Business Wire | Apr 30, 2021 09:01AM EDT

CBB Bancorp, Inc. Reports First Quarter 2021 Financial Results

Apr. 30, 2021

LOS ANGELES--(BUSINESS WIRE)--Apr. 30, 2021--CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank (the "Bank"), announced today net income for first quarter 2021 of $5.3 million, or $0.52 per diluted share, an increase of 43.6% compared to $3.7 million, or $0.36 per diluted share, in the prior quarter and 230.9% compared to $1.6 million, or $0.16 per diluted share, in the same period last year.

Overall Results

Net income for first quarter 2021 was positively impacted by improving margins and credit quality, as well as continued balance sheet growth. The return on average assets for first quarter 2021 was 1.58% compared to 1.07% for fourth quarter 2020 and 0.58% for first quarter 2020. The return on average equity for first quarter 2021 was 13.26% compared to 9.32% for fourth quarter 2020 and 4.31% for first quarter 2020. The net interest margin for first quarter 2021 was 3.90% compared to 3.48% for fourth quarter 2020 and 3.86% for first quarter 2020. The efficiency ratio for first quarter 2021 was 51.78% compared to 55.12% for fourth quarter 2020 and 73.28% for first quarter 2020.

Joanne Kim, President and CEO commented, "We are pleased to announce record earnings for the first quarter of 2021, as we recover from a challenging 2020. We have been able to provide solid loan and deposit growth, improving margins and improving credit quality of our loan portfolio. We believe we are well positioned to complete the acquisition of Ohana Pacific Bank, subject to receipt of regulatory approval, in the second half of this year."

Net Interest Income and Margin:

Net Interest Income

Net interest income for first quarter 2021 was $12.8 million, an increase of $1.1 million, or 9.0%, from fourth quarter 2020, and an increase of $2.3 million, or 22.4%, from first quarter 2020. The increase in net interest income was driven by loan growth, as well as our continuing to aggressively lower deposit rates and wholesale borrowing costs, while strategically shifting our deposit mix to lower-cost core deposits.

Net Interest Margin

Our net interest margin for first quarter 2021 was 3.90% compared to 3.48% for fourth quarter 2020 and 3.86% for first quarter 2020. 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. Our cost of funds improved for first quarter 2021 to 0.52% from 0.60% for fourth quarter 2020 and 1.67% for first quarter 2020. The Net interest margin during the quarter also benefited from an improved mix of earning assets, as cash and due from banks balances decreased to fund loan balances.

Provision for Loan Losses:

The provision for loan losses for first quarter 2021 was $500 thousand, compared to $1.6 million for fourth quarter 2020 and $700 thousand for first quarter 2020. With no material charge-offs during the quarter, and improving credit quality statistics, the provision in the quarter is substantially all due to portfolio growth. We are continuing to monitor a number of data sources for signs of distress within the portfolio due to COVID-19. These include 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 businesses, 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 information and trends.

Noninterest Income:

Noninterest income for first quarter 2021 was $3.7 million, compared to $3.4 million for fourth quarter 2020 and $1.7 million for first quarter 2020. The increase in noninterest income in first quarter 2021 was the result of higher gains on sales of loans. This increase was partially offset by the income booked in the fourth quarter of 2020 due to a $894 thousand reversal of the valuation allowance on our SBA servicing rights. Sales of SBA loans were $30.2 million with an average premium percentage received of 10.9% during the first quarter of 2021, compared with $20.4 million with an average premium percentage received of 10.7% in the fourth quarter of 2020 and $18.5 million with an average premium percentage received of 8.0% during the first quarter of 2020.

Noninterest Expense:

Noninterest expense for first quarter 2021 was $8.6 million compared to $8.4 million for fourth quarter 2020 and $8.9 million for first quarter 2020. Salaries and employee benefits decreased by $624 thousand compared to $5.5 million in the prior quarter, as higher loan originations resulted in an increase in the amount of compensation deferred as loan origination costs. This was offset in part by merger-related expenses during the quarter of $681 thousand, compared to $40 thousand for fourth quarter 2020 and none for first quarter 2020.

Income Taxes:

The Company's effective tax rate for first quarter 2021 was 28.6% compared to 29.0% for fourth quarter 2020 and 37.0% for first quarter 2020.

Balance Sheet:

Investment Securities:

Investment securities were $83.4 million at March 31, 2021, a decrease of $2.5 million from December 31, 2020 and $8.5 million from March 31, 2020. The decreases were due to principal paydowns. There were no portfolio additions in first quarter 2021, or in the fourth and first quarters 2020.

Loans Receivable:

Loans receivable (including loans held for sale) at March 31, 2021 was $1.19 billion, an increase of $87.0 million, or 7.9%, from December 31, 2020, and an increase of $228.0 million, or 23.7% from March 31, 2020.

We provided loan payment deferments to our commercial borrowers under the CARES Act. The first round of three months of loan deferments as of March 31, 2021 totaled $271.4 million, or 22.8% of the total loan portfolio. The borrowers on a majority of these loans resumed making their loan payments during the 2020 fourth and 2021 first quarter. Ten loans were still on payment deferment status as of March 31, 2021, which totaled $50.4 million in principal amount, or 4.2% of the total loan portfolio. We anticipate there may be additional loan payment 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 the SBA. However, loans originated from February 1, 2021 to September 30, 2021 qualify for six months of guaranteed payments not exceeding $9 thousand per month. Our weighted average loan-to-value ratio of Commercial Real Estate loans was 72.4% at March 31, 2021. Excluding SBA loans, our weighted average loan-to-value of CRE loans was 56.0%. For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 1Q 2021 Overview and COVID-19 update presentation.

Paycheck Protection Program (PPP):

PPP loans totaled $109.2 million at March 31, 2021. Net unearned fees as of March 31, 2021 was $2.9 million, which is being accreted to income based on a two-year contractual maturity. The SBA approved $29.2 million in PPP loan forgiveness applications processed in first quarter 2021. We believe it is likely many customers will apply for additional PPP funds and the Bank is actively taking applications at this time.

Allowance for Loan Losses and Asset Quality:

The allowance for loan losses at March 31, 2021 was $14.9 million, or 1.34% of portfolio loans, compared to $14.4 million, or 1.38% of portfolio loans, at December 31, 2020 and compared to $11.0 million, or 1.18% of portfolio loans, at March 31, 2020. Excluding PPP loans of $109.2 million, which are government guaranteed, the allowance for loan losses at March 31, 2021 was 1.48% compared to 1.51% and 1.18%, respectively, at December 31, 2020 and March 31, 2020. Non-performing loans as of March 31, 2021 were $1.3 million, down from $2.4 million at December 31, 2020. Loans with payment deferments are considered to be performing loans in accordance with regulatory guidance. Our coverage ratio of allowance for loan losses to nonperforming assets exceeded 1,100%. For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 1Q 2021 Overview and COVID-19 update presentation.

SBA Loans Held for Sale:

SBA loans held for sale at March 31, 2021 were $76.1 million, compared to $59.1 million at December 31, 2020 and $30.0 million at March 31, 2020. We continue to assess SBA loan sale premiums and plan to sell loans when we believe it is advantageous to do so. See comments under "Noninterest Income", and Table 7 for additional SBA loan origination and sale data.

