CBB Bancorp, Inc. Reports Third Quarter 2024 Financial Results

Business Wire

Fri, Oct 25, 2024, 7:00 AM 11 min read

LOS ANGELES, October 25, 2024--(BUSINESS WIRE)--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 $5.6 million for the third quarter 2024, or $0.53 per diluted share compared to $5.5 million in the second quarter 2024, or $0.51 per diluted share.

OVERALL RESULTS

Net income for the third quarter 2024 increased due to higher net interest income after provision for credit losses offset by lower noninterest income and higher noninterest expenses.

The return on average assets for the third quarter 2024 was 1.31% compared to 1.31% for the second quarter 2024 and 1.46% for the third quarter 2023. The return on average equity for the third quarter 2024 was 8.91% compared to 9.06% for the second quarter 2024 and 11.66% for the third quarter 2023.

The efficiency ratio for the third quarter 2024 was 56.61% compared to 55.69% for the second quarter 2024 and 52.23% for the third quarter 2023.

James Hong, President and CEO, said, "I am pleased to report that we have delivered another strong quarter, reflecting our unwavering commitment to serving our customers and communities. Our third quarter results demonstrate the resilience and dedication of our entire team. During the quarter, we saw a solid increase in both deposits and loan originations, underscoring the trust our customers place in us. Our strategic initiatives to enhance digital banking services have been met with increased adoption. We continue to prioritize financial health and stability, ensuring that our bank remains a safe and reliable partner for all our stakeholders."

INCOME STATEMENT

Net Interest Income

Net interest income for the third quarter 2024 was $15.5 million, an increase of $112 thousand, or 0.7%, quarter over quarter, but a decrease of $2.5 million, or 14.1% compared to the third quarter 2023.

Net interest income for the nine months ended on September 30, 2024 was $46.6 million, a decrease of $9.2 million or 16.4% compared to the same period last year. The decrease in net interest income was due to periodic sales of SBA loans and 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 the third quarter 2024 was 3.71% compared to 3.77% in the prior quarter. The decrease in the net interest margin compared to the second quarter was due to higher cost of funds. The cost of funds for the third quarter 2024 increased eight basis points to 3.60% compared to 3.52% in the second quarter and sixty-nine basis points from 2.91% in the third quarter 2023.

Provision for Credit Losses

Provision for credit losses was negative $100 thousand for the third quarter 2024 compared to $200 thousand in the second quarter 2024. No provision for credit losses was recorded in the second quarter 2023.

Noninterest Income

Noninterest income for the third quarter 2024 was $2.2 million compared to $2.3 million for the second quarter 2024, a decrease of $119 thousand, and an increase of $756 thousand compared to $1.5 million for the third quarter 2023.

Noninterest income for the nine months ended September 30, 2024 was $7.1 million, an increase of $1.8 million compared to the same period last year. The increase was due to a combination of higher gain on sale of loans and increased SBA servicing fee income and banking service fees.

Noninterest Expenses

Noninterest expenses for the third quarter 2024 were $10.0 million compared to $9.9 million for the second quarter 2024 and $10.2 million for the third quarter 2023. Noninterest expenses increased $160 thousand quarter over quarter on higher marketing and loan related expenses.

Noninterest expenses for the nine months ended on September 30, 2024 were $29.9 million, a decrease of $0.7 million or 2.3% compared to the same period last year.

Please refer to financial tables in this press release for additional information and trends.

Income Taxes

The Company’s effective tax rate for the third quarter 2024 was 28.4% compared to 28.3% for second quarter 2024 and 28.3% for third quarter 2023.

BALANCE SHEET

Investment Securities

Investment securities were $63.2 million at September 30, 2024, a decrease of $9.8 million or 13.5% from June 30, 2024, and an increase of $1.6 million or 2.6% from September 30, 2023.

Loans Receivable

Loans receivable (including loans held-for-sale) at September 30, 2024 was $1.42 billion, a decrease of $16.8 million or 1.2% from June 30, 2024 and increased $301 thousand from September 30, 2023.

Allowance for Credit Losses and Asset Quality

The Allowance for Credit Losses ("ACL") at September 30, 2024, was $16.0 million which was 1.30% of loans held-for-investment compared to $16.0 million at June 30, 2024, or 1.31% of loans held-for-investment. At September 30, 2023, ACL was $15.3 million or 1.27% of total loans held-for-investment.

Total Nonperforming assets at September 30, 2024 were $8.6 million compared to $5.8 million at June 30, 2024 and $0.7 million at September 30, 2023. The ACL coverage to nonperforming assets was over 186% at September 30, 2024.

SBA Loans Held-for-Sale

Total SBA loans held-for-sale at September 30, 2024 was $198.0 million compared to $ 209.1 million June 30, 2024, and $219.4 million at September 30, 2023.

The Bank sold approximately $20.2 million in SBA loans with an average premium of 7.5% during the third quarter 2024 compared to the sale of $19.5 million with an average premium of 8.3% during the second quarter 2024. The Bank sold approximately $9.2 million of SBA loans with an average premium of 8.3% during the third quarter 2023.

