The Company’s Board of Directors declared a quarterly cash dividend of
“During the third quarter the Bank recorded the
“Our investments focused on core deposit generation, and we prioritized recruiting professionals with deep ties to the communities we serve,” Keller continued. “Specifically, we established a San Francisco Production Office led by SVP & Managing Director of CDFI & Non-profit Banking
“The “higher for longer” interest rate environment continues to impact the deposit mix and pricing and as a result the majority of net deposit growth during the third quarter was in time deposit accounts,” said Keller. “Overall funding costs slightly outpaced asset yields during the quarter, resulting in a one basis point reduction in net interest margin compared to the preceding quarter. With the pace of net interest margin contraction slowing considerably, we anticipate that core deposit growth, driven by our recent office and staff investments, will help expand our net interest margin over the next few quarters.”
“We implemented the Current Expected Credit Losses standard on
“The commercial real estate loan portfolio continues to perform well,” continued Ali. “Commercial real estate loans against office properties totaled
Third Quarter 2023 Financial Highlights (at or for the period ended
- Net income increased 41.1% to
$3.12 million in the third quarter of 2023, compared to$2.21 million in the third quarter a year ago, and increased 68.5% compared to$1.85 million in the preceding quarter. Earnings per common share was$0.36 in the third quarter of 2023, compared to$0.25 in the third quarter a year ago, and$0.21 in the preceding quarter. - Pre-tax, pre-provision, pre-CDFI grant income was
$1.99 million in the third quarter of 2023, compared to$3.14 million in the year ago quarter, and$2.54 million in the second quarter of 2023. - Total assets increased
$51.6 million , or 5.1%, to$1.07 billion atSeptember 30, 2023 , compared to$1.01 billion a year earlier, and increased$5.24 million , or 0.5%, compared to$1.06 billion three months earlier. Average assets for the quarter totaled 1.06 billion, an increase of$148.1 million , or 16.3%, from the third quarter a year ago and an increase of$36.9 million , or 3.6%, compared with the prior quarter. - Net interest income, before the provision for credit losses, increased 5.5% to
$8.20 million in the third quarter of 2023, compared to$7.77 million in the third quarter a year ago. There was a$626,000 provision for credit losses recorded in the third quarter of 2023. This compared to no provision for loan losses in the third quarter of 2022, and a$96,000 negative provision for credit losses recorded for the preceding quarter. - Due primarily to the
$2.48 million Equity Recovery Program grant, and the$437,000 BEA award, non-interest income increased substantially to$3.33 million in the third quarter of 2023, compared to$205,000 in the third quarter a year ago, and$233,000 in the preceding quarter. - Operating revenue (net interest income before the provision for loan losses plus non-interest income) increased 48.3% to
$11.54 million in the third quarter of 2023, compared to$7.78 million in the third quarter a year ago, and increased 43.5% compared to$8.04 million in the second quarter of 2023. - Net interest margin was 3.15% in the third quarter, compared to 3.19% in the preceding quarter, and 3.48% in the third quarter a year ago. The 4 basis point contraction in net interest margin in the third quarter of 2023 was due to a shift in the deposit mix. The year-over-year contraction was due to an 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 third quarter of 2023 was 5.74%, compared to 4.84% in the year ago quarter and 5.59% in the prior quarter. The average cost of funds in the third quarter was 2.35%, a 159 basis point increase compared to the third quarter a year ago and a 17 basis point increase compared to the prior quarter.
