HOUSTON, Jan. 30, 2019 (GLOBE NEWSWIRE) -- CBTX, Inc. (the “Company”) (NASDAQ: CBTX), the bank holding company for CommunityBank of Texas N.A., today announced net income of $14.1 million, or $0.56 per diluted share, for the quarter ended December 31, 2018, compared to $2.0 million, or $0.08 per diluted share, for the quarter ended December 31, 2017 and $13.0 million, or $0.52 per diluted share, for the quarter ended September 30, 2018.
For 2018, net income and earnings per share were positively impacted by the 14% reduction of the corporate U.S. statutory federal tax rate from 35% to 21% as a result of the enactment of the Tax Cuts and Jobs Act (the “Tax Act”), which became effective January 1, 2018.
The Company reported net income for the year ended December 31, 2018 of $47.3 million, or $1.89 per diluted share, compared to $27.6 million, or $1.22 per diluted share, for the year ended December 31, 2017.
Highlights
- Return on average shareholders’ equity was 10.2% for the year ended December 31, 2018, compared to 7.2% for the year ended December 31, 2017.
- Net interest income for the quarter ended December 31, 2018 totaled $33.2 million, an increase of 5.4% from the third quarter of 2018, primarily due to the impact of increased average loans and higher average yields on loans, partially offset by the impact of increased interest-bearing deposits and higher rates on those deposits.
- The efficiency ratio improved to 59.0% for the year ended December 31, 2018, compared to 64.2% for the year ended December 31, 2017.
“We are pleased with our 2018 operating results, as our growth led to all-time highs in assets, loans and deposits,” said Robert R. Franklin, Jr., Chairman, President and Chief Executive Officer of CBTX, Inc. “We reported record earnings for the year, driven by stable organic growth in loans and deposits, continued improvement in expense efficiency and excellent credit metrics.”
Operating Results:
Net Interest Income
Net interest income was $33.2 million for the fourth quarter of 2018, compared to $28.2 million for the fourth quarter of 2017 and $31.5 million for the third quarter of 2018. The increase in net interest income in the fourth quarter of 2018 from the fourth quarter of 2017, was primarily due to increased interest income resulting from higher average loans and higher average yields on loans and federal funds sold, partially offset by an increase in interest expense due to higher average interest-bearing deposits and higher rates on those deposits.
The increase in net interest income in the fourth quarter of 2018 from the third quarter of 2018 was due to increased interest income resulting from higher average loans and higher average yields on loans, partially offset by the impact on interest expense of increased average interest-bearing deposits and higher rates on those deposits.
Net interest income was $124.7 million for the year ended December 31, 2018, compared to $107.8 million for year ended December 31, 2017. The increase in net interest income in 2018, as compared to 2017 was due to increased interest income resulting from higher average loans and securities and higher average yields on loans and federal funds sold, partially offset by the impact of increased interest expense due to higher average interest-bearing deposits and higher rates on those deposits, offset by lower interest expense in 2018 due to the payoff of our note payable in the fourth quarter of 2017.
Provision (Recapture) for Loan Losses
Provision for loan loss was a recapture of $2.2 million for the fourth quarter of 2018, compared to a provision of $1.1 million for the fourth quarter of 2017 and a recapture of $1.1 million for the third quarter of 2018. The recapture in the fourth quarter of 2018 was due to the impact of recoveries during the quarter. The recapture in the third quarter of 2018 was driven by strong credit quality, continuing low nonperforming and impaired loans and minimal charge-off history. The provision in the fourth quarter of 2017 reflects the increase in loans during that period.
Provision for loan loss was a recapture of $1.8 million for the year ended December 31, 2018, compared to a recapture of $338,000 for the year ended December 31, 2017. The recapture in the year ended December 31, 2018 was due to the recapture in the third and fourth quarter of 2018 (see explanation above). The recapture in the year ended December 31, 2017 was primarily the result of pay-offs of certain classified and problem loans, which resulted in a decrease in their related allowance for loan losses.
The allowance for loan losses was $23.7 million, or 0.97% of total loans, at December 31, 2018, compared to $24.8 million, or 1.07% of total loans, at December 31, 2017 and $24.5 million, or 0.99% of total loans, at September 30, 2018.
Noninterest Income
Noninterest income was $3.9 million for the fourth quarter of 2018, $3.1 million for the fourth quarter of 2017 and $3.5 million for the third quarter of 2018. Noninterest income for the fourth quarter of 2018 was higher compared to the fourth quarter of 2017 primarily due to an increase in deposit account service charges and higher net gains on sales of assets during the fourth quarter of 2018. Noninterest income for the fourth quarter of 2018 was higher compared to the third quarter of 2018 primarily due to an increase in deposit account service charges.
Noninterest income was $14.3 million for the year ended December 31, 2018 compared to $14.2 million for the year ended December 31, 2017. Although overall noninterest income increased minimally between 2018 and 2017, there were increases in deposit account service charges, card interchange fees and earnings on bank-owned life insurance, partially offset by decreased gains on sales of fixed assets.
Noninterest Expense
Noninterest expense was $21.8 million for the fourth quarter of 2018, $22.0 million for the fourth quarter of 2017 and $20.0 million for the third quarter of 2018.
Noninterest expense decreased $233,000 in the fourth quarter of 2018 compared to the fourth quarter of 2017 primarily due to higher salaries, group health insurance and stock compensation expense during 2018, partially offset by lower deferred compensation expense during 2018 and the impact of a change in control charge of $2.2 million related to our initial public offering (IPO) recorded in the fourth quarter of 2017.
Noninterest expense increased $1.8 million or 9.0% during the fourth quarter of 2018 compared to the third quarter of 2018 primarily due to increased group health insurance and employee bonus expense during 2018.
Noninterest expense was $82.0 million for 2018, as compared to $78.3 million for 2017. This increase during 2018 of $3.7 million was primarily due to increased salaries, group health insurance and stock compensation expense during 2018, partially offset by lower deferred compensation expense and repossessed real estate costs in 2018 and the impact of a change in control charge of $2.5 million related to our IPO recorded in the fourth quarter of 2017.
Income Taxes
Income tax expense was $3.4 million for the fourth quarter of 2018, $6.3 million for the fourth quarter of 2017 and $3.2 million for the third quarter of 2018. Income tax expense was $11.4 million for the year ended December 31, 2018 and $16.5 million for the year ended December 31, 2017.
