CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM:
CBFV), the holding company of Community Bank (the “Bank”), today
announced its third quarter and year-to-date 2024 financial
results.
Three Months Ended
Nine Months Ended
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
9/30/24
9/30/23
(Dollars in thousands, except per share
data) (Unaudited)
Net Income (GAAP)
$
3,219
$
2,650
$
4,196
$
12,966
$
2,672
$
10,065
$
9,586
Net Income Adjustments
(293
)
24
(1,000
)
(9,905
)
29
(1,269
)
(20
)
Adjusted Net Income (Non-GAAP) (1)
$
2,926
$
2,674
$
3,196
$
3,061
$
2,701
$
8,796
$
9,566
Earnings per Common Share - Diluted
(GAAP)
$
0.60
$
0.51
$
0.82
$
2.52
$
0.52
$
1.89
$
1.87
Adjusted Earnings per Common Share -
Diluted (Non-GAAP) (1)
$
0.55
$
0.52
$
0.62
$
0.60
$
0.53
$
1.65
$
1.87
(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 Third Quarter Financial
Highlights
(Comparisons to three months ended September 30, 2023 unless
otherwise noted)
- Net income was $3.2 million, compared to $2.7 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.
- Earnings per diluted common share (EPS) increased to $0.60 from
$0.52.
- Return on average assets (annualized) was 0.84%, compared to
0.75%.
- Return on average equity (annualized) was 8.80%, compared to
9.03%.
- Net interest and dividend income was $11.5 million, compared to
$10.7 million.
- Noninterest income decreased to $1.2 million, compared to $2.4
million. The significant decrease in noninterest income was driven
by a $1.4 million decrease in insurance commissions due to the sale
of EU.
- Noninterest expense decreased to $8.8 million, compared to $9.5
million, due to decreases in compensation and benefits and
intangible amortization expenses also driven by the sale of EU,
partially offset by increases in contracted services, data
processing, occupancy and Pennsylvania shares tax expenses.
(Amounts at September 30, 2024; comparisons to December 31,
2023, unless otherwise noted)
- Total assets increased $105.7 million, or 7.3%, to $1.6 billion
from $1.5 billion.
- Total loans decreased $44.6 million, or 4.0%, to $1.07 billion
compared to $1.11 billion, and included decreases in consumer,
residential real estate, commercial real estate and commercial and
industrial loans of $31.6 million, $8.9 million, $2.8 million and
$2.7 million, 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 $31.8 million decrease in indirect automobile loans,
total loans decreased $12.8 million, or 1.2%. In total, $95.5
million of loans have paid off since December 31, 2023.
- Nonperforming loans to total loans was 0.19% at September 30,
2024, compared to 0.20% at December 31, 2023.
- Total deposits were $1.35 billion, an increase of $86.7
million, compared to $1.27 billion.
- Book value per share was $29.07, compared to $27.79 as of June
30, 2024 and $27.32 as of December 31, 2023.
- Tangible book value per share (Non-GAAP) was $27.16, compared
to $25.83 as of June 30, 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 $10.1
million and a $2.8 million decrease in accumulated other
comprehensive loss, partially offset by the payment of $3.9 million
in dividends since December 31, 2023.
Management Commentary
President and CEO John H. Montgomery commented, “Funding costs
continued to increase from the prior period, maintaining pressure
on our net interest margin. However, relief from this ongoing trend
appears to be on the horizon with prevailing market deposit costs
beginning to soften. Our balance sheet strategies and continued
focus on quality, relationship-driven loan production continue to
strengthen the fundamentals of our bank.
During the quarter, our loan portfolio decreased $12.9 million,
or 1.2%, with the previously exited Indirect Lending Portfolio
declining $10.4 million. Commercial real estate loans increased
$5.6 million, while residential real estate loans declined $3.8
million, results that are consistent with the purposeful
repositioning of our loan portfolio. Notably, our asset quality
remains robust, with nonperforming loans remaining stable at $2.0
million (0.19% of total loans) from $2.2 million (0.20% of total
loans) at year end 2023.
Overall, deposit movements continued during the quarter,
shifting from non-interest and low 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 our Specialty Treasury Payments &
Services strategy. This strategy includes development of a platform
that will provide Treasury Management payments, products and an
exceptional client experience to our traditional Commercial
Treasury Clients and Multiple Deposit Niche markets. This targeted
Specialized Treasury Management program will allow us to enter into
new markets with a proven and differentiated approach, focusing on
specific industries that are deposit rich, need high levels of
service, and require access to highly efficient money movement
systems.
Additionally, we completed the construction and celebrated the
opening of a state-of-the-art branch office in Uniontown, PA,
continuing the service we have provided to Fayette County for many
decades.
We are confident that sustained investment in our franchise,
unwavering commitment to our long-term strategy, and dedication to
providing an exceptional client experience will benefit all
stakeholders.”