- Loans, net of unearned income, increased
$85.1 million , or 14.0%, to$675.9 million atSeptember 30, 2023 , compared to$590.9 million a year ago, and increased$2.16 million compared to$673.7 million three months earlier. In addition, atSeptember 30, 2023 , the unused portion of credit commitments totaled$141.0 million compared to$127.7 million in the prior quarter and$166.6 million a year ago. - Total deposits decreased
$83.0 million , or 10.3%, to$720.6 million atSeptember 30, 2023 , compared to$803 .6 million a year ago, and increased$730,000 compared to$720.0 million three months earlier. Noninterest bearing demand deposit accounts decreased 14.7% compared to a year ago and represented 27.1% of total deposits. Savings, NOW and money market accounts decreased 32.2% compared to a year ago and represented 40.2% of total deposits. Reflective of the rising interest rate environment, CDs increased 59.7% compared to a year ago and comprised 32.7% of the total deposit portfolio, atSeptember 30, 2023 . For the quarter, the overall cost of funds was 235 basis points compared to 218 basis points in the prior quarter, and 76 basis points in the third quarter a year ago. - Asset quality remains strong with 1.057% nonperforming loans to gross loans at
September 30, 2023 . This compares to 1.131% of nonperforming loans to gross loans atJune 30, 2023 , and nonperforming loans at 0.000% of total loans atSeptember 30, 2022 . - The allowance for credit losses on loans was
$6.31 million , or 0.93% of gross loans atSeptember 30, 2023 , compared to$6.91 million , or 1.16% of total loans atSeptember 30, 2022 . The allowance, as a percentage of non-guaranteed loans, was 0.95% atSeptember 30, 2023 , compared to 1.17% a year ago. The allowance for credit losses reflects management’s assessment of the current economic environment. - Primarily due to retained earnings, total equity increased 4.9% to
$190.8 million as ofSeptember 30, 2023 , compared to$181.9 million a year ago. The Bank’s capital levels remained well aboveFDIC “Well Capitalized” standards as ofSeptember 30, 2023 , with a Tier 1 capital ratio of 26.37%; Common Equity Tier 1 capital ratio of 10.39%; Total capital ratio of 27.30%; and Leverage ratio of 18.61%. - Book value per common share totaled
$8.14 as ofSeptember 30, 2023 , compared to$7.27 per common share a year ago. - Declared a quarterly cash dividend of
$0.05 per share. The dividend is payableDecember 8, 2023 to shareholders of record onNovember 27, 2023 .
On
On
While the ECIP investment was a transformative 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
For additional information on the EPA’s Clean Communities Investment Accelerator Program please visit https://www.epa.gov/greenhouse-gas-reduction-fund/clean-communities-investment-accelerator
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
FINANCIAL TABLES TO FOLLOW:
Quarterly Financial Summary (Unaudited) | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Three Months Ended | ||||||||||||||||
Earnings and dividends: | ||||||||||||||||
Interest income | $ | 13,268 | $ | 12,278 | $ | 11,442 | $ | 11,099 | $ | 9,151 | ||||||
Interest expense | 5,064 | 4,473 | 3,790 | 2,354 | 1,377 | |||||||||||
Net interest income | 8,204 | 7,805 | 7,652 | 8,745 | 7,774 | |||||||||||
Provision for credit losses, loans | 626 | (96 | ) | 39 | - | - | ||||||||||
Noninterest income | 3,332 | 234 | 248 | 253 | 205 | |||||||||||
Noninterest expense | 6,464 | 5,495 | 5,134 | 5,609 | 4,835 | |||||||||||
Provision for income taxes | 1,322 | 786 | 784 | 1,001 | 930 | |||||||||||
Net income | 3,124 | 1,854 | 1,943 | 2,388 | 2,214 | |||||||||||
Share data: | ||||||||||||||||
