CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the
holding company of Commonwealth Business Bank, doing business as
“CBB Bank” (the "Bank"), announced today net income of $5.7 million
for the first quarter 2024, or $0.54 per diluted share, a decrease
of 19.0% compared to $7.0 million, or $0.66 per diluted share, in
the prior quarter and a decrease of 20.0% compared to $7.1 million,
or $0.67 per diluted share, in the same period last year.
OVERALL RESULTS
Net income for the first quarter 2024 decreased from the prior
quarter primarily due to lower net interest income, higher
provision expense for credit losses offset by a negative credit
loss expense related to off-balance-sheet financial instruments,
and higher noninterest expenses offset by higher gain on sale of
loans. The return on average assets for the first quarter 2024 was
1.32% compared to 1.54% for the fourth quarter 2023 and 1.59% for
the first quarter 2023. The return on average equity for the first
quarter 2024 was 9.57%, compared to 11.94% for the fourth quarter
2023 and 13.45% for the first quarter 2023. The efficiency ratio
for the first quarter 2024 was 54.68%, compared to 49.45% for the
fourth quarter 2023 and 51.04% for the first quarter 2023.
James Hong, President and CEO, commented, “In the present
economic climate characterized by elevated interest rates,
fostering growth poses a formidable challenge. However, CBB is
committed to pursuing an expansion strategy in 2024, with a
specific emphasis on penetrating untapped markets along the East
Coast. To that end, our primary strategic objective for the
forthcoming year is to establish a robust presence in the East
Coast market, where we have yet to establish a foothold, but where
we believe there are considerable opportunities.”
INCOME STATEMENT
Net Interest Income
Net interest income for the first quarter 2024 was $15.8
million, a decrease of $1.4 million, or 7.9%, from the fourth
quarter 2023, and a decrease of $3.3 million, or 17.1%, from the
first quarter 2023. The decrease in net interest income compared
with both the fourth quarter 2023 and the first quarter 2023 was
due to relatively higher increases in interest expenses on
deposits.
Net Interest Margin
The net interest margin for the first quarter 2024 was 3.77%,
compared to 3.86% for the fourth quarter 2023 and 4.38% for the
first quarter 2023. The decrease in the net interest margin from
the prior quarter and from the same quarter of 2023 is due
primarily to the rising cost of funds. The cost of funds for the
first quarter 2024 increased to 3.48% compared to 3.20% for the
fourth quarter 2023 and 2.10% for the first quarter 2023.
Provision for Credit
Losses
Credit loss expense of a net $400 thousand was recorded for the
first quarter 2024. This amount was comprised of provision expense
for credit losses of $743 thousand offset by a $343 thousand
reduction in ACL related to off-balance-sheet financial
instruments. No provisions for credit losses was recorded for the
fourth quarter 2023 or the first quarter 2023.
Refer to the financial tables in this press release for
additional information and trends.
Noninterest Income
Noninterest income in the first quarter 2024 was $2.6 million,
an increase of $597 thousand compared to $2.0 million for the
fourth quarter 2023, and an increase of $1.5 million compared to
$1.1 million in the first quarter 2023. The quarter-over-quarter
increase in noninterest income was primarily the result of higher
gain on sale of loans. The Bank sold approximately $28.2 million in
SBA loans with an average premium of 8.4% during the first quarter
2024 compared to sale of $21.7 million in SBA loans with an average
premium of 6.7% during the fourth quarter 2023. There was no sale
of loans during the first quarter 2023.
Noninterest Expense
Noninterest expense for the first quarter 2024 was $10.0
million, compared to $9.5 million for the fourth quarter 2023 and
$10.3 million for the first quarter 2023. Salaries and employee
benefits expenses totaled $6.0 million for the first quarter 2024
compared to $5.4 million for the fourth quarter 2023 and $6.1
million for the first quarter 2023.
Please refer to financial tables in this press release for
additional information and trends.
Income Taxes
The Company’s effective tax rate for the first quarter 2024 was
28.4% compared to 27.6% for fourth quarter 2023 and 28.1% for first
quarter 2023.
BALANCE SHEET
Investment Securities
Investment securities were $59.1 million at March 31, 2024, a
decrease of $0.7 million, or 1.2% from December 31, 2023, and a
decrease of $9.8 million or 14.2% from March 31, 2023. The
decreases were due to principal paydowns and an absence of
portfolio additions during the first quarter of 2024. Management
believes that the Bank currently has adequate liquidity and does
not need to sell securities for liquidity purposes.
Loans Receivable
Loans receivable (including loans held-for-sale) at March 31,
2024, was $1.39 billion, a decrease of $29.7 million, or 2.1% from
December 31, 2023, and a decrease of $74.0 million, or 5.0%, from
March 31, 2023. The decrease in loans receivable since last
quarter, paired with the reduction from the previous year, reflects
diminished loan demand amid the prevailing high-interest rate
environment.
