CB Financial Services, Inc. Announces Second Quarter and Year-to-Date 2022 Financial Results and Declares Quarterly Cash Dividend

WASHINGTON, Pa--()--CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”) and Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of the Bank, today announced its second quarter and year-to-date 2022 financial results.

 

 

Three Months Ended

 

Six Months Ended

 

 

6/30/22

 

3/31/22

 

12/31/21

 

9/30/21

 

6/30/21

 

6/30/22

 

6/30/21

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) (GAAP)

 

$

 

118

 

$

 

3,047

 

$

 

6,965

 

 

 

$

 

1,983

 

 

 

$

 

(223

)  

$

 

3,165

 

$

 

2,622

Non-Recurring Items

 

 

 

157

 

 

 

12

 

 

 

(4,122

)  

 

 

(17

)  

 

 

3,440

 

 

 

 

 

169

 

 

 

3,087

Adjusted Net Income (Non-GAAP) (1)

 

$

 

275

 

$

 

3,059

 

$

 

2,843

 

 

 

$

 

1,966

 

 

 

$

 

3,217

 

 

 

$

 

3,334

 

$

 

5,709

Earnings (Loss) per Common Share - Diluted (GAAP)

 

$

 

0.02

 

$

 

0.58

 

$

 

1.31

 

 

 

$

 

0.37

 

 

 

$

 

(0.04

)  

$

 

0.61

 

$

 

0.48

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

 

$

 

0.05

 

$

 

0.59

 

$

 

0.53

 

 

 

$

 

0.36

 

 

 

$

 

0.59

 

 

 

$

 

0.64

 

$

 

1.05

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

2022 Second Quarter Financial Highlights

(Comparisons to three months ended June 30, 2021 unless otherwise noted)

  • Net income was $118,000, compared to a net loss of $223,000. Current period results were negatively impacted by provision expense of approximately $3.8 million driven, largely, by a loan charge-off of $2.7 million while the prior year period included an intangible asset impairment and asset write down of $3.4 million, associated with the Company’s optimization program. Current period results were aided by the completion of the Company’s optimization program in 2021, which resulted in a reduction of noninterest expense of $1.9 million for the three months ended June 30, 2022 compared to the three months ended June 30, 2021 (excluding noninterest expense of $3.4 million related to intangible impairment and fixed asset write-down).
    • Adjusted net income (non-GAAP) was $275,000, compared to $3.2 million.
  • Earnings per diluted common share (EPS) increased to $0.02 from loss per diluted common share of $0.04.
    • Adjusted earnings per common share - diluted (non-GAAP) was $0.05, compared to $0.59.
  • Return on average assets (annualized) of 0.03%, compared to loss on average assets (annualized) of 0.06%.
    • Adjusted return on average assets (annualized) (non-GAAP) of 0.08%, compared to 0.87%.
  • Return on average equity (annualized) of 0.40%, compared to loss on average equity (annualized) of 0.66%.
    • Adjusted return on average equity (annualized) (non-GAAP) of 0.93%, compared to 9.57%.
  • Net interest margin (NIM) improved to 3.12% from 2.84%.
  • Net interest and dividend income was $10.2 million, compared to $9.9 million.
  • Noninterest income decreased to $2.1 million, compared to $2.2 million. The most significant change in noninterest income was a $210,000 reduction in securities gains resulting from mark-to-market accounting, partially offset by an increase of $160,000 in insurance commissions. The increase in insurance commissions was primarily driven by contingency income which resulted from the higher than lock-in amounts received and core business including commercial and personal insurance lines.

(Amounts at June 30, 2022; comparisons to December 31, 2021, unless otherwise noted)

  • Total loans, including Payroll Protection Program (“PPP”) loans, were $1.03 billion, an increase of $7.2 million from $1.02 billion.
    • Total loans held for investment, excluding PPP loans, increased $27.8 million, or 5.6% annualized, to $1.02 billion compared to $996.3 million, and included increases of $26.8 million, or 44.2% annualized, in consumer loans, and $34.0 million, or 17.6% annualized, growth in commercial real estate loans, partially offset by decreases in construction real estate and commercial and industrial loans. Compared to June 30, 2021, loans held for investment, excluding PPP loans, increased $66.2 million, or 6.9%, primarily from increases of $65.6 million in commercial real estate loans and $42.5 million in consumer loans as noted above, partially offset by decreases of $43.9 million in construction real estate loans and $8.6 million in commercial and industrial loans.
  • Nonperforming loans to total loans was 0.57%, a decrease of 14 basis points (“bps”), compared to 0.71%.
  • Total deposits were $1.22 billion, a decrease of $11.4 million, compared to $1.23 billion.
  • Total assets decreased by $39 million to $1.39 billion, compared to $1.43 billion.
  • Book value per share was $22.18, compared to $23.69 as of March 31, 2022 and $25.31 as of December 31, 2021.
    • Tangible book value per share (Non-GAAP) decreased to $19.43, compared to $20.86 as of March 31, 2022 and $22.45 as of December 31, 2021, reflecting impact to Accumulated Other Comprehensive Income from unrealized losses on securities portfolios.

Management Commentary

President and CEO John H. Montgomery stated, “Despite the looming macroeconomic uncertainty, we are optimistic about our business for a number of reasons. Our core earnings, as measured by pre-tax, pre-provision income, are accelerating and that is due primarily to the steps we took in 2021 to optimize our operations, coupled with growth investments we have made this year. Continuing the trend we saw in the first quarter, second quarter results included further loan growth, led by consumer and commercial real estate loans, and a lower noninterest expense run rate. Underpinning our growth is a stable, low volatility metropolitan service area anchored by leading higher education institutions and major healthcare companies, in addition to a strong technology presence.”

Mr. Montgomery continued, “As we reported on June 6th, we incurred a $2.7 million charge-off associated with a loan to a long-time customer that unexpectedly decided to wind down their operations. Although the charge negatively impacted our results in the quarter, a subsequent examination of our entire credit portfolio confirmed our view that this was an isolated event. We also believe our senior leadership team, and our credit management team in particular, is a key asset, as they delivered outstanding performance during the recessionary period from 2008 to 2010. During that period, we did not need to take a government TARP loan and our total credit losses during the period were less than $5.0 million. That experience allows us to face the current economic headwinds with confidence that we can not only adeptly manage our credit risk but also continue to grow our core earnings. During the second quarter we furthered our commitment to CB shareholders as we announced a new $10.0 million share repurchase program, in addition to our regular quarterly dividend. We remain well-capitalized with the ability to support growth along with these shareholder-friendly actions.”

Dividend Information

The Company’s Board of Directors has declared a $0.24 quarterly cash dividend per outstanding share of common stock, payable on or about August 31, 2022, to stockholders of record as of the close of business on August 19, 2022.

Stock Repurchase Program

On April 21, 2022, CB announced a program to repurchase up to $10.0 million of the Company’s outstanding shares of common stock. Based on the Company’s closing stock price on July 26, 2022, the repurchase program, if fully completed, would encompass 428,082 shares, or approximately 8.3% of the shares currently outstanding.

2022 Second Quarter Financial Review

Net Interest and Dividend Income

Net interest and dividend income increased $229,000, or 2.3%, to $10.2 million for the three months ended June 30, 2022 compared to $9.9 million for the three months ended June 30, 2021.