Basic earnings per common share | $ | 0.36 | $ | 0.21 | $ | 0.22 | $ | 0.28 | $ | 0.25 | ||||||
Dividends declared per common share | 0.050 | 0.050 | 0.050 | 0.045 | 0.045 | |||||||||||
Book value per common share | 8.14 | 7.92 | 7.86 | 7.50 | 7.27 | |||||||||||
Common shares outstanding, 30,000,000 authorized | 8,771,302 | 8,728,802 | 8,728,802 | 8,728,802 | 8,591,052 | |||||||||||
Average common shares outstanding | 8,756,981 | 8,728,802 | 8,728,802 | 8,664,401 | 8,685,400 | |||||||||||
Balance sheet - average balances: | ||||||||||||||||
Loans receivable, net | $ | 673,313 | $ | 662,470 | $ | 653,181 | $ | 627,608 | $ | 584,807 | ||||||
PPP loans | 453 | 500 | 595 | 1,215 | 4,289 | |||||||||||
Earning assets | 1,032,794 | 980,094 | 945,121 | 972,965 | 885,777 | |||||||||||
Total assets | 1,058,475 | 1,021,564 | 987,071 | 999,316 | 910,388 | |||||||||||
Deposits | 716,450 | 684,328 | 668,397 | 764,127 | 697,174 | |||||||||||
Borrowings | 140,000 | 139,940 | 122,278 | 42,652 | 19,500 | |||||||||||
Preferred equity (ECIP) | 119,413 | 119,413 | 119,413 | 119,413 | 119,413 | |||||||||||
Shareholders' common equity | 68,947 | 68,088 | 65,676 | 63,038 | 65,688 | |||||||||||
Ratios: | ||||||||||||||||
Return on average assets | 1.17 | % | 0.73 | % | 0.80 | % | 0.95 | % | 0.96 | % | ||||||
Return on average common equity | 17.98 | % | 10.92 | % | 12.00 | % | 15.03 | % | 13.37 | % | ||||||
Yield on earning assets | 5.10 | % | 5.03 | % | 4.91 | % | 4.53 | % | 4.10 | % | ||||||
Cost of interest-bearing deposits | 2.86 | % | 2.61 | % | 2.25 | % | 1.49 | % | 1.08 | % | ||||||
Cost of funds | 2.35 | % | 2.18 | % | 1.94 | % | 1.16 | % | 0.76 | % | ||||||
Net interest margin | 3.15 | % | 3.19 | % | 3.28 | % | 3.57 | % | 3.48 | % | ||||||
Efficiency ratio | 76.15 | % | 68.10 | % | 64.99 | % | 62.34 | % | 60.60 | % | ||||||
Asset quality: | ||||||||||||||||
Net loan (charge-offs) recoveries to average loans | -0.085 | % | 0.004 | % | -0.023 | % | -0.003 | % | 0.001 | % | ||||||
Nonperforming loans to gross loans | 1.057 | % | 1.131 | % | 0.021 | % | 0.046 | % | 0.000 | % | ||||||
Nonperforming assets to total assets | 0.677 | % | 0.725 | % | 0.014 | % | 0.031 | % | 0.000 | % | ||||||
Allowance for credit losses to gross loans | 0.93 | % | 0.92 | % | 0.95 | % | 1.05 | % | 1.16 | % | ||||||
Consolidated Balance Sheets (Unaudited) | ||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||
Assets | ||||||||||||
Cash and due from | $ | 147,847 | $ | 134,869 | $ | 177,930 | ||||||
Interest bearing deposits | 10,923 | 10,923 | 11,165 | |||||||||
Available-for-sale securities | 165,093 | 176,670 | 172,662 | |||||||||
Held-to-maturity securities | 34,500 | 34,500 | 34,500 | |||||||||
Allowance for credit losses, investments | (155 | ) | (177 | ) | - | |||||||
Commercial | 57,837 | 73,405 | 64,303 | |||||||||
PPP | 428 | 471 | 4,280 | |||||||||
CRE (Owner occupied) | 148,860 | 130,339 | 97,844 | |||||||||
CRE (Non-owner occupied) | 341,181 | 343,661 | 304,750 | |||||||||
Construction and land | 80,588 | 74,089 | 73,480 | |||||||||
Consumer and other | 55,169 | 59,860 | 54,786 | |||||||||
Unearned fees, net | (1,853 | ) | (1,852 | ) | (1,653 | ) | ||||||
Allowance for credit losses, loans | (6,313 | ) | (6,236 | ) | (6,911 | ) | ||||||
Net Loans | 675,897 | 673,737 | 590,879 | |||||||||
Premises and equipment | 1,086 | 956 | 1,091 | |||||||||
Life insurance assets | 7,944 | 7,890 | 7,732 | |||||||||
Accrued interest receivable and other assets | 22,742 | 21,272 | 18,291 | |||||||||
Total assets | $ | 1,065,877 | $ | 1,060,640 | $ | 1,014,250 | ||||||
Liabilities and Shareholders' Equity | ||||||||||||
Liabilities | ||||||||||||
Deposits | ||||||||||||
