8-K - STEL - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 28, 2022

CBTX, Inc.

(Exact name of registrant as specified in its charter)


Texas	001-38280	20-8339782
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer
incorporation or organization)		Identification No.)

9 Greenway Plaza, Suite 110

Houston , Texas **** 77046

(Address of principal executive offices)

( 713 ) 210-7600

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	CBTX	The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§230.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Item 7.01 Regulation FD Disclosure

On Friday, July 29, 2022 at 8:00 a.m. Central Time, CBTX, Inc. (the “Company”) will host a conference call to review and discuss its financial results for the quarter ended June 30, 2022. The Company will use the materials included in Exhibit 99.1 attached to this Current Report on Form 8-K (“Investor Presentation”) in connection with the conference call and webcast. The Investor Presentation is incorporated into this Item 7.01 by reference and will also be made available on the Company’s website at www.communitybankoftx.com.

The information contained in the Investor Presentation is summary information that should be considered in the context of the Company’s filings with the Securities and Exchange Commission and other public announcements the Company may make by press release or otherwise from time to time. The Investor Presentation speaks as of the date of this Current Report. While the Company may elect to update the Investor Presentation in the future to reflect events and circumstances occurring or existing after the date of this Current Report, the Company specifically disclaims any obligation to do so. The Investor Presentation contains forward-looking statements, please see page 2 of the Investor Presentation for a discussion of certain forward-looking statements that are included therein and the risks and uncertainties related thereto.

In accordance with General Instruction B.2 to Form 8-K, the information furnished in this Item 7.01 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit Number	Description of Exhibit
99.1	CBTX Presentation
104	Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		CBTX, Inc.



Date: July 28, 2022	By:		/s/ Robert T. Pigott, Jr.
			Robert T. Pigott, Jr.<br><br>Senior Executive Vice President and
			Chief Financial Officer

Exhibit 99.1

CBTX, Inc.<br>Second Quarter 2022<br><br>Investor<br>Presentation<br>NASDAQ: CBTX
2<br>SAFE HARBOR STATEMENT AND NON<br>-<br>GAAP FINANCIAL MEASURES<br>NON<br>-<br>GAAP<br>FINANCIAL<br>MEASURES<br>This<br>presentation<br>contains<br>certain<br>non<br>-<br>GAAP<br>(generally<br>accepted<br>accounting<br>principles)<br>financial<br>measures,<br>including<br>tangible<br>equity,<br>tangible<br>assets,<br>tangible<br>book<br>value<br>per<br>share,<br>tangible<br>equity<br>to<br>tangible<br>assets,<br>return<br>on<br>average<br>tangible<br>equity,<br>and<br>pre<br>-<br>provision<br>net<br>revenue<br>..<br>The<br>non<br>-<br>GAAP<br>financial<br>measures<br>that<br>CBTX,<br>Inc<br>..<br>(the<br>“Company”)<br>discusses<br>in<br>this<br>presentation<br>should<br>not<br>be<br>considered<br>in<br>isolation<br>or<br>as<br>a<br>substitute<br>for<br>the<br>most<br>directly<br>comparable<br>or<br>other<br>financial<br>measures<br>calculated<br>in<br>accordance<br>with<br>GAAP<br>..<br>A<br>reconciliation<br>of<br>the<br>non<br>-<br>GAAP<br>financial<br>measures<br>used<br>in<br>this<br>presentation<br>to<br>the<br>most<br>directly<br>comparable<br>GAAP<br>measures<br>is<br>provided<br>at<br>the<br>end<br>of<br>this<br>presentation<br>..<br>FORWARD<br>-<br>LOOKING<br>STATEMENTS<br>This<br>presentation<br>may<br>contain<br>certain<br>forward<br>-<br>looking<br>statements<br>within<br>the<br>meaning<br>of<br>the<br>securities<br>laws<br>that<br>are<br>based<br>on<br>various<br>facts<br>and<br>derived<br>utilizing<br>important<br>assumptions,<br>current<br>expectations,<br>estimates<br>and<br>projections<br>about<br>the<br>Company<br>and<br>its<br>subsidiary<br>..<br>Forward<br>-<br>looking<br>statements<br>include<br>information<br>regarding<br>the<br>Company’s<br>future<br>financial<br>performance,<br>business<br>and<br>growth<br>strategy,<br>projected<br>plans<br>and<br>objectives,<br>as<br>well<br>as<br>projections<br>of<br>macroeconomic<br>and<br>industry<br>trends,<br>which<br>are<br>inherently<br>unreliable<br>due<br>to<br>the<br>multiple<br>factors<br>that<br>impact<br>economic<br>trends,<br>and<br>any<br>such<br>variations<br>may<br>be<br>material<br>..<br>Statements<br>preceded<br>by,<br>followed<br>by<br>or<br>that<br>otherwise<br>include<br>the<br>words<br>“believes,”<br>“expects,”<br>“anticipates,”<br>“intends,”<br>“projects,”<br>“estimates,”<br>“plans”<br>and<br>similar<br>expressions<br>or<br>future<br>or<br>conditional<br>verbs<br>such<br>as<br>“will,”<br>“should,”<br>“would,”<br>“may”<br>and<br>“could”<br>are<br>generally<br>forward<br>-<br>looking<br>in<br>nature<br>and<br>not<br>historical<br>facts,<br>although<br>not<br>all<br>forward<br>-<br>looking<br>statements<br>include<br>the<br>foregoing<br>..<br>Further,<br>certain<br>factors<br>that<br>could<br>affect<br>our<br>future<br>results<br>and<br>cause<br>actual<br>results<br>to<br>differ<br>materially<br>from<br>those<br>expressed<br>in<br>the<br>forward<br>-<br>looking<br>statements<br>include,<br>but<br>are<br>not<br>limited<br>to<br>:<br>natural<br>disasters<br>and<br>adverse<br>weather<br>on<br>the<br>Company’s<br>market<br>area,<br>acts<br>of<br>terrorism,<br>pandemics,<br>an<br>outbreak<br>of<br>hostilities<br>or<br>other<br>international<br>or<br>domestic<br>calamities<br>and<br>other<br>matters<br>beyond<br>the<br>Company’s<br>control<br>;<br>the<br>Company’s<br>ability<br>to<br>manage<br>the<br>economic<br>risks<br>related<br>to<br>the<br>impact<br>of<br>the<br>ongoing<br>COVID<br>-<br>19<br>pandemic<br>(including<br>risks<br>related<br>to<br>its<br>customers’<br>credit<br>quality,<br>deferrals<br>and<br>modifications<br>to<br>loans)<br>;<br>the<br>geographic<br>concentration<br>of<br>the<br>Company’s<br>markets<br>in<br>Houston<br>and<br>Beaumont,<br>Texas<br>;<br>the<br>Company’s<br>ability<br>to<br>manage<br>changes<br>and<br>the<br>continued<br>health<br>or<br>availability<br>of<br