Le Lézard
Classified in: Business, Covid-19 virus
Subject: EARNINGS

CBB Bancorp, Inc. Reports Third Quarter Financial Results


CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank (the "Bank"), announced today net income for third quarter 2020 of $2.9 million, or $0.28 per diluted share, an increase of 75.7% compared to $1.7 million, or $0.16 per diluted share, in the prior quarter and a decrease of 15.0% compared to $3.4 million, or $0.33 per share, in the same period last year.

"We are operating in unprecedented times, and I am proud of our team working together with our customers to get through this COVID-19 pandemic and economic crisis," says Ms. Kim, President and Chief Executive Officer. "We are seeing positive trends as we navigate through the COVID-19 pandemic. The initial three-month loan deferment totaled approximately $286.9 million or 26.9% of total loan portfolio. However, the second round of loan payment deferments as of September 30, 2020, amounted to approximately $21.1 million or 2.1% of total loan portfolio. We will continue to work with our customers through this economic crisis while we continue to maintain strong capital and liquidity."

Overall Results

Net income for third quarter 2020 was positively impacted by higher net interest income and gain on sale of loans. The return on average assets for third quarter 2020 was 0.85% compared to 0.52% for second quarter 2020 and 1.15% for third quarter 2019. The return on average equity for third quarter 2020 was 7.43% compared to 4.36% for second quarter of 2020 and 9.44% for third quarter 2019. The cost of funds for third quarter 2020 was 0.85% compared to 1.20% for second quarter 2020 and 1.93% for third quarter 2019. The efficiency ratio for third quarter 2020 was 58.77% compared to 66.02% for second quarter 2020 and 61.47% for third quarter 2019.

Net Interest Income and Margin:

Net Interest Income

Net interest income for third quarter 2020 was $10.7 million, an increase of $790 thousand, or 8.0%, from second quarter 2020, and a decrease of $257 thousand, or 2.4%, from third quarter 2019. The increase in net interest income was primarily driven by our ability to continue to aggressively lower deposit rates and wholesale borrowing costs while strategically shifting our deposit mix to lower-cost core deposits.

Net Interest Margin

Our net interest margin for third quarter 2020 was 3.20% compared to 3.17% for second quarter 2020 and 3.78% for third quarter 2019. The slight increase in net interest margin was due to our time deposits repricing lower, which will continue as deposits reach their maturities. Our cost of funds improved significantly for third quarter 2020 to 0.85% from 1.20% for second quarter 2020 and 1.93% for third quarter 2019.

Provision for Loan Losses:

Our provision for loan losses for third quarter 2020 was $1.6 million, compared to $1.6 million for second quarter 2020 and $300 thousand for third quarter 2019. Approximately $521 thousand of the third quarter provision was driven by an increase in qualitative factors, while $810 thousand was attributed to specific reserve requirements for impaired loans. The assumptions underlying these qualitative factors included a deterioration in the macro-economic environment caused by the pandemic and the uncertainties surrounding the financial condition of our borrowers who received loan deferments under the CARES Act. See Table 10 for additional details and trends. For additional information, go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 3Q 2020 Overview and COVID-19 Updates presentation.

Noninterest Income:

Noninterest income for third quarter 2020 was $3.0 million compared to $1.5 million for second quarter 2020 and $2.4 million for third quarter 2019. The increase in third quarter 2020 was due to higher gains on sale of SBA loans resulting from significantly higher sales volume and higher premiums. Premiums averaged 9.8% compared to 8.6% for the second quarter 2020, and 8.9% for the third quarter 2019. As a result, the volume of loans sold during third quarter 2020 increased to $24.9 million, compared to $9.8 million for second quarter 2020, and $25.37 million for third quarter 2019.

Noninterest Expense:

Noninterest expense for third quarter 2020 was $8.0 million compared to $7.5 million for second quarter 2020 and $8.2 million for third quarter 2019. Salaries and employee benefits increased by $331 thousand compared to the prior quarter. The increase reflected lower deferred loan origination costs for the current quarter due to lower PPP loan origination.

Income Taxes:

The Company's effective tax rate for third quarter 2020 was 27.9% compared to 27.0% for second quarter 2020 and 29.4% for third quarter 2019.

Balance Sheet:

Investment Securities:

Investment securities were $88.8 million at September 30, 2020, a decrease of $2.3 million from June 30, 2020 and $8.4 million from September 30, 2019. The decreases were due to principal paydowns. There were no portfolio additions.

Loans Receivable:

Loans receivable outstanding (including loans held for sale) at September 30, 2020 was $1.01 billion, an increase of $7 million, or 0.7%, from June 30, 2020, and an increase of $106.9 million, or 11.8% from September 30, 2019.

We provided loan payment deferments to our commercial borrowers under the CARES Act. The first round of loans with three-month deferment at June 30, 2020 totaled approximately $286.9 million or 26.9% of total loan portfolio. The second round of loan payment deferments as of September 30, 2020, totaled approximately $21.1 million or 2.0% of loan portfolio. We anticipate there may be additional loan deferments as the six-month SBA loan payment relief to our SBA borrowers had expired in September 2020. SBA borrowers are required to make payments beginning October 2020 unless their loans were originated after April 2020. SBA will only cover principal and interest payments for the six-month period. Our weighted average loan-to-value of CRE loans was 72.2% at September 30, 2020. Excluding SBA loans, our weighted average loan-to-value of CRE loans was 55.1%. For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 3Q 2020 Overview and COVID-19 updates presentation.

Paycheck Protection Program (PPP):

Paycheck Protection Program loans totaled $92.7 million at September 30, 2020. Unearned fees are accreted to income based on the two-year contractual maturity. The SBA did not approve any PPP loan forgiveness application process in the third quarter 2020 and, accordingly, no PPP loans were forgiven in the quarter. SBA has streamlined the PPP forgiveness applications for loans of $50 thousand and under. We anticipate the forgiveness approvals will begin during the fourth quarter of 2020. As we process the loan forgiveness, we will recognize the remaining unaccreted fee income. As of September 30, 2020, we had approximately 700 PPP loans totaling $15.2 million with balances of $50 thousand and under. The remaining unaccreted balance for such loans was $600 thousand.

Allowance for Loan Losses and Asset Quality:

The allowance for loan losses at September 30, 2020 was $13.6 million, or 1.35% of portfolio loans, compared to $12.3 million, or 1.22% of portfolio loans, at June 30, 2020. Excluding PPP loans of $92.7 million, which are government guaranteed, the allowance for loan losses at September 30, 2020 was 1.48% compared to 1.34% at June 30, 2020. Non-performing loans as of September 30, 2020 was $4.1 million, down from $4.2 million at June 30, 2020. Loans with payment deferments are considered performing loans in accordance with the regulatory guidance. Our coverage ratio of allowance for loan losses to nonperforming assets continues to exceed 300%. For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 3Q 2020 Overview and COVID-19 Updates presentation.

