California BanCorp Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2022

California BanCorp

OAKLAND, Calif., July 28, 2022 (GLOBE NEWSWIRE) -- California BanCorp (NASDAQ: CALB), whose subsidiary is California Bank of Commerce, announced today its financial results for the second quarter and six months ended June 30, 2022.

The Company reported net income of $4.2 million for the second quarter of 2022, representing an increase of $571,000, or 16%, compared to $3.7 million for the first quarter of 2022 and an increase of $82,000, or 2%, compared to $4.2 million in the second quarter of 2021. For the six months ended June 30, 2022, net income was $7.9 million representing an increase of $946,000, or 14%, compared to $7.0 million for the same period in 2021.

Diluted earnings per share of $0.51 for the second quarter of 2022 compared to $0.44 for the first quarter of 2022 and $0.50 for the second quarter of 2021.   For the six months ended June 30, 2022, diluted earnings per share of $0.94 compared to $0.84 for the same period in 2021.

“During the second quarter, we generated a significant increase in our level of profitability driven by strong loan growth, net interest margin expansion resulting from our asset-sensitive balance sheet, and improved operating leverage,” said Steven Shelton, Chief Executive Officer of California BanCorp. “The highly productive commercial banking teams we have built, including our specialty lending groups, continue to effectively capitalize on the strong economic conditions and loan demand we are seeing in our markets, which has resulted in our loan portfolio increasing by $335 million over the past year, excluding PPP loans. Our momentum continues to build, and in the second quarter we generated the highest level of new loan production in our history, excluding PPP loans. Combined with increased line utilization, this resulted in 38% annualized loan growth for the quarter, excluding PPP loans, with well balanced growth across asset classes, industries, and property types. We expect to see a continuation of the positive trends that are driving our improved profitability, although it is likely that we will have a lower level of loan growth in the second half of 2022 as higher rates impact loan demand. Our asset quality remains exceptionally strong, with nonperforming assets representing just 3 basis points of total assets at June 30^th, and we believe our conservative underwriting and focus on commercial clients in largely recession-resistant industries will help us to effectively manage through any weakening in economic conditions that emerges over the near-term.”

Financial Highlights:

Profitability - three months ended June 30, 2022 compared to March 31, 2022

• Net income of $4.2 million and $0.51 per diluted share, compared to $3.7 million and $0.44 per share, respectively.

• Revenue of $17.6 million increased $557,000, or 3%, compared to $17.1 million for the first quarter of 2022.

• Net fees from Paycheck Protection Program (“PPP”) loans contributed $667,000 to net interest income compared to $791,000 for the first quarter of 2022.

• Provision for loan losses of $925,000 decreased $25,000, or 3%, primarily as a result of continued adjustments in the qualitative reserve assessment in response to general macroeconomic changes offset, in part, by growth in the commercial and real estate other loan portfolios.

• Non-interest income of $1.4 million decreased $1.1 million, or 45%, primarily due to a gain recognized on the sale of a portion of our solar loan portfolio during the first quarter of 2022.

• Non-interest expense, excluding capitalized loan origination costs, of $11.9 million remained consistent with the first quarter of 2022.

Profitability - six months ended June 30, 2022 compared to June 30, 2021

• Net income of $7.9 million and $0.94 per diluted share, compared to $7.0 million and $0.84 per diluted share, respectively.

• Revenue of $34.7 million increased $5.9 million, or 20%, compared to $28.8 million in the prior year.

• Net fees from PPP loans contributed $1.5 million to net interest income compared to $3.3 million in the prior year.

• Provision for loan losses increased $2.7 million primarily due to growth in the loan portfolio combined with a release of reserves in the second quarter of 2021 as a result of the continued assessment of qualitative reserves regarding the general macroeconomic changes related to COVID-19 as it pertained to our overall loan portfolio.

• Non-interest income of $3.9 million increased $2.1 million, or 109%, primarily due to a gain recognized on the sale of a portion of our solar loan portfolio during the first quarter of 2022 combined with an increase in service charges and other fees.

• Non-interest expense, excluding capitalized loan origination costs, of $23.8 million compared to $22.6 million for the same period in the prior year.

Financial Position – June 30, 2022 compared to March 31, 2022

• Total assets increased by $25.8 million, or 1%, to $1.89 billion.

