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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 | 22.60 | 22.89 | 22.61 | 22.61 | 22.61 | 10 | 15:00:03 |
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 2022 financial results.
Three Months Ended
Year Ended
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
12/31/22
12/31/21
(Dollars in thousands, except per share data) (Unaudited)
Net Income (GAAP)
$
4,152
$
3,929
$
118
$
3,047
$
6,965
$
11,247
$
11,570
Non-Recurring Items
(66
)
(310
)
157
12
(4,122
)
(208
)
(1,053
)
Adjusted Net Income (Non-GAAP) (1)
$
4,086
$
3,619
$
275
$
3,059
$
2,843
$
11,039
$
10,517
Earnings per Common Share - Diluted (GAAP)
$
0.81
$
0.77
$
0.02
$
0.58
$
1.31
$
2.18
$
2.15
Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1)
$
0.80
$
0.71
$
0.05
$
0.59
$
0.53
$
2.14
$
1.95
(1) Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted in this Press Release.
2022 Fourth Quarter Financial Highlights
(Comparisons to three months ended December 31, 2021 unless otherwise noted)
(Amounts at December 31, 2022; comparisons to December 31, 2021, unless otherwise noted)
Management Commentary
President and CEO John H. Montgomery stated, “In closing out what was a successful 2022, our fourth quarter results continued to benefit from margin expansion on top of consistent loan growth. Two years ago we undertook a long term strategy that consisted of first driving down our expenses in a durable manner by rationalizing our physical branch footprint while also working to make sure our operations were optimized and efficient. This effort set the stage for the reduced the non-interest expenses we enjoyed throughout 2022. With our branch optimization largely completed, in 2022 we turned our attention to driving growth through smart additions of key leadership on both the retail and commercial sides of our business. Those investments helped drive growth in our loan portfolio through 2022 which coupled with rising interest rates to yield growth in our net interest income.”
Mr. Montgomery continued, “We remain watchful with respect to the overall economic climate as the Federal Reserve continues to work to rein in inflation while not tipping the country into a recession. As I have noted in the past, our credit team possesses a wealth of experience, including demonstrated success during the Great Financial Crisis just over a dozen years ago. With that experience, we are confident in our ability to navigate whatever macroeconomic headwinds we face.”
Mr. Montgomery concluded, “Continuing our commitment to CB shareholders, we increased our regular quarterly dividend to $0.25 per share. In addition, we repurchased 4,620 shares during the fourth quarter under the current $10.0 million share repurchase program announced earlier in 2022. We remain well-capitalized with the ability to support growth along with these shareholder-friendly actions.”
Dividend Information
The Company’s Board of Directors has approved a 4.2% increase in the regular quarterly cash dividend by declaring a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about February 28, 2023, to stockholders of record as of the close of business on February 15, 2023.
Stock Repurchase Program
On April 21, 2022, CB announced a program to repurchase up to $10.0 million of the Company’s outstanding shares of common stock. Based on the Company’s closing stock price at January 23, 2023, the repurchase program, if fully completed, would encompass 430,906 shares, or approximately 8.4% of the shares currently outstanding.
2022 Fourth Quarter Financial Review
Net Interest and Dividend Income
Net interest and dividend income increased $1.6 million, or 16.0%, to $11.9 million for the three months ended December 31, 2022 compared to $10.2 million for the three months ended December 31, 2021.
Provision for Loan Losses
There was no provision for loan losses for the three months ended December 31, 2022 or for the three months ended December 31, 2021.
Noninterest income
Noninterest income decreased $6.3 million, or 72.8%, to $2.4 million for the three months ended December 31, 2022, compared to $8.7 million for the three months ended December 31, 2021. The decrease was primarily related to non-recurring prior period recognition of $5.2 million gain on sale of branches as a result of branch optimization initiatives and $897,000 due to the sale of a nonperforming commercial real estate loan in the hotel portfolio. During the quarter, there was a $219,000 decrease in insurance commissions. The decrease in insurance commissions was primarily driven by contingency income which resulted from the timing of lock-in amounts received and core business including commercial and personal insurance lines.
