Questions? +1 (202) 335-3939 Login
Trusted News Since 1995
A service for global professionals · Saturday, May 15, 2021 · 541,204,004 Articles · 3+ Million Readers

CBTX, Inc. Reports Quarterly Financial Results

/EIN News/ -- HOUSTON, April 28, 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 its results for the first quarter of 2021.

Robert R. Franklin, Jr., Chairman, CEO and President of the Company stated, “During the first quarter of 2021, our markets continued to improve as companies worked toward returning to pre-pandemic operation. Every day we see more people returning to work as businesses create healthy work environments for both employees and customers. We have seen tremendous liquidity in the system, and our deposits continued to grow through the first quarter of 2021. We anticipate that as the economy recovers, we will see more of that liquidity put to work by our customers and the bank.”

Mr. Franklin concluded, “Our loan portfolio remains strong with little deferral activity remaining. We will continue to work with customers in the hardest hit segments of the economy that will take a little longer to recover. We are also mindful to enhance our shareholders’ return as we increased our quarterly dividend from $0.10 per share to $0.13 per share. We are optimistic about the second half of the year as markets attempt to recapture some of the lost revenues of the last year. Our balance sheet and capital remain strong which gives us many options going forward to drive shareholder value.”

Highlights

  • Net income was $10.0 million for the first quarter of 2021, or $0.41 per diluted share, compared to $10.2 million, or $0.41 per diluted share, for the quarter ended December 31, 2020 and $7.5 million, or $0.30 per diluted share, for the quarter ended March 31, 2020.

  • Total deposits were $3.4 billion at March 31, 2021, an increase of $83.0 million compared to $3.3 billion at December 31, 2020. 

  • Maintained a solid net interest margin on a tax equivalent basis of 3.71% for the quarter ended March 31, 2021.

  • Nonperforming assets remained low at 0.59% of total assets at March 31, 2021, compared to 0.61% of total assets at December 31, 2020.

  • Increased quarterly dividend to $0.13 per share from $0.10 per share.

Operating Results

Net Interest Income

Net interest income was $33.1 million for the first quarter of 2021, compared to $32.5 million for the fourth quarter of 2020 and $32.2 million for the first quarter of 2020. Net interest income increased $570,000 during the first quarter of 2021, compared to the fourth quarter of 2020, primarily due to higher loan rates and lower deposit rates, partially offset by the impact of two fewer days and lower average loans in the first quarter of 2021. Net interest income increased $870,000 during the first quarter of 2021, compared to the first quarter of 2020, primarily due to higher average loans, securities and other interest-earning assets and lower deposit rates, partially offset by lower rates on loans, securities and other interest-earning assets and the impact of one less day in the first quarter of 2021.

The yield on interest-earning assets was 3.85% for the first quarter of 2021, compared to 3.79% for the fourth quarter of 2020 and 4.56% for the first quarter of 2020. The cost of interest-bearing liabilities was 0.34% for the first quarter of 2021, 0.39% for the fourth quarter of 2020 and 0.94% for the first quarter of 2020. The Company’s net interest margin on a tax equivalent basis was 3.71% for the first quarter of 2021, compared to 3.62% for the fourth quarter of 2020 and 4.06% for the first quarter of 2020.

Provision/Recapture for Credit Losses

The provision for credit losses was $412,000 for the first quarter of 2021, compared to a credit reserve recapture of $135,000 for the fourth quarter of 2020 and a provision for credit losses of $5.0 million for the first quarter of 2020.

The provision for credit losses for the first quarter of 2021 was primarily due to increases of $237,000 and $126,000 in the ACL for loans and unfunded commitments, respectively, in addition to $49,000 in net loan charge-offs. The recapture in the fourth quarter of 2020 primarily related to a $364,000 recapture for unfunded commitments, partially offset by a provision of $229,000 for loans. The provision for credit losses for the first quarter of 2020 resulted from the impact of the COVID-19 pandemic and the sustained instability of the oil and gas industry which led to the adjustment of certain factors utilized to determine the ACL.  

