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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 | |
---|---|---|---|---|---|---|---|---|---|---|
0.01 | 0.04% | 22.61 | 22.70 | 22.90 | 22.61 | 22.61 | 22.61 | 87 | 17:14:22 |
CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”) and Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of the Bank, today announced its fourth quarter and year-to-date 2021 financial results.
Three Months Ended
Year Ended
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
12/31/21
12/31/20
(Dollars in thousands, except per share data) (Unaudited)
Net Income (Loss) (GAAP)
$
6,965
$
1,983
$
(223
)
$
2,845
$
3,079
$
11,570
$
(10,640
)
Excluding Non-Recurring Items (Non-GAAP) (1)
(4,122
)
(17
)
3,440
(353
)
40
(1,053
)
19,343
Adjusted Net Income (Non-GAAP) (1)
$
2,843
$
1,966
$
3,217
$
2,492
$
3,119
$
10,517
$
8,703
Earnings (Loss) per Common Share - Diluted (GAAP)
$
1.31
$
0.37
$
(0.04
)
$
0.52
$
0.57
$
2.15
$
(1.97
)
Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1)
$
0.53
$
0.36
$
0.59
$
0.46
$
0.58
$
1.95
$
1.61
(1) Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of net income (loss) and adjusted earnings per common share - diluted in this Press Release.
2021 Fourth Quarter Financial Highlights
(Comparisons to three months ended December 31, 2020 unless otherwise noted)
(Amounts at December 31, 2021; comparisons to December 31, 2020, unless otherwise noted)
Branch Optimization and Operational Efficiency Update
As previously announced in February 2021, CB has implemented strategic initiatives to improve Community Bank’s financial performance and to position the Bank for continued profitable growth. Since that announcement, the Company has substantially completed this project, highlighted by:
Management Commentary
President and CEO John H. Montgomery stated, “The fourth quarter was highlighted by the sale of two branches, which resulted in a $5.2 million gain for the bank while completing the optimization initiative announced early in 2021. We undertook that initiative with the primary goals of reducing our expenses while also positioning the bank for growth and I am proud of our team for succeeding on both fronts. With the optimization effort now substantially complete, we intend to focus all our energy on continuing the growth we saw take hold during the second half of 2021. Despite the reduction of our deposit balances resulting from the sale of two branches, we were still able to grow our loan book 11.3% in the current quarter, which is a result we’re proud of. Our loan book experienced solid demand across nearly all our end markets, fueled by the continuing economic recovery in our geographic region.”
Mr. Montgomery continued, “As we enter 2022, we are well-positioned for a rising rate environment. We are squarely focused on capturing growth opportunities and are investing in our business in support of that. A key component of our optimization initiative was the reduction of low return uses of capital so that capital could be repurposed for higher growth investment. With that in mind, we expect to bring on a Chief Commercial Banking Officer and a Director of Client Experience and Retail Banking during the first quarter. Set against the backdrop of reduced annual expense levels and rising interest rates, our expectation is for continued growth and expansion of profitability. In addition, we remain committed to CB’s shareholders through the payment of dividends and an active share buy-back program.”
Dividend Information
The Company’s Board of Directors has declared a $0.24 quarterly cash dividend per outstanding share of common stock, payable on or about February 28, 2022, to stockholders of record as of the close of business on February 18, 2022.
Stock Repurchase Program
On June 10, 2021, CB authorized a program to repurchase up to $7.5 million of the Company’s outstanding common stock. The program was effective as of June 14, 2021 and is authorized through June 13, 2022. As of January 21, 2022, the Company had repurchased 191,314 shares at an average price of $23.34 per share for a total of $4.5 million.
2021 Fourth Quarter Financial Review
Net Interest and Dividend Income
Provision for Loan Losses
There was a $75,000 provision for loan losses for the three months ended December 31, 2021 compared to no provision for loan losses for the three months ended December 31, 2020. The provision was primarily due to loan growth in the current period, exclusive of PPP loan forgiveness, offset by adjustments in the qualitative factors driven by improving economic and industry conditions.
Noninterest income
Noninterest income increased $5.9 million, or 212.8%, to $8.7 million for the three months ended December 31, 2021, compared to $2.8 million for the three months ended December 31, 2020. The increase was largely due to a gain of $5.2 million from the sale of two branches during the quarter. In addition, net gain on sale of loans increased $589,000 to $977,000 for the three months ended December 31, 2021 compared to $388,000 for the three months ended December 31, 2020 primarily due to the sale of a nonperforming commercial real estate loan in the hotel portfolio that resulted in the recognition of an $897,000 gain. The loan previously incurred a $931,000 charge-off in the fourth quarter of 2020.
