CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQ:CBFV),
the holding company of Community Bank (the “Bank”) and Exchange
Underwriters, Inc., a wholly-owned insurance subsidiary of
Community Bank, today announced its fourth quarter and full year
2017 financial results.
Fourth Quarter 2017 Highlights
- The Bank had robust loan growth in the fourth quarter of $40.5
million, which increased the loan portfolio to $744.4 million in
gross loans and an annualized loan growth rate of 23.0%.
- Deposit growth in the fourth quarter was approximately $11.0
million, which is an annualized deposit growth rate of 5.8%.
- The Company and Bank announced the pending merger with First
West Virginia Bancorp and Progressive Bank (“FWVB merger”) with an
intended merger closing date in the second quarter of 2018. Merger
expenses incurred as of December 31, 2017 were $356,000.
- Provision for loan losses increased $410,000 for the three
months ended December 31, 2017 as compared to the three months
ended December 31, 2016. This increase in provision was related to
fourth quarter loan growth and an increase in impaired loans.
- The revaluation adjustment of net deferred tax liabilities due
to the current quarter enactment of the new federal tax law titled
“Tax Cuts and Jobs Act of 2017” on December 22, 2017 yielded a
decrease of $89,000 in federal income tax expense in the fourth
quarter.
- Noninterest income increased $115,000 and $438,000 for the
three months and year ended December 31, 2017, respectively as
compared to the three months and year ended December 31, 2016. This
was mainly attributed to Exchange Underwriters’ record breaking net
income. The increase in insurance subsidiary income was related to
growth in commission and fees for commercial lines and contingency
income.
- Net interest income for the fourth quarter increased $72,000,
to $7.6 million as compared to $7.5 million for the fourth quarter
of 2016. This is due to increases in investment securities,
overnight interest bearing funds and loan growth.
The quarterly results were impacted by an increase in the
provision for loan losses due to quarterly loan growth and
increased impaired loans. The increase in impaired loans was
primarily related to one commercial loan relationship. In addition,
noninterest expense increased primarily from expense related to the
pending FWVB merger, salaries and benefits. Deposit growth
contributed to increases in interest income as some deposit
proceeds were deployed into additional investment securities and
the remaining in Federal funds and correspondent bank interest
bearing accounts. These deposit funds were kept liquid to fund the
rapid loan growth that occurred in the fourth quarter. Exchange
Underwriters enjoyed fourth quarter growth mainly in commercial
insurance commissions.
“We are pleased to report on our fourth quarter and full year
financial performance for 2017. The fourth quarter continued
our momentum in both loan and deposit growth. Thanks to an
improving local economy and our ongoing commitment to grow loans,
we were able to grow loans in the fourth quarter by $40.5 million,
which represents an annualized growth rate of 23.0%. We also
were able to continue our growth in deposits in the fourth
quarter. Deposits grew approximately $11.0 million, which is
an annualized growth rate of 5.8%. As of December 31, 2017,
our total loan to deposit ratio was 96.3%.
For 2017, Community Bank grew loans from $681.9 million to
$744.4 million, or $62.5 million. This represents a growth
rate of 9.2%. Commercial loans in particular experienced
growth of $60.4 million or 19.6%. During 2017, Community Bank
grew deposits and sweep accounts from $725.2 million to $799.1
million. This represents an annual growth rate of
10.2%. Municipal deposits grew by $33.0 million and
conventional demand deposits grew by $22.7 million.
The fourth quarter’s net income was impacted by significant
merger expenses, salaries and benefits. We also increased our
loan loss provision to $850,000 in the fourth quarter, both to
reflect our loan growth in the current quarter and an increase in
impaired loans. As of year-end, the loan loss reserve and the
acquired loan portfolio credit mark together were 1.34% of total
loans.
In the fourth quarter, CB Financial Services earned net income
of $1.4 million. For the year ended December 31, 2017, net
income was $6.9 million. While this is less than the $7.6
million made in 2016, special circumstances impacted results in
2017 such as merger costs and loan impairments at year-end.
In light of the growth in loans and the pending closing of the
First West Virginia merger, 2018 is off to a strong start.”
STATEMENT OF INCOME REVIEW
Fourth Quarter Results
Net Interest Income. Net interest
income increased $72,000, or 1.0%, to $7.6
million for the three months ended December 31, 2017 compared
to $7.5 million for the three months ended December 31,
2016.
Interest and dividend income increased $219,000,
or 2.7%, to $8.5 million for the three months ended
December 31, 2017 compared to $8.3 million for the three
months ended December 31, 2016. Interest income on taxable
securities increased $78,000 mainly due to increases
of $13.1 million in the average balance and 8 basis points in
yield for taxable securities in the current period. This is a
result of new purchases with higher prevailing yields replacing
security calls and maturities with lower yields within the
portfolio. Interest income on Federal funds sold increased to
$79,000 for the three months ended December 31, 2017 compared to
$9,000 for the three months ended December 31, 2016. This is the
result of the increase in interest rates in the last year and the
increases in the average interest-earning balances of $23.6 million
as a result of deposit growth for the three months ended December
31, 2017. In addition, other interest and dividend
income increased $37,000 as a result of increased
interest earned on correspondent deposit banks and FHLB dividends
in the current period. Interest income on loans increased $34,000
for the three months ended December 31, 2017 compared to the three
months ended December 31, 2016. Average loans increased
by $35.2 million during the current quarter. Despite the
average loan increase, the loan portfolio had a decrease of 18
basis points in yield. Contributing to the yield decrease this
quarter was the accretion on the acquired loan portfolio credit
mark. The impact of the accretion for the three months ended
December 31, 2017 was $229,000, or 13 basis points, compared to
$577,000, or 34 basis points, for the three months ended December
31, 2016. The remaining credit mark balance for acquired loans was
$760,000 as of December 31, 2017.
