CBB Bancorp, Inc. Reports 2019 Third Quarter Results

LOS ANGELES–(BUSINESS WIRE)–CBB Bancorp, Inc. (“CBB” or the “Company”) (OTCQX: CBBI), the holding company of Commonwealth Business Bank (the “Bank”), today announced net income for the third quarter of 2019 of $3.4 million, or $0.33 per diluted share, a decrease of 12.2% compared to $4.3 million, or $0.42 per diluted share, in the same period last year. Earnings per share and per share data have been adjusted to reflect the impact of a 10% stock dividend that was declared on October 2, 2018.

Additionally, CBB reported net income for the nine months ended September 30, 2019 of $10.5 million, or $1.01 per diluted share, a decrease of 19.3% from the $13.0 million, or $1.25 per diluted share, for the same period in 2018.

Third quarter 2019 net income resulted in returns on average assets (“ROAA”) and average equity (“ROAE”) of 1.15% and 9.44%, respectively, both of which measures were down from the same quarter in 2018. On a nine-month year-to-date basis, ROAA and ROAE were 1.21% and 10.09%, respectively.

Joanne Kim, President and CEO, commented, “We have been diligently working to reduce our cost of funds to offset the impact of lower market interest rates. Our compliance and other corporate overhead costs have stabilized and we are focused on high quality loan production and net interest margin.”

Additionally, Ms. Kim commented, “Our credit quality continues to be strong. We continue originate high quality loans while we monitor our loan portfolio as we prepare for future uncertainties.”

Net Interest Income and Margin:

Net Interest Income

Net interest income for the quarter ended September 30, 2019 was $10.9 million, a decrease of $1.1 million, or 8.9%, from the same period last year driven primarily by the increase in interest cost on deposits during the current quarter. For the nine months ended September 30, 2019, net interest income was $33.6 million, a decrease of $0.3 million, or 0.9%, from the corresponding period last year. The year-to-date decrease in net interest income was driven by higher costs of deposits which were substantially offset by higher interest income on loans. As market interest rates have declined over the recent quarters, competition for loans has increased as borrowers seek lower fixed-rate loans. We have managed to increase the contractual rate on loans by 17 basis points on a year-to-date basis, however the impact of re-pricing deposits lower generally lags the direction of market interest rates and is only beginning.

Net Interest Margin

The net interest margin for third quarter 2019 of 3.78% was lower than the net interest margin of 4.29% in the same period last year. For the nine months ended September 30, 2019, the net interest margin was 3.99%, compared to 4.30% for the corresponding period in 2018. While our yield on interest-earning assets increased 21 basis points, our cost of funds increased 60 basis points. Third quarter and nine-month year-to-date results were primarily affected by higher interest expense on deposits.

Provision for Loan Losses:

The provision for loan losses for the quarter and nine months ended September 30, 2019 was $300 thousand and $600 thousand, respectively, compared with $400 thousand and $1.2 million, respectively, for the corresponding periods last year. Non-performing assets as of September 30, 2019 were $5.1 million, compared with $439 thousand for the corresponding period last year. The provisions for loan losses for the quarter and nine-month periods ended September 30, 2019 reflect a decrease in specific reserves on classified loans, which was partially offset by qualitative factor increases.

Non-Interest Income:

Quarterly non-interest income for the quarter and nine months ended September 30, 2019 was $2.4 million and $7.5 million, respectively, compared to $2.2 million and $9.1 million, respectively, for the corresponding periods last year. The decline in the 2019 nine-month period was primarily due to a lower volume of SBA loan sales. For the nine months ended September 30, 2019, we sold $86.4 million of SBA loans, with net premiums received of $7.3 million, compared to sales of $104.7 million, with net premiums received of $9.6 million for the corresponding period last year.

Non-Interest Expense:

Non-interest expense for the quarter ended September 30, 2019 was $8.2 million, compared to $8.0 million in the corresponding period last year, an increase of $174 thousand, or 2.2%. For the nine months ended September 30, 2019, non-interest expense was $25.8 million, compared to $23.6 million for the corresponding period last year, an increase of $2.1 million, or 9.0%. Staffing additions primarily related to compliance and corporate administration, along with professional consulting expenses related to compliance and marketing costs attributable to our sponsorship of the LPGA LA Open were the primary contributors to increased non-interest expense.

