UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 001-36706

CB FINANCIAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	51-0534721
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 N. Market Street, Carmichaels, PA	15320
(Address of principal executive offices)	(Zip Code)

(724) 966-5041

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Common stock, par value $0.4167 per share	CBFV	The Nasdaq Stock Market, LLC
(Title of each class)	(Trading symbol)	(Name of each exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 9, 2022, the number of shares outstanding of the Registrant’s Common Stock was 5,152,409.

FORM 10-Q

INDEX

	Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)	1
Consolidated Statements of Financial Condition	1
Consolidated Statements of Income	2
Consolidated Statements of Comprehensive (Loss) Income	3
Consolidated Statements of Changes In Stockholders’ Equity	4
Consolidated Statements of Cash Flows	5
Notes to the Consolidated Financial Statements (Unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	28
Item 3. Quantitative and Qualitative Disclosure about Market Risk.	38
Item 4. Controls and Procedures.	39
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.	40
Item 1A. Risk Factors.	40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	40
Item 3. Defaults Upon Senior Securities.	40
Item 4. Mine Safety Disclosures.	40
Item 5. Other Information.	40
Item 6. Exhibits	40
SIGNATURES	41

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	(Unaudited) March 31, 2022		December 31, 2021
(Dollars in thousands, except per share and share data)
ASSETS
Cash and Due From Banks:
Interest Bearing	$	55,233	$	63,968
Non-Interest Bearing	68,355		55,706
Total Cash and Due From Banks	123,588		119,674
Securities:
Available-for-Sale Debt Securities, at Fair Value	228,238		222,108
Equity Securities, at Fair Value	2,859		2,866
Total Securities	231,097		224,974
Loans, Net of Allowance for Loan Losses of $11,595 and $11,582 at March 31, 2022 and December 31, 2021, Respectively	1,009,047		1,009,214
Premises and Equipment, Net	18,349		18,399
Bank-Owned Life Insurance	25,468		25,332
Goodwill	9,732		9,732
Intangible Assets, Net	4,850		5,295
Accrued Interest Receivable and Other Assets	16,539		12,859
TOTAL ASSETS	$	1,438,670	$	1,425,479
LIABILITIES
Deposits:
Non-Interest Bearing Demand Deposits	400,105		385,775
NOW Accounts	280,455		272,518
Money Market Accounts	192,929		192,125
Savings Accounts	247,589		239,482
Time Deposits	129,235		136,713
Total Deposits	1,250,313		1,226,613
Short-Term Borrowings	39,219		39,266
Other Borrowings	17,607		17,601
Accrued Interest Payable and Other Liabilities	9,375		8,875
TOTAL LIABILITIES	1,316,514		1,292,355
STOCKHOLDERS' EQUITY
Preferred Stock, No Par Value; 5,000,000 Shares Authorized	—		—
Common Stock, $0.4167 Par Value; 35,000,000 Shares Authorized, 5,701,758 Shares Issued and 5,156,897 and 5,260,672 Shares Outstanding at March 31, 2022 and December 31, 2021, Respectively	2,376		2,367
Capital Surplus	83,422		83,294
Retained Earnings	59,343		57,534
Treasury Stock, at Cost (544,861 and 420,321 Shares at March 31, 2022 and December 31, 2021, Respectively)	(12,367)		(9,144)
Accumulated Other Comprehensive Loss	(10,618)		(927)
TOTAL STOCKHOLDERS' EQUITY	122,156		133,124
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,438,670	$	1,425,479

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

1

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

	Three Months Ended March 31,
	2022		2021
(Dollars in thousands, except share and per share data)
INTEREST AND DIVIDEND INCOME
Loans, Including Fees	$	9,551	$	10,146
Investment Securities:
Taxable	905		646
Tax-Exempt	66		78
Dividends	22		20
Other Interest and Dividend Income	72		98
TOTAL INTEREST AND DIVIDEND INCOME	10,616		10,988
INTEREST EXPENSE
Deposits	530		947
Short-Term Borrowings	19		23
Other Borrowings	174		41
TOTAL INTEREST EXPENSE	723		1,011
NET INTEREST AND DIVIDEND INCOME	9,893		9,977
Provision For Loan Losses	—		—
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	9,893		9,977
NONINTEREST INCOME
Service Fees	526		546
Insurance Commissions	1,798		1,595
Other Commissions	89		165
Net Gain on Sales of Loans	—		86
Net (Loss) Gain on Securities	(7)		447
Net Gain on Purchased Tax Credits	14		18
Net Loss on Disposal of Fixed Assets	(8)		—
Income from Bank-Owned Life Insurance	136		137
Other Income	65		180
TOTAL NONINTEREST INCOME	2,613		3,174
NONINTEREST EXPENSE
Salaries and Employee Benefits	4,565		4,894
Occupancy	686		710
Equipment	210		266
Data Processing	485		518
FDIC Assessment	209		250
PA Shares Tax	240		265
Contracted Services	587		687
Legal and Professional Fees	152		189
Advertising	116		140
Other Real Estate Owned (Income)	(38)		(38)
Amortization of Intangible Assets	445		532
Other Expense	999		982
TOTAL NONINTEREST EXPENSE	8,656		9,395
Income Before Income Tax Expense	3,850		3,756
Income Tax Expense	803		911
NET INCOME	$	3,047	$	2,845
EARNINGS PER SHARE
Basic	$	0.59	$	0.52
Diluted	0.58		0.52
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic	5,198,194		5,434,374
Diluted	5,220,887		5,436,881

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

2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

	Three Months Ended March 31,
	2022		2021
(Dollars in thousands)
Net Income	$	3,047	$	2,845
Other Comprehensive (Loss) Income:
Change in Unrealized (Loss) on Investment Securities Available-for-Sale	(12,351)		(2,851)
Income Tax Effect	2,660		612
Reclassification Adjustment for Gain on Sale of Debt Securities Included in Net Income (1)	—		(225)
Income Tax Effect (2)	—		48
Other Comprehensive (Loss), Net of Income Tax Effect	(9,691)		(2,416)
Total Comprehensive (Loss) Income	$	(6,644)	$	429

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

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

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

3

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

Three Months Ended March 31, 2022	Shares Issued	Common Stock		Capital Surplus		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
(Dollars in thousands, except share and per share data)
December 31, 2021	5,680,993	$	2,367	$	83,294	$	57,534	$	(9,144)	$	(927)	$	133,124
Comprehensive Loss:
Net Income	—	—		—		3,047		—		—		3,047
Other Comprehensive Loss	—	—		—		—		—		(9,691)		(9,691)
Restricted Stock Awards Granted	20,765	9		(9)		—		—		—		—
Restricted Stock Awards Forfeited	—	—		4		—		(4)		—		—
Stock-Based Compensation Expense	—	—		130		—		—		—		130
Exercise of Stock Options	—	—		3		—		164		—		167
Treasury stock purchased, at cost (131,840 shares)	—	—		—		—		(3,383)		—		(3,383)
Dividends Paid ($0.24 Per Share)	—	—		—		(1,238)		—		—		(1,238)
March 31, 2022	5,701,758	$	2,376	$	83,422	$	59,343	$	(12,367)	$	(10,618)	$	122,156