Noninterest Expense
Noninterest expense decreased $974,000, or 9.8%, to $9.0 million for the three months ended December 31, 2022 compared to $10.0 million for the three months ended December 31, 2021. Salaries and benefits decreased $556,000 to $4.6 million and contracted services decreased $728,000 to $405,000 for the three months ended December 31, 2022 compared to $1.1 million for the three months ended December 31, 2021. This was a result of branch optimization initiatives completed in the prior year. These decreases were partially offset by an increase in occupancy expenses of $198,000.
Statement of Financial Condition Review
Assets
Total assets decreased $16.5 million, or 1.16%, to $1.41 billion at both December 31, 2022, and December 31, 2021.
Payroll Protection Program Update
Loans and Credit Quality
Other
Liabilities
Total liabilities increased $6.4 million, or 0.5%, to $1.30 billion at December 31, 2022 compared to $1.29 billion at December 31, 2021.
Deposits
Borrowed Funds
Stockholders’ Equity
Stockholders’ equity decreased $23.0 million, or 17.3%, to $110.2 million at December 31, 2022, compared to $133.1 million at December 31, 2021. Key factors impacting stockholders’ equity included accumulated other comprehensive loss, which increased $25.3 million primarily due to the effect of rising market interest rates on the Company’s investment securities; the payment of $4.9 million in dividends since December 31, 2021; and activity under share repurchase programs, offset by the positive impact of $11.2 million of net income. On February 15, 2022, the Company completed its stock repurchase program that was implemented on June 10, 2021. On April 21, 2022, a new $10 million repurchase program was authorized, with the Company repurchasing 62,178 shares at an average price of $22.47 per share since the inception of the plan. In total, the Company has repurchased $4.8 million since December 31, 2021.
Book value per share
Book value per common share was $21.60 at December 31, 2022 compared to $25.31 at December 31, 2021, a decrease of $3.71.
Tangible book value per common share (Non-GAAP) was $19.00 at December 31, 2022, compared to $22.45 at December 31, 2021, a decrease of $3.45.
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
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
Assets
Cash and Due From Banks
$
103,700
$
122,801
$
81,121
$
123,588
$
119,674
Securities
190,058
193,846
213,505
231,097
224,974
Loans
Real Estate:
Residential
330,725
328,248
325,138
317,254
320,798
Commercial
436,805
432,516
426,105
427,227
392,124
Construction
44,923
49,502
41,277
54,227
85,028
Commercial and Industrial
Commercial and Industrial
69,918
61,428
62,054
59,601
64,487
PPP
126
768
3,853
8,242
24,523
Consumer
146,927
150,615
148,921
143,422
122,152
Other
20,449
19,865
20,621
10,669
11,684
Total Loans
1,049,873
1,042,942
1,027,969
1,020,642
1,020,796
Allowance for Loan Losses
(12,819
)
(12,854
)
(12,833
)
(11,595
)
(11,582
)
Loans, Net
1,037,054
1,030,088
1,015,136
1,009,047
1,009,214
Premises and Equipment, Net
17,844
18,064
18,196
18,349
18,399
Bank-Owned Life Insurance
25,893
25,750
25,610
25,468
25,332
Goodwill
9,732
9,732
9,732
9,732
9,732
Intangible Assets, Net
3,513
3,959
4,404
4,850
5,295
