N/A

 

N/A

 

 

14.92

%

 

14.82

%

 

14.47

%

 

14.50

%

 

13.83

%

Bank

6.50

%

7.00

%

 

14.87

%

 

14.70

%

 

14.38

%

 

14.50

%

 

13.82

%

Tier 1 risk-based capital ratio
Company

N/A

 

N/A

 

 

14.92

%

 

14.82

%

 

14.47

%

 

14.50

%

 

13.83

%

Bank

8.00

%

8.50

%

 

14.87

%

 

14.70

%

 

14.38

%

 

14.50

%

 

13.82

%

Total risk-based capital ratio
Company

N/A

 

N/A

 

 

16.08

%

 

16.02

%

 

15.63

%

 

15.57

%

 

14.98

%

Bank

10.00

%

10.50

%

 

16.03

%

 

15.89

%

 

15.53

%

 

15.57

%

 

14.97

%

 
Tangible common equity/total assets

 

11.44

%

 

11.14

%

 

10.96

%

 

10.54

%

 

10.11

%

Tangible common equity per share

$

19.59

 

$

18.95

 

$

18.68

 

$

18.31

 

$

17.76

 

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

$

1,473,100

 

$

22,407

6.03

%

$

1,413,632

 

$

19,299

5.42

%

$

1,389,968

 

$

16,643

4.80

%

$

1,368,996

 

$

16,352

4.84

%

$

1,396,201

 

$

16,893

4.80

%

Investment securities²

 

73,371

 

 

552

2.98

%

 

77,304

 

 

543

2.79

%

 

78,709

 

 

488

2.49

%

 

82,818

 

 

471

2.31

%

 

85,555

 

 

454

2.11

%

Interest-earning deposits at the FRB and other banks

 

180,358

 

 

1,666

3.66

%

 

246,955

 

 

1,398

2.25

%

 

286,974

 

 

599

0.84

%

 

288,966

 

 

141

0.20

%

 

365,501

 

 

144

0.16

%

Other earning assets

 

10,121

 

 

169

6.62

%

 

10,121

 

 

145

5.68

%

 

9,861

 

 

129

5.25

%

 

8,850

 

 

119

5.45

%

 

8,850

 

 

115

5.16

%

Total interest-earning assets ²

 

1,736,950

 

 

24,794

5.66

%

 

1,748,012

 

 

21,385

4.85

%

 

1,765,512

 

 

17,859

4.06

%

 

1,749,630

 

 

17,083

3.96

%

 

1,856,107

 

 

17,606

3.76

%

 
NONINTEREST-EARNING ASSETS
Cash and due from banks

 

15,632

 

 

17,429

 

 

14,866

 

 

13,338

 

 

13,318

 

Other noninterest-earning assets

 

38,529

 

 

40,251

 

 

38,621

 

 

36,714

 

 

37,779

 

Total noninterest-earning assets

 

54,161

 

 

57,680

 

 

53,487

 

 

50,052

 

 

51,097

 

 
Less: Allowance for loan losses

 

(15,581

)

 

(14,756

)

 

(13,126

)

 

(14,200

)

 

(14,849

)

TOTAL ASSETS

$

1,775,530

 

$

1,790,936

 

$

1,805,873

 

$

1,785,482

 

$

1,892,355

 

 
INTEREST-BEARING DEPOSITS
Interest-bearing demand

$

20,352

 

$

10

0.19

%

$

23,461

 

$

8

0.14

%

$

26,781

 

$

4

0.06

%

$

27,442

 

$

3

0.04

%

$

27,904

 

$

3

0.04

%

Money market

 

288,611

 

 

1,433

1.97

%

 

316,964

 

 

894

1.12

%

 

308,377

 

 

443

0.58

%

 

321,694

 

 

356

0.45

%

 

338,937

 

 

401

0.47

%

Savings

 

61,152

 

 

96

0.62

%

 

71,519

 

 

85

0.47

%

 

75,306

 

 

59

0.31

%

 

76,967

 

 

61

0.32

%

 

77,057

 

 

68

0.35

%

Time deposits

 

625,823

 

 

3,020

1.91

%

 

556,919

 

 

1,401

1.00

%

 

523,504

 

 

746

0.57

%

 

529,421

 

 

673

0.52

%

 

527,634

 

 

674

0.51

%

Total interest-bearing deposits

 

995,938

 

 

4,559

1.82

%

 

968,863

 

 

2,388

0.98

%

 

933,968

 

 

1,252

0.54

%

 

955,524

 

 

1,093

0.46

%

 

971,532

 

 

1,146

0.47

%

 
Borrowings

 

50,001

 

 

118

0.94

%

 

50,001

 

 

119

0.94

%

 

50,000

 

 

117

0.94

%

 

50,000

 

 

