What changed in this filing

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Item 1. Financial Statements

2021-11-08 compared with 2021-08-09 · 212 added, 166 removed, 995 unchanged (28% of the section changed)

1 unchanged sentence

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited) June 30,

(Unaudited) September 30,

2021 December 31,

8 unchanged sentences

Loans Held for Sale 17,407 —

Loans, Net of Allowance for Loan Losses of $ 11,544 and $ 12,771 at June 30, 2021 and December 31, 2020, Respectively

Loans, Net of Allowance for Loan Losses of $ 11,581 and $ 12,771 at September 30, 2021 and December 31, 2020, Respectively

990,018 1,031,982

24 unchanged sentences

Common Stock, $ 0.4167 Par Value;

35,000,000 Shares Authorized, 5,680,993 Shares Issued and 5,409,077 and 5,434,374 Shares Outstanding at June 30, 2021 and December 31, 2020, Respectively

35,000,000 Shares Authorized, 5,680,993 Shares Issued and 5,330,401 and 5,434,374 Shares Outstanding at September 30, 2021 and December 31, 2020, Respectively

Capital Surplus

2 unchanged sentences

51,839 51,132

Treasury Stock, at Cost ( 271,916 and 246,619 Shares at June 30, 2021 and December 31, 2020, Respectively)

Treasury Stock, at Cost ( 350,592 and 246,619 Shares at September 30, 2021 and December 31, 2020, Respectively)

( 7,483 ) ( 5,094 )

5 unchanged sentences

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

CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

14 unchanged sentences

NET INTEREST AND DIVIDEND INCOME 10,010 10,416 29,921 31,270

(Recovery) Provision For Loan Losses ( 1,200 ) 300 ( 1,200 ) 2,800

NET INTEREST INCOME AFTER (RECOVERY) PROVISION FOR LOAN LOSSES 11,134 10,021 21,111 18,054

Provision (Recovery) For Loan Losses — 1,200 ( 1,200 ) 4,000

NET INTEREST INCOME AFTER PROVISION (RECOVERY) FOR LOAN LOSSES 10,010 9,216 31,121 27,270

NONINTEREST INCOME

3 unchanged sentences

Net Gain on Sales of Loans 49 435 166 1,003

Net Gain on Securities 11 517 458 79

Net Gain (Loss) on Securities 24 ( 59 ) 482 20

Net Gain on Purchased Tax Credits 18 15 53 46

Net (Loss) Gain on Disposal of Fixed Assets ( 3 ) — ( 3 ) 17

Net Loss on Disposal of Fixed Assets — ( 65 ) ( 3 ) ( 48 )

Income from Bank-Owned Life Insurance 138 140 411 417

17 unchanged sentences

TOTAL NONINTEREST EXPENSE 9,773 28,968 32,890 47,042

(Loss) Income Before Income Tax (Benefit) Expense ( 369 ) 3,598 3,387 4,500

Income Tax (Benefit) Expense ( 146 ) 695 765 824

NET (LOSS) INCOME $ ( 223 ) $ 2,903 $ 2,622 $ 3,676

(LOSS) EARNINGS PER SHARE

Income (Loss) Before Income Tax Expense (Benefit) 2,435 ( 17,579 ) 5,822 ( 13,079 )

Income Tax Expense (Benefit) 452 ( 184 ) 1,217 640

NET INCOME (LOSS) $ 1,983 $ ( 17,395 ) $ 4,605 $ ( 13,719 )

EARNINGS (LOSS) PER SHARE

Basic $ 0.37 $ ( 3.22 ) $ 0.85 $ ( 2.54 )

4 unchanged sentences

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

(Dollars in thousands)

Net (Loss) Income $ ( 223 ) $ 2,903 $ 2,622 $ 3,676

Other Comprehensive Income (Loss):

Net Income (Loss) $ 1,983 $ ( 17,395 ) $ 4,605 $ ( 13,719 )

Other Comprehensive (Loss) Income:

Change in Unrealized Gain (Loss) on Investment Securities Available-for-Sale ( 733 ) ( 653 ) ( 2,662 ) 2,292

3 unchanged sentences

Income Tax Effect (2)

Other Comprehensive Income (Loss), Net of Income Tax Effect 723 ( 838 ) ( 1,693 ) 1,941

Total Comprehensive Income $ 500 $ 2,065 $ 929 $ 5,617

(1) Reported in Net Gain on Securities on the Consolidated Statements of (Loss) Income.

(2) Reported in Income Tax (Benefit) Expense on the Consolidated Statements of (Loss) Income.

Other Comprehensive (Loss) Income, Net of Income Tax Effect ( 575 ) ( 516 ) ( 2,268 ) 1,425

Total Comprehensive Income (Loss) $ 1,408 $ ( 17,911 ) $ 2,337 $ ( 12,294 )

(1) Reported in Net Gain (Loss) on Securities on the Consolidated Statements of Income (Loss).

(2) Reported in Income Tax Expense (Benefit) on the Consolidated Statements of Income (Loss).

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

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

Three Months Ended June 30, 2021 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Total Stockholders' Equity

Three Months Ended September 30, 2021 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Total Stockholders' Equity

(Dollars in thousands, except share and per share data)

March 31, 2021 5,680,993 $ 2,367 $ 82,844 $ 52,673 $ ( 5,094 ) $ 986 $ 133,776

June 30, 2021 5,680,993 $ 2,367 $ 82,969 $ 51,146 $ ( 5,655 ) $ 1,709 $ 132,536

Comprehensive Income:

Net Loss — — — ( 223 ) — — ( 223 )

Other Comprehensive Income — — — — — 723 723

Net Income — — — 1,983 — — 1,983

Other Comprehensive Loss — — — — — ( 575 ) ( 575 )

Stock-Based Compensation Expense — — 169 — — — 169

Exercise of Stock Options — — ( 8 ) — 62 — 54

Treasury stock purchased, at cost ( 81,676 shares)

2 unchanged sentences

— — — ( 1,290 ) — — ( 1,290 )

