What changed in this filing

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Item 1. Financial Statements

2022-05-11 compared with 2021-11-08 · 173 added, 511 removed, 696 unchanged (50% of the section changed)

1 unchanged sentence

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited) September 30,

(Unaudited) March 31,

2022 December 31,

7 unchanged sentences

Total Securities 231,097 224,974

Loans Held for Sale 17,407 —

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

Loans, Net of Allowance for Loan Losses of $ 11,595 and $ 11,582 at March 31, 2022 and December 31, 2021, Respectively

1,009,047 1,009,214

Premises and Equipment Held for Sale 795 —

Premises and Equipment, Net

5 unchanged sentences

$ 1,438,670 $ 1,425,479

Deposits Held for Sale $ 102,647 $ —

Non-Interest Bearing Demand Deposits 400,105 385,775

7 unchanged sentences

Other Borrowings

17,607 17,601

Accrued Interest Payable and Other Liabilities 9,375 8,875

5 unchanged sentences

Common Stock, $ 0.4167 Par Value;

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

35,000,000 Shares Authorized, 5,701,758 Shares Issued and 5,156,897 and 5,260,672 Shares Outstanding at March 31, 2022 and December 31, 2021, Respectively

Capital Surplus

2 unchanged sentences

59,343 57,534

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

Treasury Stock, at Cost ( 544,861 and 420,321 Shares at March 31, 2022 and December 31, 2021, Respectively)

( 12,367 ) ( 9,144 )

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Loss ( 10,618 ) ( 927 )

TOTAL STOCKHOLDERS' EQUITY

3 unchanged sentences

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

CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

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

13 unchanged sentences

NET INTEREST AND DIVIDEND INCOME 9,893 9,977

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

Provision For Loan Losses — —

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 9,893 9,977

NONINTEREST INCOME

3 unchanged sentences

Net Gain on Sales of Loans — 86

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

Net (Loss) Gain on Securities ( 7 ) 447

Net Gain on Purchased Tax Credits 14 18

1 unchanged sentence

Income from Bank-Owned Life Insurance 136 137

Other Income (Loss) 80 ( 2 ) 291 ( 240 )

Other Income 65 180

TOTAL NONINTEREST INCOME 2,613 3,174

11 unchanged sentences

Amortization of Intangible Assets 445 532

Intangible Assets Impairment — 18,693 1,178 18,693

Writedown of Fixed Assets 2 884 2,270 884

Other Expense 999 982

TOTAL NONINTEREST EXPENSE 8,656 9,395

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

Income Before Income Tax Expense 3,850 3,756

Income Tax Expense 803 911

NET INCOME $ 3,047 $ 2,845

EARNINGS PER SHARE

Basic $ 0.59 $ 0.52

4 unchanged sentences

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

(Dollars in thousands)

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

Net Income $ 3,047 $ 2,845

Other Comprehensive (Loss) Income:

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

Change in Unrealized (Loss) on Investment Securities Available-for-Sale ( 12,351 ) ( 2,851 )

Income Tax Effect 2,660 612

Reclassification Adjustment for Gain on Sale of Debt Securities Included in Net Income (1)

— — ( 225 ) ( 489 )

Income Tax Effect (2)

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).

Other Comprehensive (Loss), Net of Income Tax Effect ( 9,691 ) ( 2,416 )

Total Comprehensive (Loss) Income $ ( 6,644 ) $ 429

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

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

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

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

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

Three Months Ended March 31, 2022 Shares Issued Common Stock Capital Surplus Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Total Stockholders' Equity

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

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

Comprehensive Income:

December 31, 2021 5,680,993 $ 2,367 $ 83,294 $ 57,534 $ ( 9,144 ) $ ( 927 ) $ 133,124

Comprehensive Loss:

Net Income — — — 3,047 — — 3,047

Other Comprehensive Loss — — — — — ( 9,691 ) ( 9,691 )

Restricted Stock Awards Granted 20,765 9 ( 9 ) — — — —

Restricted Stock Awards Forfeited — — 4 — ( 4 ) — —

Stock-Based Compensation Expense — — 130 — — — 130

4 unchanged sentences

— — — ( 1,238 ) — — ( 1,238 )

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)

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

Dividends Paid ($ 0.24 Per Share)

— — — ( 1,296 ) — — ( 1,296 )

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

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

March 31, 2022 5,701,758 $ 2,376 $ 83,422 $ 59,343 $ ( 12,367 ) $ ( 10,618 ) $ 122,156

Three Months Ended March 31, 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 — — 121 — — — 121

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

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

— — — — ( 2,451 ) — ( 2,451 )

Dividends Paid ($ 0.24 Per Share)

— — — ( 1,304 ) — — ( 1,304 )

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 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

Exercise of Stock Options — — 4 — ( 82 ) — ( 78 )

Treasury Stock Purchased, at cost ( 67,816 shares)

— — — — ( 1,908 ) — ( 1,908 )

Dividends Paid ($ 0.72 Per Share)

— — — ( 3,888 ) — — ( 3,888 )

