CB Financial Services, Inc. 10-Q

Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations. This discussion should be read in conjunction with the unaudited consolidated financial statements, notes and tables included in this report. For further information, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Forward-Looking Statements This report contains certain “forward-looking statements” within the meaning of the federal securities laws. These statements are not historical facts, but rather statements based on the Company’s current expectations regarding its business strategies, intended results and future performance. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions. Management’s ability to predict results or the effect of future plans or strategies is inherently uncertain. Factors which could affect actual results include, but are not limited to, the following: • General and local economic conditions; • Changes in market interest rates, deposit flows, demand for loans, real estate values and competition; • Competitive products and pricing; • The ability of our customers to make scheduled loan payments; • Loan delinquency rates and trends; • Our ability to manage the risks involved in our business; • Our ability to integrate the operations of businesses we acquire; • Our ability to control costs and expenses; • Inflation, market and monetary fluctuations; • Changes in federal and state legislation and regulation applicable to our business; • Actions by our competitors; and • Other factors disclosed in the Company’s periodic reports as filed with the Securities and Exchange Commission. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation. General CB Financial Services is a bank holding company established in 2006 and headquartered in Carmichaels, Pennsylvania. CB Financial’s business activity is conducted primarily through its wholly owned bank subsidiary, Community Bank. The Bank is a Pennsylvania-chartered commercial bank headquartered in Carmichaels, Pennsylvania. The Bank operates from nine branches in Greene, Allegheny, Washington, Fayette and Westmoreland Counties in southwestern Pennsylvania and three offices in Marshall and Ohio Counties in West Virginia. The Bank also has a loan production office in Allegheny County, a corporate center in Washington County and an operations center in Greene County, all of which are in Pennsylvania. The Bank is a community-oriented institution offering residential and commercial real estate loans, commercial and industrial loans, and consumer loans as well as a variety of deposit products for individuals and businesses in its market area. Subsequent Event As reported on the Company's Current Report on Form 8-K filed with the SEC on May 11, 2026, the Company became aware of an internal incident involving the disclosure of certain non-public customer information using an unauthorized artificial intelligence-based software application. Due to the volume and confidential nature of the information at issue, the event was determined to be material; however, the Company does not expect a material impact on its consolidated financial condition or results of operations. Overview The following discussion and analysis is presented to assist in the understanding and evaluation of our consolidated financial condition and results of operations. It is intended to complement the unaudited consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q and should be read in conjunction therewith. The detailed discussion focuses on our consolidated financial condition as of March 31, 2026, compared to the consolidated financial condition as of December 31, 2025 and the consolidated results of operations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. 29 Table of Contents Our results of operations depend primarily on our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets and the interest we pay on our interest-bearing liabilities. Our results of operations also are affected by our provision for credit losses, noninterest income and noninterest expense. Noninterest income consists primarily of fees and service charges on deposit accounts, income from bank-owned life insurance and other income. Noninterest expense consists primarily of expenses related to salaries and employee benefits, occupancy and equipment, data processing, contracted services, legal and professional fees, advertising, deposit and general insurance and other expenses. Financial institutions like us, in general, are significantly affected by economic conditions, competition, and the monetary and fiscal policies of the federal government. Lending activities are influenced by the demand for and supply of housing, competition among lenders, interest rate conditions, and funds availability. Our operations and lending are principally