Deposits:

Deposits were $1.19 billion at March 31, 2021, up $92.4 million, or 8.4% of total deposits, from December 31, 2020 and up $241.1 million, or 25.4% of total deposits, from March 31, 2020. Noninterest-bearing demand deposits ("DDAs") increased $73.5 million, or 21.9%, to $408.7 million at March 31, 2021 from December 31, 2020 and increased $197.6 million, or 93.6%, from March 31, 2020. DDAs were 34.3% of total deposits at March 31, 2021 compared to 30.5% at December 31, 2020 and 22.2% at March 31, 2020. Negotiable order of withdrawal ("NOW") and money market deposit accounts ("MMDAs") increased $10.2 million, or 3.9% to $270.5 million at March 31, 2021 from December 31, 2020 and increased $134.2 million, or 98.4%, from March 31, 2020. Time deposits increased $14.1 million, or 3.1%, at March 31, 2021 from December 31, 2020 and decreased $72.3 million, or 13.4%, from March 31, 2020. Time deposits at March 31, 2021 were $466.0 million, or 39.1% of total deposits, compared to $451.9 million, or 41.1% of total deposits, at December 31, 2020, and $538.3 million, or 56.6% of total deposits, at March 31, 2020. As noted above, we have been and will continue to focus on increasing demand deposits and reducing our cost of funds.

Borrowings:

Borrowings at March 31, 2021 consisted of $65.0 million of Federal Home Loan Bank of San Francisco ("FHLB-SF") advances, compared to $95.0 million of FHLB-SF advances and $10.0 million of Pacific Coast Bankers' Bank ("PCBB") borrowings at December 31, 2020, and compared to $85.0 million of FHLB-SF advances at March 31, 2020.

Capital:

Stockholders' equity was $165.1 million at March 31, 2021, representing an increase of $5.1 million, or 3.2%, over stockholders' equity of $160.0 million at December 31, 2020. Book value per share at March 31, 2021 was $16.11 compared with $15.61 at December 31, 2020, an increase of $0.50 per share or 3.2%.

All of our regulatory capital ratios 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, 2020, as shown on Table 11 in this press release. Importantly, our Common Equity Tier 1 risked-based capital at March 31, 2021 was 15.0% at the Company level and 14.98% 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.com under tab "About Us" and select "Investors Relations" to see 1Q 2021 Overview and COVID-19 update presentation.

FORWARD-LOOKING STATEMENTS:

This news release contains a number of forward-looking statements. These statements may typically 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 March, 31 December, 31 $ % March 31, $ % 2021 2020 Change Change 2020 Change Change

Interest income $ 14,372 $ 13,613 $ 759 5.6 % $ 14,473 $ (101 ) (0.7 %)

Interest expense 1,533 1,830 (297 ) (16.2 %) 3,981 (2,448 ) (61.5 %)

Net interest income 12,839 11,783 1,056 9.0 % 10,492 2,347 22.4 %

Provision for loan 500 1,600 (1,100 ) (68.8 %) 700 (200 ) (28.6 %)lossesNet interest income 12,339 10,183 2,156 21.2 % 9,792 2,547 26.0 %after provision forloan losses Gain on sale of 2,456 1,484 972 65.5 % 939 1,517 161.6 %loansGain (loss) on sale - - - - (6 ) 6 (100.0 %)of OREOSBA servicing fee 847 701 146 20.8 % 372 475 127.7 %income, netReversal of - 894 (894 ) (100.0 %) - - - valuation allowanceon servicing assetsService charges and 379 364 15 4.1 % 396 (17 ) (4.3 %)other incomeNoninterest income 3,682 3,443 239 6.9 % 1,701 1,981 116.5 %

Salaries and 4,853 5,477 (624 ) (11.4 %) 5,702 (849 ) (14.9 %)employee benefitsOccupancy and 979 936 43 4.6 % 946 33 3.5 %equipmentMarketing expense 287 133 154 115.8 % 458 (171 ) (37.3 %)

Professional 455 478 (23 ) (4.8 %) 435 20 4.6 %expenseMerger related 681 40 641 1602.5 % - 681 100.0 %expenseOther expenses 1,300 1,329 (29 ) (2.2 %) 1,394 (94 ) (6.7 %)

Noninterest expense 8,555 8,393 162 1.9 % 8,935 (380 ) (4.3 %)

Income before 7,466 5,233 2,233 42.7 % 2,558 4,908 191.9 %income tax expense Income tax expense 2,132 1,519 613 40.4 % 946 1,186 125.4 %

Net income $ 5,334 $ 3,714 $ 1,620 43.6 % $ 1,612 $ 3,722 230.9 %

Effective tax rate 28.6 % 29.0 % (0.5 %) (1.6 %) 37.0 % (8.4 %) (22.8 %)

Outstanding number 10,247,292 10,247,292 - - 10,237,310 9,982 0.1 %of shares Weighted average 10,247,292 10,247,292 - - 10,224,146 23,146 0.2 %shares for basicEPSWeighted average 10,300,518 10,285,410 15,108 0.1 % 10,327,730 (27,212 ) (0.3 %)shares for dilutedEPS Basic EPS $ 0.52 $ 0.36 $ 0.16 44.4 % $ 0.16 $ 0.36 225.0 %

Diluted EPS $ 0.52 $ 0.36 $ 0.16 44.4 % $ 0.16 $ 0.36 225.0 %

Return on average 1.58 % 1.07 % 0.51 % 47.7 % 0.58 % 1.00 % 172.4 %assetsReturn on average 13.26 % 9.32 % 3.94 % 42.3 % 4.31 % 8.95 % 207.7 %equity Efficiency ratio^1 51.78 % 55.12 % (3.34 %) (6.1 %) 73.28 % (21.5 %) (29.3 %)

Yield on 4.37 % 4.01 % 0.36 % 9.0 % 5.31 % (0.94 %) (17.7 %)interest-earningassets?Cost of funds 0.52 % 0.60 % (0.08 %) (13.3 %) 1.67 % (1.15 %) (68.9 %)

Cost of funds exc. 0.54 % 0.62 % (0.08 %) (12.9 %)SBA PPP loanfundingNet interest 3.90 % 3.48 % 0.42 % 12.1 % 3.86 % 0.04 % 1.0 %margin?Net interest margin 3.86 % 3.52 % 0.34 % 9.7 %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 estateowned operations to the sum of net interest income before provision forcredit losses and total noninterest income, less gains/(loss) on saleof securities, other-than-temporary impairment recovery/(loss) oninvestment securities and gain/(loss) from other real estate owned.? Amounts calculated on a fully taxable equivalent basis usingthe current statutory federal tax rateBALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2

(Dollars in thousands)March, 31December, 31$%March 31,$%2021

2020

ChangeChange2020

ChangeChangeASSETSCash and due from banks$

9,215

$

8,750

$

465

5.3

%

$

7,804

$

1,411

18.1

%

Interest-earning deposits at the FRB and other banks129,713

153,908

(24,195

)

(15.7

%)

113,880

15,833

13.9

%

Investment securities^183,409

85,914

(2,505

)

(2.9

%)

91,863

(8,454

)

(9.2

%)

Loans held-for-sale, at the lower of cost or fair value76,066

59,077

16,989

28.8

%

29,989

46,077

153.6

%

Loans receivable1,113,629

1,043,662

69,967

6.7

%

931,717

181,912

19.5

%

Allowance for loan losses(14,888

)

(14,366

)

(522

)

(3.6

%)

(11,034

)

(3,854

)

(34.9

%)

Loans receivable, net1,098,741

1,029,296

69,445

6.7

%

920,683

178,058

19.3

%

OREO-

-

-

-

364

(364

)

(100.0

%)

Restricted stock investments8,196

8,196

-

-

8,194

2

0.0

%

Servicing assets10,000

9,873

127

1.3

%

9,203

797

8.7

%

Other assets21,431

20,233

1,198

5.9

%

20,144

1,287

6.4

%

Total assets$

1,436,771

$

1,375,247

$

61,524

4.5

%

$

1,202,124

$

234,647

19.5

%

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

408,738

$

335,219

$

73,519

21.9

%

$

211,139

$

197,599

93.6

%

Interest-bearing782,778

763,906

18,872

2.5

%

739,285

43,493

5.9

%

Total deposits1,191,516

1,099,125

92,391

8.4

%

950,424

241,092

25.4

%

FHLB advances and other borrowing65,000

105,000

(40,000

)

(38.1

%)

85,000

(20,000

)

(23.5

%)

