CB Financial Services, Inc. Announces Second Quarter and Year-to-Date 2024 Financial Results and Declares Quarterly Cash Dividend

CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”), today announced its second quarter and year-to-date 2024 financial results.

 

Three Months Ended

 

Six Months Ended

 

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

 

6/30/24

6/30/23

(Dollars in thousands, except per share data) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (GAAP)

$

2,650

$

4,196

 

$

12,966

 

$

2,672

$

2,757

 

$

6,847

 

$

6,915

 

Net Income Adjustments

 

24

 

(1,000

)

 

(9,905

)

 

29

 

78

 

 

(976

)

 

(49

)

Adjusted Net Income (Non-GAAP) (1)

$

2,674

$

3,196

 

$

3,061

 

$

2,701

$

2,835

 

$

5,871

 

$

6,866

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share - Diluted (GAAP)

$

0.51

$

0.82

 

$

2.52

 

$

0.52

$

0.54

 

$

1.33

 

$

1.35

 

Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1)

$

0.52

$

0.62

 

$

0.60

 

$

0.53

$

0.55

 

$

1.14

 

$

1.34

 

(1)

Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted as presented later in this Press Release.

2024 Second Quarter Financial Highlights

(Comparisons to three months ended June 30, 2023 unless otherwise noted)

  • Net income was $2.7 million, compared to $2.8 million. Results were impacted by the December 2023 sale of the Bank’s subsidiary insurance agency, Exchange Underwriters (“EU”), which drove decreases in noninterest income and noninterest expense.
    • Adjusted net income (Non-GAAP) was $2.7 million compared to $2.8 million.
    • Income before income tax expense was $3.2 million compared to $3.5 million.
    • Adjusted pre-provision net revenue (PPNR) (Non-GAAP) was $3.2 million compared to $4.0 million.
  • Earnings per diluted common share (EPS) decreased to $0.51 from $0.54.
    • Adjusted earning per common share - diluted (Non-GAAP) was $0.52, compared to $0.55.
  • Return on average assets (annualized) was 0.71%, compared to 0.79%.
    • Adjusted return on average assets (annualized) (Non-GAAP) was 0.72%, compared to 0.81%.
  • Return on average equity (annualized) was 7.58%, compared to 9.38%.
    • Adjusted return on average equity (annualized) (Non-GAAP) was 7.65%, compared to 9.64%.
  • Net interest margin (“NIM”) declined to 3.18% from 3.29%.
  • Net interest and dividend income was $11.5 million, compared to $11.1 million.
  • Noninterest income decreased to $688,000, compared to $2.3 million. The significant change in noninterest income was driven by a $1.5 million decrease in insurance commissions due to the sale of EU.
  • Noninterest expense decreased to $9.0 million, compared to $9.5 million, due to decreases in compensation and benefits, intangible amortization and FDIC assessment expenses, partially offset by increases in data processing, occupancy and Pennsylvania shares tax expenses.

(Amounts at June 30, 2024; comparisons to December 31, 2023, unless otherwise noted)

  • Total assets increased $103.8 million, or 7.1%, to $1.6 billion from $1.5 billion.
  • Total loans decreased $31.7 million, or 2.9%, to $1.08 billion compared to $1.11 billion, and included decreases in consumer, commercial real estate and residential real estate loans of $21.3 million, $8.4 million and $5.1 million, respectively, partially offset by increases in commercial and industrial loans, other loans and construction loans of $1.1 million, $1.1 million and $922,000, respectively. The consumer loan portfolio is primarily comprised of indirect automobile loans and decreased as a result of the discontinuation of that product as of June 30, 2023. Excluding the $21.6 million decrease in indirect automobile loans, total loans decreased $10.1 million, or 0.9%. In total, $62.3 million of loans have paid off since December 31, 2023.
  • Nonperforming loans to total loans was 0.17% at June 30, 2024, compared to 0.20% at December 31, 2023.
  • Total deposits were $1.35 billion, an increase of $82.6 million, compared to $1.27 billion.
  • Book value per share was $27.79, compared to $27.53 as of March 31, 2024 and $27.32 as of December 31, 2023.
  • Tangible book value per share (Non-GAAP) was $25.83, compared to $25.52 as of March 31, 2024 and $25.23 as of December 31, 2023. The year-to-date change was due to an increase in stockholders’ equity primarily related to current period net income of $6.8 million, partially offset by a $1.6 million increase in accumulated other comprehensive loss and the payment of $2.6 million in dividends since December 31, 2023.

Management Commentary

President and CEO John H. Montgomery commented, “The first half of the year has reflected ongoing trends of net interest margin pressure due to heightened funding costs that have been driven by prevailing market rates, however, our previously announced balance sheet strategies and continued commercial loan production are contributing to stabilization and improvement in this area.

While the yield on our loan portfolio continues to improve, total loans decreased $17.6 million, or 1.6%, from March 31, 2024. Runoff in the formerly exited indirect lending portfolio of $10.2 million was partially offset by a $9.1 million increase in more profitable commercial and industrial loans. Commercial and residential real estate loans declined $11.7 million and $4.2 million, respectively, with the former largely related to the Bank’s decision to exit certain relationships along with expected asset sales and the later related to our repositioning of our residential mortgage program. Notably, asset quality remains robust, with nonperforming loans declining to $1.9 million (0.17% of total loans) from $2.2 million (0.20% of total loans) in the prior quarter.

Overall, deposit movements continued during the quarter, shifting from non-interest and lower-cost interest-bearing accounts to higher-cost time deposits. Total deposits remained relatively stable, with a slight increase, largely due to growth in our interest-bearing demand deposits and time deposits.

During the quarter, we continued progress on our strategic initiatives by implementing a new enterprise-wide loan origination system and a redesigned residential mortgage program. The loan origination system utilizes market leading technology which was carefully customized and enhanced to streamline and optimize our credit delivery process, increase transparency and communication with our clients - ensuring that we provide a best-in-class credit delivery process. Our residential mortgage program redesign was developed to provide expanded product offerings to our market, mitigate risk and generate additional sources of non-interest income through scalability.

Additionally, we completed the construction and celebrated the opening of a state-of-the-art branch office serving as a regional service center in Rostraver, PA and added a news section to our upgraded website, www.cb.bank, to provide more timely communications to our market.

Last, in our continual focus on the client experience, we created a new retail support team staffed with experienced personnel to assist our bankers as they provide a higher level of personalized service to our clients.

We firmly believe that all stakeholders benefit from the continued investment in our franchise, our commitment to our long-term plan and our focus on delivering an exceptional client experience.”

Dividend Declaration

The Company’s Board of Directors declared a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about August 30, 2024, to stockholders of record as of the close of business on August 15, 2024.

2024 Second Quarter Financial Review

Net Interest and Dividend Income

Net interest and dividend income increased $350,000, or 3.1%, to $11.5 million for the three months ended June 30, 2024 compared to $11.1 million for the three months ended June 30, 2023.

