CINCINNATI, Feb. 26, 2021 /PRNewswire/ -- Cincinnati
Bancorp, Inc. ("Cincinnati Bancorp") (NASDAQ: CNNB) today
issued a correction to its financial results for the year ended
December 31, 2020, initially reported
on February 10, 2021. The sole
correction relates to earnings per common share for the year ended
December 31, 2020, both basic and
diluted, and the number of weighted-average shares outstanding used
to calculate those measures, as follows:
|
Earnings per
common share –
basic
|
Weighted-average
shares outstanding –
basic (1)
|
Earnings per
common share –
diluted
|
Weighted-average
shares outstanding
– diluted (1)
|
As Initially
Reported
|
$1.09
|
2,885,680
|
$1.07
|
2,931,376
|
As
Corrected
|
$1.14
|
2,749,689
|
$1.12
|
2,789,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Share amounts related
to the periods prior to January 22, 2020 closing of the conversion
offering have been restated to give retroactive recognition to the
1.6351 exchange ratio applied in the conversion
offering.
|
The full text of the corrected release is a follows:
CINCINNATI, Ohio — Cincinnati
Bancorp, Inc. ("Cincinnati Bancorp") (NASDAQ: CNNB) today
reported net income for the year ended December 31, 2020 of $3,155,700, compared to $798,500 for 2019, or an increase of
295.2%. Earnings per basic and diluted share for the year
ended December 31, 2020 were
$1.14 for basic and $1.12 for diluted, compared to $0.28 for basic and $0.27 for diluted for 2019.
Cincinnati Bancorp Chief Executive Officer Robert Bedinghaus said, "Cincinnati Bancorp's
record 2020 earnings were a result of the dedication of our
entire staff as well as the loyalty of our customers and community
partners. The closing of our second-step stock offering in
January 2020, our lending focus on
the residential and commercial real estate markets, and a
concentrated effort to reshape our balance sheet to enhance future
earnings, all combined to drive earnings to this level, even in the
face of the COVID pandemic."
"The COVID pandemic provided many challenges during 2020.
Historic low interest rates provided significant headwind in
defending our existing residential and commercial real estate loan
portfolio, while at the same time provided an even greater tailwind
allowing us to originate approximately $360
million in residential and commercial real estate
loans."
"As we enter into 2021, we believe we are well positioned to
capitalize on the success of 2020 and continue to profitably grow
our Bank while creating long-term value to our shareholders."
Net interest income decreased $199,000, or 3.5%, to $5.4
million for the year ended December
31, 2020 from $5.6 million for
the year ended December 31, 2019.
Average net interest-earning assets increased $14.4 million compared to year end December 31, 2019. The interest rate spread
decreased to 2.39% for the year ended December 31, 2020 from 2.69% for the year ended
December 31, 2019. The net
interest margin decreased to 2.58% for the year ended December 31, 2020 from 2.87% for the year ended
December 31, 2019. The decrease in
the interest rate spread and interest rate margin was primarily due
to the Federal Reserve interest rate reduction in March 2020 in response to the pandemic.
Non-interest income increased $7.7
million, or 261.4%, to $10.7
million for the year ended December
31, 2020 compared to the year ended December 31, 2019. The increase was primarily due
to an increase of $7.4 million on
gain on sales of loans. We sold $310.0
million in residential loans for the year ended December 31, 2020 compared to $93.8 million in residential loans for the year
ended December 31, 2019. Other fee
income increased $578,000, primarily
from the recognition of the fair value of mortgage banking
derivatives. Fee income recognized from the Paycheck Protection
Program was $9,000 for 2020.
Non-interest expense increased $4.2
million, or 54.5%, to $11.8
million for 2020 from $7.7
million for 2019. Salaries and employee benefits increased
$3.4 million, or 79.9%. The increase
in salaries and employee benefit expense was due to commissions
paid loan officers and compensation paid additional loan
origination and loan servicing support staff hired to accommodate
the increased mortgage loan origination volume. Loan costs
increased $309,000, or 91.9% from the
higher mortgage loan origination volume. Advertising expense
increased $179,000, primarily from
the implementation of a "free checking" marketing program through a
third-party vendor. Occupancy costs increased $103,000, or 17.3% due in large part to leasing a
loan production office to accommodate additional loan officers and
lending support staff.
Asset Quality
For the year ended December 31,
2020, Cincinnati Bancorp recorded a provision for loan
losses of $265,000 compared to a
provision for loan losses of $25,000
for the year ended December 31, 2019.
