Business Wire | Jul 29, 2021 08:18PM EDT

CBB Bancorp, Inc. Reports Second Quarter 2021 Financial Results

Jul. 30, 2021

LOS ANGELES--(BUSINESS WIRE)--Jul. 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 second quarter 2021 of $6.3 million, or $0.61 per diluted share, an increase of 18.2%, compared to $5.3 million, or $0.52 per diluted share, in the prior quarter and 281.5% compared to $1.7 million, or $0.16 per diluted share, in the same period last year.

Overall Results

Net income for second quarter 2021 was positively affected by improving credit quality and continued balance sheet growth. The Company's return on average assets for second quarter 2021 was 1.70% compared to 1.58% for first quarter 2021 and 0.52% for second quarter 2020. Its return on average equity for second quarter 2021 was 14.91%, compared to 13.26% for first quarter 2021 and 4.36% for second quarter 2020. The Company's net interest margin for second quarter 2021 was 3.75%, compared to 3.90% for first quarter 2021 and 3.17% for second quarter 2020. Its efficiency ratio for second quarter 2021 was 52.24%, compared to 51.78% for first quarter 2021 and 66.02% for second quarter 2020.

Joanne Kim, President and CEO, commented, "We are pleased to announce record quarterly earnings for the second consecutive quarter. With positive trends in our balance sheet growth and asset quality, we look forward to further growth in the second half of the year. We are excited about the completion of the acquisition of Ohana Pacific Bank on July 1, 2021 and the opportunities this Hawaii base of operations will provide."

Net Interest Income and Margin

Net Interest Income

Net interest income for second quarter 2021 was $13.6 million, an increase of $726 thousand, or 5.7%, from first quarter 2021, and an increase of $3.7 million, or 37.5%, from second quarter 2020. The increase in net interest income was driven by loan growth, as well as our continuing to aggressively reduce 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 second quarter 2021 was 3.75% compared to 3.90% for first quarter 2021 and 3.17% for second quarter 2020. The decrease in net interest margin compared to first quarter 2021 was due to a substantial increase in due from bank balances in the quarter, which reduced the average yield on interest earning assets. The larger than usual due from bank balances were due in part to the all-cash acquisition of Ohana Pacific Bank that was still pending as of June 30, 2021. The lower yield on earning assets was partially offset by a downward repricing of our time deposits and growth in our demand deposits. Our cost of funds for second quarter 2021 decreased to 0.42% from 0.52% for first quarter 2021 and 1.20% for second quarter 2020.

Provision for Loan Losses:

The Company made no provision for loan losses for second quarter 2021, compared to $500 thousand for first quarter 2021 and $1.6 million for second quarter 2020. No provision was required during the current quarter due to the absence of charge-offs, and continuing signs of an improving economy. See Table 10 for additional information and trends.

Noninterest Income:

Noninterest income for second quarter 2021 was $5.0 million, compared to $3.7 million for first quarter 2021 and $1.5 million for second quarter 2020. The increase in noninterest income in second quarter 2021 was primarily the result of increased gains on sales of loans. Sales of SBA loans were $42.2 million with an average premium percentage received of 11.9% during the second quarter of 2021, compared with SBA loan sales of $30.2 million with an average premium percentage received of 10.9% during the first quarter of 2021 and SBA loan sales of $9.8 million with an average premium percentage received of 8.6% during the second quarter of 2020. The increased gain on sale of SBA loans was partially offset by a decline in SBA servicing fees during the current quarter due to a higher level of payoffs during the period.

Noninterest Expense:

Noninterest expense for second quarter 2021 was $9.7 million, compared to $8.6 million for first quarter 2021 and $7.5 million for second quarter 2020. Salaries and employee benefits increased by $1.1 million to $6 million in second quarter 2021, compared to $4.9 million in the prior quarter, due to the effect of higher incentive payments made related to loan originations and a decrease in the amount of compensation deferred as loan origination costs.

Income Taxes:

The Company' s effective tax rate for second quarter 2021 was 28.9% compared to 28.6% for first quarter 2021 and 27.0% for second quarter 2020.

Balance Sheet:

Investment Securities:

Investment securities were $82.4 million at June 30, 2021, a decrease of $1.1 million from March 31, 2021 and $8.7 million from June 30, 2020. The decreases were due to principal paydowns. There were no portfolio additions in second quarter 2021, or in the first quarter 2021 or second quarter 2020.

Loans Receivable:

Loans receivable (including loans held for sale) at June 30, 2021 was $1.23 billion, an increase of $40.2 million, or 3.4%, from loans receivable at March 31, 2021, and an increase of $192.5 million, or 18.6%, from loans receivable at June 30, 2020.

Loan payment deferments to our commercial borrowers under the CARES Act have continued to decline since the first round of deferments that began during the second quarter of 2020. As of June 30, 2021, five loans totaling $29.7 million remain on modified payment terms. This is a decline from $50.4 million of such loans at March 31, 2021, and $298.7 million of such loans at June 30, 2020. No additional modification requests are currently in process.

Our weighted average loan-to-value ratio of commercial real estate loans was 72.4% at June 30, 2021. Excluding SBA loans, our weighted average loan-to-value of CRE loans was 55.9%. For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 2Q 2021 Overview and COVID-19 update presentation.

Paycheck Protection Program (PPP):

PPP loans totaled $85.4 million at June 30, 2021. Net unearned fees on PPP loans as of June 30, 2021 was $2.4 million, which fees are being accreted to income based on a two-year contractual maturity. The SBA approved $26.5 million in PPP loan forgiveness applications processed for our PPP loans in second quarter 2021.

Allowance for Loan Losses and Asset Quality:

Our allowance for loan losses at June 30, 2021 was $14.9 million, or 1.32% of portfolio loans, compared to $14.9 million, or 1.34% of portfolio loans, at March 31 2021 and compared to $12.3 million, or 1.22% of portfolio loans, at June 30, 2020. Excluding PPP loans of $85.4 million, which are government guaranteed, the allowance for loan losses at June 30, 2021 was 1.42%, compared to 1.48% and 1.34%, respectively, at March 31 2021 and June 30, 2020. Non-performing loans remained unchanged at $1.3 million over the quarter. 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 2Q 2021 Overview and COVID-19 update presentation.

SBA Loans Held for Sale:

SBA loans held for sale at June 30, 2021 were $96.6 million, compared to $76.1 million at March 31 2021 and $32.3 million at June 30, 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 $1.38 billion at June 30, 2021, up $187.2 million, or 15.7% from March 31 2021 and up $351.0 million, or 34.2%, from June 30, 2020. Noninterest-bearing demand deposits ("DDAs") increased $163.5 million, or 40.0%, to $572.3 million at June 30, 2021 from March 31 2021 and increased $277.3 million, or 94.0%, from June 30, 2020. DDAs were 41.5% of total deposits at June 30, 2021, compared to 34.3% at March 31 2021 and 28.7% at June 30, 2020. NOW and MMDA accounts increased $20.9 million, or 7.7%, to $291.4 million at June 30, 2021 from March 31 2021 and increased $98.5 million, or 51.0%, from June 30, 2020. Time deposits increased $7.7 thousand, or 1.7%, at June 30, 2021 from March 31 2021 and increased $2.2 thousand, or 0.5%, from June 30, 2020. Time deposits at June 30, 2021 were $473.7 million, or 34.4% of total deposits, compared to $466.0 million, or 39.1% of total deposits, at March 31, 2021, and $471.5 million, or 45.9% of total deposits, at June 30, 2020. As noted above, we are focused on increasing demand deposits and reducing our cost of funds.

Borrowings:

Borrowings at June 30, 2021 consisted of $50.0 million of Federal Home Loan Bank of San Francisco (FHLB-SF) advances, compared to $65.0 million of FHLB-SF advances at March 31, 2021. Borrowings at June 30, 2020 were $148.7 million and consisted of $90.0 million of FHLB-SF advances and $58.7 million of FRB PPP Liquidity Facility.

Capital:

Stockholders' equity was $171.2 million at June 30, 2021, representing an increase of $6.1 million, or 3.7%, over stockholders' equity of $165.1 million at March 31, 2021. Book value per share at June 30, 2021 was $16.66, compared with $16.11 at March 31, 2021, an increase of $0.55 per share or 3.4%.

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, as shown on Table 11 in this press release. Our Common Equity Tier 1 risked-based capital at June 30, 2021 was 14.58% at the Company level and 14.55% 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 loans to small-to medium-sized businesses and does business as "CBB Bank." As of July 31, 2021, the Bank has ten full-service branches in Los Angeles and Orange Counties in California, and Dallas County in Texas and Honolulu, Hawaii; 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 2Q 2021 Overview and COVID-19 update presentation.

