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CB Financial Services, Inc. Announces Fourth Quarter and Full Year 2023 Financial Results and Declares Quarterly Cash Dividend

CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”), today announced its fourth quarter and 2023 financial results.

 

Three Months Ended

 

Year Ended

 

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

 

12/31/23

12/31/22

(Dollars in thousands, except per share data) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (GAAP)

$

12,966

 

$

2,672

$

2,757

 

$

4,156

 

$

4,152

 

 

$

22,550

 

$

11,247

 

Net Income Adjustments

 

(9,905

)

 

29

 

 

78

 

 

(127

)

 

(66

)

 

 

(9,926

)

 

(208

)

Adjusted Net Income (Non-GAAP) (1)

$

3,061

 

$

2,701

 

$

2,835

 

 

$

4,029

 

$

4,086

 

 

$

12,624

 

$

11,039

 

 

 

 

 

 

 

 

 

 

Earnings per Common Share - Diluted (GAAP)

$

2.52

 

$

0.52

 

$

0.54

 

 

$

0.81

 

$

0.81

 

 

$

4.40

 

$

2.18

 

Adjusted Earnings per Common Share - Diluted (Non-GAAP) (1)

$

0.60

 

$

0.53

 

$

0.55

 

 

$

0.79

 

$

0.80

 

 

$

2.46

 

$

2.14

 

(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.

2023 Fourth Quarter Financial Highlights

(Comparisons to three months ended December 31, 2022 unless otherwise noted)

  • Net income was $13.0 million, compared to $4.2 million. Current period results were driven by a $24.6 million pre-tax gain on the sale of the Bank’s subsidiary insurance company, Exchange Underwriters (EU), partially offset by a $9.8 million pre-tax loss on the sale of securities resulting primarily from the execution of a balance sheet repositioning strategy. Results were also impacted by net interest margin (NIM) compression coupled with increases in noninterest expense and income tax expense, partially offset by a decrease in the provision for credit losses.
    • Adjusted net income (Non-GAAP) was $3.1 million compared to $4.1 million.
    • Income before income tax expense was $18.3 million compared to $5.2 million.
    • Adjusted pre-provision net revenue (PPNR) (Non-GAAP) was $2.1 million compared to $5.1 million.
  • Earnings per diluted common share (EPS) increased to $2.52 from $0.81.
    • Adjusted earning per common share - diluted (Non-GAAP) was $0.60, compared to $0.80.
  • Return on average assets (annualized) was 3.62%, compared to 1.16%.
    • Adjusted return on average assets (annualized) (Non-GAAP) was 0.85%, compared to 1.15%.
  • Return on average equity (annualized) was 44.99%, compared to 15.26%.
    • Adjusted return on average equity (annualized) (Non-GAAP) was 10.62%, compared to 15.01%.
  • NIM declined to 3.19% from 3.46%.
  • Net interest and dividend income was $11.1 million, compared to $11.9 million.
  • Noninterest income increased to $16.5 million, compared to $2.4 million including the aforementioned gain on the sale of the subsidiary and loss on the sale of securities.
  • Noninterest expense increased to $10.8 million, compared to $9.0 million, primarily due to increases in compensation and benefits and equipment costs.

(Amounts at December 31, 2023; comparisons to December 31, 2022, unless otherwise noted)

  • Total assets increased to $1.46 billion from $1.41 billion.
  • Total loans increased $60.5 million, or 5.8%, to $1.11 billion compared to $1.05 billion, and included increases of $41.2 million, or 58.9%, in commercial and industrial loans, $30.3 million, or 6.9%, in commercial real estate loans, $17.1 million, or 5.2%, in residential mortgage loans, and $8.9 million, or 43.8%, in other loans, partially offset by a decrease of $35.3 million, or 24.0%, in consumer loans, which is primarily comprised of indirect automobile loans. Excluding the $34.9 million decrease in indirect automobile loans resulting from the discontinuation of that product as of June 30, 2023, total loans increased $95.4 million, or 9.1%.
  • Nonperforming loans to total loans was 0.20%, a decrease of 35 basis points (“bps”), compared to 0.55%.
  • Total deposits were $1.267 billion, a decrease of $1.3 million, compared to $1.269 billion.
  • Book value per share was $27.31, compared to $22.43 as of September 30, 2023 and $21.60 as of December 31, 2022.
  • Tangible book value per share (Non-GAAP) was $25.23, compared to $20.10 as of September 30, 2023 and $19.00 as of December 31, 2022. The year-to-date change was due to an increase in stockholders’ equity primarily related to current period net income of $22.6 million, a $9.5 million increase in accumulated other comprehensive income and a $2.1 million positive adjustment due to the Company’s January 1, 2023 adoption of CECL, partially offset by current period dividends paid to stockholders of $5.1 million.

Management Commentary

President and CEO John H. Montgomery commented, "Three years ago, we embarked on a comprehensive strategy aimed at optimizing operations, investing in talent, and fortifying our dedication to all stakeholders by striving for excellence in client experience. Despite facing a challenging and uncertain economic landscape, our efforts in 2023, coupled with the work of the preceding two years, underscore our commitment to these objectives.

While our fourth-quarter results reflected the ongoing trend of net interest margin pressure due to heightened funding costs driven by prevailing market interest rates, we sustained consistent loan growth. This growth was particularly notable in higher-yielding commercial loans. In a year marked by significant deposit movements, our core deposits remained relatively stable, albeit shifting from non-interest and low interest bearing accounts to higher cost time deposits. Notably, our asset quality remains strong, with nonperforming loans well below prior year levels.

Despite the challenges posed by the interest rate environment, our prior investments in talent and our ongoing efforts to streamline operations are yielding positive outcomes across our franchise.

During the quarter, we successfully completed the sale of our full-service independent insurance agency subsidiary, Exchange Underwriters, to World Insurance Associates. This transaction not only realized a substantial valuation premium but also proved immediately accretive to capital, tangible book value and liquidity. The additional capital infusion provides us with the flexibility to assess and pursue various strategic initiatives that reinforce our core banking business, with a specific focus on enhancing long-term shareholder value.

Furthermore, we made a proactive decision to reposition our securities portfolio. On an annualized basis, the acquired securities exhibit a positive spread differential of approximately 360 basis points over the securities that were divested. This strategic move is anticipated to add approximately 17 basis points to net interest margin and contribute approximately $1.8 million of after-tax earnings in 2024. Aligned with the sale of our insurance agency subsidiary, we view this as a judicious deployment of capital designed to augment long-term shareholder value and bolster earnings.”

In conclusion, Mr. Montgomery affirmed, "As we usher in 2024, our commitment to prudently manage our capital and liquidity positions remains unwavering. We will persist in investing in our franchise, staying true to our long-term plan and prioritizing the delivery of an exceptional client experience that accrues benefits to all our stakeholders."

Dividend Information

The Company’s Board of Directors declared a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about February 29, 2024, to stockholders of record as of the close of business on February 15, 2024.

2023 Fourth Quarter Financial Review

Net Interest and Dividend Income

Net interest and dividend income decreased $730,000, or 6.2%, to $11.1 million for the three months ended December 31, 2023 compared to $11.9 million for the three months ended December 31, 2022.