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

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

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30, 2021 2020

Three Months Ended March 31, 2022 2021

(Dollars in thousands)

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 )

Net Income $ 3,047 $ 2,845

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

Net Amortization on Securities 17 31

Depreciation and Amortization 637 562

(Recovery) Provision for Loan Losses ( 1,200 ) 4,000

Intangible Asset Impairment 1,178 —

Goodwill Impairment — 18,693

Writedown on Fixed Assets 2,270 884

Lease Impairment 227 —

Gain on Securities ( 482 ) ( 20 )

Loss (Gain) on Securities 7 ( 447 )

Gain on Purchased Tax Credits ( 14 ) ( 18 )

3 unchanged sentences

Gain on Sale of Loans — ( 86 )

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

Gain on Sale of Other Real Estate Owned and Repossessed Assets ( 1 ) —

Noncash Expense for Stock-Based Compensation 130 121

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

Decrease in Accrued Interest Receivable 94 134

Net Loss on Disposal of Fixed Assets 8 —

Increase (Decrease) in Taxes Payable 295 ( 253 )

Increase in Taxes Payable 956 893

Payments on Operating Leases — ( 88 )

Decrease in Accrued Interest Payable 60 ( 141 )

Refund of Federal and State Income Taxes 1,311 —

Other, Net ( 1,640 ) 714

5 unchanged sentences

Proceeds from Sale of Securities — 11,930

Net Decrease (Increase) in Loans 33,378 ( 100,436 )

Net Decrease in Loans 223 3,148

Purchase of Premises and Equipment ( 186 ) ( 199 )

Proceeds from Disposal of Premises and Equipment — 26

Proceeds From Sale of Other Real Estate Owned 37 —

Decrease (Increase) in Restricted Equity Securities 533 ( 305 )

NET CASH USED IN INVESTING ACTIVITIES ( 46,473 ) ( 60,539 )

(Increase) Decrease in Restricted Equity Securities ( 26 ) 200

NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES ( 18,450 ) 3,733

FINANCING ACTIVITIES

Net Increase in Deposits 23,700 59,894

Net Increase in Short-Term Borrowings 12,260 11,490

Net (Decrease) Increase in Short-Term Borrowings ( 47 ) 4,297

Principal Payments on Other Borrowed Funds — ( 2,000 )

8 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30, 2021 2021 2020

Three Months Ended March 31, 2022 2022 2021

(Dollars in thousands)

3 unchanged sentences

$ 486 $ 1,153

Income Taxes 1,524 1,785

SUPPLEMENTAL NONCASH DISCLOSURE:

Transfer of Loans to Loans Held for Sale 10,056 —

Transfer of Premises and Equipment to Premises and Equipment Held for Sale and Other Assets 1,075 —

Transfer of Deposits to Deposits Held for Sale 102,647 —

Other Real Estate Acquired in Settlement of Loans 37 115

Right of Use Asset Recognized 1,175 —

20 unchanged sentences

Nature of Operations

The Company derives substantially all its income from banking and bank-related services which include interest earnings on commercial, commercial mortgage, residential real estate and consumer loan financing, as well as interest earnings on investment securities and fees generated from deposit services to its customers.

The Company provides banking services through its subsidiary, Community Bank, a Pennsylvania-chartered commercial bank.

The Bank operates 11 branches in Greene, Allegheny, Washington, Fayette and Westmoreland Counties in southwestern Pennsylvania, and five branches in Marshall, Ohio, Upshur and Wetzel Counties in West Virginia.

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.

After the consolidation of six branches and the sale of two branches in 2021 and the consolidation of two branches in 2020, the Bank operates 11 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.

Reclassifications

Certain comparative amounts for the prior year have been reclassified to conform to the current year presentation.

Such reclassifications did not affect net income or stockholders’ equity.

Assets and Liabilities Held for Sale

Assets and liabilities (disposal groups) are classified as held for sale when their carrying amounts will be recovered principally through sale when all of the following criteria are met:

• management, having the authority to approve the action, commits to a plan to sell the disposal group;

• the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups;

• an active program to locate a buyer and other actions required to complete the plan to sell the disposal group have been initiated;

• the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify as a completed sale within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year;

• the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value;

• actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Assets and liabilities held for sale are measured at the lower of carrying amount and fair value, less estimated costs to sell, and are presented separately on the Consolidated Statements of Financial Condition.

Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met.

Gains are not recognized on the sale of a disposal group until the date of sale.

The Company assesses the fair value of a disposal group, less any estimated costs to sell, each reporting period it remains classified as held for sale and reports any subsequent losses as an adjustment to the carrying value of the disposal group.

Assets classified as held for sale are no longer depreciated or amortized.

Loans held for sale may consist of residential real estate loans originated and intended for sale in the secondary market.

These loans are generally sold with loan servicing rights retained.

Net unrealized losses, if any, are recognized through a valuation allowance charged to income.

Gains and losses on residential real estate loans held for sale are included in noninterest income.