Interest expense increased $147,000, or 19.4%, to
$904,000 for the three months ended December 31, 2017 compared to
$757,000 for the three months ended December 31, 2016. Interest
expense on deposits increased $155,000 due to an increase
in average interest-bearing deposits of $60.5 million,
primarily due to increases in interest-bearing demand deposits,
time deposits and savings accounts. The average cost of
interest-bearing deposits increased 5 basis points. This was
related to the multiple interest rate hikes over the last year by
the Federal Reserve Board (“FRB”). Interest expense on other
borrowed funds decreased $8,000 primarily due to a FHLB
long-term borrowing for $3.5 million that matured in the first
quarter.
Provision for Loan Losses. The provision
for loan losses was $850,000 for the three months ended
December 31, 2017 compared to $440,000 for the three months
ended December 31, 2016. Net charge-offs for the three months ended
December 31, 2017 were $208,000, which included $181,000 of net
charge-offs on automobile loans, compared to $105,000 of net
charge-offs for the three months ended December 31, 2016, which
included $203,000 of net charge-offs on automobile loans. The
change in net charge-offs during the current period was due to a
prior year quarter recovery of $95,000 on a commercial real estate
relationship. Management analyzes the loan portfolio on a quarterly
basis to determine the adequacy of the allowance for loan losses
and the need for additional provisions for loan losses. The
increase in the quarterly provision was primarily due to a recently
impaired commercial and industrial loan relationship and loan
growth. This was partially offset by improvements in the local
economy and industry conditions which had a positive impact on the
qualitative factors within the allowance calculation.
Noninterest Income. Noninterest
income increased $115,000, or 6.3%, to $1.9 million for the
three months ended December 31, 2017 compared to $1.8 million for
the three months ended December 31, 2016. Insurance commissions
from Exchange Underwriters increased $91,000 due to increased
commercial lines commission and fee income, partially offset by a
decrease in contingency fees received in the current period.
Contingency fees are commissions that are contingent upon several
factors including, but not limited to, eligible written premiums,
earned premiums, incurred losses and stop loss charges. Service
fees on deposit accounts increased $40,000 due to increased check
card fees and non-sufficient funds (“NSF”) fees due to customer
overdrafts of deposit accounts in the current quarter. Net gains on
purchased tax credits increased $14,000 due to the purchased
Pennsylvania shares tax credits being recognized in the current
period. Other noninterest income increased $13,000 due to the
current quarter reduction in amortized mortgage servicing rights.
There was a decrease in the net gains on the sales of residential
mortgage loans of $31,000. The decrease in gains was primarily due
to a decrease in the number of loans originated and subsequently
sold to the FHLB as part of the Mortgage Partnership Finance®
(“MPF®”) program. The MPF® program enables member financial
institutions to offer competitive interest rates for fixed-rate
mortgage loans without assuming any of the interest rate risk
associated with a long-term asset. Net gains on the sales of
investments decreased $21,000 due to the sale of equity securities
in 2016. These sales were transacted to recognize capital gains
that were offset by a capital loss carry forward deferred tax asset
that was acquired in the merger with FedFirst Financial Corporation
in October 2014 (“merger”). The capital loss carry forward deferred
tax asset was fully recognized in the second quarter.
Noninterest Expense. Noninterest expense
increased $743,000, or 12.4%, to $6.8 million for the three months
ended December 31, 2017 compared to $6.0 million for the three
months ended December 31, 2016. Merger-related expenses increased
$356,000 due to the pending FWVB merger. Salaries and employee
benefits increased $333,000 primarily due to normal salary
increases, incentive compensation, retirement benefits expense and
employee stock options, partially offset by a decrease in employee
group health insurance expense. Equipment expense increased
$121,000 primarily due to equipment maintenance contracts and data
processing expense. The Federal Deposit Insurance Corporation
(“FDIC”) assessment expense increased $71,000 due to an
assessment factor increase by the FDIC in the computation of the
insurance assessment and average asset growth. Other noninterest
expense increased $70,000 primarily due to loan expenses, dues and
memberships, travel, meals and entertainment, overdraft and debit
card fraud losses and telephone expense. Bankcard processing
expense increased $18,000 due to increased debit card transactions
in the current quarter. Advertising expense increased $14,000 due
to the Bank’s current marketing initiatives. Other real estate
owned expense decreased $144,000 due to losses incurred from the
sales of other real estate owned properties in the prior period.
Occupancy decreased $62,000 primarily due to decreases in rent
expense and accelerated depreciation taken on leasehold
improvements in the Bank’s former operations center that did not
transfer over to the new Operations Center in the current quarter.
The new Operations Center was completed and placed into service
during the second quarter. Contracted services decreased $46,000
due to compensation consulting and a Pennsylvania state sales tax
refund as a result of a Bank initiated reverse audit in the prior
period.
Income Tax Expense. Income taxes
decreased $319,000 to $538,000 for the three months ended December
31, 2017 compared to $857,000 for the three months ended
December 31, 2016. The effective tax rate for the three months
ended December 31, 2017 was 28.1% compared to 29.8% for the
three months ended December 31, 2016. The decrease in income taxes
was due to decreases of $966,000 in pre-tax income and the $89,000
revaluation adjustment of net deferred tax liabilities due to the
current quarter enactment of new federal tax law titled “Tax Cuts
and Jobs Act of 2017” on December 22, 2017. The recent enacted tax
law also attributed to the decrease in the effective tax rate,
partially offset by the capital loss carry forward deferred tax
asset that has been fully recognized and the expiration of the low
income housing tax credit program in a prior quarter.
Annual Results
Net Interest Income. Net interest income
decreased $88,000 , or 0.3%, to remain constant at $29.1
million for the years ended December 31, 2017 and 2016.
Interest and dividend income increased $416,000,
or 1.3%, to $32.4 million for the year ended December 31,
2017 compared to $32.0 million for the year ended December 31,
2016. Interest income on taxable
securities increased $293,000 despite a decrease of
24 basis points in yield from new purchases with lower prevailing
yields. The average balance for taxable securities increased
$22.7 million for the year ended December 31, 2017. Interest income
on Federal funds sold increased $175,000 for the year ended
December 31, 2017. This is primarily the result of the end of the
historically low interest rates in the last year and the increases
in the average interest-earning balances of $17.7 million as a
result of deposit growth for the year ended December 31, 2017.
