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 $5.5 million
for the second quarter 2024, or $0.51 per diluted share compared to
$5.7 million in the first quarter 2024, or $0.54 per diluted
share.
OVERALL RESULTS
Net income for the second quarter 2024 decreased from the first
quarter primarily due to lower net interest income and gain on sale
of loans, offset by a lower provision for credit losses and
noninterest expenses. The return on average assets for the second
quarter 2024 was 1.31% compared to 1.32% for the first quarter 2024
and 1.79% for the second quarter 2023. The return on average equity
for the second quarter 2024 was 9.06% compared to 9.57% for the
first quarter 2024 and 14.76% for the second quarter 2023. The
efficiency ratio for the second quarter 2024 was 55.69% compared to
54.68% for the first quarter 2024 and 47.29% for the second quarter
2023.
James Hong, President and CEO, commented, "Amidst the dynamic
economic environment, we are charting a course through a landscape
of changes exploring new opportunities. While the rise in interest
rates presents its own set of challenges, it also opens up avenues
for growth. Our loan portfolios, funding costs, net interest
margins, and overall revenue are being reshaped in this process.
Embracing these changes, we have turned to technology as our ally.
We have seen a robust increase in the adoption of online account
openings, internet banking, and mobile banking among our existing
and new customers. This is a testament to our resilience and
adaptability in the face of adversity."
INCOME STATEMENT
Net Interest Income
Net interest income for the second quarter 2024 was $15.4
million, a decrease of $444 thousand, or 2.8%, quarter over
quarter, and a decrease of $3.4 million, or 18.0% compared to the
second quarter 2023.
Net interest income for the six months ended June 30, 2024 was
$31.2 million, a decrease of $6.6 million or 17.6% compared to the
same period last year. The decrease in net interest income was due
to the higher cost of interest-bearing deposits as maturing time
deposits were rolled over into higher interest rate CDs.
Net Interest Margin
The net interest margin for both the second and first quarters
2024 was 3.77% and 4.23% for the second quarter 2023. The decrease
in the net interest margin compared to the same quarter 2023 was
due to higher cost of funds. The cost of funds for the second
quarter 2024 increased four basis points to 3.52% compared to 3.48%
in the previous quarter and 2.53% in the second quarter 2023.
Provision for Credit
Losses
Provision for credit losses was $200 thousand for the second
quarter 2024 compared to $400 thousand in the first quarter 2024.
No provision for credit losses was recorded in the second quarter
2023.
Noninterest Income
Noninterest income for the second quarter 2024 was $2.3 million,
a decrease of $226 thousand compared to $2.6 million for the first
quarter 2024, and a decrease of $464 thousand compared to $2.8
million for the second quarter 2023. The decrease in noninterest
income was primarily the result of lower gain on sale of loans
offset by higher SBA servicing fee income.
Noninterest income for the six months ended June 30, 2024 was
$4.9 million, an increase of $1.0 million compared to the same
period last year. The increase was primarily the result of higher
gain on sale of loans and SBA servicing fee income.
Noninterest Expenses
Noninterest expenses for the second quarter 2024 were $9.9
million compared to $10.0 million for the first quarter 2024 and
$10.2 million for the second quarter 2023. Noninterest expenses
decreased $188 thousand and $327 thousand compared to the first
quarter 2024 and the second quarter 2023, respectively.
Please refer to financial tables in this press release for
additional information and trends.
Income Taxes
The Company’s effective tax rate for the second quarter 2024 was
28.3% compared to 28.4% for first quarter 2024 and 28.6% for second
quarter 2023.
BALANCE SHEET
Investment Securities
Investment securities were $73.1 million at June 30, 2024, an
increase of $13.9 million or 23.5% from March 31, 2024, and an
increase of $6.7 million or 10.0% from June 30, 2023. 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 June 30,
2024, was $1.44 billion, an increase of $45.0 million or 3.2% from
March 31, 2024, and an increase of $21.3 million or 1.5% from June
30, 2023.
Allowance for Credit Losses and Asset
Quality
The Allowance for Credit Losses (“ACL”) at June 30, 2024, was
$16.0 million which was 1.31% of loans held-for-investment compared
to $16.0 million at March 31, 2024, or 1.34% of loans
held-for-investment. At June 30, 2023, ACL was $15.6 million or
1.30% of total loans held-for-investment. Total Nonperforming
assets at June 30, 2024, were $5.8 million compared to $4.4 million
at March 31, 2024 and $0.7 million at June 30, 2023. The ACL
coverage to nonperforming assets was over 276% at June 30,
2024.
SBA Loans Held-for-Sale
Total SBA loans held-for-sale at June 30, 2024, was $209.1
million compared to $ 198.2 million March 31, 2024, and $215.1
million at June 30, 2023. We continue to assess the SBA loan market
premium and plan to sell loans when it is advantageous to do
so.
The Bank sold approximately $19.5 million in SBA loans with an
average premium of 8.3% during the second quarter of 2024 compared
to the sale of $28.2 million with an average premium of 8.4% in the
first quarter of 2024. The Bank sold approximately $42.4 million of
SBA loans with an average premium of 6.8% during the second quarter
2023.
Deposits
Total deposits were $1.34 billion at June 30, 2024, down $20.6
million or 1.5% from March 31, 2024, and down $182.0 million or
12.0% from June 30, 2023. DDAs were 21.6% of total deposits for
both June 30, 2024 and March 31, 2024, and 28.6% at June 30, 2023.
