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CBTX, Inc. Reports Fourth Quarter and Annual Financial Results

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CBTX reported a net income of $10.2 million for Q4 2020, up from $6.4 million in Q3 but down from $12.6 million in Q4 2019. For the full year, net income decreased to $26.4 million from $50.5 million in 2019, primarily due to increased credit loss provisions amid the pandemic. The bank’s total risk-based capital ratio remained strong at 16.71%. Total deposits reached $3.3 billion, reflecting growth despite challenges. Special attention was given to maintaining a solid balance sheet while navigating ongoing COVID-19 impacts.

Positive
  • Net income increased by $3.8 million in Q4 compared to Q3 2020.
  • Total deposits increased to $3.3 billion, up from $2.9 billion in Q4 2019.
  • Strong capital position with a total risk-based capital ratio of 16.71%.
Negative
  • Net income declined by $24.1 million for the year compared to 2019.
  • Noninterest income decreased by $3.8 million from 2019 to 2020.
  • Provision for credit losses increased by $16.5 million year-over-year.

HOUSTON, Jan. 27, 2021 (GLOBE NEWSWIRE) -- CBTX, Inc., or the Company (NASDAQ: CBTX), the bank holding company for CommunityBank of Texas, N.A., or the Bank, today announced fourth quarter and annual results for 2020. The Company reported net income of $10.2 million, or $0.41 per diluted share, for the quarter ended December 31, 2020, compared to $6.4 million, or $0.26 per diluted share, for the quarter ended September 30, 2020 and $12.6 million, or $0.50 per diluted share, for the quarter ended December 31, 2019.

The Company reported net income for the year ended December 31, 2020 of $26.4 million, or $1.06 per diluted share, compared to $50.5 million, or $2.02 per diluted share, for the year ended December 31, 2019.

Robert R. Franklin, Jr., Chairman, CEO and President of the Company commented, “Our fourth quarter results serve as evidence of our team’s ongoing efforts to contain the damage the pandemic has caused to our markets. COVID-19 has continued to affect our families, our customers and our way of life.”

Mr. Franklin added, “We enter the new year with optimism but also caution as vaccines are developed and disseminated. We will continue to work to keep our employees safe while working to help our customers through this challenging time.”

Mr. Franklin concluded, “Our markets are resilient, and we see a brighter future ahead. My hope is that as we move through the year, we will begin to see steady improvement as more of our population is immunized and we get back to a more mobile society. We continue to maintain a strong balance sheet and capital position and are well positioned to take advantage of the opportunities that may present themselves this year.”

Highlights

  • Net income increased $3.8 million in the fourth quarter of 2020, compared to the third quarter of 2020 primarily due to a $135,000 credit reserve release, or recapture, in the fourth quarter, compared to a $4.1 million provision for credit losses in the third quarter. Net income decreased $2.4 million during the fourth quarter of 2020, compared to the fourth quarter of 2019, primarily due to a $1.3 million decrease in net interest income and a $1.5 million increase in noninterest expense. Net income decreased $24.1 million for the year ended December 31, 2020, compared to the year ended December 31, 2019, primarily due to an increase of $16.5 million in the provision for credit losses and a $7.4 million decrease in net interest income.
  • The allowance for credit losses, or ACL, for loans decreased to $40.6 million at December 31, 2020, compared to $44.1 million at September 30, 2020, primarily due to a $3.5 million loan charged off. The ACL for loans increased from $25.3 million at December 31, 2019, primarily due to the impact of the COVID-19 pandemic.
  • Maintained a solid net interest margin on a tax equivalent basis of 3.62% and 3.73% for the quarter and year ended December 31, 2020, respectively.
  • Maintained strong capital ratios with the Company’s total risk-based capital ratio being 16.71% at December 31, 2020, compared to 16.67% at September 30, 2020 and 16.41% at December 31, 2019.

Operating Results

Net Interest Income

Net interest income was $32.5 million for the fourth quarter of 2020, compared to $31.7 million for the third quarter of 2020 and $33.8 million for the fourth quarter of 2019. Net interest income increased $812,000 during the fourth quarter of 2020, compared to the third quarter of 2020, primarily due to higher average loans, the impact of one additional day in the fourth quarter of 2020 and lower rates on interest-bearing deposits. Net interest income decreased $1.3 million during the fourth quarter of 2020, compared to the fourth quarter of 2019, primarily due to lower rates on loans and other interest-earning assets, partially offset by the impact of increased average loans and lower rates on deposits.

Net interest income decreased $7.4 million during the year ended December 31, 2020, compared to the year ended December 31, 2019, primarily due to higher average interest-bearing deposits, lower rates on loans, securities and other interest-earning assets, partially offset by the impact of lower rates on deposits and increased average loans and other interest-earning assets.

The yield on interest-earning assets was 3.79% for the fourth quarter of 2020, compared to 3.75% for the third quarter of 2020 and 4.73% for the fourth quarter of 2019. The cost of interest-bearing liabilities was 0.39% for the fourth quarter of 2020, 0.46% for the third quarter of 2020 and 1.11% for the fourth quarter of 2019. The Company’s net interest margin on a tax equivalent basis was 3.62% for the fourth quarter of 2020, compared to 3.55% for the third quarter of 2020 and 4.18% for the fourth quarter of 2019. The increase in the net interest margin for the quarter ended December 31, 2020, was primarily due to a decrease in rates for interest-bearing deposits. The decrease in the net interest margin on a tax equivalent basis for the quarter and year ended December 31, 2020, compared to the quarter and year ended December 31, 2019, was primarily due to a decrease in rates on interest-earning assets, partially offset by an increase in the volume of loans and a decrease in rates on interest-bearing deposits.

