Business Wire | Oct 29, 2020 09:00AM EDT

CBB Bancorp, Inc. Reports Third Quarter Financial Results

Oct. 29, 2020

LOS ANGELES--(BUSINESS WIRE)--Oct. 29, 2020--CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank (the "Bank"), announced today net income for third quarter 2020 of $2.9 million, or $0.28 per diluted share, an increase of 75.7% compared to $1.7 million, or $0.16 per diluted share, in the prior quarter and a decrease of 15.0% compared to $3.4 million, or $0.33 per share, in the same period last year.

"We are operating in unprecedented times, and I am proud of our team working together with our customers to get through this COVID-19 pandemic and economic crisis," says Ms. Kim, President and Chief Executive Officer. "We are seeing positive trends as we navigate through the COVID-19 pandemic. The initial three-month loan deferment totaled approximately $286.9 million or 26.9% of total loan portfolio. However, the second round of loan payment deferments as of September 30, 2020, amounted to approximately $21.1 million or 2.1% of total loan portfolio. We will continue to work with our customers through this economic crisis while we continue to maintain strong capital and liquidity."

Overall Results

Net income for third quarter 2020 was positively impacted by higher net interest income and gain on sale of loans. The return on average assets for third quarter 2020 was 0.85% compared to 0.52% for second quarter 2020 and 1.15% for third quarter 2019. The return on average equity for third quarter 2020 was 7.43% compared to 4.36% for second quarter of 2020 and 9.44% for third quarter 2019. The cost of funds for third quarter 2020 was 0.85% compared to 1.20% for second quarter 2020 and 1.93% for third quarter 2019. The efficiency ratio for third quarter 2020 was 58.77% compared to 66.02% for second quarter 2020 and 61.47% for third quarter 2019.

Net Interest Income and Margin:

Net Interest Income

Net interest income for third quarter 2020 was $10.7 million, an increase of $790 thousand, or 8.0%, from second quarter 2020, and a decrease of $257 thousand, or 2.4%, from third 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.

Net Interest Margin

Our net interest margin for third quarter 2020 was 3.20% compared to 3.17% for second quarter 2020 and 3.78% for third quarter 2019. The slight increase in net interest margin was due to our time deposits repricing lower, which will continue as deposits reach their maturities. Our cost of funds improved significantly for third quarter 2020 to 0.85% from 1.20% for second quarter 2020 and 1.93% for third quarter 2019.

Provision for Loan Losses:

Our provision for loan losses for third quarter 2020 was $1.6 million, compared to $1.6 million for second quarter 2020 and $300 thousand for third quarter 2019. Approximately $521 thousand of the third quarter provision was driven by an increase in qualitative factors, while $810 thousand was attributed to specific reserve requirements for impaired loans. The assumptions underlying these qualitative factors included a deterioration in the macro-economic environment caused by the pandemic and the uncertainties surrounding the financial condition of our borrowers who received loan deferments under the CARES Act. 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 3Q 2020 Overview and COVID-19 Updates presentation.

Noninterest Income:

Noninterest income for third quarter 2020 was $3.0 million compared to $1.5 million for second quarter 2020 and $2.4 million for third quarter 2019. The increase in third quarter 2020 was due to higher gains on sale of SBA loans resulting from significantly higher sales volume and higher premiums. Premiums averaged 9.8% compared to 8.6% for the second quarter 2020, and 8.9% for the third quarter 2019. As a result, the volume of loans sold during third quarter 2020 increased to $24.9 million, compared to $9.8 million for second quarter 2020, and $25.37 million for third quarter 2019.

Noninterest Expense:

Noninterest expense for third quarter 2020 was $8.0 million compared to $7.5 million for second quarter 2020 and $8.2 million for third quarter 2019. Salaries and employee benefits increased by $331 thousand compared to the prior quarter. The increase reflected lower deferred loan origination costs for the current quarter due to lower PPP loan origination.

Income Taxes:

The Company's effective tax rate for third quarter 2020 was 27.9% compared to 27.0% for second quarter 2020 and 29.4% for third quarter 2019.

Balance Sheet:

Investment Securities:

Investment securities were $88.8 million at September 30, 2020, a decrease of $2.3 million from June 30, 2020 and $8.4 million from September 30, 2019. The decreases were due to principal paydowns. There were no portfolio additions.

Loans Receivable:

Loans receivable outstanding (including loans held for sale) at September 30, 2020 was $1.01 billion, an increase of $7 million, or 0.7%, from June 30, 2020, and an increase of $106.9 million, or 11.8% from September 30, 2019.

We provided loan payment deferments to our commercial borrowers under the CARES Act. The first round of loans with three-month deferment at June 30, 2020 totaled approximately $286.9 million or 26.9% of total loan portfolio. The second round of loan payment deferments as of September 30, 2020, totaled approximately $21.1 million or 2.0% of loan portfolio. We anticipate there may be additional loan deferments as the six-month SBA loan payment relief to our SBA borrowers had expired in September 2020. SBA borrowers are required to make payments beginning October 2020 unless their loans were originated after April 2020. SBA will only cover principal and interest payments for the six-month period. Our weighted average loan-to-value of CRE loans was 72.2% at September 30, 2020. Excluding SBA loans, our weighted average loan-to-value of CRE loans was 55.1%. For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 3Q 2020 Overview and COVID-19 updates presentation.

Paycheck Protection Program (PPP):

Paycheck Protection Program loans totaled $92.7 million at September 30, 2020. Unearned fees are accreted to income based on the two-year contractual maturity. The SBA did not approve any PPP loan forgiveness application process in the third quarter 2020 and, accordingly, no PPP loans were forgiven in the quarter. SBA has streamlined the PPP forgiveness applications for loans of $50 thousand and under. We anticipate the forgiveness approvals will begin during the fourth quarter of 2020. As we process the loan forgiveness, we will recognize the remaining unaccreted fee income. As of September 30, 2020, we had approximately 700 PPP loans totaling $15.2 million with balances of $50 thousand and under. The remaining unaccreted balance for such loans was $600 thousand.

Allowance for Loan Losses and Asset Quality:

The allowance for loan losses at September 30, 2020 was $13.6 million, or 1.35% of portfolio loans, compared to $12.3 million, or 1.22% of portfolio loans, at June 30, 2020. Excluding PPP loans of $92.7 million, which are government guaranteed, the allowance for loan losses at September 30, 2020 was 1.48% compared to 1.34% at June 30, 2020. Non-performing loans as of September 30, 2020 was $4.1 million, down from $4.2 million at June 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 3Q 2020 Overview and COVID-19 Updates presentation.

SBA Loans Held for Sale:

SBA loans held for sale at September 30, 2020 were $53.8 million, compared to $32.3 million at June 30, 2020 and $42.1 million at September 30, 2019. We continue to assess SBA loan sale premiums and plan to sell loans when it is advantageous to do so. During the quarter, loan sale premiums fluctuated higher and the volume of loan sales increased significantly as demand for SBA loans has returned to the secondary market. See comments under "Noninterest Income", and the Table 7 for additional SBA loan origination and sale data.

Deposits:

Deposits were $1.10 billion at September 30, 2020, up $73.7 million from June 30, 2020 and up $112.1 million from September 30, 2019. Noninterest-bearing demand deposits (DDAs) increased $68.3 million or 23.2% from June 30, 2020 and increased $163.3 million or 81.6% from September 30, 2019. DDAs were 33.0% of total deposits at September 30, 2020 compared to 28.7% at June 30, 2020 and 20.2% at September 30, 2019. NOW and MMDA increased $36.8 million or 19.1% from June 30, 2020 and increased $106.3 million or 86.1% from September 30, 2019. Time Deposits decreased $24.8 million or 5.3% from June 30, 2020 and decreased $155.1 million or 25.8% from September 30, 2019. Our time deposits at September 30, 2020 were $446.7 million or 40.6% of total deposits, compared to $471.5 million or 45.9% of total deposits at June 30, 2020 and down from $601.8 million or 60.8% of total deposits at September 30, 2019. Our cost of funds for third quarter 2020 decreased to 0.85% from to 1.20% in second quarter 2020 and 1.93% for third quarter 2019.

Borrowings:

Borrowings at September 30, 2020 consisted of $70.0 million of Federal Home Loan Bank of San Francisco (FHLB-SF) advances, compared to $20 million at June 30, 2020. The historically low market interest rates enabled us to match fund some of our fixed rate loans with long term, low cost funds to minimize interest rate risk.

Additionally, we match funded approximately $58.7 million of PPP loans using the FRB PPP Liquidity Facility without taking on liquidity or funding risk. The current borrowing rate for the facility is 0.35% and the PPP loan rate is 1% plus a loan fee ranging from 1.0% to 5% depending on the loan amount.