Accrued Interest and Other Assets
21,144
21,680
18,757
16,539
12,859
Total Assets
$
1,408,938
$
1,425,920
$
1,386,461
$
1,438,670
$
1,425,479
Liabilities
Deposits
Non-Interest Bearing Demand Deposits
$
390,405
$
407,107
$
389,127
$
400,105
$
385,775
Interest Bearing Demand Accounts
311,825
298,755
265,347
280,455
272,518
Money Market Accounts
209,125
198,715
185,308
192,929
192,125
Savings Accounts
248,022
250,378
250,226
247,589
239,482
Time Deposits
109,126
120,879
125,182
129,235
136,713
Total Deposits
1,268,503
1,275,834
1,215,190
1,250,313
1,226,613
Short-Term Borrowings
8,060
18,108
32,178
39,219
39,266
Other Borrowings
14,638
17,627
17,618
17,607
17,601
Accrued Interest Payable and Other Liabilities
7,582
7,645
7,703
9,375
8,875
Total Liabilities
1,298,783
1,319,214
1,272,689
1,316,514
1,292,355
Stockholders’ Equity
$
110,155
$
106,706
$
113,772
$
122,156
$
133,124
Total Liabilities and Stockholders’ Equity
$
1,408,938
$
1,425,920
$
1,386,461
$
1,438,670
$
1,425,479
(Dollars in thousands, except share and per share data) (Unaudited)
Three Months Ended
Year Ended
Selected Operating Data
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
12/31/22
12/31/21
Interest and Dividend Income
Loans, Including Fees
$
11,835
$
10,815
$
9,733
$
9,551
$
9,904
$
41,933
$
39,704
Securities:
Taxable
974
985
988
905
866
3,852
2,990
Tax-Exempt
40
49
57
66
66
213
289
Dividends
28
21
20
22
21
91
84
Other Interest and Dividend Income
978
417
160
72
106
1,627
490
Total Interest and Dividend Income
13,855
12,287
10,958
10,616
10,963
47,716
43,557
Interest Expense
Deposits
1,811
1,079
604
530
636
4,025
3,125
Short-Term Borrowings
7
19
18
19
26
63
98
Other Borrowings
171
174
173
174
70
693
182
Total Interest Expense
1,989
1,272
795
723
732
4,781
3,405
Net Interest and Dividend Income
11,866
11,015
10,163
9,893
10,231
42,935
40,152
Provision (Recovery) for Loan Losses
—
—
3,784
—
75
3,784
(1,125
)
Net Interest and Dividend Income After Provision (Recovery) for Loan Losses
11,866
11,015
6,379
9,893
10,156
39,151
41,277
Noninterest Income:
Service Fees
530
544
559
526
569
2,160
2,331
Insurance Commissions
1,399
1,368
1,369
1,798
1,618
5,934
5,616
Other Commissions
157
244
179
89
90
669
521
Net Gain on Sales of Loans
—
—
—
—
977
—
1,143
Net Gain (Loss) on Securities
83
(46
)
(199
)
(7
)
44
(168
)
526
Net Gain on Purchased Tax Credits
14
14
14
14
17
57
70
Gain on Sale of Branches
—
—
—
—
5,203
—
5,203
Net Gain (Loss) on Disposal of Fixed Assets
—
439
—
(8
)
—
431
(3
)
Income from Bank-Owned Life Insurance
143
140
142
136
142
561
553
Other Income
34
36
41
65
29
176
320
Total Noninterest Income
2,360
2,739
2,105
2,613
8,689
9,820
16,280
Noninterest Expense:
Salaries and Employee Benefits
4,625
4,739
4,539
4,565
5,181
18,469
19,938
Occupancy
817
768
776
686
619
3,047
2,968
Equipment
178
170
182
210
252
739
1,034
Data Processing
681
540
446
485
488
2,152
2,154
FDIC Assessment
154
147
128
209
222
638
1,014
PA Shares Tax
258
240
240
240
173
979
887
Contracted Services
405
288
348
587
1,133
1,628
4,011
Legal and Professional Fees
362
334
389
152
206
1,237
994
Advertising
165
131
115
116
191
527
749
Other Real Estate Owned (Income)
(38
)
(38
)
(37
)
(38
)
(30
)
(151
)
(183
)
Amortization of Intangible Assets
446
445
446
445
445
1,782
1,926
