CB Financial Services, Inc. Announces First Quarter 2024 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”), today announced its first quarter 2024 financial results.

	Three Months Ended
	3/31/24			12/31/23			9/30/23		6/30/23		3/31/23
(Dollars in thousands, except per share data) (Unaudited)
Net Income (GAAP)	$	4,196		$	12,966		$	2,672	$	2,757	$	4,156
Net Income Adjustments		(1,000	)		(9,905	)		29		78		(127	)
Adjusted Net Income (Non-GAAP) ^(1)	$	3,196		$	3,061		$	2,701	$	2,835	$	4,029
Earnings per Common Share - Diluted (GAAP)	$	0.82		$	2.52		$	0.52	$	0.54	$	0.81
Adjusted Earnings per Common Share - Diluted (Non-GAAP) ^(1)	$	0.62		$	0.60		$	0.53	$	0.55	$	0.79

(1)	Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted as presented later in this Press Release.

2024 First Quarter Financial Highlights

(Comparisons to three months ended March 31, 2023 unless otherwise noted)

• Net income was $4.20 million, compared to $4.16 million. Results were impacted by the December 2023 sale of the Bank’s subsidiary insurance company, Exchange Underwriters (EU) which drove decreases in noninterest income and noninterest expense, a gain on bank-owned life insurance and a recovery of provision for credit losses.
  • Adjusted net income (Non-GAAP) was $3.2 million compared to $4.0 million.
  • Income before income tax expense was $5.1 million compared to $5.3 million.
  • Adjusted pre-provision net revenue (PPNR) (Non-GAAP) was $4.1 million compared to $5.3 million.
• Earnings per diluted common share (EPS) increased to $0.82 from $0.81.
  • Adjusted earning per common share - diluted (Non-GAAP) was $0.62, compared to $0.79.
• Return on average assets (annualized) was 1.17%, compared to 1.21%.
  • Adjusted return on average assets (annualized) (Non-GAAP) was 0.89%, compared to 1.18%.
• Return on average equity (annualized) was 12.03%, compared to 14.69%.
  • Adjusted return on average equity (annualized) (Non-GAAP) was 9.16%, compared to 14.24%.
• Net interest margin (“NIM”) declined to 3.36% from 3.51%.
• Net interest and dividend income was $11.59 million, compared to $11.58 million.
• Noninterest income decreased to $1.9 million, compared to $2.8 million. Significant changes in noninterest income included a $1.9 million decrease in insurance commissions due to the sale of EU, partially offset by increases in gains on bank-owned life insurance and gains on the disposal of premises and equipment of $613,000 and $263,000, respectively.
• Noninterest expense decreased to $8.4 million, compared to $9.0 million, due to decreases in compensation and benefits, data processing, intangible amortization and other noninterest expenses, partially offset by increases in contracted services, advertising, occupancy and equipment expenses.

(Amounts at March 31, 2024; comparisons to December 31, 2023, unless otherwise noted)

• Total assets increased to $1.47 billion from $1.46 billion.
• Total loans decreased $14.1 million, or 1.3%, to $1.10 billion compared to $1.11 billion, and included decreases in consumer loans and commercial and industrial loans of $11.1 million and $8.0 million, respectively, partially offset by increases in commercial real estate loans, other loans and construction loans of $3.3 million, $1.4 million and $1.2 million, respectively. The consumer loan portfolio is primarily comprised of indirect automobile loans and decreases as a result of the discontinuation of that product as of June 30, 2023. Excluding the $11.3 million decrease in indirect automobile loans, total loans decreased $2.5 million, or 0.2%.
• Nonperforming loans to total loans was 0.20% at March 31, 2024 and December 31, 2023.
• Total deposits were $1.26 billion, a decrease of $4.7 million, compared to $1.27 billion.
• Book value per share was $27.53, compared to $27.32 as of December 31, 2023.
• Tangible book value per share (Non-GAAP) was $25.52, compared to $25.23 as of December 31, 2023. The change was due to an increase in stockholders’ equity primarily related to current period net income of $4.2 million, partially offset by a $1.3 million increase in accumulated other comprehensive loss and the payment of $1.3 million in dividends since December 31, 2023.

Management Commentary

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

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

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

As we look ahead, we remain committed to our long-term plan, investing in our franchise, and delivering an exceptional client experience that benefits all our stakeholders."

Dividend Declaration

The Company’s Board of Directors declared a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about May 31, 2024, to stockholders of record as of the close of business on May 15, 2024.

