CB Financial Services, Inc. Announces First Quarter 2024 Financial Results and Declares Quarterly Cash Dividend

Share Name	Share Symbol	Market	Type
CB Financial Services Inc	NASDAQ:CBFV	NASDAQ	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.02	0.07%	28.35	11.34	45.36	28.51	28.11	28.20	11,052	22:30:00

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CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”), today announced its first quarter 2024 financial results.

Three Months Ended

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

(Dollars in thousands, except per share data) (Unaudited)

Net Income (GAAP)

4,196

12,966

2,672

2,757

4,156

Net Income Adjustments

(1,000

)

(9,905

)

(127

)

Adjusted Net Income (Non-GAAP) (1)

3,196

3,061

2,701

2,835

4,029

Earnings per Common Share - Diluted (GAAP)

0.82

2.52

0.52

0.54

0.81

Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1)

0.62

0.60

0.53

0.55

0.79

(1)

Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted as presented later in this Press Release.

2024 First Quarter Financial Highlights

(Comparisons to three months ended March 31, 2023 unless otherwise noted)

Net income was $4.20 million, compared to $4.16 million. Results were impacted by the December 2023 sale of the Bank’s subsidiary insurance company, Exchange Underwriters (EU) which drove decreases in noninterest income and noninterest expense, a gain on bank-owned life insurance and a recovery of provision for credit losses.
- Adjusted net income (Non-GAAP) was $3.2 million compared to $4.0 million.
- Income before income tax expense was $5.1 million compared to $5.3 million.
- Adjusted pre-provision net revenue (PPNR) (Non-GAAP) was $4.1 million compared to $5.3 million.
Earnings per diluted common share (EPS) increased to $0.82 from $0.81.
- Adjusted earning per common share - diluted (Non-GAAP) was $0.62, compared to $0.79.
Return on average assets (annualized) was 1.17%, compared to 1.21%.
- Adjusted return on average assets (annualized) (Non-GAAP) was 0.89%, compared to 1.18%.
Return on average equity (annualized) was 12.03%, compared to 14.69%.
- Adjusted return on average equity (annualized) (Non-GAAP) was 9.16%, compared to 14.24%.
Net interest margin (“NIM”) declined to 3.36% from 3.51%.
Net interest and dividend income was $11.59 million, compared to $11.58 million.
Noninterest income decreased to $1.9 million, compared to $2.8 million. Significant changes in noninterest income included a $1.9 million decrease in insurance commissions due to the sale of EU, partially offset by increases in gains on bank-owned life insurance and gains on the disposal of premises and equipment of $613,000 and $263,000, respectively.
Noninterest expense decreased to $8.4 million, compared to $9.0 million, due to decreases in compensation and benefits, data processing, intangible amortization and other noninterest expenses, partially offset by increases in contracted services, advertising, occupancy and equipment expenses.

(Amounts at March 31, 2024; comparisons to December 31, 2023, unless otherwise noted)

Total assets increased to $1.47 billion from $1.46 billion.
Total loans decreased $14.1 million, or 1.3%, to $1.10 billion compared to $1.11 billion, and included decreases in consumer loans and commercial and industrial loans of $11.1 million and $8.0 million, respectively, partially offset by increases in commercial real estate loans, other loans and construction loans of $3.3 million, $1.4 million and $1.2 million, respectively. The consumer loan portfolio is primarily comprised of indirect automobile loans and decreases as a result of the discontinuation of that product as of June 30, 2023. Excluding the $11.3 million decrease in indirect automobile loans, total loans decreased $2.5 million, or 0.2%.
Nonperforming loans to total loans was 0.20% at March 31, 2024 and December 31, 2023.
Total deposits were $1.26 billion, a decrease of $4.7 million, compared to $1.27 billion.
Book value per share was $27.53, compared to $27.32 as of December 31, 2023.
Tangible book value per share (Non-GAAP) was $25.52, compared to $25.23 as of December 31, 2023. The change was due to an increase in stockholders’ equity primarily related to current period net income of $4.2 million, partially offset by a $1.3 million increase in accumulated other comprehensive loss and the payment of $1.3 million in dividends since December 31, 2023.

Management Commentary

President and CEO John H. Montgomery commented, “While our prior period results reflected the ongoing trend of net interest margin pressure, our previously announced balance sheet strategies and recent loan production are contributing to stabilization and improvement in this area. While loan production remained consistent, we did experience an overall decrease of $13.9 million or 1.2% in our loan balances. Our first quarter loan balances were impacted by runoff in the formerly exited indirect lending portfolio of $11.1 million and a $20.0 million payoff of a commercial line of credit. However, I am pleased with our loan production for the quarter and our overall loan growth continued to show positive signs with several categories increasing during the quarter. During this time of deposit disruption, our deposits remained relatively stable, albeit continuing to shift from non-interest and low interest-bearing accounts to higher-cost time deposits. Notably, our asset quality remains robust, with nonperforming loans remaining at $2.2 million or 0.20% of total loans.