NOW and MMDA deposits comprised 18.0% of total deposits at June 30,
2024, compared to 16.9% at March 31, 2024, and 13.8% at June 30,
2023. The quarter-over-quarter and year-over-year decline in DDA
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 in Federal Home Loan Bank
advances since April 16, 2020. The blended cost of FHLB advances
was 0.94% as of June 30, 2024.
Capital
Stockholders’ equity was $245.3 million at June 30, 2024, which
increased $4.7 million or 1.9%, quarter over quarter. Tangible book
value per share at June 30, 2024, was $22.94, an increase of $0.45,
or 2.0%, quarter over quarter.
Each of the Company’s and the Bank’s regulatory capital ratios
decreased, except for the leverage ratio at June 30, 2024, compared
to March 31, 2024, and increased compared to June 30, 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 Risk-Based Capital Ratios at June 30,
2024, were 18.36% and 18.28% for the Company and the Bank,
respectively. Total Risk-Based Capital Ratios were 19.59% and
19.50% 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 June 30, 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 2Q 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
Six Months Ended
June 30,
March 31,
$
%
June 30,
$
%
June 30,
June 30,
$
%
2024
2024
Change
Change
2023
Change
Change
2024
2023
Change
Change
Interest income
$
27,755
$
28,463
$
(708
)
(2.5
%)
$
28,664
$
(909
)
(3.2
%)
$
56,218
$
55,912
$
306
0.5
%
Interest expense
12,391
12,655
(264
)
(2.1
%)
9,930
2,461
24.8
%
25,046
18,098
6,948
38.4
%
Net interest income
15,364
15,808
(444
)
(2.8
%)
18,734
(3,370
)
(18.0
%)
31,172
37,814
(6,642
)
(17.6
%)
Provision for credit losses
200
400
(200
)
(50.0
%)
-
200
100.0
%
600
-
600
100.0
%
Net interest income after provision for credit losses
15,164
15,408
(244
)
(1.6
%)
18,734
(3,570
)
(19.1
%)
30,572
37,814
(7,242
)
(19.2
%)
Gain on sale of loans
1,064
1,489
(425
)
-28.5
%
1,952
(888
)
319.8
%
2,553
1,952
601
30.8
%
Gain (loss) on sale of OREO
-
(1
)
1
(100.0
%)
-
-
-
(1
)
-
(1
)
(100.0
%)
SBA servicing fee income, net
768
633
135
21.3
%
440
328
74.5
%
1,401
1,094
307
28.1
%
Recovery on impaired servicing liability
-
10
(10
)
(100.0
%)
-
-
-
10
-
10
100.0
%
Service charges and other income
503
430
73
17.0
%
407
96
23.6
%
933
805
128
15.9
%
Noninterest income
2,335
2,561
(226
)
(8.8
%)
2,799
(464
)
(16.6
%)
4,896
3,851
1,045
27.1
%
Salaries and employee benefits
5,927
6,024
(97
)
(1.6
%)
5,581
346
6.2
%
11,951
11,660
291
2.5
%
Occupancy and equipment
1,114
1,122
(8
)
(0.7
%)
1,122
(8
)
(0.7
%)
2,236
2,246
(10
)
(0.4
%)
Marketing expense
403
402
1
0.2
%
409
(6
)
(1.5
%)
805
783
22
2.8
%
Professional expense
440
412
28
6.8
%
436
4
0.9
%
852
890
(38
)
(4.3
%)
Other expenses
1,972
2,084
(112
)
(5.4
%)
2,635
(663
)
(25.2
%)
4,056
4,879
(823
)
(16.9
%)
Noninterest expense
9,856
10,044
(188
)
(1.9
%)
10,183
(327
)
(3.2
%)
19,900
20,458
(558
)
(2.7
%)
Income before income tax provision
7,643
7,925
(282
)
(3.6
%)
11,350
(3,707
)
(32.7
%)
15,568
21,207
(5,639
)
(26.6
%)
Income tax provision
2,163
2,253
(90
)
(4.0
%)
3,248
(1,085
)
(33.4
%)
4,416
6,015
(1,599
)
(26.6
%)
Net income
$
5,480
$
5,672
$
(192
)
(3.4
%)
$
8,102
$
(2,622
)
(32.4
%)
$
11,152
$
15,192
$
(4,040
)
(26.6
%)
Effective tax rate
28.3
%
28.4
%
(0.1
%)
(0.5
%)
28.6
%
(0.3
%)
(1.1
%)
28.4
%
28.4
%
0.00
%
0.0
%
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
10,582,197
5,939
0.1
%
Weighted average shares for diluted EPS
10,588,136
10,588,688
(552
)
(0.0
%)
10,591,350
(3,214
)
(0.0
%)
10,558,688
10,595,803
(37,115
)
(0.4
%)
Basic EPS
$
0.51
$
0.54
$
(0.03
)
(5.6
%)
$
0.77
$
(0.26
)
(33.8
%)
$
1.05
$
1.44
$
(0.39
)
-27.1
%
Diluted EPS
$
0.51
$
0.54
$
(0.03
)
(5.6
%)
$
0.76
$
(0.25
)
(32.9
%)
$
1.05
$
1.43
$