• Total gross loans increased by $99.9 million, or 7%, to $1.50 billion. Excluding the impact of PPP loans forgiven by the SBA, total gross loans increased during the second quarter by $129.0 million, or 9%, to $1.49 billion.

• Total deposits decreased by $48.4 million, or 3%, to $1.55 billion.

• Total borrowings increased by $67.8 million, or 211%, to $100.0 million primarily due to an FHLB term borrowing, partially offset by the repayment of borrowings under the Federal Reserve Paycheck Protection Program Liquidity Facility (“PPPLF”).

• Capital ratios remain healthy with a tier-one leverage ratio of 8.27%, tier I capital ratio of 8.09% and total risk-based capital ratio of 11.84%.
  

Net Interest Income and Margin:

Net interest income for the quarter ended June 30, 2022 was $16.2 million, an increase of $1.7 million or 12%, from $14.5 million for the three months ended March 31, 2022, and an increase of $2.6 million, or 19%, from $13.6 million for the quarter ended June 30, 2021. The increase in net interest income compared to the first quarter of 2022 was primarily attributable to the growth of the loan portfolio and an increase in net interest margin. Compared to the second quarter of 2021, the increase in net interest income resulted from a more favorable mix of earning assets offset, in part, by a reduction in the amortization of net fees received on PPP loans.

Net interest income for the six months ended June 30, 2022 was $30.7 million, an increase of $3.8 million, or 14% over $26.9 million for the six months ended June 30, 2021. The increase in net interest income was primarily attributable to an increase in interest income as the result of a more favorable mix of earning assets combined with higher yields on those assets.

The Company’s net interest margin for the second quarter of 2022 was 3.65%, compared to 3.19% for the first quarter of 2022 and 2.98% for the same period in 2021. The increase in margin compared to the prior quarter was primarily due to growth in the loan portfolio and a more favorable mix of earning assets. The increase in margin from the same period last year was primarily the result of an increase in loan yields resulting from growth in the commercial and real estate other loan portfolios combined with a reduction in the average cost of deposits, partially offset by a reduction of net fees recognized on PPP loans.

The Company’s net interest margin for the six months ended June 30, 2022 was 3.42% compared to 2.96% for the same period in 2021.   The increase in margin compared to prior year was primarily due to a more favorable mix of higher yielding earning assets combined with a lower cost of deposits.

Non-Interest Income:

The Company’s non-interest income for the quarters ended June 30, 2022, March 31, 2022, and June 30, 2021 was $1.4 million, $2.5 million and $956,000, respectively. The decrease in non-interest income from the first quarter of 2022 was primarily due to a gain recognized during the first quarter on the sale of a portion of our solar loan portfolio. The increase in non-interest income compared to the second quarter of 2021 was primarily due to an increase in service charges and other fee income.

For the six months ended June 30, 2022, non-interest income of $3.9 million compared to $1.9 million for the same period of 2021. The increase in non-interest income from prior year was the result of an increase in service charges and loan related fees and a gain recognized on the sale of a portion of our solar loan portfolio.

Net interest income and non-interest income comprised total revenue of $17.6 million, $17.1 million, and $14.5 million for the quarters ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively. Total revenue for the six months ended June 30, 2022 and 2021 was $34.7 million and $28.8 million, respectively.

Non-Interest Expense:

The Company’s non-interest expense for the quarters ended June 30, 2022, March 31, 2022, and June 30, 2021 was $10.8 million, $10.9 million, and $9.8 million, respectively. The increase in non-interest expense from the second quarter of 2021 was primarily due to an increase in salaries and benefits related to investments to support the continued growth of the business, partially offset by a reduction in capitalized loan origination costs. Excluding capitalized loan origination costs, non-interest expense for the second quarter of 2022, the first quarter of 2022 and the second quarter of 2021 was $11.9 million, $11.9 million, and $11.1 million, respectively.

Non-interest expense of $21.7 million for the six months ended June 30, 2022 compared to $19.9 million for the same period of 2021. Excluding capitalized loan origination costs, non-interest expense was $23.8 million for the six months ended June 30, 2022 and $22.6 million for the same period in 2021 which reflects the Company’s investment in infrastructure to support the continued growth of the Company.