Capital:

Stockholders' equity was $156.0 million at September 30, 2020, representing an increase of $3.3 million, or 2.2%, over stockholders' equity of $152.8 million at June 30, 2020. Book value per share at September 30, 2020 was $15.23 compared with $14.92 at June 30, 2020, an increase of $0.31 per share or 2.1%.

All of our regulatory capital ratios increased at September 30, 2020 from their levels at June 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 September 30, 2020 was 15.24% at the Company level and 15.20% 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 3Q 2020 Overview and COVID-19 Updates presentation.

FORWARD-LOOKING STATEMENTS:

This news release contains a number of forward-looking statements. These statements may be identified by 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 guaranteeing 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; 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; 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; or 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 Nine Months Ended September 30, June 30, $ % September 30, $ % September 30, September 30, $ %

2020 2020 Change Change 2019 Change Change 2020 2019 Change Change

Interest income $ 13,212 $ 13,206 $ 6 0.0 % $ 15,888 $ (2,676 ) (16.8 %) $ 40,891 $ 47,768 $ (6,877 ) (14.4 %)

Interest expense 2,558 3,342 (784 ) (23.5 %) 4,977 (2,419 ) (48.6 %) 9,881 14,139 (4,258 ) (30.1 %)

Net interest income 10,654 9,864 790 8.0 % 10,911 (257 ) (2.4 %) 31,010 33,629 (2,619 ) (7.8 %)

Provision for loan 1,600 1,600 - - 300 1,300 433.3 % 3,900 600 3,300 550.0 %lossesNet interest income 9,054 8,264 790 9.6 % 10,611 (1,557 ) (14.7 %) 27,110 33,029 (5,919 ) (17.9 %)after provision forloan losses Gain on sale of loans 1,662 509 1,153 226.5 % 1,396 266 19.1 % 3,110 4,672 (1,562 ) (33.4 %)

Gain (loss) on sale of - 9 (9 ) (100.0 %) - - - 3 (14 ) 17 121.4 %OREOSBA servicing fee 948 738 210 28.5 % 523 425 81.3 % 2,058 1,338 720 53.8 %income, netSBA servicing right - - - - - - - - - - - impairmentService charges and 385 251 134 53.4 % 505 (120 ) (23.8 %) 1,032 1,539 (507 ) (32.9 %)other incomeNoninterest income 2,995 1,507 1,488 98.7 % 2,424 571 23.6 % 6,203 7,535 (1,332 ) (17.7 %)

Salaries and employee 4,948 4,617 331 7.2 % 5,132 (184 ) (3.6 %) 15,267 15,697 (430 ) (2.7 %)benefitsOccupancy and equipment 938 943 (5 ) (0.5 %) 869 69 7.9 % 2,827 2,532 295 11.7 %

Marketing expense 265 279 (14 ) (5.0 %) 302 (37 ) (12.3 %) 1,002 1,811 (809 ) (44.7 %)

Professional expense 503 500 3 0.6 % 691 (188 ) (27.2 %) 1,438 1,903 (465 ) (24.4 %)

Other expenses 1,367 1,168 199 17.0 % 1,203 164 13.6 % 3,929 3,819 110 2.9 %

Noninterest expense 8,021 7,507 514 6.8 % 8,197 (176 ) (2.1 %) 24,463 25,762 (1,299 ) (5.0 %)

Income before income 4,028 2,264 1,764 77.9 % 4,838 (810 ) (16.7 %) 8,850 14,802 (5,952 ) (40.2 %)tax expense Income tax expense 1,125 612 513 83.8 % 1,421 (296 ) (20.8 %) 2,683 4,312 (1,629 ) (37.8 %)

Net income $ 2,903 $ 1,652 $ 1,251 75.7 % $ 3,417 $ (514 ) (15.0 %) $ 6,167 $ 10,490 $ (4,323 ) (41.2 %)

Effective tax rate 27.9 % 27.0 % 0.9 % 3.3 % 29.4 % (1.4 %) (4.9 %) 30.3 % 29.1 % 1.2 % 4.1 %

Outstanding number of 10,247,292 10,237,310 9,982 0.1 % 10,170,760 76,532 0.8 % 10,247,292 10,170,760 76,532 0.8 %shares Weighted average shares 10,244,037 10,237,310 6,727 0.1 % 10,141,086 102,951 1.0 % 10,235,197 10,123,118 112,079 1.1 %for basic EPSWeighted average shares 10,273,148 10,276,637 (3,489 ) (0.0 %) 10,321,937 (48,789 ) (0.5 %) 10,287,659 10,341,228 (53,569 ) (0.5 %)for diluted EPS Basic EPS $ 0.28 $ 0.16 $ 0.12 75.0 % $ 0.34 $ (0.06 ) (17.6 %) $ 0.60 $ 1.04 $ (0.44 ) (42.3 %)

Diluted EPS $ 0.28 $ 0.16 $ 0.12 75.0 % $ 0.33 $ (0.05 ) (15.2 %) $ 0.60 $ 1.01 $ (0.41 ) (40.6 %)

Return on average 0.85 % 0.52 % 0.33 % 63.5 % 1.15 % (0.30 %) (26.1 %) 0.65 % 1.21 % (0.56 %) (46.3 %)assetsReturn on average 7.43 % 4.36 % 3.07 % 70.4 % 9.44 % (2.01 %) (21.3 %) 5.39 % 10.09 % (4.70 %) (46.6 %)equity Efficiency ratio^1 58.77 % 66.02 % (7.25 %) (11.0 %) 61.47 % (2.7 %) (4.4 %) 65.74 % 62.58 % 3.16 % 5.0 %

Yield on 3.96 % 4.24 % (0.28 %) (6.6 %) 5.49 % (1.53 %) (27.9 %) 4.46 % 5.66 % (1.20 %) (21.2 %)interest-earningassets?Cost of funds 0.85 % 1.20 % (0.35 %) (29.2 %) 1.93 % (1.08 %) (56.0 %) 1.21 % 1.87 % (0.66 %) (35.3 %)

Cost of funds exc. SBA 0.89 % 1.25 % (0.36 %) (28.8 %) 1.25 %PPP loan fundingNet interest margin? 3.20 % 3.17 % 0.03 % 1.0 % 3.78 % (0.58 %) (15.3 %) 3.38 % 3.99 % (0.61 %) (15.3 %)

Net interest margin 3.27 % 3.20 % 0.07 % 2.2 % 3.43 %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 rate

BALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2(Dollars in thousands)September 30,

June 30,$%September 30,$%2020

2020

ChangeChange2019

ChangeChange

ASSETSCash and due from banks$

8,030

$

9,043

$

(1,013

)

(11.2

%)

$

12,448

$

(4,418

)

(35.5

%)

Interest-earning deposits at the FRB and other banks212,279

179,519

32,760

18.2

%

72,907

139,372

191.2

%

Investment securities^188,784

91,091

(2,307

)

(2.5

%)

97,141

(8,357

)

(8.6

%)

Loans held-for-sale, at the lower of cost or fair value53,755

32,264

21,491

66.6

%

42,132

11,623

27.6

%

Loans receivable1,011,867

1,005,128

6,739

0.7

%

905,004

106,863

11.8

%

Allowance for loan losses(13,614

)

(12,283

)

(1,331

)

(10.8

%)

(9,978

)

(3,636

)

(36.4

%)

Loans receivable, net998,253

992,845

5,408

0.5

%

895,026

103,227

11.5

%

OREO-

-

-

-

11

(11

)

(100.0

%)

Restricted stock investments8,196

8,196

-

-

8,194

2

0.0

%

Servicing assets9,043

8,944

99

1.1

%

9,953

(910

)

(9.1

%)

Other assets21,064

21,383

(319

)

(1.5

%)

21,885

(821

)

(3.8

%)

Total assets$

1,399,404

$

1,343,285

$

56,119

4.2

%

$

1,159,697

$

239,707

20.7

%

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

363,350

$

295,003

$

68,347

23.2

%

$

200,034

$

163,316

81.6

%

Interest-bearing738,040

732,647

5,393

0.7

%

789,280

(51,240

)

(6.5

%)

Total deposits1,101,390

1,027,650

73,740

7.2

%

989,314

112,076

11.3

%

FHLB advances and other borrowing128,671

148,671

(20,000

)

(13.5

%)

10,000

118,671

1186.7

%

Other liabilities13,295

14,208

(913

)

(6.4

%)

15,164

(1,869

)

(12.3

%)