(0.38
)
(26.6
%)
Return on average assets
1.31
%
1.32
%
(0.01
%)
(0.8
%)
1.79
%
(0.48
%)
(26.8
%)
1.32
%
1.69
%
(0.37
%)
(21.9
%)
Return on average equity
9.06
%
9.57
%
(0.51
%)
(5.3
%)
14.76
%
(5.70
%)
(38.6
%)
9.31
%
14.12
%
(4.81
%)
(34.1
%)
Efficiency ratio¹
55.69
%
54.68
%
1.01
%
1.9
%
47.29
%
8.40
%
17.8
%
55.17
%
49.10
%
6.07
%
12.4
%
Yield on interest-earning assets²
6.79
%
6.77
%
0.02
%
0.3
%
6.46
%
0.33
%
5.1
%
6.78
%
6.36
%
0.42
%
6.6
%
Cost of funds
3.52
%
3.48
%
0.04
%
1.2
%
2.53
%
0.99
%
39.1
%
3.50
%
2.32
%
1.18
%
50.9
%
Net interest margin²
3.77
%
3.77
%
0.00
%
0.0
%
4.23
%
(0.46
%)
(10.9
%)
3.77
%
4.30
%
(0.53
%)
(12.3
%)
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)
June 30,
March 31,
$
%
June 30,
$
%
2024
2024
Change
Change
2023
Change
Change
ASSETS
Cash and due from banks
$
11,667
$
11,612
$
55
0.5
%
$
12,704
$
(1,037
)
(8.2
%)
Interest-earning deposits at the FRB and other banks
101,415
181,366
(79,951
)
(44.1
%)
293,394
(191,979
)
(65.4
%)
Investment securities¹
73,051
59,143
13,908
23.5
%
66,400
6,651
10.0
%
Loans held-for-sale
209,144
198,167
10,977
5.5
%
215,083
(5,939
)
(2.8
%)
Loans held-for-investment
1,228,496
1,194,439
34,057
2.9
%
1,201,237
27,259
2.3
%
Less: Allowance for credit losses ("ACL")
(16,042
)
(16,048
)
6
0.0
%
(15,626
)
(416
)
(2.7
%)
Loans held-for-investment,
net
1,212,454
1,178,391
34,063
2.9
%
1,185,611
26,843
2.3
%
Other real estate owned
("OREO")
-
-
-
-
-
-
-
Restricted stock investments
11,011
11,011
-
-
11,011
-
-
Servicing assets
7,404
7,560
(156
)
(2.1
%)
8,426
(1,022
)
(12.1
%)
Goodwill
2,185
2,185
-
-
2,185
-
-
Intangible assets
235
245
(10
)
(4.1
%)
279
(44
)
(15.8
%)
Other assets
26,343
23,581
2,762
11.7
%
24,537
1,806
7.4
%
Total assets
$
1,654,909
$
1,673,261
$
(18,352
)
(1.1
%)
$
1,819,630
$
(164,721
)
(9.1
%)
LIABILITIES AND STOCKHOLDERS'
EQUITY Noninterest-bearing
$
281,243
$
286,766
$
(5,523
)
(1.9
%)
$
426,333
$
(145,090
)
(34.0
%)
Interest-bearing
1,059,146
1,074,198
(15,052
)
(1.4
%)
1,096,078
(36,932
)
(3.4
%)
Total deposits
1,340,389
1,360,964
(20,575
)
(1.5
%)
1,522,411
(182,022
)
(12.0
%)
FHLB advances and other borrowing
50,000
50,000
-
-
50,000
-
-
Other liabilities
19,260
21,727
(2,467
)
(11.4
%)
23,956
(4,696
)
(19.6
%)
Total liabilities
1,409,649
1,432,691
(23,042
)
(1.6
%)
1,596,367
(186,718
)
(11.7
%)
Stockholders' Equity
245,260
240,570
4,690
1.9
%
223,263
21,997
9.9
%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$
1,654,909
$
1,673,261
$
(18,352
)
(1.1
%)
$
1,819,630
$
(164,721
)
(9.1
%)
CAPITAL RATIOS
Leverage ratio Company
14.51
%
13.85
%
0.66
%
4.8
%
12.23
%
2.28
%
18.7
%
Bank
14.45
%
13.84
%
0.61
%
4.4
%
12.20
%
2.25
%
18.5
%
Common equity tier 1 risk-based capital ratio
Company
18.36
%
18.67
%
(0.31
%)
(1.7
%)
17.08
%
1.28
%
7.5
%
Bank
18.28
%
18.65
%
(0.38
%)
(2.0
%)
17.03
%
1.25
%
7.3
%
Tier 1 risk-based capital ratio Company
18.36
%
18.67
%
(0.31
%)
(1.7
%)
17.08
%
1.28
%
7.5
%
Bank
18.28
%
18.65
%
(0.38
%)
(2.0
%)
17.03
%
1.25
%
7.3
%
Total risk-based capital ratio Company
19.59
%
19.92
%
(0.34
%)
(1.7
%)
18.32
%
1.27
%
6.9
%
Bank
19.50
%
19.91
%
(0.40
%)
(2.0
%)
18.27
%
1.23
%
6.7
%
Tangible book value per share
$
22.94
$
22.49
$
0.45
2.0
%
$
20.85
$
2.09
10.0
%
Loans Held for Investments-to-Deposit ("LHFITD") ratio
91.65
%
87.76
%
3.89
%
4.4
%
78.90
%
12.75
%
16.2
%
Net Loan-to-Deposit ("LTD") ratio
106.06
%
101.15
%
4.91
%
4.9
%
92.00
%
14.06
%
15.3
%
Nonperforming assets
$
5,797
$
4,447
$
1,350
30.4
%
$
684
$
5,113
747.5
%
Nonperforming assets as a % of loans held-for-investment
0.47
%
0.37
%
0.10
%
27.0
%
0.06
%
0.41
%
683.3
%
ACL as a % of loans held-for-investment
1.31
%
1.34
%
(0.03
%)
(2.24
%)
1.30
%
0.01
%
0.8
%
¹ Includes AFS and HTM
FIVE-QUARTER STATEMENT OF
