CB Financial Services CBFV Q2 2026 earnings

(1) Refer to Explanation of Use of Non-GAAP Financial Measures and reconciliation of adjusted net income and adjusted earnings per common share - diluted as presented later in this Press Release.

2026 Second Quarter Financial Highlights

• Total assets were $1.66 billion at June 30, 2026, an increase of $73.1 million from March 31, 2026. Strong organic deposit growth augmented cash balances and funded loans and investment security purchases. The Bank continues to focus efforts on managing the balance sheet to maximize earnings while maintaining a stable risk profile. These strategic movements include:
• Effectively managing cash and liquidity.
• Redeploying repayments of indirect automobile and residential mortgage loans into higher-yielding commercial loan products. Commercial loans totaled 62.1% of the Bank’s loan portfolio at June 30, 2026 compared to 58.6% at June 30, 2025.
• The Bank continues to strategically shift its deposit mix toward lower cost core deposit relationships and away from higher priced funding, a favorable transition driven by the ongoing onboarding of Specialty Treasury clients that began during the first quarter of 2026.
• Net interest and dividend income increased for five consecutive quarters to $14.5 million for the three months ended June 30, 2026 compared to $13.9 million for the three months ended March 31, 2026, although net interest margin (NIM) declined after five consecutive quarters of improvement to 3.68% for the three months ended June 30, 2026 compared to 3.83% for the three months ended March 31, 2026. The decline in NIM resulted from a decrease in the yield on earning assets to 5.34% from 5.47%, driven by higher cash balances resulting from deposit growth. At the same time, the cost of funds increased to 1.72% from 1.70% resulting from Specialty Treasury deposit growth of $56.5 million in interest bearing demand and money market deposits.
• Noninterest expenses increased $378,000 to $10.4 million for the three months ended June 30, 2026 compared to $10.0 million for the three months ended March 31, 2026. This increase was driven by an increase in data processing due to the implementation of enhanced treasury and commercial banking platforms and an increase in salaries and employee benefits due to higher healthcare benefits.
• Asset quality remains strong as nonperforming loans to total loans was 0.29% at June 30, 2026.
• Book value per share and tangible book value per share (Non-GAAP) was $31.91 and $29.99, respectively at June 30, 2026. The improvements since year-end 2025 resulted from increased equity due to current period net income and stock option exercises, partially offset by the increase in accumulated other comprehensive losses, treasury shares repurchased under the Company’s stock repurchase program and the payment of dividends.
• The Bank remains well-capitalized and is positioned for future growth.

Management Commentary

President and CEO John H. Montgomery commented, “Our team’s disciplined execution and well-grounded strategy came through clearly in our second quarter performance, driving substantive progress towards the Company’s financial goals. Net interest income grew during the quarter, even as net interest margin declined due to elevated cash balances and slightly higher deposit costs. This growth was supported by a $69.5 million increase in organic deposits during the quarter, reflecting the continued strength of our core deposit franchise. Earning asset yields remained resilient, continuing to benefit from the balance sheet restructuring executed in the third quarter last year, which helps insulates the portfolio against rate-related repricing pressure. We remain focused on positioning our balance sheet to protect our financial foundation and support substantial earnings growth over time.

Amid ongoing economic volatility, we continue to prioritize prudent financial discipline, maintain a resilient balance sheet, and consistently adhere to the credit quality standards our shareholders rely on. Total loans increased by $17.5 million, or 1.5%, during the first half of 2026, with increases in commercial real estate and construction loans countering the decreases in consumer and residential real estate loans. Our asset quality continues to be strong, with nonperforming loans representing 0.29% of total loans and the allowance for credit losses covering 308.5% of nonperforming assets at quarter-end. We continue to have strong conviction in the fundamental soundness of our loan portfolio and our capacity to manage risk prudently amid continued expansion.

The second quarter marked a key milestone as our Specialty Treasury Payments & Services program officially reached full operational capacity, a testament to the disciplined execution behind this pillar of our long-term growth strategy. With the platform now fully up and running and the initial customer onboarding behind us, we are already seeing it strengthen our core deposit base and open new avenues for sustainable revenue, with $84.1 million in new deposits since year-end. We remain confident in this program’s ability to enhance the Company’s efficiency, scalability, and earnings power over time. As the bulk of new relationships come fully onto the platform, we are encouraged by the strength of the pipeline and the quality of engagement we are seeing across our customer base.

As part of our broader growth strategy, we are expanding our capabilities in mortgage lending, an effort that deepens customer relationships, diversifies our revenue base, and unlocks cross-selling opportunities across our primary market. Because it’s grounded in our relationship-banking model, this work also reinforces our larger lending and deposit growth goals. Even as we explore new growth opportunities, our dedication to the local customers and communities we serve hasn’t wavered— they remain the cornerstone of our business, and the driving force behind every decision we make.”

