CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM:
CBFV), the holding company of Community Bank (the “Bank”) and
Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance
subsidiary of the Bank, today announced its third quarter and
year-to-date 2021 financial results.
Three Months Ended
Nine Months Ended
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
9/30/21
9/30/20
(Dollars in thousands, except per share
data) (Unaudited)
Net Income (Loss) (GAAP)
$
1,983
$
(223)
$
2,845
$
3,079
$
(17,395)
$
4,605
$
(13,719)
Excluding Non-Recurring Items (Non-GAAP)
(1)
(17)
3,440
(353)
40
19,337
3,070
19,261
Adjusted Net Income (Non-GAAP) (1)
$
1,966
$
3,217
$
2,492
$
3,119
$
1,942
$
7,675
$
5,542
Earnings (Loss) per Common Share - Diluted
(GAAP)
$
0.37
$
(0.04)
$
0.52
$
0.57
$
(3.22)
$
0.85
$
(2.54)
Adjusted Earnings per Common Share -
Diluted (Non-GAAP) (1)
$
0.36
$
0.59
$
0.46
$
0.58
$
0.36
$
1.42
$
1.03
(1)
Refer to Explanation of Use of Non-GAAP
Financial Measures and reconciliation of net income (loss) and
adjusted earnings per common share - diluted in this Press
Release.
2021 Third Quarter Financial
Highlights
(Comparisons to three months ended September 30, 2020 unless
otherwise noted)
- Net income was $2.0 million, compared to a net loss of $17.4
million, largely due to noninterest expense reductions as part of
the previously announced bank optimization initiative as well as
the absence in the current year period of non-cash charges from the
prior year period related to goodwill impairment that were due to
economic conditions triggered by the COVID-19 pandemic.
- Adjusted net income (non-GAAP) improved to $2.0 million,
compared to adjusted net income of $1.9 million.
- Earnings per diluted common share (EPS) increased to $0.37 from
loss per diluted common share of $(3.22).
- Adjusted earnings per common share - diluted (non-GAAP) was
$0.36, compared to $0.36.
- Return on average assets (annualized) of 0.54%, compared to
loss on average assets (annualized) of (4.90)%.
- Adjusted return on average assets (annualized) (non-GAAP) of
0.53%, compared to 0.55%.
- Return on average equity (annualized) of 5.93%, compared to
loss on average equity (annualized) of (45.13)%.
- Adjusted return on average equity (annualized) (non-GAAP) of
5.88%, compared to 5.04%.
- Net interest margin (NIM) improved quarter over quarter to
2.88% from 2.84% for the three months ended June 30, 2021. NIM was
3.19% for the prior year period.
- Net interest and dividend income was $10.0 million, compared to
$10.4 million.
- Noninterest income was $2.2 million and remained
consistent.
(Amounts at September 30, 2021; comparisons to December 31,
2020, unless otherwise noted)
- Total loans, including Payroll Protection Program (“PPP”) loans
and loans held for sale, were $1.02 billion, a decrease of $25.7
million.
- Total loans, including loans held for sale and excluding PPP
loans, increased $17.0 million, or 7.0% annualized, to $986.3
million compared to June 30, 2021. Total loans, including loans
held for sale and excluding PPP loans, were $989.7 million at
December 31, 2020.
- Total deposits, including deposits held for sale, were $1.29
billion, an increase of $63.2 million.
- Total assets increased to $1.47 billion, compared to $1.42
billion.
- Book value per share was $24.57, compared to $24.76 and $24.50
at June 30, 2021.
- Tangible book value per share (Non-GAAP) increased to $21.67,
compared to $21.42 and $21.56 at June 30, 2021.
Branch Optimization and Operational
Efficiency Update
As previously announced in February 2021, CB has implemented
strategic initiatives to improve Community Bank’s financial
performance and to position the bank for continued profitable
growth. Since that announcement, the Company has made substantive
progress, including:
- The consolidation of six branches that was completed on June
30, 2021;
- The sale of two branches expected to be finalized in the fourth
quarter of 2021; and
- The identification and enhancement of over 185 individualized
processes within its remaining branch network and operating
environment designed to improve the Bank’s infrastructure, client
experience, efficiency and profitability.
CB presently expects to incur $7.9 million of non-recurring
expenses in 2021 and, as of September 30, 2021, has incurred $6.3
million of expenses related to these items. The expenses include a
$2.3 million writedown on fixed assets and a $1.2 million
impairment of intangible assets associated with the branch
consolidations in the second quarter and the pending branch sales
expected to be finalized in the fourth quarter. In addition, as
part of CB’s branch optimization and operational efficiency
initiatives, the Company incurred $2.9 million of expenses related
to contracted services, employee severance costs, branch lease
impairment, professional fees, data processing fees, legal and
other expenses.
The majority of the remaining expenses to be recognized in 2021
are related to approximately $600,000 in contracted services aimed
at improving the operational and revenue efficiency at the bank in
the long-term. CB anticipates cost savings from this initiative
ranging from approximately $2.5 million to $3.5 million in 2022, as
well as expected enhanced revenue and fee generating capacity in
future years.
In addition, the Company expects an annual reduction in pre-tax
operating expenses in 2021 of approximately $1.0 million, along
with $3.0 million of ongoing pre-tax cost savings as a result of
the branch optimization initiatives.
The Company expects these estimated cost savings to be
incremental to net income beginning in 2022. These estimated cost
savings exclude the favorable impact of the expected premium from
sale of branches expected to be recognized in the fourth quarter of
2021 and currently estimated to be $5.1 million.
Management Commentary
President and CEO John H. Montgomery stated, “The third quarter
reflected many of the positive changes implemented as part of our
branch optimization strategy early in 2021, with substantive
improvement in operating expenses that helped to drive improvements
in net income and quarter-over-quarter growth in book value. The
Bank increased deposits while our commercial loan book grew quarter
over quarter excluding PPP loans that continue to roll-off our
balance sheet. Commercial real-estate lending continued to improve
due to a pipeline of activity in our core Southwestern Pennsylvania
and Ohio Valley markets, and we remain conservatively optimistic
about the overall economic recovery in our geographic regions. Our
focus remains on driving loan production in advance of this
recovery, expanding core deposit relationships with greater
efficiency, and further reducing the overall cost of funds. During
the period, CB improved in all aspects of its asset quality and
we’re pleased to see quarter-over-quarter improvement in NIM
despite a tightening environment.”
