CBTX, Inc. Reports Second Quarter Financial Results


HOUSTON, July 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 $11.0 million, or $0.44 per diluted share, for the quarter ended June 30, 2018, compared to $8.7 million, or $0.39 per diluted share, for the quarter ended June 30, 2017 and $9.1 million, or $0.37 per diluted share, for the quarter ended March 31, 2018.

For 2018, net income and earnings per share were positively impacted by the 14% reduction of the corporate U.S. statutory federal tax rate from 35% to 21% as a result of the enactment of the Tax Cuts and Jobs Act (the “Tax Act”), which became effective January 1, 2018.

Highlights

  • Total loans, excluding loans held for sale, increased $48.1 million, or 8.2% annualized, to $2.4 billion compared to the quarter ended March 31, 2018.
  • Net interest income for the quarter ended June 30, 2018 totaled $30.9 million, an increase of 6.3% from the first quarter of 2018, primarily due to increased average loans and yields on loans.
  • The efficiency ratio improved to 58.2% for the quarter ended June 30, 2018, compared to 62.6% for the quarter ended March 31, 2018.

Operating Results:

Net Interest Income

Net interest income was $30.9 million for the second quarter of 2018, compared to $26.5 million for the second quarter of 2017 and $29.0 million for the first quarter of 2018. The increase in net interest income in the second quarter of 2018 from the second quarter of 2017, was due to increased average loans and increased average yields on loans and federal funds sold. The increase in net interest income in the second quarter of 2018 from the first quarter of 2018 was due to increased average loans and average loan yields.

The yield on interest-earning assets was 4.71% for the second quarter of 2018, compared to 4.32% for the second quarter of 2017 and 4.49% for the first quarter of 2018.

The cost of interest-bearing liabilities, including borrowings, was 0.60% for the second quarter of 2018, compared to 0.58% for the second quarter of 2017 and 0.55% for the first quarter of 2018.

The net interest margin was 4.39% for the second quarter of 2018 compared to 3.99% for the second quarter of 2017 and 4.19% for the first quarter of 2018.

Provision (Recapture) for Loan Losses

Provision for loan loss was $690,000 for the second quarter of 2018, compared to a recapture of $694,000 for the second quarter of 2017 and a provision of $865,000 for the first quarter of 2018.

The allowance for loan losses was $25.7 million, or 1.07% of total loans, at June 30, 2018, compared to $25.2 million, or 1.15% of total loans, at June 30, 2017 and $25.3 million, or 1.08% of total loans, at March 31, 2018.

Noninterest Income

Noninterest income was $3.5 million for the second quarter of 2018, $3.5 million for the second quarter of 2017 and $3.4 million for the first quarter of 2018. Although noninterest income was relatively flat between the second quarter 2018 and the second quarter 2017, there was a decrease in gains on sales of loans and assets, offset by an increase in earnings on bank-owned life insurance. 

Noninterest income increased from the first quarter of 2018 to the second quarter of 2018 primarily due to higher gains on sales of loans and assets in the second quarter of 2018. 

Noninterest Expense

Noninterest expense was $20.0 million for the second quarter of 2018, $18.9 million for the second quarter of 2017 and $20.3 million for the first quarter of 2018.

Noninterest expense during the second quarter of 2018 compared to the first quarter of 2018 was relatively flat, with decreases in salaries and employee benefits and professional and director fees offset by increased occupancy costs.

Noninterest expense increased $1.2 million in the second quarter of 2018 compared to the second quarter of 2017 primarily due to increased salaries, employee benefits, incentive compensation, health insurance premiums and stock compensation expense.

Income Taxes

Income tax expense was $2.6 million for the second quarter of 2018, $3.2 million for the second quarter of 2017 and $2.1 million for the first quarter of 2018.

The effective tax rates were 19.3% for the second quarter of 2018, 26.8% for the second quarter of 2017 and 19.0% for the first quarter of 2018. The effective tax rate for the first and second quarter of 2018 reflect reduction of the federal tax rate from 35% to 21% in the fourth quarter of 2017.

Balance Sheet Highlights:

Loans

Loans were $2.4 billion at June 30, 2018, $2.2 billion at June 30, 2017 and $2.4 billion at March 31, 2018. The increases from the prior year and first quarter are primarily due to organic growth.