The effective tax rates were 19.3% for the fourth quarter of 2018, 19.8% for the third quarter of 2018 and 19.4% for the year ended December 31, 2018. The effective tax rates for the 2018 periods reflect the reduction of the federal tax rate from 35% to 21% effective January 1, 2018 as a result of the Tax Act. The effective tax rate for the fourth quarter of 2017 was 76.3%, reflecting the impact of the deferred tax asset remeasurement adjustment of $3.9 million related to the adoption of the Tax Act. The effective tax rate for the year ended December 31, 2017 was 37.4%, reflecting the impact of the adoption of the Tax Act as well as true-ups and return to provision adjustments recorded in 2017. The effective tax rate for the fourth quarter of 2017 and the year ended December 31, 2017, would have been 29.7% and 28.6% without the impact of the deferred tax remeasurement adjustment noted above.
Balance Sheet Highlights:
Loans
Loans were $2.4 billion at December 31, 2018, $2.3 billion at December 31, 2017 and $2.5 billion at September 30, 2018.
Asset Quality
Nonperforming assets remain low relative to total assets at $3.5 million, or 0.11% of total assets, at December 31, 2018, $8.4 million, or 0.27% of total assets, at December 31, 2017 and $5.8 million, or 0.18% of total assets at September 30, 2018.
Annualized net charge-offs (recoveries) to average loans were (0.22%) for the fourth quarter of 2018, 0.00% for the fourth quarter of 2017 and 0.02% for the third quarter of 2018. The annualized charge-offs (recoveries) for the fourth quarter of 2018 reflects the impact of recoveries in that period.
Deposits and Borrowings
Total deposits were $2.8 billion at December 31, 2018, compared to $2.6 billion at December 31, 2017 and $2.7 billion at September 30, 2018.
We define total borrowings as the total of notes payable, repurchase agreements and Federal Home Loan Bank (FHLB) advances. Total borrowings were comprised of repurchase agreements at December 31, 2018, December 31, 2017 and September 30, 2018 and were $2.5 million, $1.5 million and $1.4 million, respectively.
Capital
At December 31, 2018, the Company remained well capitalized under bank regulatory requirements.
Our ratio of tangible equity to tangible assets was 12.6% at December 31, 2018, 12.0% at December 31, 2017 and 12.4% at September 30, 2018. Tangible equity to tangible assets is a non‑GAAP financial measure. The most directly comparable GAAP financial measure to tangible equity to tangible assets is total shareholders’ equity to total assets, which was 14.9% at December 31, 2018, 14.5% at December 31, 2017 and 14.8% at September 30, 2018. See the table captioned “Non‑GAAP to GAAP Reconciliation” at the end of this earnings release.
About CBTX, Inc.
CBTX, Inc. is the bank holding company for CommunityBank of Texas, N.A., a $3.3 billion asset bank, offering commercial banking solutions to local small and mid-sized businesses and professionals in Houston, Dallas, Beaumont and surrounding communities in southeast Texas. Visit www.communitybankoftx.com for more information.
Forward-Looking Statements
This release may contain certain forward-looking statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about the Company and its subsidiary. Forward-looking statements include information regarding the Company’s future financial performance, business and growth strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to, whether the Company can: prudently manage and execute its growth strategy; manage risks associated with its acquisition and de novo branching strategy; maintain its asset quality; address the volatility and direction of market interest rates; continue to have access to debt and equity capital markets; avoid or address interruptions or breaches in the Company’s information system security; and achieve its performance goals. The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) and other reports and statements that the Company has filed with the SEC. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what it anticipates. Accordingly, you should not place undue reliance on any such forward looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict which will arise. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Copies of the SEC filings for the Company are available for download free of charge from www.communitybankoftx.com under the Investor Relations tab.
| CBTX, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Balance Sheet Data (at period end): | 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | |||||||||||||||
| Loans, excluding loans held for sale | $ | 2,446,823 | $ | 2,463,197 | $ | 2,404,132 | $ | 2,356,053 | $ | 2,311,544 | ||||||||||
| Allowance for loan losses | (23,693 | ) | (24,486 | ) | (25,746 | ) | (25,349 | ) | (24,778 | ) | ||||||||||
| Loans, net | 2,423,130 | 2,438,711 | 2,378,386 | 2,330,704 | 2,286,766 | |||||||||||||||
| Cash and equivalents | 382,070 | 281,640 | 245,265 | 279,915 | 326,199 | |||||||||||||||
| Debt securities | 229,964 | 222,493 | 230,393 | 221,183 | 223,208 | |||||||||||||||
| Premises and equipment, net | 51,622 | 52,032 | 52,607 | 53,135 | 53,607 | |||||||||||||||
| Goodwill | 80,950 | 80,950 | 80,950 | 80,950 | 80,950 | |||||||||||||||
| Other intangible assets, net | 5,775 | 6,038 | 6,276 | 6,521 | 6,770 | |||||||||||||||
| Repossessed real estate and other assets | 12 | 175 | 137 | 295 | 705 | |||||||||||||||
| Loans held for sale | - | 384 | 560 | 113 | 1,460 | |||||||||||||||
