CBB Bancorp, Inc. Reports Third Quarter 2023 Financial Results
In This Article:
LOS ANGELES, October 27, 2023--(BUSINESS WIRE)--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 2023 of $6.7 million, or $0.63 per diluted share, a decrease of 17.1% compared to $8.1 million, or $0.76 per diluted share, in the prior quarter and an increase of 16.7% compared to $5.7 million, or $0.54 per diluted share, in the same period last year.
OVERALL RESULTS
Net income for the third quarter 2023 declined from the prior period due to lower gain on sale of SBA loans and reduced net interest margin caused by rising cost of deposits. The return on average assets for the third quarter 2023 was 1.46% compared to 1.79% for the second quarter 2023 and 1.27% for the third quarter 2022. The return on average equity for the third quarter 2023 was 11.66%, compared to 14.76% for the second quarter 2023 and 11.24% for the third quarter 2022. The net interest margin for the third quarter 2023 was 4.01%, compared to 4.23% for the second quarter 2023 and 4.28% for the third quarter 2022. The efficiency ratio for the third quarter 2023 was 52.23%, compared to 47.29% for the second quarter 2023 and 55.64% for the third quarter 2022. While the efficiency ratio has decreased year over year, it increased quarter over quarter due to lower gain on sale of loans compared to the second quarter.
James Hong, President and CEO, commented, "We are pleased to announce continuing profitability for the third quarter of 2023, with strong liquidity, credit, and capital metrics. While the decisions on the timing of when to sell SBA loans contributed to lower earnings compared to the second quarter, we remain committed to building the core earnings of the Company in a safe and sound manner over time."
INCOME STATEMENT
Net Interest Income
Net interest income for the third quarter 2023 was $18.0 million, a decrease of $726 thousand, or 3.9%, from the second quarter 2023, and a decrease of $819 thousand, or 4.4%, from the third quarter 2022. The decrease in net interest income compared with both the second quarter 2023 and the third quarter 2022 was primarily due to the impact of relatively higher increases in interest expense on deposits.
Net Interest Margin
The net interest margin for the third quarter 2023 was 4.01%, compared to 4.23% for the second quarter 2023 and 4.28% for the third quarter 2022. The quarter-over-quarter and year-over-year decreases in net interest margin were attributable to the rising cost of funds. The cost of funds for the third quarter 2023 increased to 2.91% compared to 2.53% for second quarter 2023 and 0.63% for third quarter 2022.
Provision for Credit Losses
No provision for credit losses was recorded for the third quarter 2023 or for the second quarter 2023, compared with a provision for credit losses of $0.9 million for the third quarter 2022. See Table 10 in this press release for additional information and trends.
Noninterest Income
Noninterest income in third quarter 2023 was $1.5 million compared to $2.8 million in second quarter 2023 and $1.2 million in third quarter 2022. The quarter-over-quarter decrease in noninterest income was primarily the result of lower gain on sale of loans. The Bank sold $9.2 million in SBA loans with an average premium of 8.3% during third quarter 2023 compared to sale of $42.4 million in SBA loans with an average premium of 6.8% during second quarter 2023. There was no sale of SBA loans during the third quarter 2022.
Noninterest Expense
Noninterest expense for the third quarter 2023 was $10.2 million, compared to $10.2 million for the second quarter 2023 and $11.2 million for the third quarter 2022. Salaries and employee benefits were $5.6 million in both third and second quarters of 2023, which decreased $1.3 million compared to the third quarter 2022. Lower salaries and employee benefits in the current quarter compared to the same quarter last year reflect both ongoing cost control efforts and efficiencies realized from completing the integration of Ohana Pacific Bank operations.
Income Taxes
The Company’s effective tax rate for third quarter 2023 was 28.3% compared to 28.6% for second quarter 2023 and 28.3% for third quarter 2022.
BALANCE SHEET
Investment Securities
Investment securities were $61.6 million on September 30, 2023, a decrease of $4.8 million or 7.2% from June 30, 2023, and a decrease of $14.2 million or 18.8% from September 30, 2022. The decreases were due to principal paydowns and an absence of portfolio additions in the nine months of 2023, or in the fourth quarter 2022. The unrealized losses on available for sale investments were approximately $1.1 million at September 30, 2023, $0.9 million at June 30, 2023, and $1.4 million at September 30, 2022, all net of tax effects. Management believes that the Bank currently has adequate liquidity and does not need to sell any securities for liquidity purposes.
Loans Receivable
Loans receivable (including loans held-for-sale) at September 30, 2023, was $1.4 billion, an increase of $4.3 million, or 0.3% from June 30, 2023, and a decrease of $26.4 million, or 1.8%, from September 30, 2022. The slow increase in loans receivable compared to last quarter and decrease from a year ago, reflects the difficult environment for loan originations due to reduced demand stemming from the higher interest rate environment.
The weighted average loan-to-value ratio of commercial real estate loans ("CRE") was 66.5% at September 30, 2023. Excluding SBA loans, the weighted average loan-to-value ratio of CRE loans was 49.2%.
Allowance for Credit Losses and Asset Quality
The allowance for credit losses at September 30, 2023, was $15.3 million, or 1.27% of total loans compared to $15.6 million, or 1.30% of total loans at June 30, 2023, and $15.6 million, or 1.24% of total loans at September 30, 2022. Nonperforming loans at September 30, 2023 were $618 thousand, compared to $684 thousand at June 30, 2023, and $690 thousand at September 30, 2022. The coverage ratio of allowance for credit losses to nonperforming assets exceeded 2200% at September 30, 2023.
SBA Loans Held-for-Sale
Total SBA loans held-for-sale at September 30, 2023, was $219.4 million, compared to $ 215.1 million at June 30 2023, and $186.4 million at September 30, 2022. We continue to assess SBA loan market premiums and plan to sell loans when 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, 2023, up $26.9 million, or 1.8%, from June 30, 2023, and up $16.0 million, or 1.0%, from September 30, 2022. Noninterest-bearing demand deposits ("DDAs") at September 30, 2023 decreased $20.3 million, or 4.8%, to $406.0 million from the previous quarter, and decreased $156.0 million, or 27.8%, from September 30, 2022. DDAs were 26.6% of total deposits at September 30, 2023, compared to 28.6% at June 30, 2023, and 37.3% at September 30, 2022. NOW and MMDA accounts increased $16.9 million, or 8.0%, to $227.3 million at September 30, 2023 from the previous quarter and decreased $86.4 million, or 27.6%, compared to September 30, 2022. The quarter over quarter and year over year declines in DDAs can be attributed to the growing interest rate environment. Depositors were eager to capitalize on the rising interest rates, leading to a decrease in DDAs and a simultaneous increase in NOW and MMDA balances.
As of September 30, 2023, time deposits increased $16.3 million, or 2.0%, quarter over quarter, and $250 million, or 43.1%, from September 30, 2022. Time deposits at September 30, 2023, were $830.6 million, or 53.6% of total deposits, compared to $814.3 million, or 53.5% of total deposits at June 30, 2023, and $580.6 million, or 37.9% of total deposits at September 30, 2022. The increase in time deposits during the third quarter of 2023 compared to a year ago reflects depositors’ preferences for higher paying term deposits over money market and checking accounts as rates have risen significantly since March 2022. The primary reason for the decrease in noninterest-bearing deposits during 2023 was a decline in escrow-related deposits as the higher interest rate environment caused a significant slowdown in business activities for that sector.