Noninterest Expense
Noninterest expense increased $247,000, or 2.5%, to $10.0 million for the three months ended December 31, 2021 compared to $9.7 million for the three months ended December 31, 2020. Contracted services increased $556,000 to $1.1 million for the three months ended December 31, 2021 compared to $577,000 for the three months ended December 31, 2020 primarily due to $859,000 in expenses associated with the engagement of a third-party workflow optimization expert to assist in implementing robotic process automations and more effective sales management designed to improve operational efficiencies in the near and long-term and engagement of other third party specialists to assist in core platform improvements and efficiencies.
Statement of Financial Condition Review
Assets
Total assets increased $8.8 million, or 0.6%, to $1.43 billion at December 31, 2021, compared to $1.42 billion at December 31, 2020.
Payroll Protection Program (“PPP”) Update
Loans and Credit Quality
Liabilities
Total liabilities increased $10.2 million, or 0.8%, to $1.29 billion at December 31, 2021 compared to $1.28 billion at December 31, 2020.
Deposits
Borrowed Funds
Stockholders’ Equity
Stockholders’ equity decreased $1.4 million, or 1.0%, to $133.1 million at December 31, 2021, compared to $134.5 million at December 31, 2020. The Company paid $5.2 million in dividends and repurchased $4.1 million of its common stock as part of its stock repurchase program. In addition, accumulated other comprehensive income decreased $4.3 million primarily due to the effect of market interest rate conditions on the Bank’s debt securities. This was partially offset by $11.6 million of net income.
Book value per share
Book value per common share was $25.31 at December 31, 2021 compared to $24.76 at December 31, 2020, an increase of $0.55. Book value per share increased $0.74 compared to $24.57 at September 30, 2021.
Tangible book value per common share (Non-GAAP) was $22.45 at December 31, 2021, compared to $21.42 at December 31, 2020, an increase of $1.03. Tangible book value per share increased $0.78 compared to $21.67 at September 30, 2021. 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 and provides commercial and personal insurance brokerage services through Exchange Underwriters, Inc., its wholly owned subsidiary.
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, the scope and duration of economic contraction as a result of the COVID-19 pandemic and its effects on the Company’s business and that of the Company’s customers, 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
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
ASSETS
Cash and Due From Banks
$
119,674
$
173,523
$
172,010
$
230,000
$
160,911
Securities
224,974
221,351
208,472
142,156
145,400
Loans Held for Sale
—
17,407
11,409
—
—
Loans
Real Estate:
Residential
320,798
317,373
322,480
339,596
344,142
Commercial
392,124
379,621
360,518
370,118
373,555
Construction
85,028
78,075
85,187
77,714
72,600
Commercial and Industrial
Commercial and Industrial
64,487
69,657
70,666
68,551
71,717
PPP
24,523
32,703
49,525
60,380
55,096
Consumer
122,152
112,087
106,404
111,650
113,854
Other
11,684
12,083
12,666
13,688
13,789
Total Loans
1,020,796
1,001,599
1,007,446
1,041,697
1,044,753
Allowance for Loan Losses
(11,582
)
(11,581
)
(11,544
)
(12,725
)
(12,771
)
Loans, Net
1,009,214
990,018
995,902
1,028,972
1,031,982
Premises and Equipment Held for Sale
—
795
795
—
—
Premises and Equipment, Net
18,399
18,502
18,682
20,240
20,302
Bank-Owned Life Insurance
25,332
25,190
25,052
24,916
24,779
Goodwill
