CBOA Financial, Inc. Reports Consolidated Earnings of $548,000 in 4Q 2021

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CBOA Financial, Inc. (OTCMKTS:CBOF) reported a consolidated net income of $548 thousand for Q4 2021, a 7% increase from $510 thousand in Q3 2021. Total assets rose by 12% to $344.6 million compared to the previous quarter, although yearly assets decreased by 3.1%. New loans funded reached $42 million in the quarter, while non-interest income surged 67% quarter-over-quarter. Non-performing loans fell to a historic low of 0.39% of assets, and earnings per share for 2021 was $0.31.

Positive

• Consolidated net income increased 7% to $548 thousand.
• Total assets rose 12% to $344.6 million from the previous quarter.
• New loans funded reached $42 million during the quarter.
• Non-interest income surged by 67% compared to the prior quarter.
• Non-performing loans decreased to 0.39% of assets, the lowest in 15 years.

Negative

• Total assets decreased 3.1% compared to $355.8 million a year ago.
• Total loans decreased by 2.7% to $231 million, largely due to $58 million in PPP loans forgiven.

TUCSON, Ariz., Feb. 1, 2022 /PRNewswire/ -- CBOA Financial, Inc. (OTCMKTS:CBOF) (the "Company"), parent company of Commerce Bank of Arizona (the "Bank" or "CBAZ"), announced that consolidated net income for quarter ending December 31, 2021 increased 7% to $548 thousand, from $510 thousand in the third quarter of this year.

Bank President and CEO Chris Webster commented, "Despite headwinds caused by the ongoing challenges of the pandemic, CBAZ generated record net loan growth in 2021." He added, "Our experienced commercial lending team skillfully adapted to a wildly uneven economic environment and produced an impressive number of new high quality customer relationships." Webster added, "With the PPP loan forgiveness process largely behind us, the Bank is well-positioned to take advantage of Arizona's recovering economic conditions." Finally he noted, "Other notable balance sheet improvements included additional reductions in the Bank's classified loans. Non-performing loans are now at 0.39% of assets, the lowest level in 15 years, and our reserves remain strong at 1.44% of gross loans."

Fourth Quarter 2021 Highlights

• $42 million in new loans funded during the quarter
• Interest expense decreased by 25% compared to last quarter
• Non-Interest Income increased 67% compared to last quarter

Operational Highlights
Interest income during the quarter was aided by recognized fee income of PPP loans that bolstered earnings by $425 thousand.  There remains $27 thousand in PPP origination fee income that will likely be recognized over the next several quarters as the remaining loans are forgiven. Further contributing to the growth in net interest income was a $44 thousand decline in interest expense. Full year earnings per share was $0.31.

The Bank continues to make progress on its legacy classified assets. Year-over-year, non-performing assets which include loans and OREO are down 52% from $2.9 million or 0.78% of assets to $1.4 million or 0.39% of assets.

Balance Sheet
Total assets increased by 12% to $344.6 million during the quarter ended December 31, 2021 but decreased 3.1% compared to $355.8 million a year ago.

Traditional (non-PPP) gross loans increased $12.6 million since third quarter 2021, ending the fourth quarter 2021 at $229 million. For the full year 2021, traditional (non-PPP) loan growth was $49 million, an increase of 27% from year end 2020. Total loans including PPP decreased by 2.7% to $231 million in the quarter and decreased 3.9% compared to $240 million a year ago, due primarily to $58 million in PPP loans forgiven during 2021. Total deposits increased by 0.9% to $306 million during the quarter and increased 0.6% compared to $304 million a year ago.

The allowance for loan losses totaled $3.32 million at December 2021, or 1.44% of loans, compared to 1.33% in the previous quarter. The increase was primarily due to PPP loan forgiveness during the quarter.

Shareholders' equity increased to $29.2 million at December 31, 2021, from $28.2 million the preceding quarter. At December 31, 2021, tangible book value was $2.94 per share compared to $2.95 per share at September 30, 2021 and $2.81 per share a year ago. The Bank's December 31, 2021 Tier 1 Leverage ratio was 9.87%, compared to 8.56% at December 31, 2020. In addition to earnings, the increase in Bank capital ratios was due to the holding company adding $1.95 million to Bank capital in the third and fourth quarters of 2021. The additional capital was funded by exercises of stock warrants that were granted to investors in the Company's 2015 capital raise.

Capital Management
Capital ratios exceeded regulatory guidelines for a well-capitalized institution under Basel III and Dodd Frank Wall Street Reform requirements at December 31, 2021. During the third and fourth quarters of 2021, the Capital ratios are presented below.