Allowance for Credit Losses and Asset
Quality
The allowance for credit losses at March 31, 2024, was $16.0
million or 1.34% of loans held-for-investment, compared to $15.3
million at December 31, 2023, or 1.27% of loans
held-for-investment, and compared to $15.6 million at March 31,
2023, or 1.28% of total loans held-for-investment. Total
Nonperforming assets at March 31, 2024 were $4.4 million, compared
to $2.5 million at December 31, 2023, and $0.6 million at March 31,
2023. The coverage ratio of allowance for credit losses to
nonperforming assets was over 360% at March 31, 2024.
SBA Loans Held-for-Sale
Total SBA loans held-for-sale at March 31, 2024, was $198.2
million, compared to $218.3 million at December 31 2023, and $243.8
million at March 31, 2023. We continue to assess SBA loan market
premiums and plan to sell loans when it is advantageous to do
so.
Deposits
Total deposits were $1.36 billion at March 31, 2024, down $92.6
million, or 6.4%, from December 31, 2023, and down $176.3 million,
or 11.5%, from March 31, 2023. DDAs were 21.6% of total deposits
for both March 31, 2024 and December 31, 2023, and 28.6% at March
31, 2023. NOW and MMDA deposits comprised 16.9% of total deposits
at March 31, 2024, compared to 16.3% at December 31, 2023, and
13.8% at March 31, 2023. The quarter-over-quarter and
year-over-year declines in DDAs can be attributed to the higher
interest rate environment. Depositors were eager to capitalize on
the rising interest rates, moving funds from DDA to Savings, MMDA,
CD or some combination thereof.
Borrowings
The Bank has maintained $50.0 million of Federal Home Loan Bank
advances since March 31, 2023. The blended cost of FHLB advances
was 0.94% as of March 31, 2024.
Capital
Stockholders’ equity was $240.6 million at March 31, 2024,
representing an increase of $4.9 million, or 2.1%, from $235.7
million at December 31, 2023. Tangible book value per share at
March 31, 2024, was $22.49, compared with $22.03 at December 31,
2023, an increase of $0.46, or 2.1% per share.
Each of the Company’s and the Bank’s regulatory capital ratios
increased at March 31, 2024, when compared to December 31, 2023,
and March 31, 2023. Capital ratios continue to exceed the minimum
levels required to be considered “Well Capitalized” under the
applicable regulatory capital rules.
The Common Equity Tier 1 Risked-Based Capital Ratios at March
31, 2024, were 18.67% and 18.65% for the Company and the Bank,
respectively, and Total Capital Ratios were 19.92% and 19.91% for
the Company and the Bank, respectively. The Common Equity Tier 1
Risked-Based Capital Ratios at March 31, 2023, were 16.15% and
16.10% for the Company and the Bank, respectively, and Total
Capital Ratios were 17.37% and 17.31% for the Company and the Bank,
respectively.
About CBB Bancorp, Inc.:
CBB Bancorp, Inc. is the holding company of Commonwealth
Business Bank, a full-service commercial bank which specializes in
loans to small-to-medium-sized businesses and does business as “CBB
Bank.” As of March 31, 2024, the Bank had eleven full-service
banking offices in Los Angeles and Orange Counties in California,
Dallas County in Texas and Honolulu, Hawaii; two SBA regional
offices in Los Angeles and Dallas Counties; and loan production
offices in Georgia and Washington. For additional information,
please go to www.cbb-bank.com under the tab “About Us” and select
“Investor Relations” to see the 1Q 2024 Overview.
FORWARD-LOOKING
STATEMENTS:
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. CBB Bancorp, Inc. (the “Company”) intends that such
forward-looking statements be covered by the safe harbor provisions
for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Future events are difficult to
predict, and the expectations described herein are necessarily
subject to risks and uncertainties that may cause actual results to
differ materially and adversely from those described herein.
Forward-looking statements can be identified by the fact that they
do not relate strictly to historical or current facts. They often
include the words “believe,” “expect,” “anticipate,” “intend,”
“plan,” “estimate,” or words of similar meaning, or future or
conditional verbs such as “will,” “would,” “should,” “could,” or
“may.” These forward-looking statements are not guarantees of
future performance, nor should they be relied upon as representing
management’s views as of any subsequent date. Factors that might
cause actual results to differ materially from those presented,
either expressed or implied, in this news release include, but are
not limited to: the Company’s ability to successfully execute its
business plans and achieve its objectives; changes in general
economic and financial market conditions, either nationally or
locally in areas in which the Company conducts its operations;
changes in interest rates; continuing consolidation in the
financial services industry; new litigation or changes in existing
litigation; increased competitive challenges and expanding product
and pricing pressures among financial institutions; legislation or
regulatory changes which adversely affect the Company’s operations
or business; loss of key personnel; and changes in accounting
policies or procedures as may be required by the Financial
Accounting Standards Board or other regulatory agencies.
The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect subsequent events or
circumstances, except to the extent required by law.
