CB Financial Services, Inc. Announces Second Quarter and Year-to-Date 2021 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”) and Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of the Bank, today announced its second quarter and year-to-date 2021 financial results.

 

Three Months Ended

 

Six Months Ended

 

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

 

6/30/21

6/30/20

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss) Income (GAAP)

$

(223)

 

$

2,845

 

$

3,079

 

$

(17,395)

 

$

2,903

 

 

$

2,622

 

$

3,676

 

Excluding Non-Recurring Items (Non-GAAP) (1)

3,440

 

(353)

 

40

 

19,337

 

(408)

 

 

3,087

 

(76)

 

Adjusted Net Income (Non-GAAP) (1)

$

3,217

 

$

2,492

 

$

3,119

 

$

1,942

 

$

2,495

 

 

$

5,709

 

$

3,600

 

 

 

 

 

 

 

 

 

 

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

$

(0.04)

 

$

0.52

 

$

0.57

 

$

(3.22)

 

$

0.54

 

 

$

0.48

 

$

0.68

 

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

$

0.59

 

$

0.46

 

$

0.58

 

$

0.36

 

$

0.46

 

 

$

1.05

 

$

0.66

 

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

2021 Second Quarter Financial Highlights

(Comparisons to three months ended June 30, 2020)

  • Net loss was $223,000, compared to net income of $2.9 million, largely due to the write-down of fixed assets and intangible assets impairment ($3.4 million including tax effect) relating to the Bank’s previously announced branch optimization initiatives, which are excluded in the Company’s adjusted financial results.
    • Adjusted net income (non-GAAP) was $3.2 million, compared to adjusted net income of $2.5 million.
  • Loss per diluted common share (EPS) decreased to $0.04 from earnings per share of $0.54.
    • Adjusted earnings per common share - diluted (non-GAAP) was $0.59, compared to $0.46.
  • Loss on average assets (annualized) of 0.06%, compared to return on average assets (annualized) of 0.85%.
    • Adjusted return on average assets (annualized) (non-GAAP) of 0.87%, compared to 0.73%.
  • Loss on average equity (annualized) of 0.66%, compared return on average equity (annualized) to 7.65%.
    • Adjusted return on average equity (annualized) (non-GAAP) of 9.57%, compared to 6.57%.
  • Net interest margin decreased to 2.84% from 3.28%.
  • Net interest and dividend income was $9.9 million, compared to $10.3 million.
  • Noninterest income was $2.2 million, compared to $2.6 million.

(Amounts at June 30, 2021; comparisons to December 31, 2020)

  • Total loans including Payroll Protection Program (“PPP”) loans and loans held for sale were $1.02 billion, a decrease of $25.9 million.
  • Total loans including loans held for sale and excluding PPP loans were $969.3 million, a decrease of $20.3 million.
  • Total deposits including deposits held for sale were $1.28 billion, an increase of $51.5 million.
  • Total assets increased to a record $1.46 billion, compared to $1.42 billion.
  • Book value per share was $24.50, compared to $24.76.
  • Tangible book value per share (Non-GAAP) increased to $21.56, compared to $21.42.

Branch Optimization and Operational Efficiency Update

CB continues to make progress related to the previously announced branch optimization and operational efficiency initiatives. These initiatives include the consolidation of six branches that was completed on June 30, 2021, the sale of two branches expected to be finalized in the fourth quarter of 2021 and implementation of operational efficiencies related to over 185 individualized processes within its branch network and operating environment that are designed to improve the Bank’s infrastructure, client experience, efficiency and profitability.

CB presently expects to incur $7.9 million of non-recurring expenses in 2021 and, as of June 30, 2021, has incurred $5.1 million of expenses related to these items. The expenses include $2.3 million writedown on fixed assets and $1.2 million impairment of intangible assets associated with the branch consolidations and sales.

In addition, as part of CB’s branch optimization and operational efficiency initiatives, the Company incurred $1.6 million of expenses related to contracted services, employee severance costs, branch lease impairment, professional fees, data processing fees, legal and other expenses.

The majority of the remaining expenses to be recognized in 2021 are related to the operational and revenue efficiency initiative of approximately $1.5 million that will be reflected in contracted services. CB anticipates savings from this initiative ranging from approximately $2.5 million to $3.5 million in 2022, as well as creating possible enhanced revenue and fee generating capacity in future years.

In addition, the Company expects an annual reduction in pre-tax operating expenses in 2021 of approximately $1.0 million, along with $3.0 million of ongoing pre-tax cost savings as a result of the branch optimization initiatives. The Company expects these ongoing savings to be incremental to net income beginning in 2022. This estimated cost excludes the favorable impact of the expected premium from sale of branches expected to be recognized in the fourth quarter of 2021 and currently estimated to be $5.1 million.

Management Commentary

President and CEO John H. Montgomery stated, “The Company reported an increase in adjusted net income during the period, which was largely driven by economic recovery in our core markets in Southwestern Pennsylvania and the Ohio Valley. We were pleased to have only a moderate decline in loan volumes during the recovery, with steady growth in commercial construction and stabilizing auto originations despite lower dealer supplies. Growing our lending business, while expanding core deposit relationships, continues to be a priority for the remainder of the year. We continue to capitalize on successful deposit gathering initiatives to further reduce our cost of funds. Given the current tightening NIM environment, we are hyper-focused on reducing costs and expenses at the bank.”

Mr. Montgomery continued, “We remain focused on executing our previously-announced branch optimization initiatives to strengthen our franchise. This resulted in identifying six branches that were consolidated, as well as announcing a Purchase and Assumption Agreement to sell two West Virginia branches by the end of the year, which allows for Community Bank to focus on its core markets as well as improve our efficiency efforts. We have implemented a number of strategies to take advantage of the continued speed of digital adoption in banking, which will improve CB’s ability to adapt to a changing consumer environment. We expect this to result in a more streamlined operating infrastructure, which we expect will help to drive better-than-peer operating returns for our shareholders in the future.”

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, 2021, to stockholders of record as of the close of business on August 20, 2021.

Stock Repurchase Program

On June 10, 2021, CB authorized a program to repurchase up to $7.5 million of the Company’s outstanding common stock. The program is effective as of June 14, 2021 and authorized through June 13, 2022. As of July 23, 2021, the Company had expended $1.0 million to repurchase 45,462 shares at an average price of $22.38.