  • Net interest margin (GAAP) decreased to 3.19% for the three months ended December 31, 2023 compared to 3.46% for the three months ended December 31, 2022. Fully tax equivalent (FTE) net interest margin (Non-GAAP) decreased 26 bps to 3.21% for the three months ended December 31, 2023 compared to 3.47% for the three months ended December 31, 2022.
  • Interest and dividend income increased $3.1 million, or 22.0%, to $16.9 million for the three months ended December 31, 2023 compared to $13.9 million for the three months ended December 31, 2022.
    • Interest income on loans increased $3.0 million, or 25.1%, to $14.8 million for the three months ended December 31, 2023 compared to $11.8 million for the three months ended December 31, 2022. The average yield on loans increased 82 bps to 5.36% compared to 4.54% resulting in a $2.2 million increase in interest income on loans. The average balance of loans increased $63.6 million to $1.10 billion from $1.03 billion, generating $750,000 of additional interest income on loans.
    • Interest income on taxable investment securities increased $190,000, or 19.5%, to $1.2 million for the three months ended December 31, 2023 compared to $974,000 for the three months ended December 31, 2022 driven by a 45 bp increase in average yield, partially offset by a $10.2 million decrease in average balances.
    • Interest income on interest-earning deposits at other banks decreased $131,000, to $808,000 for the three months ended December 31, 2023 compared to $939,000 for the three months ended December 31, 2022 driven by a $29.9 million decrease in average balances, partially offset by a 91 bp increase in the average yield. The increase in the average yield was the result of the Federal Reserve Board’s interest rate increases.
  • Interest expense increased $3.8 million, or 190.0%, to $5.8 million for the three months ended December 31, 2023 compared to $2.0 million for the three months ended December 31, 2022.
    • Interest expense on deposits increased $3.5 million, or 194.6%, to $5.3 million for the three months ended December 31, 2023 compared to $1.8 million for the three months ended December 31, 2022. 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 139 bp, or 171.7%, increase in the average cost of interest-bearing deposits compared to the three months ended December 31, 2022. This accounted for a $3.4 million increase in interest expense. Additionally, interest-bearing deposit balances increased $73.3 million, or 8.3%, to $961.0 million as of December 31, 2023 compared to $887.7 million as of December 31, 2022, accounting for a $170,000 increase in interest expense.
    • Interest expense on borrowed funds increased $255,000, or 143.3%, to $433,000 for the three months ended December 31, 2023 compared to $178,000 for the three months ended December 31, 2022. The average balance of borrowed funds increased $20.6 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 $185,000 increase in interest expense.

Provision for Credit Losses

Effective January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The provision for credit losses recorded for the three months ended December 31, 2023 was a recovery of $1.4 million and was primarily due to improvements in qualitative factors coupled with a decrease in historical loss rates. This compared to no provision for credit losses recorded for the three months ended December 31, 2022.

Noninterest Income

Noninterest income increased $14.2 million, or 599.9%, to $16.5 million for the three months ended December 31, 2023, compared to $2.4 million for the three months ended December 31, 2022. This increase related to a $24.6 million pre-tax gain on the sale of EU, partially offset by a $9.8 million pre-tax loss on the sale of securities primarily resulting from the execution of a balance sheet repositioning strategy. Noninterest income excluding the gain on the sale of the subsidiary and gains and losses on securities for both periods decreased $507,000 to $1.8 million for the three months ended December 31, 2023 compared to $2.3 million for the three months ended December 31, 2022. This decrease resulted primarily from a $430,000 decrease in insurance commissions as only two months of income were recognized for the three months ended December 31, 2023 due to the sale of EU, compared to a full quarter of income recognized for the three months ended December 31, 2022.

Noninterest Expense

Noninterest expense increased $1.8 million, or 19.6%, to $10.8 million for the three months ended December 31, 2023 compared to $9.0 million for the three months ended December 31, 2022. The current quarter increase included one-time non-recurring expenses associated with sale of the insurance subsidiary of $691,000 related to salaries and benefits, $109,000 related to other noninterest expenses and $17,000 related to legal and professional fees. Salaries and benefits increased $1.6 million, or 34.6%, to $6.2 million primarily due to previously mentioned one-time non recurring expense, merit increases and revenue producing staff additions. Equipment expense increased $120,000 or 67.4%, to $298,000, due to costs associated with the implementation and operation of new interactive teller machines.

Statement of Financial Condition Review

Assets

Total assets increased $47.2 million, or 3.4%, to $1.46 billion at December 31, 2023, compared to $1.41 billion at December 31, 2022.

  • Cash and due from banks decreased $33.7 million, or 32.5%, to $70.0 million at December 31, 2023, compared to $103.7 million at December 31, 2022, due to significant loan growth.
  • Securities increased $17.0 million, or 8.9%, to $207.1 million at December 31, 2023, compared to $190.1 million at December 31, 2022. The securities balance was primarily impacted by the purchase of $29.9 million of collateralized loan obligation securities, partially offset by $15.8 million of repayments on mortgage-backed and collateralized mortgage obligation securities and a $110,000 decrease in the market value in the equity securities portfolio, which is primarily comprised of bank stocks. During the fourth quarter, the Bank implemented a balance sheet repositioning strategy of its portfolio of available-for-sale securities. 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%.

Loans and Credit Quality

  • Total loans increased $60.5 million, or 5.8%, to $1.11 billion at December 31, 2023 compared to $1.05 billion at December 31, 2022. Loan growth was driven by increases in commercial and industrial loans, commercial real estate loans, residential mortgage loans and other loans of $41.2 million, $30.3 million, $17.1 million, and $8.9 million, respectively, partially offset by a decrease in consumer loans of $35.3 million. 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. Excluding the $34.9 million decrease in indirect automobile loans, total loans increased $95.4 million, or 9.1%.
  • The allowance for credit losses (ACL) was $9.7 million at December 31, 2023 and $12.8 million at December 31, 2022. As a result, the ACL to total loans was 0.87% at December 31, 2023 compared to 1.22% at December 31, 2022. The change in the ACL was primarily due to the Company's aforementioned adoption of CECL. At adoption, the Company decreased its ACL by $3.4 million. Contributing to the change in ACL was a prior year charge-off of $2.7 million and qualitative factors that significantly impacted the incurred loss model driven by historical activity compared to the adopted CECL methodology that is centered around CECL activity using a forecast approach. During the current year, the Company recorded a recovery of credit losses of $502,000 due to improvements in qualitative factors coupled with a decrease in historical loss rates
  • Net recoveries for the three months ended December 31, 2023 were $6,000. Net charge-offs for the three months ended December 31, 2022 were $35,000, or 0.01% of average loans on an annualized basis. Net recoveries for the year ended December 31, 2023 were $557,000 primarily due to recoveries totaling $750,000 related to the prior year $2.7 million charged-off commercial and industrial loan. Net charge-offs for the year ended December 31, 2022 were $2.5 million.
  • Nonperforming loans, which includes nonaccrual loans and accruing loans past due 90 days or more, were $2.2 million at December 31, 2023 compared to $5.8 million at December 31, 2022. The decrease of $3.6 million was due to ten loans totaling $1.7 million transferred from nonaccrual to accrual status during the current period and a $1.4 million partial repayment of a nonaccrual commercial real estate loan. Nonperforming loans to total loans ratio was 0.20% at December 31, 2023 compared to 0.55% at December 31, 2022.