Deposits

Total deposits were $1.45 billion at September 30, 2024, up $107.2 million or 8.0% from June 30, 2024, and down $101.7 million or 6.6% from September 30, 2023.

Borrowings

The Bank maintains $50.0 million in Federal Home Loan Bank advances and there was no change from the previous quarter.

Capital

Stockholders’ equity was $250.5 million at September 30, 2024, which increased $5.3 million or 2.2%, quarter over quarter. Tangible book value per share at September 30, 2024 was $23.44, an increase of $0.50, or 2.2%, quarter over quarter.

Each of the Company’s and the Bank’s regulatory capital ratios compared to June 30, 2023. The Bank is considered "Well Capitalized" under the applicable regulatory capital rules.

The Common Equity Tier1 Risk-Based Capital Ratios at September 30, 2024, were 19.03% and 18.95% for the Company and the Bank, respectively. Total Risk-Based Capital Ratios were 20.26% and 20.18% for the Company and the Bank, respectively. Bank’s Leverage Ratios were 14.64% and 14.58% 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 September 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 3Q 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																			Nine Months Ended
	September 30,			June 30,			$			%		September 30,			$			%		September 30,			September 30,			$			%
		2024			2024		Change			Change			2023		Change			Change			2024			2023		Change			Change

Interest income	$	28,380		$	27,755		$	625		2.3	%	$	29,450		$	(1,070	)	(3.6	%)	$	84,598		$	85,362		$	(764	)	(0.9	%)
Interest expense		12,904			12,391			513		4.1	%		11,442			1,462		12.8	%		37,950			29,540			8,410		28.5	%
Net interest income		15,476			15,364			112		0.7	%		18,008			(2,532	)	(14.1	%)		46,648			55,822			(9,174	)	(16.4	%)

Provision for credit losses		(100	)		200			(300	)	(150.0	%)		-			(100	)	100.0	%		500			-			500		100.0	%
Net interest income after provision for credit losses		15,576			15,164			412		2.7	%		18,008			(2,432	)	(13.5	%)		46,148			55,822			(9,674	)	(17.3	%)

Gain on sale of loans		991			1,064			(73	)	-6.9	%		419			572		26.7	%		3,544			2,371			1,173		49.5	%
Gain (loss) on sale of OREO		-			-			-		-			-			-		-			-			-			-		-
SBA servicing fee income, net		760			768			(8	)	(1.0	%)		639			121		18.9	%		2,161			1,733			428		24.7	%
Recovery on impaired servicing liability		-			-			-		-			-			-		-			10			-			10		100.0	%
Service charges and other income		465			503			(38	)	(7.6	%)		402			63		15.7	%		1,397			1,207			190		15.7	%
Noninterest income		2,216			2,335			(119	)	(5.1	%)		1,460			756		51.8	%		7,112			5,311			1,801		33.9	%

Salaries and employee benefits		5,884			5,927			(43	)	(0.7	%)		5,569			315		5.7	%		17,835			17,229			606		3.5	%
Occupancy and equipment		1,149			1,114			35		3.1	%		1,103			46		4.2	%		3,385			3,349			36		1.1	%
Marketing expense		423			403			20		5.0	%		475			(52	)	(10.9	%)		1,228			1,258			(30	)	(2.4	%)
Professional expense		456			440			16		3.6	%		443			13		2.9	%		1,308			1,333			(25	)	(1.9	%)
Other expenses		2,104			1,972			132		6.7	%		2,579			(475	)	(18.4	%)		6,160			7,458			(1,298	)	(17.4	%)
Noninterest expense		10,016			9,856			160		1.6	%		10,169			(153	)	(1.5	%)		29,916			30,627			(711	)	(2.3	%)

Income before income tax provision		7,776			7,643			133		1.7	%		9,299			(1,523	)	(16.4	%)		23,344			30,506			(7,162	)	(23.5	%)

Income tax provision		2,207			2,163			44		2.0	%		2,630			(423	)	(16.1	%)		6,623			8,645			(2,022	)	(23.4	%)

Net income	$	5,569		$	5,480		$	89		1.6	%	$	6,669		$	(1,100	)	(16.5	%)	$	16,721		$	21,861		$	(5,140	)	(23.5	%)

Effective tax rate		28.38	%		28.30	%		0.08	%	0.29	%		28.28	%		0.10	%	0.35	%		28.37	%		28.34	%		0.03	%	0.12	%

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			10,584,198			3,938		0.0	%
Weighted average shares for diluted EPS		10,596,039			10,588,136			7,903		0.1	%		10,594,155			1,884		0.0	%		10,592,363			10,595,275			(2,912	)	(0.0	%)

Basic EPS	$	0.53		$	0.51		$	0.02		3.9	%	$	0.63		$	(0.10	)	(15.9	%)	$	1.58		$	2.07		$	(0.49	)	-23.7	%
Diluted EPS	$	0.53		$	0.51		$	0.02		3.9	%	$	0.63		$	(0.10	)	(15.9	%)	$	1.58		$	2.06		$	(0.48	)	(23.3	%)

