For the year 2022, net income increased 8.7% to a record
The Company’s Board of Directors declared a quarterly cash dividend of
“Total assets increased
“The growth in earning assets also helped keep our net interest margin stable compared to the prior quarter. The Company’s net interest margin was 3.57% in the fourth quarter of 2022, which was a 9 basis point increase compared to the preceding quarter, and a 12 basis point decrease compared to 3.69% in the fourth quarter a year ago, when PPP loan fees and interest added 50 basis points to the margin,” said Keller. “While we have been successful in managing our net interest margin, we have not been immune to the liquidity and deposit pricing pressures resulting from the Federal Reserve’s increasing interest rate program. These challenges became more pronounced in
“Credit quality remains strong and we are well positioned to transition to the CECIL loan loss methodology. However, additional loan growth or potential adjustments to the loan loss model inputs, most specifically a rising unemployment rate, will require additional provisions,” said
Fourth Quarter 2022 Financial Highlights (at or for the period ended
- Net income was
$2.39 million in the fourth quarter of 2022, compared to$1.75 million in the fourth quarter a year ago, and$2.21 million in the preceding quarter. Earnings per common share was$0.28 in the fourth quarter of 2022, compared to$0.20 in the fourth quarter a year ago, and$0.25 in the preceding quarter. - Pre-tax, pre-provision, pre-CDFI grant income was
$3.39 million in the fourth quarter of 2022, compared to$1.74 million in the year ago quarter, and$3.14 million in the third quarter of 2022. - Total assets increased
$976.0 million , or 36.4%, to$976.0 million atDecember 31, 2022 , compared to$715.6 million a year earlier, and decreased$38.2 million , or 3.8%, compared to$1.04 billion three months earlier. Average assets for the quarter totaled$999.3 million , an increase of$258.1 million , or 34.8%, from the fourth quarter a year ago and an increase of$88.9 million , or 9.8%, compared with the prior quarter. - Net interest income, before the provision for loan losses, increased 31.4% to
$8.75 million in the fourth quarter of 2022, compared to$6.66 million in the fourth quarter a year ago. There was no provision for loan losses recorded in the fourth quarter of 2022, or the third quarter of 2022. This compared to a$200,000 provision for loan losses in the fourth quarter of 2021. - Non-interest income was
$253,000 in the fourth quarter of 2022, compared to$226,000 in the fourth quarter a year ago, and$205,000 in the preceding quarter. - Operating revenue (net interest income before the provision for loan losses plus non-interest income) increased 30.7% to
$9.00 million in the fourth quarter of 2022, compared to$6.88 million in the fourth quarter a year ago, and increased 12.8% compared to$7.98 million in the third quarter of 2022. - Net interest margin was 3.57% in the fourth quarter, compared to 3.48% in the preceding quarter, and 3.69% in the fourth quarter a year ago. The contraction in net interest margin in the fourth quarter of 2022 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 fourth quarter was 5.09%, compared to 4.21% in the year ago quarter and 4.75% in the prior quarter. The average cost of funds in the fourth quarter was 1.16%, a 93 basis point increase compared to the fourth quarter a year ago and a 40 basis points increase compared to the prior quarter.