The Company’s efficiency ratio, the ratio of non-interest expense to revenues, was 61.41%, 63.99%, and 67.63% for the quarters ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively. For the six months ended June 30, 2022 and 2021, the Company’s efficiency ratio was 62.68% and 69.15%, respectively.

Balance Sheet:

Total assets of $1.89 billion as of June 30, 2022, represented an increase of $25.8 million, or 1%, compared to $1.86 billion at March 31, 2022 and an increase of $16.3 million, or 1%, compared to $1.87 billion at June 30, 2021. The increase in total assets from previous quarters was primarily due to loan growth, offset by decreased liquidity resulting from the outflow of deposits related to forgiveness of PPP loans.

Total gross loans increased by $99.9 million, or 7%, to $1.50 billion at June 30, 2022, from $1.40 billion at March 31, 2022 and increased by $147.7 million, or 11% compared to $1.35 billion at June 30, 2021.

During the second quarter of 2022, commercial and real estate other loans increased by $66.8 million and $52.9 million, respectively, due to organic growth. Partially offsetting these increases within the total loan portfolio, SBA loans decreased by $30.7 million primarily due to PPP loan forgiveness.

Year-over-year, commercial and real estate other loans increased by $163.9 million and $178.1 million, respectively, due to organic growth. These increases were partially offset by a decrease in SBA loans of $191.4 million primarily due to PPP loan forgiveness.

As a result of the CARES Act PPP, which was launched in April 2020 and re-launched in January 2021, the Company funded approximately $491.3 million in loans. Approximately $483.5 million of those balances have been granted forgiveness by the SBA as of June 30, 2022.

Total deposits decreased by $48.4 million, or 3%, to $1.55 billion at June 30, 2022 from $1.60 billion at March 31, 2022, and decreased by $127.6 million, or 8%, from $1.68 billion at June 30, 2021. The decrease in total deposits from the end of the first quarter of 2022 was primarily due to a reduction in non-interest bearing demand deposits of $31.2 million and money market and savings deposits of $60.6 million, offset by an increase in interest-bearing demand deposits of $9.1 million and time deposits of $34.4 million.

Compared to the same period last year, the decrease in total deposits was primarily concentrated in non-interest bearing demand deposits and money market and savings deposits as a result of outflows related to forgiveness of PPP loans. Non-interest bearing deposits, primarily commercial business operating accounts, represented 46.1% of total deposits at June 30, 2022, compared to 46.7% at March 31, 2022 and 47.1% at June 30, 2021.

As of June 30, 2022, the Company had outstanding borrowings, excluding junior subordinated debt securities, of $100.0 million, compared to $32.2 million at March 31, 2022. The Company had no outstanding borrowing at June 30, 2021. The increase in borrowings during the second quarter of 2022 was primarily due to an FHLB term borrowing, partially offset by the repayment of borrowings under PPPLF.

Asset Quality:

The provision for credit losses decreased to $925,000 for the second quarter of 2022 compared to $950,000 for the first quarter of 2022, and increased from $(1.1) million for the second quarter of 2021. The Company did not have any loan charge-offs or recoveries during the second quarter of 2022. Net loan recoveries in the first quarter of 2022 were $1,000 or 0.00% of gross loans, and net charge-offs in the second quarter of 2021 were $237,000, or 0.02%.

Non-performing assets (“NPAs”) to total assets of 0.03% at June 30, 2022 and March 31, 2022 compared to 0.07% at June 30, 2021, with non-performing loans of $549,000, $549,000 and $1.2 million, respectively, on those dates.

The allowance for loan losses increased by $925,000 to $16.0 million, or 1.06% of total loans, at June 30, 2022, compared to $15.0 million, or 1.07% of total loans, at March 31, 2022 and $13.2 million, or 0.98% of total loans at June 30, 2021. The increase in the allowance as a percentage of total loans at June 30, 2022 compared to June 30, 2021 reflects an increase in the qualitative reserve assessment in response to general macroeconomic changes pertaining to the mix of our loan portfolio.

Capital Adequacy:

At June 30, 2022, shareholders’ equity totaled $158.7 million compared to $154.6 million at March 31, 2022 and $143.7 million one year ago. As a result, the Company’s total risk-based capital ratio, tier one capital ratio and leverage ratio of 11.84%, 8.09%, and 8.27%, respectively, were all above the regulatory standards for “well-capitalized” institutions of 10.00%, 8.00% and 5.00% respectively.

