CBB Bancorp, Inc. Reports Second Quarter Financial Results
LOS ANGELES–(BUSINESS WIRE)–CBB Bancorp, Inc. (“CBB” or the “Company’) (OTCQX: CBBI), the holding company of Commonwealth Business Bank (the “Bank”), announced today net income for second quarter 2020 of $1.7 million, or $0.16 per diluted share, an increase of 2.5% compared to $1.6 million, or $0.16 per diluted share, in the prior quarter and a decrease of 52.6% compared to $3.5 million, or $0.33 per share, in the same period last year.
Ms. Kim commented, “The COVID-19 pandemic continues to have a negative economic impact in the communities we serve. We believe our contingency planning, strong capital and liquidity will carry us through these challenging times. All branches and the corporate office are open to serve our customers, while observing recommended health precautions. As an SBA lender, we have dedicated our full department resources on securing SBA loans for customers under the Paycheck Protection Program (“PPP”). To date, we have approved and funded approximately 1,200 PPP loans totaling $92 million.”
Overall Results
Net income for second quarter 2020 was impacted by lower net interest income, higher loan loss provision and lower compensation costs. The return on average assets for second quarter 2020 was 0.52% compared to 0.58% for first quarter 2020 and 1.19% for second quarter 2019. The return on average equity for second quarter 2020 was 4.36% compared to 4.31% for first quarter of 2020 and 10.06% for second quarter 2019. The efficiency ratio for second quarter 2020 was 66.02% compared to 73.28% for first quarter 2020 and 63.79% for second quarter 2019.
Net Interest Income and Margin:
Net Interest Income
Net interest income for second quarter 2020 was $9.9 million, a decrease of $628 thousand, or 6.0%, from first quarter 2020, and a decrease of $1.6 million, or 13.7%, from second quarter 2019. The decrease in net interest income was primarily driven by a decline in market interest rates. Our adjustable rate loans, which comprise approximately 46% of our loan portfolio, repriced downward immediately due to the rate cuts by the Federal Open Market Committee (“FOMC”). Time deposits, which comprised 46% of total deposits, are repricing lower, but at a much slower pace.
Net Interest Margin
Our net interest margin for second quarter 2020 was 3.17% compared to 3.86% for first quarter 2020 and 4.05% for second quarter 2019. The drastic reduction in interest rates by the FOMC caused our adjustable rate loan portfolio to immediately reprice lower, yet our time deposit dependent portfolio is lagging the loan portfolio repricing and will reprice lower as deposits reach their maturities. Nonetheless, there was a significant improvement in our cost of funds. Our cost of funds for second quarter 2020 was 1.20% compared to 1.67% for first quarter 2020 and 1.92% for second quarter 2019.
“Our net interest margin for the second quarter declined by 69 basis points compared to first quarter 2020 and declined by 88 basis points compared to second quarter 2019. However, we anticipate our net interest margin will improve slightly as our time deposits continue to reprice at lower rates” said Ms. Kim.
Provision for Loan Losses:
Our provision for loan losses for second quarter 2020 was $1.6 million, compared $700 thousand for first quarter 2020 and $900 thousand for second quarter 2019. Approximately $507 thousand of the second quarter provision was driven by an increase in qualitative factors, while $734 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 as to whether those borrowers who received payment deferments can resume regular payments when the deferment terms end under the CARES Act. See Table 10 for additional details and trends.
Noninterest Income:
Noninterest income for second quarter 2020 was $1.5 million compared to $1.7 million for first quarter 2020 and $3.0 million for second quarter 2019. The decrease in second quarter 2020 was due to lower gains on sale of SBA loans resulting from significantly lower sales volume. During the second quarter, the secondary market, into which we sell SBA loans, began exhibiting signs of investor concerns that the default risk was increasing due to the pandemic. As a result, the volume of loans sold during second quarter 2020 was $9.8 million, compared with $18.5 million for first quarter 2020, and $36.7 million for second quarter 2019.