Three Months Ended March 31, 2021	Shares Issued	Common Stock		Capital Surplus		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income		Total Stockholders' Equity
(Dollars in thousands, except share and per share data)
December 31, 2020	5,680,993	$	2,367	$	82,723	$	51,132	$	(5,094)	$	3,402	$	134,530
Comprehensive Income:
Net Income	—	—		—		2,845		—		—		2,845
Other Comprehensive Loss	—	—		—		—		—		(2,416)		(2,416)
Stock-Based Compensation Expense	—	—		121		—		—		—		121
Dividends Paid ($0.24 Per Share)	—	—		—		(1,304)		—		—		(1,304)
March 31, 2021	5,680,993	$	2,367	$	82,844	$	52,673	$	(5,094)	$	986	$	133,776

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

4

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31,	2022		2021
(Dollars in thousands)
OPERATING ACTIVITIES
Net Income	$	3,047	$	2,845
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities
Net Amortization on Securities	17		31
Depreciation and Amortization	637		562
Loss (Gain) on Securities	7		(447)
Gain on Purchased Tax Credits	(14)		(18)
Income from Bank-Owned Life Insurance	(136)		(137)
Proceeds From Mortgage Loans Sold	—		2,251
Originations of Mortgage Loans for Sale	—		(2,165)
Gain on Sale of Loans	—		(86)
Gain on Sale of Other Real Estate Owned and Repossessed Assets	(1)		—
Noncash Expense for Stock-Based Compensation	130		121
Decrease in Accrued Interest Receivable	94		134
Net Loss on Disposal of Fixed Assets	8		—
Increase in Taxes Payable	956		893
Payments on Operating Leases	—		(88)
Decrease in Accrued Interest Payable	60		(141)
Other, Net	(1,640)		714
NET CASH PROVIDED BY OPERATING ACTIVITIES	3,165		4,469
INVESTING ACTIVITIES
Investment Securities Available for Sale:
Proceeds From Principal Repayments and Maturities	8,328		10,953
Purchases of Securities	(26,826)		(22,299)
Proceeds from Sale of Securities	—		11,930
Net Decrease in Loans	223		3,148
Purchase of Premises and Equipment	(186)		(199)
Proceeds From Sale of Other Real Estate Owned	37		—
(Increase) Decrease in Restricted Equity Securities	(26)		200
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES	(18,450)		3,733
FINANCING ACTIVITIES
Net Increase in Deposits	23,700		59,894
Net (Decrease) Increase in Short-Term Borrowings	(47)		4,297
Principal Payments on Other Borrowed Funds	—		(2,000)
Cash Dividends Paid	(1,238)		(1,304)
Treasury Stock, Purchases at Cost	(3,383)		—
Exercise of Stock Options	167		—
NET CASH PROVIDED BY FINANCING ACTIVITIES	19,199		60,887
INCREASE IN CASH AND CASH EQUIVALENTS	3,914		69,089
CASH AND DUE FROM BANKS AT BEGINNING OF YEAR	119,674		160,911
CASH AND DUE FROM BANKS AT END OF PERIOD	$	123,588	$	230,000

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

5

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31, 2022	2022		2021
(Dollars in thousands)
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash Paid For:
Interest on Deposits and Borrowings (Including Interest Credited to Deposits of $450 and $1,084, Respectively)	$	486	$	1,153
SUPPLEMENTAL NONCASH DISCLOSURE:
Right of Use Asset Recognized	1,175		—
Lease Liability Recognized	1,175		—

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

6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements include the accounts of CB Financial Services, Inc. (“CB Financial”) and its wholly owned subsidiary, Community Bank (the “Bank”), and the Bank’s wholly-owned subsidiary, Exchange Underwriters, Inc. (“Exchange Underwriters”). CB Financial, the Bank and Exchange Underwriters are collectively referred to as the “Company”. All intercompany transactions and balances have been eliminated in consolidation.

The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and with general practice within the banking industry. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading in any material respect. In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the Consolidated Statements of Financial Condition and income and expenses for the reporting period. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to determination of the allowance for losses on loans, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, other-than-temporary impairment evaluations of securities, goodwill and intangible assets impairment, and the valuation of deferred tax assets.

In the opinion of management, the accompanying unaudited interim financial statements include all adjustments considered necessary for a fair presentation of the Company’s financial position and results of operations at the dates and for the periods presented. All these adjustments are of a normal, recurring nature, and they are the only adjustments included in the accompanying unaudited interim financial statements. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Interim results are not necessarily indicative of results for a full year.

The Company evaluated subsequent events through the date the consolidated financial statements were filed with the SEC and incorporated into the consolidated financial statements the effect of all material known events determined by Accounting Standards Codification ("ASC") 855, Subsequent Events, to be recognizable events.

Nature of Operations

The Company derives substantially all its income from banking and bank-related services which include interest income on commercial, commercial mortgage, residential real estate and consumer loan financing, as well as interest and dividend income on securities, insurance commissions, and fees generated from deposit services to its customers. The Company provides banking services through its subsidiary, Community Bank, a Pennsylvania-chartered commercial bank headquartered in Carmichaels, Pennsylvania. The Bank is a community-oriented institution offering residential and commercial real estate loans, commercial and industrial loans, and consumer loans as well as a variety of deposit products for individuals and businesses in its market area. After the consolidation of six branches and the sale of two branches in 2021 and the consolidation of two branches in 2020, the Bank operates 11 branches in Greene, Allegheny, Washington, Fayette and Westmoreland Counties in southwestern Pennsylvania, and three branches in Marshall and Ohio Counties in West Virginia. Property and casualty, commercial liability, surety and other insurance products are offered through Exchange Underwriters, a full-service, independent insurance agency.

Critical Accounting Policies; Use of Critical Accounting Estimates

There were no material changes in our critical accounting policies during the three months ended March 31, 2022. See Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC, for additional information regarding our critical accounting policies.

Recent Accounting Standards

In September 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, ASU 2016-13 eliminates the probable initial recognition threshold in current GAAP; and instead requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP; however, this ASU requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects companies holding financial assets and net investment in leases that are not accounted for at

7

fair value through net income. The ASU 2016-13 amendments affect loans, debt securities, trade receivables, net investments in leases, off balance-sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. ASU 2016-13 was originally effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. In November 2019, the FASB approved a delay of the required implementation date of ASU 2016-13 for smaller reporting companies, including the Company, resulting in a required implementation date for the Company of January 1, 2023. Early adoption will continue to be permitted. In preparation for the implementation of this ASU, the Company has formed a cross-functional team, contracted with a third-party software provider, and is consulting with a third-party professional advisory service to assist in the model development. The Company plans to assess the overall impact by running the existing and new allowance models in parallel prior to the period of implementation. The Company expects to recognize a one-time adjustment to the allowance for loan losses upon adoption, but cannot yet determine the magnitude of the one-time adjustment or the overall impact of the new guidance on the Company’s consolidated financial condition or results of operation.