Mr. Montgomery continued, “Throughout the first half of 2021,
our goal was to execute on a cost-savings program designed to
enhance the operating efficiency of the Company without any
disruption to our loyal customer base and commercial relationships.
We moved quickly and were transparent, and have been very pleased
to have achieved many of our initial objectives with minimal
disruption. Moving forward, we intend to utilize a streamlined
operating environment to drive revenue and compete with greater
efficiency in core markets where CB has an acknowledged brand
recognition and presence. In the coming months, we are implementing
more digitization throughout the Bank with a review of each
individual process from larger loans to each ATM. We have been very
pleased with our progress to date and expect to drive operating
returns that are better than our peers in local markets. In
addition, we remain committed to CB’s shareholders through the
payment of dividends and an active share buy-back program.”
Dividend Information
The Company’s Board of Directors has declared a $0.24 quarterly
cash dividend per outstanding share of common stock, payable on or
about November 30, 2021, to stockholders of record as of the close
of business on November 19, 2021.
Stock Repurchase Program
On June 10, 2021, CB authorized a program to repurchase up to
$7.5 million of the Company’s outstanding common stock. The program
was effective as of June 14, 2021 and is authorized through June
13, 2022. As of October 25, 2021, the Company had expended $3.1
million to repurchase 135,968 shares at an average price of $23.02
per share.
2021 Third Quarter Financial
Review
Net Interest and Dividend
Income
Net interest and dividend income decreased $406,000, or 3.9%, to
$10.0 million for the three months ended September 30, 2021
compared to $10.4 million for the three months ended September 30,
2020.
- Net interest margin (FTE) (Non-GAAP) decreased 32 basis points
(“bps”) to 2.89% for the three months ended September 30, 2021
compared to 3.21% for the three months ended September 30, 2020.
Net interest margin (GAAP) decreased to 2.88% for the three months
ended September 30, 2021 compared to 3.19% for the three months
ended September 30, 2020. While CB has further controlled its
deposit cost structure as deposit balances increased and benefited
from nonrenewal or repricing of higher cost time deposits, the net
interest margin decreased year-over-year due to the low interest
rate environment decreasing yields on loans and securities. Net
interest margin (GAAP) for the three months ended June 30, 2021 was
2.84%.
- Interest and dividend income decreased $870,000, or 7.5%, to
$10.8 million for the three months ended September 30, 2021
compared to $11.7 million for the three months ended September 30,
2020.
- Interest income on loans decreased $991,000, or 9.3%, to $9.7
million for the three months ended September 30, 2021 compared to
$10.7 million for the three months ended September 30, 2020. The
average balance of loans decreased $31.0 million and the average
yield decreased 28 bps to 3.85% compared to the three months ended
September 30, 2020. Interest and fee income on PPP loans was
$484,000 for the three months ended September 30, 2021 and
contributed 4 bps to loan yield, compared to $454,000 for the three
months ended September 30, 2020, which decreased loan yield 11 bps.
The impact of the accretion of the credit mark on acquired loan
portfolios was $94,000 for the three months ended September 30,
2021 compared to $127,000 for the three months ended September 30,
2020, or 4 bps in the current period compared to 5 bps in the prior
period.
- Interest income on taxable investment securities increased
$90,000, or 12.0%, to $843,000 for the three months ended September
30, 2021 compared to $753,000 for the three months ended September
30, 2020 driven by a $74.4 million increase in average balance and
73 bps decrease in average yield. The Federal Reserve’s
pandemic-driven decision to drop the benchmark interest rate in
2020 resulted in significant calls of U.S. government agency
securities and paydowns on mortgage-backed securities in the
declining interest rate environment, which were replaced with
lower-yielding securities or maintained in cash.
- Other interest and dividend income, which primarily consists of
interest-bearing cash, increased $39,000, or 40.6% to $135,000 for
the three months ended September 30, 2021 compared to $96,000 for
the three months ended September 30, 2020. While the average yield
remained comparable to the three months ended September 30, 2020,
the average balance of other interest-earning assets increased
$41.3 million primarily from buildup of cash as a result of
securities activity, PPP loan funds and government stimulus
payments deposited with the Bank.
- Interest expense decreased $464,000, or 37.4%, to $776,000 for
the three months ended September 30, 2021 compared to $1.2 million
for the three months ended September 30, 2020.
- Interest expense on deposits decreased $435,000, or 37.8%, to
$715,000 for the three months ended September 30, 2021 compared to
$1.2 million for the three months ended September 30, 2020. While
average interest-earning deposit balances increased $33.7 million
compared to the three months ended September 30, 2020, interest
rate declines for all products driven by pandemic-related market
interest rate cuts resulted in a 21 bp, or 39.5%, decrease in
average cost compared to the three months ended September 30, 2020.
In addition, the average balance of time deposits and the related
average cost decreased $29.5 million and 37 bps, respectively.
Provision for Loan Losses
There was no provision for loan losses for the three months
ended September 30, 2021 compared to $1.2 million for the three
months ended September 30, 2020. Specific loan loss reserves on
impaired loans decreased in the current quarter. This was partially
offset by an increase in loan balances that require a loan loss
reserve, which excludes PPP loans and loans held for sale.
Noninterest income
Noninterest income increased $25,000, or 1.2%, to $2.2 million
for the three months ended September 30, 2021, and remained
consistent with $2.2 million for the three months ended September
30, 2020. The increase was largely due to lower net gains on
securities and loans compared to the prior period, offset by an
increase in other income due to the recognition of a $269,000
valuation allowance adjustment on mortgage servicing rights in the
prior period and increase in service fees.
Noninterest Expense
Noninterest expense decreased $19.2 million, or 66.3%, to $9.8
million for the three months ended September 30, 2021 compared to
$29.0 million for the three months ended September 30, 2020. The
decrease was largely due to an $18.7 million goodwill impairment
and an $884,000 writedown on fixed assets recognized in the prior
year period.
