Cb Financial Services, Inc. · NASDAQ:CBFV
Cb Financial Services — Investor Presentation (July 2022)
58 slides from Cb Financial Services's investor presentation, July 2022
Slide 1: Investor Presentation July 2022
Investor Presentation July 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 eleven offices in Greene, Allegheny, Washington, Fayette, and Westmoreland Counties in southwestern Pennsylvania, and three offices in Marshall a
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 202
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 and origination platform uncorrelated source of small and medium- Ohio River Valley wit
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 ~ Key Employers in Recession-Resistant Sectors
Attractive Operating Markets ~ Key Employers in Recession - Resistant Sectors 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
Slide 10: 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) July 2022 Page 10
Slide 11: 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 over 10 years in CEO/ experience CFO role ◦ Previously Chie
Slide 12: 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 Officer ◦ Appointed in March 2022 ◦ Appointed in February 2022 ◦ Responsibilities include all retail bank operations, marketing
Slide 13: Credit Insights
Credit Insights
Slide 14: 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 6/30/2022 Office Space 8.3% 17.4% Hotels 5.6% ▪ Exposure includes categories of CRE, Construction CRE, and C&I loans Oil and Gas 3.2% Restaurants 1.4% Total % of Out
Slide 15: Breakdown of Hospitality Exposure
Breakdown of Hospitality Exposure - Diversity Within Sector Also Reduces Sensitivity Key Takeaways: Hotels by Flag at 6/30/2022 • $17.6 million exposure located all in PA, or 1.7% of total loans at June 30, 2022 Marriott • 11 total hotel loans $4,162 23.5% Wyndham • Average loan size of $1.6 million
Slide 16: 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 17: 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 31.6% of our total loan portfolio 90% - 99% 7.0% • Within our mortgage book, 29.5% of loans 80% - 89% carried an LTV of less than 50%
Slide 18: Q2 2022 Update
Q2 2022 Update
Slide 19: 2022: First Half Key Items
2022: First Half Key Items 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 repurchased at an a
Slide 20: Second Quarter 2022 Recap
Second Quarter 2022 Recap Core Earnings Momentum Reported Adjusted (1) Net Income Loans and Book Value 1 PTPP (non-GAAP) (NI) Deposits NI $0.1M $0.3M Pre-tax, pre- Q2 2022 net income Total loans as of Book value per share provision (PTPP) net (GAAP) was $0.1M, 6/30/2022 were was $22.18 at PTPP $3.9M
Slide 21: Financial Update – Q2 2022
Financial Update – Q2 2022 2019 FY 2020 FY 2021 FY Q2 2021 Q2 2022 ($000s except per share) 12/31/19 12/31/20 12/31/21 6/30/21 6/30/22 • Diluted EPS (GAAP) for Q2 2022 was $0.02, compared to $(0.04) in the prior year period Balance Sheet Total Assets $1,321,537 $1,416,720 $1,425,479 $1,461,613 $ 1,3
Slide 22: Q2 2022 – Highlights of the Quarter
Q2 2022 – Highlights of the Quarter Financial Performance Balance Sheet Strength Improvement in Multiple Key Metrics(1) Loan momentum and Capital redeployment to shareholders continues • Net Interest Margin (NIM) of 3.12%, up 4 basis points from • Loans, excluding PPP, grew $11.7 million (4.6% the f
Slide 23: Quarterly Loan Growth excluding PPP loans
Quarterly Loan Growth excluding PPP loans Quarter End Loan Balances $1,050 $1,024 $1,012 $996 $1,000 $969 $958 $950 Period ending balances excluding PPP $900 were $1.02 billion at June 30, 2022 in millions compared to $957.9 million at June 30, $850 2021, an increase of 6.9%. $800 $750 $700 06/30/21
Slide 24: Increasing Efficiency In Our Branch Network
Increasing Efficiency In Our Branch Network $1,350,000 $100,000 Branch Optimization Efforts Yielding $90,000 $1,300,000 Results $89,308 $86,799 $80,000 $80,488 $1,250,000 $76,663 ◦ Reduced overall branch $70,000 locations from 23 to 14 over the past 7 quarters $60,000 $1,200,000 $58,385 $58,005 ◦ Ga
Slide 25: Revenue Generating Initiatives
Revenue Generating Initiatives 1H 2021 PHASES ACTION • Implemented a multi-faceted sales process for loan officers from NEW CRM ONGOING COMMUNICATION identification to closing GOAL: Leverage strong brand PROCESS • Re-evaluated data set for commercial loan leads; better identification measures for lo
Slide 26: 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 $245,865 $247,410 ▪ 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 27: Favorable Cost of Deposits
Favorable Cost of Deposits CB Has Maintained a Lower Average Cost of Deposits Versus Peers* Through the Most Recent Cycle 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2017 2018 2019 2020 2021 CB Peers Avg Fed Funds Rate * Peers Are defined as Pennsylvania-based commercial banks with assets between $1 b
Slide 28: 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 29: Key Financial Metrics
Key Financial Metrics
Slide 30: 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 standards $1,400 $1,386.5 $1,321.5 $1,281.7 ◦ Providing personalized customer engagement that leads to repeat and referral business $1,200 ($ in millions)
Slide 31: 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 June 30, 2022) $1,044.8 $1,028.0 Other 2.0% $1,020.8 Commercial & $1,000.0 Consumer 14.5% Industrial 6.4% $952.8 Real Estate- $912.9 Construction 4.0% $900.0 ($ in millions) $800.0 $700.0 $683.
