Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries CB Financial Services, Inc. Announces Third Quarter and Year-to-Date 2022 Financial Results and Declares Quarterly Cash Dividend By: CB Financial Services, Inc. via Business Wire October 27, 2022 at 16:15 PM EDT 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 third quarter and year-to-date 2022 financial results. Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands, except per share data) (Unaudited) Net Income (GAAP) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Non-Recurring Items (310 ) 157 12 (4,122 ) (17 ) (141 ) 3,070 Adjusted Net Income (Non-GAAP) (1) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Earnings per Common Share - Diluted (GAAP) $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 0.37 $ 1.37 $ 0.85 Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1) $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 0.36 $ 1.35 $ 1.42 (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 Third Quarter Financial Highlights (Comparisons to three months ended September 30, 2021 unless otherwise noted) Net income was $3.9 million, compared to net income of $2.0 million. Current period results were driven by net Interest Margin expansion coupled with a reduction of noninterest expense of $946,000 for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. Adjusted net income (Non-GAAP) was $3.6 million, compared to $2.0 million. Earnings per diluted common share (EPS) increased to $0.77 from $0.37. Adjusted earnings per common share - diluted (Non-GAAP) was $0.71, compared to $0.36. Return on average assets (annualized) of 1.12%, compared to average assets (annualized) of 0.54%. Adjusted return on average assets (annualized) (Non-GAAP) of 1.03%, compared to 0.53%. Return on average equity (annualized) of 13.60%, compared to 5.93% (annualized). Adjusted return on average equity (annualized) (Non-GAAP) of 12.53%, compared to 5.88%. Net interest margin (NIM) improved to 3.29% from 2.88%. Net interest and dividend income was $11.0 million, compared to $10.0 million. Noninterest income increased to $2.7 million, compared to $2.2 million. The most significant changes in noninterest income were a $439,000 gain recognized as a result of the sale of assets of two former branch locations that were part of our consolidation measures and an increase of $174,000 in insurance commissions. The increase in insurance commissions was primarily driven by contingency income which resulted from the higher than lock-in amounts received and core business including commercial and personal insurance lines. (Amounts at September 30, 2022; comparisons to December 31, 2021, unless otherwise noted) Total loans, including Payroll Protection Program (“PPP”) loans, were $1.04 billion, an increase of $22.1 million from $1.02 billion. Total loans held for investment, excluding PPP loans, increased $45.9 million, or 6.1% annualized, to $1.04 billion compared to $996.3 million, and included increases of $28.5 million, or 31.1% annualized, in consumer loans, and $40.4 million, or 13.8% annualized, growth in commercial real estate loans, partially offset by decreases of $35.5 million in construction real estate and $26.8 million in commercial and industrial loans. Compared to September 30, 2021, loans held for investment, excluding PPP loans, increased $73.3 million, or 7.6%, primarily from increases of $52.9 million in commercial real estate loans and $38.5 million in consumer loans as noted above, partially offset by decreases of $28.6 million in construction real estate loans and $40.2 million in commercial and industrial loans. Nonperforming loans to total loans was 0.56%, a decrease of 15 basis points (“bps”), compared to 0.71%. Total deposits were $1.28 billion, an increase of $49.2 million, compared to $1.23 billion. Total assets remained level at $1.43 billion. Book value per share was $20.94, compared to $22.18 as of June 30, 2022 and $25.31 as of December 31, 2021. Tangible book value per share (Non-GAAP) decreased to $18.25, compared to $19.43 as of June 30, 2022 and $22.45 as of December 31, 2021, reflecting impact to Accumulated Other Comprehensive Income from unrealized losses on securities portfolios. Management Commentary President and CEO John H. Montgomery stated, “We delivered solid third quarter results, driven by continued growth in our loan portfolio coupled with expanded margins and expense control. Rising interest rates underpinned a 17 basis point expansion of our net interest margin compared with the second quarter and a 41 basis point improvement from the year-ago quarter. Noninterest expense continued to run at levels well below last year’s amounts due to the optimization efforts we undertook during 2021. As a result, our Adjusted Efficiency Ratio during the third quarter was 63.0%, compared with 77.3% a year ago. While the Federal Reserve has made it clear they will accept a recession in order to control inflation, we continue to believe the southwestern Pennsylvania market in which we operate possesses a variety of demographic attributes that have muted economic volatility in the past. In addition, we have a veteran credit team with successful experience underwriting through the last recession.” Mr. Montgomery continued, “We remain focused on growing our business and have continued to make targeted additions to our team to do so. During the third quarter we added a business banking team and are also in the process of adding to our commercial banking team. We are very excited to have these new team members come aboard and look forward to their contributions. Continuing our commitment to CB shareholders, we repurchased 30,271 shares during the third quarter under the current $10.0 million share repurchase program announced last quarter, in addition to payment of our regular quarterly dividend of $0.24 per share. 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 declared a $0.24 quarterly cash dividend per outstanding share of common stock, payable on or about November 30, 2022, to stockholders of record as of the close of business on November 18, 2022. 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 on October 19, 2022, the repurchase program, if fully completed, would encompass 461,463 shares, or approximately 9.1% of the shares currently outstanding. 2022 Third Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.0 million, or 10.0%, to $11.0 million for the three months ended September 30, 2022 compared to $10.0 million for the three months ended September 30, 2021. Net interest margin (GAAP) increased to 3.29% for the three months ended September 30, 2022 compared to 2.88% for the three months ended September 30, 2021. Fully Tax Equivalent (“FTE”) net interest margin (Non-GAAP) increased 41 bps to 3.30% for the three months ended September 30, 2022 compared to 2.89% for the three months ended September 30, 2021. Interest and dividend income increased $1.5 million, or 13.9%, to $12.3 million for the three months ended September 30, 2022 compared to $10.8 million for the three months ended September 30, 2021. Interest income on loans increased $1.1 million, or 11.3%, to $10.8 million for the three months ended September 30, 2022 compared to $9.7 million for the three months ended September 30, 2021. The average balance of loans increased $19.9 million to $1.02 billion from $1.00 billion and the average yield increased 35 bps to 4.20% compared to 3.85%. Interest and fee income on PPP loans was $123,000 for the three months ended September 30, 2022 and contributed 4 bps to loan yield, compared to $484,000 for the three months ended September 30, 2021, which contributed 4 bps to loan yield. The impact of the accretion of the credit mark on acquired loan portfolios was $47,000 for the three months ended September 30, 2022 compared to $94,000 for the three months ended September 30, 2021, or 2 bps in the current period compared to 4 bps in the prior period. Interest income on taxable investment securities increased $142,000, or 16.8%, to $985,000 for the three months ended September 30, 2022 compared to $843,000 for the three months ended September 30, 2021 driven by a $24.3 million increase in average balance partially coupled with a 6 bps increase in average yield. Interest expense increased $496,000, or 63.9%, to $1.3 million for the three months ended September 30, 2022 compared to $776,000 for the three months ended September 30, 2021. Interest expense on deposits increased $364,000, or 50.9%, to $1.1 million for the three months ended September 30, 2022 compared to $715,000 for the three months ended September 30, 2021. While average interest-earning deposit balances decreased $51.7 million, or 5.8%, to $842.4 million as of September 30, 2022 compared to $894.0 million as of September 30, 2021 , rising interest rates led to the repricing of higher-cost demand and money market deposits and resulted in a 19 bps, or 59.9%, increase in average cost compared to the three months ended September 30, 2021. In addition, the average balance of time deposits and the related average cost decreased $45.2 million and 11 bps, respectively. These decreases are partially offset by an increase in average other borrowings of $11.6 million or 193.7% to $17.6 million as of September 30, 2022 compared to $6.0 million as of September 30, 2021, which was driven by an increase in subordinated debt balance. Provision for Loan Losses There was no provision for loan losses for the three months ended September 30, 2022 or for the three months ended September 30, 2021. Noninterest income Noninterest income increased $541,000, or 24.6%, to $2.7 million for the three months ended September 30, 2022, compared to $2.2 million for the three months ended September 30, 2021. The increase was largely due to a gain of $439,000 on the disposal of fixed assets during the three months ended September 30, 2022 due to the sale of the land and buildings of the former Pioneer and Bellaire bank branches. During the quarter, the Bank also recorded a $174,000 increase in insurance commissions. The increase in insurance commissions was primarily driven by contingency income which resulted from the higher than lock-in amounts received and core business including commercial and personal insurance lines. In addition, net gain on sale of loans decreased $49,000 as there were no loans sold during the three months ended September 30, 2022. Noninterest Expense Noninterest expense decreased $946,000, or 9.7%, to $8.8 million for the three months ended September 30, 2022 compared to $9.8 million for the three months ended September 30, 2021. Salaries and benefits decreased $48,000 and contracted services decreased $1.2 million to $288,000 for the three months ended September 30, 2022 compared to $1.4 million for the three months ended September 30, 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 $153,000. Statement of Financial Condition Review Assets Total assets increased $441,000, or 0.03%, to $1.43 billion at both September 30, 2022, and December 31, 2021. Cash and due from banks increased $3.1 million, or 2.6%, to $122.8 million at September 30, 2022, compared to $119.7 million at December 31, 2021. The change is primarily due to an increase in deposits as further described below in the Liabilities section. Securities decreased $31.1 million, or 13.8%, to $193.8 million at September 30, 2022, compared to $225.0 million at December 31, 2021. Current period activity included $26.8 million of purchases, and $24.9 million of pay downs. The purchases were made to earn a higher yield on excess cash. In addition, there was a $32.8 million decrease in the market value of the debt securities portfolio, primarily due to the increase in market interest rates, and a $252,000 decline in market value in the equity securities portfolio, which is primarily comprised of bank stocks. Payroll Protection Program Update PPP loans decreased $23.8 million to $768,000 at September 30, 2022 compared to $24.5 million at December 31, 2021. $27,000 of net PPP loan origination fees were unearned at September 30, 2022 compared to $678,000 at December 31, 2021. $117,000 of net PPP loan origination fees were earned in the three months ended September 30, 2022 compared to $130,000 for the three months ended June 30, 2022. Loans and Credit Quality Total loans held for investment increased $22.1 million, or 2.17%, to $1.04 billion at September 30, 2022 compared to $1.02 billion at December 31, 2021. Excluding the net decline of $23.8 million in PPP loans in the current period, loans increased $45.9 million. The allowance for loan losses was $12.9 million at September 30, 2022 and $11.6 million at December 31, 2021. As a result, the allowance for loan losses to total loans was 1.23% at September 30, 2022 compared to 1.13% at December 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.23% at September 30, 2022 compared to 1.16% at December 31, 2021. The change in the allowance for loan losses was primarily due to adjustments to historical loss factors and changes in qualitative factors in particular economic and industry conditions since December 31, 2021. Net recoveries for the three months ended September 30, 2022 were $21,000, or 0.01% of average loans on an annualized basis. Net recoveries for the three months ended September 30, 2021 were $37,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the nine months ended September 30, 2022 were $2.5 million, or 0.33% of average loans on an annualized basis. Net recoveries for the nine months ended September 30, 2021 were $10,000, and had an immaterial effect on ratios for the period. Nonperforming loans, which includes nonaccrual loans, accruing loans past due 90 days or more, and accruing loans that are considered troubled debt restructurings, were $5.9 million at September 30, 2022 compared to $7.3 million at December 31, 2021. Current nonperforming loans to total loans ratio was 0.56% compared to 0.71% at December 31, 2021. Other Intangible assets decreased $1.3 million, or 24.6%, to $4.0 million at September 30, 2022 compared to $5.3 million at December 31, 2021 due to amortization expense recognized during the period. Accrued interest receivable and other assets increased $8.8 million, or 68.4%; to $21.7 million at September 30, 2022, compared to $12.9 million at December 31, 2021. This change was primarily driven by deferred taxes as a result of the increase in market interest rate conditions and the corresponding decrease in the market value of the mostly fixed rate securities portfolio. Liabilities Total liabilities increased $26.9 million, or 2.1%, to $1.32 billion at September 30, 2022 compared to $1.29 billion at December 31, 2021. Deposits Total deposits increased $49.2 million to $1.28 billion as of September 30, 2022 compared to $1.23 billion at December 31, 2021, an annualized increase of 5.3%. Interest-bearing and non interest-bearing demand deposits increased $26.2 million and $15.8 million, respectively, partially offset by a decrease in time deposits of $15.8 million. Average total deposits increased $15.4 million, primarily in both interest-bearing and non interest -bearing demand deposits for the three months ended September 30, 2022 compared to the three months ended June 30, 2022, Borrowed Funds Short-term borrowings decreased $21.2 million, or 53.9%, to $18.1 million at September 30, 2022, compared to $39.3 million at December 31, 2021. At September 30, 2022 and December 31, 2021, short-term borrowings were comprised entirely of securities sold under agreements to repurchase, which are related to business deposit customers whose funds, above designated target balances, are transferred into an overnight interest-earning investment account by purchasing securities from the Bank’s investment portfolio under an agreement to repurchase. A portion of this decrease is due to accounts that were being transitioned into other deposit products and account for most of the interest-bearing demand deposit increase. Stockholders’ Equity Stockholders’ equity decreased $26.4 million, or 19.8%, to $106.7 million at September 30, 2022, compared to $133.1 million at December 31, 2021. Since December 31, 2021, the Company has paid $3.7 million in dividends. 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 57,710 shares at an average price of $22.51 per share since the inception of the plan. In total, the Company has repurchased $4.7 million since December 31, 2021. In addition, accumulated other comprehensive loss increased $25.7 million primarily due to the effect of rising market interest rates on the Bank’s debt securities. This was partially offset by $7.1 million of net income. Book value per share Book value per common share was $20.94 at September 30, 2022 compared to $25.31 at December 31, 2021, a decrease of $4.37. Tangible book value per common share (Non-GAAP) was $18.25 at September 30, 2022, compared to $22.45 at December 31, 2021, a decrease of $4.20. 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 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Assets Cash and Due From Banks $ 122,801 $ 81,121 $ 123,588 $ 119,674 $ 173,523 Securities 193,846 213,505 231,097 224,974 221,351 Loans Held for Sale — — — — 17,407 Loans Real Estate: Residential 328,248 325,138 317,254 320,798 317,373 Commercial 432,516 426,105 427,227 392,124 379,621 Construction 49,502 41,277 54,227 85,028 78,075 Commercial and Industrial Commercial and Industrial 61,428 62,054 59,601 64,487 69,657 PPP 768 3,853 8,242 24,523 32,703 Consumer 150,615 148,921 143,422 122,152 112,087 Other 19,865 20,621 10,669 11,684 12,083 Total Loans 1,042,942 1,027,969 1,020,642 1,020,796 1,001,599 Allowance for Loan Losses (12,854 ) (12,833 ) (11,595 ) (11,582 ) (11,581 ) Loans, Net 1,030,088 1,015,136 1,009,047 1,009,214 990,018 Premises and Equipment Held for Sale — — — — 795 Premises and Equipment, Net 18,064 18,196 18,349 18,399 18,502 Bank-Owned Life Insurance 25,750 25,610 25,468 25,332 25,190 Goodwill 9,732 9,732 9,732 9,732 9,732 Intangible Assets, Net 3,959 4,404 4,850 5,295 5,740 Accrued Interest and Other Assets 21,680 18,757 16,539 12,859 12,560 Total Assets $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 $ 1,474,818 Liabilities Deposits Held for Sale $ — $ — $ — $ — $ 102,647 Deposits Non-Interest Bearing Demand Deposits 407,107 389,127 400,105 385,775 373,320 Interest Bearing Demand Accounts 298,755 265,347 280,455 272,518 244,004 Money Market Accounts 198,715 185,308 192,929 192,125 190,426 Savings Accounts 250,378 250,226 247,589 239,482 232,679 Time Deposits 120,879 125,182 129,235 136,713 144,727 Total Deposits 1,275,834 1,215,190 1,250,313 1,226,613 1,185,156 Short-Term Borrowings 18,108 32,178 39,219 39,266 42,623 Other Borrowings 17,627 17,618 17,607 17,601 6,000 Accrued Interest Payable and Other Liabilities 7,645 7,703 9,375 8,875 7,405 Total Liabilities 1,319,214 1,272,689 1,316,514 1,292,355 1,343,831 Stockholders’ Equity $ 106,706 $ 113,772 $ 122,156 $ 133,124 $ 130,987 Total Liabilities and Stockholders’ Equity $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 $ 1,474,818 Three Months Ended Nine Months Ended Selected Operating Data 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Interest and Dividend Income Loans, Including Fees $ 10,815 $ 9,733 $ 9,551 $ 9,904 $ 9,718 $ 30,098 $ 29,800 Securities: Taxable 985 988 905 866 843 2,878 2,124 Tax-Exempt 49 57 66 66 71 172 223 Dividends 21 20 22 21 19 64 63 Other Interest and Dividend Income 417 160 72 106 135 649 384 Total Interest and Dividend Income 12,287 10,958 10,616 10,963 10,786 33,861 32,594 Interest Expense Deposits 1,079 604 530 636 715 2,214 2,489 Short-Term Borrowings 19 18 19 26 25 56 72 Other Borrowings 174 173 174 70 36 522 112 Total Interest Expense 1,272 795 723 732 776 2,792 2,673 Net Interest and Dividend Income 11,015 10,163 9,893 10,231 10,010 31,069 29,921 Provision (Recovery) for Loan Losses — 3,784 — 75 — 3,784 (1,200 ) Net Interest and Dividend Income After Provision (Recovery) for Loan Losses 11,015 6,379 9,893 10,156 10,010 27,285 31,121 Noninterest Income: Service Fees 544 559 526 569 602 1,629 1,762 Insurance Commissions 1,368 1,369 1,798 1,618 1,194 4,535 3,998 Other Commissions 244 179 89 90 93 512 431 Net Gain on Sales of Loans — — — 977 49 — 166 Net (Loss) Gain on Securities (46 ) (199 ) (7 ) 44 24 (252 ) 482 Net Gain on Purchased Tax Credits 14 14 14 17 18 43 53 Gain on Sale of Branches — — — 5,203 — — — Net Gain (Loss) on Disposal of Fixed Assets 439 — (8 ) — — 431 (3 ) Income from Bank-Owned Life Insurance 140 142 136 142 138 418 411 Other Income 36 41 65 29 80 143 291 Total Noninterest Income 2,739 2,105 2,613 8,689 2,198 7,459 7,591 Noninterest Expense: Salaries and Employee Benefits 4,739 4,539 4,565 5,181 4,787 13,843 14,757 Occupancy 768 776 686 619 615 2,230 2,349 Equipment 170 182 210 252 205 561 782 Data Processing 540 446 485 488 541 1,471 1,666 FDIC Assessment 147 128 209 222 293 484 792 PA Shares Tax 240 240 240 173 224 721 714 Contracted Services 288 348 587 1,133 1,441 1,223 2,878 Legal and Professional Fees 334 389 152 206 180 876 788 Advertising 131 115 116 191 225 362 558 Other Real Estate Owned (Income) (38 ) (37 ) (38 ) (30 ) (89 ) (113 ) (153 ) Amortization of Intangible Assets 445 446 445 445 446 1,336 1,481 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown of Fixed Assets — — — 23 2 — 2,270 Other 1,063 838 999 1,069 903 2,899 2,830 Total Noninterest Expense 8,827 8,410 8,656 9,972 9,773 25,893 32,890 Income Before Income Tax Expense (Benefit) 4,927 74 3,850 8,873 2,435 8,851 5,822 Income Tax Expense (Benefit) 998 (44 ) 803 1,908 452 1,757 1,217 Net Income $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Three Months Ended Nine Months Ended Per Common Share Data 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.72 $ 0.72 Earnings Per Common Share - Basic 0.77 0.02 0.59 1.32 0.37 1.38 0.85 Earnings Per Common Share - Diluted 0.77 0.02 0.58 1.31 0.37 1.37 0.85 Adjusted Earnings Per Common Share - Diluted (Non-GAAP) (1) 0.71 0.05 0.59 0.53 0.36 1.35 1.42 Weighted Average Common Shares Outstanding - Basic 5,106,861 5,147,846 5,198,194 5,291,795 5,373,032 5,150,632 5,412,989 Weighted Average Common Shares Outstanding - Diluted 5,118,627 5,156,975 5,220,887 5,314,537 5,390,128 5,165,376 5,420,792 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Common Shares Outstanding 5,096,672 5,128,333 5,156,897 5,260,672 5,330,401 Book Value Per Common Share $ 20.94 $ 22.18 $ 23.69 $ 25.31 $ 24.57 Tangible Book Value per Common Share (1) 18.25 19.43 20.86 22.45 21.67 Stockholders’ Equity to Assets 7.5 % 8.2 % 8.5 % 9.3 % 8.9 % Tangible Common Equity to Tangible Assets (1) 6.6 7.3 7.6 8.4 7.9 Three Months Ended Nine Months Ended Selected Financial Ratios (2) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Return on Average Assets 1.12 % 0.03 % 0.87 % 1.87 % 0.54 % 0.68 % 0.42 % Adjusted Return on Average Assets (1) 1.03 0.08 0.87 0.76 0.53 0.66 0.70 Return on Average Equity 13.60 0.40 9.50 20.95 5.93 7.85 4.59 Adjusted Return on Average Equity (1) 12.53 0.93 9.54 8.55 5.88 7.69 7.65 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 149.41 149.03 144.48 145.09 146.78 147.64 145.56 Average Equity to Average Assets 8.20 8.49 9.14 8.93 9.03 8.61 9.19 Net Interest Rate Spread 3.10 3.00 2.98 2.85 2.77 3.03 2.80 Net Interest Rate Spread (FTE) (1) 3.11 3.01 2.99 2.86 2.78 3.04 2.81 Net Interest Margin 3.29 3.12 3.08 2.95 2.88 3.17 2.92 Net Interest Margin (FTE) (1) 3.30 3.13 3.10 2.96 2.89 3.18 2.93 Net (Recoveries) Charge-offs to Average Loans (0.01 ) 1.01 (0.01 ) 0.03 (0.01 ) 0.33 — Efficiency Ratio 64.18 68.55 69.21 52.71 80.05 67.21 87.68 Adjusted Efficiency Ratio (1) 63.02 64.18 65.88 69.73 77.27 64.33 75.92 Asset Quality Ratios 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Allowance for Loan Losses to Total Loans 1.23 % 1.25 % 1.14 % 1.13 % 1.16 % Allowance for Loan Losses to Total Loans, Excluding PPP Loans(1) 1.23 1.25 1.15 1.16 1.20 Allowance for Loan Losses to Nonperforming Loans (3) 218.61 219.89 158.88 159.40 106.18 Allowance for Loan Losses to Noncurrent Loans (4) 318.96 329.47 218.28 233.37 135.37 Delinquent and Nonaccrual Loans to Total Loans (4) (5) 0.46 0.45 0.79 0.78 0.97 Nonperforming Loans to Total Loans (3) 0.56 0.57 0.72 0.71 1.09 Noncurrent Loans to Total Loans (4) 0.39 0.38 0.52 0.49 0.85 Nonperforming Assets to Total Assets (6) 0.41 0.42 0.51 0.51 0.74 Capital Ratios (7) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.02 % 11.83 % 11.99 % 11.95 % 11.53 % Tier 1 Capital (to Risk Weighted Assets) 12.02 11.83 11.99 11.95 11.53 Total Capital (to Risk Weighted Assets) 13.27 13.08 13.20 13.18 12.77 Tier 1 Leverage (to Adjusted Total Assets) 8.51 8.33 8.19 7.76 7.38 (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 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 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) $ 1,024,363 $ 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 % $ 1,004,474 $ 9,740 3.85 % Debt Securities Taxable 222,110 985 1.77 228,315 988 1.73 215,906 905 1.68 205,328 866 1.69 197,763 843 1.71 Exempt From Federal Tax 7,998 62 3.10 9,109 73 3.21 10,195 84 3.30 10,477 84 3.21 11,647 90 3.09 Equity Securities 2,693 21 3.12 2,693 20 2.97 2,693 22 3.27 2,693 21 3.12 2,655 19 2.86 Interest Bearing Deposits at Banks 67,870 378 2.23 56,379 122 0.87 59,296 33 0.22 150,102 61 0.16 160,935 92 0.23 Other Interest-Earning Assets 2,784 39 5.56 3,235 38 4.71 3,483 39 4.54 3,475 45 5.14 3,512 43 4.86 Total Interest-Earning Assets 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 1,380,986 10,827 3.11 Noninterest-Earning Assets 68,796 84,323 122,288 100,607 88,291 Total Assets $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 $ 1,469,277 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (3) $ 278,412 $ 393 0.56 % $ 260,655 $ 111 0.17 % $ 276,603 $ 48 0.07 $ 278,546 $ 51 0.07 $ 275,411 $ 48 0.07 % Savings (3) 251,148 20 0.03 248,356 20 0.03 243,786 19 0.03 252,387 20 0.03 251,801 21 0.03 Money Market (3) 189,371 269 0.56 188,804 61 0.13 192,425 41 0.09 209,572 57 0.11 198,167 55 0.11 Time Deposits (3) 123,438 397 1.28 127,832 412 1.29 132,015 422 1.30 154,342 508 1.31 168,654 591 1.39 Total Interest-Bearing Deposits (3) 842,369 1,079 0.51 825,647 604 0.29 844,829 530 0.25 894,847 636 0.28 894,033 715 0.32 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 28,738 19 0.26 34,135 18 0.21 37,884 19 0.20 44,709 26 0.23 40,818 25 0.24 Other Borrowings 17,621 174 3.92 17,611 173 3.94 17,604 174 4.01 9,474 70 2.93 6,000 36 2.38 Total Interest-Bearing Liabilities 888,728 1,272 0.57 877,393 795 0.36 900,317 723 0.33 949,030 732 0.31 940,851 776 0.33 Noninterest-Bearing Demand Deposits 