Other interest and dividend income increased $119,000
primarily due to increased interest earned with correspondent
deposit banks and FHLB dividends in the current period. Interest
income on securities exempt from federal tax decreased
$122,000 due to deploying proceeds from security calls and
maturities into purchasing taxable securities in the current year.
There was a decrease of $1.6 million in the average
balance on securities exempt from federal tax and a decrease of 33
basis points in yield as a result of security calls and maturities
that had higher yields. Interest income on loans decreased
$49,000 primarily due to accretion on the acquired loan portfolio
credit mark for the year ended December 31, 2017 of $762,000, or 11
basis points compared to $1.4 million, or 21 basis points for the
year ended December 31, 2016. There was an increase in average
loans outstanding of $9.2 million for the year ended December
31, 2017. The increase in average loans was mainly due to
commercial, indirect and line of credit loan originations in the
later part of the current period.
Interest expense increased $504,000, or 17.6%,
to $3.4 million for the year ended December 31, 2017 compared
to $2.9 million for the year ended December 31, 2016. Interest
expense on deposits increased $527,000 due to current
year rate increases and an increase in average interest-bearing
deposits of $40.4 million which we attribute primarily to time
deposits, interest-bearing demand deposits and savings accounts.
The average cost of interest-bearing deposits increased 6 basis
points. In addition, short-term
borrowings increased $9,000 in the current period due to
increased interest rates on securities sold under agreements to
repurchase. Interest expense on other borrowed
funds decreased $30,000 due to a decrease in long-term
borrowings as a result of a FHLB long-term borrowing for $3.5
million that matured in the current period.
Provision for Loan Losses. The provision
for loan losses decreased $170,000, to $1.9 million, for the
year ended December 31, 2017, of which $250,000 was attributed to
the acquired loan portfolio, compared to $2.0 million of
provision for loan losses for the year ended December 31, 2016, of
which $714,000 was attributed to the acquired loan portfolio. Net
charge-offs for the year ended December 31, 2017 were $877,000,
which included $616,000 of net charge-offs on automobile loans,
compared to net charge-offs of $727,000 for the year ended December
31, 2016, which included $578,000 of net charge-offs on automobile
loans. Management analyzes the loan portfolio on a quarterly basis
to determine the adequacy of the allowance for loan losses and the
need for an increase or reduction in provision for loan losses for
the year ended December 31, 2017. The decrease in provision is
mainly attributed to loan payoffs, stable credit quality and
reductions in qualitative factors, mainly offset by sizable loan
growth of $60.4 million in commercial loans and increased impaired
loans resulting in an average balance increase of approximately
$1.3 million in impaired loans for the year ended December 31, 2017
as compared to the year ended December 31, 2016. As the acquired
loan portfolio has loan payoffs, paydowns and accretion of the
credit mark, the need for additional provision may be required
based on our loan loss analysis.
Noninterest Income. Noninterest
income increased $438,000, or 5.9%, to $7.8 million
for the year ended December 31, 2017 compared to $7.4 million at
December 31, 2016. There was a $486,000 increase in insurance
commissions from Exchange Underwriters due to an increase in
commercial commission and fee income and additional contingency
fees received in the current period. Service fees on deposit
accounts increased $68,000 primarily due to increased NSF
fees due to customer overdrafts of deposit accounts and check card
fees. Net gains on purchased tax credits increased $57,000 due to
purchased Pennsylvania shares tax credits being recognized in the
current period. Net gains on the sales of
investments increased $31,000 due to the sale of equity
securities. These sales were transacted to recognize capital gains
that were offset by a capital loss carry forward deferred tax asset
that was acquired in the merger. The capital loss carry forward
deferred tax asset has been fully recognized in the current period.
There was a decrease in the net gains on sales of residential
mortgage loans of $201,000. The decrease in gains was
primarily due to a decrease in the number of loans originated and
subsequently sold to the FHLB as part of the Mortgage Partnership
Finance® (“MPF®”) program. The MPF® program enables member
financial institutions to offer competitive interest rates for
fixed-rate mortgage loans without assuming any of the interest rate
risk associated with a long-term asset. Income from bank-owned life
insurance decreased $14,000 due to lower crediting rates in the
current period. Other miscellaneous
income increased $7,000 due to the servicing income
received from mortgage loans sold to the FHLB as part of the MPF®
program.
Noninterest Expense. Noninterest
expense increased $1.4 million, or 5.9%,
to $25.2 million for the year ended December 31, 2017 compared
to $23.8 million for the year ended December 31, 2016.
Salaries and employee benefits increased $813,000,
primarily due to additional employees, normal salary increases,
incentive compensation, retirement benefits and employee stock
options. This was partially offset by decreases in employee group
health insurance and restricted stock awards expense.
Merger-related expenses increased $356,000 due to the pending FWVB
merger. Equipment and occupancy increased $180,000
and $160,000, respectively, primarily due to equipment
purchases and new maintenance contracts for the Operations Center.
Occupancy expenses were due to depreciation taken on the new
Operations Center during the current period. In addition, other
increases for occupancy were property and building contracted
services related to moving expenses, real estate taxes, property
insurance and utilities. Bankcard processing expense increased
$43,000 due to the increased number of automatic teller
transactions (“ATM”) in the current period. Pennsylvania shares
tax, which is calculated based on the Bank’s stockholders’
equity, increased $29,000 due to the increase in equity
that was calculated on the current year shares tax return.
Contracted services decreased $82,000 due to compensation
consulting, Pennsylvania state sales tax refund as a result of a
Bank initiated reverse audit and reclassification of core
processing expense to data processing. Legal and professional
fees decreased $69,000 due to the previously mentioned
mortgage insurance proceeds, in which part of the insurance
proceeds were utilized to offset legal fees attributed to the
problem loan relationship. Other real estate owned expense
was $349,000 of income in the current period compared
to $393,000 of income in the prior period resulting in an
increase of $44,000 in expense. This change is primarily due
to the $566,000 pre-tax gain recognized due to the foreclosure
procedures on two commercial real estate loans that moved into
other real estate owned properties in the first quarter of 2016. In
addition, there were losses incurred on the sales of other real
estate owned properties in the prior period. This was partially
offset due to the final resolutions of loan collection efforts
through the sale of a mineral rights interest for $186,000,
bankruptcy court settlement for $86,000 and mortgage insurance
proceeds for $85,000 in the current period. These items are
considered non-recurring. Other noninterest
expense decreased $40,000 primarily due to a decrease in
various miscellaneous expenses, such as other insurance, other
losses and non-employee restricted stock awards.