June 30, 2021 5,680,993 $ 2,367 $ 82,969 $ 51,146 $ ( 5,655 ) $ 1,709 $ 132,536

Three Months Ended June 30, 2020 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Total Stockholders' Equity

September 30, 2021 5,680,993 $ 2,367 $ 83,130 $ 51,839 $ ( 7,483 ) $ 1,134 $ 130,987

Three Months Ended September 30, 2020 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Total Stockholders' Equity

(Dollars in thousands, except share and per share data)

March 31, 2020 5,680,993 $ 2,367 $ 83,216 $ 66,431 $ ( 5,914 ) $ 5,425 $ 151,525

Comprehensive Income:

Net Income — — — 2,903 — — 2,903

June 30, 2020 5,680,993 $ 2,367 $ 83,327 $ 68,039 $ ( 5,928 ) $ 4,587 $ 152,392

Comprehensive Loss:

Net Loss — — — ( 17,395 ) — — ( 17,395 )

Other Comprehensive Loss — — — — — ( 516 ) ( 516 )

Restricted Stock Awards Granted — — ( 103 ) — 103 — —

Stock-Based Compensation Expense — — 114 — — — 114

Exercise of Stock Options — — — — ( 14 ) — ( 14 )

Dividends Paid ($ 0.24 Per Share)

— — — ( 1,296 ) — — ( 1,296 )

June 30, 2020 5,680,993 $ 2,367 $ 83,327 $ 68,039 $ ( 5,928 ) $ 4,587 $ 152,392

September 30, 2020 5,680,993 $ 2,367 $ 83,338 $ 49,348 $ ( 5,825 ) $ 4,071 $ 133,299

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

Six Months Ended June 30, 2021 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Total Stockholders' Equity

Nine Months Ended September 30, 2021 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Total Stockholders' Equity

(Dollars in thousands, except share and per share data)

4 unchanged sentences

Stock-Based Compensation Expense — — 415 — — — 415

Exercise of Stock Options — — ( 8 ) — 62 — 54

Treasury stock purchased, at cost ( 106,973 shares)

2 unchanged sentences

— — — ( 3,898 ) — — ( 3,898 )

June 30, 2021 5,680,993 $ 2,367 $ 82,969 $ 51,146 $ ( 5,655 ) $ 1,709 $ 132,536

Six Months Ended June 30, 2020 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Total Stockholders' Equity

September 30, 2021 5,680,993 $ 2,367 $ 83,130 $ 51,839 $ ( 7,483 ) $ 1,134 $ 130,987

Nine Months Ended September 30, 2020 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Income Total Stockholders' Equity

(Dollars in thousands, except share and per share data)

December 31, 2019 5,680,993 $ 2,367 $ 82,971 $ 66,955 $ ( 3,842 ) $ 2,646 $ 151,097

Comprehensive Income:

Net Income — — — 3,676 — — 3,676

Comprehensive Loss:

Net Loss — — — ( 13,719 ) — — ( 13,719 )

Other Comprehensive Income — — — — — 1,425 1,425

Restricted Stock Awards Forfeited — — 96 — ( 96 ) — —

Restricted Stock Awards Granted — — ( 103 ) — 103 — —

Stock-Based Compensation Expense — — 370 — — — 370

4 unchanged sentences

— — — ( 3,888 ) — — ( 3,888 )

June 30, 2020 5,680,993 $ 2,367 $ 83,327 $ 68,039 $ ( 5,928 ) $ 4,587 $ 152,392

September 30, 2020 5,680,993 $ 2,367 $ 83,338 $ 49,348 $ ( 5,825 ) $ 4,071 $ 133,299

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30, 2021 2020

Nine Months Ended September 30, 2021 2020

(Dollars in thousands)

OPERATING ACTIVITIES

Net Income $ 2,622 $ 3,676

Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities

Net Income (Loss) $ 4,605 $ ( 13,719 )

Adjustments to Reconcile Net Income (Loss) to Net Cash Provided By Operating Activities

Amortization (Accretion) on Securities 38 ( 9 )

2 unchanged sentences

Intangible Asset Impairment 1,178 —

Goodwill Impairment — 18,693

Writedown on Fixed Assets 2,270 884

6 unchanged sentences

Gain on Sale of Loans ( 166 ) ( 1,003 )

Gain on Sale of Other Real Estate Owned and Repossessed Assets — 16

(Gain) Loss on Sale of Other Real Estate Owned and Repossessed Assets ( 76 ) 26

Noncash Expense for Stock-Based Compensation 415 370

Decrease (Increase) in Accrued Interest Receivable 517 ( 944 )

Net Loss (Gain) on Disposal of Fixed Assets 3 ( 17 )

Increase in Taxes Payable 247 1,018

Net Loss on Disposal of Fixed Assets 3 48

Increase (Decrease) in Taxes Payable 295 ( 253 )

Payments on Operating Leases ( 251 ) ( 412 )

27 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30, 2021 2021 2020

Nine Months Ended September 30, 2021 2021 2020

(Dollars in thousands)

79 unchanged sentences

Recent Accounting Standards

In March 2020, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848):

In August 2021, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update ("ASU") 2021-06, Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946):

Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No.

33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No.

33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants.

This ASU incorporates recent SEC rule changes into the FASB Codification, including SEC Final Rule Releases No.

33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses, and No.

33-10835, Update of Statistical Disclosures for Bank and Savings and Loan Registrants.

The SEC rule changes update and expand the statistical disclosures that bank and savings and loan registrants provide to investors, in light of changes in this sector over the past 30 years.

The rules also eliminate certain disclosure items that are duplicative of other SEC rules and requirements of U.S.

The rules replace Industry Guide 3, Statistical Disclosure by Bank Holding Companies, with updated disclosure requirements in a new subpart of Regulation S-K.

The rules are intended to help ensure that investors have access to more meaningful, relevant information to facilitate their investment and voting decisions.

The amendments are effective prospectively for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

The Company does not expect the adoption of this ASU will have a material impact on the Company's consolidated statements of financial condition or results of operation.

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.

30 unchanged sentences

ASU 2016-13 affects companies holding financial assets and net investment in leases that are not accounted for at fair value through net income.

