Business Wire | Feb 1, 2021 09:03AM EST

CBB Bancorp, Inc. Reports Fourth Quarter and Full Year 2020 Financial Results

Feb. 01, 2021

LOS ANGELES--(BUSINESS WIRE)--Feb. 01, 2021--CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank (the "Bank"), announced today net income for fourth quarter 2020 of $3.7 million, or $0.36 per diluted share, an increase of 28.6% compared to $2.9 million, or $0.28 per diluted share, in the prior quarter and in the same period last year.

Additionally, CBB reported net income for the year ended December 31, 2020 of $9.9 million or $0.96 per diluted share, a decrease of 25.6% from the $13.3 million, or $1.29 per diluted share, of net income for 2019.

Overall Results

Net income for fourth quarter 2020 was positively impacted by the reversal of the SBA valuation allowance of $894 thousand. The return on average assets for fourth quarter 2020 was 1.07% compared to 0.85% for third quarter 2020 and 0.97% for fourth quarter 2019. The return on average equity for fourth quarter 2020 was 9.32% compared to 7.43% for third quarter 2020 and 7.66% for fourth quarter 2019. The net interest margin for fourth quarter 2020 was 3.48% compared to 3.20% for third quarter 2020 and 3.77% for fourth quarter 2019. The efficiency ratio for fourth quarter 2020 was 55.12% compared to 58.77% for third quarter 2020 and 64.05% for fourth quarter 2019.

Net Interest Income and Margin:

Net Interest Income

Net interest income for fourth quarter 2020 was $11.8 million, an increase of $1.1 million, or 10.6%, from third quarter 2020, and an increase of $1.0 million, or 9.7%, from fourth quarter 2019. The increase in net interest income was primarily driven by our ability to continue to aggressively lower deposit rates and wholesale borrowing costs while strategically shifting our deposit mix to lower-cost core deposits. For the year ended December 31, 2020, net interest income was $42.8 million, a decrease of $1.6 million, or 3.5% over the corresponding period in 2019.

Net Interest Margin

Our net interest margin for fourth quarter 2020 was 3.48% compared to 3.20% for third quarter 2020 and 3.77% for fourth quarter 2019. The increase in net interest margin was due to the lower repricing of our time deposits, which will continue as these deposits reach their maturities. For the year ended December 31, 2020, net interest margin was 3.41% compared to 3.94% for the corresponding period in 2019. Our cost of funds improved for fourth quarter 2020 to 0.60% from 0.85% for third quarter 2020 and 1.79% for fourth quarter 2019. For the year ended December 31, 2020, the cost of funds was 1.04% compared to 1.85% for the corresponding period in 2019.

Joanne Kim, President and CEO commented, "During this challenging year, we have focused on increasing core deposits and reducing our cost of funds which resulted in an improvement in our net interest margin. We will continue to focus on improving our net interest margin during 2021."

Provision for Loan Losses:

The provision for loan losses for fourth quarter 2020 was $1.6 million, compared to $1.6 million for third quarter 2020 and $700 thousand for fourth quarter 2019. For the year ended December 31, 2020, provision for loan losses was $5.5 million compared to $1.3 million for the corresponding period in 2019. Approximately $1.6 million of the fourth quarter provision was driven by an increase in qualitative factors due to the prolonged COVID-19 pandemic. Due to COVID-19, we are monitoring more data sources for early signs of distress within the portfolio such as deposit balances, overdrafts, line of credit usage and guarantors' credit history. We have segmented the loan portfolio several ways and examined risk exposure based on quantitative and qualitative information. We are actively communicating with borrowers and key depositors to understand and assess the health of their business, as well as the pandemic's effects on their customers and suppliers. In addition, we are engaging with borrowers more frequently to understand individual challenges and are obtaining data more frequently from borrowers, such as updated financial statements. See Table 10 for additional details and trends. For additional information, go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 4Q 2020 Overview and COVID-19 update presentation.

Noninterest Income:

Noninterest income for fourth quarter 2020 was $3.4 million compared to $3.0 million for third quarter 2020 and $2.3 million for fourth quarter 2019. For the year ended December 31, 2020, noninterest income was $9.6 million compared to $9.8 million for the corresponding period in 2019. The increase in noninterest income in fourth quarter 2020 was due to the reversal of the SBA valuation allowance of $894 thousand. In assessing our servicing assets, we reviewed the value of SBA servicing assets and various model inputs, including the discount rate, prepayment speeds and other market conditions, such as the decreases in the prime rate and the premiums earned on SBA loan sales.

Noninterest Expense:

Noninterest expense for fourth quarter 2020 was $8.4 million compared to $8.0 million for third quarter 2020 and $8.4 million for fourth quarter 2019. For the year ended December 31, 2020, noninterest expense was $32.9 million compared to $34.1 million for the corresponding period in 2019. Salaries and employee benefits increased by $529 thousand compared to the prior quarter. The increase was partially due to higher commissions and bonuses as a result of higher loan originations.

Income Taxes:

The Company's effective tax rate for fourth quarter 2020 was 29.0% compared to 27.9% for third quarter 2020 and 28.5% for fourth quarter 2019. For the year ended December 31, 2020, the effective tax rate was 29.8% compared to 29.0% for the corresponding period in 2019.

Balance Sheet:

Investment Securities:

Investment securities were $85.9 million at December 31, 2020, a decrease of $2.9 million from September 30, 2020 and $8.7 million from December 31, 2019. The decreases were due to principal paydowns. There were no portfolio additions in the fourth quarter.

Loans Receivable:

Loans receivable (including loans held for sale) at December 31, 2020 was $1.10 billion, an increase of $37.1 million, or 3.5%, from September 30, 2020, and an increase of $167.0 million, or 17.9% from December 31, 2019.

We provided loan payment deferments to our commercial borrowers under the CARES Act. The first round of three months of loan deferments as of June 30, 2020 totaled $280.0 million or 25.0% of the total loan portfolio. The majority of these loans have resumed payments during the third and fourth quarter. There were 17 loans that were still on loan deferments as of December 31, 2020 which totaled $56.6 million or 5.1% of the total loan portfolio. We anticipate there may be additional loan deferments. SBA loans originated during the period beginning September 28, 2020 to January 31, 2021 will not be able to receive six months of payments from SBA. However, loans originated beginning February 1, 2021 to September 30, 2021 will qualify for six months of payments and the monthly amount cannot exceed $9 thousand. Our weighted average loan-to-value ratio of Commercial Real Estate loans was 72.5% at December 31, 2020. Excluding SBA loans, our weighted average loan-to-value of CRE loans was 56.1%. For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 4Q 2020 Overview and COVID-19 update presentation.

Paycheck Protection Program (PPP):

PPP loans totaled $86.1 million at December 31, 2020. Net unearned fees as of December 31, 2020 was $1.8 million and is being accreted to income based on the two-year contractual maturity. The SBA approved $6.2 million in PPP loan forgiveness applications processed in the fourth quarter 2020. SBA will continue to support the PPP and we believe it is likely many customers will apply for additional PPP funds as the Bank is actively taking applications at this time.

Allowance for Loan Losses and Asset Quality:

The allowance for loan losses at December 31, 2020 was $14.4 million, or 1.38% of portfolio loans, compared to $13.6 million, or 1.35% of portfolio loans, at September 30, 2020. Excluding PPP loans of $86.1 million, which are government guaranteed, the allowance for loan losses at December 31, 2020 was 1.51% compared to 1.48% at September 30, 2020. Non-performing loans as of December 31, 2020 were $2.4 million, down from $4.1 million at September 30, 2020. Loans with payment deferments are considered performing loans in accordance with the regulatory guidance. Our coverage ratio of allowance for loan losses to nonperforming assets continues to exceed 300%. For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 4Q 2020 Overview and COVID-19 update presentation.

SBA Loans Held for Sale:

SBA loans held for sale at December 31, 2020 were $59.1 million, compared to $53.8 million at September 30, 2020 and $28.8 million at December 31, 2019. We continue to assess SBA loan sale premiums and plan to sell loans when it is advantageous to do so. During the quarter, the demand for SBA loans by the secondary market improved, resulting in a higher volume of SBA loan sales during the second half of the year as well as loan sale premiums. See comments under "Noninterest Income", and the Table 7 for additional SBA loan origination and sale data.

Deposits:

Deposits were $1.10 billion at December 31, 2020, down $2.3 million from September 30, 2020 and up $125.8 million from December 31, 2019. Noninterest-bearing demand deposits (DDAs) decreased $28.1 million or 7.7% from September 30, 2020 and increased $125.7 million or 60.0% from December 31, 2019. DDAs were 30.5% of total deposits at December 31, 2020 compared to 33.0% at September 30, 2020 and 21.5% at December 31, 2019. NOW and MMDA increased $30.6 million or 13.3% from September 30, 2020 and increased $142.9 million or 121.7% from December 31, 2019. Time deposits increased $5.2 million or 1.2% from September 30, 2020 and decreased $127.4 million or 22.0% from December 31, 2019. Our time deposits at September 30, 2020 were $451.9 million or 41.1% of total deposits, compared to $446.7 million or 40.6% of total deposits at September 30, 2020 and down from $579.3 million or 59.5% of total deposits at December 31, 2019. As noted before, we have been and will continue to focus on increasing demand deposits and reducing our cost of funds.

Borrowings:

Borrowings at December 31, 2020 consisted of $95.0 million of Federal Home Loan Bank of San Francisco (FHLB-SF) advances and $10.0 million of Pacific Coast Bankers' Bank (PCBB) borrowings, compared to $70 million of FHLB- SF advances at September 30, 2020.

Additionally, at December 31, 2020, we repaid approximately $58.7 million of PPP loans from the FRB PPP Liquidity Facility. The borrowing rate for the facility was 0.35%.