Intangible Assets and Goodwill Impairment
—
—
—
—
—
—
1,178
Writedown of Fixed Assets
—
—
—
—
23
—
2,293
Other
945
1,063
838
999
1,069
3,844
3,899
Total Noninterest Expense
8,998
8,827
8,410
8,656
9,972
34,891
42,862
Income Before Income Tax Expense (Benefit)
5,228
4,927
74
3,850
8,873
14,080
14,695
Income Tax Expense (Benefit)
1,076
998
(44
)
803
1,908
2,833
3,125
Net Income
$
4,152
$
3,929
$
118
$
3,047
$
6,965
$
11,247
$
11,570
Three Months Ended
Year Ended
Per Common Share Data
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
12/31/22
12/31/21
Dividends Per Common Share
$
0.24
$
0.24
$
0.24
$
0.24
$
0.24
$
0.96
$
0.96
Earnings Per Common Share - Basic
0.81
0.77
0.02
0.59
1.32
2.19
2.15
Earnings Per Common Share - Diluted
0.81
0.77
0.02
0.58
1.31
2.18
2.15
Adjusted Earnings Per Common Share - Diluted (Non-GAAP) (1)
0.80
0.71
0.05
0.59
0.53
2.14
1.95
Weighted Average Common Shares Outstanding - Basic
5,095,237
5,106,861
5,147,846
5,198,194
5,291,795
5,136,670
5,382,441
Weighted Average Common Shares Outstanding - Diluted
5,104,254
5,118,627
5,156,975
5,220,887
5,314,537
5,149,312
5,392,729
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
Common Shares Outstanding
5,100,189
5,096,672
5,128,333
5,156,897
5,260,672
Book Value Per Common Share
$
21.60
$
20.94
$
22.18
$
23.69
$
25.31
Tangible Book Value per Common Share (1)
19.00
18.25
19.43
20.86
22.45
Stockholders’ Equity to Assets
7.8
%
7.5
%
8.2
%
8.5
%
9.3
%
Tangible Common Equity to Tangible Assets (1)
6.9
6.6
7.3
7.6
8.4
Three Months Ended
Year Ended
Selected Financial Ratios (2)
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
12/31/22
12/31/21
Return on Average Assets
1.16
%
1.12
%
0.03
%
0.87
%
1.87
%
0.80
%
0.79
%
Adjusted Return on Average Assets (1)
1.15
1.03
0.08
0.87
0.76
0.78
0.72
Return on Average Equity
15.26
13.60
0.40
9.50
20.95
9.56
8.66
Adjusted Return on Average Equity (1)
15.01
12.53
0.93
9.54
8.55
9.39
7.87
Average Interest-Earning Assets to Average Interest-Bearing Liabilities
149.04
149.41
149.03
144.48
145.09
148.00
145.44
Average Equity to Average Assets
7.63
8.20
8.49
9.14
8.93
8.36
9.12
Net Interest Rate Spread
3.17
3.10
3.00
2.98
2.85
3.07
2.81
Net Interest Rate Spread (FTE) (1)
3.18
3.11
3.01
2.99
2.86
3.08
2.82
Net Interest Margin
3.45
3.29
3.12
3.08
2.95
3.24
2.92
Net Interest Margin (FTE) (1)
3.46
3.30
3.13
3.10
2.96
3.25
2.94
Net Charge-offs and (Recoveries) to Average Loans
0.01
(0.01
)
1.01
(0.01
)
0.03
0.25
0.01
Efficiency Ratio
63.25
64.18
68.55
69.21
52.71
66.14
75.95
Adjusted Efficiency Ratio (1)
60.74
63.02
64.18
65.88
69.73
63.36
74.25
Asset Quality Ratios
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
Allowance for Loan Losses to Total Loans
1.22
%
1.23
%
1.25
%
1.14
%
1.13
%
Allowance for Loan Losses to Total Loans, Excluding PPP Loans(1)
1.22
1.23
1.25
1.15
1.16
Allowance for Loan Losses to Nonperforming Loans (3)
221.06
218.61
219.89
158.88
159.40
Allowance for Loan Losses to Noncurrent Loans (4)
320.64
318.96
329.47
218.28
233.37
Delinquent and Nonaccrual Loans to Total Loans (4) (5)
0.81
0.46
0.45
0.79
0.78
Nonperforming Loans to Total Loans (3)
0.55
0.56
0.57
0.72
0.71
Noncurrent Loans to Total Loans (4)
0.38
0.39
0.38
0.52
0.49
Nonperforming Assets to Total Assets (6)
0.41
0.41
0.42
