CBOA Financial, Inc. (OTCMKTS: CBOF) (the “Company”), parent company of Commerce Bank of Arizona (the “Bank” or “CBAZ”), announced that consolidated net income for quarter ending June 30, 2022 increased 19% to $747 thousand, from $650 thousand in the first quarter of this year.
“Despite headwinds related to record inflation levels, CBAZ continued its’ overall robust operating performance in the second quarter”, said Chris Webster, President and CEO. He stated further, “Record year-to-date pre-tax income of $1.89 million is reflective of the Bank’s balance sheet reacting favorably to the Federal Reserve’s recent policy of raising interest rates combined with the Bank’s low and stable funding costs.” Webster added, “We continue to closely monitor loan portfolio performance. Importantly, our customers are effectively managing ongoing supply chain issues and rising costs.”
Second Quarter 2022 Highlights
- $42 million in new loans funded during the quarter
- Interest Income increased 9% compared to last quarter
- Interest expense decreased by 33% compared to Q2 2021
Operational Highlights
Net loan growth was $26.2 million for the first six months of the year. The Bank’s Net Interest Margin increased to 4.02% for the second quarter. The Efficiency Ratio also improved to 71.6%. Year-over-year, non-performing assets which includes OREO are down 86% from $2 million or 0.57% of assets to $276 thousand or 0.08% of assets.
Balance Sheet
Total assets increased by 2.4% to $363.5 million during the quarter ended June 30, 2022, and increased 8.0% compared to $336.5 million a year ago.
Gross loans increased $19.4 million since first quarter 2022, ending the second quarter 2022 at $257 million. Total deposits increased by 2.8% to $327 million during the quarter and increased 9.1% compared to $300 million a year ago.
The Allowance for Loan Losses totaled $3.7 million at June 2022, or 1.44% of loans, unchanged from the previous quarter.
Shareholders’ equity decreased to $26.6 million at June 30, 2022, from $27.0 million the preceding quarter due to an increase in unrealized losses on securities. At June 30, 2022, tangible book value was $2.79 per share compared to $2.89per share at March 31, 2022 and $3.16 per share a year ago. The Bank’s June, 2022 Tier 1 Leverage ratio was 9.62%, compared to 8.43% at June 30, 2021.
Capital Management
Capital ratios exceeded regulatory guidelines for a well-capitalized institution under Basel III and Dodd Frank Wall Street Reform requirements at June 30, 2022 as well as during the first quarter of 2022. Capital ratios are presented below.
About the Company
Commerce Bank of Arizona, established in 2002 in Tucson, Arizona, is a full-service community bank that caters to small-to mid-sized businesses and real estate professionals. CBAZ offers commercial clients with a variety of services ranging from U.S. Small Business Administration (SBA) financing solutions, construction loans, and commercial real estate loans. CBOA Financial, Inc. is a single-bank holding company and parent of the Bank. The Company is traded over-the-counter as CBOF. For additional information, please visit: www.commercebankaz.com.
Forward-looking Statements
This press release may include forward-looking statements about CBOA Financial, Inc. or Commerce Bank of Arizona. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: competition, fluctuations in interest rates, dependency on key individuals, loan defaults, geographical concentration, litigation and changes in federal laws, regulations and interpretations thereof. All forward-looking statements included in this press release are based on information available at the time of the release, and CBOA Financial, Inc. and Commerce Bank of Arizona assume no obligation to update any forward-looking statement.
| Unaudited Consolidated Summary Financial Information | |||||||
| Dollars in thousands – Unaudited | For the quarter ended | Year to Date | |||||
| 6/30/2022 | 3/31/2022 | 6/30/2021 | 6/30/2022 | 6/30/2021 | |||
| Summary Income Data | |||||||
| Interest Income | 3,608 | 3,308 | 3,299 | 6,916 | 6,785 | ||
| Interest expense | 148 | 140 | 221 | 288 | 500 | ||
| Net Interest Income | 3,460 | 3,168 | 3,078 | 6,628 | 6,285 | ||
| Provision for (reduction in) loan losses | – | 37 | 193 | 37 | 193 | ||
| Non-interest income | 87 | 452 | 84 | 539 | 154 | ||
| Realized gains (losses) on sales of securities | – | – | – | – | – | ||
| Non-interest expense | 2,540 | 2,705 | 2,440 | 5,245 | 4,965 | ||
| Income (loss) before income taxes | 1,007 | 878 | 529 | 1,885 | 1,281 | ||
| Provision for income tax | 260 | 228 | (748) | 488 | (536) | ||
| Net Income | 747 | 650 | 1,277 | 1,397 | 1,817 | ||
| Per Share Data | |||||||
| Shares outstanding end-of-period | 9,555 | 9,356 | 8,550 | 9,555 | 8,550 | ||
| Earnings per common share ($’s) | 0.08 | 0.07 | 0.15 | 0.15 | 0.21 | ||
| Earnings per common share (Diluted) ($’s) | 0.07 | 0.06 | 0.14 | 0.14 | 0.19 | ||
| Cash dividend declared | – | – | – | – | – | ||
| Total shareholders’ equity | 26,641 | 27,024 | 27,033 | 26,641 | 27,033 | ||
| Tangible Book value per share ($’s) | 2.79 | 2.89 | 3.16 | 2.79 | 3.16 | ||
| Selected Balance Sheet Data | |||||||
| Total assets | 363,548 | 354,914 | 336,551 | 363,548 | 336,551 | ||
| Securities available-for-sale | 63,027 | 59,339 | 42,831 | 63,027 | 42,831 | ||
| Loans | 256,905 | 237,554 | 251,449 | 256,905 | 251,449 | ||
| Allowance for loan losses | 3,702 | 3,431 | 3,170 | 3,702 | 3,170 | ||
| Deposits | 327,574 | 318,580 | 300,366 | 327,574 | 300,366 | ||
| Other borrowings | – | – | – | – | – | ||
| Shareholders’ equity | 26,641 | 27,024 | 27,033 | 26,641 | 27,033 | ||
| Performance Ratios (%) | |||||||
| Return on avg shareholders’ equity | 11.22 | 9.62 | 12.53 | 10.49 | 10.36 | ||
| Net interest margin (Bank) | 4.02 | 3.83 | 3.63 | 3.95 | 3.73 | ||
| Efficiency ratio (Bank) | 71.61 | 74.72 | 76.11 | 73.18 | 75.67 | ||
| Asset Quality Data (%) | |||||||
| Nonperforming assets to total assets | 0.08 | 0.37 | 0.57 | 0.08 | 0.57 | ||
| Reserve for loan losses to total loans | 1.44 | 1.44 | 1.26 | 1.44 | 1.26 | ||
| Net Charge-offs to avg loans for period | – | (0.03) | (0.02) | (0.03) | (0.02) | ||
| Regulatory Capital Ratios (%) | |||||||
| Common Equity Tier 1 | 11.30 | 12.16 | 11.96 | 11.30 | 11.96 | ||
| Tier 1 risk-based capital ratio | 11.30 | 12.16 | 11.96 | 11.30 | 11.96 | ||
| Total risk-based capital ratio | 12.55 | 13.41 | 13.21 | 12.55 | 13.21 | ||
| Tier 1 leverage capital ratio | 9.62 | 9.72 | 8.43 | 9.62 | 8.43 |
Contact:
Chris Webster
President & CEO
480-253-4511
[email protected]
SOURCE Commerce Bank of Arizona