CBOA Financial, Inc. Reports Consolidated Earnings of $548,000 in 4Q 2021

TUCSON, Ariz., Feb. 1, 2022 /PRNewswire/ -- CBOA Financial, Inc. (OTCMKTS:CBOF) (the "Company"), parent company of Commerce Bank of Arizona (the "Bank" or "CBAZ"), announced that consolidated net income for quarter ending December 31, 2021 increased 7% to $548 thousand, from $510 thousand in the third quarter of this year.

Bank President and CEO Chris Webster commented, "Despite headwinds caused by the ongoing challenges of the pandemic, CBAZ generated record net loan growth in 2021." He added, "Our experienced commercial lending team skillfully adapted to a wildly uneven economic environment and produced an impressive number of new high quality customer relationships." Webster added, "With the PPP loan forgiveness process largely behind us, the Bank is well-positioned to take advantage of Arizona's recovering economic conditions." Finally he noted, "Other notable balance sheet improvements included additional reductions in the Bank's classified loans. Non-performing loans are now at 0.39% of assets, the lowest level in 15 years, and our reserves remain strong at 1.44% of gross loans."

Fourth Quarter 2021 Highlights

• $42 million in new loans funded during the quarter
• Interest expense decreased by 25% compared to last quarter
• Non-Interest Income increased 67% compared to last quarter

Operational Highlights
Interest income during the quarter was aided by recognized fee income of PPP loans that bolstered earnings by $425 thousand.  There remains $27 thousand in PPP origination fee income that will likely be recognized over the next several quarters as the remaining loans are forgiven. Further contributing to the growth in net interest income was a $44 thousand decline in interest expense. Full year earnings per share was $0.31.

The Bank continues to make progress on its legacy classified assets. Year-over-year, non-performing assets which include loans and OREO are down 52% from $2.9 million or 0.78% of assets to $1.4 million or 0.39% of assets.

Balance Sheet
Total assets increased by 12% to $344.6 million during the quarter ended December 31, 2021 but decreased 3.1% compared to $355.8 million a year ago.

Traditional (non-PPP) gross loans increased $12.6 million since third quarter 2021, ending the fourth quarter 2021 at $229 million. For the full year 2021, traditional (non-PPP) loan growth was $49 million, an increase of 27% from year end 2020. Total loans including PPP decreased by 2.7% to $231 million in the quarter and decreased 3.9% compared to $240 million a year ago, due primarily to $58 million in PPP loans forgiven during 2021. Total deposits increased by 0.9% to $306 million during the quarter and increased 0.6% compared to $304 million a year ago.

The allowance for loan losses totaled $3.32 million at December 2021, or 1.44% of loans, compared to 1.33% in the previous quarter. The increase was primarily due to PPP loan forgiveness during the quarter.

Shareholders' equity increased to $29.2 million at December 31, 2021, from $28.2 million the preceding quarter. At December 31, 2021, tangible book value was $2.94 per share compared to $2.95 per share at September 30, 2021 and $2.81 per share a year ago. The Bank's December 31, 2021 Tier 1 Leverage ratio was 9.87%, compared to 8.56% at December 31, 2020. In addition to earnings, the increase in Bank capital ratios was due to the holding company adding $1.95 million to Bank capital in the third and fourth quarters of 2021. The additional capital was funded by exercises of stock warrants that were granted to investors in the Company's 2015 capital raise.

Capital Management
Capital ratios exceeded regulatory guidelines for a well-capitalized institution under Basel III and Dodd Frank Wall Street Reform requirements at December 31, 2021. During the third and fourth quarters of 2021, the 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, please 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.

Contact:
Chris Webster
President & CEO
480-253-4511
cwebster@commercebankaz.com

SOURCE Commerce Bank of Arizona