CB Financial Services(CBFV) - 2024 Q2 - Quarterly Report

Financial Position - Total assets increased by $104.2 million, or 7.2%, to$ 1.6 billion at June 30, 2024, compared to $1.5 billion at December 31, 2023[112] - Total liabilities increased by$ 101.1 million, or 7.7%, to $1.42 billion at June 30, 2024[114] - Total deposits increased by$ 82.6 million to $1.35 billion as of June 30, 2024[114] - Stockholders' equity increased by$ 3.0 million, or 2.1%, to $142.9 million as of June 30, 2024, compared to$ 139.8 million at December 31, 2023, driven by $6.8 million of net income[116] - Total interest-earning assets increased to$ 1,419,054,000 with a net interest income of $23,140,000 for the six months ended June 30, 2024[130] - The company's Common Equity Tier 1 capital ratio was 14.62% as of June 30, 2024, compared to 13.64% on December 31, 2023[140] - Total capital to risk-weighted assets was 15.61% as of June 30, 2024, up from 14.61% at the end of 2023[140] - The company is categorized as "well capitalized" under regulatory frameworks as of June 30, 2024[139] Liquidity - Cash and due from banks increased by$ 74.4 million, or 109.0%, to $142.6 million at June 30, 2024[112] - As of June 30, 2024, the company's most liquid assets, including cash and due from banks, totaled$ 142.6 million[138] - The company had unpledged securities amounting to $97.6 million, providing an additional source of liquidity[138] - At June 30, 2024, the company had the ability to borrow up to$ 487.6 million from the FHLB of Pittsburgh, with $465.6 million currently available[138] - 91.5% of total time deposits, amounting to$ 316.5 million, are set to mature within one year, indicating potential liquidity challenges if not retained[138] - The company maintains a strong liquidity position and monitors it daily to ensure sufficient funds for current commitments[138] Loan and Interest Income - Total loans decreased by $31.7 million, or 2.9%, to$ 1.08 billion at June 30, 2024, driven by decreases in consumer, commercial real estate, and residential real estate loans[113] - Interest income on loans increased by $1.2 million, or 9.3%, to$ 14.7 million for the three months ended June 30, 2024, with an average yield on loans rising by 50 basis points to 5.50%[117] - The average yield on loans increased by 58 basis points to 5.50% for the six months ended June 30, 2024, compared to 4.92% for the same period in 2023[127] - The average balance of loans increased by $22.1 million to$ 1.08 billion for the six months ended June 30, 2024, compared to $1.06 billion for the same period in 2023[127] Interest Expense and Margin - Interest expense increased by$ 3.4 million, or 82.9%, to $7.5 million for the three months ended June 30, 2024, compared to$ 4.1 million for the same period in 2023[118] - The average cost of interest-bearing deposits increased by 109 basis points, or 65.8%, compared to the same period in 2023, leading to a $2.8 million increase in interest expense[117] - The net interest margin (GAAP) decreased to 3.18% for the three months ended June 30, 2024, compared to 3.29% for the same period in 2023[116] - The net interest margin (FTE) was 3.28% for the six months ended June 30, 2024, compared to 3.41% for the same period in 2023[130] Income and Expenses - Net income for the three months ended June 30, 2024, was$ 2.7 million, a decrease of $107,000 from$ 2.8 million for the same period in 2023[116] - Net income for the six months ended June 30, 2024, was $6.8 million, a decrease of$ 68,000 compared to $6.9 million for the same period in 2023[126] - Noninterest income decreased by$ 1.6 million, or 69.7%, to $688,000 for the three months ended June 30, 2024, compared to$ 2.3 million for the same period in 2023[123] - Noninterest income decreased by $2.5 million, or 48.7%, to$ 2.6 million for the six months ended June 30, 2024, primarily due to a 99.9% decrease in insurance commissions[133] - Noninterest expense decreased by $517,000, or 5.4%, to$ 9.0 million for the three months ended June 30, 2024, compared to $9.5 million for the same period in 2023[124] - Noninterest expense decreased by$ 1.1 million, or 6.0%, to $17.4 million for the six months ended June 30, 2024, mainly due to reduced salaries and benefits[135] - Income tax expense was$ 560,000 for the three months ended June 30, 2024, compared to $699,000 for the same period in 2023[125] - Income tax expense decreased by$ 347,000 to $1.5 million for the six months ended June 30, 2024, driven by an increase in non-taxable income[136] Credit Losses - The allowance for credit losses (ACL) was$ 9.5 million at June 30, 2024, with an ACL to total loans ratio of 0.88%[113] - Provision for credit losses recorded a net recovery of $36,000 for the three months ended June 30, 2024, compared to a provision of$ 432,000 for the same period in 2023[122] - Provision for credit losses was a recovery of $73,000 for the six months ended June 30, 2024, compared to a provision of$ 512,000 for the same period in 2023[132] Risk Management - Interest rate risk management is a key focus, with the company utilizing a simulation model to assess the impact of interest rate changes on net interest income and economic value of equity[141] - A hypothetical increase of 400 basis points in interest rates could lead to a decrease in economic value of equity by 16.1%[144] Other Information - The company is not currently involved in any legal proceedings that would materially affect its financial condition or operations[148]