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 Fourth Quarter and Full Year 2022 Financial Results and Declares Quarterly Cash Dividend By: CB Financial Services, Inc. via Business Wire January 26, 2023 at 16:15 PM EST CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”) and Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of the Bank, today announced its fourth quarter and 2022 financial results. Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands, except per share data) (Unaudited) Net Income (GAAP) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Non-Recurring Items (66 ) (310 ) 157 12 (4,122 ) (208 ) (1,053 ) Adjusted Net Income (Non-GAAP) (1) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Earnings per Common Share - Diluted (GAAP) $ 0.81 $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 2.18 $ 2.15 Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1) $ 0.80 $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 2.14 $ 1.95 (1) Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted in this Press Release. 2022 Fourth Quarter Financial Highlights (Comparisons to three months ended December 31, 2021 unless otherwise noted) Net income was $4.2 million, compared to net income of $7.0 million. Current period results were driven by net interest margin expansion coupled with a reduction of noninterest expense of $974,000 for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, which benefited from a gain on sale of $5.2 million resulting from the sale of branch locations. Adjusted net income (Non-GAAP) was $4.1 million, compared to $2.8 million. Earnings per diluted common share (EPS) decreased to $0.81 from $1.31. Adjusted earnings per common share - diluted (Non-GAAP) was $0.80, compared to $0.53. Return on average assets (annualized) of 1.16%, compared to 1.87%. Adjusted return on average assets (annualized) (Non-GAAP) of 1.15%, compared to 0.76%. Return on average equity (annualized) of 15.26%, compared to 20.95% (annualized). Adjusted return on average equity (annualized) (Non-GAAP) of 15.01%, compared to 8.55%. Net interest margin (NIM) improved to 3.45% from 2.95%. Net interest and dividend income was $11.9 million, compared to $10.2 million. Noninterest income decreased to $2.4 million, compared to $8.7 million. The prior year period benefited from the recognition of $5.2 million in gain on sales of branches of two branch locations as part of branch optimization initiatives while the current year period included a decrease of income from net gain on sale of loans of $977,000 primarily the result of the sale of a nonperforming commercial real estate loan in the hotel portfolio. In addition, a decrease of $219,000 in insurance commissions was primarily driven by contingency income which resulted from the timing of lock-in amounts recorded and was partially offset by an increase in core business for commercial insurance lines. (Amounts at December 31, 2022; comparisons to December 31, 2021, unless otherwise noted) Total loans, including Payroll Protection Program (“PPP”) loans, were $1.05 billion, an increase of $29.1 million from $1.02 billion. Total loans held for investment, excluding PPP loans, increased $53.5 million, or 5.4%, to $1.05 billion compared to $996.3 million, and included increases of $24.8 million, or 27.1%, in consumer loans, and $44.7 million, or 15.2%, growth in commercial real estate loans, partially offset by decreases of $40.1 million in construction real estate and $19.0 million in commercial and industrial loans. Total loans held for investment, excluding PPP loans, as of December 31, 2022, increased $7.6 million, or 0.7%, as compared to September 30, 2022. This included increases of $8.5 million, or 13.8%, in commercial and industrial loans, $4.3 million, or 1.0%, in commercial real estate loans, and $2.5 million, or 0.8%, in residential loans, partially offset by decreases of $4.6 million, or 9.2%, in construction loans, and $3.7 million, or 2.4%, in consumer loans. Nonperforming loans to total loans was 0.55%, a decrease of 16 basis points (“bps”), compared to 0.71%. Total deposits were $1.27 billion, an increase of $41.9 million, compared to $1.23 billion. Total assets remained level at $1.43 billion. Book value per share was $21.60, compared to $20.94 as of September 30, 2022 and $25.31 as of December 31, 2021. Tangible book value per share (Non-GAAP) was $19.00, compared to $18.25 as of September 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, “In closing out what was a successful 2022, our fourth quarter results continued to benefit from margin expansion on top of consistent loan growth. Two years ago we undertook a long term strategy that consisted of first driving down our expenses in a durable manner by rationalizing our physical branch footprint while also working to make sure our operations were optimized and efficient. This effort set the stage for the reduced the non-interest expenses we enjoyed throughout 2022. With our branch optimization largely completed, in 2022 we turned our attention to driving growth through smart additions of key leadership on both the retail and commercial sides of our business. Those investments helped drive growth in our loan portfolio through 2022 which coupled with rising interest rates to yield growth in our net interest income.” Mr. Montgomery continued, “We remain watchful with respect to the overall economic climate as the Federal Reserve continues to work to rein in inflation while not tipping the country into a recession. As I have noted in the past, our credit team possesses a wealth of experience, including demonstrated success during the Great Financial Crisis just over a dozen years ago. With that experience, we are confident in our ability to navigate whatever macroeconomic headwinds we face.” Mr. Montgomery concluded, “Continuing our commitment to CB shareholders, we increased our regular quarterly dividend to $0.25 per share. In addition, we repurchased 4,620 shares during the fourth quarter under the current $10.0 million share repurchase program announced earlier in 2022. We remain well-capitalized with the ability to support growth along with these shareholder-friendly actions.” Dividend Information The Company’s Board of Directors has approved a 4.2% increase in the regular quarterly cash dividend by declaring a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about February 28, 2023, to stockholders of record as of the close of business on February 15, 2023. Stock Repurchase Program On April 21, 2022, CB announced a program to repurchase up to $10.0 million of the Company’s outstanding shares of common stock. Based on the Company’s closing stock price at January 23, 2023, the repurchase program, if fully completed, would encompass 430,906 shares, or approximately 8.4% of the shares currently outstanding. 2022 Fourth Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.6 million, or 16.0%, to $11.9 million for the three months ended December 31, 2022 compared to $10.2 million for the three months ended December 31, 2021. Net interest margin (GAAP) increased to 3.45% for the three months ended December 31, 2022 compared to 2.95% for the three months ended December 31, 2021. Fully Tax Equivalent (“FTE”) Net interest margin (Non-GAAP) increased 50 bps to 3.46% for the three months ended December 31, 2022 compared to 2.96% for the three months ended December 31, 2021. Interest and dividend income increased $2.9 million, or 26.4%, to $13.9 million for the three months ended December 31, 2022 compared to $11.0 million for the three months ended December 31, 2021. Interest income on loans increased $1.9 million, or 19.5%, to $11.8 million for the three months ended December 31, 2022 compared to $9.9 million for the three months ended December 31, 2021. The average balance of loans increased $29.9 million to $1.03 billion from $1.00 billion and the average yield increased 62 bps to 4.54% compared to 3.92%. Interest and fee income on PPP loans was $22,000 for the three months ended December 31, 2022 and didn’t impact loan yield, compared to $391,000 for the three months ended December 31, 2021, which contributed 4 bps to loan yield. The impact of the accretion of the credit mark on acquired loan portfolios was $61,000 for the three months ended December 31, 2022 compared to $83,000 for the three months ended December 31, 2021, or 2 bps in the current period compared to 3 bps in the prior period. Interest income on taxable investment securities increased $108,000, or 12.5%, to $974,000 for the three months ended December 31, 2022 compared to $866,000 for the three months ended December 31, 2021 driven by a $11.6 million increase in average balance partially coupled with a 11 bps increase in average yield. Interest expense increased $1.3 million, or 171.7%, to $2.0 million for the three months ended December 31, 2022 compared to $732,000 for the three months ended December 31, 2021. Interest expense on deposits increased $1.2 million, or 184.7%, to $1.8 million for the three months ended December 31, 2022 compared to $636,000 for the three months ended December 31, 2021. While average interest-earning deposit balances decreased $7.2 million, or 0.8%, to $887.7 million as of December 31, 2022 compared to $894.8 million as of December 31, 2021, rising interest rates led to the repricing of higher-cost demand and money market deposits and resulted in a 53 bps, or 188.0%, increase in average cost compared to the three months ended December 31, 2021. In addition, the average balance of time deposits and the related average cost decreased $38.2 million and 5 bps, respectively. These decreases are partially offset by an increase in average other borrowings of $8.1 million or 85.8% to $17.6 million as of December 31, 2022 compared to $9.5 million as of December 31, 2021, which was driven by the issuance of subordinate debt of $15.0 million in late December of 2021, and outstanding for the entire quarter ended December 31, 2022. Provision for Loan Losses There was no provision for loan losses for the three months ended December 31, 2022 or for the three months ended December 31, 2021. Noninterest income Noninterest income decreased $6.3 million, or 72.8%, to $2.4 million for the three months ended December 31, 2022, compared to $8.7 million for the three months ended December 31, 2021. The decrease was primarily related to non-recurring prior period recognition of $5.2 million gain on sale of branches as a result of branch optimization initiatives and $897,000 due to the sale of a nonperforming commercial real estate loan in the hotel portfolio. During the quarter, there was a $219,000 decrease in insurance commissions. The decrease in insurance commissions was primarily driven by contingency income which resulted from the timing of lock-in amounts received and core business including commercial and personal insurance lines. Noninterest Expense Noninterest expense decreased $974,000, or 9.8%, to $9.0 million for the three months ended December 31, 2022 compared to $10.0 million for the three months ended December 31, 2021. Salaries and benefits decreased $556,000 to $4.6 million and contracted services decreased $728,000 to $405,000 for the three months ended December 31, 2022 compared to $1.1 million for the three months ended December 31, 2021. This was a result of branch optimization initiatives completed in the prior year. These decreases were partially offset by an increase in occupancy expenses of $198,000. Statement of Financial Condition Review Assets Total assets decreased $16.5 million, or 1.16%, to $1.41 billion at both December 31, 2022, and December 31, 2021. Cash and due from banks decreased $16.0 million, or 13.3%, to $103.7 million at December 31, 2022, compared to $119.7 million at December 31, 2021. Securities decreased $34.9 million, or 15.5%, to $190.1 million at December 31, 2022, compared to $225.0 million at December 31, 2021. The Securities balance was primarily impacted by a $32.3 million decrease in the market value of the debt securities portfolio, primarily due to the increase in market interest rates. The current year included $26.8 million of purchases, and $29.2 million of pay downs. The purchases were made to earn a higher yield on excess cash. In addition, there was $168,000 decrease in the market value in the equity securities portfolio, which is primarily comprised of bank stocks. Payroll Protection Program Update PPP loans decreased $24.4 million to $126,000 at December 31, 2022 compared to $24.5 million at December 31, 2021. $5,000 of net PPP loan origination fees were unearned at December 31, 2022 compared to $678,000 at December 31, 2021. $22,000 of net PPP loan origination fees were earned in the three months ended December 31, 2022 compared to $117,000 for the three months ended September 30, 2022. Loans and Credit Quality Total loans held for investment increased $29.1 million, or 2.85%, to $1.05 billion at December 31, 2022 compared to $1.02 billion at December 31, 2021. Excluding the net decline of $24.4 million in PPP loans in the current period, loans increased $53.5 million or 5.4%. The allowance for loan losses was $12.8 million at December 31, 2022 and $11.6 million at December 31, 2021. As a result, the allowance for loan losses to total loans was 1.22% at December 31, 2022 compared to 1.13% at December 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.22% at December 31, 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 charge-offs for the three months ended December 31, 2022 were $35,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the three months ended December 31, 2021 were $74,000, or 0.03% of average loans on an annualized basis. Net charge-offs for the year ended December 31, 2022 were $2.5 million, or 0.25% of average loans on an annualized basis. Net charge-offs for the year ended December 31, 2021 were $64,000, and had an immaterial and one hundredth 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 $5.8 million at December 31, 2022 compared to $7.3 million at December 31, 2021. Current nonperforming loans to total loans ratio was 0.55% compared to 0.71% at December 31, 2021. Other Intangible assets decreased $1.8 million, or 34.0%, to $3.5 million at December 31, 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 $8.3 million, or 64.5% to $21.1 million at December 31, 2022, compared to $12.9 million at December 31, 2021. This change was primarily driven by the increase in market interest rate conditions and an increase in deferred tax assets of $7.5 million. Liabilities Total liabilities increased $6.4 million, or 0.5%, to $1.30 billion at December 31, 2022 compared to $1.29 billion at December 31, 2021. Deposits Total deposits increased $41.9 million to $1.27 billion as of December 31, 2022 compared to $1.23 billion at December 31, 2021, an increase of 3.4%. Interest-bearing and non interest-bearing demand deposits increased $39.3 million and $4.6 million, respectively, partially offset by a decrease in time deposits of $27.6 million. Average total deposits increased $45.9 million, primarily in both interest-bearing and non interest-bearing demand deposits for the three months ended December 31, 2022. The increase in interest-bearing demand deposits is primarily the