Communities First Financial Corporation Earns $5.41 Million for 4Q-2021 and a Record $20.53 Million for the Full Year 2021
FRESNO, Calif., Jan. 19, 2022 (GLOBE NEWSWIRE) -- Communities First Financial Corporation (the “Company”) (OTCQX: CFST), the parent company of Fresno First Bank (the “Bank”), today reported net income increased 66% to $5.41 million, or $1.74 per diluted share for the fourth quarter of 2021 (4Q-2021), compared to $3.25 million, or $1.07 per diluted share for the fourth quarter of 2020 (4Q-2020), and increased 4% from $5.22 million, or $1.68 per diluted share for the third quarter of 2021 (3Q-2021). For the year ended December 31, 2021, net income increased 78% to $20.53 million, or $6.62 per diluted share, compared to $11.51 million, or $3.79 per diluted share, for year ended December 31, 2020. All results are unaudited.
“Our quarterly results were a strong end to what was a record year on several measures,” said Steve Miller, President and Chief Executive Officer. “We achieved record net income and fully diluted EPS for 2021, supported by record revenue with net interest income up 42% for the year. Performance metrics for the year were highlighted by a return on average common equity (“ROAE”) of 26.46%, and a return on average assets (“ROAA”) of 2.06%, with an enviable efficiency ratio of 38.32% and a net interest margin (“NIM”) of 4.24%.” ROAE was 25.15%, ROAA was 2.00% and NIM was 4.16% for the fourth quarter of 2021.
“The Bank’s performance in 2021 was exceptional with loan growth accelerating in the fourth quarter, all while maintaining our consistent and disciplined underwriting standards. What is most impressive is our loan team’s success in replacing our SBA-PPP loans that received forgiveness from the SBA with new loans,” said Miller. “Total deposits also increased 29% at year-end as we continue to establish strong and meaningful client relationships. Credit quality remains sound with nonperforming assets declining from the preceding quarter, and there was no provision for loan losses booked in the fourth quarter of 2021.” Nonperforming assets to total assets were 0.27%, at December 31, 2021, compared to 0.30% from the preceding quarter.
“The successes of 2021 were a direct result of the outstanding dedication and effort of our employees. I want to thank our amazing team who work tirelessly to be our customers’ most trusted partner. We are operating from a position of strength as we enter 2022, and we will continue to work every day to create value for our investors, our customers, our communities and our employees.”
Fourth quarter 2021 Highlights: As of, or for the quarter ended December 31, 2021, compared to the quarter ended December 31, 2020:
- Pre-tax, pre-provision income increased 69% to $7.48 million.
- Net income grew 66% to $5.41 million, or $1.74 per diluted share.
- Return on average equity of 25.15%.
- Return on average assets of 2.00%.
- Gross revenue (net interest income, before the provision for loan losses, plus non-interest income) increased by 26% to $12.70 million.
- Total assets grew 24% to $1.08 billion.
- Net loans increased 17% to $713.49 million.
- Total deposits increased 29% to $936.55 million.
- Shareholder equity increased 30% to $89.294 million.
- Book value increased 29% to $29.08 per share.
“Our new bank-wide loan origination system, which we initiated and announced in the third quarter of 2021, will be fully implemented during the first quarter of 2022. This system will enable the Bank to have a fully digital process for all of our lending teams,” added Miller. “We will leverage the efficiencies gained to help further scale our lending capabilities. In addition, we continue to work with our API partners to develop process improvements that will impact key strategic areas like customer onboarding and payments.”
Results of Operations
Gross revenue, consisting of net interest income and non-interest income, increased 26% to $12.70 million for the fourth quarter of 2021, compared to $10.07 million for the fourth quarter a year ago, and was up by 5% from $12.06 million for the third quarter of 2021. For the full year of 2021, operating revenue increased 41% to $48.81 million, compared to $34.52 million for 2020.
Net interest income, before the provision for loan losses, increased 31% to $10.42 million for the fourth quarter of 2021, compared to $7.97 million for the fourth quarter a year ago, and increased 7% from $9.77 million for the third quarter of 2021. For the full year of 2021, net interest income, before the provision for loan losses, increased 42% to $38.84 million from $27.44 million for 2020. Quarterly 2021 net interest income was impacted by interest expense of $464,000 on sub-debt issued in November 2020. Interest expense related to sub-debt was $1.39 million for the year ended December 31, 2021, compared to $295,000 interest expense on sub-debt in 2020. “The exceptional growth in net interest income for both the fourth quarter of 2021, and for the full year of 2021, was again a result of a growing loan portfolio and garnering higher yields from our investment portfolio,” said Steve Canfield, Chief Financial Officer.
The Bank’s net interest margin (“NIM”), which excludes interest expense on holding company sub-debt, expanded 21 basis points to 4.16% for the fourth quarter of 2021, from 3.95% for the fourth quarter of 2020, and improved by two-basis points from 4.14% for the preceding quarter. For the full year 2021, the NIM expanded 23 basis points to 4.24% compared to 4.01% for 2020. The expansion in the NIM in the fourth quarter and for the full year of 2021 was primarily due to the low cost to fund earnings assets and changes in the mix of earning assets, as well as additional interest and fee income from PPP loans.