  • Net interest margin (GAAP) increased to 3.12% for the three months ended June 30, 2022 compared to 2.84% for the three months ended June 30, 2021. Net interest margin (FTE) (Non-GAAP) increased 28 bps to 3.13% for the three months ended June 30, 2022 compared to 2.85% for the three months ended June 30, 2021.
  • Interest and dividend income increased $138,000, or 1.3%, to $11.0 million for the three months ended June 30, 2022 compared to $10.8 million for the three months ended June 30, 2021.
    • Interest income on loans decreased $203,000, or 2.0%, to $9.7 million for the three months ended June 30, 2022 compared to $9.9 million for the three months ended June 30, 2021. The average balance of loans decreased $9.0 million to $1.01 billion from $1.02 billion and the average yield decreased 5 bps to 3.88% compared to 3.93%. Interest and fee income on PPP loans was $144,000 for the three months ended June 30, 2022 and contributed 4 bps to loan yield, compared to $636,000 for the three months ended June 30, 2021, which contributed 3 bps to loan yield. The impact of the accretion of the credit mark on acquired loan portfolios was $75,000 for the three months ended June 30, 2022 compared to $153,000 for the three months ended June 30, 2021, or 3 bps in the current period compared to 6 bps in the prior period. 
    • Interest income on taxable investment securities increased $353,000, or 55.6%, to $988,000 for the three months ended June 30, 2022 compared to $635,000 for the three months ended June 30, 2021 driven by a $103.6 million increase in average balance partially offset by a 31 bps decrease in average yield.
  • Interest expense decreased $91,000, or 10.3%, to $795,000 for the three months ended June 30, 2022 compared to $886,000 for the three months ended June 30, 2021.
    • Interest expense on deposits decreased $223,000, or 27.0%, to $604,000 for the three months ended June 30, 2022 compared to $827,000 for the three months ended June 30, 2021. While average interest-earning deposit balances decreased $74.5 million, or 8%, from $900.1 million as of June 30, 2021 compared to $825.6 million as of June 30, 2022, controlling the deposit cost structure combined with non-renewal or repricing of higher-cost time deposit resulted in a 8 bps, or 21.7%, decrease in average cost compared to the three months ended June 30, 2021. In addition, the average balance of time deposits and the related average cost decreased $49.7 million and 24 bps, respectively. These decreases are partially offset by a 9 bps increase in interest-bearing demand deposit average cost as well as an increase in average other borrowings of $11.6 million or 193.5% to $17.6 million as of June 30, 2022 compared to $6.0 million as of June 30, 2021, which was driven by an increase in subordinated debt balance.

Provision for Loan Losses

There was $3.8 million provision for loan losses for the three months ended June 30, 2022 compared with a recovery of $1.2 million for the three months ended June 30, 2021. The increased provision for loan losses was primarily due to a provision for a single loan charge-off of $2.7 million (pre-tax) with respect to a commercial and industrial loan. As previously reported, the charge-off relates to a borrower which is ceasing operations and carried a $3.5 million revolving line of credit which had an outstanding balance of $2.7 million. The remaining increase to the provision was a result of adjustments made to historical loss factors and changes in qualitative factors in particular economic and industry conditions between the three months ended June 30, 2022 and three months ended June 30, 2021.

Noninterest income

Noninterest income decreased $114,000, or 5.1%, to $2.1 million for the three months ended June 30, 2022, compared to $2.2 million for the three months ended June 30, 2021. The decrease was largely due to a $210,000 reduction in securities gains due to a decline of $199,000 in the market value of equity securities, comprised mainly of bank stocks, partially offset by a $160,000 increase in insurance commissions. The increase in insurance commissions was primarily driven by contingency income which resulted from the higher than lock-in amounts received and core business including commercial and personal insurance lines. In addition, net gain on sale of loans decreased $31,000 as there were no loans sold during the three months ended June 30, 2022.

Noninterest Expense

Noninterest expense decreased $5.3 million, or 38.7%, to $8.4 million for the three months ended June 30, 2022 compared to $13.7 million for the three months ended June 30, 2021, and compared to $8.7 million for the three months ended March 31, 2022. The primary drivers were decreases of $2.3 million and $1.2 million related to the writedown of fixed assets and intangible impairment associated with branch consolidation and sale initiatives in 2021, respectively. In addition, salaries and benefits decreased $537,000 and occupancy decreased $248,000, primarily related to the reduction of footprint and related headcount resulting from the consolidation and sale of branches during 2021. Contracted services decreased $402,000 to $348,000 for the three months ended June 30, 2022 compared to $750,000 for the three months ended June 30, 2021. This was a result of branch optimization initiatives completed in the prior year.

Statement of Financial Condition Review

Assets

Total assets decreased $39.0 million, or 2.7%, to $1.39 billion at June 30, 2022, compared to $1.43 billion at December 31, 2021.

  • Cash and due from banks decreased $38.6 million, or 32.2%, to $81.1 million at June 30, 2022, compared to $119.7 million at December 31, 2021. The change is primarily due to a decrease in deposits as further described below in the Liabilities section.
  • Securities decreased $11.5 million, or 5.1%, to $213.5 million at June 30, 2022, compared to $225.0 million at December 31, 2021. Current period activity included $26.8 million of purchases, and $17.0 million of pay downs. The purchases were made to earn a higher yield on excess cash. In addition, there was a $21.0 million decrease in the market value of the debt securities portfolio, primarily due to the increase in market interest rates, and a $206,000 loss in market value in the equity securities portfolio, which is primarily comprised of bank stocks.

Payroll Protection Program (“PPP”) Update

  • PPP loans decreased $20.7 million to $3.9 million at June 30, 2022 compared to $24.5 million at December 31, 2021.
  • $144,000 of net PPP loan origination fees were unearned at June 30, 2022 compared to $678,000 at December 31, 2021. $130,000 of net PPP loan origination fees were earned in the three months ended June 30, 2022 compared to $404,000 for the three months ended March 31, 2022. 

Loans and Credit Quality

  • Total loans held for investment increased $7.2 million, or 0.70%, to $1.03 billion at June 30, 2022 compared to $1.02 billion at December 31, 2021. Excluding the net decline of $20.7 million in PPP loans in the current period, loans increased $27.8 million.
  • The allowance for loan losses was $12.8 million at June 30, 2022 and $11.6 million at December 31, 2021. As a result, the allowance for loan losses to total loans was 1.25% at June 30, 2022 compared to 1.13% at December 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.25% at June 30, 2022 compared to 1.16% at December 31, 2021. The change in the allowance for loan losses was primarily due to adjustments to historical loss factors and changes in qualitative factors in particular economic and industry conditions since December 31, 2021.
  • Net charge-offs for the three months ended June 30, 2022 were $2.5 million, or 1.01% of average loans on an annualized basis. Net recoveries for the three months ended June 30, 2021 were $19,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the six months ended June 30, 2022 were $2.5 million, or 0.50% of average loans on an annualized basis. Net charge-offs for the six months ended June 30, 2021 were $27,000, or 0.01% of average loans on an annualized basis.
  • Nonperforming loans, which includes nonaccrual loans, accruing loans past due 90 days or more, and accruing loans that are considered troubled debt restructurings, were $5.8 million at June 30, 2022 compared to $7.3 million at December 31, 2021. Nonperforming loans to total loans ratio was 0.57% at June 30, 2022 compared to 0.71% at December 31, 2021.

Other

  • Intangible Assets decreased $891,000, or 17.0%, to $4.4 million at June 30, 2022 compared to $5.3 million at December 31, 2021 primarily due to amortization expense recognized during the period.
  • Accrued interest receivable and other assets increased $5.9 million, or 45.9%; to $18.8 million at June 30, 2022, compared to $12.9 million at December 31, 2021. This change was primarily driven by deferred taxes as a result of the increase in market interest rates conditions and the decrease in the market value of the securities portfolio.

