CB Financial Services, Inc. Announces First Quarter 2021 Financial Results and Declares Quarterly Cash Dividend

WASHINGTON, Pa.--(BUSINESS WIRE)--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 first quarter 2021 financial results.

	Three Months Ended
	3/31/21		12/31/20		9/30/20		6/30/20		3/31/20
(Dollars in thousands, except per share data) (Unaudited)
Net Income (Loss) (GAAP)	$	2,845	$	3,079	$	(17,395)	$	2,903	$	773
Excluding Non-Recurring Items (Non-GAAP) ^(1)	—		198		19,239		—		—
Adjusted Net Income (Non-GAAP) ^(1)	$	2,845	$	3,277	$	1,844	$	2,903	$	773
Earnings (Loss) per Common Share - Diluted (GAAP)	$	0.52	$	0.57	$	(3.22)	$	0.54	$	0.14
Adjusted Earnings per Common Share - Diluted (Non-GAAP) ^(1)	$	0.52	$	0.61	$	0.34	$	0.54	$	0.14

(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 First Quarter Financial Highlights

(Comparisons to three months ended March 31, 2020)

• Net income an increase to $2.8 million compared to $773,000.
• Earnings per diluted share (EPS) increased to $0.52 from $0.14.
• Return on average assets of 0.81%, compared to 0.24%.
• Return on average equity of 8.54%, compared to 2.04%.
• Net interest margin decreased to 3.04% from 3.55%.
• Net interest and dividend income was $10.0 million, compared to $10.5 million.
• Noninterest income increased to $3.2 million from $1.9 million.

(Amounts at March 31, 2021; comparisons to December 31, 2020)

• Total loans including Payroll Protection Program (“PPP) loans were $1.04 billion, a decrease of $3.1 million.
• Total loans (excluding PPP loans) were $981.3 million, a decrease of $8.3 million.
• Total deposits were $1.28 billion, an increase of $59.9 million.
• Total assets increased to a record $1.48 billion, compared to $1.42 billion.
• Book value per share was $24.62, compared to $24.76.
• Tangible book value per share (Non-GAAP) was $21.38, compared to $21.42.

   

Branch Optimization and Operational Efficiency Update

In connection with the previously announced branch consolidations and the other branch optimization initiatives, CB anticipates non-recurring pre-tax costs during 2021 in line with the $6.1 million announced in February. This estimated cost excludes the impact of any premium from sale of branches, and assumes no salvage value, lease termination, severance, and other costs associated with the consolidations or sales; however, the Company anticipates some recovery of these costs over time. CB expects an annual reduction in pre-tax operating expenses in 2021 of approximately $1.5 million, along with $3.0 million of ongoing pre-tax cost savings as a result of the implementation of the branch optimization initiatives. The Bank also completed a comprehensive review of its branch network and operating environment to identify solutions to improve operating performance. This review prioritized profitability, efficiency, infrastructure and client experience improvements, automation in operations, and digital marketing and technology investments.

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 June 1, 2021, to stockholders of record as of the close of business on May 21, 2021.

Management Commentary

President and CEO John H. Montgomery stated, “CB reported strong net income of $2.8 million for the first quarter of 2021, largely due to higher noninterest income and improvements in asset quality that included no provisions for loan losses during the period. We are continuing to focus on improving the franchise value in our core market area surrounding Southwestern Pennsylvania as CB remains well positioned for an economic recovery in the region. We improved our commercial real estate loan growth throughout the past several periods, while also growing deposits. Over the course of the year, we intend to invest in our current branch network while moving forward with a branch optimization strategy that will lead to continuing efficiency ratio improvements. The investments made in enhancing our fintech capabilities, including digital and mobile capabilities, will improve CB’s ability to adapt to changing customer needs as we emerge from the pandemic conditions of 2020.”

2021 First Quarter Financial Review

Net Interest and Dividend Income

Net interest and dividend income decreased $556,000, or 5.3%, to $10.0 million for the three months ended March 31, 2021 compared to $10.5 million for the three months ended March 31, 2020.