9,732
9,732
9,732
9,732
9,732
Intangible Assets, Net
5,295
5,740
6,186
7,867
8,399
Accrued Interest and Other Assets
12,859
12,560
13,373
12,938
15,215
Total Assets
$
1,425,479
$
1,474,818
$
1,461,613
$
1,476,821
$
1,416,720
LIABILITIES
Deposits Held for Sale
$
—
$
102,647
$
102,557
$
—
$
—
Deposits
Non-Interest Bearing Demand Deposits
385,775
373,320
368,452
377,137
340,569
Interest Bearing Demand Accounts
272,518
244,004
246,920
280,929
259,870
Money Market Accounts
192,125
190,426
176,824
198,975
199,029
Savings Accounts
239,482
232,679
226,639
246,725
235,088
Time Deposits
136,713
144,727
154,718
180,697
190,013
Total Deposits
1,226,613
1,185,156
1,173,553
1,284,463
1,224,569
Short-Term Borrowings
39,266
42,623
39,054
45,352
41,055
Other Borrowings
17,601
6,000
6,000
6,000
8,000
Accrued Interest and Other Liabilities
8,875
7,405
7,913
7,230
8,566
Total Liabilities
1,292,355
1,343,831
1,329,077
1,343,045
1,282,190
STOCKHOLDERS’ EQUITY
$
133,124
$
130,987
$
132,536
$
133,776
$
134,530
Three Months Ended
Year Ended
Selected Operating Data
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
12/31/21
12/31/20
Interest and Dividend Income
Loans, Including Fees
$
9,904
$
9,718
$
9,936
$
10,146
$
10,833
$
39,704
$
42,883
Securities:
Taxable
866
843
635
646
725
2,990
3,619
Tax-Exempt
66
71
74
78
78
289
369
Dividends
21
19
24
20
20
84
79
Other Interest and Dividend Income
106
135
151
98
99
490
517
Total Interest and Dividend Income
10,963
10,786
10,820
10,988
11,755
43,557
47,467
Interest Expense
Deposits
636
715
827
947
1,036
3,125
5,172
Short-Term Borrowings
26
25
24
23
25
98
137
Other Borrowings
70
36
35
41
60
182
254
Total Interest Expense
732
776
886
1,011
1,121
3,405
5,563
Net Interest and Dividend Income
10,231
10,010
9,934
9,977
10,634
40,152
41,904
Provision (Recovery) for Loan Losses
75
—
(1,200
)
—
—
(1,125
)
4,000
Net Interest and Dividend Income After Provision (Recovery) for Loan Losses
10,156
10,010
11,134
9,977
10,634
41,277
37,904
Noninterest Income:
Service Fees
569
602
614
546
560
2,331
2,206
Insurance Commissions
1,618
1,194
1,209
1,595
1,403
5,616
4,878
Other Commissions
90
93
173
165
105
521
479
Net Gain on Sales of Loans
977
49
31
86
388
1,143
1,391
Net Gain on Securities
44
24
11
447
213
526
233
Net Gain on Purchased Tax Credits
17
18
17
18
16
70
62
Gain on Sale of Branches
5,203
—
—
—
—
5,203
—
Net Loss on Disposal of Fixed Assets
—
—
(3
)
—
(13
)
(3
)
(61
)
Income from Bank-Owned Life Insurance
142
138
136
137
140
553
557
Other Income (Loss)
29
80
31
180
(34
)
320
(274
)
Total Noninterest Income
8,689
2,198
2,219
3,174
2,778
16,280
9,471
Noninterest Expense:
Salaries and Employee Benefits
5,181
4,787
5,076
4,894
5,126
19,938
19,809
Occupancy
619
615
1,024
710
606
2,968
2,797
Equipment
252
205
311
266
234
1,034
935
Data Processing
488
541
607
518
476
2,154
1,843
FDIC Assessment
222
293
249
250
344
1,014
837
PA Shares Tax
173
224
225
265
350
887
1,313
Contracted Services
1,133
1,441
750
687
577
4,011
2,048
Legal and Professional Fees
206
180
419
189
185
994
752
Advertising
191
225
193
140
178
749
664
Other Real Estate Owned (Income)
(30
)
(89
)
(26
)
(38
)
(39
)
(183
)
(69
)
Amortization of Intangible Assets
445
446
503
532
532
1,926
2,128
Intangible Assets and Goodwill Impairment
—
—
1,178
—
—
1,178
18,693
Writedown of Fixed Assets
23
2
2,268
—
240
2,293
1,124
Other
1,069
903
945
982
916
3,899
3,893
Total Noninterest Expense
9,972
9,773
13,722
9,395
9,725
42,862
56,767
Income (Loss) Before Income Tax Expense (Benefit)
8,873
2,435
(369
)
3,756
3,687
14,695
(9,392
)
Income Tax Expense (Benefit)
1,908
452
(146
)
911