The yield on earning assets was 4.25% for the fourth quarter of 2021, compared to 4.06% for the fourth quarter a year ago, and 4.23% on a linked quarter basis. The cost to fund earning assets remained low at 0.08% for the third and fourth quarter of 2021, compared to 0.11% for the fourth quarter of 2020. For the full year of 2021, the yield on earning assets was 4.34% compared to 4.15% for 2020. The cost to fund earning assets declined 33% to 0.10% for the full year of 2021, compared to 0.14% for 2020.
Total non-interest income was $2.28 million for fourth quarter of 2021, compared to $2.10 million for the fourth quarter of 2020, and $2.29 million for the preceding quarter. The slight decline in non-interest income on a linked quarter basis was primarily due to fewer loan sales which resulted in lower gain on sale of loans. For the full year of 2021, non-interest income increased 41% to $9.97 million compared to $7.07 million for 2020. The growth in non-interest income for the full year 2021, was primarily due to increased sales of SBA and multi-family loans resulting in greater gain on sale of loans, and secondarily due to increased deposit fee income.
“Most of our sponsored ISO partners are now generating revenue above their monthly minimums,” said Miller. “The increased volume from our partners during the latter part of 2021, provided momentum for our fee income as we come into 2022. Fourth quarter 20211 revenue was up $272,000, or 32%, compared to the prior quarter, which sets a high bar for the run rate.”
“Maximizing the payment ecosystem is a core strategy for the Bank going forward,” continued Miller. “During the fourth quarter, our payments team successfully implemented a direct relationship with a major payment processor, which enables the bank to become its own ISO. Many acquiring banks have their own ISO, and we feel this will enable us to better maximize some of our current merchant relationships from a revenue and risk management perspective. Controlling our own ISO will also allow us to work directly with various fintech payment platforms or smaller ISO partners in strategic verticals.”
| Merchant ISO Processing Volume 2021 ($ in thousands) | |||||||||
| ISOs | 1Q Volume | 2Q Volume | 3Q Volume | 4Q Volume | Start Date | ||||
| 1 | $ | 282,258 | $ | 324,996 | $ | 293,220 | $ | 232,303 | |
| 2 | 290,376 | 404,895 | 349,143 | 335,557 | |||||
| 3 | 8,303 | 10,824 | 20,362 | 25,891 | |||||
| 4 | 0 | 9,270 | 41,004 | 133,946 | |||||
| 5 | 0 | 62 | 4,949 | 29,091 | |||||
| 6 | 0 | 130 | 5,379 | 44,378 | |||||
| 7 | 0 | 0 | 0 | 126,224 | 7/19/2021 | ||||
| 8 | 0 | 0 | 0 | 32,196 | 12/15/2021 | ||||
| 9 | 0 | 0 | 0 | 0 | 1/22/2022 | ||||
| 10 | 0 | 0 | 0 | 0 | 1/22/2022 | ||||
| Total Volume | $ | 580,938 | $ | 750,176 | $ | 714,057 | $ | 959,586 | |
“We sold $3.37 million of loans during the fourth quarter realizing $413,000 in gain on sale of loans, which favorably impacted non-interest income, but less so than the linked quarter and fourth quarter of 2020. We use the option of holding loans from time to time, as we manage liquidity and augment our earnings,” said Canfield. “Deposit fee income was also substantially higher from a year ago, which added to our non-interest income.”
Total deposit fee income increased 111%, or $243,000, to $462,000 for the fourth quarter of 2021, compared to $219,000 for the fourth quarter of 2020, and grew 8%, or $35,000, from $427,000 on a linked quarter basis. For the full year 2021, total deposit fee income increased 147% to $1.57 million, compared to $637,000 for 2020. Debit/credit card interchange income grew 51% from the fourth quarter a year ago and remained relatively flat from the third quarter of 2021. In fourth quarter of 2021, gain on sale of loans declined 30% over the fourth quarter a year earlier and fell 32% on a linked quarter basis. For the full year 2021, non-interest income increased 41% to $9.97 million compared to $7.07 million in 2020.
Non-interest expense for the fourth quarter of 2021 was $5.22 million, an increase of 21% compared to $4.30 million for the fourth quarter of 2020, and an increase of 17% from $4.45 million for the third quarter of 2021. For the full year 2021, non-interest expense increased 20% to $18.59 million compared to $15.51 million for 2020. Compensation and benefits expense is the largest non-interest expense component representing 62% of non-interest expense. In 2021 compensation and benefits expense increased to $11.52 million in 2021, compared to $9.70 million in 2020, an increase of 18.8%. The increase was primarily a result of increases in headcount growing to 77.5 full time equivalent, at December 31, 2021, from 58 full time equivalent employees at December 31, 2020 compared to Occupancy and equipment expense represents 4% of non-interest expense and was little changed year over year at $827,000 in 2021 compared to $823,000 in 2020. Other operating expense represents the remaining 34% of non-interest expense and increased 25% in 2021 to $6.25 million from $4.99 million in 2020. Increases in data processing expense, software licenses and subscriptions, loan origination expense and recruitment expenses were the primary drivers of the increase.