Impairment of Long-Lived Assets

The Company routinely performs assessments of the recoverability of long-lived assets when events or changes in circumstances indicate that their carrying values may not be recoverable and are in excess of their fair value, less estimated costs to sell.

If estimated recoverable amounts are lower than carrying values, assets are considered impaired and reduced to their recoverable amounts with the recognized impairment charges recorded in noninterest expense in the Consolidated Statements of (Loss) Income.

Long-lived assets are tested for impairment individually or as part of an asset group.

An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

The Company follows ASC 360, Property, Plant and Equipment, which requires three steps to identify, recognize and measure the impairment of a long-lived asset (asset group) to be held and used:

Step 1 – Consider whether Indicators of Impairment are Present.

The following are examples of such events or changes in circumstances.

• A significant decrease in the market price of a long-lived asset (asset group).

• A significant adverse change in the extent or manner in which a long-lived asset (asset group) is being used or in its physical condition.

• A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator.

• An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (asset group).

• A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (asset group).

• A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

The term more likely than not refers to a level of likelihood that is more than 50 percent.

Step 2—Test for Recoverability

If indicators of impairment are present, the Company performs a recoverability test comparing the sum of the estimated undiscounted cash flows attributable to the long-lived asset or asset group in question to the carrying amount of the long-lived asset or asset group.

Step 3—Measurement of an Impairment Loss

If the undiscounted cash flows used in the recoverability test are less than the carrying amount of the long-lived asset (asset group), the Company estimates the fair value of the long-lived asset or asset group and recognizes an impairment loss when the carrying amount of the long-lived asset or asset group exceeds the estimated fair value.

An impairment loss is allocated to the long-lived assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group must not reduce the carrying amount of

that asset below its fair value whenever the fair value is determinable without undue cost and effort.

ASC 360 prohibits the subsequent reversal of an impairment loss for an asset held and used.

Critical Accounting Policies;

Use of Critical Accounting Estimates

There were no material changes in our critical accounting policies during the three months ended March 31, 2022.

See Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC, for additional information regarding our critical accounting policies.

Recent Accounting Standards

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.

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).

The ASU is intended to help stakeholders during the global market-wide reference rate transition period.

ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022.

While the LIBOR reform may require extensive changes to the contracts that govern LIBOR based products, as well as our systems and processes, we cannot yet determine whether the Company will be able to use the optional expedient for the changes to contract terms that may be required by LIBOR reform and therefore, the Company cannot yet determine the magnitude of the impact or the overall impact of the new guidance on the Company’s consolidated financial condition or results of operation.

In December 2019, FASB issued ASU 2019-12, Income taxes (Topic 740);

Simplifying the Accounting for Income Taxes .

ASU 2019-12 provides amendments intended to reduce the cost and complexity in accounting for income taxes while maintaining or improving the usefulness of the information provided to users of financial statements.

ASU 2019-12 removes the following exceptions from ASC 740, Income Taxes:

(i) exceptions to the incremental approach for intraperiod tax allocation;

(ii) exceptions to accounting for basis differences when a foreign subsidiary becomes an equity method investment or a foreign equity method investment become a subsidiary;

and (iii) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses.

ASU 2019-12 provides the following amendments that simplify and improve guidance with Topic 740:

(i) franchise taxes that are based partially on income;

(ii) transactions that result in a step up in the tax basis of goodwill;

(iii) separate financial statements of legal entities that are not subject to tax;

(iv) enacted changes in tax laws in interim periods;

and (v) employee stock ownership plans and investments in qualified affordable housing projects accounted for using the equity method.

For public business entities, the amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

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

In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

4 unchanged sentences

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.

For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however this ASU requires that credit losses be presented as an allowance rather than as a write-down.

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.

For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP;

however, this ASU requires that credit losses be presented as an allowance rather than as a write-down.

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.

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.

1 unchanged sentence

Early adoption will continue to be permitted.

The Company is evaluating the impact of this ASU and expects to recognize a one-time adjustment to the allowance for loan losses upon adoption, but we cannot yet determine the magnitude of the one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial condition or results of operation.

Impairment of Long-Lived Assets and Assets and Liabilities of Branches Held for Sale

Branch Optimization and Operational Efficiency Initiatives

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 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.

The Bank also completed a comprehensive review of its branch network and operating environment to identify solutions to improve operating performance.

This review prioritized profitability, efficiency, infrastructure and client experience improvements, automation in operations, and digital marketing and technology investments.

The Bank continues to make progress related to these initiatives through the consolidation of six branches that was completed on June 30, 2021, reducing the Bank's branch network to 16 branches.

The Bank is also in the process of implementing operational efficiencies related to individualized processes within its branch network and operating environment.

In addition, on June 10, 2021, CB Financial, Community Bank, and Citizens Bank of West Virginia, Inc.

(“Citizens Bank”) executed a Purchase and Assumption Agreement (the “Agreement”) pursuant to which Citizens Bank has agreed to purchase certain loans and other assets, and assume certain deposits and other liabilities, of the branch offices of Community Bank located in Buckhannon, West Virginia, and in New Martinsville, West Virginia.

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.

