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 Second Quarter and Year-to-Date 2023 Financial Results and Declares Quarterly Cash Dividend By: CB Financial Services, Inc. via Business Wire July 28, 2023 at 16:15 PM EDT CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”) and Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of the Bank, today announced its second quarter and year-to-date 2023 financial results. 2023 Second Quarter Financial Highlights (Comparisons to three months ended June 30, 2022 unless otherwise noted) Net income was $2.8 million, compared to $118,000. Prior period results were negatively impacted by provision for credit losses expense of approximately $3.8 million due primarily to a single commercial loan charge-off of $2.7 million. Current period results were positively impacted by net interest margin (NIM) expansion coupled with a modest increase in noninterest income, partially offset by an increase in noninterest expense. Income before income tax expense (benefit) was $3.5 million compared to $74,000. Pre-provision net revenue (PPNR) (non-GAAP) was $3.95 million compared to $3.86 million. Earnings per diluted common share (EPS) increased to $0.54 from $0.02. Return on average assets (annualized) was 0.79%, compared to 0.03%. Return on average equity (annualized) was 9.38%, compared to 0.40%. NIM improved to 3.29% from 3.12%. Net interest and dividend income was $11.1 million, compared to $10.2 million. Noninterest income increased to $2.3 million, compared to $2.1 million. The most significant changes in noninterest income included an increase in insurance commissions of $142,000 and a decrease in net losses on securities of $99,000. Noninterest expense increased to $9.5 million, compared to $8.4 million, primarily due to increases in compensation and benefits, equipment and data processing costs. (Amounts at June 30, 2023; comparisons to December 31, 2022, unless otherwise noted) Total assets increased to $1.43 billion from $1.41 billion. Total loans increased $51.3 million, or 4.9%, to $1.10 billion compared to $1.05 billion, and included increases of $32.2 million, or 46.0%, in commercial and industrial loans, $21.8 million, or 5.0%, in commercial real estate loans, and $7.8 million, or 2.3%, in residential mortgage loans, partially offset by a decrease of $12.1 million, or 8.3%, in consumer loans, which is primarily comprised of indirect automobile loans. Nonperforming loans to total loans was 0.37%, a decrease of 18 basis points (“bps”), compared to 0.55%. Total deposits were $1.26 billion, a decrease of $5.2 million, compared to $1.27 billion. Book value per share was $22.81, compared to $22.90 as of March 31, 2023 and $21.60 as of December 31, 2022. Tangible book value per share (Non-GAAP) was $20.39, compared to $20.40 as of March 31, 2023 and $19.00 as of December 31, 2022. The year-to-date change was due to an increase in stockholders’ equity primarily related to current period net income of $6.9 million and a $2.1 million positive adjustment due to the Company’s January 1, 2023 adoption of CECL, partially offset by current period dividends paid to stockholders of $2.6 million. Management Commentary President and CEO John H. Montgomery stated, “Our second quarter results demonstrated the durability of both our franchise and the community bank model in general. While macro dislocations seen in the banking industry during the first quarter have abated, we continue to face headwinds resulting from a rising interest rate environment. First and foremost, we are focused on ensuring the bank maintains adequate liquidity and a strong capital position. In doing so, we are able to navigate challenging economic times from a position of strength which also allows us to maintain relationships with trusted customers and develop new ones, as evidenced by our continued loan growth during the quarter. The markets we serve in southwestern Pennsylvania, eastern Ohio and northern West Virginia have remained resilient despite continued interest rate increases by the Federal Reserve. In recent years, our markets have exhibited more stability than others in key areas such as real estate values and employment, allowing Community Bank to experience less volatility.” Mr. Montgomery continued, “We have noted for several quarters that our funding costs have been rising, with net interest margin decreasing from first quarter levels while improving compared with the second quarter last year. As we highlighted last quarter, our deposit base is well-diversified, with a significant majority insured or collateralized. Within our deposit base, the most significant change during the second quarter was a shift to interest-bearing from noninterest-bearing deposits as our customers responded to the overall increase in market interest rates. The other half of our NIM calculation is our interest income, which has been supported by the repricing of variable rate loans and the addition of new, higher priced loans via the continued growth of our loan book during the second quarter, with C&I loans having been the biggest contributor, followed by commercial real estate loans. Moving forward, our NIM will also benefit as we reposition our loan book by reducing transactional indirect auto loans with higher yielding C&I and CRE loans ” Mr. Montgomery concluded, “As I noted previously, our team here at Community Bank is focused on maintaining solid capital and liquidity positions. Success on those fronts provides a range of positive outcomes for our business that ultimately lead to long-term value creation which benefits all our constituents - shareholders, employees, customers, and our communities at large. While the near-term economic picture remains somewhat muddled, we are also committed to making proper investments in our franchise to position the bank for long-term growth. During the second quarter we added revenue producing members to our team while also continuing to make targeted technology investments necessary for our competitive positioning. We also declared and paid a $0.25 cash dividend during the quarter while allowing our previous share repurchase program to expire. I am proud of our entire team for all their hard work and look forward to our continued success.” Dividend Information The Company’s Board of Directors declared a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about August 31, 2023, to stockholders of record as of the close of business on August 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. The Company purchased a total of 74,656 shares of the Company’s common stock at an average price of $22.38 per share prior to the program expiration on May 1, 2023. 2023 Second Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.0 million, or 9.4%, to $11.1 million for the three months ended June 30, 2023 compared to $10.2 million for the three months ended June 30, 2022. Net interest margin (GAAP) increased to 3.29% for the three months ended June 30, 2023 compared to 3.12% for the three months ended June 30, 2022. Fully tax equivalent (FTE) net interest margin (Non-GAAP) increased 17 bps to 3.30% for the three months ended June 30, 2023 compared to 3.13% for the three months ended June 30, 2022. Interest and dividend income increased $4.2 million, or 38.7%, to $15.2 million for the three months ended June 30, 2023 compared to $11.0 million for the three months ended June 30, 2022. Interest income on loans increased $3.7 million, or 37.9%, to $13.4 million for the three months ended June 30, 2023 compared to $9.7 million for the three months ended June 30, 2022. The average balance of loans increased $71.5 million to $1.08 billion from $1.01 billion, generating $724,000 of additional interest income on loans. The average yield increased 112 bps to 5.00% compared to 3.88% causing a $3.0 million increase in interest income on loans. Interest income on interest-earning deposits at other banks increased $599,000, to $721,000 for the three months ended June 30, 2023 compared to $122,000 for the three months ended June 30, 2022 as the average yield increased 443 bps, partially offset by a $1.9 million decrease in average balances. The increase in the average yield was the result of the Federal Reserve Board’s interest rate increases. Interest expense increased $3.3 million, or 413.6%, to $4.1 million for the three months ended June 30, 2023 compared to $795,000 for the three months ended June 30, 2022. Interest expense on deposits increased $3.2 million, or 536.1%, to $3.8 million for the three months ended June 30, 2023 compared to $604,000 for the three months ended June 30, 2022. Rising market interest rates led to the repricing of interest-bearing demand and money market deposits and a shift in deposits from non interest-bearing to interest-bearing demand and time deposits and resulted in a 137 bps, or 466.9%, increase in the average cost of interest-bearing deposits compared to the three months ended June 30, 2022. This accounted for a $3.2 million increase in interest expense. Additionally, interest-bearing deposit balances increased $104.5 million, or 12.7%, to $930.1 million as of June 30, 2023 compared to $825.6 million as of June 30, 2022, accounting for a $70,000 increase in interest expense. Provision for Credit Losses Effective January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The provision for credit losses recorded for the three months ended June 30, 2023 was $432,000 and was required primarily due to loan growth coupled with a modeled slowdown in loan prepayment speeds. This compared to $3.8 million in provision for credit losses recorded for the three months ended June 30, 2022, primarily due to the charge-off of a $2.7 million commercial and industrial loan to a borrower that ceased operations. Noninterest income Noninterest income increased $164,000, or 7.8%, to $2.3 million for the three months ended June 30, 2023, compared to $2.1 million for the three months ended June 30, 2022. This increase was primarily related to a $142,000 increase in commercial and personal insurance commissions and a decrease in net losses on securities of $99,000. Noninterest Expense Noninterest expense increased $1.1 million, or 13.0%, to $9.5 million for the three months ended June 30, 2023 compared to $8.4 million for the three months ended June 30, 2022. Salaries and benefits increased $692,000, or 15.2%, to $5.2 million primarily due to merit increases, revenue producing staff additions and associated $160,000 of recruiting costs, and $96,000 of severance costs related to the discontinuation of indirect automobile lending. Data processing expense increased $272,000, or 61.0%, to $718,000, due to increased ongoing costs related to the fourth quarter 2022 core conversion and equipment expense increased $101,000 or 55.5%, to $283,000, due to costs associated with the implementation of new interactive teller machines. Statement of Financial Condition Review Assets Total assets increased $23.8 million, or 1.7%, to $1.43 billion at June 30, 2023, compared to $1.41 billion at December 31, 2022. Cash and due from banks decreased $25.6 million, or 24.7%, to $78.1 million at June 30, 2023, compared to $103.7 million at December 31, 2022, due to significant loan growth. Securities decreased $8.6 million, or 4.5%, to $181.4 million at June 30, 2023, compared to $190.1 million at December 31, 2022. The securities balance was primarily impacted by $8.1 million of repayments on mortgage-backed and collateralized mortgage obligation securities and a $332,000 decrease in the market value in the equity securities portfolio, which is primarily comprised of bank stocks. Loans and Credit Quality Total loans increased $51.3 million, or 4.9%, to $1.10 billion at June 30, 2023 compared to $1.05 billion at December 31, 2022. Loan growth was driven by increases in commercial and industrial loans, commercial real estate loans and residential mortgage loans of $32.2 million, $21.8 million, and $7.8 million, respectively, partially offset by a decrease in consumer loans of $12.1 million. The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to rising market interest rates. Further decreases in this portfolio is expected as the Bank discontinued this product offering at June 30, 2023 to allocate resources and focus production efforts on more profitable commercial products. The allowance for credit losses (ACL) was $10.7 million at June 30, 2023 and $12.8 million at December 31, 2022. As a result, the ACL to total loans was 0.97% at June 30, 2023 compared to 1.22% at December 31, 2022. The change in the ACL was primarily due to the Company's aforementioned adoption of CECL. At adoption, the Company decreased its ACL by $3.4 million. Contributing to the change in ACL was a prior year charge-off of $2.7 million and qualitative factors that significantly impacted the incurred loss model driven by historical activity compared to the adopted CECL methodology that is centered around current expected credit loss (CECL) activity using a forecast approach. Net charge-offs for the three months ended June 30, 2023 were $96,000, or 0.04% of average loans on an annualized basis. Net charge-offs for the three months ended June 30, 2022 were $2.5 million, or 1.01% of average loans on an annualized basis primarily due to the aforementioned $2.7 million charge-off of a commercial and industrial loan. Net recoveries for the six months ended June 30, 2023 were $660,000 primarily due to recoveries totaling $750,000 related to the prior year charged-off loan. Net charge-offs for the six months ended June 30, 2022 were $2.5 million. Nonperforming loans, which includes nonaccrual loans and accruing loans past due 90 days or more, were $4.1 million at June 30, 2023 compared to $5.8 million at December 31, 2022. The decrease of $1.7 million was due to ten loans totaling $1.7 million being moved from nonaccrual to accrual status during the current period. Current nonperforming loans to total loans ratio was 0.37% compared to 0.55% at December 31, 2022. Other Intangible assets decreased $891,000, or 25.6%, to $2.6 million at June 30, 2023 compared to $3.5 million at December 31, 2022 due to amortization expense recognized during the period. Accrued interest and other assets increased $5.6 million, or 26.8%, to $26.7 million at June 30, 2023, compared to $21.1 million at December 31, 2022 due to the sale of a $2.0 million syndicated loan which was sold but not yet settled at the end of the period, and increases in accounts receivable for EU, income taxes receivable and BOLI death benefit claims receivable $853,000, $761,000 and $664,000. Total liabilities increased $17.4 million, or 1.3%, to $1.32 billion at June 30, 2023 compared to $1.30 billion at December 31, 2022. Deposits Total deposits decreased $5.2 million to $1.26 billion as of June 30, 2023 compared to $1.27 billion at December 31, 2022. Interest-bearing demand deposits increased $62.8 million and time deposits increased $60.4 million, while non interest-bearing demand deposits decreased $74.3 million, money market deposits decreased $23.3 million and savings deposits decreased $30.8 million. The increase in interest-bearing demand deposits is primarily the result of higher interest rates attracting more customers and additional deposits from existing customers while higher time deposits resulted from the offering of a higher-rate certificate of deposit product. FDIC insured deposits totaled approximately 61.1% of total deposits while an additional 16.5% of deposits were collateralized with investment securities. Borrowed Funds Long-term borrowings increased $20.0 million, or 136.6%, to $34.7 million at June 30, 2023, compared to $14.6 million at December 31, 2022. During the second quarter, the Bank entered into $20.0 million of FHLB advances for a term of 24 months at 4.92%, the proceeds of which were utilized to match fund originations within the Bank’s commercial and industrial loan portfolio. Short-term borrowings decreased $8.1 million, or 100.0%, as there were no short-term borrowings at June 30, 2023, compared to $8.1 million at December 31, 2022. At December 31, 2022, short-term borrowings were comprised entirely of securities sold under agreements to repurchase. These accounts were transitioned into other deposit products and account for a portion of the interest-bearing demand deposit increase. Accrued Interest Payable and Other Liabilities Accrued interest payable and other liabilities increased $10.6 million, or 139.8%, to $18.2 million at June 30, 2023, compared to $7.6 million at December 31, 2022 primarily due to the purchase of $8.9 million of syndicated loans which were unfunded at the end of the period. Stockholders’ Equity Stockholders’ equity increased $6.4 million, or 5.8%, to $116.6 million at June 30, 2023, compared to $110.2 million at December 31, 2022. Key factors positively impacting stockholders’ equity included $6.9 million of net income for the current period and a $2.1 million positive adjustment, net of tax, due to the Company’s January 1, 2023 adoption of CECL as described above. These factors were partially offset by the payment of $2.6 million in dividends since December 31, 2022 and activity under share repurchase programs. On April 21, 2022, a $10.0 million repurchase program was authorized, with the Company repurchasing 74,656 shares at an average price of $22.38 per share since the inception of the plan. In total, the Company repurchased $274,000 of common stock since December 31, 2022. The plan expired on May 1, 2023. Book value per share Book value per common share was $22.81 at June 30, 2023 compared to $21.60 at December 31, 2022, an increase of $1.21. Tangible book value per common share (Non-GAAP) was $20.39 at June 30, 2023, compared to $19.00 at December 31, 2022, an increase of $1.39. 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, 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 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Assets Cash and Due From Banks $ 78,093 $ 103,545 $ 103,700 $ 122,801 $ 81,121 Securities 181,427 189,025 190,058 193,846 213,505 Loans Real Estate: Residential 338,493 332,840 330,725 328,248 325,138 Commercial 458,614 452,770 436,805 432,516 426,105 Construction 44,523 39,522 44,923 49,502 41,277 Commercial and Industrial: Commercial and Industrial 102,232 79,436 69,918 61,428 62,054 PPP 34 65 126 768 3,853 Consumer 134,788 146,081 146,927 150,615 148,921 Other 22,470 21,151 20,449 19,865 20,621 Total Loans 1,101,154 1,071,865 1,049,873 1,042,942 1,027,969 Allowance for Credit Losses (10,666 ) (10,270 ) (12,819 ) (12,854 ) (12,833 ) Loans, Net 1,090,488 1,061,595 1,037,054 1,030,088 1,015,136 Premises and Equipment, Net 18,582 17,732 17,844 18,064 18,196 Bank-Owned Life Insurance 25,082 24,943 25,893 25,750 25,610 Goodwill 9,732 9,732 9,732 9,732 9,732 Intangible Assets, Net 2,622 3,068 3,513 3,959 4,404 Accrued Interest Receivable and Other Assets 26,707 21,068 21,144 21,680 18,757 Total Assets $ 1,432,733 $ 1,430,708 $ 1,408,938 $ 1,425,920 $ 1,386,461 Liabilities Deposits Noninterest-Bearing Demand Accounts $ 316,098 $ 350,911 $ 390,405 $ 407,107 $ 389,127 Interest-Bearing Demand Accounts 374,654 359,051 311,825 298,755 265,347 Money Market Accounts 185,814 206,174 209,125 198,715 185,308 Savings Accounts 217,267 234,935 248,022 250,378 250,226 Time Deposits 169,482 130,449 109,126 120,879 125,182 Total Deposits 1,263,315 1,281,520 1,268,503 1,275,834 1,215,190 Short-Term Borrowings — 121 8,060 18,108 32,178 Other Borrowings 34,658 14,648 14,638 17,627 17,618 Accrued Interest Payable and Other Liabilities 18,171 17,224 7,582 7,645 7,703 Total Liabilities 1,316,144 1,313,513 1,298,783 1,319,214 1,272,689 Stockholders’ Equity 116,589 117,195 110,155 106,706 113,772 Total Liabilities and Stockholders’ Equity $ 1,432,733 $ 1,430,708 $ 1,408,938 $ 1,425,920 $ 1,386,461 (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended Six Months Ended Selected Operating Data 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 Interest and Dividend Income: Loans, Including Fees $ 13,426 $ 12,371 $ 11,835 $ 10,815 $ 9,733 $ 25,797 $ 19,284 Securities: Taxable 950 964 974 985 988 1,914 1,893 Tax-Exempt 42 41 40 49 57 83 123 Dividends 25 24 28 21 20 49 42 Other Interest and Dividend Income 760 844 978 417 160 1,605 232 Total Interest and Dividend Income 15,203 14,244 13,855 12,287 10,958 29,448 21,574 Interest Expense: Deposits 3,842 2,504 1,811 1,079 604 6,346 1,134 Short-Term Borrowings 3 2 7 19 18 5 37 Other Borrowings 238 155 171 174 173 393 347 Total Interest Expense 4,083 2,661 1,989 1,272 795 6,744 1,518 Net Interest and Dividend Income 11,120 11,583 11,866 11,015 10,163 22,704 20,056 Provision for Credit Losses - Loans 492 80 — — 3,784 572 3,784 Recovery for Credit Losses - Unfunded Commitments (60 ) — — — — (60 ) — Net Interest and Dividend Income After Provision for Credit Losses 10,688 11,503 11,866 11,015 6,379 22,192 16,272 Noninterest Income: Service Fees 448 445 530 544 559 892 1,085 Insurance Commissions 1,511 1,922 1,399 1,368 1,369 3,434 3,167 Other Commissions 224 144 157 244 179 368 268 Net (Loss) Gain on Sales of Loans (5 ) 2 — — — (3 ) — Net (Loss) Gain on Securities (100 ) (232 ) 83 (46 ) (199 ) (332 ) (206 ) Net Gain on Purchased Tax Credits 7 7 14 14 14 14 28 Net Gain (Loss) on Disposal of Fixed Assets — 11 — 439 — 11 (8 ) Income from Bank-Owned Life Insurance 139 140 143 140 142 280 278 Net Gain on Bank-Owned Life Insurance Claims 1 302 — — — 303 — Other Income 44 69 34 36 41 113 106 Total Noninterest Income 2,269 2,810 2,360 2,739 2,105 5,080 4,718 Noninterest Expense: Salaries and Employee Benefits 5,231 5,079 4,625 4,739 4,539 10,310 9,104 Occupancy 789 701 817 768 776 1,490 1,462 Equipment 283 218 178 170 182 501 392 Data Processing 718 857 681 540 446 1,575 931 FDIC Assessment 224 152 154 147 128 376 337 PA Shares Tax 195 260 258 240 240 455 480 Contracted Services 434 147 405 288 348 581 935 Legal and Professional Fees 246 182 362 334 389 428 541 Advertising 75 79 165 131 115 154 231 Other Real Estate Owned (Income) (35 ) (37 ) (38 ) (38 ) (37 ) (72 ) (75 ) Amortization of Intangible Assets 446 445 446 445 446 891 891 Other 895 945 945 1,063 838 1,841 1,837 Total Noninterest Expense 9,501 9,028 8,998 8,827 8,410 18,530 17,066 Income Before Income Tax Expense (Benefit) 3,456 5,285 5,228 4,927 74 8,742 3,924 Income Tax Expense (Benefit) 699 1,129 1,076 998 (44 ) 1,827 759 Net Income $ 2,757 $ 4,156 $ 4,152 $ 3,929 $ 118 $ 6,915 $ 3,165 Three Months Ended Six Months Ended Per Common Share Data 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 Dividends Per Common Share $ 0.25 $ 0.25 $ 0.24 $ 0.24 $ 0.24 $ 0.50 $ 0.48 Earnings Per Common Share - Basic 0.54 0.81 0.81 0.77 0.02 1.35 0.61 Earnings Per Common Share - Diluted 0.54 0.81 0.81 0.77 0.02 1.35 0.61 Weighted Average Common Shares Outstanding - Basic 5,111,987 5,109,597 5,095,237 5,106,861 5,147,846 5,110,799 5,172,881 Weighted Average Common Shares Outstanding - Diluted 5,116,134 5,115,705 5,104,254 5,118,627 5,156,975 5,118,396 5,189,144 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Common Shares Outstanding 5,111,678 5,116,830 5,100,189 5,096,672 5,128,333 Book Value Per Common Share $ 22.81 $ 22.90 $ 21.60 $ 20.94 $ 22.18 Tangible Book Value per Common Share (1) 20.39 20.40 19.00 18.25 19.43 Stockholders’ Equity to Assets 8.1 % 8.2 % 7.8 % 7.5 % 8.2 % Tangible Common Equity to Tangible Assets (1) 7.3 7.4 6.9 6.6 7.3 Three Months Ended Six Months Ended Selected Financial Ratios (2) 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 Return on Average Assets 0.79 % 1.21 % 1.16 % 1.12 % 0.03 % 1.00 % 0.45 % Return on Average Equity 9.38 14.69 15.26 13.60 0.40 11.98 5.15 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 142.37 147.53 149.04 149.41 149.03 144.88 146.74 Average Equity to Average Assets 8.38 8.27 7.63 8.20 8.49 8.33 8.81 Net Interest Rate Spread 2.78 3.12 3.17 3.10 3.00 2.95 3.00 Net Interest Rate Spread (FTE) (1) 2.79 3.13 3.18 3.11 3.01 2.96 3.01 Net Interest Margin 3.29 3.51 3.45 3.29 3.12 3.40 3.10 Net Interest Margin (FTE) (1) 3.30 3.52 3.46 3.30 3.13 3.41 3.11 Net Charge-Offs (Recoveries) to Average Loans 0.04 (0.29 ) 0.01 (0.01 ) 1.01 (0.12 ) 0.50 Efficiency Ratio 70.96 62.72 63.25 64.18 68.55 66.69 68.89 Asset Quality Ratios 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Allowance for Credit Losses to Total Loans 0.97 % 0.96 % 1.22 % 1.23 % 1.25 % Allowance for Credit Losses to Nonperforming Loans (3) 260.46 189.73 221.06 218.61 219.89 Allowance for Credit Losses to Noncurrent Loans (4) 260.46 189.73 320.64 318.96 329.47 Delinquent and Nonaccrual Loans to Total Loans (4) (5) 0.68 1.02 0.81 0.46 0.45 Nonperforming Loans to Total Loans (3) 0.37 0.51 0.55 0.56 0.57 Noncurrent Loans to Total Loans (4) 0.37 0.51 0.38 0.39 0.38 Nonperforming Assets to Total Assets (6) 0.30 0.40 0.41 0.41 0.42 Capital Ratios (7) 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.54 % 12.60 % 12.33 % 12.02 % 11.83 % Tier 1 Capital (to Risk Weighted Assets) 12.54 12.60 12.33 12.02 11.83 Total Capital (to Risk Weighted Assets) 13.64 13.69 13.58 13.27 13.08 Tier 1 Leverage (to Adjusted Total Assets) 9.26 9.24 8.66 8.51 8.33 (1) Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (2) Interim period ratios are calculated on an annualized basis. (3) Nonperforming loans consist of all nonaccrual loans and accruing loans that are 