Cb Financial Services, Inc. · NASDAQ:CBFV
Cb Financial Services — Investor Presentation (January 2022)
51 slides from Cb Financial Services's investor presentation, January 2022
Slide 1: Investor Presentation January 2022
Investor Presentation January 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: Community Bank Mission Statement
Community Bank Mission Statement Community Bank is an exceptional, independent financial institution. We will provide our customers with valuable, appropriate products and outstanding personal service. Community Bank strives to continue to grow and continue to create value for our shareholders. Our
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 • Continued momentum serve the needs of Southwestern PA, origination platform and growth following small and medium- Central WV, Ohio with dedic
Slide 8: Leveraging a Rich History and Community Presence
Leveraging a Rich History and Community Presence Branch Network Global Pandemic Implementation of The Beginning and Formation of the Bank Supporting Accelerates Need Strategic Initiatives SW Pennsylvania, for Revitalization Aimed at WV, and OH Optimizing Branch Network and Positioning Community Bank
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 2.3 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: 2021 Update
2021 Update
Slide 12: 2021: Goals and Accomplishments
2021: Goals and Accomplishments Well-positioned to capitalize on Continued Progress on Optimization Efforts – – 01 continued U.S. housing market recovery Significant reduction in non-interest expense and salaries while still expanding Consolidated six branch locations effective June 30, 2021 revenue
Slide 13: Fourth Quarter 2021 Highlights
Fourth Quarter 2021 Highlights Reported Adjusted Adjusted Solid Profitability During Optimization Efforts Reported (non-GAAP) (non-GAAP)1 Loans and NI $7.0M $2.8M Net Income (NI) Book Value Deposits Q4 2021 net income Total loans as of EPS $1.31 $0.53 (GAAP) was $7.0M, or Book value per share was De
Slide 14: Branch Optimization and Operational Efficiency Efforts
Branch Optimization and Operational Efficiency Efforts Expected Costs / Savings FY 2021 Expenses Expected Savings in ($ millions) 2022 and Future Years Total non-recurring pre-tax costs during 2021 Writedown on fixed assets $2.3 of $7.5 million. Impairment of intangible assets $1.2 Branch This cost
Slide 15: Branch Optimization and Operational Efficiency Initiative
Branch Optimization and Operational Efficiency Initiative Identifying Solutions to Improve Branch Consolidation and Divestitures Operating Performance A comprehensive review of Community Bank’s Management has consolidated six branches and sold branch network and operating environment has two others:
Slide 16: Increasing Efficiency In Our Branch Network
Increasing Efficiency In Our Branch Network $87,615 $1,350,000 $90,000 Branch Optimization $79,757 $80,488 Efforts $1,300,000 $80,000 $70,000 $1,250,000 ◦ Reduced overall $60,000 branch locations $51,910 $54,502 $58,385 from 24 to 14 over $1,200,000 $55,662 $46,110 $50,000 the past 7 quarters ◦ Gain
Slide 17: Branch Optimization Initiative: Divestiture of Two West Virginia Branches
Branch Optimization Initiative Divestiture of Two West Virginia Branches Completed Q4 2021 Purchase and Assumption Agreement with Citizens Bank of West Virginia, Inc. Citizens assumed certain deposit liabilities and acquired certain loans, as well as cash, real property, personal property and other
Slide 18: 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 19: Revenue Metrics Benefiting From Optimization Efforts
Revenue Metrics Benefiting From Optimization Efforts Improving Returns on Our Human Capital ▪ Total Interest and Dividend Income, plus Insurance Commissions, continue to grow ▪ Completion of optimization initiative in 2021 positions CBFV well going into 2022 CB Financial Services, Inc. (Nasdaq: CBFV
Slide 20: 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 U.S. bank average of 35 (higher number represents an increasingly satisfied customer base) • Create a sales and service cu