The yield on interest-earning assets was 3.98% for the year ended December 31, 2020, compared to 4.95% for the year ended December 31, 2019. The cost of interest-bearing liabilities was 0.57% for the year ended December 31, 2020 and 1.07% for the year ended December 31, 2019. The Company’s net interest margin on a tax equivalent basis was 3.73% for the year ended December 31, 2020, compared to 4.42% for the year ended December 31, 2019. Yields on interest-earning assets decreased and the costs of interest-bearing liabilities did not decrease to the same extent, which caused compression of the Company’s net interest margin on a tax equivalent basis during 2020.

The average yield on loans increased to 4.42% for the quarter ended December 31, 2020, compared to 4.37% for the quarter ended September 30, 2020, while the cost of interest-bearing deposits decreased to 0.35% from 0.42% for the same periods. The cost of total deposits was 0.19% for the quarter ended December 31, 2020 and 0.23% for the quarter ended September 30, 2020.

Provision/Recapture for Credit Losses

The Company had a credit reserve recapture of $135,000 for the fourth quarter of 2020, compared to a provision of $4.1 million for the third quarter of 2020 and a recapture of $148,000 for the fourth quarter of 2019. The recapture in the fourth quarter of 2020 was primarily related to a $364,000 recapture for unfunded commitments, partially offset by a provision of $229,000 for loans. The recapture in the fourth quarter related to unfunded commitments was due to a decrease in the total unfunded commitments from the third to fourth quarter of 2020.

The provision for credit losses was $18.9 million for the year ended December 31, 2020, an increase of $16.5 million compared to the year ended December 31, 2019, primarily due to the impact of the COVID-19 pandemic, the sustained instability of the oil and gas industry, an increase in adversely graded loans and an increase in charge-offs.

The ACL for loans was $40.6 million, or 1.39% of loans excluding loans held for sale, at December 31, 2020, compared to $44.1 million, or 1.49% of loans excluding loans held for sale, at September 30, 2020 and $25.3 million, or 0.96% of loans excluding loans held for sale, at December 31, 2019. The decrease in the ACL from September 30, 2020 to December 31, 2020 was primarily due to a $3.5 million charge-off that was fully reserved for during prior quarters. The increase in the ACL from December 31, 2019 to December 31, 2020 was due to the impact of the COVID-19 pandemic, the sustained instability of the oil and gas industry, an increase in adversely graded loans and an increase in charge-offs. The increase in 2020 was also due to the adoption of Accounting Standards Update, or ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or CECL, effective January 1, 2020.

The liability associated with the ACL for unfunded commitments was $4.2 million at December 31, 2020, compared to $4.5 million at September 30, 2020 and $378,000 at December 31, 2019. The increase in 2020 was primarily due to the adoption of CECL, effective January 1, 2020, the impact of the COVID-19 pandemic and the sustained instability of the oil and gas industry, as noted above.

Noninterest Income

Noninterest income was $3.5 million for the fourth quarter of 2020, $4.0 million for the third quarter of 2020 and $3.7 million for the fourth quarter of 2019. During the third quarter of 2020, the Company received nontaxable death proceeds of $2.0 million under bank-owned life insurance policies and the Company recorded a gain of $769,000.

Noninterest income was $14.8 million for the year ended December 31, 2020 and $18.6 million for 2019. During 2020, the Company received nontaxable death proceeds mentioned above and recorded a gain of $769,000. During 2019, the Company received nontaxable death proceeds of $4.7 million under bank-owned life insurance policies and the Company recorded a gain of $3.3 million.

Noninterest Expense

Noninterest expense was $23.7 million for the fourth quarter of 2020, compared to $23.9 million for the third quarter of 2020 and $22.1 million for the fourth quarter of 2019. The decrease in noninterest expense of $200,000 between the fourth and third quarter of 2020 was primarily due to a decrease in salaries and employee benefits of $1.5 million, partially offset by a $763,000 increase in professional and director fees, mainly consulting fees related to Bank Secrecy Act/Anti-Money Laundering, or BSA/AML, compliance matters. The increase in noninterest expense of $1.5 million for the fourth quarter of 2020, compared to the fourth quarter of 2019 was primarily due to a $2.0 million increase in professional and director fees and a $664,000 increase in regulatory fees, partially offset by a $1.4 million decrease in salaries and employee benefits. The increase in professional and director fees during the fourth quarter of 2020 was primarily due to $2.4 million in consulting related fees associated with BSA/AML compliance matters, compared to $1.3 million during the third quarter of 2020.

Noninterest expense was $92.1 million for the year ended December 31, 2020, compared to $90.1 million for the year ended December 31, 2019. The increase in noninterest expense of $2.0 million between 2020 and 2019 was primarily due to a $1.3 million increase in professional and director fees and a $660,000 increase in regulatory fees, partially offset by an $807,000 decrease in salaries and employee benefits. The increase in professional and director fees during the year ended December 31, 2020 was primarily due to $3.9 million in consulting related fees associated with BSA/AML compliance matters, compared to $18,000 during the year ended December 31, 2019, partially offset by lower legal fees of $721,000 during the year ended December 31, 2020, compared to $3.7 million during the year ended December 31, 2019.

Income Taxes

Income tax expense was $2.3 million for the fourth quarter of 2020, $1.3 million for the third quarter of 2020 and $2.9 million for the fourth quarter of 2019. The effective tax rates were 18.24% for the fourth quarter of 2020, 17.31% for the third quarter of 2020 and 18.69% for the fourth quarter of 2019. The differences between the federal statutory rate of 21% and the effective tax rates were largely attributable to permanent differences primarily related to tax exempt interest and bank-owned life insurance earnings.

Income tax expense was $6.0 million for 2020 and $11.6 million for 2019. The effective tax rates were 18.63% for 2020 and 18.64% for 2019. The decrease in the effective tax rate for 2020 was primarily due to the nontaxable gain related to the bank-owned life insurance policies noted above.