Liabilities

Total liabilities decreased $19.7 million, or 1.5%, to $1.27 billion at June 30, 2022 compared to $1.29 billion at December 31, 2021.

Deposits

  • Total deposits decreased $11.4 million to $1.22 billion as of June 30, 2022 compared to $1.23 billion at December 31, 2021, an annualized decrease of 1.9%. Interest-bearing demand deposits and time deposits decreased $7.2 million and $11.5 million, respectively, partially offset by increases in noninterest bearing demand deposits and savings accounts by $3.4 million and $10.7 million, respectively. Average total deposits decreased $11.4 million, primarily in interest-bearing demand deposits and time deposits for the three months ended June 30, 2022 compared to the three months ended March 31, 2022,

Borrowed Funds

  • Short-term borrowings decreased $7.1 million, or 18.1%, to $32.2 million at June 30, 2022, compared to $39.3 million at December 31, 2021. At June 30, 2022 and December 31, 2021, short-term borrowings were comprised entirely of securities sold under agreements to repurchase, which are related to business deposit customers whose funds, above designated target balances, are transferred into an overnight interest-earning investment account by purchasing securities from the Bank’s investment portfolio under an agreement to repurchase.

Stockholders’ Equity

Stockholders’ equity decreased $19.4 million, or 14.6%, to $113.8 million at June 30, 2022, compared to $133.1 million at December 31, 2021. Since December 31, 2021, the Company has paid $2.5 million in dividends. On February 15, 2022, the Company completed its stock repurchase program that was implemented on June 10, 2021. On April 21, 2022, a new $10 million repurchase program was authorized, with the Company repurchasing 27,439 shares at an average price of $22.06 per share during the second quarter. In total, the Company has repurchased $4.0 million since December 31, 2021. In addition, accumulated other comprehensive loss decreased $16.5 million primarily due to the effect of rising market interest rates on the Bank’s debt securities. This was partially offset by $3.2 million of net income.

Book value per share

Book value per common share was $22.18 at June 30, 2022 compared to $25.31 at December 31, 2021, a decrease of $3.13.

Tangible book value per common share (Non-GAAP) was $19.43 at June 30, 2022, compared to $22.45 at December 31, 2021, a decrease of $3.02.

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

About CB Financial Services, Inc.

CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers a broad array of retail and commercial lending and deposit services and provides commercial and personal insurance brokerage services through Exchange Underwriters, Inc., its wholly owned subsidiary.

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

Statement About Forward-Looking Statements

Statements contained in this press release that are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and such forward-looking statements are subject to significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions contained in the Act. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries include, but are not limited to, general and local economic conditions, the scope and duration of economic contraction as a result of the COVID-19 pandemic and its effects on the Company’s business and that of the Company’s customers, changes in market interest rates, deposit flows, demand for loans, real estate values and competition, competitive products and pricing, the ability of our customers to make scheduled loan payments, loan delinquency rates and trends, our ability to manage the risks involved in our business, our ability to control costs and expenses, inflation, market and monetary fluctuations, changes in federal and state legislation and regulation applicable to our business, actions by our competitors, and other factors that may be disclosed in the Company’s periodic reports as filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.

CB FINANCIAL SERVICES, INC.

SELECTED CONSOLIDATED FINANCIAL INFORMATION

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Financial Condition Data

6/30/22

 

3/31/22

 

12/31/21

 

9/30/21

 

6/30/21

ASSETS

 

 

 

 

 

 

 

 

 

Cash and Due From Banks

$

81,121

 

 

$

123,588

 

 

$

119,674

 

 

$

173,523

 

 

$

172,010

 

Securities

 

213,505

 

 

 

231,097

 

 

 

224,974

 

 

 

221,351

 

 

 

208,472

 

Loans Held for Sale

 

 

 

 

 

 

 

 

 

 

17,407

 

 

 

11,409

 

Loans

 

 

 

 

 

 

 

 

 

Real Estate:

 

 

 

 

 

 

 

 

 

Residential

 

325,138

 

 

 

317,254

 

 

 

320,798

 

 

 

317,373

 

 

 

322,480

 

Commercial

 

426,105

 

 

 

427,227

 

 

 

392,124

 

 

 

379,621

 

 

 

360,518

 

Construction

 

41,277

 

 

 

54,227

 

 

 

85,028

 

 

 

78,075

 

 

 

85,187

 

Commercial and Industrial

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

62,054

 

 

 

59,601

 

 

 

64,487

 

 

 

69,657

 

 

 

70,666

 

PPP

 

3,853

 

 

 

8,242

 

 

 

24,523

 

 

 

32,703

 

 

 

49,525

 

Consumer

 

148,921

 

 

 

143,422

 

 

 

122,152

 

 

 

112,087

 

 

 

106,404

 

Other

 

20,621

 

 

 

10,669

 

 

 

11,684

 

 

 

12,083

 

 

 

12,666

 

Total Loans

 

1,027,969

 

 

 

1,020,642

 

 

 

1,020,796

 

 

 

1,001,599

 

 

 

1,007,446

 

Allowance for Loan Losses

 

(12,833

)

 

 

(11,595

)

 

 

(11,582

)

 

 

(11,581

)

 

 

(11,544

)

Loans, Net

 

1,015,136

 

 

 

1,009,047

 

 

 

1,009,214

 

 

 

990,018

 

 

 

995,902

 

Premises and Equipment Held for Sale

 

 

 

 

 

 

 

 

 

 

795

 

 

 

795

 

Premises and Equipment, Net

 

18,196

 

 

 

18,349

 

 

 

18,399

 

 

 

18,502

 

 

 

18,682

 

Bank-Owned Life Insurance

 

25,610

 

 

 

25,468

 

 

 

25,332

 

 

 

25,190

 

 

 

25,052

 

Goodwill

 

9,732

 

 

 

9,732

 

 

 

9,732

 

 

 

9,732

 

 

 

9,732

 

Intangible Assets, Net

 

4,404

 

 

 

4,850

 

 

 

5,295

 

 

 

5,740

 

 

 

6,186

 

Accrued Interest and Other Assets

 

18,757

 

 

 

16,539

 

 

 

12,859

 

 

 

12,560

 

 

 

13,373

 

Total Assets

$

1,386,461

 

 

$

1,438,670

 

 

$

1,425,479

 

 

$

1,474,818

 

 

$

1,461,613

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Deposits Held for Sale

$

 

 

$

 

 

$

 

 

$

102,647

 

 

$

102,557

 

Deposits

 

 

 

 

 

 

 

 

 

Non-Interest Bearing Demand Deposits

 

389,127

 

 

 

400,105

 

 

 

385,775

 

 

 

373,320

 

 

 

368,452

 

Interest Bearing Demand Accounts

 

265,347

 

 

 

280,455

 

 

 

272,518

 

 

 

244,004

 

 

 

246,920

 

Money Market Accounts

 

185,308

 

 

 

192,929

 

 

 

192,125

 

 

 

190,426

 

 

 

176,824

 

Savings Accounts

 

250,226

 

 

 

247,589

 

 

 

239,482

 

 

 

232,679

 

 

 

226,639

 

Time Deposits

 

125,182

 

 

 

129,235

 

 

 

136,713

 

 

 

144,727

 

 

 

154,718

 

Total Deposits

 

1,215,190

 

 

 

1,250,313

 

 

 

