CBTX, Inc. Reports Fourth Quarter and Annual Financial Results
CBTX, Inc. (NASDAQ: CBTX) reported a net income of $35.6 million for 2021, equating to $1.45 per diluted share, up from $26.4 million or $1.06 per diluted share in 2020. However, the fourth quarter showed a net loss of $545,000 or $0.02 per diluted share, a stark drop compared to the $14.4 million profit in Q3 2021. Deposits grew by $299.6 million from Q3 to Q4 2021, totaling $3.8 billion. The company also settled BSA/AML compliance issues, incurring an $8.0 million expense. CBTX is pursuing a merger with Allegiance Bank to enhance market position, targeting closure in Q2 2022.
- Net income for 2021 was $35.6 million, an increase of $9.2 million from 2020.
- Deposits increased by $299.6 million between September 30, 2021, and December 31, 2021.
- Successful resolution of BSA/AML compliance issues, concluding investigations.
- Plans for merger with Allegiance Bank, enhancing competitive market presence.
- Fourth quarter of 2021 showed a net loss of $545,000, a significant decline from previous quarters.
- Noninterest expense surged by $10.5 million in Q4 2021 due to compliance settlement and merger costs.
- Net interest margin decreased to 3.07% in Q4 2021 from 3.62% a year prior.
HOUSTON, Jan. 27, 2022 (GLOBE NEWSWIRE) -- CBTX, Inc., or the Company (NASDAQ: CBTX), the bank holding company for CommunityBank of Texas, N.A., or the Bank, today announced its results for the quarter and year ended December 31, 2021.
Robert R. Franklin, Jr., Chairman, CEO and President of the Company said, “We are pleased to present our results for the fourth quarter of an eventful 2021 for CBTX, Inc. The first half of the year was marked with caution but optimism about where the Covid virus would take us as well as the economy. We had concern for both our employees and our customers due to the uncertainty surrounding the health of either. However, our team worked through these trying times and entered the second half of the year with determination. The Texas economy provided opportunities and showed its resiliency. Our teams hard work showed in the fourth quarter with nice loan growth which will provide good momentum going into the new year.”
Mr. Franklin continued, “Also, in the fourth quarter we announced that we found a great partner in Allegiance Bank. We are very excited about the opportunities that our combined organizations will have in the future. We have been working diligently on the merger and every day become more enthusiastic about the combined organization. We are making great progress identifying ways to build a better bank and our integration teams are hard at work. We are in the regulatory approval phase and are strong in our belief that this union will build a powerful bank in our markets and provide for great shareholder value.”
Mr. Franklin added, “Additionally, the fourth quarter marked the end of our regulatory challenges as we settled and ended the investigation by the Financial Crimes Enforcement Network and the order with the OCC. We are pleased to have concluded this chapter and we believe the BSA program stands ready to be a leader for our merger partner and ready for our increase in size and scale.”
Mr. Franklin concluded, “We are excited about the opportunities that 2022 will provide. We have liquidity, capital and an asset sensitive balance sheet that should allow us to succeed in our Texas markets which continue to do well.”
Highlights
- Net income for the year ended December 31, 2021 was
$35.6 million , or$1.45 per diluted share, compared to$26.4 million , or$1.06 per diluted share, for the year ended December 31, 2020. - The Company reported a net loss of
$545,000 for the fourth quarter of 2021, or$0.02 per diluted share, compared to net income of$14.4 million , or$0.59 per diluted share, for the third quarter of 2021 and net income of$10.2 million , or$0.41 per diluted share, for the fourth quarter of 2020. - The Bank resolved Bank Secrecy Act/Anti-Money Laundering, or BSA/AML, compliance matters in December 2021 and incurred a
$8.0 million charge to noninterest expense in the fourth quarter of 2021. - Loans excluding loans held for sale increased
$259.1 million from September 30, 2021 to December 31, 2021 and decreased$56.6 million from December 31, 2020 to December 31, 2021. - The Company’s allowance for credit losses, or ACL, decreased
$863,000 t o$31.3 million during the fourth quarter of 2021, primarily due to qualitative factor adjustments associated with continued improvements in the local economy. - Net interest margin on a tax equivalent basis decreased to
3.31% for the year ended December 31, 2021, compared to3.73% for the year ended December 31, 2020 and the net interest margin on a tax equivalent basis decreased to3.07% for the fourth quarter of 2021, compared to3.22% for the third quarter of 2021 and3.62% for the fourth quarter of 2020. - Deposits increased
$299.6 million between September 30, 2021 and December 31, 2021 and$529.5 million between December 31, 2020 and December 31, 2021.
Pending Merger
On November 8, 2021, Allegiance Bancshares, Inc., or Allegiance, the holding company of Allegiance Bank, and CBTX jointly announced that they entered into a definitive merger agreement pursuant to which the companies will combine in an all-stock merger of equals to create a combined company with an equity market capitalization of approximately
Operating Results
Net income for the year ended December 31, 2021 was
The Company reported a net loss of
Net Interest Income
Net interest income was
Net interest income decreased
Net interest income decreased
The yield on interest-earning assets was
The yield on interest-earning assets was
Provision (Recapture) for Credit Losses
The provision for credit losses was a recapture of credit losses of
The recapture of credit losses of
The recapture of credit losses of
The recapture of credit losses of
The ACL for loans was
Noninterest Income
Noninterest income was
Noninterest income was
Noninterest Expense
Noninterest expense was
The increase in noninterest expense of
On December 16, 2021, the Bank, entered into a consent order with the Office of the Comptroller of the Currency, or OCC, regarding BSA/AML compliance matters, or the OCC Consent Order. Under the OCC Consent Order, the Bank paid a civil money penalty of
On December 15, 2021, the Bank entered into a consent order with the Financial Crimes Enforcement Network (“FinCEN”) regarding BSA compliance matters, or the FinCEN Consent Order. Under the terms of the FinCEN Consent Order, the Bank paid a civil money penalty of
Income Taxes
Income tax expense was
Income tax expense was
The differences between the federal statutory rate of
Balance Sheet Highlights
Loans
Loans excluding loans held for sale were
The decrease in loans was also impacted by the decrease in the Company’s PPP loans which were
In support of customers impacted by the COVID-19 pandemic, the Company offered relief through payment deferrals during 2020 and 2021. The Company had 7 loans subject to such deferral arrangements with outstanding principal balances of
Cash and Cash Equivalents
Cash and cash equivalents decreased
Securities
Securities were
Deposits and Borrowings
Total deposits were
The Company defines total borrowings as the total of Federal Home Loan Bank advances and notes payable. Total borrowings were Federal Home Loan Bank advances of
Capital
At December 31, 2021, the Company continued to be well capitalized and maintained strong capital ratios under bank regulatory requirements. The Company’s total risk-based capital ratio was
The ratio of tangible equity to tangible assets was
Non-GAAP Financial Measures
This earnings release contains certain non-GAAP financial measures including “tangible book value,” “tangible book value per share,” and “tangible equity to tangible assets,” which are supplemental measures that are not required by, or are not presented in accordance with, GAAP. Please refer to the table titled “Non-GAAP to GAAP Reconciliation” at the end of this earnings release for a reconciliation of these non-GAAP financial measures.