Dividend Declaration

The Company’s Board of Directors declared a $0.28 quarterly cash dividend per outstanding share of common stock, payable on or about August 28, 2026, to stockholders of record as of the close of business on August 14, 2026.

2026 Second Quarter Financial Review

Net Interest and Dividend Income

Net interest and dividend income increased $2.0 million, or 15.9%, to $14.5 million for the three months ended June 30, 2026 compared to $12.5 million for the three months ended June 30, 2025.

• Net Interest Margin (NIM) (GAAP) increased to 3.68% for the three months ended June 30, 2026 compared to 3.54% for the three months ended June 30, 2025. Fully tax equivalent (FTE) NIM (Non-GAAP) increased 18 basis points (“bps”) to 3.73% for the three months ended June 30, 2026 compared to 3.55% for the three months ended June 30, 2025.
• Interest and dividend income increased $2.1 million, or 11.4%, to $20.9 million for the three months ended June 30, 2026 compared to $18.8 million for the three months ended June 30, 2025.
• Interest income on loans increased $685,000, or 4.4%, to $16.2 million for the three months ended June 30, 2026 compared to $15.5 million for the three months ended June 30, 2025. The average balance of loans increased $54.6 million to $1.15 billion from $1.10 billion, causing a $768,000 increase in interest income on loans. Partially offsetting this increase, the average yield on loans decreased 3 bps to 5.65% from 5.68% despite a 75 bp reduction in the federal funds target rate since September 2025. While this led to the downward repricing of adjustable rate loans, the impact was mostly negated 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 decrease in the average yield caused a $82,000 decrease in interest income on loans.
• Interest income on investment securities increased $943,000, or 33.0%, to $3.8 million for the three months ended June 30, 2026 compared to $2.9 million for the three months ended June 30, 2025 driven by an 80 bp increase in average yield, coupled with a $41.0 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 and 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%. The increase in the average balance resulted from current year purchases.
• Interest income on interest-earning deposits at other banks increased $514,000 to $845,000 for the three months ended June 30, 2026 compared to $331,000 for the three months ended June 30, 2025 driven by a $66.3 million increase in average balances, partially offset by a 56 bp decrease in the average yield. The increase in the volume was due to deposit growth while the decrease in the yield was related to the Federal Reserve’s reductions in the target federal funds rate.
• Interest expense increased $152,000, or 2.4%, to $6.4 million for the three months ended June 30, 2026 compared to $6.2 million for the three months ended June 30, 2025.
• Interest expense on deposits increased $219,000, or 3.8%, to $5.9 million for the three months ended June 30, 2026 compared to $5.7 million for the three months ended June 30, 2025. Average interest-bearing deposit balances increased $137.5 million, or 13.7%, to $1.14 billion as of June 30, 2026 compared to $1.01 billion as of June 30, 2025, primarily as the Bank grew core banking relationships and onboarded Specialty Treasury clients. The increase in average balances accounted for a $748,000 increase in interest expense. This was partially offset as the cost of interest-bearing deposits decreased 20 bps to 2.08% for the three months ended June 30, 2026 from 2.28% for the three months ended June 30, 2025 due to the Federal Reserve federal funds target rate decreases since September 2025. The decrease in the cost of interest-bearing deposits accounted for a $529,000 decrease in interest expense.

Provision for Credit Losses

A provision for credit losses of $17,000 was recorded for the three months ended June 30, 2026. The provision for credit losses on loans was $157,000 and was primarily due to loan growth. This was partially offset by a $140,000 reversal of provision for credit losses on unfunded commitments primarily due to a decrease in unfunded commitments. This compared to a provision for credit losses of $8,000 recorded for the three months ended June 30, 2025 as the provision for credit losses on loans was a $136,000 recovery primarily due to a reduction of reserves required for individually assessed loans and changes in loan concentrations, partially offset by additional reserve required for overall loan growth and a change in qualitative factors relating to economic conditions, and the provision for credit losses on unfunded commitments was $144,000 due to an increase in unfunded commitments and an increase in funding rates.

Noninterest Income

Noninterest income increased $41,000, or 4.4%, to $972,000 for the three months ended June 30, 2026, compared to $931,000 for the three months ended June 30, 2025 primarily due to a $23,000 increase in service fees related to corporate deposit and Individual Covered Health Reimbursement Arrangement accounts and a $19,000 increase in net gain on sale of loans.

Noninterest Expense

Noninterest expense increased $1.6 million, or 18.8%, to $10.4 million for the three months ended June 30, 2026 compared to $8.7 million for the three months ended June 30, 2025. 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. Data processing expense increased $379,000 due to the implementation of enhanced treasury and commercial banking platforms in late 2025 and early 2026. Pennsylvania shares tax increased $124,000 due to $179,000 of refunds received in 2025 on amended returns filed for prior years. Professional fees increased $81,000 due to the timing of internal audit services and higher legal fees associated with treasury services. Contracted services increased $54,000 due to outsourced information security services.