1,226,613

 

 

 

1,185,156

 

 

 

1,173,553

 

 

 

 

 

 

 

 

 

 

 

Short-Term Borrowings

 

32,178

 

 

 

39,219

 

 

 

39,266

 

 

 

42,623

 

 

 

39,054

 

Other Borrowings

 

17,618

 

 

 

17,607

 

 

 

17,601

 

 

 

6,000

 

 

 

6,000

 

Accrued Interest Payable and Other Liabilities

 

7,703

 

 

 

9,375

 

 

 

8,875

 

 

 

7,405

 

 

 

7,913

 

Total Liabilities

 

1,272,689

 

 

 

1,316,514

 

 

 

1,292,355

 

 

 

1,343,831

 

 

 

1,329,077

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

$

113,772

 

 

$

122,156

 

 

$

133,124

 

 

$

130,987

 

 

$

132,536

 

 

Three Months Ended

Six Months Ended

Selected Operating Data

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

6/30/22

6/30/21

Interest and Dividend Income

 

 

 

 

 

 

 

Loans, Including Fees

$

9,733

 

$

9,551

 

$

9,904

 

$

9,718

 

$

9,936

 

$

19,284

 

$

20,082

 

Securities:

 

 

 

 

 

 

 

Taxable

 

988

 

 

905

 

 

866

 

 

843

 

 

635

 

 

1,893

 

 

1,281

 

Tax-Exempt

 

57

 

 

66

 

 

66

 

 

71

 

 

74

 

 

123

 

 

152

 

Dividends

 

20

 

 

22

 

 

21

 

 

19

 

 

24

 

 

42

 

 

44

 

Other Interest and Dividend Income

 

160

 

 

72

 

 

106

 

 

135

 

 

151

 

 

232

 

 

249

 

Total Interest and Dividend Income

 

10,958

 

 

10,616

 

 

10,963

 

 

10,786

 

 

10,820

 

 

21,574

 

 

21,808

 

Interest Expense

 

 

 

 

 

 

 

Deposits

 

604

 

 

530

 

 

636

 

 

715

 

 

827

 

 

1,134

 

 

1,774

 

Short-Term Borrowings

 

18

 

 

19

 

 

26

 

 

25

 

 

24

 

 

37

 

 

47

 

Other Borrowings

 

173

 

 

174

 

 

70

 

 

36

 

 

35

 

 

347

 

 

76

 

Total Interest Expense

 

795

 

 

723

 

 

732

 

 

776

 

 

886

 

 

1,518

 

 

1,897

 

Net Interest and Dividend Income

 

10,163

 

 

9,893

 

 

10,231

 

 

10,010

 

 

9,934

 

 

20,056

 

 

19,911

 

Provision (Recovery) for Loan Losses

 

3,784

 

 

 

 

75

 

 

 

 

(1,200

)

 

3,784

 

 

(1,200

)

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

 

6,379

 

 

9,893

 

 

10,156

 

 

10,010

 

 

11,134

 

 

16,272

 

 

21,111

 

Noninterest Income:

 

 

 

 

 

 

 

Service Fees

 

559

 

 

526

 

 

569

 

 

602

 

 

614

 

 

1,085

 

 

1,160

 

Insurance Commissions

 

1,369

 

 

1,798

 

 

1,618

 

 

1,194

 

 

1,209

 

 

3,167

 

 

2,804

 

Other Commissions

 

179

 

 

89

 

 

90

 

 

93

 

 

173

 

 

268

 

 

338

 

Net Gain on Sales of Loans

 

 

 

 

 

977

 

 

49

 

 

31

 

 

 

 

117

 

Net (Loss) Gain on Securities

 

(199

)

 

(7

)

 

44

 

 

24

 

 

11

 

 

(206

)

 

458

 

Net Gain on Purchased Tax Credits

 

14

 

 

14

 

 

17

 

 

18

 

 

17

 

 

28

 

 

35

 

Gain on Sale of Branches

 

 

 

 

 

5,203

 

 

 

 

 

 

 

 

 

Net Loss on Disposal of Fixed Assets

 

 

 

(8

)

 

 

 

 

 

(3

)

 

(8

)

 

(3

)

Income from Bank-Owned Life Insurance

 

142

 

 

136

 

 

142

 

 

138

 

 

136

 

 

278

 

 

273

 

Other Income

 

41

 

 

65

 

 

29

 

 

80

 

 

31

 

 

106

 

 

211

 

Total Noninterest Income

 

2,105

 

 

2,613

 

 

8,689

 

 

2,198

 

 

2,219

 

 

4,718

 

 

5,393

 

Noninterest Expense:

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

4,539

 

 

4,565

 

 

5,181

 

 

4,787

 

 

5,076

 

 

9,104

 

 

9,970

 

Occupancy

 

776

 

 

686

 

 

619

 

 

615

 

 

1,024

 

 

1,462

 

 

1,734

 

Equipment

 

182

 

 

210

 

 

252

 

 

205

 

 

311

 

 

392

 

 

577

 

Data Processing

 

446

 

 

485

 

 

488

 

 

541

 

 

607

 

 

931

 

 

1,125

 

FDIC Assessment

 

128

 

 

209

 

 

222

 

 

293

 

 

249

 

 

337

 

 

499

 

PA Shares Tax

 

240

 

 

240

 

 

173

 

 

224

 

 

225

 

 

480

 

 

490

 

Contracted Services

 

348

 

 

587

 

 

1,133

 

 

1,441

 

 

750

 

 

935

 

 

1,437

 

Legal and Professional Fees

 

389

 

 

152

 

 

206

 

 

180

 

 

419

 

 

541

 

 

608

 

Advertising

 

115

 

 

116

 

 

191

 

 

225

 

 

193

 

 

231

 

 

333

 

Other Real Estate Owned (Income)

 

(37

)

 

(38

)

 

(30

)

 

(89

)

 

(26

)

 

(75

)

 

(64

)

Amortization of Intangible Assets

 

446

 

 

445

 

 

445

 

 

446

 

 

503

 

 

891

 

 

1,035

 

Intangible Assets and Goodwill Impairment

 

 

 

 

 

 

 

 

 

1,178

 

 

 

 

1,178

 

Writedown of Fixed Assets

 

 

 

 

 

23

 

 

2

 

 

2,268

 

 

 

 

2,268

 

Other

 

838

 

 

999

 

 

1,069

 

 

903

 

 

945

 

 

1,837

 

 

1,927

 

Total Noninterest Expense

 

8,410

 

 

8,656

 

 

9,972

 

 

9,773

 

 

13,722

 

 

17,066

 

 

23,117

 

Income (Loss) Before Income Tax (Benefit) Expense

 

74

 

 

3,850

 

 

8,873

 

 

2,435

 

 

(369

)

 

3,924

 

 

3,387

 

Income Tax (Benefit) Expense

 

(44

)

 

803

 

 

1,908

 

 

452

 

 

(146

)

 

759

 

 

765

 

Net Income (Loss)

$

118

 

$

3,047

 

$

6,965

 

$

1,983

 

$

(223

)

$

3,165

 

$

2,622

 

 

Three Months Ended

Six Months Ended

Per Common Share Data

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

6/30/22

6/30/21

Dividends Per Common Share

$

0.24

$

0.24

$

0.24

$

0.24

$

0.24

 

$

0.48

$

0.48

Earnings (Loss) Per Common Share - Basic

 

0.02

 

0.59

 

1.32

 

0.37

 

(0.04

)

 

0.61

 