Conference Call Information
The Company will hold a conference call to discuss fourth quarter 2021 and annual financial results on Friday, January 28, 2022 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). Investors and interested parties may listen to the teleconference via telephone by calling (877) 620-1733 if calling from the U.S. or Canada (or (470) 414-9785 if calling from outside the U.S.). The conference call ID number is 6593549. To access the live webcast of the conference call, individuals can visit the Investor Relations page of the Company’s website: https://ir.cbtxinc.com/events-and-presentations. An archived edition of the earnings webcast will also be posted on the Company’s website later that day and will remain available to interested parties via the same link for one year.
The conference call will contain forward-looking statements in addition to statements of historical fact. The actual achievement of any forecasted results or the unfolding of future economic or business developments in a way anticipated or projected by the Company involves numerous risks and uncertainties that may cause the Company’s actual performance to be materially different from that stated or implied in the forward-looking statements. Such risks and uncertainties include, among other things, risks discussed within the “Risk Factors” section of the Company’s most recent Forms 10-Q and 10-K and subsequent 8-Ks.
About CBTX, Inc.
CBTX, Inc. is the bank holding company for CommunityBank of Texas, N.A., a community bank, offering commercial banking solutions to small and mid-sized businesses and professionals in Houston, Dallas, Beaumont and surrounding communities in Texas. Visit www.communitybankoftx.com for more information.
Forward-Looking Statements
This earnings release may contain certain forward-looking statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about the Company and its subsidiary. Forward-looking statements include information regarding the Company’s future financial performance, business and growth strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to: natural disasters and adverse weather on the Company’s market area, acts of terrorism, pandemics, an outbreak of hostilities or other international or domestic calamities and other matters beyond the Company’s control; the Company’s ability to manage the economic risks related to the impact of the COVID-19 pandemic (including risks related to its customers’ credit quality, deferrals and modifications to loans); the geographic concentration of the Company’s markets in Houston and Beaumont, Texas; the Company’s ability to manage changes and the continued health or availability of management personnel; the amount of nonperforming and classified assets that the Company holds and the time and effort necessary to resolve nonperforming assets; deterioration of asset quality; interest rate risk associated with the Company’s business; national business and economic conditions in general, in the financial services industry and within the Company’s primary markets; sustained instability of the oil and gas industry in general and within Texas; the composition of the Company’s loan portfolio, including the identity of the Company’s borrowers and the concentration of loans in specialized industries; changes in the value of collateral securing the Company’s loans; the Company’s ability to maintain important deposit customer relationships and its reputation; the Company’s ability to maintain effective internal control over financial reporting; the Company’s ability to pursue available remedies in the event of a loan default for PPP loans and the risk of holding such loans at unfavorable interest rates and on terms that are less favorable than those with customers to whom the Company would have otherwise lent; volatility and direction of market interest rates; liquidity risks associated with the Company’s business; systems failures, interruptions or breaches involving the Company’s information technology and telecommunications systems or third- or fourth-party servicers; the failure of certain third- or fourth-party vendors to perform; the institution and outcome of litigation and other legal proceedings against the Company or to which it may become subject; the operational risks associated with the Company’s business; the costs, effects and results of regulatory examinations, investigations, or reviews or the ability to obtain required regulatory approvals; changes in the laws, rules, regulations, interpretations or policies relating to financial institution, accounting, tax, trade, monetary and fiscal matters; governmental or regulatory responses to the COVID-19 pandemic that may impact the Company’s loan portfolio and forbearance practice; further government intervention in the U.S. financial system that may impact how the Company achieves its performance goals; the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized; disruption to the parties’ businesses as a result of the announcement and pendency of the merger; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the risk that the integration of each party’s operations will be materially delayed or will be more costly or difficult than expected or that the parties are otherwise unable to successfully integrate each party’s businesses into the other’s businesses; the failure to obtain the necessary approvals by the shareholders of Allegiance or the Company; the amount of the costs, fees, expenses and charges related to the merger; the ability by each of Allegiance and the Company to obtain required governmental approvals of the merger (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction); reputational risk and the reaction of each company’s customers, suppliers, employees or other business partners to the merger; the failure of the closing conditions in the merger agreement to be satisfied, or any unexpected delay in closing the merger; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the dilution caused by the Company’s issuance of additional shares of its common stock in the merger; general competitive, economic, political and market conditions; and other factors that may affect future results of the Company and Allegiance including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; and other actions of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and OCC and legislative and regulatory actions and reforms; and other risks, uncertainties, and factors that are discussed from time to time in the Company’s reports and documents filed with the SEC. Additionally, many of these risks and uncertainties have been elevated by and may continue to be elevated by the COVID-19 pandemic.
The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC, and other reports and statements that the Company has filed with the SEC. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what it anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict which will arise. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Copies of the SEC filings for the Company are available for download free of charge from www.communitybankoftx.com under the Investor Relations tab.
Allegiance and the Company disclaim any obligation and do not intend to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Information about the Merger and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.
In connection with the proposed merger, the Company intends to file a registration statement on Form S-4 with the SEC to register the shares of the Company’s common stock that will be issued to Allegiance shareholders in connection with the merger. The registration statement will include a joint proxy statement/prospectus and other relevant materials in connection with the proposed merger, which will be sent to the shareholders of the Company and Allegiance seeking their approval of the proposed merger.
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN CONNECTION WITH THE PROPOSED MERGER BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT ALLEGIANCE, THE COMPANY AND THE PROPOSED MERGER.
Investors and security holders may obtain free copies of these documents, once they are filed, and other documents filed with the SEC by Allegiance or the Company through the website maintained by the SEC at https://www.sec.gov. Documents filed with the SEC by the Company will be available free of charge by accessing the Company’s website at www.communitybankoftx.com under the heading “Investor Relations” or, alternatively, by directing a request by mail or telephone to CBTX, Inc., 9 Greenway Plaza, Suite 110, Houston, Texas 77046, Attn: Investor Relations, (713) 210-7600, and documents filed with the SEC by Allegiance will be available free of charge by accessing Allegiance’s website at www.allegiancebank.com under the heading “Investor Relations” or, alternatively, by directing a request by mail or telephone to Allegiance Bancshares, Inc., 8847 West Sam Houston Parkway, N., Suite 200, Houston, Texas 77040, (281) 894-3200.
Participants in the Solicitation
The Company, Allegiance and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of the Company and Allegiance in connection with the proposed merger. Certain information regarding the interests of these participants and a description of their direct or indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding the proposed merger when it becomes available. Additional information about the directors and executive officers of the Company and their ownership of the Company’s common stock is set forth in the Company’s proxy statement for its annual meeting of shareholders, filed with the SEC on April 14, 2021. Additional information about the directors and executive officers of Allegiance and their ownership of Allegiance’s common stock is set forth in Allegiance’s proxy statement for its annual meeting of shareholders, filed with the SEC on March 10, 2021. These documents can be obtained free of charge from the sources described above.
