CBOA Financial, Inc. Reports Consolidated Earnings of $543,000 in 1Q 2021

TUCSON, Ariz., May 7, 2021 /PRNewswire/ — CBOA Financial, Inc. (OTCMKTS:CBOF) (the «Company»), parent company of Commerce Bank of Arizona…

TUCSON, Ariz., May 7, 2021 /PRNewswire/ — CBOA Financial, Inc. (OTCMKTS:CBOF) (the «Company»), parent company of Commerce Bank of Arizona (the «Bank» or «CBAZ»), announced that consolidated after tax net income for quarter ending March 31, 2021 increased 46% to $543,000, from $371,000 year-over-year.

Chris Webster, Bank President and Chief Executive Officer commented, «Our year over year performance validates our current operating strategy; successful pursuit of quality loan opportunities combined with disciplined loan pricing. We also continue to steadily decrease the bank’s nonperforming assets which is critical in the current environment. On top of this strong performance, our lending staff processed another $27 million of Paycheck Protection Program (PPP) loans, providing much needed support to Arizona businesses.»

First Quarter 2021 Highlights

  • Traditional (non-PPP) Loan Growth was $18 million, or 10% for the quarter
  • Net Interest Margin increased 10 basis points for the quarter
  • Nonperforming assets decreased 16% for the quarter

Operational Highlights

Interest income was aided by recognized fee income of PPP loans that bolstered earnings by $550,000.  Further contributing to the growth in net interest income was a $41,000 decline in interest expense despite the $1 million increase in total deposits during the quarter.

The Bank continues to make progress on its legacy classified assets. Year-over-year, non-performing assets which include loans and OREO are down 59% from $6.3 million or 2.4% of assets to $2.6 million or 0.77% of assets.

Balance Sheet

Total assets increased by 3% to $365.2 million during the quarter ended March 31, 2021 and increased 49.8% compared to $243.8 million a year ago. Total asset growth from March 2020 to March 2021 consisted of PPP loans funding CBAZ deposit accounts totaling $60 million and organic net deposit growth of roughly $24 million.

Traditional gross loans increased $18 million since fourth quarter 2020 ending the first quarter 2021 at $198 million. Total gross loans increased by 8.3% to $260 million in the quarter and increased 49% compared to $174 million a year ago. Total deposits increased by 0.3% to $305 million during the quarter and increased 43% compared to $213 million a year ago.

The allowance for loan losses totaled $2.97 million at March 31, 2021, or 1.5% of «traditional» non-PPP loans, compared to 1.64% in the previous quarter, and was 1.14% for the quarter with the PPP loans included.

Shareholders’ equity remained at $25 million at March 31, 2021, from the preceding quarter. At March 31, 2021, book value and tangible book value were $2.81 per share compared to $2.81 per share at December 31, 2020 and $2.71 per share a year ago. Excluding the PPP loans, the Bank’s third quarter 2020 Tier 1 Leverage ratio would have been 9.8%, just above 9.2% for fourth quarter 2020 and 11.1% as of March 31, 2020. Growth in total assets associated with the PPP loans was the primary driver of a decline in the Bank’s Tier 1 Leverage ratio.

Capital Management

Capital ratios exceeded regulatory guidelines for a well-capitalized institution under Basel III and Dodd Frank Wall Street Reform requirements at March 31, 2021. Capital ratios are presented below.

About the Company

Commerce Bank of Arizona, established in 2002 in Tucson, Arizona, is a full-service community bank that caters to small-to mid-sized businesses and real estate professionals. CBAZ offers commercial clients with a variety of services ranging from U.S. Small Business Administration (SBA) financing solutions, construction loans, and commercial real estate loans. CBOA Financial, Inc is a single-bank holding company and parent of the Bank. The Company is traded over-the-counter as CBOF. For additional information, visit: www.commercebankaz.com.

Forward-looking Statements

This press release may include forward-looking statements about CBOA Financial, Inc. or Commerce Bank of Arizona. These statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: competition, fluctuations in interest rates, dependency on key individuals, loan defaults, geographical concentration, litigation and changes in federal laws, regulations and interpretations thereof. All forward-looking statements included in this press release are based on information available at the time of the release, and CBOA Financial, Inc. and Commerce Bank of Arizona assume no obligation to update any forward-looking statement.

Unaudited Consolidated Summary Financial Information









Dollars in thousands – Unaudited


For the quarter ended


 Year to Date 


3/31/2021

12/31/2020

3/31/2020


3/31/2021

3/31/2020

Summary Income Data





Interest Income


3,486

3,300

2,826


3,486

2,826

Interest expense


278

319

446


278

446

Net Interest Income


3,208

2,981

2,380


3,208

2,380

Provision for (reduction in) loan losses


(279)


(279)

Non-interest income


70

(107)

8


70

8

Realized gains (losses) on sales of securities


121


121

Non-interest expense


2,523

3,344

2,417


2,523

2,417

Income (loss) before income taxes


755

(470)

371


755

371

Provision for income tax


212

(1,992)


212

Net Income


543

1,522

371


543

371









Per Share Data








Shares outstanding end-of-period


8,268

8,218

8,208


8,268

8,208

Earnings per common share ($’s)


0.07

0.19

0.05


0.07

0.05

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


0.06

0.18

0.04


0.06

0.04

Cash dividend declared



Total shareholders’ equity


25,000

25,070

22,265


25,000

22,265

Tangible Book value per share ($’s)


2.81

2.81

2.71


2.81

2.71









Selected Balance Sheet Data








Total assets


365,470

355,798

243,940


365,470

243,940

Securities available-for-sale


38,630

37,128

30,144


38,630

30,144

Loans


259,893

240,016

174,471


259,893

174,471

Allowance for loan losses


2,972

2,955

2,978


2,972

2,978

Deposits


305,012

304,160

212,807


305,012

212,807

Other borrowings


25,539

16,563

2,370


25,539

2,370

Shareholders’ equity


25,000

25,070

22,265


25,000

22,265









Performance Ratios (%)








Return on average shareholders’ equity

 (annualized) 


8.16

21.54

6.56


8.16

6.56

Net interest margin


3.83

3.73

4.20


3.83

4.20

Efficiency ratio 


75.25

114.92

98.61


75.25

98.61









Asset Quality Data (%)








Nonperforming assets to total assets 


0.77

0.92

2.37


0.77

2.37

Reserve for loan losses to total loans 


1.14

1.23

1.71


1.14

1.71

Charge-offs to average loans for period


(0.03)

0.07

(0.7)


(0.03)

(0.7)









Regulatory Capital Ratios (%)








Common Equity Tier 1 


12.24

12.96

13.61


12.24

13.61

Tier 1 risk-based capital ratio 


12.24

12.96

13.61


12.24

13.61

Total risk-based capital ratio 


13.49

14.21

14.87


13.49

14.87

Tier 1 leverage capital ratio 


8.41

8.56

11.12


8.41

11.12

Contact:

Chris Webster

President & CEO

480-253-4511

cwebster@commercebankaz.com 

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SOURCE Commerce Bank of Arizona