Statement of Financial Condition
Review
Assets
Total assets increased $58.1 million, or 4.1%, to $1.47 billion
at September 30, 2021, compared to $1.42 billion at December 31,
2020. The change is primarily due to higher cash and due from banks
and securities.
- Cash and due from banks increased $12.6 million, or 7.8%, to
$173.5 million at September 30, 2021, compared to $160.9 million at
December 31, 2020. The change is primarily due to an increase in
deposits as further described below in the Liabilities
section.
- Securities increased $76.0 million, or 52.3%, to $221.4 million
at September 30, 2021, compared to $145.4 million at December 31,
2020. Current period activity included $119.9 million of purchases,
$29.6 million of paydowns, and $12.0 million of sales, primarily of
mortgage-backed securities, which resulted in the recognition of a
$231,000 gain. The purchases were made to earn a higher yield on
excess cash. The sales recognized gains on higher-interest
securities with faster prepayment speeds. In addition, there was a
$2.9 million decrease in the market value of the debt securities
portfolio and a $251,000 gain in market value in the equity
securities portfolio, which is primarily comprised of bank
stocks.
Payroll Protection Program (“PPP”)
Update
- PPP loans decreased $22.4 million to $32.7 million at September
30, 2021 compared to $55.1 million at December 31, 2020, which
includes $34.6 million in originations in the current period offset
by loan forgiveness.
- $1.1 million of net PPP loan origination fees were unearned at
December 31, 2020. Due to activity in the current period, $1.4
million of net PPP loan origination fees were unearned at September
30, 2021. $380,000 of net PPP loan origination fees were earned in
the third quarter of 2021 compared to $489,000 for the three months
ended June 30, 2021.
Loans and Credit Quality
- Total loans held for investment decreased $43.2 million to
$1.00 billion at September 30, 2021. This includes the impact of
reclassifying $17.4 million of loans to held for sale. Excluding
the net decline of $22.4 million in PPP loans in the current period
and including $17.4 million of held for sale loans, loans declined
$3.4 million. Compared to June 30, 2021, total loans, including
loans held for sale and excluding PPP loans, increased $17.0
million, primarily from $23.1 million in commercial real estate
loan growth.
- The allowance for loan losses was $11.6 million at September
30, 2021 compared to $12.8 million at December 31, 2020. There was
a net recovery of $1.2 million of provision for loan losses in the
current year primarily due to a decrease in specific reserves on
impaired loans and improvements in the economic and industry
outlook combined with a decrease in loan balances that require a
loan loss reserve, which excludes PPP loans and loans held for
sale. A $20.8 million decrease in net reservable loans in the
current period, which excludes PPP loans and includes the
reclassification of $17.4 million of loans to held for sale that do
not require a reserve, as well as a decrease in specifically
impaired loans and improving economic and industry conditions
contributed to the net recovery in the current period. As a result,
the allowance for loan losses to total loans was 1.16% at September
30, 2021 compared to 1.22% at December 31, 2020. The allowance for
loan losses to total loans, excluding PPP loans, was 1.20% at
September 30, 2021 compared to 1.29% at December 31, 2020.
- Net recoveries for the three months ended September 30, 2021
were $37,000, or (0.01)% of average loans on an annualized basis.
Net charge-offs for the three months ended September 30, 2020 were
$68,000, or 0.03% of average loans on an annualized basis. Net
recoveries for the nine months ended September 30, 2021 were
$10,000, or 0.00% of average loans on an annualized basis. Net
charge-offs for the nine months ended September 30, 2020 were
$87,000, or 0.01% of average loans on an annualized basis.
- Nonperforming loans, which includes nonaccrual loans, accruing
loans past due 90 days or more, and accruing loans that are
considered troubled debt restructurings within the loans held for
investment portfolio, were $10.9 million at September 30, 2021
compared to $14.5 million at December 31, 2020. Nonperforming loans
to total loans ratio was 1.09% at September 30, 2021 compared to
1.39% at December 31, 2020. A $3.6 million nonaccrual commercial
real estate loan under agreement to sell and transferred into the
held for sale portfolio at September 30, 2021 was sold in October
and will result in the recognition of an $897,000 gain on sale of
loans in the fourth quarter of 2021. This loan previously incurred
a $931,000 charge-off in the prior year.
- There were no loans in forbearance at September 30, 2021
compared to 9 loans totaling $7.8 million at June 30, 2021, and 31
loans totaling $24.1 million at December 31, 2020. The remaining
loans exited forbearance in July and begun making regularly
scheduled payments.
Liabilities
Total liabilities increased $61.6 million, or 4.8%, to $1.34
billion at September 30, 2021 compared to $1.28 billion at December
31, 2020.
Deposits
- Total deposits, including deposits held for sale, increased
$63.2 million to $1.29 billion as of September 30, 2021 compared to
$1.22 billion at December 31, 2020. Noninterest bearing demand
deposits, NOW accounts and savings accounts increased $47.8
million, $15.6 million and $18.4 million, respectively, partially
offset by a decrease of $27.6 million in time deposits. IRS and
stimulus-related payments totaled $29.9 million in the first
quarter and the impact of the PPP loans that were originated and
the proceeds of which were initially deposited at the Bank was
approximately $28.7 million. Annualized deposit growth rate was
6.9% including IRS and PPP loan deposits. Average total deposits
decreased $5.7 million, primarily in time deposits, for the three
months ended September 30, 2021 compared to the three months ended
June 30, 2021.
Borrowed Funds
- Short-term borrowings increased $1.6 million, or 3.9%, to $42.6
million at September 30, 2021, compared to $41.1 million at
December 31, 2020. At September 30, 2021 and December 31, 2020,
short-term borrowings were comprised entirely of securities sold
under agreements to repurchase, which are related to business
deposit customers whose funds, above designated target balances,
are transferred into an overnight interest-earning investment
account by purchasing securities from the Bank’s investment
portfolio under an agreement to repurchase. $10.7 million was
excluded from short-term borrowings at September 30, 2021 and
reported as deposits held for sale.
- Other borrowed funds decreased $2.0 million to $6.0 million at
September 30, 2021 due to a Federal Home Loan Bank borrowing that
matured in the current period.