Slide 32: Industry CRE Portfolio
Industry CRE Portfolio Owner Occupied CRE Loans by Industry – $103.4M Non-Owner Occupied CRE Loans by Industry – $322.7M Warehouse Space Warehouse Space Office Space 13.3% 12.6% 11.4% Office Space 9.4% Other Non-Farm/ Non-Residential Manufacturing 17.5% 7.3% Medical Facilities 6.1% Senior Housing Ma
Slide 33: Industry C&I Portfolio
Industry C&I Portfolio C&I Loans by Industry – $61.9M excl. PPP Real Estate Rental and Leasing Wholesale Trade 5.8% 5.1% Health Care and Social Assistance Oil and Gas 3.9% 6.3% Administrative and Support and Waste Management and Remediation Services 3.6% Retail Trade Transportation and Warehousing 6
Slide 34: Total Deposits and Deposit Composition
Total Deposits and Deposit Composition Total Deposits Deposit Composition $1,400 (as of June 30, 2022) $1,300 $1,226.6 $1,215.2 Time Deposits $1,200 10.3% $1,118.4 $1,100 $1,086.7 Non-Interest Bearing ($ in millions) $1,000 Savings Accounts Demand Deposits 20.6% 32.0% $900 $800 $773.3 $698.2 $700 $6
Slide 35: Asset Quality Trends
Asset Quality Trends Non-Current Loans/Total Loans NCOs (Recoveries)/Average Loans 1.40% 1.01% 1.26% 1.00% 1.20% 0.80% 1.00% 0.85% 0.60% 0.80% 0.52% 0.40% 0.60% 0.49% 0.38% 0.20% 0.40% (0.01)% 0.03% (0.01)% (0.01)% 0.00% 0.20% 06/30/21 09/30/21 12/31/21 03/31/22 06/30/22 Q2 2021 Q3 2021 Q4 2021 Q1 2
Slide 36: Revenue Diversification
Revenue Diversification • Noninterest income sources comprised approximately 16.1% of total operating revenue during Q2 2022; provides stable revenue stream • Q4 2021 Non interest income included $5.2 million from the sale of branches as part of optimization initiative Q2 2022 - Noninterest Income M
Slide 37: 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 $2,843 $1,983 $1,966 $2,000 $2,000 $275 $118 $0 $0 $(223) Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q2 20
Slide 38: 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 0.53 0.50 0.50 0.37 0.36 0.25 0.25 0.02 0.05 0.00 0.00 (0.04) (0.25) (0.25) Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q2 2021 Q3 2021 Q4 20
Slide 39: Net Interest Margin (FTE)
Net Interest Margin (FTE)(1) 4.50% 4.00% 3.50% 3.32% 3.37% 3.11% 3.11% 3.17% 3.00% 3.13% 3.10% 2.89% 2.96% 2.85% 2.50% 2.00% 1.50% 1.00% 0.50% 0.37% 0.33% 0.31% 0.33% 0.36% 0.00% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Yield on Earning Assets Net Interest Margin Cost of Funds (1) Net Interest Margin
Slide 40: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio(1) 85.00% 80.00% 80.68% 77.27% 75.00% 70.00% 69.73% 65.88% 65.00% 64.18% 60.00% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 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 41: 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% 8.55% 8.00% 0.60% 0.53% 0.50% 6.00% 5.88% 0.40% 4.00% 0.30% 0.20% 2.00% 0.10% 0.08% 0.93% 0.00% 0.00% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q2
Slide 42: Strong Capital Ratios (Community Bank)
Strong Capital Ratios (Community Bank) December 31, 2020 December 31, 2021 June 30, 2022 14.00% 13.04% 13.18% 13.08% 12.00% 11.79% 11.95% 11.83% 11.79% 11.95% 11.83% 10.00% 8.33% 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 43: 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 44: 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 45: 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 46: Appendix
Appendix
Slide 47: Selected Consolidated Financial Information