Other

  • Intangible assets decreased $2.6 million, or 74.0%, to $958,000 at December 31, 2023 compared to $3.5 million at December 31, 2022 due to $1.8 million of amortization expense recognized during the period and a write-off of the $789,000 remaining balance of EU’s customer list as a result of the sale of the subsidiary.
  • Accrued interest and other assets increased $1.4 million or 6.6%, to $22.5 million at December 31, 2023, compared to $26.7 million at December 31, 2022 due primarily to a $1.8 million adjustment related to a fixed-to-floating interest rate swap derivative.

Total liabilities increased $17.5 million, or 1.3%, to $1.32 billion at December 31, 2023 compared to $1.30 billion at December 31, 2022.

Deposits

  • Total deposits decreased $1.3 million to $1.267 billion as of December 31, 2023 compared to $1.269 billion at December 31, 2022. Non interest-bearing demand deposits decreased $112.7 million, savings deposits decreased $53.3 million, and money market deposits decreased $8.1 million, while interest-bearing demand deposits increased $51.2 million and time deposits increased $121.5 million. The increase in interest-bearing demand deposits was primarily the result of higher interest rates attracting more customers and additional deposits from existing customers while higher time deposits resulted from the offering of a higher-rate certificate of deposit product and the addition of $29.0 million of brokered certificates of deposit. The brokered certificates of deposits all mature within three months and were utilized to fund the purchase of floating rate collateralized loan obligation securities. FDIC insured deposits totaled approximately 59.4% of total deposits while an additional 16.0% of deposits were collateralized with investment securities.

Borrowed Funds

  • Other borrowings increased $20.0 million, or 136.6%, to $34.7 million at December 31, 2023, compared to $14.6 million at December 31, 2022. During the second quarter, the Bank entered into $20.0 million of FHLB advances for a term of 24 months at 4.92%, the proceeds of which were utilized to match fund originations within the Bank’s commercial and industrial loan portfolio.
  • Short-term borrowings decreased $8.1 million, or 100.0%, as there were no short-term borrowings at December 31, 2023, compared to $8.1 million at December 31, 2022. At December 31, 2022, short-term borrowings were comprised entirely of securities sold under agreements to repurchase. These accounts were transitioned into other deposit products and account for a portion of the interest-bearing demand deposit increase.

Accrued Interest Payable and Other Liabilities

  • Accrued interest payable and other liabilities increased $6.8 million, or 89.7%, to $14.4 million at December 31, 2023, compared to $7.6 million at December 31, 2022 primarily due to a $3.4 million increase in accrued taxes payable, a $1.8 million increase related to a fixed-to-floating interest rate swap derivative and a $1.5 million increase in accrued interest payable on deposit accounts.

Stockholders’ Equity

Stockholders’ equity increased $29.7 million, or 27.0%, to $139.8 million at December 31, 2023, compared to $110.2 million at December 31, 2022. Key factors positively impacting stockholders’ equity included $22.6 million of net income for the current period, a $9.5 million increase in accumulated other comprehensive income and a $2.1 million positive adjustment, net of tax, due to the Company’s January 1, 2023 adoption of CECL as described above. These factors were partially offset by the payment of $5.1 million in dividends since December 31, 2022 and activity under share repurchase programs. On April 21, 2022, a $10.0 million repurchase program was authorized, with the Company repurchasing 74,656 shares at an average price of $22.38 per share since the inception of the program. In total, the Company repurchased $274,000 of common stock since December 31, 2022. The program expired on May 1, 2023.

Book value per share

Book value per common share was $27.31 at December 31, 2023 compared to $21.60 at December 31, 2022, an increase of $5.71.

Tangible book value per common share (Non-GAAP) was $25.23 at December 31, 2023, compared to $19.00 at December 31, 2022, an increase of $6.23.

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

12/31/23

 

9/30/23

 

6/30/23

 

3/31/23

 

12/31/22

Assets

 

 

 

 

 

 

 

 

 

Cash and Due From Banks

$

69,993

 

 

$

52,597

 

 

$

78,093

 

 

$

103,545

 

 

$

103,700

 

Securities

 

207,095

 

 

 

172,904

 

 

 

181,427

 

 

 

189,025

 

 

 

190,058

 

Loans

 

 

 

 

 

 

 

 

 

Real Estate:

 

 

 

 

 

 

 

 

 

Residential

 

347,808

 

 

 

346,485

 

 

 

338,493

 

 

 

332,840

 

 

 

330,725

 

Commercial

 

467,154

 

 

 

466,910

 

 

 

458,614

 

 

 

452,770

 

 

 

436,805

 

Construction

 

43,116

 

 

 

41,874

 

 

 

44,523

 

 

 

39,522

 

 

 

44,923

 

Commercial and Industrial

 

111,278

 

 

 

100,873

 

 

 

102,266

 

 

 

79,501

 

 

 

70,044

 

Consumer

 

111,643

 

 

 

122,516

 

 

 

134,788

 

 

 

146,081

 

 

 

146,927

 

Other

 

29,397

 

 

 

23,856

 

 

 

22,470

 

 

 

21,151

 

 

 

20,449

 

Total Loans

 

1,110,396

 

 

 

1,102,514

 

 

 

1,101,154

 

 

 

1,071,865

 

 

 

1,049,873

 

Allowance for Credit Losses

 

(9,707

)

 

 

(10,848

)

 

 

(10,666

)

 

 

(10,270

)

 

 

(12,819

)

Loans, Net

 

1,100,689

 

 

 

1,091,666

 

 

 

1,090,488

 

 

 

1,061,595

 

 

 

1,037,054

 

Premises and Equipment, Net

 

19,704

 

 

 

18,524

 

 

 

18,582

 

 

 

17,732

 

 

 

17,844

 

Bank-Owned Life Insurance

 

25,378

 

 

 

25,227

 

 

 

25,082

 

 

 

24,943

 

 

 

25,893

 

Goodwill

 

9,732

 

 

 

9,732

 

 

 

9,732

 

 

 

9,732

 

 

 

9,732

 

Intangible Assets, Net

 

958

 

 

 

2,177

 

 

 

2,622

 

 

 

3,068

 

 

 

3,513

 

Accrued Interest Receivable and Other Assets

 

22,542

 

 

 

26,665

 

 

 

26,707

 

 

 

21,068

 

 

 

21,144

 

Total Assets

$

1,456,091

 

 

$

1,399,492

 

 

$

1,432,733

 

 

$

1,430,708

 

 

$

1,408,938

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Noninterest-Bearing Demand Accounts

$

277,747

 

 

$

305,145

 

 

$

316,098

 

 

$

350,911

 

 

$

390,405

 

Interest-Bearing Demand Accounts

 

362,994

 

 

 

