CBB Bancorp, Inc. Reports First Quarter 2026 Financial Results

LOS ANGELES--(BUSINESS WIRE)--CBB Bancorp, Inc. ("CBB" or the "Company") (OTCQX: CBBI), the holding company of Commonwealth Business Bank, doing business as “CBB Bank” (the "Bank"), announced today net income of $5.7 million for the first quarter 2026, or $0.53 per diluted share compared to $4.5 million in the fourth quarter 2025, or $0.42 per diluted share.

First Quarter 2026 Highlights

• Net income: $5.7 million, or $0.53 per diluted share
• Efficiency ratio: 54.85%, compared to 63.13% in the prior quarter
• SBA loan sales: $48.2 million sold at an average premium of 8.0%

Net income for the first quarter of 2026 increased from the previous quarter primarily on higher noninterest income and lower noninterest expenses, partially offset by lower net interest income and higher provision for credit losses.

The net interest margin for the first quarter of 2026 was 3.13%, compared with 3.16% in the fourth quarter of 2025 and 3.38% in the first quarter of 2025. The efficiency ratio was 54.85%, compared with 63.13% in the prior quarter and 60.41% in the same period last year.

Seungho Park, President and CEO, said, “Our first quarter 2026 results underscore a successful shift toward operational excellence. By prioritizing higher-quality earnings and improving our efficiency ratio, we increased net income despite a flat economic growth environment and margin compression. While focusing on the ways of remarkable improvement in profitability and operational efficiency, CBB is additionally committed to pursuing an expansion strategy for growth throughout 2026, with a specific emphasis on penetrating untapped markets. To that end, our primary strategic objective for the year is to build a robust presence in these regions where we believe there are considerable opportunities and to invest in building up extensive marketing network and improving efficiency through operational automation.”

INCOME STATEMENT

Net Interest Income

Net interest income for the first quarter 2026 was $14.8 million, a decrease of $826 thousand or 5.3% from the prior quarter and generally consistent with the first quarter of 2025.

The quarter-over-quarter decrease was primarily attributable to margin compression driven by lower yields on interest-earning assets in a declining interest rate environment, partially offset by a modest decline in funding costs.

Net Interest Margin

The net interest margin for the first quarter 2026 was 3.13% compared to 3.16% for the fourth quarter 2025 and 3.38% for the first quarter 2025. The cost of funds for the first quarter 2026 was 3.25% compared to 3.30% for the fourth quarter 2025 and 3.34% for the first quarter 2025.

The decrease in net interest margin from the prior quarter was primarily attributable to the decrease in yields on interest-earning assets.

Provision for Credit Losses

The Company recorded a total provision for credit losses of $500 thousand for the first quarter of 2026, compared to $300 thousand in the fourth quarter of 2025 and $500 thousand in the first quarter of 2025. The sequential increase is attributable to updated loss expectations under the current interest rate environment and a prudent strengthening of our allowance for credit losses (ACL) to total loans ratio, which now stands at 1.20%.

Noninterest Income

Noninterest income for the first quarter of 2026 was $3.6 million, compared to $1.8 million in the prior quarter and $2.1 million in the same quarter of 2025. The quarter-over-quarter increase in noninterest income was primarily the result of higher gain on sales of loans.

Noninterest Expenses

Noninterest expenses totaled $10.1 million for the first quarter of 2026, compared to $11.0 million in the prior quarter and $10.2 million in the first quarter of 2025. Noninterest expenses decreased by $899 thousand quarter-over-quarter due to lower salaries and employee benefits costs, professional fee expenses, and other operating expenses.

The efficiency ratio improved to 54.85%, compared to 63.13% in the prior quarter, reflecting lower noninterest expenses and higher noninterest income from SBA loan sales.

Income Taxes

The Company’s effective tax rate for the first quarter of 2026 was 27.7%, compared to 26.7% for the fourth quarter of 2025 and 28.3% for the first quarter of 2025, which remains within the Company’s expected annual range.

BALANCE SHEET

Investment Securities

Investment securities were $64.7 million at March 31, 2026, a decrease of $1.1 million, or 1.6%, from December 31, 2025, and an increase of $3.2 million, or 5.1%, from March 31, 2025. The quarterly decline was mainly driven by scheduled principal paydown and a strategic decision to limit reinvestment during the period.

Loans Receivable

Loans receivable, including loans held-for-sale, totaled $1.47 billion at March 31, 2026, an increase of $3.9 million, or 0.3%, from the prior quarter and $16.1 million, or 1.1%, from a year earlier, reflecting modest loan growth driven by continued strong loan production, partially offset by loan sales.

The Company’s loan originations remained robust, totaling $107.9 million for the quarter, compared to $97.5 million in the prior quarter.

Allowance for Credit Losses and Asset Quality

The Allowance for Credit Losses (“ACL”) was $16.9 million at March 31, 2026, representing 1.20% of loans held-for-investment, compared to $16.3 million, or 1.17%, at December 31, 2025, and $14.9 million, or 1.18%, at March 31, 2025.

