HOUSTON, April 26, 2018 (GLOBE NEWSWIRE) --

CBTX, Inc. (the “Company”) (NASDAQ:CBTX), the bank holding company for CommunityBank of Texas N.A., today announced net income of $9.1 million, or $0.37 per diluted share, for the quarter ended March 31, 2018, compared to $6.9 million, or $0.31 per diluted share, for the quarter ended March 31, 2017 and $2.0 million, or $0.08 per diluted share, for the quarter ended December 31, 2017.

Highlights

  • Loans increased $44.5 million during the first quarter of 2018, an 8% annualized growth rate for the quarter.

  • Net interest income increased $3.2 million or 12.4%, from the first of quarter 2017 to the first quarter of 2018, primarily due increased average loans and yields on loans.

  • Income tax expense decreased $893,000 from the first quarter 2017 to the first quarter of 2018 and $4.2 million from the fourth quarter of 2017 to the first quarter of 2018 due to the reduction of the federal tax rate from 35% to 21% and a fourth quarter 2017 charge of $3.9 million related to the Tax Cuts and Jobs Act (the "Tax Act").

Operating Results:

Net Interest Income

Net interest income was $29.0 million for the first quarter of 2018, compared to $25.8 million for the first quarter of 2017 and $28.2 million for the fourth quarter of 2017. The increase in net interest income in the first quarter of 2018 from the first quarter of 2017, was due to increased average loans and repayment of our note payable in the fourth quarter of 2017 and increased average yields on loans and federal funds sold. The increase in net interest income in the first quarter of 2018 from the fourth quarter of 2017 was due to increased average loans and average loan yields and the impact of the repayment of our note payable.

The yield on interest-earning assets was 4.49% for the first quarter of 2018, compared to 4.26% for the first quarter of 2017 and 4.29% for the fourth quarter of 2017.

The cost of interest-bearing liabilities, including borrowings, was 0.55% for the first quarter of 2018, compared to 0.57% for the first quarter of 2017 and 0.56% for the fourth quarter of 2017.

The net interest margin was 4.19% for the first quarter of 2018 compared to 3.93% for the first quarter of 2017 and 3.98% for the fourth quarter of 2017.

Provision (Recapture) for Loan Losses

Provision for loan loss was $865,000 for the first quarter of 2018, compared to $960,000 for the first quarter of 2017 and $1.1 million for the fourth quarter of 2017.

The allowance for loan losses was $25.3 million, or 1.08% of total loans, at March 31, 2018, compared to $25.9 million, or 1.17% of total loans, at March 31, 2017 and $24.8 million, or 1.07% of total loans, at December 31, 2017.

Noninterest Income

Noninterest income was $3.4 million for the first quarter of 2018, $3.4 million for the first quarter of 2017 and $3.1 million for the fourth quarter of 2017. Although noninterest income was flat between the first quarter 2018 and the first quarter 2017, there was a decrease in gains on sales of assets and an increase in bank-owned life insurance income from the first quarter of 2017 to the first quarter of 2018. The increase in noninterest income from the fourth quarter of 2017 to the first quarter of 2018 was primarily due to higher gains on sales of loans in the first quarter of 2018. 

Noninterest Expense

Noninterest expense increased $1.9 million during the first quarter of 2018 as compared to the first quarter of 2017 and decreased $1.7 million as compared to the fourth quarter of 2017.

The decrease in noninterest expense during the first quarter of 2018 compared to the fourth quarter of 2017 is due primarily to a $2.5 million charge for change of control payments to certain employees triggered by our initial public offering, which is reflected in salaries and employee benefits and increased professional and director fees in the fourth quarter of 2017. Excluding the $2.5 million charge for change of control payments, noninterest expense for the first quarter of 2018 increased $795,000 primarily due to increased salaries and employee benefits due to increases in salaries and incentive compensation and health insurance premiums, partially offset by lower professional and director fees.

The increase in noninterest expense in the first quarter of 2018 compared to the first quarter of 2017 is primarily due to increased salaries and employee benefits due to increases in salaries and incentive compensation, health insurance premiums and stock compensation expense.