390,658 391,975 384,188 388,787 387,746 Other Liabilities 2,636 4,415 8,554 7,800 8,019 Total Liabilities 1,282,022 1,273,783 1,293,059 1,345,617 1,336,616 Stockholders' Equity 114,592 118,145 130,012 131,892 132,661 Total Liabilities and Stockholders' Equity $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 $ 1,469,277 Net Interest Income (FTE) (Non-GAAP) (4) $ 11,046 $ 10,197 $ 9,933 $ 10,272 $ 10,051 Net Interest-Earning Assets (5) 439,090 430,212 400,466 427,872 440,135 Net Interest Rate Spread (FTE) (Non-GAAP) (4) (6) 3.11 % 3.01 % 2.99 2.86 2.78 % Net Interest Margin (FTE) (Non-GAAP) (4)(7) 3.30 3.13 3.10 2.96 2.89 PPP Loans 2,424 123 20.13 5,546 144 10.41 14,673 445 12.30 29,067 391 5.34 40,313 484 4.76 (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 Nine Months Ended September 30, 2022 September 30, 2021 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) $ 1,013,871 $ 30,157 3.98 % $ 1,017,632 $ 29,872 3.92 % Debt Securities Taxable 222,132 2,878 1.73 148,718 2,124 1.90 Exempt From Federal Tax 9,093 218 3.20 12,284 282 3.06 Marketable Equity Securities 2,693 64 3.17 2,645 63 3.18 Interest Bearing Deposits at Banks 61,213 534 1.16 187,093 243 0.17 Other Interest-Earning Assets 3,165 115 4.86 3,820 141 4.93 Total Interest-Earning Assets 1,312,167 33,966 3.46 1,372,192 32,725 3.19 Noninterest-Earning Assets 91,607 87,863 Total Assets $ 1,403,774 $ 1,460,055 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (3) $ 271,897 554 0.27 % $ 270,136 181 0.09 % Savings (3) 247,790 58 0.03 246,340 78 0.04 Money Market (3) 190,189 371 0.26 198,408 223 0.15 Time Deposits (3) 127,732 1,231 1.29 177,690 2,007 1.51 Total Interest-Bearing Deposits (3) 837,608 2,214 0.35 892,574 2,489 0.37 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 33,553 56 0.22 43,745 72 0.22 Other Borrowings 17,612 522 3.96 6,396 112 2.34 Total Interest-Bearing Liabilities 888,773 2,792 0.42 942,715 2,673 0.38 Noninterest-Bearing Demand Deposits 388,964 374,865 Other Liabilities 5,177 8,293 Total Liabilities 1,282,914 1,325,873 Stockholders' Equity 120,860 134,182 Total Liabilities and Stockholders' Equity $ 1,403,774 $ 1,460,055 Net Interest Income (FTE) (Non-GAAP) (4) 31,174 30,052 Net Interest-Earning Assets (5) 423,394 429,477 Net Interest Rate Spread (FTE) (Non-GAAP) (4)(6) 3.04 % 2.81 % Net Interest Margin (FTE) (Non-GAAP) (4)(7) 3.18 2.93 PPP Loans 7,503 712 12.69 51,579 1,797 4.66 (1) Annualized based on nine 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. 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands, except share and per share data) (Unaudited) Net Income (GAAP) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Adjustments Loss (Gain) on Securities 46 199 7 (44 ) (24 ) 252 (482 ) Gain on Sale of Branches — — — (5,203 ) — — — (Gain) Loss on Disposal of Fixed Assets (439 ) — 8 — — (431 ) 3 Tax effect 83 (42 ) (3 ) 1,102 5 38 101 Non-Cash Charges: Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — 23 2 — 2,270 Tax Effect — — — — — — Adjusted Net Income (Non-GAAP) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding 5,118,627 5,156,975 5,220,887 5,314,537 5,390,128 5,165,376 5,420,792 Earnings per Common Share - Diluted (GAAP) $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 0.37 $ 1.37 $ 0.85 Adjusted Earnings per Common Share - Diluted (Non-GAAP) $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 0.36 $ 1.35 $ 1.42 Net Income (GAAP) (Numerator) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Assets (Denominator) 1,396,614 1,391,928 1,423,071 1,477,509 1,469,277 1,403,774 1,460,055 Return on Average Assets (GAAP) 1.12 % 0.03 % 0.87 % 1.87 % 0.54 % 0.68 % 0.42 % Adjusted Net Income (Non-GAAP) (Numerator) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Assets (Denominator) 1,396,614 1,391,928 1,423,071 1,477,509 1,469,277 1,407,413 1,455,368 Adjusted Return on Average Assets (Non-GAAP) 1.03 % 0.08 % 0.87 % 0.76 % 0.53 % 0.66 % 0.70 % Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands) (Unaudited) Net Income (GAAP) (Numerator) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Equity (GAAP) (Denominator) 114,592 118,145 130,012 131,892 132,661 120,860 134,182 Return on Average Equity (GAAP) 13.60 % 0.40 % 9.50 % 20.95 % 5.93 % 7.85 % 4.59 % Adjusted Net Income (Non-GAAP) (Numerator) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Equity (GAAP) (Denominator) 114,592 118,145 130,012 131,892 132,661 120,860 134,182 Adjusted Return on Average Equity (Non-GAAP) 12.53 % 0.93 % 9.54 % 8.55 % 5.88 % 7.69 % 7.65 % 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. 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 (Dollars in thousands, except share and per share data) (Unaudited) Assets (GAAP) $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 $ 1,474,818 Goodwill and Intangible Assets, Net (13,691 ) (14,136 ) (14,582 ) (15,027 ) (15,472 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,412,229 $ 1,372,325 $ 1,424,088 $ 1,410,452 $ 1,459,346 Stockholders' Equity (GAAP) $ 106,706 $ 113,772 $ 122,156 $ 133,124 $ 130,987 Goodwill and Intangible Assets, Net (13,691 ) (14,136 ) (14,582 ) (15,027 ) (15,472 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 93,015 $ 99,636 $ 107,574 $ 118,097 $ 115,515 Stockholders’ Equity to Assets (GAAP) 7.5 % 8.2 % 8.5 % 9.3 % 8.9 % Tangible Common Equity to Tangible Assets (Non-GAAP) 6.6 % 7.3 % 7.6 % 8.4 % 7.9 % Common Shares Outstanding (Denominator) 5,096,672 5,128,333 5,156,897 5,260,672 5,330,401 Book Value per Common Share (GAAP) $ 20.94 $ 22.18 $ 23.69 $ 25.31 $ 24.57 Tangible Book Value per Common Share (Non-GAAP) $ 18.25 $ 19.43 $ 20.86 $ 22.45 $ 21.67 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 12,287 $ 10,958 $ 10,616 $ 10,963 $ 10,786 $ 33,861 $ 32,594 Adjustment to FTE Basis 31 34 40 41 41 105 131 Interest Income (FTE) (Non-GAAP) 12,318 10,992 10,656 11,004 10,827 33,966 32,725 Interest Expense (GAAP) 1,272 795 723 732 776 2,792 2,673 Net Interest Income (FTE) (Non-GAAP) $ 11,046 $ 10,197 $ 9,933 $ 10,272 $ 10,051 $ 31,174 $ 30,052 Net Interest Rate Spread (GAAP) 3.10 % 3.00 % 2.98 % 2.85 % 2.77 % 3.03 % 2.80 % 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) 3.11 3.01 2.99 2.86 2.78 3.04 2.81 Net Interest Margin (GAAP) 3.29 % 3.12 % 3.08 % 2.95 % 2.88 % 3.17 % 2.92 % Adjustment to FTE Basis 0.01 0.01 0.02 0.01 0.01 0.01 0.01 Net Interest Margin (FTE) (Non-GAAP) 3.30 3.13 3.10 2.96 2.89 3.18 2.93 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands) (Unaudited) Noninterest Expense (GAAP) (Numerator) $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 9,773 $ 25,893 $ 32,890 Net Interest and Dividend Income (GAAP) $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 10,010 $ 31,069 $ 29,921 Noninterest Income (GAAP) 2,739 2,105 2,613 8,689 2,198 7,459 7,591 Operating Revenue (GAAP) (Denominator) $ 13,754 $ 12,268 $ 12,506 $ 18,920 $ 12,208 $ 38,528 $ 37,512 Efficiency Ratio (GAAP) 64.18 % 68.55 % 69.21 % 52.71 % 80.05 % 67.21 % 87.68 % Noninterest Expense (GAAP) $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 9,773 $ 25,893 $ 32,890 Less: Other Real Estate Owned (Income) (38 ) (37 ) (38 ) (30 ) (89 ) (113 ) (153 ) Amortization of Intangible Assets 445 446 445 445 446 1,336 1,481 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — 23 2 — 2,270 Adjusted Noninterest Expense (Non-GAAP) (Numerator) $ 8,420 $ 8,001 $ 8,249 $ 9,534 $ 9,414 $ 24,670 $ 28,114 Net Interest and Dividend Income (GAAP) $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 10,010 $ 31,069 $ 29,921 Noninterest Income (GAAP) 2,739 2,105 2,613 8,689 2,198 7,459 7,591 Less: Net (Loss) Gain on Securities (46 ) (199 ) (7 ) 44 24 (252 ) 482 Gain on Sale of Branches — — — 5,203 — — — Net Gain (Loss) on Disposal of Fixed Assets 439 — (8 ) — — 431 (3 ) Adjusted Noninterest Income (Non-GAAP) $ 2,346 $ 2,304 $ 2,628 $ 3,442 $ 2,174 $ 7,280 $ 7,112 Adjusted Operating Revenue (Non-GAAP) (Denominator) $ 13,361 $ 12,467 $ 12,521 $ 13,673 $ 12,184 $ 38,349 $ 37,033 Adjusted Efficiency Ratio (Non-GAAP) 63.02 % 64.18 % 65.88 % 69.73 % 77.27 % 64.33 % 75.92 % 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. 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 (Dollars in thousands) (Unaudited) Allowance for Loan Losses (Numerator) $ 12,854 $ 12,833 $ 11,595 $ 11,582 $ 11,581 Total Loans 1,042,942 $ 1,027,969 1,020,642 $ 1,020,796 $ 1,001,599 PPP Loans (768 ) (3,853 ) (8,242 ) (24,523 ) (32,703 ) Total Loans, Excluding PPP Loans (Non-GAAP) (Denominator) $ 1,042,174 $ 1,024,116 $ 1,012,400 $ 996,273 $ 968,896 Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP) 1.23 % 1.25 % 1.15 % 1.16 % 1.20 % View source version on businesswire.com: https://www.businesswire.com/news/home/20221027006040/en/Contacts Company: John H. Montgomery President and Chief Executive Officer (724) 225-2400 Investor Relations: Jeremy Hellman, Vice President The Equity Group Inc. (212) 836-9626 jhellman@equityny.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
CB Financial Services, Inc. Announces Third Quarter and Year-to-Date 2022 Financial Results and Declares Quarterly Cash Dividend By: CB Financial Services, Inc. via Business Wire October 27, 2022 at 16:15 PM EDT 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 third quarter and year-to-date 2022 financial results. Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands, except per share data) (Unaudited) Net Income (GAAP) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Non-Recurring Items (310 ) 157 12 (4,122 ) (17 ) (141 ) 3,070 Adjusted Net Income (Non-GAAP) (1) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Earnings per Common Share - Diluted (GAAP) $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 0.37 $ 1.37 $ 0.85 Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1) $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 0.36 $ 1.35 $ 1.42 (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 Third Quarter Financial Highlights (Comparisons to three months ended September 30, 2021 unless otherwise noted) Net income was $3.9 million, compared to net income of $2.0 million. Current period results were driven by net Interest Margin expansion coupled with a reduction of noninterest expense of $946,000 for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. Adjusted net income (Non-GAAP) was $3.6 million, compared to $2.0 million. Earnings per diluted common share (EPS) increased to $0.77 from $0.37. Adjusted earnings per common share - diluted (Non-GAAP) was $0.71, compared to $0.36. Return on average assets (annualized) of 1.12%, compared to average assets (annualized) of 0.54%. Adjusted return on average assets (annualized) (Non-GAAP) of 1.03%, compared to 0.53%. Return on average equity (annualized) of 13.60%, compared to 5.93% (annualized). Adjusted return on average equity (annualized) (Non-GAAP) of 12.53%, compared to 5.88%. Net interest margin (NIM) improved to 3.29% from 2.88%. Net interest and dividend income was $11.0 million, compared to $10.0 million. Noninterest income increased to $2.7 million, compared to $2.2 million. The most significant changes in noninterest income were a $439,000 gain recognized as a result of the sale of assets of two former branch locations that were part of our consolidation measures and an increase of $174,000 in insurance commissions. The increase in insurance commissions was primarily driven by contingency income which resulted from the higher than lock-in amounts received and core business including commercial and personal insurance lines. (Amounts at September 30, 2022; comparisons to December 31, 2021, unless otherwise noted) Total loans, including Payroll Protection Program (“PPP”) loans, were $1.04 billion, an increase of $22.1 million from $1.02 billion. Total loans held for investment, excluding PPP loans, increased $45.9 million, or 6.1% annualized, to $1.04 billion compared to $996.3 million, and included increases of $28.5 million, or 31.1% annualized, in consumer loans, and $40.4 million, or 13.8% annualized, growth in commercial real estate loans, partially offset by decreases of $35.5 million in construction real estate and $26.8 million in commercial and industrial loans. Compared to September 30, 2021, loans held for investment, excluding PPP loans, increased $73.3 million, or 7.6%, primarily from increases of $52.9 million in commercial real estate loans and $38.5 million in consumer loans as noted above, partially offset by decreases of $28.6 million in construction real estate loans and $40.2 million in commercial and industrial loans. Nonperforming loans to total loans was 0.56%, a decrease of 15 basis points (“bps”), compared to 0.71%. Total deposits were $1.28 billion, an increase of $49.2 million, compared to $1.23 billion. Total assets remained level at $1.43 billion. Book value per share was $20.94, compared to $22.18 as of June 30, 2022 and $25.31 as of December 31, 2021. Tangible book value per share (Non-GAAP) decreased to $18.25, compared to $19.43 as of June 30, 2022 and $22.45 as of December 31, 2021, reflecting impact to Accumulated Other Comprehensive Income from unrealized losses on securities portfolios. Management Commentary President and CEO John H. Montgomery stated, “We delivered solid third quarter results, driven by continued growth in our loan portfolio coupled with expanded margins and expense control. Rising interest rates underpinned a 17 basis point expansion of our net interest margin compared with the second quarter and a 41 basis point improvement from the year-ago quarter. Noninterest expense continued to run at levels well below last year’s amounts due to the optimization efforts we undertook during 2021. As a result, our Adjusted Efficiency Ratio during the third quarter was 63.0%, compared with 77.3% a year ago. While the Federal Reserve has made it clear they will accept a recession in order to control inflation, we continue to believe the southwestern Pennsylvania market in which we operate possesses a variety of demographic attributes that have muted economic volatility in the past. In addition, we have a veteran credit team with successful experience underwriting through the last recession.” Mr. Montgomery continued, “We remain focused on growing our business and have continued to make targeted additions to our team to do so. During the third quarter we added a business banking team and are also in the process of adding to our commercial banking team. We are very excited to have these new team members come aboard and look forward to their contributions. Continuing our commitment to CB shareholders, we repurchased 30,271 shares during the third quarter under the current $10.0 million share repurchase program announced last quarter, in addition to payment of our regular quarterly dividend of $0.24 per share. 