608
3,125
1,248
Net Income (Loss)
$
6,965
$
1,983
$
(223
)
$
2,845
$
3,079
$
11,570
$
(10,640
)
Three Months Ended
Year Ended
Per Common Share Data
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
12/31/21
12/31/20
Dividends Per Common Share
$
0.24
$
0.24
$
0.24
$
0.24
$
0.24
$
0.96
$
0.96
Earnings (Loss) Per Common Share - Basic
1.32
0.37
(0.04
)
0.52
0.57
2.15
(1.97
)
Earnings (Loss) Per Common Share - Diluted
1.31
0.37
(0.04
)
0.52
0.57
2.15
(1.97
)
Adjusted Earnings Per Common Share - Diluted (Non-GAAP) (1)
0.53
0.36
0.59
0.46
0.58
1.95
1.61
Weighted Average Common Shares Outstanding - Basic
5,291,795
5,373,032
5,432,234
5,434,374
5,404,874
5,382,441
5,406,290
Weighted Average Common Shares Outstanding - Diluted
5,314,537
5,390,128
5,432,234
5,436,881
5,406,068
5,392,729
5,406,290
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
Common Shares Outstanding
5,260,672
5,330,401
5,409,077
5,434,374
5,434,374
Book Value Per Common Share
$
25.31
$
24.57
$
24.50
$
24.62
$
24.76
Tangible Book Value per Common Share (1)
22.45
21.67
21.56
21.38
21.42
Stockholders’ Equity to Assets
9.3
%
8.9
%
9.1
%
9.1
%
9.5
%
Tangible Common Equity to Tangible Assets (1)
8.4
7.9
8.1
8.0
8.3
Three Months Ended
Year Ended
Selected Financial Ratios (2)
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
12/31/21
12/31/20
Return on Average Assets
1.87
%
0.54
%
(0.06
) %
0.81
%
0.87
%
0.79
%
(0.77
) %
Adjusted Return on Average Assets (1)
0.76
0.53
0.87
0.71
0.88
0.72
0.63
Return on Average Equity
20.95
5.93
(0.66
)
8.54
9.13
8.66
(7.18
)
Adjusted Return on Average Equity (1)
8.55
5.88
9.57
7.48
9.25
7.87
5.88
Average Interest-Earning Assets to Average Interest-Bearing Liabilities
145.09
146.78
146.82
142.98
141.58
145.44
139.89
Average Equity to Average Assets
8.93
9.03
9.08
9.48
9.49
9.12
10.75
Net Interest Rate Spread
2.85
2.77
2.72
2.91
3.07
2.81
3.13
Net Interest Rate Spread (FTE) (1)
2.86
2.78
2.74
2.92
3.08
2.82
3.15
Net Interest Margin
2.95
2.88
2.84
3.04
3.21
2.92
3.30
Net Interest Margin (FTE) (1)
2.96
2.89
2.85
3.05
3.22
2.94
3.32
Net Charge-offs (Recoveries) to Average Loans
0.03
(0.01
)
(0.01
)
0.02
0.39
0.01
0.11
Efficiency Ratio
52.71
80.05
112.91
71.44
72.51
75.95
110.50
Adjusted Efficiency Ratio (1)
69.73
77.27
80.68
70.06
68.06
74.25
68.14
Asset Quality Ratios
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
Allowance for Loan Losses to Total Loans
1.13
%
1.16
%
1.15
%
1.22
%
1.22
%
Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP) (1)
1.16
1.20
1.21
1.30
1.29
Allowance for Loan Losses to Nonperforming Loans (3)
159.40
106.18
74.92
89.29
88.15
Allowance for Loan Losses to Noncurrent Loans (4)
233.37
135.37
90.83
118.08
117.20
Delinquent and Nonaccrual Loans to Total Loans (4) (5)
0.78
0.97
1.37
1.18
1.50
Nonperforming Loans to Total Loans (3)
0.71
1.09
1.53
1.37
1.39
Noncurrent Loans to Total Loans (4)
0.49
0.85
1.26
1.03
1.04
Nonperforming Assets to Total Assets (6)
0.51
0.74
1.07
0.98
1.04
Capital Ratios (7)
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
Common Equity Tier 1 Capital (to Risk Weighted Assets)
11.95 %
11.53 %
11.67 %
11.85 %
11.79 %
Tier 1 Capital (to Risk Weighted Assets)
11.95
11.53
11.67
11.85
11.79
Total Capital (to Risk Weighted Assets)
13.18
12.77
12.92
13.10
13.04
Tier 1 Leverage (to Adjusted Total Assets)
7.76
7.38
7.23
7.87
7.81
(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 nonaccrual loans, accruing loans that are 90 days or more past due, and troubled debt restructured loans.
(4)Noncurrent loans consist of nonaccrual loans and accruing loans that are 90 days or more past due.
