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CB Financial Services, Inc. - Quarter Report: 2023 September (Form 10-Q)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 001-36706
CB FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania51-0534721
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
100 N. Market Street, Carmichaels, PA
15320
(Address of principal executive offices)(Zip Code)
(724) 966-5041
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Common stock, par value $0.4167 per shareCBFVThe Nasdaq Stock Market, LLC
(Title of each class)(Trading symbol)(Name of each exchange on which registered)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company ☒
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of November 10, 2023, the number of shares outstanding of the Registrant’s Common Stock was 5,120,678.


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FORM 10-Q
INDEX
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited) September 30,
2023
December 31,
2022
(Dollars in thousands, except per share and share data)
ASSETS
Cash and Due From Banks:
Interest-Earning$45,898 $82,957 
Noninterest-Earning6,699 20,743 
Total Cash and Due From Banks52,597 103,700 
Securities:
Available-for-Sale Debt Securities, at Fair Value170,575 187,360 
Equity Securities, at Fair Value2,329 2,698 
Total Securities172,904 190,058 
Loans, Net of Allowance for Credit Losses of $10,848 and $12,819 at September 30, 2023 and December 31, 2022, Respectively
1,091,666 1,037,054 
Premises and Equipment, Net
18,524 17,844 
Bank-Owned Life Insurance
25,227 25,893 
Goodwill
9,732 9,732 
Intangible Assets, Net
2,177 3,513 
Accrued Interest Receivable and Other Assets26,665 21,144 
TOTAL ASSETS
$1,399,492 $1,408,938 
LIABILITIES
Deposits:
Noninterest-Bearing Demand Accounts$305,145 $390,405 
Interest-Bearing Demand Accounts357,381 311,825 
Money Market Accounts189,187 209,125 
Savings Accounts207,148 248,022 
Time Deposits177,428 109,126 
Total Deposits1,236,289 1,268,503 
Short-Term Borrowings
— 8,060 
Other Borrowings
34,668 14,638 
Accrued Interest Payable and Other Liabilities13,689 7,582 
TOTAL LIABILITIES
1,284,646 1,298,783 
STOCKHOLDERS' EQUITY
Preferred Stock, No Par Value; 5,000,000 Shares Authorized
— — 
Common Stock, $0.4167 Par Value; 35,000,000 Shares Authorized, 5,742,408 Shares Issued and 5,120,678 Shares Outstanding at September 30, 2023, with 5,708,433 and 5,100,189 Shares Issued and Outstanding at December 31, 2022.
2,393 2,379 
Capital Surplus
84,517 83,953 
Retained Earnings
71,707 63,861 
Treasury Stock, at Cost (621,730 and 608,244 Shares at September 30, 2023 and December 31, 2022, Respectively)
(14,100)(13,797)
Accumulated Other Comprehensive Loss(29,671)(26,241)
TOTAL STOCKHOLDERS' EQUITY
114,846 110,155 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$1,399,492 $1,408,938 
The accompanying notes are an integral part of these consolidated financial statements

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CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
(Dollars in thousands, except share and per share data)
INTEREST AND DIVIDEND INCOME
Loans, Including Fees$14,049 $10,815 $39,846 $30,098 
Investment Securities:
Taxable940 985 2,853 2,878 
Tax-Exempt41 49 124 172 
Dividends25 21 74 64 
Other Interest and Dividend Income819 417 2,424 649 
TOTAL INTEREST AND DIVIDEND INCOME15,874 12,287 45,321 33,861 
INTEREST EXPENSE
Deposits4,750 1,079 11,097 2,214 
Short-Term Borrowings— 19 56 
Other Borrowings407 174 800 522 
TOTAL INTEREST EXPENSE5,157 1,272 11,902 2,792 
NET INTEREST AND DIVIDEND INCOME10,717 11,015 33,419 31,069 
Provision For Credit Losses - Loans291 — 863 3,784 
Provision For Credit Losses - Unfunded Commitments 115 — 54 — 
NET INTEREST AND DIVIDEND INCOME AFTER PROVISION FOR CREDIT LOSSES10,311 11,015 32,502 27,285 
NONINTEREST INCOME
Service Fees466 544 1,359 1,629 
Insurance Commissions1,436 1,368 4,870 4,535 
Other Commissions94 244 462 512 
Net Loss on Sales of Loans— — (3)— 
Net Loss on Securities(37)(46)(369)(252)
Net Gain on Purchased Tax Credits14 22 43 
     Net Gain on Disposal of Fixed Assets— 439 11 431 
Income from Bank-Owned Life Insurance145 140 425 418 
Net Gain on Bank-Owned Life Insurance Claims— — 303 — 
Other Income301 36 413 143 
TOTAL NONINTEREST INCOME2,412 2,739 7,493 7,459 
NONINTEREST EXPENSE
Salaries and Employee Benefits5,369 4,739 15,679 13,843 
Occupancy698 768 2,188 2,230 
Equipment265 170 766 561 
Data Processing714 540 2,289 1,471 
FDIC Assessment189 147 565 484 
PA Shares Tax217 240 672 721 
Contracted Services286 288 868 1,223 
Legal and Professional Fees320 334 748 876 
Advertising114 131 268 362 
Other Real Estate Owned (Income)(8)(38)(80)(113)
Amortization of Intangible Assets445 445 1,336 1,336 
Other Expense878 1,063 2,718 2,899 
TOTAL NONINTEREST EXPENSE9,487 8,827 28,017 25,893 
Income Before Income Tax Expense
3,236 4,927 11,978 8,851 
Income Tax Expense564 998 2,392 1,757 
NET INCOME$2,672 $3,929 $9,586 $7,094 
EARNINGS PER SHARE
Basic$0.52 $0.77 $1.88 $1.38 
Diluted0.52 0.77 1.87 1.37 
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic5,115,026 5,106,861 5,112,223 5,150,632 
Diluted5,126,546 5,118,627 5,118,279 5,165,376 
The accompanying notes are an integral part of these consolidated financial statements

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
(Dollars in thousands)
Net Income$2,672 $3,929 $9,586 $7,094 
Other Comprehensive Loss:
Change in Unrealized Loss on Investment Securities Available-for-Sale(4,248)(11,753)(4,372)(32,785)
Income Tax Effect916 2,533 942 7,064 
Other Comprehensive Loss, Net of Income Tax Effect(3,332)(9,220)(3,430)(25,721)
Total Comprehensive (Loss) Income
$(660)$(5,291)$6,156 $(18,627)

The accompanying notes are an integral part of these consolidated financial statements

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)


Three Months Ended September 30, 2023Shares IssuedCommon StockCapital SurplusRetained EarningsTreasury StockAccumulated Other Comprehensive LossTotal Stockholders' Equity
(Dollars in thousands, except share and per share data)
June 30, 20235,733,408 $2,389 $84,325 $70,314 $(14,100)$(26,339)$116,589 
Comprehensive Loss:
Net Income— — — 2,672 — — 2,672 
Other Comprehensive Loss— — — — — (3,332)(3,332)
Restricted Stock Awards Granted9,000 (4)— — — — 
Stock-Based Compensation Expense— — 196 — — — 196 
Dividends Paid ($0.25 Per Share)
— — — (1,279)— — (1,279)
September 30, 20235,742,408 $2,393 $84,517 $71,707 $(14,100)$(29,671)$114,846 


Three Months Ended September 30, 2022Shares IssuedCommon StockCapital SurplusRetained EarningsTreasury StockAccumulated Other Comprehensive LossTotal Stockholders' Equity
(Dollars in thousands, except share and per share data)
June 30, 20225,702,433 $2,376 $83,614 $58,225 $(13,015)$(17,428)$113,772 
Comprehensive Loss:
Net Income— — — 3,929 — — 3,929 
Other Comprehensive Loss— — — — — (9,220)(9,220)
Restricted Stock Awards Forfeited— — 34 — (34)— — 
Stock-Based Compensation Expense— — 145 — — — 145 
Exercise of Stock Options— — — — (2)— (2)
Treasury Stock Purchased, at cost (30,271 shares)
— — — — (694)— (694)
Dividends Paid ($0.24 Per Share)
— — — (1,224)— — (1,224)
September 30, 20225,702,433 $2,376 $83,793 $60,930 $(13,745)$(26,648)$106,706 

The accompanying notes are an integral part of these consolidated financial statements

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Nine Months Ended September 30, 2023Shares IssuedCommon StockCapital SurplusRetained EarningsTreasury StockAccumulated Other Comprehensive LossTotal Stockholders' Equity
(Dollars in thousands, except share and per share data)
December 31, 20225,708,433 $2,379 $83,953 $63,861 $(13,797)$(26,241)$110,155 
Adoption of Accounting Standard ASU 2016-13— — — 2,092 — — 2,092 
Balance at January 1, 2023, adjusted5,708,433 $2,379 $83,953 $65,953 $(13,797)$(26,241)$112,247 
Comprehensive Income:
Net Income— — — 9,586 — — 9,586 
Other Comprehensive Loss— — — — — (3,430)(3,430)
Restricted Stock Awards Granted33,975 14 (14)— — — — 
Restricted Stock Awards Forfeited— — 21 — (21)— — 
Stock-Based Compensation Expense— — 557 — — — 557 
Exercise of Stock Options— — — — 45 — 45 
Treasury stock purchased, at cost (14,478 shares)
— — — — (327)— (327)
Dividends Paid ($0.75 Per Share)
— — — (3,832)— — (3,832)
September 30, 20235,742,408 $2,393 $84,517 $71,707 $(14,100)$(29,671)$114,846 



Nine Months Ended September 30, 2022Shares IssuedCommon StockCapital SurplusRetained EarningsTreasury StockAccumulated Other Comprehensive LossTotal Stockholders' Equity
(Dollars in thousands, except share and per share data)
December 31, 20215,680,993 $2,367 $83,294 $57,534 $(9,144)$(927)$133,124 
Comprehensive Loss:
Net Income— — — 7,094 — — 7,094 
Other Comprehensive Loss— — — — — (25,721)(25,721)
Restricted Stock Awards Forfeited(325)— 81 — (81)— — 
Restricted Stock Awards Granted21,765 (9)— — — — 
Stock-Based Compensation Expense— — 424 — — — 424 
Exercise of Stock Options— — — 162 — 165 
Treasury Stock Purchased, at cost (189,550 shares)
— — — — (4,682)— (4,682)
Dividends Paid ($0.72 Per Share)
— — — (3,698)— — (3,698)
September 30, 20225,702,433 $2,376 $83,793 $60,930 $(13,745)$(26,648)$106,706 
The accompanying notes are an integral part of these consolidated financial statements

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30,20232022
(Dollars in thousands)
OPERATING ACTIVITIES
Net Income$9,586 $7,094 
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities
Net Amortization on Securities56 48 
Depreciation and Amortization2,133 1,997 
Provision for Credit Losses - Loans863 3,784 
Provision for Credit Losses - Unfunded Commitments54 — 
Loss on Securities369 252 
Gain on Purchased Tax Credits(22)(43)
Income from Bank-Owned Life Insurance(425)(418)
Proceeds From Mortgage Loans Sold269 — 
Originations of Mortgage Loans for Sale(266)— 
Loss on Sale of Loans— 
Gain on Sale of Other Real Estate Owned and Repossessed Assets(13)(1)
Noncash Expense for Stock-Based Compensation557 424 
Increase in Accrued Interest Receivable(600)(59)
Valuation adjustment on real estate owned119 — 
Gain on Disposal of Fixed Assets(11)(431)
Decrease in Taxes Payable(632)(947)
Increase in Accrued Interest Payable1,390 29 
Other, Net4,236 (2,679)
NET CASH PROVIDED BY OPERATING ACTIVITIES17,666 9,050 
INVESTING ACTIVITIES
Investment Securities Available for Sale:
Proceeds From Principal Repayments and Maturities12,357 24,869 
Purchases of Securities— (26,826)
Net Increase in Loans(55,546)(24,480)
Purchase of Premises and Equipment(1,594)(470)
Proceeds from Disposal of Premises and Equipment46 480 
Proceeds From a Claim on Bank-Owned Life Insurance731 — 
Proceeds From Sale of Other Real Estate Owned142 37 
(Increase) Decrease in Restricted Equity Securities(517)619 
NET CASH USED IN INVESTING ACTIVITIES(44,381)(25,771)
FINANCING ACTIVITIES
Net (Decrease) Increase in Deposits
(32,214)49,221 
Net Decrease in Short-Term Borrowings(8,060)(21,158)
Proceeds From Other Borrowed Funds20,000 — 
Cash Dividends Paid(3,832)(3,698)
Treasury Stock, Purchases at Cost(327)(4,682)
Exercise of Stock Options45 165 
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES(24,388)19,848 
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(51,103)3,127 
CASH AND DUE FROM BANKS AT BEGINNING OF YEAR103,700 119,674 
CASH AND DUE FROM BANKS AT END OF PERIOD$52,597 $122,801 






The accompanying notes are an integral part of these consolidated financial statements

