CBB Bancorp, Inc. Reports 2017 Fourth Quarter Results

LOS ANGELES--()--CBB Bancorp, Inc. (“CBB” or the “Company”) (OTCQB: CBBI), the parent company of Commonwealth Business Bank (the “Bank”), today announced net income of $1.0 million, or $0.11 per diluted share, for the fourth quarter of 2017, compared to $3.7 million, or $0.39 per diluted share, for the prior quarter and $3.4 million, or $0.37 per diluted share, for the fourth quarter of 2016. The current quarter’s net income and earnings per diluted share were adversely impacted by a $2.0 million write down of the Company’s net deferred asset that was required under U.S. generally accepted accounting principles (“GAAP”) when the Tax Cuts and Jobs Act (the “Act”) was signed into law on December 22, 2017 (see “Income Tax Expense” section for further discussion). Excluding the impact of the write down of the Company’s net deferred tax asset, net income would have been $3.0 million, or $0.32 per diluted share, for the current quarter.

“In the fourth quarter, we opened our sixth SBA loan production office in Utah to increase our SBA loan production capability”

For the year ended December 31, 2017, net income increased 5.4% to $12.1 million, or $1.27 per diluted share, compared to $11.4 million, or $1.24 per diluted share, for the same period in 2016. Excluding the impact of the write down of the Company’s net deferred tax asset, net income for 2017 would have been $14.1 million, or $1.49 per diluted share.

“Our earnings for the fourth quarter and the year were negatively impacted by the write down of our net deferred tax asset due to the reduction in the federal corporate tax rate to 21%. In 2018, we believe the reduction in the tax rate will positively impact our net income by significantly reducing our effective tax rate to an estimated range of 27.50% to 29.50%,” said Joanne Kim, President and CEO. “In the fourth quarter, we opened our sixth SBA loan production office in Utah to increase our SBA loan production capability,” Ms. Kim added.

RESULTS OF OPERATIONS

  Three Months Ended     Twelve Months Ended
December 31,   September 30,   %   December 31,   % December 31,   December 31,   %
2017 2017 Change 2016 Change 2017 2016 Change
(Dollars in thousands, except per share amounts)
 
Net income $ 1,013 $ 3,706 (72.7 %) $ 3,440 (70.6 %) $ 12,050 $ 11,437 5.4 %
Diluted EPS $ 0.11 $ 0.39 (71.8 %) $ 0.37 (70.3 %) $ 1.27 $ 1.24 2.4 %
 
Return on average assets 0.39 % 1.46 % (73.3 %) 1.53 % (74.5 %) 1.23 % 1.38 % (10.9 %)
Return on average equity 3.46 % 13.08 % (73.5 %) 13.58 % (74.5 %) 10.92 % 11.80 % (7.5 %)
 
Noninterest income/average assets 1.11 % 1.46 % (24.0 %) 1.33 % (16.5 %) 1.39 % 1.43 % (2.8 %)
Pre-tax, pre-provision earnings/average assets 1.96 % 2.50 % (21.6 %) 2.58 % (24.0 %) 2.48 % 2.78 % (10.8 %)
Noninterest expense/average assets 3.04 % 3.04 % - 2.57 % 18.3 % 2.91 % 2.69 % 8.2 %
Efficiency ratio 60.76 % 54.85 % 10.8 % 49.93 % 21.7 % 53.96 % 49.13 % 9.8 %
Net interest margin¹ 4.06 % 4.24 % (4.2 %) 3.94 % 3.0 % 4.17 % 4.16 % 0.2 %
 
¹ Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate
 

Net Interest Income and Net Interest Margin

Net interest income was $10.2 million for the fourth quarter of 2017, a decrease of $180,000, or 1.7%, compared to $10.4 million for the prior quarter and an increase of $1.6 million, or 18.5%, compared to $8.6 million for the same quarter last year. The quarter-over-quarter decrease was primarily due to a $214,000 decrease in interest earned on loans and a $170,000 increase in interest paid on deposits, which were partially offset by a $166,000 increase in interest earned on investment securities and a $54,000 increase in interest earned on deposits at the FRB and other banks. The quarter-over-quarter decrease in interest earned on loans was primarily due to a $13.8 million decrease in the average balance of loans including loans held-for-sale to $805.6 million from $819.4 million for the prior quarter. The year-over-year quarterly increase was primarily due to a $2.0 million increase in interest earned on loans, a $307,000 increase in interest earned on investment securities and a $167,000 increase in interest earned on deposits at the FRB and other banks, which were partially offset by a $762,000 increase in interest paid on deposits. The year-over-year quarterly increase in interest earned on loans was primarily due to a $87.7 million increase in the average balance of loans combined with a 41 basis point increase in the yield on loans to 5.70% from 5.29% in the same quarter last year.

Net interest income was $39.0 million for the year ended December 31, 2017, an increase of $5.5 million, or 16.3%, compared to $33.6 million for the same period last year. The annual year-over-year increase was primarily attributable to a $6.1 million increase in interest earned on loans, a $1.1 million increase in interest earned on investment securities, and a $364,000 increase in interest earned on deposits at the FRB and the other banks, which were partially offset by a $1.9 million increase in interest paid on deposits. The annual year-over-year increase in interest earned on loans was primarily due to a $91.7 million increase in the average balance of loans combined with a 14 basis point increase in the yield on loans to 5.57% from 5.43%.

The reported yield on our loan portfolio is impacted by a number of factors, including changes in the average contractual interest rate earned on the portfolio and the amount of discount accretion on SBA loans. The following table reconciles the contractual yield on our loan portfolio to the reported yield for the periods indicated.

                       
Three Months Ended Twelve Months Ended
December 31, 2017 September 30, 2017 December 31, 2016 December 31, 2017 December 31, 2016
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
(Dollars in thousands)
Contractual yield $ 10,717 5.28 % $ 10,824 5.23 % $ 8,705 4.82 % $ 40,864 5.17 % $ 34,229 4.90 %
SBA discount accretion 850 0.42 % 969 0.47 % 792 0.44 % 3,258 0.41 % 3,014 0.43 %
Prepayment penalties & late fees 82 0.04 % 117 0.06 % 140 0.08 % 389 0.05 % 500 0.07 %
Amortization of net deferred costs (82 ) (0.04 %) (129 ) (0.06 %) (93 ) -0.05 % (457 ) (0.06 %) (83 ) (0.01 %)
Interest recognized on nonaccrual loans   -   -     -   -     -   -     -   -     275   0.04 %
As reported yield on loans $ 11,567   5.70 % $ 11,781   5.70 % $ 9,544   5.29 % $ 44,054   5.57 % $ 37,935   5.43 %
 