>management<br>personnel<br>;<br>the<br>amount<br>of<br>nonperforming<br>and<br>classified<br>assets<br>that<br>the<br>Company<br>holds<br>and<br>the<br>time<br>and<br>effort<br>necessary<br>to<br>resolve<br>nonperforming<br>assets<br>;<br>deterioration<br>of<br>asset<br>quality<br>;<br>interest<br>rate<br>risk<br>associated<br>with<br>the<br>Company’s<br>business<br>;<br>national<br>business<br>and<br>economic<br>conditions<br>in<br>general,<br>in<br>the<br>financial<br>services<br>industry<br>and<br>within<br>the<br>Company’s<br>primary<br>markets<br>;<br>sustained<br>instability<br>of<br>the<br>oil<br>and<br>gas<br>industry<br>in<br>general<br>and<br>within<br>Texas<br>;<br>the<br>composition<br>of<br>the<br>Company’s<br>loan<br>portfolio,<br>including<br>the<br>identity<br>of<br>the<br>Company’s<br>borrowers<br>and<br>the<br>concentration<br>of<br>loans<br>in<br>specialized<br>industries<br>;<br>changes<br>in<br>the<br>value<br>of<br>collateral<br>securing<br>the<br>Company’s<br>loans<br>;<br>the<br>Company’s<br>ability<br>to<br>maintain<br>important<br>deposit<br>customer<br>relationships<br>and<br>its<br>reputation<br>;<br>the<br>Company’s<br>ability<br>to<br>maintain<br>effective<br>internal<br>control<br>over<br>financial<br>reporting<br>;<br>volatility<br>and<br>direction<br>of<br>market<br>interest<br>rates<br>;<br>liquidity<br>risks<br>associated<br>with<br>the<br>Company’s<br>business<br>;<br>systems<br>failures,<br>interruptions<br>or<br>breaches<br>involving<br>the<br>Company’s<br>information<br>technology<br>and<br>telecommunications<br>systems<br>or<br>third<br>-<br>or<br>fourth<br>-<br>party<br>servicers<br>;<br>the<br>failure<br>of<br>certain<br>third<br>-<br>or<br>fourth<br>-<br>party<br>vendors<br>to<br>perform<br>;<br>the<br>institution<br>and<br>outcome<br>of<br>litigation<br>and<br>other<br>legal<br>proceedings<br>against<br>the<br>Company<br>or<br>to<br>which<br>it<br>may<br>become<br>subject<br>;<br>the<br>operational<br>risks<br>associated<br>with<br>the<br>Company’s<br>business<br>;<br>the<br>costs,<br>effects<br>and<br>results<br>of<br>regulatory<br>examinations,<br>investigations,<br>or<br>reviews<br>or<br>the<br>ability<br>to<br>obtain<br>required<br>regulatory<br>approvals<br>;<br>changes<br>in<br>the<br>laws,<br>rules,<br>regulations,<br>interpretations<br>or<br>policies<br>relating<br>to<br>financial<br>institution,<br>accounting,<br>tax,<br>trade,<br>monetary<br>and<br>fiscal<br>matters<br>;<br>further<br>government<br>intervention<br>in<br>the<br>U<br>..<br>S<br>..<br>financial<br>system<br>that<br>may<br>impact<br>how<br>the<br>Company<br>achieves<br>its<br>performance<br>goals<br>;<br>the<br>risk<br>that<br>the<br>cost<br>savings<br>and<br>any<br>revenue<br>synergies<br>from<br>the<br>pending<br>merger<br>with<br>Allegiance<br>Bancshares,<br>Inc<br>..<br>,<br>or<br>Allegiance,<br>may<br>not<br>be<br>fully<br>realized<br>or<br>may<br>take<br>longer<br>than<br>anticipated<br>to<br>be<br>realized<br>;<br>disruption<br>to<br>the<br>parties’<br>businesses<br>as<br>a<br>result<br>of<br>the<br>announcement<br>and<br>pendency<br>of<br>the<br>merge<br>or<br>;<br>the<br>occurrence<br>of<br>any<br>event,<br>change<br>or<br>other<br>circumstances<br>that<br>could<br>give<br>rise<br>to<br>the<br>termination<br>of<br>the<br>merger<br>agreement<br>;<br>the<br>risk<br>that<br>the<br>integration<br>of<br>each<br>party’s<br>operations<br>will<br>be<br>materially<br>delayed<br>or<br>will<br>be<br>more<br>costly<br>or<br>difficult<br>than<br>expected<br>or<br>that<br>the<br>parties<br>are<br>otherwise<br>unable<br>to<br>successfully<br>integrate<br>each<br>party’s<br>businesses<br>into<br>the<br>other’s<br>businesses<br>;<br>the<br>amount<br>of<br>the<br>costs,<br>fees,<br>expenses<br>and<br>charges<br>related<br>to<br>the<br>merger<br>;<br>the<br>ability<br>by<br>each<br>of<br>Allegiance<br>and<br>the<br>Company<br>to<br>obtain<br>required<br>governmental<br>approvals<br>of<br>the<br>merger<br>(and<br>the<br>risk<br>that<br>such<br>approvals<br>may<br>result<br>in<br>the<br>imposition<br>of<br>conditions<br>that<br>could<br>adversely<br>affect<br>the<br>combined<br>company<br>or<br>the<br>expected<br>benefits<br>of<br>the<br>transaction)<br>;<br>reputational<br>risk<br>and<br>the<br>reaction<br>of<br>each<br>company’s<br>customers,<br>suppliers,<br>employees<br>or<br>other<br>business<br>partners<br>to<br>the<br>merger<br>;<br>the<br>failure<br>of<br>the<br>closing<br>conditions<br>in<br>the<br>merger<br>agreement<br>to<br>be<br>satisfied,<br>or<br>any<br>unexpected<br>delay<br>in<br>closing<br>the<br>merger<br>;<br>the<br>possibility<br>that<br>the<br>merger<br>may<br>be<br>more<br>expensive<br>to<br>complete<br>than<br>anticipated,<br>including<br>as<br>a<br>result<br>of<br>unexpected<br>factors<br>or<br>events<br>;<br>the<br>dilution<br>caused<br>by<br>the<br>Company’s<br>issuance<br>of<br>additional<br>shares<br>of<br>its<br>common<br>stock<br>in<br>the<br>merger<br>;<br>general<br>competitive,<br>economic,<br>political<br>and<br>market<br>conditions<br>;<br>and<br>other<br>factors<br>that<br>may<br>affect<br>future<br>results<br>of<br>the<br>Company<br>and<br>Allegiance<br>including<br>changes<br>in<br>asset<br>quality<br>and<br>credit<br>risk<br>;<br>the<br>inability<br>to<br>sustain<br>revenue<br>and<br>earnings<br>growth<br>;<br>changes<br>in<br>interest<br>rates<br>and<br>capital<br>markets<br>;<br>inflation<br>;<br>customer<br>borrowing,<br>repayment,<br>investment<br>and<br>deposit<br>practices<br>;<br>the<br>impact,<br>extent<br>and<br>timing<br>of<br>technological<br>changes<br>;<br>capital<br>management<br>activities<br>;<br>and<br>other<br>actions<br>of<br>the<br>Board<br>of<br>Governors<br>of<br>the<br>Federal<br>Reserve<br>System,<br>Federal<br>Deposit<br>Insurance<br>Corporation<br>and<br>OCC<br>and<br>legislative<br>and<br>regulatory<br>actions<br>and<br>reforms<br>;<br>and<br>other<br>risks,<br>uncertainties,<br>and<br>factors<br>that<br>are<br>discussed<br>from<br>time<br>to<br>time<br>in<br>the<br>Company’s<br>reports<br>and<br>documents<br>filed<br>with<br>the<br>SEC<br>..<br>Additionally,<br>many<br>of<br>these<br>risks<br>and<br>uncertainties<br>have<br>been<br>elevated<br>by<br>and<br>may<br>continue<br>to<br>be<br>elevated<br>by<br>the<br>COVID<br>-<br>19<br>pandemic<br>..