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30,20232022
(Dollars in thousands)
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash Paid For:
Interest on Deposits and Borrowings (Including Interest Credited to Deposits of $9,923 and $2,322, Respectively)
$10,511 $2,764 
Income Taxes2,570 3,247 
SUPPLEMENTAL NONCASH DISCLOSURE:
Other Real Estate Acquired in Settlement of Loans248 — 
Syndicated Loans Purchased and Sold not Settled, net(1,967)— 
Right of Use Asset Recognized— 1,284 
Lease Liability Recognized— 1,284 
The accompanying notes are an integral part of these consolidated financial statements

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
The accompanying consolidated financial statements include the accounts of CB Financial Services, Inc. (“CB Financial”) and its wholly owned subsidiary, Community Bank (the “Bank”), and the Bank’s wholly-owned subsidiary, Exchange Underwriters, Inc. (“Exchange Underwriters”). CB Financial, the Bank and Exchange Underwriters are collectively referred to as the “Company”. All intercompany transactions and balances have been eliminated in consolidation.
The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and with general practice within the banking industry. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading in any material respect. In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Statements of Financial Condition and income and expenses for the reporting period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to determination of the allowance for credit losses on loans, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, impairment evaluations of securities, goodwill and intangible assets impairment, and the valuation of deferred tax assets.
In the opinion of management, the accompanying unaudited interim financial statements include all adjustments considered necessary for a fair presentation of the Company’s financial position and results of operations at the dates and for the periods presented. All these adjustments are of a normal, recurring nature, and they are the only adjustments included in the accompanying unaudited interim financial statements. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Interim results are not necessarily indicative of results for a full year.
Nature of Operations
The Company derives substantially all its income from banking and bank-related services which include interest income on commercial, commercial mortgage, residential real estate and consumer loan financing, as well as interest and dividend income on securities, insurance commissions, and fees generated from deposit services to its customers. The Company provides banking services through its subsidiary, Community Bank, a Pennsylvania-chartered commercial bank headquartered in Carmichaels, Pennsylvania. The Bank is a community-oriented institution offering residential and commercial real estate loans, commercial and industrial loans, and consumer loans as well as a variety of deposit products for individuals and businesses in its market area. The Bank operates 10 branches in Greene, Allegheny, Washington, Fayette and Westmoreland Counties in southwestern Pennsylvania, and three branches in Marshall and Ohio Counties in West Virginia. Property and casualty, commercial liability, surety and other insurance products are offered through Exchange Underwriters, a full-service, independent insurance agency.

Critical Accounting Policies; Use of Critical Accounting Estimates

The disclosures below supplement the accounting policies previously disclosed in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC. The updates reflect the adoption of Financial Accounting Standard Board ("FASB") ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, referred to as ASC 326 or, more commonly, referred to as Current Expected Credit Losses (CECL).

Allowance for Credit Losses (ACL)
On January 1, 2023, the Company adopted ASU 2016-13, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss methodology. The Company adopted ASU 2016-13 using a modified retrospective approach. Results for reporting periods beginning after January 1, 2023 are presented under Topic 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP. The adoption resulted in a decrease of $3.4 million to the Company’s ACL related to loans receivable (ACL - Loans) and an increase of $718,000 in ACL for unfunded commitments (ACL - Unfunded Commitments). The net impact resulted in a $2.1 million increase to retained earnings, net of deferred taxes.

The ACL represents the estimated amount considered necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date. The measurement of expected credit losses is applicable to loans receivable and securities measured at amortized cost. It also applies to off-balance sheet credit exposures such as loan commitments and unused lines of
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credit. The allowance is established through a provision for credit losses that is charged against income. The methodology for determining the allowance for credit losses is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded ACL. The ACL is reported separately as a contra-asset on the Consolidated Statement of Financial Condition. The expected credit loss for unfunded loan commitments is reported on the Consolidated Statement of Financial Condition in other liabilities while the provision for credit losses related to unfunded commitments is reported in provision for credit losses - unfunded commitments in the Consolidated Statements of Income.

ACL on Loans Receivable
The ACL on loans is deducted from the amortized cost basis of the loan to present the net amount expected to be collected. Expected losses are evaluated and calculated on a collective, or pooled, basis for those loans which share similar risk characteristics. At each reporting period, the Company evaluates whether loans within a pool continue to exhibit similar risk characteristics. If the risk characteristics of a loan change, such that they are no longer similar to other loans in the pool, the Company will evaluate the loan with a different pool of loans that share similar risk characteristics. If the loan does not share risk characteristics with other loans, the Company will evaluate the loan on an individual basis. The Company evaluates the pooling methodology at least annually. Loans are charged off against the ACL when the Company believes the balances to be uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged off or expected to be charged off.

The Company has chosen to segment its portfolio consistent with the manner in which it manages credit risk. Such segments include residential mortgage, commercial real estate mortgages, construction, commercial business, consumer and other. For most segments, the Company calculates estimated credit losses using a probability of default and loss given default methodology, the results of which are applied to the aggregated discounted cash flow of each individual loan within the segment. The point in time probability of default and loss given default are then conditioned by macroeconomic scenarios to incorporate reasonable and supportable forecasts that affect the collectability of the reported amount.

The Company estimates the ACL on loans via a quantitative analysis which considers relevant available information from internal and external sources related to past events and current conditions, as well as the incorporation of reasonable and supportable forecasts. The Company evaluates a variety of factors including third party economic forecasts, industry trends and other available published economic information in arriving at its forecasts. After the reasonable and supportable forecast period, the Company reverts, on a straight-line basis, to average historical losses. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a restructuring will be executed with an individual borrower or the renewal option is included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.

Also included in the ACL on loans are qualitative reserves to cover losses that are expected but, in the Company’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above. Factors that the Company considers include changes in lending policies and procedures, business conditions, the nature and size of the portfolio, portfolio concentrations, the volume and severity of past due loans and non-accrual loans, and the effect of external factors such as competition, legal and regulatory requirements, among others. Furthermore, the Company considers the inherent uncertainty in quantitative models that are built upon historical data.

Individually Evaluated Loans
On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on its disparate risk characteristics. When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, for collateral-dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will charge off the difference between the fair value of the collateral, less estimated costs to sell at the reporting date, and the amortized cost basis of the loan.





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ACL on Off-Balance Sheet Commitments
The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance calculation, other than those that are unconditionally cancellable. To arrive at that reserve, the reserve percentage for each applicable segment is applied to the unused portion of the expected commitment balance and is multiplied by the expected funding rate. To determine the expected funding rate, the Company uses a historical utilization rate for each segment. As noted above, the ACL on unfunded loan commitments is included in other liabilities on the Consolidated Statement of Financial Condition and the related credit expense is recorded in provision for credit losses - unfunded commitments in the Consolidated Statements of Income.

ACL on Available-for-Sale Securities
For available-for-sale securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities available-for-sale that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating by a rating agency, and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost. Any impairment that has not been recorded through an ACL is recognized in other comprehensive income (loss), net of tax. The Company elected the practical expedient of zero loss estimates for securities issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major agencies and have a long history of no credit losses.

Changes in the ACL are recorded as provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available for sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued Interest Receivable
The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of loans and available for sale securities. Accrued interest receivable on loans is reported as a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $4.0 million at September 30, 2023 and is excluded from the estimate of credit losses. Accrued interest receivable on available of sale securities, also a component of accrued interest receivable and other assets on the Consolidated Statement of Financial Condition, totaled $534,000, at September 30, 2023 and is excluded from the estimate of credit losses.

Recent Accounting Standards
In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 that extends the period of time preparers can utilize the reference rate reform relief guidance. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, as amended. This ASU provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. The elective guidance in the ASU applies to modifications of contract terms that will directly replace, or have the potential to replace, an affected rate with another interest rate index, as well as certain contemporaneous modifications of other contract terms related to the replacement of an affected rate. The ASU notes that changes in contract terms that are made to effect the reference rate reform transition are considered related to the replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition. The optional expedient allows companies to account for the modification as if it was not substantial (i.e., do not treat as an extinguishment of debt). To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. For all entities, the amendments in ASU 2022-06 are effective upon issuance. As of September 30, 2023, the Company has identified one $5.0 million corporate debt security tied to the LIBOR reference rate. The Company has not yet made any contract modifications. The Company is currently evaluating the potential impact of this guidance on its consolidated statements of financial statements and results of operations.

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Note 2. Earnings Per Share
There are no convertible securities which would affect the numerator in calculating basic and diluted earnings per share; therefore, net income as presented on the Consolidated Statements of Income is used as the numerator.
The following table sets forth the composition of the weighted-average common shares (denominator) used in the basic and diluted earnings per share computation.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
(Dollars in thousands, except share and per share data)
Net Income$2,672 $3,929 $9,586 $7,094 
Weighted-Average Basic Common Shares Outstanding
5,115,026 5,106,861 5,112,223 5,150,632 
Dilutive Effect of Common Stock Equivalents (Stock Options and Restricted Stock)
11,520 11,766 6,056 14,744 
Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding
5,126,546 5,118,627 5,118,279 5,165,376 
Earnings Per Share:
Basic
$0.52 $0.77 $1.88 $1.38 
Diluted
0.52 0.77 1.87 1.37 

The dilutive effect on weighted average diluted common shares outstanding is the result of outstanding stock options and nonvested restricted stock. The following table presents for the periods indicated (a) options to purchase shares of common stock that were outstanding but not included in the computation of earnings per share because the options’ exercise price was greater than the average market price of the common shares for the period, and (b) shares of restricted stock awards that were not included in the computation of diluted earnings per share because the hypothetical repurchase of shares under the treasury stock method exceeded the weighted average nonvested restricted awards, therefore the effects would be anti-dilutive.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
Stock Options339,123 149,367 339,123 149,367 
Restricted Stock25,352 36,490 60,727 37,490 


