Cb Financial Services, Inc. · NASDAQ:CBFV
Cb Financial Services — Investor Presentation (October 2022)
60 slides from Cb Financial Services's investor presentation, October 2022
Slide 1: CB Financial Services Investor Presentation October 2022
th Financial Services, Inc. INVESTOR PRESENTATION | OCTOBER 2022
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Statements contained in this investor presentation 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 ar
Slide 3: Mission Statement
Mission Statement “ We partner with individuals, businesses and communities to realize their dreams, protect their “ financial futures and improve their lives CB Financial Services, Inc. (Nasdaq: CBFV) October 2022 Page 3
Slide 4: Investment Summary
Investment Summary Market Presence with Brand Recognition Seasoned Executive Serving Stable Southwestern PA & Leadership Ohio River Valley markets Proven experience through all economic cycles Rewarding Shareholders Stable quarterly dividend and active share repurchase program Deploying Technology t
Slide 5: Corporate Overview
Corporate Overview Headquartered in Southwestern, Pennsylvania Founded in 1901 Community Bank (the "Bank"), the wholly-owned subsidiary of CB Financial Services, Inc. operates eleven offices providing a wide range of banking services in Greene, Allegheny, Washington, Fayette, and Westmoreland Counti
Slide 6: Share / Trading Information
Share / Trading Information CBFV Share Price $20.98 Shares Outstanding 5.1M Public Float 4.7M Market Cap 107.2M Total Stockholders' Equity $106.7M Book Value per Common Share $20.94 Tangible Book Value per Common Share (1) $18.25 Price to Book Value 1.04x Price to Tangible Book Value (1) 1.19x P/E L
Slide 7: Diversified Business
Diversified Business ▪ Well-positioned to serve the needs of small and medium-sized businesses across our footprint Commercial Banking ▪ Growing presence within the Pittsburgh MSA ▪ Strong asset quality ▪ Branch optimization completed in 2021 Retail Banking ▪ Currently operating in Southwestern PA a
Slide 8: Attractive Operating Market
Attractive Operating Market Pittsburgh Metropolitan Area Large, Diverse Market • 2.4 million people, including surrounding counties, with a median household income at $50,536(1) • Large market for energy, healthcare, technology, and manufacturing companies Large Employers in Operating Area • Fortune
Slide 9: Revenue Generating Initiatives
Revenue Generating Initiatives 2H 2021 PHASES ACTION • Efficiency in indirect auto loan process while not sacrificing credit ONGOING COMMUNICATION LENDING quality INITIATIVES • Leveraged CB’s 120th anniversary to generate awareness GOAL: Leverage strong brand recognition and lending 1H 2022 • Added
Slide 10: Executive Leadership Team
Executive Leadership Team John Montgomery Ralph Burchianti Jamie Prah Jennifer George President & CEO since August 2020 Senior Executive Vice President & Chief Executive Vice President & Chief Senior Executive Vice President & Previously Chief Credit Officer at First Credit Officer, Director since 2
Slide 11: Strong Q3 Performance
Strong Q3 Performance
Slide 12: Q3 2022 – Highlights of the Quarter
Q3 2022 – Highlights of the Quarter Strong quarterly performance, driven by operating leverage and strategic initiatives driving financial results Financial Performance Balance Sheet Strength Improvement in Multiple Key Metrics(1) Loan momentum and Capital redeployment to shareholders continues • Ne
Slide 13: Financial Update – Q3 2022
Financial Update – Q3 2022 2019 FY 2020 FY 2021 FY Q3 2021 Q3 2022 ($000s except per share) 12/31/19 12/31/20 12/31/21 9/30/21 9/30/22 • Diluted EPS (GAAP) for Q3 2022 was $0.77, compared to $0.37 in the prior year period Balance Sheet Total Assets $1,321,537 $1,416,720 $1,425,479 $1,474,818 $1,425,
Slide 14: Quarterly Loan Growth excluding PPP loans
Quarterly Loan Growth excluding PPP loans Quarter End Loan Balances $1,100 $1,050 $1,042 $1,024 $1,012 $996 $1,000 $969 $950 Period ended balances excluding PPP loans were $1.04 billion at in millions $900 September 30, 2022 compared to $968.9 $850 million at September 30, 2021, an increase of 7.6%.