- Loans, net of unearned income, increased
$118.8 million , or 22.1%, to$657.7 million atDecember 31, 2022 , compared to$538.8 million a year ago, and increased$59.9 million , or 10.0%, compared to$597.8 million three months earlier. Loan growth, excluding PPP loans, totaled$61.2 million for the quarter, driving increased interest income. AtDecember 31, 2022 , net non-PPP loans totaled$657.0 million , a 10.3% increase compared to$595.8 million atSeptember 30, 2022 , and a 31.3% increase compared to$500.2 million atDecember 31, 2021 . In addition, atDecember 31, 2022 , the unused portion of credit commitments totaled$150.8 million compared to$167.4 million in the prior quarter and$159.3 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$0.7 million in gross PPP loans remaining on its books. Approximately$36,000 of the fee income recognized during the fourth quarter of 2022 was related to these PPP loan payoffs, compared to$60,000 of the fee income recognized during the preceding quarter and$829,000 of fee income recognized during the fourth quarter of 2021. AtDecember 31, 2022 , approximately$13,000 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 increased
$95.7 million , or 15.7%, to$705.9 million atDecember 31, 2022 , compared to$610 .2 million a year ago, and decreased$97.7 million , or 12.2%, compared to$803.6 million three months earlier. Noninterest bearing demand deposit accounts decreased 14.5% compared to a year ago and represented 28.8% of total deposits. Savings, NOW and money market accounts increased 20.3% compared to a year ago and represented 50.3% of total deposits. Due to rising interest rates, CDs increased 91.0% compared to a year ago and comprised 20.9% of the total deposit portfolio, atDecember 31, 2022 . For the quarter, the overall cost of funds was 116 basis points (“bp”) compared to 76 bp in the prior quarter, and 23 bp in the fourth quarter a year ago. - Asset quality remained very strong with 0.046% nonperforming loans at
December 31, 2022 . This compares to no nonperforming loans atSeptember 30, 2022 , and nonperforming loans at 0.005% of total loans atDecember 31, 2021 . - The allowance for loan losses was
$6.89 million , or 1.05% of total loans atDecember 31, 2022 , compared to$6.28 million , or 1.17% of total loans atDecember 31, 2021 . The allowance, as a percentage of non-guaranteed loans, was 1.06% atDecember 31, 2022 , compared to 1.28% a year ago. The allowance for loan losses reflects management’s assessment of the current economic environment. - Primarily due to the capital raise, total equity increased 171.7% to
$184.9 million as ofDecember 31, 2022 , compared to$68.0 million a year ago. The Bank’s capital levels remained well aboveFDIC “Well Capitalized” standards as ofDecember 31, 2022 , with a Tier 1 capital ratio of 25.18%; Common Equity Tier 1 capital ratio of 9.46%; Total capital ratio of 26.10%; and Leverage ratio of 19.26%. - Book value per common share totaled
$7.50 as ofDecember 31, 2022 , compared to$7.67 per common share a year ago. - Declared a quarterly cash dividend of
$0.045 per share. The dividend is payableMarch 6, 2023 to shareholders of record onFebruary 24, 2023 .
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
FINANCIAL TABLES TO FOLLOW:
Quarterly Financial Summary (Unaudited) | |||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||
Three Months Ended | |||||||||||||||||
Earnings and dividends: | |||||||||||||||||
Interest income | $ | 11,099 | $ | 9,151 | $ | 7,756 | $ | 6,900 | $ | 7,051 | |||||||
Interest expense | 2,354 | 1,377 | 544 | 410 | 395 | ||||||||||||
Net interest income | 8,745 | 7,774 | 7,212 | 6,490 | 6,656 | ||||||||||||
Provision for loan losses | - | - | 400 | - | 200 | ||||||||||||
Noninterest income | 253 | 205 | 376 | 180 | 226 | ||||||||||||
Noninterest expense | 5,609 | 4,835 | 4,583 | 4,361 | 4,192 | ||||||||||||
Provision for income taxes | 1,001 | 930 | 769 | 683 | 736 | ||||||||||||
