Triad Business Bank (OTC Pink - "TBBC"), November 9, 2023, Announces Unaudited Third Quarter 2023 Results

Rhea-AI Summary

Triad Business Bank (TBB) reported a decline in net interest margin, with a core operating loss of $403,000 in Q3 2023. The bank's assets were $498.3 million, and it facilitated over $4.2 billion in transactions. TBB's interest income increased to $6.2 million, but noninterest expense rose to $3.23 million. The bank's regulatory capital decreased by 0.27% to $59.9 million. TBB's net interest margin declined to 2.15% in Q3 2023.

Positive

• TBB facilitated over $4.2 billion in transactions, showing strong financial activity.
• Interest income increased to $6.2 million in Q3 2023, indicating growth in this primary income source.
• The bank's regulatory capital decreased by 0.27% to $59.9 million, which could impact its growth potential.

Negative

• TBB reported a core operating loss of $403,000 in Q3 2023, signaling financial challenges.
• The decline in net interest margin to 2.15% in Q3 2023 may raise concerns about sustained profitability.

GREENSBORO, N.C., Nov. 9, 2023 /PRNewswire/ --

Overview

Triad Business Bank (the "Bank") was formed in 2020 to serve small and mid-size businesses in the Triad.  Since then, the Bank has become a financial partner to over 600 business customers, and in the last nine months, the Bank facilitated more than $4.2 billion of transactions, including $1.4 billion in the third quarter.  At September 30, 2023, the Bank's assets were $498.3 million, and the Bank had a strong capital foundation with $59.9 million of total regulatory capital.  Asset quality remains strong with no nonperforming or past due loans.

Ramsey Hamadi, Chief Executive Officer, commented, "Recent market conditions have caused a decline in the Bank's net interest margin, and for the third quarter the Bank had a core operating loss of $403,000.  This loss (adjusted for expense items that are included in other regulatory capital components) lowered the Bank's regulatory capital by 0.27% to $59.9 million from $60.0 million at the prior quarter end. 

In the third quarter 2023, the Bank's interest income rose $492,000 to $6.2 million compared to the prior quarter of $5.7 million.  The Bank continues to increase its primary source of income, interest earned, through growth in loans outstanding and the repricing of existing interest-earning assets.  New loan growth is resulting in incremental net interest income with approximately a 3% spread over the incremental cost of funds, and as our interest-earning assets reprice to match the deposit repricing that has already occurred, net interest margin should return to levels that lead to sustained profitability. 

Interest expense increased $571,000 in the third quarter of 2023 to $3.6 million compared to the prior quarter of $3.0 million.  The decline in core deposits, the increase in higher cost wholesale funding, and the increase in the cost of interest-bearing accounts from earlier in the year continued to impact our net interest margin in the third quarter.  We continue to grow the number of relationships and believe that the decline in core deposits is driven by excess deposits leaving the bank to higher yielding alternatives rather than a loss of core customers. 

Management believes the cost of interest-bearing liabilities has largely stabilized and anticipates a slow, steady improvement in the Bank's overall margin over the next several quarters.  Of the Bank's $491.2 million of interest-earning assets at September 30, 2023, 43% of those assets reprice in one year or less, and 68% reprice in three years or less."

Balance Sheet Highlights Comparing September 30, 2023 and June 30, 2023

• Total assets decreased 3% to $498.3 million
• Core loans increased 4% to $328.4 million
• Deposits decreased 3% to $452.0 million
• Allowance for funded and unfunded credit losses increased 6% to $4.4 million
• No nonperforming or past due assets reported
• Regulatory total risk-based capital of $59.9 million

Income Statement Highlights Comparing the Quarters Ended September 30, 2023 and September 30, 2022

• Core operating loss (non-GAAP measurement) totaled $403,000 compared to core earnings of $449,000 in the prior year
• Net interest income declined 14%, or $424,000, to $2.64 million
• Noninterest income, excluding gain (loss) on securities, decreased 39% to $186,000
• Noninterest expense increased 11% to $3.23 million

Balance Sheet Comparison 

Total assets decreased $14.8 million to $498.3 million at September 30, 2023 from $513.1 million at June 30, 2023.  During the quarter ended September 30, 2023, core loans increased $12.8 million and deposits decreased $16.0 million.  Core deposits decreased $25.4 million during the third quarter of 2023 while there was an increase of $9.4 million in brokered deposits and an increase of $4.0 million in borrowings.