Return on average assets		1.31	%		1.31	%		0.00	%	0.0	%		1.46	%		(0.15	%)	(10.3	%)		1.32	%		1.61	%		(0.29	%)	(18.0	%)
Return on average equity		8.91	%		9.06	%		(0.15	%)	(1.7	%)		11.66	%		(2.75	%)	(23.6	%)		9.18	%		13.27	%		(4.09	%)	(30.8	%)

Efficiency ratio¹		56.61	%		55.69	%		0.92	%	1.7	%		52.23	%		4.38	%	8.4	%		55.65	%		50.10	%		5.55	%	11.1	%
Yield on interest-earning assets²		6.80	%		6.79	%		0.01	%	0.2	%		6.55	%		0.25	%	3.8	%		6.79	%		6.42	%		0.37	%	5.8	%
Cost of funds		3.60	%		3.52	%		0.08	%	2.3	%		2.91	%		0.69	%	23.7	%		3.53	%		2.51	%		1.02	%	40.6	%
Net interest margin²		3.71	%		3.77	%		(0.06	%)	(1.6	%)		4.01	%		(0.30	%)	(7.5	%)		3.75	%		4.20	%		(0.45	%)	(10.7	%)

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)

	September 30,			June 30,			$			%		September 30,			$			%
		2024			2024		Change			Change			2023		Change			Change
ASSETS
Cash and due from banks	$	14,892		$	11,667		$	3,225		27.6	%	$	11,188		$	3,704		33.1	%
Interest-earning deposits at the FRB and other banks		241,094			101,415			139,679		137.7	%		335,016			(93,922	)	(28.0	%)
Investment securities¹		63,208			73,051			(9,843	)	(13.5	%)		61,617			1,591		2.6	%
Loans held-for-sale		198,021			209,144			(11,123	)	(5.3	%)		219,355			(21,334	)	(9.7	%)

Loans held-for-investment		1,222,865			1,228,496			(5,631	)	(0.5	%)		1,201,230			21,635		1.8	%
Less: Allowance for credit losses ("ACL")		(15,948	)		(16,042	)		94		0.6	%		(15,284	)		(664	)	(4.3	%)
Loans held-for-investment, net		1,206,917			1,212,454			(5,537	)	(0.5	%)		1,185,946			20,971		1.8	%

Other real estate owned ("OREO")		521			-			521		100.0	%		55			466		847.3	%
Restricted stock investments		11,011			11,011			-		-			11,011			-		-
Servicing assets		7,192			7,404			(212	)	(2.9	%)		7,873			(681	)	(8.6	%)
Goodwill		2,185			2,185			-		-			2,185			-		-
Intangible assets		224			235			(11	)	(4.7	%)		267			(43	)	(16.1	%)
Other assets		25,284			26,343			(1,059	)	(4.0	%)		24,799			485		2.0	%
Total assets	$	1,770,549		$	1,654,909		$	115,640		7.0	%	$	1,859,312		$	(88,763	)	(4.8	%)

LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing	$	318,807		$	281,243		$	37,564		13.4	%	$	406,033		$	(87,226	)	(21.5	%)
Interest-bearing		1,128,784			1,059,146			69,638		6.6	%		1,143,257			(14,473	)	(1.3	%)
Total deposits		1,447,591			1,340,389			107,202		8.0	%		1,549,290			(101,699	)	(6.6	%)

FHLB advances and other borrowing		50,000			50,000			-		-			50,000			-		-
Other liabilities		22,415			19,260			3,155		16.4	%		31,141			(8,726	)	(28.0	%)
Total liabilities		1,520,006			1,409,649			110,357		7.8	%		1,630,431			(110,425	)	(6.8	%)

Stockholders' Equity		250,543			245,260			5,283		2.2	%		228,881			21,662		9.5	%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,770,549		$	1,654,909		$	115,640		7.0	%	$	1,859,312		$	(88,763	)	(4.8	%)

CAPITAL RATIOS
Leverage ratio
Company		14.64	%		14.51	%		0.12	%	0.9	%		12.53	%		2.11	%	16.8	%
Bank		14.58	%		14.45	%		0.13	%	0.9	%		12.50	%		2.08	%	16.6	%
Common equity tier 1 risk-based capital ratio
Company		19.03	%		18.36	%		0.67	%	3.6	%		17.61	%		1.41	%	8.0	%
Bank		18.95	%		18.28	%		0.67	%	3.7	%		17.58	%		1.37	%	7.8	%
Tier 1 risk-based capital ratio
Company		19.03	%		18.36	%		0.67	%	3.6	%		17.61	%		1.41	%	8.0	%
Bank		18.95	%		18.28	%		0.67	%	3.7	%		17.57	%		1.38	%	7.8	%
Total risk-based capital ratio
Company		20.26	%		19.59	%		0.67	%	3.4	%		18.83	%		1.43	%	7.6	%
Bank		20.18	%		19.50	%		0.68	%	3.5	%		18.79	%		1.39	%	7.4	%