Balance Sheet Highlights

Loans

Loans, excluding loans held for sale, were $2.9 billion at December 31, 2020, $3.0 billion at September 30, 2020 and $2.6 billion at December 31, 2019. The increase from December 31, 2019 to December 31, 2020 was impacted by the Company’s participation in the Paycheck Protection Program, or PPP, under the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, which facilitates loans to small businesses. PPP loans were $275.4 million at December 31, 2020 and $330.5 million at September 30, 2020. On January 19, 2021, the Company began participating in the next round of PPP financing under the CARES Act, as amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (Economic Aid Act).

In support of customers impacted by the COVID-19 pandemic, the Company offered relief through payment deferrals during 2020. The deferral periods range from one to six-months, with the majority of the deferrals involving three-month deferral periods. As of December 31, 2020, the Company had 21 loans subject to such deferral arrangements with total outstanding principal of $38.4 million, down from 41 loans subject to deferral arrangements with total outstanding principal of $82.4 million as of September 30, 2020. Of the 21 loans with deferral arrangements at the end of the fourth quarter, 15 loans totaling $33.0 million were scheduled to return to their original payment schedule in January of 2021.

Loans restructured during 2020 due to borrower financial difficulties, or TDRs, included 34 loans totaling $43.1 million that were subject to COVID-19 related deferral arrangements. At December 31, 2020, 10 of these COVID-19 TDRs with principal balances totaling $22.4 million were still subject to a deferral arrangement.

Asset Quality

Nonperforming assets remain low at $24.0 million, or 0.61% of total assets, at December 31, 2020, $15.6 million, or 0.41% of total assets, at September 30, 2020 and $1.0 million, or 0.03% of total assets, at December 31, 2019. Nonperforming assets increased $8.4 million during the fourth quarter of 2020, primarily due to eight commercial and industrial loans totaling $6.0 million and one commercial real estate loan of $5.9 million being placed on nonaccrual status, partially offset by one loan of $3.5 million charged-off during the fourth quarter.

During the year ended December 31, 2020, the Company restructured 36 loans as TDRs with pre-modification outstanding recorded investments totaling $43.7 million, which remained outstanding at year end. As noted above, 34 of the 36 loans restructured as TDRs were loans subject to COVID-19 related deferral arrangements during 2020.

Annualized net charge-offs to average loans was 0.49% for the fourth quarter of 2020, 0.02% for the third quarter of 2020 and 0.02% for the fourth quarter of 2019. Net charge-offs to average loans was 0.13% for the year ended December 31, 2020 and 0.03% for the year ended December 31, 2019.

Deposits and Borrowings

Total deposits were $3.3 billion at December 31, 2020, $3.2 billion at September 30, 2020 and $2.9 billion at December 31, 2019.

The Company defines total borrowings as the total of repurchase agreements, Federal Home Loan Bank advances and notes payable. Total borrowings were $50.0 million, $52.2 million and $50.5 million at December 31, 2020, September 30, 2020 and December 31, 2019, respectively.

Capital

At December 31, 2020, 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 16.71% at December 31, 2020, compared to 16.67% at September 30, 2020 and 16.41% at December 31, 2019. The Company’s Tier 1 leverage ratio was 12.00% at December 31, 2020, compared to 11.90% at September 30, 2020 and 13.11% at December 31, 2019. The Company’s total shareholders’ equity to total assets ratio was 13.84% at December 31, 2020, 14.18% at September 30, 2020 and 15.40% at December 31, 2019.

The ratio of tangible equity to tangible assets was 11.94% at December 31, 2020, 12.22% at September 30, 2020 and 13.26% at December 31, 2019. Tangible equity to tangible assets is a non-GAAP financial measure. The most directly comparable financial measure calculated in accordance with United States generally accepted accounting principles, or GAAP, to tangible equity to tangible assets is total shareholders’ equity to total assets. See the table captioned “NonGAAP to GAAP Reconciliation” at the end of this earnings release.

Non-GAAP Financial Measures

The Company’s accounting and reporting policies conform to GAAP and the prevailing practices in the banking industry. The Company’s management also evaluates performance based on certain non-GAAP financial measures. The Company classifies 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 as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows.

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. 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.

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 results for the quarter ended December 31, 2020 on January 28, 2021 at 8:00 a.m. Central Standard 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 9087182. 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 $3.9 billion asset 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: whether the Company can: manage the economic risks related to the impact of COVID-19 and the sustained instability of the oil and gas industry (including risks related to its customers’ credit quality, deferrals and modifications to loans, the Company’s ability to borrow, and the impact of a resultant recession generally), and other hazards such as natural disasters and adverse weather, acts of war or terrorism, other pandemics, an outbreak of hostilities or other international or domestic calamities and the governmental or military response thereto, and other matters beyond the Company’s control; the geographic concentration of our markets in Beaumont and Houston, Texas; whether the Company can manage changes and the continued health or availability of management personnel; the amount of nonperforming and classified assets that the Company holds and the efforts to resolve the nonperforming assets; deterioration of the Company’s asset quality; interest rate risks associated with the Company’s business; business and economic conditions generally and in the financial services industry, nationally and within the Company’s primary markets; volatility and direction of oil prices, including risks related to the instability of oil prices, and the strength of the energy industry, generally and within Texas; the composition of the Company’s loan portfolio, including the identity of its borrowers and the concentration of loans in specialized industries, especially the creditworthiness of energy company borrowers; changes in the value of collateral securing the loans; the Company’s ability to maintain important deposit customer relationships and the Company’s 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 loans under the PPP and the risk of holding the PPP loans at unfavorable interest rates as compared to the loans to customers that we would have otherwise lent to; the 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 thirdparty servicers; the failure of certain third-party vendors to perform; the initiation and outcome of litigation and other legal proceedings against the Company or to which it may become subject; operational risks associated with the Company’s business; the costs, effects and results of regulatory examinations, investigations, including the ongoing investigation by the Financial Crimes Enforcement Network, or FinCEN, of the U.S. Department of Treasury, or reviews or the ability to obtain the required regulatory approvals; the Company’s ability to meet the requirements of its Formal Agreement with the Office of the Comptroller of the Currency, and the risk that such Formal Agreement may have a negative impact on the Company’s financial performance and results of operations; 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 and newly enacted fiscal stimulus that impact the Company’s loan portfolio and forbearance practice; and other governmental interventions in the U.S. financial system that may impact how the Company achieves its performance goals. Additionally, many of these risks and uncertainties are currently elevated by and may or will 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.

