Cb Financial Services, Inc. · NASDAQ:CBFV
Cb Financial Services — Investor Presentation (April 2022)
49 slides from Cb Financial Services's investor presentation, April 2022
Slide 1: Investor Presentation April 2022
Investor Presentation April 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 are subject to significant risks a
Slide 3: Company Overview
Company Overview
Slide 4: At a Glance – CB Financial Services, Inc.
At a Glance – CB Financial Services, Inc. Corporate Overview • Community Bank headquartered in Southwestern PA • Founded in 1901 • Community Bank operates 11 offices in Greene, Allegheny, Washington, Fayette, and Westmoreland Counties in southwestern Pennsylvania, and three offices in Marshall and O
Slide 5: Our Enduring Purpose
Our Enduring Purpose MISSION: We partner with individuals, businesses and communities to realize their dreams, protect their financial futures and improve their lives CORE VALUES: Take care of each other / Always do the right thing / Protect the Bank / Work hard to achieve our goals / Give and expec
Slide 6: Investment Thesis: Well-Positioned to Achieve Better than Peer Results
Investment Thesis: Well-Positioned to Achieve Better than Peer Results Market Presence with Brand Solid Fundamental Leadership Blending Efficiency with Recognition Technology ◦ 120 Year History ◦ Executive team with an average of ◦ Optimization efforts implemented over 25 years experience in in 2020
Slide 7: Diversified Business
Diversified Business Retail Mortgage Commercial Banking Insurance Brokerage Banking Banking ◦ Well-positioned to ◦ Currently operating in ◦ Active mortgage ◦ Provides relatively serve the needs of Southwestern PA, origination platform uncorrelated source of small and medium- Central WV, Ohio with de
Slide 8: Leveraging a Rich History and Community Presence
Leveraging a Rich History and Community Presence Implementation of Branch Network Global Strategic Investing in Growth to The Beginning and Formation of the Bank Supporting Pandemic Initiatives Aimed SW Pennsylvania, Accelerates Position Community at Optimizing Bank for the Future WV, and OH Need fo
Slide 9: Attractive Operating Markets ~ New Infrastructure
Attractive Operating Markets ~ New Infrastructure Pittsburgh Metropolitan Area Large Employers in Operating Area Opening of Southern Beltway from I-79 in Washington ▪ Population of approximately 2.4 million with a median household County to Pittsburgh income of nearly $64,000, which is projected to
Slide 10: Executive Leadership Team
Executive Leadership Team John Montgomery Jamie Prah ◦ President & CEO; appointed in August 2020 ◦ Executive Vice President & Chief Financial Officer ◦ Accomplished bank executive with over 30 years of ◦ 20+ years of banking experience with 9 years in CEO/CFO experience role ◦ Previously Chief Credi
Slide 11: Leadership Additions to Drive Growth
Leadership Additions to Drive Growth Alan Bicker Bruce Sharp ◦ Executive Vice President, Chief Consumer Banking Officer. ◦ Executive Vice President, Chief Commercial Banking ◦ Appointed in March 2022. Officer. ◦ Responsibilities include all retail bank operations, marketing, ◦ Appointed in February
Slide 12: 2022 Update
2022 Update
Slide 13: 2022: Key Accomplishments and Initiatives
2022: Key Accomplishments and Initiatives Completed Stock Buyback Plan – On June 10, 2021, CB authorized a program to repurchase up to $7.5 million of the Company's outstanding common stock – Completed the repurchase program on February 15, 2022 with 308,996 shares of the Company's common stock repu