Capital:

Stockholders' equity was $160.0 million at December 31, 2020, representing an increase of $3.9 million, or 2.5%, over stockholders' equity of $156.1 million at September 30, 2020. Book value per share at December 31, 2020 was $15.61 compared with $15.23 at September 30, 2020, an increase of $0.38 per share or 2.5%.

All of our regulatory capital ratios increased at December 31, 2020 from their levels at September 30, 2020 and continue to exceed the minimum levels required to be considered "Well Capitalized" as defined for bank regulatory purposes and in compliance with the fully phased-in Basel III requirements, which went into effect on January 1, 2019, as shown on Table 11 in this press release. Importantly, our Common Equity Tier 1 risked-based capital at December 31, 2020 was 15.01% at the Company level and 14.97% at the Bank level.

About CBB Bancorp, Inc.:

CBB Bancorp, Inc. is the holding company of Commonwealth Business Bank, a full-service commercial bank which specializes in small-to medium-sized businesses and does business as "CBB Bank." The Bank has eight full-service branches in Los Angeles and Orange Counties in California, and Dallas County in Texas; two SBA regional offices in Los Angeles and Dallas Counties; and five loan production offices in Texas, Georgia, Colorado and Washington.

For additional information, please go to www.cbb-bank.comunder tab "About Us" and select "Investors Relations" to see 4Q 2020 Overview and COVID-19 update presentation.

FORWARD-LOOKING STATEMENTS:

This news release contains a number of forward-looking statements. These statements may be identified by the use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "likely," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would" and similar terms and phrases, including references to assumptions. Forward-looking statements are based upon various assumptions and analyses made by the Company in light of management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. These statements are not guaranties of future performance and are subject to risks, uncertainties and other factors (many of which are beyond the Company's control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. You should not place undue reliance on such statements. Factors that could affect our results include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company's control; increases in competitive pressure among financial institutions or from non-financial institutions may occur; changes in the interest rate environment may reduce interest margins; changes in deposit flows, loan demand or real estate values may adversely affect the business of the Company and the Bank; significant increases in loan losses may occur; the possibility that changes in accounting principles, policies or guidelines may cause the Company's financial condition to be perceived differently; changes in corporate and/or individual income tax laws may adversely affect the Company's financial condition or results of operations; general economic conditions, either nationally or locally in some or all areas in which the Company conducts business, the effects of the COVID-19 pandemic, and of other widespread outbreaks of disease or pandemics, together with related impacts on general economic conditions, including adverse impacts on our customers' ability to make timely payments on their loans from us, reduced fee income due to reduced loan origination activity, reductions in or absence of gains on loan sales due to uncertainty in the loan sale market, and increased operating expense due to required changes in how we conduct our business may adversely affect us; conditions in the securities markets or the banking industry may be less favorable than the Company currently anticipates; legislation or regulatory changes may adversely affect the Company's business; technological changes may be more difficult or expensive to implement or accommodate than the Company anticipates; there may be failures or breaches of information technology security systems; success or consummation of new business initiatives may be more difficult or expensive than the Company anticipates; or litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than the Company anticipates. The Company undertakes no obligation to revise any forward-looking statement contained herein to reflect any future events or circumstances, except to the extent required by law.

Schedules and Financial Data: All tables and data to follow

STATEMENT OF INCOME AND PERFORMANCE HIGHLIGHT (Unaudited) - Table 1 (Dollars in thousands, except per share amounts) Three Months Ended Twelve Months Ended December, 31 September 30, $ % December, 31 $ % December, 31 December, 31 $ % 2020 2020 Change Change 2019 Change Change 2020 2019 Change Change

Interest income $ 13,613 $ 13,212 $ 401 3.0 % $ 15,254 $ (1,641 ) (10.8 %) $ 54,504 $ 63,022 $ (8,518 ) (13.5 %)

Interest expense 1,830 2,558 (728 ) (28.5 %) 4,517 (2,687 ) (59.5 %) 11,711 18,656 (6,945 ) (37.2 %)

Net interest income 11,783 10,654 1,129 10.6 % 10,737 1,046 9.7 % 42,793 44,366 (1,573 ) (3.5 %)

Provision for loan 1,600 1,600 - - 700 900 128.6 % 5,500 1,300 4,200 323.1 %lossesNet interest income 10,183 9,054 1,129 12.5 % 10,037 146 1.5 % 37,293 43,066 (5,773 ) (13.4 %)after provision forloan losses Gain on sale of loans 1,484 1,662 (178 ) (10.7 %) 1,481 3 0.2 % 4,594 6,153 (1,559 ) (25.3 %)

Gain (loss) on sale of - - - - - - - 3 (14 ) 17 121.4 %OREOSBA servicing fee 701 948 (247 ) (26.1 %) 413 288 69.7 % 2,759 1,751 1,008 57.6 %income, netRecovery on impaired 894 - 894 100.0 % - 894 100.0 % 894 - 894 100.0 %servicing assetsService charges and 364 385 (21 ) (5.5 %) 416 (52 ) (12.5 %) 1,396 1,955 (559 ) (28.6 %)other incomeNoninterest income 3,443 2,995 448 15.0 % 2,310 1,133 49.0 % 9,646 9,845 (199 ) (2.0 %)

Salaries and employee 5,477 4,948 529 10.7 % 5,355 122 2.3 % 20,744 21,052 (308 ) (1.5 %)benefitsOccupancy and equipment 936 938 (2 ) (0.2 %) 978 (42 ) (4.3 %) 3,763 3,510 253 7.2 %

Marketing expense 133 265 (132 ) (49.8 %) 119 14 11.8 % 1,249 1,155 94 8.1 %

Professional expense 478 503 (25 ) (5.0 %) 417 61 14.6 % 1,916 2,320 (404 ) (17.4 %)

Other expenses 1,369 1,367 2 0.1 % 1,487 (118 ) (7.9 %) 5,184 6,081 (897 ) (14.8 %)

Noninterest expense 8,393 8,021 372 4.6 % 8,356 37 0.4 % 32,856 34,118 (1,262 ) (3.7 %)

Income before income 5,233 4,028 1,205 29.9 % 3,991 1,242 31.1 % 14,083 18,793 (4,710 ) (25.1 %)tax expense Income tax expense 1,519 1,125 394 35.0 % 1,137 382 33.6 % 4,202 5,449 (1,247 ) (22.9 %)

Net income $ 3,714 $ 2,903 $ 811 27.9 % $ 2,854 $ 860 30.1 % $ 9,881 $ 13,344 $ (3,463 ) (26.0 %)

Effective tax rate 29.0 % 27.9 % 1.1 % 3.9 % 28.5 % 0.5 % 1.9 % 29.8 % 29.0 % 0.8 % 2.9 %

Outstanding number of 10,247,292 10,247,292 - - 10,197,380 49,912 0.5 % 10,247,292 10,197,380 49,912 0.5 %shares Weighted average shares 10,247,292 10,244,037 3,255 0.0 % 10,188,700 58,592 0.6 % 10,238,237 10,139,648 98,589 1.0 %for basic EPSWeighted average shares 10,285,410 10,273,148 12,262 0.1 % 10,336,793 (51,383 ) (0.5 %) 10,291,209 10,335,831 (44,622 ) (0.4 %)for diluted EPS Basic EPS $ 0.36 $ 0.28 $ 0.08 28.6 % $ 0.28 $ 0.08 28.6 % $ 0.97 $ 1.32 $ (0.35 ) (26.5 %)

Diluted EPS $ 0.36 $ 0.28 $ 0.08 28.6 % $ 0.28 $ 0.08 28.6 % $ 0.96 $ 1.29 $ (0.33 ) (25.6 %)

Return on average 1.07 % 0.85 % 0.22 % 25.9 % 0.97 % 0.10 % 10.3 % 0.77 % 1.15 % (0.38 %) (33.0 %)assetsReturn on average 9.32 % 7.43 % 1.89 % 25.4 % 7.66 % 1.66 % 21.7 % 6.41 % 9.45 % (3.04 %) (32.2 %)equity Efficiency ratio^1 55.12 % 58.77 % (3.65 %) (6.2 %) 64.05 % (8.9 %) (13.9 %) 62.66 % 62.94 % (0.28 %) (0.4 %)

Yield on 4.01 % 3.96 % 0.05 % 1.3 % 5.35 % (1.34 %) (25.1 %) 4.34 % 5.58 % (1.24 %) (22.2 %)interest-earningassets?Cost of funds 0.60 % 0.85 % (0.25 %) (29.4 %) 1.79 % (1.19 %) (66.5 %) 1.04 % 1.85 % (0.81 %) (43.8 %)

Cost of funds exc. SBA 0.62 % 0.89 % (0.27 %) (30.3 %) 1.09 %PPP loan fundingNet interest margin? 3.48 % 3.20 % 0.28 % 8.8 % 3.77 % (0.29 %) (7.7 %) 3.41 % 3.94 % (0.53 %) (13.5 %)

Net interest margin 3.52 % 3.27 % 0.25 % 7.7 % 3.45 %exc. SBA PPP loans? ^1 Represents the ratio of noninterest expense less other real estate owned operations to the sum of net interest income before provision for credit losses and total noninterest income, less gains/(loss) on sale of securities, other-than-temporary impairment recovery/(loss) on investment securities and gain/(loss) from other real estate owned.? Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate^1 Represents the ratio of noninterest expense less other real estate ownedoperations to the sum of net interest income before provision for credit lossesand total noninterest income, less gains/(loss) on sale of securities,other-than-temporary impairment recovery/(loss) on investment securities andgain/(loss) from other real estate owned.? Amounts calculated on a fully taxable equivalent basis using the currentstatutory federal tax rateBALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2(Dollars in thousands)December, 31September 30,$%December, 31$%2020

2020

ChangeChange2019

ChangeChangeASSETSCash and due from banks$

8,750

$

8,030

$

720

9.0

%

$

10,059

$

(1,309

)