2021 Second Quarter Financial Review

Net Interest and Dividend Income

  • Net interest and dividend income decreased $387,000, or 3.7%, to $9.9 million for the three months ended June 30, 2021 compared to $10.3 million for the three months ended June 30, 2020.
  • Net interest margin (FTE) (Non-GAAP) decreased 45 basis points (“bps”) to 2.85% for the three months ended June 30, 2021 compared to 3.30% for the three months ended June 30, 2020. Net interest margin (GAAP) decreased to 2.84% for the three months ended June 30, 2021 compared to 3.28% for the three months ended June 30, 2020. While CB has further controlled its deposit cost structure as deposit balances increased and benefited from nonrenewal or repricing of higher cost time deposits, the net interest margin has decreased primarily due to the low interest rate environment decreasing yields on loans and securities.
  • Interest and dividend income decreased $907,000, or 7.7%, to $10.8 million for the three months ended June 30, 2021 compared to $11.7 million for the three months ended June 30, 2020.
    • Interest income on loans decreased $641,000, or 6.1%, to $9.9 million for the three months ended June 30, 2021 compared to $10.6 million for the three months ended June 30, 2020. While average loans increased $2.9 million compared to the three months ended June 30, 2020, the average yield decreased 28 bps to 3.93%. Interest and fee income on PPP loans was $636,000 for the three months ended June 30, 2021 and contributed 3 bps to loan yield, compared to $316,000 for the three months ended June 30, 2020, which decreased loan yield 7 bps in the prior period. The impact of the accretion of the credit mark on acquired loan portfolios was $153,000 for the three months ended June 30, 2021 compared to $90,000 for the three months ended June 30, 2020, or 6 bps in the current period compared to 4 bps in the prior period.
    • Interest income on taxable investment securities decreased $305,000, or 32.4%, to $635,000 for the three months ended June 30, 2021 compared to $940,000 for the three months ended June 30, 2020 driven by a $12.6 million decrease in average investment securities balances and 70 bps decrease in average yield. The Federal Reserve’s pandemic-driven decision to drop the benchmark interest rate in 2020 resulted in significant calls of U.S. government agency securities and paydowns on mortgage-backed securities in the declining interest rate environment, which were replaced with lower-yielding securities or maintained in cash.
    • Other interest and dividend income, which primarily consists of interest-bearing cash, increased $67,000, or 79.8% to $151,000 for the three months ended June 30, 2021 compared to $84,000 for the three months ended June 30, 2020. Average other interest-earning assets increased $149.4 million compared to the three months ended June 30, 2020 primarily from buildup of cash as a result of securities activity, PPP loan funds and government stimulus payments deposited with the Bank, although average yield declined 10 bps due to interest rate cuts on interest-earning cash deposits held at other financial institutions.
  • Interest expense decreased $520,000, or 37.0%, to $886,000 for the three months ended June 30, 2021 compared to $1.4 million for the three months ended June 30, 2020.
    • Interest expense on deposits decreased $478,000, or 36.6%, to $827,000 for the three months ended June 30, 2021 compared to $1.3 million for the three months ended June 30, 2020. While average interest-earning deposits increased $47.9 million compared to the three months ended June 30, 2020, interest rate declines for all products driven by pandemic-related market interest rate cuts resulted in a 25 bp, or 40.6%, decrease in average cost compared to the three months ended June 30, 2020. In addition, average time deposits and the related average cost decreased $28.3 million and 31 bps, respectively.

Provision for Loan Losses

Provision for loan losses was a recovery of $1.2 million for the three months ended June 30, 2021 compared to a provision of $300,000 for the three months ended June 30, 2020. A $23.4 million decrease in net reservable loans in the current quarter, which excludes PPP loans and includes the reclassification of $11.4 million of loans to held for sale, along with a decrease in specific reserves on impaired loans and improvements in the economic and industry outlook contributed to the recovery in the current period.

Noninterest income

Noninterest income decreased $429,000, or 16.2%, to $2.2 million for the three months ended June 30, 2021, compared to $2.6 million for the three months ended June 30, 2020. The decrease was largely due to lower net gains on securities and loans compared to the prior period, offset by an increase in other income due to the recognition of a $269,000 valuation allowance adjustment on mortgage servicing rights in the prior period and increase in service fees.

Noninterest Expense

Noninterest expense increased $4.7 million, or 51.3%, to $13.7 million for the three months ended June 30, 2021 compared to $9.1 million for the three months ended June 30, 2020. The increase was largely due to the aforementioned $2.3 million writedown of fixed assets and $1.2 million intangible asset impairment associated with the branch consolidation and sale initiative, as well as $1.3 million of expenses incurred in the current quarter related to various other costs associated with strategic initiatives such as employee severance, contracted services, lease impairment, and legal and investment banker fees.

Statement of Financial Condition Review

Assets

Total assets increased $44.9 million, or 3.2%, to $1.46 billion at June 30, 2021, compared to $1.42 billion at December 31, 2020. The change is primarily due to higher cash and due from banks and securities.

  • Cash and due from banks increased $11.1 million, or 6.9%, to $172.0 million at June 30, 2021, compared to $160.9 million at December 31, 2020. The change is primarily due to an increase in deposits as further described below in the Liabilities section.
  • Securities increased $63.1 million, or 43.4%, to $208.5 million at June 30, 2021, compared to $145.4 million at December 31, 2020. Current period activity included $97.1 million of mortgage-backed securities and U.S. government agency securities purchases, $20.4 million of paydowns on mortgage-backed securities, and $11.9 million of mortgage-backed securities sales, which resulted in the recognition of a $225,000 gain on the sale of securities. The purchases were made to earn a higher yield on excess cash. The sales recognized gains on higher-interest securities with faster prepayment speeds. In addition, there was a $2.2 million decrease in the market value of the debt securities portfolio and a $233,000 gain in market value in the equity securities portfolio, which is primarily comprised of bank stocks.

Payroll Protection Program (“PPP”) Update

  • PPP loans decreased $5.6 million to $49.5 million at June 30, 2021 compared to $55.1 million at December 31, 2020, which includes $34.6 million in originations in the current period offset by loan forgiveness.
  • $1.1 million of net PPP loan origination fees were unearned at December 31, 2020. Due to activity in the current period, $1.4 million of net PPP loan origination fees were unearned at June 30, 2021. $489,000 of net PPP loan origination fees were earned in the second quarter of 2021 compared to $535,000 for the three months ended March 31, 2021.

     

Loans and Credit Quality

  • Total loans held for investment decreased $37.3 million to $1.01 billion at June 30, 2021. This includes the impact of reclassifying $11.4 million of loans to held for sale. Excluding the net decline of $5.6 million in PPP loans in the current period and including $11.4 million of held for sale loans, loans declined $20.3 million.
  • The allowance for loan losses was $11.5 million at June 30, 2021 compared to $12.8 million at December 31, 2020. There was a net recovery of $1.2 million of provision for loan losses in the current quarter. A $31.7 million decrease in net reservable loans in the current period, which excludes PPP loans and includes the reclassification of $11.4 million of loans to held for sale that do not require a reserve, as well as a decrease in specifically impaired loans and improving economic and industry conditions contributed to the net recovery in the current period. As a result, the allowance for loan losses to total loans was 1.15% at June 30, 2021 compared to 1.22% at December 31, 2020. The allowance for loan losses to total loans, excluding PPP loans, was 1.21% at June 30, 2021 compared to 1.29% at December 31, 2020.
  • Net recoveries for the three months ended June 30, 2021 were $19,000, or (0.01)% of average loans on an annualized basis. Net recoveries for the three months ended June 30, 2020 were $26,000, or (0.01)% 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. Net charge-offs for the six months ended June 30, 2020 were $19,000, or 0.00% 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 $15.4 million at June 30, 2021 compared to $14.5 million at December 31, 2020. Nonperforming loans to total loans ratio was 1.53% at June 30, 2021 compared to 1.39% at December 31, 2020.
  • There were nine loans in forbearance totaling $7.8 million at June 30, 2021 compared to 25 loans totaling $18.4 million at March 31, 2021, and 31 loans totaling $24.1 million at December 31, 2021. The remaining loans exit forbearance in July and have begun or are expected to begin making regularly scheduled payments.