• Net interest margin (FTE) (Non-GAAP) decreased 52 basis points (“bps”) to 3.05% for the three months ended March 31, 2021 compared to 3.57% for the three months ended March 31, 2020. Net interest margin (GAAP) decreased to 3.04% for the three months ended March 31, 2021 compared to 3.55% for the three months ended March 31, 2020.
• Interest and dividend income decreased $1.3 million, or 10.9%, to $11.0 million for the three months ended March 31, 2021 compared to $12.3 million for the three months ended March 31, 2020.
  • Interest income on loans decreased $618,000, or 5.7%, to $10.1 million for the three months ended March 31, 2021 compared to $10.8 million for the three months ended March 31, 2020. While average loans increased $81.2 million compared to the three months ended March 31, 2020, the average yield decreased 57 bps to 4.00%. PPP loans decreased loan yield approximately 5 bps but that was offset by the recognition of $535,000 of net PPP loan origination fees in the current period. The impact of the accretion of the credit mark on acquired loan portfolios was $138,000 for the three months ended March 31, 2021 compared to $76,000 for the three months ended March 31, 2020, or 6 bps in the current period compared to 3 bps in the prior period.
  • Interest income on taxable investment securities decreased $555,000, or 46.2%, to $646,000 for the three months ended March 31, 2021 compared to $1.2 million for the three months ended March 31, 2020 driven by a $35.8 million decrease in average investment securities balances and 93 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, decreased $140,000, or 58.8% to $98,000 for the three months ended March 31, 2021 compared to $238,000 for the three months ended March 31, 2020. Average other interest-earning assets increased $97.3 million compared to the three months ended March 31, 2020 primarily from buildup of cash as a result of securities activity, PPP loan funds and government stimulus payments deposited with the Bank, although average yield declined 123 bps due to interest rate cuts on interest-earning cash deposits held at other financial institutions.
• Interest expense decreased $785,000, or 43.7%, to $1.0 million for the three months ended March 31, 2021 compared to $1.8 million for the three months ended March 31, 2020.
  • Interest expense on deposits decreased $734,000, or 43.7%, to $947,000 for the three months ended March 31, 2021 compared to $1.7 million for the three months ended March 31, 2020. While average interest-earning deposits increased $42.2 million compared to the three months ended March 31, 2020, interest rate declines for all products driven by pandemic-related interest rate cuts resulted in a 37 bp, or 46.0%, decrease in average cost compared to the three months ended March 31, 2020. In addition, average time deposits and the related average cost decreased $28.3 million and 41 bps, respectively.

 Provision for Loan Losses

There was no provision for loan losses recorded for the three months ended March 31, 2021 compared to $2.5 million for the three months ended March 31, 2020. An $8.3 million decrease in net reservable loans in the current period, which excludes PPP loans, and improving economic and industry condition contributed to the lack of provision in the current period.

Noninterest income

Noninterest income increased $1.3 million, or 69.6%, to $3.2 million for the three months ended March 31, 2021, compared to $1.9 million for the three months ended March 31, 2020. The increase was largely due to net gains on securities compared to a net loss in the prior period, as well as an increase in profit-sharing insurance commissions and a $172,000 recapture of temporary impairment on mortgage servicing rights.

Noninterest Expense

Noninterest expense increased $392,000, or 4.4%, to $9.4 million for the three months ended March 31, 2021 compared to $9.0 million for the three months ended March 31, 2020. The increase is primarily from contracted services, which includes the engagement of a third-party workflow optimization expert to assist in implementing robotic process automations and more effective sales management designed to improve operational efficiencies in the near and long-term. In addition, salaries and employee benefits increased primarily due to the recognition in the prior period of a $407,000 one-time benefit from health insurance claims exceeding our stop-loss limit for the 2019 plan year and change from a self-funded to a fully-insured plan.

Statement of Financial Condition Review

Assets

Total assets increased $60.1 million, or 4.2%, to $1.48 billion at March 31, 2021, compared to $1.42 billion at December 31, 2020. The change is primarily due to an increase in Deposits as further described below in the Liabilities section.

• Cash and due from banks increased $69.1 million, or 42.9%, to $230.0 million at March 31, 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 decreased $3.2 million, or 2.2%, to $142.2 million at March 31, 2021, compared to $145.4 million at December 31, 2020. Current period activity included $11.0 million of paydowns on mortgage-backed securities, $22.3 million of mortgage-backed securities and U.S. government agency securities purchases, and $11.9 million of mortgage-backed securities sales, which resulted in the recognition of a $225,000 gain on the sale of securities. The sales recognized gains on higher-interest securities with faster prepayment speeds. In addition, there was a $3.1 million decrease in the market value of the debt securities portfolio and a $222,000 gain in market value in the equity securities portfolio, which is primarily comprised of bank stocks.
  

Payroll Protection Program (“PPP”) Update

• The Small Business Administration reopened the PPP the week of January 11, 2021 and began accepting applications for both First Draw and Second Draw PPP Loans. As of March 31, 2021, as part of this round of PPP, the Bank funded 156 PPP loans totaling $25.0 million with net deferred origination fees of $984,000. Combined with $19.7 million of loan forgiveness processed in the first quarter of 2021, total PPP loans increased $5.3 million to $60.4 million at March 31, 2021 compared to $55.1 million at December 31, 2020.
• $1.1 million of net PPP loan origination fees were unearned at December 31, 2020. Due to activity in the first quarter of 2021, $1.5 million of net PPP loan origination fees were unearned at March 31, 2021. $535,000 of net PPP loan origination fees were earned in the first quarter of 2021 compared to $604,000 for the three months ended December 31, 2020. 

