Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries CBB Bancorp, Inc. Reports Second Quarter 2024 Financial Results By: CBB Bancorp, Inc. via Business Wire July 26, 2024 at 09:00 AM EDT 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 $5.5 million for the second quarter 2024, or $0.51 per diluted share compared to $5.7 million in the first quarter 2024, or $0.54 per diluted share. OVERALL RESULTS Net income for the second quarter 2024 decreased from the first quarter primarily due to lower net interest income and gain on sale of loans, offset by a lower provision for credit losses and noninterest expenses. The return on average assets for the second quarter 2024 was 1.31% compared to 1.32% for the first quarter 2024 and 1.79% for the second quarter 2023. The return on average equity for the second quarter 2024 was 9.06% compared to 9.57% for the first quarter 2024 and 14.76% for the second quarter 2023. The efficiency ratio for the second quarter 2024 was 55.69% compared to 54.68% for the first quarter 2024 and 47.29% for the second quarter 2023. James Hong, President and CEO, commented, "Amidst the dynamic economic environment, we are charting a course through a landscape of changes exploring new opportunities. While the rise in interest rates presents its own set of challenges, it also opens up avenues for growth. Our loan portfolios, funding costs, net interest margins, and overall revenue are being reshaped in this process. Embracing these changes, we have turned to technology as our ally. We have seen a robust increase in the adoption of online account openings, internet banking, and mobile banking among our existing and new customers. This is a testament to our resilience and adaptability in the face of adversity." INCOME STATEMENT Net Interest Income Net interest income for the second quarter 2024 was $15.4 million, a decrease of $444 thousand, or 2.8%, quarter over quarter, and a decrease of $3.4 million, or 18.0% compared to the second quarter 2023. Net interest income for the six months ended June 30, 2024 was $31.2 million, a decrease of $6.6 million or 17.6% compared to the same period last year. The decrease in net interest income was due to the higher cost of interest-bearing deposits as maturing time deposits were rolled over into higher interest rate CDs. Net Interest Margin The net interest margin for both the second and first quarters 2024 was 3.77% and 4.23% for the second quarter 2023. The decrease in the net interest margin compared to the same quarter 2023 was due to higher cost of funds. The cost of funds for the second quarter 2024 increased four basis points to 3.52% compared to 3.48% in the previous quarter and 2.53% in the second quarter 2023. Provision for Credit Losses Provision for credit losses was $200 thousand for the second quarter 2024 compared to $400 thousand in the first quarter 2024. No provision for credit losses was recorded in the second quarter 2023. Noninterest Income Noninterest income for the second quarter 2024 was $2.3 million, a decrease of $226 thousand compared to $2.6 million for the first quarter 2024, and a decrease of $464 thousand compared to $2.8 million for the second quarter 2023. The decrease in noninterest income was primarily the result of lower gain on sale of loans offset by higher SBA servicing fee income. Noninterest income for the six months ended June 30, 2024 was $4.9 million, an increase of $1.0 million compared to the same period last year. The increase was primarily the result of higher gain on sale of loans and SBA servicing fee income. Noninterest Expenses Noninterest expenses for the second quarter 2024 were $9.9 million compared to $10.0 million for the first quarter 2024 and $10.2 million for the second quarter 2023. Noninterest expenses decreased $188 thousand and $327 thousand compared to the first quarter 2024 and the second quarter 2023, respectively. Please refer to financial tables in this press release for additional information and trends. Income Taxes The Company’s effective tax rate for the second quarter 2024 was 28.3% compared to 28.4% for first quarter 2024 and 28.6% for second quarter 2023. BALANCE SHEET Investment Securities Investment securities were $73.1 million at June 30, 2024, an increase of $13.9 million or 23.5% from March 31, 2024, and an increase of $6.7 million or 10.0% from June 30, 2023. 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 June 30, 2024, was $1.44 billion, an increase of $45.0 million or 3.2% from March 31, 2024, and an increase of $21.3 million or 1.5% from June 30, 2023. Allowance for Credit Losses and Asset Quality The Allowance for Credit Losses (“ACL”) at June 30, 2024, was $16.0 million which was 1.31% of loans held-for-investment compared to $16.0 million at March 31, 2024, or 1.34% of loans held-for-investment. At June 30, 2023, ACL was $15.6 million or 1.30% of total loans held-for-investment. Total Nonperforming assets at June 30, 2024, were $5.8 million compared to $4.4 million at March 31, 2024 and $0.7 million at June 30, 2023. The ACL coverage to nonperforming assets was over 276% at June 30, 2024. SBA Loans Held-for-Sale Total SBA loans held-for-sale at June 30, 2024, was $209.1 million compared to $ 198.2 million March 31, 2024, and $215.1 million at June 30, 2023. We continue to assess the SBA loan market premium and plan to sell loans when it is advantageous to do so. The Bank sold approximately $19.5 million in SBA loans with an average premium of 8.3% during the second quarter of 2024 compared to the sale of $28.2 million with an average premium of 8.4% in the first quarter of 2024. The Bank sold approximately $42.4 million of SBA loans with an average premium of 6.8% during the second quarter 2023. Deposits Total deposits were $1.34 billion at June 30, 2024, down $20.6 million or 1.5% from March 31, 2024, and down $182.0 million or 12.0% from June 30, 2023. DDAs were 21.6% of total deposits for both June 30, 2024 and March 31, 2024, and 28.6% at June 30, 2023. NOW and MMDA deposits comprised 18.0% of total deposits at June 30, 2024, compared to 16.9% at March 31, 2024, and 13.8% at June 30, 2023. The quarter-over-quarter and year-over-year decline in DDA 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 in Federal Home Loan Bank advances since April 16, 2020. The blended cost of FHLB advances was 0.94% as of June 30, 2024. Capital Stockholders’ equity was $245.3 million at June 30, 2024, which increased $4.7 million or 1.9%, quarter over quarter. Tangible book value per share at June 30, 2024, was $22.94, an increase of $0.45, or 2.0%, quarter over quarter. Each of the Company’s and the Bank’s regulatory capital ratios decreased, except for the leverage ratio at June 30, 2024, compared to March 31, 2024, and increased compared to June 30, 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 Risk-Based Capital Ratios at June 30, 2024, were 18.36% and 18.28% for the Company and the Bank, respectively. Total Risk-Based Capital Ratios were 19.59% and 19.50% 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 June 30, 2024, the Bank had eleven full-service banking offices in Los Angeles and Orange Counties in California, Dallas County in Texas and Honolulu, Hawaii; two SBA regional offices in Los Angeles and Dallas Counties; and loan production offices in Georgia and Washington. For additional information, please go to www.cbb-bank.com under the tab “About Us” and select “Investor Relations” to see the 2Q 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 Six Months Ended June 30, March 31, $ % June 30, $ % June 30, June 30, $ % 2024 2024 Change Change 2023 Change Change 2024 2023 Change Change Interest income $ 27,755 $ 28,463 $ (708 ) (2.5 %) $ 28,664 $ (909 ) (3.2 %) $ 56,218 $ 55,912 $ 306 0.5 % Interest expense 12,391 12,655 (264 ) (2.1 %) 9,930 2,461 24.8 % 25,046 18,098 6,948 38.4 % Net interest income 15,364 15,808 (444 ) (2.8 %) 18,734 (3,370 ) (18.0 %) 31,172 37,814 (6,642 ) (17.6 %) Provision for credit losses 200 400 (200 ) (50.0 %) - 200 100.0 % 600 - 600 100.0 % Net interest income after provision for credit losses 15,164 15,408 (244 ) (1.6 %) 18,734 (3,570 ) (19.1 %) 30,572 37,814 (7,242 ) (19.2 %) Gain on sale of loans 1,064 1,489 (425 ) -28.5 % 1,952 (888 ) 319.8 % 2,553 1,952 601 30.8 % Gain (loss) on sale of OREO - (1 ) 1 (100.0 %) - - - (1 ) - (1 ) (100.0 %) SBA servicing fee income, net 768 633 135 21.3 % 440 328 74.5 % 1,401 1,094 307 28.1 % Recovery on impaired servicing liability - 10 (10 ) (100.0 %) - - - 10 - 10 100.0 % Service charges and other income 503 430 73 17.0 % 407 96 23.6 % 933 805 128 15.9 % Noninterest income 2,335 2,561 (226 ) (8.8 %) 2,799 (464 ) (16.6 %) 4,896 3,851 1,045 27.1 % Salaries and employee benefits 5,927 6,024 (97 ) (1.6 %) 5,581 346 6.2 % 11,951 11,660 291 2.5 % Occupancy and equipment 1,114 1,122 (8 ) (0.7 %) 1,122 (8 ) (0.7 %) 2,236 2,246 (10 ) (0.4 %) Marketing expense 403 402 1 0.2 % 409 (6 ) (1.5 %) 805 783 22 2.8 % Professional expense 440 412 28 6.8 % 436 4 0.9 % 852 890 (38 ) (4.3 %) Other expenses 1,972 2,084 (112 ) (5.4 %) 2,635 (663 ) (25.2 %) 4,056 4,879 (823 ) (16.9 %) Noninterest expense 9,856 10,044 (188 ) (1.9 %) 10,183 (327 ) (3.2 %) 19,900 20,458 (558 ) (2.7 %) Income before income tax provision 7,643 7,925 (282 ) (3.6 %) 11,350 (3,707 ) (32.7 %) 15,568 21,207 (5,639 ) (26.6 %) Income tax provision 2,163 2,253 (90 ) (4.0 %) 3,248 (1,085 ) (33.4 %) 4,416 6,015 (1,599 ) (26.6 %) Net income $ 5,480 $ 5,672 $ (192 ) (3.4 %) $ 8,102 $ (2,622 ) (32.4 %) $ 11,152 $ 15,192 $ (4,040 ) (26.6 %) Effective tax rate 28.3 % 28.4 % (0.1 %) (0.5 %) 28.6 % (0.3 %) (1.1 %) 28.4 % 28.4 % 0.00 % 0.0 % 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 10,582,197 5,939 0.1 % Weighted average shares for diluted EPS 10,588,136 10,588,688 (552 ) (0.0 %) 10,591,350 (3,214 ) (0.0 %) 10,558,688 10,595,803 (37,115 ) (0.4 %) Basic EPS $ 0.51 $ 0.54 $ (0.03 ) (5.6 %) $ 0.77 $ (0.26 ) (33.8 %) $ 1.05 $ 1.44 $ (0.39 ) -27.1 % Diluted EPS $ 0.51 $ 0.54 $ (0.03 ) (5.6 %) $ 0.76 $ (0.25 ) (32.9 %) $ 1.05 $ 1.43 $ (0.38 ) (26.6 %) Return on average assets 1.31 % 1.32 % (0.01 %) (0.8 %) 1.79 % (0.48 %) (26.8 %) 1.32 % 1.69 % (0.37 %) (21.9 %) Return on average equity 9.06 % 9.57 % (0.51 %) (5.3 %) 14.76 % (5.70 %) (38.6 %) 9.31 % 14.12 % (4.81 %) (34.1 %) Efficiency ratio¹ 55.69 % 54.68 % 1.01 % 1.9 % 47.29 % 8.40 % 17.8 % 55.17 % 49.10 % 6.07 % 12.4 % Yield on interest-earning assets² 6.79 % 6.77 % 0.02 % 0.3 % 6.46 % 0.33 % 5.1 % 6.78 % 6.36 % 0.42 % 6.6 % Cost of funds 3.52 % 3.48 % 0.04 % 1.2 % 2.53 % 0.99 % 39.1 % 3.50 % 2.32 % 1.18 % 50.9 % Net interest margin² 3.77 % 3.77 % 0.00 % 0.0 % 4.23 % (0.46 %) (10.9 %) 3.77 % 4.30 % (0.53 %) (12.3 %) 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) June 30, March 31, $ % June 30, $ % 2024 2024 Change Change 2023 Change Change ASSETS Cash and due from banks $ 11,667 $ 11,612 $ 55 0.5 % $ 12,704 $ (1,037 ) (8.2 %) Interest-earning deposits at the FRB and other banks 101,415 181,366 (79,951 ) (44.1 %) 293,394 (191,979 ) (65.4 %) Investment securities¹ 73,051 59,143 13,908 23.5 % 66,400 6,651 10.0 % Loans held-for-sale 209,144 198,167 10,977 5.5 % 215,083 (5,939 ) (2.8 %) Loans held-for-investment 1,228,496 1,194,439 34,057 2.9 % 1,201,237 27,259 2.3 % Less: Allowance for credit losses ("ACL") (16,042 ) (16,048 ) 6 0.0 % (15,626 ) (416 ) (2.7 %) Loans held-for-investment, net 1,212,454 1,178,391 34,063 2.9 % 1,185,611 26,843 2.3 % Other real estate owned ("OREO") - - - - - - - Restricted stock investments 11,011 11,011 - - 11,011 - - Servicing assets 7,404 7,560 (156 ) (2.1 %) 8,426 (1,022 ) (12.1 %) Goodwill 2,185 2,185 - - 2,185 - - Intangible assets 235 245 (10 ) (4.1 %) 279 (44 ) (15.8 %) Other assets 26,343 23,581 2,762 11.7 % 24,537 1,806 7.4 % Total assets $ 1,654,909 $ 1,673,261 $ (18,352 ) (1.1 %) $ 1,819,630 $ (164,721 ) (9.1 %) LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing $ 281,243 $ 286,766 $ (5,523 ) (1.9 %) $ 426,333 $ (145,090 ) (34.0 %) Interest-bearing 1,059,146 1,074,198 (15,052 ) (1.4 %) 1,096,078 (36,932 ) (3.4 %) Total deposits 1,340,389 1,360,964 (20,575 ) (1.5 %) 1,522,411 (182,022 ) (12.0 %) FHLB advances and other borrowing 