EX-99.1 2 ex-99d1.htm EX-99.1 cbtx_Ex99_1

 

 

Picture 1 

Exhibit 99.1

 

 

CBTX, Inc. Reports Second Quarter Financial Results

 

Houston, Texas, July 25, 2019 -- CBTX, Inc. ,or the Company (NASDAQ: CBTX), the bank holding company for CommunityBank of Texas N.A., or the Bank, today announced net income of $14.3 million, or $0.57 per diluted share, for the quarter ended June 30, 2019, compared to $10.5 million, or $0.42 per diluted share, for the quarter ended March 31, 2019 and $11.0 million, or $0.44 per diluted share, for the quarter ended June 30, 2018. 

 

“We are pleased that the first half of 2019 gave us record profitability, solid loan growth, and strong credit quality,” said Robert Franklin, Jr., Chairman, Chief Executive Officer, and President of the Company. “Our dedicated team continues to work to build our business one quality relationship at a time,” he added. “For the rest of 2019, we will continue to focus on our goals and stay disciplined to our process which we feel drives shareholder value.”

 

“We continue to see good opportunities throughout our markets: Houston, East Texas, and Dallas,” said Franklin. “Although pricing in our markets continues to be challenging on both the loan and deposit sides, we believe that our strong discipline and relationship-driven approach gives us the ability to win new business while maintaining a solid net interest margin.”

 

Franklin further noted, “Our markets remain favorable and we look for that to continue through the remainder of the year. We are cautious about 2020 given the intensity of the political climate going into the presidential election along with downward pressure on interest rates, but we feel well positioned to weather the effects of either on our future.”

 

Highlights

 

·

Loans increased to $2.6 billion at June 30, 2019, compared to $2.5 billion at March 31, 2019 and $2.4 billion at June 30, 2018.  

·

Net interest margin on a tax equivalent basis was 4.53% for the quarter ended June 30, 2019, compared to 4.56% for the first quarter of 2019 and 4.43% for the second quarter of 2018. 

·

The cost of interest-bearing deposits remains low at 1.01% for the three months ended June 30, 2019, compared to 0.94% for the three months ended March 31, 2019 and 0.58% for the three months ended June 30, 2018.  

·

Noninterest income was $7.3 million for the second quarter of 2019, including a gain of $3.3 million recorded related to bank-owned life insurance.

·

Nonperforming assets remain low relative to total assets at 0.10% at June 30, 2019 compared to 0.09% of total assets at March 31, 2019 and 0.16% of total assets at June 30, 2018.  

Operating Results

Net Interest Income

Net interest income was $34.3 million for the second quarter of 2019, compared to $33.3 million for the first quarter of 2019 and $30.9 million for the second quarter of 2018.  The increase in net interest income in the second quarter of 2019 from the first quarter of 2019 was primarily due to higher average loans and the impact of one additional day in the second quarter of 2019 compared the first quarter of 2019, partially offset by higher average Federal Home Loan Bank, or FHLB,  advances and repurchase agreements. 

 

The increase in net interest income in the second quarter of 2019 from the second quarter of 2018 was primarily due to higher average loans, higher average yields on loans and higher yields on federal funds sold and other interest-earning assets, partially offset by the impact of higher rates on interest-bearing deposits and increased average FHLB advances and repurchase agreements.

 

1

 

Provision for Loan Losses

 

Provision for loan loss was $807,000 for the second quarter of 2019, compared to $1.1 million for the first quarter of 2019 and $690,000  for the second quarter of 2018. 

 

The allowance for loan losses was $25.3 million, or 0.96% of total loans, at June 30, 2019, compared to $24.6 million, or 0.97% of total loans, at March 31, 2019, and $25.7 million, or 1.07% of total loans, at June 30, 2018.   

 

Noninterest Income

 

Noninterest income was $7.3 million for the second quarter of 2019,  $3.5 million for the first quarter of 2019 and $3.5 million for the second quarter of 2018. During the second quarter of 2019, the Company received nontaxable death benefit proceeds of $4.7 million under bank-owned life insurance policies and recorded a gain of $3.3 million over the carrying value.  

 

Noninterest Expense

 

Noninterest expense was $23.4 million for the second quarter of 2019,  $22.6 million for the first quarter of 2019 and $20.0 million for the second quarter of 2018.  Noninterest expense increased $818,000 during the second quarter of 2019 compared to the first quarter of 2019 primarily due to an increase in salaries and employee benefits resulting from increased headcount and increased legal fees included in professional and director fees The Bank incurred legal fees of $1.4 million in the second quarter of 2019 compared to $1.1 million in the first quarter of 2019. 

 

Noninterest expense increased  $3.4 million in the second quarter of 2019 compared to the second quarter of 2018. Salaries and benefits increased $1.7 million resulting from annual salary increases in 2019 and increased stock compensation expense due to grants of restricted stock during the current quarter. Professional and director fees increased due to legal fees noted above.

 

Income Taxes

 

Income tax expense was $3.1 million for the second quarter of 2019,  $2.6 million for the first quarter of 2019 and $2.6 million for the second quarter of 2018.  

 

The effective tax rates were 17.69% for the second quarter of 2019,  19.86% for the first quarter of 2019 and 19.28% for the second quarter of 2018.  The decrease in the effective tax rate for the second quarter of 2019 was due to the non-taxable gain related to bank-owned life insurance.

 

Balance Sheet Highlights:

 

Loans

 

Loans, excluding loans held for sale, were $2.6 billion at June 30, 2019,  $2.5 billion at March 31, 2019 and $2.4 billion at June 30, 2018.  Loans, excluding loans held for sale, increased 9.9%  during the twelve months ended June 30, 2019 due to organic growth.

 

Asset Quality 

 

Nonperforming assets remain low relative to total assets at $3.3 million, or 0.10% of total assets, at June 30, 2019,  $3.0 million, or 0.09% of total assets, at March 31, 2019 and $4.9 million, or 0.16% of total assets at June 30, 2018.

 

Annualized net charge-offs to average loans were 0.02% for the second quarter of 2019, 0.03% for the first quarter of 2019 and 0.05%  for the second quarter of 2018.  