Shareholders' equity declined $2.8 million during the third quarter of 2023 to $33.8 million primarily due to the $2.4 million increase in the accumulated other comprehensive income ("AOCI") loss to $21.6 million.  The Bank's total regulatory capital was $59.9 million at September 30, 2023 compared to $60.0 million at June 30, 2023.

Income Statement Comparison 

Net loss totaled $659,000 for the quarter ended September 30, 2023 compared to net income of $228,000 for the quarter ended September 30, 2022.  Core operating results, a non-GAAP measurement which excludes the provision for credit losses and taxes, were a net loss of $403,000 for the quarter ended September 30, 2023 compared to core earnings of $449,000 for the quarter ended September 30, 2022.

The Bank's primary source of income is the spread between the interest it earns on loans and investments and the interest it pays on deposits.  Net interest income declined $424,000 to $2.64 million for the third quarter of 2023 from $3.07 million for the same period a year ago.  The Bank's net interest margin for the third quarter of 2023 declined 73 basis points to 2.15% compared to the same period in 2022.  While the yield on earning assets increased in 2023 over 2022, the decline in core deposits, the increase in higher cost wholesale funding, and the rapid increase in the cost of interest-bearing accounts in 2023 resulted in the net interest margin compression.

Interest income increased $2.43 million, or 64%, to $6.21 million in the third quarter of 2023 compared to $3.78 million in the third quarter of 2022.  The growth in interest income was due primarily to the growth in core loans, which increased $75.5 million to $328.4 million, and an increase in the weighted average yield on average core loans to 5.66% in the third quarter of 2023 compared to 4.20% in the third quarter of 2022.  However, the weighted average rate on interest-bearing liabilities increased to 3.99% in the third quarter of 2023 compared to 1.08% in the third quarter of 2022 due to the increase of wholesale funding and higher market interest rates.  

Noninterest expense increased $311,000, or 11%, to $3.23 million for the third quarter of 2023 compared to $2.92 million in the third quarter of 2022.  Salaries and benefits expense totaled $2.16 million for the third quarter of 2023, which was an increase of $103,000, or 5%, over the third quarter of 2022 primarily due to staff additions.  The Bank had 60 employees at the end of September 2023 compared to 53 at the end of September 2022.  Other operating expenses increased $208,000 for the third quarter of 2023 over the prior year same quarter, due principally to increases in professional fees, stock grant expense, and regulatory assessments.

Regulatory Capital

The Bank's regulatory capital, which is the primary factor that allows for growth, was $59.9 million at September 30, 2023.  Total risk-based capital consists of tier 1 capital and tier 2 capital.  The Bank's tier 1 capital is largely a measure of shareholders' equity as calculated under GAAP but eliminates certain volatile elements such as AOCI loss.  Tier 2 capital is primarily the allowance for funded and unfunded credit losses.  The Bank's tier 1 capital was $55.5 million at September 30, 2023 while tier 2 capital was $4.4 million.  Tier 1 and tier 2 capital ratios are measured against total assets and risk-weighted assets.  Our capital ratios remain well above the levels required to meet "well-capitalized" standards under regulatory guidelines. 

The following is a summary presentation of the Bank's total regulatory capital to risk-weighted assets, tier 1 capital to risk-weighted assets and tier 1 capital to average assets in comparison with the regulatory guidelines at September 30, 2023:

Capital and Capital Ratios
					Quarter Ended
					9/30/2023
					Amount		Ratio
Actual
(dollars in thousands)
Total Capital (to risk-weighted assets)					$  59,855		12.89 %
Tier 1 Capital (to risk-weighted assets)					$  55,469		11.94 %
Tier 1 Capital (to average assets)					$  55,469		10.76 %
Minimum To Be Well-Capitalized Under
Prompt Corrective Action Provisions
(dollars in thousands)
Total Capital (to risk-weighted assets)					$  46,000		10.00 %
Tier 1 Capital (to risk-weighted assets)					$  37,000		8.00 %
Tier 1 Capital (to average assets)					$  26,000		5.00 %