FORWARD-LOOKING STATEMENTS:

This news release contains forward-looking statements. These statements typically include 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. You should not place undue reliance on such statements. 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 guarantees 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. 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; we may encounter greater difficulty, delay and expense than we anticipate in integrating the personnel and operations of companies we acquire. 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 Six Months Ended June 30, March, 31 $ % June 30, $ % June 30, June 30, $ % 2021 2021 Change Change 2020 Change Change 2021 2020 Change Change

Interest income $ 14,923 $ 14,372 $ 551 3.8 % $ 13,206 $ 1,717 13.0 % $ 29,295 $ 27,679 $ 1,616 5.8 %

Interest expense 1,358 1,533 (175 ) (11.4 %) 3,342 (1,984 ) (59.4 %) 2,891 7,323 (4,432 ) (60.5 %)

Net interest income 13,565 12,839 726 5.7 % 9,864 3,701 37.5 % 26,404 20,356 6,048 29.7 %

Provision for loan - 500 (500 ) (100.0 %) 1,600 (1,600 ) (100.0 %) 500 2,300 (1,800 ) (78.3 %)lossesNet interest income 13,565 12,339 1,226 9.9 % 8,264 5,301 64.1 % 25,904 18,056 7,848 43.5 %after provision forloan losses Gain on sale of loans 3,988 2,456 1,532 62.4 % 509 3,479 683.5 % 6,444 1,448 4,996 345.0 %

Gain (loss) on sale of - - - - 9 (9 ) (100.0 %) - 3 (3 ) (100.0 %)OREOSBA servicing fee 622 847 (225 ) (26.6 %) 738 (116 ) (15.7 %) 1,469 1,110 359 32.3 %income, netReversal of valuation - - - - - - - - - - - allowance on servicingassetsService charges and 395 379 16 4.2 % 251 144 57.4 % 774 647 127 19.6 %other incomeNoninterest income 5,005 3,682 1,323 35.9 % 1,507 3,498 232.1 % 8,687 3,208 5,479 170.8 %

Salaries and employee 6,000 4,853 1,147 23.6 % 4,617 1,383 30.0 % 10,853 10,319 534 5.2 %benefitsOccupancy and 945 979 (34 ) (3.5 %) 943 2 0.2 % 1,924 1,889 35 1.9 %equipmentMarketing expense 309 287 22 7.7 % 279 30 10.8 % 596 737 (141 ) (19.1 %)

Professional expense 491 455 36 7.9 % 500 (9 ) (1.8 %) 946 935 11 1.2 %

Merger related expense 600 681 (81 ) (11.9 %) - 600 100.0 % 1,281 - 1,281 100.0 %

Other expenses 1,356 1,300 56 4.3 % 1,168 188 16.1 % 2,656 2,562 94 3.7 %

Noninterest expense 9,701 8,555 1,146 13.4 % 7,507 2,194 29.2 % 18,256 16,442 1,814 11.0 %

Income before income 8,869 7,466 1,403 18.8 % 2,264 6,605 291.7 % 16,335 4,822 11,513 238.8 %tax expense Income tax expense 2,566 2,132 434 20.4 % 612 1,954 319.3 % 4,698 1,558 3,140 201.5 %

Net income $ 6,303 $ 5,334 $ 969 18.2 % $ 1,652 $ 4,651 281.5 % $ 11,637 $ 3,264 $ 8,373 256.5 %

Effective tax rate 28.9 % 28.6 % 0.4 % 1.3 % 27.0 % 1.9 % 7.0 % 28.8 % 32.3 % (3.5 %) (11.0 %)

Outstanding number of 10,279,962 10,247,292 32,670 0.3 % 10,237,310 42,652 0.4 % 10,279,962 10,237,310 42,652 0.4 %shares Weighted average 10,262,956 10,247,292 15,664 0.2 % 10,237,310 25,646 0.3 % 10,255,167 10,230,728 24,439 0.2 %shares for basic EPSWeighted average 10,392,427 10,300,518 91,909 0.9 % 10,276,637 115,790 1.1 % 10,346,516 10,302,184 44,332 0.4 %shares for diluted EPS Basic EPS $ 0.61 $ 0.52 $ 0.09 17.3 % $ 0.16 $ 0.45 281.3 % $ 1.13 $ 0.32 $ 0.81 253.1 %

Diluted EPS $ 0.61 $ 0.52 $ 0.09 17.3 % $ 0.16 $ 0.45 281.3 % $ 1.13 $ 0.32 $ 0.81 253.1 %

Return on average 1.70 % 1.58 % 0.12 % 7.6 % 0.52 % 1.18 % 226.9 % 1.65 % 0.54 % 1.11 % 205.6 %assetsReturn on average 14.91 % 13.26 % 1.65 % 12.4 % 4.36 % 10.55 % 242.0 % 14.11 % 4.34 % 9.77 % 225.1 %equity Efficiency ratio^1 52.24 % 51.78 % 0.46 % 0.9 % 66.02 % (13.8 %) (20.9 %) 52.02 % 69.78 % (17.76 %) (25.5 %)

Yield on 4.12 % 4.37 % (0.25 %) (5.7 %) 4.24 % (0.12 %) (2.8 %) 4.24 % 4.74 % (0.50 %) (10.5 %)interest-earningassets?Cost of funds 0.42 % 0.52 % (0.10 %) (19.2 %) 1.20 % (0.78 %) (65.0 %) 0.47 % 1.42 % (0.95 %) (66.9 %)

Cost of funds exc. SBA 0.42 % 0.54 % (0.12 %) (22.2 %) 1.25 % (0.83 %) (66.4 %) 0.48 % 1.45 % (0.97 %) (66.9 %)PPP loan fundingNet interest margin? 3.75 % 3.90 % (0.15 %) (3.9 %) 3.17 % 0.58 % 18.3 % 3.82 % 3.49 % 0.33 % 9.5 %

Net interest margin 3.78 % 3.86 % (0.08 %) (2.1 %) 3.20 % 0.58 % 18.1 % 3.82 % 3.51 % 0.31 % 8.8 %exc. SBA PPP loans? ^1 Represents the ratio of noninterest expense less other real estate ownedoperations to the sum of net interest income before provision for credit lossesand total noninterest income, less gains/(loss) on sale of securities,other-than-temporary impairment recovery/(loss) on investment securities andgain/(loss) from other real estate owned.? Amounts calculated on a fully taxable equivalent basis using the currentstatutory federal tax rateBALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2(Dollars in thousands)June 30,March, 31$%June 30,$%2021

2021

ChangeChange2020

ChangeChangeASSETSCash and due from banks$

10,509

$

9,215

$

1,294

14.0

%

$

9,043

$

1,466

16.2

%

Interest-earning deposits at the FRB and other banks240,932

129,713

111,219

85.7

%

179,519

61,413

34.2

%

Investment securities^182,354

83,409

(1,055

)

(1.3

%)

91,091

(8,737

)

(9.6

%)

Loans held-for-sale, at the lower of cost or fair value96,554

76,066

20,488

26.9

%

32,264

64,290

199.3

%

Loans receivable1,133,371

1,113,629

19,742

1.8

%

1,005,128

128,243

12.8

%

Allowance for loan losses(14,908

)

(14,888

)

(20

)

(0.1

%)

(12,283

)

(2,625

)

(21.4

%)

Loans receivable, net1,118,463

1,098,741

19,722

1.8

%

992,845

125,618

12.7

%

OREO-

-

-

-

-

-

-

Restricted stock investments8,850

8,196

654

8.0

%

8,196

654

8.0

%

Servicing assets10,189

10,000

189

1.9

%

8,944

1,245

13.9

%

Other assets45,071

21,431

23,640

110.3

%

21,383

23,688

110.8

%

Total assets$

1,612,922

$

1,436,771

$

176,151

12.3

%

$

1,343,285

$

269,637

20.1

%

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

572,284

$

408,738

$

163,546

40.0

%

$

295,003

$

277,281

94.0

%

Interest-bearing806,397

782,778

23,619

3.0

%

732,647

73,750

10.1

%

Total deposits1,378,681

1,191,516

187,165

15.7

%

1,027,650

351,031

34.2

%

FHLB advances and other borrowing50,000

65,000

(15,000

)

(23.1

%)

148,671

(98,671

)

(66.4

%)

Other liabilities13,026

15,170

(2,144

)

(14.1

%)

14,208

(1,182

)

(8.3

%)

Total liabilities1,441,707

1,271,686

170,021

13.4

%

1,190,529

251,178

21.1

%

Stockholders' Equity171,215

165,085

6,130

3.7

%

152,756

18,459

12.1

%

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,612,922

$

1,436,771

$

176,151

12.3

%

$

1,343,285

$

269,637

20.1

%

CAPITAL RATIOSLeverage ratioCompany11.35

%

11.89

%

(0.54

%)