0.51
0.51
Capital Ratios (7)
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
Common Equity Tier 1 Capital (to Risk Weighted Assets)
12.33
%
12.02
%
11.83
%
11.99
%
11.95
%
Tier 1 Capital (to Risk Weighted Assets)
12.33
12.02
11.83
11.99
11.95
Total Capital (to Risk Weighted Assets)
13.58
13.27
13.08
13.20
13.18
Tier 1 Leverage (to Adjusted Total Assets)
8.66
8.51
8.33
8.19
7.76
(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, 2022
September 30, 2022
June 30, 2022
March 31, 2022
December 31, 2021
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)
$
1,034,714
$
11,853
4.54
%
$
1,024,363
$
10,833
4.20
%
$
1,007,874
$
9,751
3.88
%
$
1,009,210
$
9,573
3.85
%
$
1,004,827
$
9,927
3.92
%
Debt Securities
Taxable
216,915
974
1.80
222,110
985
1.77
228,315
988
1.73
215,906
905
1.68
205,328
866
1.69
Exempt From Federal Tax
6,277
51
3.25
7,998
62
3.10
9,109
73
3.21
10,195
84
3.30
10,477
84
3.21
Equity Securities
2,693
28
4.16
2,693
21
3.12
2,693
20
2.97
2,693
22
3.27
2,693
21
3.12
Interest Bearing Deposits at Banks
99,108
939
3.79
67,870
378
2.23
56,379
122
0.87
59,296
33
0.22
150,102
61
0.16
Other Interest-Earning Assets
2,875
39
5.38
2,784
39
5.56
3,235
38
4.71
3,483
39
4.54
3,475
45
5.14
Total Interest-Earning Assets
1,362,582
13,884
4.04
1,327,818
12,318
3.68
1,307,605
10,992
3.37
1,300,783
10,656
3.32
1,376,902
11,004
3.17
Noninterest-Earning Assets
51,718
68,796
84,323
122,288
100,607
Total Assets
$
1,414,300
$
1,396,614
$
1,391,928
$
1,423,071
$
1,477,509
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits (3)
$
315,352
$
810
1.02
%
$
278,412
$
393
0.56
%
$
260,655
$
111
0.17
$
276,603
$
48
0.07
$
278,546
$
51
0.07
%
Savings (3)
249,948
29
0.05
251,148
20
0.03
248,356
20
0.03
243,786
19
0.03
252,387
20
0.03
Money Market (3)
206,192
604
1.16
189,371
269
0.56
188,804
61
0.13
192,425
41
0.09
209,572
57
0.11
Time Deposits (3)
116,172
368
1.26
123,438
397
1.28
127,832
412
1.29
132,015
422
1.30
154,342
508
1.31
Total Interest-Bearing Deposits (3)
887,664
1,811
0.81
842,369
1,079
0.51
825,647
604
0.29
844,829
530
0.25
894,847
636
0.28
Short-Term Borrowings
Securities Sold Under Agreements to Repurchase
8,985
7
0.31
28,738
19
0.26
34,135
18
0.21
37,884
19
0.20
44,709
26
0.23
Other Borrowings
17,598
171
3.86
17,621
174
3.92
17,611
173
3.94
17,604
174
4.01
9,474
70
2.93
Total Interest-Bearing Liabilities
914,247
1,989
0.86
888,728
1,272
0.57
877,393
795
0.36
900,317
723
0.33
949,030
732
0.31
Noninterest-Bearing Demand Deposits
391,300
390,658
391,975
384,188
388,787
Other Liabilities
788
2,636
4,415
8,554
7,800
Total Liabilities
1,306,335
1,282,022
1,273,783
1,293,059
1,345,617
Stockholders' Equity
107,965
114,592
118,145
130,012
131,892
Total Liabilities and Stockholders' Equity
$
1,414,300
$
1,396,614
$
1,391,928
$
1,423,071
$
1,477,509
Net Interest Income (FTE)
(Non-GAAP) (4)
$
11,895
$
11,046
$
10,197
$
9,933
$
10,272
Net Interest-Earning Assets (5)
448,335
439,090
430,212
400,466
427,872
Net Interest Rate Spread (FTE)
(Non-GAAP) (4) (6)
3.18
%
3.11
%
3.01
%
2.99
%
2.86
%
Net Interest Margin (FTE)
(Non-GAAP) (4)(7)
3.46
3.30
3.13
3.10
2.96
PPP Loans
216
22
40.41
2,424
123
20.13
5,546
144
10.41
14,673
445
12.30
29,067
391
5.34
(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 if applicable.