CBTX, INC. AND SUBSIDIARY
Financial Highlights
(In thousands, except per share data and percentages)

                     
 Three Months Ended  Twelve Months Ended
 12/31/2020    9/30/2020    6/30/2020    3/31/2020    12/31/2019    12/31/2020 12/31/2019
Profitability:                    
Net income$10,236  $6,421  $2,163  $7,541  $12,636  $26,361  $50,517 
Basic earnings per share$0.42  $0.26  $0.09  $0.30  $0.51  $1.06  $2.03 
Diluted earnings per share$0.41  $0.26  $0.09  $0.30  $0.50  $1.06  $2.02 
                     
Return on average assets(1) 1.05%  0.66%  0.23%  0.87%  1.43%  0.70%  1.50%
Return on average shareholders' equity(1) 7.47%  4.70%  1.60%  5.64%  9.40%  4.85%  9.81%
Net interest margin - tax equivalent(1) 3.62%  3.55%  3.68%  4.06%  4.18%  3.73%  4.42%
Efficiency ratio(2) 65.64%  66.77%  64.15%  60.44%  58.96%  64.23%  58.30%
                     
Liquidity and Capital Ratios:                    
Total shareholders' equity to total assets 13.84%  14.18%  13.77%  15.67%  15.40%  13.84%  15.40%
Tangible equity to tangible assets(3) 11.94%  12.22%  11.84%  13.51%  13.26%  11.94%  13.26%
Common equity tier 1 capital ratio 15.45%  15.41%  15.30%  15.23%  15.52%  15.45%  15.52%
Tier 1 risk-based capital ratio 15.45%  15.41%  15.30%  15.23%  15.52%  15.45%  15.52%
Total risk-based capital ratio 16.71%  16.67%  16.56%  16.42%  16.41%  16.71%  16.41%
Tier 1 leverage ratio 12.00%  11.90%  11.96%  13.18%  13.11%  12.00%  13.11%
                     
Credit Quality:                    
Allowance for credit losses for loans to loans excluding loans held for sale 1.39%  1.49%  1.35%  1.17%  0.96%  1.39%  0.96%
Nonperforming assets to total assets 0.61%  0.41%  0.29%  0.04%  0.03%  0.61%  0.03%
Nonperforming loans to loans excluding loans held for sale 0.82%  0.53%  0.38%  0.05%  0.04%  0.82%  0.04%
Net charge-offs (recoveries) to average loans(1) 0.49%  0.02%  0.01%  (0.05)%  0.02%  0.13%  0.03%
                     
Other Data:                    
Weighted average common shares outstanding - basic 24,621   24,748   24,752   24,926   24,951   24,761   24,926 
Weighted average common shares outstanding - diluted 24,678   24,770   24,780   25,000   25,071   24,803   25,053 
Common shares outstanding at period end 24,613   24,713   24,755   24,746   24,980   24,613   24,980 
Dividends per share$0.10  $0.10  $0.10  $0.10  $0.10  $0.40  $0.40 
Book value per share$22.20  $21.89  $21.71  $21.70  $21.45  $22.20  $21.45 
Tangible book value per share(3)$18.74  $18.44  $18.26  $18.23  $18.01  $18.74  $18.01 
Employees - full-time equivalents 511   515   523   512   500   511   500 

(1)   Annualized.
(2)   Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
(3)   NonGAAP financial measure. See the table captioned “NonGAAP to GAAP Reconciliation” at the end of this earnings release.


CBTX, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(In thousands)

               
 12/31/2020    9/30/2020 6/30/2020 3/31/2020 12/31/2019
               
Loans, excluding loans held for sale$2,924,117  $2,964,526  $2,934,888  $2,671,587  $2,639,085 
Allowance for credit losses for loans (40,637)  (44,069)  (39,678)  (31,194)  (25,280)
Loans, net 2,883,480   2,920,457   2,895,210   2,640,393   2,613,805 
               
Cash and equivalents 538,007   377,572   492,400   284,898   372,064 
Securities 237,281   226,101   235,438   234,014   231,262 
Premises and equipment 61,152   61,732   50,729   50,243   50,875 
Goodwill 80,950   80,950   80,950   80,950   80,950 
Other intangible assets 4,171   4,303   4,496   4,700   4,938 
Loans held for sale 2,673   1,763   -   882   1,463 
Operating lease right-to-use asset 13,285   12,893   14,081   12,577   12,926 
Other assets 128,218   128,901   128,421   116,993   110,261 
Total assets$3,949,217  $3,814,672  $3,901,725  $3,425,650  $3,478,544 
               
Noninterest-bearing deposits$1,476,425  $1,460,983  $1,513,748  $1,195,541  $1,184,861 
Interest-bearing deposits 1,825,369   1,709,681   1,740,455   1,596,692   1,667,527 
Total deposits 3,301,794   3,170,664   3,254,203   2,792,233   2,852,388 
               
Federal Home Loan Bank advances 50,000   50,000   50,000   50,000   50,000 
Repurchase agreements -   2,153   2,500   1,415   485 
Operating lease liabilities 16,447   15,759   16,983   15,356   15,704 
Other liabilities 34,525   35,175   40,683   29,772   24,246 
Total liabilities 3,402,766   3,273,751   3,364,369   2,888,776   2,942,823 
               