Total nonperforming assets at March 31, 2026, were $22.7 million compared to $21.6 million at December 31, 2025, and $ 11.7 million at March 31, 2025, primarily driven by an increase in nonaccrual loans.

The ACL coverage to nonperforming assets was over 74.00% at March 31, 2026.

SBA Loans Held-for-Sale

Total SBA loans held-for-sale were $62.2 million as of March 31, 2026, compared to $65.4 million at December 31, 2025, and $194.5 million at March 31, 2025.

During the quarter, the Bank sold $48.2 million in SBA loans at an average premium of 8.0%, compared to $19.7 million sold at an average premium of 6.8% in the prior quarter and $19.8 million sold at 8.1% average premium in the same quarter of 2025.

Deposits

Total deposits were $1.69 billion at March 31, 2026, a decrease of $20.9 million, or 1.2%, from the prior quarter but an increase of $209.2 million, or 14.2%, from a year earlier.

The Bank continued to strengthen its funding profile with noninterest-bearing deposits increase. Noninterest-bearing deposits were $309.2 million at March 31, 2026, an increase of $7.4 million, or 2.5%, from the prior quarter and an increase of $13.3 million, or 4.5%, from a year ago, reflecting sustained momentum in core organic deposit growth and a disciplined approach to managing the cost of funds.

Borrowings

The Bank had no outstanding borrowings as of March 31, 2026, consistent with the position since the second quarter of 2025.

Capital

Stockholders’ equity was $273.1 million at March 31, 2026, up $4.3 million, or 1.6%, from the prior quarter. Tangible book value per share was $25.57, an increase of $0.41, or 1.6%, quarter-over-quarter.

At quarter-end, Common Equity Tier 1 Risk-Based Capital Ratios were 19.24% for the Company and 19.22% for the Bank. Total Risk-Based Capital Ratios were 20.47% and 20.45%, respectively, and Leverage Ratios were 13.78% for the Company and 13.76% for the Bank. The Bank continues to be classified as “Well Capitalized” under applicable regulatory standards.

About CBB Bancorp, Inc.:

CBB Bancorp, Inc. is the holding company of Commonwealth Business Bank, a full-service commercial bank which specializes in loans to small-to-medium-sized businesses and does business as “CBB Bank.” As of March 31, 2026, the Bank had twelve full-service banking offices in Los Angeles and Orange Counties in California, Dallas County in Texas, Honolulu, Hawaii, and Bergen County in New Jersey. Three SBA regional offices in Los Angeles, Dallas, and Bergen Counties, and loan production offices in California, Georgia, Texas, Virginia, and New York. For additional information, please go to www.cbb-bank.com under the tab “About Us” and select “Investor Relations” to see the 1Q 2026 Overview.

FORWARD-LOOKING STATEMENTS:

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. CBB Bancorp, Inc. (the “Company”) intends that such forward-looking statements be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described herein are necessarily subject to risks and uncertainties that may cause actual results to differ materially and adversely from those described herein. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Factors that might cause actual results to differ materially from those presented, either expressed or implied, in this news release include, but are not limited to: the Company’s ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company’s operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances, except to the extent required by law.