357,381

 

 

 

374,654

 

 

 

359,051

 

 

 

311,825

 

Money Market Accounts

 

201,074

 

 

 

189,187

 

 

 

185,814

 

 

 

206,174

 

 

 

209,125

 

Savings Accounts

 

194,703

 

 

 

207,148

 

 

 

217,267

 

 

 

234,935

 

 

 

248,022

 

Time Deposits

 

230,641

 

 

 

177,428

 

 

 

169,482

 

 

 

130,449

 

 

 

109,126

 

Total Deposits

 

1,267,159

 

 

 

1,236,289

 

 

 

1,263,315

 

 

 

1,281,520

 

 

 

1,268,503

 

 

 

 

 

 

 

 

 

 

 

Short-Term Borrowings

 

 

 

 

 

 

 

 

 

 

121

 

 

 

8,060

 

Other Borrowings

 

34,678

 

 

 

34,668

 

 

 

34,658

 

 

 

14,648

 

 

 

14,638

 

Accrued Interest Payable and Other Liabilities

 

14,420

 

 

 

13,689

 

 

 

18,171

 

 

 

17,224

 

 

 

7,582

 

Total Liabilities

 

1,316,257

 

 

 

1,284,646

 

 

 

1,316,144

 

 

 

1,313,513

 

 

 

1,298,783

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

139,834

 

 

 

114,846

 

 

 

116,589

 

 

 

117,195

 

 

 

110,155

 

Total Liabilities and Stockholders’ Equity

$

1,456,091

 

 

$

1,399,492

 

 

$

1,432,733

 

 

$

1,430,708

 

 

$

1,408,938

 

 

 

 

 

 

 

 

 

(Dollars in thousands, except share and per share data) (Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

Year Ended

Selected Operating Data

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

12/31/23

12/31/22

Interest and Dividend Income:

 

 

 

 

 

 

 

Loans, Including Fees

$

14,804

 

$

14,049

 

$

13,426

 

$

12,371

 

$

11,835

 

$

54,650

 

$

41,933

 

Securities:

 

 

 

 

 

 

 

Taxable

 

1,164

 

 

940

 

 

950

 

 

964

 

 

974

 

 

4,017

 

 

3,852

 

Tax-Exempt

 

33

 

 

41

 

 

42

 

 

41

 

 

40

 

 

157

 

 

213

 

Dividends

 

32

 

 

25

 

 

25

 

 

24

 

 

28

 

 

106

 

 

91

 

Other Interest and Dividend Income

 

872

 

 

819

 

 

760

 

 

844

 

 

978

 

 

3,295

 

 

1,627

 

Total Interest and Dividend Income

 

16,905

 

 

15,874

 

 

15,203

 

 

14,244

 

 

13,855

 

 

62,225

 

 

47,716

 

Interest Expense:

 

 

 

 

 

 

 

Deposits

 

5,336

 

 

4,750

 

 

3,842

 

 

2,504

 

 

1,811

 

 

16,433

 

 

4,025

 

Short-Term Borrowings

 

26

 

 

 

 

3

 

 

2

 

 

7

 

 

32

 

 

63

 

Other Borrowings

 

407

 

 

407

 

 

238

 

 

155

 

 

171

 

 

1,207

 

 

693

 

Total Interest Expense

 

5,769

 

 

5,157

 

 

4,083

 

 

2,661

 

 

1,989

 

 

17,672

 

 

4,781

 

Net Interest and Dividend Income

 

11,136

 

 

10,717

 

 

11,120

 

 

11,583

 

 

11,866

 

 

44,553

 

 

42,935

 

(Recovery) Provision for Credit Losses - Loans

 

(1,147

)

 

291

 

 

492

 

 

80

 

 

 

 

(284

)

 

3,784

 

(Recovery) Provision for Credit Losses - Unfunded Commitments

 

(273

)

 

115

 

 

(60

)

 

 

 

 

 

(218

)

 

 

Net Interest and Dividend Income After (Recovery) Provision for Credit Losses

 

12,556

 

 

10,311

 

 

10,688

 

 

11,503

 

 

11,866

 

 

45,055

 

 

39,151

 

Noninterest Income:

 

 

 

 

 

 

 

Service Fees

 

460

 

 

466

 

 

448

 

 

445

 

 

530

 

 

1,819

 

 

2,160

 

Insurance Commissions

 

969

 

 

1,436

 

 

1,511

 

 

1,922

 

 

1,399

 

 

5,839

 

 

5,934

 

Other Commissions

 

60

 

 

94

 

 

224

 

 

144

 

 

157

 

 

521

 

 

669

 

Net Gain (Loss) on Sales of Loans

 

2

 

 

 

 

(5

)

 

2

 

 

 

 

 

 

 

Net (Loss) Gain on Securities

 

(9,830

)

 

(37

)

 

(100

)

 

(232

)

 

83

 

 

(10,199

)

 

(168

)

Net Gain on Purchased Tax Credits

 

7

 

 

7

 

 

7

 

 

7

 

 

14

 

 

29

 

 

57

 

Gain on Sale of Subsidiary

 

24,578

 

 

 

 

 

 

 

 

 

 

24,578

 

 

 

Net Gain on Disposal of Fixed Assets

 

 

 

 

 

 

 

11

 

 

 

 

11

 

 

431

 

Income from Bank-Owned Life Insurance

 

151

 

 

145

 

 

139

 

 

140

 

 

143

 

 

576

 

 

561

 

Net Gain on Bank-Owned Life Insurance Claims

 

 

 

 

 

1

 

 

302

 

 

 

 

303

 

 

 

Other Income

 

121

 

 

301

 

 

44

 

 

69

 

 

34

 

 

535

 

 

176

 

Total Noninterest Income

 

16,518

 

 

2,412

 

 

2,269

 

 

2,810

 

 

2,360

 

 

24,012

 

 

9,820

 

Noninterest Expense:

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

6,224

 

 

5,369

 

 

5,231

 

 

5,079

 

 

4,625

 

 

21,903

 

 

18,469

 

Occupancy

 

810

 

 

698

 

 

789

 

 

701

 

 

817

 

 

2,998

 

 

3,047

 

Equipment

 

298

 

 

265

 

 

283

 

 

218

 

 

178

 

 

1,064

 

 

739

 

Data Processing

 

726

 

 

714

 

 

718

 

 

857

 

 

681

 

 

3,014

 

 

2,152

 

FDIC Assessment

 

189

 

 

189

 

 

224

 

 

152

 

 

154

 

 

754

 

 

638

 

PA Shares Tax

 

217

 

 

217

 

 

195

 

 

260

 

 

258

 

 

889

 

 

979

 

Contracted Services

 

299

 

 

286

 

 

434

 

 

147

 

 

405

 

 

1,166

 

 

1,628

 

Legal and Professional Fees

 

434

 

 

320

 

 

246

 

 

182

 

 

362

 

 

1,182

 

 

1,237

 

Advertising

 

158

 

 

114

 

 

75

 

 

79

 

 

165

 

 

426

 

 

527

 

Other Real Estate Owned (Income)

 

(36

)

 

(8

)

 

(35

)