Income Taxes:

The Company’s effective tax rate for the quarter ended September 30, 2019 was approximately 29.4%, up from 24.6% for the third quarter of 2018. The lower effective rate in the third quarter of 2018 was due to final adjustments made related to the final filing of the 2017 tax returns.

The effective income tax rate for the nine months ended September 30, 2019 was 29.13%, compared to 28.39% for the same period last year. On an ongoing basis, the company’s effective income tax rate (federal and state) is anticipated to be approximately 29.5%.

Balance Sheet:

At September 30, 2019, the Company had total assets of $1.16 billion, a decrease of $39.1 million, or 3.3%, from $1.20 billion at June 30, 2019, and a decrease of $44.6 million, or 3.7%, from $1.20 billion at September 30, 2018. We had nominal loan growth for the 12-month period as we managed certain concentration ratios. We also used our liquid assets to enable the run-off of high-costing deposits.

Investment Securities:

Investment securities totaled $97.1 million at the end of the current quarter, a decrease of $2.6 million, or 2.6%, compared to $99.8 million at the end of the prior quarter, and a decrease of $10.3 million, or 9.6%, compared to $107.4 million at the end of the year ago quarter. The year-over-year decrease in investment securities was due to principal paydowns.

Loans Receivable:

At September 30, 2019, loans receivable, excluding loans held-for-sale, were $905.0 million, an increase of $23.4 million, or 2.7%, from $881.6 million at June 30, 2019, and an increase of $8.4 million, or 0.9%, from $896.6 million at September 30, 2018. During the third quarter of 2019, total new loan production was $87.4 million, compared to $98.7 million for the prior quarter and $136.8 million for the same quarter last year. For the nine months ended September 30, 2019, total new loan production was $245.9 million, compared to $408.1 million for the same period last year.

During the current quarter, we sold $25.3 million of SBA loans, compared to sales of $36.7 million in the prior quarter and sales of $34.7 million in the year ago quarter. The weighted average premium from the sale of SBA loans for the current quarter was 8.7%, compared to 8.8% in the prior quarter and 8.1% in the year ago quarter. Our SBA loan production was lower for the 12-month period as we managed certain industry concentrations. This, in turn, reduced our loan sales.

Deposits:

Total deposits were $989.3 million at the end of the current quarter, a decrease of $42.4 million, or 4.1%, compared to $1.03 billion at the end of the prior quarter, and a decrease of $67.8 million, or 6.4%, compared to $1.06 billion at the end of the year ago quarter. The decrease was primarily due to our decision to let high rate CDs run off to reduce our cost of funds. Noninterest-bearing deposits decreased by $2.6 million, or 1.3%, to $200.0 million at the end of the current quarter from $202.7 million at the end of the prior quarter and decreased by $21.9 million, or 9.9%, compared to $222.0 million at the end of the year ago quarter. Noninterest-bearing deposits to total deposits were 20.2%, 19.6%, and 21.0% at the end of the current, prior, and year ago quarters, respectively.

ASSET QUALITY:

Loans 30 to 89 days past due and on accrual status at September 30, 2019 were $285 thousand, a decrease of $5.5 million from $5.8 million at June 30, 2019, and an increase of $54 thousand from $231 thousand at September 30, 2018. No loans were 90 days or more past due and still accruing at September 30, 2019, June 30, 2019, or September 30, 2018. Nonaccrual loans at September 30, 2019 were $5.1 million, or 0.57% of loans receivable, an increase of $2.6 million, compared to $2.5 million, or 0.29% of loans receivable at June 30, 2019, and an increase of $4.7 million from $0.4 million, or 0.05% of loans receivable at September 30, 2018.

Classified loans at September 30, 2019 were $8.9 million, or 0.99% of loans receivable, a decrease of $4.7 million, or 34.6%, compared to $13.7 million, or 1.55% of loans receivable at June 30, 2019, and a decrease of $2.9 million, or 17.6%, compared to $16.6 million, or 1.85% of loans receivable at September 30, 2018.

