EX-99.1 2 a20240331ex9911stqtrearnin.htm EX-99.1 EARNINGS RELEASE Document

EXHIBIT 99.1
cbfinancialservices.jpg

CB Financial Services, Inc.
Announces First Quarter 2024 Financial Results and
Declares Quarterly Cash Dividend

WASHINGTON, PA., April 26, 2024 -- CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”), today announced its first quarter 2024 financial results.

Three Months Ended
3/31/2412/31/239/30/236/30/233/31/23
(Dollars in thousands, except per share data) (Unaudited)
Net Income (GAAP)$4,196 $12,966 $2,672 $2,757 $4,156 
Net Income Adjustments
(1,000)(9,905)29 78 (127)
Adjusted Net Income (Non-GAAP) (1)
$3,196 $3,061 $2,701 $2,835 $4,029 
Earnings per Common Share - Diluted (GAAP)$0.82 $2.52 $0.52 $0.54 $0.81 
Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1)
$0.62 $0.60 $0.53 $0.55 $0.79 
(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 First Quarter Financial Highlights
(Comparisons to three months ended March 31, 2023 unless otherwise noted)
•Net income was $4.20 million, compared to $4.16 million. Results were impacted by the December 2023 sale of the Bank’s subsidiary insurance company, Exchange Underwriters (EU) which drove decreases in noninterest income and noninterest expense, a gain on bank-owned life insurance and a recovery of provision for credit losses.
◦Adjusted net income (Non-GAAP) was $3.2 million compared to $4.0 million.
◦Income before income tax expense was $5.1 million compared to $5.3 million.
◦Adjusted pre-provision net revenue (PPNR) (Non-GAAP) was $4.1 million compared to $5.3 million.
•Earnings per diluted common share (EPS) increased to $0.82 from $0.81.
◦Adjusted earning per common share - diluted (Non-GAAP) was $0.62, compared to $0.79.
•Return on average assets (annualized) was 1.17%, compared to 1.21%.
◦Adjusted return on average assets (annualized) (Non-GAAP) was 0.89%, compared to 1.18%.
•Return on average equity (annualized) was 12.03%, compared to 14.69%.
◦Adjusted return on average equity (annualized) (Non-GAAP) was 9.16%, compared to 14.24%.
•Net interest margin (“NIM”) declined to 3.36% from 3.51%.
•Net interest and dividend income was $11.59 million, compared to $11.58 million.
•Noninterest income decreased to $1.9 million, compared to $2.8 million. Significant changes in noninterest income included a $1.9 million decrease in insurance commissions due to the sale of EU, partially offset by increases in gains on bank-owned life insurance and gains on the disposal of premises and equipment of $613,000 and $263,000, respectively.
•Noninterest expense decreased to $8.4 million, compared to $9.0 million, due to decreases in compensation and benefits, data processing, intangible amortization and other noninterest expenses, partially offset by increases in contracted services, advertising, occupancy and equipment expenses.

(Amounts at March 31, 2024; comparisons to December 31, 2023, unless otherwise noted)
•Total assets increased to $1.47 billion from $1.46 billion.
•Total loans decreased $14.1 million, or 1.3%, to $1.10 billion compared to $1.11 billion, and included decreases in consumer loans and commercial and industrial loans of $11.1 million and $8.0 million, respectively, partially offset by increases in commercial real estate loans, other loans and construction loans of $3.3 million, $1.4 million and $1.2 million, respectively. The consumer loan portfolio is primarily comprised of indirect automobile loans and decreases as a result of the discontinuation of that product as of June 30, 2023. Excluding the $11.3 million decrease in indirect automobile loans, total loans decreased $2.5 million, or 0.2%.
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EXHIBIT 99.1

•Nonperforming loans to total loans was 0.20% at March 31, 2024 and December 31, 2023.
•Total deposits were $1.26 billion, a decrease of $4.7 million, compared to $1.27 billion.
•Book value per share was $27.53, compared to $27.32 as of December 31, 2023.
•Tangible book value per share (Non-GAAP) was $25.52, compared to $25.23 as of December 31, 2023. The change was due to an increase in stockholders’ equity primarily related to current period net income of $4.2 million, partially offset by a $1.3 million increase in accumulated other comprehensive loss and the payment of $1.3 million in dividends since December 31, 2023.

