Press Release

CBB Bancorp, Inc. Reports ROA of 1.51% and ROE of 13.77% for the Third Quarter of 2018

Company Release - 10/29/2018 9:00 AM ET

Deposits reach $1.06 billion and nonperforming assets as a percentage of total assets were less than .05%

LOS ANGELES--(BUSINESS WIRE)-- CBB Bancorp, Inc. (“CBB” or the “Company”) (OTCQB: CBBI), the holding company of Commonwealth Business Bank (the “Bank”), today announced net income for the third quarter of 2018 of $4.4 million, or $0.42 per diluted share, an increase of 17.9% compared to $3.7 million or $0.36 per diluted share in the same period last year. Earnings per share and per share data has 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, 2018 of $13.0 million or $1.25 per diluted share, an increase of 17.8% from the $11.0 million or $1.06 per diluted share, for the same period in 2017.

Third quarter 2018 net income generated returns on average assets (ROA) and average equity (ROE) of 1.51% and 13.77%, respectively, with both measures up from the same quarter in 2017. On a nine-month year-to-date basis, ROA and ROE were 1.59% and 14.33%, respectively. Third quarter and nine-month year-to-date financial performance was driven by loan portfolio growth and over $135 million in year to date SBA loan originations.

Joanne Kim, President and CEO, commented, “While we are pleased with our financial performance through the first nine months of the year, we are starting to see the impact of higher interest rates as SBA loan originations have slowed and the premiums we earn on loan sales have been declining, along with higher funding costs.”

Additionally, Ms. Kim commented, “With regard to our internal operations and staffing, we are now a $1 billion-plus bank and we have added to staff and systems to handle the additional compliance and regulatory reporting requirements.”

Net Interest Income and Margin:

Net Interest Income

Net interest income for the quarter ended September 30, 2018 was $12.0 million, an increase of $1.6 million or 15.6% over the same period last year. For the nine months ended September 20, 2018, net interest income improved to $34.0 million, an increase of $5.1 million or 17.7% over the corresponding period last year. The increase in net interest income is primarily driven by loan growth and an asset sensitive loan portfolio.

Net Interest Margin

The net interest margin for Q3 2018 of 4.29% compares favorably with the margin of 4.24% in the same period last year. For the nine months ended September 30, 2018, the margin was 4.30% compared to 4.21% for the corresponding period in 2017. The net interest margin for the nine-month year-to-date period benefited from the recovery of $535 thousand of non-accrual interest that increased the reported loan yield by 0.08%.

CEO Kim added, “We are seeing heightened deposit competition from the traditional sources such as community banks and credit unions and now from the larger nationwide banks with ‘specials’ and also from money market funds and fin-techs.”

Provision for Loan Losses:

The provision for loan losses for the quarter and nine months ended September 30, 2018 was $400 thousand and $1.2 million, respectively, compared with lower amounts of $164 thousand and $514 thousand, respectively, for the corresponding periods last year. Non-performing assets as of September 30, 2018 were $464 thousand and the ratio of the allowance for loan losses to non-performing assets had coverage of over 21 times, compared with year-end levels of $2.5 million and 3.5-times coverage, respectively. The provision for loan losses for the quarter and nine-month periods ended September 30, 2018 reflects an increase in specific reserves on classified assets and overall loan portfolio growth, partially offset by qualitative factor improvements.

Non-Interest Income:

Quarterly non-interest income for 2018’s Q3, Q2 and Q1 was $2.2 million, $3.5 million and $3.3 million, respectively. For the nine months ended September 30, 2018, non-interest income was $9.1 million compared to $10.6 million in the corresponding period last year, resulting in a decrease of $1.6 million or 14.8%. The declines in the 2018 three- and nine-month periods were primarily due to the following:

  • The net premium percentage realized on loans sold in Q3, Q2 and Q1 was 8.10%, 9.52%, and 9.71%, respectively, on sales volumes of $34.7 million, $35.0 million and $34.9 million, respectively. The quarterly gain on the sale of the loans declined to less than $2.0 million compared to $2.5 million and $2.4 million, respectively, in Q2 and Q1. The decline in the net premium percentage reflects the rising interest rate environment and increasing prepayment speeds on SBA loans.
  • As part of management’s periodic review of the value of its SBA servicing assets, Management looked at various model inputs, including the discount rate, prepayment speeds and other market conditions such as the increases in the prime rate and the decline in the premium earned on SBA loan sales. As a result of this analysis, an impairment charge of $534 thousand was recorded in non-interest income in Q3, 2018.