INCOME (Unaudited) - Table 3
(Dollars in thousands, except per
share amounts)
Three Months Ended
June 30,
March 31,
December 31,
September 30,
June 30,
2024
2024
2023
2023
2023
Interest income
$
27,755
$
28,463
$
29,624
$
29,450
$
28,664
Interest expense
12,391
12,655
12,462
11,442
9,930
Net interest income
15,364
15,808
17,162
18,008
18,734
Provision for credit
losses
200
400
-
-
-
Net interest income after provision for credit losses
15,164
15,408
17,162
18,008
18,734
Gain on sale of loans
1,064
1,489
838
419
1,952
Gain (loss) on sale of OREO
-
(1
)
-
-
-
SBA servicing fee income, net
768
643
690
639
440
Service charges and other income
503
430
436
402
407
Noninterest income
2,335
2,561
1,964
1,460
2,799
Salaries and employee
benefits
5,927
6,024
5,356
5,569
5,581
Occupancy and equipment
1,114
1,122
1,128
1,103
1,122
Marketing expense
403
402
250
475
409
Professional expense
440
412
360
443
436
Other expenses
1,972
2,084
2,363
2,579
2,635
Noninterest expense
9,856
10,044
9,457
10,169
10,183
Income before income
tax expense
7,643
7,925
9,669
9,299
11,350
Income tax expense
2,163
2,253
2,670
2,630
3,248
Net income
$
5,480
$
5,672
$
6,999
$
6,669
$
8,102
Effective tax rate
28.3
%
28.4
%
27.6
%
28.3
%
28.6
%
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
10,588,136
Weighted average shares for diluted EPS
10,588,136
10,588,688
10,588,937
10,594,155
10,591,351
Basic EPS
$
0.51
$
0.54
$
0.66
$
0.63
$
0.77
Diluted EPS
$
0.51
$
0.54
$
0.66
$
0.63
$
0.76
FIVE-QUARTER SALARIES BENEFIT
METRICS (Unaudited) - Table 4
(Dollars in thousands)
At or for the Three Months
Ended
June 30,
March 31,
December 31,
September 30,
June 30,
2024
2023
2023
2023
2023
Salaries and benefits
$
5,927
$
6,024
$
5,356
$
5,569
$
5,581
FTE at the end of period
172
168
169
172
165
Average FTE during the period
171
169
169
168
164
Salaries and benefits/average FTE¹
$
139
$
143
$
126
$
131
$
137
Salaries and benefits/average assets¹
1.42
%
1.41
%
1.18
%
1.22
%
1.23
% Noninterest expense/average assets¹
2.36
%
2.35
%
2.08
%
2.22
%
2.25
%
1
Annualized
FIVE-QUARTER BALANCE SHEET
(Unaudited) - Table 5
(Dollars in thousands)
June 30,
March 31,
December 31,
September 30,
June 30,
2024
2024
2023
2023
2023
ASSETS Cash and due from banks
$
11,667
$
11,612
$
14,282
$
11,188
$
12,704
Interest-earning deposits at the FRB and other banks
101,415
181,366
233,255
335,016
293,394
Investment securities
73,051
59,143
59,883
61,617
66,400
Loans held-for-sale
209,144
198,167
218,258
219,355
215,083
Loans held-for-investment
1,228,496
1,194,439
1,204,009
1,201,230
1,201,237
Less: Allowance for credit losses
(16,042
)
(16,048
)
(15,291
)
(15,284
)
(15,626
)
Loans held-for-investment,
net
1,212,454
1,178,391
1,188,718
1,185,946
1,185,611
Other real estate owned
-
-
55
55
-
Restricted stock investments
11,011
11,011
11,011
11,011
11,011
Servicing assets
7,404
7,560
7,673
7,873
8,426
Goodwill
2,185
2,185
2,185
2,185
2,185
Intangible assets
235
245
255
267
279
Other assets
26,343
23,581
24,838
24,799
24,537
Total assets
$
1,654,909
$
1,673,261
$
1,760,413
$
1,859,312
$
1,819,630
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing
$
281,243
$
286,766
$
305,923
$
406,033
$
426,333
Interest-bearing
1,059,146
1,074,198
1,147,662
1,143,257
1,096,078
Total deposits
1,340,389
1,360,964
1,453,585
1,549,290
1,522,411
FHLB advances
50,000
50,000
50,000
50,000
50,000
Other liabilities
19,260
21,727
21,114
31,141
23,956
Total liabilities
1,409,649
1,432,691
1,524,699
1,630,431
1,596,367
Stockholders' Equity
245,260
240,570
235,714
228,881
223,263
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$
1,654,909
$
1,673,261
$
1,760,413
$
1,859,312
$
1,819,630
FIVE-QUARTER LOANS RECEIVABLE COMPONENTS
(Unaudited) - Table 6 (Dollars in thousands)