0.48

Earnings (Loss) Per Common Share - Diluted

 

0.02

 

0.58

 

1.31

 

0.37

 

(0.04

)

 

0.61

 

0.48

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

 

0.05

 

0.59

 

0.53

 

0.36

 

0.59

 

 

0.64

 

1.05

Weighted Average Common Shares Outstanding - Basic

 

5,147,846

 

5,198,194

 

5,291,795

 

5,373,032

 

5,432,234

 

 

5,172,881

 

5,433,298

Weighted Average Common Shares Outstanding - Diluted

 

5,156,975

 

5,220,887

 

5,314,537

 

5,390,128

 

5,432,234

 

 

5,189,144

 

5,438,401

 

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

Common Shares Outstanding

 

5,128,333

 

 

5,156,897

 

 

5,260,672

 

 

5,330,401

 

 

5,409,077

 

Book Value Per Common Share

$

22.18

 

$

23.69

 

$

25.31

 

$

24.57

 

$

24.50

 

Tangible Book Value per Common Share (1)

 

19.43

 

 

20.86

 

 

22.45

 

 

21.67

 

 

21.56

 

Stockholders’ Equity to Assets

 

8.2

%

 

8.5

%

 

9.3

%

 

8.9

%

 

9.1

%

Tangible Common Equity to Tangible Assets (1)

 

7.3

 

 

7.6

 

 

8.4

 

 

7.9

 

 

8.1

 

 

Three Months Ended

Six Months Ended

Selected Financial Ratios (2)

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

6/30/22

6/30/21

Return on Average Assets

0.03 %

0.87 %

1.87 %

0.54 %

(0.06) %

0.45 %

0.36 %

Adjusted Return on Average Assets (1)

0.08

0.87

0.76

0.53

0.87

0.48

0.79

Return on Average Equity

0.40

9.50

20.95

5.93

(0.66)

5.15

3.92

Adjusted Return on Average Equity (1)

0.93

9.54

8.55

5.88

9.57

5.42

8.53

Average Interest-Earning Assets to Average Interest-Bearing Liabilities

149.03

144.48

145.09

146.78

146.82

146.74

144.94

Average Equity to Average Assets

8.49

9.14

8.93

9.03

9.08

8.81

9.27

Net Interest Rate Spread

3.00

2.98

2.85

2.77

2.72

3.00

2.81

Net Interest Rate Spread (FTE) (1)

3.01

2.99

2.86

2.78

2.74

3.01

2.82

Net Interest Margin

3.12

3.08

2.95

2.88

2.84

3.10

2.94

Net Interest Margin (FTE) (1)

3.13

3.10

2.96

2.89

2.85

3.11

2.95

Net Charge-offs (Recoveries) to Average Loans

1.01

(0.01)

0.03

(0.01)

(0.01)

0.50

0.01

Efficiency Ratio

68.55

69.21

52.71

80.05

112.91

68.89

91.36

Adjusted Efficiency Ratio (1)

64.18

65.88

69.73

77.27

80.68

65.03

75.25

Asset Quality Ratios

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

Allowance for Loan Losses to Total Loans

1.25

%

1.14

%

1.13

%

1.16

%

1.15

%

Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP) (1)

1.25

 

1.15

 

1.16

 

1.20

 

1.21

 

Allowance for Loan Losses to Nonperforming Loans (3)

219.89

 

158.88

 

159.40

 

106.18

 

74.92

 

Allowance for Loan Losses to Noncurrent Loans (4)

329.47

 

218.28

 

233.37

 

135.37

 

90.83

 

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

0.45

 

0.79

 

0.78

 

0.97

 

1.37

 

Nonperforming Loans to Total Loans (3)

0.57

 

0.72

 

0.71

 

1.09

 

1.53

 

Noncurrent Loans to Total Loans (4)

0.38

 

0.52

 

0.49

 

0.85

 

1.26

 

Nonperforming Assets to Total Assets (6)

0.42

 

0.51

 

0.51

 

0.74

 

1.07

 

Capital Ratios (7)

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

Common Equity Tier 1 Capital (to Risk Weighted Assets)

11.83

%

11.99

%

11.95

%

11.53

%

11.67

%

Tier 1 Capital (to Risk Weighted Assets)

11.83

 

11.99

 

11.95

 

11.53

 

11.67

 

Total Capital (to Risk Weighted Assets)

13.08

 

13.20

 

13.18

 

12.77

 

12.92

 

Tier 1 Leverage (to Adjusted Total Assets)

8.33

 

8.19

 

7.76

 

7.38

 

7.23

 

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

AVERAGE BALANCES AND YIELDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

June 30, 2021

 

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)

$

1,007,874

$

9,751

3.88

%

 

$

1,009,210

$

9,573

3.85

%

 

$

1,004,827

$

9,927

3.92

%

 

$

1,004,474

$

9,740

3.85

%

 

$

1,016,868

$

9,959

3.93

%

Debt Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

228,315

 

988

1.73

 

 

 

215,906

 

905

1.68

 

 

 

205,328

 

866

1.69

 

 

 

197,763

 

843

1.71

 

 

 

124,685

 

635

2.04

 

Exempt From Federal Tax

 

9,109

 

73

3.21

 

 

 

10,195

 

84

3.30

 

 

 

10,477

 

84

3.21

 

 

 

11,647

 

90

3.09

 

 

 

12,276

 

94

3.06

 

Equity Securities

 

2,693

 

20

2.97

 

 

 

2,693

 

22

3.27

 

 

 

2,693

 

21

3.12

 

 

 

2,655

 

19

2.86

 

 

 

2,649

 

24

3.62

 

Interest Bearing Deposits at Banks

 

56,379

 

122

0.87

 

 

 

59,296

 

33

0.22

 

 

 

150,102

 

61

0.16

 

 

 

160,935

 

92

0.23

 

 

 

242,348

 

106

0.17

 

Other Interest-Earning Assets

 

3,235

 

38

4.71

 

 

 

3,483

 

39

4.54

 

 

 

3,475

 

45

5.14

 

 

 

3,512

 

43

4.86

 

 

 

4,044

 

45

4.46

 

Total Interest-Earning Assets

 

1,307,605

 

10,992

3.37

 

 

 

1,300,783

 

10,656

3.32

 

 

 

1,376,902

 

11,004

3.17

 

 

 

1,380,986

 

10,827

3.11

 

 

 

1,402,870

 

10,863

3.11

 

Noninterest-Earning Assets

 

84,323

 

 

 

 

122,288

 

 

 

 

100,607

 

 

 

 

88,291

 

 

 

 

82,794

 

 

Total Assets

$

1,391,928

 

 

 

$

1,423,071

 

 

 

$

1,477,509

 

 

 

$

1,469,277

 

 

 

$

1,485,664

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Demand Deposits (3)

$

260,655

 

111

0.17

%

 

$

276,603

 

48

0.07

%

 

$

278,546

 

51

0.07

 

 

$

275,411

 

48

0.07

 

 

$

275,752

 

55

0.08

%

Savings (3)

 

248,356

 

20

0.03

 

 

 

243,786

 

19

0.03

 

 

 

252,387

 

20

0.03

 

 

 

251,801

 

21

0.03

 

 

 

247,238

 

25

0.04

 

Money Market (3)

 

188,804

 

61

0.13

 

 

 

192,425

 

41

0.09

 

 

 

209,572

 

57

0.11

 

 

 

198,167

 

55

0.11

 

 

 

199,652

 

71

0.14

 

Time Deposits (3)

 

127,832

 

412

1.29

 

 

 