Loans and Credit Quality

• Total loans decreased $3.1 million to $1.04 billion at March 31, 2021. Excluding the impact of PPP loans, organic loan growth declined $8.3 million.
• The allowance for loan losses was $12.7 million at March 31, 2021 compared to $12.8 million at December 31, 2020. There was no provision for loan losses in the first quarter. An $8.3 million decrease in net reservable loans in the current period, which excludes PPP loans, and improving economic and industry condition contributed to the lack of provision in the current period. As a result, the allowance for loan losses to total loans of 1.22% at March 31, 2021 was comparable to the percentage at December 31, 2020. No allowance was allocated to the PPP loan portfolio. The allowance for loan losses to total loans, excluding PPP loans, was 1.30% at March 31, 2021 compared to 1.29% at December 31, 2020.
• Net charge-offs for the three months ended March 31, 2021 were $46,000, or 0.02% of average loans on an annualized basis, . Net charge-offs for the three months ended March 31, 2020 were $45,000, or 0.02% of average loans on an annualized basis, . Net charge-offs were primarily attributable to indirect automobile loans in both periods.
• Nonperforming loans, which includes nonaccrual loans, accruing loans past due 90 days or more, and accruing loans that are considered troubled debt restructurings, were $14.3 million at March 31, 2021 compared to $14.5 million at December 31, 2020. Nonperforming loans to total loans ratio was 1.37% at March 31, 2021 compared to 1.39% at December 31, 2020.
• There were 25 loans in forbearance totaling $18.4 million at March 31, 2021 compared to 31 loans totaling $24.1 million at December 31, 2020. This includes two commercial real estate loans totaling $4.6 million and one construction loan totaling $2.0 million that are all secured by hotels, one commercial real estate loan totaling $5.5 million secured by office space and a business relationship that rents equipment, supplies and other materials for events comprised of three commercial real estate loans totaling $3.3 million, and five commercial and industrial loans totaling $1.2 million.

Liabilities

Total liabilities increased $60.9 million, or 4.7%, to $1.34 billion at March 31, 2021 compared to $1.28 billion at December 31, 2020.

Deposits

• Deposits increased $59.9 million to $1.28 billion as of March 31, 2021 compared to $1.22 billion at December 31, 2020. Noninterest bearing demand deposits, NOW accounts and savings accounts increased $36.6 million, $21.1 million and $11.6 million, respectively, partially offset by a decrease of $9.3 million in time deposits. IRS and stimulus-related payments totaled $29.9 million in the current quarter and the impact of the PPP loans that were originated in the current quarter and the proceeds of which were initially deposited at the Bank was approximately $23.4 million. Annualized deposit growth rate was 19.6% including PPP loan deposits and 2.2% without IRS and PPP loan deposits, representing organic deposit growth. Average total deposits increased $17.0 million, primarily in noninterest-bearing deposits, for the three months ended March 31, 2021 compared to the three months ended December 31, 2020.

Borrowed Funds

• Short-term borrowings increased $4.3 million, or 10.5%, to $45.4 million at March 31, 2021, compared to $41.1 million at December 31, 2020. At March 31, 2021 and December 31, 2020, short-term borrowings were comprised entirely of securities sold under agreements to repurchase. The increase is 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.
• Other borrowed funds decreased $2.0 million to $6.0 million at March 31, 2021 due to a Federal Home Loan Bank borrowing that matured in the current period.

   

Stockholders’ Equity

Stockholders’ equity decreased $754,000, or 0.6%, to $133.8 million at March 31, 2021, compared to $134.5 million at December 31, 2020.

Book value per share

Book value per share was $24.62 at March 31, 2021 compared to $24.76 at December 31, 2020, a decrease of $0.14. Tangible book value per share (Non-GAAP) decreased $0.04 to $21.38 compared to $21.42 at December 31, 2020. 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 15 offices in Greene, Allegheny, Washington, Fayette, and Westmoreland Counties in southwestern Pennsylvania, six offices in Brooke, Marshall, Ohio, Upshur and Wetzel Counties in West Virginia, and one office in Belmont County in Ohio. 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.