SBA Loans Held for Sale:

SBA loans held for sale at September 30, 2020 were $53.8 million, compared to $32.3 million at June 30, 2020 and $42.1 million at September 30, 2019. We continue to assess SBA loan sale premiums and plan to sell loans when it is advantageous to do so. During the quarter, loan sale premiums fluctuated higher and the volume of loan sales increased significantly as demand for SBA loans has returned to the secondary market. See comments under "Noninterest Income", and the Table 7 for additional SBA loan origination and sale data.

Deposits:

Deposits were $1.10 billion at September 30, 2020, up $73.7 million from June 30, 2020 and up $112.1 million from September 30, 2019. Noninterest-bearing demand deposits (DDAs) increased $68.3 million or 23.2% from June 30, 2020 and increased $163.3 million or 81.6% from September 30, 2019. DDAs were 33.0% of total deposits at September 30, 2020 compared to 28.7% at June 30, 2020 and 20.2% at September 30, 2019. NOW and MMDA increased $36.8 million or 19.1% from June 30, 2020 and increased $106.3 million or 86.1% from September 30, 2019. Time Deposits decreased $24.8 million or 5.3% from June 30, 2020 and decreased $155.1 million or 25.8% from September 30, 2019. Our time deposits at September 30, 2020 were $446.7 million or 40.6% of total deposits, compared to $471.5 million or 45.9% of total deposits at June 30, 2020 and down from $601.8 million or 60.8% of total deposits at September 30, 2019. Our cost of funds for third quarter 2020 decreased to 0.85% from to 1.20% in second quarter 2020 and 1.93% for third quarter 2019.

Borrowings:

Borrowings at September 30, 2020 consisted of $70.0 million of Federal Home Loan Bank of San Francisco (FHLB-SF) advances, compared to $20 million at June 30, 2020. The historically low market interest rates enabled us to match fund some of our fixed rate loans with long term, low cost funds to minimize interest rate risk.

Additionally, we match funded approximately $58.7 million of PPP loans using the FRB PPP Liquidity Facility without taking on liquidity or funding risk. The current borrowing rate for the facility is 0.35% and the PPP loan rate is 1% plus a loan fee ranging from 1.0% to 5% depending on the loan amount.

Capital:

Stockholders' equity was $156.0 million at September 30, 2020, representing an increase of $3.3 million, or 2.2%, over stockholders' equity of $152.8 million at June 30, 2020. Book value per share at September 30, 2020 was $15.23 compared with $14.92 at June 30, 2020, an increase of $0.31 per share or 2.1%.

All of our regulatory capital ratios increased at September 30, 2020 from their levels at June 30, 2020 and continue to exceed the minimum levels required to be considered "Well Capitalized" as defined for bank regulatory purposes and in compliance with the fully phased-in Basel III requirements, which went into effect on January 1, 2019, as shown on Table 11 in this press release. Importantly, our Common Equity Tier 1 risked-based capital at September 30, 2020 was 15.24% at the Company level and 15.20% at the Bank level.

About CBB Bancorp, Inc.:

CBB Bancorp, Inc. is the holding company of Commonwealth Business Bank, a full-service commercial bank which specializes in small-to medium-sized businesses and does business as "CBB Bank." The Bank has eight full-service branches in Los Angeles and Orange Counties in California, and Dallas County in Texas; two SBA regional offices in Los Angeles and Dallas Counties; and five loan production offices in Texas, Georgia, Colorado and Washington.

For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 3Q 2020 Overview and COVID-19 Updates presentation.

FORWARD-LOOKING STATEMENTS:

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

Schedules and Financial Data: All tables and data to follow:

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

September 30,

 

June 30,

 

$

%

 

September 30,

 

$

%

 

September 30,

 

September 30,

 

$

%

 

2020

 

 

 

2020

 

 

Change

Change

 

 

2019

 

 

Change

Change

 

 

2020

 

 

 

2019

 

 

Change

Change

 
Interest income

$

13,212

 

$

13,206

 

$

6

 

0.0

%

$

15,888

 

$

(2,676

)

(16.8

%)

$

40,891

 

$

47,768

 

$

(6,877

)

(14.4

%)

Interest expense

 

2,558

 

 

3,342

 

 

(784

)

(23.5

%)

 

4,977

 

 

(2,419

)

(48.6

%)

 

9,881

 

 

14,139

 

 

(4,258

)

(30.1

%)

Net interest income

 

10,654

 

 

9,864

 

 

790

 

8.0

%

 

10,911

 

 

(257

)

(2.4

%)

 

31,010

 

 

33,629

 

 

(2,619

)

(7.8

%)

 
Provision for loan losses

 

1,600

 

 

1,600

 

 

-

 

-

 

 

300

 

 

1,300

 

433.3

%

 

3,900

 

 

600

 

 

3,300

 

550.0

%

Net interest income after provision for loan losses

 

9,054

 

 

8,264

 

 

790

 

9.6

%

 

10,611

 

 

(1,557

)

(14.7

%)

 

27,110

 

 

33,029

 

 

(5,919

)

(17.9

%)

 
Gain on sale of loans

 

1,662

 

 

509

 

 

1,153

 

226.5

%

 

1,396

 

 

266

 

19.1

%

 

3,110

 

 

4,672

 

 

(1,562

)

(33.4

%)

Gain (loss) on sale of OREO

 

-

 

 

9

 

 

(9

)

(100.0

%)

 

-

 

 

-

 

-

 

 

3

 

 

(14

)

 

17

 

121.4

%

SBA servicing fee income, net

 

948

 

 

738

 

 

210

 

28.5

%

 

523

 

 

425

 

81.3

%

 

2,058

 

 

1,338

 

 

720

 

53.8

%

SBA servicing right impairment

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

-

 

 

-

 

 

-

 

 

-

 

-

 

Service charges and other income

 

385

 

 

251

 

 

134

 

53.4

%

 

505

 

 

(120

)

(23.8

%)

 

1,032

 

 

1,539

 

 

(507

)

(32.9

%)

Noninterest income

 

2,995

 

 

1,507

 

 

1,488

 

98.7

%

 

2,424

 

 

571

 

23.6

%

 

6,203

 

 

7,535

 

 

(1,332

)

(17.7

%)

 
Salaries and employee benefits

 

4,948

 

 

4,617

 

 

331

 

7.2

%

 

5,132

 

 

(184

)

(3.6

%)

 

15,267

 

 

15,697

 

 

(430

)

(2.7

%)

Occupancy and equipment

 

938

 

 

943

 

 

(5

)

(0.5

%)

 

869

 

 