Earning Assets		1,736,199			1,623,117			113,082		7.0	%		1,828,229		$	(92,030	)	(5.0	%)
Outstanding Number of Shares¹		10,588,136			10,588,136			-		0.0	%		10,588,136			-		0.0	%
Tangible Common Equity Ratio		14.03	%		14.70	%		(0.67	%)	(4.6	%)		12.19	%		1.84	%	15.1	%

Tangible book value per share	$	23.44		$	22.94		$	0.50		2.2	%	$	21.39		$	2.05		9.6	%
Loans Held for Investments-to-Deposit ("LHFITD") ratio		84.48	%		91.65	%		(7.17	%)	(7.8	%)		77.53	%		6.95	%	9.0	%
Net Loan-to-Deposit ("LTD") ratio		97.05	%		106.06	%		(9.01	%)	(8.5	%)		90.71	%		6.34	%	7.0	%
Nonperforming assets	$	8,558		$	5,797		$	2,761		47.6	%	$	673		$	7,885		1171.6	%
Nonperforming assets as a % of loans held-for-investment		0.70	%		0.47	%		0.23	%	48.9	%		0.06	%		0.64	%	1066.7	%
ACL as a % of loans held-for-investment		1.30	%		1.31	%		(0.01	%)	(0.76	%)		1.27	%		0.03	%	2.4	%

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,
		2024			2024			2024			2023			2023

Interest income	$	28,380		$	27,755		$	28,463		$	29,624		$	29,450
Interest expense		12,904			12,391			12,655			12,462			11,442
Net interest income		15,476			15,364			15,808			17,162			18,008

Provision for credit losses		(100	)		200			400			-			-
Net interest income after provision for credit losses		15,576			15,164			15,408			17,162			18,008

Gain on sale of loans		991			1,064			1,489			838			419
Gain (loss) on sale of OREO		-			-			(1	)		-			-
SBA servicing fee income, net		760			768			633			690			639
Recovery on impaired servicing liability		-			-			10			-			-
Service charges and other income		465			503			430			436			402
Noninterest income		2,216			2,335			2,561			1,964			1,460

Salaries and employee benefits		5,884			5,927			6,024			5,356			5,569
Occupancy and equipment		1,149			1,114			1,122			1,128			1,103
Marketing expense		423			403			402			250			475
Professional expense		456			440			412			360			443
Other expenses		2,104			1,972			2,084			2,363			2,579
Noninterest expense		10,016			9,856			10,044			9,457			10,169

Income before income tax expense		7,776			7,643			7,925			9,669			9,299

Income tax expense		2,207			2,163			2,253			2,670			2,630

Net income	$	5,569		$	5,480		$	5,672		$	6,999		$	6,669

Effective tax rate		28.4	%		28.3	%		28.4	%		27.6	%		28.3	%

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		10,596,039			10,588,136			10,588,688			10,588,937			10,594,155

Basic EPS	$	0.53		$	0.51		$	0.54		$	0.66		$	0.63
Diluted EPS	$	0.53		$	0.51		$	0.54		$	0.66		$	0.63

FIVE-QUARTER 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,
		2024			2024			2023			2023			2023

Salaries and benefits	$	5,884		$	5,927		$	6,024		$	5,356		$	5,569
FTE at the end of period		178			172			168			169			172
Average FTE during the period		173			171			169			169			168
Salaries and benefits/average FTE¹	$	135		$	139		$	143		$	126		$	131
Salaries and benefits/average assets¹		1.38	%		1.42	%		1.41	%		1.18	%		1.22	%
Noninterest expense/average assets¹		2.35	%		2.36	%		2.35	%		2.08	%		2.22	%

¹	Annualized

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

	September 30,			June 30,			March 31,			December 31,			September 30,
		2024			2024			2024			2023			2023
ASSETS
Cash and due from banks	$	14,892		$	11,667		$	11,612		$	14,282		$	11,188
Interest-earning deposits at the FRB and other banks		241,094			101,415			181,366			233,255			335,016
Investment securities		63,208			73,051			59,143			59,883			61,617
Loans held-for-sale		198,021			209,144			198,167			218,258			219,355

Loans held-for-investment		1,222,865			1,228,496			1,194,439			1,204,009			1,201,230
Less: Allowance for credit losses		(15,948	)		(16,042	)		(16,048	)		(15,291	)		(15,284	)
Loans held-for-investment, net		1,206,917			1,212,454			1,178,391			1,188,718			1,185,946

Other real estate owned		521			-			-			55			55
Restricted stock investments		11,011			11,011			11,011			11,011			11,011
Servicing assets		7,192			7,404			7,560			7,673			7,873
Goodwill		2,185			2,185			2,185			2,185			2,185
Intangible assets		224			235			245			255			267
Other assets		25,284			26,343			23,581			24,838			24,799
Total assets	$	1,770,549		$	1,654,909		$	1,673,261		$	1,760,413		$	1,859,312

LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing	$	318,807		$	281,243		$	286,766		$	305,923		$	406,033
Interest-bearing		1,128,784			1,059,146			1,074,198			1,147,662			1,143,257
Total deposits		1,447,591			1,340,389			1,360,964			1,453,585			1,549,290

FHLB advances		50,000			50,000			50,000			50,000			50,000
Other liabilities		22,415			19,260			21,727			21,114			31,141
Total liabilities		1,520,006			1,409,649			1,432,691			1,524,699			1,630,431

Stockholders' Equity		250,543			245,260			240,570			235,714			228,881
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,770,549		$	1,654,909		$	1,673,261		$	1,760,413		$	1,859,312

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6
(Dollars in thousands)

	September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
	Balance		%		Balance		%		Balance		%		Balance		%		Balance		%

Construction	$	29,789	2.4	%	$	33,918	2.8	%	$	37,216	3.1	%	$	34,886	2.9	%	$	30,924	2.6	%
Commercial real estate		1,029,768	84.2	%		1,035,425	84.3	%		1,005,765	84.2	%		1,010,495	83.9	%		1,005,735	83.7	%
Commercial and industrial		112,588	9.2	%		108,742	8.9	%		101,784	8.5	%		108,123	9.0	%		113,374	9.4	%
Home mortgage		45,673	3.7	%		44,987	3.7	%		44,389	3.7	%		44,920	3.7	%		45,452	3.8	%
Consumer		537	0.0	%		782	0.1	%		668	0.1	%		630	0.1	%		616	0.1	%
Gross loans held-for-investment		1,218,355	99.6	%		1,223,854	99.6	%		1,189,822	99.6	%		1,199,054	99.6	%		1,196,101	99.6	%

Deferred loan fees/costs, net		4,510	0.4	%		4,642	0.4	%		4,617	0.4	%		4,955	0.4	%		5,129	0.4	%
Loans held-for-investment	$	1,222,865	100.0	%	$	1,228,496	100.0	%	$	1,194,439	100.0	%	$	1,204,009	100.0	%	$	1,201,230	100.0	%

Loans held-for-sale	$	198,021			$	209,144			$	198,167			$	218,258			$	219,355
Total loans receivable	$	1,420,886			$	1,437,640			$	1,392,606			$	1,422,267			$	1,420,585

FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7
(Dollars in thousands)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
		2024			2024			2024			2023			2023			2024			2023

SBA loans held-for-sale at beginning of the quarter/year	$	209,144		$	198,167		$	218,258		$	219,355		$	215,083		$	218,258		$	230,431
SBA loans originated/transferred from/to held-for-investment during the quarter/year		13,169			34,366			14,589			27,022			16,260			62,124			51,423
SBA loans sold during the quarter/year		(20,152	)		(19,508	)		(28,164	)		(21,749	)		(9,245	)		(67,824	)		(51,682	)
SBA loans principal paydown/payoff, net of advance		(4,140	)		(3,881	)		(6,516	)		(6,370	)		(2,743	)		(14,537	)		(10,817	)
SBA loans held-for-sale at end of the quarter/year	$	198,021		$	209,144		$	198,167		$	218,258		$	219,355		$	198,021		$	219,355

Gain on sale of SBA loans	$	991		$	1,064		$	1,489		$	838		$	419		$	3,544		$	2,371
Premium on sale (weighted average)		7.5	%		8.3	%		6.8	%		6.7	%		8.3	%		8.1	%		7.1	%

SBA loan production	$	23,227		$	45,126		$	18,089		$	37,821		$	24,270		$	68,353		$	70,002

FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8
(Dollars in thousands)

	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
		2024			2024			2023			2023			2023			2024			2023


SBA servicing assets @ beginning of the quarter/year	$	7,404		$	7,560		$	7,673		$	7,873		$	8,426		$	7,673		$	9,232

Newly added SBA servicing assets from SBA loans sold		377			395			555			430			182			1,327			988
Regular quarterly/annual servicing assets amortization		(332	)		(335	)		(332	)		(356	)		(371	)		(999	)		(1,153	)
SBA servicing assets amortized from SBA loans paid off/charged off		(257	)		(216	)		(336	)		(274	)		(364	)		(809	)		(1,194	)

Subtotal before impairment		7,192			7,404			7,560			7,673			7,873			7,192			7,873

Reversal of valuation allowance on servicing assets		-			-			-			-			-			-			-

SBA servicing assets @ the end of the quarter/year	$	7,192		$	7,404		$	7,560		$	7,673		$	7,873		$	7,192		$	7,873

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9
(Dollars in thousands)

	September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
	Balance		%		Balance		%		Balance		%		Balance		%		Balance		%