Given the numerous unknowns and risks that are heavily weighted to the downside as a result of the COVID-19 pandemic, our forward-looking statements are subject to the risk that conditions will be substantially different than we are currently expecting. If efforts to contain COVID-19 are unsuccessful and shelter-in-place orders last longer than expected, the recession would be much longer and much more severe and damaging. Ineffective fiscal stimulus, or an extended delay in implementing it, are also major risks. The deeper the recession and the longer it lasts, the more it will damage consumer fundamentals and sentiment. This could both prolong the recession and make any recovery weaker. Similarly, the recession could damage business fundamentals. As a result, the outbreak and its consequences, including responsive measures to manage it, have had and are likely to continue to have an adverse effect, possibly materially, on our business and financial performance by adversely affecting, possibly materially, the demand and profitability of our products and services, the valuation of assets and our ability to meet the needs of our customers.

CB FINANCIAL SERVICES, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except share and per share data) (Unaudited)
Selected Financial Condition Data	3/31/21		12/31/20		9/30/20		6/30/20		3/31/20
Total Assets	$	1,476,821	$	1,416,720	$	1,392,876	$	1,407,152	$	1,313,173
Cash and Due From Banks	230,000		160,911		112,169		131,403		78,099
Securities	142,156		145,400		158,956		148,648		171,411
Loans
Real Estate:
Residential	339,596		344,142		343,955		344,782		346,864
Commercial	370,118		373,555		353,904		350,506		354,374
Construction	77,714		72,600		69,178		58,295		50,017
Commercial and Industrial	128,931		126,813		144,315		149,085		80,721
Consumer	111,650		113,854		117,364		117,145		121,494
Other	13,688		13,789		22,169		22,346		21,180
Total Loans	1,041,697		1,044,753		1,050,885		1,042,159		974,650
Allowance for Loan Losses	(12,725)		(12,771)		(13,780)		(12,648)		(12,322)
Loans, Net	1,028,972		1,031,982		1,037,105		1,029,511		962,328
Premises and Equipment, Net	20,240		20,302		20,439		21,818		22,037
Goodwill	9,732		9,732		9,732		28,425		28,425
Intangible Assets, Net	7,867		8,399		8,931		9,463		9,995
Deposits
Non-Interest Bearing Demand Deposits	377,137		340,569		335,287		341,180		267,369
Interest Bearing Demand Accounts	280,929		259,870		245,850		237,343		229,601
Money Market Accounts	198,975		199,029		188,958		184,726		177,597
Savings Accounts	246,725		235,088		232,691		229,388		220,484
Time Deposits	180,697		190,013		196,250		201,303		211,589
Total Deposits	1,284,463		1,224,569		1,199,036		1,193,940		1,106,640
Short-Term Borrowings	45,352		41,055		42,061		42,349		34,967
Other Borrowings	6,000		8,000		11,000		11,000		11,000
Stockholders’ Equity	133,776		134,530		133,299		152,392		151,525

	Three Months Ended
Selected Operating Data	3/31/21		12/31/20		9/30/20		6/30/20		3/31/20
Interest and Dividend Income
Loans, Including Fees	$	10,146	$	10,833	$	10,709	$	10,577	$	10,764
Securities:
Taxable	646		725		753		940		1,201
Tax-Exempt	78		78		79		106		106
Dividends	20		20		19		20		20
Other Interest and Dividend Income	98		99		96		84		238
Total Interest and Dividend Income	10,988		11,755		11,656		11,727		12,329
Interest Expense
Deposits	947		1,036		1,150		1,305		1,681
Short-Term Borrowings	23		25		28		39		45
Other Borrowings	41		60		62		62		70
Total Interest Expense	1,011		1,121		1,240		1,406		1,796
Net Interest and Dividend Income	9,977		10,634		10,416		10,321		10,533
Provision for Loan Losses	—		—		1,200		300		2,500
Net Interest and Dividend Income After Provision for Loan Losses	9,977		10,634		9,216		10,021		8,033
Noninterest Income:
Service Fees	546		560		554		487		605
Insurance Commissions	1,595		1,403		1,079		1,113		1,283
Other Commissions	165		105		76		188		110
Net Gain on Sales of Loans	86		388		435		441		127
Net Gain (Loss) on Securities	447		213		(59)		517		(438)
Net Gain on Purchased Tax Credits	18		16		15		16		15
Net (Loss) Gain on Disposal of Fixed Assets	—		(13)		(65)		—		17
Income from Bank-Owned Life Insurance	137		140		140		138		139
Other Income (Loss)	180		(34)		(2)		(252)		14
Total Noninterest Income	3,174		2,778		2,173		2,648		1,872
Noninterest Expense:
Salaries and Employee Benefits	4,894		5,126		5,124		4,828		4,731
Occupancy	710		606		759		699		733
Equipment	266		234		220		224		257
Data Processing	518		476		482		460		425
FDIC Assessment	250		344		172		163		158
PA Shares Tax	265		350		355		333		275
Contracted Services	687		577		531		562		378
Legal and Professional Fees	189		185		161		171		235
Advertising	140		178		148		155		183
Other Real Estate Owned (Income)	(38)		(39)		(12)		(1)		(17)
Amortization of Intangible Assets	532		532		532		532		532
Goodwill Impairment	—		—		18,693		—		—
Writedown of Fixed Assets	—		240		884		—		—
Other	982		916		919		945		1,113
Total Noninterest Expense	9,395		9,725		28,968		9,071		9,003
Income (Loss) Before Income Tax Expense (Benefit)	3,756		3,687		(17,579)		3,598		902
Income Tax Expense (Benefit)	911		608		(184)		695		129
Net Income (Loss)	$	2,845	$	3,079	$	(17,395)	$	2,903	$	773