The allowance for loan losses was $1.7
million, or 0.97% of total loans, at December 31, 2020, compared to $1.4 million or 0.78% of total loans, at
December 31, 2019. The increase in
the provision for loan losses in 2020 compared to 2019 was due
primarily to the uncertainty of COVID-19's impact on the economy.
The resurgence of COVID cases nationally in late 2020, and the
prospect of continued economic weakness and continued high
unemployment, indicated a qualitative factor adjustment was
warranted to increase the allowance for loan losses.
About Cincinnati Bancorp Inc.
Cincinnati Bancorp Inc. is the holding company for Cincinnati
Federal. Cincinnati Federal operates four locations in Cincinnati, Ohio and two locations in
Northern Kentucky. Our business
operations are conducted in Hamilton, Warren, Butler and Clermont counties in Ohio, Boone,
Kenton, and Campbell counties in Kentucky and Dearborn County in Indiana. Cincinnati Federal operates an active
mortgage banking unit, which originates both loans for sale into
the secondary market and for retention in our portfolio. The
mortgage banking unit operates from a loan production office
located in Milford, Ohio.
Cincinnati Bancorp common shares are traded on the NASDAQ Capital
Market Exchange under the symbol "CNNB."
Statement About Forward-Looking Statements
This news release contains forward-looking statements within
the meaning of the federal securities laws. These statements may be
identified by use of words such as "anticipate," "believe,"
"could," "estimate," "expect," "intend," "may," "outlook," "plan,"
"potential," "predict," "project," "should," "will," "would" and
similar terms and phrases, including references to
assumptions.
Forward-looking statements are based upon various assumptions
and analyses made by Cincinnati Bancorp in light of management's
experience and its perception of historical trends, current
conditions and expected future developments, as well as other
factors it believes are appropriate under the circumstances. These
statements are not guarantees of future performance and are subject
to risks, uncertainties and other factors (many of which are beyond
Cincinnati Bancorp's control) that could cause actual results to
differ materially from future results expressed or implied by such
forward-looking statements. These factors include, without
limitation, the following: the duration, extent and severity of the
COVID-19 pandemic, including its impact on our business and
operations, the impact of lost fee revenue and increased operating
expenses, as well as its effect on our customers and issuers of
securities, including their ability to make timely payments on
obligations, service providers and on economies and markets more
generally, the timing and occurrence or non-occurrence of events
may be subject to circumstances beyond Cincinnati Bancorp's
control; there may be increases in competitive pressure among
financial institutions or from non-financial institutions; changes
in the interest rate environment may reduce interest margins;
changes in deposit flows, loan demand or real estate values may
adversely affect Cincinnati Bancorp's business; changes in
accounting principles, policies or guidelines may cause Cincinnati
Bancorp's financial condition to be perceived differently; changes
in corporate and/or individual income tax laws may adversely affect
Cincinnati Bancorp's financial condition or results of operations;
general economic conditions, either nationally or locally in some
or all areas in which Cincinnati Bancorp conducts business, or
conditions in the securities markets or the banking industry may be
less favorable than Cincinnati Bancorp currently anticipates;
legislation or regulatory changes may adversely affect Cincinnati
Bancorp's business; technological changes may be more difficult or
expensive than Cincinnati Bancorp anticipates; success or
consummation of new business initiatives may be more difficult or
expensive than Cincinnati Bancorp anticipates; or litigation or
other matters before regulatory agencies, whether currently
existing or commencing in the future, may delay the occurrence or
non-occurrence of events longer than Cincinnati Bancorp
anticipates. Cincinnati Bancorp assumes no obligation to update any
forward-looking statements except as may be required by applicable
law or regulation.
Cincinnati
Bancorp, Inc.