Noninterest-bearing demand	$	318,807	22.0	%	$	281,243	21.0	%	$	286,766	21.1	%	$	305,923	21.1	%	$	406,033	26.2	%
Interest-bearing demand		6,590	0.5	%		7,901	0.6	%		6,709	0.5	%		7,504	0.5	%		6,395	0.4	%
NOW & MMDA		246,157	17.0	%		240,951	18.0	%		229,642	16.9	%		237,548	16.3	%		227,283	14.7	%
Savings		78,356	5.4	%		80,360	6.0	%		84,999	6.2	%		88,689	6.1	%		78,969	5.1	%
TCDs of $250K and under		310,134	21.4	%		295,109	22.0	%		299,944	22.0	%		315,920	21.7	%		312,704	20.2	%
TCDs of $250K over		342,301	23.7	%		314,119	23.4	%		339,482	25.0	%		353,866	24.4	%		373,345	24.1	%
Wholesale deposits		145,246	10.0	%		120,706	9.0	%		113,422	8.3	%		144,135	9.9	%		144,561	9.3	%
Total Deposits	$	1,447,591	100.0	%	$	1,340,389	100.0	%	$	1,360,964	100.0	%	$	1,453,585	100.0	%	$	1,549,290	100.0	%

Recap:
Noninterest-bearing demand	$	318,807	22.0	%	$	281,243	21.0	%	$	286,766	21.1	%	$	305,923	21.0	%	$	406,033	26.2	%
Interest-bearing demand		6,590	0.5	%		7,901	0.6	%		6,709	0.5	%		7,504	0.5	%		6,395	0.4	%
NOW & MMDA		222,545	15.4	%		217,339	16.2	%		229,642	16.9	%		237,548	16.3	%		227,283	14.7	%
Savings		78,356	5.4	%		80,360	6.0	%		84,999	6.2	%		88,689	6.1	%		78,969	5.1	%
TCDs of $250K and under		310,134	21.4	%		295,109	22.0	%		299,944	22.0	%		315,920	21.7	%		312,704	20.2	%
Core Deposits		936,432	64.7	%		881,952	65.8	%		908,060	66.7	%		955,584	65.7	%		1,031,384	66.6	%

TCDs of $250K over		342,301	23.6	%		314,119	23.4	%		339,482	24.9	%		353,866	24.3	%		373,345	24.1	%
ICS MMDA		23,612	1.6	%		23,612	1.8	%
Wholesale deposits		145,246	10.0	%		120,706	9.0	%		113,422	8.3	%		144,135	9.9	%		144,561	9.3	%
Noncore Deposits		511,159	35.3	%		458,437	34.2	%		452,904	33.3	%		498,001	34.3	%		517,906	33.4	%
Total Deposits	$	1,447,591	100.0	%	$	1,340,389	100.0	%	$	1,360,964	100.0	%	$	1,453,585	100.0	%	$	1,549,290	100.0	%

FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10
(Dollars in thousands)

	3rd Qtr.			2nd Qtr.			1st Qtr.			4th Qtr.			3rd Qtr.
		2024			2024			2024			2023			2023
Allowance for Credit Losses
Balance at beginning of period	$	16,042		$	16,048		$	15,291		$	15,284		$	15,626
CECL transition provision								-			-			-
Provision for credit losses		-			200			743			-			-
Charge-offs		(108	)		(257	)					(2	)		(350	)
Recoveries		14			51			14			9			8
Balance at the end of period	$	15,948		$	16,042		$	16,048		$	15,291		$	15,284

Nonperforming Assets:¹
Over 90 days still accruing	$	994		$	-		$	1,605		$	399		$	2
Nonaccrual loans		7,043			5,797			2,842			2,030			616
Total nonperforming loans		8,037			5,797			4,447			2,429			618

Other real estate owned	$	521			-			-			55			55
Total nonperforming assets	$	8,558		$	5,797		$	4,447		$	2,484		$	673

Classified Assets:¹
Substandard	$	15,980		$	12,762		$	11,912		$	11,063		$	10,105
Doubtful		-			-			-			-			-
Loss
Total classified loans	$	15,980		$	12,762		$	11,912		$	11,063		$	10,105

Other real estate owned	$	521			-			-			55			55
Total classified assets	$	16,501		$	12,762		$	11,912		$	11,118		$	10,160

Performing modified loans:¹	$	452		$	464		$	3,811		$	3,336		$	3,336

Delinquent Loans:¹
Loans 30-89 days past due	$	4,308		$	8,613		$	16,907		$	5,981		$	10,620
90 days or more past due and still accruing		994			-			1,605			399			2
Nonaccrual		7,043			5,797			2,842			2,030			616
Total delinquent loans	$	12,345		$	14,410		$	21,354		$	8,410		$	11,238