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 declared a $0.24 quarterly cash dividend per outstanding share of common stock, payable on or about November 30, 2022, to stockholders of record as of the close of business on November 18, 2022. 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 on October 19, 2022, the repurchase program, if fully completed, would encompass 461,463 shares, or approximately 9.1% of the shares currently outstanding. 2022 Third Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.0 million, or 10.0%, to $11.0 million for the three months ended September 30, 2022 compared to $10.0 million for the three months ended September 30, 2021. Net interest margin (GAAP) increased to 3.29% for the three months ended September 30, 2022 compared to 2.88% for the three months ended September 30, 2021. Fully Tax Equivalent (“FTE”) net interest margin (Non-GAAP) increased 41 bps to 3.30% for the three months ended September 30, 2022 compared to 2.89% for the three months ended September 30, 2021. Interest and dividend income increased $1.5 million, or 13.9%, to $12.3 million for the three months ended September 30, 2022 compared to $10.8 million for the three months ended September 30, 2021. Interest income on loans increased $1.1 million, or 11.3%, to $10.8 million for the three months ended September 30, 2022 compared to $9.7 million for the three months ended September 30, 2021. The average balance of loans increased $19.9 million to $1.02 billion from $1.00 billion and the average yield increased 35 bps to 4.20% compared to 3.85%. Interest and fee income on PPP loans was $123,000 for the three months ended September 30, 2022 and contributed 4 bps to loan yield, compared to $484,000 for the three months ended September 30, 2021, which contributed 4 bps to loan yield. The impact of the accretion of the credit mark on acquired loan portfolios was $47,000 for the three months ended September 30, 2022 compared to $94,000 for the three months ended September 30, 2021, or 2 bps in the current period compared to 4 bps in the prior period. Interest income on taxable investment securities increased $142,000, or 16.8%, to $985,000 for the three months ended September 30, 2022 compared to $843,000 for the three months ended September 30, 2021 driven by a $24.3 million increase in average balance partially coupled with a 6 bps increase in average yield. Interest expense increased $496,000, or 63.9%, to $1.3 million for the three months ended September 30, 2022 compared to $776,000 for the three months ended September 30, 2021. Interest expense on deposits increased $364,000, or 50.9%, to $1.1 million for the three months ended September 30, 2022 compared to $715,000 for the three months ended September 30, 2021. While average interest-earning deposit balances decreased $51.7 million, or 5.8%, to $842.4 million as of September 30, 2022 compared to $894.0 million as of September 30, 2021 , rising interest rates led to the repricing of higher-cost demand and money market deposits and resulted in a 19 bps, or 59.9%, increase in average cost compared to the three months ended September 30, 2021. In addition, the average balance of time deposits and the related average cost decreased $45.2 million and 11 bps, respectively. These decreases are partially offset by an increase in average other borrowings of $11.6 million or 193.7% to $17.6 million as of September 30, 2022 compared to $6.0 million as of September 30, 2021, which was driven by an increase in subordinated debt balance. Provision for Loan Losses There was no provision for loan losses for the three months ended September 30, 2022 or for the three months ended September 30, 2021. Noninterest income Noninterest income increased $541,000, or 24.6%, to $2.7 million for the three months ended September 30, 2022, compared to $2.2 million for the three months ended September 30, 2021. The increase was largely due to a gain of $439,000 on the disposal of fixed assets during the three months ended September 30, 2022 due to the sale of the land and buildings of the former Pioneer and Bellaire bank branches. During the quarter, the Bank also recorded a $174,000 increase in insurance commissions. The increase in insurance commissions was primarily driven by contingency income which resulted from the higher than lock-in amounts received and core business including commercial and personal insurance lines. In addition, net gain on sale of loans decreased $49,000 as there were no loans sold during the three months ended September 30, 2022. Noninterest Expense Noninterest expense decreased $946,000, or 9.7%, to $8.8 million for the three months ended September 30, 2022 compared to $9.8 million for the three months ended September 30, 2021. Salaries and benefits decreased $48,000 and contracted services decreased $1.2 million to $288,000 for the three months ended September 30, 2022 compared to $1.4 million for the three months ended September 30, 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 $153,000. Statement of Financial Condition Review Assets Total assets increased $441,000, or 0.03%, to $1.43 billion at both September 30, 2022, and December 31, 2021. Cash and due from banks increased $3.1 million, or 2.6%, to $122.8 million at September 30, 2022, compared to $119.7 million at December 31, 2021. The change is primarily due to an increase in deposits as further described below in the Liabilities section. Securities decreased $31.1 million, or 13.8%, to $193.8 million at September 30, 2022, compared to $225.0 million at December 31, 2021. Current period activity included $26.8 million of purchases, and $24.9 million of pay downs. The purchases were made to earn a higher yield on excess cash. In addition, there was a $32.8 million decrease in the market value of the debt securities portfolio, primarily due to the increase in market interest rates, and a $252,000 decline in market value in the equity securities portfolio, which is primarily comprised of bank stocks. Payroll Protection Program Update PPP loans decreased $23.8 million to $768,000 at September 30, 2022 compared to $24.5 million at December 31, 2021. $27,000 of net PPP loan origination fees were unearned at September 30, 2022 compared to $678,000 at December 31, 2021. $117,000 of net PPP loan origination fees were earned in the three months ended September 30, 2022 compared to $130,000 for the three months ended June 30, 2022. Loans and Credit Quality Total loans held for investment increased $22.1 million, or 2.17%, to $1.04 billion at September 30, 2022 compared to $1.02 billion at December 31, 2021. Excluding the net decline of $23.8 million in PPP loans in the current period, loans increased $45.9 million. The allowance for loan losses was $12.9 million at September 30, 2022 and $11.6 million at December 31, 2021. As a result, the allowance for loan losses to total loans was 1.23% at September 30, 2022 compared to 1.13% at December 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.23% at September 30, 2022 compared to 1.16% at December 31, 2021. The change in the allowance for loan losses was primarily due to adjustments to historical loss factors and changes in qualitative factors in particular economic and industry conditions since December 31, 2021. Net recoveries for the three months ended September 30, 2022 were $21,000, or 0.01% of average loans on an annualized basis. Net recoveries for the three months ended September 30, 2021 were $37,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the nine months ended September 30, 2022 were $2.5 million, or 0.33% of average loans on an annualized basis. Net recoveries for the nine months ended September 30, 2021 were $10,000, and had an immaterial effect on ratios for the period. Nonperforming loans, which includes nonaccrual loans, accruing loans past due 90 days or more, and accruing loans that are considered troubled debt restructurings, were $5.9 million at September 30, 2022 compared to $7.3 million at December 31, 2021. Current nonperforming loans to total loans ratio was 0.56% compared to 0.71% at December 31, 2021. Other Intangible assets decreased $1.3 million, or 24.6%, to $4.0 million at September 30, 2022 compared to $5.3 million at December 31, 2021 due to amortization expense recognized during the period. Accrued interest receivable and other assets increased $8.8 million, or 68.4%; to $21.7 million at September 30, 2022, compared to $12.9 million at December 31, 2021. This change was primarily driven by deferred taxes as a result of the increase in market interest rate conditions and the corresponding decrease in the market value of the mostly fixed rate securities portfolio. Liabilities Total liabilities increased $26.9 million, or 2.1%, to $1.32 billion at September 30, 2022 compared to $1.29 billion at December 31, 2021. Deposits Total deposits increased $49.2 million to $1.28 billion as of September 30, 2022 compared to $1.23 billion at December 31, 2021, an annualized increase of 5.3%. Interest-bearing and non interest-bearing demand deposits increased $26.2 million and $15.8 million, respectively, partially offset by a decrease in time deposits of $15.8 million. Average total deposits increased $15.4 million, primarily in both interest-bearing and non interest -bearing demand deposits for the three months ended September 30, 2022 compared to the three months ended June 30, 2022, Borrowed Funds Short-term borrowings decreased $21.2 million, or 53.9%, to $18.1 million at September 30, 2022, compared to $39.3 million at December 31, 2021. At September 30, 2022 and December 31, 2021, short-term borrowings were comprised entirely of securities sold under agreements to repurchase, which are related to business deposit customers whose funds, above designated target balances, are transferred into an overnight interest-earning investment account by purchasing securities from the Bank’s investment portfolio under an agreement to repurchase. A portion of this decrease is due to accounts that were being transitioned into other deposit products and account for most of the interest-bearing demand deposit increase. Stockholders’ Equity Stockholders’ equity decreased $26.4 million, or 19.8%, to $106.7 million at September 30, 2022, compared to $133.1 million at December 31, 2021. Since December 31, 2021, the Company has paid $3.7 million in dividends. 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 57,710 shares at an average price of $22.51 per share since the inception of the plan. In total, the Company has repurchased $4.7 million since December 31, 2021. In addition, accumulated other comprehensive loss increased $25.7 million primarily due to the effect of rising market interest rates on the Bank’s debt securities. This was partially offset by $7.1 million of net income. Book value per share Book value per common share was $20.94 at September 30, 2022 compared to $25.31 at December 31, 2021, a decrease of $4.37. Tangible book value per common share (Non-GAAP) was $18.25 at September 30, 2022, compared to $22.45 at December 31, 2021, a decrease of $4.20. 