Reflective of a high-performing franchise, the efficiency ratio was 41.09% for the fourth quarter of 2021, compared to 42.70% for the fourth quarter a year ago, and 36.87% for the third quarter of 2021. For the full year 2021, the efficiency ratio improved to 38.32% from 45.01% for 2020.
Balance Sheet Review
Total assets increased 24% to $1.08 billion at December 31, 2021, from $871.35 million at December 31, 2020, and grew 6% from $1.02 billion million at September 30, 2021.
The total portfolio of loans increased $105.49 million, or 17%, to $726.25 million at December 31, 2021 from $620.77 million at December 31, 2020, and grew $25.94 million, or 4%, from $700.32 million on a linked quarter basis. Total loans at December 31, 2021 included $52.59 million of SBA-PPP loans, a decrease of 67% from the fourth quarter a year ago and down 38% from the preceding quarter. “We sold approximately $3.37 million in SBA loans during the fourth quarter, and forgiven PPP loans paying off during the quarter totaled $31.69 million.”
The commercial and industrial (C&I) portfolio increased 7% to $185.16 million, at December 31, 2021, from $172.62 million recorded a year earlier. C&I loans represented 25% of total loans at December 31, 2021. Commercial real estate loans increased 69% to $382.02 million at year end compared to year end 2020, and increased 15% on a linked quarter basis, representing 53% of total loans at December 31, 2021. “The CRE portfolio includes approximately $128.88 million in multi-family loans originated by our So Cal team that we may consider selling at some point in the future,” commented Canfield.
Agriculture loans, representing 8% of the loan portfolio, at December 31, 2021, increased 74% to $57.35 million from a year ago and grew 23% from September 30, 2021. Real estate construction and land development loans totaled $31.92 million, or 4% of loans, while residential RE 1-4 family loans totaled $17.15 million, or 2% of loans. SBA-PPP loans represented 7% of the portfolio and there were $934,000 in unamortized PPP fees capitalized on the balance sheet at quarter end. At December 31, 2021, the SBA, USDA, or other government agencies, guaranteed loans totaled $131.99 million, or 18% of the loan portfolio.
The investment portfolio increased 31%, or $69.16 million, to $291.97 million at December 31, 2021, from $222.81 million at December 31, 2020, and increased 8%, or $22.73 million, from $269.24 million at September 30, 2021. “We continue to use the investment portfolio for liquidity purposes, to balance our overall asset/liability position, as well as for earnings. The growth has been primarily spread over a mix of mortgage backed and municipal securities, both tax exempt and taxable, treasury securities and some other domestic debt,” stated Canfield.
Total deposits increased 29% to $936.55 million at December 31, 2021, compared to $726.25 million from a year earlier, and grew 5% from $893.55 million at September 30, 2021. Noninterest-bearing demand deposits increased 33% to $594.04 million at December 31, 2021, compared to $446.92 million at December 31, 2020, and increased 7% from $554.58 million at September 30, 2021. Noninterest-bearing demand deposits represented over 63% of total deposits at December 31, 2021. Borrowed funds, excluding sub-debt, were zero at December 31, 2021 and September 30, 2021, compared to $31 million from a year earlier.
Shareholders’ equity increased 30% to $89.29 million at December 31, 2021, compared to $68.55 million a year ago, and grew 6% from $84.24 million at September 30, 2021. Book value per common share increased 29% to $29.08 at December 31, 2021, compared to $22.56 at December 31, 2020, and grew by 6% compared to $27.42 at September 30, 2021.
We have a strong capital base to support our continued growth, which will allow us pursue further opportunities as they might arise,” added Canfield. Tier-1 capital at the Bank was $125.81 million at quarter end, or 11.7% of assets.
Asset Quality
Nonperforming assets were $2.93 million, or 0.27% of total assets, at December 31, 2021, compared to $1.69 million, or 0.19% of total assets at December 31, 2020, and $3.02 million, or 0.20% of total assets at September 30, 2021. Included in nonperforming assets were $828,000 of restructured loans that were performing under the terms of their agreement(s) at December 31, 2021, compared to $430,000 performing restructured loans at December 30, 2020. There were no performing restructured loans in the preceding quarter. The nonperforming loans consisted of loans that were proactively placed on nonaccrual and are not COVID related.
Past due loans 30-60 days totaled $3.83 million at December 31, 2021, compared to $1.02 million at December 31, 2020, and $934,000 at September 30, 2021. Past due loans from 60-90 days were $254,000 at December 31, 2021, compared to $10,000 a year earlier. There were no past due loans in the 60-90 day category in the preceding quarter. Past due loans 90+ days at quarter end totaled $10,000, compared to no past due loans 90+ days from a year ago and $1.56 million at September 30, 2021. All past due loans at December 31, 2021 were purchased government guaranteed loans that the bank is ultimately guaranteed full payment of principal and interest.