Management Commentary
President and CEO John H. Montgomery commented, “While our prior period results reflected the ongoing trend of net interest margin pressure, our previously announced balance sheet strategies and recent loan production are contributing to stabilization and improvement in this area. While loan production remained consistent, we did experience an overall decrease of $13.9 million or 1.2% in our loan balances. Our first quarter loan balances were impacted by runoff in the formerly exited indirect lending portfolio of $11.1 million and a $20.0 million payoff of a commercial line of credit. However, I am pleased with our loan production for the quarter and our overall loan growth continued to show positive signs with several categories increasing during the quarter. During this time of deposit disruption, our deposits remained relatively stable, albeit continuing to shift from non-interest and low interest-bearing accounts to higher-cost time deposits. Notably, our asset quality remains robust, with nonperforming loans remaining at $2.2 million or 0.20% of total loans.

During the quarter, we successfully implemented a new website and domain name (www.cb.bank) as part of our ongoing investment in technology and infrastructure to better serve our clients. Additionally, we invested in the build-out of our Treasury team and onboarded a new Chief Human Resource Officer to continue our success with attracting and retaining top talent. Our operational team developed new indexed money market deposit products aimed at offering a fair, but market adjustable rate.

Finally, we were named by Newsweek as one of the top 250 Regional Banks in America. This recognition is the direct result of us staying true to our cornerstone by delivering an exceptional client experience everyday.

As we look ahead, we remain committed to our long-term plan, investing in our franchise, and delivering an exceptional client experience that benefits all our 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 May 31, 2024, to stockholders of record as of the close of business on May 15, 2024.

2024 First Quarter Financial Review

Net Interest and Dividend Income
Net interest and dividend income increased $8,000, or 0.1%, to $11.59 million for the three months ended March 31, 2024 compared to $11.58 million for the three months ended March 31, 2023.
•NIM (GAAP) decreased to 3.36% for the three months ended March 31, 2024 compared to 3.51% for the three months ended March 31, 2023. Fully tax equivalent (FTE) NIM (Non-GAAP) decreased 15 basis points (“bps”) to 3.37% for the three months ended March 31, 2024 compared to 3.52% for the three months ended March 31, 2023.
•Interest and dividend income increased $3.7 million, or 26.3%, to $18.0 million for the three months ended March 31, 2024 compared to $14.2 million for the three months ended March 31, 2023.
◦Interest income on loans increased $2.5 million, or 19.9%, to $14.8 million for the three months ended March 31, 2024 compared to $12.4 million for the three months ended March 31, 2023. The average yield on loans increased 67 bps to 5.50% compared to 4.83% resulting in a $1.8 million increase in interest income on loans. The average balance of loans increased $47.3 million to $1.09 billion from $1.04 billion, generating $694,000 of additional 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.
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◦Interest income on taxable investment securities increased $1.3 million, or 138.9%, to $2.3 million for the three months ended March 31, 2024 compared to $964,000 for the three months ended March 31, 2023 driven by a 210 bp increase in average yield coupled with a $22.6 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%.
◦Interest income on interest-earning deposits at other banks decreased $72,000, to $733,000 for the three months ended March 31, 2024 compared to $805,000 for the three months ended March 31, 2023 driven by a $14.3 million decrease in average balances, partially offset by a 58 bp increase in the average yield.
•Interest expense increased $3.7 million, or 140.3%, to $6.4 million for the three months ended March 31, 2024 compared to $2.7 million for the three months ended March 31, 2023.
◦Interest expense on deposits increased $3.5 million, or 139.3%, to $6.0 million for the three months ended March 31, 2024 compared to $2.5 million for the three months ended March 31, 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 to interest-bearing demand and time deposits which resulted in a 132 bp, or 116.0%, increase in the average cost of interest-bearing deposits compared to the three months ended March 31, 2023. This accounted for a $3.2 million increase in interest expense. Additionally, interest-bearing deposit balances increased $86.1 million, or 9.6%, to $978.3 million as of March 31, 2024 compared to $892.2 million as of March 31, 2023, accounting for a $298,000 increase in interest expense.
◦Interest expense on borrowed funds increased $247,000, or 157.3%, to $404,000 for the three months ended March 31, 2024 compared to $157,000 for the three months ended March 31, 2023. The average balance of borrowed funds increased $18.7 million due to $20.0 million of FHLB long-term advances added during the second quarter of 2023. The increase in the average balance accounted for a $232,000 increase in interest expense.
Provision for Credit Losses
The provision for credit losses recorded for the three months ended March 31, 2024 was a net recovery of $37,000. The provision for credit losses - loans was a recovery of $143,000 and was primarily due to a decrease in loan balances while the provision for credit losses - unfunded commitments was $106,000 and was due to an increase in qualitative factors. This compared to an $80,000 provision for credit losses recorded for the three months ended March 31, 2023.