CBTX, INC. AND SUBSIDIARY
Financial Highlights
(In thousands, except per share data and percentages)
| Three Months Ended | Years Ended | |||||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | ||||||||||||||||||||||
| Profitability: | ||||||||||||||||||||||||||||
| Net income (loss) | $ | (545 | ) | $ | 14,421 | $ | 11,703 | $ | 10,019 | $ | 10,236 | $ | 35,598 | $ | 26,361 | |||||||||||||
| Basic earnings (loss) per share | $ | (0.02 | ) | $ | 0.59 | $ | 0.48 | $ | 0.41 | $ | 0.42 | $ | 1.46 | $ | 1.06 | |||||||||||||
| Diluted earnings (loss) per share | $ | (0.02 | ) | $ | 0.59 | $ | 0.48 | $ | 0.41 | $ | 0.41 | $ | 1.45 | $ | 1.06 | |||||||||||||
| Return on average assets(1) | (0.05 | )% | 1.37 | % | 1.14 | % | 1.03 | % | 1.05 | % | 0.86 | % | 0.70 | % | ||||||||||||||
| Return on average shareholders' equity(1) | (0.38 | )% | 10.15 | % | 8.49 | % | 7.39 | % | 7.47 | % | 6.37 | % | 4.85 | % | ||||||||||||||
| Net interest margin - tax equivalent(1) | 3.07 | % | 3.22 | % | 3.29 | % | 3.71 | % | 3.62 | % | 3.31 | % | 3.73 | % | ||||||||||||||
| Efficiency ratio(2) | 99.78 | % | 66.21 | % | 73.02 | % | 64.32 | % | 65.64 | % | 75.61 | % | 64.23 | % | ||||||||||||||
| Liquidity and Capital Ratios: | ||||||||||||||||||||||||||||
| Total shareholders' equity to total assets | 12.53 | % | 13.41 | % | 13.68 | % | 13.54 | % | 13.84 | % | 12.53 | % | 13.84 | % | ||||||||||||||
| Tangible equity to tangible assets(3) | 10.85 | % | 11.64 | % | 11.84 | % | 11.67 | % | 11.94 | % | 10.85 | % | 11.94 | % | ||||||||||||||
| Common equity tier 1 capital ratio | 15.31 | % | 16.87 | % | 16.46 | % | 15.75 | % | 15.45 | % | 15.31 | % | 15.45 | % | ||||||||||||||
| Tier 1 risk-based capital ratio | 15.31 | % | 16.87 | % | 16.46 | % | 15.75 | % | 15.45 | % | 15.31 | % | 15.45 | % | ||||||||||||||
| Total risk-based capital ratio | 16.42 | % | 18.12 | % | 17.72 | % | 17.00 | % | 16.71 | % | 16.42 | % | 16.71 | % | ||||||||||||||
| Tier 1 leverage ratio | 11.22 | % | 11.69 | % | 11.63 | % | 11.90 | % | 12.00 | % | 11.22 | % | 12.00 | % | ||||||||||||||
| Credit Quality: | ||||||||||||||||||||||||||||
| Allowance for credit losses for loans to loans excluding loans held for sale | 1.09 | % | 1.23 | % | 1.36 | % | 1.41 | % | 1.39 | % | 1.09 | % | 1.39 | % | ||||||||||||||
| Nonperforming assets to total assets | 0.50 | % | 0.49 | % | 0.52 | % | 0.59 | % | 0.61 | % | 0.50 | % | 0.61 | % | ||||||||||||||
| Nonperforming loans to loans excluding loans held for sale | 0.79 | % | 0.79 | % | 0.77 | % | 0.81 | % | 0.82 | % | 0.79 | % | 0.82 | % | ||||||||||||||
| Net charge-offs (recoveries) to average loans(1) | (0.01 | )% | (0.01 | )% | (0.07 | )% | 0.01 | % | 0.49 | % | (0.02 | )% | 0.13 | % | ||||||||||||||
| Other Data: | ||||||||||||||||||||||||||||
| Weighted average common shares outstanding - basic | 24,437 | 24,432 | 24,447 | 24,508 | 24,621 | 24,456 | 24,761 | |||||||||||||||||||||
| Weighted average common shares outstanding - diluted | 24,575 | 24,544 | 24,571 | 24,616 | 24,678 | 24,572 | 24,803 | |||||||||||||||||||||
| Common shares outstanding at period end | 24,488 | 24,420 | 24,450 | 24,442 | 24,613 | 24,488 | 24,613 | |||||||||||||||||||||
| Dividends per share | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.10 | $ | 0.52 | $ | 0.40 | ||||||||||||||
| Book value per share | $ | 22.96 | $ | 23.12 | $ | 22.75 | $ | 22.31 | $ | 22.20 | $ | 22.96 | $ | 22.20 | ||||||||||||||
| Tangible book value per share(3) | $ | 19.50 | $ | 19.65 | $ | 19.28 | $ | 18.84 | $ | 18.74 | $ | 19.50 | $ | 18.74 | ||||||||||||||
| Employees - full-time equivalents | 506 | 520 | 529 | 517 | 511 | 506 | 511 | |||||||||||||||||||||
(1) Annualized.
(2) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
(3) Non-GAAP financial measure. See the table captioned “Non-GAAP to GAAP Reconciliation” at the end of this earnings release.
CBTX, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(In thousands)
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||
| Loans excluding loans held for sale | $ | 2,867,524 | $ | 2,608,402 | $ | 2,729,496 | $ | 2,891,632 | $ | 2,924,117 | ||||||||||
| Allowance for credit losses for loans | (31,345 | ) | (32,208 | ) | (37,183 | ) | (40,874 | ) | (40,637 | ) | ||||||||||
| Loans, net | 2,836,179 | 2,576,194 | 2,692,313 | 2,850,758 | 2,883,480 | |||||||||||||||
| Cash and equivalents | 950,146 | 998,785 | 788,409 | 604,671 | 538,007 | |||||||||||||||
| Securities | 425,046 | 359,539 | 309,233 | 289,091 | 237,281 | |||||||||||||||
| Premises and equipment | 58,417 | 59,235 | 59,987 | 60,551 | 61,152 | |||||||||||||||
| Goodwill | 80,950 | 80,950 | 80,950 | 80,950 | 80,950 | |||||||||||||||
| Other intangible assets | 3,658 | 3,702 | 3,846 | 3,991 | 4,171 | |||||||||||||||
| Loans held for sale | 164 | 327 | 808 | 1,005 | 2,673 | |||||||||||||||
| Operating lease right-to-use asset | 11,191 | 11,527 | 12,514 | 12,900 | 13,285 | |||||||||||||||
| Other assets | 120,250 | 118,860 | 118,474 | 124,722 | 128,218 | |||||||||||||||
| Total assets | $ | 4,486,001 | $ | 4,209,119 | $ | 4,066,534 | $ | 4,028,639 | $ | 3,949,217 | ||||||||||
| Noninterest-bearing deposits | $ | 1,784,981 | $ | 1,628,144 | $ | 1,556,784 | $ | 1,621,408 | $ | 1,476,425 | ||||||||||
| Interest-bearing deposits | 2,046,303 | 1,903,491 | 1,860,002 | 1,763,339 | 1,825,369 | |||||||||||||||
| Total deposits | 3,831,284 | 3,531,635 | 3,416,786 | 3,384,747 | 3,301,794 | |||||||||||||||
| Federal Home Loan Bank advances | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | |||||||||||||||
| Operating lease liabilities | 14,142 | 14,556 | 15,590 | 16,060 | 16,447 | |||||||||||||||
| Other liabilities | 28,450 | 48,335 | 27,931 | 32,483 | 34,525 | |||||||||||||||
| Total liabilities | 3,923,876 | 3,644,526 | 3,510,307 | 3,483,290 | 3,402,766 | |||||||||||||||
| Total shareholders’ equity | 562,125 | 564,593 | 556,227 | 545,349 | 546,451 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,486,001 | $ | 4,209,119 | $ | 4,066,534 | $ | 4,028,639 | $ | 3,949,217 | ||||||||||
CBTX, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income
(In thousands)
| Three Months Ended | Years Ended | |||||||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | 12/31/2021 | 12/31/2020 | ||||||||||||||||||||
| Interest income | ||||||||||||||||||||||||||
| Interest and fees on loans | $ | 29,882 | $ | 30,765 | $ | 30,793 | $ | 33,165 | $ | 32,886 | $ | 124,605 | $ | 131,678 | ||||||||||||
| Securities | 1,796 | 1,435 | 1,332 | 1,173 | 1,070 | 5,736 | 4,768 | |||||||||||||||||||