result of the transition of customer deposits from securities sold under agreements to repurchase product, 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. Borrowed Funds Short-term borrowings decreased $31.2 million, or 79.5%, to $8.1 million at December 31, 2022, compared to $39.3 million at December 31, 2021. At December 31, 2022 and December 31, 2021, short-term borrowings were comprised entirely of securities sold under agreements to repurchase as noted in the above-mentioned deposit section. A portion of this decrease is due to accounts that were transitioned into other deposit products and account for most of the interest-bearing demand deposit increase. Stockholders’ Equity Stockholders’ equity decreased $23.0 million, or 17.3%, to $110.2 million at December 31, 2022, compared to $133.1 million at December 31, 2021. Key factors impacting stockholders’ equity included accumulated other comprehensive loss, which increased $25.3 million primarily due to the effect of rising market interest rates on the Company’s investment securities; the payment of $4.9 million in dividends since December 31, 2021; and activity under share repurchase programs, offset by the positive impact of $11.2 million of net income. On February 15, 2022, the Company completed its stock repurchase program that was implemented on June 10, 2021. On April 21, 2022, a new $10 million repurchase program was authorized, with the Company repurchasing 62,178 shares at an average price of $22.47 per share since the inception of the plan. In total, the Company has repurchased $4.8 million since December 31, 2021. Book value per share Book value per common share was $21.60 at December 31, 2022 compared to $25.31 at December 31, 2021, a decrease of $3.71. Tangible book value per common share (Non-GAAP) was $19.00 at December 31, 2022, compared to $22.45 at December 31, 2021, a decrease of $3.45. Refer to “Explanation of Use of Non-GAAP Financial Measures” at the end of this Press Release. About CB Financial Services, Inc. CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers a broad array of retail and commercial lending and deposit services and provides commercial and personal insurance brokerage services through Exchange Underwriters, Inc., its wholly owned subsidiary. For more information about CB Financial Services, Inc. and Community Bank, visit our website at www.communitybank.tv. Statement About Forward-Looking Statements Statements contained in this press release that are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and such forward-looking statements are subject to significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions contained in the Act. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries include, but are not limited to, general and local economic conditions, the scope and duration of economic contraction as a result of the COVID-19 pandemic and its effects on the Company’s business and that of the Company’s customers, changes in market interest rates, deposit flows, demand for loans, real estate values and competition, competitive products and pricing, the ability of our customers to make scheduled loan payments, loan delinquency rates and trends, our ability to manage the risks involved in our business, our ability to control costs and expenses, inflation, market and monetary fluctuations, changes in federal and state legislation and regulation applicable to our business, actions by our competitors, and other factors that may be disclosed in the Company’s periodic reports as filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation. CB FINANCIAL SERVICES, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION (Dollars in thousands, except share and per share data) (Unaudited) Selected Financial Condition Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Assets Cash and Due From Banks $ 103,700 $ 122,801 $ 81,121 $ 123,588 $ 119,674 Securities 190,058 193,846 213,505 231,097 224,974 Loans Real Estate: Residential 330,725 328,248 325,138 317,254 320,798 Commercial 436,805 432,516 426,105 427,227 392,124 Construction 44,923 49,502 41,277 54,227 85,028 Commercial and Industrial Commercial and Industrial 69,918 61,428 62,054 59,601 64,487 PPP 126 768 3,853 8,242 24,523 Consumer 146,927 150,615 148,921 143,422 122,152 Other 20,449 19,865 20,621 10,669 11,684 Total Loans 1,049,873 1,042,942 1,027,969 1,020,642 1,020,796 Allowance for Loan Losses (12,819 ) (12,854 ) (12,833 ) (11,595 ) (11,582 ) Loans, Net 1,037,054 1,030,088 1,015,136 1,009,047 1,009,214 Premises and Equipment, Net 17,844 18,064 18,196 18,349 18,399 Bank-Owned Life Insurance 25,893 25,750 25,610 25,468 25,332 Goodwill 9,732 9,732 9,732 9,732 9,732 Intangible Assets, Net 3,513 3,959 4,404 4,850 5,295 Accrued Interest and Other Assets 21,144 21,680 18,757 16,539 12,859 Total Assets $ 1,408,938 $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 Liabilities Deposits Non-Interest Bearing Demand Deposits $ 390,405 $ 407,107 $ 389,127 $ 400,105 $ 385,775 Interest Bearing Demand Accounts 311,825 298,755 265,347 280,455 272,518 Money Market Accounts 209,125 198,715 185,308 192,929 192,125 Savings Accounts 248,022 250,378 250,226 247,589 239,482 Time Deposits 109,126 120,879 125,182 129,235 136,713 Total Deposits 1,268,503 1,275,834 1,215,190 1,250,313 1,226,613 Short-Term Borrowings 8,060 18,108 32,178 39,219 39,266 Other Borrowings 14,638 17,627 17,618 17,607 17,601 Accrued Interest Payable and Other Liabilities 7,582 7,645 7,703 9,375 8,875 Total Liabilities 1,298,783 1,319,214 1,272,689 1,316,514 1,292,355 Stockholders’ Equity $ 110,155 $ 106,706 $ 113,772 $ 122,156 $ 133,124 Total Liabilities and Stockholders’ Equity $ 1,408,938 $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended Year Ended Selected Operating Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Interest and Dividend Income Loans, Including Fees $ 11,835 $ 10,815 $ 9,733 $ 9,551 $ 9,904 $ 41,933 $ 39,704 Securities: Taxable 974 985 988 905 866 3,852 2,990 Tax-Exempt 40 49 57 66 66 213 289 Dividends 28 21 20 22 21 91 84 Other Interest and Dividend Income 978 417 160 72 106 1,627 490 Total Interest and Dividend Income 13,855 12,287 10,958 10,616 10,963 47,716 43,557 Interest Expense Deposits 1,811 1,079 604 530 636 4,025 3,125 Short-Term Borrowings 7 19 18 19 26 63 98 Other Borrowings 171 174 173 174 70 693 182 Total Interest Expense 1,989 1,272 795 723 732 4,781 3,405 Net Interest and Dividend Income 11,866 11,015 10,163 9,893 10,231 42,935 40,152 Provision (Recovery) for Loan Losses — — 3,784 — 75 3,784 (1,125 ) Net Interest and Dividend Income After Provision (Recovery) for Loan Losses 11,866 11,015 6,379 9,893 10,156 39,151 41,277 Noninterest Income: Service Fees 530 544 559 526 569 2,160 2,331 Insurance Commissions 1,399 1,368 1,369 1,798 1,618 5,934 5,616 Other Commissions 157 244 179 89 90 669 521 Net Gain on Sales of Loans — — — — 977 — 1,143 Net Gain (Loss) on Securities 83 (46 ) (199 ) (7 ) 44 (168 ) 526 Net Gain on Purchased Tax Credits 14 14 14 14 17 57 70 Gain on Sale of Branches — — — �� — 5,203 — 5,203 Net Gain (Loss) on Disposal of Fixed Assets — 439 — (8 ) — 431 (3 ) Income from Bank-Owned Life Insurance 143 140 142 136 142 561 553 Other Income 34 36 41 65 29 176 320 Total Noninterest Income 2,360 2,739 2,105 2,613 8,689 9,820 16,280 Noninterest Expense: Salaries and Employee Benefits 4,625 4,739 4,539 4,565 5,181 18,469 19,938 Occupancy 817 768 776 686 619 3,047 2,968 Equipment 178 170 182 210 252 739 1,034 Data Processing 681 540 446 485 488 2,152 2,154 FDIC Assessment 154 147 128 209 222 638 1,014 PA Shares Tax 258 240 240 240 173 979 887 Contracted Services 405 288 348 587 1,133 1,628 4,011 Legal and Professional Fees 362 334 389 152 206 1,237 994 Advertising 165 131 115 116 191 527 749 Other Real Estate Owned (Income) (38 ) (38 ) (37 ) (38 ) (30 ) (151 ) (183 ) Amortization of Intangible Assets 446 445 446 445 445 1,782 1,926 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown of Fixed Assets — — — — 23 — 2,293 Other 945 1,063 838 999 1,069 3,844 3,899 Total Noninterest Expense 8,998 8,827 8,410 8,656 9,972 34,891 42,862 Income Before Income Tax Expense (Benefit) 5,228 4,927 74 3,850 8,873 14,080 14,695 Income Tax Expense (Benefit) 1,076 998 (44 ) 803 1,908 2,833 3,125 Net Income $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Three Months Ended Year Ended Per Common Share Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.96 $ 0.96 Earnings Per Common Share - Basic 0.81 0.77 0.02 0.59 1.32 2.19 2.15 Earnings Per Common Share - Diluted 0.81 0.77 0.02 0.58 1.31 2.18 2.15 Adjusted Earnings Per Common Share - Diluted (Non-GAAP) (1) 0.80 0.71 0.05 0.59 0.53 2.14 1.95 Weighted Average Common Shares Outstanding - Basic 5,095,237 5,106,861 5,147,846 5,198,194 5,291,795 5,136,670 5,382,441 Weighted Average Common Shares Outstanding - Diluted 5,104,254 5,118,627 5,156,975 5,220,887 5,314,537 5,149,312 5,392,729 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Common Shares Outstanding 5,100,189 5,096,672 5,128,333 5,156,897 5,260,672 Book Value Per Common Share $ 21.60 $ 20.94 $ 22.18 $ 23.69 $ 25.31 Tangible Book Value per Common Share (1) 19.00 18.25 19.43 20.86 22.45 Stockholders’ Equity to Assets 7.8 % 7.5 % 8.2 % 8.5 % 9.3 % Tangible Common Equity to Tangible Assets (1) 6.9 6.6 7.3 7.6 8.4 Three Months Ended Year Ended Selected Financial Ratios (2) 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Return on Average Assets 1.16 % 1.12 % 0.03 % 0.87 % 1.87 % 0.80 % 0.79 % Adjusted Return on Average Assets (1) 1.15 1.03 0.08 0.87 0.76 0.78 0.72 Return on Average Equity 15.26 13.60 0.40 9.50 20.95 9.56 8.66 Adjusted Return on Average Equity (1) 15.01 12.53 0.93 9.54 8.55 9.39 7.87 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 149.04 149.41 149.03 144.48 145.09 148.00 145.44 Average Equity to Average Assets 7.63 8.20 8.49 9.14 8.93 8.36 9.12 Net Interest Rate Spread 3.17 3.10 3.00 2.98 2.85 3.07 2.81 Net Interest Rate Spread (FTE) (1) 3.18 3.11 3.01 2.99 2.86 3.08 2.82 Net Interest Margin 3.45 3.29 3.12 3.08 2.95 3.24 2.92 Net Interest Margin (FTE) (1) 3.46 3.30 3.13 3.10 2.96 3.25 2.94 Net Charge-offs and (Recoveries) to Average Loans 0.01 �� (0.01 ) 1.01 (0.01 ) 0.03 0.25 0.01 Efficiency Ratio 63.25 64.18 68.55 69.21 52.71 66.14 75.95 Adjusted Efficiency Ratio (1) 60.74 63.02 64.18 65.88 69.73 63.36 74.25 Asset Quality Ratios 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Allowance for Loan Losses to Total Loans 1.22 % 1.23 % 1.25 % 1.14 % 1.13 % Allowance for Loan Losses to Total Loans, Excluding PPP Loans(1) 1.22 1.23 1.25 1.15 1.16 Allowance for Loan Losses to Nonperforming Loans (3) 221.06 218.61 219.89 158.88 159.40 Allowance for Loan Losses to Noncurrent Loans (4) 320.64 318.96 329.47 218.28 233.37 Delinquent and Nonaccrual Loans to Total Loans (4) (5) 0.81 0.46 0.45 0.79 0.78 Nonperforming Loans to Total Loans (3) 0.55 0.56 0.57 0.72 0.71 Noncurrent Loans to Total Loans (4) 0.38 0.39 0.38 0.52 0.49 Nonperforming Assets to Total Assets (6) 0.41 0.41 0.42 0.51 0.51 Capital Ratios (7) 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.33 % 12.02 % 11.83 % 11.99 % 11.95 % Tier 1 Capital (to Risk Weighted Assets) 12.33 12.02 11.83 11.99 11.95 Total Capital (to Risk Weighted Assets) 13.58 13.27 13.08 13.20 13.18 Tier 1 Leverage (to Adjusted Total Assets) 8.66 8.51 8.33 8.19 7.76 (1) Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (2) Interim period ratios are calculated on an annualized basis. (3) Nonperforming loans consist of nonaccrual loans, accruing loans that are 90 days or more past due, and troubled debt restructured loans. (4) Noncurrent loans consist of nonaccrual loans and accruing loans that are 90 days or more past due. (5) Delinquent loans consist of accruing loans that are 30 days or more past due. (6) Nonperforming assets consist of nonperforming loans and other real estate owned. (7) Capital ratios are for Community Bank only. Certain items previously reported may have been reclassified to conform with the current reporting period’s format. AVERAGE BALANCES AND YIELDS Three Months Ended December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) (Dollars in thousands) (Unaudited) Assets: Interest-Earning Assets: Loans, Net (2) $ 1,034,714 $ 11,853 4.54 % $ 1,024,363 $ 10,833 4.20 % $ 1,007,874 $ 9,751 3.88 % $ 1,009,210 $ 9,573 3.85 % $ 1,004,827 $ 9,927 3.92 % Debt Securities Taxable 216,915 974 1.80 222,110 985 1.77 228,315 988 1.73 215,906 905 1.68 205,328 866 1.69 Exempt From Federal Tax 6,277 51 3.25 7,998 62 3.10 9,109 73 3.21 10,195 84 3.30 10,477 84 3.21 Equity Securities 2,693 28 4.16 2,693 21 3.12 2,693 20 2.97 2,693 22 3.27 2,693 21 3.12 Interest Bearing Deposits at Banks 99,108 939 3.79 67,870 378 2.23 56,379 122 0.87 59,296 33 0.22 150,102 61 0.16 Other Interest-Earning Assets 2,875 39 5.38 2,784 39 5.56 3,235 38 4.71 3,483 39 4.54 3,475 45 5.14 Total Interest-Earning Assets 1,362,582 13,884 4.04 1,327,818 12,318 3.68 1,307,605 10,992 3.37 1,300,783 10,656 3.32 1,376,902 11,004 3.17 Noninterest-Earning Assets 51,718 68,796 84,323 122,288 100,607 Total Assets $ 1,414,300 $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (3) $ 315,352 $ 810 1.02 % $ 278,412 $ 393 0.56 % $ 260,655 $ 111 0.17 $ 276,603 $ 48 0.07 $ 278,546 $ 51 0.07 % Savings (3) 249,948 29 0.05 251,148 20 0.03 248,356 20 0.03 243,786 19 0.03 252,387 20 0.03 Money Market (3) 206,192 604 1.16 189,371 269 0.56 188,804 61 0.13 192,425 41 0.09 209,572 57 0.11 Time Deposits (3) 116,172 368 1.26 123,438 397 1.28 127,832 412 1.29 132,015 422 1.30 154,342 508 1.31 Total Interest-Bearing Deposits (3) 887,664 1,811 0.81 842,369 1,079 0.51 825,647 604 0.29 844,829 530 0.25 894,847 636 0.28 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 8,985 7 0.31 28,738 19 0.26 34,135 18 0.21 37,884 19 0.20 44,709 26 0.23 Other Borrowings 17,598 171 3.86 17,621 174 3.92 17,611 173 3.94 17,604 174 4.01 9,474 70 2.93 Total Interest-Bearing Liabilities 914,247 1,989 0.86 888,728 1,272 0.57 877,393 795 0.36 900,317 723 0.33 949,030 732 0.31 Noninterest-Bearing Demand Deposits 391,300 390,658 391,975 384,188 388,787 Other Liabilities 788 2,636 4,415 8,554 7,800 Total Liabilities 1,306,335 1,282,022 1,273,783 1,293,059 1,345,617 Stockholders' Equity 107,965 114,592 118,145 130,012 131,892 Total Liabilities and Stockholders' Equity $ 1,414,300 $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 Net Interest Income (FTE) (Non-GAAP) (4) $ 11,895 $ 11,046 $ 10,197 $ 9,933 $ 10,272 Net Interest-Earning Assets (5) 448,335 439,090 430,212 400,466 427,872 Net Interest Rate Spread (FTE) (Non-GAAP) (4) (6) 3.18 % 3.11 % 3.01 % 2.99 % 2.86 % Net Interest Margin (FTE) (Non-GAAP) (4)(7) 3.46 3.30 3.13 3.10 2.96 PPP Loans 216 22 40.41 2,424 123 20.13 5,546 144 10.41 14,673 445 12.30 29,067 391 5.34 (1) Annualized based on three months ended results. (2) Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Includes Deposits Held for Sale that were sold in December 2021. (4) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (6) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (7) Net interest margin represents annualized net interest income divided by average total interest-earning assets. AVERAGE BALANCES AND YIELDS Year Ended December 31, 2022 December 31, 2021 Average Balance Interest and Dividends Yield /Cost Average Balance Interest and Dividends Yield /Cost (Dollars in thousands) (Unaudited) Assets: Interest-Earning Assets: Loans, Net (1) $ 1,019,124 $ 42,010 4.12 % $ 1,014,405 $ 39,799 3.92 % Debt Securities Taxable 220,818 3,852 1.74 162,987 2,990 1.83 Exempt From Federal Tax 8,383 270 3.22 11,829 366 3.09 Marketable Equity Securities 2,693 91 3.38 2,657 84 3.16 Interest Bearing Deposits at Banks 70,765 1,473 2.08 177,768 304 0.17 Other Interest-Earning Assets 3,092 154 4.98 3,733 186 4.98 Total Interest-Earning Assets 1,324,875 47,850 3.61 1,373,379 43,729 3.18 Noninterest-Earning Assets 81,553 91,075 Total Assets $ 1,406,428 $ 1,464,454 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (2) $ 282,850 $ 1,362 0.48 % $ 272,256 $ 232 0.09 % Savings (2) 248,334 88 0.04 247,864 98 0.04 Money Market (2) 194,223 976 0.50 201,222 281 0.14 Time Deposits (2) 124,817 1,599 1.28 171,805 2,514 1.46 Total Interest-Bearing Deposits (2) 850,224 4,025 0.47 893,147 3,125 0.35 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 27,360 63 0.23 43,988 98 0.22 Other Borrowings 17,609 693 3.94 7,172 182 2.54 Total Interest-Bearing Liabilities 895,193 4,781 0.53 944,307 3,405 0.36 Noninterest-Bearing Demand Deposits 389,553 378,374 Other Liabilities 4,072 8,168 Total Liabilities 1,288,818 1,330,849 Stockholders' Equity 117,610 133,605 Total Liabilities and Stockholders' Equity $ 1,406,428 $ 1,464,454 Net Interest Income (FTE) (Non-GAAP) (3) 43,069 40,324 Net Interest-Earning Assets (4) 429,682 429,072 Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5) 3.08 % 2.82 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.25 2.94 PPP Loans 5,666 734 12.95 45,905 2,189 4.77 (1) Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (2) Includes Deposits Held for Sale that were sold in December 2021. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. Explanation of Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Press Release contains or references, certain Non-GAAP financial measures. We believe these Non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these Non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with Non-GAAP measures which may be presented by other companies. Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands, except share and per share data) (Unaudited) Net Income (GAAP) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Adjustments (Gain) Loss on Securities (83 ) 46 199 7 (44 ) 168 (526 ) Gain on Sale of Branches — — — — (5,203 ) — (5,203 ) (Gain) Loss on Disposal of Fixed Assets — (439 ) — 8 — (431 ) 3 Tax effect 17 83 (42 ) (3 ) 1,102 55 1,202 Non-Cash Charges: Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — — 23 — 2,293 Tax Effect — — — — — — Adjusted Net Income (Non-GAAP) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding 5,104,254 5,118,627 5,156,975 5,220,887 5,314,537 5,149,312 5,392,729 Earnings per Common Share - Diluted (GAAP) $ 0.81 $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 2.18 $ 2.15 Adjusted Earnings per Common Share - Diluted (Non-GAAP) $ 0.80 $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 2.15 $ 1.95 Net Income (GAAP) (Numerator) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Assets (Denominator) 1,414,300 1,396,614 1,391,928 1,423,071 1,477,509 1,406,428 1,464,454 Return on Average Assets (GAAP) 1.16 % 1.12 % 0.03 % 0.87 % 1.87 % 0.80 % 0.79 % Adjusted Net Income (Non-GAAP) (Numerator) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Assets (Denominator) 1,414,300 1,396,614 1,391,928 1,423,071 1,477,509 1,407,413 1,455,368 Adjusted Return on Average Assets (Non-GAAP) 1.15 % 1.03 % 0.08 % 0.87 % 0.76 % 0.78 % 0.72 % Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands) (Unaudited) Net Income (GAAP) (Numerator) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Equity (GAAP) (Denominator) 107,965 114,592 118,145 130,012 131,892 117,610 133,605 Return on Average Equity (GAAP) 15.26 % 13.60 % 0.40 % 9.50 % 20.95 % 9.56 % 8.66 % Adjusted Net Income (Non-GAAP) (Numerator) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Equity (GAAP) (Denominator) 107,965 114,592 118,145 130,012 131,892 117,610 133,605 Adjusted Return on Average Equity (Non-GAAP) 15.01 % 12.53 % 0.93 % 9.54 % 8.55 % 9.39 % 7.87 % Tangible book value per common share is a Non-GAAP measure and is calculated based on tangible common equity divided by period-end common shares outstanding. Tangible common equity to tangible assets is a Non-GAAP measure and is calculated based on tangible common equity divided by tangible assets. We believe these Non-GAAP measures serve as useful tools to help evaluate the strength and discipline of the Company's capital management strategies and as an additional, conservative measure of the Company’s total value. 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 (Dollars in thousands, except share and per share data) (Unaudited) Assets (GAAP) $ 1,408,938 $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 Goodwill and Intangible Assets, Net (13,245 ) (13,691 ) (14,136 ) (14,582 ) (15,027 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,395,693 $ 1,412,229 $ 1,372,325 $ 1,424,088 $ 1,410,452 Stockholders' Equity (GAAP) $ 110,155 $ 106,706 $ 113,772 $ 122,156 $ 133,124 Goodwill and Intangible Assets, Net (13,245 ) (13,691 ) (14,136 ) (14,582 ) (15,027 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 96,910 $ 93,015 $ 99,636 $ 107,574 $ 118,097 Stockholders’ Equity to Assets (GAAP) 7.8 % 7.5 % 8.2 % 8.5 % 9.3 % Tangible Common Equity to Tangible Assets (Non-GAAP) 6.9 % 6.6 % 7.3 % 7.6 % 8.4 % Common Shares Outstanding (Denominator) 5,100,189 5,096,672 5,128,333 5,156,897 5,260,672 Book Value per Common Share (GAAP) $ 21.60 $ 20.94 $ 22.18 $ 23.69 $ 25.31 Tangible Book Value per Common Share (Non-GAAP) $ 19.00 $ 18.25 $ 19.43 $ 20.86 $ 22.45 Interest income on interest-earning assets, net interest rate spread and net interest margin are presented on a fully tax-equivalent (“FTE”) basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and securities using the federal statutory income tax rate of 21 percent. We believe the presentation of net interest income on a FTE basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice. The following table reconciles net interest income, net interest spread and net interest margin on a FTE basis for the periods indicated: Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 13,855 $ 12,287 $ 10,958 $ 10,616 $ 10,963 $ 47,716 $ 43,557 Adjustment to FTE Basis 29 31 34 40 41 134 172 Interest Income (FTE) (Non-GAAP) 13,884 12,318 10,992 10,656 11,004 47,850 43,729 Interest Expense (GAAP) 1,989 1,272 795 723 732 4,781 3,405 Net Interest Income (FTE) (Non-GAAP) $ 11,895 $ 11,046 $ 10,197 $ 9,933 $ 10,272 $ 43,069 $ 40,324 Net Interest Rate Spread (GAAP) 3.17 % 3.10 % 3.00 % 2.98 % 2.85 % 3.07 % 2.81 % Adjustment to FTE Basis 0.01 0.01 0.01 0.01 0.01 0.01 0.01 Net Interest Rate Spread (FTE) (Non-GAAP) 3.18 3.11 3.01 2.99 2.86 3.08 2.82 Net Interest Margin (GAAP) 3.45 % 3.29 % 3.12 % 3.08 % 2.95 % 3.24 % 2.92 % Adjustment to FTE Basis 0.01 0.01 0.01 0.02 0.01 0.01 0.02 Net Interest Margin (FTE) (Non-GAAP) 3.46 3.30 3.13 3.10 2.96 3.25 2.94 Adjusted efficiency ratio excludes the effect of certain non-recurring or non-cash items and represents adjusted noninterest expense divided by adjusted operating revenue. The Company evaluates its operational efficiency based on its adjusted efficiency ratio and believes it provides additional perspective on its ongoing performance as well as peer comparability. Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands) (Unaudited) Noninterest Expense (GAAP) (Numerator) $ 8,998 $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 34,891 $ 42,862 Net Interest and Dividend Income (GAAP) $ 11,866 $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 42,935 $ 40,152 Noninterest Income (GAAP) 2,360 2,739 2,105 2,613 8,689 9,820 16,280 Operating Revenue (GAAP) (Denominator) $ 14,226 $ 13,754 $ 12,268 $ 12,506 $ 18,920 $ 52,755 $ 56,432 Efficiency Ratio (GAAP) 63.25 % 64.18 % 68.55 % 69.21 % 52.71 % 66.14 % 75.95 % Noninterest Expense (GAAP) $ 8,998 $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 34,891 $ 42,862 Less: Other Real Estate Owned (Income) (38 ) (38 ) (37 ) (38 ) (30 ) (151 ) (183 ) Amortization of Intangible Assets 446 445 446 445 445 1,782 1,926 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — — 23 — 2,293 Adjusted Noninterest Expense (Non-GAAP) (Numerator) $ 8,590 $ 8,420 $ 8,001 $ 8,249 $ 9,534 $ 33,260 $ 37,648 Net Interest and Dividend Income (GAAP) $ 11,866 $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 42,935 $ 40,152 Noninterest Income (GAAP) 2,360 2,739 2,105 2,613 8,689 9,820 16,280 Less: Net Gain (Loss) on Securities 83 (46 ) (199 ) (7 ) 44 (168 ) 526 Gain on Sale of Branches — — — — 5,203 — 5,203 Net Gain (Loss) on Disposal of Fixed Assets — 439 — (8 ) — 431 (3 ) Adjusted Noninterest Income (Non-GAAP) $ 2,277 $ 2,346 $ 2,304 $ 2,628 $ 3,442 $ 9,557 $ 10,554 Adjusted Operating Revenue (Non-GAAP) (Denominator) $ 14,143 $ 13,361 $ 12,467 $ 12,521 $ 13,673 $ 52,492 $ 50,706 Adjusted Efficiency Ratio (Non-GAAP) 60.74 % 63.02 % 64.18 % 65.88 % 69.73 % 63.36 % 74.25 % Allowance for loan losses to total loans, excluding PPP loans, is a Non-GAAP measure that serves as a useful measurement to evaluate the allowance for loan losses without the impact of SBA guaranteed loans. 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 (Dollars in thousands) (Unaudited) Allowance for Loan Losses (Numerator) $ 12,819 $ 12,854 $ 12,833 $ 11,595 $ 11,582 Total Loans 1,049,873 $ 1,042,942 1,027,969 $ 1,020,642 $ 1,020,796 PPP Loans (126 ) (768 ) (3,853 ) (8,242 ) (24,523 ) Total Loans, Excluding PPP Loans (Non-GAAP) (Denominator) $ 1,049,747 $ 1,042,174 $ 1,024,116 $ 1,012,400 $ 996,273 Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP) 1.22 % 1.23 % 1.25 % 1.15 % 1.16 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230126005788/en/Contacts Company Contact: John H. Montgomery President and Chief Executive Officer Phone: (724) 225-2400 Investor Relations: Jeremy Hellman, Vice President The Equity Group Inc. Phone: (212) 836-9626 Email: jhellman@equityny.com 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 Fourth Quarter and Full Year 2022 Financial Results and Declares Quarterly Cash Dividend By: CB Financial Services, Inc. via Business Wire January 26, 2023 at 16:15 PM EST CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”) and Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of the Bank, today announced its fourth quarter and 2022 financial results. Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands, except per share data) (Unaudited) Net Income (GAAP) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Non-Recurring Items (66 ) (310 ) 157 12 (4,122 ) (208 ) (1,053 ) Adjusted Net Income (Non-GAAP) (1) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Earnings per Common Share - Diluted (GAAP) $ 0.81 $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 2.18 $ 2.15 Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1) $ 0.80 $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 2.14 $ 1.95 (1) Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted in this Press Release. 2022 Fourth Quarter Financial Highlights (Comparisons to three months ended December 31, 2021 unless otherwise noted) Net income was $4.2 million, compared to net income of $7.0 million. Current period results were driven by net interest margin expansion coupled with a reduction of noninterest expense of $974,000 for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, which benefited from a gain on sale of $5.2 million resulting from the sale of branch locations. Adjusted net income (Non-GAAP) was $4.1 million, compared to $2.8 million. Earnings per diluted common share (EPS) decreased to $0.81 from $1.31. Adjusted earnings per common share - diluted (Non-GAAP) was $0.80, compared to $0.53. Return on average assets (annualized) of 1.16%, compared to 1.87%. Adjusted return on average assets (annualized) (Non-GAAP) of 1.15%, compared to 0.76%. Return on average equity (annualized) of 15.26%, compared to 20.95% (annualized). Adjusted return on average equity (annualized) (Non-GAAP) of 15.01%, compared to 8.55%. Net interest margin (NIM) improved to 3.45% from 2.95%. Net interest and dividend income was $11.9 million, compared to $10.2 million. Noninterest income decreased to $2.4 million, compared to $8.7 million. The prior year period benefited from the recognition of $5.2 million in gain on sales of branches of two branch locations as part of branch optimization initiatives while the current year period included a decrease of income from net gain on sale of loans of $977,000 primarily the result of the sale of a nonperforming commercial real estate loan in the hotel portfolio. In addition, a decrease of $219,000 in insurance commissions was primarily driven by contingency income which resulted from the timing of lock-in amounts recorded and was partially offset by an increase in core business for commercial insurance lines. (Amounts at December 31, 2022; comparisons to December 31, 2021, unless otherwise noted) Total loans, including Payroll Protection Program (“PPP”) loans, were $1.05 billion, an increase of $29.1 million from $1.02 billion. Total loans held for investment, excluding PPP loans, increased $53.5 million, or 5.4%, to $1.05 billion compared to $996.3 million, and included increases of $24.8 million, or 27.1%, in consumer loans, and $44.7 million, or 15.2%, growth in commercial real estate loans, partially offset by decreases of $40.1 million in construction real estate and $19.0 million in commercial and industrial loans. Total loans held for investment, excluding PPP loans, as of December 31, 2022, increased $7.6 million, or 0.7%, as compared to September 30, 2022. This included increases of $8.5 million, or 13.8%, in commercial and industrial loans, $4.3 million, or 1.0%, in commercial real estate loans, and $2.5 million, or 0.8%, in residential loans, partially offset by decreases of $4.6 million, or 9.2%, in construction loans, and $3.7 million, or 2.4%, in consumer loans. Nonperforming loans to total loans was 0.55%, a decrease of 16 basis points (“bps”), compared to 0.71%. Total deposits were $1.27 billion, an increase of $41.9 million, compared to $1.23 billion. Total assets remained level at $1.43 billion. Book value per share was $21.60, compared to $20.94 as of September 30, 2022 and $25.31 as of December 31, 2021. Tangible book value per share (Non-GAAP) was $19.00, compared to $18.25 as of September 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, “In closing out what was a successful 2022, our fourth quarter results continued to benefit from margin expansion on top of consistent loan growth. Two years ago we undertook a long term strategy that consisted of first driving down our expenses in a durable manner by rationalizing our physical branch footprint while also working to make sure our operations were optimized and efficient. This effort set the stage for the reduced the non-interest expenses we enjoyed throughout 2022. With our branch optimization largely completed, in 2022 we turned our attention to driving growth through smart additions of key leadership on both the retail and commercial sides of our business. Those investments helped drive growth in our loan portfolio through 2022 which coupled with rising interest rates to yield growth in our net interest income.” Mr. Montgomery continued, “We remain watchful with respect to the overall economic climate as the Federal Reserve continues to work to rein in inflation while not tipping the country into a recession. As I have noted in the past, our credit team possesses a wealth of experience, including demonstrated success during the Great Financial Crisis just over a dozen years ago. With that experience, we are confident in our ability to navigate whatever macroeconomic headwinds we face.” Mr. Montgomery concluded, “Continuing our commitment to CB shareholders, we increased our regular quarterly dividend to $0.25 per share. In addition, we repurchased 4,620 shares during the fourth quarter under the current $10.0 million share repurchase program announced earlier in 2022. We remain well-capitalized with the ability to support growth along with these shareholder-friendly actions.” Dividend Information The Company’s Board of Directors has approved a 4.2% increase in the regular quarterly cash dividend by declaring a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about February 28, 2023, to stockholders of record as of the close of business on February 15, 2023. Stock Repurchase Program On April 21, 2022, CB announced a program to repurchase up to $10.0 million of the Company’s outstanding shares of common stock. Based on the Company’s closing stock price at January 23, 2023, the repurchase program, if fully completed, would encompass 430,906 shares, or approximately 8.4% of the shares currently outstanding. 