Income Taxes

Income tax expense was $2.1 million for the first quarter of 2018, $3.0 million for the first quarter of 2017 and $6.3 million for the fourth quarter of 2017. During the fourth quarter of 2017, the Company recorded a deferred tax asset impairment charge of $3.9 million related to the recent Tax Act.

The effective tax rates were 19.0% for the first quarter of 2018, 30.7% for the first quarter of 2017 and 76.3% for the fourth quarter of 2017. The effective tax rate for the first quarter of 2018 reflects reduction of the federal tax rate from 35% to 21% in the recent Tax Act.

Balance Sheet Highlights:

Loans

Loans were $2.4 billion at March 31, 2018, $2.2 billion at March 31, 2017 and $2.3 billion at December 31, 2017.  The increases from the prior year and linked quarter are primarily due to organic growth.

Asset Quality

Nonperforming assets remain low relative to total assets at $6.1 million, or 0.20% of total assets, at March 31, 2018, $7.2 million, or 0.25% of total assets, at March 31, 2017 and $8.4 million, or 0.27% of total assets at December 31, 2017.

Nonperforming loans were $5.8 million, or 0.24% of total loans, at March 31, 2018, $6.1 million, or 0.27% of total loans, at March 31, 2017 and $7.6 million, or 0.33% of total loans, at December 31, 2017.

Annualized net charge-offs (recoveries) to average loans were 0.05% for the first quarter of 2018, 0.02% for the first quarter of 2017 and 0.00% for the fourth quarter of 2017.

Deposits and Borrowings

Total deposits were $2.6 billion at March 31, 2018, compared to $2.5 billion at March 31, 2017 and $2.6 billion at December 31, 2017.

Total borrowings (excluding junior subordinated debentures) were $861,000 at March 31, 2018, $29.0 million at March 31, 2017 and $1.5 million at December 31, 2017. The decrease in borrowings is due to scheduled payments and our fourth quarter repayment in full of the outstanding balance of our note payable. On December 13, 2017, we entered into a loan agreement providing for a $30 million revolving line of credit and from that date through March 31, 2018, we made no borrowings under that agreement.

Capital

At March 31, 2018, the Company remains well capitalized. Our ratio of total shareholders’ equity to total assets was 14.69% and our tangible equity to total tangible assets was 12.19% at March 31, 2018 and our ratio of total shareholders’ equity to total assets was 12.48% and our tangible equity to total tangible assets was 9.74% at March 31, 2017. Tangible equity to total tangible assets is a non‑GAAP financial measure. See the table captioned “Non‑GAAP to GAAP Reconciliation.”

In November 2017, we completed our initial public offering of our common stock issuing 2,760,000 common shares at $26.00 per share and net proceeds of $64.5 million, which is the primary cause of the increase in these ratios.

About CBTX, Inc.

CBTX, Inc. is the bank holding company for CommunityBank of Texas, N.A., a $3.1 billion asset bank, offering commercial banking solutions to local small and mid-sized businesses and professionals in Houston, Beaumont and surrounding communities in southeast Texas.  Visit www.communitybankoftx.com for more information.

Forward-Looking Statements

This release may contain certain forward-looking statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, current expectations, estimates and projections about the Company and its subsidiary. Forward-looking statements include information regarding the Company’s future financial performance, business and growth strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Further, certain factors that could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to whether the Company can: prudently manage and execute its growth strategy; manage risks associated with its acquisition and de novo branching strategy; maintain its asset quality; address the volatility and direction of market interest rates; continue to have access to debt and equity capital markets; and achieve its performance goals. The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (‘SEC”) and other reports and statements that the Company has filed with the SEC. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what its anticipates. Accordingly, you should not place undue reliance on any such forward looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict which will arise. In addition, the Company cannot assess the impact of each factor on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Copies of the SEC filings for the Company are available for download free of charge from www.communitybanktx.com under the Investor Relations tab.