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
November 29, 2024, to stockholders of record as of the close of
business on November 15, 2024.
2024 Third Quarter Financial
Review
Net Interest and Dividend
Income
Net interest and dividend income increased $757,000, or 7.1%, to
$11.5 million for the three months ended September 30, 2024
compared to $10.7 million for the three months ended September 30,
2023.
- Net Interest Margin (NIM) (GAAP) decreased to 3.11% for the
three months ended September 30, 2024 compared to 3.13% for the
three months ended September 30, 2023. Fully tax equivalent (FTE)
NIM (Non-GAAP) decreased 2 basis points (“bps”) to 3.12% for the
three months ended September 30, 2024 compared to 3.14% for the
three months ended September 30, 2023.
- Interest and dividend income increased $3.9 million, or 24.6%,
to $19.8 million for the three months ended September 30, 2024
compared to $15.9 million for the three months ended September 30,
2023.
- Interest income on loans increased $896,000, or 6.4%, to $14.9
million for the three months ended September 30, 2024 compared to
$14.0 million for the three months ended September 30, 2023. The
average yield on loans increased 47 bps to 5.60% compared to 5.13%
resulting in a $1.3 million increase in interest income on loans.
The average balance of loans decreased $24.7 million to $1.06
billion from $1.09 billion, causing a $357,000 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 $2.3
million, or 249.9%, to $3.3 million for the three months ended
September 30, 2024 compared to $940,000 for the three months ended
September 30, 2023 driven by a 272 bp increase in average yield
coupled with a $83.4 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 $99.9 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 $698,000 to $1.4 million for the three months ended
September 30, 2024 compared to $750,000 for the three months ended
September 30, 2023 driven by a $58.7 million increase in average
balances, partially offset by a 51 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 $3.1 million, or 60.9%, to $8.3
million for the three months ended September 30, 2024 compared to
$5.2 million for the three months ended September 30, 2023.
- Interest expense on deposits increased $3.1 million, or 66.1%,
to $7.9 million for the three months ended September 30, 2024
compared to $4.8 million for the three months ended September 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 93
bp, or 46.3%, increase in the average cost of interest-bearing
deposits compared to the three months ended September 30, 2023.
This accounted for a $2.4 million increase in interest expense.
Additionally, interest-bearing deposit balances increased $130.0
million, or 13.9%, to $1.1 billion as of September 30, 2024
compared to $937.8 million as of September 30, 2023, accounting for
a $716,000 increase in interest expense.
Provision for Credit Losses
The provision for credit losses recorded for the three months
ended September 30, 2024 was a net recovery of $41,000. The
provision for credit losses - loans was $25,000 and was primarily
due to changes in qualitative factors partially offset by changes
in loan portfolio concentrations and an improvement in loss rates.
The provision for credit losses - unfunded commitments was a
recovery of $66,000 and was due to a decrease in the unfunded
commitments and in the loss rate on construction loans. This
compared to a $406,000 provision for credit losses recorded for the
three months ended September 30, 2023 and was required primarily
due to loan growth coupled with a modeled slowdown in loan
prepayment speeds.
Noninterest Income
Noninterest income decreased $1.2 million, or 48.9%, to $1.2
million for the three months ended September 30, 2024, compared to
$2.4 million for the three months ended September 30, 2023. This
decrease resulted primarily from a $1.4 million decrease in
insurance commissions as no income was recognized for the three
months ended September 30, 2024 due to the December 2023 sale of
EU, compared to a full quarter of income recognized for the three
months ended September 30, 2023.
Noninterest Expense
Noninterest expense decreased $705,000, or 7.4%, to $8.8 million
for the three months ended September 30, 2024 compared to $9.5
million for the three months ended September 30, 2023. Salaries and
benefits decreased $808,000, or 15.0%, to $4.6 million primarily
due to no expense related to EU recognized for the three months
ended September 30, 2024 due to the December 2023 sale, compared to
$878,000 of expense recognized for the three months ended September
30, 2023, partially offset by merit increases and revenue producing
staff additions. Intangible amortization decreased $181,000 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 September 30, 2023. Data
processing expense increased $58,000 due to costs associated with
the implementation of a new loan origination system and financial
dashboard platform. Occupancy expense increased $57,000 due to
$130,000 of environmental remediation costs related to a
construction project on one of the Bank’s office locations,
partially offset by $44,000 of EU occupancy expense realized during
the three months ended September 30, 2023. Pennsylvania shares tax
expense increased $48,000 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 $105.7 million, or 7.3%, to $1.6 billion
at September 30, 2024, compared to $1.5 billion at December 31,
2023.
- Cash and due from banks increased $79.1 million, or 115.9%, to
$147.3 million at September 30, 2024, compared to $68.2 million at
December 31, 2023.
- Securities increased $63.8 million, or 30.8%, to $270.9 million
at September 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 $10.7
million of principal repayments on amortizing securities.