The allowance for loan losses at September 30, 2019 was $10.0 million, or 1.10% of loans receivable, compared to $10.0 million, or 1.14% of loans receivable at June 30, 2019, and $9.8 million, or 1.09%, of loans receivable at September 30, 2018. The ratio of allowance for loan losses to nonperforming loans was 194.8%, 397.4%, and 2,235.5% at September 30, 2019, June 30, 2019, and September 30, 2018, respectively.

CAPITAL:

At September 30, 2019, CBB and the Bank continued to exceed all minimum regulatory capital requirements and maintained capital conservation buffers in excess of the minimum required to avoid limitations on capital distributions, including dividend payments, and certain discretionary bonus payments. The fully phased-in capital conservation buffer requirement was 2.500% and 1.875% as of January 1, 2019 and December 31, 2018, respectively. The minimum capital conservation buffer increased an additional 0.625% at the beginning of 2019, reaching the fully phased-in minimum of 2.500%. As a result, effective January 1, 2019, bank holding companies and banks are required to maintain common equity tier 1, tier 1 risk-based and total risk-based capital ratios that are at least 7.00%, 8.50%, and 10.50%, respectively, to avoid bank regulatory limitations on capital distributions and discretionary bonus payments executive officers. Refer to Table 11 for additional information related to regulatory capital ratios.

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, Orange, and Dallas Counties; two SBA regional offices in Los Angeles and Dallas counties; and five loan production offices in the states of 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 guarantees 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; unanticipated or significant increases in loan losses; 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, 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 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 other 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 contain 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

 

Nine Months Ended

September 30,

 

June 30,

 

$

%

 

September 30,

 

$

%

 

September 30,

 

September 30,

 

$

%

2019

 

2019

 

Change

Change

 

2018

 

Change

Change

 

2019

 

2018

 

Change

Change

 
Interest income

$

15,888

 

$

16,296

 

$

(408

)

(2.5

%)

$

15,661

 

$

227

 

1.4

%

$

47,768

 

$

43,091

 

$

4,677

 

10.9

%

Interest expense

 

4,977

 

 

4,865

 

 

112

 

2.3

%

 

3,678

 

 

1,299

 

35.3

%

 

14,139

 

 

9,153

 

 

4,986

 

54.5

%

Net interest income

 

10,911

 

 

11,431

 

 

(520

)

(4.5

%)

 

11,983

 

 

(1,072

)

(8.9

%)

 

33,629

 

 

33,938

 

 

(309

)

(0.9

%)

 
Provision for loan losses

 

300

 

 

300

 

 

 

 

 

400

 

 

(100

)

(25.0

%)

 

600

 

 

1,200

 

 

(600

)

(50.0

%)

Net interest income after provision for loan losses

 

10,611

 

 

11,131

 

 

(520

)

(4.7

%)

 

11,583

 

 

(972

)

(8.4

%)

 

33,029

 

 

32,738

 

 

291

 

0.9

%

 
Gain on sale of loans

 

1,396

 

 

2,109

 

 

(713

)

(33.8

%)

 

1,937

 

 

(541

)

(27.9

%)

 

4,672

 

 

6,851

 

 

(2,179

)

(31.8

%)

Gain (loss) on sale of OREO

 

 

 

(4

)

 

4

 

100.0

%

 

(43

)

 

43

 

100.0

%

 

(14

)

 

(43

)

 

29

 

67.4

%

SBA servicing fee income, net

 

523

 

 

312

 

 

211

 

67.6

%

 

304

 

 

219

 

72.0

%

 

1,338

 

 

1,107

 

 

231

 

20.9

%

SBA servicing right impairment

 

 

 

 

 

 

 

 

(534

)

 

534

 

100.0

%

 

 

 

(534

)

 

534

 

100.0

%

Service charges and other income

 

505

 

 

577

 

 

(72

)

(12.5

%)

 

573

 

 

(68

)

(11.9

%)

 

1,539

 

 

1,672

 

 

(133

)

(8.0

%)

Noninterest income

 

2,424

 

 

2,994

 

 

(570

)

(19.0

%)

 

2,237

 

 

187

 

8.4

%

 

7,535

 

 

9,053

 

 

(1,518

)

(16.8

%)

 
Salaries and employee benefits

 

5,132

 

 

5,467

 

 

(335

)

(6.1

%)

 

4,956

 

 

176

 

3.6

%

 

15,697

 

 

14,617

 

 

1,080

 