The ASU 2016-13 amendments affect loans, debt securities, trade receivables, net investments in leases, off balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash.

The ASU 2016-13 amendments affect loans, debt securities, trade receivables, net investments in

leases, off balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash.

ASU 2016-13 was originally effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted.

5 unchanged sentences

As previously disclosed by the Company on February 23, 2021, May 27, 2021 and June 10, 2021, the Company announced the implementation of branch optimization and operational efficiency strategic initiatives to improve the Bank’s financial performance and operations in order to position the Bank for continued profitable growth.

The Bank intends to optimize its

current branch network while expanding technology and infrastructure investments in its remaining locations.

The Bank intends to optimize its current branch network while expanding technology and infrastructure investments in its remaining locations.

The decision was the result of a comprehensive internal study that measured branch performance by comparing financial and non-financial indicators to growth opportunities, while evolving changes in consumer preferences, largely driven by the global pandemic, led to an acceleration of branch optimization efforts.

6 unchanged sentences

The Agreement provides for a 5.0 % premium to be paid on assumed deposits, which will be recognized as income upon the expected close of the transaction in the fourth quarter of 2021, subject to regulatory approval and other closing conditions.

As of September 30, 2021, all requisite regulatory approvals had been received.

As a result of the events and changes in circumstances associated with the branch optimization initiatives whereby six branches were consolidated and two others are to be divested, the Company performed assessments of the recoverability of long-lived assets to determine whether their carrying values may not be recoverable.

5 unchanged sentences

Refer to Note 11 for further discussion of the impairment of the right of use asset associated with the operating lease.

• For the two branches to be divested, fair value of the premises and equipment was determined based on the contractual terms of the Agreement, which note the premises and equipment will be purchased at the Company's net book value, net of a $ 338,000 contractual discount at the acquisition date.

In total, the Company recognized $ 2.3 million in charges on the premises and equipment for the three and six months ended June 30, 2021 as Writedown on Fixed Assets in the Consolidated Statements of (Loss) Income.

The branch optimization and operational efficiency initiatives resulted in $ 4.7 million and $ 5.1 million of restructuring-related and other expenses for the three and six months ended June 30, 2021, respectively.

The expenses include the aforementioned $ 2.3 million writedown on fixed assets, as well as a $ 1.2 million impairment of intangible assets associated with the branch sales (refer to Note 14 for further information) and $ 1.3 million and $ 1.6 million of expenses related to contracted services, employee severance costs, branch lease impairment (refer to Note 11 for further information), professional fees, data processing fees, legal and other expenses for the three and six months ended June 30, 2021, respectively.

• For the two branches to be divested, fair value of the premises and equipment was determined based on the contractual terms of the Agreement, which provide that the premises and equipment will be purchased at the Company's net book value, net of a $ 338,000 contractual discount at the acquisition date.

In total, the Company recognized $ 2,000 and $ 2.3 million in charges on the premises and equipment for the three and nine months ended September 30, 2021, respectively, as Writedown on Fixed Assets in the Consolidated Statements of (Loss) Income.

The branch optimization and operational efficiency initiatives resulted in $ 1.3 million and $ 6.3 million of restructuring-related and other expenses for the three and nine months ended September 30, 2021, respectively.

The expenses include the aforementioned $ 2.3 million writedown on fixed assets, a $ 1.2 million impairment of intangible assets associated with the branch sales (refer to Note 14 for further information) for the nine months ended September 30, 2021, as well as $ 1.3 million and $ 2.9 million of expenses related to contracted services, employee severance costs, branch lease impairment (refer to Note 11 for further information), professional fees, data processing fees, legal and other expenses for the three and nine months ended September 30, 2021, respectively.

Assets and Liabilities of Branches Held for Sale

At June 30, 2021, the Company reclassified the deposits to be assumed to deposits held for sale, loans to be purchased to loans held for sale and premises and equipment to be purchased to premises and equipment held for sale on the Consolidated Statements of Financial Condition.

The assets and liabilities classified as held for sale of the disposal group related to the branch sales are as follows

At September 30, 2021, the Company reclassified the deposits to be assumed to deposits held for sale, loans to be purchased to loans held for sale and premises and equipment to be purchased to premises and equipment held for sale on the Consolidated Statements of Financial Condition.

The assets and liabilities classified as held for sale of the disposal group related to the branch sales are as follows at September 30, 2021.

September 30,

(Dollars in thousands)

12 unchanged sentences

Total Deposits Held for Sale $ 102,647

(Loss) Earnings Per Share

There are no convertible securities which would affect the numerator in calculating basic and diluted (loss) earnings per share;

therefore, net (loss) income as presented on the Consolidated Statements of (Loss) Income is used as the numerator.

Earnings (Loss) Per Share

There are no convertible securities which would affect the numerator in calculating basic and diluted earnings (loss) per share;

therefore, net income (loss) as presented on the Consolidated Statements of Income (Loss) 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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

(Dollars in thousands, except share and per share data)

Net (Loss) Income $ ( 223 ) $ 2,903 $ 2,622 $ 3,676

Net Income (Loss) $ 1,983 $ ( 17,395 ) $ 4,605 $ ( 13,719 )

Weighted-Average Basic Common Shares Outstanding

4 unchanged sentences

5,390,128 5,395,342 5,420,792 5,406,710

(Loss) Earnings Per Share:

Earnings (Loss) Per Share:

$ 0.37 $ ( 3.22 ) $ 0.85 $ ( 2.54 )

1 unchanged sentence

The dilutive effect on weighted average diluted common shares outstanding is the result of outstanding stock options and nonvested restricted stock.

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.