Non-Interest Expense:

Non-interest expense for the quarter ended September 30, 2018 were $8.0 million compared to $7.7 million in the corresponding period last year, an increase of $294 thousand or 3.8%. For the nine months ended September 30, 2018, non-interest expenses were $23.6 million compared to $20.4 million for the corresponding period last year, an increase of $3.2 million or 15.8%. Staffing additions related to compliance and corporate overhead positions, along with staff additions and facilities costs associated with two new branches and one loan production department office, along with the formation of a bank holding company, were the primary contributors to increased non-interest expense.

Staffing:

  • CBB Bank opened its Carrollton Branch in Dallas, Texas, on July 24, 2017 and its Olympic branch in Los Angeles’ Koreatown on July 5, 2017. Deposits at the Carrollton and Olympic branches were $21.3 million and $113.6 million as of September 30, 2018, respectively.
  • A new commercial lending department office was opened in Fullerton branch in Orange County, California, in the spring of 2018.
  • Additional staff have been added at headquarters for Bank Secrecy Act, compliance, internal audit and other support functions.
  • At the end of September, CBB Bank hired a permanent CFO to replace the interim position and is now in the process of building outs its finance and treasury staff.

Occupancy & Equipment:

  • Occupancy and equipment expense for the nine-month periods ended September 30, 2018 and 2017 was $2.6 million and $2.0 million, respectively, an increase of $517 thousand or 25.3%. This increase is primarily due in part to the 2017 openings of the Olympic branch in Los Angeles, California, and the Carrollton branch in Dallas, Texas.
  • Professional fees remain elevated at over $500 thousand per quarter due to the formation of the holding company in Q4 of 2017 and increased audit and compliance costs associated with increased regulatory requirements resulting from being a bank holding company and the growth in our assets.

Income Taxes:

The Company’s effective tax rate for the quarter ended September 30, 2018 was approximately 24.6%, down from 29.7% and 30.7% in Q2 and Q1 of 2018, respectively. The decrease in the effective rate in Q3 is 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, 2018 was 28.4%, compared to 40.5% for the same period last year. Comparisons of tax rates between 2018 and 2017 are impacted by the announcement date of the Tax Act of December 22, 2017 in which the federal corporate tax rate decreased to 21.0% from 35.0% for 2018. Income tax expense for Q4 of 2017 included an additional charge of $2.0 million (an additional 39.1%) relating to the revaluation of deferred taxes due to the reduction in the federal corporate rate resulting in an effective tax rate of 80.3% for Q4 of 2017.

On an ongoing basis, the company’s effective income tax rate (federal and state) is anticipated to be approximately 30.0%.

Balance Sheet:

Investment Securities:

Investment securities were $107.4 million at September 30, 2018, down $16.3 million since December 31, 2017 due to paydowns and loan growth.

Loans Receivable and Asset Quality:

  • Portfolio loans at September 30, 2018 were $896.6 million, an increase of $29.3 million or 3.4% since June 30, 2018 and $109.2 million or 13.9% since December 31, 2017. Organic loan growth is expected to slow for the balance of the year and into next year, due to the combined effects of rising interest rates and historically high property values, along with planned loan portfolio risk reduction activities, including the sale or participating-out of a portion of the non-owner occupied commercial real estate portfolio and non-guaranteed SBA loan portfolio.
  • Non-performing loans and OREO as of September 30, 2018 were less than $500 thousand, down from $2.5 million at the beginning of the year. These metrics, along with total delinquent loans which are lower than year-end levels, are all at or near historically low levels. Total classified assets and TDR’s are up from year-end 2017 levels. Specifically, at September 30, 2018, non-performing assets were $464 thousand, total classified assets were $16.6 million, performing TDR’s were $4.3 million and total delinquent loans were $670 thousand on a loan portfolio of $897 million. See Table 9 for additional details.

SBA Loans Held for Sale:

  • SBA loans held for sale at September 30, 2018 of $38 million are down $1.3 million from last quarter and up $9.7 million from December 31, 2017. SBA loan production for Q3 2018 was $41.7 million compared to $31.2 million in the same quarter last year. SBA loan production was $139.4 million for the nine months ended September 30, 2018 compared with $146.0 million in the same period last year. See the Table 7 for additional SBA loan origination and sale data.