During the quarter, we successfully implemented a new website and domain name (www.cb.bank) as part of our ongoing investment in technology and infrastructure to better serve our clients. Additionally, we invested in the build-out of our Treasury team and onboarded a new Chief Human Resource Officer to continue our success with attracting and retaining top talent. Our operational team developed new indexed money market deposit products aimed at offering a fair, but market adjustable rate.

Finally, we were named by Newsweek as one of the top 250 Regional Banks in America. This recognition is the direct result of us staying true to our cornerstone by delivering an exceptional client experience everyday.

As we look ahead, we remain committed to our long-term plan, investing in our franchise, and delivering an exceptional client experience that benefits all our stakeholders."

Dividend Declaration

The Company’s Board of Directors declared a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about May 31, 2024, to stockholders of record as of the close of business on May 15, 2024.

2024 First Quarter Financial Review

Net Interest and Dividend Income

Net interest and dividend income increased $8,000, or 0.1%, to $11.59 million for the three months ended March 31, 2024 compared to $11.58 million for the three months ended March 31, 2023.

NIM (GAAP) decreased to 3.36% for the three months ended March 31, 2024 compared to 3.51% for the three months ended March 31, 2023. Fully tax equivalent (FTE) NIM (Non-GAAP) decreased 15 basis points (“bps”) to 3.37% for the three months ended March 31, 2024 compared to 3.52% for the three months ended March 31, 2023.
Interest and dividend income increased $3.7 million, or 26.3%, to $18.0 million for the three months ended March 31, 2024 compared to $14.2 million for the three months ended March 31, 2023.
- Interest income on loans increased $2.5 million, or 19.9%, to $14.8 million for the three months ended March 31, 2024 compared to $12.4 million for the three months ended March 31, 2023. The average yield on loans increased 67 bps to 5.50% compared to 4.83% resulting in a $1.8 million increase in interest income on loans. The average balance of loans increased $47.3 million to $1.09 billion from $1.04 billion, generating $694,000 of additional interest income on loans. The increase in loan yield has been driven by a reduction in lower yielding consumer loans due to the discontinuation of the indirect automobile loan product with the redeployment of those funds into higher yielding commercial loan products.
- Interest income on taxable investment securities increased $1.3 million, or 138.9%, to $2.3 million for the three months ended March 31, 2024 compared to $964,000 for the three months ended March 31, 2023 driven by a 210 bp increase in average yield coupled with a $22.6 million increase in average balances. The increase in the average yield was the result of the Bank implementing a balance sheet repositioning strategy of its portfolio of available-for-sale securities during the fourth quarter of 2023. The Bank sold $69.3 million in market value of its lower yielding U.S. government agency, mortgage-backed and municipal securities with an average yield of 1.89% and purchased $69.3 million of higher yielding mortgage-backed and collateralized mortgage obligation securities with an average yield of 5.49%.
- Interest income on interest-earning deposits at other banks decreased $72,000, to $733,000 for the three months ended March 31, 2024 compared to $805,000 for the three months ended March 31, 2023 driven by a $14.3 million decrease in average balances, partially offset by a 58 bp increase in the average yield.
Interest expense increased $3.7 million, or 140.3%, to $6.4 million for the three months ended March 31, 2024 compared to $2.7 million for the three months ended March 31, 2023.
- Interest expense on deposits increased $3.5 million, or 139.3%, to $6.0 million for the three months ended March 31, 2024 compared to $2.5 million for the three months ended March 31, 2023. Rising market interest rates led to the repricing of interest-bearing demand and money market deposits and a shift in deposits from noninterest-bearing to interest-bearing demand and time deposits which resulted in a 132 bp, or 116.0%, increase in the average cost of interest-bearing deposits compared to the three months ended March 31, 2023. This accounted for a $3.2 million increase in interest expense. Additionally, interest-bearing deposit balances increased $86.1 million, or 9.6%, to $978.3 million as of March 31, 2024 compared to $892.2 million as of March 31, 2023, accounting for a $298,000 increase in interest expense.
- Interest expense on borrowed funds increased $247,000, or 157.3%, to $404,000 for the three months ended March 31, 2024 compared to $157,000 for the three months ended March 31, 2023. The average balance of borrowed funds increased $18.7 million due to $20.0 million of FHLB long-term advances added during the second quarter of 2023. The increase in the average balance accounted for a $232,000 increase in interest expense.