Slide 15: Core Earnings Growth
Core Earnings(1) Growth $5,000 $4,417 $4,000 $3,927 $3,449 $3,460 $3,297 $3,164 $3,024 $3,059 $3,000 $3,005 After completion of the branch $2,729 in thousands optimization in June 2021, there has been continuous growth in core earnings from $2,000 $2.7 million to $4.4 million in the three months end
Slide 16: Driving Margins by Controlling Costs
Driving Margins by Controlling Costs
Slide 17: Revenue Metrics Benefiting from Optimization Efforts
Revenue Metrics Benefiting from Optimization Efforts Improving Returns on Revenue per Full-time Employee Our Human Capital $260,000 $258,995 $245,865 ▪ Total Interest and $240,000 Dividend Income, plus Insurance $220,000 Commissions, $208,853 continue to grow $200,000 ▪ Completion of $183,024 optimi
Slide 18: Increasing Efficiency In Our Branch Networks
Increasing Efficiency In Our Branch Networks $1,350,000 $100,000 Branch Optimization Efforts Yielding $90,000 $1,300,000 $91,131 Results $87,615 $89,308 $86,799 $80,000 $79,757 $80,488 $1,250,000 ◦ Reduced overall branch $70,000 locations from 22 to 14 over the past 7 quarters $60,000 $ in thousands
Slide 19: Favorable Cost of Deposits
Favorable Cost of Deposits CB Has Maintained a Lower Average Cost of Deposits Versus Peers* Through the Most Recent Cycle 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2018 2019 2020 2021 Q1 2022 Q2 2022 CB Peers Avg Fed Funds Rate * Peers include public and private Pennsylvania banks with total assets of $1
Slide 20: Non-Interest Bearing Deposit Market Advantage
Non-Interest Bearing Deposit Market Advantage CB Has Maintained a Higher Non-Interest Bearing Deposit Compared to Peers Average* Through the Most Recent Cycle 35% 30% 25% 20% 15% 10% 2018 2019 2020 2021 1H 2022 CB Peers * Peers include public and private Pennsylvania banks with total assets of $1 bi
Slide 21: Operating Leverage Benefiting From Optimization
Operating Leverage Benefiting From Optimization $15,000 $12,500 $10,000 Total income is increasing while total in thousands $7,500 expenses remain flat over the prior 5 quarters, producing positive operating $5,000 leverage. $2,500 $— Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Core Income (1) Core Expe
Slide 22: Credit Insights
Credit Insights
Slide 23: Attractive Operating Markets ~ Less Recessionary Impact During Last Recession
Attractive Operating Markets ~ Less Recessionary Impact During Last Recession Home Prices and Unemployment in the Pittsburgh MSA Compared Favorably with Pennsylvania and National Average CB Financial Services, Inc. (Nasdaq: CBFV) October 2022 Page 23
Slide 24: Diversified Commercial Book Reduces Recession Sensitivity
Diversified Commercial Book Reduces Recession Sensitivity Credit Breakdown by Industry Senior Housing ▪ No loans are in deferral as of 9/30/2022 Office Space 8.5% 19.1% Hotels ▪ Exposure includes categories of CRE, 5.5% Construction CRE, and C&I loans Oil and Gas 3.2% Restaurants 1.2% Total % of Out
Slide 25: Indirect Auto Lending Supported by Prime Borrower Relationships
Indirect Auto Lending Supported by Prime Borrower Relationships Borrower Credit Score Bands Key Takeaways: > 800 • Indirect Auto represents 13.4% of our total 46.2% loan portfolio • Within Indirect Auto, 46.2% of loans are to borrowers with FICO scores of 800 or better at the time of underwriting •
Slide 26: Residential Real Estate Segment Characterized by Conservative LTVs
Residential Real Estate Segment Characterized by Conservative Loan to Value (LTVs) Borrower Loan to Value Bands Key Takeaways: > 100% 0.3% • Mortgage loans represent 30.2% of our total loan portfolio 90% - 99% 6.5% • Within our mortgage book, 26.8% of loans 80% - 89% < 50% carried an LTV of less tha
Slide 27: Returning Capital to Shareholders
Returning Capital to Shareholders
Slide 28: Shareholder Friendly Programs
Shareholder Friendly Programs Strong Capital Position Allows us to Maintain Shareholder-friendly Initiatives Completed $7.5 million repurchase program in Despite an Economic Uncertainty February 2022 308,996 Total Shares Average Cost $24.27 Community Bank has paid a regular quarterly dividend of $0.