Other Liabilities
Other Liabilities increased 30% quarter over quarter and 121% year over year, primarily due to increases in accrued interest payable, as the Bank’s overall cost of funds increased during these periods.
Borrowings
The Bank has maintained $50.0 million of Federal Home Loan Bank advances since September 30, 2022. The blended cost of FHLB advances was 0.94% as of September 30, 2023.
Capital
Stockholders’ equity was $228.9 million at September 30, 2023 representing an increase of $5.6 million, or 2.5%, from $223.3 million at June 30, 2023. Tangible book value per share at September 30, 2023, was $21.39, compared with $20.85 at June 30, 2023, an increase of $0.54, or 2.6%, per share.
Each of the Company’s and the Bank’s regulatory capital ratios increased at September 30, 2023 when compared to June 30, 2023 and September 30, 2022. Capital ratios continue to exceed the minimum levels required to be considered "Well Capitalized" under the applicable regulatory capital rules and in compliance with the fully phased-in Basel III requirements as shown on Table 11 in this press release. The Common Equity Tier 1 risked-based capital at September 30, 2023, was 17.61% at the Company level and 17.57% at the Bank level, and total capital ratios were 18.83% and 18.79% 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 September 30, 2023, 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 five loan production offices in Texas, Georgia, Colorado, and Washington. For additional information, please go to www.cbb-bank.com under the tab "About Us" and select "Investors Relations" to see the 3Q 2023 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") intend that such forward-looking statements be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described herein are necessarily subject to risks and uncertainties that may cause actual results to differ materially and adversely from those described herein. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Factors that might cause actual results to differ materially from those presented, either expressed or implied, in this news release include, but are not limited to: the Company’s ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company’s operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.
The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances, except to the extent required by law.
Schedules and Financial Data: All tables and data to follow
| STATEMENT OF INCOME AND PERFORMANCE HIGHLIGHT (Unaudited) - Table 1 | ||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||
| September 30, | June 30, | $ | % | September 30, | $ | % | September 30, | September 30, | $ | % | ||||||||||||||||||||||||||||||
| 2023 | 2023 | Change | Change | 2022 | Change | Change | 2023 | 2022 | Change | Change | ||||||||||||||||||||||||||||||
| Interest income | $ | 29,450 | $ | 28,664 | $ | 786 | 2.7 | % | $ | 21,334 | $ | 8,116 | 38.0 | % | $ | 85,362 | $ | 56,173 | $ | 29,189 | 52.0 | % | ||||||||||||||||||
| Interest expense | 11,442 | 9,930 | 1,512 | 15.2 | % | 2,507 | 8,935 | 356.4 | % | 29,540 | 5,085 | 24,455 | 480.9 | % | ||||||||||||||||||||||||||
| Net interest income | 18,008 | 18,734 | (726 | ) | (3.9 | %) | 18,827 | (819 | ) | (4.4 | %) | 55,822 | 51,088 | 4,734 | 9.3 | % | ||||||||||||||||||||||||
| Provision for credit losses | - | - | - | - | 910 | (910 | ) | (100.0 | %) | - | 1,343 | (1,343 | ) | (100.0 | %) | |||||||||||||||||||||||||
| Net interest income after provision for credit losses | 18,008 | 18,734 | (726 | ) | (3.9 | %) | 17,917 | 91 | 0.5 | % | 55,822 | 49,745 | 6,077 | 12.2 | % | |||||||||||||||||||||||||
| Gain on sale of loans | 419 | 1,952 | (1,533 | ) | -78.5 | % | - | 419 | 100.0 | % | 2,371 | 7,966 | (5,595 | ) | (70.2 | %) | ||||||||||||||||||||||||
| SBA servicing fee income, net | 639 | 440 | 199 | 45.2 | % | 709 | (70 | ) | (9.9 | %) | 1,733 | 1,956 | (223 | ) | (11.4 | %) | ||||||||||||||||||||||||
| Service charges and other income | 402 | 407 | (5 | ) | (1.2 | %) | 518 | (116 | ) | (22.4 | %) | 1,207 | 1,478 | (271 | ) | (18.3 | %) | |||||||||||||||||||||||
| Noninterest income | 1,460 | 2,799 | (1,339 | ) | (47.8 | %) | 1,227 | 233 | 19.0 | % | 5,311 | 11,400 | (6,089 | ) | (53.4 | %) | ||||||||||||||||||||||||
| Salaries and employee benefits | 5,569 | 5,581 | (12 | ) | (0.2 | %) | 6,861 | (1,292 | ) | (18.8 | %) | 17,229 | 20,920 | (3,691 | ) | (17.6 | %) | |||||||||||||||||||||||
| Occupancy and equipment | 1,103 | 1,122 | (19 | ) | (1.7 | %) | 1,118 | (15 | ) | (1.3 | %) | 3,349 | 3,352 | (3 | ) | (0.1 | %) | |||||||||||||||||||||||
| Marketing expense | 475 | 409 | 66 | 16.1 | % | 489 | (14 | ) | (2.9 | %) | 1,258 | 1,485 | (227 | ) | (15.3 | %) | ||||||||||||||||||||||||
| Professional expense | 443 | 436 | 7 | 1.6 | % | 519 | (76 | ) | (14.6 | %) | 1,333 | 1,451 | (118 | ) | (8.1 | %) | ||||||||||||||||||||||||
| Merger related expense | 5 | 2 | 3 | 150.0 | % | 47 | (42 | ) | (89.4 | %) | 16 | 170 | (154 | ) | (90.6 | %) | ||||||||||||||||||||||||
| Other expenses | 2,574 | 2,633 | (59 | ) | (2.2 | %) | 2,125 | 449 | 21.1 | % | 7,442 | 5,035 | 2,407 | 47.8 | % | |||||||||||||||||||||||||
| Noninterest expense | 10,169 | 10,183 | (14 | ) | (0.1 | %) | 11,159 | (990 | ) | (8.9 | %) | 30,627 | 32,413 | (1,786 | ) | (5.5 | %) | |||||||||||||||||||||||
| Income before income tax provision | 9,299 | 11,350 | (2,051 | ) | (18.1 | %) | 7,985 | 1,314 | 16.5 | % | 30,506 | 28,732 | 1,774 | 6.2 | % | |||||||||||||||||||||||||
| Income tax provision | 2,630 | 3,248 | (618 | ) | (19.0 | %) | 2,258 | 372 | 16.5 | % | 8,645 | 8,141 | 504 | 6.2 | % | |||||||||||||||||||||||||
