Business Wire | Jan 28, 2022 09:00AM EST

CBB Bancorp, Inc. Reports Fourth Quarter and Full Year 2021 Financial Results

Jan. 28, 2022

LOS ANGELES--(BUSINESS WIRE)--Jan. 28, 2022--CBB Bancorp, Inc. ("CBB" or the "Company') (OTCQX: CBBI), the holding company of Commonwealth Business Bank (the "Bank"), announced today net income for fourth quarter 2021 of $8.0 million, or $0.77 per diluted share, an increase of 1.7% compared to $7.9 million, or $0.75 per diluted share, in the prior quarter and $115.7% compared to $3.7 million, or $0.36 per diluted share, in the same period last year.

Additionally, CBB reported net income for the year ended December 31, 2021 of $27.5 million, or $2.65 per diluted share, an increase of 178.6% from the $9.9 million, or $0.96 per diluted share, of net income for 2020.

Overall Results

Net income for fourth quarter 2021 was positively impacted by the continued strength of the Bank's SBA loan originations and sales. The Company's annualized return on average assets for fourth quarter 2021 was 1.68% compared to 1.73% for third quarter 2021 and 1.07% for fourth quarter 2020. The annualized return on average equity for fourth quarter 2021 was 17.54% compared to 17.87% for third quarter 2021 and 9.32% for fourth quarter 2020. The net interest margin for fourth quarter 2021 was 3.49% compared to 3.62% for third quarter 2021 and 3.48% for fourth quarter 2020. The efficiency ratio for fourth quarter 2021 was 52.84% compared to 49.00% for third quarter 2021 and 55.12% for fourth quarter 2020.

Joanne Kim, President and CEO, commented, "We are pleased to announce record quarterly earnings for the fourth consecutive quarter, as our earnings continue to benefit from growing net interest income and SBA loan sales, while maintaining excellent asset quality."

Net Interest Income and Margin:

Net Interest Income

Net interest income for fourth quarter 2021 was $16.3 million, an increase of $188 thousand, or 1.2%, from third quarter 2021, and an increase of $4.5 million, or 38.2%, from fourth quarter 2020. For the year ended December 31, 2021, net interest income was $58.8 million, an increase of $16.0 million, or 37.4%, over 2020. The increase in net interest income over the prior year was primarily driven by our ability to continue to aggressively lower deposit rates combined with the impact of the inclusion of operations of the acquired Ohana Pacific Bank for the last six months the year.

Net Interest Margin

Our net interest margin for fourth quarter 2021 was 3.49% compared to 3.62% for third quarter 2021 and 3.48% for fourth quarter 2020. The decrease in net interest margin was due to the higher average levels of interest-earning deposits at the FRB and other banks in the fourth quarter of 2021. For the year ended December 31, 2021, net interest margin was 3.67% compared to 3.41% in 2020. Our cost of funds improved for fourth quarter 2021 to 0.30% from 0.33% for third quarter 2021 and 0.60% for fourth quarter 2020. For the year ended December 31, 2021, the cost of funds was 0.38% compared to 1.04% in 2020.

Provision for Loan Losses:

The Company recorded a negative provision for loan losses for fourth quarter 2021 of $0.8 million, compared to a zero provision for third quarter 2021 and $1.6 million positive provision for fourth quarter 2020. For the year ended December 31, 2021, a negative provision for loan losses of $0.3 million was recorded, compared to $5.5 million positive provision for the corresponding period in 2020. The negative loan loss provision during the fourth quarter of 2021 was due to continued improvement in asset quality ratios, the absence of significant charge-offs, and continuing signs of an improving economy. The loan loss provision also declined during the fourth quarter of 2021 in part due to the risk of loss included in other liabilities associated with the sold portion of SBA loans, as discussed further in Noninterest Expense below. See Table 10 for additional information and trends.

Noninterest Income:

Noninterest income for fourth quarter 2021 was $5.3 million compared to $5.5 million for third quarter 2021 and $3.4 million for fourth quarter 2020. For the year ended December 31, 2021, noninterest income was $19.6 million compared to $9.6 million in 2020. The largest contributor to noninterest income continues to be gains on sales of loans. Sales of SBA loans were $42.2 million with an average premium percentage received of 11.1% during the fourth quarter of 2021, compared with SBA loan sales of $42.0 million with an average premium percentage received of 11.5% during the third quarter of 2021 and SBA loan sales of $20.4 million with an average premium percentage received of 10.7% during the fourth quarter of 2020. For the year ended December 31, 2021, the gain on sale of SBA loans was $14.9 million compared to $4.6 million for the corresponding period in 2020.

Noninterest Expense:

Noninterest expense for fourth quarter 2021 was $11.4 million compared to $10.6 million for third quarter 2021 and $8.4 million for fourth quarter 2020. For the year ended December 31, 2021, noninterest expense was $40.3 million compared to $32.9 million for the corresponding period in 2020. The increase in noninterest expense in the fourth quarter of 2021 was largely due to an additional provision for loss of $800 thousand on the repurchase of SBA loans sold. The risk of loss associated with these loans had been included in the allowance for loan losses in prior quarters. The increase in noninterest expense in 2021 compared to 2020 was primarily driven by increases in merger related expense, donations to CBB Bank Foundation, and third party processing costs along with the result of the inclusion of the operations of the acquired Ohana Pacific Bank for the last six months of 2021.

Income Taxes:

The Company's effective tax rate for fourth quarter 2021 was 27.1% compared to 28.6% for third quarter 2021 and 29.0% for fourth quarter 2020. For the year ended December 31, 2021, the effective tax rate was 28.2% compared to 29.8% in 2020.

Balance Sheet:

Investment Securities:

Investment securities were $84.2 million at December 31, 2021, a decrease from $86.4 million at September 30, 2021 and from $85.9 million from December 31, 2020. The decreases were due to net principal paydowns. There were no portfolio additions in the fourth quarter 2021.

Loans Receivable:

Loans receivable (including loans held for sale) at December 31, 2021 was $1.4 billion, an increase of $7.2 million, or 0.5%, from September 30, 2021, and an increase of $296.7 million, or 26.9% from December 31, 2020. The increase in loan balances in 2021 compared with 2020 was in part due to the $149.2 million in loans that were acquired in the Ohana Pacific Bank merger at July 1, 2021.

Loan payment deferments for our commercial borrowers under the CARES Act have declined since the first round of deferments that began during the second quarter of 2020. As of December 31, 2021, three loans totaling $26.7 million remain on modified payment terms, a $3.0 million decrease from the $29.7 million level of such loans at September 30, 2021 and down from $298.7 million of such loans at their peak at June 30, 2020. All three loans that remained on modified payment terms as of December 31, 2021 are scheduled to return to their regular payment terms in January 2022.

Our weighted average loan-to-value ratio of Commercial Real Estate loans was 72.2% at December 31, 2021. Excluding SBA loans, our weighted average loan-to-value ratio 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 4Q 2021 Overview and COVID-19 update presentation.

Paycheck Protection Program (PPP):

PPP loans totaled $35.4 million at December 31, 2021. Net unearned fees as of December 31, 2021 were $0.9 million and are being accreted to income based on the two-year contractual maturity. The SBA approved $25.5 million in PPP loan forgiveness applications processed for our PPP loans in fourth quarter 2021.

Allowance for Loan Losses and Asset Quality:

The allowance for loan losses at December 31, 2021 was $14.2 million, or 1.14% of portfolio loans, compared to $15.0 million, or 1.19% of portfolio loans, at September 30, 2021. Excluding PPP loans of $35.4 million, which are government guaranteed, the allowance for loan losses at December 31, 2021 was 1.18% compared to 1.26% at September 30, 2021. Non-performing loans as of December 31, 2021 were $747 thousand, down from $768 thousand at September 30, 2021. Loans with payment deferments are considered performing loans in accordance with regulatory guidance. Our coverage ratio of allowance for loan losses to nonperforming assets continues to exceed 1800%. For additional information, please go to www.cbb-bank.com under tab "About Us" and select "Investors Relations" to see 4Q 2021 Overview and COVID-19 update presentation.

SBA Loans Held for Sale:

SBA loans held for sale at December 31, 2021 were $158.1 million, compared to $136.4 million at September 30 2021 and $59.1 million at December 31, 2020. We continue to assess SBA loan sale premiums and plan to sell loans when we believe it is advantageous to do so. See comments under "Noninterest Income", and Table 7 for additional SBA loan origination and sale data.

Deposits:

Deposits were $1.6 billion at December 31, 2021, down $108.0 million from September 30, 2021 and up $459.0 million from December 31, 2020. Noninterest-bearing demand deposits (DDAs) decreased $50.7 million, or 7.6%, from September 30, 2021 and increased $284.6 million, or 84.9%, from December 31, 2020. DDAs were 40.5% of total deposits at December 31, 2021 compared to 40.9% at September 30, 2021 and 30.5% at December 31, 2020. The decrease in DDA deposits in the fourth quarter of 2021 was due a decline in the escrow related deposits managed by the Bank's Specialty Deposit Group. The increase in DDA at December 31, 2021 compared with the prior year includes both increased balances with the Specialty Deposit Group and the deposits added in the acquisition of Ohana Pacific Bank.