Schedules and Financial Data: All tables and data to
follow
STATEMENT OF INCOME AND
PERFORMANCE HIGHLIGHT (Unaudited) - Table 1
(Dollars in thousands, except per
share amounts)
Three Months Ended
March 31,
December 31,
$
%
March 31,
$
%
2024
2023
Change
Change
2023
Change
Change
Interest income
$
28,463
$
29,624
$
(1,161
)
(3.9
%)
$
27,248
$
1,215
4.5
%
Interest expense
12,655
12,462
193
1.5
%
8,168
4,487
54.9
%
Net interest income
15,808
17,162
(1,354
)
(7.9
%)
19,080
(3,272
)
(17.1
%)
Provision for credit losses
400
-
400
100.0
%
-
400
100.0
%
Net interest income after provision for credit losses
15,408
17,162
(1,754
)
(10.2
%)
19,080
(3,672
)
(19.2
%)
Gain on sale of loans
1,489
838
651
77.7
%
-
1,489
100.0
%
SBA servicing fee income, net
643
690
(47
)
(6.8
%)
654
(11
)
(1.7
%)
Service charges and other income
429
436
(7
)
(1.6
%)
398
31
7.8
%
Noninterest income
2,561
1,964
597
30.4
%
1,052
1,509
143.4
%
Salaries and employee benefits
6,024
5,356
668
12.5
%
6,079
(55
)
(0.9
%)
Occupancy and equipment
1,122
1,128
(6
)
(0.5
%)
1,124
(2
)
(0.2
%)
Marketing expense
402
250
152
60.8
%
374
28
7.5
%
Professional expense
412
360
52
14.4
%
454
(42
)
(9.3
%)
Other expenses
2,084
2,363
(279
)
(11.8
%)
2,244
(160
)
(7.1
%)
Noninterest expense
10,044
9,457
587
6.2
%
10,275
(231
)
(2.2
%)
Income before income tax provision
7,925
9,669
(1,744
)
(18.0
%)
9,857
(1,932
)
(19.6
%)
Income tax provision
2,253
2,670
(417
)
(15.6
%)
2,767
(514
)
(18.6
%)
Net income
$
5,672
$
6,999
$
(1,327
)
(19.0
%)
$
7,090
$
(1,418
)
(20.0
%)
Effective tax rate
28.4
%
27.6
%
0.8
%
3.0
%
28.1
%
0.4
%
1.3
%
Outstanding number of shares
10,588,136
10,588,136
-
-
10,588,136
-
-
Weighted average shares for basic EPS
10,588,136
10,588,136
-
-
10,576,191
11,945
0.1
%
Weighted average shares for diluted EPS
10,588,688
10,588,937
(249
)
(0.0
%)
10,600,189
(11,501
)
(0.1
%)
Basic EPS
$
0.54
$
0.66
$
(0.12
)
(18.2
%)
$
0.67
$
(0.13
)
(19.4
%)
Diluted EPS
$
0.54
$
0.66
$
(0.12
)
(18.2
%)
$
0.67
$
(0.13
)
(19.4
%)
Return on average assets
1.32
%
1.54
%
(0.22
%)
(14.3
%)
1.59
%
(0.27
%)
(17.0
%)
Return on average equity
9.57
%
11.94
%
(2.37
%)
(19.9
%)
13.45
%
(3.88
%)
(28.9
%)
Efficiency ratio¹
54.68
%
49.45
%
5.23
%
10.6
%
51.04
%
3.64
%
7.1
%
Yield on interest-earning assets²
6.77
%
6.65
%
0.12
%
1.8
%
6.24
%
0.53
%
8.5
%
Cost of funds
3.48
%
3.20
%
0.28
%
8.8
%
2.10
%
1.38
%
65.7
%
Net interest margin²
3.77
%
3.86
%
(0.09
%)
(2.3
%)
4.38
%
(0.61
%)
(13.9
%)
¹
Represents the ratio of
noninterest expense less other real estate owned operations to the
sum of net interest income before provision for credit losses and
total noninterest income.