concentrated in the southwestern Pennsylvania and Ohio Valley market areas. Explanation of Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with U.S. GAAP, we present certain non-GAAP financial measures. We believe these non-GAAP financial measures provide useful information in understanding our underlying results of operations or financial position and our business and performance trends as they facilitate comparisons with the performance of other companies in the financial services industry. Non-GAAP adjusted items impacting the Company's financial performance are identified to assist investors in providing a complete understanding of factors and trends affecting the Company’s business and in analyzing the Company’s operating results on the same basis as that applied by management. Although we believe that these non-GAAP financial measures enhance the understanding of our business and performance, they should not be considered an alternative to GAAP or considered to be more important than financial results determined in accordance with GAAP, nor are they necessarily comparable with similar non-GAAP measures which may be presented by other companies. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein. The interest income on interest-earning assets, net interest rate spread and net interest margin are presented on a fully tax-equivalent (“FTE”) basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans using the federal statutory income tax rate of 21.0%. We believe the presentation of net interest income on a FTE basis ensures comparability of net interest income arising from both taxable and tax-exempt sources and is consistent with industry practice. The following table reconciles net interest income, net interest spread and net interest margin on a FTE basis for the periods indicated: Three Months Ended March 31, 2026 2025 (Dollars in Thousands) Interest Income (GAAP) $ 19,651 $ 17,847 Adjustment to FTE Basis 177 56 Interest Income (FTE) (Non-GAAP) 19,828 17,903 Interest Expense (GAAP) 5,779 6,536 Net Interest Income (FTE) (Non-GAAP) $ 14,049 $ 11,367 Net Interest Rate Spread (GAAP) 3.29 % 2.61 % Adjustment to FTE Basis 0.05 0.02 Net Interest Rate Spread (FTE) (Non-GAAP) 3.34 % 2.63 % Net Interest Margin (GAAP) 3.83 % 3.27 % Adjustment to FTE Basis 0.05 0.01 Net Interest Margin (FTE) (Non-GAAP) 3.88 % 3.28 % 30 Table of Contents Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by period-end common shares outstanding. We believe this non-GAAP measure serves as a useful tool to help evaluate the strength and discipline of the Company's capital management strategies and as an additional, conservative measure of the Company’s total value. March 31, 2026 December 31, 2025 (Dollars in Thousands, except share and per share data) Stockholders' Equity (GAAP) $ 158,751 $ 157,537 Goodwill and Other Intangible Assets, Net (9,732) (9,732) Tangible Common Equity or Tangible Book Value (Non-GAAP) (Numerator) $ 149,019 $ 147,805 Common Shares Outstanding (Denominator) 5,072,183 5,036,509 Book Value per Common Share (GAAP) $ 31.30 $ 31.28 Tangible Book Value per Common Share (Non-GAAP) $ 29.38 $ 29.35 Consolidated Statements Of Financial Condition Analysis Assets Total assets increased $35.6 million, or 2.3%, to $1.58 billion at March 31, 2026 compared to $1.55 billion at December 31, 2025. Cash and Securities • Cash and due from banks increased $23.9 million, or 75.3%, to $55.5 million at March 31, 2026, compared to $31.7 million at December 31, 2025. • Securities increased $15.6 million, or 5.6%, to $295.5 million at March 31, 2026, compared to $279.9 million at December 31, 2025. This was primarily due to $26.0 million of security purchases, partially offset by $8.8 million of repayments on amortizing securities and a $1.9 million increase in unrealized losses on the portfolio. Loans, Allowance for Credit Losses (ACL) and Credit Quality • Total loans decreased $4.4 million, or 0.4%, to $1.158 billion compared to $1.162 billion, and included decreases in consumer, commercial and industrial, commercial real estate and other loans of $6.2 million, $3.4 million, $2.2 million and $228,000, respectively, partially offset by increases in construction and residential real estate loans of $6.0 million and $1.5 million, respectively. The decrease in consumer loans resulted from a reduction in indirect automobile loan production due to the discontinuation of this product offering as of June 30, 2023. This portfolio is expected to continue to decline as resources are allocated and production efforts are focused on more profitable commercial products. Excluding the $5.8 million decrease in indirect automobile loans, total loans increased $1.4 million, or 0.1%. Loan production totaled $30.5 million while $29.4 million of loans were paid off since December 31, 