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3<br>SAFE HARBOR STATEMENT AND NON<br>-<br>GAAP FINANCIAL MEASURES<br>The<br>foregoing<br>factors<br>should<br>not<br>be<br>construed<br>as<br>exhaustive<br>and<br>should<br>be<br>read<br>together<br>with<br>the<br>other<br>cautionary<br>statements<br>included<br>in<br>the<br>Company’s<br>Annual<br>Report<br>on<br>Form<br>10<br>-<br>K,<br>filed<br>with<br>the<br>Securities<br>and<br>Exchange<br>Commission,<br>or<br>SEC,<br>and<br>other<br>reports<br>and<br>statements<br>that<br>the<br>Company<br>has<br>filed<br>with<br>the<br>SEC<br>..<br>If<br>one<br>or<br>more<br>events<br>related<br>to<br>these<br>or<br>other<br>risks<br>or<br>uncertainties<br>materialize,<br>or<br>if<br>the<br>Company’s<br>underlying<br>assumptions<br>prove<br>to<br>be<br>incorrect,<br>actual<br>results<br>may<br>differ<br>materially<br>from<br>what<br>it<br>anticipates<br>..<br>Accordingly,<br>you<br>should<br>not<br>place<br>undue<br>reliance<br>on<br>any<br>such<br>forward<br>-<br>looking<br>statements<br>..<br>Any<br>forward<br>-<br>looking<br>statement<br>speaks<br>only<br>as<br>of<br>the<br>date<br>on<br>which<br>it<br>is<br>made,<br>and<br>the<br>Company<br>does<br>not<br>undertake<br>any<br>obligation<br>to<br>publicly<br>update<br>or<br>review<br>any<br>forward<br>-<br>looking<br>statement,<br>whether<br>as<br>a<br>result<br>of<br>new<br>information,<br>future<br>developments<br>or<br>otherwise<br>..<br>New<br>factors<br>emerge<br>from<br>time<br>to<br>time,<br>and<br>it<br>is<br>not<br>possible<br>for<br>the<br>Company<br>to<br>predict<br>which<br>will<br>arise<br>..<br>In<br>addition,<br>the<br>Company<br>cannot<br>assess<br>the<br>impact<br>of<br>each<br>factor<br>on<br>its<br>business<br>or<br>the<br>extent<br>to<br>which<br>any<br>factor,<br>or<br>combination<br>of<br>factors,<br>may<br>cause<br>actual<br>results<br>to<br>differ<br>materially<br>from<br>those<br>contained<br>in<br>any<br>forward<br>-<br>looking<br>statements<br>..<br>Copies<br>of<br>the<br>SEC<br>filings<br>for<br>the<br>Company<br>are<br>available<br>for<br>download<br>free<br>of<br>charge<br>from<br>www<br>..<br>communitybankoftx<br>..<br>com<br>under<br>the<br>Investor<br>Relations<br>tab<br>..<br>Allegiance<br>and<br>the<br>Company<br>disclaim<br>any<br>obligation<br>and<br>do<br>not<br>intend<br>to<br>update<br>or<br>revise<br>any<br>forward<br>-<br>looking<br>statements<br>contained<br>in<br>this<br>communication,<br>which<br>speak<br>only<br>as<br>of<br>the<br>date<br>hereof,<br>whether<br>as<br>a<br>result<br>of<br>new<br>information,<br>future<br>events<br>or<br>otherwise,<br>except<br>as<br>required<br>by<br>federal<br>securities<br>laws<br>..<br>As<br>forward<br>-<br>looking<br>statements<br>involve<br>significant<br>risks<br>and<br>uncertainties,<br>caution<br>should<br>be<br>exercised<br>against<br>placing<br>undue<br>reliance<br>on<br>such<br>statements<br>..
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4<br>COMPANY SNAPSHOT<br>•<br>Founded in 2007 and completed IPO in<br>November 2017<br>•<br>On 11/5/2021, entered into a definitive<br>merger agreement with Allegiance<br>Bancshares, Inc.<br>•<br>Resolved outstanding regulatory matters<br>associated with BSA/AML program in<br>December 2021<br>•<br>Primarily a business bank with 34 banking<br>centers located across Houston, East Texas<br>and Dallas<br>•<br>Strong credit culture and experienced<br>management team with deep ties in the<br>markets served<br>•<br>Low<br>-<br>cost core funding<br>-<br>total deposits of<br>$3.8 billion as of 6/30/2022<br>•<br>Strong insider ownership of 26% as of<br>6/30/2022<br>•<br>Strong capital levels with total risk<br>-<br>based<br>capital ratio of 15.53%, tier 1 risk<br>-<br>based and<br>common equity tier 1 capital ratios of<br>14.49% of 6/30/2022
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5<br>ANNOUNCED MERGER WITH ABTX, INC.<br>•<br>Creates a premier Texas financial institution<br>by combining two of the largest Houston<br>-<br>focused banks<br>•<br>Generates significant shareholder<br>value through materially enhanced metrics<br>•<br>True merger<br>-<br>of<br>-<br>equals<br>–<br>combined<br>management team and equal board<br>contribution<br>•<br>Complementary branch network, with<br>meaningful overlap to support cost savings<br>•<br>Shared vision, community focus, and<br>commitment to clients and employees
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6<br>FINANCIAL HIGHLIGHTS<br>(1)<br>Loans originated under the Paycheck Protection Program, or PPP, net of related fees are included in Loans, Net above. See pag<br>e 1<br>2.<br>(2)<br>See Appendix for reconciliation of non<br>-<br>GAAP financial measures.<br>(3)<br>Pre<br>-<br>provision net revenue is net income, with the provision for credit losses and income tax expense added back.