cbtx_Current_Folio_8K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8‑K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):  December 14, 2017

 

 

CBTX, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

Texas

001-38280

20‑8339782

 

 

 

(State or other jurisdiction of

(Commission File Number)

(I.R.S. Employer

 

 

 

incorporation or organization)

 

Identification No.)

 

9 Greenway Plaza, Suite 110

Houston, Texas 77046

(Address of principal executive offices)

 

(713) 210‑7600

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§230.12b-2 of this chapter).

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

29273206.2 


 

Item 2.02    Results of Operations and Financial Condition.

On December 14, 2017, CBTX, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2017.  A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K,  the information furnished in Item 2.02 of this Form 8-K and Exhibit 99.1 to such report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits.  The following are furnished as exhibits to this Current Report on Form 8-K:

 

 

Exhibit Number

Description of Exhibit

99.1

Press Release of CBTX, Inc. dated December 14, 2017.

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

 

CBTX, Inc.

 

 

(Registrant)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date: December 14, 2017

 

/s/ Robert T. Pigott, Jr.

 

 

Robert T. Pigott, Jr.

 

 

Chief Financial Officer

 

 

 

 

 


cbtx_Ex99_1

 

 

Picture 1 

Exhibit 99.1

 

 

CBTX, Inc. Reports Third Quarter Financial Results

 

Houston, Texas, December  14, 2017-- CBTX, Inc.  (the “Company”) (NASDAQ:CBTX), the bank holding company for CommunityBank of Texas N.A., today announced the results for the quarter ended September 30, 2017. The Company reported net income of $10.0 million, or $0.45 per diluted share, for the quarter ended September 30, 2017, compared to $6.8 million, or $0.31 per diluted share, for the quarter ended September 30, 2016 and $8.7 million, or $0.39 per diluted share, for the quarter ended June 30, 2017.

 

Highlights

 

Increased total deposits by $38.8 million to $2.6 billion compared to second quarter 2017.

Improved efficiency ratio of 60.7%, compared to 62.8% for second quarter 2017.

Credit measures remain strong. 

Completed successful initial public offering on November 10, 2017.

 

CBTX, Inc. Chairman and Chief Executive Officer Robert R. Franklin Jr. commented, “We are very pleased to have recently completed our initial public offering of 2.76 million shares of our common stock, generating net proceeds of approximately $64.5 million. We are gratified for the strong investor support received during the IPO process and enthusiastic about the quality of our new shareholders.” 

 

Operating Results:

Net Interest Income

Net interest income was $27.3 million for third quarter 2017, compared to $25.5 million for third quarter 2016 and $26.5 million for second quarter 2017. The increase in net interest income in third quarter 2017 from third quarter 2016 and second quarter 2017 was due to increased average interest-earning asset balances resulting from organic growth and increased average yields for our loan portfolio. 

 

The average balance of total interest-earning assets was $2.7  billion at September 30, 2017, an increase of $61.9 million compared to September 30, 2016 and $46.1 million compared to June 30, 2017.

 

The yield on interest-earning assets was 4.32% for third quarter 2017 compared to 4.16% for third quarter 2016 and 4.32% for second quarter 2017. The increase from the prior year quarter is primarily due to an increase in loan yield. 

 

The cost of interest-bearing liabilities, including borrowings, was 0.60% for third quarter 2017 compared to 0.57% for third quarter 2016 and 0.58% for second quarter 2017. The increase from the prior year and linked quarter is primarily due to higher rates on certificates of deposit. 

 

The net interest margin was 3.98% for third quarter 2017 compared to 3.83% for third quarter 2016 and 3.99% for second quarter 2017.

 

Noninterest Income

 

Noninterest income increased $535 thousand for third quarter 2017, compared to third quarter 2016 and $560 thousand compared to second quarter 2017. The increase in the third quarter 2017 primarily reflects an increase in net gains on sale of assets due to settlement of a legal

 

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matter related to one of our branches and the sale of certain assets of our branches in Huffman and Deweyville.

 

Noninterest Expense

 

Total noninterest expense increased $987 thousand compared to third quarter 2016 and increased $158 thousand compared to second quarter 2017.