Noninterest Expense:
Noninterest expense for second quarter 2020 was $7.5 million compared to $8.9 million for first quarter 2020 and $9.2 million for second quarter 2019. Salaries and employee benefits decreased by $1.1 million in the second quarter. Salaries and employee benefits decreased $644 thousand related to cost deferrals from PPP loan originations. Marketing expense decreased $710 thousand in second quarter compared to second quarter 2019 due to the cancellation of the Ladies Professional Golf Tournament in April 2020 for which the Bank is a sponsor.
Income Taxes:
The Company’s effective tax rate for second quarter 2020 was 27.0% compared to 37.0% for first quarter 2020 and 29.3% in second quarter 2019. The overall decrease in the annualized effective tax rate was primarily due to the effect of significantly higher permanent differences versus projected pre-tax income as defined in Internal Revenue Service regulations.
Balance Sheet:
Investment Securities:
Investment securities were $91.1 million at June 30, 2020, down $772 thousand from March 31, 2020 and down $8.7 million from June 30, 2019. The decreases were due to principal paydowns. There were no portfolio additions. The unrealized gains and losses in the investment portfolio at June 30, 2020 are estimated based on observable market data. The disruption in the securities market due to the pandemic could produce different results if such securities were sold.
Loans Receivable:
Loans receivable outstanding (including loans held for sale) at June 30, 2020 was $1.01 billion, an increase of $73.4 million, or 7.9%, from March 31, 2020, and an increase of $123.5 million, or 14.0% from June 30, 2019. We provided loan payment deferments to our commercial borrowers under the CARES Act. The total amount of loans with three months deferment was approximately $298.7 million or 29.7% of total loan portfolio. Of the $298.7 million in loans with payment deferments, approximately 90% of such loans have resumed regular payment status beginning in July. Based upon further due diligence on payment deferred borrowers, we have identified approximately $29.6 million of commercial borrowers that may require an additional three months of payment deferrals. This potential second extended deferment of $29.6 million represents 2.9% of our total loan portfolio. Our weighted average loan-to-value CRE loans secured by real estate was 69.7%. Excluding SBA loans, our weighted average loan-to-value CRE loans secured by real estate was 54.0%.
Allowance for Loan Losses and Asset Quality:
The allowance for loan losses at June 30, 2020 was $12.3 million, or 1.22% of portfolio loans, compared to $11.0 million, or 1.18% of portfolio loans, at March 31, 2020. Excluding PPP loans which are government guaranteed, the allowance for loan losses at June 30, 2020 was 1.34%. Non-performing loans and other real estate owned as of June 30, 2020 was $4.2 million, down from $7.3 million at March 31, 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 200%. See comments under “Provision for Loan Losses”, and Table 10 for additional details and trends regarding asset quality.
SBA Loans Held for Sale:
SBA loans held for sale at June 30, 2020 were $32.3 million, compared to $30.0 million at March 31, 2020 and $32.3 million at June 30, 2019. We continue to assess SBA loan sale premiums and plan to sell loans when it is advantageous to do so. However, due to the COVID-19 pandemic, loan sale premiums fluctuated and the volume of SBA loan sales declined significantly. See comments under “Noninterest Income”, and the Table 7 for additional SBA loan origination and sale data.
Deposits:
Deposits were $1.03 billion at June 30, 2020, up $77.2 million from March 31, 2020 and down $4.1 million from June 30, 2019. Noninterest-bearing demand deposits (DDAs) increased $83.7 million or 39.7% from March 31, 2020 and increased $92.3 million or 45.6% from June 30, 2019. DDAs were 28.7% of total deposits at June 30, 2020 compared to 22.2% at March 31, 2020 and 19.6% at June 30, 2019. NOW and MMDA increased $56.6 million or 41.5% from March 31, 2020 and increased $46.3 million or 31.6% from June 30, 2019. Time Deposits decreased $66.8 million or 12.4% from March 31, 2020 and decreased $162.9 million or 25.7% from June 30, 2019. Our overall funding strategy has been to place less reliance on time deposits to lower our funding costs. Our time deposits at June 30, 2020 were $471.5 million or 45.9% of total deposits, down from $538.3 million or 56.6% of total deposits at March 31, 2020 and down from $634.4 million or 61.5% of total deposits at June 30, 2019. Our cost of funds for second quarter 2020 was 1.20% compared to 1.67% in first quarter 2020 and 1.92% for second quarter 2019.