| Other assets | 105,573 | 108,030 | 106,186 | 101,974 | 101,418 | |||||||||||||||
| Total Assets | $ | 3,279,096 | $ | 3,190,453 | $ | 3,100,760 | $ | 3,074,790 | $ | 3,081,083 | ||||||||||
| Noninterest-bearing deposits | $ | 1,183,058 | $ | 1,144,985 | $ | 1,114,155 | $ | 1,120,521 | $ | 1,109,789 | ||||||||||
| Interest-bearing deposits | 1,583,224 | 1,545,095 | 1,447,119 | 1,479,181 | 1,493,183 | |||||||||||||||
| Total deposits | 2,766,282 | 2,690,080 | 2,561,274 | 2,599,702 | 2,602,972 | |||||||||||||||
| Repurchase agreements | 2,498 | 1,351 | 1,448 | 861 | 1,525 | |||||||||||||||
| Federal Home Loan Bank advances | - | - | 50,000 | - | - | |||||||||||||||
| Junior subordinated debt | 1,571 | 6,726 | 6,726 | 6,726 | 6,726 | |||||||||||||||
| Other liabilities | 21,120 | 20,445 | 20,117 | 15,930 | 23,646 | |||||||||||||||
| Total Liabilities | 2,791,471 | 2,718,602 | 2,639,565 | 2,623,219 | 2,634,869 | |||||||||||||||
| Shareholders' Equity | 487,625 | 471,851 | 461,195 | 451,571 | 446,214 | |||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 3,279,096 | $ | 3,190,453 | $ | 3,100,760 | $ | 3,074,790 | $ | 3,081,083 | ||||||||||
| CBTX, INC. AND SUBSIDIARY | ||||||||||||||||||||||||||
| Condensed Consolidated Statements of Income (Unaudited) | ||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||
| For the Three Months Ended | For the Years Ended | |||||||||||||||||||||||||
| 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 12/31/2018 | 12/31/2017 | ||||||||||||||||||||
| Interest Income | ||||||||||||||||||||||||||
| Interest and fees on loans | $ | 33,427 | $ | 31,513 | $ | 30,493 | $ | 28,462 | $ | 27,726 | $ | 123,895 | $ | 107,368 | ||||||||||||
| Securities | 1,542 | 1,535 | 1,507 | 1,436 | 1,357 | 6,020 | 5,347 | |||||||||||||||||||
| Federal Funds and interest-bearing deposits | 1,913 | 1,617 | 1,127 | 1,187 | 1,283 | 5,844 | 3,944 | |||||||||||||||||||
| Total Interest Income | 36,882 | 34,665 | 33,127 | 31,085 | 30,366 | 135,759 | 116,659 | |||||||||||||||||||
| Interest Expense | ||||||||||||||||||||||||||
| Deposits | 3,551 | 2,961 | 2,126 | 1,948 | 1,993 | 10,586 | 7,652 | |||||||||||||||||||
| Repurchase agreements | 1 | 1 | 1 | 1 | — | 4 | 5 | |||||||||||||||||||
| Federal Home Loan Bank advances | — | 61 | 12 | — | — | 73 | — | |||||||||||||||||||
| Note payable | 4 | 4 | 3 | 4 | 122 | 15 | 906 | |||||||||||||||||||
| Junior subordinated debt | 106 | 112 | 109 | 93 | 86 | 420 | 322 | |||||||||||||||||||
| Total Interest Expense | 3,662 | 3,139 | 2,251 | 2,046 | 2,201 | 11,098 | 8,885 | |||||||||||||||||||
| Net Interest Income | 33,220 | 31,526 | 30,876 | 29,039 | 28,165 | 124,661 | 107,774 | |||||||||||||||||||
| Provision (Recapture) for Loan Losses | (2,169 | ) | (1,142 | ) | 690 | 865 | 1,050 | (1,756 | ) | (338 | ) | |||||||||||||||
| Net Interest Income After Provision (Recapture) for Loan Losses | 35,389 | 32,668 | 30,186 | 28,174 | 27,115 | 126,417 | 108,112 | |||||||||||||||||||
| Noninterest Income | ||||||||||||||||||||||||||
| Deposit account service charges | 1,709 | 1,597 | 1,497 | 1,478 | 1,388 | 6,281 | 5,800 | |||||||||||||||||||
| Net gain (loss) on sale of assets | 168 | 152 | 210 | 130 | (7 | ) | 660 | 1,524 | ||||||||||||||||||
| Card interchange fees | 921 | 922 | 971 | 927 | 941 | 3,741 | 3,453 | |||||||||||||||||||
| Earnings on bank-owned life insurance | 456 | 443 | 465 | 451 | 460 | 1,815 | 1,580 | |||||||||||||||||||
| Other | 605 | 412 | 363 | 375 | 362 | 1,755 | 1,847 | |||||||||||||||||||
| Total Noninterest Income | 3,859 | 3,526 | 3,506 | 3,361 | 3,144 | 14,252 | 14,204 | |||||||||||||||||||
| Noninterest Expense | ||||||||||||||||||||||||||
| Salaries and employee benefits | 13,834 | 12,499 | 12,496 | 12,695 | 14,021 | 51,524 | 48,573 | |||||||||||||||||||
| Net occupancy expense | 2,268 | 2,428 | 2,433 | 2,265 | 2,346 | 9,394 | 9,151 | |||||||||||||||||||
| Regulatory fees | 507 | 488 | 513 | 545 | 487 | 2,053 | 2,176 | |||||||||||||||||||
| Data processing | 664 | 664 | 666 | 683 | 674 | 2,677 | 2,629 | |||||||||||||||||||
| Software | 408 | 400 | 403 | 365 | 344 | 1,576 | 1,208 | |||||||||||||||||||
| Printing, stationery and office | 303 | 291 | 303 | 264 | 288 | 1,161 | 1,097 | |||||||||||||||||||
| Amortization of intangibles | 237 | 245 | 248 | 255 | 263 | 985 | 1,079 | |||||||||||||||||||
| Professional and director fees | 1,123 | 809 | 686 | 919 | 1,168 | 3,537 | 3,105 | |||||||||||||||||||
| Correspondent bank and customer related transaction expenses | 64 | 66 | 68 | 67 | 67 | 265 | 286 | |||||||||||||||||||
| Loan processing costs | 153 | 102 | 75 | 118 | 141 | 448 | 461 | |||||||||||||||||||
| Advertising, marketing and business development | 406 | 437 | 475 | 506 | 508 | 1,824 | 1,461 | |||||||||||||||||||
| Repossessed real estate and other asset expense | 7 | 3 | 5 | 57 | 66 | 72 | 609 | |||||||||||||||||||
| Security and protection expense | 317 | 346 | 311 | 302 | 300 | 1,276 | 1,355 | |||||||||||||||||||
| Telephone and communications | 408 | 342 | 394 | 386 | 344 | 1,530 | 1,316 | |||||||||||||||||||
| Other expenses | 1,057 | 844 | 936 | 857 | 972 | 3,694 | 3,786 | |||||||||||||||||||
| Total Noninterest Expense | 21,756 | 19,964 | 20,012 | 20,284 | 21,989 | 82,016 | 78,292 | |||||||||||||||||||
| Net Income Before Income Tax Expense | 17,492 | 16,230 | 13,680 | 11,251 | 8,270 | 58,653 | 44,024 | |||||||||||||||||||
| Income Tax Expense | 3,380 | 3,207 | 2,638 | 2,139 | 6,313 | 11,364 | 16,453 | |||||||||||||||||||
