CBOA Financial, Inc. Reports Consolidated Earnings of $747,000 in 2Q 2022

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07/29/2022 - 04:07 PM

TUCSON, Ariz., July 29, 2022 /PRNewswire/ -- 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 $2.89 per 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
Dollars in thousands - Unaudited	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