The net interest margin was 4.06% for the current quarter, a decrease of 18 basis points, from 4.24% in the prior quarter and increased 12 basis points, compared to 3.94% for the year ago quarter. The quarter-over-quarter decrease was primarily due to a 14 basis point decrease in the yield on interest-earning assets to 4.96% from 5.10% in the prior quarter combined with a 5 basis point increase in our cost of funds to 0.99% from 0.94% in the prior quarter. Although our yield on loans was 5.70% in both the current and prior quarters, the quarter-over-quarter decrease in the yield on interest-earning assets was due to a decline in the percentage of higher yielding average loans to total average interest-earning assets in the current quarter compared to the prior quarter. The year-over-year quarterly increase was primarily due to a 33 basis point increase in the yield on interest-earning assets from 4.63% in the year ago quarter, which was partially offset by a 23 basis point increase in our cost of funds from 0.76% in the same period last year. The quarter-over-quarter increase in our cost of funds was primarily due to a 5 basis point increase in our cost of deposits to 0.98% in the current quarter from 0.93% in the prior quarter and the year-over-year quarterly increase in our cost of funds was primarily due to a 23 basis point increase in our cost of deposits from 0.75% in the same quarter last year.

For the year ended December 31, 2017, the net interest margin was 4.17 %, an increase of a 1 basis point, compared to 4.16% for the same period last year. The annual year-over-year increase was primarily driven by a 12 basis point increase in the yield on interest-earning assets to 4.98% from 4.86% for the same period last year, which was partially offset by an 11 basis point increase in our cost of funds to 0.89% from 0. 78% for the same period last year. The annual year-over-year increase in CBB’s yield on interest-earning assets was primarily due to a 14 basis point increase in the yield on loans to 5.57% from 5.43% and the annual year-over-year increase in cost of funds was primarily attributable to an 11 basis point increase in our cost of deposits to 0.88% from 0.77% for the same period last year.

Provision for Loan Losses

The CBB recorded no provision for loan losses in the current quarter, compared to a $164,000 provision for loan losses in the prior quarter and no provision for loan losses in the year ago quarter. For the year ended December 31, 2017, the CBB recorded a $514,000 provision for loan losses, a decrease of $3.4 million, compared to $3.9 million in the same period in 2016. The provision for loan losses in 2016 was primarily due to one $4.0 million commercial loan which was charged off in the fourth quarter of last year.

Noninterest Income

For the current quarter, noninterest income totaled $2.9 million, a decrease of $810,000, or 21.7%, and a decrease of $94,000, or 3.1%, from $3.7 million and $3.0 million in the prior and year ago quarters, respectively. The quarter-over-quarter decrease was primarily driven by a $933,000 decrease in gains on sales of loans, which was partially offset by a $136,000 increase in SBA loan servicing fee income. The quarter-over-quarter decrease in gains on sales of loans was primarily due to a decrease in the amount of SBA loans we sold, while the quarter-over-quarter increase in SBA loan servicing fee income was due to an increase in the amount of SBA loans we serviced this quarter. The year-over-year quarterly decrease was primarily due to a $269,000 decrease in gains on sales of loans, which were partially offset by an $81,000 increase in SBA loan servicing fee income and a $35,000 increase in service charges on deposits. The year-over-year quarterly decrease in gains on sales of SBA loans was primarily due to a decrease in the amount of SBA loans we sold.

For the year ended December 31, 2017, noninterest income increased $1.6 million, or 13.7% to $13.5 million from $11.9 million in the same period last year. The increase was primarily due to a $381,000 increase in service charges on deposits, a $416,000 increase in SBA loan servicing fee income, a $146,000 increase in other income, a $482,000 increase in gains of sales of loans, and a $130,000 increase in gains on sales of other real estate owned. The annual year-over-year increase in gains on sales of loans was primarily driven by a 41 basis point increase in the average premium we received on sales of SBA loans.

As the following table indicates, during the fourth quarter of 2017, the Company sold $22.6 million of SBA loans, compared to $37.7 million in the preceding quarter and $31.2 million in the same quarter last year. The decline in sales of SBA loans in the current quarter compared to the prior and year ago quarters was due to our decision not to sell SBA loans in the later part of the current quarter. For the year ended December 31, 2017, the Company sold $124.4 million of SBA loans, compared to $123.4 million in the same period last year. The quarterly average premium on sales of SBA loans for the current quarter was 10.41%, compared to 10.29% in the prior quarter and 9.17% in the year ago quarter. The average premium on sales of SBA loans for the year ended December 31, 2017 was 10.05%, compared to 9.64% in the same period last year. The amount of SBA loans we sell varies based on the volume of loans we originate, our liquidity needs and market conditions.

       
Three Months Ended Twelve Months Ended
December 31,   September 30,   %   December 31,   % December 31,   December 31,   %
  2017     2017   Change   2016   Change   2017     2016   Change
(Dollars in thousands)
SBA loans held-for-sale at beginning of the quarter $ 18,626 $ 35,599 (47.7 %) $ 11,525 61.6 % $ 18,096 $ 17,809 1.6 %

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

32,447 20,857 55.6 % 37,833 (14.2 %) 135,039 123,986 8.9 %
SBA loans sold during the quarter (22,618 ) (37,689 ) (40.0 %) (31,190 ) (27.5 %) (124,398 ) (123,448 ) 0.8 %
SBA loans principal payment, net of advance   (109 )   (141 ) (22.7 %)     (72 ) 51.4 %   (391 )   (251 ) 55.8 %
SBA loans held-for-sale at end of the quarter $ 28,346   $ 18,626   52.2 % $ 18,096   56.6 % $ 28,346   $ 18,096   56.6 %
 
Gain on sale of SBA loans $ 1,852 $ 2,781 (33.4 %) $ 2,128 (13.0 %) 9,303 8,839 5.2 %
Premium on sale (weighted average) 10.41 % 10.29 % 1.2 % 9.17 % 13.5 % 10.05 % 9.64 % 4.3 %
 
SBA loan production $ 54,496 $ 31,173 74.8 % $ 46,405 17.4 % 200,574 163,160 22.9 %
 