Stockholders’ Equity
Stockholders’ equity decreased $3.5 million, or 2.6%, to $131.0
million at September 30, 2021, compared to $134.5 million at
December 31, 2020. Accumulated other comprehensive income decreased
$2.3 million primarily due to market interest rate conditions on
the Bank’s debt securities. In addition, the Company repurchased
$2.5 million of its common stock as part of its stock repurchase
program.
Book value per share
Book value per share was $24.57 at September 30, 2021 compared
to $24.76 at December 31, 2020, a decrease of $0.19. Book value per
share increased $0.07 compared to $24.50 at June 30, 2021.
Tangible book value per share (Non-GAAP) was $21.67 at September
30, 2021, compared to $21.42 at December 31, 2020, an increase of
$0.25. Tangible book value per share increased $0.11 compared to
$21.56 at June 30, 2021. 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 and provides commercial and
personal insurance brokerage services through Exchange
Underwriters, Inc., its wholly owned subsidiary.
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, the scope and duration of economic contraction as a
result of the COVID-19 pandemic and its effects on the Company’s
business and that of the Company’s customers, 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
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
ASSETS
Cash and Due From Banks
$
173,523
$
172,010
$
230,000
$
160,911
$
112,169
Securities
221,351
208,472
142,156
145,400
158,956
Loans Held for Sale
17,407
11,409
—
—
—
Loans
Real Estate:
Residential
317,373
322,480
339,596
344,142
343,955
Commercial
379,621
360,518
370,118
373,555
353,904
Construction
78,075
85,187
77,714
72,600
69,178
Commercial and Industrial
Commercial and Industrial
69,657
70,666
68,551
71,717
73,287
PPP
32,703
49,525
60,380
55,096
71,028
Consumer
112,087
106,404
111,650
113,854
117,364
Other
12,083
12,666
13,688
13,789
22,169
Total Loans
1,001,599
1,007,446
1,041,697
1,044,753
1,050,885
Allowance for Loan Losses
(11,581)
(11,544)
(12,725)
(12,771)
(13,780)
Loans, Net
990,018
995,902
1,028,972
1,031,982
1,037,105
Premises and Equipment Held for Sale
795
795
—
—
—
Premises and Equipment, Net
18,502
18,682
20,240
20,302
20,439
Bank-Owned Life Insurance
25,190
25,052
24,916
24,779
24,639
Goodwill
9,732
9,732
9,732
9,732
9,732
Intangible Assets, Net
5,740
6,186
7,867
8,399
8,931
Accrued Interest and Other Assets
12,560
13,373
12,938
15,215
20,905
Total Assets
$
1,474,818
$
1,461,613
$
1,476,821
$
1,416,720
$
1,392,876
LIABILITIES
Deposits Held for Sale
$
102,647
$
102,557
$
—
$
—
$
—
Deposits
Non-Interest Bearing Demand Deposits
373,320
368,452
377,137
340,569
335,287
Interest Bearing Demand Accounts
244,004
246,920
280,929
259,870
245,850
Money Market Accounts
190,426
176,824
198,975
199,029
188,958
Savings Accounts
232,679
226,639
246,725
235,088
232,691
Time Deposits
144,727
154,718
180,697
190,013
196,250
Total Deposits
1,185,156
1,173,553
1,284,463
1,224,569
1,199,036
Short-Term Borrowings
42,623
39,054
45,352
41,055
42,061
Other Borrowings
6,000
6,000
6,000
8,000
11,000
Accrued Interest and Other Liabilities
7,405
7,913
7,230
8,566
7,480
Total Liabilities
1,343,831
1,329,077
1,343,045
1,282,190
1,259,577
STOCKHOLDERS’ EQUITY
$
130,987
$
132,536
$
133,776
$
134,530
$
133,299
Three Months Ended
Nine Months Ended
Selected Operating Data
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
9/30/21
9/30/20
Interest and Dividend Income
Loans, Including Fees
$
9,718
$
9,936
$
10,146
$
10,833
$
10,709
$
29,800
$
32,050
Securities:
Taxable
843
635
646
725
753
2,124
2,894
Tax-Exempt
71
74
78
78
79
223
291
Dividends
19
24
20
20
19
63
59
Other Interest and Dividend Income
135
151
98
99
96
384
418
Total Interest and Dividend Income
10,786
10,820
10,988
11,755
11,656
32,594
35,712
Interest Expense
Deposits
715
827
947
1,036
1,150
2,489
4,136
Short-Term Borrowings
25
24
23
25
28
72
112
Other Borrowings
36
35
41
60
62
112
194
Total Interest Expense
776
886
1,011
1,121
1,240
2,673
4,442
Net Interest and Dividend Income
10,010
9,934
9,977
10,634
10,416
29,921
31,270
(Recovery) Provision for Loan Losses
—
(1,200)
—
—
1,200
(1,200)
4,000
Net Interest and Dividend Income After
(Recovery) Provision for Loan Losses
10,010
11,134
9,977
10,634
9,216
31,121
27,270
Noninterest Income:
Service Fees
602
614
546
560
554
1,762
1,646
Insurance Commissions
1,194
1,209
1,595
1,403
1,079
3,998
3,475
Other Commissions
93
173
165
105
76
431
374
Net Gain on Sales of Loans
49
31
86
388
435
166
1,003
Net Gain (Loss) on Securities
24
11
447
213
(59)
482
20
Net Gain on Purchased Tax Credits
18
17
18
16
15
53
46
Net Loss on Disposal of Fixed Assets
—
(3)
—
(13)
(65)
(3)
(48)
Income from Bank-Owned Life Insurance
138
136
137
140
140
411
417
Other Income (Loss)
80
31
180
(34)
(2)
291
(240)
Total Noninterest Income