 

(37

)

 

(38

)

 

(115

)

 

(151

)

Amortization of Intangible Assets

 

430

 

 

445

 

 

446

 

 

445

 

 

446

 

 

1,766

 

 

1,782

 

Other

 

1,016

 

 

878

 

 

895

 

 

945

 

 

945

 

 

3,735

 

 

3,844

 

Total Noninterest Expense

 

10,765

 

 

9,487

 

 

9,501

 

 

9,028

 

 

8,998

 

 

38,782

 

 

34,891

 

Income Before Income Tax Expense

 

18,309

 

 

3,236

 

 

3,456

 

 

5,285

 

 

5,228

 

 

30,285

 

 

14,080

 

Income Tax Expense

 

5,343

 

 

564

 

 

699

 

 

1,129

 

 

1,076

 

 

7,735

 

 

2,833

 

Net Income

$

12,966

 

$

2,672

 

$

2,757

 

$

4,156

 

$

4,152

 

$

22,550

 

$

11,247

 

 

Three Months Ended

Year Ended

Per Common Share Data

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

12/31/23

12/31/22

Dividends Per Common Share

$

0.25

$

0.25

$

0.25

$

0.25

$

0.24

$

1.00

$

0.96

Earnings Per Common Share - Basic

 

2.53

 

0.52

 

0.54

 

0.81

 

0.81

 

4.41

 

2.19

Earnings Per Common Share - Diluted

 

2.52

 

0.52

 

0.54

 

0.81

 

0.81

 

4.40

 

2.18

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding - Basic

 

5,119,184

 

5,115,026

 

5,111,987

 

5,109,597

 

5,095,237

 

5,113,978

 

5,136,670

Weighted Average Common Shares Outstanding - Diluted

 

5,135,997

 

5,126,546

 

5,116,134

 

5,115,705

 

5,104,254

 

5,122,916

 

5,149,312

 

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

Common Shares Outstanding

 

5,119,543

 

 

5,120,678

 

 

5,111,678

 

 

5,116,830

 

 

5,100,189

 

Book Value Per Common Share

$

27.31

 

$

22.43

 

$

22.81

 

$

22.90

 

$

21.60

 

Tangible Book Value per Common Share (1)

 

25.23

 

 

20.10

 

 

20.39

 

 

20.40

 

 

19.00

 

Stockholders’ Equity to Assets

 

9.6

%

 

8.2

%

 

8.1

%

 

8.2

%

 

7.8

%

Tangible Common Equity to Tangible Assets (1)

 

8.9

 

 

7.4

 

 

7.3

 

 

7.4

 

 

6.9

 

 

Three Months Ended

Year Ended

Selected Financial Ratios (2)

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

12/31/23

12/31/22

Return on Average Assets

3.62

%

0.75

%

0.79

%

1.21

%

1.16

%

1.60

%

0.80

%

Return on Average Equity

44.99

 

9.03

 

9.38

 

14.69

 

15.26

 

19.42

 

9.56

 

Average Interest-Earning Assets to Average Interest-Bearing Liabilities

138.74

 

139.65

 

142.28

 

147.38

 

148.93

 

141.87

 

148.06

 

Average Equity to Average Assets

8.04

 

8.32

 

8.38

 

8.27

 

7.63

 

8.25

 

8.36

 

Net Interest Rate Spread

2.56

 

2.54

 

2.78

 

3.13

 

3.18

 

2.73

 

3.07

 

Net Interest Rate Spread (FTE) (1)

2.57

 

2.55

 

2.79

 

3.14

 

3.19

 

2.74

 

3.08

 

Net Interest Margin

3.19

 

3.13

 

3.29

 

3.51

 

3.46

 

3.28

 

3.24

 

Net Interest Margin (FTE) (1)

3.21

 

3.14

 

3.30

 

3.52

 

3.47

 

3.29

 

3.25

 

Net Charge-Offs (Recoveries) to Average Loans

 

0.04

 

0.04

 

(0.29

)

0.01

 

(0.05

)

0.25

 

Efficiency Ratio

38.93

 

72.26

 

70.96

 

62.72

 

63.25

 

56.56

 

66.14

 

Asset Quality Ratios

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

Allowance for Credit Losses to Total Loans

0.87

%

0.98

%

0.97

%

0.96

%

1.22

%

Allowance for Credit Losses to Nonperforming Loans (3)

433.35

 

330.13

 

260.46

 

189.73

 

221.06

 

Allowance for Credit Losses to Noncurrent Loans (4)

433.35

 

330.13

 

260.46

 

189.73

 

320.64

 

Delinquent and Nonaccrual Loans to Total Loans (4) (5)

0.62

 

0.73

 

0.68

 

1.02

 

0.81

 

Nonperforming Loans to Total Loans (3)

0.20

 

0.30

 

0.37

 

0.51

 

0.55

 

Noncurrent Loans to Total Loans (4)

0.20

 

0.30

 

0.37

 

0.51

 

0.38

 

Nonperforming Assets to Total Assets (6)

0.16

 

0.23

 

0.30

 

0.40

 

0.41

 

Capital Ratios (7)

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

Common Equity Tier 1 Capital (to Risk Weighted Assets)

13.64

%

12.77

%

12.54

%

12.60

%

12.33

%

Tier 1 Capital (to Risk Weighted Assets)

13.64

 

12.77

 

12.54

 

12.60

 

12.33

 

Total Capital (to Risk Weighted Assets)

14.61

 

13.90

 

13.64

 

13.69

 

13.58

 

Tier 1 Leverage (to Adjusted Total Assets)

10.19

 

9.37

 

9.26

 

9.24

 

8.66

 

(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)

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

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

 

March 31, 2023

 

December 31, 2022

 

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)

$

1,098,284

$

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

%

 

$

1,034,714

$

11,853

4.54

%

Debt Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

206,702

 

1,164

2.25

 

 

 

204,848

 

940

1.84

 

 

 

209,292

 

950

1.82

 

 

 

213,158

 

964

1.81

 

 

 

216,915

 

974

1.80

 

Exempt From Federal Tax

 

4,833

 

42

3.48

 

 

 

6,013

 

52

3.46

 

 

 

6,180

 

53

3.43

 

 

 

6,270

 

52

3.32

 

 

 

6,277

 

51

3.25

 

Equity Securities

 

2,693

 

32

4.75

 

 

 

2,693

 

25

3.71

 

 

 

2,693

 

25

3.71

 

 

 

2,693

 

24

3.56

 

 

 

2,693

 

28

4.16

 

Interest-Earning Deposits at Banks

 

68,164

 

808

4.74

 

 

 

52,466

 

750

5.72

 

 

 

53,582

 

721

5.38

 

 

 

73,221

 

805

4.40

 

 

 

98,110

 

939

3.83

 

Other Interest-Earning Assets

 

3,387

 

64

7.50

 

 

 

3,292

 

69

8.32

 

 

 

2,783

 

39

5.62

 

 

 

2,633

 

39

6.01

 

 

 

2,875

 

39

5.38

 

Total Interest-Earning Assets

 

1,384,063

 

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

 

 

 

1,361,584

 