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 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Assets Cash and Due From Banks $ 122,801 $ 81,121 $ 123,588 $ 119,674 $ 173,523 Securities 193,846 213,505 231,097 224,974 221,351 Loans Held for Sale — — — — 17,407 Loans Real Estate: Residential 328,248 325,138 317,254 320,798 317,373 Commercial 432,516 426,105 427,227 392,124 379,621 Construction 49,502 41,277 54,227 85,028 78,075 Commercial and Industrial Commercial and Industrial 61,428 62,054 59,601 64,487 69,657 PPP 768 3,853 8,242 24,523 32,703 Consumer 150,615 148,921 143,422 122,152 112,087 Other 19,865 20,621 10,669 11,684 12,083 Total Loans 1,042,942 1,027,969 1,020,642 1,020,796 1,001,599 Allowance for Loan Losses (12,854 ) (12,833 ) (11,595 ) (11,582 ) (11,581 ) Loans, Net 1,030,088 1,015,136 1,009,047 1,009,214 990,018 Premises and Equipment Held for Sale — — — — 795 Premises and Equipment, Net 18,064 18,196 18,349 18,399 18,502 Bank-Owned Life Insurance 25,750 25,610 25,468 25,332 25,190 Goodwill 9,732 9,732 9,732 9,732 9,732 Intangible Assets, Net 3,959 4,404 4,850 5,295 5,740 Accrued Interest and Other Assets 21,680 18,757 16,539 12,859 12,560 Total Assets $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 $ 1,474,818 Liabilities Deposits Held for Sale $ — $ — $ — $ — $ 102,647 Deposits Non-Interest Bearing Demand Deposits 407,107 389,127 400,105 385,775 373,320 Interest Bearing Demand Accounts 298,755 265,347 280,455 272,518 244,004 Money Market Accounts 198,715 185,308 192,929 192,125 190,426 Savings Accounts 250,378 250,226 247,589 239,482 232,679 Time Deposits 120,879 125,182 129,235 136,713 144,727 Total Deposits 1,275,834 1,215,190 1,250,313 1,226,613 1,185,156 Short-Term Borrowings 18,108 32,178 39,219 39,266 42,623 Other Borrowings 17,627 17,618 17,607 17,601 6,000 Accrued Interest Payable and Other Liabilities 7,645 7,703 9,375 8,875 7,405 Total Liabilities 1,319,214 1,272,689 1,316,514 1,292,355 1,343,831 Stockholders’ Equity $ 106,706 $ 113,772 $ 122,156 $ 133,124 $ 130,987 Total Liabilities and Stockholders’ Equity $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 $ 1,474,818 Three Months Ended Nine Months Ended Selected Operating Data 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Interest and Dividend Income Loans, Including Fees $ 10,815 $ 9,733 $ 9,551 $ 9,904 $ 9,718 $ 30,098 $ 29,800 Securities: Taxable 985 988 905 866 843 2,878 2,124 Tax-Exempt 49 57 66 66 71 172 223 Dividends 21 20 22 21 19 64 63 Other Interest and Dividend Income 417 160 72 106 135 649 384 Total Interest and Dividend Income 12,287 10,958 10,616 10,963 10,786 33,861 32,594 Interest Expense Deposits 1,079 604 530 636 715 2,214 2,489 Short-Term Borrowings 19 18 19 26 25 56 72 Other Borrowings 174 173 174 70 36 522 112 Total Interest Expense 1,272 795 723 732 776 2,792 2,673 Net Interest and Dividend Income 11,015 10,163 9,893 10,231 10,010 31,069 29,921 Provision (Recovery) for Loan Losses — 3,784 — 75 — 3,784 (1,200 ) Net Interest and Dividend Income After Provision (Recovery) for Loan Losses 11,015 6,379 9,893 10,156 10,010 27,285 31,121 Noninterest Income: Service Fees 544 559 526 569 602 1,629 1,762 Insurance Commissions 1,368 1,369 1,798 1,618 1,194 4,535 3,998 Other Commissions 244 179 89 90 93 512 431 Net Gain on Sales of Loans — — — 977 49 — 166 Net (Loss) Gain on Securities (46 ) (199 ) (7 ) 44 24 (252 ) 482 Net Gain on Purchased Tax Credits 14 14 14 17 18 43 53 Gain on Sale of Branches — — — 5,203 — — — Net Gain (Loss) on Disposal of Fixed Assets 439 — (8 ) — — 431 (3 ) Income from Bank-Owned Life Insurance 140 142 136 142 138 418 411 Other Income 36 41 65 29 80 143 291 Total Noninterest Income 2,739 2,105 2,613 8,689 2,198 7,459 7,591 Noninterest Expense: Salaries and Employee Benefits 4,739 4,539 4,565 5,181 4,787 13,843 14,757 Occupancy 768 776 686 619 615 2,230 2,349 Equipment 170 182 210 252 205 561 782 Data Processing 540 446 485 488 541 1,471 1,666 FDIC Assessment 147 128 209 222 293 484 792 PA Shares Tax 240 240 240 173 224 721 714 Contracted Services 288 348 587 1,133 1,441 1,223 2,878 Legal and Professional Fees 334 389 152 206 180 876 788 Advertising 131 115 116 191 225 362 558 Other Real Estate Owned (Income) (38 ) (37 ) (38 ) (30 ) (89 ) (113 ) (153 ) Amortization of Intangible Assets 445 446 445 445 446 1,336 1,481 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown of Fixed Assets — — — 23 2 — 2,270 Other 1,063 838 999 1,069 903 2,899 2,830 Total Noninterest Expense 8,827 8,410 8,656 9,972 9,773 25,893 32,890 Income Before Income Tax Expense (Benefit) 4,927 74 3,850 8,873 2,435 8,851 5,822 Income Tax Expense (Benefit) 998 (44 ) 803 1,908 452 1,757 1,217 Net Income $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Three Months Ended Nine Months Ended Per Common Share Data 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.72 $ 0.72 Earnings Per Common Share - Basic 0.77 0.02 0.59 1.32 0.37 1.38 0.85 Earnings Per Common Share - Diluted 0.77 0.02 0.58 1.31 0.37 1.37 0.85 Adjusted Earnings Per Common Share - Diluted (Non-GAAP) (1) 0.71 0.05 0.59 0.53 0.36 1.35 1.42 Weighted Average Common Shares Outstanding - Basic 5,106,861 5,147,846 5,198,194 5,291,795 5,373,032 5,150,632 5,412,989 Weighted Average Common Shares Outstanding - Diluted 5,118,627 5,156,975 5,220,887 5,314,537 5,390,128 5,165,376 5,420,792 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Common Shares Outstanding 5,096,672 5,128,333 5,156,897 5,260,672 5,330,401 Book Value Per Common Share $ 20.94 $ 22.18 $ 23.69 $ 25.31 $ 24.57 Tangible Book Value per Common Share (1) 18.25 19.43 20.86 22.45 21.67 Stockholders’ Equity to Assets 7.5 % 8.2 % 8.5 % 9.3 % 8.9 % Tangible Common Equity to Tangible Assets (1) 6.6 7.3 7.6 8.4 7.9 Three Months Ended Nine Months Ended Selected Financial Ratios (2) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Return on Average Assets 1.12 % 0.03 % 0.87 % 1.87 % 0.54 % 0.68 % 0.42 % Adjusted Return on Average Assets (1) 1.03 0.08 0.87 0.76 0.53 0.66 0.70 Return on Average Equity 13.60 0.40 9.50 20.95 5.93 7.85 4.59 Adjusted Return on Average Equity (1) 12.53 0.93 9.54 8.55 5.88 7.69 7.65 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 149.41 149.03 144.48 145.09 146.78 147.64 145.56 Average Equity to Average Assets 8.20 8.49 9.14 8.93 9.03 8.61 9.19 Net Interest Rate Spread 3.10 3.00 2.98 2.85 2.77 3.03 2.80 Net Interest Rate Spread (FTE) (1) 3.11 3.01 2.99 2.86 2.78 3.04 2.81 Net Interest Margin 3.29 3.12 3.08 2.95 2.88 3.17 2.92 Net Interest Margin (FTE) (1) 3.30 3.13 3.10 2.96 2.89 3.18 2.93 Net (Recoveries) Charge-offs to Average Loans (0.01 ) 1.01 (0.01 ) 0.03 (0.01 ) 0.33 — Efficiency Ratio 64.18 68.55 69.21 52.71 80.05 67.21 87.68 Adjusted Efficiency Ratio (1) 63.02 64.18 65.88 69.73 77.27 64.33 75.92 Asset Quality Ratios 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Allowance for Loan Losses to Total Loans 1.23 % 1.25 % 1.14 % 1.13 % 1.16 % Allowance for Loan Losses to Total Loans, Excluding PPP Loans(1) 1.23 1.25 1.15 1.16 1.20 Allowance for Loan Losses to Nonperforming Loans (3) 218.61 219.89 158.88 159.40 106.18 Allowance for Loan Losses to Noncurrent Loans (4) 318.96 329.47 218.28 233.37 135.37 Delinquent and Nonaccrual Loans to Total Loans (4) (5) 0.46 0.45 0.79 0.78 0.97 Nonperforming Loans to Total Loans (3) 0.56 0.57 0.72 0.71 1.09 Noncurrent Loans to Total Loans (4) 0.39 0.38 0.52 0.49 0.85 Nonperforming Assets to Total Assets (6) 0.41 0.42 0.51 0.51 0.74 Capital Ratios (7) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.02 % 11.83 % 11.99 % 11.95 % 11.53 % Tier 1 Capital (to Risk Weighted Assets) 12.02 11.83 11.99 11.95 11.53 Total Capital (to Risk Weighted Assets) 13.27 13.08 13.20 13.18 12.77 Tier 1 Leverage (to Adjusted Total Assets) 8.51 8.33 8.19 7.76 7.38 (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 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 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) $ 1,024,363 $ 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 % $ 1,004,474 $ 9,740 3.85 % Debt Securities Taxable 222,110 985 1.77 228,315 988 1.73 215,906 905 1.68 205,328 866 1.69 197,763 843 1.71 Exempt From Federal Tax 7,998 62 3.10 9,109 73 3.21 10,195 84 3.30 10,477 84 3.21 11,647 90 3.09 Equity Securities 2,693 21 3.12 2,693 20 2.97 2,693 22 3.27 2,693 21 3.12 2,655 19 2.86 Interest Bearing Deposits at Banks 67,870 378 2.23 56,379 122 0.87 59,296 33 0.22 150,102 61 0.16 160,935 92 0.23 Other Interest-Earning Assets 2,784 39 5.56 3,235 38 4.71 3,483 39 4.54 3,475 45 5.14 3,512 43 4.86 Total Interest-Earning Assets 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 1,380,986 10,827 3.11 Noninterest-Earning Assets 68,796 84,323 122,288 100,607 88,291 Total Assets $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 $ 1,469,277 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (3) $ 278,412 $ 393 0.56 % $ 260,655 $ 111 0.17 % $ 276,603 $ 48 0.07 $ 278,546 $ 51 0.07 $ 275,411 $ 48 0.07 % Savings (3) 251,148 20 0.03 248,356 20 0.03 243,786 19 0.03 252,387 20 0.03 251,801 21 0.03 Money Market (3) 189,371 269 0.56 188,804 61 0.13 192,425 41 0.09 209,572 57 0.11 198,167 55 0.11 Time Deposits (3) 123,438 397 1.28 127,832 412 1.29 132,015 422 1.30 154,342 508 1.31 168,654 591 1.39 Total Interest-Bearing Deposits (3) 842,369 1,079 0.51 825,647 604 0.29 844,829 530 0.25 894,847 636 0.28 894,033 715 0.32 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 28,738 19 0.26 34,135 18 0.21 37,884 19 0.20 44,709 26 0.23 40,818 25 0.24 Other Borrowings 17,621 174 3.92 17,611 173 3.94 17,604 174 4.01 9,474 70 2.93 6,000 36 2.38 Total Interest-Bearing Liabilities 888,728 1,272 0.57 877,393 795 0.36 900,317 723 0.33 949,030 732 0.31 940,851 776 0.33 Noninterest-Bearing Demand Deposits 390,658 391,975 384,188 388,787 387,746 Other Liabilities 2,636 4,415 8,554 7,800 8,019 Total Liabilities 1,282,022 1,273,783 1,293,059 1,345,617 1,336,616 Stockholders' Equity 114,592 118,145 130,012 131,892 132,661 Total Liabilities and Stockholders' Equity $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 $ 1,469,277 Net Interest Income (FTE) (Non-GAAP) (4) $ 11,046 $ 10,197 $ 9,933 $ 10,272 $ 10,051 Net Interest-Earning Assets (5) 439,090 430,212 400,466 427,872 440,135 Net Interest Rate Spread (FTE) (Non-GAAP) (4) (6) 3.11 % 3.01 % 2.99 2.86 2.78 % Net Interest Margin (FTE) (Non-GAAP) (4)(7) 3.30 3.13 3.10 2.96 2.89 PPP Loans 2,424 123 20.13 5,546 144 10.41 14,673 445 12.30 29,067 391 5.34 40,313 484 4.76 (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 Nine Months Ended September 30, 2022 September 30, 2021 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) $ 1,013,871 $ 30,157 3.98 % $ 1,017,632 $ 29,872 3.92 % Debt Securities Taxable 222,132 2,878 1.73 148,718 2,124 1.90 Exempt From Federal Tax 9,093 218 3.20 12,284 282 3.06 Marketable Equity Securities 2,693 64 3.17 2,645 63 3.18 Interest Bearing Deposits at Banks 61,213 534 1.16 187,093 243 0.17 Other Interest-Earning Assets 3,165 115 4.86 3,820 141 4.93 Total Interest-Earning Assets 1,312,167 33,966 3.46 1,372,192 32,725 3.19 Noninterest-Earning Assets 91,607 87,863 Total Assets $ 1,403,774 $ 1,460,055 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (3) $ 271,897 554 0.27 % $ 270,136 181 0.09 % Savings (3) 247,790 58 0.03 246,340 78 0.04 Money Market (3) 190,189 371 0.26 198,408 223 0.15 Time Deposits (3) 127,732 1,231 1.29 177,690 2,007 1.51 Total Interest-Bearing Deposits (3) 837,608 2,214 0.35 892,574 2,489 0.37 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 33,553 56 0.22 43,745 72 0.22 Other Borrowings 17,612 522 3.96 6,396 112 2.34 Total Interest-Bearing Liabilities 888,773 2,792 0.42 942,715 2,673 0.38 Noninterest-Bearing Demand Deposits 388,964 374,865 Other Liabilities 5,177 8,293 Total Liabilities 1,282,914 1,325,873 Stockholders' Equity 120,860 134,182 Total Liabilities and Stockholders' Equity $ 1,403,774 $ 1,460,055 Net Interest Income (FTE) (Non-GAAP) (4) 31,174 30,052 Net Interest-Earning Assets (5) 423,394 429,477 Net Interest Rate Spread (FTE) (Non-GAAP) (4)(6) 3.04 % 2.81 % Net Interest Margin (FTE) (Non-GAAP) (4)(7) 3.18 2.93 PPP Loans 7,503 712 12.69 51,579 1,797 4.66 (1) Annualized based on nine 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. 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands, except share and per share data) (Unaudited) Net Income (GAAP) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Adjustments Loss (Gain) on Securities 46 199 7 (44 ) (24 ) 252 (482 ) Gain on Sale of Branches — — — (5,203 ) — — — (Gain) Loss on Disposal of Fixed Assets (439 ) — 8 — — (431 ) 3 Tax effect 83 (42 ) (3 ) 1,102 5 38 101 Non-Cash Charges: Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — 23 2 — 2,270 Tax Effect — — — — — — Adjusted Net Income (Non-GAAP) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding 5,118,627 5,156,975 5,220,887 5,314,537 5,390,128 5,165,376 5,420,792 Earnings per Common Share - Diluted (GAAP) $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 0.37 $ 1.37 $ 0.85 Adjusted Earnings per Common Share - Diluted (Non-GAAP) $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 0.36 $ 1.35 $ 1.42 Net Income (GAAP) (Numerator) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Assets (Denominator) 1,396,614 1,391,928 1,423,071 1,477,509 1,469,277 1,403,774 1,460,055 Return on Average Assets (GAAP) 1.12 % 0.03 % 0.87 % 1.87 % 0.54 % 0.68 % 0.42 % Adjusted Net Income (Non-GAAP) (Numerator) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Assets (Denominator) 1,396,614 1,391,928 1,423,071 1,477,509 1,469,277 1,407,413 1,455,368 Adjusted Return on Average Assets (Non-GAAP) 1.03 % 0.08 % 0.87 % 0.76 % 0.53 % 0.66 % 0.70 % Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands) (Unaudited) Net Income (GAAP) (Numerator) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Equity (GAAP) (Denominator) 114,592 118,145 130,012 131,892 132,661 120,860 134,182 Return on Average Equity (GAAP) 13.60 % 0.40 % 9.50 % 20.95 % 5.93 % 7.85 % 4.59 % Adjusted Net Income (Non-GAAP) (Numerator) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Equity (GAAP) (Denominator) 114,592 118,145 130,012 131,892 132,661 120,860 134,182 Adjusted Return on Average Equity (Non-GAAP) 12.53 % 0.93 % 9.54 % 8.55 % 5.88 % 7.69 % 7.65 % 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. 