	Three Months Ended
Per Common Share Data	3/31/21		12/31/20		9/30/20		6/30/20		3/31/20
Dividends Per Common Share	$	0.24	$	0.24	$	0.24	$	0.24	$	0.24
Earnings (Loss) Per Common Share - Basic	0.52		0.57		(3.22)		0.54		0.14
Earnings (Loss) Per Common Share - Diluted	0.52		0.57		(3.22)		0.54		0.14
Adjusted Earnings Per Common Share - Diluted (Non-GAAP) ^(1)	0.52		0.61		0.34		0.54		0.14
Weighted Average Common Shares Outstanding - Basic	5,434,374		5,404,874		5,395,342		5,393,712		5,431,199
Weighted Average Common Shares Outstanding - Diluted	5,436,881		5,406,068		5,395,342		5,393,770		5,456,867

	3/31/21			12/31/20			9/30/20			6/30/20			3/31/20
Common Shares Outstanding	5,434,374			5,434,374			5,398,712			5,393,712			5,393,712
Book Value Per Common Share	$	24.62		$	24.76		$	24.69		$	28.25		$	28.09
Tangible Book Value per Common Share (Non-GAAP) ^(1)	21.38			21.42			21.23			21.23			20.97
Stockholders’ Equity to Assets	9.1		%	9.5		%	9.6		%	10.8		%	11.5		%
Tangible Common Equity to Tangible Assets (Non-GAAP) ^(1)	8.0			8.3			8.3			8.4			8.9

	Three Months Ended
Selected Financial Ratios ^(2)	3/31/21		12/31/20		9/30/20		6/30/20		3/31/20
Return on Average Assets	0.81	%	0.87	%	(4.90)	%	0.85	%	0.24	%
Adjusted Return on Average Assets (Non-GAAP) ^(1)	0.81		0.92		0.52		0.85		0.24
Return on Average Equity	8.54		9.13		(45.13)		7.65		2.04
Adjusted Return on Average Equity (Non-GAAP) ^(1)	8.54		9.72		4.78		7.65		2.04
Average Interest-Earning Assets to Average Interest-Bearing Liabilities	142.98		141.58		141.98		140.72		135.06
Average Equity to Average Assets	9.48		9.49		10.85		11.08		11.67
Net Interest Rate Spread	2.91		3.07		3.03		3.10		3.34
Net Interest Rate Spread (FTE) (Non-GAAP) ^(1)	2.92		3.08		3.05		3.12		3.35
Net Interest Margin	3.04		3.21		3.19		3.28		3.55
Net Interest Margin (FTE) (Non-GAAP) ^(1)	3.05		3.22		3.21		3.30		3.57
Net Charge-offs (Recoveries) to Average Loans	0.02		0.39		0.03		(0.01)		0.02
Efficiency Ratio	71.44		72.51		230.11		69.94		72.58
Adjusted Efficiency Ratio (Non-GAAP) ^(1)	70.06		68.06		69.78		68.58		66.18

Asset Quality Ratios	3/31/21		12/31/20		9/30/20		6/30/20		3/31/20
Allowance for Loan Losses to Total Loans ^(3)	1.22	%	1.22	%	1.31	%	1.21	%	1.26	%
Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP) ^(1) (3)	1.30		1.29		1.41		1.30		1.26
Allowance for Loan Losses to Nonperforming Loans ^(3) (4)	89.29		88.15		91.84		226.59		235.51
Allowance for Loan Losses to Noncurrent Loans ^(3) (5)	118.08		117.20		114.01		390.73		406.80
Delinquent and Nonaccrual Loans to Total Loans ^(5) (6)	1.18		1.50		1.23		0.39		0.89
Nonperforming Loans to Total Loans ^(4)	1.37		1.39		1.43		0.54		0.54
Noncurrent Loans to Total Loans ^(5)	1.03		1.04		1.15		0.31		0.31
Nonperforming Assets to Total Assets ^(7)	0.98		1.04		1.09		0.41		0.42