Borrowings:
Borrowings at June 30, 2020 consisted of $90.0 million of Federal Home Loan Bank of San Francisco (FHLB-SF) advances, up $5 million from March 31, 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 $59 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 $152.8 million at June 30, 2020, representing an increase of $3.0 million, or 2.0%, over stockholders’ equity of $149.8 million at March 31, 2020. Book value per share at quarter end was $14.92 compared with $14.63 at March 31, 2020, an increase of $0.29 per share or 2.0%.
All of our regulatory capital ratios increased at June 30, 2020 from their levels at March 31, 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 June 30, 2020 was 15.23% at the Company level and 15.18% 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.
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.
| 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, |
|
$ |
% |
||||||||||||||||||||||||
|
|
|
|
2020 |
|
|
|
2020 |
|
|
Change |
Change |
|
|
2019 |
|
|
Change |
Change |
|
|
2020 |
|
|
|
2019 |
|
|
Change |
Change |
||||||||||||||
| Interest income |
$ |
13,206 |
|
$ |
14,473 |
|
$ |
(1,267 |
) |
(8.8 |
%) |
$ |
16,296 |
|
$ |
(3,090 |
) |
(19.0 |
%) |
$ |
27,679 |
|
$ |
31,880 |
|
$ |
(4,201 |
) |
(13.2 |
%) |
|||||||||||||
| Interest expense |
|
3,342 |
|
|
3,981 |
|
|
(639 |
) |
(16.1 |
%) |
|
4,865 |
|
|
(1,523 |
) |
(31.3 |
%) |
|
7,323 |
|
|
9,162 |
|
|
(1,839 |
) |
(20.1 |
%) |
|||||||||||||
| Net interest income |
|
9,864 |
|
|
10,492 |
|
|
(628 |
) |
(6.0 |
%) |
|
11,431 |
|
|
(1,567 |
) |
(13.7 |
%) |
|
20,356 |
|
|
22,718 |
|
|
(2,362 |
) |
(10.4 |
%) |
|||||||||||||
| Provision for loan losses |
|
1,600 |
|
|
700 |
|
|
900 |
|
128.6 |
% |
|
300 |
|
|
1,300 |
|
433.3 |
% |
|
2,300 |
|
|
300 |
|
|
2,000 |
|
666.7 |
% |
|||||||||||||
| Net interest income after provision for loan losses |
|
8,264 |
|
|
9,792 |
|
|
(1,528 |
) |
(15.6 |
%) |
|
11,131 |
|
|
(2,867 |
) |
(25.8 |
%) |
|
18,056 |
|
|
22,418 |
|
|
(4,362 |
) |
(19.5 |
%) |
|||||||||||||
| Gain on sale of loans |
|
509 |
|
|
939 |
|
|
(430 |
) |
(45.8 |
%) |
|
2,109 |
|
|
(1,600 |
) |
(75.9 |
%) |
|
1,448 |
|
|
3,276 |
|
|
(1,828 |
) |
(55.8 |
%) |
|||||||||||||
| Gain (loss) on sale of OREO |
|
9 |
|
|
(6 |
) |
|
15 |
|
(250.0 |
%) |
|
(4 |
) |
|
13 |
|
325.0 |
% |
|
3 |
|
|
(14 |
) |
|
17 |
|
121.4 |
% |
|||||||||||||
| SBA servicing fee income, net |