69

 

7.9

%

 

2,827

 

 

2,532

 

 

295

 

11.7

%

Marketing expense

 

265

 

 

279

 

 

(14

)

(5.0

%)

 

302

 

 

(37

)

(12.3

%)

 

1,002

 

 

1,811

 

 

(809

)

(44.7

%)

Professional expense

 

503

 

 

500

 

 

3

 

0.6

%

 

691

 

 

(188

)

(27.2

%)

 

1,438

 

 

1,903

 

 

(465

)

(24.4

%)

Other expenses

 

1,367

 

 

1,168

 

 

199

 

17.0

%

 

1,203

 

 

164

 

13.6

%

 

3,929

 

 

3,819

 

 

110

 

2.9

%

Noninterest expense

 

8,021

 

 

7,507

 

 

514

 

6.8

%

 

8,197

 

 

(176

)

(2.1

%)

 

24,463

 

 

25,762

 

 

(1,299

)

(5.0

%)

 
Income before income tax expense

 

4,028

 

 

2,264

 

 

1,764

 

77.9

%

 

4,838

 

 

(810

)

(16.7

%)

 

8,850

 

 

14,802

 

 

(5,952

)

(40.2

%)

 
Income tax expense

 

1,125

 

 

612

 

 

513

 

83.8

%

 

1,421

 

 

(296

)

(20.8

%)

 

2,683

 

 

4,312

 

 

(1,629

)

(37.8

%)

 
Net income

$

2,903

 

$

1,652

 

$

1,251

 

75.7

%

$

3,417

 

$

(514

)

(15.0

%)

$

6,167

 

$

10,490

 

$

(4,323

)

(41.2

%)

 
Effective tax rate

 

27.9

%

 

27.0

%

 

0.9

%

3.3

%

 

29.4

%

 

(1.4

%)

(4.9

%)

 

30.3

%

 

29.1

%

 

1.2

%

4.1

%

 
Outstanding number of shares

 

10,247,292

 

 

10,237,310

 

 

9,982

 

0.1

%

 

10,170,760

 

 

76,532

 

0.8

%

 

10,247,292

 

 

10,170,760

 

 

76,532

 

0.8

%

 
Weighted average shares for basic EPS

 

10,244,037

 

 

10,237,310

 

 

6,727

 

0.1

%

 

10,141,086

 

 

102,951

 

1.0

%

 

10,235,197

 

 

10,123,118

 

 

112,079

 

1.1

%

Weighted average shares for diluted EPS

 

10,273,148

 

 

10,276,637

 

 

(3,489

)

(0.0

%)

 

10,321,937

 

 

(48,789

)

(0.5

%)

 

10,287,659

 

 

10,341,228

 

 

(53,569

)

(0.5

%)

 
Basic EPS

$

0.28

 

$

0.16

 

$

0.12

 

75.0

%

$

0.34

 

$

(0.06

)

(17.6

%)

$

0.60

 

$

1.04

 

$

(0.44

)

(42.3

%)

Diluted EPS

$

0.28

 

$

0.16

 

$

0.12

 

75.0

%

$

0.33

 

$

(0.05

)

(15.2

%)

$

0.60

 

$

1.01

 

$

(0.41

)

(40.6

%)

 
Return on average assets

 

0.85

%

 

0.52

%

 

0.33

%

63.5

%

 

1.15

%

 

(0.30

%)

(26.1

%)

 

0.65

%

 

1.21

%

 

(0.56

%)

(46.3

%)

Return on average equity

 

7.43

%

 

4.36

%

 

3.07

%

70.4

%

 

9.44

%

 

(2.01

%)

(21.3

%)

 

5.39

%

 

10.09

%

 

(4.70

%)

(46.6

%)

 
Efficiency ratio¹

 

58.77

%

 

66.02

%

 

(7.25

%)

(11.0

%)

 

61.47

%

 

(2.7

%)

(4.4

%)

 

65.74

%

 

62.58

%

 

3.16

%

5.0

%

Yield on interest-earning assets²

 

3.96

%

 

4.24

%

 

(0.28

%)

(6.6

%)

 

5.49

%

 

(1.53

%)

(27.9

%)

 

4.46

%

 

5.66

%

 

(1.20

%)

(21.2

%)

Cost of funds

 

0.85

%

 

1.20

%

 

(0.35

%)

(29.2

%)

 

1.93

%

 

(1.08

%)

(56.0

%)

 

1.21

%

 

1.87

%

 

(0.66

%)

(35.3

%)

Cost of funds exc. SBA PPP loan funding

 

0.89

%

 

1.25

%

 

(0.36

%)

(28.8

%)

 

1.25

%

Net interest margin²

 

3.20

%

 

3.17

%

 

0.03

%

1.0

%

 

3.78

%

 

(0.58

%)

(15.3

%)

 

3.38

%

 

3.99

%

 

(0.61

%)

(15.3

%)

Net interest margin exc. SBA PPP loans²

 

3.27

%

 

3.20

%

 

0.07

%

2.2

%

 

3.43

%

 

¹ Represents the ratio of noninterest expense less other real estate owned operations to the sum of net interest income before provision for credit losses and total noninterest income, less gains/(loss) on sale of securities, other-than-temporary impairment recovery/(loss) on investment securities and gain/(loss) from other real estate owned.

² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

BALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2
(Dollars in thousands)
 

September 30,

June 30, $ % September 30, $ %

 

2020

 

 

2020

 

Change Change

 

2019

 

Change

Change

ASSETS
Cash and due from banks

$

8,030

 

$

9,043

 

$

(1,013

)

(11.2

%)

$

12,448

 

$

(4,418

)

(35.5

%)

Interest-earning deposits at the FRB and other banks

 

212,279

 

 

179,519

 

 

32,760

 

18.2

%

 

72,907

 

 

139,372

 

191.2

%

Investment securities¹

 

88,784

 

 

91,091

 

 

(2,307

)

(2.5

%)

 

97,141

 

 

(8,357

)

(8.6

%)

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

 

53,755

 

 

32,264

 

 

21,491

 

66.6

%

 

42,132

 

 

11,623

 

27.6

%

 
Loans receivable

 

1,011,867

 

 

1,005,128

 

 

6,739

 

0.7

%

 

905,004

 

 

106,863

 

11.8

%

Allowance for loan losses

 

(13,614

)

 

(12,283

)

 

(1,331

)

(10.8

%)

 

(9,978

)

 

(3,636

)

(36.4

%)

Loans receivable, net

 

998,253

 

 

992,845

 

 

5,408

 

0.5

%

 

895,026

 

 

103,227

 

11.5

%

 
OREO

 

-

 

 

-

 

 

-

 

-

 

 

11

 

 

(11

)

(100.0

%)

Restricted stock investments

 