Other liabilities15,170

11,145

4,025

36.1

%

16,895

(1,725

)

(10.2

%)

Total liabilities1,271,686

1,215,270

56,416

4.6

%

1,052,319

219,367

20.8

%

Stockholders' Equity165,085

159,977

5,108

3.2

%

149,805

15,280

10.2

%

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,436,771

$

1,375,247

$

61,524

4.5

%

$

1,202,124

$

234,647

19.5

%

CAPITAL RATIOSLeverage ratioCompany11.89

%

11.56

%

0.33

%

2.9

%

13.17

%

(1.28

%)

(9.7

%)

Bank11.87

%

11.54

%

0.33

%

2.86

%

13.12

%

(1.25

%)

(9.5

%)

Common equity tier 1 risk-based capital ratioCompany15.00

%

15.01

%

(0.01

%)

(0.1

%)

14.82

%

0.18

%

1.2

%

Bank14.98

%

14.97

%

0.01

%

0.1

%

14.77

%

0.21

%

1.4

%

Tier 1 risk-based capital ratioCompany15.00

%

15.01

%

(0.01

%)

(0.1

%)

14.82

%

0.18

%

1.2

%

Bank14.98

%

14.97

%

0.01

%

0.1

%

14.77

%

0.21

%

1.4

%

Total risk-based capital ratioCompany16.25

%

16.26

%

(0.01

%)

(0.1

%)

16.01

%

0.24

%

1.5

%

Bank16.23

%

16.22

%

0.01

%

0.1

%

15.95

%

0.28

%

1.8

%

Book value per share$

16.11

$

15.61

$

0.50

3.2

%

$

14.63

$

1.48

10.1

%

Loan-to-Deposit (LTD) ratio93.46

%

94.95

%

(1.49

%)

(1.6

%)

98.03

%

(4.57

%)

(4.7

%)

Nonperforming assets1,347

2,361

(1,014

)

(42.9

%)

7,265

$

(5,918

)

(81.5

%)

Nonperforming assets as a % of loans receivable0.12

%

0.23

%

(0.11

%)

(47.8

%)

0.74

%

(0.62

%)

(83.8

%)

ALLL as a % of loans receivable1.34

%

1.38

%

(0.04

%)

(2.9

%)

1.18

%

0.16

%

13.6

%

ALLL as a % of loans receivable exc. SBA PPP loans1.48

%

1.51

%

(0.03

%)

^1 Includes AFS and HTMBALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2

(Dollars in thousands) March, 31 December, 31 $ % March 31, $ % 2021 2020 Change Change 2020 Change Change

ASSETS Cash and due from $ 9,215 $ 8,750 $ 465 5.3 % $ 7,804 $ 1,411 18.1 % banks Interest-earning 129,713 153,908 (24,195 ) (15.7 %) 113,880 15,833 13.9 % deposits at the FRB and other banks Investment 83,409 85,914 (2,505 ) (2.9 %) 91,863 (8,454 ) (9.2 %) securities^1 Loans held-for-sale, at 76,066 59,077 16,989 28.8 % 29,989 46,077 153.6 % the lower of cost or fair value Loans receivable 1,113,629 1,043,662 69,967 6.7 % 931,717 181,912 19.5 %

Allowance for loan (14,888 ) (14,366 ) (522 ) (3.6 %) (11,034 ) (3,854 ) (34.9 %) losses Loans receivable, 1,098,741 1,029,296 69,445 6.7 % 920,683 178,058 19.3 % net OREO - - - - 364 (364 ) (100.0 %)

Restricted stock 8,196 8,196 - - 8,194 2 0.0 % investments Servicing assets 10,000 9,873 127 1.3 % 9,203 797 8.7 %

Other assets 21,431 20,233 1,198 5.9 % 20,144 1,287 6.4 %

Total assets $ 1,436,771 $ 1,375,247 $ 61,524 4.5 % $ 1,202,124 $ 234,647 19.5 %

LIABILITIES ANDSTOCKHOLDERS' EQUITY Noninterest-bearing $ 408,738 $ 335,219 $ 73,519 21.9 % $ 211,139 $ 197,599 93.6 %

Interest-bearing 782,778 763,906 18,872 2.5 % 739,285 43,493 5.9 %

Total deposits 1,191,516 1,099,125 92,391 8.4 % 950,424 241,092 25.4 %

FHLB advances and 65,000 105,000 (40,000 ) (38.1 %) 85,000 (20,000 ) (23.5 %) other borrowing Other liabilities 15,170 11,145 4,025 36.1 % 16,895 (1,725 ) (10.2 %)

Total liabilities 1,271,686 1,215,270 56,416 4.6 % 1,052,319 219,367 20.8 %

Stockholders' 165,085 159,977 5,108 3.2 % 149,805 15,280 10.2 % EquityTOTAL LIABILITIES & $ 1,436,771 $ 1,375,247 $ 61,524 4.5 % $ 1,202,124 $ 234,647 19.5 %STOCKHOLDERS' EQUITY CAPITAL RATIOS Leverage ratio Company 11.89 % 11.56 % 0.33 % 2.9 % 13.17 % (1.28 %) (9.7 %)

Bank 11.87 % 11.54 % 0.33 % 2.86 % 13.12 % (1.25 %) (9.5 %)

Common equity tier 1 risk-based capital ratio Company 15.00 % 15.01 % (0.01 %) (0.1 %) 14.82 % 0.18 % 1.2 %

Bank 14.98 % 14.97 % 0.01 % 0.1 % 14.77 % 0.21 % 1.4 %

Tier 1 risk-based capital ratio Company 15.00 % 15.01 % (0.01 %) (0.1 %) 14.82 % 0.18 % 1.2 %

Bank 14.98 % 14.97 % 0.01 % 0.1 % 14.77 % 0.21 % 1.4 %

Total risk-based capital ratio Company 16.25 % 16.26 % (0.01 %) (0.1 %) 16.01 % 0.24 % 1.5 %

Bank 16.23 % 16.22 % 0.01 % 0.1 % 15.95 % 0.28 % 1.8 %

Book value per $ 16.11 $ 15.61 $ 0.50 3.2 % $ 14.63 $ 1.48 10.1 % share Loan-to-Deposit 93.46 % 94.95 % (1.49 %) (1.6 %) 98.03 % (4.57 %) (4.7 %) (LTD) ratio Nonperforming 1,347 2,361 (1,014 ) (42.9 %) 7,265 $ (5,918 ) (81.5 %) assets Nonperforming 0.12 % 0.23 % (0.11 %) (47.8 %) 0.74 % (0.62 %) (83.8 %) assets as a % of loans receivable ALLL as a % of 1.34 % 1.38 % (0.04 %) (2.9 %) 1.18 % 0.16 % 13.6 % loans receivable ALLL as a % of 1.48 % 1.51 % (0.03 %) 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 EndedMarch, 31December, 31September 30,June 30,March 31,2021

2020

2020

2020

2020

Interest income$

14,372

$

13,613

$

13,212

$

13,206

$

14,473

Interest expense1,533

1,830

2,558

3,342

3,981

Net interest income12,839

11,783

10,654

9,864

10,492

Provision for loan losses500

1,600

1,600

1,600

700

Net interest income after provision for loan losses12,339

10,183

9,054

8,264

9,792

Gain on sale of loans2,456

1,484

1,662

509

939

Gain (loss) on sale of OREO-

-

-

9

(6

)