  • NIM (GAAP) decreased to 3.18% for the three months ended June 30, 2024 compared to 3.29% for the three months ended June 30, 2023. Fully tax equivalent (FTE) NIM (Non-GAAP) decreased 11 basis points (“bps”) to 3.19% for the three months ended June 30, 2024 compared to 3.30% for the three months ended June 30, 2023.
    • Interest and dividend income increased $3.7 million, or 24.6%, to $18.9 million for the three months ended June 30, 2024 compared to $15.2 million for the three months ended June 30, 2023.
    • Interest income on loans increased $1.2 million, or 9.3%, to $14.7 million for the three months ended June 30, 2024 compared to $13.4 million for the three months ended June 30, 2023. The average yield on loans increased 50 bps to 5.50% compared to 5.00% resulting in a $1.3 million increase in interest income on loans. The average balance of loans decreased $2.9 million to $1.076 billion from $1.079 billion, causing a $77,000 decrease in interest income on loans. The increase in loan yield has been driven by a reduction in lower yielding consumer loans due to the discontinuation of the indirect automobile loan product with the redeployment of those funds into higher yielding commercial loan products.
    • Interest income on taxable investment securities increased $1.9 million, or 199.4%, to $2.8 million for the three months ended June 30, 2024 compared to $950,000 for the three months ended June 30, 2023 driven by a 246 bp increase in average yield coupled with a $56.7 million increase in average balances. The increase in the average yield was the result of the Bank implementing a balance sheet repositioning strategy of its portfolio of available-for-sale securities during the fourth quarter of 2023. The Bank sold $69.3 million in market value of its lower yielding U.S. government agency, mortgage-backed and municipal securities with an average yield of 1.89% and purchased $69.3 million of higher yielding mortgage-backed and collateralized mortgage obligation securities with an average yield of 5.49%. The increase in volume was driven by a $74.3 million increase in the average balance of collateralized loan obligation (“CLO”) securities as the Bank executed a leverage strategy to purchase these assets funded with brokered certificates of deposits.
    • Interest income on interest-earning deposits at other banks increased $592,000, to $1.3 million for the three months ended June 30, 2024 compared to $721,000 for the three months ended June 30, 2023 driven by a $47.7 million increase in average balances, partially offset by a 19 bp decrease in the average yield. The volume increase was due in part to $30.5 million in cash received from the December 2023 sale of EU.
  • Interest expense increased $3.4 million, or 82.9%, to $7.5 million for the three months ended June 30, 2024 compared to $4.1 million for the three months ended June 30, 2023.
    • Interest expense on deposits increased $3.2 million, or 83.9%, to $7.1 million for the three months ended June 30, 2024 compared to $3.8 million for the three months ended June 30, 2023. Rising market interest rates led to the repricing of interest-bearing demand and money market deposits and a shift in deposits from noninterest-bearing and interest-bearing demand deposits into money market and time deposits which resulted in a 109 bp, or 65.8%, increase in the average cost of interest-bearing deposits compared to the three months ended June 30, 2023. This accounted for a $2.8 million increase in interest expense. Additionally, interest-bearing deposit balances increased $103.6 million, or 11.1%, to $1.0 billion as of June 30, 2024 compared to $930.1 million as of June 30, 2023, accounting for a $462,000 increase in interest expense.
    • Interest expense on borrowed funds increased $163,000, or 67.6%, to $404,000 for the three months ended June 30, 2024 compared to $241,000 for the three months ended June 30, 2023. The average balance of borrowed funds increased $13.2 million due to $20.0 million of FHLB long-term advances added during the second quarter of 2023. The increase in the average balance accounted for a $158,000 increase in interest expense.

Provision for Credit Losses

The provision for credit losses recorded for the three months ended June 30, 2024 was a net recovery of $36,000. The provision for credit losses - loans was $12,000 and was primarily due to an increase in the required reserve for individually analyzed loans, partially offset by the impact of a decrease in loan balances while the provision for credit losses - unfunded commitments was a recovery of $48,000 and was due to a decrease in loss rates. This compared to a $432,000 provision for credit losses recorded for the three months ended June 30, 2023 and was required primarily due to loan growth coupled with a modeled slowdown in loan prepayment speeds.

Noninterest Income

Noninterest income decreased $1.6 million, or 69.7%, to $688,000 for the three months ended June 30, 2024, compared to $2.3 million for the three months ended June 30, 2023. This decrease resulted primarily from a $1.5 million decrease in insurance commissions as no income was recognized for the three months ended June 30, 2024 due to the December 2023 sale of EU, compared to a full quarter of income recognized for the three months ended June 30, 2023.

Noninterest Expense

Noninterest expense decreased $517,000, or 5.4%, to $9.0 million for the three months ended June 30, 2024 compared to $9.5 million for the three months ended June 30, 2023. Salaries and benefits decreased $806,000, or 15.4%, to $4.4 million primarily due to no expense related to EU recognized for the three months ended June 30, 2024 due to the December 2023 sale, compared to $823,000 of expense recognized for the three months ended June 30, 2023, partially offset by merit increases and revenue producing staff additions. Intangible amortization decreased $182,000 as a portion of the Bank’s core deposit intangible was fully amortized in February 2024 and EU intangible amortization of $47,000 was realized during the three months ended June 30, 2023. FDIC assessment expense decreased $63,000 due to a decrease in the assessment rate. Data processing expense increased $293,000 costs associated with the implementation of a new loan origination system and financial dashboard platform. Occupancy expenses increased $151,000 due to $192,000 of environmental remediation costs related to a construction project on one of the Bank’s office location, partially offset by $42,000 of EU occupancy expenses realized during the three months ended June 30, 2023. Pennsylvania shares tax expense increased $102,000 due to a higher taxable base due to the increase in equity resulting from the sale of EU.

Statement of Financial Condition Review

Assets

Total assets increased $103.8 million, or 7.1%, to $1.56 billion at June 30, 2024, compared to $1.46 billion at December 31, 2023.

  • Cash and due from banks increased $74.4 million, or 109.0%, to $142.6 million at June 30, 2024, compared to $68.2 million at December 31, 2023.
  • Securities increased $61.7 million, or 29.8%, to $268.8 million at June 30, 2024, compared to $207.1 million at December 31, 2023. The securities balance was primarily impacted by the purchase of $69.8 million of CLO securities, partially offset by $6.8 million of principal repayments on amortizing securities.