| Net income | $ | 6,669 | $ | 8,102 | $ | (1,433 | ) | (17.7 | %) | $ | 5,727 | $ | 942 | 16.4 | % | $ | 21,861 | $ | 20,591 | $ | 1,270 | 6.2 | % | |||||||||||||||||
| Effective tax rate | 28.3 | % | 28.6 | % | (0.3 | %) | (1.2 | %) | 28.3 | % | 0.0 | % | 0.0 | % | 28.3 | % | 28.3 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||
| Outstanding number of shares | 10,588,136 | 10,588,136 | - | - | 10,569,601 | 18,535 | 0.2 | % | 10,588,136 | 10,569,601 | 18,535 | 0.2 | % | |||||||||||||||||||||||||||
| Weighted average shares for basic EPS | 10,588,136 | ... | 10,588,136 | - | 0.0 | % | 10,516,394 | 71,742 | 0.7 | % | 10,584,198 | 10,371,652 | 212,546 | 2.0 | % | |||||||||||||||||||||||||
| Weighted average shares for diluted EPS | 10,594,155 | 10,591,351 | 2,804 | 0.0 | % | 10,545,544 | 48,611 | 0.5 | % | 10,595,275 | 10,476,560 | 118,715 | 1.1 | % | ||||||||||||||||||||||||||
| Basic EPS | $ | 0.63 | $ | 0.77 | $ | (0.14 | ) | (18.2 | %) | $ | 0.54 | $ | 0.09 | 16.7 | % | $ | 2.07 | $ | 1.98 | $ | 0.09 | 4.5 | % | |||||||||||||||||
| Diluted EPS | $ | 0.63 | $ | 0.76 | $ | (0.13 | ) | (17.1 | %) | $ | 0.54 | $ | 0.09 | 16.7 | % | $ | 2.06 | $ | 1.96 | $ | 0.10 | 5.1 | % | |||||||||||||||||
| Return on average assets | 1.46 | % | 1.79 | % | (0.33 | %) | (18.4 | %) | 1.27 | % | 0.19 | % | 15.0 | % | 1.61 | % | 1.53 | % | 0.08 | % | 5.2 | % | ||||||||||||||||||
| Return on average equity | 11.66 | % | 14.76 | % | (3.10 | %) | (21.0 | %) | 11.24 | % | 0.42 | % | 3.7 | % | 13.27 | % | 14.10 | % | (0.83 | %) | (5.9 | %) | ||||||||||||||||||
| Efficiency ratio1 | 52.23 | % | 47.29 | % | 4.94 | % | 10.5 | % | 55.64 | % | (3.41 | %) | (6.1 | %) | 50.10 | % | 51.87 | % | (1.77 | %) | (3.4 | %) | ||||||||||||||||||
| Yield on interest-earning assets2 | 6.55 | % | 6.46 | % | 0.09 | % | 1.4 | % | 4.85 | % | 1.70 | % | 35.1 | % | 6.42 | % | 4.29 | % | 2.13 | % | 49.7 | % | ||||||||||||||||||
| Cost of funds | 2.91 | % | 2.53 | % | 0.38 | % | 15.0 | % | 0.63 | % | 2.28 | % | 361.9 | % | 2.51 | % | 0.43 | % | 2.08 | % | 483.7 | % | ||||||||||||||||||
| Net interest margin2 | 4.01 | % | 4.23 | % | (0.22 | %) | (5.2 | %) | 4.28 | % | (0.27 | %) | (6.3 | %) | 4.20 | % | 3.91 | % | 0.29 | % | 7.4 | % | ||||||||||||||||||
| 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) | |||||||||||||||||||||||||
| September 30, | June 30, | $ | % | September 30, | $ | % | |||||||||||||||||||
| 2023 | 2023 | Change | Change | 2022 | Change | Change | |||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||
| Cash and due from banks | $ | 11,188 | $ | 12,704 | $ | (1,516 | ) | (11.9 | %) | $ | 17,232 | $ | (6,044 | ) | (35.1 | %) | |||||||||
| Interest-earning deposits at the FRB and other banks | 335,016 | 293,394 | 41,622 | 14.2 | % | 225,044 | 109,972 | 48.9 | % | ||||||||||||||||
| Investment securities1 | 61,617 | 66,400 | (4,783 | ) | (7.2 | %) | 75,839 | (14,222 | ) | (18.8 | %) | ||||||||||||||
| Loans held-for-sale | 219,355 | 215,083 | 4,272 | 2.0 | % | 186,438 | 32,917 | 17.7 | % | ||||||||||||||||
| Loans held-for-investment | 1,201,230 | 1,201,237 | (7 | ) | (0.0 | %) | 1,260,590 | (59,360 | ) | (4.7 | %) | ||||||||||||||
| Less: Allowance for credit losses ("ACL") | (15,284 | ) | (15,626 | ) | 342 | 2.2 | % | (15,602 | ) | 318 | 2.0 | % | |||||||||||||
| Loans held-for-investment, net | 1,185,946 | 1,185,611 | 335 | 0.0 | % | 1,244,988 | (59,042 | ) | (4.7 | %) | |||||||||||||||
| Other real estate owned ("OREO") | 55 | - | 55 | 100.0 | % | - | 55 | 100.0 | % | ||||||||||||||||
| Restricted stock investments | 11,011 | 11,011 | - | - | 10,121 | 890 | 8.8 | % | |||||||||||||||||
| Servicing assets | 7,873 | 8,426 | (553 | ) | (6.6 | %) | 10,158 | (2,285 | ) | (22.5 | %) | ||||||||||||||
| Goodwill | 2,185 | 2,185 | - | - | 2,185 | - | - | ||||||||||||||||||
| Intangible assets | 267 | 279 | (12 | ) | (4.3 | %) | 317 | (50 | ) | (15.8 | %) | ||||||||||||||
| Other assets | 24,799 | 24,537 | 262 | 1.1 | % | 27,845 | (3,046 | ) | (10.9 | %) | |||||||||||||||
| Total assets | $ | 1,859,312 | $ | 1,819,630 | $ | 39,682 | 2.2 | % | $ | 1,800,167 | $ | 59,145 | 3.3 | % | |||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||
| Noninterest-bearing | $ | 406,033 | $ | 426,333 | $ | (20,300 | ) | (4.8 | %) | $ | 562,051 | $ | (156,018 | ) | (27.8 | %) | |||||||||
| Interest-bearing | 1,143,257 | 1,096,078 | 47,179 | 4.3 | % | 971,263 | 171,994 | 17.7 | % | ||||||||||||||||
| Total deposits | 1,549,290 | 1,522,411 | 26,879 | 1.8 | % | 1,533,314 | 15,976 | 1.0 | % | ||||||||||||||||
| FHLB advances and other borrowing | 50,000 | 50,000 | - | - | 50,000 | - | - | ||||||||||||||||||
| Other liabilities | 31,141 | 23,956 | 7,185 | 30.0 | % | 14,109 | 17,032 | 120.7 | % | ||||||||||||||||
| Total liabilities | 1,630,431 | 1,596,367 | 34,064 | 2.1 | % | 1,597,423 | 33,008 | 2.1 | % | ||||||||||||||||
| Stockholders' Equity | 228,881 | 223,263 | 5,618 | 2.5 | % | 202,744 | 26,137 | 12.9 | % | ||||||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 1,859,312 | $ | 1,819,630 | $ | 39,682 | 2.2 | % | $ | 1,800,167 | $ | 59,145 | 3.3 | % | |||||||||||
| CAPITAL RATIOS | |||||||||||||||||||||||||
| Leverage ratio | |||||||||||||||||||||||||
| Company | 12.53 | % | 12.23 | % | 0.30 | % | 2.4 | % | 11.25 | % | 1.28 | % | 11.4 | % | |||||||||||
| Bank | 12.50 | % | 12.20 | % | 0.31 | % | 2.5 | % | 11.15 | % | 1.35 | % | 12.1 | % | |||||||||||
| Common equity tier 1 risk-based capital ratio | |||||||||||||||||||||||||
| Company | 17.61 | % | 17.08 | % | 0.53 | % | 3.1 | % | 14.82 | % | 2.79 | % | 18.8 | % | |||||||||||
