CB Financial Services(CBFV) - 2025 Q4 - Annual Report

Financial Performance - Total assets increased to $1,547,693 thousand in 2025 from $1,481,564 thousand in 2024, representing a growth of 4.5%[174] - Net interest and dividend income rose to $50,775 thousand in 2025, up from $46,068 thousand in 2024, marking an increase of 5.9%[174] - Net income decreased to $4,903 thousand in 2025, down from $12,594 thousand in 2024, reflecting a decline of 61.1%[174] - Earnings per common share (basic) was $2.45 in 2025, compared to $0.97 in 2024, indicating a significant increase[175] - The efficiency ratio improved to 69.14% in 2025 from 86.48% in 2024, indicating better cost management[175] - The return on average assets was 0.84% in 2025, up from 0.33% in 2024, reflecting improved asset utilization[175] - Stockholders' equity increased by $10.2 million, or 6.9%, to $157.5 million at December 31, 2025, compared to $147.4 million at December 31, 2024[222] - Net interest income rose by $4.7 million, or 10.2%, to $50.8 million for the year ended December 31, 2025, compared to $46.1 million for the year ended December 31, 2024[223] - Net interest margin (Non-GAAP) increased by 38 basis points to 3.58% for the year ended December 31, 2025, compared to 3.20% for the year ended December 31, 2024[223] Asset and Liability Management - Total liabilities increased by $56.0 million, or 4.2%, to $1.39 billion at December 31, 2025, compared to $1.33 billion at December 31, 2024[214] - Total deposits increased by $56.3 million, or 4.4%, to $1.34 billion as of December 31, 2025, compared to $1.28 billion at December 31, 2024[215] - The Bank's most liquid assets, including cash and due from banks, totaled $31.7 million at December 31, 2025[270] - Funding commitments totaled $196.4 million at December 31, 2025, primarily for loan origination and unused lines of credit[271] - The Company’s Tier I Leverage Capital to Adjusted Total Assets was 10.15% in 2025, an increase from 9.98% in 2024[281] Loan Portfolio and Credit Quality - Total loans increased by $69.6 million, or 6.4%, to $1.16 billion at December 31, 2025, compared to $1.09 billion at December 31, 2024[204] - The commercial real estate (CRE) portfolio totaled $552.2 million at December 31, 2025, an increase of $66.7 million, or 13.7%, compared to December 31, 2024[208] - The consumer loan portfolio decreased by $27.6 million, or 39.1%, primarily due to the discontinuation of indirect automobile loan production[204] - The total loan portfolio composition included residential loans at $329.2 million (28.3%), commercial loans at $552.2 million (47.5%), and consumer loans at $42.9 million (3.7%) as of December 31, 2025[207] - The allowance for credit losses increased to $10.1 million at December 31, 2025, compared to $9.8 million at December 31, 2024[207] - Nonperforming assets rose to $5.3 million at December 31, 2025, up from $1.8 million at December 31, 2024, primarily due to two new nonaccrual loan relationships totaling $4.1 million[248] - The ratio of nonaccrual loans to total loans increased to 0.46% at December 31, 2025, compared to 0.16% at December 31, 2024[250] - The allowance for credit losses to total loans ratio was 0.90% in 2025, slightly up from 0.87% in 2024[175] Interest Rate Risk and Economic Value - The estimated change in Economic Value of Equity (EVE) for a +400 basis point increase in interest rates would result in a decrease of $41,152, or 17.5%[288] - For a -100 basis point change in interest rates, EVE would increase by $7,660, or 3.3%[288] - The Company’s net interest income at risk would decrease by $3,088, or 5.4%, with a +400 basis point increase in interest rates[288] - The Asset/Liability Management Committee meets quarterly to evaluate and manage interest rate risk[283] - The Company uses a simulation model to monitor interest rate risk, measuring both capital and earnings perspectives[284] Noninterest Income and Expenses - Noninterest income turned negative at $(7,230) thousand in 2025, compared to a positive $5,494 thousand in 2024[174] - Noninterest income decreased by $12.7 million, or 231.6%, resulting in a loss of $7.2 million for the year ended December 31, 2025, compared to income of $5.5 million for 2024[229] - Total noninterest expense increased by $2.0 million, or 5.6%, to $37.7 million for the year ended December 31, 2025, compared to $35.6 million for 2024[232] - Salaries and employee benefits increased by $3.4 million to $22.2 million for the year ended December 31, 2025, primarily due to higher salaries and benefits related to additional revenue-producing staff[234] Goodwill and Impairment Testing - Goodwill is assigned 100% to the Community Banking segment and is tested for impairment at least annually[188] - The Company applies a one-step quantitative test for goodwill impairment, recording the excess of a reporting unit's carrying amount over its fair value[189] Tax and Regulatory Compliance - Income tax expense decreased by $2.4 million to $397,000 for the year ended December 31, 2025, primarily due to a decrease in pre-tax income[235] - The Bank was considered "well capitalized" under the regulatory framework for prompt corrective action as of December 31, 2025[279] - Common Equity Tier 1 Capital increased to $156,459, representing a ratio of 13.92% as of December 31, 2025, compared to $152,238 and 14.78% in 2024[281]