Noninterest Income
Noninterest income decreased $894,000, or 31.8%, to $1.9 million for the three months ended March 31, 2024, compared to $2.8 million for the three months ended March 31, 2023. This decrease resulted primarily from a $1.9 million decrease in insurance commissions as no income was recognized for the three months ended March 31, 2024 due to the December 2023 sale of EU, compared to a full quarter of income recognized for the three months ended March 31, 2023. This decrease was partially offset by net increases in gains on bank-owned life insurance and gains on the disposal of premises and equipment of $613,000 and $263,000, respectively. The gain on bank owned life insurance was $915,000 resulting from one death claim during the three months ended March 31, 2024 compared to $302,000 resulting from two death claims during the three months ended March 31, 2023. The gain on the disposal of premises and equipment was $274,000 resulting from the sale of one branch office building during the three months ended March 31, 2024 compared to $11,000 for the three months ended March 31, 2023.

Noninterest Expense
Noninterest expense decreased $600,000, or 6.6%, to $8.4 million for the three months ended March 31, 2024 compared to $9.0 million for the three months ended March 31, 2023. Salaries and benefits decreased $503,000, or 9.9%, to $4.6 million primarily due to no expense related to EU recognized for the three months ended March 31, 2024 due to the December 2023 sale, compared to $864,000 of expense recognized for the three months ended March 31, 2023, partially offset by merit increases and revenue producing staff additions. Data processing expense decreased $165,000 due to additional expenses realized during the three months ended March 31, 2023 related to a 2022 data processing conversion. Other noninterest expense decreased $164,000 and intangible amortization decreased $104,000 primarily due to EU expenses of $108,000 and $47,000, respectively, realized during the three months ended March 31, 2023. Partially offsetting these decreases, contracted services, advertising, occupancy and equipment expenses increased $134,000, $50,000, $48,000 and $46,000, respectively.
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Statement of Financial Condition Review

Assets
Total assets increased $16.0 million, or 1.1%, to $1.47 billion at March 31, 2024, compared to $1.46 billion at December 31, 2023.
•Cash and due from banks increased $5.5 million, or 8.0%, to $73.7 million at March 31, 2024, compared to $68.2 million at December 31, 2023.
•Securities increased $25.2 million, or 12.2%, to $232.3 million at March 31, 2024, compared to $207.1 million at December 31, 2023. The securities balance was primarily impacted by the purchase of $29.8 million of collateralized loan obligation securities, partially offset by $3.1 million of principal repayments on amortizing securities.
Loans and Credit Quality
•Total loans decreased $14.1 million, or 1.3%, to $1.10 billion at March 31, 2024 compared to $1.11 billion at December 31, 2023. This was driven by decreases in consumer loans and commercial and industrial loans of $11.1 million and $8.0 million, respectively, partially offset by increases in commercial real estate loans, other loans and construction loans of $3.3 million, $1.4 million and $1.2 million, 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. The decrease in commercial and industrial loans was primarily due to the prepayment of a $20.0 million line of credit and a $5.0 million syndicated national credit.
•The allowance for credit losses (ACL) was $9.6 million at March 31, 2024 and $9.7 million at December 31, 2023. As a result, the ACL to total loans was 0.87% at March 31, 2024 and December 31, 2023. During the current year, the Company recorded a net recovery of credit losses of $37,000.
•Net recoveries for the three months ended March 31, 2024 were $18,000. Net recoveries for the three months ended March 31, 2023 were $756,000, or 0.29% of average loans on an annualized basis primarily due to recoveries totaling $750,000 related to a prior year $2.7 million charged-off commercial and industrial loan.
•Nonperforming loans, which includes nonaccrual loans and accruing loans past due 90 days or more, were $2.2 million at March 31, 2024 and December 31, 2023. Nonperforming loans to total loans ratio was 0.20% at March 31, 2024 and December 31, 2023.