SBA servicing fee income, net847

701

948

738

372

Reversal of valuation allowance on servicing assets-

894

-

-

-

Service charges and other income379

364

385

251

396

Noninterest income3,682

3,443

2,995

1,507

1,701

Salaries and employee benefits4,853

5,477

4,948

4,617

5,702

Occupancy and equipment979

936

938

943

946

Marketing expense287

133

265

279

458

Professional expense455

478

503

500

435

Merger related expense681

40

58

-

-

Other expenses1,300

1,329

1,309

1,168

1,394

Noninterest expense8,555

8,393

8,021

7,507

8,935

Income before income tax expense7,466

5,233

4,028

2,264

2,558

Income tax expense2,132

1,519

1,125

612

946

Net income$

5,334

$

3,714

$

2,903

$

1,652

$

1,612

Effective tax rate28.6

%

29.0

%

27.9

%

27.0

%

37.0

%

Outstanding number of shares10,247,292

10,247,292

10,247,292

10,237,310

10,237,310

Weighted average shares for basic EPS10,247,292

10,247,292

10,244,037

10,237,310

10,224,146

Weighted average shares for diluted EPS10,300,518

10,285,410

10,273,148

10,276,637

10,327,730

Basic EPS$

0.52

$

0.36

$

0.28

$

0.16

$

0.16

Diluted EPS$

0.52

$

0.36

$

0.28

$

0.16

$

0.16

FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3(Dollars in thousands, except per share amounts) Three Months Ended March, 31 December, 31 September 30, June 30, March 31, 2021 2020 2020 2020 2020

Interest $ 14,372 $ 13,613 $ 13,212 $ 13,206 $ 14,473 incomeInterest 1,533 1,830 2,558 3,342 3,981 expenseNet interest 12,839 11,783 10,654 9,864 10,492 income Provision for 500 1,600 1,600 1,600 700 loan lossesNet interestincome after 12,339 10,183 9,054 8,264 9,792 provision forloan losses Gain on sale 2,456 1,484 1,662 509 939 of loansGain (loss) - - - 9 (6 )on sale ofOREOSBA servicing 847 701 948 738 372 fee income,netReversal ofvaluation - 894 - - - allowance onservicingassetsService 379 364 385 251 396 charges andother incomeNoninterest 3,682 3,443 2,995 1,507 1,701 income Salaries and 4,853 5,477 4,948 4,617 5,702 employeebenefitsOccupancy and 979 936 938 943 946 equipmentMarketing 287 133 265 279 458 expenseProfessional 455 478 503 500 435 expenseMerger 681 40 58 - - relatedexpenseOther 1,300 1,329 1,309 1,168 1,394 expensesNoninterest 8,555 8,393 8,021 7,507 8,935 expense Income before 7,466 5,233 4,028 2,264 2,558 income taxexpense Income tax 2,132 1,519 1,125 612 946 expense Net income $ 5,334 $ 3,714 $ 2,903 $ 1,652 $ 1,612

Effective tax 28.6 % 29.0 % 27.9 % 27.0 % 37.0 %rate Outstanding 10,247,292 10,247,292 10,247,292 10,237,310 10,237,310 number ofshares Weightedaverage 10,247,292 10,247,292 10,244,037 10,237,310 10,224,146 shares forbasic EPSWeightedaverage 10,300,518 10,285,410 10,273,148 10,276,637 10,327,730 shares fordiluted EPS Basic EPS $ 0.52 $ 0.36 $ 0.28 $ 0.16 $ 0.16

Diluted EPS $ 0.52 $ 0.36 $ 0.28 $ 0.16 $ 0.16

QUARTERLY SALARIES BENEFIT METRICS (Unaudited) - Table 4(Dollars in thousands)At or for the Three Months EndedMarch, 31December, 31September 30,June 30,March 31,2021

2020

2020

2020

2020

Salaries and benefits$

4,853

$

5,477

$

4,948

$

4,617

$

5,702

FTE at the end of period186

183

179

191

194

Average FTE during the period187

184

181

193

192

Salaries and benefits/average FTE^1$

105

$

118

$

109

$

96

$

119

Salaries and benefits/average assets^11.44

%

1.58

%

1.45

%

1.44

%

2.03

%

Noninterest expense/average assets^12.54

%

2.42

%

2.34

%

2.35

%

3.19

%

1 Annualized QUARTERLY SALARIES BENEFIT METRICS (Unaudited) - Table 4(Dollars in thousands) At or for the Three Months Ended March, 31 December, September June 30, March 31, 31 30, 2021 2020 2020 2020 2020

Salaries and $ 4,853 $ 5,477 $ 4,948 $ 4,617 $ 5,702 benefitsFTE at the end of 186 183 179 191 194 periodAverage FTE during 187 184 181 193 192 the periodSalaries and $ 105 $ 118 $ 109 $ 96 $ 119 benefits/averageFTE^1Salaries and 1.44 % 1.58 % 1.45 % 1.44 % 2.03 %benefits/averageassets^1Noninterest 2.54 % 2.42 % 2.34 % 2.35 % 3.19 %expense/averageassets^1 ^1 AnnualizedFIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5(Dollars in thousands)March, 31December, 31September 30,June 30,March 31,2021

2020

2020

2019

2020

ASSETSCash and due from banks$

9,215

$

8,750

$

8,030

$

9,043

$

7,804

Interest-earning deposits at the FRB and other banks129,713

153,908

212,279

179,519

113,880

Investment securities^183,409

85,914

88,784

91,091

91,863

Loans held-for-sale, at the lower of cost or fair value76,066

59,077

53,755

32,264

29,989

Loans receivable1,113,629

1,043,662

1,011,867

1,005,128

931,717

Allowance for loan losses(14,888

)

(14,366

)

(13,614

)

(12,283

)

(11,034

)

Loans receivable, net1,098,741

1,029,296

998,253

992,845

920,683

OREO-

-

-

-

364

Restricted stock investments8,196

8,196

8,196

8,196

8,194

Servicing assets10,000

9,873

9,043

8,944

9,203

Other assets21,431

20,233

21,064

21,383

20,144

Total assets$

1,436,771

$

1,375,247

$

1,399,404

$

1,343,285

$

1,202,124

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

408,738

$

335,219

$

363,350

$

295,003

$

211,139

Interest-bearing782,778

763,906

738,040

732,647

739,285

Total deposits1,191,516

1,099,125

1,101,390

1,027,650

950,424

FHLB advances65,000

105,000

128,671

148,671

85,000

Other liabilities15,170

11,145

13,295

14,208

16,895

Total liabilities1,271,686

1,215,270

1,243,356

1,190,529

1,052,319

Stockholders' Equity165,085

159,977

156,048

152,756

149,805

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,436,771

$

1,375,247

$

1,399,404

$

1,343,285

$

1,202,124

^1 Includes AFS and HTMFIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5(Dollars in thousands) March, 31 December, 31 September 30, June 30, March 31, 2021 2020 2020 2019 2020

ASSETS Cash and due from $ 9,215 $ 8,750 $ 8,030 $ 9,043 $ 7,804 banks Interest-earning 129,713 153,908 212,279 179,519 113,880 deposits at the FRB and other banks Investment 83,409 85,914 88,784 91,091 91,863 securities^1 Loans held-for-sale, at 76,066 59,077 53,755 32,264 29,989 the lower of cost or fair value Loans receivable 1,113,629 1,043,662 1,011,867 1,005,128 931,717

Allowance for loan (14,888 ) (14,366 ) (13,614 ) (12,283 ) (11,034 ) losses Loans receivable, 1,098,741 1,029,296 998,253 992,845 920,683 net OREO - - - - 364

Restricted stock 8,196 8,196 8,196 8,196 8,194 investments Servicing assets 10,000 9,873 9,043 8,944 9,203

Other assets 21,431 20,233 21,064 21,383 20,144

Total assets $ 1,436,771 $ 1,375,247 $ 1,399,404 $ 1,343,285 $ 1,202,124

LIABILITIES ANDSTOCKHOLDERS' EQUITY Noninterest-bearing $ 408,738 $ 335,219 $ 363,350 $ 295,003 $ 211,139