CBTX, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)

                
Balance Sheet Data (at period end): 3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017
                
Loans, excluding loans held for sale $ 2,356,053  $ 2,311,544  $ 2,199,478  $ 2,192,443  $ 2,217,656 
Allowance for loan losses   (25,349)   (24,778)   (23,757)   (25,187)   (25,881)
Loans, net   2,330,704    2,286,766    2,175,721    2,167,256    2,191,775 
                
Cash and equivalents   279,915    326,199    348,578    307,173    272,355 
Debt securities   221,183    223,208    217,660    220,330    219,978 
Premises and equipment, net   53,135    53,607    54,129    56,609    55,986 
Goodwill   80,950    80,950    80,950    80,950    80,950 
Other intangible assets, net   6,521    6,770    7,031    7,298    7,513 
Repossessed real estate and other assets   295    705    1,136    1,435    1,179 
Loans held for sale   113    1,460    466    559    675 
Other assets   101,974    101,418    104,167    99,267    84,137 
Total Assets $ 3,074,790  $ 3,081,083  $ 2,989,838  $ 2,940,877  $ 2,914,548 
                
Noninterest-bearing deposits $ 1,120,521  $ 1,109,789  $ 1,051,755  $ 1,030,865  $ 993,839 
Interest-bearing deposits   1,479,181    1,493,183    1,502,872    1,485,919    1,504,606 
Total deposits   2,599,702    2,602,972    2,554,627    2,516,784    2,498,445 
                
Note payable   -    -    24,357    25,464    26,571 
Repurchase agreements   861    1,525    2,239    2,179    2,464 
Junior subordinated debt   6,726    6,726    6,726    6,726    6,726 
Other liabilities   15,930    23,646    20,768    17,760    16,699 
Total Liabilities   2,623,219    2,634,869    2,608,717    2,568,913    2,550,905 
                
Shareholders' Equity   451,571    446,214    381,121    371,964    363,643 
Total Liabilities and Shareholders' Equity $ 3,074,790  $ 3,081,083  $ 2,989,838  $ 2,940,877  $ 2,914,548 
                     

CBTX, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income (Unaudited)
(In thousands)

                
  For the Three Months Ended
  3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017
Interest Income               
Interest and fees on loans $ 28,462 $ 27,726  $ 27,129  $ 26,560  $ 25,953
Securities   1,436   1,357    1,334    1,353    1,303
Federal Funds and interest-bearing deposits   1,187   1,283    1,106    813    742
Total Interest Income   31,085   30,366    29,569    28,726    27,998
Interest Expense               
Deposits   1,948   1,993    1,964    1,857    1,838
Repurchase agreements   1   —    2    1    2
Note payable   4   122    269    264    251
Junior subordinated debt   93   86    83    79    74
Total Interest Expense   2,046   2,201    2,318    2,201    2,165
Net Interest Income   29,039   28,165    27,251    26,525    25,833
Provision (Recapture) for Loan Losses   865   1,050    (1,654)   (694)   960
Net Interest Income After Provision (Recapture) for Loan Losses   28,174   27,115    28,905    27,219    24,873
Noninterest Income               
Deposit account service charges   1,478   1,388    1,395    1,517    1,500
Net gain (loss) on sale of assets   130   (7)   828    339    364
Card interchange fees   927   941    803    877    832
Earnings on bank-owned life insurance   451   460    459    335    326
Other   375   362    601    458    426
Total Noninterest Income   3,361   3,144    4,086    3,526    3,448
Noninterest Expense               
Salaries and employee benefits   12,695   14,021    11,829    11,299    11,424
Net occupancy expense   2,265   2,346    2,221    2,351    2,233
Regulatory fees   545   487    458    621    610
Data processing   683   674    662    651    642
Printing, stationery and office   411   415    348    370    347
Amortization of intangibles   255   263    267    271    278
Professional and director fees   919   1,168    606    706    625
Correspondent bank and customer related transaction expenses   67   67    67    78    74
Loan processing costs   118   141    115    133    72
Advertising, marketing and business development   506   508    266    508    179
Repossessed real estate and other asset expense   57   66    340    85    118
Security and protection expense   302   300    331    352    372
Telephone and communications   386   344    311    307    354
Other expenses   1,075   1,189    1,196    1,127    1,099
Total Noninterest Expense   20,284   21,989    19,017    18,859    18,427
Net Income Before Income Tax Expense   11,251   8,270    13,974    11,886    9,894
Income Tax Expense   2,139   6,313    3,927    3,181    3,032
Net Income  $ 9,112 $ 1,957  $ 10,047  $ 8,705  $ 6,862
                   

