CBB Bancorp, Inc. Reports First Quarter 2024 Financial Results

LOS ANGELES--(BUSINESS WIRE)--CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank, doing business as “CBB Bank” (the "Bank"), announced today net income of $5.7 million for the first quarter 2024, or $0.54 per diluted share, a decrease of 19.0% compared to $7.0 million, or $0.66 per diluted share, in the prior quarter and a decrease of 20.0% compared to $7.1 million, or $0.67 per diluted share, in the same period last year.

OVERALL RESULTS

Net income for the first quarter 2024 decreased from the prior quarter primarily due to lower net interest income, higher provision expense for credit losses offset by a negative credit loss expense related to off-balance-sheet financial instruments, and higher noninterest expenses offset by higher gain on sale of loans. The return on average assets for the first quarter 2024 was 1.32% compared to 1.54% for the fourth quarter 2023 and 1.59% for the first quarter 2023. The return on average equity for the first quarter 2024 was 9.57%, compared to 11.94% for the fourth quarter 2023 and 13.45% for the first quarter 2023. The efficiency ratio for the first quarter 2024 was 54.68%, compared to 49.45% for the fourth quarter 2023 and 51.04% for the first quarter 2023.

James Hong, President and CEO, commented, “In the present economic climate characterized by elevated interest rates, fostering growth poses a formidable challenge. However, CBB is committed to pursuing an expansion strategy in 2024, with a specific emphasis on penetrating untapped markets along the East Coast. To that end, our primary strategic objective for the forthcoming year is to establish a robust presence in the East Coast market, where we have yet to establish a foothold, but where we believe there are considerable opportunities.”

INCOME STATEMENT

Net Interest Income

Net interest income for the first quarter 2024 was $15.8 million, a decrease of $1.4 million, or 7.9%, from the fourth quarter 2023, and a decrease of $3.3 million, or 17.1%, from the first quarter 2023. The decrease in net interest income compared with both the fourth quarter 2023 and the first quarter 2023 was due to relatively higher increases in interest expenses on deposits.

Net Interest Margin

The net interest margin for the first quarter 2024 was 3.77%, compared to 3.86% for the fourth quarter 2023 and 4.38% for the first quarter 2023. The decrease in the net interest margin from the prior quarter and from the same quarter of 2023 is due primarily to the rising cost of funds. The cost of funds for the first quarter 2024 increased to 3.48% compared to 3.20% for the fourth quarter 2023 and 2.10% for the first quarter 2023.

Provision for Credit Losses

Credit loss expense of a net $400 thousand was recorded for the first quarter 2024. This amount was comprised of provision expense for credit losses of $743 thousand offset by a $343 thousand reduction in ACL related to off-balance-sheet financial instruments. No provisions for credit losses was recorded for the fourth quarter 2023 or the first quarter 2023.

Refer to the financial tables in this press release for additional information and trends.

Noninterest Income

Noninterest income in the first quarter 2024 was $2.6 million, an increase of $597 thousand compared to $2.0 million for the fourth quarter 2023, and an increase of $1.5 million compared to $1.1 million in the first quarter 2023. The quarter-over-quarter increase in noninterest income was primarily the result of higher gain on sale of loans. The Bank sold approximately $28.2 million in SBA loans with an average premium of 8.4% during the first quarter 2024 compared to sale of $21.7 million in SBA loans with an average premium of 6.7% during the fourth quarter 2023. There was no sale of loans during the first quarter 2023.

Noninterest Expense

Noninterest expense for the first quarter 2024 was $10.0 million, compared to $9.5 million for the fourth quarter 2023 and $10.3 million for the first quarter 2023. Salaries and employee benefits expenses totaled $6.0 million for the first quarter 2024 compared to $5.4 million for the fourth quarter 2023 and $6.1 million for the first quarter 2023.

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

Income Taxes

The Company’s effective tax rate for the first quarter 2024 was 28.4% compared to 27.6% for fourth quarter 2023 and 28.1% for first quarter 2023.

BALANCE SHEET

Investment Securities

Investment securities were $59.1 million at March 31, 2024, a decrease of $0.7 million, or 1.2% from December 31, 2023, and a decrease of $9.8 million or 14.2% from March 31, 2023. The decreases were due to principal paydowns and an absence of portfolio additions during the first quarter of 2024. Management believes that the Bank currently has adequate liquidity and does not need to sell securities for liquidity purposes.

Loans Receivable

Loans receivable (including loans held-for-sale) at March 31, 2024, was $1.39 billion, a decrease of $29.7 million, or 2.1% from December 31, 2023, and a decrease of $74.0 million, or 5.0%, from March 31, 2023. The decrease in loans receivable since last quarter, paired with the reduction from the previous year, reflects diminished loan demand amid the prevailing high-interest rate environment.