June 30, 2024 March 31, 2024 December 31, 2023
September 30, 2023 June 30, 2023 Balance %
Balance % Balance % Balance % Balance % Construction
$
33,918
2.8
%
$
37,216
3.1
%
$
34,886
2.9
%
$
30,924
2.6
%
$
20,106
1.7
%
Commercial real estate
1,035,425
84.3
%
1,005,765
84.2
%
1,010,495
83.9
%
1,005,735
83.7
%
1,014,785
84.5
%
Commercial and industrial
108,742
8.9
%
101,784
8.5
%
108,123
9.0
%
113,374
9.4
%
114,106
9.4
%
Home mortgage
44,987
3.7
%
44,389
3.7
%
44,920
3.7
%
45,452
3.8
%
45,987
3.8
%
Consumer
782
0.1
%
668
0.1
%
630
0.1
%
616
0.1
%
1,074
0.1
%
Gross loans held-for-investment
1,223,854
99.6
%
1,189,822
99.6
%
1,199,054
99.6
%
1,196,101
99.6
%
1,196,058
99.6
%
Deferred loan fees/costs, net
4,642
0.4
%
4,617
0.4
%
4,955
0.4
%
5,129
0.4
%
5,179
0.4
%
Loans held-for-investment
$
1,228,496
100.0
%
$
1,194,439
100.0
%
$
1,204,009
100.0
%
$
1,201,230
100.0
%
$
1,201,237
100.0
%
Loans held-for-sale
$
209,144
$
198,167
$
218,258
$
219,355
$
215,083
Total loans receivable
$
1,437,640
$
1,392,606
$
1,422,267
$
1,420,585
$
1,416,320
FIVE-QUARTER SBA LOAN
PRODUCTIONS/SALES DATA (Unaudited) - Table 7
(Dollars in thousands)
Three Months Ended
Six Months Ended
June 30,
March 31,
December 31,
September 30,
June 30,
June 30,
June 30,
2024
2024
2023
2023
2023
2024
2023
SBA loans held-for-sale at beginning of the
quarter/year
$
198,167
$
218,258
$
219,355
$
215,083
$
243,753
$
218,258
$
230,431
SBA loans originated/transferred from/to held-for-investment during
the quarter/year
34,366
14,589
27,022
16,260
18,273
48,955
35,163
SBA loans sold during the quarter/year
(19,508
)
(28,164
)
(21,749
)
(9,245
)
(42,437
)
(47,672
)
(42,437
)
SBA loans principal paydown/payoff, net of advance
(3,881
)
(6,516
)
(6,370
)
(2,743
)
(4,506
)
(10,397
)
(8,074
)
SBA loans held-for-sale at end of the quarter/year
$
209,144
$
198,167
$
218,258
$
219,355
$
215,083
$
209,144
$
215,083
Gain on sale of SBA loans
$
1,064
$
1,489
$
838
$
419
$
1,952
$
2,553
$
1,952
Premium on sale (weighted average)
8.3
%
8.4
%
6.8
%
8.3
%
6.8
%
8.4
%
6.8
%
SBA loan production
$
45,126
$
18,089
$
37,821
$
24,270
$
24,013
$
63,215
$
45,732
FIVE QUARTER SBA SERVICING
ASSETS AND SERVICING FEES (Unaudited) - Table 8
(Dollars in thousands)
Three Months Ended
Six Months Ended
June 30,
March 31,
December 31,
September 30,
June 30,
June 30,
June 30,
2024
2024
2023
2023
2023
2024
2023
SBA servicing assets @ beginning of the
quarter/year
$
7,560
$
7,673
$
7,873
$
8,426
$
8,528
$
7,673
$
9,232
Newly added SBA servicing assets from SBA loans sold
395
555
430
182
806
950
806
Regular quarterly/annual servicing assets amortization
(335
)
(332
)
(356
)
(371
)
(379
)
(667
)
(782
)
SBA servicing assets amortized from SBA loans paid off/charged off
(216
)
(336
)
(274
)
(364
)
(529
)
(552
)
(830
)
Subtotal before impairment
7,404
7,560
7,673
7,873
8,426
7,404
8,426
Reversal of valuation allowance on servicing assets
-
-
-
-
-
-
-
SBA servicing assets @ the end of the
quarter/year
$
7,404
$
7,560
$
7,673
$
7,873
$
8,426
$
7,404
$
8,426
FIVE-QUARTER DEPOSIT
COMPONENTS (Unaudited) - Table 9
(Dollars in thousands)
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
Balance
%
Balance
%
Balance
%
Balance
%
Balance
%
Noninterest-bearing demand
$
281,243
21.0
%
$
286,766
21.1
%
$
305,923
21.1
%
$
406,033
26.2
%
$
426,333
28.0
%
Interest-bearing demand
7,901
0.6
%
6,709
0.5
%
7,504
0.5
%
6,395
0.4
%
9,056
0.6
%
NOW & MMDA
240,951
18.0
%
229,642
16.9
%
237,548
16.3
%
227,283
14.7
%
210,429
13.8
%
Savings
80,360
6.0
%
84,999
6.2
%
88,689
6.1
%
78,969
5.1
%
62,324
4.1
%
TCDs of $250K and under
295,109
22.0
%
299,944
22.0
%
315,920
21.7
%
312,704
20.2
%
298,520
19.6
%
TCDs of $250K over
314,119
23.4
%
339,482
25.0
%
353,866
24.4
%
373,345