Interest-bearing 782,778 763,906 738,040 732,647 739,285

Total deposits 1,191,516 1,099,125 1,101,390 1,027,650 950,424

FHLB advances 65,000 105,000 128,671 148,671 85,000

Other liabilities 15,170 11,145 13,295 14,208 16,895

Total liabilities 1,271,686 1,215,270 1,243,356 1,190,529 1,052,319

Stockholders' 165,085 159,977 156,048 152,756 149,805 EquityTOTAL LIABILITIES & $ 1,436,771 $ 1,375,247 $ 1,399,404 $ 1,343,285 $ 1,202,124 STOCKHOLDERS' EQUITY ^1 Includes AFS andHTMFIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands)March 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020Balance%Balance%Balance%Balance%Balance%Construction$

15,858

1.4

%

$

13,685

1.3

%

$

18,236

1.8

%

$

14,649

1.5

%

$

12,607

1.4

%

Commercial real estate855,861

76.9

%

820,355

78.6

%

779,062

77.0

%

769,563

76.6

%

768,539

82.5

%

Commercial and industrial237,865

21.4

%

205,883

19.7

%

211,298

20.9

%

215,362

21.4

%

143,117

15.4

%

Consumer3,504

0.3

%

2,439

0.2

%

2,751

0.3

%

5,646

0.6

%

5,056

0.5

%

Gross loans1,113,088

100.0

%

1,042,362

99.9

%

1,011,347

99.9

%

1,005,220

100.0

%

929,319

99.7

%

Net deferred loan fees/costs541

0.0

%

1,300

0.1

%

520

0.1

%

(92

)

0.0

%

2,398

0.3

%

Loans receivable$

1,113,629

100.0

%

$

1,043,662

100.0

%

$

1,011,867

100.0

%

$

1,005,128

100.0

%

$

931,717

100.0

%

Loans held-for-sale$

76,066

$

59,077

$

53,755

$

32,264

$

29,989

Loans receivable, including loans held-for-sale$

1,189,695

$

1,102,739

$

1,065,622

$

1,037,392

$

961,706

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Balance % Balance % Balance % Balance % Balance % Construction $ 15,858 1.4 % $ 13,685 1.3 % $ 18,236 1.8 % $ 14,649 1.5 % $ 12,607 1.4 %

Commercial 855,861 76.9 % 820,355 78.6 % 779,062 77.0 % 769,563 76.6 % 768,539 82.5 %real estateCommercial 237,865 21.4 % 205,883 19.7 % 211,298 20.9 % 215,362 21.4 % 143,117 15.4 %andindustrialConsumer 3,504 0.3 % 2,439 0.2 % 2,751 0.3 % 5,646 0.6 % 5,056 0.5 %

Gross loans 1,113,088 100.0 % 1,042,362 99.9 % 1,011,347 99.9 % 1,005,220 100.0 % 929,319 99.7 %

Net deferred 541 0.0 % 1,300 0.1 % 520 0.1 % (92 ) 0.0 % 2,398 0.3 %loan fees/costsLoans $ 1,113,629 100.0 % $ 1,043,662 100.0 % $ 1,011,867 100.0 % $ 1,005,128 100.0 % $ 931,717 100.0 %receivable Loans $ 76,066 $ 59,077 $ 53,755 $ 32,264 $ 29,989held-for-saleLoansreceivable, $ 1,189,695 $ 1,102,739 $ 1,065,622 $ 1,037,392 $ 961,706includingloansheld-for-saleSBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7(Dollars in thousands)Three Months EndedMarch 31,December 31,September 30,June 30,March 31,2021

2020

2020

2020

2020

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

59,077

$

53,755

$

32,264

$

29,988

$

28,826

SBA loans originated/transferred from/to held-for-investment during the quarter/year48,152

26,837

46,731

12,497

20,479

SBA loans sold during the quarter/year(30,238

)

(20,382

)

(24,866

)

(9,832

)

(18,530

)

SBA loans principal payment, net of advance(925

)

(1,133

)

(374

)

(389

)

(787

)

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

76,066

$

59,077

$

53,755

$

32,264

$

29,988

Gain on sale of SBA loans$

2,456

$

1,484

$

1,662

$

509

$

939

Premium on sale (weighted average)10.9

%

10.7

%

9.8

%

8.6

%

8.0

%

SBA loan production$

123,762

$

37,116

$

59,957

$

113,782

$

31,794

Non-PPP loans71,204

37,116

59,009

18,356

31,794

PPP loans52,558

-

948

95,426

-

SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7(Dollars in thousands) Three Months Ended March 31, December September June 30, March 31, 31, 30, 2021 2020 2020 2020 2020

SBA loansheld-for-sale $ 59,077 $ 53,755 $ 32,264 $ 29,988 $ 28,826 at beginningof thequarter/yearSBA loansoriginated/transferredfrom/toheld-for-investment 48,152 26,837 46,731 12,497 20,479 during thequarter/yearSBA loanssold during (30,238 ) (20,382 ) (24,866 ) (9,832 ) (18,530 )the quarter/yearSBA loansprincipal (925 ) (1,133 ) (374 ) (389 ) (787 )payment, netof advanceSBA loansheld-for-sale $ 76,066 $ 59,077 $ 53,755 $ 32,264 $ 29,988 at end of thequarter/year Gain on sale $ 2,456 $ 1,484 $ 1,662 $ 509 $ 939 of SBA loansPremium onsale 10.9 % 10.7 % 9.8 % 8.6 % 8.0 %(weightedaverage) SBA loan $ 123,762 $ 37,116 $ 59,957 $ 113,782 $ 31,794 productionNon-PPP loans 71,204 37,116 59,009 18,356 31,794

PPP loans 52,558 - 948 95,426 -

SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8(Dollars in thousands)Three Months EndedMarch 31,December 31,September 30,June 30,March 31,2021

2020

2020

2020

2020

SBA servicing assets @ beginning of the quarter/year$

9,873

$

9,043

$

8,944

$

9,203

$

9,697

Newly added SBA servicing assets from SBA loans sold635

441

523

197

383

Regular quarterly/annual servicing assets amortization(358

)

(392

)

(384

)

(383

)

(388

)

SBA servicing assets amortized from SBA loans paid off/charged off(150

)

(113

)

(40

)

(73

)

(489

)

Subtotal before impairment10,000

8,979

9,043

8,944

9,203

Reversal of valuation allowance on servicing assets-

894

-

-

-

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

10,000

$

9,873

$

9,043

$

8,944

$

9,203

SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8(Dollars in thousands) Three Months Ended March 31, December September June 30, March 31, 31, 30, 2021 2020 2020 2020 2020

SBA servicingassets @ $ 9,873 $ 9,043 $ 8,944 $ 9,203 $ 9,697 beginning of thequarter/year Newly added SBAservicing assets 635 441 523 197 383 from SBA loanssoldRegular quarterly/annual servicing (358 ) (392 ) (384 ) (383 ) (388 )assetsamortizationSBA servicingassets amortized (150 ) (113 ) (40 ) (73 ) (489 )from SBA loanspaid off/chargedoff Subtotal before 10,000 8,979 9,043 8,944 9,203 impairment Reversal ofvaluation - 894 - - - allowance onservicing assets SBA servicingassets @ the end $ 10,000 $ 9,873 $ 9,043 $ 8,944 $ 9,203 of the quarter/yearFIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands)March 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020Balance%Balance%Balance%Balance%Balance%Noninterest-bearing demand$