Total liabilities1,243,356

1,190,529

52,827

4.4

%

1,014,478

228,878

22.6

%

Stockholders' Equity156,048

152,756

3,292

2.2

%

145,219

10,829

7.5

%

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,399,404

$

1,343,285

$

56,119

4.2

%

$

1,159,697

$

239,707

20.7

%

CAPITAL RATIOSLeverage ratioCompany11.76

%

11.98

%

(0.22

%)

(1.8

%)

12.14

%

(0.38

%)

(3.1

%)

Bank11.72

%

11.94

%

(0.22

%)

(1.8

%)

12.10

%

(0.38

%)

(3.1

%)

Common equity tier 1 risk-based capital ratioCompany15.24

%

15.23

%

0.01

%

0.1

%

14.71

%

0.53

%

3.6

%

Bank15.20

%

15.18

%

0.02

%

0.1

%

14.66

%

0.54

%

3.7

%

Tier 1 risk-based capital ratioCompany15.24

%

15.23

%

0.01

%

0.1

%

14.71

%

0.53

%

3.6

%

Bank15.20

%

15.18

%

0.02

%

0.1

%

14.66

%

0.54

%

3.7

%

Total risk-based capital ratioCompany16.50

%

16.48

%

0.02

%

0.1

%

15.80

%

0.70

%

4.4

%

Bank16.45

%

16.43

%

0.02

%

0.1

%

15.75

%

0.70

%

4.4

%

Book value per share$

15.23

$

14.92

$

0.31

2.1

%

$

14.28

$

0.95

6.7

%

Loan-to-Deposit (LTD) ratio91.87

%

97.81

%

(5.94

%)

(6.1

%)

91.48

%

0.39

%

0.4

%

Nonperforming assets4,111

4,189

(78

)

(1.9

%)

5,134

$

(1,023

)

(19.9

%)

Nonperforming assets as a % of loans receivable0.41

%

0.42

%

(0.01

%)

(2.4

%)

0.57

%

(0.16

%)

(28.1

%)

ALLL as a % of loans receivable1.35

%

1.22

%

0.13

%

10.7

%

1.10

%

0.25

%

22.7

%

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

%

1.34

%

0.14

%

10.4

%

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

2020 2020 Change Change 2019 Change Change

ASSETS Cash and due from $ 8,030 $ 9,043 $ (1,013 ) (11.2 %) $ 12,448 $ (4,418 ) (35.5 %) banks Interest-earning 212,279 179,519 32,760 18.2 % 72,907 139,372 191.2 % deposits at the FRB and other banks Investment 88,784 91,091 (2,307 ) (2.5 %) 97,141 (8,357 ) (8.6 %) securities^1 Loans held-for-sale, at 53,755 32,264 21,491 66.6 % 42,132 11,623 27.6 % the lower of cost or fair value Loans receivable 1,011,867 1,005,128 6,739 0.7 % 905,004 106,863 11.8 %

Allowance for loan (13,614 ) (12,283 ) (1,331 ) (10.8 %) (9,978 ) (3,636 ) (36.4 %) losses Loans receivable, 998,253 992,845 5,408 0.5 % 895,026 103,227 11.5 % net OREO - - - - 11 (11 ) (100.0 %)

Restricted stock 8,196 8,196 - - 8,194 2 0.0 % investments Servicing assets 9,043 8,944 99 1.1 % 9,953 (910 ) (9.1 %)

Other assets 21,064 21,383 (319 ) (1.5 %) 21,885 (821 ) (3.8 %)

Total assets $ 1,399,404 $ 1,343,285 $ 56,119 4.2 % $ 1,159,697 $ 239,707 20.7 %

LIABILITIES ANDSTOCKHOLDERS' EQUITY Noninterest-bearing $ 363,350 $ 295,003 $ 68,347 23.2 % $ 200,034 $ 163,316 81.6 %

Interest-bearing 738,040 732,647 5,393 0.7 % 789,280 (51,240 ) (6.5 %)

Total deposits 1,101,390 1,027,650 73,740 7.2 % 989,314 112,076 11.3 %

FHLB advances and 128,671 148,671 (20,000 ) (13.5 %) 10,000 118,671 1186.7 % other borrowing Other liabilities 13,295 14,208 (913 ) (6.4 %) 15,164 (1,869 ) (12.3 %)

Total liabilities 1,243,356 1,190,529 52,827 4.4 % 1,014,478 228,878 22.6 %

Stockholders' 156,048 152,756 3,292 2.2 % 145,219 10,829 7.5 % EquityTOTAL LIABILITIES & $ 1,399,404 $ 1,343,285 $ 56,119 4.2 % $ 1,159,697 $ 239,707 20.7 %STOCKHOLDERS' EQUITY CAPITAL RATIOS Leverage ratio Company 11.76 % 11.98 % (0.22 %) (1.8 %) 12.14 % (0.38 %) (3.1 %)

Bank 11.72 % 11.94 % (0.22 %) (1.8 %) 12.10 % (0.38 %) (3.1 %)

Common equity tier 1 risk-based capital ratio Company 15.24 % 15.23 % 0.01 % 0.1 % 14.71 % 0.53 % 3.6 %

Bank 15.20 % 15.18 % 0.02 % 0.1 % 14.66 % 0.54 % 3.7 %

Tier 1 risk-based capital ratio Company 15.24 % 15.23 % 0.01 % 0.1 % 14.71 % 0.53 % 3.6 %

Bank 15.20 % 15.18 % 0.02 % 0.1 % 14.66 % 0.54 % 3.7 %

Total risk-based capital ratio Company 16.50 % 16.48 % 0.02 % 0.1 % 15.80 % 0.70 % 4.4 %

Bank 16.45 % 16.43 % 0.02 % 0.1 % 15.75 % 0.70 % 4.4 %

Book value per $ 15.23 $ 14.92 $ 0.31 2.1 % $ 14.28 $ 0.95 6.7 % share Loan-to-Deposit 91.87 % 97.81 % (5.94 %) (6.1 %) 91.48 % 0.39 % 0.4 % (LTD) ratio Nonperforming 4,111 4,189 (78 ) (1.9 %) 5,134 $ (1,023 ) (19.9 %) assets Nonperforming 0.41 % 0.42 % (0.01 %) (2.4 %) 0.57 % (0.16 %) (28.1 %) assets as a % of loans receivable ALLL as a % of 1.35 % 1.22 % 0.13 % 10.7 % 1.10 % 0.25 % 22.7 % loans receivable ALLL as a % of 1.48 % 1.34 % 0.14 % 10.4 % 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 EndedSeptember 30,June 30,March 31,December 31,September 30,2020

2020

2020

2019

2019

Interest income$

13,212

$

13,206

$

14,473

$

15,254

$

15,888

Interest expense2,558

3,342

3,981

4,517

4,977

Net interest income10,654

9,864

10,492

10,737

10,911

Provision for loan losses1,600

1,600

700

700

300

Net interest income after provision for loan losses9,054

8,264

9,792

10,037

10,611

Gain on sale of loans1,662

509

939

1,481

1,396

Gain (loss) on sale of OREO-

9

(6

)

-

-

SBA servicing fee income, net948

738

372

413

523

SBA servicing right impairment-

-

-

-

-

Service charges and other income385

251

396

416

505

Noninterest income2,995

1,507

1,701

2,310

2,424

Salaries and employee benefits4,948

4,617

5,702

5,355

5,132

Occupancy and equipment938

943

946

978

869

Marketing expense265

279

458

119

302

Professional expense503

500

435

417

691

Other expenses1,367

1,168

1,394

1,487

1,203

Noninterest expense8,021

7,507

8,935

8,356

8,197

Income before income tax expense4,028

2,264

2,558

3,991

4,838

Income tax expense1,125

612

946

1,137

1,421

Net income$

2,903

$

1,652

$

1,612

$

2,854

$

3,417

Effective tax rate27.9

%

27.0

%

37.0

%

28.5

%

29.4

%

Outstanding number of shares10,247,292

10,237,310

10,237,310

10,197,380

10,170,760

Weighted average shares for basic EPS10,244,037

10,237,310

10,224,146

10,188,700

10,141,086

Weighted average shares for diluted EPS10,273,148

10,276,637

10,327,730

10,336,793

10,321,937

Basic EPS$

0.28

$

0.16

$

0.16

$

0.28

$

0.34

Diluted EPS$

0.28

$

0.16

$

0.16

$

0.28

$

0.33

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

Interest $ 13,212 $ 13,206 $ 14,473 $ 15,254 $ 15,888 incomeInterest 2,558 3,342 3,981 4,517 4,977 expenseNet interest 10,654 9,864 10,492 10,737 10,911 income Provision for 1,600 1,600 700 700 300 loan lossesNet interestincome after 9,054 8,264 9,792 10,037 10,611 provision forloan losses Gain on sale 1,662 509 939 1,481 1,396 of loansGain (loss) - 9 (6 ) - - on sale ofOREOSBA servicing 948 738 372 413 523 fee income,netSBA servicing - - - - - rightimpairmentService 385 251 396 416 505 charges andother incomeNoninterest 2,995 1,507 1,701 2,310 2,424 income Salaries and 4,948 4,617 5,702 5,355 5,132 employeebenefitsOccupancy and 938 943 946 978 869 equipmentMarketing 265 279 458 119 302 expenseProfessional 503 500 435 417 691 expenseOther 1,367 1,168 1,394 1,487 1,203 expensesNoninterest 8,021 7,507 8,935 8,356 8,197 expense Income before 4,028 2,264 2,558 3,991 4,838 income taxexpense Income tax 1,125 612 946 1,137 1,421 expense Net income $ 2,903 $ 1,652 $ 1,612 $ 2,854 $ 3,417