 

 

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Deposits and Borrowings

 

Total deposits were $2.7 billion at June 30, 2019 and $2.8 billion at March 31, 2019 and $2.6 billion at June 30, 2018. Deposits increased 6.9%  during the twelve months ended June 30, 2019 due to normal fluctuations in customer activities.

 

We define total borrowings as the total of repurchase agreements, FHLB advances and notes payable. Total borrowings were $90.8 million, $1.6 million and $51.4 million at June 30, 2019, March 31, 2019 and June 30, 2018,  respectively.  Borrowings increased during the three months ended June 30, 2019 due to short-term liquidity needs.

 

Capital

 

At June 30, 2019,  the Company remained well capitalized under bank regulatory requirements.  

 

Our ratio of tangible equity to tangible assets was 12.96% at June 30, 2019, 12.89% at March 31, 2019 and 12.41% at June 30, 2018.  Tangible equity to tangible assets is a non-GAAP financial measure.  The most directly comparable GAAP financial measure of tangible equity to tangible assets is total shareholders’ equity to total assets, which was 15.18% at June 30, 2019,  15.19% at March 31, 2019 and 14.87% at June 30, 2018.  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 United States. generally accepted accounting principles, or GAAP, and the prevailing practices in the banking industry. The Company’s management also evaluates performance based on certain additional 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 press release contains certain non-GAAP financial measures including “tangible book value”, “tangible book value per common share,” “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 and other statistical measures or ratios or statistical measures 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.

 

About CBTX, Inc.

 

CBTX, Inc. is the bank holding company for CommunityBank of Texas, N.A., a $3.4  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 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,”

 

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“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: prudently manage and execute its growth strategy; manage risks associated with its acquisition and de novo branching strategy; maintain its asset quality; address the volatility and direction of market interest rates; continue to have access to debt and equity capital markets; avoid or address interruptions or breaches in the Company’s information system security; address the costs and effects of regulatory or other government inquiries, the results of regulatory examinations, investigations or reviews or the ability to obtain the required regulatory approvals; and achieve its performance goals. 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 (“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.

 

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CBTX, INC. AND SUBSIDIARY

Financial Highlights (Unaudited)

(In thousands, except per share data and percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

    

6/30/2019

    

3/31/2019

    

12/31/2018

    

9/30/2018

    

6/30/2018

    

6/30/2019

 

6/30/2018

 

Profitability:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

14,315

 

$

10,490

 

$

14,112

 

$

13,023

 

$

11,042

 

$

24,805

 

$

20,154

 

Basic earnings per share

 

$

0.57

 

$

0.42

 

$

0.57

 

$

0.52

 

$

0.44

 

$

1.00

 

$

0.81

 

Diluted earnings per share

 

$

0.57

 

$

0.42

 

$

0.56

 

$

0.52

 

$

0.44

 

$

0.99

 

$

0.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

 
1.72%

 

 
1.30%

 

 
1.71%

 

 
1.62%

 

 
1.44%

 

 
1.52%

 

 
1.32%

 

Return on average shareholders' equity (1)

 

 
11.30%

 

 
8.59%

 

 
11.66%

 

 
11.02%

 

 
9.66%

 

 
9.97%

 

 
8.94%

 

Net interest margin- tax equivalent (1)

 

 
4.53%

 

 
4.56%

 

 
4.42%

 

 
4.31%

 

 
4.43%

 

 
4.55%

 

 
4.33%

 

Efficiency ratio (2)

 

 
56.25%

 

 
61.34%

 

 
58.67%

 

 
56.96%

 

 
58.20%

 

 
58.64%

 

 
60.34%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquidity and Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity to total assets

 

 
15.18%

 

 
15.19%

 

 
14.87%

 

 
14.79%

 

 
14.87%

 

 
15.18%

 

 
14.87%

 

Tangible equity to tangible assets (3)

 

 
12.96%

 

 
12.89%

 

 
12.56%

 

 
12.40%

 

 
12.41%

 

 
12.96%

 

 
12.41%

 

Common equity tier 1 capital ratio

 

 
14.71%

 

 
14.53%

 

 
14.71%

 

 
14.29%

 

 
14.08%

 

 
14.71%

 

 
14.08%

 

Tier 1 risk-based capital ratio

 

 
14.71%

 

 
14.53%

 

 
14.76%

 

 
14.53%

 

 
12.87%

 

 
14.71%

 

 
12.87%

 

Total risk-based capital ratio

 

 
15.59%

 

 
15.41%

 

 
15.63%

 

 
15.44%

 

 
14.32%

 

 
15.59%

 

 
14.32%

 

Tier 1 leverage ratio

 

 
13.12%

 

 
13.02%

 

 
12.74%

 

 
12.84%

 

 
15.29%

 

 
13.12%

 

 
15.29%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding- Basic

 

 

24,921

 

 

24,910

 

 

24,886

 

 

24,859

 

 

24,858

 

 

24,916

 

 

24,845

 

Weighted average common shares outstanding- Diluted

 

 

25,042

 

 

25,054

 

 

25,046

 

 

25,060

 

 

24,997

 

 

25,047

 

 

24,977

 

Common shares outstanding at period end

 

 

24,923

 

 

24,918

 

 

24,907

 

 

24,859

 

 

24,859

 

 

24,923

 

 

24,859

 

Dividends per share

 

$

0.10

 

$

0.10

 

$

0.05

 

$

0.05

 

$

0.05

 

$

0.20

 

$

0.10

 

Book value per share

 

$

20.59

 

$

20.01

 

$

19.58

 

$

18.98

 

$

18.55

 

$

20.59

 

$

18.55

 

Tangible book value per share (3)

 

$

17.13

 

$

16.54

 

$

16.10

 

$

15.48

 

$

15.04

 

$

17.13

 

$

15.04

 

Employees - full-time equivalents

 

 

508

 

 

494

 

 

495

 

 

489

 

 

488

 

 

508

 

 

488

 

 

(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.