13,884

4.05

 

Noninterest-Earning Assets

 

37,750

 

 

 

 

52,885

 

 

 

 

52,812

 

 

 

 

49,703

 

 

 

 

52,716

 

 

Total Assets

$

1,421,813

 

 

 

$

1,410,888

 

 

 

$

1,406,741

 

 

 

$

1,388,248

 

 

 

$

1,414,300

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Demand Accounts

$

362,018

$

1,965

2.15

%

 

$

363,997

$

2,003

2.18

%

 

$

354,497

$

1,582

1.79

%

 

$

335,327

$

1,191

1.44

%

 

$

315,352

$

810

1.02

%

Savings Accounts

 

200,737

 

57

0.11

 

 

 

212,909

 

54

0.10

 

 

 

225,175

 

53

0.09

 

 

 

242,298

 

37

0.06

 

 

 

249,948

 

29

0.05

 

Money Market Accounts

 

205,060

 

1,441

2.79

 

 

 

187,012

 

1,141

2.42

 

 

 

194,565

 

1,033

2.13

 

 

 

213,443

 

939

1.78

 

 

 

206,192

 

604

1.16

 

Time Deposits

 

193,188

 

1,873

3.85

 

 

 

173,832

 

1,552

3.54

 

 

 

155,867

 

1,174

3.02

 

 

 

101,147

 

337

1.35

 

 

 

116,172

 

368

1.26

 

Total Interest-Bearing Deposits

 

961,003

 

5,336

2.20

 

 

 

937,750

 

4,750

2.01

 

 

 

930,104

 

3,842

1.66

 

 

 

892,215

 

2,504

1.14

 

 

 

887,664

 

1,811

0.81

 

Short-Term Borrowings

 

1,902

 

26

5.42

 

 

 

 

 

 

 

480

 

3

2.51

 

 

 

1,344

 

2

0.60

 

 

 

8,985

 

7

0.31

 

Other Borrowings

 

34,673

 

407

4.66

 

 

 

34,662

 

407

4.66

 

 

 

21,026

 

238

4.54

 

 

 

14,641

 

155

4.29

 

 

 

17,598

 

171

3.86

 

Total Interest-Bearing Liabilities

 

997,578

 

5,769

2.29

 

 

 

972,412

 

5,157

2.10

 

 

 

951,610

 

4,083

1.72

 

 

 

908,200

 

2,661

1.19

 

 

 

914,247

 

1,989

0.86

 

Noninterest-Bearing Demand Deposits

 

305,789

 

 

 

 

312,016

 

 

 

 

326,262

 

 

 

 

362,343

 

 

 

 

391,300

 

 

Total Funding and Cost of Funds

 

1,303,367

 

1.76

 

 

 

1,284,428

 

1.59

 

 

 

1,277,872

 

1.28

 

 

 

1,270,543

 

0.85

 

 

 

1,305,547

 

0.60

 

Other Liabilities

 

4,119

 

 

 

 

9,025

 

 

 

 

10,920

 

 

 

 

2,953

 

 

 

 

788

 

 

Total Liabilities

 

1,307,486

 

 

 

 

1,293,453

 

 

 

 

1,288,792

 

 

 

 

1,273,496

 

 

 

 

1,306,335

 

 

Stockholders' Equity

 

114,327

 

 

 

 

117,435

 

 

 

 

117,949

 

 

 

 

114,752

 

 

 

 

107,965

 

 

Total Liabilities and Stockholders' Equity

$

1,421,813

 

 

 

$

1,410,888

 

 

 

$

1,406,741

 

 

 

$

1,388,248

 

 

 

$

1,414,300

 

 

Net Interest Income (FTE)

(Non-GAAP) (3)

 

$

11,181

 

 

 

$

10,760

 

 

 

$

11,155

 

 

 

$

11,614

 

 

 

$

11,895

 

Net Interest-Earning Assets (4)

 

386,485

 

 

 

 

385,591

 

 

 

 

402,319

 

 

 

 

430,345

 

 

 

 

447,337

 

 

Net Interest Rate Spread (FTE)

(Non-GAAP) (3) (5)

 

 

2.57

%

 

 

 

2.55

%

 

 

 

2.79

%

 

 

 

3.14

%

 

 

 

3.19

%

Net Interest Margin (FTE)

(Non-GAAP) (3)(6)

 

 

3.21

 

 

 

 

3.14

 

 

 

 

3.30

 

 

 

 

3.52

 

 

 

 

3.47

 

(1)

Annualized based on three months ended results.

(2)

Net of the allowance for credit losses and includes nonaccrual loans with a zero yield.

(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.

AVERAGE BALANCES AND YIELDS

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

December 31, 2023

 

December 31, 2022

 

Average

Balance

 

Interest

and

Dividends

 

Yield /

Cost

 

Average

Balance

 

Interest

and

Dividends

 

Yield /

Cost

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Interest-Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

Loans, Net (1)

$

1,076,928

 

$

54,763

 

5.09

%

 

$

1,019,124

 

$

42,010

 

4.12

%

Debt Securities

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

208,472

 

 

4,017

 

1.93

 

 

 

220,818

 

 

3,852

 

1.74

 

Exempt From Federal Tax

 

5,821

 

 

199

 

3.42

 

 

 

8,383

 

 

270

 

3.22

 

Marketable Equity Securities

 

2,693

 

 

106

 

3.94

 

 

 

2,693

 

 

91

 

3.38

 

Interest-Earning Deposits at Banks

 

61,818

 

 

3,084

 

4.99

 

 

 

71,283

 

 

1,473

 

2.07

 

Other Interest-Earning Assets

 

3,027

 

 

211

 

6.97

 

 

 

3,092

 

 

154

 

4.98

 

Total Interest-Earning Assets

 

1,358,759

 

 

62,380

 

4.59

 

 

 

1,325,393

 

 

47,850

 

3.61

 

Noninterest-Earning Assets

 

48,268

 

 

 

 

 

 

81,035

 

 

 

 

Total Assets

$

1,407,027

 

 

 

 

 

$

1,406,428

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity:

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Demand Accounts

$

354,060

 

$

6,741

 

1.90

%

 

$

282,850

 

$

1,362

 

0.48

%

Savings Accounts

 

220,146

 

 

202

 

0.09

 

 

 

248,334

 

 

88

 

0.04

 

Money Market Accounts

 

199,962

 

 

4,554

 

2.28

 

 

 

194,223

 

 

976

 

0.50

 

Time Deposits

 

156,310

 

 

4,936

 

3.16

 

 

 

124,817

 

 

1,599

 

1.28

 

Total Interest-Bearing Deposits

 

930,478

 

 

16,433

 

1.77

 

 

 

850,224

 

 

4,025

 

0.47

 

Short-Term Borrowings

 

931

 

 

32

 

3.44

 

 

 

27,360

 

 

63

 

0.23

 

Other Borrowings

 

26,328

 

 

1,207

 

4.58

 

 

 

17,609

 

 

693

 

3.94

 

Total Interest-Bearing Liabilities

 

957,737

 

 

17,672

 

1.85

 

 

 

895,193

 

 