2025. • The allowance for credit losses (ACL) was $10.3 million at March 31, 2026 and $10.1 million at December 31, 2025. As a result, the ACL to total loans was 0.89% at March 31, 2026 and 0.87% at December 31, 2025. During the three months ended March 31, 2026, the Company recorded a net provision for credit losses of $241,000 including a provision for credit losses on loans of $228,000 and a provision for credit losses on unfunded commitments of $13,000. • Net charge-offs for the three months ended March 31, 2026 were $41,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the three months ended March 31, 2025 were $54,000, or 0.02% of average loans on an annualized basis. • Nonperforming loans, which include nonaccrual loans and accruing loans past due 90 days or more, were $3.3 million at March 31, 2026 and $5.3 million at December 31, 2025. Nonperforming loans to total loans ratio was 0.29% at March 31, 2026 and 0.46% at December 31, 2025. The decrease in nonperforming loans was due to the full repayment of a $2.0 million commercial real estate loan which was placed on nonaccrual status in the fourth quarter of 2025. Liabilities Total liabilities increased $34.4 million, or 2.5%, to $1.42 billion at March 31, 2026 compared to $1.39 billion at December 31, 2025. 31 Table of Contents Deposits • Total deposits increased $35.6 million, or 2.7%, to $1.38 billion as of March 31, 2026 compared to $1.34 billion at December 31, 2025. Interest-bearing demand, non interest-bearing demand, savings and money market deposits increased $27.5 million, $9.3 million, $2.9 million and $92,000, respectively, while time deposits decreased $4.1 million. This favorable change in the deposit mix occurred as the Bank began onboarding Specialty Treasury clients during the three months ended March 31, 2026. The Bank continues to focus on building core banking relationships while strategically reducing higher priced funding. Brokered time deposits totaled $98.5 million as of March 31, 2026 and December 31, 2025, all of which mature within three months and were utilized to fund the purchase of floating rate CLO securities. At March 31, 2026, FDIC insured deposits totaled approximately 58.8% of total deposits while an additional 16.7% of total deposits were collateralized with investment securities. Stockholders’ Equity Stockholders’ equity increased $1.2 million, or 0.8%, to $158.8 million at March 31, 2026, compared to $157.5 million at December 31, 2025. The key factors positively impacting stockholders’ equity were $3.9 million of net income for the current year and $341,000 of shares issued as a result of stock option exercises, partially offset by a $1.5 million increase in accumulated other comprehensive loss resulting from the securities market interest rate changes, the payment of $1.4 million in dividends and $292,000 of treasury shares purchased under the stock repurchase program since December 31, 2025. Book value per common share (GAAP) was $31.30 at March 31, 2026 compared to $31.28 at December 31, 2025, an increase of $0.02. Tangible book value per common share (Non-GAAP) was $29.38 at March 31, 2026 compared to $29.35 at December 31, 2025, an increase of $0.03. Consolidated Results of Operations for the Three Months Ended March 31, 2026 and 2025 Overview . Net income was $3.9 million for the three months ended March 31, 2026, an increase of $2.0 million compared to net income of $1.9 million for the three months ended March 31, 2025. Net Interest and Dividend Income . Net interest and dividend income increased $2.6 million, or 22.6%, to $13.9 million for the three months ended March 31, 2026 compared to $11.3 million for the three months ended March 31, 2025. Net interest margin (GAAP) increased 56 basis points (bps) to 3.83% for the three months ended March 31, 2026 compared to 3.27% for the three months ended March 31, 2025. Fully Tax Equivalent (FTE) net interest margin (Non-GAAP) increased 60 bps to 3.88% for the three months ended March 31, 2026 compared to 3.28% for the three months ended March 31, 2025. Interest and Dividend Income • Interest and dividend income increased $1.8 million, or 10.1%, to $19.7 million for the three months ended March 31, 2026 compared to $17.8 million the three months ended March 31, 2025. ◦ Interest income on loans increased $1.4 million, or 9.8%, to $16.0 million for the three months ended March 31, 2026 compared to $14.5 million for the three months ended March 31, 2025. The average balance of loans increased $76.9 million to $1.15 billion from $1.08 billion, causing a $1.1 million increase in interest income on loans. Additionally, the average yield on loans increased 14 bps to 5.64% from 5.50% despite a 75 bp reduction in the federal funds target rate since September 2025. While this led to the downward repricing of