132,015

 

422

1.30

 

 

 

154,342

 

508

1.31

 

 

 

168,654

 

591

1.39

 

 

 

177,506

 

676

1.53

 

Total Interest-Bearing Deposits (3)

 

825,647

 

604

0.29

 

 

 

844,829

 

530

0.25

 

 

 

894,847

 

636

0.28

 

 

 

894,033

 

715

0.32

 

 

 

900,148

 

827

0.37

 

Short-Term Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Sold Under Agreements to Repurchase

 

34,135

 

18

0.21

 

 

 

37,884

 

19

0.20

 

 

 

44,709

 

26

0.23

 

 

 

40,818

 

25

0.24

 

 

 

49,325

 

24

0.20

 

Other Borrowings

 

17,611

 

173

3.94

 

 

 

17,604

 

174

4.01

 

 

 

9,474

 

70

2.93

 

 

 

6,000

 

36

2.38

 

 

 

6,000

 

35

2.34

 

Total Interest-Bearing Liabilities

 

877,393

 

795

0.36

 

 

 

900,317

 

723

0.33

 

 

 

949,030

 

732

0.31

 

 

 

940,851

 

776

0.33

 

 

 

955,473

 

886

0.37

 

Noninterest-Bearing Demand Deposits

 

391,975

 

 

 

 

384,188

 

 

 

 

388,787

 

 

 

 

387,746

 

 

 

 

387,317

 

 

Other Liabilities

 

4,415

 

 

 

 

8,554

 

 

 

 

7,800

 

 

 

 

8,019

 

 

 

 

7,999

 

 

Total Liabilities

 

1,273,783

 

 

 

 

1,293,059

 

 

 

 

1,345,617

 

 

 

 

1,336,616

 

 

 

 

1,350,789

 

 

Stockholders' Equity

 

118,145

 

 

 

 

130,012

 

 

 

 

131,892

 

 

 

 

132,661

 

 

 

 

134,875

 

 

Total Liabilities and Stockholders' Equity

$

1,391,928

 

 

 

$

1,423,071

 

 

 

$

1,477,509

 

 

 

$

1,469,277

 

 

 

$

1,485,664

 

 

Net Interest Income (FTE)

(Non-GAAP) (4)

 

 

10,197

 

 

 

 

9,933

 

 

 

 

10,272

 

 

 

 

10,051

 

 

 

 

9,977

 

Net Interest-Earning Assets (5)

 

430,212

 

 

 

 

400,466

 

 

 

 

427,872

 

 

 

 

440,135

 

 

 

 

447,397

 

 

Net Interest Rate Spread (FTE)

(Non-GAAP) (4) (6)

 

 

3.01

%

 

 

 

2.99

%

 

 

 

2.86

 

 

 

 

2.78

 

 

 

 

2.74

%

Net Interest Margin (FTE)

(Non-GAAP) (4)(7)

 

 

3.13

 

 

 

 

3.10

 

 

 

 

2.96

 

 

 

 

2.89

 

 

 

 

2.85

 

PPP Loans

 

5,546

 

144

10.41

 

 

 

14,673

 

445

12.30

 

 

 

29,067

 

391

5.34

 

 

 

40,313

 

484

4.76

 

 

 

57,661

 

636

4.42

 

(1) Annualized based on three months ended results.
(2) Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.
(3) Includes Deposits Held for Sale that were sold in December 2021.
(4) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(7) Net interest margin represents annualized net interest income divided by average total interest-earning assets.

AVERAGE BALANCES AND YIELDS

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

June 30, 2022

 

June 30, 2021

 

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)

$

1,008,539

 

$

19,322

 

3.86

%

 

$

1,024,319

 

$

20,131

 

3.96

%

Debt Securities

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

222,144

 

 

1,893

 

1.70

 

 

 

123,790

 

 

1,281

 

2.07

 

Exempt From Federal Tax

 

9,649

 

 

156

 

3.23

 

 

 

12,608

 

 

192

 

3.05

 

Marketable Equity Securities

 

2,693

 

 

42

 

3.12

 

 

 

2,641

 

 

44

 

3.33

 

Interest Bearing Deposits at Banks

 

57,829

 

 

156

 

0.54

 

 

 

200,388

 

 

150

 

0.15

 

Other Interest-Earning Assets

 

3,358

 

 

76

 

4.56

 

 

 

3,977

 

 

99

 

5.02

 

Total Interest-Earning Assets

 

1,304,212

 

 

21,645

 

3.35

 

 

 

1,367,723

 

 

21,897

 

3.23

 

Noninterest-Earning Assets

 

103,201

 

 

 

 

 

 

87,645

 

 

 

 

Total Assets

$

1,407,413

 

 

 

 

 

$

1,455,368

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Demand Deposits (3)

$

268,585

 

 

160

 

0.12

%

 

$

267,455

 

 

133

 

0.10

%

Savings (3)

 

246,084

 

 

38

 

0.03

 

 

 

243,565

 

 

57

 

0.05

 

Money Market (3)

 

190,605

 

 

102

 

0.11

 

 

 

198,530

 

 

168

 

0.17

 

Time Deposits (3)

 

129,914

 

 

834

 

1.29

 

 

 

182,283

 

 

1,416

 

1.57

 

Total Interest-Bearing Deposits (3)

 

835,188

 

 

1,134

 

0.27

 

 

 

891,833

 

 

1,774

 

0.40

 

Short-Term Borrowings

 

 

 

 

 

 

 

 

 

 

 

Securities Sold Under Agreements to Repurchase

 

36,000

 

 

37

 

0.21

 

 

 

45,232

 

 

47

 

0.21

 

Other Borrowings

 

17,608

 

 

347

 

3.97

 

 

 

6,597

 

 

76

 

2.32

 

Total Interest-Bearing Liabilities

 

888,796

 

 

1,518

 

0.34

 

 

 

943,662

 

 

1,897

 

0.41

 

Noninterest-Bearing Demand Deposits

 

388,103

 

 

 

 

 

 

368,318

 

 

 

 

Other Liabilities

 

6,468

 

 

 

 

 

 

8,433

 

 

 

 

Total Liabilities

 

1,283,367

 

 

 

 

 

 

1,320,413

 

 

 

 

Stockholders' Equity

 

124,046

 

 

 

 

 

 

134,955

 

 

 

 

Total Liabilities and Stockholders' Equity

$

1,407,413

 

 

 

 

 

$

1,455,368

 

 

 

 

Net Interest Income (FTE) (Non-GAAP) (4)

 

 

 

20,127

 

 

 

 

 

 

20,000

 

 

Net Interest-Earning Assets (5)

 

415,416

 

 

 

 

 

 

424,061

 

 

 

 

Net Interest Rate Spread (FTE) (Non-GAAP) (4)(6)

 

 

 

 

3.01

%

 

 

 

 

 

2.82

%

Net Interest Margin (FTE) (Non-GAAP) (4)(7)

 

 

 

 

3.11

 

 

 

 

 

 

2.95

 

PPP Loans

 

10,085

 

 

589

 

11.78

 

 

 

57,305

 

 

1,313

 

4.62

 

(1) Annualized based on six months ended results.
(2) Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.
(3) Includes Deposits Held for Sale that were sold in December 2021.
(4) Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.
(5) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(7) Net interest margin represents annualized net interest income divided by average total interest-earning assets.