(13.0

%)

Interest-earning deposits at the FRB and other banks153,908

212,279

(58,371

)

(27.5

%)

93,259

60,649

65.0

%

Investment securities^185,914

88,784

(2,870

)

(3.2

%)

94,640

(8,726

)

(9.2

%)

Loans held-for-sale, at the lower of cost or fair value59,077

53,755

5,322

9.9

%

28,826

30,251

104.9

%

Loans receivable1,043,662

1,011,867

31,795

3.1

%

906,875

136,787

15.1

%

Allowance for loan losses(14,366

)

(13,614

)

(752

)

(5.5

%)

(10,596

)

(3,770

)

(35.6

%)

Loans receivable, net1,029,296

998,253

31,043

3.1

%

896,279

133,017

14.8

%

OREO-

-

-

-

362

(362

)

(100.0

%)

Restricted stock investments8,196

8,196

-

-

8,194

2

0.0

%

Servicing assets9,873

9,043

830

9.2

%

9,697

176

1.8

%

Other assets20,233

21,064

(831

)

(3.9

%)

21,372

(1,139

)

(5.3

%)

Total assets$

1,375,247

$

1,399,404

$

(24,157

)

(1.7

%)

$

1,162,688

$

212,559

18.3

%

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

335,219

$

363,350

$

(28,131

)

(7.7

%)

$

209,484

$

125,735

60.0

%

Interest-bearing763,906

738,040

25,866

3.5

%

763,822

84

0.0

%

Total deposits1,099,125

1,101,390

(2,265

)

(0.2

%)

973,306

125,819

12.9

%

FHLB advances and other borrowing105,000

128,671

(23,671

)

(18.4

%)

25,000

80,000

320.0

%

Other liabilities11,145

13,295

(2,150

)

(16.2

%)

16,298

(5,153

)

(31.6

%)

Total liabilities1,215,270

1,243,356

(28,086

)

(2.3

%)

1,014,604

200,666

19.8

%

Stockholders' Equity159,977

156,048

3,929

2.5

%

148,084

11,893

8.0

%

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,375,247

$

1,399,404

$

(24,157

)

(1.7

%)

$

1,162,688

$

212,559

18.3

%

CAPITAL RATIOSLeverage ratioCompany11.56

%

11.76

%

(0.20

%)

(1.7

%)

12.59

%

(1.03

%)

(8.2

%)

Bank11.54

%

11.72

%

(0.18

%)

(1.54

%)

12.55

%

(1.01

%)

(8.0

%)

Common equity tier 1 risk-based capital ratioCompany15.01

%

15.24

%

(0.23

%)

(1.5

%)

14.95

%

0.06

%

0.4

%

Bank14.97

%

15.20

%

(0.23

%)

(1.5

%)

14.91

%

0.06

%

0.4

%

Tier 1 risk-based capital ratioCompany15.01

%

15.24

%

(0.23

%)

(1.5

%)

14.95

%

0.06

%

0.4

%

Bank14.97

%

15.20

%

(0.23

%)

(1.5

%)

14.91

%

0.06

%

0.4

%

Total risk-based capital ratioCompany16.26

%

16.50

%

(0.24

%)

(1.5

%)

16.11

%

0.15

%

0.9

%

Bank16.22

%

16.45

%

(0.23

%)

(1.4

%)

16.08

%

0.14

%

0.9

%

Book value per share$

15.61

$

15.23

$

0.38

2.5

%

$

14.52

$

1.09

7.5

%

Loan-to-Deposit (LTD) ratio94.95

%

91.87

%

3.08

%

3.4

%

93.17

%

1.78

%

1.9

%

Nonperforming assets2,361

4,111

(1,750

)

(42.6

%)

8,392

$

(6,031

)

(71.9

%)

Nonperforming assets as a % of loans receivable0.23

%

0.41

%

(0.18

%)

(43.9

%)

0.89

%

(0.66

%)

(74.2

%)

ALLL as a % of loans receivable1.38

%

1.35

%

0.03

%

2.2

%

1.17

%

0.21

%

17.9

%

ALLL as a % of loans receivable exc. SBA PPP loans1.51

%

1.48

%

0.03

%

2.0

%

^1 Includes AFS and HTMBALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2(Dollars in thousands) December, 31 September 30, $ % December, 31 $ % 2020 2020 Change Change 2019 Change Change

ASSETS Cash and due from $ 8,750 $ 8,030 $ 720 9.0 % $ 10,059 $ (1,309 ) (13.0 %) banks Interest-earning 153,908 212,279 (58,371 ) (27.5 %) 93,259 60,649 65.0 % deposits at the FRB and other banks Investment 85,914 88,784 (2,870 ) (3.2 %) 94,640 (8,726 ) (9.2 %) securities^1 Loans held-for-sale, at 59,077 53,755 5,322 9.9 % 28,826 30,251 104.9 % the lower of cost or fair value Loans receivable 1,043,662 1,011,867 31,795 3.1 % 906,875 136,787 15.1 %

Allowance for loan (14,366 ) (13,614 ) (752 ) (5.5 %) (10,596 ) (3,770 ) (35.6 %) losses Loans receivable, 1,029,296 998,253 31,043 3.1 % 896,279 133,017 14.8 % net OREO - - - - 362 (362 ) (100.0 %)

Restricted stock 8,196 8,196 - - 8,194 2 0.0 % investments Servicing assets 9,873 9,043 830 9.2 % 9,697 176 1.8 %

Other assets 20,233 21,064 (831 ) (3.9 %) 21,372 (1,139 ) (5.3 %)

Total assets $ 1,375,247 $ 1,399,404 $ (24,157 ) (1.7 %) $ 1,162,688 $ 212,559 18.3 %

LIABILITIES ANDSTOCKHOLDERS' EQUITY Noninterest-bearing $ 335,219 $ 363,350 $ (28,131 ) (7.7 %) $ 209,484 $ 125,735 60.0 %

Interest-bearing 763,906 738,040 25,866 3.5 % 763,822 84 0.0 %

Total deposits 1,099,125 1,101,390 (2,265 ) (0.2 %) 973,306 125,819 12.9 %

FHLB advances and 105,000 128,671 (23,671 ) (18.4 %) 25,000 80,000 320.0 % other borrowing Other liabilities 11,145 13,295 (2,150 ) (16.2 %) 16,298 (5,153 ) (31.6 %)

Total liabilities 1,215,270 1,243,356 (28,086 ) (2.3 %) 1,014,604 200,666 19.8 %

Stockholders' 159,977 156,048 3,929 2.5 % 148,084 11,893 8.0 % EquityTOTAL LIABILITIES & $ 1,375,247 $ 1,399,404 $ (24,157 ) (1.7 %) $ 1,162,688 $ 212,559 18.3 %STOCKHOLDERS' EQUITY CAPITAL RATIOS Leverage ratio Company 11.56 % 11.76 % (0.20 %) (1.7 %) 12.59 % (1.03 %) (8.2 %)

Bank 11.54 % 11.72 % (0.18 %) (1.54 %) 12.55 % (1.01 %) (8.0 %)

Common equity tier 1 risk-based capital ratio Company 15.01 % 15.24 % (0.23 %) (1.5 %) 14.95 % 0.06 % 0.4 %

Bank 14.97 % 15.20 % (0.23 %) (1.5 %) 14.91 % 0.06 % 0.4 %

Tier 1 risk-based capital ratio Company 15.01 % 15.24 % (0.23 %) (1.5 %) 14.95 % 0.06 % 0.4 %

Bank 14.97 % 15.20 % (0.23 %) (1.5 %) 14.91 % 0.06 % 0.4 %

Total risk-based capital ratio Company 16.26 % 16.50 % (0.24 %) (1.5 %) 16.11 % 0.15 % 0.9 %

Bank 16.22 % 16.45 % (0.23 %) (1.4 %) 16.08 % 0.14 % 0.9 %

Book value per $ 15.61 $ 15.23 $ 0.38 2.5 % $ 14.52 $ 1.09 7.5 % share Loan-to-Deposit 94.95 % 91.87 % 3.08 % 3.4 % 93.17 % 1.78 % 1.9 % (LTD) ratio Nonperforming 2,361 4,111 (1,750 ) (42.6 %) 8,392 $ (6,031 ) (71.9 %) assets Nonperforming 0.23 % 0.41 % (0.18 %) (43.9 %) 0.89 % (0.66 %) (74.2 %) assets as a % of loans receivable ALLL as a % of 1.38 % 1.35 % 0.03 % 2.2 % 1.17 % 0.21 % 17.9 % loans receivable ALLL as a % of 1.51 % 1.48 % 0.03 % 2.0 % loans receivable exc. SBA PPP loans ^1 Includes AFS andHTMFIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3(Dollars in thousands, except per share amounts)Three Months EndedDecember, 31September 30,June 30,March 31,December 31,2020

2020

2020

2020

2019

Interest income$

13,613

$

13,212

$

13,206

$

14,473

$

15,254

Interest expense1,830

2,558

3,342

3,981

4,517

Net interest income11,783

10,654

9,864

10,492

10,737

Provision for loan losses1,600

1,600

1,600

700

700

Net interest income after provision for loan losses10,183

9,054

8,264

9,792

10,037

Gain on sale of loans1,484

1,662

509

939

1,481

Gain (loss) on sale of OREO-

-

9

(6

)