<br>Financial Highlights<br>Balance Sheet (000)<br>Total Assets<br>$<br>4,322,303<br><br>$<br>4,445,977<br><br>$<br>4,486,001<br><br>$<br>4,209,119<br><br>$<br>4,066,534<br><br>Loans, Net<br>3,000,827<br><br>2,848,438<br><br>2,836,179<br><br>2,576,194<br><br>2,692,313<br><br>PPP Loans<br>9,157<br><br><br>17,970<br><br><br>54,262<br><br><br>103,721<br><br><br>184,286<br><br><br>PPP Deferred Fees / Unearned Discount<br>(250)<br><br><br>(484)<br><br><br>(1,473)<br><br><br>(2,954)<br><br><br>(5,207)<br><br><br>PPP Loans, Net<br>(1)<br>8,907<br><br><br>17,486<br><br><br>52,789<br><br><br>100,767<br><br><br>179,079<br><br><br>Unfunded Loan Commitments<br>902,812<br><br><br>907,092<br><br><br>774,960<br><br><br>772,469<br><br><br>692,581<br><br><br>Securities<br>550,083<br><br><br>547,979<br><br><br>425,046<br><br><br>359,539<br><br><br>309,233<br><br><br>Total Deposits<br>3,756,634<br><br>3,821,225<br><br>3,831,284<br><br>3,531,635<br><br>3,416,786<br><br>Book Value per Share<br>21.56<br><br><br>22.03<br><br><br>22.96<br><br><br>23.12<br><br><br>22.75<br><br><br>Tangible Book Value per Share<br>(2)<br>18.11<br><br><br>18.58<br><br><br>19.50<br><br><br>19.65<br><br><br>19.28<br><br><br>Income Statement (000)<br>Net Interest Income<br>$<br>34,872<br><br><br>$<br>32,630<br><br><br>$<br>30,810<br><br><br>$<br>31,249<br><br><br>$<br>31,018<br><br><br>Provision (Recapture) for Credit Losses<br>126<br><br><br>435<br><br><br>(1,207)<br><br><br>(4,895)<br><br><br>(5,038)<br><br><br>Noninterest Income<br>3,546<br><br><br>5,329<br><br><br>4,100<br><br><br>5,562<br><br><br>3,491<br><br><br>Noninterest Expense<br>23,758<br><br><br>24,652<br><br><br>34,832<br><br><br>24,372<br><br><br>25,197<br><br><br>Net Income (Loss)<br>11,707<br><br><br>10,595<br><br><br>(545)<br><br><br>14,421<br><br><br>11,703<br><br><br>Pre-Provision Net Revenue<br>(2)(3)<br>14,660<br><br><br>13,307<br><br><br>78<br><br><br>12,439<br><br><br>9,312<br><br><br>Diluted Earnings (Loss) per Share<br>0.48<br><br><br>0.43<br><br><br>(0.02)<br><br><br>0.59<br><br><br>0.48<br><br><br>Capital Ratios<br>Total Shareholders' Equity to Total Assets<br>12.19<br><br><br>%<br>12.14<br><br><br>%<br>12.53<br><br><br>%<br>13.41<br><br><br>%<br>13.68<br><br><br>%<br>Tangible Equity to Tangible Assets<br>(2)<br>10.44<br><br><br>10.44<br><br><br>10.85<br><br><br>11.64<br><br><br>11.84<br><br><br>Common Equity Tier 1 Capital Ratio<br>14.49<br><br><br>14.97<br><br><br>15.31<br><br><br>16.87<br><br><br>16.46<br><br><br>Tier 1 Risk-Based Capital Ratio<br>14.49<br><br><br>14.97<br><br><br>15.31<br><br><br>16.87<br><br><br>16.46<br><br><br>Total Risk-Based Capital Ratio<br>15.53<br><br><br>16.06<br><br><br>16.42<br><br><br>18.12<br><br><br>17.72<br><br><br>Tier 1 Leverage Ratio<br>11.48<br><br><br>11.08<br><br><br>11.22<br><br><br>11.69<br><br><br>11.63<br><br><br>Q2 2022<br>Q1 2022<br>Q4 2021<br>Q2 2021<br>Q3 2021
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7<br>FINANCIAL HIGHLIGHTS<br>(Continued)<br>(1)<br>Annualized.<br>(2)<br>See Appendix for reconciliation of non<br>-<br>GAAP financial measures.<br>(3)<br>Efficiency ratio is calculated by dividing noninterest expense by the sum of the net interest income and noninterest income.<br>(4)<br>Allowance<br>for<br>credit<br>losses,<br>or<br>ACL<br>..<br>(5)<br>Held<br>for<br>sale,<br>or<br>HFS<br>..<br>Financial Highlights<br>Q4 2021<br>Q3<br>2021<br>Q2 2021<br>Q1 2021<br>Q4 2020<br>Financial Highlights<br>Profitability<br>Return on Average Assets<br>(1)<br>1.08<br><br><br>%<br>0.97<br><br><br>%<br>(0.05)<br><br><br>%<br>1.37<br><br><br>%<br>1.14<br><br><br>%<br>Return on Average Shareholders' Equity<br>(1)<br>8.75<br><br><br>7.67<br><br><br>(0.38)<br><br><br>10.15<br><br><br>8.49<br><br><br>Return on Average Tangible Equity<br>(1)(2)<br>10.38<br><br><br>9.03<br><br><br>(0.45)<br><br><br>11.95<br><br><br>10.03<br><br><br>Net Interest Margin - Tax Equivalent<br>(1)<br>3.49<br><br><br>3.22<br><br><br>3.07<br><br><br>3.22<br><br><br>3.29<br><br><br>Cost of Total Deposits<br>(1)<br>0.13<br><br><br>0.12<br><br><br>0.13<br><br><br>0.14<br><br><br>0.15<br><br><br>Efficiency Ratio<br>(3)<br>61.84<br><br><br>64.94<br><br><br>99.78<br><br><br>66.21<br><br><br>73.02<br><br><br>Credit Quality<br>ACL<br>(4)<br> / Loans Excluding Loans HFS<br>(5)<br>1.06<br><br><br>%<br>1.09<br><br><br>%<br>1.09<br><br><br>%<br>1.23<br><br><br>%<br>1.36<br><br><br>%<br>ACL<br>(4)<br> / Loans Excluding Loans HFS<br>(5)<br>and PPP Loans<br>1.06<br><br><br>1.10<br><br><br>1.11<br><br><br>1.29<br><br><br>1.46<br><br><br>Nonperforming Assets / Total Assets<br>0.65<br><br><br>0.50<br><br><br>0.50<br><br><br>0.49<br><br><br>0.52<br><br><br>Nonperforming Loans / Loans Excluding Loans HFS<br>(5)<br>0.93<br><br><br>0.77<br><br><br>0.79<br><br><br>0.79<br><br><br>0.77<br><br><br>Net Charge-offs (Recoveries) / Average Loans<br>(1)<br>(0.02)<br><br><br>(0.01)<br><br><br>(0.01)<br><br><br>(0.01)<br><br><br>(0.07)<br><br><br>Q2 2022<br>Q1 2022<br>Q4 2021<br>Q2 2021<br>Q3 2021
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8<br>DEPOSITS<br>•<br>Proven ability to generate low<br>-<br>cost<br>core deposits<br>(1)<br>to fund loan growth<br>•<br>Total deposits decreased $64.6 million,<br>or 1.7%, from 3/31/2022 to 6/30/2022<br>and the cost of total deposits was<br>0.13% for Q2 2022<br>•<br>Noninterest<br>-<br>bearing demand deposits<br>were 48.2% of total deposits as of<br>6/30/2022<br>•<br>Core deposits<br>(1)<br>were 95.5% of total<br>deposits with minimal reliance on time<br>deposits as of 6/30/2022<br>•<br>Relationship based ~ 78.6% of loan<br>customers also had a deposit<br>relationship as of 6/30/2022<br>•<br>Loan to deposit ratio was 80.7% as of<br>6/30/2022<br>Stable<br>Core Deposits<br>(1)(2)<br>(1)<br>Core deposits defined as total deposits less time deposits over $100,000.<br>(2)<br>2019<br>–<br>2021 figures as of year end 12/31.<br>41.5%<br>44.7%<br>46.6%<br>48.2%<br>51.2%<br>50.7%<br>50.6%<br>47.3%<br>7.3%<br>4.6%<br>2.8%<br>4.5%<br>2019<br>2020<br>2021<br>6/30/2022<br>Noninterest-Bearing Deposits<br>Other Core Deposits<br>Time Deposits > $100K<br>(%)<br>Noninterest-bearing Demand Accounts<br>$<br>1,810,275<br><br>48.2%<br>Interest-bearing Demand Accounts<br>445,149<br><br><br>11.9%<br>Money Market Accounts<br>1,109,265<br><br>29.5%<br>Savings Accounts<br>130,713<br><br><br>3.5%<br>Certificates and Other Time Deposits > $100K<br>169,616<br><br><br>4.5%<br>Certificates and Other Time Deposits < $100K<br>91,616<br><br><br>2.4%<br>Total Deposits<br>$<br>3,756,634<br><br>100.0%<br>Cost of Interest-bearing Deposits - Six Months<br>Ended 6/30/2022<br>0.13%<br>(000)<br>Deposits<br>6/30/2022