Loans and Credit Quality

  • Total loans decreased $31.7 million, or 2.9%, to $1.08 billion at June 30, 2024 compared to $1.11 billion at December 31, 2023. This was driven by decreases in consumer, commercial real estate and residential real estate loans of $21.3 million, $8.4 million and $5.1 million, respectively, partially offset by increases in commercial and industrial loans, other loans and construction loans of $1.1 million, $1.1 million and $922,000, respectively. The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to rising market interest rates and the discontinuation of this product offering as of June 30, 2023. This portfolio is expected to continue to decline as resources are allocated and production efforts are focused on more profitable commercial products. In total, $62.3 million of loans have paid off since December 31, 2023.
  • The allowance for credit losses (ACL) was $9.5 million at June 30, 2024 and $9.7 million at December 31, 2023. As a result, the ACL to total loans was 0.88% at June 30, 2024 and 0.87% at December 31, 2023. During the current year, the Company recorded a net recovery of credit losses of $73,000.
  • Net charge-offs for the three months ended June 30, 2024 were $67,000, or 0.02% of average loans on an annualized basis. 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 six months ended June 30, 2024 were $50,000. Net recoveries for the six months ended June 30, 2023 were $660,000 primarily due to recoveries totaling $750,000 related to a prior year $2.7 million charged-off commercial and industrial loan.
  • Nonperforming loans, which include nonaccrual loans and accruing loans past due 90 days or more, were $1.9 million at June 30, 2024 and $2.2 million at December 31, 2023. Nonperforming loans to total loans ratio was 0.17% at June 30, 2024 and 0.20% at December 31, 2023.

Total liabilities increased $100.7 million, or 7.7%, to $1.4 billion at June 30, 2024 compared to $1.3 billion at December 31, 2023.

Deposits

  • Total deposits increased $82.6 million to $1.35 billion as of June 30, 2024 compared to $1.27 billion at December 31, 2023. Time deposits increased $115.4 million and money market deposits increased $28.9 million while interest-bearing demand, savings and non interest-bearing demand deposits decreased $38.3 million, $15.6 million and $7.8 million, respectively. Deposit changes were primarily the result of the current interest rate environment causing a shift in deposit products to higher priced money market and time deposits. Additionally, the Bank added $63.1 million of brokered certificates of deposit during the period. Brokered certificates of deposit totaled $92.1 million as of June 30, 2024 compared to $29.0 million at December 31, 2023, all mature within three months and were utilized to fund the purchase of floating rate CLO securities. At June 30, 2024, FDIC insured deposits totaled approximately 62.6% of total deposits while an additional 15.0% of deposits were collateralized with investment securities.

Accrued Interest Payable and Other Liabilities

  • Accrued interest payable and other liabilities increased $18.1 million, or 125.5%, to $32.5 million at June 30, 2024, compared to $14.4 million at December 31, 2023 primarily due to the purchase of $14.7 million of syndicated loans and $7.6 million of securities which were unsettled at the end of the period.

Stockholders’ Equity

Stockholders’ equity increased $3.0 million, or 2.1%, to $142.9 million at June 30, 2024, compared to $139.8 million at December 31, 2023. The key factor positively impacting stockholders’ equity was $6.8 million of net income for the current period, partially offset by a $1.6 million increase in accumulated other comprehensive loss and the payment of $2.6 million in dividends since December 31, 2023.

Book value per share

Book value per common share was $27.79 at June 30, 2024 compared to $27.32 at December 31, 2023, an increase of $0.47.

Tangible book value per common share (Non-GAAP) was $25.83 at June 30, 2024, compared to $25.23 at December 31, 2023, an increase of $0.60.

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.

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

6/30/24

 

3/31/24

 

12/31/23

 

9/30/23

 

6/30/23

Assets

 

 

 

 

 

 

 

 

 

Cash and Due From Banks

$

142,600

 

 

$

73,691

 

 

$

68,223

 

 

$

52,597

 

 

$

78,093

 

Securities

 

268,769

 

 

 

232,276

 

 

 

207,095

 

 

 

172,904

 

 

 

181,427

 

Loans Held for Sale

 

632

 

 

 

200

 

 

 

 

 

 

 

 

 

 

Loans

 

 

 

 

 

 

 

 

 

Real Estate:

 

 

 

 

 

 

 

 

 

Residential

 

342,689

 

 

 

346,938

 

 

 

347,808

 

 

 

346,485

 

 

 

338,493

 

Commercial

 

458,724

 

 

 

470,430

 

 

 

467,154

 

 

 

466,910

 

 

 

458,614

 

Construction

 

44,038

 

 

 

44,323

 

 

 

43,116

 

 

 

41,874

 

 

 

44,523

 

Commercial and Industrial

 

112,395

 

 

 

103,313

 

 

 

111,278

 

 

 

100,873

 

 

 

102,266

 

Consumer

 

90,357

 

 

 

100,576

 

 

 

111,643

 

 

 

122,516

 

 

 

134,788

 

Other

 

30,491

 

 

 

30,763

 

 

 

29,397

 

 

 

23,856

 

 

 

22,470

 

Total Loans

 

1,078,694

 

 

 

1,096,343

 

 

 

1,110,396

 

 

 

1,102,514

 

 

 

1,101,154

 

Allowance for Credit Losses

 

(9,527

)

 

 

(9,582

)

 

 

(9,707

)

 

 

(10,848

)

 

 

(10,666

)

Loans, Net

 

1,069,167

 

 

 

1,086,761

 

 

 

1,100,689

 

 

 

1,091,666

 

 

 

1,090,488

 

Premises and Equipment, Net

 

20,326

 

 

 

19,548

 

 

 

19,704

 

 

 

18,524

 

 

 

18,582

 

Bank-Owned Life Insurance

 

23,910

 

 

 

23,763

 

 

 

25,378

 

 

 

25,227

 

 

 

25,082

 

Goodwill

 

9,732

 

 

 

9,732

 

 

 

9,732

 

 

 

9,732

 

 

 

9,732

 

Intangible Assets, Net

 

353

 

 

 

617

 

 

 

958

 

 

 

2,177

 

 

 

2,622

 

Accrued Interest Receivable and Other Assets

 

24,360

 

 

 

26,501

 

 

 

24,312

 

 

 

26,665

 

 

 

26,707

 

Total Assets

$

1,559,849

 

 

$

1,473,089

 

 

$

1,456,091

 

 

$

1,399,492

 

 

$

1,432,733

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Noninterest-Bearing Demand Accounts

$

269,964

 

 

$

275,182

 

 

$

277,747

 

 

$

305,145

 

 

$

316,098

 

Interest-Bearing Demand Accounts

 

324,688

 

 

 

323,134

 

 

 

362,994

 

 

 

357,381

 

 

 

374,654

 

Money Market Accounts

 

229,998

 

 

 

208,375

 

 

 

201,074

 

 

 

189,187

 

 

 

185,814

 

Savings Accounts

 

179,081

 

 

 

190,206

 

 

 

194,703

 

 

 

207,148

 

 

 

217,267

 

Time Deposits

 

346,037

 

 

 

265,597

 

 

 

230,641

 

 

 