|
738 |
|
|
372 |
|
|
366 |
|
98.4 |
% |
|
312 |
|
|
426 |
|
136.5 |
% |
|
1,110 |
|
|
815 |
|
|
295 |
|
36.2 |
% |
|||||||||||||
| Service charges and other income |
|
251 |
|
|
396 |
|
|
(145 |
) |
(36.6 |
%) |
|
577 |
|
|
(326 |
) |
(56.5 |
%) |
|
647 |
|
|
1,034 |
|
|
(387 |
) |
(37.4 |
%) |
|||||||||||||
| Noninterest income |
|
1,507 |
|
|
1,701 |
|
|
(194 |
) |
(11.4 |
%) |
|
2,994 |
|
|
(1,487 |
) |
(49.7 |
%) |
|
3,208 |
|
|
5,111 |
|
|
(1,903 |
) |
(37.2 |
%) |
|||||||||||||
| Salaries and employee benefits |
|
4,617 |
|
|
5,702 |
|
|
(1,085 |
) |
(19.0 |
%) |
|
5,467 |
|
|
(850 |
) |
(15.5 |
%) |
|
10,319 |
|
|
10,565 |
|
|
(246 |
) |
(2.3 |
%) |
|||||||||||||
| Occupancy and equipment |
|
943 |
|
|
946 |
|
|
(3 |
) |
(0.3 |
%) |
|
831 |
|
|
112 |
|
13.5 |
% |
|
1,889 |
|
|
1,663 |
|
|
226 |
|
13.6 |
% |
|||||||||||||
| Marketing expense |
|
279 |
|
|
458 |
|
|
(179 |
) |
(39.1 |
%) |
|
989 |
|
|
(710 |
) |
(71.8 |
%) |
|
737 |
|
|
1,509 |
|
|
(772 |
) |
(51.2 |
%) |
|||||||||||||
| Professional expense |
|
500 |
|
|
435 |
|
|
65 |
|
14.9 |
% |
|
574 |
|
|
(74 |
) |
(12.9 |
%) |
|
935 |
|
|
1,212 |
|
|
(277 |
) |
(22.9 |
%) |
|||||||||||||
| Other expenses |
|
1,168 |
|
|
1,394 |
|
|
(226 |
) |
(16.2 |
%) |
|
1,340 |
|
|
(172 |
) |
(12.8 |
%) |
|
2,562 |
|
|
2,616 |
|
|
(54 |
) |
(2.1 |
%) |
|||||||||||||
| Noninterest expense |
|
7,507 |
|
|
8,935 |
|
|
(1,428 |
) |
(16.0 |
%) |
|
9,201 |
|
|
(1,694 |
) |
(18.4 |
%) |
|
16,442 |
|
|
17,565 |
|
|
(1,123 |
) |
(6.4 |
%) |
|||||||||||||
| Income before income tax expense |
|
2,264 |
|
|
2,558 |
|
|
(294 |
) |
(11.5 |
%) |
|
4,924 |
|
|
(2,660 |
) |
(54.0 |
%) |
|
4,822 |
|
|
9,964 |
|
|
(5,142 |
) |
(51.6 |
%) |
|||||||||||||
| Income tax expense |
|
612 |
|
|
946 |
|
|
(334 |
) |
(35.3 |
%) |
|
1,441 |
|
|
(829 |
) |
(57.5 |
%) |
|
1,558 |
|
|
2,891 |
|
|
(1,333 |
) |
(46.1 |
%) |
|||||||||||||
| Net income |
$ |
1,652 |
|
$ |
1,612 |
|
$ |
40 |
|
2.5 |
% |
$ |
3,483 |
|
$ |
(1,831 |
) |
(52.6 |
%) |
$ |
3,264 |
|
$ |
7,073 |
|
$ |
(3,809 |
) |
(53.9 |
%) |
|||||||||||||
| Effective tax rate |
|
27.0 |
% |
|
37.0 |
% |
|
(10.0 |
%) |
(26.9 |
%) |
|
29.3 |
% |
|
(2.2 |
%) |
(7.6 |
%) |
|
32.3 |
% |
|
29.0 |
% |
|
3.3 |
% |
11.4 |
% |
|||||||||||||
| Outstanding number of shares |
|
10,237,310 |
|
|
10,237,310 |
|
|
– |
|
– |
|
|
10,140,760 |
|
|
96,550 |
|
1.0 |
% |
|
10,237,310 |
|
|
