CBB Bancorp, Inc. Reports Fourth Quarter 2023 Financial Results

LOS ANGELES, January 26, 2024--(BUSINESS WIRE)--CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank, doing business as "CBB Bank" (the "Bank"), announced today net income of $7.0 million for the fourth quarter 2023 or $0.66 per diluted share, an increase of 5.0% compared to $6.7 million, or $0.63 per diluted share, in the prior quarter and a decrease of 4.5% compared to $7.3 million, or $0.70 per diluted share, in the same period last year.

Additionally, CBB reported net income for the year ended December 31, 2023 of $28.9 million, or $2.73 per diluted share, an increase of 3.4% from the $27.9 million, or $2.68 per diluted share, of net income for the year ended December 31, 2022.

OVERALL RESULTS

Net income for the fourth quarter 2023 increased from the prior quarter primarily due to higher gain on sale of SBA loans and lower noninterest expenses. The return on average assets for the fourth quarter 2023 was 1.54% compared to 1.46% for the third quarter 2023 and 1.64% for the fourth quarter 2022. The return on average equity for the fourth quarter 2023 was 11.94%, compared to 11.66% for the third quarter 2023 and 14.04% for the fourth quarter 2022. The net interest margin for the fourth quarter 2023 was 3.86%, compared to 4.01% for the third quarter 2023 and 4.59% for the fourth quarter 2022. The efficiency ratio for the fourth quarter 2023 was 49.45%, compared to 52.23% for the third quarter 2023 and 51.41% for the fourth quarter 2022.

James Hong, President and CEO, commented, "We are pleased to announce that the Bank’s performance was solid in 2023 with strong liquidity, credit, and capital metrics. While the Bank has sold comparatively less SBA loans in 2023 than in 2022, the higher yield on SBA loans retained by the Bank contributed to a comparatively higher net interest income contributing to overall profitability."

INCOME STATEMENT

Net Interest Income

Net interest income for the fourth quarter 2023 was $17.2 million, a decrease of $846 thousand, or 4.7%, from the third quarter 2023, and a decrease of $2.9 million, or 14.5%, from the fourth quarter 2022. The decrease in net interest income compared with both the third quarter 2023 and the fourth quarter 2022 was primarily due to the impact of relatively higher increases in interest expenses on deposits.

Net Interest Margin

The net interest margin for the fourth quarter 2023 was 3.86%, compared to 4.01% for the third quarter 2023 and 4.59% for the fourth quarter 2022. The decrease in the net interest margin from the prior quarter and from the same quarter of 2022 is due primarily to the rising cost of funds. The cost of funds for the fourth quarter 2023 increased to 3.20% compared to 2.91% for the third quarter 2023 and 1.19% for the fourth quarter 2022.

Provision for Credit Losses

No provision for credit losses was recorded for the fourth or the third quarter 2023 or for the fourth quarter 2022. Please refer to financial tables in this press release for additional information and trends.

Noninterest Income

Noninterest income in the fourth quarter 2023 was $2.0 million, an increase of $504 thousand compared to $1.46 million for the third quarter 2023, and an increase of $1.0 million compared to $0.95 million in the fourth quarter 2022. The quarter-over-quarter increase in noninterest income was primarily the result of higher gain on sale of loans. The Bank sold $21.7 million in SBA loans with an average premium of 6.7% during the fourth quarter 2023 compared to sale of $9.2 million in SBA loans with an average premium of 8.3% during the third quarter 2023. There was no sale of loans during the fourth quarter 2022.

Noninterest Expense

Noninterest expense for the fourth quarter 2023 was $9.5 million, compared to $10.2 million for the third quarter 2023 and $10.8 million for the fourth quarter 2022. Total noninterest expenses for the full year 2023 were $40.1 million compared to $43.2 million for the full year 2022.

Salaries and employee benefits expenses totaled $5.4 million for the fourth quarter 2023 compared to $5.6 million for the third quarter 2023 and $6.2 million for the fourth quarter 2022. Salaries and employee benefits expenses for 2023 were $22.6 million compared to $27.2 million in 2022.

Income Taxes

The Company’s effective tax rate for fourth quarter 2023 was 27.6% compared to 28.3% for third quarter 2023 and 28.2% for fourth quarter 2022. The effective tax rate for the year 2023 was 28.2% compared to 28.3% for 2022.

BALANCE SHEET

Investment Securities

Investment securities were $59.9 million at December 31, 2023, a decrease of $1.7 million or 2.8% at September 30, 2023, and a decrease of $12.7 million or 17.5% from December 31, 2022. The decreases were due to principal paydowns and an absence of portfolio additions during 2023. The unrealized losses on available for sale investments were approximately $0.4 million at December 31, 2023, $1.1 million at September 30, 2023, and $1.1 million at December 31, 2022, net of taxes. 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 December 31, 2023, was $1.4 billion, an increase of $1.7 million, or 0.1% from September 30, 2023, and a decrease of $93.4 million, or 6.2%, from December 31, 2022. The slight rise in loans receivable since last quarter, paired with the reduction from the previous year, reflects the challenging loan origination landscape, influenced by diminished demand amid the prevailing high-interest rate environment.

Allowance for Credit Losses and Asset Quality

The allowance for credit losses at December 31, 2023 was $15.3 million or 1.27% of loans held-for-investment, compared to $15.6 million at September 30, 2023, or 1.27% of loans held-for-investment, and compared to $15.5 million at December 31, 2022, or 1.21% of total loans held-for-investment. Total Nonperforming assets at December 31, 2023 was $2.5 million, compared to $0.7 million at September 30, 2023, and $6.8 million at December 31, 2022. The coverage ratio of allowance for credit losses to nonperforming assets exceeded 615% at December 31, 2023.

