CBOA Financial, Inc. Reports Consolidated Earnings of $1,061,000 in 4Q 2022

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TUCSON, Ariz., Jan. 24, 2023 -- 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 December 31, 2022 increased 5.6% to $1.06 million, from $1.01 million in the third quarter of this year.

"2022 was a tremendous year for Commerce Bank of Arizona. The Bank achieved strong improvement in nearly every financial category. Our growth and earnings reflect the consistent and resilient performance of our highly talented lending team," stated Chris Webster, President and CEO. "Net Income increased to $3.46 million which was an increase of 19.8% over fiscal 2021. Fully diluted Earnings per Share was $0.33/share, a 17.9% increase during the year" Webster added. Webster went on to say, "While we are very pleased with our 2022 performance, we continue to closely monitor our local market environments and the impact of ongoing increases in inflation and interest rates. Although the Bank's non-performing assets to total assets ratio decreased to a historic low point of a single basis point, we remain vigilant on monitoring our customers' performance and their ability to absorb these challenging macro-economic influences."

Fourth Quarter 2022 Highlights

  • $41 million in new loans funded during the quarter.
  • Net Interest Income increased 9.5% compared to the third quarter.
  • Net Income exceeded $1 million for the second consecutive quarter.

Operational Highlights
Net loan growth for the full year was $50.3 million, a 21.8% increase over 2021. The Bank's Net Interest Margin increased to 4.79% in the fourth quarter. Non-performing assets which includes Other Real Estate Owned (OREO) are $3 thousand or 0.001% of assets, down from $1.4 million or 0.41% of assets at prior year-end.

Balance Sheet
Total assets decreased by 0.6% to $370.3 million during the quarter ended December 31, 2022, and increased 7.4% compared to $344.6 million a year ago.

Gross loans increased $50.3 million year-over-year, ending the fourth quarter 2022 at $281 million. Total deposits remained at $306 million year-over-year.

The Allowance for Loan Losses totaled $3.7 million at December 2022, or 1.32% of loans, down from 1.46% the previous quarter due to loan growth.

Shareholders' equity increased to $29 million at December 31, 2022, from $26.5 million the preceding quarter due to earnings, proceeds of warrant exercises which were granted as part of the Company's 20147 capital raise, and an increase in unrealized gains on securities. At December 31, 2022, tangible book value was $2.84 per share compared to $2.71 per share at September 30, 2022 and $3.12 per share a year ago. The Bank's December 2022 Tier 1 Leverage ratio was 10.31%, compared to 9.87% at December 31, 2021.

Capital Management
Capital ratios exceeded regulatory guidelines for a well-capitalized institution under Basel III and Dodd Frank Wall Street Reform requirements at December 31, 2022 as well as during all other quarters 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 


12/31/2022

9/30/2022

12/31/2021


12/31/2022

12/31/2021

Summary Income Data





Interest Income


4,705

4,134

3,453


15,755

14,125

Interest expense


368

174

131


830

829

Net Interest Income


4,337

3,960

3,322


14,925

13,296

Provision for (reduction in) loan losses


-

-

155


37

494

Non-interest income


156

106

124


802

352

Realized gains (losses) on sales of securities


-

-

-


-

2

Non-interest expense


3,062

2,709

2,377


11,017

9,781

Income (loss) before income taxes


1,431

1,357

914


4,673

3,375

Provision for income tax


370

352

366


1,210

515

Net Income


1,061

1,005

548


3,463

2,860









Per Share Data








Shares outstanding end-of-period


10,214

9,759

9,356


10,214

9,356

Earnings per common share ($'s)


0.10

0.10

0.06


0.34

0.31

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


0.10

0.10

0.05


0.33

0.28

Cash dividend declared


-

-

-


-

-

Total shareholders' equity


29,012

26,461

29,197


29,012

29,197

Tangible Book value per share ($'s)


2.84

2.71

3.12


2.84

3.12









Selected Bank Balance Sheet Data








Total assets


370,251

372,386

344,630


370,251

344,630

Securities available-for-sale


66,766

62,317

54,599


66,766

54,599

Loans


281,020

254,458

230,700


281,020

230,700

Allowance for loan losses


3,716

3,703

3,320


3,716

3,320

Deposits


306,287

337,631

305,694


306,287

305,694

Other borrowings


26,050

-

-


26,050

-

Shareholders' equity


29,012

26,461

29,197


29,012

29,197









Performance Ratios (%)








Return on avg shareholders' equity


15.35

15.09

7.56


11.59

9.87

Net interest margin (Bank)


4.79

4.34

4.02


4.32

3.99

Efficiency ratio (Bank)


68.15

66.63

69.07


70.05

70.57









Asset Quality Data (%)








Nonperforming assets to total assets 


0.01

0.05

0.39


0.01

0.39

Reserve for loan losses to total loans 


1.32

1.46

1.44


1.32

1.44

Net Charge-offs to avg loans for period


-

-

(0.01)


(0.00)

0.05









Regulatory Capital Ratios (%) (Bank)








Common Equity Tier 1 


11.58

11.57

12.62


11.58

12.62

Tier 1 risk-based capital ratio 


11.58

11.57

12.62


11.58

12.62

Total risk-based capital ratio 


12.67

12.82

13.87


12.67

13.87

Tier 1 leverage capital ratio 


10.31

9.40

9.87


10.31

9.87

 

Contact:
Chris Webster
President & CEO
480-253-4511
cwebster@commercebankaz.com

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SOURCE Commerce Bank of Arizona