24.1
%
368,262
24.2
%
Wholesale deposits
120,706
9.0
%
113,422
8.3
%
144,135
9.9
%
144,561
9.3
%
147,487
9.7
%
Total Deposits
$
1,340,389
100.0
%
$
1,360,964
100.0
%
$
1,453,585
100.0
%
$
1,549,290
100.0
%
$
1,522,411
100.0
%
Recap:
Noninterest-bearing demand
$
281,243
21.0
%
$
286,766
21.1
%
$
305,923
21.0
%
$
406,033
26.2
%
$
426,333
28.0
%
Interest-bearing demand
7,901
0.6
%
6,709
0.5
%
7,504
0.5
%
6,395
0.4
%
9,056
0.6
%
NOW & MMDA
217,339
16.2
%
229,642
16.9
%
237,548
16.3
%
227,283
14.7
%
210,429
13.8
%
Savings
80,360
6.0
%
84,999
6.2
%
88,689
6.1
%
78,969
5.1
%
62,324
4.1
%
TCDs of $250K and under
295,109
22.0
%
299,944
22.0
%
315,920
21.7
%
312,704
20.2
%
298,520
19.6
%
Core Deposits
881,952
65.8
%
908,060
66.7
%
955,584
65.7
%
1,031,384
66.6
%
1,006,662
66.1
%
TCDs of $250K over
314,119
23.4
%
339,482
24.9
%
353,866
24.3
%
373,345
24.1
%
368,262
24.2
%
ICS MMDA
23,612
1.8
%
Wholesale
deposits
120,706
9.0
%
113,422
8.3
%
144,135
9.9
%
144,561
9.3
%
147,487
9.7
%
Noncore Deposits
458,437
34.2
%
452,904
33.3
%
498,001
34.3
%
517,906
33.4
%
515,749
33.9
%
Total Deposits
$
1,340,389
100.0
%
$
1,360,964
100.0
%
$
1,453,585
100.0
%
$
1,549,290
100.0
%
$
1,522,411
100.0
%
FIVE-QUARTER SELECTED LOAN AND
ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10
(Dollars in thousands)
2nd Qtr.
1st Qtr.
4th Qtr.
3rd Qtr.
2nd Qtr.
2024
2024
2023
2023
2023
Allowance for Credit Losses
Balance at beginning of
period
$
16,048
$
15,291
$
15,284
$
15,626
$
15,627
CECL transition provision
-
-
-
-
-
Provision for credit losses
200
743
-
-
-
Charge-offs
(257
)
(2
)
(350
)
(11
)
Recoveries
51
14
9
8
10
Balance at the end of period
$
16,042
$
16,048
$
15,291
$
15,284
$
15,626
Nonperforming Assets:¹
Over 90 days still accruing
$
-
$
1,605
$
399
$
2
$
39
Nonaccrual loans
5,797
2,842
2,030
616
645
Total nonperforming loans
5,797
4,447
2,429
618
684
Other real estate owned
$
-
-
55
55
-
Total nonperforming assets
$
5,797
$
4,447
$
2,484
$
673
$
684
Classified Assets:¹
Substandard
$
12,762
$
11,912
$
11,063
$
10,105
$
10,491
Doubtful
-
-
-
-
-
Loss
Total classified
loans
$
12,762
$
11,912
$
11,063
$
10,105
$
10,491
Other real estate owned
$
-
-
55
55
-
Total classified assets
$
12,762
$
11,912
$
11,118
$
10,160
$
10,491
Performing modified loans:¹
$
464
$
3,811
$
3,336
$
3,336
$
3,336
Delinquent Loans:¹
Loans 30-89 days past due
$
8,613
$
16,907
$
5,981
$
10,620
$
4,420
90 days or more past due and still accruing
-
1,605
399
2
39
Nonaccrual
5,797
2,842
2,030
616
645
Total delinquent loans
$
14,410
$
21,354
$
8,410
$
11,238
$
5,104
Asset Quality Ratios:
Net (recoveries) charge-offs to average loans²
0.06
%
0.00
%
0.00
%
0.10
%
0.00
%
Nonaccrual loans to loans held-for-investment
0.47
%
0.24
%
0.17
%
0.05
%
0.05
%
Nonperforming loans to loans held-for-investment
0.47
%
0.37
%
0.20
%
0.05
%
0.06
%
Nonperforming assets to total assets
0.35
%
0.27
%
0.14
%
0.04
%
0.04
%
Classified loans to loans held-for-investment
1.04
%
1.00
%
0.92
%
0.84
%
0.87
%
Classified loans to Tier 1 and ACL
4.93
%
4.69
%
4.45
%
4.18
%
4.44
%
Classified assets to total assets
0.77
%
0.71
%
0.63
%
0.55
%
0.58
%
Classified assets to Tier 1 and ACL
4.93
%
4.69
%
4.47
%
4.20
%
4.44
%
ACL to loans held-for-investment
1.31
%
1.34
%
1.27
%
1.27
%
1.30
%
ACL to nonaccrual loans
276.73
%
564.67
%
753.25
%
2481.17
%
2422.64
%
ACL to nonperforming loans
276.73
%
360.87
%
629.52
%
2473.14
%
2284.50
%
ACL to nonperforming assets
276.73
%
360.87
%
615.58
%
2271.03
%
2284.50
%
Texas ratio ³
2.24
%
1.75
%
1.00
%
0.28
%
0.29
%
¹
Net of SBA guaranteed balance
²
Includes loans held-for-sale
³
Nonperforming assets divided by tangible common equity and ACL
Allowance for Credit Losses on Off-Balance
Sheet Items: Balance at beginning of period