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Note 3. Securities
The following table presents the amortized cost and fair value of securities available-for-sale at the dates indicated:
September 30, 2023
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
(Dollars in thousands)
Available-for-Sale Debt Securities:
U.S. Government Agencies
$53,994 $— $(9,893)$44,101 
Obligations of States and Political Subdivisions
13,813 — (1,139)12,674 
Mortgage-Backed Securities - Government-Sponsored Enterprises
41,598 — (5,830)35,768 
Collateralized Mortgage Obligations - Government Sponsored Enterprises89,505 — (18,916)70,589 
Corporate Debt9,485 — (2,042)7,443 
Total Available-for-Sale Debt Securities208,395 — (37,820)170,575 
Equity Securities:
Mutual Funds
868 
Other
1,461 
Total Equity Securities2,329 
Total Securities$172,904 
December 31, 2022
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
(Dollars in thousands)
Available-for-Sale Debt Securities:
U.S. Government Agencies
$53,993 $— $(9,359)$44,634 
Obligations of States and Political Subdivisions
14,053 — (711)13,342 
Mortgage-Backed Securities - Government-Sponsored Enterprises
46,345 — (4,918)41,427 
Collateralized Mortgage Obligations - Government Sponsored Enterprises96,930 — (17,288)79,642 
Corporate Debt9,487 — (1,172)8,315 
Total Available-for-Sale Debt Securities220,808 — (33,448)187,360 
Equity Securities:
Mutual Funds
875 
Other
1,823 
Total Equity Securities2,698 
Total Securities$190,058 
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The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at the dates indicated:
September 30, 2023
Less than 12 months
12 Months or Greater
Total
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
(Dollars in thousands)
U.S. Government Agencies
— $— $— 13 $44,101 $(9,893)13 $44,101 $(9,893)
Obligations of States and Political Subdivisions
527 (17)32 12,147 (1,122)33 12,674 (1,139)
Mortgage Backed Securities- Government Sponsored Enterprises
— — — 42 35,768 (5,830)42 35,768 (5,830)
Collateralized Mortgage Obligations - Government Sponsored Enterprises— — — 21 70,589 (18,916)21 70,589 (18,916)
Corporate Debt— — — 7,443 (2,042)7,443 (2,042)
Total$527 $(17)111 $170,048 $(37,803)112 $170,575 $(37,820)
December 31, 2022
Less than 12 months
12 Months or Greater
Total
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
(Dollars in thousands)
U.S. Government Agencies
$2,600 $(400)12 $42,034 $(8,959)13 $44,634 $(9,359)
Obligations of States and Political Subdivisions
34 13,342 (711)— — — 34 13,342 (711)
Mortgage Backed Securities- Government Sponsored Enterprises
34 19,433 (1,018)21,994 (3,900)42 41,427 (4,918)
Collateralized Mortgage Obligations - Government Sponsored Enterprises12 25,395 (3,393)10 54,247 (13,895)22 79,642 (17,288)
Corporate Debt1,665 (335)6,650 (837)8,315 (1,172)
Total
82 $62,435 $(5,857)32 $124,925 $(27,591)114 $187,360 $(33,448)
For debt securities, the Company does not believe that any individual unrealized loss as of September 30, 2023 or December 31, 2022, represents a credit related impairment. The Company performs a review of the entire securities portfolio on a quarterly basis to identify securities that may indicate a credit related impairment. The unrealized losses on securities at September 30, 2023 and December 31, 2022 relate principally to changes in market interest rates subsequent to the acquisition of the specific securities.
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The Company does not intend to sell, and it is more likely than not that it will be required to sell any of the securities in an unrealized loss position before recovery of its amortized cost or maturity of the security.
Total securities available to be pledged have a fair value of $163.1 million at September 30, 2023 and $179.0 million at December 31, 2022 of which securities with a fair value of $152.1 million and $175.6 million at September 30, 2023 and December 31, 2022, respectively, were pledged to secure uninsured public deposits, short-term borrowings and for other purposes as required or permitted by law.
The following table presents the scheduled maturities of debt securities as of the date indicated:
September 30, 2023
Amortized
Cost
Fair
Value
(Dollars in thousands)
Due in One Year or Less
$— $— 
Due after One Year through Five Years
31,868 27,619 
Due after Five Years through Ten Years
51,926 43,070 
Due after Ten Years
124,601 99,886 
Total
$208,395 $170,575 
The following table presents the gain and loss on equity securities from both realized sales and unrealized market adjustments for the periods indicated. There were no realized gain or loss on sales of debt securities for the periods indicated. All gains and losses presented in the table below are reported in Net Loss on Securities on the Consolidated Statements of Income.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
(Dollars in thousands)
Equity Securities
Net Unrealized Loss Recognized on Securities Held$(37)$(46)$(369)$(252)
Net Realized Gain Recognized on Securities Sold— — — — 
Net Loss on Equity Securities$(37)$(46)$(369)$(252)
Net Loss on Securities$(37)$(46)$(369)$(252)
Note 4. Loans and Allowance for Credit Losses
The Company’s loan portfolio is segmented to enable management to monitor risk and performance. Real estate loans are further segregated into three classes. Residential mortgages include those secured by residential properties and include home equity loans, while commercial mortgages consist of loans to commercial borrowers secured by commercial real estate. Construction loans typically consist of loans to build commercial buildings and acquire and develop residential real estate. The commercial and industrial segment consists of loans to finance the activities of commercial customers. The consumer segment consists primarily of indirect auto loans as well as personal installment loans and personal or overdraft lines of credit.
Residential mortgage loans are typically longer-term loans and, therefore, generally present greater interest rate risk than the consumer and commercial loans. Under certain economic conditions, housing values may decline, which may increase the risk that the collateral values are not sufficient.
Commercial real estate loans generally present a higher level of credit risk than loans secured by residences. This greater risk is due to several factors, including the concentration of principal in a limited number of loans and borrowers, the effect of general economic conditions on income-producing properties, and the increased difficulty in evaluating and monitoring these types of loans. Furthermore, the repayment of commercial real estate loans is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced (for example, if leases are not obtained or renewed, a bankruptcy court modifies a lease term, or a major tenant is unable to fulfill its lease obligations), the borrower’s ability to repay the loan may be impaired.
Construction loans are originated to individuals to finance the construction of residential dwellings and are also originated for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses. Construction loans generally provide for the payment of interest only during the construction
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phase, which is usually 12 to 18 months. At the end of the construction phase, the loan generally converts to a permanent residential or commercial mortgage loan. Construction loan risks include overfunding in comparison to the plans, untimely completion of work, and leasing and stabilization after project completion.
Commercial and industrial loans are generally secured by inventories, accounts receivable, and other business assets, which present collateral risk.
Consumer loans generally have higher interest rates and shorter terms than residential mortgage loans; however, they have additional credit risk due to the type of collateral securing the loan.
The following table presents the classifications of loans as of the dates indicated.
September 30, 2023December 31, 2022
(Dollars in thousands)
Real Estate:
Residential
$346,485 $330,725 
Commercial
466,910 436,805 
Construction
41,874 44,923 
Commercial and Industrial
100,873 70,044 
Consumer
122,516 146,927 
Other
23,856 20,449 
Total Loans
1,102,514 1,049,873 
Allowance for Credit Losses(10,848)(12,819)
Loans, Net
$1,091,666 $1,037,054 

There were $5,000 of net PPP loan origination fees earned for the nine months ended September 30, 2023, compared to $651,000 for the nine months ended September 30, 2022. All PPP loans are classified as commercial and industrial loans held for investment. No allowance for credit loss was allocated to the PPP loan portfolio due to the Bank complying with the lender obligations that ensure SBA guarantee.

Total unamortized net deferred loan fees were $1.1 million and $1.2 million at September 30, 2023 and December 31, 2022, respectively.

The Company uses an eight-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first four categories are not considered criticized and are aggregated as “pass” rated. The criticized rating categories used by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are below average quality, resulting in an undue credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans classified as doubtful have all the weaknesses inherent in loans classified as substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as Loss are considered uncollectible and of such little value that continuance as an asset is not warranted.
The following table presents the Company’s loans by year of origination, loan segmentation and risk indicator summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system as of September 30, 2023. There were no loans in the criticized category of loss.

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Classified Loans by Origination Year (as of September 30, 2023)
(dollars in thousands)20232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
Real Estate:
Residential
Pass$27,523 $48,832 $43,523 $59,212 $39,627 $108,604 $14,092 $341,413 
Special Mention— 1,329 865 — 153 997 — 3,344 
Substandard— — 154 — — 1,574 — 1,728 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total27,523 50,161 44,542 59,212 39,780 111,175 14,092 346,485 
Commercial
Pass49,906 74,121 89,886 49,511 40,647 118,618 1,889 424,578 
Special Mention— 3,181 5,239 2,864 13,468 7,061 — 31,813 
Substandard— — — — 2,795 7,724 — 10,519 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total49,906 77,302 95,125 52,375 56,910 133,403 1,889 466,910 
Construction
Pass9,357 10,425 4,761 7,780 — — 791 33,114 
Special Mention4,496 3,601 663 — — — — 8,760 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total13,853 14,026 5,424 7,780 — — 791 41,874 
Commercial and Industrial
Pass26,186 15,075 8,934 5,879 3,354 3,570 29,023 92,021 
Special Mention— — — 15 168 3,239 1,121 4,543 
Substandard— — — — — 4,309 — 4,309 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total26,186 15,075 8,934 5,894 3,522 11,118 30,144 100,873 
Consumer
Pass13,561 53,164 28,208 12,122 4,757 5,703 4,917 122,432 
Special Mention— — — — — — — — 
Substandard— — — — — 84 — 84 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total13,561 53,164 28,208 12,122 4,757 5,787 4,917 122,516 
Other
Pass55 15,548 44 671 1,303 3,775 851 22,247 
Special Mention— 1,609 — — — — — 1,609 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total55 17,157 44 671 1,303 3,775 851 23,856 
Total Loans$131,084 $226,885 $182,277 $138,054 $106,272 $265,258 $52,684 $1,102,514 
Gross Charge Offs$— $161 $41 $— $— $239 $37 $478 

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The following table presents the Company’s loan segmentation and risk indicator summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system as of December 31, 2022, prior to the adoption of ASU 2016-13:
December 31, 2022
Pass
Special
Mention
Substandard
Doubtful
Total
(Dollars in Thousands)
Real Estate:
Residential
$327,531 $1,180 $2,014 $— $330,725 
Commercial
395,168 29,680 11,957 — 436,805 
Construction
42,693 1,912 318 — 44,923 
Commercial and Industrial
58,562 10,977 90 415 70,044 
Consumer
146,807 — 120 — 146,927 
Other
20,394 55 — — 20,449 
Total Loans
$991,155 $43,804 $14,499 $415 $1,049,873 
The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of the dates indicated.
September 30, 2023
Loans
Current
30-59
Days
Past Due
60-89
Days
Past Due
90 Days
Or More
Past Due
Total
Past Due
Non-
Accrual
Total
Loans
(Dollars in Thousands)
Real Estate:
Residential
$341,115 $3,605 $38 $— $3,643 $1,727 $346,485 
Commercial
465,527 250 — — 250 1,133 466,910 
Construction
41,874 — — — — — 41,874 
Commercial and Industrial
100,531 — — — — 342 100,873 
Consumer
121,616 761 55 — 816 84 122,516 
Other
23,856 — — — — — 23,856 
Total Loans
$1,094,519 $4,616 $93 $— $4,709 $3,286 $1,102,514 
December 31, 2022
Loans
Current
30-59
Days
Past Due
60-89
Days
Past Due
90 Days
Or More
Past Due
Total
Past Due
Non-
Accrual
Total
Loans
(Dollars in Thousands)
Real Estate:
Residential
$325,591 $3,451 $34 $— $3,485 $1,649 $330,725 
Commercial
434,933 58 — — 58 1,814 436,805 
Construction
44,923 — — — — — 44,923 
Commercial and Industrial
69,621 — — 415 70,044 
Consumer
145,887 854 66 — 920 120 146,927 
Other
20,449 — — — — — 20,449 
Total Loans
$1,041,404 $4,371 $100 $— $4,471 $3,998 $1,049,873 

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Additional interest income that would have been recorded if the loans that were nonaccrual at September 30, 2023 were current was $41,000 and $127,000 for the three and nine months ended September 30, 2023, respectively, and $56,000 and $142,000 for the three and nine months ended September 30, 2022, respectively.
The following table sets forth the amounts for amortized cost basis of loans on nonaccrual status, loans past due 90 days still accruing, and categories of nonperforming assets at the date indicated.
September 30, 2023
Nonaccrual With No ACLNonaccrual With ACLLoans Past Due 90 Days Still AccruingTotal Nonperforming Assets
(Dollars in Thousands)
Nonaccrual Loans:
Real Estate:
Residential
$1,727 $— $— $1,727 
Commercial
1,133 — — 1,133 
Commercial and Industrial
342 — — 342 
Consumer
84 — — 84 
Total Nonaccrual Loans
$3,286 $— $— 3,286 
Other Real Estate Owned:
Residential
— 
Commercial
— 
Total Other Real Estate Owned
— 
Total Nonperforming Assets
$3,286 
No interest income on nonaccrual loans was recognized during the three and nine months ended September 30, 2023.
In conjunction with the adoption of ASU 2016-13, ASU 2022-02 was adopted and eliminates the troubled debt restructurings ("TDR") recognition and measurement. With the elimination of TDRs, ASU 2022-02 requires that all modifications and refinancing, including those with borrowers that are experiencing financial difficulty are subject to the modification guidance in ASC 310-20. Loan modifications could meet the definition of a new loan if certain terms of the loan are modified to the benefit of the lender and the modification to the terms of the loan are more than minor. Both of these criteria have to be met to define the modification as a new loan. If a loan modification meets the criteria of new loan, then the new loan should include the remaining net investment in the original loan, additional funds advanced, fees received, and direct loan origination costs with the refinancing or restructuring. Additionally, the effective interest rate should be recalculated based on the amortized cost basis of the new loan and reassess contractual cash flow. For the three and nine months ended September 30, 2023, there were no new loan modifications to borrowers experiencing financial difficulty in the past 12 months under the current guidance.












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The following table sets forth the amounts and categories of nonperforming assets as of December 31, 2022, prior to the adoption of ASU 2016-13. Included in nonperforming loans and assets are TDRs, which are loans whose contractual terms have been restructured in a manner which grants a concession to a borrower experiencing financial difficulties. Nonaccrual TDRs are included in their specific loan category in the nonaccrual loans section.
December 31,
2022
(Dollars in Thousands)
Nonaccrual Loans:
Real Estate:
Residential
$1,649 
Commercial
1,814 
Commercial and Industrial
415 
Consumer
120 
Total Nonaccrual Loans
3,998 
Accruing Loans Past Due 90 Days or More:
Total Accruing Loans Past Due 90 Days or More
— 
Total Nonaccrual Loans and Accruing Loans Past Due 90 Days or More
3,998 
Troubled Debt Restructurings, Accruing:
Real Estate
Residential
534 
Commercial
1,260 
Commercial and Industrial
Total Troubled Debt Restructurings, Accruing
1,801 
Total Nonperforming Loans
5,799 
Total Nonperforming Assets
$5,799 
The recorded investment of residential real estate loans for which formal foreclosure proceedings were in process according to applicable requirements of the local jurisdiction was $900,000 and $1.4 million at September 30, 2023 and December 31, 2022, respectively.