“Internal capital generation remains our preferred method for supporting the continued growth of our franchise,” said Thomas A. Sa, President, Chief Financial Officer and Chief Operating Officer of California BanCorp. “Our strong financial performance enabled us to continue building capital and growing our tangible book value per share, which increased 2.3% during the second quarter.”

About California BanCorp:

California BanCorp, the parent company for California Bank of Commerce, offers a broad range of commercial banking services to closely held businesses and professionals located throughout Northern California. The Company’s common stock trades on the Nasdaq Global Select marketplace under the symbol CALB. For more information on California BanCorp, call us at (510) 457-3751, or visit us at www.californiabankofcommerce.com.

Contacts:

Steven E. Shelton, (510) 457-3751
Chief Executive Officer
seshelton@bankcbc.com

Thomas A. Sa, (510) 457-3775
President, Chief Financial Officer and Chief Operating Officer
tsa@bankcbc.com

Use of Non-GAAP Financial Information:

This press release contains both financial measures based on GAAP and non-GAAP. Non-GAAP financial measures are used where management believes them to be helpful in understanding the Company’s results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward-Looking Information:

Statements in this news release regarding expectations and beliefs about future financial performance and financial condition, as well as trends in the Company’s business and markets are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," "outlook," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." The forward-looking statements in this news release are based on current information and on assumptions that the Company makes about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond the Company’s control. As a result of those risks and uncertainties, the Company’s actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause the Company to make changes to future plans. Those risks and uncertainties include, but are not limited to, the risk of incurring loan losses, which is an inherent risk of the banking business; the risk that the Company will not be able to continue its internal growth rate; the risk that the United States economy will experience slowed growth or recession or will be adversely affected by domestic or international economic conditions and risks associated with the Federal Reserve Board taking actions with respect to interest rates, any of which could adversely affect, among other things, the values of real estate collateral supporting many of the Company’s loans, interest income and interest rate margins and, therefore, the Company’s future operating results; risks associated with changes in income tax laws and regulations; and risks associated with seeking new client relationships and maintaining existing client relationships. Readers of this news release are encouraged to review the additional information regarding these and other risks and uncertainties to which our business is subject that are contained in our Annual Report on Form 10-K for the year ended December 31, 2021 which is on file with the Securities and Exchange Commission (the “SEC”). Additional information will be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, which we expect to file with the SEC during the third quarter of 2022, and readers of this release are urged to review the additional information that will be contained in that report.

The COVID-19 pandemic has created economic and financial disruptions that have adversely affected, and may continue to adversely affect, our business, operations, financial performance and prospects. Even after the COVID-19 pandemic subsides, it is possible that the U.S. and other major economies experience or continue to experience a prolonged recession, which could materially and adversely affect our business, operations, financial performance and prospects. Statements about the effects of the COVID-19 pandemic on our business, operations, financial performance and prospects may constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond our control, including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on our customers, third parties and us.

Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today's date, or to make predictions based solely on historical financial performance. The Company disclaims any obligation to update forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise, except as may be required by law.