| Bank | 17.58 | % | 17.03 | % | 0.55 | % | 3.2 | % | 14.70 | % | 2.88 | % | 19.6 | % | |||||||||||
| Tier 1 risk-based capital ratio | |||||||||||||||||||||||||
| Company | 17.61 | % | 17.08 | % | 0.53 | % | 3.1 | % | 14.82 | % | 2.79 | % | 18.8 | % | |||||||||||
| Bank | 17.57 | % | 17.03 | % | 0.54 | % | 3.2 | % | 14.70 | % | 2.88 | % | 19.6 | % | |||||||||||
| Total risk-based capital ratio | |||||||||||||||||||||||||
| Company | 18.83 | % | 18.32 | % | 0.51 | % | 2.8 | % | 16.02 | % | 2.81 | % | 17.6 | % | |||||||||||
| Bank | 18.79 | % | 18.27 | % | 0.52 | % | 2.9 | % | 15.89 | % | 2.90 | % | 18.2 | % | |||||||||||
| Tangible common equity per share | $ | 21.39 | $ | 20.85 | $ | 0.54 | 2.6 | % | $ | 18.95 | $ | 2.44 | 12.9 | % | |||||||||||
| Loan-to-Deposit ("LTD") ratio | 77.53 | % | 78.90 | % | (1.37 | %) | (1.7 | %) | 82.21 | % | (4.68 | %) | (5.7 | %) | |||||||||||
| Nonperforming assets | $ | 673 | $ | 684 | $ | (11 | ) | (1.6 | %) | $ | 690 | $ | (17 | ) | (2.5 | %) | |||||||||
| Nonperforming assets as a % of loans held-for-investment | 0.06 | % | 0.06 | % | 0.00 | % | 0.00 | % | 0.05 | % | 0.01 | % | 20.0 | % | |||||||||||
| ACL as a % of loans held-for-investment | 1.27 | % | 1.30 | % | (0.03 | %) | (2.31 | %) | 1.24 | % | 0.03 | % | 2.4 | % | |||||||||||
| 1 Includes AFS and HTM | |||||||||||||||||||||||||
| 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, | |||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
| Interest income | $ | 29,450 | $ | 28,664 | $ | 27,248 | $ | 24,744 | $ | 21,334 | |||||||||
| Interest expense | 11,442 | 9,930 | 8,168 | 4,677 | 2,507 | ||||||||||||||
| Net interest income | 18,008 | 18,734 | 19,080 | 20,067 | 18,827 | ||||||||||||||
| Provision for credit losses | - | - | - | - | 910 | ||||||||||||||
| Net interest income after provision for credit losses | 18,008 | 18,734 | 19,080 | 20,067 | 17,917 | ||||||||||||||
| Gain on sale of loans | 419 | 1,952 | - | - | - | ||||||||||||||
| SBA servicing fee income, net | 639 | 440 | 654 | 491 | 709 | ||||||||||||||
| Service charges and other income | 402 | 407 | 398 | 457 | 518 | ||||||||||||||
| Noninterest income | 1,460 | 2,799 | 1,052 | 948 | 1,227 | ||||||||||||||
| Salaries and employee benefits | 5,569 | 5,581 | 6,079 | 6,233 | 6,861 | ||||||||||||||
| Occupancy and equipment | 1,103 | 1,122 | 1,124 | 1,133 | 1,118 | ||||||||||||||
| Marketing expense | 475 | 409 | 374 | 434 | 489 | ||||||||||||||
| Professional expense | 443 | 436 | 454 | 418 | 519 | ||||||||||||||
| Merger related expense | 5 | 2 | 9 | 7 | 47 | ||||||||||||||
| Other expenses | 2,574 | 2,633 | 2,235 | 2,579 | 2,125 | ||||||||||||||
| Noninterest expense | 10,169 | 10,183 | 10,275 | 10,804 | 11,159 | ||||||||||||||
| Income before income tax expense | 9,299 | 11,350 | 9,857 | 10,211 | 7,985 | ||||||||||||||
| Income tax expense | 2,630 | 3,248 | 2,767 | 2,882 | 2,258 | ||||||||||||||
| Net income | $ | 6,669 | $ | 8,102 | $ | 7,090 | $ | 7,329 | $ | 5,727 | |||||||||
| Effective tax rate | 28.3 | % | 28.6 | % | 28.1 | % | 28.2 | % | 28.3 | % | |||||||||
| Outstanding number of shares | 10,588,136 | 10,588,136 | 10,588,136 | 10,569,601 | 10,569,601 | ||||||||||||||
| Weighted average shares for basic EPS | 10,588,136 | 10,588,136 | 10,576,191 | 10,569,601 | 10,516,394 | ||||||||||||||
| Weighted average shares for diluted EPS | 10,594,155 | 10,591,351 | 10,600,189 | 10,600,053 | 10,545,544 | ||||||||||||||
| Basic EPS | $ | 0.63 | $ | 0.77 | $ | 0.67 | $ | 0.70 | $ | 0.54 | |||||||||
| Diluted EPS | $ | 0.63 | $ | 0.76 | $ | 0.67 | $ | 0.70 | $ | 0.54 | |||||||||
| 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, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
| Salaries and benefits | $ | 5,569 | $ | 5,581 | $ | 6,079 | $ | 6,233 | $ | 6,861 | ||||||||||
| FTE at the end of period | 172 | 165 | 170 | 179 | 190 | |||||||||||||||
| Average FTE during the period | 168 | 164 | 174 | 184 | 193 | |||||||||||||||
| Salaries and benefits/average FTE1 | $ | 131 | $ | 137 | $ | 142 | $ | 134 | $ | 141 | ||||||||||
| Salaries and benefits/average assets1 | 1.22 | % | 1.23 | % | 1.36 | % | 1.39 | % | 1.52 | % | ||||||||||
| Noninterest expense/average assets1 | 2.22 | % | 2.25 | % | 2.30 | % | 2.41 | % | 2.47 | % | ||||||||||
| 1 Annualized | ||||||||||||||||||||
| FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5 | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 11,188 | $ | 12,704 | $ | 13,788 | $ | 20,134 | $ | 17,232 | |||||||||
| Interest-earning deposits at the FRB and other banks | 335,016 | 293,394 | 240,602 | 170,839 | 225,044 | ||||||||||||||
| Investment securities | 61,617 | 66,400 | 68,943 | 72,550 | 75,839 | ||||||||||||||
| Loans held-for-sale | 219,355 | 215,083 | 243,753 | 230,431 | 186,438 | ||||||||||||||
| Loans held-for-investment | 1,201,230 | 1,201,237 | 1,222,867 | 1,285,278 | 1,260,590 | ||||||||||||||
| Less: Allowance for credit losses | (15,284 | ) | (15,626 | ) | (15,627 | ) | (15,525 | ) | (15,602 | ) | |||||||||
| Loans held-for-investment, net | 1,185,946 | 1,185,611 | 1,207,240 | 1,269,753 | 1,244,988 | ||||||||||||||
| Other real estate owned | 55 | - | - | - | - | ||||||||||||||
| Restricted stock investments | 11,011 | 11,011 | 10,121 | 10,121 | 10,121 | ||||||||||||||
| Servicing assets | 7,873 | 8,426 | 8,528 | 9,232 | 10,158 | ||||||||||||||
| Goodwill | 2,185 | 2,185 | 2,185 | 2,185 | 2,185 | ||||||||||||||
| Intangible assets | 267 | 279 | 291 | 303 | 317 | ||||||||||||||
| Other assets | 24,799 | 24,537 | 25,697 | 26,939 | 27,845 | ||||||||||||||