| Interest-bearing deposits at other financial institutions | 383 | 340 | 223 | 177 | 168 | 1,123 | 1,568 | |||||||||||||||||||
| Equity investments | 168 | 157 | 158 | 146 | 170 | 629 | 679 | |||||||||||||||||||
| Total interest income | 32,229 | 32,697 | 32,506 | 34,661 | 34,294 | 132,093 | 138,693 | |||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Deposits | 1,180 | 1,227 | 1,267 | 1,350 | 1,549 | 5,024 | 9,168 | |||||||||||||||||||
| Federal Home Loan Bank advances | 222 | 221 | 221 | 221 | 221 | 885 | 903 | |||||||||||||||||||
| Other interest-bearing liabilities | 17 | — | — | — | 4 | 17 | 16 | |||||||||||||||||||
| Total interest expense | 1,419 | 1,448 | 1,488 | 1,571 | 1,774 | 5,926 | 10,087 | |||||||||||||||||||
| Net interest income | 30,810 | 31,249 | 31,018 | 33,090 | 32,520 | 126,167 | 128,606 | |||||||||||||||||||
| Provision (recapture) for credit losses | ||||||||||||||||||||||||||
| Provision (recapture) for credit losses for loans | (901 | ) | (5,057 | ) | (4,190 | ) | 286 | 229 | (9,862 | ) | 18,074 | |||||||||||||||
| Provision (recapture) for credit losses for unfunded commitments | (306 | ) | 162 | (893 | ) | 126 | (364 | ) | (911 | ) | 818 | |||||||||||||||
| Total provision (recapture) for credit losses | (1,207 | ) | (4,895 | ) | (5,083 | ) | 412 | (135 | ) | (10,773 | ) | 18,892 | ||||||||||||||
| Net interest income after provision (recapture) for credit losses | 32,017 | 36,144 | 36,101 | 32,678 | 32,655 | 136,940 | 109,714 | |||||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||
| Deposit account service charges | 1,370 | 1,352 | 1,167 | 1,193 | 1,270 | 5,082 | 5,026 | |||||||||||||||||||
| Card interchange fees | 1,081 | 1,048 | 1,095 | 976 | 999 | 4,200 | 3,831 | |||||||||||||||||||
| Earnings on bank-owned life insurance | 385 | 2,323 | 390 | 390 | 407 | 3,488 | 2,422 | |||||||||||||||||||
| Net gain on sales of assets | 910 | 360 | 366 | 192 | 379 | 1,828 | 755 | |||||||||||||||||||
| Other | 354 | 479 | 473 | 360 | 467 | 1,666 | 2,747 | |||||||||||||||||||
| Total noninterest income | 4,100 | 5,562 | 3,491 | 3,111 | 3,522 | 16,264 | 14,781 | |||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||
| Salaries and employee benefits | 16,609 | 15,000 | 14,734 | 14,188 | 12,848 | 60,531 | 55,415 | |||||||||||||||||||
| Occupancy expense | 2,606 | 2,660 | 2,597 | 2,521 | 2,628 | 10,384 | 10,106 | |||||||||||||||||||
| Professional and director fees | 756 | 1,567 | 2,441 | 1,703 | 3,209 | 6,467 | 8,348 | |||||||||||||||||||
| Data processing and software | 1,716 | 1,629 | 1,661 | 1,576 | 1,330 | 6,582 | 5,369 | |||||||||||||||||||
| Regulatory fees | 8,366 | 478 | 501 | 556 | 748 | 9,901 | 1,798 | |||||||||||||||||||
| Advertising, marketing and business development | 263 | 493 | 510 | 285 | 438 | 1,551 | 1,500 | |||||||||||||||||||
| Telephone and communications | 471 | 516 | 550 | 463 | 455 | 2,000 | 1,752 | |||||||||||||||||||
| Security and protection expense | 439 | 425 | 537 | 390 | 423 | 1,791 | 1,447 | |||||||||||||||||||
| Amortization of intangibles | 179 | 182 | 186 | 191 | 197 | 738 | 846 | |||||||||||||||||||
| Other expenses | 3,427 | 1,422 | 1,480 | 1,412 | 1,382 | 7,741 | 5,519 | |||||||||||||||||||
| Total noninterest expense | 34,832 | 24,372 | 25,197 | 23,285 | 23,658 | 107,686 | 92,100 | |||||||||||||||||||
| Net income before income tax expense | 1,285 | 17,334 | 14,395 | 12,504 | 12,519 | 45,518 | 32,395 | |||||||||||||||||||
| Income tax expense | 1,830 | 2,913 | 2,692 | 2,485 | 2,283 | 9,920 | 6,034 | |||||||||||||||||||
| Net income (loss) | $ | (545 | ) | $ | 14,421 | $ | 11,703 | $ | 10,019 | $ | 10,236 | $ | 35,598 | $ | 26,361 | |||||||||||
CBTX, INC. AND SUBSIDIARY
Net Interest Margin
(In thousands, except percentages)
| Three Months Ended | ||||||||||||||||||||||||||||||
| December 31, 2021 | September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||
| Average | Interest | Average | Average | Interest | Average | Average | Interest | Average | ||||||||||||||||||||||
| Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ | ||||||||||||||||||||||
| Balance | Interest Paid | Rate(1) | Balance | Interest Paid | Rate(1) | Balance | Interest Paid | Rate(1) | ||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||
| Total loans(2) | $ | 2,702,211 | $ | 29,882 | 4.39 | % | $ | 2,702,248 | $ | 30,765 | 4.52 | % | $ | 2,961,622 | $ | 32,886 | 4.42 | % | ||||||||||||
| Securities | 404,064 | 1,796 | 1.76 | % | 327,968 | 1,435 | 1.74 | % | 236,233 | 1,070 | 1.80 | % | ||||||||||||||||||
| Interest-bearing deposits at other financial institutions | 921,545 | 383 | 0.16 | % | 854,406 | 340 | 0.16 | % | 388,936 | 168 | 0.17 | % | ||||||||||||||||||
| Equity investments | 13,374 | 168 | 4.98 | % | 13,367 | 157 | 4.66 | % | 15,346 | 170 | 4.41 | % | ||||||||||||||||||
| Total interest-earning assets | 4,041,194 | $ | 32,229 | 3.16 | % | 3,897,989 | $ | 32,697 | 3.33 | % | 3,602,137 | $ | 34,294 | 3.79 | % | |||||||||||||||
| Allowance for credit losses for loans | (32,840 | ) | (36,945 | ) | (44,233 | ) | ||||||||||||||||||||||||
| Noninterest-earning assets | 312,308 | 313,901 | 321,303 | |||||||||||||||||||||||||||
| Total assets | $ | 4,320,662 | $ | 4,174,945 | $ | 3,879,207 | ||||||||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 1,941,177 | $ | 1,180 | 0.24 | % | $ | 1,895,617 | $ | 1,227 | 0.26 | % | $ | 1,744,557 | $ | 1,549 | 0.35 | % | ||||||||||||
| Federal Home Loan Bank advances | 50,000 | 222 | 1.76 | % | 50,000 | 221 | 1.75 | % | 50,163 | 221 | 1.76 | % | ||||||||||||||||||
| Other interest-bearing liabilities | 33 | 17 | — | — | — | — | 1,426 | 4 | 1.12 | % | ||||||||||||||||||||
| Total interest-bearing liabilities | 1,991,210 | $ | 1,419 | 0.28 | % | 1,945,617 | $ | 1,448 | 0.30 | % | 1,796,146 | $ | 1,774 | 0.39 | % | |||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,706,673 | 1,612,985 | 1,482,753 | |||||||||||||||||||||||||||
| Other liabilities | 54,612 | 52,712 | 55,174 | |||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | 1,761,285 | 1,665,697 | 1,537,927 | |||||||||||||||||||||||||||
| Shareholders’ equity | 568,167 | 563,631 | 545,134 | |||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,320,662 | $ | 4,174,945 | $ | 3,879,207 | ||||||||||||||||||||||||
| Net interest income | $ | 30,810 | $ | 31,249 | $ | 32,520 | ||||||||||||||||||||||||
| Net interest spread(3) | 2.88 | % | 3.03 | % | 3.40 | % | ||||||||||||||||||||||||
| Net interest margin(4) | 3.02 | % | 3.18 | % | 3.59 | % | ||||||||||||||||||||||||
| Net interest margin - tax equivalent(5) | 3.07 | % | 3.22 | % | 3.62 | % | ||||||||||||||||||||||||
(1) Annualized.