Deposits:

  • Total deposits grew to $1.06 billion at September 30, 2018, an increase of $161.4 million or 18.0%, since December 31, 2017. $143 million or 88.6% of the deposit growth was in certificates of deposit, as a result of several marketing campaigns in 2018 combined with the 2017 opening of the Olympic, LA Koreatown and Carrollton, Dallas metro area branches.
  • Approximately $45 million of the Bank’s wholesale certificates of deposits are with the State of California and require a pledge of collateral as security. The Bank utilizes the Federal Home Loan Bank’s (“FHLB”) stand-by letter of credit program to satisfy this requirement.

Borrowings:

  • Borrowings at September 30, 2018 consisted of approximately $10 million of FHLB term advances due in 2020. Borrowings from the FHLB remain low due to sufficient levels of cash, deposits and cashflow from loan sales.

Capital:

  • Stockholder’s equity at September 30, 2018 was $127.5 million, compared to $115.2 million at December 31, 2017. This represents an increase of $12.4 million or 10.8% over the nine-month time period. Book value per share at quarter end was $12.64 compared with $11.48 at December 31, 2017, an increase of $1.16 per share or 10.1%. Capital growth during the year primarily consisted of net income of $13.0 million, partially offset by an increase in unrealized losses on the investment securities of $1.8 million.
  • Regulatory capital ratios declined slightly over the nine-month period ending September 30, 2018 due to loan growth of 13.9% exceeding capital level growth. However, all regulatory capital levels and ratios exceed the minimum ratios to be considered “Well Capitalized” as defined for bank regulatory purposes and in compliance with the fully phased-in Basel III requirements, which go into effect on January 1, 2019 as shown on Table 10 in this press release.

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 six loan production offices in the states of Texas, Georgia, Colorado, Utah 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. Accordingly, 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/or 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.

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,   $   %
2018 2018 Change Change   2017 Change Change 2018 2017 Change Change
 
Interest income $ 15,661 $ 14,605 $ 1,056 7.2 % $ 12,462 $ 3,199 25.7 % $ 43,091 $ 34,232 $ 8,859 25.9 %
Interest expense   3,678     3,005     673   22.4 %   2,098     1,580   75.3 %   9,153     5,393     3,760   69.7 %
Net interest income 11,983 11,600 383 3.3 % 10,364 1,619 15.6 % 33,938 28,839 5,099 17.7 %
 
Provision for loan losses   400     800     (400 ) (50.0 %)   164     236   143.9 %   1,200     514     686   133.5 %
Net interest income after provision for loan losses 11,583 10,800 783 7.3 % 10,200 1,383 13.6 % 32,738 28,325 4,413 15.6 %
 
Gain on sale of loans 1,937 2,478 (541 ) (21.8 %) 2,792 (855 ) (30.6 %) 6,851 7,462 (611 ) (8.2 %)
Gain (loss) on sale of OREO (43 ) - (43 ) (100.0 %) - (43 ) (100.0 %) (43 ) 103 (146 ) (141.7 %)
Net of SBA servicing fee income 304 442 (138 ) (31.2 %) 378 (74 ) (19.6 %) 1,107 1,358 (251 ) (18.5 %)
SBA servicing right impairment (534 ) - (534 ) (100.0 %) - (534 ) (100.0 %) (534 ) - (534 ) (100.0 %)
Service charges and other income   573     600     (27 ) (4.5 %)   556     17   3.1 %   1,672     1,705     (33 ) (1.9 %)
Noninterest income 2,237 3,520 (1,283 ) (36.4 %) 3,726 (1,489 ) (40.0 %) 9,053 10,628 (1,575 ) (14.8 %)
 
Salaries and employee benefits 4,956 4,923 33 0.7 % 4,615 341 7.4 % 14,617 12,905 1,712 13.3 %
Occupancy and equipment 886 834 52 6.2 % 808 78 9.7 % 2,559 2,042 517 25.3 %
Marketing expense 342 322 20 6.2 % 355 (13 ) (3.7 %) 1,044 987 57 5.8 %
Professional expense 537 359 178 49.6 % 473 64 13.5 % 1,398 911 487 53.5 %
Other expenses   1,302     1,515     (213 ) (14.1 %)   1,478     (176 ) (11.9 %)   4,015     3,559     456   12.8 %
Noninterest expense 8,023 7,953 70 0.9 % 7,729 294 3.8 % 23,633 20,404 3,229 15.8 %
 