-

SBA servicing fee income, net701

948

738

372

413

Recovery on impaired servicing assets894

-

-

-

-

Service charges and other income364

385

251

396

416

Noninterest income3,443

2,995

1,507

1,701

2,310

Salaries and employee benefits5,477

4,948

4,617

5,702

5,355

Occupancy and equipment936

938

943

946

978

Marketing expense133

265

279

458

119

Professional expense478

503

500

435

417

Other expenses1,369

1,367

1,168

1,394

1,487

Noninterest expense8,393

8,021

7,507

8,935

8,356

Income before income tax expense5,233

4,028

2,264

2,558

3,991

Income tax expense1,519

1,125

612

946

1,137

Net income$

3,714

$

2,903

$

1,652

$

1,612

$

2,854

Effective tax rate29.0

%

27.9

%

27.0

%

37.0

%

28.5

%

Outstanding number of shares10,247,292

10,247,292

10,237,310

10,237,310

10,197,380

Weighted average shares for basic EPS10,247,292

10,244,037

10,237,310

10,224,146

10,188,700

Weighted average shares for diluted EPS10,285,410

10,273,148

10,276,637

10,327,730

10,336,793

Basic EPS$

0.36

$

0.28

$

0.16

$

0.16

$

0.28

Diluted EPS$

0.36

$

0.28

$

0.16

$

0.16

$

0.28

FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3(Dollars in thousands, except per share amounts) Three Months Ended December, 31 September 30, June 30, March 31, December 31, 2020 2020 2020 2020 2019

Interest $ 13,613 $ 13,212 $ 13,206 $ 14,473 $ 15,254 incomeInterest 1,830 2,558 3,342 3,981 4,517 expenseNet interest 11,783 10,654 9,864 10,492 10,737 income Provision for 1,600 1,600 1,600 700 700 loan lossesNet interestincome after 10,183 9,054 8,264 9,792 10,037 provision forloan losses Gain on sale 1,484 1,662 509 939 1,481 of loansGain (loss) - - 9 (6 ) - on sale ofOREOSBA servicing 701 948 738 372 413 fee income,netRecovery onimpaired 894 - - - - servicingassetsService 364 385 251 396 416 charges andother incomeNoninterest 3,443 2,995 1,507 1,701 2,310 income Salaries and 5,477 4,948 4,617 5,702 5,355 employeebenefitsOccupancy and 936 938 943 946 978 equipmentMarketing 133 265 279 458 119 expenseProfessional 478 503 500 435 417 expenseOther 1,369 1,367 1,168 1,394 1,487 expensesNoninterest 8,393 8,021 7,507 8,935 8,356 expense Income before 5,233 4,028 2,264 2,558 3,991 income taxexpense Income tax 1,519 1,125 612 946 1,137 expense Net income $ 3,714 $ 2,903 $ 1,652 $ 1,612 $ 2,854

Effective tax 29.0 % 27.9 % 27.0 % 37.0 % 28.5 %rate Outstanding 10,247,292 10,247,292 10,237,310 10,237,310 10,197,380 number ofshares Weightedaverage 10,247,292 10,244,037 10,237,310 10,224,146 10,188,700 shares forbasic EPSWeightedaverage 10,285,410 10,273,148 10,276,637 10,327,730 10,336,793 shares fordiluted EPS Basic EPS $ 0.36 $ 0.28 $ 0.16 $ 0.16 $ 0.28

Diluted EPS $ 0.36 $ 0.28 $ 0.16 $ 0.16 $ 0.28

QUARTERLY SALARIES BENEFIT METRICS (Unaudited) - Table 4(Dollars in thousands)At or for the Three Months EndedDecember, 31September 30,June 30,March 31,December 31,2020

2020

2020

2020

2019

Salaries and benefits$

5,477

$

4,948

$

4,617

$

5,702

$

5,355

FTE at the end of period183

179

191

194

190

Average FTE during the period184

181

193

192

191

Salaries and benefits/average FTE^1$

118

$

109

$

96

$

119

$

111

Salaries and benefits/average assets^11.58

%

1.45

%

1.44

%

2.03

%

1.83

%

Noninterest expense/average assets^12.42

%

2.34

%

2.35

%

3.19

%

2.85

%

1 AnnualizedQUARTERLY SALARIES BENEFIT METRICS (Unaudited) - Table 4(Dollars in thousands) At or for the Three Months Ended December, September June 30, March 31, December 31 30, 31, 2020 2020 2020 2020 2019

Salaries and $ 5,477 $ 4,948 $ 4,617 $ 5,702 $ 5,355 benefitsFTE at the end of 183 179 191 194 190 periodAverage FTE during 184 181 193 192 191 the periodSalaries and $ 118 $ 109 $ 96 $ 119 $ 111 benefits/averageFTE^1Salaries and 1.58 % 1.45 % 1.44 % 2.03 % 1.83 %benefits/averageassets^1Noninterest expense 2.42 % 2.34 % 2.35 % 3.19 % 2.85 %/average assets^1 ^1 Annualized FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5(Dollars in thousands)December, 31September 30,June 30,March 31,December 31,2020

2020

2019

2020

2019

ASSETSCash and due from banks$

8,750

$

8,030

$

9,043

$

7,804

$

10,059

Interest-earning deposits at the FRB and other banks153,908

212,279

179,519

113,880

93,259

Investment securities^185,914

88,784

91,091

91,863

94,640

Loans held-for-sale, at the lower of cost or fair value59,077

53,755

32,264

29,989

28,826

Loans receivable1,043,662

1,011,867

1,005,128

931,717

906,875

Allowance for loan losses(14,366

)

(13,614

)

(12,283

)

(11,034

)

(10,596

)

Loans receivable, net1,029,296

998,253

992,845

920,683

896,279

OREO-

-

-

364

362

Restricted stock investments8,196

8,196

8,196

8,194

8,194

Servicing assets9,873

9,043

8,944

9,203

9,697

Other assets20,233

21,064

21,383

20,144

21,372

Total assets$

1,375,247

$

1,399,404

$

1,343,285

$

1,202,124

$

1,162,688

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

335,219

$

363,350

$

295,003

$

211,139

$

209,484

Interest-bearing763,906

738,040

732,647

739,285

763,822

Total deposits1,099,125

1,101,390

1,027,650

950,424

973,306

FHLB advances105,000

128,671

148,671

85,000

25,000

Other liabilities11,145

13,295

14,208

16,895

16,298

Total liabilities1,215,270

1,243,356

1,190,529

1,052,319

1,014,604

Stockholders' Equity159,977

156,048

152,756

149,805

148,084

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,375,247

$

1,399,404

$

1,343,285

$

1,202,124

$

1,162,688

^1 Includes AFS and HTMFIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5(Dollars in thousands) December, 31 September 30, June 30, March 31, December 31, 2020 2020 2019 2020 2019

ASSETS Cash and due from $ 8,750 $ 8,030 $ 9,043 $ 7,804 $ 10,059 banks Interest-earning 153,908 212,279 179,519 113,880 93,259 deposits at the FRB and other banks Investment 85,914 88,784 91,091 91,863 94,640 securities^1 Loans held-for-sale, at 59,077 53,755 32,264 29,989 28,826 the lower of cost or fair value Loans receivable 1,043,662 1,011,867 1,005,128 931,717 906,875

Allowance for loan (14,366 ) (13,614 ) (12,283 ) (11,034 ) (10,596 ) losses Loans receivable, 1,029,296 998,253 992,845 920,683 896,279 net OREO - - - 364 362

Restricted stock 8,196 8,196 8,196 8,194 8,194 investments Servicing assets 9,873 9,043 8,944 9,203 9,697

Other assets 20,233 21,064 21,383 20,144 21,372

Total assets $ 1,375,247 $ 1,399,404 $ 1,343,285 $ 1,202,124 $ 1,162,688

LIABILITIES ANDSTOCKHOLDERS' EQUITY Noninterest-bearing $ 335,219 $ 363,350 $ 295,003 $ 211,139 $ 209,484

Interest-bearing 763,906 738,040 732,647 739,285 763,822

Total deposits 1,099,125 1,101,390 1,027,650 950,424 973,306

FHLB advances 105,000 128,671 148,671 85,000 25,000

Other liabilities 11,145 13,295 14,208 16,895 16,298

Total liabilities 1,215,270 1,243,356 1,190,529 1,052,319 1,014,604

Stockholders' 159,977 156,048 152,756 149,805 148,084 EquityTOTAL LIABILITIES & $ 1,375,247 $ 1,399,404 $ 1,343,285 $ 1,202,124 $ 1,162,688 STOCKHOLDERS' EQUITY ^1 Includes AFS andHTM FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands)December 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019Balance%Balance%Balance%Balance%Balance%Construction$

13,685

1.3

%

$

18,236

1.8

%

$

14,649

1.5

%

$

12,607

1.4

%

$

16,957

1.9

%

Commercial real estate820,355

78.6

%

779,062

77.0

%

769,563

76.6

%

768,539

82.5

%

746,969

82.4

%

Commercial and industrial205,883

19.7

%

211,298

20.9

%

215,362

21.4

%

143,117

15.4

%

135,412

14.9

%

Consumer2,439

0.2

%

2,751

0.3

%

5,646

0.6

%

5,056

0.5

%

5,184

0.6

%

Gross loans1,042,362

99.9

%

1,011,347

99.9

%

1,005,220

100.0

%

929,319

99.7

%

904,522

99.7

%

Net deferred loan fees/costs1,300

0.1

%

520

0.1

%

(92

)

0.0

%

2,398

0.3

%

2,353

0.3

%

Loans receivable$

1,043,662

100.0

%

$

1,011,867

100.0

%

$

1,005,128

100.0

%

$

931,717

100.0

%

$

906,875

100.0

%

Loans held-for-sale$

59,077

$

53,755

$

32,264

$

29,989

$

28,826

Loans receivable, including loans held-for-sale$

1,102,739

$

1,065,622

$

1,037,392

$

961,706

$

935,701

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands) December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 Balance % Balance % Balance % Balance % Balance % Construction $ 13,685 1.3 % $ 18,236 1.8 % $ 14,649 1.5 % $ 12,607 1.4 % $ 16,957 1.9 %