Utilizing guidance in ASC 360, the Company performed the three step process to identify, recognize and measure the impairment of the long-lived assets.

• For the six locations that were consolidated:

◦ Three locations were written down to the fair value of the land based on the appraised value due to plans to raze the buildings.

◦ Two locations are being marketed for sale and were written down to fair value based on appraised value.

◦ One location is leased.

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 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 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)

Loans Held for Sale

Residential $ 2,290

Commercial 2,911

Commercial and Industrial 592

Total Loans Held for Sale $ 6,498

Premises and Equipment Held for Sale 795

Deposits Held for Sale

Non-Interest Bearing Demand Deposits $ 15,070

Interest Bearing Demand Deposits 31,502

Money Market Accounts 17,578

Savings Accounts 20,803

Time Deposits 17,694

Total Deposits Held for Sale $ 102,647

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.

In preparation for the implementation of this ASU, the Company has formed a cross-functional team, contracted with a third-party software provider, and is consulting with a third-party professional advisory service to assist in the model development.

The Company plans to assess the overall impact by running the existing and new allowance models in parallel prior to the period of implementation.

The Company expects to recognize a one-time adjustment to the allowance for loan losses upon adoption, but cannot yet determine the magnitude of the one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial condition or results of operation.

Earnings Pe r 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,

2021 2020 2021 2020

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

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

Net Income $ 3,047 $ 2,845

Weighted-Average Basic Common Shares Outstanding

1 unchanged sentence

Dilutive Effect of Common Stock Equivalents (Stock Options and Restricted Stock)

17,096 — 7,803 —

Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding

5,220,887 5,436,881

Earnings (Loss) Per Share:

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

Earnings Per Share:

$ 0.59 $ 0.52

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Stock Options 155,138 201,662

Restricted Stock 37,865 33,610

When there is a net loss for the period, the exercise or conversion of any potential shares increases the number of shares in the denominator and results in a lower loss per share.

In that situation, the potential shares are antidilutive and not included in the Company's loss per share calculation.

Therefore, if there is a net loss, diluted loss per share is the same as basic loss per share.

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

September 30, 2021

March 31, 2022

(Dollars in thousands)

6 unchanged sentences

52,505 177 ( 2,063 ) 50,619

Collateralized Mortgage Obligations - Government Sponsored Enterprises 107,848 2 ( 7,042 ) 100,808

Corporate Debt 9,480 — ( 273 ) 9,207

12 unchanged sentences

55,373 1,468 ( 282 ) 56,559

Collateralized Mortgage Obligations - Government Sponsored Enterprises 88,493 164 ( 2,074 ) 86,583

Corporate Debt 7,481 — ( 31 ) 7,450

Total Available-for-Sale Debt Securities 223,290 2,638 ( 3,820 ) 222,108

3 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:

September 30, 2021

March 31, 2022

Less than 12 months

3 unchanged sentences

3 $ 11,226 $ ( 771 ) 10 $ 37,985 $ ( 4,010 ) 13 $ 49,211 $ ( 4,781 )

Obligations of States and Political Subdivisions

2 1,070 ( 1 ) — — — 2 1,070 ( 1 )

Mortgage Backed Securities- Government Sponsored Enterprises

17 29,175 ( 1,745 ) 1 3,395 ( 318 ) 18 32,570 ( 2,063 )

Collateralized Mortgage Obligations - Government Sponsored Enterprises 20 100,559 ( 7,042 ) — — — 20 100,559 ( 7,042 )

Corporate Debt 3 9,208 ( 273 ) — — — 3 9,208 ( 273 )

6 unchanged sentences

5 $ 17,729 $ ( 269 ) 7 $ 31,830 $ ( 1,164 ) 12 $ 49,559 $ ( 1,433 )

Obligations of States and Political Subdivisions

— — — — — — — — —

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.

Mortgage Backed Securities- Government Sponsored Enterprises

8 28,772 ( 282 ) — — — 8 28,772 ( 282 )

Collateralized Mortgage Obligations - Government Sponsored Enterprises 10 77,560 ( 2,074 ) — — — 10 77,560 ( 2,074 )

Corporate Debt 2 7,450 ( 31 ) — — — 2 7,450 ( 31 )

25 $ 131,511 $ ( 2,656 ) 7 $ 31,830 $ ( 1,164 ) 32 $ 163,341 $ ( 3,820 )

For debt securities, the Company does not believe that any individual unrealized loss as of March 31, 2022 or December 31, 2021, 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 September 30, 2021 and December 31, 2020 relate principally to changes in market interest rates subsequent to the acquisition of the specific securities.

securities that are temporarily impaired at March 31, 2022 and December 31, 2021 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 $ 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.

Securities available-for-sale with a fair value of $ 147.4 million and $ 121.0 million at March 31, 2022 and December 31, 2021, 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:

September 30, 2021

March 31, 2022

(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 Income (Loss).

All gains and losses presented in the table below are reported in Net (Loss) Gain on Securities on the Consolidated Statements of Income.