10,140,760 |
|
|
96,550 |
|
1.0 |
% |
|||||||||||||
| Weighted average shares for basic EPS |
|
10,237,310 |
|
|
10,224,146 |
|
|
13,164 |
|
0.1 |
% |
|
10,125,622 |
|
|
111,688 |
|
1.1 |
% |
|
10,230,728 |
|
|
10,113,986 |
|
|
116,742 |
|
1.2 |
% |
|||||||||||||
| Weighted average shares for diluted EPS |
|
10,276,637 |
|
|
10,327,730 |
|
|
(51,093 |
) |
(0.5 |
%) |
|
10,341,488 |
|
|
(64,851 |
) |
(0.6 |
%) |
|
10,302,184 |
|
|
10,350,725 |
|
|
(48,541 |
) |
(0.5 |
%) |
|||||||||||||
| Basic EPS |
$ |
0.16 |
|
$ |
0.16 |
|
|
– |
|
– |
|
$ |
0.34 |
|
$ |
(0.18 |
) |
(52.9 |
%) |
$ |
0.32 |
|
$ |
0.70 |
|
$ |
(0.38 |
) |
(54.3 |
%) |
|||||||||||||
| Diluted EPS |
$ |
0.16 |
|
$ |
0.16 |
|
|
– |
|
– |
|
$ |
0.33 |
|
$ |
(0.17 |
) |
(51.5 |
%) |
$ |
0.32 |
|
$ |
0.68 |
|
$ |
(0.36 |
) |
(52.9 |
%) |
|||||||||||||
| Return on average assets |
|
0.52 |
% |
|
0.58 |
% |
|
(0.06 |
%) |
(10.3 |
%) |
|
1.19 |
% |
|
(0.67 |
%) |
(56.3 |
%) |
|
0.54 |
% |
|
1.24 |
% |
|
(0.70 |
%) |
(56.45 |
%) |
|||||||||||||
| Return on average equity |
|
4.36 |
% |
|
4.31 |
% |
|
0.05 |
% |
1.2 |
% |
|
10.06 |
% |
|
(5.70 |
%) |
(56.7 |
%) |
|
4.34 |
% |
|
10.44 |
% |
|
(6.10 |
%) |
(58.43 |
%) |
|||||||||||||
| Efficiency ratio¹ |
|
66.02 |
% |
|
73.28 |
% |
|
(7.26 |
%) |
(9.9 |
%) |
|
63.79 |
% |
|
2.23 |
% |
3.5 |
% |
|
69.78 |
% |
|
63.12 |
% |
|
6.66 |
% |
10.55 |
% |
|||||||||||||
| Yield on interest-earning assets² |
|
4.24 |
% |
|
5.31 |
% |
|
(1.07 |
%) |
(20.2 |
%) |
|
5.76 |
% |
|
(1.52 |
%) |
(26.4 |
%) |
|
4.74 |
% |
|
5.75 |
% |
|
(1.01 |
%) |
(17.57 |
%) |
|||||||||||||
| Cost of funds |
|
1.20 |
% |
|
1.67 |
% |
|
(0.47 |
%) |
(28.1 |
%) |
|
1.92 |
% |
|
(0.72 |
%) |
(37.5 |
%) |
|
1.42 |
% |
|
1.84 |
% |
|
(0.42 |
%) |
(22.86 |
%) |
|||||||||||||
| Cost of funds exc. SBA PPP loan funding |
|
1.25 |
% |
|
1.45 |
% |
|||||||||||||||||||||||||||||||||||||
| Net interest margin² |
|
3.17 |
% |
|
3.86 |
% |
|
(0.69 |
%) |
(17.9 |
%) |
|
4.05 |
% |
|
(0.88 |
%) |
(21.7 |
%) |
|
3.49 |
% |
|
4.10 |
% |
|
(0.61 |
%) |
(14.92 |
%) |
|||||||||||||
| Net interest margin exc. SBA PPP loans² |
|
3.20 |
% |
|
3.51 |
% |
|||||||||||||||||||||||||||||||||||||
|
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) | |||||||||||||||||||||||
|
|
June 30, |
|
March 31, |
|
$ |
% |
|
June 30, |
|
$ |
% |
||||||||||||
|
|
|
2020 |
|
|
|
2020 |
|
|
Change |
Change |
|
|
2019 |
|
|
Change |