Income before income tax expense 5,797 6,367 (570 ) (9.0 %) 6,197 (400 ) (6.5 %) 18,158 18,549 (391 ) (2.1 %)
 
Income tax expense 1,426 1,889 (463 ) (24.5 %) 2,491 (1,065 ) (42.8 %) 5,155 7,512 (2,357 ) (31.4 %)
                     
Net income $ 4,371   $ 4,478   $ (107 ) (2.4 %) $ 3,706   $ 665   17.9 % $ 13,003   $ 11,037   $ 1,966   17.8 %
 
Effective tax rate 24.6 % 29.7 % (5.1 %) (17.1 %) 40.2 % -15.6 % -38.8 % 28.4 % 40.5 % (12.1 %) (29.9 %)
 
Outstanding number of shares ¹ 10,091,294 10,037,510 53,784 0.5 % 10,033,110 58,184 0.6 % 10,091,294 10,033,110 58,184 0.6 %
 
Basic EPS ¹ $ 0.44 $ 0.45 $ (0.01 ) (2.2 %) $ 0.37 $ 0.07 18.9 % $ 1.30 $ 1.10 $ 0.20 18.2 %
Diluted EPS¹ $ 0.42 $ 0.43 $ (0.01 ) (2.3 %) $ 0.36 $ 0.06 16.7 % $ 1.25 $ 1.06 $ 0.19 17.9 %
 
Return on average assets 1.51 % 1.65 % (0.1 %) (8.5 %) 1.46 % 0.05 % 3.4 % 1.59 % 1.55 % 0.0 % 2.6 %
Return on average equity 13.77 % 14.85 % (1.1 %) (7.3 %) 13.08 % 0.69 % 5.3 % 14.33 % 13.61 % 0.7 % 5.3 %
 
Efficiency ratio 56.42 % 52.60 % 3.8 % 7.3 % 54.85 % 1.57 % 2.9 % 54.97 % 51.70 % 3.3 % 6.3 %
Yield on interest-earning assets² 5.60 % 5.59 % 0.0 % 0.2 % 5.10 % 0.50 % 9.8 % 5.45 % 4.99 % 0.5 % 9.2 %
Cost of funds 1.44 % 1.26 % 0.2 % 14.3 % 0.94 % 0.50 % 53.2 % 1.27 % 0.86 % 0.4 % 47.7 %
Net interest margin² 4.29 % 4.45 % (0.2 %) (3.6 %) 4.24 % 0.05 % 1.2 % 4.30 % 4.21 % 0.1 % 2.1 %
 
¹ Restated for 10% stock dividend declared on 10/02/18
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,   December 31,   $   %   September 30,   $   %
2018 2017 Change Change 2017 Change Change
ASSETS
Cash and due from banks $ 12,228 $ 9,353 $ 2,875 30.7 % $ 11,394 $ 834 7.3 %
Interest-earning deposits at the FRB and other banks 119,246 103,391 15,855 15.3 % 138,868 (19,622 ) (14.1 %)
Investment securities 107,406 123,657 (16,251 ) (13.1 %) 69,097 38,309 55.4 %
Loans held-for-sale, at the lower of cost or fair value 38,007 28,346 9,661 34.1 % 18,626 19,381 104.1 %
 
Loans receivable 896,580 787,399 109,181 13.9 % 774,160 122,420 15.8 %
Allowance for loan losses   (9,814 )   (8,653 )   (1,161 ) 13.4 %   (8,249 )   (1,565 )   19.0 %
Loans receivable, net 886,766 778,746 108,020 13.9 % 765,911 120,855 15.8 %
 
OREO 25 - 25 100.0 % - 25 100.0 %
 
FHLB, FRB & PCBB stocks 6,879 6,261 618 9.9 % 6,253 626 10.0 %
Servicing assets 11,403 11,377 26 0.2 % 11,241 162 1.4 %
Other assets   22,346     17,723     4,623   26.1 %   20,644     1,702     8.2 %
Total assets $ 1,204,306   $ 1,078,854   $ 125,452   11.6 % $ 1,042,034   $ 162,272     15.6 %
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing $ 222,018 $ 203,641 $ 18,377 9.0 % $ 211,327 $ 10,691 5.1 %
Interest-bearing   835,110     692,080     143,030   20.7 %   698,981     136,129     19.5 %
Total deposits 1,057,128 895,721 161,407 18.0 % 910,308 146,820 16.1 %
 