7.4

%

Occupancy and equipment

 

869

 

 

831

 

 

38

 

4.6

%

 

886

 

 

(17

)

(1.9

%)

 

2,532

 

 

2,559

 

 

(27

)

(1.1

%)

Marketing expense

 

302

 

 

989

 

 

(687

)

(69.5

%)

 

342

 

 

(40

)

(11.7

%)

 

1,811

 

 

1,044

 

 

767

 

73.5

%

Professional expense

 

691

 

 

574

 

 

117

 

20.4

%

 

537

 

 

154

 

28.7

%

 

1,903

 

 

1,398

 

 

505

 

36.1

%

Other expenses

 

1,203

 

 

1,340

 

 

(137

)

(10.2

%)

 

1,302

 

 

(99

)

(7.6

%)

 

3,819

 

 

4,015

 

 

(196

)

(4.9

%)

Noninterest expense

 

8,197

 

 

9,201

 

 

(1,004

)

(10.9

%)

 

8,023

 

 

174

 

2.2

%

 

25,762

 

 

23,633

 

 

2,129

 

9.0

%

 
Income before income tax expense

 

4,838

 

 

4,924

 

 

(86

)

(1.7

%)

 

5,797

 

 

(959

)

(16.5

%)

 

14,802

 

 

18,158

 

 

(3,356

)

(18.5

%)

 
Income tax expense

 

1,421

 

 

1,441

 

 

(20

)

(1.4

%)

 

1,426

 

 

(5

)

(0.4

%)

 

4,312

 

 

5,155

 

 

(843

)

(16.4

%)

 
Net income

$

3,417

 

$

3,483

 

$

(66

)

(1.9

%)

$

4,371

 

$

(954

)

(21.8

%)

$

10,490

 

$

13,003

 

$

(2,513

)

(19.3

%)

 
Effective tax rate

 

29.4

%

 

29.3

%

 

0.1

%

0.4

%

 

24.6

%

 

4.8

%

19.4

%

 

29.1

%

 

28.4

%

 

0.7

%

2.6

%

 
Outstanding number of shares

 

10,170,760

 

 

10,140,760

 

 

30,000

 

0.3

%

 

10,091,294

 

 

79,466

 

0.8

%

 

10,170,760

 

 

10,091,294

 

 

79,466

 

0.8

%

 
Weighted average shares for basic EPS

 

10,141,086

 

 

10,125,622

 

 

15,464

 

0.2

%

 

10,038,095

 

 

102,991

 

1.0

%

 

10,123,118

 

 

10,035,602

 

 

87,516

 

0.9

%

Weighted average shares for diluted EPS

 

10,321,937

 

 

10,341,488

 

 

(19,551

)

(0.2

%)

 

10,389,263

 

 

(67,326

)

(0.6

%)

 

10,341,228

 

 

10,425,985

 

 

(84,757

)

(0.8

%)

 
Basic EPS

$

0.34

 

$

0.34

 

$

 

 

$

0.44

 

$

(0.10

)

(22.7

%)

$

1.04

 

$

1.30

 

$

(0.26

)

(20.0

%)

Diluted EPS

$

0.33

 

$

0.33

 

$

 

 

$

0.42

 

$

(0.09

)

(21.4

%)

$

1.01

 

$

1.25

 

$

(0.24

)

(19.2

%)

 
Return on average assets

 

1.15

%

 

1.19

%

 

(0.04

%)

(3.36

%)

 

1.51

%

 

(0.36

%)

(23.84

%)

 

1.21

%

 

1.59

%

 

(0.38

%)

(23.90

%)

Return on average equity

 

9.44

%

 

10.06

%

 

(0.62

%)

(6.16

%)

 

13.77

%

 

(4.33

%)

(31.45

%)

 

10.09

%

 

14.33

%

 

(4.24

%)

(29.59

%)

 
Efficiency ratio¹

 

61.47

%

 

63.79

%

 

(2.32

%)

(3.64

%)

 

56.42

%

 

5.05

%

8.95

%

 

62.58

%

 

54.97

%

 

7.61

%

13.85

%

Yield on interest-earning assets²

 

5.49

%

 

5.76

%

 

(0.27

%)

(4.69

%)

 

5.60

%

 

(0.11

%)

(1.96

%)

 

5.66

%

 