²
Amounts calculated on a fully
taxable equivalent basis using the current statutory federal tax
rate
BALANCE SHEET, CAPITAL AND
OTHER DATA (Unaudited) - Table 2
(Dollars in thousands)
March 31,
December 31,
$
%
March 31,
$
%
2024
2023
Change
Change
2023
Change
Change
ASSETS Cash and due from banks
$
11,612
$
14,282
$
(2,670
)
(18.7
%)
$
13,788
$
(2,176
)
(15.8
%)
Interest-earning deposits at the FRB and other banks
181,366
233,255
(51,889
)
(22.2
%)
240,602
(59,236
)
(24.6
%)
Investment securities¹
59,143
59,883
(740
)
(1.2
%)
68,943
(9,800
)
(14.2
%)
Loans held-for-sale
198,167
218,258
(20,091
)
(9.2
%)
243,753
(45,586
)
(18.7
%)
Loans held-for-investment
1,194,439
1,204,009
(9,570
)
(0.8
%)
1,222,867
(28,428
)
(2.3
%)
Less: Allowance for credit losses ("ACL")
(16,048
)
(15,291
)
(757
)
(5.0
%)
(15,627
)
(421
)
(2.7
%)
Loans held-for-investment, net
1,178,391
1,188,718
(10,327
)
(0.9
%)
1,207,240
(28,849
)
(2.4
%)
Other real estate owned ("OREO")
-
55
(55
)
-100.0
%
-
-
-
Restricted stock investments
11,011
11,011
-
-
10,121
890
8.8
%
Servicing assets
7,560
7,673
(113
)
(1.5
%)
8,528
(968
)
(11.4
%)
Goodwill
2,185
2,185
-
-
2,185
-
-
Intangible assets
245
255
(10
)
(3.9
%)
291
(46
)
(15.8
%)
Other assets
23,581
24,838
(1,257
)
(5.1
%)
25,697
(2,116
)
(8.2
%)
Total assets
$
1,673,261
$
1,760,413
$
(87,152
)
(5.0
%)
$
1,821,148
$
(147,887
)
(8.1
%)
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing
$
286,766
$
305,923
$
(19,157
)
(6.3
%)
$
428,559
$
(141,793
)
(33.1
%)
Interest-bearing
1,074,198
1,147,662
(73,464
)
(6.4
%)
1,108,754
(34,556
)
(3.1
%)
Total deposits
1,360,964
1,453,585
(92,621
)
(6.4
%)
1,537,313
(176,349
)
(11.5
%)
FHLB advances and other borrowing
50,000
50,000
-
-
50,000
-
-
Other liabilities
21,727
21,114
613
2.9
%
17,651
4,076
23.1
%
Total liabilities
1,432,691
1,524,699
(92,008
)
(6.0
%)
1,604,964
(172,273
)
(10.7
%)
Stockholders' Equity
240,570
235,714
4,856
2.1
%
216,184
24,386
11.3
%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$
1,673,261
$
1,760,413
$
(87,152
)
(5.0
%)
$
1,821,148
$
(147,887
)
(8.1
%)
CAPITAL RATIOS Leverage ratio Company
13.85
%
12.98
%
0.88
%
6.8
%
11.86
%
1.99
%
16.8
%
Bank
13.84
%
12.96
%
0.88
%
6.8
%
11.82
%
2.02
%
17.1
%
Common equity tier 1 risk-based capital ratio Company
18.67
%
18.08
%
0.60
%
3.3
%
16.15
%
2.52
%
15.6
%
Bank
18.65
%
18.05
%
0.61
%
3.4
%
16.10
%
2.56
%
15.9
%
Tier 1 risk-based capital ratio Company
18.67
%
18.08
%
0.60
%
3.3
%
16.15
%
2.52
%
15.6
%
Bank
18.65
%
18.05
%
0.61
%
3.4
%
16.10
%
2.56
%
15.9
%
Total risk-based capital ratio Company
19.92
%
19.30
%
0.63
%
3.2
%
17.37
%
2.56
%
14.7
%
Bank
19.91
%
19.27
%
0.63
%
3.3
%
17.31
%
2.59
%
15.0
%
Tangible book value per share
$
22.49
$
22.03
$
0.46
2.1
%
$
20.18
$
2.31
11.5
%
Loans Held for Investments-to-Deposit ("LHFITD") ratio
87.76
%
82.83
%
4.93
%
6.0
%
79.55
%
8.21
%
10.3
%
Net Loan-to-Deposit ("LTD") ratio
101.15
%
96.79
%
4.36
%
4.5
%
94.39
%
6.76
%
7.2
%
Nonperforming assets
$
4,447
$
2,484
$
1,963
79.0
%
$
636
$
3,811
599.2
%
Nonperforming assets as a % of loans held-for-investment
0.37
%
0.21
%
0.16
%
76.2
%
0.05
%
0.32
%
640.0
%
ACL as a % of loans held-for-investment
1.34
%
1.27
%
0.07
%
5.51
%
1.28
%
0.06
%
4.7
%
¹
Includes AFS and HTM
FIVE-QUARTER STATEMENT OF
INCOME (Unaudited) - Table 3
(Dollars in thousands, except per
share amounts)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
Interest income
$
28,463
$
29,624
$
29,450
$
28,664
$
27,248
Interest expense
12,655
12,462
11,442
9,930
8,168
Net interest income
15,808
17,162
18,008
18,734
19,080
Provision for credit losses
400
-
-
-
-
Net interest income after provision for credit losses
15,408
17,162
18,008
18,734
19,080
Gain on sale of loans
1,489
838
419
1,952
-
SBA servicing fee income, net
643
690
639
440
654
Service charges and other income
429
436
402
407
398
Noninterest income
2,561
1,964