Loans

The Bank's core loans increased $75.5 million, or 30%, to $328.4 million at September 30, 2023 compared to $252.9 million at September 30, 2022.  While not included in loans outstanding, the Bank also had unfunded loan commitments of $139.0 million, bringing total core loans outstanding and unfunded commitments to $467.4 million at September 30, 2023.  For internal monitoring purposes, the Bank considers owner-occupied real estate loans to be part of commercial and industrial ("C&I") loans.  As of September 30, 2023, approximately 53% of the Bank's outstanding core loan portfolio was composed of C&I loans:

Loan Diversification
				Percentage of
		Quarter Ended		Core Loan
Loan Category		9/30/2023		Portfolio
Other Construction & Land Development		$     58,854,845
Nonowner-occupied Commercial Real Estate		91,179,278
Total Commercial Real Estate		150,034,123		46 %
Owner-occupied Real Estate		86,709,388
C&I		89,335,393
Total C&I		176,044,781		53 %
Other Revolving Loans		2,312,157		1 %
Total		$   328,391,061

Credit Risk and Allowance for Credit Losses

The Bank had no past due loans or nonperforming assets at September 30, 2023.  Since inception, the Bank has followed conservative underwriting practices with a focus on cash flows and debt service coverage analyses of prospective borrowers.

The allowance for credit losses ("ACL") at September 30, 2023 was $3.74 million, or 1.14 % of outstanding loans.  The ACL for unfunded loan commitments, recorded as a liability on the balance sheet, was $647,000, or 0.47% of the unfunded commitments at September 30, 2023.

Deferred Tax Asset and AOCI (Non-GAAP Measures)

The Bank's GAAP tangible book value per share was $5.06 at September 30, 2023.  On a non-GAAP basis, excluding the AOCI loss and the impairment on the Bank's deferred tax asset (two reductions in capital the Bank anticipates it will recover over time), adjusted tangible book value per share was $8.64 at September 30, 2023.

The organization and startup costs incurred during the Bank's organizational period and net operating losses from the beginning of operations created a deferred tax asset of $2.3 million.  This asset is currently fully impaired and will be carried at $0 until sufficient, verifiable evidence exists (generally, sustained profitability) to demonstrate that the deferred tax asset will more likely than not be realized.  At that time, the valuation allowance will be reversed.

The change in value of the Bank's investment securities that are available for sale is recorded in AOCI as a gain or loss, based on current circumstances, and constitutes an unrealized component of equity.  At September 30, 2023, the Bank had an AOCI loss of $21.6 million.  Assuming the underlying investment securities are held until maturity and there are no credit losses, the value of the securities will return to the face value at maturity.  Therefore, as a non-GAAP measure, the Bank eliminates its current AOCI loss from its tangible book value to reflect an adjusted tangible book value.

Outlook

The fixed versus floating rate mix of the Bank's assets and liabilities has resulted in a substantial portion of the liabilities already reflecting increases in market rates whereas the loan portfolio, which has a 2.5 to 3 year average duration, is repricing more slowly.  If current deposit and market rates remain stable, we expect the repricing of our core loan portfolio over the next several quarters will gradually expand the net interest margin.

About Triad Business Bank

With three co-equal offices located in Winston-Salem, High Point and Greensboro, Triad Business Bank focuses on meeting the needs of small to midsize businesses and their owners by providing loans, treasury management and private banking, all with a high level of personal attention and best-in-class technology.  For more information, visit www.triadbusinessbank.com.

Non-GAAP Financial Measures

This release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States ("GAAP").  The management of Triad Business Bank uses these non-GAAP financial measures in its analysis of the Bank's performance.  These measures typically adjust GAAP performance measures to exclude the effects of the provision for loan losses, income tax, deferred tax asset, and AOCI.  Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Bank.  These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward Looking Language

This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of Triad Business Bank.  These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of Triad Business Bank and on the information available to management at the time that these disclosures were prepared.  These statements can be identified by the use of words like "expect," "anticipate," "estimate" and "believe," variations of these words and other similar expressions.  Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements.  Triad Business Bank undertakes no obligation to update any forward-looking statements. 