Note 2. Earnings Per Share

There are no convertible securities which would affect the numerator in calculating basic and diluted earnings per share; therefore, net income as presented on the Consolidated Statements of Income is used as the numerator.

The following table sets forth the composition of the weighted-average common shares (denominator) used in the basic and diluted earnings per share computation.

	Three Months Ended March 31,
	2022		2021
(Dollars in thousands, except share and per share data)
Net Income	$	3,047	$	2,845
Weighted-Average Basic Common Shares Outstanding	5,198,194		5,434,374
Dilutive Effect of Common Stock Equivalents (Stock Options and Restricted Stock)	22,693		2,507
Weighted-Average Diluted Common Shares and Common Stock Equivalents Outstanding	5,220,887		5,436,881
Earnings Per Share:
Basic	$	0.59	$	0.52
Diluted	0.58		0.52

The dilutive effect on weighted average diluted common shares outstanding is the result of outstanding stock options and nonvested restricted stock. The following table presents for the periods indicated (a) options to purchase shares of common stock that were outstanding but not included in the computation of earnings per share because the options’ exercise price was greater than the average market price of the common shares for the period, and (b) shares of restricted stock awards that were not included in the computation of diluted earnings per share because the hypothetical repurchase of shares under the treasury stock method exceeded the weighted average nonvested restricted awards, therefore the effects would be anti-dilutive.

	Three Months Ended March 31,
	2022	2021
Stock Options	155,138	201,662
Restricted Stock	37,865	33,610

8

Note 3. Securities

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

	March 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(Dollars in thousands)
Available-for-Sale Debt Securities:
U.S. Government Agencies	$	53,992	$	—	$	(4,781)	$	49,211
Obligations of States and Political Subdivisions	17,946		448		(1)		18,393
Mortgage-Backed Securities - Government-Sponsored Enterprises	52,505		177		(2,063)		50,619
Collateralized Mortgage Obligations - Government Sponsored Enterprises	107,848		2		(7,042)		100,808
Corporate Debt	9,480		—		(273)		9,207
Total Available-for-Sale Debt Securities	241,771		627		(14,160)		228,238
Equity Securities:
Mutual Funds							944
Other							1,915
Total Equity Securities							2,859
Total Securities							$	231,097

	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(Dollars in thousands)
Available-for-Sale Debt Securities:
U.S. Government Agencies	$	53,992	$	2	$	(1,433)	$	52,561
Obligations of States and Political Subdivisions	17,951		1,004		—		18,955
Mortgage-Backed Securities - Government-Sponsored Enterprises	55,373		1,468		(282)		56,559
Collateralized Mortgage Obligations - Government Sponsored Enterprises	88,493		164		(2,074)		86,583
Corporate Debt	7,481		—		(31)		7,450
Total Available-for-Sale Debt Securities	223,290		2,638		(3,820)		222,108
Equity Securities:
Mutual Funds							990
Other							1,876
Total Equity Securities							2,866
Total Securities							$	224,974

9

The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at the dates indicated:

	March 31, 2022
	Less than 12 months					12 Months or Greater					Total
	Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses
(Dollars in thousands)
U.S. Government Agencies	3	$	11,226	$	(771)	10	$	37,985	$	(4,010)	13	$	49,211	$	(4,781)
Obligations of States and Political Subdivisions	2	1,070		(1)		—	—		—		2	1,070		(1)
Mortgage Backed Securities- Government Sponsored Enterprises	17	29,175		(1,745)		1	3,395		(318)		18	32,570		(2,063)
Collateralized Mortgage Obligations - Government Sponsored Enterprises	20	100,559		(7,042)		—	—		—		20	100,559		(7,042)
Corporate Debt	3	9,208		(273)		—	—		—		3	9,208		(273)
Total	45	$	151,238	$	(9,832)	11	$	41,380	$	(4,328)	56	$	192,618	$	(14,160)

	December 31, 2021
	Less than 12 months					12 Months or Greater					Total
	Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses		Number of Securities	Fair Value		Gross Unrealized Losses
(Dollars in thousands)
U.S. Government Agencies	5	$	17,729	$	(269)	7	$	31,830	$	(1,164)	12	$	49,559	$	(1,433)
Obligations of States and Political Subdivisions	—	—		—		—	—		—		—	—		—
Mortgage Backed Securities- Government Sponsored Enterprises	8	28,772		(282)		—	—		—		8	28,772		(282)
Collateralized Mortgage Obligations - Government Sponsored Enterprises	10	77,560		(2,074)		—	—		—		10	77,560		(2,074)
Corporate Debt	2	7,450		(31)		—	—		—		2	7,450		(31)
Total	25	$	131,511	$	(2,656)	7	$	31,830	$	(1,164)	32	$	163,341	$	(3,820)

For debt securities, the Company does not believe that any individual unrealized loss as of March 31, 2022 or December 31, 2021, represents an other-than-temporary impairment. The Company performs a review of the entire securities portfolio on a quarterly basis to identify securities that may indicate an other-than-temporary impairment. The Company’s management considers the length of time and the extent to which the fair value has been less than cost, and the financial condition of the issuer. The

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securities that are temporarily impaired at March 31, 2022 and December 31, 2021 relate principally to changes in market interest rates subsequent to the acquisition of the specific securities. The Company does not intend to sell, and it is not more likely than not that it will be required to sell any of the securities in an unrealized loss position before recovery of its amortized cost or maturity of the security.

Securities available-for-sale with a fair value of $147.4 million and $121.0 million at March 31, 2022 and December 31, 2021, respectively, are pledged to secure public deposits, short-term borrowings and for other purposes as required or permitted by law.

The following table presents the scheduled maturities of debt securities as of the date indicated:

	March 31, 2022
	Amortized Cost		Fair Value
(Dollars in thousands)
Due in One Year or Less	$	2,576	$	2,584
Due after One Year through Five Years	4,900		4,690
Due after Five Years through Ten Years	78,948		74,332
Due after Ten Years	155,347		146,632
Total	$	241,771	$	228,238

The following table presents the gross realized gain and loss on sales of debt securities, as well as gain and loss on equity securities from both sales and market adjustments for the periods indicated. All gains and losses presented in the table below are reported in Net (Loss) Gain on Securities on the Consolidated Statements of Income.