90 days or more past due. (4) 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 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 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) $ 1,079,399 $ 13,450 5.00 % $ 1,040,570 $ 12,391 4.83 % $ 1,034,714 $ 11,853 4.54 % $ 1,024,363 $ 10,833 4.20 % $ 1,007,874 $ 9,751 3.88 % Debt Securities Taxable 209,292 950 1.82 213,158 964 1.81 216,915 974 1.80 222,110 985 1.77 228,315 988 1.73 Exempt From Federal Tax 6,180 53 3.43 6,270 52 3.32 6,277 51 3.25 7,998 62 3.10 9,109 73 3.21 Equity Securities 2,693 25 3.71 2,693 24 3.56 2,693 28 4.16 2,693 21 3.12 2,693 20 2.97 Interest-Earning Deposits at Banks 54,466 721 5.30 74,555 805 4.32 99,108 939 3.79 67,870 378 2.23 56,379 122 0.87 Other Interest-Earning Assets 2,783 39 5.62 2,633 39 6.01 2,875 39 5.38 2,784 39 5.56 3,235 38 4.71 Total Interest-Earning Assets 1,354,813 15,238 4.51 1,339,879 14,275 4.32 1,362,582 13,884 4.04 1,327,818 12,318 3.68 1,307,605 10,992 3.37 Noninterest-Earning Assets 51,928 48,369 51,718 68,796 84,323 Total Assets $ 1,406,741 $ 1,388,248 $ 1,414,300 $ 1,396,614 $ 1,391,928 Liabilities and Stockholders' Equity: Interest-Bearing Liabilities: Interest-Bearing Demand Accounts $ 354,497 $ 1,582 1.79 % $ 335,327 $ 1,191 1.44 % $ 315,352 $ 810 1.02 % $ 278,412 $ 393 0.56 % $ 260,655 $ 111 0.17 % Savings Accounts 225,175 53 0.09 242,298 37 0.06 249,948 29 0.05 251,148 20 0.03 248,356 20 0.03 Money Market Accounts 194,565 1,033 2.13 213,443 939 1.78 206,192 604 1.16 189,371 269 0.56 188,804 61 0.13 Time Deposits 155,867 1,174 3.02 101,147 337 1.35 116,172 368 1.26 123,438 397 1.28 127,832 412 1.29 Total Interest-Bearing Deposits 930,104 3,842 1.66 892,215 2,504 1.14 887,664 1,811 0.81 842,369 1,079 0.51 825,647 604 0.29 Short-Term Borrowings 480 3 2.51 1,344 2 0.60 8,985 7 0.31 28,738 19 0.26 34,135 18 0.21 Other Borrowings 21,026 238 4.54 14,641 155 4.29 17,598 171 3.86 17,621 174 3.92 17,611 173 3.94 Total Interest-Bearing Liabilities 951,610 4,083 1.72 908,200 2,661 1.19 914,247 1,989 0.86 888,728 1,272 0.57 877,393 795 0.36 Noninterest-Bearing Demand Deposits 326,262 362,343 391,300 390,658 391,975 Other Liabilities 10,920 2,953 788 2,636 4,415 Total Liabilities 1,288,792 1,273,496 1,306,335 1,282,022 1,273,783 Stockholders' Equity 117,949 114,752 107,965 114,592 118,145 Total Liabilities and Stockholders' Equity $ 1,406,741 $ 1,388,248 $ 1,414,300 $ 1,396,614 $ 1,391,928 Net Interest Income (FTE) (Non-GAAP) (3) $ 11,155 $ 11,614 $ 11,895 $ 11,046 $ 10,197 Net Interest-Earning Assets (4) 403,203 431,679 448,335 439,090 430,212 Net Interest Rate Spread (FTE) (Non-GAAP) (3) (5) 2.79 % 3.13 % 3.18 % 3.11 % 3.01 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.30 3.52 3.46 3.30 3.13 PPP Loans 38 1 10.56 100 3 12.17 216 22 40.41 2,424 123 20.13 5,546 144 10.41 (1) Annualized based on three months ended results. (2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. AVERAGE BALANCES AND YIELDS Six Months Ended June 30, 2023 June 30, 2022 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) $ 1,060,092 $ 25,840 4.92 % $ 1,008,539 $ 19,322 3.86 % Debt Securities Taxable 211,213 1,914 1.81 222,144 1,893 1.70 Exempt From Federal Tax 6,225 105 3.37 9,649 156 3.23 Marketable Equity Securities 2,693 49 3.64 2,693 42 3.12 Interest-Earning Deposits at Banks 64,455 1,526 4.74 57,829 156 0.54 Other Interest-Earning Assets 2,709 79 5.88 3,358 76 4.56 Total Interest-Earning Assets 1,347,387 29,513 4.42 1,304,212 21,645 3.35 Noninterest-Earning Assets 50,159 103,201 Total Assets $ 1,397,546 $ 1,407,413 Liabilities and Stockholders' Equity: Interest-Bearing Liabilities: Interest-Bearing Demand Accounts $ 344,965 $ 2,773 1.62 % $ 268,585 $ 160 0.12 % Savings Accounts 233,689 90 0.08 246,084 38 0.03 Money Market Accounts 203,952 1,972 1.95 190,605 102 0.11 Time Deposits 128,659 1,511 2.37 129,914 834 1.29 Total Interest-Bearing Deposits 911,265 6,346 1.40 835,188 1,134 0.27 Short-Term Borrowings 910 5 1.11 36,000 37 0.21 Other Borrowings 17,850 393 4.44 17,608 347 3.97 Total Interest-Bearing Liabilities 930,025 6,744 1.46 888,796 1,518 0.34 Noninterest-Bearing Demand Deposits 344,203 388,103 Other Liabilities 6,959 6,468 Total Liabilities 1,281,187 1,283,367 Stockholders' Equity 116,359 124,046 Total Liabilities and Stockholders' Equity $ 1,397,546 $ 1,407,413 Net Interest Income (FTE) (Non-GAAP) (3) 22,769 20,127 Net Interest-Earning Assets (4) 417,362 415,416 Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5) 2.96 % 3.01 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.41 3.11 PPP Loans 69 4 11.69 10,085 589 11.78 (1) Annualized based on six months ended results (2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. Explanation of Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Press Release contains or references, certain Non-GAAP financial measures. We believe these Non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these Non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar Non-GAAP measures which may be presented by other companies. Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 (Dollars in thousands, except share and per share data) (Unaudited) Assets (GAAP) $ 1,432,733 $ 1,430,708 $ 1,408,938 $ 1,425,920 $ 1,386,461 Goodwill and Intangible Assets, Net (12,354 ) (12,800 ) (13,245 ) (13,691 ) (14,136 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,420,379 $ 1,417,908 $ 1,395,693 $ 1,412,229 $ 1,372,325 Stockholders' Equity (GAAP) $ 116,589 $ 117,195 $ 110,155 $ 106,706 $ 113,772 Goodwill and Intangible Assets, Net (12,354 ) (12,800 ) (13,245 ) (13,691 ) (14,136 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 104,235 $ 104,395 $ 96,910 $ 93,015 $ 99,636 Stockholders’ Equity to Assets (GAAP) 8.1 % 8.2 % 7.8 % 7.5 % 8.2 % Tangible Common Equity to Tangible Assets (Non-GAAP) 7.3 % 7.4 % 6.9 % 6.6 % 7.3 % Common Shares Outstanding (Denominator) 5,111,678 5,116,830 5,100,189 5,096,672 5,128,333 Book Value per Common Share (GAAP) $ 22.81 $ 22.90 $ 21.60 $ 20.94 $ 22.18 Tangible Book Value per Common Share (Non-GAAP) $ 20.39 $ 20.40 $ 19.00 $ 18.25 $ 19.43 Three Months Ended Six Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 (Dollars in thousands) (Unaudited) Net Income (GAAP) $ 2,757 $ 4,156 $ 4,152 $ 3,929 $ 118 $ 6,915 $ 3,165 Amortization of Intangible Assets, Net 446 445 446 445 446 891 891 Adjusted Net Income (Non-GAAP) (Numerator) $ 3,203 $ 4,601 $ 4,598 $ 4,374 $ 564 $ 7,806 $ 4,056 Annualization Factor 4.01 4.06 3.97 3.97 4.01 2.02 2.02 Average Stockholders' Equity (GAAP) $ 117,949 $ 114,752 $ 107,965 $ 114,592 $ 118,145 $ 116,359 $ 124,046 Average Goodwill and Intangible Assets, Net (12,626 ) (13,080 ) (13,534 ) (13,968 ) (14,414 ) (12,852 ) (14,641 ) Average Tangible Common Equity (Non-GAAP) (Denominator) $ 105,323 $ 101,672 $ 94,431 $ 100,624 $ 103,731 $ 103,507 $ 109,405 Return on Average Equity (GAAP) 9.38 % 14.69 % 15.26 % 13.60 % 0.40 % 11.98 % 5.15 % Return on Average Tangible Common Equity (Non-GAAP) 12.20 % 18.35 % 19.32 % 17.25 % 2.18 % 15.21 % 7.48 % Three Months Ended Six Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 15,203 $ 14,244 $ 13,855 $ 12,287 $ 10,958 $ 29,448 $ 21,574 Adjustment to FTE Basis 35 31 29 31 34 65 71 Interest Income (FTE) (Non-GAAP) 15,238 14,275 13,884 12,318 10,992 29,513 21,645 Interest Expense (GAAP) 4,083 2,661 1,989 1,272 795 6,744 1,518 Net Interest Income (FTE) (Non-GAAP) $ 11,155 $ 11,614 $ 11,895 $ 11,046 $ 10,197 $ 22,769 $ 20,127 Net Interest Rate Spread (GAAP) 2.78 % 3.12 % 3.17 % 3.10 % 3.00 % 2.95 % 3.00 % 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) 2.79 3.13 3.18 3.11 3.01 2.96 3.01 Net Interest Margin (GAAP) 3.29 % 3.51 % 3.45 % 3.29 % 3.12 % 3.40 % 3.10 % Adjustment to FTE Basis 0.01 0.01 0.01 0.01 0.01 0.01 0.01 Net Interest Margin (FTE) (Non-GAAP) 3.30 3.52 3.46 3.30 3.13 3.41 3.11 Three Months Ended Six Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 (Dollars in thousands) (Unaudited) Net Income Before Income Tax Expense (Benefit) (GAAP) $ 3,456 $ 5,285 $ 5,228 $ 4,927 $ 74 $ 8,742 $ 3,924 Provision for Credit Losses 492 80 — — 3,784 572 3,784 PPNR (Non-GAAP) (Numerator) $ 3,948 $ 5,365 $ 5,228 $ 4,927 $ 3,858 $ 9,314 $ 7,708 Annualization Factor 4.01 4.06 3.97 3.97 4.01 2.02 2.02 Average Assets (Denominator) $ 1,406,741 $ 1,388,248 $ 1,414,300 $ 1,396,614 $ 1,391,928 $ 1,397,546 $ 1,407,413 PPNR Return on Average Assets (Non-GAAP) 1.13 % 1.57 % 1.47 % 1.40 % 1.11 % 1.34 % 1.10 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230728598887/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 Second Quarter and Year-to-Date 2023 Financial Results and Declares Quarterly Cash Dividend By: CB Financial Services, Inc. via Business Wire July 28, 2023 at 16:15 PM EDT CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”) and Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of the Bank, today announced its second quarter and year-to-date 2023 financial results. 2023 Second Quarter Financial Highlights (Comparisons to three months ended June 30, 2022 unless otherwise noted) Net income was $2.8 million, compared to $118,000. Prior period results were negatively impacted by provision for credit losses expense of approximately $3.8 million due primarily to a single commercial loan charge-off of $2.7 million. Current period results were positively impacted by net interest margin (NIM) expansion coupled with a modest increase in noninterest income, partially offset by an increase in noninterest expense. Income before income tax expense (benefit) was $3.5 million compared to $74,000. Pre-provision net revenue (PPNR) (non-GAAP) was $3.95 million compared to $3.86 million. Earnings per diluted common share (EPS) increased to $0.54 from $0.02. Return on average assets (annualized) was 0.79%, compared to 0.03%. Return on average equity (annualized) was 9.38%, compared to 0.40%. NIM improved to 3.29% from 3.12%. Net interest and dividend income was $11.1 million, compared to $10.2 million. Noninterest income increased to $2.3 million, compared to $2.1 million. The most significant changes in noninterest income included an increase in insurance commissions of $142,000 and a decrease in net losses on securities of $99,000. Noninterest expense increased to $9.5 million, compared to $8.4 million, primarily due to increases in compensation and benefits, equipment and data processing costs. (Amounts at June 30, 2023; comparisons to December 31, 2022, unless otherwise noted) Total assets increased to $1.43 billion from $1.41 billion. Total loans increased $51.3 million, or 4.9%, to $1.10 billion compared to $1.05 billion, and included increases of $32.2 million, or 46.0%, in commercial and industrial loans, $21.8 million, or 5.0%, in commercial real estate loans, and $7.8 million, or 2.3%, in residential mortgage loans, partially offset by a decrease of $12.1 million, or 8.3%, in consumer loans, which is primarily comprised of indirect automobile loans. Nonperforming loans to total loans was 0.37%, a decrease of 18 basis points (“bps”), compared to 0.55%. Total deposits were $1.26 billion, a decrease of $5.2 million, compared to $1.27 billion. Book value per share was $22.81, compared to $22.90 as of March 31, 2023 and $21.60 as of December 31, 2022. Tangible book value per share (Non-GAAP) was $20.39, compared to $20.40 as of March 31, 2023 and $19.00 as of December 31, 2022. The year-to-date change was due to an increase in stockholders’ equity primarily related to current period net income of $6.9 million and a $2.1 million positive adjustment due to the Company’s January 1, 2023 adoption of CECL, partially offset by current period dividends paid to stockholders of $2.6 million. Management Commentary President and CEO John H. Montgomery stated, “Our second quarter results demonstrated the durability of both our franchise and the community bank model in general. While macro dislocations seen in the banking industry during the first quarter have abated, we continue to face headwinds resulting from a rising interest rate environment. First and foremost, we are focused on ensuring the bank maintains adequate liquidity and a strong capital position. In doing so, we are able to navigate challenging economic times from a position of strength which also allows us to maintain relationships with trusted customers and develop new ones, as evidenced by our continued loan growth during the quarter. The markets we serve in southwestern Pennsylvania, eastern Ohio and northern West Virginia have remained resilient despite continued interest rate increases by the Federal Reserve. In recent years, our markets have exhibited more stability than others in key areas such as real estate values and employment, allowing Community