variable and adjustable rate loans, the impact was partially by a reduction in lower yielding consumer loans due to the discontinuation of the indirect automobile loan product with the redeployment of those funds into higher yielding commercial loan products. The increase in the average yield caused a $378,000 increase in interest income on loans. ◦ Interest income on investment securities increased $638,000, or 23.0%, to $3.4 million for the three months ended March 31, 2026 compared to $2.8 million for the three months ended March 31, 2025 driven by a 96 bp increase in the average yield, coupled with a $6.8 million increase in average balances. The increase in yield was primarily due to the third quarter 2025 implementation of a balance sheet repositioning strategy of the Bank’s portfolio of available-for-sale investment securities in which $129.6 million in book value of lower-yielding investment securities with an average yield of 2.87% were sold for an after-tax realized loss of $9.3 million. Investment securities sold included $121.1 million of mortgage-backed securities/collateralized mortgage obligations issued by the U.S. government-sponsored agencies, $5.0 million of U.S. government agency securities and $3.5 million of municipal securities. The Bank then purchased $117.8 million of higher-yielding mortgage-backed securities/collateralized mortgage obligations issued by U.S government-sponsored agencies, municipal securities, subordinated debt investments and non-agency guaranteed securitizations with an expected tax-equivalent yield of approximately 5.43%. 32 Table of Contents ◦ Interest income on interest-earning deposits at other banks decreased $259,000 to $200,000 for the three months ended March 31, 2026 compared to $459,000 for the three months ended March 31, 2025 driven by a 113 bp decrease in the average yield and a $17.8 million decrease in average balances. The decrease in the yield was primarily related to the Federal Reserve’s reductions in the target federal funds rate while the decrease in the volume was due to the funding of loans. Interest Expense • Interest expense decreased $757,000, or 11.6%, to $5.8 million for the three months ended March 31, 2026 compared to $6.5 million for the three months ended March 31, 2025. ◦ Interest expense on deposits decreased $879,000, or 14.4%, to $5.2 million for the three months ended March 31, 2026 compared to $6.1 million for the three months ended March 31, 2025. The cost of interest-bearing deposits declined 43 bps to 2.03% for the three months ended March 31, 2026 from 2.46% for the three months ended March 31, 2025 due to the change in the deposit mix and the recent Federal Reserve federal funds target rate decreases. The decrease in the cost of interest-bearing deposits accounted for a $1.1 million decrease in interest expense. This was partially offset as average interest-bearing deposit balances increased $39.4 million, or 3.9%, to $1.05 billion as of March 31, 2026 compared to $1.01 billion as of March 31, 2025, primarily as the Bank grew core banking relationships, onboarded Specialty Treasury clients and strategically reduced time deposit only relationships. The increase in average balances accounted for a $221,000 increase in interest expense. 33 Table of Contents Average Balances and Yields . The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. Average balances are derived from daily balances over the periods indicated. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. FTE yield adjustments have been made for tax exempt loan and security interest income utilizing a marginal federal income tax rate of 21.0% for the periods presented. As such, amounts will not agree to income as reported in the consolidated financial statements. The yields and costs for the periods indicated are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Three Months Ended March 31, 2026 2025 Average Balance Interest and Dividends Yield/ Cost (1) Average Balance Interest and Dividends Yield/ Cost (1) (Dollars in Thousands) (Unaudited) Assets: Interest-Earning Assets: Loans, Net (2) $ 1,151,941 $ 16,023 5.64 % $ 1,075,083 $ 14,584 5.50 % Debt Securities Taxable 249,917 2,999 4.80 278,362 2,777 3.99 Exempt From Federal Tax 35,218 527 5.99 — — — Equity Securities 1,000 7 2.80 2,674 28 4.19 Interest-Earning Deposits at Banks 27,236 200 2.94 45,056 459 4.07 Other Interest-Earning Assets 3,874 72 7.54 3,196 55 6.98 Total Interest-Earning Assets 1,469,186 19,828 5.47 1,404,371 17,903 5.17 Noninterest-Earning Assets 87,352 63,324 Total Assets $ 1,556,538 $ 1,467,695 Liabilities and Stockholders' Equity: Interest-Bearing Liabilities: Interest-Bearing Demand Deposits $ 365,729 1,642 1.82 % $ 317,799 1,526 1.95 % Money Market Accounts 209,181 1,104 2.14 230,634 1,726 3.04 Savings Accounts 169,568 40 0.10 