SBA Loans Held-for-Sale

Total SBA loans held-for-sale at December 31, 2023, was $218.3 million, compared to $219.4 million at September 30 2023, and $230.4 million at December 31, 2022. We continue to assess SBA loan market premiums and plan to sell loans when it is advantageous to do so. See comments under "Noninterest Income," and Table 7 for additional SBA loan origination and sale data.

Deposits

Total deposits were $1.5 billion at December 31, 2023, down $95.7 million, or 6.2%, from September 30, 2023, and down $84.7 million, or 5.5%, from December 31, 2022. DDAs were 21.6% of total deposits at December 31, 2023, compared to 26.6% at September 30, 2023, and 30.0% at December 31, 2022. NOW and MMDA deposits comprised 16.3% of total deposits at December 31, 2023 compared to 14.7% at September 30, 2023, and 17.9% at December 31, 2022. The quarter-over-quarter and year-over-year declines in DDAs can be attributed to the higher interest rate environment. Depositors were eager to capitalize on the rising interest rates, leading to a decrease in DDAs and a simultaneous increase in CD and MMDA balances.

As of December 31, 2023, the average time deposits increased $4.6 million, or 0.6%, quarter-over-quarter, but increased $199.1 million, or 31.81%, from December 31, 2022. The change in deposit composition reflects depositors’ preferences for higher paying term deposits over money market and checking accounts as rates have risen significantly since March 2022. The primary reason for the decrease in noninterest-bearing deposits during 2023 was a decline in escrow-related deposits as the higher interest rate environment caused a significant slowdown in business activities for that sector.

Borrowings

The Bank has maintained $50.0 million of Federal Home Loan Bank advances since September 30, 2022. The blended cost of FHLB advances was 0.94% as of December 31, 2023.

Capital

Stockholders’ equity was $235.7 million at December 31, 2023 representing an increase of $6.8 million, or 3.0%, from $228.9 million at September 30, 2023. Tangible book value per share at December 31, 2023, was $22.03, compared with $21.39 at September 30, 2023, an increase of $0.64, or 3.0%, per share.

Each of the Company’s and the Bank’s regulatory capital ratios increased at December 31, 2023 when compared to September 30, 2023 and December 31, 2022. Capital ratios continue to exceed the minimum levels required to be considered "Well Capitalized" under the applicable regulatory capital rules and in compliance with the fully phased-in Basel III requirements as shown on Table 11 in this press release.