FHLB advances 10,000 60,000 (50,000 ) (83.3 %) 10,000 - -
Other liabilities   9,585     7,955     1,630   20.5 %   7,611     1,974     25.9 %
Total liabilities   1,076,713     963,676     113,037   11.7 %   927,919     148,794     16.0 %
 
Stockholders' Equity   127,593     115,178     12,415   10.8 %   114,115     13,478     11.8 %
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,204,306   $ 1,078,854   $ 125,452   11.6 % $ 1,042,034   $ 162,272     15.6 %
 
CAPITAL RATIOS
Leverage ratio
Company 11.19 % 11.06 % 0.1 % 1.2 % 11.26 % (0.1 %) (0.6 %)
Bank 11.14 % 11.02 % 0.1 % 1.1 % 11.22 % (0.1 %) (0.7 %)
Common equity tier 1 risk-based capital ratio
Company 13.47 % 13.63 % (0.2 %) (1.2 %) 13.70 % (0.2 %) (1.7 %)
Bank 13.42 % 13.58 % (0.2 %) (1.2 %) 13.65 % (0.2 %) (1.7 %)
Tier 1 risk-based capital ratio
Company 13.47 % 13.63 % (0.2 %) (1.2 %) 13.70 % (0.2 %) (1.7 %)
Bank 13.42 % 13.58 % (0.2 %) (1.2 %) 13.65 % (0.2 %) (1.7 %)
Total risk-based capital ratio
Company 14.61 % 14.78 % (0.2 %) (1.2 %) 14.82 % (0.2 %) (1.4 %)
Bank 14.56 % 14.74 % (0.2 %) (1.2 %) 14.77 % (0.2 %) (1.4 %)
 
Bookvalue per share¹ $ 12.64 $ 11.48 $ 1.16 10.1 % $ 11.37 $ 1.27 $ 0.11
Loan-to-Deposit (LTD) ratio 84.8 % 87.9 % (3.1 %) (3.5 %) 85.0 % (0.2 %) (0.3 %)
Nonperforming assets 464 2,467 (2,003 ) (81.2 %) 2,695 $ (2,231 ) (82.8 %)

Nonperforming assets as a % of loans receivable

0.05 % 0.31 % (0.3 %) (83.9 %) 0.35 % (0.3 %) (85.7 %)
ALLL as a % of loans receivable 1.09 % 1.10 % (0.0 %) (0.9 %) 1.07 % 0.0 % 1.9 %
 
¹ Restated for 10% stock dividend declared on 10/02/18
 
 
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,
2018 2018 2018 2017 2017
 
Interest income $ 15,661 $ 14,605 $ 12,825 $ 12,471 $ 12,462
Interest expense   3,678     3,005     2,470     2,287     2,098  
Net interest income 11,983 11,600 10,355 10,184 10,364
 
Provision for loan losses   400     800     -     -     164  
Net interest income after provision for loan losses 11,583 10,800 10,355 10,184 10,200
 
Gain on sale of loans 1,937 2,478 2,436 1,859 2,792
Gain (loss) on sale of OREO (43 ) - - - -
Net SBA servicing fee income 304 442 361 514 378
SBA servicing right impairment (534 ) - - - -
Service charges and other income   573     600     499     543     556  
Noninterest income 2,237 3,520 3,296 2,916 3,726
 
Salaries and employee benefits 4,956 4,923 4,738 4,941 4,615
Occupancy and equipment 886 834 839 859 808
Marketing expense 342 322 380 294 355
Professional expense 537 359 502 551 473
Other expenses   1,302     1,515     1,198     1,315     1,478  
Noninterest expense 8,023 7,953 7,657 7,960 7,729
 
Income before income tax expense 5,797 6,367 5,994 5,140 6,197
 
Income tax expense 1,426 1,889 1,840 4,127 2,491
         
Net income $ 4,371   $ 4,478   $ 4,154   $ 1,013   $ 3,706  
 
Effective tax rate 24.6 % 29.7 % 30.7 % 80.3 % 40.2 %
 
Outstanding number of shares ¹ 10,091,294 10,037,510 10,033,110 10,033,110 10,033,110
 