Advertising decreased $25,000 related to decreases in
print/media advertising and promotional items as a cost savings
initiative.
Income Tax Expense. Income taxes
decreased $238,000 to $2.9 million for the year ended December 31,
2017 compared to $3.1 million for the year ended December 31,
2016. The effective tax rate for the year ended December 31, 2017
was 29.3% compared to 29.1% for the year ended December 31, 2016.
The decrease in income taxes was primarily due to a decrease of
$874,000 in pre-tax income and the $89,000 revaluation adjustment
of net deferred tax liabilities due to the enactment of the new tax
law during the fourth quarter, partially offset by the expiration
of the low income housing tax credit program. The increase in the
effective tax rate was related to the decrease in tax exempt
income, the expiration of the low income housing tax credit program
and the capital loss carry forward deferred tax asset that has been
fully recognized, partially offset by the favorable tax preference
charitable donation of a former First Federal Savings Bank building
to the City of Monessen, Pennsylvania and the revaluation
adjustment of net deferred tax liabilities in the current
period.
STATEMENT OF FINANCIAL CONDITION REVIEW
Assets. Total assets increased $88.4
million, or 10.4%, to $934.5 million at December 31, 2017 compared
to $846.1 million at December 31, 2016.
Cash and due from banks increased $6.3 million, or 44.4%, to
$20.6 million at December 31, 2017 compared to $14.3 million at
December 31, 2016. This is primarily the result of deposit growth
in excess of loan demand.
Investment securities classified as available-for-sale increased
$17.4 million, or 16.4%, to $123.6 million at December 31, 2017
compared to $106.2 million at December 31, 2016. This increase was
primarily the result of new security purchases funded by deposit
growth.
Loans, net, increased $61.5 million, or 9.1%, to
$735.6 million at December 31, 2017 compared to $674.1 million at
December 31, 2016. This was primarily due to net loan originations
of $27.0 million on commercial and industrial loans, $25.5 million
on construction loans, $8.0 million on commercial real estate loans
and $1.9 million on residential mortgage loans.
Premises and equipment, net, increased $2.6 million,
or 18.3%, to $16.7 million at December 31, 2017 compared to
$14.1 million at December 31, 2016. This is due to the additions
related to the new Operations Center that was placed into service
in the second quarter. Total premises and equipment capitalized for
the new Operations Center totaled $5.3 million. In addition, there
was $250,000 in additions for fixed assets in process related to
the construction of the Corporate Center in the current period. The
Corporate Center building was previously taken into premise and
equipment from a previously defaulted loan relationship in the
first quarter of 2016.
Liabilities. Total liabilities increased
$84.6 million, or 11.2%, to $841.2 million at December 31, 2017
compared to $756.6 million at December 31, 2016.
Total deposits increased $75.1 million, or 10.8%, to $773.3
million at December 31, 2017 compared to $698.2 million at December
31, 2016. There were increases of $39.2 million in NOW accounts,
$23.1 million in demand deposits, $10.8 million in savings
accounts and $9.3 million in time deposits, partially offset by
decreases of $4.8 million in money market accounts and $2.5 million
in brokered deposits. Due to the rising interest rate environment,
the Bank has been selective on offering promotional interest rates
and has concentrated its efforts on increasing noninterest-bearing
accounts by building strong customer relationships. In addition,
school district and municipal deposits increased $33.0 million due
to building stronger customer relationships with these depositors
and new accounts.
Short-term borrowings increased $12.6 million, or 46.5%, to
$39.6 million at December 31, 2017 compared to $27.0 million at
December 31, 2016. At December 31, 2017, short-term borrowings were
comprised of $25.8 million of securities sold under agreements to
repurchase and $13.8 million of FHLB overnight borrowings compared
to $27.0 million of securities sold under agreement to repurchase
at December 31, 2016. The increase is related to loan originations
that exceeded available cash reserves near year-end, partially
offset by a decrease in business deposit customers whose funds,
above designated target balances, are transferred into an overnight
interest-earning investment account by purchasing securities from
the Bank’s investment portfolio under an agreement to repurchase.
Other borrowed funds decreased by $3.5 million due to a maturing
FHLB long-term borrowing that was retired in the current period. As
a result of current period activity, the weighted average interest
rate on long-term borrowings increased by 12 basis points to
1.92%.
Stockholders’ Equity. Stockholders’
equity increased $3.8 million, or 4.2%, to $93.3 million at
December 31, 2017 compared to $89.5 million at December 31, 2016.
During the period, net income was $6.9 million and the Company paid
$3.6 million in dividends to stockholders.
Non-GAAP Financial Measures
Non-GAAP financial measures, such as adjusted
net income and adjusted net income per diluted common share (EPS),
are presented to reflect the impact of one-time income tax expenses
recorded as a result of the revaluation adjustment of net deferred
tax liabilities due to enactment of the Tax Cuts and Jobs Act of
2017 which lowered the marginal corporate tax rate from 35% to
21%. Management believes that these Non-GAAP measures
will provide information useful to investors in understanding our
operating performance and trends, and to facilitate comparisons of
our financial results over different periods and with the
performance of other financial organizations. Management
uses these measures internally to assess and better understand our
underlying business performance and trends related to core business
activities. The Non-GAAP financial measures we use may differ from
the Non-GAAP financial measures other financial institutions use to
measure their performance and trends. Non-GAAP financial measures
should be viewed in addition to, and not as an alternative for, our
reported results prepared in accordance with GAAP. In the event of
disclosure or release of Non-GAAP financial measures, the
Securities and Exchange Commission's (SEC) Regulation G requires:
(1) the presentation of the most directly comparable financial
measure calculated and presented in accordance with GAAP and (2) a
reconciliation of the differences between the Non-GAAP financial
measure presented and the most directly comparable financial
measure calculated and presented in accordance with GAAP which are
included in the accompanying financial schedules.
