CB Financial Services, Inc. Announces Fourth Quarter and Full Year 2022 Financial Results and Declares Quarterly Cash Dividend

Provided By Business Wire

Last update: Jan 26, 2023

CB Financial Services, Inc. (“CB” or the “Company”) (NASDAQGM: CBFV), the holding company of Community Bank (the “Bank”) and Exchange Underwriters, Inc. (“EU”), a wholly-owned insurance subsidiary of the Bank, today announced its fourth quarter and 2022 financial results.

	Three Months Ended													Year Ended
	12/31/22			9/30/22			6/30/22		3/31/22		12/31/21			12/31/22			12/31/21
(Dollars in thousands, except per share data) (Unaudited)

Net Income (GAAP)	$	4,152		$	3,929		$	118	$	3,047	$	6,965		$	11,247		$	11,570
Non-Recurring Items		(66	)		(310	)		157		12		(4,122	)		(208	)		(1,053	)
Adjusted Net Income (Non-GAAP) ⁽¹⁾	$	4,086		$	3,619		$	275	$	3,059	$	2,843		$	11,039		$	10,517

Earnings per Common Share - Diluted (GAAP)	$	0.81		$	0.77		$	0.02	$	0.58	$	1.31		$	2.18		$	2.15
Adjusted Earnings per Common Share - Diluted (Non-GAAP) ⁽¹⁾	$	0.80		$	0.71		$	0.05	$	0.59	$	0.53		$	2.14		$	1.95
(1) Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted in this Press Release.

2022 Fourth Quarter Financial Highlights

(Comparisons to three months ended December 31, 2021 unless otherwise noted)

Net income was $4.2 million, compared to net income of $7.0 million. Current period results were driven by net interest margin expansion coupled with a reduction of noninterest expense of $974,000 for the three months ended December 31, 2022 compared to the three months ended December 31, 2021, which benefited from a gain on sale of $5.2 million resulting from the sale of branch locations.
- Adjusted net income (Non-GAAP) was $4.1 million, compared to $2.8 million.
Earnings per diluted common share (EPS) decreased to $0.81 from $1.31.
- Adjusted earnings per common share - diluted (Non-GAAP) was $0.80, compared to $0.53.
Return on average assets (annualized) of 1.16%, compared to 1.87%.
- Adjusted return on average assets (annualized) (Non-GAAP) of 1.15%, compared to 0.76%.
Return on average equity (annualized) of 15.26%, compared to 20.95% (annualized).
- Adjusted return on average equity (annualized) (Non-GAAP) of 15.01%, compared to 8.55%.
Net interest margin (NIM) improved to 3.45% from 2.95%.
Net interest and dividend income was $11.9 million, compared to $10.2 million.
Noninterest income decreased to $2.4 million, compared to $8.7 million. The prior year period benefited from the recognition of $5.2 million in gain on sales of branches of two branch locations as part of branch optimization initiatives while the current year period included a decrease of income from net gain on sale of loans of $977,000 primarily the result of the sale of a nonperforming commercial real estate loan in the hotel portfolio. In addition, a decrease of $219,000 in insurance commissions was primarily driven by contingency income which resulted from the timing of lock-in amounts recorded and was partially offset by an increase in core business for commercial insurance lines.

(Amounts at December 31, 2022; comparisons to December 31, 2021, unless otherwise noted)

Total loans, including Payroll Protection Program (“PPP”) loans, were $1.05 billion, an increase of $29.1 million from $1.02 billion.
- Total loans held for investment, excluding PPP loans, increased $53.5 million, or 5.4%, to $1.05 billion compared to $996.3 million, and included increases of $24.8 million, or 27.1%, in consumer loans, and $44.7 million, or 15.2%, growth in commercial real estate loans, partially offset by decreases of $40.1 million in construction real estate and $19.0 million in commercial and industrial loans. Total loans held for investment, excluding PPP loans, as of December 31, 2022, increased $7.6 million, or 0.7%, as compared to September 30, 2022. This included increases of $8.5 million, or 13.8%, in commercial and industrial loans, $4.3 million, or 1.0%, in commercial real estate loans, and $2.5 million, or 0.8%, in residential loans, partially offset by decreases of $4.6 million, or 9.2%, in construction loans, and $3.7 million, or 2.4%, in consumer loans.
Nonperforming loans to total loans was 0.55%, a decrease of 16 basis points (“bps”), compared to 0.71%.
Total deposits were $1.27 billion, an increase of $41.9 million, compared to $1.23 billion.
Total assets remained level at $1.43 billion.
Book value per share was $21.60, compared to $20.94 as of September 30, 2022 and $25.31 as of December 31, 2021.
- Tangible book value per share (Non-GAAP) was $19.00, compared to $18.25 as of September 30, 2022 and $22.45 as of December 31, 2021, reflecting impact to Accumulated Other Comprehensive Income from unrealized losses on securities portfolios.

Management Commentary

President and CEO John H. Montgomery stated, “In closing out what was a successful 2022, our fourth quarter results continued to benefit from margin expansion on top of consistent loan growth. Two years ago we undertook a long term strategy that consisted of first driving down our expenses in a durable manner by rationalizing our physical branch footprint while also working to make sure our operations were optimized and efficient. This effort set the stage for the reduced the non-interest expenses we enjoyed throughout 2022. With our branch optimization largely completed, in 2022 we turned our attention to driving growth through smart additions of key leadership on both the retail and commercial sides of our business. Those investments helped drive growth in our loan portfolio through 2022 which coupled with rising interest rates to yield growth in our net interest income.”

Mr. Montgomery continued, “We remain watchful with respect to the overall economic climate as the Federal Reserve continues to work to rein in inflation while not tipping the country into a recession. As I have noted in the past, our credit team possesses a wealth of experience, including demonstrated success during the Great Financial Crisis just over a dozen years ago. With that experience, we are confident in our ability to navigate whatever macroeconomic headwinds we face.”