2024 First Quarter Financial Review

Net Interest and Dividend Income

Net interest and dividend income increased $8,000, or 0.1%, to $11.59 million for the three months ended March 31, 2024 compared to $11.58 million for the three months ended March 31, 2023.

• NIM (GAAP) decreased to 3.36% for the three months ended March 31, 2024 compared to 3.51% for the three months ended March 31, 2023. Fully tax equivalent (FTE) NIM (Non-GAAP) decreased 15 basis points (“bps”) to 3.37% for the three months ended March 31, 2024 compared to 3.52% for the three months ended March 31, 2023.
• Interest and dividend income increased $3.7 million, or 26.3%, to $18.0 million for the three months ended March 31, 2024 compared to $14.2 million for the three months ended March 31, 2023.
  • Interest income on loans increased $2.5 million, or 19.9%, to $14.8 million for the three months ended March 31, 2024 compared to $12.4 million for the three months ended March 31, 2023. The average yield on loans increased 67 bps to 5.50% compared to 4.83% resulting in a $1.8 million increase in interest income on loans. The average balance of loans increased $47.3 million to $1.09 billion from $1.04 billion, generating $694,000 of additional interest income on loans. The increase in loan yield has been driven by a reduction in lower yielding consumer loans due to the discontinuation of the indirect automobile loan product with the redeployment of those funds into higher yielding commercial loan products.
  • Interest income on taxable investment securities increased $1.3 million, or 138.9%, to $2.3 million for the three months ended March 31, 2024 compared to $964,000 for the three months ended March 31, 2023 driven by a 210 bp increase in average yield coupled with a $22.6 million increase in average balances. The increase in the average yield was the result of the Bank implementing a balance sheet repositioning strategy of its portfolio of available-for-sale securities during the fourth quarter of 2023. The Bank sold $69.3 million in market value of its lower yielding U.S. government agency, mortgage-backed and municipal securities with an average yield of 1.89% and purchased $69.3 million of higher yielding mortgage-backed and collateralized mortgage obligation securities with an average yield of 5.49%.
  • Interest income on interest-earning deposits at other banks decreased $72,000, to $733,000 for the three months ended March 31, 2024 compared to $805,000 for the three months ended March 31, 2023 driven by a $14.3 million decrease in average balances, partially offset by a 58 bp increase in the average yield.
• Interest expense increased $3.7 million, or 140.3%, to $6.4 million for the three months ended March 31, 2024 compared to $2.7 million for the three months ended March 31, 2023.
  • Interest expense on deposits increased $3.5 million, or 139.3%, to $6.0 million for the three months ended March 31, 2024 compared to $2.5 million for the three months ended March 31, 2023. Rising market interest rates led to the repricing of interest-bearing demand and money market deposits and a shift in deposits from noninterest-bearing to interest-bearing demand and time deposits which resulted in a 132 bp, or 116.0%, increase in the average cost of interest-bearing deposits compared to the three months ended March 31, 2023. This accounted for a $3.2 million increase in interest expense. Additionally, interest-bearing deposit balances increased $86.1 million, or 9.6%, to $978.3 million as of March 31, 2024 compared to $892.2 million as of March 31, 2023, accounting for a $298,000 increase in interest expense.
  • Interest expense on borrowed funds increased $247,000, or 157.3%, to $404,000 for the three months ended March 31, 2024 compared to $157,000 for the three months ended March 31, 2023. The average balance of borrowed funds increased $18.7 million due to $20.0 million of FHLB long-term advances added during the second quarter of 2023. The increase in the average balance accounted for a $232,000 increase in interest expense.

Provision for Credit Losses

The provision for credit losses recorded for the three months ended March 31, 2024 was a net recovery of $37,000. The provision for credit losses - loans was a recovery of $143,000 and was primarily due to a decrease in loan balances while the provision for credit losses - unfunded commitments was $106,000 and was due to an increase in qualitative factors. This compared to an $80,000 provision for credit losses recorded for the three months ended March 31, 2023.

Noninterest Income

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

Noninterest Expense

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

Statement of Financial Condition Review

Assets

Total assets increased $16.0 million, or 1.1%, to $1.47 billion at March 31, 2024, compared to $1.46 billion at December 31, 2023.

• Cash and due from banks increased $5.5 million, or 8.0%, to $73.7 million at March 31, 2024, compared to $68.2 million at December 31, 2023.
• Securities increased $25.2 million, or 12.2%, to $232.3 million at March 31, 2024, compared to $207.1 million at December 31, 2023. The securities balance was primarily impacted by the purchase of $29.8 million of collateralized loan obligation securities, partially offset by $3.1 million of principal repayments on amortizing securities.