177,428

 

 

 

169,482

 

Total Deposits

 

1,349,768

 

 

 

1,262,494

 

 

 

1,267,159

 

 

 

1,236,289

 

 

 

1,263,315

 

 

 

 

 

 

 

 

 

 

 

Other Borrowings

 

34,698

 

 

 

34,688

 

 

 

34,678

 

 

 

34,668

 

 

 

34,658

 

Accrued Interest Payable and Other Liabilities

 

32,501

 

 

 

34,317

 

 

 

14,420

 

 

 

13,689

 

 

 

18,171

 

Total Liabilities

 

1,416,967

 

 

 

1,331,499

 

 

 

1,316,257

 

 

 

1,284,646

 

 

 

1,316,144

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

142,882

 

 

 

141,590

 

 

 

139,834

 

 

 

114,846

 

 

 

116,589

 

Total Liabilities and Stockholders’ Equity

$

1,559,849

 

 

$

1,473,089

 

 

$

1,456,091

 

 

$

1,399,492

 

 

$

1,432,733

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except share and per share data) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Six Months Ended

Selected Operating Data

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

6/30/24

6/30/23

Interest and Dividend Income:

 

 

 

 

 

 

 

Loans, Including Fees

$

14,670

 

$

14,838

 

$

14,804

 

$

14,049

 

$

13,426

 

$

29,508

 

$

25,797

 

Securities:

 

 

 

 

 

 

 

Taxable

 

2,844

 

 

2,303

 

 

1,164

 

 

940

 

 

950

 

 

5,148

 

 

1,914

 

Tax-Exempt

 

 

 

 

 

33

 

 

41

 

 

42

 

 

 

 

83

 

Dividends

 

27

 

 

27

 

 

32

 

 

25

 

 

25

 

 

54

 

 

49

 

Other Interest and Dividend Income

 

1,398

 

 

818

 

 

872

 

 

819

 

 

760

 

 

2,216

 

 

1,605

 

Total Interest and Dividend Income

 

18,939

 

 

17,986

 

 

16,905

 

 

15,874

 

 

15,203

 

 

36,926

 

 

29,448

 

Interest Expense:

 

 

 

 

 

 

 

Deposits

 

7,065

 

 

5,991

 

 

5,336

 

 

4,750

 

 

3,842

 

 

13,056

 

 

6,346

 

Short-Term Borrowings

 

 

 

 

 

26

 

 

 

 

3

 

 

 

 

5

 

Other Borrowings

 

404

 

 

404

 

 

407

 

 

407

 

 

238

 

 

808

 

 

393

 

Total Interest Expense

 

7,469

 

 

6,395

 

 

5,769

 

 

5,157

 

 

4,083

 

 

13,864

 

 

6,744

 

Net Interest and Dividend Income

 

11,470

 

 

11,591

 

 

11,136

 

 

10,717

 

 

11,120

 

 

23,062

 

 

22,704

 

Provision (Recovery) for Credit Losses - Loans

 

12

 

 

(143

)

 

(1,147

)

 

291

 

 

492

 

 

(130

)

 

572

 

(Recovery) Provision for Credit Losses - Unfunded Commitments

 

(48

)

 

106

 

 

(273

)

 

115

 

 

(60

)

 

57

 

 

(60

)

Net Interest and Dividend Income After Net (Recovery) Provision for Credit Losses

 

11,506

 

 

11,628

 

 

12,556

 

 

10,311

 

 

10,688

 

 

23,135

 

 

22,192

 

Noninterest Income:

 

 

 

 

 

 

 

Service Fees

 

354

 

 

415

 

 

460

 

 

466

 

 

448

 

 

769

 

 

892

 

Insurance Commissions

 

1

 

 

2

 

 

969

 

 

1,436

 

 

1,511

 

 

3

 

 

3,434

 

Other Commissions

 

22

 

 

62

 

 

60

 

 

94

 

 

224

 

 

84

 

 

368

 

Net Gain (Loss) on Sales of Loans

 

9

 

 

22

 

 

2

 

 

 

 

(5

)

 

30

 

 

(3

)

Net Loss on Securities

 

(31

)

 

(166

)

 

(9,830

)

 

(37

)

 

(100

)

 

(197

)

 

(332

)

Net Gain on Purchased Tax Credits

 

12

 

 

12

 

 

7

 

 

7

 

 

7

 

 

25

 

 

14

 

Gain on Sale of Subsidiary

 

 

 

 

 

24,578

 

 

 

 

 

 

 

 

 

Net Gain on Disposal of Premises and Equipment

 

 

 

274

 

 

 

 

 

 

 

 

274

 

 

11

 

Income from Bank-Owned Life Insurance

 

147

 

 

148

 

 

151

 

 

145

 

 

139

 

 

295

 

 

280

 

Net Gain on Bank-Owned Life Insurance Claims

 

 

 

915

 

 

 

 

 

 

1

 

 

915

 

 

303

 

Other Income

 

174

 

 

232

 

 

121

 

 

301

 

 

44

 

 

406

 

 

113

 

Total Noninterest Income

 

688

 

 

1,916

 

 

16,518

 

 

2,412

 

 

2,269

 

 

2,604

 

 

5,080

 

Noninterest Expense:

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

4,425

 

 

4,576

 

 

6,224

 

 

5,369

 

 

5,231

 

 

9,001

 

 

10,310

 

Occupancy

 

940

 

 

749

 

 

810

 

 

698

 

 

789

 

 

1,689

 

 

1,490

 

Equipment

 

298

 

 

264

 

 

298

 

 

265

 

 

283

 

 

562

 

 

501

 

Data Processing

 

1,011

 

 

692

 

 

726

 

 

714

 

 

718

 

 

1,703

 

 

1,575

 

Federal Deposit Insurance Corporation Assessment

 

161

 

 

129

 

 

189

 

 

189

 

 

224

 

 

290

 

 

376

 

Pennsylvania Shares Tax

 

297

 

 

297

 

 

217

 

 

217

 

 

195

 

 

595

 

 

455

 

Contracted Services

 

390

 

 

281

 

 

299

 

 

286

 

 

434

 

 

671

 

 

581

 

Legal and Professional Fees

 

208

 

 

212

 

 

434

 

 

320

 

 

246

 

 

420

 

 

428

 

Advertising

 

78

 

 

129

 

 

158

 

 

114

 

 

75

 

 

206

 

 

154

 

Other Real Estate Owned (Income)

 

37

 

 

(23

)

 

(36

)

 

(8

)

 

(35

)

 

14

 

 

(72

)

Amortization of Intangible Assets

 

264

 

 

341

 

 

430

 

 

445

 

 

446

 

 

605

 

 

891

 

Other Expense

 

875

 

 

781

 

 

1,016

 

 

878

 

 

895

 

 

1,656

 

 

1,841

 

Total Noninterest Expense

 