1,460
2,799
1,052
Salaries and employee benefits
6,024
5,356
5,569
5,581
6,079
Occupancy and equipment
1,122
1,128
1,103
1,122
1,124
Marketing expense
402
250
475
409
374
Professional expense
412
360
443
436
454
Other expenses
2,084
2,363
2,579
2,635
2,244
Noninterest expense
10,044
9,457
10,169
10,183
10,275
Income before income tax expense
7,925
9,669
9,299
11,350
9,857
Income tax expense
2,253
2,670
2,630
3,248
2,767
Net income
$
5,672
$
6,999
$
6,669
$
8,102
$
7,090
Effective tax rate
28.4
%
27.6
%
28.3
%
28.6
%
28.1
%
Outstanding number of shares
10,588,136
10,588,136
10,588,136
10,588,136
10,588,136
Weighted average shares for basic EPS
10,588,136
10,588,136
10,588,136
10,588,136
10,576,191
Weighted average shares for diluted EPS
10,588,688
10,588,937
10,594,155
10,591,351
10,600,189
Basic EPS
$
0.54
$
0.66
$
0.63
$
0.77
$
0.67
Diluted EPS
$
0.54
$
0.66
$
0.63
$
0.76
$
0.67
FIVE-QUARTER SALARIES BENEFIT
METRICS (Unaudited) - Table 4
(Dollars in thousands)
At or for the Three Months
Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
Salaries and benefits
$
6,024
$
5,356
$
5,569
$
5,581
$
6,079
FTE at the end of period
168
169
172
165
170
Average FTE during the period
169
169
168
164
174
Salaries and benefits/average FTE¹
$
143
$
126
$
131
$
137
$
142
Salaries and benefits/average assets¹
1.41
%
1.18
%
1.22
%
1.23
%
1.36
%
Noninterest expense/average assets¹
2.35
%
2.08
%
2.22
%
2.25
%
2.30
%
¹
Annualized
FIVE-QUARTER BALANCE SHEET
(Unaudited) - Table 5
(Dollars in thousands)
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
ASSETS Cash and due from banks
$
11,612
$
14,282
$
11,188
$
12,704
$
13,788
Interest-earning deposits at the FRB and other banks
181,366
233,255
335,016
293,394
240,602
Investment securities
59,143
59,883
61,617
66,400
68,943
Loans held-for-sale
198,167
218,258
219,355
215,083
243,753
Loans held-for-investment
1,194,439
1,204,009
1,201,230
1,201,237
1,222,867
Less: Allowance for credit losses
(16,048
)
(15,291
)
(15,284
)
(15,626
)
(15,627
)
Loans held-for-investment, net
1,178,391
1,188,718
1,185,946
1,185,611
1,207,240
Other real estate owned
-
55
55
-
-
Restricted stock investments
11,011
11,011
11,011
11,011
10,121
Servicing assets
7,560
7,673
7,873
8,426
8,528
Goodwill
2,185
2,185
2,185
2,185
2,185
Intangible assets
245
255
267
279
291
Other assets
23,581
24,838
24,799
24,537
25,697
Total assets
$
1,673,261
$
1,760,413
$
1,859,312
$
1,819,630
$
1,821,148
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing
$
286,766
$
305,923
$
406,033
$
426,333
$
428,559
Interest-bearing
1,074,198
1,147,662
1,143,257
1,096,078
1,108,754
Total deposits
1,360,964
1,453,585
1,549,290
1,522,411
1,537,313
FHLB advances
50,000
50,000
50,000
50,000
50,000
Other liabilities
21,727
21,114
31,141
23,956
17,651
Total liabilities
1,432,691
1,524,699
1,630,431
1,596,367
1,604,964
Stockholders' Equity
240,570
235,714
228,881
223,263
216,184
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$
1,673,261
$
1,760,413
$
1,859,312
$
1,819,630
$
1,821,148
FIVE-QUARTER LOANS RECEIVABLE
COMPONENTS (Unaudited) - Table 6
(Dollars in thousands)
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
Balance
%
Balance
%
Balance
%
Balance
%
Balance
%
Construction
$
37,216
3.1
%
$
34,886
2.9
%
$
30,924
2.6
%
$
20,106
1.7
%
$
19,550
1.6
%
Commercial real estate
1,005,765
84.2
%
1,010,495
83.9
%
1,005,735
83.7
%
1,014,785
84.5
%
1,033,124
84.5
%
Commercial and industrial
101,784
8.5
%
108,123
9.0
%
113,374
9.4
%
114,106
9.4
%
114,184
9.3
%
Home mortgage
44,389
3.7
%
44,920
3.7
%
45,452
3.8
%
45,987
3.8
%
49,155
4.0
%
Consumer
668
0.1
%
630
0.1
%
616
0.1
%
1,074
0.1
%
1,049
0.1
%
Gross loans held-for-investment
1,189,822
99.6
%
1,199,054
99.6
%
1,196,101
99.6
%
1,196,058
99.6
%
1,217,062
99.5
%
Deferred loan fees/costs, net
4,617
0.4
%
4,955
0.4
%
5,129
0.4
%
5,179
0.4
%
5,805
0.5
%
Loans held-for-investment