Asset Quality

Nonperforming assets remain low relative to total assets at $4.9 million, or 0.16% of total assets, at June 30, 2018, $9.7 million, or 0.33% of total assets, at June 30, 2017 and $6.1 million, or 0.20% of total assets at March 31, 2018.

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

Deposits and Borrowings

Total deposits were $2.6 billion at June 30, 2018, compared to $2.5 billion at June 30, 2017 and $2.6 billion at March 31, 2018.

Total borrowings (excluding junior subordinated debentures) were $51.4 million at June 30, 2018, $27.6 million at June 30, 2017 and $861,000 at March 31, 2018. The increase in borrowings from March 31, 2018 to June 30, 2018 is due to Federal Home Loan Bank (FHLB) short-term advances of $50 million. Borrowings at June 30, 2017 include $25.5 million for our note payable, which was repaid due to scheduled payments and repayment in full during the quarter ended December 31, 2017.

Capital

At June 30, 2018, the Company remains well capitalized. Our ratio of total shareholders’ equity to total assets was 14.87% at June 30, 2018, 12.65% at June 30, 2017 and 14.69% at March 31, 2018.

Our ratio of tangible equity to total tangible assets was 12.41% at June 30, 2018, 9.95% at June 30, 2017 and 12.19% at March 31, 2018. Tangible equity to total tangible assets is a non‑GAAP financial measure. See the table captioned “Non‑GAAP to GAAP Reconciliation.”

Our ratio of tangible equity to total assets increased from June 30, 2017 to June 30, 2018 due to our November 2017 initial public offering of our common stock.

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.communitybankoftx.com under the Investor Relations tab.

                
CBTX, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)
                
Balance Sheet Data (at period end): 6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017
                
Loans, excluding loans held for sale $2,404,132  $2,356,053  $2,311,544  $2,199,478  $2,192,443 
Allowance for loan losses  (25,746)  (25,349)  (24,778)  (23,757)  (25,187)
Loans, net  2,378,386   2,330,704   2,286,766   2,175,721   2,167,256 
                
Cash and equivalents  245,265   279,915   326,199   348,578   307,173 
Debt securities  230,393   221,183   223,208   217,660   220,330 
Premises and equipment, net  52,607   53,135   53,607   54,129   56,609 
Goodwill  80,950   80,950   80,950   80,950   80,950 
Other intangible assets, net  6,276   6,521   6,770   7,031   7,298 
Repossessed real estate and other assets  137   295   705   1,136   1,435 
Loans held for sale  560   113   1,460   466   559 
Other assets  106,186   101,974   101,418   104,167   99,267 
Total Assets $3,100,760  $3,074,790  $3,081,083  $2,989,838  $2,940,877 
                
Noninterest-bearing deposits $1,114,155  $1,120,521  $1,109,789  $1,051,755  $1,030,865 
Interest-bearing deposits  1,447,119   1,479,181   1,493,183   1,502,872   1,485,919 
Total deposits  2,561,274   2,599,702   2,602,972   2,554,627   2,516,784 
                
Note payable  -   -   -   24,357   25,464 
Repurchase agreements  1,448   861   1,525   2,239   2,179 
Federal Home Loan Bank advances  50,000   -   -   -   - 
Junior subordinated debt  6,726   6,726   6,726   6,726   6,726 
Other liabilities  20,117   15,930   23,646   20,768   17,760 
Total Liabilities  2,639,565   2,623,219   2,634,869   2,608,717   2,568,913 
                
Shareholders' Equity  461,195   451,571   446,214   381,121   371,964 
Total Liabilities and Shareholders' Equity $3,100,760  $3,074,790  $3,081,083  $2,989,838  $2,940,877 
                     
                     

 

 
CBTX, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income (Unaudited)
(In thousands)
 