Weighted average shares for basic EPS¹ 10,038,095 10,035,545 10,033,110 10,033,110 10,017,150
Weighted average shares for diluted EPS¹ 10,389,263 10,426,908 10,464,581 10,450,257 10,416,061
 
Basic EPS ¹ $ 0.44 $ 0.45 $ 0.41 $ 0.10 $ 0.37
Diluted EPS¹ $ 0.42 $ 0.43 $ 0.40 $ 0.10 $ 0.36
 
¹ Restated for 10% stock dividend declared on 10/02/18
 
 
QUARTERLY SALARIES BENEFIT METRICS - Table 4
(Dollars in thousands)
 
  At or for the Three Months Ended
September 30,   June 30,   March 31,   December 31,   September 30,
2018 2018 2018 2017 2017
 
FTE at the end of period 175 173 164 161 160
Average FTE during the period 177 172 164 162 160
Salaries and benefits/average FTE¹ $ 111 $ 115 $ 117 $ 121 $ 114
Salaries and benefits/average assets¹ 1.71 % 1.82 % 1.83 % 1.89 % 1.81 %
Noninterest expense/average assets¹ 2.77 % 2.94 % 2.96 % 3.04 % 3.04 %
 
1 Annualized
 
 
FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5
(Dollars in thousands)
 
  September 30,   June 30,   March 31,   December 31,   September 30,
2018 2018 2018 2017 2017
ASSETS
Cash and due from banks $ 12,228 $ 13,349 $ 9,868 $ 9,353 $ 11,394
Interest-earning deposits at the FRB and other banks 119,246 77,018 80,468 103,391 138,868
Investment securities 107,406 112,022 117,634 123,657 69,097
Loans held-for-sale, at the lower of cost or fair value 38,007 39,343 23,608 28,346 18,626
 
Loans receivable 896,580 867,280 809,281 787,399 774,160
Allowance for loan losses   (9,814 )   (9,377 )   (8,556 )   (8,653 )   (8,249 )
Loans receivable, net 886,766 857,903 800,725 778,746 765,911
 
OREO 25 - - - -
 
FHLB, FRB & PCBB stocks 6,879 6,879 6,261 6,261 6,253
Servicing assets 11,403 11,869 11,610 11,377 11,241
Other assets   22,346     18,955     20,196     17,723     20,644  
Total assets $ 1,204,306   $ 1,137,338   $ 1,070,370   $ 1,078,854   $ 1,042,034  
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing $ 222,018 $ 197,500 $ 188,328 $ 203,641 $ 211,327
Interest-bearing   835,110     788,357     742,905     692,080     698,981  
Total deposits 1,057,128 985,857 931,233 895,721 910,308
 
FHLB advances 10,000 20,000 10,000 60,000 10,000
Other liabilities   9,585     8,490     10,784     7,955     7,611  
Total liabilities   1,076,713     1,014,347     952,017     963,676     927,919  
 
Stockholders' Equity   127,593     122,991     118,353     115,178     114,115  
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,204,306   $ 1,137,338   $ 1,070,370   $ 1,078,854   $ 1,042,034  
 
 
FIVE-QUARTER LOANS RECEIVABLE COMPONENTS - Table 6
(Dollars in thousands)
 
  September 30, 2018   June 30, 2018   March 31, 2018   December 31, 2017   September 30, 2017
Balance   % Balance   % Balance   % Balance   % Balance   %
 
Construction $ 13,168 1.5 % $ 10,508 1.2 % $ 9,032 1.1 % $ 12,575 1.6 % $ 11,396 1.5 %
Commercial real estate 728,322 81.2 % 706,360 81.4 % 668,649 82.6 % 645,211 81.9 % 632,803 81.7 %
Commercial and industrial 150,892 16.8 % 146,654 16.9 % 126,057 15.6 % 122,917 15.6 % 124,659 16.1 %
Consumer   2,362 0.3 %   1,907 0.2 %   3,952 0.5 %   4,928 0.6 %   3,710 0.5 %
Gross loans 894,744 99.8 % 865,429 99.8 % 807,690 99.8 % 785,631 99.8 % 772,568 99.8 %
 