Loans and Credit Quality

• Total loans decreased $14.1 million, or 1.3%, to $1.10 billion at March 31, 2024 compared to $1.11 billion at December 31, 2023. This was driven by decreases in consumer loans and commercial and industrial loans of $11.1 million and $8.0 million, respectively, partially offset by increases in commercial real estate loans, other loans and construction loans of $3.3 million, $1.4 million and $1.2 million, respectively. The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to rising market interest rates and the discontinuation of this product offering as of June 30, 2023. This portfolio is expected to continue to decline as resources are allocated and production efforts are focused on more profitable commercial products. The decrease in commercial and industrial loans was primarily due to the prepayment of a $20.0 million line of credit and a $5.0 million syndicated national credit.
• The allowance for credit losses (ACL) was $9.6 million at March 31, 2024 and $9.7 million at December 31, 2023. As a result, the ACL to total loans was 0.87% at March 31, 2024 and December 31, 2023. During the current year, the Company recorded a net recovery of credit losses of $37,000.
• Net recoveries for the three months ended March 31, 2024 were $18,000. Net recoveries for the three months ended March 31, 2023 were $756,000, or 0.29% of average loans on an annualized basis primarily due to recoveries totaling $750,000 related to a prior year $2.7 million charged-off commercial and industrial loan.
• Nonperforming loans, which includes nonaccrual loans and accruing loans past due 90 days or more, were $2.2 million at March 31, 2024 and December 31, 2023. Nonperforming loans to total loans ratio was 0.20% at March 31, 2024 and December 31, 2023.

Total liabilities increased $14.2 million, or 1.1%, to $1.33 billion at March 31, 2024 compared to $1.32 billion at December 31, 2023.

Deposits

• Total deposits decreased $4.7 million to $1.262 billion as of March 31, 2024 compared to $1.267 billion at December 31, 2023. Non interest-bearing demand deposits decreased $2.6 million, interest-bearing demand deposits decreased $39.9 million and savings deposits decreased $4.5 million, while money market deposits increased $7.3 million and time deposits increased $35.0 million. Deposit changes were primarily the result of cyclical fluctuations in municipal deposits and the current interest rate environment causing a shift in deposit products to higher priced time deposits. Additionally, the Bank added $13.0 million of brokered certificates of deposit during the period. Brokered certificates of deposit totaled $42.0 million as of March 31, 2024 compared to $29.0 million at December 31, 2023, all mature within three months and were utilized to fund the purchase of floating rate collateralized loan obligation securities. At March 31, 2024, FDIC insured deposits totaled approximately 63.1% of total deposits while an additional 15.0% of deposits were collateralized with investment securities.

Accrued Interest Payable and Other Liabilities

• Accrued interest payable and other liabilities increased $18.9 million, or 131.1%, to $33.3 million at March 31, 2024, compared to $14.4 million at December 31, 2023 primarily due to the purchase of $10.6 million of syndicated loans and $10.1 million of securities which were unsettled at the end of the period.

Stockholders’ Equity

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

Book value per share

Book value per common share was $27.53 at March 31, 2024 compared to $27.32 at December 31, 2023, an increase of $0.21.

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

Refer to “Explanation of Use of Non-GAAP Financial Measures” at the end of this Press Release.

About CB Financial Services, Inc.

CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers a broad array of retail and commercial lending and deposit services.

For more information about CB Financial Services, Inc. and Community Bank, visit our website at www.communitybank.tv.

Statement About Forward-Looking Statements

Statements contained in this press release that are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and such forward-looking statements are subject to significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions contained in the Act. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries include, but are not limited to, general and local economic conditions, changes in market interest rates, deposit flows, demand for loans, real estate values and competition, competitive products and pricing, the ability of our customers to make scheduled loan payments, loan delinquency rates and trends, our ability to manage the risks involved in our business, our ability to control costs and expenses, inflation, market and monetary fluctuations, changes in federal and state legislation and regulation applicable to our business, actions by our competitors, and other factors that may be disclosed in the Company’s periodic reports as filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.