About the Company
Commerce Bank of Arizona, established in 2002 in Tucson, Arizona, is a full-service community bank that caters to small-to mid-sized businesses and real estate professionals. CBAZ offers commercial clients with a variety of services ranging from U.S. Small Business Administration (SBA) financing solutions, construction loans, and commercial real estate loans. CBOA Financial, Inc. is a single-bank holding company and parent of the Bank. The Company is traded over-the-counter as CBOF. For additional information, please visit: www.commercebankaz.com.

Forward-looking Statements
This press release may include forward-looking statements about CBOA Financial, Inc. or Commerce Bank of Arizona. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: competition, fluctuations in interest rates, dependency on key individuals, loan defaults, geographical concentration, litigation and changes in federal laws, regulations and interpretations thereof. All forward-looking statements included in this press release are based on information available at the time of the release, and CBOA Financial, Inc. and Commerce Bank of Arizona assume no obligation to update any forward-looking statement.

Unaudited Consolidated Summary Financial Information
Dollars in thousands - Unaudited		For the quarter ended				Year to Date
		12/31/2021	9/30/2021	12/31/2020		12/31/2021	12/31/2020
Summary Income Data
Interest Income		3,453	3,884	3,300		14,125	12,877
Interest expense		131	174	319		829	1,486
Net Interest Income		3,322	3,710	2,981		13,296	11,391
Provision for (reduction in) loan losses		155	146	-		494	(279)
Non-interest income		124	74	(107)		352	(608)
Realized gains (losses) on sales of securities		-	2	-		2	168
Non-interest expense		2,377	2,424	3,344		9,781	10,475
Income (loss) before income taxes		914	1,214	(470)		3,375	755
Provision for income tax		366	704	(1,992)		515	(1,992)
		548	510	1,522		2,860	2,747
Per Share Data
Shares outstanding end-of-period		9,356	8,911	8,218		9,356	8,218
Earnings per common share ($'s)		0.06	0.06	0.19		0.31	0.33
Earnings per common share (Diluted) ($'s)		0.05	0.05	0.15		0.28	0.27
Cash dividend declared		-	-	-		-	-
Total shareholders' equity		29,197	28,233	25,070		29,197	25,070
Tangible Book value per share ($'s)		2.94	2.95	2.81		2.94	2.81
Selected Balance Sheet Data
Total assets		344,630	340,373	355,798		344,630	355,798
Securities available-for-sale		54,599	44,356	37,128		54,599	37,128
Loans		230,700	237,234	240,016		230,700	240,016
Allowance for loan losses		3,320	3,160	2,955		3,320	2,955
Deposits		305,694	302,994	303,932		305,694	303,932
Other borrowings		-	-	16,563		-	16,563
Shareholders' equity		29,197	28,233	25,070		29,197	25,070
Performance Ratios (%)
Return on avg shareholders' equity		7.56	7.25	25.02		9.87	10.64
Net interest margin (Bank)		4.02	4.50	3.73		3.99	4.10
Efficiency ratio (Bank)		69.07	63.24	114.92		70.57	95.39
Asset Quality Data (%)
Nonperforming assets to total assets		0.39	0.40	0.78		0.39	0.78
Reserve for loan losses to total loans		1.44	1.33	1.23		1.44	1.23
Net Charge-offs to avg loans for period		(0.01)	0.25	0.07		0.05	(0.12)
Regulatory Capital Ratios (%)
Common Equity Tier 1		12.62	12.90	12.96		12.62	12.96
Tier 1 risk-based capital ratio		12.62	12.90	12.96		12.62	12.96
Total risk-based capital ratio		13.87	14.12	14.21		13.87	14.21
Tier 1 leverage capital ratio		9.87	9.45	8.56		9.87	8.56

 

Contact:
Chris Webster
President & CEO
480-253-4511
cwebster@commercebankaz.com

 

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SOURCE Commerce Bank of Arizona

FAQ

What were the earnings results for CBOA Financial, Inc. (CBOF) in Q4 2021?

CBOA Financial reported a net income of $548 thousand in Q4 2021, a 7% increase from the previous quarter.

How much did CBOA Financial's total assets increase in Q4 2021?

Total assets increased by 12% to $344.6 million during Q4 2021.

What is the status of CBOA Financial's non-performing loans as of December 31, 2021?

Non-performing loans fell to 0.39% of total assets, marking the lowest level in 15 years.

What was the earnings per share (EPS) for CBOA Financial in 2021?

The earnings per share for CBOA Financial in 2021 was $0.31.