172,322 41 0.10 Time Deposits 300,781 2,446 3.30 285,093 2,818 4.01 Total Interest-Bearing Deposits 1,045,259 5,232 2.03 1,005,848 6,111 2.46 Short-Term Borrowings 18,990 188 4.01 1,985 23 4.70 Other Borrowings 34,764 359 4.19 34,723 402 4.70 Total Interest-Bearing Liabilities 1,099,013 5,779 2.13 1,042,556 6,536 2.54 Noninterest-Bearing Demand Deposits 283,546 265,522 Total Funding and Cost of Funds 1,382,559 1.70 1,308,078 2.03 Other Liabilities 14,564 11,854 Total Liabilities 1,397,123 1,319,932 Stockholders' Equity 159,415 147,763 Total Liabilities and Stockholders' Equity $ 1,556,538 $ 1,467,695 Net Interest Income (FTE) (Non-GAAP) (3) $ 14,049 $ 11,367 Net Interest-Earning Assets (4) $ 370,173 $ 361,815 Net Interest Rate Spread (FTE) (Non-GAAP) (3)(5) 3.34 % 2.63 % Net Interest Margin (GAAP) (6) 3.83 3.27 Net Interest Margin (FTE) (Non-GAAP) (3)(6) 3.88 3.28 Return on Average Assets (1) 1.01 0.53 Return on Average Equity (1) 9.84 5.24 Average Equity to Average Assets 10.24 10.07 Average Interest-Earning Assets to Average Interest-Bearing Liabilities 133.68 134.70 (1) Annualized based on three months ended results. (2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable. (3) Refer to Explanation and Use of Non-GAAP Financial Measures in this filing for the calculation of the measure and reconciliation to the most comparable GAAP measure. (4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (6) Net interest margin represents annualized net interest income divided by average total interest-earning assets. 34 Table of Contents Rate/Volume Analysis . The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. FTE yield adjustments have been made for tax exempt loan and security income utilizing a marginal federal income tax rate of 21.0%. The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. The total column represents the sum of the prior columns. Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Increase (Decrease) Due to Volume Rate Total (Dollars in Thousands) (Unaudited) Interest and Dividend Income: Loans, net $ 1,061 $ 378 $ 1,439 Debt Securities: Taxable (303) 525 222 Exempt From Federal Tax 527 — 527 Equity Securities (14) (7) (21) Cash at Other Banks (154) (105) (259) Other Interest-Earning Assets 13 4 17 Total Interest-Earning Assets 1,130 795 1,925 Interest Expense: Deposits 221 (1,100) (879) Short-Term Borrowings 168 (3) 165 Other Borrowings 1 (44) (43) Total Interest-Bearing Liabilities 390 (1,147) (757) Change in Net Interest and Dividend Income $ 740 $ 1,942 $ 2,682 Provision for Credit Losses. A provision for credit losses of $241,000 was recorded for the three months ended March 31, 2026. The provision for credit losses on loans was $228,000 and was primarily due to additional reserves required for individually assessed loans requiring specific reserves and charge-offs. Additionally, the provision for credit losses on unfunded commitments was $13,000 and was due to an increase in unfunded commitments. This compared to a recovery for credit losses of $40,000 recorded for the three months ended March 31, 2025 as the provision for credit losses on loans was $68,000 primarily due to qualitative adjustments on economic factors, and the provision for credit losses on unfunded commitments was $108,000 due to a decrease in unfunded commitments and a decrease in funding rates. Noninterest Income. Noninterest income increased $175,000, or 22.2%, to $962,000 for the three months ended March 31, 2026, compared to $787,000 for the three months ended March 31, 2025 primarily due to a $92,000 increase in service fees related to new corporate deposit and Individual Covered Health Reimbursement Arrangement accounts and a $77,000 increase in net gain on securities due to net losses of $69,000 recognized for the three months ended March 31, 2025 related primarily to the sale of equity securities. Noninterest Expense. Noninterest expense increased $210,000, or 2.1%, to $10.0 million for the three months ended March 31, 2026 compared to $9.8 million for the three months ended March 31, 2025. Data processing expense increased $145,000 due to the implementation of enhanced treasury and commercial banking platforms in late 2025. Contracted services increased $95,000 due to outsourced information security services and robotic process automation projects. Other noninterest expense increased $76,000 due to increases in travel, meals and entertainment expenses related to sales activities and increases in dues and subscriptions and printing and office supplies expenses. Partially offsetting these increases, occupancy expense decreased $94,000 due to certain property management cost savings initiatives implemented in 2025 and salaries and benefits decreased $39,000. During the three months ended March 31, 2025, the Bank recorded $1.0 million of one-time non-recurring expenses related to a reduction in force. Excluding these one-time charges, salaries and benefits increased $1.0 million primarily due to revenue producing treasury and commercial banking personnel additions, merit increases and higher benefit compensation costs. 