2022 Fourth Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.6 million, or 16.0%, to $11.9 million for the three months ended December 31, 2022 compared to $10.2 million for the three months ended December 31, 2021. Net interest margin (GAAP) increased to 3.45% for the three months ended December 31, 2022 compared to 2.95% for the three months ended December 31, 2021. Fully Tax Equivalent (“FTE”) Net interest margin (Non-GAAP) increased 50 bps to 3.46% for the three months ended December 31, 2022 compared to 2.96% for the three months ended December 31, 2021. Interest and dividend income increased $2.9 million, or 26.4%, to $13.9 million for the three months ended December 31, 2022 compared to $11.0 million for the three months ended December 31, 2021. Interest income on loans increased $1.9 million, or 19.5%, to $11.8 million for the three months ended December 31, 2022 compared to $9.9 million for the three months ended December 31, 2021. The average balance of loans increased $29.9 million to $1.03 billion from $1.00 billion and the average yield increased 62 bps to 4.54% compared to 3.92%. Interest and fee income on PPP loans was $22,000 for the three months ended December 31, 2022 and didn’t impact loan yield, compared to $391,000 for the three months ended December 31, 2021, which contributed 4 bps to loan yield. The impact of the accretion of the credit mark on acquired loan portfolios was $61,000 for the three months ended December 31, 2022 compared to $83,000 for the three months ended December 31, 2021, or 2 bps in the current period compared to 3 bps in the prior period. Interest income on taxable investment securities increased $108,000, or 12.5%, to $974,000 for the three months ended December 31, 2022 compared to $866,000 for the three months ended December 31, 2021 driven by a $11.6 million increase in average balance partially coupled with a 11 bps increase in average yield. Interest expense increased $1.3 million, or 171.7%, to $2.0 million for the three months ended December 31, 2022 compared to $732,000 for the three months ended December 31, 2021. Interest expense on deposits increased $1.2 million, or 184.7%, to $1.8 million for the three months ended December 31, 2022 compared to $636,000 for the three months ended December 31, 2021. While average interest-earning deposit balances decreased $7.2 million, or 0.8%, to $887.7 million as of December 31, 2022 compared to $894.8 million as of December 31, 2021, rising interest rates led to the repricing of higher-cost demand and money market deposits and resulted in a 53 bps, or 188.0%, increase in average cost compared to the three months ended December 31, 2021. In addition, the average balance of time deposits and the related average cost decreased $38.2 million and 5 bps, respectively. These decreases are partially offset by an increase in average other borrowings of $8.1 million or 85.8% to $17.6 million as of December 31, 2022 compared to $9.5 million as of December 31, 2021, which was driven by the issuance of subordinate debt of $15.0 million in late December of 2021, and outstanding for the entire quarter ended December 31, 2022. Provision for Loan Losses There was no provision for loan losses for the three months ended December 31, 2022 or for the three months ended December 31, 2021. Noninterest income Noninterest income decreased $6.3 million, or 72.8%, to $2.4 million for the three months ended December 31, 2022, compared to $8.7 million for the three months ended December 31, 2021. The decrease was primarily related to non-recurring prior period recognition of $5.2 million gain on sale of branches as a result of branch optimization initiatives and $897,000 due to the sale of a nonperforming commercial real estate loan in the hotel portfolio. During the quarter, there was a $219,000 decrease in insurance commissions. The decrease in insurance commissions was primarily driven by contingency income which resulted from the timing of lock-in amounts received and core business including commercial and personal insurance lines. Noninterest Expense Noninterest expense decreased $974,000, or 9.8%, to $9.0 million for the three months ended December 31, 2022 compared to $10.0 million for the three months ended December 31, 2021. Salaries and benefits decreased $556,000 to $4.6 million and contracted services decreased $728,000 to $405,000 for the three months ended December 31, 2022 compared to $1.1 million for the three months ended December 31, 2021. This was a result of branch optimization initiatives completed in the prior year. These decreases were partially offset by an increase in occupancy expenses of $198,000. Statement of Financial Condition Review Assets Total assets decreased $16.5 million, or 1.16%, to $1.41 billion at both December 31, 2022, and December 31, 2021. Cash and due from banks decreased $16.0 million, or 13.3%, to $103.7 million at December 31, 2022, compared to $119.7 million at December 31, 2021. Securities decreased $34.9 million, or 15.5%, to $190.1 million at December 31, 2022, compared to $225.0 million at December 31, 2021. The Securities balance was primarily impacted by a $32.3 million decrease in the market value of the debt securities portfolio, primarily due to the increase in market interest rates. The current year included $26.8 million of purchases, and $29.2 million of pay downs. The purchases were made to earn a higher yield on excess cash. In addition, there was $168,000 decrease in the market value in the equity securities portfolio, which is primarily comprised of bank stocks. Payroll Protection Program Update PPP loans decreased $24.4 million to $126,000 at December 31, 2022 compared to $24.5 million at December 31, 2021. $5,000 of net PPP loan origination fees were unearned at December 31, 2022 compared to $678,000 at December 31, 2021. $22,000 of net PPP loan origination fees were earned in the three months ended December 31, 2022 compared to $117,000 for the three months ended September 30, 2022. Loans and Credit Quality Total loans held for investment increased $29.1 million, or 2.85%, to $1.05 billion at December 31, 2022 compared to $1.02 billion at December 31, 2021. Excluding the net decline of $24.4 million in PPP loans in the current period, loans increased $53.5 million or 5.4%. The allowance for loan losses was $12.8 million at December 31, 2022 and $11.6 million at December 31, 2021. As a result, the allowance for loan losses to total loans was 1.22% at December 31, 2022 compared to 1.13% at December 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.22% at December 31, 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 charge-offs for the three months ended December 31, 2022 were $35,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the three months ended December 31, 2021 were $74,000, or 0.03% of average loans on an annualized basis. Net charge-offs for the year ended December 31, 2022 were $2.5 million, or 0.25% of average loans on an annualized basis. Net charge-offs for the year ended December 31, 2021 were $64,000, and had an immaterial and one hundredth 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 $5.8 million at December 31, 2022 compared to $7.3 million at December 31, 2021. Current nonperforming loans to total loans ratio was 0.55% compared to 0.71% at December 31, 2021. Other Intangible assets decreased $1.8 million, or 34.0%, to $3.5 million at December 31, 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 $8.3 million, or 64.5% to $21.1 million at December 31, 2022, compared to $12.9 million at December 31, 2021. This change was primarily driven by the increase in market interest rate conditions and an increase in deferred tax assets of $7.5 million. Liabilities Total liabilities increased $6.4 million, or 0.5%, to $1.30 billion at December 31, 2022 compared to $1.29 billion at December 31, 2021. Deposits Total deposits increased $41.9 million to $1.27 billion as of December 31, 2022 compared to $1.23 billion at December 31, 2021, an increase of 3.4%. Interest-bearing and non interest-bearing demand deposits increased $39.3 million and $4.6 million, respectively, partially offset by a decrease in time deposits of $27.6 million. Average total deposits increased $45.9 million, primarily in both interest-bearing and non interest-bearing demand deposits for the three months ended December 31, 2022. The increase in interest-bearing demand deposits is primarily the result of the transition of customer deposits from securities sold under agreements to repurchase product, 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. Borrowed Funds Short-term borrowings decreased $31.2 million, or 79.5%, to $8.1 million at December 31, 2022, compared to $39.3 million at December 31, 2021. At December 31, 2022 and December 31, 2021, short-term borrowings were comprised entirely of securities sold under agreements to repurchase as noted in the above-mentioned deposit section. A portion of this decrease is due to accounts that were transitioned into other deposit products and account for most of the interest-bearing demand deposit increase. Stockholders’ Equity Stockholders’ equity decreased $23.0 million, or 17.3%, to $110.2 million at December 31, 2022, compared to $133.1 million at December 31, 2021. Key factors impacting stockholders’ equity included accumulated other comprehensive loss, which increased $25.3 million primarily due to the effect of rising market interest rates on the Company’s investment securities; the payment of $4.9 million in dividends since December 31, 2021; and activity under share repurchase programs, offset by the positive impact of $11.2 million of net income. On February 15, 2022, the Company completed its stock repurchase program that was implemented on June 10, 2021. On April 21, 2022, a new $10 million repurchase program was authorized, with the Company repurchasing 62,178 shares at an average price of $22.47 per share since the inception of the plan. In total, the Company has repurchased $4.8 million since December 31, 2021. Book value per share Book value per common share was $21.60 at December 31, 2022 compared to $25.31 at December 31, 2021, a decrease of $3.71. Tangible book value per common share (Non-GAAP) was $19.00 at December 31, 2022, compared to $22.45 at December 31, 2021, a decrease of $3.45. Refer to “Explanation of Use of Non-GAAP Financial Measures” at the end of this Press Release. About CB Financial Services, Inc. CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers a broad array of retail and commercial lending and deposit services and provides commercial and personal insurance brokerage services through Exchange Underwriters, Inc., its wholly owned subsidiary. For more information about CB Financial Services, Inc. and Community Bank, visit our website at www.communitybank.tv. Statement About Forward-Looking Statements Statements contained in this press release that are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and such forward-looking statements are subject to significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions contained in the Act. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries include, but are not limited to, general and local economic conditions, the scope and duration of economic contraction as a result of the COVID-19 pandemic and its effects on the Company’s business and that of the Company’s customers, changes in market interest rates, deposit flows, demand for loans, real estate values and competition, competitive products and pricing, the ability of our customers to make scheduled loan payments, loan delinquency rates and trends, our ability to manage the risks involved in our business, our ability to control costs and expenses, inflation, market and monetary fluctuations, changes in federal and state legislation and regulation applicable to our business, actions by our competitors, and other factors that may be disclosed in the Company’s periodic reports as filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation. CB FINANCIAL SERVICES, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION (Dollars in thousands, except share and per share data) (Unaudited) Selected Financial Condition Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Assets Cash and Due From Banks $ 103,700 $ 122,801 $ 81,121 $ 123,588 $ 119,674 Securities 190,058 193,846 213,505 231,097 224,974 Loans Real Estate: Residential 330,725 328,248 325,138 317,254 320,798 Commercial 436,805 432,516 426,105 427,227 392,124 Construction 44,923 49,502 41,277 54,227 85,028 Commercial and Industrial Commercial and Industrial 69,918 61,428 62,054 59,601 64,487 PPP 126 768 3,853 8,242 24,523 Consumer 146,927 150,615 148,921 143,422 122,152 Other 20,449 19,865 20,621 10,669 11,684 Total Loans 1,049,873 1,042,942 1,027,969 1,020,642 1,020,796 Allowance for Loan Losses (12,819 ) (12,854 ) (12,833 ) (11,595 ) (11,582 ) Loans, Net 1,037,054 1,030,088 1,015,136 1,009,047 1,009,214 Premises and Equipment, Net 17,844 18,064 18,196 18,349 18,399 Bank-Owned Life Insurance 25,893 25,750 25,610 25,468 25,332 Goodwill 9,732 9,732 9,732 9,732 9,732 Intangible Assets, Net 3,513 3,959 4,404 4,850 5,295 Accrued Interest and Other Assets 21,144 21,680 18,757 16,539 12,859 Total Assets $ 1,408,938 $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 Liabilities Deposits Non-Interest Bearing Demand Deposits $ 390,405 $ 407,107 $ 389,127 $ 400,105 $ 385,775 Interest Bearing Demand Accounts 311,825 298,755 265,347 280,455 272,518 Money Market