Triad Business Bank
Balance Sheet (Unaudited)						September 30, 2023		September 30, 2022			$ Change		% Change
	Assets
	Cash & Due from Banks					$              28,774,582		$              47,037,775			$             (18,263,193)		-39 %
	Securities					135,448,032		135,237,677			210,355		0 %
	Federal Funds Sold					-		-			-		0 %
	PPP Loans					563,558		928,829			(365,271)		-39 %
	Core Loans					328,391,061		252,906,111			75,484,950		30 %
	Allowance for Credit Losses ("ACL")					(3,738,836)		(3,161,326)			(577,510)		-18 %
	Loans, Net					325,215,783		250,673,614			74,542,169		30 %
	Other Assets					8,845,602		8,379,460			466,142		6 %
	Total Assets					$            498,283,999		$            441,328,526			$              56,955,473		13 %
	Liabilities
	Demand Deposits					$            101,103,791		$            134,843,448			$             (33,739,657)		-25 %
	ICS Reciprocal - Checking					11,241,300		-			11,241,300		100 %
	Commercial Operating Accounts					112,345,091		134,843,448			(22,498,357)		-17 %
	Interest-bearing NOW					20,914,221		19,567,049			1,347,172		7 %
	Core MMA & Savings					95,161,537		195,380,253			(100,218,716)		-51 %
	ICS Reciprocal - MMA					73,887,703		-			73,887,703		100 %
	Total MMA & Savings					169,049,240		195,380,253			(26,331,013)		-13 %
	Core Time Deposits					10,598,293		1,444,294			9,153,999		634 %
	CDARS - Reciprocal					9,555,900		3,516,682			6,039,218		172 %
	Brokered CDs					129,584,145		44,339,083			85,245,062		192 %
	Total Time Deposits					149,738,338		49,300,059			100,438,279		204 %
	Total Deposits					452,046,890		399,090,809			52,956,081		13 %
	Other Borrowings					9,000,000		-			9,000,000		100 %
	Federal Funds Purchased					-		-			-		0 %
	ACL on Unfunded Commitments					647,068		-			647,068		100 %
	Other Liabilities					2,750,602		3,008,372			(257,770)		-9 %
	Total Liabilities					464,444,560		402,099,181			62,345,379		16 %
	Shareholders' Equity
	Common Stock					66,448,450		65,622,058			826,392		1 %
	Accumulated Deficit					(10,978,995)		(7,413,290)			(3,565,705)		-48 %
	Accumulated Other Comprehensive Loss					(21,630,016)		(18,979,423)			(2,650,593)		-14 %
	Total Shareholders' Equity					33,839,439		39,229,345			(5,389,906)		-14 %
	Total Liabilities & Shareholders' Equity					$            498,283,999		$            441,328,526			$              56,955,473		13 %
	Shares Outstanding					6,693,965		6,602,984			90,981		1 %
	Tangible Book Value per Share					$                       5.06		$                       5.94			$                      (0.88)		-15 %

 

Triad Business Bank
Income Statement (Unaudited)							For three months ended		For three months ended
							September 30, 2023		September 30, 2022			$ Change		% Change
	Interest Income
	Interest & Fees on PPP Loans						$                                    1,514		$                                  32,081			$                               (30,567)		-95 %
	Interest & Fees on Core Loans						4,546,056		2,639,317			1,906,739		72 %
	Interest & Dividend Income on Securities						1,171,364		926,042			245,322		26 %
	Interest Income on Balances Due from Banks						405,520		155,882			249,638		160 %
	Other Interest Income						82,167		22,127			60,040		271 %
	Total Interest Income						6,206,621		3,775,449			2,431,172		64 %
	Interest Expense
	Interest on NOW Deposits						217,879		62,688			155,191		248 %
	Interest on Savings & MMA Deposits						1,508,522		430,711			1,077,811		250 %
	Interest on Time Deposits						1,608,518		162,894			1,445,624		887 %
	Interest on Federal Funds Purchased						-		470			(470)		-100 %
	Interest on Borrowings						161,457		33,733			127,724		379 %
	Other Interest Expense						67,359		18,316			49,043		268 %
	Total Interest Expense						3,563,735		708,812			2,854,923		403 %
	Net Interest Income						2,642,886		3,066,637			(423,751)		-14 %
		Provision for Credit Losses					255,792		204,659			51,133		25 %
	Net Interest Income After Provision for CL						2,387,094		2,861,978			(474,884)		-17 %
	Total Noninterest Income						185,914		303,701			(117,787)		-39 %
	Total Gain (Loss) on Securities						(2,800)		(2,856)			56		2 %
	Noninterest Expense
	Salaries & Benefits						2,155,982		2,052,870			103,112		5 %
	Premises & Equipment						125,426		144,455			(19,029)		-13 %
	Total Other Noninterest Expense						947,367		720,716			226,651		31 %
	Total Noninterest Expense						3,228,775		2,918,041			310,734		11 %
		Income (Loss) Before Income Tax					(658,567)		244,782			(903,349)		-369 %
		Income Tax					-		17,199			(17,199)		-100 %
		Net Income (Loss)					$                      (658,567)		$                       227,583			$                      (886,150)		-389 %
	Net Income (Loss) per Share
		Basic					$                           (0.10)		$                            0.03			$                           (0.13)		-385 %
		Diluted					$                           (0.10)		$                            0.03			$                           (0.13)		-396 %
	Weighted Average Shares Outstanding
		Basic					6,693,965		6,602,984			90,981		1 %
		Diluted					6,693,965		6,842,779			(148,814)		-2 %
	Pre-provision, Pre-tax Income (Loss)						$                      (402,775)		$                       449,441			$                      (852,216)		-190 %