Noninterest Expense

Noninterest expense for the fourth quarter of 2017 was $8.0 million, an increase of $231,000, or 3.0%, from $7.7 million in the prior quarter and an increase of $2.2 million, or 37.4%, from $5.8 million in the year ago quarter. The quarter-over-quarter increase was primarily due to a $326,000 increase in salaries and employee benefits, a $51,000 increase in occupancy and equipment related expense, and a $78,000 increase in professional expense, which were offset by a $61,000 decrease in marketing expense, a $79,000 decrease in loan expense, and a $124,000 decrease in other expense. The quarter-over-quarter increase in salaries and employee benefit was primarily due to an increase in incentive compensation, combined with a 2 person increase in the average number of full time equivalent employees (“FTEs”) to 162 during the current quarter from 160 during the prior quarter. The quarter-over-quarter increase in occupancy and equipment related expense was primarily due to an increase in software expense related to opening new branches. The quarter-over-quarter increase in professional expense was primarily attributable to $85,000 of consulting fees related to recruiting new employees. The year-over-year quarterly increase was primarily due to a $1.2 million increase in salaries and employee benefits, a $311,000 increase in occupancy and equipment related expense, and a $348,000 increase in professional expense. The year-over-year quarterly increase in salaries and employee benefits was primarily due to a 24 person increase in the average number of FTEs from 138 during the year ago quarter combined with annual employee merit increases and an increase in employee incentive expense. The increase in occupancy and equipment related expense was due to the opening of three new branches during the current year. The increase in professional expense was attributable to $85,000 of legal fees related to the formation of the Company, $70,000 of consulting fees related to making the Company FDICIA compliant, and $85,000 of consulting fees related to recruiting new employees.

For the year ended December 31, 2017, noninterest expense was $28.4 million, an increase of $6.0 million, or 27.0%, from $22.3 million for the same period last year. The increase was primarily due to a $2.9 million increase in salaries and employee benefits, a $779,000 increase in occupancy and equipment related expense, a $331,000 increase in marketing expense, an $815,000 increase in professional expense, and a $772,000 increase in other expense. The increase in salaries and employee benefits was primarily due to a 24 person increase in the average number of FTEs to 156 in the year ended December 31, 2017 from 132 in the same period in 2016 combined with the aforementioned increases in annual employee merit increases and an increase in employee incentive compensation. The increase in occupancy and equipment related expense was due to opening of three new branches during the current year. The increase in professional expense was primarily due to $194,000 of legal fees related to the formation of the Company, $140,000 of consulting fees related to making the Company FDICIA compliant, and $85,000 of consulting fees related to recruiting new employees. The increase in other expense was primarily driven by a $386,000 increase in provisions for expected losses on off-balance sheet loan commitments.

       
At or for the Three Months Ended At or for the Twelve Months Ended
December 31,   September 30,   %   December 31,   % December 31,   December 31,   %
  2017     2017   Change   2016   Change   2017     2016   Change
(Dollars in thousands)
 
Salaries and benefits $ 4,941 $ 4,615 7.1 % $ 3,762 31.3 % $ 17,846 $ 14,951 19.4 %
FTE at end of period 161 160 0.6 % 139 15.8 % 161 139 15.8 %
Average FTE during the period 162 160 1.2 % 138 17.6 % 156 132 18.2 %
Salaries and benefit/average FTE¹ $ 121 $ 114 6.1 % $ 108 12.0 % $ 114 $ 113 0.9 %
Salaries and benefit/average assets¹ 1.89 % 1.81 % 4.4 % 1.67 % 13.2 % 1.83 % 1.80 % 1.7 %
Noninterest expense/average assets¹ 3.04 % 3.04 % - 2.57 % 18.3 % 2.91 % 2.69 % 8.2 %
 
1 Annualized
 

Income Tax Expense

Income tax expense was $4.1 million for the quarter, or an effective tax rate of 80.29%, compared to $2.5 million, or an effective tax rate of 40.20%, for the prior quarter and $2.4 million, or an effective tax rate of 40.80%, for the year ago quarter. For the year ended December 31, 2017, the provision for income taxes was $11.6 million, or an effective tax rate of 49.13%, compared to $7.8 million, or an effective tax rate of 40.52%, in the same period last year. The quarter-over-quarter and year-over-year increases in income tax expense, and related effective tax rates, was primarily due to the aforementioned $2.0 million write down of the Company’s net deferred tax asset as a result of the passage of the Tax Cuts and Jobs Act, which was signed into law on December 22, 2017. The Act, effective January 1, 2018, permanently reduces the Company’s federal corporate tax rate from 35% to 21%. At December 31, 2017, the Company was required under GAAP to perform a one-time re-measurement of the future benefit of utilizing its deferred tax items at the lower federal corporate tax rate. The Company is currently assessing the future impact of the Act on its operations, but currently estimates its effective tax rate in 2018 will be between 27.50% and 29.50%.

Pre-Tax, Pre-Provision Income

For the fourth quarter of 2017, the Bank’s pre-tax, pre-provision (“PTPP”) income was $5.1 million, a decrease of $1.2 million, or 19.2%, from $6.4 million for the prior quarter and a decrease of $671,000, or 11.5%, from $5.8 million for the same quarter last year. The decrease in PTPP income in the current quarter compared to the prior and year ago quarters was primarily due to lower gains on sales of loans and an increase in salaries and employee benefits. Annualized PTPP income to average assets decreased to 1.96% for the current quarter, compared to 2.50% for the prior quarter and 2.58% for the year ago quarter. The decrease in PTPP income to average assets for the current quarter, compared to the prior quarter and the year ago quarter was due to a decrease in PTPP income combined with an increase in average assets.

For the year ended December 31, 2017, PTPP income was $24.2 million, an increase of $1.1 million, or 4.6%, from $23.1 million for the same period last year. PTPP income to average assets for the year ended December 31, 2017 decreased 30 basis points to 2.48% from 2.78% for the same period last year. The decrease in PTPP income to average assets for the year ended December 31, 2017, compared to the same period in 2016 was due to a larger proportional increase in assets than in PTPP income.

       
Three Months Ended Twelve Months Ended
December 31,   September 30,   %   December 31,   % December 31,   December 31,   %
  2017     2017   Change   2016   Change   2017     2016   Change
(Dollars in thousands)
 
PTPP income $ 5,140 $ 6,361 (19.2 %) $ 5,811 (11.5 %) $ 24,203 $ 23,128 4.6 %
Average assets $ 1,038,577 $ 1,009,489 2.9 % $ 897,315 15.7 % $ 975,849 $ 831,368 17.4 %
Annualized PTPP/average assets 1.96 % 2.50 % (21.6 %) 2.58 % (24.0 %) 2.48 % 2.78 % (10.8 %)
PTPP, excluding gain on sale of SBA loans $ 3,281 $ 3,569 (8.1 %) $ 3,683 (10.9 %) $ 14,882 $ 14,289 4.2 %
 

BALANCE SHEET

At December 31, 2017, the Company had total assets of $1.08 billion, an increase of $36.8 million, or 3.5%, from $1.04 billion at September 30, 2017 and an increase of $165.7 million, or 18.1%, from $913.2 million at December 31, 2016. Earning assets totaled $1.0 billion at December 31, 2017, an increase of $42.1 million, or 4.2%, from $1.0 billion at September 30, 2017, and an increase of $163.9 million, or 18.5%, from $885.2 million at December 31, 2016.