Total shareholders’ equity 546,451   540,921   537,356   536,874   535,721 
Total liabilities and shareholders’ equity$3,949,217  $3,814,672  $3,901,725  $3,425,650  $3,478,544 
 

CBTX, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income
(In thousands)

                     
 Three Months Ended  Twelve Months Ended
 12/31/2020    9/30/2020    6/30/2020    3/31/2020    12/31/2019    12/31/2020    12/31/2019
Interest income                    
Interest and fees on loans$32,886  $32,318  $32,857 $33,617 $35,634  $131,678 $141,388
Securities 1,070   1,107   1,228  1,363  1,442   4,768  5,954
Other interest-earning assets 168   176   169  1,055  1,279   1,568  5,333
Equity investments 170   162   171  176  213   679  720
Total interest income 34,294   33,763   34,425  36,211  38,568   138,693  153,395
Interest expense                    
Deposits 1,549   1,831   2,022  3,766  4,463   9,168  15,999
Federal Home Loan Bank advances 221   221   240  221  316   903  1,386
Repurchase agreements       1       1  3
Note payable and junior subordinated debt 4   3   4  4  3   15  19
Total interest expense 1,774   2,055   2,267  3,991  4,782   10,087  17,407
Net interest income 32,520   31,708   32,158  32,220  33,786   128,606  135,988
Provision (recapture) for credit losses                    
Provision (recapture) for credit losses for loans 229   4,569   8,537  4,739  (148)  18,074  2,385
Provision (recapture) for credit losses for unfunded commitments (364)  (461)  1,333  310     818  
Total provision (recapture) for credit losses (135)  4,108   9,870  5,049  (148)  18,892  2,385
Net interest income after provision (recapture) for credit losses 32,655   27,600   22,288  27,171  33,934   109,714  133,603
Noninterest income                    
Deposit account service charges 1,270   1,176   1,095  1,485  1,587   5,026  6,554
Card interchange fees 999   995   915  922  1,007   3,831  3,720
Earnings on bank-owned life insurance 407   1,187   412  416  430   2,422  5,011
Net gain on sales of assets 379   114   139  123  305   755  652
Other 467   551   348  1,381  388   2,747  2,691
Total noninterest income 3,522   4,023   2,909  4,327  3,717   14,781  18,628
Noninterest expense                    
Salaries and employee benefits 12,848   14,332   14,012  14,223  14,264   55,415  56,222
Occupancy expense 2,628   2,496   2,558  2,424  2,417   10,106  9,506
Professional and director fees 3,209   2,446   1,541  1,152  1,220   8,348  7,048
Data processing and software 1,330   1,525   1,292  1,222  1,074   5,369  4,435
Regulatory fees 748   471   476  103  84   1,798  1,138
Advertising, marketing and business development 438   429   269  364  452   1,500  1,831
Telephone and communications 455   486   392  419  506   1,752  1,774
Security and protection expense 423   299   351  374  364   1,447  1,464
Amortization of intangibles 197   198   230  221  216   846  894
Other expenses 1,382   1,176   1,374  1,587  1,513   5,519  5,831
Total noninterest expense 23,658   23,858   22,495  22,089  22,110   92,100  90,143
Net income before income tax expense 12,519   7,765   2,702  9,409  15,541   32,395  62,088
Income tax expense 2,283   1,344   539  1,868  2,905   6,034  11,571
Net income $10,236  $6,421  $2,163 $7,541 $12,636  $26,361 $50,517
 

CBTX, INC. AND SUBSIDIARY
Net Interest Margin
(In thousands, except percentages)

                        
 Three Months Ended
 12/31/2020 9/30/2020 12/31/2019
 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)$2,961,622  $32,886 4.42% $2,945,320  $32,318 4.37% $2,682,842  $35,634 5.27%
Securities 236,233   1,070 1.80%  236,015   1,107 1.87%  232,441   1,442 2.46%
Other interest-earning assets 388,936   168 0.17%  383,626   176 0.18%  300,395   1,279 1.69%
Equity investments 15,346   170 4.41%  15,334   162 4.20%  16,140   213 5.24%
Total interest-earning assets 3,602,137  $34,294 3.79%  3,580,295  $33,763 3.75%  3,231,818  $38,568 4.73%
Allowance for credit losses for loans (44,233)       (40,135)       (25,591)     
Noninterest-earning assets 321,303        326,590        298,615      
Total assets$3,879,207       $3,866,750       $3,504,842      
Liabilities and Shareholders’ Equity                       
Interest-bearing liabilities:                       
Interest-bearing deposits$1,744,557  $1,549 0.35% $1,730,812  $1,831 0.42% $1,646,883  $4,463 1.08%
Federal Home Loan Bank advances 50,163   221 1.76%  50,000   221 1.76%  68,913   316 1.82%
Repurchase agreements 1,426       2,230       423     
Note payable and junior subordinated debt    4       3       3  
Total interest-bearing liabilities 1,796,146  $1,774 0.39%  1,783,042  $2,055 0.46%  1,716,219  $4,782 1.11%
Noninterest-bearing liabilities:                       
Noninterest-bearing deposits 1,482,753        1,484,557        1,212,939      
Other liabilities 55,174        55,386        42,406      
Total noninterest-bearing liabilities 1,537,927        1,539,943        1,255,345      
Shareholders’ equity 545,134        543,765        533,278      
Total liabilities and shareholders’ equity$3,879,207       $3,866,750       $3,504,842      
Net interest income   $32,520      $31,708      $33,786  
Net interest spread(3)      3.40%       3.29%       3.62%
Net interest margin(4)      3.59%       3.52%       4.15%
Net interest margin - tax equivalent(5)      3.62%       3.55%       4.18%

(1)   Annualized.
(2)   Includes average outstanding balances related to loans held for sale.
(3)   Net interest spread is the average yield on interestearning assets minus the average rate on interestbearing liabilities.
(4)   Net interest margin is equal to net interest income divided by average interestearning assets.
(5)   Tax equivalent adjustments of $287,000, $258,000 and $251,000 for the quarters ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively, were computed using a federal income tax rate of 21%.