Mr. Montgomery concluded, “Continuing our commitment to CB shareholders, we increased our regular quarterly dividend to $0.25 per share. In addition, we repurchased 4,620 shares during the fourth quarter under the current $10.0 million share repurchase program announced earlier in 2022. We remain well-capitalized with the ability to support growth along with these shareholder-friendly actions.”

Dividend Information

The Company’s Board of Directors has approved a 4.2% increase in the regular quarterly cash dividend by declaring a $0.25 quarterly cash dividend per outstanding share of common stock, payable on or about February 28, 2023, to stockholders of record as of the close of business on February 15, 2023.

Stock Repurchase Program

On April 21, 2022, CB announced a program to repurchase up to $10.0 million of the Company’s outstanding shares of common stock. Based on the Company’s closing stock price at January 23, 2023, the repurchase program, if fully completed, would encompass 430,906 shares, or approximately 8.4% of the shares currently outstanding.

2022 Fourth Quarter Financial Review

Net Interest and Dividend Income

Net interest and dividend income increased $1.6 million, or 16.0%, to $11.9 million for the three months ended December 31, 2022 compared to $10.2 million for the three months ended December 31, 2021.

Net interest margin (GAAP) increased to 3.45% for the three months ended December 31, 2022 compared to 2.95% for the three months ended December 31, 2021. Fully Tax Equivalent (“FTE”) Net interest margin (Non-GAAP) increased 50 bps to 3.46% for the three months ended December 31, 2022 compared to 2.96% for the three months ended December 31, 2021.
Interest and dividend income increased $2.9 million, or 26.4%, to $13.9 million for the three months ended December 31, 2022 compared to $11.0 million for the three months ended December 31, 2021.
- Interest income on loans increased $1.9 million, or 19.5%, to $11.8 million for the three months ended December 31, 2022 compared to $9.9 million for the three months ended December 31, 2021. The average balance of loans increased $29.9 million to $1.03 billion from $1.00 billion and the average yield increased 62 bps to 4.54% compared to 3.92%. Interest and fee income on PPP loans was $22,000 for the three months ended December 31, 2022 and didn’t impact loan yield, compared to $391,000 for the three months ended December 31, 2021, which contributed 4 bps to loan yield. The impact of the accretion of the credit mark on acquired loan portfolios was $61,000 for the three months ended December 31, 2022 compared to $83,000 for the three months ended December 31, 2021, or 2 bps in the current period compared to 3 bps in the prior period.
- Interest income on taxable investment securities increased $108,000, or 12.5%, to $974,000 for the three months ended December 31, 2022 compared to $866,000 for the three months ended December 31, 2021 driven by a $11.6 million increase in average balance partially coupled with a 11 bps increase in average yield.
Interest expense increased $1.3 million, or 171.7%, to $2.0 million for the three months ended December 31, 2022 compared to $732,000 for the three months ended December 31, 2021.
- Interest expense on deposits increased $1.2 million, or 184.7%, to $1.8 million for the three months ended December 31, 2022 compared to $636,000 for the three months ended December 31, 2021. While average interest-earning deposit balances decreased $7.2 million, or 0.8%, to $887.7 million as of December 31, 2022 compared to $894.8 million as of December 31, 2021, rising interest rates led to the repricing of higher-cost demand and money market deposits and resulted in a 53 bps, or 188.0%, increase in average cost compared to the three months ended December 31, 2021. In addition, the average balance of time deposits and the related average cost decreased $38.2 million and 5 bps, respectively. These decreases are partially offset by an increase in average other borrowings of $8.1 million or 85.8% to $17.6 million as of December 31, 2022 compared to $9.5 million as of December 31, 2021, which was driven by the issuance of subordinate debt of $15.0 million in late December of 2021, and outstanding for the entire quarter ended December 31, 2022.

Provision for Loan Losses

There was no provision for loan losses for the three months ended December 31, 2022 or for the three months ended December 31, 2021.

Noninterest income

Noninterest income decreased $6.3 million, or 72.8%, to $2.4 million for the three months ended December 31, 2022, compared to $8.7 million for the three months ended December 31, 2021. The decrease was primarily related to non-recurring prior period recognition of $5.2 million gain on sale of branches as a result of branch optimization initiatives and $897,000 due to the sale of a nonperforming commercial real estate loan in the hotel portfolio. During the quarter, there was a $219,000 decrease in insurance commissions. The decrease in insurance commissions was primarily driven by contingency income which resulted from the timing of lock-in amounts received and core business including commercial and personal insurance lines.

Noninterest Expense

Noninterest expense decreased $974,000, or 9.8%, to $9.0 million for the three months ended December 31, 2022 compared to $10.0 million for the three months ended December 31, 2021. Salaries and benefits decreased $556,000 to $4.6 million and contracted services decreased $728,000 to $405,000 for the three months ended December 31, 2022 compared to $1.1 million for the three months ended December 31, 2021. This was a result of branch optimization initiatives completed in the prior year. These decreases were partially offset by an increase in occupancy expenses of $198,000.

Statement of Financial Condition Review

Assets

Total assets decreased $16.5 million, or 1.16%, to $1.41 billion at both December 31, 2022, and December 31, 2021.

Cash and due from banks decreased $16.0 million, or 13.3%, to $103.7 million at December 31, 2022, compared to $119.7 million at December 31, 2021.
Securities decreased $34.9 million, or 15.5%, to $190.1 million at December 31, 2022, compared to $225.0 million at December 31, 2021. The Securities balance was primarily impacted by a $32.3 million decrease in the market value of the debt securities portfolio, primarily due to the increase in market interest rates. The current year included $26.8 million of purchases, and $29.2 million of pay downs. The purchases were made to earn a higher yield on excess cash. In addition, there was $168,000 decrease in the market value in the equity securities portfolio, which is primarily comprised of bank stocks.

Payroll Protection Program Update

PPP loans decreased $24.4 million to $126,000 at December 31, 2022 compared to $24.5 million at December 31, 2021.
$5,000 of net PPP loan origination fees were unearned at December 31, 2022 compared to $678,000 at December 31, 2021. $22,000 of net PPP loan origination fees were earned in the three months ended December 31, 2022 compared to $117,000 for the three months ended September 30, 2022.