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

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

5 unchanged sentences

The following table presents the amortized cost and fair value of securities available-for-sale at the dates indicated:

June 30, 2021

September 30, 2021

(Dollars in thousands)

6 unchanged sentences

140,255 2,205 ( 770 ) 141,690

Corporate Debt 7,482 — ( 1 ) 7,481

Total Available-for-Sale Debt Securities 217,085 3,269 ( 1,825 ) 218,529

16 unchanged sentences

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:

June 30, 2021

September 30, 2021

Less than 12 months

5 unchanged sentences

10 64,133 ( 770 ) — — — 10 64,133 ( 770 )

Corporate Debt 1 4,950 ( 1 ) — — — 1 4,950 ( 1 )

Total 18 $ 94,842 $ ( 1,010 ) 5 $ 24,179 $ ( 815 ) 23 $ 119,021 $ ( 1,825 )

6 unchanged sentences

7 $ 32,399 $ ( 595 ) — $ — $ — 7 $ 32,399 $ ( 595 )

For debt securities, the Company does not believe that any individual unrealized loss as of June 30, 2021 or December 31, 2020, represents an other-than-temporary impairment.

For debt securities, the Company does not believe that any individual unrealized loss as of September 30, 2021 or December 31, 2020, represents an other-than-temporary impairment.

The Company performs a review of the entire securities portfolio on a quarterly basis to identify securities that may indicate an other-than-temporary impairment.

The Company’s management considers the length of time and the extent to which the fair value has been less than cost, and the financial condition of the issuer.

The securities that are temporarily impaired at June 30, 2021 and December 31, 2020 relate principally to changes in interest rates subsequent to the acquisition of the specific securities.

The securities that are temporarily impaired at September 30, 2021 and December 31, 2020 relate principally to changes in market interest rates subsequent to the acquisition of the specific securities.

The Company does not intend to sell, and it is not 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.

Securities available-for-sale with a fair value of $ 166.1 million and $ 119.7 million at June 30, 2021 and December 31, 2020, respectively, are pledged to secure public deposits, short-term borrowings and for other purposes as required or permitted by law.

Securities available-for-sale with a fair value of $ 184.4 million and $ 119.7 million at September 30, 2021 and December 31, 2020, respectively, are pledged to secure 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:

June 30, 2021

September 30, 2021

(Dollars in thousands)

8 unchanged sentences

The following table presents the gross realized gain and loss on sales of debt securities, as well as gain and loss on equity securities from both sales and market adjustments for the periods indicated.

All gains and losses presented in the table below are reported in net gain on securities on the Consolidated Statements of (Loss) Income.

All gains and losses presented in the table below are reported in net gain on securities on the Consolidated Statements of Income (Loss).

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

8 unchanged sentences

Net Gain (Loss) on Equity Securities $ 24 $ ( 59 ) $ 257 $ ( 469 )

Net Gain on Securities $ 11 $ 517 $ 458 $ 79

Net Gain (Loss) on Securities $ 24 $ ( 59 ) $ 482 $ 20

Loans and Allowance for Loan Losses

1 unchanged sentence

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.

Residential mortgages include those secured by residential properties and include home equity loans,.

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.

3 unchanged sentences

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 risk than loans secured by residences.

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.

9 unchanged sentences

The following table presents the classifications of loans as of the dates indicated.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Dollars in thousands)

11 unchanged sentences

The Small Business Administration reopened the Payroll Protection Program ("PPP") the week of January 11, 2021 accepting applications for both First Draw and Second Draw PPP Loans.

As of June 30, 2021, as part of this round of PPP, the Bank funded 217 PPP loans totaling $ 34.6 million with net deferred origination fees of $ 1.3 million.

PPP loans decreased $ 5.6 million to $ 49.5 million at June 30, 2021 compared to $ 55.1 million at December 31, 2020.

At June 30, 2021, the largest sectors of PPP loans were $ 8.6 million for construction and specialty-trade contractors, $ 5.8 million in loans for health care and social assistance, $ 4.5 million for professional and technical services, $ 3.4 million for manufacturing, $ 3.1 million for restaurant and food services, and $ 2.8 million for wholesale trade.

Net unamortized PPP loan origination fees as of June 30, 2021 and December 31, 2020 were $ 1.4 million and $ 1.1 million, respectively.

Net PPP loan origination fees earned were $ 489,000 and $ 1.0 million for the three and six months ended June 30, 2021, respectively.

As of September 30, 2021, as part of this round of PPP, the Bank funded 218 PPP loans totaling $ 34.6 million with net deferred origination fees of $ 1.3 million.

PPP loans decreased $ 22.4 million to $ 32.7 million at September 30, 2021 compared to $ 55.1 million at December 31, 2020.

At September 30, 2021, the largest sectors of PPP loans were $ 9.3 million for construction and specialty-trade contractors, $ 5.9 million in loans for health care and social assistance, $ 4.7 million for professional and technical services, $ 2.5 million for manufacturing, $ 3.5 million for restaurant and food services, and $ 1.8 million for wholesale trade.

Net unamortized PPP loan origination fees as of September 30, 2021 and December 31, 2020 were $ 1.0 million and $ 1.1 million, respectively.

Net PPP loan origination fees earned were $ 380,000 and $ 1.4 million for the three and nine months ended September 30, 2021, respectively.

All PPP loans are classified as commercial and industrial loans held for investment.

No allowance for loan 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 $ 2.4 million and $ 2.0 million at June 30, 2021 and December 31, 2020, respectively.

The following table presents classification of loans held for sale as of June 30, 2021.

Total unamortized net deferred loan fees were $ 2.1 million and $ 2.0 million at September 30, 2021 and December 31, 2020, respectively.

The following table presents classification of loans held for sale as of September 30, 2021.

Loans held for sale includes $ 6.5 million related to the Agreement executed with Citizens Bank and $ 7.4 million of residential real estate loans originated and intended for sale in the secondary market.

In addition, a $ 3.6 million nonaccrual and substandard-rated commercial real estate loan secured by a hotel that was transferred into the held for sale portfolio at September 30, 2021 was sold in October 2021 and

will result in the recognition of an $ 897,000 gain on sale of loans in the fourth quarter of 2021.

This loan previously incurred a $ 931,000 charge-off in the prior year.

There were no loans held for sale at December 31, 2020.

Additionally, there were no loans held for sale that were delinquent, nonaccrual or considered criticized loans.

(Dollars in thousands)

Residential $ 9,640

11 unchanged sentences

The following table presents loans summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system as of the dates indicated.

At June 30, 2021 and December 31, 2020, there were no loans in the criticized category of Loss within the internal risk rating system.