CBTX, INC. AND SUBSIDIARY
Financial Highlights (Unaudited)
(In thousands, except per share data and percentages)

  For the Three Months Ended  
  3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 
Profitability:                
Net income $ 9,112 $ 1,957 $ 10,047 $ 8,705 $ 6,862 
Basic earnings per share $ 0.37 $ 0.08 $ 0.46 $ 0.39 $ 0.31 
Diluted earnings per share $ 0.37 $ 0.08 $ 0.45 $ 0.39 $ 0.31 
                 
Return on average assets (1)   1.20%  0.25%  1.34%  1.20%  0.95%
Return on average shareholders' equity (1)   8.20%  1.83%  10.54%  9.46%  7.73%
Net interest margin- tax equivalent (1)   4.23%  4.06%  4.07%  4.08%  4.02%
Efficiency ratio (2)   62.60%  70.23%  60.69%  62.76%  62.93%
                 
Liquidity and Capital Ratios:                
Total shareholders' equity to total assets   14.69%  14.48%  12.75%  12.65%  12.48%
Tangible equity to tangible assets (3)   12.19%  11.98%  10.10%  9.95%  9.74%
Common equity tier 1 capital ratio   14.12%  14.19%  12.23%  12.00%  11.32%
Tier 1 leverage ratio   12.58%  12.30%  10.48%  10.39%  10.10%
Tier 1 risk-based capital ratio   14.37%  14.44%  12.49%  12.26%  11.58%
Total risk-based capital ratio   15.35%  15.42%  13.48%  13.33%  12.64%
                 
Other Data:                
Weighted average common shares outstanding- Basic   24,833   23,629   22,063   22,062   22,062 
Weighted average common shares outstanding- Diluted   24,954   23,742   22,138   22,148   22,162 
Common shares outstanding at period end   24,833   24,833   22,063   22,063   22,062 
Dividends per share $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.05 
Book value per share $ 18.18 $ 17.97 $ 17.27 $ 16.86 $ 16.48 
Tangible book value per share (3) $ 14.66 $ 14.44 $ 13.29 $ 12.86 $ 12.47 
Employees - full-time equivalents   477   462   464   472   479 
                 

 

(1) Quarterly ratios are annualized.
(2) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.
(3) Non‑GAAP financial measure. See the table captioned “Non‑GAAP to GAAP Reconciliation.”
   

CBTX, INC. AND SUBSIDIARY
Net Interest Margin (Unaudited)
(In thousands, except percentages)