                      
  For the Three Months Ended  For the Six Months Ended
  6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017 6/30/2018 6/30/2017
Interest Income                     
Interest and fees on loans $30,493 $28,462 $27,726  $27,129  $26,560  $58,955 $52,513
Securities  1,507  1,436  1,357   1,334   1,353   2,943  2,656
Federal Funds and interest-bearing deposits  1,127  1,187  1,283   1,106   813   2,314  1,555
Total Interest Income  33,127  31,085  30,366   29,569   28,726   64,212  56,724
Interest Expense                     
Deposits  2,126  1,948  1,993   1,964   1,857   4,074  3,695
Repurchase agreements  1  1     2   1   2  3
Federal Home Loan Bank advances  12             12  
Note payable  3  4  122   269   264   7  515
Junior subordinated debt  109  93  86   83   79   202  153
Total Interest Expense  2,251  2,046  2,201   2,318   2,201   4,297  4,366
Net Interest Income  30,876  29,039  28,165   27,251   26,525   59,915  52,358
Provision (Recapture) for Loan Losses  690  865  1,050   (1,654)  (694)  1,555  266
Net Interest Income After Provision (Recapture) for Loan Losses  30,186  28,174  27,115   28,905   27,219   58,360  52,092
Noninterest Income                     
Deposit account service charges  1,497  1,478  1,388   1,395   1,517   2,975  3,017
Net gain (loss) on sale of assets  210  130  (7)  828   339   340  703
Card interchange fees  971  927  941   803   877   1,898  1,709
Earnings on bank-owned life insurance  465  451  460   459   335   916  661
Other  363  375  362   601   458   738  884
Total Noninterest Income  3,506  3,361  3,144   4,086   3,526   6,867  6,974
Noninterest Expense                     
Salaries and employee benefits  12,496  12,695  14,021   11,829   11,299   25,191  22,723
Net occupancy expense  2,433  2,265  2,346   2,221   2,351   4,698  4,584
Regulatory fees  513  545  487   458   621   1,058  1,231
Data processing  666  683  674   662   651   1,349  1,293
Printing, stationery and office  480  411  415   348   370   891  717
Amortization of intangibles  248  255  263   267   271   503  549
Professional and director fees  686  919  1,168   606   706   1,605  1,331
Correspondent bank and customer related transaction expenses  68  67  67   67   78   135  152
Loan processing costs  75  118  141   115   133   193  205
Advertising, marketing and business development  475  506  508   266   508   981  687
Repossessed real estate and other asset expense  5  57  66   340   85   62  203
Security and protection expense  311  302  300   331   352   613  724
Telephone and communications  394  386  344   311   307   780  661
Other expenses  1,162  1,075  1,189   1,196   1,127   2,237  2,226
Total Noninterest Expense  20,012  20,284  21,989   19,017   18,859   40,296  37,286
Net Income Before Income Tax Expense  13,680  11,251  8,270   13,974   11,886   24,931  21,780
Income Tax Expense  2,638  2,139  6,313   3,927   3,181   4,777  6,213
Net Income  $11,042 $9,112 $1,957  $10,047  $8,705  $20,154 $15,567
                         
                         


 
CBTX, INC. AND SUBSIDIARY
Financial Highlights (Unaudited)
(In thousands, except per share data and percentages)
 
                       
  For the Three Months Ended  For the Six Months Ended 
  6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017 6/30/2018 6/30/2017 
Profitability:                      
Net income $11,042 $9,112 $1,957 $10,047 $8,705 $20,154 $15,567 
Basic earnings per share $0.44 $0.37 $0.08 $0.46 $0.39 $0.81 $0.71 
Diluted earnings per share $0.44 $0.37 $0.08 $0.45 $0.39 $0.81 $0.70 
                       
Return on average assets (1)  1.44% 1.20% 0.25% 1.34% 1.20% 1.32% 1.08%
Return on average shareholders' equity (1)  9.66% 8.20% 1.83% 10.54% 9.46% 8.94% 8.58%
Net interest margin- tax equivalent (1)  4.43% 4.23% 4.06% 4.07% 4.08% 4.33% 4.05%
Efficiency ratio (2)  58.20% 62.60% 70.23% 60.69% 62.76% 60.34% 62.84%
                       
Liquidity and Capital Ratios:                      
Total shareholders' equity to total assets  14.87% 14.69% 14.48% 12.75% 12.65% 14.87% 12.65%
Tangible equity to tangible assets (3)  12.41% 12.19% 11.98% 10.10% 9.95% 12.41% 9.95%
Common equity tier 1 capital ratio  14.08% 14.12% 14.19% 12.23% 12.00% 14.08% 12.00%
Tier 1 leverage ratio  12.87% 12.58% 12.30% 10.48% 10.39% 12.87% 10.39%
Tier 1 risk-based capital ratio  14.32% 14.37% 14.44% 12.49% 12.26% 14.32% 12.26%
Total risk-based capital ratio  15.29% 15.35% 15.42% 13.48% 13.33% 15.29% 13.33%
                       