Liabilities

Total liabilities increased $46.9 million, or 3.7%, to $1.33 billion at June 30, 2021 compared to $1.28 billion at December 31, 2020.

Deposits

  • Total deposits, including deposits held for sale, increased $51.5 million to $1.28 billion as of June 30, 2021 compared to $1.22 billion at December 31, 2020. Noninterest bearing demand deposits, NOW accounts and savings accounts increased $44.0 million, $16.5 million and $12.9 million, respectively, partially offset by a decrease of $17.0 million in time deposits. IRS and stimulus-related payments totaled $29.9 million in the first quarter and the impact of the PPP loans that were originated and the proceeds of which were initially deposited at the Bank was approximately $28.7 million. Annualized deposit growth rate was 8.4% including IRS and PPP loan deposits. Average total deposits increased $54.9 million, primarily in noninterest and interest-bearing demand deposits, for the three months ended June 30, 2021 compared to the three months ended March 31, 2021.

Borrowed Funds

  • Short-term borrowings decreased $2.0 million, or 4.9%, to $39.1 million at June 30, 2021, compared to $41.1 million at December 31, 2020. At June 30, 2021 and December 31, 2020, short-term borrowings were comprised entirely of securities sold under agreements to repurchase, which are related to business deposit customers whose funds, above designated target balances, are transferred into an overnight interest-earning investment account by purchasing securities from the Bank’s investment portfolio under an agreement to repurchase. $10.1 million was excluded from short-term borrowings at June 30, 2021 and reported as deposits held for sale.
  • Other borrowed funds decreased $2.0 million to $6.0 million at June 30, 2021 due to a Federal Home Loan Bank borrowing that matured in the current period.

     

Stockholders’ Equity

Stockholders’ equity decreased $2.0 million, or 1.5%, to $132.5 million at June 30, 2021, compared to $134.5 million at December 31, 2020. Accumulated other comprehensive income decreased $1.7 million primarily due to market interest rate conditions on the Bank’s debt securities. In addition, the Company repurchased $561,000 of its common stock as part of its stock repurchase program.

Book value per share

Book value per share was $24.50 at June 30, 2021 compared to $24.76 at December 31, 2020, a decrease of $0.26. Tangible book value per share (Non-GAAP) increased $0.14 to $21.56 compared to $21.42 at December 31, 2020. Refer to “Explanation of Use of Non-GAAP Financial Measures” at the end of this Press Release.

About CB Financial Services, Inc.

CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates 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

6/30/21

 

3/31/21

 

12/31/20

 

9/30/20

 

6/30/20

ASSETS

 

 

 

 

 

 

 

 

 

Cash and Due From Banks

$

172,010

 

 

$

230,000

 

 

$

160,911

 

 

$

112,169

 

 

$

131,403

 

Securities

208,472

 

 

142,156

 

 

145,400

 

 

158,956

 

 

148,648

 

Loans Held for Sale

11,409

 

 

 

 

 

 

 

 

 

Loans

 

 

 

 

 

 

 

 

 

Real Estate:

 

 

 

 

 

 

 

 

 

Residential

322,480

 

 

339,596

 

 

344,142

 

 

343,955

 

 

344,782

 

Commercial

360,518

 

 

370,118

 

 

373,555

 

 

353,904

 

 

350,506

 

Construction

85,187

 

 

77,714

 

 

72,600

 

 

69,178

 

 

58,295

 

Commercial and Industrial

 

 

 

 

 

 

 

 

 

Commercial and Industrial

70,666

 

 

68,551

 

 

71,717

 

 

73,287

 

 

79,057

 

PPP

49,525

 

 

60,380

 

 

55,096

 

 

71,028

 

 

70,028

 

Consumer

106,404

 

 

111,650

 

 

113,854

 

 

117,364

 

 

117,145

 

Other

12,666

 

 

13,688

 

 

13,789

 

 

22,169

 

 

22,346

 

Total Loans

1,007,446

 

 

1,041,697

 

 

1,044,753

 

 

1,050,885

 

 

1,042,159

 

Allowance for Loan Losses

(11,544)

 

 

(12,725)

 

 

(12,771)

 

 

(13,780)

 

 

(12,648)

 

Loans, Net

995,902

 

 

1,028,972

 

 

1,031,982

 

 

1,037,105

 

 

1,029,511

 

Premises and Equipment Held for Sale

795

 

 

 

 

 

 

 

 

 

Premises and Equipment, Net

18,682

 

 

20,240

 

 

20,302

 

 

20,439

 

 

21,818

 

Bank-Owned Life Insurance

25,052

 

 

24,916

 

 

24,779

 

 

24,639

 

 

24,499

 

Goodwill

9,732

 

 

9,732

 

 

9,732

 

 

9,732

 

 

28,425

 

Intangible Assets, Net

6,186

 

 

7,867

 

 

8,399

 

 

8,931

 

 

9,463

 

Accrued Interest and Other Assets

13,373

 

 

12,938

 

 

15,215

 

 

20,905

 

 

13,385

 

Total Assets

$

1,461,613

 

 

$

1,476,821

 

 

$

1,416,720

 

 

$

1,392,876

 

 

$

1,407,152

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Deposits Held for Sale

$

102,557

 

 

$

 

 

$

 

 

$

 

 

$

 

Deposits

 

 

 

 

 

 

 

 

 

Non-Interest Bearing Demand Deposits

368,452

 

 

377,137

 

 

340,569

 

 

335,287

 

 

341,180

 

Interest Bearing Demand Accounts

246,920

 

 

280,929

 

 

259,870

 

 

245,850

 

 

237,343

 

Money Market Accounts

176,824

 

 

198,975

 

 

199,029

 

 

188,958

 

 

184,726

 

Savings Accounts

226,639

 

 

246,725

 

 

235,088

 

 

232,691

 

 

229,388

 

Time Deposits

154,718

 

 

180,697

 

 

190,013

 

 

196,250

 

 

201,303

 

Total Deposits

1,173,553

 

 

1,284,463

 

 

1,224,569

 

 

1,199,036

 

 

1,193,940

 

 

 

 

 

 

 

 

 

 

 

Short-Term Borrowings

39,054

 

 

45,352

 

 

41,055

 

 

42,061

 

 

42,349

 

Other Borrowings

6,000

 

 

6,000

 

 

8,000

 

 

11,000

 

 

11,000

 

Accrued Interest and Other Liabilities

7,913

 

 

7,230

 

 