	Three Months Ended March 31,
	2022		2021
(Dollars in thousands)
Debt Securities
Gross Realized Gain	$	—	$	225
Gross Realized Loss	—		—
Net Gain on Debt Securities	$	—	$	225
Equity Securities
Net Unrealized (Loss) Gain Recognized on Securities Held	$	(7)	$	222
Net Realized Gain Recognized on Securities Sold	—		—
Net (Loss) Gain on Equity Securities	$	(7)	$	222
Net (Loss) Gain on Securities	$	(7)	$	447

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

Note 4. Loans and Allowance for Loan Losses

The Company’s loan portfolio is segmented to enable management to monitor risk and performance. Real estate loans are further segregated into three classes. Residential mortgages include those secured by residential properties and include home equity loans, while commercial mortgages consist of loans to commercial borrowers secured by commercial real estate. Construction loans typically consist of loans to build commercial buildings and acquire and develop residential real estate. The commercial and industrial segment consists of loans to finance the activities of commercial customers. The consumer segment consists primarily of indirect auto loans as well as personal installment loans and personal or overdraft lines of credit.

Residential mortgage loans are typically longer-term loans and, therefore, generally present greater interest rate risk than the consumer and commercial loans. Under certain economic conditions, housing values may decline, which may increase the risk that the collateral values are not sufficient.

Commercial real estate loans generally present a higher level of credit risk than loans secured by residences. This greater risk is due to several factors, including the concentration of principal in a limited number of loans and borrowers, the effect of general

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economic conditions on income-producing properties, and the increased difficulty in evaluating and monitoring these types of loans. Furthermore, the repayment of commercial real estate loans is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced (for example, if leases are not obtained or renewed, a bankruptcy court modifies a lease term, or a major tenant is unable to fulfill its lease obligations), the borrower’s ability to repay the loan may be impaired.

Construction loans are originated to individuals to finance the construction of residential dwellings and are also originated for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses. Construction loans generally provide for the payment of interest only during the construction phase, which is usually 12 to 18 months. At the end of the construction phase, the loan generally converts to a permanent residential or commercial mortgage loan. Construction loan risks include overfunding in comparison to the plans, untimely completion of work, and leasing and stabilization after project completion.

Commercial and industrial loans are generally secured by business assets, inventories, accounts receivable, etc., which present collateral risk.

Consumer loans generally have higher interest rates and shorter terms than residential mortgage loans; however, they have additional credit risk due to the type of collateral securing the loan.

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

	March 31, 2022				December 31, 2021
	Amount		Percent		Amount		Percent
(Dollars in thousands)
Real Estate:
Residential	$	317,254	31.1	%	$	320,798	31.4	%
Commercial	427,227		41.9		392,124		38.5
Construction	54,227		5.3		85,028		8.3
Commercial and Industrial	67,843		6.6		89,010		8.7
Consumer	143,422		14.1		122,152		12.0
Other	10,669		1.0		11,684		1.1
Total Loans	1,020,642		100.0	%	1,020,796		100.0	%
Allowance for Loan Losses	(11,595)				(11,582)
Loans, Net	$	1,009,047			$	1,009,214

The Small Business Administration reopened the Payroll Protection Program ("PPP") the week of January 11, 2021 accepting applications for both First Draw and Second Draw PPP Loans.

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

Net unamortized PPP loan origination fees as of March 31, 2022 and December 31, 2021 were $274,000 and $678,000 , respectively. Net PPP loan origination fees earned were $404,000 and $535,000for the three months ended March 31, 2022 and March 31, 2021, respectively. All PPP loans are classified as commercial and industrial loans held for investment. No allowance for loan loss was allocated to the PPP loan portfolio due to the Bank complying with the lender obligations that ensure SBA guarantee.

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

The Company uses an eight-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first four categories are not considered criticized and are aggregated as “pass” rated. The criticized rating categories used by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are below average quality, resulting in an undue credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans classified as doubtful have all the weaknesses inherent in loans classified as substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as loss are considered uncollectible and of such little value that continuance as an asset is not warranted.

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The following table presents loans summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system as of the dates indicated. At March 31, 2022 and December 31, 2021, there were no loans in the criticized category of Loss within the internal risk rating system.

	March 31, 2022
	Pass		Special Mention		Substandard		Doubtful		Total
(Dollars in Thousands)
Real Estate:
Residential	$	314,174	$	839	$	2,241	$	—	$	317,254
Commercial	390,395		28,217		8,615		—		427,227
Construction	38,724		12,971		2,532		—		54,227
Commercial and Industrial	54,085		11,774		1,400		584		67,843
Consumer	143,326		—		96		—		143,422
Other	10,603		66		—		—		10,669
Total Loans	$	951,307	$	53,867	$	14,884	$	584	$	1,020,642

	December 31, 2021
	Pass		Special Mention		Substandard		Doubtful		Total
(Dollars in Thousands)
Real Estate:
Residential	$	317,964	$	845	$	1,989	$	—	$	320,798
Commercial	355,895		27,168		9,061		—		392,124
Construction	69,441		13,035		2,552		—		85,028
Commercial and Industrial	72,584		14,463		1,451		512		89,010
Consumer	122,136		—		16		—		122,152
Other	11,616		68		—		—		11,684
Total Loans	$	949,636	$	55,579	$	15,069	$	512	$	1,020,796

The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of the dates indicated.

	March 31, 2022
	Loans Current		30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Non- Accrual		Total Loans
(Dollars in Thousands)
Real Estate:
Residential	$	313,306	$	2,106	$	191	$	—	$	2,297	$	1,651	$	317,254
Commercial	425,202		—		—		—		—		2,025		427,227
Construction	54,227		—		—		—		—		—		54,227
Commercial and Industrial	66,202		101		—		—		101		1,540		67,843
Consumer	142,931		338		57		—		395		96		143,422
Other	10,669		—		—		—		—		—		10,669
Total Loans	$	1,012,537	$	2,545	$	248	$	—	$	2,793	$	5,312	$	1,020,642

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	December 31, 2021
	Loans Current		30-59 Days Past Due		60-89 Days Past Due		90 Days Or More Past Due		Total Past Due		Non- Accrual		Total Loans
(Dollars in Thousands)
Real Estate:
Residential	$	317,583	$	1,805	$	17	$	—	$	1,822	$	1,393	$	320,798
Commercial	389,522		544		—		—		544		2,058		392,124
Construction	85,028		—		—		—		—		—		85,028
Commercial and Industrial	87,407		107		—		—		107		1,496		89,010
Consumer	121,636		419		81		—		500		16		122,152
Other	11,684		—		—		—		—		—		11,684
Total Loans	$	1,012,860	$	2,875	$	98	$	—	$	2,973	$	4,963	$	1,020,796

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

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The following table sets forth the amounts and categories of nonperforming assets at the dates indicated. Included in nonperforming loans and assets are troubled debt restructurings (“TDRs”), which are loans whose contractual terms have been restructured in a manner which grants a concession to a borrower experiencing financial difficulties. Nonaccrual TDRs are included in their specific loan category in the nonaccrual loans section. Nonperforming loans do not include loans modified under Section 4013 of the CARES Act and interagency guidance as further explained below.