Loans and Credit Quality

Total loans held for investment increased $29.1 million, or 2.85%, to $1.05 billion at December 31, 2022 compared to $1.02 billion at December 31, 2021. Excluding the net decline of $24.4 million in PPP loans in the current period, loans increased $53.5 million or 5.4%.
The allowance for loan losses was $12.8 million at December 31, 2022 and $11.6 million at December 31, 2021. As a result, the allowance for loan losses to total loans was 1.22% at December 31, 2022 compared to 1.13% at December 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.22% at December 31, 2022 compared to 1.16% at December 31, 2021. The change in the allowance for loan losses was primarily due to adjustments to historical loss factors and changes in qualitative factors in particular economic and industry conditions since December 31, 2021.
Net charge-offs for the three months ended December 31, 2022 were $35,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the three months ended December 31, 2021 were $74,000, or 0.03% of average loans on an annualized basis. Net charge-offs for the year ended December 31, 2022 were $2.5 million, or 0.25% of average loans on an annualized basis. Net charge-offs for the year ended December 31, 2021 were $64,000, and had an immaterial and one hundredth effect on ratios for the period.
Nonperforming loans, which includes nonaccrual loans, accruing loans past due 90 days or more, and accruing loans that are considered troubled debt restructurings, were $5.8 million at December 31, 2022 compared to $7.3 million at December 31, 2021. Current nonperforming loans to total loans ratio was 0.55% compared to 0.71% at December 31, 2021.

Other

Intangible assets decreased $1.8 million, or 34.0%, to $3.5 million at December 31, 2022 compared to $5.3 million at December 31, 2021 due to amortization expense recognized during the period.
Accrued interest receivable and other assets increased $8.3 million, or 64.5% to $21.1 million at December 31, 2022, compared to $12.9 million at December 31, 2021. This change was primarily driven by the increase in market interest rate conditions and an increase in deferred tax assets of $7.5 million.

Liabilities

Total liabilities increased $6.4 million, or 0.5%, to $1.30 billion at December 31, 2022 compared to $1.29 billion at December 31, 2021.

Deposits

Total deposits increased $41.9 million to $1.27 billion as of December 31, 2022 compared to $1.23 billion at December 31, 2021, an increase of 3.4%. Interest-bearing and non interest-bearing demand deposits increased $39.3 million and $4.6 million, respectively, partially offset by a decrease in time deposits of $27.6 million. Average total deposits increased $45.9 million, primarily in both interest-bearing and non interest-bearing demand deposits for the three months ended December 31, 2022. The increase in interest-bearing demand deposits is primarily the result of the transition of customer deposits from securities sold under agreements to repurchase product, which are related to business deposit customers whose funds, above designated target balances, are transferred into an overnight interest-earning investment account by purchasing securities from the Bank’s investment portfolio under an agreement to repurchase.

Borrowed Funds

Short-term borrowings decreased $31.2 million, or 79.5%, to $8.1 million at December 31, 2022, compared to $39.3 million at December 31, 2021. At December 31, 2022 and December 31, 2021, short-term borrowings were comprised entirely of securities sold under agreements to repurchase as noted in the above-mentioned deposit section. A portion of this decrease is due to accounts that were transitioned into other deposit products and account for most of the interest-bearing demand deposit increase.

Stockholders’ Equity

Stockholders’ equity decreased $23.0 million, or 17.3%, to $110.2 million at December 31, 2022, compared to $133.1 million at December 31, 2021. Key factors impacting stockholders’ equity included accumulated other comprehensive loss, which increased $25.3 million primarily due to the effect of rising market interest rates on the Company’s investment securities; the payment of $4.9 million in dividends since December 31, 2021; and activity under share repurchase programs, offset by the positive impact of $11.2 million of net income. On February 15, 2022, the Company completed its stock repurchase program that was implemented on June 10, 2021. On April 21, 2022, a new $10 million repurchase program was authorized, with the Company repurchasing 62,178 shares at an average price of $22.47 per share since the inception of the plan. In total, the Company has repurchased $4.8 million since December 31, 2021.

Book value per share

Book value per common share was $21.60 at December 31, 2022 compared to $25.31 at December 31, 2021, a decrease of $3.71.

Tangible book value per common share (Non-GAAP) was $19.00 at December 31, 2022, compared to $22.45 at December 31, 2021, a decrease of $3.45.

Refer to “Explanation of Use of Non-GAAP Financial Measures” at the end of this Press Release.

About CB Financial Services, Inc.

CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers a broad array of retail and commercial lending and deposit services and provides commercial and personal insurance brokerage services through Exchange Underwriters, Inc., its wholly owned subsidiary.

For more information about CB Financial Services, Inc. and Community Bank, visit our website at www.communitybank.tv.

Statement About Forward-Looking Statements

Statements contained in this press release that are not historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and such forward-looking statements are subject to significant risks and uncertainties. The Company intends such forward-looking statements to be covered by the safe harbor provisions contained in the Act. The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries include, but are not limited to, general and local economic conditions, the scope and duration of economic contraction as a result of the COVID-19 pandemic and its effects on the Company’s business and that of the Company’s customers, 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 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 that may be 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.