June 30, 2021

At September 30, 2021 and December 31, 2020, there were no loans in the criticized category of Loss within the internal risk rating system.

September 30, 2021

(Dollars in Thousands)

18 unchanged sentences

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.

June 30, 2021

September 30, 2021

(Dollars in Thousands)

17 unchanged sentences

$ 1,029,036 $ 3,704 $ 1,116 $ 8 $ 4,828 $ 10,889 $ 1,044,753

The increase in nonaccrual loans at June 30, 2021 compared to December 31, 2020 is primarily related to a $ 2.0 million construction loan secured by a hotel.

Additional interest income that would have been recorded on nonaccrual loans if the loans were current was $ 135,000 and $ 196,000 for the three and six months ended June 30, 2021, respectively, and $ 37,000 and $ 48,000 for the three and six months ended June 30, 2020, respectively.

The decrease in nonaccrual loans at September 30, 2021 compared to December 31, 2020 is primarily related to a $ 3.6 million commercial real estate loan secured by a hotel that was transferred to loans held-for-sale as previously noted, partially offset by a $ 2.0 million commercial real estate loan secured by a hotel that was moved to nonaccrual status in the current period.

Additional interest income that would have been recorded if the loans that were nonaccrual at September 30, 2021 were current was $ 33,000 and $ 136,000 for the three and nine months ended September 30, 2021, respectively, and $ 20,000 and $ 59,000 for the three and nine months ended September 30, 2020, respectively.

The following table sets forth the amounts and categories of nonperforming assets at the dates indicated.

2 unchanged sentences

Nonperforming loans do not include loans modified under Section 4013 of the CARES Act and interagency guidance as further explained below.

September 30,

2021 December 31,

5 unchanged sentences

Total Nonaccrual Loans

12,710 10,889

Accruing Loans Past Due 90 Days or More:

1 unchanged sentence

Total Nonaccrual Loans and Accruing Loans Past Due 90 Days or More

12,710 10,897

Troubled Debt Restructurings, Accruing:

10 unchanged sentences

Nonperforming Assets to Total Assets

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 $ 1.5 million and $ 806,000 at June 30, 2021 and December 31, 2020, respectively.

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 $ 775,000 and $ 806,000 at September 30, 2021 and December 31, 2020, respectively.

TDRs typically are the result of loss mitigation activities whereby concessions are granted to minimize loss and avoid foreclosure or repossession of collateral.

14 unchanged sentences

The following table provides details of loans in forbearance as of the dates indicated.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Loans Amount % of Portfolio Number

7 unchanged sentences

Total Loans in Forbearance — $ — — % 31 $ 24,100 2.3 %

Loans in deferral at June 30, 2021 include one commercial real estate loans totaling $ 3.3 million that is secured by a hotel, and a business relationship that rents equipment, supplies and other materials for events comprised of three commercial real estate loans totaling $ 3.3 million, and five commercial and industrial loans totaling $ 1.2 million.

These loans ended their forbearance period in July and begin making regularly scheduled payments.

The concessions granted for the TDRs in the portfolio primarily consist of, but are not limited to, modification of payment or other terms, temporary rate modification and extension of maturity date.

Loans classified as TDRs consisted of 14 loans totaling $ 3.3 million at June 30, 2021 and 17 loans totaling $ 4.2 million at December 31, 2020, respectively.

Loans classified as TDRs consisted of 14 loans totaling $ 2.9 million at September 30, 2021 and 17 loans totaling $ 4.2 million at December 31, 2020, respectively.

The following table presents information at the time of modification related to loans modified in a TDR during the periods indicated.

During the three and six months ended June 30, 2021, there were no loans that were modified that were considered a TDR.

Three Months and Six Months Ended June 30, 2020

During the three and nine months ended September 30, 2021, there were no loans that were modified that were considered a TDR.

Three Months Ended September 30, 2020

Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Related Allowance

(Dollars in thousands)

Commercial 1 $ 504 $ 519 $ —

Commercial and Industrial 1 38 38 —

Total 2 $ 542 557 $ —

Nine Months Ended September 30, 2020

(Dollars in thousands)

Residential 1 $ 234 $ 234 $ —

Commercial 1 504 519 —

Commercial and Industrial 1 38 38 —

Total 3 $ 776 $ 791 $ —

During the three months ended June 30, 2021, one commercial real estate loan totaling $ 698,000 and one commercial and industrial loan totaling $ 8,000 that were previously modified in a TDR paid off in full.

During the six months ended June 30, 2021, one residential real estate loan totaling $ 3,000 , one commercial real estate loan totaling $ 698,000 and one commercial and industrial loan totaling $ 8,000 previously modified in a TDR paid off in full.

During the three and six month ended June 30, 2020, one residential real estate loan totaling $ 60,000 previously modified in a TDR paid off in full.

No TDRs subsequently defaulted during the three and six months ended June 30, 2021 and 2020, respectively.

During the three months ended September 30, 2021, no loans that were previously modified in a TDR paid off in full.

During the nine months ended September 30, 2021, one residential real estate loan totaling $ 3,000 , one commercial real estate loan totaling $ 698,000 and one commercial and industrial loan totaling $ 8,000 previously modified in a TDR paid off in full.

During the three months ended September 30, 2020, no loans previously modified in a TDR paid off in full.

During the nine months ended September 30, 2020, one residential real estate loan totaling $ 60,000 previously modified in a TDR paid off in full

No TDRs subsequently defaulted during the three and nine months ended September 30, 2021 and 2020, respectively.

The following table presents a summary of the loans considered to be impaired as of the dates indicated.

June 30, 2021

September 30, 2021

(Dollars in thousands)

11 unchanged sentences

Commercial and Industrial

1,920 62 1,920 1,920 20

Total With A Related Allowance Recorded

34 unchanged sentences

$ 44,141 $ 649 $ 45,377 $ 49,775 $ 1,841

The recorded investment of loans evaluated for impairment decreased $ 18.3 million at June 30, 2021 compared to December 31, 2020 and was primarily related to commercial real estate loans.