|
Consolidated
Financial Highlights (Unaudited)
|
|
|
December 31,
2020
|
|
December 31,
2019
|
|
(in
thousands)
|
Selected Financial
Condition Data:
|
|
|
|
Total
assets
|
$
237,134
|
|
$
241,802
|
Cash and cash
equivalents
|
32,348
|
|
37,735
|
Interest-bearing time
deposits
|
3,000
|
|
-0-
|
Available-for-sale
securities
|
5,214
|
|
6,733
|
Federal Home Loan
Bank stock
|
2,802
|
|
2,657
|
Loans receivable,
net
|
166,668
|
|
179,332
|
Loans held for
sale
|
13,345
|
|
3,114
|
Federal Home Loan
Bank lender risk account
receivable
|
1,947
|
|
1,713
|
Bank-owned life
insurance
|
4,172
|
|
4,087
|
Total
deposits
|
152,207
|
|
143,411
|
Federal Home Loan
Bank advances
|
38,412
|
|
47,172
|
Total stockholders'
equity
|
41,503
|
|
23,837
|
|
|
|
For the Year Ended
December 31,
|
|
2020
|
|
2019
|
|
(in
thousands)
|
Selected Operating
Data:
|
|
|
|
Interest and dividend
income
|
$
8,027
|
|
$
8,535
|
Interest
expense
|
2,595
|
|
2,904
|
Net interest
income
|
5,432
|
|
5,631
|
Provision for loan
losses
|
265
|
|
25
|
Net interest income
after provision for loan losses
|
5,167
|
|
5,606
|
Noninterest
income
|
10,654
|
|
2,948
|
Noninterest
expenses
|
11,845
|
|
7,667
|
Income before income
taxes
|
3,976
|
|
887
|
Provision for income
taxes
|
820
|
|
89
|
Net income
|
$
3,156
|
|
$
798
|
|
|
|
|
Earnings per common
share - basic
|
$
1.14
|
|
$
0.28
|
Earnings per common
share - diluted
|
$
1.12
|
|
$
0.27
|
Weighted-average
shares outstanding – basic (1)
|
2,749,689
|
|
2,865,400
|
Weighted-average
shares outstanding – diluted (1)
|
2,789,346
|
|
2,907,811
|
|
|
(1)
|
Share amounts related
to the periods prior to the January 22, 2020 closing of the
conversion offering have been restated to give retroactive
recognition to the 1.6351 exchange ratio applied in the conversion
offering.
|
|
For the Twelve
Months
Ended December,
|
|
2020
|
|
2019
|
|
|
|
|
Performance
Ratios (1):
|
|
|
|
Return on average
assets
|
1.36%
|
|
0.38%
|
Return on average
equity
|
10.00%
|
|
3.57%
|
Interest rate spread
(2)
|
2.38%
|
|
2.69%
|
Net interest margin
(3)
|
2.58%
|
|
2.87%
|
Noninterest expense
to average assets
|
5.09%
|
|
3.62%
|
Efficiency ratio
(4)
|
74.87%
|
|
89.64%
|
Average
interest-earning assets to average interest-bearing
liabilities
|
115.04%
|
|
112.88%
|
Average equity to
average assets
|
13.57%
|
|
10.56%
|
|
|
|
|
Capital Ratios
(Bank only):
|
|
|
|
Total risk-based
capital to risk-weighted assets
|
22.0%
|
|
16.3%
|
Tier 1 capital to
risk-weighted assets
|
21.0%
|
|
15.4%
|
Common equity Tier 1
capital to risk-weighted assets
|
21.0%
|
|
15.4%
|
Tier 1 capital to
adjusted total assets
|
14.8%
|
|
10.2%
|
|
|
|
|
Asset Quality
Ratios (1):
|
|
|
|
Allowance for loan
losses as a percentage of total loans
|
0.97%
|
|
0.78%
|
Allowance for loan
losses as a percentage of non-performing
loans
|
961.49%
|
|
1,268.5%
|
Net (charge-offs)
recoveries to average outstanding loans during
the period
|
-%
|
|
0.13%
|
Non-performing loans
as a percentage of total loans
|
0.10%
|
|
0.06%
|
Non-performing loans
as a percentage of total assets
|
0.07%
|
|
0.05%
|
Total non-performing
assets as a percentage of total assets
|
0.07%
|
|
0.05%
|
Total non-performing
assets and accruing troubled debt
restructurings as a percentage of
total assets
|
0.56%
|
|
0.64%
|
|
|
|
|
Other
Data:
|
|
|
|
Number of
offices
|
6
|
|
6
|
Number of full-time
equivalent employees
|
74
|
|
57
|
|
|
(1)
|
Annualized, where
appropriate.
|
(2)
|
Represents the
difference between the weighted average yield on average
interest-earning assets and the weighted average cost of average
interest-bearing liabilities.
|
(3)
|
Represents net
interest income as a percentage of average interest-earning
assets.
|
(4)
|
Represents
noninterest expense divided by the sum of net interest income and
noninterest income.
|
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SOURCE Cincinnati Bancorp, Inc.