(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, 2022
December 31, 2021
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)
$
1,019,124
$
42,010
4.12
%
$
1,014,405
$
39,799
3.92
%
Debt Securities
Taxable
220,818
3,852
1.74
162,987
2,990
1.83
Exempt From Federal Tax
8,383
270
3.22
11,829
366
3.09
Marketable Equity Securities
2,693
91
3.38
2,657
84
3.16
Interest Bearing Deposits at Banks
70,765
1,473
2.08
177,768
304
0.17
Other Interest-Earning Assets
3,092
154
4.98
3,733
186
4.98
Total Interest-Earning Assets
1,324,875
47,850
3.61
1,373,379
43,729
3.18
Noninterest-Earning Assets
81,553
91,075
Total Assets
$
1,406,428
$
1,464,454
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits (2)
$
282,850
$
1,362
0.48
%
$
272,256
$
232
0.09
%
Savings (2)
248,334
88
0.04
247,864
98
0.04
Money Market (2)
194,223
976
0.50
201,222
281
0.14
Time Deposits (2)
124,817
1,599
1.28
171,805
2,514
1.46
Total Interest-Bearing Deposits (2)
850,224
4,025
0.47
893,147
3,125
0.35
Short-Term Borrowings
Securities Sold Under Agreements to Repurchase
27,360
63
0.23
43,988
98
0.22
Other Borrowings
17,609
693
3.94
7,172
182
2.54
Total Interest-Bearing Liabilities
895,193
4,781
0.53
944,307
3,405
0.36
Noninterest-Bearing Demand Deposits
389,553
378,374
Other Liabilities
4,072
8,168
Total Liabilities
1,288,818
1,330,849
Stockholders' Equity
117,610
133,605
Total Liabilities and Stockholders' Equity
$
1,406,428
$
1,464,454
Net Interest Income (FTE) (Non-GAAP) (3)
43,069
40,324
Net Interest-Earning Assets (4)
429,682
429,072
Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5)
3.08
%
2.82
%
Net Interest Margin (FTE) (Non-GAAP) (3)(6)
3.25
2.94
PPP Loans
5,666
734
12.95
45,905
2,189
4.77
(1)
Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.
(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 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 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
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
12/31/22
12/31/21
(Dollars in thousands, except share and per share data) (Unaudited)
Net Income (GAAP)
$
4,152
$
3,929
$
118
$
3,047
$
6,965
$
11,247
$
11,570
Adjustments
(Gain) Loss on Securities
(83
)
46
199
7
(44
)
168
(526
)
Gain on Sale of Branches
—
—
—
—
(5,203
)
—
(5,203
)
(Gain) Loss on Disposal of Fixed Assets
—
(439
)
—
8
—
(431
)
3
Tax effect
17
83
(42
)
(3
)
1,102
55
1,202
Non-Cash Charges:
Intangible Assets and Goodwill Impairment
—
—
—
—
—
—
1,178
Writedown on Fixed Assets
—
—
—
—
23
—
2,293
Tax Effect
—
—
—
—
—
—
Adjusted Net Income (Non-GAAP)
$
4,086
$
3,619
$
275
$
3,059
$
2,843
$
11,039
$
10,517
Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding
5,104,254
5,118,627
5,156,975
5,220,887
5,314,537
5,149,312
5,392,729
Earnings per Common Share - Diluted (GAAP)
$
0.81
$
0.77
$
0.02
$
0.58
$
1.31
$
2.18
$
2.15
Adjusted Earnings per Common Share - Diluted (Non-GAAP)
$
0.80
$
0.71
$
0.05
$
0.59
$
0.53
$
2.15
$
1.95
Net Income (GAAP) (Numerator)
$
4,152
$
3,929
$
118