There was no provision for loan losses for the fourth quarter of 2021, compared to $1.35 million recorded in the fourth quarter of 2020 and $400,000 booked in the linked quarter. For the full year 2021, the provision for loan losses was $2.0 million and the total reserve for loan losses was $9.79 million December 31, 2021. “Although we expect to continue benefitting from an improving economy, and from the anticipated rising interest rates in 2022, we continue to closely monitor credit quality,” said Miller. Net charge-offs for the year 2021 totaled $64,000.
The ratio of allowance for loan losses to total loans was 1.35% at December 31, 2021, compared to 1.26% a year earlier and 1.40% at September 30, 2021. “A large portion of our portfolio consists of loans guaranteed by the U.S. Government. This group of loans consists of fully guaranteed loans the Company has purchased, the PPP loans, as well as organic SBA and USDA loans the Bank has originated. When the effect of these guarantees is considered relative to the loan portfolio, the ratio of allowance for loan losses to the total, non-guaranteed, loan portfolio was 1.65%, as of December 31, 2021,” added Miller.
About Communities First Financial Corporation
Communities First Financial Corporation, a bank holding company established in 2014, is the parent company of Fresno First Bank, founded in 2005 in Fresno, California. Fresno First Bank is a leading SBA Lender in California’s Central Valley and has expanded into Southern California. The Bank is also a direct acquiring bank with VISA and MasterCard and processes payments for merchants across the country directly and through partners. Communities First Financial Corp . ranked third in the nation against its peers in the Best Community Banks Category (below $5 billion in assets) and third in the Best Growth Strategy selected from the top 50 banks in the study, reported by Bank Director. In March 2021, S&P Global ranked the Bank the #20 best performing community bank under $3 billion in assets for 2020, and #1 in California. Named to the 2019 OTCQX Best 50 and ranked one of the top performing OTCQX companies in the country, based on total return and growth in average daily dollar volume for 2018. The Bank was named to the Inc. 5000 Fastest Growing Companies list in 2017 and to Forbes Best 25 Small Businesses in America for 2016. Additional information is available from the Company’s website at www.fresnofirstbank.com or by calling 559-439-0200.
Forward Looking Statements
This earnings release may contain forward-looking statements. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. The forward-looking statements are based on managements’ expectations and are subject to a number of risks and uncertainties. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include, without limitation, our borrowers’ actual payment performance as loan deferrals related to the COVID-19 pandemic expire, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, including the potential adverse impact of loan modifications and payment deferrals implemented consistent with recent regulatory guidance, the Company’s ability to effectively execute its business plans; changes in general economic and financial market conditions; changes in interest rates; changes in the competitive environment; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; losses, customer bankruptcy, claims and assessments; changes in banking regulations or other regulatory or legislative requirements affecting the Company’s business; international developments; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies. The Company undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events. The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
| SELECT FINANCIAL INFORMATION AND RATIOS (unaudited) | For the Quarter Ended: | Percentage Change From: | Year to Date as of: | |||||||||||||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | Dec. 31, 2020 | Sept. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Percent Change | |||||||||||||||||