(4.5

%)

11.98

%

(0.63

%)

(5.2

%)

Bank11.33

%

11.87

%

(0.54

%)

(4.5

%)

11.94

%

(0.61

%)

(5.1

%)

Common equity tier 1 risk-based capital ratioCompany14.39

%

15.00

%

(0.61

%)

(4.1

%)

15.23

%

(0.84

%)

(5.5

%)

Bank14.37

%

14.98

%

(0.61

%)

(4.1

%)

15.18

%

(0.81

%)

(5.3

%)

Tier 1 risk-based capital ratioCompany14.39

%

15.00

%

(0.61

%)

(4.1

%)

15.23

%

(0.84

%)

(5.5

%)

Bank14.37

%

14.98

%

(0.61

%)

(4.1

%)

15.18

%

(0.81

%)

(5.3

%)

Total risk-based capital ratioCompany15.64

%

16.25

%

(0.61

%)

(3.8

%)

16.48

%

(0.84

%)

(5.1

%)

Bank15.62

%

16.23

%

(0.61

%)

(3.8

%)

16.43

%

(0.81

%)

(4.9

%)

Book value per share$

16.66

$

16.11

$

0.55

3.4

%

$

14.92

$

1.74

11.7

%

Loan-to-Deposit (LTD) ratio82.21

%

93.46

%

(11.25

%)

(12.0

%)

97.81

%

(15.60

%)

(15.9

%)

Nonperforming assets$

1,339

$

1,347

$

(8

)

(0.6

%)

$

4,189

$

(2,850

)

(68.0

%)

Nonperforming assets as a % of loans receivable0.12

%

0.12

%

-

-

0.42

%

(0.30

%)

(71.4

%)

ALLL as a % of loans receivable1.32

%

1.34

%

(0.02

%)

(1.5

%)

1.22

%

0.10

%

8.2

%

ALLL as a % of loans receivable exc. SBA PPP loans1.42

%

1.48

%

(0.06

%)

(4.1

%)

1.34

%

0.08

%

6.0

%

^1 Includes AFS and HTMBALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2(Dollars in thousands) June 30, March, 31 $ % June 30, $ % 2021 2021 Change Change 2020 Change Change

ASSETS Cash and due from $ 10,509 $ 9,215 $ 1,294 14.0 % $ 9,043 $ 1,466 16.2 % banks Interest-earning 240,932 129,713 111,219 85.7 % 179,519 61,413 34.2 % deposits at the FRB and other banks Investment 82,354 83,409 (1,055 ) (1.3 %) 91,091 (8,737 ) (9.6 %) securities^1 Loans held-for-sale, at 96,554 76,066 20,488 26.9 % 32,264 64,290 199.3 % the lower of cost or fair value Loans receivable 1,133,371 1,113,629 19,742 1.8 % 1,005,128 128,243 12.8 %

Allowance for loan (14,908 ) (14,888 ) (20 ) (0.1 %) (12,283 ) (2,625 ) (21.4 %) losses Loans receivable, 1,118,463 1,098,741 19,722 1.8 % 992,845 125,618 12.7 % net OREO - - - - - - -

Restricted stock 8,850 8,196 654 8.0 % 8,196 654 8.0 % investments Servicing assets 10,189 10,000 189 1.9 % 8,944 1,245 13.9 %

Other assets 45,071 21,431 23,640 110.3 % 21,383 23,688 110.8 %

Total assets $ 1,612,922 $ 1,436,771 $ 176,151 12.3 % $ 1,343,285 $ 269,637 20.1 %

LIABILITIES ANDSTOCKHOLDERS' EQUITY Noninterest-bearing $ 572,284 $ 408,738 $ 163,546 40.0 % $ 295,003 $ 277,281 94.0 %

Interest-bearing 806,397 782,778 23,619 3.0 % 732,647 73,750 10.1 %

Total deposits 1,378,681 1,191,516 187,165 15.7 % 1,027,650 351,031 34.2 %

FHLB advances and 50,000 65,000 (15,000 ) (23.1 %) 148,671 (98,671 ) (66.4 %) other borrowing Other liabilities 13,026 15,170 (2,144 ) (14.1 %) 14,208 (1,182 ) (8.3 %)

Total liabilities 1,441,707 1,271,686 170,021 13.4 % 1,190,529 251,178 21.1 %

Stockholders' 171,215 165,085 6,130 3.7 % 152,756 18,459 12.1 % EquityTOTAL LIABILITIES & $ 1,612,922 $ 1,436,771 $ 176,151 12.3 % $ 1,343,285 $ 269,637 20.1 %STOCKHOLDERS' EQUITY CAPITAL RATIOS Leverage ratio Company 11.35 % 11.89 % (0.54 %) (4.5 %) 11.98 % (0.63 %) (5.2 %)

Bank 11.33 % 11.87 % (0.54 %) (4.5 %) 11.94 % (0.61 %) (5.1 %)

Common equity tier 1 risk-based capital ratio Company 14.39 % 15.00 % (0.61 %) (4.1 %) 15.23 % (0.84 %) (5.5 %)

Bank 14.37 % 14.98 % (0.61 %) (4.1 %) 15.18 % (0.81 %) (5.3 %)

Tier 1 risk-based capital ratio Company 14.39 % 15.00 % (0.61 %) (4.1 %) 15.23 % (0.84 %) (5.5 %)

Bank 14.37 % 14.98 % (0.61 %) (4.1 %) 15.18 % (0.81 %) (5.3 %)

Total risk-based capital ratio Company 15.64 % 16.25 % (0.61 %) (3.8 %) 16.48 % (0.84 %) (5.1 %)

Bank 15.62 % 16.23 % (0.61 %) (3.8 %) 16.43 % (0.81 %) (4.9 %)

Book value per $ 16.66 $ 16.11 $ 0.55 3.4 % $ 14.92 $ 1.74 11.7 % share Loan-to-Deposit 82.21 % 93.46 % (11.25 %) (12.0 %) 97.81 % (15.60 %) (15.9 %) (LTD) ratio Nonperforming $ 1,339 $ 1,347 $ (8 ) (0.6 %) $ 4,189 $ (2,850 ) (68.0 %) assets Nonperforming 0.12 % 0.12 % - - 0.42 % (0.30 %) (71.4 %) assets as a % of loans receivable ALLL as a % of 1.32 % 1.34 % (0.02 %) (1.5 %) 1.22 % 0.10 % 8.2 % loans receivable ALLL as a % of 1.42 % 1.48 % (0.06 %) (4.1 %) 1.34 % 0.08 % 6.0 % loans receivable exc. SBA PPP loans ^1 Includes AFS andHTMFIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3(Dollars in thousands, except per share amounts)Three Months EndedJune 30,March, 31December, 31September 30,June 30,2021