35 Table of Contents Income Taxes. Income tax expense was $714,000 for the three months ended March 31, 2026 compared to $427,000 for the three months ended March 31, 2025. This change was primarily driven by an increase in pre-tax income to $4.6 million for the three months ended March 31, 2026 compared to $2.3 million of income for the three months ended March 31, 2025. Off-Balance Sheet Arrangements Other than loan commitments and standby and performance letters of credit, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a significant current or future effect on our financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors. Refer to Note 7 in the Notes to Consolidated Financial Statements of this report for a summary of commitments outstanding as of March 31, 2026 and December 31, 2025. Liquidity and Capital Management Liquidity. Liquidity is the ability to meet current and future financial obligations of a short-term nature. The Company’s primary sources of funds consist of deposit inflows, loan repayments and maturities, calls and sales of securities. While maturities and scheduled amortization of loans and securities are typically predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. The Company regularly adjusts its investments in liquid assets based upon its assessment of expected loan demand, expected deposit flows, yields available on interest-earning deposits and securities, and the objectives of its asset/liability management program. Excess liquid assets are invested generally in interest-earning deposits with other banks and short- and intermediate-term securities. The Company believes that it had sufficient liquidity at March 31, 2026 to satisfy its short- and long-term liquidity needs. The Company’s most liquid assets are cash and due from banks, which totaled $55.5 million at March 31, 2026. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. Unpledged securities, which provide an additional source of liquidity, totaled $126.5 million at March 31, 2026. In addition, at March 31, 2026, the Company had the ability to borrow up to $536.0 million from the FHLB of Pittsburgh, of which $514.0 million was available. The Company also has the ability to borrow up to $76.6 million from the FRB through its Borrower-In-Custody line of credit agreement and the Company also maintains multiple line of credit arrangements with various unaffiliated banks totaling $50.0 million as of both March 31, 2026 and December 31, 2025, currently these credit arrangements have remained unused. At March 31, 2026, $277.9 million, or 90.1% of total time deposits mature within one year. If these time deposits do not remain with the Company, the Company will be required to seek other sources of funds. Depending on market conditions, the Company may be required to pay higher rates on such deposits or other borrowings than it currently pays on these time deposits. The Company believes, however, based on past experience that a significant portion of its time deposits will remain with it, either as time deposits or as other deposit products. The Company has the ability to attract and retain deposits by adjusting the interest rates offered. At March 31, 2026, the Bank's current deposit portfolio is 58.8% insured by the FDIC, and with additional coverage of 16.7% from the Bank's investment securities; of the total deposits held at the Bank only 24.5% are uninsured. We are committed to maintaining a strong liquidity position; therefore, we monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. The marginal cost of new funding, however, whether from deposits or borrowings from the FHLB, will be carefully considered as we monitor our liquidity needs. Therefore, in order to minimize our cost of funds, we may consider additional borrowings from the FHLB in the future. CB Financial is a separate legal entity from the Bank and must provide for its own liquidity to pay any dividends to its shareholders and for other corporate purposes. Its primary source of liquidity is dividend payments it receives from the Bank. The Bank’s ability to pay dividends to CB Financial is subject to regulatory limitations. At March 31, 2026, CB Financial (on an unconsolidated, stand-alone basis) had liquid assets of $7.5 million. The ability to pay future dividends or conduct stock repurchases may be limited under applicable banking regulations and regulatory policies due to expected losses for future periods and/or the inability to upstream funds from the Bank to the Company as a result of lower income or regulatory capital levels. Capital Management. The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, each must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Under the Regulatory Capital Rules, in order to avoid limitations on capital distributions (including dividend payments and certain discretionary bonus payments to executive officers), a banking organization must hold a capital conservation buffer comprised of common equity Tier I capital above its minimum risk-based capital requirements in an amount greater than 2.5% of total risk-weighted assets. 