Commercial 820,355 78.6 % 779,062 77.0 % 769,563 76.6 % 768,539 82.5 % 746,969 82.4 %real estateCommercial 205,883 19.7 % 211,298 20.9 % 215,362 21.4 % 143,117 15.4 % 135,412 14.9 %andindustrialConsumer 2,439 0.2 % 2,751 0.3 % 5,646 0.6 % 5,056 0.5 % 5,184 0.6 %

Gross loans 1,042,362 99.9 % 1,011,347 99.9 % 1,005,220 100.0 % 929,319 99.7 % 904,522 99.7 %

Net deferred 1,300 0.1 % 520 0.1 % (92 ) 0.0 % 2,398 0.3 % 2,353 0.3 %loan fees/costsLoans $ 1,043,662 100.0 % $ 1,011,867 100.0 % $ 1,005,128 100.0 % $ 931,717 100.0 % $ 906,875 100.0 %receivable Loans $ 59,077 $ 53,755 $ 32,264 $ 29,989 $ 28,826held-for-saleLoansreceivable, $ 1,102,739 $ 1,065,622 $ 1,037,392 $ 961,706 $ 935,701includingloansheld-for-saleSBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7(Dollars in thousands)Three Months EndedTwelve Months EndedDecember 31,September 30,June 30,March 31,December 31,December 31,December 31,2020

2020

2020

2020

2019

2020

2019

SBA loans held-for-sale at beginning of the quarter/year$

53,755

$

32,264

$

29,988

$

28,826

$

42,132

$

28,826

$

45,665

SBA loans originated/transferred from/to held-for-investment during the quarter/year26,837

46,731

12,497

20,479

19,146

106,544

103,277

SBA loans sold during the quarter/year(20,382

)

(24,866

)

(9,832

)

(18,530

)

(28,948

)

(73,610

)

(115,367

)

SBA loans principal payment, net of advance(1,133

)

(374

)

(389

)

(787

)

(3,504

)

(2,683

)

(4,749

)

SBA loans held-for-sale at end of the quarter/year$

59,077

$

53,755

$

32,264

$

29,988

$

28,826

$

59,077

$

28,826

Gain on sale of SBA loans$

1,484

$

1,662

$

509

$

939

$

1,481

$

4,594

$

6,153

Premium on sale (weighted average)10.7

%

9.8

%

8.6

%

8.0

%

7.6

%

9.4

%

8.2

%

SBA loan production$

37,116

$

59,957

$

113,782

$

31,794

$

30,783

$

242,648

$

136,976

SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7(Dollars in thousands) Three Months Ended Twelve Months Ended December September June 30, March 31, December December December 31, 31, 30, 31, 31, 2020 2020 2020 2020 2019 2020 2019

SBA loansheld-for-sale $ 53,755 $ 32,264 $ 29,988 $ 28,826 $ 42,132 $ 28,826 $ 45,665 at beginningof thequarter/yearSBA loansoriginated/transferredfrom/toheld-for-investment 26,837 46,731 12,497 20,479 19,146 106,544 103,277 during thequarter/yearSBA loanssold during (20,382 ) (24,866 ) (9,832 ) (18,530 ) (28,948 ) (73,610 ) (115,367 )the quarter/yearSBA loansprincipal (1,133 ) (374 ) (389 ) (787 ) (3,504 ) (2,683 ) (4,749 )payment, netof advanceSBA loansheld-for-sale $ 59,077 $ 53,755 $ 32,264 $ 29,988 $ 28,826 $ 59,077 $ 28,826 at end of thequarter/year Gain on sale $ 1,484 $ 1,662 $ 509 $ 939 $ 1,481 $ 4,594 $ 6,153 of SBA loansPremium onsale 10.7 % 9.8 % 8.6 % 8.0 % 7.6 % 9.4 % 8.2 %(weightedaverage) SBA loan $ 37,116 $ 59,957 $ 113,782 $ 31,794 $ 30,783 $ 242,648 $ 136,976 productionSBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8(Dollars in thousands)Three Months EndedTwelve Months EndedDecember 31,September 30,June 30,March 31,December 31,December 31,December 31,2020

2020

2020

2020

2019

2020

2019

SBA servicing assets @ beginning of the quarter/year$

9,043

$

8,944

$

9,203

$

9,697

$

9,953

$

9,697

$

10,541

Newly added SBA servicing assets from SBA loans sold441

523

197

383

606

1,544

2,390

Regular quarterly/annual servicing assets amortization(392

)

(384

)

(383

)

(388

)

(402

)

(1,547

)

(1,590

)

SBA servicing assets amortized from SBA loans paid off/charged off(113

)

(40

)

(73

)

(489

)

(460

)

(715

)

(1,644

)

Subtotal before impairment8,979

9,043

8,944

9,203

9,697

8,979

9,697

SBA servicing assets impairment894

-

-

-

-

894

-

SBA servicing liability impairment-

-

-

-

-

-

-

SBA servicing assets @ the end of the quarter/year$

9,873

$

9,043

$

8,944

$

9,203

$

9,697

$

9,873

$

9,697

SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8(Dollars in thousands) Three Months Ended Twelve Months Ended December September June 30, March 31, December December December 31, 30, 31, 31, 31, 2020 2020 2020 2020 2019 2020 2019

SBAservicingassets @ $ 9,043 $ 8,944 $ 9,203 $ 9,697 $ 9,953 $ 9,697 $ 10,541 beginning ofthe quarter/year Newly addedSBAservicing 441 523 197 383 606 1,544 2,390 assets fromSBA loanssoldRegularquarterly/annual (392 ) (384 ) (383 ) (388 ) (402 ) (1,547 ) (1,590 )servicingassetsamortizationSBAservicingassetsamortized (113 ) (40 ) (73 ) (489 ) (460 ) (715 ) (1,644 )from SBAloans paidoff/chargedoff Subtotal 8,979 9,043 8,944 9,203 9,697 8,979 9,697 beforeimpairment SBAservicing 894 - - - - 894 - assetsimpairmentSBAservicing - - - - - - - liabilityimpairment SBAservicing $ 9,873 $ 9,043 $ 8,944 $ 9,203 $ 9,697 $ 9,873 $ 9,697 assets @ theend of thequarter/yearFIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands)December 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019Balance%Balance%Balance%Balance%Balance%Noninterest-bearing demand$

335,219

30.5

%

$

363,350

33.0

%

$

295,003

28.7

%

$

211,139

22.2

%

$

209,484

21.5

%

NOW & MMDA260,374

23.7

%

229,730

20.9

%

192,950

18.8

%

136,356

14.3

%

117,450

12.1

%

Savings51,659

4.7

%

61,631

5.6

%

68,244

6.6

%

64,659

6.8

%

67,060

6.9

%

TCDs of $250K and under232,192

21.1

%

230,230

20.9

%

241,718

23.5

%

273,624

28.8

%

328,058

33.7

%

TCDs of $250K over150,143

13.7

%

146,911

13.3

%

139,197

13.5

%

154,108

16.2

%

158,009

16.2

%

Wholesale TCDs69,538

6.3

%

69,538

6.3

%

90,538

8.8

%

110,538

11.6

%

93,245

9.6

%

Total Deposits$

1,099,125

100.0

%

$

1,101,390

100.0

%

$

1,027,650

100.0

%

$

950,424

100.0

%

$

973,306

100.0

%

Recap:Noninterest-bearing demand$

335,219

30.5

%

$

363,350

33.0

%

$

295,003

28.7

%

$

211,139

22.2

%

$

209,484

21.5

%

NOW & MMDA260,374

23.7

%

229,730

20.9

%

192,950

18.8

%

136,356

14.3

%

117,450

12.1

%

Savings51,659

4.7

%

61,631

5.6

%

68,244

6.6

%

64,659

6.8

%

67,060

6.9

%

TCDs of $250K and under232,192

21.1

%

230,230

20.9

%

241,718

23.5

%

273,624

28.8

%

328,058

33.7

%

Core Deposits879,444

80.0

%

884,941

80.3

%

797,915

77.6

%

685,778

72.2

%

722,052

74.2

%

TCDs of $250K over150,143

13.7

%

146,911

13.3

%

139,197

13.5

%

154,108

16.2

%

158,009

16.2

%

Wholesale TCDs69,538

6.3

%

69,538

6.3

%

90,538

8.8

%

110,538

11.6

%

93,245

9.6

%

Noncore Deposits219,681

20.0

%

216,449

19.7

%

229,735

22.4

%

264,646

27.8

%

251,254

25.8

%

Total Deposits$

1,099,125

100.0

%

$

1,101,390

100.0

%

$

1,027,650

100.0

%

$

950,424

100.0

%

$

973,306

100.0

%

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands) December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 Balance % Balance % Balance % Balance % Balance % Noninterest-bearing $ 335,219 30.5 % $ 363,350 33.0 % $ 295,003 28.7 % $ 211,139 22.2 % $ 209,484 21.5 %demandNOW & MMDA 260,374 23.7 % 229,730 20.9 % 192,950 18.8 % 136,356 14.3 % 117,450 12.1 %

Savings 51,659 4.7 % 61,631 5.6 % 68,244 6.6 % 64,659 6.8 % 67,060 6.9 %

TCDs of $250K and under 232,192 21.1 % 230,230 20.9 % 241,718 23.5 % 273,624 28.8 % 328,058 33.7 %

TCDs of $250K over 150,143 13.7 % 146,911 13.3 % 139,197 13.5 % 154,108 16.2 % 158,009 16.2 %

Wholesale TCDs 69,538 6.3 % 69,538 6.3 % 90,538 8.8 % 110,538 11.6 % 93,245 9.6 %

Total Deposits $ 1,099,125 100.0 % $ 1,101,390 100.0 % $ 1,027,650 100.0 % $ 950,424 100.0 % $ 973,306 100.0 %