| Net Income | $ | 14,112 | $ | 13,023 | $ | 11,042 | $ | 9,112 | $ | 1,957 | $ | 47,289 | $ | 27,571 | ||||||||||||
| CBTX, INC. AND SUBSIDIARY | |||||||||||||||||||||||||||||
| Financial Highlights (Unaudited) | |||||||||||||||||||||||||||||
| (In thousands, except per share data and percentages) | |||||||||||||||||||||||||||||
| For the Three Months Ended | For the Years Ended | ||||||||||||||||||||||||||||
| 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | 12/31/2018 | 12/31/2017 | |||||||||||||||||||||||
| Profitability: | |||||||||||||||||||||||||||||
| Net income | $ | 14,112 | $ | 13,023 | $ | 11,042 | $ | 9,112 | $ | 1,957 | $ | 47,289 | $ | 27,571 | |||||||||||||||
| Basic earnings per share | $ | 0.57 | $ | 0.52 | $ | 0.44 | $ | 0.37 | $ | 0.08 | $ | 1.90 | $ | 1.23 | |||||||||||||||
| Diluted earnings per share | $ | 0.56 | $ | 0.52 | $ | 0.44 | $ | 0.37 | $ | 0.08 | $ | 1.89 | $ | 1.22 | |||||||||||||||
| Return on average assets (1) | 1.7 | % | 1.6 | % | 1.4 | % | 1.2 | % | 0.3 | % | 1.5 | % | 0.9 | % | |||||||||||||||
| Return on average shareholders' equity (1) | 11.7 | % | 11.0 | % | 9.7 | % | 8.2 | % | 1.8 | % | 10.2 | % | 7.2 | % | |||||||||||||||
| Net interest margin- tax equivalent (1) | 4.4 | % | 4.3 | % | 4.4 | % | 4.2 | % | 4.1 | % | 4.4 | % | 4.1 | % | |||||||||||||||
| Efficiency ratio (2) | 58.7 | % | 57.0 | % | 58.2 | % | 62.6 | % | 70.2 | % | 59.0 | % | 64.2 | % | |||||||||||||||
| Liquidity and Capital Ratios: | |||||||||||||||||||||||||||||
| Total shareholders' equity to total assets | 14.9 | % | 14.8 | % | 14.9 | % | 14.7 | % | 14.5 | % | 14.9 | % | 14.5 | % | |||||||||||||||
| Tangible equity to tangible assets (3) | 12.6 | % | 12.4 | % | 12.4 | % | 12.2 | % | 12.0 | % | 12.6 | % | 12.0 | % | |||||||||||||||
| Common equity tier 1 capital ratio | 14.7 | % | 14.3 | % | 14.1 | % | 14.1 | % | 14.2 | % | 14.7 | % | 14.2 | % | |||||||||||||||
| Tier 1 risk-based capital ratio | 14.8 | % | 14.5 | % | 14.3 | % | 14.4 | % | 14.4 | % | 14.8 | % | 14.4 | % | |||||||||||||||
| Total risk-based capital ratio | 15.6 | % | 15.4 | % | 15.3 | % | 15.4 | % | 15.4 | % | 15.6 | % | 15.4 | % | |||||||||||||||
| Tier 1 leverage ratio | 12.8 | % | 12.8 | % | 12.9 | % | 12.6 | % | 12.3 | % | 12.8 | % | 12.3 | % | |||||||||||||||
| Other Data: | |||||||||||||||||||||||||||||
| Weighted average common shares outstanding- Basic | 24,886 | 24,859 | 24,858 | 24,833 | 23,629 | 24,859 | 22,457 | ||||||||||||||||||||||
| Weighted average common shares outstanding- Diluted | 25,047 | 25,060 | 24,997 | 24,954 | 23,742 | 25,018 | 22,573 | ||||||||||||||||||||||
| Common shares outstanding at period end | 24,907 | 24,859 | 24,859 | 24,833 | 24,833 | 24,907 | 24,833 | ||||||||||||||||||||||
| Dividends per share | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.20 | $ | 0.20 | |||||||||||||||
| Book value per share | $ | 19.6 | $ | 19.0 | $ | 18.6 | $ | 18.2 | $ | 18.0 | $ | 19.6 | $ | 18.0 | |||||||||||||||
| Tangible book value per share (3) | $ | 16.1 | $ | 15.5 | $ | 15.0 | $ | 14.7 | $ | 14.4 | $ | 16.1 | $ | 14.4 | |||||||||||||||
| Employees - full-time equivalents | 495 | 489 | 488 | 477 | 462 | 495 | 462 | ||||||||||||||||||||||
| (1) | Quarterly ratios are annualized. | |
| (2) | Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income. | |
| (3) | Non‑GAAP financial measure. The most directly comparable GAAP financial measure is book value per share. See the table captioned “Non‑GAAP to GAAP Reconciliation” at the end of this earnings release. |
| CBTX, INC. AND SUBSIDIARY | ||||||||||||||||||||||||||||||
| Net Interest Margin (Unaudited) | ||||||||||||||||||||||||||||||
| (In thousands, except percentages) | ||||||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||||||
| 12/31/2018 | 9/30/2018 | 12/31/2017 | ||||||||||||||||||||||||||||
| Interest | Interest | Interest | ||||||||||||||||||||||||||||
| Average | Earned/ | Average | Average | Earned/ | Average | Average | Earned/ | Average | ||||||||||||||||||||||
| Outstanding | Interest | Yield/ | Outstanding | Interest | Yield/ | Outstanding | Interest | Yield/ | ||||||||||||||||||||||
| Balance | Paid | Rate (1) | Balance | Paid | Rate (1) | Balance | Paid | Rate (1) | ||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||
| Interest-earnings assets: | ||||||||||||||||||||||||||||||
| Total loans (2) | $ | 2,468,415 | $ | 33,427 | 5.37 | % | $ | 2,404,491 | $ | 31,513 | 5.20 | % | $ | 2,252,735 | $ | 27,726 | 4.88 | % | ||||||||||||
| Debt securities | 226,882 | 1,542 | 2.70 | % | 230,592 | 1,535 | 2.64 | % | 222,602 | 1,357 | 2.42 | % | ||||||||||||||||||
| Federal funds sold and other interest-earning assets | 293,299 | 1,697 | 2.30 | % | 272,739 | 1,404 | 2.04 | % | 317,484 | 1,093 | 1.37 | % | ||||||||||||||||||
| Nonmarketable equity securities | 14,789 | 216 | 5.79 | % | 16,799 | 213 | 5.01 | % | 14,698 | 190 | 5.13 | % | ||||||||||||||||||
| Total interest-earning assets | 3,003,385 | $ | 36,882 | 4.87 | % | 2,924,621 | $ | 34,665 | 4.70 | % | 2,807,519 | $ | 30,366 | 4.29 | % | |||||||||||||||
| Allowance for loan losses | (24,305 | ) | (25,689 | ) | (24,127 | ) | ||||||||||||||||||||||||
| Noninterest-earnings assets | 295,236 | 292,598 | 296,108 | |||||||||||||||||||||||||||
| Total assets | $ | 3,274,316 | $ | 3,191,530 | $ | 3,079,500 | ||||||||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||
| Interest-bearing deposits | $ | 1,578,146 | $ | 3,551 | 0.89 | % | $ | 1,530,077 | $ | 2,961 | 0.77 | % | $ | 1,519,631 | $ | 1,993 | 0.52 | % | ||||||||||||