CB FINANCIAL SERVICES, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except share and per share data) (Unaudited)
Selected Financial Condition Data	3/31/24			12/31/23			9/30/23			6/30/23			3/31/23
Assets
Cash and Due From Banks	$	73,691		$	68,223		$	52,597		$	78,093		$	103,545
Securities		232,276			207,095			172,904			181,427			189,025
Loans Held for Sale		200			—			—			—			—
Loans
Real Estate:
Residential		346,938			347,808			346,485			338,493			332,840
Commercial		470,430			467,154			466,910			458,614			452,770
Construction		44,323			43,116			41,874			44,523			39,522
Commercial and Industrial		103,313			111,278			100,873			102,266			79,501
Consumer		100,576			111,643			122,516			134,788			146,081
Other		30,763			29,397			23,856			22,470			21,151
Total Loans		1,096,343			1,110,396			1,102,514			1,101,154			1,071,865
Allowance for Credit Losses		(9,582	)		(9,707	)		(10,848	)		(10,666	)		(10,270	)
Loans, Net		1,086,761			1,100,689			1,091,666			1,090,488			1,061,595
Premises and Equipment Held for Sale		—			—			—			—			—
Premises and Equipment, Net		19,548			19,704			18,524			18,582			17,732
Bank-Owned Life Insurance		23,763			25,378			25,227			25,082			24,943
Goodwill		9,732			9,732			9,732			9,732			9,732
Intangible Assets, Net		617			958			2,177			2,622			3,068
Accrued Interest Receivable and Other Assets		25,459			24,312			26,665			26,707			21,068
Total Assets	$	1,472,047		$	1,456,091		$	1,399,492		$	1,432,733		$	1,430,708
Liabilities
Deposits
Noninterest-Bearing Demand Accounts	$	275,182		$	277,747		$	305,145		$	316,098		$	350,911
Interest-Bearing Demand Accounts		323,134			362,994			357,381			374,654			359,051
Money Market Accounts		208,375			201,074			189,187			185,814			206,174
Savings Accounts		190,206			194,703			207,148			217,267			234,935
Time Deposits		265,597			230,641			177,428			169,482			130,449
Total Deposits		1,262,494			1,267,159			1,236,289			1,263,315			1,281,520
Short-Term Borrowings		—			—			—			—			121
Other Borrowings		34,688			34,678			34,668			34,658			14,648
Accrued Interest Payable and Other Liabilities		33,275			14,420			13,689			18,171			17,224
Total Liabilities		1,330,457			1,316,257			1,284,646			1,316,144			1,313,513
Stockholders’ Equity		141,590			139,834			114,846			116,589			117,195
Total Liabilities and Stockholders’ Equity	$	1,472,047		$	1,456,091		$	1,399,492		$	1,432,733		$	1,430,708

(Dollars in thousands, except share and per share data) (Unaudited)
	Three Months Ended
Selected Operating Data	3/31/24			12/31/23			9/30/23			6/30/23			3/31/23
Interest and Dividend Income:
Loans, Including Fees	$	14,838		$	14,804		$	14,049		$	13,426		$	12,371
Securities:
Taxable		2,303			1,164			940			950			964
Tax-Exempt		—			33			41			42			41
Dividends		27			32			25			25			24
Other Interest and Dividend Income		818			872			819			760			844
Total Interest and Dividend Income		17,986			16,905			15,874			15,203			14,244
Interest Expense:
Deposits		5,991			5,336			4,750			3,842			2,504
Short-Term Borrowings		—			26			—			3			2
Other Borrowings		404			407			407			238			155
Total Interest Expense		6,395			5,769			5,157			4,083			2,661
Net Interest and Dividend Income		11,591			11,136			10,717			11,120			11,583
(Recovery) Provision for Credit Losses - Loans		(143	)		(1,147	)		291			492			80
Provision (Recovery) for Credit Losses - Unfunded Commitments		106			(273	)		115			(60	)		—
Net Interest and Dividend Income After Net (Recovery) Provision for Credit Losses		11,628			12,556			10,311			10,688			11,503
Noninterest Income:
Service Fees		415			460			466			448			445
Insurance Commissions		2			969			1,436			1,511			1,922
Other Commissions		62			60			94			224			144
Net Gain (Loss) on Sales of Loans		22			2			—			(5	)		2
Net Loss on Securities		(166	)		(9,830	)		(37	)		(100	)		(232	)
Net Gain on Purchased Tax Credits		12			7			7			7			7
Gain on Sale of Subsidiary		—			24,578			—			—			—
Net Gain on Disposal of Premises and Equipment		274			—			—			—			11
Income from Bank-Owned Life Insurance		148			151			145			139			140
Net Gain on Bank-Owned Life Insurance Claims		915			—			—			1			302
Other Income		232			121			301			44			69
Total Noninterest Income		1,916			16,518			2,412			2,269			2,810
Noninterest Expense:
Salaries and Employee Benefits		4,576			6,224			5,369			5,231			5,079
Occupancy		749			810			698			789			701
Equipment		264			298			265			283			218
Data Processing		692			726			714			718			857
Federal Deposit Insurance Corporation Assessment		129			189			189			224			152
Pennsylvania Shares Tax		297			217			217			195			260
Contracted Services		281			299			286			434			147
Legal and Professional Fees		212			434			320			246			182
Advertising		129			158			114			75			79
Other Real Estate Owned (Income)		(23	)		(36	)		(8	)		(35	)		(37	)
Amortization of Intangible Assets		341			430			445			446			445
Other Expense		781			1,016			878			895			945
Total Noninterest Expense		8,428			10,765			9,487			9,501			9,028
Income Before Income Tax Expense		5,116			18,309			3,236			3,456			5,285
Income Tax Expense		920			5,343			564			699			1,129
Net Income	$	4,196		$	12,966		$	2,672		$	2,757		$	4,156