116

0.94

%

 

50,000

 

 

119

0.94

%

Total interest-bearing liabilities

 

1,045,939

 

 

4,677

1.77

%

 

1,018,864

 

 

2,507

0.98

%

 

983,968

 

 

1,369

0.56

%

 

1,005,524

 

 

1,209

0.49

%

 

1,021,532

 

 

1,265

0.49

%

 
Noninterest-bearing deposits

 

507,719

 

 

555,291

 

 

611,395

 

 

574,436

 

 

673,154

 

Other liabilities

 

14,732

 

 

14,596

 

 

15,818

 

 

16,966

 

 

16,425

 

 
Stockholders' equity

 

207,140

 

 

202,185

 

 

194,692

 

 

188,556

 

 

181,244

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,775,530

 

$

1,790,936

 

$

1,805,873

 

$

1,785,482

 

$

1,892,355

 

 
Net interest income²

$

20,117

$

18,878

$

16,490

$

15,874

$

16,341

 
Net interest spread

3.89

%

3.87

%

3.50

%

3.47

%

3.27

%

 
Effect of noninterest-bearing sources

0.70

%

0.41

%

0.25

%

0.21

%

0.22

%

 
Net interest margin²

4.59

%

4.28

%

3.75

%

3.68

%

3.49

%

 
 
Cost of deposits

$

1,503,657

 

$

4,559

1.20

%

$

1,524,154

 

$

2,388

0.62

%

$

1,545,363

 

$

1,252

0.32

%

$

1,529,960

 

$

1,093

0.29

%

$

1,644,686

 

$

1,146

0.28

%

 
Cost of funds

$

1,553,658

 

$

4,677

1.19

%

$

1,574,155

 

$

2,507

0.63

%

$

1,595,363

 

$

1,369

0.34

%

$

1,579,960

 

$

1,209

0.31

%

$

1,694,686

 

$

1,265

0.30

%

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

$

21,534

 

5.80

%

$

18,134

 

5.09

%

$

15,496

4.47

%

$

14,596

4.32

%

$

15,142

4.30

%

SBA discount accretion

 

1,172

 

0.32

%

 

1,078

 

0.30

%

 

1,035

0.30

%

 

1,421

0.42

%

 

1,024

0.29

%

Prepayment penalties & late fees

 

17

 

0.00

%

 

94

 

0.03

%

 

56

0.02

%

 

107

0.03

%

 

72

0.02

%

Amortization of net deferred costs

 

(316

)

-0.09

%

 

(7

)

0.00

%

 

56

0.01

%

 

228

0.07

%

 

655

0.19

%

As reported yield on loans

$

22,407

 

6.03

%

$

19,299

 

5.42

%

$

16,643

4.80

%

$

16,352

4.84

%

$

16,893

4.80

%

MARGIN ANALYSIS (Unaudited) - Table 14
(Dollars in thousands)
Twelve Months Ended
December 31,2022 December 31,2021
Avg Balance Interest Yield Avg Balance Interest Yield
Number of Days in the Period
INTEREST-EARNING ASSETS
Loans ¹

$

1,411,715

 

$

74,701

5.29

%

$

1,281,283

 

$

61,868

4.83

%

Investment securities²

 

78,022

 

 

2,054

2.63

%

 

85,251

 

 

1,804

2.12

%

Interest-earning deposits at the FRB and other banks

 

250,532

 

 

3,804

1.52

%

 

232,050

 

 

346

0.15

%

Other earning assets

 

9,743

 

 

562

5.77

%

 

8,679

 

 

463

5.33

%

Total interest-earning assets ²

 

1,750,012

 

 

81,121

4.64

%

 

1,607,263

 

 

64,481

4.01

%

 
NONINTEREST-EARNING ASSETS
Cash and due from banks

 

15,328

 

 

11,806

 

Other noninterest-earning assets

 

38,539

 

 

34,069

 

Total noninterest-earning assets

 

53,867

 

 

45,875

 

 
Less: Allowance for loan losses

 

(14,420

)

 

(14,773

)

 
TOTAL ASSETS

$

1,789,459

 

$

1,638,365

 

 
INTEREST-BEARING DEPOSITS
Interest-bearing demand

$

24,487

 

$

25

0.10

%

$

23,509

 

$

11

0.05

%

Money market

 

308,843

 

 

3,125

1.01

%

 

295,559

 

 

1,507

0.51

%

Savings

 

71,193

 

 

302

0.42

%

 

60,876

 

 

254

0.42

%

Time deposits

 

559,176

 

 

5,840

1.04

%

 

498,053

 

 

3,236

0.65

%

Total interest-bearing deposits

 

963,699

 

 

9,292

0.96

%

 

877,997

 

 

5,008

0.57

%

 
Borrowings

 

50,000

 

 

470