$
324
$
667
$
667
$
667
$
667
Provision for credit losses on off-balance sheet items
(343
)
-
-
-
Balance at the end of period
$
324
$
324
$
667
$
667
$
667
Loans held-for-sale
209,144
198,167
218,258
219,355
215,083
Loans held-for-investment
1,228,496
1,194,439
1,204,009
1,201,230
1,201,237
Loans receivable
1,437,640
1,392,606
1,422,267
1,420,585
1,416,320
Total assets
1,654,909
1,673,261
1,760,413
1,859,312
1,819,630
Tier 1 and ACL
258,882
254,188
248,565
241,713
236,425
Tangible Common Equity
242,840
238,140
233,274
226,429
220,799
ACL
$
16,042
$
16,048
$
15,291
$
15,284
$
15,626
Nonperforming assets to loans held-for-investment
0.47
%
0.37
%
0.21
%
0.1
%
0.06
%
FIVE-QUARTER CAPITAL RATIOS
(Unaudited) - Table 11
Well Capitalized
Adequately Capitalized
June 30,
March 31,
December 31,
September 30,
June 30,
Regulatory
BASEL III
Requirement
Fully Phased In
2024
2024
2023
2023
2023
Leverage ratio
Company
N/A
N/A
14.51
%
13.85
%
12.98
%
12.53
%
12.23
%
Bank
5.00
%
4.00
%
14.45
%
13.84
%
12.96
%
12.50
%
12.20
%
Common equity tier 1 risk-based capital ratio
Company
N/A
N/A
18.36
%
18.67
%
18.08
%
17.61
%
17.08
%
Bank
6.50
%
7.00
%
18.28
%
18.65
%
18.05
%
17.57
%
17.03
%
Tier 1 risk-based capital ratio
Company
N/A
N/A
18.36
%
18.67
%
18.08
%
17.61
%
17.08
%
Bank
8.00
%
8.50
%
18.28
%
18.65
%
18.05
%
17.57
%
17.03
%
Total risk-based capital ratio
Company
N/A
N/A
19.59
%
19.92
%
19.30
%
18.83
%
18.32
%
Bank
10.00
%
10.50
%
19.50
%
19.91
%
19.27
%
18.79
%
18.27
%
Tangible common
equity/total assets
14.70
%
14.25
%
13.27
%
12.19
%
12.15
%
Tangible common equity per share
$
22.94
$
22.49
$
22.03
$
21.39
$
20.85
FIVE-QUARTER MARGIN ANALYSIS
(Unaudited) - Table 12
(Dollars in thousands)
Three Months Ended
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 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
$
1,418,458
$
24,887
7.06
%
$
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
%
Investment securities ²
70,052
723
4.15
%
59,554
575
3.88
%
60,094
563
3.72
%
64,587
577
3.54
%
67,958
595
3.51
%
Interest-earning deposits at the FRB and other banks
146,956
1,995
5.46
%
207,155
2,817
5.47
%
288,769
3,973
5.46
%
293,081
3,994
5.41
%
258,236
3,296
5.12
%
Other earning assets
11,011
200
7.31
%
11,011
214
7.82
%
11,011
212
7.64
%
11,011
196
7.06
%
10,825
163
6.04
%
Total interest-earning assets ²
1,646,477
27,805
6.79
%
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
%
NONINTEREST-EARNING ASSETS
Cash and due from
banks
12,907
12,172
12,567
13,045
12,792
Other noninterest-earning assets
33,263
31,967
32,985
33,331
34,060
Total noninterest-earning assets
46,170
44,139
45,552
46,376
46,852
Less: Allowance for credit losses
(16,058
)
(15,322
)
(15,291
)
(15,622
)
(15,627
)
TOTAL ASSETS
$
1,676,589
$
1,722,461
$
1,801,106
$
1,816,581
$
1,812,852
INTEREST-BEARING DEPOSITS
Interest-bearing demand
$
11,864
$
6
0.20
%
$
12,680
$
6
0.19
%
$
12,657
$
7
0.22
%
$
12,347
$
6
0.19
%
$
14,522
$
7
0.19
%
Money market
230,261
2,272
3.97
%
229,441
2,285
4.01
%
222,289
2,158
3.85
%
211,152
1,907
3.58
%
192,872
1,414
2.94
%
Savings
82,215
700
3.42
%
84,854
724
3.43
%
82,403
664
3.20
%
70,579
494
2.78
%
63,786
324
2.04
%
Time deposits
759,954
9,296
4.92
%
801,122
9,523
4.78
%
824,900
9,515
4.58
%
820,335
8,916
4.31
%
839,198
8,068
3.86
%
Total interest-bearing deposits
1,084,294
12,274
4.55
%
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
%
Borrowings
50,013
117
0.94
%
50,000
117
0.94
%
50,001
118
0.94
%
50,001
119
0.94
%
50,000
117
0.94
%
Total interest-bearing liabilities
1,134,307
12,391
4.39
%
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
%
Noninterest-bearing deposits
279,765
284,867
350,656
397,791
411,432
Other liabilities
19,287
21,112
25,602
27,519
20,934