Loans and Credit Quality
- Total loans decreased $44.6 million, or 4.0%, to $1.07 billion
at September 30, 2024 compared to $1.11 billion at December 31,
2023. This was driven by decreases in consumer, residential real
estate, commercial real estate and commercial and industrial loans
of $31.6 million, $8.9 million, $2.8 million and $2.7 million,
respectively, partially offset by increases in other loans and
construction loans of $1.0 million and $399,000, 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, $95.5 million of loans have paid off
since December 31, 2023.
- The allowance for credit losses (ACL) was $9.5 million at
September 30, 2024 and $9.7 million at December 31, 2023. As a
result, the ACL to total loans was 0.89% at September 30, 2024 and
0.87% at December 31, 2023. During the current year, the Company
recorded a net recovery of credit losses of $114,000.
- Net charge-offs for the three months ended September 30, 2024
were $73,000, or 0.03% of average loans on an annualized basis. Net
charge-offs for the three months ended September 30, 2023 were
$109,000, or 0.04% of average loans on an annualized basis. Net
charge-offs for the nine months ended September 30, 2024 were
$123,000. Net recoveries for the nine months ended September 30,
2023 were $551,000 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 $2.0 million at
September 30, 2024 and $2.2 million at December 31, 2023.
Nonperforming loans to total loans ratio was 0.19% at September 30,
2024 and 0.20% at December 31, 2023.
Other
- Accrued interest and other assets increased $7.8 million or
32.1%, to $32.1 million at September 30, 2024, compared to $24.3
million at December 31, 2023 due primarily to a $6.0 million
investment in a low-income housing tax credit project.
Total liabilities increased $96.3 million, or 7.3%, to $1.4
billion at September 30, 2024 compared to $1.3 billion at December
31, 2023.
Deposits
- Total deposits increased $86.7 million to $1.35 billion as of
September 30, 2024 compared to $1.27 billion at December 31, 2023.
Time deposits increased $136.5 million and money market deposits
increased $19.7 million while interest-bearing demand, savings and
non interest-bearing demand deposits decreased $36.5 million, $22.3
million and $10.7 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 $70.6 million of
brokered certificates of deposit during the period. Brokered
certificates of deposit totaled $99.6 million as of September 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 September 30, 2024, FDIC insured
deposits totaled approximately 62.4% of total deposits while an
additional 15.9% of total deposits were collateralized with
investment securities.
Accrued Interest Payable and Other
Liabilities
- Accrued interest payable and other liabilities increased $9.7
million, or 67.3%, to $24.1 million at September 30, 2024, compared
to $14.4 million at December 31, 2023 primarily due to the purchase
of $6.0 million of syndicated loans which were unfunded at the end
of the period and a $5.4 million unfunded commitment related to a
low-income housing tax credit project.
Stockholders’ Equity
Stockholders’ equity increased $9.3 million, or 6.7%, to $149.1
million at September 30, 2024, compared to $139.8 million at
December 31, 2023. The key factor positively impacting
stockholders’ equity was $10.1 million of net income for the
current period and a $2.8 million decrease in accumulated other
comprehensive loss, partially offset by the payment of $3.9 million
in dividends since December 31, 2023.
Book value per share
Book value per common share was $29.07 at September 30, 2024
compared to $27.32 at December 31, 2023, an increase of $1.75.
Tangible book value per common share (Non-GAAP) was $27.16 at
September 30, 2024, compared to $25.23 at December 31, 2023, an
increase of $1.93.