Bank to experience less volatility.” Mr. Montgomery continued, “We have noted for several quarters that our funding costs have been rising, with net interest margin decreasing from first quarter levels while improving compared with the second quarter last year. As we highlighted last quarter, our deposit base is well-diversified, with a significant majority insured or collateralized. Within our deposit base, the most significant change during the second quarter was a shift to interest-bearing from noninterest-bearing deposits as our customers responded to the overall increase in market interest rates. The other half of our NIM calculation is our interest income, which has been supported by the repricing of variable rate loans and the addition of new, higher priced loans via the continued growth of our loan book during the second quarter, with C&I loans having been the biggest contributor, followed by commercial real estate loans. Moving forward, our NIM will also benefit as we reposition our loan book by reducing transactional indirect auto loans with higher yielding C&I and CRE loans ” Mr. Montgomery concluded, “As I noted previously, our team here at Community Bank is focused on maintaining solid capital and liquidity positions. Success on those fronts provides a range of positive outcomes for our business that ultimately lead to long-term value creation which benefits all our constituents - shareholders, employees, customers, and our communities at large. While the near-term economic picture remains somewhat muddled, we are also committed to making proper investments in our franchise to position the bank for long-term growth. During the second quarter we added revenue producing members to our team while also continuing to make targeted technology investments necessary for our competitive positioning. We also declared and paid a $0.25 cash dividend during the quarter while allowing our previous share repurchase program to expire. I am proud of our entire team for all their hard work and look forward to our continued success.” Dividend Information The Company’s Board of Directors declared a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about August 31, 2023, to stockholders of record as of the close of business on August 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. The Company purchased a total of 74,656 shares of the Company’s common stock at an average price of $22.38 per share prior to the program expiration on May 1, 2023. 2023 Second Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.0 million, or 9.4%, to $11.1 million for the three months ended June 30, 2023 compared to $10.2 million for the three months ended June 30, 2022. Net interest margin (GAAP) increased to 3.29% for the three months ended June 30, 2023 compared to 3.12% for the three months ended June 30, 2022. Fully tax equivalent (FTE) net interest margin (Non-GAAP) increased 17 bps to 3.30% for the three months ended June 30, 2023 compared to 3.13% for the three months ended June 30, 2022. Interest and dividend income increased $4.2 million, or 38.7%, to $15.2 million for the three months ended June 30, 2023 compared to $11.0 million for the three months ended June 30, 2022. Interest income on loans increased $3.7 million, or 37.9%, to $13.4 million for the three months ended June 30, 2023 compared to $9.7 million for the three months ended June 30, 2022. The average balance of loans increased $71.5 million to $1.08 billion from $1.01 billion, generating $724,000 of additional interest income on loans. The average yield increased 112 bps to 5.00% compared to 3.88% causing a $3.0 million increase in interest income on loans. Interest income on interest-earning deposits at other banks increased $599,000, to $721,000 for the three months ended June 30, 2023 compared to $122,000 for the three months ended June 30, 2022 as the average yield increased 443 bps, partially offset by a $1.9 million decrease in average balances. The increase in the average yield was the result of the Federal Reserve Board’s interest rate increases. Interest expense increased $3.3 million, or 413.6%, to $4.1 million for the three months ended June 30, 2023 compared to $795,000 for the three months ended June 30, 2022. Interest expense on deposits increased $3.2 million, or 536.1%, to $3.8 million for the three months ended June 30, 2023 compared to $604,000 for the three months ended June 30, 2022. Rising market interest rates led to the repricing of interest-bearing demand and money market deposits and a shift in deposits from non interest-bearing to interest-bearing demand and time deposits and resulted in a 137 bps, or 466.9%, increase in the average cost of interest-bearing deposits compared to the three months ended June 30, 2022. This accounted for a $3.2 million increase in interest expense. Additionally, interest-bearing deposit balances increased $104.5 million, or 12.7%, to $930.1 million as of June 30, 2023 compared to $825.6 million as of June 30, 2022, accounting for a $70,000 increase in interest expense. Provision for Credit Losses Effective January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The provision for credit losses recorded for the three months ended June 30, 2023 was $432,000 and was required primarily due to loan growth coupled with a modeled slowdown in loan prepayment speeds. This compared to $3.8 million in provision for credit losses recorded for the three months ended June 30, 2022, primarily due to the charge-off of a $2.7 million commercial and industrial loan to a borrower that ceased operations. Noninterest income Noninterest income increased $164,000, or 7.8%, to $2.3 million for the three months ended June 30, 2023, compared to $2.1 million for the three months ended June 30, 2022. This increase was primarily related to a $142,000 increase in commercial and personal insurance commissions and a decrease in net losses on securities of $99,000. Noninterest Expense Noninterest expense increased $1.1 million, or 13.0%, to $9.5 million for the three months ended June 30, 2023 compared to $8.4 million for the three months ended June 30, 2022. Salaries and benefits increased $692,000, or 15.2%, to $5.2 million primarily due to merit increases, revenue producing staff additions and associated $160,000 of recruiting costs, and $96,000 of severance costs related to the discontinuation of indirect automobile lending. Data processing expense increased $272,000, or 61.0%, to $718,000, due to increased ongoing costs related to the fourth quarter 2022 core conversion and equipment expense increased $101,000 or 55.5%, to $283,000, due to costs associated with the implementation of new interactive teller machines. Statement of Financial Condition Review Assets Total assets increased $23.8 million, or 1.7%, to $1.43 billion at June 30, 2023, compared to $1.41 billion at December 31, 2022. Cash and due from banks decreased $25.6 million, or 24.7%, to $78.1 million at June 30, 2023, compared to $103.7 million at December 31, 2022, due to significant loan growth. Securities decreased $8.6 million, or 4.5%, to $181.4 million at June 30, 2023, compared to $190.1 million at December 31, 2022. The securities balance was primarily impacted by $8.1 million of repayments on mortgage-backed and collateralized mortgage obligation securities and a $332,000 decrease in the market value in the equity securities portfolio, which is primarily comprised of bank stocks. Loans and Credit Quality Total loans increased $51.3 million, or 4.9%, to $1.10 billion at June 30, 2023 compared to $1.05 billion at December 31, 2022. Loan growth was driven by increases in commercial and industrial loans, commercial real estate loans and residential mortgage loans of $32.2 million, $21.8 million, and $7.8 million, respectively, partially offset by a decrease in consumer loans of $12.1 million. The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to rising market interest rates. Further decreases in this portfolio is expected as the Bank discontinued this product offering at June 30, 2023 to allocate resources and focus production efforts on more profitable commercial products. The allowance for credit losses (ACL) was $10.7 million at June 30, 2023 and $12.8 million at December 31, 2022. As a result, the ACL to total loans was 0.97% at June 30, 2023 compared to 1.22% at December 31, 2022. The change in the ACL was primarily due to the Company's aforementioned adoption of CECL. At adoption, the Company decreased its ACL by $3.4 million. Contributing to the change in ACL was a prior year charge-off of $2.7 million and qualitative factors that significantly impacted the incurred loss model driven by historical activity compared to the adopted CECL methodology that is centered around current expected credit loss (CECL) activity using a forecast approach. Net charge-offs for the three months ended June 30, 2023 were $96,000, or 0.04% of average loans on an annualized basis. Net charge-offs for the three months ended June 30, 2022 were $2.5 million, or 1.01% of average loans on an annualized basis primarily due to the aforementioned $2.7 million charge-off of a commercial and industrial loan. Net recoveries for the six months ended June 30, 2023 were $660,000 primarily due to recoveries totaling $750,000 related to the prior year charged-off loan. Net charge-offs for the six months ended June 30, 2022 were $2.5 million. Nonperforming loans, which includes nonaccrual loans and accruing loans past due 90 days or more, were $4.1 million at June 30, 2023 compared to $5.8 million at December 31, 2022. The decrease of $1.7 million was due to ten loans totaling $1.7 million being moved from nonaccrual to accrual status during the current period. Current nonperforming loans to total loans ratio was 0.37% compared to 0.55% at December 31, 2022. Other Intangible assets decreased $891,000, or 25.6%, to $2.6 million at June 30, 2023 compared to $3.5 million at December 31, 2022 due to amortization expense recognized during the period. Accrued interest and other assets increased $5.6 million, or 26.8%, to $26.7 million at June 30, 2023, compared to $21.1 million at December 31, 2022 due to the sale of a $2.0 million syndicated loan which was sold but not yet settled at the end of the period, and increases in accounts receivable for EU, income taxes receivable and BOLI death benefit claims receivable $853,000, $761,000 and $664,000. Total liabilities increased $17.4 million, or 1.3%, to $1.32 billion at June 30, 2023 compared to $1.30 billion at December 31, 2022. Deposits Total deposits decreased $5.2 million to $1.26 billion as of June 30, 2023 compared to $1.27 billion at December 31, 2022. Interest-bearing demand deposits increased $62.8 million and time deposits increased $60.4 million, while non interest-bearing demand deposits decreased $74.3 million, money market deposits decreased $23.3 million and savings deposits decreased $30.8 million. The increase in interest-bearing demand deposits is primarily the result of higher interest rates attracting more customers and additional deposits from existing customers while higher time deposits resulted from the offering of a higher-rate certificate of deposit product. FDIC insured deposits totaled approximately 61.1% of total deposits while an additional 16.5% of deposits were collateralized with investment securities. Borrowed Funds Long-term borrowings increased $20.0 million, or 136.6%, to $34.7 million at June 30, 2023, compared to $14.6 million at December 31, 2022. During the second quarter, the Bank entered into $20.0 million of FHLB advances for a term of 24 months at 4.92%, the proceeds of which were utilized to match fund originations within the Bank’s commercial and industrial loan portfolio. Short-term borrowings decreased $8.1 million, or 100.0%, as there were no short-term borrowings at June 30, 2023, compared to $8.1 million at December 31, 2022. At December 31, 2022, short-term borrowings were comprised entirely of securities sold under agreements to repurchase. These accounts were transitioned into other deposit products and account for a portion of the interest-bearing demand deposit increase. Accrued Interest Payable and Other Liabilities Accrued interest payable and other liabilities increased $10.6 million, or 139.8%, to $18.2 million at June 30, 2023, compared to $7.6 million at December 31, 2022 primarily due to the purchase of $8.9 million of syndicated loans which were unfunded at the end of the period. Stockholders’ Equity Stockholders’ equity increased $6.4 million, or 5.8%, to $116.6 million at June 30, 2023, compared to $110.2 million at December 31, 2022. Key factors positively impacting stockholders’ equity included $6.9 million of net income for the current period and a $2.1 million positive adjustment, net of tax, due to the Company’s January 1, 2023 adoption of CECL as described above. These factors were partially offset by the payment of $2.6 million in dividends since December 31, 2022 and activity under share repurchase programs. On April 21, 2022, a $10.0 million repurchase program was authorized, with the Company repurchasing 74,656 shares at an average price of $22.38 per share since the inception of the plan. In total, the Company repurchased $274,000 of common stock since December 31, 2022. The plan expired on May 1, 2023. Book value per share Book value per common share was $22.81 at June 30, 2023 compared to $21.60 at December 31, 2022, an increase of $1.21. Tangible book value per common share (Non-GAAP) was $20.39 at June 30, 2023, compared to $19.00 at December 31, 2022, an increase of $1.39. 