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 16 offices in Greene, Allegheny, Washington, Fayette,
and Westmoreland Counties in southwestern Pennsylvania. 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. Financial highlights of the Company are
attached.
For more information about CB and Community Bank, visit our
website at www.communitybank.tv.
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,
changes in market interest rates, general economic conditions,
changes in federal and state regulation, actions by our
competitors, loan delinquency rates, our ability to control costs
and expenses, and other factors that may be described 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.
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SELECTED FINANCIAL
INFORMATION |
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(Unaudited) |
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(Dollars in thousands,
except share and per share data) |
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December 31, |
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December 31, |
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Selected Financial
Condition Data: |
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2017 |
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2016 |
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Total Assets |
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$ |
934,486 |
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$ |
846,075 |
|
|
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Cash and Cash
Equivalents |
|
|
20,622 |
|
|
|
14,282 |
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|
|
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Securities
Available-for-Sale |
|
|
123,583 |
|
|
|
106,208 |
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Loans |
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Real
Estate: |
|
|
|
|
|
|
|
|
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Residential |
|
|
273,438 |
|
|
|
271,588 |
|
|
|
|
|
Commercial |
|
|
209,037 |
|
|
|
201,010 |
|
|
|
|
|
Construction |
|
|
36,149 |
|
|
|
10,646 |
|
|
|
|
|
Commercial and Industrial |
|
|
107,835 |
|
|
|
80,812 |
|
|
|
|
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Consumer |
|
|
114,557 |
|
|
|
114,204 |
|
|
|
|
|
Other |
|
|
3,376 |
|
|
|
3,637 |
|
|
|
|
|
Total
Loans |
|
|
744,392 |
|
|
|
681,897 |
|
|
|
|
|
Allowance
for Loan Losses |
|
|
8,796 |
|
|
|
7,803 |
|
|
|
|
|
Loans,
Net |
|
|
735,596 |
|
|
|
674,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premises and Equipment,
Net |
|
|
16,712 |
|
|
|
14,132 |
|
|
|
|
|
Goodwill and Core
Deposit Intangible |
|
|
8,237 |
|
|
|
8,772 |
|
|
|
|
|
Deposits |
|
|
773,344 |
|
|
|
698,218 |
|
|
|
|
|
Borrowings |
|
|
64,105 |
|
|
|
55,027 |
|
|
|
|
|
Stockholders'
Equity |
|
|
93,256 |
|
|
|
89,469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
December 31, |
|
Selected Operations
Data: |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Interest and Dividend
Income |
|
$ |
8,481 |
|
|
$ |
8,262 |
|
$ |
32,434 |
|
|
$ |
32,018 |
|
|
Interest Expense |
|
|
904 |
|
|
|
757 |
|
|
3,374 |
|
|
|
2,870 |
|
|
Net Interest
Income |
|
|
7,577 |
|
|
|
7,505 |
|
|
29,060 |
|
|
|
29,148 |
|
|
Provision for Loan
Losses |
|
|
850 |
|
|
|
440 |
|
|
1,870 |
|
|
|
2,040 |
|
|
Net Interest Income
After Provision for Loan Losses |
|
|
6,727 |
|
|
|
7,065 |
|
|
27,190 |
|
|
|
27,108 |
|
|
Noninterest
Income: |
|
|
|
|
|
|
|
|
|
Service
Fees on Deposit Accounts |
|
|
643 |
|
|
|
603 |
|
|
2,482 |
|
|
|
2,414 |
|
|
Insurance
Commissions |
|
|
897 |
|
|
|
806 |
|
|
3,583 |
|
|
|
3,097 |
|
|
Other
Commissions |
|
|
116 |
|
|
|
107 |
|
|
452 |
|
|
|
448 |
|
|
Net Gains
on Sales of Loans |
|
|
69 |
|
|
|
100 |
|
|
458 |
|
|
|
659 |
|
|
Net Gains
on Sales of Investments |
|
|
67 |
|
|
|
88 |
|
|
199 |
|
|
|
168 |
|
|
Net Gains
on Purchased Tax Credits |
|
|
14 |
|
|
|
- |
|
|
57 |
|
|
|
- |
|
|
Income
from Bank-Owned Life Insurance |
|
|
116 |
|
|
|
116 |
|
|
464 |
|
|
|
478 |
|
|
Other |
|
|
18 |
|
|
|
5 |
|
|
105 |
|
|
|
98 |
|
|
Total
noninterest income |
|
|
1,940 |
|
|
|
1,825 |
|
|
7,800 |
|
|
|
7,362 |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense: |
|
|
|
|
|
|
|
|
|
Salaries
and Employee Benefits |
|
|
3,512 |
|
|
|
3,179 |
|
|
13,937 |
|
|
|
13,124 |
|
|
Occupancy |
|
|
476 |
|
|
|
538 |
|
|
2,154 |
|
|
|
1,994 |
|
|
Equipment |
|
|
543 |
|
|
|
422 |
|
|
1,919 |
|
|
|
1,739 |
|
|
FDIC
Assessment |
|
|
106 |
|
|
|
35 |
|
|
373 |
|
|
|
388 |
|
|
PA Shares
Tax |
|
|
187 |
|
|
|
177 |
|
|
749 |
|
|
|
720 |
|
|
Contracted Services |
|
|
129 |
|
|
|
175 |
|
|
537 |
|
|
|
619 |
|
|
Legal and
Professional Fees |
|
|
112 |
|
|
|
110 |
|
|
436 |
|
|
|
505 |
|
|
Advertising |
|
|
190 |
|
|
|
176 |
|
|
694 |
|
|
|
719 |
|
|
Bankcard
Processing Expense |
|
|
135 |
|
|
|
117 |
|
|
519 |
|
|
|
476 |
|
|
Other
Real Estate Owned (Income) Expense |
|
|
(6 |
) |
|
|
138 |
|
|
(349 |
) |
|
|
(393 |
) |
|
Amortization of Core Deposit Intangible |
|
|
134 |
|
|
|
134 |
|
|
535 |
|
|
|
535 |
|
|
Merger-Related |
|
|
356 |
|
|
|
- |
|
|