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
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
Assets
Cash and Due From Banks
$
147,325
$
142,600
$
73,691
$
68,223
$
52,597
Securities
270,881
268,769
232,276
207,095
172,904
Loans Held for Sale
428
632
200
—
—
Loans
Real Estate:
Residential
338,926
342,689
346,938
347,808
346,485
Commercial
464,354
458,724
470,430
467,154
466,910
Construction
43,515
44,038
44,323
43,116
41,874
Commercial and Industrial
108,554
112,395
103,313
111,278
100,873
Consumer
80,004
90,357
100,576
111,643
122,516
Other
30,402
30,491
30,763
29,397
23,856
Total Loans
1,065,755
1,078,694
1,096,343
1,110,396
1,102,514
Allowance for Credit Losses
(9,479
)
(9,527
)
(9,582
)
(9,707
)
(10,848
)
Loans, Net
1,056,276
1,069,167
1,086,761
1,100,689
1,091,666
Premises and Equipment, Net
20,838
20,326
19,548
19,704
18,524
Bank-Owned Life Insurance
24,057
23,910
23,763
25,378
25,227
Goodwill
9,732
9,732
9,732
9,732
9,732
Intangible Assets, Net
88
353
617
958
2,177
Accrued Interest Receivable and Other
Assets
32,116
24,770
26,501
24,312
26,665
Total Assets
$
1,561,741
$
1,560,259
$
1,473,089
$
1,456,091
$
1,399,492
Liabilities
Deposits
Noninterest-Bearing Demand Accounts
$
267,022
$
269,964
$
275,182
$
277,747
$
305,145
Interest-Bearing Demand Accounts
326,505
324,688
323,134
362,994
357,381
Money Market Accounts
220,789
229,998
208,375
201,074
189,187
Savings Accounts
172,354
179,081
190,206
194,703
207,148
Time Deposits
367,150
346,037
265,597
230,641
177,428
Total Deposits
1,353,820
1,349,768
1,262,494
1,267,159
1,236,289
Other Borrowings
34,708
34,698
34,688
34,678
34,668
Accrued Interest Payable and Other
Liabilities
24,073
32,911
34,317
14,420
13,689
Total Liabilities
1,412,601
1,417,377
1,331,499
1,316,257
1,284,646
Stockholders’ Equity
149,140
142,882
141,590
139,834
114,846
Total Liabilities and Stockholders’
Equity
$
1,561,741
$
1,560,259
$
1,473,089
$
1,456,091
$
1,399,492
(Dollars in thousands, except share and
per share data) (Unaudited)
Three Months Ended
Nine Months Ended
Selected Operating Data
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
9/30/24
9/30/23
Interest and Dividend Income:
Loans, Including Fees
$
14,945
$
14,670
$
14,838
$
14,804
$
14,049
$
44,453
$
39,846
Securities:
Taxable
3,289
2,844
2,303
1,164
940
8,437
2,853
Tax-Exempt
—
—
—
33
41
—
124
Dividends
28
27
27
32
25
82
74
Other Interest and Dividend Income
1,511
1,398
818
872
819
3,727
2,424
Total Interest and Dividend Income
19,773
18,939
17,986
16,905
15,874
56,699
45,321
Interest Expense:
Deposits
7,892
7,065
5,991
5,336
4,750
20,948
11,097
Short-Term Borrowings
—
—
—
26
—
—
5
Other Borrowings
407
404
404
407
407
1,215
800
Total Interest Expense
8,299
7,469
6,395
5,769
5,157
22,163
11,902
Net Interest and Dividend Income
11,474
11,470
11,591
11,136
10,717
34,536
33,419
Provision (Recovery) for Credit Losses -
Loans
25
12
(143
)
(1,147
)
291
(105
)
863
(Recovery) Provision for Credit Losses -
Unfunded Commitments
(66
)
(48
)
106
(273
)
115
(9
)
54
Net Interest and Dividend Income After Net
(Recovery) Provision for Credit Losses
11,515
11,506
11,628
12,556
10,311
34,650
32,502
Noninterest Income:
Service Fees
451
354
415
460
466
1,220
1,359
Insurance Commissions
1
1
2
969
1,436
4
4,870
Other Commissions
104
22
62
60
94
188
462
Net Gain (Loss) on Sales of Loans
18
9
22
2
—
49
(3
)
Net Gain (Loss) on Securities
245
(31
)
(166
)
(9,830
)
(37
)
49
(369
)
Net Gain on Purchased Tax Credits
12
12
12
7
7
37
22
Gain on Sale of Subsidiary
138
—
—
24,578
—
138
—
Net Gain on Disposal of Premises and
Equipment
—
—
274
—
—
274
11
Income from Bank-Owned Life Insurance
147
147
148
151
145
442
425
Net Gain on Bank-Owned Life Insurance
Claims
—
—
915
—
—
915
303
Other Income
117
174
232
121
301
523
413
Total Noninterest Income
1,233
688
1,916
16,518
2,412
3,839
7,493
Noninterest Expense:
Salaries and Employee Benefits
4,561
4,425
4,576
6,224
5,369
13,563
15,679
Occupancy
755
940
749
810
698
2,444
2,188
Equipment
280
298
264