4,781

 

0.53

 

Noninterest-Bearing Demand Deposits

 

326,408

 

 

 

 

 

 

389,553

 

 

 

 

Total Funding and Cost of Funds

 

1,284,145

 

 

 

1.38

 

 

 

1,284,746

 

 

 

0.37

 

Other Liabilities

 

6,764

 

 

 

 

 

 

4,072

 

 

 

 

Total Liabilities

 

1,290,909

 

 

 

 

 

 

1,288,818

 

 

 

 

Stockholders' Equity

 

116,118

 

 

 

 

 

 

117,610

 

 

 

 

Total Liabilities and Stockholders' Equity

$

1,407,027

 

 

 

 

 

$

1,406,428

 

 

 

 

Net Interest Income (FTE) (Non-GAAP) (2)

 

 

 

44,708

 

 

 

 

 

 

43,069

 

 

Net Interest-Earning Assets (3)

 

401,022

 

 

 

 

 

 

430,200

 

 

 

 

Net Interest Rate Spread (FTE) (Non-GAAP) (2)(4)

 

 

 

 

2.74

%

 

 

 

 

 

3.08

%

Net Interest Margin (FTE) (Non-GAAP) (2)(5)

 

 

 

 

3.29

 

 

 

 

 

 

3.25

 

(1)

Net of the allowance for credit losses and includes nonaccrual loans with a zero yield.

(2)

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.

(3)

Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4)

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.

(5)

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.

 

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

(Dollars in thousands, except share and per share data) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Total Assets (GAAP)

$

1,456,091

 

$

1,399,492

 

$

1,432,733

 

$

1,430,708

 

$

1,408,938

 

Goodwill and Intangible Assets, Net

 

(10,690

)

 

(11,909

)

 

(12,354

)

 

(12,800

)

 

(13,245

)

Tangible Assets (Non-GAAP) (Numerator)

$

1,445,401

 

$

1,387,583

 

$

1,420,379

 

$

1,417,908

 

$

1,395,693

 

 

 

 

 

 

 

Stockholders' Equity (GAAP)

$

139,834

 

$

114,846

 

$

116,589

 

$

117,195

 

$

110,155

 

Goodwill and Intangible Assets, Net

 

(10,690

)

 

(11,909

)

 

(12,354

)

 

(12,800

)

 

(13,245

)

Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator)

$

129,144

 

$

102,937

 

$

104,235

 

$

104,395

 

$

96,910

 

 

 

 

 

 

 

Stockholders’ Equity to Assets (GAAP)

 

9.6

%

 

8.2

%

 

8.1

%

 

8.2

%

 

7.8

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

 

8.9

%

 

7.4

%

 

7.3

%

 

7.4

%

 

6.9

%

 

 

 

 

 

 

Common Shares Outstanding (Denominator)

 

5,119,543

 

 

5,120,678

 

 

5,111,678

 

 

5,116,830

 

 

5,100,189

 

 

 

 

 

 

 

Book Value per Common Share (GAAP)

$

27.31

 

$

22.43

 

$

22.81

 

$

22.90

 

$

21.60

 

Tangible Book Value per Common Share (Non-GAAP)

$

25.23

 

$

20.10

 

$

20.39

 

$

20.40

 

$

19.00

 

 

Three Months Ended

Year Ended

 

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

12/31/23

12/31/22

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (GAAP)

$

12,966

 

$

2,672

 

$

2,757

 

$

4,156

 

$

4,152

 

$

22,550

 

$

11,247

 

Amortization of Intangible Assets, Net

 

430

 

 

445

 

 

446

 

 

445

 

 

446

 

 

1,766

 

 

1,782

 

Adjusted Net Income (Non-GAAP) (Numerator)

$

13,396

 

$

3,117

 

$

3,203

 

$

4,601

 

$

4,598

 

$

24,316

 

$

13,029

 

 

 

 

 

 

 

 

 

Annualization Factor

 

3.97

 

 

3.97

 

 

4.01

 

 

4.06

 

 

3.97

 

 

1.00

 

 

1.00

 

 

 

 

 

 

 

 

 

Average Stockholders' Equity (GAAP)

$

114,327

 

$

117,435

 

$

117,949

 

$

114,752

 

$

107,965

 

$

116,118

 

$

117,610

 

Average Goodwill and Intangible Assets, Net

 

(11,829

)

 

(12,185

)

 

(12,626

)

 

(13,080

)

 

(13,534

)

 

(12,426

)

 

(14,193

)

Average Tangible Common Equity (Non-GAAP) (Denominator)

$

102,498

 

$

105,250

 

$

105,323

 

$

101,672

 

$

94,431

 

$

103,692

 

$

103,417

 

 

 

 

 

 

 

 

 

Return on Average Equity (GAAP)

 

44.99

%

 

9.03

%

 

9.38

%

 

14.69

%

 

15.26

%

 

19.42

%

 

9.56

%

Return on Average Tangible Common Equity (Non-GAAP)

 

51.85

%

 

11.75

%

 

12.20

%

 

18.35

%

 

19.32

%

 

23.45

%

 

12.60

%

 

Three Months Ended

Year Ended

 

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

12/31/23

12/31/22

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income (GAAP)

$

16,905

 

$

15,874

 

$

15,203

 

$

14,244

 

$

13,855

 

$

62,225

 

$

47,716

 

Adjustment to FTE Basis

 

45

 

 

43

 

 

35

 

 

31

 

 

29

 

 

155

 

 

134

 

Interest Income (FTE) (Non-GAAP)

 

16,950

 

 

15,917

 

 

15,238

 

 

14,275

 

 

13,884

 

 

62,380

 

 

47,850

 

Interest Expense (GAAP)

 

5,769

 

 

5,157

 

 

4,083

 

 

2,661

 

 

1,989

 

 

17,672

 

 

4,781

 

Net Interest Income (FTE) (Non-GAAP)

$

11,181

 

$

10,760

 

$

11,155

 

$

11,614

 

$

11,895

 

$

44,708

 

$

43,069

 

 

 

 

 

 

 

 

 

Net Interest Rate Spread (GAAP)

 

2.56

%

 

2.54

%

 

2.78

%

 

3.13

%

 

3.18

%

 

2.73

%

 

3.07

%

Adjustment to FTE Basis

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

Net Interest Rate Spread (FTE) (Non-GAAP)

 

2.57

%

 

2.55

%

 

2.79

%

 

3.14

%

 

3.19

%

 

2.74

%

 

3.08

%

 

 

 

 

 

 

 

 

Net Interest Margin (GAAP)

 

3.19

%

 

3.13

%

 

3.29

%

 

3.51

%

 

3.46

%

 

3.28

%

 

3.24

%

Adjustment to FTE Basis

 

0.02

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

Net Interest Margin (FTE) (Non-GAAP)

 

3.21

%

 

3.14

%

 

3.30

%

 

3.52

%

 

3.47

%

 

3.29

%

 

3.25

%

 

Three Months Ended

Year Ended

 

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

12/31/23

12/31/22

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Before Income Tax Expense (GAAP)

$

18,309

 

$

3,236

 

$

3,456

 