$
1,194,439
100.0
%
$
1,204,009
100.0
%
$
1,201,230
100.0
%
$
1,201,237
100.0
%
$
1,222,867
100.0
%
Loans held-for-sale
$
198,167
$
218,258
$
219,355
$
215,083
$
243,753
Total loans receivable
$
1,392,606
$
1,422,267
$
1,420,585
$
1,416,320
$
1,466,620
FIVE-QUARTER SBA LOAN
PRODUCTIONS/SALES DATA (Unaudited) - Table 7
(Dollars in thousands)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
SBA loans held-for-sale at beginning of the quarter/year
$
218,258
$
219,355
$
215,083
$
243,753
$
230,431
SBA loans originated/transferred from/to held-for-investment during
the quarter/year
14,589
27,022
16,260
18,273
16,890
SBA loans sold during the quarter/year
(28,164
)
(21,749
)
(9,245
)
(42,437
)
-
SBA loans principal paydown/payoff, net of advance
(6,516
)
(6,370
)
(2,743
)
(4,506
)
(3,568
)
SBA loans held-for-sale at end of the quarter/year
$
198,167
$
218,258
$
219,355
$
215,083
$
243,753
Gain on sale of SBA loans
$
1,489
$
838
$
419
$
1,952
$
-
Premium on sale (weighted average)
8.4
%
6.7
%
6.8
%
-
-
SBA loan production
$
18,089
$
37,821
$
24,270
$
24,013
$
21,719
FIVE QUARTER SBA SERVICING
ASSETS AND SERVICING FEES (Unaudited) - Table 8
(Dollars in thousands)
Three Months Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
SBA servicing assets @ beginning of the quarter/year
$
7,673
$
7,873
$
8,426
$
8,528
$
9,232
Newly added SBA servicing assets from SBA loans sold
555
430
182
806
-
Regular quarterly/annual servicing assets amortization
(332
)
(356
)
(371
)
(379
)
(403
)
SBA servicing assets amortized from SBA loans paid off/charged off
(336
)
(274
)
(364
)
(529
)
(301
)
Subtotal before impairment
7,560
7,673
7,873
8,426
8,528
Reversal of valuation allowance on servicing assets
-
-
-
-
-
SBA servicing assets @ the end of the quarter/year
$
7,560
$
7,673
$
7,873
$
8,426
$
8,528
FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9
(Dollars in thousands)
March 31,2024 December
31,2023 September 30,2023 June 30,2023 March
31,2023 Balance % Balance % Balance % Balance % Balance %
Noninterest-bearing demand
$
286,766
21.1
%
$
305,923
21.1
%
$
406,033
26.2
%
$
426,333
28.0
%
$
428,559
27.9
%
Interest-bearing demand
6,709
0.5
%
7,504
0.5
%
6,395
0.4
%
9,056
0.6
%
10,883
0.7
%
NOW & MMDA
229,642
16.9
%
237,548
16.3
%
227,283
14.7
%
210,429
13.8
%
211,793
13.8
%
Savings
84,999
6.2
%
88,689
6.1
%
78,969
5.1
%
62,324
4.1
%
62,188
4.0
%
TCDs of $250K and under
299,944
22.0
%
315,920
21.7
%
312,704
20.2
%
298,520
19.6
%
294,074
19.1
%
TCDs of $250K over
339,482
25.0
%
353,866
24.4
%
373,345
24.1
%
368,262
24.2
%
367,167
23.9
%
Wholesale TCDs
113,422
8.3
%
144,135
9.9
%
144,561
9.3
%
147,487
9.7
%
162,649
10.6
%
Total Deposits
$
1,360,964
100.0
%
$
1,453,585
100.0
%
$
1,549,290
100.0
%
$
1,522,411
100.0
%
$
1,537,313
100.0
%
Recap: Noninterest-bearing demand
$
286,766
21.1
%
$
305,923
21.0
%
$
406,033
26.2
%
$
426,333
28.0
%
$
428,559
27.9
%
Interest-bearing demand
6,709
0.5
%
7,504
0.5
%
6,395
0.4
%
9,056
0.6
%
10,883
0.7
%
NOW & MMDA
229,642
16.9
%
237,548
16.3
%
227,283
14.7
%
210,429
13.8
%
211,793
13.8
%
Savings
84,999
6.2
%
88,689
6.1
%
78,969
5.1
%
62,324
4.1
%
62,188
4.0
%
TCDs of $250K and under
299,944
22.0
%
315,920
21.7
%
312,704
20.2
%
298,520
19.6
%
294,074
19.1
%
Core Deposits
908,060
66.7
%
955,584
65.7
%
1,031,384
66.6
%
1,006,662
66.1
%
1,007,497
65.5
%
TCDs of $250K over
339,482
24.9
%
353,866
24.3
%
373,345
24.1
%
368,262
24.2
%
367,167
23.9
%
Wholesale TCDs
113,422
8.3
%
144,135
9.9
%
144,561
9.3
%
147,487
9.7
%
162,649
10.6
%
Noncore Deposits
452,904
33.3
%
498,001
34.3
%
517,906
33.4
%
515,749
33.9
%
529,816
34.5
%
Total Deposits
$
1,360,964
100.0
%
$
1,453,585
100.0
%
$
1,549,290
100.0
%
$
1,522,411
100.0
%
$
1,537,313
100.0
%
FIVE-QUARTER SELECTED LOAN AND
ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10
(Dollars in thousands)
1st Qtr.
4th Qtr.
3rd Qtr.
2nd Qtr.
1st Qtr.