	Three Months Ended
Per Common Share Data	3/31/24		12/31/23		9/30/23		6/30/23		3/31/23
Dividends Per Common Share	$	0.25	$	0.25	$	0.25	$	0.25	$	0.25
Earnings Per Common Share - Basic		0.82		2.53		0.52		0.54		0.81
Earnings Per Common Share - Diluted		0.82		2.52		0.52		0.54		0.81
Weighted Average Common Shares Outstanding - Basic		5,129,903		5,119,184		5,115,026		5,111,987		5,109,597
Weighted Average Common Shares Outstanding - Diluted		5,142,286		5,135,997		5,126,546		5,116,134		5,115,705

	3/31/24			12/31/23			9/30/23			6/30/23			3/31/23
Common Shares Outstanding		5,142,901			5,118,713			5,120,678			5,111,678			5,116,830
Book Value Per Common Share	$	27.53		$	27.32		$	22.43		$	22.81		$	22.90
Tangible Book Value per Common Share ^(1)		25.52			25.23			20.10			20.39			20.40
Stockholders’ Equity to Assets		9.6	%		9.6	%		8.2	%		8.1	%		8.2	%
Tangible Common Equity to Tangible Assets ^(1)		9.0			8.9			7.4			7.3			7.4

	Three Months Ended
Selected Financial Ratios ^(2)	3/31/24		12/31/23		9/30/23		6/30/23		3/31/23
Return on Average Assets	1.17	%	3.62	%	0.75	%	0.79	%	1.21	%
Return on Average Equity	12.03		44.99		9.03		9.38		14.69
Average Interest-Earning Assets to Average Interest-Bearing Liabilities	137.07		138.67		139.65		142.28		147.38
Average Equity to Average Assets	9.72		8.04		8.32		8.38		8.27
Net Interest Rate Spread	2.67		2.56		2.54		2.78		3.13
Net Interest Rate Spread (FTE) ^(1)	2.68		2.57		2.55		2.79		3.14
Net Interest Margin	3.36		3.19		3.13		3.29		3.51
Net Interest Margin (FTE) ^(1)	3.37		3.21		3.14		3.30		3.52
Net (Recoveries) Charge-Offs to Average Loans	(0.01	)	—		0.04		0.04		(0.29	)
Efficiency Ratio	62.40		38.93		72.26		70.96		62.72

Asset Quality Ratios	3/31/24		12/31/23		9/30/23		6/30/23		3/31/23
Allowance for Credit Losses to Total Loans	0.87	%	0.87	%	0.98	%	0.97	%	0.96	%
Allowance for Credit Losses to Nonperforming Loans ^(3)	437.73		433.35		330.13		260.46		189.73
Delinquent and Nonaccrual Loans to Total Loans^(4)	0.63		0.62		0.73		0.68		1.02
Nonperforming Loans to Total Loans ^(3)	0.20		0.20		0.30		0.37		0.51
Nonperforming Assets to Total Assets ^(5)	0.15		0.16		0.23		0.30		0.40

Capital Ratios ^(6)	3/31/24		12/31/23		9/30/23		6/30/23		3/31/23
Common Equity Tier 1 Capital (to Risk Weighted Assets)	14.50	%	13.64	%	12.77	%	12.54	%	12.60	%
Tier 1 Capital (to Risk Weighted Assets)	14.50		13.64		12.77		12.54		12.60
Total Capital (to Risk Weighted Assets)	15.51		14.61		13.90		13.64		13.69
Tier 1 Leverage (to Adjusted Total Assets)	10.28		10.19		9.37		9.26		9.24

(1)	Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.
(2)	Interim period ratios are calculated on an annualized basis.
(3)	Nonperforming loans consist of all nonaccrual loans and accruing loans that are 90 days or more past due.
(4)	Delinquent loans consist of accruing loans that are 30 days or more past due.
(5)	Nonperforming assets consist of nonperforming loans and other real estate owned.
(6)	Capital ratios are for Community Bank only.
Certain items previously reported may have been reclassified to conform with the current reporting period’s format.