NOW and MMDA decreased $51.2 million, or 13.6%, from September 30, 2021 and increased $64.9 million, or 24.9% from December 31, 2020. Time deposits decreased $6.9 million, or 1.3% from September 30, 2021 and increased $73.8 million, or 16.3%, from December 31, 2020. Our time deposits at December 30, 2021 were $525.7 million, or 33.7% of total deposits, down from $532.6 million, or 32.0% of total deposits at September 30, 2021 and up from $451.9 million, or 41.1% of total deposits at December 31, 2020. The increases in NOW, MMDA and time deposit balances during 2021 compared with the prior year were primarily attributable to the completion of the merger with Ohana Pacific Bank during the third quarter.

Borrowings:

Borrowings at December 31, 2021 consisted of $50.0 million of Federal Home Loan Bank of San Francisco (FHLB-SF) advances and were unchanged from the balance of FHLB-SF advances at September 30, 2021. Borrowings at December 31, 2020 included of $95.0 million of FHLB-SF advances and $10.0 million of Pacific Coast Bankers Bank borrowings.

Capital:

Stockholders' equity was $185.2 million at December 31, 2021, representing an increase of $6.9 million, or 3.9%, over stockholders' equity of $178.3 million at September 30, 2021. Tangible book value per share at December 31, 2021 was $17.76 compared with $17.08 at September 30, 2021, an increase of $0.68 per share, or 4.0%.

All of our regulatory capital ratios increased at December 31, 2021 continue to exceed the minimum levels required to be considered "Well Capitalized" as defined for bank regulatory purposes and remain in compliance with the fully phased-in Basel III requirements, which went into effect on January 1, 2020, as shown on Table 11 in this press release. Our Common Equity Tier 1 risked-based capital ratio at December 31, 2021 was 13.84% at the Company level and 13.83% 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 December 31, 2021, the Bank has ten full-service branches in Los Angeles and Orange Counties in California, 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 4Q 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 Ohana Pacific Bank or any other 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 Twelve Months Ended December 31, September 30, $ % December 31, $ % December 31, December 31, $ %

2021 2021 Change Change 2020 Change Change 2021 2020 Change Change

Interest income $ 17,553 $ 17,437 $ 116 0.7 % $ 13,613 $ 3,940 28.9 % $ 64,285 $ 54,504 $ 9,781 17.9 %

Interest expense 1,265 1,337 (72 ) (5.4 %) 1,830 (565 ) (30.9 %) 5,493 11,711 (6,218 ) (53.1 %)

Net interest 16,288 16,100 188 1.2 % 11,783 4,505 38.2 % 58,792 42,793 15,999 37.4 %income Provision for (800 ) - (800 ) (100.0 %) 1,600 (2,400 ) (150.0 %) (300 ) 5,500 (5,800 ) (105.5 %)loan lossesNet interestincome after 17,088 16,100 988 6.1 % 10,183 6,905 67.8 % 59,092 37,293 21,799 58.5 %provision forloan losses Gain on sale of 4,151 4,305 (154 ) (3.6 %) 1,484 2,667 179.7 % 14,900 4,594 10,306 224.3 %loansGain (loss) on - - - - - - - - 3 (3 ) (100.0 %)sale of OREOSBA servicing 683 698 (15 ) (2.1 %) 701 (18 ) (2.6 %) 2,850 2,759 91 3.3 %fee income, netReversal ofvaluation - - - - 894 (894 ) (100.0 %) - 894 (894 ) (100.0 %)allowance onservicing assetsService charges 499 540 (41 ) (7.6 %) 364 135 37.1 % 1,813 1,396 417 29.9 %and other incomeNoninterest 5,333 5,543 (210 ) (3.8 %) 3,443 1,890 54.9 % 19,563 9,646 9,917 102.8 %income Salaries and 6,614 6,500 114 1.8 % 5,477 1,137 20.8 % 23,967 20,744 3,223 15.5 %employeebenefitsOccupancy and 1,028 1,067 (39 ) (3.7 %) 936 92 9.8 % 4,019 3,763 256 6.8 %equipmentMarketing 111 287 (176 ) (61.3 %) 133 (22 ) (16.5 %) 994 1,135 (141 ) (12.4 %)expenseProfessional 368 495 (127 ) (25.7 %) 478 (110 ) (23.0 %) 1,809 1,916 (107 ) (5.6 %)expenseMerger related 454 450 4 0.9 % - 454 100.0 % 2,185 98 2,087 2129.6 %expenseOther expenses 2,850 1,807 1,043 57.7 % 1,369 1,481 108.2 % 7,313 5,200 2,113 40.6 %

Noninterest 11,425 10,606 819 7.7 % 8,393 3,032 36.1 % 40,287 32,856 7,431 22.6 %expense Income before 10,996 11,037 (41 ) (0.4 %) 5,233 5,763 110.1 % 38,368 14,083 24,285 172.4 %income taxexpense Income tax 2,984 3,156 (172 ) (5.4 %) 1,519 1,465 96.4 % 10,838 4,202 6,636 157.9 %expense Net income $ 8,012 $ 7,881 $ 131 1.7 % $ 3,714 $ 4,298 115.7 % $ 27,530 $ 9,881 $ 17,649 178.6 %

Effective tax 27.1 % 28.6 % (1.5 %) (5.1 %) 29.0 % (1.9 %) (6.5 %) 28.2 % 29.8 % (1.6 %) (5.3 %)rate Outstanding 10,284,962 10,284,962 - - 10,247,292 37,670 0.4 % 10,284,962 10,247,292 37,670 0.4 %number of shares Weighted average 10,284,962 10,280,016 4,946 0.0 % 10,247,292 37,670 0.4 % 10,268,940 10,238,237 30,703 0.3 %shares for basicEPSWeighted average 10,424,771 10,427,687 (2,916 ) (0.0 %) 10,285,410 139,361 1.4 % 10,389,885 10,291,209 98,676 1.0 %shares fordiluted EPS Basic EPS $ 0.78 $ 0.77 $ 0.01 1.3 % $ 0.36 $ 0.42 116.7 % $ 2.68 $ 0.97 $ 1.71 176.3 %

Diluted EPS $ 0.77 $ 0.75 $ 0.02 2.7 % $ 0.36 $ 0.41 113.9 % $ 2.65 $ 0.96 $ 1.69 176.0 %

Return on 1.68 % 1.73 % (0.05 %) (2.9 %) 1.07 % 0.61 % 57.0 % 1.68 % 0.77 % 0.91 % 118.2 %average assetsReturn on 17.54 % 17.87 % (0.33 %) (1.9 %) 9.32 % 8.22 % 88.2 % 15.98 % 6.41 % 9.57 % 149.3 %average equity Efficiency ratio 52.84 % 49.00 % 3.84 % 7.8 % 55.12 % (2.28 %) (4.1 %) 51.42 % 62.66 % (11.24 %) (17.9 %)^1Yield on 3.76 % 3.92 % (0.16 %) (4.1 %) 4.01 % (0.25 %) (6.2 %) 4.01 % 4.34 % (0.33 %) (7.6 %)interest-earningassets?Cost of funds 0.30 % 0.33 % (0.03 %) (9.1 %) 0.60 % (0.30 %) (50.0 %) 0.38 % 1.04 % (0.66 %) (63.5 %)

Net interest 3.49 % 3.62 % (0.13 %) (3.6 %) 3.48 % 0.01 % 0.3 % 3.67 % 3.41 % 0.26 % 7.6 %margin?^1Represents 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

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,1 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

BALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2(Dollars in thousands)December 31,

September 30,

$

%

December 31,

$

%

2021

2021

Change

Change

2020

Change

Change

ASSETSCash and due from banks$

7,702

$

11,621

$

(3,919

)

(33.7

%)

$

8,750

$

(1,048

)

(12.0

%)

Interest-earning deposits at the FRB and other banks284,583

386,087

(101,504

)

(26.3

%)

153,908

130,675

84.9

%

Investment securities^184,238

86,440

(2,202

)

(2.5

%)

85,914

(1,676

)

(2.0

%)

Loans held-for-sale, at the lower of cost or fair value158,128

136,394

21,734

15.9

%

59,077

99,051

167.7

%

Loans receivable1,241,319

1,255,814

(14,495

)

(1.2

%)

1,043,662

197,657

18.9

%

Allowance for loan losses(14,192

)

(15,000

)

808

5.4

%

(14,366

)

174

1.2

%

Loans receivable, net1,227,127

1,240,814

(13,687

)

(1.1

%)

1,029,296

197,831

19.2

%

OREO-

-

-

-

-

-

-

Restricted stock investments8,850

8,850

-

-

8,196

654

8.0

%

Servicing assets10,632

10,392

240

2.3

%

9,873

759

7.7

%

Goodwill2,185

2,269

(84

)

(3.7

%)