Total liabilities increased $14.2 million, or 1.1%, to $1.33 billion at March 31, 2024 compared to $1.32 billion at December 31, 2023.
Deposits
•Total deposits decreased $4.7 million to $1.262 billion as of March 31, 2024 compared to $1.267 billion at December 31, 2023. Non interest-bearing demand deposits decreased $2.6 million, interest-bearing demand deposits decreased $39.9 million and savings deposits decreased $4.5 million, while money market deposits increased $7.3 million and time deposits increased $35.0 million. Deposit changes were primarily the result of cyclical fluctuations in municipal deposits and the current interest rate environment causing a shift in deposit products to higher priced time deposits. Additionally, the Bank added $13.0 million of brokered certificates of deposit during the period. Brokered certificates of deposit totaled $42.0 million as of March 31, 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 collateralized loan obligation securities. At March 31, 2024, FDIC insured deposits totaled approximately 63.1% of total deposits while an additional 15.0% of deposits were collateralized with investment securities.
Accrued Interest Payable and Other Liabilities
•Accrued interest payable and other liabilities increased $18.9 million, or 131.1%, to $33.3 million at March 31, 2024, compared to $14.4 million at December 31, 2023 primarily due to the purchase of $10.6 million of syndicated loans and $10.1 million of securities which were unsettled at the end of the period.

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Stockholders’ Equity
Stockholders’ equity increased $1.8 million, or 1.3%, to $141.6 million at March 31, 2024, compared to $139.8 million at December 31, 2023. The key factor positively impacting stockholders’ equity was $4.2 million of net income for the current period, partially offset by a $1.3 million increase in accumulated other comprehensive loss and the payment of $1.3 million in dividends since December 31, 2023.
Book value per share
Book value per common share was $27.53 at March 31, 2024 compared to $27.32 at December 31, 2023, an increase of $0.21.

Tangible book value per common share (Non-GAAP) was $25.52 at March 31, 2024, compared to $25.23 at December 31, 2023, an increase of $0.29.

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.

Company Contact:
John H. Montgomery
President and Chief Executive Officer
Phone: (724) 225-2400