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

(Dollars in thousands)

4 unchanged sentences

Equity Securities

Net Unrealized Gain (Loss) Recognized on Securities Held $ 18 $ ( 59 ) $ 251 $ ( 469 )

Net Unrealized (Loss) Gain Recognized on Securities Held $ ( 7 ) $ 222

Net Realized Gain Recognized on Securities Sold — —

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

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

Net (Loss) Gain on Equity Securities $ ( 7 ) $ 222

Net (Loss) Gain on Securities $ ( 7 ) $ 447

As of March 31, 2022 and December 31, 2021, securities available to be pledged have a fair value of $ 219.0 million and $ 214.7 million, respectively,and are inclusive of collateral currently pledged for public funds and sweep deposits.

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,.

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, 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.

4 unchanged sentences

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.

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.

8 unchanged sentences

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(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 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.

PPP loans decreased $ 16.3 million to $ 8.2 million at March 31, 2022 compared to $ 24.5 million at December 31, 2021.

Net unamortized PPP loan origination fees as of March 31, 2022 and December 31, 2021 were $ 274,000 and $ 678,000 , respectively.

Net PPP loan origination fees earned were $ 404,000 and $ 535,000 for the three months ended March 31, 2022 and March 31, 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 $ 2.1 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.

(Dollars in thousands)

Residential $ 9,640

Commercial 6,470

Construction —

Commercial and Industrial 592

Total Loans Held for Sale $ 17,407

Total unamortized net deferred loan fees were $ 1.6 million and $ 1.9 million at March 31, 2022 and December 31, 2021, respectively.

The Company uses an eight-point internal risk rating system to monitor the credit quality of the overall loan portfolio.

4 unchanged sentences

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 uncollectable and of such little value that continuance as an asset is not warranted.

Loans classified as loss are considered uncollectible and of such little value that continuance as an asset is not warranted.

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 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

At March 31, 2022 and December 31, 2021, there were no loans in the criticized category of Loss within the internal risk rating system.

March 31, 2022

(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.

September 30, 2021

March 31, 2022

(Dollars in Thousands)

17 unchanged sentences

$ 1,012,860 $ 2,875 $ 98 $ — $ 2,973 $ 4,963 $ 1,020,796

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.

Additional interest income that would have been recorded if the loans that were nonaccrual at March 31, 2022 were current was $ 79,000 for the three months ended March 31, 2022, and $ 61,000 for the three months ended March 31, 2021.

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,

2022 December 31,

12 unchanged sentences

Total Nonperforming Loans

10,907 14,488

Other Real Estate Owned:

5 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 $ 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.

For a loan modification to be considered a TDR, the borrower must be experiencing financial difficulty and a concession must be granted, except for an insignificant delay in payment.

Section 4013 of the CARES Act and regulatory guidance promulgated by federal banking regulators provide temporary relief from accounting and financial reporting requirements for TDRs regarding certain short-term loan modifications related to COVID-19.

Specifically, the CARES Act provides that the Bank may elect to suspend the requirements under GAAP for certain loan modifications that would otherwise be categorized as a TDR and suspend any determination that such loan modifications would be considered a TDR, including the related impairment for accounting purposes.

Any modification involving a loan that was not more than 30 days past due as of December 31, 2019 and that occurs beginning on March 1, 2020 and ends on the earlier of January 1, 2022 (as extended by the Consolidated Appropriations Act, 2021) or the date that is 60 days after the termination date of the national emergency related to

the COVID-19 outbreak qualify for this exception, including a forbearance arrangement, interest rate modification, repayment plan or any other similar arrangement that defers or delays the payment of principal or interest.

Bank regulatory agencies released an interagency statement that offers practical expedients for modifications that occur in response to the COVID-19 pandemic, but it differs with the CARES Act in certain areas.

The expedients require a lender to conclude that a borrower is not experiencing financial difficulty if either short-term (e.g., six months or less) modifications are made, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant related to loans in which the borrower is less than 30 days past due on its contractual payments at the time a modification program is implemented or the modification or deferral program is mandated by the federal government or a state government.

The bank regulatory agencies have subsequently confirmed that their guidance could be applicable for loans that do not qualify for favorable accounting treatment under Section 4013 of the CARES Act.

Both Section 4013 of the CARES Act and the interagency statement can be applied to a second modification that occurs after the first modification provided that the second modification does not qualify as a TDR under Section 4013 of the CARES Act or the interagency statement.

The Bank offered forbearance options for borrowers impacted by COVID-19 that provide a short-term delay in payment by primarily allowing:

(a) deferral of three to six months of payments;

or (b) for consumer loans not secured by a real estate mortgage, three months of interest-only payments that also extends the maturity date of the loan by three months .

During the forbearance period, the borrower is not considered delinquent for credit bureau reporting purposes.

The Company has elected the practical expedients related to TDRs that are available in the CARES Act and interagency guidance as an entity-wide accounting policy and does not consider any of the forbearance agreements TDRs, delinquent, or nonaccrual.