Other Data:                      
Weighted average common shares outstanding- Basic  24,858  24,833  23,629  22,063  22,062  24,845  22,062 
Weighted average common shares outstanding- Diluted  24,997  24,954  23,742  22,138  22,148  24,977  22,148 
Common shares outstanding at period end  24,859  24,833  24,833  22,063  22,063  24,859  22,063 
Dividends per share $0.05 $0.05 $0.05 $0.05 $0.05 $0.10 $0.10 
Book value per share $18.55 $18.18 $17.97 $17.27 $16.86 $18.55 $16.86 
Tangible book value per share (3) $15.04 $14.66 $14.44 $13.29 $12.86 $15.04 $12.86 
Employees - full-time equivalents  488  477  462  464  472  488  472 

_____________________________

(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
  6/30/2018 3/31/2018 6/30/2017
     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) $2,375,253  $30,493 5.15% $2,319,463  $28,462 4.98% $2,203,145  $26,560 4.83%
Debt securities  228,262   1,507 2.65%  223,730   1,436 2.60%  220,905   1,353 2.45%
Federal funds sold and other interest-earning assets  201,906   936 1.86%  252,722   994 1.60%  228,393   637 1.12%
Nonmarketable equity securities  14,823   191 5.17%  14,701   193 5.32%  14,691   176 4.81%
Total interest-earning assets  2,820,244  $33,127 4.71%  2,810,616  $31,085 4.49%  2,667,134  $28,726 4.32%
Allowance for loan losses  (25,392)        (24,866)        (26,424)      
Noninterest-earnings assets  288,416         287,099         273,760       
Total assets $3,083,268        $3,072,849        $2,914,470       
Liabilities and Shareholders’ Equity                           
Interest-bearing liabilities:                           
Interest-bearing deposits $1,478,016  $2,126 0.58% $1,491,613  $1,948 0.53% $1,478,579  $1,857 0.50%
Repurchase agreements  1,540   1 0.26%  1,418   1 0.29%  2,356   1 0.17%
FHLB advances  2,198   12 2.19%      %      %
Note payable     3 %     4 %  25,841   264 4.10%
Junior subordinated debt  10,826   109 4.04%  10,826   93 3.48%  10,826   79 2.93%
Total interest-bearing liabilities  1,492,580  $2,251 0.60%  1,503,857  $2,046 0.55%  1,517,602  $2,201 0.58%
Noninterest-bearing liabilities:                           
Noninterest-bearing deposits  1,111,736         1,097,085         1,010,823       
Other liabilities  20,441         21,165         16,910       
Total noninterest-bearing liabilities  1,132,177         1,118,250         1,027,733       
Shareholders’ equity  458,511         450,742         369,135       
Total liabilities and shareholders’ equity $3,083,268        $3,072,849        $2,914,470       
Net interest income    $30,876       $29,039       $26,525   
Net interest spread (3)       4.11%       3.93%       3.74%
Net interest margin (4)       4.39%       4.19%       3.99%
Net interest margin—tax equivalent (5)       4.43%       4.23%       4.08%
                            

_____________________________

(1)   Annualized.
(2)   Includes average outstanding balances of loans held for sale of $425,000, $544,000 and $770,000 for the quarter ended June 30, 2018, March 31, 2018 and June 30, 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 $267,000, $270,000 and $585,000 for the quarter ended June 30, 2018, March 31, 2018 and June 30, 2017, respectively, has been computed using a federal income tax rate of 21% for 2018 and 35% for 2017.

                   
                   