$

5,285

 

$

5,228

 

$

30,285

 

$

14,080

 

(Recovery) Provision for Credit Losses

 

(1,420

)

 

406

 

 

432

 

 

80

 

 

 

 

(502

)

 

3,784

 

Adjustments

 

 

 

 

 

 

 

Loss (Gain) on Securities

 

9,830

 

 

37

 

 

100

 

 

232

 

 

(83

)

 

10,199

 

 

168

 

Gain on Sale of Subsidiary

 

(24,578

)

 

 

 

 

 

 

 

 

 

(24,578

)

 

 

Adjusted PPNR (Non-GAAP) (Numerator)

$

2,141

 

$

3,679

 

$

3,988

 

$

5,597

 

$

5,145

 

$

15,404

 

$

18,032

 

 

 

 

 

 

 

 

 

Annualization Factor

 

3.97

 

 

3.97

 

 

4.01

 

 

4.06

 

 

3.97

 

 

1.00

 

 

1.00

 

 

 

 

 

 

 

 

 

Average Assets (Denominator)

$

1,421,813

 

$

1,410,888

 

$

1,406,741

 

$

1,388,248

 

$

1,414,300

 

$

1,407,027

 

$

1,406,428

 

 

 

 

 

 

 

 

 

Adjusted PPNR Return on Average Assets (Non-GAAP)

 

0.60

%

 

1.04

%

 

1.14

%

 

1.64

%

 

1.44

%

 

1.09

%

 

1.28

%

 

Three Months Ended

Year Ended

 

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

12/31/23

12/31/22

(Dollars in thousands, except share and per share data) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (GAAP)

$

12,966

 

$

2,672

 

$

2,757

 

$

4,156

 

$

4,152

 

$

22,550

 

$

11,247

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Loss (Gain) on Securities

 

9,830

 

 

37

 

 

100

 

 

232

 

 

(83

)

 

10,199

 

 

168

 

Gain on Sale of Subsidiary

 

(24,578

)

 

 

 

 

 

 

 

 

 

(24,578

)

 

 

Gain on Disposal of Fixed Assets

 

 

 

 

 

 

 

(11

)

 

 

 

(11

)

 

(431

)

Gain on Bank-Owned Life Insurance Claims

 

 

 

 

 

(1

)

 

(302

)

 

 

 

(303

)

 

 

Tax effect

 

4,843

 

 

(8

)

 

(21

)

 

(46

)

 

17

 

 

4,767

 

 

55

 

Adjusted Net Income (Non-GAAP)

$

3,061

 

$

2,701

 

$

2,835

 

$

4,029

 

$

4,086

 

$

12,624

 

$

11,039

 

 

 

 

 

 

 

 

 

Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding

 

5,135,997

 

 

5,126,546

 

 

5,116,134

 

 

5,115,705

 

 

5,104,254

 

 

5,122,916

 

 

5,149,312

 

 

 

 

 

 

 

 

 

Earnings per Common Share - Diluted (GAAP)

$

2.52

 

$

0.52

 

$

0.54

 

$

0.81

 

$

0.81

 

$

4.40

 

$

2.18

 

 

 

 

 

 

 

 

 

Adjusted Earnings per Common Share - Diluted (Non-GAAP)

$

0.60

 

$

0.53

 

$

0.55

 

$

0.79

 

$

0.80

 

$

2.47

 

$

2.15

 

 

 

 

 

 

 

 

 

Net Income (GAAP) (Numerator)

$

12,966

 

$

2,672

 

$

2,757

 

$

4,156

 

$

4,152

 

$

22,550

 

$

11,247

 

 

 

 

 

 

 

 

 

Annualization Factor

 

3.97

 

 

3.97

 

 

4.01

 

 

4.06

 

 

3.97

 

 

1.00

 

 

1.00

 

 

 

 

 

 

 

 

 

Average Assets (Denominator)

 

1,421,813

 

 

1,410,888

 

 

1,406,741

 

 

1,388,248

 

 

1,414,300

 

 

1,407,027

 

 

1,406,428

 

 

 

 

 

 

 

 

 

Return on Average Assets (GAAP)

 

3.62

%

 

0.75

%

 

0.79

%

 

1.21

%

 

1.16

%

 

1.60

%

 

0.80

%

 

 

 

 

 

 

 

 

Adjusted Net Income (Non-GAAP) (Numerator)

$

3,061

 

$

2,701

 

$

2,835

 

$

4,029

 

$

4,086

 

$

12,624

 

$

11,039

 

 

 

 

 

 

 

 

 

Annualization Factor

 

3.97

 

 

3.97

 

 

4.01

 

 

4.06

 

 

3.97

 

 

1.00

 

 

1.00

 

 

 

 

 

 

 

 

 

Average Assets (Denominator)

 

1,421,813

 

 

1,410,888

 

 

1,406,741

 

 

1,388,248

 

 

1,414,300

 

 

1,407,027

 

 

1,406,428

 

 

 

 

 

 

 

 

 

Adjusted Return on Average Assets (Non-GAAP)

 

0.85

%

 

0.76

%

 

0.81

%

 

1.18

%

 

1.15

%

 

0.90

%

 

0.78

%

 

Three Months Ended

Year Ended

 

12/31/23

9/30/23

6/30/23

3/31/23

12/31/22

12/31/23

12/31/22

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (GAAP) (Numerator)

$

12,966

 

$

2,672

 

$

2,757

 

$

4,156

 

$

4,152

 

$

22,550

 

$

11,247

 

 

 

 

 

 

 

 

 

Annualization Factor

 

3.97

 

 

3.97

 

 

4.01

 

 

4.06

 

 

3.97

 

 

1.00

 

 

1.00

 

 

 

 

 

 

 

 

 

Average Equity (GAAP) (Denominator)

 

114,327

 

 

117,435

 

 

117,949

 

 

114,752

 

 

107,965

 

 

116,118

 

 

117,610

 

 

 

 

 

 

 

 

 

Return on Average Equity (GAAP)

 

44.99

%

 

9.03

%

 

9.38

%

 

14.69

%

 

15.26

%

 

19.42

%

 

9.56

%

 

 

 

 

 

 

 

 

Adjusted Net Income (Non-GAAP) (Numerator)

$

3,061

 

$

2,701

 

$

2,835

 

$

4,029

 

$

4,086

 

$

12,624

 

$

11,039

 

 

 

 

 

 

 

 

 

Annualization Factor

 

3.97

 

 

3.97

 

 

4.01

 

 

4.06

 

 

3.97

 

 

1.00

 

 

1.00

 

 

 

 

 

 

 

 

 

Average Equity (GAAP) (Denominator)

 

114,327

 

 

117,435

 

 

117,949

 

 

114,752

 

 

107,965

 

 

116,118

 

 

117,610

 

 

 

 

 

 

 

 

 

Adjusted Return on Average Equity (Non-GAAP)

 

10.62

%

 

9.12

%

 

9.64

%

 

14.24

%

 

15.01

%

 

10.87

%

 

9.39

%

 

Contacts

John H. Montgomery

President and Chief Executive Officer

Phone: (724) 225-2400

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