Slide 14: First Quarter 2022 Recap
First Quarter 2022 Recap Reported Adjusted Adjusted Financial Performance During Optimization Efforts Reported (non-GAAP) (non-GAAP)1 Loans and NI $3.0M $3.1M Net Income (NI) Book Value Deposits Q1 2022 net income Total loans as of EPS $0.58 $0.59 (GAAP) was $3.0M, or Book value per share was March
Slide 15: Increasing Efficiency In Our Branch Network
Increasing Efficiency In Our Branch Network $1,350,000 $100,000 Branch Optimization Efforts Yielding $90,000 Results $1,300,000 $87,615 $89,308 $80,000 $79,757 $80,488 ◦ Reduced overall branch $1,250,000 $70,000 locations from 23 to 14 over the past 7 quarters $60,000 $1,200,000 $58,385 ◦ Gaining tr
Slide 16: Revenue Generating Initiatives
Revenue Generating Initiatives GOAL: Leverage strong brand recognition and lending relationships to support organic loan growth and enhance revenue generating potential in CB’s core markets As part of optimization initiatives and following COVID-19, we have been more selective on growing new loans w
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 $249,528 $245,865 ▪ Total Interest and $240,000 Dividend Income, plus Insurance Commissions, $220,000 $208,853 continue to grow $200,000 ▪ Completion of $183,024 optimi
Slide 18: Building on Core Strengths
Building on Core Strengths • Empower our experienced, high-quality employees to provide superior customer service in all aspects of our business ◦ Net Promoter Score of 45 vs. a banking industry average of 34 (higher number represents an increasingly satisfied customer base)1 • Create a sales and se
Slide 19: Evaluating Market Changes ~ Need to Adapt
Evaluating Market Changes ~ Need to Adapt 0% Historically Low Rates Changing Consumer Disruption by Technology Behavior and FinTech Creates NIM Pressures on All Banks Requirements for Online and Mobile Delivery Instant Service to of Services is Essential Fulfill Expectations (One Click) CB Financial
Slide 20: Financial Update – Q1 2022
Financial Update – Q1 2022 2019 FY 2020 FY 2021 FY Q1 2021 Q1 2022 ($000s except per share) 12/31/19 12/31/20 12/31/21 3/31/21 3/31/22 • Diluted EPS (GAAP) for Q1 2022 was $0.58, compared to $0.52 in the prior year period Balance Sheet Total Assets $1,321,537 $1,416,720 $1,425,479 $1,476,821 $1,438,
Slide 21: Key Financial Metrics
Key Financial Metrics
Slide 22: Operating Initiatives Have Led to Consistent Growth with a High-Quality Balance Sheet
Operating Initiatives Have Lead to Consistent Growth with a High-Quality Balance Sheet Total Assets $1,600 ◦ Continuing to drive organic loan growth without $1,416.7 $1,425.5 $1,438.7 sacrificing credit underwriting standards $1,400 $1,321.5 $1,281.7 ◦ Providing personalized customer engagement that
Slide 23: 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 March 31, 2022) $1,044.8 Other 1.0% $1,020.8 $1,020.6 Commercial & $1,000.0 Consumer Industrial 6.6% $952.8 14.1% Real Estate- $912.9 Construction $900.0 5.3% ($ in millions) $800.0 Real Estate
Slide 24: Industry CRE Portfolio
Industry CRE Portfolio Owner Occupied CRE Loans by Industry – $92.0M Non-Owner Occupied CRE Loans by Industry – $335.3M Office Space Office Space Warehouse Space Warehouse Space 11.0% 10.5% 15.7% 12.2% Medical Facilities Manufacturing 7.0% 7.1% Manufacturing Senior Housing 5.8% 6.9% Other Non-Farm/N
Slide 25: Industry C&I Portfolio