2,198
2,219
3,174
2,778
2,173
7,591
6,693
Noninterest Expense:
Salaries and Employee Benefits
4,787
5,076
4,894
5,126
5,124
14,757
14,683
Occupancy
615
1,024
710
606
759
2,349
2,191
Equipment
205
311
266
234
220
782
701
Data Processing
541
607
518
476
482
1,666
1,367
FDIC Assessment
293
249
250
344
172
792
493
PA Shares Tax
224
225
265
350
355
714
963
Contracted Services
1,441
750
687
577
531
2,878
1,471
Legal and Professional Fees
180
419
189
185
161
788
567
Advertising
225
193
140
178
148
558
486
Other Real Estate Owned (Income)
(89)
(26)
(38)
(39)
(12)
(153)
(30)
Amortization of Intangible Assets
446
503
532
532
532
1,481
1,596
Intangible Assets and Goodwill
Impairment
—
1,178
—
—
18,693
1,178
18,693
Writedown of Fixed Assets
2
2,268
—
240
884
2,270
884
Other
903
945
982
916
919
2,830
2,977
Total Noninterest Expense
9,773
13,722
9,395
9,725
28,968
32,890
47,042
Income (Loss) Before Income Tax Expense
(Benefit)
2,435
(369)
3,756
3,687
(17,579)
5,822
(13,079)
Income Tax Expense (Benefit)
452
(146)
911
608
(184)
1,217
640
Net Income (Loss)
$
1,983
$
(223)
$
2,845
$
3,079
$
(17,395)
$
4,605
$
(13,719)
Three Months Ended
Nine Months Ended
Per Common Share Data
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
9/30/21
9/30/20
Dividends Per Common Share
$
0.24
$
0.24
$
0.24
$
0.24
$
0.24
$
0.72
$
0.72
Earnings (Loss) Per Common Share -
Basic
0.37
(0.04)
0.52
0.57
(3.22)
0.85
(2.54)
Earnings (Loss) Per Common Share -
Diluted
0.37
(0.04)
0.52
0.57
(3.22)
0.85
(2.54)
Adjusted Earnings Per Common Share -
Diluted (Non-GAAP) (1)
0.36
0.59
0.46
0.58
0.36
1.42
1.03
Weighted Average Common Shares Outstanding
- Basic
5,373,032
5,432,234
5,434,374
5,404,874
5,395,342
5,412,989
5,406,710
Weighted Average Common Shares Outstanding
- Diluted
5,390,128
5,432,234
5,436,881
5,406,068
5,395,342
5,420,792
5,406,710
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
Common Shares Outstanding
5,330,401
5,409,077
5,434,374
5,434,374
5,398,712
Book Value Per Common Share
$
24.57
$
24.50
$
24.62
$
24.76
$
24.69
Tangible Book Value per Common Share
(1)
21.67
21.56
21.38
21.42
21.23
Stockholders’ Equity to Assets
8.9
%
9.1
%
9.1
%
9.5
%
9.6
%
Tangible Common Equity to Tangible Assets
(1)
7.9
8.1
8.0
8.3
8.3
Three Months Ended
Nine Months Ended
Selected Financial Ratios (2)
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
9/30/21
9/30/20
Return on Average Assets
0.54
%
(0.06)
%
0.81
%
0.87
%
(4.90)
%
0.42
%
(1.34)
%
Adjusted Return on Average Assets (1)
0.53
0.87
0.71
0.88
0.55
0.70
0.54
Return on Average Equity
5.93
(0.66)
8.54
9.13
(45.13)
4.59
(11.99)
Adjusted Return on Average Equity (1)
5.88
9.57
7.48
9.25
5.04
7.65
4.84
Average Interest-Earning Assets to Average
Interest-Bearing Liabilities
146.78
146.82
142.98
141.58
141.98
145.56
139.30
Average Equity to Average Assets
9.03
9.08
9.48
9.49
10.85
9.19
11.19
Net Interest Rate Spread
2.77
2.72
2.91
3.07
3.03
2.80
3.15
Net Interest Rate Spread (FTE) (1)
2.78
2.74
2.92
3.08
3.05
2.81
3.17
Net Interest Margin
2.88
2.84
3.04
3.21
3.19
2.92
3.34
Net Interest Margin (FTE) (1)
2.89
2.85
3.05
3.22
3.21
2.93
3.35
Net (Recoveries) Charge-offs to Average
Loans
(0.01)
(0.01)
0.02
0.39
0.03
—
0.01
Efficiency Ratio
80.05
112.91
71.44
72.51
230.11
87.68
123.92
Adjusted Efficiency Ratio (1)
77.27
80.68
70.06
68.06
69.78
75.92
68.17
Asset Quality Ratios
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
Allowance for Loan Losses to Total
Loans
1.16
%
1.15
%
1.22
%
1.22
%
1.31
%
Allowance for Loan Losses to Total Loans,
Excluding PPP Loans (Non-GAAP) (1)
1.20
1.21
1.30
1.29
1.41
Allowance for Loan Losses to Nonperforming
Loans (3)
106.18
74.92
89.29
88.15
91.84
Allowance for Loan Losses to Noncurrent
Loans (4)
135.37
90.83
118.08
117.20
114.01
Delinquent and Nonaccrual Loans to Total
Loans (4) (5)
0.97
1.37
1.18
1.50
1.23
Nonperforming Loans to Total Loans (3)
1.09
1.53
1.37
1.39
1.43
Noncurrent Loans to Total Loans (4)
0.85
1.26
1.03
1.04
1.15
Nonperforming Assets to Total Assets
(6)
0.74
1.07
0.98
1.04
1.09
Capital Ratios (7)
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
Common Equity Tier 1 Capital (to Risk
Weighted Assets)
11.53
%
11.67
%
11.85
%
11.79
%
11.62
%
Tier 1 Capital (to Risk Weighted
Assets)
11.53
11.67
11.85
11.79
11.62
Total Capital (to Risk Weighted
Assets)
12.78
12.92
13.10
13.04
12.88
Tier 1 Leverage (to Adjusted Total
Assets)
7.38
7.23
7.87
7.81
7.63
(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 nonaccrual
loans, accruing loans that are 90 days or more past due, and
troubled debt restructured loans.
(4)
Noncurrent loans consist of nonaccrual
loans and accruing loans that are 90 days or more past due.
(5)
Delinquent loans consist of accruing loans
that are 30 days or more past due.
(6)
Nonperforming assets consist of
nonperforming loans and other real estate owned.