Net income | 2,388 | 2,214 | 1,836 | 1,626 | 1,754 | ||||||||||||
Share data: | |||||||||||||||||
Basic earnings per common share | $ | 0.28 | $ | 0.25 | $ | 0.21 | $ | 0.18 | $ | 0.20 | |||||||
Dividends declared per common share | 0.045 | 0.045 | 0.045 | 0.045 | 0.040 | ||||||||||||
Book value per common share | 7.50 | 7.27 | 7.50 | 7.56 | 7.67 | ||||||||||||
Common shares outstanding, 30,000,000 authorized | 8,728,802 | 8,591,052 | 8,871,052 | 8,871,052 | 8,871,052 | ||||||||||||
Average common shares outstanding | 8,664,401 | 8,685,400 | 8,871,052 | 8,871,052 | 8,871,052 | ||||||||||||
Balance sheet - average balances: | |||||||||||||||||
Loans receivable, net | $ | 627,608 | $ | 584,807 | $ | 530,579 | $ | 493,238 | $ | 467,401 | |||||||
PPP loans | 1,215 | 4,289 | 8,900 | 26,894 | 48,887 | ||||||||||||
Earning assets | 972,965 | 885,777 | 797,259 | 735,506 | 716,749 | ||||||||||||
Total assets | 999,316 | 910,388 | 825,631 | 759,409 | 741,266 | ||||||||||||
Deposits | 764,127 | 697,174 | 695,945 | 660,149 | 644,639 | ||||||||||||
Borrowings | 42,652 | 19,500 | 24,170 | 23,589 | 23,619 | ||||||||||||
Preferred equity (ECIP) | 119,413 | 119,413 | 31,494 | - | - | ||||||||||||
Shareholders' common equity | 63,038 | 65,688 | 66,833 | 67,820 | 67,395 | ||||||||||||
Ratios: | |||||||||||||||||
Return on average assets | 0.95 | % | 0.96 | % | 0.89 | % | 0.87 | % | 0.94 | % | |||||||
Return on average common equity | 15.03 | % | 13.37 | % | 11.02 | % | 9.72 | % | 10.33 | % | |||||||
Yield on earning assets | 4.53 | % | 4.10 | % | 3.90 | % | 3.80 | % | 3.90 | % | |||||||
Cost of interest-bearing deposits | 1.49 | % | 1.08 | % | 0.40 | % | 0.27 | % | 0.26 | % | |||||||
Cost of funds | 1.16 | % | 0.76 | % | 0.30 | % | 0.24 | % | 0.23 | % | |||||||
Net interest margin | 3.57 | % | 3.48 | % | 3.63 | % | 3.58 | % | 3.69 | % | |||||||
Efficiency ratio | 62.34 | % | 60.60 | % | 60.40 | % | 65.38 | % | 60.91 | % | |||||||
Asset quality: | |||||||||||||||||
Net loan (charge-offs) recoveries to average loans | -0.003 | % | 0.001 | % | 0.000 | % | 0.042 | % | 0.000 | % | |||||||
Nonperforming loans to gross loans | 0.046 | % | 0.000 | % | 0.000 | % | 0.004 | % | 0.005 | % | |||||||
Nonperforming assets to total assets | 0.031 | % | 0.000 | % | 0.000 | % | 0.003 | % | 0.004 | % | |||||||
Allowance for loan losses to gross loans | 1.05 | % | 1.16 | % | 1.17 | % | 1.25 | % | 1.16 | % |
Consolidated Balance Sheets (Unaudited) | |||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||
Assets | |||||||||||||
Cash and due from | $ | 40,934 | $ | 177,930 | $ | 81,942 | |||||||
Interest bearing deposits | 11,165 | 11,165 | 11,160 | ||||||||||
Available-for-sale securities | 209,763 | 172,662 | 53,010 | ||||||||||
Held-to-maturity securities | 34,500 | 34,500 | 18,000 | ||||||||||
Commercial | 128,221 | 122,397 | 131,428 | ||||||||||
PPP | 666 | 2,000 | 38,631 | ||||||||||
CRE (Owner occupied) | 113,450 | 109,200 | 107,823 | ||||||||||
CRE (Non-owner occupied) | 327,478 | 276,469 | 182,310 | ||||||||||
Construction and land | 51,731 | 51,863 | 44,164 | ||||||||||
Consumer and other | 37,990 | 37,514 | 37,708 | ||||||||||
Unearned fees, net | (1,857 | ) | (1,653 | ) | (2,262 | ) | |||||||
Allowance for loan losses | (6,889 | ) | (6,911 | ) | (6,281 | ) | |||||||
Net Loans | 650,790 | 590,879 | 533,521 | ||||||||||
Premises and equipment | 1,046 | 1,092 | 1,292 | ||||||||||
Life insurance assets | 7,785 | 7,732 | 7,579 | ||||||||||
Accrued interest receivable and other assets | 20,050 | 18,290 | 9,050 | ||||||||||
Total assets | $ | 976,033 | $ | 1,014,250 | $ | 715,554 | |||||||
Liabilities and Shareholders' Equity | |||||||||||||
Liabilities | |||||||||||||
Deposits | |||||||||||||
Demand | $ | 203,014 | $ | 228,651 | $ | 237,541 | |||||||
Saving, NOW and money market | 355,282 | 427,259 | 295,401 | ||||||||||
Time | 147,613 | 147,671 | 77,292 | ||||||||||