  For the Three Months Ended 
  3/31/2018 12/31/2017 3/31/2017 
     Interest      Interest      Interest   
  Average Earned/ Average Average Earned/ Average Average Earned/ Average 
  Outstanding Interest Yield/ Outstanding Interest Yield/ Outstanding Interest Yield/ 
  Balance Paid Rate (1) Balance Paid Rate (1) Balance Paid Rate (1) 
Assets                         
Interest-earnings assets:                         
Total loans (2) $ 2,319,463  $ 28,462  4.98$ 2,252,735  $ 27,726  4.88$ 2,178,626  $ 25,953  4.83%
Debt securities   223,730    1,436  2.60  222,602    1,357  2.42  217,086    1,303  2.43%
Federal funds sold and other interest-earning assets   252,722    994  1.60  317,484    1,093  1.37  257,152    549  0.87%
Nonmarketable equity securities   14,701    193  5.32  14,698    190  5.13  14,685    193  5.33%
Total interest-earning assets   2,810,616  $ 31,085  4.49  2,807,519  $ 30,366  4.29  2,667,549  $ 27,998  4.26%
Allowance for loan losses   (24,866)        (24,127)        (25,419)      
Noninterest-earnings assets   287,099         296,108         273,437       
Total assets $ 3,072,849       $ 3,079,500       $ 2,915,567       
Liabilities and Shareholders’ Equity                         
Interest-bearing liabilities:                         
Interest-bearing deposits $ 1,491,613  $ 1,948  0.53$ 1,519,631  $ 1,993  0.52$ 1,513,348  $ 1,838  0.49%
Repurchase agreements   1,418    1  0.29  1,793    —  —  2,468    2  0.33%
Note payable   —    4  —  11,252    122  4.30  26,965    251  3.78%
Junior subordinated debt   10,826    93  3.48  10,826    86  3.15  10,826    74  2.77%
Total interest-bearing liabilities   1,503,857  $ 2,046  0.55  1,543,502  $ 2,201  0.56  1,553,607  $ 2,165  0.57%
Noninterest-bearing liabilities:                         
Noninterest-bearing deposits   1,097,085         1,087,416         985,690       
Other liabilities   21,165         23,271         16,421       
Total noninterest-bearing liabilities   1,118,250         1,110,687         1,002,111       
Shareholders’ equity   450,742         425,311         359,849       
Total liabilities and shareholders’ equity $ 3,072,849       $ 3,079,500       $ 2,915,567       
Net interest income    $ 29,039      $ 28,165      $ 25,833   
Net interest spread (3)        3.93       3.73       3.69%
Net interest margin (4)        4.19       3.98       3.93%
Net interest margin—tax equivalent (5)        4.23       4.06       4.02%
                          


(1) Annualized.
(2) Includes average outstanding balances of loans held for sale of $544,000, $521,000 and $690,000 for the three months ended March 31, 2018, December 31, 2017 and March 31, 2017, respectively.
(3) Net interest spread is the average yield on interest‑earning assets minus the average rate on interest‑bearing liabilities.
(4) Net interest margin is equal to net interest income divided by average interest‑earning assets.
(5) To make pre‑tax income and resultant yields on tax‑exempt investments and loans comparable to those on taxable investments and loans, a tax equivalent adjustment of $270,000, $549,000 and $614,000 for the three months ended March 31, 2018, December 31, 2017 and March 31, 2017, respectively, has been computed using a federal income tax rate of 21% for 2018 and 35% for 2017.
   

CBTX, INC. AND SUBSIDIARY
Yield Trend (Unaudited)

                 
  For the Three Months Ended 
  3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 
Yield Trend - Annualized:                
Interest-earnings assets:                
Total loans   4.98%  4.88%  4.91%  4.83%  4.83%
Debt securities   2.60%  2.42%  2.37%  2.45%  2.43%
Federal funds sold and other interest-earning assets   1.60%  1.37%  1.29%  1.12%  0.87%
Nonmarketable equity securities   5.32%  5.13%  4.83%  4.81%  5.33%
Total interest-earning assets   4.49%  4.29%  4.32%  4.32%  4.26%
                 
Interest-bearing liabilities:                
Interest-bearing deposits   0.53%  0.52%  0.52%  0.50%  0.49%
Repurchase agreements   0.29%  —%  0.33%  0.17%  0.33%
Note payable   —%  4.30%  4.31%  4.10%  3.78%
Junior subordinated debt   3.48%  3.15%  3.04%  2.93%  2.77%
Total interest-bearing liabilities   0.55%  0.56%  0.60%  0.58%  0.57%
                 
Net interest spread (1)   3.93%  3.73%  3.73%  3.74%  3.69%
Net interest margin (2)   4.19%  3.98%  3.98%  3.99%  3.93%
Net interest margin—tax equivalent (3)   4.23%  4.06%  4.07%  4.08%  4.02%
                 


(1) Net interest spread is the average yield on interest‑earning assets minus the average rate on interest‑bearing liabilities.
(2) Net interest margin is equal to net interest income divided by average interest‑earning assets.
(3) To make pre‑tax income and resultant yields on tax‑exempt investments and loans comparable to those on taxable investments and loans, a tax equivalent adjustment has been computed using a federal income tax rate of 21% for 2018 and 35% for 2017.
   