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

September 30, 2021 December 31, 2020

Loans Amount % of Portfolio Number

Loans Amount % of Portfolio

(Dollars in thousands)

Residential — $ — — % 4 $ 749 0.2 %

Commercial — — — % 8 19,818 5.3 %

Construction — — — % 1 1,958 2.7 %

Commercial and Industrial — — — % 5 1,219 1.0 %

Consumer — — — % 13 356 0.3 %

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

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 $ 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 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 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 recorded investment of residential real estate loans for which formal foreclosure proceedings were in process according to applicable requirements of the local jurisdiction was $ 945,000 and $ 571,000 at March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022 , the Company had one TDR loan in forbearance that totaled $ 128,000 .

There were no modifications to troubled debt restructurings during the three months ended March 31, 2022.

As of December 31, 2021, there were no loans in forbearance.

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

September 30, 2021

March 31, 2022

(Dollars in thousands)

11 unchanged sentences

Commercial and Industrial

96 96 96 146 2

Total With A Related Allowance Recorded

34 unchanged sentences

$ 15,664 $ 299 $ 16,029 $ 34,388 $ 1,111

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 recorded investment of loans evaluated for impairment decreased $ 493,000 at March 31, 2022 compared to December 31, 2021 and was primarily related to commercial real estate loans.

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)

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

— — — — ( 19 ) — — ( 19 )

2 — — 11 43 — — 56

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

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

(Dollars in thousands)

December 31, 2021 $ 1,420 $ 5,960 $ 1,249 $ 1,151 $ 1,050 $ — $ 752 $ 11,582

2 unchanged sentences

Provision (Recovery) ( 20 ) ( 5,449 ) ( 448 ) 3,406 921 — 1,590 —

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

September 30, 2021

March 31, 2022 $ 1,385 $ 511 $ 801 $ 4,568 $ 1,988 $ — $ 2,342 $ 11,595

March 31, 2022

(Dollars in thousands)

10 unchanged sentences

(Dollars in thousands)

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

( 11 ) — — — ( 103 ) — — ( 114 )

1 1 — 6 38 — — 46

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

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

(Dollars in thousands)

December 31, 2020 $ 2,249 $ 6,010 $ 889 $ 1,423 $ 1,283 $ — $ 917 $ 12,771

2 unchanged sentences

Provision (Recovery) ( 283 ) ( 93 ) 50 108 ( 113 ) — 331 —

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

September 30, 2020

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

March 31, 2021

(Dollars in thousands)

3 unchanged sentences

$ 1,975 $ 5,648 $ 939 $ 1,041 $ 1,103 $ — $ 1,248 $ 11,954

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 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.

At March 31, 2022 and December 31, 2021, commercial and industrial loans include $ 8.2 million and $ 24.5 million, respectively, of PPP loans collectively evaluated for potential

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.

September 30, 2021

March 31, 2022

(Dollars in thousands)

16 unchanged sentences

Accretable Yield

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.

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

(Dollars in thousands)

One Year or Less

$ 68,228 $ 8,560 $ 59,668

Over One Through Two Years

58,693 4,346 54,347

Over Two Through Three Years

10,758 1,034 9,724

Over Three Through Four Years

11,362 2,415 8,947

Over Four Through Five Years

9,645 1,143 8,502

Over Five Years

3,735 196 3,539

$ 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 $ 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.

March 31, 2022 $ 670

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.

$ 10.7 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.

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Amount Weighted

8 unchanged sentences

Market Value 54,703 59,339

Other Borrowed Funds

Other borrowed funds consist of fixed rate advances from the FHLB.

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

September 30, 2021 December 31, 2020

(Dollars in thousands)

Due in One Year

$ 3,000 2.23 % $ 2,000 2.12 %

Due After One Year to Two Years

3,000 2.41 3,000 2.23

Due After Two Years to Three Years

— — 3,000 2.41

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

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 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 $ 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 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 nine months ended September 30, 2021 or year ended December 31, 2020.

There were no transfers into or out of Level 3 during the three months ended March 31, 2022 or year ended December 31, 2021.

2022 December 31

7 unchanged sentences

50,619 56,559

Collateralized Mortgage Obligations - Government Sponsored Enterprises Level 2

100,808 86,583

Corporate Debt Level 2 9,207 7,450

7 unchanged sentences

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

Financial Asset Fair Value Hierarchy September 30,

Financial Asset Fair Value Hierarchy March 31,

2022 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 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.

At March 31, 2022 and December 31, 2021, the fair value of impaired loans consists of the loan balances of $ 2.1 and $ 2.3 million, respectively, less their specific valuation allowances of $ 180,000 and $ 299,000 , respectively.

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.

1 unchanged sentence

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 (Loss) Income.

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.

OREO properties are evaluated at the time of acquisition and recorded at fair value, less estimated selling costs.