 

Triad Business Bank
Key Ratios & Other Information (Unaudited)
							Quarter Ended						Quarter Ended
							9/30/2023						9/30/2022
							Interest						Interest
							Income/		Yield/				Income/		Yield/
					Balance		Expense		Rate		Balance		Expense		Rate
Yield on Average Loans
Average PPP Loans					$          592,455		$                1,514		1.014 %		$       1,535,894		$             32,081		8.287 %
Average Core Loans					318,855,500		4,546,056		5.656 %		249,410,110		2,639,317		4.198 %
Yield on Average Investment Securities					$  138,477,492		$       1,171,364		3.356 %		$  140,999,639		$           926,042		2.606 %
Yield on Average Interest-earning Assets					$  488,316,194		$       6,206,621		5.043 %		$  423,153,761		$       3,775,449		3.540 %
Cost of Average Interest-bearing Liabilities					$  354,359,505		$       3,563,735		3.990 %		$  261,272,291		$           708,812		1.076 %
Net Interest Margin
Interest Income							$       6,206,621						$       3,775,449
Interest Expense							3,563,735						708,812
Average Earnings Assets					$  488,316,194						$  423,153,761
Net Interest Income & Net Interest Margin							$       2,642,886		2.147 %				$       3,066,637		2.875 %
Loan to Asset Ratio
Loan Balance					$  328,954,619						$  253,834,940
Total Assets					498,283,999				66.017 %		441,328,526				57.516 %
Leverage Ratio
Tier 1 Capital					$    55,469,455						$    58,208,768
Average Total Assets					515,545,712				10.759 %		445,828,670				13.056 %
Unfunded Commitments to Extend Credit					$  138,956,259						$    96,122,332
Standby Letters of Credit					17,240						277,240

 

Triad Business Bank
Balance Sheet (Unaudited)						September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
	Assets
	Cash & Due from Banks					$              28,774,582		$              52,211,693		$              41,939,297		$              30,177,676		$              47,037,775
	Securities					135,448,032		139,889,880		136,775,960		137,158,352		135,237,677
	Federal Funds Sold					-		-		-		-		-
	PPP Loans					563,558		644,855		767,312		848,172		928,829
	Core Loans					328,391,061		315,566,125		300,203,024		272,200,717		252,906,111
	Allowance for Credit Losses ("ACL")					(3,738,836)		(3,509,593)		(3,354,606)		(3,418,841)		(3,161,326)
	Loans, Net					325,215,783		312,701,387		297,615,730		269,630,048		250,673,614
	Other Assets					8,845,602		8,296,216		8,598,657		8,142,741		8,379,460
	Total Assets					$            498,283,999		$            513,099,176		$            484,929,644		$            445,108,817		$            441,328,526
	Liabilities
	Demand Deposits					$            101,103,791		$            104,796,822		$            106,109,354		$            176,820,321		$            134,843,448
	ICS Reciprocal - Checking					11,241,300		29,689,563		26,977,867		-		-
	Commercial Operating Accounts					112,345,091		134,486,385		133,087,221		176,820,321		134,843,448
	Interest-bearing NOW					20,914,221		19,885,942		5,468,207		13,209,174		19,567,049
	Core MMA & Savings					95,161,537		95,250,866		169,575,165		159,857,410		195,380,253
	ICS Reciprocal - MMA					73,887,703		78,325,692		20,430,098		-		-
	Total MMA & Savings					169,049,240		173,576,558		190,005,263		159,857,410		195,380,253
	Core Time Deposits					10,598,293		9,541,015		7,421,530		3,748,773		1,444,294
	CDARS - Reciprocal					9,555,900		10,343,801		5,746,927		3,012,964		3,516,682
	Brokered CDs					129,584,145		120,201,839		87,165,000		36,213,632		44,339,083
	Total Time Deposits					149,738,338		140,086,655		100,333,457		42,975,369		49,300,059
	Total Deposits					452,046,890		468,035,540		428,894,148		392,862,274		399,090,809
	Other Borrowings					9,000,000		5,000,000		15,000,000		10,000,000		-
	Federal Funds Purchased					-		-		-		-		-
	ACL on Unfunded Commitments					647,068		620,519		700,980		-		-
	Other Liabilities					2,750,602		2,803,124		2,435,003		3,807,240		3,008,372
	Total Liabilities					464,444,560		476,459,183		447,030,131		406,669,514		402,099,181
	Shareholders' Equity
	Common Stock					66,448,450		66,206,484		66,037,467		65,824,785		65,622,058
	Accumulated Deficit					(10,978,995)		(10,320,428)		(9,884,175)		(7,334,490)		(7,413,290)
	Accumulated Other Comprehensive Loss					(21,630,016)		(19,246,063)		(18,253,779)		(20,050,992)		(18,979,423)
	Total Shareholders' Equity					33,839,439		36,639,993		37,899,513		38,439,303		39,229,345
	Total Liabilities & Shareholders' Equity					$            498,283,999		$            513,099,176		$            484,929,644		$            445,108,817		$            441,328,526
	Shares Outstanding					6,693,965		6,693,965		6,602,984		6,602,984		6,602,984
	Tangible Book Value per Share					$                       5.06		$                       5.47		$                       5.74		$                       5.82		$                       5.94