 

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CBTX, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data (at period end):

    

6/30/2019

    

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, excluding loans held for sale

 

$

2,642,289

 

$

2,544,709

 

$

2,446,823

 

$

2,463,197

 

$

2,404,132

Allowance for loan losses

 

 

(25,342)

 

 

(24,643)

 

 

(23,693)

 

 

(24,486)

 

 

(25,746)

Loans, net

 

 

2,616,947

 

 

2,520,066

 

 

2,423,130

 

 

2,438,711

 

 

2,378,386

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents

 

 

266,776

 

 

276,515

 

 

382,070

 

 

281,640

 

 

245,265

Securities

 

 

232,601

 

 

228,684

 

 

229,964

 

 

222,493

 

 

230,393

Premises and equipment, net

 

 

51,346

 

 

51,453

 

 

51,622

 

 

52,032

 

 

52,607

Goodwill

 

 

80,950

 

 

80,950

 

 

80,950

 

 

80,950

 

 

80,950

Other intangible assets, net

 

 

5,318

 

 

5,538

 

 

5,775

 

 

6,038

 

 

6,276

Loans held for sale

 

 

1,408

 

 

852

 

 

 -

 

 

384

 

 

560

Operating lease right-to-use asset

 

 

12,355

 

 

12,879

 

 

 -

 

 

 -

 

 

 -

Other assets

 

 

111,805

 

 

106,525

 

 

105,585

 

 

108,205

 

 

106,323

Total assets

 

$

3,379,506

 

$

3,283,462

 

$

3,279,096

 

$

3,190,453

 

$

3,100,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

1,201,287

 

$

1,229,172

 

$

1,183,058

 

$

1,144,985

 

$

1,114,155

Interest-bearing deposits

 

 

1,537,620

 

 

1,521,827

 

 

1,583,224

 

 

1,545,095

 

 

1,447,119

Total deposits

 

 

2,738,907

 

 

2,750,999

 

 

2,766,282

 

 

2,690,080

 

 

2,561,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase agreements

 

 

805

 

 

1,600

 

 

2,498

 

 

1,351

 

 

1,448

Federal Home Loan Bank advances

 

 

90,000

 

 

 -

 

 

 -

 

 

 -

 

 

50,000

Junior subordinated debt

 

 

 -

 

 

 -

 

 

1,571

 

 

6,726

 

 

6,726

Operating lease liabilities

 

 

14,806

 

 

15,134

 

 

 -

 

 

 -

 

 

 -

Other liabilities

 

 

21,830

 

 

17,076

 

 

21,120

 

 

20,445

 

 

20,117

Total liabilities

 

 

2,866,348

 

 

2,784,809

 

 

2,791,471

 

 

2,718,602

 

 

2,639,565

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

513,158

 

 

498,653

 

 

487,625

 

 

471,851

 

 

461,195

Total liabilities and shareholders' equity

 

$

3,379,506

 

$

3,283,462

 

$

3,279,096

 

$

3,190,453

 

$

3,100,760

 

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CBTX, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Income (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

    

6/30/2019

    

3/31/2019

    

12/31/2018

    

9/30/2018

    

6/30/2018

    

6/30/2019

    

6/30/2018

Interest income

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Interest and fees on loans

 

$

35,608

 

$

33,793

 

$

33,427

 

$

31,513

 

$

30,493

 

$

69,401

 

$

58,955

Securities

 

 

1,519

 

 

1,557

 

 

1,542

 

 

1,535

 

 

1,507

 

 

3,076

 

 

2,943

Federal Funds and other interest-earning assets

 

 

1,359

 

 

1,483

 

 

1,696

 

 

1,404

 

 

936

 

 

2,842

 

 

1,930

Equity investments

 

 

163

 

 

152

 

 

217

 

 

213

 

 

191

 

 

315

 

 

384

Total interest income

 

 

38,649

 

 

36,985

 

 

36,882

 

 

34,665

 

 

33,127

 

 

75,634

 

 

64,212

Interest expense

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Deposits

 

 

3,822

 

 

3,584

 

 

3,551

 

 

2,961

 

 

2,126

 

 

7,406

 

 

4,074

FHLB advances and repurchase agreements

 

 

524

 

 

65

 

 

 1

 

 

62

 

 

13

 

 

589

 

 

14

Note payable and junior subordinated debt

 

 

 4

 

 

 8

 

 

110

 

 

116

 

 

112

 

 

12

 

 

209

Total interest expense

 

 

4,350

 

 

3,657

 

 

3,662

 

 

3,139

 

 

2,251

 

 

8,007

 

 

4,297

Net interest income

 

 

34,299

 

 

33,328

 

 

33,220

 

 

31,526

 

 

30,876

 

 

67,627

 

 

59,915

Provision (recapture) for loan losses

 

 

807

 

 

1,147

 

 

(2,169)

 

 

(1,142)

 

 

690

 

 

1,954

 

 

1,555

Net interest income after provision (recapture) for loan losses

 

 

33,492

 

 

32,181

 

 

35,389

 

 

32,668

 

 

30,186

 

 

65,673

 

 

58,360

Noninterest income

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Deposit account service charges

 

 

1,657

 

 

1,629

 

 

1,709

 

 

1,597

 

 

1,497

 

 

3,286

 

 

2,975

Net gain (loss) on sale of assets

 

 

69

 

 

88

 

 

168

 

 

152

 

 

210

 

 

157

 

 

340

Card interchange fees

 

 

941

 

 

864

 

 

921

 

 

922

 

 

971

 

 

1,805

 

 

1,898

Earnings on bank-owned life insurance

 

 

3,721

 

 

430

 

 

456

 

 

443

 

 

465

 

 

4,151

 

 

916

Other

 

 

915

 

 

482

 

 

605

 

 

412

 

 

363

 

 

1,397

 

 

738

Total noninterest income

 

 

7,303

 

 

3,493

 

 

3,859

 

 

3,526

 

 

3,506

 

 

10,796

 

 

6,867

Noninterest expense

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

  

Salaries and employee benefits

 

 

14,185

 

 

13,822

 

 

13,834

 

 

12,499

 

 

12,496

 

 

28,007

 

 

25,191

Net occupancy expense

 

 

2,338

 

 

2,267

 

 

2,268

 

 

2,428

 

 

2,433

 

 

4,605

 

 

4,698

Regulatory fees

 

 

446

 

 

464

 

 

507

 

 

488

 

 

513

 

 

910

 

 

1,058

Data processing

 

 

661

 

 

714

 

 

664

 

 

664

 

 

666

 

 

1,375

 

 

1,349

Software

 

 

425

 

 

440

 

 

408

 

 

400

 

 

403

 

 

865

 