The ACL for loans was $40.9 million, or 1.41% of loans excluding loans held for sale, at March 31, 2021, compared to $40.6 million, or 1.39% of loans excluding loans held for sale, at December 31, 2020 and $31.2 million, or 1.17% of loans excluding loans held for sale, at March 31, 2020.  At March 31, 2021, there were minimal adjustments to the qualitative factors utilized in calculating the ACL. The increase in the ACL from December 31, 2020 to March 31, 2021 was primarily due to an increase in specific reserves for loans individually evaluated within the portfolio and a slight increase in the general reserve. Although the collectively evaluated loan portfolio decreased $27.3 million compared to December 31, 2020, the general reserve increased $14,000 because balances in certain portfolio segments with higher historical loss rates and higher qualitative factor rates increased as a component of the overall portfolio resulting in an increase in the ACL. The increase in the ACL from March 31, 2020 to March 31, 2021 was primarily due to the impact of the COVID-19 pandemic and the sustained instability of the oil and gas industry during 2020.

The ACL for unfunded commitments was $4.3 million at March 31, 2021, compared to $4.2 million at December 31, 2020 and $3.7 million at March 31, 2020.

Noninterest Income

Noninterest income was $3.1 million for the first quarter of 2021, $3.5 million for the fourth quarter of 2020 and $4.3 million for the first quarter of 2020. The decrease of $1.2 million for the first quarter of 2021, compared to the first quarter of 2020, was primarily due to swap origination fee income recognized in 2020.

Noninterest Expense

Noninterest expense was $23.3 million for the first quarter of 2021, compared to $23.7 million for the fourth quarter of 2020 and $22.1 million for the first quarter of 2020. The decrease in noninterest expense of $373,000 between the first quarter of 2021 and the fourth quarter of 2020 was primarily due to a $1.5 million decrease in professional and director fees, mainly consulting fees related to Bank Secrecy Act/Anti-Money Laundering, or BSA/AML, compliance matters, partially offset by a $1.3 million increase in salaries and employee benefits reflecting reductions to bonus accruals in the fourth quarter of 2020. Total consulting related fees associated with BSA/AML compliance matters were $661,000 in the first quarter of 2021, compared to $2.4 million in the fourth quarter of 2020.

The increase in noninterest expense of $1.2 million for the first quarter of 2021, compared to the first quarter of 2020, was primarily due to a $551,000 increase in professional and director fees, a $354,000 increase in data processing and software and a $453,000 increase in regulatory fees. The increase in professional and director fees during the first quarter of 2021, compared to the first quarter of 2020, was primarily due to $661,000 in consulting related fees associated with BSA/AML compliance matters recognized in the first quarter of 2021.

Income Taxes

Income tax expense was $2.5 million for the first quarter of 2021, $2.3 million for the fourth quarter of 2020 and $1.9 million for the first quarter of 2020. The effective tax rates were 19.87% for the first quarter of 2021, 18.24% for the fourth quarter of 2020 and 19.85% for the first quarter of 2020. 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.

Balance Sheet Highlights

Loans

Loans excluding loans held for sale were $2.9 billion at March 31, 2021, $2.9 billion at December 31, 2020 and $2.7 billion at March 31, 2020.

The increase from March 31, 2020 to March 31, 2021 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, net of deferred fees and unearned discounts, were $268.8 million at March 31, 2021 and $271.2 million at December 31, 2020.

In support of customers impacted by the COVID-19 pandemic, the Company offered relief through payment deferrals during 2020 and the first quarter of 2021. As of March 31, 2021, the Company had 16 loans subject to such deferral arrangements with total outstanding principal balances of $34.3 million and as of December 31, 2020 the Company had 21 loans subject to such deferral arrangements with total outstanding principal balances of $38.4 million.

Asset Quality

Nonperforming assets remain relatively low at $23.6 million, or 0.59% of total assets, at March 31, 2021, $24.0 million, or 0.61% of total assets, at December 31, 2020 and $1.4 million, or 0.04% of total assets, at March 31, 2020.

Annualized net charge-offs (recoveries) to average loans was 0.01% for the first quarter of 2021, 0.49% for the fourth quarter of 2020 and (0.05)% for the first quarter of 2020.

Deposits and Borrowings

Total deposits were $3.4 billion at March 31, 2021, $3.3 billion at December 31, 2020 and $2.8 billion at March 31, 2020. The increase in deposits of $83.0 million between December 31, 2020 and March 31, 2021 was due to net deposit inflows of $145.0 million in noninterest-bearing accounts partially offset by net deposit outflows of $62.0 million in interest-bearing accounts. The increase in deposits of $592.5 million between March 31, 2020 and March 31, 2021 was due to net deposit inflows of $425.9 million and $166.6 million in noninterest-bearing accounts and interest-bearing accounts, respectively.

