The Company’s Board of Directors increased its quarterly cash dividend by 11.1% to
“First quarter earnings were solid and further bolstered a balance sheet that exhibits a strong level of capital and ample liquidity,” stated
“In April, the Company was awarded a
“Deposit growth and pricing was an industrywide challenge during the first quarter, and we have not been immune to the effects of the Federal Reserve’s tightening monetary policy. Increasing interest rates have led to higher funding costs and a 29 basis point reduction in the first quarter net interest margin compared to the preceding quarter, and a 30 basis point decrease compared to the first quarter a year ago,” said Keller. “Deposit retention and acquisition remains competitive, but we are grateful for our loyal client base and the response from prospective value-aligned depositors. While we experienced an aggregate
“Beginning
“Commercial real estate loans against office properties totaled
First Quarter 2023 Financial Highlights (at or for the period ended
- Net income was
$1.94 million in the first quarter of 2023, compared to$1.63 million in the first quarter a year ago, and$2.39 million in the preceding quarter. Earnings per common share was$0.22 in the first quarter of 2023, compared to$0.19 in the first quarter a year ago, and$0.28 in the preceding quarter. - Pre-tax, pre-provision, pre-CDFI grant income was
$2.76 million in the first quarter of 2023, compared to$2.31 million in the year ago quarter, and$3.39 million in the fourth quarter of 2022. - Total assets increased
$217.6 million , or 27.5%, to$1.01 billion atMarch 31, 2023 , compared to$791.6 million a year earlier, and increased$33.1 million , or 3.4%, compared to$976.0 million three months earlier. Average assets for the quarter totaled$987.1 million , an increase of$227.7 million , or 30.0%, from the first quarter a year ago and a decrease of$12.2 million , or 1.2%, compared with the prior quarter. - Net interest income, before the provision for loan losses, increased 17.9% to
$7.65 million in the first quarter of 2023, compared to$6.49 million in the first quarter a year ago. There was a$39,000 provision for loan losses recorded in the first quarter of 2023. This compared to no provision for loan losses in the first quarter of 2022, or the preceding quarter. - Non-interest income was
$248,000 in the first quarter of 2023, compared to$180,000 in the first quarter a year ago, and$253,000 in the preceding quarter. - Operating revenue (net interest income before the provision for loan losses plus non-interest income) increased 18.4% to
$7.90 million in the first quarter of 2023, compared to$6.67 million in the first quarter a year ago, and decreased 12.2% compared to$9.00 million in the fourth quarter of 2022. - Net interest margin was 3.28% in the first quarter, compared to 3.57% in the preceding quarter, and 3.58% in the first quarter a year ago. The contraction in net interest margin in the first quarter of 2023 was primarily due to the increase in deposit costs as well as increased liquidity from the capital raise during the current quarter, compared to the year ago quarter. The average interest yield on non-PPP loans in the first quarter of 2023 was 5.42%, compared to 4.30% in the year ago quarter and 5.09% in the prior quarter. The average cost of funds in the first quarter was 1.94%, a 170 basis point increase compared to the first quarter a year ago and a 78 basis points increase compared to the prior quarter.
- Loans, net of unearned income, increased
$145.2 million , or 27.8%, to$666.9 million atMarch 31, 2023 , compared to$521.7 million a year ago, and increased$9.2 million , or 1.4%, compared to$657.7 million three months earlier. Loan growth, excluding PPP loans, totaled$9.3 million for the quarter, driving increased interest income. AtMarch 31, 2023 , net non-PPP loans totaled$666.3 million , a 1.4% increase compared to$657.0 million atDecember 31, 2022 , and a 32.0% increase compared to$504.8 million atMarch 31, 2022 . In addition, atMarch 31, 2023 , the unused portion of credit commitments totaled$141.9 million compared to$150.8 million in the prior quarter and$153.7 million a year ago. - Over the last two years, the Company was an active participant in the SBA PPP, resulting in over