Slide 21: Evaluating Market Changes ~ Need to Adapt
Evaluating Market Changes ~ Need to Adapt 0% ZIRR 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 Services, Inc. (N
Slide 22: Financial Update – Q4 2021
Financial Update – Q4 2021 @jamie 2018 FY 2019 FY 2020 FY 2021 FY Q4 2020 Q4 2021 ($000s except per share) 12/31/18 12/31/19 12/31/20 12/31/21 12/31/20 12/31/21 • Diluted EPS (GAAP) for Q4 2021 was $1.31, compared to $0.57 in the prior year period Balance Sheet Total Assets $1,281,701 $1,321,537 $1,
Slide 23: Key Financial Metrics
Key Financial Metrics
Slide 24: Total Assets
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 sacrificing credit underwriting standards $1,400 $1,321.5 $1,281.7 ◦ Providing personalized customer engagement that leads to
Slide 25: 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 December 31, 2021) $1,044.8 Other $1,020.8 1.1% Commercial & Consumer Industrial $1,000.0 12.0% 8.7% $952.5 Real Estate- Construction $912.9 8.3% $900.0 ($ in millions) $800.0 Real Estate- $744
Slide 26: Industry CRE Portfolio
Industry CRE Portfolio Owner Occupied CRE Loans by Industry – $90.7M Non-Owner Occupied CRE Loans by Industry – $301.4M Warehouse Space Other Non-Farm/ Office Space Medical Facilities 8.8% Non-Residential 12.6% 17.0% 9.2% Manufacturing 6.9% Office Space 6.7% Hotels 5.8% Churches 4.6% Warehouse Space
Slide 27: Industry C&I Portfolio
Industry C&I Portfolio C&I Loans by Industry – $64.5M excl. PPP Senior Housing 7% Wholesale Trade Construction 7% 7% Health Care and Social Assistance 5% Real Estate Rental and Leasing 8% Retail Trade 3% Utilities 2% Transportation and Warehousing 2% Manufacturing Other Services 9% 2% Information 1%
Slide 28: Total Deposits and Deposit Composition
Total Deposits and Deposit Composition Total Deposits Deposit Composition $1,400 (as of December 31, 2021) $1,300 $1,224.6 $1,226.6 $1,200 Time Deposits 11.1% $1,118.4 $1,100 $1,086.7 Non-Interest Bearing Demand Deposits 31.5% ($ in millions) $1,000 Savings Accounts $900 19.5% $800 $773.3 $698.2 $70
Slide 29: Asset Quality Trends
Asset Quality Trends Non-Current Loans / Total Loans NCOs (Recoveries) / Average Loans 1.40% 1.26% 0.45% 0.39% 0.40% 1.20% 0.35% 1.04% 1.03% 0.30% 1.00% 0.25% 0.85% 0.20% 0.80% 0.15% 0.10% 0.02% 0.03% 0.60% 0.49% 0.05% (0.01)% (0.01)% 0.00% 0.40% (0.05)% 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21
Slide 30: Revenue Diversification
Revenue Diversification • Noninterest income sources comprised approximately 22.3% of total operating revenue during 2021; provides stable revenue stream • FY 2021 Noninterest income included a $5.2 million non-recurring, gain resulting from the sale of two branches Q4 2021 - Noninterest Income Mix
Slide 31: 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 $3,500 $3,217 $6,965 $3,119 $7,000 $3,000 $2,843 $6,000 $2,492 $2,500 $5,000 $1,966 $4,000 $2,000 $3,079 $3,000 $2,845 $1,500 $1,983 $2,000 $1,000 $1,000 $500 $0 $(22
Slide 32: 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 0.70 1.31 1.25 0.60 0.58 0.59 0.53 1.00 0.50 0.46 0.75 0.40 0.36 0.57 0.52 0.50 0.30 0.37 0.25 0.20 0.00 0.10 (0.04) (0.25) 0.00 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q4 2020 Q1 2021 Q2 2021
Slide 33: Net Interest Margin (FTE)
Net Interest Margin (FTE)(1) 4.50% 4.00% 3.50% 3.56% 3.22% 3.17% 3.00% 2.96% 2.50% 2.00% 1.50% 1.00% 0.50% 0.48% 0.31% 0.00% Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Yield on Earning Assets Net Interest Margin Cost of Funds (1) Net Interest Margin (GAAP) was 3.21%, 3.04%, 2.84%, 2.88%, and 2.95%, res
Slide 34: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio(1) 85.00% 80.00% 75.00% 70.00% 69.73% 68.06% 65.00% 60.00% Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 (1) Refer to Non-GAAP Financial Measures in the Appendix for the calculation of the measure and reconciliation to the most comparable GAAP measure. Efficiency Ratio (GAAP) was
Slide 35: 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% 0.88% 10.00% 0.80% 0.76% 9.25% 0.70% 8.00% 8.55% 0.60% 0.50% 6.00% 0.40% 4.00% 0.30% 0.20% 2.00% 0.10% 0.00% 0.00% Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 202