The activity in the ACL - Loans is summarized below by primary segments for the periods indicated:
Real
Estate
Residential
Real
Estate
Commercial
Real
Estate
Construction
Commercial
and
Industrial
Consumer
Other
Total
(Dollars in thousands)
June 30, 2023$2,356 $3,216 $938 $2,140 $1,848 $168 $10,666 
Charge-offs
(109)— — — (168)— (277)
Recoveries
27 — 96 36 — 168 
Provision (Recovery) for Credit Losses - Loans625 104 102 (317)(272)49 291 
September 30, 2023$2,899 $3,329 $1,040 $1,919 $1,444 $217 $10,848 
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Real
Estate
Residential
Real
Estate
Commercial
Real
Estate
Construction
Commercial
and
Industrial
Consumer
Other
Unallocated
Total
(Dollars in thousands)
December 31, 2022$2,074 $5,810 $502 $2,313 $1,517 $— $603 $12,819 
Impact of ASC 326 - Loans137 (3,244)488 (1,057)774 120 (603)(3,385)
Charge-offs
(206)— — — (272)— — (478)
Recoveries
41 32 — 862 94 — — 1,029 
Provision (Recovery) for Credit Losses - Loans853 731 50 (199)(669)97 — 863 
September 30, 2023$2,899 $3,329 $1,040 $1,919 $1,444 $217 $— $10,848 
The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (accrued interest payable and other liabilities on the Consolidated Statement of Financial Condition), with adjustments to the reserve recognized in provision for credit losses - unfunded commitments on the Consolidated Statement of Income. The Company’s activity in the allowance for credit losses on unfunded commitments for the periods ended was as follows:
(in thousands)Allowance for Credit Losses
Balance at June 30, 2023
$658 
Impact of CECL adoption— 
Provision for credit losses - unfunded commitments115 
Balance at September 30, 2023$773 

(in thousands)Allowance for Credit Losses
Balance at December 31, 2022$— 
Impact of CECL adoption719 
Provision for credit losses - unfunded commitments54 
Balance at September 30, 2023$773 

Loans that do not share risk characteristics are evaluated on an individual basis. For loans that are individually evaluated and collateral dependent, financial loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL - Loans is measured based on the difference between the fair
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value of the collateral and the amortized cost basis of the asset as of the measurement date. During the three and nine months ended September 30, 2023, there were no loans that required a credit loss to be individually assigned.
The following tables present the activity in the allowance for credit losses summarized by primary segments and segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for potential impairment at the dates and for the periods indicated, prior to the adoption of ASU 2016-13.
December 31, 2022
Real
Estate
Residential
Real
Estate
Commercial
Real
Estate
Construction
Commercial
and
Industrial
Consumer
Unallocated
Total
(Dollars in thousands)
Individually Evaluated for Impairment
$— $21 $— $$— $— $24 
Collectively Evaluated for Potential Impairment
$2,074 $5,789 $502 $2,310 $1,517 $603 $12,795 

Real
Estate
Residential
Real
Estate
Commercial
Real
Estate
Construction
Commercial
and
Industrial
Consumer
Other
Unallocated
Total
(Dollars in thousands)
June 30, 2022$1,654 $6,023 $471 $2,349 $1,502 $— $834 $12,833 
Charge-offs
— — — — (46)— — (46)
Recoveries
16 — — 38 13 — — 67 
Provision (Recovery) 148 (24)94 (211)89 — (96)— 
September 30, 2022$1,818 $5,999 $565 $2,176 $1,558 $— $738 $12,854 


Real
Estate
Residential
Real
Estate
Commercial
Real
Estate
Construction
Commercial
and
Industrial
Consumer
Other
Unallocated
Total
(Dollars in thousands)
December 31, 2021$1,420 $5,960 $1,249 $1,151 $1,050 $— $752 $11,582 
Charge-offs
(33)— — (2,712)(85)— — (2,830)
Recoveries
143 — — 106 69 — — 318 
Provision (Recovery)288 39 (684)3,631 524 — (14)3,784 
September 30, 2022$1,818 $5,999 $565 $2,176 $1,558 $— $738 $12,854 

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September 30, 2022
Real
Estate
Residential
Real
Estate
Commercial
Real
Estate
Construction
Commercial
and
Industrial
Consumer
Other
Unallocated
Total
(Dollars in thousands)
Individually Evaluated for Impairment
$— $68 $146 $— $— $— $— $214 
Collectively Evaluated for Potential Impairment
$1,818 $5,931 $419 $2,176 $1,558 $— $738 $12,640 

The following table presents the major classifications of loans summarized by individually evaluated for impairment and collectively evaluated for potential impairment as of the dates indicated, prior to the adoption of ASU 2016-13.
December 31, 2022
Real
Estate
Residential
Real
Estate
Commercial
Real
Estate
Construction
Commercial
and
Industrial
Consumer
Other
Total
(Dollars in thousands)
Individually Evaluated for Impairment
$1,042 $13,217 $318 $512 $— $— $15,089 
Collectively Evaluated for Potential Impairment
329,683 423,588 44,605 69,532 146,927 20,449 1,034,784 
Total Loans$330,725 $436,805 $44,923 $70,044 $146,927 $20,449 $1,049,873 
The following table presents changes in the accretable discount on the loans acquired at fair value at the dates indicated.
Accretable Discount
(Dollars in Thousands)
December 31, 2022$487 
Accretable Yield
(183)
September 30, 2023$304 











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Pre Adoption of ASC 326 – Impaired Loans
For periods prior to the adoption of CECL, loans were considered impaired when, based on current information and events, it was probable the Company would be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. The following table presents a summary of the loans considered to be impaired as of the date indicated.

December 31, 2022
Recorded
Investment
Related
Allowance
Unpaid
Principal
Balance
Average
Recorded
Investment
Interest
Income
Recognized
(Dollars in thousands)
With No Related Allowance Recorded:
Real Estate:
Residential
$1,042 $— $1,047 $1,085 $51 
Commercial
11,609 — 11,766 10,928 549 
Construction318 — 318 403 19 
Commercial and Industrial
505 — 777 734 35 
Total With No Related Allowance Recorded
$13,474 $— $13,908 $13,150 $654 
With A Related Allowance Recorded:
Real Estate:
Commercial
$1,608 $21 $1,608 $954 $79 
Construction— — — 830 36 
Commercial and Industrial
253 
Total With A Related Allowance Recorded
$1,615 $24 $1,615 $2,037 $116 
Total Impaired Loans
Real Estate:
Residential
$1,042 $— $1,047 $1,085 $51 
Commercial
13,217 21 13,374 11,882 628 
Construction318 — 318 1,233 55 
Commercial and Industrial
512 784 987 36 
Total Impaired Loans
$15,089 $24 $15,523 $15,187 $770 
The recorded investment of loans evaluated for impairment decreased $15.1 million at September 30, 2023 compared to December 31, 2022 and was primarily related to commercial real estate loans.

Note 5. Fair Value Disclosure
FASB ASC 820 “Fair Value Measurement” defines fair value and provides the framework for measuring fair value and required disclosures about fair value measurements. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability at the transaction date. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used in valuation methods to determine fair value.
The three levels of fair value hierarchy are as follows:
Level 1 –    Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets. These generally provide the most reliable evidence and are used to measure fair value whenever available.
Level 2 –    Fair value is based on significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets, quoted market prices in markets that are not active for identical or similar assets, and other observable inputs.
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Level 3 –    Fair value is based on significant unobservable inputs. Examples of valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows, and other similar techniques.
This hierarchy requires the use of observable market data when available. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement.
The following table presents the financial assets measured at fair value on a recurring basis and reported on the Consolidated Statements of Financial Condition as of the dates indicated, by level within the fair value hierarchy. The majority of the Company’s securities are included in Level 2 of the fair value hierarchy. Fair values for Level 2 securities were primarily determined by a third-party pricing service using both quoted prices for similar assets, when available, and model-based valuation techniques that derive fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. The standard inputs that are normally used include benchmark yields of like securities, reportable trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. There were no transfers into or out of Level 3 during the nine months ended September 30, 2023 or year ended December 31, 2022.
Fair Value
Hierarchy
September 30, 2023December 31, 2022
(Dollars in thousands)
Securities:
Available-for-Sale Debt Securities
U.S. Government Agencies
Level 2
$44,101 $44,634 
Obligations of States and Political Subdivisions
Level 2
12,674 13,342 
Mortgage-Backed Securities - Government-Sponsored Enterprises
Level 2
35,768 41,427 
Collateralized Mortgage Obligations - Government Sponsored Enterprises
Level 2
70,589 79,642 
Corporate DebtLevel 27,443 8,315 
Total Available-for-Sale Debt Securities170,575 187,360 
Equity Securities
Mutual Funds
Level 1
868 875 
Other
Level 1
1,461 1,823 
Total Equity Securities2,329 2,698 
Total Securities$172,904 $190,058 
The following table presents the financial assets on the Consolidated Statements of Financial Condition measured at fair value on a nonrecurring basis as of the dates indicated by level within the fair value hierarchy for only those nonrecurring assets that had a fair value below the carrying amount. The table also presents the significant unobservable inputs used in the fair value measurements.
Financial AssetFair Value HierarchySeptember 30,
2023
Valuation
Techniques
Significant Unobservable InputsRangeWeighted Average
(Dollars in thousands)
OREOLevel 3$— 
Appraisal of Collateral (1)
Liquidation Expenses (2)
100 %to100 %100.0%
Financial AssetFair Value HierarchyDecember 31,
2022
Valuation
Techniques
Significant Unobservable InputsRangeWeighted Average
(Dollars in thousands)
Individually Evaluated LoansLevel 3$1,591 
Appraisal of Collateral (1)
Appraisal Adjustments (2)
%to%
7.2%
(1)Fair value is generally determined through independent appraisals of the underlying collateral, which may include various Level 3 inputs, which are not identifiable.
(2)Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of appraisal adjustments and liquidation expense are presented as a percent of the appraisal.
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Expected credit losses on individually evaluated loans deemed to be collateral dependent are valued based upon the lower of amortized cost or fair value of the underlying collateral less costs to sell. Fair value is measured based on the value of the collateral securing these loans and is classified as Level 3 in the fair value hierarchy. At September 30, 2023, the Company did not have any loans that would be required to be remeasured. At December 31, 2022, the fair value of individually evaluated loans consisted of loan balances of $1.6 million less their specific valuation allowances of $24,000.
The fair value of mortgage servicing rights ("MSRs") is determined by calculating the present value of estimated future net servicing cash flows, considering expected mortgage loan prepayment rates, discount rates, servicing costs and other economic factors, which are determined based on current market conditions. The expected rate of mortgage loan prepayments is the most significant factor driving the value of MSRs. MSRs are considered impaired if the carrying value exceeds fair value. Since the valuation model includes significant unobservable inputs as listed above, MSRs are classified as Level 3. MSRs are reported in Other Assets in the Consolidated Statements of Financial Condition and are amortized into mortgage servicing income in Other Income in the Consolidated Statements of Income. At September 30, 2023 and December 31, 2022, the Company did not have any MSRs that would be required to be remeasured.
OREO properties are evaluated at the time of acquisition and recorded at fair value, less estimated selling costs. After acquisition, OREO is recorded at the lower of cost or fair value, less estimated selling costs. The fair value of an OREO property is determined from a qualified independent appraisal and is classified as Level 3 in the fair value hierarchy. As of September 30, 2023, OREO measured at fair value less costs to sell had no net carrying value, which consisted of the outstanding balance of $37,000 less write-downs of $37,000.
Financial instruments are defined as cash, evidence of an ownership in an entity, or a contract which creates an obligation or right to receive or deliver cash or another financial instrument from/to a second entity on potentially favorable or unfavorable terms.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If no readily available market exists, the fair value estimates for financial instruments should be based upon management’s judgment regarding current economic conditions, interest rate risk, expected cash flows, future estimated losses and other factors, as determined through various option pricing formulas or simulation modeling. As many of these assumptions result from judgments made by management based upon estimates which are inherently uncertain, the resulting estimated fair values may not be indicative of the amount realizable in the sale of a particular financial instrument. In addition, changes in the assumptions on which the estimated fair values are based may have significant impact on the resulting estimated fair values.
As certain assets such as deferred tax assets and premises and equipment are not considered financial instruments, the estimated fair value of financial instruments would not represent the full value of the Company.
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The following table presents the estimated fair values of the Company’s financial instruments at the dates indicated.
September 30, 2023December 31, 2022
Fair Value
Hierarchy
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
(Dollars in thousands)
Financial Assets:
Cash and Due From Banks:
Interest-Earning
Level 1
$45,898 $45,898 $82,957 $82,957 
Noninterest-Earning
Level 1
6,699 6,699 20,743 20,743 
Securities
See Above
172,904 172,904 190,058 190,058 
Loans, Net
Level 3
1,091,666 1,038,708 1,037,054 1,011,098 
Restricted Stock
Level 2
3,266 3,266 2,749 2,749 
Mortgage Servicing RightsLevel 3562 1,005 633 1,000 
Accrued Interest Receivable
Level 2
4,583 4,583 3,983 3,983 
Financial Liabilities:
Deposits
Level 2
1,236,289 1,233,322 1,268,503 1,264,846 
Short-Term Borrowings
Level 2
— — 8,060 8,060 
Other Borrowed Funds
FHLB BorrowingsLevel 220,000 19,847 — — 
Subordinated DebtLevel 214,668 12,491 14,638 13,490 
Accrued Interest Payable
Level 2
1,745 1,745 355 355 
Note 6. Commitments and Contingent Liabilities
The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business primarily to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and performance letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.
The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby and performance letters of credit written is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

The following table presents the unused and available credit balances of financial instruments whose contracts represent credit risk at the dates indicated.
September 30,
2023
December 31,
2022
(Dollars in thousands)
Standby Letters of Credit
$110 $110 
Performance Letters of Credit
915 1,064 
Construction Mortgages
54,734 45,722 
Personal Lines of Credit
7,676 6,824 
Overdraft Protection Lines
4,728 5,241 
Home Equity Lines of Credit
23,161 22,784 
Commercial Lines of Credit
71,554 74,921 
Total Commitments
$162,878 $156,666 

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Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the customer. Because many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties.
Performance letters of credit represent conditional commitments issued by the Company to guarantee the performance of a customer to a third party. These instruments are issued primarily to support bid or performance-related contracts. The coverage period for these instruments is typically a one-year period with an annual renewal option subject to prior approval by management. Fees earned from the issuance of these letters are recognized upon expiration of the letter. For secured letters of credit, the collateral is typically Company deposit instruments or customer business assets.
Note 7. Leases
The Company evaluates contracts at commencement to determine if a lease is present. The Company’s lease contracts are all classified as operating leases and create operating right-of-use (“ROU”) assets and corresponding lease liabilities on the Consolidated Statements of Financial Condition. The leases are primarily ROU assets of land and building for branch and loan production locations. ROU assets are reported in Accrued Interest Receivable and Other Assets and the related lease liabilities in Accrued Interest Payable and Other Liabilities on the Consolidated Statements of Financial Condition.