This is the result of no longer evaluating separately for impairment certain commercial real estate loans secured by hotels that have manageable loan-to-value ratios and have exhibited an ability to cash flow during the COVID-19 pandemic, with the expectation that hotel operations strengthen further as occupancy rates increase due to the economy reopening and resumption of travel.

The recorded investment of loans evaluated for impairment decreased $ 26.9 million at September 30, 2021 compared to December 31, 2020 and was primarily related to commercial real estate loans.

This is primarily the result of no longer evaluating separately for impairment certain commercial real estate loans secured by hotels that have manageable loan-to-value ratios and have exhibited an ability to cash flow during the COVID-19 pandemic, with the expectation that hotel operations strengthen further as occupancy rates increase due to the economy reopening and resumption of travel.

In addition, as previously noted, a $ 3.6 million commercial real estate loan was transferred into loans held for sale and was no longer evaluated for impairment at September 30, 2021.

The loan was subsequently sold in October 2021.

The following tables present the activity in the allowance for loan 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.

(Dollars in thousands)

March 31, 2021 $ 1,975 $ 5,917 $ 939 $ 1,543 $ 1,103 $ — $ 1,248 $ 12,725

June 30, 2021 $ 1,588 $ 5,582 $ 1,136 $ 1,152 $ 941 $ — $ 1,145 $ 11,544

— — — — ( 19 ) — — ( 19 )

1 unchanged sentence

Provision (Recovery) ( 98 ) 347 ( 71 ) ( 21 ) ( 12 ) — ( 145 ) —

June 30, 2021 $ 1,588 $ 5,582 $ 1,136 $ 1,152 $ 941 $ — $ 1,145 $ 11,544

September 30, 2021 $ 1,492 $ 5,929 $ 1,065 $ 1,142 $ 953 $ — $ 1,000 $ 11,581

(Dollars in thousands)

3 unchanged sentences

Provision (Recovery) ( 772 ) ( 81 ) 176 ( 314 ) ( 292 ) — 83 ( 1,200 )

June 30, 2021 $ 1,588 $ 5,582 $ 1,136 $ 1,152 $ 941 $ — $ 1,145 $ 11,544

June 30, 2021

September 30, 2021 $ 1,492 $ 5,929 $ 1,065 $ 1,142 $ 953 $ — $ 1,000 $ 11,581

September 30, 2021

(Dollars in thousands)

10 unchanged sentences

(Dollars in thousands)

March 31, 2020 $ 2,685 $ 4,875 $ 664 $ 1,592 $ 1,879 $ — $ 627 $ 12,322

June 30, 2020 $ 2,688 $ 5,160 $ 820 $ 1,566 $ 1,714 $ — $ 700 $ 12,648

( 11 ) — — — ( 103 ) — — ( 114 )

1 unchanged sentence

Provision (Recovery) ( 506 ) 1,711 71 170 ( 290 ) — 44 1,200

June 30, 2020 $ 2,688 $ 5,160 $ 820 $ 1,566 $ 1,714 $ — $ 700 $ 12,648

September 30, 2020 $ 2,172 $ 6,872 $ 891 $ 1,742 $ 1,359 $ — $ 744 $ 13,780

(Dollars in thousands)

3 unchanged sentences

Provision (Recovery) 180 3,634 606 ( 691 ) 47 — 224 4,000

June 30, 2020 $ 2,688 $ 5,160 $ 820 $ 1,566 $ 1,714 $ — $ 700 $ 12,648

June 30, 2020

September 30, 2020 $ 2,172 $ 6,872 $ 891 $ 1,742 $ 1,359 $ — $ 744 $ 13,780

September 30, 2020

(Dollars in thousands)

3 unchanged sentences

$ 2,172 $ 4,624 $ 891 $ 1,135 $ 1,359 $ — $ 744 $ 10,925

The allowance for loan losses was $ 11.5 million at June 30, 2021 compared to $ 12.8 million at December 31, 2020.

There was a net recovery of $ 1.2 million of provision for loan losses for the three and six months ended June 30, 2021.

A $ 31.7 million decrease in net reservable loans in the current quarter, which excludes PPP loans and includes the reclassification of $ 11.4 million of loans to held for sale that do not require a reserve, as well as a decrease in specifically impaired loans and improving economic and industry conditions contributed to the net recovery in the current period.

The allowance for loan losses was $ 11.6 million at September 30, 2021 compared to $ 12.8 million at December 31, 2020.

There was a net recovery of $ 1.2 million of provision for loan losses for the nine months ended September 30, 2021.

A $ 20.8 million decrease in net reservable loans in the current year, which excludes PPP loans and includes the reclassification of $ 17.4 million of loans to held for sale that do not require a reserve, as well as a decrease in specifically impaired loans and improving economic and industry conditions, contributed to the net recovery in the current period.

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.

At June 30, 2021 and December 31, 2020, commercial and industrial loans include $ 49.5 million and $ 55.1 million, respectively, of PPP loans collectively evaluated for potential impairment.

At September 30, 2021 and December 31, 2020, commercial and industrial loans include $ 32.7 million and $ 55.1 million, respectively, of PPP loans collectively evaluated for potential impairment.

No allowance for loan loss was allocated to the PPP loan portfolio due to the Bank complying with the lender obligations that ensure SBA guarantee.

June 30, 2021

September 30, 2021

(Dollars in thousands)

16 unchanged sentences

Accretable Yield

June 30, 2021 $ 903

September 30, 2021 $ 809

Time Deposits

The following table shows the maturities of time deposits for the next five years and beyond at the date indicated.

June 30, 2021 Time Deposits Time Deposits Held for Sale Time Deposits,

September 30, 2021 Time Deposits Time Deposits Held for Sale Time Deposits,

(Dollars in thousands)

12 unchanged sentences

$ 162,421 $ 17,694 $ 144,727

The balance in time deposits, including time deposits held for sale, that meet or exceed the FDIC insurance limit of $250,000 totaled $ 53.6 million and $ 59.2 million as of June 30, 2021 and December 31, 2020, respectively.

The aggregate amount of demand deposits, including demand deposits held for sale, that are overdrawn and have been reclassified as loans was $ 116,000 and $ 231,000 as of June 30, 2021 and December 31, 2020, respectively.