	March 31, 2022			December 31, 2021
(Dollars in Thousands)
Nonaccrual Loans:
Real Estate:
Residential	$	1,651		$	1,393
Commercial	2,025			2,058
Construction	—			—
Commercial and Industrial	1,540			1,496
Consumer	96			16
Total Nonaccrual Loans	5,312			4,963
Accruing Loans Past Due 90 Days or More:
Consumer	—			—
Total Accruing Loans Past Due 90 Days or More	—			—
Total Nonaccrual Loans and Accruing Loans Past Due 90 Days or More	5,312			4,963
Troubled Debt Restructurings, Accruing:
Real Estate
Residential	603			613
Commercial	1,371			1,674
Commercial and Industrial	12			16
Total Troubled Debt Restructurings, Accruing	1,986			2,303
Total Nonperforming Loans	7,298			7,266
Other Real Estate Owned:
Residential	—			36
Commercial	—			—
Total Other Real Estate Owned	—			36
Total Nonperforming Assets	$	7,298		$	7,302
Nonperforming Loans to Total Loans	0.72		%	0.71		%
Nonperforming Assets to Total Assets	0.51			0.51

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

As of March 31, 2022 , the Company had one TDR loan in forbearance that totaled $128,000. There were no modifications to troubled debt restructurings during the three months ended March 31, 2022. As of December 31, 2021, there were no loans in forbearance.

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

	March 31, 2022
	Recorded Investment		Related Allowance		Unpaid Principal Balance		Average Recorded Investment		Interest Income Recognized
(Dollars in thousands)
With No Related Allowance Recorded:
Real Estate:
Residential	$	1,118			$	1,123	$	1,124	$	11
Commercial	9,525				9,609		9,626		73
Construction	540				540		540		4
Commercial and Industrial	1,900				2,227		1,942		5
Total With No Related Allowance Recorded	$	13,083	$	—	$	13,499	$	13,232	$	93
With A Related Allowance Recorded:
Real Estate:
Residential	$	—	$	—	$	—	$	—	$	—
Commercial	—		—		—		—		—
Construction	1,992		84		1,992		2,001		22
Commercial and Industrial	96		96		96		146		2
Total With A Related Allowance Recorded	$	2,088	$	180	$	2,088	$	2,147	$	24
Total Impaired Loans:
Real Estate:
Residential	$	1,118	$	—	$	1,123	$	1,124	$	11
Commercial	9,525		—		9,609		9,626		73
Construction	2,532		84		2,532		2,541		26
Commercial and Industrial	1,996		96		2,323		2,088		7
Total Impaired Loans	$	15,171	$	180	$	15,587	$	15,379	$	117

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	December 31, 2021
	Recorded Investment		Related Allowance		Unpaid Principal Balance		Average Recorded Investment		Interest Income Recognized
(Dollars in thousands)
With No Related Allowance Recorded:
Real Estate:
Residential	$	1,133			$	1,137	$	1,158	$	46
Commercial	9,733				9,787		27,207		927
Construction	540				540		887		34
Commercial and Industrial	1,979				2,286		3,230		49
Total With No Related Allowance Recorded	$	13,385	$	—	$	13,750	$	32,482	$	1,056
With A Related Allowance Recorded:
Real Estate:
Residential	$	—	$	—	$	—	$	—	$	—
Commercial	266		195		266		421		19
Construction	2,013		104		2,013		169		7
Commercial and Industrial	—		—		—		1,316		29
Total With A Related Allowance Recorded	$	2,279	$	299	$	2,279	$	1,906	$	55
Total Impaired Loans
Real Estate:
Residential	$	1,133	$	—	$	1,137	$	1,158	$	46
Commercial	9,999		195		10,053		27,628		946
Construction	2,553		104		2,553		1,056		41
Commercial and Industrial	1,979		—		2,286		4,546		78
Total Impaired Loans	$	15,664	$	299	$	16,029	$	34,388	$	1,111

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

The following tables present the activity in the allowance for loan losses summarized by primary segments and segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for potential impairment at the dates and for the periods indicated.

	Real Estate Residential		Real Estate Commercial		Real Estate Construction		Commercial and Industrial		Consumer		Other		Unallocated		Total
(Dollars in thousands)
December 31, 2021	$	1,420	$	5,960	$	1,249	$	1,151	$	1,050	$	—	$	752	$	11,582
Charge-offs	(17)		—		—		—		(20)		—		—		(37)
Recoveries	2		—		—		11		37		—		—		50
Provision (Recovery)	(20)		(5,449)		(448)		3,406		921		—		1,590		—
March 31, 2022	$	1,385	$	511	$	801	$	4,568	$	1,988	$	—	$	2,342	$	11,595

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	March 31, 2022
	Real Estate Residential		Real Estate Commercial		Real Estate Construction		Commercial and Industrial		Consumer		Other		Unallocated		Total
(Dollars in thousands)
Individually Evaluated for Impairment	$	—	$	—	$	84	$	96	$	—	$	—	$	—	$	180
Collectively Evaluated for Potential Impairment	$	1,385	$	511	$	717	$	4,472	$	1,988	$	—	$	2,342	$	11,415

	December 31, 2021
	Real Estate Residential		Real Estate Commercial		Real Estate Construction		Commercial and Industrial		Consumer		Other		Unallocated		Total
(Dollars in thousands)
Individually Evaluated for Impairment	$	—	$	195	$	104	$	—	$	—	$	—	$	—	$	299
Collectively Evaluated for Potential Impairment	$	1,420	$	5,765	$	1,145	$	1,151	$	1,050	$	—	$	752	$	11,283

	Real Estate Residential		Real Estate Commercial		Real Estate Construction		Commercial and Industrial		Consumer		Other		Unallocated		Total
(Dollars in thousands)
December 31, 2020	$	2,249	$	6,010	$	889	$	1,423	$	1,283	$	—	$	917	$	12,771
Charge-offs	—		—		—		—		(95)		—		—		(95)
Recoveries	9		—		—		12		28		—		—		49
Provision (Recovery)	(283)		(93)		50		108		(113)		—		331		—
March 31, 2021	$	1,975	$	5,917	$	939	$	1,543	$	1,103	$	—	$	1,248	$	12,725

	March 31, 2021
	Real Estate Residential		Real Estate Commercial		Real Estate Construction		Commercial and Industrial		Consumer		Other		Unallocated		Total
(Dollars in thousands)
Individually Evaluated for Impairment	$	—	$	269	$	—	$	502	$	—	$	—	$	—	$	771
Collectively Evaluated for Potential Impairment	$	1,975	$	5,648	$	939	$	1,041	$	1,103	$	—	$	1,248	$	11,954

The following table presents the major classifications of loans summarized by individually evaluated for impairment and collectively evaluated for potential impairment as of the dates indicated. At March 31, 2022 and December 31, 2021, commercial and industrial loans include $8.2 million and $24.5 million, respectively, of PPP loans collectively evaluated for potential

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impairment. No allowance for loan loss was allocated to the PPP loan portfolio due to the Bank complying with the lender obligations that ensure SBA guarantee.