FINANCIAL TABLES FOLLOW

CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED FINANCIAL INFORMATION (UNAUDITED) - PROFITABILITY
(Dollars in Thousands, Except Per Share Data)
										Change												Change
QUARTERLY HIGHLIGHTS:		Q2 2022				Q1 2022				$				%				Q2 2021				$				%
Interest income		$	17,706			$	15,924			$	1,782			11	%			$	15,179			$	2,527			17	%
Interest expense			1,483				1,398				85			6	%				1,593				(110	)		-7	%
Net interest income			16,223				14,526				1,697			12	%				13,586				2,637			19	%
Provision for loan losses			925				950				(25	)		-3	%				(1,100	)			2,025			-184	%
Net interest income after provision for loan losses			15,298				13,576				1,722			13	%				14,686				612			4	%
Non-interest income			1,394				2,534				(1,140	)		-45	%				956				438			46	%
Non-interest expense			10,819				10,916				(97	)		-1	%				9,835				984			10	%
Income before income taxes			5,873				5,194				679			13	%				5,807				66			1	%
Income tax expense			1,629				1,521				108			7	%				1,645				(16	)		-1	%
Net income		$	4,244			$	3,673			$	571			16	%			$	4,162			$	82			2	%
Diluted earnings per share		$	0.51			$	0.44			$	0.07			16	%			$	0.50			$	0.01			2	%
Net interest margin			3.65	%			3.19	%		+46 Basis Points									2.98	%		+67 Basis Points
Efficiency ratio			61.41	%			63.99	%		-258 Basis Points									67.63	%		-622 Basis Points
										Change
YEAR-TO-DATE HIGHLIGHTS:		Q2 2022				Q2 2021				$				%
Interest income		$	33,630			$	30,211			$	3,419			11	%
Interest expense			2,881				3,289				(408	)		-12	%
Net interest income			30,749				26,922				3,827			14	%
Provision for loan losses			1,875				(800	)			2,675			334	%
Net interest income after provision for loan losses			28,874				27,722				1,152			4	%
Non-interest income			3,928				1,877				2,051			109	%
Non-interest expense			21,735				19,915				1,820			9	%
Income before income taxes			11,067				9,684				1,383			14	%
Income tax expense			3,150				2,713				437			16	%
Net income		$	7,917			$	6,971			$	946			14	%
Diluted earnings per share		$	0.94			$	0.84			$	0.10			12	%
Net interest margin			3.42	%			2.96	%		+46 Basis Points
Efficiency ratio			62.68	%			69.15	%		-647 Basis Points

CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED FINANCIAL INFORMATION (UNAUDITED) - FINANCIAL POSITION
(Dollars in Thousands, Except Per Share Data)
										Change												Change
PERIOD-END HIGHLIGHTS:		Q2 2022				Q1 2022				$				%				Q2 2021				$				%
Total assets		$	1,885,352			$	1,859,595			$	25,757			1	%			$	1,869,063			$	16,289			1	%
Gross loans			1,500,379				1,400,474				99,905			7	%				1,352,639				147,740			11	%
Deposits			1,552,139				1,600,522				(48,383	)		-3	%				1,679,772				(127,633	)		-8	%
Tangible equity			151,251				147,068				4,183			3	%				136,207				15,044			11	%
Tangible book value per share		$	18.19			$	17.78			$	0.41			2	%			$	16.55			$	1.63			10	%
Tangible equity / total assets			8.02	%			7.91	%		+11 Basis Points									7.29	%		+73 Basis Points
Gross loans / total deposits			96.67	%			87.50	%		+917 Basis Points									80.53	%		1614 Basis Points
Noninterest-bearing deposits / total deposits			46.09	%			46.65	%		-56 Basis Points									47.12	%		-103 Basis Points
QUARTERLY AVERAGE										Change												Change
HIGHLIGHTS:		Q2 2022				Q1 2022				$				%				Q2 2021				$				%
Total assets		$	1,864,196			$	1,928,542			$	(64,346	)		-3	%			$	1,909,558			$	(45,362	)		-2	%
Total earning assets			1,783,017				1,846,225				(63,208	)		-3	%				1,829,980				(46,963	)		-3	%
Gross loans			1,464,922				1,371,187				93,735			7	%				1,415,729				49,193			3	%
Deposits			1,567,412				1,652,013				(84,601	)		-5	%				1,607,847				(40,435	)		-3	%
Tangible equity			150,176				146,032				4,144			3	%				134,379				15,797			12	%
Tangible equity / total assets			8.06	%			7.57	%		+49 Basis Points									7.04	%		+102 Basis Points
Gross loans / total deposits			93.46	%			83.00	%		+1046 Basis Points									88.05	%		+541 Basis Points
Noninterest-bearing deposits / total deposits			46.86	%			44.88	%		+198 Basis Points									45.28	%		+158 Basis Points
YEAR-TO-DATE AVERAGE										Change
HIGHLIGHTS:		Q2 2022				Q2 2021				$				%
Total assets		$	1,896,191			$	1,916,725			$	(20,534	)		-1	%
Total earning assets			1,814,448				1,835,028				(20,580	)		-1	%
Gross loans			1,418,315				1,415,618				2,697			0	%
Deposits			1,609,478				1,588,408				21,070			1	%
Tangible equity			148,115				132,706				15,409			12	%
Tangible equity / total assets			7.81	%			6.92	%		+89 Basis Points
Gross loans / total deposits			88.12	%			89.12	%		-100 Basis Points
Noninterest-bearing deposits / total deposits			45.85	%			44.64	%		+121 Basis Points