Change |
||||||
| ASSETS | |||||||||||||||||||||||
| Cash and due from banks |
$ |
9,043 |
|
$ |
7,804 |
|
$ |
1,239 |
|
15.9 |
% |
$ |
12,369 |
|
$ |
(3,326 |
) |
(26.9 |
%) |
||||
| Interest-earning deposits at the FRB and other banks |
|
179,519 |
|
|
113,880 |
|
|
65,639 |
|
57.6 |
% |
|
127,199 |
|
|
52,320 |
|
41.1 |
% |
||||
| Investment securities¹ |
|
91,091 |
|
|
91,863 |
|
|
(772 |
) |
(0.8 |
%) |
|
99,758 |
|
|
(8,667 |
) |
(8.7 |
%) |
||||
| Loans held-for-sale, at the lower of cost or fair value |
|
32,264 |
|
|
29,989 |
|
|
2,275 |
|
7.6 |
% |
|
46,875 |
|
|
(14,611 |
) |
(31.2 |
%) |
||||
| Loans receivable |
|
1,005,128 |
|
|
931,717 |
|
|
73,411 |
|
7.9 |
% |
|
881,614 |
|
|
123,514 |
|
14.0 |
% |
||||
| Allowance for loan losses |
|
(12,283 |
) |
|
(11,034 |
) |
|
(1,249 |
) |
(11.3 |
%) |
|
(10,019 |
) |
|
(2,264 |
) |
(22.6 |
%) |
||||
|
Loans receivable, net |
|
992,845 |
|
|
920,683 |
|
|
72,162 |
|
7.8 |
% |
|
871,595 |
|
|
121,250 |
|
13.9 |
% |
||||
|
OREO |
|
– |
|
|
364 |
|
|
(364 |
) |
(100.0 |
%) |
|
11 |
|
|
(11 |
) |
(100.0 |
%) |
||||
| Restricted stock investments |
|
8,196 |
|
|
8,194 |
|
|
2 |
|
0.0 |
% |
|
8,194 |
|
|
2 |
|
0.0 |
% |
||||
| Servicing assets |
|
8,944 |
|
|
9,203 |
|
|
(259 |
) |
(2.8 |
%) |
|
10,174 |
|
|
(1,230 |
) |
(12.1 |
%) |
||||
| Other assets |
|
21,383 |
|
|
20,144 |
|
|
1,239 |
|
6.2 |
% |
|
22,662 |
|
|
(1,279 |
) |
(5.6 |
%) |
||||
| Total assets |
$ |
1,343,285 |
|
$ |
1,202,124 |
|
$ |
141,161 |
|
11.7 |
% |
$ |
1,198,837 |
|
$ |
144,448 |
|
12.0 |
% |
||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
| Noninterest-bearing |
$ |
295,003 |
|
$ |
211,139 |
|
$ |
83,864 |
|
39.7 |
% |
$ |
202,657 |
|
$ |
92,346 |
|
45.6 |
% |
||||
| Interest-bearing |
|
732,647 |
|
|
739,285 |
|
|
(6,638 |
) |
(0.9 |
%) |
|
829,088 |
|
|
(96,441 |
) |
(11.6 |
%) |
||||
| Total deposits |
|
1,027,650 |
|
|
950,424 |
|
|
77,226 |
|
8.1 |
% |
|
1,031,745 |
|
|
(4,095 |
) |
(0.4 |
%) |
||||
| FHLB advances and other borrowing |
|
148,671 |
|
|
85,000 |
|
|
63,671 |
|
74.9 |
% |
|
10,000 |
|
|
138,671 |
|
1386.7 |
% |
||||
| Other liabilities |
|
14,208 |
|
|
16,895 |
|
|
(2,687 |
) |
(15.9 |
%) |
|
15,990 |
|
|
(1,782 |
) |
(11.1 |
%) |
||||
| Total liabilities |
|
1,190,529 |
|
|
1,052,319 |
|
|
138,210 |
|
13.1 |
% |
|
1,057,735 |
|
|
132,794 |
|
12.6 |
% |
||||
| Stockholders’ Equity |
|
152,756 |
|
|
149,805 |