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, $50.0 million and $51.4 million at March 31, 2021, December 31, 2020 and March 31, 2020, respectively.

Capital

At March 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 17.00% at March 31, 2021, compared to 16.71% at December 31, 2020 and 16.42% at March 31, 2020. The Company’s tier 1 leverage ratio was 11.90% at March 31, 2021, compared to 12.00% at December 31, 2020 and 13.18% at March 31, 2020. The Company’s total shareholders’ equity to total assets ratio was 13.54% at March 31, 2021, 13.84% at December 31, 2020 and 15.67% at March 31, 2020.

The ratio of tangible equity to tangible assets was 11.67% at March 31, 2021, 11.94% at December 31, 2020 and 13.51% at March 31, 2020. 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 “Non‑GAAP 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 its 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 March 31, 2021 on April 29, 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 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: the Company’s ability to manage the economic risks related to the impact of the COVID-19 pandemic and the sustained instability in 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); natural disasters and adverse weather (including the effects of recent hurricanes, tropical storms, tropical depressions and winter storms on the Company’s market area), acts of war or terrorism, pandemics, an outbreak of hostilities or other international or domestic calamities and other matters beyond the Company’s control; the geographic concentration of the Company’s markets in Beaumont and Houston, 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 and in the financial services industry, and within the Company’s primary markets; volatility and direction of oil prices, including risks related to the collapse and instability in 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 the Company’s borrowers and the concentration of loans in specialized industries, including the creditworthiness of energy company borrowers; 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; 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 third‑party 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; the 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 of the U.S. Department of Treasury, or FinCEN, 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 further government intervention 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
       3/31/2021      12/31/2020      9/30/2020      6/30/2020      3/31/2020
Profitability:                              
Net income   $ 10,019     $ 10,236     $ 6,421     $ 2,163     $ 7,541  
Basic earnings per share   $ 0.41     $ 0.42     $ 0.26     $ 0.09     $ 0.30  
Diluted earnings per share   $ 0.41     $ 0.41     $ 0.26     $ 0.09     $ 0.30  
                               
Return on average assets(1)     1.03 %     1.05 %     0.66 %     0.23 %     0.87 %
Return on average shareholders' equity(1)     7.39 %     7.47 %     4.70 %     1.60 %     5.64 %
Net interest margin - tax equivalent(1)     3.71 %     3.62 %     3.55 %     3.68 %     4.06 %
Efficiency ratio(2)     64.32 %     65.64 %     66.77 %     64.15 %     60.44 %
                               
Liquidity and Capital Ratios:                              
Total shareholders' equity to total assets     13.54 %     13.84 %     14.18 %     13.77 %     15.67 %
Tangible equity to tangible assets(3)     11.67 %     11.94 %     12.22 %     11.84 %     13.51 %
Common equity tier 1 capital ratio     15.75 %     15.45 %     15.41 %     15.30 %     15.23 %
Tier 1 risk-based capital ratio     15.75 %     15.45 %     15.41 %     15.30 %     15.23 %
Total risk-based capital ratio     17.00 %     16.71 %     16.67 %     16.56 %     16.42 %
Tier 1 leverage ratio     11.90 %     12.00 %     11.90 %     11.96 %     13.18 %
                               
Credit Quality:                              
Allowance for credit losses for loans to loans excluding loans held for sale     1.41 %     1.39 %     1.49 %     1.35 %     1.17 %
Nonperforming assets to total assets     0.59 %     0.61 %     0.41 %     0.29 %     0.04 %
Nonperforming loans to loans excluding loans held for sale     0.81 %     0.82 %     0.53 %     0.38 %     0.05 %
Net charge-offs (recoveries) to average loans(1)     0.01 %     0.49 %     0.02 %     0.01 %     (0.05 )%
                               
Other Data:                              
Weighted average common shares outstanding - basic     24,508       24,621       24,748       24,752       24,926  
Weighted average common shares outstanding - diluted     24,616       24,678       24,770       24,780       25,000  
Common shares outstanding at period end     24,442       24,613       24,713       24,755       24,746  
Dividends per share   $ 0.13     $ 0.10     $ 0.10     $ 0.10     $ 0.10  
Book value per share   $ 22.31     $ 22.20     $ 21.89     $ 21.71     $ 21.70  
Tangible book value per share(3)   $ 18.84     $ 18.74     $ 18.44     $ 18.26     $ 18.23  
Employees - full-time equivalents     517       511       515       523       512  