| BALANCE SHEET DATA - PERIOD END BALANCES: | ||||||||||||||||||||||||
| Total assets | $ | 1,080,103 | $ | 1,023,299 | $ | 871,347 | 6 | % | 24 | % | ||||||||||||||
| Total Loans | 726,253 | 700,318 | 620,766 | 4 | % | 17 | % | |||||||||||||||||
| Investment securities | 291,969 | 269,236 | 222,808 | 8 | % | 31 | % | |||||||||||||||||
| Total deposits | 936,549 | 893,249 | 726,254 | 5 | % | 29 | % | |||||||||||||||||
| Shareholders equity, net | $ | 89,292 | $ | 84,243 | $ | 68,546 | 6 | % | 30 | % | ||||||||||||||
| SELECT INCOME STATEMENT DATA: | ||||||||||||||||||||||||
| Gross revenue | $ | 12,697 | $ | 12,056 | $ | 10,069 | 5 | % | 26 | % | $ | 48,808 | $ | 34,517 | 41 | % | ||||||||
| Operating expense | 5,216 | 4,446 | 4,299 | 17 | % | 21 | % | 18,591 | 15,508 | 20 | % | |||||||||||||
| Pre-tax, pre-provision income | 7,481 | 7,610 | 5,770 | -2 | % | 30 | % | 30,217 | 19,009 | 59 | % | |||||||||||||
| Net income after tax | $ | 5,405 | $ | 5,220 | $ | 3,253 | 4 | % | 66 | % | $ | 20,526 | $ | 11,513 | 78 | % | ||||||||
| SHARE DATA: | ||||||||||||||||||||||||
| Basic earnings per share | $ | 1.76 | $ | 1.70 | $ | 1.07 | 4 | % | 64 | % | $ | 6.69 | $ | 3.84 | 74 | % | ||||||||
| Fully diluted earnings per share | $ | 1.74 | $ | 1.68 | $ | 1.07 | 4 | % | 62 | % | $ | 6.62 | $ | 3.79 | 75 | % | ||||||||
| Book value per common share | $ | 29.08 | $ | 27.42 | $ | 22.56 | 6 | % | 29 | % | ||||||||||||||
| Common shares outstanding | 3,070,307 | 3,071,957 | 3,038,743 | -0 | % | 1 | % | |||||||||||||||||
| Fully diluted shares | 3,102,524 | 3,102,925 | 3,034,214 | -0 | % | 2 | % | |||||||||||||||||
| CFST - Stock price | $ | 57.00 | $ | 47.00 | $ | 31.01 | 21 | % | 84 | % | ||||||||||||||
| RATIOS: | ||||||||||||||||||||||||
| Return on average assets | 2.00% | 2.04% | 1.50% | -2 | % | 33 | % | 2.06% | 1.60% | 29 | % | |||||||||||||
| Return on average equity | 25.15% | 25.52% | 19.73% | -1 | % | 27 | % | 26.46% | 19.29% | 37 | % | |||||||||||||
| Efficiency ratio | 41.09% | 36.87% | 42.70% | 11 | % | -4 | % | 38.32% | 45.01% | -15 | % | |||||||||||||
| Yield on earning assets | 4.25% | 4.23% | 4.06% | 1 | % | 5 | % | 4.34% | 4.15% | 5 | % | |||||||||||||
| Cost to fund earning assets | 0.08% | 0.08% | 0.11% | -4 | % | -26 | % | 0.10% | 0.14% | -33 | % | |||||||||||||
| Net Interest Margin | 4.16% | 4.14% | 3.95% | 1 | % | 5 | % | 4.24% | 4.01% | 6 | % | |||||||||||||
| Equity to assets | 8.27% | 8.23% | 7.87% | 0 | % | 5 | % | |||||||||||||||||
| Loan to deposits ratio | 77.55% | 78.40% | 85.48% | -1 | % | -9 | % | |||||||||||||||||
| Full time equivalent employees | 77.5 | 76.5 | 58.0 | 1 | % | 34 | % | |||||||||||||||||
| BALANCE SHEET DATA - AVERAGES: | ||||||||||||||||||||||||
| Total assets | $ | 1,074,440 | $ | 1,017,060 | $ | 862,478 | 6 | % | 25 | % | $ | 996,298 | $ | 718,199 | 39 | % | ||||||||
| Total loans | 707,695 | 700,818 | 595,544 | 1 | % | 19 | % | 690,463 | 513,925 | 34 | % | |||||||||||||
| Investment securities | 284,958 | 255,152 | 198,824 | 12 | % | 43 | % | 251,296 | 148,507 | 69 | % | |||||||||||||
| Deposits | 941,227 | 889,973 | 758,302 | 6 | % | 24 | % | 869,267 | 638,094 | 36 | % | |||||||||||||
| Shareholders equity, net | $ | 85,248 | $ | 81,155 | $ | 65,570 | 5 | % | 30 | % | $ | 77,581 | $ | 59,678 | 30 | % | ||||||||
| ASSET QUALITY: | ||||||||||||||||||||||||
| Total delinquent accruing loans | $ | 4,096 | $ | 2,492 | $ | 1,031 | 64 | % | 297 | % | ||||||||||||||
| Nonperforming assets | $ | 2,930 | $ | 3,072 | $ | 1,689 | -5 | % | 73 | % | ||||||||||||||
| Non Accrual / Total Loans | .40% | .44% | .27% | -8 | % | 48 | % | |||||||||||||||||
| Nonperforming assets to total assets | .27% | .30% | .19% | -10 | % | 40 | % | |||||||||||||||||
| LLR / Total loans | 1.35% | 1.40% | 1.26% | -4 | % | 7 | % | |||||||||||||||||