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CB FINANCIAL SERVICES, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except share and per share data) (Unaudited)
Selected Financial Condition Data3/31/2412/31/239/30/236/30/233/31/23
Assets
Cash and Due From Banks$73,691 $68,223 $52,597 $78,093 $103,545 
Securities232,276 207,095 172,904 181,427 189,025 
Loans Held for Sale200 — — — — 
Loans 
Real Estate: 
Residential346,938 347,808 346,485 338,493 332,840 
Commercial470,430 467,154 466,910 458,614 452,770 
Construction44,323 43,116 41,874 44,523 39,522 
Commercial and Industrial103,313 111,278 100,873 102,266 79,501 
Consumer100,576 111,643 122,516 134,788 146,081 
Other30,763 29,397 23,856 22,470 21,151 
Total Loans1,096,343 1,110,396 1,102,514 1,101,154 1,071,865 
Allowance for Credit Losses(9,582)(9,707)(10,848)(10,666)(10,270)
Loans, Net1,086,761 1,100,689 1,091,666 1,090,488 1,061,595 
Premises and Equipment Held for Sale— — — — — 
Premises and Equipment, Net19,548 19,704 18,524 18,582 17,732 
Bank-Owned Life Insurance23,763 25,378 25,227 25,082 24,943 
Goodwill9,732 9,732 9,732 9,732 9,732 
Intangible Assets, Net617 958 2,177 2,622 3,068 
Accrued Interest Receivable and Other Assets25,459 24,312 26,665 26,707 21,068 
Total Assets$1,472,047 $1,456,091 $1,399,492 $1,432,733 $1,430,708 
Liabilities
Deposits
Noninterest-Bearing Demand Accounts$275,182 $277,747 $305,145 $316,098 $350,911 
Interest-Bearing Demand Accounts323,134 362,994 357,381 374,654 359,051 
Money Market Accounts208,375 201,074 189,187 185,814 206,174 
Savings Accounts190,206 194,703 207,148 217,267 234,935 
Time Deposits265,597 230,641 177,428 169,482 130,449 
Total Deposits1,262,494 1,267,159 1,236,289 1,263,315 1,281,520 
Short-Term Borrowings— — — — 121 
Other Borrowings34,688 34,678 34,668 34,658 14,648 
Accrued Interest Payable and Other Liabilities33,275 14,420 13,689 18,171 17,224 
Total Liabilities1,330,457 1,316,257 1,284,646 1,316,144 1,313,513 
Stockholders’ Equity141,590 139,834 114,846 116,589 117,195 
Total Liabilities and Stockholders’ Equity$1,472,047 $1,456,091 $1,399,492 $1,432,733 $1,430,708 
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(Dollars in thousands, except share and per share data) (Unaudited)
 Three Months Ended
Selected Operating Data3/31/2412/31/239/30/236/30/233/31/23
Interest and Dividend Income:
Loans, Including Fees$14,838 $14,804 $14,049 $13,426 $12,371 
Securities:
Taxable2,303 1,164 940 950 964 
Tax-Exempt— 33 41 42 41 
Dividends27 32 25 25 24 
Other Interest and Dividend Income818 872 819 760 844 
Total Interest and Dividend Income17,986 16,905 15,874 15,203 14,244 
Interest Expense:
Deposits5,991 5,336 4,750 3,842 2,504 
Short-Term Borrowings— 26 — 3 2 
Other Borrowings404 407 407 238 155 
Total Interest Expense6,395 5,769 5,157 4,083 2,661 
Net Interest and Dividend Income11,591 11,136 10,717 11,120 11,583 
(Recovery) Provision for Credit Losses - Loans
(143)(1,147)291 492 80 
Provision (Recovery) for Credit Losses - Unfunded Commitments106 (273)115 (60)— 
Net Interest and Dividend Income After Net (Recovery) Provision for Credit Losses11,628 12,556 10,311 10,688 11,503 
Noninterest Income:
Service Fees415 460 466 448 445 
Insurance Commissions2 969 1,436 1,511 1,922 
Other Commissions62 60 94 224 144 
Net Gain (Loss) on Sales of Loans
22 2 — (5)2 
Net Loss on Securities(166)(9,830)(37)(100)(232)
Net Gain on Purchased Tax Credits12 7 7 7 7 
Gain on Sale of Subsidiary— 24,578 — — — 
    Net Gain on Disposal of Premises and Equipment274 — — — 11 
Income from Bank-Owned Life Insurance148 151 145 139 140 
Net Gain on Bank-Owned Life Insurance Claims915 — — 1 302 
Other Income232 121 301 44 69 
Total Noninterest Income1,916 16,518 2,412 2,269 2,810 
Noninterest Expense:
Salaries and Employee Benefits4,576 6,224 5,369 5,231 5,079 
Occupancy749 810 698 789 701 
Equipment264 298 265 283 218 
Data Processing692 726 714 718 857 
Federal Deposit Insurance Corporation Assessment129 189 189 224 152 
Pennsylvania Shares Tax297 217 217 195 260 
Contracted Services281 299 286 434 147 
Legal and Professional Fees212 434 320 246 182 
Advertising129 158 114 75 79 
Other Real Estate Owned (Income)(23)(36)(8)(35)(37)
Amortization of Intangible Assets341 430 445 446 445 
Other Expense781 1,016 878 895 945 
Total Noninterest Expense8,428 10,765 9,487 9,501 9,028 
Income Before Income Tax Expense5,116 18,309 3,236 3,456 5,285 
Income Tax Expense920 5,343 564 699 1,129 
Net Income $4,196 $12,966 $2,672 $2,757 $4,156 
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Three Months Ended
Per Common Share Data3/31/2412/31/239/30/236/30/233/31/23
Dividends Per Common Share$0.25 $0.25 $0.25 $0.25 $0.25 
Earnings Per Common Share - Basic0.82 2.53 0.52 0.54 0.81 
Earnings Per Common Share - Diluted0.82 2.52 0.52 0.54 0.81 
Weighted Average Common Shares Outstanding - Basic5,129,903 5,119,184 5,115,026 5,111,987 5,109,597 
Weighted Average Common Shares Outstanding - Diluted5,142,286 5,135,997 5,126,546 5,116,134 5,115,705 
3/31/2412/31/239/30/236/30/233/31/23
Common Shares Outstanding5,142,901 5,118,713 5,120,678 5,111,678 5,116,830 
Book Value Per Common Share$27.53 $27.32 $22.43 $22.81 $22.90 
Tangible Book Value per Common Share (1)
25.52 25.23 20.10 20.39 20.40 
Stockholders’ Equity to Assets9.6 %9.6 %8.2 %8.1 %8.2 %
Tangible Common Equity to Tangible Assets (1)
9.0 8.9 7.4 7.3 7.4 
Three Months Ended
Selected Financial Ratios (2)
3/31/2412/31/239/30/236/30/233/31/23
Return on Average Assets1.17 %3.62 %0.75 %0.79 %1.21 %
Return on Average Equity12.03 44.99 9.03 9.38 14.69 
Average Interest-Earning Assets to Average Interest-Bearing Liabilities137.07 138.67 139.65 142.28 147.38 
Average Equity to Average Assets9.72 8.04 8.32 8.38 8.27 
Net Interest Rate Spread2.67 2.56 2.54 2.78 3.13 
Net Interest Rate Spread (FTE) (1)
2.68 2.57 2.55 2.79 3.14 
Net Interest Margin3.36 3.19 3.13 3.29 3.51 
Net Interest Margin (FTE) (1)
3.37 3.21 3.14 3.30 3.52 
Net (Recoveries) Charge-Offs to Average Loans(0.01)— 0.04 0.04 (0.29)
Efficiency Ratio62.40 38.93 72.26 70.96 62.72 
Asset Quality Ratios3/31/2412/31/239/30/236/30/233/31/23
Allowance for Credit Losses to Total Loans0.87 %0.87 %0.98 %0.97 %0.96 %
Allowance for Credit Losses to Nonperforming Loans (3)
437.73 433.35 330.13 260.46 189.73 
Delinquent and Nonaccrual Loans to Total Loans (4)
0.63 0.62 0.73 0.68 1.02 
Nonperforming Loans to Total Loans (3)
0.20 0.20 0.30 0.37 0.51 
Nonperforming Assets to Total Assets (5)
0.15 0.16 0.23 0.30 0.40 
Capital Ratios (6)
3/31/2412/31/239/30/236/30/233/31/23
Common Equity Tier 1 Capital (to Risk Weighted Assets)14.50 %13.64 %12.77 %12.54 %12.60 %
Tier 1 Capital (to Risk Weighted Assets)14.50 13.64 12.77 12.54 12.60 
Total Capital (to Risk Weighted Assets)15.51 14.61 13.90 13.64 13.69 
Tier 1 Leverage (to Adjusted Total Assets)10.28 10.19 9.37 9.26 9.24 
(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. 
9