Capital Ratios ^(8)	3/31/21		12/31/20		9/30/20		6/30/20		3/31/20
Common Equity Tier 1 Capital (to Risk Weighted Assets)	11.85	%	11.79	%	11.62	%	11.90	%	11.60	%
Tier 1 Capital (to Risk Weighted Assets)	11.85		11.79		11.62		11.90		11.60
Total Capital (to Risk Weighted Assets)	13.10		13.04		12.88		13.16		12.85
Tier 1 Leverage (to Adjusted Total Assets)	7.87		7.81		7.63		7.90		8.23

(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) Loans acquired in connection with the mergers with FedFirst Financial Corporation and First West Virginia Bancorp were recorded at their estimated fair value at the acquisition date and did not include a carryover of the pre-merger allowance for loan losses.
(4) Nonperforming loans consist of nonaccrual loans, accruing loans that are 90 days or more past due, and troubled debt restructured loans.
(5) Noncurrent loans consist of nonaccrual loans and accruing loans that are 90 days or more past due.
(6) Delinquent loans consist of accruing loans that are 30 days or more past due.
(7) Nonperforming assets consist of nonperforming loans and other real estate owned.
(8) 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
	March 31, 2021						December 31, 2020						September 30, 2020						June 30, 2020						March 31, 2020
	Average Balance		Interest and Dividends		Yield / Cost ^(4)		Average Balance		Interest and Dividends		Yield / Cost ^(4)		Average Balance		Interest and Dividends		Yield / Cost ^(4)		Average Balance		Interest and Dividends		Yield / Cost ^(4)		Average Balance		Interest and Dividends		Yield / Cost ^(4)
(Dollars in thousands) (Unaudited)
Assets:
Interest-Earning Assets:
Loans, Net	$	1,031,853	$	10,168	4.00	%	$	1,032,942	$	10,860	4.18	%	$	1,035,426	$	10,744	4.13	%	$	1,014,000	$	10,612	4.21	%	$	950,661	$	10,796	4.57	%
Debt Securities
Taxable	122,883		646		2.10		133,026		725		2.18		123,332		753		2.44		137,268		940		2.74		158,655		1,201		3.03
Exempt From Federal Tax	12,943		96		2.97		13,006		96		2.95		13,054		97		2.97		14,106		130		3.69		16,837		127		3.02
Equity Securities	2,632		20		3.04		2,612		20		3.06		2,580		19		2.95		2,579		20		3.10		2,568		20		3.12
Other Interest-Earning Assets	161,871		98		0.25		137,000		99		0.29		123,171		96		0.31		97,033		84		0.35		64,608		238		1.48
Total Interest-Earning Assets	1,332,182		11,028		3.36		1,318,586		11,800		3.56		1,297,563		11,709		3.59		1,264,986		11,786		3.75		1,193,329		12,382		4.17
Noninterest-Earning Assets	92,550						94,262						115,567						113,176						114,056
Total Assets	$	1,424,732					$	1,412,848					$	1,413,130					$	1,378,162					$	1,307,385
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits	$	259,065	77		0.12	%	$	252,521	83		0.13	%	$	245,977	99		0.16		$	236,312	141		0.24		$	226,482	267		0.47	%
Savings	239,850		32		0.05		232,647		32		0.05		230,567		32		0.06		227,470		35		0.06		218,328		90		0.17
Money Market	197,395		98		0.20		198,983		131		0.26		185,644		140		0.30		182,656		187		0.41		180,982		249		0.55
Time Deposits	187,114		740		1.60		193,194		790		1.63		198,184		879		1.76		205,847		942		1.84		215,449		1,075		2.01
Total Interest-Bearing Deposits	883,424		947		0.43		877,345		1,036		0.47		860,372		1,150		0.53		852,285		1,305		0.62		841,241		1,681		0.80
Short-Term Borrowings
Securities Sold Under Agreements to Repurchase	41,094		23		0.23		43,468		25		0.23		42,512		28		0.26		35,642		39		0.44		29,541		45		0.61
Other Borrowings	7,200		41		2.31		10,543		60		2.26		11,000		62		2.24		11,000		62		2.27		12,780		70		2.20
Total Interest-Bearing Liabilities	931,718		1,011		0.44		931,356		1,121		0.48		913,884		1,240		0.54		898,927		1,406		0.63		883,562		1,796		0.82
Noninterest-Bearing Demand Deposits	349,108						338,223						337,441						317,738						261,504
Other Liabilities	8,869						9,176						8,477						8,815						9,797
Total Liabilities	1,289,695						1,278,755						1,259,802						1,225,480						1,154,863
Stockholders' Equity	135,037						134,093						153,328						152,682						152,522
Total Liabilities and Stockholders' Equity	$	1,424,732					$	1,412,848					$	1,413,130					$	1,378,162					$	1,307,385
Net Interest Income (FTE)
(Non-GAAP) ^(5)			10,017						10,679						10,469						10,380						10,586
Net Interest-Earning Assets ^(1)	400,464						387,230						383,679						366,059						309,767
Net Interest Rate Spread (FTE)
(Non-GAAP) ^(2) (5)					2.92	%					3.08	%					3.05						3.12						3.35	%
Net Interest Margin (FTE)
(Non-GAAP)^(3)(5)					3.05						3.22						3.21						3.30						3.57