8,566

 

 

7,480

 

 

7,471

 

Total Liabilities

1,329,077

 

 

1,343,045

 

 

1,282,190

 

 

1,259,577

 

 

1,254,760

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

$

132,536

 

 

$

133,776

 

 

$

134,530

 

 

$

133,299

 

 

$

152,392

 

 

Three Months Ended

Six Months Ended

Selected Operating Data

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

6/30/21

6/30/20

Interest and Dividend Income

 

 

 

 

 

 

 

Loans, Including Fees

$

9,936

 

$

10,146

 

$

10,833

 

$

10,709

 

$

10,577

 

$

20,082

 

$

21,341

 

Securities:

 

 

 

 

 

 

 

Taxable

635

 

646

 

725

 

753

 

940

 

1,281

 

2,141

 

Tax-Exempt

74

 

78

 

78

 

79

 

106

 

152

 

212

 

Dividends

24

 

20

 

20

 

19

 

20

 

44

 

40

 

Other Interest and Dividend Income

151

 

98

 

99

 

96

 

84

 

249

 

322

 

Total Interest and Dividend Income

10,820

 

10,988

 

11,755

 

11,656

 

11,727

 

21,808

 

24,056

 

Interest Expense

 

 

 

 

 

 

 

Deposits

827

 

947

 

1,036

 

1,150

 

1,305

 

1,774

 

2,986

 

Short-Term Borrowings

24

 

23

 

25

 

28

 

39

 

47

 

84

 

Other Borrowings

35

 

41

 

60

 

62

 

62

 

76

 

132

 

Total Interest Expense

886

 

1,011

 

1,121

 

1,240

 

1,406

 

1,897

 

3,202

 

Net Interest and Dividend Income

9,934

 

9,977

 

10,634

 

10,416

 

10,321

 

19,911

 

20,854

 

(Recovery) Provision for Loan Losses

(1,200)

 

 

 

1,200

 

300

 

(1,200)

 

2,800

 

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

11,134

 

9,977

 

10,634

 

9,216

 

10,021

 

21,111

 

18,054

 

Noninterest Income:

 

 

 

 

 

 

 

Service Fees

614

 

546

 

560

 

554

 

487

 

1,160

 

1,092

 

Insurance Commissions

1,209

 

1,595

 

1,403

 

1,079

 

1,113

 

2,804

 

2,396

 

Other Commissions

173

 

165

 

105

 

76

 

188

 

338

 

298

 

Net Gain on Sales of Loans

31

 

86

 

388

 

435

 

441

 

117

 

568

 

Net Gain (Loss) on Securities

11

 

447

 

213

 

(59)

 

517

 

458

 

79

 

Net Gain on Purchased Tax Credits

17

 

18

 

16

 

15

 

16

 

35

 

31

 

Gain on sale of branches

 

 

 

 

 

 

 

Net (Loss) Gain on Disposal of Fixed Assets

(3)

 

 

(13)

 

(65)

 

 

(3)

 

17

 

Income from Bank-Owned Life Insurance

136

 

137

 

140

 

140

 

138

 

273

 

277

 

Other Income (Loss)

31

 

180

 

(34)

 

(2)

 

(252)

 

211

 

(238)

 

Total Noninterest Income

2,219

 

3,174

 

2,778

 

2,173

 

2,648

 

5,393

 

4,520

 

Noninterest Expense:

 

 

 

 

 

 

 

Salaries and Employee Benefits

5,076

 

4,894

 

5,126

 

5,124

 

4,828

 

9,970

 

9,559

 

Occupancy

1,024

 

710

 

606

 

759

 

699

 

1,734

 

1,432

 

Equipment

311

 

266

 

234

 

220

 

224

 

577

 

481

 

Data Processing

607

 

518

 

476

 

482

 

460

 

1,125

 

885

 

FDIC Assessment

249

 

250

 

344

 

172

 

163

 

499

 

321

 

PA Shares Tax

225

 

265

 

350

 

355

 

333

 

490

 

608

 

Contracted Services

750

 

687

 

577

 

531

 

562

 

1,437

 

940

 

Legal and Professional Fees

419

 

189

 

185

 

161

 

171

 

608

 

406

 

Advertising

193

 

140

 

178

 

148

 

155

 

333

 

338

 

Other Real Estate Owned (Income)

(26)

 

(38)

 

(39)

 

(12)

 

(1)

 

(64)

 

(18)

 

Amortization of Intangible Assets

503

 

532

 

532

 

532

 

532

 

1,035

 

1,064

 

Intangible Assets and Goodwill Impairment

1,178

 

 

 

18,693

 

 

1,178

 

 

Writedown of Fixed Assets

2,268

 

 

240

 

884

 

 

2,268

 

 

Other

945

 

982

 

916

 

919

 

945

 

1,927

 

2,058

 

Total Noninterest Expense

13,722

 

9,395

 

9,725

 

28,968

 

9,071

 

23,117

 

18,074

 

(Loss) Income Before Income Tax (Benefit) Expense

(369)

 

3,756

 

3,687

 

(17,579)

 

3,598

 

3,387

 

4,500

 

Income Tax (Benefit) Expense

(146)

 

911

 

608

 

(184)

 

695

 

765

 

824

 

Net (Loss) Income

$

(223)

 

$

2,845

 

$

3,079

 

$

(17,395)

 

$

2,903

 

$

2,622

 

$

3,676

 

 
 

 

Three Months Ended

Six Months Ended

Per Common Share Data

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

6/30/21

6/30/20

Dividends Per Common Share

$

0.24

 

$

0.24

 

$

0.24

 

$

0.24

 

$

0.24

 

$

0.48

 

$

0.48

 

(Loss) Earnings Per Common Share - Basic

(0.04)

 

0.52

 

0.57

 

(3.22)

 

0.54

 

0.48

 

0.68

 

(Loss) Earnings Per Common Share - Diluted

(0.04)

 

0.52

 

0.57

 

(3.22)

 

0.54

 

0.48

 

0.68

 

Adjusted Earnings Per Common Share - Diluted (1)

0.59

 

0.46

 

0.58

 

0.36

 

0.46

 

1.05

 

0.66

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding - Basic

5,432,234

 

5,434,374

 

5,404,874

 

5,395,342

 

5,393,712

 

5,433,298

 

5,412,456

 

Weighted Average Common Shares Outstanding - Diluted

5,432,234

 

5,436,881

 

5,406,068

 

5,395,342

 

5,393,770

 

5,438,401

 

5,423,770

 

 
 

 

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

Common Shares Outstanding

5,409,077

 

5,434,374

 

5,434,374

 

5,398,712

 

5,393,712

 

Book Value Per Common Share

$

24.50

 

$

24.62

 

$

24.76

 

$

24.69

 

$

28.25

 

Tangible Book Value per Common Share (1)

21.56

 

21.38

 

21.42

 

21.23

 

21.23

 

Stockholders’ Equity to Assets

9.1

%

9.1

%

9.5

%

9.6

%

10.8

%

Tangible Common Equity to Tangible Assets (1)