The balance in time deposits, including time deposits held for sale, that meet or exceed the FDIC insurance limit of $250,000 totaled $ 49.1 million and $ 59.2 million as of September 30, 2021 and December 31, 2020, respectively.

The aggregate amount of demand deposits, including demand deposits held for sale, that are overdrawn and have been reclassified as loans was $ 176,000 and $ 231,000 as of September 30, 2021 and December 31, 2020, respectively.

Short-Term Borrowings

2 unchanged sentences

Securities are pledged as collateral under these agreements in an amount at least equal to the outstanding balance and the collateral pledging requirements are monitored on a daily basis.

$ 10.1 million of securities sold under agreements to repurchase are reported as deposits held for sale at June 30, 2021 because the associated deposits will be sold as part of the Agreement with Citizens Bank.

$ 10.7 million of securities sold under agreements to repurchase are reported as deposits held for sale at September 30, 2021 because the associated deposits will be sold as part of the Agreement with Citizens Bank.

See Note 2 for further information.

The following table sets forth the components of short-term borrowings as of the dates indicated.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Amount Weighted

11 unchanged sentences

The following table sets forth the scheduled maturities of other borrowed funds at the dates indicated.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Dollars in thousands)

6 unchanged sentences

$ 6,000 2.32 % $ 8,000 2.27 %

As of June 30, 2021, the Bank maintained a credit arrangement with a maximum borrowing limit of approximately $ 430.7 million with the FHLB and available borrowing capacity of $ 317.8 million.

As of September 30, 2021, the Bank maintained a credit arrangement with a maximum borrowing limit of approximately $ 420.4 million with the FHLB and available borrowing capacity of $ 351.3 million.

This arrangement is subject to annual renewal, incurs no service charge, and is secured by a blanket security agreement on $ 564.1 million of residential and commercial mortgage loans and the Bank’s investment in FHLB stock.

Under this arrangement the Bank had available a variable rate Line of Credit in the amount of $ 150.0 million as of June 30, 2021, of which there was no outstanding balance.

Under this arrangement, the Bank had available a variable rate Line of Credit in the amount of $ 150.0 million as of September 30, 2021, of which there was no outstanding balance.

As an alternative to pledging securities, the FHLB periodically provides standby letters of credit on behalf of the Bank to secure certain public deposits in excess of the level insured by the FDIC.

If the FHLB is required to make payment for a beneficiary’s draw, the payment amount is converted into a collateralized advance to the Bank.

Standby letters of credit issued on our behalf by the FHLB to secure public deposits were $ 104.5 million and $ 90.3 million as of June 30, 2021 and December 31, 2020, respectively.

At June 30, 2021, the Bank maintained a Borrower-In-Custody of Collateral line of credit agreement with the Federal Reserve Bank (“FRB”) for $ 79.8 million that requires monthly certification of collateral, is subject to annual renewal, incurs no service charge and is secured by $ 120.3 million of commercial and industrial and consumer indirect auto loans.

Standby letters of credit issued on our behalf by the FHLB to secure public deposits were $ 60.6 million and $ 90.3 million as of September 30, 2021 and December 31, 2020, respectively.

At September 30, 2021, the Bank maintained a Borrower-In-Custody of Collateral line of credit agreement with the Federal Reserve Bank (“FRB”) for $ 82.8 million that requires monthly certification of collateral, is subject to annual renewal, incurs no service charge and is secured by $ 124.9 million of commercial and industrial and consumer indirect auto loans.

In addition, the Bank also maintains multiple line of credit arrangements with various unaffiliated banks totaling $ 50.0 million of which no draws had been taken.

At June 30, 2021 and December 31, 2020, CB Financial did not maintain any credit facilities.

At September 30, 2021 and December 31, 2020, CB Financial did not maintain any credit facilities.

Fair Value Disclosure

15 unchanged sentences

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 six months ended June 30, 2021 or year ended December 31, 2020.

There were no transfers into or out of Level 3 during the nine months ended September 30, 2021 or year ended December 31, 2020.

2021 December 31

7 unchanged sentences

141,690 79,493

Corporate Debt Level 2 7,481 —

Total Available-for-Sale Debt Securities 218,529 142,897

6 unchanged sentences

The table also presents the significant unobservable inputs used in the fair value measurements.

Financial Asset Fair Value Hierarchy June 30,

Financial Asset Fair Value Hierarchy September 30,

2021 Valuation

24 unchanged sentences

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 June 30, 2021 and December 31, 2020, the fair value of impaired loans consists of the loan balances of $ 2.5 million and $ 3.6 million, respectively, less their specific valuation allowances of $ 323,000 and $ 649,000 , respectively.

At September 30, 2021 and December 31, 2020, the fair value of impaired loans consists of the loan balances of $ 272,000 and $ 3.6 million, respectively, less their specific valuation allowances of $ 199,000 and $ 649,000 , respectively.

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.

13 unchanged sentences

The following table presents the estimated fair values of the Company’s financial instruments at the dates indicated.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Dollars in thousands)

35 unchanged sentences

The following table presents the unused and available credit balances of financial instruments whose contracts represent credit risk at the dates indicated.

September 30,

2021 December 31,

24 unchanged sentences

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 balance sheet.

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.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

4 unchanged sentences

Total Lease Expense $ 90 $ 128 $ 306 $ 381

September 30,

2021 December 31,

4 unchanged sentences

Weighted Average Discount Rate 2.47 % 2.39 %

September 30,

(Dollars in thousands)

21 unchanged sentences

The ROU asset was valued assuming its highest and best use in its current form.

Based on the analysis, the Company concluded that the ROU asset for this branch was fully impaired as of June 30, 2021, resulting in a remaining ROU carrying value of zero and the recognition of a $ 227,000 impairment for the three and six months ended June 30, 2021.

The impairment was recognized in Occupancy expense on the Consolidated Statements of (Loss) Income.

The impairment was recognized in Occupancy expense on the Consolidated Statements of Income (Loss).