CB FINANCIAL SERVICES, INC. SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands, except share and per share data) (Unaudited)

Selected Financial Condition Data	12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Assets
Cash and Due From Banks	$	103,700		$	122,801		$	81,121		$	123,588		$	119,674
Securities		190,058			193,846			213,505			231,097			224,974
Loans
Real Estate:
Residential		330,725			328,248			325,138			317,254			320,798
Commercial		436,805			432,516			426,105			427,227			392,124
Construction		44,923			49,502			41,277			54,227			85,028
Commercial and Industrial
Commercial and Industrial		69,918			61,428			62,054			59,601			64,487
PPP		126			768			3,853			8,242			24,523
Consumer		146,927			150,615			148,921			143,422			122,152
Other		20,449			19,865			20,621			10,669			11,684
Total Loans		1,049,873			1,042,942			1,027,969			1,020,642			1,020,796
Allowance for Loan Losses		(12,819	)		(12,854	)		(12,833	)		(11,595	)		(11,582	)
Loans, Net		1,037,054			1,030,088			1,015,136			1,009,047			1,009,214
Premises and Equipment, Net		17,844			18,064			18,196			18,349			18,399
Bank-Owned Life Insurance		25,893			25,750			25,610			25,468			25,332
Goodwill		9,732			9,732			9,732			9,732			9,732
Intangible Assets, Net		3,513			3,959			4,404			4,850			5,295
Accrued Interest and Other Assets		21,144			21,680			18,757			16,539			12,859
Total Assets	$	1,408,938		$	1,425,920		$	1,386,461		$	1,438,670		$	1,425,479


Liabilities
Deposits
Non-Interest Bearing Demand Deposits	$	390,405		$	407,107		$	389,127		$	400,105		$	385,775
Interest Bearing Demand Accounts		311,825			298,755			265,347			280,455			272,518
Money Market Accounts		209,125			198,715			185,308			192,929			192,125
Savings Accounts		248,022			250,378			250,226			247,589			239,482
Time Deposits		109,126			120,879			125,182			129,235			136,713
Total Deposits		1,268,503			1,275,834			1,215,190			1,250,313			1,226,613

Short-Term Borrowings		8,060			18,108			32,178			39,219			39,266
Other Borrowings		14,638			17,627			17,618			17,607			17,601
Accrued Interest Payable and Other Liabilities		7,582			7,645			7,703			9,375			8,875
Total Liabilities		1,298,783			1,319,214			1,272,689			1,316,514			1,292,355

Stockholders’ Equity	$	110,155		$	106,706		$	113,772		$	122,156		$	133,124
Total Liabilities and Stockholders’ Equity	$	1,408,938		$	1,425,920		$	1,386,461		$	1,438,670		$	1,425,479

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

	Three Months Ended															Year Ended
Selected Operating Data	12/31/22			9/30/22			6/30/22			3/31/22			12/31/21			12/31/22			12/31/21
Interest and Dividend Income
Loans, Including Fees	$	11,835		$	10,815		$	9,733		$	9,551		$	9,904		$	41,933		$	39,704
Securities:
Taxable		974			985			988			905			866			3,852			2,990
Tax-Exempt		40			49			57			66			66			213			289
Dividends		28			21			20			22			21			91			84
Other Interest and Dividend Income		978			417			160			72			106			1,627			490
Total Interest and Dividend Income		13,855			12,287			10,958			10,616			10,963			47,716			43,557
Interest Expense
Deposits		1,811			1,079			604			530			636			4,025			3,125
Short-Term Borrowings		7			19			18			19			26			63			98
Other Borrowings		171			174			173			174			70			693			182
Total Interest Expense		1,989			1,272			795			723			732			4,781			3,405
Net Interest and Dividend Income		11,866			11,015			10,163			9,893			10,231			42,935			40,152
Provision (Recovery) for Loan Losses		—			—			3,784			—			75			3,784			(1,125	)
Net Interest and Dividend Income After Provision (Recovery) for Loan Losses		11,866			11,015			6,379			9,893			10,156			39,151			41,277
Noninterest Income:
Service Fees		530			544			559			526			569			2,160			2,331
Insurance Commissions		1,399			1,368			1,369			1,798			1,618			5,934			5,616
Other Commissions		157			244			179			89			90			669			521
Net Gain on Sales of Loans		—			—			—			—			977			—			1,143
Net Gain (Loss) on Securities		83			(46	)		(199	)		(7	)		44			(168	)		526
Net Gain on Purchased Tax Credits		14			14			14			14			17			57			70
Gain on Sale of Branches		—			—			—		��	—			5,203			—			5,203
Net Gain (Loss) on Disposal of Fixed Assets		—			439			—			(8	)		—			431			(3	)
Income from Bank-Owned Life Insurance		143			140			142			136			142			561			553
Other Income		34			36			41			65			29			176			320
Total Noninterest Income		2,360			2,739			2,105			2,613			8,689			9,820			16,280
Noninterest Expense:
Salaries and Employee Benefits		4,625			4,739			4,539			4,565			5,181			18,469			19,938
Occupancy		817			768			776			686			619			3,047			2,968
Equipment		178			170			182			210			252			739			1,034
Data Processing		681			540			446			485			488			2,152			2,154
FDIC Assessment		154			147			128			209			222			638			1,014
PA Shares Tax		258			240			240			240			173			979			887
Contracted Services		405			288			348			587			1,133			1,628			4,011
Legal and Professional Fees		362			334			389			152			206			1,237			994
Advertising		165			131			115			116			191			527			749
Other Real Estate Owned (Income)		(38	)		(38	)		(37	)		(38	)		(30	)		(151	)		(183	)
Amortization of Intangible Assets		446			445			446			445			445			1,782			1,926
Intangible Assets and Goodwill Impairment		—			—			—			—			—			—			1,178
Writedown of Fixed Assets		—			—			—			—			23			—			2,293
Other		945			1,063			838			999			1,069			3,844			3,899
Total Noninterest Expense		8,998			8,827			8,410			8,656			9,972			34,891			42,862
Income Before Income Tax Expense (Benefit)		5,228			4,927			74			3,850			8,873			14,080			14,695
Income Tax Expense (Benefit)		1,076			998			(44	)		803			1,908			2,833			3,125
Net Income	$	4,152		$	3,929		$	118		$	3,047		$	6,965		$	11,247		$	11,570

	Three Months Ended										Year Ended
Per Common Share Data	12/31/22		9/30/22		6/30/22		3/31/22		12/31/21		12/31/22		12/31/21
Dividends Per Common Share	$	0.24	$	0.24	$	0.24	$	0.24	$	0.24	$	0.96	$	0.96
Earnings Per Common Share - Basic		0.81		0.77		0.02		0.59		1.32		2.19		2.15
Earnings Per Common Share - Diluted		0.81		0.77		0.02		0.58		1.31		2.18		2.15
Adjusted Earnings Per Common Share - Diluted (Non-GAAP) ⁽¹⁾		0.80		0.71		0.05		0.59		0.53		2.14		1.95