8.1

 

8.0

 

8.3

 

8.3

 

8.4

 

 
 

 

Three Months Ended

Six Months Ended

Selected Financial Ratios (2)

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

6/30/21

6/30/20

Return on Average Assets

(0.06)

%

0.81

%

0.87

%

(4.90)

%

0.85

%

0.36

%

0.55

%

Adjusted Return on Average Assets (1)

0.87

 

0.71

 

0.88

 

0.55

 

0.73

 

0.79

 

0.54

 

Return on Average Equity

(0.66)

 

8.54

 

9.13

 

(45.13)

 

7.65

 

3.92

 

4.84

 

Adjusted Return on Average Equity (1)

9.57

 

7.48

 

9.25

 

5.04

 

6.57

 

8.53

 

4.74

 

Average Interest-Earning Assets to Average Interest-Bearing Liabilities

146.82

 

142.98

 

141.58

 

141.98

 

140.72

 

144.94

 

137.91

 

Average Equity to Average Assets

9.08

 

9.48

 

9.49

 

10.85

 

11.08

 

9.27

 

11.36

 

Net Interest Rate Spread

2.72

 

2.91

 

3.07

 

3.03

 

3.10

 

2.81

 

3.22

 

Net Interest Rate Spread (FTE) (1)

2.74

 

2.92

 

3.08

 

3.05

 

3.12

 

2.82

 

3.23

 

Net Interest Margin

2.84

 

3.04

 

3.21

 

3.19

 

3.28

 

2.94

 

3.41

 

Net Interest Margin (FTE) (1)

2.85

 

3.05

 

3.22

 

3.21

 

3.30

 

2.95

 

3.43

 

Net (Recoveries) Charge-offs to Average Loans

(0.01)

 

0.02

 

0.39

 

0.03

 

(0.01)

 

0.01

 

 

Efficiency Ratio

112.91

 

71.44

 

72.51

 

230.11

 

69.94

 

91.36

 

71.23

 

Adjusted Efficiency Ratio (1)

80.68

 

70.06

 

68.06

 

69.78

 

68.58

 

75.25

 

67.36

 

 

Asset Quality Ratios

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

Allowance for Loan Losses to Total Loans (3)

1.15

%

1.22

%

1.22

%

1.31

%

1.21

%

Allowance for Loan Losses to Total Loans, Excluding PPP Loans (1) (3)

1.21

 

1.30

 

1.29

 

1.41

 

1.30

 

Allowance for Loan Losses to Nonperforming Loans (3) (4)

74.92

 

89.29

 

88.15

 

91.84

 

226.59

 

Allowance for Loan Losses to Noncurrent Loans (3) (5)

90.83

 

118.08

 

117.20

 

114.01

 

390.73

 

Delinquent and Nonaccrual Loans to Total Loans (5) (6)

1.37

 

1.18

 

1.50

 

1.23

 

0.39

 

Nonperforming Loans to Total Loans (4)

1.53

 

1.37

 

1.39

 

1.43

 

0.54

 

Noncurrent Loans to Total Loans (5)

1.26

 

1.03

 

1.04

 

1.15

 

0.31

 

Nonperforming Assets to Total Assets (7)

1.07

 

0.98

 

1.04

 

1.09

 

0.41

 

 
 

Capital Ratios (8)

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

Common Equity Tier 1 Capital (to Risk Weighted Assets)

11.67

%

11.85

%

11.79

%

11.62

%

11.90

%

Tier 1 Capital (to Risk Weighted Assets)

11.67

 

11.85

 

11.79

 

11.62

 

11.90

 

Total Capital (to Risk Weighted Assets)

12.92

 

13.10

 

13.04

 

12.88

 

13.16

 

Tier 1 Leverage (to Adjusted Total Assets)

7.23

 

7.87

 

7.81

 

7.63

 

7.90

 

(1)

Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.

(2)

Interim period ratios are calculated on an annualized basis.

(3)

Loans acquired in connection with the mergers with FedFirst Financial Corporation and First West Virginia Bancorp were recorded at their estimated fair value at the acquisition date and did not include a carryover of the pre-merger allowance for loan losses.

(4)

Nonperforming loans consist of nonaccrual loans, accruing loans that are 90 days or more past due, and troubled debt restructured loans.

(5)

Noncurrent loans consist of nonaccrual loans and accruing loans that are 90 days or more past due.

(6)

Delinquent loans consist of accruing loans that are 30 days or more past due.

(7)

Nonperforming assets consist of nonperforming loans and other real estate owned.

(8)

Capital ratios are for Community Bank only.

 
Certain items previously reported may have been reclassified to conform with the current reporting period’s format.
 

AVERAGE BALANCES AND YIELDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

September 30, 2020

 

June 30, 2020

 

Average

Balance

Interest

and

Dividends

Yield /

Cost
(4)

 

Average

Balance

Interest

and

Dividends

Yield / Cost

(4)

 

Average

Balance

Interest

and


Dividends

Yield /

Cost
(4)

 

Average

Balance

Interest

and

Dividends

Yield /

Cost
(4)

 

Average

Balance

Interest

and

Dividends

Yield /

(Cost
(4)

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, Net (6)

$

1,016,868

 

$

9,959

 

3.93

%

 

$

1,031,853

 

$

10,168

 

4.00

%

 

$

1,032,942

 

$

10,860

 

4.18

%

 

$

1,035,426

 

$

10,744

 

4.13

%

 

$

1,014,000

 

$

10,612

 

4.21

%

Debt Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

124,685

 

635

 

2.04

 

 

122,883

 

646

 

2.10

 

 

133,026

 

725

 

2.18

 

 

123,332

 

753

 

2.44

 

 

137,268

 

940

 

2.74

 

Exempt From Federal Tax

12,276

 

94

 

3.06

 

 

12,943

 

96

 

2.97

 

 

13,006

 

96

 

2.95

 

 

13,054

 

97

 

2.97

 

 

14,106

 

130

 

3.69

 

Equity Securities

2,649

 

24

 

3.62

 

 

2,632

 

20

 

3.04

 

 

2,612

 

20

 

3.06

 

 

2,580

 

19

 

2.95

 

 

2,579

 

20

 

3.10

 

Other Interest-Earning Assets

246,392

 

151

 

0.25

 

 

161,871

 

98

 

0.25

 

 

137,000

 

99

 

0.29

 

 

123,171

 

96

 

0.31

 

 

97,033

 

84

 

0.35

 

Total Interest-Earning Assets

1,402,870

 

10,863

 

3.11

 

 

1,332,182

 

11,028

 

3.36

 

 

1,318,586

 

11,800

 

3.56

 

 

1,297,563

 

11,709

 

3.59

 

 

1,264,986

 

11,786

 

3.75

 

Noninterest-Earning Assets

82,794

 

 

 

 

92,550

 

 

 

 

94,262

 

 

 

 

115,567

 

 

 

 

113,176

 

 

 

Total Assets

$

1,485,664

 

 

 

 

$

1,424,732

 

 

