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CBB Bancorp, Inc. Reports Second Quarter 2024 Financial Results

CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank, doing business as “CBB Bank” (the "Bank"), announced today net income 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

%

 

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