AVERAGE BALANCES AND YIELDS
 Three Months Ended
 March 31, 2024December 31, 2023September 30, 2023June 30, 2023March 31, 2023
Average BalanceInterest and Dividends
Yield / Cost (1)
Average BalanceInterest and Dividends
Yield / Cost (1)
Average BalanceInterest and Dividends
Yield / Cost (1)
Average BalanceInterest and Dividends
Yield / Cost (1)
Average BalanceInterest and Dividends
Yield / Cost (1)
(Dollars in thousands) (Unaudited)
Assets:
Interest-Earning Assets:
Loans, Net (2)
$1,087,889 $14,877 5.50 %$1,098,284 $14,840 5.36 %$1,088,691 $14,081 5.13 %$1,079,399 $13,450 5.00 %$1,040,570 $12,391 4.83 %
Debt Securities
Taxable235,800 2,303 3.91 206,702 1,164 2.25 204,848 940 1.84 209,292 950 1.82 213,158 964 1.81 
Tax-Exempt— — — 4,833 42 3.48 6,013 52 3.46 6,180 53 3.43 6,270 52 3.32 
Equity Securities2,693 27 4.01 2,693 32 4.75 2,693 25 3.71 2,693 25 3.71 2,693 24 3.56 
Interest-Earning Deposits at Banks58,887 733 4.98 67,450 808 4.79 52,466 750 5.72 53,582 721 5.38 73,221 805 4.40 
Other Interest-Earning Assets3,235 85 10.57 3,387 64 7.50 3,292 69 8.32 2,783 39 5.62 2,633 39 6.01 
Total Interest-Earning Assets1,388,504 18,025 5.22 1,383,349 16,950 4.86 1,358,003 15,917 4.65 1,353,929 15,238 4.51 1,338,545 14,275 4.33 
Noninterest-Earning Assets54,910 38,464 52,885 52,812 49,703 
Total Assets$1,443,414 $1,421,813 $1,410,888 $1,406,741 $1,388,248 
Liabilities and Stockholders' Equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Accounts $334,880 $1,794 2.15 %$362,018 $1,965 2.15 %$363,997 $2,003 2.18 %$354,497 $1,582 1.79 %$335,327 $1,191 1.44 %
Money Market Accounts203,867 1,514 2.99 205,060 1,441 2.79 187,012 1,141 2.42 194,565 1,033 2.13 213,443 939 1.78 
Savings Accounts191,444 59 0.12 200,737 57 0.11 212,909 54 0.10 225,175 53 0.09 242,298 37 0.06 
Time Deposits248,118 2,624 4.25 193,188 1,873 3.85 173,832 1,552 3.54 155,867 1,174 3.02 101,147 337 1.35 
Total Interest-Bearing Deposits978,309 5,991 2.46 961,003 5,336 2.20 937,750 4,750 2.01 930,104 3,842 1.66 892,215 2,504 1.14 
Short-Term Borrowings— — — 1,902 26 5.42 — — — 480 3 2.51 1,344 2 0.60 
Other Borrowings34,682 404 4.69 34,673 407 4.66 34,662 407 4.66 21,026 238 4.54 14,641 155 4.29 
Total Interest-Bearing Liabilities1,012,991 6,395 2.54 997,578 5,769 2.29 972,412 5,157 2.10 951,610 4,083 1.72 908,200 2,661 1.19 
Noninterest-Bearing Demand Deposits278,691 305,789 312,016 326,262 362,343 
Total Funding and Cost of Funds
1,291,682 1.99 1,303,367 1.76 1,284,428 1.59 1,277,872 1.28 1,270,543 0.85 
Other Liabilities11,441 4,119 9,025 10,920 2,953 
Total Liabilities1,303,123 1,307,486 1,293,453 1,288,792 1,273,496 
Stockholders' Equity140,291 114,327 117,435 117,949 114,752 
Total Liabilities and Stockholders' Equity$1,443,414 $1,421,813 $1,410,888 $1,406,741 $1,388,248 
Net Interest Income (FTE)
(Non-GAAP) (3)
$11,630 $11,181 $10,760 $11,155 $11,614 
Net Interest-Earning Assets (4)
375,513 385,771 385,591 402,319 430,345 
Net Interest Rate Spread (FTE)
(Non-GAAP) (3) (5)
2.68 %2.57 %2.55 %2.79 %3.14 %
Net Interest Margin (GAAP) (6)
3.36 3.19 3.13 3.29 3.51 
Net Interest Margin (FTE)
(Non-GAAP) (3)(6)
3.37 3.21 3.14 3.30 3.52 
(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.
10