Slide 36: Strong Capital Ratios (Community Bank)
Strong Capital Ratios (Community Bank) December 31, 2019 December 31, 2020 December 31, 2021 14.00% 13.04% 13.18% 12.54% 12.00% 11.79% 11.95% 11.79% 11.95% 11.43% 11.43% 10.00% 7.85% 7.81% 7.76% 8.00% 6.00% 4.00% 2.00% 0.00% Common Equity Tier 1 Capital (to Risk Tier 1 Capital (to Risk Weighted Asse
Slide 37: 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 38: 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 39: Contact Information
Contact Information Company Contact: John H. Montgomery President and Chief Executive Officer Phone: (724) 225-2400 Investor Relations Jeremy Hellman, CFA NASDAQ Gal Market: CBFV Phone: (212) 836-9626 100 N. Market Street Email: jhellman@equityny.com Carmichaels, PA 15320 Phone: 724-966-5041 Fax: 72
Slide 40: Appendix
Appendix
Slide 41: Selected Consolidated Financial Information
Selected Financial Condition Data 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 Selected Consolidated ASSETS Cash and Due From Banks $ 119,674 $ 173,523 $ 172,010 $ 230,000 $ 160,911 Financial Information Securities 224,974 221,351 208,472 142,156 145,400 Loans Held for Sale — 17,407 11,409 — — (Dollars
Slide 42: Selected Consolidated Financial Information
Three Months Ended Year Ended Selected Operating Data 12/31/21 09/30/21 06/30/21 03/31/21 12/31/20 12/31/21 12/31/20 Selected Consolidated Interest and Dividend Income Loans, Including Fees 9,904 9,718 9,936 10,146 10,833 39,704 42,883 Securities: Financial Information Taxable 866 843 635 646 725 2,
Slide 43: Per Common Share Data
Per Common Share Data Three Months Ended Year Ended Per Common Share Data 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Dividends Per Common Share $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.24 $ 0.96 $ 0.96 Earnings (Loss) Per Common Share - Basic 1.32 0.37 (0.04) 0.52 0.57 2.15 (1.97) Earnings (
Slide 44: Selected Financial Ratios / Asset Quality Ratios / Capital Ratios
Selected Financial Ratios /Asset Quality Ratios / Capital Ratios Three Months Ended Year Ended Selected Financial Ratios (2) 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 Return on Average Assets 1.87 % 0.54 % (0.06)% 0.81 % 0.87 % 0.79 % (0.77)% Adjusted Return on Average Assets (Non-
Slide 45: Average Balances and Yields
Average Balances and Yields Three Months Ended December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Average Interest and Yield / Balance Dividends Cost (
Slide 46: 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 Full Year Three 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 12/31/19 12/31/18 Months (Dollars in thousands, except share and per share data) (Unaudited) Ended 12/31/21 N
Slide 47: 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 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands, except share and per share data) Stockholders' Equity (GAAP) $ 133,124 $ 134,530 $ 151,097 $ 137,625 Goodwill an
Slide 48: 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 12/31/21 12/31/20 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Net Income (Loss) (GAAP) $ 6,965 $ 3,079 $ 11,570 $ (10,640) $ 14,327 $ 7,052 Amortization of Intangible Assets, Net 445 532
Slide 49: 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 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Interest Income per Consolidated Statement of Income (GAAP) $ 10,963 $ 10,786 $
Slide 50: Non-GAAP Financial Measures: Adjusted Efficiency Ratio
Non-GAAP Financial Measures: Adjusted Efficiency Ratio Three Months Ended Full Year 12/31/21 9/30/21 6/30/21 3/31/21 12/31/20 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Efficiency Ratio (GAAP) Noninterest expense (GAAP) $ 9,972 $ 9,773 $ 13,722 $ 9,395 $ 9,725 $ 42,862 $ 56,767 $ 34,
Slide 51: 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 12/31/21 12/31/20 12/31/21 12/31/20 12/31/19 12/31/18 (Dollars in thousands) Net Income (Loss) Before Income Tax Expense (Benefit) (GAAP) $ 8,873 $ 3,687 $ 14,695 $ (9,392) $ 16,056 $ 8,590 Provi
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