| Total assets | $ | 1,859,312 | $ | 1,819,630 | $ | 1,821,148 | $ | 1,812,487 | $ | 1,800,167 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||
| Noninterest-bearing | $ | 406,033 | $ | 426,333 | $ | 428,559 | $ | 451,651 | $ | 562,051 | |||||||||
| Interest-bearing | 1,143,257 | 1,096,078 | 1,108,754 | 1,086,599 | 971,263 | ||||||||||||||
| Total deposits | 1,549,290 | 1,522,411 | 1,537,313 | 1,538,250 | 1,533,314 | ||||||||||||||
| FHLB advances | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | ||||||||||||||
| Other liabilities | 31,141 | 23,956 | 17,651 | 14,706 | 14,109 | ||||||||||||||
| Total liabilities | 1,630,431 | 1,596,367 | 1,604,964 | 1,602,956 | 1,597,423 | ||||||||||||||
| Stockholders' Equity | 228,881 | 223,263 | 216,184 | 209,531 | 202,744 | ||||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 1,859,312 | $ | 1,819,630 | $ | 1,821,148 | $ | 1,812,487 | $ | 1,800,167 | |||||||||
| FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6 | |||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||||
| Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | ||||||||||||||||||||
| Construction | $ | 30,924 | 2.6 | % | $ | 20,106 | 1.7 | % | $ | 19,550 | 1.6 | % | $ | 17,537 | 1.4 | % | $ | 14,919 | 1.2 | % | |||||||||
| Commercial real estate | 1,005,735 | 83.7 | % | 1,014,785 | 84.5 | % | 1,033,124 | 84.5 | % | 1,078,588 | 83.9 | % | 1,050,154 | 83.3 | % | ||||||||||||||
| Commercial and industrial | 113,374 | 9.4 | % | 114,106 | 9.4 | % | 114,184 | 9.3 | % | 125,298 | 9.7 | % | 128,099 | 10.1 | % | ||||||||||||||
| Home mortgage | 45,452 | 3.8 | % | 45,987 | 3.8 | % | 49,155 | 4.0 | % | 52,031 | 4.1 | % | 57,773 | 4.6 | % | ||||||||||||||
| Consumer | 616 | 0.1 | % | 1,074 | 0.1 | % | 1,049 | 0.1 | % | 6,260 | 0.5 | % | 4,839 | 0.4 | % | ||||||||||||||
| Gross loans held-for-investment | 1,196,101 | 99.6 | % | 1,196,058 | 99.6 | % | 1,217,062 | 99.5 | % | 1,279,714 | 99.6 | % | 1,255,784 | 99.6 | % | ||||||||||||||
| Deferred loan fees/costs, net | 5,129 | 0.4 | % | 5,179 | 0.4 | % | 5,805 | 0.5 | % | 5,564 | 0.4 | % | 4,806 | 0.4 | % | ||||||||||||||
| Loans held-for-investment | $ | 1,201,230 | 100.0 | % | $ | 1,201,237 | 100.0 | % | $ | 1,222,867 | 100.0 | % | $ | 1,285,278 | 100.0 | % | $ | 1,260,590 | 100.0 | % | |||||||||
| Loans held-for-sale | $ | 219,355 | $ | 215,083 | $ | 243,753 | $ | 230,431 | $ | 186,438 | |||||||||||||||||||
| Total loans receivable | $ | 1,420,585 | $ | 1,416,320 | $ | 1,466,620 | $ | 1,515,709 | $ | 1,447,028 | |||||||||||||||||||
| FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7 | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
| SBA loans held-for-sale at beginning of the quarter/year | $ | 215,083 | $ | 243,753 | $ | 230,431 | $ | 186,438 | $ | 141,104 | |||||||||
| SBA loans originated/transferred from/to held-for-investment during the quarter/year | 16,260 | 18,273 | 16,890 | 45,184 | 49,922 | ||||||||||||||
| SBA loans sold during the quarter/year | (9,245 | ) | (42,437 | ) | - | - | - | ||||||||||||
| SBA loans principal paydown/payoff, net of advance | (2,743 | ) | (4,506 | ) | (3,568 | ) | (1,191 | ) | (4,588 | ) | |||||||||
| SBA loans held-for-sale at end of the quarter/year | $ | 219,355 | $ | 215,083 | $ | 243,753 | $ | 230,431 | $ | 186,438 | |||||||||
| Gain on sale of SBA loans | $ | 419 | $ | 1,952 | $ | - | $ | - | $ | - | |||||||||
| Premium on sale (weighted average) | 8.3 | % | 6.8 | % | - | - | - | ||||||||||||
| SBA loan production | $ | 24,270 | $ | 24,013 | $ | 21,719 | $ | 60,746 | $ | 69,234 | |||||||||
| FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8 | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
| SBA servicing assets @ beginning of the quarter/year | $ | 8,426 | $ | 8,528 | $ | 9,232 | $ | 10,158 | $ | 10,996 | ||||||||||
| Newly added SBA servicing assets from SBA loans sold | 182 | 806 | - | - | - | |||||||||||||||
| Regular quarterly/annual servicing assets amortization | (371 | ) | (379 | ) | (403 | ) | (434 | ) | (471 | ) | ||||||||||
| SBA servicing assets amortized from SBA loans paid off/charged off | (364 | ) | (529 | ) | (301 | ) | (492 | ) | (367 | ) | ||||||||||
| Subtotal before impairment | 7,873 | 8,426 | 8,528 | 9,232 | 10,158 | |||||||||||||||
| Reversal of valuation allowance on servicing assets | - | - | - | - | - | |||||||||||||||
| SBA servicing assets @ the end of the quarter/year | $ | 7,873 | $ | 8,426 | $ | 8,528 | $ | 9,232 | $ | 10,158 | ||||||||||
| FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9 | |||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||||
| Balance | % | Balance | % | Balance | % | Balance | % | Balance | % | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 406,033 | 26.2 | % | $ | 426,333 | 28.0 | % | $ | 428,559 | 27.9 | % | $ | 451,651 | 29.4 | % | $ | 562,051 | 36.7 | % | |||||||||
| Interest-bearing demand | 6,395 | 0.4 | % | 9,056 | 0.6 | % | 10,883 | 0.7 | % | 8,878 | 0.6 | % | 10,268 | 0.7 | % | ||||||||||||||
| NOW & MMDA | 227,283 | 14.7 | % | 210,429 | 13.8 | % | 211,793 | 13.8 | % | 274,521 | 17.9 | % | 313,719 | 20.5 | % | ||||||||||||||
| Savings | 78,969 | 5.1 | % | 62,324 | 4.1 | % | 62,188 | 4.0 | % | 52,845 | 3.4 | % | 66,673 | 4.3 | % | ||||||||||||||
| TCDs of $250K and under | 312,704 | 20.2 | % | 298,520 | 19.6 | % | 294,074 | 19.1 | % | 278,952 | 18.1 | % | 246,886 | 16.1 | % | ||||||||||||||
| TCDs of $250K over | 373,345 | 24.1 | % | 368,262 | 24.2 | % | 367,167 | 23.9 | % | 320,386 | 20.8 | % | 242,700 | 15.8 | % | ||||||||||||||
| Wholesale TCDs | 144,561 | 9.3 | % | 147,487 | 9.7 | % | 162,649 | 10.6 | % | 151,017 | 9.8 | % | 91,017 | 5.9 | % | ||||||||||||||