$
3,047
$
6,965
$
11,247
$
11,570
Annualization Factor
3.97
3.97
4.01
4.06
3.97
1.00
1.00
Average Assets (Denominator)
1,414,300
1,396,614
1,391,928
1,423,071
1,477,509
1,406,428
1,464,454
Return on Average Assets (GAAP)
1.16
%
1.12
%
0.03
%
0.87
%
1.87
%
0.80
%
0.79
%
Adjusted Net Income (Non-GAAP) (Numerator)
$
4,086
$
3,619
$
275
$
3,059
$
2,843
$
11,039
$
10,517
Annualization Factor
3.97
3.97
4.01
4.06
3.97
1.00
1.00
Average Assets (Denominator)
1,414,300
1,396,614
1,391,928
1,423,071
1,477,509
1,407,413
1,455,368
Adjusted Return on Average Assets (Non-GAAP)
1.15
%
1.03
%
0.08
%
0.87
%
0.76
%
0.78
%
0.72
%
Three Months Ended
Year Ended
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
12/31/22
12/31/21
(Dollars in thousands) (Unaudited)
Net Income (GAAP) (Numerator)
$
4,152
$
3,929
$
118
$
3,047
$
6,965
$
11,247
$
11,570
Annualization Factor
3.97
3.97
4.01
4.06
3.97
1.00
1.00
Average Equity (GAAP) (Denominator)
107,965
114,592
118,145
130,012
131,892
117,610
133,605
Return on Average Equity (GAAP)
15.26
%
13.60
%
0.40
%
9.50
%
20.95
%
9.56
%
8.66
%
Adjusted Net Income (Non-GAAP) (Numerator)
$
4,086
$
3,619
$
275
$
3,059
$
2,843
$
11,039
$
10,517
Annualization Factor
3.97
3.97
4.01
4.06
3.97
1.00
1.00
Average Equity (GAAP) (Denominator)
107,965
114,592
118,145
130,012
131,892
117,610
133,605
Adjusted Return on Average Equity (Non-GAAP)
15.01
%
12.53
%
0.93
%
9.54
%
8.55
%
9.39
%
7.87
%
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.
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
(Dollars in thousands, except share and per share data) (Unaudited)
Assets (GAAP)
$
1,408,938
$
1,425,920
$
1,386,461
$
1,438,670
$
1,425,479
Goodwill and Intangible Assets, Net
(13,245
)
(13,691
)
(14,136
)
(14,582
)
(15,027
)
Tangible Assets (Non-GAAP) (Numerator)
$
1,395,693
$
1,412,229
$
1,372,325
$
1,424,088
$
1,410,452
Stockholders' Equity (GAAP)
$
110,155
$
106,706
$
113,772
$
122,156
$
133,124
Goodwill and Intangible Assets, Net
(13,245
)
(13,691
)
(14,136
)
(14,582
)
(15,027
)
Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator)
$
96,910
$
93,015
$
99,636
$
107,574
$
118,097
Stockholders’ Equity to Assets (GAAP)
7.8
%
7.5
%
8.2
%
8.5
%
9.3
%
Tangible Common Equity to Tangible Assets (Non-GAAP)
6.9
%
6.6
%
7.3
%
7.6
%
8.4
%
Common Shares Outstanding (Denominator)
5,100,189
5,096,672
5,128,333
5,156,897
5,260,672
Book Value per Common Share (GAAP)
$
21.60
$
20.94
$
22.18
$
23.69
$
25.31
Tangible Book Value per Common Share (Non-GAAP)
$
19.00
$
18.25
$
19.43
$
20.86
$
22.45
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
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
12/31/22
12/31/21
(Dollars in thousands) (Unaudited)
Interest Income (GAAP)
$
13,855
$
12,287
$
10,958
$
10,616
$
10,963
$
47,716
$
43,557
Adjustment to FTE Basis
29
31
34
40
41
134
172
Interest Income (FTE) (Non-GAAP)
13,884
12,318
10,992
10,656
11,004
47,850
43,729
Interest Expense (GAAP)
1,989
1,272
795
723
732
4,781
3,405