 

 

$

1,412,848

 

 

 

 

$

1,413,130

 

 

 

 

$

1,378,162

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Demand Deposits (7)

$

275,752

 

55

 

0.08

%

 

$

259,065

 

77

 

0.12

%

 

$

252,521

 

83

 

0.13

 

 

$

245,977

 

99

 

0.16

 

 

$

236,312

 

141

 

0.24

%

Savings (7)

247,238

 

25

 

0.04

 

 

239,850

 

32

 

0.05

 

 

232,647

 

32

 

0.05

 

 

230,567

 

32

 

0.06

 

 

227,470

 

35

 

0.06

 

Money Market (7)

199,652

 

71

 

0.14

 

 

197,395

 

98

 

0.20

 

 

198,983

 

131

 

0.26

 

 

185,644

 

140

 

0.30

 

 

182,656

 

187

 

0.41

 

Time Deposits (7)

177,506

 

676

 

1.53

 

 

187,114

 

740

 

1.60

 

 

193,194

 

790

 

1.63

 

 

198,184

 

879

 

1.76

 

 

205,847

 

942

 

1.84

 

Total Interest-Bearing Deposits (7)

900,148

 

827

 

0.37

 

 

883,424

 

947

 

0.43

 

 

877,345

 

1,036

 

0.47

 

 

860,372

 

1,150

 

0.53

 

 

852,285

 

1,305

 

0.62

 

Short-Term Borrowings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Sold Under Agreements to Repurchase

49,325

 

24

 

0.20

 

 

41,094

 

23

 

0.23

 

 

43,468

 

25

 

0.23

 

 

42,512

 

28

 

0.26

 

 

35,642

 

39

 

0.44

 

Other Borrowings

6,000

 

35

 

2.34

 

 

7,200

 

41

 

2.31

 

 

10,543

 

60

 

2.26

 

 

11,000

 

62

 

2.24

 

 

11,000

 

62

 

2.27

 

Total Interest-Bearing Liabilities

955,473

 

886

 

0.37

 

 

931,718

 

1,011

 

0.44

 

 

931,356

 

1,121

 

0.48

 

 

913,884

 

1,240

 

0.54

 

 

898,927

 

1,406

 

0.63

 

Noninterest-Bearing Demand Deposits

387,317

 

 

 

 

349,108

 

 

 

 

338,223

 

 

 

 

337,441

 

 

 

 

317,738

 

 

 

Other Liabilities

7,999

 

 

 

 

8,869

 

 

 

 

9,176

 

 

 

 

8,477

 

 

 

 

8,815

 

 

 

Total Liabilities

1,350,789

 

 

 

 

1,289,695

 

 

 

 

1,278,755

 

 

 

 

1,259,802

 

 

 

 

1,225,480

 

 

 

Stockholders' Equity

134,875

 

 

 

 

135,037

 

 

 

 

134,093

 

 

 

 

153,328

 

 

 

 

152,682

 

 

 

Total Liabilities and Stockholders' Equity

$

1,485,664

 

 

 

 

$

1,424,732

 

 

 

 

$

1,412,848

 

 

 

 

$

1,413,130

 

 

 

 

$

1,378,162

 

 

 

Net Interest Income (FTE)

(Non-GAAP) (5)

 

9,977

 

 

 

 

10,017

 

 

 

 

10,679

 

 

 

 

10,469

 

 

 

 

10,380

 

 

Net Interest-Earning Assets (1)

447,397

 

 

 

 

400,464

 

 

 

 

387,230

 

 

 

 

383,679

 

 

 

 

366,059

 

 

 

Net Interest Rate Spread (FTE)

(Non-GAAP) (2) (5)

 

 

2.74

%

 

 

 

2.92

%

 

 

 

3.08

 

 

 

 

3.05

 

 

 

 

3.12

%

Net Interest Margin (FTE)

(Non-GAAP) (3)(5)

 

 

2.85

 

 

 

 

3.05

 

 

 

 

3.22

 

 

 

 

3.21

 

 

 

 

3.30

 

(1)

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

(2)

Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3)

Net interest margin represents net interest income divided by average total interest-earning assets.

(4)

Annualized.

(5)

Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.

(6)

Includes loans held for sale

(7)

Includes deposits held for sale

 

AVERAGE BALANCES AND YIELDS

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

June 30, 2021

 

June 30, 2020

 

Average

Balance

 

Interest

and

Dividends

 

Yield /

Cost (4)

 

Average

Balance

 

Interest

and

Dividends

 

Yield /

Cost (4)

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Interest-Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

Loans, Net (5)

$

1,024,319

 

 

$

20,131

 

 

3.96

%

 

$

982,331

 

 

$

21,408

 

 

4.38

%

Debt Securities

 

 

 

 

 

 

 

 

 

 

 

Taxable

123,790

 

 

1,281

 

 

2.07

 

 

147,962

 

 

2,141

 

 

2.89

 

Exempt From Federal Tax

12,608

 

 

192

 

 

3.05

 

 

15,471

 

 

258

 

 

3.34

 

Marketable Equity Securities

2,641

 

 

44

 

 

3.33

 

 

2,573

 

 

40

 

 

3.11

 

Other Interest-Earning Assets

204,365

 

 

249

 

 

0.25

 

 

80,821

 

 

322

 

 

0.80

 

Total Interest-Earning Assets

1,367,723

 

 

21,897

 

 

3.23

 

 

1,229,158

 

 

24,169

 

 

3.95

 

Noninterest-Earning Assets

87,645

 

 

 

 

 

 

113,616

 

 

 

 

 

Total Assets

$

1,455,368

 

 

 

 

 

 

$

1,342,774

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Interest-Bearing Demand Deposits (6)

$

267,455

 

 

133

 

 

0.10

%

 

$

231,397

 

 

408

 

 

0.35

%

Savings (6)

243,565

 

 

57

 

 

0.05

 

 

222,899

 

 

124

 

 

0.11

 

Money Market (6)

198,530

 

 

168

 

 

0.17

 

 

181,819

 

 

436

 

 

0.48

 

Time Deposits (6)

182,283

 

 

1,416

 

 

1.57

 

 

210,648

 

 

2,018

 

 

1.93

 

Total Interest-Bearing Deposits (6)

891,833

 

 

1,774

 

 

0.40

 

 

846,763

 

 

2,986

 

 

0.71

 

Short-Term Borrowings

 

 

 

 

 

 

 

 

 

 

 

Securities Sold Under Agreements to Repurchase

45,232

 

 

47

 

 

0.21

 

 

32,592

 

 

84

 

 

0.52

 

Other Borrowings

6,597

 

 

76

 

 

2.32

 

 

11,890

 

 

132

 

 

2.23

 

Total Interest-Bearing Liabilities

943,662

 

 

1,897

 

 

0.41

 

 

891,245

 

 

3,202

 

 

0.72

 

Noninterest-Bearing Demand Deposits

368,318

 

 

 

 

 

 

289,621

 

 

 

 

 

Other Liabilities

8,433

 

 

 

 

 

 

9,306

 

 

 

 

 

Total Liabilities

1,320,413

 

 

 

 

 

 

1,190,172

 

 

 

 

 

Stockholders' Equity

134,955

 

 

 

 

 

 

152,602

 

 

 

 

 

Total Liabilities and Stockholders' Equity

$

1,455,368

 

 

 

 

 

 

$

1,342,774

 

 

 

 

 

Net Interest Income (FTE) (Non-GAAP)

 

 

20,000

 

 

 

 

 

 

20,967

 

 

 

Net Interest-Earning Assets (1)

424,061

 

 

 

 

 

 

337,913

 

 

 

 

 

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

 

 

 

 

2.82

%

 

 

 

 

 

3.23

%

Net Interest Margin (FTE) (Non-GAAP) (3)

 

 

 

 

2.95

 

 

 

 

 

 

3.43

 

(1)  

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

(2)  

Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3)  

Net interest margin represents net interest income divided by average total interest-earning assets.