Weighted Average Common Shares Outstanding - Basic		5,095,237		5,106,861		5,147,846		5,198,194		5,291,795		5,136,670		5,382,441
Weighted Average Common Shares Outstanding - Diluted		5,104,254		5,118,627		5,156,975		5,220,887		5,314,537		5,149,312		5,392,729

	12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
Common Shares Outstanding		5,100,189			5,096,672			5,128,333			5,156,897			5,260,672
Book Value Per Common Share	$	21.60		$	20.94		$	22.18		$	23.69		$	25.31
Tangible Book Value per Common Share ⁽¹⁾		19.00			18.25			19.43			20.86			22.45
Stockholders’ Equity to Assets		7.8	%		7.5	%		8.2	%		8.5	%		9.3	%
Tangible Common Equity to Tangible Assets ⁽¹⁾		6.9			6.6			7.3			7.6			8.4

	Three Months Ended										Year Ended
Selected Financial Ratios ⁽²⁾	12/31/22		9/30/22		6/30/22		3/31/22		12/31/21		12/31/22		12/31/21
Return on Average Assets	1.16	%	1.12	%	0.03	%	0.87	%	1.87	%	0.80	%	0.79	%
Adjusted Return on Average Assets ⁽¹⁾	1.15		1.03		0.08		0.87		0.76		0.78		0.72
Return on Average Equity	15.26		13.60		0.40		9.50		20.95		9.56		8.66
Adjusted Return on Average Equity ⁽¹⁾	15.01		12.53		0.93		9.54		8.55		9.39		7.87
Average Interest-Earning Assets to Average Interest-Bearing Liabilities	149.04		149.41		149.03		144.48		145.09		148.00		145.44
Average Equity to Average Assets	7.63		8.20		8.49		9.14		8.93		8.36		9.12
Net Interest Rate Spread	3.17		3.10		3.00		2.98		2.85		3.07		2.81
Net Interest Rate Spread (FTE) ⁽¹⁾	3.18		3.11		3.01		2.99		2.86		3.08		2.82
Net Interest Margin	3.45		3.29		3.12		3.08		2.95		3.24		2.92
Net Interest Margin (FTE) ⁽¹⁾	3.46		3.30		3.13		3.10		2.96		3.25		2.94
Net Charge-offs and (Recoveries) to Average Loans	0.01	��	(0.01	)	1.01		(0.01	)	0.03		0.25		0.01
Efficiency Ratio	63.25		64.18		68.55		69.21		52.71		66.14		75.95
Adjusted Efficiency Ratio ⁽¹⁾	60.74		63.02		64.18		65.88		69.73		63.36		74.25

Asset Quality Ratios	12/31/22		9/30/22		6/30/22		3/31/22		12/31/21
Allowance for Loan Losses to Total Loans	1.22	%	1.23	%	1.25	%	1.14	%	1.13	%
Allowance for Loan Losses to Total Loans, Excluding PPP Loans⁽¹⁾	1.22		1.23		1.25		1.15		1.16
Allowance for Loan Losses to Nonperforming Loans ⁽³⁾	221.06		218.61		219.89		158.88		159.40
Allowance for Loan Losses to Noncurrent Loans ⁽⁴⁾	320.64		318.96		329.47		218.28		233.37
Delinquent and Nonaccrual Loans to Total Loans ^{(4) (5)}	0.81		0.46		0.45		0.79		0.78
Nonperforming Loans to Total Loans ⁽³⁾	0.55		0.56		0.57		0.72		0.71
Noncurrent Loans to Total Loans ⁽⁴⁾	0.38		0.39		0.38		0.52		0.49
Nonperforming Assets to Total Assets ⁽⁶⁾	0.41		0.41		0.42		0.51		0.51

Capital Ratios ⁽⁷⁾	12/31/22		9/30/22		6/30/22		3/31/22		12/31/21
Common Equity Tier 1 Capital (to Risk Weighted Assets)	12.33	%	12.02	%	11.83	%	11.99	%	11.95	%
Tier 1 Capital (to Risk Weighted Assets)	12.33		12.02		11.83		11.99		11.95
Total Capital (to Risk Weighted Assets)	13.58		13.27		13.08		13.20		13.18
Tier 1 Leverage (to Adjusted Total Assets)	8.66		8.51		8.33		8.19		7.76

(1)		Refer to Explanation of Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.
(2)		Interim period ratios are calculated on an annualized basis.
(3)		Nonperforming loans consist of nonaccrual loans, accruing loans that are 90 days or more past due, and troubled debt restructured loans.
(4)		Noncurrent loans consist of nonaccrual loans and accruing loans that are 90 days or more past due.
(5)		Delinquent loans consist of accruing loans that are 30 days or more past due.
(6)		Nonperforming assets consist of nonperforming loans and other real estate owned.
(7)		Capital ratios are for Community Bank only.
Certain items previously reported may have been reclassified to conform with the current reporting period’s format.