| STATEMENT OF INCOME ($ in thousands) | For the Quarter Ended: | Percentage Change From: | For the Year Ended | |||||||||||||||||||||
| (unaudited) | Dec. 31, 2021 | Sept. 30, 2021 | Dec. 31, 2020 | Sept. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Percent Change | ||||||||||||||||
| Interest Income | ||||||||||||||||||||||||
| Loan interest income | $ | 9,103 | $ | 8,666 | $ | 7,098 | 5 | % | 28 | % | $ | 34,527 | $ | 24,662 | 40 | % | ||||||||
| Investment income | 1,853 | 1,702 | 1,276 | 9 | % | 45 | % | 6,688 | 3,624 | 85 | % | |||||||||||||
| Int. on fed funds & CDs in other banks | 30 | 26 | 81 | 15 | % | -63 | % | 125 | 330 | -62 | % | |||||||||||||
| Dividends from non-marketable equity | 110 | 41 | 34 | 168 | % | 224 | % | 218 | 119 | 83 | % | |||||||||||||
| Interest income | 11,096 | 10,435 | 8,489 | 6 | % | 31 | % | 41,558 | 28,735 | 45 | % | |||||||||||||
| Int. on deposits | 213 | 208 | 229 | 2 | % | -7 | % | 858 | 963 | -11 | % | |||||||||||||
| Int. on short-term borrowings | 0 | 0 | 0 | 0 | % | 0 | % | 4 | 33 | -88 | % | |||||||||||||
| Int. on long-term debt | 464 | 464 | 295 | 0 | % | 57 | % | 1,858 | 295 | 530 | % | |||||||||||||
| Interest expense | 677 | 672 | 524 | 1 | % | 29 | % | 2,720 | 1,291 | 111 | % | |||||||||||||
| Net interest income | 10,419 | 9,763 | 7,965 | 7 | % | 31 | % | 38,838 | 27,444 | 42 | % | |||||||||||||
| Provision for loan losses | 0 | 400 | 1,350 | -100 | % | -100 | % | 2,000 | 3,300 | -39 | % | |||||||||||||
| Net interest income after provision | 10,419 | 9,363 | 6,615 | 11 | % | 58 | % | 36,838 | 24,144 | 53 | % | |||||||||||||
| Non-Interest Income: | ||||||||||||||||||||||||
| Total deposit fee income | 462 | 427 | 219 | 8 | % | 111 | % | 1,573 | 637 | 147 | % | |||||||||||||
| Debit / credit card interchange income | 136 | 138 | 90 | -1 | % | 51 | % | 506 | 302 | 68 | % | |||||||||||||
| Merchant services income | 1,111 | 839 | 1,009 | 32 | % | 10 | % | 4,000 | 3,959 | 1 | % | |||||||||||||
| Gain on sale of loans | 413 | 672 | 587 | -39 | % | -30 | % | 2,984 | 1,490 | 100 | % | |||||||||||||
| Other operating income | 156 | 217 | 199 | -28 | % | -22 | % | 907 | 685 | 32 | % | |||||||||||||
| Non-interest income | 2,278 | 2,293 | 2,104 | -1 | % | 8 | % | 9,970 | 7,073 | 41 | % | |||||||||||||
| Non-Interest Expense: | ||||||||||||||||||||||||
| Salaries & employee benefits | 3,265 | 2,847 | 2,928 | 15 | % | 12 | % | 11,516 | 9,696 | 19 | % | |||||||||||||
| Occupancy expense | 202 | 212 | 193 | -5 | % | 5 | % | 827 | 823 | 0 | % | |||||||||||||
| Other operating expense | 1,749 | 1,387 | 1,178 | 26 | % | 48 | % | 6,248 | 4,989 | 25 | % | |||||||||||||
| Non-interest expense | 5,216 | 4,446 | 4,299 | 17 | % | 21 | % | 18,591 | 15,508 | 20 | % | |||||||||||||
| Net income before tax | 7,481 | 7,210 | 4,420 | 4 | % | 69 | % | 28,217 | 15,709 | 80 | % | |||||||||||||
| Tax provision | 2,076 | 1,990 | 1,167 | 4 | % | 78 | % | 7,691 | 4,196 | 83 | % | |||||||||||||
| Net income after tax | $ | 5,405 | $ | 5,220 | $ | 3,253 | 4 | % | 66 | % | $ | 20,526 | $ | 11,513 | 78 | % | ||||||||
| BALANCE SHEET ($ in thousands ) | End of Period: | Percentage Change From: | ||||||||||||||
| (unaudited) | Dec. 31, 2021 | Sept. 30, 2021 | Dec. 31, 2020 | Sept. 30, 2021 | Dec. 31, 2020 | |||||||||||
| ASSETS | ||||||||||||||||
| Cash and due from banks | $ | 13,418 | $ | 9,775 | $ | 9,788 | 37 | % | 37 | % | ||||||
| Fed funds sold and deposits in banks | 23,362 | 29,499 | 618 | -21 | % | 3680 | % | |||||||||
| CDs in other banks | 1,490 | 1,739 | 9,175 | -14 | % | -84 | % | |||||||||
| Investment securities | 291,969 | 269,236 | 222,808 | 8 | % | 31 | % | |||||||||
| Loans held for sale | 3,811 | 3,835 | 0 | -1 | % | 0 | % | |||||||||
| Portfolio loans outstanding: | ||||||||||||||||
| RE constr & land development | 31,916 | 28,217 | 15,754 | 13 | % | 103 | % | |||||||||
| Residential RE 1-4 Family | 17,150 | 17,826 | 13,507 | -4 | % | 27 | % | |||||||||
