 HOUSTON, July 29, 2020 GLOBE NEWSWIRE -- CBTX, Inc., or the Company NASDAQ: CBTX, the bank holding company for CommunityBank of Texas, N.A., or the Bank, today announced net income of 2.2 million, or 0.09 per diluted share, for the quarter ended June 30, 2020, compared to 7.5 million, or 0.30 per diluted share, for the quarter ended March 31, 2020 and 14.3 million, or 0.57 per diluted share, for the quarter ended June 30, 2019. I am proud to work every day beside the great CommunityBank of Texas family, said Robert R. Franklin, Jr., Chairman, CEO and President of the Company. Our focus remains on our customer base and the communities we serve. We continue to operate in an unprecedented time related to the COVID-19 pandemic and the fog it has created over our daily activities and economies.We believe in the resiliency of our customer base and the communities in which we operate, Mr. Franklin continued. We also know how to get through crises. Our team is experienced and many of the same tools we have used in the past are important to help with the outcomes from the pandemic. We persist in our efforts to work to keep our employees safe with internal controls around social distancing, sanitizing and making work from home solutions available when possible.Many of our customers are back to work and finding their own solutions to the problems created by the pandemic. Our requests from customers for deferrals continues to decline, and the over 2,000 PPP loans we made last quarter have helped our customers through these unprecedented times. said Mr. Franklin.While our customers and team are resilient and moving forward, we believe that it will be several months before we can more clearly see the effects of the shut-down of our economy, both at a local and national level, Mr. Franklin said. We are also monitoring the slowdown of the oil and gas industry and the new normal that the industry will operate under as we go forward.We continued to add to our provision for loan losses during the second quarter primarily because of the general uncertainty created in our markets. We believe that our reserve build and our continued strong capital position gives us the stability we need to continue to work with our customers in these tough times, Mr. Franklin added. We believe that CBTX, Inc. will emerge from this crisis strong and able to pursue any opportunities that may arise.Highlights Net income was 2.2 million for the second quarter of 2020, a decrease of 5.3 million and 12.1 million compared to the first quarter of 2020 and the second quarter of 2019, respectively, primarily due to the increase in the provision for credit losses during the second quarter of 2020. The provision for credit losses was 9.9 million for the second quarter of 2020, compared to 5.0 million for the first quarter of 2020 and 807,000 for the second quarter of 2019. The increase in 2020 was primarily due to the impact of COVID-19, and the sustained instability of the oil and gas industry on current and forecasted economic factors. The allowance for credit losses, or ACL, for loans increased to 39.7 million at June 30, 2020, compared to 31.2 million at March 31, 2020 and 25.3 million at June 30, 2019. Funded 336.1 million in loans under the Small Business Administrations Paycheck Protection Program, or the PPP, during the second quarter of 2020. Net interest margin on a tax equivalent basis was 3.68 for the quarter ended June 30, 2020, compared to 4.06 for the quarter ended March 31, 2020 and 4.53 for the quarter ended June 30, 2019. Declared quarterly cash dividend of 0.10 per share of common stock paid on July 15, 2020. Maintained strong capital ratios with the Companys total risk-based capital ratio being 16.56 at June 30, 2020, compared to 16.42 at March 31, 2020 and 15.59 at June 30, 2019.Operating ResultsNet Interest IncomeNet interest income was 32.2 million for the second quarter of 2020, compared to 32.2 million for the first quarter of 2020 and 34.3 million for the second quarter of 2019. Net interest income decreased 62,000 during the second quarter of 2020, compared to the first quarter of 2020, primarily due to lower rates on loans and other interest-earning assets, partially offset by the impact of increased average loans and lower rates on interest-bearing deposits. Net interest income decreased 2.1 million during the second quarter of 2020, compared to the second quarter of 2019, primarily due to lower rates on loans and other interest-earning assets, partially offset by the impact of increased average loans and lower rates on interest-bearing deposits.The yield on interest-earning assets was 3.91 for the second quarter of 2020, compared to 4.56 for the first quarter of 2020 and 5.07 for the second quarter of 2019. The cost of interest-bearing liabilities was 0.52 for the second quarter of 2020, 