(4)  

Annualized

(5)  

Includes loans held for sale

(6)  

Includes deposits held for sale

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

 

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

 

6/30/21

6/30/20

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss) Income (GAAP)

$

(223)

 

$

2,845

 

$

3,079

 

$

(17,395)

 

$

2,903

 

 

$

2,622

 

$

3,676

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

 

 

 

 

 

 

(Gain) Loss on Sale of Securities

(11)

 

(447)

 

(213)

 

59

 

(517)

 

 

(458)

 

(79)

 

(Gain) Loss on Disposal of Fixed Assets

3

 

 

13

 

65

 

 

 

3

 

(17)

 

Tax effect

2

 

94

 

42

 

(26)

 

109

 

 

96

 

20

 

 

 

 

 

 

 

 

 

 

Non-Cash Charges:

 

 

 

 

 

 

 

 

Intangible Assets and Goodwill Impairment

1,178

 

 

 

18,693

 

 

 

1,178

 

 

Writedown on Fixed Assets

2,268

 

 

240

 

884

 

 

 

2,268

 

 

Tax Effect

 

 

(42)

 

(338)

 

 

 

 

 

Adjusted Net Income (Non-GAAP)

$

3,217

 

$

2,492

 

$

3,119

 

$

1,942

 

$

2,495

 

 

$

5,709

 

$

3,600

 

 

 

 

 

 

 

 

 

 

Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding

5,432,234

 

5,436,881

 

5,406,068

 

5,395,342

 

5,393,770

 

 

5,438,401

 

5,423,770

 

 

 

 

 

 

 

 

 

 

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

$

(0.04)

 

$

0.52

 

$

0.57

 

$

(3.22)

 

$

0.54

 

 

$

0.48

 

$

0.68

 

 

 

 

 

 

 

 

 

 

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

$

0.59

 

$

0.46

 

$

0.58

 

$

0.36

 

$

0.46

 

 

$

1.05

 

$

0.66

 

 

 

 

 

 

 

 

 

 

Net (Loss) Income (GAAP) (Numerator)

$

(223)

 

$

2,845

 

$

3,079

 

$

(17,395)

 

$

2,903

 

 

$

2,622

 

$

3,676

 

 

 

 

 

 

 

 

 

 

Annualization Factor

4.01

 

4.06

 

3.98

 

3.98

 

4.02

 

 

2.02

 

2.01

 

 

 

 

 

 

 

 

 

 

Average Assets (Denominator)

1,485,664

 

1,424,732

 

1,412,848

 

1,413,130

 

1,378,162

 

 

1,455,368

 

1,342,774

 

 

 

 

 

 

 

 

 

 

Return on Average Assets (GAAP)

(0.06)

%

0.81

%

0.87

%

(4.90)

%

0.85

%

 

0.36

%

0.55

%

 

 

 

 

 

 

 

 

 

Adjusted Net Income (Non-GAAP) (Numerator)

$

3,217

 

$

2,492

 

$

3,119

 

$

1,942

 

$

2,495

 

 

$

5,709

 

$

3,600

 

 

 

 

 

 

 

 

 

 

Annualization Factor

4.01

 

4.06

 

3.98

 

3.98

 

4.02

 

 

2.02

 

2.01

 

 

 

 

 

 

 

 

 

 

Average Assets (Denominator)

1,485,664

 

1,424,732

 

1,412,848

 

1,413,130

 

1,378,162

 

 

1,455,368

 

1,342,774

 

 

 

 

 

 

 

 

 

 

Adjusted Return on Average Assets (Non-GAAP)

0.87

%

0.71

%

0.88

%

0.55

%

0.73

%

 

0.79

%

0.54

%

 

 

Three Months Ended

 

Six Months Ended

 

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

 

6/30/21

6/30/20

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss) Income (GAAP) (Numerator)

$

(223)

 

$

2,845

 

$

3,079

 

$

(17,395)

 

$

2,903

 

 

$

2,622

 

$

3,676

 

 

 

 

 

 

 

 

 

 

Annualization Factor

4.01

 

4.06

 

3.98

 

3.98

 

4.02

 

 

2.02

 

2.01

 

 

 

 

 

 

 

 

 

 

Average Equity (Denominator)

134,875

 

135,037

 

134,093

 

153,328

 

152,682

 

 

134,955

 

152,602

 

 

 

 

 

 

 

 

 

 

Return on Average Equity (GAAP)

(0.66)

%

8.54

%

9.13

%

(45.13)

%

7.65

%

 

3.92

%

4.84

%

 

 

 

 

 

 

 

 

 

Adjusted Net Income (Non-GAAP) (Numerator)

$

3,217

 

$

2,492

 

$

3,119

 

$

1,942

 

$

2,495

 

 

$

5,709

 

$

3,600

 

 

 

 

 

 

 

 

 

 

Annualization Factor

4.01

 

4.06

 

3.98

 

3.98

 

4.02

 

 

2.02

 

2.01

 

 

 

 

 

 

 

 

 

 

Average Equity (Denominator)

134,875

 

135,037

 

134,093

 

153,328

 

152,682

 

 

134,955

 

152,602

 

 

 

 

 

 

 

 

 

 

Adjusted Return on Average Equity (Non-GAAP)

9.57

%

7.48

%

9.25

%

5.04

%

6.57

%

 

8.53

%

4.74

%

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.