36 Table of Contents At March 31, 2026 and December 31, 2025, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action. The following table presents the Bank’s regulatory capital amounts and ratios, as well as the minimum amounts and ratios required to be well capitalized as of the dates indicated. March 31, 2026 December 31, 2025 Amount Ratio Amount Ratio (Dollars in Thousands) Common Equity Tier 1 (to risk weighted assets) Actual $ 160,461 14.70 % $ 156,459 13.92 % For Capital Adequacy Purposes 49,122 4.50 50,583 4.50 To Be Well Capitalized 70,954 6.50 73,064 6.50 Tier 1 Capital (to risk weighted assets) Actual 160,461 14.70 156,459 13.92 For Capital Adequacy Purposes 65,496 6.00 67,444 6.00 To Be Well Capitalized 87,328 8.00 89,925 8.00 Total Capital (to risk weighted assets) Actual 171,523 15.71 167,321 14.89 For Capital Adequacy Purposes 87,328 8.00 89,925 8.00 To Be Well Capitalized 109,160 10.00 112,407 10.00 Tier 1 Leverage (to adjusted total assets) Actual 160,461 10.34 156,459 10.15 For Capital Adequacy Purposes 62,062 4.00 61,674 4.00 To Be Well Capitalized 77,578 5.00 77,093 5.00 Loan Credit Exposure Refer to the "Lending Activities" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for a description of each loan portfolio segment. At March 31, 2026, the Company's loans totaled $1.158 billion, representing a $4.4 million, or 0.4%, decrease compared to $1.162 billion at December 31, 2025. The table below provides the composition of the loan portfolio: March 31, 2026 December 31, 2025 (Dollars in Thousands) Real Estate: Residential $ 330,761 28.6 % $ 329,237 28.3 % Commercial 550,029 47.5 552,180 47.5 Construction 51,394 4.4 45,419 3.9 Commercial and Industrial 157,694 13.6 161,081 13.9 Consumer 36,720 3.2 42,876 3.7 Other 31,239 2.7 31,467 2.7 Total Loans $ 1,157,837 100.0 % $ 1,162,260 100.0 % The Company's loan portfolio is a mix of consumer and commercial credits. Overall credit exposure and portfolio compensation is managed via a credit concentration policy. The policy designates specific loan types, collateral types and loan structures to be formally tracked and assigned maximum exposure limits as a percentage of capital. Commercial lending by asset class, specific limits for Commercial Real Estate ("CRE") project types, loans secured by residential real estate, large dollar exposures and designated high risk loan categories represent examples of specifically tracked components of our concentration management process. There are no identified concentrations that exceed the assigned exposure limits. Our concentration management policy is approved by the Company's Board of Directors and is used to ensure a high-quality, well diversified portfolio that is consistent with our overall objective of maintaining an acceptable level of risk. 37 Table of Contents The Company's CRE portfolio totaled $550.0 million at March 31, 2026, a decrease of $2.2 million, or 0.4%, compared to December 31, 2025. CRE loans are concentrated in the Pittsburgh metropolitan area. The tables below provides further detail of the composition of the CRE portfolio as of March 31, 2026: CRE Nonowner Occupied Loans Outstanding Balance Percent Average Loan Size Average LTV (1) (Dollars in Thousands) Retail Space $ 109,314 24.93 % $ 1,497 61.69 % Multifamily 104,265 23.78 1,043 60.81 Warehouse Space 77,864 17.76 2,104 55.40 Office Space 59,681 13.61 1,270 57.62 Manufacturing 21,137 4.82 2,114 42.45 Medical Facilities 17,844 4.07 1,190 55.10 Hotels 15,324 3.50 1,916 60.70 Vacant Land 3,203 0.73 3,203 41.03 Senior Housing 4,685 1.07 1,562 57.51 Other 25,112 5.73 897 59.77 Total Nonowner Occupied CRE $ 438,429 100.00 % $ 1,362 58.27 % (1) Based on collateral value at the time of loan origination. CRE Owner Occupied Loans Outstanding Balance Percent Average Loan Size Average LTV (1) (Dollars in Thousands) Retail Space $ 26,341 23.60 % $ 675 50.05 % Warehouse Space 18,388 16.48 766 44.86 Office Space 9,394 8.42 447 71.99 Medical Facilities 8,385 7.51 699 73.90 Senior Housing 5,160 4.62 645 67.78 Manufacturing 3,022 2.71 336 56.60 Vacant Land 5,815 5.21 1,938 26.80 Other 35,095 31.45 462 51.93 Total Owner Occupied CRE $ 111,600 100.00 % $ 581 53.21 % (1) Based on collateral value at the time of loan origination.