50,000 50,000 - - 50,000 - - Other liabilities 19,260 21,727 (2,467 ) (11.4 %) 23,956 (4,696 ) (19.6 %) Total liabilities 1,409,649 1,432,691 (23,042 ) (1.6 %) 1,596,367 (186,718 ) (11.7 %) Stockholders' Equity 245,260 240,570 4,690 1.9 % 223,263 21,997 9.9 % TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,654,909 $ 1,673,261 $ (18,352 ) (1.1 %) $ 1,819,630 $ (164,721 ) (9.1 %) CAPITAL RATIOS Leverage ratio Company 14.51 % 13.85 % 0.66 % 4.8 % 12.23 % 2.28 % 18.7 % Bank 14.45 % 13.84 % 0.61 % 4.4 % 12.20 % 2.25 % 18.5 % Common equity tier 1 risk-based capital ratio Company 18.36 % 18.67 % (0.31 %) (1.7 %) 17.08 % 1.28 % 7.5 % Bank 18.28 % 18.65 % (0.38 %) (2.0 %) 17.03 % 1.25 % 7.3 % Tier 1 risk-based capital ratio Company 18.36 % 18.67 % (0.31 %) (1.7 %) 17.08 % 1.28 % 7.5 % Bank 18.28 % 18.65 % (0.38 %) (2.0 %) 17.03 % 1.25 % 7.3 % Total risk-based capital ratio Company 19.59 % 19.92 % (0.34 %) (1.7 %) 18.32 % 1.27 % 6.9 % Bank 19.50 % 19.91 % (0.40 %) (2.0 %) 18.27 % 1.23 % 6.7 % Tangible book value per share $ 22.94 $ 22.49 $ 0.45 2.0 % $ 20.85 $ 2.09 10.0 % Loans Held for Investments-to-Deposit ("LHFITD") ratio 91.65 % 87.76 % 3.89 % 4.4 % 78.90 % 12.75 % 16.2 % Net Loan-to-Deposit ("LTD") ratio 106.06 % 101.15 % 4.91 % 4.9 % 92.00 % 14.06 % 15.3 % Nonperforming assets $ 5,797 $ 4,447 $ 1,350 30.4 % $ 684 $ 5,113 747.5 % Nonperforming assets as a % of loans held-for-investment 0.47 % 0.37 % 0.10 % 27.0 % 0.06 % 0.41 % 683.3 % ACL as a % of loans held-for-investment 1.31 % 1.34 % (0.03 %) (2.24 %) 1.30 % 0.01 % 0.8 % ¹ Includes AFS and HTM FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3 (Dollars in thousands, except per share amounts) Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Interest income $ 27,755 $ 28,463 $ 29,624 $ 29,450 $ 28,664 Interest expense 12,391 12,655 12,462 11,442 9,930 Net interest income 15,364 15,808 17,162 18,008 18,734 Provision for credit losses 200 400 - - - Net interest income after provision for credit losses 15,164 15,408 17,162 18,008 18,734 Gain on sale of loans 1,064 1,489 838 419 1,952 Gain (loss) on sale of OREO - (1 ) - - - SBA servicing fee income, net 768 643 690 639 440 Service charges and other income 503 430 436 402 407 Noninterest income 2,335 2,561 1,964 1,460 2,799 Salaries and employee benefits 5,927 6,024 5,356 5,569 5,581 Occupancy and equipment 1,114 1,122 1,128 1,103 1,122 Marketing expense 403 402 250 475 409 Professional expense 440 412 360 443 436 Other expenses 1,972 2,084 2,363 2,579 2,635 Noninterest expense 9,856 10,044 9,457 10,169 10,183 Income before income tax expense 7,643 7,925 9,669 9,299 11,350 Income tax expense 2,163 2,253 2,670 2,630 3,248 Net income $ 5,480 $ 5,672 $ 6,999 $ 6,669 $ 8,102 Effective tax rate 28.3 % 28.4 % 27.6 % 28.3 % 28.6 % Outstanding number of shares 10,588,136 10,588,136 10,588,136 10,588,136 10,588,136 Weighted average shares for basic EPS 10,588,136 10,588,136 10,588,136 10,588,136 10,588,136 Weighted average shares for diluted EPS 10,588,136 10,588,688 10,588,937 10,594,155 10,591,351 Basic EPS $ 0.51 $ 0.54 $ 0.66 $ 0.63 $ 0.77 Diluted EPS $ 0.51 $ 0.54 $ 0.66 $ 0.63 $ 0.76 FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4 (Dollars in thousands) At or for the Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2023 2023 2023 2023 Salaries and benefits $ 5,927 $ 6,024 $ 5,356 $ 5,569 $ 5,581 FTE at the end of period 172 168 169 172 165 Average FTE during the period 171 169 169 168 164 Salaries and benefits/average FTE¹ $ 139 $ 143 $ 126 $ 131 $ 137 Salaries and benefits/average assets¹ 1.42 % 1.41 % 1.18 % 1.22 % 1.23 % Noninterest expense/average assets¹ 2.36 % 2.35 % 2.08 % 2.22 % 2.25 % 1 Annualized FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5 (Dollars in thousands) June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 ASSETS Cash and due from banks $ 11,667 $ 11,612 $ 14,282 $ 11,188 $ 12,704 Interest-earning deposits at the FRB and other banks 101,415 181,366 233,255 335,016 293,394 Investment securities 73,051 59,143 59,883 61,617 66,400 Loans held-for-sale 209,144 198,167 218,258 219,355 215,083 Loans held-for-investment 1,228,496 1,194,439 1,204,009 1,201,230 1,201,237 Less: Allowance for credit losses (16,042 ) (16,048 ) (15,291 ) (15,284 ) (15,626 ) Loans held-for-investment, net 1,212,454 1,178,391 1,188,718 1,185,946 1,185,611 Other real estate owned - - 55 55 - Restricted stock investments 11,011 11,011 11,011 11,011 11,011 Servicing assets 7,404 7,560 7,673 7,873 8,426 Goodwill 2,185 2,185 2,185 2,185 2,185 Intangible assets 235 245 255 267 279 Other assets 26,343 23,581 24,838 24,799 24,537 Total assets $ 1,654,909 $ 1,673,261 $ 1,760,413 $ 1,859,312 $ 1,819,630 LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing $ 281,243 $ 286,766 $ 305,923 $ 406,033 $ 426,333 Interest-bearing 1,059,146 1,074,198 1,147,662 1,143,257 1,096,078 Total deposits 1,340,389 1,360,964 1,453,585 1,549,290 1,522,411 FHLB advances 50,000 50,000 50,000 50,000 50,000 Other liabilities 19,260 21,727 21,114 31,141 23,956 Total liabilities 1,409,649 1,432,691 1,524,699 1,630,431 1,596,367 Stockholders' Equity 245,260 240,570 235,714 228,881 223,263 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,654,909 $ 1,673,261 $ 1,760,413 $ 1,859,312 $ 1,819,630 FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6 (Dollars in thousands) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Balance % Balance % Balance % Balance % Balance % Construction $ 33,918 2.8 % $ 37,216 3.1 % $ 34,886 2.9 % $ 30,924 2.6 % $ 20,106 1.7 % Commercial real estate 1,035,425 84.3 % 1,005,765 84.2 % 1,010,495 83.9 % 1,005,735 83.7 % 1,014,785 84.5 % Commercial and industrial 108,742 8.9 % 101,784 8.5 % 108,123 9.0 % 113,374 9.4 % 114,106 9.4 % Home mortgage 44,987 3.7 % 44,389 3.7 % 44,920 3.7 % 45,452 3.8 % 45,987 3.8 % Consumer 782 0.1 % 668 0.1 % 630 0.1 % 616 0.1 % 1,074 0.1 % Gross loans held-for-investment 1,223,854 99.6 % 1,189,822 99.6 % 1,199,054 99.6 % 1,196,101 99.6 % 1,196,058 99.6 % Deferred loan fees/costs, net 4,642 0.4 % 4,617 0.4 % 4,955 0.4 % 5,129 0.4 % 5,179 0.4 % Loans held-for-investment $ 1,228,496 100.0 % $ 1,194,439 100.0 % $ 1,204,009 100.0 % $ 1,201,230 100.0 % $ 1,201,237 100.0 % Loans held-for-sale $ 209,144 $ 198,167 $ 218,258 $ 219,355 $ 215,083 Total loans receivable $ 1,437,640 $ 1,392,606 $ 1,422,267 $ 1,420,585 $ 1,416,320 FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7 (Dollars in thousands) Three Months Ended Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2024 2024 2023 2023 2023 2024 2023 SBA loans held-for-sale at beginning of the quarter/year $ 198,167 $ 218,258 $ 219,355 $ 215,083 $ 243,753 $ 218,258 $ 230,431 SBA loans originated/transferred from/to held-for-investment during the quarter/year 34,366 14,589 27,022 16,260 18,273 48,955 35,163 SBA loans sold during the quarter/year (19,508 ) (28,164 ) (21,749 ) (9,245 ) (42,437 ) (47,672 ) (42,437 ) SBA loans principal paydown/payoff, net of advance (3,881 ) (6,516 ) (6,370 ) (2,743 ) (4,506 ) (10,397 ) (8,074 ) SBA loans held-for-sale at end of the quarter/year $ 209,144 $ 198,167 $ 218,258 $ 219,355 $ 215,083 $ 209,144 $ 215,083 Gain on sale of SBA loans $ 1,064 $ 1,489 $ 838 $ 419 $ 1,952 $ 2,553 $ 1,952 Premium on sale (weighted average) 8.3 % 8.4 % 6.8 % 8.3 % 6.8 % 8.4 % 6.8 % SBA loan production $ 45,126 $ 18,089 $ 37,821 $ 24,270 $ 24,013 $ 63,215 $ 45,732 FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8 (Dollars in thousands) Three Months Ended Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2024 2024 2023 2023 2023 2024 2023 SBA servicing assets @ beginning of the quarter/year $ 7,560 $ 7,673 $ 7,873 $ 8,426 $ 8,528 $ 7,673 $ 9,232 Newly added SBA servicing assets from SBA loans sold 395 555 430 182 806 950 806 Regular quarterly/annual servicing assets amortization (335 ) (332 ) (356 ) (371 ) (379 ) (667 ) (782 ) SBA servicing assets amortized from SBA loans paid off/charged off (216 ) (336 ) (274 ) (364 ) (529 ) (552 ) (830 ) Subtotal before impairment 7,404 7,560 7,673 7,873 8,426 7,404 8,426 Reversal of valuation allowance on servicing assets - - - - - - - SBA servicing assets @ the end of the quarter/year $ 7,404 $ 7,560 $ 7,673 $ 7,873 $ 8,426 $ 7,404 $ 8,426 FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9 (Dollars in thousands) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Balance % Balance % Balance % Balance % Balance % Noninterest-bearing demand $ 281,243 21.0 % $ 286,766 21.1 % $ 305,923 21.1 % $ 406,033 26.2 % $ 426,333 28.0 % Interest-bearing demand 7,901 0.6 % 6,709 0.5 % 7,504 0.5 % 6,395 0.4 % 9,056 0.6 % NOW & MMDA 240,951 18.0 % 229,642 16.9 % 237,548 16.3 % 227,283 14.7 % 210,429 13.8 % Savings 80,360 6.0 % 84,999 6.2 % 88,689 6.1 % 78,969 5.1 % 62,324 4.1 % TCDs of $250K and under 295,109 22.0 % 299,944 22.0 % 315,920 21.7 % 312,704 20.2 % 298,520 19.6 % TCDs of $250K over 314,119 23.4 % 339,482 25.0 % 353,866 24.4 % 373,345 24.1 % 368,262 24.2 % Wholesale deposits 120,706 9.0 % 113,422 8.3 % 144,135 9.9 % 144,561 9.3 % 147,487 9.7 % Total Deposits $ 1,340,389 100.0 % $ 1,360,964 100.0 % $ 1,453,585 100.0 % $ 1,549,290 100.0 % $ 1,522,411 100.0 % Recap: Noninterest-bearing demand $ 281,243 21.0 % $ 286,766 21.1 % $ 305,923 21.0 % $ 406,033 26.2 % $ 426,333 28.0 % Interest-bearing demand 7,901 0.6 % 6,709 0.5 % 7,504 0.5 % 6,395 0.4 % 9,056 0.6 % NOW & MMDA 217,339 16.2 % 229,642 16.9 % 237,548 16.3 % 227,283 14.7 % 210,429 13.8 % Savings 80,360 6.0 % 84,999 6.2 % 88,689 6.1 % 78,969 5.1 % 62,324 4.1 % TCDs of $250K and under 295,109 22.0 % 299,944 22.0 % 315,920 21.7 % 312,704 20.2 % 298,520 19.6 % Core Deposits 881,952 65.8 % 908,060 66.7 % 955,584 65.7 % 1,031,384 66.6 % 1,006,662 66.1 % TCDs of $250K over 314,119 23.4 % 339,482 24.9 % 353,866 24.3 % 373,345 24.1 % 368,262 24.2 % ICS MMDA 23,612 1.8 % Wholesale deposits 120,706 9.0 % 113,422 8.3 % 144,135 9.9 % 144,561 9.3 % 147,487 9.7 % Noncore Deposits 458,437 34.2 % 452,904 33.3 % 498,001 34.3 % 517,906 33.4 % 515,749 33.9 % Total Deposits $ 1,340,389 100.0 % $ 1,360,964 100.0 % $ 1,453,585 100.0 % $ 1,549,290 100.0 % $ 1,522,411 100.0 % FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10 (Dollars in thousands) 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 2024 2024 2023 2023 2023 Allowance for Credit Losses Balance at beginning of period $ 16,048 $ 15,291 $ 15,284 $ 15,626 $ 15,627 CECL transition provision - - - - - Provision for credit losses 200 743 - - - Charge-offs (257 ) (2 ) (350 ) (11 ) Recoveries 51 14 9 8 10 Balance at the end of period $ 16,042 $ 16,048 $ 15,291 $ 15,284 $ 15,626 Nonperforming Assets:¹ Over 90 days still accruing $ - $ 1,605 $ 399 $ 2 $ 39 Nonaccrual loans 5,797 2,842 2,030 616 645 Total nonperforming loans 5,797 4,447 2,429 618 684 Other real estate owned $ - - 55 55 - Total nonperforming assets $ 5,797 $ 4,447 $ 2,484 $ 673 $ 684 Classified Assets:¹ Substandard $ 12,762 $ 11,912 $ 11,063 $ 10,105 $ 10,491 Doubtful - - - - - Loss Total classified loans $ 12,762 $ 11,912 $ 11,063 $ 10,105 $ 10,491 Other real estate owned $ - - 55 55 - Total classified assets $ 12,762 $ 11,912 $ 11,118 $ 10,160 $ 10,491 Performing modified loans:¹ $ 464 $ 3,811 $ 3,336 $ 3,336 $ 3,336 Delinquent Loans:¹ Loans 30-89 days past due $ 8,613 $ 16,907 $ 5,981 $ 10,620 $ 4,420 90 days or more past due and still accruing - 1,605 399 2 39 Nonaccrual 5,797 2,842 2,030 616 645 Total delinquent loans $ 14,410 $ 21,354 $ 8,410 $ 11,238 $ 5,104 Asset Quality Ratios: Net (recoveries) charge-offs to average loans² 0.06 % 0.00 % 0.00 % 0.10 % 0.00 % Nonaccrual loans to loans held-for-investment 0.47 % 0.24 % 0.17 % 0.05 % 0.05 % Nonperforming loans to loans held-for-investment 0.47 % 0.37 % 0.20 % 0.05 % 0.06 % Nonperforming assets to total assets 0.35 % 0.27 % 0.14 % 0.04 % 0.04 % Classified loans to loans held-for-investment 1.04 % 1.00 % 0.92 % 0.84 % 0.87 % Classified loans to Tier 1 and ACL 4.93 % 4.69 % 4.45 % 4.18 % 4.44 % Classified assets to total assets 0.77 % 0.71 % 0.63 % 0.55 % 0.58 % Classified assets to Tier 1 and ACL 4.93 % 4.69 % 4.47 % 4.20 % 4.44 % ACL to loans held-for-investment 1.31 % 1.34 % 1.27 % 1.27 % 1.30 % ACL to nonaccrual loans 276.73 % 564.67 % 