8,984

 

 

8,428

 

 

10,765

 

 

9,487

 

 

9,501

 

 

17,412

 

 

18,530

 

Income Before Income Tax Expense

 

3,210

 

 

5,116

 

 

18,309

 

 

3,236

 

 

3,456

 

 

8,327

 

 

8,742

 

Income Tax Expense

 

560

 

 

920

 

 

5,343

 

 

564

 

 

699

 

 

1,480

 

 

1,827

 

Net Income

$

2,650

 

$

4,196

 

$

12,966

 

$

2,672

 

$

2,757

 

$

6,847

 

$

6,915

 

 

Three Months Ended

Six Months Ended

Per Common Share Data

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

6/30/24

6/30/23

Dividends Per Common Share

$

0.25

$

0.25

$

0.25

$

0.25

$

0.25

$

0.50

$

0.50

Earnings Per Common Share - Basic

 

0.52

 

0.82

 

2.53

 

0.52

 

0.54

 

1.33

 

1.35

Earnings Per Common Share - Diluted

 

0.51

 

0.82

 

2.52

 

0.52

 

0.54

 

1.33

 

1.35

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding - Basic

 

5,142,139

 

5,129,903

 

5,119,184

 

5,115,026

 

5,111,987

 

5,136,021

 

5,110,799

Weighted Average Common Shares Outstanding - Diluted

 

5,152,657

 

5,142,286

 

5,135,997

 

5,126,546

 

5,116,134

 

5,151,188

 

5,118,396

 

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

Common Shares Outstanding

 

5,141,911

 

 

5,142,901

 

 

5,118,713

 

 

5,120,678

 

 

5,111,678

 

Book Value Per Common Share

$

27.79

 

$

27.53

 

$

27.32

 

$

22.43

 

$

22.81

 

Tangible Book Value per Common Share (1)

 

25.83

 

 

25.52

 

 

25.23

 

 

20.10

 

 

20.39

 

Stockholders’ Equity to Assets

 

9.2

%

 

9.6

%

 

9.6

%

 

8.2

%

 

8.1

%

Tangible Common Equity to Tangible Assets (1)

 

8.6

 

 

9.0

 

 

8.9

 

 

7.4

 

 

7.3

 

 

Three Months Ended

Six Months Ended

Selected Financial Ratios (2)

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

6/30/24

6/30/23

Return on Average Assets

0.71

%

1.17

%

3.62

%

0.75

%

0.79

%

0.93

%

1.00

%

Return on Average Equity

7.58

 

12.03

 

44.99

 

9.03

 

9.38

 

9.80

 

11.98

 

Average Interest-Earning Assets to Average Interest-Bearing Liabilities

135.69

 

137.07

 

138.67

 

139.65

 

142.28

 

136.36

 

144.88

 

Average Equity to Average Assets

9.36

 

9.72

 

8.04

 

8.32

 

8.38

 

9.54

 

8.33

 

Net Interest Rate Spread

2.44

 

2.67

 

2.56

 

2.54

 

2.78

 

2.55

 

2.95

 

Net Interest Rate Spread (FTE) (1)

2.46

 

2.68

 

2.57

 

2.55

 

2.79

 

2.56

 

2.96

 

Net Interest Margin

3.18

 

3.36

 

3.19

 

3.13

 

3.29

 

3.27

 

3.40

 

Net Interest Margin (FTE) (1)

3.19

 

3.37

 

3.21

 

3.14

 

3.30

 

3.28

 

3.41

 

Net Charge-Offs (Recoveries) to Average Loans

0.02

 

(0.01

)

 

0.04

 

0.04

 

0.01

 

(0.12

)

Efficiency Ratio

73.89

 

62.40

 

38.93

 

72.26

 

70.96

 

67.84

 

66.69

 

Asset Quality Ratios

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

Allowance for Credit Losses to Total Loans

0.88

%

0.87

%

0.87

%

0.98

%

0.97

%

Allowance for Credit Losses to Nonperforming Loans (3)

513.03

 

437.73

 

433.35

 

330.13

 

260.46

 

Delinquent and Nonaccrual Loans to Total Loans (4)

0.53

 

0.63

 

0.62

 

0.73

 

0.68

 

Nonperforming Loans to Total Loans (3)

0.17

 

0.20

 

0.20

 

0.30

 

0.37

 

Nonperforming Assets to Total Assets (5)

0.13

 

0.15

 

0.16

 

0.23

 

0.30

 

Capital Ratios (6)

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

Common Equity Tier 1 Capital (to Risk Weighted Assets)

14.62

%

14.50

%

13.64

%

12.77

%

12.54

%

Tier 1 Capital (to Risk Weighted Assets)

14.62

 

14.50

 

13.64

 

12.77

 

12.54

 

Total Capital (to Risk Weighted Assets)

15.61

 

15.51

 

14.61

 

13.90

 

13.64

 

Tier 1 Leverage (to Adjusted Total Assets)

9.98

 

10.28

 

10.19

 

9.37

 

9.26

 

(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)

 

Delinquent loans consist of accruing loans that are 30 days or more past due.

(5)

 

Nonperforming assets consist of nonperforming loans and other real estate owned.

(6)

 

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, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

 

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)

$

1,076,455

$

14,711

 

5.50

%

 

$

1,087,889

$

14,877

 

5.50

%

 

$

1,098,284

$

14,840

 

5.36

%

 

$

1,088,691

$

14,081

 

5.13

%

 

$

1,079,399

$

13,450

 

5.00

%

Debt Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

266,021

 

2,844

 

4.28

 

 

 

235,800

 

2,303

 

3.91

 

 

 

206,702

 

1,164

 

2.25

 

 

 

204,848

 

940

 

1.84

 

 

 

209,292

 

950

 

1.82

 

Tax-Exempt

 

 

 

 

 

 

 

 

 

 

 

4,833

 

42

 

3.48

 

 

 

6,013

 

52

 

3.46

 

 

 

6,180

 

53

 

3.43

 

Equity Securities

 

2,693

 

27

 

4.01

 

 

 

2,693

 

27

 

4.01

 

 

 

2,693

 

32

 

4.75

 

 

 

2,693

 

25

 

3.71

 

 

 

2,693

 

25

 

3.71

 

Interest-Earning Deposits at Banks

 

101,277

 

1,313

 

5.19

 

 

 

58,887

 

733

 

4.98

 

 

 

67,450

 

808

 

4.79

 

 

 

52,466

 

750

 

5.72

 

 

 

53,582

 

721

 

5.38

 

Other Interest-Earning Assets

 

3,154

 

85

 

10.84

 

 

 

3,235

 

85

 

10.57

 

 

 

3,387

 

64

 

7.50

 

 

 

3,292

 

69

 

8.32

 

 

 

2,783

 

39

 

5.62

 

Total Interest-Earning Assets

 