8,196

 

 

8,196

 

 

-

 

-

 

 

8,194

 

 

2

 

0.0

%

Servicing assets

 

9,043

 

 

8,944

 

 

99

 

1.1

%

 

9,953

 

 

(910

)

(9.1

%)

Other assets

 

21,064

 

 

21,383

 

 

(319

)

(1.5

%)

 

21,885

 

 

(821

)

(3.8

%)

Total assets

$

1,399,404

 

$

1,343,285

 

$

56,119

 

4.2

%

$

1,159,697

 

$

239,707

 

20.7

%

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing

$

363,350

 

$

295,003

 

$

68,347

 

23.2

%

$

200,034

 

$

163,316

 

81.6

%

Interest-bearing

 

738,040

 

 

732,647

 

 

5,393

 

0.7

%

 

789,280

 

 

(51,240

)

(6.5

%)

Total deposits

 

1,101,390

 

 

1,027,650

 

 

73,740

 

7.2

%

 

989,314

 

 

112,076

 

11.3

%

 
FHLB advances and other borrowing

 

128,671

 

 

148,671

 

 

(20,000

)

(13.5

%)

 

10,000

 

 

118,671

 

1186.7

%

Other liabilities

 

13,295

 

 

14,208

 

 

(913

)

(6.4

%)

 

15,164

 

 

(1,869

)

(12.3

%)

Total liabilities

 

1,243,356

 

 

1,190,529

 

 

52,827

 

4.4

%

 

1,014,478

 

 

228,878

 

22.6

%

 
Stockholders' Equity

 

156,048

 

 

152,756

 

 

3,292

 

2.2

%

 

145,219

 

 

10,829

 

7.5

%

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,399,404

 

$

1,343,285

 

$

56,119

 

4.2

%

$

1,159,697

 

$

239,707

 

20.7

%

 
CAPITAL RATIOS
Leverage ratio
Company

 

11.76

%

 

11.98

%

 

(0.22

%)

(1.8

%)

 

12.14

%

 

(0.38

%)

(3.1

%)

Bank

 

11.72

%

 

11.94

%

 

(0.22

%)

(1.8

%)

 

12.10

%

 

(0.38

%)

(3.1

%)

Common equity tier 1 risk-based capital ratio
Company

 

15.24

%

 

15.23

%

 

0.01

%

0.1

%

 

14.71

%

 

0.53

%

3.6

%

Bank

 

15.20

%

 

15.18

%

 

0.02

%

0.1

%

 

14.66

%

 

0.54

%

3.7

%

Tier 1 risk-based capital ratio
Company

 

15.24

%

 

15.23

%

 

0.01

%

0.1

%

 

14.71

%

 

0.53

%

3.6

%

Bank

 

15.20

%

 

15.18

%

 

0.02

%

0.1

%

 

14.66

%

 

0.54

%

3.7

%

Total risk-based capital ratio
Company

 

16.50

%

 

16.48

%

 

0.02

%

0.1

%

 

15.80

%

 

0.70

%

4.4

%

Bank

 

16.45

%

 

16.43

%

 

0.02

%

0.1

%

 

15.75

%

 

0.70

%

4.4

%

Book value per share

$

15.23

 

$

14.92

 

$

0.31

 

2.1

%

$

14.28

 

$

0.95

 

6.7

%

Loan-to-Deposit (LTD) ratio

 

91.87

%

 

97.81

%

 

(5.94

%)

(6.1

%)

 

91.48

%

 

0.39

%

0.4

%

Nonperforming assets

 

4,111

 

 

4,189

 

 

(78

)

(1.9

%)

 

5,134

 

$

(1,023

)

(19.9

%)

Nonperforming assets as a % of loans receivable

 

0.41

%

 

0.42

%

 

(0.01

%)

(2.4

%)

 

0.57

%

 

(0.16

%)

(28.1

%)

ALLL as a % of loans receivable

 

1.35

%

 

1.22

%

 

0.13

%

10.7

%

 

1.10

%

 

0.25

%

22.7

%

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

 

1.48

%

 

1.34

%

 

0.14

%

10.4

%

 
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,

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 
Interest income

$

13,212

 

$

13,206

 

$

14,473

 

$

15,254

 

$

15,888

 

Interest expense

 

2,558

 

 

3,342

 

 

3,981

 

 

4,517

 

 

4,977

 

Net interest income

 

10,654

 

 

9,864

 

 

10,492

 

 

10,737

 

 

10,911

 

 
Provision for loan losses

 

1,600

 

 

1,600

 

 

700

 

 

700

 

 

300

 

Net interest income after provision for loan losses

 

9,054

 

 

8,264

 

 

9,792

 

 

10,037

 

 

10,611

 

 
Gain on sale of loans

 

1,662

 

 

509

 

 

939

 

 

1,481

 

 

1,396

 

Gain (loss) on sale of OREO

 

-

 

 

9

 

 

(6

)

 

-

 

 

-

 

SBA servicing fee income, net

 

948

 

 

738

 

 

372

 

 

413

 

 

523

 

SBA servicing right impairment

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Service charges and other income

 

385

 

 

251

 

 

396

 

 

416

 

 

505

 

Noninterest income

 

2,995

 

 

1,507

 

 

1,701

 

 

2,310

 

 

2,424

 

 
Salaries and employee benefits

 

4,948

 

 

4,617

 

 

5,702

 

 

5,355

 

 

5,132

 

Occupancy and equipment

 

938

 

 

943

 

 

946

 

 

978

 

 

869

 

Marketing expense

 

265

 

 

279

 

 

458

 

 

119

 

 

302

 

Professional expense

 

503

 

 

500

 

 

435

 

 

417

 

 

691

 

Other expenses

 

1,367

 

 

1,168

 

 

1,394

 

 

1,487

 

 

1,203

 

Noninterest expense

 

8,021

 

 

7,507

 

 

8,935

 

 

8,356

 

 

8,197

 

 
Income before income tax expense

 

4,028

 

 

2,264

 

 

2,558

 

 

3,991

 

 

4,838

 

 
Income tax expense

 

1,125

 

 

612

 

 

946

 

 

1,137

 

 

1,421

 

 
Net income

$

2,903

 

$

1,652

 

$

1,612

 

$

2,854

 

$

3,417

 

 
Effective tax rate

 

27.9

%

 

27.0

%

 

37.0

%

 

28.5

%

 

29.4

%

 
Outstanding number of shares

 

10,247,292

 

 

10,237,310

 

 

10,237,310

 

 

10,197,380

 

 

10,170,760

 

 
Weighted average shares for basic EPS

 

10,244,037

 

 

10,237,310

 

 

10,224,146

 

 

10,188,700

 

 

10,141,086

 

Weighted average shares for diluted EPS

 