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9<br>LOAN PORTFOLIO<br>(1)<br>Commercial loans defined as total loans less 1<br>-<br>4 Family Residential, Consumer, Agriculture and Other Loans. See page 10.<br>(2)<br>2019<br>–<br>2021 figures as of year end 12/31.<br>(3)<br>See page 11 for information about how the Company classifies its direct and indirect oil and gas loans.<br>•<br>Loans excluding loans held for sale<br>increased $153.0 million from 3/31/2022<br>to 6/30/2022 primarily due to increased<br>loan originations<br>•<br>Average yield on loans was 4.40%,<br>4.39% and 4.36% for Q2 2022, Q1 2022<br>and Q2 2021, respectively, and<br>average yield on loans excluding PPP<br>loans was 4.38%, 4.29% and 4.43% for<br>the same periods<br>•<br>As of 6/30/2022, 76.4% of loans were<br>Houston<br>-<br>based and 6.0% of gross loans<br>were related to oil and gas<br>(3)<br>Loan Portfolio Composition<br>(2)<br>(000)<br>(%)<br>Commercial and Industrial<br>$<br>581,443<br>19.1%<br>Real Estate:<br>Commercial Real Estate<br>1,181,620<br>38.8%<br>Construction and Development<br>560,903<br>18.4%<br>1-4 Family Residential<br>264,428<br>8.7%<br>Multi-family Residential<br>300,582<br>9.9%<br>Consumer, Agriculture and Other<br>152,999<br>5.1%<br>Gross Loans<br>$<br>3,041,975<br>100.0%<br>Less deferred fees and unearned discounts<br>(9,061)<br><br><br>Less loans held for sale<br>—<br><br><br>Loans excluding loans held for sale<br>$<br>3,032,914<br>Average yield on loans - Six Months Ended<br>6/30/2022<br>4.39%<br>Loan Portfolio<br>6/30/2022<br>84.4%<br>87.4%<br>86.0%<br>86.2%<br>15.6%<br>12.6%<br>14.0%<br>13.8%<br>2019<br>2020<br>2021<br>6/30/2022<br>Total 1-4 Family Residential, Consumer, Agriculture and Other Loans<br>Total Commercial Loans(1)
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10<br>COMMERCIAL LOANS<br>•<br>Well<br>-<br>diversified commercial loan<br>portfolio totaled 86.2% of gross loans as<br>of 6/30/2022 and 86.4% as of 3/31/2022<br>•<br>Multi<br>-<br>family community development<br>loans are Texas<br>-<br>based projects<br>promoting affordable housing and<br>totaled $383.8 million ($249.7 million<br>permanent and $134.1 million<br>construction) as of 6/30/2022<br>•<br>Non<br>-<br>owner occupied commercial real<br>estate loans are predominantly local<br>investor projects (i.e., industrial, office<br>and retail buildings) with investors or<br>developers with long<br>-<br>term CBTX<br>relationships<br>•<br>Owner<br>-<br>occupied commercial real<br>estate loans are term financing of real<br>estate facilities for businesses and<br>clients<br>(1) Includes 1<br>-<br>4 Family Residential, Consumer, Agriculture and Other Loans. See page 9.<br>Loan Components - 6/30/2022<br>T<br>Commercial and Industrial:<br>Oil and Gas<br>$<br>114,039<br>4.3%<br>Industrial Construction<br>70,523<br>2.7%<br>Equipment Rental<br>64,641<br>2.5%<br>Professional/Medical<br>56,990<br>2.2%<br>Manufacturing<br>32,364<br>1.2%<br>PPP Loans<br>9,157<br>0.3%<br>Other<br>233,729<br>8.9%<br>Total Commercial and Industrial<br>581,443<br>15.1%<br>Commercial Real Estate:<br>Non-owner Occupied<br>628,190<br>23.9%<br>Owner Occupied<br>486,146<br>18.5%<br>Oil and Gas<br>67,284<br>2.6%<br>Total Commercial Real Estate<br>1,181,620<br>21.1%<br>Construction and Development:<br>Land and Development<br>206,175<br>7.9%<br>Commercial<br>153,914<br>5.9%<br>Multi-family Community Development<br>134,083<br>5.1%<br>1-4 Family - Commercial<br>42,023<br>1.6%<br>1-4 Family - Primary<br>23,254<br>0.9%<br>Oil and Gas<br>1,454<br>0.1%<br>Total Construction and Development<br>560,903<br>21.4%<br>Multi-family Residential:<br>Multi-family Community Development<br>249,722<br>9.5%<br>Other<br>50,860<br>1.9%<br>Total Multi-family Residential<br>300,582<br>11.5%<br>Total Commercial Loans<br>2,624,548<br>100.0%<br>Other Loans<br>(1)<br>417,125<br>Other Oil and Gas Loans<br>302<br>Total Gross Loans<br>$<br>3,041,975<br>Balance (000)<br>% Commercial
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11<br>CONSTRUCTION / OIL AND GAS LOANS<br>(1)<br>Total capital of CommunityBank of Texas, N.A., the wholly<br>-<br>owned subsidiary of the Company.<br>Construction Loans<br>•<br>As of 6/30/2022 and 3/31/2022, construction<br>loans were 112.0% and 96.3% of capital<br>(1)<br>,<br>respectively, and unfunded commitments<br>were $332.9 million and $323.3 million,<br>respectively<br>•<br>Oil and gas loans are loans with revenue<br>related to well<br>-<br>head, oil in the ground or<br>extracting oil or gas, including any activity,<br>product or service related to the oil and gas<br>industry, such as exploration and<br>production, drilling, equipment, services,<br>midstream companies, service companies<br>and commercial real estate companies with<br>significant reliance on oil and gas<br>companies<br>•<br>Direct loans oil and gas loans are loans to an<br>entity with more than 50% of its revenue from<br>the type of companies defined above and<br>indirect loans are loans to an entity with<br>between 20%<br>-<br>50% of its revenue from the<br>type of companies defined above<br>Oil and Gas Loans<br>Percentage of<br>Capital<br>(1)<br>Unfunded<br>Commitments<br>(000)<br>$<br>206,175<br>41.2%<br>$<br>54,587<br>153,914<br>30.7%<br>180,586<br>134,083<br>26.8%<br>43,387<br>42,023<br>8.4%<br>38,739<br>23,254<br>4.6%<br>14,131<br>1,454<br>0.3%<br>1,480<br>$<br>560,903<br>112.0%<br>$<br>332,910<br>Direct:<br>Exploration and Production<br>$<br>31,809<br><br><br>$<br>33,712<br><br><br>$<br>35,631<br><br><br>Oil Field