 

The increase in noninterest expense compared to third quarter 2016 is due primarily to increases of $832 thousand in salaries and employee benefits and  $242 thousand in repossessed real estate and other asset expense.  

 

The increase from the linked quarter is primarily related to increases of $530 thousand in salaries and employee benefits, $255 thousand in repossessed real estate and other asset expense, partially offset by a decrease of $242 thousand in advertising, marketing and business development expenses.

 

Provision (Recapture) for Loan Losses

 

Provision for loan loss was a recapture of $1.7 million for third quarter 2017, a decrease of $2.9 million and $960 thousand,  respectively compared to a provision of $1.2 million for third quarter 2016 and a recovery of $694 thousand for second quarter 2017. The recaptures in third and second quarter 2017 are primarily the result of pay-offs of certain classified and problem loans, which resulted in a decrease in their related allowance for loan losses.

 

The allowance for loan losses was $23.8 million, or 1.08% of total loans, at September 30, 2017, compared to $27.1 million, or 1.25% of total loans at September 30, 2016 and compared to $25.2 million, or 1.15% of total loans, at June 30, 2017. These changes are primarily the result of the recaptures mentioned above.

 

Income Taxes

 

Income tax expense was  $3.9 million for third quarter 2017, $3.0 million for third quarter 2016 and $3.2 million for second quarter 2017. The effective tax rates were 28.11% for third quarter 2017, 30.90% for third quarter 2016 and 26.76% for second quarter 2017. The lower tax rate in second quarter 2017 was due to true-ups and return to provision adjustments booked in that quarter.

 

 

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Balance  Sheet Highlights: 

Loans

Total net loans were $2.2 million at September 30, 2017. Total net loans increased $33.5 million from September 30, 2016 to September 30, 2017, resulted from a $30.7 million increase in commercial and industrial loans, a $16.5 million increase in real estate loans and a $17.9 million decrease in other loans.

 

The increase in total net loans of $8.5 million from June 30, 2017 to September 30, 2017 resulted from a $13.8 million increase in commercial and industrial loans, a $532,000 decrease in real estate loans and a $6.1 million decrease in other loans.

 

Asset Quality

 

Nonperforming assets were  $9.7 million, or 0.33% of total assets at September 30, 2017,  $9.7 million, or 0.33% of total assets at June 30, 2017 and $13.9 million, or 0.47% of total assets at September 30, 2016.

 

Nonperforming loans were  $8.6  million, or 0.39% of total loans at September 30, 2017, $8.3  million, or 0.38% of total loans at June 30, 2017 and $11.4 million, or 0.52% of total loans at September 30, 2016.

 

The decrease in nonperforming assets and loans from September 30, 2016 to September 30, 2017 was primarily due to pay-offs, charge-offs and improvements in overall asset quality.

 

Annualized net charge-offs (recoveries) to average loans was (0.04)% for third quarter 2017, 0.00% for second quarter 2017 and 0.16% for third quarter 2016. The recaptures in third quarter 2017 are primarily the result of pay-offs of certain classified and problem loans.

 

Deposits and Borrowings

 

Total deposits were $2.6 billion at September 30, 2017 compared to $2.5 billion at June 30, 2017 and $2.5  billion at September 30, 2016. The increase from the prior year is primarily due to organic growth.

 

Total borrowings (excluding junior subordinated debentures) were $26.6 million at September 30, 2017, $27.6 million at June 30, 2017 and $30.4 million at September 30, 2016. The decrease in borrowings is due to scheduled payments. In November 2017, we repaid the outstanding balance of $23.3 million in full and we entered into a loan agreement with Frost Bank providing for a $30 million revolving line of credit on December 13, 2017. 

 

Capital

 

At September 30, 2017, we  were well capitalized under regulatory guidelines. At September 30, 2017, our ratio of total shareholders’ equity to total assets was 12.75% and our tangible equity to total tangible assets was 10.10%. 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.  Net proceeds are estimated to be $64.5 million.

 

 

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About CBTX, Inc.

 

CBTX, Inc. is the bank holding company for CommunityBank of Texas, N.A., a $3.0 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 subsidiaries. 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 Final Prospectus filed pursuant to Rule 424(b)(4) 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.

 

 

 

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CBTX, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands)

 

 

    

9/30/17

    

6/30/17

    

3/31/17

    

12/31/16

    

9/30/16

 

Balance Sheet Data (at period end):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, excluding loans held for sale

 

$

2,199,478 

 

$

2,192,443 

 

$

2,217,656 

 

$

2,154,885 

 

$

2,169,307 

 

Allowance for loan losses

 

 

(23,757)

 

 

(25,187)

 

 

(25,881)

 

 

(25,006)

 

 

(27,096)

 

Loans, net

 

 

2,175,721 

 

 

2,167,256 

 

 

2,191,775 

 

 

2,129,879 

 

 

2,142,211 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

 

54,117 

 

 

58,124 

 

 

52,669 

 

 

53,000 

 

 

54,524 

 

Interest‑bearing deposits at other financial institutions

 

 

294,461 

 

 

249,049 

 

 

219,686 

 

 

329,103 

 

 

324,768 

 

Total cash and cash Equivalents

 

 

348,578 

 

 

307,173 

 

 

272,355 

 

 

382,103 

 

 

379,292 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities

 

 

217,660 

 

 

220,330 

 

 

219,978 

 

 

205,978 

 

 

179,701 

 

Premises and equipment, net

 

 

54,129 

 

 

56,609 

 

 

55,986 

 

 

57,514 

 

 

60,416 

 

Goodwill

 

 

80,950 

 

 

80,950 

 

 

80,950 

 

 

80,950 

 

 

80,950 

 

Other intangible assets, net

 

 

7,031 

 

 

7,298 

 

 

7,513 

 

 

7,791 

 

 

8,074 

 

Repossessed real estate and other assets

 

 

1,136 

 

 

1,435 

 

 

1,179 

 

 

1,861 

 

 

2,530 

 

Loans held for sale

 

 

466 

 

 

559 

 

 

675 

 

 

613 

 

 

727 

 

Other assets

 

 

104,167 

 

 

99,267 

 

 

84,137 

 

 

84,833 

 

 

82,721 

 

Total Assets

 

$

2,989,838 

 

$

2,940,877 

 

$

2,914,548 

 

$

2,951,522 

 

$

2,936,622 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest‑bearing deposits

 

$

1,051,755 

 

$

1,030,865 

 

$

993,839 

 

$

1,025,425 

 

$

1,025,429 

 

Interest‑bearing deposits

 

 

1,502,872 

 

 

1,485,919 

 

 

1,504,606 

 

 

1,515,335 

 

 

1,503,802 

 

Total deposits

 

 

2,554,627 

 

 

2,516,784 

 

 

2,498,445 

 

 

2,540,760 

 

 

2,529,231 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note payable

 

 

24,357 

 

 

25,464 

 

 

26,571 

 

 

27,679 

 

 

28,786 

 

Repurchase agreements

 

 

2,239 

 

 

2,179 

 

 

2,464 

 

 

2,343 

 

 

1,583 

 

Junior subordinated debt

 

 

6,726 

 

 

6,726 

 

 

6,726 

 

 

6,726 

 

 

6,726 

 

Other liabilities

 

 

20,768 

 

 

17,760 

 

 

16,699 

 

 

16,377 

 

 

17,778 

 

Total Liabilities

 

 

2,608,717 

 

 

2,568,913 

 

 

2,550,905 

 

 

2,593,885 

 

 

2,584,104 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

381,121 

 

 

371,964 

 

 

363,643 

 

 

357,637 

 

 

352,518 

 

Total Liabilities and Shareholders’ Equity

 

$

2,989,838 

 

$

2,940,877 

 

$

2,914,548 

 

$

2,951,522 

 

$

2,936,622 

 

 

 

5

 


 

CBTX, INC. AND SUBSIDIARY

Condensed  Consolidated Statements of Income (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

Year-to-Date

 

 

 

9/30/17

 

6/30/17

 

3/31/17

 

12/31/16

 

9/30/16

 

9/30/17

 

9/30/16

 

INTEREST INCOME

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

 

Interest and fees on loans

 

$

27,129 

 

$

26,560 

 

$

25,953 

 

$

26,298 

 

$

26,121 

 

$

79,642 

 

$

77,425 

 

Securities

 

 

1,334 

 

 

1,353 

 

 

1,303 

 

 

1,055 

 

 

973 

 

 

3,990 

 

 

2,746 

 

Federal Funds and interest‑bearing deposits

 

 

1,106 

 

 

813 

 

 

742 

 

 

658 

 

 

601 

 

 

2,661 

 

 

1,769 

 

Total Interest Income

 

 

29,569 

 

 

28,726 

 

 

27,998 

 

 

28,011 

 

 

27,695 

 

 

86,293 

 

 

81,940 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

1,964 

 

 

1,857 

 

 

1,838 

 

 

1,914 

 

 

1,851 

 

 

5,659 

 

 

5,159 

 

Repurchase agreements

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

Note payable

 

 

269 

 

 

264 

 

 

251 

 

 

256 

 

 

260 

 

 

784 

 

 

805 

 

Junior subordinated debt

 

 

83 

 

 

79 

 

 

74 

 

 

72 

 

 

67 

 

 

236 

 

 

194 

 

Total Interest Expense

 

 

2,318 

 

 

2,201 

 

 

2,165 

 

 

2,244 

 

 

2,178 

 

 

6,684 

 

 

6,161 

 

NET INTEREST INCOME

 

 

27,251 

 

 

26,525 

 

 

25,833 

 

 

25,767 

 

 

25,517 

 

 

79,609 

 

 

75,779 

 

PROVISION (RECAPTURE) FOR LOAN LOSS

 

 

(1,654)

 

 

(694)

 

 

960 

 

 

650 

 

 

1,225 

 

 

(1,388)

 

 

3,925 

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSS

 

 

28,905 

 

 

27,219 

 

 

24,873 

 

 

25,117 

 

 

24,292 

 

 

80,997 

 

 

71,854 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposit account service charges

 

 

1,395 

 

 

1,517 

 

 

1,500 

 

 

1,591 

 

 

1,695 

 

 

4,412 

 

 

4,947 

 

Net gain on sale of assets

 

 

828 

 

 

339 

 

 

364 

 

 

1,282 

 

 

107 

 

 

1,531 

 

 

640 

 

Card interchange fees

 

 

803 

 

 

877 

 

 

832 

 

 

830 

 

 

837 

 

 

2,512 

 

 

2,522 

 

Earnings on bank‑owned life insurance

 

 

459 

 

 

335 

 

 

326 

 

 

276 

 

 

339 

 

 

1,120 

 

 

1,016 

 

Other

 

 

601 

 

 

458 

 

 

426 

 

 

421 

 

 

573 

 

 

1,485 

 

 

2,224 

 

Total Noninterest Income

 

 

4,086 

 

 

3,526 

 

 

3,448 

 

 

4,400 

 

 

3,551 

 

 

11,060 

 

 

11,349 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

11,829 

 

 

11,299 

 

 

11,424 

 

 

11,181 

 

 

10,997 

 

 

34,552 

 

 

33,058 

 

Net occupancy expense

 

 

2,221 

 

 

2,351 

 

 

2,233 

 

 

2,448 

 

 

2,322 

 

 

6,805 

 

 

7,652 

 

Regulatory fees

 

 

458 

 

 

621 

 

 

610 

 

 

606 

 

 

546 

 

 

1,689 

 

 

1,694 

 

Data processing

 

 

662 

 

 

651 

 

 

642 

 

 

623 

 

 

621 

 

 

1,955 

 

 

1,861 

 

Printing, stationery and office

 

 

348 

 

 

370 

 

 

347 

 

 

444 

 

 

395 

 

 

1,065 

 

 

1,094 

 

Amortization of intangibles

 

 

267 

 

 

271 

 

 

278 

 

 

283 

 

 

290 

 

 

816 

 

 

884 

 

Professional and director fees

 

 

606 

 

 

706 

 

 

625 

 

 

680 

 

 

615 

 

 

1,937 

 

 

1,801 

 

Correspondent bank and customer related transaction expenses

 

 

67 

 

 

78 

 

 

74 

 

 

77 

 

 

82 

 

 

219 

 

 

243 

 

Loan processing costs

 

 

115 

 

 

133 

 

 

72 

 

 

192 

 

 

77 

 

 

320 

 

 

317 

 

Advertising, marketing and business development

 

 

266 

 

 

508 

 

 

179 

 

 

219 

 

 

173 

 

 

953 

 

 

570 

 

Repossessed real estate and other asset expense

 

 

340 

 

 

85 

 

 

118 

 

 

99 

 

 

98 

 

 

543 

 

 

219 

 

Security and protection expense

 

 

331 

 

 

352 

 

 

372 

 

 

363 

 

 

473 

 

 

1,055 

 

 

1,355 

 

Other expenses

 

 

1,507 

 

 

1,434 

 

 

1,453 

 

 

1,423 

 

 

1,341 

 

 

4,394 

 

 

4,116 

 

Total Noninterest Expense

 

 

19,017 

 

 

18,859 

 

 

18,427 

 

 

18,638 

 

 

18,030 

 

 

56,303 

 

 

54,864 

 

NET INCOME BEFORE INCOME TAX EXPENSE

 

 

13,974 

 

 

11,886 

 

 

9,894 

 

 

10,879 

 

 

9,813 

 

 

35,754 

 

 

28,339 

 

INCOME TAX EXPENSE

 

 

3,927 

 

 

3,181 

 

 

3,032 

 

 

3,322 

 

 

3,032 

 

 

10,140 

 

 

8,688 

 

NET INCOME

 

$

10,047 

 

$

8,705 

 

$

6,862 

 

$

7,557 

 

$

6,781 

 

$

25,614 

 

$

19,651 

 

 

 

6

 


 

CBTX, INC. AND SUBSIDIARY

Financial Highlights  (Unaudited) 

(In thousands, except per share data and percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At or for the Three Months Ended

 

Year-to-Date

 

 

 

9/30/17

 

6/30/17

 

3/31/17

 

12/31/16

 

9/30/16

 

9/30/17

 

9/30/16

 

Profitability:

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

    

 

    

 

Net income

 

$

10,047 

 

$

8,705 

 

$

6.862 

 

$

7,557 

 

$

6,781 

 

$

25,614 

 

$

19,651 

 

Basic earnings per share

 

$

0.46 

 

$

0.39 

 

$

0.31 

 

$

0.34 

 

$

0.31 

 

$

1.16 

 

$

0.89 

 

Diluted earnings per share

 

$

0.45 

 

$

0.39 

 

$

0.31 

 

$

0.34 

 

$

0.31 

 

$

1.16 

 

$

0.88 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

 

1.34 

%  

 

1.20 

%  

 

0.95 

%  

 

1.02 

%  

 

0.93 

%  

 

1.17 

%  

 

0.92 

%

Return on average shareholders’ Equity(1)

 

 

10.54 

%  

 

9.46 

%  

 

7.73 

%  

 

8.47 

%  

 

7.72 

%  

 

9.25 

%  

 

7.56 

%

Net interest margin – tax equivalent(1)

 

 

4.07 

%  

 

4.08 

%  

 

4.02 

%  

 

3.87 

%  

 

3.92 

%  

 

4.05 

%  

 

3.99 

%

Efficiency ratio(2)

 

 

60.69 

%  

 

62.76 

%  

 

62.93 

%  

 

61.78 

%  

 

62.03 

%  

 

62.10 

%  

 

62.97 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liquidity and Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity to total assets

 

 

12.75 

%  

 

12.65 

%  

 

12.48 

%  

 

12.12 

%  

 

12.00 

%  

 

12.75 

%  

 

12.00 

%

Tangible equity to tangible assets(3)

 

 

10.10 

%  

 

9.95 

%  

 

9.74 

%  

 

9.39 

%  

 

9.25 

%  

 

10.10 

%  

 

9.25 

%

Common equity tier 1 capital Ratio

 

 

12.87 

%  

 

12.00 

%  

 

11.32 

%  

 

11.52 

%  

 

11.03 

%  

 

12.87 

%  

 

11.03 

%

Tier 1 leverage ratio

 

 

11.01 

%  

 

10.39 

%  

 

10.10 

%  

 

9.78 

%  

 

9.68 

%  

 

11.01 

%  

 

9.68 

%

Tier 1 risk‑based capital ratio

 

 

13.13 

%  

 

12.26 

%  

 

11.58 

%  

 