Industry C&I Portfolio C&I Loans by Industry – $59.6M excl. PPP Oil and Gas 7% Educational Services 6% Wholesale Trade 7% Health Care and Social Assistance 5% Transportation and Warehousing Finance and Insurance 4% 7% Retail Trade 4% Utilities 2% Senior Housing Other Services 7% 2% Other C&I Industr
Slide 26: Total Deposits and Deposit Composition
Total Deposits and Deposit Composition Total Deposits Deposit Composition $1,400 (as of March 31, 2022) $1,300 $1,250.3 $1,226.6 $1,200 Time Deposits 10.3% $1,118.4 $1,100 $1,086.7 Non-Interest Bearing Demand S Deposits ($ in millions) $1,000 a 32.0% v i $900 n g s $800 $773.3 A $698.2 c $700 $679.3
Slide 27: Asset Quality Trends
Asset Quality Trends Non-Current Loans/Total Loans NCOs (Recoveries)/Average Loans 1.40% 1.26% 0.20% 1.20% 0.15% 1.03% 1.00% 0.10% 0.85% 0.80% 0.05% 0.03% 0.02% (0.01)% (0.01)% 0.52% (0.01)% 0.60% 0.49% 0.00% 0.40% (0.05)% 03/31/21 06/30/21 09/30/21 12/31/21 03/31/22 Q1 2021 Q2 2021 Q3 2021 Q4 2021
Slide 28: Revenue Diversification
Revenue Diversification • Noninterest income sources comprised approximately 19.8% of total operating revenue during Q1 2022; provides stable revenue stream • Q4 2021 Non interest income included $5.2 million from the sale of branches as part of optimization initiative Q1 2022 - Noninterest Income M
Slide 29: Net Income and Adjusted Net Income – Last 5 Quarters
Net Income (Loss) and Adjusted Net Income(1) – Last 5 Quarters Net Income (Loss) Adjusted Net Income (1) $ in 000's $ in 000's $8,000 $8,000 $6,965 $6,000 $6,000 $4,000 $4,000 $3,217 $3,047 $3,059 $2,845 $2,843 $2,492 $1,983 $1,966 $2,000 $2,000 $0 $0 $(223) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q
Slide 30: 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 0.75 0.75 0.58 0.59 0.59 0.52 0.53 0.50 0.50 0.46 0.37 0.36 0.25 0.25 0.00 0.00 (0.04) (0.25) (0.25) Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 2021 Q2 2021 Q3 20
Slide 31: Net Interest Margin (FTE)
Net Interest Margin (FTE)(1) 4.50% 4.00% 3.50% 3.36% 3.32% 3.11% 3.11% 3.17% 3.00% 3.05% 3.10% 2.89% 2.96% 2.85% 2.50% 2.00% 1.50% 1.00% 0.44% 0.37% 0.50% 0.33% 0.31% 0.33% 0.00% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Yield on Earning Assets Net Interest Margin Cost of Funds (1) Net Interest Margin
Slide 32: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio(1) 85.00% 80.68% 80.00% 77.27% 75.00% 70.00% 69.73% 70.06% 65.88% 65.00% 60.00% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 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 33: Adjusted ROAA and Adjusted ROAE
Adjusted Return on Average Assets – ROAA(1) Adjusted Return on Average Equity – ROAE(1) 1.00% 12.00% 0.90% 0.87% 0.87% 10.00% 0.80% 9.57% 9.54% 0.76% 0.70% 0.71% 8.55% 8.00% 7.48% 0.60% 0.53% 0.50% 6.00% 5.88% 0.40% 4.00% 0.30% 0.20% 2.00% 0.10% 0.00% 0.00% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1
Slide 34: Strong Capital Ratios (Community Bank)
Strong Capital Ratios (Community Bank) December 31, 2020 December 31, 2021 March 31, 2022 14.00% 13.04% 13.18% 13.20% 12.00% 11.79% 11.95% 11.99% 11.79% 11.95% 11.99% 10.00% 8.19% 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 Assets)
Slide 35: 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 36: Moving Forward – Building a Stronger Community
Investing for the Future Adaptive to New Consumer Expectations Moving Forward – Building a Stronger Community Engaging with Loyal Customers and Winning New Ones
Slide 37: Contact Information
Contact Information Company Contact: John H. Montgomery President and Chief Executive Officer Phone: (724) 225-2400 Investor Relations Jeremy Hellman, CFA NASDAQ Global Market: CBFV Phone: (212) 836-9626 100 N. Market Street Email: jhellman@equityny.com Carmichaels, PA 15320 Phone: 724-966-5041 Fax:
Slide 38: Appendix
Appendix
Slide 39: Selected Consolidated Financial Information
Selected Consolidated Financial Information (Dollars in thousands) (Unaudited) Selected Financial Condition Data 3/31/22 12/31/21 9/30/21 6/30/21 3/31/21 ASSETS Cash and Due From Banks $ 123,588 $ 119,674 $ 173,523 $ 172,010 $ 230,000 Securities 231,097 224,974 221,351 208,472 142,156 Loans Held for
Slide 40: Selected Consolidated Financial Information
Selected Consolidated Financial Information (Dollars in thousands) (Unaudited) Three Months Ended Selected Operating Data 03/31/22 12/31/21 09/30/21 06/30/21 03/31/21 Interest and Dividend Income Loans, Including Fees 9,551 9,904 9,718 9,936 10,146 Securities: Taxable 905 866 843 635 646 Tax-Exempt
Slide 41: Per Common Share Data
Per Common Share Data Three Months Ended Per Common Share Data 3/31/22 12/31/21 9/30/21 6/30/21 3/31/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 Earnings (Loss) Per Common Share - Basic 0.59 1.32 0.37 (0.04) 0.52 Earnings (Loss) Per Common Share - Diluted 0.58 1.31 0.37 (0.04) 0
Slide 42: Selected Financial Ratios/Asset Quality Ratios/Capital Ratios
Selected Financial Ratios/Asset Quality Ratios/Capital Ratios Three Months Ended Selected Financial Ratios (2) 3/31/22 12/31/21 9/30/21 6/30/21 3/31/21 Return on Average Assets 0.87 % 1.87 % 0.54 % (0.06)% 0.81 % Adjusted Return on Average Assets (Non-GAAP) (1) 0.87 0.76 0.53 0.87 0.71 Return on Ave
Slide 43: Average Balances and Yields
Average Balances and Yields Three Months Ended March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Balance Dividends Cost (1)
Slide 44: Non-GAAP: Adjusted Net Income, Adjusted EPS, Adjusted ROAA and ROAE
Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS, Adjusted ROAA and Adjusted ROAE Three Months Ended 3/31/22 12/31/21 9/30/21 6/30/21 3/31/21 (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended 3/31/22 12/31/21 9/30/21 6/30/21 3/31/21 Net Income (Loss
Slide 45: Non-GAAP: 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 3/31/22 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands, except share and per share data) Stockholders' Equity (GAAP) $ 122,156 $ 133,124
Slide 46: Non-GAAP: Return on Average Tangible Common Equity
Non-GAAP Financial Measures: Return on Average Tangible Common Equity Three Months Ended Full Year 3/31/22 3/31/21 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Net Income (Loss) (GAAP) $ 3,047 $ 2,845 $ 11,570 $ (10,640) $ 14,327 $ 7,052 Amortization of Intangible Assets, Net 445 532 1
Slide 47: Non-GAAP: 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 3/31/22 12/31/21 9/30/21 6/30/21 3/31/21 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Interest Income per Consolidated Statement of Income (GAAP) $ 10,616 $ 10,963 $ 1
Slide 48: Non-GAAP: Adjusted Efficiency Ratio
Non-GAAP Financial Measures: Adjusted Efficiency Ratio Three Months Ended Full Year 3/31/22 12/31/21 9/30/21 6/30/21 3/31/21 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Efficiency Ratio (GAAP) Noninterest expense (GAAP) $ 8,656 $ 9,972 $ 9,773 $ 13,722 $ 9,395 $ 42,862 $ 56,767 $ 34,9
Slide 49: Non-GAAP: 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 3/31/22 3/31/21 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Net Income (Loss) Before Income Tax Expense (Benefit) (GAAP) $ 3,850 $ 3,756 $ 14,695 $ (9,392) $ 16,056 $ 8,590 Provisi
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