Provision for Credit Losses

The provision for credit losses recorded for the three months ended March 31, 2024 was a net recovery of $37,000. The provision for credit losses - loans was a recovery of $143,000 and was primarily due to a decrease in loan balances while the provision for credit losses - unfunded commitments was $106,000 and was due to an increase in qualitative factors. This compared to an $80,000 provision for credit losses recorded for the three months ended March 31, 2023.

Noninterest Income

Noninterest income decreased $894,000, or 31.8%, to $1.9 million for the three months ended March 31, 2024, compared to $2.8 million for the three months ended March 31, 2023. This decrease resulted primarily from a $1.9 million decrease in insurance commissions as no income was recognized for the three months ended March 31, 2024 due to the December 2023 sale of EU, compared to a full quarter of income recognized for the three months ended March 31, 2023. This decrease was partially offset by net increases in gains on bank-owned life insurance and gains on the disposal of premises and equipment of $613,000 and $263,000, respectively. The gain on bank owned life insurance was $915,000 resulting from one death claim during the three months ended March 31, 2024 compared to $302,000 resulting from two death claims during the three months ended March 31, 2023. The gain on the disposal of premises and equipment was $274,000 resulting from the sale of one branch office building during the three months ended March 31, 2024 compared to $11,000 for the three months ended March 31, 2023.

Noninterest Expense

Noninterest expense decreased $600,000, or 6.6%, to $8.4 million for the three months ended March 31, 2024 compared to $9.0 million for the three months ended March 31, 2023. Salaries and benefits decreased $503,000, or 9.9%, to $4.6 million primarily due to no expense related to EU recognized for the three months ended March 31, 2024 due to the December 2023 sale, compared to $864,000 of expense recognized for the three months ended March 31, 2023, partially offset by merit increases and revenue producing staff additions. Data processing expense decreased $165,000 due to additional expenses realized during the three months ended March 31, 2023 related to a 2022 data processing conversion. Other noninterest expense decreased $164,000 and intangible amortization decreased $104,000 primarily due to EU expenses of $108,000 and $47,000, respectively, realized during the three months ended March 31, 2023. Partially offsetting these decreases, contracted services, advertising, occupancy and equipment expenses increased $134,000, $50,000, $48,000 and $46,000, respectively.

Statement of Financial Condition Review

Assets

Total assets increased $16.0 million, or 1.1%, to $1.47 billion at March 31, 2024, compared to $1.46 billion at December 31, 2023.

Cash and due from banks increased $5.5 million, or 8.0%, to $73.7 million at March 31, 2024, compared to $68.2 million at December 31, 2023.
Securities increased $25.2 million, or 12.2%, to $232.3 million at March 31, 2024, compared to $207.1 million at December 31, 2023. The securities balance was primarily impacted by the purchase of $29.8 million of collateralized loan obligation securities, partially offset by $3.1 million of principal repayments on amortizing securities.

Loans and Credit Quality

Total loans decreased $14.1 million, or 1.3%, to $1.10 billion at March 31, 2024 compared to $1.11 billion at December 31, 2023. This was driven by decreases in consumer loans and commercial and industrial loans of $11.1 million and $8.0 million, respectively, partially offset by increases in commercial real estate loans, other loans and construction loans of $3.3 million, $1.4 million and $1.2 million, respectively. The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to rising market interest rates and the discontinuation of this product offering as of June 30, 2023. This portfolio is expected to continue to decline as resources are allocated and production efforts are focused on more profitable commercial products. The decrease in commercial and industrial loans was primarily due to the prepayment of a $20.0 million line of credit and a $5.0 million syndicated national credit.
The allowance for credit losses (ACL) was $9.6 million at March 31, 2024 and $9.7 million at December 31, 2023. As a result, the ACL to total loans was 0.87% at March 31, 2024 and December 31, 2023. During the current year, the Company recorded a net recovery of credit losses of $37,000.
Net recoveries for the three months ended March 31, 2024 were $18,000. Net recoveries for the three months ended March 31, 2023 were $756,000, or 0.29% of average loans on an annualized basis primarily due to recoveries totaling $750,000 related to a prior year $2.7 million charged-off commercial and industrial loan.
Nonperforming loans, which includes nonaccrual loans and accruing loans past due 90 days or more, were $2.2 million at March 31, 2024 and December 31, 2023. Nonperforming loans to total loans ratio was 0.20% at March 31, 2024 and December 31, 2023.

Total liabilities increased $14.2 million, or 1.1%, to $1.33 billion at March 31, 2024 compared to $1.32 billion at December 31, 2023.