 

Triad Business Bank
Income Statement (Unaudited)							For three months ended		For three months ended		For three months ended		For three months ended		For three months ended
							September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
	Interest Income
	Interest & Fees on PPP Loans						$                                    1,514		$                                    2,016		$                                    2,017		$                                    2,267		$                                      32,081
	Interest & Fees on Core Loans						4,546,056		4,154,484		3,533,828		3,221,915		2,639,317
	Interest & Dividend Income on Securities						1,171,364		1,090,464		1,011,613		966,457		926,042
	Interest Income on Balances Due from Banks						405,520		391,371		308,571		356,933		155,882
	Other Interest Income						82,167		76,387		60,029		46,138		22,127
	Total Interest Income						6,206,621		5,714,722		4,916,058		4,593,710		3,775,449
	Interest Expense
	Interest on NOW Deposits						217,879		184,372		93,294		83,153		62,688
	Interest on Savings & MMA Deposits						1,508,522		1,329,486		1,342,045		939,932		430,711
	Interest on Time Deposits						1,608,518		1,228,575		591,865		235,806		162,894
	Interest on Federal Funds Purchased						-		170		-		-		470
	Interest on Borrowings						161,457		187,215		180,360		41,303		33,733
	Other Interest Expense						67,359		62,970		54,519		40,651		18,316
	Total Interest Expense						3,563,735		2,992,788		2,262,083		1,340,845		708,812
	Net Interest Income						2,642,886		2,721,934		2,653,975		3,252,865		3,066,637
		Provision for Credit Losses					255,792		74,526		2,262,148		257,515		204,659
	Net Interest Income After Provision for CL						2,387,094		2,647,408		391,827		2,995,350		2,861,978
	Total Noninterest Income						185,914		163,673		193,706		162,873		303,701
	Total Gain (Loss) on Securities						(2,800)		4,200		27,300		(94,500)		(2,856)
	Noninterest Expense
	Salaries & Benefits						2,155,982		2,110,577		2,061,734		2,086,924		2,052,870
	Premises & Equipment						125,426		135,379		135,654		111,398		144,455
	Total Other Noninterest Expense						947,367		1,005,578		839,972		758,263		720,716
	Total Noninterest Expense						3,228,775		3,251,534		3,037,360		2,956,585		2,918,041
		Income (Loss) Before Income Tax					(658,567)		(436,253)		(2,424,527)		107,138		244,782
		Income Tax					-		-		-		28,338		17,199
		Net Income (Loss)					$                      (658,567)		$                      (436,253)		$                   (2,424,527)		$                         78,800		$                          227,583
	Net Income (Loss) per Share
		Basic					$                           (0.10)		$                           (0.07)		$                           (0.37)		$                            0.01		$                               0.03
		Diluted					$                           (0.10)		$                           (0.07)		$                           (0.37)		$                            0.01		$                               0.03
	Weighted Average Shares Outstanding
		Basic					6,693,965		6,622,596		6,602,984		6,602,984		6,602,984
		Diluted					6,693,965		6,622,596		6,602,984		6,842,684		6,842,779
	Pre-provision, Pre-tax Income (Loss)						$                      (402,775)		$                      (361,727)		$                      (162,379)		$                       364,653		$                          449,441