| Total Deposits | $ | 1,549,290 | 100.0 | % | $ | 1,522,411 | 100.0 | % | $ | 1,537,313 | 100.0 | % | $ | 1,538,250 | 100.0 | % | $ | 1,533,314 | 100.0 | % | |||||||||
| Recap: | |||||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 406,033 | 26.2 | % | $ | 426,333 | 28.0 | % | $ | 428,559 | 27.9 | % | $ | 451,651 | 29.4 | % | $ | 562,051 | 36.7 | % | |||||||||
| Interest-bearing demand | 6,395 | 0.4 | % | 9,056 | 0.6 | % | 10,883 | 0.7 | % | 8,878 | 0.6 | % | 10,268 | 0.7 | % | ||||||||||||||
| NOW & MMDA | 227,283 | 14.7 | % | 210,429 | 13.8 | % | 211,793 | 13.8 | % | 274,521 | 17.8 | % | 313,719 | 20.5 | % | ||||||||||||||
| Savings | 78,969 | 5.1 | % | 62,324 | 4.1 | % | 62,188 | 4.0 | % | 52,845 | 3.5 | % | 66,673 | 4.3 | % | ||||||||||||||
| TCDs of $250K and under | 312,704 | 20.2 | % | 298,520 | 19.6 | % | 294,074 | 19.1 | % | 278,952 | 18.1 | % | 246,886 | 16.1 | % | ||||||||||||||
| Core Deposits | 1,031,384 | 66.6 | % | 1,006,662 | 66.1 | % | 1,007,497 | 65.5 | % | 1,066,847 | 69.4 | % | 1,199,597 | 78.3 | % | ||||||||||||||
| TCDs of $250K over | 373,345 | 24.1 | % | 368,262 | 24.2 | % | 367,167 | 23.9 | % | 320,386 | 20.8 | % | 242,700 | 15.8 | % | ||||||||||||||
| Wholesale TCDs | 144,561 | 9.3 | % | 147,487 | 9.7 | % | 162,649 | 10.6 | % | 151,017 | 9.8 | % | 91,017 | 5.9 | % | ||||||||||||||
| Noncore Deposits | 517,906 | 33.4 | % | 515,749 | 33.9 | % | 529,816 | 34.5 | % | 471,403 | 30.6 | % | 333,717 | 21.7 | % | ||||||||||||||
| Total Deposits | $ | 1,549,290 | 100.0 | % | $ | 1,522,411 | 100.0 | % | $ | 1,537,313 | 100.0 | % | $ | 1,538,250 | 100.0 | % | $ | 1,533,314 | 100.0 | % | |||||||||
| FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10 | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| 3rd Qtr. | 2nd Qtr. | 1st Qtr. | 4th Qtr. | 3rd Qtr. | ||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||
| Allowance for Credit Losses | ||||||||||||||||||||
| Balance at beginning of period | $ | 15,626 | $ | 15,627 | $ | 15,525 | $ | 15,602 | $ | 14,739 | ||||||||||
| CECL transition provision | - | - | 250 | - | - | |||||||||||||||
| Provision for credit losses | - | - | - | - | 910 | |||||||||||||||
| Charge-offs | (350 | ) | (11 | ) | (159 | ) | (90 | ) | (89 | ) | ||||||||||
| Recoveries | 8 | 10 | 11 | 13 | 42 | |||||||||||||||
| Balance at the end of period | $ | 15,284 | $ | 15,626 | $ | 15,627 | $ | 15,525 | $ | 15,602 | ||||||||||
| Nonperforming Assets:1 | ||||||||||||||||||||
| Over 90 days still accruing | $ | 2 | $ | 39 | $ | - | $ | 6,006 | $ | - | ||||||||||
| Nonaccrual loans | 616 | 645 | 636 | 801 | 690 | |||||||||||||||
| Total nonperforming loans | 618 | 684 | 636 | 6,807 | 690 | |||||||||||||||
| Other real estate owned | $ | 55 | - | - | - | - | ||||||||||||||
| Total nonperforming assets | $ | 673 | $ | 684 | $ | 636 | $ | 6,807 | $ | 690 | ||||||||||
| Classified Assets:1 | ||||||||||||||||||||
| Substandard | $ | 10,105 | $ | 10,491 | $ | 7,673 | $ | 8,165 | $ | 9,146 | ||||||||||
| Doubtful | - | - | - | - | - | |||||||||||||||
| Loss | ||||||||||||||||||||
| Total classified loans | $ | 10,105 | $ | 10,491 | $ | 7,673 | $ | 8,165 | $ | 9,146 | ||||||||||
| Other real estate owned | $ | 55 | - | - | - | - | ||||||||||||||
| Total classified assets | $ | 10,160 | $ | 10,491 | $ | 7,673 | $ | 8,165 | $ | 9,146 | ||||||||||
| Performing TDR loans:1 | $ | 6,948 | $ | 7,220 | $ | 4,332 | $ | 4,471 | $ | 4,797 | ||||||||||
| Delinquent Loans:1 | ||||||||||||||||||||
| Loans 30-89 days past due | $ | 10,620 | $ | 4,420 | $ | 3,551 | $ | 381 | $ | 3,936 | ||||||||||
| 90 days or more past due and still accruing | 2 | 39 | - | 6,006 | - | |||||||||||||||
| Nonaccrual | 616 | 645 | 636 | 801 | 690 | |||||||||||||||
| Total delinquent loans | $ | 11,238 | $ | 5,104 | $ | 4,187 | $ | 7,188 | $ | 4,626 | ||||||||||
| Asset Quality Ratios: | ||||||||||||||||||||
| Net (recoveries) charge-offs to average loans2 | 0.10 | % | 0.00 | % | 0.04 | % | 0.02 | % | 0.01 | % | ||||||||||
| Nonaccrual loans to loans held-for-investment | 0.05 | % | 0.05 | % | 0.05 | % | 0.06 | % | 0.05 | % | ||||||||||
| Nonperforming loans to loans held-for-investment | 0.05 | % | 0.06 | % | 0.05 | % | 0.53 | % | 0.05 | % | ||||||||||
| Nonperforming assets to total assets | 0.04 | % | 0.04 | % | 0.03 | % | 0.38 | % | 0.04 | % | ||||||||||
| Classified loans to loans held-for-investment | 0.84 | % | 0.87 | % | 0.63 | % | 0.64 | % | 0.73 | % | ||||||||||
| Classified loans to Tier 1 and ACL | 4.18 | % | 4.44 | % | 3.35 | % | 3.67 | % | 4.24 | % | ||||||||||
| Classified assets to total assets | 0.55 | % | 0.58 | % | 0.42 | % | 0.45 | % | 0.51 | % | ||||||||||
| Classified assets to Tier 1 and ACL | 4.20 | % | 4.44 | % | 3.35 | % | 3.67 | % | 4.24 | % | ||||||||||
| ACL to loans held-for-investment | 1.27 | % | 1.30 | % | 1.28 | % | 1.21 | % | 1.24 | % | ||||||||||
| ACL to nonaccrual loans | 2481.17 | % | 2422.64 | % | 2457.08 | % | 1938.20 | % | 2261.16 | % | ||||||||||
| ACL to nonperforming loans | 2473.14 | % | 2284.50 | % | 2457.08 | % | 228.07 | % | 2261.16 | % | ||||||||||
| ACL to nonperforming assets | 2271.03 | % | 2284.50 | % | 2457.08 | % | 228.07 | % | 2261.16 | % | ||||||||||
| Texas ratio3 | 0.28 | % | 0.29 | % | 0.28 | % | 3.06 | % | 0.32 | % | ||||||||||
| 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 | Adequately | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||
| Regulatory | BASEL III | |||||||||||||||||||||||
| Requirement | Fully Phased In | 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||||
| Leverage ratio | ||||||||||||||||||||||||
