Financial Results: CBB Bancorp Reports Q4 2024 Performance
CBB Bancorp, Inc. (“CBB” or the “Company”) (OTCQX: CBBI), the parent company of Commonwealth Business Bank, operating as “CBB Bank,” reported a net income of $5.7 million for the fourth quarter of 2024, or $0.54 per diluted share. This is a slight increase from the $5.6 million, or $0.53 per diluted share, reported in the third quarter of 2024.
CBB Bancorp, Inc. (“CBB” or the “Company”) (OTCQX: CBBI), the holding company of Commonwealth Business Bank, doing business as “CBB Bank,” has reported its financial results for the fourth quarter and full year of 2024. The company’s performance reflects solid operational management despite facing challenges in net interest margins, stemming from rising costs on interest-bearing accounts.
Full Year Financial Results
For the year Financial Results: CBB Bancorp Reports Q4 2024 Performanceended December 31, 2024, CBB reported a net income of $22.4 million, or $2.12 per diluted share, compared to $28.9 million, or $2.72 per diluted share, in 2023. This decline in net income for the year primarily reflects the lower net interest income, which was impacted by increased funding costs and the Federal Reserve’s rate cuts in the latter part of the year.
Fourth Quarter Financial Highlights
In the fourth quarter of Financial Results 2024 , CBB’s net income increased slightly to $5.7 million, or $0.54 per diluted share, compared to $5.6 million, or $0.53 per diluted share, in the third quarter. The growth in net income was driven by an increase in net interest income and a reduction in noninterest expenses.
For the fourth quarter, the return on average assets (ROAA) was 1.27%, slightly down from 1.31% in the third quarter of 2024 and 1.54% in the fourth quarter of 2023. The return on average equity (ROAE) for the fourth quarter was 8.98%, compared to 8.91% in the third quarter and 11.94% in Q4 2023. The bank’s efficiency ratio for the quarter was 55.66%, a notable improvement from 56.61% in the previous quarter but higher than 49.45% for Q4 2023.
James Hong, President and CEO, remarked, “We are pleased to announce a solid performance in Financial Results 2024, despite facing challenges with net interest margin due to rising costs on interest-bearing accounts. Our fourth-quarter results highlight the bank’s resilience, with notable increases in both deposits and loan originations. Throughout the year, we saw a significant boost in noninterest income from loan sales, driven by improved market premiums.” Hong also shared his excitement regarding the appointment of Alex Ko as the new Chief Operating Officer, emphasizing the expected positive impact of Ko’s leadership on the bank’s growth and operational efficiency.
Income Statement Overview
Net Interest Income
Net interest income for Q4 2024 was $15.6 million, marking a slight increase of $172,000, or 1.1%, from the third quarter of 2024. However, it represents a decrease of $1.5 million, or 8.8%, compared to the same period in 2023. For the full year, net interest income totaled $62.3 million, a decrease of $10.7 million, or 14.6%, compared to 2023. This decline was largely driven by the higher cost of interest-bearing deposits, with maturing time deposits being rolled over into higher-rate certificates of deposit (CDs), as well as lower yields on variable-rate loans following the Fed’s interest rate cuts in the second half of 2024.
Net Interest Margin
The net interest margin for Q4 2024 was 3.55%, down from 3.71% in Q3 and 3.86% in Q4 2023. The cost of funds for the fourth quarter was 3.45%, higher than 3.20% in Q4 2023 but lower than 3.60% in Q3 2024.
Provision for Credit Losses
CBB did not record a provision for credit losses in the fourth quarter of 2024, which was in line with the third quarter and the fourth quarter of 2023, when no provision was made either.
Noninterest Income
Noninterest income remained steady in Financial Results Q4 2024 at $2.2 million, matching the amount from Q3 2024 and representing a $246,000 increase from Financial Results Q4 2023. For the full year, noninterest income totaled $9.3 million, an increase of $2.0 million from 2023, driven by higher gains on the sale of loans, SBA servicing fee income, and other banking service fees.
Noninterest Expenses
Noninterest expenses in Q4 2024 totaled $9.9 million, a slight decrease of $76,000 from the third quarter but an increase of $400,000 compared to Q4 2023. For the full year, noninterest expenses were $39.9 million, a decrease of $228,000, or 0.6%, compared to 2023.
Income Taxes
The Company’s effective tax rate for Q4 Financial Results 2024 was 27.9%, slightly lower than 28.4% for the third quarter but consistent with the 27.6% rate for Q4 2023.
Balance Sheet Highlights
Loans Receivable
Loans receivable, including loans held-for-sale, stood at $1.44 billion as of December 31, 2024, an increase of $17.1 million, or 1.2%, from the previous quarter and a rise of $15.7 million, or 1.1%, compared to the same time last year.
Investment Securities
Investment securities at the end of Q4 2024 were $62.2 million, representing a slight decrease of $1.0 million, or 1.6%, from Q3 2024 but an increase of $2.3 million, or 3.9%, from Q4 2023.
Deposits
Total deposits increased to $1.48 billion as of December 31, 2024, up $33.0 million, or 2.3%, from the third quarter and up $27.0 million, or 1.9%, from the previous year.
Capital
Stockholders’ equity at December 31, 2024, was $255.0 million, reflecting an increase of $4.4 million, or 1.8%, from the previous quarter. Tangible book value per share rose to $23.85, up by $0.41, or 1.8%, from Q3 2024.