(1) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(2) 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.
(3) Net interest margin represents net interest income divided by average total interest-earning assets.
(4) Annualized.
(5) 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.

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. 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.

Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in analyzing the Company’s operating results on the same basis as that applied by management. Non-GAAP adjusted items reflect non-cash charges related to goodwill impairment and a writedown on fixed assets from the Monessen branch closure.

	Three Months Ended
	3/31/21			12/31/20			9/30/20			6/30/20			3/31/20
(Dollars in thousands, except share and per share data) (Unaudited)
Net Income (Loss) (GAAP)	$	2,845		$	3,079		$	(17,395)		$	2,903		$	773
Non-Cash Charges:
Goodwill Impairment	—			—			18,693			—			—
Writedown on Fixed Assets	—			240			884			—			—
Tax Effect	—			(42)			(338)			—			—
Adjusted Net Income (Non-GAAP)	$	2,845		$	3,277		$	1,844		$	2,903		$	773
Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding	5,436,881			5,406,068			5,395,342			5,393,770			5,456,867
Earnings (Loss) per Common Share - Diluted (GAAP)	$	0.52		$	0.57		$	(3.22)		$	0.54		$	0.14
Goodwill Impairment	—			—			3.46			—			—
Writedown on Fixed Assets	—			0.04			0.16			—			—
Tax Effect	—			(0.01)			(0.06)			—			—
Adjusted Earnings per Common Share - Diluted (Non-GAAP)	$	0.52		$	0.61		$	0.34		$	0.54		$	0.14
Net Income (Loss) (GAAP) (Numerator)	$	2,845		$	3,079		$	(17,395)		$	2,903		$	773
Annualization Factor	4.06			3.98			3.98			4.02			4.02
Average Assets (Denominator)	1,424,732			1,412,848			1,413,130			1,378,162			1,307,385
Return on Average Assets (GAAP)	0.81		%	0.87		%	(4.90)		%	0.85		%	0.24		%
Adjusted Net Income (Non-GAAP) (Numerator)	$	2,845		$	3,277		$	1,844		$	2,903		$	773
Annualization Factor	4.06			3.98			3.98			4.02			4.02
Average Assets (Denominator)	1,424,732			1,412,848			1,413,130			1,378,162			1,307,385
Adjusted Return on Average Assets (Non-GAAP)	0.81		%	0.92		%	0.52		%	0.85		%	0.24		%

	Three Months Ended
	3/31/21			12/31/20			9/30/20			6/30/20			3/31/20
(Dollars in thousands) (Unaudited)
Net Income (Loss) (GAAP) (Numerator)	$	2,845		$	3,079		$	(17,395)		$	2,903		$	773
Annualization Factor	4.06			3.98			3.98			4.02			4.02
Average Equity (Denominator)	135,037			134,093			153,328			152,682			152,522
Return on Average Equity (GAAP)	8.54		%	9.13		%	(45.13)		%	7.65		%	2.04		%
Adjusted Net Income (Loss) (GAAP) (Numerator)	$	2,845		$	3,079		$	(17,395)		$	2,903		$	773
Annualization Factor	4.06			3.98			3.98			4.02			4.02
Average Equity (Denominator)	135,037			134,093			153,328			152,682			152,522
Adjusted Return on Average Equity (Non-GAAP)	8.54		%	9.72		%	4.78		%	7.65		%	2.04		%

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.