AVERAGE BALANCES AND YIELDS
	Three Months Ended
	March 31, 2024						December 31, 2023						September 30, 2023						June 30, 2023						March 31, 2023
	Average Balance		Interest and Dividends		Yield / Cost ^(1)		Average Balance		Interest and Dividends		Yield / Cost ^(1)		Average Balance		Interest and Dividends		Yield / Cost ^(1)		Average Balance		Interest and Dividends		Yield / Cost ^(1)		Average Balance		Interest and Dividends		Yield / Cost ^(1)
(Dollars in thousands) (Unaudited)
Assets:
Interest-Earning Assets:
Loans, Net ^(2)	$	1,087,889	$	14,877	5.50	%	$	1,098,284	$	14,840	5.36	%	$	1,088,691	$	14,081	5.13	%	$	1,079,399	$	13,450	5.00	%	$	1,040,570	$	12,391	4.83	%
Debt Securities
Taxable		235,800		2,303	3.91			206,702		1,164	2.25			204,848		940	1.84			209,292		950	1.82			213,158		964	1.81
Tax-Exempt		—		—	—			4,833		42	3.48			6,013		52	3.46			6,180		53	3.43			6,270		52	3.32
Equity Securities		2,693		27	4.01			2,693		32	4.75			2,693		25	3.71			2,693		25	3.71			2,693		24	3.56
Interest-Earning Deposits at Banks		58,887		733	4.98			67,450		808	4.79			52,466		750	5.72			53,582		721	5.38			73,221		805	4.40
Other Interest-Earning Assets		3,235		85	10.57			3,387		64	7.50			3,292		69	8.32			2,783		39	5.62			2,633		39	6.01
Total Interest-Earning Assets		1,388,504		18,025	5.22			1,383,349		16,950	4.86			1,358,003		15,917	4.65			1,353,929		15,238	4.51			1,338,545		14,275	4.33
Noninterest-Earning Assets		54,910						38,464						52,885						52,812						49,703
Total Assets	$	1,443,414					$	1,421,813					$	1,410,888					$	1,406,741					$	1,388,248
Liabilities and Stockholders' Equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Accounts	$	334,880	$	1,794	2.15	%	$	362,018	$	1,965	2.15	%	$	363,997	$	2,003	2.18	%	$	354,497	$	1,582	1.79	%	$	335,327	$	1,191	1.44	%
Money Market Accounts		203,867		1,514	2.99			205,060		1,441	2.79			187,012		1,141	2.42			194,565		1,033	2.13			213,443		939	1.78
Savings Accounts		191,444		59	0.12			200,737		57	0.11			212,909		54	0.10			225,175		53	0.09			242,298		37	0.06
Time Deposits		248,118		2,624	4.25			193,188		1,873	3.85			173,832		1,552	3.54			155,867		1,174	3.02			101,147		337	1.35
Total Interest-Bearing Deposits		978,309		5,991	2.46			961,003		5,336	2.20			937,750		4,750	2.01			930,104		3,842	1.66			892,215		2,504	1.14
Short-Term Borrowings		—		—	—			1,902		26	5.42			—		—	—			480		3	2.51			1,344		2	0.60
Other Borrowings		34,682		404	4.69			34,673		407	4.66			34,662		407	4.66			21,026		238	4.54			14,641		155	4.29
Total Interest-Bearing Liabilities		1,012,991		6,395	2.54			997,578		5,769	2.29			972,412		5,157	2.10			951,610		4,083	1.72			908,200		2,661	1.19
Noninterest-Bearing Demand Deposits		278,691						305,789						312,016						326,262						362,343
Total Funding and Cost of Funds		1,291,682			1.99			1,303,367			1.76			1,284,428			1.59			1,277,872			1.28			1,270,543			0.85
Other Liabilities		11,441						4,119						9,025						10,920						2,953
Total Liabilities		1,303,123						1,307,486						1,293,453						1,288,792						1,273,496
Stockholders' Equity		140,291						114,327						117,435						117,949						114,752
Total Liabilities and Stockholders' Equity	$	1,443,414					$	1,421,813					$	1,410,888					$	1,406,741					$	1,388,248
Net Interest Income (FTE) (Non-GAAP) ^(3)			$	11,630					$	11,181					$	10,760					$	11,155					$	11,614
Net Interest-Earning Assets ^(4)		375,513						385,771						385,591						402,319						430,345
Net Interest Rate Spread (FTE) (Non-GAAP) ^(3) (5)					2.68	%					2.57	%					2.55	%					2.79	%					3.14	%
Net Interest Margin (GAAP)^(6)					3.36						3.19						3.13						3.29						3.51
Net Interest Margin (FTE) (Non-GAAP)^(3)(6)					3.37						3.21						3.14						3.30						3.52