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.

3/31/2412/31/239/30/236/30/233/31/23
(Dollars in thousands, except share and per share data) (Unaudited)
Total Assets (GAAP)
$1,472,047 $1,456,091 $1,399,492 $1,432,733 $1,430,708 
Goodwill and Intangible Assets, Net(10,349)(10,690)(11,909)(12,354)(12,800)
Tangible Assets (Non-GAAP) (Numerator)$1,461,698 $1,445,401 $1,387,583 $1,420,379 $1,417,908 
Stockholders' Equity (GAAP)$141,590 $139,834 $114,846 $116,589 $117,195 
Goodwill and Intangible Assets, Net(10,349)(10,690)(11,909)(12,354)(12,800)
Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator)$131,241 $129,144 $102,937 $104,235 $104,395 
Stockholders’ Equity to Assets (GAAP)9.6 %9.6 %8.2 %8.1 %8.2 %
Tangible Common Equity to Tangible Assets (Non-GAAP)9.0 %8.9 %7.4 %7.3 %7.4 %
Common Shares Outstanding (Denominator)5,142,901 5,118,713 5,120,678 5,111,678 5,116,830 
Book Value per Common Share (GAAP)$27.53 $27.32 $22.43 $22.81 $22.90 
Tangible Book Value per Common Share (Non-GAAP)$25.52 $25.23 $20.10 $20.39 $20.40 

Three Months Ended
3/31/2412/31/239/30/236/30/233/31/23
(Dollars in thousands) (Unaudited)
Net Income (GAAP)$4,196 $12,966 $2,672 $2,757 $4,156 
Amortization of Intangible Assets, Net341 430 445 446 445 
Adjusted Net Income (Non-GAAP) (Numerator)$4,537 $13,396 $3,117 $3,203 $4,601 
Annualization Factor4.02 3.97 3.97 4.01 4.06 
Average Stockholders' Equity (GAAP)$140,291 $114,327 $117,435 $117,949 $114,752 
Average Goodwill and Intangible Assets, Net(10,553)(11,829)(12,185)(12,626)(13,080)
Average Tangible Common Equity (Non-GAAP) (Denominator)$129,738 $102,498 $105,250 $105,323 $101,672 
Return on Average Equity (GAAP)12.03 %44.99 %9.03 %9.38 %14.69 %
Return on Average Tangible Common Equity (Non-GAAP)14.07 %51.85 %11.75 %12.20 %18.35 %
11