Accounts 209,125 198,715 185,308 192,929 192,125 Savings Accounts 248,022 250,378 250,226 247,589 239,482 Time Deposits 109,126 120,879 125,182 129,235 136,713 Total Deposits 1,268,503 1,275,834 1,215,190 1,250,313 1,226,613 Short-Term Borrowings 8,060 18,108 32,178 39,219 39,266 Other Borrowings 14,638 17,627 17,618 17,607 17,601 Accrued Interest Payable and Other Liabilities 7,582 7,645 7,703 9,375 8,875 Total Liabilities 1,298,783 1,319,214 1,272,689 1,316,514 1,292,355 Stockholders’ Equity $ 110,155 $ 106,706 $ 113,772 $ 122,156 $ 133,124 Total Liabilities and Stockholders’ Equity $ 1,408,938 $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended Year Ended Selected Operating Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Interest and Dividend Income Loans, Including Fees $ 11,835 $ 10,815 $ 9,733 $ 9,551 $ 9,904 $ 41,933 $ 39,704 Securities: Taxable 974 985 988 905 866 3,852 2,990 Tax-Exempt 40 49 57 66 66 213 289 Dividends 28 21 20 22 21 91 84 Other Interest and Dividend Income 978 417 160 72 106 1,627 490 Total Interest and Dividend Income 13,855 12,287 10,958 10,616 10,963 47,716 43,557 Interest Expense Deposits 1,811 1,079 604 530 636 4,025 3,125 Short-Term Borrowings 7 19 18 19 26 63 98 Other Borrowings 171 174 173 174 70 693 182 Total Interest Expense 1,989 1,272 795 723 732 4,781 3,405 Net Interest and Dividend Income 11,866 11,015 10,163 9,893 10,231 42,935 40,152 Provision (Recovery) for Loan Losses — — 3,784 — 75 3,784 (1,125 ) Net Interest and Dividend Income After Provision (Recovery) for Loan Losses 11,866 11,015 6,379 9,893 10,156 39,151 41,277 Noninterest Income: Service Fees 530 544 559 526 569 2,160 2,331 Insurance Commissions 1,399 1,368 1,369 1,798 1,618 5,934 5,616 Other Commissions 157 244 179 89 90 669 521 Net Gain on Sales of Loans — — — — 977 — 1,143 Net Gain (Loss) on Securities 83 (46 ) (199 ) (7 ) 44 (168 ) 526 Net Gain on Purchased Tax Credits 14 14 14 14 17 57 70 Gain on Sale of Branches — — — �� — 5,203 — 5,203 Net Gain (Loss) on Disposal of Fixed Assets — 439 — (8 ) — 431 (3 ) Income from Bank-Owned Life Insurance 143 140 142 136 142 561 553 Other Income 34 36 41 65 29 176 320 Total Noninterest Income 2,360 2,739 2,105 2,613 8,689 9,820 16,280 Noninterest Expense: Salaries and Employee Benefits 4,625 4,739 4,539 4,565 5,181 18,469 19,938 Occupancy 817 768 776 686 619 3,047 2,968 Equipment 178 170 182 210 252 739 1,034 Data Processing 681 540 446 485 488 2,152 2,154 FDIC Assessment 154 147 128 209 222 638 1,014 PA Shares Tax 258 240 240 240 173 979 887 Contracted Services 405 288 348 587 1,133 1,628 4,011 Legal and Professional Fees 362 334 389 152 206 1,237 994 Advertising 165 131 115 116 191 527 749 Other Real Estate Owned (Income) (38 ) (38 ) (37 ) (38 ) (30 ) (151 ) (183 ) Amortization of Intangible Assets 446 445 446 445 445 1,782 1,926 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown of Fixed Assets — — — — 23 — 2,293 Other 945 1,063 838 999 1,069 3,844 3,899 Total Noninterest Expense 8,998 8,827 8,410 8,656 9,972 34,891 42,862 Income Before Income Tax Expense (Benefit) 5,228 4,927 74 3,850 8,873 14,080 14,695 Income Tax Expense (Benefit) 1,076 998 (44 ) 803 1,908 2,833 3,125 Net Income $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Three Months Ended Year Ended Per Common Share Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.96 $ 0.96 Earnings Per Common Share - Basic 0.81 0.77 0.02 0.59 1.32 2.19 2.15 Earnings Per Common Share - Diluted 0.81 0.77 0.02 0.58 1.31 2.18 2.15 Adjusted Earnings Per Common Share - Diluted (Non-GAAP) (1) 0.80 0.71 0.05 0.59 0.53 2.14 1.95 Weighted Average Common Shares Outstanding - Basic 5,095,237 5,106,861 5,147,846 5,198,194 5,291,795 5,136,670 5,382,441 Weighted Average Common Shares Outstanding - Diluted 5,104,254 5,118,627 5,156,975 5,220,887 5,314,537 5,149,312 5,392,729 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Common Shares Outstanding 5,100,189 5,096,672 5,128,333 5,156,897 5,260,672 Book Value Per Common Share $ 21.60 $ 20.94 $ 22.18 $ 23.69 $ 25.31 Tangible Book Value per Common Share (1) 19.00 18.25 19.43 20.86 22.45 Stockholders’ Equity to Assets 7.8 % 7.5 % 8.2 % 8.5 % 9.3 % Tangible Common Equity to Tangible Assets (1) 6.9 6.6 7.3 7.6 8.4 Three Months Ended Year Ended Selected Financial Ratios (2) 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Return on Average Assets 1.16 % 1.12 % 0.03 % 0.87 % 1.87 % 0.80 % 0.79 % Adjusted Return on Average Assets (1) 1.15 1.03 0.08 0.87 0.76 0.78 0.72 Return on Average Equity 15.26 13.60 0.40 9.50 20.95 9.56 8.66 Adjusted Return on Average Equity (1) 15.01 12.53 0.93 9.54 8.55 9.39 7.87 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 149.04 149.41 149.03 144.48 145.09 148.00 145.44 Average Equity to Average Assets 7.63 8.20 8.49 9.14 8.93 8.36 9.12 Net Interest Rate Spread 3.17 3.10 3.00 2.98 2.85 3.07 2.81 Net Interest Rate Spread (FTE) (1) 3.18 3.11 3.01 2.99 2.86 3.08 2.82 Net Interest Margin 3.45 3.29 3.12 3.08 2.95 3.24 2.92 Net Interest Margin (FTE) (1) 3.46 3.30 3.13 3.10 2.96 3.25 2.94 Net Charge-offs and (Recoveries) to Average Loans 0.01 �� (0.01 ) 1.01 (0.01 ) 0.03 0.25 0.01 Efficiency Ratio 63.25 64.18 68.55 69.21 52.71 66.14 75.95 Adjusted Efficiency Ratio (1) 60.74 63.02 64.18 65.88 69.73 63.36 74.25 Asset Quality Ratios 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Allowance for Loan Losses to Total Loans 1.22 % 1.23 % 1.25 % 1.14 % 1.13 % Allowance for Loan Losses to Total Loans, Excluding PPP Loans(1) 1.22 1.23 1.25 1.15 1.16 Allowance for Loan Losses to Nonperforming Loans (3) 221.06 218.61 219.89 158.88 159.40 Allowance for Loan Losses to Noncurrent Loans (4) 320.64 318.96 329.47 218.28 233.37 Delinquent and Nonaccrual Loans to Total Loans (4) (5) 0.81 0.46 0.45 0.79 0.78 Nonperforming Loans to Total Loans (3) 0.55 0.56 0.57 0.72 0.71 Noncurrent Loans to Total Loans (4) 0.38 0.39 0.38 0.52 0.49 Nonperforming Assets to Total Assets (6) 0.41 0.41 0.42 0.51 0.51 Capital Ratios (7) 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.33 % 12.02 % 11.83 % 11.99 % 11.95 % Tier 1 Capital (to Risk Weighted Assets) 12.33 12.02 11.83 11.99 11.95 Total Capital (to Risk Weighted Assets) 13.58 13.27 13.08 13.20 13.18 Tier 1 Leverage (to Adjusted Total Assets) 8.66 8.51 8.33 8.19 7.76 (1) Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (2) Interim period ratios are calculated on an annualized basis. (3) Nonperforming loans consist of nonaccrual loans, accruing loans that are 90 days or more past due, and troubled debt restructured loans. (4) Noncurrent loans consist of nonaccrual loans and accruing loans that are 90 days or more past due. (5) Delinquent loans consist of accruing loans that are 30 days or more past due. (6) Nonperforming assets consist of nonperforming loans and other real estate owned. (7) Capital ratios are for Community Bank only. Certain items previously reported may have been reclassified to conform with the current reporting period’s format. AVERAGE BALANCES AND YIELDS Three Months Ended December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) (Dollars in thousands) (Unaudited) Assets: Interest-Earning Assets: Loans, Net (2) $ 1,034,714 $ 11,853 4.54 % $ 1,024,363 $ 10,833 4.20 % $ 1,007,874 $ 9,751 3.88 % $ 1,009,210 $ 9,573 3.85 % $ 1,004,827 $ 9,927 3.92 % Debt Securities Taxable 216,915 974 1.80 222,110 985 1.77 228,315 988 1.73 215,906 905 1.68 205,328 866 1.69 Exempt From Federal Tax 6,277 51 3.25 7,998 62 3.10 9,109 73 3.21 10,195 84 3.30 10,477 84 3.21 Equity Securities 2,693 28 4.16 2,693 21 3.12 2,693 20 2.97 2,693 22 3.27 2,693 21 3.12 Interest Bearing Deposits at Banks 99,108 939 3.79 67,870 378 2.23 56,379 122 0.87 59,296 33 0.22 150,102 61 0.16 Other Interest-Earning Assets 2,875 39 5.38 2,784 39 5.56 3,235 38 4.71 3,483 39 4.54 3,475 45 5.14 Total Interest-Earning Assets 1,362,582 13,884 4.04 1,327,818 12,318 3.68 1,307,605 10,992 3.37 1,300,783 10,656 3.32 1,376,902 11,004 3.17 Noninterest-Earning Assets 51,718 68,796 84,323 122,288 100,607 Total Assets $ 1,414,300 $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (3) $ 315,352 $ 810 1.02 % $ 278,412 $ 393 0.56 % $ 260,655 $ 111 0.17 $ 276,603 $ 48 0.07 $ 278,546 $ 51 0.07 % Savings (3) 249,948 29 0.05 251,148 20 0.03 248,356 20 0.03 243,786 19 0.03 252,387 20 0.03 Money Market (3) 206,192 604 1.16 189,371 269 0.56 188,804 61 0.13 192,425 41 0.09 209,572 57 0.11 Time Deposits (3) 116,172 368 1.26 123,438 397 1.28 127,832 412 1.29 132,015 422 1.30 154,342 508 1.31 Total Interest-Bearing Deposits (3) 887,664 1,811 0.81 842,369 1,079 0.51 825,647 604 0.29 844,829 530 0.25 894,847 636 0.28 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 8,985 7 0.31 28,738 19 0.26 34,135 18 0.21 37,884 19 0.20 44,709 26 0.23 Other Borrowings 17,598 171 3.86 17,621 174 3.92 17,611 173 3.94 17,604 174 4.01 9,474 70 2.93 Total Interest-Bearing Liabilities 914,247 1,989 0.86 888,728 1,272 0.57 877,393 795 0.36 900,317 723 0.33 949,030 732 0.31 Noninterest-Bearing Demand Deposits 391,300 390,658 391,975 384,188 388,787 Other Liabilities 788 2,636 4,415 8,554 7,800 Total Liabilities 1,306,335 1,282,022 1,273,783 1,293,059 1,345,617 Stockholders' Equity 107,965 114,592 118,145 130,012 131,892 Total Liabilities and Stockholders' Equity $ 1,414,300 $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 Net Interest Income (FTE) (Non-GAAP) (4) $ 11,895 $ 11,046 $ 10,197 $ 9,933 $ 10,272 Net Interest-Earning Assets (5) 448,335 439,090 430,212 400,466 427,872 Net Interest Rate Spread (FTE) (Non-GAAP) (4) (6) 3.18 % 3.11 % 3.01 % 2.99 % 2.86 % Net Interest Margin (FTE) (Non-GAAP) (4)(7) 3.46 3.30 3.13 3.10 2.96 PPP Loans 216 22 40.41 2,424 123 20.13 5,546 144 10.41 14,673 445 12.30 29,067 391 5.34 (1) Annualized based on three months ended results. (2) Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Includes Deposits Held for Sale that were sold in December 2021. (4) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (6) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (7) Net interest margin represents annualized net interest income divided by average total interest-earning assets. AVERAGE BALANCES AND YIELDS Year Ended December 31, 2022 December 31, 2021 Average Balance Interest and Dividends Yield /Cost Average Balance Interest and Dividends Yield /Cost (Dollars in thousands) (Unaudited) Assets: Interest-Earning Assets: Loans, Net (1) $ 1,019,124 $ 42,010 4.12 % $ 1,014,405 $ 39,799 3.92 % Debt Securities Taxable 220,818 3,852 1.74 162,987 2,990 1.83 Exempt From Federal Tax 8,383 270 3.22 11,829 366 3.09 Marketable Equity Securities 2,693 91 3.38 2,657 84 3.16 Interest Bearing Deposits at Banks 70,765 1,473 2.08 177,768 304 0.17 Other Interest-Earning Assets 3,092 154 4.98 3,733 186 4.98 Total Interest-Earning Assets 1,324,875 47,850 3.61 1,373,379 43,729 3.18 Noninterest-Earning Assets 81,553 91,075 Total Assets $ 1,406,428 $ 1,464,454 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (2) $ 282,850 $ 1,362 0.48 % $ 272,256 $ 232 0.09 % Savings (2) 248,334 88 0.04 247,864 98 0.04 Money Market (2) 194,223 976 0.50 201,222 281 0.14 Time Deposits (2) 124,817 1,599 1.28 171,805 2,514 1.46 Total Interest-Bearing Deposits (2) 850,224 4,025 0.47 893,147 3,125 0.35 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 27,360 63 0.23 43,988 98 0.22 Other Borrowings 17,609 693 3.94 7,172 182 2.54 Total Interest-Bearing Liabilities 895,193 4,781 0.53 944,307 3,405 0.36 Noninterest-Bearing Demand Deposits 389,553 378,374 Other Liabilities 4,072 8,168 Total Liabilities 1,288,818 1,330,849 Stockholders' Equity 117,610 133,605 Total Liabilities and Stockholders' Equity $ 1,406,428 $ 1,464,454 Net Interest Income (FTE) (Non-GAAP) (3) 43,069 40,324 Net Interest-Earning Assets (4) 429,682 429,072 Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5) 3.08 % 2.82 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.25 2.94 PPP Loans 5,666 734 12.95 45,905 2,189 4.77 (1) Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (2) Includes Deposits Held for Sale that were sold in December 2021. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. Explanation of Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Press Release contains or references, certain Non-GAAP financial measures. We believe these Non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these Non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with Non-GAAP measures which may be presented by other companies. Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands, except share and per share data) (Unaudited) Net Income (GAAP) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Adjustments (Gain) Loss on Securities (83 ) 46 199 7 (44 ) 168 (526 ) Gain on Sale of Branches — — — — (5,203 ) — (5,203 ) (Gain) Loss on Disposal of Fixed Assets — (439 ) — 8 — (431 ) 3 Tax effect 17 83 (42 ) (3 ) 1,102 55 1,202 Non-Cash Charges: Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — — 23 — 2,293 Tax Effect — — — — — — Adjusted Net Income (Non-GAAP) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding 5,104,254 5,118,627 5,156,975 5,220,887 5,314,537 5,149,312 5,392,729 Earnings per Common Share - Diluted (GAAP) $ 0.81 $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 2.18 $ 2.15 Adjusted Earnings per Common Share - Diluted (Non-GAAP) $ 0.80 $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 2.15 $ 1.95 Net Income (GAAP) (Numerator) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Assets (Denominator) 1,414,300 1,396,614 1,391,928 1,423,071 1,477,509 1,406,428 1,464,454 Return on Average Assets (GAAP) 1.16 % 1.12 % 0.03 % 0.87 % 1.87 % 0.80 % 0.79 % Adjusted Net Income (Non-GAAP) (Numerator) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Assets (Denominator) 1,414,300 1,396,614 1,391,928 1,423,071 1,477,509 1,407,413 1,455,368 Adjusted Return on Average Assets (Non-GAAP) 1.15 % 1.03 % 0.08 % 0.87 % 0.76 % 0.78 % 0.72 % Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands) (Unaudited) Net Income (GAAP) (Numerator) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Equity (GAAP) (Denominator) 107,965 114,592 118,145 130,012 131,892 117,610 133,605 Return on Average Equity (GAAP) 15.26 % 13.60 % 0.40 % 9.50 % 20.95 % 9.56 % 8.66 % Adjusted Net Income (Non-GAAP) (Numerator) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Equity (GAAP) (Denominator) 107,965 114,592 118,145 130,012 131,892 117,610 133,605 Adjusted Return on Average Equity (Non-GAAP) 15.01 % 12.53 % 0.93 % 9.54 % 8.55 % 9.39 % 7.87 % Tangible book value per common share is a Non-GAAP measure and is calculated based on tangible common equity divided by period-end common shares outstanding. Tangible common equity to tangible assets is a Non-GAAP measure and is calculated based on tangible common equity divided by tangible assets. We believe these Non-GAAP measures serve as useful tools to help evaluate the strength and discipline of the Company's capital management strategies and as an additional, conservative measure of the Company’s total value. 