CB Financial Services, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income (GAAP) for the three months ended September 30, 2026, was $5.327 million, compared to a loss of $5.696 million for the same period in 2025; year-to-date net income was $13.497 million compared to $164,000 in 2025.
• Adjusted net income (Non-GAAP) for the quarter was $4.865 million, up from $3.931 million in Q3 2025 and $4.301 million in Q2 2026; year-to-date adjusted net income was $13.029 million compared to $10.555 million in 2025.
• Earnings per diluted common share (GAAP) were $0.99 for the quarter, compared to $(1.07) in Q3 2025 and $0.80 in Q2 2026; year-to-date EPS was $2.53 compared to $0.03 in 2025.
• Adjusted earnings per diluted common share (Non-GAAP) were $0.91 for the quarter, compared to $0.74 in Q3 2025 and $0.80 in Q2 2026; year-to-date adjusted EPS was $2.44 compared to $1.97 in 2025.
• Net interest and dividend income increased to $15.0 million for the quarter, up from $13.1 million in Q3 2025; year-to-date it was $43.4 million compared to $36.9 million in 2025.
• Net interest margin (GAAP) improved to 3.75% for the quarter from 3.64% in Q3 2025 and 3.68% in Q2 2026; year-to-date NIM was 3.76% compared to 3.49% in 2025.
• Fully tax-equivalent (FTE) net interest margin (Non-GAAP) was 3.79% for the quarter, up from 3.67% in Q3 2025.
• Noninterest expense was $10.3 million for the quarter, an increase from $9.2 million in Q3 2025; year-to-date it was $30.7 million compared to $27.7 million in 2025.
• Provision for credit losses resulted in a recovery of $69,000 for the quarter, compared to a provision of $259,000 in Q3 2025; year-to-date provision was $190,000 compared to $227,000 in 2025.
• Return on average assets (GAAP) was 1.26% for the quarter, compared to (1.50)% in Q3 2025; year-to-date ROA was 1.11% compared to 0.01% in 2025.
• Return on average equity (GAAP) was 13.08% for the quarter, compared to (15.15)% in Q3 2025; year-to-date ROE was 11.25% compared to 0.15% in 2025.
• Book value per common share was $30.67 at September 30, 2026, down from $31.28 at December 31, 2025.
• Tangible book value per common share (Non-GAAP) was $28.76 at September 30, 2026, down from $29.35 at December 31, 2025.
• Total assets were $1.63 billion at September 30, 2026, an increase of 5.2% from $1.55 billion at December 31, 2025.
• Total loans remained stable at $1.16 billion at September 30, 2026, compared to $1.16 billion at December 31, 2025.
• The allowance for credit losses was $10.0 million at September 30, 2026, compared to $10.1 million at December 31, 2025.
• Nonperforming loans to total loans ratio was 0.28% at September 30, 2026, down from 0.46% at December 31, 2025.
• The allowance for credit losses to nonperforming assets ratio was 311.8% at September 30, 2026, compared to 190.5% at December 31, 2025.
• Net charge-offs were $59,000 for the quarter, or 0.02% of average loans on an annualized basis, compared to net recoveries of $88,000 in Q3 2025.

Guidance and Future Outlook:

• Management expects payoff activity to moderate in the fourth quarter following a modest total loan decrease in the third quarter driven by a single large relationship payoff.
• The Company is focused on building loan and deposit momentum as it closes out 2026 and heads into 2027.
• Management anticipates the Specialty Treasury Payments & Services program's contribution will build over time as newly onboarded relationships mature and consolidate more banking activity.
• The Company is positioned to capitalize on opportunities ahead with solid capital, sound asset quality, and ample liquidity.