Net Interest Income (FTE) (Non-GAAP)
$
11,895
$
11,046
$
10,197
$
9,933
$
10,272
$
43,069
$
40,324
Net Interest Rate Spread (GAAP)
3.17
%
3.10
%
3.00
%
2.98
%
2.85
%
3.07
%
2.81
%
Adjustment to FTE Basis
0.01
0.01
0.01
0.01
0.01
0.01
0.01
Net Interest Rate Spread (FTE) (Non-GAAP)
3.18
3.11
3.01
2.99
2.86
3.08
2.82
Net Interest Margin (GAAP)
3.45
%
3.29
%
3.12
%
3.08
%
2.95
%
3.24
%
2.92
%
Adjustment to FTE Basis
0.01
0.01
0.01
0.02
0.01
0.01
0.02
Net Interest Margin (FTE) (Non-GAAP)
3.46
3.30
3.13
3.10
2.96
3.25
2.94
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
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
12/31/22
12/31/21
(Dollars in thousands) (Unaudited)
Noninterest Expense (GAAP) (Numerator)
$
8,998
$
8,827
$
8,410
$
8,656
$
9,972
$
34,891
$
42,862
Net Interest and Dividend Income (GAAP)
$
11,866
$
11,015
$
10,163
$
9,893
$
10,231
$
42,935
$
40,152
Noninterest Income (GAAP)
2,360
2,739
2,105
2,613
8,689
9,820
16,280
Operating Revenue (GAAP) (Denominator)
$
14,226
$
13,754
$
12,268
$
12,506
$
18,920
$
52,755
$
56,432
Efficiency Ratio (GAAP)
63.25
%
64.18
%
68.55
%
69.21
%
52.71
%
66.14
%
75.95
%
Noninterest Expense (GAAP)
$
8,998
$
8,827
$
8,410
$
8,656
$
9,972
$
34,891
$
42,862
Less:
Other Real Estate Owned (Income)
(38
)
(38
)
(37
)
(38
)
(30
)
(151
)
(183
)
Amortization of Intangible Assets
446
445
446
445
445
1,782
1,926
Intangible Assets and Goodwill Impairment
—
—
—
—
—
—
1,178
Writedown on Fixed Assets
—
—
—
—
23
—
2,293
Adjusted Noninterest Expense (Non-GAAP) (Numerator)
$
8,590
$
8,420
$
8,001
$
8,249
$
9,534
$
33,260
$
37,648
Net Interest and Dividend Income (GAAP)
$
11,866
$
11,015
$
10,163
$
9,893
$
10,231
$
42,935
$
40,152
Noninterest Income (GAAP)
2,360
2,739
2,105
2,613
8,689
9,820
16,280
Less:
Net Gain (Loss) on Securities
83
(46
)
(199
)
(7
)
44
(168
)
526
Gain on Sale of Branches
—
—
—
—
5,203
—
5,203
Net Gain (Loss) on Disposal of Fixed Assets
—
439
—
(8
)
—
431
(3
)
Adjusted Noninterest Income (Non-GAAP)
$
2,277
$
2,346
$
2,304
$
2,628
$
3,442
$
9,557
$
10,554
Adjusted Operating Revenue (Non-GAAP) (Denominator)
$
14,143
$
13,361
$
12,467
$
12,521
$
13,673
$
52,492
$
50,706
Adjusted Efficiency Ratio (Non-GAAP)
60.74
%
63.02
%
64.18
%
65.88
%
69.73
%
63.36
%
74.25
%
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.
12/31/22
9/30/22
6/30/22
3/31/22
12/31/21
(Dollars in thousands) (Unaudited)
Allowance for Loan Losses (Numerator)
$
12,819
$
12,854
$
12,833
$
11,595
$
11,582
Total Loans
1,049,873
$
1,042,942
1,027,969
$
1,020,642
$
1,020,796
PPP Loans
(126
)
(768
)
(3,853
)
(8,242
)
(24,523
)
Total Loans, Excluding PPP Loans (Non-GAAP) (Denominator)
$
1,049,747
$
1,042,174
$
1,024,116
$
1,012,400
$
996,273
Allowance for Loan Losses to Total Loans, Excluding
PPP Loans (Non-GAAP)
1.22
%
1.23
%
1.25
%
1.15
%
1.16
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20230126005788/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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