753.25 % 2481.17 % 2422.64 % ACL to nonperforming loans 276.73 % 360.87 % 629.52 % 2473.14 % 2284.50 % ACL to nonperforming assets 276.73 % 360.87 % 615.58 % 2271.03 % 2284.50 % Texas ratio ³ 2.24 % 1.75 % 1.00 % 0.28 % 0.29 % ¹ Net of SBA guaranteed balance ² Includes loans held-for-sale ³ Nonperforming assets divided by tangible common equity and ACL Allowance for Credit Losses on Off-Balance Sheet Items: Balance at beginning of period $ 324 $ 667 $ 667 $ 667 $ 667 Provision for credit losses on off-balance sheet items (343 ) - - - Balance at the end of period $ 324 $ 324 $ 667 $ 667 $ 667 Loans held-for-sale 209,144 198,167 218,258 219,355 215,083 Loans held-for-investment 1,228,496 1,194,439 1,204,009 1,201,230 1,201,237 Loans receivable 1,437,640 1,392,606 1,422,267 1,420,585 1,416,320 Total assets 1,654,909 1,673,261 1,760,413 1,859,312 1,819,630 Tier 1 and ACL 258,882 254,188 248,565 241,713 236,425 Tangible Common Equity 242,840 238,140 233,274 226,429 220,799 ACL $ 16,042 $ 16,048 $ 15,291 $ 15,284 $ 15,626 Nonperforming assets to loans held-for-investment 0.47 % 0.37 % 0.21 % 0.1 % 0.06 % FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11 Well Capitalized Adequately Capitalized June 30, March 31, December 31, September 30, June 30, Regulatory BASEL III Requirement Fully Phased In 2024 2024 2023 2023 2023 Leverage ratio Company N/A N/A 14.51 % 13.85 % 12.98 % 12.53 % 12.23 % Bank 5.00 % 4.00 % 14.45 % 13.84 % 12.96 % 12.50 % 12.20 % Common equity tier 1 risk-based capital ratio Company N/A N/A 18.36 % 18.67 % 18.08 % 17.61 % 17.08 % Bank 6.50 % 7.00 % 18.28 % 18.65 % 18.05 % 17.57 % 17.03 % Tier 1 risk-based capital ratio Company N/A N/A 18.36 % 18.67 % 18.08 % 17.61 % 17.08 % Bank 8.00 % 8.50 % 18.28 % 18.65 % 18.05 % 17.57 % 17.03 % Total risk-based capital ratio Company N/A N/A 19.59 % 19.92 % 19.30 % 18.83 % 18.32 % Bank 10.00 % 10.50 % 19.50 % 19.91 % 19.27 % 18.79 % 18.27 % Tangible common equity/total assets 14.70 % 14.25 % 13.27 % 12.19 % 12.15 % Tangible common equity per share $ 22.94 $ 22.49 $ 22.03 $ 21.39 $ 20.85 FIVE-QUARTER MARGIN ANALYSIS (Unaudited) - Table 12 (Dollars in thousands) Three Months Ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Number of Days in the Period INTEREST-EARNING ASSETS Loans Receivable¹ $ 1,418,458 $ 24,887 7.06 % $ 1,415,924 $ 24,906 7.07 % $ 1,410,971 $ 24,926 7.01 % $ 1,417,148 $ 24,734 6.92 % $ 1,444,608 $ 24,661 6.85 % Investment securities ² 70,052 723 4.15 % 59,554 575 3.88 % 60,094 563 3.72 % 64,587 577 3.54 % 67,958 595 3.51 % Interest-earning deposits at the FRB and other banks 146,956 1,995 5.46 % 207,155 2,817 5.47 % 288,769 3,973 5.46 % 293,081 3,994 5.41 % 258,236 3,296 5.12 % Other earning assets 11,011 200 7.31 % 11,011 214 7.82 % 11,011 212 7.64 % 11,011 196 7.06 % 10,825 163 6.04 % Total interest-earning assets ² 1,646,477 27,805 6.79 % 1,693,644 28,512 6.77 % 1,770,845 29,674 6.65 % 1,785,827 29,501 6.55 % 1,781,627 28,715 6.46 % NONINTEREST-EARNING ASSETS Cash and due from banks 12,907 12,172 12,567 13,045 12,792 Other noninterest-earning assets 33,263 31,967 32,985 33,331 34,060 Total noninterest-earning assets 46,170 44,139 45,552 46,376 46,852 Less: Allowance for credit losses (16,058 ) (15,322 ) (15,291 ) (15,622 ) (15,627 ) TOTAL ASSETS $ 1,676,589 $ 1,722,461 $ 1,801,106 $ 1,816,581 $ 1,812,852 INTEREST-BEARING DEPOSITS Interest-bearing demand $ 11,864 $ 6 0.20 % $ 12,680 $ 6 0.19 % $ 12,657 $ 7 0.22 % $ 12,347 $ 6 0.19 % $ 14,522 $ 7 0.19 % Money market 230,261 2,272 3.97 % 229,441 2,285 4.01 % 222,289 2,158 3.85 % 211,152 1,907 3.58 % 192,872 1,414 2.94 % Savings 82,215 700 3.42 % 84,854 724 3.43 % 82,403 664 3.20 % 70,579 494 2.78 % 63,786 324 2.04 % Time deposits 759,954 9,296 4.92 % 801,122 9,523 4.78 % 824,900 9,515 4.58 % 820,335 8,916 4.31 % 839,198 8,068 3.86 % Total interest-bearing deposits 1,084,294 12,274 4.55 % 1,128,097 12,538 4.47 % 1,142,249 12,344 4.29 % 1,114,413 11,323 4.03 % 1,110,378 9,813 3.54 % Borrowings 50,013 117 0.94 % 50,000 117 0.94 % 50,001 118 0.94 % 50,001 119 0.94 % 50,000 117 0.94 % Total interest-bearing liabilities 1,134,307 12,391 4.39 % 1,178,097 12,655 4.32 % 1,192,250 12,462 4.15 % 1,164,414 11,442 3.90 % 1,160,378 9,930 3.43 % Noninterest-bearing deposits 279,765 284,867 350,656 397,791 411,432 Other liabilities 19,287 21,112 25,602 27,519 20,934 Stockholders' equity 243,230 238,385 232,598 226,857 220,108 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,676,589 $ 1,722,461 $ 1,801,106 $ 1,816,581 $ 1,812,852 Net interest income² $ 15,414 $ 15,857 $ 17,212 $ 18,059 $ 18,785 Net interest spread 2.40 % 2.45 % 2.50 % 2.65 % 3.03 % Effect of noninterest-bearing sources 1.37 % 1.32 % 1.36 % 1.36 % 1.20 % Net interest margin² 3.77 % 3.77 % 3.86 % 4.01 % 4.23 % Cost of deposits $ 1,364,059 $ 12,274 3.62 % $ 1,412,964 $ 12,538 3.57 % $ 1,492,905 $ 12,344 3.28 % $ 1,512,204 $ 11,323 2.97 % $ 1,521,810 $ 9,813 2.59 % Cost of funds $ 1,414,072 $ 12,391 3.52 % $ 1,462,964 $ 12,655 3.48 % $ 1,542,906 $ 12,462 3.20 % $ 1,562,205 $ 11,442 2.91 % $ 1,571,810 $ 9,930 2.53 % ' Loan held-for-investment, plus loans held-for-sale ² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13 (Dollars in thousands) Three Months Ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Contractual yield $ 24,271 6.88 % $ 24,138 6.86 % $ 24,235 6.81 % $ 23,932 6.70 % $ 23,767 6.60 % SBA discount accretion 736 0.21 % 926 0.26 % 845 0.24 % 921 0.25 % 1,124 0.31 % Prepayment penalties and late fees 36 0.01 % 67 0.01 % 40 0.01 % 18 0.01 % 60 0.02 % Amortization of net deferred costs (156 ) -0.04 % (225 ) -0.06 % (194 ) -0.05 % (137 ) -0.04 % (290 ) -0.08 % As reported yield on loans $ 24,887 7.06 % $ 24,906 7.07 % $ 24,926 7.01 % $ 24,734 6.92 % $ 24,661 6.85 % MARGIN ANALYSIS (Unaudited) - Table 14 (Dollars in thousands) Six Months Ended June 30, 2024 June 30, 2023 Avg Balance Interest Yield Avg Balance Interest Yield Number of Days in the Period INTEREST-EARNING ASSETS Loans Receivable ¹ $ 1,417,191 $ 49,793 7.07 % $ 1,473,184 $ 49,040 6.71 % Investment securities ² 64,803 1,298 4.03 % 69,046 1,172 3.42 % Interest-earning deposits at the FRB and other banks 177,056 4,812 5.47 % 224,651 5,474 4.91 % Other earning assets 11,011 414 7.56 % 10,475 327 6.30 % Total interest-earning assets ² 1,670,061 56,317 6.78 % 1,777,356 56,013 6.36 % NONINTEREST-EARNING ASSETS Cash and due from banks 12,540 13,523 Other noninterest-earning assets 32,122 35,296 Total noninterest-earning assets 44,662 48,819 Less: Allowance for credit losses (15,690 ) (15,590 ) TOTAL ASSETS $ 1,699,033 $ 1,810,585 INTEREST-BEARING DEPOSITS Interest-bearing demand $ 12,271 $ 12 0.20 % $ 16,261 $ 16 0.20 % Money market 229,851 4,557 3.99 % 212,261 2,883 2.74 % Savings 83,534 1,424 3.43 % 59,704 488 1.65 % Time deposits 780,539 18,819 4.85 % 818,251 14,478 3.57 % Total interest-bearing deposits 1,106,195 24,812 4.51 % 1,106,477 17,865 3.26 % Borrowings 50,007 234 0.9 % 50,000 233 0.94 % Total interest-bearing liabilities 1,156,202 25,046 4.36 % 1,156,477 18,098 3.16 % Noninterest-bearing deposits 282,316 418,273 Other liabilities 19,707 18,904 Stockholders' equity 240,808 216,931 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,699,033 $ 1,810,585 Net interest income² $ 31,271 $ 37,915 Net interest spread 2.42 % 3.20 % Effect of noninterest-bearing sources 1.35 % 1.10 % Net interest margin² 3.77 % 4.30 % Cost of deposits $ 1,388,511 $ 24,812 3.59 % $ 1,524,750 $ 17,865 2.36 % Cost of funds $ 1,438,518 $ 25,046 3.50 % $ 1,574,750 $ 18,098 2.32 % ¹ Loan held-for-investment, plus loans held-for-sale ² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 15 (Dollars in thousands) Six Months Ended June 30, 2024 June 30, 2023 Amount Yield Amount Yield Contractual yield $ 48,409 6.87 % $ 47,410 6.49 % SBA discount accretion 1,662 0.24 % 2,061 0.28 % Prepayment penalties and late fees 103 0.01 % 90 0.01 % Amortization of net deferred costs (381 ) -0.05 % (521 ) -0.07 % As reported yield on loans $ 49,793 7.07 % $ 49,040 6.71 % View source version on businesswire.com: https://www.businesswire.com/news/home/20240725152164/en/Contacts Richard Koh, EVP & CFO (323) 988-3037 RichardK@cbb-bank.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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CBB Bancorp, Inc. Reports Second Quarter 2024 Financial Results By: CBB Bancorp, Inc. via Business Wire July 26, 2024 at 09:00 AM EDT 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 $5.5 million for the second quarter 2024, or $0.51 per diluted share compared to $5.7 million in the first quarter 2024, or $0.54 per diluted share. OVERALL RESULTS Net income for the second quarter 2024 decreased from the first quarter primarily due to lower net interest income and gain on sale of loans, offset by a lower provision for credit losses and noninterest expenses. The return on average assets for the second quarter 2024 was 1.31% compared to 1.32% for the first quarter 2024 and 1.79% for the second quarter 2023. The return on average equity for the second quarter 2024 was 9.06% compared to 9.57% for the first quarter 2024 and 14.76% for the second quarter 2023. The efficiency ratio for the second quarter 2024 was 55.69% compared to 54.68% for the first quarter 2024 and 47.29% for the second quarter 2023. James Hong, President and CEO, commented, "Amidst the dynamic economic environment, we are charting a course through a landscape of changes exploring new opportunities. While the rise in interest rates presents its own set of challenges, it also opens up avenues for growth. Our loan portfolios, funding costs, net interest margins, and overall revenue are being reshaped in this process. Embracing these changes, we have turned to technology as our ally. We have seen a robust increase in the adoption of online account openings, internet banking, and mobile banking among our existing and new customers. This is a testament to our resilience and adaptability in the face of adversity." INCOME STATEMENT Net Interest Income Net interest income for the second quarter 2024 was $15.4 million, a decrease of $444 thousand, or 2.8%, quarter over quarter, and a decrease of $3.4 million, or 18.0% compared to the second quarter 2023. Net interest income for the six months ended June 30, 2024 was $31.2 million, a decrease of $6.6 million or 17.6% compared to the same period last year. The decrease in net interest income was due to the higher cost of interest-bearing deposits as maturing time deposits were rolled over into higher interest rate CDs. Net Interest Margin The net interest margin for both the second and first quarters 2024 was 3.77% and 4.23% for the second quarter 2023. The decrease in the net interest margin compared to the same quarter 2023 was due to higher cost of funds. The cost of funds for the second quarter 2024 increased four basis points to 3.52% compared to 3.48% in the previous quarter and 2.53% in the second quarter 2023. Provision for Credit Losses Provision for credit losses was $200 thousand for the second quarter 2024 compared to $400 thousand in the first quarter 2024. No provision for credit losses was recorded in the second quarter 2023. Noninterest Income Noninterest income for the second quarter 2024 was $2.3 million, a decrease of $226 thousand compared to $2.6 million for the first quarter 2024, and a decrease of $464 thousand compared to $2.8 million for the second quarter 2023. The decrease in noninterest income was primarily the result of lower gain on sale of loans offset by higher SBA servicing fee income. Noninterest income for the six months ended June 30, 2024 was $4.9 million, an increase of $1.0 million compared to the same period last year. The increase was primarily the result of higher gain on sale of loans and SBA servicing fee income. Noninterest Expenses Noninterest expenses for the second quarter 2024 were $9.9 million compared to $10.0 million for the first quarter 2024 and $10.2 million for the second quarter 2023. Noninterest expenses decreased $188 thousand and $327 thousand compared to the first quarter 2024 and the second quarter 2023, respectively. Please refer to financial tables in this press release for additional information and trends. Income Taxes The Company’s effective tax rate for the second quarter 2024 was 28.3% compared to 28.4% for first quarter 2024 and 28.6% for second quarter 2023. BALANCE SHEET Investment Securities Investment securities were $73.1 million at June 30, 2024, an increase of $13.9 million or 23.5% from March 31, 2024, and an increase of $6.7 million or 10.0% from June 30, 2023. 