$158.0 million in PPP loans originated over the course of the two rounds of the program. At quarter end, the Company had a total of$529,000 in gross PPP loans remaining on its books. Approximately$1,000 of the fee income recognized during the first quarter of 2023 was related to these PPP loan payoffs, compared to$36,000 of the fee income recognized during the preceding quarter and$596,000 of fee income recognized during the first quarter of 2022. AtMarch 31, 2023 , approximately$11,000 in net unrecognized fee income remained to be recognized in relation to the PPP loan portfolio, which is predominantly expected during the next few quarters. - Total deposits decreased
$38.1 million , or 5.5%, to$660.4 million atMarch 31, 2023 , compared to$698 .5 million a year ago, and decreased$45.5 million , or 6.4%, compared to$705.9 million three months earlier. Noninterest bearing demand deposit accounts decreased 18.9% compared to a year ago and represented 29.7% of total deposits. Savings, NOW and money market accounts decreased 24.0% compared to a year ago and represented 43.8% of total deposits. Due to rising interest rates, CDs increased 129% compared to a year ago and comprised 26.5% of the total deposit portfolio, atMarch 31, 2023 . For the quarter, the overall cost of funds was 194 basis points (“bp”) compared to 116 bp in the prior quarter, and 24 bp in the first quarter a year ago. - Asset quality remained strong with 0.021% nonperforming loans to gross loans at
March 31, 2023 . This compares to 0.046% of nonperforming loans to gross loans atDecember 31, 2022 , and nonperforming loans at 0.004% of total loans atMarch 31, 2022 . - The allowance for credit losses was
$6.48 million , or 0.97% of gross loans atMarch 31, 2023 , compared to$6.50 million , or 1.25% of total loans atMarch 31, 2022 . The allowance, as a percentage of non-guaranteed loans, was 0.99% atMarch 31, 2023 , compared to 1.31% a year ago. The allowance for credit losses reflects management’s assessment of the current economic environment. - Primarily due to the capital raise, total equity increased 180.2% to
$187.9 million as ofMarch 31, 2023 , compared to$67.0 million a year ago. The Bank’s capital levels remained well aboveFDIC “Well Capitalized” standards as ofMarch 31, 2023 , with a Tier 1 capital ratio of 25.60%; Common Equity Tier 1 capital ratio of 9.75%; Total capital ratio of 26.52%; and Leverage ratio of 19.54%. - Book value per common share totaled
$7.86 as ofMarch 31, 2023 , compared to$7.56 per common share a year ago. - Declared a quarterly cash dividend of
$0.05 per share. The dividend is payableJune 5, 2023 to shareholders of record onMay 26, 2023 .
On
On
On
While the ECIP capital investment was an extraordinary event brought on by the Federal response to the pandemic, the Bank has maintained a long and important relationship with the US Treasury’s
For additional information on the US Treasury’s ECIP Program please visit
https://home.treasury.gov/policy-issues/coronavirus/assistance-for-small-businesses/emergency-capital-investment-program
For additional information on the CDFI Fund’s Rapid Response Program please visit
https://www.cdfifund.gov/programs-training/programs/rrp
For additional information on the CDFI Fund’s Equitable Recovery Program please visit
https://www.cdfifund.gov/programs-training/programs/erp
About
Forward-Looking Statements
This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth and improvement. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in
Contacts: | |
510-433-5404 | |
wkeller@BankCBB.com |
FINANCIAL TABLES TO FOLLOW:
Quarterly Financial Summary (Unaudited) | |||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||