Services<br>57,725<br><br><br>55,095<br><br><br>70,147<br><br><br>Midstream<br>39,293<br><br><br>41,674<br><br><br>43,688<br><br><br>128,827<br><br><br>130,481<br><br><br>149,466<br><br><br>Indirect:<br>Oil Field Services<br>26,669<br><br><br>27,534<br><br><br>29,100<br><br><br>Midstream<br>27,583<br><br><br>27,551<br><br><br>26,305<br><br><br>54,252<br><br><br>55,085<br><br><br>55,405<br><br><br>Total:<br>Exploration and Production<br>31,809<br><br><br>33,712<br><br><br>35,631<br><br><br>Oil Field Services<br>84,394<br><br><br>82,629<br><br><br>99,247<br><br><br>Midstream<br>66,876<br><br><br>69,225<br><br><br>69,993<br><br><br>$<br>183,079<br><br><br>$<br>185,566<br><br><br>$<br>204,871<br><br><br>Components:<br>Lines of Credit<br>$<br>67,855<br><br><br>$<br>77,644<br><br><br>$<br>92,629<br><br><br>Secured by Real Estate and<br>Equipment<br>83,415<br><br><br>74,210<br><br><br>76,611<br><br><br>Production Secured by<br>Mineral Rights<br>31,809<br><br><br>33,712<br><br><br>35,631<br><br><br>$<br>183,079<br><br><br>$<br>185,566<br><br><br>$<br>204,871<br><br><br>Balance (000)<br>6/30/2022<br>3/31/2022<br>12/31/2021<br>Construction Loans - 6/30/2022<br>Oil and Gas Loans (000)<br>Land and Development<br>Commercial<br>Multi-family Community Development<br>1-4 Family - Commercial<br>1-4 Family - Primary<br>Oil and Gas
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•<br>PPP program closed to further<br>borrowings and no PPP loans<br>originated since Q2 2021<br>•<br>As of 6/30/2022, the PPP portfolio<br>included 33 loans with an aggregate<br>outstanding principal balance of $1.1<br>million which qualified for the simplified<br>forgiveness application<br>•<br>Interest earned on PPP loans for Q2<br>2022 and Q1 2022 included the<br>recognition of $234,000 and $989,000,<br>respectively, of net loan fees<br>•<br>Received payments totaling $8.8<br>million and $36.3 million related to<br>forgiveness or payments by customers<br>during Q2 2022 and Q1 2022,<br>respectively<br>12<br>PAYCHECK PROTECTION PROGRAM<br>(1)<br>PPP loans are classified as Commercial and Industrial loans per regulatory guidelines.<br>(2)<br>Annualized.<br>PPP Loans<br>(1)<br> - 6/30/2022<br>Principal<br>Amount (000)<br>Number<br>of PPP<br>Loans<br>Loans $0 - $350,000<br>2,805<br>$<br><br>41<br><br><br>Loans $350,000 - $2 million<br>6,352<br><br><br>8<br><br><br>Gross PPP loans<br>9,157<br><br><br>49<br><br><br>Deferred loan fees and costs<br>(250)<br><br><br>Net PPP loan<br>8,907<br>$<br><br>Yield Analysis Q2 2022<br>Average<br>Outstanding<br>Balance (000)<br>Interest<br>Earned (000)<br>Average<br>Yield<br>(2)<br>Total Loans<br>2,897,335<br>$<br><br>31,768<br>$<br><br>4.40%<br>Less PPP Loans<br>(12,053)<br><br><br>(264)<br><br><br>8.79%<br>Adjusted Total Loans<br>2,885,282<br>$<br><br>31,504<br>$<br><br>4.38%<br>Yield Analysis Q1 2022<br>Average<br>Outstanding<br>Balance (000)<br>Interest<br>Earned (000)<br>Average<br>Yield<br>(2)<br>Total Loans<br>2,886,765<br>$<br><br>31,221<br>$<br><br>4.39%<br>Less PPP Loans<br>(34,976)<br><br><br>(1,076)<br><br><br>12.48%<br>Adjusted Total Loans<br>2,851,789<br>$<br><br>30,145<br>$<br><br>4.29%
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•<br>Allowance for credit losses, or ACL,<br>increased $645,000 from 3/31/2022 to<br>6/30/2022 due to an increase in the<br>loan portfolio as a result of originations<br>outpacing repayments<br>•<br>Decrease in ACL for loans from<br>6/30/2021 to 6/30/2022 resulted from<br>improvements in the national and<br>local economies and forecast<br>assumptions between those periods<br>•<br>The Company’s ACL for unfunded<br>commitments (letters of credit and<br>commitments to extend credit)<br>decreased $354,000 from 3/31/2022 to<br>$3.3 million at 6/30/2022, primarily due<br>to a decrease in available<br>commitments<br>13<br>ALLOWANCE FOR CREDIT LOSSES<br>ACL - Loans by Classification<br>(000)<br>`<br>Commercial and Industrial<br>$<br>9,730<br><br><br>$<br>10,895<br><br>$<br>11,214<br><br>$<br>11,401<br><br>$<br>12,260<br><br>Real Estate:<br>Commercial Real Estate<br>11,708<br><br>11,297<br><br>11,015<br><br>11,744<br><br>13,260<br><br>Construction<br>4,243<br><br><br>3,429<br><br><br>3,310<br><br><br>3,334<br><br><br>4,453<br><br><br>1-4 Family Residential<br>2,071<br><br><br>2,025<br><br><br>2,105<br><br><br>1,700<br><br><br>2,172<br><br><br>Multi-family Residential<br>1,925<br><br><br>1,770<br><br><br>1,781<br><br><br>2,156<br><br><br>2,382<br><br><br>Consumer<br>391<br><br><br>403<br><br><br>406<br><br><br>449<br><br><br>494<br><br><br>Agriculture<br>88<br><br><br>70<br><br><br>88<br><br><br>109<br><br><br>115<br><br><br>Other<br>1,931<br><br><br>1,553<br><br><br>1,426<br><br><br>1,315<br><br><br>2,047<br><br><br>Total ACL - Loans<br>$<br>32,087<br><br>$<br>31,442<br><br>$<br>31,345<br><br>$<br>32,208<br><br>$<br>37,183<br><br>General Reserves<br>$<br>29,147<br><br>$<br>27,539<br><br>$<br>26,625<br><br>$<br>27,064<br><br>$<br>31,502<br><br>Specific Reserves<br>2,940<br><br><br>3,903<br><br><br>4,720<br><br><br>5,144<br><br><br>5,681<br><br><br>ACL / Loans Excluding Loans<br>Held for Sale<br>1.06%<br>1.09%<br>1.09%<br>1.23%<br>1.36%<br>ACL Activity (000)<br>Beginning Balance<br>$<br>31,442<br><br>$<br>31,345<br><br>$<br>32,208<br><br>$<br>37,183<br><br>$<br>40,874<br><br>Provision (Recapture)<br>479<br><br><br>20<br><br><br>(901)<br><br><br>(5,057)<br><br><br>(4,190)<br><br><br>Net Recoveries<br>166<br><br><br>77<br><br><br>38<br><br><br>82<br><br><br>499<br><br><br>Ending Balance<br>$<br>32,087<br><br>$<br>31,442<br><br>$<br>31,345<br><br>$<br>32,208<br><br>$<br>37,183<br><br>Q2 2021<br>6/30/2021<br>6/30/2022<br>Q1 2022<br>Q4 2021<br>3/31/2022<br>12/31/2021<br>9/30/2021<br>Q3 2021<br>Q2 2022