| Repurchase agreements | 1,925 | 1 | 0.21 | % | 1,516 | 1 | 0.26 | % | 1,793 | — | — | |||||||||||||||||||
| FHLB advances | — | — | — | 11,141 | 61 | 2.17 | % | — | — | — | ||||||||||||||||||||
| Note payable | — | 4 | — | — | 4 | — | 11,252 | 122 | 4.30 | % | ||||||||||||||||||||
| Junior subordinated debt | 9,817 | 106 | 4.28 | % | 10,826 | 112 | 4.14 | % | 10,826 | 86 | 3.15 | % | ||||||||||||||||||
| Total interest-bearing liabilities | 1,589,888 | $ | 3,662 | 0.91 | % | 1,553,560 | $ | 3,139 | 0.80 | % | 1,543,502 | $ | 2,201 | 0.56 | % | |||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||
| Noninterest-bearing deposits | 1,181,035 | 1,145,516 | 1,087,416 | |||||||||||||||||||||||||||
| Other liabilities | 23,083 | 23,600 | 23,271 | |||||||||||||||||||||||||||
| Total noninterest-bearing liabilities | 1,204,118 | 1,169,116 | 1,110,687 | |||||||||||||||||||||||||||
| Shareholders’ equity | 480,310 | 468,854 | 425,311 | |||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 3,274,316 | $ | 3,191,530 | $ | 3,079,500 | ||||||||||||||||||||||||
| Net interest income | $ | 33,220 | $ | 31,526 | $ | 28,165 | ||||||||||||||||||||||||
| Net interest spread (3) | 3.96 | % | 3.90 | % | 3.73 | % | ||||||||||||||||||||||||
| Net interest margin (4) | 4.39 | % | 4.28 | % | 3.98 | % | ||||||||||||||||||||||||
| Net interest margin—tax equivalent (5) | 4.42 | % | 4.31 | % | 4.06 | % | ||||||||||||||||||||||||
| (1) | Annualized. | |
| (2) | Includes average outstanding balances of loans held for sale of $642,000, $741,000 and $521,000 for the quarter ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively. | |
| (3) | Net interest spread is the average yield on interest‑earning assets minus the average rate on interest‑bearing liabilities. | |
| (4) | Net interest margin is equal to net interest income divided by average interest‑earning assets. | |
| (5) | To make pre‑tax income and resultant yields on tax‑exempt investments and loans comparable to those on taxable investments and loans, a tax equivalent adjustment of $257,000, $261,000 and $549,000 for the quarter ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively, has been computed using a federal income tax rate of 21% for 2018 and 35% for 2017. |
| For the Years Ended December 31, | ||||||||||||||||||||
| 2018 | 2017 | |||||||||||||||||||
| Interest | Interest | |||||||||||||||||||
| Average | Earned/ | Average | Average | Earned/ | Average | |||||||||||||||
| Outstanding | Interest | Yield/ | Outstanding | Interest | Yield/ | |||||||||||||||
| (Dollars in thousands) | Balance | Paid | Rate | Balance | Paid | Rate | ||||||||||||||
| Assets | ||||||||||||||||||||
| Interest-earnings assets: | ||||||||||||||||||||
| Total loans (1) | $ | 2,392,348 | $ | 123,895 | 5.18 | % | $ | 2,206,541 | $ | 107,368 | 4.87 | % | ||||||||
| Debt securities | 227,384 | 6,020 | 2.65 | % | 220,953 | 5,347 | 2.42 | % | ||||||||||||
| Federal funds sold and other interest-earning assets | 255,323 | 5,030 | 1.97 | % | 272,715 | 3,204 | 1.17 | % | ||||||||||||
| Nonmarketable equity securities | 15,282 | 814 | 5.32 | % | 14,692 | 740 | 5.04 | % | ||||||||||||
| Total interest-earning assets | 2,890,337 | $ | 135,759 | 4.70 | % | 2,714,901 | $ | 116,659 | 4.30 | % | ||||||||||
| Allowance for loan losses | (25,063 | ) | (25,319 | ) | ||||||||||||||||
| Noninterest-earnings assets | 290,868 | 284,165 | ||||||||||||||||||
| Total assets | $ | 3,156,142 | $ | 2,973,747 | ||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposits | $ | 1,519,643 | $ | 10,586 | 0.70 | % | $ | 1,503,350 | $ | 7,652 | 0.51 | % | ||||||||
| Repurchase agreements | 1,601 | 4 | 0.25 | % | 2,254 | 5 | 0.27 | % | ||||||||||||
| FHLB advances | 3,356 | 73 | 2.18 | % | — | — | — | |||||||||||||
| Note payable | — | 15 | — | 22,164 | 906 | 4.09 | % | |||||||||||||
| Junior subordinated debt | 10,572 | 420 | 3.97 | % | 10,826 | 322 | 2.97 | % | ||||||||||||
| Total interest-bearing liabilities | 1,535,172 | $ | 11,098 | 0.72 | % | 1,538,594 | $ | 8,885 | 0.58 | % | ||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing deposits | 1,134,191 | 1,031,707 | ||||||||||||||||||
| Other liabilities | 22,082 | 19,388 | ||||||||||||||||||
| Total noninterest-bearing liabilities | 1,156,273 | 1,051,095 | ||||||||||||||||||
| Shareholders’ equity | 464,697 | 384,058 | ||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 3,156,142 | $ | 2,973,747 | ||||||||||||||||
| Net interest income | $ | 124,661 | $ | 107,774 | ||||||||||||||||
| Net interest spread (2) | 3.97 | % | 3.72 | % | ||||||||||||||||
| Net interest margin (3) | 4.31 | % | 3.97 | % | ||||||||||||||||
| Net interest margin—tax equivalent (4) | 4.35 | % | 4.06 | % | ||||||||||||||||
(1) Includes average outstanding balances of loans held for sale of $589,000 and $769,000 for the year ended December 31, 2018 and 2017, respectively.
(2) Net interest spread is the average yield on interest‑earning assets minus the average rate on interest‑bearing liabilities.
(3) Net interest margin is equal to net interest income divided by average interest‑earning assets.
(4) To make pre‑tax income and resultant yields on tax‑exempt investments and loans comparable to those on taxable investments and loans, a tax equivalent adjustment of $1.1 million and $2.3 million for the year ended December 31, 2018 and 2017, respectively, has been computed using a federal income tax rate of 21% for 2018 and 35% for 2017.