| Commercial Real Estate | 382,023 | 333,595 | 226,246 | 15 | % | 69 | % | |||||||||
| Agriculture | 57,348 | 46,488 | 33,026 | 23 | % | 74 | % | |||||||||
| Commercial and Industrial | 185,155 | 189,856 | 172,624 | -2 | % | 7 | % | |||||||||
| SBA PPP Loans | 52,594 | 84,282 | 159,491 | -38 | % | -67 | % | |||||||||
| Consumer and Other | 67 | 54 | 118 | 24 | % | -43 | % | |||||||||
| Total Portfolio Loans | 726,253 | 700,318 | 620,766 | 4 | % | 17 | % | |||||||||
| Deferred fees & discounts | (2,981 | ) | (3,868 | ) | (3,728 | ) | -23 | % | -20 | % | ||||||
| Allowance for loan losses | (9,785 | ) | (9,785 | ) | (7,848 | ) | 0 | % | 25 | % | ||||||
| Loans, net | 713,487 | 686,665 | 609,190 | 4 | % | 17 | % | |||||||||
| Non-marketable equity investments | 4,132 | 4,071 | 3,059 | 1 | % | 35 | % | |||||||||
| Cash value of life insurance | 8,397 | 8,349 | 8,198 | 1 | % | 2 | % | |||||||||
| Accrued interest and other assets | 20,037 | 10,130 | 8,511 | 98 | % | 135 | % | |||||||||
| Total assets | $ | 1,080,103 | $ | 1,023,299 | $ | 871,347 | 6 | % | 24 | % | ||||||
| LIABILITIES AND EQUITY | ||||||||||||||||
| Non-interest bearing deposits | $ | 594,044 | $ | 554,579 | $ | 446,920 | 7 | % | 33 | % | ||||||
| Interest checking | 26,277 | 31,915 | 19,543 | -18 | % | 34 | % | |||||||||
| Savings | 81,324 | 85,811 | 56,949 | -5 | % | 43 | % | |||||||||
| Money market | 168,423 | 152,542 | 131,904 | 10 | % | 28 | % | |||||||||
| Certificates of deposits | 66,481 | 68,402 | 70,938 | -3 | % | -6 | % | |||||||||
| Total deposits | 936,549 | 893,249 | 726,254 | 5 | % | 29 | % | |||||||||
| Short-term borrowings | 0 | 0 | 31,000 | 0 | % | -100 | % | |||||||||
| Long-term debt | 39,283 | 39,244 | 39,126 | 0 | % | 0 | % | |||||||||
| Other liabilities | 14,979 | 6,563 | 6,421 | 128 | % | 133 | % | |||||||||
| Total liabilities | 990,811 | 939,056 | 802,801 | 6 | % | 23 | % | |||||||||
| Common stock & paid in capital | 32,486 | 32,245 | 30,997 | 1 | % | 5 | % | |||||||||
| Retained earnings | 53,948 | 48,545 | 33,421 | 11 | % | 61 | % | |||||||||
| Total equity | 86,434 | 80,790 | 64,418 | 7 | % | 34 | % | |||||||||
| Accumulated other comprehensive income | 2,858 | 3,453 | 4,128 | -17 | % | -31 | % | |||||||||
| Shareholders equity, net | 89,292 | 84,243 | 68,546 | 6 | % | 30 | % | |||||||||
| Total Liabilities and shareholders' equity | $ | 1,080,103 | $ | 1,023,299 | $ | 871,347 | 6 | % | 24 | % | ||||||
| ASSET QUALITY ($ in thousands) | Period Ended: | |||||||||
| (unaudited) | Dec. 31, 2021 | Sept. 30, 2021 | Dec. 31, 2020 | |||||||
| Delinquent accruing loans 30-60 days | $ | 3,832 | $ | 934 | $ | 1,021 | ||||
| Delinquent accruing loans 60-90 days | $ | 254 | 0.0 | $ | 10 | |||||
| Delinquent accruing loans 90+ days | $ | 10 | $ | 1,558 | 0.0 | |||||
| Total delinquent accruing loans | $ | 4,096 | $ | 2,492 | $ | 1,031 | ||||
| Loans on non accrual | $ | 2,930 | $ | 3,072 | $ | 1,689 | ||||
| Other real estate owned | 0.0 | 0.0 | 0.0 | |||||||
| Nonperforming assets | $ | 2,930 | $ | 3,072 | $ | 1,689 | ||||
| Performing restructured loans | $ | 828 | 0.0 | $ | 430 | |||||
| Delq 30-60 / Total Loans | .53% | .13% | .16% | |||||||
| Delq 60-90 / Total Loans | .04% | .00% | .00% | |||||||
| Delq 90+ / Total Loans | .00% | .22% | .00% | |||||||
| Delinquent Loans / Total Loans | .56% | .36% | .17% | |||||||
| Non Accrual / Total Loans | .40% | .44% | .27% | |||||||
| Nonperforming assets to total assets | .27% | .30% | .19% | |||||||
| Year-to-date charge-off activity | ||||||||||
| Charge-offs | $ | 64 | $ | 64 | $ | 40 | ||||
| Recoveries | 0.0 | 0.0 | $ | 47 | ||||||
| Net charge-offs | $ | 64 | $ | 64 | $ | (7 | ) | |||
| Annualized net loan losses (recoveries) to average loans | .01% | .01% | -.00% | |||||||
| LOAN LOSS RESERVE RATIOS: | ||||||||||
| Reserve for loan losses | $ | 9,785 | $ | 9,785 | $ | 7,848 | ||||