298
265
842
766
Data Processing
772
1,011
692
726
714
2,476
2,289
Federal Deposit Insurance Corporation
Assessment
177
161
129
189
189
467
565
Pennsylvania Shares Tax
265
297
297
217
217
860
672
Contracted Services
431
390
281
299
286
1,102
868
Legal and Professional Fees
297
208
212
434
320
717
748
Advertising
141
78
129
158
114
348
268
Other Real Estate Owned (Income)
2
37
(23
)
(36
)
(8
)
16
(80
)
Amortization of Intangible Assets
264
264
341
430
445
870
1,336
Other Expense
837
875
781
1,016
878
2,492
2,718
Total Noninterest Expense
8,782
8,984
8,428
10,765
9,487
26,197
28,017
Income Before Income Tax Expense
3,966
3,210
5,116
18,309
3,236
12,292
11,978
Income Tax Expense
747
560
920
5,343
564
2,227
2,392
Net Income
$
3,219
$
2,650
$
4,196
$
12,966
$
2,672
$
10,065
$
9,586
Three Months Ended
Nine Months Ended
Per Common Share Data
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
9/30/24
9/30/23
Dividends Per Common Share
$
0.25
$
0.25
$
0.25
$
0.25
$
0.25
$
0.75
$
0.75
Earnings Per Common Share - Basic
0.63
0.52
0.82
2.53
0.52
1.96
1.88
Earnings Per Common Share - Diluted
0.60
0.51
0.82
2.52
0.52
1.89
1.87
Weighted Average Common Shares Outstanding
- Basic
5,137,586
5,142,139
5,129,903
5,119,184
5,115,026
5,136,546
5,112,223
Weighted Average Common Shares Outstanding
- Diluted
5,346,750
5,152,657
5,142,286
5,135,997
5,126,546
5,328,610
5,118,279
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
Common Shares Outstanding
5,129,921
5,141,911
5,142,901
5,118,713
5,120,678
Book Value Per Common Share
$
29.07
$
27.79
$
27.53
$
27.32
$
22.43
Tangible Book Value per Common Share
(1)
27.16
25.83
25.52
25.23
20.10
Stockholders’ Equity to Assets
9.5
%
9.2
%
9.6
%
9.6
%
8.2
%
Tangible Common Equity to Tangible Assets
(1)
9.0
8.6
9.0
8.9
7.4
Three Months Ended
Nine Months Ended
Selected Financial Ratios (2)
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
9/30/24
9/30/23
Return on Average Assets
0.84
%
0.71
%
1.17
%
3.62
%
0.75
%
0.90
%
0.91
%
Return on Average Equity
8.80
7.58
12.03
44.99
9.03
9.45
10.98
Average Interest-Earning Assets to Average
Interest-Bearing Liabilities
133.26
135.69
137.07
138.67
139.65
135.28
143.07
Average Equity to Average Assets
9.54
9.36
9.72
8.04
8.32
9.54
8.33
Net Interest Rate Spread
2.36
2.44
2.67
2.56
2.54
2.48
2.80
Net Interest Rate Spread (FTE) (1)
2.38
2.46
2.68
2.57
2.55
2.50
2.81
Net Interest Margin
3.11
3.18
3.36
3.19
3.13
3.21
3.31
Net Interest Margin (FTE) (1)
3.12
3.19
3.37
3.21
3.14
3.22
3.32
Net Charge-Offs (Recoveries) to Average
Loans
0.03
0.02
(0.01
)
—
0.04
0.02
(0.07
)
Efficiency Ratio
69.11
73.89
62.40
38.93
72.26
68.27
68.48
Asset Quality Ratios
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
Allowance for Credit Losses to Total
Loans
0.89
%
0.88
%
0.87
%
0.87
%
0.98
%
Allowance for Credit Losses to
Nonperforming Loans (3)
463.07
513.03
437.73
433.35
330.13
Delinquent and Nonaccrual Loans to Total
Loans (4)
0.98
0.53
0.63
0.62
0.73
Nonperforming Loans to Total Loans (3)
0.19
0.17
0.20
0.20
0.30
Nonperforming Assets to Total Assets
(5)
0.14
0.13
0.15
0.16
0.23
Capital Ratios (6)
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
Common Equity Tier 1 Capital (to Risk
Weighted Assets)
14.79
%
14.62
%
14.50
%
13.64
%
12.77
%
Tier 1 Capital (to Risk Weighted
Assets)
14.79
14.62
14.50
13.64
12.77
Total Capital (to Risk Weighted
Assets)
15.76
15.61
15.51
14.61
13.90
Tier 1 Leverage (to Adjusted Total
Assets)
9.96
9.98
10.28
10.19
9.37
(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
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 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)
$
1,063,946
$
14,987
5.60
%
$
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
%
Debt Securities
Taxable
288,208
3,289
4.56
266,021
2,844
4.28
235,800
2,303
3.91
206,702
1,164
2.25
204,848
940
1.84
Tax-Exempt
—
—
—
—
—
—
—
—
—
4,833
42
3.48
6,013
52
3.46
Equity Securities
2,693
28
4.16
2,693
27
4.01
2,693
27
4.01
2,693
32
4.75
2,693
25
3.71
Interest-Earning Deposits at Banks