|
|
2,951 |
|
2.0 |
% |
|
141,102 |
|
|
11,654 |
|
8.3 |
% |
||||
| TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY |
$ |
1,343,285 |
|
$ |
1,202,124 |
|
$ |
141,161 |
|
11.7 |
% |
$ |
1,198,837 |
|
$ |
144,448 |
|
12.0 |
% |
||||
| CAPITAL RATIOS | |||||||||||||||||||||||
| Leverage ratio | |||||||||||||||||||||||
| Company |
|
11.98 |
% |
|
13.17 |
% |
|
(1.19 |
%) |
(9.04 |
%) |
|
11.93 |
% |
|
0.05 |
% |
0.42 |
% |
||||
| Bank |
|
11.94 |
% |
|
13.12 |
% |
|
(1.18 |
%) |
(8.99 |
%) |
|
11.89 |
% |
|
0.05 |
% |
0.42 |
% |
||||
| Common equity tier 1 risk-based capital ratio | |||||||||||||||||||||||
| Company |
|
15.23 |
% |
|
14.82 |
% |
|
0.41 |
% |
2.77 |
% |
|
14.69 |
% |
|
0.54 |
% |
3.68 |
% |
||||
| Bank |
|
15.18 |
% |
|
14.77 |
% |
|
0.41 |
% |
2.78 |
% |
|
14.65 |
% |
|
0.53 |
% |
3.62 |
% |
||||
| Tier 1 risk-based capital ratio | |||||||||||||||||||||||
| Company |
|
15.23 |
% |
|
14.82 |
% |
|
0.41 |
% |
2.77 |
% |
|
14.69 |
% |
|
0.54 |
% |
3.68 |
% |
||||
| Bank |
|
15.18 |
% |
|
14.77 |
% |
|
0.41 |
% |
2.78 |
% |
|
14.65 |
% |
|
0.53 |
% |
3.62 |
% |
||||
| Total risk-based capital ratio | |||||||||||||||||||||||
| Company |
|
16.48 |
% |
|
16.01 |
% |
|
0.47 |
% |
2.94 |
% |
|
15.81 |
% |
|
0.67 |
% |
4.24 |
% |
||||
| Bank |
|
16.43 |
% |
|
15.95 |
% |
|
0.48 |
% |
3.01 |
% |
|
15.76 |
% |
|
0.67 |
% |
4.25 |
% |
||||
| Book value per share |
$ |
14.92 |
|
$ |
14.63 |
|
$ |
0.29 |
|
2.0 |
% |
$ |
13.91 |
|
$ |
1.01 |
|
7.2 |
% |
||||
| Loan-to-Deposit (LTD) ratio |
|
97.81 |
% |
|
98.03 |
% |
|
(0.22 |
%) |
(0.22 |
%) |
|
85.45 |
% |
|
12.36 |
% |
14.47 |
% |
||||
| Nonperforming assets |
|
4,189 |
|
|
7,265 |
|
|
(3,076 |
) |
(42.3 |
%) |
|
2,532 |
|
$ |
1,657 |
|
65.44 |
% |
||||
| Nonperforming assets as a % of loans receivable |
|
0.42 |
% |
|
0.74 |
% |
|
(0.32 |
%) |
(43.24 |
%) |
|
0.29 |
% |
|
0.13 |
% |
44.83 |
% |
||||
| ALLL as a % of loans receivable |
|
1.22 |
% |
|
1.18 |
% |
|
0.04 |
% |
3.39 |
% |
|
1.14 |
% |
|
0.08 |
% |
7.02 |
% |
||||
| ALLL as a % of loans receivable exc. SBA PPP loans |
|
1.34 |
% |
||||||||||||||||||||
| 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, |
|||||||||||||||
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
2019 |
|
|
2019 |
|
|||||
| Interest income |
$ |
13,206 |
|
$ |
14,473 |
|
$ |
15,254 |
|
$ |
15,888 |
|
$ |
16,296 |
|
||||
| Interest expense |
|
3,342 |
|
|