Business Segments and Product Lines:

• Commercial loans totaled 63.2% of the loan portfolio at September 30, 2026, compared to 59.8% at September 30, 2025.
• The Bank discontinued its indirect automobile loan product as of June 30, 2023, leading to continued reductions in consumer loans; excluding this portfolio, total loans increased 1.3% since December 31, 2025.
• Commercial real estate loans increased $46.8 million and construction loans increased $6.9 million since December 31, 2025.
• Commercial and industrial loans decreased $25.5 million since December 31, 2025, primarily due to the payoff of a large line of credit from a business sale.
• Organic deposits increased $89.6 million, or 7.2%, to $1.33 billion at September 30, 2026, compared to $1.24 billion at December 31, 2025.
• Interest-bearing demand and money market deposits increased $73.7 million and $27.7 million, respectively, since December 31, 2025, driven by the onboarding of Specialty Treasury clients.
• Brokered deposits decreased $88.5 million, or 89.8%, to $10.0 million at September 30, 2026, as the Bank replaced them with lower-cost FHLB borrowings.
• Short-term borrowings increased $79.0 million to $79.0 million at September 30, 2026.
• Securities increased $64.1 million, or 22.9%, to $344.0 million at September 30, 2026, driven by $134.7 million in security purchases.
• The Company purchased a $7.7 million renewable energy tax credit during the quarter.
• The Company invested $3.3 million in a low-income housing tax credit project during the quarter.

Market and Competitive Landscape:

• The Bank strategically shifted its deposit mix toward lower-cost core deposit relationships and away from higher-priced funding, driven by the onboarding of Specialty Treasury clients.
• The Company redeployed repayments of indirect automobile and residential mortgage loans into higher-yielding commercial loan products.
• The Bank utilized asset-liability modeling to reduce earnings sensitivity while maintaining strong liquidity and capital.
• The Company replaced maturing brokered deposits with lower-cost FHLB borrowings to manage funding costs.

Risks and Challenges:

• Accumulated other comprehensive losses increased due to recent increases in market interest rates, contributing to a decline in book value and tangible book value per share.
• The provision for credit losses on unfunded commitments increased by $330,000 in the quarter due to a $10.8 million increase in unfunded commitments and an increase in the loss rate for construction and land development unfunded commitments.
• Forward-looking statements are subject to risks including general and local economic conditions, changes in market interest rates, deposit flows, demand for loans, real estate values, competition, loan delinquency rates, and regulatory changes.

Management Commentary and Tone:

• President and CEO John H. Montgomery stated the Company delivered solid results with improved net interest margin and earnings.
• Management noted that earning asset yields benefited from balance sheet restructuring executed in the third quarter of the prior year, helping insulate the portfolio against rate-related repricing pressure.
• Management maintained disciplined expense management, keeping the cost structure aligned with the current operating environment.
• The Company continued to operate with discipline, maintaining a strong balance sheet and conservative credit standards.
• Management expressed confidence in the Specialty Treasury Payments & Services program's ability to enhance efficiency, scalability, and earnings power.

Other Key Points:

• The Board of Directors declared a quarterly cash dividend of $0.28 per outstanding share of common stock, payable on or about November 27, 2026, to stockholders of record as of November 13, 2026.
• The Company recorded a $462,000 federal income tax benefit related to the purchase of a $7.7 million renewable energy tax credit during the quarter.
• The effective tax rate for the quarter was 8.5%, compared to an effective tax benefit rate of 18.9% in Q3 2025.
• Stockholders' equity decreased $1.6 million, or 1.0%, to $156.0 million at September 30, 2026, primarily due to an $11.9 million increase in accumulated other comprehensive loss, partially offset by $13.5 million of net income for the current year.
• The Company purchased $315,000 of treasury shares since December 31, 2025.
• The Company issued $667,000 of shares as a result of stock option exercises since December 31, 2025.
• Noninterest income for the quarter was $1.0 million, a significant improvement from a loss of $10.7 million in Q3 2025, which included $11.8 million in losses on the sale of securities from a prior balance sheet repositioning strategy.
• The Company revised its presentation of certain Non-GAAP financial measures to no longer exclude gains and losses resulting from changes in the fair value of equity securities.