1,449,600

 

18,980

 

5.27

 

 

 

1,388,504

 

18,025

 

5.22

 

 

 

1,383,349

 

16,950

 

4.86

 

 

 

1,358,003

 

15,917

 

4.65

 

 

 

1,353,929

 

15,238

 

4.51

 

Noninterest-Earning Assets

 

53,564

 

 

 

 

 

54,910

 

 

 

 

 

38,464

 

 

 

 

 

52,885

 

 

 

 

 

52,812

 

 

 

Total Assets

$

1,503,164

 

 

 

 

$

1,443,414

 

 

 

 

$

1,421,813

 

 

 

 

$

1,410,888

 

 

 

 

$

1,406,741

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Demand Accounts

$

325,069

$

1,858

 

2.30

%

 

$

334,880

$

1,794

 

2.15

%

 

$

362,018

$

1,965

 

2.15

%

 

$

363,997

$

2,003

 

2.18

%

 

$

354,497

$

1,582

 

1.79

%

Money Market Accounts

 

214,690

 

1,646

 

3.08

 

 

 

203,867

 

1,514

 

2.99

 

 

 

205,060

 

1,441

 

2.79

 

 

 

187,012

 

1,141

 

2.42

 

 

 

194,565

 

1,033

 

2.13

 

Savings Accounts

 

184,944

 

52

 

0.11

 

 

 

191,444

 

59

 

0.12

 

 

 

200,737

 

57

 

0.11

 

 

 

212,909

 

54

 

0.10

 

 

 

225,175

 

53

 

0.09

 

Time Deposits

 

308,956

 

3,509

 

4.57

 

 

 

248,118

 

2,624

 

4.25

 

 

 

193,188

 

1,873

 

3.85

 

 

 

173,832

 

1,552

 

3.54

 

 

 

155,867

 

1,174

 

3.02

 

Total Interest-Bearing Deposits

 

1,033,659

 

7,065

 

2.75

 

 

 

978,309

 

5,991

 

2.46

 

 

 

961,003

 

5,336

 

2.20

 

 

 

937,750

 

4,750

 

2.01

 

 

 

930,104

 

3,842

 

1.66

 

Short-Term Borrowings

 

2

 

 

 

 

 

 

 

 

 

 

1,902

 

26

 

5.42

 

 

 

 

 

 

 

 

480

 

3

 

2.51

 

Other Borrowings

 

34,692

 

404

 

4.68

 

 

 

34,682

 

404

 

4.69

 

 

 

34,673

 

407

 

4.66

 

 

 

34,662

 

407

 

4.66

 

 

 

21,026

 

238

 

4.54

 

Total Interest-Bearing Liabilities

 

1,068,353

 

7,469

 

2.81

 

 

 

1,012,991

 

6,395

 

2.54

 

 

 

997,578

 

5,769

 

2.29

 

 

 

972,412

 

5,157

 

2.10

 

 

 

951,610

 

4,083

 

1.72

 

Noninterest-Bearing Demand Deposits

 

272,280

 

 

 

 

 

278,691

 

 

 

 

 

305,789

 

 

 

 

 

312,016

 

 

 

 

 

326,262

 

 

 

Total Funding and Cost of Funds

 

1,340,633

 

 

2.24

 

 

 

1,291,682

 

 

1.99

 

 

 

1,303,367

 

 

1.76

 

 

 

1,284,428

 

 

1.59

 

 

 

1,277,872

 

 

1.28

 

Other Liabilities

 

21,867

 

 

 

 

 

11,441

 

 

 

 

 

4,119

 

 

 

 

 

9,025

 

 

 

 

 

10,920

 

 

 

Total Liabilities

 

1,362,500

 

 

 

 

 

1,303,123

 

 

 

 

 

1,307,486

 

 

 

 

 

1,293,453

 

 

 

 

 

1,288,792

 

 

 

Stockholders' Equity

 

140,664

 

 

 

 

 

140,291

 

 

 

 

 

114,327

 

 

 

 

 

117,435

 

 

 

 

 

117,949

 

 

 

Total Liabilities and Stockholders' Equity

$

1,503,164

 

 

 

 

$

1,443,414

 

 

 

 

$

1,421,813

 

 

 

 

$

1,410,888

 

 

 

 

$

1,406,741

 

 

 

Net Interest Income (FTE)

(Non-GAAP) (3)

 

$

11,511

 

 

 

 

$

11,630

 

 

 

 

$

11,181

 

 

 

 

$

10,760

 

 

 

 

$

11,155

 

 

Net Interest-Earning Assets (4)

 

381,247

 

 

 

 

 

375,513

 

 

 

 

 

385,771

 

 

 

 

 

385,591

 

 

 

 

 

402,319

 

 

 

Net Interest Rate Spread (FTE) (Non-GAAP) (3) (5)

 

 

 

2.46

%

 

 

 

 

2.68

%

 

 

 

 

2.57

%

 

 

 

 

2.55

%

 

 

 

 

2.79

%

Net Interest Margin (GAAP) (6)

 

 

 

3.18

 

 

 

 

 

3.36

 

 

 

 

 

3.19

 

 

 

 

 

3.13

 

 

 

 

 

3.29

 

Net Interest Margin (FTE) (Non-GAAP) (3)(6)

 

 

 

3.19

 

 

 

 

 

3.37

 

 

 

 

 

3.21

 

 

 

 

 

3.14

 

 

 

 

 

3.30

 

(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, 2024

 

June 30, 2023

 

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)

$

1,082,172

 

$

29,586

 

5.50

%

 

$

1,060,092

 

$

25,840

 

4.92

%

Debt Securities

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

250,912

 

 

5,148

 

4.10

 

 

 

211,213

 

 

1,914

 

1.81

 

Exempt From Federal Tax

 

 

 

 

 

 

 

6,225

 

 

105

 

3.37

 

Marketable Equity Securities

 

2,693

 

 

54

 

4.01

 

 

 

2,693

 

 

49

 

3.64

 

Interest-Earning Deposits at Banks

 

80,082

 

 

2,045

 

5.11

 

 

 

64,455

 

 

1,526

 

4.74

 

Other Interest-Earning Assets

 

3,195

 

 

171

 

10.76

 

 

 

2,709

 

 

79

 

5.88

 

Total Interest-Earning Assets

 

1,419,054

 

 

37,004

 

5.24

 

 

 

1,347,387

 

 

29,513

 

4.42

 

Noninterest-Earning Assets

 

54,141

 

 

 

 

 

 

50,159

 

 

 

 

Total Assets

$

1,473,195

 

 

 

 

 

$

1,397,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Demand Accounts

$

329,974

 

$

3,653

 

2.23

%

 

$

344,965

 

$

2,773

 

1.62

%

Savings Accounts

 

188,194

 

 

111

 

0.12

 

 

 

233,689

 

 

90

 