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, 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 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Assets Cash and Due From Banks $ 78,093 $ 103,545 $ 103,700 $ 122,801 $ 81,121 Securities 181,427 189,025 190,058 193,846 213,505 Loans Real Estate: Residential 338,493 332,840 330,725 328,248 325,138 Commercial 458,614 452,770 436,805 432,516 426,105 Construction 44,523 39,522 44,923 49,502 41,277 Commercial and Industrial: Commercial and Industrial 102,232 79,436 69,918 61,428 62,054 PPP 34 65 126 768 3,853 Consumer 134,788 146,081 146,927 150,615 148,921 Other 22,470 21,151 20,449 19,865 20,621 Total Loans 1,101,154 1,071,865 1,049,873 1,042,942 1,027,969 Allowance for Credit Losses (10,666 ) (10,270 ) (12,819 ) (12,854 ) (12,833 ) Loans, Net 1,090,488 1,061,595 1,037,054 1,030,088 1,015,136 Premises and Equipment, Net 18,582 17,732 17,844 18,064 18,196 Bank-Owned Life Insurance 25,082 24,943 25,893 25,750 25,610 Goodwill 9,732 9,732 9,732 9,732 9,732 Intangible Assets, Net 2,622 3,068 3,513 3,959 4,404 Accrued Interest Receivable and Other Assets 26,707 21,068 21,144 21,680 18,757 Total Assets $ 1,432,733 $ 1,430,708 $ 1,408,938 $ 1,425,920 $ 1,386,461 Liabilities Deposits Noninterest-Bearing Demand Accounts $ 316,098 $ 350,911 $ 390,405 $ 407,107 $ 389,127 Interest-Bearing Demand Accounts 374,654 359,051 311,825 298,755 265,347 Money Market Accounts 185,814 206,174 209,125 198,715 185,308 Savings Accounts 217,267 234,935 248,022 250,378 250,226 Time Deposits 169,482 130,449 109,126 120,879 125,182 Total Deposits 1,263,315 1,281,520 1,268,503 1,275,834 1,215,190 Short-Term Borrowings — 121 8,060 18,108 32,178 Other Borrowings 34,658 14,648 14,638 17,627 17,618 Accrued Interest Payable and Other Liabilities 18,171 17,224 7,582 7,645 7,703 Total Liabilities 1,316,144 1,313,513 1,298,783 1,319,214 1,272,689 Stockholders’ Equity 116,589 117,195 110,155 106,706 113,772 Total Liabilities and Stockholders’ Equity $ 1,432,733 $ 1,430,708 $ 1,408,938 $ 1,425,920 $ 1,386,461 (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended Six Months Ended Selected Operating Data 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 Interest and Dividend Income: Loans, Including Fees $ 13,426 $ 12,371 $ 11,835 $ 10,815 $ 9,733 $ 25,797 $ 19,284 Securities: Taxable 950 964 974 985 988 1,914 1,893 Tax-Exempt 42 41 40 49 57 83 123 Dividends 25 24 28 21 20 49 42 Other Interest and Dividend Income 760 844 978 417 160 1,605 232 Total Interest and Dividend Income 15,203 14,244 13,855 12,287 10,958 29,448 21,574 Interest Expense: Deposits 3,842 2,504 1,811 1,079 604 6,346 1,134 Short-Term Borrowings 3 2 7 19 18 5 37 Other Borrowings 238 155 171 174 173 393 347 Total Interest Expense 4,083 2,661 1,989 1,272 795 6,744 1,518 Net Interest and Dividend Income 11,120 11,583 11,866 11,015 10,163 22,704 20,056 Provision for Credit Losses - Loans 492 80 — — 3,784 572 3,784 Recovery for Credit Losses - Unfunded Commitments (60 ) — — — — (60 ) — Net Interest and Dividend Income After Provision for Credit Losses 10,688 11,503 11,866 11,015 6,379 22,192 16,272 Noninterest Income: Service Fees 448 445 530 544 559 892 1,085 Insurance Commissions 1,511 1,922 1,399 1,368 1,369 3,434 3,167 Other Commissions 224 144 157 244 179 368 268 Net (Loss) Gain on Sales of Loans (5 ) 2 — — — (3 ) — Net (Loss) Gain on Securities (100 ) (232 ) 83 (46 ) (199 ) (332 ) (206 ) Net Gain on Purchased Tax Credits 7 7 14 14 14 14 28 Net Gain (Loss) on Disposal of Fixed Assets — 11 — 439 — 11 (8 ) Income from Bank-Owned Life Insurance 139 140 143 140 142 280 278 Net Gain on Bank-Owned Life Insurance Claims 1 302 — — — 303 — Other Income 44 69 34 36 41 113 106 Total Noninterest Income 2,269 2,810 2,360 2,739 2,105 5,080 4,718 Noninterest Expense: Salaries and Employee Benefits 5,231 5,079 4,625 4,739 4,539 10,310 9,104 Occupancy 789 701 817 768 776 1,490 1,462 Equipment 283 218 178 170 182 501 392 Data Processing 718 857 681 540 446 1,575 931 FDIC Assessment 224 152 154 147 128 376 337 PA Shares Tax 195 260 258 240 240 455 480 Contracted Services 434 147 405 288 348 581 935 Legal and Professional Fees 246 182 362 334 389 428 541 Advertising 75 79 165 131 115 154 231 Other Real Estate Owned (Income) (35 ) (37 ) (38 ) (38 ) (37 ) (72 ) (75 ) Amortization of Intangible Assets 446 445 446 445 446 891 891 Other 895 945 945 1,063 838 1,841 1,837 Total Noninterest Expense 9,501 9,028 8,998 8,827 8,410 18,530 17,066 Income Before Income Tax Expense (Benefit) 3,456 5,285 5,228 4,927 74 8,742 3,924 Income Tax Expense (Benefit) 699 1,129 1,076 998 (44 ) 1,827 759 Net Income $ 2,757 $ 4,156 $ 4,152 $ 3,929 $ 118 $ 6,915 $ 3,165 Three Months Ended Six Months Ended Per Common Share Data 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 Dividends Per Common Share $ 0.25 $ 0.25 $ 0.24 $ 0.24 $ 0.24 $ 0.50 $ 0.48 Earnings Per Common Share - Basic 0.54 0.81 0.81 0.77 0.02 1.35 0.61 Earnings Per Common Share - Diluted 0.54 0.81 0.81 0.77 0.02 1.35 0.61 Weighted Average Common Shares Outstanding - Basic 5,111,987 5,109,597 5,095,237 5,106,861 5,147,846 5,110,799 5,172,881 Weighted Average Common Shares Outstanding - Diluted 5,116,134 5,115,705 5,104,254 5,118,627 5,156,975 5,118,396 5,189,144 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Common Shares Outstanding 5,111,678 5,116,830 5,100,189 5,096,672 5,128,333 Book Value Per Common Share $ 22.81 $ 22.90 $ 21.60 $ 20.94 $ 22.18 Tangible Book Value per Common Share (1) 20.39 20.40 19.00 18.25 19.43 Stockholders’ Equity to Assets 8.1 % 8.2 % 7.8 % 7.5 % 8.2 % Tangible Common Equity to Tangible Assets (1) 7.3 7.4 6.9 6.6 7.3 Three Months Ended Six Months Ended Selected Financial Ratios (2) 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 Return on Average Assets 0.79 % 1.21 % 1.16 % 1.12 % 0.03 % 1.00 % 0.45 % Return on Average Equity 9.38 14.69 15.26 13.60 0.40 11.98 5.15 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 142.37 147.53 149.04 149.41 149.03 144.88 146.74 Average Equity to Average Assets 8.38 8.27 7.63 8.20 8.49 8.33 8.81 Net Interest Rate Spread 2.78 3.12 3.17 3.10 3.00 2.95 3.00 Net Interest Rate Spread (FTE) (1) 2.79 3.13 3.18 3.11 3.01 2.96 3.01 Net Interest Margin 3.29 3.51 3.45 3.29 3.12 3.40 3.10 Net Interest Margin (FTE) (1) 3.30 3.52 3.46 3.30 3.13 3.41 3.11 Net Charge-Offs (Recoveries) to Average Loans 0.04 (0.29 ) 0.01 (0.01 ) 1.01 (0.12 ) 0.50 Efficiency Ratio 70.96 62.72 63.25 64.18 68.55 66.69 68.89 Asset Quality Ratios 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Allowance for Credit Losses to Total Loans 0.97 % 0.96 % 1.22 % 1.23 % 1.25 % Allowance for Credit Losses to Nonperforming Loans (3) 260.46 189.73 221.06 218.61 219.89 Allowance for Credit Losses to Noncurrent Loans (4) 260.46 189.73 320.64 318.96 329.47 Delinquent and Nonaccrual Loans to Total Loans (4) (5) 0.68 1.02 0.81 0.46 0.45 Nonperforming Loans to Total Loans (3) 0.37 0.51 0.55 0.56 0.57 Noncurrent Loans to Total Loans (4) 0.37 0.51 0.38 0.39 0.38 Nonperforming Assets to Total Assets (6) 0.30 0.40 0.41 0.41 0.42 Capital Ratios (7) 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.54 % 12.60 % 12.33 % 12.02 % 11.83 % Tier 1 Capital (to Risk Weighted Assets) 12.54 12.60 12.33 12.02 11.83 Total Capital (to Risk Weighted Assets) 13.64 13.69 13.58 13.27 13.08 Tier 1 Leverage (to Adjusted Total Assets) 9.26 9.24 8.66 8.51 8.33 (1) Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (2) Interim period ratios are calculated on an annualized basis. (3) Nonperforming loans consist of all nonaccrual loans and accruing loans that are 90 days or more past due. (4) 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 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 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) $ 1,079,399 $ 13,450 5.00 % $ 1,040,570 $ 12,391 4.83 % $ 1,034,714 $ 11,853 4.54 % $ 1,024,363 $ 10,833 4.20 % $ 1,007,874 $ 9,751 3.88 % Debt Securities Taxable 209,292 950 1.82 213,158 964 1.81 216,915 974 1.80 222,110 985 1.77 228,315 988 1.73 Exempt From Federal Tax 6,180 53 3.43 6,270 52 3.32 6,277 51 3.25 7,998 62 3.10 9,109 73 3.21 Equity Securities 2,693 25 3.71 2,693 24 3.56 2,693 28 4.16 2,693 21 3.12 2,693 20 2.97 Interest-Earning Deposits at Banks 54,466 721 5.30 74,555 805 4.32 99,108 939 3.79 67,870 378 2.23 56,379 122 0.87 Other Interest-Earning Assets 2,783 39 5.62 2,633 39 6.01 2,875 39 5.38 2,784 39 5.56 3,235 38 4.71 Total Interest-Earning Assets 1,354,813 15,238 4.51 1,339,879 14,275 4.32 1,362,582 13,884 4.04 1,327,818 12,318 3.68 1,307,605 10,992 3.37 Noninterest-Earning Assets 51,928 48,369 51,718 68,796 84,323 Total Assets $ 1,406,741 $ 1,388,248 $ 1,414,300 $ 1,396,614 $ 1,391,928 Liabilities and Stockholders' Equity: Interest-Bearing Liabilities: Interest-Bearing Demand Accounts $ 354,497 $ 1,582 1.79 % $ 335,327 $ 1,191 1.44 % $ 315,352 $ 810 1.02 % $ 278,412 $ 393 0.56 % $ 260,655 $ 111 0.17 % Savings Accounts 225,175 53 0.09 242,298 37 0.06 249,948 29 0.05 251,148 20 0.03 248,356 20 0.03 Money Market Accounts 194,565 1,033 2.13 213,443 939 1.78 206,192 604 1.16 189,371 269 0.56 188,804 61 0.13 Time Deposits 155,867 1,174 3.02 101,147 337 1.35 116,172 368 1.26 123,438 397 1.28 127,832 412 1.29 Total Interest-Bearing Deposits 930,104 3,842 1.66 892,215 2,504 1.14 887,664 1,811 0.81 842,369 1,079 0.51 825,647 604 0.29 Short-Term Borrowings 480 3 2.51 1,344 2 0.60 8,985 7 0.31 28,738 19 0.26 34,135 18 0.21 Other Borrowings 21,026 238 4.54 14,641 155 4.29 17,598 171 3.86 17,621 174 3.92 17,611 173 3.94 Total Interest-Bearing Liabilities 951,610 4,083 1.72 908,200 2,661 1.19 914,247 1,989 0.86 888,728 1,272 0.57 877,393 795 0.36 Noninterest-Bearing Demand Deposits 326,262 362,343 391,300 390,658 391,975 Other Liabilities 10,920 2,953 788 2,636 4,415 Total Liabilities 1,288,792 1,273,496 1,306,335 1,282,022 1,273,783 Stockholders' Equity 117,949 114,752 107,965 114,592 118,145 Total Liabilities and Stockholders' Equity $ 1,406,741 $ 1,388,248 $ 1,414,300 $ 1,396,614 $ 1,391,928 Net Interest Income (FTE) (Non-GAAP) (3) $ 11,155 $ 11,614 $ 11,895 $ 11,046 $ 10,197 Net Interest-Earning Assets (4) 403,203 431,679 448,335 439,090 430,212 Net Interest Rate Spread (FTE) (Non-GAAP) (3) (5) 2.79 % 3.13 % 3.18 % 3.11 % 3.01 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.30 3.52 3.46 3.30 3.13 PPP Loans 38 1 10.56 100 3 12.17 216 22 40.41 2,424 123 20.13 5,546 144 10.41 (1) Annualized based on three months ended results. (2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. AVERAGE BALANCES AND YIELDS Six Months Ended June 30, 2023 June 30, 2022 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) $ 1,060,092 $ 25,840 4.92 % $ 1,008,539 $ 19,322 3.86 % Debt Securities Taxable 211,213 1,914 1.81 222,144 1,893 1.70 Exempt From Federal Tax 6,225 105 3.37 9,649 156 3.23 Marketable Equity Securities 2,693 49 3.64 2,693 42 3.12 Interest-Earning Deposits at Banks 64,455 1,526 4.74 57,829 156 0.54 Other Interest-Earning Assets 2,709 79 5.88 3,358 76 4.56 Total Interest-Earning Assets 1,347,387 29,513 4.42 1,304,212 21,645 3.35 Noninterest-Earning Assets 50,159 103,201 Total Assets $ 1,397,546 $ 1,407,413 Liabilities and Stockholders' Equity: Interest-Bearing Liabilities: Interest-Bearing Demand Accounts $ 344,965 $ 2,773 1.62 % $ 268,585 $ 160 0.12 % Savings Accounts 233,689 90 0.08 246,084 38 0.03 Money Market Accounts 203,952 1,972 1.95 190,605 102 0.11 Time Deposits 128,659 1,511 2.37 129,914 834 1.29 Total Interest-Bearing Deposits 911,265 6,346 1.40 835,188 1,134 0.27 Short-Term Borrowings 910 5 1.11 36,000 37 0.21 Other Borrowings 17,850 393 4.44 17,608 347 3.97 Total Interest-Bearing Liabilities 930,025 6,744 1.46 888,796 1,518 0.34 Noninterest-Bearing Demand Deposits 344,203 388,103 Other Liabilities 6,959 6,468 Total Liabilities 1,281,187 1,283,367 Stockholders' Equity 116,359 124,046 Total Liabilities and Stockholders' Equity $ 1,397,546 $ 1,407,413 Net Interest Income (FTE) (Non-GAAP) (3) 22,769 20,127 Net Interest-Earning Assets (4) 417,362 415,416 Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5) 2.96 % 3.01 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.41 3.11 PPP Loans 69 4 11.69 10,085 589 11.78 (1) Annualized based on six months ended results (2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. Explanation of Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Press Release contains or references, certain Non-GAAP financial measures. We believe these Non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these Non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar Non-GAAP measures which may be presented by other companies. Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 (Dollars in thousands, except share and per share data) (Unaudited) Assets (GAAP) $ 1,432,733 $ 1,430,708 $ 1,408,938 $ 1,425,920 $ 1,386,461 Goodwill and Intangible Assets, Net (12,354 ) (12,800 ) (13,245 ) (13,691 ) (14,136 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,420,379 $ 1,417,908 $ 1,395,693 $ 1,412,229 $ 1,372,325 Stockholders' Equity (GAAP) $ 116,589 $ 117,195 $ 110,155 $ 106,706 $ 113,772 Goodwill and Intangible Assets, Net (12,354 ) (12,800 ) (13,245 ) (13,691 ) (14,136 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 104,235 $ 104,395 $ 96,910 $ 93,015 $ 99,636 Stockholders’ Equity to Assets (GAAP) 8.1 % 8.2 % 7.8 % 7.5 % 8.2 % Tangible Common Equity to Tangible Assets (Non-GAAP) 7.3 % 7.4 % 6.9 % 6.6 % 7.3 % Common Shares Outstanding (Denominator) 5,111,678 5,116,830 5,100,189 5,096,672 5,128,333 Book Value per Common Share (GAAP) $ 22.81 $ 22.90 $ 21.60 $ 20.94 $ 22.18 Tangible Book Value per Common Share (Non-GAAP) $ 20.39 $ 20.40 $ 19.00 $ 18.25 $ 19.43 Three Months Ended Six Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 (Dollars in thousands) (Unaudited) Net Income (GAAP) $ 2,757 $ 4,156 $ 4,152 $ 3,929 $ 118 $ 6,915 $ 3,165 Amortization of Intangible Assets, Net 446 445 446 445 446 891 891 Adjusted Net Income (Non-GAAP) (Numerator) $ 3,203 $ 4,601 $ 4,598 $ 4,374 $ 564 $ 7,806 $ 4,056 Annualization Factor 4.01 4.06 3.97 3.97 4.01 2.02 2.02 Average Stockholders' Equity (GAAP) $ 117,949 $ 114,752 $ 107,965 $ 114,592 $ 118,145 $ 116,359 $ 124,046 Average Goodwill and Intangible Assets, Net (12,626 ) (13,080 ) (13,534 ) (13,968 ) (14,414 ) (12,852 ) (14,641 ) Average Tangible Common Equity (Non-GAAP) (Denominator) $ 105,323 $ 101,672 $ 94,431 $ 100,624 $ 103,731 $ 103,507 $ 109,405 Return on Average Equity (GAAP) 9.38 % 14.69 % 15.26 % 13.60 % 0.40 % 11.98 % 5.15 % Return on Average Tangible Common Equity (Non-GAAP) 12.20 % 18.35 % 19.32 % 17.25 % 2.18 % 15.21 % 7.48 % Three Months Ended Six Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 15,203 $ 14,244 $ 13,855 $ 12,287 $ 10,958 $ 29,448 $ 21,574 Adjustment to FTE Basis 35 31 29 31 34 65 71 Interest Income (FTE) (Non-GAAP) 15,238 14,275 13,884 12,318 10,992 29,513 21,645 Interest Expense (GAAP) 4,083 2,661 1,989 1,272 795 6,744 1,518 Net Interest Income (FTE) (Non-GAAP) $ 11,155 $ 11,614 $ 11,895 $ 11,046 $ 10,197 $ 22,769 $ 20,127 Net Interest Rate Spread (GAAP) 2.78 % 3.12 % 3.17 % 3.10 % 3.00 % 2.95 % 3.00 % 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) 2.79 3.13 3.18 3.11 3.01 2.96 3.01 Net Interest Margin (GAAP) 3.29 % 3.51 % 3.45 % 3.29 % 3.12 % 3.40 % 3.10 % Adjustment to FTE Basis 0.01 0.01 0.01 0.01 0.01 0.01 0.01 Net Interest Margin (FTE) (Non-GAAP) 3.30 3.52 3.46 3.30 3.13 3.41 3.11 Three Months Ended Six Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 (Dollars in thousands) (Unaudited) Net Income Before Income Tax Expense (Benefit) (GAAP) $ 3,456 $ 5,285 $ 5,228 $ 4,927 $ 74 $ 8,742 $ 3,924 Provision for Credit Losses 492 80 — — 3,784 572 3,784 PPNR (Non-GAAP) (Numerator) $ 3,948 $ 5,365 $ 5,228 $ 4,927 $ 3,858 $ 9,314 $ 7,708 Annualization Factor 4.01 4.06 3.97 3.97 4.01 2.02 2.02 Average Assets (Denominator) $ 1,406,741 $ 1,388,248 $ 1,414,300 $ 1,396,614 $ 1,391,928 $ 1,397,546 $ 1,407,413 PPNR Return on Average Assets (Non-GAAP) 1.13 % 1.57 % 1.47 % 1.40 % 1.11 % 1.34 % 1.10 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230728598887/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 second quarter and year-to-date 2023 financial results. 2023 Second Quarter Financial Highlights (Comparisons to three months ended June 30, 2022 unless otherwise noted) Net income was $2.8 million, compared to $118,000. Prior period results were negatively impacted by provision for credit losses expense of approximately $3.8 million due primarily to a single commercial loan charge-off of $2.7 million. Current period results were positively impacted by net interest margin (NIM) expansion coupled with a modest increase in noninterest income, partially offset by an increase in noninterest expense. Income before income tax expense (benefit) was $3.5 million compared to $74,000. Pre-provision net revenue (PPNR) (non-GAAP) was $3.95 million compared to $3.86 million. Earnings per diluted common share (EPS) increased to $0.54 from $0.02. Return on average assets (annualized) was 0.79%, compared to 0.03%. Return on average equity (annualized) was 9.38%, compared to 0.40%. NIM improved to 3.29% from 3.12%. Net interest and dividend income was $11.1 million, compared to $10.2 million. Noninterest income increased to $2.3 million, compared to $2.1 million. The most significant changes in noninterest income included an increase in insurance commissions of $142,000 and a decrease in net losses on securities of $99,000. Noninterest expense increased to $9.5 million, compared to $8.4 million, primarily due to increases in compensation and benefits, equipment and data processing costs. (Amounts at June 30, 2023; comparisons to December 31, 2022, unless otherwise noted) Total assets increased to $1.43 billion from $1.41 billion. Total loans increased $51.3 million, or 4.9%, to $1.10 billion compared to $1.05 billion, and included increases of $32.2 million, or 46.0%, in commercial and industrial loans, $21.8 million, or 5.0%, in commercial real estate loans, and $7.8 million, or 2.3%, in residential mortgage loans, partially offset by a decrease of $12.1 million, or 8.3%, in consumer loans, which is primarily comprised of indirect automobile loans. Nonperforming loans to total loans was 0.37%, a decrease of 18 basis points (“bps”), compared to 0.55%. Total deposits were $1.26 billion, a decrease of $5.2 million, compared to $1.27 billion. Book value per share was $22.81, compared to $22.90 as of March 31, 2023 and $21.60 as of December 31, 2022. Tangible book value per share (Non-GAAP) was $20.39, compared to $20.40 as of March 31, 2023 and $19.00 as of December 31, 2022. The year-to-date change was due to an increase in stockholders’ equity primarily related to current period net income of $6.9 million and a $2.1 million positive adjustment due to the Company’s January 1, 2023 adoption of CECL, partially offset by current period dividends paid to stockholders of $2.6 million. Management Commentary President and CEO John H. Montgomery stated, “Our second quarter results demonstrated the durability of both our franchise and the community bank model in general. While macro dislocations seen in the banking industry during the first quarter have abated, we continue to face headwinds resulting from a rising interest rate environment. First and foremost, we are focused on ensuring the bank maintains adequate liquidity and a strong capital position. In doing so, we are able to navigate challenging economic times from a position of strength which also allows us to maintain relationships with trusted customers and develop new ones, as evidenced by our continued loan growth during the quarter. The markets we serve in southwestern Pennsylvania, eastern Ohio and northern West Virginia have remained resilient despite continued interest rate increases by the Federal Reserve. In recent years, our markets have exhibited more stability than others in key areas such as real estate values and employment, allowing Community Bank to experience less volatility.” Mr. Montgomery continued, “We have noted for several quarters that our funding costs have been rising, with net interest margin decreasing from first quarter levels while improving compared with the second quarter last year. As we highlighted last quarter, our deposit base is well-diversified, with a significant majority insured or collateralized. Within our deposit base, the most significant change during the second quarter was a shift to interest-bearing from noninterest-bearing deposits as our customers responded to the overall increase in market interest rates. The other half of our NIM calculation is our interest income, which has been supported by the repricing of variable rate loans and the addition of new, higher priced loans via the continued growth of our loan book during the second quarter, with C&I loans having been the biggest contributor, followed by commercial real estate loans. Moving forward, our NIM will also benefit as we reposition our loan book by reducing transactional indirect auto loans with higher yielding C&I and CRE loans ” Mr. Montgomery concluded, “As I noted previously, our team here at Community Bank is focused on maintaining solid capital and liquidity positions. Success on those fronts provides a range of positive outcomes for our business that ultimately lead to long-term value creation which benefits all our constituents - shareholders, employees, customers, and our communities at large. While the near-term economic picture remains somewhat muddled, we are also committed to making proper investments in our franchise to position the bank for long-term growth. During the second quarter we added revenue producing members to our team while also continuing to make targeted technology investments necessary for our competitive positioning. We also declared and paid a $0.25 cash dividend during the quarter while allowing our previous share repurchase program to expire. I am proud of our entire team for all their hard work and look forward to our continued success.” Dividend Information The Company’s Board of Directors declared a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about August 31, 2023, to stockholders of record as of the close of business on August 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. The Company purchased a total of 74,656 shares of the Company’s common stock at an average price of $22.38 per share prior to the program expiration on May 1, 2023. 2023 Second Quarter Financial Review Net Interest and Dividend Income Net interest and dividend income increased $1.0 million, or 9.4%, to $11.1 million for the three months ended June 30, 2023 compared to $10.2 million for the three months ended June 30, 2022. Net interest margin (GAAP) increased to 3.29% for the three months ended June 30, 2023 compared to 3.12% for the three months ended June 30, 2022. Fully tax equivalent (FTE) net interest margin (Non-GAAP) increased 17 bps to 3.30% for the three months ended June 30, 2023 compared to 3.13% for the three months ended June 30, 2022. Interest and dividend income increased $4.2 million, or 38.7%, to $15.2 million for the three months ended June 30, 2023 compared to $11.0 million for the three months ended June 30, 2022. Interest income on loans increased $3.7 million, or 37.9%, to $13.4 million for the three months ended June 30, 2023 compared to $9.7 million for the three months ended June 30, 2022. The average balance of loans increased $71.5 million to $1.08 billion from $1.01 billion, generating $724,000 of additional interest income on loans. The average yield increased 112 bps to 5.00% compared to 3.88% causing a $3.0 million increase in interest income on loans. Interest income on interest-earning deposits at other banks increased $599,000, to $721,000 for the three months ended June 30, 2023 compared to $122,000 for the three months ended June 30, 2022 as the average yield increased 443 bps, partially offset by a $1.9 million decrease in average balances. The increase in the average yield was the result of the Federal Reserve Board’s interest rate increases. Interest expense increased $3.3 million, or 413.6%, to $4.1 million for the three months ended June 30, 2023 compared to $795,000 for the three months ended June 30, 2022. Interest expense on deposits increased $3.2 million, or 536.1%, to $3.8 million for the three months ended June 30, 2023 compared to $604,000 for the three months ended June 30, 2022. Rising market interest rates led to the repricing of