-

2,185

100.0

%

Intangible assets360

375

(15

)

(4.0

%)

-

360

100.0

%

Other assets24,996

25,859

(863

)

(3.3

%)

20,233

4,763

23.5

%

Total assets$

1,808,801

$

1,909,101

$

(100,300

)

(5.3

%)

$

1,375,247

$

433,554

31.5

%

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

619,774

$

670,489

$

(50,715

)

(7.6

%)

$

335,219

$

284,555

84.9

%

Interest-bearing938,338

995,574

(57,236

)

(5.7

%)

763,906

174,432

22.8

%

Total deposits1,558,112

1,666,063

(107,951

)

(6.5

%)

1,099,125

458,987

41.8

%

FHLB advances and other borrowing50,000

50,000

-

-

105,000

(55,000

)

(52.4

%)

Other liabilities15,447

14,719

728

4.9

%

11,145

4,302

38.6

%

Total liabilities1,623,559

1,730,782

(107,223

)

(6.2

%)

1,215,270

408,289

33.6

%

Stockholders' Equity185,242

178,319

6,923

3.9

%

159,977

25,265

15.8

%

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,808,801

$

1,909,101

$

(100,300

)

(5.3

%)

$

1,375,247

$

433,554

31.5

%

CAPITAL RATIOSLeverage ratioCompany9.55

%

9.61

%

(0.06

%)

(0.6

%)

11.56

%

(2.01

%)

(17.4

%)

Bank9.55

%

9.60

%

(0.05

%)

(0.5

%)

11.54

%

(1.99

%)

(17.3

%)

Common equity tier 1 risk-based capital ratioCompany13.84

%

13.61

%

0.23

%

1.7

%

15.01

%

(1.17

%)

(7.8

%)

Bank13.83

%

13.59

%

0.24

%

1.7

%

14.97

%

(1.14

%)

(7.6

%)

Tier 1 risk-based capital ratioCompany13.84

%

13.61

%

0.23

%

1.7

%

15.01

%

(1.17

%)

(7.8

%)

Bank13.83

%

13.59

%

0.24

%

1.7

%

14.97

%

(1.14

%)

(7.6

%)

Total risk-based capital ratioCompany14.99

%

14.86

%

0.13

%

0.9

%

16.26

%

(1.27

%)

(7.8

%)

Bank14.98

%

14.84

%

0.14

%

1.0

%

16.22

%

(1.24

%)

(7.7

%)

Tangible common equity per share$

17.76

$

17.08

$

0.68

4.0

%

$

15.61

$

2.15

13.8

%

Loan-to-Deposit (LTD) ratio79.67

%

75.38

%

4.29

%

5.7

%

94.95

%

(15.28

%)

(16.1

%)

Nonperforming assets$

747

$

768

$

(21

)

(2.7

%)

$

2,361

$

(1,614

)

(68.4

%)

Nonperforming assets as a % of loans receivable0.06

%

0.06

%

-

-

0.23

%

(0.17

%)

(73.9

%)

ALLL as a % of loans receivable1.14

%

1.19

%

(0.05

%)

(4.2

%)

1.38

%

(0.24

%)

(17.4

%)

ALLL as a % of loans receivable exc. SBA PPP loans1.18

%

1.26

%

(0.08

%)

(6.3

%)

1.51

%

(0.33

%)

(21.9

%)

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

2021 2021 Change Change 2020 Change Change

ASSETSCash and due from $ 7,702 $ 11,621 $ (3,919 ) (33.7 %) $ 8,750 $ (1,048 ) (12.0 %)banksInterest-earning 284,583 386,087 (101,504 ) (26.3 %) 153,908 130,675 84.9 %deposits at the FRBand other banksInvestment 84,238 86,440 (2,202 ) (2.5 %) 85,914 (1,676 ) (2.0 %)securities^1Loansheld-for-sale, at 158,128 136,394 21,734 15.9 % 59,077 99,051 167.7 %the lower of costor fair value Loans receivable 1,241,319 1,255,814 (14,495 ) (1.2 %) 1,043,662 197,657 18.9 %

Allowance for loan (14,192 ) (15,000 ) 808 5.4 % (14,366 ) 174 1.2 %lossesLoans receivable, 1,227,127 1,240,814 (13,687 ) (1.1 %) 1,029,296 197,831 19.2 %net OREO - - - - - - -

Restricted stock 8,850 8,850 - - 8,196 654 8.0 %investmentsServicing assets 10,632 10,392 240 2.3 % 9,873 759 7.7 %

Goodwill 2,185 2,269 (84 ) (3.7 %) - 2,185 100.0 %

Intangible assets 360 375 (15 ) (4.0 %) - 360 100.0 %

Other assets 24,996 25,859 (863 ) (3.3 %) 20,233 4,763 23.5 %

Total assets $ 1,808,801 $ 1,909,101 $ (100,300 ) (5.3 %) $ 1,375,247 $ 433,554 31.5 %

LIABILITIES ANDSTOCKHOLDERS'EQUITYNoninterest-bearing $ 619,774 $ 670,489 $ (50,715 ) (7.6 %) $ 335,219 $ 284,555 84.9 %

Interest-bearing 938,338 995,574 (57,236 ) (5.7 %) 763,906 174,432 22.8 %

Total deposits 1,558,112 1,666,063 (107,951 ) (6.5 %) 1,099,125 458,987 41.8 %

FHLB advances and 50,000 50,000 - - 105,000 (55,000 ) (52.4 %)other borrowingOther liabilities 15,447 14,719 728 4.9 % 11,145 4,302 38.6 %

Total liabilities 1,623,559 1,730,782 (107,223 ) (6.2 %) 1,215,270 408,289 33.6 %

Stockholders' 185,242 178,319 6,923 3.9 % 159,977 25,265 15.8 %EquityTOTAL LIABILITIES & $ 1,808,801 $ 1,909,101 $ (100,300 ) (5.3 %) $ 1,375,247 $ 433,554 31.5 %STOCKHOLDERS'EQUITY CAPITAL RATIOSLeverage ratioCompany 9.55 % 9.61 % (0.06 %) (0.6 %) 11.56 % (2.01 %) (17.4 %)

Bank 9.55 % 9.60 % (0.05 %) (0.5 %) 11.54 % (1.99 %) (17.3 %)

Common equity tier1 risk-basedcapital ratioCompany 13.84 % 13.61 % 0.23 % 1.7 % 15.01 % (1.17 %) (7.8 %)

Bank 13.83 % 13.59 % 0.24 % 1.7 % 14.97 % (1.14 %) (7.6 %)

Tier 1 risk-basedcapital ratioCompany 13.84 % 13.61 % 0.23 % 1.7 % 15.01 % (1.17 %) (7.8 %)

Bank 13.83 % 13.59 % 0.24 % 1.7 % 14.97 % (1.14 %) (7.6 %)

Total risk-basedcapital ratioCompany 14.99 % 14.86 % 0.13 % 0.9 % 16.26 % (1.27 %) (7.8 %)

Bank 14.98 % 14.84 % 0.14 % 1.0 % 16.22 % (1.24 %) (7.7 %)

Tangible common $ 17.76 $ 17.08 $ 0.68 4.0 % $ 15.61 $ 2.15 13.8 %equity per shareLoan-to-Deposit 79.67 % 75.38 % 4.29 % 5.7 % 94.95 % (15.28 %) (16.1 %)(LTD) ratioNonperforming $ 747 $ 768 $ (21 ) (2.7 %) $ 2,361 $ (1,614 ) (68.4 %)assetsNonperforming 0.06 % 0.06 % - - 0.23 % (0.17 %) (73.9 %)assets as a % ofloans receivableALLL as a % of 1.14 % 1.19 % (0.05 %) (4.2 %) 1.38 % (0.24 %) (17.4 %)loans receivableALLL as a % of 1.18 % 1.26 % (0.08 %) (6.3 %) 1.51 % (0.33 %) (21.9 %)loans receivableexc. SBA PPP loans ^1 Includes AFS andHTMFIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3(Dollars in thousands, except per share amounts)Three Months EndedDecember 31,

September 30,

June 30,

March 31,

December 31,

2021

2021

2021

2021

2020

Interest income$

17,553

$

17,437

$

14,923

$

14,372

$

13,613

Interest expense1,265

1,337

1,358

1,533

1,830

Net interest income16,288

16,100

13,565

12,839

11,783

Provision for loan losses(800

)