CBTX, INC. AND SUBSIDIARY
Yield Trend (Unaudited)
| For the Three Months Ended | |||||||||||||||
| 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | |||||||||||
| Yield Trend - Annualized: | |||||||||||||||
| Interest-earnings assets: | |||||||||||||||
| Total loans | 5.37 | % | 5.20 | % | 5.15 | % | 4.98 | % | 4.88 | % | |||||
| Debt securities | 2.70 | % | 2.64 | % | 2.65 | % | 2.60 | % | 2.42 | % | |||||
| Federal funds sold and other interest-earning assets | 2.30 | % | 2.04 | % | 1.86 | % | 1.60 | % | 1.37 | % | |||||
| Nonmarketable equity securities | 5.79 | % | 5.01 | % | 5.17 | % | 5.32 | % | 5.13 | % | |||||
| Total interest-earning assets | 4.87 | % | 4.70 | % | 4.71 | % | 4.49 | % | 4.29 | % | |||||
| Interest-bearing liabilities: | |||||||||||||||
| Interest-bearing deposits | 0.89 | % | 0.77 | % | 0.58 | % | 0.53 | % | 0.52 | % | |||||
| Repurchase agreements | 0.21 | % | 0.26 | % | 0.26 | % | 0.29 | % | — | ||||||
| FHLB advances | — | 2.17 | % | 2.19 | % | — | — | ||||||||
| Note payable | — | — | — | — | 4.30 | % | |||||||||
| Junior subordinated debt | 4.28 | % | 4.14 | % | 4.04 | % | 3.48 | % | 3.15 | % | |||||
| Total interest-bearing liabilities | 0.91 | % | 0.80 | % | 0.60 | % | 0.55 | % | 0.56 | % | |||||
| Net interest spread (1) | 3.96 | % | 3.90 | % | 4.11 | % | 3.93 | % | 3.73 | % | |||||
| Net interest margin (2) | 4.39 | % | 4.28 | % | 4.39 | % | 4.19 | % | 3.98 | % | |||||
| Net interest margin—tax equivalent (3) | 4.42 | % | 4.31 | % | 4.43 | % | 4.23 | % | 4.06 | % | |||||
(1) Net interest spread is the average yield on interest‑earning assets minus the average rate on interest‑bearing liabilities.
(2) Net interest margin is equal to net interest income divided by average interest‑earning assets.
(3) To make pre‑tax income and resultant yields on tax‑exempt investments and loans comparable to those on taxable investments and loans, a tax equivalent adjustment has been computed using a federal income tax rate of 21% for 2018 and 35% for 2017.
CBTX, INC. AND SUBSIDIARY
Average Outstanding Balances (Unaudited)
(In thousands)
| For the Three Months Ended | ||||||||||||||||||||
| 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | ||||||||||||||||
| Average Outstanding Balances: | ||||||||||||||||||||
| Assets | ||||||||||||||||||||
| Interest-earnings assets: | ||||||||||||||||||||
| Total loans (1) | $ | 2,468,415 | $ | 2,404,491 | $ | 2,375,253 | $ | 2,319,463 | $ | 2,252,735 | ||||||||||
| Debt securities | 226,882 | 230,592 | 228,262 | 223,730 | 222,602 | |||||||||||||||
| Federal funds sold and other interest-earning assets | 293,299 | 272,739 | 201,906 | 252,722 | 317,484 | |||||||||||||||
| Nonmarketable equity securities | 14,789 | 16,799 | 14,823 | 14,701 | 14,698 | |||||||||||||||
| Total interest-earning assets | 3,003,385 | 2,924,621 | 2,820,244 | 2,810,616 | 2,807,519 | |||||||||||||||
| Allowance for loan losses | (24,305 | ) | (25,689 | ) | (25,392 | ) | (24,866 | ) | (24,127 | ) | ||||||||||
| Noninterest-earnings assets | 295,236 | 292,598 | 288,416 | 287,099 | 296,108 | |||||||||||||||
| Total assets | $ | 3,274,316 | $ | 3,191,530 | $ | 3,083,268 | $ | 3,072,849 | $ | 3,079,500 | ||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing deposits | $ | 1,578,146 | $ | 1,530,077 | $ | 1,478,016 | $ | 1,491,613 | $ | 1,519,631 | ||||||||||
| Repurchase agreements | 1,925 | 1,516 | 1,540 | 1,418 | 1,793 | |||||||||||||||
| FHLB advances | — | 11,141 | 2,198 | — | — | |||||||||||||||
| Note payable | — | — | — | — | 11,252 | |||||||||||||||
| Junior subordinated debt | 9,817 | 10,826 | 10,826 | 10,826 | 10,826 | |||||||||||||||
| Total interest-bearing liabilities | 1,589,888 | 1,553,560 | 1,492,580 | 1,503,857 | 1,543,502 | |||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||
| Noninterest-bearing deposits | 1,181,035 | 1,145,516 | 1,111,736 | 1,097,085 | 1,087,416 | |||||||||||||||
| Other liabilities | 23,083 | 23,600 | 20,441 | 21,165 | 23,271 | |||||||||||||||
| Total noninterest-bearing liabilities | 1,204,118 | 1,169,116 | 1,132,177 | 1,118,250 | 1,110,687 | |||||||||||||||
| Shareholders’ equity | 480,310 | 468,854 | 458,511 | 450,742 | 425,311 | |||||||||||||||
| Total liabilities and shareholders’ equity | $ | 3,274,316 | $ | 3,191,530 | $ | 3,083,268 | $ | 3,072,849 | $ | 3,079,500 | ||||||||||
(1) Includes average outstanding balances of loans held for sale.
