Cb Financial Services, Inc. · NASDAQ:CBFV
Cb Financial Services — Investor Presentation (April 2023)
63 slides from Cb Financial Services's investor presentation, April 2023
Slide 1: Investor Presentation | April 2023
Financial Services, Inc. Investor Presentation | April 2023 Carmichaels Branch built circa 1912
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) April 2023 Page 3
Slide 4: Well-Positioned for Uncertain Times
Well-Positioned for Uncertain Times
Slide 5: Secure Deposit Base
Secure Deposit Base • In total, 62.9% of deposits are FDIC insured as of March 31, 2023 • Uninsured deposits consist of business & retail deposits of 17.5% and 6.9% of total Uninsured, 24.4% deposits, respectively • At March 31, 2023, deposits consisted of FDIC Insured, 62.9% 55.8% retail; 30.0% bus
Slide 6: Strong Liquidity Position
Strong Liquidity Position • Cash & Cash Equivalents totaled $103.5 million, or 7.2% of total assets • All securities classified as Available-for-Sale and marked to market • No outstanding borrowings from available borrowing capacity at the bank subsidiary • $618.5 million in available borrowing capa
Slide 7: 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 8: 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 ten offices providing a wide range of banking services in Greene, Allegheny, Washington, Fayette, and Westmoreland Counties
Slide 9: Share / Trading Information
Share / Trading Information CBFV Share Price $21.55 Shares Outstanding 5.1M Public Float 4.6M Market Cap 110.3M Total Stockholders' Equity $117.2M Book Value per Common Share $22.90 Tangible Book Value per Common Share (1) $20.40 Price to Book Value 0.95x Price to Tangible Book Value (1) 1.06x P/E L
Slide 10: 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 11: 2023 Macro Outlook
2023 Macro Outlook Expectations for the balance of 2023 are marked by 'Uncertainty' as future interest rate changes by the Federal Reserve, a potential recession, and industry-specific developments exert a resulting mixed impact on CB Item Comment Market pricing began increasing during 2022 and we e
Slide 12: Attractive Operating Market
Attractive Operating Market1 Pittsburgh Metropolitan Area 1 source: https://pittsburghregion.org/doing-business-in-pittsburgh/ CB Financial Services, Inc. (Nasdaq: CBFV) April 2023 Page 12
Slide 13: Revenue Generating Initiatives
Revenue Generating Initiatives With a differentiated model and approach to risk management, our Operational Goals for 2023 are not impacted by recent bank failures 2023 Goals p Continue investment in technology / applications to support the customer experience p Fine-tune build out of Commercial Ban
Slide 14: Executive Leadership Team
Executive Leadership Team John Montgomery Ralph Burchianti Jennifer George Alan Bicker President & CEO since August 2020. Previously Senior Executive Vice President & Senior Executive Vice President & Executive Vice President, Chief Chief Credit Officer at First Bank, a privately held Chief Credit O
Slide 15: Strong Q1 Performance
Strong Q1 Performance
Slide 16: Q1 2023 – Highlights of the Quarter
Q1 2023 – 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 Growth Coupled with Increased Deposit Balances • Net Interest Ma
Slide 17: Financial Update – Q1 2023
Financial Update – Q1 2023 2021 FY 2022 FY Q1 2022 Q1 2023 ($000s except per share) 12/31/21 12/31/22 3/31/22 3/31/23 • Diluted EPS (GAAP) for Q1 2023 was $0.79, compared to $0.58 in the prior year period Balance Sheet Total Assets $1,425,479 $1,408,938 $1,438,670 $1,430,708 Total Loans 1,020,796 1,
Slide 18: Quarterly Loan Growth
Quarterly Loan Growth Quarter End Loan Balances $1,100 $1,072 $1,043 $1,050 $1,050 $1,028 $1,021 $1,000 $950 Period ended balances were $1.07 billion at March 31, 2023 compared to in millions $900 $1.02 billion at March 31, 2022, an $850 increase of 5.0%. $800 $750 $700 Q1 2022 Q2 2022 Q3 2022 Q4 20
Slide 19: Core Earnings Growth
Core Earnings(1) Growth $6,000 $5,281 $5,123 $5,000 $4,417 $3,927 $4,000 $3,460 After completion of the branch in thousands optimization in June 2021, there has been $3,000 continuous growth in core earnings from $3.5 million in the three months ended $2,000 March 31, 2022 to $5.3 million in the thr
Slide 20: Driving Margins by Controlling Costs
Driving Margins by Controlling Costs