 

768

Printing, stationery and office

 

 

327

 

 

353

 

 

303

 

 

291

 

 

303

 

 

680

 

 

567

Amortization of intangibles

 

 

225

 

 

232

 

 

237

 

 

245

 

 

248

 

 

457

 

 

503

Professional and director fees

 

 

2,282

 

 

2,091

 

 

1,123

 

 

809

 

 

686

 

 

4,373

 

 

1,605

Correspondent bank and customer related transaction expenses

 

 

66

 

 

65

 

 

64

 

 

66

 

 

68

 

 

131

 

 

135

Loan processing costs

 

 

124

 

 

95

 

 

153

 

 

102

 

 

75

 

 

219

 

 

193

Advertising, marketing and business development

 

 

532

 

 

440

 

 

406

 

 

437

 

 

475

 

 

972

 

 

981

Repossessed real estate and other asset expense

 

 

 —

 

 

 —

 

 

 7

 

 

 3

 

 

 5

 

 

 

 

 

62

Security and protection expense

 

 

367

 

 

323

 

 

317

 

 

346

 

 

311

 

 

690

 

 

613

Telephone and communications

 

 

456

 

 

378

 

 

408

 

 

342

 

 

394

 

 

834

 

 

780

Other expenses

 

 

969

 

 

901

 

 

1,057

 

 

844

 

 

936

 

 

1,870

 

 

1,793

Total noninterest expense

 

 

23,403

 

 

22,585

 

 

21,756

 

 

19,964

 

 

20,012

 

 

45,988

 

 

40,296

Net income before income tax expense

 

 

17,392

 

 

13,089

 

 

17,492

 

 

16,230

 

 

13,680

 

 

30,481

 

 

24,931

Income tax expense

 

 

3,077

 

 

2,599

 

 

3,380

 

 

3,207

 

 

2,638

 

 

5,676

 

 

4,777

Net income

 

$

14,315

 

$

10,490

 

$

14,112

 

$

13,023

 

$

11,042

 

$

24,805

 

$

20,154

 

 

7

CBTX, INC. AND SUBSIDIARY

Net Interest Margin (Unaudited)

(In thousands, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

6/30/2019

 

3/31/2019

 

6/30/2018

 

    

 

 

    

Interest

 

 

 

 

 

    

Interest

 

 

 

 

 

    

Interest

    

 

 

 

Average

 

Earned/

 

Average

 

Average

 

Earned/

 

Average

 

Average

 

Earned/

 

Average

 

 

Outstanding

 

Interest

 

Yield/

 

Outstanding

 

Interest

 

Yield/

 

Outstanding

 

Interest

 

Yield/

 

 

Balance

 

Paid

 

Rate (1)

 

Balance

 

Paid

 

Rate (1)

 

Balance

 

Paid

 

Rate (1)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earnings assets:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Total loans (2)

 

$

2,591,928

 

$

35,608

 
5.51%

 

$

2,500,788

 

$

33,793

 
5.48%

 

$

2,375,253

 

$

30,493

 
5.15%

Securities

 

 

233,339

 

 

1,519

 
2.61%

 

 

231,650

 

 

1,557

 
2.73%

 

 

228,262

 

 

1,507

 
2.65%

Federal funds sold and other interest-earning assets

 

 

219,639

 

 

1,359

 
2.48%

 

 

239,281

 

 

1,483

 
2.51%

 

 

201,906

 

 

936

 
1.86%

Equity investments

 

 

15,218

 

 

163

 
4.32%

 

 

12,285

 

 

152

 
5.02%

 

 

14,823

 

 

191

 
5.17%

Total interest-earning assets

 

 

3,060,124

 

$

38,649

 
5.07%

 

 

2,984,004

 

$

36,985

 
5.03%

 

 

2,820,244

 

$

33,127

 
4.71%

Allowance for loan losses

 

 

(24,829)

 

 

  

 

  

 

 

(24,016)

 

 

  

 

  

 

 

(25,392)

 

 

  

 

  

Noninterest-earnings assets

 

 

299,234

 

 

  

 

  

 

 

302,915

 

 

  

 

  

 

 

288,416

 

 

  

 

  

Total assets

 

$

3,334,529

 

 

  

 

  

 

$

3,262,903

 

 

  

 

  

 

$

3,083,268

 

 

  

 

  

Liabilities and Shareholders’ Equity

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Interest-bearing liabilities:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Interest-bearing deposits

 

$

1,514,697

 

$

3,822

 
1.01%

 

$

1,544,039

 

$

3,584

 
0.94%

 

$

1,478,016

 

$

2,126

 
0.58%

FHLB advances and repurchase agreements

 

 

83,899

 

 

524

 
2.51%

 

 

11,578

 

 

65

 
2.28%

 

 

3,738

 

 

13

 
1.39%

Note payable and junior subordinated debt

 

 

 —

 

 

 4

 

 -

 

 

365

 

 

 8

 
8.89%

 

 

10,826

 

 

112

 
4.15%

Total interest-bearing liabilities

 

 

1,598,596

 

$

4,350

 
1.09%

 

 

1,555,982

 

$

3,657

 
0.95%

 

 

1,492,580

 

$

2,251

 
0.60%

Noninterest-bearing liabilities:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Noninterest-bearing deposits

 

 

1,194,645

 

 

  

 

  

 

 

1,177,086

 

 

  

 

  

 

 

1,111,736

 

 

  

 

  

Other liabilities

 

 

32,991

 

 

  

 

  

 

 

34,634

 

 

  

 

  

 

 

20,441

 

 

  

 

  

Total noninterest-bearing liabilities

 

 

1,227,636

 

 

  

 

  

 

 

1,211,720

 

 

  

 

  

 

 

1,132,177

 

 

  

 

  

Shareholders’ equity

 

 

508,297

 

 

  

 

  

 

 

495,201

 

 

  

 

  

 

 

458,511

 

 

  

 

  

Total liabilities and shareholders’ equity

 

$

3,334,529

 

 

  

 

  

 

$

3,262,903

 

 

  

 

  

 

$

3,083,268

 

 

  

 

  

Net interest income

 

 

  

 

$

34,299

 

  

 

 

  

 

$

33,328

 

  

 

 

  

 

$

30,876

 

  

Net interest spread (3)

 

 

  

 

 

  

 
3.98%

 

 

  

 

 

  

 
4.08%

 

 

  

 

 

  

 
4.11%

Net interest margin (4)

 

 

  

 

 

  

 
4.50%

 

 

  

 

 

  

 
4.53%

 

 

  

 

 

  

 
4.39%

Net interest margin—tax equivalent (5)

 

 

  

 

 

  

 
4.53%

 

 

  

 

 

  

 
4.56%

 

 

  

 

 

  

 
4.43%

 

 

(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 $258,000,  $255,000 and $267,000  for the quarter ended June 30, 2019,  March 31, 2019 and June 30, 2018, respectively, were computed using a federal income tax rate of 21%. 