Selected Consolidated Financial Information (Dollars in thousands) (Unaudited) Selected Financial Condition Data 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 ASSETS Cash and Due From Banks $ 81,121 $ 123,588 $ 119,674 $ 173,523 $ 172,010 Securities 213,505 231,097 224,974 221,351 208,472 Loans Held for
Slide 48: Selected Consolidated Financial Information
Selected Consolidated Financial Information (Dollars in thousands) (Unaudited) Three Months Ended Six Months Ended Selected Operating Data 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 6/30/22 6/30/21 Interest and Dividend Income Loans, Including Fees $ 9,733 $ 9,551 $ 9,904 $ 9,718 $ 9,936 $ 19,284 $ 20
Slide 49: Per Common Share Data
Per Common Share Data Three Months Ended Six Months Ended Per Common Share Data 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 6/30/22 6/30/21 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.48 $ 0.48 Earnings (Loss) Per Common Share - Basic 0.02 0.59 1.32 0.37 (0.04) 0.61 0.48 Earnings
Slide 50: Selected Financial Ratios/Asset Quality Ratios/Capital Ratios
Selected Financial Ratios/Asset Quality Ratios/Capital Ratios Three Months Ended Six Months Ended Selected Financial Ratios (2) 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 6/30/22 6/30/21 Return on Average Assets 0.03 % 0.87 % 1.87 % 0.54 % (0.06)% 0.45 % 0.36 % Adjusted Return on Average Assets (Non-G
Slide 51: Average Balances and Yields
Average Balances and Yields Three Months Ended June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 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 (1) B
Slide 52: 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 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 (Dollars in thousands, except share and per share data) (Unaudited) Three Months Ended 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 Net Income (Loss
Slide 53: 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 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands, except share and per share data) Stockholders' Equity (GAAP) $ 113,772 $ 122,156
Slide 54: 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 6/30/22 6/30/21 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Net Income (Loss) (GAAP) $ 118 $ (223) $ 11,570 $ (10,640) $ 14,327 $ 7,052 Amortization of Intangible Assets, Net 446 503 1,9
Slide 55: 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 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Interest Income per Consolidated Statement of Income (GAAP) $ 10,958 $ 10,616 $ 1
Slide 56: Non-GAAP Financial Measures: Adjusted Efficiency Ratio
Non-GAAP Financial Measures: Adjusted Efficiency Ratio Three Months Ended Full Year 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Efficiency Ratio (GAAP) Noninterest expense (GAAP) $ 8,410 $ 8,656 $ 9,972 $ 9,773 $ 13,722 $ 42,862 $ 56,767 $ 34,9
Slide 57: 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 6/30/22 6/30/21 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Net Income (Loss) Before Income Tax Expense (Benefit) (GAAP) $ 74 $ (369) $ 14,695 $ (9,392) $ 16,056 $ 8,590 Provision
Slide 58: Non-GAAP Financial Measures: Allowance for Loan Losses, Excluding PPP Loans
Non-GAAP Financial Measures: Allowance for Loan Losses, Excluding PPP Loans 6/30/22 3/31/22 12/31/21 9/30/21 6/30/21 (Dollars in thousands) Allowance for Loan Losses $ 12,833 $ 11,595 $ 11,582 $ 11,581 $ 11,544 Total Loans $ 1,027,969 $ 1,020,642 $ 1,020,796 $ 1,001,599 $ 1,007,446 PPP Loans (3,853)
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