The Common Equity Tier 1 Risked-Based Capital Ratios at December 31, 2023, were 18.08% and 18.05% for the Company and the Bank, respectively, and Total Capital Ratios were 19.30% and 19.27% for the Company and the Bank, respectively. The Common Equity Tier 1 Risked-Based Capital Ratios at December 31, 2022, were 14.92% and 14.87% for the Company and the Bank, respectively, and Total Capital Ratios were 16.08% and 16.03% 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 December 31, 2023, 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 "Investors Relations" to see the 4Q 2023 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																								Twelve Months Ended
		December 31,				September 30,				$			%			December 31,				$			%			December 31,				December 31,				$			%
			2023				2023			Change			Change				2022			Change			Change				2023				2022			Change			Change
Interest income		$	29,624			$	29,450			$	174		0.6	%		$	24,744			$	4,880		19.7	%		$	114,986			$	80,917			$	34,069		42.1	%
Interest expense			12,462				11,442				1,020		8.9	%			4,677				7,785		166.5	%			42,002				9,762				32,240		330.3	%
Net interest income			17,162				18,008				(846	)	(4.7	%)			20,067				(2,905	)	(14.5	%)			72,984				71,155				1,829		2.6	%
Provision for credit losses			-				-				-		-				-				-		100.0	%			-				1,343				(1,343	)	(100.0	%)
Net interest income after provision for credit losses			17,162				18,008				(846	)	(4.7	%)			20,067				(2,905	)	(14.5	%)			72,984				69,812				3,172		4.5	%
Gain on sale of loans			838				419				419		100.0	%			-				838		100.0	%			3,209				7,966				(4,757	)	(59.7	%)
SBA servicing fee income, net			690				639				51		8.0	%			491				199		40.5	%			2,423				2,447				(24	)	(1.0	%)
Service charges and other income			436				402				34		8.5	%			457				(21	)	(4.6	%)			1,643				1,935				(292	)	(15.1	%)
Noninterest income			1,964				1,460				504		34.5	%			948				1,016		107.2	%			7,275				12,348				(5,073	)	(41.1	%)
Salaries and employee benefits			5,356				5,569				(213	)	(3.8	%)			6,233				(877	)	(14.1	%)			22,585				27,153				(4,568	)	(16.8	%)
Occupancy and equipment			1,128				1,103				25		2.3	%			1,133				(5	)	(0.4	%)			4,477				4,485				(8	)	(0.2	%)
Marketing expense			250				475				(225	)	(47.4	%)			434				(184	)	(42.4	%)			1,508				1,919				(411	)	(21.4	%)
Professional expense			360				443				(83	)	(18.7	%)			418				(58	)	(13.9	%)			1,693				1,869				(176	)	(9.4	%)
Merger related expense			1				5				(4	)	(80.0	%)			7				(6	)	(85.7	%)			17				177				(160	)	(90.4	%)
Other expenses			2,362				2,574				(212	)	(8.2	%)			2,579				(217	)	(8.4	%)			9,804				7,614				2,190		28.8	%
Noninterest expense			9,457				10,169				(712	)	(7.0	%)			10,804				(1,347	)	(12.5	%)			40,084				43,217				(3,133	)	(7.2	%)
Income before income tax provision			9,669				9,299				370		4.0	%			10,211				(542	)	(5.3	%)			40,175				38,943				1,232		3.2	%
Income tax provision			2,670				2,630				40		1.5	%			2,882				(212	)	(7.4	%)			11,315				11,023				292		2.6	%
Net income		$	6,999			$	6,669			$	330		4.9	%		$	7,329			$	(330	)	(4.5	%)		$	28,860			$	27,920			$	940		3.4	%
Effective tax rate			27.6	%			28.3	%			(0.7	%)	(2.4	%)			28.2	%			(0.6	%)	(2.2	%)			28.2	%			28.3	%			(0.1	%)	(0.5	%)
Outstanding number of shares			10,588,136				10,588,136				-		-				10,569,601				18,535		0.2	%			10,588,136				10,569,601				18,535		0.2	%
Weighted average shares for basic EPS			10,588,136				10,588,136				-		-				10,569,601				18,535		0.2	%			10,585,191				10,421,546				163,645		1.6	%
Weighted average shares for diluted EPS			10,588,937	...			10,594,155				(5,218	)	(0.0	%)			10,600,053				(11,116	)	(0.1	%)			10,594,055				10,509,800				84,255		0.8	%
Basic EPS		$	0.66			$	0.63			$	0.03		4.8	%		$	0.70			$	(0.04	)	(5.7	%)		$	2.73			$	2.68			$	0.05		1.9	%
Diluted EPS		$	0.66			$	0.63			$	0.03		4.8	%		$	0.70			$	(0.04	)	(5.7	%)		$	2.72			$	2.66			$	0.06		2.3	%
Return on average assets			1.54	%			1.46	%			0.08	%	5.5	%			1.64	%			(0.10	%)	(6.1	%)			1.59	%			1.56	%			0.03	%	1.9	%
Return on average equity			11.94	%			11.66	%			0.28	%	2.4	%			14.04	%			(2.10	%)	(15.0	%)			12.95	%			14.09	%			(1.14	%)	(8.1	%)
Efficiency ratio¹			49.45	%			52.23	%			(2.78	%)	(5.3	%)			51.41	%			(1.96	%)	(3.8	%)			49.94	%			51.76	%			(1.82	%)	(3.5	%)
Yield on interest-earning assets²			6.65	%			6.55	%			0.10	%	1.5	%			5.66	%			0.99	%	17.5	%			6.48	%			4.64	%			1.84	%	39.7	%
Cost of funds			3.20	%			2.91	%			0.29	%	10.0	%			1.19	%			2.01	%	168.9	%			2.68	%			0.62	%			2.06	%	332.3	%
Net interest margin²			3.86	%			4.01	%			(0.15	%)	(3.7	%)			4.59	%			(0.73	%)	(15.9	%)			4.12	%			4.08	%			0.04	%	1.0	%
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)
		December 31,				September 30,				$			%			December 31,				$			%
			2023				2023			Change			Change				2022			Change			Change
ASSETS
	Cash and due from banks	$	14,282			$	11,188			$	3,094		27.7	%		$	20,134			$	(5,852	)	(29.1	%)
	Interest-earning deposits at the FRB and other banks		233,255				335,016				(101,761	)	(30.4	%)			170,839				62,416		36.5	%
	Investment securities¹		59,883				61,617				(1,734	)	(2.8	%)			72,550				(12,667	)	(17.5	%)
	Loans held-for-sale		218,258				219,355				(1,097	)	(0.5	%)			230,431				(12,173	)	(5.3	%)
	Loans held-for-investment		1,204,009				1,201,230				2,779		0.2	%			1,285,278				(81,269	)	(6.3	%)
	Less: Allowance for credit losses ("ACL")		(15,291	)			(15,284	)			(7	)	(0.0	%)			(15,525	)			234		1.5	%
	Loans held-for-investment, net		1,188,718				1,185,946				2,772		0.2	%			1,269,753				(81,035	)	(6.4	%)
	Other real estate owned ("OREO")		55				55				-		-				-				55		100.0	%
	Restricted stock investments		11,011				11,011				-		-				10,121				890		8.8	%
	Servicing assets		7,673				7,873				(200	)	(2.5	%)			9,232				(1,559	)	(16.9	%)
	Goodwill		2,185				2,185				-		-				2,185				-		-
	Intangible assets		255				267				(12	)	(4.5	%)			303				(48	)	(15.8	%)
	Other assets		24,838				24,799				39		0.2	%			26,939				(2,101	)	(7.8	%)
	Total assets	$	1,760,413			$	1,859,312			$	(98,899	)	(5.3	%)		$	1,812,487			$	(52,074	)	(2.9	%)
LIABILITIES AND STOCKHOLDERS' EQUITY
	Noninterest-bearing	$	305,923			$	406,033			$	(100,110	)	(24.7	%)		$	451,651			$	(145,728	)	(32.3	%)
	Interest-bearing		1,147,662				1,143,257				4,405		0.4	%			1,086,599				61,063		5.6	%
	Total deposits		1,453,585				1,549,290				(95,705	)	(6.2	%)			1,538,250				(84,665	)	(5.5	%)
	FHLB advances and other borrowing		50,000				50,000				-		-				50,000				-		-
	Other liabilities		21,114				31,141				(10,027	)	(32.2	%)			14,706				6,408		43.6	%
	Total liabilities		1,524,699				1,630,431				(105,732	)	(6.5	%)			1,602,956				(78,257	)	(4.9	%)
	Stockholders' Equity		235,714				228,881				6,833		3.0	%			209,531				26,183		12.5	%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY		$	1,760,413			$	1,859,312			$	(98,899	)	(5.3	%)		$	1,812,487			$	(52,074	)	(2.9	%)
CAPITAL RATIOS
	Leverage ratio
	Company		12.98	%			12.53	%			0.45	%	3.6	%			11.71	%			1.27	%	10.8	%
	Bank		12.96	%			12.50	%			0.46	%	3.7	%			11.67	%			1.29	%	11.0	%
	Common equity tier 1 risk-based capital ratio
	Company		18.08	%			17.61	%			0.47	%	2.6	%			14.92	%			3.16	%	21.2	%
	Bank		18.05	%			17.57	%			0.48	%	2.7	%			14.87	%			3.18	%	21.4	%
	Tier 1 risk-based capital ratio
	Company		18.08	%			17.61	%			0.47	%	2.6	%			14.92	%			3.16	%	21.2	%
	Bank		18.05	%			17.57	%			0.48	%	2.7	%			14.87	%			3.18	%	21.4	%
	Total risk-based capital ratio
	Company		19.30	%			18.83	%			0.46	%	2.5	%			16.08	%			3.21	%	20.0	%
	Bank		19.27	%			18.79	%			0.48	%	2.5	%			16.03	%			3.24	%	20.2	%
	Tangible book value per share	$	22.03			$	21.39			$	0.64		3.0	%		$	19.59			$	2.44		12.5	%
	Loans Held for Investments-to-Deposit ("LHFITD") ratio		82.83	%			77.53	%			5.30	%	6.8	%			83.55	%			(0.72	%)	(0.9	%)
	Net Loan-to-Deposit ("LTD") ratio		96.79	%			90.71	%			6.08	%	6.7	%			97.53	%			(0.74	%)	(0.8	%)
	Nonperforming assets	$	2,484			$	673			$	1,811		269.1	%		$	6,807			$	(4,323	)	(63.5	%)
	Nonperforming assets as a % of loans held-for-investment		0.21	%			0.06	%			0.15	%	250.0	%			0.53	%			(0.32	%)	(60.4	%)
	ACL as a % of loans held-for-investment		1.27	%			1.27	%			0.00	%	0.00	%			1.21	%			0.06	%	5.0	%
¹ Includes AFS and HTM

FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3 (Dollars in thousands, except per share amounts)
		Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
			2023				2023				2023				2023				2022
Interest income		$	29,624			$	29,450			$	28,664			$	27,248			$	24,744
Interest expense			12,462				11,442				9,930				8,168				4,677
Net interest income			17,162				18,008				18,734				19,080				20,067
Provision for credit losses			-				-				-				-				-
Net interest income after provision for credit losses			17,162				18,008				18,734				19,080				20,067
Gain on sale of loans			838				419				1,952				-				-
SBA servicing fee income, net			690				639				440				654				491
Service charges and other income			436				402				407				398				457
Noninterest income			1,964				1,460				2,799				1,052				948
Salaries and employee benefits			5,356				5,569				5,581				6,079				6,233
Occupancy and equipment			1,128				1,103				1,122				1,124				1,133
Marketing expense			250				475				409				374				434
Professional expense			360				443				436				454				418
Merger related expense			1				5				2				9				7
Other expenses			2,362				2,574				2,633				2,235				2,579
Noninterest expense			9,457				10,169				10,183				10,275				10,804
Income before income tax expense			9,669				9,299				11,350				9,857				10,211
Income tax expense			2,670				2,630				3,248				2,767				2,882
Net income		$	6,999			$	6,669			$	8,102			$	7,090			$	7,329
Effective tax rate			27.6	%			28.3	%			28.6	%			28.1	%			28.2	%
Outstanding number of shares			10,588,136				10,588,136				10,588,136				10,588,136				10,569,601
Weighted average shares for basic EPS			10,588,136				10,588,136				10,588,136				10,576,191				10,569,601
Weighted average shares for diluted EPS			10,588,937				10,594,155				10,591,351				10,600,189				10,600,053
Basic EPS		$	0.66			$	0.63			$	0.77			$	0.67			$	0.70
Diluted EPS		$	0.66			$	0.63			$	0.76			$	0.67			$	0.70

FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4 (Dollars in thousands)
		At or for the Three Months Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
			2023				2023				2023				2023				2022
Salaries and benefits		$	5,356			$	5,569			$	5,581			$	6,079			$	6,233
FTE at the end of period			169				172				165				170				179
Average FTE during the period			169				168				164				174				184
Salaries and benefits/average FTE¹		$	126			$	131			$	137			$	142			$	134
Salaries and benefits/average assets¹			1.18	%			1.22	%			1.23	%			1.36	%			1.39	%
Noninterest expense/average assets¹			2.08	%			2.22	%			2.25	%			2.30	%			2.41	%
¹ Annualized

FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5 (Dollars in thousands)
		December 31,				September 30,				June 30,				March 31,				December 31,
			2023				2023				2023				2023				2022
ASSETS
	Cash and due from banks	$	14,282			$	11,188			$	12,704			$	13,788			$	20,134
	Interest-earning deposits at the FRB and other banks		233,255				335,016				293,394				240,602				170,839
	Investment securities		59,883				61,617				66,400				68,943				72,550
	Loans held-for-sale		218,258				219,355				215,083				243,753				230,431
	Loans held-for-investment		1,204,009				1,201,230				1,201,237				1,222,867				1,285,278
	Less: Allowance for credit losses		(15,291	)			(15,284	)			(15,626	)			(15,627	)			(15,525	)
	Loans held-for-investment, net		1,188,718				1,185,946				1,185,611				1,207,240				1,269,753
	Other real estate owned		55				55				-				-				-
	Restricted stock investments		11,011				11,011				11,011				10,121				10,121
	Servicing assets		7,673				7,873				8,426				8,528				9,232
	Goodwill		2,185				2,185				2,185				2,185				2,185
	Intangible assets		255				267				279				291				303
	Other assets		24,838				24,799				24,537				25,697				26,939
	Total assets	$	1,760,413			$	1,859,312			$	1,819,630			$	1,821,148			$	1,812,487
LIABILITIES AND STOCKHOLDERS' EQUITY
	Noninterest-bearing	$	305,923			$	406,033			$	426,333			$	428,559			$	451,651
	Interest-bearing		1,147,662				1,143,257				1,096,078				1,108,754				1,086,599
	Total deposits		1,453,585				1,549,290				1,522,411				1,537,313				1,538,250
	FHLB advances		50,000				50,000				50,000				50,000				50,000
	Other liabilities		21,114				31,141				23,956				17,651				14,706
	Total liabilities		1,524,699				1,630,431				1,596,367				1,604,964				1,602,956
	Stockholders' Equity		235,714				228,881				223,263				216,184				209,531
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY		$	1,760,413			$	1,859,312			$	1,819,630			$	1,821,148			$	1,812,487

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6 (Dollars in thousands)
	December 31, 2023						September 30, 2023						June 30, 2023						March 31, 2023						December 31, 2022
	Balance			%			Balance			%			Balance			%			Balance			%			Balance			%
Construction	$	34,886		2.9	%		$	30,924		2.6	%		$	20,106		1.7	%		$	19,550		1.6	%		$	17,537		1.4	%
Commercial real estate		1,010,495		83.9	%			1,005,735		83.7	%			1,014,785		84.5	%			1,033,124		84.5	%			1,078,588		83.9	%
Commercial and industrial		108,123		9.0	%			113,374		9.4	%			114,106		9.4	%			114,184		9.3	%			125,298		9.7	%
Home mortgage		44,920		3.7	%			45,452		3.8	%			45,987		3.8	%			49,155		4.0	%			52,031		4.1	%
Consumer		630		0.1	%			616		0.1	%			1,074		0.1	%			1,049		0.1	%			6,260		0.5	%
Gross loans held-for-investment		1,199,054		99.6	%			1,196,101		99.6	%			1,196,058		99.6	%			1,217,062		99.5	%			1,279,714		99.6	%
Deferred loan fees/costs, net		4,955		0.4	%			5,129		0.4	%			5,179		0.4	%			5,805		0.5	%			5,564		0.4	%
Loans held-for-investment	$	1,204,009		100.0	%		$	1,201,230		100.0	%		$	1,201,237		100.0	%		$	1,222,867		100.0	%		$	1,285,278		100.0	%
Loans held-for-sale	$	218,258					$	219,355					$	215,083					$	243,753					$	230,431
Total loans receivable	$	1,422,267					$	1,420,585					$	1,416,320					$	1,466,620					$	1,515,709

FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7 (Dollars in thousands)
	Three Months Ended																					Twelve Months Ended
	December 31,				September 30,				June 30,				March 31,				December 31,					December 31,				December 31,
		2023				2023				2023				2023				2022					2023				2022
SBA loans held-for-sale at beginning of the quarter/year	$	219,355			$	215,083			$	243,753			$	230,431			$	186,438				$	230,431			$	158,128
SBA loans originated/transferred from/to held-for-
investment during the quarter/year		27,022				16,260				18,273				16,890				45,184					78,445				181,689
SBA loans sold during the quarter/year		(21,749	)			(9,245	)			(42,437	)			-				-					(73,431	)			(101,376	)
SBA loans principal paydown/payoff, net of advance		(6,370	)			(2,743	)			(4,506	)			(3,568	)			(1,191	)				(17,187	)			(8,010	)
SBA loans held-for-sale at end of the quarter/year	$	218,258			$	219,355			$	215,083			$	243,753			$	230,431				$	218,258			$	230,431
Gain on sale of SBA loans	$	838			$	419			$	1,952			$	-			$	-				$	3,209			$	7,966
Premium on sale (weighted average)		6.7	%			8.3	%			6.8	%			-				-					7.0	%			9.5	%
SBA loan production	$	37,821			$	24,270			$	24,013			$	21,719			$	60,746				$	107,823			$	241,179

FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8 (Dollars in thousands)
	Three Months Ended																					Twelve Months Ended
	December 31,				September 30,				June 30,				March 31,				December 31,					December 31,				December 31,
		2023				2023				2023				2023				2022					2023				2022
SBA servicing assets @ beginning of the quarter/year	$	7,873			$	8,426			$	8,528			$	9,232			$	10,158				$	9,232			$	10,632
Newly added SBA servicing assets from SBA loans sold		430				182				806				-				-					1,418				2,133
Regular quarterly/annual servicing assets amortization		(356	)			(371	)			(379	)			(403	)			(434	)				(1,509	)			(1,845	)
SBA servicing assets amortized from SBA loans paid off/charged off		(274	)			(364	)			(529	)			(301	)			(492	)				(1,468	)			(1,688	)
Subtotal before impairment		7,673				7,873				8,426				8,528				9,232					7,673				9,232
Reversal of valuation allowance on servicing assets		-				-				-				-				-					-				-
SBA servicing assets @ the end of the quarter/year	$	7,673			$	7,873			$	8,426			$	8,528			$	9,232				$	7,673			$	9,232