Slide 21: Revenue Metrics Benefiting from Optimization Efforts
Revenue Metrics Benefiting from Optimization Efforts Improving Returns on Revenue per Full-time Employee Our Human Capital $350,000 $334,631 ▪ Total Interest and Dividend Income, plus $300,000 Insurance $272,570 Commissions, continue to grow $245,865 $250,000 ▪ Completion of optimization initiative
Slide 22: Increasing Efficiency In Our Branch Networks
Increasing Efficiency In Our Branch Networks $1,350,000 $100,000 Branch Optimization $98,579 $97,577 Efforts Yielding $90,000 $1,300,000 $91,131 Results $89,308 $86,799 $80,000 $1,250,000 ◦ Reduced overall branch $70,000 locations from 16 to 13 during Q4 2021 - 2022 $60,000 $ in thousands $1,200,000
Slide 23: 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 2022 CB Peers Avg Fed Funds Rate * Peers include public and private Pennsylvania banks with total assets of $1 billion to
Slide 24: Non-Interest Bearing Deposit Market Advantage
Non-Interest Bearing Deposit Market Advantage CB Has Maintained a Higher Ratio of Non-Interest Bearing Deposits Compared to Peers Average* Through the Most Recent Cycle 35% 30% 25% 20% 15% 10% 2018 2019 2020 2021 2022 CB Peers * Peers include public and private Pennsylvania banks with total assets o
Slide 25: Operating Leverage Benefiting From Optimization
Operating Leverage Benefiting From Optimization $17,500 $15,000 $12,500 $10,000 Core Income is increasing at a in thousands faster rate than core expenses, $7,500 which remained relatively flat, $5,000 resulting in positive operating leverage $2,500 $— Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Core In
Slide 26: Credit Insights
Credit Insights
Slide 27: 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) April 2023 Page 27
Slide 28: Diversified Commercial Book Reduces Recession Sensitivity
Diversified Commercial Book Reduces Recession Sensitivity Credit Breakdown by Industry ▪ No loans are in deferral as of 3/31/2023 Office Space Senior Housing ▪ Exposure includes categories of CRE, 20.0% 6.1% Construction CRE, and C&I loans Hotels 5.4% ▪ Credit book characterized by rigorous Oil and
Slide 29: High-Quality Commercial Real Estate Book
High - Quality Commercial Real Estate Book Borrower Loan to Value Bands Key Takeaways: 70% - 79% • Commercial Real Estate represents 42.2% of 22.1% our total loan portfolio • Within Commercial Real Estate, 29.1% of loans carried an LTV of less than 50% at the 60% - 69% time of underwriting 26.2% 80%
Slide 30: Indirect Auto Lending Supported by Prime Borrower Relationships
Indirect Auto Lending Supported by Prime Borrower Relationships Borrower Credit Score Bands Key Takeaways: • Indirect Auto represents 12.6% of our total > 800 45.3% loan portfolio • Within Indirect Auto, 45.3% of loans are to borrowers with FICO scores of 800 or better at the time of underwriting •
Slide 31: Residential Real Estate Segment Characterized by Conservative LTVs
Residential Real Estate Segment Characterized by Conservative Loan to Values (LTVs) Borrower Loan to Value Bands Key Takeaways: > 100% 0.2% • Residential loans represent 31.1% of our total loan portfolio 90% - 99% 5.8% • Within our residential book, 28.7% of loans 80% - 89% < 50% carried an LTV of l
Slide 32: Returning Capital to Shareholders
Returning Capital to Shareholders
Slide 33: Shareholder Friendly Programs
Shareholder Friendly Programs Strong Capital Position Allows us to Maintain Shareholder-friendly Initiatives Completed $7.5 million repurchase program in Despite Economic Uncertainty February 2022 308,996 Total Shares Average Cost $24.27 per share CB Financial has paid a regular quarterly dividend o
Slide 34: Key Financial Metrics
Key Financial Metrics
Slide 35: 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 $1,430.7 $1,408.9 standards $1,400 ◦ Providing personalized customer engagement that leads to repeat and referral business $1,200 ($ in millions) ◦ Focusi
Slide 36: Loan Growth Trend and CRE Loan Composition
Loan Growth Trend and CRE Loan Composition Total Loans Expertise in Commercial Real Estate $1,200.0 (as of March 31, 2023) Other 2.0% $1,100.0 Commercial & $1,071.9 Consumer 13.6% $1,049.9 Industrial 7.4% $1,045.0 $1,023.0 Real Estate- $1,000.0 Construction 3.7% $900.0 ($ in millions) $800.0 Real Es
Slide 37: CRE Portfolio by Industry