Recap:Noninterest-bearing $ 335,219 30.5 % $ 363,350 33.0 % $ 295,003 28.7 % $ 211,139 22.2 % $ 209,484 21.5 %demandNOW & MMDA 260,374 23.7 % 229,730 20.9 % 192,950 18.8 % 136,356 14.3 % 117,450 12.1 %

Savings 51,659 4.7 % 61,631 5.6 % 68,244 6.6 % 64,659 6.8 % 67,060 6.9 %

TCDs of $250K and under 232,192 21.1 % 230,230 20.9 % 241,718 23.5 % 273,624 28.8 % 328,058 33.7 %

Core Deposits 879,444 80.0 % 884,941 80.3 % 797,915 77.6 % 685,778 72.2 % 722,052 74.2 %

TCDs of $250K over 150,143 13.7 % 146,911 13.3 % 139,197 13.5 % 154,108 16.2 % 158,009 16.2 %

Wholesale TCDs 69,538 6.3 % 69,538 6.3 % 90,538 8.8 % 110,538 11.6 % 93,245 9.6 %

Noncore Deposits 219,681 20.0 % 216,449 19.7 % 229,735 22.4 % 264,646 27.8 % 251,254 25.8 %

Total Deposits $ 1,099,125 100.0 % $ 1,101,390 100.0 % $ 1,027,650 100.0 % $ 950,424 100.0 % $ 973,306 100.0 %

SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10(Dollars in thousands)4th Qtr.3rd Qtr.2nd Qtr.1st Qtr.4th Qtr.2020

2020

2020

2020

2019

Allowance for Loan LossesBalance at beginning of period$

13,614

$

12,283

$

11,034

$

10,596

$

9,978

Provision for loan losses1,600

1,600

1,600

700

700

Charge-offs(907

)

(292

)

(359

)

(284

)

(94

)

Recoveries59

23

8

22

12

Balance at the end of period$

14,366

$

13,614

$

12,283

$

11,034

$

10,596

Nonperforming Assets:^1Over 90 days still accruing$

2

$

200

$

-

$

-

$

-

Nonaccrual loans2,359

3,911

4,189

6,901

8,030

Total nonperforming loans2,361

4,111

4,189

6,901

8,030

Other real estate owned-

-

-

364

362

Total nonperforming assets$

2,361

$

4,111

$

4,189

$

7,265

$

8,392

Classified Assets:^1Substandard$

18,920

$

20,579

$

9,909

$

13,301

$

14,497

Doubtful68

-

-

-

-

Loss-

-

-

-

-

Total classified loans$

18,988

$

20,579

$

9,909

$

13,301

$

14,497

Other real estate owned-

-

-

364

362

Total classified assets$

18,988

$

20,579

$

9,909

$

13,665

$

14,859

Performing TDR loans:$

2,847

$

1,072

$

1,073

$

508

$

592

Delinquent Loans:^1Loans 30-89 days past due$

3,095

$

714

$

721

$

2,172

$

43

90 days or more past due and still accruing2

200

-

-

-

Nonaccrual2,359

3,911

4,189

6,901

8,030

Total delinquent loans$

5,456

$

4,825

$

4,910

$

9,073

$

8,073

Asset Quality Ratios:Net (recoveries) charge-offs to average loans?0.32

%

0.10

%

0.14

%

0.11

%

0.03

%

Nonaccrual loans to loans receivable0.23

%

0.39

%

0.42

%

0.74

%

0.89

%

Nonperforming loans to loans receivable0.23

%

0.41

%

0.42

%

0.74

%

0.89

%

Nonperforming assets to total assets0.17

%

0.29

%

0.31

%

0.60

%

0.72

%

Classified loans to loans receivable1.82

%

2.03

%

0.99

%

1.43

%

1.60

%

Classified loans to Tier 1 and ALLL10.89

%

12.13

%

6.00

%

8.27

%

9.14

%

Classified assets to total assets1.38

%

1.47

%

0.74

%

1.14

%

1.28

%

Classified assets to Tier 1 and ALLL10.89

%

12.13

%

6.00

%

8.50

%

9.36

%

ALLL to loans receivable1.38

%

1.35

%

1.22

%

1.18

%

1.17

%

ALLL to loans receivable exc. SBA PPP loans1.51

%

1.48

%

1.34

%

1.18

%

1.17

%

ALLL to nonaccrual loans608.99

%

348.10

%

293.22

%

159.89

%

131.96

%

ALLL to nonperforming loans608.47

%

331.16

%

293.22

%

159.89

%

131.96

%

ALLL to nonperforming assets608.47

%

331.16

%

293.22

%

151.88

%

126.26

%

Texas ratio ?1.35

%

2.42

%

2.54

%

4.52

%

5.29

%

1 Net of SBA guaranteed balance2 Includes loans held-for-sale3 Nonperforming assets divided by tangible common equity and ALLLSELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10(Dollars in thousands) 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 2020 2020 2020 2020 2019

Allowance forLoan LossesBalance at $ 13,614 $ 12,283 $ 11,034 $ 10,596 $ 9,978 beginning ofperiodProvision for 1,600 1,600 1,600 700 700 loan lossesCharge-offs (907 ) (292 ) (359 ) (284 ) (94 )

Recoveries 59 23 8 22 12

Balance at $ 14,366 $ 13,614 $ 12,283 $ 11,034 $ 10,596 the end ofperiod NonperformingAssets:^1Over 90 days $ 2 $ 200 $ - $ - $ - stillaccruingNonaccrual 2,359 3,911 4,189 6,901 8,030 loansTotal 2,361 4,111 4,189 6,901 8,030 nonperformingloans Other real - - - 364 362 estate ownedTotal $ 2,361 $ 4,111 $ 4,189 $ 7,265 $ 8,392 nonperformingassets ClassifiedAssets:^1Substandard $ 18,920 $ 20,579 $ 9,909 $ 13,301 $ 14,497

Doubtful 68 - - - -

Loss - - - - -

Total $ 18,988 $ 20,579 $ 9,909 $ 13,301 $ 14,497 classifiedloans Other real - - - 364 362 estate ownedTotal $ 18,988 $ 20,579 $ 9,909 $ 13,665 $ 14,859 classifiedassets Performing $ 2,847 $ 1,072 $ 1,073 $ 508 $ 592 TDR loans: DelinquentLoans:^1Loans 30-89 $ 3,095 $ 714 $ 721 $ 2,172 $ 43 days past due90 days ormore past due 2 200 - - - and stillaccruingNonaccrual 2,359 3,911 4,189 6,901 8,030

Total $ 5,456 $ 4,825 $ 4,910 $ 9,073 $ 8,073 delinquentloans Asset QualityRatios:Net(recoveries) 0.32 % 0.10 % 0.14 % 0.11 % 0.03 %charge-offsto averageloans?Nonaccrualloans to 0.23 % 0.39 % 0.42 % 0.74 % 0.89 %loansreceivableNonperformingloans to 0.23 % 0.41 % 0.42 % 0.74 % 0.89 %loansreceivableNonperforming 0.17 % 0.29 % 0.31 % 0.60 % 0.72 %assets tototal assetsClassifiedloans to 1.82 % 2.03 % 0.99 % 1.43 % 1.60 %loansreceivableClassified 10.89 % 12.13 % 6.00 % 8.27 % 9.14 %loans to Tier1 and ALLLClassified 1.38 % 1.47 % 0.74 % 1.14 % 1.28 %assets tototal assetsClassifiedassets to 10.89 % 12.13 % 6.00 % 8.50 % 9.36 %Tier 1 andALLLALLL to loans 1.38 % 1.35 % 1.22 % 1.18 % 1.17 %receivableALLL to loansreceivable 1.51 % 1.48 % 1.34 % 1.18 % 1.17 %exc. SBA PPPloansALLL to 608.99 % 348.10 % 293.22 % 159.89 % 131.96 %nonaccrualloansALLL to 608.47 % 331.16 % 293.22 % 159.89 % 131.96 %nonperformingloansALLL to 608.47 % 331.16 % 293.22 % 151.88 % 126.26 %nonperformingassetsTexas ratio ? 1.35 % 2.42 % 2.54 % 4.52 % 5.29 %

^1 Net of SBAguaranteedbalance^2 Includesloansheld-for-sale^3 Nonperforming assets divided bytangible common equity and ALLLFIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11Well CapitalizedAdequately CapitalizedDecember 31,September 30,June 30,March 31,December 31,RegulatoryBASEL IIIRequirementFully Phased In2020

2020

2020

2020

2019

Leverage ratioCompanyN/A

N/A

11.56

%

11.76

%

11.98

%

13.17

%

12.59

%

Bank5.00

%

4.00

%

11.54

%

11.72

%

11.94

%

13.12

%

12.55

%

Common equity tier 1 risk-based capital ratioCompanyN/A

N/A

15.01

%

15.24

%

15.23

%

14.82

%

14.95

%

Bank6.50

%

7.00

%

14.97

%

15.20

%

15.18

%

14.77

%

14.91

%

Tier 1 risk-based capital ratioCompanyN/A

N/A

15.01

%

15.24

%

15.23

%

14.82

%

14.95

%

Bank8.00

%

8.50

%

14.97

%

15.20

%

15.18

%

14.77

%

14.91

%

Total risk-based capital ratioCompanyN/A

N/A

16.26

%

16.50

%

16.48

%

16.01

%

16.11

%

Bank10.00

%

10.50

%

16.22

%

16.45

%

16.43

%

15.95

%

16.08

%

Common equity/total assets11.63

%

11.15

%

11.37

%

12.46

%

12.74

%

Common equity per share$

15.61

$

15.23

$

14.92

$

14.63

$

14.52

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11 Well Adequately December September June 30, March 31, December Capitalized Capitalized 31, 30, 31, Regulatory BASEL III Requirement Fully 2020 2020 2020 2020 2019 Phased In LeverageratioCompany N/A N/A 11.56 % 11.76 % 11.98 % 13.17 % 12.59 %