2021

2020

2020

2020

Interest income$

14,923

$

14,372

$

13,613

$

13,212

$

13,206

Interest expense1,358

1,533

1,830

2,558

3,342

Net interest income13,565

12,839

11,783

10,654

9,864

Provision for loan losses-

500

1,600

1,600

1,600

Net interest income after provision for loan losses13,565

12,339

10,183

9,054

8,264

Gain on sale of loans3,988

2,456

1,484

1,662

509

Gain (loss) on sale of OREO-

-

-

-

9

SBA servicing fee income, net622

847

701

948

738

Reversal of valuation allowance on servicing assets-

-

894

-

-

Service charges and other income395

379

364

385

251

Noninterest income5,005

3,682

3,443

2,995

1,507

Salaries and employee benefits6,000

4,853

5,477

4,948

4,617

Occupancy and equipment945

979

936

938

943

Marketing expense309

287

133

265

279

Professional expense491

455

478

503

500

Merger related expense600

681

40

58

-

Other expenses1,356

1,300

1,329

1,309

1,168

Noninterest expense9,701

8,555

8,393

8,021

7,507

Income before income tax expense8,869

7,466

5,233

4,028

2,264

Income tax expense2,566

2,132

1,519

1,125

612

Net income$

6,303

$

5,334

$

3,714

$

2,903

$

1,652

Effective tax rate28.9

%

28.6

%

29.0

%

27.9

%

27.0

%

Outstanding number of shares10,279,962

10,247,292

10,247,292

10,247,292

10,237,310

Weighted average shares for basic EPS10,262,956

10,247,292

10,247,292

10,244,037

10,237,310

Weighted average shares for diluted EPS10,392,427

10,300,518

10,285,410

10,273,148

10,276,637

Basic EPS$

0.61

$

0.52

$

0.36

$

0.28

$

0.16

Diluted EPS$

0.61

$

0.52

$

0.36

$

0.28

$

0.16

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

Interest $ 14,923 $ 14,372 $ 13,613 $ 13,212 $ 13,206 incomeInterest 1,358 1,533 1,830 2,558 3,342 expenseNet interest 13,565 12,839 11,783 10,654 9,864 income Provision for - 500 1,600 1,600 1,600 loan lossesNet interestincome after 13,565 12,339 10,183 9,054 8,264 provision forloan losses Gain on sale 3,988 2,456 1,484 1,662 509 of loansGain (loss) - - - - 9 on sale ofOREOSBA servicing 622 847 701 948 738 fee income,netReversal ofvaluation - - 894 - - allowance onservicingassetsService 395 379 364 385 251 charges andother incomeNoninterest 5,005 3,682 3,443 2,995 1,507 income Salaries and 6,000 4,853 5,477 4,948 4,617 employeebenefitsOccupancy and 945 979 936 938 943 equipmentMarketing 309 287 133 265 279 expenseProfessional 491 455 478 503 500 expenseMerger 600 681 40 58 - relatedexpenseOther 1,356 1,300 1,329 1,309 1,168 expensesNoninterest 9,701 8,555 8,393 8,021 7,507 expense Income before 8,869 7,466 5,233 4,028 2,264 income taxexpense Income tax 2,566 2,132 1,519 1,125 612 expense Net income $ 6,303 $ 5,334 $ 3,714 $ 2,903 $ 1,652

Effective tax 28.9 % 28.6 % 29.0 % 27.9 % 27.0 %rate Outstanding 10,279,962 10,247,292 10,247,292 10,247,292 10,237,310 number ofshares Weightedaverage 10,262,956 10,247,292 10,247,292 10,244,037 10,237,310 shares forbasic EPSWeightedaverage 10,392,427 10,300,518 10,285,410 10,273,148 10,276,637 shares fordiluted EPS Basic EPS $ 0.61 $ 0.52 $ 0.36 $ 0.28 $ 0.16

Diluted EPS $ 0.61 $ 0.52 $ 0.36 $ 0.28 $ 0.16

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

2021

2020

2020

2020

Salaries and benefits$

6,000

$

4,853

$

5,477

$

4,948

$

4,617

FTE at the end of period183

186

183

179

191

Average FTE during the period182

187

184

181

193

Salaries and benefits/average FTE^1$

132

$

105

$

118

$

109

$

96

Salaries and benefits/average assets^11.62

%

1.44

%

1.58

%

1.45

%

1.44

%

Noninterest expense/average assets^12.62

%

2.54

%

2.42

%

2.34

%

2.35

%

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

Salaries and benefits $ 6,000 $ 4,853 $ 5,477 $ 4,948 $ 4,617

FTE at the end of period 183 186 183 179 191

Average FTE during the 182 187 184 181 193 periodSalaries and benefits/ $ 132 $ 105 $ 118 $ 109 $ 96 average FTE^1Salaries and benefits/ 1.62 % 1.44 % 1.58 % 1.45 % 1.44 %average assets^1Noninterest expense/ 2.62 % 2.54 % 2.42 % 2.34 % 2.35 %average assets^1 ^1 AnnualizedFIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5(Dollars in thousands)June 30,March, 31December, 31September 30,June 30,2021

2021

2020

2020

2019

ASSETSCash and due from banks$

10,509

$

9,215

$

8,750

$

8,030

$

9,043

Interest-earning deposits at the FRB and other banks240,932

129,713

153,908

212,279

179,519

Investment securities^182,354

83,409

85,914

88,784

91,091

Loans held-for-sale, at the lower of cost or fair value96,554

76,066

59,077

53,755

32,264

Loans receivable1,133,371

1,113,629

1,043,662

1,011,867

1,005,128

Allowance for loan losses(14,908

)

(14,888

)

(14,366

)

(13,614

)

(12,283

)

Loans receivable, net1,118,463

1,098,741

1,029,296

998,253

992,845

OREO-

-

-

-

-

Restricted stock investments8,850

8,196

8,196

8,196

8,196

Servicing assets10,189

10,000

9,873

9,043

8,944

Other assets45,071

21,431

20,233

21,064

21,383

Total assets$

1,612,922

$

1,436,771

$

1,375,247

$

1,399,404

$

1,343,285

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

572,284

$

408,738

$

335,219

$

363,350

$

295,003

Interest-bearing806,397

782,778

763,906

738,040

732,647

Total deposits1,378,681

1,191,516

1,099,125

1,101,390

1,027,650

FHLB advances50,000

65,000

105,000

128,671

148,671

Other liabilities13,026

15,170

11,145

13,295

14,208

Total liabilities1,441,707

1,271,686

1,215,270

1,243,356

1,190,529

Stockholders' Equity171,215

165,085

159,977

156,048

152,756

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,612,922

$

1,436,771

$

1,375,247

$

1,399,404

$

1,343,285

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

ASSETS Cash and due from $ 10,509 $ 9,215 $ 8,750 $ 8,030 $ 9,043 banks Interest-earning 240,932 129,713 153,908 212,279 179,519 deposits at the FRB and other banks Investment 82,354 83,409 85,914 88,784 91,091 securities^1 Loans held-for-sale, at 96,554 76,066 59,077 53,755 32,264 the lower of cost or fair value Loans receivable 1,133,371 1,113,629 1,043,662 1,011,867 1,005,128

Allowance for loan (14,908 ) (14,888 ) (14,366 ) (13,614 ) (12,283 ) losses Loans receivable, 1,118,463 1,098,741 1,029,296 998,253 992,845 net OREO - - - - -

Restricted stock 8,850 8,196 8,196 8,196 8,196 investments Servicing assets 10,189 10,000 9,873 9,043 8,944

Other assets 45,071 21,431 20,233 21,064 21,383

Total assets $ 1,612,922 $ 1,436,771 $ 1,375,247 $ 1,399,404 $ 1,343,285

LIABILITIES ANDSTOCKHOLDERS' EQUITY Noninterest-bearing $ 572,284 $ 408,738 $ 335,219 $ 363,350 $ 295,003

Interest-bearing 806,397 782,778 763,906 738,040 732,647

Total deposits 1,378,681 1,191,516 1,099,125 1,101,390 1,027,650

FHLB advances 50,000 65,000 105,000 128,671 148,671

Other liabilities 13,026 15,170 11,145 13,295 14,208

Total liabilities 1,441,707 1,271,686 1,215,270 1,243,356 1,190,529

Stockholders' 171,215 165,085 159,977 156,048 152,756 EquityTOTAL LIABILITIES & $ 1,612,922 $ 1,436,771 $ 1,375,247 $ 1,399,404 $ 1,343,285 STOCKHOLDERS' EQUITY ^1 Includes AFS andHTMFIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands)June 30, 2021March 31, 2021December 31, 2020September 30, 2020June 30, 2020Balance%Balance%Balance%Balance%Balance%Construction$

18,753

1.7

%

$

15,858

1.4

%

$

13,685

1.3

%

$

18,236

1.8

%

$

14,649

1.5

%

Commercial real estate893,700

78.9

%

855,861

76.9

%

820,355

78.6

%

779,062

77.0

%

769,563

76.6

%

Commercial and industrial217,350

19.2

%

237,865

21.4

%

205,883

19.7

%

211,298

20.9

%

215,362

21.4

%

Consumer2,236

0.2

%

3,504

0.3

%

2,439

0.2

%

2,751

0.3

%

5,646

0.6

%

Gross loans1,132,039

99.9

%

1,113,088

100.0

%

1,042,362

99.9

%

1,011,347

99.9

%

1,005,220

100.0

%

Net deferred loan fees/costs1,332

0.1

%

541

0.0

%

1,300

0.1

%

520

0.1

%

(92

)

0.0

%

Loans receivable$

1,133,371

100.0

%

$

1,113,629

100.0

%

$

1,043,662

100.0

%

$

1,011,867

100.0

%

$

1,005,128

100.0

%

Loans held-for-sale$

96,554

$

76,066

$

59,077

$

53,755

$

32,264

Loans receivable, including loans held-for-sale$

1,229,925

$

1,189,695

$

1,102,739

$

1,065,622

$

1,037,392

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 Balance % Balance % Balance % Balance % Balance % Construction $ 18,753 1.7 % $ 15,858 1.4 % $ 13,685 1.3 % $ 18,236 1.8 % $ 14,649 1.5 %

Commercial 893,700 78.9 % 855,861 76.9 % 820,355 78.6 % 779,062 77.0 % 769,563 76.6 %real estateCommercial 217,350 19.2 % 237,865 21.4 % 205,883 19.7 % 211,298 20.9 % 215,362 21.4 %andindustrialConsumer 2,236 0.2 % 3,504 0.3 % 2,439 0.2 % 2,751 0.3 % 5,646 0.6 %