Explanation of Use of Non-GAAP Financial Measures

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

 

Three Months Ended

Six Months Ended

 

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

6/30/22

6/30/21

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) (GAAP)

$

118

 

$

3,047

 

$

6,965

 

$

1,983

 

$

(223

)

$

3,165

 

$

2,622

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

Loss (Gain) on Securities

 

199

 

 

7

 

 

(44

)

 

(24

)

 

(11

)

 

206

 

 

(458

)

Gain on Sale of Branches

 

 

 

 

 

(5,203

)

 

 

 

 

 

 

 

 

Loss on Disposal of Fixed Assets

 

 

 

8

 

 

 

 

 

 

3

 

 

8

 

 

3

 

Tax effect

 

(42

)

 

(3

)

 

1,102

 

 

5

 

 

2

 

 

(45

)

 

96

 

 

 

 

 

 

 

 

 

Non-Cash Charges:

 

 

 

 

 

 

 

Intangible Assets and Goodwill Impairment

 

 

 

 

 

 

 

 

 

1,178

 

 

 

 

1,178

 

Writedown on Fixed Assets

 

 

 

 

 

23

 

 

2

 

 

2,268

 

 

 

 

2,268

 

Tax Effect

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income (Non-GAAP)

$

275

 

$

3,059

 

$

2,843

 

$

1,966

 

$

3,217

 

$

3,334

 

$

5,709

 

 

 

 

 

 

 

 

 

Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding

 

5,156,975

 

 

5,220,887

 

 

5,314,537

 

 

5,390,128

 

 

5,432,234

 

 

5,189,144

 

 

5,438,401

 

 

 

 

 

 

 

 

 

Earnings (Loss) per Common Share - Diluted (GAAP)

$

0.02

 

$

0.58

 

$

1.31

 

$

0.37

 

$

(0.04

)

$

0.61

 

$

0.48

 

 

 

 

 

 

 

 

 

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

$

0.05

 

$

0.59

 

$

0.53

 

$

0.36

 

$

0.59

 

$

0.64

 

$

1.05

 

 

 

 

 

 

 

 

 

Net Income (Loss) (GAAP) (Numerator)

$

118

 

$

3,047

 

$

6,965

 

$

1,983

 

$

(223

)

$

3,165

 

$

2,622

 

 

 

 

 

 

 

 

 

Annualization Factor

 

4.01

 

 

4.06

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.02

 

 

2.02

 

 

 

 

 

 

 

 

 

Average Assets (Denominator)

 

1,391,928

 

 

1,423,071

 

 

1,477,509

 

 

1,469,277

 

 

1,485,664

 

 

1,407,413

 

 

1,455,368

 

 

 

 

 

 

 

 

 

Return on Average Assets (GAAP)

 

0.03

%

 

0.87

%

 

1.87

%

 

0.54

%

 

(0.06

) %

 

0.45

%

 

0.36

%

 

 

 

 

 

 

 

 

Adjusted Net Income (Non-GAAP) (Numerator)

$

275

 

$

3,059

 

$

2,843

 

$

1,966

 

$

3,217

 

$

3,334

 

$

5,709

 

 

 

 

 

 

 

 

 

Annualization Factor

 

4.01

 

 

4.06

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.02

 

 

2.02

 

 

 

 

 

 

 

 

 

Average Assets (Denominator)

 

1,391,928

 

 

1,423,071

 

 

1,477,509

 

 

1,469,277

 

 

1,485,664

 

 

1,407,413

 

 

1,455,368

 

 

 

 

 

 

 

 

 

Adjusted Return on Average Assets (Non-GAAP)

 

0.08

%

 

0.87

%

 

0.76

%

 

0.53

%

 

0.87

%

 

0.48

%

 

0.79

%

 

Three Months Ended

Six Months Ended

 

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

6/30/22

6/30/21

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) (GAAP) (Numerator)

$

118

 

$

3,047

 

$

6,965

 

$

1,983

 

$

(223

)

$

3,165

 

$

2,622

 

 

 

 

 

 

 

 

 

Annualization Factor

 

4.01

 

 

4.06

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.02

 

 

2.02

 

 

 

 

 

 

 

 

 

Average Equity (Denominator) (GAAP)

 

118,145

 

 

130,012

 

 

131,892

 

 

132,661

 

 

134,875

 

 

124,046

 

 

134,955

 

 

 

 

 

 

 

 

 

Return on Average Equity (GAAP)

 

0.40

%

 

9.50

%

 

20.95

%

 

5.93

%

 

(0.66

) %

 

5.15

%

 

3.92

%

 

 

 

 

 

 

 

 

Adjusted Net Income (Non-GAAP) (Numerator)

$

275

 

$

3,059

 

$

2,843

 

$

1,966

 

$

3,217

 

$

3,334

 

$

5,709

 

 

 

 

 

 

 

 

 

Annualization Factor

 

4.01

 

 

4.06

 

 

3.97

 

 

3.97

 

 

4.01

 

 

2.02

 

 

2.02

 

 

 

 

 

 

 

 

 

Average Equity (Denominator) (GAAP)

 

118,145

 

 

130,012

 

 

131,892

 

 

132,661

 

 

134,875

 

 

124,046

 

 

134,955

 

 

 

 

 

 

 

 

 

Adjusted Return on Average Equity (Non-GAAP)

 

0.93

%

 

9.54

%

 

8.55

%

 

5.88

%

 

9.57

%

 

5.42

%

 

8.53

%

Tangible book value per common share is a non-GAAP measure and is calculated based on tangible common equity divided by period-end common shares outstanding. Tangible common equity to tangible assets is a non-GAAP measure and is calculated based on tangible common equity divided by tangible assets. We believe these non-GAAP measures serve as useful tools to help evaluate the strength and discipline of the Company's capital management strategies and as an additional, conservative measure of the Company’s total value.

 

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

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

 

 

 

 

 

 

 

 

 

 

 

Assets (GAAP)

$

1,386,461

 

$

1,438,670

 

$

1,425,479

 

$

1,474,818

 

$

1,461,613

 

Goodwill and Intangible Assets, Net

 

(14,136

)

 

(14,582

)

 

(15,027

)

 

(15,472

)

 

(15,918

)

Tangible Assets (Non-GAAP) (Numerator)

$

1,372,325

 

$

1,424,088

 

$

1,410,452

 

$

1,459,346

 

$

1,445,695

 

 

 

 

 

 

 

Stockholders' Equity (GAAP)

$

113,772

 

$

122,156

 

$

133,124

 

$

130,987

 

$

132,536

 

Goodwill and Intangible Assets, Net

 

(14,136

)

 

(14,582

)

 

(15,027

)

 

(15,472

)

 

(15,918

)

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

$

99,636

 

$

107,574

 

$

118,097

 

$

115,515

 

$

116,618

 

 

 

 

 

 

 

Stockholders’ Equity to Assets (GAAP)

 

8.2

%

 

8.5

%

 

9.3

%

 

8.9

%

 

9.1

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

 

7.3

%

 

7.6

%

 

8.4

%

 

7.9

%

 

8.1

%

 

 

 

 

 

 

Common Shares Outstanding (Denominator)

 

5,128,333

 

 

5,156,897

 

 

5,260,672

 

 

5,330,401

 

 

5,409,077

 

 

 

 

 

 

 

Book Value per Common Share (GAAP)

$

22.18

 

$

23.69

 

$

25.31

 

$

24.57

 

$

24.50

 

Tangible Book Value per Common Share (Non-GAAP)

$

19.43

 

$

20.86

 

$

22.45

 

$

21.67

 

$

21.56

 