-

-

500

1,600

Net interest income after provision for loan losses17,088

16,100

13,565

12,339

10,183

Gain on sale of loans4,151

4,305

3,988

2,456

1,484

Gain (loss) on sale of OREO-

-

-

-

-

SBA servicing fee income, net683

698

622

847

701

Reversal of valuation allowance on servicing assets-

-

-

-

894

Service charges and other income499

540

395

379

364

Noninterest income5,333

5,543

5,005

3,682

3,443

Salaries and employee benefits6,614

6,500

6,000

4,853

5,477

Occupancy and equipment1,028

1,067

945

979

936

Marketing expense111

287

309

287

133

Professional expense368

495

491

455

478

Merger related expense454

450

600

681

40

Other expenses2,850

1,807

1,356

1,300

1,329

Noninterest expense11,425

10,606

9,701

8,555

8,393

Income before income tax expense10,996

11,037

8,869

7,466

5,233

Income tax expense2,984

3,156

2,566

2,132

1,519

Net income$

8,012

$

7,881

$

6,303

$

5,334

$

3,714

Effective tax rate27.1

%

28.6

%

28.9

%

28.6

%

29.0

%

Outstanding number of shares10,284,962

10,284,962

10,279,962

10,247,292

10,247,292

Weighted average shares for basic EPS10,284,962

10,280,016

10,262,956

10,247,292

10,247,292

Weighted average shares for diluted EPS10,424,771

10,427,687

10,392,427

10,300,518

10,285,410

Basic EPS$

0.78

$

0.77

$

0.61

$

0.52

$

0.36

Diluted EPS$

0.77

$

0.75

$

0.61

$

0.52

$

0.36

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

2021 2021 2021 2021 2020

Interest $ 17,553 $ 17,437 $ 14,923 $ 14,372 $ 13,613 incomeInterest 1,265 1,337 1,358 1,533 1,830 expenseNet interest 16,288 16,100 13,565 12,839 11,783 income Provision (800 ) - - 500 1,600 for loanlossesNet interestincome after 17,088 16,100 13,565 12,339 10,183 provisionfor loanlosses Gain on sale 4,151 4,305 3,988 2,456 1,484 of loansGain (loss) - - - - - on sale ofOREOSBAservicing 683 698 622 847 701 fee income,netReversal ofvaluation - - - - 894 allowance onservicingassetsService 499 540 395 379 364 charges andother incomeNoninterest 5,333 5,543 5,005 3,682 3,443 income Salaries and 6,614 6,500 6,000 4,853 5,477 employeebenefitsOccupancy 1,028 1,067 945 979 936 andequipmentMarketing 111 287 309 287 133 expenseProfessional 368 495 491 455 478 expenseMerger 454 450 600 681 40 relatedexpenseOther 2,850 1,807 1,356 1,300 1,329 expensesNoninterest 11,425 10,606 9,701 8,555 8,393 expense Incomebefore 10,996 11,037 8,869 7,466 5,233 income taxexpense Income tax 2,984 3,156 2,566 2,132 1,519 expense Net income $ 8,012 $ 7,881 $ 6,303 $ 5,334 $ 3,714

Effective 27.1 % 28.6 % 28.9 % 28.6 % 29.0 %tax rate Outstanding 10,284,962 10,284,962 10,279,962 10,247,292 10,247,292 number ofshares Weightedaverage 10,284,962 10,280,016 10,262,956 10,247,292 10,247,292 shares forbasic EPSWeightedaverage 10,424,771 10,427,687 10,392,427 10,300,518 10,285,410 shares fordiluted EPS Basic EPS $ 0.78 $ 0.77 $ 0.61 $ 0.52 $ 0.36

Diluted EPS $ 0.77 $ 0.75 $ 0.61 $ 0.52 $ 0.36

FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4(Dollars in thousands)At or for the Three Months EndedDecember 31,

September 30,

June 30,

March 31,

December 31,

2021

2021

2021

2021

2020

Salaries and benefits$

6,614

$

6,500

$

6,000

$

4,853

$

5,477

FTE at the end of period205

200

183

186

183

Average FTE during the period201

202

182

187

184

Salaries and benefits/average FTE^1$

131

$

127

$

132

$

105

$

118

Salaries and benefits/average assets^11.39

%

1.43

%

1.33

%

1.44

%

1.58

%

Noninterest expense/average assets^12.40

%

2.33

%

2.16

%

2.34

%

2.42

%

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

2021 2021 2021 2021 2020

Salaries and benefits $ 6,614 $ 6,500 $ 6,000 $ 4,853 $ 5,477

FTE at the end of period 205 200 183 186 183

Average FTE during the 201 202 182 187 184 periodSalaries and benefits/ $ 131 $ 127 $ 132 $ 105 $ 118 average FTE^1Salaries and benefits/ 1.39 % 1.43 % 1.33 % 1.44 % 1.58 %average assets^1Noninterest expense/ 2.40 % 2.33 % 2.16 % 2.34 % 2.42 %average assets^1 ^1 AnnualizedFIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5(Dollars in thousands)December 31,

September 30,

June 30,

March 31,

December 31,

2021

2021

2021

2021

2020

ASSETSCash and due from banks$

7,702

$

11,621

$

10,509

$

9,215

$

8,750

Interest-earning deposits at the FRB and other banks284,583

386,087

240,932

129,713

153,908

Investment securities^184,238

86,440

82,354

83,409

85,914

Loans held-for-sale, at the lower of cost or fair value158,128

136,394

96,554

76,066

59,077

Loans receivable1,241,319

1,255,814

1,133,371

1,113,629

1,043,662

Allowance for loan losses(14,192

)

(15,000

)

(14,908

)

(14,888

)

(14,366

)

Loans receivable, net1,227,127

1,240,814

1,118,463

1,098,741

1,029,296

OREO-

-

-

-

-

Restricted stock investments8,850

8,850

8,850

8,196

8,196

Servicing assets10,632

10,392

10,189

10,000

9,873

Goodwill2,185

2,269

-

-

-

Intangible assets360

375

-

-

-

Other assets24,996

25,859

45,071

21,431

20,233

Total assets$

1,808,801

$

1,909,101

$

1,612,922

$

1,436,771

$

1,375,247

LIABILITIES AND STOCKHOLDERS' EQUITYNoninterest-bearing$

619,774

$

670,489

$

572,284

$

408,738

$

335,219

Interest-bearing938,338

995,574

806,397

782,778

763,906

Total deposits1,558,112

1,666,063

1,378,681

1,191,516

1,099,125

FHLB advances50,000

50,000

50,000

65,000

105,000

Other liabilities15,447

14,719

13,026

15,170

11,145

Total liabilities1,623,559

1,730,782

1,441,707

1,271,686

1,215,270

Stockholders' Equity185,242

178,319

171,215

165,085

159,977

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,808,801

$

1,909,101

$

1,612,922

$

1,436,771

$

1,375,247

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

2021 2021 2021 2021 2020

ASSETSCash and due from $ 7,702 $ 11,621 $ 10,509 $ 9,215 $ 8,750 banksInterest-earning 284,583 386,087 240,932 129,713 153,908 deposits at the FRBand other banksInvestment 84,238 86,440 82,354 83,409 85,914 securities^1Loansheld-for-sale, at 158,128 136,394 96,554 76,066 59,077 the lower of costor fair value Loans receivable 1,241,319 1,255,814 1,133,371 1,113,629 1,043,662

Allowance for loan (14,192 ) (15,000 ) (14,908 ) (14,888 ) (14,366 )lossesLoans receivable, 1,227,127 1,240,814 1,118,463 1,098,741 1,029,296 net OREO - - - - -

Restricted stock 8,850 8,850 8,850 8,196 8,196 investmentsServicing assets 10,632 10,392 10,189 10,000 9,873

Goodwill 2,185 2,269 - - -

Intangible assets 360 375 - - -

Other assets 24,996 25,859 45,071 21,431 20,233

Total assets $ 1,808,801 $ 1,909,101 $ 1,612,922 $ 1,436,771 $ 1,375,247

LIABILITIES ANDSTOCKHOLDERS'EQUITYNoninterest-bearing $ 619,774 $ 670,489 $ 572,284 $ 408,738 $ 335,219

Interest-bearing 938,338 995,574 806,397 782,778 763,906

Total deposits 1,558,112 1,666,063 1,378,681 1,191,516 1,099,125

FHLB advances 50,000 50,000 50,000 65,000 105,000

Other liabilities 15,447 14,719 13,026 15,170 11,145

Total liabilities 1,623,559 1,730,782 1,441,707 1,271,686 1,215,270

Stockholders' 185,242 178,319 171,215 165,085 159,977 EquityTOTAL LIABILITIES & $ 1,808,801 $ 1,909,101 $ 1,612,922 $ 1,436,771 $ 1,375,247 STOCKHOLDERS'EQUITY ^1 Includes AFS andHTMFIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands)December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020Balance%Balance%Balance%Balance%Balance%Construction$