                 
December 31, September 30, $ % December 31, $ %
  2017     2017   Change Change   2016   Change Change
(Dollars in thousands, except per share amounts)
 
Assets $ 1,078,854 $ 1,042,034 $ 36,820 3.5 % $ 913,194 $ 165,660 18.1 %
Earning assets 1,049,054 1,007,004 42,050 4.2 % 885,167 163,887 18.5 %
Interest-earning deposits at FRB and other banks 103,391 138,868 (35,477 ) (25.5 %) 90,060 13,331 14.8 %
Investment securities 123,657 69,097 54,560 79.0 % 75,232 48,425 64.4 %
Loans held-for-sale 28,346 18,626 9,720 52.2 % 18,096 10,250 56.6 %
Loans receivable 787,399 774,160 13,239 1.7 % 696,142 91,257 13.1 %
Deposits 895,721 910,308 (14,587 ) (1.6 %) 795,104 100,617 12.7 %
 
Tangible common equity/total assets 10.68 % 10.95 % -0.27 % (2.5 %) 11.17 % -0.49 % (4.4 %)
Tangible common equity per common share $ 12.63 $ 12.51 $ 0.12 1.0 % $ 11.22 $ 1.41 12.6 %
 

Interest-earning Deposits at the FRB and Other Banks

Interest-earning deposits at the FRB and other banks totaled $103.4 million at the current quarter-end, a decrease of $35.5 million, or 25.5%, compared to $138.9 million at the end of the prior quarter, and an increase of $13.3 million, or 14.8%, compared to $90.1 million at the end of the year ago quarter. The quarter-over-quarter decrease in interest-earning deposits at the FRB and other banks was primarily due to a decrease in deposits combined increases in investment securities and loans during the current quarter.

Investment Securities

Investment securities totaled $123.7 million at the current quarter-end, an increase of $54.6 million, or 79.0%, compared to $69.1 million at the end of the prior quarter, and an increase of $48.4 million, or 64.4%, compared to $75.2 million at the end of the year ago quarter. The year-over-year increase in investment securities was due to investing the Company’s excess liquidity into higher yielding investment securities.

Loans Receivable

The following table details loans by type at the dates indicated:

  December 31,   September 30, $   %     December 31,   $   %
  2017     2017   Change Change   2016   Change Change
(Dollars in thousands)
 
Construction $ 12,575 $ 11,396 $ 1,179 10.3 % $ 12,252 $ 323 2.6 %
Commercial real estate $ 645,211 632,803 12,408 2.0 % 563,970 81,241 14.4 %
Commercial and industrial $ 122,917 124,659 (1,743 ) (1.4 %) 114,319 8,598 7.5 %
Consumer $ 4,928     3,710     1,218   32.8 %   3,998     930   23.3 %
Gross loans 785,630 772,568 13,062 1.7 % 694,539 91,091 13.1 %
 
Net deferred loan fees/costs   1,768     1,592     176   11.1 %   1,603     165   10.3 %
Loans receivable $ 787,398   $ 774,160   $ 13,238   1.7 % $ 696,142   $ 91,256   13.1 %
 
Loans held-for-sale $ 28,346 $ 18,626 $ 9,720 52.2 % $ 18,096 $ 10,250 56.6 %
Loans receivable including loans held-for-sale $ 815,744 $ 792,786 $ 22,958 2.9 % $ 714,238 $ 101,506 14.2 %
 
Loan-to-deposit (LTD) ratio 87.9 % 85.0 % 2.9 % 3.4 % 87.6 % 0.4 % 0.4 %
LTD ratio including loans held-for-sale 91.1 % 87.1 % 4.0 % 4.6 % 89.8 % 1.2 % 1.4 %
 

At December 31, 2017, loans receivable, including loans held-for-sale were $815.7 million, an increase of $23.0 million, or 2.9%, from $792.8 million at September 30, 2017 and an increase of $101.5 million, or 14.2%, from $714.2 million at December 31, 2016. During the fourth quarter of 2017, total new loan production, including revolving lines of credit, was $105.1 million, compared to $110.8 million for the prior quarter and $69.5 million for the same quarter last year. For the year ended December 31, 2017, total new loan production, including revolving lines of credit, was $436.0 million, compared to $348.0 million for the same period last year.

During the fourth quarter of 2017, $57.9 million of loans paid off, compared to $49.9 million in the prior quarter and $17.1 million in year ago quarter. The increase in loan pay offs in the current quarter was primarily due to our decision not to meet high refinance demands at uncompetitive terms and conditions. During the year ended December 31, 2017, $189.8 million of loans paid off, compared to $92.7 million during the same period in 2016. During the current quarter, we sold $22.6 million of SBA loans, compared to sales of $37.7 million in the prior quarter and sales of $31.2 million in the year ago quarter. During the year ended December 31, 2017, we sold $124.4 million of SBA loans, compared to $123.4 million in the same period last year. During the current quarter, the Company sold $3.7 million of non-SBA loans, compared to $3.1 million and $5.5 million of sales of non-SBA loans in the prior and year ago quarters, respectively. During the year ended December 31, 2017, we sold $6.8 million of non-SBA loans, compared to $17.2 million in the same period last year.

Deposits

The following table details deposits by category at the dates indicated:

 

December 31, 2017

    September 30, 2017     $   %     December 31, 2016     $   %
Balance   %   Balance   %   Change Change Balance   %   Change Change
(Dollars in thousands)
 
Noninterest-bearing demand $ 203,641 22.7 % $ 211,327 23.2 % $ (7,686 ) (3.6 %) $ 197,210 24.8 % $ 6,431 3.3 %
Money market & NOW 169,710 18.9 % 169,111 18.6 % 599 0.4 % 169,309 21.3 % 401 0.2 %
Savings 15,876 1.8 % 15,394 1.7 % 482 3.1 % 12,990 1.6 % 2,886 22.2 %
Time deposits 506,494 56.6 % 514,476 56.5 % (7,982 ) (1.6 %) 415,595 52.3 % 90,899 21.9 %
                   
Total Deposits $ 895,721   100.0 % $ 910,308   100.0 % $ (14,587 ) (1.6 %) $ 795,104   100.0 % $ 100,617   12.7 %
 
Cost of deposits 0.98 % 0.93 % 0.06 % 5.9 % 0.75 % 0.24 % 31.7 %
 

Total deposits were $895.7 million at the end of the current quarter, a decrease of $14.6 million, or 1.6%, compared to $910.3 million at the end of the prior quarter and an increase of $100.6 million, or 12.7%, compared to $795.1 million at the end of the year ago quarter. Noninterest-bearing deposits decreased $7.7 million, or 3.6%, to $203.6 million at the end of the current quarter from $211.3 million at the end of the prior quarter and increased $6.4 million, or 3.3%, compared to $197.2 million at the end of the year ago quarter. Noninterest-bearing deposits to total deposits were 22.7%, 23.2% and 24.8% at the end of the current, prior and year ago quarters, respectively.