5.45

%

 

0.21

%

3.85

%

Cost of funds

 

1.93

%

 

1.92

%

 

0.01

%

0.52

%

 

1.44

%

 

0.49

%

34.03

%

 

1.87

%

 

1.27

%

 

0.60

%

47.24

%

Net interest margin²

 

3.78

%

 

4.05

%

 

(0.27

%)

(6.67

%)

 

4.29

%

 

(0.51

%)

(11.89

%)

 

3.99

%

 

4.30

%

 

(0.31

%)

(7.21

%)

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,

 

$

%

2019

 

2019

 

Change

Change

 

2018

 

Change

Change

ASSETS
Cash and due from banks

$

12,448

 

$

12,369

 

$

79

 

0.6

%

$

12,228

 

$

220

 

1.8

%

Interest-earning deposits at the FRB and other banks

 

72,907

 

 

127,199

 

 

(54,292

)

(42.7

%)

 

119,246

 

 

(46,339

)

(38.9

%)

Investment securities¹

 

97,141

 

 

99,758

 

 

(2,617

)

(2.6

%)

 

107,406

 

 

(10,265

)

(9.6

%)

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

 

42,132

 

 

46,875

 

 

(4,743

)

(10.1

%)

 

38,007

 

 

4,125

 

10.9

%

 
Loans receivable

 

905,004

 

 

881,614

 

 

23,390

 

2.7

%

 

896,580

 

 

8,424

 

0.9

%

Allowance for loan losses

 

(9,978

)

 

(10,019

)

 

41

 

0.4

%

 

(9,814

)

 

(164

)

(1.7

%)

Loans receivable, net

 

895,026

 

 

871,595

 

 

23,431

 

2.7

%

 

886,766

 

 

8,260

 

0.9

%

 
OREO

 

11

 

 

11

 

 

 

 

 

25

 

 

(14

)

(56.0

%)

Restricted stock investments

 

8,194

 

 

8,194

 

 

 

 

 

6,879

 

 

1,315

 

19.1

%

Servicing assets

 

9,953

 

 

10,174

 

 

(221

)

(2.2

%)

 

11,403

 

 

(1,450

)

(12.7

%)

Other assets

 

21,885

 

 

22,662

 

 

(777

)

(3.4

%)

 

22,346

 

 

(461

)

(2.1

%)

Total assets

$

1,159,697

 

$

1,198,837

 

$

(39,140

)

(3.3

%)

$

1,204,306

 

$

(44,609

)

(3.7

%)

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Noninterest-bearing

$

200,034

 

$

202,657

 

$

(2,623

)

(1.3

%)

$

222,018

 

$

(21,984

)

(9.9

%)

Interest-bearing

 

789,280

 

 

829,088

 

 

(39,808

)

(4.8

%)

 

835,110

 

 

(45,830

)

(5.5

%)

Total deposits

 

989,314

 

 

1,031,745

 

 

(42,431

)

(4.1

%)

 

1,057,128

 

 

(67,814

)

(6.4

%)

 
FHLB advances

 

10,000

 

 

10,000

 

 

 

 

 

10,000

 

 

 

 

Other liabilities

 

15,164

 

 

15,990

 

 

(826

)

(5.2

%)

 

9,585

 

 

5,579

 

58.2

%

Total liabilities

 

1,014,478

 

 

1,057,735

 

 

(43,257

)

(4.1

%)

 

1,076,713

 

 

(62,235

)

(5.8

%)

 
Stockholders’ Equity

 

145,219

 

 

141,102

 

 

4,117

 

2.9

%

 

127,593

 

 

17,626

 

13.8

%

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

$

1,159,697

 

$

1,198,837

 

$

(39,140

)

(3.3

%)

$

1,204,306

 

$

(44,609

)

(3.7

%)

 
CAPITAL RATIOS
Leverage ratio
Company

 

12.14

%

 

11.93

%

 

0.21

%

1.76

%

 

11.19

%

 

0.95

%

8.49

%

Bank

 

12.10

%

 

11.89

%

 

0.21

%

1.77

%

 

11.14

%

 

0.96

%

8.62

%

Common equity tier 1 risk-based capital ratio
Company

 

14.71

%

 

14.69

%

 

0.02

%

0.14

%

 