  For the Six Months Ended June 30,
  2018 2017
     Interest       Interest   
  Average Earned/ Average Average Earned/ Average
  Outstanding Interest Yield/ Outstanding Interest Yield/
(Dollars in thousands) Balance Paid Rate Balance Paid Rate
Assets                  
Interest-earnings assets:                  
Total loans (1) $2,347,512  $58,955 5.06% $2,190,953  $52,513 4.83%
Debt securities  226,008   2,943 2.63%  219,005   2,656 2.45%
Federal funds sold and other interest-earning assets  227,172   1,929 1.71%  244,053   1,186 0.98%
Nonmarketable equity securities  14,763   385 5.26%  14,688   369 5.07%
Total interest-earning assets  2,815,455  $64,212 4.60%  2,668,699  $56,724 4.29%
Allowance for loan losses  (25,131)        (25,932)      
Noninterest-earnings assets  287,764         275,208       
Total assets $3,078,088        $2,917,975       
Liabilities and Shareholders’ Equity                  
Interest-bearing liabilities:                  
Interest-bearing deposits $1,484,777  $4,074 0.55% $1,495,867  $3,695 0.50%
Repurchase agreements  1,480   2 0.27%  2,412   3 0.25%
FHLB advances  1,105   12 2.19%      %
Note payable     7 %  26,400   515 3.93%
Junior subordinated debt  10,826   202 3.76%  10,826   153 2.85%
Total interest-bearing liabilities  1,498,188  $4,297 0.58%  1,535,505  $4,366 0.57%
Noninterest-bearing liabilities:                  
Noninterest-bearing deposits  1,104,451         998,326       
Other liabilities  20,801         18,157       
Total noninterest-bearing liabilities  1,125,252         1,016,483       
Shareholders’ equity  454,648         365,987       
Total liabilities and shareholders’ equity $3,078,088        $2,917,975       
Net interest income    $59,915       $52,358   
Net interest spread (2)       4.02%       3.71%
Net interest margin (3)       4.29%       3.96%
Net interest margin—tax equivalent (4)       4.33%       4.05%
                   

______________________________

(1)   Annualized. 
(2)   Includes average outstanding balances of loans held for sale of $484,000 and $730,000 for the six months ended June 30, 2018 and June 30, 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 $537,000 and $1.2 million for the six months ended June 30, 2018 and June 30, 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
  6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017
Yield Trend - Annualized:               
Interest-earnings assets:               
Total loans 5.15% 4.98% 4.88% 4.91% 4.83%
Debt securities 2.65% 2.60% 2.42% 2.37% 2.45%
Federal funds sold and other interest-earning assets 1.86% 1.60% 1.37% 1.29% 1.12%
Nonmarketable equity securities 5.17% 5.32% 5.13% 4.83% 4.81%
Total interest-earning assets 4.71% 4.49% 4.29% 4.32% 4.32%
                
Interest-bearing liabilities:               
Interest-bearing deposits 0.58% 0.53% 0.52% 0.52% 0.50%
Repurchase agreements 0.26% 0.29% % 0.33% 0.17%
FHLB advances 2.19% % % % %
Note payable % % 4.30% 4.31% 4.10%
Junior subordinated debt 4.04% 3.48% 3.15% 3.04% 2.93%
Total interest-bearing liabilities 0.60% 0.55% 0.56% 0.60% 0.58%
                
Net interest spread (1) 4.11% 3.93% 3.73% 3.73% 3.74%
Net interest margin (2) 4.39% 4.19% 3.98% 3.98% 3.99%
Net interest margin—tax equivalent (3) 4.43% 4.23% 4.06% 4.07% 4.08%
                

_____________________________

(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
  6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017
Average Outstanding Balances:               
                
Assets               
Interest-earnings assets:               
Total loans (1) $2,375,253  $2,319,463  $2,252,735  $2,191,016  $2,203,145 
Debt securities  228,262   223,730   222,602   223,132   220,905 
Federal funds sold and other interest-earning assets  201,906   252,722   317,484   284,334   228,393 
Nonmarketable equity securities  14,823   14,701   14,698   14,695   14,691 
Total interest-earning assets  2,820,244   2,810,616   2,807,519   2,713,177   2,667,134 
Allowance for loan losses  (25,392)  (24,866)  (24,127)  (25,316)  (26,424)
Noninterest-earnings assets  288,416   287,099   296,108   290,767   273,760 
Total assets $3,083,268  $3,072,849  $3,079,500  $2,978,628  $2,914,470 
                