ASSET QUALITY

  December 31,   September 30,   $   %     December 31,   $   %
  2017     2017   Change Change   2016   Change Change
(Dollars in thousands)

Delinquent Loans:¹

Loans 30-89 days past due $ 131 $ 232 $ (101 ) (43.5 %) $ 309 $ (178 ) (57.6 %)
90 days or more past due and still accruing - 57 (57 ) - - - -
Nonaccrual loans   2,467     2,638     (171 ) (6.5 %)   3,084     (617 ) (20.0 %)
Delinquent loans $ 2,598   $ 2,927   $ (329 ) (11.2 %) $ 3,393   $ (795 ) (23.4 %)
 

Nonperforming Assets:¹

90 days or more past due and still accruing $ - $ 57 $ (57 ) (100.0 %) $ - $ - -
Nonaccrual loans   2,467     2,638     (171 ) (6.5 %)   3,084     (617 ) (20.0 %)
Nonperforming loans 2,467 2,695 (228 ) (8.5 %) 3,084 (617 ) (20.0 %)
 
Other real estate owned   -     -     -   -     1,155     (1,155 ) (100.0 %)
Nonperforming assets $ 2,467   $ 2,695   $ (228 ) (8.5 %) $ 4,239   $ (1,772 ) (41.8 %)
 
Nonaccrual loans to loans receivable 0.31 % 0.34 % -0.03 % (8.8 %) 0.44 % -0.13 % (29.5 %)
Nonperforming loans to loans receivable 0.31 % 0.35 % -0.04 % (11.4 %) 0.44 % -0.13 % (29.5 %)
Nonperforming assets to total assets 0.23 % 0.26 % -0.03 % (11.5 %) 0.46 % -0.23 % (50.0 %)
Texas Ratio² 1.99 % 2.20 % -0.21 % (9.5 %) 3.84 % -1.85 % (48.2 %)
 

Classified Assets:¹

Substandard $ 10,103 $ 11,885 $ (1,782 ) (15.0 %) $ 8,125 $ 1,978 24.3 %
Doubtful - - - - - - -
Loss   -     -     -   -     -     -   -  
Classified loans $ 10,103 $ 11,885 $ (1,782 ) (15.0 %) $ 8,125 $ 1,978 24.3 %
 
Other real estate owned   -     -     -   -     1,155     (1,155 ) (100.0 %)
Classified assets $ 10,103   $ 11,885   $ (1,782 ) (15.0 %) $ 9,280   $ 823   8.9 %
 
Classified loans to loans receivable 1.28 % 1.54 % -0.26 % (16.9 %) 1.17 % 0.11 % 9.4 %
Classified loans to Tier 1 and ALLL 8.16 % 9.71 % -1.55 % (16.0 %) 7.35 % 0.81 % 11.0 %
Classified assets to total assets 0.94 % 1.14 % -0.20 % (17.5 %) 1.02 % -0.08 % (7.8 %)
Classified assets to Tier 1 and ALLL 8.16 % 9.71 % -1.55 % (16.0 %) 8.40 % -0.24 % (2.9 %)
 

Performing TDR loans:

$ 1,200 $ 4,185 $ (2,985 ) (71.3 %) $ 3,806 $ (2,606 ) (68.5 %)
 

Allowance for Loan Losses Items:

Balance at beginning of period $ 8,249 $ 8,778 $ (529 ) (6.0 %) $ 12,438 $ (4,189 ) (33.7 %)
Provision for loan losses - 164 (164 ) (100.0 %) - -

-

 

Charge-offs 244 726 (482 ) (66 %) 4,010 (3,766 ) (93.9 %)
Recoveries   648     33     615   1863.6 %   28     620   2214.3 %
Balance at the end of period $ 8,653   $ 8,249   $ 404   4.9 % $ 8,456   $ 197   2.3 %
 
ALLL to loans receivable 1.10 % 1.07 % 2.8 % 1.21 % (9.1 %)
ALLL to nonperforming loans 350.75 % 306.09 % 14.6 % 274.19 % 27.9 %
 

1 Net of SBA guaranteed balance

2 Nonperforming assets divided by tangible common equity and ALLL

 

Loans 30 to 89 days past due and on accrual status at the end of the current quarter were $131,000, a decrease of $101,000 from $232,000 at the end of the prior quarter, and a decrease of $178,000 from $309,000 at the end of the same quarter last year. The quarter-over-quarter decrease in loans 30 to 89 days past due was primarily due to one loan totaling $192,000 that became current during the current quarter and one loan totaling $41,000 that was fully paid off during the current quarter. There were no loans 90 days or more past due and still accruing at the end of the current quarter, a decrease from $57,000 at the end of the prior quarter, and there were no loans 90 days or more past due and still accruing at the end of the year ago quarter. Nonaccrual loans decreased $171,000 to $2.5 million, or 0.31% of loans receivable at the end of the current quarter from $2.6 million, or 0.34% of loans receivable at the end of the prior quarter and decreased $617,000 from $3.1 million, or 0.44% of loans receivable at the end of the year ago quarter.

Nonperforming loans at December 31, 2017 were $2.5 million, or 0.31% of loans receivable, a decrease of $228,000, compared to $2.7 million, or 0.35% of loans receivable at the end of the prior quarter and a decrease of $617,000 from $3.1 million, or 0.44% of loans receivable at the end of the same quarter last year.

The Company did not have any other real estate owned (“OREO”) at the end of the current and prior quarters and had $1.2 million of OREO at the end of the year ago quarter.

Nonperforming assets at the end of current quarter were $2.5 million, or 0.23% of total assets, a decrease of $228,000, compared to $2.7 million, or 0.26% of total assets at September 30, 2017, and a decrease of $1.8 million from $4.2 million, or 0.46% of total assets at December 31, 2016. The year-over-year quarterly decrease in nonperforming assets was primarily due to the sale of $1.2 million of OREO.

The allowance for loan losses at December 31, 2017 was $8.7 million, or 1.10% of loans receivable, compared to $8.2 million, or 1.07% of loans receivable at September 30, 2017, and $8.5 million, or 1.21%, of loans receivables at the end of the year ago quarter. The allowance for loan losses to nonperforming loans was 350.75%, 306.09%, and 274.19% at December 31, 2017, September 30, 2017, and December 31, 2016, respectively.