Demand | $ | 194,929 | $ | 205,060 | $ | 228,650 | ||||||
Saving, NOW and money market | 289,824 | 313,794 | 427,260 | |||||||||
Time | 235,857 | 201,026 | 147,671 | |||||||||
Total deposits | 720,610 | 719,880 | 803,581 | |||||||||
FHLB Advances | 140,000 | 140,000 | 19,500 | |||||||||
Interest payable and other liabilities | 14,453 | 12,202 | 9,285 | |||||||||
Total liabilities | 875,063 | 872,082 | 832,366 | |||||||||
Shareholders' Equity | ||||||||||||
Preferred stock, | 119,413 | 119,413 | 119,413 | |||||||||
Common stock, without par value | 55,865 | 55,645 | 54,840 | |||||||||
Retained earnings | 23,426 | 20,740 | 15,771 | |||||||||
Accumulated other comprehensive income (expense) | (7,890 | ) | (7,240 | ) | (8,140 | ) | ||||||
Total shareholders' equity | 190,814 | 188,558 | 181,884 | |||||||||
Total liabilities and shareholders' equity | $ | 1,065,877 | $ | 1,060,640 | $ | 1,014,250 | ||||||
Consolidated Statements of Income (Unaudited) | |||||||||||
(Dollars in thousands, except per share data) | |||||||||||
Three Months Ended | |||||||||||
Interest Income | |||||||||||
Loans | $ | 9,724 | $ | 9,264 | $ | 7,384 | |||||
Securities | 1,718 | 1,810 | 1,384 | ||||||||
Federal funds sold and deposits in banks | 1,826 | 1,205 | 383 | ||||||||
Total interest income | 13,268 | 12,279 | 9,151 | ||||||||
Interest Expense | |||||||||||
Deposits | 3,658 | 3,086 | 1,273 | ||||||||
Borrowings | 1,406 | 1,387 | 104 | ||||||||
Total interest expense | 5,064 | 4,473 | 1,377 | ||||||||
Net Interest Income | 8,204 | 7,806 | 7,774 | ||||||||
Provision for Loan Losses | 626 | (96 | ) | - | |||||||
Net Interest Income After Provision for Loan Losses | 7,578 | 7,902 | 7,774 | ||||||||
Noninterest income | |||||||||||
Service charges | 52 | 59 | 54 | ||||||||
Gains on sale of loans | 163 | - | - | ||||||||
Government grants | 2,916 | - | - | ||||||||
Other | 201 | 174 | 151 | ||||||||
Total noninterest income | 3,332 | 233 | 205 | ||||||||
Noninterest Expense | |||||||||||
Salaries and employee benefits | 3,518 | 3,201 | 2,815 | ||||||||
Net occupancy and equipment expense | 462 | 333 | 365 | ||||||||
Software and data processing fees | 808 | 769 | 641 | ||||||||
Professional fees | 312 | 295 | 223 | ||||||||
Marketing and business development | 235 | 178 | 166 | ||||||||
149 | 111 | 38 | |||||||||
Other | 980 | 608 | 587 | ||||||||
Total noninterest expense | 6,464 | 5,495 | 4,835 | ||||||||
Income before Income Tax | 4,446 | 2,640 | 3,144 | ||||||||
Provision for Income Taxes | 1,322 | 786 | 930 | ||||||||
Net Income | $ | 3,124 | $ | 1,854 | $ | 2,214 | |||||
Basic Earnings Per Share | $ | 0.36 | $ | 0.21 | $ | 0.25 | |||||
Additional Financial Information | ||||||||||||
(Dollars in thousands except per share amounts)(Unaudited) | ||||||||||||
Asset Quality Ratios and Data: | ||||||||||||
Nonaccrual loans (excluding restructured loans) | $ | 7,212 | $ | 7,691 | $ | - | ||||||
Nonaccrual restructured loans | - | - | - | |||||||||
Loans past due 90 days and still accruing | - | - | - | |||||||||
Total non-performing loans | 7,212 | 7,691 | - | |||||||||
OREO and other non-performing assets | - | - | - | |||||||||
Total non-performing assets | $ | 7,212 | $ | 7,691 | $ | - | ||||||
Nonperforming loans to gross loans | 1.057 | % | 1.131 | % | 0.000 | % | ||||||
Nonperforming assets to total assets | 0.677 | % | 0.725 | % | 0.000 | % | ||||||
Allowance for loan losses to gross loans | 0.93 | % | 0.92 | % | 1.16 | % | ||||||
Performing restructured loans (RC-C) | $ | 120 | $ | 121 | $ | 125 | ||||||
Net (charge-offs) recoveries quarter ending | $ | (571 | ) | $ | 29 | $ | 2 |
Contacts:
510-433-5404
wkeller@BankCBB.com
Source:
2023 GlobeNewswire, Inc., source