356 |
|
|
|
- |
|
|
Other |
|
|
880 |
|
|
|
810 |
|
|
3,312 |
|
|
|
3,352 |
|
|
Total
noninterest expense |
|
|
6,754 |
|
|
|
6,011 |
|
|
25,172 |
|
|
|
23,778 |
|
|
Income Before Income
Taxes |
|
|
1,913 |
|
|
|
2,879 |
|
|
9,818 |
|
|
|
10,692 |
|
|
Income Taxes |
|
|
538 |
|
|
|
857 |
|
|
2,874 |
|
|
|
3,112 |
|
|
Net Income |
|
$ |
1,375 |
|
|
$ |
2,022 |
|
$ |
6,944 |
|
|
$ |
7,580 |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Per
Share |
|
$ |
0.22 |
|
|
$ |
0.22 |
|
$ |
0.88 |
|
|
$ |
0.88 |
|
|
Earnings Per Share -
Basic |
|
|
0.34 |
|
|
|
0.50 |
|
|
1.70 |
|
|
|
1.86 |
|
|
Earnings Per Share -
Diluted |
|
|
0.33 |
|
|
|
0.49 |
|
|
1.69 |
|
|
|
1.86 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding - Basic |
|
|
4,089,404 |
|
|
|
4,081,931 |
|
|
4,088,191 |
|
|
|
4,081,247 |
|
|
Weighted Average Shares
Outstanding - Diluted |
|
|
4,126,155 |
|
|
|
4,090,535 |
|
|
4,110,372 |
|
|
|
4,086,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
December 31, |
|
December 31, |
|
Selected Financial
Ratios(1): |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Return on Average
Assets |
|
|
0.59 |
|
% |
|
0.95 |
% |
|
0.78 |
|
% |
|
0.91 |
|
% |
Return on Average
Equity |
|
|
5.81 |
|
|
|
8.92 |
|
|
7.53 |
|
|
|
8.48 |
|
|
Average
Interest-Earning Assets to Average Interest-Bearing
Liabilities |
|
|
134.33 |
|
|
|
134.38 |
|
|
134.88 |
|
|
|
135.12 |
|
|
Average Equity to
Average Assets |
|
|
10.20 |
|
|
|
10.71 |
|
|
10.40 |
|
|
|
10.71 |
|
|
Net Interest Rate
Spread |
|
|
3.44 |
|
|
|
3.73 |
|
|
3.44 |
|
|
|
3.68 |
|
|
Net Interest
Margin |
|
|
3.59 |
|
|
|
3.87 |
|
|
3.58 |
|
|
|
3.82 |
|
|
Net Charge-Offs to
Average Loans |
|
|
0.12 |
|
|
|
0.06 |
|
|
0.13 |
|
|
|
0.11 |
|
|
Efficiency Ratio |
|
|
70.97 |
|
|
|
64.43 |
|
|
68.29 |
|
|
|
65.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
Allowance For Loan
Losses to Total Loans (2) |
|
|
1.18 |
|
% |
|
1.14 |
% |
|
|
|
|
Allowance For Loan
Losses to Nonperforming Loans (2) (6) |
|
|
121.31 |
|
|
|
92.60 |
|
|
|
|
|
Allowance For Loan
Losses to Noncurrent Loans (2) (7) |
|
|
215.17 |
|
|
|
164.62 |
|
|
|
|
|
Allowance For Loan
Losses and Accrued Credit Mark to Total Loans (3) |
|
|
1.34 |
|
|
|
1.38 |
|
|
|
|
|
Allowance For Loan
Losses and Accrued Credit Mark to Nonperforming Loans (3) (6) |
|
|
137.24 |
|
|
|
112.06 |
|
|
|
|
|
Allowance For Loan
Losses and Accrued Credit Mark to Noncurrent Loans (3) (7) |
|
|
243.42 |
|
|
|
199.22 |
|
|
|
|
|
Nonperforming Loans to
Total Loans (6) |
|
|
0.97 |
|
|
|
1.24 |
|
|
|
|
|
Noncurrent Loans to
Total Loans (7) |
|
|
0.55 |
|
|
|
0.70 |
|
|
|
|
|
Nonperforming Assets to
Total Assets |
|
|
0.81 |
|
|
|
1.02 |
|
|
|
|
|
Common Equity Tier 1
Capital (to Risk Weighted Assets) (4) |
|
|
12.22 |
|
|
|
13.38 |
|
|
|
|
|
Tier 1 Capital (to Risk
Weighted Assets) (4) |
|
|
12.22 |
|
|
|
13.38 |
|
|
|
|
|
Total Capital (to Risk
Weighted Assets) (4) |
|
|
13.47 |
|
|
|
14.63 |
|
|
|
|
|
Tier 1 Leverage (to
Adjusted Total Assets) (4) |
|
|
9.27 |
|
|
|
9.80 |
|
|
|
|
|
Common Equity Tier 1
Capital (to Risk Weighted Assets) (5) |
|
|
12.62 |
|
|
|
13.72 |
|
|
|
|
|
Tier 1 Capital (to Risk
Weighted Assets) (5) |
|
|
12.62 |
|
|
|
13.72 |
|
|
|
|
|
Total Capital (to Risk
Weighted Assets) (5) |
|
|
13.89 |
|
|
|
14.99 |
|
|
|
|
|
Tier 1 Leverage (to
Adjusted Total Assets) (5) |
|
|
9.58 |
|
|
|
10.07 |
|
|
|
|
|
Book Value Per
Share |
|
$ |
22.77 |
|
|
$ |
21.89 |
|
|
|
|
|
Outstanding Shares |
|
|
4,095,957 |
|
|
|
4,086,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Interim period ratios are calculated on an annualized basis. |
(2) Loans
acquired in connection with the merger with FedFirst Financial
Corporation were recorded at their estimated fair value at the
acquisition date and did not include a carryover of the
pre-merger allowance for loan losses. |
(3)
Accrued credit mark for loans acquired at fair market value in
connection with the merger with FedFirst Financial Corporation has
been included in the calculation of the ratios. |
(4)
Capital ratios are for Community Bank only. |
(5)
Capital ratios are for CB Financial Services, Inc. |
(6)
Nonperforming loans consist of nonaccrual loans, accruing loans
that are 90 days or more past due and troubled debt restructured
loans. |
(7)
Noncurrent loans consist of nonaccrual loans and accruing loans
that are 90 days or more past due. |
|
|
|
|
|
|
|
|
|
|
Note: |
Certain
items previously reported may have been reclassified to conform
with the current reporting period’s format. |
|
|
AVERAGE BALANCES AND YIELDS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables present information regarding
average balances of assets and liabilities, the total dollar
amounts of interest income and dividends from average
interest-earning assets, the total dollar amounts of interest
expense on average interest-bearing liabilities, and the resulting
average yields and costs. Average balances are derived from daily
balances over the periods indicated. The yields set forth below
include the effect of deferred fees, discounts, and premiums that
are amortized or accreted to interest income or interest expense.