Gross loans 1,132,039 99.9 % 1,113,088 100.0 % 1,042,362 99.9 % 1,011,347 99.9 % 1,005,220 100.0 %

Net deferred 1,332 0.1 % 541 0.0 % 1,300 0.1 % 520 0.1 % (92 ) 0.0 %loan fees/costsLoans $ 1,133,371 100.0 % $ 1,113,629 100.0 % $ 1,043,662 100.0 % $ 1,011,867 100.0 % $ 1,005,128 100.0 %receivable Loans $ 96,554 $ 76,066 $ 59,077 $ 53,755 $ 32,264 held-for-saleLoansreceivable, $ 1,229,925 $ 1,189,695 $ 1,102,739 $ 1,065,622 $ 1,037,392 includingloansheld-for-saleSBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7(Dollars in thousands)Three Months EndedJune 30,March 31,December 31,September 30,June 30,2021

2021

2020

2020

2020

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

76,066

$

59,077

$

53,755

$

32,264

$

29,988

SBA loans originated/transferred from/to held-for-investment during the quarter/year62,864

48,152

26,837

46,731

12,497

SBA loans sold during the quarter/year(42,163

)

(30,238

)

(20,382

)

(24,866

)

(9,832

)

SBA loans principal payment, net of advance(213

)

(925

)

(1,133

)

(374

)

(389

)

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

96,554

$

76,066

$

59,077

$

53,755

$

32,264

Gain on sale of SBA loans$

3,988

$

2,456

$

1,484

$

1,662

$

509

Premium on sale (weighted average)11.9

%

10.9

%

10.7

%

9.8

%

8.6

%

SBA loan production$

78,058

$

123,762

$

37,116

$

59,957

$

113,782

Non-PPP loans75,065

71,204

37,116

59,009

18,356

PPP loans2,994

52,558

-

948

95,426

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

SBA loansheld-for-sale $ 76,066 $ 59,077 $ 53,755 $ 32,264 $ 29,988 at beginningof thequarter/yearSBA loansoriginated/transferredfrom/toheld-for-investment 62,864 48,152 26,837 46,731 12,497 during thequarter/yearSBA loanssold during (42,163 ) (30,238 ) (20,382 ) (24,866 ) (9,832 )the quarter/yearSBA loansprincipal (213 ) (925 ) (1,133 ) (374 ) (389 )payment, netof advanceSBA loansheld-for-sale $ 96,554 $ 76,066 $ 59,077 $ 53,755 $ 32,264 at end of thequarter/year Gain on sale $ 3,988 $ 2,456 $ 1,484 $ 1,662 $ 509 of SBA loansPremium onsale 11.9 % 10.9 % 10.7 % 9.8 % 8.6 %(weightedaverage) SBA loan $ 78,058 $ 123,762 $ 37,116 $ 59,957 $ 113,782 productionNon-PPP loans 75,065 71,204 37,116 59,009 18,356

PPP loans 2,994 52,558 - 948 95,426

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

2021

2020

2020

2020

SBA servicing assets @ beginning of the quarter/year$

10,000

$

9,873

$

9,043

$

8,944

$

9,203

Newly added SBA servicing assets from SBA loans sold897

635

441

523

197

Regular quarterly/annual servicing assets amortization(422

)

(358

)

(392

)

(384

)

(383

)

SBA servicing assets amortized from SBA loans paid off/charged off(286

)

(150

)

(113

)

(40

)

(73

)

Subtotal before impairment10,189

10,000

8,979

9,043

8,944

Reversal of valuation allowance on servicing assets-

894

-

-

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

10,189

$

10,000

$

9,873

$

9,043

$

8,944

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

SBA servicingassets @ $ 10,000 $ 9,873 $ 9,043 $ 8,944 $ 9,203 beginning of thequarter/year Newly added SBAservicing assets 897 635 441 523 197 from SBA loanssoldRegularquarterly/annual (422 ) (358 ) (392 ) (384 ) (383 )servicing assetsamortizationSBA servicingassets amortized (286 ) (150 ) (113 ) (40 ) (73 )from SBA loanspaid off/chargedoff Subtotal before 10,189 10,000 8,979 9,043 8,944 impairment Reversal ofvaluation - 894 - - allowance onservicing assets SBA servicingassets @ the end $ 10,189 $ 10,000 $ 9,873 $ 9,043 $ 8,944 of the quarter/yearFIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands)June 30, 2021March 31, 2021December 31, 2020September 30, 2020June 30, 2020Balance%Balance%Balance%Balance%Balance%Noninterest-bearing demand$

572,284

41.5

%

$

408,738

34.3

%

$

335,219

30.5

%

$

363,350

33.0

%

$

295,003

28.7

%

NOW & MMDA291,437

21.1

%

270,531

22.7

%

260,374

23.7

%

229,730

20.9

%

192,950

18.8

%

Savings41,284

3.0

%

46,280

3.9

%

51,659

4.7

%

61,631

5.6

%

68,244

6.6

%

TCDs of $250K and under219,174

15.9

%

226,611

19.0

%

232,192

21.1

%

230,230

20.9

%

241,718

23.5

%

TCDs of $250K over158,485

11.5

%

151,094

12.7

%

150,143

13.7

%

146,911

13.3

%

139,197

13.5

%

Wholesale TCDs96,017

7.0

%

88,262

7.4

%

69,538

6.3

%

69,538

6.3

%

90,538

8.8

%

Total Deposits$

1,378,681

100.0

%

$

1,191,516

100.0

%

$

1,099,125

100.0

%

$

1,101,390

100.0

%

$

1,027,650

100.0

%

Recap:Noninterest-bearing demand$

572,284

41.5

%

$

408,738

34.3

%

$

335,219

30.5

%

$

363,350

33.0

%

$

295,003

28.7

%

NOW & MMDA291,437

21.1

%

270,531

22.7

%

260,374

23.7

%

229,730

20.9

%

192,950

18.8

%

Savings41,284

3.0

%

46,280

3.9

%

51,659

4.7

%

61,631

5.6

%

68,244

6.6

%

TCDs of $250K and under219,174

15.9

%

226,611

19.0

%

232,192

21.1

%

230,230

20.9

%

241,718

23.5

%

Core Deposits1,124,179

81.5

%

952,160

79.9

%

879,444

80.0

%

884,941

80.3

%

797,915

77.6

%

TCDs of $250K over158,485

11.5

%

151,094

12.7

%

150,143

13.7

%

146,911

13.3

%

139,197

13.5

%

Wholesale TCDs96,017

7.0

%

88,262

7.4

%

69,538

6.3

%

69,538

6.3

%

90,538

8.8

%

Noncore Deposits254,502

18.5

%

239,356

20.1

%

219,681

20.0

%

216,449

19.7

%

229,735

22.4

%

Total Deposits$

1,378,681

100.0

%

$

1,191,516

100.0

%

$

1,099,125

100.0

%

$

1,101,390

100.0

%

$

1,027,650

100.0

%

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands) June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 Balance % Balance % Balance % Balance % Balance % Noninterest-bearing $ 572,284 41.5 % $ 408,738 34.3 % $ 335,219 30.5 % $ 363,350 33.0 % $ 295,003 28.7 %demandNOW & MMDA 291,437 21.1 % 270,531 22.7 % 260,374 23.7 % 229,730 20.9 % 192,950 18.8 %

Savings 41,284 3.0 % 46,280 3.9 % 51,659 4.7 % 61,631 5.6 % 68,244 6.6 %

TCDs of $250K and under 219,174 15.9 % 226,611 19.0 % 232,192 21.1 % 230,230 20.9 % 241,718 23.5 %

TCDs of $250K over 158,485 11.5 % 151,094 12.7 % 150,143 13.7 % 146,911 13.3 % 139,197 13.5 %

Wholesale TCDs 96,017 7.0 % 88,262 7.4 % 69,538 6.3 % 69,538 6.3 % 90,538 8.8 %

Total Deposits $ 1,378,681 100.0 % $ 1,191,516 100.0 % $ 1,099,125 100.0 % $ 1,101,390 100.0 % $ 1,027,650 100.0 %

Recap:Noninterest-bearing $ 572,284 41.5 % $ 408,738 34.3 % $ 335,219 30.5 % $ 363,350 33.0 % $ 295,003 28.7 %demandNOW & MMDA 291,437 21.1 % 270,531 22.7 % 260,374 23.7 % 229,730 20.9 % 192,950 18.8 %

Savings 41,284 3.0 % 46,280 3.9 % 51,659 4.7 % 61,631 5.6 % 68,244 6.6 %

TCDs of $250K and under 219,174 15.9 % 226,611 19.0 % 232,192 21.1 % 230,230 20.9 % 241,718 23.5 %