2024
2023
2023
2023
2023
Allowance for Credit Losses
Balance at beginning of period
$
15,291
$
15,284
$
15,626
$
15,627
$
15,525
CECL transition provision
-
-
-
-
250
Provision for credit losses
743
-
-
-
-
Charge-offs
(2
)
(350
)
(11
)
(159
)
Recoveries
14
9
8
10
11
Balance at the end of period
$
16,048
$
15,291
$
15,284
$
15,626
$
15,627
Nonperforming
Assets:¹ Over 90 days still
accruing
$
1,605
$
399
$
2
$
39
$
-
Nonaccrual loans
2,842
2,030
616
645
636
Total nonperforming loans
4,447
2,429
618
684
636
Other real estate owned
$
-
55
55
-
-
Total nonperforming assets
$
4,447
$
2,484
$
673
$
684
$
636
Classified Assets:¹
Substandard
$
11,912
$
11,063
$
10,105
$
10,491
$
7,673
Doubtful
-
-
-
-
-
Loss
Total classified loans
$
11,912
$
11,063
$
10,105
$
10,491
$
7,673
Other real estate owned
$
-
55
55
-
-
Total classified assets
$
11,912
$
11,118
$
10,160
$
10,491
$
7,673
Performing TDR
loans:¹
$
3,811
$
3,336
$
3,336
$
3,336
$
-
Delinquent
Loans:¹ Loans 30-89 days
past due
$
16,907
$
5,981
$
10,620
$
4,420
$
3,551
90 days or more past due and still accruing
1,605
399
2
39
-
Nonaccrual
2,842
2,030
616
645
636
Total delinquent loans
$
21,354
$
8,410
$
11,238
$
5,104
$
4,187
Asset Quality Ratios:
Net (recoveries) charge-offs to average loans²
0.00
%
0.00
%
0.10
%
0.00
%
0.04
%
Nonaccrual loans to loans held-for-investment
0.24
%
0.17
%
0.05
%
0.05
%
0.05
%
Nonperforming loans to loans held-for-investment
0.37
%
0.20
%
0.05
%
0.06
%
0.05
%
Nonperforming assets to total assets
0.27
%
0.14
%
0.04
%
0.04
%
0.03
%
Classified loans to loans held-for-investment
1.00
%
0.92
%
0.84
%
0.87
%
0.63
%
Classified loans to Tier 1 and ACL
4.69
%
4.45
%
4.18
%
4.44
%
3.35
%
Classified assets to total assets
0.71
%
0.63
%
0.55
%
0.58
%
0.42
%
Classified assets to Tier 1 and ACL
4.69
%
4.47
%
4.20
%
4.44
%
3.35
%
ACL to loans held-for-investment
1.34
%
1.27
%
1.27
%
1.30
%
1.28
%
ACL to nonaccrual loans
564.67
%
753.25
%
2481.17
%
2422.64
%
2457.08
%
ACL to nonperforming loans
360.87
%
629.52
%
2473.14
%
2284.50
%
2457.08
%
ACL to nonperforming assets
360.87
%
615.58
%
2271.03
%
2284.50
%
2457.08
%
Texas ratio ³
1.75
%
1.00
%
0.28
%
0.29
%
0.28
%
¹
Net of SBA guaranteed balance
²
Includes loans held-for-sale
³
Nonperforming assets divided by
tangible common equity and ACL
FIVE-QUARTER CAPITAL RATIOS
(Unaudited) - Table 11
Well Capitalized
Adequately Capitalized
March 31,
December 31,
September 30,
June 30,
March 31,
Regulatory
BASEL III
Requirement
Fully Phased In
2024
2023
2023
2023
2023
Leverage ratio Company
N/A
N/A
13.85
%
12.98
%
12.53
%
12.23
%
11.86
%
Bank
5.00
%
4.00
%
13.84
%
12.96
%
12.50
%
12.20
%
11.82
%
Common equity tier 1 risk-based capital ratio Company
N/A
N/A
18.67
%
18.08
%
17.61
%
17.08
%
16.15
%
Bank
6.50
%
7.00
%
18.65
%
18.05
%
17.57
%
17.03
%
16.10
%
Tier 1 risk-based capital ratio Company
N/A
N/A
18.67
%
18.08
%
17.61
%
17.08
%
16.15
%
Bank
8.00
%
8.50
%
18.65
%
18.05
%
17.57
%
17.03
%
16.10
%
Total risk-based capital ratio Company
N/A
N/A
19.92
%
19.30
%
18.83
%
18.32
%
17.37
%
Bank
10.00
%
10.50
%
19.91
%
19.27
%
18.79
%
18.27
%
17.31
%
Tangible common equity/total assets
14.25
%
13.27
%
12.19
%
12.15
%
11.75
%
Tangible common equity per share
$
22.49
$
22.03
$
21.39
$
20.85
$
20.18
FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12
(Dollars in thousands)
Three Months Ended March
31, 2024 December 31, 2023 September 30, 2023
June 30, 2023 March 31, 2023 Avg Balance
Interest Yield Avg Balance Interest
Yield Avg Balance Interest Yield Avg
Balance Interest Yield Avg Balance
Interest Yield Number of Days in the Period