CRE Portfolio by Industry Owner Occupied CRE Loans by Industry – $115.6M Non-Owner Occupied CRE Loans by Industry – $337.1M Warehouse Space Office Space 14.2% Warehouse Space 14.5% 12.8% Office Space 11.4% Manufacturing Medical Facilities 9.0% Other Non-Farm/Non- 6.6% Residential 19.7% Churches Hote
Slide 38: C&I Portfolio by Industry
C&I Portfolio by Industry C&I Loans by Industry – $79.4M Health Care and Social Assistance Senior Housing 5.2% 5.1% Retail Trade Professional, Scientific, and Technical Services 4.1% 6.3% Wholesale Trade 3.9% Finance and Insurance 3.8% Arts, Entertainment and Recreation 7.6% Construction 3.5% Admini
Slide 39: Total Deposits and Deposit Composition
Total Deposits and Deposit Composition Total Deposits $1,400 $1,268.5 $1,281.5 $1,224.6 $1,226.6 $1,200 $109.1 $130.4 $136.7 $190.0 $248.0 $234.9 $1,000 $239.5 $235.1 Total Deposits $800 $209.1 $206.2 Time Deposits ($ in millions) $192.1 Savings Accounts $199.0 Money Market Accounts Interest Bearing
Slide 40: Asset Quality Trends
Asset Quality Trends Noncurrent Loans/Total Loans Net (Recoveries) and Charge-offs /Average Loans 1.01% 1.40% 1.00% 1.20% 1.00% 0.50% 0.80% (0.01)% 0.01% 0.60% 0.52% 0.51% 0.00% 0.38% 0.39% 0.38% (0.29)% 0.40% (0.01)% 0.20% (0.50)% 03/31/22 06/30/22 09/30/22 12/31/22 03/31/23 Q1 2022 Q2 2022 Q3 2022
Slide 41: Revenue Diversification
Revenue Diversification Noninterest income sources comprised approximately 16.5% of total operating revenue during Q1 2023; provides stable revenue stream Total Revenue - Five Quarter Trend Q1 2023 - Noninterest Income Mix (000's) Net Interest Income Noninterest Income $16.0 $2.4 $2.8 $2.7 $12.0 $2.
Slide 42: Net Income and Adjusted Net Income – Last 5 Quarters
Net Income and Adjusted Net Income(1) – Last 5 Quarters Net Income Adjusted Net Income $ in 000's $ in 000's $5,000 $5,000 $4,152 $4,156 $4,086 $4,029 $4,000 $3,929 $4,000 $3,619 $3,047 $3,059 $3,000 $3,000 $2,000 $2,000 $1,000 $1,000 $275 $118 $0 $0 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q
Slide 43: 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 1.25 1.25 1.00 1.00 0.81 0.79 0.80 0.77 0.77 0.75 0.75 0.71 0.58 0.59 0.50 0.50 0.25 0.25 0.02 0.05 0.00 0.00 (0.25) (0.25) Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022
Slide 44: Net Interest Margin (FTE)
Net Interest Margin (FTE)(1) 4.50% 4.32% 4.04% 4.00% 3.68% 3.50% 3.32% 3.37% 3.46% 3.52% 3.30% 3.00% 3.13% 3.10% 2.50% 2.00% 1.50% 1.19% 1.00% 0.86% 0.57% 0.50% 0.33% 0.36% 0.00% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Yield on Earning Assets Net Interest Margin (FTE) Cost of Funds (1) Net Interest
Slide 45: Adjusted Efficiency Ratio
Adjusted Efficiency Ratio(1) 70.00% 67.50% 65.88% 65.00% 64.18% 63.02% 62.50% 60.74% 60.23% 60.00% 57.50% 55.00% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 (1) Refer to Non-GAAP Financial Measures in the Appendix for the calculation of the measure and reconciliation to the most comparable GAAP measure.
Slide 46: Adjusted ROAA and Adjusted ROAE
Adjusted Return on Average Assets – ROAA(1) Adjusted Return on Average Equity – ROAE(1) 1.30% 16.00% 1.18% 15.01% 1.20% 1.15% 14.24% 14.00% 1.10% 1.03% 1.00% 12.53% 12.00% 0.87% 0.90% 0.80% 10.00% 9.54% 0.70% 8.00% 0.60% 0.50% 6.00% 0.40% 4.00% 0.30% 0.20% 2.00% 0.10% 0.08% 0.93% 0.00% 0.00% Q1 2022
Slide 47: Strong Capital Ratios (Community Bank)
Strong Capital Ratios (Community Bank) December 31, 2021 December 31, 2022 March 31, 2023 14.00% 13.58% 13.69% 13.18% 12.60% 12.60% 12.33% 12.33% 11.95% 11.95% 12.00% 10.00% 9.24% 8.66% 8.00% 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 48: Concluding Thoughts
Concluding Thoughts ◦ Community bank model is highly-differentiated compared with large regional banks experiencing recent regulatory issues ◦ Intense focus on sales and service culture which builds full relationships with our customers ◦ Utilize technology investments to enhance speed of process wh
Slide 49: 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 50: Appendix
Appendix
Slide 51: Selected Consolidated Financial Information
Selected Consolidated Financial Information Selected Financial Condition Data (Dollars in thousands) (Unaudited) 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 ASSETS Cash and Due From Banks $ 103,545 $ 103,700 $ 122,801 $ 81,121 $ 123,588 Securities 189,025 190,058 193,846 213,505 231,097 Loans Real Esta