CBTX, INC. AND SUBSIDIARY
Year to Date Net Interest Margin
(In thousands, except percentages)

                 
  Years Ended December 31,
  2020 2019
  Average Interest Average Average Interest Average
  Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
(Dollars in thousands) Balance Interest Paid Rate Balance Interest Paid Rate
Assets                
Interest-earning assets:                
Total loans(1) $2,862,911  $131,678 4.60% $2,608,505  $141,388 5.42%
Securities  236,625   4,768 2.02%  233,543   5,954 2.55%
Other interest-earning assets  366,628   1,568 0.43%  243,349   5,333 2.19%
Equity investments  14,874   679 4.57%  14,852   720 4.85%
Total interest-earning assets  3,481,038  $138,693 3.98%  3,100,249  $153,395 4.95%
Allowance for credit losses for loans  (35,448)       (24,971)     
Noninterest-earning assets  312,672        299,387      
Total assets $3,758,262       $3,374,665      
Liabilities and Shareholders’ Equity                
Interest-bearing liabilities:                
Interest-bearing deposits $1,703,543  $9,168 0.54% $1,566,038  $15,999 1.02%
Federal Home Loan Bank advances  55,205   903 1.64%  61,589   1,386 2.25%
Repurchase agreements  1,631   1 0.06%  1,046   3 0.29%
Note payable and junior subordinated debt     15       19  
Total interest-bearing liabilities  1,760,379  $10,087 0.57%  1,628,673  $17,407 1.07%
Noninterest-bearing liabilities:                
Noninterest-bearing deposits  1,404,027        1,193,527      
Other liabilities  50,464        37,458      
Total noninterest-bearing liabilities  1,454,491        1,230,985      
Shareholders’ equity  543,392        515,007      
Total liabilities and shareholders’ equity $3,758,262       $3,374,665      
Net interest income    $128,606      $135,988  
Net interest spread(2)       3.41%       3.88%
Net interest margin(3)       3.69%       4.39%
Net interest margin - tax equivalent(4)       3.73%       4.42%

(1)   Annualized.
(2)   Includes average outstanding balances related to loans held for sale.
(3)   Net interest spread is the average yield on interestearning assets minus the average rate on interestbearing liabilities.
(4)   Net interest margin is equal to net interest income divided by average interestearning assets.
(5)   Tax equivalent adjustments of $1.1 million and $1.0 million for the years ended December 31, 2020 and 2019, respectively, were computed using a federal income tax rate of 21%.

CBTX, INC. AND SUBSIDIARY
Rate/Volume Analysis
(In thousands)

             
  Three Months Ended December 31, 2020,
   Compared to Three Months Ended September 30, 2020
  Increase (Decrease) due to   
(Dollars in thousands) Rate Volume Days Total
Interest-earning assets:            
Total loans $38  $177 $353 $568 
Securities  (50)  1  12  (37)
Other interest-earning assets  (12)  2  2  (8)
Equity investments  6     2  8 
Total increase (decrease) in interest income  (18)  180  369  531 
Interest-bearing liabilities:            
Interest-bearing deposits  (316)  14  20  (282)
Federal Home Loan Bank advances  (3)  1  2   
Repurchase agreements          
Note payable and junior subordinated debt  1       1 
Total increase (decrease) in interest expense  (318)  15  22  (281)
Increase (decrease) in net interest income $300  $165 $347 $812 


             
  Three Months Ended December 31, 2020,
   Compared to Three Months Ended December 31, 2019
  Increase (Decrease) due to  
(Dollars in thousands) Rate Volume  Days Total 
Interest-earning assets:            
Total loans $(6,451) $3,703  $ $(2,748)
Securities  (396)  24     (372)
Other interest-earning assets  (1,488)  377     (1,111)
Equity investments  (33)  (10)    (43)
Total increase (decrease) in interest income  (8,368)  4,094     (4,274)
Interest-bearing liabilities:            
Interest-bearing deposits  (3,180)  266     (2,914)
Federal Home Loan Bank advances  (9)  (86)    (95)
Repurchase agreements     (1)    (1)
Note payable and junior subordinated debt  1        1 
Total increase (decrease) in interest expense  (3,188)  179     (3,009)
Increase (decrease) in net interest income $(5,180) $3,915  $ $(1,265)


             
  Year Ended December 31, 2020,
  Compared to Year Ended December 31, 2019
  Increase (Decrease) due to  
(Dollars in thousands) Rate Volume  Days Total 
Interest-earning assets:            
Total loans $(23,886) $13,789  $387 $(9,710)
Securities  (1,281)  79   16  (1,186)
Other interest-earning assets  (6,480)  2,700   15  (3,765)
Equity investments  (44)  1   2  (41)
Total increase (decrease) in interest income  (31,691)  16,569   420  (14,702)
Interest-bearing liabilities:            
Interest-bearing deposits  (8,278)  1,403   44  (6,831)
Federal Home Loan Bank advances  (343)  (144)  4  (483)
Repurchase agreements  (4)  2     (2)
Note payable and junior subordinated debt  (4)       (4)
Total increase (decrease) in interest expense  (8,629)  1,261   48  (7,320)
Increase (decrease) in net interest income $(23,062) $15,308  $372 $(7,382)
 

CBTX, INC. AND SUBSIDIARY
Yield Trend(1)

          
 Three Months Ended
 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019
          
Interest-earning assets:         
Total loans4.42% 4.37% 4.54% 5.13% 5.27%
Securities1.80% 1.87% 2.05% 2.34% 2.46%
Other interest-earning assets0.17% 0.18% 0.18% 1.35% 1.69%
Equity investments4.41% 4.20% 4.54% 5.18% 5.24%
Total interest-earning assets3.79% 3.75% 3.91% 4.56% 4.73%
          