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 June 30, 2024, was $1.44 billion, an increase of $45.0 million or 3.2% from March 31, 2024, and an increase of $21.3 million or 1.5% from June 30, 2023. Allowance for Credit Losses and Asset Quality The Allowance for Credit Losses (“ACL”) at June 30, 2024, was $16.0 million which was 1.31% of loans held-for-investment compared to $16.0 million at March 31, 2024, or 1.34% of loans held-for-investment. At June 30, 2023, ACL was $15.6 million or 1.30% of total loans held-for-investment. Total Nonperforming assets at June 30, 2024, were $5.8 million compared to $4.4 million at March 31, 2024 and $0.7 million at June 30, 2023. The ACL coverage to nonperforming assets was over 276% at June 30, 2024. SBA Loans Held-for-Sale Total SBA loans held-for-sale at June 30, 2024, was $209.1 million compared to $ 198.2 million March 31, 2024, and $215.1 million at June 30, 2023. We continue to assess the SBA loan market premium and plan to sell loans when it is advantageous to do so. The Bank sold approximately $19.5 million in SBA loans with an average premium of 8.3% during the second quarter of 2024 compared to the sale of $28.2 million with an average premium of 8.4% in the first quarter of 2024. The Bank sold approximately $42.4 million of SBA loans with an average premium of 6.8% during the second quarter 2023. Deposits Total deposits were $1.34 billion at June 30, 2024, down $20.6 million or 1.5% from March 31, 2024, and down $182.0 million or 12.0% from June 30, 2023. DDAs were 21.6% of total deposits for both June 30, 2024 and March 31, 2024, and 28.6% at June 30, 2023. NOW and MMDA deposits comprised 18.0% of total deposits at June 30, 2024, compared to 16.9% at March 31, 2024, and 13.8% at June 30, 2023. The quarter-over-quarter and year-over-year decline in DDA 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 in Federal Home Loan Bank advances since April 16, 2020. The blended cost of FHLB advances was 0.94% as of June 30, 2024. Capital Stockholders’ equity was $245.3 million at June 30, 2024, which increased $4.7 million or 1.9%, quarter over quarter. Tangible book value per share at June 30, 2024, was $22.94, an increase of $0.45, or 2.0%, quarter over quarter. Each of the Company’s and the Bank’s regulatory capital ratios decreased, except for the leverage ratio at June 30, 2024, compared to March 31, 2024, and increased compared to June 30, 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 Risk-Based Capital Ratios at June 30, 2024, were 18.36% and 18.28% for the Company and the Bank, respectively. Total Risk-Based Capital Ratios were 19.59% and 19.50% 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 June 30, 2024, the Bank had eleven full-service banking offices in Los Angeles and Orange Counties in California, Dallas County in Texas and Honolulu, Hawaii; two SBA regional offices in Los Angeles and Dallas Counties; and loan production offices in Georgia and Washington. For additional information, please go to www.cbb-bank.com under the tab “About Us” and select “Investor Relations” to see the 2Q 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 Six Months Ended June 30, March 31, $ % June 30, $ % June 30, June 30, $ % 2024 2024 Change Change 2023 Change Change 2024 2023 Change Change Interest income $ 27,755 $ 28,463 $ (708 ) (2.5 %) $ 28,664 $ (909 ) (3.2 %) $ 56,218 $ 55,912 $ 306 0.5 % Interest expense 12,391 12,655 (264 ) (2.1 %) 9,930 2,461 24.8 % 25,046 18,098 6,948 38.4 % Net interest income 15,364 15,808 (444 ) (2.8 %) 18,734 (3,370 ) (18.0 %) 31,172 37,814 (6,642 ) (17.6 %) Provision for credit losses 200 400 (200 ) (50.0 %) - 200 100.0 % 600 - 600 100.0 % Net interest income after provision for credit losses 15,164 15,408 (244 ) (1.6 %) 18,734 (3,570 ) (19.1 %) 30,572 37,814 (7,242 ) (19.2 %) Gain on sale of loans 1,064 1,489 (425 ) -28.5 % 1,952 (888 ) 319.8 % 2,553 1,952 601 30.8 % Gain (loss) on sale of OREO - (1 ) 1 (100.0 %) - - - (1 ) - (1 ) (100.0 %) SBA servicing fee income, net 768 633 135 21.3 % 440 328 74.5 % 1,401 1,094 307 28.1 % Recovery on impaired servicing liability - 10 (10 ) (100.0 %) - - - 10 - 10 100.0 % Service charges and other income 503 430 73 17.0 % 407 96 23.6 % 933 805 128 15.9 % Noninterest income 2,335 2,561 (226 ) (8.8 %) 2,799 (464 ) (16.6 %) 4,896 3,851 1,045 27.1 % Salaries and employee benefits 5,927 6,024 (97 ) (1.6 %) 5,581 346 6.2 % 11,951 11,660 291 2.5 % Occupancy and equipment 1,114 1,122 (8 ) (0.7 %) 1,122 (8 ) (0.7 %) 2,236 2,246 (10 ) (0.4 %) Marketing expense 403 402 1 0.2 % 409 (6 ) (1.5 %) 805 783 22 2.8 % Professional expense 440 412 28 6.8 % 436 4 0.9 % 852 890 (38 ) (4.3 %) Other expenses 1,972 2,084 (112 ) (5.4 %) 2,635 (663 ) (25.2 %) 4,056 4,879 (823 ) (16.9 %) Noninterest expense 9,856 10,044 (188 ) (1.9 %) 10,183 (327 ) (3.2 %) 19,900 20,458 (558 ) (2.7 %) Income before income tax provision 7,643 7,925 (282 ) (3.6 %) 11,350 (3,707 ) (32.7 %) 15,568 21,207 (5,639 ) (26.6 %) Income tax provision 2,163 2,253 (90 ) (4.0 %) 3,248 (1,085 ) (33.4 %) 4,416 6,015 (1,599 ) (26.6 %) Net income $ 5,480 $ 5,672 $ (192 ) (3.4 %) $ 8,102 $ (2,622 ) (32.4 %) $ 11,152 $ 15,192 $ (4,040 ) (26.6 %) Effective tax rate 28.3 % 28.4 % (0.1 %) (0.5 %) 28.6 % (0.3 %) (1.1 %) 28.4 % 28.4 % 0.00 % 0.0 % 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 10,582,197 5,939 0.1 % Weighted average shares for diluted EPS 10,588,136 10,588,688 (552 ) (0.0 %) 10,591,350 (3,214 ) (0.0 %) 10,558,688 10,595,803 (37,115 ) (0.4 %) Basic EPS $ 0.51 $ 0.54 $ (0.03 ) (5.6 %) $ 0.77 $ (0.26 ) (33.8 %) $ 1.05 $ 1.44 $ (0.39 ) -27.1 % Diluted EPS $ 0.51 $ 0.54 $ (0.03 ) (5.6 %) $ 0.76 $ (0.25 ) (32.9 %) $ 1.05 $ 1.43 $ (0.38 ) (26.6 %) Return on average assets 1.31 % 1.32 % (0.01 %) (0.8 %) 1.79 % (0.48 %) (26.8 %) 1.32 % 1.69 % (0.37 %) (21.9 %) Return on average equity 9.06 % 9.57 % (0.51 %) (5.3 %) 14.76 % (5.70 %) (38.6 %) 9.31 % 14.12 % (4.81 %) (34.1 %) Efficiency ratio¹ 55.69 % 54.68 % 1.01 % 1.9 % 47.29 % 8.40 % 17.8 % 55.17 % 49.10 % 6.07 % 12.4 % Yield on interest-earning assets² 6.79 % 6.77 % 0.02 % 0.3 % 6.46 % 0.33 % 5.1 % 6.78 % 6.36 % 0.42 % 6.6 % Cost of funds 3.52 % 3.48 % 0.04 % 1.2 % 2.53 % 0.99 % 39.1 % 3.50 % 2.32 % 1.18 % 50.9 % Net interest margin² 3.77 % 3.77 % 0.00 % 0.0 % 4.23 % (0.46 %) (10.9 %) 3.77 % 4.30 % (0.53 %) (12.3 %) 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) June 30, March 31, $ % June 30, $ % 2024 2024 Change Change 2023 Change Change ASSETS Cash and due from banks $ 11,667 $ 11,612 $ 55 0.5 % $ 12,704 $ (1,037 ) (8.2 %) Interest-earning deposits at the FRB and other banks 101,415 181,366 (79,951 ) (44.1 %) 293,394 (191,979 ) (65.4 %) Investment securities¹ 73,051 59,143 13,908 23.5 % 66,400 6,651 10.0 % Loans held-for-sale 209,144 198,167 10,977 5.5 % 215,083 (5,939 ) (2.8 %) Loans held-for-investment 1,228,496 1,194,439 34,057 2.9 % 1,201,237 27,259 2.3 % Less: Allowance for credit losses ("ACL") (16,042 ) (16,048 ) 6 0.0 % (15,626 ) (416 ) (2.7 %) Loans held-for-investment, net 1,212,454 1,178,391 34,063 2.9 % 1,185,611 26,843 2.3 % Other real estate owned ("OREO") - - - - - - - Restricted stock investments 11,011 11,011 - - 11,011 - - Servicing assets 7,404 7,560 (156 ) (2.1 %) 8,426 (1,022 ) (12.1 %) Goodwill 2,185 2,185 - - 2,185 - - Intangible assets 235 245 (10 ) (4.1 %) 279 (44 ) (15.8 %) Other assets 26,343 23,581 2,762 11.7 % 24,537 1,806 7.4 % Total assets $ 1,654,909 $ 1,673,261 $ (18,352 ) (1.1 %) $ 1,819,630 $ (164,721 ) (9.1 %) LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing $ 281,243 $ 286,766 $ (5,523 ) (1.9 %) $ 426,333 $ (145,090 ) (34.0 %) Interest-bearing 1,059,146 1,074,198 (15,052 ) (1.4 %) 1,096,078 (36,932 ) (3.4 %) Total deposits 1,340,389 1,360,964 (20,575 ) (1.5 %) 1,522,411 (182,022 ) (12.0 %) FHLB advances and other borrowing 50,000 50,000 - - 50,000 - - Other liabilities 19,260 21,727 (2,467 ) (11.4 %) 23,956 (4,696 ) (19.6 %) Total liabilities 1,409,649 1,432,691 (23,042 ) (1.6 %) 1,596,367 (186,718 ) (11.7 %) Stockholders' Equity 245,260 240,570 4,690 1.9 % 223,263 21,997 9.9 % TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,654,909 $ 1,673,261 $ (18,352 ) (1.1 %) $ 1,819,630 $ (164,721 ) (9.1 %) CAPITAL RATIOS Leverage ratio Company 14.51 % 13.85 % 0.66 % 4.8 % 12.23 % 2.28 % 18.7 % Bank 14.45 % 13.84 % 0.61 % 4.4 % 12.20 % 2.25 % 18.5 % Common equity tier 1 risk-based capital ratio Company 18.36 % 18.67 % (0.31 %) (1.7 %) 17.08 % 1.28 % 7.5 % Bank 18.28 % 18.65 % (0.38 %) (2.0 %) 17.03 % 1.25 % 7.3 % Tier 1 risk-based capital ratio Company 18.36 % 18.67 % (0.31 %) (1.7 %) 17.08 % 1.28 % 7.5 % Bank 18.28 % 18.65 % (0.38 %) (2.0 %) 17.03 % 1.25 % 7.3 % Total risk-based capital ratio Company 19.59 % 19.92 % (0.34 %) (1.7 %) 18.32 % 1.27 % 6.9 % Bank 19.50 % 19.91 % (0.40 %) (2.0 %) 18.27 % 1.23 % 6.7 % Tangible book value per share $ 22.94 $ 22.49 $ 0.45 2.0 % $ 20.85 $ 2.09 10.0 % Loans Held for Investments-to-Deposit ("LHFITD") ratio 91.65 % 87.76 % 3.89 % 4.4 % 78.90 % 12.75 % 16.2 % Net Loan-to-Deposit ("LTD") ratio 106.06 % 101.15 % 4.91 % 4.9 % 92.00 % 14.06 % 15.3 % Nonperforming assets $ 5,797 $ 4,447 $ 1,350 30.4 % $ 684 $ 5,113 747.5 % Nonperforming assets as a % of loans held-for-investment 0.47 % 0.37 % 0.10 % 27.0 % 0.06 % 0.41 % 683.3 % ACL as a % of loans held-for-investment 1.31 % 1.34 % (0.03 %) (2.24 %) 1.30 % 0.01 % 0.8 % ¹ Includes AFS and HTM FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3 (Dollars in thousands, except per share amounts) Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Interest income $ 27,755 $ 28,463 $ 29,624 $ 29,450 $ 28,664 Interest expense 12,391 12,655 12,462 11,442 9,930 Net interest income 15,364 15,808 17,162 18,008 18,734 Provision for credit losses 200 400 - - - Net interest income after provision for credit losses 15,164 15,408 17,162 18,008 18,734 Gain on sale of loans 1,064 1,489 838 419 1,952 Gain (loss) on sale of OREO - (1 ) - - - SBA servicing fee income, net 768 643 690 639 440 Service charges and other income 503 430 436 402 407 Noninterest income 2,335 2,561 1,964 1,460 2,799 Salaries and employee benefits 5,927 6,024 5,356 5,569 5,581 Occupancy and equipment 1,114 1,122 1,128 1,103 1,122 Marketing expense 403 402 250 475 409 Professional expense 440 412 360 443 436 Other expenses 1,972 2,084 2,363 2,579 2,635 Noninterest expense 9,856 10,044 9,457 10,169 10,183 Income before income tax expense 7,643 7,925 9,669 9,299 11,350 Income tax expense 2,163 2,253 2,670 2,630 3,248 Net income $ 5,480 $ 5,672 $ 6,999 $ 6,669 $ 8,102 Effective tax rate 28.3 % 28.4 % 27.6 % 28.3 % 28.6 % Outstanding number of shares 10,588,136 10,588,136 10,588,136 10,588,136 10,588,136 Weighted average shares for basic EPS 10,588,136 10,588,136 10,588,136 10,588,136 10,588,136 Weighted average shares for diluted EPS 10,588,136 10,588,688 10,588,937 10,594,155 10,591,351 Basic EPS $ 0.51 $ 0.54 $ 0.66 $ 0.63 $ 0.77 Diluted EPS $ 0.51 $ 0.54 $ 0.66 $ 0.63 $ 0.76 FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4 (Dollars in thousands) At or for the Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2023 2023 2023 2023 Salaries and benefits $ 5,927 $ 6,024 $ 5,356 $ 5,569 $ 5,581 FTE at the end of period 172 168 169 172 165 Average FTE during the period 171 169 169 168 164 Salaries and benefits/average FTE¹ $ 139 $ 143 $ 126 $ 131 $ 137 Salaries and benefits/average assets¹ 1.42 % 1.41 % 1.18 % 1.22 % 1.23 % Noninterest expense/average assets¹ 2.36 % 2.35 % 2.08 % 2.22 % 2.25 % 1 Annualized FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5 (Dollars in thousands) June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 ASSETS Cash and due from banks $ 11,667 $ 11,612 $ 14,282 $ 11,188 $ 12,704 Interest-earning deposits at the FRB and other banks 101,415 181,366 233,255 335,016 