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 (Dollars in thousands, except share and per share data) (Unaudited) Assets (GAAP) $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 $ 1,474,818 Goodwill and Intangible Assets, Net (13,691 ) (14,136 ) (14,582 ) (15,027 ) (15,472 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,412,229 $ 1,372,325 $ 1,424,088 $ 1,410,452 $ 1,459,346 Stockholders' Equity (GAAP) $ 106,706 $ 113,772 $ 122,156 $ 133,124 $ 130,987 Goodwill and Intangible Assets, Net (13,691 ) (14,136 ) (14,582 ) (15,027 ) (15,472 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 93,015 $ 99,636 $ 107,574 $ 118,097 $ 115,515 Stockholders’ Equity to Assets (GAAP) 7.5 % 8.2 % 8.5 % 9.3 % 8.9 % Tangible Common Equity to Tangible Assets (Non-GAAP) 6.6 % 7.3 % 7.6 % 8.4 % 7.9 % Common Shares Outstanding (Denominator) 5,096,672 5,128,333 5,156,897 5,260,672 5,330,401 Book Value per Common Share (GAAP) $ 20.94 $ 22.18 $ 23.69 $ 25.31 $ 24.57 Tangible Book Value per Common Share (Non-GAAP) $ 18.25 $ 19.43 $ 20.86 $ 22.45 $ 21.67 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 12,287 $ 10,958 $ 10,616 $ 10,963 $ 10,786 $ 33,861 $ 32,594 Adjustment to FTE Basis 31 34 40 41 41 105 131 Interest Income (FTE) (Non-GAAP) 12,318 10,992 10,656 11,004 10,827 33,966 32,725 Interest Expense (GAAP) 1,272 795 723 732 776 2,792 2,673 Net Interest Income (FTE) (Non-GAAP) $ 11,046 $ 10,197 $ 9,933 $ 10,272 $ 10,051 $ 31,174 $ 30,052 Net Interest Rate Spread (GAAP) 3.10 % 3.00 % 2.98 % 2.85 % 2.77 % 3.03 % 2.80 % 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) 3.11 3.01 2.99 2.86 2.78 3.04 2.81 Net Interest Margin (GAAP) 3.29 % 3.12 % 3.08 % 2.95 % 2.88 % 3.17 % 2.92 % Adjustment to FTE Basis 0.01 0.01 0.02 0.01 0.01 0.01 0.01 Net Interest Margin (FTE) (Non-GAAP) 3.30 3.13 3.10 2.96 2.89 3.18 2.93 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands) (Unaudited) Noninterest Expense (GAAP) (Numerator) $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 9,773 $ 25,893 $ 32,890 Net Interest and Dividend Income (GAAP) $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 10,010 $ 31,069 $ 29,921 Noninterest Income (GAAP) 2,739 2,105 2,613 8,689 2,198 7,459 7,591 Operating Revenue (GAAP) (Denominator) $ 13,754 $ 12,268 $ 12,506 $ 18,920 $ 12,208 $ 38,528 $ 37,512 Efficiency Ratio (GAAP) 64.18 % 68.55 % 69.21 % 52.71 % 80.05 % 67.21 % 87.68 % Noninterest Expense (GAAP) $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 9,773 $ 25,893 $ 32,890 Less: Other Real Estate Owned (Income) (38 ) (37 ) (38 ) (30 ) (89 ) (113 ) (153 ) Amortization of Intangible Assets 445 446 445 445 446 1,336 1,481 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — 23 2 — 2,270 Adjusted Noninterest Expense (Non-GAAP) (Numerator) $ 8,420 $ 8,001 $ 8,249 $ 9,534 $ 9,414 $ 24,670 $ 28,114 Net Interest and Dividend Income (GAAP) $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 10,010 $ 31,069 $ 29,921 Noninterest Income (GAAP) 2,739 2,105 2,613 8,689 2,198 7,459 7,591 Less: Net (Loss) Gain on Securities (46 ) (199 ) (7 ) 44 24 (252 ) 482 Gain on Sale of Branches — — — 5,203 — — — Net Gain (Loss) on Disposal of Fixed Assets 439 — (8 ) — — 431 (3 ) Adjusted Noninterest Income (Non-GAAP) $ 2,346 $ 2,304 $ 2,628 $ 3,442 $ 2,174 $ 7,280 $ 7,112 Adjusted Operating Revenue (Non-GAAP) (Denominator) $ 13,361 $ 12,467 $ 12,521 $ 13,673 $ 12,184 $ 38,349 $ 37,033 Adjusted Efficiency Ratio (Non-GAAP) 63.02 % 64.18 % 65.88 % 69.73 % 77.27 % 64.33 % 75.92 % 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. 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 (Dollars in thousands) (Unaudited) Allowance for Loan Losses (Numerator) $ 12,854 $ 12,833 $ 11,595 $ 11,582 $ 11,581 Total Loans 1,042,942 $ 1,027,969 1,020,642 $ 1,020,796 $ 1,001,599 PPP Loans (768 ) (3,853 ) (8,242 ) (24,523 ) (32,703 ) Total Loans, Excluding PPP Loans (Non-GAAP) (Denominator) $ 1,042,174 $ 1,024,116 $ 1,012,400 $ 996,273 $ 968,896 Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP) 1.23 % 1.25 % 1.15 % 1.16 % 1.20 % View source version on businesswire.com: https://www.businesswire.com/news/home/20221027006040/en/Contacts Company: John H. Montgomery President and Chief Executive Officer (724) 225-2400 Investor Relations: Jeremy Hellman, Vice President The Equity Group Inc. (212) 836-9626 jhellman@equityny.com
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 third quarter and year-to-date 2022 financial results. Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands, except per share data) (Unaudited) Net Income (GAAP) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Non-Recurring Items (310 ) 157 12 (4,122 ) (17 ) (141 ) 3,070 Adjusted Net Income (Non-GAAP) (1) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Earnings per Common Share - Diluted (GAAP) $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 0.37 $ 1.37 $ 0.85 Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1) $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 0.36 $ 1.35 $ 1.42 (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 Third Quarter Financial Highlights (Comparisons to three months ended September 30, 2021 unless otherwise noted) Net income was $3.9 million, compared to net income of $2.0 million. Current period results were driven by net Interest Margin expansion coupled with a reduction of noninterest expense of $946,000 for the three months ended September 30, 2022 compared to the three months ended September 30, 2021. Adjusted net income (Non-GAAP) was $3.6 million, compared to $2.0 million. Earnings per diluted common share (EPS) increased to $0.77 from $0.37. Adjusted earnings per common share - diluted (Non-GAAP) was $0.71, compared to $0.36. Return on average assets (annualized) of 1.12%, compared to average assets (annualized) of 0.54%. Adjusted return on average assets (annualized) (Non-GAAP) of 1.03%, compared to 0.53%. Return on average equity (annualized) of 13.60%, compared to 5.93% (annualized). Adjusted return on average equity (annualized) (Non-GAAP) of 12.53%, compared to 5.88%. Net interest margin (NIM) improved to 3.29% from 2.88%. Net interest and dividend income was $11.0 million, compared to $10.0 million. Noninterest income increased to $2.7 million, compared to $2.2 million. The most significant changes in noninterest income were a $439,000 gain recognized as a result of the sale of assets of two former branch locations that were part of our consolidation measures and an increase of $174,000 in insurance commissions. The increase in insurance commissions was primarily driven by contingency income which resulted from the higher than lock-in amounts received and core business including commercial and personal insurance lines. (Amounts at September 30, 2022; comparisons to December 31, 2021, unless otherwise noted) Total loans, including Payroll Protection Program (“PPP”) loans, were $1.04 billion, an increase of $22.1 million from $1.02 billion. Total loans held for investment, excluding PPP loans, increased $45.9 million, or 6.1% annualized, to $1.04 billion compared to $996.3 million, and included increases of $28.5 million, or 31.1% annualized, in consumer loans, and $40.4 million, or 13.8% annualized, growth in commercial real estate loans, partially offset by decreases of $35.5 million in construction real estate and $26.8 million in commercial and industrial loans. Compared to September 30, 2021, loans held for investment, excluding PPP loans, increased $73.3 million, or 7.6%, primarily from increases of $52.9 million in commercial real estate loans and $38.5 million in consumer loans as noted above, partially offset by decreases of $28.6 million in construction real estate loans and $40.2 million in commercial and industrial loans. Nonperforming loans to total loans was 0.56%, a decrease of 15 basis points (“bps”), compared to 0.71%. Total deposits were $1.28 billion, an increase of $49.2 million, compared to $1.23 billion. Total assets remained level at $1.43 billion. Book value per share was $20.94, compared to $22.18 as of June 30, 2022 and $25.31 as of December 31, 2021. Tangible book value per share (Non-GAAP) decreased to $18.25, compared to $19.43 as of June 30, 2022 and $22.45 as of December 31, 2021, reflecting impact to Accumulated Other Comprehensive Income from unrealized losses on securities portfolios. Management Commentary President and CEO John H. Montgomery stated, “We delivered solid third quarter results, driven by continued growth in our loan portfolio coupled with expanded margins and expense control. Rising interest rates underpinned a 17 basis point expansion of our net interest margin compared with the second quarter and a 41 basis point improvement from the year-ago quarter. Noninterest expense continued to run at levels well below last year’s amounts due to the optimization efforts we undertook during 2021. As a result, our Adjusted Efficiency Ratio during the third quarter was 63.0%, compared with 77.3% a year ago. While the Federal Reserve has made it clear they will accept a recession in order to control inflation, we continue to believe the southwestern Pennsylvania market in which we operate possesses a variety of demographic attributes that have muted economic volatility in the past. In addition, we have a veteran credit team with successful experience underwriting through the last recession.” Mr. Montgomery continued, “We remain focused on growing our business and have continued to make targeted additions to our team to do so. During the third quarter we added a business banking team and are also in the process of adding to our commercial banking team. We are very excited to have these new team members come aboard and look forward to their contributions. Continuing our commitment to CB shareholders, we repurchased 30,271 shares during the third quarter under the current $10.0 million share repurchase program announced last quarter, in addition to payment of our regular quarterly dividend of $0.24 per share. 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 declared a $0.24 quarterly cash dividend per outstanding share of common stock, payable on or about November 30, 2022, to stockholders of record as of the close of business on November 18, 2022. 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 on October 19, 2022, the repurchase program, if fully completed, would encompass 461,463 shares, or approximately 9.1% of the shares currently outstanding. 2022 Third Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.0 million, or 10.0%, to $11.0 million for the three months ended September 30, 2022 compared to $10.0 million for the three months ended September 30, 2021. Net interest margin (GAAP) increased to 3.29% for the three months ended September 30, 2022 compared to 2.88% for the three months ended September 30, 2021. Fully Tax Equivalent (“FTE”) net interest margin (Non-GAAP) increased 41 bps to 3.30% for the three months ended September 30, 2022 compared to 2.89% for the three months ended September 30, 2021. Interest and dividend income increased $1.5 million, or 13.9%, to $12.3 million for the three months ended September 30, 2022 compared to $10.8 million for the three months ended September 30, 2021. Interest income on loans increased $1.1 million, or 11.3%, to $10.8 million for the three months ended September 30, 2022 compared to $9.7 million for the three months ended September 30, 2021. The average balance of loans increased $19.9 million to $1.02 billion from $1.00 billion and the average yield increased 35 bps to 4.20% compared to 3.85%. Interest and fee income on PPP loans was $123,000 for the three months ended September 30, 2022 and contributed 4 bps to loan yield, compared to $484,000 for the three months ended September 30, 2021, which contributed 4 bps to loan yield. The impact of the accretion of the credit mark on acquired loan portfolios was $47,000 for the three months ended September 30, 2022 compared to $94,000 for the three months ended September 30, 2021, or 2 bps in the current period compared to 4 bps in the prior period. Interest income on taxable investment securities increased $142,000, or 16.8%, to $985,000 for the three months ended September 30, 2022 compared to $843,000 for the three months ended September 30, 2021 driven by a $24.3 million increase in average balance partially coupled with a 6 bps increase in average yield. Interest expense increased $496,000, or 63.9%, to $1.3 million for the three months ended September 30, 2022 compared to $776,000 for the three months ended September 30, 2021. Interest expense on deposits increased $364,000, or 50.9%, to $1.1 million for the three months ended September 30, 2022 compared to $715,000 for the three months ended September 30, 2021. While average interest-earning deposit balances decreased $51.7 million, or 5.8%, to $842.4 million as of September 30, 2022 compared to $894.0 million as of September 30, 2021 , rising interest rates led to the repricing of higher-cost demand and money market deposits and resulted in a 19 bps, or 59.9%, increase in average cost compared to the three months ended September 30, 2021. In addition, the average balance of time deposits and the related average cost decreased $45.2 million