Deposits

Total deposits decreased $4.7 million to $1.262 billion as of March 31, 2024 compared to $1.267 billion at December 31, 2023. Non interest-bearing demand deposits decreased $2.6 million, interest-bearing demand deposits decreased $39.9 million and savings deposits decreased $4.5 million, while money market deposits increased $7.3 million and time deposits increased $35.0 million. Deposit changes were primarily the result of cyclical fluctuations in municipal deposits and the current interest rate environment causing a shift in deposit products to higher priced time deposits. Additionally, the Bank added $13.0 million of brokered certificates of deposit during the period. Brokered certificates of deposit totaled $42.0 million as of March 31, 2024 compared to $29.0 million at December 31, 2023, all mature within three months and were utilized to fund the purchase of floating rate collateralized loan obligation securities. At March 31, 2024, FDIC insured deposits totaled approximately 63.1% of total deposits while an additional 15.0% of deposits were collateralized with investment securities.

Accrued Interest Payable and Other Liabilities

Accrued interest payable and other liabilities increased $18.9 million, or 131.1%, to $33.3 million at March 31, 2024, compared to $14.4 million at December 31, 2023 primarily due to the purchase of $10.6 million of syndicated loans and $10.1 million of securities which were unsettled at the end of the period.

Stockholders’ Equity

Stockholders’ equity increased $1.8 million, or 1.3%, to $141.6 million at March 31, 2024, compared to $139.8 million at December 31, 2023. The key factor positively impacting stockholders’ equity was $4.2 million of net income for the current period, partially offset by a $1.3 million increase in accumulated other comprehensive loss and the payment of $1.3 million in dividends since December 31, 2023.

Book value per share

Book value per common share was $27.53 at March 31, 2024 compared to $27.32 at December 31, 2023, an increase of $0.21.

Tangible book value per common share (Non-GAAP) was $25.52 at March 31, 2024, compared to $25.23 at December 31, 2023, an increase of $0.29.

Refer to “Explanation of Use of Non-GAAP Financial Measures” at the end of this Press Release.

About CB Financial Services, Inc.

CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers a broad array of retail and commercial lending and deposit services.

For more information about CB Financial Services, Inc. and Community Bank, visit our website at www.communitybank.tv.

Statement About Forward-Looking Statements

Statements contained in this press release that are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and such forward-looking statements are subject to significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions contained in the Act. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries include, but are not limited to, general and local economic conditions, changes in market interest rates, deposit flows, demand for loans, real estate values and competition, competitive products and pricing, the ability of our customers to make scheduled loan payments, loan delinquency rates and trends, our ability to manage the risks involved in our business, our ability to control costs and expenses, inflation, market and monetary fluctuations, changes in federal and state legislation and regulation applicable to our business, actions by our competitors, and other factors that may be disclosed in the Company’s periodic reports as filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.

CB FINANCIAL SERVICES, INC.

SELECTED CONSOLIDATED FINANCIAL INFORMATION

(Dollars in thousands, except share and per share data) (Unaudited)

Selected Financial Condition Data

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

Assets

Cash and Due From Banks

73,691

68,223

52,597

78,093

103,545

Securities

232,276

207,095

172,904

181,427

189,025

Loans Held for Sale

200

—

Loans

Real Estate:

Residential

346,938

347,808

346,485

338,493

332,840

Commercial

470,430

467,154

466,910

458,614

452,770

Construction

44,323

43,116

41,874

44,523

39,522

Commercial and Industrial

103,313

111,278

100,873

102,266

79,501

Consumer

100,576

111,643

122,516

134,788

146,081

Other

30,763

29,397

23,856

22,470

21,151

Total Loans

1,096,343

1,110,396

1,102,514

1,101,154

1,071,865

Allowance for Credit Losses

(9,582

)

(9,707

)

(10,848

)

(10,666

)

(10,270

)