Core Deposits 1,124,179 81.5 % 952,160 79.9 % 879,444 80.0 % 884,941 80.3 % 797,915 77.6 %

TCDs of $250K over 158,485 11.5 % 151,094 12.7 % 150,143 13.7 % 146,911 13.3 % 139,197 13.5 %

Wholesale TCDs 96,017 7.0 % 88,262 7.4 % 69,538 6.3 % 69,538 6.3 % 90,538 8.8 %

Noncore Deposits 254,502 18.5 % 239,356 20.1 % 219,681 20.0 % 216,449 19.7 % 229,735 22.4 %

Total Deposits $ 1,378,681 100.0 % $ 1,191,516 100.0 % $ 1,099,125 100.0 % $ 1,101,390 100.0 % $ 1,027,650 100.0 %

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

2021

2020

2020

2020

Allowance for Loan LossesBalance at beginning of period$

14,888

$

14,366

$

13,614

$

12,283

$

11,034

Provision for loan losses-

500

1,600

1,600

1,600

Charge-offs-

(2

)

(907

)

(292

)

(359

)

Recoveries20

24

59

23

8

Balance at the end of period$

14,908

$

14,888

$

14,366

$

13,614

$

12,283

Nonperforming Assets:^1Over 90 days still accruing$

-

$

-

$

2

$

200

$

-

Nonaccrual loans1,339

1,347

2,359

3,911

4,189

Total nonperforming loans1,339

1,347

2,361

4,111

4,189

Other real estate owned-

-

-

-

-

Total nonperforming assets$

1,339

$

1,347

$

2,361

$

4,111

$

4,189

Classified Assets:^1Substandard$

10,052

$

9,843

$

18,920

$

20,579

$

9,909

Doubtful-

-

68

-

-

Loss-

-

-

-

-

Total classified loans$

10,052

$

9,843

$

18,988

$

20,579

$

9,909

Other real estate owned-

-

-

-

-

Total classified assets$

10,052

$

9,843

$

18,988

$

20,579

$

9,909

Performing TDR loans:$

3,776

$

2,516

$

2,847

$

1,072

$

1,073

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

2,524

$

1,681

$

3,095

$

714

$

721

90 days or more past due and still accruing-

-

2

200

-

Nonaccrual1,339

1,347

2,359

3,911

4,189

Total delinquent loans$

3,863

$

3,028

$

5,456

$

4,825

$

4,910

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

%)

(0.01

%)

0.32

%

0.10

%

0.14

%

Nonaccrual loans to loans receivable0.12

%

0.12

%

0.23

%

0.39

%

0.42

%

Nonperforming loans to loans receivable0.12

%

0.12

%

0.23

%

0.41

%

0.42

%

Nonperforming assets to total assets0.08

%

0.09

%

0.17

%

0.29

%

0.31

%

Classified loans to loans receivable0.89

%

0.88

%

1.82

%

2.03

%

0.99

%

Classified loans to Tier 1 and ALLL5.40

%

5.47

%

10.89

%

12.13

%

6.00

%

Classified assets to total assets0.62

%

0.69

%

1.38

%

1.47

%

0.74

%

Classified assets to Tier 1 and ALLL5.40

%

5.47

%

10.89

%

12.13

%

6.00

%

ALLL to loans receivable1.32

%

1.34

%

1.38

%

1.35

%

1.22

%

ALLL to loans receivable exc. SBA PPP loans1.42

%

1.48

%

1.51

%

1.48

%

1.34

%

ALLL to nonaccrual loans1113.37

%

1105.27

%

608.99

%

348.10

%

293.22

%

ALLL to nonperforming loans1113.37

%

1105.27

%

608.47

%

331.16

%

293.22

%

ALLL to nonperforming assets1113.37

%

1105.27

%

608.47

%

331.16

%

293.22

%

Texas ratio ?0.72

%

0.75

%

1.35

%

2.42

%

2.54

%

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

Allowance forLoan LossesBalance at $ 14,888 $ 14,366 $ 13,614 $ 12,283 $ 11,034 beginning ofperiodProvision for - 500 1,600 1,600 1,600 loan lossesCharge-offs - (2 ) (907 ) (292 ) (359 )

Recoveries 20 24 59 23 8

Balance at $ 14,908 $ 14,888 $ 14,366 $ 13,614 $ 12,283 the end ofperiod NonperformingAssets:^1Over 90 days $ - $ - $ 2 $ 200 $ - stillaccruingNonaccrual 1,339 1,347 2,359 3,911 4,189 loansTotal 1,339 1,347 2,361 4,111 4,189 nonperformingloans Other real - - - - - estate ownedTotal $ 1,339 $ 1,347 $ 2,361 $ 4,111 $ 4,189 nonperformingassets ClassifiedAssets:^1Substandard $ 10,052 $ 9,843 $ 18,920 $ 20,579 $ 9,909

Doubtful - - 68 - -

Loss - - - - -

Total $ 10,052 $ 9,843 $ 18,988 $ 20,579 $ 9,909 classifiedloans Other real - - - - - estate ownedTotal $ 10,052 $ 9,843 $ 18,988 $ 20,579 $ 9,909 classifiedassets Performing $ 3,776 $ 2,516 $ 2,847 $ 1,072 $ 1,073 TDR loans: DelinquentLoans:^1Loans 30-89 $ 2,524 $ 1,681 $ 3,095 $ 714 $ 721 days past due90 days ormore past due - - 2 200 - and stillaccruingNonaccrual 1,339 1,347 2,359 3,911 4,189

Total $ 3,863 $ 3,028 $ 5,456 $ 4,825 $ 4,910 delinquentloans Asset QualityRatios:Net(recoveries) (0.01 %) (0.01 %) 0.32 % 0.10 % 0.14 %charge-offsto averageloans?Nonaccrualloans to 0.12 % 0.12 % 0.23 % 0.39 % 0.42 %loansreceivableNonperformingloans to 0.12 % 0.12 % 0.23 % 0.41 % 0.42 %loansreceivableNonperforming 0.08 % 0.09 % 0.17 % 0.29 % 0.31 %assets tototal assetsClassifiedloans to 0.89 % 0.88 % 1.82 % 2.03 % 0.99 %loansreceivableClassified 5.40 % 5.47 % 10.89 % 12.13 % 6.00 %loans to Tier1 and ALLLClassified 0.62 % 0.69 % 1.38 % 1.47 % 0.74 %assets tototal assetsClassifiedassets to 5.40 % 5.47 % 10.89 % 12.13 % 6.00 %Tier 1 andALLLALLL to loans 1.32 % 1.34 % 1.38 % 1.35 % 1.22 %receivableALLL to loansreceivable 1.42 % 1.48 % 1.51 % 1.48 % 1.34 %exc. SBA PPPloansALLL to 1113.37 % 1105.27 % 608.99 % 348.10 % 293.22 %nonaccrualloansALLL to 1113.37 % 1105.27 % 608.47 % 331.16 % 293.22 %nonperformingloansALLL to 1113.37 % 1105.27 % 608.47 % 331.16 % 293.22 %nonperformingassetsTexas ratio ? 0.72 % 0.75 % 1.35 % 2.42 % 2.54 %

^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 CapitalizedJune 30,March 31,December 31,September 30,June 30,RegulatoryBASEL IIIRequirementFully Phased In2021

2021

2020

2020

2020

Leverage ratioCompanyN/A

N/A

11.35

%

11.89

%

11.56

%

11.76

%

11.98

%

Bank5.00%

4.00%

11.33

%

11.87

%

11.54

%

11.72

%

11.94

%

Common equity tier 1 risk-based capital ratioCompanyN/A

N/A

14.39

%

15.00

%

15.01

%

15.24

%

15.23

%

Bank6.50%

7.00%

14.37

%

14.98

%

14.97

%

15.20

%

15.18

%

Tier 1 risk-based capital ratioCompanyN/A

N/A

14.39

%

15.00

%

15.01

%

15.24

%

15.23

%

Bank8.00%

8.50%

14.37

%

14.98

%

14.97

%

15.20

%

15.18

%

Total risk-based capital ratioCompanyN/A

N/A

15.64

%

16.25

%

16.26

%

16.50

%

16.48

%

Bank10.00%

10.50%

15.62

%

16.23

%

16.22

%

16.45

%

16.43

%

Common equity/total assets10.62

%

11.49

%

11.63

%

11.15

%

11.37

%

Common equity per share$

16.66

$

16.11

$

15.61

$

15.23

$

14.92

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11 Well Adequately June 30, March 31, December September June 30, Capitalized Capitalized 31, 30, Regulatory BASEL III Requirement Fully 2021 2021 2020 2020 2020 Phased In LeverageratioCompany N/A N/A 11.35 % 11.89 % 11.56 % 11.76 % 11.98 %