Slide 29: Q3 2022 Update
Q3 2022 Update CB Financial Services, Inc. (Nasdaq: CBFV) October 2022 Page 29
Slide 30: Key Financial Metrics
Key Financial Metrics
Slide 31: Operating Initiatives Have Led to a High-Quality Balance Sheet
Operating Initiatives Have Led to a High-Quality Balance Sheet Total Assets $1,600 ◦ Continuing to focus on credit underwriting $1,416.7 $1,425.5 $1,425.9 standards $1,400 $1,321.5 ◦ Providing personalized customer engagement that leads to repeat and referral business $1,200 ($ in millions) ◦ Focusi
Slide 32: Loan Growth Trend and CRE Loan Composition
Loan Growth Trend and CRE Loan Composition Total Loans Expertise in Commercial Real Estate $1,100.0 (as of September 30, 2022) $1,044.8 $1,042.9 Other 1.9% $1,020.8 Commercial & $1,000.0 Consumer 14.4% Industrial 6.0% $952.8 Real Estate- Construction 4.7% $900.0 ($ in millions) $800.0 $700.0 Real Es
Slide 33: Industry CRE Portfolio
Industry CRE Portfolio Owner Occupied CRE Loans by Industry – $100.2M Non-Owner Occupied CRE Loans by Industry – $332.3M Warehouse Space Office Space 13.5% Warehouse Space 11.2% Office Space 14.5% 12.7% Manufacturing 7.7% Medical Facilities Other Non-Farm/Non- 6.5% Residential Senior Housing 17.5% 5
Slide 34: Industry C&I Portfolio
Industry C&I Portfolio C&I Loans by Industry – $61.4M excl. PPP Wholesale Trade Finance and Insurance 5.3% 5.1% Construction Educational Services 4.5% 5.9% Health Care and Social Assistance 4.3% Administrative and Support and Waste Oil and Gas Management and Remediation Services 6.1% 3.6% Transporta
Slide 35: Total Deposits and Deposit Composition
Total Deposits and Deposit Composition Total Deposits Deposit Composition (as of September 30, 2022) $1,400 $1,300 $1,275.8 $1,224.6 $1,226.6 Time Deposits $1,200 9.5% $1,118.4 $1,100 Non-Interest Bearing Savings Accounts Demand Deposits ($ in millions) $1,000 19.6% 31.9% $900 $800 $700 Money Market
Slide 36: Asset Quality Trends
Asset Quality Trends Non-Current Loans/Total Loans NCOs (Recoveries)/Average Loans 1.40% 1.01% 1.00% 1.20% 0.80% 1.00% 0.85% 0.60% 0.80% 0.52% 0.40% 0.60% 0.49% 0.38% 0.39% 0.20% 0.40% 0.03% (0.01)% (0.01)% (0.01)% 0.00% 0.20% 09/30/21 12/31/21 03/31/22 06/30/22 09/30/22 Q3 2021 Q4 2021 Q1 2022 Q2 2
Slide 37: Revenue Diversification
Revenue Diversification • Noninterest income sources comprised approximately 18.2% of total operating revenue during Q3 2022; provides stable revenue stream • Q4 2021 Non interest income included $5.2 million from the sale of branches as part of optimization initiative Total Revenue - Five Quarter T
Slide 38: Net Income and Adjusted Net Income – Last 5 Quarters
Net Income and Adjusted Net Income(1) – Last 5 Quarters Net Income Adjusted Net Income (1) $ in 000's $ in 000's $8,000 $8,000 $6,965 $6,000 $6,000 $3,929 $4,000 $4,000 $3,619 $3,047 $3,059 $2,843 $1,983 $1,966 $2,000 $2,000 $275 $118 $0 $0 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q3 2021 Q4 2021 Q1
Slide 39: EPS - Diluted and Adjusted EPS - Diluted – Last 5 Quarters
EPS - Diluted and Adjusted EPS - Diluted(1) – Last 5 Quarters EPS - Diluted Adjusted EPS - Diluted (1) 1.50 1.50 1.31 1.25 1.25 1.00 1.00 0.77 0.75 0.75 0.71 0.58 0.59 0.53 0.50 0.50 0.37 0.36 0.25 0.25 0.02 0.05 0.00 0.00 (0.25) (0.25) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q3 2021 Q4 2021 Q1 2022
Slide 40: Net Interest Margin (FTE)