CBTX, INC. AND SUBSIDIARY
Period End Balances (Unaudited)
(In thousands, except percentages)
| 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | |||||||||||||||||||||||||||||||
| Amount | % | Amount | % | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||
| Loan Portfolio: | |||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 519,779 | 21.2 | % | $ | 569,334 | 23.1 | % | $ | 565,850 | 23.5 | % | $ | 559,070 | 23.7 | % | $ | 559,363 | 24.1 | % | |||||||||||||||
| Real estate: | |||||||||||||||||||||||||||||||||||
| Commercial real estate | 795,733 | 32.4 | % | 776,439 | 31.4 | % | 780,224 | 32.4 | % | 767,108 | 32.5 | % | 738,293 | 31.9 | % | ||||||||||||||||||||
| Construction and development | 515,533 | 21.0 | % | 487,289 | 19.7 | % | 449,390 | 18.6 | % | 436,260 | 18.5 | % | 449,211 | 19.4 | % | ||||||||||||||||||||
| 1-4 family residential | 282,011 | 11.5 | % | 288,737 | 11.7 | % | 279,227 | 11.6 | % | 260,580 | 11.0 | % | 258,584 | 11.2 | % | ||||||||||||||||||||
| Multi-family residential | 221,194 | 9.0 | % | 236,907 | 9.6 | % | 229,609 | 9.5 | % | 236,000 | 10.0 | % | 220,305 | 9.5 | % | ||||||||||||||||||||
| Consumer | 39,421 | 1.6 | % | 39,807 | 1.6 | % | 41,833 | 1.7 | % | 40,869 | 1.7 | % | 40,433 | 1.7 | % | ||||||||||||||||||||
| Agricultural | 11,076 | 0.5 | % | 11,609 | 0.5 | % | 10,951 | 0.5 | % | 8,807 | 0.4 | % | 11,256 | 0.5 | % | ||||||||||||||||||||
| Other | 68,382 | 2.8 | % | 59,484 | 2.4 | % | 53,376 | 2.2 | % | 52,382 | 2.2 | % | 40,344 | 1.7 | % | ||||||||||||||||||||
| Gross loans | 2,453,129 | 100.0 | % | 2,469,606 | 100.0 | % | 2,410,460 | 100.0 | % | 2,361,076 | 100.0 | % | 2,317,789 | 100.0 | % | ||||||||||||||||||||
| Less deferred fees and unearned discount | (6,306 | ) | (6,025 | ) | (5,768 | ) | (4,910 | ) | (4,785 | ) | |||||||||||||||||||||||||
| Less allowance for loan losses | (23,693 | ) | (24,486 | ) | (25,746 | ) | (25,349 | ) | (24,778 | ) | |||||||||||||||||||||||||
| Less loans held for sale | — | (384 | ) | (560 | ) | (113 | ) | (1,460 | ) | ||||||||||||||||||||||||||
| Loans, net | $ | 2,423,130 | $ | 2,438,711 | $ | 2,378,386 | $ | 2,330,704 | $ | 2,286,766 | |||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand accounts | $ | 387,457 | 14.0 | % | $ | 367,120 | 13.6 | % | $ | 342,890 | 13.4 | % | $ | 345,378 | 13.3 | % | $ | 363,015 | 14.0 | % | |||||||||||||||
| Money market accounts | 737,770 | 26.7 | % | 722,382 | 26.9 | % | 650,747 | 25.4 | % | 717,548 | 27.6 | % | 702,299 | 27.0 | % | ||||||||||||||||||||
| Savings accounts | 96,962 | 3.5 | % | 94,344 | 3.5 | % | 97,576 | 3.8 | % | 95,603 | 3.7 | % | 95,842 | 3.7 | % | ||||||||||||||||||||
| Certificates and other time deposits, $100,000 or greater | 189,007 | 6.8 | % | 182,552 | 6.8 | % | 164,464 | 6.4 | % | 161,777 | 6.2 | % | 172,469 | 6.6 | % | ||||||||||||||||||||
| Certificates and other time deposits, less than $100,000 | 172,028 | 6.2 | % | 178,697 | 6.6 | % | 191,442 | 7.5 | % | 158,875 | 6.1 | % | 159,558 | 6.1 | % | ||||||||||||||||||||
| Total interest-bearing deposits | 1,583,224 | 57.2 | % | 1,545,095 | 57.4 | % | 1,447,119 | 56.5 | % | 1,479,181 | 56.9 | % | 1,493,183 | 57.4 | % | ||||||||||||||||||||
| Noninterest-bearing deposits | 1,183,058 | 42.8 | % | 1,144,985 | 42.6 | % | 1,114,155 | 43.5 | % | 1,120,521 | 43.1 | % | 1,109,789 | 42.6 | % | ||||||||||||||||||||
| Total deposits | $ | 2,766,282 | 100.0 | % | $ | 2,690,080 | 100.0 | % | $ | 2,561,274 | 100.0 | % | $ | 2,599,702 | 100.0 | % | $ | 2,602,972 | 100.0 | % | |||||||||||||||
CBTX, INC. AND SUBSIDIARY
Credit Quality (Unaudited)
(In thousands, except percentages)
| 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | |||||||||||||||||||||
| Nonperforming assets (at period end): | |||||||||||||||||||||||||
| Nonaccrual loans: | |||||||||||||||||||||||||
| Commercial and industrial | $ | 1,317 | $ | 2,161 | $ | 1,734 | $ | 2,533 | $ | 3,280 | |||||||||||||||
| Real estate: | |||||||||||||||||||||||||
| Commercial real estate | 1,517 | 2,751 | 2,092 | 2,217 | 3,216 | ||||||||||||||||||||
| Construction and development | — | 13 | 225 | 233 | 252 | ||||||||||||||||||||
| 1-4 family residential | 656 | 677 | 738 | 765 | 898 | ||||||||||||||||||||
| Multi-family residential | — | — | — | — | — | ||||||||||||||||||||
| Consumer | — | — | 4 | 21 | — | ||||||||||||||||||||
| Agricultural | — | — | — | — | — | ||||||||||||||||||||
| Nonaccrual loans | 3,490 | 5,602 | 4,793 | 5,769 | 7,646 | ||||||||||||||||||||
| Accruing loans 90 or more days past due | — | — | — | — | — | ||||||||||||||||||||
| Total nonperforming loans | 3,490 | 5,602 | 4,793 | 5,769 | 7,646 | ||||||||||||||||||||
| Foreclosed assets, including other real estate: | |||||||||||||||||||||||||
| Commercial real estate, construction and development, land and land development | 12 | 175 | 137 | 295 | 298 | ||||||||||||||||||||
| Residential real estate | — | — | — | — | 407 | ||||||||||||||||||||
| Total foreclosed assets | 12 | 175 | 137 | 295 | 705 | ||||||||||||||||||||
| Total nonperforming assets | $ | 3,502 | $ | 5,777 | $ | 4,930 | $ | 6,064 | $ | 8,351 | |||||||||||||||
| Allowance for Loan Losses (at period end): | |||||||||||||||||||||||||
| Commercial and industrial | $ | 7,719 | $ | 8,763 | $ | 7,648 | $ | 7,439 | $ | 7,257 | |||||||||||||||
| Real estate: | |||||||||||||||||||||||||
| Commercial real estate | 6,730 | 6,913 | 10,930 | 10,742 | 10,375 | ||||||||||||||||||||
| Construction and development | 4,298 | 3,606 | 3,335 | 3,356 | 3,482 | ||||||||||||||||||||
| 1-4 family residential | 2,281 | 2,454 | 1,404 | 1,329 | 1,326 | ||||||||||||||||||||
| Multi-family residential | 1,511 | 1,630 | 1,479 | 1,520 | 1,419 | ||||||||||||||||||||
| Consumer | 387 | 394 | 479 | 517 | 566 | ||||||||||||||||||||
| Agricultural | 62 | 71 | 66 | 53 | 68 | ||||||||||||||||||||