and 11 bps, respectively. These decreases are partially offset by an increase in average other borrowings of $11.6 million or 193.7% to $17.6 million as of September 30, 2022 compared to $6.0 million as of September 30, 2021, which was driven by an increase in subordinated debt balance. Provision for Loan Losses There was no provision for loan losses for the three months ended September 30, 2022 or for the three months ended September 30, 2021. Noninterest income Noninterest income increased $541,000, or 24.6%, to $2.7 million for the three months ended September 30, 2022, compared to $2.2 million for the three months ended September 30, 2021. The increase was largely due to a gain of $439,000 on the disposal of fixed assets during the three months ended September 30, 2022 due to the sale of the land and buildings of the former Pioneer and Bellaire bank branches. During the quarter, the Bank also recorded a $174,000 increase in insurance commissions. The increase in insurance commissions was primarily driven by contingency income which resulted from the higher than lock-in amounts received and core business including commercial and personal insurance lines. In addition, net gain on sale of loans decreased $49,000 as there were no loans sold during the three months ended September 30, 2022. Noninterest Expense Noninterest expense decreased $946,000, or 9.7%, to $8.8 million for the three months ended September 30, 2022 compared to $9.8 million for the three months ended September 30, 2021. Salaries and benefits decreased $48,000 and contracted services decreased $1.2 million to $288,000 for the three months ended September 30, 2022 compared to $1.4 million for the three months ended September 30, 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 $153,000. Statement of Financial Condition Review Assets Total assets increased $441,000, or 0.03%, to $1.43 billion at both September 30, 2022, and December 31, 2021. Cash and due from banks increased $3.1 million, or 2.6%, to $122.8 million at September 30, 2022, compared to $119.7 million at December 31, 2021. The change is primarily due to an increase in deposits as further described below in the Liabilities section. Securities decreased $31.1 million, or 13.8%, to $193.8 million at September 30, 2022, compared to $225.0 million at December 31, 2021. Current period activity included $26.8 million of purchases, and $24.9 million of pay downs. The purchases were made to earn a higher yield on excess cash. In addition, there was a $32.8 million decrease in the market value of the debt securities portfolio, primarily due to the increase in market interest rates, and a $252,000 decline in market value in the equity securities portfolio, which is primarily comprised of bank stocks. Payroll Protection Program Update PPP loans decreased $23.8 million to $768,000 at September 30, 2022 compared to $24.5 million at December 31, 2021. $27,000 of net PPP loan origination fees were unearned at September 30, 2022 compared to $678,000 at December 31, 2021. $117,000 of net PPP loan origination fees were earned in the three months ended September 30, 2022 compared to $130,000 for the three months ended June 30, 2022. Loans and Credit Quality Total loans held for investment increased $22.1 million, or 2.17%, to $1.04 billion at September 30, 2022 compared to $1.02 billion at December 31, 2021. Excluding the net decline of $23.8 million in PPP loans in the current period, loans increased $45.9 million. The allowance for loan losses was $12.9 million at September 30, 2022 and $11.6 million at December 31, 2021. As a result, the allowance for loan losses to total loans was 1.23% at September 30, 2022 compared to 1.13% at December 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.23% at September 30, 2022 compared to 1.16% at December 31, 2021. The change in the allowance for loan losses was primarily due to adjustments to historical loss factors and changes in qualitative factors in particular economic and industry conditions since December 31, 2021. Net recoveries for the three months ended September 30, 2022 were $21,000, or 0.01% of average loans on an annualized basis. Net recoveries for the three months ended September 30, 2021 were $37,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the nine months ended September 30, 2022 were $2.5 million, or 0.33% of average loans on an annualized basis. Net recoveries for the nine months ended September 30, 2021 were $10,000, and had an immaterial effect on ratios for the period. Nonperforming loans, which includes nonaccrual loans, accruing loans past due 90 days or more, and accruing loans that are considered troubled debt restructurings, were $5.9 million at September 30, 2022 compared to $7.3 million at December 31, 2021. Current nonperforming loans to total loans ratio was 0.56% compared to 0.71% at December 31, 2021. Other Intangible assets decreased $1.3 million, or 24.6%, to $4.0 million at September 30, 2022 compared to $5.3 million at December 31, 2021 due to amortization expense recognized during the period. Accrued interest receivable and other assets increased $8.8 million, or 68.4%; to $21.7 million at September 30, 2022, compared to $12.9 million at December 31, 2021. This change was primarily driven by deferred taxes as a result of the increase in market interest rate conditions and the corresponding decrease in the market value of the mostly fixed rate securities portfolio. Liabilities Total liabilities increased $26.9 million, or 2.1%, to $1.32 billion at September 30, 2022 compared to $1.29 billion at December 31, 2021. Deposits Total deposits increased $49.2 million to $1.28 billion as of September 30, 2022 compared to $1.23 billion at December 31, 2021, an annualized increase of 5.3%. Interest-bearing and non interest-bearing demand deposits increased $26.2 million and $15.8 million, respectively, partially offset by a decrease in time deposits of $15.8 million. Average total deposits increased $15.4 million, primarily in both interest-bearing and non interest -bearing demand deposits for the three months ended September 30, 2022 compared to the three months ended June 30, 2022, Borrowed Funds Short-term borrowings decreased $21.2 million, or 53.9%, to $18.1 million at September 30, 2022, compared to $39.3 million at December 31, 2021. At September 30, 2022 and December 31, 2021, short-term borrowings were comprised entirely of securities sold under agreements to repurchase, which are related to business deposit customers whose funds, above designated target balances, are transferred into an overnight interest-earning investment account by purchasing securities from the Bank’s investment portfolio under an agreement to repurchase. A portion of this decrease is due to accounts that were being transitioned into other deposit products and account for most of the interest-bearing demand deposit increase. Stockholders’ Equity Stockholders’ equity decreased $26.4 million, or 19.8%, to $106.7 million at September 30, 2022, compared to $133.1 million at December 31, 2021. Since December 31, 2021, the Company has paid $3.7 million in dividends. 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 57,710 shares at an average price of $22.51 per share since the inception of the plan. In total, the Company has repurchased $4.7 million since December 31, 2021. In addition, accumulated other comprehensive loss increased $25.7 million primarily due to the effect of rising market interest rates on the Bank’s debt securities. This was partially offset by $7.1 million of net income. Book value per share Book value per common share was $20.94 at September 30, 2022 compared to $25.31 at December 31, 2021, a decrease of $4.37. Tangible book value per common share (Non-GAAP) was $18.25 at September 30, 2022, compared to $22.45 at December 31, 2021, a decrease of $4.20. 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 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Assets Cash and Due From Banks $ 122,801 $ 81,121 $ 123,588 $ 119,674 $ 173,523 Securities 193,846 213,505 231,097 224,974 221,351 Loans Held for Sale — — — — 17,407 Loans Real Estate: Residential 328,248 325,138 317,254 320,798 317,373 Commercial 432,516 426,105 427,227 392,124 379,621 Construction 49,502 41,277 54,227 85,028 78,075 Commercial and Industrial Commercial and Industrial 61,428 62,054 59,601 64,487 69,657 PPP 768 3,853 8,242 24,523 32,703 Consumer 150,615 148,921 143,422 122,152 112,087 Other 19,865 20,621 10,669 11,684 12,083 Total Loans 1,042,942 1,027,969 1,020,642 1,020,796 1,001,599 Allowance for Loan Losses (12,854 ) (12,833 ) (11,595 ) (11,582 ) (11,581 ) Loans, Net 1,030,088 1,015,136 1,009,047 1,009,214 990,018 Premises and Equipment Held for Sale — — — — 795 Premises and Equipment, Net 18,064 18,196 18,349 18,399 18,502 Bank-Owned Life Insurance 25,750 25,610 25,468 25,332 25,190 Goodwill 9,732 9,732 9,732 9,732 9,732 Intangible Assets, Net 3,959 4,404 4,850 5,295 5,740 Accrued Interest and Other Assets 21,680 18,757 16,539 12,859 12,560 Total Assets $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 $ 1,474,818 Liabilities Deposits Held for Sale $ — $ — $ — $ — $ 102,647 Deposits Non-Interest Bearing Demand Deposits 407,107 389,127 400,105 385,775 373,320 Interest Bearing Demand Accounts 298,755 265,347 280,455 272,518 244,004 Money Market Accounts 198,715 185,308 192,929 192,125 190,426 Savings Accounts 250,378 250,226 247,589 239,482 232,679 Time Deposits 120,879 125,182 129,235 136,713 144,727 Total Deposits 1,275,834 1,215,190 1,250,313 1,226,613 1,185,156 Short-Term Borrowings 18,108 32,178 39,219 39,266 42,623 Other Borrowings 17,627 17,618 17,607 17,601 6,000 Accrued Interest Payable and Other Liabilities 7,645 7,703 9,375 8,875 7,405 Total Liabilities 1,319,214 1,272,689 1,316,514 1,292,355 1,343,831 Stockholders’ Equity $ 106,706 $ 113,772 $ 122,156 $ 133,124 $ 130,987 Total Liabilities and Stockholders’ Equity $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 $ 1,474,818 Three Months Ended Nine Months Ended Selected Operating Data 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Interest and Dividend Income Loans, Including Fees $ 10,815 $ 9,733 $ 9,551 $ 9,904 $ 9,718 $ 30,098 $ 29,800 Securities: Taxable 985 988 905 866 843 2,878 2,124 Tax-Exempt 49 57 66 66 71 172 223 Dividends 21 20 22 21 19 64 63 Other Interest and Dividend Income 417 160 72 106 135 649 384 Total Interest and Dividend Income 12,287 10,958 10,616 10,963 10,786 33,861 32,594 Interest Expense Deposits 1,079 604 530 636 715 2,214 2,489 Short-Term Borrowings 19 18 19 26 25 56 72 Other Borrowings 174 173 174 70 36 522 112 Total Interest Expense 1,272 795 723 732 776 2,792 2,673 Net Interest and Dividend Income 11,015 10,163 9,893 10,231 10,010 31,069 29,921 Provision (Recovery) for Loan Losses — 3,784 — 75 — 3,784 (1,200 ) Net Interest and Dividend Income After Provision (Recovery) for Loan Losses 11,015 6,379 9,893 10,156 10,010 27,285 31,121 Noninterest Income: Service Fees 544 559 526 569 602 1,629 1,762 Insurance Commissions 1,368 1,369 1,798 1,618 1,194 4,535 3,998 Other Commissions 244 179 89 90 93 512 431 Net Gain on Sales of Loans — — — 977 49 — 166 Net (Loss) Gain on Securities (46 ) (199 ) (7 ) 44 24 (252 ) 482 Net Gain on Purchased Tax Credits 14 14 14 17 18 43 53 Gain on Sale of Branches — — — 5,203 — — — Net Gain (Loss) on Disposal of Fixed Assets 439 — (8 ) — — 431 (3 ) Income from Bank-Owned Life Insurance 140 142 136 142 138 418 411 Other Income 36 41 65 29 80 143 291 Total Noninterest Income 2,739 2,105 2,613 8,689 2,198 7,459 7,591 Noninterest Expense: Salaries and Employee Benefits 4,739 4,539 4,565 5,181 4,787 13,843 14,757 Occupancy 768 776 686 619 615 2,230 2,349 Equipment 170 182 210 252 205 561 782 Data Processing 540 446 485 488 541 1,471 1,666 FDIC Assessment 147 128 209 222 293 484 792 PA Shares Tax 240 240 240 173 224 721 714 Contracted Services 288 348 587 1,133 1,441 1,223 2,878 Legal and Professional Fees 334 389 152 206 180 876 788 Advertising 131 115 116 191 225 362 558 Other Real Estate Owned (Income) (38 ) (37 ) (38 ) (30 ) (89 ) (113 ) (153 ) Amortization of Intangible Assets 445 446 445 445 446 1,336 1,481 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown of Fixed Assets — — — 23 2 — 2,270 Other 1,063 838 999 1,069 903 2,899 2,830 Total Noninterest Expense 8,827 8,410 8,656 9,972 9,773 25,893 32,890 Income Before Income Tax Expense (Benefit) 4,927 74 3,850 8,873 2,435 8,851 5,822 Income Tax Expense (Benefit) 998 (44 ) 803 1,908 452 1,757 1,217 Net Income $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Three Months Ended Nine Months Ended Per Common Share Data 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.72 $ 0.72 Earnings Per Common Share - Basic 0.77 0.02 0.59 1.32 0.37 1.38 0.85 Earnings Per Common Share - Diluted 0.77 0.02 0.58 1.31 0.37 1.37 0.85 Adjusted Earnings Per Common Share - Diluted (Non-GAAP) (1) 0.71 0.05 0.59 0.53 0.36 1.35 1.42 Weighted Average Common Shares Outstanding - Basic 5,106,861 5,147,846 5,198,194 5,291,795 5,373,032 5,150,632 5,412,989 Weighted Average Common Shares Outstanding - Diluted 5,118,627 5,156,975 5,220,887 5,314,537 5,390,128 5,165,376 5,420,792 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Common Shares Outstanding 5,096,672 5,128,333 5,156,897 5,260,672 5,330,401 Book Value Per Common Share $ 