23,939

1.9

%

$

21,725

1.7

%

$

18,753

1.7

%

$

15,858

1.4

%

$

13,685

1.3

%

Commercial real estate978,995

78.9

%

971,387

77.4

%

893,700

78.9

%

855,861

76.9

%

820,355

78.6

%

Commercial and industrial169,489

13.7

%

198,217

15.8

%

217,350

19.2

%

237,865

21.4

%

205,883

19.7

%

Home mortgage61,030

4.9

%

60,075

4.8

%

-

-

-

-

-

-

Consumer4,269

0.3

%

2,185

0.2

%

2,236

0.2

%

3,504

0.3

%

2,439

0.2

%

Gross loans1,237,722

99.7

%

1,253,589

99.8

%

1,132,039

99.9

%

1,113,088

100.0

%

1,042,362

99.9

%

Net deferred loan fees/costs3,597

0.3

%

2,225

0.2

%

1,332

0.1

%

541

0.0

%

1,300

0.1

%

Loans receivable$

1,241,319

100.0

%

$

1,255,814

100.0

%

$

1,133,371

100.0

%

$

1,113,629

100.0

%

$

1,043,662

100.0

%

Loans held-for-sale$

158,128

$

136,394

$

96,554

$

76,066

$

59,077

Loans receivable, including loans held-for-sale$

1,399,447

$

1,392,208

$

1,229,925

$

1,189,695

$

1,102,739

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6(Dollars in thousands) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Balance % Balance % Balance % Balance % Balance % Construction $ 23,939 1.9 % $ 21,725 1.7 % $ 18,753 1.7 % $ 15,858 1.4 % $ 13,685 1.3 %

Commercial 978,995 78.9 % 971,387 77.4 % 893,700 78.9 % 855,861 76.9 % 820,355 78.6 %real estateCommercial 169,489 13.7 % 198,217 15.8 % 217,350 19.2 % 237,865 21.4 % 205,883 19.7 %andindustrialHome mortgage 61,030 4.9 % 60,075 4.8 % - - - - - -

Consumer 4,269 0.3 % 2,185 0.2 % 2,236 0.2 % 3,504 0.3 % 2,439 0.2 %

Gross loans 1,237,722 99.7 % 1,253,589 99.8 % 1,132,039 99.9 % 1,113,088 100.0 % 1,042,362 99.9 %

Net deferred 3,597 0.3 % 2,225 0.2 % 1,332 0.1 % 541 0.0 % 1,300 0.1 %loan fees/costsLoans $ 1,241,319 100.0 % $ 1,255,814 100.0 % $ 1,133,371 100.0 % $ 1,113,629 100.0 % $ 1,043,662 100.0 %receivable Loans $ 158,128 $ 136,394 $ 96,554 $ 76,066 $ 59,077held-for-saleLoansreceivable, $ 1,399,447 $ 1,392,208 $ 1,229,925 $ 1,189,695 $ 1,102,739includingloansheld-for-saleFIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7(Dollars in thousands)Three Months EndedDecember 31,

September 30,

June 30,

March 31,

December 31,

2021

2021

2021

2021

2020

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

136,394

$

96,554

$

76,066

$

59,077

$

53,755

SBA loans originated/transferred from/to held-for-investment during the quarter/year68,136

82,303

62,864

48,152

26,837

SBA loans sold during the quarter/year(42,210

)

(42,019

)

(42,163

)

(30,238

)

(20,382

)

SBA loans principal payment, net of advance(4,193

)

(444

)

(213

)

(925

)

(1,133

)

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

158,128

$

136,394

$

96,554

$

76,066

$

59,077

Gain on sale of SBA loans$

4,151

$

4,305

$

4,305

$

3,988

$

2,456

Premium on sale (weighted average)11.1

%

11.5

%

11.9

%

10.9

%

10.7

%

SBA loan production$

82,448

$

93,986

$

78,058

$

123,762

$

37,116

Non-PPP loans82,448

93,986

75,065

71,204

37,116

PPP loans-

-

2,994

52,558

-

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

2021 2021 2021 2021 2020

SBA loansheld-for-sale at $ 136,394 $ 96,554 $ 76,066 $ 59,077 $ 53,755 beginning of thequarter/yearSBA loansoriginated/transferred from/to 68,136 82,303 62,864 48,152 26,837 held-for-investmentduring the quarter/yearSBA loans sold (42,210 ) (42,019 ) (42,163 ) (30,238 ) (20,382 )during the quarter/yearSBA loans principal (4,193 ) (444 ) (213 ) (925 ) (1,133 )payment, net ofadvanceSBA loansheld-for-sale at $ 158,128 $ 136,394 $ 96,554 $ 76,066 $ 59,077 end of the quarter/year Gain on sale of SBA $ 4,151 $ 4,305 $ 4,305 $ 3,988 $ 2,456 loansPremium on sale 11.1 % 11.5 % 11.9 % 10.9 % 10.7 %(weighted average) SBA loan production $ 82,448 $ 93,986 $ 78,058 $ 123,762 $ 37,116

Non-PPP loans 82,448 93,986 75,065 71,204 37,116

PPP loans - - 2,994 52,558 -

FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8(Dollars in thousands)Three Months EndedDecember 31,

September 30,

June 30,

March 31,

December 31,

2021

2021

2021

2021

2020

SBA servicing assets @ beginning of the quarter/year$

10,392

$

10,189

$

10,000

$

9,873

$

9,043

Newly added SBA servicing assets from SBA loans sold1,006

920

897

635

441

Regular quarterly/annual servicing assets amortization(453

)

(421

)

(422

)

(358

)

(392

)

SBA servicing assets amortized from SBA loans paid off/charged off(313

)

(296

)

(286

)

(150

)

(113

)

Subtotal before impairment10,632

10,392

10,189

10,000

8,979

Reversal of valuation allowance on servicing assets-

-

-

-

894

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

10,632

$

10,392

$

10,189

$

10,000

$

9,873

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

2021 2021 2021 2021 2020

SBA servicingassets @ $ 10,392 $ 10,189 $ 10,000 $ 9,873 $ 9,043 beginning of thequarter/year Newly added SBAservicing assets 1,006 920 897 635 441 from SBA loanssoldRegularquarterly/annual (453 ) (421 ) (422 ) (358 ) (392 )servicing assetsamortizationSBA servicingassets amortized (313 ) (296 ) (286 ) (150 ) (113 )from SBA loanspaid off/chargedoff Subtotal before 10,632 10,392 10,189 10,000 8,979 impairment Reversal ofvaluation - - - - 894 allowance onservicing assets SBA servicingassets @ the end $ 10,632 $ 10,392 $ 10,189 $ 10,000 $ 9,873 of the quarter/yearFIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands)December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020Balance%Balance%Balance%Balance%Balance%Noninterest-bearing demand$

619,774

39.8%

$

670,489

40.2%

$

572,284

41.5%

$

408,738

34.3%

$

335,219

30.5%

Interest-bearing demand10,723

0.7%

10,904

0.7%

-

-

-

-

-

-

NOW & MMDA325,313

20.9%

376,549

22.6%

291,437

21.1%

270,531

22.7%

260,374

23.7%

Savings76,588

4.9%

75,497

4.5%

41,284

3.0%

46,280

3.9%

51,659

4.7%

TCDs of $250K and under259,758

16.7%

264,130

15.9%

219,174

15.9%

226,611

19.0%

232,192

21.1%

TCDs of $250K over174,939

11.2%

177,477

10.7%

158,485

11.5%

151,094

12.7%

150,143

13.7%

Wholesale TCDs91,017

5.8%

91,017

5.5%

96,017

7.0%

88,262

7.4%

69,538

6.3%

Total Deposits$

1,558,112

100.0%

$

1,666,063

100.0%

$

1,378,681

100.0%

$

1,191,516

100.0%

$

1,099,125

100.0%

Recap:Noninterest-bearing demand$

619,774

39.8%

$

670,489

40.2%

$

572,284

41.5%

$

408,738

34.3%

$

335,219

30.5%

Interest-bearing demand10,723

0.7%

10,904

0.7%

-

-

-

-

-

-

NOW & MMDA325,313

20.9%

376,549

22.6%

291,437

21.1%

270,531

22.7%

260,374

23.7%

Savings76,588

4.9%

75,497

4.5%

41,284

3.0%

46,280

3.9%

51,659

4.7%

TCDs of $250K and under259,758

16.7%

264,130

15.9%

219,174

15.9%

226,611

19.0%

232,192

21.1%

Core Deposits1,292,156

82.9%

1,397,569

83.9%

1,124,179

81.5%

952,160

79.9%

879,444

80.0%

TCDs of $250K over174,939

11.2%

177,477

10.7%

158,485

11.5%

151,094

12.7%

150,143

13.7%

Wholesale TCDs91,017

5.8%

91,017

5.5%

96,017

7.0%

88,262

7.4%

69,538

6.3%

Noncore Deposits265,956

17.1%

268,494

16.1%

254,502

18.5%

239,356

20.1%

219,681

20.0%

Total Deposits$

1,558,112

100.0%

$

1,666,063

100.0%

$

1,378,681

100.0%

$

1,191,516

100.0%

$

1,099,125

100.0%

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9(Dollars in thousands) December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Balance % Balance % Balance % Balance % Balance % Noninterest-bearing $ 619,774 39.8% $ 670,489 40.2% $ 572,284 41.5% $ 408,738 34.3% $ 335,219 30.5%demandInterest-bearing demand 10,723 0.7% 10,904 0.7% - - - - - -