(2) Includes average outstanding balances related to loans held for sale.
(3) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
(4) Net interest margin is equal to net interest income divided by average interest-earning assets.
(5) Tax equivalent adjustments of
CBTX, INC. AND SUBSIDIARY
Net Interest Margin – Year to Date
(In thousands, except percentages)
| Years Ended December 31, | ||||||||||||||||||||
| 2021 | 2020 | |||||||||||||||||||
| Average | Interest | Average | Average | Interest | Average | |||||||||||||||
| Outstanding | Earned/ | Yield/ | Outstanding | Earned/ | Yield/ | |||||||||||||||
| (Dollars in thousands) | Balance | Interest Paid | Rate(1) | Balance | Interest Paid | Rate(1) | ||||||||||||||
| Assets | ||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Total loans(2) | $ | 2,784,663 | $ | 124,605 | 4.47 | % | $ | 2,862,911 | $ | 131,678 | 4.60 | % | ||||||||
| Securities | 323,952 | 5,736 | 1.77 | % | 236,625 | 4,768 | 2.02 | % | ||||||||||||
| Interest-bearing deposits at other financial institutions | 731,996 | 1,123 | 0.15 | % | 366,628 | 1,568 | 0.43 | % | ||||||||||||
| Equity investments | 14,350 | 629 | 4.38 | % | 14,874 | 679 | 4.57 | % | ||||||||||||
| Total interest-earning assets | 3,854,961 | $ | 132,093 | 3.43 | % | 3,481,038 | $ | 138,693 | 3.98 | % | ||||||||||
| Allowance for credit losses for loans | (37,892 | ) | (35,448 | ) | ||||||||||||||||
| Noninterest-earning assets | 316,575 | 312,672 | ||||||||||||||||||
| Total assets | $ | 4,133,644 | $ | 3,758,262 | ||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposits | $ | 1,870,148 | $ | 5,024 | 0.27 | % | $ | 1,703,543 | $ | 9,168 | 0.54 | % | ||||||||
| Federal Home Loan Bank advances | 50,000 | 885 | 1.77 | % | 55,205 | 903 | 1.64 | % | ||||||||||||
| Other interest-bearing liabilities | 8 | 17 | — | 1,631 | 16 | 0.98 | % | |||||||||||||
| Total interest-bearing liabilities | 1,920,156 | $ | 5,926 | 0.31 | % | 1,760,379 | $ | 10,087 | 0.57 | % | ||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing deposits | 1,603,006 | 1,404,027 | ||||||||||||||||||
| Other liabilities | 51,885 | 50,464 | ||||||||||||||||||
| Total noninterest-bearing liabilities | 1,654,891 | 1,454,491 | ||||||||||||||||||
| Shareholders’ equity | 558,597 | 543,392 | ||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,133,644 | $ | 3,758,262 | ||||||||||||||||
| Net interest income | $ | 126,167 | $ | 128,606 | ||||||||||||||||
| Net interest spread(3) | 3.12 | % | 3.41 | % | ||||||||||||||||
| Net interest margin(4) | 3.27 | % | 3.69 | % | ||||||||||||||||
| Net interest margin - tax equivalent(5) | 3.31 | % | 3.73 | % | ||||||||||||||||
(1) Annualized.
(2) Includes average outstanding balances related to loans held for sale.
(3) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
(4) Net interest margin is equal to net interest income divided by average interest-earning assets.