Three Months Ended
3/31/2412/31/239/30/236/30/233/31/23
(Dollars in thousands) (Unaudited)
Interest Income (GAAP)$17,986 $16,905 $15,874 $15,203 $14,244 
Adjustment to FTE Basis39 45 43 35 31 
Interest Income (FTE) (Non-GAAP)18,025 16,950 15,917 15,238 14,275 
Interest Expense (GAAP)6,395 5,769 5,157 4,083 2,661 
Net Interest Income (FTE) (Non-GAAP)$11,630 $11,181 $10,760 $11,155 $11,614 
Net Interest Rate Spread (GAAP)2.67 %2.56 %2.54 %2.78 %3.13 %
Adjustment to FTE Basis0.01 0.01 0.01 0.01 0.01 
Net Interest Rate Spread (FTE) (Non-GAAP)2.68 %2.57 %2.55 %2.79 %3.14 %
Net Interest Margin (GAAP)3.36 %3.19 %3.13 %3.29 %3.51 %
Adjustment to FTE Basis0.01 0.02 0.01 0.01 0.01 
Net Interest Margin (FTE) (Non-GAAP)3.37 %3.21 %3.14 %3.30 %3.52 %

Three Months Ended
3/31/2412/31/239/30/236/30/233/31/23
(Dollars in thousands) (Unaudited)
Income Before Income Tax Expense (GAAP)$5,116 $18,309 $3,236 $3,456 $5,285 
Net (Recovery) Provision for Credit Losses(37)(1,420)406 432 80 
Adjustments
Net Loss on Securities166 9,830 37 100 232 
Gain on Sale of Subsidiary— (24,578)— — — 
Net Gain on Disposal of Premises and Equipment(274)— — — (11)
Net Gain on Bank-Owned Life Insurance Claims(915)— — (1)(302)
Adjusted PPNR (Non-GAAP) (Numerator)$4,056 $2,141 $3,679 $3,987 $5,284 
Annualization Factor4.02 3.97 3.97 4.01 4.06 
Average Assets (Denominator)$1,443,414 $1,421,813 $1,410,888 $1,406,741 $1,388,248 
Adjusted PPNR Return on Average Assets (Non-GAAP)1.13 %0.60 %1.04 %1.14 %1.55 %
12
Three Months Ended
3/31/2412/31/239/30/236/30/233/31/23
(Dollars in thousands, except share and per share data) (Unaudited)
Net Income (GAAP)$4,196 $12,966 $2,672 $2,757 $4,156 
Adjustments
Net Loss on Securities166 9,830 37 100 232 
Gain on Sale of Subsidiary— (24,578)— — — 
Net Gain on Disposal of Premises and Equipment(274)— — — (11)
Net Gain on Bank-Owned Life Insurance Claims(915)— — (1)(302)
Tax effect23 4,843 (8)(21)(46)
Adjusted Net Income (Non-GAAP)$3,196 $3,061 $2,701 $2,835 $4,029 
Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding5,142,286 5,135,997 5,126,546 5,116,134 5,115,705 
Earnings per Common Share - Diluted (GAAP)$0.82 $2.52 $0.52 $0.54 $0.81 
Adjusted Earnings per Common Share - Diluted (Non-GAAP)$0.62 $0.60 $0.53 $0.55 $0.79 
Net Income (GAAP) (Numerator)$4,196 $12,966 $2,672 $2,757 $4,156 
Annualization Factor4.02 3.97 3.97 4.01 4.06 
Average Assets (Denominator)1,443,414 1,421,813 1,410,888 1,406,741 1,388,248 
Return on Average Assets (GAAP)1.17 %3.62 %0.75 %0.79 %1.21 %
Adjusted Net Income (Non-GAAP) (Numerator)$3,196 $3,061 $2,701 $2,835 $4,029 
Annualization Factor4.02 3.97 3.97 4.01 4.06 
Average Assets (Denominator)1,443,414 1,421,813 1,410,888 1,406,741 1,388,248 
Adjusted Return on Average Assets (Non-GAAP)0.89 %0.85 %0.76 %0.81 %1.18 %
Three Months Ended
3/31/2412/31/239/30/236/30/233/31/23
(Dollars in thousands) (Unaudited)
Net Income (GAAP) (Numerator)$4,196 $12,966 $2,672 $2,757 $4,156 
Annualization Factor4.02 3.97 3.97 4.01 4.06 
Average Equity (GAAP) (Denominator)140,291 114,327 117,435 117,949 114,752 
Return on Average Equity (GAAP)12.03 %44.99 %9.03 %9.38 %14.69 %
Adjusted Net Income (Non-GAAP) (Numerator)$3,196 $3,061 $2,701 $2,835 $4,029 
Annualization Factor4.02 3.97 3.97 4.01 4.06 
Average Equity (GAAP) (Denominator)140,291 114,327 117,435 117,949 114,752 
Adjusted Return on Average Equity (Non-GAAP)9.16 %10.62 %9.12 %9.64 %14.24 %