Effective tax 27.9 % 27.0 % 37.0 % 28.5 % 29.4 %rate Outstanding 10,247,292 10,237,310 10,237,310 10,197,380 10,170,760 number ofshares Weightedaverage 10,244,037 10,237,310 10,224,146 10,188,700 10,141,086 shares forbasic EPSWeightedaverage 10,273,148 10,276,637 10,327,730 10,336,793 10,321,937 shares fordiluted EPS Basic EPS $ 0.28 $ 0.16 $ 0.16 $ 0.28 $ 0.34

Diluted EPS $ 0.28 $ 0.16 $ 0.16 $ 0.28 $ 0.33

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

2020

2020

2019

2019

Salaries and benefits$

4,948

$

4,617

$

5,702

$

5,355

$

5,132

FTE at the end of period179

191

194

190

190

Average FTE during the period181

193

192

191

191

Salaries and benefits/average FTE^1$

109

$

96

$

119

$

111

$

106

Salaries and benefits/average assets^11.45

%

1.44

%

2.03

%

1.83

%

1.72

%

Noninterest expense/average assets^12.34

%

2.35

%

3.19

%

2.85

%

2.75

%

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

Salaries and benefits $ 4,948 $ 4,617 $ 5,702 $ 5,355 $ 5,132

FTE at the end of period 179 191 194 190 190

Average FTE during the 181 193 192 191 191 period Salaries and benefits/ $ 109 $ 96 $ 119 $ 111 $ 106 average FTE^1 Salaries and benefits/ 1.45 % 1.44 % 2.03 % 1.83 % 1.72 % average assets^1 Noninterest expense/ 2.34 % 2.35 % 3.19 % 2.85 % 2.75 % average assets^1 ^1 AnnualizedFIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5(Dollars in thousands)September 30,June 30,March 31,December 31,September 30,2020

2020

2020

2019

2019

ASSETSCash and due from banks$

8,030

$

9,043

$

7,804

$

10,059

$

12,448

Interest-earning deposits at the FRB and other banks212,279

179,519

113,880

93,259

72,907

Investment securities^188,784

91,091

91,863

94,640

97,141

Loans held-for-sale, at the lower of cost or fair value53,755

32,264

29,989

28,826

42,132

Loans receivable1,011,867

1,005,128

931,717

906,875

905,004

Allowance for loan losses(13,614

)

(12,283

)

(11,034

)

(10,596

)

(9,978

)

Loans receivable, net

998,253

992,845

920,683

896,279

895,026

OREO

-

-

364

362

11

Restricted stock investments8,196

8,196

8,194

8,194

8,194

Servicing assets9,043

8,944

9,203

9,697

9,953

Other assets21,064

21,383

20,144

21,372

21,885

Total assets$

1,399,404

$

1,343,285

$

1,202,124

$

1,162,688

$

1,159,697

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

363,350

$

295,003

$

211,139

$

209,484

$

200,034

Interest-bearing738,040

732,647

739,285

763,822

789,280

Total deposits1,101,390

1,027,650

950,424

973,306

989,314

FHLB advances128,671

148,671

85,000

25,000

10,000

Other liabilities13,295

14,208

16,895

16,298

15,164

Total liabilities1,243,356

1,190,529

1,052,319

1,014,604

1,014,478

Stockholders' Equity156,048

152,756

149,805

148,084

145,219

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,399,404

$

1,343,285

$

1,202,124

$

1,162,688

$

1,159,697

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

ASSETSCash and due from $ 8,030 $ 9,043 $ 7,804 $ 10,059 $ 12,448 banksInterest-earning 212,279 179,519 113,880 93,259 72,907 deposits at the FRBand other banksInvestment 88,784 91,091 91,863 94,640 97,141 securities^1Loansheld-for-sale, at 53,755 32,264 29,989 28,826 42,132 the lower of costor fair value Loans receivable 1,011,867 1,005,128 931,717 906,875 905,004

Allowance for loan (13,614 ) (12,283 ) (11,034 ) (10,596 ) (9,978 )lossesLoans receivable, 998,253 992,845 920,683 896,279 895,026 net

OREO - - 364 362 11

Restricted stock 8,196 8,196 8,194 8,194 8,194 investmentsServicing assets 9,043 8,944 9,203 9,697 9,953

Other assets 21,064 21,383 20,144 21,372 21,885

Total assets $ 1,399,404 $ 1,343,285 $ 1,202,124 $ 1,162,688 $ 1,159,697

LIABILITIES ANDSTOCKHOLDERS'EQUITYNoninterest-bearing $ 363,350 $ 295,003 $ 211,139 $ 209,484 $ 200,034

Interest-bearing 738,040 732,647 739,285 763,822 789,280

Total deposits 1,101,390 1,027,650 950,424 973,306 989,314

FHLB advances 128,671 148,671 85,000 25,000 10,000

Other liabilities 13,295 14,208 16,895 16,298 15,164

Total liabilities 1,243,356 1,190,529 1,052,319 1,014,604 1,014,478

Stockholders' 156,048 152,756 149,805 148,084 145,219 EquityTOTAL LIABILITIES & $ 1,399,404 $ 1,343,285 $ 1,202,124 $ 1,162,688 $ 1,159,697 STOCKHOLDERS'EQUITY ^1 Includes AFS andHTMFIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands)September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019Balance%Balance%Balance%Balance%Balance%Construction$

18,236

1.8

%

$

14,649

1.5

%

$

12,607

1.4

%

$

16,957

1.9

%

$

18,477

2.0

%

Commercial real estate779,062

77.0

%

769,563

76.6

%

768,539

82.5

%

746,969

82.4

%

725,096

80.1

%

Commercial and industrial211,298

20.9

%

215,362

21.4

%

143,117

15.4

%

135,412

14.9

%

153,306

16.9

%

Consumer2,751

0.3

%

5,646

0.6

%

5,056

0.5

%

5,184

0.6

%

5,389

0.6

%

Gross loans1,011,347

99.9

%

1,005,220

100.0

%

929,319

99.7

%

904,522

99.7

%

902,268

99.7

%

Net deferred loan fees/costs520

0.1

%

(92

)

0.0

%

2,398

0.3

%

2,353

0.3

%

2,736

0.3

%

Loans receivable$

1,011,867

100.0

%

$

1,005,128

100.0

%

$

931,717

100.0

%

$

906,875

100.0

%

$

905,004

100.0

%

Loans held-for-sale$

53,755

$

32,264

$

29,989

$

28,826

$

42,132

Loans receivable, including loans held-for-sale$

1,065,622

$

1,037,392

$

961,706

$

935,701

$

947,136

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands) September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 Balance % Balance % Balance % Balance % Balance % Construction $ 18,236 1.8 % $ 14,649 1.5 % $ 12,607 1.4 % $ 16,957 1.9 % $ 18,477 2.0 %

Commercial 779,062 77.0 % 769,563 76.6 % 768,539 82.5 % 746,969 82.4 % 725,096 80.1 %real estateCommercial 211,298 20.9 % 215,362 21.4 % 143,117 15.4 % 135,412 14.9 % 153,306 16.9 %andindustrialConsumer 2,751 0.3 % 5,646 0.6 % 5,056 0.5 % 5,184 0.6 % 5,389 0.6 %

Gross loans 1,011,347 99.9 % 1,005,220 100.0 % 929,319 99.7 % 904,522 99.7 % 902,268 99.7 %