(5) Tax equivalent adjustments of
CBTX, INC. AND SUBSIDIARY
Rate/Volume Analysis
(In thousands)
| Three Months Ended December 31, 2021, | ||||||||||||||
| Compared to Three Months September 30, 2021 | ||||||||||||||
| Increase (Decrease) due to | ||||||||||||||
| (Dollars in thousands) | Rate | Volume | Days | Total | ||||||||||
| Interest-earning assets: | ||||||||||||||
| Total loans | $ | (883 | ) | $ | — | $ | — | $ | (883 | ) | ||||
| Securities | 27 | 334 | — | 361 | ||||||||||
| Interest-bearing deposits at other financial institutions | 16 | 27 | — | 43 | ||||||||||
| Equity investments | 11 | — | — | 11 | ||||||||||
| Total increase (decrease) in interest income | (829 | ) | 361 | — | (468 | ) | ||||||||
| Interest-bearing liabilities: | ||||||||||||||
| Interest-bearing deposits | (77 | ) | 30 | — | (47 | ) | ||||||||
| Federal Home Loan Bank advances | 1 | — | — | 1 | ||||||||||
| Other interest-bearing liabilities | 17 | — | — | 17 | ||||||||||
| Total increase (decrease) in interest expense | (59 | ) | 30 | — | (29 | ) | ||||||||
| Increase (decrease) in net interest income | $ | (770 | ) | $ | 331 | $ | — | $ | (439 | ) | ||||
| Three Months Ended December 31, 2021, | |||||||||||||||
| Compared to Three Months Ended December 31, 2020 | |||||||||||||||
| Increase (Decrease) due to | |||||||||||||||
| (Dollars in thousands) | Rate | Volume | Days | Total | |||||||||||
| Interest-earning assets: | |||||||||||||||
| Total loans | $ | (122 | ) | $ | (2,882 | ) | $ | — | $ | (3,004 | ) | ||||
| Securities | (33 | ) | 759 | — | 726 | ||||||||||
| Interest-bearing deposits at other financial institutions | (13 | ) | 228 | — | 215 | ||||||||||
| Equity investments | 20 | (22 | ) | — | (2 | ) | |||||||||
| Total decrease in interest income | (148 | ) | (1,917 | ) | — | (2,065 | ) | ||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Interest-bearing deposits | (542 | ) | 173 | — | (369 | ) | |||||||||
| Federal Home Loan Bank advances | 2 | (1 | ) | — | 1 | ||||||||||
| Other interest-bearing liabilities | 13 | — | — | 13 | |||||||||||
| Total increase (decrease) in interest expense | (527 | ) | 172 | — | (355 | ) | |||||||||
| Increase (decrease) in net interest income | $ | 379 | $ | (2,089 | ) | $ | — | $ | (1,710 | ) | |||||
| Year Ended December 31, 2021, | ||||||||||||||||
| Compared to Year Ended December 31, 2020 | ||||||||||||||||
| Increase (Decrease) due to | ||||||||||||||||
| (Dollars in thousands) | Rate | Volume | Days | Total | ||||||||||||
| Interest-earning assets: | ||||||||||||||||
| Total loans | $ | (3,113 | ) | $ | (3,599 | ) | $ | (361 | ) | $ | (7,073 | ) | ||||
| Securities | (783 | ) | 1,764 | (13 | ) | 968 | ||||||||||
| Interest-bearing deposits at other financial institutions | (2,012 | ) | 1,571 | (4 | ) | (445 | ) | |||||||||
| Equity investments | (24 | ) | (24 | ) | (2 | ) | (50 | ) | ||||||||
| Total decrease in interest income | (5,932 | ) | (288 | ) | (380 | ) | (6,600 | ) | ||||||||
| Interest-bearing liabilities: | ||||||||||||||||
| Interest-bearing deposits | (5,019 | ) | 900 | (25 | ) | (4,144 | ) | |||||||||
| Federal Home Loan Bank advances | 69 | (85 | ) | (2 | ) | (18 | ) | |||||||||
| Other interest-bearing liabilities | 2 | (1 | ) | — | 1 | |||||||||||
| Total increase (decrease) in interest expense | (4,948 | ) | 814 | (27 | ) | (4,161 | ) | |||||||||
| Decrease in net interest income | $ | (984 | ) | $ | (1,102 | ) | $ | (353 | ) | $ | (2,439 | ) | ||||
CBTX, INC. AND SUBSIDIARY
Average Balances and Yields
| Three Months Ended | ||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||
| Average Outstanding Balances (in thousands): | ||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Total loans(1) | $ | 2,702,211 | $ | 2,702,248 | $ | 2,835,995 | $ | 2,901,291 | $ | 2,961,622 | ||||||||||
| Securities | 404,064 | 327,968 | 302,808 | 259,341 | 236,233 | |||||||||||||||
| Interest-bearing deposits at other financial institutions | 921,545 | 854,406 | 670,508 | 475,279 | 388,936 | |||||||||||||||
| Equity investments | 13,374 | 13,367 | 15,338 | 15,353 | 15,346 | |||||||||||||||
| Total interest-earning assets | 4,041,194 | 3,897,989 | 3,824,649 | 3,651,264 | 3,602,137 | |||||||||||||||
| Allowance for credit losses for loans | (32,840 | ) | (36,945 | ) | (40,806 | ) | (41,078 | ) | (44,233 | ) | ||||||||||
| Noninterest-earning assets | 312,308 | 313,901 | 317,115 | 321,334 | 321,303 | |||||||||||||||
| Total assets | $ | 4,320,662 | $ | 4,174,945 | $ | 4,100,958 | $ | 3,931,520 | $ | 3,879,207 | ||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposits | $ | 1,941,177 | $ | 1,895,617 | $ | 1,839,812 | $ | 1,802,175 | $ | 1,744,557 | ||||||||||
| Federal Home Loan Bank advances | 50,000 | 50,000 | 50,000 | 50,000 | 50,163 | |||||||||||||||
| Other interest-bearing liabilities | 33 | — | — | — | 1,426 | |||||||||||||||
| Total interest-bearing liabilities | 1,991,210 | 1,945,617 | 1,889,812 | 1,852,175 | 1,796,146 | |||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing deposits | 1,706,673 | 1,612,985 | 1,611,565 | 1,478,183 | 1,482,753 | |||||||||||||||
| Other liabilities | 54,612 | 52,712 | 46,774 | 51,634 | 55,174 | |||||||||||||||
| Total noninterest-bearing liabilities | 1,761,285 | 1,665,697 | 1,658,339 | 1,529,817 | 1,537,927 | |||||||||||||||
| Shareholders’ equity | 568,167 | 563,631 | 552,807 | 549,528 | 545,134 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,320,662 | $ | 4,174,945 | $ | 4,100,958 | $ | 3,931,520 | $ | 3,879,207 | ||||||||||
| Yield Trend(2) | ||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Total loans | 4.39 | % | 4.52 | % | 4.36 | % | 4.64 | % | 4.42 | % | ||||||||||
| Securities | 1.76 | % | 1.74 | % | 1.76 | % | 1.84 | % | 1.80 | % | ||||||||||
| Interest-bearing deposits at other financial institutions | 0.16 | % | 0.16 | % | 0.13 | % | 0.15 | % | 0.17 | % | ||||||||||
| Equity investments | 4.98 | % | 4.66 | % | 4.13 | % | 3.86 | % | 4.41 | % | ||||||||||
| Total interest-earning assets | 3.16 | % | 3.33 | % | 3.41 | % | 3.85 | % | 3.79 | % | ||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposits | 0.24 | % | 0.26 | % | 0.28 | % | 0.30 | % | 0.35 | % | ||||||||||
| Federal Home Loan Bank advances | 1.76 | % | 1.75 | % | 1.77 | % | 1.79 | % | 1.76 | % | ||||||||||
| Other interest-bearing liabilities | — | — | — | — | 1.12 | % | ||||||||||||||
| Total interest-bearing liabilities | 0.28 | % | 0.30 | % | 0.32 | % | 0.34 | % | 0.39 | % | ||||||||||
| Net interest spread(3) | 2.88 | % | 3.03 | % | 3.09 | % | 3.51 | % | 3.40 | % | ||||||||||
| Net interest margin(4) | 3.02 | % | 3.18 | % | 3.25 | % | 3.68 | % | 3.59 | % | ||||||||||
| Net interest margin - tax equivalent(5) | 3.07 | % | 3.22 | % | 3.29 | % | 3.71 | % | 3.62 | % | ||||||||||
(1) Includes average outstanding balances of loans held for sale.
(2) Annualized.
(3) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
(4) Net interest margin is equal to net interest income divided by average interest-earning assets.