 

 

8

CBTX, INC. AND SUBSIDIARY

Net Interest Margin (Unaudited)

(In thousands, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2019

 

2018

 

    

 

 

    

Interest

 

 

 

 

 

    

Interest

    

 

 

 

Average

 

Earned/

 

Average

 

Average

 

Earned/

 

Average

 

 

Outstanding

 

Interest

 

Yield/

 

Outstanding

 

Interest

 

Yield/

(Dollars in thousands)

 

Balance

 

Paid

 

Rate (1)

 

Balance

 

Paid

 

Rate (1)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earnings assets:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Total loans (2)

 

$

2,546,610

 

$

69,401

 
5.50%

 

$

2,347,512

 

$

58,955

 
5.06%

Securities

 

 

232,499

 

 

3,076

 
2.67%

 

 

226,008

 

 

2,943

 
2.63%

Federal funds sold and other interest-earning assets

 

 

229,405

 

 

2,842

 
2.50%

 

 

227,172

 

 

1,930

 
1.71%

Equity investments

 

 

13,537

 

 

315

 
4.69%

 

 

14,763

 

 

384

 
5.26%

Total interest-earning assets

 

 

3,022,051

 

$

75,634

 
5.05%

 

 

2,815,455

 

$

64,212

 
4.60%

Allowance for loan losses

 

 

(24,426)

 

 

  

 

  

 

 

(25,131)

 

 

  

 

  

Noninterest-earnings assets

 

 

301,065

 

 

  

 

  

 

 

287,764

 

 

  

 

  

Total assets

 

$

3,298,690

 

 

  

 

  

 

$

3,078,088

 

 

  

 

  

Liabilities and Shareholders’ Equity

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Interest-bearing liabilities:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Interest-bearing deposits

 

$

1,529,283

 

$

7,406

 
0.98%

 

$

1,484,777

 

$

4,074

 
0.55%

FHLB advances and repurchase agreements

 

 

47,939

 

 

589

 
2.48%

 

 

2,585

 

 

14

 
1.09%

Note payable and junior subordinated debt

 

 

 —

 

 

12

 

 —

 

 

10,826

 

 

209

 
3.89%

Total interest-bearing liabilities

 

 

1,577,222

 

$

8,007

 
1.02%

 

 

1,498,188

 

$

4,297

 
0.58%

Noninterest-bearing liabilities:

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

Noninterest-bearing deposits

 

 

1,185,919

 

 

  

 

  

 

 

1,104,451

 

 

  

 

  

Other liabilities

 

 

33,764

 

 

  

 

  

 

 

20,801

 

 

  

 

  

Total noninterest-bearing liabilities

 

 

1,219,683

 

 

  

 

  

 

 

1,125,252

 

 

  

 

  

Shareholders’ equity

 

 

501,785

 

 

  

 

  

 

 

454,648

 

 

  

 

  

Total liabilities and shareholders’ equity

 

$

3,298,690

 

 

  

 

  

 

$

3,078,088

 

 

  

 

  

Net interest income

 

 

  

 

$

67,627

 

  

 

 

  

 

$

59,915

 

  

Net interest spread (3)

 

 

  

 

 

  

 
4.03%

 

 

  

 

 

  

 
4.02%

Net interest margin (4)

 

 

  

 

 

  

 
4.51%

 

 

  

 

 

  

 
4.29%

Net interest margin—tax equivalent (5)

 

 

  

 

 

  

 
4.55%

 

 

  

 

 

  

 
4.33%

 

(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 $513,000 and $537,000 for the six months ended June 30, 2019 and June 30, 2018, respectively, were computed using a federal income tax rate of 21%.

 

 

9

CBTX, INC. AND SUBSIDIARY

Rate/Volume Analysis (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019 Compared to

 

 

 

 Three Months Ended March 31, 2019

 

 

    

Increase (Decrease) due to

 

 

 

 

(Dollars in thousands)

 

Volume

 

Rate

 

Days

 

Total

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans

 

$

1,245

 

$

194

 

$

376

 

$

1,815

 

Securities

 

 

11

 

 

(66)

 

 

17

 

 

(38)

 

Federal funds sold and other interest-earning assets

 

 

(123)

 

 

(17)

 

 

16

 

 

(124)

 

Equity investments

 

 

37

 

 

(28)

 

 

 2

 

 

11

 

Total increase in interest income

 

 

1,170

 

 

83

 

 

411

 

 

1,664

 

Interest-bearing liabilities:

 

 

  

 

 

  

 

 

  

 

 

 

 

Interest-bearing deposits

 

 

(69)

 

 

267

 

 

40

 

 

238

 

FHLB advances and repurchase agreements

 

 

487

 

 

(29)

 

 

 1

 

 

459

 

Note payable and junior subordinated debt

 

 

(4)

 

 

 —

 

 

 —

 

 

(4)

 

Total increase in interest expense

 

 

414

 

 

238

 

 

41

 

 

693

 

Increase (decrease) in net interest income

 

$

756

 

$

(155)

 

$

370

 

$

971

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2019, Compared to

 

 

Three Months Ended June 30, 2018

 

    

Increase (Decrease) due to

    

 

(Dollars in thousands)

 

Volume

 

Rate

 

Total 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

Total loans

 

$

2,782

 

$

2,333

 

$

5,115

Securities

 

 

34

 

 

(22)

 

 

12

Federal funds sold and other interest-earning assets

 

 

82

 

 

341

 

 

423

Equity investments

 

 

 5

 

 

(33)

 

 

(28)

Total increase in interest income

 

 

2,903

 

 