interest-bearing demand and money market deposits and a shift in deposits from non interest-bearing to interest-bearing demand and time deposits and resulted in a 137 bps, or 466.9%, increase in the average cost of interest-bearing deposits compared to the three months ended June 30, 2022. This accounted for a $3.2 million increase in interest expense. Additionally, interest-bearing deposit balances increased $104.5 million, or 12.7%, to $930.1 million as of June 30, 2023 compared to $825.6 million as of June 30, 2022, accounting for a $70,000 increase in interest expense. Provision for Credit Losses Effective January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The provision for credit losses recorded for the three months ended June 30, 2023 was $432,000 and was required primarily due to loan growth coupled with a modeled slowdown in loan prepayment speeds. This compared to $3.8 million in provision for credit losses recorded for the three months ended June 30, 2022, primarily due to the charge-off of a $2.7 million commercial and industrial loan to a borrower that ceased operations. Noninterest income Noninterest income increased $164,000, or 7.8%, to $2.3 million for the three months ended June 30, 2023, compared to $2.1 million for the three months ended June 30, 2022. This increase was primarily related to a $142,000 increase in commercial and personal insurance commissions and a decrease in net losses on securities of $99,000. Noninterest Expense Noninterest expense increased $1.1 million, or 13.0%, to $9.5 million for the three months ended June 30, 2023 compared to $8.4 million for the three months ended June 30, 2022. Salaries and benefits increased $692,000, or 15.2%, to $5.2 million primarily due to merit increases, revenue producing staff additions and associated $160,000 of recruiting costs, and $96,000 of severance costs related to the discontinuation of indirect automobile lending. Data processing expense increased $272,000, or 61.0%, to $718,000, due to increased ongoing costs related to the fourth quarter 2022 core conversion and equipment expense increased $101,000 or 55.5%, to $283,000, due to costs associated with the implementation of new interactive teller machines. Statement of Financial Condition Review Assets Total assets increased $23.8 million, or 1.7%, to $1.43 billion at June 30, 2023, compared to $1.41 billion at December 31, 2022. Cash and due from banks decreased $25.6 million, or 24.7%, to $78.1 million at June 30, 2023, compared to $103.7 million at December 31, 2022, due to significant loan growth. Securities decreased $8.6 million, or 4.5%, to $181.4 million at June 30, 2023, compared to $190.1 million at December 31, 2022. The securities balance was primarily impacted by $8.1 million of repayments on mortgage-backed and collateralized mortgage obligation securities and a $332,000 decrease in the market value in the equity securities portfolio, which is primarily comprised of bank stocks. Loans and Credit Quality Total loans increased $51.3 million, or 4.9%, to $1.10 billion at June 30, 2023 compared to $1.05 billion at December 31, 2022. Loan growth was driven by increases in commercial and industrial loans, commercial real estate loans and residential mortgage loans of $32.2 million, $21.8 million, and $7.8 million, respectively, partially offset by a decrease in consumer loans of $12.1 million. The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to rising market interest rates. Further decreases in this portfolio is expected as the Bank discontinued this product offering at June 30, 2023 to allocate resources and focus production efforts on more profitable commercial products. The allowance for credit losses (ACL) was $10.7 million at June 30, 2023 and $12.8 million at December 31, 2022. As a result, the ACL to total loans was 0.97% at June 30, 2023 compared to 1.22% at December 31, 2022. The change in the ACL was primarily due to the Company's aforementioned adoption of CECL. At adoption, the Company decreased its ACL by $3.4 million. Contributing to the change in ACL was a prior year charge-off of $2.7 million and qualitative factors that significantly impacted the incurred loss model driven by historical activity compared to the adopted CECL methodology that is centered around current expected credit loss (CECL) activity using a forecast approach. Net charge-offs for the three months ended June 30, 2023 were $96,000, or 0.04% of average loans on an annualized basis. Net charge-offs for the three months ended June 30, 2022 were $2.5 million, or 1.01% of average loans on an annualized basis primarily due to the aforementioned $2.7 million charge-off of a commercial and industrial loan. Net recoveries for the six months ended June 30, 2023 were $660,000 primarily due to recoveries totaling $750,000 related to the prior year charged-off loan. Net charge-offs for the six months ended June 30, 2022 were $2.5 million. Nonperforming loans, which includes nonaccrual loans and accruing loans past due 90 days or more, were $4.1 million at June 30, 2023 compared to $5.8 million at December 31, 2022. The decrease of $1.7 million was due to ten loans totaling $1.7 million being moved from nonaccrual to accrual status during the current period. Current nonperforming loans to total loans ratio was 0.37% compared to 0.55% at December 31, 2022. Other Intangible assets decreased $891,000, or 25.6%, to $2.6 million at June 30, 2023 compared to $3.5 million at December 31, 2022 due to amortization expense recognized during the period. Accrued interest and other assets increased $5.6 million, or 26.8%, to $26.7 million at June 30, 2023, compared to $21.1 million at December 31, 2022 due to the sale of a $2.0 million syndicated loan which was sold but not yet settled at the end of the period, and increases in accounts receivable for EU, income taxes receivable and BOLI death benefit claims receivable $853,000, $761,000 and $664,000. Total liabilities increased $17.4 million, or 1.3%, to $1.32 billion at June 30, 2023 compared to $1.30 billion at December 31, 2022. Deposits Total deposits decreased $5.2 million to $1.26 billion as of June 30, 2023 compared to $1.27 billion at December 31, 2022. Interest-bearing demand deposits increased $62.8 million and time deposits increased $60.4 million, while non interest-bearing demand deposits decreased $74.3 million, money market deposits decreased $23.3 million and savings deposits decreased $30.8 million. The increase in interest-bearing demand deposits is primarily the result of higher interest rates attracting more customers and additional deposits from existing customers while higher time deposits resulted from the offering of a higher-rate certificate of deposit product. FDIC insured deposits totaled approximately 61.1% of total deposits while an additional 16.5% of deposits were collateralized with investment securities. Borrowed Funds Long-term borrowings increased $20.0 million, or 136.6%, to $34.7 million at June 30, 2023, compared to $14.6 million at December 31, 2022. During the second quarter, the Bank entered into $20.0 million of FHLB advances for a term of 24 months at 4.92%, the proceeds of which were utilized to match fund originations within the Bank’s commercial and industrial loan portfolio. Short-term borrowings decreased $8.1 million, or 100.0%, as there were no short-term borrowings at June 30, 2023, compared to $8.1 million at December 31, 2022. At December 31, 2022, short-term borrowings were comprised entirely of securities sold under agreements to repurchase. These accounts were transitioned into other deposit products and account for a portion of the interest-bearing demand deposit increase. Accrued Interest Payable and Other Liabilities Accrued interest payable and other liabilities increased $10.6 million, or 139.8%, to $18.2 million at June 30, 2023, compared to $7.6 million at December 31, 2022 primarily due to the purchase of $8.9 million of syndicated loans which were unfunded at the end of the period. Stockholders’ Equity Stockholders’ equity increased $6.4 million, or 5.8%, to $116.6 million at June 30, 2023, compared to $110.2 million at December 31, 2022. Key factors positively impacting stockholders’ equity included $6.9 million of net income for the current period and a $2.1 million positive adjustment, net of tax, due to the Company’s January 1, 2023 adoption of CECL as described above. These factors were partially offset by the payment of $2.6 million in dividends since December 31, 2022 and activity under share repurchase programs. On April 21, 2022, a $10.0 million repurchase program was authorized, with the Company repurchasing 74,656 shares at an average price of $22.38 per share since the inception of the plan. In total, the Company repurchased $274,000 of common stock since December 31, 2022. The plan expired on May 1, 2023. Book value per share Book value per common share was $22.81 at June 30, 2023 compared to $21.60 at December 31, 2022, an increase of $1.21. Tangible book value per common share (Non-GAAP) was $20.39 at June 30, 2023, compared to $19.00 at December 31, 2022, an increase of $1.39. 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, 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 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Assets Cash and Due From Banks $ 78,093 $ 103,545 $ 103,700 $ 122,801 $ 81,121 Securities 181,427 189,025 190,058 193,846 213,505 Loans Real Estate: Residential 338,493 332,840 330,725 328,248 325,138 Commercial 458,614 452,770 436,805 432,516 426,105 Construction 44,523 39,522 44,923 49,502 41,277 Commercial and Industrial: Commercial and Industrial 102,232 79,436 69,918 61,428 62,054 PPP 34 65 126 768 3,853 Consumer 134,788 146,081 146,927 150,615 148,921 Other 22,470 21,151 20,449 19,865 20,621 Total Loans 1,101,154 1,071,865 1,049,873 1,042,942 1,027,969 Allowance for Credit Losses (10,666 ) (10,270 ) (12,819 ) (12,854 ) (12,833 ) Loans, Net 1,090,488 1,061,595 1,037,054 1,030,088 1,015,136 Premises and Equipment, Net 18,582 17,732 17,844 18,064 18,196 Bank-Owned Life Insurance 25,082 24,943 25,893 25,750 25,610 Goodwill 9,732 9,732 9,732 9,732 9,732 Intangible Assets, Net 2,622 3,068 3,513 3,959 4,404 Accrued Interest Receivable and Other Assets 26,707 21,068 21,144 21,680 18,757 Total Assets $ 1,432,733 $ 1,430,708 $ 1,408,938 $ 1,425,920 $ 1,386,461 Liabilities Deposits Noninterest-Bearing Demand Accounts $ 316,098 $ 350,911 $ 390,405 $ 407,107 $ 389,127 Interest-Bearing Demand Accounts 374,654 359,051 311,825 298,755 265,347 Money Market Accounts 185,814 206,174 209,125 198,715 185,308 Savings Accounts 217,267 234,935 248,022 250,378 250,226 Time Deposits 169,482 130,449 109,126 120,879 125,182 Total Deposits 1,263,315 1,281,520 1,268,503 1,275,834 1,215,190 Short-Term Borrowings — 121 8,060 18,108 32,178 Other Borrowings 34,658 14,648 14,638 17,627 17,618 Accrued Interest Payable and Other Liabilities 18,171 17,224 7,582 7,645 7,703 Total Liabilities 1,316,144 1,313,513 1,298,783 1,319,214 1,272,689 Stockholders’ Equity 116,589 117,195 110,155 106,706 113,772 Total Liabilities and Stockholders’ Equity $ 1,432,733 $ 1,430,708 $ 1,408,938 $ 1,425,920 $ 1,386,461 (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended Six Months Ended Selected Operating Data 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 Interest and Dividend Income: Loans, Including Fees $ 13,426 $ 12,371 $ 11,835 $ 10,815 $ 9,733 $ 25,797 $ 19,284 Securities: Taxable 950 964 974 985 988 1,914 1,893 Tax-Exempt 42 41 40 49 57 83 123 Dividends 25 24 28 21 20 49 42 Other Interest and Dividend Income 760 844 978 417 160 1,605 232 Total Interest and Dividend Income 15,203 14,244 13,855 12,287 10,958 29,448 21,574 Interest Expense: Deposits 3,842 2,504 1,811 1,079 604 6,346 1,134 Short-Term Borrowings 3 2 7 19 18 5 37 Other Borrowings 238 155 171 174 173 393 347 Total Interest Expense 4,083 2,661 1,989 1,272 795 6,744 1,518 Net Interest and Dividend Income 11,120 11,583 11,866 11,015 10,163 22,704 20,056 Provision for Credit Losses - Loans 492 80 — — 3,784 572 3,784 Recovery for Credit Losses - Unfunded Commitments (60 ) — — — — (60 ) — Net Interest and Dividend Income After Provision for Credit Losses 10,688 11,503 11,866 11,015 6,379 22,192 16,272 Noninterest Income: Service Fees 448 445 530 544 559 892 1,085 Insurance Commissions 1,511 1,922 1,399 1,368 1,369 3,434 3,167 Other Commissions 224 144 157 244 179 368 268 Net (Loss) Gain on Sales of Loans (5 ) 2 — — — (3 ) — Net (Loss) Gain on Securities (100 ) (232 ) 83 (46 ) (199 ) (332 ) (206 ) Net Gain on Purchased Tax Credits 7 7 14 14 14 14 28 Net Gain (Loss) on Disposal of Fixed Assets — 11 — 439 — 11 (8 ) Income from