(7)
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, 2021
June 30, 2021
March 31, 2021
December 31, 2020
September 30, 2020
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)
$
1,004,474
$
9,740
3.85
%
$
1,016,868
$
9,959
3.93
%
$
1,031,853
$
10,168
4.00
%
$
1,032,942
$
10,860
4.18
%
$
1,035,426
$
10,744
4.13
%
Debt Securities
Taxable
197,763
843
1.71
124,685
635
2.04
122,883
646
2.10
133,026
725
2.18
123,332
753
2.44
Exempt From Federal Tax
11,647
90
3.09
12,276
94
3.06
12,943
96
2.97
13,006
96
2.95
13,054
97
2.97
Equity Securities
2,655
19
2.86
2,649
24
3.62
2,632
20
3.04
2,612
20
3.06
2,580
19
2.95
Other Interest-Earning Assets
164,447
135
0.33
246,392
151
0.25
161,871
98
0.25
137,000
99
0.29
123,171
96
0.31
Total Interest-Earning Assets
1,380,986
10,827
3.11
1,402,870
10,863
3.11
1,332,182
11,028
3.36
1,318,586
11,800
3.56
1,297,563
11,709
3.59
Noninterest-Earning Assets
88,291
82,794
92,550
94,262
115,567
Total Assets
$
1,469,277
$
1,485,664
$
1,424,732
$
1,412,848
$
1,413,130
Liabilities and Stockholders'
Equity
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits (3)
$
275,411
48
0.07
%
$
275,752
55
0.08
%
$
259,065
77
0.12
$
252,521
83
0.13
$
245,977
99
0.16
%
Savings (3)
251,801
21
0.03
247,238
25
0.04
239,850
32
0.05
232,647
32
0.05
230,567
32
0.06
Money Market (3)
198,167
55
0.11
199,652
71
0.14
197,395
98
0.20
198,983
131
0.26
185,644
140
0.30
Time Deposits (3)
168,654
591
1.39
177,506
676
1.53
187,114
740
1.60
193,194
790
1.63
198,184
879
1.76
Total Interest-Bearing Deposits (3)
894,033
715
0.32
900,148
827
0.37
883,424
947
0.43
877,345
1,036
0.47
860,372
1,150
0.53
Short-Term Borrowings
Securities Sold Under Agreements to
Repurchase
40,818
25
0.24
49,325
24
0.20
41,094
23
0.23
43,468
25
0.23
42,512
28
0.26
Other Borrowings
6,000
36
2.38
6,000
35
2.34
7,200
41
2.31
10,543
60
2.26
11,000
62
2.24
Total Interest-Bearing Liabilities
940,851
776
0.33
955,473
886
0.37
931,718
1,011
0.44
931,356
1,121
0.48
913,884
1,240
0.54
Noninterest-Bearing Demand Deposits
387,746
387,317
349,108
338,223
337,441
Other Liabilities
8,019
7,999
8,869
9,176
8,477
Total Liabilities
1,336,616
1,350,789
1,289,695
1,278,755
1,259,802
Stockholders' Equity
132,661
134,875
135,037
134,093
153,328
Total Liabilities and Stockholders'
Equity
$
1,469,277
$
1,485,664
$
1,424,732
$
1,412,848
$
1,413,130
Net Interest Income (FTE)
(Non-GAAP) (4)
10,051
9,977
10,017
10,679
10,469
Net Interest-Earning Assets (5)
440,135
447,397
400,464
387,230
383,679
Net Interest Rate Spread (FTE)
(Non-GAAP) (4) (6)
2.78
%
2.74
%
2.92
3.08
3.05
%
Net Interest Margin (FTE)
(Non-GAAP) (4)(7)
2.89
2.85
3.05
3.22
3.21
PPP Loans
40,313
484
4.76
57,661
636
4.42
56,945
676
4.81
64,914
768
4.71
70,571
454
2.56
(1)
Annualized based on three months ended
results.
(2)
Net of the allowance for loan losses and
includes nonaccrual loans with a zero yield and Loans Held for
Sale.
(3)
Includes Deposits Held for Sale.
(4)
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.
(5)
Net interest-earning assets represent
total interest-earning assets less total interest-bearing
liabilities.
(6)
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.
(7)
Net interest margin represents annualized
net interest income divided by average total interest-earning
assets.
AVERAGE BALANCES AND
YIELDS
Nine Months Ended
September 30, 2021
September 30, 2020
Average
Balance
Interest
and
Dividends
Yield /
Cost (7)
Average
Balance
Interest
and
Dividends
Yield /
Cost (7)
(Dollars in thousands) (Unaudited)
Assets:
Interest-Earning Assets:
Loans, Net (1)
$
1,017,632
$
29,872
3.92
%
$
1,000,157
$
32,152
4.29
%
Debt Securities
Taxable
148,718
2,124
1.90
139,691
2,894
2.76
Exempt From Federal Tax
12,284
282
3.06
14,660
354
3.22
Marketable Equity Securities
2,645
63
3.18
2,575
59
3.06
Other Interest-Earning Assets
190,913
384
0.27
95,040
418
0.59
Total Interest-Earning Assets
1,372,192
32,725
3.19
1,252,123
35,877
3.83
Noninterest-Earning Assets
87,863
114,271
Total Assets
$
1,460,055
$
1,366,394
Liabilities and Stockholders'
Equity
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits (2)
$
270,136
181
0.09
%
$
236,293
506
0.29
%
Savings (2)
246,340
78
0.04
225,473
156
0.09
Money Market (2)
198,408
223
0.15
183,103
576
0.42
Time Deposits (2)
177,690
2,007
1.51
206,463
2,898
1.87
Total Interest-Bearing Deposits (2)
892,574
2,489
0.37
851,332
4,136
0.65
Short-Term Borrowings
Securities Sold Under Agreements to
Repurchase
43,745
72
0.22
35,923
112
0.42
Other Borrowings
6,396
112
2.34
11,591
194
2.24
Total Interest-Bearing Liabilities
942,715
2,673
0.38
898,846
4,442
0.66
Noninterest-Bearing Demand Deposits
374,865
305,677
Other Liabilities
8,293
9,025
Total Liabilities
1,325,873
1,213,548
Stockholders' Equity
134,182
152,846
Total Liabilities and Stockholders'
Equity
$
1,460,055
$
1,366,394
Net Interest Income (FTE) (Non-GAAP)
(3)
30,052
31,435
Net Interest-Earning Assets (3)(4)
429,477
353,277
Net Interest Rate Spread (FTE) (Non-GAAP)
(3)(5)
2.81
%
3.17
%
Net Interest Margin (FTE) (Non-GAAP)
(3)(6)
2.93
3.35
PPP Loans
51,579
1,797
4.66
39,241
770
2.62
(1)
Net of the allowance for loan losses and
includes nonaccrual loans with a zero yield and Loans Held for
Sale.