2,619

 

 

5,522

Interest-bearing liabilities:

 

 

  

 

 

  

 

 

  

Interest-bearing deposits

 

 

53

 

 

1,643

 

 

1,696

FHLB advances and repurchase agreements

 

 

441

 

 

70

 

 

511

Note payable and junior subordinated debt

 

 

(108)

 

 

 —

 

 

(108)

Total increase in interest expense

 

 

386

 

 

1,713

 

 

2,099

Increase in net interest income

 

$

2,517

 

$

906

 

$

3,423

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2019, Compared to

 

 

Six Months Ended June 30, 2018

 

    

Increase (Decrease) due to

    

 

(Dollars in thousands)

 

Volume

 

Rate

 

Total 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

Total loans

 

$

5,000

 

$

5,446

 

$

10,446

Securities

 

 

85

 

 

48

 

 

133

Federal funds sold and other interest-earning assets

 

 

19

 

 

893

 

 

912

Equity investments

 

 

(32)

 

 

(37)

 

 

(69)

Total increase in interest income

 

 

5,072

 

 

6,350

 

 

11,422

Interest-bearing liabilities:

 

 

  

 

 

  

 

 

  

Interest-bearing deposits

 

 

122

 

 

3,210

 

 

3,332

FHLB advances and repurchase agreements

 

 

494

 

 

81

 

 

575

Note payable and junior subordinated debt

 

 

(197)

 

 

 —

 

 

(197)

Total increase in interest expense

 

 

419

 

 

3,291

 

 

3,710

Increase in net interest income

 

$

4,653

 

$

3,059

 

$

7,712

 

 

10

CBTX, INC. AND SUBSIDIARY

Yield Trend (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

    

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

Yield Trend - Annualized:

 

 

 

 

 

 

 

 

 

 

Interest-earnings assets:

 

 

 

 

 

 

 

 

 

 

Total loans

 
5.51%

 
5.48%

 
5.37%

 
5.20%

 
5.15%

Securities

 
2.61%

 
2.73%

 
2.70%

 
2.64%

 
2.65%

Federal funds sold and other interest-earning assets

 
2.48%

 
2.51%

 
2.30%

 
2.04%

 
1.86%

Equity investments

 
4.32%

 
5.02%

 
5.79%

 
5.01%

 
5.17%

Total interest-earning assets

 
5.07%

 
5.03%

 
4.87%

 
4.70%

 
4.71%

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 
1.01%

 
0.94%

 
0.89%

 
0.77%

 
0.58%

FHLB advances and repurchase agreements

 
2.51%

 
2.28%

 
0.21%

 
1.94%

 
1.39%

Note payable and junior subordinated debt

 

 -

 
8.89%

 
4.45%

 
4.25%

 
4.15%

Total interest-bearing liabilities

 
1.09%

 
0.95%

 
0.91%

 
0.80%

 
0.60%

 

 

 

 

 

 

 

 

 

 

 

Net interest spread (1)

 
3.98%

 
4.08%

 
3.96%

 
3.90%

 
4.11%

Net interest margin (2)

 
4.50%

 
4.53%

 
4.39%

 
4.28%

 
4.39%

Net interest margin—tax equivalent (3)

 
4.53%

 
4.56%

 
4.42%

 
4.31%

 
4.43%

 

(1)Net interest spread is the average yield on interest‑earning assets minus the average rate on interest‑bearing liabilities.

(2)Net interest margin is equal to net interest income divided by average interest‑earning assets.

(3)Tax equivalent adjustments were computed using a federal income tax rate of 21%. 

 

 

11

CBTX, INC. AND SUBSIDIARY

Average Outstanding Balances (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

    

6/30/2019

    

3/31/2019

    

12/31/2018

    

9/30/2018

    

6/30/2018

Average Outstanding Balances:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earnings assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans (1)

 

$

2,591,928

 

$

2,500,788

 

$

2,468,415

 

$

2,404,491

 

$

2,375,253

Securities

 

 

233,339

 

 

231,650

 

 

226,882

 

 

230,592

 

 

228,262

Federal funds sold and other interest-earning assets

 

 

219,639

 

 

239,281

 

 

293,299

 

 

272,739

 

 

201,906

Equity investments

 

 

15,218

 

 

12,285

 

 

14,789

 

 

16,799

 

 

14,823

Total interest-earning assets

 

 

3,060,124

 

 

2,984,004

 

 

3,003,385

 

 

2,924,621

 

 

2,820,244

Allowance for loan losses

 

 

(24,829)

 

 

(24,016)

 

 

(24,305)

 

 

(25,689)

 

 

(25,392)

Noninterest-earnings assets

 

 

299,234

 

 

302,915

 

 

295,236

 

 

292,598

 

 

288,416

Total assets

 

$

3,334,529

 

$

3,262,903

 

$

3,274,316

 

$

3,191,530

 

$

3,083,268

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$

1,514,697

 

$

1,544,039

 

$

1,578,146

 

$

1,530,077

 

$

1,478,016

FHLB advances and repurchase agreements

 

 

83,899

 

 

11,578

 

 

1,925

 

 

12,657

 

 

3,738

Note payable and junior subordinated debt

 

 

 —

 

 

365

 

 

9,817

 

 

10,826

 

 

10,826

Total interest-bearing liabilities

 

 

1,598,596

 

 

1,555,982

 

 

1,589,888

 

 

1,553,560

 

 

1,492,580

Noninterest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

1,194,645

 

 

1,177,086

 

 

1,181,035

 

 

1,145,516

 

 

1,111,736

Other liabilities

 

 

32,991

 

 

34,634

 

 

23,083

 

 

23,600

 

 

20,441

Total noninterest-bearing liabilities

 

 

1,227,636

 

 

1,211,720

 

 

1,204,118

 

 

1,169,116

 

 

1,132,177

Shareholders’ equity

 

 

508,297

 

 

495,201

 

 

480,310

 

 

468,854

 

 

458,511

Total liabilities and shareholders’ equity

 

$

3,334,529

 

$

3,262,903

 

$

3,274,316

 

$

3,191,530

 

$

3,083,268

 

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

 

 

12

CBTX, INC. AND SUBSIDIARY

Period End Balances (Unaudited)

(In thousands, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/30/2019

 