Liabilities and Shareholders’ Equity               
Interest-bearing liabilities:               
Interest-bearing deposits $1,478,016  $1,491,613  $1,519,631  $1,501,732  $1,478,579 
Repurchase agreements  1,540   1,418   1,793   2,404   2,356 
FHLB advances  2,198             
Note payable        11,252   24,742   25,841 
Junior subordinated debt  10,826   10,826   10,826   10,826   10,826 
Total interest-bearing liabilities  1,492,580   1,503,857   1,543,502   1,539,704   1,517,602 
Noninterest-bearing liabilities:               
Noninterest-bearing deposits  1,111,736   1,097,085   1,087,416   1,041,731   1,010,823 
Other liabilities  20,441   21,165   23,271   18,844   16,910 
Total noninterest-bearing liabilities  1,132,177   1,118,250   1,110,687   1,060,575   1,027,733 
Shareholders’ equity  458,511   450,742   425,311   378,349   369,135 
Total liabilities and shareholders’ equity $3,083,268  $3,072,849  $3,079,500  $2,978,628  $2,914,470 
                     


___________________________

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

 
 
CBTX, INC. AND SUBSIDIARY
Period End Balances (Unaudited)
(In thousands, except percentages)
                               
  6/30/2018  3/31/2018  12/31/2017  9/30/2017  6/30/2017 
  Amount   Amount   Amount   Amount   Amount  
Loan Portfolio:                              
Commercial and industrial $565,850  23.5% $559,070  23.7% $559,363  24.1% $548,870  24.9% $535,116  24.4%
Real estate:                              
Commercial real estate  780,224  32.4%  767,108  32.5%  738,293  31.9%  689,501  31.3%  690,044  31.4%
Construction and development  449,390  18.6%  436,260  18.5%  449,211  19.4%  424,489  19.3%  433,966  19.8%
1-4 family residential  279,227  11.6%  260,580  11.0%  258,584  11.2%  246,564  11.2%  240,073  10.9%
Multi-family residential  229,609  9.5%  236,000  10.0%  220,305  9.5%  211,219  9.6%  208,222  9.5%
Consumer  41,833  1.7%  40,869  1.7%  40,433  1.7%  42,772  1.9%  41,130  1.9%
Agricultural  10,951  0.5%  8,807  0.4%  11,256  0.5%  11,424  0.5%  10,650  0.4%
Other  53,376  2.2%  52,382  2.2%  40,344  1.7%  29,684  1.3%  38,237  1.7%
Gross loans  2,410,460  100.0%  2,361,076  100.0%  2,317,789  100.0%  2,204,523  100.0%  2,197,438  100.0%
Less deferred fees and unearned discount  (5,768)     (4,910)     (4,785)     (4,579)     (4,436)   
Less allowance for loan losses  (25,746)     (25,349)     (24,778)     (23,757)     (25,187)   
Less loans held for sale  (560)     (113)     (1,460)     (466)     (559)   
Loans, net $2,378,386     $2,330,704     $2,286,766     $2,175,721     $2,167,256    
                               
Deposits:                              
Interest-bearing demand accounts $342,890  13.4% $345,378  13.3% $363,015  14.0% $340,627  13.3% $343,826  13.7%
Money market accounts  650,747  25.4%  717,548  27.6%  702,299  27.0%  726,903  28.5%  698,546  27.7%
Savings accounts  97,576  3.8%  95,603  3.7%  95,842  3.7%  88,613  3.5%  88,083  3.5%
Certificates and other time deposits, $100,000 or greater  164,464  6.4%  161,777  6.2%  172,469  6.6%  179,777  7.0%  182,143  7.2%
Certificates and other time deposits, less than $100,000  191,442  7.5%  158,875  6.1%  159,558  6.1%  166,952  6.5%  173,321  6.9%
Total interest-bearing deposits  1,447,119  56.5%  1,479,181  56.9%  1,493,183  57.4%  1,502,872  58.8%  1,485,919  59.0%
Noninterest-bearing deposits  1,114,155  43.5%  1,120,521  43.1%  1,109,789  42.6%  1,051,755  41.2%  1,030,865  41.0%
Total deposits $2,561,274  100.0% $2,599,702  100.0% $2,602,972  100.0% $2,554,627  100.0% $2,516,784  100.0%
                                    
                                    


 
CBTX, INC. AND SUBSIDIARY
Credit Quality (Unaudited)
(In thousands, except percentages)
                     