(5) Tax equivalent adjustments were computed using a federal income tax rate of
CBTX, INC. AND SUBSIDIARY
Loans and Deposits Period End Balances
(In thousands, except percentages)
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | |||||||||||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||
| Loan Portfolio: | |||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 634,384 | 22.0 | % | $ | 596,251 | 22.8 | % | $ | 658,733 | 24.0 | % | $ | 756,707 | 26.1 | % | $ | 742,957 | 25.3 | % | |||||||||||||||
| Real estate: | |||||||||||||||||||||||||||||||||||
| Commercial real estate | 1,091,969 | 38.0 | % | 1,029,137 | 39.3 | % | 1,060,968 | 38.7 | % | 1,072,263 | 36.9 | % | 1,041,998 | 35.5 | % | ||||||||||||||||||||
| Construction and development | 460,719 | 16.0 | % | 393,541 | 15.0 | % | 426,007 | 15.5 | % | 464,091 | 16.0 | % | 522,705 | 17.8 | % | ||||||||||||||||||||
| 1-4 family residential | 277,273 | 9.6 | % | 204,151 | 7.8 | % | 211,328 | 7.7 | % | 224,880 | 7.7 | % | 239,872 | 8.2 | % | ||||||||||||||||||||
| Multi-family residential | 286,396 | 10.0 | % | 285,852 | 10.9 | % | 265,252 | 9.7 | % | 271,719 | 9.4 | % | 258,346 | 8.8 | % | ||||||||||||||||||||
| Consumer | 28,090 | 1.0 | % | 27,930 | 1.1 | % | 31,444 | 1.1 | % | 32,767 | 1.1 | % | 33,884 | 1.1 | % | ||||||||||||||||||||
| Agriculture | 7,941 | 0.3 | % | 8,780 | 0.4 | % | 8,283 | 0.4 | % | 6,974 | 0.2 | % | 8,670 | 0.3 | % | ||||||||||||||||||||
| Other | 89,655 | 3.1 | % | 71,915 | 2.7 | % | 78,607 | 2.9 | % | 74,387 | 2.6 | % | 88,238 | 3.0 | % | ||||||||||||||||||||
| Gross loans | 2,876,427 | 100.0 | % | 2,617,557 | 100.0 | % | 2,740,622 | 100.0 | % | 2,903,788 | 100.0 | % | 2,936,670 | 100.0 | % | ||||||||||||||||||||
| Less allowance for credit losses | (31,345 | ) | (32,208 | ) | (37,183 | ) | (40,874 | ) | (40,637 | ) | |||||||||||||||||||||||||
| Less deferred fees and unearned discount | (8,739 | ) | (8,828 | ) | (10,318 | ) | (11,151 | ) | (9,880 | ) | |||||||||||||||||||||||||
| Less loans held for sale | (164 | ) | (327 | ) | (808 | ) | (1,005 | ) | (2,673 | ) | |||||||||||||||||||||||||
| Loans, net | $ | 2,836,179 | $ | 2,576,194 | $ | 2,692,313 | $ | 2,850,758 | $ | 2,883,480 | |||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand accounts | $ | 468,361 | 12.2 | % | $ | 386,196 | 10.9 | % | $ | 375,543 | 11.0 | % | $ | 368,124 | 10.9 | % | $ | 380,175 | 11.5 | % | |||||||||||||||
| Money market accounts | 1,209,659 | 31.6 | % | 1,139,167 | 32.3 | % | 1,101,091 | 32.2 | % | 995,945 | 29.4 | % | 1,039,617 | 31.5 | % | ||||||||||||||||||||
| Savings accounts | 127,031 | 3.3 | % | 118,794 | 3.4 | % | 115,823 | 3.4 | % | 112,467 | 3.3 | % | 108,167 | 3.3 | % | ||||||||||||||||||||
| Certificates and other time deposits, | 134,775 | 3.5 | % | 140,740 | 4.0 | % | 142,343 | 4.2 | % | 145,762 | 4.3 | % | 152,592 | 4.6 | % | ||||||||||||||||||||
| Certificates and other time deposits, less than | 106,477 | 2.8 | % | 118,594 | 3.4 | % | 125,202 | 3.6 | % | 141,041 | 4.2 | % | 144,818 | 4.4 | % | ||||||||||||||||||||
| Total interest-bearing deposits | 2,046,303 | 53.4 | % | 1,903,491 | 54.0 | % | 1,860,002 | 54.4 | % | 1,763,339 | 52.1 | % | 1,825,369 | 55.3 | % | ||||||||||||||||||||
| Noninterest-bearing deposits | 1,784,981 | 46.6 | % | 1,628,144 | 46.0 | % | 1,556,784 | 45.6 | % | 1,621,408 | 47.9 | % | 1,476,425 | 44.7 | % | ||||||||||||||||||||
| Total deposits | $ | 3,831,284 | 100.0 | % | $ | 3,531,635 | 100.0 | % | $ | 3,416,786 | 100.0 | % | $ | 3,384,747 | 100.0 | % | $ | 3,301,794 | 100.0 | % | |||||||||||||||
CBTX, INC. AND SUBSIDIARY
Credit Quality
(In thousands, except percentages)
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||
| Nonperforming Assets (at period end): | ||||||||||||||||||||||||
| Nonaccrual loans: | ||||||||||||||||||||||||
| Commercial and industrial | $ | 9,090 | $ | 9,773 | $ | 10,038 | $ | 12,230 | $ | 12,588 | ||||||||||||||
| Real estate: | ||||||||||||||||||||||||
| Commercial real estate | 11,512 | 10,419 | 10,572 | 10,664 | 10,665 | |||||||||||||||||||
| Construction and development | 142 | — | — | 236 | 238 | |||||||||||||||||||
| 1-4 family residential | 1,784 | 351 | 363 | 378 | 526 | |||||||||||||||||||
| Other | 40 | 42 | — | — | — | |||||||||||||||||||
| Nonaccrual loans | 22,568 | 20,585 | 20,973 | 23,508 | 24,017 | |||||||||||||||||||
| Accruing loans 90 or more days past due | — | — | — | — | — | |||||||||||||||||||
| Total nonperforming loans | 22,568 | 20,585 | 20,973 | 23,508 | 24,017 | |||||||||||||||||||
| Foreclosed assets | — | — | — | 106 | — | |||||||||||||||||||
| Total nonperforming assets | $ | 22,568 | $ | 20,585 | $ | 20,973 | $ | 23,614 | $ | 24,017 | ||||||||||||||
| Allowance for Credit Losses for Loans (at period end): | ||||||||||||||||||||||||
| Commercial and industrial | $ | 11,214 | $ | 11,401 | $ | 12,260 | $ | 13,812 | $ | 13,035 | ||||||||||||||
| Real estate: | ||||||||||||||||||||||||
| Commercial real estate | 11,015 | 11,744 | 13,260 | 14,280 | 13,798 | |||||||||||||||||||
| Construction and development | 3,310 | 3,334 | 4,453 | 5,445 | 6,089 | |||||||||||||||||||
| 1-4 family residential | 2,105 | 1,700 | 2,172 | 2,458 | 2,578 | |||||||||||||||||||
| Multi-family residential | 1,781 | 2,156 | 2,382 | 2,714 | 2,513 | |||||||||||||||||||
| Consumer | 406 | 449 | 494 | 434 | 440 | |||||||||||||||||||
| Agriculture | 88 | 109 | 115 | 107 | 137 | |||||||||||||||||||
| Other | 1,426 | 1,315 | 2,047 | 1,624 | 2,047 | |||||||||||||||||||
| Total allowance for credit losses for loans | $ | 31,345 | $ | 32,208 | $ | 37,183 | $ | 40,874 | $ | 40,637 | ||||||||||||||
| Credit Quality Ratios (at period end): | ||||||||||||||||||||||||
| Nonperforming assets to total assets | 0.50 | % | 0.49 | % | 0.52 | % | 0.59 | % | 0.61 | % | ||||||||||||||
| Nonperforming loans to loans excluding loans held for sale | 0.79 | % | 0.79 | % | 0.77 | % | 0.81 | % | 0.82 | % | ||||||||||||||
| Allowance for credit losses for loans to nonperforming loans | 138.89 | % | 156.46 | % | 177.29 | % | 173.87 | % | 169.20 | % | ||||||||||||||