The following tables present the lease expense, ROU assets, weighted average term, discount rate and maturity analysis of lease liabilities for operating leases for the periods and dates indicated.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
(Dollars in thousands)
Operating Lease Expense$77 $89 $231 $261 
Short-Term Lease Expense— — — — 
Variable Lease Expense22 21 
Total Lease Expense$84 $96 $253 $282 

September 30,
2023
December 31,
2022
(Dollars in thousands)
Operating Leases:
ROU Assets$1,737 $1,926 
Weighted Average Lease Term in Years7.658.13
Weighted Average Discount Rate2.87 %2.87 %

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September 30,
2023
(Dollars in thousands)
Maturity Analysis:
Due in One Year$358 
Due After One Year to Two Years301 
Due After Two Years to Three Years233 
Due After Three Years to Four Years236 
Due After Four to Five Years213 
Due After Five Years730 
Total$2,071 
Less: Present Value Discount209 
Lease Liabilities$1,862 

There were no new lease agreements entered into during the nine months ended September 30, 2023. During the nine months ended September 30, 2022, the Company entered into a new lease agreement for the McMurray, PA branch, for a 10-year term ending March 31, 2032, as well as a new lease agreement for the Waynesburg branch, for a 5-year term ending July 31, 2027.

Note 8. Other Noninterest Expense
The details of other noninterest expense for the Company’s Consolidated Statements of Income for the periods indicated are as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023202220232022
(Dollars in thousands)
Non-Employee Compensation$146 $139 $448 $410 
Printing and Supplies50 63 174 190 
Postage58 163 221 300 
Telephone128 132 396 390 
Charitable Contributions32 39 90 120 
Dues and Subscriptions37 24 159 121 
Loan Expenses56 209 203 459 
Meals and Entertainment40 33 81 101 
Travel62 43 167 116 
Training13 10 64 41 
Bank Assessment47 47 145 141 
Insurance86 70 243 201 
Miscellaneous123 91 327 309 
Total Other Noninterest Expense$878 $1,063 $2,718 $2,899 
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Note 9. Segment and Related Information
At September 30, 2023, the Company’s business activities were comprised of two operating segments, which are community banking and insurance brokerage services. CB Financial is the parent company of the Bank and Exchange Underwriters, a wholly owned subsidiary of the Bank. Exchange Underwriters has an independent board of directors from the Company and is managed separately from the banking and related financial services that the Company offers. Exchange Underwriters is an independent insurance agency that offers property, casualty, commercial liability, surety and other insurance products.

The following is a table of selected financial data for the Company’s subsidiaries and consolidated results at the dates and for the periods indicated.
Community BankExchange Underwriters, Inc.CB Financial Services, Inc.Net EliminationsConsolidated
(Dollars in thousands)
September 30, 2023
Assets$1,399,834 $5,395 $129,649 $(135,386)$1,399,492 
Liabilities1,287,073 1,942 14,803 (19,172)1,284,646 
Stockholders' Equity112,761 3,453 114,846 (116,214)114,846 
December 31, 2022
Assets$1,409,510 $5,585 $124,879 $(131,036)$1,408,938 
Liabilities1,301,783 1,996 14,724 (19,720)1,298,783 
Stockholders' Equity107,727 3,589 110,155 (111,316)110,155 
Three Months Ended September 30, 2023
Interest and Dividend Income$15,853 $$1,298 $(1,278)$15,874 
Interest Expense5,002 — 155 — 5,157 
Net Interest and Dividend Income10,851 1,143 (1,278)10,717 
Provision for Credit Losses - Loans291 — — — 291 
Provision for Credit Losses - Unfunded Commitments115 — — — 115 
Net Interest and Dividend Income After Provision for Credit Losses10,445 1,143 (1,278)10,311 
Noninterest Income (Loss)1,006 1,436 (30)— 2,412 
Noninterest Expense8,344 1,137 — 9,487 
Undistributed Net Income of Subsidiary214 — 1,529 (1,743)— 
Income Before Income Tax Expense (Benefit)3,321 300 2,636 (3,021)3,236 
Income Tax Expense (Benefit)514 86 (36)— 564 
Net Income$2,807 $214 $2,672 $(3,021)$2,672 
Nine Months Ended September 30, 2023
Interest and Dividend Income$45,257 $$3,889 $(3,830)$45,321 
Interest Expense11,436 — 466 — 11,902 
Net Interest and Dividend Income33,821 3,423 (3,830)33,419 
Provision for Credit Losses - Loans863 — — — 863 
Provision for Credit Losses - Unfunded Commitments54 — — — 54 
Net Interest and Dividend Income After Provision for Credit Losses32,904 3,423 (3,830)32,502 
Noninterest Income (Loss)2,918 4,937 (362)— 7,493 
Noninterest Expense24,725 3,281 11 — 28,017 
Undistributed Net Income of Subsidiary1,179 — 6,372 (7,551)— 
Income Before Income Tax Expense (Benefit)12,276 1,661 9,422 (11,381)11,978 
Income Tax Expense (Benefit)2,074 482 (164)— 2,392 
Net Income$10,202 $1,179 $9,586 $(11,381)$9,586 
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Community BankExchange Underwriters, Inc.CB Financial Services, Inc.Net EliminationsConsolidated
(Dollars in thousands)
Three Months Ended September 30, 2022
Interest and Dividend Income$12,267 $$1,246 $(1,227)$12,287 
Interest Expense1,117 — 155 — 1,272 
Net Interest and Dividend Income11,150 1,091 (1,227)11,015 
Provision for Credit Losses— — — — — 
Net Interest and Dividend Income After Provision for Credit Losses11,150 1,091 (1,227)11,015 
Noninterest Income (Loss)1,343 1,406 (10)— 2,739 
Noninterest Expense7,741 1,082 — 8,827 
Undistributed Net Income of Subsidiary230 — 2,807 (3,037)— 
Income Before Income Tax (Benefit) Expense4,982 325 3,884 (4,264)4,927 
Income Tax (Benefit) Expense948 95 (45)— 998 
Net Income$4,034 $230 $3,929 $(4,264)$3,929 
Nine Months Ended September 30, 2022
Interest and Dividend Income$33,802 $$3,779 $(3,724)$33,861 
Interest Expense2,325 — 467 — 2,792 
Net Interest and Dividend Income31,477 3,312 (3,724)31,069 
Provision for Credit Losses3,784 — — — 3,784 
Net Interest and Dividend Income After Provision for Credit Losses27,693 3,312 (3,724)27,285 
Noninterest Income (Loss)3,023 4,572 (136)— 7,459 
Noninterest Expense22,806 3,074 13 — 25,893 
Undistributed Net Income of Subsidiary1,064 — 3,762 (4,826)— 
Income Before Income Tax Expense (Benefit)8,974 1,502 6,925 (8,550)8,851 
Income Tax Expense (Benefit)1,488 438 (169)— 1,757 
Net Income$7,486 $1,064 $7,094 $(8,550)$7,094 
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Note 10. Stock Based Compensation
The following table presents stock option information for the period indicated.
Number of SharesWeighted Average Exercise PriceWeighted Average Remaining Contractual
Life in Years
Outstanding Options at December 31, 2022283,748 $24.52 5.6
Granted68,975 21.63 
Exercised(2,000)22.25 
Forfeited(2,600)25.25 
Outstanding Options at September 30, 2023348,123 $23.95 5.8
Exercisable Options at September 30, 2023192,549 $24.45 3.3
Number of SharesWeighted Average Exercise PriceWeighted Average Remaining Service Period in Years
Nonvested Options at September 30, 2023155,574 $23.34 8.8
Summary of Significant Assumptions for Newly Issued Stock Options
Expected Term in Years6.5
Expected Volatility29.5 %
Expected Dividends$1.00 
Risk Free Rate of Return3.63 %
Weighted Average Grant Date Fair Value (per share)$4.37 
The following table presents restricted stock award information for the period indicated
Number of SharesWeighted Average Grant Date Fair Value PriceWeighted Average Remaining Service Period in Years
Nonvested Restricted Stock at December 31, 202264,125 $24.32 4.3
Granted33,975 21.76 
Vested(5,408)24.63 
Forfeited(860)24.36 
Nonvested Restricted Stock at September 30, 202391,832 $23.36 3.9
The Company recognizes expense over a five-year vesting period for the restricted stock awards and stock options. Stock-based compensation expense related to restricted stock awards and stock options was $196,000 and $145,000 for the three months ended September 30, 2023 and 2022. Stock based compensation was $557,000 and $424,000 for the nine months ended September 30, 2023 and 2022.
As of September 30, 2023 and December 31, 2022, total unrecognized compensation expense was $609,000 and $430,000, respectively, related to stock options, and $1.7 million and $1.4 million, respectively, related to restricted stock awards.
Intrinsic value represents the amount by which the fair value of the underlying stock at September 30, 2023 and December 31, 2022 exceeds the exercise price of the stock options. The intrinsic value of stock options was $47,000 and $25,000 at September 30, 2023 and December 31, 2022, respectively.
At September 30, 2023 and December 31, 2022, respectively, there were 181,275 and 333,335 shares available under the Plan to be issued in connection with the exercise of stock options, and 72,510 and 133,334 shares that may be issued as restricted stock awards or units. Restricted stock awards or units may be issued above this amount provided that the number of shares reserved for stock options is reduced by two and one-half shares for each restricted stock award or unit share granted.
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Note 11. Subsequent Events
The Company evaluated subsequent events through the date the consolidated financial statements were filed with the SEC and incorporated into the consolidated financial statements the effect of all material known events determined by Accounting Standards Codification ("ASC") 855, Subsequent Events, to be recognizable events. The following item was deemed to be a subsequent event by the Company.
On October 12, 2023, the Bank received email notification from one of its third-party vendors (the "Vendor") that the Vendor used MOVEit Transfer ("MOVEit"), a managed file transfer software developed and maintained by Progress Software Corporation ("PSC"), to transfer information in connection with processing of Bank customer accounts and item processing of Bank customer accounts, including check images, deposit slips, remote deposit capture files, and reports. The Vendor informed the Bank that its review indicates that the affected files included the following data elements for some or all of the affected Bank customers and accounts: name, business name, address, state, telephone number, date of birth, full social security number, tax ID number, account number, and routing number. The Bank estimates that approximately 33% of its customers and approximately 26% of customer accounts are affected by the Vendor incident. The Bank has notified the affected customers in writing about the Vendor incident.
PSC recently disclosed a zero-day vulnerability, a previously unknown flaw, in MOVEit that could enable malicious actors to gain unauthorized access to sensitive files and information. MOVEit is the subject of a widely reported cybersecurity event impacting numerous private organizations and governmental agencies. The Vendor, and not the Bank itself, uses MOVEit, and the Vendor has informed the Bank that it has rectified the vulnerability that allowed the incident to occur.
The Bank, along with numerous other financial institutions, uses the Vendor for certain regulatory compliance and operational support services, including account hosting and transaction processing. The Vendor has notified law enforcement and its regulators about the Vendor incident. The Bank has notified its primary banking regulators about the Vendor incident, and will continue to keep them informed.
The Company has incurred certain expenses relating to the Vendor incident, and may incur additional expenses. While the Company continues to evaluate the full scope and impact of the Vendor incident, the Company does not currently believe the Vendor incident will have a material adverse effect on the Bank's business and operations or the Company's consolidated financial statements.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This discussion should be read in conjunction with the unaudited consolidated financial statements, notes and tables included in this report. For further information, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Forward-Looking Statements
This report contains certain “forward-looking statements” within the meaning of the federal securities laws. These statements are not historical facts, but rather statements based on the Company’s current expectations regarding its business strategies, intended results and future performance. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions. Management’s ability to predict results or the effect of future plans or strategies is inherently uncertain. Factors which could affect actual results include, but are not limited to, the following:
General and local economic conditions;
Our ability to realize the expected cost savings and other efficiencies related to our branch optimization and operational efficiency initiatives;
Changes in market interest rates, deposit flows, demand for loans, real estate values and competition;
Competitive products and pricing;
The ability of our customers to make scheduled loan payments;
Loan delinquency rates and trends;
Our ability to manage the risks involved in our business;
Our ability to integrate the operations of businesses we acquire;
Our ability to control costs and expenses;
Inflation, market and monetary fluctuations;
Changes in federal and state legislation and regulation applicable to our business;
Actions by our competitors; and
Other factors disclosed in the Company’s periodic reports as filed with the Securities and Exchange Commission.
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These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.
General
CB Financial Services is a bank holding company established in 2006 and headquartered in Carmichaels, Pennsylvania. CB Financial’s business activity is conducted primarily through its wholly owned bank subsidiary, Community Bank.
The Bank is a Pennsylvania-chartered commercial bank headquartered in Carmichaels, Pennsylvania. The Bank operates from 10 branches in Greene, Allegheny, Washington, Fayette and Westmoreland Counties in southwestern Pennsylvania and three offices in Marshall and Ohio Counties in West Virginia. The Bank also has a loan production office in Allegheny County, a corporate center in Washington County and an operations center in Greene County, all of which are in Pennsylvania. The Bank is a community-oriented institution offering residential and commercial real estate loans, commercial and industrial loans, and consumer loans as well as a variety of deposit products for individuals and businesses in its market area. Property and casualty, commercial liability, surety and other insurance products are offered through Exchange Underwriters, Inc., the Bank’s wholly owned subsidiary that is a full-service, independent insurance agency located in Washington County.
Overview
The following discussion and analysis is presented to assist in the understanding and evaluation of our consolidated financial condition and results of operations. It is intended to complement the unaudited consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q and should be read in conjunction therewith. The detailed discussion focuses on our consolidated financial condition as of September 30, 2023, compared to the consolidated financial condition as of December 31, 2022 and the consolidated results of operations for the three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022.
Our results of operations depend primarily on our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets and the interest we pay on our interest-bearing liabilities. Our results of operations also are affected by our provision for credit losses, noninterest income and noninterest expense. Noninterest income consists primarily of fees and service charges on deposit accounts, insurance commissions, income from bank-owned life insurance and other income. Noninterest expense consists primarily of expenses related to salaries and employee benefits, occupancy and equipment, data processing, contracted services, legal and professional fees, advertising, deposit and general insurance and other expenses.
Financial institutions like us, in general, are significantly affected by economic conditions, competition, and the monetary and fiscal policies of the federal government. Lending activities are influenced by the demand for and supply of housing, competition among lenders, interest rate conditions, and funds availability. Our operations and lending are principally concentrated in southwestern Pennsylvania and Ohio Valley market areas.