STATEMENT OF INCOME AND PERFORMANCE HIGHLIGHT (Unaudited) - Table 1
(Dollars in thousands, except per share amounts)
	Three Months Ended
	March 31,			December 31,			$			%		March 31,			$			%
		2026			2025		Change			Change			2025		Change			Change
Interest income	$	28,164		$	29,869		$	(1,705	)	(5.7	%)	$	27,467		$	697		2.5	%
Interest expense		13,332			14,211			(879	)	(6.2	%)		12,644			688		5.4	%
Net interest income		14,832			15,658			(826	)	(5.3	%)		14,823			9		0.1	%
Provision for credit losses		500			300			200		66.7	%		500			-		-
Net interest income after provision for credit losses		14,332			15,358			(1,026	)	(6.7	%)		14,323			9		0.1	%
Gain on sale of loans		2,459			802			1,657		206.6	%		1,021			1,438		140.8	%
Loss on sale of OREO		-			-			-		-			(92	)		92		100.0	%
SBA servicing fee income, net		702			587			115		19.6	%		691			11		1.6	%
Recovery on impaired servicing liability		-			-			-		-			-			-		-
Service charges and other income		481			428			53		12.4	%		496			(15	)	(3.0	%)
Noninterest income		3,642			1,817			1,825		100.4	%		2,116			1,526		72.1	%
Salaries and employee benefits		5,862			6,478			(616	)	(9.5	%)		5,848			14		0.2	%
Occupancy and equipment		1,432			1,400			32		2.3	%		1,314			118		9.0	%
Marketing expense		396			380			16		4.2	%		215			181		84.2	%
Professional expense		399			519			(120	)	(23.1	%)		430			(31	)	(7.2	%)
Other expenses		2,044			2,255			(211	)	(9.4	%)		2,426			(382	)	(15.7	%)
Noninterest expense		10,133			11,032			(899	)	(8.1	%)		10,233			(100	)	(1.0	%)
Income before income tax provision		7,841			6,143			1,698		27.6	%		6,206			1,635		26.3	%
Income tax provision		2,171			1,641			530		32.3	%		1,753			418		23.8	%
Net income	$	5,670		$	4,502		$	1,168		25.9	%	$	4,453		$	1,217		27.3	%
Effective tax rate		27.69	%		26.71	%		0.97	%	3.65	%		28.25	%		(0.56	%)	(1.98	%)
Outstanding number of shares		10,588,136			10,588,136			-		-			10,588,136			-		-
Weighted average shares for basic EPS		10,588,136			10,588,136			-		-			10,588,136			-		-
Weighted average shares for diluted EPS		10,613,980			10,602,538			11,442		0.1	%		10,605,812			8,168		0.1	%
Basic EPS	$	0.54		$	0.42		$	0.12		28.6	%	$	0.42		$	0.12		28.6	%
Diluted EPS	$	0.53		$	0.42		$	0.11		26.2	%	$	0.42		$	0.11		26.2	%
Return on average assets		1.17	%		0.89	%		0.28	%	31.5	%		0.99	%		0.18	%	18.2	%
Return on average equity		8.49	%		6.69	%		1.80	%	26.9	%		7.01	%		1.48	%	21.1	%
Efficiency ratio		54.85	%		63.13	%		(8.28	%)	(13.1	%)		60.41	%		(5.56	%)	(9.2	%)
Yield on interest-earning assets¹		5.94	%		6.02	%		(0.08	%)	(1.3	%)		6.25	%		(0.31	%)	(5.0	%)
Cost of funds		3.25	%		3.30	%		(0.05	%)	(1.5	%)		3.34	%		(0.09	%)	(2.7	%)
Net interest margin¹		3.13	%		3.16	%		(0.03	%)	(1.0	%)		3.38	%		(0.25	%)	(7.4	%)
¹ Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

BALANCE SHEET, CAPITAL AND OTHER DATA (Unaudited) - Table 2
(Dollars in thousands)
	March 31,			December 31,			$			%		March 31,			$			%
		2026			2025		Change			Change			2025		Change			Change
ASSETS
Cash and due from banks	$	13,776		$	10,265		$	3,511		34.2	%	$	12,716		$	1,060		8.3	%
Interest-earning deposits at the FRB and other banks		405,896			426,000			(20,104	)	(4.7	%)		249,535			156,361		62.7	%
Investment securities¹		64,674			65,730			(1,056	)	(1.6	%)		61,521			3,153		5.1	%
Loans held-for-sale		62,173			65,419			(3,246	)	(5.0	%)		194,542			(132,369	)	(68.0	%)
Loans held-for-investment		1,404,573			1,397,420			7,153		0.5	%		1,256,063			148,510		11.8	%
Less: Allowance for credit losses ("ACL")		(16,854	)		(16,345	)		(509	)	(3.1	%)		(14,850	)		(2,004	)	(13.5	%)
Loans held-for-investment, net		1,387,719			1,381,075			6,644		0.5	%		1,241,213			146,506		11.8	%
Other real estate owned ("OREO")		5,651			5,651			-		-			3,130			2,521		80.5	%
Restricted stock investments		11,021			11,011			10		0.1	%		11,011			10		0.1	%
Servicing assets		6,671			6,141			530		8.6	%		6,708			(37	)	(0.6	%)
Goodwill		2,185			2,185			-		-			2,185			-		-
Intangible assets		168			176			(8	)	(4.5	%)		205			(37	)	(18.0	%)
Other assets		30,964			33,373			(2,409	)	(7.2	%)		31,304			(340	)	(1.1	%)
Total assets	$	1,990,898		$	2,007,026		$	(16,128	)	(0.8	%)	$	1,814,070		$	176,828		9.7	%
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing	$	309,194		$	301,775		$	7,419		2.5	%	$	295,857		$	13,337		4.5	%
Interest-bearing		1,377,261			1,405,552			(28,291	)	(2.0	%)		1,181,362			195,899		16.6	%
Total deposits		1,686,455			1,707,327			(20,872	)	(1.2	%)		1,477,219			209,236		14.2	%
FHLB advances and other borrowing		-			-			-		-			50,000			(50,000	)	(100.0	%)
Other liabilities		31,380			30,950			430		1.4	%		28,397			2,983		10.5	%
Total liabilities		1,717,835			1,738,277			(20,442	)	(1.2	%)		1,555,616			162,219		10.4	%
Stockholders' Equity		273,063			268,749			4,314		1.6	%		258,454			14,609		5.7	%
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,990,898		$	2,007,026		$	(16,128	)	(0.8	%)	$	1,814,070		$	176,828		9.7	%
CAPITAL RATIOS
Leverage ratio
Company		13.78	%		13.25	%		0.53	%	4.0	%		14.04	%		(0.26	%)	(1.9	%)
Bank		13.76	%		13.23	%		0.53	%	4.0	%		14.00	%		(0.24	%)	(1.7	%)
Common equity tier 1 risk-based capital ratio
Company		19.24	%		19.03	%		0.21	%	1.1	%		19.10	%		0.14	%	0.7	%
Bank		19.22	%		19.01	%		0.22	%	1.2	%		19.05	%		0.18	%	0.9	%
Tier 1 risk-based capital ratio
Company		19.24	%		19.03	%		0.21	%	1.1	%		19.10	%		0.14	%	0.7	%
Bank		19.22	%		19.01	%		0.22	%	1.2	%		19.05	%		0.18	%	0.9	%
Total risk-based capital ratio
Company		20.47	%		20.22	%		0.25	%	1.2	%		20.23	%		0.24	%	1.2	%
Bank		20.45	%		20.20	%		0.25	%	1.3	%		20.18	%		0.27	%	1.4	%
Tangible book value per share	$	25.57		$	25.16		$	0.41		1.6	%	$	24.18		$	1.39		5.8	%
Loans Held for Investments-to-Deposit ("LHFITD") ratio		83.29	%		81.85	%		1.44	%	1.8	%		85.03	%		(1.74	%)	(2.0	%)
Net Loan-to-Deposit ("LTD") ratio		85.97	%		84.72	%		1.25	%	1.5	%		97.19	%		(11.22	%)	(11.5	%)
Nonperforming assets	$	22,717		$	21,611		$	1,106		5.1	%	$	11,675		$	11,042		94.6	%
Nonperforming assets as a % of loans held-for-investment		1.62	%		1.55	%		0.07	%	4.5	%		0.93	%		0.69	%	74.2	%
ACL as a % of loans held-for-investment		1.20	%		1.17	%		0.03	%	2.56	%		1.18	%		0.02	%	1.7	%
¹ Includes AFS and HTM