CBTX, INC. AND SUBSIDIARY
Average Outstanding Balances (Unaudited)
(In thousands)

  For the Three Months Ended
  3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017
Average Outstanding Balances:               
                
Assets               
Interest-earnings assets:               
Total loans (1) $ 2,319,463  $ 2,252,735  $ 2,191,016  $ 2,203,145  $ 2,178,626 
Debt securities   223,730    222,602    223,132    220,905    217,086 
Federal funds sold and other interest-earning assets   252,722    317,484    284,334    228,393    257,152 
Nonmarketable equity securities   14,701    14,698    14,695    14,691    14,685 
Total interest-earning assets   2,810,616    2,807,519    2,713,177    2,667,134    2,667,549 
Allowance for loan losses   (24,866)   (24,127)   (25,316)   (26,424)   (25,419)
Noninterest-earnings assets   287,099    296,108    290,767    273,760    273,437 
Total assets $ 3,072,849  $ 3,079,500  $ 2,978,628  $ 2,914,470  $ 2,915,567 
                
Liabilities and Shareholders’ Equity               
Interest-bearing liabilities:               
Interest-bearing deposits $ 1,491,613  $ 1,519,631  $ 1,501,732  $ 1,478,579  $ 1,513,348 
Repurchase agreements   1,418    1,793    2,404    2,356    2,468 
Note payable   —    11,252    24,742    25,841    26,965 
Junior subordinated debt   10,826    10,826    10,826    10,826    10,826 
Total interest-bearing liabilities   1,503,857    1,543,502    1,539,704    1,517,602    1,553,607 
Noninterest-bearing liabilities:               
Noninterest-bearing deposits   1,097,085    1,087,416    1,041,731    1,010,823    985,690 
Other liabilities   21,165    23,271    18,844    16,910    16,421 
Total noninterest-bearing liabilities   1,118,250    1,110,687    1,060,575    1,027,733    1,002,111 
Shareholders’ equity   450,742    425,311    378,349    369,135    359,849 
Total liabilities and shareholders’ equity $ 3,072,849  $ 3,079,500  $ 2,978,628  $ 2,914,470  $ 2,915,567 
                     


(1) Includes average outstanding balances of loans held for sale.
   

CBTX, INC. AND SUBSIDIARY
Period End Balances (Unaudited)
(In thousands, except percentages)

                           
  3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 
  Amount  Amount  Amount  Amount  Amount  
Loan Portfolio:                          
Commercial and industrial $ 559,070   23.7$ 559,363   24.1$ 548,870   24.9$ 535,116   24.4$ 524,201   23.6%
Real estate:                          
Commercial real estate   767,108   32.5  738,293   31.9  689,501   31.3  690,044   31.4  723,253   32.5%
Construction and development   436,260   18.5  449,211   19.4  424,489   19.3  433,966   19.8  522,508   23.5%
1-4 family residential   260,580   11.0  258,584   11.2  246,564   11.2  240,073   10.9  237,218   10.7%
Multi-family residential   236,000   10.0  220,305   9.5  211,219   9.6  208,222   9.5  124,246   5.6%
Consumer   40,869   1.7  40,433   1.7  42,772   1.9  41,130   1.9  41,326   1.9%
Agricultural   8,807   0.4  11,256   0.5  11,424   0.5  10,650   0.4  10,217   0.4%
Other   52,382   2.2  40,344   1.7  29,684   1.3  38,237   1.7  39,869   1.8%
Gross loans   2,361,076   100.0  2,317,789   100.0  2,204,523   100.0  2,197,438   100.0  2,222,838   100.0%
Less deferred fees and unearned discount   (4,910)     (4,785)     (4,579)     (4,436)     (4,507)   
Less allowance for loan losses   (25,349)     (24,778)     (23,757)     (25,187)     (25,881)   
Less loans held for sale   (113)     (1,460)     (466)     (559)     (675)   
Loans, net $ 2,330,704    $ 2,286,766    $ 2,175,721    $ 2,167,256    $ 2,191,775    
                           