Explanation of Use of Non-GAAP Financial Measures
In addition to financial measures presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures. We believe these non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar non-GAAP measures which may be presented by other companies. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein.
The interest income on interest-earning assets, net interest rate spread and net interest margin are presented on a fully tax-equivalent (“FTE”) basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and securities using the federal statutory income tax rate of 21.0%. We believe the presentation of net interest income on a FTE basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice.
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The following table reconciles net interest income, net interest spread and net interest margin on a FTE basis for the periods indicated:
Three Months Ended
Nine Months Ended
September 30,September 30,
2023202220232022
(Dollars in thousands)
Interest Income (GAAP)$15,874 $12,287 $45,321 $33,861 
Adjustment to FTE Basis
43 31 111 105 
Interest Income (FTE) (Non-GAAP)
15,917 12,318 45,432 33,966 
Interest Expense (GAAP)5,157 1,272 11,902 2,792 
Net Interest Income (FTE) (Non-GAAP)
$10,760 $11,046 $33,530 $31,174 
Net Interest Rate Spread (GAAP)
2.54 %3.10 %2.80 %3.03 %
Adjustment to FTE Basis
0.01 0.01 0.01 0.01 
Net Interest Rate Spread (FTE) (Non-GAAP)
2.55 3.11 2.81 3.04 
Net Interest Margin (GAAP)
3.13 %3.29 %3.31 %3.17 %
Adjustment to FTE Basis
0.01 0.01 0.01 0.01 
Net Interest Margin (FTE) (Non-GAAP)
3.14 3.30 3.32 3.18 
Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by period-end common shares outstanding. We believe this non-GAAP measure serves as a useful tool to help evaluate the strength and discipline of the Company's capital management strategies and as an additional, conservative measure of the Company’s total value.
September 30,
2023
December 31, 2022
(Dollars in thousands, except share and per share data) 
Stockholders' Equity (GAAP)$114,846 $110,155 
Goodwill and Other Intangible Assets, Net(11,909)(13,245)
Tangible Common Equity or Tangible Book Value (Non-GAAP) (Numerator)$102,937 $96,910 
Common Shares Outstanding (Denominator)5,120,678 5,100,189 
Book Value per Common Share (GAAP)$22.43 $21.60 
Tangible Book Value per Common Share (Non-GAAP)$20.10 $19.00 
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Consolidated Statements of Financial Condition Analysis
Assets
Total assets decreased $9.4 million, or 0.7%, to $1.40 billion at September 30, 2023 compared to $1.41 billion at December 31, 2022.
Cash and Securities
Cash and due from banks decreased $51.1 million, or 49.3%, to $52.6 million at September 30, 2023, compared to $103.7 million at December 31, 2022, due to loan growth.
Securities decreased $17.2 million, or 9.0%, to $172.9 million at September 30, 2023, compared to $190.1 million at December 31, 2022. The securities balance was primarily impacted by $12.4 million of repayments on mortgage-backed and collateralized mortgage obligation securities and a $369,000 decrease in the market value of the equity securities portfolio, which is primarily comprised of bank stocks.

Loans, Allowance for Credit Losses (ACL) and Credit Quality
Total loans increased $52.6 million, or 5.0%, to $1.10 billion at September 30, 2023 compared to $1.05 billion at December 31, 2022. Loan growth was driven by increases in commercial and industrial loans, commercial real estate loans and residential mortgage loans of $30.8 million, $30.1 million, and $15.8 million, respectively, partially offset by a decrease in consumer loans of $24.4 million. Growth in commercial and industrial loans included the purchase of $8.9 million of syndicated loans. The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to rising market interest rates and the discontinuation of this product offering as of June 30, 2023.
The ACL - Loans was $10.8 million at September 30, 2023 and $12.8 million at December 31, 2022. As a result, the ACL - Loans to total loans was 0.98% at September 30, 2023 compared to 1.22% at December 31, 2022. The change in the ACL -Loans was primarily due to the Company's adoption of CECL. At adoption, the Company decreased its ACL - Loans by $3.4 million. Contributing to the change in ACL - Loans was a prior year charge-off of $2.7 million and qualitative factors that significantly impacted the incurred loss model driven by historical activity compared to the newly adopted CECL methodology that is centered around using a forecast approach.
Net charge-offs for the three months ended September 30, 2023 were $109,000, or 0.04% of average loans on an annualized basis. Net recoveries for the three months ended September 30, 2022 were $21,000, or 0.01% of average loans on an annualized basis. Net recoveries for the nine months ended September 30, 2023 were $551,000 primarily due to recoveries totaling $750,000 related to the aforementioned prior year charged-off loan. Net charge-offs for the nine months ended September 30, 2022 were $2.5 million.
Nonperforming loans, which include nonaccrual loans and accruing loans past due 90 days or more, were $3.3 million at September 30, 2023 compared to $5.8 million at December 31, 2022. The decrease of $2.5 million was due to ten loans totaling $1.7 million transferred from nonaccrual to accrual status during the current period and the repayment of a $1.6 million commercial real estate loan that was previously on nonaccrual status. Partially offsetting these favorable movements, a $757,000 commercial real estate loan moved to nonaccrual status during the period. Nonperforming loans to total loans ratio was 0.30% at September 30, 2023 compared to 0.55% at December 31, 2022.
Other
Intangible assets decreased $1.3 million, or 37.0%, to $2.2 million at September 30, 2023 compared to $3.5 million at December 31, 2022 primarily due to amortization expense recognized during the period.
Accrued interest and other assets increased $5.5 million or 26.0%, to $26.7 million at September 30, 2023, compared to $21.1 million at December 31, 2022 due to the sale of a $2.0 million syndicated loan which was sold but not yet settled at September 30, 2023, and increases in prepaid expenses and accrued interest receivable of $1.2 million and $600,000.
Liabilities
Total liabilities decreased $14.1 million, or 1.1%, to $1.28 billion at September 30, 2023 compared to $1.30 billion at December 31, 2022.
Deposits
Total deposits decreased $32.2 million to $1.24 billion as of September 30, 2023 compared to $1.27 billion at December 31, 2022. Noninterest-bearing demand deposits decreased $85.3 million, savings deposits decreased $40.9 million and money market deposits decreased $19.9 million, while interest-bearing demand deposits increased $45.6 million and time deposits increased $68.3 million,. The increase in interest-bearing demand deposits was primarily the result of higher interest rates attracting more customers and/or additional deposits from existing customers while higher
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time deposits resulted from the offering of a higher-rate certificate of deposit product. FDIC insured deposits totaled approximately 60.5% of total deposits while an additional 16.9% of deposits were collateralized with investment securities at September 30, 2023.
Borrowings
Long-term borrowings increased $20.0 million, or 136.6%, to $34.7 million at September 30, 2023, compared to $14.6 million at December 31, 2022. During the second quarter, the Bank entered into $20.0 million of FHLB advances for a term of 24 months at 4.92% per annum, the proceeds of which were utilized to match fund originations within the Bank's commercial and industrial loan portfolio.
Short-term borrowings decreased $8.1 million, or 100.0%, as there were no short-term borrowings at September 30, 2023, compared to $8.1 million at December 31, 2022. At December 31, 2022, short-term borrowings were comprised entirely of securities sold under agreements to repurchase. These accounts were transitioned into other deposit products and account for a portion of the interest-bearing demand deposit increase.
Accrued Interest Payable and Other Liabilities
Accrued interest payable and other liabilities increased $6.1 million, or 80.5%, to $13.7 million at September 30, 2023, compared to $7.6 million at December 31, 2022 primarily due to the purchase of $3.9 million of syndicated loans which were unfunded at the end of the period and a $1.1 million increase in accrued interest payable on certificate accounts.
Stockholders’ Equity
Stockholders’ equity increased $4.7 million, or 4.3%, to $114.8 million at September 30, 2023, compared to $110.2 million at December 31, 2022.
Net income was $9.6 million for the nine months ended September 30, 2023.
The Company declared and paid $3.8 million in dividends to common stockholders in the current period.
The Company's January 1, 2023 adoption of CECL resulted in a $2.1 million positive adjustment to stockholders' equity, net of tax.
On April 21, 2022, a $10.0 million repurchase program was authorized, with the Company repurchasing 74,656 shares at an average price of $22.38 per share since the inception of the program. In total, the Company repurchased $274,000 of common stock since December 31, 2022. The program expired May 1, 2023.
Book value per share (GAAP) was $22.43 at September 30, 2023 compared to $21.60 at December 31, 2022, an increase of $0.83. Tangible book value per share (Non-GAAP) increased $1.10, or 5.8%, to $20.10 compared to $19.00 at December 31, 2022. Refer to Explanation of Use of Non-GAAP Financial Measures in this Report.
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Consolidated Results of Operations for the Three Months Ended September 30, 2023 and 2022 
Overview. Net income was $2.7 million for the three months ended September 30, 2023, a decrease of $1.3 million compared to net income of $3.9 million for the three months ended September 30, 2022.

Net Interest and Dividend Income. Net interest and dividend income decreased $298,000, or 2.7%, to $10.7 million for the three months ended September 30, 2023 compared to $11.0 million for the three months ended September 30, 2022. Net interest margin (GAAP) decreased to 3.13% for the three months ended September 30, 2023 compared to 3.29% for the three months ended September 30, 2022. Fully Tax Equivalent (FTE) net interest margin (Non-GAAP) decreased 16 basis points (bps) to 3.14% for the three months ended September 30, 2023 compared to 3.30% for the three months ended September 30, 2022.
Interest and Dividend Income
Interest and dividend income increased $3.6 million, or 29.2%, to $15.9 million for the three months ended September 30, 2023 compared to $12.3 million the three months ended September 30, 2022.
Interest income on loans increased $3.2 million, or 29.9%, to $14.0 million for the three months ended September 30, 2023 compared to $10.8 million for the three months ended September 30, 2022. The average balance of loans increased $64.3 million to $1.09 billion from $1.02 billion, generating $729,000 of additional interest income on loans, and the average yield increased 93 bps to 5.13% compared to 4.20% resulting in a $2.5 million increase in interest income on loans.
Interest income on interest-earning deposits at other banks increased $372,000, to $750,000 for the three months ended September 30, 2023 compared to $378,000 for the three months ended September 30, 2022 as the average yield increased 347 bps, partially offset by a decrease of $15.2 million in average balances. The increase in the average yield was the result of the Federal Reserve Board's interest rate increases.