Tax-equivalent yield adjustments have been made for tax exempt loan
and securities income utilizing a marginal federal tax rate of 34%.
As such, amounts will not agree to income as reported in the
consolidated financial statements. Average balances for loans are
net of the allowance for loan losses, and include nonaccrual loans.
The yields and costs for the periods indicated are derived by
dividing income or expense by the average balances of assets or
liabilities, respectively, for the periods presented. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in thousands) (Unaudited) |
|
|
|
|
Three Months Ended December 31, |
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
Average |
|
and |
|
Yield/ |
|
Average |
|
and |
|
Yield/ |
|
|
|
|
Balance |
|
Dividends |
|
Cost (4) |
|
Balance |
|
Dividends |
|
Cost (4) |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans,
Net |
$ |
704,139 |
|
$ |
7,785 |
|
4.39 |
% |
|
$ |
668,951 |
|
$ |
7,688 |
|
4.57 |
% |
|
Investment
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
81,204 |
|
|
398 |
|
1.96 |
|
|
|
68,074 |
|
|
320 |
|
1.88 |
|
|
|
Exempt From
Federal Tax |
|
38,176 |
|
|
335 |
|
3.51 |
|
|
|
36,345 |
|
|
337 |
|
3.71 |
|
|
Other
Interest-Earning Assets |
|
36,158 |
|
|
159 |
|
1.74 |
|
|
|
12,275 |
|
|
52 |
|
1.69 |
|
|
|
Total
Interest-Earning Assets |
|
859,677 |
|
|
8,677 |
|
4.00 |
|
|
|
785,645 |
|
|
8,397 |
|
4.25 |
|
Noninterest-Earning Assets |
|
60,908 |
|
|
|
|
|
|
|
56,724 |
|
|
|
|
|
|
|
Total
Assets |
$ |
920,585 |
|
|
|
|
|
|
$ |
842,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Demand Deposits |
$ |
150,257 |
|
|
103 |
|
0.27 |
% |
|
$ |
112,339 |
|
|
58 |
|
0.21 |
% |
|
Savings |
|
131,434 |
|
|
61 |
|
0.18 |
|
|
|
121,612 |
|
|
56 |
|
0.18 |
|
|
Money
Market |
|
141,381 |
|
|
100 |
|
0.28 |
|
|
|
146,098 |
|
|
94 |
|
0.26 |
|
|
Time
Deposits |
|
164,791 |
|
|
497 |
|
1.20 |
|
|
|
147,363 |
|
|
398 |
|
1.07 |
|
|
|
Total
Interest-Bearing Deposits |
|
587,863 |
|
|
761 |
|
0.51 |
|
|
|
527,412 |
|
|
606 |
|
0.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
52,110 |
|
|
143 |
|
1.09 |
|
|
|
57,244 |
|
|
151 |
|
1.05 |
|
|
|
Total
Interest-Bearing Liabilities |
|
639,973 |
|
|
904 |
|
0.56 |
|
|
|
584,656 |
|
|
757 |
|
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-Bearing Demand Deposits |
|
182,617 |
|
|
|
|
|
|
|
163,717 |
|
|
|
|
|
Other
Liabilities |
|
4,056 |
|
|
|
|
|
|
|
3,789 |
|
|
|
|
|
|
|
Total
Liabilities |
|
826,646 |
|
|
|
|
|
|
|
752,162 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
93,939 |
|
|
|
|
|
|
|
90,207 |
|
|
|
|
|
|
|
Total
Liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity |
$ |
920,585 |
|
|
|
|
|
|
$ |
842,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Interest Income |
|
|
$ |
7,773 |
|
|
|
|
|
|
$ |
7,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Interest Rate Spread (1) |
|
|
|
|
3.44 |
% |
|
|
|
|
|
3.73 |
% |
Net
Interest-Earning Assets (2) |
$ |
219,704 |
|
|
|
|
|
|
$ |
200,989 |
|
|
|
|
|
Net
Interest Margin (3) |
|
|
|
|
3.59 |
|
|
|
|
|
|
3.87 |
|
Return on
Average Assets |
|
|
|
|
0.59 |
|
|
|
|
|
|
0.95 |
|
Return on
Average Equity |
|
|
|
|
5.81 |
|
|
|
|
|
|
8.92 |
|
Average
Equity to Average Assets |
|
|
|
|
10.20 |
|
|
|
|
|
|
10.71 |
|
Average
Interest-Earning Assets to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Interest-Bearing Liabilities |
|
|
|
|
134.33 |
|
|
|
|
|
|
134.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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. |
(2) Net
interest-earning assets represent total interest-earning assets
less total interest-bearing liabilities. |
(3) Net
interest margin represents net interest income divided by average
total interest-earning assets. |
(4)
Annualized. |
|
|
|
|
(Dollars in thousands) (Unaudited) |
|
|
|
|
Year Ended December 31, |
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
|
Average |
|
and |
|
Yield/ |
|
Average |
|
and |
|
Yield/ |
|
|
|
|
Balance |
|
Dividends |
|
Cost |
|
Balance |
|
Dividends |
|
Cost |
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans,
Net |
$ |
681,539 |
|
$ |
29,680 |
|
4.35 |
% |
|
$ |
672,321 |