| Other | 705 | 655 | 405 | 393 | 285 | ||||||||||||||||||||
| Total allowance for loan losses | $ | 23,693 | $ | 24,486 | $ | 25,746 | $ | 25,349 | $ | 24,778 | |||||||||||||||
| Credit Quality Ratios (at period end): | |||||||||||||||||||||||||
| Nonperforming assets to total assets | 0.11 | % | 0.18 | % | 0.16 | % | 0.20 | % | 0.27 | % | |||||||||||||||
| Nonperforming loans to total loans | 0.14 | % | 0.23 | % | 0.20 | % | 0.24 | % | 0.33 | % | |||||||||||||||
| Allowance for loan losses to nonperforming loans | 678.9 | % | 437.1 | % | 537.2 | % | 439.4 | % | 324.1 | % | |||||||||||||||
| Allowance for loan losses to total loans | 0.97 | % | 0.99 | % | 1.07 | % | 1.08 | % | 1.07 | % | |||||||||||||||
CBTX, INC. AND SUBSIDIARY
Allowance for Loan Losses (Unaudited)
(In thousands, except percentages)
| For the Three Months Ended | |||||||||||||||||||||
| 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | |||||||||||||||||
| Analysis of Allowance for Loan Losses | |||||||||||||||||||||
| Allowance for loan losses at beginning of period | $ | 24,486 | $ | 25,746 | $ | 25,349 | $ | 24,778 | $ | 23,757 | |||||||||||
| Provision (recapture) for loan losses | (2,169 | ) | (1,142 | ) | 690 | 865 | 1,050 | ||||||||||||||
| Net (charge-offs) recoveries | |||||||||||||||||||||
| Commercial and industrial | 1,521 | (114 | ) | (301 | ) | (297 | ) | 52 | |||||||||||||
| Real estate: | |||||||||||||||||||||
| Commercial real estate | (156 | ) | (3 | ) | 5 | 3 | (118 | ) | |||||||||||||
| Construction and development | (1 | ) | — | — | — | — | |||||||||||||||
| 1-4 family residential | — | 4 | — | (2 | ) | (7 | ) | ||||||||||||||
| Multi-family residential | — | — | — | — | — | ||||||||||||||||
| Consumer | 1 | (4 | ) | 3 | 2 | 9 | |||||||||||||||
| Agricultural | 10 | — | — | — | 35 | ||||||||||||||||
| Other | 1 | (1 | ) | — | — | — | |||||||||||||||
| Total net (charge-offs) recoveries | 1,376 | (118 | ) | (293 | ) | (294 | ) | (29 | ) | ||||||||||||
| Allowance for loan losses at end of period | $ | 23,693 | $ | 24,486 | $ | 25,746 | $ | 25,349 | $ | 24,778 | |||||||||||
| Net charge-offs (recoveries) to average loans | (0.22 | %) | 0.02 | % | 0.05 | % | 0.05 | % | 0.00 | % | |||||||||||
CBTX, INC. AND SUBSIDIARY
Non‑GAAP to GAAP Reconciliation (Unaudited)
(In thousands, except per share data and percentages)
Our accounting and reporting policies conform to GAAP and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non‑GAAP financial measures. We classify a financial measure as being a non‑GAAP financial measure if that financial measure excludes or includes amounts or is subject to adjustments that have the effect of excluding or including amounts, that are not included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non‑GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP. Non‑GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the way we calculate the non‑GAAP financial measures may differ from that of other companies reporting measures with similar names.
We calculate (1) tangible equity as total shareholders’ equity, less goodwill and other intangible assets, net of accumulated amortization, and (2) tangible book value per share as tangible equity divided by shares of common stock outstanding at the end of the relevant period. The most directly comparable GAAP financial measure for tangible book value per share is book value per share. We calculate tangible assets as total assets less goodwill and other intangible assets, net of accumulated amortization. The most directly comparable GAAP financial measure for tangible equity to tangible assets is total shareholders’ equity to total assets. We believe that tangible book value per share and tangible equity to tangible assets are measures that are important to many investors in the marketplace who are interested in book value per share and total shareholders’ equity to total assets, exclusive of change in intangible assets.
The following tables reconcile, as of the dates set forth below, total shareholders’ equity to tangible equity, total assets to tangible assets and presents book value per share, tangible book value per share, tangible equity to tangible assets and shareholders’ equity to total assets:
| 12/31/2018 | 9/30/2018 | 6/30/2018 | 3/31/2018 | 12/31/2017 | |||||||||||||||||||||
| Tangible Equity | |||||||||||||||||||||||||
| Total shareholders’ equity | $ | 487,625 | $ | 471,851 | $ | 461,195 | $ | 451,571 | $ | 446,214 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Goodwill | 80,950 | 80,950 | 80,950 | 80,950 | 80,950 | ||||||||||||||||||||
| Other intangibles | 5,775 | 6,038 | 6,276 | 6,521 | 6,770 | ||||||||||||||||||||
| Tangible equity | $ | 400,900 | $ | 384,863 | $ | 373,969 | $ | 364,100 | $ | 358,494 | |||||||||||||||
| Tangible Assets | |||||||||||||||||||||||||
| Total assets | $ | 3,279,096 | $ | 3,190,453 | $ | 3,100,760 | $ | 3,074,790 | $ | 3,081,083 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||||
| Goodwill | 80,950 | 80,950 | 80,950 | 80,950 | 80,950 | ||||||||||||||||||||
| Other intangibles | 5,775 | 6,038 | 6,276 | 6,521 | 6,770 | ||||||||||||||||||||
| Tangible assets | $ | 3,192,371 | $ | 3,103,465 | $ | 3,013,534 | $ | 2,987,319 | $ | 2,993,363 | |||||||||||||||
| Common shares outstanding | 24,907 | 24,859 | 24,859 | 24,833 | 24,833 | ||||||||||||||||||||
| Book value per share | $ | 19.6 | $ | 19.0 | $ | 18.6 | $ | 18.2 | $ | 18.0 | |||||||||||||||
| Tangible book value per share | $ | 16.1 | $ | 15.5 | $ | 15.0 | $ | 14.7 | $ | 14.4 | |||||||||||||||
| Total shareholders’ equity to total assets | 14.9 | % | 14.8 | % | 14.9 | % | 14.7 | % | 14.5 | % | |||||||||||||||
| Tangible equity to tangible assets | 12.6 | % | 12.4 | % | 12.4 | % | 12.2 | % | 12.0 | % | |||||||||||||||