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 (Dollars in thousands, except share and per share data) (Unaudited) Assets (GAAP) $ 1,408,938 $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 Goodwill and Intangible Assets, Net (13,245 ) (13,691 ) (14,136 ) (14,582 ) (15,027 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,395,693 $ 1,412,229 $ 1,372,325 $ 1,424,088 $ 1,410,452 Stockholders' Equity (GAAP) $ 110,155 $ 106,706 $ 113,772 $ 122,156 $ 133,124 Goodwill and Intangible Assets, Net (13,245 ) (13,691 ) (14,136 ) (14,582 ) (15,027 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 96,910 $ 93,015 $ 99,636 $ 107,574 $ 118,097 Stockholders’ Equity to Assets (GAAP) 7.8 % 7.5 % 8.2 % 8.5 % 9.3 % Tangible Common Equity to Tangible Assets (Non-GAAP) 6.9 % 6.6 % 7.3 % 7.6 % 8.4 % Common Shares Outstanding (Denominator) 5,100,189 5,096,672 5,128,333 5,156,897 5,260,672 Book Value per Common Share (GAAP) $ 21.60 $ 20.94 $ 22.18 $ 23.69 $ 25.31 Tangible Book Value per Common Share (Non-GAAP) $ 19.00 $ 18.25 $ 19.43 $ 20.86 $ 22.45 Interest income on interest-earning assets, net interest rate spread and net interest margin are presented on a fully tax-equivalent (“FTE”) basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and securities using the federal statutory income tax rate of 21 percent. We believe the presentation of net interest income on a FTE basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice. The following table reconciles net interest income, net interest spread and net interest margin on a FTE basis for the periods indicated: Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 13,855 $ 12,287 $ 10,958 $ 10,616 $ 10,963 $ 47,716 $ 43,557 Adjustment to FTE Basis 29 31 34 40 41 134 172 Interest Income (FTE) (Non-GAAP) 13,884 12,318 10,992 10,656 11,004 47,850 43,729 Interest Expense (GAAP) 1,989 1,272 795 723 732 4,781 3,405 Net Interest Income (FTE) (Non-GAAP) $ 11,895 $ 11,046 $ 10,197 $ 9,933 $ 10,272 $ 43,069 $ 40,324 Net Interest Rate Spread (GAAP) 3.17 % 3.10 % 3.00 % 2.98 % 2.85 % 3.07 % 2.81 % Adjustment to FTE Basis 0.01 0.01 0.01 0.01 0.01 0.01 0.01 Net Interest Rate Spread (FTE) (Non-GAAP) 3.18 3.11 3.01 2.99 2.86 3.08 2.82 Net Interest Margin (GAAP) 3.45 % 3.29 % 3.12 % 3.08 % 2.95 % 3.24 % 2.92 % Adjustment to FTE Basis 0.01 0.01 0.01 0.02 0.01 0.01 0.02 Net Interest Margin (FTE) (Non-GAAP) 3.46 3.30 3.13 3.10 2.96 3.25 2.94 Adjusted efficiency ratio excludes the effect of certain non-recurring or non-cash items and represents adjusted noninterest expense divided by adjusted operating revenue. The Company evaluates its operational efficiency based on its adjusted efficiency ratio and believes it provides additional perspective on its ongoing performance as well as peer comparability. Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands) (Unaudited) Noninterest Expense (GAAP) (Numerator) $ 8,998 $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 34,891 $ 42,862 Net Interest and Dividend Income (GAAP) $ 11,866 $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 42,935 $ 40,152 Noninterest Income (GAAP) 2,360 2,739 2,105 2,613 8,689 9,820 16,280 Operating Revenue (GAAP) (Denominator) $ 14,226 $ 13,754 $ 12,268 $ 12,506 $ 18,920 $ 52,755 $ 56,432 Efficiency Ratio (GAAP) 63.25 % 64.18 % 68.55 % 69.21 % 52.71 % 66.14 % 75.95 % Noninterest Expense (GAAP) $ 8,998 $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 34,891 $ 42,862 Less: Other Real Estate Owned (Income) (38 ) (38 ) (37 ) (38 ) (30 ) (151 ) (183 ) Amortization of Intangible Assets 446 445 446 445 445 1,782 1,926 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — — 23 — 2,293 Adjusted Noninterest Expense (Non-GAAP) (Numerator) $ 8,590 $ 8,420 $ 8,001 $ 8,249 $ 9,534 $ 33,260 $ 37,648 Net Interest and Dividend Income (GAAP) $ 11,866 $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 42,935 $ 40,152 Noninterest Income (GAAP) 2,360 2,739 2,105 2,613 8,689 9,820 16,280 Less: Net Gain (Loss) on Securities 83 (46 ) (199 ) (7 ) 44 (168 ) 526 Gain on Sale of Branches — — — — 5,203 — 5,203 Net Gain (Loss) on Disposal of Fixed Assets — 439 — (8 ) — 431 (3 ) Adjusted Noninterest Income (Non-GAAP) $ 2,277 $ 2,346 $ 2,304 $ 2,628 $ 3,442 $ 9,557 $ 10,554 Adjusted Operating Revenue (Non-GAAP) (Denominator) $ 14,143 $ 13,361 $ 12,467 $ 12,521 $ 13,673 $ 52,492 $ 50,706 Adjusted Efficiency Ratio (Non-GAAP) 60.74 % 63.02 % 64.18 % 65.88 % 69.73 % 63.36 % 74.25 % Allowance for loan losses to total loans, excluding PPP loans, is a Non-GAAP measure that serves as a useful measurement to evaluate the allowance for loan losses without the impact of SBA guaranteed loans. 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 (Dollars in thousands) (Unaudited) Allowance for Loan Losses (Numerator) $ 12,819 $ 12,854 $ 12,833 $ 11,595 $ 11,582 Total Loans 1,049,873 $ 1,042,942 1,027,969 $ 1,020,642 $ 1,020,796 PPP Loans (126 ) (768 ) (3,853 ) (8,242 ) (24,523 ) Total Loans, Excluding PPP Loans (Non-GAAP) (Denominator) $ 1,049,747 $ 1,042,174 $ 1,024,116 $ 1,012,400 $ 996,273 Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP) 1.22 % 1.23 % 1.25 % 1.15 % 1.16 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230126005788/en/Contacts Company Contact: John H. Montgomery President and Chief Executive Officer Phone: (724) 225-2400 Investor Relations: Jeremy Hellman, Vice President The Equity Group Inc. Phone: (212) 836-9626 Email: jhellman@equityny.com
CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”) and Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of the Bank, today announced its fourth quarter and 2022 financial results. Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands, except per share data) (Unaudited) Net Income (GAAP) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Non-Recurring Items (66 ) (310 ) 157 12 (4,122 ) (208 ) (1,053 ) Adjusted Net Income (Non-GAAP) (1) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Earnings per Common Share - Diluted (GAAP) $ 0.81 $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 2.18 $ 2.15 Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1) $ 0.80 $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 2.14 $ 1.95 (1) Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted in this Press Release. 2022 Fourth Quarter Financial Highlights (Comparisons to three months ended December 31, 2021 unless otherwise noted) Net income was $4.2 million, compared to net income of $7.0 million. Current period results were driven by net interest margin expansion coupled with a reduction of noninterest expense of $974,000 for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, which benefited from a gain on sale of $5.2 million resulting from the sale of branch locations. Adjusted net income (Non-GAAP) was $4.1 million, compared to $2.8 million. Earnings per diluted common share (EPS) decreased to $0.81 from $1.31. Adjusted earnings per common share - diluted (Non-GAAP) was $0.80, compared to $0.53. Return on average assets (annualized) of 1.16%, compared to 1.87%. Adjusted return on average assets (annualized) (Non-GAAP) of 1.15%, compared to 0.76%. Return on average equity (annualized) of 15.26%, compared to 20.95% (annualized). Adjusted return on average equity (annualized) (Non-GAAP) of 15.01%, compared to 8.55%. Net interest margin (NIM) improved to 3.45% from 2.95%. Net interest and dividend income was $11.9 million, compared to $10.2 million. Noninterest income decreased to $2.4 million, compared to $8.7 million. The prior year period benefited from the recognition of $5.2 million in gain on sales of branches of two branch locations as part of branch optimization initiatives while the current year period included a decrease of income from net gain on sale of loans of $977,000 primarily the result of the sale of a nonperforming commercial real estate loan in the hotel portfolio. In addition, a decrease of $219,000 in insurance commissions was primarily driven by contingency income which resulted from the timing of lock-in amounts recorded and was partially offset by an increase in core business for commercial insurance lines. (Amounts at December 31, 2022; comparisons to December 31, 2021, unless otherwise noted) Total loans, including Payroll Protection Program (“PPP”) loans, were $1.05 billion, an increase of $29.1 million from $1.02 billion. Total loans held for investment, excluding PPP loans, increased $53.5 million, or 5.4%, to $1.05 billion compared to $996.3 million, and included increases of $24.8 million, or 27.1%, in consumer loans, and $44.7 million, or 15.2%, growth in commercial real estate loans, partially offset by decreases of $40.1 million in construction real estate and $19.0 million in commercial and industrial loans. Total loans held for investment, excluding PPP loans, as of December 31, 2022, increased $7.6 million, or 0.7%, as compared to September 30, 2022. This included increases of $8.5 million, or 13.8%, in commercial and industrial loans, $4.3 million, or 1.0%, in commercial real estate loans, and $2.5 million, or 0.8%, in residential loans, partially offset by decreases of $4.6 million, or 9.2%, in construction loans, and $3.7 million, or 2.4%, in consumer loans. Nonperforming loans to total loans was 0.55%, a decrease of 16 basis points (“bps”), compared to 0.71%. Total deposits were $1.27 billion, an increase of $41.9 million, compared to $1.23 billion. Total assets remained level at $1.43 billion. Book value per share was $21.60, compared to $20.94 as of September 30, 2022 and $25.31 as of December 31, 2021. Tangible book value per share (Non-GAAP) was $19.00, compared to $18.25 as of September 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, “In closing out what was a successful 2022, our fourth quarter results continued to benefit from margin expansion on top of consistent loan growth. Two years ago we undertook a long term strategy that consisted of first driving down our expenses in a durable manner by rationalizing our physical branch footprint while also working to make sure our operations were optimized and efficient. This effort set the stage for the reduced the non-interest expenses we enjoyed throughout 2022. With our branch optimization largely completed, in 2022 we turned our attention to driving growth through smart additions of key leadership on both the retail and commercial sides of our business. Those investments helped drive growth in our loan portfolio through 2022 which coupled with rising interest rates to yield growth in our net interest income.” Mr. Montgomery continued, “We remain watchful with respect to the overall economic climate as the Federal Reserve continues to work to rein in inflation while not tipping the country into a recession. As I have noted in the past, our credit team possesses a wealth of experience, including demonstrated success during the Great Financial Crisis just over a dozen years ago. With that experience, we are confident in our ability to navigate whatever macroeconomic headwinds we face.” Mr. Montgomery concluded, “Continuing our commitment to CB shareholders, we increased our regular quarterly dividend to $0.25 per share. In addition, we repurchased 4,620 shares during the fourth quarter under the current $10.0 million share repurchase program announced earlier in 2022. We remain well-capitalized with the ability to support growth along with these shareholder-friendly actions.” Dividend Information The Company’s Board of Directors has approved a 4.2% increase in the regular quarterly cash dividend by declaring a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about February 28, 2023, to stockholders of record as of the close of business on February 15, 2023. Stock Repurchase Program On April 21, 2022, CB announced a program to repurchase up to $10.0 million of the Company’s outstanding shares of common stock. Based on the Company’s closing stock price at January 23, 2023, the repurchase program, if fully completed, would encompass 430,906 shares, or approximately 8.4% of the shares currently outstanding. 2022 Fourth Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.6 million, or 16.0%, to $11.9 million for the three months ended December 31, 2022 compared to $10.2 million for the three months ended December 31, 2021. Net interest margin (GAAP) increased to 3.45% for the three months ended December 31, 2022 compared to 2.95% for the three months ended December 31, 2021. Fully Tax Equivalent (“FTE”) Net interest margin (Non-GAAP) increased 50 bps to 3.46% for the three months ended December 31, 2022 compared to 2.96% for the three months ended December 31, 2021. Interest and dividend income increased $2.9 million, or 26.4%, to $13.9 million for the three months ended December 31, 2022 compared to $11.0 million for the three months ended December 31, 2021. Interest income on loans increased $1.9 million, or 19.5%, to $11.8 million for the three months ended December 31, 2022 compared to $9.9 million for the three months ended December 31, 2021. The average balance of loans increased $29.9 million to $1.03 billion from $1.00 billion and the average yield increased 62 bps to 4.54% compared to 3.92%. Interest and fee income on PPP loans was $22,000 for the three months ended December 31, 2022 and didn’t impact loan yield, compared to $391,000 for the three months ended December 31, 2021, which contributed 4 bps to loan yield. The impact of the accretion of the credit mark on acquired loan portfolios was $61,000 for the three months ended December 31, 2022 compared to $83,000 for the three months ended December 31, 2021, or 2 bps in the current period compared to 3 bps in the prior period. Interest income on taxable investment securities increased $108,000, or 12.5%, to $974,000 for the three months ended December 31, 2022 compared to $866,000 for the three months ended December 31, 2021 driven by a $11.6 million increase in average balance partially coupled with a 11 bps increase in average yield. Interest expense increased $1.3 million, or 171.7%, to $2.0 million for the three months ended December 31, 2022 compared to $732,000 for the three months ended December 31, 2021. Interest expense on deposits increased $1.2 million, or 184.7%, to $1.8 million for the three months ended December 31, 2022 compared to $636,000 for the three months ended December 31, 2021. While average interest-earning deposit balances decreased $7.2 million, or 0.8%, to $887.7 million as of December 31, 2022 compared to $894.8 million as of December 31, 2021, rising interest rates led to the repricing of higher-cost demand and money market deposits and resulted in a 53 bps, or 188.0%, increase in average cost compared to the three months ended December 31, 2021. In addition, the average balance of time deposits and the related average cost decreased $38.2 million and 5 bps, respectively. These decreases are partially offset by an increase in average other borrowings of $8.1 million or 85.8% to $17.6 million as of December 31, 2022 compared to $9.5 million as of December 31, 2021, which was driven by the issuance of subordinate debt of $15.0 million in late December of 2021, and outstanding for the entire quarter ended December 31, 2022. Provision for Loan Losses There was no provision for loan losses for the three months ended December 31, 2022 or for the three months ended December 31, 2021. Noninterest income Noninterest income decreased $6.3 million, or 72.8%, to $2.4 million for the three months ended December 31, 2022, compared to $8.7 million for the three months ended December 31, 2021. The decrease was primarily related to