Loans, Net

1,086,761

1,100,689

1,091,666

1,090,488

1,061,595

Premises and Equipment Held for Sale

—

Premises and Equipment, Net

19,548

19,704

18,524

18,582

17,732

Bank-Owned Life Insurance

23,763

25,378

25,227

25,082

24,943

Goodwill

9,732

Intangible Assets, Net

617

958

2,177

2,622

3,068

Accrued Interest Receivable and Other Assets

25,459

24,312

26,665

26,707

21,068

Total Assets

1,472,047

1,456,091

1,399,492

1,432,733

1,430,708

Liabilities

Deposits

Noninterest-Bearing Demand Accounts

275,182

277,747

305,145

316,098

350,911

Interest-Bearing Demand Accounts

323,134

362,994

357,381

374,654

359,051

Money Market Accounts

208,375

201,074

189,187

185,814

206,174

Savings Accounts

190,206

194,703

207,148

217,267

234,935

Time Deposits

265,597

230,641

177,428

169,482

130,449

Total Deposits

1,262,494

1,267,159

1,236,289

1,263,315

1,281,520

Short-Term Borrowings

—

121

Other Borrowings

34,688

34,678

34,668

34,658

14,648

Accrued Interest Payable and Other Liabilities

33,275

14,420

13,689

18,171

17,224

Total Liabilities

1,330,457

1,316,257

1,284,646

1,316,144

1,313,513

Stockholders’ Equity

141,590

139,834

114,846

116,589

117,195

Total Liabilities and Stockholders’ Equity

1,472,047

1,456,091

1,399,492

1,432,733

1,430,708

(Dollars in thousands, except share and per share data) (Unaudited)

Three Months Ended

Selected Operating Data

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

Interest and Dividend Income:

Loans, Including Fees

14,838

14,804

14,049

13,426

12,371

Securities:

Taxable

2,303

1,164

940

950

964

Tax-Exempt

—

Dividends

Other Interest and Dividend Income

818

872

819

760

844

Total Interest and Dividend Income

17,986

16,905

15,874

15,203

14,244

Interest Expense:

Deposits

5,991

5,336

4,750

3,842

2,504

Short-Term Borrowings

—

Other Borrowings

404

407

238

155

Total Interest Expense

6,395

5,769

5,157

4,083

2,661

Net Interest and Dividend Income

11,591

11,136

10,717

11,120

11,583

(Recovery) Provision for Credit Losses - Loans

(143

)

(1,147

)

291

492

Provision (Recovery) for Credit Losses - Unfunded Commitments

106

(273

)

115

(60

)

—

Net Interest and Dividend Income After Net (Recovery) Provision for Credit Losses

11,628

12,556

10,311

10,688

11,503

Noninterest Income:

Service Fees

415

460

466

448

445

Insurance Commissions

969

1,436

1,511

1,922

Other Commissions

224

144

Net Gain (Loss) on Sales of Loans

—

)

Net Loss on Securities

(166

)

(9,830

)

(37

)

(100

)

(232

)

Net Gain on Purchased Tax Credits

Gain on Sale of Subsidiary

—

24,578

—

Net Gain on Disposal of Premises and Equipment

274

—

Income from Bank-Owned Life Insurance

148

151

145

139

140

Net Gain on Bank-Owned Life Insurance Claims

915

—

302

Other Income

232

121

301

Total Noninterest Income

1,916

16,518

2,412

2,269

2,810

Noninterest Expense:

Salaries and Employee Benefits

4,576

6,224

5,369

5,231

5,079

Occupancy

749

810

698

789

701

Equipment

264

298

265

283

218

Data Processing

692

726

714

718

857

Federal Deposit Insurance Corporation Assessment

129

189

224

152

Pennsylvania Shares Tax

297

217

195

260

Contracted Services

281

299

286

434

147

Legal and Professional Fees

212

434

320

246

182

Advertising

129

158

114

Other Real Estate Owned (Income)

(23

)

(36

)

(35

)

(37

)

Amortization of Intangible Assets

341

430

445

446

445

Other Expense

781

1,016

878

895

945

Total Noninterest Expense

8,428

10,765

9,487

9,501

9,028

Income Before Income Tax Expense

5,116

18,309

3,236

3,456

5,285

Income Tax Expense

920

5,343

564

699

1,129

Net Income

4,196

12,966

2,672

2,757

4,156

Three Months Ended

Per Common Share Data

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

Dividends Per Common Share

0.25

Earnings Per Common Share - Basic

0.82

2.53

0.52

0.54

0.81

Earnings Per Common Share - Diluted

0.82

2.52

0.52

0.54

0.81

Weighted Average Common Shares Outstanding - Basic

5,129,903

5,119,184

5,115,026

5,111,987

5,109,597

Weighted Average Common Shares Outstanding - Diluted

5,142,286

5,135,997

5,126,546

5,116,134

5,115,705

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

Common Shares Outstanding

5,142,901

5,118,713

5,120,678

5,111,678

5,116,830

Book Value Per Common Share

27.53

27.32

22.43

22.81

22.90

Tangible Book Value per Common Share (1)

25.52

25.23

20.10

20.39

20.40

Stockholders’ Equity to Assets

9.6

8.2

8.1

8.2

Tangible Common Equity to Tangible Assets (1)

9.0

8.9

7.4

7.3

7.4

Three Months Ended

Selected Financial Ratios (2)