0.08

 

Money Market Accounts

 

209,279

 

 

3,159

 

3.04

 

 

 

203,952

 

 

1,972

 

1.95

 

Time Deposits

 

278,538

 

 

6,133

 

4.43

 

 

 

128,659

 

 

1,511

 

2.37

 

Total Interest-Bearing Deposits

 

1,005,985

 

 

13,056

 

2.61

 

 

 

911,265

 

 

6,346

 

1.40

 

Short-Term Borrowings

 

1

 

 

 

 

 

 

910

 

 

5

 

1.11

 

Other Borrowings

 

34,687

 

 

808

 

4.68

 

 

 

17,850

 

 

393

 

4.44

 

Total Interest-Bearing Liabilities

 

1,040,673

 

 

13,864

 

2.68

 

 

 

930,025

 

 

6,744

 

1.46

 

Noninterest-Bearing Demand Deposits

 

275,485

 

 

 

 

 

 

344,203

 

 

 

 

Total Funding and Cost of Funds

 

1,316,158

 

 

 

2.12

 

 

 

1,274,228

 

 

 

1.07

 

Other Liabilities

 

16,559

 

 

 

 

 

 

6,959

 

 

 

 

Total Liabilities

 

1,332,717

 

 

 

 

 

 

1,281,187

 

 

 

 

Stockholders' Equity

 

140,478

 

 

 

 

 

 

116,359

 

 

 

 

Total Liabilities and Stockholders' Equity

$

1,473,195

 

 

 

 

 

$

1,397,546

 

 

 

 

Net Interest Income (FTE) (Non-GAAP) (3)

 

 

 

23,140

 

 

 

 

 

 

22,769

 

 

Net Interest-Earning Assets (4)

 

378,381

 

 

 

 

 

 

417,362

 

 

 

 

Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5)

 

 

 

 

2.56

%

 

 

 

 

 

2.96

%

Net Interest Margin (FTE) (Non-GAAP) (3)(6)

 

 

 

 

3.28

 

 

 

 

 

 

3.41

 

(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.

 

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

(Dollars in thousands, except share and per share data) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Total Assets (GAAP)

$

1,559,849

 

$

1,473,089

 

$

1,456,091

 

$

1,399,492

 

$

1,432,733

 

Goodwill and Intangible Assets, Net

 

(10,085

)

 

(10,349

)

 

(10,690

)

 

(11,909

)

 

(12,354

)

Tangible Assets (Non-GAAP) (Numerator)

$

1,549,764

 

$

1,462,740

 

$

1,445,401

 

$

1,387,583

 

$

1,420,379

 

Stockholders' Equity (GAAP)

$

142,882

 

$

141,590

 

$

139,834

 

$

114,846

 

$

116,589

 

Goodwill and Intangible Assets, Net

 

(10,085

)

 

(10,349

)

 

(10,690

)

 

(11,909

)

 

(12,354

)

Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator)

$

132,797

 

$

131,241

 

$

129,144

 

$

102,937

 

$

104,235

 

Stockholders’ Equity to Assets (GAAP)

 

9.2

%

 

9.6

%

 

9.6

%

 

8.2

%

 

8.1

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

 

8.6

%

 

9.0

%

 

8.9

%

 

7.4

%

 

7.3

%

Common Shares Outstanding (Denominator)

 

5,141,911

 

 

5,142,901

 

 

5,118,713

 

 

5,120,678

 

 

5,111,678

 

Book Value per Common Share (GAAP)

$

27.79

 

$

27.53

 

$

27.32

 

$

22.43

 

$

22.81

 

Tangible Book Value per Common Share (Non-GAAP)

$

25.83

 

$

25.52

 

$

25.23

 

$

20.10

 

$

20.39

 

 

Three Months Ended

Six Months Ended

 

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

6/30/24

6/30/23

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (GAAP)

$

2,650

 

$

4,196

 

$

12,966

 

$

2,672

 

$

2,757

 

$

6,847

 

$

6,915

 

Amortization of Intangible Assets, Net

 

264

 

 

341

 

 

430

 

 

445

 

 

446

 

 

605

 

 

891

 

Adjusted Net Income (Non-GAAP) (Numerator)

$

2,914

 

$

4,537

 

$

13,396

 

$

3,117

 

$

3,203

 

$

7,452

 

$

7,806

 

Annualization Factor

 

4.02

 

 

4.02

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.01

 

 

2.02

 

Average Stockholders' Equity (GAAP)

$

140,664

 

$

140,291

 

$

114,327

 

$

117,435

 

$

117,949

 

$

140,478

 

$

116,359

 

Average Goodwill and Intangible Assets, Net

 

(10,242

)

 

(10,553

)

 

(11,829

)

 

(12,185

)

 

(12,626

)

 

(10,398

)

 

(12,852

)

Average Tangible Common Equity (Non-GAAP) (Denominator)

$

130,422

 

$

129,738

 

$

102,498

 

$

105,250

 

$

105,323

 

$

130,080

 

$

103,507

 

Return on Average Equity (GAAP)

 

7.58

%

 

12.03

%

 

44.99

%

 

9.03

%

 

9.38

%

 

9.80

%

 

11.98

%

Return on Average Tangible Common Equity (Non-GAAP)

 

8.99

%

 

14.07

%

 

51.85

%

 

11.75

%

 

12.20

%

 

11.52

%

 

15.21

%

 

Three Months Ended

Six Months Ended

 

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

6/30/24

6/30/23

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income (GAAP)

$

18,939

 

$

17,986

 

$

16,905

 

$

15,874

 

$

15,203

 

$

36,926

 

$

29,448

 

Adjustment to FTE Basis

 

41

 

 

39

 

 

45

 

 

43

 

 

35

 

 

78

 

 

65

 

Interest Income (FTE) (Non-GAAP)

 

18,980

 

 

18,025

 

 

16,950

 

 

15,917

 

 

15,238

 

 

37,004

 

 

29,513

 

Interest Expense (GAAP)

 

7,469

 

 

6,395

 

 

5,769

 

 

5,157

 

 

4,083

 

 

13,864

 

 

6,744

 

Net Interest Income (FTE) (Non-GAAP)

$

11,511

 

$

11,630

 

$

11,181

 

$

10,760

 

$

11,155

 

$

23,140

 

$

22,769

 

 

 

 

 

 

 

 

 

Net Interest Rate Spread (GAAP)

 

2.44

%

 

2.67

%

 

2.56

%

 

2.54

%

 

2.78

%

 

2.55

%

 

2.95

%

Adjustment to FTE Basis

 

0.02

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

Net Interest Rate Spread (FTE) (Non-GAAP)

 

2.46

%

 

2.68

%

 

2.57

%

 

2.55

%

 

2.79

%

 

2.56

%

 

2.96

%

 

 

 

 

 

 

 

 

Net Interest Margin (GAAP)