Net deferred 520 0.1 % (92 ) 0.0 % 2,398 0.3 % 2,353 0.3 % 2,736 0.3 %loan fees/costsLoans $ 1,011,867 100.0 % $ 1,005,128 100.0 % $ 931,717 100.0 % $ 906,875 100.0 % $ 905,004 100.0 %receivable Loans $ 53,755 $ 32,264 $ 29,989 $ 28,826 $ 42,132held-for-saleLoansreceivable, $ 1,065,622 $ 1,037,392 $ 961,706 $ 935,701 $ 947,136includingloansheld-for-saleSBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7(Dollars in thousands)Three Months EndedNine Months EndedSeptember 30,June 30,March 31,December 31,September 30,September 30,September 30,2020

2020

2020

2019

2019

2020

2019

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

32,264

$

29,988

$

28,826

$

42,132

$

46,875

$

28,826

$

45,665

SBA loans originated/transferred from/to held-for-investment during the quarter/year46,731

12,497

20,479

19,146

20,850

79,707

84,131

SBA loans sold during the quarter/year(24,866

)

(9,832

)

(18,530

)

(28,948

)

(25,276

)

(53,228

)

(86,419

)

SBA loans principal payment, net of advance(374

)

(389

)

(787

)

(3,504

)

(317

)

(1,550

)

(1,245

)

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

53,755

$

32,264

$

29,988

$

28,826

$

42,132

$

53,755

$

42,132

Gain on sale of SBA loans$

1,662

$

509

$

939

$

1,481

$

1,396

$

3,110

$

4,672

Premium on sale (weighted average)9.8

%

8.6

%

8.0

%

7.6

%

8.7

%

8.9

%

8.4

%

SBA loan production$

59,944

$

104,800

$

31,794

$

30,783

$

30,009

$

196,538

$

106,193

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

SBA loansheld-for-sale at $ 32,264 $ 29,988 $ 28,826 $ 42,132 $ 46,875 $ 28,826 $ 45,665 beginning of thequarter/yearSBA loansoriginated/transferred from/to held-for-investment 46,731 12,497 20,479 19,146 20,850 79,707 84,131 during thequarter/yearSBA loans sold (24,866 ) (9,832 ) (18,530 ) (28,948 ) (25,276 ) (53,228 ) (86,419 )during thequarter/yearSBA loansprincipal (374 ) (389 ) (787 ) (3,504 ) (317 ) (1,550 ) (1,245 )payment, net ofadvanceSBA loansheld-for-sale at $ 53,755 $ 32,264 $ 29,988 $ 28,826 $ 42,132 $ 53,755 $ 42,132 end of thequarter/year Gain on sale of $ 1,662 $ 509 $ 939 $ 1,481 $ 1,396 $ 3,110 $ 4,672 SBA loansPremium on sale 9.8 % 8.6 % 8.0 % 7.6 % 8.7 % 8.9 % 8.4 %(weightedaverage) SBA loan $ 59,944 $ 104,800 $ 31,794 $ 30,783 $ 30,009 $ 196,538 $ 106,193production

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

2020

2020

2019

2019

2020

2019

SBA servicing assets @ beginning of the quarter/year$

8,944

$

9,203

$

9,697

$

9,953

$

10,174

$

9,697

$

10,541

Newly added SBA servicing assets from SBA loans sold523

197

383

606

531

1,103

1,784

Regular quarterly/annual servicing assets amortization(384

)

(383

)

(388

)

(402

)

(398

)

(1,155

)

(1,188

)

SBA servicing assets amortized from SBA loans paid off/charged off(40

)

(73

)

(489

)

(460

)

(354

)

(602

)

(1,184

)

Subtotal before impairment

9,043

8,944

9,203

9,697

9,953

9,043

9,953

SBA servicing assets impairment-

-

-

-

-

-

-

SBA servicing liability impairment-

-

-

-

-

-

-

SBA servicing assets @ end of the quarter/year$

9,043

$

8,944

$

9,203

$

9,697

$

9,953

$

9,043

$

9,953

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

SBA servicingassets @ $ 8,944 $ 9,203 $ 9,697 $ 9,953 $ 10,174 $ 9,697 $ 10,541 beginning ofthe quarter/year Newly added SBAservicing 523 197 383 606 531 1,103 1,784 assets from SBAloans soldRegularquarterly/annual (384 ) (383 ) (388 ) (402 ) (398 ) (1,155 ) (1,188 )servicingassetsamortizationSBA servicingassets (40 ) (73 ) (489 ) (460 ) (354 ) (602 ) (1,184 )amortized fromSBA loans paidoff/charged off Subtotal before 9,043 8,944 9,203 9,697 9,953 9,043 9,953 impairment

SBA servicing - - - - - - - assetsimpairmentSBA servicing - - - - - - - liabilityimpairment SBA servicingassets @ end of $ 9,043 $ 8,944 $ 9,203 $ 9,697 $ 9,953 $ 9,043 $ 9,953 the quarter/yearFIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands)September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019Balance%Balance%Balance%Balance%Balance%Noninterest-bearing demand$

363,350

33.0

%

$

295,003

28.7

%

$

211,139

22.2

%

$

209,484

21.5

%

$

200,034

20.2

%

NOW & MMDA229,730

20.9

%

192,950

18.8

%

136,356

14.3

%

117,450

12.1

%

123,477

12.5

%

Savings61,631

5.6

%

68,244

6.6

%

64,659

6.8

%

67,060

6.9

%

63,978

6.5

%

TCDs of $250K and under230,230

20.9

%

241,718

23.5

%

273,624

28.8

%

328,058

33.7

%

342,670

34.6

%

TCDs of $250K over146,911

13.3

%

139,197

13.5

%

154,108

16.2

%

158,009

16.2

%

165,910

16.8

%

Wholesale TCDs69,538

6.3

%

90,538

8.8

%

110,538

11.6

%

93,245

9.6

%

93,245

9.4

%

Total Deposits$

1,101,390

100.0

%

$

1,027,650

$

1

$

950,424

100.0

%

$

973,306

100.0

%

$

989,314

100.0

%

Recap:Noninterest-bearing demand$

363,350

33.0

%

$

295,003

28.7

%

$

211,139

22.2

%

$

209,484

21.5

%

$

200,034

20.2

%

NOW & MMDA229,730

20.9

%

192,950

18.8

%

136,356

14.3

%

117,450

12.1

%

123,477

12.5

%

Savings61,631

5.6

%

68,244

6.6

%

64,659

6.8

%

67,060

6.9

%

63,978

6.5

%

TCDs of $250K and under230,230

20.9

%

241,718

23.5

%

273,624

28.8

%

328,058

33.7

%

342,670

34.6

%

Core Deposits884,941

80.3

%

797,915

77.6

%

685,778

72.2

%

722,052

74.2

%

730,159

73.8

%

TCDs of $250K over146,911

13.3

%

139,197

13.5

%

154,108

16.2

%

158,009

16.2

%

165,910

16.8

%

Wholesale TCDs69,538

6.3

%

90,538

8.8

%

110,538

11.6

%

93,245

9.6

%

93,245

9.4

%

Noncore Deposits216,449

19.7

%

229,735

22.4

%

264,646

27.8

%

251,254

25.8

%

259,155

26.2

%

Total Deposits$

1,101,390

100.0

%

$

1,027,650

100.0

%

$

950,424

100.0

%

$

973,306

100.0

%

$

989,314

100.0

%

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands) September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 Balance % Balance % Balance % Balance % Balance % Noninterest-bearing $ 363,350 33.0 % $ 295,003 28.7 % $ 211,139 22.2 % $ 209,484 21.5 % $ 200,034 20.2 %demandNOW & MMDA 229,730 20.9 % 192,950 18.8 % 136,356 14.3 % 117,450 12.1 % 123,477 12.5 %

Savings 61,631 5.6 % 68,244 6.6 % 64,659 6.8 % 67,060 6.9 % 63,978 6.5 %

TCDs of $250K and under 230,230 20.9 % 241,718 23.5 % 273,624 28.8 % 328,058 33.7 % 342,670 34.6 %

TCDs of $250K over 146,911 13.3 % 139,197 13.5 % 154,108 16.2 % 158,009 16.2 % 165,910 16.8 %

Wholesale TCDs 69,538 6.3 % 90,538 8.8 % 110,538 11.6 % 93,245 9.6 % 93,245 9.4 %

Total Deposits $ 1,101,390 100.0 % $ 1,027,650 $ 1 $ 950,424 100.0 % $ 973,306 100.0 % $ 989,314 100.0 %

Recap:Noninterest-bearing $ 363,350 33.0 % $ 295,003 28.7 % $ 211,139 22.2 % $ 209,484 21.5 % $ 200,034 20.2 %demandNOW & MMDA 229,730 20.9 % 192,950 18.8 % 136,356 14.3 % 117,450 12.1 % 123,477 12.5 %