Three Months Ended | |||||||||||||||||
Earnings and dividends: | |||||||||||||||||
Interest income | $ | 11,442 | $ | 11,099 | $ | 9,151 | $ | 7,756 | $ | 6,900 | |||||||
Interest expense | 3,790 | 2,354 | 1,377 | 544 | 410 | ||||||||||||
Net interest income | 7,652 | 8,745 | 7,774 | 7,212 | 6,490 | ||||||||||||
Provision for credit losses | 39 | - | - | 400 | - | ||||||||||||
Noninterest income | 248 | 253 | 205 | 376 | 180 | ||||||||||||
Noninterest expense | 5,134 | 5,609 | 4,835 | 4,583 | 4,361 | ||||||||||||
Provision for income taxes | 784 | 1,001 | 930 | 769 | 683 | ||||||||||||
Net income | 1,943 | 2,388 | 2,214 | 1,836 | 1,626 | ||||||||||||
Share data: | |||||||||||||||||
Basic earnings per common share | $ | 0.22 | $ | 0.28 | $ | 0.25 | $ | 0.21 | $ | 0.18 | |||||||
Dividends declared per common share | 0.050 | 0.045 | 0.045 | 0.045 | 0.045 | ||||||||||||
Book value per common share | 7.86 | 7.50 | 7.27 | 7.50 | 7.56 | ||||||||||||
Common shares outstanding, 30,000,000 authorized | 8,728,802 | 8,728,802 | 8,591,052 | 8,871,052 | 8,871,052 | ||||||||||||
Average common shares outstanding | 8,728,802 | 8,664,401 | 8,685,400 | 8,871,052 | 8,871,052 | ||||||||||||
Balance sheet - average balances: | |||||||||||||||||
Loans receivable, net | $ | 653,181 | $ | 627,608 | $ | 584,807 | $ | 530,579 | $ | 493,238 | |||||||
PPP loans | 595 | 1,215 | 4,289 | 8,900 | 26,894 | ||||||||||||
Earning assets | 945,121 | 972,965 | 885,777 | 797,259 | 735,506 | ||||||||||||
Total assets | 987,071 | 999,316 | 910,388 | 825,631 | 759,409 | ||||||||||||
Deposits | 668,397 | 764,127 | 697,174 | 695,945 | 660,149 | ||||||||||||
Borrowings | 122,278 | 42,652 | 19,500 | 24,170 | 23,589 | ||||||||||||
Preferred equity (ECIP) | 119,413 | 119,413 | 119,413 | 31,494 | - | ||||||||||||
Shareholders' common equity | 65,676 | 63,038 | 65,688 | 66,833 | 67,820 | ||||||||||||
Ratios: | |||||||||||||||||
Return on average assets | 0.80 | % | 0.95 | % | 0.96 | % | 0.89 | % | 0.87 | % | |||||||
Return on average common equity | 12.00 | % | 15.03 | % | 13.37 | % | 11.02 | % | 9.72 | % | |||||||
Yield on earning assets | 4.91 | % | 4.53 | % | 4.10 | % | 3.90 | % | 3.80 | % | |||||||
Cost of interest-bearing deposits | 2.25 | % | 1.49 | % | 1.08 | % | 0.40 | % | 0.27 | % | |||||||
Cost of funds | 1.94 | % | 1.16 | % | 0.76 | % | 0.30 | % | 0.24 | % | |||||||
Net interest margin | 3.28 | % | 3.57 | % | 3.48 | % | 3.63 | % | 3.58 | % | |||||||
Efficiency ratio | 64.99 | % | 62.34 | % | 60.60 | % | 60.40 | % | 65.38 | % | |||||||
Asset quality: | |||||||||||||||||
Net loan (charge-offs) recoveries to average loans | -0.023 | % | -0.003 | % | 0.001 | % | 0.000 | % | 0.042 | % | |||||||
Nonperforming loans to gross loans | 0.021 | % | 0.046 | % | 0.000 | % | 0.000 | % | 0.004 | % | |||||||
Nonperforming assets to total assets | 0.014 | % | 0.031 | % | 0.000 | % | 0.000 | % | 0.003 | % | |||||||
Allowance for credit losses to gross loans | 0.97 | % | 1.05 | % | 1.16 | % | 1.17 | % | 1.25 | % |
Consolidated Balance Sheets (Unaudited) | |||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||
Assets | |||||||||||||
Cash and due from | $ | 77,823 | $ | 40,934 | $ | 151,643 | |||||||
Interest bearing deposits | 11,166 | 11,165 | 11,162 | ||||||||||
Available-for-sale securities | 195,872 | 209,763 | 61,754 | ||||||||||
Held-to-maturity securities | 34,500 | 34,500 | 23,000 | ||||||||||
Commercial | 129,800 | 128,221 | 130,411 | ||||||||||
PPP | 529 | 666 | 16,853 | ||||||||||
CRE (Owner occupied) | 109,128 | 113,450 | 111,774 | ||||||||||
CRE (Non-owner occupied) | 337,891 | 327,478 | 189,096 | ||||||||||
Construction and land | 50,793 | 51,731 | 39,012 | ||||||||||
Consumer and other | 40,496 | 37,990 | 36,175 | ||||||||||
Unearned fees, net | (1,773 | ) | (1,857 | ) | (1,646 | ) | |||||||
Allowance for credit losses | (6,479 | ) | (6,889 | ) | (6,500 | ) | |||||||
Net Loans | 660,385 | 650,790 | 515,175 | ||||||||||