Interest Expense
Interest expense increased $3.9 million, or 305.4%, to $5.2 million for the three months ended September 30, 2023 compared to $1.3 million for the three months ended September 30, 2022.
Interest expense on deposits increased $3.7 million, or 340.2%, to $4.8 million for the three months ended September 30, 2023 compared to $1.1 million for the three months ended September 30, 2022. Rising market interest rates led to the repricing of interest-bearing demand and money market deposits and a shift in deposits from non interest-bearing to interest-bearing demand and time deposits and resulted in a 150 bps, or 295.2%, increase in the average cost of interest-bearing deposits compared to the three months ended September 30, 2022. This accounted for a $3.5 million increase in interest expense. Additionally, interest-bearing deposit balances increased $95.4 million, or 11.3%, to $937.8 million as of September 30, 2023 compared to $842.4 million as of September 30, 2022, accounting for a $138,000 increase in interest expense.
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Average Balances and Yields. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. Average balances are derived from daily balances over the periods indicated. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. FTE yield adjustments have been made for tax exempt loan and securities interest income utilizing a marginal federal income tax rate of 21.0% for the periods presented. As such, amounts will not agree to income as reported in the consolidated financial statements. The yields and costs for the periods indicated are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods presented.
Three Months Ended September 30,
20232022
Average
Balance
Interest
and
Dividends
Yield/
Cost (1)
Average
Balance
Interest
and
Dividends
Yield/
Cost (1)
(Dollars in thousands) (Unaudited)
Assets:
Interest-Earning Assets:
Loans, Net (2)
$1,088,691 $14,081 5.13 %$1,024,363 $10,833 4.20 %
Debt Securities
Taxable204,848 940 1.84 222,110 985 1.77 
Exempt From Federal Tax6,013 52 3.46 7,998 62 3.10 
Equity Securities2,693 25 3.71 2,693 21 3.12 
Interest-Earning Deposits at Banks52,642 750 5.70 67,870 378 2.23 
Other Interest-Earning Assets3,292 69 8.32 2,784 39 5.56 
Total Interest-Earning Assets1,358,179 15,917 4.65 1,327,818 12,318 3.68 
Noninterest-Earning Assets52,709 68,796 
Total Assets$1,410,888 $1,396,614 
Liabilities and Stockholders' Equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits$363,997 2,003 2.18 %$278,412 393 0.56 %
Savings Accounts212,909 54 0.10 251,148 20 0.03 
Money Market Accounts187,012 1,141 2.42 189,371 269 0.56 
Time Deposits173,832 1,552 3.54 123,438 397 1.28 
Total Interest-Bearing Deposits937,750 4,750 2.01 842,369 1,079 0.51 
Short-Term Borrowings— — — 28,738 19 0.26 
Other Borrowings34,662 407 4.66 17,621 174 3.92 
Total Interest-Bearing Liabilities972,412 5,157 2.10 888,728 1,272 0.57 
Noninterest-Bearing Demand Deposits312,016 390,658 
Other Liabilities9,025 2,636 
Total Liabilities1,293,453 1,282,022 
Stockholders' Equity117,435 114,592 
Total Liabilities and Stockholders' Equity$1,410,888 $1,396,614 
Net Interest Income (FTE) (Non-GAAP) (3)
$10,760 $11,046 
Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5)
2.55 %3.11 %
Net Interest-Earning Assets (4)
$385,767 $439,090 
Net Interest Margin (GAAP) (6)
3.13 3.29 
Net Interest Margin (FTE) (Non-GAAP) (3)(6)
3.14 3.30 
Return on Average Assets (1)
0.75 1.12 
Return on Average Equity (1)
9.03 13.60 
Average Equity to Average Assets8.32 8.20 
Average Interest-Earning Assets to Average Interest-Bearing Liabilities139.67 149.41 
PPP Loans$24 $16.53 $2,424 $123 20.13 
(1)Annualized based on three months ended results.
(2)    Net of the allowance for credit losses and includes nonaccrual loans with a zero yield.
(3)    Refer to Explanation and Use of Non-GAAP Financial Measures in this filing for the calculation of the measure and reconciliation to the most comparable GAAP measure.
(4)    Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5)    Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(6)    Net interest margin represents annualized net interest income divided by average total interest-earning assets.
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Rate/Volume Analysis. The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. FTE yield adjustments have been made for tax exempt loan and securities income utilizing a marginal federal income tax rate of 21.0%. The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. The total column represents the sum of the prior columns.
Three Months Ended September 30, 2023
Compared to
Three Months Ended September 30, 2022
Increase (Decrease) Due to
VolumeRateTotal
(Dollars in thousands) (Unaudited)
Interest and Dividend Income:
Loans, net$729 $2,519 $3,248 
Debt Securities:
Taxable(83)38 (45)
Exempt From Federal Tax(16)(10)
Equity Securities— 
Cash at Other Banks(107)479 372 
Other Interest-Earning Assets22 30 
Total Interest-Earning Assets531 3,068 3,599 
Interest Expense:
Deposits138 3,533 3,671 
Short-Term Borrowings(10)(9)(19)
Other Borrowings195 38 233 
Total Interest-Bearing Liabilities323 3,562 3,885 
Change in Net Interest and Dividend Income$208 $(494)$(286)
Provision for Credit Losses. Effective January 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The provision for credit losses recorded for the three months ended September 30, 2023 was $406,000 and was required primarily due to changes in qualitative factors coupled with a modeled slowdown in loan prepayment speeds. This compared to no provision for credit losses recorded for the three months ended September 30, 2022.
Noninterest Income. Noninterest income decreased $327,000, or 11.9%, to $2.4 million for the three months ended September 30, 2023, compared to $2.7 million for the three months ended September 30, 2022. This decrease was primarily related to a $439,000 decrease in net gain on disposal of fixed assets as compared to the prior period which included gains from the sale of assets of two closed branch locations.
Noninterest Expense. Noninterest expense increased $660,000, or 7.5%, to $9.5 million for the three months ended September 30, 2023 compared to $8.8 million for the three months ended September 30, 2022. Salaries and benefits increased $630,000, or 13.3%, to $5.4 million primarily due to merit increases and revenue producing staff additions. Data processing expense increased $174,000, or 32.2%, to $714,000, due to increased ongoing costs related to the fourth quarter 2022 core conversion and equipment expense increased $95,000 or 55.9%, to $265,000, due to costs associated with the implementation and operation of new interactive teller machines.
Income Taxes. Income tax expense was $564,000 for the three months ended September 30, 2023 compared to $998,000 for the three months ended September 30, 2022. This change was primarily driven by an decrease in pre-tax income to $3.2 million for the three months ended September 30, 2023 compared to $4.9 million for the three months ended September 30, 2022 and a $117,000 income tax refund received during three months ended September 30, 2023.
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Results of Operations for the Nine Months Ended September 30, 2023 and 2022
Overview. Net income was $9.6 million for the nine months ended September 30, 2023, an increase of $2.5 million compared to $7.1 million for the nine months ended September 30, 2022.
Net Interest and Dividend Income. Net interest and dividend income increased $2.4 million, or 7.6% to $33.4 million for the nine months ended September 30, 2023 compared to $31.1 million for the nine months ended September 30, 2022. Net interest margin (GAAP) increased to 3.31% for the nine months ended September 30, 2023 compared to 3.17% for the nine months ended September 30, 2022. Net interest margin (Non-GAAP FTE) increased 14 bps to 3.32% for the nine months ended September 30, 2023 compared to 3.18% the nine months ended September 30, 2022.
Interest and Dividend Income
Interest and dividend income increased $11.5 million, or 33.8%, to $45.3 million for the nine months ended September 30, 2023 compared to $33.9 million for the nine months ended September 30, 2022.
Interest income on loans increased $9.7 million or 32.4% to $39.8 million during the nine months ended September 30, 2023 compared to $30.1 million for the nine months ended September 30, 2022. Average loans increased $55.9 million, while the loan yield for the nine months ended September 30, 2023 increased 101 bps to 4.99% compared to 3.98% for the nine months ended September 30, 2022.
Interest income on interest-earning deposits at other banks increased $1.7 million, to $2.3 million for the nine months ended September 30, 2023 compared to $534,000 for the nine months ended September 30, 2022 as the average yield increased 386 bps, while average balances decreased $739,000. The increase in the average yield was the result of the Federal Reserve Board's interest rate increases.
Interest Expense
Interest expense increased $9.1 million, or 326.3%, to $11.9 million for the nine months ended September 30, 2023 compared to $2.8 million for the nine months ended September 30, 2022.
Interest expense on deposits increased $8.9 million, or 401.2%, to $11.1 million for the nine months ended September 30, 2023 compared to $2.2 million for the nine months ended September 30, 2022. Rising market interest rates led to the repricing of interest-bearing demand and money market deposits and a shift in deposits from non interest-bearing to interest-bearing demand and time deposits and resulted in a 126 bps increase in average cost of interest-bearing deposits compared to the nine months ended September 30, 2022. This accounted for a $8.7 million increase in interest expense. Additionally, average interest-bearing deposits increased $82.6 million, or 9.9%, accounting for a $232,000 increase in interest expense.