10,273,148

 

 

10,276,637

 

 

10,327,730

 

 

10,336,793

 

 

10,321,937

 

 
Basic EPS

$

0.28

 

$

0.16

 

$

0.16

 

$

0.28

 

$

0.34

 

Diluted EPS

$

0.28

 

$

0.16

 

$

0.16

 

$

0.28

 

$

0.33

 

 
QUARTERLY 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,

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 
Salaries and benefits

$

4,948

 

$

4,617

 

$

5,702

 

$

5,355

 

$

5,132

 

FTE at the end of period

 

179

 

 

191

 

 

194

 

 

190

 

 

190

 

Average FTE during the period

 

181

 

 

193

 

 

192

 

 

191

 

 

191

 

Salaries and benefits/average FTE¹

$

109

 

$

96

 

$

119

 

$

111

 

$

106

 

Salaries and benefits/average assets¹

 

1.45

%

 

1.44

%

 

2.03

%

 

1.83

%

 

1.72

%

Noninterest expense/average assets¹

 

2.34

%

 

2.35

%

 

3.19

%

 

2.85

%

 

2.75

%

 
1 Annualized
FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5
(Dollars in thousands)
 
September 30, June 30, March 31, December 31, September 30,

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

ASSETS
Cash and due from banks

$

8,030

 

$

9,043

 

$

7,804

 

$

10,059

 

$

12,448

 

Interest-earning deposits at the FRB and other banks

 

212,279

 

 

179,519

 

 

113,880

 

 

93,259

 

 

72,907

 

Investment securities¹

 

88,784

 

 

91,091

 

 

91,863

 

 

94,640

 

 

97,141

 

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

 

53,755

 

 

32,264

 

 

29,989

 

 

28,826

 

 

42,132

 

 
Loans receivable

 

1,011,867

 

 

1,005,128

 

 

931,717

 

 

906,875

 

 

905,004

 

Allowance for loan losses

 

(13,614

)

 

(12,283

)

 

(11,034

)

 

(10,596

)

 

(9,978

)

Loans receivable, net

 

998,253

 

 

992,845

 

 

920,683

 

 

896,279

 

 

895,026

 

 

OREO

 

-

 

 

-

 

 

364

 

 

362

 

 

11

 

Restricted stock investments

 

8,196

 

 

8,196

 

 

8,194

 

 

8,194

 

 

8,194

 

Servicing assets

 

9,043

 

 

8,944

 

 

9,203

 

 

9,697

 

 

9,953

 

Other assets

 

21,064

 

 

21,383

 

 

20,144

 

 

21,372

 

 

21,885

 

Total assets

$

1,399,404

 

$

1,343,285

 

$

1,202,124

 

$

1,162,688

 

$

1,159,697

 

 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing

$

363,350

 

$

295,003

 

$

211,139

 

$

209,484

 

$

200,034

 

Interest-bearing

 

738,040

 

 

732,647

 

 

739,285

 

 

763,822

 

 

789,280

 

Total deposits

 

1,101,390

 

 

1,027,650

 

 

950,424

 

 

973,306

 

 

989,314

 

 
FHLB advances

 

128,671

 

 

148,671

 

 

85,000

 

 

25,000

 

 

10,000

 

Other liabilities

 

13,295

 

 

14,208

 

 

16,895

 

 

16,298

 

 

15,164

 

Total liabilities

 

1,243,356

 

 

1,190,529

 

 

1,052,319

 

 

1,014,604

 

 

1,014,478

 

 
Stockholders' Equity

 

156,048

 

 

152,756

 

 

149,805

 

 

148,084

 

 

145,219

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,399,404

 

$

1,343,285

 

$

1,202,124

 

$

1,162,688

 

$

1,159,697

 

 
¹ Includes AFS and HTM
FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6
(Dollars in thousands)
 
September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019
Balance % Balance % Balance % Balance % Balance %
 
Construction

$

18,236

1.8

%

$

14,649

 

1.5

%

$

12,607

1.4

%

$

16,957

1.9

%

$

18,477

2.0

%

Commercial real estate

 

779,062

77.0

%

 

769,563

 

76.6

%

 

768,539

82.5

%

 

746,969

82.4

%

 

725,096

80.1

%

Commercial and industrial

 

211,298

20.9

%

 

215,362

 

21.4

%

 

143,117

15.4

%

 

135,412

14.9

%

 

153,306

16.9

%

Consumer

 

2,751

0.3

%

 

5,646

 

0.6

%

 

5,056

0.5

%

 

5,184

0.6

%

 

5,389

0.6

%

Gross loans

 

1,011,347

99.9

%

 

1,005,220

 

100.0

%

 

929,319

99.7

%

 

904,522

99.7

%

 

902,268

99.7

%

 
Net deferred loan fees/costs

 

520

0.1

%

 

(92

)

0.0

%

 

2,398

0.3

%

 

2,353

0.3

%

 

2,736

0.3

%

Loans receivable

$

1,011,867

100.0

%

$

1,005,128

 

100.0

%

$

931,717

100.0

%

$

906,875

100.0

%

$

905,004

100.0

%

 
Loans held-for-sale

$

53,755

$

32,264

 

$

29,989

$

28,826

$

42,132

Loans receivable, including loans held-for-sale

$

1,065,622

$

1,037,392

 

$

961,706

$

935,701

$

947,136

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

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 

2020

 

 

2019

 

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

$

32,264

 

$

29,988

 

$

28,826

 

$

42,132

 

$

46,875

 

$

28,826

 

$

45,665

 

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

 

46,731

 

 

12,497

 

 

20,479

 

 

19,146

 

 

20,850

 

 

79,707

 

 

84,131

 

SBA loans sold during the quarter/year

 

(24,866

)

 

(9,832

)

 

(18,530

)

 

(28,948

)

 

(25,276

)

 

(53,228

)

 

(86,419

)

SBA loans principal payment, net of advance

 

(374

)

 

(389

)

 

(787

)

 

(3,504

)

 

(317

)

 

(1,550

)

 

(1,245

)

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

$

53,755

 

$

32,264

 

$

29,988

 

$

28,826

 

$

42,132

 

$

53,755

 

$

42,132

 

 
Gain on sale of SBA loans

$

1,662

 

$

509

 

$

939

 

$

1,481

 

$

1,396

 

$

3,110

 

$

4,672

 

Premium on sale (weighted average)

 

9.8

%

 

8.6

%

 

8.0

%

 

7.6

%

 

8.7

%

 

8.9

%

 

8.4

%

 
SBA loan production

$

59,944

 

$

104,800

 

$

31,794

 

$

30,783

 

$

30,009

 

$

196,538

 

$

106,193

 

 

 
SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8
(Dollars in thousands)
 
Three Months Ended Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 

2020

 