293,394 Investment securities 73,051 59,143 59,883 61,617 66,400 Loans held-for-sale 209,144 198,167 218,258 219,355 215,083 Loans held-for-investment 1,228,496 1,194,439 1,204,009 1,201,230 1,201,237 Less: Allowance for credit losses (16,042 ) (16,048 ) (15,291 ) (15,284 ) (15,626 ) Loans held-for-investment, net 1,212,454 1,178,391 1,188,718 1,185,946 1,185,611 Other real estate owned - - 55 55 - Restricted stock investments 11,011 11,011 11,011 11,011 11,011 Servicing assets 7,404 7,560 7,673 7,873 8,426 Goodwill 2,185 2,185 2,185 2,185 2,185 Intangible assets 235 245 255 267 279 Other assets 26,343 23,581 24,838 24,799 24,537 Total assets $ 1,654,909 $ 1,673,261 $ 1,760,413 $ 1,859,312 $ 1,819,630 LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing $ 281,243 $ 286,766 $ 305,923 $ 406,033 $ 426,333 Interest-bearing 1,059,146 1,074,198 1,147,662 1,143,257 1,096,078 Total deposits 1,340,389 1,360,964 1,453,585 1,549,290 1,522,411 FHLB advances 50,000 50,000 50,000 50,000 50,000 Other liabilities 19,260 21,727 21,114 31,141 23,956 Total liabilities 1,409,649 1,432,691 1,524,699 1,630,431 1,596,367 Stockholders' Equity 245,260 240,570 235,714 228,881 223,263 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,654,909 $ 1,673,261 $ 1,760,413 $ 1,859,312 $ 1,819,630 FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6 (Dollars in thousands) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Balance % Balance % Balance % Balance % Balance % Construction $ 33,918 2.8 % $ 37,216 3.1 % $ 34,886 2.9 % $ 30,924 2.6 % $ 20,106 1.7 % Commercial real estate 1,035,425 84.3 % 1,005,765 84.2 % 1,010,495 83.9 % 1,005,735 83.7 % 1,014,785 84.5 % Commercial and industrial 108,742 8.9 % 101,784 8.5 % 108,123 9.0 % 113,374 9.4 % 114,106 9.4 % Home mortgage 44,987 3.7 % 44,389 3.7 % 44,920 3.7 % 45,452 3.8 % 45,987 3.8 % Consumer 782 0.1 % 668 0.1 % 630 0.1 % 616 0.1 % 1,074 0.1 % Gross loans held-for-investment 1,223,854 99.6 % 1,189,822 99.6 % 1,199,054 99.6 % 1,196,101 99.6 % 1,196,058 99.6 % Deferred loan fees/costs, net 4,642 0.4 % 4,617 0.4 % 4,955 0.4 % 5,129 0.4 % 5,179 0.4 % Loans held-for-investment $ 1,228,496 100.0 % $ 1,194,439 100.0 % $ 1,204,009 100.0 % $ 1,201,230 100.0 % $ 1,201,237 100.0 % Loans held-for-sale $ 209,144 $ 198,167 $ 218,258 $ 219,355 $ 215,083 Total loans receivable $ 1,437,640 $ 1,392,606 $ 1,422,267 $ 1,420,585 $ 1,416,320 FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7 (Dollars in thousands) Three Months Ended Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2024 2024 2023 2023 2023 2024 2023 SBA loans held-for-sale at beginning of the quarter/year $ 198,167 $ 218,258 $ 219,355 $ 215,083 $ 243,753 $ 218,258 $ 230,431 SBA loans originated/transferred from/to held-for-investment during the quarter/year 34,366 14,589 27,022 16,260 18,273 48,955 35,163 SBA loans sold during the quarter/year (19,508 ) (28,164 ) (21,749 ) (9,245 ) (42,437 ) (47,672 ) (42,437 ) SBA loans principal paydown/payoff, net of advance (3,881 ) (6,516 ) (6,370 ) (2,743 ) (4,506 ) (10,397 ) (8,074 ) SBA loans held-for-sale at end of the quarter/year $ 209,144 $ 198,167 $ 218,258 $ 219,355 $ 215,083 $ 209,144 $ 215,083 Gain on sale of SBA loans $ 1,064 $ 1,489 $ 838 $ 419 $ 1,952 $ 2,553 $ 1,952 Premium on sale (weighted average) 8.3 % 8.4 % 6.8 % 8.3 % 6.8 % 8.4 % 6.8 % SBA loan production $ 45,126 $ 18,089 $ 37,821 $ 24,270 $ 24,013 $ 63,215 $ 45,732 FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8 (Dollars in thousands) Three Months Ended Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2024 2024 2023 2023 2023 2024 2023 SBA servicing assets @ beginning of the quarter/year $ 7,560 $ 7,673 $ 7,873 $ 8,426 $ 8,528 $ 7,673 $ 9,232 Newly added SBA servicing assets from SBA loans sold 395 555 430 182 806 950 806 Regular quarterly/annual servicing assets amortization (335 ) (332 ) (356 ) (371 ) (379 ) (667 ) (782 ) SBA servicing assets amortized from SBA loans paid off/charged off (216 ) (336 ) (274 ) (364 ) (529 ) (552 ) (830 ) Subtotal before impairment 7,404 7,560 7,673 7,873 8,426 7,404 8,426 Reversal of valuation allowance on servicing assets - - - - - - - SBA servicing assets @ the end of the quarter/year $ 7,404 $ 7,560 $ 7,673 $ 7,873 $ 8,426 $ 7,404 $ 8,426 FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9 (Dollars in thousands) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Balance % Balance % Balance % Balance % Balance % Noninterest-bearing demand $ 281,243 21.0 % $ 286,766 21.1 % $ 305,923 21.1 % $ 406,033 26.2 % $ 426,333 28.0 % Interest-bearing demand 7,901 0.6 % 6,709 0.5 % 7,504 0.5 % 6,395 0.4 % 9,056 0.6 % NOW & MMDA 240,951 18.0 % 229,642 16.9 % 237,548 16.3 % 227,283 14.7 % 210,429 13.8 % Savings 80,360 6.0 % 84,999 6.2 % 88,689 6.1 % 78,969 5.1 % 62,324 4.1 % TCDs of $250K and under 295,109 22.0 % 299,944 22.0 % 315,920 21.7 % 312,704 20.2 % 298,520 19.6 % TCDs of $250K over 314,119 23.4 % 339,482 25.0 % 353,866 24.4 % 373,345 24.1 % 368,262 24.2 % Wholesale deposits 120,706 9.0 % 113,422 8.3 % 144,135 9.9 % 144,561 9.3 % 147,487 9.7 % Total Deposits $ 1,340,389 100.0 % $ 1,360,964 100.0 % $ 1,453,585 100.0 % $ 1,549,290 100.0 % $ 1,522,411 100.0 % Recap: Noninterest-bearing demand $ 281,243 21.0 % $ 286,766 21.1 % $ 305,923 21.0 % $ 406,033 26.2 % $ 426,333 28.0 % Interest-bearing demand 7,901 0.6 % 6,709 0.5 % 7,504 0.5 % 6,395 0.4 % 9,056 0.6 % NOW & MMDA 217,339 16.2 % 229,642 16.9 % 237,548 16.3 % 227,283 14.7 % 210,429 13.8 % Savings 80,360 6.0 % 84,999 6.2 % 88,689 6.1 % 78,969 5.1 % 62,324 4.1 % TCDs of $250K and under 295,109 22.0 % 299,944 22.0 % 315,920 21.7 % 312,704 20.2 % 298,520 19.6 % Core Deposits 881,952 65.8 % 908,060 66.7 % 955,584 65.7 % 1,031,384 66.6 % 1,006,662 66.1 % TCDs of $250K over 314,119 23.4 % 339,482 24.9 % 353,866 24.3 % 373,345 24.1 % 368,262 24.2 % ICS MMDA 23,612 1.8 % Wholesale deposits 120,706 9.0 % 113,422 8.3 % 144,135 9.9 % 144,561 9.3 % 147,487 9.7 % Noncore Deposits 458,437 34.2 % 452,904 33.3 % 498,001 34.3 % 517,906 33.4 % 515,749 33.9 % Total Deposits $ 1,340,389 100.0 % $ 1,360,964 100.0 % $ 1,453,585 100.0 % $ 1,549,290 100.0 % $ 1,522,411 100.0 % FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10 (Dollars in thousands) 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 2024 2024 2023 2023 2023 Allowance for Credit Losses Balance at beginning of period $ 16,048 $ 15,291 $ 15,284 $ 15,626 $ 15,627 CECL transition provision - - - - - Provision for credit losses 200 743 - - - Charge-offs (257 ) (2 ) (350 ) (11 ) Recoveries 51 14 9 8 10 Balance at the end of period $ 16,042 $ 16,048 $ 15,291 $ 15,284 $ 15,626 Nonperforming Assets:¹ Over 90 days still accruing $ - $ 1,605 $ 399 $ 2 $ 39 Nonaccrual loans 5,797 2,842 2,030 616 645 Total nonperforming loans 5,797 4,447 2,429 618 684 Other real estate owned $ - - 55 55 - Total nonperforming assets $ 5,797 $ 4,447 $ 2,484 $ 673 $ 684 Classified Assets:¹ Substandard $ 12,762 $ 11,912 $ 11,063 $ 10,105 $ 10,491 Doubtful - - - - - Loss Total classified loans $ 12,762 $ 11,912 $ 11,063 $ 10,105 $ 10,491 Other real estate owned $ - - 55 55 - Total classified assets $ 12,762 $ 11,912 $ 11,118 $ 10,160 $ 10,491 Performing modified loans:¹ $ 464 $ 3,811 $ 3,336 $ 3,336 $ 3,336 Delinquent Loans:¹ Loans 30-89 days past due $ 8,613 $ 16,907 $ 5,981 $ 10,620 $ 4,420 90 days or more past due and still accruing - 1,605 399 2 39 Nonaccrual 5,797 2,842 2,030 616 645 Total delinquent loans $ 14,410 $ 21,354 $ 8,410 $ 11,238 $ 5,104 Asset Quality Ratios: Net (recoveries) charge-offs to average loans² 0.06 % 0.00 % 0.00 % 0.10 % 0.00 % Nonaccrual loans to loans held-for-investment 0.47 % 0.24 % 0.17 % 0.05 % 0.05 % Nonperforming loans to loans held-for-investment 0.47 % 0.37 % 0.20 % 0.05 % 0.06 % Nonperforming assets to total assets 0.35 % 0.27 % 0.14 % 0.04 % 0.04 % Classified loans to loans held-for-investment 1.04 % 1.00 % 0.92 % 0.84 % 0.87 % Classified loans to Tier 1 and ACL 4.93 % 4.69 % 4.45 % 4.18 % 4.44 % Classified assets to total assets 0.77 % 0.71 % 0.63 % 0.55 % 0.58 % Classified assets to Tier 1 and ACL 4.93 % 4.69 % 4.47 % 4.20 % 4.44 % ACL to loans held-for-investment 1.31 % 1.34 % 1.27 % 1.27 % 1.30 % ACL to nonaccrual loans 276.73 % 564.67 % 753.25 % 2481.17 % 2422.64 % ACL to nonperforming loans 276.73 % 360.87 % 629.52 % 2473.14 % 2284.50 % ACL to nonperforming assets 276.73 % 360.87 % 615.58 % 2271.03 % 2284.50 % Texas ratio ³ 2.24 % 1.75 % 1.00 % 0.28 % 0.29 % ¹ Net of SBA guaranteed balance ² Includes loans held-for-sale ³ Nonperforming assets divided by tangible common equity and ACL Allowance for Credit Losses on Off-Balance Sheet Items: Balance at beginning of period $ 324 $ 667 $ 667 $ 667 $ 667 Provision for credit losses on off-balance sheet items (343 ) - - - Balance at the end of period $ 324 $ 324 $ 667 $ 667 $ 667 Loans held-for-sale 209,144 198,167 218,258 219,355 215,083 Loans held-for-investment 1,228,496 1,194,439 1,204,009 1,201,230 1,201,237 Loans receivable 1,437,640 1,392,606 1,422,267 1,420,585 1,416,320 Total assets 1,654,909 1,673,261 1,760,413 1,859,312 1,819,630 Tier 1 and ACL 258,882 254,188 248,565 241,713 236,425 Tangible Common Equity 242,840 238,140 233,274 226,429 220,799 ACL $ 16,042 $ 16,048 $ 15,291 $ 15,284 $ 15,626 Nonperforming assets to loans held-for-investment 0.47 % 0.37 % 0.21 % 0.1 % 0.06 % FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11 Well Capitalized Adequately Capitalized June 30, March 31, December 31, September 30, June 30, Regulatory BASEL III Requirement Fully Phased In 2024 2024 2023 2023 2023 Leverage ratio Company N/A N/A 14.51 % 13.85 % 12.98 % 12.53 % 12.23 % Bank 5.00 % 4.00 % 14.45 % 13.84 % 12.96 % 12.50 % 12.20 % Common equity tier 1 risk-based capital ratio Company N/A N/A 18.36 % 18.67 % 18.08 % 17.61 % 17.08 % Bank 6.50 % 7.00 % 18.28 % 18.65 % 18.05 % 17.57 % 17.03 % Tier 1 risk-based capital ratio Company N/A N/A 18.36 % 18.67 % 18.08 % 17.61 % 17.08 % Bank 8.00 % 8.50 % 18.28 % 18.65 % 18.05 % 17.57 % 17.03 % Total risk-based capital ratio Company N/A N/A 19.59 % 19.92 % 19.30 % 18.83 % 18.32 % Bank 10.00 % 10.50 % 19.50 % 19.91 % 19.27 % 18.79 % 18.27 % Tangible common equity/total assets 14.70 % 14.25 % 13.27 % 12.19 % 12.15 % Tangible common equity per share $ 22.94 $ 22.49 $ 22.03 $ 21.39 $ 20.85 FIVE-QUARTER MARGIN ANALYSIS (Unaudited) - Table 12 (Dollars in thousands) Three Months Ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Number of Days in the Period INTEREST-EARNING ASSETS Loans Receivable¹ $ 1,418,458 $ 24,887 7.06 % $ 1,415,924 $ 24,906 7.07 % $ 1,410,971 $ 24,926 7.01 % $ 1,417,148 $ 24,734 6.92 % $ 1,444,608 $ 24,661 6.85 % Investment securities ² 70,052 723 4.15 % 59,554 575 3.88 % 60,094 563 3.72 % 64,587 577 3.54 % 67,958 595 3.51 % Interest-earning deposits at the FRB and other banks 146,956 1,995 5.46 % 207,155 2,817 5.47 % 288,769 3,973 5.46 % 293,081 3,994 5.41 % 258,236 3,296 5.12 % Other earning assets 11,011 200 7.31 % 11,011 214 7.82 % 11,011 212 7.64 % 11,011 196 7.06 % 10,825 163 6.04 % Total interest-earning assets ² 1,646,477 27,805 6.79 % 1,693,644 28,512 6.77 % 1,770,845 29,674 6.65 % 1,785,827 29,501 6.55 % 1,781,627 28,715 6.46 % NONINTEREST-EARNING ASSETS Cash and due from banks 12,907 12,172 12,567 13,045 12,792 Other noninterest-earning assets 33,263 31,967 32,985 33,331 34,060 Total noninterest-earning assets 46,170 44,139 45,552 46,376 46,852 Less: Allowance for credit losses (16,058 ) (15,322 ) (15,291 ) (15,622 ) (15,627 ) TOTAL ASSETS $ 1,676,589 $ 1,722,461 $ 1,801,106 $ 1,816,581 $ 1,812,852 INTEREST-BEARING DEPOSITS Interest-bearing demand $ 11,864 $ 6 0.20 % $ 12,680 $ 6 0.19 % $ 12,657 $ 7 0.22 % $ 12,347 $ 6 0.19 % $ 14,522 $ 7 0.19 % Money market 230,261 2,272 3.97 % 229,441 2,285 4.01 % 222,289 2,158 3.85 % 211,152 1,907 3.58 % 192,872 1,414 2.94 % Savings 82,215 700 3.42 % 84,854 724 3.43 % 82,403 664 3.20 % 70,579 494 2.78 % 63,786 324 2.04 % Time deposits 759,954 9,296 4.92 % 801,122 9,523 4.78 % 824,900 9,515 4.58 % 820,335 8,916 4.31 % 839,198 8,068 3.86 % Total interest-bearing deposits 1,084,294 12,274 4.55 % 1,128,097 12,538 4.47 % 1,142,249 12,344 4.29 % 1,114,413 11,323 4.03 % 1,110,378 9,813 3.54 % Borrowings 50,013 