Premises and equipment | 993 | 1,046 | 1,202 | ||||||||||
Life insurance assets | 7,837 | 7,785 | 7,629 | ||||||||||
Accrued interest receivable and other assets | 20,565 | 20,050 | 19,992 | ||||||||||
Total assets | $ | 1,009,141 | $ | 976,033 | $ | 791,557 | |||||||
Liabilities and Shareholders' Equity | |||||||||||||
Liabilities | |||||||||||||
Deposits | |||||||||||||
Demand | $ | 196,131 | $ | 203,014 | $ | 241,902 | |||||||
Saving, NOW and money market | 288,978 | 355,282 | 380,033 | ||||||||||
Time | 175,276 | 147,613 | 76,559 | ||||||||||
Total deposits | 660,385 | 705,909 | 698,494 | ||||||||||
FHLB Advances | 149,500 | 74,500 | 19,500 | ||||||||||
Interest payable and other liabilities | 11,376 | 10,750 | 6,521 | ||||||||||
Total liabilities | 821,261 | 791,159 | 724,515 | ||||||||||
Shareholders' Equity | |||||||||||||
Preferred stock, | 119,413 | 119,413 | - | ||||||||||
Common stock, without par value | 51,264 | 51,264 | 51,768 | ||||||||||
Retained earnings | 23,486 | 22,001 | 17,745 | ||||||||||
Accumulated other comprehensive income (expense) | (6,283 | ) | (7,804 | ) | (2,471 | ) | |||||||
Total shareholders' equity | 187,880 | 184,874 | 67,042 | ||||||||||
Total liabilities and shareholders' equity | $ | 1,009,141 | $ | 976,033 | $ | 791,557 |
Consolidated Statements of Income (Unaudited) | |||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||
Three Months Ended | |||||||||||||
Interest Income | |||||||||||||
Loans | $ | 9,051 | $ | 8,375 | $ | 6,416 | |||||||
Securities | 1,894 | 1,877 | 418 | ||||||||||
Federal funds sold and deposits in banks | 497 | 847 | 66 | ||||||||||
Total interest income | 11,442 | 11,099 | 6,900 | ||||||||||
Interest Expense | |||||||||||||
Deposits | 2,551 | 2,026 | 283 | ||||||||||
Borrowings | 1,239 | 328 | 127 | ||||||||||
Total interest expense | 3,790 | 2,354 | 410 | ||||||||||
Net Interest Income | 7,652 | 8,745 | 6,490 | ||||||||||
Provision for Loan Losses | 39 | - | - | ||||||||||
Net Interest Income After Provision for Loan Losses | 7,613 | 8,745 | 6,490 | ||||||||||
Noninterest income | |||||||||||||
Service charges | 60 | 50 | 50 | ||||||||||
Other | 188 | 203 | 130 | ||||||||||
Total noninterest income | 248 | 253 | 180 | ||||||||||
Noninterest Expense | |||||||||||||
Salaries and employee benefits | 3,134 | 3,046 | 2,621 | ||||||||||
Net occupancy and equipment expense | 311 | 337 | 314 | ||||||||||
Software and data processing fees | 514 | 637 | 523 | ||||||||||
Professional fees | 295 | 270 | 174 | ||||||||||
Marketing and business development | 168 | 240 | 140 | ||||||||||
75 | 62 | 98 | |||||||||||
Other | 637 | 1,017 | 491 | ||||||||||
Total noninterest expense | 5,134 | 5,609 | 4,361 | ||||||||||
Income before Income Tax | 2,727 | 3,389 | 2,309 | ||||||||||
Provision for Income Taxes | 784 | 1,001 | 683 | ||||||||||
Net Income | $ | 1,943 | $ | 2,388 | $ | 1,626 | |||||||
Basic Earnings Per Share | $ | 0.22 | $ | 0.28 | $ | 0.19 |
Additional Financial Information | ||||||||||||
(Dollars in thousands except per share amounts)(Unaudited) | ||||||||||||
Asset Quality Ratios and Data: | ||||||||||||
Nonaccrual loans (excluding restructured loans) | $ | 140 | $ | 301 | $ | 22 | ||||||
Nonaccrual restructured loans | - | - | - | |||||||||
Loans past due 90 days and still accruing | - | - | - | |||||||||
Total non-performing loans | 140 | 301 | 22 | |||||||||
OREO and other non-performing assets | - | - | - | |||||||||
Total non-performing assets | $ | 140 | $ | 301 | $ | 22 | ||||||
Nonperforming loans to gross loans | 0.021 | % | 0.046 | % | 0.004 | % | ||||||
Nonperforming assets to total assets | 0.014 | % | 0.031 | % | 0.003 | % | ||||||
Allowance for loan losses to gross loans | 0.97 | % | 0.00 | % | 1.25 | % | ||||||
Performing restructured loans (RC-C) | $ | 122 | $ | 123 | $ | 127 | ||||||
Net (charge-offs) recoveries quarter ending | $ | (150 | ) | $ | (21 | ) | $ | 220 |
Source:
2023 GlobeNewswire, Inc., source