Statement of Financial Condition Review

Assets

Total assets increased $108.7 million, or 7.0%, to $1.66 billion at June 30, 2026, compared to $1.55 billion at December 31, 2025.

• Cash and due from banks increased $44.4 million, or 140.1%, to $76.1 million at June 30, 2026, compared to $31.7 million at December 31, 2025, driven by deposit growth.
• Securities increased $45.7 million, or 16.3%, to $325.6 million at June 30, 2026, compared to $279.9 million at December 31, 2025. This was primarily due to $84.9 million of security purchases, partially offset by $37.9 million of maturities and principal repayments on amortizing securities and a $1.9 million increase in unrealized losses on the portfolio.

Loans and Credit Quality

• Total loans increased $17.5 million, or 1.5%, to $1.18 billion compared to $1.16 billion, and included increases in commercial real estate and construction loans of $19.6 million and $13.5 million, respectively, partially offset by decreases in consumer and residential real estate loans of $11.8 million and $2.2 million, respectively. The decrease in consumer loans resulted from the continued reduction in indirect automobile loan production since 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 $11.1 million decrease in indirect automobile loans, total loans increased $28.5 million, or 2.5%. Loan production totaled $90.8 million while $64.8 million of loans were paid off since December 31, 2025.
• Nonperforming loans, which include nonaccrual loans and accruing loans past due 90 days or more, were $3.4 million at June 30, 2026 and $5.3 million at December 31, 2025. Nonperforming loans to total loans ratio was 0.29% at June 30, 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.
• The allowance for credit losses (ACL) was $10.5 million at June 30, 2026 and $10.1 million at December 31, 2025. As a result, the ACL to total loans was 0.89% at June 30, 2026 and 0.87% at December 31, 2025. During the current year, the Company recorded a net provision for credit losses of $259,000. The ACL to nonperforming assets was 308.5% at June 30, 2026 and 190.5% at December 31, 2025.
• Net charge-offs for the three months ended June 30, 2026 were $9,000, compared to net recoveries for the three months ended June 30, 2025 of $39,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the six months ended June 30, 2026 were $50,000, or 0.01% of average loans on an annualized basis, compared to net charge-offs for the six months ended June 30, 2025 of $15,000.

Liabilities

Total liabilities increased $104.2 million, or 7.5%, to $1.49 billion at June 30, 2026 compared to $1.39 billion at December 31, 2025.

Deposits

• Organic deposits increased $105.1 million, or 8.5%, to $1.35 billion as of June 30, 2026 compared to $1.24 billion at December 31, 2025. Interest-bearing demand and money market deposits increased $103.1 million and $11.6 million, respectively, while noninterest deposits and time deposits decreased $5.1 million and $4.1 million, respectively. This growth has occurred as the Bank began onboarding Specialty Treasury clients during the first quarter of 2026. The Bank continues to focus on building core banking relationships while seeking opportunities to strategically reduce higher priced funding.
• Brokered deposits decreased $64.9 million, or 65.9%, to $33.6 million as of June 30, 2026 compared to $98.5 million at December 31, 2025, as the Bank elected to utilize lower cost FHLB borrowings instead. The remaining brokered deposits mature within three months and were utilized primarily to fund the purchase of floating rate CLO securities. At June 30, 2026, FDIC insured deposits totaled approximately 55.1% of total deposits while an additional 19.7% of total deposits were collateralized with investment securities.

Borrowed Funds

• Short-term borrowings increased $65.0 million to $65.0 million as of June 30, 2026 as the Bank replaced maturing brokered deposits with lower cost FHLB borrowings.

Stockholders’ Equity

Stockholders’ equity increased $4.6 million, or 2.9%, to $162.1 million at June 30, 2026, compared to $157.5 million at December 31, 2025. The key factors positively impacting stockholders’ equity were $8.2 million of net income for the current year and $551,000 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 market interest rate changes, the payment of $2.8 million in dividends and $306,000 of treasury shares purchased under the stock repurchase program since December 31, 2025.

Book value per share Book value per common share was $31.91 at June 30, 2026 compared to $31.28 at December 31, 2025, an increase of $0.63.

Tangible book value per common share (Non-GAAP) was $29.99 at June 30, 2026, compared to $29.35 at December 31, 2025, an increase of $0.64.

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.

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

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, 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.

Company Contact:

John H. Montgomery

President and Chief Executive Officer

Phone: (724) 223-8317

(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 all nonaccrual loans and accruing loans that are 90 days or more past due.

(4) Delinquent loans consist of accruing loans that are 30 days or more past due.

(5) Nonperforming assets consist of nonperforming loans and other real estate owned.

(6) Capital ratios are for Community Bank only.

Certain items previously reported may have been reclassified to conform with the current reporting period’s format.

(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 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.

(1) Annualized based on six 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 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 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.