(5)Delinquent loans consist of accruing loans that are 30 days or more past due.
(6)Nonperforming assets consist of nonperforming loans and other real estate owned.
(7)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
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
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)
$
1,004,827
$
9,927
3.92
%
$
1,004,474
$
9,740
3.85
%
$
1,016,868
$
9,959
3.93
%
$
1,031,853
$
10,168
4.00
%
$
1,032,942
$
10,860
4.18
%
Debt Securities
Taxable
205,328
866
1.69
197,763
843
1.71
124,685
635
2.04
122,883
646
2.10
133,026
725
2.18
Exempt From Federal Tax
10,477
84
3.21
11,647
90
3.09
12,276
94
3.06
12,943
96
2.97
13,006
96
2.95
Equity Securities
2,693
21
3.12
2,655
19
2.86
2,649
24
3.62
2,632
20
3.04
2,612
20
3.06
Other Interest-Earning Assets
153,577
106
0.27
164,447
135
0.33
246,392
151
0.25
161,871
98
0.25
137,000
99
0.29
Total Interest-Earning Assets
1,376,902
11,004
3.17
1,380,986
10,827
3.11
1,402,870
10,863
3.11
1,332,182
11,028
3.36
1,318,586
11,800
3.56
Noninterest-Earning Assets
100,607
88,291
82,794
92,550
94,262
Total Assets
$
1,477,509
$
1,469,277
$
1,485,664
$
1,424,732
$
1,412,848
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits (3)
$
278,546
51
0.07
%
$
275,411
48
0.07
%
$
275,752
55
0.08
$
259,065
77
0.12
$
252,521
83
0.13
%
Savings (3)
252,387
20
0.03
251,801
21
0.03
247,238
25
0.04
239,850
32
0.05
232,647
32
0.05
Money Market (3)
209,572
57
0.11
198,167
55
0.11
199,652
71
0.14
197,395
98
0.20
198,983
131
0.26
Time Deposits (3)
154,342
508
1.31
168,654
591
1.39
177,506
676
1.53
187,114
740
1.60
193,194
790
1.63
Total Interest-Bearing Deposits (3)
894,847
636
0.28
894,033
715
0.32
900,148
827
0.37
883,424
947
0.43
877,345
1,036
0.47
Short-Term Borrowings
Securities Sold Under Agreements to Repurchase
44,709
26
0.23
40,818
25
0.24
49,325
24
0.20
41,094
23
0.23
43,468
25
0.23
Other Borrowings
9,474
70
2.93
6,000
36
2.38
6,000
35
2.34
7,200
41
2.31
10,543
60
2.26
Total Interest-Bearing Liabilities
949,030
732
0.31
940,851
776
0.33
955,473
886
0.37
931,718
1,011
0.44
931,356
1,121
0.48
Noninterest-Bearing Demand Deposits
388,787
387,746
387,317
349,108
338,223
Other Liabilities
7,800
8,019
7,999
8,869
9,176
Total Liabilities
1,345,617
1,336,616
1,350,789
1,289,695
1,278,755
Stockholders' Equity
131,892
132,661
134,875
135,037
134,093
Total Liabilities and Stockholders' Equity
$
1,477,509
$
1,469,277
$
1,485,664
$
1,424,732
$
1,412,848
Net Interest Income (FTE)
(Non-GAAP) (4)
10,272
10,051
9,977
10,017
10,679
Net Interest-Earning Assets (5)
427,872
440,135
447,397
400,464
387,230
Net Interest Rate Spread (FTE)
(Non-GAAP) (4) (6)
2.86
%
2.78
%
2.74
2.92
3.08
%
Net Interest Margin (FTE)
(Non-GAAP) (4)(7)
2.96
2.89
2.85
3.05
3.22
PPP Loans
29,067
391
5.34
40,313
484
4.76
57,661
636
4.42
56,945
676
4.81
64,914
768
4.71
(1)
Annualized based on three months ended results.
(2)Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale.
(3)Includes Deposits Held for Sale that were sold in December 2021.
(4)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.
(5)Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6)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.
(7)Net interest margin represents annualized net interest income divided by average total interest-earning assets.