Asset Quality Ratios:
Net (recoveries) charge-offs to average loans²		0.03	%		0.06	%		0.00	%		0.00	%		0.10	%
Nonaccrual loans to loans held-for-investment		0.58	%		0.47	%		0.24	%		0.17	%		0.05	%
Nonperforming loans to loans held-for-investment		0.66	%		0.47	%		0.37	%		0.20	%		0.05	%
Nonperforming assets to total assets		0.48	%		0.35	%		0.27	%		0.14	%		0.04	%
Classified loans to loans held-for-investment		1.31	%		1.04	%		1.00	%		0.92	%		0.84	%
Classified loans to Tier 1 and ACL		6.05	%		4.93	%		4.69	%		4.45	%		4.18	%
Classified assets to total assets		0.93	%		0.77	%		0.71	%		0.63	%		0.55	%
Classified assets to Tier 1 and ACL		6.25	%		4.93	%		4.69	%		4.47	%		4.20	%
ACL to loans held-for-investment		1.30	%		1.31	%		1.34	%		1.27	%		1.27	%
ACL to nonaccrual loans		226.44	%		276.73	%		564.67	%		753.25	%		2481.17	%
ACL to nonperforming loans		198.43	%		276.73	%		360.87	%		629.52	%		2473.14	%
ACL to nonperforming assets		186.35	%		276.73	%		360.87	%		615.58	%		2271.03	%
Texas ratio ³		3.24	%		2.24	%		1.75	%		1.00	%		0.28	%

¹		Net of SBA guaranteed balance
²		Includes loans held-for-sale
³		Nonperforming assets divided by tangible common equity and ACL

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11

	Well Capitalized		Adequately Capitalized		September 30,			June 30,			March 31,			December 31,			September 30,
	Regulatory		BASEL III
	Requirement		Fully Phased In			2024			2024			2024			2023			2023

Leverage ratio
Company	N/A		N/A			14.64	%		14.51	%		13.85	%		12.98	%		12.53	%
Bank	5.00	%	4.00	%		14.58	%		14.45	%		13.84	%		12.96	%		12.50	%
Common equity tier 1 risk-based capital ratio
Company	N/A		N/A			19.03	%		18.36	%		18.67	%		18.08	%		17.61	%
Bank	6.50	%	7.00	%		18.95	%		18.28	%		18.65	%		18.05	%		17.58	%
Tier 1 risk-based capital ratio
Company	N/A		N/A			19.03	%		18.36	%		18.67	%		18.08	%		17.61	%
Bank	8.00	%	8.50	%		18.95	%		18.28	%		18.65	%		18.05	%		17.57	%
Total risk-based capital ratio
Company	N/A		N/A			20.26	%		19.59	%		19.92	%		19.30	%		18.83	%
Bank	10.00	%	10.50	%		20.18	%		19.50	%		19.91	%		19.27	%		18.79	%

Tangible common equity/total assets						14.03	%		14.70	%		14.25	%		13.27	%		12.19	%
Tangible common equity per share					$	23.44		$	22.94		$	22.49		$	22.03		$	21.39

FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12
(Dollars in thousands)

	Three Months Ended
	September 30, 2024							June 30, 2024							March 31, 2024							December 31, 2023							September 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																						Checked
INTEREST-EARNING ASSETS
Loans Receivable¹	$	1,427,123		$	25,357	7.07	%	$	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	%
Investment securities ²		68,198			734	4.28	%		70,052			723	4.15	%		59,554			575	3.88	%		60,094			563	3.72	%		64,587			577	3.54	%
Interest-earning deposits at the FRB and other banks		158,127			2,139	5.38	%		146,956			1,995	5.46	%		207,155			2,817	5.47	%		288,769			3,973	5.46	%		293,081			3,994	5.41	%
Other earning assets		11,011			200	7.23	%		11,011			200	7.31	%		11,011			214	7.82	%		11,011			212	7.64	%		11,011			196	7.06	%
Total interest-earning assets ²		1,664,459			28,430	6.80	%		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	%

NONINTEREST-EARNING ASSETS
Cash and due from banks		12,527							12,907							12,172							12,567							13,045
Other noninterest-earning assets		34,395							33,263							31,967							32,985							33,331
Total noninterest-earning assets		46,922							46,170							44,139							45,552							46,376

Less: Allowance for credit losses		(16,024	)						(16,058	)						(15,322	)						(15,291	)						(15,622	)

TOTAL ASSETS	$	1,695,357						$	1,676,589						$	1,722,461						$	1,801,106						$	1,816,581

INTEREST-BEARING DEPOSITS
Interest-bearing demand	$	11,007		$	6	0.22	%	$	11,864		$	6	0.20	%	$	12,680		$	6	0.19	%	$	12,657		$	7	0.22	%	$	12,347		$	6	0.19	%
Money market		236,834			2,555	4.29	%		230,261			2,272	3.97	%		229,441			2,285	4.01	%		222,289			2,158	3.85	%		211,152			1,907	3.58	%
Savings		79,289			689	3.46	%		82,215			700	3.42	%		84,854			724	3.43	%		82,403			664	3.20	%		70,579			494	2.78	%
Time deposits		767,607			9,536	4.94	%		759,954			9,296	4.92	%		801,122			9,523	4.78	%		824,900			9,515	4.58	%		820,335			8,916	4.31	%
Total interest-bearing deposits		1,094,737			12,786	4.65	%		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	%

Borrowings		50,000			118	0.94	%		50,013			117	0.94	%		50,000			117	0.94	%		50,001			118	0.94	%		50,001			119	0.94	%
Total interest-bearing liabilities		1,144,737			12,904	4.48	%		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	%