Stockholders' equity
243,230
238,385
232,598
226,857
220,108
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$
1,676,589
$
1,722,461
$
1,801,106
$
1,816,581
$
1,812,852
Net interest income²
$
15,414
$
15,857
$
17,212
$
18,059
$
18,785
Net interest spread
2.40
%
2.45
%
2.50
%
2.65
%
3.03
%
Effect of noninterest-bearing sources
1.37
%
1.32
%
1.36
%
1.36
%
1.20
%
Net interest margin²
3.77
%
3.77
%
3.86
%
4.01
%
4.23
%
Cost of deposits
$
1,364,059
$
12,274
3.62
%
$
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
%
Cost of funds
$
1,414,072
$
12,391
3.52
%
$
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
%
'
Loan held-for-investment, plus loans held-for-sale
²
Amounts calculated on a fully taxable equivalent basis using
the current statutory federal tax rate
FIVE-QUARTER COMPONENTS OF
YIELD ON LOANS (Unaudited) - Table 13
(Dollars in thousands)
Three Months Ended
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Contractual yield
$
24,271
6.88
%
$
24,138
6.86
%
$
24,235
6.81
%
$
23,932
6.70
%
$
23,767
6.60
%
SBA discount accretion
736
0.21
%
926
0.26
%
845
0.24
%
921
0.25
%
1,124
0.31
%
Prepayment penalties and late fees
36
0.01
%
67
0.01
%
40
0.01
%
18
0.01
%
60
0.02
%
Amortization of net deferred costs
(156
)
-0.04
%
(225
)
-0.06
%
(194
)
-0.05
%
(137
)
-0.04
%
(290
)
-0.08
%
As reported yield on loans
$
24,887
7.06
%
$
24,906
7.07
%
$
24,926
7.01
%
$
24,734
6.92
%
$
24,661
6.85
%
MARGIN ANALYSIS (Unaudited) -
Table 14
(Dollars in thousands)
Six Months Ended
June 30, 2024
June 30, 2023
Avg Balance
Interest
Yield
Avg Balance
Interest
Yield
Number of Days in the Period
INTEREST-EARNING ASSETS
Loans Receivable ¹
$
1,417,191
$
49,793
7.07
%
$
1,473,184
$
49,040
6.71
%
Investment securities ²
64,803
1,298
4.03
%
69,046
1,172
3.42
%
Interest-earning deposits at the FRB and other banks
177,056
4,812
5.47
%
224,651
5,474
4.91
%
Other earning assets
11,011
414
7.56
%
10,475
327
6.30
%
Total interest-earning assets ²
1,670,061
56,317
6.78
%
1,777,356
56,013
6.36
%
NONINTEREST-EARNING ASSETS
Cash and due from banks
12,540
13,523
Other noninterest-earning assets
32,122
35,296
Total noninterest-earning assets
44,662
48,819
Less: Allowance for credit losses
(15,690
)
(15,590
)
TOTAL ASSETS
$
1,699,033
$
1,810,585
INTEREST-BEARING DEPOSITS
Interest-bearing demand
$
12,271
$
12
0.20
%
$
16,261
$
16
0.20
%
Money market
229,851
4,557
3.99
%
212,261
2,883
2.74
%
Savings
83,534
1,424
3.43
%
59,704
488
1.65
%
Time deposits
780,539
18,819
4.85
%
818,251
14,478
3.57
%
Total interest-bearing deposits
1,106,195
24,812
4.51
%
1,106,477
17,865
3.26
%
Borrowings
50,007
234
0.9
%
50,000
233
0.94
%
Total interest-bearing liabilities
1,156,202
25,046
4.36
%
1,156,477
18,098
3.16
%
Noninterest-bearing deposits
282,316
418,273
Other liabilities
19,707
18,904
Stockholders' equity
240,808
216,931
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
$
1,699,033
$
1,810,585
Net interest income²
$
31,271
$
37,915
Net
interest spread
2.42
%
3.20
%
Effect of
noninterest-bearing sources
1.35
%
1.10
%
Net interest
margin²
3.77
%
4.30
%
Cost of deposits
$
1,388,511
$
24,812
3.59
%
$
1,524,750
$
17,865
2.36
%
Cost of
funds
$
1,438,518
$
25,046
3.50
%
$
1,574,750
$
18,098
2.32
%
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)
Six Months Ended
June 30, 2024
June 30, 2023
Amount
Yield
Amount
Yield
Contractual yield
$
48,409
6.87
%
$
47,410
6.49
%
SBA discount accretion
1,662
0.24
%
2,061
0.28
%
Prepayment penalties and late fees
103
0.01
%
90
0.01
%
Amortization of net deferred costs
(381
)
-0.05
%
(521
)
-0.07
%
As reported yield on loans
$
49,793
7.07
%
$
49,040
6.71
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240725152164/en/
Richard Koh, EVP & CFO (323) 988-3037
RichardK@cbb-bank.com