111,131
1,448
5.21
101,277
1,313
5.19
58,887
733
4.98
67,450
808
4.79
52,466
750
5.72
Other Interest-Earning Assets
3,108
63
8.06
3,154
85
10.84
3,235
85
10.57
3,387
64
7.50
3,292
69
8.32
Total Interest-Earning Assets
1,469,086
19,815
5.37
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
Noninterest-Earning Assets
57,602
53,564
54,910
38,464
52,885
Total Assets
$
1,526,688
$
1,503,164
$
1,443,414
$
1,421,813
$
1,410,888
Liabilities and Stockholders'
Equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Accounts
$
316,301
$
1,923
2.42
%
$
325,069
$
1,858
2.30
%
$
334,880
$
1,794
2.15
%
$
362,018
$
1,965
2.15
%
$
363,997
$
2,003
2.18
%
Money Market Accounts
217,148
1,726
3.16
214,690
1,646
3.08
203,867
1,514
2.99
205,060
1,441
2.79
187,012
1,141
2.42
Savings Accounts
175,753
46
0.10
184,944
52
0.11
191,444
59
0.12
200,737
57
0.11
212,909
54
0.10
Time Deposits
358,498
4,197
4.66
308,956
3,509
4.57
248,118
2,624
4.25
193,188
1,873
3.85
173,832
1,552
3.54
Total Interest-Bearing Deposits
1,067,700
7,892
2.94
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
Short-Term Borrowings
—
—
—
2
—
—
—
—
—
1,902
26
5.42
—
—
—
Other Borrowings
34,702
407
4.67
34,692
404
4.68
34,682
404
4.69
34,673
407
4.66
34,662
407
4.66
Total Interest-Bearing Liabilities
1,102,402
8,299
2.99
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
Noninterest-Bearing Demand Deposits
263,650
272,280
278,691
305,789
312,016
Total Funding and Cost of Funds
1,366,052
2.42
1,340,633
2.24
1,291,682
1.99
1,303,367
1.76
1,284,428
1.59
Other Liabilities
15,043
21,867
11,441
4,119
9,025
Total Liabilities
1,381,095
1,362,500
1,303,123
1,307,486
1,293,453
Stockholders' Equity
145,593
140,664
140,291
114,327
117,435
Total Liabilities and Stockholders'
Equity
$
1,526,688
$
1,503,164
$
1,443,414
$
1,421,813
$
1,410,888
Net Interest Income (FTE)
(Non-GAAP) (3)
$
11,516
$
11,511
$
11,630
$
11,181
$
10,760
Net Interest-Earning Assets (4)
366,684
381,247
375,513
385,771
385,591
Net Interest Rate Spread (FTE)
(Non-GAAP) (3) (5)
2.38
%
2.46
%
2.68
%
2.57
%
2.55
%
Net Interest Margin (GAAP) (6)
3.11
3.18
3.36
3.19
3.13
Net Interest Margin (FTE)
(Non-GAAP) (3)(6)
3.12
3.19
3.37
3.21
3.14
(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
Nine Months Ended
September 30, 2024
September 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)
$
1,076,052
$
44,571
5.53
%
$
1,069,729
$
39,924
4.99
%
Debt Securities
Taxable
263,433
8,437
4.27
209,069
2,853
1.82
Exempt From Federal Tax
—
—
—
6,154
157
3.40
Marketable Equity Securities
2,693
82
4.06
2,693
74
3.66
Interest-Earning Deposits at Banks
90,507
3,493
5.15
60,474
2,276
5.02
Other Interest-Earning Assets
3,166
234
9.87
2,905
148
6.81
Total Interest-Earning Assets
1,435,851
56,817
5.29
1,351,024
45,432
4.50
Noninterest-Earning Assets
55,366
51,018
Total Assets
$
1,491,217
$
1,402,042
Liabilities and Stockholders'
Equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Accounts
$
325,383
$
5,576
2.29
%
$
351,379
$
4,776
1.82
%
Savings Accounts
184,017
157
0.11
226,686
145
0.09
Money Market Accounts
211,921
4,885
3.08
198,243
3,113
2.10
Time Deposits
305,386
10,330
4.52
143,881
3,063
2.85
Total Interest-Bearing Deposits
1,026,707
20,948
2.73
920,189
11,097
1.61
Short-Term Borrowings
1
—
—
604
5
1.11
Other Borrowings
34,692
1,215
4.68
23,516
800
4.55
Total Interest-Bearing Liabilities
1,061,400
22,163
2.79
944,309
11,902
1.69
Noninterest-Bearing Demand Deposits
271,511
333,356
Total Funding and Cost of Funds
1,332,911
2.22
1,277,665
1.25
Other Liabilities
16,045
7,655
Total Liabilities
1,348,956
1,285,320
Stockholders' Equity
142,261
116,722
Total Liabilities and Stockholders'
Equity
$
1,491,217
$
1,402,042
Net Interest Income (FTE) (Non-GAAP)
(3)
34,654
33,530
Net Interest-Earning Assets (4)
374,451
406,715
Net Interest Rate Spread (FTE) (Non-GAAP)
(3)(5)
2.50
%
2.81
%
Net Interest Margin (FTE) (Non-GAAP)
(3)(6)
3.22
3.32
(1)
Annualized based on nine 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.