8 unchanged sentences

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(Dollars in thousands)

7 unchanged sentences

231,097 231,097 224,974 224,974

Loans Held for Sale Level 2 17,407 18,304 — —

1,009,047 1,014,050 1,009,214 1,039,980

Property and Equipment Held for Sale Level 2 795 795 — —

Restricted Stock

4 unchanged sentences

Financial Liabilities:

Deposits Held for Sale Level 2 102,647 107,779 — —

1,250,313 1,249,804 1,226,613 1,227,653

2 unchanged sentences

Other Borrowed Funds

6,000 6,058 8,000 8,067

FHLB Borrowings Level 2 3,000 3,000 3,000 3,000

Subordinated Debt Level 2 14,607 14,749 14,601 15,000

Accrued Interest Payable

5 unchanged sentences

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.

those instruments.

The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

3 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,

2022 December 31,

29 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

(Dollars in thousands)

3 unchanged sentences

Total Lease Expense $ 89 $ 111

September 30,

2022 December 31,

4 unchanged sentences

Weighted Average Discount Rate 2.47 % 2.51 %

September 30,

(Dollars in thousands)

9 unchanged sentences

Lease Liabilities $ 1,976

Impairment of ROU Assets

ROU assets from operating leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, and are reviewed for impairment when indicators of impairment are present.

ASC 360 requires three steps to identify, recognize and measure impairment.

If indicators of impairment are present (Step 1), the Company performs a recoverability test (Step 2) comparing the sum of the estimated undiscounted cash flows attributable to the ROU asset in question to the carrying amount.

If the undiscounted cash flows used in the recoverability test are less than the carrying amount, the Company estimates the fair value of the ROU asset and recognizes an impairment loss when the carrying amount exceeds the estimated fair value (Step 3).

At June 30, 2021, the Company consolidated six branches as part of its branch optimization initiative.

One of the branches was leased and the Company performed the three-step evaluation as outlined above to determine whether the operating lease was impaired.

As part of the recoverability test, the Company elected to exclude operating lease liabilities from the carrying amount of the asset group.

The undiscounted future cash flows used in the recoverability test were based on assumptions made by the Company rather than market participant assumptions.

Since an election was made to exclude operating lease liabilities from the asset or asset group, all future cash lease payments for the lease were also excluded.

In addition, the Company elected to exclude operating lease liabilities from the estimated fair value, consistent with the recoverability test When determining the fair value of the ROU asset, the Company estimated what market participants would pay to lease the asset.

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 nine months ended September 30, 2021.

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

During the three months ended March 31, 2022, the Company entered into a new lease agreement for the McMurray, PA branch, for a 10-year term ending March 31, 2032.

The increase to the operating Right of Use Asset and corresponding lease liability is approximately $ 1.17 million.

Other Noninterest Expense

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

(Dollars in thousands)

7 unchanged sentences

Meals and Entertainment 30 34

Travel 27 13 77 87

Training 18 17

4 unchanged sentences

Segment and Related Information

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

At March 31, 2022, 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)

September 30, 2021

March 31, 2022

Assets $ 1,439,251 $ 5,584 $ 136,994 $ ( 143,159 ) $ 1,438,670

5 unchanged sentences

Stockholders' Equity 126,263 3,379 133,124 ( 129,642 ) 133,124

Three Months Ended September 30, 2021

Three Months Ended March 31, 2022

Interest and Dividend Income $ 10,596 $ 1 $ 1,279 $ ( 1,260 ) $ 10,616

6 unchanged sentences

Undistributed Net Income of Subsidiary 561 — 1,852 ( 2,413 ) —

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

Income Tax Expense 393 52 7 — 452

Income Before Income Tax Expense (Benefit) 3,722 791 3,010 ( 3,673 ) 3,850

Income Tax Expense (Benefit) 610 230 ( 37 ) — 803

Net Income $ 3,112 $ 561 $ 3,047 $ ( 3,673 ) $ 3,047

Nine Months Ended September 30, 2021

Three Months Ended March 31, 2021

Interest and Dividend Income $ 10,971 $ 1 $ 1,320 $ ( 1,304 ) $ 10,988

1 unchanged sentence

Net Interest and Dividend Income 9,960 1 1,320 ( 1,304 ) 9,977

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

Net Interest and Dividend Income After (Recovery) Provision for Loan Losses 31,063 4 8,456 ( 8,402 ) 31,121

Provision for Loan Losses — — — — —

Net Interest and Dividend Income After Provision for Loan Losses 9,960 1 1,320 ( 1,304 ) 9,977

Noninterest Income 1,343 1,591 240 — 3,174

Noninterest Expense 8,390 1,001 4 — 9,395

Undistributed Net Income (Loss) of Subsidiary 710 — ( 4,096 ) 3,386 —

Undistributed Net Income of Subsidiary 407 — 1,301 ( 1,708 ) —

Income Before Income Tax Expense 3,320 591 2,857 ( 3,012 ) 3,756

1 unchanged sentence

Net Income $ 2,605 $ 407 $ 2,845 $ ( 3,012 ) $ 2,845

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

Interest Expense 1,240 — — — 1,240

Net Interest and Dividend Income 10,399 1 1,310 ( 1,294 ) 10,416

Provision for Loan Losses 1,200 — — — 1,200

Net Interest and Dividend Income After Provision for Loan Losses 9,199 1 1,310 ( 1,294 ) 9,216

Noninterest Income 1,208 1,024 ( 59 ) — 2,173

Noninterest Expense 28,046 919 3 — 28,968

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

Interest Expense 4,442 — — — 4,442

Net Interest and Dividend Income 31,222 3 2,634 ( 2,589 ) 31,270

Provision for Loan Losses 4,000 — — — 4,000

Net Interest and Dividend Income After Provision for Loan Losses 27,222 3 2,634 ( 2,589 ) 27,270

Noninterest Income (Loss) 3,760 3,426 ( 493 ) — 6,693

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

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 (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.