| Company | N/A | N/A | 12.53 | % | 12.23 | % | 11.86 | % | 11.71 | % | 11.25 | % | ||||||||||||
| Bank | 5.00% | 4.00% | 12.50 | % | 12.20 | % | 11.82 | % | 11.67 | % | 11.15 | % | ||||||||||||
| Common equity tier 1 risk-based capital ratio | ||||||||||||||||||||||||
| Company | N/A | N/A | 17.61 | % | 17.08 | % | 16.15 | % | 14.92 | % | 14.82 | % | ||||||||||||
| Bank | 6.50% | 7.00% | 17.58 | % | 17.03 | % | 16.10 | % | 14.87 | % | 14.70 | % | ||||||||||||
| Tier 1 risk-based capital ratio | ||||||||||||||||||||||||
| Company | N/A | N/A | 17.61 | % | 17.08 | % | 16.15 | % | 14.92 | % | 14.82 | % | ||||||||||||
| Bank | 8.00% | 8.50% | 17.57 | % | 17.03 | % | 16.10 | % | 14.87 | % | 14.70 | % | ||||||||||||
| Total risk-based capital ratio | ||||||||||||||||||||||||
| Company | N/A | N/A | 18.83 | % | 18.32 | % | 17.37 | % | 16.08 | % | 16.02 | % | ||||||||||||
| Bank | 10.00% | 10.50% | 18.79 | % | 18.27 | % | 17.31 | % | 16.03 | % | 15.89 | % | ||||||||||||
| Tangible common equity/total assets | 12.19 | % | 12.15 | % | 11.75 | % | 11.44 | % | 11.14 | % | ||||||||||||||
| Tangible common equity per share | $ | 21.39 | $ | 20.85 | $ | 20.18 | $ | 19.59 | $ | 18.95 | ||||||||||||||
| FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||
| Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | |||||||||||||||||||||||||||||||||||
| Number of Days in the Period | |||||||||||||||||||||||||||||||||||||||||||||||||
| INTEREST-EARNING ASSETS | |||||||||||||||||||||||||||||||||||||||||||||||||
| Loans Receivable1 | $ | 1,417,148 | $ | 24,734 | 6.92 | % | $ | 1,444,608 | $ | 24,661 | 6.85 | % | $ | 1,502,078 | $ | 24,379 | 6.58 | % | $ | 1,473,100 | $ | 22,407 | 6.03 | % | $ | 1,413,632 | $ | 19,299 | 5.42 | % | |||||||||||||||||||
| Investment securities2 | 64,587 | 577 | 3.54 | % | 67,958 | 595 | 3.51 | % | 70,146 | 577 | 3.34 | % | 73,371 | 552 | 2.98 | % | 77,304 | 543 | 2.79 | % | |||||||||||||||||||||||||||||
| Interest-earning deposits at the FRB and other banks | 293,081 | 3,994 | 5.41 | % | 258,236 | 3,296 | 5.12 | % | 190,692 | 2,178 | 4.63 | % | 180,358 | 1,666 | 3.66 | % | 246,955 | 1,398 | 2.25 | % | |||||||||||||||||||||||||||||
| Other earning assets | 11,011 | 196 | 7.06 | % | 10,825 | 163 | 6.04 | % | 10,121 | 164 | 6.57 | % | 10,121 | 169 | 6.62 | % | 10,121 | 145 | 5.68 | % | |||||||||||||||||||||||||||||
| Total interest-earning assets2 | 1,785,827 | 29,501 | 6.55 | % | 1,781,627 | 28,715 | 6.46 | % | 1,773,037 | 27,298 | 6.24 | % | 1,736,950 | 24,794 | 5.66 | % | 1,748,012 | 21,385 | 4.85 | % | |||||||||||||||||||||||||||||
| NONINTEREST-EARNING ASSETS | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 13,045 | 12,792 | 14,262 | 15,632 | 17,429 | ||||||||||||||||||||||||||||||||||||||||||||
| Other noninterest-earning assets | 33,331 | 34,060 | 36,643 | 38,529 | 40,251 | ||||||||||||||||||||||||||||||||||||||||||||
| Total noninterest-earning assets | 46,376 | 46,852 | 50,905 | 54,161 | 57,680 | ||||||||||||||||||||||||||||||||||||||||||||
| Less: Allowance for credit losses | (15,622 | ) | (15,627 | ) | (15,552 | ) | (15,581 | ) | (14,756 | ) | |||||||||||||||||||||||||||||||||||||||
| TOTAL ASSETS | $ | 1,816,581 | $ | 1,812,852 | $ | 1,808,390 | $ | 1,775,530 | $ | 1,790,936 | |||||||||||||||||||||||||||||||||||||||
| INTEREST-BEARING DEPOSITS | |||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand | $ | 12,347 | $ | 6 | 0.19 | % | $ | 14,522 | $ | 7 | 0.19 | % | $ | 18,021 | $ | 9 | 0.20 | % | $ | 20,352 | $ | 10 | 0.19 | % | $ | 23,461 | $ | 8 | 0.14 | % | |||||||||||||||||||
| Money market | 211,152 | 1,907 | 3.58 | % | 192,872 | 1,414 | 2.94 | % | 231,865 | 1,469 | 2.57 | % | 288,611 | 1,433 | 1.97 | % | 316,964 | 894 | 1.12 | % | |||||||||||||||||||||||||||||
| Savings | 70,579 | 494 | 2.78 | % | 63,786 | 324 | 2.04 | % | 55,576 | 164 | 1.20 | % | 61,152 | 96 | 0.62 | % | 71,519 | 85 | 0.47 | % | |||||||||||||||||||||||||||||
| Time deposits | 820,335 | 8,916 | 4.31 | % | 839,198 | 8,068 | 3.86 | % | 797,072 | 6,410 | 3.26 | % | 625,823 | 3,020 | 1.91 | % | 556,919 | 1,401 | 1.00 | % | |||||||||||||||||||||||||||||
| Total interest-bearing deposits | 1,114,413 | 11,323 | 4.03 | % | 1,110,378 | 9,813 | 3.54 | % | 1,102,534 | 8,052 | 2.96 | % | 995,938 | 4,559 | 1.82 | % | 968,863 | 2,388 | 0.98 | % | |||||||||||||||||||||||||||||
| Borrowings | 50,001 | 119 | 0.94 | % | 50,000 | 117 | 0.94 | % | 50,000 | 116 | 0.94 | % | 50,001 | 118 | 0.94 | % | 50,001 | 119 | 0.94 | % | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 1,164,414 | 11,442 | 3.90 | % | 1,160,378 | 9,930 | 3.43 | % | 1,152,534 | 8,168 | 2.87 | % | 1,045,939 | 4,677 | 1.77 | % | 1,018,864 | 2,507 | 0.98 | % | |||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 397,791 | 411,432 | 425,190 | 507,719 | 555,291 | ||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 27,519 | 20,934 | 16,947 | 14,732 | 14,596 | ||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' equity | 226,857 | 220,108 | 213,719 | 207,140 | 202,185 | ||||||||||||||||||||||||||||||||||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 1,816,581 | $ | 1,812,852 | $ | 1,808,390 | $ | 1,775,530 | $ | 1,790,936 | |||||||||||||||||||||||||||||||||||||||
| Net interest income2 | $ | 18,059 | $ | 18,785 | $ | 19,130 | $ | 20,117 | $ | 18,878 | |||||||||||||||||||||||||||||||||||||||
| Net interest spread | 2.65 | % | 3.03 | % | 3.37 | % | 3.89 | % | 3.87 | % | |||||||||||||||||||||||||||||||||||||||
| Effect of noninterest-bearing sources | 1.36 | % | 1.20 | % | 1.01 | % | 0.70 | % | 0.41 | % | |||||||||||||||||||||||||||||||||||||||