Savings 61,631 5.6 % 68,244 6.6 % 64,659 6.8 % 67,060 6.9 % 63,978 6.5 %

TCDs of $250K and under 230,230 20.9 % 241,718 23.5 % 273,624 28.8 % 328,058 33.7 % 342,670 34.6 %

Core Deposits 884,941 80.3 % 797,915 77.6 % 685,778 72.2 % 722,052 74.2 % 730,159 73.8 %

TCDs of $250K over 146,911 13.3 % 139,197 13.5 % 154,108 16.2 % 158,009 16.2 % 165,910 16.8 %

Wholesale TCDs 69,538 6.3 % 90,538 8.8 % 110,538 11.6 % 93,245 9.6 % 93,245 9.4 %

Noncore Deposits 216,449 19.7 % 229,735 22.4 % 264,646 27.8 % 251,254 25.8 % 259,155 26.2 %

Total Deposits $ 1,101,390 100.0 % $ 1,027,650 100.0 % $ 950,424 100.0 % $ 973,306 100.0 % $ 989,314 100.0 %

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

2020

2020

2019

2019

Allowance for Loan LossesBalance at beginning of period$

12,283

$

11,034

$

10,596

$

9,978

$

10,019

Provision for loan losses1,600

1,600

700

700

300

Charge-offs(292

)

(359

)

(284

)

(94

)

(385

)

Recoveries23

8

22

12

44

Balance at the end of period$

13,614

$

12,283

$

11,034

$

10,596

$

9,978

Nonperforming Assets:^1Over 90 days still accruing$

200

$

-

$

-

$

-

$

-

Nonaccrual loans3,911

4,189

6,901

8,030

5,123

Total nonperforming loans4,111

4,189

6,901

8,030

5,123

Other real estate owned-

-

364

362

11

Total nonperforming assets$

4,111

$

4,189

$

7,265

$

8,392

$

5,134

Classified Assets:^1Substandard$

20,579

$

9,909

$

13,301

$

14,497

$

8,965

Doubtful-

-

-

-

-

Loss-

-

-

-

-

Total classified loans$

20,579

$

9,909

$

13,301

$

14,497

$

8,965

Other real estate owned-

-

364

362

11

Total classified assets$

20,579

$

9,909

$

13,665

$

14,859

$

8,976

Performing TDR loans:$

1,073

$

1,073

$

508

$

592

$

1,040

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

714

$

721

$

2,172

$

43

$

285

90 days or more past due and still accruing200

-

-

-

-

Nonaccrual3,911

4,189

6,901

8,030

5,123

Total delinquent loans$

4,825

$

4,910

$

9,073

$

8,073

$

5,408

Asset Quality Ratios:Net (recoveries) charge-offs to average loans?0.10

%

0.14

%

0.11

%

0.03

%

0.15

%

Nonaccrual loans to loans receivable0.39

%

0.42

%

0.74

%

0.89

%

0.57

%

Nonperforming loans to loans receivable0.41

%

0.42

%

0.74

%

0.89

%

0.57

%

Nonperforming assets to total assets0.29

%

0.31

%

0.60

%

0.72

%

0.44

%

Classified loans to loans receivable2.03

%

0.99

%

1.43

%

1.60

%

0.99

%

Classified loans to Tier 1 and ALLL12.13

%

6.00

%

8.27

%

9.14

%

5.78

%

Classified assets to total assets1.47

%

0.74

%

1.14

%

1.28

%

0.77

%

Classified assets to Tier 1 and ALLL12.13

%

6.00

%

8.50

%

9.36

%

5.78

%

ALLL to loans receivable1.35

%

1.22

%

1.18

%

1.17

%

1.10

%

ALLL to loans receivable exc. SBA PPP loans1.48

%

1.34

%

ALLL to nonaccrual loans348.10

%

293.22

%

159.89

%

131.96

%

194.77

%

ALLL to nonperforming loans331.16

%

293.22

%

159.89

%

131.96

%

194.77

%

ALLL to nonperforming assets331.16

%

293.22

%

151.88

%

126.26

%

194.35

%

Texas ratio ?2.42

%

2.54

%

4.52

%

5.29

%

3.31

%

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) 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2020 2020 2020 2019 2019

Allowance for LoanLossesBalance at $ 12,283 $ 11,034 $ 10,596 $ 9,978 $ 10,019 beginning of periodProvision for loan 1,600 1,600 700 700 300 lossesCharge-offs (292 ) (359 ) (284 ) (94 ) (385 )

Recoveries 23 8 22 12 44

Balance at the end $ 13,614 $ 12,283 $ 11,034 $ 10,596 $ 9,978 of period NonperformingAssets:^1Over 90 days still $ 200 $ - $ - $ - $ - accruingNonaccrual loans 3,911 4,189 6,901 8,030 5,123

Total nonperforming 4,111 4,189 6,901 8,030 5,123 loans Other real estate - - 364 362 11 ownedTotal nonperforming $ 4,111 $ 4,189 $ 7,265 $ 8,392 $ 5,134 assets Classified Assets:^1Substandard $ 20,579 $ 9,909 $ 13,301 $ 14,497 $ 8,965

Doubtful - - - - -

Loss - - - - -

Total classified $ 20,579 $ 9,909 $ 13,301 $ 14,497 $ 8,965 loans Other real estate - - 364 362 11 ownedTotal classified $ 20,579 $ 9,909 $ 13,665 $ 14,859 $ 8,976 assets Performing TDR $ 1,073 $ 1,073 $ 508 $ 592 $ 1,040 loans: Delinquent Loans:^1Loans 30-89 days $ 714 $ 721 $ 2,172 $ 43 $ 285 past due90 days or more 200 - - - - past due and stillaccruingNonaccrual 3,911 4,189 6,901 8,030 5,123

Total delinquent $ 4,825 $ 4,910 $ 9,073 $ 8,073 $ 5,408 loans Asset QualityRatios:Net (recoveries) 0.10 % 0.14 % 0.11 % 0.03 % 0.15 %charge-offs toaverage loans?Nonaccrual loans to 0.39 % 0.42 % 0.74 % 0.89 % 0.57 %loans receivableNonperforming loans 0.41 % 0.42 % 0.74 % 0.89 % 0.57 %to loans receivableNonperforming 0.29 % 0.31 % 0.60 % 0.72 % 0.44 %assets to totalassetsClassified loans to 2.03 % 0.99 % 1.43 % 1.60 % 0.99 %loans receivableClassified loans to 12.13 % 6.00 % 8.27 % 9.14 % 5.78 %Tier 1 and ALLLClassified assets 1.47 % 0.74 % 1.14 % 1.28 % 0.77 %to total assetsClassified assets 12.13 % 6.00 % 8.50 % 9.36 % 5.78 %to Tier 1 and ALLLALLL to loans 1.35 % 1.22 % 1.18 % 1.17 % 1.10 %receivableALLL to loans 1.48 % 1.34 %receivable exc. SBAPPP loansALLL to nonaccrual 348.10 % 293.22 % 159.89 % 131.96 % 194.77 %loansALLL to 331.16 % 293.22 % 159.89 % 131.96 % 194.77 %nonperforming loansALLL to 331.16 % 293.22 % 151.88 % 126.26 % 194.35 %nonperformingassetsTexas ratio ? 2.42 % 2.54 % 4.52 % 5.29 % 3.31 %

^1 Net of SBAguaranteed balance^2 Includes loansheld-for-sale^3 Nonperforming assets divided by tangible common equity and ALLLFIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11Well CapitalizedAdequately CapitalizedRegulatoryBASEL IIISeptember 30,June 30,March 31,December 31,September 30,RequirementFully Phased In2020

2020

2020

2019

2019

Leverage ratioCompanyN/A

N/A

11.76

%

11.98

%

13.17

%

12.59

%

12.14

%

Bank5.00

%

4.00

%

11.72

%

11.94

%

13.12

%

12.55

%

12.10

%

Common equity tier 1 risk-based capital ratioCompanyN/A

N/A

15.24

%

15.23

%

14.82

%

14.96

%

14.71

%

Bank6.50

%

7.00

%

15.20

%

15.18

%

14.77

%

14.91

%

14.66

%

Tier 1 risk-based capital ratioCompanyN/A

N/A

15.24

%

15.23

%

14.82

%

14.96

%

14.71

%

Bank8.00

%

8.50

%

15.20

%

15.18

%

14.77

%

14.91

%

14.66

%

Total risk-based capital ratioCompanyN/A

N/A

16.50

%

16.48

%

16.01

%

16.13

%

15.80

%

Bank10.00

%

10.50

%

16.45

%

16.43

%

15.95

%

16.08

%

15.75

%

Common equity/total assets11.15

%

11.37

%

12.46

%

12.74

%

12.52

%

Common equity per share$

15.23

$

14.92

$

14.63

$

14.52

$

14.28

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11 Well Adequately Capitalized Capitalized Regulatory BASEL III September June 30, March 31, December September 30, 31, 30, Requirement Fully 2020 2020 2020 2019 2019 Phased In Leverage ratio Company N/A N/A 11.76 % 11.98 % 13.17 % 12.59 % 12.14 %