	March 31, 2022
	Real Estate Residential		Real Estate Commercial		Real Estate Construction		Commercial and Industrial		Consumer		Other		Total
(Dollars in thousands)
Individually Evaluated for Impairment	$	1,118	$	9,525	$	2,532	$	1,996	$	—	$	—	$	15,171
Collectively Evaluated for Potential Impairment	316,136		417,702		51,695		65,847		143,422		10,669		1,005,471
Total Loans	$	317,254	$	427,227	$	54,227	$	67,843	$	143,422	$	10,669	$	1,020,642

	December 31, 2021
	Real Estate Residential		Real Estate Commercial		Real Estate Construction		Commercial and Industrial		Consumer		Other		Total
(Dollars in thousands)
Individually Evaluated for Impairment	$	1,133	$	9,999	$	2,553	$	1,979	$	—	$	—	$	15,664
Collectively Evaluated for Potential Impairment	319,665		382,125		82,475		87,031		122,152		11,684		1,005,132
Total Loans	$	320,798	$	392,124	$	85,028	$	89,010	$	122,152	$	11,684	$	1,020,796

The following table presents changes in the accretable discount on the loans acquired at fair value at the dates indicated.

	Accretable Discount
(Dollars in Thousands)
December 31, 2021	$	726
Accretable Yield	(56)
March 31, 2022	$	670

Note 5. Short-Term Borrowings

Borrowings with original maturities of one year or less are classified as short-term and may consist of borrowings with the Federal Home Loan Bank ("FHLB"), securities sold under agreements to repurchase or borrowings on revolving lines of credit with the Federal Reserve Bank or other correspondent banks. Securities sold under repurchase agreements are comprised of customer repurchase agreements, which are overnight sweep accounts with next-day maturities utilized by commercial customers to earn interest on their funds. Securities are pledged as collateral under these agreements in an amount at least equal to the outstanding balance and the collateral pledging requirements are monitored on a daily basis.

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The following table sets forth the components of short-term borrowings as of the dates indicated.

	March 31, 2022				December 31, 2021
	Amount		Weighted Average Rate		Amount		Weighted Average Rate
(Dollars in thousands)
Securities Sold Under Agreements to Repurchase:
Balance at Period End	$	39,219	0.17	%	$	39,266	0.17	%
Average Balance Outstanding During the Period	37,884		0.20		43,988		0.22
Maximum Amount Outstanding at any Month End	39,219				52,777
Securities Collaterizing the Agreements at Period-End:
Carrying Value	58,757				59,867
Market Value	54,703				59,339

Note 6. Fair Value Disclosure

FASB ASC 820 “Fair Value Measurement” defines fair value and provides the framework for measuring fair value and required disclosures about fair value measurements. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability at the transaction date. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used in valuation methods to determine fair value.

The three levels of fair value hierarchy are as follows:

Level 1 –    Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets. These generally provide the most reliable evidence and are used to measure fair value whenever available.

Level 2 –    Fair value is based on significant inputs, other than Level 1 inputs, that are observable either directly or indirectly for substantially the full term of the asset through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets, quoted market prices in markets that are not active for identical or similar assets, and other observable inputs.

Level 3 –    Fair value is based on significant unobservable inputs. Examples of valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows, and other similar techniques.

This hierarchy requires the use of observable market data when available. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement.

The following table presents the financial assets measured at fair value on a recurring basis and reported on the Consolidated Statements of Financial Condition as of the dates indicated, by level within the fair value hierarchy. The majority of the Company’s securities are included in Level 2 of the fair value hierarchy. Fair values for Level 2 securities were primarily determined by a third-party pricing service using both quoted prices for similar assets, when available, and model-based valuation techniques that derive fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. The standard inputs that are normally used include benchmark yields of like securities, reportable trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. There were no transfers into or out of Level 3 during the three months ended March 31, 2022 or year ended December 31, 2021.

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	Fair Value Hierarchy	March 31 2022		December 31 2021
(Dollars in thousands)
Securities:
Available-for-Sale Debt Securities
U.S. Government Agencies	Level 2	$	49,211	$	52,561
Obligations of States and Political Subdivisions	Level 2	18,393		18,955
Mortgage-Backed Securities - Government-Sponsored Enterprises	Level 2	50,619		56,559
Collateralized Mortgage Obligations - Government Sponsored Enterprises	Level 2	100,808		86,583
Corporate Debt	Level 2	9,207		7,450
Total Available-for-Sale Debt Securities		228,238		222,108
Equity Securities
Mutual Funds	Level 1	944		990
Other	Level 1	1,915		1,876
Total Equity Securities		2,859		2,866
Total Securities		$	231,097	$	224,974

The following table presents the financial assets on the Consolidated Statements of Financial Condition measured at fair value on a nonrecurring basis as of the dates indicated by level within the fair value hierarchy for only those nonrecurring assets that had a fair value below the carrying amount. The table also presents the significant unobservable inputs used in the fair value measurements.

Financial Asset	Fair Value Hierarchy	March 31, 2022		Valuation Techniques	Significant Unobservable Inputs	Range					Weighted Average
(Dollars in thousands)
Impaired Loans Individually Assessed	Level 3	$	1,908	Appraisal of Collateral (1)	Appraisal Adjustments (2)	0	%	to	50	%	15.8%
Mortgage Servicing Rights	Level 3	178		Discounted Cash Flow	Discount Rate	9	%	to	11	%	10.3%
					Prepayment Speed	9	%	to	16	%	10.8%

Financial Asset	Fair Value Hierarchy	December 31, 2021		Valuation Techniques	Significant Unobservable Inputs	Range					Weighted Average
(Dollars in thousands)
Impaired Loans Individually Assessed	Level 3	$	1,980	Appraisal of Collateral (1)	Appraisal Adjustments (2)	0	%	to	50	%	15.8%
Mortgage Servicing Rights	Level 3	141		Discounted Cash Flow	Discount Rate	9	%	to	11	%	10.2%
					Prepayment Speed	12	%	to	27	%	16.0%
OREO	Level 3	36		Appraisal of Collateral (1)	Liquidation Expenses (2)	10	%	to	30	%	26.6%

(1)Fair value is generally determined through independent appraisals of the underlying collateral, which may include various Level 3 inputs, which are not identifiable.

(2)Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of appraisal adjustments and liquidation expense are presented as a percent of the appraisal.