NOW & MMDA 325,313 20.9% 376,549 22.6% 291,437 21.1% 270,531 22.7% 260,374 23.7%

Savings 76,588 4.9% 75,497 4.5% 41,284 3.0% 46,280 3.9% 51,659 4.7%

TCDs of $250K and under 259,758 16.7% 264,130 15.9% 219,174 15.9% 226,611 19.0% 232,192 21.1%

TCDs of $250K over 174,939 11.2% 177,477 10.7% 158,485 11.5% 151,094 12.7% 150,143 13.7%

Wholesale TCDs 91,017 5.8% 91,017 5.5% 96,017 7.0% 88,262 7.4% 69,538 6.3%

Total Deposits $ 1,558,112 100.0% $ 1,666,063 100.0% $ 1,378,681 100.0% $ 1,191,516 100.0% $ 1,099,125 100.0%

Recap:Noninterest-bearing $ 619,774 39.8% $ 670,489 40.2% $ 572,284 41.5% $ 408,738 34.3% $ 335,219 30.5%demandInterest-bearing demand 10,723 0.7% 10,904 0.7% - - - - - -

NOW & MMDA 325,313 20.9% 376,549 22.6% 291,437 21.1% 270,531 22.7% 260,374 23.7%

Savings 76,588 4.9% 75,497 4.5% 41,284 3.0% 46,280 3.9% 51,659 4.7%

TCDs of $250K and under 259,758 16.7% 264,130 15.9% 219,174 15.9% 226,611 19.0% 232,192 21.1%

Core Deposits 1,292,156 82.9% 1,397,569 83.9% 1,124,179 81.5% 952,160 79.9% 879,444 80.0%

TCDs of $250K over 174,939 11.2% 177,477 10.7% 158,485 11.5% 151,094 12.7% 150,143 13.7%

Wholesale TCDs 91,017 5.8% 91,017 5.5% 96,017 7.0% 88,262 7.4% 69,538 6.3%

Noncore Deposits 265,956 17.1% 268,494 16.1% 254,502 18.5% 239,356 20.1% 219,681 20.0%

Total Deposits $ 1,558,112 100.0% $ 1,666,063 100.0% $ 1,378,681 100.0% $ 1,191,516 100.0% $ 1,099,125 100.0%

FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10(Dollars in thousands)4th Qtr.

3rd Qtr.

2nd Qtr.

1st Qtr.

4th Qtr.

2021

2021

2021

2021

2020

Allowance for Loan LossesBalance at beginning of period$

15,000

$

14,908

$

14,888

$

14,366

$

13,614

Provision for loan losses(800

)

-

-

500

1,600

Charge-offs(89

)

-

-

(2

)

(907

)

Recoveries81

92

20

24

59

Balance at the end of period$

14,192

$

15,000

$

14,908

$

14,888

$

14,366

Nonperforming Assets:^1Over 90 days still accruing$

-

$

-

$

-

$

-

$

2

Nonaccrual loans747

768

1,339

1,347

2,359

Total nonperforming loans747

768

1,339

1,347

2,361

Other real estate owned-

-

-

-

-

Total nonperforming assets$

747

$

768

$

1,339

$

1,347

$

2,361

Classified Assets:^1Substandard$

11,156

$

10,672

$

10,052

$

9,843

$

18,920

Doubtful-

-

-

-

68

Loss-

-

-

-

-

Total classified loans$

11,156

$

10,672

$

10,052

$

9,843

$

18,988

Other real estate owned-

-

-

-

-

Total classified assets$

11,156

$

10,672

$

10,052

$

9,843

$

18,988

Performing TDR loans:$

3,521

$

3,658

$

3,776

$

2,516

$

2,847

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

267

$

1,688

$

2,524

$

1,681

$

3,095

90 days or more past due and still accruing-

-

-

-

2

Nonaccrual747

768

1,339

1,347

2,359

Total delinquent loans$

1,014

$

2,456

$

3,863

$

3,028

$

5,456

Asset Quality Ratios:Net (recoveries) charge-offs to average loans?0.00

%

(0.03

%)

(0.01

%)

(0.01

%)

0.32

%

Nonaccrual loans to loans receivable0.06

%

0.06

%

0.12

%

0.12

%

0.23

%

Nonperforming loans to loans receivable0.06

%

0.06

%

0.12

%

0.12

%

0.23

%

Nonperforming assets to total assets0.04

%

0.04

%

0.08

%

0.09

%

0.17

%

Classified loans to loans receivable0.90

%

0.85

%

0.89

%

0.88

%

1.82

%

Classified loans to Tier 1 and ALLL5.67

%

5.53

%

5.40

%

5.47

%

10.89

%

Classified assets to total assets0.62

%

0.56

%

0.62

%

0.69

%

1.38

%

Classified assets to Tier 1 and ALLL5.67

%

5.53

%

5.40

%

5.47

%

10.89

%

ALLL to loans receivable1.14

%

1.19

%

1.32

%

1.34

%

1.38

%

ALLL to loans receivable exc. SBA PPP loans1.18

%

1.26

%

1.42

%

1.48

%

1.51

%

ALLL to nonaccrual loans1899.87

%

1953.13

%

1113.37

%

1105.27

%

608.99

%

ALLL to nonperforming loans1899.87

%

1953.13

%

1113.37

%

1105.27

%

608.47

%

ALLL to nonperforming assets1899.87

%

1953.13

%

1113.37

%

1105.27

%

608.47

%

Texas ratio ?0.38

%

0.40

%

0.72

%

0.75

%

1.35

%

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

2021 2021 2021 2021 2020

Allowance forLoan LossesBalance at $ 15,000 $ 14,908 $ 14,888 $ 14,366 $ 13,614 beginning ofperiodProvision for (800 ) - - 500 1,600 loan lossesCharge-offs (89 ) - - (2 ) (907 )

Recoveries 81 92 20 24 59

Balance at $ 14,192 $ 15,000 $ 14,908 $ 14,888 $ 14,366 the end ofperiod NonperformingAssets:^1Over 90 days $ - $ - $ - $ - $ 2 stillaccruingNonaccrual 747 768 1,339 1,347 2,359 loansTotal 747 768 1,339 1,347 2,361 nonperformingloans Other real - - - - - estate ownedTotal $ 747 $ 768 $ 1,339 $ 1,347 $ 2,361 nonperformingassets ClassifiedAssets:^1Substandard $ 11,156 $ 10,672 $ 10,052 $ 9,843 $ 18,920

Doubtful - - - - 68

Loss - - - - -

Total $ 11,156 $ 10,672 $ 10,052 $ 9,843 $ 18,988 classifiedloans Other real - - - - - estate ownedTotal $ 11,156 $ 10,672 $ 10,052 $ 9,843 $ 18,988 classifiedassets Performing $ 3,521 $ 3,658 $ 3,776 $ 2,516 $ 2,847 TDR loans: DelinquentLoans:^1Loans 30-89 $ 267 $ 1,688 $ 2,524 $ 1,681 $ 3,095 days past due90 days ormore past due - - - - 2 and stillaccruingNonaccrual 747 768 1,339 1,347 2,359

Total $ 1,014 $ 2,456 $ 3,863 $ 3,028 $ 5,456 delinquentloans Asset QualityRatios:Net(recoveries) 0.00 % (0.03 %) (0.01 %) (0.01 %) 0.32 %charge-offsto averageloans?Nonaccrualloans to 0.06 % 0.06 % 0.12 % 0.12 % 0.23 %loansreceivableNonperformingloans to 0.06 % 0.06 % 0.12 % 0.12 % 0.23 %loansreceivableNonperforming 0.04 % 0.04 % 0.08 % 0.09 % 0.17 %assets tototal assetsClassifiedloans to 0.90 % 0.85 % 0.89 % 0.88 % 1.82 %loansreceivableClassified 5.67 % 5.53 % 5.40 % 5.47 % 10.89 %loans to Tier1 and ALLLClassified 0.62 % 0.56 % 0.62 % 0.69 % 1.38 %assets tototal assetsClassifiedassets to 5.67 % 5.53 % 5.40 % 5.47 % 10.89 %Tier 1 andALLLALLL to loans 1.14 % 1.19 % 1.32 % 1.34 % 1.38 %receivableALLL to loansreceivable 1.18 % 1.26 % 1.42 % 1.48 % 1.51 %exc. SBA PPPloansALLL to 1899.87 % 1953.13 % 1113.37 % 1105.27 % 608.99 %nonaccrualloansALLL to 1899.87 % 1953.13 % 1113.37 % 1105.27 % 608.47 %nonperformingloansALLL to 1899.87 % 1953.13 % 1113.37 % 1105.27 % 608.47 %nonperformingassetsTexas ratio ? 0.38 % 0.40 % 0.72 % 0.75 % 1.35 %

1

Net of SBA guaranteed balance

2

Includes loans held-for-sale

3

Nonperforming assets divided by tangible common equity and ALLL

^1 Net of SBA guaranteed balance

^2 Includes loans held-for-sale

^3 Nonperforming assets divided by tangible common equity and ALLL

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11Well CapitalizedAdequately CapitalizedDecember 31,September 30,June 30,March 31,December 31,RegulatoryBASEL IIIRequirementFully Phased In2021