| Net interest margin2 | 4.01 | % | 4.23 | % | 4.38 | % | 4.59 | % | 4.28 | % | |||||||||||||||||||||||||||||||||||||||
| Cost of deposits | $ | 1,512,204 | $ | 11,323 | 2.97 | % | $ | 1,521,810 | $ | 9,813 | 2.59 | % | $ | 1,527,724 | $ | 8,052 | 2.14 | % | $ | 1,503,657 | $ | 4,559 | 1.20 | % | $ | 1,524,154 | $ | 2,388 | 0.62 | % | |||||||||||||||||||
| Cost of funds | $ | 1,562,205 | $ | 11,442 | 2.91 | % | $ | 1,571,810 | $ | 9,930 | 2.53 | % | $ | 1,577,724 | $ | 8,168 | 2.10 | % | $ | 1,553,658 | $ | 4,677 | 1.19 | % | $ | 1,574,155 | $ | 2,507 | 0.63 | % | |||||||||||||||||||
| 1 Loan held-for-investment, plus loans held-for-sale | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2 Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate | |||||||||||||||||||||||||||||||||||||||||||||||||
| FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13 | |||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| September 30, 2023 | June 30,2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||||||||||
| Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | Amount | Yield | ||||||||||||||||||||||||||
| Contractual yield | $ | 23,932 | 6.70 | % | $ | 23,767 | 6.60 | % | $ | 23,643 | 6.38 | % | $ | 21,534 | 5.80 | % | $ | 18,134 | 5.09 | % | |||||||||||||||
| SBA discount accretion | 921 | 0.25 | % | 1,124 | 0.31 | % | 937 | 0.25 | % | 1,172 | 0.32 | % | 1,078 | 0.30 | % | ||||||||||||||||||||
| Prepayment penalties and late fees | 18 | 0.01 | % | 60 | 0.02 | % | 30 | 0.01 | % | 17 | 0.00 | % | 94 | 0.03 | % | ||||||||||||||||||||
| Amortization of net deferred costs | (137 | ) | -0.04 | % | (290 | ) | -0.08 | % | (231 | ) | -0.06 | % | (316 | ) | -0.09 | % | (7 | ) | 0.00 | % | |||||||||||||||
| As reported yield on loans | $ | 24,734 | 6.92 | % | $ | 24,661 | 6.85 | % | $ | 24,379 | 6.58 | % | $ | 22,407 | 6.03 | % | $ | 19,299 | 5.42 | % | |||||||||||||||
| MARGIN ANALYSIS (Unaudited) - Table 14 | |||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| September 30,2023 | September 30,2022 | ||||||||||||||||||
| Avg Balance | Interest | Yield | Avg Balance | Interest | Yield | ||||||||||||||
| Number of Days in the Period | |||||||||||||||||||
| INTEREST-EARNING ASSETS | |||||||||||||||||||
| Loans Receivable 1 | $ | 1,454,301 | $ | 73,774 | 6.78 | % | $ | 1,391,029 | $ | 52,294 | 5.03 | % | |||||||
| Investment securities 2 | 67,543 | 1,749 | 3.46 | % | 79,590 | 1,502 | 2.52 | % | |||||||||||
| Interest-earning deposits at the FRB and other banks | 247,712 | 9,468 | 5.11 | % | 274,180 | 2,138 | 1.04 | % | |||||||||||
| Other earning assets | 10,655 | 523 | 6.56 | % | 9,615 | 393 | 5.46 | % | |||||||||||
| Total interest-earning assets 2 | 1,780,211 | 85,514 | 6.42 | % | 1,754,414 | 56,327 | 4.29 | % | |||||||||||
| NONINTEREST-EARNING ASSETS | |||||||||||||||||||
| Cash and due from banks | 13,362 | 15,226 | |||||||||||||||||
| Other noninterest-earning assets | 34,634 | 38,542 | |||||||||||||||||
| Total noninterest-earning assets | 47,996 | 53,768 | |||||||||||||||||
| Less: Allowance for credit losses | (15,601 | ) | (14,029 | ) | |||||||||||||||
| TOTAL ASSETS | $ | 1,812,606 | $ | 1,794,153 | |||||||||||||||
| INTEREST-BEARING DEPOSITS | |||||||||||||||||||
| Interest-bearing demand | $ | 14,943 | $ | 22 | 0.20 | % | $ | 25,880 | $ | 15 | 0.08 | % | |||||||
| Money market | 211,887 | 4,789 | 3.02 | % | 315,661 | 1,692 | 0.72 | % | |||||||||||
| Savings | 63,369 | 983 | 2.07 | % | 74,577 | 206 | 0.37 | % | |||||||||||
| Time deposits | 818,953 | 23,394 | 3.82 | % | 536,715 | 2,820 | 0.70 | % | |||||||||||
| Total interest-bearing deposits | 1,109,152 | 29,188 | 3.52 | % | 952,833 | 4,733 | 0.66 | % | |||||||||||
| Borrowings | 50,000 | 352 | 0.94 | % | 50,000 | 352 | 0.94 | % | |||||||||||
| Total interest-bearing liabilities | 1,159,152 | 29,540 | 3.41 | % | 1,002,833 | 5,085 | 0.68 | % | |||||||||||
| Noninterest-bearing deposits | 411,370 | 580,340 | |||||||||||||||||
| Other liabilities | 21,808 | 15,785 | |||||||||||||||||
| Stockholders' equity | 220,276 | 195,195 | |||||||||||||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 1,812,606 | $ | 1,794,153 | |||||||||||||||
| Net interest income2 | $ | 55,974 | $ | 51,242 | |||||||||||||||
| Net interest spread | 3.01 | % | 3.61 | % | |||||||||||||||
| Effect of noninterest-bearing sources | 1.19 | % | 0.30 | % | |||||||||||||||
| Net interest margin2 | 4.20 | % | 3.91 | % | |||||||||||||||
| Cost of deposits | $ | 1,520,522 | $ | 29,188 | 2.57 | % | $ | 1,533,173 | $ | 4,733 | 0.41 | % | |||||||
| Cost of funds | $ | 1,570,522 | $ | 29,540 | 2.51 | % | $ | 1,583,173 | $ | 5,085 | 0.43 | % | |||||||
| 1 Loan held-for-investment, plus loans held-for-sale | |||||||||||||||||||
| 2 Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate | |||||||||||||||||||
| COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 15 | |||||||||||||
| (Dollars in thousands) | |||||||||||||
| Nine Months Ended | |||||||||||||
| September 30, 2023 | September 30, 2022 | ||||||||||||
| Amount | Yield | Amount | Yield | ||||||||||
| Contractual yield | $ | 71,342 | 6.56 | % | $ | 48,226 | 4.64 | % | |||||
| SBA discount accretion | 2,982 | 0.27 | % | 3,534 | 0.34 | % | |||||||
| Prepayment penalties and late fees | 108 | 0.01 | % | 257 | 0.02 | % | |||||||
| Amortization of net deferred costs | (658 | ) | -0.06 | % | 277 | 0.03 | % | ||||||
| As reported yield on loans | $ | 73,774 | 6.78 | % | $ | 52,294 | 5.03 | % | |||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20231026213774/en/
Contacts
Richard Koh, EVP & CFO
(323) 988-3037
[email protected]