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14<br>NPA AND NET CHARGE<br>-<br>OFFS<br>(1)<br>USA and Texas figures are from SNL Financial aggregates and Q12022 is the latest period available for these comparative figur<br>es.<br>Nonperforming Assets<br>•<br>Nonperforming assets remained low<br>relative to total assets at $28.3 million as<br>of 6/30/2022, compared to $22.1 million<br>as of 3/31/2022<br>•<br>NPA to total assets was 0.65% of total<br>assets as of 6/30/2022, compared to<br>0.52% of total assets as of 6/30/2021<br>due to the $7.3 million increase in<br>nonperforming assets between those<br>periods<br>•<br>Q2 2022 recoveries exceeded charge<br>-<br>offs resulting in a net recovery of<br>$166,000, or 0.02% of average loans,<br>on an annualized basis<br>•<br>Recoveries exceeded charge<br>-<br>offs for<br>the six months ended 6/30/2022<br>resulting in a net recovery of $243,000,<br>or 0.02% of average loans, on an<br>annualized basis<br>Net Charge<br>-<br>Offs<br>Nonperforming Assets / Total Assets<br>(1)<br>Net Charge<br>-<br>Offs (Recoveries) /Average Loans<br>(<br>1)<br>0.59%<br>0.62%<br>0.46%<br>0.44%<br>0.48%<br>0.31%<br>0.19%<br>0.18%<br>0.03%<br>0.61%<br>0.50%<br>0.50%<br>2019<br>2020<br>2021<br>3/31/2022<br>USA<br>TX<br>CBTX<br>0.52%<br>0.49%<br>0.21%<br>0.21%<br>0.17%<br>0.26%<br>0.06%<br>0.05%<br>0.03%<br>0.13%<br>(0.02%)<br>(0.01%)<br>2019<br>2020<br>2021<br>Q1 2022<br>USA<br>TX<br>CBTX
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15<br>REVENUE AND EFFICIENCY<br>(1)<br>2019<br>–<br>2021 figures as of year end 12/31. Q2 2022 figures annualized as of 6/30/2022.<br>(2)<br>Efficiency ratio is calculated by dividing noninterest expense by the sum of the net interest and noninterest income.<br>Revenue<br>Efficiency<br>•<br>Net interest margin, or NIM, on a tax<br>equivalent basis was 3.49% for Q2 2022,<br>3.22% for Q1 2022 and 3.29% for Q2 2021<br>•<br>Cost of interest<br>-<br>bearing liabilities was<br>0.25% for Q1 2022, down from 0.27% for<br>Q1 2022 and 0.32% for Q2 2021<br>•<br>At 6/30/2022, 51.3% of loans excluding<br>PPP loans were variable rate and 74.6%<br>of these variable rate loans had floors<br>•<br>Efficiency ratio was 61.84% for Q2 2022,<br>64.94% for Q1 2022 and 73.02% for Q2<br>2021<br>•<br>Change in the efficiency ratio from Q1<br>20221 to Q2 2022 resulted from a $2.2<br>million increase in net interest income<br>and a $894,000 decrease in noninterest<br>expense, partially offset by a $1.8 million<br>decrease in noninterest income<br>Revenue and NIM<br>(1)<br>Efficiency<br>(1)(2)<br>58.30%<br>64.23%<br>75.61%<br>61.84%<br>2.67%<br>2.45%<br>2.61%<br>2.19%<br>2019<br>2020<br>2021<br>1.80%<br>2.00%<br>2.20%<br>2.40%<br>2.60%<br>2.80%<br>0%<br>20%<br>40%<br>60%<br>80%<br>2019<br>2020<br>2021<br>Q2 2022<br>Axis Title<br>Axis Title<br>Axis Title<br>Axis Title<br>Efficiency Ratio<br>NI Exp. / Avg. Assets<br>$155<br>$143<br>$142<br>$154<br>4.42%<br>3.73%<br>3.31%<br>3.49%<br>2.00%<br>2.50%<br>3.00%<br>3.50%<br>4.00%<br>4.50%<br>5.00%<br>$0<br>$20<br>$40<br>$60<br>$80<br>$100<br>$120<br>$140<br>$160<br>2019<br>2020<br>2021<br>Q2 2022<br>Net Int Inc & Noninterest Income<br>NIM, tax equivalent basis
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16<br>At CommunityBank of Texas, we’re committed to<br>building strong, honest relationships. We strive to<br>keep our clients’ and partners’ needs at the<br>forefront of everything we do. And we measure our<br>success by the success we help create for them.<br>OUR VISION<br>Here to Serve.<br>OUR POSITIONING<br>To experienced business owners,<br>CommunityBank of Texas is the financial partner<br>that delivers a better banking experience.<br>OUR PERSONALITY<br>Resourceful, Trustworthy, Friendly,<br>Responsive, Strong<br>At CommunityBank of Texas, we believe in a powerful and multi<br>-<br>faceted<br>statement, one that drills straight to the heart of our reason for being, while<br>clearly illuminating the mission that our many employees pursue each day:<br>Here to serve.<br>Here to serve<br>is a commitment to building strong and honest relationships, a<br>clarion call to remember that in everything we do, our highest purpose is to<br>transform our extensive financial expertise into success for our clients.<br>Relationships are the bedrock of our business<br>–<br>both internally and externally<br>–<br>and there is a stewardship in the word<br>serve<br>that promises that, in these<br>relationships, we will be caring, humble and precise. That we will keep the<br>needs of our clients at the forefront of our minds at all times and measure<br>our performance by the success we create for each other.<br>The other critical component of our brand vision is the word<br>here<br>, which<br>serves several important roles.<br>Here<br>is a promise that we will be there for our clients and answer the call<br>when they need us the most. We will be Dependable. Honest. Trustworthy.<br>And we will remember that every time is the right time to put our clients’<br>needs first.<br>Here<br>is also a pledge to be visible and present in the communities we serve.<br>It adds weight to the first and most key component of our name:<br>Community.<br>We are not some faceless financial institution located high above the rank<br>and file, safely sheltered in an ivory tower. We are right<br>here<br>, serving the<br>cities and communities in which we live. Day<br>-<br>in and day<br>-<br>out. We sponsor<br>civic events, donate back to our neighbors in need, and spend the time to<br>really get to know our clients on a personal level.<br>In the face of an increasingly digital and impersonal world, we are proudly<br>present in the lives of our clients and our communities.