408,738

34.3

%

$

335,219

30.5

%

$

363,350

33.0

%

$

295,003

28.7

%

$

211,139

22.2

%

NOW & MMDA270,531

22.7

%

260,374

23.7

%

229,730

20.9

%

192,950

18.8

%

136,356

14.3

%

Savings46,280

3.9

%

51,659

4.7

%

61,631

5.6

%

68,244

6.6

%

64,659

6.8

%

TCDs of $250K and under226,611

19.0

%

232,192

21.1

%

230,230

20.9

%

241,718

23.5

%

273,624

28.8

%

TCDs of $250K over151,094

12.7

%

150,143

13.7

%

146,911

13.3

%

139,197

13.5

%

154,108

16.2

%

Wholesale TCDs88,262

7.4

%

69,538

6.3

%

69,538

6.3

%

90,538

8.8

%

110,538

11.6

%

Total Deposits$

1,191,516

100.0

%

$

1,099,125

100.0

%

$

1,101,390

100.0

%

$

1,027,650

100.0

%

$

950,424

100.0

%

Recap:Noninterest-bearing demand$

408,738

34.3

%

$

335,219

30.5

%

$

363,350

33.0

%

$

295,003

28.7

%

$

211,139

22.2

%

NOW & MMDA270,531

22.7

%

260,374

23.7

%

229,730

20.9

%

192,950

18.8

%

136,356

14.3

%

Savings46,280

3.9

%

51,659

4.7

%

61,631

5.6

%

68,244

6.6

%

64,659

6.8

%

TCDs of $250K and under226,611

19.0

%

232,192

21.1

%

230,230

20.9

%

241,718

23.5

%

273,624

28.8

%

Core Deposits952,160

79.9

%

879,444

80.0

%

884,941

80.3

%

797,915

77.6

%

685,778

72.2

%

TCDs of $250K over151,094

12.7

%

150,143

13.7

%

146,911

13.3

%

139,197

13.5

%

154,108

16.2

%

Wholesale TCDs88,262

7.4

%

69,538

6.3

%

69,538

6.3

%

90,538

8.8

%

110,538

11.6

%

Noncore Deposits239,356

20.1

%

219,681

20.0

%

216,449

19.7

%

229,735

22.4

%

264,646

27.8

%

Total Deposits$

1,191,516

100.0

%

$

1,099,125

100.0

%

$

1,101,390

100.0

%

$

1,027,650

100.0

%

$

950,424

100.0

%

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands) March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Balance % Balance % Balance % Balance % Balance % Noninterest-bearing $ 408,738 34.3 % $ 335,219 30.5 % $ 363,350 33.0 % $ 295,003 28.7 % $ 211,139 22.2 %demandNOW & MMDA 270,531 22.7 % 260,374 23.7 % 229,730 20.9 % 192,950 18.8 % 136,356 14.3 %

Savings 46,280 3.9 % 51,659 4.7 % 61,631 5.6 % 68,244 6.6 % 64,659 6.8 %

TCDs of $250K and under 226,611 19.0 % 232,192 21.1 % 230,230 20.9 % 241,718 23.5 % 273,624 28.8 %

TCDs of $250K over 151,094 12.7 % 150,143 13.7 % 146,911 13.3 % 139,197 13.5 % 154,108 16.2 %

Wholesale TCDs 88,262 7.4 % 69,538 6.3 % 69,538 6.3 % 90,538 8.8 % 110,538 11.6 %

Total Deposits $ 1,191,516 100.0 % $ 1,099,125 100.0 % $ 1,101,390 100.0 % $ 1,027,650 100.0 % $ 950,424 100.0 %

Recap:Noninterest-bearing $ 408,738 34.3 % $ 335,219 30.5 % $ 363,350 33.0 % $ 295,003 28.7 % $ 211,139 22.2 %demandNOW & MMDA 270,531 22.7 % 260,374 23.7 % 229,730 20.9 % 192,950 18.8 % 136,356 14.3 %

Savings 46,280 3.9 % 51,659 4.7 % 61,631 5.6 % 68,244 6.6 % 64,659 6.8 %

TCDs of $250K and under 226,611 19.0 % 232,192 21.1 % 230,230 20.9 % 241,718 23.5 % 273,624 28.8 %

Core Deposits 952,160 79.9 % 879,444 80.0 % 884,941 80.3 % 797,915 77.6 % 685,778 72.2 %

TCDs of $250K over 151,094 12.7 % 150,143 13.7 % 146,911 13.3 % 139,197 13.5 % 154,108 16.2 %

Wholesale TCDs 88,262 7.4 % 69,538 6.3 % 69,538 6.3 % 90,538 8.8 % 110,538 11.6 %

Noncore Deposits 239,356 20.1 % 219,681 20.0 % 216,449 19.7 % 229,735 22.4 % 264,646 27.8 %

Total Deposits $ 1,191,516 100.0 % $ 1,099,125 100.0 % $ 1,101,390 100.0 % $ 1,027,650 100.0 % $ 950,424 100.0 %

SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10(Dollars in thousands)1st Qtr.4th Qtr.3rd Qtr.2nd Qtr.1st Qtr.2021

2020

2020

2020

2020

Allowance for Loan LossesBalance at beginning of period$

14,366

$

13,614

$

12,283

$

11,034

$

10,596

Provision for loan losses500

1,600

1,600

1,600

700

Charge-offs(2

)

(907

)

(292

)

(359

)

(284

)

Recoveries24

59

23

8

22

Balance at the end of period$

14,888

$

14,366

$

13,614

$

12,283

$

11,034

Nonperforming Assets:^1Over 90 days still accruing$

-

$

2

$

200

$

-

$

-

Nonaccrual loans1,347

2,359

3,911

4,189

6,901

Total nonperforming loans1,347

2,361

4,111

4,189

6,901

Other real estate owned-

-

-

-

364

Total nonperforming assets$

1,347

$

2,361

$

4,111

$

4,189

$

7,265

Classified Assets:^1Substandard$

9,843

$

18,920

$

20,579

$

9,909

$

13,301

Doubtful-

68

-

-

-

Loss-

-

-

-

-

Total classified loans$

9,843

$

18,988

$

20,579

$

9,909

$

13,301

Other real estate owned-

-

-

-

364

Total classified assets$

9,843

$

18,988

$

20,579

$

9,909

$

13,665

Performing TDR loans:$

2,516

$

2,847

$

1,072

$

1,073

$

508

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

1,681

$

3,095

$

714

$

721

$

2,172

90 days or more past due and still accruing-

2

200

-

-

Nonaccrual1,347

2,359

3,911

4,189

6,901

Total delinquent loans$

3,028

$

5,456

$

4,825

$

4,910

$

9,073

Asset Quality Ratios:Net (recoveries) charge-offs to average loans?(0.01

%)

0.32

%

0.10

%

0.14

%

0.11

%

Nonaccrual loans to loans receivable0.12

%

0.23

%

0.39

%

0.42

%

0.74

%

Nonperforming loans to loans receivable0.12

%

0.23

%

0.41

%

0.42

%

0.74

%

Nonperforming assets to total assets0.09

%

0.17

%

0.29

%

0.31

%

0.60

%

Classified loans to loans receivable0.88

%

1.82

%

2.03

%

0.99

%

1.43

%

Classified loans to Tier 1 and ALLL5.47

%

10.89

%

12.13

%

6.00

%

8.27

%

Classified assets to total assets0.69

%

1.38

%

1.47

%

0.74

%

1.14

%

Classified assets to Tier 1 and ALLL5.47

%

10.89

%

12.13

%

6.00

%

8.50

%

ALLL to loans receivable1.34

%

1.38

%

1.35

%

1.22

%

1.18

%

ALLL to loans receivable exc. SBA PPP loans1.48

%

1.51

%

1.48

%

1.34

%

1.18

%

ALLL to nonaccrual loans1105.27

%

608.99

%

348.10

%

293.22

%

159.89

%

ALLL to nonperforming loans1105.27

%

608.47

%

331.16

%

293.22

%

159.89

%

ALLL to nonperforming assets1105.27

%

608.47

%

331.16

%

293.22

%

151.88

%

Texas ratio ?0.75

%

1.35

%

2.42

%

2.54

%

4.52

%

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) 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 2021 2020 2020 2020 2020

Allowance forLoan LossesBalance at $ 14,366 $ 13,614 $ 12,283 $ 11,034 $ 10,596 beginning ofperiodProvision for 500 1,600 1,600 1,600 700 loan lossesCharge-offs (2 ) (907 ) (292 ) (359 ) (284 )