AVERAGE BALANCES AND YIELDS

	Three Months Ended
	December 31, 2022						September 30, 2022						June 30, 2022						March 31, 2022						December 31, 2021
	Average Balance		Interest and Dividends		Yield/ Cost ⁽¹⁾		Average Balance		Interest and Dividends		Yield/ Cost ⁽¹⁾		Average Balance		Interest and Dividends		Yield/ Cost ⁽¹⁾		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⁾	$	1,034,714	$	11,853	4.54	%	$	1,024,363	$	10,833	4.20	%	$	1,007,874	$	9,751	3.88	%	$	1,009,210	$	9,573	3.85	%	$	1,004,827	$	9,927	3.92	%
Debt Securities
Taxable		216,915		974	1.80			222,110		985	1.77			228,315		988	1.73			215,906		905	1.68			205,328		866	1.69
Exempt From Federal Tax		6,277		51	3.25			7,998		62	3.10			9,109		73	3.21			10,195		84	3.30			10,477		84	3.21
Equity Securities		2,693		28	4.16			2,693		21	3.12			2,693		20	2.97			2,693		22	3.27			2,693		21	3.12
Interest Bearing Deposits at Banks		99,108		939	3.79			67,870		378	2.23			56,379		122	0.87			59,296		33	0.22			150,102		61	0.16
Other Interest-Earning Assets		2,875		39	5.38			2,784		39	5.56			3,235		38	4.71			3,483		39	4.54			3,475		45	5.14
Total Interest-Earning Assets		1,362,582		13,884	4.04			1,327,818		12,318	3.68			1,307,605		10,992	3.37			1,300,783		10,656	3.32			1,376,902		11,004	3.17
Noninterest-Earning Assets		51,718						68,796						84,323						122,288						100,607
Total Assets	$	1,414,300					$	1,396,614					$	1,391,928					$	1,423,071					$	1,477,509
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits ⁽³⁾	$	315,352	$	810	1.02	%	$	278,412	$	393	0.56	%	$	260,655	$	111	0.17		$	276,603	$	48	0.07		$	278,546	$	51	0.07	%
Savings ⁽³⁾		249,948		29	0.05			251,148		20	0.03			248,356		20	0.03			243,786		19	0.03			252,387		20	0.03
Money Market ⁽³⁾		206,192		604	1.16			189,371		269	0.56			188,804		61	0.13			192,425		41	0.09			209,572		57	0.11
Time Deposits ⁽³⁾		116,172		368	1.26			123,438		397	1.28			127,832		412	1.29			132,015		422	1.30			154,342		508	1.31
Total Interest-Bearing Deposits⁽³⁾		887,664		1,811	0.81			842,369		1,079	0.51			825,647		604	0.29			844,829		530	0.25			894,847		636	0.28
Short-Term Borrowings
Securities Sold Under Agreements to Repurchase		8,985		7	0.31			28,738		19	0.26			34,135		18	0.21			37,884		19	0.20			44,709		26	0.23
Other Borrowings		17,598		171	3.86			17,621		174	3.92			17,611		173	3.94			17,604		174	4.01			9,474		70	2.93
Total Interest-Bearing Liabilities		914,247		1,989	0.86			888,728		1,272	0.57			877,393		795	0.36			900,317		723	0.33			949,030		732	0.31
Noninterest-Bearing Demand Deposits		391,300						390,658						391,975						384,188						388,787
Other Liabilities		788						2,636						4,415						8,554						7,800
Total Liabilities		1,306,335						1,282,022						1,273,783						1,293,059						1,345,617
Stockholders' Equity		107,965						114,592						118,145						130,012						131,892
Total Liabilities and Stockholders' Equity	$	1,414,300					$	1,396,614					$	1,391,928					$	1,423,071					$	1,477,509
Net Interest Income (FTE) (Non-GAAP) ⁽⁴⁾			$	11,895					$	11,046					$	10,197					$	9,933					$	10,272
Net Interest-Earning Assets ⁽⁵⁾		448,335						439,090						430,212						400,466						427,872
Net Interest Rate Spread (FTE) (Non-GAAP) ^{(4) (6)}					3.18	%					3.11	%					3.01	%					2.99	%					2.86	%
Net Interest Margin (FTE) (Non-GAAP)⁽⁴⁾⁽⁷⁾					3.46						3.30						3.13						3.10						2.96
PPP Loans		216		22	40.41			2,424		123	20.13			5,546		144	10.41			14,673		445	12.30			29,067		391	5.34

(1)		Annualized based on three months ended results.
(2)		Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.
(3)		Includes Deposits Held for Sale that were sold in December 2021.
(4)		Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release for the calculation of the measure and reconciliation to the most comparable GAAP measure.
(5)		Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(6)		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.
(7)		Net interest margin represents annualized net interest income divided by average total interest-earning assets.

AVERAGE BALANCES AND YIELDS

	Year Ended
	December 31, 2022						December 31, 2021
	Average Balance		Interest and Dividends		Yield /Cost		Average Balance		Interest and Dividends		Yield /Cost
(Dollars in thousands) (Unaudited)
Assets:
Interest-Earning Assets:
Loans, Net ⁽¹⁾	$	1,019,124	$	42,010	4.12	%	$	1,014,405	$	39,799	3.92	%
Debt Securities
Taxable		220,818		3,852	1.74			162,987		2,990	1.83
Exempt From Federal Tax		8,383		270	3.22			11,829		366	3.09
Marketable Equity Securities		2,693		91	3.38			2,657		84	3.16
Interest Bearing Deposits at Banks		70,765		1,473	2.08			177,768		304	0.17
Other Interest-Earning Assets		3,092		154	4.98			3,733		186	4.98
Total Interest-Earning Assets		1,324,875		47,850	3.61			1,373,379		43,729	3.18
Noninterest-Earning Assets		81,553						91,075
Total Assets	$	1,406,428					$	1,464,454

Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits ⁽²⁾	$	282,850	$	1,362	0.48	%	$	272,256	$	232	0.09	%
Savings ⁽²⁾		248,334		88	0.04			247,864		98	0.04
Money Market ⁽²⁾		194,223		976	0.50			201,222		281	0.14
Time Deposits ⁽²⁾		124,817		1,599	1.28			171,805		2,514	1.46
Total Interest-Bearing Deposits ⁽²⁾		850,224		4,025	0.47			893,147		3,125	0.35
Short-Term Borrowings
Securities Sold Under Agreements to Repurchase		27,360		63	0.23			43,988		98	0.22
Other Borrowings		17,609		693	3.94			7,172		182	2.54
Total Interest-Bearing Liabilities		895,193		4,781	0.53			944,307		3,405	0.36
Noninterest-Bearing Demand Deposits		389,553						378,374
Other Liabilities		4,072						8,168
Total Liabilities		1,288,818						1,330,849
Stockholders' Equity		117,610						133,605
Total Liabilities and Stockholders' Equity	$	1,406,428					$	1,464,454
Net Interest Income (FTE) (Non-GAAP) ⁽³⁾				43,069						40,324
Net Interest-Earning Assets ⁽⁴⁾		429,682						429,072
Net Interest Rate Spread (FTE) (Non-GAAP) ⁽³⁾⁽⁵⁾					3.08	%					2.82	%
Net Interest Margin (FTE) (Non-GAAP)⁽³⁾⁽⁶⁾					3.25						2.94
PPP Loans		5,666		734	12.95			45,905		2,189	4.77

(1)		Net of the allowance for loan losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.
(2)		Includes Deposits Held for Sale that were sold in December 2021.
(3)		Refer to Explanation and Use of Non-GAAP Financial Measures in this Press Release 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.