CAPITAL

At December 31, 2017, CBB and the Bank continued to exceed all regulatory capital requirements to be classified as a “well-capitalized” institution and maintained a capital conservation buffer in excess of the minimum required to avoid limitations on capital distributions, including dividend payments, and certain discretionary bonus payments. The minimum capital conservation buffer requirement was 1.250% and 0.625% in 2017 and 2016, respectively. The capital conservation buffer is calculated as the smallest excess of a bank’s common equity tier 1, tier 1 risk-based and total risk-based capital ratios over the regulatory “adequately” capitalized minimum ratios of 4.50%, 6.00% and 8.00%, respectively. The minimum capital conservation buffer will increase an additional 0.625% at the beginning of 2018 and 2019, reaching the fully phased-in minimum of 2.500% in 2019. When the capital conservation buffer is fully phased-in in 2019, bank holding companies and banks will be required to maintain common equity tier 1, tier 1 risk-based and total risk-based capital ratios that are at least 50 basis points greater than the well-capitalized minimums to avoid the aforementioned limitations on capital distributions and discretionary bonus payments. CBB’s and the Bank’s regulatory capital ratios and capital conservation buffer at the dates indicated are summarized below:

  Well-          
Capitalized December 31, September 30, June 30, March 31, December 31,
Minimum 2017 2017 2017 2017 2016
Leverage ratio
Company 5.00% 11.06% 11.26% N/A N/A N/A
Bank 5.00% 11.02% 11.22% 11.52% 11.75% 11.40%
Common equity tier 1 capital ratio
Company 6.50% 13.63% 13.70% N/A N/A N/A
Bank 6.50% 13.58% 13.65% 13.43% 13.58% 13.70%
Tier 1 risk-based capital ratio
Company 8.00% 13.63% 13.70% N/A N/A N/A
Bank 8.00% 13.58% 13.65% 13.43% 13.58% 13.70%
Total risk-based capital ratio
Company 10.00% 14.78% 14.82% N/A N/A N/A
Bank 10.00% 14.74% 14.77% 14.61% 14.76% 14.95%
Capital conservation buffer
Company 6.788% 6.826% N/A N/A N/A
Bank 6.742% 6.774% 6.611% 6.76% 6.95%
 

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, Ohio, Utah and Washington.

For additional information, please go to www.cbb-bank.com.

NON-GAAP FINANCIAL MEASURES

CBB may use certain non-GAAP financial measures to provide meaningful supplemental information regarding CBB’s operational performance and to enhance investors’ overall understanding of such financial performance. These non-GAAP measures have important limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under the GAAP.

FORWARD-LOOKING STATEMENTS

This release may contain forward-looking statements that 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, and competition within the business areas in which CBB Bancorp, Inc. conducts its operations, including the real estate market in California, and other factors beyond CBB Bancorp, Inc.’s control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereof. CBB Bancorp, Inc. undertakes no obligation to revise these forward-looking statements publicly to reflect subsequent events or circumstances.

               
BALANCE SHEET (Unaudited)
(Dollars in thousands)
 
December 31, September 30, $ % December 31, $ %
  2017     2017   Change Change   2016   Change Change
ASSETS
Cash and due from banks $ 9,353 $ 11,394 $ (2,041 ) (17.9 %) $ 9,127 $ 226 2.5 %
Interest-earning deposits at the FRB and other banks 103,391 138,868 (35,477 ) (25.5 %) 90,060 13,331 14.8 %
Investment securities 123,657 69,097 54,560 79.0 % 75,232 48,425 64.4 %
Loans held-for-sale, at the lower of cost or fair value 28,346 18,626 9,720 52.2 % 18,096 10,250 56.6 %
 
Loans receivable 787,399 774,160 13,239 1.7 % 696,142 91,257 13.1 %
Allowance for loan losses   (8,653 )   (8,249 )   (404 ) 4.9 %   (8,456 )   (197 ) 2.3 %
Loans receivable, net 778,746 765,911 12,835 1.7 % 687,686 91,060 13.2 %
 
FHLB, FRB & PCBB stocks 6,261 6,253 8 0.1 % 5,637 624 11.1 %
Other assets   29,100     31,885     (2,785 ) (8.7 %)   27,356     1,744   6.4 %
TOTAL ASSETS $ 1,078,854   $ 1,042,034   $ 36,820   3.5 % $ 913,194   $ 165,660   18.1 %
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing $ 203,641 $ 211,327 $ (7,686 ) (3.6 %) $ 197,210 $ 6,431 3.3 %
Interest-bearing   692,080     698,981     (6,901 ) (1.0 %)   597,894     94,186   15.8 %
Total deposits 895,721 910,308 (14,587 ) (1.6 %) 795,104 100,617 12.7 %
 
FHLB advances 60,000 10,000 50,000 500.0 % 10,000 50,000 500.0 %
Other liabilities   7,955     7,611     344   4.5 %   6,051     1,904   31.5 %
Total liabilities   963,676     927,919     35,757   3.9 %   811,155     152,521   18.8 %
 
Stockholders' Equity   115,178     114,115     1,063   0.9 %   102,039     13,139   12.9 %
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,078,854   $ 1,042,034   $ 36,820   3.5 % $ 913,194   $ 165,660   18.1 %
 
 
STATEMENT OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)
                   
Three Months Ended Twelve Months Ended
December 31, September 30, % December 31, % December 31, December 31, %
2017 2017 Change   2016 Change 2017 2016 Change
 
Interest income $ 12,471 $ 12,462 0.1% $ 10,096 23.5% $ 46,703 $ 39,243 19.0%
Interest expense 2,287 2,098 9.0% 1,500 52.5% 7,680 5,691 34.9%
Net interest income 10,184 10,364 (1.7%) 8,596 18.5% 39,023 33,552 16.3%
 
Provision for loan losses - 164 (100.0%) - - 514 3,900 (86.8%)
Net interest income after provision for loan losses 10,184 10,200 (0.2%) 8,596 18.5% 38,509 29,652 29.9%
 
Gain on sale of loans 1,859 2,792 (33.4%) 2,128 (12.6%) 9,321 8,839 5.5%
Gain (loss) on sale of OREO - - - - - 103 - 100.0%
Service charges and other income 1,057 934 13.2% 882 19.8% 4,120 3,078 33.9%
Noninterest income 2,916 3,726 (21.7%) 3,010 (3.1%) 13,544 11,917 13.7%
 
Salaries and employee benefits 4,941 4,615 7.1% 3,762 31.3% 17,846 14,951 19.4%
Occupancy and equipment 859 808 6.3% 548 56.8% 2,901 2,122 36.7%
Other expenses 2,160 2,306 (6.3%) 1,485 45.5% 7,617 5,268 44.6%
Noninterest expense 7,960 7,729 3.0% 5,795 37.4% 28,364 22,341 27.0%
 