  6/30/2018  3/31/2018  12/31/2017  9/30/2017  6/30/2017 
Nonperforming assets (at period end):                    
Nonaccrual loans:                    
Commercial and industrial $1,734  $2,533  $3,280  $2,444  $2,348 
Real estate:                    
Commercial real estate  2,092   2,217   3,216   5,038   4,964 
Construction and development  225   233   252   265   362 
1-4 family residential  738   765   898   844   578 
Multi-family residential           1   3 
Consumer  4   21          
Agricultural               
Nonaccrual loans  4,793   5,769   7,646   8,592   8,255 
Accruing loans 90 or more days past due               
Total nonperforming loans  4,793   5,769   7,646   8,592   8,255 
Foreclosed assets, including other real estate:                    
Commercial real estate, construction and development, land and land development  137   295   298   729   1,018 
Residential real estate        407   407   417 
Total foreclosed assets  137   295   705   1,136   1,435 
Total nonperforming assets $4,930  $6,064  $8,351  $9,728  $9,690 
                     
Allowance for Loan Losses (at period end):                    
Commercial and industrial $7,648  $7,439  $7,257  $7,194  $8,466 
Real estate:                    
Commercial real estate  10,930   10,742   10,375   9,640   10,000 
Construction and development  3,335   3,356   3,482   3,364   3,313 
1-4 family residential  1,404   1,329   1,326   1,282   1,138 
Multi-family residential  1,479   1,520   1,419   1,360   1,341 
Consumer  479   517   566   626   599 
Agricultural  66   53   68   69   64 
Other  405   393   285   222   266 
Total allowance for loan losses $25,746  $25,349  $24,778  $23,757  $25,187 
                     
Credit Quality Ratios (at period end):                    
Nonperforming assets to total assets  0.16%  0.20%  0.27%  0.33%  0.33%
Nonperforming loans to total loans  0.20%  0.24%  0.33%  0.39%  0.38%
Allowance for loan losses to nonperforming loans  537.16%  439.40%  324.06%  276.50%  305.11%
Allowance for loan losses to total loans  1.07%  1.08%  1.07%  1.08%  1.15%
                     
                     


 
CBTX, INC. AND SUBSIDIARY
Allowance for Loan Losses (Unaudited)
(In thousands, except percentages)
                 
  For the Three Months Ended 
  6/30/2018 3/31/2018 12/31/2017 9/30/2017 6/30/2017 
Analysis of Allowance for Loan Losses                
                 
Allowance for loan losses at beginning of period $25,349  $24,778  $23,757  $25,187  $25,881  
                 
Provision (recapture) for loan losses  690   865   1,050   (1,654)  (694) 
                 
Net (charge-offs) recoveries                
Commercial and industrial  (301)  (297)  52   205   66  
Real estate:                
Commercial real estate  5   3   (118)  2   2  
Construction and development                
1-4 family residential     (2)  (7)  2   8  
Multi-family residential                
Consumer  3   2   9   4   (90) 
Agricultural        35   11   6  
Other              8  
Total net (charge-offs) recoveries  (293)  (294)  (29)  224     
                 
Allowance for loan losses at end of period $25,746  $25,349  $24,778  $23,757  $25,187  
                 
Net charge-offs (recoveries) to average loans  0.05 % 0.05 %  % (0.04)%  %
                      
                      

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:

                     
  6/30/2018  3/31/2018  12/31/2017  9/30/2017  6/30/2017 
Tangible Equity                    
Total shareholders’ equity $461,195  $451,571  $446,214  $381,121  $371,964 
Adjustments:                    
Goodwill  80,950   80,950   80,950   80,950   80,950 
Other intangibles  6,276   6,521   6,770   7,031   7,298 
Tangible equity $373,969  $364,100  $358,494  $293,140  $283,716 
Tangible Assets                    
Total assets $3,100,760  $3,074,790  $3,081,083  $2,989,838  $2,940,877 
Adjustments:                    
Goodwill  80,950   80,950   80,950   80,950   80,950 
Other intangibles  6,276   6,521   6,770   7,031   7,298 
Tangible assets $3,013,534  $2,987,319  $2,993,363  $2,901,857  $2,852,629 
                     
Common shares outstanding  24,859   24,833   24,833   22,063   22,063 
                     
Book value per share $18.55  $18.18  $17.97  $17.27  $16.86 
Tangible book value per share $15.04  $14.66  $14.44  $13.29  $12.86 
                     
Total shareholders’ equity to total assets  14.87%  14.69%  14.48%  12.75%  12.65%
Tangible equity to tangible assets  12.41%  12.19%  11.98%  10.10%  9.95%
                     

            

Coordonnées