FIVE-QUARTER STATEMENT OF INCOME (Unaudited) - Table 3
(Dollars in thousands, except per share amounts)
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2026			2025			2025			2025			2025
Interest income	$	28,164		$	29,869		$	28,338		$	27,392		$	27,467
Interest expense		13,332			14,211			12,608			12,345			12,644
Net interest income		14,832			15,658			15,730			15,047			14,823
Provision for credit losses		500			300			470			590			500
Net interest income after provision for credit losses		14,332			15,358			15,260			14,457			14,323
Gain on sale of loans		2,459			802			648			900			1,021
Gain (loss) on sale of OREO		-			-			29			(67	)		(92	)
SBA servicing fee income, net		702			587			705			799			691
Recovery on impaired servicing liability		-			-			-			-			-
Service charges and other income		481			428			469			450			496
Noninterest income		3,642			1,817			1,851			2,082			2,116
Salaries and employee benefits		5,862			6,478			5,849			5,779			5,848
Occupancy and equipment		1,432			1,400			1,378			1,293			1,314
Marketing expense		396			380			397			404			215
Professional expense		399			519			699			619			430
Other expenses		2,044			2,255			2,485			2,181			2,426
Noninterest expense		10,133			11,032			10,808			10,276			10,233
Income before income tax expense		7,841			6,143			6,303			6,263			6,206
Income tax expense		2,171			1,641			1,758			1,868			1,753
Net income	$	5,670		$	4,502		$	4,545		$	4,395		$	4,453
Effective tax rate		27.7	%		26.7	%		27.9	%		29.8	%		28.3	%
Outstanding number of shares		10,588,136			10,588,136			10,588,136			10,588,136			10,588,136
Weighted average shares for basic EPS		10,588,136			10,588,136			10,588,136			10,588,136			10,588,136
Weighted average shares for diluted EPS		10,613,980			10,602,538			10,600,724			10,593,497			10,605,812
Basic EPS	$	0.54		$	0.42		$	0.43		$	0.42		$	0.42
Diluted EPS	$	0.53		$	0.42		$	0.43		$	0.42		$	0.42

FIVE-QUARTER SALARIES BENEFIT METRICS (Unaudited) - Table 4
(Dollars in thousands)
	At or for the Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2026			2025			2025			2025			2025
Salaries and benefits	$	5,862		$	6,478		$	5,849		$	5,779		$	5,848
FTE at the end of period		172			174			171			163			166
Average FTE during the period		174			170			168			166			169
Salaries and benefits/average FTE¹	$	137		$	151		$	138		$	140		$	141
Salaries and benefits/average assets¹		1.18	%		1.28	%		1.27	%		1.29	%		1.30	%
Noninterest expense/average assets¹		2.05	%		2.18	%		2.34	%		2.30	%		2.27	%
^1 Annualized