Net Interest Margin (FTE)(1) 4.50% 4.00% 3.68% 3.50% 3.32% 3.37% 3.11% 3.17% 3.30% 3.00% 3.13% 3.10% 2.89% 2.96% 2.50% 2.00% 1.50% 1.00% 0.57% 0.50% 0.33% 0.31% 0.33% 0.36% 0.00% Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Yield on Earning Assets Net Interest Margin Cost of Funds (1) Net Interest Margin
Slide 41: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio(1) 85.00% 80.00% 77.27% 75.00% 70.00% 69.73% 65.88% 65.00% 64.18% 63.02% 60.00% Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 (1) Refer to Non-GAAP Financial Measures in the Appendix for the calculation of the measure and reconciliation to the most comparable GAAP measure. Effici
Slide 42: Adjusted Return on Average Assets and Equity
Adjusted Return on Average Assets – ROAA(1) Adjusted Return on Average Equity – ROAE(1) 1.10% 14.00% 1.03% 1.00% 12.53% 12.00% 0.90% 0.87% 0.80% 10.00% 0.76% 9.54% 0.70% 8.55% 8.00% 0.60% 0.53% 0.50% 6.00% 5.88% 0.40% 0.30% 4.00% 0.20% 2.00% 0.10% 0.08% 0.93% 0.00% 0.00% Q3 2021 Q4 2021 Q1 2022 Q2 2
Slide 43: Strong Capital Ratios (Community Bank)
Strong Capital Ratios (Community Bank) December 31, 2020 December 31, 2021 September 30, 2022 14.00% 13.27% 13.04% 13.18% 12.02% 12.02% 12.00% 11.79% 11.95% 11.79% 11.95% 10.00% 8.51% 8.00% 7.81% 7.76% 6.00% 4.00% 2.00% 0.00% Common Equity Tier 1 Capital (to Risk Tier 1 Capital (to Risk Weighted Ass
Slide 44: Interest Rate Risk Sensitivity
Interest Rate Risk Sensitivity • The sensitivity is measured as a percentage change in net interest income given the stated changes in interest rates compared to net interest income with rates unchanged in the same period Estimated % Change in Net Interest Income Over: 0 – 12 Months (1) 13 – 24 Mont
Slide 45: Concluding Thoughts
Concluding Thoughts ◦ Intense focus on sales and service culture which builds full relationships with our customers ◦ Utilize technology investments to enhance speed of process while improving customer experience ◦ Enhance profitability and efficiency potential while continuing to invest for future
Slide 46: Contact Information
Contact Information Company Contact John H. Montgomery President and Chief Executive Officer Phone: (724) 225-2400 NASDAQ Global Market: CBFV Investor Relations 100 N. Market Street Jeremy Hellman, CFA Carmichaels, PA 15320 Phone: (212) 836-9626 Phone: (724) 966-5041 Email: jhellman@equityny.com Fax
Slide 47: Appendix
Appendix
Slide 48: Selected Consolidated Financial Information
Selected Consolidated Financial Information (Dollars in thousands) (Unaudited) Selected Financial Condition Data 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 ASSETS Cash and Due From Banks $ 122,801 $ 81,121 $ 123,588 $ 119,674 $ 173,523 Securities 193,846 213,505 231,097 224,974 221,351 Loans Held for
Slide 49: Quarterly Income Statements
Quarterly Income Statements (Dollars in thousands) (Unaudited) Three Months Ended Nine Months Ended Selected Operating Data 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Interest and Dividend Income Loans, Including Fees $ 10,815 $ 9,733 $ 9,551 $ 9,904 $ 9,718 $ 30,098 $ 29,800 Securitie
Slide 50: Per Common Share Data
Per Common Share Data Three Months Ended Nine Months Ended Per Common Share Data 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.72 $ 0.72 Earnings Per Common Share - Basic 0.77 0.02 0.59 1.32 0.37 1.38 0.85 Earnings Per Comm
Slide 51: Selected Financial Ratios / Asset Quality Ratios / Capital Ratios