 

3.18

%

 

3.36

%

 

3.19

%

 

3.13

%

 

3.29

%

 

3.27

%

 

3.40

%

Adjustment to FTE Basis

 

0.01

 

 

0.01

 

 

0.02

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

Net Interest Margin (FTE) (Non-GAAP)

 

3.19

%

 

3.37

%

 

3.21

%

 

3.14

%

 

3.30

%

 

3.28

%

 

3.41

%

 

Three Months Ended

Six Months Ended

 

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

6/30/24

6/30/23

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Income Tax Expense (GAAP)

$

3,210

 

$

5,116

 

$

18,309

 

$

3,236

 

$

3,456

 

$

8,327

 

$

8,742

 

Net (Recovery) Provision for Credit Losses

 

(36

)

 

(37

)

 

(1,420

)

 

406

 

 

432

 

 

(73

)

 

512

 

Adjustments

 

 

 

 

 

 

 

Net Loss on Securities

 

31

 

 

166

 

 

9,830

 

 

37

 

 

100

 

 

197

 

 

332

 

Gain on Sale of Subsidiary

 

 

 

 

 

(24,578

)

 

 

 

 

 

 

 

 

Net Gain on Disposal of Premises and Equipment

 

 

 

(274

)

 

 

 

 

 

 

 

(274

)

 

(11

)

Net Gain on Bank-Owned Life Insurance Claims

 

 

 

(915

)

 

 

 

 

 

(1

)

$

(915

)

$

(303

)

Adjusted PPNR (Non-GAAP) (Numerator)

$

3,205

 

$

4,056

 

$

2,141

 

$

3,679

 

$

3,987

 

$

7,262

 

$

9,272

 

Annualization Factor

 

4.02

 

 

4.02

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.01

 

 

2.02

 

Average Assets (Denominator)

$

1,503,164

 

$

1,443,414

 

$

1,421,813

 

$

1,410,888

 

$

1,406,741

 

$

1,473,195

 

$

1,397,546

 

Adjusted PPNR Return on Average Assets (Non-GAAP)

 

0.86

%

 

1.13

%

 

0.60

%

 

1.04

%

 

1.14

%

 

0.99

%

 

1.34

%

 

Three Months Ended

Six Months Ended

 

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

6/30/24

6/30/23

(Dollars in thousands, except share and per share data) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (GAAP)

$

2,650

 

$

4,196

 

$

12,966

 

$

2,672

 

$

2,757

 

$

6,847

 

$

6,915

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Net Loss on Securities

 

31

 

 

166

 

 

9,830

 

 

37

 

 

100

 

 

197

 

 

332

 

Gain on Sale of Subsidiary

 

 

 

 

 

(24,578

)

 

 

 

 

 

 

 

 

Net Gain on Disposal of Premises and Equipment

 

 

 

(274

)

 

 

 

 

 

 

 

(274

)

 

(11

)

Net Gain on Bank-Owned Life Insurance Claims

 

 

 

(915

)

 

 

 

 

 

(1

)

 

(915

)

 

(303

)

Tax effect

 

(7

)

 

23

 

 

4,843

 

 

(8

)

 

(21

)

 

16

 

 

(67

)

Adjusted Net Income (Non-GAAP)

$

2,674

 

$

3,196

 

$

3,061

 

$

2,701

 

$

2,835

 

$

5,871

 

$

6,866

 

Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding

 

5,152,657

 

 

5,142,286

 

 

5,135,997

 

 

5,126,546

 

 

5,116,134

 

 

5,151,188

 

 

5,118,396

 

Earnings per Common Share - Diluted (GAAP)

$

0.51

 

$

0.82

 

$

2.52

 

$

0.52

 

$

0.54

 

$

1.33

 

$

1.35

 

Adjusted Earnings per Common Share - Diluted (Non-GAAP)

$

0.52

 

$

0.62

 

$

0.60

 

$

0.53

 

$

0.55

 

$

1.14

 

$

1.34

 

Net Income (GAAP) (Numerator)

$

2,650

 

$

4,196

 

$

12,966

 

$

2,672

 

$

2,757

 

$

6,847

 

$

6,915

 

Annualization Factor

 

4.02

 

 

4.02

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.01

 

 

2.02

 

Average Assets (Denominator)

 

1,503,164

 

 

1,443,414

 

 

1,421,813

 

 

1,410,888

 

 

1,406,741

 

 

1,473,195

 

 

1,397,546

 

Return on Average Assets (GAAP)

 

0.71

%

 

1.17

%

 

3.62

%

 

0.75

%

 

0.79

%

 

0.93

%

 

1.00

%

Adjusted Net Income (Non-GAAP) (Numerator)

$

2,674

 

$

3,196

 

$

3,061

 

$

2,701

 

$

2,835

 

$

5,871

 

$

6,866

 

Annualization Factor

 

4.02

 

 

4.02

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.01

 

 

2.02

 

Average Assets (Denominator)

 

1,503,164

 

 

1,443,414

 

 

1,421,813

 

 

1,410,888

 

 

1,406,741

 

 

1,473,195

 

 

1,397,546

 

Adjusted Return on Average Assets (Non-GAAP)

 

0.72

%

 

0.89

%

 

0.85

%

 

0.76

%

 

0.81

%

 

0.80

%

 

0.99

%

 

Three Months Ended

Six Months Ended

 

6/30/24

3/31/24

12/31/23

9/30/23

6/30/23

6/30/24

6/30/23

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (GAAP) (Numerator)

$

2,650

 

$

4,196

 

$

12,966

 

$

2,672

 

$

2,757

 

$

6,847

 

$

6,915

 

Annualization Factor

 

4.02

 

 

4.02

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.01

 

 

2.02

 

Average Equity (GAAP) (Denominator)

 

140,664

 

 

140,291

 

 

114,327

 

 

117,435

 

 

117,949

 

 

140,478

 

 

116,359

 

Return on Average Equity (GAAP)

 

7.58

%

 

12.03

%

 

44.99

%

 

9.03

%

 

9.38

%

 

9.80

%

 

11.98

%

Adjusted Net Income (Non-GAAP) (Numerator)

$

2,674

 

$

3,196

 

$

3,061

 

$

2,701

 

$

2,835

 

$

5,871

 

$

6,866

 

Annualization Factor

 

4.02

 

 

4.02

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.01

 

 

2.02

 

Average Equity (GAAP) (Denominator)

 

140,664

 

 

140,291

 

 

114,327

 

 

117,435

 

 

117,949

 

 

140,478

 

 

116,359

 

Adjusted Return on Average Equity (Non-GAAP)

 

7.65

%

 

9.16

%

 

10.62

%

 

9.12

%

 

9.64

%

 

8.40

%

 

11.90

%

 

Contacts

John H. Montgomery

President and Chief Executive Officer

Phone: (724) 223-8317

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