CBOA Financial, Inc. Reports Consolidated Earnings of $1,277,000 in 2Q 2021

TUCSON, Ariz., July 30, 2021 /PRNewswire/ — CBOA Financial, Inc. (OTCMKTS:CBOF) (the «Company»), parent company of Commerce Bank of Arizona…

TUCSON, Ariz., July 30, 2021 /PRNewswire/ — CBOA Financial, Inc. (OTCMKTS:CBOF) (the «Company»), parent company of Commerce Bank of Arizona (the «Bank» or «CBAZ»), announced that consolidated after tax net income for quarter ending June 30, 2021 increased 223% to $1,277,000, from $395,000 year-over-year.

Chris Webster, Bank President and Chief Executive Officer commented, «The strong loan growth performance seen earlier in the year continued through the second quarter. Our highly experienced and accomplished lending team worked hard to originate significant new loan opportunities while at the same time processing another $27 million in second round Paycheck Protection Program («PPP») loans. However Total Loan balances were impacted as the Bank received a significant level of PPP loan forgiveness during the quarter,» Webster added. He further commented, «In terms of our funding costs, 39% of our Total Deposits are Non-interest bearing. As a result, we are able to consistently maintain a very healthy Net Interest Margin as we organically grow our loan portfolio.»

First Quarter 2021 Highlights

  • Traditional (non-PPP) Loan Growth was $19 million, or 7% for the quarter
  • Nonperforming assets decreased 23% for the quarter

Operational Highlights

Interest income was aided by recognized fee income of PPP loans that bolstered earnings by $290,000. Further contributing to the growth in net interest income was a $57,000 decline in interest expense.

The Bank continues to make progress on its legacy classified assets. Year-over-year, non-performing assets which include loans and OREO are down 57% from $4.6 million or 1.5% of assets to $2 million or 0.57% of assets.

Balance Sheet

Total assets decreased by 8% to $336.5 million during the quarter ended June 30, 2021 and increased 7% compared to $315.2 million a year ago. Total asset growth from June 2020 to June 2021 consisted of PPP loans funding CBAZ deposit accounts totaling $27 million and organic net deposit growth of roughly $4 million.

Traditional gross loans increased $19 million since first quarter 2021 ending the first quarter 2021 at $217 million. Total gross loans decreased by 8.4% to $251 million in the quarter and increased 4.3% compared to $241 million a year ago. Total deposits decreased by 1.5% to $300 million during the quarter and increased 12% compared to $269 million a year ago.

The allowance for loan losses totaled $3.17 million at June 30, 2021, or 1.46% of «traditional» non-PPP loans, compared to 1.50% in the previous quarter, and was 1.26% for the quarter with the PPP loans included.

Shareholders’ equity increased at $27 million at June 30, 2021, from the preceding quarter. At June 30, 2021, tangible book value was $2.86 per share compared to $2.81 per share at March 31, 2021 and $2.81 per share a year ago. Excluding the PPP loans, the Bank’s June 30, 2021 Tier 1 Leverage ratio would have been 9.3%, and 11.7% as of June 30, 2020. Growth in total assets associated with the PPP loans was the primary driver of a decline in the Bank’s Tier 1 Leverage ratio.

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, 2021. 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, 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 


6/30/2021

3/31/2021

6/30/2020


6/30/2021

6/30/2020

Summary Income Data





Interest Income


3,299

3,486

3,549


6,785

6,375

Interest expense


221

278

366


500

812

Net Interest Income


3,078

3,208

3,183


6,285

5,563

Provision for (reduction in) loan losses


193


193

(279)

Non-interest income


84

70

(460)


154

(452)

Realized gains (losses) on sales of securities


47


168

Non-interest expense


2,440

2,523

2,375


4,965

4,792

Income (loss) before income taxes


529

755

395


1,281

766

Provision for income tax


(748)

212


(536)

Net Income


1,277

543

395


1,817

766









Per Share Data








Shares outstanding end-of-period


8,550

8,268

8,208


8,550

8,208

Earnings per common share ($’s)


0.15

0.07

0.05


0.21

0.09

Earnings per common share (Diluted) ($’s)


0.14

0.06

0.04


0.19

0.07

Cash dividend declared



Total shareholders’ equity


27,033

25,000

23,049


27,033

23,049

Tangible Book value per share ($’s)


2.86

2.81

2.81


2.86

2.81









Selected Balance Sheet Data








Total assets


336,551

365,470

315,157


336,551

315,157

Securities available-for-sale


42,831

38,630

28,888


42,831

28,888

Loans


251,449

259,893

240,979


251,449

240,979

Allowance for loan losses


3,170

2,972

2,991


3,170

2,991

Deposits


300,366

305,012

268,836


300,366

268,836

Other borrowings


25,539

14,808


14,808

Shareholders’ equity


27,033

25,000

23,049


27,033

23,049









Performance Ratios (%)








Return on average shareholders’ equity

 (annualized) 


12.53

8.16

6.62


10.36

6.59

Net interest margin


3.63

3.83

4.51


3.73

4.37

Efficiency ratio 


76.11

75.25

85.38


75.67

91.58









Asset Quality Data (%)








Nonperforming assets to total assets 


0.57

0.77

1.45


0.57

1.45

Reserve for loan losses to total loans 


1.26

1.14

1.24


1.26

1.24

Charge-offs to average loans for period


(0.0)

(0.03)

(0.0)


(0.0)

(0.0)









Regulatory Capital Ratios (%)








Common Equity Tier 1 


11.96

12.24

13.40


11.96

13.40

Tier 1 risk-based capital ratio 


11.96

12.24

13.40


11.96

13.40

Total risk-based capital ratio 


13.21

13.49

14.65


13.21

14.65

Tier 1 leverage capital ratio 


8.43

8.41

9.22


8.43

9.22

 

Contact:

Chris Webster

President & CEO

480-253-4511

cwebster@commercebankaz.com

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SOURCE Commerce Bank of Arizona