Bank 5.00 % 4.00 % 11.72 % 11.94 % 13.12 % 12.55 % 12.10 %

Common equity tier 1 risk-based capital ratio Company N/A N/A 15.24 % 15.23 % 14.82 % 14.96 % 14.71 %

Bank 6.50 % 7.00 % 15.20 % 15.18 % 14.77 % 14.91 % 14.66 %

Tier 1 risk-based capital ratio Company N/A N/A 15.24 % 15.23 % 14.82 % 14.96 % 14.71 %

Bank 8.00 % 8.50 % 15.20 % 15.18 % 14.77 % 14.91 % 14.66 %

Total risk-based capital ratio Company N/A N/A 16.50 % 16.48 % 16.01 % 16.13 % 15.80 %

Bank 10.00 % 10.50 % 16.45 % 16.43 % 15.95 % 16.08 % 15.75 %

Common equity 11.15 % 11.37 % 12.46 % 12.74 % 12.52 % /total assets Common equity $ 15.23 $ 14.92 $ 14.63 $ 14.52 $ 14.28 per shareMARGIN ANALYSIS (Unaudited) -Table 12(Dollars in thousands)Three Months EndedSeptember 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019Avg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1$

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

%

$

932,004

$

14,528

6.18

%

Investment securities?90,450

471

2.07

%

91,401

546

2.40

%

94,375

581

2.48

%

96,005

621

2.57

%

98,866

650

2.61

%

Interest-earning deposits at the FRB and other banks186,678

58

0.12

%

137,945

45

0

55,222

188

1.37

%

99,297

410

1.64

%

111,437

611

2.18

%

Other earning assets8,196

80

3.88

%

8,195

93

4.56

%

8,194

122

5.99

%

8,194

152

7.36

%

8,194

145

7.02

%

Total interest-earning assets ?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

%

1,150,501

15,934

5.49

%

Total interest-earning assets exc. SBA PPP loans?1,239,609

12,657

4.06

%

1,193,346

12,775

4.31

%

NONINTEREST-EARNING ASSETSCash and due from banks10,685

8,224

9,056

9,084

9,769

Other noninterest-earning assets31,216

32,285

30,050

30,746

31,552

Total noninterest-earning assets41,901

40,509

39,106

39,830

41,321

Less: Allowance for loan losses(12,293

)

(10,931

)

(10,594

)

(9,969

)

(10,004

)

TOTAL ASSETS$

1,361,610

$

1,285,715

$

1,127,450

$

1,163,812

$

1,181,818

INTEREST-BEARING DEPOSITSInterest-bearing demand$

11,248

$

4

0.14

%

$

13,634

$

5

0.15

%

$

12,041

$

5

0.17

%

$

10,176

$

5

0.19

%

$

8,453

$

5

0.23

%

Money market200,878

404

0.80

%

163,332

374

0.92

%

116,550

401

1.38

%

113,444

433

1.51

%

130,079

596

1.82

%

Savings67,880

154

0.90

%

66,389

176

1.07

%

66,955

251

1.51

%

66,232

284

1.70

%

55,995

283

2.01

%

Time deposits452,950

1,790

1.57

%

509,447

2,613

2.06

%

555,784

3,297

2.39

%

594,658

3,753

2.50

%

630,044

4,051

2.55

%

Total interest-bearing deposits732,956

2,352

1.28

%

752,802

3,168

1.69

%

751,330

3,954

2.12

%

784,510

4,475

2.26

%

824,571

4,935

2.37

%

Borrowings147,149

206

0.56

%

115,613

174

0.61

%

9,874

27

1.10

%

10,209

42

1.63

%

10,000

42

1.67

%

Total interest-bearing liabilities880,105

2,558

1.16

%

868,415

3,342

1.55

%

761,204

3,981

2.10

%

794,719

4,517

2.25

%

834,571

4,977

2.37

%

Total interest-bearing liabilities exc. SBA PPP loan funding787,712

2,476

1.25

%

805,624

3,287

1.64

%

Noninterest-bearing deposits313,370

249,909

199,721

205,449

187,740

Other liabilities12,750

15,141

16,018

15,805

15,832

Stockholders' equity155,385

152,250

150,507

147,839

143,675

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,361,610

$

1,285,715

$

1,127,450

$

1,163,812

$

1,181,818

Net interest income?$

10,701

$

9,910

$

10,539

$

10,785

$

10,957

Net interest income exc. SBA PPP Loans?$

10,181

$

9,488

Net interest spread2.80

%

2.69

%

3.21

%

3.10

%

3.12

%

Effect of noninterest-bearing sources0.40

%

0.48

%

0.65

%

0.67

%

0.66

%

Net interest margin?3.20

%

3.17

%

3.86

%

3.77

%

3.78

%

Net interest margin exc. SBA PPP loans?3.27

%

3.20

%

Cost of deposits$

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

%

$

1,012,311

$

4,935

1.93

%

Cost of funds$

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

%

$

1,022,311

$

4,977

1.93

%

Cost of funds exc. SBA ppp loan funding$

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 rate MARGIN ANALYSIS (Unaudited) -Table 12(Dollars in thousands) Three Months Ended September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 September 30, 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 $ 1,046,678 $ 12,650 4.81 % $ 1,018,596 $ 12,568 4.96 % $ 941,147 $ 13,629 5.82 % $ 930,455 $ 14,119 6.02 % $ 932,004 $ 14,528 6.18 %

Investment securities? 90,450 471 2.07 % 91,401 546 2.40 % 94,375 581 2.48 % 96,005 621 2.57 % 98,866 650 2.61 %

Interest-earning deposits 186,678 58 0.12 % 137,945 45 0 55,222 188 1.37 % 99,297 410 1.64 % 111,437 611 2.18 %at the FRB and other banksOther earning assets 8,196 80 3.88 % 8,195 93 4.56 % 8,194 122 5.99 % 8,194 152 7.36 % 8,194 145 7.02 %

Total interest-earning 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 % 1,150,501 15,934 5.49 %assets ?Total interest-earning 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 10,685 8,224 9,056 9,084 9,769

Other noninterest-earning 31,216 32,285 30,050 30,746 31,552 assetsTotal noninterest-earning 41,901 40,509 39,106 39,830 41,321 assets Less: Allowance for loan (12,293 ) (10,931 ) (10,594 ) (9,969 ) (10,004 )lossesTOTAL ASSETS $ 1,361,610 $ 1,285,715 $ 1,127,450 $ 1,163,812 $ 1,181,818

INTEREST-BEARING DEPOSITSInterest-bearing demand $ 11,248 $ 4 0.14 % $ 13,634 $ 5 0.15 % $ 12,041 $ 5 0.17 % $ 10,176 $ 5 0.19 % $ 8,453 $ 5 0.23 %

Money market 200,878 404 0.80 % 163,332 374 0.92 % 116,550 401 1.38 % 113,444 433 1.51 % 130,079 596 1.82 %

Savings 67,880 154 0.90 % 66,389 176 1.07 % 66,955 251 1.51 % 66,232 284 1.70 % 55,995 283 2.01 %

Time deposits 452,950 1,790 1.57 % 509,447 2,613 2.06 % 555,784 3,297 2.39 % 594,658 3,753 2.50 % 630,044 4,051 2.55 %

Total interest-bearing 732,956 2,352 1.28 % 752,802 3,168 1.69 % 751,330 3,954 2.12 % 784,510 4,475 2.26 % 824,571 4,935 2.37 %deposits Borrowings 147,149 206 0.56 % 115,613 174 0.61 % 9,874 27 1.10 % 10,209 42 1.63 % 10,000 42 1.67 %

Total interest-bearing 880,105 2,558 1.16 % 868,415 3,342 1.55 % 761,204 3,981 2.10 % 794,719 4,517 2.25 % 834,571 4,977 2.37 %liabilitiesTotal interest-bearing 787,712 2,476 1.25 % 805,624 3,287 1.64 %liabilities exc. SBA PPPloan funding Noninterest-bearing 313,370 249,909 199,721 205,449 187,740 depositsOther liabilities 12,750 15,141 16,018 15,805 15,832