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
(Dollars in thousands, except share and
per share data) (Unaudited)
Total Assets (GAAP)
$
1,561,741
$
1,560,259
$
1,473,089
$
1,456,091
$
1,399,492
Goodwill and Intangible Assets, Net
(9,820
)
(10,085
)
(10,349
)
(10,690
)
(11,909
)
Tangible Assets (Non-GAAP) (Numerator)
$
1,551,921
$
1,550,174
$
1,462,740
$
1,445,401
$
1,387,583
Stockholders' Equity (GAAP)
$
149,140
$
142,882
$
141,590
$
139,834
$
114,846
Goodwill and Intangible Assets, Net
(9,820
)
(10,085
)
(10,349
)
(10,690
)
(11,909
)
Tangible Common Equity or Tangible Book
Value (Non-GAAP) (Denominator)
$
139,320
$
132,797
$
131,241
$
129,144
$
102,937
Stockholders’ Equity to Assets (GAAP)
9.5
%
9.2
%
9.6
%
9.6
%
8.2
%
Tangible Common Equity to Tangible Assets
(Non-GAAP)
9.0
%
8.6
%
9.0
%
8.9
%
7.4
%
Common Shares Outstanding
(Denominator)
5,129,921
5,141,911
5,142,901
5,118,713
5,120,678
Book Value per Common Share (GAAP)
$
29.07
$
27.79
$
27.53
$
27.32
$
22.43
Tangible Book Value per Common Share
(Non-GAAP)
$
27.16
$
25.83
$
25.52
$
25.23
$
20.10
Three Months Ended
Nine Months Ended
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
9/30/24
9/30/23
(Dollars in thousands) (Unaudited)
Net Income (GAAP)
$
3,219
$
2,650
$
4,196
$
12,966
$
2,672
$
10,065
$
9,586
Amortization of Intangible Assets, Net
264
264
341
430
445
870
1,336
Adjusted Net Income (Non-GAAP)
(Numerator)
$
3,483
$
2,914
$
4,537
$
13,396
$
3,117
$
10,935
$
10,922
Annualization Factor
3.98
4.02
4.02
3.97
3.97
1.34
1.34
Average Stockholders' Equity (GAAP)
$
145,593
$
140,664
$
140,291
$
114,327
$
117,435
$
142,261
$
116,722
Average Goodwill and Intangible Assets,
Net
(9,987
)
(10,242
)
(10,553
)
(11,829
)
(12,185
)
(10,260
)
(12,627
)
Average Tangible Common Equity (Non-GAAP)
(Denominator)
$
135,606
$
130,422
$
129,738
$
102,498
$
105,250
$
132,001
$
104,095
Return on Average Equity (GAAP)
8.80
%
7.58
%
12.03
%
44.99
%
9.03
%
9.45
%
10.98
%
Return on Average Tangible Common Equity
(Non-GAAP)
10.22
%
8.99
%
14.07
%
51.85
%
11.75
%
11.07
%
14.03
%
Three Months Ended
Nine Months Ended
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
9/30/24
9/30/23
(Dollars in thousands) (Unaudited)
Interest Income (GAAP)
$
19,773
$
18,939
$
17,986
$
16,905
$
15,874
$
56,699
$
45,321
Adjustment to FTE Basis
42
41
39
45
43
118
111
Interest Income (FTE) (Non-GAAP)
19,815
18,980
18,025
16,950
15,917
56,817
45,432
Interest Expense (GAAP)
8,299
7,469
6,395
5,769
5,157
22,163
11,902
Net Interest Income (FTE) (Non-GAAP)
$
11,516
$
11,511
$
11,630
$
11,181
$
10,760
$
34,654
$
33,530
Net Interest Rate Spread (GAAP)
2.36
%
2.44
%
2.67
%
2.56
%
2.54
%
2.48
%
2.80
%
Adjustment to FTE Basis
0.02
0.02
0.01
0.01
0.01
0.02
0.01
Net Interest Rate Spread (FTE)
(Non-GAAP)
2.38
%
2.46
%
2.68
%
2.57
%
2.55
%
2.50
%
2.81
%
Net Interest Margin (GAAP)
3.11
%
3.18
%
3.36
%
3.19
%
3.13
%
3.21
%
3.31
%
Adjustment to FTE Basis
0.01
0.01
0.01
0.02
0.01
0.01
0.01
Net Interest Margin (FTE) (Non-GAAP)
3.12
%
3.19
%
3.37
%
3.21
%
3.14
%
3.22
%
3.32
%
Three Months Ended
Nine Months Ended
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
9/30/24
9/30/23
(Dollars in thousands) (Unaudited)
Income Before Income Tax Expense
(GAAP)
$
3,966
$
3,210
$
5,116
$
18,309
$
3,236
$
12,292
$
11,978
Net (Recovery) Provision for Credit
Losses
(41
)
(36
)
(37
)
(1,420
