CB Financial Services, Inc. ("CB") (Nasdaq:CBFV), the holding
company of Community Bank (the "Bank"), today announced net income
increased $1.2 million, to $2.3 million for the three months
ended March 31, 2015 compared to $1.1 million for the three
months ended March 31, 2014. Earnings per
share increased $0.10, to $0.56 for the three months
ended March 31, 2015 compared to $0.46 for the three months
ended March 31, 2014. The quarter results were largely impacted by
the merger of FedFirst Financial Corporation, the Monessen,
Pennsylvania based holding company for First Federal Savings Bank,
with the CB effective on October 31, 2014.
"We are pleased to announce a successful first full quarter of
combined post-merger operations," said Barron P. McCune, Jr., Vice
Chairman, President and Chief Executive Officer. "The Company
greatly improved its net interest margin quarter over quarter while
maintaining strong asset quality. As part of the merger, we
received Exchange Underwriters, Inc.; this helped to boost
noninterest income by over 150%. For the balance of 2015, we will
continue to focus on loan and core deposit growth and increasing
fee income. We will also continue to focus on leveraging the
efficiencies gained in the merger to control noninterest
expenses."
FIRST QUARTER RESULTS
Statement of Income Review
Net Interest Income. Net interest
income increased $3.3 million, or 81.5%, to $7.5
million for the three months ended March 31, 2015 compared
to $4.1 million for the three months ended March 31, 2014.
Interest and dividend income increased $3.6 million,
or 78.6%, to $8.2 million for the three months ended March 31,
2015 compared to $4.6 million for the three months ended March
31, 2014. Interest income on loans increased $3.5 million
due to an increase in average loans outstanding of $304.8
million primarily due to the merger. Other interest and dividend
income increased $135,000 primarily due to an increase in
FHLB stock dividends, which included the payment of a special
dividend of $56,000 in the first quarter of 2015. Interest income
on securities exempt from federal tax decreased $59,000
due to deploying proceeds from security calls and maturities into
loans and for merger-related funding purposes.
Interest expense increased $249,000, or 53.0%,
to $719,000 for the three months ended March 31, 2015 compared
to $470,000 for the three months ended March 31, 2014.
Interest expense on deposits increased $169,000 due
to an increase in average deposits of $178.2 million
primarily due to the merger. Despite the increase in average
balances, the average cost of interest-bearing deposits decreased 4
basis points, primarily related to the repricing of maturing
certificates of deposit to lower rates. Interest expense on other
borrowed funds and short-term
borrowings increased $59,000 and $21,000,
respectively, primarily due to an increase in average
borrowings of $44.0 million.
Provision for Loan Losses. The provision
for loan losses was $300,000 for the three months ended March
31, 2015. There was no provision for loan losses in the three
months ended March 31, 2014. Net charge-offs for the three months
ended March 31, 2015 were $17,000 compared to net charge-offs of
$10,000 for the three months ended March 31, 2014. 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 and determined a provision of
$300,000 was necessary due to loan growth, primarily in indirect
auto loans, and an increase in substandard-rated loans.
Noninterest
Income. Noninterest
income increased $1.1 million to $1.8 million for
the three months ended March 31, 2015 compared to $724,000 for
the three months ended March 31, 2014 primarily due to
a $928,000 increase in insurance commission from the
acquisition of Exchange Underwriters, Inc., an insurance brokerage
subsidiary, as part of the merger. Included in insurance
commissions are $211,000 of contingency fees, which are commissions
that are contingent upon several factors including, but not limited
to, eligible written premiums, earned premiums, incurred losses and
stop loss charges. These contingency fees are typically earned in
the first quarter of the year. Service fees on deposit
accounts increased $122,000 primarily due to check card
fees from deposit accounts acquired in the merger. In addition,
income from bank owned life insurance increased $60,000
due to the acquisition of policies in the merger.
Noninterest Expense. Noninterest
expense increased $2.3 million, or 66.2%, to $5.7
million for the three months ended March 31, 2015 compared
to $3.5 million for the three months ended March 31, 2014.