     
(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)

                               
       3/31/2021      12/31/2020   9/30/2020   6/30/2020   3/31/2020
                               
Loans excluding loans held for sale   $ 2,891,632     $ 2,924,117     $ 2,964,526     $ 2,934,888     $ 2,671,587  
Allowance for credit losses for loans     (40,874 )     (40,637 )     (44,069 )     (39,678 )     (31,194 )
Loans, net     2,850,758       2,883,480       2,920,457       2,895,210       2,640,393  
                               
Cash and equivalents     604,671       538,007       377,572       492,400       284,898  
Securities     289,091       237,281       226,101       235,438       234,014  
Premises and equipment     60,551       61,152       61,732       50,729       50,243  
Goodwill     80,950       80,950       80,950       80,950       80,950  
Other intangible assets     3,991       4,171       4,303       4,496       4,700  
Loans held for sale     1,005       2,673       1,763       -       882  
Operating lease right-to-use asset     12,900       13,285       12,893       14,081       12,577  
Other assets     124,722       128,218       128,901       128,421       116,993  
Total assets   $ 4,028,639     $ 3,949,217     $ 3,814,672     $ 3,901,725     $ 3,425,650  
                               
Noninterest-bearing deposits   $ 1,621,408     $ 1,476,425     $ 1,460,983     $ 1,513,748     $ 1,195,541  
Interest-bearing deposits     1,763,339       1,825,369       1,709,681       1,740,455       1,596,692  
Total deposits     3,384,747       3,301,794       3,170,664       3,254,203       2,792,233  
                               
Federal Home Loan Bank advances     50,000       50,000       50,000       50,000       50,000  
Repurchase agreements                 2,153       2,500       1,415  
Operating lease liabilities     16,060       16,447       15,759       16,983       15,356  
Other liabilities     32,483       34,525       35,175       40,683       29,772  
Total liabilities     3,483,290       3,402,766       3,273,751       3,364,369       2,888,776  
                               
Total shareholders’ equity     545,349       546,451       540,921       537,356       536,874  
Total liabilities and shareholders’ equity   $ 4,028,639     $ 3,949,217     $ 3,814,672     $ 3,901,725     $ 3,425,650  



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

                                     
    Three Months Ended
       3/31/2021      12/31/2020      9/30/2020      6/30/2020      3/31/2020
Interest income                                    
Interest and fees on loans   $ 33,165     $ 32,886     $ 32,318     $ 32,857     $ 33,617  
Securities     1,173       1,070       1,107       1,228       1,363  
Other interest-earning assets     177       168       176       169       1,055  
Equity investments     146       170       162       171       176  
Total interest income     34,661       34,294       33,763       34,425       36,211  
Interest expense                                    
Deposits     1,350       1,549       1,831       2,022       3,766  
Federal Home Loan Bank advances     221       221       221       240       221  
Other interest-bearing liabilities           4       3       5       4  
Total interest expense     1,571       1,774       2,055       2,267       3,991  
Net interest income     33,090       32,520       31,708       32,158       32,220  
Provision (recapture) for credit losses                                    
Provision for credit losses for loans     286       229       4,569       8,537       4,739  
Provision (recapture) for credit losses for unfunded commitments     126       (364 )     (461 )     1,333       310  
Total provision (recapture) for credit losses     412       (135 )     4,108       9,870       5,049  
Net interest income after provision (recapture) for credit losses     32,678       32,655       27,600       22,288       27,171  
Noninterest income                                    
Deposit account service charges     1,193       1,270       1,176       1,095       1,485  
Card interchange fees     976       999       995       915       922  
Earnings on bank-owned life insurance     390       407       1,187       412       416  
Net gain on sales of assets     192       379       114       139       123  
Other     360       467       551       348       1,381  
Total noninterest income     3,111       3,522       4,023       2,909       4,327  
Noninterest expense                                    
Salaries and employee benefits     14,188       12,848       14,332       14,012       14,223  
Occupancy expense     2,521       2,628       2,496       2,558       2,424  
Professional and director fees     1,703       3,209       2,446       1,541       1,152  
Data processing and software     1,576       1,330       1,525       1,292       1,222  
Regulatory fees     556       748       471       476       103  
Advertising, marketing and business development     285       438       429       269       364  
Telephone and communications     463       455       486       392       419  
Security and protection expense     390       423       299       351       374  
Amortization of intangibles     191       197       198       230       221  
Other expenses     1,412       1,382       1,176       1,374       1,587  
Total noninterest expense     23,285       23,658       23,858       22,495       22,089  
Net income before income tax expense     12,504       12,519       7,765       2,702       9,409  
Income tax expense     2,485       2,283       1,344       539       1,868  
Net income   $ 10,019     $ 10,236     $ 6,421     $ 2,163     $ 7,541  