Selected Financial Ratios / Asset Quality Ratios / Capital Ratios Three Months Ended Nine Months Ended Selected Financial Ratios (2) 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 9/30/22 9/30/21 Return on Average Assets 1.12 % 0.03 % 0.87 % 1.87 % 0.54 % 0.68 % 0.42 % Adjusted Return on Average Assets (N
Slide 52: Average Balances and Yields
Average Balances and Yields Three Months Ended September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Balance Dividends Cost
Slide 53: Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS, Adjusted ROAA and Adjusted ROAE
Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS, Adjusted ROAA and Adjusted ROAE Three Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 Net Income (GAAP
Slide 54: Non-GAAP Financial Measures: Tangible Common Equity and Tangible Book Value per Share
Non-GAAP Financial Measures: Tangible Common Equity, Tangible Book Value per Share and Tangible Common Equity to Tangible Assets 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 12/31/20 12/31/19 (Dollars in thousands, except share and per share data) Stockholders' Equity (GAAP) $ 106,706 $ 113,772 $ 122,15
Slide 55: Non-GAAP Financial Measures: Return on Average Tangible Common Equity
Non-GAAP Financial Measures: Return on Average Tangible Common Equity Three Months Ended Full Year 9/30/22 9/30/21 12/31/21 12/31/20 12/31/19 (Dollars in thousands) Net Income (Loss) (GAAP) $ 3,929 $ 1,983 $ 11,570 $(10,640) $ 14,327 Amortization of Intangible Assets, Net 445 446 1,926 2,128 1,532 G
Slide 56: Non-GAAP Financial Measures: Net Interest Rate Spread (FTE) and Net Interest Margin (FTE)
Non-GAAP Financial Measures: Net Interest Rate Spread (FTE) and Net Interest Margin (FTE) Three Months Ended Full Year 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 12/31/21 12/31/20 12/31/19 (Dollars in thousands) Interest Income per Consolidated Statement of Income (GAAP) $ 12,287 $ 10,958 $ 10,616 $ 1
Slide 57: Non-GAAP Financial Measures: Adjusted Efficiency Ratio
Non-GAAP Financial Measures: Adjusted Efficiency Ratio Three Months Ended Full Year 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 12/31/21 12/31/20 12/31/19 (Dollars in thousands) Efficiency Ratio (GAAP) Noninterest expense (GAAP) $ 8,827 $ 8,410 $ 8,656 $ 9,972 $ 9,773 $ 42,862 $ 56,767 $ 34,960 Net Int
Slide 58: Non-GAAP Financial Measures: Core Earnings
Non-GAAP Financial Measures: Core Earnings (1) Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Interest Income (GAAP) $ 12,287 $ 10,958 $ 10,616 $ 10,963 $ 10,786 $ 10,820 $ 10,988 $ 11,755 $ 11,656 $ 11,727 Noninterest Income (GAAP) 2,739 2,105 2,613 8,689 2,198 2,21
Slide 59: Non-GAAP Financial Measures: Pre-Tax Pre-Provision Return on Average Assets
Non-GAAP Financial Measures: Pre-Tax Pre-Provision Return on Average Assets Three Months Ended Full Year 9/30/22 9/30/21 12/31/21 12/31/20 12/31/19 (Dollars in thousands) Net Income (Loss) Before Income Tax Expense (Benefit) (GAAP) $ 4,927 $ 2,435 $ 14,695 $ (9,392) $ 16,056 Provision for Loan Losse
Slide 60: Non-GAAP Financial Measures: Allowance for Loan Losses, Excluding PPP Loans
Non-GAAP Financial Measures: Allowance for Loan Losses, Excluding PPP Loans 9/30/22 6/30/22 3/31/22 12/31/21 9/30/21 (Dollars in thousands) Allowance for Loan Losses $ 12,854 $ 12,833 $ 11,595 $ 11,582 $ 11,581 Total Loans $1,042,942 $1,027,969 $1,020,642 $1,020,796 $1,001,599 PPP Loans (768) (3,853
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