FIVE-QUARTER BALANCE SHEET (Unaudited) - Table 5
(Dollars in thousands)
	March 31,			December 31,			September 30,			June 30,			March 31,
		2026			2025			2025			2025			2025
ASSETS
Cash and due from banks	$	13,776		$	10,265		$	25,597		$	11,873		$	12,716
Interest-earning deposits at the FRB and other banks		405,896			426,000			385,282			235,436			249,535
Investment securities		64,674			65,730			67,459			65,518			61,521
Loans held-for-sale		62,173			65,419			175,158			183,996			194,542
Loans held-for-investment		1,404,573			1,397,420			1,272,474			1,278,106			1,256,063
Less: Allowance for credit losses		(16,854	)		(16,345	)		(16,151	)		(15,461	)		(14,850	)
Loans held-for-investment, net		1,387,719			1,381,075			1,256,323			1,262,645			1,241,213
Other real estate owned		5,651			5,651			297			2,999			3,130
Restricted stock investments		11,021			11,011			11,011			11,011			11,011
Servicing assets		6,671			6,141			6,342			6,609			6,708
Goodwill		2,185			2,185			2,185			2,185			2,185
Intangible assets		168			176			186			195			205
Other assets		30,964			33,373			32,602			32,359			31,304
Total assets	$	1,990,898		$	2,007,026		$	1,962,442		$	1,814,826		$	1,814,070
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing	$	309,194		$	301,775		$	280,351		$	309,160		$	295,857
Interest-bearing		1,377,261			1,405,552			1,385,920			1,215,760			1,181,362
Total deposits		1,686,455			1,707,327			1,666,271			1,524,920			1,477,219
FHLB advances		-			-			-			-			50,000
Other liabilities		31,380			30,950			30,649			27,972			28,397
Total liabilities		1,717,835			1,738,277			1,696,920			1,552,892			1,555,616
Stockholders' Equity		273,063			268,749			265,522			261,934			258,454
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,990,898		$	2,007,026		$	1,962,442		$	1,814,826		$	1,814,070

FIVE-QUARTER LOANS RECEIVABLE COMPONENTS (Unaudited) - Table 6
(Dollars in thousands)
	March 31, 2026			December 31, 2025			September 30, 2025			June 30, 2025			March 31, 2025
	Balance		%	Balance		%	Balance		%	Balance		%	Balance		%
Construction	$	21,063	1.5%	$	18,566	1.3%	$	36,480	2.9%	$	33,952	2.7%	$	31,913	2.5%
Commercial real estate		1,209,647	86.1%		1,204,652	86.2%		1,088,603	85.6%		1,091,180	85.4%		1,061,873	84.5%
Commercial and industrial		135,286	9.6%		134,306	9.6%		103,276	8.1%		108,461	8.5%		112,369	9.0%
Home mortgage		31,247	2.2%		32,188	2.3%		36,522	2.9%		36,673	2.9%		41,944	3.3%
Consumer		3,803	0.3%		4,174	0.3%		3,548	0.3%		3,527	0.3%		3,477	0.3%
Gross loans held-for-investment		1,401,046	99.7%		1,393,886	99.7%		1,268,429	99.7%		1,273,793	99.7%		1,251,576	99.6%
Deferred loan fees/costs, net		3,527	0.3%		3,534	0.3%		4,045	0.3%		4,313	0.3%		4,487	0.4%
Loans held-for-investment	$	1,404,573	100.0%	$	1,397,420	100.0%	$	1,272,474	100.0%	$	1,278,106	100.0%	$	1,256,063	100.0%
Loans held-for-sale	$	62,173		$	65,419		$	175,158		$	183,996		$	194,542
Total loans receivable	$	1,466,746		$	1,462,839		$	1,447,632		$	1,462,102		$	1,450,605

FIVE-QUARTER SBA LOAN PRODUCTIONS/SALES DATA (Unaudited) - Table 7
(Dollars in thousands)
	Three Months Ended
	March 31,			December 31,			September 30,			June 30			March 31,
		2026			2025			2025			2025			2025
SBA loans held-for-sale at beginning of the quarter/year	$	65,419		$	175,158		$	183,996		$	194,542		$	198,448
SBA loans originated/transferred from/to held-for-investment during the quarter/year		46,078			(77,847	)		19,835			20,135			23,778
SBA loans sold during the quarter/year		(48,199	)		(19,702	)		(14,539	)		(17,580	)		(19,753	)
SBA loans principal paydown/payoff, net of advance		(1,125	)		(12,190	)		(14,134	)		(13,101	)		(7,931	)
SBA loans held-for-sale at end of the quarter/year	$	62,173		$	65,419		$	175,158		$	183,996		$	194,542
Gain on sale of SBA loans	$	2,459		$	802		$	648		$	900		$	1,021
Premium on sale (weighted average)		8.0	%		6.8	%		7.1	%		8.1	%		8.1	%
SBA loan production	$	63,226		$	12,952		$	22,228		$	28,860		$	32,034