September 30, 2021 December 31, 2020

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

(Dollars in thousands)

Core Deposit Intangible $ 14,103 $ ( 8,386 ) $ ( 1,178 ) $ 4,539 $ 14,103 $ ( 7,047 ) $ 7,056

Customer List 1,800 ( 599 ) — 1,201 1,800 ( 457 ) 1,343

Total Intangible Assets $ 15,903 $ ( 8,985 ) $ ( 1,178 ) $ 5,740 $ 15,903 $ ( 7,504 ) $ 8,399

On June 10, 2021, the Agreement was executed with Citizens Bank pursuant to which Citizens Bank has agreed to assume certain deposits of the branch offices of Community Bank located in Buckhannon, West Virginia, and in New Martinsville, West Virginia.

In 2018, the Company recorded a core deposit intangible asset related to the acquisition of these two branches as part of the merger with First West Virginia Bancorp, Inc.

As a result of signing the Agreement and the expected sale of a portion of the deposits associated with the remaining core deposit intangible, the Company performed an interim evaluation to determine whether the core deposit intangible was impaired.

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 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 as of September 30, 2021.

(Dollars in thousands)

Remaining in 2021 $ 445

2026 and Thereafter 395

Total Estimated Intangible Asset Amortization Expense $ 5,740

Mortgage Servicing Rights

The following table presents MSR activity and net carrying values for the periods indicated.

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

(Dollars in thousands)

Mortgage Servicing Rights:

Balance, Beginning of Period $ 902 $ 1,032 $ 1,029 $ 1,001

Additions 32 73 64 210

Amortization ( 70 ) ( 71 ) ( 229 ) ( 177 )

Balance, End of Period $ 864 $ 1,034 $ 864 $ 1,034

Valuation Allowance:

Balance, Beginning of Period $ ( 213 ) $ ( 340 ) $ ( 373 ) $ ( 71 )

Valuation Allowance Adjustment 82 — 242 ( 269 )

Balance, End of Period $ ( 131 ) $ ( 340 ) $ ( 131 ) $ ( 340 )

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 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.

Stock Based Compensation

The following table presents stock option information for the periods indicated.

Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual

Life in Years

Outstanding Options at December 31, 2021 207,641 $ 24.01 4.8

Granted 85,465 25.95

Exercised ( 7,500 ) 22.25

Forfeited ( 68 ) 30.75

Outstanding Options at March 31, 2022 285,538 $ 24.64 6.1

Exercisable Options at March 31, 2022 179,515 $ 24.25 4.2

Number of Shares Weighted Average Exercise Price Weighted Average Remaining Service Period in Years

Nonvested Options March 31, 2022 106,023 $ 25.30 9.4

Summary of Significant Assumptions for Newly Issued Stock Options

Expected Term in Years 6.5

Expected Volatility 28.7 %

Expected Dividends $ 0.96

Risk Free Rate of Return 1.57 %

Weighted Average Grant Date Fair Value (per share) $ 4.90

The following table presents restricted stock award information for the periods indicated

Number of Shares Weighted Average Grant Date Fair Value Price Weighted Average Remaining Service Period in Years

Nonvested Restricted Stock at December 31, 2021 56,140 $ 23.90 5.3

Granted 20,765 26.25

Forfeited ( 200 ) 20.38

Nonvested Restricted Stock at March 31, 2022 76,705 $ 24.55 5.0

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 $ 130,000 and $ 121,000 for the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022 and December 31, 2021, total unrecognized compensation expense was $ 456,000 and $ 65,000 , respectively, related to stock options, and $ 1.7 million and $ 1.3 million, respectively, related to restricted stock awards.

Intrinsic value represents the amount by which the fair value of the underlying stock at March 31, 2022 and December 31, 2021 exceeds the exercise price of the stock options.

The intrinsic value of stock options was $ 273,000 and $ 296,000 at March 31, 2022 and December 31, 2021, respectively.

At March 31, 2022 and December 31, 2021, respectively, there were 362,622 and 500,000 shares available under the Plan to be issued in connection with the exercise of stock options, and 145,049 and 200,000 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.

Subsequent Events

Stock Repurchase Program

On April 21, 2022, the Company announced a program to repurchase up to $ 10 million of the Company’s outstanding shares of common stock.

Based on the Company’s closing stock price on April 19, 2022, the repurchase program, if fully completed, would encompass 433,463 shares, or approximately 8.4 % the shares currently outstanding.

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