Bank 5.00% 4.00% 11.33 % 11.87 % 11.54 % 11.72 % 11.94 %

Commonequity tier1 risk-basedcapitalratioCompany N/A N/A 14.39 % 15.00 % 15.01 % 15.24 % 15.23 %

Bank 6.50% 7.00% 14.37 % 14.98 % 14.97 % 15.20 % 15.18 %

Tier 1risk-based capitalratioCompany N/A N/A 14.39 % 15.00 % 15.01 % 15.24 % 15.23 %

Bank 8.00% 8.50% 14.37 % 14.98 % 14.97 % 15.20 % 15.18 %

Totalrisk-based capitalratioCompany N/A N/A 15.64 % 16.25 % 16.26 % 16.50 % 16.48 %

Bank 10.00% 10.50% 15.62 % 16.23 % 16.22 % 16.45 % 16.43 %

Commonequity/ 10.62 % 11.49 % 11.63 % 11.15 % 11.37 %totalassetsCommon $ 16.66 $ 16.11 $ 15.61 $ 15.23 $ 14.92 equity pershareMARGIN ANALYSIS (Unaudited) -Table 12(Dollars in thousands)Three Months EndedJune 30, 2021March 31, 2021December 31, 2020September 30, 2020June 30, 2020Avg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1$

1,195,908

$

14,338

4.81

%

$

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

%

Investment securities?83,152

442

2.13

%

84,679

448

2.15

%

87,818

474

2.15

%

90,450

471

2.07

%

91,401

546

2.40

%

Interest-earning deposits at the FRB and other banks168,677

54

0.13

%

108,127

36

0.14

%

191,703

59

0.12

%

186,678

58

0.12

%

137,945

45

0.13

%

Other earning assets8,737

135

6.20

%

8,196

97

4.80

%

8,196

81

3.93

%

8,196

80

3.88

%

8,195

93

4.56

%

Total interest-earning assets ?1,456,474

14,969

4.12

%

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

%

Total interest-earning assets exc. SBA PPP loans?1,356,195

14,041

4.15

%

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 banks10,752

10,025

10,234

10,685

8,224

Other noninterest-earning assets32,002

31,156

28,903

31,216

32,285

Total noninterest-earning assets42,754

41,181

39,137

41,901

40,509

Less: Allowance for loan losses(14,899

)

(14,381

)

(13,505

)

(12,293

)

(10,931

)

TOTAL ASSETS$

1,484,329

$

1,365,936

$

1,379,717

$

1,361,610

$

1,285,715

INTEREST-BEARING DEPOSITSInterest-bearing demand$

13,373

$

2

0.06

%

$

15,813

$

2

0.05

%

$

11,444

$

4

0.14

%

$

11,248

$

4

0.14

%

$

13,634

$

5

0.15

%

Money market263,845

352

0.54

%

265,856

366

0.56

%

240,913

360

0.59

%

200,878

404

0.80

%

163,332

374

0.92

%

Savings43,433

55

0.51

%

48,284

60

0.50

%

55,756

77

0.55

%

67,880

154

0.90

%

66,389

176

1.07

%

Time deposits469,000

831

0.71

%

451,347

975

0.88

%

447,839

1,236

1.10

%

452,950

1,790

1.57

%

509,447

2,613

2.06

%

Total interest-bearing deposits789,651

1,240

0.63

%

781,300

1,403

0.73

%

755,952

1,677

0.88

%

732,956

2,352

1.28

%

752,802

3,168

1.69

%

Borrowings51,539

118

0.92

%

65,667

130

0.80

%

88,645

153

0.69

%

147,149

206

0.56

%

115,613

174

0.61

%

Total interest-bearing liabilities841,190

1,358

0.65

%

846,967

1,533

0.73

%

844,597

1,830

0.86

%

880,105

2,558

1.16

%

868,415

3,342

1.55

%

Total interest-bearing liabilities exc. SBA PPP loan funding740,911

1,270

0.69

%

749,137

1,449

0.78

%

754,587

1,751

0.92

%

787,712

2,476

1.25

%

805,624

3,287

1.64

%

Noninterest-bearing deposits459,695

343,904

363,937

313,370

249,909

Other liabilities13,906

11,942

12,623

12,750

15,141

Stockholders' equity169,538

163,123

158,560

155,385

152,250

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,484,329

$

1,365,936

$

1,379,717

$

1,361,610

$

1,285,715

Net interest income?$

13,611

$

12,885

$

11,829

$

10,701

$

9,910

Net interest income exc. SBA PPP Loans?$

12,771

$

11,820

$

11,194

$

10,181

$

9,488

Net interest spread3.47

%

3.64

%

3.15

%

2.80

%

2.69

%

Effect of noninterest-bearing sources0.28

%

0.26

%

0.33

%

0.40

%

0.48

%

Net interest margin?3.75

%

3.90

%

3.48

%

3.20

%

3.17

%

Net interest margin exc. SBA PPP loans?3.78

%

3.86

%

3.52

%

3.27

%

3.20

%

Cost of deposits$

1,249,346

$

1,240

0.40

%

$

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 funds$

1,300,885

$

1,358

0.42

%

$

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 exc. SBA ppp loan funding$

1,200,606

$

1,270

0.42

%

$

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 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 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 $ 1,195,908 $ 14,338 4.81 % $ 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 %

Investment securities? 83,152 442 2.13 % 84,679 448 2.15 % 87,818 474 2.15 % 90,450 471 2.07 % 91,401 546 2.40 %

Interest-earning deposits 168,677 54 0.13 % 108,127 36 0.14 % 191,703 59 0.12 % 186,678 58 0.12 % 137,945 45 0.13 %at the FRB and other banksOther earning assets 8,737 135 6.20 % 8,196 97 4.80 % 8,196 81 3.93 % 8,196 80 3.88 % 8,195 93 4.56 %

Total interest-earning 1,456,474 14,969 4.12 % 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 ?Total interest-earning 1,356,195 14,041 4.15 % 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 ASSETSCash and due from banks 10,752 10,025 10,234 10,685 8,224

Other noninterest-earning 32,002 31,156 28,903 31,216 32,285 assetsTotal noninterest-earning 42,754 41,181 39,137 41,901 40,509 assets Less: Allowance for loan (14,899 ) (14,381 ) (13,505 ) (12,293 ) (10,931 )lossesTOTAL ASSETS $ 1,484,329 $ 1,365,936 $ 1,379,717 $ 1,361,610 $ 1,285,715

INTEREST-BEARING DEPOSITSInterest-bearing demand $ 13,373 $ 2 0.06 % $ 15,813 $ 2 0.05 % $ 11,444 $ 4 0.14 % $ 11,248 $ 4 0.14 % $ 13,634 $ 5 0.15 %

Money market 263,845 352 0.54 % 265,856 366 0.56 % 240,913 360 0.59 % 200,878 404 0.80 % 163,332 374 0.92 %

Savings 43,433 55 0.51 % 48,284 60 0.50 % 55,756 77 0.55 % 67,880 154 0.90 % 66,389 176 1.07 %

Time deposits 469,000 831 0.71 % 451,347 975 0.88 % 447,839 1,236 1.10 % 452,950 1,790 1.57 % 509,447 2,613 2.06 %

Total interest-bearing 789,651 1,240 0.63 % 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 Borrowings 51,539 118 0.92 % 65,667 130 0.80 % 88,645 153 0.69 % 147,149 206 0.56 % 115,613 174 0.61 %

Total interest-bearing 841,190 1,358 0.65 % 846,967 1,533 0.73 % 844,597 1,830 0.86 % 880,105 2,558 1.16 % 868,415 3,342 1.55 %liabilitiesTotal interest-bearing 740,911 1,270 0.69 % 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 PPPloan funding Noninterest-bearing 459,695 343,904 363,937 313,370 249,909 depositsOther liabilities 13,906 11,942 12,623 12,750 15,141

Stockholders' equity 169,538 163,123 158,560 155,385 152,250

TOTAL LIABILITIES & $ 1,484,329 $ 1,365,936 $ 1,379,717 $ 1,361,610 $ 1,285,715 STOCKHOLDERS' EQUITY Net interest income? $ 13,611 $ 12,885 $ 11,829 $ 10,701 $ 9,910

Net interest income exc. $ 12,771 $ 11,820 $ 11,194 $ 10,181 $ 9,488SBA PPP Loans? Net interest spread 3.47 % 3.64 % 3.15 % 2.80 % 2.69 %

Effect of 0.28 % 0.26 % 0.33 % 0.40 % 0.48 %noninterest-bearingsources Net interest margin? 3.75 % 3.90 % 3.48 % 3.20 % 3.17 %