3/31/2019

 

12/31/2018

 

9/30/2018

 

6/30/2018

 

    

Amount

    

%  

 

Amount

    

%  

 

Amount

    

%  

 

Amount

    

%  

 

Amount

    

%  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan Portfolio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

540,084

 
20.4%

 

$

559,882

 
21.9%

 

$

519,779

 
21.2%

 

$

569,334

 
23.1%

 

$

565,850

 
23.5%

Real estate:

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

Commercial real estate

 

 

854,513

 
32.2%

 

 

811,742

 
31.8%

 

 

795,733

 
32.4%

 

 

776,439

 
31.4%

 

 

780,224

 
32.4%

Construction and development

 

 

559,672

 
21.1%

 

 

572,861

 
22.5%

 

 

515,533

 
21.0%

 

 

487,289

 
19.7%

 

 

449,390

 
18.6%

1-4 family residential

 

 

281,525

 
10.6%

 

 

281,502

 
11.0%

 

 

282,011

 
11.5%

 

 

288,737

 
11.7%

 

 

279,227

 
11.6%

Multi-family residential

 

 

298,887

 
11.3%

 

 

213,582

 
8.4%

 

 

221,194

 
9.0%

 

 

236,907

 
9.6%

 

 

229,609

 
9.5%

Consumer

 

 

39,803

 
1.5%

 

 

39,072

 
1.5%

 

 

39,421

 
1.6%

 

 

39,807

 
1.6%

 

 

41,833

 
1.7%

Agricultural

 

 

9,923

 
0.4%

 

 

8,915

 
0.4%

 

 

11,076

 
0.5%

 

 

11,609

 
0.5%

 

 

10,951

 
0.5%

Other

 

 

65,471

 
2.5%

 

 

64,215

 
2.5%

 

 

68,382

 
2.8%

 

 

59,484

 
2.4%

 

 

53,376

 
2.2%

Gross loans

 

 

2,649,878

 
100.0%

 

 

2,551,771

 
100.0%

 

 

2,453,129

 
100.0%

 

 

2,469,606

 
100.0%

 

 

2,410,460

 
100.0%

Less deferred fees and unearned discount

 

 

(6,181)

 

  

 

 

(6,210)

 

  

 

 

(6,306)

 

  

 

 

(6,025)

 

  

 

 

(5,768)

 

  

Less allowance for loan losses

 

 

(25,342)

 

 

 

 

(24,643)

 

 

 

 

(23,693)

 

 

 

 

(24,486)

 

 

 

 

(25,746)

 

 

Less loans held for sale

 

 

(1,408)

 

  

 

 

(852)

 

  

 

 

 —

 

  

 

 

(384)

 

  

 

 

(560)

 

  

Loans, net

 

$

2,616,947

 

  

 

$

2,520,066

 

  

 

$

2,423,130

 

  

 

$

2,438,711

 

  

 

$

2,378,386

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand accounts

 

$

351,326

 
12.8%

 

$

352,623

 
12.8%

 

$

387,457

 
14.0%

 

$

367,120

 
13.6%

 

$

342,890

 
13.4%

Money market accounts

 

 

717,883

 
26.2%

 

 

695,968

 
25.3%

 

 

737,770

 
26.7%

 

 

722,382

 
26.9%

 

 

650,747

 
25.4%

Savings accounts

 

 

91,828

 
3.4%

 

 

96,251

 
3.5%

 

 

96,962

 
3.5%

 

 

94,344

 
3.5%

 

 

97,576

 
3.8%

Certificates and other time deposits, $100,000 or greater

 

 

189,741

 
6.9%

 

 

181,507

 
6.6%

 

 

189,007

 
6.8%

 

 

182,552

 
6.8%

 

 

164,464

 
6.4%

Certificates and other time deposits, less than $100,000

 

 

186,842

 
6.8%

 

 

195,478

 
7.1%

 

 

172,028

 
6.2%

 

 

178,697

 
6.6%

 

 

191,442

 
7.5%

Total interest-bearing deposits

 

 

1,537,620

 
56.1%

 

 

1,521,827

 
55.3%

 

 

1,583,224

 
57.2%

 

 

1,545,095

 
57.4%

 

 

1,447,119

 
56.5%

Noninterest-bearing deposits

 

 

1,201,287

 
43.9%

 

 

1,229,172

 
44.7%

 

 

1,183,058

 
42.8%

 

 

1,144,985

 
42.6%

 

 

1,114,155

 
43.5%

Total deposits

 

$

2,738,907

 
100.0%

 

$

2,750,999

 
100.0%

 

$

2,766,282

 
100.0%

 

$

2,690,080

 
100.0%

 

$

2,561,274

 
100.0%

 

 

13

CBTX, INC. AND SUBSIDIARY

Credit Quality (Unaudited)

(In thousands, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

6/30/2019

 

 

3/31/2019

 

 

12/31/2018

 

 

9/30/2018

 

 

6/30/2018

 

Nonperforming assets (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

1,795

 

 

$

1,390

 

 

$

1,317

 

 

$

2,161

 

 

$

1,734

 

Real estate:

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

Commercial real estate

 

 

850

 

 

 

862

 

 

 

1,517

 

 

 

2,751

 

 

 

2,092

 

Construction and development

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

13

 

 

 

225

 

1-4 family residential

 

 

624

 

 

 

635

 

 

 

656

 

 

 

677

 

 

 

738

 

Multi-family residential

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

Consumer

 

 

 —

 

 

 

47

 

 

 

 —

 

 

 

 —

 

 

 

 4

 

Agricultural

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

Nonaccrual loans

 

 

3,269

 

 

 

2,934

 

 

 

3,490

 

 

 

5,602

 

 

 

4,793

 

Accruing loans 90 or more days past due

 

 

 9

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

 

 

 —

 

Total nonperforming loans

 

 

3,278

 

 

 

2,934

 

 

 

3,490

 

 

 

5,602

 

 

 

4,793

 

Foreclosed assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate

 

 

36

 

 

 

 —

 

 

 

12

 

 

 

175

 

 

 

 —

 

Other

 

 

 —

 

 

 

41

 

 

 

 —

 

 

 

 —

 

 

 

137

 

Total foreclosed assets

 

 

36

 

 

 

41

 

 

 

12

 