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

                                                       
    Three Months Ended
    3/31/2021   12/31/2020   3/31/2020
    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)   $ 2,901,291     $ 33,165     4.64 %   $ 2,961,622     $ 32,886     4.42 %   $ 2,634,507     $ 33,617     5.13 %
Securities     259,341       1,173     1.84 %     236,233       1,070     1.80 %     233,917       1,363     2.34 %
Other interest-earning assets     475,279       177     0.15 %     388,936       168     0.17 %     315,099       1,055     1.35 %
Equity investments     15,353       146     3.86 %     15,346       170     4.41 %     13,661       176     5.18 %
Total interest-earning assets     3,651,264     $ 34,661     3.85 %     3,602,137     $ 34,294     3.79 %     3,197,184     $ 36,211     4.56 %
Allowance for credit losses for loans     (41,078 )                 (44,233 )                 (25,831 )            
Noninterest-earning assets     321,334                   321,303                   296,698              
Total assets   $ 3,931,520                 $ 3,879,207                 $ 3,468,051              
Liabilities and Shareholders’ Equity                                                      
Interest-bearing liabilities:                                                      
Interest-bearing deposits   $ 1,802,175     $ 1,350     0.30 %   $ 1,744,557     $ 1,549     0.35 %   $ 1,650,064     $ 3,766     0.92 %
Federal Home Loan Bank advances     50,000       221     1.79 %     50,163       221     1.76 %     50,000       221     1.78 %
Other interest-bearing liabilities                     1,426       4           763       4      
Total interest-bearing liabilities     1,852,175     $ 1,571     0.34 %     1,796,146     $ 1,774     0.39 %     1,700,827     $ 3,991     0.94 %
Noninterest-bearing liabilities:                                                      
Noninterest-bearing deposits     1,478,183                   1,482,753                   1,184,776              
Other liabilities     51,634                   55,174                   44,620              
Total noninterest-bearing liabilities     1,529,817                   1,537,927                   1,229,396              
Shareholders’ equity     549,528                   545,134                   537,828              
Total liabilities and shareholders’ equity   $ 3,931,520                 $ 3,879,207                 $ 3,468,051              
Net interest income         $ 33,090               $ 32,520               $ 32,220      
Net interest spread(3)                 3.51 %                 3.40 %                 3.62 %
Net interest margin(4)                 3.68 %                 3.59 %                 4.05 %
Net interest margin - tax equivalent(5)                 3.71 %                 3.62 %                 4.06 %


     
(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 $299,000, $287,000 and $81,000 for the quarters ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively, were computed using a federal income tax rate of 21%.



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

                         
    Three Months Ended March 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   $ 1,667     $ (670 )   $ (718 )   $ 279  
Securities     23       105       (25 )     103  
Other interest-earning assets     (24 )     37       (4 )     9  
Equity investments     (21 )           (3 )     (24 )
Total increase (decrease) in interest income     1,645       (528 )     (750 )     367  
Interest-bearing liabilities:                        
Interest-bearing deposits     (216 )     51       (34 )     (199 )
Federal Home Loan Bank advances     6       (1 )     (5 )      
Other interest-bearing liabilities     (4 )                 (4 )
Total increase (decrease) in interest expense     (214 )     50       (39 )     (203 )
Increase (decrease) in net interest income   $ 1,859     $ (578 )   $ (711 )   $ 570  


                           
    Three Months Ended March 31, 2021,
      Compared to Three Months Ended March 31, 2020
    Increase (Decrease) due to    
(Dollars in thousands)   Rate   Volume     Days   Total 
Interest-earning assets:                          
Total loans   $ (3,484 )   $ 3,403     $ (371 )   $ (452 )
Securities     (322 )     148       (16 )     (190 )
Other interest-earning assets     (1,404 )     538       (12 )     (878 )
Equity investments     (50 )     22       (2 )     (30 )
Total increase (decrease) in interest income     (5,260 )     4,111       (401 )     (1,550 )
Interest-bearing liabilities:                          
Interest-bearing deposits     (2,722 )     348       (42 )     (2,416 )
Federal Home Loan Bank advances     2             (2 )      
Other interest-bearing liabilities     (4 )                 (4 )
Total increase (decrease) in interest expense     (2,724 )     348       (44 )     (2,420 )
Increase (decrease) in net interest income   $ (2,536 )   $ 3,763     $ (357 )   $ 870  



CBTX, INC. AND SUBSIDIARY
Yield Trend(1)

                     
    Three Months Ended
       3/31/2021   12/31/2020   9/30/2020   6/30/2020   3/31/2020
                     
Interest-earning assets:                    
Total loans   4.64 %   4.42 %   4.37 %   4.54 %   5.13 %
Securities   1.84 %   1.80 %   1.87 %   2.05 %   2.34 %
Other interest-earning assets   0.15 %   0.17 %   0.18 %   0.18 %   1.35 %
Equity investments   3.86 %   4.41 %   4.20 %   4.54 %   5.18 %
Total interest-earning assets   3.85 %   3.79 %   3.75 %   3.91 %   4.56 %
                     
Interest-bearing liabilities:                    
Interest-bearing deposits   0.30 %   0.35 %   0.42 %   0.48 %   0.92 %
Federal Home Loan Bank advances   1.79 %   1.76 %   1.76 %   1.36 %   1.78 %
Other interest-bearing liabilities               0.19 %    
Total interest-bearing liabilities   0.34 %   0.39 %   0.46 %   0.52 %   0.94 %
                     
Net interest spread(2)   3.51 %   3.40 %   3.29 %   3.39 %   3.62 %
Net interest margin(3)   3.68 %   3.59 %   3.52 %   3.65 %   4.05 %
Net interest margin - tax equivalent(4)   3.71 %   3.62 %   3.55 %   3.68 %   4.06 %


     
(1) Annualized.
(2) Net interest spread is the average yield on interest‑earning assets minus the average rate on interest‑bearing liabilities.
(3) Net interest margin is equal to net interest income divided by average interest‑earning 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
       3/31/2021      12/31/2020      9/30/2020      6/30/2020      3/31/2020
                               
Assets                              
Interest-earning assets:                              
Total loans(1)   $  2,901,291     $  2,961,622     $  2,945,320     $  2,908,204     $  2,634,507  
Securities      259,341        236,233        236,015        240,343        233,917  
Other interest-earning assets      475,279        388,936        383,626        378,405        315,099  
Equity investments      15,353        15,346        15,334        15,147        13,661  
Total interest-earning assets      3,651,264        3,602,137        3,580,295        3,542,099        3,197,184  
Allowance for credit losses for loans      (41,078 )      (44,233 )      (40,135 )      (31,443 )      (25,831 )
Noninterest-earning assets      321,334        321,303        326,590        305,821        296,698  
Total assets   $  3,931,520     $  3,879,207     $  3,866,750     $  3,816,477     $  3,468,051  
                               
Liabilities and Shareholders’ Equity                              
Interest-bearing liabilities:                              
Interest-bearing deposits   $  1,802,175     $  1,744,557     $  1,730,812     $  1,687,991     $  1,650,064  
Federal Home Loan Bank advances      50,000        50,163        50,000        70,769        50,000  
Other interest-bearing liabilities      —        1,426        2,230        2,101        763  
Total interest-bearing liabilities      1,852,175        1,796,146        1,783,042        1,760,861        1,700,827  
Noninterest-bearing liabilities:                              
Noninterest-bearing deposits      1,478,183        1,482,753        1,484,557        1,462,271        1,184,776  
Other liabilities      51,634        55,174        55,386        49,958        44,620  
Total noninterest-bearing liabilities      1,529,817        1,537,927        1,539,943        1,512,229        1,229,396  
Shareholders’ equity      549,528        545,134        543,765        543,387        537,828  
Total liabilities and shareholders’ equity   $  3,931,520     $  3,879,207     $  3,866,750     $  3,816,477     $  3,468,051  


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



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

                                                   
    3/31/2021   12/31/2020   9/30/2020   6/30/2020   3/31/2020
    Amount   %     Amount   %     Amount   %     Amount   %     Amount   %  
                                                   
Loan Portfolio:                                                  
Commercial and industrial   $ 756,707     26.1 %   $ 742,957     25.3 %   $ 832,686     28.0 %   $ 837,667     28.4 %   $ 542,650     20.3 %
Real estate:                                                  
Commercial real estate     1,072,263     36.9 %     1,041,998     35.5 %     949,933     31.9 %     908,027     30.8 %     904,395     33.8 %
Construction and development     464,091     16.0 %     522,705     17.8 %     506,216     17.0 %     552,879     18.8 %     558,343     20.8 %
1-4 family residential     224,880     7.7 %     239,872     8.2 %     253,868     8.5 %     272,253     9.2 %     276,142     10.3 %
Multi-family residential     271,719     9.4 %     258,346     8.8 %     298,733     10.0 %     255,273     8.7 %     267,152     10.0 %
Consumer     32,767     1.1 %     33,884     1.1 %     35,637     1.2 %     36,338     1.2 %     38,133     1.4 %
Agriculture     6,974     0.2 %     8,670     0.3 %     9,753     0.3 %     7,795     0.3 %     7,520     0.3 %
Other     74,387     2.6 %     88,238     3.0 %     91,501     3.1 %     77,535     2.6 %     84,076     3.1 %
Gross loans     2,903,788     100.0 %     2,936,670     100.0 %     2,978,327     100.0 %     2,947,767     100.0 %     2,678,411     100.0 %
Less allowance for credit losses     (40,874 )         (40,637 )         (44,069 )         (39,678 )         (31,194 )    
Less deferred fees and unearned discount     (11,151 )         (9,880 )         (12,038 )         (12,879 )         (5,942 )    
Less loans held for sale     (1,005 )         (2,673 )         (1,763 )                   (882 )    
Loans, net   $ 2,850,758         $ 2,883,480         $ 2,920,457         $ 2,895,210         $ 2,640,393      
                                                   
Deposits:                                                  
Interest-bearing demand accounts   $ 368,124     10.9 %   $ 380,175     11.5 %   $ 346,406     10.9 %   $ 366,281     11.2 %   $ 359,943     12.9 %
Money market accounts     995,945     29.4 %     1,039,617     31.5 %     916,668     28.9 %     878,006     27.0 %     760,036     27.2 %
Savings accounts     112,467     3.3 %     108,167     3.3 %     103,062     3.3 %     98,485     3.0 %     90,227     3.2 %
Certificates and other time deposits, $100,000 or greater     145,762     4.3 %     152,592     4.6 %     171,854     5.4 %     200,505     6.2 %     212,341     7.6 %
Certificates and other time deposits, less than $100,000     141,041     4.2 %     144,818     4.4 %     171,691     5.4 %     197,178     6.1 %     174,145     6.3 %
Total interest-bearing deposits     1,763,339     52.1 %     1,825,369     55.3 %     1,709,681     53.9 %     1,740,455     53.5 %     1,596,692     57.2 %
Noninterest-bearing deposits     1,621,408     47.9 %     1,476,425     44.7 %     1,460,983     46.1 %     1,513,748     46.5 %     1,195,541     42.8 %
Total deposits   $ 3,384,747     100.0 %   $ 3,301,794     100.0 %   $ 3,170,664     100.0 %   $ 3,254,203     100.0 %   $ 2,792,233     100.0 %



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

                               
       3/31/2021   12/31/2020   9/30/2020   6/30/2020   3/31/2020
Nonperforming Assets (at period end):                              
Nonaccrual loans:                              
Commercial and industrial   $ 12,230     $ 12,588     $ 6,699     $ 5,519     $ 449  
Real estate:                              
Commercial real estate     10,664       10,665       4,811       4,811       67  
Construction and development     236       238       241       506       519  
1-4 family residential     378       526       325       332       413  
Multi-family residential                              
Consumer                              
Agriculture                              
Other                 3,500              
Nonaccrual loans     23,508       24,017       15,576       11,168       1,448  
Accruing loans 90 or more days past due                              
Total nonperforming loans     23,508       24,017       15,576       11,168       1,448  
Foreclosed assets     106                          
Total nonperforming assets   $ 23,614     $ 24,017     $ 15,576     $ 11,168     $ 1,448  
                               