(2)
Includes Deposits Held for Sale.
(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 net
interest income divided by average total interest-earning
assets.
(7)
Annualized.
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 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.
Three Months Ended
Nine Months Ended
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
9/30/21
9/30/20
(Dollars in thousands, except share and
per share data) (Unaudited)
Net Income (Loss) (GAAP)
$
1,983
$
(223)
$
2,845
$
3,079
$
(17,395)
$
4,605
$
(13,719)
Adjustments
(Gain) Loss on Sale of Securities
(24)
(11)
(447)
(213)
59
(482)
(20)
Loss on Disposal of Fixed Assets
—
3
—
13
65
3
48
Tax effect
5
2
94
42
(26)
101
(6)
Non-Cash Charges:
Intangible Assets and Goodwill
Impairment
—
1,178
—
—
18,693
1,178
18,693
Writedown on Fixed Assets
2
2,268
—
240
884
2,270
884
Tax Effect
—
—
—
(42)
(338)
—
(338)
Adjusted Net Income (Non-GAAP)
$
1,966
$
3,217
$
2,492
$
3,119
$
1,942
$
7,675
$
5,542
Weighted-Average Diluted Common Shares and
Common Stock Equivalents Outstanding
5,390,128
5,432,234
5,436,881
5,406,068
5,395,342
5,420,792
5,406,710
Earnings (Loss) per Common Share - Diluted
(GAAP)
$
0.37
$
(0.04)
$
0.52
$
0.57
$
(3.22)
$
0.85
$
(2.54)
Adjusted Earnings per Common Share -
Diluted (Non-GAAP)
$
0.36
$
0.59
$
0.46
$
0.58
$
0.36
$
1.42
$
1.03
Net Income (Loss) (GAAP) (Numerator)
$
1,983
$
(223)
$
2,845
$
3,079
$
(17,395)
$
4,605
$
(13,719)
Annualization Factor
3.97
4.01
4.06
3.98
3.98
1.34
1.34
Average Assets (Denominator)
1,469,277
1,485,664
1,424,732
1,412,848
1,413,130
1,460,055
1,366,394
Return on Average Assets (GAAP)
0.54
%
(0.06)
%
0.81
%
0.87
%
(4.90)
%
0.42
%
(1.34)
%
Adjusted Net Income (Non-GAAP)
(Numerator)
$
1,966
$
3,217
$
2,492
$
3,119
$
1,942
$
7,675
$
5,542
Annualization Factor
3.97
4.01
4.06
3.98
3.98
1.34
1.34
Average Assets (Denominator)
1,469,277
1,485,664
1,424,732
1,412,848
1,413,130
1,460,055
1,366,394
Adjusted Return on Average Assets
(Non-GAAP)
0.53
%
0.87
%
0.71
%
0.88
%
0.55
%
0.70
%
0.54
%
Three Months Ended
Nine Months Ended
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
9/30/21
9/30/20
(Dollars in thousands) (Unaudited)
Net Income (Loss) (GAAP) (Numerator)
$
1,983
$
(223)
$
2,845
$
3,079
$
(17,395)
$
4,605
$
(13,719)
Annualization Factor
3.97
4.01
4.06
3.98
3.98
1.34
1.34
Average Equity (Denominator) (GAAP)
132,661
134,875
135,037
134,093
153,328
134,182
152,846
Return on Average Equity (GAAP)
5.93
%
(0.66)
%
8.54
%
9.13
%
(45.13)
%
4.59
%
(11.99)
%
Adjusted Net Income (Non-GAAP)
(Numerator)
$
1,966
$
3,217
$
2,492
$
3,119
$
1,942
$
7,675
$
5,542
Annualization Factor
3.97
4.01
4.06
3.98
3.98
1.34
1.34
Average Equity (Denominator) (GAAP)
132,661
134,875
135,037
134,093
153,328
134,182
152,846
Adjusted Return on Average Equity
(Non-GAAP)
5.88
%
9.57
%
7.48
%
9.25
%
5.04
%
7.65
%
4.84
%
Tangible book value per common share is a non-GAAP measure and
is calculated based on tangible common equity divided by period-end
common shares outstanding. Tangible common equity to tangible
assets is a non-GAAP measure and is calculated based on tangible
common equity divided by tangible assets. We believe these non-GAAP
measures serve as useful tools to help evaluate the strength and
discipline of the Company's capital management strategies and as an
additional, conservative measure of the Company’s total value.