Other Noninterest Expense

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

15 unchanged sentences

Segment and Related Information

At June 30, 2021, the Company’s business activities were comprised of two operating segments, which are community banking and insurance brokerage services.

At September 30, 2021, 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.

6 unchanged sentences

(Dollars in thousands)

June 30, 2021

September 30, 2021

Assets $ 1,474,626 $ 4,656 $ 130,994 $ ( 135,458 ) $ 1,474,818

5 unchanged sentences

Stockholders' Equity 128,984 3,054 134,530 ( 132,038 ) 134,530

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Interest and Dividend Income $ 10,768 $ 1 $ 1,311 $ ( 1,294 ) $ 10,786

1 unchanged sentence

Net Interest and Dividend Income 9,992 1 1,311 ( 1,294 ) 10,010

(Recovery) Provision for Loan Losses ( 1,200 ) — — — ( 1,200 )

Net Interest and Dividend Income After (Recovery) Provision for Loan Losses 11,112 1 5,825 ( 5,804 ) 11,134

Provision for Loan Losses — — — — —

Net Interest and Dividend Income After Provision for Loan Losses 9,992 1 1,311 ( 1,294 ) 10,010

Noninterest Income 975 1,195 28 — 2,198

Noninterest Expense 8,750 1,020 3 — 9,773

Undistributed Net Income (Loss) of Subsidiary 177 — ( 6,050 ) 5,873 —

(Loss) Income Before Income Tax (Benefit) Expense ( 466 ) 248 ( 220 ) 69 ( 369 )

Income Tax (Benefit) Expense ( 220 ) 71 3 — ( 146 )

Net (Loss) Income $ ( 246 ) $ 177 $ ( 223 ) $ 69 $ ( 223 )

Six Months Ended June 30, 2021

Undistributed Net Income of Subsidiary 124 — 654 ( 778 ) —

Income Before Income Tax Expense 2,341 176 1,990 ( 2,072 ) 2,435

Income Tax Expense 393 52 7 — 452

Net Income $ 1,948 $ 124 $ 1,983 $ ( 2,072 ) $ 1,983

Nine Months Ended September 30, 2021

Interest and Dividend Income $ 32,536 $ 4 $ 8,456 $ ( 8,402 ) $ 32,594

9 unchanged sentences

Net Income $ 4,306 $ 710 $ 4,605 $ ( 5,016 ) $ 4,605

Three Months Ended June 30, 2020

Community Bank Exchange Underwriters, Inc.

CB Financial Services, Inc.

Net Eliminations Consolidated

(Dollars in thousands)

Three Months Ended September 30, 2020

Interest and Dividend Income $ 11,639 $ 1 $ 1,310 $ ( 1,294 ) $ 11,656

5 unchanged sentences

Noninterest Expense 28,046 919 3 — 28,968

Undistributed Net Income of Subsidiary 148 — 1,580 ( 1,728 ) —

Income Before Income Tax Expense (Benefit) 3,501 211 2,908 ( 3,022 ) 3,598

Income Tax Expense 627 63 5 — 695

Net Income $ 2,874 $ 148 $ 2,903 $ ( 3,022 ) $ 2,903

Six Months Ended June 30, 2020

Undistributed Net Income (Loss) of Subsidiary 73 — ( 18,694 ) 18,621 —

(Loss) Income Before Income Tax (Benefit) Expense ( 17,566 ) 106 ( 17,446 ) 17,327 ( 17,579 )

Income Tax (Benefit) Expense ( 166 ) 33 ( 51 ) — ( 184 )

Net (Loss) Income $ ( 17,400 ) $ 73 $ ( 17,395 ) $ 17,327 $ ( 17,395 )

Nine Months Ended September 30, 2020

Interest and Dividend Income $ 35,664 $ 3 $ 2,634 $ ( 2,589 ) $ 35,712

5 unchanged sentences

Noninterest Expense 44,227 2,806 9 — 47,042

Undistributed Net Income of Subsidiary 360 — 2,703 ( 3,063 ) —

Income Before Income Tax Expense (Benefit) 4,755 516 3,586 ( 4,357 ) 4,500

Undistributed Net Income (Loss) of Subsidiary 433 — ( 15,991 ) 15,558 —

(Loss) Income Before Income Tax Expense (Benefit) ( 12,812 ) 623 ( 13,859 ) 12,969 ( 13,079 )

Income Tax Expense (Benefit) 590 190 ( 140 ) — 640

Net Income $ 3,997 $ 360 $ 3,676 $ ( 4,357 ) $ 3,676

Net (Loss) Income $ ( 13,402 ) $ 433 $ ( 13,719 ) $ 12,969 $ ( 13,719 )

Intangible Assets

The following table presents a summary of intangible assets subject to amortization at the dates indicated.

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value

7 unchanged sentences

As a result of the evaluation, the Company determined the carrying amount of the core deposit intangible was impaired $ 1.2 million.

The Company recorded the impairment in Intangible Asset and Goodwill Impairment on the Consolidated Statements of (Loss) Income.

The Company recorded the impairment in Intangible Asset and Goodwill Impairment on the Consolidated Statements of Income (Loss).

The estimated amortization expense of intangible assets assumes no activities, such as acquisitions, which would result in additional amortizable intangible assets.

Estimated amortization expense of intangible assets in subsequent fiscal years is as follows.

Estimated amortization expense of intangible assets in subsequent fiscal years is as follows as of September 30, 2021.

(Dollars in thousands)

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

10 unchanged sentences

Mortgage Servicing Rights, Net Carrying Value $ 733 $ 694 $ 733 $ 694

Amortization of MSRs and the period change in the valuation allowance are reported in Other Income on the Consolidated Statements of (Loss) Income.

Real estate loans serviced for others, which are not included in the Consolidated Statements of Financial Condition, totaled $ 96.7 million and $ 105.8 million at June 30, 2021 and December 31, 2020, respectively.

Amortization of MSRs and the period change in the valuation allowance are reported in Other Income on the Consolidated Statements of Income (Loss).

Real estate loans serviced for others, which are not included in the Consolidated Statements of Financial Condition, totaled $ 96.6 million and $ 105.8 million at September 30, 2021 and December 31, 2020, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements