Cbtx, Inc. (CBTX) 10-Q Quarterly Report October 2021

Houston, Texas, July 28, 2021 -- CBTX, Inc., or the Company (NASDAQ: CBTX), the bank holding company for CommunityBank of Texas, N.A., or the Bank, today announced its results for the second quarter of 2021.

Robert R. Franklin, Jr., Chairman, CEO and President of the Company stated, “We are proud to present our second quarter financial results which we think are indicative of a transition from a COVID dominated economy to a more robust, growth economy. We have seen credit steadily improve, deposits continue to grow, customers beginning to develop new projects and look to expand their operations, and our local economy rally with improvement in the unemployment picture. We are seeing a more natural flow of payoffs as people sell projects or modify them into more permanent financing.”

Mr. Franklin continued, “Our officers are increasing their pace of in-person meetings, and we are seeing our pipeline expand as we continue into the third quarter. We expect to continue to see new and improved activity through the third and fourth quarter.”

Mr. Franklin added, “We have been provided significant liquidity by our customer base. Our job is to stay focused and disciplined on our credit culture as we put these funds to work. Competition for business is stiff and the rate environment is challenging; however, these are issues we have dealt with since our inception. We are happy to be in a more robust economy and will continue to use that growth to continue to build CBTX for the future.”

Highlights

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Net income was $11.7 million for the second quarter of 2021, or $0.48 per diluted share, compared to $10.0 million, or $0.41 per diluted share, for the first quarter of 2021 and $2.2 million, or $0.09 per diluted share, for the second quarter of 2020.

●

Recapture of allowance for credit losses, or ACL, of $5.1 million, primarily due to continued improvements in the national economy and forward-looking national economic forecasts, improved loan quality and the reduction of loan balances and unfunded commitments during the second quarter of 2021.

●

Net interest margin on a tax equivalent basis decreased to 3.29% for the second quarter of 2021, compared to 3.71% for the first quarter of 2021, primarily due to lower loan rates and average balances for the loan portfolio.

●	Cash and equivalents increased $183.7 million to $788.4 million during the second quarter of 2021, primarily due to net deposit inflows and loan payments received.

Operating Results

Net Interest Income

Net interest income was $31.0 million for the second quarter of 2021, compared to $33.1 million for the first quarter of 2021 and $32.2 million for the second quarter of 2020. Net interest income decreased $2.1 million during the second quarter of 2021, compared to the first quarter of 2021, primarily due to lower loan rates and lower average loans, partially offset by the impact of one additional day, higher average securities and lower rates on interest-bearing deposits in the second quarter of 2021. Net interest income includes $1.5 million of net fees recognized on Paycheck Protection Program, or PPP, loans in the second quarter of 2021, compared to $3.2 million recognized in the first quarter of 2021.

Net interest income decreased $1.1 million during the second quarter of 2021, compared to the second quarter of 2020, primarily due to lower rates on interest-earning assets, lower average loans and higher average interest-bearing deposits, partially offset by lower rates on interest-bearing deposits and higher average securities and other interest-earning assets.

The following information was filed by Cbtx, Inc. (CBTX) on Wednesday, July 28, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Cbtx, Inc.'s 10-Q Quarterly Report:

Other - Other Highlight
Cash and Equivalents Cash and equivalents increased $460.8 million during the nine months ended September 30, 2021, primarily due to loan payments received and net deposit inflows.

Financial - Income Highlight
Noninterest Income The following table presents components of noninterest income for the third quarters of 2021 and 2020, the nine months ended September 30, 2021 and 2020 and the period-over-period changes in the categories of noninterest income: 45 The increase in noninterest income of $1.5 million and $905,000 during the three and nine months ended September 30, 2021, respectively, compared to the three and nine months ended September 30, 2020, was primarily due to an increase in earnings on bank-owned life insurance due to related gains of $1.9 million and $769,000 during the third quarter of 2021 and 2020.
Other - Other Highlight
The following discussion and analysis presents what the Company believes is the material information relevant to and assessment of its financial condition and results of operations for the periods presented and should be read in conjunction with the Company's condensed consolidated financial statements and the accompanying notes included in "Part I-Item 1-Financial Statements" of this Quarterly Report on Form 10-Q, as well as the Company's consolidated financial statements and the accompanying notes for the year ended December 31, 2020, included in the Company's Annual Report on Form 10-K.
Financial - Shares Highlight
The following table reconciles, 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, total shareholders' equity to total assets and tangible equity to tangible assets: 59 Emerging Growth Company The Jump Start Our Business Start-ups, or JOBS Act, permits an "emerging growth company" to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies.
Financial - Earnings Highlight
The increase of $151.7 million in noninterest-bearing deposits contributed to the increase in interest-earning assets during 2021, which had the effect of creating a higher economic value of equity.
Other - Other
Non-GAAP financial measures do not...Read more
Other - Other
The COVID-19 pandemic and actions...Read more
Financial - Income
Income tax expense and effective...Read more
Financial - Earnings
As a result of these...Read more
Other - Other
At September 30, 2021, the...Read more
Financial - Earnings
Yields on interest-earning assets decreased...Read more
Financial - Earnings
Yields on interest-earning assets decreased...Read more
Financial - Shares
The Company calculates tangible equity...Read more
Other - Other
Non-GAAP financial measures should not...Read more
Other - Other
Moreover, the way the Company...Read more
Financial - Expense
The increase in noninterest expense...Read more
Other - Other
The ACL was reduced during...Read more
Other - Other
Other Assets Other assets decreased...Read more
Other - Other
Allowance for Credit Losses The...Read more
Other - Other
As a result of improvements...Read more
Other - Other
Through the Company's relationship-driven, community...Read more
Financial - Expense
Although competitive pressures have caused...Read more
Financial - Expense
Professional and director fees increased...Read more
Financial - Expense
Securities The amortized cost, related...Read more
Financial - Earnings
The Company's internal policy regarding...Read more
Other - Other
Commitments to extend credit and...Read more
Other - Other
The Company calculates tangible assets...Read more
Other - Other
The Company has asset, liability...Read more
Other - Other
Due to the continued improvements...Read more
Financial - Earnings
41 The following table presents...Read more
Financial - Earnings
43 The following table presents...Read more
Other - Other
48 The contractual maturity ranges...Read more
Financial - Expense
The Bank has incurred material...Read more
Other - Other
The balance of the ACL...Read more
Other - Other
Deposits Total deposits as of...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Cbtx, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: CBTX
CIK: 1473844
Form Type: 10-Q Quarterly Report
Accession Number: 0001558370-21-013647
Submitted to the SEC: Wed Oct 27 2021 5:09:45 PM EST
Accepted by the SEC: Wed Oct 27 2021
Period: Thursday, September 30, 2021
Industry: National Commercial Banks