20.94 $ 22.18 $ 23.69 $ 25.31 $ 24.57 Tangible Book Value per Common Share (1) 18.25 19.43 20.86 22.45 21.67 Stockholders’ Equity to Assets 7.5 % 8.2 % 8.5 % 9.3 % 8.9 % Tangible Common Equity to Tangible Assets (1) 6.6 7.3 7.6 8.4 7.9 Three Months Ended Nine Months Ended Selected Financial Ratios (2) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Return on Average Assets 1.12 % 0.03 % 0.87 % 1.87 % 0.54 % 0.68 % 0.42 % Adjusted Return on Average Assets (1) 1.03 0.08 0.87 0.76 0.53 0.66 0.70 Return on Average Equity 13.60 0.40 9.50 20.95 5.93 7.85 4.59 Adjusted Return on Average Equity (1) 12.53 0.93 9.54 8.55 5.88 7.69 7.65 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 149.41 149.03 144.48 145.09 146.78 147.64 145.56 Average Equity to Average Assets 8.20 8.49 9.14 8.93 9.03 8.61 9.19 Net Interest Rate Spread 3.10 3.00 2.98 2.85 2.77 3.03 2.80 Net Interest Rate Spread (FTE) (1) 3.11 3.01 2.99 2.86 2.78 3.04 2.81 Net Interest Margin 3.29 3.12 3.08 2.95 2.88 3.17 2.92 Net Interest Margin (FTE) (1) 3.30 3.13 3.10 2.96 2.89 3.18 2.93 Net (Recoveries) Charge-offs to Average Loans (0.01 ) 1.01 (0.01 ) 0.03 (0.01 ) 0.33 — Efficiency Ratio 64.18 68.55 69.21 52.71 80.05 67.21 87.68 Adjusted Efficiency Ratio (1) 63.02 64.18 65.88 69.73 77.27 64.33 75.92 Asset Quality Ratios 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Allowance for Loan Losses to Total Loans 1.23 % 1.25 % 1.14 % 1.13 % 1.16 % Allowance for Loan Losses to Total Loans, Excluding PPP Loans(1) 1.23 1.25 1.15 1.16 1.20 Allowance for Loan Losses to Nonperforming Loans (3) 218.61 219.89 158.88 159.40 106.18 Allowance for Loan Losses to Noncurrent Loans (4) 318.96 329.47 218.28 233.37 135.37 Delinquent and Nonaccrual Loans to Total Loans (4) (5) 0.46 0.45 0.79 0.78 0.97 Nonperforming Loans to Total Loans (3) 0.56 0.57 0.72 0.71 1.09 Noncurrent Loans to Total Loans (4) 0.39 0.38 0.52 0.49 0.85 Nonperforming Assets to Total Assets (6) 0.41 0.42 0.51 0.51 0.74 Capital Ratios (7) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.02 % 11.83 % 11.99 % 11.95 % 11.53 % Tier 1 Capital (to Risk Weighted Assets) 12.02 11.83 11.99 11.95 11.53 Total Capital (to Risk Weighted Assets) 13.27 13.08 13.20 13.18 12.77 Tier 1 Leverage (to Adjusted Total Assets) 8.51 8.33 8.19 7.76 7.38 (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 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 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) $ 1,024,363 $ 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 % $ 1,004,474 $ 9,740 3.85 % Debt Securities Taxable 222,110 985 1.77 228,315 988 1.73 215,906 905 1.68 205,328 866 1.69 197,763 843 1.71 Exempt From Federal Tax 7,998 62 3.10 9,109 73 3.21 10,195 84 3.30 10,477 84 3.21 11,647 90 3.09 Equity Securities 2,693 21 3.12 2,693 20 2.97 2,693 22 3.27 2,693 21 3.12 2,655 19 2.86 Interest Bearing Deposits at Banks 67,870 378 2.23 56,379 122 0.87 59,296 33 0.22 150,102 61 0.16 160,935 92 0.23 Other Interest-Earning Assets 2,784 39 5.56 3,235 38 4.71 3,483 39 4.54 3,475 45 5.14 3,512 43 4.86 Total Interest-Earning Assets 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 1,380,986 10,827 3.11 Noninterest-Earning Assets 68,796 84,323 122,288 100,607 88,291 Total Assets $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 $ 1,469,277 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (3) $ 278,412 $ 393 0.56 % $ 260,655 $ 111 0.17 % $ 276,603 $ 48 0.07 $ 278,546 $ 51 0.07 $ 275,411 $ 48 0.07 % Savings (3) 251,148 20 0.03 248,356 20 0.03 243,786 19 0.03 252,387 20 0.03 251,801 21 0.03 Money Market (3) 189,371 269 0.56 188,804 61 0.13 192,425 41 0.09 209,572 57 0.11 198,167 55 0.11 Time Deposits (3) 123,438 397 1.28 127,832 412 1.29 132,015 422 1.30 154,342 508 1.31 168,654 591 1.39 Total Interest-Bearing Deposits (3) 842,369 1,079 0.51 825,647 604 0.29 844,829 530 0.25 894,847 636 0.28 894,033 715 0.32 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 28,738 19 0.26 34,135 18 0.21 37,884 19 0.20 44,709 26 0.23 40,818 25 0.24 Other Borrowings 17,621 174 3.92 17,611 173 3.94 17,604 174 4.01 9,474 70 2.93 6,000 36 2.38 Total Interest-Bearing Liabilities 888,728 1,272 0.57 877,393 795 0.36 900,317 723 0.33 949,030 732 0.31 940,851 776 0.33 Noninterest-Bearing Demand Deposits 390,658 391,975 384,188 388,787 387,746 Other Liabilities 2,636 4,415 8,554 7,800 8,019 Total Liabilities 1,282,022 1,273,783 1,293,059 1,345,617 1,336,616 Stockholders' Equity 114,592 118,145 130,012 131,892 132,661 Total Liabilities and Stockholders' Equity $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 $ 1,469,277 Net Interest Income (FTE) (Non-GAAP) (4) $ 11,046 $ 10,197 $ 9,933 $ 10,272 $ 10,051 Net Interest-Earning Assets (5) 439,090 430,212 400,466 427,872 440,135 Net Interest Rate Spread (FTE) (Non-GAAP) (4) (6) 3.11 % 3.01 % 2.99 2.86 2.78 % Net Interest Margin (FTE) (Non-GAAP) (4)(7) 3.30 3.13 3.10 2.96 2.89 PPP Loans 2,424 123 20.13 5,546 144 10.41 14,673 445 12.30 29,067 391 5.34 40,313 484 4.76 (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 Nine Months Ended September 30, 2022 September 30, 2021 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) $ 1,013,871 $ 30,157 3.98 % $ 1,017,632 $ 29,872 3.92 % Debt Securities Taxable 222,132 2,878 1.73 148,718 2,124 1.90 Exempt From Federal Tax 9,093 218 3.20 12,284 282 3.06 Marketable Equity Securities 2,693 64 3.17 2,645 63 3.18 Interest Bearing Deposits at Banks 61,213 534 1.16 187,093 243 0.17 Other Interest-Earning Assets 3,165 115 4.86 3,820 141 4.93 Total Interest-Earning Assets 1,312,167 33,966 3.46 1,372,192 32,725 3.19 Noninterest-Earning Assets 91,607 87,863 Total Assets $ 1,403,774 $ 1,460,055 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (3) $ 271,897 554 0.27 % $ 270,136 181 0.09 % Savings (3) 247,790 58 0.03 246,340 78 0.04 Money Market (3) 190,189 371 0.26 198,408 223 0.15 Time Deposits (3) 127,732 1,231 1.29 177,690 2,007 1.51 Total Interest-Bearing Deposits (3) 837,608 2,214 0.35 892,574 2,489 0.37 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 33,553 56 0.22 43,745 72 0.22 Other Borrowings 17,612 522 3.96 6,396 112 2.34 Total Interest-Bearing Liabilities 888,773 2,792 0.42 942,715 2,673 0.38 Noninterest-Bearing Demand Deposits 388,964 374,865 Other Liabilities 5,177 8,293 Total Liabilities 1,282,914 1,325,873 Stockholders' Equity 120,860 134,182 Total Liabilities and Stockholders' Equity $ 1,403,774 $ 1,460,055 Net Interest Income (FTE) (Non-GAAP) (4) 31,174 30,052 Net Interest-Earning Assets (5) 423,394 429,477 Net Interest Rate Spread (FTE) (Non-GAAP) (4)(6) 3.04 % 2.81 % Net Interest Margin (FTE) (Non-GAAP) (4)(7) 3.18 2.93 PPP Loans 7,503 712 12.69 51,579 1,797 4.66 (1) Annualized based on nine 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. 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands, except share and per share data) (Unaudited) Net Income (GAAP) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Adjustments Loss (Gain) on Securities 46 199 7 (44 ) (24 ) 252 (482 ) Gain on Sale of Branches — — — (5,203 ) — — — (Gain) Loss on Disposal of Fixed Assets (439 ) — 8 — — (431 ) 3 Tax effect 83 (42 ) (3 ) 1,102 5 38 101 Non-Cash Charges: Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — 23 2 — 2,270 Tax Effect — — — — — — Adjusted Net Income (Non-GAAP) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding 5,118,627 5,156,975 5,220,887 5,314,537 5,390,128 5,165,376 5,420,792 Earnings per Common Share - Diluted (GAAP) $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 0.37 $ 1.37 $ 0.85 Adjusted Earnings per Common Share - Diluted (Non-GAAP) $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 0.36 $ 1.35 $ 1.42 Net Income (GAAP) (Numerator) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Assets (Denominator) 1,396,614 1,391,928 1,423,071 1,477,509 1,469,277 1,403,774 1,460,055 Return on Average Assets (GAAP) 1.12 % 0.03 % 0.87 % 1.87 % 0.54 % 0.68 % 0.42 % Adjusted Net Income (Non-GAAP) (Numerator) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Assets (Denominator) 1,396,614 1,391,928 1,423,071 1,477,509 1,469,277 1,407,413 1,455,368 Adjusted Return on Average Assets (Non-GAAP) 1.03 % 0.08 % 0.87 % 0.76 % 0.53 % 0.66 % 0.70 % Three Months Ended Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands) (Unaudited) Net Income (GAAP) (Numerator) $ 3,929 $ 118 $ 3,047 $ 6,965 $ 1,983 $ 7,094 $ 4,605 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Equity (GAAP) (Denominator) 114,592 118,145 130,012 131,892 132,661 120,860 134,182 Return on Average Equity (GAAP) 13.60 % 0.40 % 9.50 % 20.95 % 5.93 % 7.85 % 4.59 % Adjusted Net Income (Non-GAAP) (Numerator) $ 3,619 $ 275 $ 3,059 $ 2,843 $ 1,966 $ 6,953 $ 7,675 Annualization Factor 3.97 4.01 4.06 3.97 3.97 1.34 1.34 Average Equity (GAAP) (Denominator) 114,592 118,145 130,012 131,892 132,661 120,860 134,182 Adjusted Return on Average Equity (Non-GAAP) 12.53 % 0.93 % 9.54 % 8.55 % 5.88 % 7.69 % 7.65 % 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. 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 (Dollars in thousands, except share and per share data) (Unaudited) Assets (GAAP) $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 $ 1,474,818 Goodwill and Intangible Assets, Net (13,691 ) (14,136 ) (14,582 ) (15,027 ) (15,472 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,412,229 $ 1,372,325 $ 1,424,088 $ 1,410,452 $ 1,459,346 Stockholders' Equity (GAAP) $ 106,706 $ 113,772 $ 122,156 $ 133,124 $ 130,987 Goodwill and Intangible Assets, Net (13,691 ) (14,136 ) (14,582 ) (15,027 ) (15,472 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 93,015 $ 99,636 $ 107,574 $ 118,097 $ 115,515 Stockholders’ Equity to Assets (GAAP) 7.5 % 8.2 % 8.5 % 9.3 % 8.9 % Tangible Common Equity to Tangible Assets (Non-GAAP) 6.6 % 7.3 % 7.6 % 8.4 % 7.9 % Common Shares Outstanding (Denominator) 5,096,672 5,128,333 5,156,897 5,260,672 5,330,401 Book Value per Common Share (GAAP) $ 20.94 $ 22.18 $ 23.69 $ 25.31 $ 24.57 Tangible Book Value per Common Share (Non-GAAP) $ 18.25 $ 19.43 $ 20.86 $ 22.45 $ 21.67 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 12,287 $ 10,958 $ 10,616 $ 10,963 $ 10,786 $ 33,861 $ 32,594 Adjustment to FTE Basis 31 34 40 41 41 105 131 Interest Income (FTE) (Non-GAAP) 12,318 10,992 10,656 11,004 10,827 33,966 32,725 Interest Expense (GAAP) 1,272 795 723 732 776 2,792 2,673 Net Interest Income (FTE) (Non-GAAP) $ 11,046 $ 10,197 $ 9,933 $ 10,272 $ 10,051 $ 31,174 $ 30,052 Net Interest Rate Spread (GAAP) 3.10 % 3.00 % 2.98 % 2.85 % 2.77 % 3.03 % 2.80 % 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) 3.11 3.01 2.99 2.86 2.78 3.04 2.81 Net Interest Margin (GAAP) 3.29 % 3.12 % 3.08 % 2.95 % 2.88 % 3.17 % 2.92 % Adjustment to FTE Basis 0.01 0.01 0.02 0.01 0.01 0.01 0.01 Net Interest Margin (FTE) (Non-GAAP) 3.30 3.13 3.10 2.96 2.89 3.18 2.93 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 Nine Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 (Dollars in thousands) (Unaudited) Noninterest Expense (GAAP) (Numerator) $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 9,773 $ 25,893 $ 32,890 Net Interest and Dividend Income (GAAP) $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 10,010 $ 31,069 $ 29,921 Noninterest Income (GAAP) 2,739 2,105 2,613 8,689 2,198 7,459 7,591 Operating Revenue (GAAP) (Denominator) $ 13,754 $ 12,268 $ 12,506 $ 18,920 $ 12,208 $ 38,528 $ 37,512 Efficiency Ratio (GAAP) 64.18 % 68.55 % 69.21 % 52.71 % 80.05 % 67.21 % 87.68 % Noninterest Expense (GAAP) $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 9,773 $ 25,893 $ 32,890 Less: Other Real Estate Owned (Income) (38 ) (37 ) (38 ) (30 ) (89 ) (113 ) (153 ) Amortization of Intangible Assets 445 446 445 445 446 1,336 1,481 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — 23 2 — 2,270 Adjusted Noninterest Expense (Non-GAAP) (Numerator) $ 8,420 $ 8,001 $ 8,249 $ 9,534 $ 9,414 $ 24,670 $ 28,114 Net Interest and Dividend Income (GAAP) $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 10,010 $ 31,069 $ 29,921 Noninterest Income (GAAP) 2,739 2,105 2,613 8,689 2,198 7,459 7,591 Less: Net (Loss) Gain on Securities (46 ) (199 ) (7 ) 44 24 (252 ) 482 Gain on Sale of Branches — — — 5,203 — — — Net Gain (Loss) on Disposal of Fixed Assets 439 — (8 ) — — 431 (3 ) Adjusted Noninterest Income (Non-GAAP) $ 2,346 $ 2,304 $ 2,628 $ 3,442 $ 2,174 $ 7,280 $ 7,112 Adjusted Operating Revenue (Non-GAAP) (Denominator) $ 13,361 $ 12,467 $ 12,521 $ 13,673 $ 12,184 $ 38,349 $ 37,033 Adjusted Efficiency Ratio (Non-GAAP) 63.02 % 64.18 % 65.88 % 69.73 % 77.27 % 64.33 % 75.92 % 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. 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 (Dollars in thousands) (Unaudited) Allowance for Loan Losses (Numerator) $ 12,854 $ 12,833 $ 11,595 $ 11,582 $ 11,581 Total Loans 1,042,942 $ 1,027,969 1,020,642 $ 1,020,796 $ 1,001,599 PPP Loans (768 ) (3,853 ) (8,242 ) (24,523 ) (32,703 ) Total Loans, Excluding PPP Loans (Non-GAAP) (Denominator) $ 1,042,174 $ 1,024,116 $ 1,012,400 $ 996,273 $ 968,896 Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP) 1.23 % 1.25 % 1.15 % 1.16 % 1.20 % View source version on businesswire.com: https://www.businesswire.com/news/home/20221027006040/en/
Company: John H. Montgomery President and Chief Executive Officer (724) 225-2400 Investor Relations: Jeremy Hellman, Vice President The Equity Group Inc. (212) 836-9626 jhellman@equityny.com