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

Return on Average Assets

1.17

3.62

0.75

0.79

1.21

Return on Average Equity

12.03

44.99

9.03

9.38

14.69

Average Interest-Earning Assets to Average Interest-Bearing Liabilities

137.07

138.67

139.65

142.28

147.38

Average Equity to Average Assets

9.72

8.04

8.32

8.38

8.27

Net Interest Rate Spread

2.67

2.56

2.54

2.78

3.13

Net Interest Rate Spread (FTE) (1)

2.68

2.57

2.55

2.79

3.14

Net Interest Margin

3.36

3.19

3.13

3.29

3.51

Net Interest Margin (FTE) (1)

3.37

3.21

3.14

3.30

3.52

Net (Recoveries) Charge-Offs to Average Loans

(0.01

)

—

0.04

(0.29

)

Efficiency Ratio

62.40

38.93

72.26

70.96

62.72

Asset Quality Ratios

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

Allowance for Credit Losses to Total Loans

0.87

0.98

0.97

0.96

Allowance for Credit Losses to Nonperforming Loans (3)

437.73

433.35

330.13

260.46

189.73

Delinquent and Nonaccrual Loans to Total Loans (4)

0.63

0.62

0.73

0.68

1.02

Nonperforming Loans to Total Loans (3)

0.20

0.30

0.37

0.51

Nonperforming Assets to Total Assets (5)

0.15

0.16

0.23

0.30

0.40

Capital Ratios (6)

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

Common Equity Tier 1 Capital (to Risk Weighted Assets)

14.50

13.64

12.77

12.54

12.60

Tier 1 Capital (to Risk Weighted Assets)

14.50

13.64

12.77

12.54

12.60

Total Capital (to Risk Weighted Assets)

15.51

14.61

13.90

13.64

13.69

Tier 1 Leverage (to Adjusted Total Assets)

10.28

10.19

9.37

9.26

9.24

(1)

Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.

(2)

Interim period ratios are calculated on an annualized basis.

(3)

Nonperforming loans consist of all nonaccrual loans and accruing loans that are 90 days or more past due.

(4)

Delinquent loans consist of accruing loans that are 30 days or more past due.

(5)

Nonperforming assets consist of nonperforming loans and other real estate owned.

(6)

Capital ratios are for Community Bank only.

Certain items previously reported may have been reclassified to conform with the current reporting period’s format.

AVERAGE BALANCES AND YIELDS

Three Months Ended

March 31, 2024

December 31, 2023

September 30, 2023

June 30, 2023

March 31, 2023

Average Balance

Interest and Dividends

Yield / Cost (1)

Average Balance

Interest and Dividends

Yield / Cost (1)

Average Balance

Interest and Dividends

Yield / Cost (1)

Average Balance

Interest and Dividends

Yield / Cost (1)

Average Balance

Interest and Dividends

Yield / Cost (1)

(Dollars in thousands) (Unaudited)

Assets:

Interest-Earning Assets:

Loans, Net (2)

1,087,889

14,877

5.50

1,098,284

14,840

5.36

1,088,691

14,081

5.13

1,079,399

13,450

5.00

1,040,570

12,391

4.83

Debt Securities

Taxable

235,800

2,303

3.91

206,702

1,164

2.25

204,848

940

1.84

209,292

950

1.82

213,158

964

1.81

Tax-Exempt

—

4,833

3.48

6,013

3.46

6,180

3.43

6,270

3.32

Equity Securities

2,693

4.01

2,693

4.75

2,693

3.71

2,693

3.71

2,693

3.56

Interest-Earning Deposits at Banks

58,887

733

4.98

67,450

808

4.79

52,466

750

5.72

53,582

721

5.38

73,221

805

4.40

Other Interest-Earning Assets

3,235

10.57

3,387

7.50

3,292

8.32

2,783

5.62

2,633

6.01

Total Interest-Earning Assets

1,388,504

18,025

5.22

1,383,349

16,950

4.86

1,358,003

15,917

4.65

1,353,929

15,238

4.51

1,338,545

14,275

4.33

Noninterest-Earning Assets

54,910

38,464

52,885

52,812

49,703

Total Assets

1,443,414

1,421,813

1,410,888

1,406,741

1,388,248

Liabilities and Stockholders' Equity:

Interest-Bearing Liabilities:

