CB Financial Services(CBFV) - 2021 Q4 - Annual Report

Financial Performance - Net income for 2021 was $11,570,000, a significant recovery from a net loss of $10,640,000 in 2020[82] - Earnings per share (EPS) for 2021 was $2.15, compared to a loss of $1.97 per share in 2020[82] - Noninterest income rose to $16,280,000 in 2021, up from $9,471,000 in 2020, marking a 71% increase[82] - The efficiency ratio improved to 75.95% in 2021 from 110.50% in 2020, indicating better cost management[84] - Net income for the year ended December 31, 2021 was $11.6 million[109] - Net interest income decreased by $1.8 million, or 4.2%, to $40.2 million for the year ended December 31, 2021[110] - Noninterest income increased by $6.8 million, or 71.9%, to $16.3 million for the year ended December 31, 2021[113] - Interest expense decreased by $2.2 million, or 38.8%, to $3.4 million for the year ended December 31, 2021[110] - The provision for loan losses had a recovery of $1.1 million for the year ended December 31, 2021, compared to a $4.0 million provision in the prior year[110] - Noninterest expense decreased by $13.9 million, or 24.5%, to $42.9 million for the year ended December 31, 2021, compared to $56.8 million for the year ended December 31, 2020[115] Asset and Liability Management - Total assets increased to $1,425,479,000 in 2021 from $1,416,720,000 in 2020, representing a growth of 0.5%[81] - Total liabilities increased by $10.2 million, or 0.8%, to $1.29 billion as of December 31, 2021, compared to $1.28 billion as of December 31, 2020[106] - Total deposits increased by $2.0 million to $1.23 billion as of December 31, 2021, despite the sale of $102.8 million in deposits from two branches[106] - Cash and due from banks decreased by $41.2 million, or 25.6%, to $119.7 million at December 31, 2021, primarily due to securities purchases and branch sales[94] - Securities increased by $79.6 million, or 54.7%, to $225.0 million at December 31, 2021, with $135.0 million in purchases and a $231,000 gain from sales[94] - Total loans decreased by $24.0 million, or 2.3%, to $1.02 billion at December 31, 2021, with a net decline of $30.6 million in PPP loans[95] - Total available-for-sale debt securities amounted to $224.974 million at fair value as of December 31, 2021[94] - Total time deposits decreased to $136.7 million as of December 31, 2021, from $190.0 million as of December 31, 2020[103] Loan Portfolio and Credit Quality - The allowance for loan losses to total loans was 1.13% in 2021, slightly down from 1.22% in 2020[82] - The total allowance for loan losses was $11.582 million as of December 31, 2021[96] - Nonaccrual loans decreased by $5.9 million to $5.0 million at December 31, 2021, compared to $10.9 million at December 31, 2020[133] - Nonperforming loans decreased by $7.2 million to $7.3 million at December 31, 2021, from $14.5 million at December 31, 2020[125] - The ratio of allowance for loan losses to total loans decreased by 9 basis points to 1.13% at December 31, 2021, compared to 1.22% at December 31, 2020[133] - The company’s chief credit officer and credit departments actively monitor the loan portfolio to prevent deterioration of asset quality[123] Operational Efficiency and Strategic Initiatives - The company anticipates ongoing pre-tax cost savings of $3.0 million from branch optimization initiatives and additional savings of $2.5 million to $3.5 million from operational efficiency initiatives in 2022[90] - The company is implementing operational efficiencies related to individualized processes within its branch network and operating environment[90] - The company has completed a comprehensive review of its branch network to improve operating performance, focusing on profitability, efficiency, and client experience[90] - The branch optimization initiative reduced the bank's branch network to 14 branches, resulting in a pre-tax gain of $5.2 million from the sale of $102.8 million in deposits and $6.1 million in loans[90] Interest Rate Risk Management - As of December 31, 2021, a 300 basis point increase in interest rates would result in an estimated EVE dollar change of $(5,718) thousand, reflecting a 3.5% decrease in the EVE ratio[149] - A 200 basis point increase would lead to a dollar change of $(1,561) thousand, representing a 1.0% decrease in EVE[149] - A 100 basis point increase would yield a dollar change of $498 thousand, indicating a 0.3% increase in EVE[149] - A flat interest rate scenario shows an EVE dollar amount of $164,297 thousand with an NPV ratio of 11.48%[149] - The net interest income at risk shows a dollar change of $4,936 thousand at a 300 basis point increase, with a 12.9% increase[149] Capital and Equity - Common Equity Tier 1 Capital to Risk-Weighted Assets was 11.95% in 2021, up from 11.79% in 2020[84] - Stockholders' equity decreased by $1.4 million, or 1.0%, to $133.1 million as of December 31, 2021[109] - The Bank's Common Equity Tier 1 Capital was $113,086,000 with a ratio of 11.95% as of December 31, 2021, compared to $108,950,000 and 11.79% in 2020[145] - The Bank's total capital ratio was 13.18% as of December 31, 2021, compared to 13.04% in 2020[145]