Interest income on interest-earning assets, net interest rate spread and net interest margin are presented on a fully tax-equivalent (“FTE”) basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and securities using the federal statutory income tax rate of 21 percent. We believe the presentation of net interest income on a FTE basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice. The following table reconciles net interest income, net interest spread and net interest margin on a FTE basis for the periods indicated:

 

Three Months Ended

Six Months Ended

 

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

6/30/22

6/30/21

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income (GAAP)

$

10,958

 

$

10,616

 

$

10,963

 

$

10,786

 

$

10,820

 

$

21,574

 

$

21,808

 

Adjustment to FTE Basis

 

34

 

 

40

 

 

41

 

 

41

 

 

43

 

 

71

 

 

89

 

Interest Income (FTE) (Non-GAAP)

 

10,992

 

 

10,656

 

 

11,004

 

 

10,827

 

 

10,863

 

 

21,645

 

 

21,897

 

Interest Expense (GAAP)

 

795

 

 

723

 

 

732

 

 

776

 

 

886

 

 

1,518

 

 

1,897

 

Net Interest Income (FTE) (Non-GAAP)

$

10,197

 

$

9,933

 

$

10,272

 

$

10,051

 

$

9,977

 

$

20,127

 

$

20,000

 

 

 

 

 

 

 

 

 

Net Interest Rate Spread (GAAP)

 

3.00

%

 

2.98

%

 

2.85

%

 

2.77

%

 

2.72

%

 

3.00

%

 

2.81

%

Adjustment to FTE Basis

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.02

 

 

0.01

 

 

0.01

 

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

 

3.01

 

 

2.99

 

 

2.86

 

 

2.78

 

 

2.74

 

 

3.01

 

 

2.82

 

 

 

 

 

 

 

 

 

Net Interest Margin (GAAP)

 

3.12

%

 

3.08

%

 

2.95

%

 

2.88

%

 

2.84

%

 

3.10

%

 

2.94

%

Adjustment to FTE Basis

 

0.01

 

 

0.02

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

 

0.01

 

Net Interest Margin (FTE) (Non-GAAP)

 

3.13

 

 

3.10

 

 

2.96

 

 

2.89

 

 

2.85

 

 

3.11

 

 

2.95

 

Adjusted efficiency ratio excludes the effect of certain non-recurring or non-cash items and represents adjusted noninterest expense divided by adjusted operating revenue. The Company evaluates its operational efficiency based on its adjusted efficiency ratio and believes it provides additional perspective on its ongoing performance as well as peer comparability.

 

Three Months Ended

Six Months Ended

 

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

6/30/22

6/30/21

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense (GAAP)

$

8,410

 

$

8,656

 

$

9,972

 

$

9,773

 

$

13,722

 

$

17,066

 

$

23,117

 

 

 

 

 

 

 

 

 

Net Interest and Dividend Income (GAAP)

$

10,163

 

$

9,893

 

$

10,231

 

$

10,010

 

$

9,934

 

$

20,056

 

$

19,911

 

 

 

 

 

 

 

 

 

Noninterest Income (GAAP)

 

2,105

 

 

2,613

 

 

8,689

 

 

2,198

 

 

2,219

 

 

4,718

 

 

5,393

 

Operating Revenue (GAAP)

$

12,268

 

$

12,506

 

$

18,920

 

$

12,208

 

$

12,153

 

$

24,774

 

$

25,304

 

Efficiency Ratio (GAAP)

 

68.55

%

 

69.21

%

 

52.71

%

 

80.05

%

 

112.91

%

 

68.89

%

 

91.36

%

 

 

 

 

 

 

 

 

Noninterest Expense (GAAP)

$

8,410

 

$

8,656

 

$

9,972

 

$

9,773

 

$

13,722

 

$

17,066

 

$

23,117

 

Less:

 

 

 

 

 

 

 

Other Real Estate Owned (Income)

 

(37

)

 

(38

)

 

(30

)

 

(89

)

 

(26

)

 

(75

)

 

(64

)

Amortization of Intangible Assets

 

446

 

 

445

 

 

445

 

 

446

 

 

503

 

 

891

 

 

1,035

 

Intangible Assets and Goodwill Impairment

 

 

 

 

 

 

 

 

 

1,178

 

 

 

 

1,178

 

Writedown on Fixed Assets

 

 

 

 

 

23

 

 

2

 

 

2,268

 

 

 

 

2,268

 

Adjusted Noninterest Expense (Non-GAAP)

$

8,001

 

$

8,249

 

$

9,534

 

$

9,414

 

$

9,799

 

$

16,250

 

$

18,700

 

 

 

 

 

 

 

 

 

Net Interest and Dividend Income (GAAP)

$

10,163

 

$

9,893

 

$

10,231

 

$

10,010

 

$

9,934

 

$

20,056

 

$

19,911

 

Noninterest Income (GAAP)

 

2,105

 

 

2,613

 

 

8,689

 

 

2,198

 

 

2,219

 

 

4,718

 

 

5,393

 

Less:

 

 

 

 

 

 

 

Net (Loss) Gain on Securities

 

(199

)

 

(7

)

 

44

 

 

24

 

 

11

 

 

(206

)

 

458

 

Gain on Sale of Branches

 

 

 

 

 

5,203

 

 

 

 

 

 

 

 

 

Net Loss on Disposal of Fixed Assets

 

 

 

(8

)

 

 

 

 

 

(3

)

 

(8

)

 

(3

)

Adjusted Noninterest Income (Non-GAAP)

$

2,304

 

$

2,628

 

$

3,442

 

$

2,174

 

$

2,211

 

$

4,932

 

$

4,938

 

Adjusted Operating Revenue (Non-GAAP)

$

12,467

 

$

12,521

 

$

13,673

 

$

12,184

 

$

12,145

 

$

24,988

 

$

24,849

 

Adjusted Efficiency Ratio (Non-GAAP)

 

64.18

%

 

65.88

%

 

69.73

%

 

77.27

%

 

80.68

%

 

65.03

%

 

75.25

%

Allowance for loan losses to total loans, excluding PPP loans, is a non-GAAP measure that serves as a useful measurement to evaluate the allowance for loan losses without the impact of SBA guaranteed loans.

 

6/30/22

3/31/22

12/31/21

9/30/21

6/30/21

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan Losses

$

12,833

 

$

11,595

 

$

11,582

 

$

11,581

 

$

11,544

 

 

 

 

 

 

 

Total Loans

 

1,027,969

 

$

1,020,642

 

 

1,020,796

 

$

1,001,599

 

$

1,007,446

 

PPP Loans

 

(3,853

)

 

(8,242

)

 

(24,523

)

 

(32,703

)

 

(49,525

)

Total Loans, Excluding PPP Loans (Non-GAAP)

$

1,024,116

 

$

1,012,400

 

$

996,273

 

$

968,896

 

$

957,921

 

 

 

 

 

 

 

Allowance for Loan Losses to Total Loans, Excluding

PPP Loans (Non-GAAP)

 

1.25

%

 

1.15

%

 

1.16

%

 

1.20

%

 

1.21

%

 

Contacts

Company Contact:
John H. Montgomery
President and Chief Executive Officer
Phone: (724) 225-2400

Investor Relations:
Jeremy Hellman, Vice President
The Equity Group Inc.
Phone: (212) 836-9626
Email: jhellman@equityny.com

Contacts

Company Contact:
John H. Montgomery
President and Chief Executive Officer
Phone: (724) 225-2400

Investor Relations:
Jeremy Hellman, Vice President
The Equity Group Inc.
Phone: (212) 836-9626
Email: jhellman@equityny.com