Income before income tax expense 5,140 6,197 (17.1%) 5,811 (11.5%) 23,689 19,228 23.2%
 
Income tax expense 4,127 2,491 65.7% 2,371 74.1% 11,639 7,791 49.4%
               
Net income $ 1,013 $ 3,706 (72.7%) $ 3,440 (70.6%) $ 12,050 $ 11,437 5.4%
 
PTPP $ 5,140 $ 6,361 (19.2%) $ 5,811 (11.5%) $ 24,203 $ 23,128 4.6%
PTPP excluding gain on sale of SBA loans $ 3,281 $ 3,569 (8.1%) $ 3,683 (10.9%) $ 14,882 $ 14,289 4.2%
 
Outstanding number of shares 9,121,009 9,121,009 - 9,095,159 0.3% 9,121,009 9,095,159 0.3%
 
Weighted average shares for basic EPS 9,121,009 9,106,500 0.2% 9,094,949 0.3% 9,104,533 9,038,366 0.7%
Weighted average shares for diluted EPS 9,500,234 9,469,146 0.3% 9,328,776 1.8% 9,459,014 9,255,619 2.2%
 
Basic EPS $ 0.11 $ 0.41 (73.2%) $ 0.38 (71.1%) $ 1.32 $ 1.27 3.9%
Diluted EPS $ 0.11 $ 0.39 (71.8%) $ 0.37 (70.3%) $ 1.27 $ 1.24 2.4%
 
 
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share amounts)
                   
Three Months Ended Twelve Months Ended
December 31, September 30, % December 31, % December 31, December 31, %
2017 2017 Change   2016 Change 2017 2016 Change

Performance Ratios:

Return on average assets 0.39% 1.46% (73.3%) 1.53% (74.5%) 1.23% 1.38% (10.9%)
Return on average equity 3.46% 13.08% (73.5%) 13.58% (74.5%) 10.92% 11.80% (7.5%)
Net interest margin 4.06% 4.24% (4.2%) 3.94% 3.0% 4.17% 4.16% 0.2%
Cost of funds 0.99% 0.94% 5.3% 0.76% 30.3% 0.89% 0.78% 14.1%
Efficiency ratio 60.76% 54.85% 10.8% 49.93% 21.7% 53.96% 49.13% 9.8%
 

Capital Ratios:

Core capital (leverage) ratio 11.06% 11.26% (1.8%) 11.40% (3.0%) 11.06% 11.40% (3.0%)
Common equity tier 1 risk-based capital ratio 13.63% 13.70% (0.5%) 13.70% (0.5%) 13.63% 13.70% (0.5%)
Tier 1 risk-based capital ratio 13.63% 13.70% (0.5%) 13.70% (0.5%) 13.63% 13.70% (0.5%)
Total risk-based capital ratio 14.78% 14.82% (0.3%) 14.95% (1.1%) 14.78% 14.95% (1.1%)
Minimum required capital conservation buffer 1.250% 1.250% - 0.625% 100.0% 1.250% 0.625% 100.0%
CBB Capital conservation buffer 6.788% 6.826% (0.6%) 6.953% (2.4%) 6.788% 6.953% (2.4%)
Tangible common equity to total assets 10.68% 10.95% (2.5%) 11.17% (4.4%) 10.68% 11.17% (4.4%)
Tangible common equity per share $ 12.63 $ 12.51 1.0% $ 11.22 12.6% $ 12.63 $ 11.22 12.6%
 

Selected Average Balances:

Loans¹ $ 805,581 $ 819,395 (1.7%) $ 717,883 12.2% $ 790,627 $ 698,975 13.1%
Total investment securities 96,789 70,490 37.3% 47,409 104.2% 78,631 23,519 234.3%
Interest-earning assets 1,004,327 976,476 2.9% 871,973 15.2% 943,938 808,456 16.8%
Total assets 1,038,577 1,009,489 2.9% 897,315 15.7% 975,849 831,368 17.4%
Noninterest-bearing deposits 194,366 188,320 3.2% 183,238 6.1% 186,977 155,449 20.3%
Total deposits 898,057 878,543 2.2% 779,080 15.3% 841,499 717,572 17.3%
Interest-bearing liabilities 720,323 701,738 2.6% 605,842 18.9% 671,622 572,205 17.4%
Stockholders' equity 116,167 112,409 3.3% 100,739 15.3% 110,349 96,954 13.8%
 

¹ Includes loans held-for-sale

 
 
SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited)
(Dollars in thousands)
           
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.
  2017     2017     2017     2017     2016  

Allowance for Loan Losses

Balance at beginning of period $ 8,249 $ 8,778 $ 8,399 $ 8,456 $ 12,438
Provision for loan losses - 164 350 - -
Charge-offs 244 726 - 83 4,010
Recoveries   648     33     29     26     28  
Balance at the end of period $ 8,653   $ 8,249   $ 8,778   $ 8,399   $ 8,456  
 

Nonperforming Assets:¹

Over 90 days still accruing $ - $ 57 $ - $ - $ -
Nonaccrual loans   2,467     2,638     2,855     3,158     3,084  
Total nonperforming loans 2,467 2,695 2,855 3,158 3,084
 
Other real estate owned   -     -     -     -     1,155  
Total nonperforming assets $ 2,467   $ 2,695   $ 2,855   $ 3,158   $ 4,239  
 

Classified Assets:¹

Substandard $ 10,103 $ 11,885 $ 11,520 $ 8,103 $ 8,125
Doubtful - - - - -
Loss   -     -     -     -     -  
Total classified loans $ 10,103 $ 11,885 $ 11,520 $ 8,103 $ 8,125
 
Other real estate owned   -     -     -     -     1,155  
Total classified assets $ 10,103   $ 11,885   $ 11,520   $ 8,103   $ 9,280  
 

Performing TDR loans:

$ 1,200 $ 4,185 $ 4,262 $ 3,740 $ 3,806
 

Delinquent Loans:¹

Loans 30-89 days past due $ 131 $ 232 $ 523 $ 1,609 $ 309
90 days or more past due and still accruing - 57 - - -
Nonaccrual   2,467     2,638     2,855     3,158     3,084  
Total delinquent loans $ 2,598   $ 2,927   $ 3,378   $ 4,767   $ 3,393  
 

Asset Quality Ratios:

Net charge-offs to average loans² (0.20 %) 0.34 % (0.01 %) 0.03 % 2.21 %
Nonaccrual loans to loans receivable 0.31 % 0.34 % 0.37 % 0.44 % 0.44 %
Nonperforming loans to loans receivable 0.31 % 0.35 % 0.37 % 0.44 % 0.44 %
Nonperforming assets to total assets 0.23 % 0.26 % 0.29 % 0.34 % 0.46 %
Classified loans to loans receivable 1.28 % 1.54 % 1.51 % 1.12 % 1.17 %
Classified loans to Tier 1 and ALLL 8.16 % 9.71 % 9.70 % 7.10 % 7.35 %
Classified assets to total assets 0.94 % 1.14 % 1.16 % 0.88 % 1.02 %
Classified assets to Tier 1 and ALLL 8.16 % 9.71 % 9.70 % 7.10 % 8.40 %
ALLL to loans receivable 1.10 % 1.07 % 1.15 % 1.16 % 1.21 %
ALLL to nonaccrual loans 350.75 % 312.70 % 307.46 % 265.96 % 274.19 %
ALLL to nonperforming loans 350.75 % 306.09 % 307.46 % 265.96 % 274.19 %
ALLL to nonperforming assets 350.75 % 306.09 % 307.46 % 265.96 % 199.48 %
Texas ratio ³ 1.99 % 2.20 % 2.40 % 2.77 % 3.84 %
 
1 Net of SBA guaranteed balance
2 Includes loans held-for-sale
3 Nonperforming assets divided by tangible common equity and ALLL
 
 
MARGIN ANALYSIS (Unaudited)
(Dollars in thousands)
                     
Three Months Ended
December 31, 2017 September 30, 2017 December 31, 2016
Avg Balance   Interest   Yield Avg Balance   Interest   Yield Avg Balance   Interest   Yield

 

 

INTEREST-EARNING ASSETS
Loans ¹ $ 805,581 $ 11,567 5.70 % $ 819,395 $ 11,781 5.70 % $ 717,883 $ 9,544 5.29 %
Investment securities² 96,789 584 2.39 % 70,490 411 2.31 % 47,409 233 1.96 %
Interest-earning at the FRB and other banks 95,703 307 1.27 % 80,343 253 1.25 % 101,075 140 0.55 %
Other earning assets   6,254       101   6.41 %   6,248       98   6.22 %   5,606       223   15.83 %
Total interest-earning assets ² 1,004,327 12,559 4.96 % 976,476 12,543 5.10 % 871,973 10,140 4.63 %
 
NONINTEREST-EARNING ASSETS
Cash and due from banks 11,879 11,980 11,762
Other noninterest-earning assets   30,645     29,743     25,808  
Total noninterest-earning assets 42,524 41,723 37,570
 
Less: Allowance for loan losses (8,274 ) (8,710 ) (12,228 )
     
TOTAL ASSETS $ 1,038,577   $ 1,009,489   $ 897,315  
 
INTEREST-BEARING DEPOSITS
Interest-bearing demand $ 1,725 $ 1 0.15 % $ 2,514 $ 1 0.15 % $ 1,865 $ 1 0.15 %
Money market 174,102 432 0.98 % 173,460 417 0.95 % 167,465 371 0.88 %
Savings 15,457 62 1.59 % 14,494 58 1.59 % 12,775 51 1.59 %
Time deposits   512,407       1,726   1.34 %   499,755       1,575   1.25 %   413,737       1,036   1.00 %
Total interest-bearing deposits 703,691 2,221 1.25 % 690,223 2,051 1.18 % 595,842 1,459 0.97 %
 
Borrowings   16,632       66   1.57 %   11,515       47   1.62 %   10,000       41   1.63 %
Total interest-bearing liabilities 720,323 2,287 1.26 % 701,738 2,098 1.19 % 605,842 1,500 0.98 %
 
Noninterest-bearing deposits 194,366 188,320 183,238
Other liabilities 7,721 7,022 7,496
 
Stockholders' equity   116,167     112,409     100,739  
TOTAL LIABILITIES

& STOCKHOLDERS' EQUITY

$ 1,038,577   $ 1,009,489   $ 897,315  
 
Net interest income $ 10,272 $ 10,445 $ 8,640
 
 
Cost of deposits 0.98 % 0.93 % 0.75 %
 
Cost of funds 0.99 % 0.94 % 0.76 %
 
Net interest spread 3.70 % 3.91 % 3.65 %
 
Net interest margin² 4.06 % 4.24 % 3.94 %
 
1 Includes loans held-for-sale

2 Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

 
 
MARGIN ANALYSIS (Unaudited)
(Dollars in thousands)
               
Twelve Months Ended
December 31, 2017 December 31, 2016
Avg Balance   Interest   Yield Avg Balance   Interest   Yield
 
INTEREST-EARNING ASSETS
Loans ¹ $ 790,627 $ 44,054 5.57 % $ 698,975 $ 37,935 5.43 %
Investment securities² 78,631 1,781 2.27 % 23,519 447 1.90 %
Interest-earning at the FRB and other banks 68,613 789 1.15 % 80,699 425 0.53 %
Other earning assets   6,067     409 6.74 %   5,263     510 9.69 %
Total interest-earning assets ² 943,938 47,033 4.98 % 808,456 39,317 4.86 %
 
NONINTEREST-EARNING ASSETS
Cash and due from banks 11,679 8,746
Other noninterest-earning assets   28,697     23,969  
Total noninterest-earning assets 40,376 32,715
 
Less: Allowance for loan losses (8,465 ) (9,803 )
   
TOTAL ASSETS $ 975,849   $ 831,368  
 
INTEREST-BEARING DEPOSITS
Interest-bearing demand $ 2,080 $ 3 0.15 % $ 1,450 $ 2 0.15 %
Money market 172,059 1,618 0.94 % 151,484 1,322 0.87 %
Savings 13,901 226 1.63 % 10,672 168 1.57 %
Time deposits  

466,482

      5,594   1.20 %   398,517       4,034   1.01 %
Total interest-bearing deposits 654,522 7,441 1.14 % 562,123 5,526 0.98 %
 
Short-term borrowings   17,100       239   1.40 %   10,082       165   1.64 %
Total interest-bearing liabilities 671,622 7,680 1.15 % 572,205 5,691 0.99 %
 
Noninterest-bearing deposits 186,977 155,449
Other Liabilities 6,901 6,760
 
Stockholders' equity 110,349 96,954
   
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 975,849   $ 831,368  
 
Net interest income $ 39,353 $ 33,626
 
 
Cost of deposits 0.88 % 0.77 %
 
Cost of funds 0.89 % 0.78 %
 
Net interest spread 3.83 % 3.87 %
 
Net interest margin² 4.17 % 4.16 %
 
1 Includes loans held-for-sale

2 Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

Contacts

CBB Bancorp, Inc.
Michael W. McCall
EVP & CFO
(323) 988-3144
MichaelM@cbb-bank.com

Recent Stories

RSS feed for CBB Bancorp, Inc.

CBB Bancorp, Inc.