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Average Balances and Yields. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. Average balances are derived from daily balances over the periods indicated. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. FTE yield adjustments have been made for tax exempt loan and securities interest income utilizing a marginal federal income tax rate of 21% for the periods presented. As such, amounts will not agree to income as reported in the consolidated financial statements. The yields and costs for the periods indicated are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods presented.
Nine Months Ended September 30,
20232022
Average
Balance
Interest
and
Dividends
Yield/
Cost (1)
Average
Balance
Interest
and
Dividends
Yield/
Cost (1)
(Dollars in thousands) (Unaudited)
Assets:
Interest-Earning Assets:
Loans, Net (2)
$1,069,729 $39,924 4.99 %$1,013,871 $30,157 3.98 %
Debt Securities
Taxable209,069 2,853 1.82 222,132 2,878 1.73 
Tax Exempt6,154 157 3.40 9,093 218 3.20 
Equity Securities2,693 74 3.66 2,693 64 3.17 
Interest-Earning Deposits at Banks60,474 2,276 5.02 61,213 534 1.16 
Other Interest-Earning Assets2,905 148 6.81 3,165 115 4.86 
Total Interest-Earning Assets1,351,024 45,432 4.50 1,312,167 33,966 3.46 
Noninterest-Earning Assets51,018 91,607 
Total Assets$1,402,042 $1,403,774 
Liabilities and Stockholders' Equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits$351,379 4,776 1.82 %$271,897 554 0.27 %
Savings Accounts226,686 145 0.09 247,790 58 0.03 
Money Market Accounts198,243 3,113 2.10 190,189 371 0.26 
Time Deposits143,881 3,063 2.85 127,732 1,231 1.29 
Total Interest-Bearing Deposits920,189 11,097 1.61 837,608 2,214 0.35 
Short-Term Borrowings604 1.11 33,553 56 0.22 
Other Borrowings23,516 800 4.55 17,612 522 3.96 
Total Interest-Bearing Liabilities944,309 11,902 1.69 888,773 2,792 0.42 
Noninterest-Bearing Demand Deposits333,356 388,964 
Other Liabilities7,655 5,177 
Total Liabilities1,285,320 1,282,914 
Stockholders' Equity116,722 120,860 
Total Liabilities and Stockholders' Equity$1,402,042 $1,403,774 
Net Interest Income (FTE) (Non-GAAP) (3)
$33,530 $31,174 
Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5)
2.81 %3.04 %
Net Interest-Earning Assets (4)
$406,715 $423,394 
Net Interest Margin (GAAP) (6)
3.31 3.17 
Net Interest Margin (FTE) (Non-GAAP) (3)(6)
3.32 3.18 
Return on Average Assets (1)
0.91 0.68 
Return on Average Equity (1)
10.98 7.85 
Average Equity to Average Assets8.33 8.61 
Average Interest-Earning Assets to Average Interest-Bearing Liabilities143.07 147.64 
PPP Loans$54 $12.38 $7,503 $712 12.69 
(1)Annualized based on nine months ended results.
(2)    Net of the allowance for credit losses and includes nonaccrual loans with a zero yield.
(3)    Refer to Explanation and Use of Non-GAAP Financial Measures in this filing for the calculation of the measure and reconciliation to the most comparable GAAP measure.
(4)    Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(5)    Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(6)    Net interest margin represents annualized net interest income divided by average total interest-earning assets.
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Rate Volume Analysis. The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. FTE yield adjustments have been made for tax exempt loan and securities income utilizing a marginal federal income tax rate of 21%. The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. The total column represents the sum of the prior columns.
Nine Months Ended September 30, 2023
Compared to
Nine Months Ended September 30, 2022
Increase (Decrease) Due to
VolumeRateTotal
(Dollars in thousands) (Unaudited)
Interest and Dividend Income:
Loans, net$1,761 $8,006 $9,767 
Debt Securities:
Taxable(171)146 (25)
Exempt From Federal Tax(74)13 (61)
Equity Securities— 10 10 
Cash at Other Banks(9)1,751 1,742 
Other Interest-Earning Assets(10)43 33 
Total Interest-Earning Assets1,497 9,969 11,466 
Interest Expense:
Deposits232 8,651 8,883 
Short-Term Borrowings(98)47 (51)
Other Borrowings192 86 278 
Total Interest-Bearing Liabilities326 8,784 9,110 
Change in Net Interest and Dividend Income$1,171 $1,185 $2,356 
Provision for Credit Losses. The provision for credit losses was $917,000 for the nine months ended September 30, 2023, and $3.8 million for the nine months ended September 30, 2022. The increased provision for credit losses for the nine months ended September 30, 2022 was primarily due to a provision for a single loan charge-off of $2.7 million with respect to a commercial and industrial loan to a borrower who ceased operations.
Noninterest Income. Noninterest income increased $34,000, or 0.5%, to $7.49 million for the nine months ended September 30, 2023, compared to $7.46 million for the nine months ended September 30, 2022. This increase was primarily related to a $303,000 increase in net gains of bank-owned life insurance claims resulting from two death claims and an increase of $335,000, or 7.4%, in insurance commissions to $4.9 million for the nine months ended September 30, 2023, compared to $4.5 million for the nine months ended September 30, 2022 due to higher lock-in amounts received and core business including commercial and personal insurance lines.
Partially offsetting these increases, net gain on disposal of fixed assets decreased $420,000, or 97.4%, to $11,000 for the nine months ended September 30, 2023, compared to $431,000 for the nine months ended September 30, 2022 due to a $439,000 gain resulting from the sale of assets of two closed branch locations recorded during the nine months ended September 30, 2022. Additionally, service fees decreased $270,000, or 16.6%, to $1.4 million for nine months ended September 30, 2023, compared to $1.6 million for the nine months ended September 30, 2022 and the net loss on equity securities increased to $369,000 for the nine months ended September 30, 2023 compared to $252,000 for the nine months ended September 30, 2022, which was due to a decline of $117,000 in the market value of equity securities, comprised mainly of bank stocks.
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Noninterest Expense. Noninterest expense increased $2.1 million, or 8.2%, to $28.0 million for the nine months ended September 30, 2023 compared to $25.9 million for the nine months ended September 30, 2022. Salaries and benefits increased $1.8 million primarily due to revenue producing staffing additions, recruiting costs and severance related to the discontinuation of indirect automobile lending. Data processing expense increased $818,000 due to increased ongoing costs related to the fourth quarter 2022 core conversion and equipment expense increased $205,000 due to costs associated with the implementation and operation of new interactive teller machines. Conversely, contracted services decreased $355,000 due primarily to costs associated with project management of strategic initiatives during 2022.
Income Taxes. Income tax expense increased $635,000 to $2.4 million for the nine months ended September 30, 2023 compared to $1.8 million for the nine months ended September 30, 2022. The change between the periods is consistent with the change in pre-tax income, as pre-tax income was $12.0 million for the nine months ended September 30, 2023 compared to pre-tax income of $8.9 million for the nine months ended September 30, 2022.
Off-Balance Sheet Arrangements.
Other than loan commitments and standby and performance letters of credit, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a significant current or future effect on our financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors. Refer to Note 6 in the Notes to Consolidated Financial Statements of this report for a summary of commitments outstanding as of September 30, 2023 and December 31, 2022.
Liquidity and Capital Management
Liquidity. Liquidity is the ability to meet current and future financial obligations of a short-term nature. The Company’s primary sources of funds consist of deposit inflows, loan repayments and maturities, calls and sales of securities. While maturities and scheduled amortization of loans and securities are typically predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.
The Company regularly adjusts its investments in liquid assets based upon its assessment of expected loan demand, expected deposit flows, yields available on interest-earning deposits and securities, and the objectives of its asset/liability management program. Excess liquid assets are invested generally in interest-earning deposits with other banks and short- and intermediate-term securities. The Company believes that it had sufficient liquidity at September 30, 2023 to satisfy its short- and long-term liquidity needs.
The Company’s most liquid assets are cash and due from banks, which totaled $52.6 million at September 30, 2023. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. Unpledged securities, which provide an additional source of liquidity, totaled $20.8 million at September 30, 2023. In addition, at September 30, 2023, the Company had the ability to borrow up to $467.9 million from the FHLB of Pittsburgh, of which $415.3 million is available. The Company also has the ability to borrow up to $109.2 million from the FRB through its Borrower-In-Custody line of credit agreement and the Company also maintains multiple line of credit arrangements with various unaffiliated banks totaling $50.0 million as of both September 30, 2023 and December 31, 2022, currently these credit arrangements have remained unused.
At September 30, 2023, $83.4 million, or 47.0% of total time deposits mature within one year. If these time deposits do not remain with the Company, the Company will be required to seek other sources of funds. Depending on market conditions, the Company may be required to pay higher rates on such deposits or other borrowings than it currently pays on these time deposits. The Company believes, however, based on past experience that a significant portion of its time deposits will remain with it, either as time deposits or as other deposit products. The Company has the ability to attract and retain deposits by adjusting the interest rates offered. The Bank's current deposit portfolio is 60.5% insured by the FDIC, and with additional coverage of 16.9% from the Bank's investment securities; of the total deposits held at the Bank only 22.6% are uninsured.
We are committed to maintaining a strong liquidity position; therefore, we monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. The marginal cost of new funding, however, whether from deposits or borrowings from the FHLB, will be carefully considered as we monitor our liquidity needs. Therefore, in order to minimize our cost of funds, we may consider additional borrowings from the FHLB in the future.
CB Financial is a separate legal entity from the Bank and must provide for its own liquidity to pay any dividends to its shareholders and for other corporate purposes. Its primary source of liquidity is dividend payments it receives from the Bank. The Bank’s ability to pay dividends to CB Financial is subject to regulatory limitations. At September 30, 2023, CB Financial (on an unconsolidated, stand-alone basis) had liquid assets of $16.0 million. The ability to pay future dividends or conduct stock repurchases may be limited under applicable banking regulations and regulatory policies due to expected losses for future periods and/or the inability to upstream funds from the Bank to the Company as a result of lower income or regulatory capital levels.
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Capital Management. The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, each must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
Under the Regulatory Capital Rules, in order to avoid limitations on capital distributions (including dividend payments and certain discretionary bonus payments to executive officers), a banking organization must hold a capital conservation buffer comprised of common equity Tier I capital above its minimum risk-based capital requirements in an amount greater than 2.5% of total risk-weighted assets.
At September 30, 2023 and December 31, 2022, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action.
The following table presents the Bank’s regulatory capital amounts and ratios, as well as the minimum amounts and ratios required to be well capitalized as of the dates indicated.
September 30, 2023December 31, 2022
AmountRatioAmountRatio
(Dollars in thousands)
Common Equity Tier 1 (to risk weighted assets)
Actual$130,934 12.77 %$121,188 12.33 %
For Capital Adequacy Purposes46,141 4.50 44,221 4.50 
To Be Well Capitalized66,648 6.50 63,875 6.50 
Tier 1 Capital (to risk weighted assets)
Actual130,934 12.77 121,188 12.33 
For Capital Adequacy Purposes61,521 6.00 58,961 6.00 
To Be Well Capitalized82,028 8.00 78,615 8.00 
Total Capital (to risk weighted assets)
Actual142,555 13.90 133,478 13.58 
For Capital Adequacy Purposes82,028 8.00 78,615 8.00 
To Be Well Capitalized102,535 10.00 98,269 10.00 
Tier 1 Leverage (to adjusted total assets)
Actual130,934 9.37 121,188 8.66 
For Capital Adequacy Purposes55,901 4.00 55,969 4.00 
To Be Well Capitalized69,876 5.00 69,962 5.00 
Item 3. Quantitative and Qualitative Disclosure about Market Risk.
Management of Interest Rate Risk. The majority of the Company’s assets and liabilities are monetary in nature. Consequently, the Company’s most significant form of market risk is interest rate risk and a principal part of its business strategy is to manage interest rate risk by reducing the exposure of net interest income to changes in market interest rates. Accordingly, the Company’s Board has established an Asset/Liability Management Committee, which is responsible for evaluating the interest rate risk inherent in the Company’s assets and liabilities, for determining the level of risk that is appropriate given the Company’s business strategy, operating environment, capital, liquidity and performance objectives; and for managing this risk consistent with the guidelines approved by the Board. Senior management monitors the level of interest rate risk and the Asset/Liability Management Committee meets on a quarterly basis to review its asset/liability policies and position and interest rate risk position, and to discuss and implement interest rate risk strategies.
The Company monitors interest rate risk through the use of a simulation model. The quarterly reports developed in the simulation model assist the Company in identifying, measuring, monitoring and controlling interest rate risk to ensure compliance within the Company’s policy guidelines. This quantitative analysis measures interest rate risk from both a capital and earnings perspective. With regard to earnings, movements in interest rates and the shape of the yield curve significantly influence the amount of net
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interest income that is recognized. Movements in market interest rates significantly influence the spread between the interest earned on our interest-earning assets and the interest paid on our interest-bearing liabilities. Our internal interest rate risk analysis calculates the sensitivity of our projected net interest income over a one year period utilizing a static balance sheet assumption through which incoming and outgoing asset and liability cash flows are reinvested into similar instruments. Product pricing and earning asset prepayment speeds are adjusted for each rate scenario.
With regard to capital, our internal interest rate risk analysis calculates the sensitivity of our economic value of equity (“EVE”) ratio to movements in interest rates. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities. EVE attempts to quantify our economic value using a discounted cash flow methodology while the EVE ratio reflects that value as a form of capital ratio. The degree to which the EVE ratio changes for any hypothetical interest rate scenario from its base case measurement is a reflection of an institution’s sensitivity to interest rate risk.
For both net interest income and capital at risk, our interest rate risk analysis calculates a base case scenario that assumes no change in interest rates. The model then measures changes throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve up and down 100, 200, 300 and 400 basis points with additional scenarios modeled where appropriate. The model requires that interest rates remain positive for all points along the yield curve for each rate scenario which may preclude the modeling of certain falling rate scenarios.
The table below sets forth, as of September 30, 2023, the estimated changes in EVE and net interest income at risk that would result from the designated instantaneous changes in market interest rates. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results.
EVEEVE as a Percent of Portfolio Value of AssetsNet Interest
Earnings at Risk
Change in Interest Rates in Basis PointsDollar AmountDollar ChangePercent ChangeNPV RatioBasis Point ChangeDollar AmountDollar ChangePercent Change
(Dollars in thousands)
+400$137,753 $(36,554)(21.0)%11.67 %(171)$46,006 $(142)(0.3)%
+300145,339 (28,968)(16.6)12.04 (134)45,995 (153)(0.3)
+200154,734 (19,573)(11.2)12.50 (88)46,050 (98)(0.2)
+100164,667 (9,640)(5.5)12.97 (41)46,119 (29)(0.1)
Flat174,307 — — 13.38 — 46,148 — — 
(100)182,352 8,045 4.6 13.62 24 45,353 (795)(1.7)
(200)187,434 13,127 7.5 13.64 26 44,089 (2,059)(4.5)
(300)189,913 15,606 9.0 13.46 42,406 (3,742)(8.1)
(400)188,526 14,219 8.2 13.04 (34)40,849 (5,299)(11.5)
Certain shortcomings are inherent in the methodology used in the above interest rate risk measurement. Modeling changes in EVE and net interest income require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the table presented assumes that the composition of the Company’s interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured, and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the table provides an indication of the Company’s interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on EVE and net interest income and will differ from actual results. EVE calculations also may not reflect the fair values of financial instruments. For example, changes in market interest rates can increase the fair values of the Company’s loans, deposits and borrowings.
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Item 4. Controls and Procedures.
(a)Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.
Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the SEC (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.
(b)Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Periodically, there have been various claims and lawsuits against us, such as claims to enforce liens, claims seeking damages for improper collection procedures or misrepresentations, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans and other issues incident to our business. We are not a party to any other pending legal proceedings that we believe would have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
Item 1A. Risk Factors.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, which could materially affect our business, financial condition or future results. The risks described in such Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
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Item 6. Exhibits
3.1
3.2
31.1
31.2
32.1
101
The following materials for the quarter ended September 30, 2023, formatted in XBRL (Extensible Business Reporting Language); the (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to the Consolidated Financial Statements (Unaudited)
104Cover Page Interactive Data File (Embedded within Inline XBRL contained in Exhibit 101)
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CB FINANCIAL SERVICES, INC.
(Registrant)
Date:
November 13, 2023/s/ John H. Montgomery
John H. Montgomery
President and Chief Executive Officer
Date:
November 13, 2023
/s/ Jamie L. Prah
Jamie L. Prah
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Chief Accounting Officer)
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