FIVE QUARTER SBA SERVICING ASSETS AND SERVICING FEES (Unaudited) - Table 8
(Dollars in thousands)
	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2026			2025			2025			2025			2025
SBA servicing assets @ beginning of the quarter/year	$	6,141		$	6,342		$	6,609		$	6,708		$	6,909
Newly added SBA servicing assets from SBA loans sold		1,019			405			268			355			361
Regular quarterly/annual servicing assets amortization		(270	)		(279	)		(288	)		(299	)		(305	)
SBA servicing assets amortized from SBA loans paid off/charged off		(219	)		(327	)		(247	)		(155	)		(257	)
Subtotal before impairment		6,671			6,141			6,342			6,609			6,708
Reversal of valuation allowance on servicing assets		-			-			-			-			-
SBA servicing assets @ the end of the quarter/year	$	6,671		$	6,141		$	6,342		$	6,609		$	6,708

FIVE-QUARTER DEPOSIT COMPONENTS (Unaudited) - Table 9
(Dollars in thousands)
	March 31, 2026			December 31, 2025			September 30, 2025			June 30, 2025			March 31, 2025
	Balance		%	Balance		%	Balance		%	Balance		%	Balance		%
Noninterest-bearing demand	$	309,194	18.3%	$	301,775	17.7%	$	280,351	16.8%	$	309,160	20.3%	$	295,857	20.0%
Interest-bearing demand		6,362	0.4%		5,813	0.3%		5,745	0.3%		10,698	0.7%		6,588	0.5%
NOW & MMDA		291,265	17.3%		310,147	18.2%		305,649	18.4%		274,578	18.0%		257,474	17.4%
Savings		92,238	5.5%		87,036	5.1%		83,368	5.0%		85,609	5.6%		81,425	5.5%
TCDs of $250K and under		435,372	25.8%		433,873	25.4%		419,821	25.2%		319,209	20.9%		315,312	21.3%
TCDs of $250K over		467,016	27.7%		473,025	27.7%		471,048	28.3%		403,676	26.5%		377,486	25.6%
Wholesale deposits		85,008	5.0%		95,658	5.6%		100,289	6.0%		121,990	8.0%		143,077	9.7%
Total Deposits	$	1,686,455	100.0%	$	1,707,327	100.0%	$	1,666,271	100.0%	$	1,524,920	100.0%	$	1,477,219	100.0%
Recap:
Noninterest-bearing demand	$	309,194	18.3%	$	301,775	17.7%	$	280,351	16.8%	$	309,160	20.3%	$	295,857	20.0%
Interest-bearing demand		6,362	0.4%		5,813	0.3%		5,745	0.3%		10,698	0.7%		6,588	0.5%
NOW & MMDA		291,265	17.3%		310,147	18.2%		305,649	18.4%		274,578	18.0%		257,474	17.4%
Savings		92,238	5.5%		87,036	5.1%		83,368	5.0%		85,609	5.6%		81,425	5.5%
TCDs of $250K and under		435,372	25.8%		433,873	25.4%		419,821	25.2%		319,209	20.9%		315,312	21.3%
Core Deposits		1,134,431	67.3%		1,138,644	66.7%		1,094,934	65.7%		999,254	65.5%		956,656	64.7%
TCDs of $250K over		467,016	27.7%		473,025	27.7%		471,048	28.3%		403,676	26.5%		377,486	25.6%
Nonreciprocal ICS MMDA		-	-		-	-		-	-		-	-		-	-
Wholesale deposits		85,008	5.0%		95,658	5.6%		100,289	6.0%		121,990	8.0%		143,077	9.7%
Noncore Deposits		552,024	32.7%		568,683	33.3%		571,337	34.3%		525,666	34.5%		520,563	35.3%
Total Deposits	$	1,686,455	100.0%	$	1,707,327	100.0%	$	1,666,271	100.0%	$	1,524,920	100.0%	$	1,477,219	100.0%