Salaries and employee benefits increased $1.3 million
primarily due employees retained as a result of the merger as well
as normal salary increases. Occupancy and
equipment increased $152,000 and $133,000,
respectively, primarily due to the acquisition of branches in the
merger and increased costs associated with the prior year upgrade
of the data processing system to accommodate additional account
activity. Advertising increased $136,000 related to a
cooperative marketing agreement at Exchange Underwriters, Inc. and
advertising initiatives to promote the merger. Amortization of core
deposit intangible increased $134,000 due to amortization
of the core deposit intangible from the merger. PA shares
tax increased $86,000 due to an increase in stockholders'
equity as a result of the merger.
Statement of Condition Review
Assets. Total
assets increased $5.1 million, or 0.6%, to $851.5
million at March 31, 2015 compared to $846.3 million at
December 31, 2014. During the three months ended March 31, 2015,
funds generated from deposit growth and maturities and calls of
available-for-sale securities were used to paydown short-term
borrowings and fund loan growth.
Investment securities classified as
available-for-sale decreased $4.2 million, or 4.0%,
to $101.2 million at March 31, 2015 compared to $105.4
million at December 31, 2014. This decrease was primarily the
result of security maturities and calls that were utilized to fund
loans and were partially reinvested in U.S. government agency
securities and obligations of states and political
subdivisions.
Loans, net, increased $5.3 million, or 0.8%,
to $685.7 million at March 31, 2015 compared to $680.5
million at December 31, 2014 primarily due to increases of $5.9
million in consumer loans (largely indirect auto loans) and $2.8
million in residential loans, partially offset by a $2.7 million
decrease in commercial loans.
Liabilities. Total
liabilities increased $3.4 million, or 0.4%,
to $767.8 million at March 31, 2015 compared to $764.4
million at December 31, 2014.
Total deposits increased $11.9 million, or 1.7%,
to $709.4 million at March 31, 2015 compared to $697.5
million at December 31, 2014. There were increases of $9.2
million in broker deposits, $5.4 million in savings, $2.3
million in money market accounts and $1.5 million in demand
deposits, partially offset by decreases of $4.0 million in NOW
accounts and $2.4 million in certificates of deposit. Broker
deposits increased primarily due to the Bank participating in a
reciprocal deposit network, which allows participating institutions
to both send and receive identical amounts simultaneously and
provides increased FDIC insurance coverage on customer deposit
amounts greater than $250,000. The reciprocal deposit network does
not share the same characteristics of traditional broker deposits
because they are based on actual customer relationships. In
addition, during the first quarter, municipal deposit balances
increased due to cyclical collections of property tax receipts. Due
to the low interest rate environment, the Bank has been selective
on promotional interest rates and has concentrated its efforts on
increasing noninterest-bearing accounts by building strong customer
relationships. The Bank attributes the decrease in certificates of
deposit primarily to customer hesitancy to commit to long-term
financial instruments in the prevailing low interest rate
environment.
Short-term borrowings decreased $22.7 million, or
48.6%, to $24.0 million at March 31, 2015 compared
to $46.7 million at December 31, 2014. Conversely, other
borrowed funds increased $13.9 million, or 92.1%,
to $29.1 million at March 31, 2015 compared to $15.1
million at December 31, 2014. Funds generated from deposit growth
were utilized to paydown a portion of short-term borrowings whereas
another portion of short-term borrowings were replaced with
long-term borrowings to decrease the Company's susceptibility to
interest rate risk in the event of rising interest rates.
Stockholders' Equity. Stockholders'
equity increased $1.8 million, or 2.2%, to $83.7
million at March 31, 2015 compared to $81.9 million at
December 31, 2014. During the period, net income was $2.3
million and the unrealized gain position of the security
portfolio increased $331,000. The Company also
paid $855,000 in dividends to stockholders.
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.
Statements contained in this news 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 statement except as may be required by applicable
law or regulation.