Deposits:                          
Interest-bearing demand accounts $ 345,378   13.3$ 363,015   14.0$ 340,627   13.3$ 343,826   13.7$ 355,235   14.2
Money market accounts   717,548   27.6  702,299   27.0  726,903   28.5  698,546   27.7  714,863   28.6
Savings accounts   95,603   3.7  95,842   3.7  88,613   3.5  88,083   3.5  88,360   3.5
Certificates and other time deposits, $100,000 or greater   161,777   6.2  172,469   6.6  179,777   7.0  182,143   7.2  171,147   6.9
Certificates and other time deposits, less than $100,000   158,875   6.1  159,558   6.1  166,952   6.5  173,321   6.9  175,001   7.0
Total interest-bearing deposits   1,479,181   56.9  1,493,183   57.4  1,502,872   58.8  1,485,919   59.0  1,504,606   60.2
Noninterest-bearing deposits   1,120,521   43.1  1,109,789   42.6  1,051,755   41.2  1,030,865   41.0  993,839   39.8
Total deposits $ 2,599,702   100.0$ 2,602,972   100.0$ 2,554,627   100.0$ 2,516,784   100.0$ 2,498,445   100.0
                                

CBTX, INC. AND SUBSIDIARY
Credit Quality (Unaudited)
(In thousands, except percentages)

                 
  3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 
Nonaccrual loans (at period end):                
Commercial and industrial $ 2,533 $ 3,280 $ 2,444 $ 2,348 $ 2,040 
Real estate:                
Commercial real estate   2,217   3,216   5,038   4,964   2,317 
Construction and development   233   252   265   362   414 
1-4 family residential   765   898   844   578   1,283 
Multi-family residential   —   —   1   3   5 
Consumer   21   —   —   —   — 
Agricultural   —   —   —   —   6 
Total nonaccrual loans $ 5,769 $ 7,646 $ 8,592 $ 8,255 $ 6,065 
                 
Nonperforming assets (at period end):                
Nonaccrual loans $ 5,769 $ 7,646 $ 8,592 $ 8,255 $ 6,065 
Accruing loans 90 or more days past due   —   —   —   —   — 
Total nonperforming loans   5,769   7,646   8,592   8,255   6,065 
Foreclosed assets, including other real estate:                
Commercial real estate, construction and development, land and land development   295   298   729   1,018   1,179 
Residential real estate   —   407   407   417   — 
Total foreclosed assets   295   705   1,136   1,435   1,179 
Total nonperforming assets $ 6,064 $ 8,351 $ 9,728 $ 9,690 $ 7,244 
                 
Allowance for Loan Losses (at period end):                
Commercial and industrial $ 7,439 $ 7,257 $ 7,194 $ 8,466 $ 7,746 
Real estate:                
Commercial real estate   10,742   10,375   9,640   10,000   10,507 
Construction and development   3,356   3,482   3,364   3,313   4,145 
1-4 family residential   1,329   1,326   1,282   1,138   1,111 
Multi-family residential   1,520   1,419   1,360   1,341   800 
Consumer   517   566   626   599   615 
Agricultural   53   68   69   64   63 
Other   393   285   222   266   894 
Total allowance for loan losses $ 25,349 $ 24,778 $ 23,757 $ 25,187 $ 25,881 
                 
Credit Quality Ratios (at period end):                
Nonperforming assets to total assets   0.20  0.27  0.33  0.33  0.25
Nonperforming loans to total loans   0.24  0.33  0.39  0.38  0.27
Allowance for loan losses to nonperforming loans   439.40  324.06  276.50  305.11  426.73
Allowance for loan losses to total loans   1.08  1.07  1.08  1.15  1.17
                 