Recoveries 24 59 23 8 22

Balance at $ 14,888 $ 14,366 $ 13,614 $ 12,283 $ 11,034 the end ofperiod NonperformingAssets:^1Over 90 days $ - $ 2 $ 200 $ - $ - stillaccruingNonaccrual 1,347 2,359 3,911 4,189 6,901 loansTotal 1,347 2,361 4,111 4,189 6,901 nonperformingloans Other real - - - - 364 estate ownedTotal $ 1,347 $ 2,361 $ 4,111 $ 4,189 $ 7,265 nonperformingassets ClassifiedAssets:^1Substandard $ 9,843 $ 18,920 $ 20,579 $ 9,909 $ 13,301

Doubtful - 68 - - -

Loss - - - - -

Total $ 9,843 $ 18,988 $ 20,579 $ 9,909 $ 13,301 classifiedloans Other real - - - - 364 estate ownedTotal $ 9,843 $ 18,988 $ 20,579 $ 9,909 $ 13,665 classifiedassets Performing $ 2,516 $ 2,847 $ 1,072 $ 1,073 $ 508 TDR loans: DelinquentLoans:^1Loans 30-89 $ 1,681 $ 3,095 $ 714 $ 721 $ 2,172 days past due90 days ormore past due - 2 200 - - and stillaccruingNonaccrual 1,347 2,359 3,911 4,189 6,901

Total $ 3,028 $ 5,456 $ 4,825 $ 4,910 $ 9,073 delinquentloans Asset QualityRatios:Net(recoveries) (0.01 %) 0.32 % 0.10 % 0.14 % 0.11 %charge-offsto averageloans?Nonaccrualloans to 0.12 % 0.23 % 0.39 % 0.42 % 0.74 %loansreceivableNonperformingloans to 0.12 % 0.23 % 0.41 % 0.42 % 0.74 %loansreceivableNonperforming 0.09 % 0.17 % 0.29 % 0.31 % 0.60 %assets tototal assetsClassifiedloans to 0.88 % 1.82 % 2.03 % 0.99 % 1.43 %loansreceivableClassified 5.47 % 10.89 % 12.13 % 6.00 % 8.27 %loans to Tier1 and ALLLClassified 0.69 % 1.38 % 1.47 % 0.74 % 1.14 %assets tototal assetsClassifiedassets to 5.47 % 10.89 % 12.13 % 6.00 % 8.50 %Tier 1 andALLLALLL to loans 1.34 % 1.38 % 1.35 % 1.22 % 1.18 %receivableALLL to loansreceivable 1.48 % 1.51 % 1.48 % 1.34 % 1.18 %exc. SBA PPPloansALLL to 1105.27 % 608.99 % 348.10 % 293.22 % 159.89 %nonaccrualloansALLL to 1105.27 % 608.47 % 331.16 % 293.22 % 159.89 %nonperformingloansALLL to 1105.27 % 608.47 % 331.16 % 293.22 % 151.88 %nonperformingassetsTexas ratio ? 0.75 % 1.35 % 2.42 % 2.54 % 4.52 %

^1 Net of SBA guaranteed balance^2 Includes loans held-for-sale^3 Nonperforming assets divided by tangible common equity and ALLLFIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11Well CapitalizedAdequately CapitalizedMarch 31,December 31,September 30,June 30,March 31,RegulatoryBASEL IIIRequirementFully Phased In2021

2020

2020

2020

2020

Leverage ratioCompanyN/A

N/A

11.89

%

11.56

%

11.76

%

11.98

%

13.17

%

Bank5.00

%

4.00

%

11.87

%

11.54

%

11.72

%

11.94

%

13.12

%

Common equity tier 1 risk-based capital ratioCompanyN/A

N/A

15.00

%

15.01

%

15.24

%

15.23

%

14.82

%

Bank6.50

%

7.00

%

14.98

%

14.97

%

15.20

%

15.18

%

14.77

%

Tier 1 risk-based capital ratioCompanyN/A

N/A

15.00

%

15.01

%

15.24

%

15.23

%

14.82

%

Bank8.00

%

8.50

%

14.98

%

14.97

%

15.20

%

15.18

%

14.77

%

Total risk-based capital ratioCompanyN/A

N/A

16.25

%

16.26

%

16.50

%

16.48

%

16.01

%

Bank10.00

%

10.50

%

16.23

%

16.22

%

16.45

%

16.43

%

15.95

%

Common equity/total assets11.49

%

11.63

%

11.15

%

11.37

%

12.46

%

Common equity per share$

16.11

$

15.61

$

15.23

$

14.92

$

14.63

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11 Well Adequately March 31, December September June 30, March 31, Capitalized Capitalized 31, 30, Regulatory BASEL III Requirement Fully 2021 2020 2020 2020 2020 Phased In LeverageratioCompany N/A N/A 11.89 % 11.56 % 11.76 % 11.98 % 13.17 %

Bank 5.00 % 4.00 % 11.87 % 11.54 % 11.72 % 11.94 % 13.12 %

Commonequitytier 1risk-basedcapitalratioCompany N/A N/A 15.00 % 15.01 % 15.24 % 15.23 % 14.82 %

Bank 6.50 % 7.00 % 14.98 % 14.97 % 15.20 % 15.18 % 14.77 %

Tier 1risk-basedcapitalratioCompany N/A N/A 15.00 % 15.01 % 15.24 % 15.23 % 14.82 %

Bank 8.00 % 8.50 % 14.98 % 14.97 % 15.20 % 15.18 % 14.77 %

Totalrisk-basedcapitalratioCompany N/A N/A 16.25 % 16.26 % 16.50 % 16.48 % 16.01 %

Bank 10.00 % 10.50 % 16.23 % 16.22 % 16.45 % 16.43 % 15.95 %

Commonequity/ 11.49 % 11.63 % 11.15 % 11.37 % 12.46 %totalassetsCommon $ 16.11 $ 15.61 $ 15.23 $ 14.92 $ 14.63 equity pershareMARGIN ANALYSIS (Unaudited) -Table 12(Dollars in thousands)Three Months EndedMarch 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020Avg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1$

1,138,134

$

13,837

4.93

%

$

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

%

Investment securities?84,679

448

2.15

%

87,818

474

2.15

%

90,450

471

2.07

%

91,401

546

2.40

%

94,375

581

2.48

%

Interest-earning deposits at the FRB and other banks108,127

36

0.14

%

191,703

59

0.12

%

186,678

58

0.12

%

137,945

45

0

55,222

188

1.37

%

Other earning assets8,196

97

4.80

%

8,196

81

3.93

%

8,196

80

3.88

%

8,195

93

4.56

%

8,194

122

5.99

%

Total interest-earning assets ?1,339,136

14,418

4.37

%

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

%

Total interest-earning assets exc. SBA PPP loans?1,241,306

13,269

4.34

%

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 banks10,025

10,234

10,685

8,224

9,056

Other noninterest-earning assets31,156

28,903

31,216

32,285

30,050

Total noninterest-earning assets41,181

39,137

41,901

40,509

39,106

Less: Allowance for loan losses(14,381

)

(13,505

)

(12,293

)

(10,931

)

(10,594

)