0.94 for the first quarter of 2020 and 1.09 for the second quarter of 2019. Yields on interest-earning assets decreased, and the costs of interest-bearing liabilities did not decrease to the same extent, which caused compression of the Companys net interest margin on a tax equivalent basis to 3.68 for the second quarter of 2020, from 4.06 for the first quarter of 2020 and 4.53 for the second quarter of 2019.ProvisionRecapture for Credit LossesThe provision for credit losses was 9.9 million for the second quarter of 2020, compared to 5.0 million for the first quarter of 2020 and 807,000 for the second quarter of 2019. The increase in the provision for credit losses for the first and second quarters of 2020 was primarily due to the impact of COVID-19 and the sustained instability of the oil and gas industry during such periods on the local and national economy and on current and forecasted economic factors.The ACL for loans was 39.7 million, or 1.35 of total loans, at June 30, 2020, compared to 31.2 million, or 1.17 of total loans, at March 31, 2020 and 25.3 million, or 0.96 of total loans, at June 30, 2019. The increase in the ACL for loans was primarily due to the impact of COVID-19 and the sustained instability of the oil and gas industry on current and forecasted economic factors during the first and second quarters of 2020.The liability associated with the ACL for unfunded commitments was 5.0 million at June 30, 2020, compared to 3.7 million at March 31, 2020 and 378,000 at June 30, 2019. The increase was primarily due to the adoption of Accounting Standards Update, or ASU 2016-13, Financial InstrumentsCredit Losses Topic 326: Measurement of Credit Losses on Financial Instruments, or CECL, effective January 1, 2020, the impact of COVID-19 and the sustained instability of the oil and gas industry, as noted above.Noninterest IncomeNoninterest income was 2.9 million for the second quarter of 2020, 4.3 million for the first quarter of 2020 and 7.3 million for the second quarter of 2019. The decrease in noninterest income during the second quarter of 2020, as compared to the first quarter of 2020 was primarily due to increased interest rate swap origination fees recognized on new interest rate swap transactions during the first quarter of 2020. The decrease in noninterest income during the second quarter of 2020, as compared to the second quarter of 2019 was primarily due to nontaxable death benefit proceeds of 4.7 million received under bank-owned life insurance policies and a gain of 3.3 million over the carrying value recorded during the second quarter of 2019.Noninterest ExpenseNoninterest expense was 22.5 million for the second quarter of 2020, compared to 22.1 million for the first quarter of 2020 and 23.4 million for the second quarter of 2019. The increase in noninterest expense of 406,000 between the second and first quarter of 2020 was primarily due to increased professional and director fees, mainly consulting fees, and increased regulatory fees, partially offset by a decrease in salaries and employee benefits resulting from decreases in employee benefits costs.The decrease in noninterest expense of 908,000 between the second quarter of 2020 and the second quarter of 2019 primarily related to a reduction in professional and director fees, mainly legal fees, partially offset by increased consulting fees.Income TaxesIncome tax expense was 539,000 for the second quarter of 2020, 1.9 million for the first quarter of 2020 and 3.1 million for the second quarter of 2019. The effective tax rates were 19.95 for the second quarter of 2020, 19.85 for the first quarter of 2020 and 17.69 for the second quarter of 2019. The differences between the federal statutory rate of 21 and the effective tax rates were largely attributable to permanent differences primarily related to tax exempt interest and bank-owned life insurance.Balance Sheet HighlightsLoansLoans, excluding loans held for sale, were 2.9 billion at June 30, 2020, 2.7 billion at March 31, 2020 and 2.6 billion at June 30, 2019.During the second quarter of 2020, the Company funded 2,010 PPP loans to customers in the principal amount totaling 336.1 million and an average loan balance of 167,000. The Company recognized a net yield of 2.28 during the second quarter of 2020 on these PPP loans.In support of customers impacted by COVID-19, the Company offered relief through payment deferrals. The deferral periods range from one to six-months, with the majority of the deferrals involving three-month arrangements. As of June 30, 2020, the Company had entered into deferral arrangements on 689 loans with total outstanding principal of 545.0 million. As of June 30, 2020 and March 31, 2020, these arrangements resulted in the deferral of payments, including both principal and interest, totaling 17.0 million and 936,000, respectively. 