(1)	Annualized based on three months ended results.
(2)	Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.
(3)	Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.
(4)	Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5)	Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(6)	Net interest margin represents annualized net interest income divided by average total interest-earning assets.

Explanation of Use of Non-GAAP Financial Measures

In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Press Release contains or references, certain Non-GAAP financial measures. We believe these Non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these Non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar Non-GAAP measures which may be presented by other companies. Where Non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein.

	3/31/24			12/31/23			9/30/23			6/30/23			3/31/23
(Dollars in thousands, except share and per share data) (Unaudited)
Total Assets (GAAP)	$	1,472,047		$	1,456,091		$	1,399,492		$	1,432,733		$	1,430,708
Goodwill and Intangible Assets, Net		(10,349	)		(10,690	)		(11,909	)		(12,354	)		(12,800	)
Tangible Assets (Non-GAAP) (Numerator)	$	1,461,698		$	1,445,401		$	1,387,583		$	1,420,379		$	1,417,908
Stockholders' Equity (GAAP)	$	141,590		$	139,834		$	114,846		$	116,589		$	117,195
Goodwill and Intangible Assets, Net		(10,349	)		(10,690	)		(11,909	)		(12,354	)		(12,800	)
Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator)	$	131,241		$	129,144		$	102,937		$	104,235		$	104,395
Stockholders’ Equity to Assets (GAAP)		9.6	%		9.6	%		8.2	%		8.1	%		8.2	%
Tangible Common Equity to Tangible Assets (Non-GAAP)		9.0	%		8.9	%		7.4	%		7.3	%		7.4	%
Common Shares Outstanding (Denominator)		5,142,901			5,118,713			5,120,678			5,111,678			5,116,830
Book Value per Common Share (GAAP)	$	27.53		$	27.32		$	22.43		$	22.81		$	22.90
Tangible Book Value per Common Share (Non-GAAP)	$	25.52		$	25.23		$	20.10		$	20.39		$	20.40

	Three Months Ended
	3/31/24			12/31/23			9/30/23			6/30/23			3/31/23
(Dollars in thousands) (Unaudited)
Net Income (GAAP)	$	4,196		$	12,966		$	2,672		$	2,757		$	4,156
Amortization of Intangible Assets, Net		341			430			445			446			445
Adjusted Net Income (Non-GAAP) (Numerator)	$	4,537		$	13,396		$	3,117		$	3,203		$	4,601
Annualization Factor		4.02			3.97			3.97			4.01			4.06
Average Stockholders' Equity (GAAP)	$	140,291		$	114,327		$	117,435		$	117,949		$	114,752
Average Goodwill and Intangible Assets, Net		(10,553	)		(11,829	)		(12,185	)		(12,626	)		(13,080	)
Average Tangible Common Equity (Non-GAAP) (Denominator)	$	129,738		$	102,498		$	105,250		$	105,323		$	101,672
Return on Average Equity (GAAP)		12.03	%		44.99	%		9.03	%		9.38	%		14.69	%
Return on Average Tangible Common Equity (Non-GAAP)		14.07	%		51.85	%		11.75	%		12.20	%		18.35	%

	Three Months Ended
	3/31/24			12/31/23			9/30/23			6/30/23			3/31/23
(Dollars in thousands) (Unaudited)
Interest Income (GAAP)	$	17,986		$	16,905		$	15,874		$	15,203		$	14,244
Adjustment to FTE Basis		39			45			43			35			31
Interest Income (FTE) (Non-GAAP)		18,025			16,950			15,917			15,238			14,275
Interest Expense (GAAP)		6,395			5,769			5,157			4,083			2,661
Net Interest Income (FTE) (Non-GAAP)	$	11,630		$	11,181		$	10,760		$	11,155		$	11,614
Net Interest Rate Spread (GAAP)		2.67	%		2.56	%		2.54	%		2.78	%		3.13	%
Adjustment to FTE Basis		0.01			0.01			0.01			0.01			0.01
Net Interest Rate Spread (FTE) (Non-GAAP)		2.68	%		2.57	%		2.55	%		2.79	%		3.14	%
Net Interest Margin (GAAP)		3.36	%		3.19	%		3.13	%		3.29	%		3.51	%
Adjustment to FTE Basis		0.01			0.02			0.01			0.01			0.01
Net Interest Margin (FTE) (Non-GAAP)		3.37	%		3.21	%		3.14	%		3.30	%		3.52	%