 

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

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

 

 

 

 

 

 

 

 

 

 

 

Assets (GAAP)

$

1,461,613

 

$

1,476,821

 

$

1,416,720

 

$

1,392,876

 

$

1,407,152

 

Goodwill and Intangible Assets, Net

(15,918)

 

(17,599)

 

(18,131)

 

(18,663)

 

(37,888)

 

Tangible Assets (Non-GAAP) (Numerator)

$

1,445,695

 

$

1,459,222

 

$

1,398,589

 

$

1,374,213

 

$

1,369,264

 

 

 

 

 

 

 

Stockholders' Equity (GAAP)

$

132,536

 

$

133,776

 

$

134,530

 

$

133,299

 

$

152,392

 

Goodwill and Intangible Assets, Net

(15,918)

 

(17,599)

 

(18,131)

 

(18,663)

 

(37,888)

 

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

$

116,618

 

$

116,177

 

$

116,399

 

$

114,636

 

$

114,504

 

 

 

 

 

 

 

Stockholders’ Equity to Assets (GAAP)

9.1

%

9.1

%

9.5

%

9.6

%

10.8

%

Tangible Common Equity to Tangible Assets (Non-GAAP)

8.1

%

8.0

%

8.3

%

8.3

%

8.4

%

 

 

 

 

 

 

Common Shares Outstanding (Denominator)

5,409,077

 

5,434,374

 

5,434,374

 

5,398,712

 

5,393,712

 

 

 

 

 

 

 

Book Value per Common Share (GAAP)

$

24.50

 

$

24.62

 

$

24.76

 

$

24.69

 

$

28.25

 

Tangible Book Value per Common Share (Non-GAAP)

$

21.56

 

$

21.38

 

$

21.42

 

$

21.23

 

$

21.23

 

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

 

Three Months Ended

 

Six Months Ended

 

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

 

6/30/21

6/30/20

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income (GAAP)

$

10,820

 

$

10,988

 

$

11,755

 

$

11,656

 

$

11,727

 

 

$

21,808

 

$

24,056

 

Adjustment to FTE Basis

43

 

40

 

45

 

53

 

59

 

 

89

 

113

 

Interest Income (FTE) (Non-GAAP)

10,863

 

11,028

 

11,800

 

11,709

 

11,786

 

 

21,897

 

24,169

 

Interest Expense (GAAP)

886

 

1,011

 

1,121

 

1,240

 

1,406

 

 

1,897

 

3,202

 

Net Interest Income (FTE) (Non-GAAP)

$

9,977

 

$

10,017

 

$

10,679

 

$

10,469

 

$

10,380

 

 

$

20,000

 

$

20,967

 

 

 

 

 

 

 

 

 

 

Net Interest Rate Spread (GAAP)

2.72

%

2.91

%

3.07

%

3.03

%

3.10

%

 

2.81

%

3.22

%

Adjustment to FTE Basis

0.02

 

0.01

 

0.01

 

0.02

 

0.02

 

 

0.01

 

0.01

 

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

2.74

 

2.92

 

3.08

 

3.05

 

3.12

 

 

2.82

 

3.23

 

 

 

 

 

 

 

 

 

 

Net Interest Margin (GAAP)

2.84

%

3.04

%

3.21

%

3.19

%

3.28

%

 

2.94

%

3.41

%

Adjustment to FTE Basis

0.01

 

0.01

 

0.01

 

0.02

 

0.02

 

 

0.01

 

0.02

 

Net Interest Margin (FTE) (Non-GAAP)

2.85

 

3.05

 

3.22

 

3.21

 

3.30

 

 

2.95

 

3.43

 

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

 

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

 

6/30/21

6/30/20

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

$

13,722

 

$

9,395

 

$

9,725

 

$

28,968

 

$

9,071

 

 

$

23,117

 

$

18,074

 

 

 

 

 

 

 

 

 

 

Net Interest and Dividend Income (GAAP)

9,934

 

9,977

 

10,634

 

10,416

 

10,321

 

 

19,911

 

20,854

 

 

 

 

 

 

 

 

 

 

Noninterest Income (GAAP)

2,219

 

3,174

 

2,778

 

2,173

 

2,648

 

 

5,393

 

4,520

 

Operating Revenue (GAAP)

12,153

 

13,151

 

13,412

 

12,589

 

12,969

 

 

25,304

 

25,374

 

Efficiency Ratio (GAAP)

112.91

%

71.44

%

72.51

%

230.11

%

69.94

%

 

91.36

%

71.23

%

 

 

 

 

 

 

 

 

 

Noninterest expense (GAAP)

$

13,722

 

$

9,395

 

$

9,725

 

$

28,968

 

$

9,071

 

 

$

23,117

 

$

18,074

 

Less:

 

 

 

 

 

 

 

 

Other Real Estate Owned (Income)

(26)

 

(38)

 

(39)

 

(12)

 

(1)

 

 

(64)

 

(18)

 

Amortization of Intangible Assets

503

 

532

 

532

 

532

 

532

 

 

1,035

 

1,064

 

Intangible Assets and Goodwill Impairment

1,178

 

 

 

18,693

 

 

 

1,178

 

 

Writedown on Fixed Assets

2,268

 

 

240

 

884

 

 

 

2,268

 

 

Adjusted Noninterest Expense (Non-GAAP)

$

9,799

 

$

8,901

 

$

8,992

 

$

8,871

 

$

8,540

 

 

$

18,700

 

$

17,028

 

 

 

 

 

 

 

 

 

 

Net Interest and Dividend Income (GAAP)

9,934

 

9,977

 

10,634

 

10,416

 

10,321

 

 

19,911

 

20,854

 

Noninterest Income (GAAP)

2,219

 

3,174

 

2,778

 

2,173

 

2,648

 

 

5,393

 

4,520

 

Less:

 

 

 

 

 

 

 

 

Net Gain (Loss) on Securities

11

 

447

 

213

 

(59)

 

517

 

 

458

 

79

 

Net (Loss) Gain on Disposal of Fixed Assets

(3)

 

 

(13)

 

(65)

 

 

 

(3)

 

17

 

Adjusted Noninterest Income (Non-GAAP)

2,211

 

2,727

 

2,578

 

2,297

 

2,131

 

 

4,938

 

4,424

 

Adjusted Operating Revenue (Non-GAAP)

12,145

 

12,704

 

13,212

 

12,713

 

12,452

 

 

24,849

 

25,278

 

Adjusted Efficiency Ratio (Non-GAAP)

80.68

%

70.06

%

68.06

%

69.78

%

68.58

%

 

75.25

%

67.36

%

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.

 

6/30/21

3/31/21

12/31/20

9/30/20

6/30/20

(Dollars in thousands) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Allowance for Loan Losses

$

11,544

 

$

12,725

 

$

12,771

 

$

13,780

 

$

12,648

 

 

 

 

 

 

 

Total Loans

1,007,446

 

$

1,041,697

 

1,044,753

 

$

1,050,885

 

$

1,042,159

 

PPP Loans

(49,525)

 

(60,380)

 

(55,096)

 

(71,028)

 

(70,028)

 

Total Loans, Excluding PPP Loans (Non-GAAP)

$

957,921

 

$

981,317

 

$

989,657

 

$

979,857

 

$

972,131

 

 

 

 

 

 

 

Allowance for Loan Losses to Total Loans, Excluding

PPP Loans (Non-GAAP)

1.21

%

1.30

%

1.29

%

1.41

%

1.30

%

 

Contacts

Company Contact:

John H. Montgomery

President and Chief Executive Officer

Phone: (724) 225-2400



Investor Relations:

Adam Prior, Senior Vice President

The Equity Group Inc.

Phone: (212) 836-9606

Email: aprior@equityny.com

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