CBOA Financial, Inc. Reports Consolidated Earnings of $650,000 in 1Q 2022

Rhea-AI Summary

CBOA Financial, Inc. (OTCMKTS:CBOF) reported a 19% increase in consolidated net income for Q1 2022, totaling $650K, up from $548K in Q4 2021. Pre-tax earnings reached $878K, a 16.3% rise year-over-year. The company funded $32 million in new loans, with non-interest income surging 265% from last quarter, boosted by SBA loan sales. Total assets grew 3% to $354.9 million, while total deposits increased 4.2% to $319 million. However, shareholders' equity fell to $27 million due to unrealized losses, impacting tangible book value, which decreased to $2.89 per share.

Positive

• 19% increase in net income to $650K for Q1 2022.
• 265% rise in non-interest income compared to last quarter.
• $32 million in new loans funded during the quarter.
• Total assets increased by 3% to $354.9 million.

Negative

• Shareholders' equity decreased to $27 million from $29.2 million.
• Tangible book value dropped to $2.89 per share from $3.12.

TUCSON, Ariz., May 2, 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 March 31, 2022 increased 19% to $650 thousand, from $548 thousand in the fourth quarter of last year.

Chris Webster, President and CEO stated, "We are pleased to start fiscal 2022 with an exceptionally strong quarter. Pre-tax earnings of $878 thousand was 16.3% above the same quarter last year. Our lending team continues to take advantage of the positive economic conditions in the Phoenix and Tucson metropolitan markets." He further added, "The Bank's robust liquidity position allows us to fund loan growth at record low cost levels. As a result, CBAZ's Net Interest Margin remains among the highest of our peers." Webster also commented, "Credit quality and customer performance are areas of focus as monitor the challenges of inflationary pressures and increasing interest rates."

First Quarter 2022 Highlights

• $32 million in new loans funded during the quarter
• Non-Interest Income increased 265% compared to last quarter
• Interest expense decreased by 50% compared to Q1 2021

Operational Highlights

Non-Interest income during the quarter was aided by sales of several SBA loans to the secondary market, bolstering net income by $357 thousand.

The Bank continues to make progress on its legacy classified assets. Year-over-year, non-performing assets which include loans and OREO are down 50% from $2.6 million or 0.77% of assets to $1.2 million or 0.37% of assets.

Balance Sheet

Total assets increased by 3% to $354.9 million during the quarter ended March 31, 2022 but decreased 2.9% compared to $365.5 million a year ago.

Gross loans increased $6.9 million since fourth quarter 2021, ending the first quarter 2022 at $237 million. Total deposits increased by 4.2% to $319 million during the quarter and increased 4.4% compared to $305 million a year ago.

The allowance for loan losses totaled $3.43 million at March 2022, or 1.44% of loans, unchanged from the previous quarter.

Shareholders' equity decreased to $27.0 million at March 31, 2022, from $29.2 million the preceding quarter due to an increase in unrealized losses on securities. At March 31, 2022, tangible book value was $2.89 per share compared to $3.12 per share at December 31, 2021 and $3.02 per share a year ago. The Bank's March 31, 2022 Tier 1 Leverage ratio was 9.72%, compared to 8.41% at March 31, 2021.

Capital Management

Capital ratios exceeded regulatory guidelines for a well-capitalized institution under Basel III and Dodd Frank Wall Street Reform requirements at March 31, 2022 as well as during the fourth quarter of 2021. 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
		3/31/2022	12/31/2021	3/31/2021		3/31/2022	3/31/2021
Summary Income Data
Interest Income		3,308	3,453	3,486		3,308	3,486
Interest expense		140	131	278		140	278
Net Interest Income		3,168	3,322	3,208		3,168	3,208
Provision for (reduction in) loan losses		37	155	-		37	-
Non-interest income		452	124	70		452	70
Realized gains (losses) on sales of securities		-	-	-		-	-
Non-interest expense		2,705	2,377	2,523		2,705	2,523
Income (loss) before income taxes		878	914	755		878	755
Provision for income tax		228	366	212		228	212
Net Income		650	548	543		650	543
Per Share Data
Shares outstanding end-of-period		9,356	9,356	8,268		9,356	8,268
Earnings per common share ($'s)		0.07	0.06	0.07		0.07	0.07
Earnings per common share (Diluted) ($'s)		0.06	0.05	0.06		0.06	0.06
Cash dividend declared		-	-	-		-	-
Total shareholders' equity		27,024	29,197	25,000		27,024	25,000
Tangible Book value per share ($'s)		2.89	3.12	3.02		2.89	3.02
Selected Balance Sheet Data
Total assets		354,914	344,630	365,470		354,914	365,470
Securities available-for-sale		59,339	54,599	38,630		59,339	38,630
Loans		237,554	230,700	259,893		237,554	259,893
Allowance for loan losses		3,431	3,320	2,972		3,431	2,972
Deposits		318,580	305,694	305,012		318,580	305,012
Other borrowings		-	-	25,539		-	25,539
Shareholders' equity		27,024	29,197	25,000		27,024	25,000
Performance Ratios (%)
Return on avg shareholders' equity		9.62	7.56	8.16		9.62	8.16
Net interest margin (Bank)		3.83	4.02	3.83		3.83	3.83
Efficiency ratio (Bank)		74.72	69.07	75.25		74.72	75.25
Asset Quality Data (%)
Nonperforming assets to total assets		0.37	0.39	0.77		0.37	0.77
Reserve for loan losses to total loans		1.44	1.44	1.14		1.44	1.14
Net Charge-offs to avg loans for period		(0.03)	(0.01)	(0.03)		(0.03)	(0.03)
Regulatory Capital Ratios (%)
Common Equity Tier 1		12.16	12.62	12.24		12.16	12.24
Tier 1 risk-based capital ratio		12.16	12.62	12.24		12.16	12.24
Total risk-based capital ratio		13.41	13.87	13.49		13.41	13.49
Tier 1 leverage capital ratio		9.72	9.87	8.41		9.72	8.41

 

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

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SOURCE Commerce Bank of Arizona

FAQ

What were CBOA Financial's earnings for Q1 2022?

CBOA Financial reported a net income of $650,000 for Q1 2022, a 19% increase from the previous quarter.

How much did CBOA Financial fund in new loans during Q1 2022?

CBOA Financial funded $32 million in new loans during the first quarter of 2022.

What is the status of CBOA Financial's non-interest income?

Non-interest income for CBOA Financial increased by 265% compared to the previous quarter.

What was the tangible book value per share for CBOA Financial at the end of Q1 2022?

The tangible book value per share for CBOA Financial decreased to $2.89 as of March 31, 2022.