Net interest margin exc. 3.78 % 3.86 % 3.52 % 3.27 % 3.20 %SBA PPP loans? Cost of deposits $ 1,249,346 $ 1,240 0.40 % $ 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 funds $ 1,300,885 $ 1,358 0.42 % $ 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 exc. SBA ppp $ 1,200,606 $ 1,270 0.42 % $ 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 loansheld-for-sale? Amounts calculated on a fully taxable equivalent basis using thecurrent statutory federal tax rateCOMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13(Dollars in thousands)Three Months EndedJune 30, 2021March 31, 2021December 31, 2020September 30, 2020June 30, 2020AmountYieldAmountYieldAmountYieldAmountYieldAmountYieldContractual yield$

12,670

4.25

%

$

12,148

4.33

%

$

11,727

4.38

%

$

11,522

4.38

%

$

11,578

4.57

%

SBA discount accretion1,027

0.34

%

738

0.26

%

730

0.27

%

615

0.23

%

662

0.26

%

Prepayment penalties & late fees89

0.03

%

121

0.04

%

177

0.07

%

221

0.09

%

24

0.01

%

Amortization of net deferred costs552

0.19

%

830

0.30

%

411

0.15

%

292

0.11

%

304

0.12

%

As reported yield on loans$

14,338

4.81

%

$

13,837

4.93

%

$

13,045

4.87

%

$

12,650

4.81

%

$

12,568

4.96

%

COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13(Dollars in thousands) Three Months Ended June 30, 2021 March 31, 2021 December 31, September 30, June 30, 2020 2020 2020 Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Contractual $ 12,670 4.25 % $ 12,148 4.33 % $ 11,727 4.38 % $ 11,522 4.38 % $ 11,578 4.57 %yieldSBA discount 1,027 0.34 % 738 0.26 % 730 0.27 % 615 0.23 % 662 0.26 %accretionPrepayment 89 0.03 % 121 0.04 % 177 0.07 % 221 0.09 % 24 0.01 %penalties &late feesAmortizationof net 552 0.19 % 830 0.30 % 411 0.15 % 292 0.11 % 304 0.12 %deferredcostsAs reported $ 14,338 4.81 % $ 13,837 4.93 % $ 13,045 4.87 % $ 12,650 4.81 % $ 12,568 4.96 %yield onloansMARGIN ANALYSIS (Unaudited) - Table 14(Dollars in thousands)Six Months EndedJune 30,2021June 30, 2020Avg BalanceInterestYieldAvg BalanceInterestYieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1$

1,167,180

$

28,175

4.87

%

$

979,872

$

26,197

5.38

%

Investment securities?83,911

890

2.14

%

92,888

1,127

2.44

%

Interest-earning deposits at the FRB and other banks138,570

90

0.13

%

96,584

233

0.49

%

Other earning assets8,468

232

5.52

%

8,195

215

5.28

%

Total interest-earning assets ?1,398,129

29,387

4.24

%

1,177,539

27,772

4.74

%

Total interest-earning assets exc. SBA PPP loans?1,299,068

27,311

4.24

%

1,146,143

27,295

4.79

%

NONINTEREST-EARNING ASSETSCash and due from banks10,390

8,640

Other noninterest-earning assets31,582

31,113

Total noninterest-earning assets41,972

39,753

Less: Allowance for loan losses(14,641

)

(10,763

)

TOTAL ASSETS$

1,425,460

$

1,206,529

INTEREST-BEARING DEPOSITSInterest-bearing demand$

14,586

$

4

0.06

%

$

12,837

$

10

0.16

%

Money market264,845

718

0.55

%

139,941

775

1.11

%

Savings45,845

115

0.51

%

66,672

427

1.29

%

Time deposits460,223

1,806

0.79

%

532,616

5,910

2.23

%

Total interest-bearing deposits785,499

2,643

0.68

%

752,066

7,122

1.90

%

Borrowings58,564

248

0.85

%

62,744

201

0.64

%

Total interest-bearing liabilities844,063

2,891

0.69

%

814,810

7,323

1.81

%

Total interest-bearing liabilities exc. SBA PPP loans745,002

2,719

0.74

%

783,414

7,268

1.87

%

Noninterest-bearing deposits402,119

224,815

Other Liabilities12,929

15,526

Stockholders' equity166,349

151,378

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,425,460

$

1,206,529

Net interest income?$

26,496

$

20,449

Net interest income exc. SBA PPP loans?$

24,592

$

20,027

Net interest spread3.55

%

2.93

%

Effect of noninterest-bearing sources0.27

%

0.56

%

Net interest margin?3.82

%

3.49

%

Net interest margin exc. SBA PPP loans?3.82

%

3.51

%

Cost of deposits$

1,187,618

$

2,643

0.45

%

$

976,881

$

7,122

1.47

%

Cost of funds$

1,246,182

$

2,891

0.47

%

$

1,039,625

$

7,323

1.42

%

Cost of funds exc. SBA PPP loan funding$

1,147,121

$

2,719

0.48

%

$

1,008,229

$

7,268

1.45

%

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) Six Months Ended June 30,2021 June 30, 2020 Avg Balance Interest Yield Avg Balance Interest YieldNumber of Days inthe PeriodINTEREST-EARNINGASSETSLoans ^1 $ 1,167,180 $ 28,175 4.87 % $ 979,872 $ 26,197 5.38 %

Investment 83,911 890 2.14 % 92,888 1,127 2.44 %securities?Interest-earning 138,570 90 0.13 % 96,584 233 0.49 %deposits at the FRBand other banksOther earning 8,468 232 5.52 % 8,195 215 5.28 %assetsTotal 1,398,129 29,387 4.24 % 1,177,539 27,772 4.74 %interest-earningassets ?Totalinterest-earning 1,299,068 27,311 4.24 % 1,146,143 27,295 4.79 %assets exc. SBA PPPloans? NONINTEREST-EARNINGASSETSCash and due from 10,390 8,640 banksOther 31,582 31,113 noninterest-earningassetsTotal 41,972 39,753 noninterest-earningassets Less: Allowance for (14,641 ) (10,763 )loan losses TOTAL ASSETS $ 1,425,460 $ 1,206,529

INTEREST-BEARINGDEPOSITSInterest-bearing $ 14,586 $ 4 0.06 % $ 12,837 $ 10 0.16 %demandMoney market 264,845 718 0.55 % 139,941 775 1.11 %

Savings 45,845 115 0.51 % 66,672 427 1.29 %

Time deposits 460,223 1,806 0.79 % 532,616 5,910 2.23 %

Total 785,499 2,643 0.68 % 752,066 7,122 1.90 %interest-bearingdeposits Borrowings 58,564 248 0.85 % 62,744 201 0.64 %

Total 844,063 2,891 0.69 % 814,810 7,323 1.81 %interest-bearingliabilitiesTotalinterest-bearing 745,002 2,719 0.74 % 783,414 7,268 1.87 %liabilities exc.SBA PPP loans Noninterest-bearing 402,119 224,815 depositsOther Liabilities 12,929 15,526

Stockholders' 166,349 151,378 equity TOTAL LIABILITIES & $ 1,425,460 $ 1,206,529 STOCKHOLDERS'EQUITY Net interest $ 26,496 $ 20,449income?Net interest income $ 24,592 $ 20,027exc. SBA PPP loans? Net interest spread 3.55 % 2.93 %

Effect of 0.27 % 0.56 %noninterest-bearingsources Net interest 3.82 % 3.49 %margin?Net interest margin 3.82 % 3.51 %exc. SBA PPP loans? Cost of deposits $ 1,187,618 $ 2,643 0.45 % $ 976,881 $ 7,122 1.47 %

Cost of funds $ 1,246,182 $ 2,891 0.47 % $ 1,039,625 $ 7,323 1.42 %

Cost of funds exc. $ 1,147,121 $ 2,719 0.48 % $ 1,008,229 $ 7,268 1.45 %SBA PPP loanfunding ^1 Includes loansheld-for-sale? Amounts calculated on a fully taxable equivalentbasis using the current statutory federal tax rateCOMPONENTS OF YIELD ON LOANS (Unaudited) - Table 15(Dollars in thousands)Six Months EndedJune 30, 2021June 30, 2020AmountYieldAmountYieldContractual yield$

24,818

4.29

%

$

24,023

4.93

%

SBA discount accretion1,765

0.30

%

1,852

0.38

%

Prepayment penalties & late fees210

0.04

%

130

0.03

%

Amortization of net deferred costs1,382

0.24

%

192

0.04

%

As reported yield on loans$

28,175

4.87

%

$

26,197

5.38

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210729006231/en/

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