13.47

%

 

1.24

%

9.21

%

Bank

 

14.66

%

 

14.65

%

 

0.01

%

0.07

%

 

13.42

%

 

1.24

%

9.24

%

Tier 1 risk-based capital ratio
Company

 

14.71

%

 

14.69

%

 

0.02

%

0.14

%

 

13.47

%

 

1.24

%

9.21

%

Bank

 

14.66

%

 

14.65

%

 

0.01

%

0.07

%

 

13.42

%

 

1.24

%

9.24

%

Total risk-based capital ratio
Company

 

15.80

%

 

15.81

%

 

(0.01

%)

(0.06

%)

 

14.61

%

 

1.19

%

8.15

%

Bank

 

15.75

%

 

15.76

%

 

(0.01

%)

(0.06

%)

 

14.56

%

 

1.19

%

8.17

%

Book value per share

$

14.28

 

$

13.91

 

$

0.37

 

2.7

%

$

12.64

 

$

1.64

 

13.0

%

Loan-to-Deposit (LTD) ratio

 

91.48

%

 

85.45

%

 

6.03

%

7.06

%

 

84.81

%

 

6.67

%

7.86

%

Nonperforming assets

 

5,134

 

 

2,532

 

 

2,602

 

102.8

%

 

464

 

$

4,670

 

1006.47

%

Nonperforming assets as a % of loans receivable

 

0.57

%

 

0.29

%

 

0.28

%

96.55

%

 

0.05

%

 

0.52

%

1040.00

%

ALLL as a % of loans receivable

 

1.10

%

 

1.14

%

 

(0.04

%)

(3.51

%)

 

1.09

%

 

0.01

%

0.92

%

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,

2019

 

2019

 

2019

 

2018

 

2018

 
Interest income

$

15,888

 

$

16,296

 

$

15,584

 

$

16,256

 

$

15,661

 

Interest expense

 

4,977

 

 

4,865

 

 

4,297

 

 

4,035

 

 

3,678

 

Net interest income

 

10,911

 

 

11,431

 

 

11,287

 

 

12,221

 

 

11,983

 

 
Provision for loan losses

 

300

 

 

300

 

 

 

 

170

 

 

400

 

Net interest income after provision for loan losses

 

10,611

 

 

11,131

 

 

11,287

 

 

12,051

 

 

11,583

 

 
Gain on sale of loans

 

1,396

 

 

2,109

 

 

1,167

 

 

996

 

 

1,937

 

Gain (loss) on sale of OREO

 

 

 

(4

)

 

(10

)

 

 

 

(43

)

SBA servicing fee income, net

 

523

 

 

312

 

 

503

 

 

179

 

 

304

 

SBA servicing right impairment

 

 

 

 

 

 

 

(374

)

 

(534

)

Service charges and other income

 

505

 

 

577

 

 

457

 

 

484

 

 

573

 

Noninterest income

 

2,424

 

 

2,994

 

 

2,117

 

 

1,285

 

 

2,237

 

 
Salaries and employee benefits

 

5,132

 

 

5,467

 

 

5,098

 

 

4,988

 

 

4,956

 

Occupancy and equipment

 

869

 

 

831

 

 

832

 

 

886

 

 

886

 

Marketing expense

 

302

 

 

989

 

 

520

 

 

433

 

 

342

 

Professional expense

 

691

 

 

574

 

 

638

 

 

1,195

 

 

537

 

Other expenses

 

1,203

 

 

1,340

 

 

1,276

 

 

901

 

 

1,302

 

Noninterest expense

 

8,197

 

 

9,201

 

 

8,364

 

 

8,403

 

 

8,023

 

 
Income before income tax expense

 

4,838

 

 

4,924

 

 

5,040

 

 

4,933

 

 

5,797

 

 
Income tax expense

 

1,421

 

 

1,441

 

 

1,450

 

 

1,278

 

 

1,426

 

 
Net income

$

3,417

 

$

3,483

 

$

3,590

 

$

3,655

 

$

4,371

 

 
Effective tax rate

 

29.4

%

 

29.3

%

 

28.8

%

 

25.9

%

 

24.6

%

 
Outstanding number of shares

 

10,170,760

 

 

10,140,760

 

 

10,107,485

 

 

10,102,161

 