 

 

175

 

 

 

137

 

Total nonperforming assets

 

$

3,314

 

 

$

2,975

 

 

$

3,502

 

 

$

5,777

 

 

$

4,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan Losses (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

7,792

 

 

$

8,416

 

 

$

7,719

 

 

$

8,763

 

 

$

7,648

 

Real estate:

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

Commercial real estate

 

 

7,371

 

 

 

6,784

 

 

 

6,730

 

 

 

6,913

 

 

 

10,930

 

Construction and development

 

 

4,579

 

 

 

4,700

 

 

 

4,298

 

 

 

3,606

 

 

 

3,335

 

1-4 family residential

 

 

2,236

 

 

 

2,249

 

 

 

2,281

 

 

 

2,454

 

 

 

1,404

 

Multi-family residential

 

 

2,178

 

 

 

1,457

 

 

 

1,511

 

 

 

1,630

 

 

 

1,479

 

Consumer

 

 

458

 

 

 

357

 

 

 

387

 

 

 

394

 

 

 

479

 

Agricultural

 

 

73

 

 

 

50

 

 

 

62

 

 

 

71

 

 

 

66

 

Other

 

 

655

 

 

 

630

 

 

 

705

 

 

 

655

 

 

 

405

 

Total allowance for loan losses

 

$

25,342

 

 

$

24,643

 

 

$

23,693

 

 

$

24,486

 

 

$

25,746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Ratios (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 
0.10%

 

 

 
0.09%

 

 

 
0.11%

 

 

 
0.18%

 

 

 
0.16%

 

Nonperforming loans to total loans

 

 
0.12%

 

 

 
0.12%

 

 

 
0.14%

 

 

 
0.23%

 

 

 
0.20%

 

Allowance for loan losses to nonperforming loans

 

 
773.09%

 

 

 
839.91%

 

 

 
678.88%

 

 

 
437.09%

 

 

 
537.16%

 

Allowance for loan losses to total loans

 

 
0.96%

 

 

 
0.97%

 

 

 
0.97%

 

 

 
0.99%

 

 

 
1.07%

 

 

14

CBTX, INC. AND SUBSIDIARY

Allowance for Loan Losses (Unaudited)

(In thousands, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

    

6/30/2019

    

3/31/2019

    

12/31/2018

    

9/30/2018

    

6/30/2018

    

Analysis of Allowance for Loan Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses at beginning of period

 

$

24,643

 

$

23,693

 

$

24,486

 

$

25,746

 

$

25,349

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision (recapture) for loan losses

 

 

807

 

 

1,147

 

 

(2,169)

 

 

(1,142)

 

 

690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (charge-offs) recoveries

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

22

 

 

(206)

 

 

1,521

 

 

(114)

 

 

(301)

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

 2

 

 

 2

 

 

(156)

 

 

(3)

 

 

 5

 

Construction and development

 

 

 —

 

 

 —

 

 

(1)

 

 

 —

 

 

 —

 

1-4 family residential

 

 

(11)

 

 

 1

 

 

 —

 

 

 4

 

 

 —

 

Consumer

 

 

(78)

 

 

 6

 

 

 1

 

 

(4)

 

 

 3

 

Agricultural

 

 

 —

 

 

 —

 

 

10

 

 

 —

 

 

 —

 

Other

 

 

(43)

 

 

 —

 

 

 1

 

 

(1)

 

 

 —

 

Total net (charge-offs) recoveries

 

 

(108)

 

 

(197)

 

 

1,376

 

 

(118)

 

 

(293)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses at end of period

 

$

25,342

 

$

24,643

 

$

23,693

 

$

24,486

 

$

25,746

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net charge-offs (recoveries) to average loans(1)

 

 

0.02%

 

 

0.03%

 

 

(0.22%)

 

 

0.02%

 

 

0.05%

 

 

(1)Annualized.

 

15

CBTX, INC. AND SUBSIDIARY

Non‑GAAP to GAAP Reconciliation (Unaudited)

(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 and other statistical measures or ratios or statistical measures 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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

6/30/2019

 

 

3/31/2019

 

 

12/31/2018

 

 

9/30/2018

 

 

6/30/2018

 

Tangible Equity

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

 

 

  

 

Total shareholders’ equity

 

$

513,158

 

 

$

498,653

 

 

$

487,625

 

 

$

471,851

 

 

$

461,195

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

80,950

 

 

 

80,950

 

 

 

80,950

 

 

 

80,950

 

 

 

80,950

 

Other intangibles

 

 

5,318

 

 

 

5,538

 

 

 

5,775

 

 

 

6,038

 

 

 

6,276

 

Tangible equity

 

$

426,890

 

 

$

412,165

 

 

$

400,900

 

 

$

384,863

 

 

$

373,969

 

Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

3,379,506

 

 

$

3,283,462

 

 

$

3,279,096

 

 

$

3,190,453

 

 

$

3,100,760

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

80,950

 

 

 

80,950

 

 

 

80,950

 

 

 

80,950

 

 

 

80,950

 

Other intangibles

 

 

5,318

 

 

 

5,538

 

 

 

5,775

 

 

 

6,038

 

 

 

6,276

 

Tangible assets

 

$

3,293,238

 

 

$

3,196,974

 

 

$

3,192,371

 

 

$

3,103,465

 

 

$

3,013,534

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

24,923

 

 

 

24,918

 

 

 

24,907

 

 

 

24,859

 

 

 

24,859

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

 

$

20.59

 

 

$

20.01

 

 

$

19.58

 

 

$

18.98

 

 

$

18.55

 

Tangible book value per share

 

$

17.13

 

 

$

16.54

 

 

$

16.10

 

 

$

15.48

 

 

$

15.04

 

Total shareholders’ equity to total assets

 

 

15.18%

 

 

 

15.19%

 

 

 

14.87%

 

 

 

14.80%

 

 

 

14.87%

 

Tangible equity to tangible assets

 

 

12.96%

 

 

 

12.89%

 

 

 

12.56%

 

 

 

12.40%

 

 

 

12.41%

 

 

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Investor Relations:

 

James L. Sturgeon

281.325.5013

investors@CBoTX.com

 

Media Contact:

 

Ashley Warren

713.210.7622

awarren@CBoTX.com 

 

 

 

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