INTEREST-EARNING ASSETS Loans Receivable¹
$
1,415,924
$
24,906
7.07
%
$
1,410,971
$
24,926
7.01
%
$
1,417,148
$
24,734
6.92
%
$
1,444,608
$
24,661
6.85
%
$
1,502,078
$
24,379
6.58
%
Investment securities ²
59,554
575
3.88
%
60,094
563
3.72
%
64,587
577
3.54
%
67,958
595
3.51
%
70,146
577
3.34
%
Interest-earning deposits at the FRB and other banks
207,155
2,817
5.47
%
288,769
3,973
5.46
%
293,081
3,994
5.41
%
258,236
3,296
5.12
%
190,692
2,178
4.63
%
Other earning assets
11,011
214
7.82
%
11,011
212
7.64
%
11,011
196
7.06
%
10,825
163
6.04
%
10,121
164
6.57
%
Total interest-earning assets ²
1,693,644
28,512
6.77
%
1,770,845
29,674
6.65
%
1,785,827
29,501
6.55
%
1,781,627
28,715
6.46
%
1,773,037
27,298
6.24
%
NONINTEREST-EARNING ASSETS Cash and due from banks
12,172
12,567
13,045
12,792
14,262
Other noninterest-earning assets
31,967
32,985
33,331
34,060
36,643
Total noninterest-earning assets
44,139
45,552
46,376
46,852
50,905
Less: Allowance for credit losses
(15,322
)
(15,291
)
(15,622
)
(15,627
)
(15,552
)
TOTAL ASSETS
$
1,722,461
$
1,801,106
$
1,816,581
$
1,812,852
$
1,808,390
INTEREST-BEARING DEPOSITS Interest-bearing demand
$
12,680
$
6
0.19
%
$
12,657
$
7
0.22
%
$
12,347
$
6
0.19
%
$
14,522
$
7
0.19
%
$
18,021
$
9
0.20
%
Money market
229,441
2,285
4.01
%
222,289
2,158
3.85
%
211,152
1,907
3.58
%
192,872
1,414
2.94
%
231,865
1,469
2.57
%
Savings
84,854
724
3.43
%
82,403
664
3.20
%
70,579
494
2.78
%
63,786
324
2.04
%
55,576
164
1.20
%
Time deposits
801,122
9,523
4.78
%
824,900
9,515
4.58
%
820,335
8,916
4.31
%
839,198
8,068
3.86
%
797,072
6,410
3.26
%
Total interest-bearing deposits
1,128,097
12,538
4.47
%
1,142,249
12,344
4.29
%
1,114,413
11,323
4.03
%
1,110,378
9,813
3.54
%
1,102,534
8,052
2.96
%
Borrowings
50,000
117
0.94
%
50,001
118
0.94
%
50,001
119
0.94
%
50,000
117
0.94
%
50,000
116
0.94
%
Total interest-bearing liabilities
1,178,097
12,655
4.32
%
1,192,250
12,462
4.15
%
1,164,414
11,442
3.90
%
1,160,378
9,930
3.43
%
1,152,534
8,168
2.87
%
Noninterest-bearing deposits
284,867
350,656
397,791
411,432
425,190
Other liabilities
21,112
25,602
27,519
20,934
16,947
Stockholders' equity
238,385
232,598
226,857
220,108
213,719
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$
1,722,461
$
1,801,106
$
1,816,581
$
1,812,852
$
1,808,390
Net interest income²
$
15,857
$
17,212
$
18,059
$
18,785
$
19,130
Net interest spread
2.45
%
2.50
%
2.65
%
3.03
%
3.37
%
Effect of noninterest-bearing sources
1.32
%
1.36
%
1.36
%
1.20
%
1.01
%
Net interest margin²
3.77
%
3.86
%
4.01
%
4.23
%
4.38
%
Cost of deposits
$
1,412,964
$
12,538
3.57
%
$
1,492,905
$
12,344
3.28
%
$
1,512,204
$
11,323
2.97
%
$
1,521,810
$
9,813
2.59
%
$
1,527,724
$
8,052
2.14
%
Cost of funds
$
1,462,964
$
12,655
3.48
%
$
1,542,906
$
12,462
3.20
%
$
1,562,205
$
11,442
2.91
%
$
1,571,810
$
9,930
2.53
%
$
1,577,724
$
8,168
2.10
%
FIVE-QUARTER COMPONENTS OF
YIELD ON LOANS (Unaudited) - Table 13
(Dollars in thousands)
Three Months Ended
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Contractual yield
$
24,138
6.86
%
$
24,235
6.81
%
$
23,932
6.70
%
$
23,767
6.60
%
$
23,643
6.38
%
SBA discount accretion
926
0.26
%
845
0.24
%
921
0.25
%
1,124
0.31
%
937
0.25
%
Prepayment penalties and late fees
67
0.01
%
40
0.01
%
18
0.01
%
60
0.02
%
30
0.01
%
Amortization of net deferred costs
(225
)
-0.06
%
(194
)
-0.05
%
(137
)
-0.04
%
(290
)
-0.08
%
(231
)
-0.06
%
As reported yield on loans
$
24,906
7.07
%
$
24,926
7.01
%
$
24,734
6.92
%
$
24,661
6.85
%
$
24,379
6.58
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240426093642/en/
Richard Koh, EVP & CFO (323) 988-3037
RichardK@cbb-bank.com