 

2019

 

 
 
SBA servicing assets @ beginning of the quarter/year

$

8,944

 

$

9,203

 

$

9,697

 

$

9,953

 

$

10,174

 

$

9,697

 

$

10,541

 

 
Newly added SBA servicing assets from SBA loans sold

 

523

 

 

197

 

 

383

 

 

606

 

 

531

 

 

1,103

 

 

1,784

 

Regular quarterly/annual servicing assets amortization

 

(384

)

 

(383

)

 

(388

)

 

(402

)

 

(398

)

 

(1,155

)

 

(1,188

)

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

 

(40

)

 

(73

)

 

(489

)

 

(460

)

 

(354

)

 

(602

)

 

(1,184

)

 

Subtotal before impairment

 

9,043

 

 

8,944

 

 

9,203

 

 

9,697

 

 

9,953

 

 

9,043

 

 

9,953

 

 
SBA servicing assets impairment

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

SBA servicing liability impairment

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 
SBA servicing assets @ end of the quarter/year

$

9,043

 

$

8,944

 

$

9,203

 

$

9,697

 

$

9,953

 

$

9,043

 

$

9,953

 

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9
(Dollars in thousands)
 
September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019
Balance % Balance % Balance % Balance % Balance %
 
Noninterest-bearing demand

$

363,350

33.0

%

$

295,003

 

28.7

%

$

211,139

22.2

%

$

209,484

21.5

%

$

200,034

20.2

%

NOW & MMDA

 

229,730

20.9

%

 

192,950

 

18.8

%

 

136,356

14.3

%

 

117,450

12.1

%

 

123,477

12.5

%

Savings

 

61,631

5.6

%

 

68,244

 

6.6

%

 

64,659

6.8

%

 

67,060

6.9

%

 

63,978

6.5

%

TCDs of $250K and under

 

230,230

20.9

%

 

241,718

 

23.5

%

 

273,624

28.8

%

 

328,058

33.7

%

 

342,670

34.6

%

TCDs of $250K over

 

146,911

13.3

%

 

139,197

 

13.5

%

 

154,108

16.2

%

 

158,009

16.2

%

 

165,910

16.8

%

Wholesale TCDs

 

69,538

6.3

%

 

90,538

 

8.8

%

 

110,538

11.6

%

 

93,245

9.6

%

 

93,245

9.4

%

Total Deposits

$

1,101,390

100.0

%

$

1,027,650

$

1

 

$

950,424

100.0

%

$

973,306

100.0

%

$

989,314

100.0

%

 
Recap:
Noninterest-bearing demand

$

363,350

33.0

%

$

295,003

 

28.7

%

$

211,139

22.2

%

$

209,484

21.5

%

$

200,034

20.2

%

NOW & MMDA

 

229,730

20.9

%

 

192,950

 

18.8

%

 

136,356

14.3

%

 

117,450

12.1

%

 

123,477

12.5

%

Savings

 

61,631

5.6

%

 

68,244

 

6.6

%

 

64,659

6.8

%

 

67,060

6.9

%

 

63,978

6.5

%

TCDs of $250K and under

 

230,230

20.9

%

 

241,718

 

23.5

%

 

273,624

28.8

%

 

328,058

33.7

%

 

342,670

34.6

%

Core Deposits

 

884,941

80.3

%

 

797,915

 

77.6

%

 

685,778

72.2

%

 

722,052

74.2

%

 

730,159

73.8

%

 
TCDs of $250K over

 

146,911

13.3

%

 

139,197

 

13.5

%

 

154,108

16.2

%

 

158,009

16.2

%

 

165,910

16.8

%

Wholesale TCDs

 

69,538

6.3

%

 

90,538

 

8.8

%

 

110,538

11.6

%

 

93,245

9.6

%

 

93,245

9.4

%

Noncore Deposits

 

216,449

19.7

%

 

229,735

 

22.4

%

 

264,646

27.8

%

 

251,254

25.8

%

 

259,155

26.2

%

Total Deposits

$

1,101,390

100.0

%

$

1,027,650

 

100.0

%

$

950,424

100.0

%

$

973,306

100.0

%

$

989,314

100.0

%

SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10
(Dollars in thousands)
 
3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr.

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

Allowance for Loan Losses
Balance at beginning of period

$

12,283

 

$

11,034

 

$

10,596

 

$

9,978

 

$

10,019

 

Provision for loan losses

 

1,600

 

 

1,600

 

 

700

 

 

700

 

 

300

 

Charge-offs

 

(292

)

 

(359

)

 

(284

)

 

(94

)

 

(385

)

Recoveries

 

23

 

 

8

 

 

22

 

 

12

 

 

44

 

Balance at the end of period

$

13,614

 

$

12,283

 

$

11,034

 

$

10,596

 

$

9,978

 

 
Nonperforming Assets:¹
Over 90 days still accruing

$

200

 

$

-

 

$

-

 

$

-

 

$

-

 

Nonaccrual loans

 

3,911

 

 

4,189

 

 

6,901

 

 

8,030

 

 

5,123

 

Total nonperforming loans

 

4,111

 

 

4,189

 

 

6,901

 

 

8,030

 

 

5,123

 

 
Other real estate owned

 

-

 

 

-

 

 

364

 

 

362

 

 

11

 

Total nonperforming assets

$

4,111

 

$

4,189

 

$

7,265

 

$

8,392

 

$

5,134

 

 
Classified Assets:¹
Substandard

$

20,579

 

$

9,909

 

$

13,301

 

$

14,497

 

$

8,965

 

Doubtful

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Loss

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

Total classified loans

$

20,579

 

$

9,909

 

$

13,301

 

$

14,497

 

$

8,965

 

 
Other real estate owned

 

-

 

 

-

 

 

364

 

 

362

 

 

11

 

Total classified assets

$

20,579

 

$

9,909

 

$

13,665

 

$

14,859

 

$

8,976

 

 
Performing TDR loans:

$

1,073

 

$

1,073

 

$

508

 

$

592

 

$

1,040

 

 
Delinquent Loans:¹
Loans 30-89 days past due

$

714

 

$

721

 

$

2,172

 

$

43

 

$

285

 

90 days or more past due and still accruing

 

200

 

 

-

 

 

-

 

 

-

 

 

-

 

Nonaccrual

 

3,911

 

 

4,189

 

 

6,901

 

 

8,030

 

 

5,123

 

Total delinquent loans

$

4,825

 

$

4,910

 

$

9,073

 

$

8,073

 

$

5,408

 

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

 

0.10

%

 

0.14

%

 

0.11

%

 

0.03

%

 

0.15

%

Nonaccrual loans to loans receivable

 

0.39

%

 

0.42

%

 

0.74

%

 

0.89

%

 