11.78 

%  

 

11.30 

%  

 

13.13 

%  

 

11.30 

%

Total risk‑based capital ratio

 

 

14.13 

%  

 

13.33 

%  

 

12.64 

%  

 

12.85 

%  

 

12.45 

%  

 

14.13 

%  

 

12.45 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average basic shares outstanding

 

 

22,063 

 

 

22,062 

 

 

22,062 

 

 

21,933 

 

 

21,871 

 

 

22,062 

 

 

22,067 

 

Weighted average diluted shares outstanding

 

 

22,138 

 

 

22,148 

 

 

22,162 

 

 

22,007 

 

 

21,993 

 

 

22,144 

 

 

22,205 

 

Common shares outstanding at period end

 

 

22,063 

 

 

22,063 

 

 

22,062 

 

 

22,062 

 

 

21,870 

 

 

22,063 

 

 

21,870 

 

Dividends per share

 

$

0.05 

 

$

0.05 

 

$

0.05 

 

$

0.05 

 

$

0.05 

 

$

0.15 

 

$

0.15 

 

Book value per share

 

$

17.27 

 

$

16.86 

 

$

16.48 

 

$

16.21 

 

$

16.12 

 

$

17.27 

 

$

16.12 

 

Tangible book value per share(3)

 

$

13.29 

 

$

12.86 

 

$

12.47 

 

$

12.19 

 

$

12.05 

 

$

13.29 

 

$

12.05 

 

Employees – full-time equivalent

 

 

464 

 

 

472 

 

 

479 

 

 

479 

 

 

475 

 

 

464 

 

 

475 

 


(1)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.”

 

7

 


 

CBTX, INC. AND SUBSIDIARY

Net Interest Margin  (Unaudited) 

(In thousands, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended 

 

 

 

9/30/17

 

6/30/17

 

9/30/16

 

(Dollars in thousands)

 

Average
Outstanding
Balance

 

Interest
Earned/
Interest
Paid

 

Average
Yield/
Rate
(1)

 

Average
Outstanding
Balance

 

Interest
Earned/
Interest
Paid

 

Average
Yield/
Rate
(1)

 

Average
Outstanding
Balance

 

Interest
Earned/
Interest
Paid

 

Average
Yield/
Rate
(1)

 

Assets

  

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

  

 

 

  

 

 

  

 

 

Interest‑earnings assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(2)

 

$

2,191,016 

 

$

27,129 

 

4.91 

$

2,203,145 

 

$

26,560 

 

4.84 

$

2,149,917 

 

$

26,121 

 

4.83 

%

Securities (available for sale and held to maturity)

 

 

223,132 

 

 

1,334 

 

2.37 

 

220,903 

 

 

1,353 

 

2.46 

 

176,699 

 

 

973 

 

2.19 

%

Federal funds sold and other interest‑earning assets

 

 

284,334 

 

 

927 

 

1.29 

 

228,393 

 

 

637 

 

1.12 

 

309,939 

 

 

431 

 

0.55 

%

Nonmarketable equity securities

 

 

14,695 

 

 

179 

 

4.83 

 

14,691 

 

 

176 

 

4.81 

 

14,682 

 

 

170 

 

4.61 

%

Total interest‑earning assets

 

 

2,713,177 

 

$

29,569 

 

4.32 

 

2,667,132 

 

$

28,726 

 

4.32 

 

2,651,237 

 

$

27,695 

 

4.16 

%

Allowance for loan losses

 

 

(25,316)

 

 

 

 

 

 

 

(26,439)

 

 

 

 

 

 

 

(26,957)

 

 

 

 

 

 

Noninterest‑earnings assets

 

 

290,767 

 

 

 

 

 

 

 

274,421 

 

 

 

 

 

 

 

278,623 

 

 

 

 

 

 

Total assets

 

$

2,978,628 

 

 

 

 

 

 

$

2,915,114 

 

 

 

 

 

 

$

2,902,903 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest‑bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest‑bearing deposits

 

$

1,501,732 

 

$

1,964 

 

0.52 

$

1,478,578 

 

$

1,857 

 

0.50 

$

1,473,177 

 

$

1,851 

 

0.50 

%

Repurchase agreements

 

 

2,404 

 

 