Interest-bearing liabilities:         
Interest-bearing deposits0.35% 0.42% 0.48% 0.92% 1.08%
Federal Home Loan Bank advances1.76% 1.76% 1.36% 1.78% 1.82%
Repurchase agreements    0.19%    
Note payable and junior subordinated debt         
Total interest-bearing liabilities0.39% 0.46% 0.52% 0.94% 1.11%
          
Net interest spread(2)3.40% 3.29% 3.39% 3.62% 3.62%
Net interest margin(3)3.59% 3.52% 3.65% 4.05% 4.15%
Net interest margin - tax equivalent(4)3.62% 3.55% 3.68% 4.06% 4.18%

(1)   Annualized.
(2)   Net interest spread is the average yield on interestearning assets minus the average rate on interestbearing liabilities.
(3)   Net interest margin is equal to net interest income divided by average interestearning assets.
(4)   Tax equivalent adjustments were computed using a federal income tax rate of 21%.

CBTX, INC. AND SUBSIDIARY
Average Outstanding Balances
(In thousands)

               
 Three Months Ended
 12/31/2020    9/30/2020    6/30/2020    3/31/2020    12/31/2019
               
Assets              
Interest-earning assets:              
Total loans(1)$2,961,622  $2,945,320  $2,908,204  $2,634,507  $2,682,842 
Securities 236,233   236,015   240,343   233,917   232,441 
Other interest-earning assets 388,936   383,626   378,405   315,099   300,395 
Equity investments 15,346   15,334   15,147   13,661   16,140 
Total interest-earning assets 3,602,137   3,580,295   3,542,099   3,197,184   3,231,818 
Allowance for credit losses for loans (44,233)  (40,135)  (31,443)  (25,831)  (25,591)
Noninterest-earning assets 321,303   326,590   305,821   296,698   298,615 
Total assets$3,879,207  $3,866,750  $3,816,477  $3,468,051  $3,504,842 
               
Liabilities and Shareholders’ Equity              
Interest-bearing liabilities:              
Interest-bearing deposits$1,744,557  $1,730,812  $1,687,991  $1,650,064  $1,646,883 
Federal Home Loan Bank advances 50,163   50,000   70,769   50,000   68,913 
Repurchase agreements 1,426   2,230   2,101   763   423 
Note payable and junior subordinated debt              
Total interest-bearing liabilities 1,796,146   1,783,042   1,760,861   1,700,827   1,716,219 
Noninterest-bearing liabilities:              
Noninterest-bearing deposits 1,482,753   1,484,557   1,462,271   1,184,776   1,212,939 
Other liabilities 55,174   55,386   49,958   44,620   42,406 
Total noninterest-bearing liabilities 1,537,927   1,539,943   1,512,229   1,229,396   1,255,345 
Shareholders’ equity 545,134   543,765   543,387   537,828   533,278 
Total liabilities and shareholders’ equity$3,879,207  $3,866,750  $3,816,477  $3,468,051  $3,504,842 
  
  

(1)   Includes average outstanding balances of loans held for sale.


CBTX, INC. AND SUBSIDIARY
Loans and Deposits Period End Balances
(In thousands, except percentages)

                         
 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019
 Amount %   Amount %   Amount %   Amount %   Amount %  
                         
Loan Portfolio:                        
Commercial and industrial$742,957  25.3% $832,686  28.0% $837,667  28.4% $542,650  20.3% $527,607  19.9%
Real estate:                        
Commercial real estate 1,041,998  35.5%  949,933  31.9%  908,027  30.8%  904,395  33.8%  900,746  34.0%
Construction and development 522,705  17.8%  506,216  17.0%  552,879  18.8%  558,343  20.8%  527,812  19.9%
1-4 family residential 239,872  8.2%  253,868  8.5%  272,253  9.2%  276,142  10.3%  280,192  10.6%
Multi-family residential 258,346  8.8%  298,733  10.0%  255,273  8.7%  267,152  10.0%  277,209  10.5%
Consumer 33,884  1.1%  35,637  1.2%  36,338  1.2%  38,133  1.4%  36,782  1.4%
Agriculture 8,670  0.3%  9,753  0.3%  7,795  0.3%  7,520  0.3%  9,812  0.4%
Other 88,238  3.0%  91,501  3.1%  77,535  2.6%  84,076  3.1%  86,513  3.3%
Gross loans 2,936,670  100.0%  2,978,327  100.0%  2,947,767  100.0%  2,678,411  100.0%  2,646,673  100.0%
Less allowance for credit losses (40,637)    (44,069)    (39,678)    (31,194)    (25,280)  
Less deferred fees and unearned discount (9,880)    (12,038)    (12,879)    (5,942)    (6,125)  
Less loans held for sale (2,673)    (1,763)         (882)    (1,463)  
Loans, net$2,883,480    $2,920,457    $2,895,210    $2,640,393    $2,613,805   
                         
                         
Deposits:                        
Interest-bearing demand accounts$380,175  11.5% $346,406  10.9% $366,281  11.2% $359,943  12.9% $369,744  13.0%
Money market accounts 1,039,617  31.5%  916,668  28.9%  878,006  27.0%  760,036  27.2%  805,942  28.3%
Savings accounts 108,167  3.3%  103,062  3.3%  98,485  3.0%  90,227  3.2%  92,183  3.2%
Certificates and other time deposits, $100,000 or greater 152,592  4.6%  171,854  5.4%  200,505  6.2%  212,341  7.6%  208,018  7.3%
Certificates and other time deposits, less than $100,000 144,818  4.4%  171,691  5.4%  197,178  6.1%  174,145  6.3%  191,640  6.7%
Total interest-bearing deposits 1,825,369  55.3%  1,709,681  53.9%  1,740,455  53.5%  1,596,692  57.2%  1,667,527  58.5%
Noninterest-bearing deposits 1,476,425  44.7%  1,460,983  46.1%  1,513,748  46.5%  1,195,541  42.8%  1,184,861  41.5%
Total deposits$3,301,794  100.0% $3,170,664  100.0% $3,254,203  100.0% $2,792,233  100.0% $2,852,388  100.0%
 