AVERAGE BALANCES AND YIELDS
Year Ended
December 31, 2021
December 31, 2020
Average Balance
Interest and Dividends
Yield / Cost
Average Balance
Interest and Dividends
Yield / Cost
(Dollars in thousands) (Unaudited)
Assets:
Interest-Earning Assets:
Loans, Net (1)
$
1,014,405
$
39,799
3.92
%
$
1,008,401
$
43,013
4.27
%
Debt Securities
Taxable
162,987
2,990
1.83
138,015
3,619
2.62
Exempt From Federal Tax
11,829
366
3.09
14,244
450
3.16
Marketable Equity Securities
2,657
84
3.16
2,585
79
3.06
Other Interest-Earning Assets
181,502
490
0.27
105,588
517
0.49
Total Interest-Earning Assets
1,373,380
43,729
3.18
1,268,833
47,678
3.76
Noninterest-Earning Assets
91,075
109,241
Total Assets
$
1,464,455
$
1,378,074
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits (2)
$
272,256
232
0.09
%
$
240,372
590
0.25
%
Savings (2)
247,864
98
0.04
227,277
188
0.08
Money Market (2)
201,222
281
0.14
187,095
708
0.38
Time Deposits (2)
171,805
2,514
1.46
203,128
3,686
1.81
Total Interest-Bearing Deposits (2)
893,147
3,125
0.35
857,872
5,172
0.60
Short-Term Borrowings
Securities Sold Under Agreements to Repurchase
43,988
98
0.22
37,819
137
0.36
Other Borrowings
7,172
182
2.54
11,328
254
2.24
Total Interest-Bearing Liabilities
944,307
3,405
0.36
907,019
5,563
0.61
Noninterest-Bearing Demand Deposits
378,374
313,858
Other Liabilities
8,168
9,065
Total Liabilities
1,330,849
1,229,942
Stockholders' Equity
133,605
148,132
Total Liabilities and Stockholders' Equity
$
1,464,454
$
1,378,074
Net Interest Income (FTE) (Non-GAAP) (3)
40,324
42,115
Net Interest-Earning Assets (3)(4)
429,073
361,814
Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5)
2.82
%
3.15
%
Net Interest Margin (FTE) (Non-GAAP) (3)(6)
2.94
3.32
PPP Loans
45,905
2,189
4.77
45,694
1,537
3.36
(1)
Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale.
(2)Includes Deposits Held for Sale that were sold in December 2021.
(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 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 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.
Three Months Ended
Year Ended
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
12/31/21
12/31/20
(Dollars in thousands, except share and per share data) (Unaudited)
Net Income (Loss) (GAAP)
$
6,965
$
1,983
$
(223
)
$
2,845
$
3,079
$
11,570
$
(10,640
)
Adjustments
Gain on Securities
(44
)
(24
)
(11
)
(447
)
(213
)
(526
)
(233
)
Gain on Sale of Branches
(5,203
)
—
—
—
—
(5,203
)
—
Loss on Disposal of Fixed Assets
—
—
3
—
13
3
61
Tax effect
1,102
5
2
94
42
1,202
36
Non-Cash Charges:
Intangible Assets and Goodwill Impairment
—
—
1,178
—
—
1,178
18,693
Writedown on Fixed Assets
23
2
2,268
—
240
2,293
1,124
Tax Effect
—
—
—
—
(42
)
—
(338
)
Adjusted Net Income (Non-GAAP)
$
2,843
$
1,966
$
3,217
$
2,492
$
3,119
$
10,517
$
8,703
Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding
5,314,537
5,390,128
5,432,234
5,436,881
5,406,068
5,392,729
5,406,290
Earnings (Loss) per Common Share - Diluted (GAAP)
$
1.31
$
0.37
$
(0.04
)
$
0.52
$
0.57
$
2.15
$
(1.97
)
Adjusted Earnings per Common Share - Diluted (Non-GAAP)
$
0.53
$
0.36
$
0.59
$
0.46
$
0.58
$
1.95
$
1.61
Net Income (Loss) (GAAP) (Numerator)
$
6,965
$
1,983
$
(223
)
$
2,845
$
3,079
$
11,570
$
(10,640
)
Annualization Factor
3.97
3.97
4.01
4.06
3.98
1.00
1.00
Average Assets (Denominator)
1,477,509
1,469,277
1,485,664
1,424,732
1,412,848
1,464,455
1,378,074
Return on Average Assets (GAAP)
1.87
%
0.54
%
(0.06
) %
0.81
%
0.87
%
0.79
%
(0.77
) %
Adjusted Net Income (Non-GAAP) (Numerator)
$
2,843
$
1,966
$
3,217
$
2,492
$
3,119
$
10,517
$
8,703
Annualization Factor
3.97
3.97
4.01
4.06
3.98
1.00
1.00
Average Assets (Denominator)
1,477,509
1,469,277
1,485,664
1,424,732
1,412,848
1,464,455
1,378,074
Adjusted Return on Average Assets (Non-GAAP)
0.76
%
0.53
%
0.87
%
0.71
%
0.88
%
0.72
%
0.63
%
Three Months Ended
Year Ended
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
12/31/21
12/31/20
(Dollars in thousands) (Unaudited)
Net Income (Loss) (GAAP) (Numerator)
$
6,965
$
1,983
$
(223
)
$