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APPENDIX
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18<br>NON<br>-<br>GAAP RECONCILIATIONS<br>The<br>Company’s<br>management<br>uses<br>certain<br>non<br>-<br>GAAP<br>financial<br>measures<br>to<br>evaluate<br>performance<br>..<br>We<br>have<br>included<br>in<br>this<br>presentation<br>information<br>related<br>to<br>these<br>non<br>-<br>GAAP<br>financial<br>measures<br>for<br>the<br>applicable<br>periods<br>presented<br>..<br>The<br>following<br>tables<br>reconcile,<br>as<br>of<br>the<br>dates<br>set<br>forth<br>below<br>:<br>(<br>1<br>)<br>book<br>value<br>per<br>share<br>to<br>tangible<br>book<br>value<br>per<br>share<br>;<br>(<br>2<br>)<br>total<br>shareholders’<br>equity<br>to<br>total<br>assets<br>to<br>tangible<br>equity<br>to<br>tangible<br>assets<br>;<br>(<br>3<br>)<br>return<br>on<br>average<br>shareholders’<br>equity<br>to<br>return<br>on<br>average<br>tangible<br>equity<br>;<br>and<br>(<br>4<br>)<br>net<br>income<br>to<br>pre<br>-<br>provision<br>net<br>revenue<br>..<br>The<br>most<br>directly<br>comparable<br>GAAP<br>financial<br>measure<br>for<br>tangible<br>book<br>value<br>per<br>share<br>is<br>book<br>value<br>per<br>share<br>and<br>the<br>most<br>directly<br>comparable<br>GAAP<br>financial<br>measure<br>for<br>tangible<br>equity<br>to<br>tangible<br>assets<br>is<br>total<br>shareholders’<br>equity<br>to<br>total<br>assets<br>..<br>The<br>most<br>directly<br>comparable<br>GAAP<br>financial<br>measure<br>for<br>return<br>on<br>average<br>tangible<br>equity<br>is<br>return<br>on<br>average<br>shareholders’<br>equity<br>..<br>The<br>most<br>directly<br>comparable<br>GAAP<br>financial<br>measure<br>for<br>pre<br>-<br>provision<br>net<br>revenue<br>is<br>net<br>income<br>..
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19<br>NON<br>-<br>GAAP RECONCILIATIONS<br>(Continued)<br>Tangible BV Per Share/Tangible Equity to Tangible Assets<br>Total Shareholders' Equity<br>$<br>526,679<br>$<br>539,723<br>$<br>562,125<br>$<br>564,593<br>$<br>556,227<br>Goodwill<br>(80,950)<br>(80,950)<br>(80,950)<br>(80,950)<br>(80,950)<br>Other Intangibles<br>(3,353)<br>(3,540)<br>(3,658)<br>(3,702)<br>(3,846)<br>Tangible Equity<br>$<br>442,376<br>$<br>455,233<br>$<br>477,517<br>$<br>479,941<br>$<br>471,431<br>Total Assets<br>$<br>4,322,303<br>$<br>4,445,977<br>$<br>4,486,001<br>$<br>4,209,119<br>$<br>4,066,534<br>Goodwill<br>(80,950)<br>(80,950)<br>(80,950)<br>(80,950)<br>(80,950)<br>Other Intangibles<br>(3,353)<br>(3,540)<br>(3,658)<br>(3,702)<br>(3,846)<br>Tangible Assets<br>$<br>4,238,000<br>$<br>4,361,487<br>$<br>4,401,393<br>$<br>4,124,467<br>$<br>3,981,738<br>Common Shares Outstanding<br>24,425<br>24,502<br>24,488<br>24,420<br>24,450<br>Book Value Per Share<br>$<br>21.56<br>$<br>22.03<br>$<br>22.96<br>$<br>23.12<br>$<br>22.75<br>Tangible Book Value Per Share<br>$<br>18.11<br>$<br>18.58<br>$<br>19.50<br>$<br>19.65<br>$<br>19.28<br>Total Shareholders' Equity to Total Assets<br>12.19%<br>12.14%<br>12.53%<br>13.41%<br>13.68%<br>Tangible Equity to Tangible Assets<br>10.44%<br>10.44%<br>10.85%<br>11.64%<br>11.84%<br>Return on Average Tangible Equity/PPNR<br>Average Shareholders' Equity<br>$<br>536,800<br>$<br>560,315<br>$<br>568,167<br>$<br>563,631<br>$<br>552,807<br>Average Goodwill<br>(80,950)<br>(80,950)<br>(80,950)<br>(80,950)<br>(80,950)<br>Average Other Intangibles<br>(3,463)<br>(3,634)<br>(3,693)<br>(3,803)<br>(3,951)<br>Average Tangible Equity<br>$<br>452,387<br>$<br>475,731<br>$<br>483,524<br>$<br>478,878<br>$<br>467,906<br>Annualized Net Income (Loss)<br>$<br>46,957<br>$<br>42,969<br>$<br>(2,162)<br>$<br>57,214<br>$<br>46,941<br>Return on Average Shareholders' Equity<br>8.75%<br>7.67%<br>(0.38%)<br><br><br>10.15%<br>8.49%<br>Return on Average Tangible Equity<br>10.38%<br>9.03%<br>(0.45%)<br><br><br>11.95%<br>10.03%<br>Net Income (Loss)<br>$<br>11,707<br>$<br>10,595<br>$<br>(545)<br>$<br>14,421<br>$<br>11,703<br>Provision (Recapture) for Credit Losses<br>126<br>435<br>(1,207)<br>(4,895)<br>(5,083)<br>Income Tax Expense<br>2,827<br>2,277<br>1,830<br>2,913<br>2,692<br>Pre-Provision Net Revenue<br>$<br>14,660<br>$<br>13,307<br>$<br>78<br>$<br>12,439<br>$<br>9,312<br>Q2 2022<br>Q2 2021<br>Q3 2021<br>Q1 2022<br>Q4 2021<br>6/30/2022<br>9/30/2021<br>6/30/2021<br>12/31/2021<br>3/31/2022
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