 

0.33 

 

2,356 

 

 

 

0.17 

 

1,478 

 

 

 

%

Note payable

 

 

24,742 

 

 

269 

 

4.31 

 

25,841 

 

 

264 

 

4.10 

 

29,171 

 

 

260 

 

3.55 

%

Junior subordinated debt

 

 

10,826 

 

 

83 

 

3.04 

 

10,826 

 

 

79 

 

2.93 

 

10,826 

 

 

67 

 

2.46 

%

Total interest‑bearing liabilities

 

 

1,539,704 

 

$

2,318 

 

0.60 

 

1,517,601 

 

$

2,201 

 

0.58 

%  

 

1,514,652 

 

$

2,178 

 

0.57 

%

Noninterest‑bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest‑bearing deposits

 

 

1,041,731 

 

 

 

 

 

 

 

1,010,824 

 

 

 

 

 

 

 

1,020,446 

 

 

 

 

 

 

Other liabilities

 

 

18,844 

 

 

 

 

 

 

 

17,564 

 

 

 

 

 

 

 

18,559 

 

 

 

 

 

 

Total noninterest‑bearing liabilities

 

 

1,060,575 

 

 

 

 

 

 

 

1,028,388 

 

 

 

 

 

 

 

1,039,005 

 

 

 

 

 

 

Shareholders’ equity

 

 

378,349 

 

 

 

 

 

 

 

369,125 

 

 

 

 

 

 

 

349,246 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

2,978,628 

 

 

 

 

 

 

$

2,915,114 

 

 

 

 

 

 

$

2,902,903 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

27,251 

 

 

 

 

 

 

$

26,525 

 

 

 

 

 

 

$

25,517 

 

 

 

Net interest rate spread(3)

 

 

 

 

 

 

 

3.73 

 

 

 

 

 

 

3.74 

 

 

 

 

 

 

3.58 

%

Net interest margin(4)

 

 

 

 

 

 

 

3.98 

 

 

 

 

 

 

3.99 

 

 

 

 

 

 

3.83 

%

Net interest margin—tax equivalent(5)

 

 

 

 

 

 

 

4.07 

 

 

 

 

 

 

4.08 

 

 

 

 

 

 

3.92 

%


(1)Annualized. 

(2)Includes average outstanding balances of loans held for sale of $1.0 million, $770 thousand and $1.0 million for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016, 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 $1.1 million, $585 thousand and $1.1 million for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016, respectively, has been computed using a federal income tax rate of 35%.

 

 

8

 


 

CBTX, INC. AND SUBSIDIARY

Net Interest Margin  (Unaudited) 

(In thousands, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

 

 

 

2017

 

2016

 

(Dollars in thousands)

 

Average
Outstanding
Balance

 

Interest
Earned/
Interest
Paid

 

Average
Yield/
Rate
(1)

 

Average
Outstanding
Balance

 

Interest
Earned/
Interest
Paid

 

Average
Yield/
Rate
(1)

 

Assets

    

 

    

    

 

    

    

    

    

 

    

    

 

    

    

    

 

Interest‑earnings assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans(2)

 

$

2,190,975 

 

$

79,642 

 

4.86 

%  

$

2,127,840 

 

$

77,425 

 

4.86 

%

Securities (available for sale and held to maturity)

 

 

220,396 

 

 

3,990 

 

2.42 

%  

 

161,643 

 

 

2,746 

 

2.27 

%

Federal funds sold and other interest‑earning assets

 

 

257,628 

 

 

2,110 

 

1.10 

%  

 

297,283 

 

 

1,239 

 

0.56 

%

Nonmarketable equity securities

 

 

14,690 

 

 

551 

 

5.01 

%  

 

14,684 

 

 

530 

 

4.82 

%

Total interest‑earning assets

 

 

2,683,689 

 

$

86,293 

 

4.30 

%  

 

2,601,450 

 

$

81,940 

 

4.21 

%

Allowance for loan losses

 

 

(25,719)

 

 

 

 

 

 

 

(26,648)

 

 

 

 

 

 

Noninterest‑earnings assets

 

 

280,139 

 

 

 

 

 

 

 

278,191 

 

 

 

 

 

 

Total assets

 

$

2,938,109