| Allowance for credit losses for loans to loans excluding loans held for sale | 1.09 | % | 1.23 | % | 1.36 | % | 1.41 | % | 1.39 | % | ||||||||||||||
CBTX, INC. AND SUBSIDIARY
Allowance for Credit Losses for Loans
(In thousands, except percentages)
| Three Months Ended | ||||||||||||||||||||
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||
| Beginning balance | $ | 32,208 | $ | 37,183 | $ | 40,874 | $ | 40,637 | $ | 44,069 | ||||||||||
| Provision (recapture): | ||||||||||||||||||||
| Commercial and industrial | (227 | ) | (945 | ) | (1,955 | ) | 872 | (7 | ) | |||||||||||
| Real estate: | ||||||||||||||||||||
| Commercial real estate | (729 | ) | (1,516 | ) | (1,020 | ) | 482 | 910 | ||||||||||||
| Construction and development | (24 | ) | (1,119 | ) | (992 | ) | (644 | ) | (245 | ) | ||||||||||
| 1-4 family residential | 406 | (469 | ) | (286 | ) | (120 | ) | (293 | ) | |||||||||||
| Multi-family residential | (375 | ) | (226 | ) | (332 | ) | 201 | (604 | ) | |||||||||||
| Consumer | (42 | ) | (39 | ) | (36 | ) | (10 | ) | (68 | ) | ||||||||||
| Agriculture | (21 | ) | (11 | ) | 8 | (72 | ) | (27 | ) | |||||||||||
| Other | 111 | (732 | ) | 423 | (423 | ) | 563 | |||||||||||||
| Total provision (recapture) | (901 | ) | (5,057 | ) | (4,190 | ) | 286 | 229 | ||||||||||||
| Net (charge-offs) recoveries: | ||||||||||||||||||||
| Commercial and industrial | 40 | 86 | 403 | (95 | ) | (305 | ) | |||||||||||||
| Real estate: | ||||||||||||||||||||
| Commercial real estate | — | — | — | — | 143 | |||||||||||||||
| Construction and development | — | — | — | — | — | |||||||||||||||
| 1-4 family residential | (1 | ) | (3 | ) | — | — | — | |||||||||||||
| Multi-family residential | — | — | — | — | — | |||||||||||||||
| Consumer | (1 | ) | (6 | ) | 96 | 4 | 1 | |||||||||||||
| Agriculture | — | 5 | — | 42 | — | |||||||||||||||
| Other | — | — | — | — | (3,500 | ) | ||||||||||||||
| Total net (charge-offs) recoveries | 38 | 82 | 499 | (49 | ) | (3,661 | ) | |||||||||||||
| Ending balance | $ | 31,345 | $ | 32,208 | $ | 37,183 | $ | 40,874 | $ | 40,637 | ||||||||||
| Net charge-offs (recoveries) to average loans(1) | (0.01 | )% | (0.01 | )% | (0.07 | )% | 0.01 | % | 0.49 | % | ||||||||||
(1) Annualized.
CBTX, INC. AND SUBSIDIARY
Non-GAAP to GAAP Reconciliation
(In thousands, except per share data and percentages)
Our accounting and reporting policies conform to GAAP and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non-GAAP financial measures. We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are not included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating, other statistical measures or ratios calculated using exclusively financial measures calculated in accordance with GAAP. Non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the way we calculate the non-GAAP financial measures may differ from that of other companies reporting measures with similar names.
This earnings release contains certain non-GAAP financial measures including “tangible book value,” “tangible book value per common share,” and “tangible equity to tangible assets,” which are supplemental measures that are not required by, or are not presented in accordance with, GAAP.
We calculate tangible equity as total shareholders’ equity, less goodwill and other intangible assets, net of accumulated amortization, and tangible book value per share as tangible equity divided by shares of common stock outstanding at the end of the relevant period. The most directly comparable GAAP financial measure for tangible book value per share is book value per share.
We calculate tangible assets as total assets less goodwill and other intangible assets, net of accumulated amortization. The most directly comparable GAAP financial measure for tangible equity to tangible assets is total shareholders’ equity to total assets.
We believe that tangible book value per share and tangible equity to tangible assets are measures that are important to many investors in the marketplace who are interested in book value per share and total shareholders’ equity to total assets, exclusive of change in intangible assets.
The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible equity, total assets to tangible assets and presents book value per share, tangible book value per share, tangible equity to tangible assets and total shareholders’ equity to total assets:
| 12/31/2021 | 9/30/2021 | 6/30/2021 | 3/31/2021 | 12/31/2020 | ||||||||||||||||||||
| Total shareholders’ equity | $ | 562,125 | $ | 564,593 | $ | 556,227 | $ | 545,349 | $ | 546,451 | ||||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Goodwill | (80,950 | ) | (80,950 | ) | (80,950 | ) | (80,950 | ) | (80,950 | ) | ||||||||||||||
| Other intangibles | (3,658 | ) | (3,702 | ) | (3,846 | ) | (3,991 | ) | (4,171 | ) | ||||||||||||||
| Tangible equity | $ | 477,517 | $ | 479,941 | $ | 471,431 | $ | 460,408 | $ | 461,330 | ||||||||||||||
| Total assets | $ | 4,486,001 | $ | 4,209,119 | $ | 4,066,534 | $ | 4,028,639 | $ | 3,949,217 | ||||||||||||||
| Adjustments: | ||||||||||||||||||||||||
| Goodwill | (80,950 | ) | (80,950 | ) | (80,950 | ) | (80,950 | ) | (80,950 | ) | ||||||||||||||
| Other intangibles | (3,658 | ) | (3,702 | ) | (3,846 | ) | (3,991 | ) | (4,171 | ) | ||||||||||||||
| Tangible assets | $ | 4,401,393 | $ | 4,124,467 | $ | 3,981,738 | $ | 3,943,698 | $ | 3,864,096 | ||||||||||||||
| Common shares outstanding | 24,488 | 24,420 | 24,450 | 24,442 | 24,613 | |||||||||||||||||||
| Book value per share | $ | 22.96 | $ | 23.12 | $ | 22.75 | $ | 22.31 | $ | 22.20 | ||||||||||||||
| Tangible book value per share | $ | 19.50 | $ | 19.65 | $ | 19.28 | $ | 18.84 | $ | 18.74 | ||||||||||||||
| Total shareholders’ equity to total assets | 12.53 | % | 13.41 | % | 13.68 | % | 13.54 | % | 13.84 | % | ||||||||||||||
| Tangible equity to tangible assets | 10.85 | % | 11.64 | % | 11.84 | % | 11.67 | % | 11.94 | % | ||||||||||||||
Investor Relations:
Justin M. Long
281.325.5013
investors@CBoTX.com
Media Contact:
Ashley Warren
713.210.7622
awarren@CBoTX.com
FAQ
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