Allowance for Credit Losses for Loans (at period end):                              
Commercial and industrial   $ 13,812     $ 13,035     $ 13,347     $ 12,108     $ 9,535  
Real estate:                              
Commercial real estate     14,280       13,798       12,745       12,424       9,576  
Construction and development     5,445       6,089       6,334       7,050       5,795  
1-4 family residential     2,458       2,578       2,871       3,173       2,430  
Multi-family residential     2,714       2,513       3,117       2,880       2,413  
Consumer     434       440       507       529       477  
Agriculture     107       137       164       134       129  
Other     1,624       2,047       4,984       1,380       839  
Total allowance for credit losses for loans   $ 40,874     $ 40,637     $ 44,069     $ 39,678     $ 31,194  
                               
Credit Quality Ratios (at period end):                              
Nonperforming assets to total assets     0.59 %     0.61 %     0.41 %     0.29 %     0.04 %
Nonperforming loans to loans excluding loans held for sale     0.81 %     0.82 %     0.53 %     0.38 %     0.05 %
Allowance for credit losses for loans to nonperforming loans     173.87 %     169.20 %     282.93 %     355.28 %     2,154.28 %
Allowance for credit losses for loans to loans excluding loans held for sale     1.41 %     1.39 %     1.49 %     1.35 %     1.17 %



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

                               
    Three Months Ended
       3/31/2021      12/31/2020      9/30/2020      6/30/2020      3/31/2020
                               
Beginning balance   $ 40,637     $ 44,069     $ 39,678     $ 31,194     $ 25,280  
                               
Adoption of CECL                             874  
                               
Provision     286       229       4,569       8,537       4,739  
                               
Net (charge-offs) recoveries:                              
Commercial and industrial     (95 )     (305 )     (31 )     18       398  
Real estate:                              
Commercial real estate           143       (135 )     (24 )      
Construction and development                              
1-4 family residential                 (5 )     (66 )     1  
Multi-family residential                              
Consumer     4       1       (7 )     7       (99 )
Agriculture     42                   12        
Other           (3,500 )                 1  
Total net (charge-offs) recoveries     (49 )     (3,661 )     (178 )     (53 )     301  
Ending balance   $ 40,874     $ 40,637     $ 44,069     $ 39,678     $ 31,194  
Net charge-offs (recoveries) to average loans(1)     0.01 %     0.49 %     0.02 %     0.01 %     (0.05 )%


     
(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 as in effect from time to time in the United States 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.

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:

                               
       3/31/2021   12/31/2020   9/30/2020   6/30/2020   3/31/2020
Tangible Equity                              
Total shareholders’ equity   $ 545,349     $ 546,451     $ 540,921     $ 537,356     $ 536,874  
Adjustments:                              
Goodwill     80,950       80,950       80,950       80,950       80,950  
Other intangibles     3,991       4,171       4,303       4,496       4,700  
Tangible equity   $ 460,408     $ 461,330     $ 455,668     $ 451,910     $ 451,224  
Tangible Assets                              
Total assets   $ 4,028,639     $ 3,949,217     $ 3,814,672     $ 3,901,725     $ 3,425,650  
Adjustments:                              
Goodwill     80,950       80,950       80,950       80,950       80,950  
Other intangibles     3,991       4,171       4,303       4,496       4,700  
Tangible assets   $ 3,943,698     $ 3,864,096     $ 3,729,419     $ 3,816,279     $ 3,340,000  
                               
Common shares outstanding     24,442       24,613       24,713       24,755       24,746  
                               
Book value per share   $ 22.31     $ 22.20     $ 21.89     $ 21.71     $ 21.70  
Tangible book value per share   $ 18.84     $ 18.74     $ 18.44     $ 18.26     $ 18.23  
Total shareholders’ equity to total assets     13.54 %     13.84 %     14.18 %     13.77 %     15.67 %
Tangible equity to tangible assets     11.67 %     11.94 %     12.22 %     11.84 %     13.51 %
                                         


Investor Relations:

Justin M. Long
281.325.5013
investors@CBoTX.com

Media Contact:

Ashley Warren
713.210.7622
awarren@CBoTX.com


Primary Logo

Powered by EIN News


EIN Presswire does not exercise editorial control over third-party content provided, uploaded, published, or distributed by users of EIN Presswire. We are a distributor, not a publisher, of 3rd party content. Such content may contain the views, opinions, statements, offers, and other material of the respective users, suppliers, participants, or authors.

Submit your press release