CB FINANCIAL SERVICES,
INC. |
SELECTED FINANCIAL
INFORMATION |
|
|
|
(Dollars in thousands, except share and
per share data) |
(Unaudited) March 31,
2015 |
December 31, 2014 |
Selected Financial Condition
Data: |
|
|
Assets |
$ 851,457 |
$ 846,314 |
Cash and cash equivalents |
15,902 |
11,751 |
Securities available-for-sale |
101,217 |
105,449 |
Securities held-to-maturity |
502 |
504 |
Loans receivable, net |
685,706 |
680,451 |
Deposits |
709,438 |
697,494 |
Borrowings |
53,093 |
61,820 |
Stockholders' equity |
83,683 |
81,912 |
|
|
|
|
(Unaudited)
Three Months Ended March 31, |
|
2015 |
2014 |
Selected Operations
Data: |
|
|
Interest and dividend income |
$ 8,175 |
$ 4,578 |
Interest expense |
719 |
470 |
Net interest income |
7,456 |
4,108 |
Provision for loan losses |
300 |
-- |
Net interest income after provision for loan
losses |
7,156 |
4,108 |
Noninterest income |
1,826 |
724 |
Noninterest expense |
5,747 |
3,457 |
Income before income taxes |
3,235 |
1,375 |
Income taxes |
940 |
296 |
Net income |
$ 2,295 |
$ 1,079 |
|
|
|
Dividends per share |
$ 0.21 |
$ 0.21 |
Earnings per share - basic |
0.56 |
0.46 |
Earnings per share - diluted |
0.56 |
0.46 |
|
|
|
Weighted average shares outstanding -
basic |
4,071,462 |
2,344,477 |
Weighted average shares outstanding -
diluted |
4,071,462 |
2,354,977 |
|
|
|
|
(Unaudited) Three
Months Ended March 31, |
|
2015 |
2014 |
Selected Financial
Ratios(1): |
|
|
Return on average assets |
1.09 % |
0.81 % |
Return on average equity |
11.20 |
10.09 |
Average interest-earning assets to average
interest-bearing liabilities |
132.93 |
137.21 |
Average equity to average assets |
9.77 |
7.98 |
Net interest rate spread |
3.77 |
3.24 |
Net interest margin |
3.89 |
3.38 |
Net charge-offs to average loans |
0.01 |
0.01 |
|
|
|
|
(Unaudited) |
|
Period
Ended |
|
|
March 31, 2015 |
December 31,
2014 |
Allowance for loan losses to total loans |
0.79 % |
0.76 % |
Allowance for loan losses to nonperforming
loans |
77.35 |
71.14 |
Nonperforming loans to total loans |
1.02 |
1.06 |
Nonperforming assets to total assets |
0.90 |
0.90 |
Common equity tier 1 capital (to risk
weighted assets) (2) |
12.13 |
N/A |
Tier 1 capital (to risk weighted assets)
(2) |
12.13 |
11.63 |
Total capital (to risk weighted assets)
(2) |
13.05 |
12.50 |
Tier 1 leverage (to adjusted total assets)
(2) |
8.64 |
9.33 |
Common equity tier 1 capital (to risk
weighted assets) (3) |
12.37 |
N/A |
Tier 1 capital (to risk weighted assets)
(3) |
12.37 |
11.82 |
Total capital (to risk weighted assets)
(3) |
13.29 |
13.06 |
Tier 1 leverage (to adjusted total assets)
(3) |
8.80 |
9.48 |
Book value per share |
$ 20.55 |
$ 20.12 |
Outstanding shares |
4,071,462 |
4,071,462 |
|
|
|
(1)
Ratios are calculated on an annualized basis. |
|
|
(2)
Capital ratios are for Community Bank only. |
|
|
(3) Capital ratios are for
CB Financial Services, Inc. |
|
|
|
|
|
Note: |
|
|
Certain items
previously reported may have been reclassified to conform with the
current reporting period's format. |
CONTACT: CB Financial Services, Inc.
Barron P. "Pat" McCune, Jr.
Vice Chairman, President and Chief Executive Officer
Telephone: (724) 225-2400
CB Financial Services (NASDAQ:CBFV)
Historical Stock Chart
From Jun 2024 to Jul 2024
CB Financial Services (NASDAQ:CBFV)
Historical Stock Chart
From Jul 2023 to Jul 2024