2,845
$
3,079
$
11,570
$
(10,640
)
Annualization Factor
3.97
3.97
4.01
4.06
3.98
1.00
1.00
Average Equity (Denominator) (GAAP)
131,892
132,661
134,875
135,037
134,093
133,605
148,132
Return on Average Equity (GAAP)
20.95
%
5.93
%
(0.66
) %
8.54
%
9.13
%
8.66
%
(7.18
) %
Adjusted Net Income (Non-GAAP) (Numerator)
$
2,843
$
1,966
$
3,217
$
2,492
$
3,119
$
10,517
$
8,703
Annualization Factor
3.97
3.97
4.01
4.06
3.98
1.00
1.00
Average Equity (Denominator) (GAAP)
131,892
132,661
134,875
135,037
134,093
133,605
148,132
Adjusted Return on Average Equity (Non-GAAP)
8.55
%
5.88
%
9.57
%
7.48
%
9.25
%
7.87
%
5.88
%
Tangible book value per common share is a non-GAAP measure and is calculated based on tangible common equity divided by period-end common shares outstanding. Tangible common equity to tangible assets is a non-GAAP measure and is calculated based on tangible common equity divided by tangible assets. We believe these non-GAAP measures serve as useful tools to help evaluate the strength and discipline of the Company's capital management strategies and as an additional, conservative measure of the Company’s total value.
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
(Dollars in thousands, except share and per share data) (Unaudited)
Assets (GAAP)
$
1,425,479
$
1,474,818
$
1,461,613
$
1,476,821
$
1,416,720
Goodwill and Intangible Assets, Net
(15,027
)
(15,472
)
(15,918
)
(17,599
)
(18,131
)
Tangible Assets (Non-GAAP) (Numerator)
$
1,410,452
$
1,459,346
$
1,445,695
$
1,459,222
$
1,398,589
Stockholders' Equity (GAAP)
$
133,124
$
130,987
$
132,536
$
133,776
$
134,530
Goodwill and Intangible Assets, Net
(15,027
)
(15,472
)
(15,918
)
(17,599
)
(18,131
)
Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator)
$
118,097
$
115,515
$
116,618
$
116,177
$
116,399
Stockholders’ Equity to Assets (GAAP)
9.3
%
8.9
%
9.1
%
9.1
%
9.5
%
Tangible Common Equity to Tangible Assets (Non-GAAP)
8.4
%
7.9
%
8.1
%
8.0
%
8.3
%
Common Shares Outstanding (Denominator)
5,260,672
5,330,401
5,409,077
5,434,374
5,434,374
Book Value per Common Share (GAAP)
$
25.31
$
24.57
$
24.50
$
24.62
$
24.76
Tangible Book Value per Common Share (Non-GAAP)
$
22.45
$
21.67
$
21.56
$
21.38
$
21.42
Interest income on interest-earning assets, net interest rate spread and net interest margin are presented on a fully tax-equivalent (“FTE”) basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and securities using the federal statutory income tax rate of 21 percent. We believe the presentation of net interest income on a FTE basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice. The following table reconciles net interest income, net interest spread and net interest margin on a FTE basis for the periods indicated:
Three Months Ended
Year Ended
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
12/31/21
12/31/20
(Dollars in thousands) (Unaudited)
Interest Income (GAAP)
$
10,963
$
10,786
$
10,820
$
10,988
$
11,755
$
43,557
$
47,467
Adjustment to FTE Basis
41
41
43
40
45
172
211
Interest Income (FTE) (Non-GAAP)
11,004
10,827
10,863
11,028
11,800
43,729
47,678
Interest Expense (GAAP)
732
776
886
1,011
1,121
3,405
5,563
Net Interest Income (FTE) (Non-GAAP)
$
10,272
$
10,051
$
9,977
$
10,017
$
10,679
$
40,324
$
42,115
Net Interest Rate Spread (GAAP)
2.85
%
2.77
%
2.72
%
2.91
%
3.07
%
2.81
%
3.13
%
Adjustment to FTE Basis
0.01
0.01
0.02
0.01
0.01
0.01
0.02
Net Interest Rate Spread (FTE) (Non-GAAP)
2.86
2.78
2.74
2.92
3.08
2.82
3.15
Net Interest Margin (GAAP)
2.95
%
2.88
%
2.84
%
3.04
%
3.21
%
2.92
%
3.30
%
Adjustment to FTE Basis
0.01
0.01
0.01
0.01
0.01
0.02
0.02
Net Interest Margin (FTE) (Non-GAAP)
2.96
2.89
2.85
3.05
3.22
2.94
3.32
Adjusted efficiency ratio excludes the effect of certain non-recurring or non-cash items and represents adjusted noninterest expense divided by adjusted operating revenue. The Company evaluates its operational efficiency based on its adjusted efficiency ratio and believes it provides additional perspective on its ongoing performance as well as peer comparability.