	Three Months Ended
	3/31/24			12/31/23			9/30/23			6/30/23			3/31/23
(Dollars in thousands) (Unaudited)
Income Before Income Tax Expense (GAAP)	$	5,116		$	18,309		$	3,236		$	3,456		$	5,285
Net (Recovery) Provision for Credit Losses		(37	)		(1,420	)		406			432			80
Adjustments
Net Loss on Securities		166			9,830			37			100			232
Gain on Sale of Subsidiary		—			(24,578	)		—			—			—
Net Gain on Disposal of Premises and Equipment		(274	)		—			—			—			(11	)
Net Gain on Bank-Owned Life Insurance Claims		(915	)		—			—			(1	)		(302	)
Adjusted PPNR (Non-GAAP) (Numerator)	$	4,056		$	2,141		$	3,679		$	3,987		$	5,284
Annualization Factor		4.02			3.97			3.97			4.01			4.06
Average Assets (Denominator)	$	1,443,414		$	1,421,813		$	1,410,888		$	1,406,741		$	1,388,248
Adjusted PPNR Return on Average Assets (Non-GAAP)		1.13	%		0.60	%		1.04	%		1.14	%		1.55	%

	Three Months Ended
	3/31/24			12/31/23			9/30/23			6/30/23			3/31/23
(Dollars in thousands, except share and per share data) (Unaudited)
Net Income (GAAP)	$	4,196		$	12,966		$	2,672		$	2,757		$	4,156
Adjustments
Net Loss on Securities		166			9,830			37			100			232
Gain on Sale of Subsidiary		—			(24,578	)		—			—			—
Net Gain on Disposal of Premises and Equipment		(274	)		—			—			—			(11	)
Net Gain on Bank-Owned Life Insurance Claims		(915	)		—			—			(1	)		(302	)
Tax effect		23			4,843			(8	)		(21	)		(46	)
Adjusted Net Income (Non-GAAP)	$	3,196		$	3,061		$	2,701		$	2,835		$	4,029
Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding		5,142,286			5,135,997			5,126,546			5,116,134			5,115,705
Earnings per Common Share - Diluted (GAAP)	$	0.82		$	2.52		$	0.52		$	0.54		$	0.81
Adjusted Earnings per Common Share - Diluted (Non-GAAP)	$	0.62		$	0.60		$	0.53		$	0.55		$	0.79
Net Income (GAAP) (Numerator)	$	4,196		$	12,966		$	2,672		$	2,757		$	4,156
Annualization Factor		4.02			3.97			3.97			4.01			4.06
Average Assets (Denominator)		1,443,414			1,421,813			1,410,888			1,406,741			1,388,248
Return on Average Assets (GAAP)		1.17	%		3.62	%		0.75	%		0.79	%		1.21	%
Adjusted Net Income (Non-GAAP) (Numerator)	$	3,196		$	3,061		$	2,701		$	2,835		$	4,029
Annualization Factor		4.02			3.97			3.97			4.01			4.06
Average Assets (Denominator)		1,443,414			1,421,813			1,410,888			1,406,741			1,388,248
Adjusted Return on Average Assets (Non-GAAP)		0.89	%		0.85	%		0.76	%		0.81	%		1.18	%

	Three Months Ended
	3/31/24			12/31/23			9/30/23			6/30/23			3/31/23
(Dollars in thousands) (Unaudited)
Net Income (GAAP) (Numerator)	$	4,196		$	12,966		$	2,672		$	2,757		$	4,156
Annualization Factor		4.02			3.97			3.97			4.01			4.06
Average Equity (GAAP) (Denominator)		140,291			114,327			117,435			117,949			114,752
Return on Average Equity (GAAP)		12.03	%		44.99	%		9.03	%		9.38	%		14.69	%
Adjusted Net Income (Non-GAAP) (Numerator)	$	3,196		$	3,061		$	2,701		$	2,835		$	4,029
Annualization Factor		4.02			3.97			3.97			4.01			4.06
Average Equity (GAAP) (Denominator)		140,291			114,327			117,435			117,949			114,752
Adjusted Return on Average Equity (Non-GAAP)		9.16	%		10.62	%		9.12	%		9.64	%		14.24	%