 

10,091,294

 

 
Weighted average shares for basic EPS

 

10,141,086

 

 

10,125,622

 

 

10,102,220

 

 

10,098,618

 

 

10,038,095

 

Weighted average shares for diluted EPS

 

10,321,937

 

 

10,341,488

 

 

10,359,833

 

 

10,390,326

 

 

10,389,263

 

 
Basic EPS

$

0.34

 

$

0.34

 

$

0.36

 

$

0.36

 

$

0.44

 

Diluted EPS

$

0.33

 

$

0.33

 

$

0.35

 

$

0.35

 

$

0.42

 

 
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,

2019

 

2019

 

2019

 

2018

 

2018

 
Salaries and benefits

$

5,132

 

$

5,467

 

$

5,098

 

$

4,988

 

$

4,956

 

FTE at the end of period

 

190

 

 

192

 

 

186

 

 

187

 

 

175

 

Average FTE during the period

 

191

 

 

192

 

 

185

 

 

185

 

 

177

 

Salaries and benefits/average FTE¹

$

106

 

$

114

 

$

112

 

$

107

 

$

111

 

Salaries and benefits/average assets¹

 

1.72

%

 

1.87

%

 

1.82

%

 

1.71

%

 

1.71

%

Noninterest expense/average assets¹

 

2.75

%

 

3.15

%

 

2.99

%

 

2.87

%

 

2.77

%

1 Annualized
FIVE-QUARTER BALANCE SHEET (Unaudited) – Table 5
(Dollars in thousands)
 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

 

2019

 

2019

 

2019

 

2018

 

2018

ASSETS
Cash and due from banks

$

12,448

 

$

12,369

 

$

10,837

 

$

11,029

 

$

12,228

 

Interest-earning deposits at the FRB and other banks

 

72,907

 

 

127,199

 

 

111,305

 

 

97,211

 

 

119,246

 

Investment securities¹

 

97,141

 

 

99,758

 

 

101,825

 

 

104,431

 

 

107,406

 

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

 

42,132

 

 

46,875

 

 

45,275

 

 

45,665

 

 

38,007

 

 
Loans receivable

 

905,004

 

 

881,614

 

 

874,330

 

 

875,797

 

 

896,580

 

Allowance for loan losses

 

(9,978

)

 

(10,019

)

 

(9,760

)

 

(10,023

)

 

(9,814

)

Loans receivable, net

 

895,026

 

 

871,595

 

 

864,570

 

 

865,774

 

 

886,766

 

 
OREO

 

11

 

 

11

 

 

15

 

 

25

 

 

25

 

Restricted stock investments

 

8,194

 

 

8,194

 

 

7,879

 

 

7,879

 

 

6,879

 

Servicing assets

 

9,953

 

 

10,174

 

 

10,303

 

 

10,541

 

 

11,403

 

Other assets

 

21,885

 

 

22,662

 

 

25,610

 

 

18,519

 

 

22,346

 

Total assets

$

1,159,697

 

$

1,198,837

 

$

1,177,619

 

$

1,161,074

 

$

1,204,306

 

 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Noninterest-bearing

$

200,034

 

$

202,657

 

$

198,940

 

$

206,764

 

$

222,018

 

Interest-bearing

 

789,280

 

 

829,088

 

 

816,603

 

 

801,830

 

 

835,110

 

Total deposits

 

989,314

 

 

1,031,745

 

 

1,015,543

 

 

1,008,594

 

 

1,057,128

 

 
FHLB advances

 

10,000

 

 

10,000

 

 

10,000

 

 

10,000

 

 

10,000

 

Other liabilities

 

15,164

 

 

15,990

 

 

15,595

 

 

10,567

 

 

9,585

 

Total liabilities

 

1,014,478

 

 

1,057,735

 

 

1,041,138

 

 

1,029,161

 

 

1,076,713

 

 
Stockholders’ Equity

 

145,219

 

 

141,102

 

 

136,481

 

 

131,913

 

 

127,593

 

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

$

1,159,697

 

$

1,198,837

 

$

1,177,619

 

$

1,161,074

 

$

1,204,306

 

¹ Includes AFS and HTM
 

Contacts

Long T. Huynh, EVP & CFO

(323) 988-3010

LongH@cbb-bank.com

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