Impaired loans are evaluated when a loan is identified as impaired and valued at the lower of cost or fair value at that time. Impaired loans that are collateral dependent are written down to fair value through the establishment of specific reserves. Fair value is measured based on the value of the collateral securing these loans and is classified as Level 3 in the fair value hierarchy. At March 31, 2022 and December 31, 2021, the fair value of impaired loans consists of the loan balances of $2.1 and $2.3 million, respectively, less their specific valuation allowances of $180,000 and $299,000, respectively.

The fair value of mortgage servicing rights ("MSRs") is determined by calculating the present value of estimated future net servicing cash flows, considering expected mortgage loan prepayment rates, discount rates, servicing costs and other economic

21

factors, which are determined based on current market conditions. The expected rate of mortgage loan prepayments is the most significant factor driving the value of MSRs. MSRs are considered impaired if the carrying value exceeds fair value. Since the valuation model includes significant unobservable inputs as listed above, MSRs are classified as Level 3. MSRs are reported in Other Assets in the Consolidated Statements of Financial Condition and are amortized into mortgage servicing income in Other Income in the Consolidated Statements of Income.

OREO properties are evaluated at the time of acquisition and recorded at fair value, less estimated selling costs. After acquisition, OREO is recorded at the lower of cost or fair value, less estimated selling costs. The fair value of an OREO property is determined from a qualified independent appraisal and is classified as Level 3 in the fair value hierarchy.

Financial instruments are defined as cash, evidence of an ownership in an entity, or a contract which creates an obligation or right to receive or deliver cash or another financial instrument from/to a second entity on potentially favorable or unfavorable terms.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If no readily available market exists, the fair value estimates for financial instruments should be based upon management’s judgment regarding current economic conditions, interest rate risk, expected cash flows, future estimated losses and other factors, as determined through various option pricing formulas or simulation modeling. As many of these assumptions result from judgments made by management based upon estimates which are inherently uncertain, the resulting estimated fair values may not be indicative of the amount realizable in the sale of a particular financial instrument. In addition, changes in the assumptions on which the estimated fair values are based may have significant impact on the resulting estimated fair values.

As certain assets such as deferred tax assets and premises and equipment are not considered financial instruments, the estimated fair value of financial instruments would not represent the full value of the Company.

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

		March 31, 2022				December 31, 2021
	Fair Value Hierarchy	Carrying Value		Fair Value		Carrying Value		Fair Value
(Dollars in thousands)
Financial Assets:
Cash and Due From Banks:
Interest Bearing	Level 1	$	55,233	$	55,233	$	63,968	$	63,968
Non-Interest Bearing	Level 1	68,355		68,355		55,706		55,706
Securities	See Above	231,097		231,097		224,974		224,974
Loans, Net	Level 3	1,009,047		1,014,050		1,009,214		1,039,980
Restricted Stock	Level 2	3,428		3,428		3,403		3,403
Mortgage Servicing Rights	Level 3	716		892		730		773
Accrued Interest Receivable	Level 2	3,256		3,256		3,350		3,350
Financial Liabilities:
Deposits	Level 2	1,250,313		1,249,804		1,226,613		1,227,653
Short-Term Borrowings	Level 2	39,219		39,219		39,266		39,266
Other Borrowed Funds
FHLB Borrowings	Level 2	3,000		3,000		3,000		3,000
Subordinated Debt	Level 2	14,607		14,749		14,601		15,000
Accrued Interest Payable	Level 2	546		546		486		486

Note 7. Commitments and Contingent Liabilities

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business primarily to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby and performance letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the Consolidated Statements of Financial Condition. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby and performance letters of credit written is represented by the contractual amount of

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

Commitments and conditional obligations are evaluated the same as on-balance-sheet instruments but do not have a corresponding reserve recorded. The Company’s opinion on not implementing a corresponding reserve for off-balance-sheet instruments is supported by historical factors of no losses recorded due to these items. The Company is continually evaluating these items for credit quality and any future need for the corresponding reserve.

The following table presents the unused and available credit balances of financial instruments whose contracts represent credit risk at the dates indicated.

	March 31, 2022		December 31, 2021
(Dollars in thousands)
Standby Letters of Credit	$	110	$	110
Performance Letters of Credit	1,918		2,873
Construction Mortgages	49,823		55,597
Personal Lines of Credit	7,090		7,055
Overdraft Protection Lines	5,596		5,709
Home Equity Lines of Credit	22,171		21,187
Commercial Lines of Credit	74,665		83,316
Total Commitments	$	161,373	$	175,847

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee by the customer. Because many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties.

Performance letters of credit represent conditional commitments issued by the Company to guarantee the performance of a customer to a third party. These instruments are issued primarily to support bid or performance-related contracts. The coverage period for these instruments is typically a one-year period with an annual renewal option subject to prior approval by management. Fees earned from the issuance of these letters are recognized upon expiration of the letter. For secured letters of credit, the collateral is typically Company deposit instruments or customer business assets.

Note 8. Leases

The Company evaluates contracts at commencement to determine if a lease is present. The Company’s lease contracts are all classified as operating leases and create operating right-of-use (“ROU”) assets and corresponding lease liabilities on the Consolidated Statements of Financial Condition. The leases are primarily ROU assets of land and building for branch and loan production locations. ROU assets are reported in Accrued Interest Receivable and Other Assets and the related lease liabilities in Accrued Interest Payable and Other Liabilities on the Consolidated Statements of Financial Condition.

The following tables present the lease expense, ROU assets, weighted average term, discount rate and maturity analysis of lease liabilities for operating leases for the periods and dates indicated.

	Three Months Ended March 31,
	2022		2021
(Dollars in thousands)
Operating Lease Expense	$	82	$	95
Short-Term Lease Expense	—		8
Variable Lease Expense	7		8
Total Lease Expense	$	89	$	111

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	March 31, 2022			December 31, 2021
(Dollars in thousands)
Operating Leases:
ROU Assets	$	1,776		$	674
Weighted Average Lease Term in Years	9.02			7.33
Weighted Average Discount Rate	2.47		%	2.51		%

	March 31, 2022
(Dollars in thousands)
Maturity Analysis:
Due in One Year	$	325
Due After One Year to Two Years	268
Due After Two Years to Three Years	228
Due After Three Years to Four Years	201
Due After Four to Five Years	169
Due After Five Years	1,050
Total	$	2,241
Less: Present Value Discount	265
Lease Liabilities	$	1,976

During the three months ended March 31, 2022, the Company entered into a new lease agreement for the McMurray, PA branch, for a 10-year term ending March 31, 2032. The increase to the operating Right of Use Asset and corresponding lease liability is approximately $1.17 million.