Interest-Bearing Demand Accounts

334,880

1,794

2.15

362,018

1,965

2.15

363,997

2,003

2.18

354,497

1,582

1.79

335,327

1,191

1.44

Money Market Accounts

203,867

1,514

2.99

205,060

1,441

2.79

187,012

1,141

2.42

194,565

1,033

2.13

213,443

939

1.78

Savings Accounts

191,444

0.12

200,737

0.11

212,909

0.10

225,175

0.09

242,298

0.06

Time Deposits

248,118

2,624

4.25

193,188

1,873

3.85

173,832

1,552

3.54

155,867

1,174

3.02

101,147

337

1.35

Total Interest-Bearing Deposits

978,309

5,991

2.46

961,003

5,336

2.20

937,750

4,750

2.01

930,104

3,842

1.66

892,215

2,504

1.14

Short-Term Borrowings

—

1,902

5.42

—

480

2.51

1,344

0.60

Other Borrowings

34,682

404

4.69

34,673

407

4.66

34,662

407

4.66

21,026

238

4.54

14,641

155

4.29

Total Interest-Bearing Liabilities

1,012,991

6,395

2.54

997,578

5,769

2.29

972,412

5,157

2.10

951,610

4,083

1.72

908,200

2,661

1.19

Noninterest-Bearing Demand Deposits

278,691

305,789

312,016

326,262

362,343

Total Funding and Cost of Funds

1,291,682

1.99

1,303,367

1.76

1,284,428

1.59

1,277,872

1.28

1,270,543

0.85

Other Liabilities

11,441

4,119

9,025

10,920

2,953

Total Liabilities

1,303,123

1,307,486

1,293,453

1,288,792

1,273,496

Stockholders' Equity

140,291

114,327

117,435

117,949

114,752

Total Liabilities and Stockholders' Equity

1,443,414

1,421,813

1,410,888

1,406,741

1,388,248

Net Interest Income (FTE)

(Non-GAAP) (3)

11,630

11,181

10,760

11,155

11,614

Net Interest-Earning Assets (4)

375,513

385,771

385,591

402,319

430,345

Net Interest Rate Spread (FTE)

(Non-GAAP) (3) (5)

2.68

2.57

2.55

2.79

3.14

Net Interest Margin (GAAP) (6)

3.36

3.19

3.13

3.29

3.51

Net Interest Margin (FTE)

(Non-GAAP) (3)(6)

3.37

3.21

3.14

3.30

3.52

(1)

Annualized based on three months ended results.

(2)

Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.

(3)

Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.

(4)

Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(5)

Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(6)

Net interest margin represents annualized net interest income divided by average total interest-earning assets.

Explanation of Use of Non-GAAP Financial Measures

In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Press Release contains or references, certain Non-GAAP financial measures. We believe these Non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these Non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar Non-GAAP measures which may be presented by other companies. 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 herein.

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

(Dollars in thousands, except share and per share data) (Unaudited)

Total Assets (GAAP)

1,472,047

1,456,091

1,399,492

1,432,733

1,430,708

Goodwill and Intangible Assets, Net

(10,349

)

(10,690

)

(11,909

)

(12,354

)

(12,800

)

Tangible Assets (Non-GAAP) (Numerator)

1,461,698

1,445,401

1,387,583

1,420,379

1,417,908

Stockholders' Equity (GAAP)

141,590

139,834

114,846

116,589

117,195

Goodwill and Intangible Assets, Net

(10,349

)

(10,690

)

(11,909

)

(12,354

)

(12,800

)

Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator)

131,241

129,144

102,937

104,235

104,395

Stockholders’ Equity to Assets (GAAP)

9.6

8.2

8.1

8.2

Tangible Common Equity to Tangible Assets (Non-GAAP)

9.0

8.9

7.4

7.3

7.4

Common Shares Outstanding (Denominator)

5,142,901

5,118,713

5,120,678

5,111,678

5,116,830

Book Value per Common Share (GAAP)

27.53

27.32

22.43

22.81

22.90

Tangible Book Value per Common Share (Non-GAAP)

25.52

25.23

20.10

20.39

20.40

Three Months Ended

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

(Dollars in thousands) (Unaudited)

Net Income (GAAP)

4,196

12,966

2,672

2,757

4,156

Amortization of Intangible Assets, Net

341

430

445

446

445

Adjusted Net Income (Non-GAAP) (Numerator)

4,537

13,396

3,117

3,203

4,601

Annualization Factor

4.02

3.97

4.01

4.06

Average Stockholders' Equity (GAAP)

140,291

114,327

117,435

117,949

114,752

Average Goodwill and Intangible Assets, Net

(10,553

)

(11,829

)

(12,185

)

(12,626

)

(13,080

)

Average Tangible Common Equity (Non-GAAP) (Denominator)

129,738

102,498

105,250

105,323

101,672

Return on Average Equity (GAAP)

12.03

44.99

9.03

9.38

14.69

Return on Average Tangible Common Equity (Non-GAAP)

14.07

51.85

11.75

12.20

18.35

Three Months Ended

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

(Dollars in thousands) (Unaudited)