Net deferred loan fees/costs   1,836 0.2 %   1,851 0.2 %   1,591 0.2 %   1,768 0.2 %   1,592 0.2 %
Loans receivable $ 896,580 100.0 % $ 867,280 100.0 % $ 809,281 100.0 % $ 787,399 100.0 % $ 774,160 100.0 %
 
Loans held-for-sale $ 38,007 $ 39,343 $ 23,608 $ 28,346 $ 18,626
Loans receivable, including loans held-for-sale $ 934,587 $ 906,623 $ 832,889 $ 815,745 $ 792,786
 
 

SBA LOAN PRODUCTIONS/SALES DATA - 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,
2018 2018 2018 2017 2017 2018 2017
 
SBA loans held-for-sale at beginning of the quarter $ 39,343 $ 23,608 $ 28,346 $ 18,626 $ 35,599 $ 28,346 $ 18,096

SBA loans originated/transferred from held-for-investment during the quarter

33,832 50,856 30,377 32,447 20,857 115,065 102,592
SBA loans sold during the quarter (34,745 ) (35,015 ) (34,923 ) (22,618 ) (37,689 ) (104,683 ) (101,780 )
SBA loans principal payment, net of advance   (423 )   (106 )   (192 )   (109 )   (141 )   (721 )   (282 )
SBA loans held-for-sale at end of the quarter $ 38,007   $ 39,343   $ 23,608   $ 28,346   $ 18,626   $ 38,007   $ 18,626  
 
Gain on sale of SBA loans $ 1,937 $ 2,478 $ 2,436 $ 1,852 $ 2,781 6,851 7,451
 
Premium on sale (weighted average) 8.10 % 9.52 % 9.71 % 10.41 % 10.29 % 9.11 % 9.97 %
 
SBA loan production $ 41,685   $ 62,003   $ 35,681   $ 54,496   $ 31,173     139,369     146,078  
 
 

FIVE-QUARTER DEPOSIT COMPONENTS - Table 8

(Dollars in thousands)
 
  September 30, 2018   June 30, 2018   March 31, 2018   December 31, 2017   September 30, 2017
Balance   % Balance   % Balance   % Balance   % Balance   %
 
Noninterest-bearing demand $ 222,018 21.0 % $ 197,500 20.0 % $ 188,328 20.2 % $ 203,641 22.7 % $ 211,327 23.2 %
NOW & MMDA 177,961 16.8 % 196,432 19.9 % 166,960 17.9 % 169,710 18.9 % 169,111 18.6 %
Savings 17,460 1.7 % 19,211 1.9 % 18,080 1.9 % 15,876 1.8 % 15,394 1.7 %
TCDs of $250K and under 347,873 32.9 % 290,449 29.5 % 286,269 30.7 % 253,015 28.2 % 254,294 27.9 %
TCDs of $250K over 157,126 14.9 % 125,687 12.7 % 114,521 12.3 % 103,915 11.6 % 100,370 11.0 %
Wholesale TCDs   134,690 12.7 %   156,578 15.9 %   157,075 16.9 %   149,564 16.7 %   159,812 17.6 %
Total Deposits $ 1,057,128 100.0 % $ 985,857 100.0 % $ 931,233 100.0 % $ 895,721 100.0 % $ 910,308 100.0 %
 
Recap:
Noninterest-bearing demand $ 222,018 21.0 % $ 197,500 20.0 % $ 188,328 20.2 % $ 203,641 22.7 % $ 211,327 23.2 %
NOW & MMDA 177,961 16.8 % 196,432 19.9 % 166,960 17.9 % 169,710 18.9 % 169,111 18.6 %
Savings 17,460 1.7 % 19,211 1.9 % 18,080 1.9 % 15,876 1.8 % 15,394 1.7 %
TCDs of $250K and under   347,873 32.9 %   290,449 29.5 %   286,269 30.7 %   253,015 28.2 %   254,294 27.9 %
Core Deposits   765,312 72.4 %   703,592 71.4 %   659,637 70.8 %   642,242 71.7 %   650,126 71.4 %
 
TCDs of $250K over 157,126 14.9 % 125,687 12.7 % 114,521 12.3 % 103,915 11.6 % 100,370 11.0 %
Wholesale TCDs   134,690 12.7 %   156,578 15.9 %   157,075 16.9 %   149,564 16.7 %   159,812 17.6 %
Noncore Deposits