2021

2021

2021

2020

Leverage ratioCompanyN/A

N/A

9.55%

9.61%

11.35%

11.89%

11.56%

Bank5.00%

4.00%

9.55%

9.60%

11.33%

11.87%

11.54%

Common equity tier 1 risk-based capital ratioCompanyN/A

N/A

13.84%

13.61%

14.39%

15.00%

15.01%

Bank6.50%

7.00%

13.83%

13.59%

14.37%

14.98%

14.97%

Tier 1 risk-based capital ratioCompanyN/A

N/A

13.84%

13.61%

14.39%

15.00%

15.01%

Bank8.00%

8.50%

13.83%

13.59%

14.37%

14.98%

14.97%

Total risk-based capital ratioCompanyN/A

N/A

14.99%

14.86%

15.64%

16.25%

16.26%

Bank10.00%

10.50%

14.98%

14.84%

15.62%

16.23%

16.22%

Tangible common equity/total assets10.11%

9.21%

10.62%

11.49%

11.63%

Tangible common equity per share$ 17.76

$ 17.08

$ 16.66

$ 16.11

$ 15.61

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11 Well Adequately December September June March December Capitalized Capitalized 31, 30, 30, 31, 31, Regulatory BASEL III Requirement Fully 2021 2021 2021 2021 2020 Phased In Leverage ratioCompany N/A N/A 9.55% 9.61% 11.35% 11.89% 11.56%

Bank 5.00% 4.00% 9.55% 9.60% 11.33% 11.87% 11.54%

Commonequitytier 1 risk-basedcapitalratioCompany N/A N/A 13.84% 13.61% 14.39% 15.00% 15.01%

Bank 6.50% 7.00% 13.83% 13.59% 14.37% 14.98% 14.97%

Tier 1risk-based capitalratioCompany N/A N/A 13.84% 13.61% 14.39% 15.00% 15.01%

Bank 8.00% 8.50% 13.83% 13.59% 14.37% 14.98% 14.97%

Totalrisk-based capitalratioCompany N/A N/A 14.99% 14.86% 15.64% 16.25% 16.26%

Bank 10.00% 10.50% 14.98% 14.84% 15.62% 16.23% 16.22%

Tangiblecommon 10.11% 9.21% 10.62% 11.49% 11.63%equity/ totalassetsTangible $ $common $ 17.76 $ 17.08 16.66 16.11 $ 15.61equity pershareFIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12(Dollars in thousands)Three Months EndedDecember 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020Avg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldAvg BalanceInterestYieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1$

1,396,201

$

16,893

4.80

%

$

1,390,851

$

16,800

4.79

%

$

1,195,908

$

14,338

4.81

%

$

1,138,134

$

13,837

4.93

%

$

1,066,368

$

13,045

4.87

%

Investment securities?85,555

454

2.11

%

87,585

460

2.08

%

83,152

442

2.13

%

84,679

448

2.15

%

87,818

474

2.15

%

Interest-earning deposits at the FRB and other banks365,501

144

0.16

%

282,512

112

0.16

%

168,677

54

0.13

%

108,127

36

0.14

%

191,703

59

0.12

%

Other earning assets8,850

115

5.16

%

8,925

116

5.16

%

8,737

135

6.20

%

8,196

97

4.80

%

8,196

81

3.93

%

Total interest-earning assets ?1,856,107

17,606

3.76

%

1,769,873

17,488

3.92

%

1,456,474

14,969

4.12

%

1,339,136

14,418

4.37

%

1,354,085

13,659

4.01

%

NONINTEREST-EARNING ASSETSCash and due from banks13,318

13,079

10,752

10,025

10,234

Other noninterest-earning assets37,774

36,548

32,002

31,156

28,903

Total noninterest-earning assets51,092

49,627

42,754

41,181

39,137

Less: Allowance for loan losses(14,849

)

(14,958

)

(14,899

)

(14,381

)

(13,505

)

TOTAL ASSETS$

1,892,350

$

1,804,542

$

1,484,329

$

1,365,936

$

1,379,717

INTEREST-BEARING DEPOSITSInterest-bearing demand$

27,904

$

3

0.04

%

$

36,670

$

4

0.04

%

$

13,373

$

2

0.06

%

$

15,813

$

2

0.05

%

$

11,444

$

4

0.14

%

Money market338,937

401

0.47

%

312,606

388

0.49

%

263,845

352

0.54

%

265,856

366

0.56

%

240,913

360

0.59

%

Savings77,057

68

0.35

%

74,266

71

0.38

%

43,433

55

0.51

%

48,284

60

0.50

%

55,756

77

0.55

%

Time deposits527,634

674

0.51

%

542,901

756

0.55

%

469,000

831

0.71

%

451,347

975

0.88

%

447,839

1,236

1.10

%

Total interest-bearing deposits971,532

1,146

0.47

%

966,443

1,219

0.50

%

789,651

1,240

0.63

%

781,300

1,403

0.73

%

755,952

1,677

0.88

%

Borrowings50,000

119

0.94

%

50,000

118

0.94

%

51,539

118

0.92

%

65,667

130

0.80

%

88,645

153

0.69

%

Total interest-bearing liabilities1,021,532

1,265

0.49

%

1,016,443

1,337

0.52

%

841,190

1,358

0.65

%

846,967

1,533

0.73

%

844,597

1,830

0.86

%

Noninterest-bearing deposits673,154

597,056

459,695

343,904

363,937

Other liabilities16,420

16,046

13,906

11,942

12,623

Stockholders' equity181,244

174,997

169,538

163,123

158,560

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,892,350

$

1,804,542

$

1,484,329

$

1,365,936

$

1,379,717

Net interest income?$

16,341

$

16,151

$

13,611

$

12,885

$

11,829

Net interest spread3.27

%

3.40

%

3.47

%

3.64

%

3.15

%

Effect of noninterest-bearing sources0.22

%

0.22

%

0.28

%

0.26

%

0.33

%

Net interest margin?3.49

%

3.62

%

3.75

%

3.90

%

3.48

%

Cost of deposits$

1,644,686

$

1,146

0.28

%

$

1,563,499

$

1,219

0.31

%

$

1,249,346

$

1,240

0.40

%

$

1,125,204

$

1,403

0.51

%

$

1,119,889

$

1,677

0.60

%

Cost of funds$

1,694,686

$

1,265

0.30

%

$

1,613,499

$

1,337

0.33

%

$

1,300,885

$

1,358

0.42

%

$

1,190,871

$

1,533

0.52

%

$

1,208,534

$

1,830

0.60

%

FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12(Dollars in thousands) Three Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest Yield Avg Balance Interest YieldNumber of Days in the PeriodINTEREST-EARNING ASSETS

$

13,045Loans ^1 $ 1,396,201 $ 16,893 4.80 % $ 1,390,851 $ 16,800 4.79 % $ 1,195,908 $ 14,338 4.81 % $ 1,138,134 $ 13,837 4.93 % $ 1,066,368

4.87

%





474Investment securities? 85,555 454 2.11 % 87,585 460 2.08 % 83,152 442 2.13 % 84,679 448 2.15 % 87,818

2.15

%





59Interest-earning deposits 365,501 144 0.16 % 282,512 112 0.16 % 168,677 54 0.13 % 108,127 36 0.14 % 191,703 at the FRB and other banks

0.12

%





81Other earning assets 8,850 115 5.16 % 8,925 116 5.16 % 8,737 135 6.20 % 8,196 97 4.80 % 8,196

3.93

%





13,659Total interest-earning 1,856,107 17,606 3.76 % 1,769,873 17,488 3.92 % 1,456,474 14,969 4.12 % 1,339,136 14,418 4.37 % 1,354,085 assets ?