Slide 52: Quarterly Income Statements
Quarterly Income Statements (Dollars in thousands) (Unaudited) Three Months Ended Selected Operating Data 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 Interest and Dividend Income Loans, Including Fees $ 12,371 $ 11,835 $ 10,815 $ 9,733 $ 9,551 Securities: Taxable 964 974 985 988 905 Tax-Exempt 41 40 49
Slide 53: Per Common Share Data
Per Common Share Data Three Months Ended Per Common Share Data 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 Dividends Per Common Share $ 0.25 $ 0.24 $ 0.24 $ 0.24 $ 0.24 Earnings Per Common Share - Basic 0.81 0.81 0.77 0.02 0.59 Earnings Per Common Share - Diluted 0.79 0.81 0.77 0.02 0.58 Adjusted Earni
Slide 54: Selected Financial Ratios / Asset Quality Ratios / Capital Ratios
Selected Financial Ratios / Asset Quality Ratios / Capital Ratios Three Months Ended Selected Financial Ratios (2) 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 Return on Average Assets 1.21 % 1.16 % 1.12 % 0.03 % 0.87 % Adjusted Return on Average Assets (Non-GAAP) (1) 1.18 1.15 1.03 0.08 0.87 Return on
Slide 55: Average Balances and Yields
Average Balances and Yields Three Months Ended March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 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 56: Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS and Adjusted ROAA
Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS and Adjusted ROAA Three Months Ended Year Ended 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 12/31/22 12/31/21 (Dollars in thousands, except share and per share data) (Unaudited) Net Income (GAAP) $ 4,156 $ 4,152 $ 3,929 $ 118 $ 3,047 $ 11,2
Slide 57: Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS and Adjusted ROAE
Non-GAAP Financial Measures: Adjusted Net Income, Adjusted EPS and Adjusted ROAE Three Months Ended 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 (Dollars in thousands) (Unaudited) Net Income (GAAP) $ 4,156 $ 4,152 $ 3,929 $ 118 $ 3,047 Adjustments Loss (Gain) on Securities 232 (83) 46 199 7 (Gain) Loss
Slide 58: Non-GAAP Financial Measures: Tangible Common Equity and Tangible Book Value
Non-GAAP Financial Measures: Tangible Common Equity, Tangible Book Value per Share and Tangible Common Equity to Tangible Assets Three Months Ended Year Ended 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 12/31/22 12/31/21 (Dollars in thousands, except share and per share data) Stockholders' Equity (GAAP
Slide 59: Non-GAAP Financial Measures: Return on Average Tangible Common Equity
Non-GAAP Financial Measures: Return on Average Tangible Common Equity Three Months Ended Year Ended 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 12/31/22 12/31/21 (Dollars in thousands) Net Income (GAAP) $ 4,156 $ 4,152 $ 3,929 $ 118 $ 3,047 $ 3,047 $ 11,570 Amortization of Intangible Assets, Net 445 44
Slide 60: 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 Year Ended 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 12/31/22 12/31/21 (Dollars in thousands) Interest Income per Consolidated Statement of Income (GAAP) $ 14,244 $ 13,855 $ 12,287 $ 10,958 $
Slide 61: Non-GAAP Financial Measures: Adjusted Efficiency Ratio
Non-GAAP Financial Measures: Adjusted Efficiency Ratio Three Months Ended Year Ended 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 12/31/22 12/31/21 (Dollars in thousands) Efficiency Ratio (GAAP) Noninterest expense (GAAP) $ 9,028 $ 8,998 $ 8,827 $ 8,410 $ 8,656 $ 34,891 $ 42,862 Net Interest and Dividen
Slide 62: Non-GAAP Financial Measures: Core Earnings
Non-GAAP Financial Measures: Core Earnings (1) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Interest Income (GAAP) $ 14,244 $ 13,855 $ 12,287 $ 10,958 $ 10,616 Noninterest Income (GAAP) 2,810 2,360 2,739 2,105 2,613 Loss (Gain) on securities 232 (83) 46 199 7 (Gain) loss on disposal of Fixed Assets (11)
Slide 63: Non-GAAP Financial Measures: Pre-Tax Pre-Provision Return on Average Assets
Non-GAAP Financial Measures: Pre-Tax Pre-Provision Return on Average Assets Last 12 Three Months Ended Months Year Ended 3/31/23 12/31/22 9/30/22 6/30/22 3/31/22 3/31/23 12/31/22 12/31/21 (Dollars in thousands) Net Income Before Income Tax Expense (Benefit) (GAAP) $ 5,285 $ 5,228 $ 4,927 $ 74 $ 3,85
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