Total deposits | 705,909 | 803,581 | 610,234 | ||||||||||
FHLB Advances | 74,500 | 19,500 | 33,500 | ||||||||||
Interest payable and other liabilities | 10,750 | 9,285 | 3,786 | ||||||||||
Total liabilities | 791,159 | 832,366 | 647,520 | ||||||||||
Shareholders' Equity | |||||||||||||
Preferred stock, | 119,413 | 119,413 | - | ||||||||||
Common stock, without par value | 51,264 | 49,500 | 51,768 | ||||||||||
Retained earnings | 22,001 | 21,111 | 16,531 | ||||||||||
Accumulated other comprehensive income (expense) | (7,804 | ) | (8,140 | ) | (265 | ) | |||||||
Total shareholders' equity | 184,874 | 181,884 | 68,034 | ||||||||||
Total liabilities and shareholders' equity | $ | 976,033 | $ | 1,014,250 | $ | 715,554 |
Consolidated Statements of Income (Unaudited) | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
Interest Income | ||||||||||||||||
Loans | $ | 8,375 | $ | 7,384 | $ | 6,620 | $ | 28,808 | $ | 24,972 | ||||||
Securities | 1,877 | 1,384 | 368 | 4,697 | 1,114 | |||||||||||
Federal funds sold and deposits in banks | 847 | 383 | 63 | 1,562 | 244 | |||||||||||
Total interest income | 11,099 | 9,151 | 7,051 | 35,067 | 26,330 | |||||||||||
Interest Expense | ||||||||||||||||
Deposits | 2,026 | 1,273 | 260 | 4,020 | 1,180 | |||||||||||
Borrowings | 328 | 104 | 135 | 665 | 595 | |||||||||||
Total interest expense | 2,354 | 1,377 | 395 | 4,685 | 1,775 | |||||||||||
Net Interest Income | 8,745 | 7,774 | 6,656 | 30,382 | 24,555 | |||||||||||
Provision for Loan Losses | - | - | 200 | 400 | 850 | |||||||||||
Net Interest Income After Provision for Loan Losses | 8,745 | 7,774 | 6,456 | 29,982 | 23,705 | |||||||||||
Noninterest income | ||||||||||||||||
Service charges | 50 | 54 | 42 | 214 | 161 | |||||||||||
Gains on sale of loans | - | - | - | - | - | |||||||||||
Government grant | - | - | - | 171 | 1,826 | |||||||||||
Other | 203 | 151 | 184 | 467 | 624 | |||||||||||
Total noninterest income | 253 | 205 | 226 | 852 | 2,611 | |||||||||||
Noninterest Expense | ||||||||||||||||
Salaries and employee benefits | 3,046 | 2,815 | 2,502 | 11,233 | 9,545 | |||||||||||
Net occupancy and equipment expense | 337 | 342 | 298 | 1,214 | 1,236 | |||||||||||
Software and data processing fees | 637 | 615 | 501 | 2,327 | 1,857 | |||||||||||
Professional fees | 270 | 223 | 157 | 843 | 605 | |||||||||||
Marketing and business development | 240 | 166 | 83 | 699 | 375 | |||||||||||
62 | 38 | 123 | 312 | 492 | ||||||||||||
Other | 1,017 | 636 | 528 | 2,763 | 1,660 | |||||||||||
Total noninterest expense | 5,609 | 4,835 | 4,192 | 19,391 | 15,770 | |||||||||||
Income before Income Tax | 3,389 | 3,144 | 2,490 | 11,443 | 10,546 | |||||||||||
Provision for Income Taxes | 1,001 | 930 | 736 | 3,382 | 3,132 | |||||||||||
Net Income | $ | 2,388 | $ | 2,214 | $ | 1,754 | $ | 8,061 | $ | 7,414 | ||||||
Basic Earnings Per Share | $ | 0.28 | $ | 0.25 | $ | 0.20 | $ | 0.92 | $ | 0.84 |
Additional Financial Information | ||||||||||||
(Dollars in thousands except per share amounts)(Unaudited) | ||||||||||||
Asset Quality Ratios and Data: | ||||||||||||
Nonaccrual loans (excluding restructured loans) | $ | 301 | $ | - | $ | 27 | ||||||
Nonaccrual restructured loans | - | - | - | |||||||||
Loans past due 90 days and still accruing | - | - | - | |||||||||
Total non-performing loans | 301 | - | 27 | |||||||||
OREO and other non-performing assets | - | - | - | |||||||||
Total non-performing assets | $ | 301 | $ | - | $ | 27 | ||||||
Nonperforming loans to gross loans | 0.046% | 0.000% | 0.005% | |||||||||
Nonperforming assets to total assets | 0.031% | 0.000% | 0.004% | |||||||||
Allowance for loan losses to gross loans | 1.05% | 1.16% | 1.16% | |||||||||
Performing restructured loans (RC-C) | $ | 123 | $ | 124 | $ | 127 | ||||||
Net (charge-offs) recoveries quarter ending | $ | (21 | ) | $ | 8 | $ | - |
Contacts:
510-433-5404
wkeller@BankCBB.com
Source:
2023 GlobeNewswire, Inc., source