Three Months Ended
Year Ended
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
12/31/21
12/31/20
(Dollars in thousands) (Unaudited)
Noninterest Expense (GAAP)
$
9,972
$
9,773
$
13,722
$
9,395
$
9,725
$
42,862
$
56,767
Net Interest and Dividend Income (GAAP)
10,231
10,010
9,934
9,977
10,634
40,152
41,904
Noninterest Income (GAAP)
8,689
2,198
2,219
3,174
2,778
16,280
9,471
Operating Revenue (GAAP)
18,920
12,208
12,153
13,151
13,412
56,432
51,375
Efficiency Ratio (GAAP)
52.71
%
80.05
%
112.91
%
71.44
%
72.51
%
75.95
%
110.50
%
Noninterest Expense (GAAP)
$
9,972
$
9,773
$
13,722
$
9,395
$
9,725
$
42,862
$
56,767
Less:
Other Real Estate Owned (Income)
(30
)
(89
)
(26
)
(38
)
(39
)
(183
)
(69
)
Amortization of Intangible Assets
445
446
503
532
532
1,926
2,128
Intangible Assets and Goodwill Impairment
—
—
1,178
—
—
1,178
18,693
Writedown on Fixed Assets
23
2
2,268
—
240
2,293
1,124
Adjusted Noninterest Expense (Non-GAAP)
$
9,534
$
9,414
$
9,799
$
8,901
$
8,992
$
37,648
$
34,891
Net Interest and Dividend Income (GAAP)
10,231
10,010
9,934
9,977
10,634
40,152
41,904
Noninterest Income (GAAP)
8,689
2,198
2,219
3,174
2,778
16,280
9,471
Less:
Net Gain on Securities
44
24
11
447
213
526
233
Gain on Sale of Branches
5,203
—
—
—
—
5,203
—
Net Loss on Disposal of Fixed Assets
—
—
(3
)
—
(13
)
(3
)
(61
)
Adjusted Noninterest Income (Non-GAAP)
3,442
2,174
2,211
2,727
2,578
10,554
9,299
Adjusted Operating Revenue (Non-GAAP)
13,673
12,184
12,145
12,704
13,212
50,706
51,203
Adjusted Efficiency Ratio (Non-GAAP)
69.73
%
77.27
%
80.68
%
70.06
%
68.06
%
74.25
%
68.14
%
Allowance for loan losses to total loans, excluding PPP loans, is a non-GAAP measure that serves as a useful measurement to evaluate the allowance for loan losses without the impact of SBA guaranteed loans.
12/31/21
9/30/21
6/30/21
3/31/21
12/31/20
(Dollars in thousands) (Unaudited)
Allowance for Loan Losses
$
11,582
$
11,581
$
11,544
$
12,725
$
12,771
Total Loans
1,020,796
$
1,001,599
1,007,446
$
1,041,697
$
1,044,753
PPP Loans
(24,523
)
(32,703
)
(49,525
)
(60,380
)
(55,096
)
Total Loans, Excluding PPP Loans (Non-GAAP)
$
996,273
$
968,896
$
957,921
$
981,317
$
989,657
Allowance for Loan Losses to Total Loans, Excluding
PPP Loans (Non-GAAP)
1.16
%
1.20
%
1.21
%
1.30
%
1.29
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20220128005480/en/
Company Contact: John H. Montgomery President and Chief Executive Officer Phone: (724) 225-2400 Investor Relations: Jeremy Hellman, Vice President The Equity Group Inc. Phone: (212) 836-9626 Email: jhellman@equityny.com
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