 

Triad Business Bank
Capital and Capital Ratios (Unaudited)
					Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended				Quarter Ended
					9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
					Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Actual
(dollars in thousands)
Total Capital (to risk-weighted assets)					$  59,855		12.89 %		$ 60,017		13.41 %		$ 60,210		14.03 %		$ 61,909		15.45 %		$ 61,370		16.26 %
Tier 1 Capital (to risk-weighted assets)					$  55,469		11.94 %		$ 55,886		12.48 %		$ 56,154		13.09 %		$ 58,490		14.60 %		$ 58,209		15.42 %
Tier 1 Capital (to average assets)					$  55,469		10.76 %		$ 55,886		11.11 %		$ 56,154		11.73 %		$ 58,490		12.44 %		$ 58,209		13.06 %
Minimum To Be Well-Capitalized Under
Prompt Corrective Action Provisions
(dollars in thousands)
Total Capital (to risk-weighted assets)					$  46,000		10.00 %		$ 45,000		10.00 %		$ 43,000		10.00 %		$ 40,000		10.00 %		$ 38,000		10.00 %
Tier 1 Capital (to risk-weighted assets)					$  37,000		8.00 %		$ 36,000		8.00 %		$ 34,000		8.00 %		$ 32,000		8.00 %		$ 30,000		8.00 %
Tier 1 Capital (to average assets)					$  26,000		5.00 %		$ 25,000		5.00 %		$ 24,000		5.00 %		$ 24,000		5.00 %		$ 22,000		5.00 %

 

Triad Business Bank
Non-GAAP Measures (Unaudited)
Tangible Book Value
								Actual 9/30/2023		Non-GAAP 9/30/2023
Total Shareholders' Equity								$ 33,839,439		$ 33,839,439
Eliminate Deferred Tax Asset Valuation Allowance								-		2,341,282
Eliminate Accumulated Other Comprehensive Loss								-		21,630,016
Adjusted Shareholders' Equity								$ 33,839,439		$ 57,810,737
Shares Outstanding								6,693,965		6,693,965
Tangible Book Value per Share								$            5.06		$            8.64
Effect of Non-GAAP Measures on Tangible Book Value										$            3.58
During the start-up phase of the Bank, a valuation allowance was created which fully impairs the deferred tax asset.  When sufficient, verifiable
evidence exists (generally, sustained profitability) demonstrating that the deferred tax asset will more likely than not be realized, the valuation
allowance will be eliminated.  This Non-GAAP measure is shown to disclose the effect on tangible book value per share at September 30, 2023 had
there been no valuation allowance at that date.
Changes in the market value of available-for-sale securities are reflected in accumulated other comprehensive loss.  Since the securities value
will return to face value at maturity, assuming the underlying securities are held to maturity and there is no credit loss, accumulated other
comprehensive loss has been eliminated in this Non-GAAP measure.
Pre-provision Income (Loss)
								Qtr Ended 9/30/2023		Qtr Ended 9/30/2022
Income (Loss) Before Income Tax								$    (658,567)		$      244,782
Provision for Loan Losses								255,792		204,659
Pre-provision Income (Loss) Before Income Tax (Non-GAAP)								$    (402,775)		$      449,441
The pre-provision income (loss) is a measure of operating performance exclusive of potential losses from lending.

 

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SOURCE Triad Business Bank

FAQ

What was Triad Business Bank's core operating loss in Q3 2023?

Triad Business Bank reported a core operating loss of $403,000 in Q3 2023.

What was the bank's net interest margin in Q3 2023?

The bank's net interest margin declined to 2.15% in Q3 2023.

What was Triad Business Bank's regulatory capital at September 30, 2023?

Triad Business Bank's regulatory capital was $59.9 million at September 30, 2023.