Bank 5.00 % 4.00 % 11.54 % 11.72 % 11.94 % 13.12 % 12.55 %

Commonequity tier1 risk-basedcapitalratioCompany N/A N/A 15.01 % 15.24 % 15.23 % 14.82 % 14.95 %

Bank 6.50 % 7.00 % 14.97 % 15.20 % 15.18 % 14.77 % 14.91 %

Tier 1risk-based capitalratioCompany N/A N/A 15.01 % 15.24 % 15.23 % 14.82 % 14.95 %

Bank 8.00 % 8.50 % 14.97 % 15.20 % 15.18 % 14.77 % 14.91 %

Totalrisk-based capitalratioCompany N/A N/A 16.26 % 16.50 % 16.48 % 16.01 % 16.11 %

Bank 10.00 % 10.50 % 16.22 % 16.45 % 16.43 % 15.95 % 16.08 %

Commonequity/ 11.63 % 11.15 % 11.37 % 12.46 % 12.74 %totalassetsCommon $ 15.61 $ 15.23 $ 14.92 $ 14.63 $ 14.52 equity pershare MARGIN ANALYSIS (Unaudited) -Table 12(Dollars in thousands)Three Months EndedDecember 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019Avg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1$

1,066,368

$

13,045

4.87

%

$

1,046,678

$

12,650

4.81

%

$

1,018,596

$

12,568

4.96

%

$

941,147

$

13,629

5.82

%

$

930,455

$

14,119

6.02

%

Investment securities?87,818

474

2.15

%

90,450

471

2.07

%

91,401

546

2.40

%

94,375

581

2.48

%

96,005

621

2.57

%

Interest-earning deposits at the FRB and other banks191,703

59

0.12

%

186,678

58

0.12

%

137,945

45

0

55,222

188

1.37

%

99,297

410

1.64

%

Other earning assets8,196

81

3.93

%

8,196

80

3.88

%

8,195

93

4.56

%

8,194

122

5.99

%

8,194

152

7.36

%

Total interest-earning assets ?1,354,085

13,659

4.01

%

1,332,002

13,259

3.96

%

1,256,137

13,252

4.24

%

1,098,938

14,520

5.31

%

1,133,951

15,302

5.35

%

Total interest-earning assets exc. SBA PPP loans?1,264,075

12,945

4.07

%

1,239,609

12,657

4.06

%

1,193,346

12,775

4.31

%

NONINTEREST-EARNING ASSETSCash and due from banks10,234

10,685

8,224

9,056

9,084

Other noninterest-earning assets28,903

31,216

32,285

30,050

30,746

Total noninterest-earning assets39,137

41,901

40,509

39,106

39,830

Less: Allowance for loan losses(13,505

)

(12,293

)

(10,931

)

(10,594

)

(9,969

)

TOTAL ASSETS$

1,379,717

$

1,361,610

$

1,285,715

$

1,127,450

$

1,163,812

INTEREST-BEARING DEPOSITSInterest-bearing demand$

11,444

$

4

0.14

%

$

11,248

$

4

0.14

%

$

13,634

$

5

0.15

%

$

12,041

$

5

0.17

%

$

10,176

$

5

0.19

%

Money market240,913

360

0.59

%

200,878

404

0.80

%

163,332

374

0.92

%

116,550

401

1.38

%

113,444

433

1.51

%

Savings55,756

77

0.55

%

67,880

154

0.90

%

66,389

176

1.07

%

66,955

251

1.51

%

66,232

284

1.70

%

Time deposits447,839

1,236

1.10

%

452,950

1,790

1.57

%

509,447

2,613

2.06

%

555,784

3,297

2.39

%

594,658

3,753

2.50

%

Total interest-bearing deposits755,952

1,677

0.88

%

732,956

2,352

1.28

%

752,802

3,168

1.69

%

751,330

3,954

2.12

%

784,510

4,475

2.26

%

Borrowings88,645

153

0.69

%

147,149

206

0.56

%

115,613

174

0.61

%

9,874

27

1.10

%

10,209

42

1.63

%

Total interest-bearing liabilities844,597

1,830

0.86

%

880,105

2,558

1.16

%

868,415

3,342

1.55

%

761,204

3,981

2.10

%

794,719

4,517

2.25

%

Total interest-bearing liabilities exc. SBA PPP loan funding754,587

1,751

0.92

%

787,712

2,476

1.25

%

805,624

3,287

1.64

%

Noninterest-bearing deposits363,937

313,370

249,909

199,721

205,449

Other liabilities12,623

12,750

15,141

16,018

15,805

Stockholders' equity158,560

155,385

152,250

150,507

147,839

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,379,717

$

1,361,610

$

1,285,715

$

1,127,450

$

1,163,812

Net interest income?$

11,829

$

10,701

$

9,910

$

10,539

$

10,785

Net interest income exc. SBA PPP Loans?$

11,194

$

10,181

$

9,488

Net interest spread3.15

%

2.80

%

2.69

%

3.21

%

3.10

%

Effect of noninterest-bearing sources0.33

%

0.40

%

0.48

%

0.65

%

0.67

%

Net interest margin?3.48

%

3.20

%

3.17

%

3.86

%

3.77

%

Net interest margin exc. SBA PPP loans?3.52

%

3.27

%

3.20

%

Cost of deposits$

1,119,889

$

1,677

0.60

%

$

1,046,326

$

2,352

0.89

%

$

1,002,711

$

3,168

1.27

%

$

951,051

$

3,954

1.67

%

$

989,959

$

4,475

1.79

%

Cost of funds$

1,208,534

$

1,830

0.60

%

$

1,193,475

$

2,558

0.85

%

$

1,118,324

$

3,342

1.20

%

$

960,925

$

3,981

1.67

%

$

1,000,168

$

4,517

1.79

%

Cost of funds exc. SBA ppp loan funding$

1,118,524

$

1,751

0.62

%

$

1,101,082

$

2,476

0.89

%

$

1,055,533

$

3,287

1.25

%

1 Includes loans held-for-sale? Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rateMARGIN ANALYSIS (Unaudited) -Table 12(Dollars in thousands) Three Months Ended December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest YieldNumber of Days in thePeriodINTEREST-EARNING ASSETSLoans ^1 $ 1,066,368 $ 13,045 4.87 % $ 1,046,678 $ 12,650 4.81 % $ 1,018,596 $ 12,568 4.96 % $ 941,147 $ 13,629 5.82 % $ 930,455 $ 14,119 6.02 %

Investment securities? 87,818 474 2.15 % 90,450 471 2.07 % 91,401 546 2.40 % 94,375 581 2.48 % 96,005 621 2.57 %

Interest-earning deposits 191,703 59 0.12 % 186,678 58 0.12 % 137,945 45 0 55,222 188 1.37 % 99,297 410 1.64 %at the FRB and other banksOther earning assets 8,196 81 3.93 % 8,196 80 3.88 % 8,195 93 4.56 % 8,194 122 5.99 % 8,194 152 7.36 %

Total interest-earning 1,354,085 13,659 4.01 % 1,332,002 13,259 3.96 % 1,256,137 13,252 4.24 % 1,098,938 14,520 5.31 % 1,133,951 15,302 5.35 %assets ?Total interest-earning 1,264,075 12,945 4.07 % 1,239,609 12,657 4.06 % 1,193,346 12,775 4.31 %assets exc. SBA PPP loans? NONINTEREST-EARNING ASSETSCash and due from banks 10,234 10,685 8,224 9,056 9,084

Other noninterest-earning 28,903 31,216 32,285 30,050 30,746 assetsTotal noninterest-earning 39,137 41,901 40,509 39,106 39,830 assets Less: Allowance for loan (13,505 ) (12,293 ) (10,931 ) (10,594 ) (9,969 )lossesTOTAL ASSETS $ 1,379,717 $ 1,361,610 $ 1,285,715 $ 1,127,450 $ 1,163,812

INTEREST-BEARING DEPOSITSInterest-bearing demand $ 11,444 $ 4 0.14 % $ 11,248 $ 4 0.14 % $ 13,634 $ 5 0.15 % $ 12,041 $ 5 0.17 % $ 10,176 $ 5 0.19 %

Money market 240,913 360 0.59 % 200,878 404 0.80 % 163,332 374 0.92 % 116,550 401 1.38 % 113,444 433 1.51 %

Savings 55,756 77 0.55 % 67,880 154 0.90 % 66,389 176 1.07 % 66,955 251 1.51 % 66,232 284 1.70 %

Time deposits 447,839 1,236 1.10 % 452,950 1,790 1.57 % 509,447 2,613 2.06 % 555,784 3,297 2.39 % 594,658 3,753 2.50 %

Total interest-bearing 755,952 1,677 0.88 % 732,956 2,352 1.28 % 752,802 3,168 1.69 % 751,330 3,954 2.12 % 784,510 4,475 2.26 %deposits Borrowings 88,645 153 0.69 % 147,149 206 0.56 % 115,613 174 0.61 % 9,874 27 1.10 % 10,209 42 1.63 %

Total interest-bearing 844,597 1,830 0.86 % 880,105 2,558 1.16 % 868,415 3,342 1.55 % 761,204 3,981 2.10 % 794,719 4,517 2.25 %liabilitiesTotal interest-bearing 754,587 1,751 0.92 % 787,712 2,476 1.25 % 805,624 3,287 1.64 %liabilities exc. SBA PPPloan funding Noninterest-bearing 363,937 313,370 249,909 199,721 205,449 depositsOther liabilities 12,623 12,750 15,141 16,018 15,805