CBTX, INC. AND SUBSIDIARY
Credit Quality
(In thousands, except percentages)

               
 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019
Nonperforming Assets (at period end):              
Nonaccrual loans:              
Commercial and industrial$12,588  $6,699  $5,519  $449  $596 
Real estate:              
Commercial real estate 10,665   4,811   4,811   67   67 
Construction and development 238   241   506   519    
1-4 family residential 526   325   332   413   314 
Multi-family residential              
Consumer              
Agriculture              
Other    3,500          
Nonaccrual loans 24,017   15,576   11,168   1,448   977 
Accruing loans 90 or more days past due              
Total nonperforming loans 24,017   15,576   11,168   1,448   977 
Foreclosed assets              
Total nonperforming assets$24,017  $15,576  $11,168  $1,448  $977 
               
Allowance for Credit Losses for Loans (at period end):              
Commercial and industrial$13,035  $13,347  $12,108  $9,535  $7,671 
Real estate:              
Commercial real estate 13,798   12,745   12,424   9,576   7,975 
Construction and development 6,089   6,334   7,050   5,795   4,446 
1-4 family residential 2,578   2,871   3,173   2,430   2,257 
Multi-family residential 2,513   3,117   2,880   2,413   1,699 
Consumer 440   507   529   477   388 
Agriculture 137   164   134   129   74 
Other 2,047   4,984   1,380   839   770 
Total allowance for credit losses for loans$40,637  $44,069  $39,678  $31,194  $25,280 
               
Credit Quality Ratios (at period end):              
Nonperforming assets to total assets 0.61%  0.41%  0.29%  0.04%  0.03%
Nonperforming loans to loans excluding loans held for sale 0.82%  0.53%  0.38%  0.05%  0.04%
Allowance for credit losses for loans to nonperforming loans 169.20%  282.93%  355.28%  2,154.28%  2,587.51%
Allowance for credit losses for loans to loans excluding loans held for sale 1.39%  1.49%  1.35%  1.17%  0.96%
                    

CBTX, INC. AND SUBSIDIARY
Allowance for Credit Losses for Loans
(In thousands, except percentages)

                     
 Three Months Ended Twelve Months Ended
 12/31/2020    9/30/2020    6/30/2020    3/31/2020    12/31/2019 12/31/2020 12/31/2019
                     
Beginning balance$44,069  $39,678  $31,194  $25,280  $25,576  $25,280  $23,693 
                     
Adoption of CECL          874      874    
                     
Provision (recapture) 229   4,569   8,537   4,739   (148)  18,074   2,385 
                     
Net (charge-offs) recoveries:                    
Commercial and industrial (305)  (31)  18   398   (205)  80   (763)
Real estate:                    
Commercial real estate 143   (135)  (24)     (1)  (16)  36 
Construction and development                    
1-4 family residential    (5)  (66)  1      (70)  (9)
Multi-family residential                    
Consumer 1   (7)  7   (99)  47   (98)  (26)
Agriculture       12      10   12   10 
Other (3,500)        1   1   (3,499)  (46)
Total net (charge-offs) recoveries (3,661)  (178)  (53)  301   (148)  (3,591)  (798)
Ending balance$40,637  $44,069  $39,678  $31,194  $25,280  $40,637  $25,280 
Net charge-offs (recoveries) to average loans(1) 0.49%  0.02%  0.01%  (0.05)%  0.02%  0.13%  0.03%

(1)   Annualized.


CBTX, INC. AND SUBSIDIARY
NonGAAP 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 nonGAAP financial measures. We classify a financial measure as being a nonGAAP 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 as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. NonGAAP financial measures do not include operating, other statistical measures or ratios calculated using exclusively financial measures calculated in accordance with GAAP. NonGAAP 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 nonGAAP financial measures may differ from that of other companies reporting measures with similar names.

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:

               
 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019
Tangible Equity              
Total shareholders’ equity$546,451  $540,921  $537,356  $536,874  $535,721 
Adjustments:              
Goodwill 80,950   80,950   80,950   80,950   80,950 
Other intangibles 4,171   4,303   4,496   4,700   4,938 
Tangible equity$461,330  $455,668  $451,910  $451,224  $449,833 
Tangible Assets              
Total assets$3,949,217  $3,814,672  $3,901,725  $3,425,650  $3,478,544 
Adjustments:              
Goodwill 80,950   80,950   80,950   80,950   80,950 
Other intangibles 4,171   4,303   4,496   4,700   4,938 
Tangible assets$3,864,096  $3,729,419  $3,816,279  $3,340,000  $3,392,656 
               
Common shares outstanding 24,613   24,713   24,755   24,746   24,980 
               
Book value per share$22.20  $21.89  $21.71  $21.70  $21.45 
Tangible book value per share$18.74  $18.44  $18.26  $18.23  $18.01 
Total shareholders’ equity to total assets 13.84%  14.18%  13.77%  15.67%  15.40%
Tangible equity to tangible assets 11.94%  12.22%  11.84%  13.51%  13.26%

FAQ

What were CBTX's earnings for Q4 2020?

CBTX reported net income of $10.2 million for Q4 2020, or $0.41 per diluted share.

How did the net income of CBTX change in 2020?

Net income decreased to $26.4 million for 2020, compared to $50.5 million in 2019.

What is the total risk-based capital ratio for CBTX?

The total risk-based capital ratio for CBTX was 16.71% as of December 31, 2020.

How did total deposits for CBTX change in 2020?

Total deposits increased to $3.3 billion at December 31, 2020, up from $2.9 billion at the end of 2019.

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Beaumont