3,981 |
|
|
4,517 |
|
|
4,977 |
|
|
4,865 |
|
||||
| Net interest income |
|
9,864 |
|
|
10,492 |
|
|
10,737 |
|
|
10,911 |
|
|
11,431 |
|
||||
| Provision for loan losses |
|
1,600 |
|
|
700 |
|
|
700 |
|
|
300 |
|
|
300 |
|
||||
| Net interest income after provision for loan losses |
|
8,264 |
|
|
9,792 |
|
|
10,037 |
|
|
10,611 |
|
|
11,131 |
|
||||
| Gain on sale of loans |
|
509 |
|
|
939 |
|
|
1,481 |
|
|
1,396 |
|
|
2,109 |
|
||||
| Gain (loss) on sale of OREO |
|
9 |
|
|
(6 |
) |
|
– |
|
|
– |
|
|
(4 |
) |
||||
| SBA servicing fee income, net |
|
738 |
|
|
372 |
|
|
413 |
|
|
523 |
|
|
312 |
|
||||
| SBA servicing right impairment |
|
– |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
|
||||
| Service charges and other income |
|
251 |
|
|
396 |
|
|
416 |
|
|
505 |
|
|
577 |
|
||||
| Noninterest income |
|
1,507 |
|
|
1,701 |
|
|
2,310 |
|
|
2,424 |
|
|
2,994 |
|
||||
| Salaries and employee benefits |
|
4,617 |
|
|
5,702 |
|
|
5,355 |
|
|
5,132 |
|
|
5,467 |
|
||||
| Occupancy and equipment |
|
943 |
|
|
946 |
|
|
978 |
|
|
869 |
|
|
831 |
|
||||
| Marketing expense |
|
279 |
|
|
458 |
|
|
119 |
|
|
302 |
|
|
989 |
|
||||
| Professional expense |
|
500 |
|
|
435 |
|
|
417 |
|
|
691 |
|
|
574 |
|
||||
| Other expenses |
|
1,168 |
|
|
1,394 |
|
|
1,487 |
|
|
1,203 |
|
|
1,340 |
|
||||
| Noninterest expense |
|
7,507 |
|
|
8,935 |
|
|
8,356 |
|
|
8,197 |
|
|
9,201 |
|
||||
| Income before income tax expense |
|
2,264 |
|
|
2,558 |
|
|
3,991 |
|
|
4,838 |
|
|
4,924 |
|
||||
| Income tax expense |
|
612 |
|
|
946 |
|
|
1,137 |
|
|
1,421 |
|
|
1,441 |
|
||||
| Net income |
$ |
1,652 |
|
$ |
1,612 |
|
$ |
2,854 |
|
$ |
3,417 |
|
$ |
3,483 |
|
||||
| Effective tax rate |
|
27.0 |
% |
|
37.0 |
% |
|
28.5 |
% |
|
29.4 |
% |
|
29.3 |
% |
||||
| Outstanding number of shares |
|
10,237,310 |
|
|
10,237,310 |
|
|
10,197,380 |
|
|
10,170,760 |
|
|
10,140,760 |
|
||||
| Weighted average shares for basic EPS |
|
10,237,310 |
|
|
10,224,146 |
|
|
10,188,700 |
|
|
10,141,086 |
|
|
10,125,622 |
|
||||
| Weighted average shares for diluted EPS |
|
10,276,637 |
|
|
10,327,730 |
|
|
10,336,793 |
|
|
10,321,937 |
|
|
10,341,488 |
|
||||
| Basic EPS |
$ |
0.16 |
|
$ |
0.16 |
|
$ |
0.28 |
|
$ |
0.34 |
|
$ |
0.34 |
|
||||
| Diluted EPS |
$ |
0.16 |
|
$ |
0.16 |
|
$ |
0.28 |
|
$ |
0.33 |
|
$ |
0.33 |
|
||||
Contacts
Long T. Huynh, EVP & CFO
(323) 988-3010
Longh@cbb-bank.com