Explanation of Use of Non-GAAP Financial Measures

In addition to financial measures presented in accordance with generally accepted accounting principles (“GAAP”), we use, and this Press Release contains or references, 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 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.

	Three Months Ended															Year Ended
	12/31/22			9/30/22			6/30/22			3/31/22			12/31/21			12/31/22			12/31/21
(Dollars in thousands, except share and per share data) (Unaudited)

Net Income (GAAP)	$	4,152		$	3,929		$	118		$	3,047		$	6,965		$	11,247		$	11,570

Adjustments
(Gain) Loss on Securities		(83	)		46			199			7			(44	)		168			(526	)
Gain on Sale of Branches		—			—			—			—			(5,203	)		—			(5,203	)
(Gain) Loss on Disposal of Fixed Assets		—			(439	)		—			8			—			(431	)		3
Tax effect		17			83			(42	)		(3	)		1,102			55			1,202

Non-Cash Charges:
Intangible Assets and Goodwill Impairment		—			—			—			—			—			—			1,178
Writedown on Fixed Assets		—			—			—			—			23			—			2,293
Tax Effect		—			—			—			—			—						—
Adjusted Net Income (Non-GAAP)	$	4,086		$	3,619		$	275		$	3,059		$	2,843		$	11,039		$	10,517

Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding		5,104,254			5,118,627			5,156,975			5,220,887			5,314,537			5,149,312			5,392,729

Earnings per Common Share - Diluted (GAAP)	$	0.81		$	0.77		$	0.02		$	0.58		$	1.31		$	2.18		$	2.15

Adjusted Earnings per Common Share - Diluted (Non-GAAP)	$	0.80		$	0.71		$	0.05		$	0.59		$	0.53		$	2.15		$	1.95

Net Income (GAAP) (Numerator)	$	4,152		$	3,929		$	118		$	3,047		$	6,965		$	11,247		$	11,570

Annualization Factor		3.97			3.97			4.01			4.06			3.97			1.00			1.00

Average Assets (Denominator)		1,414,300			1,396,614			1,391,928			1,423,071			1,477,509			1,406,428			1,464,454

Return on Average Assets (GAAP)		1.16	%		1.12	%		0.03	%		0.87	%		1.87	%		0.80	%		0.79	%

Adjusted Net Income (Non-GAAP) (Numerator)	$	4,086		$	3,619		$	275		$	3,059		$	2,843		$	11,039		$	10,517

Annualization Factor		3.97			3.97			4.01			4.06			3.97			1.00			1.00

Average Assets (Denominator)		1,414,300			1,396,614			1,391,928			1,423,071			1,477,509			1,407,413			1,455,368

Adjusted Return on Average Assets (Non-GAAP)		1.15	%		1.03	%		0.08	%		0.87	%		0.76	%		0.78	%		0.72	%

	Three Months Ended															Year Ended
	12/31/22			9/30/22			6/30/22			3/31/22			12/31/21			12/31/22			12/31/21
(Dollars in thousands) (Unaudited)

Net Income (GAAP) (Numerator)	$	4,152		$	3,929		$	118		$	3,047		$	6,965		$	11,247		$	11,570

Annualization Factor		3.97			3.97			4.01			4.06			3.97			1.00			1.00

Average Equity (GAAP) (Denominator)		107,965			114,592			118,145			130,012			131,892			117,610			133,605

Return on Average Equity (GAAP)		15.26	%		13.60	%		0.40	%		9.50	%		20.95	%		9.56	%		8.66	%

Adjusted Net Income (Non-GAAP) (Numerator)	$	4,086		$	3,619		$	275		$	3,059		$	2,843		$	11,039		$	10,517

Annualization Factor		3.97			3.97			4.01			4.06			3.97			1.00			1.00

Average Equity (GAAP) (Denominator)		107,965			114,592			118,145			130,012			131,892			117,610			133,605

Adjusted Return on Average Equity (Non-GAAP)		15.01	%		12.53	%		0.93	%		9.54	%		8.55	%		9.39	%		7.87	%

Tangible book value per common share is a Non-GAAP measure and is calculated based on tangible common equity divided by period-end common shares outstanding. Tangible common equity to tangible assets is a Non-GAAP measure and is calculated based on tangible common equity divided by tangible assets. We believe these Non-GAAP measures serve as useful tools 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.

	12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
(Dollars in thousands, except share and per share data) (Unaudited)

Assets (GAAP)	$	1,408,938		$	1,425,920		$	1,386,461		$	1,438,670		$	1,425,479
Goodwill and Intangible Assets, Net		(13,245	)		(13,691	)		(14,136	)		(14,582	)		(15,027	)
Tangible Assets (Non-GAAP) (Numerator)	$	1,395,693		$	1,412,229		$	1,372,325		$	1,424,088		$	1,410,452

Stockholders' Equity (GAAP)	$	110,155		$	106,706		$	113,772		$	122,156		$	133,124
Goodwill and Intangible Assets, Net		(13,245	)		(13,691	)		(14,136	)		(14,582	)		(15,027	)
Tangible Common Equity or Tangible Book Value (Non-GAAP) (Denominator)	$	96,910		$	93,015		$	99,636		$	107,574		$	118,097

Stockholders’ Equity to Assets (GAAP)		7.8	%		7.5	%		8.2	%		8.5	%		9.3	%
Tangible Common Equity to Tangible Assets (Non-GAAP)		6.9	%		6.6	%		7.3	%		7.6	%		8.4	%