| Total loans | $ | 726,253 | $ | 700,317 | $ | 620,766 | ||||
| Purchased govt. guaranteed loans | $ | 41,497 | $ | 43,806 | $ | 46,567 | ||||
| Originated govt. guaranteed loans | $ | 90,493 | $ | 121,715 | $ | 200,083 | ||||
| LLR / Total loans | 1.35% | 1.40% | 1.26% | |||||||
| LLR / Loans less 100% govt. gte. loans (PPP and purchased) | 1.55% | 1.71% | 1.89% | |||||||
| LLR / Loans less all govt. guaranteed loans | 1.65% | 1.83% | 2.10% | |||||||
| LLR / Total assets | .91% | .96% | .90% | |||||||
| SELECT FINANCIAL TREND INFORMATION (unaudited) | For the Quarter Ended: | ||||||||||
| Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |||||||
| BALANCE SHEET DATA - PERIOD END BALANCES: | |||||||||||
| Total assets | $ | 1,080,103 | $ | 1,023,299 | $ | 988,481 | $ | 957,479 | $ | 871,347 | |
| Loans held for sale | 3,811 | 3,835 | 3,852 | 0 | 0 | ||||||
| Loans held for investment ex. PPP | 673,659 | 616,036 | 563,160 | 502,481 | 461,275 | ||||||
| PPP Loans | 52,594 | 84,282 | 140,317 | 189,485 | 159,491 | ||||||
| Investment securities | 291,969 | 269,236 | 251,618 | 233,433 | 222,808 | ||||||
| Non-interest bearing deposits | 594,044 | 554,579 | 527,259 | 511,497 | 446,920 | ||||||
| Interest bearing deposits | 342,505 | 338,670 | 337,288 | 324,812 | 279,334 | ||||||
| Total deposits | 936,549 | 893,249 | 864,547 | 836,309 | 726,254 | ||||||
| Short-term borrowings | 0 | 0 | 0 | 5,000 | 31,000 | ||||||
| Long-term debt | 39,283 | 39,244 | 39,204 | 39,165 | 39,126 | ||||||
| Total equity | 86,434 | 80,790 | 75,344 | 69,371 | 64,418 | ||||||
| Accumulated other comprehensive income | 2,858 | 3,453 | 3,415 | 1,544 | 4,128 | ||||||
| Shareholders equity, net | $ | 89,292 | $ | 84,243 | $ | 78,759 | $ | 70,915 | $ | 68,546 | |
| INCOME STATEMENT - QUARTERLY VALUES: | |||||||||||
| Interest income | $ | 11,096 | $ | 10,435 | $ | 10,095 | $ | 9,932 | $ | 8,489 | |
| Int. on dep. & short-term borrowings | 213 | 208 | 210 | 229 | 229 | ||||||
| Int. on long-term debt | 464 | 464 | 464 | 464 | 295 | ||||||
| Interest expense | 677 | 672 | 674 | 693 | 524 | ||||||
| Net interest income | 10,419 | 9,763 | 9,421 | 9,239 | 7,965 | ||||||
| Non-interest income | 2,278 | 2,293 | 3,621 | 1,778 | 2,104 | ||||||
| Gross revenue | 12,697 | 12,056 | 13,042 | 11,017 | 10,069 | ||||||
| Provision for loan losses | 0 | 400 | 750 | 850 | 1,350 | ||||||
| Non-interest expense | 5,216 | 4,446 | 4,484 | 4,445 | 4,299 | ||||||
| Net income before tax | 7,481 | 7,210 | 7,808 | 5,722 | 4,420 | ||||||
| Tax provision | 2,076 | 1,990 | 2,100 | 1,526 | 1,167 | ||||||
| Net income after tax | $ | 5,405 | $ | 5,220 | $ | 5,708 | $ | 4,196 | $ | 3,253 | |
| BALANCE SHEET DATA - QUARTERLY AVERAGES: | |||||||||||
| Total assets | $ | 1,074,440 | $ | 1,017,060 | $ | 980,937 | $ | 910,728 | $ | 862,478 | |
| Loans held for sale | 4,492 | 4,652 | 12,485 | 0 | 9,934 | ||||||
| Loans held for investment ex. PPP | 640,412 | 583,254 | 521,676 | 473,185 | 422,505 | ||||||
| PPP Loans | 67,283 | 117,564 | 177,065 | 180,709 | 173,039 | ||||||
| Investment securities | 284,958 | 255,152 | 239,475 | 224,899 | 198,824 | ||||||
| Non-interest bearing deposits | 593,190 | 555,860 | 502,819 | 467,690 | 463,311 | ||||||
| Interest bearing deposits | 348,036 | 334,113 | 351,378 | 322,087 | 294,991 | ||||||
| Total deposits | 941,227 | 889,973 | 854,198 | 789,777 | 758,302 | ||||||
| Short-term borrowings | 3 | 411 | 7,516 | 6,182 | 8,223 | ||||||
| Long-term debt | 39,265 | 39,225 | 39,186 | 39,147 | 25,121 | ||||||
| Total equity | 82,751 | 77,136 | 71,477 | 66,429 | 62,258 | ||||||
| Accumulated other comprehensive income | 2,497 | 4,019 | 2,394 | 3,414 | 3,311 | ||||||
| Shareholders equity, net | $ | 85,248 | $ | 81,155 | $ | 73,870 | $ | 69,843 | $ | 65,570 | |
| Contact: | Steve Miller – President & CEO |
| Steve Canfield – Executive Vice President & CFO | |
| (559) 439-0200 |
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