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
(Dollars in thousands, except share and
per share data) (Unaudited)
Assets (GAAP)
$
1,474,818
$
1,461,613
$
1,476,821
$
1,416,720
$
1,392,876
Goodwill and Intangible Assets, Net
(15,472)
(15,918)
(17,599)
(18,131)
(18,663)
Tangible Assets (Non-GAAP) (Numerator)
$
1,459,346
$
1,445,695
$
1,459,222
$
1,398,589
$
1,374,213
Stockholders' Equity (GAAP)
$
130,987
$
132,536
$
133,776
$
134,530
$
133,299
Goodwill and Intangible Assets, Net
(15,472)
(15,918)
(17,599)
(18,131)
(18,663)
Tangible Common Equity or Tangible Book
Value (Non-GAAP) (Denominator)
$
115,515
$
116,618
$
116,177
$
116,399
$
114,636
Stockholders’ Equity to Assets (GAAP)
8.9
%
9.1
%
9.1
%
9.5
%
9.6
%
Tangible Common Equity to Tangible Assets
(Non-GAAP)
7.9
%
8.1
%
8.0
%
8.3
%
8.3
%
Common Shares Outstanding
(Denominator)
5,330,401
5,409,077
5,434,374
5,434,374
5,398,712
Book Value per Common Share (GAAP)
$
24.57
$
24.50
$
24.62
$
24.76
$
24.69
Tangible Book Value per Common Share
(Non-GAAP)
$
21.67
$
21.56
$
21.38
$
21.42
$
21.23
Interest income on interest-earning assets, net interest rate
spread and net interest margin are presented on a fully
tax-equivalent (“FTE”) basis. The FTE basis adjusts for the tax
benefit of income on certain tax-exempt loans and securities using
the federal statutory income tax rate of 21 percent. We believe the
presentation of net interest income on a FTE basis ensures
comparability of net interest income arising from both taxable and
tax-exempt sources and is consistent with industry practice. The
following table reconciles net interest income, net interest spread
and net interest margin on a FTE basis for the periods
indicated:
Three Months Ended
Nine Months Ended
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
9/30/21
9/30/20
(Dollars in thousands) (Unaudited)
Interest Income (GAAP)
$
10,786
$
10,820
$
10,988
$
11,755
$
11,656
$
32,594
$
35,712
Adjustment to FTE Basis
41
43
40
45
53
131
165
Interest Income (FTE) (Non-GAAP)
10,827
10,863
11,028
11,800
11,709
32,725
35,877
Interest Expense (GAAP)
776
886
1,011
1,121
1,240
2,673
4,442
Net Interest Income (FTE) (Non-GAAP)
$
10,051
$
9,977
$
10,017
$
10,679
$
10,469
$
30,052
$
31,435
Net Interest Rate Spread (GAAP)
2.77
%
2.72
%
2.91
%
3.07
%
3.03
%
2.80
%
3.15
%
Adjustment to FTE Basis
0.01
0.02
0.01
0.01
0.02
0.01
0.02
Net Interest Rate Spread (FTE)
(Non-GAAP)
2.78
2.74
2.92
3.08
3.05
2.81
3.17
Net Interest Margin (GAAP)
2.88
%
2.84
%
3.04
%
3.21
%
3.19
%
2.92
%
3.34
%
Adjustment to FTE Basis
0.01
0.01
0.01
0.01
0.02
0.01
0.01
Net Interest Margin (FTE) (Non-GAAP)
2.89
2.85
3.05
3.22
3.21
2.93
3.35
Adjusted efficiency ratio excludes the effect of certain
non-recurring or non-cash items and represents adjusted noninterest
expense divided by adjusted operating revenue. The Company
evaluates its operational efficiency based on its adjusted
efficiency ratio and believes it provides additional perspective on
its ongoing performance as well as peer comparability.
Three Months Ended
Nine Months Ended
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
9/30/21
9/30/20
(Dollars in thousands) (Unaudited)
Noninterest Expense (GAAP)
$
9,773
$
13,722
$
9,395
$
9,725
$
28,968
$
32,890
$
47,042
Net Interest and Dividend Income
(GAAP)
10,010
9,934
9,977
10,634
10,416
29,921
31,270
Noninterest Income (GAAP)
2,198
2,219
3,174
2,778
2,173
7,591
6,693
Operating Revenue (GAAP)
12,208
12,153
13,151
13,412
12,589
37,512
37,963
Efficiency Ratio (GAAP)
80.05
%
112.91
%
71.44
%
72.51
%
230.11
%
87.68
%
123.92
%
Noninterest Expense (GAAP)
$
9,773
$
13,722
$
9,395
$
9,725
$
28,968
$
32,890
$
47,042
Less:
Other Real Estate Owned (Income)
(89)
(26)
(38)
(39)
(12)
(153)
(30)
Amortization of Intangible Assets
446
503
532
532
532
1,481
1,596
Intangible Assets and Goodwill
Impairment
—
1,178
—
—
18,693
1,178
18,693
Writedown on Fixed Assets
2
2,268
—
240
884
2,270
884
Adjusted Noninterest Expense
(Non-GAAP)
$
9,414
$
9,799
$
8,901
$
8,992
$
8,871
$
28,114
$
25,899
Net Interest and Dividend Income
(GAAP)
10,010
9,934
9,977
10,634
10,416
29,921
31,270
Noninterest Income (GAAP)
2,198
2,219
3,174
2,778
2,173
7,591
6,693
Less:
Net Gain (Loss) on Securities
24
11
447
213
(59)
482
20
Net Loss on Disposal of Fixed Assets
—
(3)
—
(13)
(65)
(3)
(48)
Adjusted Noninterest Income (Non-GAAP)
2,174
2,211
2,727
2,578
2,297
7,112
6,721
Adjusted Operating Revenue (Non-GAAP)
12,184
12,145
12,704
13,212
12,713
37,033
37,991
Adjusted Efficiency Ratio (Non-GAAP)
77.27
%
80.68
%
70.06
%
68.06
%
69.78
%
75.92
%
68.17
%
Allowance for loan losses to total loans, excluding PPP loans,
is a non-GAAP measure that serves as a useful measurement to
evaluate the allowance for loan losses without the impact of SBA
guaranteed loans.
9/30/21
6/30/21
3/31/21
12/31/20
9/30/20
(Dollars in thousands) (Unaudited)
Allowance for Loan Losses
$
11,581
$
11,544
$
12,725
$
12,771
$
13,780
Total Loans
1,001,599
$
1,007,446
1,041,697
$
1,044,753
$
1,050,885
PPP Loans
(32,703)
(49,525)
(60,380)
(55,096)
(71,028)
Total Loans, Excluding PPP Loans
(Non-GAAP)
$
968,896
$
957,921
$
981,317
$
989,657
$
979,857
Allowance for Loan Losses to Total Loans,
Excluding
PPP Loans (Non-GAAP)
1.20
%
1.21
%
1.30
%
1.29
%
1.41
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211028005288/en/
Company Contact: John H. Montgomery
President and Chief Executive Officer Phone: (724) 225-2400
Investor Relations: Adam Prior, Senior
Vice President The Equity Group Inc. Phone: (212) 836-9606 Email:
aprior@equityny.com
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