Bank-Owned Life Insurance 139 140 143 140 142 280 278 Net Gain on Bank-Owned Life Insurance Claims 1 302 — — — 303 — Other Income 44 69 34 36 41 113 106 Total Noninterest Income 2,269 2,810 2,360 2,739 2,105 5,080 4,718 Noninterest Expense: Salaries and Employee Benefits 5,231 5,079 4,625 4,739 4,539 10,310 9,104 Occupancy 789 701 817 768 776 1,490 1,462 Equipment 283 218 178 170 182 501 392 Data Processing 718 857 681 540 446 1,575 931 FDIC Assessment 224 152 154 147 128 376 337 PA Shares Tax 195 260 258 240 240 455 480 Contracted Services 434 147 405 288 348 581 935 Legal and Professional Fees 246 182 362 334 389 428 541 Advertising 75 79 165 131 115 154 231 Other Real Estate Owned (Income) (35 ) (37 ) (38 ) (38 ) (37 ) (72 ) (75 ) Amortization of Intangible Assets 446 445 446 445 446 891 891 Other 895 945 945 1,063 838 1,841 1,837 Total Noninterest Expense 9,501 9,028 8,998 8,827 8,410 18,530 17,066 Income Before Income Tax Expense (Benefit) 3,456 5,285 5,228 4,927 74 8,742 3,924 Income Tax Expense (Benefit) 699 1,129 1,076 998 (44 ) 1,827 759 Net Income $ 2,757 $ 4,156 $ 4,152 $ 3,929 $ 118 $ 6,915 $ 3,165 Three Months Ended Six Months Ended Per Common Share Data 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 Dividends Per Common Share $ 0.25 $ 0.25 $ 0.24 $ 0.24 $ 0.24 $ 0.50 $ 0.48 Earnings Per Common Share - Basic 0.54 0.81 0.81 0.77 0.02 1.35 0.61 Earnings Per Common Share - Diluted 0.54 0.81 0.81 0.77 0.02 1.35 0.61 Weighted Average Common Shares Outstanding - Basic 5,111,987 5,109,597 5,095,237 5,106,861 5,147,846 5,110,799 5,172,881 Weighted Average Common Shares Outstanding - Diluted 5,116,134 5,115,705 5,104,254 5,118,627 5,156,975 5,118,396 5,189,144 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Common Shares Outstanding 5,111,678 5,116,830 5,100,189 5,096,672 5,128,333 Book Value Per Common Share $ 22.81 $ 22.90 $ 21.60 $ 20.94 $ 22.18 Tangible Book Value per Common Share (1) 20.39 20.40 19.00 18.25 19.43 Stockholders’ Equity to Assets 8.1 % 8.2 % 7.8 % 7.5 % 8.2 % Tangible Common Equity to Tangible Assets (1) 7.3 7.4 6.9 6.6 7.3 Three Months Ended Six Months Ended Selected Financial Ratios (2) 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 Return on Average Assets 0.79 % 1.21 % 1.16 % 1.12 % 0.03 % 1.00 % 0.45 % Return on Average Equity 9.38 14.69 15.26 13.60 0.40 11.98 5.15 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 142.37 147.53 149.04 149.41 149.03 144.88 146.74 Average Equity to Average Assets 8.38 8.27 7.63 8.20 8.49 8.33 8.81 Net Interest Rate Spread 2.78 3.12 3.17 3.10 3.00 2.95 3.00 Net Interest Rate Spread (FTE) (1) 2.79 3.13 3.18 3.11 3.01 2.96 3.01 Net Interest Margin 3.29 3.51 3.45 3.29 3.12 3.40 3.10 Net Interest Margin (FTE) (1) 3.30 3.52 3.46 3.30 3.13 3.41 3.11 Net Charge-Offs (Recoveries) to Average Loans 0.04 (0.29 ) 0.01 (0.01 ) 1.01 (0.12 ) 0.50 Efficiency Ratio 70.96 62.72 63.25 64.18 68.55 66.69 68.89 Asset Quality Ratios 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Allowance for Credit Losses to Total Loans 0.97 % 0.96 % 1.22 % 1.23 % 1.25 % Allowance for Credit Losses to Nonperforming Loans (3) 260.46 189.73 221.06 218.61 219.89 Allowance for Credit Losses to Noncurrent Loans (4) 260.46 189.73 320.64 318.96 329.47 Delinquent and Nonaccrual Loans to Total Loans (4) (5) 0.68 1.02 0.81 0.46 0.45 Nonperforming Loans to Total Loans (3) 0.37 0.51 0.55 0.56 0.57 Noncurrent Loans to Total Loans (4) 0.37 0.51 0.38 0.39 0.38 Nonperforming Assets to Total Assets (6) 0.30 0.40 0.41 0.41 0.42 Capital Ratios (7) 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Common Equity Tier 1 Capital (to Risk Weighted Assets) 12.54 % 12.60 % 12.33 % 12.02 % 11.83 % Tier 1 Capital (to Risk Weighted Assets) 12.54 12.60 12.33 12.02 11.83 Total Capital (to Risk Weighted Assets) 13.64 13.69 13.58 13.27 13.08 Tier 1 Leverage (to Adjusted Total Assets) 9.26 9.24 8.66 8.51 8.33 (1) Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (2) Interim period ratios are calculated on an annualized basis. (3) Nonperforming loans consist of all nonaccrual loans and accruing loans that are 90 days or more past due. (4) 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 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 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) $ 1,079,399 $ 13,450 5.00 % $ 1,040,570 $ 12,391 4.83 % $ 1,034,714 $ 11,853 4.54 % $ 1,024,363 $ 10,833 4.20 % $ 1,007,874 $ 9,751 3.88 % Debt Securities Taxable 209,292 950 1.82 213,158 964 1.81 216,915 974 1.80 222,110 985 1.77 228,315 988 1.73 Exempt From Federal Tax 6,180 53 3.43 6,270 52 3.32 6,277 51 3.25 7,998 62 3.10 9,109 73 3.21 Equity Securities 2,693 25 3.71 2,693 24 3.56 2,693 28 4.16 2,693 21 3.12 2,693 20 2.97 Interest-Earning Deposits at Banks 54,466 721 5.30 74,555 805 4.32 99,108 939 3.79 67,870 378 2.23 56,379 122 0.87 Other Interest-Earning Assets 2,783 39 5.62 2,633 39 6.01 2,875 39 5.38 2,784 39 5.56 3,235 38 4.71 Total Interest-Earning Assets 1,354,813 15,238 4.51 1,339,879 14,275 4.32 1,362,582 13,884 4.04 1,327,818 12,318 3.68 1,307,605 10,992 3.37 Noninterest-Earning Assets 51,928 48,369 51,718 68,796 84,323 Total Assets $ 1,406,741 $ 1,388,248 $ 1,414,300 $ 1,396,614 $ 1,391,928 Liabilities and Stockholders' Equity: Interest-Bearing Liabilities: Interest-Bearing Demand Accounts $ 354,497 $ 1,582 1.79 % $ 335,327 $ 1,191 1.44 % $ 315,352 $ 810 1.02 % $ 278,412 $ 393 0.56 % $ 260,655 $ 111 0.17 % Savings Accounts 225,175 53 0.09 242,298 37 0.06 249,948 29 0.05 251,148 20 0.03 248,356 20 0.03 Money Market Accounts 194,565 1,033 2.13 213,443 939 1.78 206,192 604 1.16 189,371 269 0.56 188,804 61 0.13 Time Deposits 155,867 1,174 3.02 101,147 337 1.35 116,172 368 1.26 123,438 397 1.28 127,832 412 1.29 Total Interest-Bearing Deposits 930,104 3,842 1.66 892,215 2,504 1.14 887,664 1,811 0.81 842,369 1,079 0.51 825,647 604 0.29 Short-Term Borrowings 480 3 2.51 1,344 2 0.60 8,985 7 0.31 28,738 19 0.26 34,135 18 0.21 Other Borrowings 21,026 238 4.54 14,641 155 4.29 17,598 171 3.86 17,621 174 3.92 17,611 173 3.94 Total Interest-Bearing Liabilities 951,610 4,083 1.72 908,200 2,661 1.19 914,247 1,989 0.86 888,728 1,272 0.57 877,393 795 0.36 Noninterest-Bearing Demand Deposits 326,262 362,343 391,300 390,658 391,975 Other Liabilities 10,920 2,953 788 2,636 4,415 Total Liabilities 1,288,792 1,273,496 1,306,335 1,282,022 1,273,783 Stockholders' Equity 117,949 114,752 107,965 114,592 118,145 Total Liabilities and Stockholders' Equity $ 1,406,741 $ 1,388,248 $ 1,414,300 $ 1,396,614 $ 1,391,928 Net Interest Income (FTE) (Non-GAAP) (3) $ 11,155 $ 11,614 $ 11,895 $ 11,046 $ 10,197 Net Interest-Earning Assets (4) 403,203 431,679 448,335 439,090 430,212 Net Interest Rate Spread (FTE) (Non-GAAP) (3) (5) 2.79 % 3.13 % 3.18 % 3.11 % 3.01 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.30 3.52 3.46 3.30 3.13 PPP Loans 38 1 10.56 100 3 12.17 216 22 40.41 2,424 123 20.13 5,546 144 10.41 (1) Annualized based on three months ended results. (2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. AVERAGE BALANCES AND YIELDS Six Months Ended June 30, 2023 June 30, 2022 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) $ 1,060,092 $ 25,840 4.92 % $ 1,008,539 $ 19,322 3.86 % Debt Securities Taxable 211,213 1,914 1.81 222,144 1,893 1.70 Exempt From Federal Tax 6,225 105 3.37 9,649 156 3.23 Marketable Equity Securities 2,693 49 3.64 2,693 42 3.12 Interest-Earning Deposits at Banks 64,455 1,526 4.74 57,829 156 0.54 Other Interest-Earning Assets 2,709 79 5.88 3,358 76 4.56 Total Interest-Earning Assets 1,347,387 29,513 4.42 1,304,212 21,645 3.35 Noninterest-Earning Assets 50,159 103,201 Total Assets $ 1,397,546 $ 1,407,413 Liabilities and Stockholders' Equity: Interest-Bearing Liabilities: Interest-Bearing Demand Accounts $ 344,965 $ 2,773 1.62 % $ 268,585 $ 160 0.12 % Savings Accounts 233,689 90 0.08 246,084 38 0.03 Money Market Accounts 203,952 1,972 1.95 190,605 102 0.11 Time Deposits 128,659 1,511 2.37 129,914 834 1.29 Total Interest-Bearing Deposits 911,265 6,346 1.40 835,188 1,134 0.27 Short-Term Borrowings 910 5 1.11 36,000 37 0.21 Other Borrowings 17,850 393 4.44 17,608 347 3.97 Total Interest-Bearing Liabilities 930,025 6,744 1.46 888,796 1,518 0.34 Noninterest-Bearing Demand Deposits 344,203 388,103 Other Liabilities 6,959 6,468 Total Liabilities 1,281,187 1,283,367 Stockholders' Equity 116,359 124,046 Total Liabilities and Stockholders' Equity $ 1,397,546 $ 1,407,413 Net Interest Income (FTE) (Non-GAAP) (3) 22,769 20,127 Net Interest-Earning Assets (4) 417,362 415,416 Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5) 2.96 % 3.01 % Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.41 3.11 PPP Loans 69 4 11.69 10,085 589 11.78 (1) Annualized based on six months ended results (2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. Explanation of Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Press Release contains or references, certain Non-GAAP financial measures. We believe these Non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these Non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar Non-GAAP measures which may be presented by other companies. Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 (Dollars in thousands, except share and per share data) (Unaudited) Assets (GAAP) $ 1,432,733 $ 1,430,708 $ 1,408,938 $ 1,425,920 $ 1,386,461 Goodwill and Intangible Assets, Net (12,354 ) (12,800 ) (13,245 ) (13,691 ) (14,136 ) Tangible Assets (Non-GAAP) (Numerator) $ 1,420,379 $ 1,417,908 $ 1,395,693 $ 1,412,229 $ 1,372,325 Stockholders' Equity (GAAP) $ 116,589 $ 117,195 $ 110,155 $ 106,706 $ 113,772 Goodwill and Intangible Assets, Net (12,354 ) (12,800 ) (13,245 ) (13,691 ) (14,136 ) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator) $ 104,235 $ 104,395 $ 96,910 $ 93,015 $ 99,636 Stockholders’ Equity to Assets (GAAP) 8.1 % 8.2 % 7.8 % 7.5 % 8.2 % Tangible Common Equity to Tangible Assets (Non-GAAP) 7.3 % 7.4 % 6.9 % 6.6 % 7.3 % Common Shares Outstanding (Denominator) 5,111,678 5,116,830 5,100,189 5,096,672 5,128,333 Book Value per Common Share (GAAP) $ 22.81 $ 22.90 $ 21.60 $ 20.94 $ 22.18 Tangible Book Value per Common Share (Non-GAAP) $ 20.39 $ 20.40 $ 19.00 $ 18.25 $ 19.43 Three Months Ended Six Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 (Dollars in thousands) (Unaudited) Net Income (GAAP) $ 2,757 $ 4,156 $ 4,152 $ 3,929 $ 118 $ 6,915 $ 3,165 Amortization of Intangible Assets, Net 446 445 446 445 446 891 891 Adjusted Net Income (Non-GAAP) (Numerator) $ 3,203 $ 4,601 $ 4,598 $ 4,374 $ 564 $ 7,806 $ 4,056 Annualization Factor 4.01 4.06 3.97 3.97 4.01 2.02 2.02 Average Stockholders' Equity (GAAP) $ 117,949 $ 114,752 $ 107,965 $ 114,592 $ 118,145 $ 116,359 $ 124,046 Average Goodwill and Intangible Assets, Net (12,626 ) (13,080 ) (13,534 ) (13,968 ) (14,414 ) (12,852 ) (14,641 ) Average Tangible Common Equity (Non-GAAP) (Denominator) $ 105,323 $ 101,672 $ 94,431 $ 100,624 $ 103,731 $ 103,507 $ 109,405 Return on Average Equity (GAAP) 9.38 % 14.69 % 15.26 % 13.60 % 0.40 % 11.98 % 5.15 % Return on Average Tangible Common Equity (Non-GAAP) 12.20 % 18.35 % 19.32 % 17.25 % 2.18 % 15.21 % 7.48 % Three Months Ended Six Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 (Dollars in thousands) (Unaudited) Interest Income (GAAP) $ 15,203 $ 14,244 $ 13,855 $ 12,287 $ 10,958 $ 29,448 $ 21,574 Adjustment to FTE Basis 35 31 29 31 34 65 71 Interest Income (FTE) (Non-GAAP) 15,238 14,275 13,884 12,318 10,992 29,513 21,645 Interest Expense (GAAP) 4,083 2,661 1,989 1,272 795 6,744 1,518 Net Interest Income (FTE) (Non-GAAP) $ 11,155 $ 11,614 $ 11,895 $ 11,046 $ 10,197 $ 22,769 $ 20,127 Net Interest Rate Spread (GAAP) 2.78 % 3.12 % 3.17 % 3.10 % 3.00 % 2.95 % 3.00 % 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) 2.79 3.13 3.18 3.11 3.01 2.96 3.01 Net Interest Margin (GAAP) 3.29 % 3.51 % 3.45 % 3.29 % 3.12 % 3.40 % 3.10 % Adjustment to FTE Basis 0.01 0.01 0.01 0.01 0.01 0.01 0.01 Net Interest Margin (FTE) (Non-GAAP) 3.30 3.52 3.46 3.30 3.13 3.41 3.11 Three Months Ended Six Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 6/30/23 6/30/22 (Dollars in thousands) (Unaudited) Net Income Before Income Tax Expense (Benefit) (GAAP) $ 3,456 $ 5,285 $ 5,228 $ 4,927 $ 74 $ 8,742 $ 3,924 Provision for Credit Losses 492 80 — — 3,784 572 3,784 PPNR (Non-GAAP) (Numerator) $ 3,948 $ 5,365 $ 5,228 $ 4,927 $ 3,858 $ 9,314 $ 7,708 Annualization Factor 4.01 4.06 3.97 3.97 4.01 2.02 2.02 Average Assets (Denominator) $ 1,406,741 $ 1,388,248 $ 1,414,300 $ 1,396,614 $ 1,391,928 $ 1,397,546 $ 1,407,413 PPNR Return on Average Assets (Non-GAAP) 1.13 % 1.57 % 1.47 % 1.40 % 1.11 % 1.34 % 1.10 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230728598887/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