4.01

%

NONINTEREST-EARNING ASSETS Cash and due from banks 13,318 13,079 10,752 10,025 10,234

Other noninterest-earning 37,774 36,548 32,002 31,156 28,903 assetsTotal noninterest-earning 51,092 49,627 42,754 41,181 39,137 assets Less: Allowance for loan (14,849 ) (14,958 ) (14,899 ) (14,381 ) (13,505 ) lossesTOTAL ASSETS $ 1,892,350 $ 1,804,542 $ 1,484,329 $ 1,365,936 $ 1,379,717

INTEREST-BEARING DEPOSITS

$

4Interest-bearing demand $ 27,904 $ 3 0.04 % $ 36,670 $ 4 0.04 % $ 13,373 $ 2 0.06 % $ 15,813 $ 2 0.05 % $ 11,444

0.14

%





360Money market 338,937 401 0.47 % 312,606 388 0.49 % 263,845 352 0.54 % 265,856 366 0.56 % 240,913

0.59

%





77Savings 77,057 68 0.35 % 74,266 71 0.38 % 43,433 55 0.51 % 48,284 60 0.50 % 55,756

0.55

%





1,236Time deposits 527,634 674 0.51 % 542,901 756 0.55 % 469,000 831 0.71 % 451,347 975 0.88 % 447,839

1.10

%





1,677Total interest-bearing 971,532 1,146 0.47 % 966,443 1,219 0.50 % 789,651 1,240 0.63 % 781,300 1,403 0.73 % 755,952 deposits

0.88

%





153Borrowings 50,000 119 0.94 % 50,000 118 0.94 % 51,539 118 0.92 % 65,667 130 0.80 % 88,645

0.69

%





1,830Total interest-bearing 1,021,532 1,265 0.49 % 1,016,443 1,337 0.52 % 841,190 1,358 0.65 % 846,967 1,533 0.73 % 844,597 liabilities

0.86

%

Noninterest-bearing 673,154 597,056 459,695 343,904 363,937 depositsOther liabilities 16,420 16,046 13,906 11,942 12,623

Stockholders' equity 181,244 174,997 169,538 163,123 158,560

TOTAL LIABILITIES & $ 1,892,350 $ 1,804,542 $ 1,484,329 $ 1,365,936 $ 1,379,717 STOCKHOLDERS' EQUITY

$ 16,341 $ 16,151 $ 13,611 $ 12,885 $Net interest income? 11,829



Net interest spread 3.27 % 3.40 % 3.47 % 3.64 % 3.15

%

Effect ofnoninterest-bearing 0.22 % 0.22 % 0.28 % 0.26 % 0.33sources %



Net interest margin? 3.49 % 3.62 % 3.75 % 3.90 % 3.48

%



$

1,677Cost of deposits $ 1,644,686 $ 1,146 0.28 % $ 1,563,499 $ 1,219 0.31 % $ 1,249,346 $ 1,240 0.40 % $ 1,125,204 $ 1,403 0.51 % $ 1,119,889

0.60

%



$

1,830Cost of funds $ 1,694,686 $ 1,265 0.30 % $ 1,613,499 $ 1,337 0.33 % $ 1,300,885 $ 1,358 0.42 % $ 1,190,871 $ 1,533 0.52 % $ 1,208,534

0.60

%

1

Includes loans held-for-sale

?

Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

^1 Includes loans held-for-sale

? Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13(Dollars in thousands)Three Months EndedDecember 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020AmountYieldAmountYieldAmountYieldAmountYieldAmountYieldContractual yield$

15,142

4.30

%

$

15,032

4.29

%

$

12,670

4.25

%

$

12,148

4.33

%

$

11,727

4.38

%

SBA discount accretion1,024

0.29

%

1,038

0.30

%

1,027

0.34

%

738

0.26

%

730

0.27

%

Prepayment penalties & late fees72

0.02

%

41

0.01

%

89

0.03

%

121

0.04

%

177

0.07

%

Amortization of net deferred costs655

0.19

%

689

0.20

%

552

0.19

%

830

0.30

%

411

0.15

%

As reported yield on loans$

16,893

4.80

%

$

16,800

4.79

%

$

14,338

4.81

%

$

13,837

4.93

%

$

13,045

4.87

%

FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13(Dollars in thousands) Three Months Ended December 31, September 30, June 30, 2021 March 31, 2021 December 31, 2021 2021 2020 Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield Contractual yield $ 15,142 4.30 % $ 15,032 4.29 % $ 12,670 4.25 % $ 12,148 4.33 % $ 11,727 4.38 %

SBA discount 1,024 0.29 % 1,038 0.30 % 1,027 0.34 % 738 0.26 % 730 0.27 %accretionPrepayment 72 0.02 % 41 0.01 % 89 0.03 % 121 0.04 % 177 0.07 %penalties & late feesAmortization of net 655 0.19 % 689 0.20 % 552 0.19 % 830 0.30 % 411 0.15 %deferred costsAs reported yield $ 16,893 4.80 % $ 16,800 4.79 % $ 14,338 4.81 % $ 13,837 4.93 % $ 13,045 4.87 %on loansMARGIN ANALYSIS (Unaudited) - Table 14(Dollars in thousands)Twelve Months EndedDecember 31, 2021December 31, 2020Avg BalanceInterestYieldAvg BalanceInterestYieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1$

1,281,283

$

61,868

4.83

%

$

1,018,407

$

51,892

5.10

%

Investment securities?85,251

1,804

2.12

%

91,001

2,072

2.28

%

Interest-earning deposits at the FRB and other banks232,050

346

0.15

%

143,141

350

0.24

%

Other earning assets8,679

463

5.33

%

8,195

376

4.59

%

Total interest-earning assets ?1,607,263

64,481

4.01

%

1,260,744

54,690

4.34

%

NONINTEREST-EARNING ASSETSCash and due from banks11,806

9,555

Other noninterest-earning assets34,068

30,557

Total noninterest-earning assets45,874

40,112

Less: Allowance for loan losses(14,773

)

(11,837

)

TOTAL ASSETS$

1,638,364

$

1,289,019

INTEREST-BEARING DEPOSITSInterest-bearing demand$

23,509

$

11

0.05

%

$

12,087

$

18

0.15

%

Money market295,559

1,507

0.51

%

180,640

1,539

0.85

%

Savings60,876

254

0.42

%

64,232

658

1.02

%

Time deposits498,053

3,236

0.65

%

491,281

8,936

1.82

%

Total interest-bearing deposits877,997

5,008

0.57

%

748,240

11,151

1.49

%

Borrowings54,247

485

0.89

%

90,471

560

0.62

%

Total interest-bearing liabilities932,244

5,493

0.59

%

838,711

11,711

1.40

%

Noninterest-bearing deposits519,570

282,045

Other Liabilities14,267

14,072

Stockholders' equity172,283

154,191

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY$

1,638,364

$

1,289,019

Net interest income?$

58,988

$

42,979

Net interest spread3.42

%

2.94

%

Effect of noninterest-bearing sources0.25

%

0.47

%

Net interest margin?3.67

%

3.41

%

Cost of deposits$

1,397,567

$

5,008

0.36

%

$

1,030,285

$

11,151

1.08

%

Cost of funds$

1,451,814

$

5,493

0.38

%

$

1,120,756

$

11,711

1.04

%

MARGIN ANALYSIS (Unaudited) - Table 14(Dollars in thousands) Twelve Months Ended December 31, 2021 December 31, 2020 Avg Balance Interest Yield Avg Balance Interest YieldNumber of Days in the PeriodINTEREST-EARNING ASSETSLoans ^1 $ 1,281,283 $ 61,868 4.83 % $ 1,018,407 $ 51,892 5.10 %

Investment 85,251 1,804 2.12 % 91,001 2,072 2.28 %securities?Interest-earning 232,050 346 0.15 % 143,141 350 0.24 %deposits at the FRB and other banksOther earning 8,679 463 5.33 % 8,195 376 4.59 %assetsTotal 1,607,263 64,481 4.01 % 1,260,744 54,690 4.34 %interest-earning assets ? NONINTEREST-EARNING ASSETSCash and due from 11,806 9,555 banksOther 34,068 30,557 noninterest-earning assetsTotal 45,874 40,112 noninterest-earning assets Less: Allowance for (14,773 ) (11,837 ) loan losses TOTAL ASSETS $ 1,638,364 $ 1,289,019

INTEREST-BEARING DEPOSITSInterest-bearing $ 23,509 $ 11 0.05 % $ 12,087 $ 18 0.15 %demandMoney market 295,559 1,507 0.51 % 180,640 1,539 0.85 %

Savings 60,876 254 0.42 % 64,232 658 1.02 %

Time deposits 498,053 3,236 0.65 % 491,281 8,936 1.82 %

Total 877,997 5,008 0.57 % 748,240 11,151 1.49 %interest-bearing deposits Borrowings 54,247 485 0.89 % 90,471 560 0.62 %

Total 932,244 5,493 0.59 % 838,711 11,711 1.40 %interest-bearing liabilities Noninterest-bearing 519,570 282,045 depositsOther Liabilities 14,267 14,072

Stockholders' 172,283 154,191 equity TOTAL LIABILITIES & $ 1,638,364 $ 1,289,019 STOCKHOLDERS' EQUITY Net interest $ 58,988 $ 42,979 income? Net interest spread 3.42 % 2.94 %

Effect of 0.25 % 0.47 %noninterest-bearing sources Net interest 3.67 % 3.41 %margin? Cost of deposits $ 1,397,567 $ 5,008 0.36 % $ 1,030,285 $ 11,151 1.08 %

Cost of funds $ 1,451,814 $ 5,493 0.38 % $ 1,120,756 $ 11,711 1.04 %

1

Includes loans held-for-sale

?

Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

^1 Includes loans held-for-sale

? Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 15(Dollars in thousands)Twelve Months EndedDecember 31, 2021December 31, 2020AmountYieldAmountYieldContractual yield$

54,992

4.29

%

$

47,272

4.65

%

SBA discount accretion3,827

0.30

%

3,197

0.31

%

Prepayment penalties & late fees323

0.03

%

528

0.05

%

Amortization of net deferred costs2,726

0.21

%

895

0.09

%

As reported yield on loans$

61,868

4.83

%

$

51,892

5.10

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005994/en/

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