TOTAL ASSETS$

1,365,936

$

1,379,717

$

1,361,610

$

1,285,715

$

1,127,450

INTEREST-BEARING DEPOSITSInterest-bearing demand$

15,813

$

2

0.05

%

$

11,444

$

4

0.14

%

$

11,248

$

4

0.14

%

$

13,634

$

5

0.15

%

$

12,041

$

5

0.17

%

Money market265,856

366

0.56

%

240,913

360

0.59

%

200,878

404

0.80

%

163,332

374

0.92

%

116,550

401

1.38

%

Savings48,284

60

0.50

%

55,756

77

0.55

%

67,880

154

0.90

%

66,389

176

1.07

%

66,955

251

1.51

%

Time deposits451,347

975

0.88

%

447,839

1,236

1.10

%

452,950

1,790

1.57

%

509,447

2,613

2.06

%

555,784

3,297

2.39

%

Total interest-bearing deposits781,300

1,403

0.73

%

755,952

1,677

0.88

%

732,956

2,352

1.28

%

752,802

3,168

1.69

%

751,330

3,954

2.12

%

Borrowings65,667

130

0.80

%

88,645

153

0.69

%

147,149

206

0.56

%

115,613

174

0.61

%

9,874

27

1.10

%

Total interest-bearing liabilities846,967

1,533

0.73

%

844,597

1,830

0.86

%

880,105

2,558

1.16

%

868,415

3,342

1.55

%

761,204

3,981

2.10

%

Total interest-bearing liabilities exc. SBA PPP loan funding749,137

1,449

0.78

%

754,587

1,751

0.92

%

787,712

2,476

1.25

%

805,624

3,287

1.64

%

Noninterest-bearing deposits343,904

363,937

313,370

249,909

199,721

Other liabilities11,942

12,623

12,750

15,141

16,018

Stockholders' equity163,123

158,560

155,385

152,250

150,507

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,365,936

$

1,379,717

$

1,361,610

$

1,285,715

$

1,127,450

Net interest income?$

12,885

$

11,829

$

10,701

$

9,910

$

10,539

Net interest income exc. SBA PPP Loans?$

11,820

$

11,194

$

10,181

$

9,488

Net interest spread3.64

%

3.15

%

2.80

%

2.69

%

3.21

%

Effect of noninterest-bearing sources0.26

%

0.33

%

0.40

%

0.48

%

0.65

%

Net interest margin?3.90

%

3.48

%

3.20

%

3.17

%

3.86

%

Net interest margin exc. SBA PPP loans?3.86

%

3.52

%

3.27

%

3.20

%

Cost of deposits$

1,125,204

$

1,403

0.51

%

$

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

%

Cost of funds$

1,190,871

$

1,533

0.52

%

$

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

%

Cost of funds exc. SBA ppp loan funding$

1,093,041

$

1,449

0.54

%

$

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 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Number of Days in the PeriodINTEREST-EARNING ASSETS $

941,147





$ 1,138,134 $ 13,837 4.93 % $ 1,066,368 $ 13,045 4.87 % $ 1,046,678 $ 12,650 4.81 % $ 1,018,596 $ 12,568 4.96 % $Loans ^1 13,629



5.82

%



94,375





84,679 448 2.15 % 87,818 474 2.15 % 90,450 471 2.07 % 91,401 546 2.40 % Investment securities? 581



2.48

%



55,222





Interest-earning deposits 108,127 36 0.14 % 191,703 59 0.12 % 186,678 58 0.12 % 137,945 45 0 at the FRB and other banks 188



1.37

%



8,194





8,196 97 4.80 % 8,196 81 3.93 % 8,196 80 3.88 % 8,195 93 4.56 % Other earning assets 122



5.99

%



1,098,938





Total interest-earning 1,339,136 14,418 4.37 % 1,354,085 13,659 4.01 % 1,332,002 13,259 3.96 % 1,256,137 13,252 4.24 % assets ? 14,520



5.31

%

Total interest-earning 1,241,306 13,269 4.34 % 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 ASSETS

10,025 10,234 10,685 8,224 9,056Cash and due from banks



Other noninterest-earning 31,156 28,903 31,216 32,285 30,050assets



Total noninterest-earning 41,181 39,137 41,901 40,509 39,106assets



Less: Allowance for loan (14,381 ) (13,505 ) (12,293 ) (10,931 ) (10,594losses )

$

$ 1,365,936 $ 1,379,717 $ 1,361,610 $ 1,285,715 1,127,450TOTAL ASSETS

INTEREST-BEARING DEPOSITS $

12,041





$ 15,813 $ 2 0.05 % $ 11,444 $ 4 0.14 % $ 11,248 $ 4 0.14 % $ 13,634 $ 5 0.15 % $Interest-bearing demand 5



0.17

%



116,550





265,856 366 0.56 % 240,913 360 0.59 % 200,878 404 0.80 % 163,332 374 0.92 % Money market 401



1.38

%



66,955





48,284 60 0.50 % 55,756 77 0.55 % 67,880 154 0.90 % 66,389 176 1.07 % Savings 251



1.51

%



555,784





451,347 975 0.88 % 447,839 1,236 1.10 % 452,950 1,790 1.57 % 509,447 2,613 2.06 % Time deposits 3,297



2.39

%



751,330





Total interest-bearing 781,300 1,403 0.73 % 755,952 1,677 0.88 % 732,956 2,352 1.28 % 752,802 3,168 1.69 % deposits 3,954



2.12

%



9,874





65,667 130 0.80 % 88,645 153 0.69 % 147,149 206 0.56 % 115,613 174 0.61 % Borrowings 27



1.10

%



761,204





Total interest-bearing 846,967 1,533 0.73 % 844,597 1,830 0.86 % 880,105 2,558 1.16 % 868,415 3,342 1.55 % liabilities 3,981



2.10

%

Total interest-bearing 749,137 1,449 0.78 % 754,587 1,751 0.92 % 787,712 2,476 1.25 % 805,624 3,287 1.64 %liabilities exc. SBA PPP loan funding

Noninterest-bearing 343,904 363,937 313,370 249,909 199,721deposits



11,942 12,623 12,750 15,141 16,018Other liabilities



163,123 158,560 155,385 152,250 150,507Stockholders' equity

$

TOTAL LIABILITIES & $ 1,365,936 $ 1,379,717 $ 1,361,610 $ 1,285,715 1,127,450STOCKHOLDERS' EQUITY



$ 12,885 $ 11,829 $ 10,701 $ 9,910 $Net interest income? 10,539

Net interest income exc. $ 11,820 $ 11,194 $ 10,181 $ 9,488 SBA PPP Loans?

3.64 % 3.15 % 2.80 % 2.69 % 3.21Net interest spread %



Effect of 0.26 % 0.33 % 0.40 % 0.48 % 0.65noninterest-bearing sources %



3.90 % 3.48 % 3.20 % 3.17 % 3.86Net interest margin? %

Net interest margin exc. 3.86 % 3.52 % 3.27 % 3.20 % SBA PPP loans? $

951,051





$ 1,125,204 $ 1,403 0.51 % $ 1,119,889 $ 1,677 0.60 % $ 1,046,326 $ 2,352 0.89 % $ 1,002,711 $ 3,168 1.27 % $Cost of deposits 3,954



1.67

%

$

960,925





$ 1,190,871 $ 1,533 0.52 % $ 1,208,534 $ 1,830 0.60 % $ 1,193,475 $ 2,558 0.85 % $ 1,118,324 $ 3,342 1.20 % $Cost of funds 3,981



1.67

%

Cost of funds exc. SBA ppp $ 1,093,041 $ 1,449 0.54 % $ 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 loans held-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 EndedMarch 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020AmountYieldAmountYieldAmountYieldAmountYieldAmountYieldContractual yield$

12,148

4.33

%

$

11,727

4.38

%

$

11,522

4.38

%

$

11,578

4.57

%

$

12,445

5.32

%

SBA discount accretion738

0.26

%

730

0.27

%

615

0.23

%

662

0.26

%

1,190

0.51

%

Prepayment penalties & late fees121

0.04

%

177

0.07

%

221

0.09

%

24

0.01

%

106

0.04

%

Amortization of net deferred costs830

0.30

%

411

0.15

%

292

0.11

%

304

0.12

%

(112

)

(0.05

%)

As reported yield on loans$

13,837

4.93

%

$

13,045

4.87

%

$

12,650

4.81

%

$

12,568

4.96

%

$

13,629

5.82

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210430005039/en/

CONTACT: Douglas J Goddard, EVP & CFO (323) 988-3010 DouglasG@cbb-bank.com