non-recurring prior period recognition of $5.2 million gain on sale of branches as a result of branch optimization initiatives and $897,000 due to the sale of a nonperforming commercial real estate loan in the hotel portfolio. During the quarter, there was a $219,000 decrease in insurance commissions. The decrease in insurance commissions was primarily driven by contingency income which resulted from the timing of lock-in amounts received and core business including commercial and personal insurance lines. Noninterest Expense Noninterest expense decreased $974,000, or 9.8%, to $9.0 million for the three months ended December 31, 2022 compared to $10.0 million for the three months ended December 31, 2021. Salaries and benefits decreased $556,000 to $4.6 million and contracted services decreased $728,000 to $405,000 for the three months ended December 31, 2022 compared to $1.1 million for the three months ended December 31, 2021. This was a result of branch optimization initiatives completed in the prior year. These decreases were partially offset by an increase in occupancy expenses of $198,000. Statement of Financial Condition Review Assets Total assets decreased $16.5 million, or 1.16%, to $1.41 billion at both December 31, 2022, and December 31, 2021. Cash and due from banks decreased $16.0 million, or 13.3%, to $103.7 million at December 31, 2022, compared to $119.7 million at December 31, 2021. Securities decreased $34.9 million, or 15.5%, to $190.1 million at December 31, 2022, compared to $225.0 million at December 31, 2021. The Securities balance was primarily impacted by a $32.3 million decrease in the market value of the debt securities portfolio, primarily due to the increase in market interest rates. The current year included $26.8 million of purchases, and $29.2 million of pay downs. The purchases were made to earn a higher yield on excess cash. In addition, there was $168,000 decrease in the market value in the equity securities portfolio, which is primarily comprised of bank stocks. Payroll Protection Program Update PPP loans decreased $24.4 million to $126,000 at December 31, 2022 compared to $24.5 million at December 31, 2021. $5,000 of net PPP loan origination fees were unearned at December 31, 2022 compared to $678,000 at December 31, 2021. $22,000 of net PPP loan origination fees were earned in the three months ended December 31, 2022 compared to $117,000 for the three months ended September 30, 2022. Loans and Credit Quality Total loans held for investment increased $29.1 million, or 2.85%, to $1.05 billion at December 31, 2022 compared to $1.02 billion at December 31, 2021. Excluding the net decline of $24.4 million in PPP loans in the current period, loans increased $53.5 million or 5.4%. The allowance for loan losses was $12.8 million at December 31, 2022 and $11.6 million at December 31, 2021. As a result, the allowance for loan losses to total loans was 1.22% at December 31, 2022 compared to 1.13% at December 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.22% at December 31, 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 charge-offs for the three months ended December 31, 2022 were $35,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the three months ended December 31, 2021 were $74,000, or 0.03% of average loans on an annualized basis. Net charge-offs for the year ended December 31, 2022 were $2.5 million, or 0.25% of average loans on an annualized basis. Net charge-offs for the year ended December 31, 2021 were $64,000, and had an immaterial and one hundredth 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 $5.8 million at December 31, 2022 compared to $7.3 million at December 31, 2021. Current nonperforming loans to total loans ratio was 0.55% compared to 0.71% at December 31, 2021. Other Intangible assets decreased $1.8 million, or 34.0%, to $3.5 million at December 31, 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 $8.3 million, or 64.5% to $21.1 million at December 31, 2022, compared to $12.9 million at December 31, 2021. This change was primarily driven by the increase in market interest rate conditions and an increase in deferred tax assets of $7.5 million. Liabilities Total liabilities increased $6.4 million, or 0.5%, to $1.30 billion at December 31, 2022 compared to $1.29 billion at December 31, 2021. Deposits Total deposits increased $41.9 million to $1.27 billion as of December 31, 2022 compared to $1.23 billion at December 31, 2021, an increase of 3.4%. Interest-bearing and non interest-bearing demand deposits increased $39.3 million and $4.6 million, respectively, partially offset by a decrease in time deposits of $27.6 million. Average total deposits increased $45.9 million, primarily in both interest-bearing and non interest-bearing demand deposits for the three months ended December 31, 2022. The increase in interest-bearing demand deposits is primarily the result of the transition of customer deposits from securities sold under agreements to repurchase product, 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. Borrowed Funds Short-term borrowings decreased $31.2 million, or 79.5%, to $8.1 million at December 31, 2022, compared to $39.3 million at December 31, 2021. At December 31, 2022 and December 31, 2021, short-term borrowings were comprised entirely of securities sold under agreements to repurchase as noted in the above-mentioned deposit section. A portion of this decrease is due to accounts that were transitioned into other deposit products and account for most of the interest-bearing demand deposit increase. Stockholders’ Equity Stockholders’ equity decreased $23.0 million, or 17.3%, to $110.2 million at December 31, 2022, compared to $133.1 million at December 31, 2021. Key factors impacting stockholders’ equity included accumulated other comprehensive loss, which increased $25.3 million primarily due to the effect of rising market interest rates on the Company’s investment securities; the payment of $4.9 million in dividends since December 31, 2021; and activity under share repurchase programs, offset by the positive impact of $11.2 million of net income. On February 15, 2022, the Company completed its stock repurchase program that was implemented on June 10, 2021. On April 21, 2022, a new $10 million repurchase program was authorized, with the Company repurchasing 62,178 shares at an average price of $22.47 per share since the inception of the plan. In total, the Company has repurchased $4.8 million since December 31, 2021. Book value per share Book value per common share was $21.60 at December 31, 2022 compared to $25.31 at December 31, 2021, a decrease of $3.71. Tangible book value per common share (Non-GAAP) was $19.00 at December 31, 2022, compared to $22.45 at December 31, 2021, a decrease of $3.45. Refer to “Explanation of Use of Non-GAAP Financial Measures” at the end of this Press Release. About CB Financial Services, Inc. CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers a broad array of retail and commercial lending and deposit services and provides commercial and personal insurance brokerage services through Exchange Underwriters, Inc., its wholly owned subsidiary. For more information about CB Financial Services, Inc. and Community Bank, visit our website at www.communitybank.tv. Statement About Forward-Looking Statements Statements contained in this press release that are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and such forward-looking statements are subject to significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions contained in the Act. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries include, but are not limited to, general and local economic conditions, the scope and duration of economic contraction as a result of the COVID-19 pandemic and its effects on the Company’s business and that of the Company’s customers, changes in market interest rates, deposit flows, demand for loans, real estate values and competition, competitive products and pricing, the ability of our customers to make scheduled loan payments, loan delinquency rates and trends, our ability to manage the risks involved in our business, our ability to control costs and expenses, inflation, market and monetary fluctuations, changes in federal and state legislation and regulation applicable to our business, actions by our competitors, and other factors that may be disclosed in the Company’s periodic reports as filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation. CB FINANCIAL SERVICES, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION (Dollars in thousands, except share and per share data) (Unaudited) Selected Financial Condition Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Assets Cash and Due From Banks $ 103,700 $ 122,801 $ 81,121 $ 123,588 $ 119,674 Securities 190,058 193,846 213,505 231,097 224,974 Loans Real Estate: Residential 330,725 328,248 325,138 317,254 320,798 Commercial 436,805 432,516 426,105 427,227 392,124 Construction 44,923 49,502 41,277 54,227 85,028 Commercial and Industrial Commercial and Industrial 69,918 61,428 62,054 59,601 64,487 PPP 126 768 3,853 8,242 24,523 Consumer 146,927 150,615 148,921 143,422 122,152 Other 20,449 19,865 20,621 10,669 11,684 Total Loans 1,049,873 1,042,942 1,027,969 1,020,642 1,020,796 Allowance for Loan Losses (12,819 ) (12,854 ) (12,833 ) (11,595 ) (11,582 ) Loans, Net 1,037,054 1,030,088 1,015,136 1,009,047 1,009,214 Premises and Equipment, Net 17,844 18,064 18,196 18,349 18,399 Bank-Owned Life Insurance 25,893 25,750 25,610 25,468 25,332 Goodwill 9,732 9,732 9,732 9,732 9,732 Intangible Assets, Net 3,513 3,959 4,404 4,850 5,295 Accrued Interest and Other Assets 21,144 21,680 18,757 16,539 12,859 Total Assets $ 1,408,938 $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 Liabilities Deposits Non-Interest Bearing Demand Deposits $ 390,405 $ 407,107 $ 389,127 $ 400,105 $ 385,775 Interest Bearing Demand Accounts 311,825 298,755 265,347 280,455 272,518 Money Market Accounts 209,125 198,715 185,308 192,929 192,125 Savings Accounts 248,022 250,378 250,226 247,589 239,482 Time Deposits 109,126 120,879 125,182 129,235 136,713 Total Deposits 1,268,503 1,275,834 1,215,190 1,250,313 1,226,613 Short-Term Borrowings 8,060 18,108 32,178 39,219 39,266 Other Borrowings 14,638 17,627 17,618 17,607 17,601 Accrued Interest Payable and Other Liabilities 7,582 7,645 7,703 9,375 8,875 Total Liabilities 1,298,783 1,319,214 1,272,689 1,316,514 1,292,355 Stockholders’ Equity $ 110,155 $ 106,706 $ 113,772 $ 122,156 $ 133,124 Total Liabilities and Stockholders’ Equity $ 1,408,938 $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended Year Ended Selected Operating Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Interest and Dividend Income Loans, Including Fees $ 11,835 $ 10,815 $ 9,733 $ 9,551 $ 9,904 $ 41,933 $ 39,704 Securities: Taxable 974 985 988 905 866 3,852 2,990 Tax-Exempt 40 49 57 66 66 213 289 Dividends 28 21 20 22 21 91 84 Other Interest and Dividend Income 978 417 160 72 106 1,627 490 Total Interest and Dividend Income 13,855 12,287 10,958 10,616 10,963 47,716 43,557 Interest Expense Deposits 1,811 1,079 604 530 636 4,025 3,125 Short-Term Borrowings 7 19 18 19 26 63 98 Other Borrowings 171 174 173 174 70 693 182 Total Interest Expense 1,989 1,272 795 723 732 4,781 3,405 Net Interest and Dividend Income 11,866 11,015 10,163 9,893 10,231 42,935 40,152 Provision (Recovery) for Loan Losses — — 3,784 — 75 3,784 (1,125 ) Net Interest and Dividend Income After Provision (Recovery) for Loan Losses 11,866 11,015 6,379 9,893 10,156 39,151 41,277 Noninterest Income: Service Fees 530 544 559 526 569 2,160 2,331 Insurance Commissions 1,399 1,368 1,369 1,798 1,618 5,934 5,616 Other Commissions 157 244 179 89 90 669 521 Net Gain on Sales of Loans — — — — 977 — 1,143 Net Gain (Loss) on Securities 83 (46 ) (199 ) (7 ) 44 (168 ) 526 Net Gain on Purchased Tax Credits 14 14 14 14 17 57 70 Gain on Sale of Branches — — — �� — 5,203 — 5,203 Net Gain (Loss) on Disposal of Fixed Assets — 439 — (8 ) — 431 (3 ) Income from Bank-Owned Life Insurance 143 140 142 136 142 561 553 Other Income 34 36 41 65 29 176 320 Total Noninterest Income 2,360 2,739 2,105 2,613 8,689 9,820 16,280 Noninterest Expense: Salaries and Employee Benefits 4,625 4,739 4,539 4,565 5,181 18,469 19,938 Occupancy 817 768 776 686 619 3,047 2,968 Equipment 178 170 182 210 252 739 1,034 Data Processing 681 540 446 485 488 2,152 2,154 FDIC Assessment 154 147 128 209 222 638 1,014 PA Shares Tax 258 240 240 240 173 979 887 Contracted Services 405 288 348 587 1,133 1,628 4,011 Legal and Professional Fees 362 334 389 152 206 1,237 994 Advertising 165 131 115 116 191 527 749 Other Real Estate Owned (Income) (38 ) (38 ) (37 ) (38 ) (30 ) (151 ) (183 ) Amortization of Intangible Assets 446 445 446 445 445 1,782 1,926 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown of Fixed Assets — — — — 23 — 2,293 Other 945 1,063 838 999 1,069 3,844 3,899 Total Noninterest Expense 8,998 8,827 8,410 8,656 9,972 34,891 42,862 Income Before Income Tax Expense (Benefit) 5,228 4,927 74 3,850 8,873 14,080 14,695 Income Tax Expense (Benefit) 1,076 998 (44 ) 803 1,908 2,833 3,125 Net Income $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Three Months Ended Year Ended Per Common Share Data 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.96 $ 0.96 Earnings Per Common Share - Basic 0.81 0.77 0.02 0.59 1.32 2.19 2.15 Earnings Per Common Share - Diluted 0.81 0.77 0.02 0.58 1.31 2.18 2.15 Adjusted Earnings Per Common Share - Diluted (Non-GAAP) (1) 0.80 0.71 0.05 0.59 0.53 2.14 1.95 Weighted Average Common Shares Outstanding - Basic 5,095,237 5,106,861 5,147,846 5,198,194 5,291,795 5,136,670 5,382,441 Weighted Average Common Shares Outstanding - Diluted 5,104,254 5,118,627 5,156,975 5,220,887 5,314,537 5,149,312 5,392,729 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Common Shares Outstanding 5,100,189 5,096,672 5,128,333 5,156,897 5,260,672 Book Value Per Common Share $ 21.60 $ 20.94 $ 22.18 $ 23.69 $ 25.31 Tangible Book Value per Common Share (1) 19.00 18.25 19.43 20.86 22.45 Stockholders’ Equity to Assets 7.8 % 7.5 % 8.2 % 8.5 % 9.3 % Tangible Common Equity to Tangible Assets (1) 6.9 6.6 7.3 7.6 8.4 Three Months Ended Year Ended Selected Financial Ratios (2) 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 Return on Average Assets 1.16 % 1.12 % 0.03 % 0.87 % 1.87 % 0.80 % 0.79 % Adjusted Return on Average Assets (1) 1.15 1.03 0.08 0.87 0.76 0.78 0.72 Return on Average Equity 15.26 13.60 0.40 9.50 20.95 9.56 8.66 Adjusted Return on Average Equity (1) 15.01 12.53 0.93 9.54 8.55 9.39 7.87 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 149.04 149.41 149.03 144.48 145.09 148.00 145.44 Average Equity to Average Assets 7.63 8.20 8.49 9.14 8.93 8.36 9.12 Net Interest Rate Spread 3.17 3.10 3.00 2.98 2.85 3.07 2.81 Net Interest Rate Spread (FTE) (1) 3.18 3.11 3.01 2.99 2.86 3.08 2.82 Net Interest Margin 3.45 3.29 3.12 3.08 2.95 3.24 2.92 Net Interest Margin (FTE) (1) 3.46 3.30 3.13 3.10 2.96 3.25 2.94 Net Charge-offs and (Recoveries) to Average Loans 0.01 �� (0.01 ) 1.01 (0.01 ) 0.03 0.25 0.01 Efficiency Ratio 63.25 64.18 68.55 69.21 52.71 66.14 75.95 Adjusted Efficiency Ratio (1) 60.74 63.02 64.18 65.88 69.73 63.36 74.25 Asset Quality Ratios 