CBTX, INC. AND SUBSIDIARY
Allowance for Loan Losses (Unaudited)
(In thousands, except percentages)

  For the Three Months Ended
  3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017
Analysis of Allowance for Loan Losses               
                
Allowance for loan losses at beginning of period $ 24,778  $ 23,757  $ 25,187  $ 25,881  $ 25,006 
                
Provision (recapture) for loan losses   865    1,050    (1,654)   (694)   960 
                
Net charge-offs (recoveries)               
Commercial and industrial   297    (52)   (205)   (66)   117 
Real estate:               
Commercial real estate   (3)   118    (2)   (2)   (3)
Construction and development   —    —    —    —    — 
1-4 family residential   2    7    (2)   (8)   (2)
Multi-family residential   —    —    —    —    — 
Consumer   (2)   (9)   (4)   90    (27)
Agricultural   —    (35)   (11)   (6)   — 
Other   —    —    —    (8)   — 
Total net charge-offs (recoveries)   294    29    (224)   —    85 
                
Allowance for loan losses at end of period $ 25,349  $ 24,778  $ 23,757  $ 25,187  $ 25,881 
                
Net charge-offs (recoveries) to average loans   0.05%   —%   (0.04)%   —%   0.02%
                     


CBTX, INC. AND SUBSIDIARY
Non‑GAAP to GAAP Reconciliation (Unaudited)
(In thousands, except per share data and percentages)

Our accounting and reporting policies conform to GAAP and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non‑GAAP financial measures. We classify a financial measure as being a non‑GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are not included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non‑GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively financial measures calculated in accordance with GAAP. Non‑GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the way we calculate the non‑GAAP financial measures may differ from that of other companies reporting measures with similar names.

We calculate (1) tangible equity as total shareholders’ equity, less goodwill and other intangible assets, net of accumulated amortization, and (2) tangible book value per share as tangible equity divided by shares of common stock outstanding at the end of the relevant period. The most directly comparable GAAP financial measure for tangible book value per share is book value per share. We calculate tangible assets as total assets less goodwill and other intangible assets, net of accumulated amortization. The most directly comparable GAAP financial measure for tangible equity to tangible assets is total shareholders’ equity to total assets. We believe that tangible book value per share and tangible equity to tangible assets are measures that are important to many investors in the marketplace who are interested in book value per share and total shareholders’ equity to total assets, exclusive of change in intangible assets.

The following tables reconcile, as of the dates set forth below, total shareholders’ equity to tangible equity, total assets to tangible assets and presents book value per share, tangible book value per share, tangible equity to tangible assets and shareholders’ equity to total assets:

                 
  3/31/2018 12/31/2017 9/30/2017 6/30/2017 3/31/2017 
Tangible Equity                
Total shareholders’ equity $ 451,571 $ 446,214 $ 381,121 $ 371,964 $ 363,643 
Adjustments:                
Goodwill   80,950   80,950   80,950   80,950   80,950 
Other intangibles   6,521   6,770   7,031   7,298   7,513 
Tangible equity $ 364,100 $ 358,494 $ 293,140 $ 283,716 $ 275,180 
Tangible Assets                
Total assets $ 3,074,790 $ 3,081,083 $ 2,989,838 $ 2,940,877 $ 2,914,548 
Adjustments:                
Goodwill   80,950   80,950   80,950   80,950   80,950 
Other intangibles   6,521   6,770   7,031   7,298   7,513 
Tangible assets $ 2,987,319 $ 2,993,363 $ 2,901,857 $ 2,852,629 $ 2,826,085 
                 
Common shares outstanding   24,833   24,833   22,063   22,063   22,062 
                 
Book value per share $ 18.18 $ 17.97 $ 17.27 $ 16.86 $ 16.48 
Tangible book value per share $ 14.66 $ 14.44 $ 13.29 $ 12.86 $ 12.47 
                 
Total shareholders’ equity to total assets   14.69  14.48%  12.75%  12.65%  12.48%
Tangible equity to tangible assets   12.19  11.98%  10.10%  9.95%  9.74%