CALIFORNIA BANCORP AND SUBSIDIARY
SELECTED INTERIM FINANCIAL INFORMATION (UNAUDITED) - ASSET QUALITY
(Dollars in Thousands)
ALLOWANCE FOR LOAN LOSSES:		06/30/22				03/31/22				12/31/21				09/30/21				06/30/21
Balance, beginning of period		$	15,032			$	14,081			$	13,571			$	13,240			$	14,577
Provision for loan losses, quarterly			925				950				504				300				(1,100	)
Charge-offs, quarterly			-				-				-				-				(278	)
Recoveries, quarterly			-				1				6				31				41
Balance, end of period		$	15,957			$	15,032			$	14,081			$	13,571			$	13,240
NONPERFORMING ASSETS:		06/30/22				03/31/22				12/31/21				09/30/21				06/30/21
Loans accounted for on a non-accrual basis		$	549			$	549			$	232			$	1,233			$	1,234
Loans with principal or interest contractually past due 90 days or more and still accruing interest			-				-				-				-				-
Nonperforming loans		$	549			$	549			$	232			$	1,233			$	1,234
Other real estate owned			-				-				-				-				-
Nonperforming assets		$	549			$	549			$	232			$	1,233			$	1,234
Loans restructured and in compliance with modified terms			-				-				-				-				-
Nonperforming assets and restructured loans		$	549			$	549			$	232			$	1,233			$	1,234
Nonperforming loans by asset type:
Commercial		$	-			$	-			$	-			$	-			$	-
Real estate other			-				-				-				1,000				1,000
Real estate construction and land			-				-				-				-				-
SBA			549				549				232				233				234
Other			-				-				-				-				-
Nonperforming loans		$	549			$	549			$	232			$	1,233			$	1,234
ASSET QUALITY:		06/30/22				03/31/22				12/31/21				09/30/21				06/30/21
Allowance for loan losses / gross loans			1.06	%			1.07	%			1.02	%			1.04	%			0.98	%
Allowance for loan losses / nonperforming loans			2906.56	%			2738.07	%			6069.40	%			1100.65	%			1072.93	%
Nonperforming assets / total assets			0.03	%			0.03	%			0.01	%			0.06	%			0.07	%
Nonperforming loans / gross loans			0.04	%			0.04	%			0.02	%			0.09	%			0.09	%
Net quarterly charge-offs / gross loans			0.00	%			0.00	%			0.00	%			0.00	%			0.02	%

CALIFORNIA BANCORP AND SUBSIDIARY
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands, Except Per Share Data)
		Three months ended												Six months ended
		06/30/22				03/31/22				06/30/21				06/30/22				06/30/21
INTEREST INCOME
Loans		$	16,298			$	14,886			$	14,703			$	31,184			$	29,287
Federal funds sold			280				136				84				416				172
Investment securities			1,128				902				392				2,030				752
Total interest income			17,706				15,924				15,179				33,630				30,211
INTEREST EXPENSE
Deposits			796				806				1,138				1,602				2,329
Other			687				592				455				1,279				960
Total interest expense			1,483				1,398				1,593				2,881				3,289
Net interest income			16,223				14,526				13,586				30,749				26,922
Provision for loan losses			925				950				(1,100	)			1,875				(800	)
Net interest income after provision for loan losses			15,298				13,576				14,686				28,874				27,722
NON-INTEREST INCOME
Service charges and other fees			1,134				889				638				2,023				1,279
Gain on sale of loans			-				1,393				-				1,393				-
Other non-interest income			260				252				318				512				598
Total non-interest income			1,394				2,534				956				3,928				1,877
NON-INTEREST EXPENSE
Salaries and benefits			7,146				7,093				6,374				14,239				12,741
Premises and equipment			1,267				1,302				1,209				2,569				2,406
Other			2,406				2,521				2,252				4,927				4,768
Total non-interest expense			10,819				10,916				9,835				21,735				19,915
Income before income taxes			5,873