0.57

%

Nonperforming loans to loans receivable

 

0.41

%

 

0.42

%

 

0.74

%

 

0.89

%

 

0.57

%

Nonperforming assets to total assets

 

0.29

%

 

0.31

%

 

0.60

%

 

0.72

%

 

0.44

%

Classified loans to loans receivable

 

2.03

%

 

0.99

%

 

1.43

%

 

1.60

%

 

0.99

%

Classified loans to Tier 1 and ALLL

 

12.13

%

 

6.00

%

 

8.27

%

 

9.14

%

 

5.78

%

Classified assets to total assets

 

1.47

%

 

0.74

%

 

1.14

%

 

1.28

%

 

0.77

%

Classified assets to Tier 1 and ALLL

 

12.13

%

 

6.00

%

 

8.50

%

 

9.36

%

 

5.78

%

ALLL to loans receivable

 

1.35

%

 

1.22

%

 

1.18

%

 

1.17

%

 

1.10

%

ALLL to loans receivable exc. SBA PPP loans

 

1.48

%

 

1.34

%

ALLL to nonaccrual loans

 

348.10

%

 

293.22

%

 

159.89

%

 

131.96

%

 

194.77

%

ALLL to nonperforming loans

 

331.16

%

 

293.22

%

 

159.89

%

 

131.96

%

 

194.77

%

ALLL to nonperforming assets

 

331.16

%

 

293.22

%

 

151.88

%

 

126.26

%

 

194.35

%

Texas ratio ³

 

2.42

%

 

2.54

%

 

4.52

%

 

5.29

%

 

3.31

%

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

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 
Leverage ratio
Company

N/A

 

N/A

 

 

11.76

%

 

11.98

%

 

13.17

%

 

12.59

%

 

12.14

%

Bank

5.00

%

4.00

%

 

11.72

%

 

11.94

%

 

13.12

%

 

12.55

%

 

12.10

%

Common equity tier 1 risk-based capital ratio
Company

N/A

 

N/A

 

 

15.24

%

 

15.23

%

 

14.82

%

 

14.96

%

 

14.71

%

Bank

6.50

%

7.00

%

 

15.20

%

 

15.18

%

 

14.77

%

 

14.91

%

 

14.66

%

Tier 1 risk-based capital ratio
Company

N/A

 

N/A

 

 

15.24

%

 

15.23

%

 

14.82

%

 

14.96

%

 

14.71

%

Bank

8.00

%

8.50

%

 

15.20

%

 

15.18

%

 

14.77

%

 

14.91

%

 

14.66

%

Total risk-based capital ratio
Company

N/A

 

N/A

 

 

16.50

%

 

16.48

%

 

16.01

%

 

16.13

%

 

15.80

%

Bank

10.00

%

10.50

%

 

16.45

%

 

16.43

%

 

15.95

%

 

16.08

%

 

15.75

%

Common equity/total assets

 

11.15

%

 

11.37

%

 

12.46

%

 

12.74

%

 

12.52

%

Common equity per share

$

15.23

 

$

14.92

 

$

14.63

 

$

14.52

 

$

14.28

 

 
MARGIN ANALYSIS (Unaudited) -Table 12
(Dollars in thousands)
 
Three Months Ended
September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019
Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield
Number of Days in the Period
INTEREST-EARNING ASSETS
Loans ¹

$

1,046,678

 

$

12,650

4.81

%

$

1,018,596

 

$

12,568

4.96

%

$

941,147

 

$

13,629

5.82

%

$

930,455

 

$

14,119

6.02

%

$

932,004

 

$

14,528

6.18

%

Investment securities²

 

90,450

 

 

471

2.07

%

 

91,401

 

 

546

2.40

%

 

94,375

 

 

581

2.48

%

 

96,005

 

 

621

2.57

%

 

98,866

 

 

650

2.61

%

Interest-earning deposits at the FRB and other banks

 

186,678

 

 

58

0.12

%

 

137,945

 

 

45

0

 

 

55,222

 

 

188

1.37

%

 

99,297

 

 

410

1.64

%

 

111,437

 

 

611

2.18

%

Other earning assets

 

8,196

 

 

80

3.88

%

 

8,195

 

 

93

4.56

%

 

8,194

 

 

122

5.99

%

 

8,194

 

 

152

7.36

%

 

8,194

 

 

145

7.02

%

Total interest-earning assets ²

 

1,332,002

 

 

13,259

3.96

%

 

1,256,137

 

 

13,252

4.24

%

 

1,098,938

 

 

14,520

5.31

%

 

1,133,951

 

 

15,302

5.35

%

 

1,150,501

 

 

15,934

5.49

%

Total interest-earning assets exc. SBA PPP loans²

 

1,239,609

 

 

12,657

4.06

%

 

1,193,346

 

 

12,775

4.31

%

 
NONINTEREST-EARNING ASSETS
Cash and due from banks

 

10,685

 

 

8,224

 

 

9,056

 

 

9,084

 

 

9,769

 

Other noninterest-earning assets

 

31,216

 

 

32,285

 

 

30,050

 

 

30,746

 

 

31,552

 

Total noninterest-earning assets

 

41,901

 

 

40,509

 

 

39,106

 

 

39,830

 

 

41,321

 

 
Less: Allowance for loan losses

 

(12,293

)

 

(10,931

)

 

(10,594

)

 

(9,969

)

 

(10,004

)

TOTAL ASSETS

$

1,361,610

 

$

1,285,715

 

$

1,127,450

 

$

1,163,812

 

$

1,181,818

 

 
INTEREST-BEARING DEPOSITS
Interest-bearing demand

$

11,248

 

$

4

0.14

%

$

13,634

 

$

5

0.15

%

$

12,041

 

$

5

0.17

%

$

10,176

 

$

5

0.19

%

$

8,453

 

$

5

0.23

%

Money market

 

200,878

 

 

404

0.80

%

 

163,332

 

 

374

0.92

%

 

116,550

 

 

401

1.38

%

 

113,444

 

 

433

1.51

%

 

130,079

 

 

596

1.82

%

Savings

 

67,880

 

 

154

0.90

%

 

66,389

 

 

176

1.07

%

 

66,955

 

 

251

1.51

%

 

66,232

 

 

284

1.70

%

 

55,995

 

 

283

2.01

%

Time deposits

 

452,950

 

 

1,790

1.57

%

 

509,447

 

 

2,613

2.06

%

 

555,784

 

 

3,297

2.39

%

 

594,658

 

 

3,753

2.50

%

 

630,044

 

 

4,051

2.55

%

Total interest-bearing deposits

 

732,956

 

 

2,352

1.28

%

 

752,802

 

 

3,168

1.69

%

 

751,330

 

 

3,954

2.12

%

 

784,510

 

 