Allowance for Credit Losses and Asset Quality

The allowance for credit losses at March 31, 2024, was $16.0 million or 1.34% of loans held-for-investment, compared to $15.3 million at December 31, 2023, or 1.27% of loans held-for-investment, and compared to $15.6 million at March 31, 2023, or 1.28% of total loans held-for-investment. Total Nonperforming assets at March 31, 2024 were $4.4 million, compared to $2.5 million at December 31, 2023, and $0.6 million at March 31, 2023. The coverage ratio of allowance for credit losses to nonperforming assets was over 360% at March 31, 2024.

SBA Loans Held-for-Sale

Total SBA loans held-for-sale at March 31, 2024, was $198.2 million, compared to $218.3 million at December 31 2023, and $243.8 million at March 31, 2023. We continue to assess SBA loan market premiums and plan to sell loans when it is advantageous to do so.

Deposits

Total deposits were $1.36 billion at March 31, 2024, down $92.6 million, or 6.4%, from December 31, 2023, and down $176.3 million, or 11.5%, from March 31, 2023. DDAs were 21.6% of total deposits for both March 31, 2024 and December 31, 2023, and 28.6% at March 31, 2023. NOW and MMDA deposits comprised 16.9% of total deposits at March 31, 2024, compared to 16.3% at December 31, 2023, and 13.8% at March 31, 2023. The quarter-over-quarter and year-over-year declines in DDAs can be attributed to the higher interest rate environment. Depositors were eager to capitalize on the rising interest rates, moving funds from DDA to Savings, MMDA, CD or some combination thereof.

Borrowings

The Bank has maintained $50.0 million of Federal Home Loan Bank advances since March 31, 2023. The blended cost of FHLB advances was 0.94% as of March 31, 2024.

Capital

Stockholders’ equity was $240.6 million at March 31, 2024, representing an increase of $4.9 million, or 2.1%, from $235.7 million at December 31, 2023. Tangible book value per share at March 31, 2024, was $22.49, compared with $22.03 at December 31, 2023, an increase of $0.46, or 2.1% per share.

Each of the Company’s and the Bank’s regulatory capital ratios increased at March 31, 2024, when compared to December 31, 2023, and March 31, 2023. Capital ratios continue to exceed the minimum levels required to be considered “Well Capitalized” under the applicable regulatory capital rules.

The Common Equity Tier 1 Risked-Based Capital Ratios at March 31, 2024, were 18.67% and 18.65% for the Company and the Bank, respectively, and Total Capital Ratios were 19.92% and 19.91% for the Company and the Bank, respectively. The Common Equity Tier 1 Risked-Based Capital Ratios at March 31, 2023, were 16.15% and 16.10% for the Company and the Bank, respectively, and Total Capital Ratios were 17.37% and 17.31% for the Company and the Bank, respectively.

About CBB Bancorp, Inc.:

CBB Bancorp, Inc. is the holding company of Commonwealth Business Bank, a full-service commercial bank which specializes in loans to small-to-medium-sized businesses and does business as “CBB Bank.” As of March 31, 2024, the Bank had eleven full-service banking offices in Los Angeles and Orange Counties in California, Dallas County in Texas and Honolulu, Hawaii; two SBA regional offices in Los Angeles and Dallas Counties; and loan production offices in Georgia and Washington. For additional information, please go to www.cbb-bank.com under the tab “About Us” and select “Investor Relations” to see the 1Q 2024 Overview.

FORWARD-LOOKING STATEMENTS:

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. CBB Bancorp, Inc. (the “Company”) intends that such forward-looking statements be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described herein are necessarily subject to risks and uncertainties that may cause actual results to differ materially and adversely from those described herein. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Factors that might cause actual results to differ materially from those presented, either expressed or implied, in this news release include, but are not limited to: the Company’s ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company’s operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances, except to the extent required by law.