117 0.94 % 50,000 117 0.94 % 50,001 118 0.94 % 50,001 119 0.94 % 50,000 117 0.94 % Total interest-bearing liabilities 1,134,307 12,391 4.39 % 1,178,097 12,655 4.32 % 1,192,250 12,462 4.15 % 1,164,414 11,442 3.90 % 1,160,378 9,930 3.43 % Noninterest-bearing deposits 279,765 284,867 350,656 397,791 411,432 Other liabilities 19,287 21,112 25,602 27,519 20,934 Stockholders' equity 243,230 238,385 232,598 226,857 220,108 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,676,589 $ 1,722,461 $ 1,801,106 $ 1,816,581 $ 1,812,852 Net interest income² $ 15,414 $ 15,857 $ 17,212 $ 18,059 $ 18,785 Net interest spread 2.40 % 2.45 % 2.50 % 2.65 % 3.03 % Effect of noninterest-bearing sources 1.37 % 1.32 % 1.36 % 1.36 % 1.20 % Net interest margin² 3.77 % 3.77 % 3.86 % 4.01 % 4.23 % Cost of deposits $ 1,364,059 $ 12,274 3.62 % $ 1,412,964 $ 12,538 3.57 % $ 1,492,905 $ 12,344 3.28 % $ 1,512,204 $ 11,323 2.97 % $ 1,521,810 $ 9,813 2.59 % Cost of funds $ 1,414,072 $ 12,391 3.52 % $ 1,462,964 $ 12,655 3.48 % $ 1,542,906 $ 12,462 3.20 % $ 1,562,205 $ 11,442 2.91 % $ 1,571,810 $ 9,930 2.53 % ' Loan held-for-investment, plus loans held-for-sale ² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13 (Dollars in thousands) Three Months Ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Contractual yield $ 24,271 6.88 % $ 24,138 6.86 % $ 24,235 6.81 % $ 23,932 6.70 % $ 23,767 6.60 % SBA discount accretion 736 0.21 % 926 0.26 % 845 0.24 % 921 0.25 % 1,124 0.31 % Prepayment penalties and late fees 36 0.01 % 67 0.01 % 40 0.01 % 18 0.01 % 60 0.02 % Amortization of net deferred costs (156 ) -0.04 % (225 ) -0.06 % (194 ) -0.05 % (137 ) -0.04 % (290 ) -0.08 % As reported yield on loans $ 24,887 7.06 % $ 24,906 7.07 % $ 24,926 7.01 % $ 24,734 6.92 % $ 24,661 6.85 % MARGIN ANALYSIS (Unaudited) - Table 14 (Dollars in thousands) Six Months Ended June 30, 2024 June 30, 2023 Avg Balance Interest Yield Avg Balance Interest Yield Number of Days in the Period INTEREST-EARNING ASSETS Loans Receivable ¹ $ 1,417,191 $ 49,793 7.07 % $ 1,473,184 $ 49,040 6.71 % Investment securities ² 64,803 1,298 4.03 % 69,046 1,172 3.42 % Interest-earning deposits at the FRB and other banks 177,056 4,812 5.47 % 224,651 5,474 4.91 % Other earning assets 11,011 414 7.56 % 10,475 327 6.30 % Total interest-earning assets ² 1,670,061 56,317 6.78 % 1,777,356 56,013 6.36 % NONINTEREST-EARNING ASSETS Cash and due from banks 12,540 13,523 Other noninterest-earning assets 32,122 35,296 Total noninterest-earning assets 44,662 48,819 Less: Allowance for credit losses (15,690 ) (15,590 ) TOTAL ASSETS $ 1,699,033 $ 1,810,585 INTEREST-BEARING DEPOSITS Interest-bearing demand $ 12,271 $ 12 0.20 % $ 16,261 $ 16 0.20 % Money market 229,851 4,557 3.99 % 212,261 2,883 2.74 % Savings 83,534 1,424 3.43 % 59,704 488 1.65 % Time deposits 780,539 18,819 4.85 % 818,251 14,478 3.57 % Total interest-bearing deposits 1,106,195 24,812 4.51 % 1,106,477 17,865 3.26 % Borrowings 50,007 234 0.9 % 50,000 233 0.94 % Total interest-bearing liabilities 1,156,202 25,046 4.36 % 1,156,477 18,098 3.16 % Noninterest-bearing deposits 282,316 418,273 Other liabilities 19,707 18,904 Stockholders' equity 240,808 216,931 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,699,033 $ 1,810,585 Net interest income² $ 31,271 $ 37,915 Net interest spread 2.42 % 3.20 % Effect of noninterest-bearing sources 1.35 % 1.10 % Net interest margin² 3.77 % 4.30 % Cost of deposits $ 1,388,511 $ 24,812 3.59 % $ 1,524,750 $ 17,865 2.36 % Cost of funds $ 1,438,518 $ 25,046 3.50 % $ 1,574,750 $ 18,098 2.32 % ¹ Loan held-for-investment, plus loans held-for-sale ² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 15 (Dollars in thousands) Six Months Ended June 30, 2024 June 30, 2023 Amount Yield Amount Yield Contractual yield $ 48,409 6.87 % $ 47,410 6.49 % SBA discount accretion 1,662 0.24 % 2,061 0.28 % Prepayment penalties and late fees 103 0.01 % 90 0.01 % Amortization of net deferred costs (381 ) -0.05 % (521 ) -0.07 % As reported yield on loans $ 49,793 7.07 % $ 49,040 6.71 % View source version on businesswire.com: https://www.businesswire.com/news/home/20240725152164/en/Contacts Richard Koh, EVP & CFO (323) 988-3037 RichardK@cbb-bank.com
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 $5.5 million for the second quarter 2024, or $0.51 per diluted share compared to $5.7 million in the first quarter 2024, or $0.54 per diluted share. OVERALL RESULTS Net income for the second quarter 2024 decreased from the first quarter primarily due to lower net interest income and gain on sale of loans, offset by a lower provision for credit losses and noninterest expenses. The return on average assets for the second quarter 2024 was 1.31% compared to 1.32% for the first quarter 2024 and 1.79% for the second quarter 2023. The return on average equity for the second quarter 2024 was 9.06% compared to 9.57% for the first quarter 2024 and 14.76% for the second quarter 2023. The efficiency ratio for the second quarter 2024 was 55.69% compared to 54.68% for the first quarter 2024 and 47.29% for the second quarter 2023. James Hong, President and CEO, commented, "Amidst the dynamic economic environment, we are charting a course through a landscape of changes exploring new opportunities. While the rise in interest rates presents its own set of challenges, it also opens up avenues for growth. Our loan portfolios, funding costs, net interest margins, and overall revenue are being reshaped in this process. Embracing these changes, we have turned to technology as our ally. We have seen a robust increase in the adoption of online account openings, internet banking, and mobile banking among our existing and new customers. This is a testament to our resilience and adaptability in the face of adversity." INCOME STATEMENT Net Interest Income Net interest income for the second quarter 2024 was $15.4 million, a decrease of $444 thousand, or 2.8%, quarter over quarter, and a decrease of $3.4 million, or 18.0% compared to the second quarter 2023. Net interest income for the six months ended June 30, 2024 was $31.2 million, a decrease of $6.6 million or 17.6% compared to the same period last year. The decrease in net interest income was due to the higher cost of interest-bearing deposits as maturing time deposits were rolled over into higher interest rate CDs. Net Interest Margin The net interest margin for both the second and first quarters 2024 was 3.77% and 4.23% for the second quarter 2023. The decrease in the net interest margin compared to the same quarter 2023 was due to higher cost of funds. The cost of funds for the second quarter 2024 increased four basis points to 3.52% compared to 3.48% in the previous quarter and 2.53% in the second quarter 2023. Provision for Credit Losses Provision for credit losses was $200 thousand for the second quarter 2024 compared to $400 thousand in the first quarter 2024. No provision for credit losses was recorded in the second quarter 2023. Noninterest Income Noninterest income for the second quarter 2024 was $2.3 million, a decrease of $226 thousand compared to $2.6 million for the first quarter 2024, and a decrease of $464 thousand compared to $2.8 million for the second quarter 2023. The decrease in noninterest income was primarily the result of lower gain on sale of loans offset by higher SBA servicing fee income. Noninterest income for the six months ended June 30, 2024 was $4.9 million, an increase of $1.0 million compared to the same period last year. The increase was primarily the result of higher gain on sale of loans and SBA servicing fee income. Noninterest Expenses Noninterest expenses for the second quarter 2024 were $9.9 million compared to $10.0 million for the first quarter 2024 and $10.2 million for the second quarter 2023. Noninterest expenses decreased $188 thousand and $327 thousand compared to the first quarter 2024 and the second quarter 2023, respectively. Please refer to financial tables in this press release for additional information and trends. Income Taxes The Company’s effective tax rate for the second quarter 2024 was 28.3% compared to 28.4% for first quarter 2024 and 28.6% for second quarter 2023. BALANCE SHEET Investment Securities Investment securities were $73.1 million at June 30, 2024, an increase of $13.9 million or 23.5% from March 31, 2024, and an increase of $6.7 million or 10.0% from June 30, 2023. 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 June 30, 2024, was $1.44 billion, an increase of $45.0 million or 3.2% from March 31, 2024, and an increase of $21.3 million or 1.5% from June 30, 2023. Allowance for Credit Losses and Asset Quality The Allowance for Credit Losses (“ACL”) at June 30, 2024, was $16.0 million which was 1.31% of loans held-for-investment compared to $16.0 million at March 31, 2024, or 1.34% of loans held-for-investment. At June 30, 2023, ACL was $15.6 million or 1.30% of total loans held-for-investment. Total Nonperforming assets at June 30, 2024, were $5.8 million compared to $4.4 million at March 31, 2024 and $0.7 million at June 30, 2023. The ACL coverage to nonperforming assets was over 276% at June 30, 2024. SBA Loans Held-for-Sale Total SBA loans held-for-sale at June 30, 2024, was $209.1 million compared to $ 198.2 million March 31, 2024, and $215.1 million at June 30, 2023. We continue to assess the SBA loan market premium and plan to sell loans when it is advantageous to do so. The Bank sold approximately $19.5 million in SBA loans with an average premium of 8.3% during the second quarter of 2024 compared to the sale of $28.2 million with an average premium of 8.4% in the first quarter of 2024. The Bank sold approximately $42.4 million of SBA loans with an average premium of 6.8% during the second quarter 2023. Deposits Total deposits were $1.34 billion at June 30, 2024, down $20.6 million or 1.5% from March 31, 2024, and down $182.0 million or 12.0% from June 30, 2023. DDAs were 21.6% of total deposits for both June 30, 2024 and March 31, 2024, and 28.6% at June 30, 2023. NOW and MMDA deposits comprised 18.0% of total deposits at June 30, 2024, compared to 16.9% at March 31, 2024, and 13.8% at June 30, 2023. The quarter-over-quarter and year-over-year decline in DDA 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 in Federal Home Loan Bank advances since April 16, 2020. The blended cost of FHLB advances was 0.94% as of June 30, 2024. Capital Stockholders’ equity was $245.3 million at June 30, 2024, which increased $4.7 million or 1.9%, quarter over quarter. Tangible book value per share at June 30, 2024, was $22.94, an increase of $0.45, or 2.0%, quarter over quarter. Each of the Company’s and the Bank’s regulatory capital ratios decreased, except for the leverage ratio at June 30, 2024, compared to March 31, 2024, and increased compared to June 30, 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 Risk-Based Capital Ratios at June 30, 2024, were 18.36% and 18.28% for the Company and the Bank, respectively. Total Risk-Based Capital Ratios were 19.59% and 19.50% 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 June 30, 2024, the Bank had eleven full-service banking offices in Los Angeles and Orange Counties in California, Dallas County in Texas and Honolulu, Hawaii; two SBA regional offices in Los Angeles and Dallas Counties; and loan production offices in Georgia and Washington. For additional information, please go to www.cbb-bank.com under the tab “About Us” and select “Investor Relations” to see the 2Q 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 Six Months Ended June 30, March 31, $ % June 30, $ % June 30, June 30, $ % 2024 2024 Change Change 2023 Change Change 2024 2023 Change Change Interest income $ 27,755 $ 28,463 $ (708 ) (2.5 %) $ 28,664 $ (909 ) (3.2 %) $ 56,218 $ 55,912 $ 306 0.5 % Interest expense 12,391 12,655 (264 ) (2.1 %) 9,930 2,461 24.8 % 25,046 18,098 6,948 38.4 % Net interest income 15,364 15,808 (444 ) (2.8 %) 18,734 (3,370 ) (18.0 %) 31,172 37,814 (6,642 ) (17.6 %) Provision for credit losses 200 400 (200 ) (50.0 %) - 200 100.0 % 600 - 600 100.0 % Net interest income after provision for credit losses 15,164 15,408 (244 ) (1.6 %) 18,734 (3,570 ) (19.1 %) 30,572 37,814 (7,242 ) (19.2 %) Gain on sale of loans 1,064 1,489 (425 ) -28.5 % 1,952 (888 ) 319.8 % 2,553 1,952 601 30.8 % Gain (loss) on sale of OREO - (1 ) 1 (100.0 %) - - - (1 ) - (1 ) (100.0 %) SBA servicing fee income, net 768 633 135 21.3 % 440 328 74.5 % 1,401 1,094 307 28.1 % Recovery on impaired servicing liability - 10 (10 ) (100.0 %) - - - 10 - 10 100.0 % Service charges and other income 503 430 73 17.0 % 407 96 23.6 % 933 805 128 15.9 % Noninterest income 2,335 2,561 (226 ) (8.8 %) 2,799 (464 ) (16.6 %) 4,896 3,851 1,045 27.1 % Salaries and employee benefits 5,927 6,024 (97 ) (1.6 %) 5,581 346 6.2 % 11,951 11,660 291 2.5 % Occupancy and equipment 1,114 1,122 (8 ) (0.7 %) 1,122 (8 ) (0.7 %) 2,236 2,246 (10 ) (0.4 %) Marketing expense 403 402 1 0.2 % 409 (6 ) (1.5 %) 805 783 22 2.8 % Professional expense 440 412 28 6.8 % 436 4 0.9 % 852 890 (38 ) (4.3 %) Other expenses 1,972 2,084 (112 ) (5.4 %) 2,635 (663 ) (25.2 %) 4,056 4,879 (823 ) (16.9 %) Noninterest expense 9,856 10,044 (188 ) (1.9 %) 10,183 (327 ) (3.2 %) 19,900 20,458 (558 ) (2.7 %) Income before income tax provision 7,643 7,925 (282 ) (3.6 %) 11,350 (3,707 ) (32.7 %) 15,568 21,207 (5,639 ) (26.6 %) Income tax provision 2,163 2,253 (90 ) (4.0 %) 3,248 (1,085 ) (33.4 %) 4,416 6,015 (1,599 ) (26.6 %) Net income $ 5,480 $ 5,672 $ (192 ) (3.4 %) $ 8,102 $ (2,622 ) (32.4 %) $ 11,152 $ 15,192 $ (4,040 ) (26.6 %) Effective tax rate 28.3 % 28.4 % (0.1 %) (0.5 %) 28.6 % (0.3 %) (1.1 %) 28.4 % 28.4 % 0.00 % 0.0 % 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 10,582,197 5,939 0.1 % Weighted average shares for diluted EPS 10,588,136 10,588,688 (552 ) (0.0 %) 10,591,350 (3,214 ) (0.0 %) 10,558,688 10,595,803 (37,115 ) (0.4 %) Basic EPS $ 0.51 $ 0.54 $ (0.03 ) (5.6 %) $ 0.77 $ (0.26 ) (33.8 %) $ 1.05 $ 1.44 $ (0.39 ) -27.1 % Diluted EPS $ 0.51 $ 0.54 $ (0.03 ) (5.6 %) $ 0.76 $ (0.25 ) (32.9 %) $ 1.05 $ 1.43 $ (0.38 ) (26.6 %) Return on average assets 1.31 % 1.32 % (0.01 %) (0.8 %) 1.79 % (0.48 %) (26.8 %) 1.32 % 1.69 % (0.37 %) (21.9 %) Return on average equity 9.06 % 9.57 % (0.51 %) (5.3 %) 14.76 % (5.70 %) (38.6 %) 9.31 % 14.12 % (4.81 %) (34.1 %) Efficiency ratio¹ 55.69 % 54.68 % 1.01 % 1.9 % 47.29 % 8.40 % 17.8 % 55.17 % 49.10 % 6.07 % 12.4 % Yield on interest-earning assets² 6.79 % 6.77 % 0.02 % 0.3 % 6.46 % 0.33 % 5.1 % 6.78 % 6.36 % 0.42 % 6.6 % Cost of funds 3.52 % 3.48 % 0.04 % 1.2 % 2.53 % 0.99 % 39.1 % 3.50 % 2.32 % 1.18 % 50.9 % Net interest margin² 3.77 % 3.77 % 0.00 % 0.0 % 4.23 % (0.46 %) (10.9 %) 3.77 % 4.30 % (0.53 %) (12.3 %) 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) June 30, March 31, $ % June 30, $ % 2024 2024 Change Change 2023 Change Change ASSETS Cash and due from banks $ 11,667 $ 11,612 $ 55 0.5 % $ 12,704 $ (1,037 ) (8.2 %) Interest-earning deposits at the FRB and other banks 101,415 181,366 (79,951 ) (44.1 %) 293,394 (191,979 ) (65.4 %) Investment securities¹ 73,051 59,143 13,908 23.5 % 66,400 6,651 10.0 % Loans held-for-sale 209,144 198,167 10,977 5.5 % 215,083 (5,939 ) (2.8 %) Loans held-for-investment 1,228,496 1,194,439 34,057 2.9 % 1,201,237 27,259 2.3 % Less: Allowance for credit losses ("ACL") (16,042 ) (16,048 ) 6 0.0 % (15,626 ) (416 ) (2.7 %) Loans held-for-investment, net 1,212,454 1,178,391 34,063 2.9 % 1,185,611 26,843 2.3 % Other real estate owned ("OREO") - - - - - - - Restricted stock investments 11,011 11,011 - - 11,011 - - Servicing assets 7,404 7,560 (156 ) (2.1 %) 8,426 (1,022 ) (12.1 %) Goodwill 2,185 2,185 - - 2,185 - - Intangible assets 235 245 (10 ) (4.1 %) 279 (44 ) (15.8 %) Other assets 26,343 23,581 2,762 11.7 % 24,537 1,806 7.4 % Total assets $ 1,654,909 $ 1,673,261 $ (18,352 ) (1.1 %) $ 1,819,630 $ (164,721 ) (9.1 %) LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing $ 281,243 $ 286,766 $ (5,523 ) (1.9 %) $ 426,333 $ (145,090 ) (34.0 %) Interest-bearing 1,059,146 1,074,198 (15,052 ) (1.4 %) 1,096,078 (36,932 ) (3.4 %) Total deposits 1,340,389 1,360,964 (20,575 ) (1.5 %) 1,522,411 (182,022 ) (12.0 %) FHLB advances and other borrowing 50,000 50,000 - - 50,000 - - Other liabilities 19,260 21,727 (2,467 ) (11.4 %) 23,956 (4,696 ) (19.6 %) Total liabilities 1,409,649 1,432,691 (23,042 ) (1.6 %) 1,596,367 (186,718 ) (11.7 %) Stockholders' Equity 245,260 240,570 4,690 1.9 % 223,263 21,997 9.9 % TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,654,909 $ 1,673,261 $ (18,352 ) (1.1 %) $ 1,819,630 $ (164,721 ) (9.1 %) CAPITAL RATIOS Leverage ratio Company 14.51 % 13.85 % 0.66 % 4.8 % 12.23 % 2.28 % 18.7 % Bank 14.45 % 13.84 % 0.61 % 4.4 % 12.20 % 2.25 % 18.5 % Common equity tier 1 risk-based capital ratio Company 18.36 % 18.67 % (0.31 %) (1.7 %) 17.08 % 1.28 % 7.5 % Bank 18.28 % 18.65 % (0.38 %) (2.0 %) 17.03 % 1.25 % 7.3 % Tier 1 risk-based capital ratio Company 18.36 % 18.67 % (0.31 %) (1.7 %) 17.08 % 1.28 % 7.5 % Bank 18.28 % 18.65 % (0.38 %) (2.0 %) 17.03 % 1.25 % 7.3 % Total risk-based capital ratio Company 19.59 % 19.92 % (0.34 %) (1.7 %) 18.32 % 1.27 % 6.9 % Bank 19.50 % 19.91 % (0.40 %) (2.0 %) 18.27 % 1.23 % 6.7 % Tangible book value per share $ 22.94 $ 22.49 $ 0.45 2.0 % $ 20.85 $ 2.09 10.0 % Loans Held for Investments-to-Deposit ("LHFITD") ratio 91.65 % 87.76 % 3.89 % 4.4 % 78.90 % 12.75 % 16.2 % Net Loan-to-Deposit ("LTD") ratio 106.06 % 101.15 % 4.91 % 4.9 % 92.00 % 14.06 % 15.3 % Nonperforming assets $ 5,797 $ 4,447 $ 1,350 30.4 % $ 684 $ 5,113 747.5 % Nonperforming assets as a % of loans held-for-investment 0.47 % 0.37 % 0.10 % 27.0 % 0.06 % 0.41 % 683.3 % ACL as a % of loans held-for-investment 1.31 % 1.34 % (0.03 %) (2.24 %) 1.30 % 0.01 % 0.8 % ¹ Includes AFS and HTM FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3 (Dollars in thousands, except per share amounts) Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 Interest income $ 27,755 $ 28,463 $ 29,624 $ 29,450 $ 28,664 Interest expense 12,391 12,655 12,462 11,442 9,930 Net interest income 15,364 15,808 17,162 18,008 18,734 Provision for credit losses 200 400 - - - Net interest income after provision for credit losses 15,164 15,408 17,162 18,008 18,734 Gain on sale of loans 1,064 1,489 838 419 1,952 Gain (loss) on sale of OREO - (1 ) - - - SBA servicing fee income, net 768 643 690 639 440 Service charges and other income 503 430 436 402 407 Noninterest income 2,335 2,561 1,964 1,460 2,799 Salaries and employee benefits 5,927 6,024 5,356 5,569 5,581 Occupancy and equipment 1,114 1,122 1,128 1,103 1,122 Marketing expense 403 402 250 475 409 Professional expense 440 412 360 443 436 Other expenses 1,972 2,084 2,363 2,579 2,635 Noninterest expense 9,856 10,044 9,457 10,169 10,183 Income before income tax expense 7,643 7,925 9,669 9,299 11,350 Income tax expense 2,163 2,253 2,670 2,630 3,248 Net income $ 5,480 $ 5,672 $ 6,999 $ 6,669 $ 8,102 Effective tax rate 28.3 % 28.4 % 27.6 % 28.3 % 28.6 % Outstanding number of shares 10,588,136 10,588,136 10,588,136 10,588,136 10,588,136 Weighted average shares for basic EPS 10,588,136 10,588,136 10,588,136 10,588,136 10,588,136 Weighted average shares for diluted EPS 10,588,136 10,588,688 10,588,937 10,594,155 10,591,351 Basic EPS $ 0.51 $ 0.54 $ 0.66 $ 0.63 $ 0.77 Diluted EPS $ 0.51 $ 0.54 $ 0.66 $ 0.63 $ 0.76 FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4 (Dollars in thousands) At or for the Three Months Ended June 30, March 31, December 31, September 30, June 30, 2024 2023 2023 2023 2023 Salaries and benefits $ 5,927 $ 6,024 $ 5,356 $ 5,569 $ 5,581 FTE at the end of period 172 168 169 172 165 Average FTE during the period 171 169 169 168 164 Salaries and benefits/average FTE¹ $ 139 $ 143 $ 126 $ 131 $ 137 Salaries and benefits/average assets¹ 1.42 % 1.41 % 1.18 % 1.22 % 1.23 % Noninterest expense/average assets¹ 2.36 % 2.35 % 2.08 % 2.22 % 2.25 % 1 Annualized FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5 (Dollars in thousands) June 30, March 31, December 31, September 30, June 30, 2024 2024 2023 2023 2023 ASSETS Cash and due from banks $ 11,667 $ 11,612 $ 14,282 $ 11,188 $ 12,704 Interest-earning deposits at the FRB and other banks 101,415 181,366 233,255 335,016 293,394 Investment securities 73,051 59,143 59,883 61,617 66,400 Loans held-for-sale 209,144 198,167 218,258 219,355 215,083 Loans held-for-investment 1,228,496 1,194,439 1,204,009 1,201,230 1,201,237 Less: Allowance for credit losses (16,042 ) (16,048 ) (15,291 ) (15,284 ) (15,626 ) Loans held-for-investment, net 1,212,454 1,178,391 1,188,718 1,185,946 1,185,611 Other real estate owned - - 55 55 - Restricted stock investments 11,011 11,011 11,011 11,011 11,011 Servicing assets 7,404 7,560 7,673 7,873 8,426 Goodwill 2,185 2,185 2,185 2,185 2,185 Intangible assets 235 245 255 267 279 Other assets 26,343 23,581 24,838 24,799 24,537 Total assets $ 1,654,909 $ 1,673,261 $ 1,760,413 $ 1,859,312 $ 1,819,630 LIABILITIES AND STOCKHOLDERS' EQUITY Noninterest-bearing $ 281,243 $ 286,766 $ 305,923 $ 406,033 $ 426,333 Interest-bearing 1,059,146 1,074,198 1,147,662 1,143,257 1,096,078 Total deposits 1,340,389 1,360,964 1,453,585 1,549,290 1,522,411 FHLB advances 50,000 50,000 50,000 50,000 50,000 Other liabilities 19,260 21,727 21,114 31,141 23,956 Total liabilities 1,409,649 1,432,691 1,524,699 1,630,431 1,596,367 Stockholders' Equity 245,260 240,570 235,714 228,881 223,263 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,654,909 $ 1,673,261 $ 1,760,413 $ 1,859,312 $ 1,819,630 FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6 (Dollars in thousands) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Balance % Balance % Balance % Balance % Balance % Construction $ 33,918 2.8 % $ 37,216 3.1 % $ 34,886 2.9 % $ 30,924 2.6 % $ 20,106 1.7 % Commercial real estate 1,035,425 84.3 % 1,005,765 84.2 % 1,010,495 83.9 % 1,005,735 83.7 % 1,014,785 84.5 % Commercial and industrial 108,742 8.9 % 101,784 8.5 % 108,123 9.0 % 113,374 9.4 % 114,106 9.4 % Home mortgage 44,987 3.7 % 44,389 3.7 % 44,920 3.7 % 45,452 3.8 % 45,987 3.8 % Consumer 782 0.1 % 668 0.1 % 630 0.1 % 616 0.1 % 1,074 0.1 % Gross loans held-for-investment 1,223,854 99.6 % 1,189,822 99.6 % 1,199,054 99.6 % 1,196,101 99.6 % 1,196,058 99.6 % Deferred loan fees/costs, net 4,642 0.4 % 4,617 0.4 % 4,955 0.4 % 5,129 0.4 % 5,179 0.4 % Loans held-for-investment $ 1,228,496 100.0 % $ 1,194,439 100.0 % $ 1,204,009 100.0 % $ 1,201,230 100.0 % $ 1,201,237 100.0 % Loans held-for-sale $ 209,144 $ 198,167 $ 218,258 $ 219,355 $ 215,083 Total loans receivable $ 1,437,640 $ 1,392,606 $ 1,422,267 $ 1,420,585 $ 1,416,320 FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7 (Dollars in thousands) Three Months Ended Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2024 2024 2023 2023 2023 2024 2023 SBA loans held-for-sale at beginning of the quarter/year $ 198,167 $ 218,258 $ 219,355 $ 215,083 $ 243,753 $ 218,258 $ 230,431 SBA loans originated/transferred from/to held-for-investment during the quarter/year 34,366 14,589 27,022 16,260 18,273 48,955 35,163 SBA loans sold during the quarter/year (19,508 ) (28,164 ) (21,749 ) (9,245 ) (42,437 ) (47,672 ) (42,437 ) SBA loans principal paydown/payoff, net of advance (3,881 ) (6,516 ) (6,370 ) (2,743 ) (4,506 ) (10,397 ) (8,074 ) SBA loans held-for-sale at end of the quarter/year $ 209,144 $ 198,167 $ 218,258 $ 219,355 $ 215,083 $ 209,144 $ 215,083 Gain on sale of SBA loans $ 1,064 $ 1,489 $ 838 $ 419 $ 1,952 $ 2,553 $ 1,952 Premium on sale (weighted average) 8.3 % 8.4 % 6.8 % 8.3 % 6.8 % 8.4 % 6.8 % SBA loan production $ 45,126 $ 18,089 $ 37,821 $ 24,270 $ 24,013 $ 63,215 $ 45,732 FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8 (Dollars in thousands) Three Months Ended Six Months Ended June 30, March 31, December 31, September 30, June 30, June 30, June 30, 2024 2024 2023 2023 2023 2024 2023 SBA servicing assets @ beginning of the quarter/year $ 7,560 $ 7,673 $ 7,873 $ 8,426 $ 8,528 $ 7,673 $ 9,232 Newly added SBA servicing assets from SBA loans sold 395 555 430 182 806 950 806 Regular quarterly/annual servicing assets amortization (335 ) (332 ) (356 ) (371 ) (379 ) (667 ) (782 ) SBA servicing assets amortized from SBA loans paid off/charged off (216 ) (336 ) (274 ) (364 ) (529 ) (552 ) (830 ) Subtotal before impairment 7,404 7,560 7,673 7,873 8,426 7,404 8,426 Reversal of valuation allowance on servicing assets - - - - - - - SBA servicing assets @ the end of the quarter/year $ 7,404 $ 7,560 $ 7,673 $ 7,873 $ 8,426 $ 7,404 $ 8,426 FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9 (Dollars in thousands) June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Balance % Balance % Balance % Balance % Balance % Noninterest-bearing demand $ 281,243 21.0 % $ 286,766 21.1 % $ 305,923 21.1 % $ 406,033 26.2 % $ 426,333 28.0 % Interest-bearing demand 7,901 0.6 % 6,709 0.5 % 7,504 0.5 % 6,395 0.4 % 9,056 0.6 % NOW & MMDA 240,951 18.0 % 229,642 16.9 % 237,548 16.3 % 227,283 14.7 % 210,429 13.8 % Savings 80,360 6.0 % 84,999 6.2 % 88,689 6.1 % 78,969 5.1 % 62,324 4.1 % TCDs of $250K and under 295,109 22.0 % 299,944 22.0 % 315,920 21.7 % 312,704 20.2 % 298,520 19.6 % TCDs of $250K over 314,119 23.4 % 339,482 25.0 % 353,866 24.4 % 373,345 24.1 % 368,262 24.2 % Wholesale deposits 120,706 9.0 % 113,422 8.3 % 144,135 9.9 % 144,561 9.3 % 147,487 9.7 % Total Deposits $ 1,340,389 100.0 % $ 1,360,964 100.0 % $ 1,453,585 100.0 % $ 1,549,290 100.0 % $ 1,522,411 100.0 % Recap: Noninterest-bearing demand $ 281,243 21.0 % $ 286,766 21.1 % $ 305,923 21.0 % $ 406,033 26.2 % $ 426,333 28.0 % Interest-bearing demand 7,901 0.6 % 6,709 0.5 % 7,504 0.5 % 6,395 0.4 % 9,056 0.6 % NOW & MMDA 217,339 16.2 % 229,642 16.9 % 237,548 16.3 % 227,283 14.7 % 210,429 13.8 % Savings 80,360 6.0 % 84,999 6.2 % 88,689 6.1 % 78,969 5.1 % 62,324 4.1 % TCDs of $250K and under 295,109 22.0 % 299,944 22.0 % 315,920 21.7 % 312,704 20.2 % 298,520 19.6 % Core Deposits 881,952 65.8 % 908,060 66.7 % 955,584 65.7 % 1,031,384 66.6 % 1,006,662 66.1 % TCDs of $250K over 314,119 23.4 % 339,482 24.9 % 353,866 24.3 % 373,345 24.1 % 368,262 24.2 % ICS MMDA 23,612 1.8 % Wholesale deposits 120,706 9.0 % 113,422 8.3 % 144,135 9.9 % 144,561 9.3 % 147,487 9.7 % Noncore Deposits 458,437 34.2 % 452,904 33.3 % 498,001 34.3 % 517,906 33.4 % 515,749 33.9 % Total Deposits $ 1,340,389 100.0 % $ 1,360,964 100.0 % $ 1,453,585 100.0 % $ 1,549,290 100.0 % $ 1,522,411 100.0 % FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10 (Dollars in thousands) 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 2024 2024 2023 2023 2023 Allowance for Credit Losses Balance at beginning of period $ 16,048 $ 15,291 $ 15,284 $ 15,626 $ 15,627 CECL transition provision - - - - - Provision for credit losses 200 743 - - - Charge-offs (257 ) (2 ) (350 ) (11 ) Recoveries 51 14 9 8 10 Balance at the end of period $ 16,042 $ 16,048 $ 15,291 $ 15,284 $ 15,626 Nonperforming Assets:¹ Over 90 days still accruing $ - $ 1,605 $ 399 $ 2 $ 39 Nonaccrual loans 5,797 2,842 2,030 616 645 Total nonperforming loans 5,797 4,447 2,429 618 684 Other real estate owned $ - - 55 55 - Total nonperforming assets $ 5,797 $ 4,447 $ 2,484 $ 673 $ 684 Classified Assets:¹ Substandard $ 12,762 $ 11,912 $ 11,063 $ 10,105 $ 10,491 Doubtful - - - - - Loss Total classified loans $ 12,762 $ 11,912 $ 11,063 $ 10,105 $ 10,491 Other real estate owned $ - - 55 55 - Total classified assets $ 12,762 $ 11,912 $ 11,118 $ 10,160 $ 10,491 Performing modified loans:¹ $ 464 $ 3,811 $ 3,336 $ 3,336 $ 3,336 Delinquent Loans:¹ Loans 30-89 days past due $ 8,613 $ 16,907 $ 5,981 $ 10,620 $ 4,420 90 days or more past due and still accruing - 1,605 399 2 39 Nonaccrual 5,797 2,842 2,030 616 645 Total delinquent loans $ 14,410 $ 21,354 $ 8,410 $ 11,238 $ 5,104 Asset Quality Ratios: Net (recoveries) charge-offs to average loans² 0.06 % 0.00 % 0.00 % 0.10 % 0.00 % Nonaccrual loans to loans held-for-investment 0.47 % 0.24 % 0.17 % 0.05 % 0.05 % Nonperforming loans to loans held-for-investment 0.47 % 0.37 % 0.20 % 0.05 % 0.06 % Nonperforming assets to total assets 0.35 % 0.27 % 0.14 % 0.04 % 0.04 % Classified loans to loans held-for-investment 1.04 % 1.00 % 0.92 % 0.84 % 0.87 % Classified loans to Tier 1 and ACL 4.93 % 4.69 % 4.45 % 4.18 % 4.44 % Classified assets to total assets 0.77 % 0.71 % 0.63 % 0.55 % 0.58 % Classified assets to Tier 1 and ACL 4.93 % 4.69 % 4.47 % 4.20 % 4.44 % ACL to loans held-for-investment 1.31 % 1.34 % 1.27 % 1.27 % 1.30 % ACL to nonaccrual loans 276.73 % 564.67 % 753.25 % 2481.17 % 2422.64 % ACL to nonperforming loans 276.73 % 360.87 % 629.52 % 2473.14 % 2284.50 % ACL to nonperforming assets 276.73 % 360.87 % 615.58 % 2271.03 % 2284.50 % Texas ratio ³ 2.24 % 1.75 % 1.00 % 0.28 % 0.29 % ¹ Net of SBA guaranteed balance ² Includes loans held-for-sale ³ Nonperforming assets divided by tangible common equity and ACL Allowance for Credit Losses on Off-Balance Sheet Items: Balance at beginning of period $ 324 $ 667 $ 667 $ 667 $ 667 Provision for credit losses on off-balance sheet items (343 ) - - - Balance at the end of period $ 324 $ 324 $ 667 $ 667 $ 667 Loans held-for-sale 209,144 198,167 218,258 219,355 215,083 Loans held-for-investment 1,228,496 1,194,439 1,204,009 1,201,230 1,201,237 Loans receivable 1,437,640 1,392,606 1,422,267 1,420,585 1,416,320 Total assets 1,654,909 1,673,261 1,760,413 1,859,312 1,819,630 Tier 1 and ACL 258,882 254,188 248,565 241,713 236,425 Tangible Common Equity 242,840 238,140 233,274 226,429 220,799 ACL $ 16,042 $ 16,048 $ 15,291 $ 15,284 $ 15,626 Nonperforming assets to loans held-for-investment 0.47 % 0.37 % 0.21 % 0.1 % 0.06 % FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11 Well Capitalized Adequately Capitalized June 30, March 31, December 31, September 30, June 30, Regulatory BASEL III Requirement Fully Phased In 2024 2024 2023 2023 2023 Leverage ratio Company N/A N/A 14.51 % 13.85 % 12.98 % 12.53 % 12.23 % Bank 5.00 % 4.00 % 14.45 % 13.84 % 12.96 % 12.50 % 12.20 % Common equity tier 1 risk-based capital ratio Company N/A N/A 18.36 % 18.67 % 18.08 % 17.61 % 17.08 % Bank 6.50 % 7.00 % 18.28 % 18.65 % 18.05 % 17.57 % 17.03 % Tier 1 risk-based capital ratio Company N/A N/A 18.36 % 18.67 % 18.08 % 17.61 % 17.08 % Bank 8.00 % 8.50 % 18.28 % 18.65 % 18.05 % 17.57 % 17.03 % Total risk-based capital ratio Company N/A N/A 19.59 % 19.92 % 19.30 % 18.83 % 18.32 % Bank 10.00 % 10.50 % 19.50 % 19.91 % 19.27 % 18.79 % 18.27 % Tangible common equity/total assets 14.70 % 14.25 % 13.27 % 12.19 % 12.15 % Tangible common equity per share $ 22.94 $ 22.49 $ 22.03 $ 21.39 $ 20.85 FIVE-QUARTER MARGIN ANALYSIS (Unaudited) - Table 12 (Dollars in thousands) Three Months Ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Number of Days in the Period INTEREST-EARNING ASSETS Loans Receivable¹ $ 1,418,458 $ 24,887 7.06 % $ 1,415,924 $ 24,906 7.07 % $ 1,410,971 $ 24,926 7.01 % $ 1,417,148 $ 24,734 6.92 % $ 1,444,608 $ 24,661 6.85 % Investment securities ² 70,052 723 4.15 % 59,554 575 3.88 % 60,094 563 3.72 % 64,587 577 3.54 % 67,958 595 3.51 % Interest-earning deposits at the FRB and other banks 146,956 1,995 5.46 % 207,155 2,817 5.47 % 288,769 3,973 5.46 % 293,081 3,994 5.41 % 258,236 3,296 5.12 % Other earning assets 11,011 200 7.31 % 11,011 214 7.82 % 11,011 212 7.64 % 11,011 196 7.06 % 10,825 163 6.04 % Total interest-earning assets ² 1,646,477 27,805 6.79 % 1,693,644 28,512 6.77 % 1,770,845 29,674 6.65 % 1,785,827 29,501 6.55 % 1,781,627 28,715 6.46 % NONINTEREST-EARNING ASSETS Cash and due from banks 12,907 12,172 12,567 13,045 12,792 Other noninterest-earning assets 33,263 31,967 32,985 33,331 34,060 Total noninterest-earning assets 46,170 44,139 45,552 46,376 46,852 Less: Allowance for credit losses (16,058 ) (15,322 ) (15,291 ) (15,622 ) (15,627 ) TOTAL ASSETS $ 1,676,589 $ 1,722,461 $ 1,801,106 $ 1,816,581 $ 1,812,852 INTEREST-BEARING DEPOSITS Interest-bearing demand $ 11,864 $ 6 0.20 % $ 12,680 $ 6 0.19 % $ 12,657 $ 7 0.22 % $ 12,347 $ 6 0.19 % $ 14,522 $ 7 0.19 % Money market 230,261 2,272 3.97 % 229,441 2,285 4.01 % 222,289 2,158 3.85 % 211,152 1,907 3.58 % 192,872 1,414 2.94 % Savings 82,215 700 3.42 % 84,854 724 3.43 % 82,403 664 3.20 % 70,579 494 2.78 % 63,786 324 2.04 % Time deposits 759,954 9,296 4.92 % 801,122 9,523 4.78 % 824,900 9,515 4.58 % 820,335 8,916 4.31 % 839,198 8,068 3.86 % Total interest-bearing deposits 1,084,294 12,274 4.55 % 1,128,097 12,538 4.47 % 1,142,249 12,344 4.29 % 1,114,413 11,323 4.03 % 1,110,378 9,813 3.54 % Borrowings 50,013 117 0.94 % 50,000 117 0.94 % 50,001 118 0.94 % 50,001 119 0.94 % 50,000 117 0.94 % Total interest-bearing liabilities 1,134,307 12,391 4.39 % 1,178,097 12,655 4.32 % 1,192,250 12,462 4.15 % 1,164,414 11,442 3.90 % 1,160,378 9,930 3.43 % Noninterest-bearing deposits 279,765 284,867 350,656 397,791 411,432 Other liabilities 19,287 21,112 25,602 27,519 20,934 Stockholders' equity 243,230 238,385 232,598 226,857 220,108 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,676,589 $ 1,722,461 $ 1,801,106 $ 1,816,581 $ 1,812,852 Net interest income² $ 15,414 $ 15,857 $ 17,212 $ 18,059 $ 18,785 Net interest spread 2.40 % 2.45 % 2.50 % 2.65 % 3.03 % Effect of noninterest-bearing sources 1.37 % 1.32 % 1.36 % 1.36 % 1.20 % Net interest margin² 3.77 % 3.77 % 3.86 % 4.01 % 4.23 % Cost of deposits $ 1,364,059 $ 12,274 3.62 % $ 1,412,964 $ 12,538 3.57 % $ 1,492,905 $ 12,344 3.28 % $ 1,512,204 $ 11,323 2.97 % $ 1,521,810 $ 9,813 2.59 % Cost of funds $ 1,414,072 $ 12,391 3.52 % $ 1,462,964 $ 12,655 3.48 % $ 1,542,906 $ 12,462 3.20 % $ 1,562,205 $ 11,442 2.91 % $ 1,571,810 $ 9,930 2.53 % ' Loan held-for-investment, plus loans held-for-sale ² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13 (Dollars in thousands) Three Months Ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Contractual yield $ 24,271 6.88 % $ 24,138 6.86 % $ 24,235 6.81 % $ 23,932 6.70 % $ 23,767 6.60 % SBA discount accretion 736 0.21 % 926 0.26 % 845 0.24 % 921 0.25 % 1,124 0.31 % Prepayment penalties and late fees 36 0.01 % 67 0.01 % 40 0.01 % 18 0.01 % 60 0.02 % Amortization of net deferred costs (156 ) -0.04 % (225 ) -0.06 % (194 ) -0.05 % (137 ) -0.04 % (290 ) -0.08 % As reported yield on loans $ 24,887 7.06 % $ 24,906 7.07 % $ 24,926 7.01 % $ 24,734 6.92 % $ 24,661 6.85 % MARGIN ANALYSIS (Unaudited) - Table 14 (Dollars in thousands) Six Months Ended June 30, 2024 June 30, 2023 Avg Balance Interest Yield Avg Balance Interest Yield Number of Days in the Period INTEREST-EARNING ASSETS Loans Receivable ¹ $ 1,417,191 $ 49,793 7.07 % $ 1,473,184 $ 49,040 6.71 % Investment securities ² 64,803 1,298 4.03 % 69,046 1,172 3.42 % Interest-earning deposits at the FRB and other banks 177,056 4,812 5.47 % 224,651 5,474 4.91 % Other earning assets 11,011 414 7.56 % 10,475 327 6.30 % Total interest-earning assets ² 1,670,061 56,317 6.78 % 1,777,356 56,013 6.36 % NONINTEREST-EARNING ASSETS Cash and due from banks 12,540 13,523 Other noninterest-earning assets 32,122 35,296 Total noninterest-earning assets 44,662 48,819 Less: Allowance for credit losses (15,690 ) (15,590 ) TOTAL ASSETS $ 1,699,033 $ 1,810,585 INTEREST-BEARING DEPOSITS Interest-bearing demand $ 12,271 $ 12 0.20 % $ 16,261 $ 16 0.20 % Money market 229,851 4,557 3.99 % 212,261 2,883 2.74 % Savings 83,534 1,424 3.43 % 59,704 488 1.65 % Time deposits 780,539 18,819 4.85 % 818,251 14,478 3.57 % Total interest-bearing deposits 1,106,195 24,812 4.51 % 1,106,477 17,865 3.26 % Borrowings 50,007 234 0.9 % 50,000 233 0.94 % Total interest-bearing liabilities 1,156,202 25,046 4.36 % 1,156,477 18,098 3.16 % Noninterest-bearing deposits 282,316 418,273 Other liabilities 19,707 18,904 Stockholders' equity 240,808 216,931 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,699,033 $ 1,810,585 Net interest income² $ 31,271 $ 37,915 Net interest spread 2.42 % 3.20 % Effect of noninterest-bearing sources 1.35 % 1.10 % Net interest margin² 3.77 % 4.30 % Cost of deposits $ 1,388,511 $ 24,812 3.59 % $ 1,524,750 $ 17,865 2.36 % Cost of funds $ 1,438,518 $ 25,046 3.50 % $ 1,574,750 $ 18,098 2.32 % ¹ Loan held-for-investment, plus loans held-for-sale ² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 15 (Dollars in thousands) Six Months Ended June 30, 2024 June 30, 2023 Amount Yield Amount Yield Contractual yield $ 48,409 6.87 % $ 47,410 6.49 % SBA discount accretion 1,662 0.24 % 2,061 0.28 % Prepayment penalties and late fees 103 0.01 % 90 0.01 % Amortization of net deferred costs (381 ) -0.05 % (521 ) -0.07 % As reported yield on loans $ 49,793 7.07 % $ 49,040 6.71 % View source version on businesswire.com: https://www.businesswire.com/news/home/20240725152164/en/