	3/31/21			12/31/20			9/30/20			6/30/20			3/31/20
(Dollars in thousands, except share and per share data) (Unaudited)
Assets (GAAP)	$	1,476,821		$	1,416,720		$	1,392,876		$	1,407,152		$	1,313,173
Goodwill and Other Intangible Assets, Net	(17,599)			(18,131)			(18,663)			(37,888)			(38,420)
Tangible Assets (Non-GAAP) (Numerator)	$	1,459,222		$	1,398,589		$	1,374,213		$	1,369,264		$	1,274,753
Stockholders' Equity (GAAP)	$	133,776		$	134,530		$	133,299		$	152,392		$	151,525
Goodwill and Other Intangible Assets, Net	(17,599)			(18,131)			(18,663)			(37,888)			(38,420)
Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator)	$	116,177		$	116,399		$	114,636		$	114,504		$	113,105
Stockholders’ Equity to Assets (GAAP)	9.1		%	9.5		%	9.6		%	10.8		%	11.5		%
Tangible Common Equity to Tangible Assets (Non-GAAP)	8.0		%	8.3		%	8.3		%	8.4		%	8.9		%
Common Shares Outstanding (Denominator)	5,434,374			5,434,374			5,398,712			5,393,712			5,393,712
Book Value per Common Share (GAAP)	$	24.62		$	24.76		$	24.69		$	28.25		$	28.09
Tangible Book Value per Common Share (Non-GAAP)	$	21.38		$	21.42		$	21.23		$	21.23		$	20.97

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
	3/31/21			12/31/20			9/30/20			6/30/20			3/31/20
(Dollars in thousands) (Unaudited)
Interest Income per Consolidated Statement of Operations (GAAP)	$	10,988		$	11,755		$	11,656		$	11,727		$	12,329
Adjustment to FTE Basis	40			45			53			59			53
Interest Income (FTE) (Non-GAAP)	11,028			11,800			11,709			11,786			12,382
Interest Expense per Consolidated Statement of Operations (GAAP)	1,011			1,121			1,240			1,406			1,796
Net Interest Income (FTE) (Non-GAAP)	$	10,017		$	10,679		$	10,469		$	10,380		$	10,586
Net Interest Rate Spread (GAAP)	2.91		%	3.07		%	3.03		%	3.10		%	3.34		%
Adjustment to FTE Basis	0.01			0.01			0.02			0.02			0.01
Net Interest Rate Spread (FTE) (Non-GAAP)	2.92			3.08			3.05			3.12			3.35
Net Interest Margin (GAAP)	3.04		%	3.21		%	3.19		%	3.28		%	3.55		%
Adjustment to FTE Basis	0.01			0.01			0.02			0.02			0.02
Net Interest Margin (FTE) (Non-GAAP)	3.05			3.22			3.21			3.30			3.57

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
	3/31/21			12/31/20			9/30/20			6/30/20			3/31/20
(Dollars in thousands) (Unaudited)
Noninterest expense (GAAP)	$	9,395		$	9,725		$	28,968		$	9,071		$	9,003
Net Interest and Dividend Income (GAAP)	9,977			10,634			10,416			10,321			10,533
Noninterest Income (GAAP)	3,174			2,778			2,173			2,648			1,872
Operating Revenue (GAAP)	13,151			13,412			12,589			12,969			12,405
Efficiency Ratio (GAAP)	71.44		%	72.51		%	230.11		%	69.94		%	72.58		%
Noninterest expense (GAAP)	$	9,395		$	9,725		$	28,968		$	9,071		$	9,003
Less:
Other Real Estate Owned (Income)	(38)			(39)			(12)			(1)			(17)
Amortization of Intangible Assets	532			532			532			532			532
Goodwill Impairment	—			—			18,693			—			—
Writedown on Fixed Assets	—			240			884			—			—
Adjusted Noninterest Expense (Non-GAAP)	$	8,901		$	8,992		$	8,871		$	8,540		$	8,488
Net Interest and Dividend Income (GAAP)	9,977			10,634			10,416			10,321			10,533
Noninterest Income (GAAP)	3,174			2,778			2,173			2,648			1,872
Less:
Net Gain (Loss) on Securities	447			213			(59)			517			(438)
Net (Loss) Gain on Disposal of Fixed Assets	—			(13)			(65)			—			17
Adjusted Noninterest Income (Non-GAAP)	2,727			2,578			2,297			2,131			2,293
Adjusted Operating Revenue (Non-GAAP)	12,704			13,212			12,713			12,452			12,826
Adjusted Efficiency Ratio (Non-GAAP)	70.06		%	68.06		%	69.78		%	68.58		%	66.18		%

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.

	3/31/21			12/31/20			9/30/20			6/30/20			3/31/20
(Dollars in thousands) (Unaudited)
Allowance for Loan Losses	$	12,725		$	12,771		$	13,780		$	12,648		$	12,322
Total Loans	1,041,697			$	1,044,753		1,050,885			$	1,042,159		$	974,650
PPP Loans	(60,380)			(55,096)			(71,028)			(70,028)			—
Total Loans, Excluding PPP Loans (Non-GAAP)	$	981,317		$	989,657		$	979,857		$	972,131		$	974,650
Allowance for Loan Losses to Total Loans, Excluding
PPP Loans (Non-GAAP)	1.30		%	1.29		%	1.41		%	1.30		%	1.26		%