Stockholders' equity 155,385 152,250 150,507 147,839 143,675

TOTAL LIABILITIES & $ 1,361,610 $ 1,285,715 $ 1,127,450 $ 1,163,812 $ 1,181,818 STOCKHOLDERS' EQUITY Net interest income? $ 10,701 $ 9,910 $ 10,539 $ 10,785 $ 10,957

Net interest income exc. $ 10,181 $ 9,488SBA PPP Loans? Net interest spread 2.80 % 2.69 % 3.21 % 3.10 % 3.12 %

Effect of 0.40 % 0.48 % 0.65 % 0.67 % 0.66 %noninterest-bearing sources Net interest margin? 3.20 % 3.17 % 3.86 % 3.77 % 3.78 %

Net interest margin exc. 3.27 % 3.20 %SBA PPP loans? Cost of deposits $ 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 % $ 1,012,311 $ 4,935 1.93 %

Cost of funds $ 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 % $ 1,022,311 $ 4,977 1.93 %

Cost of funds exc. SBA ppp $ 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 Ended

September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019AmountYieldAmountYieldAmountYieldAmountYieldAmountYieldContractual yield$

11,522

4.38

%

$

11,578

4.57

%

$

12,445

5.32

%

$

12,911

5.51

%

$

13,481

5.74

%

SBA discount accretion615

0.23

%

662

0.26

%

1,190

0.51

%

1,195

0.51

%

1,058

0.45

%

Prepayment penalties & late fees221

0.09

%

24

0.01

%

106

0.04

%

172

0.07

%

82

0.03

%

Amortization of net deferred costs292

0.11

%

304

0.12

%

(112

)

(0.05

%)

(159

)

(0.07

%)

(93

)

(0.04

%)

As reported yield on loans$

12,650

4.81

%

$

12,568

4.96

%

$

13,629

5.82

%

$

14,119

6.02

%

$

14,528

6.18

%

COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13

(Dollars in thousands)

Three Months Ended

September 30, June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 2020 Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Contractual $ 11,522 4.38 % $ 11,578 4.57 % $ 12,445 5.32 % $ 12,911 5.51 % $ 13,481 5.74 %yieldSBA discount 615 0.23 % 662 0.26 % 1,190 0.51 % 1,195 0.51 % 1,058 0.45 %accretionPrepayment 221 0.09 % 24 0.01 % 106 0.04 % 172 0.07 % 82 0.03 %penalties &late feesAmortizationof net 292 0.11 % 304 0.12 % (112 ) (0.05 %) (159 ) (0.07 %) (93 ) (0.04 %)deferredcostsAs reported $ 12,650 4.81 % $ 12,568 4.96 % $ 13,629 5.82 % $ 14,119 6.02 % $ 14,528 6.18 %yield onloansMARGIN ANALYSIS (Unaudited) - Table 14(Dollars in thousands)Nine Months EndedSeptember 30, 2020September 30, 2019Avg BalanceInterestYieldAvg BalanceInterestYieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1$

1,002,303

$

38,847

5.18

%

$

927,415

$

43,854

6.32

%

SBA PPP Loans

51,876

1,079

2.78

%

-

-

Investment securities?92,070

1,598

2.32

%

100,878

2,020

2.68

%

Interest-earning deposits at the FRB and other banks126,835

291

0.31

%

94,951

1,628

2.29

%

Other earning assets8,195

295

4.81

%

8,066

407

6.75

%

Total interest-earning assets ?1,229,403

41,031

4.46

%

1,131,310

47,909

5.66

%

Total interest-earning assets exc. SBA PPP loans?1,177,527

39,952

4.53

%

NONINTEREST-EARNING ASSETSCash and due from banks9,327

11,214

Other noninterest-earning assets31,124

30,697

Total noninterest-earning assets40,451

41,911

Less: Allowance for loan losses(11,277

)

(9,918

)

TOTAL ASSETS$

1,258,577

$

1,163,303

INTEREST-BEARING DEPOSITSInterest-bearing demand$

12,303

$

14

0.15

%

$

8,643

$

16

0.25

%

Money market160,402

1,179

0.98

%

148,506

2,084

1.88

%

Savings67,078

581

1.16

%

38,486

582

2.02

%

Time deposits505,867

7,700

2.03

%

619,531

11,333

2.45

%

Total interest-bearing deposits745,650

9,474

1.70

%

815,166

14,015

2.30

%

Borrowings91,084

407

0.60

%

10,017

124

1.66

%

Total interest-bearing liabilities836,734

9,881

1.58

%

825,183

14,139

2.29

%

Total interest-bearing liabilities exc. SBA PPP loans784,858

9,745

1.66

%

Noninterest-bearing deposits254,549

184,804

Other Liabilities14,571

14,335

Stockholders' equity152,723

138,981

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,258,577

$

1,163,303

Net interest income?$

31,150

$

33,770

Net interest income exc. SBA PPP loans?$

30,207

Net interest spread2.88

%

3.37

%

Effect of noninterest-bearing sources0.50

%

0.62

%

Net interest margin?3.38

%

3.99

%

Net interest margin exc. SBA PPP loans?3.43

%

Cost of deposits$

1,000,199

$

9,474

1.27

%

$

999,970

$

14,015

1.87

%

Cost of funds$

1,091,283

$

9,881

1.21

%

$

1,009,987

$

14,139

1.87

%

Cost of funds exc. SBA PPP loan funding$

1,039,407

$

9,745

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 14(Dollars in thousands) Nine Months Ended September 30, 2020 September 30, 2019 Avg Balance Interest Yield Avg Balance Interest YieldNumber of Days inthe PeriodINTEREST-EARNINGASSETSLoans ^1 $ 1,002,303 $ 38,847 5.18 % $ 927,415 $ 43,854 6.32 %

SBA PPP Loans 51,876 1,079 2.78 % - -

Investment 92,070 1,598 2.32 % 100,878 2,020 2.68 %securities?Interest-earning 126,835 291 0.31 % 94,951 1,628 2.29 %deposits at the FRBand other banksOther earning 8,195 295 4.81 % 8,066 407 6.75 %assetsTotal 1,229,403 41,031 4.46 % 1,131,310 47,909 5.66 %interest-earningassets ?Totalinterest-earning 1,177,527 39,952 4.53 %assets exc. SBA PPPloans? NONINTEREST-EARNINGASSETSCash and due from 9,327 11,214 banksOther 31,124 30,697 noninterest-earningassetsTotal 40,451 41,911 noninterest-earningassets Less: Allowance for (11,277 ) (9,918 )loan losses TOTAL ASSETS $ 1,258,577 $ 1,163,303

INTEREST-BEARINGDEPOSITSInterest-bearing $ 12,303 $ 14 0.15 % $ 8,643 $ 16 0.25 %demandMoney market 160,402 1,179 0.98 % 148,506 2,084 1.88 %

Savings 67,078 581 1.16 % 38,486 582 2.02 %

Time deposits 505,867 7,700 2.03 % 619,531 11,333 2.45 %

Total 745,650 9,474 1.70 % 815,166 14,015 2.30 %interest-bearingdeposits Borrowings 91,084 407 0.60 % 10,017 124 1.66 %

Total 836,734 9,881 1.58 % 825,183 14,139 2.29 %interest-bearingliabilitiesTotalinterest-bearing 784,858 9,745 1.66 %liabilities exc.SBA PPP loans Noninterest-bearing 254,549 184,804 depositsOther Liabilities 14,571 14,335

Stockholders' 152,723 138,981 equity TOTAL LIABILITIES & $ 1,258,577 $ 1,163,303 STOCKHOLDERS'EQUITY Net interest $ 31,150 $ 33,770income?Net interest income $ 30,207exc. SBA PPP loans? Net interest spread 2.88 % 3.37 %

Effect of 0.50 % 0.62 %noninterest-bearingsources Net interest 3.38 % 3.99 %margin?Net interest margin 3.43 %exc. SBA PPP loans? Cost of deposits $ 1,000,199 $ 9,474 1.27 % $ 999,970 $ 14,015 1.87 %

Cost of funds $ 1,091,283 $ 9,881 1.21 % $ 1,009,987 $ 14,139 1.87 %

Cost of funds exc. $ 1,039,407 $ 9,745 1.25 %SBA PPP loanfunding ^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 15(Dollars in thousands)Nine Months EndedSeptember 30, 2020September 30, 2019AmountYieldAmountYieldContractual yield$

35,545

4.74

%

$

40,826

5.88

%

SBA discount accretion2,467

0.33

%

3,304

0.48

%

Prepayment penalties & late fees351

0.05

%

193

0.03

%

Amortization of net deferred costs484

0.06

%

(469

)

(0.07

%)

As reported yield on loans$

38,847

5.18

%

$

43,854

6.32

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20201029005031/en/

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