Common Shares Outstanding (Denominator)		5,100,189			5,096,672			5,128,333			5,156,897			5,260,672

Book Value per Common Share (GAAP)	$	21.60		$	20.94		$	22.18		$	23.69		$	25.31
Tangible Book Value per Common Share (Non-GAAP)	$	19.00		$	18.25		$	19.43		$	20.86		$	22.45

Interest income on interest-earning assets, net interest rate spread and net interest margin are presented on a fully tax-equivalent (“FTE”) basis. The FTE basis adjusts for the tax benefit of income on certain tax-exempt loans and securities using the federal statutory income tax rate of 21 percent. 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															Year Ended
	12/31/22			9/30/22			6/30/22			3/31/22			12/31/21			12/31/22			12/31/21
(Dollars in thousands) (Unaudited)

Interest Income (GAAP)	$	13,855		$	12,287		$	10,958		$	10,616		$	10,963		$	47,716		$	43,557
Adjustment to FTE Basis		29			31			34			40			41			134			172
Interest Income (FTE) (Non-GAAP)		13,884			12,318			10,992			10,656			11,004			47,850			43,729
Interest Expense (GAAP)		1,989			1,272			795			723			732			4,781			3,405
Net Interest Income (FTE) (Non-GAAP)	$	11,895		$	11,046		$	10,197		$	9,933		$	10,272		$	43,069		$	40,324

Net Interest Rate Spread (GAAP)		3.17	%		3.10	%		3.00	%		2.98	%		2.85	%		3.07	%		2.81	%
Adjustment to FTE Basis		0.01			0.01			0.01			0.01			0.01			0.01			0.01
Net Interest Rate Spread (FTE) (Non-GAAP)		3.18			3.11			3.01			2.99			2.86			3.08			2.82

Net Interest Margin (GAAP)		3.45	%		3.29	%		3.12	%		3.08	%		2.95	%		3.24	%		2.92	%
Adjustment to FTE Basis		0.01			0.01			0.01			0.02			0.01			0.01			0.02
Net Interest Margin (FTE) (Non-GAAP)		3.46			3.30			3.13			3.10			2.96			3.25			2.94

Adjusted efficiency ratio excludes the effect of certain non-recurring or non-cash items and represents adjusted noninterest expense divided by adjusted operating revenue. The Company evaluates its operational efficiency based on its adjusted efficiency ratio and believes it provides additional perspective on its ongoing performance as well as peer comparability.

	Three Months Ended															Year Ended
	12/31/22			9/30/22			6/30/22			3/31/22			12/31/21			12/31/22			12/31/21
(Dollars in thousands) (Unaudited)

Noninterest Expense (GAAP) (Numerator)	$	8,998		$	8,827		$	8,410		$	8,656		$	9,972		$	34,891		$	42,862

Net Interest and Dividend Income (GAAP)	$	11,866		$	11,015		$	10,163		$	9,893		$	10,231		$	42,935		$	40,152

Noninterest Income (GAAP)		2,360			2,739			2,105			2,613			8,689			9,820			16,280
Operating Revenue (GAAP) (Denominator)	$	14,226		$	13,754		$	12,268		$	12,506		$	18,920		$	52,755		$	56,432
Efficiency Ratio (GAAP)		63.25	%		64.18	%		68.55	%		69.21	%		52.71	%		66.14	%		75.95	%

Noninterest Expense (GAAP)	$	8,998		$	8,827		$	8,410		$	8,656		$	9,972		$	34,891		$	42,862
Less:
Other Real Estate Owned (Income)		(38	)		(38	)		(37	)		(38	)		(30	)		(151	)		(183	)
Amortization of Intangible Assets		446			445			446			445			445			1,782			1,926
Intangible Assets and Goodwill Impairment		—			—			—			—			—			—			1,178
Writedown on Fixed Assets		—			—			—			—			23			—			2,293
Adjusted Noninterest Expense (Non-GAAP) (Numerator)	$	8,590		$	8,420		$	8,001		$	8,249		$	9,534		$	33,260		$	37,648

Net Interest and Dividend Income (GAAP)	$	11,866		$	11,015		$	10,163		$	9,893		$	10,231		$	42,935		$	40,152
Noninterest Income (GAAP)		2,360			2,739			2,105			2,613			8,689			9,820			16,280
Less:
Net Gain (Loss) on Securities		83			(46	)		(199	)		(7	)		44			(168	)		526
Gain on Sale of Branches		—			—			—			—			5,203			—			5,203
Net Gain (Loss) on Disposal of Fixed Assets		—			439			—			(8	)		—			431			(3	)
Adjusted Noninterest Income (Non-GAAP)	$	2,277		$	2,346		$	2,304		$	2,628		$	3,442		$	9,557		$	10,554
Adjusted Operating Revenue (Non-GAAP) (Denominator)	$	14,143		$	13,361		$	12,467		$	12,521		$	13,673		$	52,492		$	50,706
Adjusted Efficiency Ratio (Non-GAAP)		60.74	%		63.02	%		64.18	%		65.88	%		69.73	%		63.36	%		74.25	%

Allowance for loan losses to total loans, excluding PPP loans, is a Non-GAAP measure that serves as a useful measurement to evaluate the allowance for loan losses without the impact of SBA guaranteed loans.

	12/31/22			9/30/22			6/30/22			3/31/22			12/31/21
(Dollars in thousands) (Unaudited)

Allowance for Loan Losses (Numerator)	$	12,819		$	12,854		$	12,833		$	11,595		$	11,582

Total Loans		1,049,873		$	1,042,942			1,027,969		$	1,020,642		$	1,020,796
PPP Loans		(126	)		(768	)		(3,853	)		(8,242	)		(24,523	)
Total Loans, Excluding PPP Loans (Non-GAAP) (Denominator)	$	1,049,747		$	1,042,174		$	1,024,116		$	1,012,400		$	996,273

Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP)		1.22	%		1.23	%		1.25	%		1.15	%		1.16	%

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