Schedules and Financial Data: All tables and data to follow

STATEMENT OF INCOME AND PERFORMANCE HIGHLIGHT (Unaudited) - Table 1
(Dollars in thousands, except per share amounts)
	Three Months Ended
	March 31,			December 31,			$			%		March 31,			$			%
	2024			2023			Change			Change		2023			Change			Change
Interest income	$	28,463		$	29,624		$	(1,161	)	(3.9	%)	$	27,248		$	1,215		4.5	%
Interest expense		12,655			12,462			193		1.5	%		8,168			4,487		54.9	%
Net interest income		15,808			17,162			(1,354	)	(7.9	%)		19,080			(3,272	)	(17.1	%)
Provision for credit losses		400			-			400		100.0	%		-			400		100.0	%
Net interest income after provision for credit losses		15,408			17,162			(1,754	)	(10.2	%)		19,080			(3,672	)	(19.2	%)
Gain on sale of loans		1,489			838			651		77.7	%		-			1,489		100.0	%
SBA servicing fee income, net		643			690			(47	)	(6.8	%)		654			(11	)	(1.7	%)
Service charges and other income		429			436			(7	)	(1.6	%)		398			31		7.8	%
Noninterest income		2,561			1,964			597		30.4	%		1,052			1,509		143.4	%
Salaries and employee benefits		6,024			5,356			668		12.5	%		6,079			(55	)	(0.9	%)
Occupancy and equipment		1,122			1,128			(6	)	(0.5	%)		1,124			(2	)	(0.2	%)
Marketing expense		402			250			152		60.8	%		374			28		7.5	%
Professional expense		412			360			52		14.4	%		454			(42	)	(9.3	%)
Other expenses		2,084			2,363			(279	)	(11.8	%)		2,244			(160	)	(7.1	%)
Noninterest expense		10,044			9,457			587		6.2	%		10,275			(231	)	(2.2	%)
Income before income tax provision		7,925			9,669			(1,744	)	(18.0	%)		9,857			(1,932	)	(19.6	%)
Income tax provision		2,253			2,670			(417	)	(15.6	%)		2,767			(514	)	(18.6	%)
Net income	$	5,672		$	6,999		$	(1,327	)	(19.0	%)	$	7,090		$	(1,418	)	(20.0	%)
Effective tax rate		28.4	%		27.6	%		0.8	%	3.0	%		28.1	%		0.4	%	1.3	%
Outstanding number of shares		10,588,136			10,588,136			-		-			10,588,136			-		-
Weighted average shares for basic EPS		10,588,136			10,588,136			-		-			10,576,191			11,945		0.1	%
Weighted average shares for diluted EPS		10,588,688			10,588,937			(249	)	(0.0	%)		10,600,189			(11,501	)	(0.1	%)
Basic EPS	$	0.54		$	0.66		$	(0.12	)	(18.2	%)	$	0.67		$	(0.13	)	(19.4	%)
Diluted EPS	$	0.54		$	0.66		$	(0.12	)	(18.2	%)	$	0.67		$	(0.13	)	(19.4	%)
Return on average assets		1.32	%		1.54	%		(0.22	%)	(14.3	%)		1.59	%		(0.27	%)	(17.0	%)
Return on average equity		9.57	%		11.94	%		(2.37	%)	(19.9	%)		13.45	%		(3.88	%)	(28.9	%)
Efficiency ratio¹		54.68	%		49.45	%		5.23	%	10.6	%		51.04	%		3.64	%	7.1	%
Yield on interest-earning assets²		6.77	%		6.65	%		0.12	%	1.8	%		6.24	%		0.53	%	8.5	%
Cost of funds		3.48	%		3.20	%		0.28	%	8.8	%		2.10	%		1.38	%	65.7	%
Net interest margin²		3.77	%		3.86	%		(0.09	%)	(2.3	%)		4.38	%		(0.61	%)	(13.9	%)

¹	Represents the ratio of noninterest expense less other real estate owned operations to the sum of net interest income before provision for credit losses and total noninterest income.
²	Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

BALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2
(Dollars in thousands)
	March 31,			December 31,			$			%		March 31,			$			%
	2024			2023			Change			Change		2023			Change			Change
ASSETS
Cash and due from banks	$	11,612		$	14,282		$	(2,670	)	(18.7	%)	$	13,788		$	(2,176	)	(15.8	%)
Interest-earning deposits at the FRB and other banks		181,366			233,255			(51,889	)	(22.2	%)		240,602			(59,236	)	(24.6	%)
Investment securities¹		59,143			59,883			(740	)	(1.2	%)		68,943			(9,800	)	(14.2	%)
Loans held-for-sale		198,167			218,258			(20,091	)	(9.2	%)		243,753			(45,586	)	(18.7	%)
Loans held-for-investment		1,194,439			1,204,009			(9,570	)	(0.8	%)		1,222,867			(28,428	)	(2.3	%)
Less: Allowance for credit losses ("ACL")		(16,048	)		(15,291	)		(757	)	(5.0	%)		(15,627	)		(421	)	(2.7	%)
Loans held-for-investment, net		1,178,391			1,188,718			(10,327	)	(0.9	%)		1,207,240			(28,849	)	(2.4	%)
Other real estate owned ("OREO")		-			55			(55	)	-100.0	%		-			-		-
Restricted stock investments		11,011			11,011			-		-			10,121			890		8.8	%
Servicing assets		7,560			7,673			(113	)	(1.5	%)		8,528			(968	)	(11.4	%)
Goodwill		2,185			2,185			-		-			2,185			-		-
Intangible assets		245			255			(10	)	(3.9	%)		291			(46	)	(15.8	%)
Other assets		23,581			24,838			(1,257	)	(5.1	%)		25,697			(2,116	)	(8.2	%)
Total assets	$	1,673,261		$	1,760,413		$	(87,152	)	(5.0	%)	$	1,821,148		$	(147,887	)	(8.1	%)
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing	$	286,766		$	305,923		$	(19,157	)	(6.3	%)	$	428,559		$	(141,793	)	(33.1	%)
Interest-bearing		1,074,198			1,147,662			(73,464	)	(6.4	%)		1,108,754			(34,556	)	(3.1	%)
Total deposits		1,360,964			1,453,585			(92,621	)	(6.4	%)		1,537,313			(176,349	)	(11.5	%)
FHLB advances and other borrowing		50,000			50,000			-		-			50,000			-		-
Other liabilities		21,727			21,114			613		2.9	%		17,651			4,076		23.1	%
Total liabilities		1,432,691			1,524,699			(92,008	)	(6.0	%)		1,604,964			(172,273	)	(10.7	%)
Stockholders' Equity		240,570			235,714			4,856		2.1	%		216,184			24,386		11.3	%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,673,261		$	1,760,413		$	(87,152	)	(5.0	%)	$	1,821,148		$	(147,887	)	(8.1	%)
CAPITAL RATIOS
Leverage ratio
Company		13.85	%		12.98	%		0.88	%	6.8	%		11.86	%		1.99	%	16.8	%
Bank		13.84	%		12.96	%		0.88	%	6.8	%		11.82	%		2.02	%	17.1	%
Common equity tier 1 risk-based capital ratio
Company		18.67	%		18.08	%		0.60	%	3.3	%		16.15	%		2.52	%	15.6	%
Bank		18.65	%		18.05	%		0.61	%	3.4	%		16.10	%		2.56	%	15.9	%
Tier 1 risk-based capital ratio
Company		18.67	%		18.08	%		0.60	%	3.3	%		16.15	%		2.52	%	15.6	%
Bank		18.65	%		18.05	%		0.61	%	3.4	%		16.10	%		2.56	%	15.9	%
Total risk-based capital ratio
Company		19.92	%		19.30	%		0.63	%	3.2	%		17.37	%		2.56	%	14.7	%
Bank		19.91	%		19.27	%		0.63	%	3.3	%		17.31	%		2.59	%	15.0	%
Tangible book value per share	$	22.49		$	22.03		$	0.46		2.1	%	$	20.18		$	2.31		11.5	%
Loans Held for Investments-to-Deposit ("LHFITD") ratio		87.76	%		82.83	%		4.93	%	6.0	%		79.55	%		8.21	%	10.3	%
Net Loan-to-Deposit ("LTD") ratio		101.15	%		96.79	%		4.36	%	4.5	%		94.39	%		6.76	%	7.2	%
Nonperforming assets	$	4,447		$	2,484		$	1,963		79.0	%	$	636		$	3,811		599.2	%
Nonperforming assets as a % of loans held-for-investment		0.37	%		0.21	%		0.16	%	76.2	%		0.05	%		0.32	%	640.0	%
ACL as a % of loans held-for-investment		1.34	%		1.27	%		0.07	%	5.51	%		1.28	%		0.06	%	4.7	%

¹	Includes AFS and HTM

FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3
(Dollars in thousands, except per share amounts)
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Interest income	$	28,463		$	29,624		$	29,450		$	28,664		$	27,248
Interest expense		12,655			12,462			11,442			9,930			8,168
Net interest income		15,808			17,162			18,008			18,734			19,080
Provision for credit losses		400			-			-			-			-
Net interest income after provision for credit losses		15,408			17,162			18,008			18,734			19,080
Gain on sale of loans		1,489			838			419			1,952			-
SBA servicing fee income, net		643			690			639			440			654
Service charges and other income		429			436			402			407			398
Noninterest income		2,561			1,964			1,460			2,799			1,052
Salaries and employee benefits		6,024			5,356			5,569			5,581			6,079
Occupancy and equipment		1,122			1,128			1,103			1,122			1,124
Marketing expense		402			250			475			409			374
Professional expense		412			360			443			436			454
Other expenses		2,084			2,363			2,579			2,635			2,244
Noninterest expense		10,044			9,457			10,169			10,183			10,275
Income before income tax expense		7,925			9,669			9,299			11,350			9,857
Income tax expense		2,253			2,670			2,630			3,248			2,767
Net income	$	5,672		$	6,999		$	6,669		$	8,102		$	7,090
Effective tax rate		28.4	%		27.6	%		28.3	%		28.6	%		28.1	%
Outstanding number of shares		10,588,136			10,588,136			10,588,136			10,588,136			10,588,136
Weighted average shares for basic EPS		10,588,136			10,588,136			10,588,136			10,588,136			10,576,191
Weighted average shares for diluted EPS		10,588,688			10,588,937			10,594,155			10,591,351			10,600,189
Basic EPS	$	0.54		$	0.66		$	0.63		$	0.77		$	0.67
Diluted EPS	$	0.54		$	0.66		$	0.63		$	0.76		$	0.67

FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4
(Dollars in thousands)
	At or for the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Salaries and benefits	$	6,024		$	5,356		$	5,569		$	5,581		$	6,079
FTE at the end of period		168			169			172			165			170
Average FTE during the period		169			169			168			164			174
Salaries and benefits/average FTE¹	$	143		$	126		$	131		$	137		$	142
Salaries and benefits/average assets¹		1.41	%		1.18	%		1.22	%		1.23	%		1.36	%
Noninterest expense/average assets¹		2.35	%		2.08	%		2.22	%		2.25	%		2.30	%

¹	Annualized

FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5
(Dollars in thousands)
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
ASSETS
Cash and due from banks	$	11,612		$	14,282		$	11,188		$	12,704		$	13,788
Interest-earning deposits at the FRB and other banks		181,366			233,255			335,016			293,394			240,602
Investment securities		59,143			59,883			61,617			66,400			68,943
Loans held-for-sale		198,167			218,258			219,355			215,083			243,753
Loans held-for-investment		1,194,439			1,204,009			1,201,230			1,201,237			1,222,867
Less: Allowance for credit losses		(16,048	)		(15,291	)		(15,284	)		(15,626	)		(15,627	)
Loans held-for-investment, net		1,178,391			1,188,718			1,185,946			1,185,611			1,207,240
Other real estate owned		-			55			55			-			-
Restricted stock investments		11,011			11,011			11,011			11,011			10,121
Servicing assets		7,560			7,673			7,873			8,426			8,528
Goodwill		2,185			2,185			2,185			2,185			2,185
Intangible assets		245			255			267			279			291
Other assets		23,581			24,838			24,799			24,537			25,697
Total assets	$	1,673,261		$	1,760,413		$	1,859,312		$	1,819,630		$	1,821,148
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing	$	286,766		$	305,923		$	406,033		$	426,333		$	428,559
Interest-bearing		1,074,198			1,147,662			1,143,257			1,096,078			1,108,754
Total deposits		1,360,964			1,453,585			1,549,290			1,522,411			1,537,313
FHLB advances		50,000			50,000			50,000			50,000			50,000
Other liabilities		21,727			21,114			31,141			23,956			17,651
Total liabilities		1,432,691			1,524,699			1,630,431			1,596,367			1,604,964
Stockholders' Equity		240,570			235,714			228,881			223,263			216,184
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,673,261		$	1,760,413		$	1,859,312		$	1,819,630		$	1,821,148

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6
(Dollars in thousands)
	March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
	Balance		%		Balance		%		Balance		%		Balance		%		Balance		%
Construction	$	37,216	3.1	%	$	34,886	2.9	%	$	30,924	2.6	%	$	20,106	1.7	%	$	19,550	1.6	%
Commercial real estate		1,005,765	84.2	%		1,010,495	83.9	%		1,005,735	83.7	%		1,014,785	84.5	%		1,033,124	84.5	%
Commercial and industrial		101,784	8.5	%		108,123	9.0	%		113,374	9.4	%		114,106	9.4	%		114,184	9.3	%
Home mortgage		44,389	3.7	%		44,920	3.7	%		45,452	3.8	%		45,987	3.8	%		49,155	4.0	%
Consumer		668	0.1	%		630	0.1	%		616	0.1	%		1,074	0.1	%		1,049	0.1	%
Gross loans held-for-investment		1,189,822	99.6	%		1,199,054	99.6	%		1,196,101	99.6	%		1,196,058	99.6	%		1,217,062	99.5	%
Deferred loan fees/costs, net		4,617	0.4	%		4,955	0.4	%		5,129	0.4	%		5,179	0.4	%		5,805	0.5	%
Loans held-for-investment	$	1,194,439	100.0	%	$	1,204,009	100.0	%	$	1,201,230	100.0	%	$	1,201,237	100.0	%	$	1,222,867	100.0	%
Loans held-for-sale	$	198,167			$	218,258			$	219,355			$	215,083			$	243,753
Total loans receivable	$	1,392,606			$	1,422,267			$	1,420,585			$	1,416,320			$	1,466,620

FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7
(Dollars in thousands)
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
SBA loans held-for-sale at beginning of the quarter/year	$	218,258		$	219,355		$	215,083		$	243,753		$	230,431
SBA loans originated/transferred from/to held-for-investment during the quarter/year		14,589			27,022			16,260			18,273			16,890
SBA loans sold during the quarter/year		(28,164	)		(21,749	)		(9,245	)		(42,437	)		-
SBA loans principal paydown/payoff, net of advance		(6,516	)		(6,370	)		(2,743	)		(4,506	)		(3,568	)
SBA loans held-for-sale at end of the quarter/year	$	198,167		$	218,258		$	219,355		$	215,083		$	243,753
Gain on sale of SBA loans	$	1,489		$	838		$	419		$	1,952		$	-
Premium on sale (weighted average)		8.4	%		6.7	%		6.8	%		-			-
SBA loan production	$	18,089		$	37,821		$	24,270		$	24,013		$	21,719

FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8
(Dollars in thousands)
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
SBA servicing assets @ beginning of the quarter/year	$	7,673		$	7,873		$	8,426		$	8,528		$	9,232
Newly added SBA servicing assets from SBA loans sold		555			430			182			806			-
Regular quarterly/annual servicing assets amortization		(332	)		(356	)		(371	)		(379	)		(403	)
SBA servicing assets amortized from SBA loans paid off/charged off		(336	)		(274	)		(364	)		(529	)		(301	)
Subtotal before impairment		7,560			7,673			7,873			8,426			8,528
Reversal of valuation allowance on servicing assets		-			-			-			-			-
SBA servicing assets @ the end of the quarter/year	$	7,560		$	7,673		$	7,873		$	8,426		$	8,528

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9
(Dollars in thousands)
	March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
	Balance		%		Balance		%		Balance		%		Balance		%		Balance		%
Noninterest-bearing demand	$	286,766	21.1	%	$	305,923	21.1	%	$	406,033	26.2	%	$	426,333	28.0	%	$	428,559	27.9	%
Interest-bearing demand		6,709	0.5	%		7,504	0.5	%		6,395	0.4	%		9,056	0.6	%		10,883	0.7	%
NOW & MMDA		229,642	16.9	%		237,548	16.3	%		227,283	14.7	%		210,429	13.8	%		211,793	13.8	%
Savings		84,999	6.2	%		88,689	6.1	%		78,969	5.1	%		62,324	4.1	%		62,188	4.0	%
TCDs of $250K and under		299,944	22.0	%		315,920	21.7	%		312,704	20.2	%		298,520	19.6	%		294,074	19.1	%
TCDs of $250K over		339,482	25.0	%		353,866	24.4	%		373,345	24.1	%		368,262	24.2	%		367,167	23.9	%
Wholesale TCDs		113,422	8.3	%		144,135	9.9	%		144,561	9.3	%		147,487	9.7	%		162,649	10.6	%
Total Deposits	$	1,360,964	100.0	%	$	1,453,585	100.0	%	$	1,549,290	100.0	%	$	1,522,411	100.0	%	$	1,537,313	100.0	%
Recap:
Noninterest-bearing demand	$	286,766	21.1	%	$	305,923	21.0	%	$	406,033	26.2	%	$	426,333	28.0	%	$	428,559	27.9	%
Interest-bearing demand		6,709	0.5	%		7,504	0.5	%		6,395	0.4	%		9,056	0.6	%		10,883	0.7	%
NOW & MMDA		229,642	16.9	%		237,548	16.3	%		227,283	14.7	%		210,429	13.8	%		211,793	13.8	%
Savings		84,999	6.2	%		88,689	6.1	%		78,969	5.1	%		62,324	4.1	%		62,188	4.0	%
TCDs of $250K and under		299,944	22.0	%		315,920	21.7	%		312,704	20.2	%		298,520	19.6	%		294,074	19.1	%
Core Deposits		908,060	66.7	%		955,584	65.7	%		1,031,384	66.6	%		1,006,662	66.1	%		1,007,497	65.5	%
TCDs of $250K over		339,482	24.9	%		353,866	24.3	%		373,345	24.1	%		368,262	24.2	%		367,167	23.9	%
Wholesale TCDs		113,422	8.3	%		144,135	9.9	%		144,561	9.3	%		147,487	9.7	%		162,649	10.6	%
Noncore Deposits		452,904	33.3	%		498,001	34.3	%		517,906	33.4	%		515,749	33.9	%		529,816	34.5	%
Total Deposits	$	1,360,964	100.0	%	$	1,453,585	100.0	%	$	1,549,290	100.0	%	$	1,522,411	100.0	%	$	1,537,313	100.0	%

FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10
(Dollars in thousands)
	1st Qtr.			4th Qtr.			3rd Qtr.			2nd Qtr.			1st Qtr.
	2024			2023			2023			2023			2023
Allowance for Credit Losses
Balance at beginning of period	$	15,291		$	15,284		$	15,626		$	15,627		$	15,525
CECL transition provision		-			-			-			-			250
Provision for credit losses		743			-			-			-			-
Charge-offs					(2	)		(350	)		(11	)		(159	)
Recoveries		14			9			8			10			11
Balance at the end of period	$	16,048		$	15,291		$	15,284		$	15,626		$	15,627
Nonperforming Assets:¹
Over 90 days still accruing	$	1,605		$	399		$	2		$	39		$	-
Nonaccrual loans		2,842			2,030			616			645			636
Total nonperforming loans		4,447			2,429			618			684			636
Other real estate owned	$	-			55			55			-			-
Total nonperforming assets	$	4,447		$	2,484		$	673		$	684		$	636
Classified Assets:¹
Substandard	$	11,912		$	11,063		$	10,105		$	10,491		$	7,673
Doubtful		-			-			-			-			-
Loss
Total classified loans	$	11,912		$	11,063		$	10,105		$	10,491		$	7,673
Other real estate owned	$	-			55			55			-			-
Total classified assets	$	11,912		$	11,118		$	10,160		$	10,491		$	7,673
Performing TDR loans:¹	$	3,811		$	3,336		$	3,336		$	3,336		$	-
Delinquent Loans:¹
Loans 30-89 days past due	$	16,907		$	5,981		$	10,620		$	4,420		$	3,551
90 days or more past due and still accruing		1,605			399			2			39			-
Nonaccrual		2,842			2,030			616			645			636
Total delinquent loans	$	21,354		$	8,410		$	11,238		$	5,104		$	4,187
Asset Quality Ratios:
Net (recoveries) charge-offs to average loans²		0.00	%		0.00	%		0.10	%		0.00	%		0.04	%
Nonaccrual loans to loans held-for-investment		0.24	%		0.17	%		0.05	%		0.05	%		0.05	%
Nonperforming loans to loans held-for-investment		0.37	%		0.20	%		0.05	%		0.06	%		0.05	%
Nonperforming assets to total assets		0.27	%		0.14	%		0.04	%		0.04	%		0.03	%
Classified loans to loans held-for-investment		1.00	%		0.92	%		0.84	%		0.87	%		0.63	%
Classified loans to Tier 1 and ACL		4.69	%		4.45	%		4.18	%		4.44	%		3.35	%
Classified assets to total assets		0.71	%		0.63	%		0.55	%		0.58	%		0.42	%
Classified assets to Tier 1 and ACL		4.69	%		4.47	%		4.20	%		4.44	%		3.35	%
ACL to loans held-for-investment		1.34	%		1.27	%		1.27	%		1.30	%		1.28	%
ACL to nonaccrual loans		564.67	%		753.25	%		2481.17	%		2422.64	%		2457.08	%
ACL to nonperforming loans		360.87	%		629.52	%		2473.14	%		2284.50	%		2457.08	%
ACL to nonperforming assets		360.87	%		615.58	%		2271.03	%		2284.50	%		2457.08	%
Texas ratio ³		1.75	%		1.00	%		0.28	%		0.29	%		0.28	%

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

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11
	Well Capitalized		Adequately Capitalized		March 31,			December 31,			September 30,			June 30,			March 31,
	Regulatory		BASEL III
	Requirement		Fully Phased In		2024			2023			2023			2023			2023
Leverage ratio
Company	N/A		N/A			13.85	%		12.98	%		12.53	%		12.23	%		11.86	%
Bank	5.00	%	4.00	%		13.84	%		12.96	%		12.50	%		12.20	%		11.82	%
Common equity tier 1 risk-based capital ratio
Company	N/A		N/A			18.67	%		18.08	%		17.61	%		17.08	%		16.15	%
Bank	6.50	%	7.00	%		18.65	%		18.05	%		17.57	%		17.03	%		16.10	%
Tier 1 risk-based capital ratio
Company	N/A		N/A			18.67	%		18.08	%		17.61	%		17.08	%		16.15	%
Bank	8.00	%	8.50	%		18.65	%		18.05	%		17.57	%		17.03	%		16.10	%
Total risk-based capital ratio
Company	N/A		N/A			19.92	%		19.30	%		18.83	%		18.32	%		17.37	%
Bank	10.00	%	10.50	%		19.91	%		19.27	%		18.79	%		18.27	%		17.31	%
Tangible common equity/total assets						14.25	%		13.27	%		12.19	%		12.15	%		11.75	%
Tangible common equity per share					$	22.49		$	22.03		$	21.39		$	20.85		$	20.18

FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12
(Dollars in thousands)
	Three Months Ended
	March 31, 2024							December 31, 2023							September 30, 2023							June 30, 2023							March 31, 2023
	Avg Balance			Interest		Yield		Avg Balance			Interest		Yield		Avg Balance			Interest		Yield		Avg Balance			Interest		Yield		Avg Balance			Interest		Yield
Number of Days in the Period
INTEREST-EARNING ASSETS
Loans Receivable¹	$	1,415,924		$	24,906	7.07	%	$	1,410,971		$	24,926	7.01	%	$	1,417,148		$	24,734	6.92	%	$	1,444,608		$	24,661	6.85	%	$	1,502,078		$	24,379	6.58	%
Investment securities ²		59,554			575	3.88	%		60,094			563	3.72	%		64,587			577	3.54	%		67,958			595	3.51	%		70,146			577	3.34	%
Interest-earning deposits at the FRB and other banks		207,155			2,817	5.47	%		288,769			3,973	5.46	%		293,081			3,994	5.41	%		258,236			3,296	5.12	%		190,692			2,178	4.63	%
Other earning assets		11,011			214	7.82	%		11,011			212	7.64	%		11,011			196	7.06	%		10,825			163	6.04	%		10,121			164	6.57	%
Total interest-earning assets ²		1,693,644			28,512	6.77	%		1,770,845			29,674	6.65	%		1,785,827			29,501	6.55	%		1,781,627			28,715	6.46	%		1,773,037			27,298	6.24	%
NONINTEREST-EARNING ASSETS
Cash and due from banks		12,172							12,567							13,045							12,792							14,262
Other noninterest-earning assets		31,967							32,985							33,331							34,060							36,643
Total noninterest-earning assets		44,139							45,552							46,376							46,852							50,905
Less: Allowance for credit losses		(15,322	)						(15,291	)						(15,622	)						(15,627	)						(15,552	)
TOTAL ASSETS	$	1,722,461						$	1,801,106						$	1,816,581						$	1,812,852						$	1,808,390
INTEREST-BEARING DEPOSITS
Interest-bearing demand	$	12,680		$	6	0.19	%	$	12,657		$	7	0.22	%	$	12,347		$	6	0.19	%	$	14,522		$	7	0.19	%	$	18,021		$	9	0.20	%
Money market		229,441			2,285	4.01	%		222,289			2,158	3.85	%		211,152			1,907	3.58	%		192,872			1,414	2.94	%		231,865			1,469	2.57	%
Savings		84,854			724	3.43	%		82,403			664	3.20	%		70,579			494	2.78	%		63,786			324	2.04	%		55,576			164	1.20	%
Time deposits		801,122			9,523	4.78	%		824,900			9,515	4.58	%		820,335			8,916	4.31	%		839,198			8,068	3.86	%		797,072			6,410	3.26	%
Total interest-bearing deposits		1,128,097			12,538	4.47	%		1,142,249			12,344	4.29	%		1,114,413			11,323	4.03	%		1,110,378			9,813	3.54	%		1,102,534			8,052	2.96	%
Borrowings		50,000			117	0.94	%		50,001			118	0.94	%		50,001			119	0.94	%		50,000			117	0.94	%		50,000			116	0.94	%
Total interest-bearing liabilities		1,178,097			12,655	4.32	%		1,192,250			12,462	4.15	%		1,164,414			11,442	3.90	%		1,160,378			9,930	3.43	%		1,152,534			8,168	2.87	%
Noninterest-bearing deposits		284,867							350,656							397,791							411,432							425,190
Other liabilities		21,112							25,602							27,519							20,934							16,947
Stockholders' equity		238,385							232,598							226,857							220,108							213,719
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,722,461						$	1,801,106						$	1,816,581						$	1,812,852						$	1,808,390
Net interest income²				$	15,857						$	17,212						$	18,059						$	18,785						$	19,130
Net interest spread						2.45	%						2.50	%						2.65	%						3.03	%						3.37	%
Effect of noninterest-bearing sources						1.32	%						1.36	%						1.36	%						1.20	%						1.01	%
Net interest margin²						3.77	%						3.86	%						4.01	%						4.23	%						4.38	%
Cost of deposits	$	1,412,964		$	12,538	3.57	%	$	1,492,905		$	12,344	3.28	%	$	1,512,204		$	11,323	2.97	%	$	1,521,810		$	9,813	2.59	%	$	1,527,724		$	8,052	2.14	%
Cost of funds	$	1,462,964		$	12,655	3.48	%	$	1,542,906		$	12,462	3.20	%	$	1,562,205		$	11,442	2.91	%	$	1,571,810		$	9,930	2.53	%	$	1,577,724		$	8,168	2.10	%

FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13
(Dollars in thousands)
	Three Months Ended
	March 31, 2024					December 31, 2023					September 30, 2023					June 30, 2023					March 31, 2023
	Amount			Yield		Amount			Yield		Amount			Yield		Amount			Yield		Amount			Yield
Contractual yield	$	24,138		6.86	%	$	24,235		6.81	%	$	23,932		6.70	%	$	23,767		6.60	%	$	23,643		6.38	%
SBA discount accretion		926		0.26	%		845		0.24	%		921		0.25	%		1,124		0.31	%		937		0.25	%
Prepayment penalties and late fees		67		0.01	%		40		0.01	%		18		0.01	%		60		0.02	%		30		0.01	%
Amortization of net deferred costs		(225	)	-0.06	%		(194	)	-0.05	%		(137	)	-0.04	%		(290	)	-0.08	%		(231	)	-0.06	%
As reported yield on loans	$	24,906		7.07	%	$	24,926		7.01	%	$	24,734		6.92	%	$	24,661		6.85	%	$	24,379		6.58	%