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9 (Dollars in thousands)
	December 31, 2023						September 30, 2023						June 30, 2023						March 31, 2023						December 31, 2022
	Balance			%			Balance			%			Balance			%			Balance			%			Balance			%
Noninterest-bearing demand	$	305,923		21.1	%		$	406,033		26.2	%		$	426,333		28.0	%		$	428,559		27.9	%		$	451,651		29.4	%
Interest-bearing demand		7,504		0.5	%			6,395		0.4	%			9,056		0.6	%			10,883		0.7	%			8,878		0.6	%
NOW & MMDA		237,548		16.3	%			227,283		14.7	%			210,429		13.8	%			211,793		13.8	%			274,521		17.9	%
Savings		88,689		6.1	%			78,969		5.1	%			62,324		4.1	%			62,188		4.0	%			52,845		3.4	%
TCDs of $250K and under		315,920		21.7	%			312,704		20.2	%			298,520		19.6	%			294,074		19.1	%			278,952		18.1	%
TCDs of $250K over		353,866		24.4	%			373,345		24.1	%			368,262		24.2	%			367,167		23.9	%			320,386		20.8	%
Wholesale TCDs		144,135		9.9	%			144,561		9.3	%			147,487		9.7	%			162,649		10.6	%			151,017		9.8	%
Total Deposits	$	1,453,585		100.0	%		$	1,549,290		100.0	%		$	1,522,411		100.0	%		$	1,537,313		100.0	%		$	1,538,250		100.0	%
Recap:
Noninterest-bearing demand	$	305,923		21.0	%		$	406,033		26.2	%		$	426,333		28.0	%		$	428,559		27.9	%		$	451,651		29.4	%
Interest-bearing demand		7,504		0.5	%			6,395		0.4	%			9,056		0.6	%			10,883		0.7	%			8,878		0.6	%
NOW & MMDA		237,548		16.3	%			227,283		14.7	%			210,429		13.8	%			211,793		13.8	%			274,521		17.8	%
Savings		88,689		6.1	%			78,969		5.1	%			62,324		4.1	%			62,188		4.0	%			52,845		3.5	%
TCDs of $250K and under		315,920		21.7	%			312,704		20.2	%			298,520		19.6	%			294,074		19.1	%			278,952		18.1	%
Core Deposits		955,584		65.7	%			1,031,384		66.6	%			1,006,662		66.1	%			1,007,497		65.5	%			1,066,847		69.4	%
TCDs of $250K over		353,866		24.3	%			373,345		24.1	%			368,262		24.2	%			367,167		23.9	%			320,386		20.8	%
Wholesale TCDs		144,135		9.9	%			144,561		9.3	%			147,487		9.7	%			162,649		10.6	%			151,017		9.8	%
Noncore Deposits		498,001		34.3	%			517,906		33.4	%			515,749		33.9	%			529,816		34.5	%			471,403		30.6	%
Total Deposits	$	1,453,585		100.0	%		$	1,549,290		100.0	%		$	1,522,411		100.0	%		$	1,537,313		100.0	%		$	1,538,250		100.0	%

FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10 (Dollars in thousands)
			4th Qtr.				3rd Qtr.				2nd Qtr.				1st Qtr.				4th Qtr.
				2023				2023				2023				2023				2022
Allowance for Credit Losses
	Balance at beginning of period		$	15,284			$	15,626			$	15,627			$	15,525			$	15,602
	CECL transition provision			-				-				-				250				-
	Provision for credit losses			-				-				-				-				-
	Charge-offs			(2	)			(350	)			(11	)			(159	)			(90	)
	Recoveries			9				8				10				11				13
	Balance at the end of period		$	15,291			$	15,284			$	15,626			$	15,627			$	15,525
Nonperforming Assets:¹
	Over 90 days still accruing		$	399			$	2			$	39			$	-			$	6,006
	Nonaccrual loans			2,030				616				645				636				801
	Total nonperforming loans			2,429				618				684				636				6,807
	Other real estate owned		$	55				55				-				-				-
	Total nonperforming assets		$	2,484			$	673			$	684			$	636			$	6,807
Classified Assets:¹
	Substandard		$	11,063			$	10,105			$	10,491			$	7,673			$	8,165
	Doubtful			-				-				-				-				-
	Loss
	Total classified loans		$	11,063			$	10,105			$	10,491			$	7,673			$	8,165
	Other real estate owned		$	55				55				-				-				-
	Total classified assets		$	11,118			$	10,160			$	10,491			$	7,673			$	8,165
Performing TDR loans:¹			$	3,336			$	3,336			$	3,336			$	-			$	4,471
Delinquent Loans:¹
	Loans 30-89 days past due		$	5,981			$	10,620			$	4,420			$	3,551			$	381
	90 days or more past due and still accruing			399				2				39				-				6,006
	Nonaccrual			2,030				616				645				636				801
	Total delinquent loans		$	8,410			$	11,238			$	5,104			$	4,187			$	7,188
Asset Quality Ratios:
	Net (recoveries) charge-offs to average loans²			0.00	%			0.10	%			0.00	%			0.04	%			0.02	%
	Nonaccrual loans to loans held-for-investment			0.17	%			0.05	%			0.05	%			0.05	%			0.06	%
	Nonperforming loans to loans held-for-investment			0.20	%			0.05	%			0.06	%			0.05	%			0.53	%
	Nonperforming assets to total assets			0.14	%			0.04	%			0.04	%			0.03	%			0.38	%
	Classified loans to loans held-for-investment			0.92	%			0.84	%			0.87	%			0.63	%			0.64	%
	Classified loans to Tier 1 and ACL			4.45	%			4.18	%			4.44	%			3.35	%			3.67	%
	Classified assets to total assets			0.63	%			0.55	%			0.58	%			0.42	%			0.45	%
	Classified assets to Tier 1 and ACL			4.47	%			4.20	%			4.44	%			3.35	%			3.67	%
	ACL to loans held-for-investment			1.27	%			1.27	%			1.30	%			1.28	%			1.21	%
	ACL to nonaccrual loans			753.25	%			2481.17	%			2422.64	%			2457.08	%			1938.20	%
	ACL to nonperforming loans			629.52	%			2473.14	%			2284.50	%			2457.08	%			228.07	%
	ACL to nonperforming assets			615.58	%			2271.03	%			2284.50	%			2457.08	%			228.07	%
	Texas ratio ³			1.00	%			0.28	%			0.29	%			0.28	%			3.06	%
1 Net of SBA guaranteed balance
2 Includes loans held-for-sale
3 Nonperforming assets divided by tangible common equity and ACL