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Allowance for Loan Losses to Total Loans 1.22 % 1.23 % 1.25 % 1.14 % 1.13 % Allowance for Loan Losses to Total Loans, Excluding PPP Loans(1) 1.22 1.23 1.25 1.15 1.16 Allowance for Loan Losses to Nonperforming Loans (3) 221.06 218.61 219.89 158.88 159.40 Allowance for Loan Losses to Noncurrent Loans (4) 320.64 318.96 329.47 218.28 233.37 Delinquent and Nonaccrual Loans to Total Loans (4) (5) 0.81 0.46 0.45 0.79 0.78 Nonperforming Loans to Total Loans (3) 0.55 0.56 0.57 0.72 0.71 Noncurrent Loans to Total Loans (4) 0.38 0.39 0.38 0.52 0.49 Nonperforming Assets to Total Assets (6) 0.41 0.41 0.42 0.51 0.51 Capital Ratios (7) 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.33 % 12.02 % 11.83 % 11.99 % 11.95 % Tier 1 Capital (to Risk Weighted Assets) 12.33 12.02 11.83 11.99 11.95 Total Capital (to Risk Weighted Assets) 13.58 13.27 13.08 13.20 13.18 Tier 1 Leverage (to Adjusted Total Assets) 8.66 8.51 8.33 8.19 7.76 (1) Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (2) Interim period ratios are calculated on an annualized basis. (3) Nonperforming loans consist of nonaccrual loans, accruing loans that are 90 days or more past due, and troubled debt restructured loans. (4) Noncurrent loans consist of nonaccrual loans and accruing loans that are 90 days or more past due. (5) Delinquent loans consist of accruing loans that are 30 days or more past due. (6) Nonperforming assets consist of nonperforming loans and other real estate owned. (7) Capital ratios are for Community Bank only. Certain items previously reported may have been reclassified to conform with the current reporting period’s format. AVERAGE BALANCES AND YIELDS Three Months Ended December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) (Dollars in thousands) (Unaudited) Assets: Interest-Earning Assets: Loans, Net (2) $ 1,034,714 $ 11,853 4.54 % $ 1,024,363 $ 10,833 4.20 % $ 1,007,874 $ 9,751 3.88 % $ 1,009,210 $ 9,573 3.85 % $ 1,004,827 $ 9,927 3.92 % Debt Securities Taxable 216,915 974 1.80 222,110 985 1.77 228,315 988 1.73 215,906 905 1.68 205,328 866 1.69 Exempt From Federal Tax 6,277 51 3.25 7,998 62 3.10 9,109 73 3.21 10,195 84 3.30 10,477 84 3.21 Equity Securities 2,693 28 4.16 2,693 21 3.12 2,693 20 2.97 2,693 22 3.27 2,693 21 3.12 Interest Bearing Deposits at Banks 99,108 939 3.79 67,870 378 2.23 56,379 122 0.87 59,296 33 0.22 150,102 61 0.16 Other Interest-Earning Assets 2,875 39 5.38 2,784 39 5.56 3,235 38 4.71 3,483 39 4.54 3,475 45 5.14 Total Interest-Earning Assets 1,362,582 13,884 4.04 1,327,818 12,318 3.68 1,307,605 10,992 3.37 1,300,783 10,656 3.32 1,376,902 11,004 3.17 Noninterest-Earning Assets 51,718 68,796 84,323 122,288 100,607 Total Assets $ 1,414,300 $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (3) $ 315,352 $ 810 1.02 % $ 278,412 $ 393 0.56 % $ 260,655 $ 111 0.17 $ 276,603 $ 48 0.07 $ 278,546 $ 51 0.07 % Savings (3) 249,948 29 0.05 251,148 20 0.03 248,356 20 0.03 243,786 19 0.03 252,387 20 0.03 Money Market (3) 206,192 604 1.16 189,371 269 0.56 188,804 61 0.13 192,425 41 0.09 209,572 57 0.11 Time Deposits (3) 116,172 368 1.26 123,438 397 1.28 127,832 412 1.29 132,015 422 1.30 154,342 508 1.31 Total Interest-Bearing Deposits (3) 887,664 1,811 0.81 842,369 1,079 0.51 825,647 604 0.29 844,829 530 0.25 894,847 636 0.28 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 8,985 7 0.31 28,738 19 0.26 34,135 18 0.21 37,884 19 0.20 44,709 26 0.23 Other Borrowings 17,598 171 3.86 17,621 174 3.92 17,611 173 3.94 17,604 174 4.01 9,474 70 2.93 Total Interest-Bearing Liabilities 914,247 1,989 0.86 888,728 1,272 0.57 877,393 795 0.36 900,317 723 0.33 949,030 732 0.31 Noninterest-Bearing Demand Deposits 391,300 390,658 391,975 384,188 388,787 Other Liabilities 788 2,636 4,415 8,554 7,800 Total Liabilities 1,306,335 1,282,022 1,273,783 1,293,059 1,345,617 Stockholders' Equity 107,965 114,592 118,145 130,012 131,892 Total Liabilities and Stockholders' Equity $ 1,414,300 $ 1,396,614 $ 1,391,928 $ 1,423,071 $ 1,477,509 Net Interest Income (FTE) (Non-GAAP) (4) $ 11,895 $ 11,046 $ 10,197 $ 9,933 $ 10,272 Net Interest-Earning Assets (5) 448,335 439,090 430,212 400,466 427,872 Net Interest Rate Spread (FTE) (Non-GAAP) (4) (6) 3.18 % 3.11 % 3.01 % 2.99 % 2.86 % Net Interest Margin (FTE) (Non-GAAP) (4)(7) 3.46 3.30 3.13 3.10 2.96 PPP Loans 216 22 40.41 2,424 123 20.13 5,546 144 10.41 14,673 445 12.30 29,067 391 5.34 (1) Annualized based on three months ended results. (2) Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Includes Deposits Held for Sale that were sold in December 2021. (4) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (6) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (7) Net interest margin represents annualized net interest income divided by average total interest-earning assets. AVERAGE BALANCES AND YIELDS Year Ended December 31, 2022 December 31, 2021 Average Balance Interest and Dividends Yield /Cost Average Balance Interest and Dividends Yield /Cost (Dollars in thousands) (Unaudited) Assets: Interest-Earning Assets: Loans, Net (1) $ 1,019,124 $ 42,010 4.12 % $ 1,014,405 $ 39,799 3.92 % Debt Securities Taxable 220,818 3,852 1.74 162,987 2,990 1.83 Exempt From Federal Tax 8,383 270 3.22 11,829 366 3.09 Marketable Equity Securities 2,693 91 3.38 2,657 84 3.16 Interest Bearing Deposits at Banks 70,765 1,473 2.08 177,768 304 0.17 Other Interest-Earning Assets 3,092 154 4.98 3,733 186 4.98 Total Interest-Earning Assets 1,324,875 47,850 3.61 1,373,379 43,729 3.18 Noninterest-Earning Assets 81,553 91,075 Total Assets $ 1,406,428 $ 1,464,454 Liabilities and Stockholders' Equity Interest-Bearing Liabilities: Interest-Bearing Demand Deposits (2) $ 282,850 $ 1,362 0.48 % $ 272,256 $ 232 0.09 % Savings (2) 248,334 88 0.04 247,864 98 0.04 Money Market (2) 194,223 976 0.50 201,222 281 0.14 Time Deposits (2) 124,817 1,599 1.28 171,805 2,514 1.46 Total Interest-Bearing Deposits (2) 850,224 4,025 0.47 893,147 3,125 0.35 Short-Term Borrowings Securities Sold Under Agreements to Repurchase 27,360 63 0.23 43,988 98 0.22 Other Borrowings 17,609 693 3.94 7,172 182 2.54 Total Interest-Bearing Liabilities 895,193 4,781 0.53 944,307 3,405 0.36 Noninterest-Bearing Demand Deposits 389,553 378,374 Other Liabilities 4,072 8,168 Total Liabilities 1,288,818 1,330,849 Stockholders' Equity 117,610 133,605 Total Liabilities and Stockholders' Equity $ 1,406,428 $ 1,464,454 Net Interest Income (FTE) (Non-GAAP) (3) 43,069 40,324 Net Interest-Earning Assets (4) 429,682 429,072 Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5) 3.08 % 2.82 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.25 2.94 PPP Loans 5,666 734 12.95 45,905 2,189 4.77 (1) Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (2) Includes Deposits Held for Sale that were sold in December 2021. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. Explanation of Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Press Release contains or references, certain Non-GAAP financial measures. We believe these Non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these Non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with Non-GAAP measures which may be presented by other companies. Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands, except share and per share data) (Unaudited) Net Income (GAAP) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Adjustments (Gain) Loss on Securities (83 ) 46 199 7 (44 ) 168 (526 ) Gain on Sale of Branches — — — — (5,203 ) — (5,203 ) (Gain) Loss on Disposal of Fixed Assets — (439 ) — 8 — (431 ) 3 Tax effect 17 83 (42 ) (3 ) 1,102 55 1,202 Non-Cash Charges: Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — — 23 — 2,293 Tax Effect — — — — — — Adjusted Net Income (Non-GAAP) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding 5,104,254 5,118,627 5,156,975 5,220,887 5,314,537 5,149,312 5,392,729 Earnings per Common Share - Diluted (GAAP) $ 0.81 $ 0.77 $ 0.02 $ 0.58 $ 1.31 $ 2.18 $ 2.15 Adjusted Earnings per Common Share - Diluted (Non-GAAP) $ 0.80 $ 0.71 $ 0.05 $ 0.59 $ 0.53 $ 2.15 $ 1.95 Net Income (GAAP) (Numerator) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Assets (Denominator) 1,414,300 1,396,614 1,391,928 1,423,071 1,477,509 1,406,428 1,464,454 Return on Average Assets (GAAP) 1.16 % 1.12 % 0.03 % 0.87 % 1.87 % 0.80 % 0.79 % Adjusted Net Income (Non-GAAP) (Numerator) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Assets (Denominator) 1,414,300 1,396,614 1,391,928 1,423,071 1,477,509 1,407,413 1,455,368 Adjusted Return on Average Assets (Non-GAAP) 1.15 % 1.03 % 0.08 % 0.87 % 0.76 % 0.78 % 0.72 % Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands) (Unaudited) Net Income (GAAP) (Numerator) $ 4,152 $ 3,929 $ 118 $ 3,047 $ 6,965 $ 11,247 $ 11,570 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Equity (GAAP) (Denominator) 107,965 114,592 118,145 130,012 131,892 117,610 133,605 Return on Average Equity (GAAP) 15.26 % 13.60 % 0.40 % 9.50 % 20.95 % 9.56 % 8.66 % Adjusted Net Income (Non-GAAP) (Numerator) $ 4,086 $ 3,619 $ 275 $ 3,059 $ 2,843 $ 11,039 $ 10,517 Annualization Factor 3.97 3.97 4.01 4.06 3.97 1.00 1.00 Average Equity (GAAP) (Denominator) 107,965 114,592 118,145 130,012 131,892 117,610 133,605 Adjusted Return on Average Equity (Non-GAAP) 15.01 % 12.53 % 0.93 % 9.54 % 8.55 % 9.39 % 7.87 % Tangible book value per common share is a Non-GAAP measure and is calculated based on tangible common equity divided by period-end common shares outstanding. Tangible common equity to tangible assets is a Non-GAAP measure and is calculated based on tangible common equity divided by tangible assets. We believe these Non-GAAP measures serve as useful tools to help evaluate the strength and discipline of the Company's capital management strategies and as an additional, conservative measure of the Company’s total value. 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 (Dollars in thousands, except share and per share data) (Unaudited) Assets (GAAP) $ 1,408,938 $ 1,425,920 $ 1,386,461 $ 1,438,670 $ 1,425,479 Goodwill and Intangible Assets, Net (13,245 ) (13,691 ) (14,136 ) (14,582 ) (15,027 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,395,693 $ 1,412,229 $ 1,372,325 $ 1,424,088 $ 1,410,452 Stockholders' Equity (GAAP) $ 110,155 $ 106,706 $ 113,772 $ 122,156 $ 133,124 Goodwill and Intangible Assets, Net (13,245 ) (13,691 ) (14,136 ) (14,582 ) (15,027 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 96,910 $ 93,015 $ 99,636 $ 107,574 $ 118,097 Stockholders’ Equity to Assets (GAAP) 7.8 % 7.5 % 8.2 % 8.5 % 9.3 % Tangible Common Equity to Tangible Assets (Non-GAAP) 6.9 % 6.6 % 7.3 % 7.6 % 8.4 % Common Shares Outstanding (Denominator) 5,100,189 5,096,672 5,128,333 5,156,897 5,260,672 Book Value per Common Share (GAAP) $ 21.60 $ 20.94 $ 22.18 $ 23.69 $ 25.31 Tangible Book Value per Common Share (Non-GAAP) $ 19.00 $ 18.25 $ 19.43 $ 20.86 $ 22.45 Interest income on interest-earning assets, net interest rate spread and net interest margin are presented on a fully tax-equivalent (“FTE”) basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and securities using the federal statutory income tax rate of 21 percent. We believe the presentation of net interest income on a FTE basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice. The following table reconciles net interest income, net interest spread and net interest margin on a FTE basis for the periods indicated: Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 13,855 $ 12,287 $ 10,958 $ 10,616 $ 10,963 $ 47,716 $ 43,557 Adjustment to FTE Basis 29 31 34 40 41 134 172 Interest Income (FTE) (Non-GAAP) 13,884 12,318 10,992 10,656 11,004 47,850 43,729 Interest Expense (GAAP) 1,989 1,272 795 723 732 4,781 3,405 Net Interest Income (FTE) (Non-GAAP) $ 11,895 $ 11,046 $ 10,197 $ 9,933 $ 10,272 $ 43,069 $ 40,324 Net Interest Rate Spread (GAAP) 3.17 % 3.10 % 3.00 % 2.98 % 2.85 % 3.07 % 2.81 % Adjustment to FTE Basis 0.01 0.01 0.01 0.01 0.01 0.01 0.01 Net Interest Rate Spread (FTE) (Non-GAAP) 3.18 3.11 3.01 2.99 2.86 3.08 2.82 Net Interest Margin (GAAP) 3.45 % 3.29 % 3.12 % 3.08 % 2.95 % 3.24 % 2.92 % Adjustment to FTE Basis 0.01 0.01 0.01 0.02 0.01 0.01 0.02 Net Interest Margin (FTE) (Non-GAAP) 3.46 3.30 3.13 3.10 2.96 3.25 2.94 Adjusted efficiency ratio excludes the effect of certain non-recurring or non-cash items and represents adjusted noninterest expense divided by adjusted operating revenue. The Company evaluates its operational efficiency based on its adjusted efficiency ratio and believes it provides additional perspective on its ongoing performance as well as peer comparability. Three Months Ended Year Ended 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 12/31/22 12/31/21 (Dollars in thousands) (Unaudited) Noninterest Expense (GAAP) (Numerator) $ 8,998 $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 34,891 $ 42,862 Net Interest and Dividend Income (GAAP) $ 11,866 $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 42,935 $ 40,152 Noninterest Income (GAAP) 2,360 2,739 2,105 2,613 8,689 9,820 16,280 Operating Revenue (GAAP) (Denominator) $ 14,226 $ 13,754 $ 12,268 $ 12,506 $ 18,920 $ 52,755 $ 56,432 Efficiency Ratio (GAAP) 63.25 % 64.18 % 68.55 % 69.21 % 52.71 % 66.14 % 75.95 % Noninterest Expense (GAAP) $ 8,998 $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 34,891 $ 42,862 Less: Other Real Estate Owned (Income) (38 ) (38 ) (37 ) (38 ) (30 ) (151 ) (183 ) Amortization of Intangible Assets 446 445 446 445 445 1,782 1,926 Intangible Assets and Goodwill Impairment — — — — — — 1,178 Writedown on Fixed Assets — — — — 23 — 2,293 Adjusted Noninterest Expense (Non-GAAP) (Numerator) $ 8,590 $ 8,420 $ 8,001 $ 8,249 $ 9,534 $ 33,260 $ 37,648 Net Interest and Dividend Income (GAAP) $ 11,866 $ 11,015 $ 10,163 $ 9,893 $ 10,231 $ 42,935 $ 40,152 Noninterest Income (GAAP) 2,360 2,739 2,105 2,613 8,689 9,820 16,280 Less: Net Gain (Loss) on Securities 83 (46 ) (199 ) (7 ) 44 (168 ) 526 Gain on Sale of Branches — — — — 5,203 — 5,203 Net Gain (Loss) on Disposal of Fixed Assets — 439 — (8 ) — 431 (3 ) Adjusted Noninterest Income (Non-GAAP) $ 2,277 $ 2,346 $ 2,304 $ 2,628 $ 3,442 $ 9,557 $ 10,554 Adjusted Operating Revenue (Non-GAAP) (Denominator) $ 14,143 $ 13,361 $ 12,467 $ 12,521 $ 13,673 $ 52,492 $ 50,706 Adjusted Efficiency Ratio (Non-GAAP) 60.74 % 63.02 % 64.18 % 65.88 % 69.73 % 63.36 % 74.25 % Allowance for loan losses to total loans, excluding PPP loans, is a Non-GAAP measure that serves as a useful measurement to evaluate the allowance for loan losses without the impact of SBA guaranteed loans. 12/31/22 9/30/22 6/30/22 3/31/22 12/31/21 (Dollars in thousands) (Unaudited) Allowance for Loan Losses (Numerator) $ 12,819 $ 12,854 $ 12,833 $ 11,595 $ 11,582 Total Loans 1,049,873 $ 1,042,942 1,027,969 $ 1,020,642 $ 1,020,796 PPP Loans (126 ) (768 ) (3,853 ) (8,242 ) (24,523 ) Total Loans, Excluding PPP Loans (Non-GAAP) (Denominator) $ 1,049,747 $ 1,042,174 $ 1,024,116 $ 1,012,400 $ 996,273 Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP) 1.22 % 1.23 % 1.25 % 1.15 % 1.16 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230126005788/en/
Company Contact: John H. Montgomery President and Chief Executive Officer Phone: (724) 225-2400 Investor Relations: Jeremy Hellman, Vice President The Equity Group Inc. Phone: (212) 836-9626 Email: jhellman@equityny.com