|
$ |
29,685 |
|
4.42 |
% |
|
Investment
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
79,878 |
|
|
1,531 |
|
1.92 |
|
|
|
57,224 |
|
|
1,238 |
|
2.16 |
|
|
|
Exempt From
Federal Tax |
|
36,681 |
|
|
1,324 |
|
3.61 |
|
|
|
38,259 |
|
|
1,509 |
|
3.94 |
|
|
Other
Interest-Earning Assets |
|
29,789 |
|
|
484 |
|
1.62 |
|
|
|
11,720 |
|
|
190 |
|
1.62 |
|
|
|
Total
Interest-Earning Assets |
|
827,887 |
|
|
33,019 |
|
3.99 |
|
|
|
779,524 |
|
|
32,622 |
|
4.18 |
|
Noninterest-Earning Assets |
|
59,263 |
|
|
|
|
|
|
|
54,540 |
|
|
|
|
|
|
|
Total
Assets |
$ |
887,150 |
|
|
|
|
|
|
$ |
834,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-Bearing Demand Deposits |
$ |
133,412 |
|
|
342 |
|
0.26 |
% |
|
$ |
114,301 |
|
|
204 |
|
0.18 |
% |
|
Savings |
|
129,301 |
|
|
238 |
|
0.18 |
|
|
|
122,710 |
|
|
225 |
|
0.18 |
|
|
Money
Market |
|
138,782 |
|
|
369 |
|
0.27 |
|
|
|
143,644 |
|
|
362 |
|
0.25 |
|
|
Time
Deposits |
|
160,634 |
|
|
1,862 |
|
1.16 |
|
|
|
141,040 |
|
|
1,493 |
|
1.06 |
|
|
|
Total
Interest-Bearing Deposits |
|
562,129 |
|
|
2,811 |
|
0.50 |
|
|
|
521,695 |
|
|
2,284 |
|
0.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings |
|
51,658 |
|
|
563 |
|
1.09 |
|
|
|
55,214 |
|
|
586 |
|
1.06 |
|
|
|
Total
Interest-Bearing Liabilities |
|
613,787 |
|
|
3,374 |
|
0.55 |
|
|
|
576,909 |
|
|
2,870 |
|
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-Bearing Demand Deposits |
|
177,220 |
|
|
|
|
|
|
|
163,790 |
|
|
|
|
|
Other
Liabilities |
|
3,880 |
|
|
|
|
|
|
|
4,014 |
|
|
|
|
|
|
|
Total
Liabilities |
|
794,887 |
|
|
|
|
|
|
|
744,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
92,263 |
|
|
|
|
|
|
|
89,351 |
|
|
|
|
|
|
|
Total
Liabilities and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity |
$ |
887,150 |
|
|
|
|
|
|
$ |
834,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Interest Income |
|
|
$ |
29,645 |
|
|
|
|
|
|
$ |
29,752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Interest Rate Spread (1) |
|
|
|
|
3.44 |
% |
|
|
|
|
|
3.68 |
% |
Net
Interest-Earning Assets (2) |
$ |
214,100 |
|
|
|
|
|
|
$ |
202,615 |
|
|
|
|
|
Net
Interest Margin (3) |
|
|
|
|
3.58 |
|
|
|
|
|
|
3.82 |
|
Return on
Average Assets |
|
|
|
|
0.78 |
|
|
|
|
|
|
0.91 |
|
Return on
Average Equity |
|
|
|
|
7.53 |
|
|
|
|
|
|
8.48 |
|
Average
Equity to Average Assets |
|
|
|
|
10.40 |
|
|
|
|
|
|
10.71 |
|
Average
Interest-Earning Assets to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Interest-Bearing Liabilities |
|
|
|
|
134.88 |
|
|
|
|
|
|
135.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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. |
(2) Net
interest-earning assets represent total interest-earning assets
less total interest-bearing liabilities. |
(3) Net
interest margin represents net interest income divided by average
total interest-earning assets. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 TAX CUTS AND JOBS ACT IMPACT |
|
|
|
|
|
The Tax Cuts and Jobs Act of 2017 was enacted into law
on December 22, 2017. This was the first major overhaul of the
federal tax code in approximately 30 years. Based on the enacted
tax legislation, deferred tax positions were in need of a
revaluation adjustment due to the marginal corporate tax rate
decrease from 35% to 21%. According to the tax law, below is a
schedule that reconciles (Non-GAAP) net income and EPS to (GAAP)
net income and EPS. |
|
|
|
December 31, 2017 |
|
|
Quarter Ended |
|
Year-Ended |
|
|
|
|
|
Adjusted net income
excluding impact of |
|
|
|
|
tax law (Non-GAAP) |
|
$ |
1,286 |
|
$ |
6,855 |
|
|
|
|
|
Revaluation adjustment
to net deferred |
|
|
|
|
tax liability
position |
|
|
89 |
|
|
89 |
|
|
|
|
|
Net Income (GAAP) |
|
$ |
1,375 |
|
$ |
6,944 |
|
|
|
|
|
Adjusted Diluted EPS
excluding impact of tax law |
|
|
|
|
(Non-GAAP) |
|
$ |
0.31 |
|
$ |
1.67 |
|
|
|
|
|
Effect of tax law on
Diluted EPS calculation |
|
|
0.02 |
|
|
0.02 |
|
|
|
|
|
Diluted EPS (GAAP) |
|
$ |
0.33 |
|
$ |
1.69 |
|
|
|
|
|
Contact:
Barron P. McCune, Jr.
Vice Chairman and Chief Executive Officer
Phone: (724) 225-2400
Fax: (724) 225-4903
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