FIVE-QUARTER SELECTED LOAN AND ASSET QUALITY HIGHLIGHTS (Unaudited) - Table 10
(Dollars in thousands)
	1st Qtr.			4th Qtr.			3rd Qtr.			2nd Qtr.			1st Qtr.
		2026			2025			2025			2025			2025
Allowance for Credit Losses
Balance at beginning of period	$	16,345		$	16,151		$	15,461		$	14,850		$	15,959
Provision for credit losses		500			210			500			590			430
Charge-offs		(1	)		(27	)		-			(143	)		(1,567	)
Recoveries		10			11			190			164			28
Balance at the end of period	$	16,854		$	16,345		$	16,151		$	15,461		$	14,850
Nonperforming Assets:¹
Over 90 days still accruing	$	-		$	-		$	1,237		$	1,487		$	-
Nonaccrual loans		17,066			15,960			14,865			12,213			8,545
Total nonperforming loans		17,066			15,960			16,102			13,700			8,545
Other real estate owned	$	5,651			5,651			297			2,999			3,130
Total nonperforming assets	$	22,717		$	21,611		$	16,399		$	16,699		$	11,675
Classified Assets:¹
Substandard	$	23,147		$	29,666		$	31,465		$	30,442		$	20,827
Doubtful		-			-			-			-			-
Loss		-			-			-			-			-
Total classified loans	$	23,147		$	29,666		$	31,465		$	30,442		$	20,827
Other real estate owned	$	5,651			5,651			297			2,999			3,130
Total classified assets	$	28,798		$	35,317		$	31,762		$	33,441		$	23,957
Performing modified loans:¹	$	-		$	1,176		$	160		$	160		$	635
Delinquent Loans:¹
Loans 30-89 days past due	$	11,078		$	7,563		$	7,478		$	11,548		$	19,010
90 days or more past due and still accruing		-			-			1,237			1,487			-
Nonaccrual		17,066			15,960			14,865			12,213			8,545
Total delinquent loans	$	28,144		$	23,523		$	23,580		$	25,248		$	27,555
Asset Quality Ratios:
Net (recoveries) charge-offs to average loans²		0.00	%		0.00	%		(0.05	%)		(0.01	%)		0.43	%
Nonaccrual loans to loans held-for-investment		1.22	%		1.14	%		1.17	%		0.96	%		0.68	%
Nonperforming loans to loans held-for-investment		1.22	%		1.14	%		1.27	%		1.07	%		0.68	%
Nonperforming assets to total assets		1.14	%		1.08	%		0.84	%		0.92	%		0.64	%
Classified loans to loans held-for-investment		1.65	%		2.12	%		2.47	%		2.38	%		1.66	%
Classified loans to Tier 1 and ACL		8.05	%		10.49	%		11.27	%		11.07	%		7.69	%
Classified assets to total assets		1.45	%		1.76	%		1.62	%		1.84	%		1.32	%
Classified assets to Tier 1 and ACL		10.01	%		12.49	%		11.37	%		12.16	%		8.84	%
ACL to loans held-for-investment		1.20	%		1.17	%		1.27	%		1.21	%		1.18	%
ACL to nonaccrual loans		98.76	%		102.41	%		108.65	%		126.59	%		173.79	%
ACL to nonperforming loans		98.76	%		102.41	%		100.30	%		112.85	%		173.79	%
ACL to nonperforming assets		74.19	%		75.63	%		98.49	%		92.59	%		127.19	%
Texas ratio ³		7.90	%		7.64	%		5.87	%		6.07	%		4.31	%
^1 Net of SBA guaranteed balance
^2 Includes loans held-for-sale
^3 Nonperforming assets divided by tangible common equity and ACL

FIVE-QUARTER CAPITAL RATIOS (Unaudited) - Table 11
	Well Capitalized	Adequately Capitalized	March 31,		December 31,		September 30,		June 30,		March 31,
	Regulatory	BASEL III
	Requirement	Fully Phased In	2026		2025		2025		2025		2025
Leverage ratio
Company	N/A	N/A		13.78%		13.25%		14.34%		14.48%		14.04%
Bank	5.00%	4.00%		13.76%		13.23%		14.32%		14.45%		14.00%
Common equity tier 1 risk-based capital ratio
Company	N/A	N/A		19.24%		19.03%		19.26%		18.98%		19.10%
Bank	6.50%	7.00%		19.22%		19.01%		19.22%		18.94%		19.05%
Tier 1 risk-based capital ratio
Company	N/A	N/A		19.24%		19.03%		19.26%		18.98%		19.10%
Bank	8.00%	8.50%		19.22%		19.01%		19.22%		18.94%		19.05%
Total risk-based capital ratio
Company	N/A	N/A		20.47%		20.22%		20.46%		20.13%		20.23%
Bank	10.00%	10.50%		20.45%		20.20%		20.42%		20.09%		20.18%
Tangible common equity/total assets				13.61%		13.29%		13.43%		14.32%		14.13%
Tangible common equity per share			$	25.57	$	25.16	$	24.85	$	24.51	$	24.18