Interest Income (GAAP)

17,986

16,905

15,874

15,203

14,244

Adjustment to FTE Basis

Interest Income (FTE) (Non-GAAP)

18,025

16,950

15,917

15,238

14,275

Interest Expense (GAAP)

6,395

5,769

5,157

4,083

2,661

Net Interest Income (FTE) (Non-GAAP)

11,630

11,181

10,760

11,155

11,614

Net Interest Rate Spread (GAAP)

2.67

2.56

2.54

2.78

3.13

Adjustment to FTE Basis

0.01

Net Interest Rate Spread (FTE) (Non-GAAP)

2.68

2.57

2.55

2.79

3.14

Net Interest Margin (GAAP)

3.36

3.19

3.13

3.29

3.51

Adjustment to FTE Basis

0.01

0.02

0.01

Net Interest Margin (FTE) (Non-GAAP)

3.37

3.21

3.14

3.30

3.52

Three Months Ended

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

(Dollars in thousands) (Unaudited)

Income Before Income Tax Expense (GAAP)

5,116

18,309

3,236

3,456

5,285

Net (Recovery) Provision for Credit Losses

(37

)

(1,420

)

406

432

Adjustments

Net Loss on Securities

166

9,830

100

232

Gain on Sale of Subsidiary

—

(24,578

)

—

Net Gain on Disposal of Premises and Equipment

(274

)

—

(11

)

Net Gain on Bank-Owned Life Insurance Claims

(915

)

—

)

(302

)

Adjusted PPNR (Non-GAAP) (Numerator)

4,056

2,141

3,679

3,987

5,284

Annualization Factor

4.02

3.97

4.01

4.06

Average Assets (Denominator)

1,443,414

1,421,813

1,410,888

1,406,741

1,388,248

Adjusted PPNR Return on Average Assets (Non-GAAP)

1.13

0.60

1.04

1.14

1.55

Three Months Ended

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

(Dollars in thousands, except share and per share data) (Unaudited)

Net Income (GAAP)

4,196

12,966

2,672

2,757

4,156

Adjustments

Net Loss on Securities

166

9,830

100

232

Gain on Sale of Subsidiary

—

(24,578

)

—

Net Gain on Disposal of Premises and Equipment

(274

)

—

(11

)

Net Gain on Bank-Owned Life Insurance Claims

(915

)

—

)

(302

)

Tax effect

4,843

)

(21

)

(46

)

Adjusted Net Income (Non-GAAP)

3,196

3,061

2,701

2,835

4,029

Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding

5,142,286

5,135,997

5,126,546

5,116,134

5,115,705

Earnings per Common Share - Diluted (GAAP)

0.82

2.52

0.52

0.54

0.81

Adjusted Earnings per Common Share - Diluted (Non-GAAP)

0.62

0.60

0.53

0.55

0.79

Net Income (GAAP) (Numerator)

4,196

12,966

2,672

2,757

4,156

Annualization Factor

4.02

3.97

4.01

4.06

Average Assets (Denominator)

1,443,414

1,421,813

1,410,888

1,406,741

1,388,248

Return on Average Assets (GAAP)

1.17

3.62

0.75

0.79

1.21

Adjusted Net Income (Non-GAAP) (Numerator)

3,196

3,061

2,701

2,835

4,029

Annualization Factor

4.02

3.97

4.01

4.06

Average Assets (Denominator)

1,443,414

1,421,813

1,410,888

1,406,741

1,388,248

Adjusted Return on Average Assets (Non-GAAP)

0.89

0.85

0.76

0.81

1.18

Three Months Ended

3/31/24

12/31/23

9/30/23

6/30/23

3/31/23

(Dollars in thousands) (Unaudited)

Net Income (GAAP) (Numerator)

4,196

12,966

2,672

2,757

4,156

Annualization Factor

4.02

3.97

4.01

4.06

Average Equity (GAAP) (Denominator)

140,291

114,327

117,435

117,949

114,752

Return on Average Equity (GAAP)

12.03

44.99

9.03

9.38

14.69

Adjusted Net Income (Non-GAAP) (Numerator)

3,196

3,061

2,701

2,835

4,029

Annualization Factor

4.02

3.97

4.01

4.06

Average Equity (GAAP) (Denominator)

140,291

114,327

117,435

117,949

114,752

Adjusted Return on Average Equity (Non-GAAP)

9.16

10.62

9.12

9.64

14.24

View source version on businesswire.com: https://www.businesswire.com/news/home/20240426529306/en/

John H. Montgomery President and Chief Executive Officer Phone: (724) 225-2400

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CBFV CB Financial Services Inc