4,475

2.26

%

 

824,571

 

 

4,935

2.37

%

 
Borrowings

 

147,149

 

 

206

0.56

%

 

115,613

 

 

174

0.61

%

 

9,874

 

 

27

1.10

%

 

10,209

 

 

42

1.63

%

 

10,000

 

 

42

1.67

%

Total interest-bearing liabilities

 

880,105

 

 

2,558

1.16

%

 

868,415

 

 

3,342

1.55

%

 

761,204

 

 

3,981

2.10

%

 

794,719

 

 

4,517

2.25

%

 

834,571

 

 

4,977

2.37

%

Total interest-bearing liabilities exc. SBA PPP loan funding

 

787,712

 

 

2,476

1.25

%

 

805,624

 

 

3,287

1.64

%

 
Noninterest-bearing deposits

 

313,370

 

 

249,909

 

 

199,721

 

 

205,449

 

 

187,740

 

Other liabilities

 

12,750

 

 

15,141

 

 

16,018

 

 

15,805

 

 

15,832

 

 
Stockholders' equity

 

155,385

 

 

152,250

 

 

150,507

 

 

147,839

 

 

143,675

 

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,361,610

 

$

1,285,715

 

$

1,127,450

 

$

1,163,812

 

$

1,181,818

 

 
Net interest income²

$

10,701

$

9,910

$

10,539

$

10,785

$

10,957

Net interest income exc. SBA PPP Loans²

$

10,181

$

9,488

 
Net interest spread

2.80

%

2.69

%

3.21

%

3.10

%

3.12

%

 
Effect of noninterest-bearing sources

0.40

%

0.48

%

0.65

%

0.67

%

0.66

%

 
Net interest margin²

3.20

%

3.17

%

3.86

%

3.77

%

3.78

%

Net interest margin exc. SBA PPP loans²

3.27

%

3.20

%

 
 
Cost of deposits

$

1,046,326

 

$

2,352

0.89

%

$

1,002,711

 

$

3,168

1.27

%

$

951,051

 

$

3,954

1.67

%

$

989,959

 

$

4,475

1.79

%

$

1,012,311

 

$

4,935

1.93

%

 
Cost of funds

$

1,193,475

 

$

2,558

0.85

%

$

1,118,324

 

$

3,342

1.20

%

$

960,925

 

$

3,981

1.67

%

$

1,000,168

 

$

4,517

1.79

%

$

1,022,311

 

$

4,977

1.93

%

Cost of funds exc. SBA ppp loan funding

$

1,101,082

 

$

2,476

0.89

%

$

1,055,533

 

$

3,287

1.25

%

 
1 Includes loans held-for-sale
² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate
 

COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13

(Dollars in thousands)

 

Three Months Ended

September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
 
Contractual yield

$

11,522

4.38

%

$

11,578

4.57

%

$

12,445

 

5.32

%

$

12,911

 

5.51

%

$

13,481

 

5.74

%

SBA discount accretion

 

615

0.23

%

 

662

0.26

%

 

1,190

 

0.51

%

 

1,195

 

0.51

%

 

1,058

 

0.45

%

Prepayment penalties & late fees

 

221

0.09

%

 

24

0.01

%

 

106

 

0.04

%

 

172

 

0.07

%

 

82

 

0.03

%

Amortization of net deferred costs

 

292

0.11

%

 

304

0.12

%

 

(112

)

(0.05

%)

 

(159

)

(0.07

%)

 

(93

)

(0.04

%)

As reported yield on loans

$

12,650

4.81

%

$

12,568

4.96

%

$

13,629

 

5.82

%

$

14,119

 

6.02

%

$

14,528

 

6.18

%

MARGIN ANALYSIS (Unaudited) - Table 14
(Dollars in thousands)
 
Nine Months Ended
September 30, 2020 September 30, 2019
Avg Balance Interest Yield Avg Balance Interest Yield
Number of Days in the Period
INTEREST-EARNING ASSETS
Loans ¹

$

1,002,303

 

$

38,847

5.18

%

$

927,415

 

$

43,854

6.32

%

SBA PPP Loans

 

51,876

 

 

1,079

2.78

%

 

-

 

 

-

Investment securities²

 

92,070

 

 

1,598

2.32

%

 

100,878

 

 

2,020

2.68

%

Interest-earning deposits at the FRB and other banks

 

126,835

 

 

291

0.31

%

 

94,951

 

 

1,628

2.29

%

Other earning assets

 

8,195

 

 

295

4.81

%

 

8,066

 

 

407

6.75

%

Total interest-earning assets ²

 

1,229,403

 

 

41,031

4.46

%

 

1,131,310

 

 

47,909

5.66

%

Total interest-earning assets exc. SBA PPP loans²

 

1,177,527

 

 

39,952

4.53

%

 
NONINTEREST-EARNING ASSETS
Cash and due from banks

 

9,327

 

 

11,214

 

Other noninterest-earning assets

 

31,124

 

 

30,697

 

Total noninterest-earning assets

 

40,451

 

 

41,911

 

 
Less: Allowance for loan losses

 

(11,277

)

 

(9,918

)

 
TOTAL ASSETS

$

1,258,577

 

$

1,163,303

 

 
INTEREST-BEARING DEPOSITS
Interest-bearing demand

$

12,303

 

$

14

0.15

%

$

8,643

 

$

16

0.25

%

Money market

 

160,402

 

 

1,179

0.98

%

 

148,506

 

 

2,084

1.88

%

Savings

 

67,078

 

 

581

1.16

%

 

38,486

 

 

582

2.02

%

Time deposits

 

505,867

 

 

7,700

2.03

%

 

619,531

 

 

11,333

2.45

%

Total interest-bearing deposits

 

745,650

 

 

9,474

1.70

%

 

815,166

 

 

14,015

2.30

%

 
Borrowings

 

91,084

 

 

407

0.60

%

 

10,017

 

 

124

1.66

%

Total interest-bearing liabilities

 

836,734

 

 

9,881

1.58

%

 

825,183

 

 

14,139

2.29

%

Total interest-bearing liabilities exc. SBA PPP loans

 

784,858

 

 

9,745

1.66

%

 
Noninterest-bearing deposits

 

254,549

 

 

184,804

 

Other Liabilities

 

14,571

 

 

14,335

 

 
Stockholders' equity

 

152,723

 

 

138,981

 

 
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

$

1,258,577

 

$

1,163,303

 

 
Net interest income²

$

31,150

$

33,770

Net interest income exc. SBA PPP loans²

$

30,207

 
Net interest spread

2.88

%

3.37

%

 
Effect of noninterest-bearing sources

0.50

%

0.62

%

 
Net interest margin²

3.38

%

3.99

%

Net interest margin exc. SBA PPP loans²

3.43

%