FIVE-QUARTER MARGIN ANALYSIS (Unaudited) -Table 12
(Dollars in thousands)
	Three Months Ended
	March 31, 2026							December 31, 2025							September 30, 2025							June 30, 2025							March 31, 2025
	Avg Balance			Interest		Yield		Avg Balance			Interest		Yield		Avg Balance			Interest		Yield		Avg Balance			Interest		Yield		Avg Balance			Interest		Yield
Number of Days in the Period
INTEREST-EARNING ASSETS
Loans Receivable¹	$	1,482,057		$	23,778	6.51	%	$	1,475,995		$	24,828	6.67	%	$	1,463,183		$	24,653	6.68	%	$	1,461,584		$	24,171	6.63	%	$	1,437,846		$	23,618	6.66	%
Investment securities ²		65,507			657	4.07	%		65,279			676	4.10	%		66,623			707	4.21	%		64,990			686	4.23	%		61,930			667	4.37	%
Interest-earning deposits at the FRB and other banks		366,481			3,343	3.70	%		420,854			4,213	3.97	%		254,301			2,826	4.41	%		214,514			2,383	4.46	%		275,512			3,029	4.46	%
Other earning assets		11,016			434	15.98	%		11,011			202	7.28	%		11,011			201	7.24	%		11,011			200	7.29	%		11,011			203	7.48	%
Total interest-earning assets ²		1,925,061			28,212	5.94	%		1,973,139			29,919	6.02	%		1,795,118			28,387	6.27	%		1,752,099			27,440	6.28	%		1,786,299			27,517	6.25	%
NONINTEREST-EARNING ASSETS
Cash and due from banks		10,909							11,799							14,221							11,512							12,060
Other noninterest-earning assets		44,918							40,927							40,578							44,078							41,549
Total noninterest-earning assets		55,827							52,726							54,799							55,590							53,609
Less: Allowance for credit losses		(16,355	)						(16,152	)						(15,577	)						(14,899	)						(15,569	)
TOTAL ASSETS	$	1,964,533						$	2,009,713						$	1,834,340						$	1,792,790						$	1,824,339
INTEREST-BEARING DEPOSITS
Interest-bearing demand	$	9,415		$	5	0.20	%	$	9,432		$	4	0.20	%	$	9,682		$	5	0.20	%	$	9,957		$	5	0.20	%	$	9,622		$	5	0.20	%
Money market		286,298			2,451	3.47	%		324,316			2,990	3.66	%		282,010			2,699	3.80	%		263,197			2,540	3.87	%		265,687			2,555	3.90	%
Savings		87,429			653	3.03	%		83,166			644	3.07	%		84,339			653	3.07	%		83,261			633	3.05	%		83,978			638	3.08	%
Time deposits		998,868			10,223	4.15	%		998,575			10,573	4.20	%		863,224			9,251	4.25	%		847,092			9,159	4.34	%		830,672			9,331	4.56	%
Total interest-bearing deposits		1,382,010			13,332	3.91	%		1,415,489			14,211	3.98	%		1,239,255			12,608	4.04	%		1,203,507			12,337	4.11	%		1,189,959			12,529	4.27	%
Borrowings		-			-	-			2			-	0.0	%		-			-	-			4,122			8	0.78	%		48,889			115	0.95	%
Total interest-bearing liabilities		1,382,010			13,332	3.91	%		1,415,491			14,211	3.98	%		1,239,255			12,608	4.04	%		1,207,629			12,345	4.10	%		1,238,848			12,644	4.14	%
Noninterest-bearing deposits		279,851							294,726							301,776							296,496							298,579
Other liabilities		31,922							32,412							29,249							28,026							29,428
Stockholders' equity		270,750							267,084							264,060							260,639							257,484
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY	$	1,964,533						$	2,009,713						$	1,834,340						$	1,792,790						$	1,824,339
Net interest income²				$	14,880						$	15,708						$	15,779						$	15,095						$	14,873
Net interest spread						2.03	%						2.04	%						2.23	%						2.18	%						2.11	%
Effect of noninterest-bearing sources						1.10	%						1.12	%						1.26	%						1.28	%						1.27	%
Net interest margin²						3.13	%						3.16	%						3.49	%						3.46	%						3.38	%
Cost of deposits	$	1,661,861		$	13,332	3.25	%	$	1,710,215		$	14,211	3.30	%	$	1,541,031		$	12,608	3.25	%	$	1,500,003		$	12,337	3.30	%	$	1,488,538		$	12,529	3.41	%
Cost of funds	$	1,661,861		$	13,332	3.25	%	$	1,710,217		$	14,211	3.30	%	$	1,541,031		$	12,608	3.25	%	$	1,504,125		$	12,345	3.29	%	$	1,537,427		$	12,644	3.34	%
¹ Loan held-for-investment, plus loans held-for-sale
² Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

FIVE-QUARTER COMPONENTS OF YIELD ON LOANS (Unaudited) - Table 13
(Dollars in thousands)
	Three Months Ended
	March 31,2026					December 31, 2025					September 30, 2025					June 30, 2025					March 31,2025
	Amount			Yield		Amount			Yield		Amount			Yield		Amount			Yield		Amount			Yield
Contractual yield	$	23,193		6.35	%	$	24,154		6.49	%	$	24,171		6.55	%	$	23,731		6.51	%	$	22,866		6.45	%
SBA discount accretion		636		0.17	%		883		0.24	%		728		0.20	%		588		0.16	%		781		0.22	%
Prepayment penalties and late fees		96		0.03	%		50		0.01	%		51		0.01	%		53		0.01	%		136		0.04	%
Amortization of net deferred costs		(147	)	-0.04	%		(259	)	-0.07	%		(297	)	-0.08	%		(201	)	-0.05	%		(165	)	-0.05	%
As reported yield on loans	$	23,778		6.51	%	$	24,828		6.67	%	$	24,653		6.68	%	$	24,171		6.63	%	$	23,618		6.66	%