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11
		Well Capitalized			Adequately Capitalized			December 31,				September 30,				June 30,				March 31,				December 31,
		Regulatory			BASEL III
		Requirement			Fully Phased In				2023				2023				2023				2023				2022
Leverage ratio
Company		N/A			N/A				12.98	%			12.53	%			12.23	%			11.86	%			11.71	%
Bank		5.00	%		4.00	%			12.96	%			12.50	%			12.20	%			11.82	%			11.67	%
Common equity tier 1 risk-based capital ratio
Company		N/A			N/A				18.08	%			17.61	%			17.08	%			16.15	%			14.92	%
Bank		6.50	%		7.00	%			18.05	%			17.57	%			17.03	%			16.10	%			14.87	%
Tier 1 risk-based capital ratio
Company		N/A			N/A				18.08	%			17.61	%			17.08	%			16.15	%			14.92	%
Bank		8.00	%		8.50	%			18.05	%			17.57	%			17.03	%			16.10	%			14.87	%
Total risk-based capital ratio
Company		N/A			N/A				19.30	%			18.83	%			18.32	%			17.37	%			16.08	%
Bank		10.00	%		10.50	%			19.27	%			18.79	%			18.27	%			17.31	%			16.03	%
Tangible common equity/total assets									13.27	%			12.19	%			12.15	%			11.75	%			11.44	%
Tangible common equity per share								$	22.03			$	21.39			$	20.85			$	20.18			$	19.59

FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12
(Dollars in thousands)
	Three Months Ended
	December 31, 2023									September 30, 2023									June 30, 2023									March 31, 2023									December 31, 2022
	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	$	1,410,971		$	24,926		7.01	%		$	1,417,148		$	24,734		6.92	%		$	1,444,608		$	24,661		6.85	%		$	1,502,078		$	24,379		6.58	%		$	1,473,100		$	22,407		6.03	%
Investment securities ²		60,094			563		3.72	%			64,587			577		3.54	%			67,958			595		3.51	%			70,146			577		3.34	%			73,371			552		2.98	%
Interest-earning deposits at the FRB and other banks		288,769			3,973		5.46	%			293,081			3,994		5.41	%			258,236			3,296		5.12	%			190,692			2,178		4.63	%			180,358			1,666		3.66	%
Other earning assets		11,011			212		7.64	%			11,011			196		7.06	%			10,825			163		6.04	%			10,121			164		6.57	%			10,121			169		6.62	%
Total interest-earning assets ²		1,770,845			29,674		6.65	%			1,785,827			29,501		6.55	%			1,781,627			28,715		6.46	%			1,773,037			27,298		6.24	%			1,736,950			24,794		5.66	%
NONINTEREST-EARNING ASSETS
Cash and due from banks		12,567									13,045									12,792									14,262									15,632
Other noninterest-earning assets		32,985									33,331									34,060									36,643									38,529
Total noninterest-earning assets		45,552									46,376									46,852									50,905									54,161
Less: Allowance for credit losses		(15,291	)								(15,622	)								(15,627	)								(15,552	)								(15,581	)
TOTAL ASSETS	$	1,801,106								$	1,816,581								$	1,812,852								$	1,808,390								$	1,775,530
INTEREST-BEARING DEPOSITS
Interest-bearing demand	$	12,657		$	7		0.22	%		$	12,347		$	6		0.19	%		$	14,522		$	7		0.19	%		$	18,021		$	9		0.20	%		$	20,352		$	10		0.19	%
Money market		222,289			2,158		3.85	%			211,152			1,907		3.58	%			192,872			1,414		2.94	%			231,865			1,469		2.57	%			288,611			1,433		1.97	%
Savings		82,403			664		3.20	%			70,579			494		2.78	%			63,786			324		2.04	%			55,576			164		1.20	%			61,152			96		0.62	%
Time deposits		824,900			9,515		4.58	%			820,335			8,916		4.31	%			839,198			8,068		3.86	%			797,072			6,410		3.26	%			625,823			3,020		1.91	%
Total interest-bearing deposits		1,142,249			12,344		4.29	%			1,114,413			11,323		4.03	%			1,110,378			9,813		3.54	%			1,102,534			8,052		2.96	%			995,938			4,559		1.82	%
Borrowings		50,001			118		0.94	%			50,001			119		0.94	%			50,000			117		0.94	%			50,000			116		0.94	%			50,001			118		0.94	%
Total interest-bearing liabilities		1,192,250			12,462		4.15	%			1,164,414			11,442		3.90	%			1,160,378			9,930		3.43	%			1,152,534			8,168		2.87	%			1,045,939			4,677		1.77	%
Noninterest-bearing deposits		350,656									397,791									411,432									425,190									507,719
Other liabilities		25,602									27,519									20,934									16,947									14,732
Stockholders' equity		232,598									226,857									220,108									213,719									207,140
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,801,106								$	1,816,581								$	1,812,852								$	1,808,390								$	1,775,530
Net interest income²				$	17,212								$	18,059								$	18,785								$	19,130								$	20,117
Net interest spread							2.50	%								2.65	%								3.03	%								3.37	%								3.89	%
Effect of noninterest-bearing sources							1.36	%								1.36	%								1.20	%								1.01	%								0.70	%
Net interest margin²							3.86	%								4.01	%								4.23	%								4.38	%								4.59	%
Cost of deposits	$	1,492,905		$	12,344		3.28	%		$	1,512,204		$	11,323		2.97	%		$	1,521,810		$	9,813		2.59	%		$	1,527,724		$	8,052		2.14	%		$	1,503,657		$	4,559		1.20	%
Cost of funds	$	1,542,906		$	12,462		3.20	%		$	1,562,205		$	11,442		2.91	%		$	1,571,810		$	9,930		2.53	%		$	1,577,724		$	8,168		2.10	%		$	1,553,658		$	4,677		1.19	%
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

FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13 (Dollars in thousands)
		Three Months Ended
		December 31, 2023							September 30, 2023							June 30,2023							March 31, 2023							December 31, 2022
		Amount				Yield			Amount				Yield			Amount				Yield			Amount				Yield			Amount				Yield
Contractual yield		$	24,235			6.81	%		$	23,932			6.70	%		$	23,767			6.60	%		$	23,643			6.38	%		$	21,534			5.80	%
SBA discount accretion			845			0.24	%			921			0.25	%			1,124			0.31	%			937			0.25	%			1,172			0.32	%
Prepayment penalties and late fees			40			0.01	%			18			0.01	%			60			0.02	%			30			0.01	%			17			0.00	%
Amortization of net deferred costs			(194	)		-0.05	%			(137	)		-0.04	%			(290	)		-0.08	%			(231	)		-0.06	%			(316	)		-0.09	%
As reported yield on loans		$	24,926			7.01	%		$	24,734			6.92	%		$	24,661			6.85	%		$	24,379			6.58	%		$	22,407			6.03	%

MARGIN ANALYSIS (Unaudited) - Table 14 (Dollars in thousands)
	Twelve Months Ended
	December 31,2023										December 31,2022
	Avg Balance				Interest			Yield			Avg Balance				Interest			Yield
Number of Days in the Period
INTEREST-EARNING ASSETS
Loans Receivable ¹	$	1,443,379			$	98,700		6.84	%		$	1,411,715			$	74,701		5.29	%
Investment securities ²		65,666				2,312		3.52	%			78,022				2,054		2.63	%
Interest-earning deposits at the FRB and other banks		258,060				13,441		5.21	%			250,532				3,804		1.52	%
Other earning assets		10,745				735		6.84	%			9,743				562		5.77	%
Total interest-earning assets ²		1,777,850				115,188		6.48	%			1,750,012				81,121		4.64	%
NONINTEREST-EARNING ASSETS
Cash and due from banks		13,161										15,328
Other noninterest-earning assets		34,195										38,539
Total noninterest-earning assets		47,356										53,867
Less: Allowance for credit losses		(15,522	)									(14,420	)
TOTAL ASSETS	$	1,809,684									$	1,789,459
INTEREST-BEARING DEPOSITS
Interest-bearing demand	$	14,367			$	29		0.20	%		$	24,487			$	25		0.10	%
Money market		214,509				6,948		3.24	%			308,843				3,125		1.01	%
Savings		68,166				1,646		2.41	%			71,193				302		0.42	%
Time deposits		820,452				32,909		4.01	%			559,176				5,840		1.04	%
Total interest-bearing deposits		1,117,494				41,532		3.72	%			963,699				9,292		0.96	%
Borrowings		50,001				470		0.94	%			50,000				470		0.94	%
Total interest-bearing liabilities		1,167,495				42,002		3.60	%			1,013,699				9,762		0.96	%
Noninterest-bearing deposits		396,837										562,035
Other liabilities		22,497										15,520
Stockholders' equity		222,855										198,205
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,809,684									$	1,789,459
Net interest income²					$	73,186									$	71,359
Net interest spread								2.88	%									3.68	%
Effect of noninterest-bearing sources								1.24	%									0.40	%
Net interest margin²								4.12	%									4.08	%
Cost of deposits	$	1,514,331			$	41,532		2.74	%		$	1,525,734			$	9,292		0.61	%
Cost of funds	$	1,564,332			$	42,002		2.68	%		$	1,575,734			$	9,762		0.62	%
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)
		Twelve Months Ended
		December 31, 2023							December 31, 2022
		Amount				Yield			Amount				Yield
Contractual yield		$	95,577			6.62	%		$	69,760			4.94	%
SBA discount accretion			3,827			0.27	%			4,706			0.33	%
Prepayment penalties and late fees			148			0.01	%			274			0.02	%
Amortization of net deferred costs			(852	)		-0.06	%			(39	)		0.00	%
As reported yield on loans		$	98,700			6.84	%		$	74,701			5.29	%

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Contacts

Richard Koh, EVP & CFO
(323) 988-3037
RichardK@cbb-bank.com