Noninterest-bearing deposits		280,670							279,765							284,867							350,656							397,791
Other liabilities		21,376							19,287							21,112							25,602							27,519

Stockholders' equity		248,574							243,230							238,385							232,598							226,857
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,695,357						$	1,676,589						$	1,722,461						$	1,801,106						$	1,816,581

Net interest income²				$	15,526						$	15,414						$	15,857						$	17,212						$	18,059

Net interest spread						2.32	%						2.40	%						2.45	%						2.50	%						2.65	%

Effect of noninterest-bearing sources						1.39	%						1.37	%						1.32	%						1.36	%						1.36	%

Net interest margin²						3.71	%						3.77	%						3.77	%						3.86	%						4.01	%


Cost of deposits	$	1,375,407		$	12,786	3.70	%	$	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	%

Cost of funds	$	1,425,407		$	12,904	3.60	%	$	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		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
	September 30, 2024					June 30, 2024					March 31, 2024					December 31, 2023					September 30, 2023
	Amount			Yield		Amount			Yield		Amount			Yield		Amount			Yield		Amount			Yield

Contractual yield	$	24,544		6.84	%	$	24,271		6.88	%	$	24,138		6.86	%	$	24,235		6.81	%	$	23,932		6.70	%
SBA discount accretion		806		0.23	%		736		0.21	%		926		0.26	%		845		0.24	%		921		0.25	%
Prepayment penalties and late fees		184		0.05	%		36		0.01	%		67		0.01	%		40		0.01	%		18		0.01	%
Amortization of net deferred costs		(177	)	-0.05	%		(156	)	-0.04	%		(225	)	-0.06	%		(194	)	-0.05	%		(137	)	-0.04	%
As reported yield on loans	$	25,357		7.07	%	$	24,887		7.06	%	$	24,906		7.07	%	$	24,926		7.01	%	$	24,734		6.92	%

MARGIN ANALYSIS (Unaudited) - Table 14
(Dollars in thousands)

	Six Months Ended
	September 30, 2024							September 30,2023
	Avg Balance			Interest		Yield		Avg Balance			Interest		Yield
Number of Days in the Period
INTEREST-EARNING ASSETS
Loans Receivable ¹	$	1,420,526		$	75,150	7.07	%	$	1,454,301		$	73,774	6.78	%
Investment securities ²		65,943			2,032	4.12	%		67,543			1,749	3.46	%
Interest-earning deposits at the FRB and other banks		170,700			6,951	5.44	%		247,712			9,468	5.11	%
Other earning assets		11,011			614	7.45	%		10,655			523	6.56	%
Total interest-earning assets ²		1,668,180			84,747	6.79	%		1,780,211			85,514	6.42	%

NONINTEREST-EARNING ASSETS
Cash and due from banks		12,535							13,362
Other noninterest-earning assets		32,885							34,634
Total noninterest-earning assets		45,420							47,996

Less: Allowance for credit losses		(15,802	)						(15,601	)

TOTAL ASSETS	$	1,697,798						$	1,812,606

INTEREST-BEARING DEPOSITS
Interest-bearing demand	$	11,848		$	18	0.20	%	$	14,943		$	22	0.20	%
Money market		232,195			7,112	4.09	%		211,887			4,789	3.02	%
Savings		82,109			2,113	3.44	%		63,369			983	2.07	%
Time deposits		776,196			28,355	4.88	%		818,953			23,394	3.82	%
Total interest-bearing deposits		1,102,348			37,598	4.56	%		1,109,152			29,188	3.52	%

Borrowings		50,004			352	0.94	%		50,000			352	0.94	%
Total interest-bearing liabilities		1,152,352			37,950	4.40	%		1,159,152			29,540	3.41	%

Noninterest-bearing deposits		281,763							411,370
Other liabilities		20,268							21,808

Stockholders' equity		243,415							220,276

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,697,798						$	1,812,606

Net interest income²				$	46,797						$	55,974

Net interest spread						2.39	%						3.01	%

Effect of noninterest-bearing sources						1.36	%						1.19	%

Net interest margin²						3.75	%						4.20	%


Cost of deposits	$	1,384,111		$	37,598	3.63	%	$	1,520,522		$	29,188	2.57	%

Cost of funds	$	1,434,115		$	37,950	3.53	%	$	1,570,522		$	29,540	2.51	%

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)

	Nine Months Ended
	September 30, 2024					September 30, 2023
	Amount			Yield		Amount			Yield

Contractual yield	$	72,953		6.86	%	$	71,342		6.56	%
SBA discount accretion		2,468		0.23	%		2,982		0.27	%
Prepayment penalties and late fees		287		0.03	%		108		0.01	%
Amortization of net deferred costs		(558	)	-0.05	%		(658	)	-0.06	%
As reported yield on loans	$	75,150		7.07	%	$	73,774		6.78	%

View source version on businesswire.com: https://www.businesswire.com/news/home/20241024124174/en/

Contacts

Richard Koh, EVP & CFO
(323) 988-3037
RichardK@cbb-bank.com

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