Stockholders' equity 158,560 155,385 152,250 150,507 147,839

TOTAL LIABILITIES & $ 1,379,717 $ 1,361,610 $ 1,285,715 $ 1,127,450 $ 1,163,812 STOCKHOLDERS' EQUITY Net interest income? $ 11,829 $ 10,701 $ 9,910 $ 10,539 $ 10,785

Net interest income exc. $ 11,194 $ 10,181 $ 9,488SBA PPP Loans? Net interest spread 3.15 % 2.80 % 2.69 % 3.21 % 3.10 %

Effect of 0.33 % 0.40 % 0.48 % 0.65 % 0.67 %noninterest-bearing sources Net interest margin? 3.48 % 3.20 % 3.17 % 3.86 % 3.77 %

Net interest margin exc. 3.52 % 3.27 % 3.20 %SBA PPP loans? Cost of deposits $ 1,119,889 $ 1,677 0.60 % $ 1,046,326 $ 2,352 0.89 % $ 1,002,711 $ 3,168 1.27 % $ 951,051 $ 3,954 1.67 % $ 989,959 $ 4,475 1.79 %

Cost of funds $ 1,208,534 $ 1,830 0.60 % $ 1,193,475 $ 2,558 0.85 % $ 1,118,324 $ 3,342 1.20 % $ 960,925 $ 3,981 1.67 % $ 1,000,168 $ 4,517 1.79 %

Cost of funds exc. SBA ppp $ 1,118,524 $ 1,751 0.62 % $ 1,101,082 $ 2,476 0.89 % $ 1,055,533 $ 3,287 1.25 %loan funding ^1 Includes loansheld-for-sale? Amounts calculated on a fully taxable equivalent basis using the currentstatutory federal tax rateCOMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13(Dollars in thousands)Three Months EndedDecember 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019AmountYieldAmountYieldAmountYieldAmountYieldAmountYieldContractual yield$

11,727

4.38

%

$

11,522

4.38

%

$

11,578

4.57

%

$

12,445

5.32

%

$

12,911

5.51

%

SBA discount accretion730

0.27

%

615

0.23

%

662

0.26

%

1,190

0.51

%

1,195

0.51

%

Prepayment penalties & late fees177

0.07

%

221

0.09

%

24

0.01

%

106

0.04

%

172

0.07

%

Amortization of net deferred costs411

0.15

%

292

0.11

%

304

0.12

%

(112

)

(0.05

%)

(159

)

(0.07

%)

As reported yield on loans$

13,045

4.87

%

$

12,650

4.81

%

$

12,568

4.96

%

$

13,629

5.82

%

$

14,119

6.02

%

COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13(Dollars in thousands) Three Months Ended December 31, September 30, June 30, 2020 March 31, 2020 December 31, 2019 2020 2020 Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Contractual $ 11,727 4.38 % $ 11,522 4.38 % $ 11,578 4.57 % $ 12,445 5.32 % $ 12,911 5.51 %yieldSBA discount 730 0.27 % 615 0.23 % 662 0.26 % 1,190 0.51 % 1,195 0.51 %accretionPrepayment 177 0.07 % 221 0.09 % 24 0.01 % 106 0.04 % 172 0.07 %penalties &late feesAmortizationof net 411 0.15 % 292 0.11 % 304 0.12 % (112 ) (0.05 %) (159 ) (0.07 %)deferredcostsAs reported $ 13,045 4.87 % $ 12,650 4.81 % $ 12,568 4.96 % $ 13,629 5.82 % $ 14,119 6.02 %yield onloans MARGIN ANALYSIS (Unaudited) - Table 14(Dollars in thousands)Twelve Months EndedDecember 31, 2020December 31, 2019Avg BalanceInterestYieldAvg BalanceInterestYieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1$

1,018,407

$

51,892

5.10

%

$

928,182

$

57,973

6.25

%

SBA PPP Loans61,462

1,794

2.92

%

-

-

Investment securities?91,001

2,072

2.28

%

99,649

2,641

2.65

%

Interest-earning deposits at the FRB and other banks143,141

350

0.24

%

96,047

2,038

2.12

%

Other earning assets8,195

376

4.59

%

8,099

559

6.90

%

Total interest-earning assets ?1,260,744

54,690

4.34

%

1,131,977

63,211

5.58

%

Total interest-earning assets exc. SBA PPP loans?1,199,282

52,896

4.41

%

NONINTEREST-EARNING ASSETSCash and due from banks9,555

10,677

Other noninterest-earning assets30,557

30,707

Total noninterest-earning assets40,112

41,384

Less: Allowance for loan losses(11,837

)

(9,931

)

TOTAL ASSETS$

1,289,019

$

1,163,430

INTEREST-BEARING DEPOSITSInterest-bearing demand$

12,087

$

18

0.15

%

$

9,029

$

21

0.23

%

Money market180,640

1,539

0.85

%

139,668

2,517

1.80

%

Savings64,232

658

1.02

%

45,479

866

1.90

%

Time deposits491,281

8,936

1.82

%

613,263

15,086

2.46

%

Total interest-bearing deposits748,240

11,151

1.49

%

807,439

18,490

2.29

%

Borrowings90,471

560

0.62

%

10,065

166

1.65

%

Total interest-bearing liabilities838,711

11,711

1.40

%

817,504

18,656

2.28

%

Total interest-bearing liabilities exc. SBA PPP loans777,249

11,495

1.48

%

Noninterest-bearing deposits282,045

190,007

Other Liabilities14,072

14,705

Stockholders' equity154,191

141,214

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,289,019

$

1,163,430

Net interest income?$

42,979

$

44,555

Net interest income exc. SBA PPP loans?$

41,401

Net interest spread2.94

%

3.30

%

Effect of noninterest-bearing sources0.47

%

0.64

%

Net interest margin?3.41

%

3.94

%

Net interest margin exc. SBA PPP loans?3.45

%

Cost of deposits$

1,030,285

$

11,151

1.08

%

$

997,446

$

18,490

1.85

%

Cost of funds$

1,120,756

$

11,711

1.04

%

$

1,007,511

$

18,656

1.85

%

Cost of funds exc. SBA PPP loan funding$

1,059,294

$

11,495

1.09

%

1 Includes loans held-for-sale? Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rateMARGIN ANALYSIS (Unaudited) - Table 14(Dollars in thousands) Twelve Months Ended December 31, 2020 December 31, 2019 Avg Balance Interest Yield Avg Balance Interest YieldNumber of Days inthe PeriodINTEREST-EARNINGASSETSLoans ^1 $ 1,018,407 $ 51,892 5.10 % $ 928,182 $ 57,973 6.25 %

SBA PPP Loans 61,462 1,794 2.92 % - -

Investment 91,001 2,072 2.28 % 99,649 2,641 2.65 %securities?Interest-earning 143,141 350 0.24 % 96,047 2,038 2.12 %deposits at the FRBand other banksOther earning 8,195 376 4.59 % 8,099 559 6.90 %assetsTotal 1,260,744 54,690 4.34 % 1,131,977 63,211 5.58 %interest-earningassets ?Totalinterest-earning 1,199,282 52,896 4.41 %assets exc. SBA PPPloans? NONINTEREST-EARNINGASSETSCash and due from 9,555 10,677 banksOther 30,557 30,707 noninterest-earningassetsTotal 40,112 41,384 noninterest-earningassets Less: Allowance for (11,837 ) (9,931 )loan losses TOTAL ASSETS $ 1,289,019 $ 1,163,430

INTEREST-BEARINGDEPOSITSInterest-bearing $ 12,087 $ 18 0.15 % $ 9,029 $ 21 0.23 %demandMoney market 180,640 1,539 0.85 % 139,668 2,517 1.80 %

Savings 64,232 658 1.02 % 45,479 866 1.90 %

Time deposits 491,281 8,936 1.82 % 613,263 15,086 2.46 %

Total 748,240 11,151 1.49 % 807,439 18,490 2.29 %interest-bearingdeposits Borrowings 90,471 560 0.62 % 10,065 166 1.65 %

Total 838,711 11,711 1.40 % 817,504 18,656 2.28 %interest-bearingliabilitiesTotalinterest-bearing 777,249 11,495 1.48 %liabilities exc.SBA PPP loans Noninterest-bearing 282,045 190,007 depositsOther Liabilities 14,072 14,705

Stockholders' 154,191 141,214 equity TOTAL LIABILITIES & $ 1,289,019 $ 1,163,430 STOCKHOLDERS'EQUITY Net interest $ 42,979 $ 44,555income?Net interest income $ 41,401exc. SBA PPP loans? Net interest spread 2.94 % 3.30 %

Effect of 0.47 % 0.64 %noninterest-bearingsources Net interest 3.41 % 3.94 %margin?Net interest margin 3.45 %exc. SBA PPP loans? Cost of deposits $ 1,030,285 $ 11,151 1.08 % $ 997,446 $ 18,490 1.85 %

Cost of funds $ 1,120,756 $ 11,711 1.04 % $ 1,007,511 $ 18,656 1.85 %

Cost of funds exc. $ 1,059,294 $ 11,495 1.09 %SBA PPP loanfunding ^1 Includes loansheld-for-sale? Amounts calculated on a fully taxable equivalent basis using thecurrent statutory federal tax rateCOMPONENTS OF YIELD ON LOANS (Unaudited) - Table 15(Dollars in thousands)Twelve Months EndedDecember 31, 2020December 31, 2019AmountYieldAmountYieldContractual yield$

47,272

4.65

%

$

53,737

5.79

%

SBA discount accretion3,197

0.31

%

4,499

0.49

%

Prepayment penalties & late fees528

0.05

%

365

0.04

%

Amortization of net deferred costs895

0.09

%

(628

)

(0.07

%)

As reported yield on loans$

51,892

5.10

%

$

57,973

6.25

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210201005145/en/

CONTACT: Long T. Huynh, EVP & CFO (323) 988-3010 Longh@cbb-bank.com