)
406
(114
)
917
Adjustments
Net (Gain) Loss on Securities
(245
)
31
166
9,830
37
(49
)
369
Gain on Sale of Subsidiary
(138
)
—
—
(24,578
)
—
(138
)
—
Net Gain on Disposal of Premises and
Equipment
—
—
(274
)
—
—
(274
)
(11
)
Net Gain on Bank-Owned Life Insurance
Claims
—
—
(915
)
—
—
(915
)
(303
)
Adjusted PPNR (Non-GAAP) (Numerator)
$
3,542
$
3,205
$
4,056
$
2,141
$
3,679
$
10,802
$
12,950
Annualization Factor
3.98
4.02
4.02
3.97
3.97
1.34
1.34
Average Assets (Denominator)
$
1,526,688
$
1,503,164
$
1,443,414
$
1,421,813
$
1,410,888
$
1,491,217
$
1,402,042
Adjusted PPNR Return on Average Assets
(Non-GAAP)
0.92
%
0.86
%
1.13
%
0.60
%
1.04
%
0.97
%
1.24
%
Three Months Ended
Nine Months Ended
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
9/30/24
9/30/23
(Dollars in thousands, except share and
per share data) (Unaudited)
Net Income (GAAP)
$
3,219
$
2,650
$
4,196
$
12,966
$
2,672
$
10,065
$
9,586
Adjustments
Net (Gain) Loss on Securities
(245
)
31
166
9,830
37
(49
)
369
Gain on Sale of Subsidiary
(138
)
—
—
(24,578
)
—
(138
)
—
Net Gain on Disposal of Premises and
Equipment
—
—
(274
)
—
—
(274
)
(11
)
Net Gain on Bank-Owned Life Insurance
Claims
—
—
(915
)
—
—
(915
)
(303
)
Tax effect
90
(7
)
23
4,843
(8
)
107
(75
)
Adjusted Net Income (Non-GAAP)
$
2,926
$
2,674
$
3,196
$
3,061
$
2,701
$
8,796
$
9,566
Weighted-Average Diluted Common Shares and
Common Stock Equivalents Outstanding
5,346,750
5,152,657
5,142,286
5,135,997
5,126,546
5,328,610
5,118,279
Earnings per Common Share - Diluted
(GAAP)
$
0.60
$
0.51
$
0.82
$
2.52
$
0.52
$
1.89
$
1.87
Adjusted Earnings per Common Share -
Diluted (Non-GAAP)
$
0.55
$
0.52
$
0.62
$
0.60
$
0.53
$
1.65
$
1.87
Net Income (GAAP) (Numerator)
$
3,219
$
2,650
$
4,196
$
12,966
$
2,672
$
10,065
$
9,586
Annualization Factor
3.98
4.02
4.02
3.97
3.97
1.34
1.34
Average Assets (Denominator)
1,526,688
1,503,164
1,443,414
1,421,813
1,410,888
1,491,217
1,402,042
Return on Average Assets (GAAP)
0.84
%
0.71
%
1.17
%
3.62
%
0.75
%
0.90
%
0.91
%
Adjusted Net Income (Non-GAAP)
(Numerator)
$
2,926
$
2,674
$
3,196
$
3,061
$
2,701
$
8,796
$
9,566
Annualization Factor
3.98
4.02
4.02
3.97
3.97
1.34
1.34
Average Assets (Denominator)
1,526,688
1,503,164
1,443,414
1,421,813
1,410,888
1,491,217
1,402,042
Adjusted Return on Average Assets
(Non-GAAP)
0.76
%
0.72
%
0.89
%
0.85
%
0.76
%
0.79
%
0.91
%
Three Months Ended
Nine Months Ended
9/30/24
6/30/24
3/31/24
12/31/23
9/30/23
9/30/24
9/30/23
(Dollars in thousands) (Unaudited)
Net Income (GAAP) (Numerator)
$
3,219
$
2,650
$
4,196
$
12,966
$
2,672
$
10,065
$
9,586
Annualization Factor
3.98
4.02
4.02
3.97
3.97
1.34
1.34
Average Equity (GAAP) (Denominator)
145,593
140,664
140,291
114,327
117,435
142,261
116,722
Return on Average Equity (GAAP)
8.80
%
7.58
%
12.03
%
44.99
%
9.03
%
9.45
%
10.98
%
Adjusted Net Income (Non-GAAP)
(Numerator)
$
2,926
$
2,674
$
3,196
$
3,061
$
2,701
$
8,796
$
9,566
Annualization Factor
3.98
4.02
4.02
3.97
3.97
1.34
1.34
Average Equity (GAAP) (Denominator)
145,593
140,664
140,291
114,327
117,435
142,261
116,722
Adjusted Return on Average Equity
(Non-GAAP)
8.00
%
7.65
%
9.16
%
10.62
%
9.12
%
8.26
%
10.96
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241025393060/en/
John H. Montgomery President and Chief Executive Officer Phone:
(724) 223-8317
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