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Note 9. Other Noninterest Expense

The details of other noninterest expense for the Company’s Consolidated Statements of (Loss) Income for the periods indicated are as follows:

	Three Months Ended March 31,
	2022		2021
(Dollars in thousands)
Non-Employee Compensation	$	131	$	148
Printing and Supplies	80		99
Postage	103		63
Telephone	139		188
Charitable Contributions	42		15
Dues and Subscriptions	58		50
Loan Expenses	127		92
Meals and Entertainment	30		34
Travel	39		22
Training	18		17
Bank Assessment	47		44
Insurance	62		60
Miscellaneous	123		150
Total Other Noninterest Expense	$	999	$	982

Note 10. Segment and Related Information

At March 31, 2022, the Company’s business activities were comprised of two operating segments, which are community banking and insurance brokerage services. CB Financial is the parent company of the Bank and Exchange Underwriters, a wholly owned subsidiary of the Bank. Exchange Underwriters has an independent board of directors from the Company and is managed separately from the banking and related financial services that the Company offers. Exchange Underwriters is an independent insurance agency that offers property, casualty, commercial liability, surety and other insurance products.

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The following is a table of selected financial data for the Company’s subsidiaries and consolidated results at the dates and for the periods indicated.

	Community Bank		Exchange Underwriters, Inc.		CB Financial Services, Inc.		Net Eliminations		Consolidated
(Dollars in thousands)
March 31, 2022
Assets	$	1,439,251	$	5,584	$	136,994	$	(143,159)	$	1,438,670
Liabilities	1,320,826		1,645		14,838		(20,795)		1,316,514
Stockholders' Equity	118,425		3,939		122,156		(122,364)		122,156
December 31, 2021
Assets	$	1,425,588	$	5,110	$	147,829	$	(153,048)	$	1,425,479
Liabilities	1,299,325		1,731		14,705		(23,406)		1,292,355
Stockholders' Equity	126,263		3,379		133,124		(129,642)		133,124
Three Months Ended March 31, 2022
Interest and Dividend Income	$	10,596	$	1	$	1,279	$	(1,260)	$	10,616
Interest Expense	567		—		156		—		723
Net Interest and Dividend Income	10,029		1		1,123		(1,260)		9,893
Provision for Loan Losses	—		—		—		—		—
Net Interest and Dividend Income After Provision for Loan Losses	10,029		1		1,123		(1,260)		9,893
Noninterest Income	777		1,797		39		—		2,613
Noninterest Expense	7,645		1,007		4		—		8,656
Undistributed Net Income of Subsidiary	561		—		1,852		(2,413)		—
Income Before Income Tax Expense (Benefit)	3,722		791		3,010		(3,673)		3,850
Income Tax Expense (Benefit)	610		230		(37)		—		803
Net Income	$	3,112	$	561	$	3,047	$	(3,673)	$	3,047

Three Months Ended March 31, 2021
Interest and Dividend Income	$	10,971	$	1	$	1,320	$	(1,304)	$	10,988
Interest Expense	1,011		—		—		—		1,011
Net Interest and Dividend Income	9,960		1		1,320		(1,304)		9,977
Provision for Loan Losses	—		—		—		—		—
Net Interest and Dividend Income After Provision for Loan Losses	9,960		1		1,320		(1,304)		9,977
Noninterest Income	1,343		1,591		240		—		3,174
Noninterest Expense	8,390		1,001		4		—		9,395
Undistributed Net Income of Subsidiary	407		—		1,301		(1,708)		—
Income Before Income Tax Expense	3,320		591		2,857		(3,012)		3,756
Income Tax Expense	715		184		12		—		911
Net Income	$	2,605	$	407	$	2,845	$	(3,012)	$	2,845

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Note 11. Stock Based Compensation

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

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years
Outstanding Options at December 31, 2021	207,641	$	24.01	4.8
Granted	85,465	25.95
Exercised	(7,500)	22.25
Forfeited	(68)	30.75
Outstanding Options at March 31, 2022	285,538	$	24.64	6.1
Exercisable Options at March 31, 2022	179,515	$	24.25	4.2
	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Service Period in Years
Nonvested Options March 31, 2022	106,023	$	25.30	9.4
Summary of Significant Assumptions for Newly Issued Stock Options
Expected Term in Years				6.5
Expected Volatility				28.7		%
Expected Dividends				$	0.96
Risk Free Rate of Return				1.57		%
Weighted Average Grant Date Fair Value (per share)				$	4.90

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

	Number of Shares	Weighted Average Grant Date Fair Value Price		Weighted Average Remaining Service Period in Years
Nonvested Restricted Stock at December 31, 2021	56,140	$	23.90	5.3
Granted	20,765	26.25
Vested	—	—
Forfeited	(200)	20.38
Nonvested Restricted Stock at March 31, 2022	76,705	$	24.55	5.0

The Company recognizes expense over a five-year vesting period for the restricted stock awards and stock options. Stock-based compensation expense related to restricted stock awards and stock options was $130,000 and $121,000 for the three months ended March 31, 2022 and 2021, respectively.

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

Intrinsic value represents the amount by which the fair value of the underlying stock at March 31, 2022 and December 31, 2021 exceeds the exercise price of the stock options. The intrinsic value of stock options was $273,000 and $296,000 at March 31, 2022 and December 31, 2021, respectively.

At March 31, 2022 and December 31, 2021, respectively, there were 362,622 and 500,000 shares available under the Plan to be issued in connection with the exercise of stock options, and 145,049 and 200,000 shares that may be issued as restricted stock awards or units. Restricted stock awards or units may be issued above this amount provided that the number of shares reserved for stock options is reduced by two and one-half shares for each restricted stock award or unit share granted.

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Note 12. Subsequent Events

Stock Repurchase Program

On April 21, 2022, the Company announced a program to repurchase up to $10 million of the Company’s outstanding shares of common stock. Based on the Company’s closing stock price on April 19, 2022, the repurchase program, if fully completed, would encompass 433,463 shares, or approximately 8.4% the shares currently outstanding.

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, 2021.

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;

•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;

•Government action in response to the COVID-19 pandemic and its effects on the Company's business and that of the Company's customers;

•Our ability to realize the expected cost savings and other efficiencies related to our branch optimization and operational efficiency initiatives;

•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.

Many of these risks and uncertainties have been elevated by and may continue to be elevated by the COVID-19 pandemic. The ability to predict the impact of the ongoing COVID-19 pandemic on the Company’s future operating results with any precision is difficult and depends on many factors beyond our control.

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 11 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

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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. Property and casualty, commercial liability, surety and other insurance products are offered through Exchange Underwriters, Inc., the Bank’s wholly owned subsidiary that is a full-service, independent insurance agency located in Washington County.

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, 2022, compared to the financial condition as of December 31, 2021 and the consolidated results of operations for the three months ended March 31, 2022 compared to the three months ended March 31, 2021.

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 provisions for loan losses, noninterest income and noninterest expense. Noninterest income consists primarily of fees and service charges on deposit accounts, insurance commissions, 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 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 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 and securities 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.

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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,
	2022			2021
(Dollars in thousands)
Interest Income (GAAP)	$	10,616		$	10,988
Adjustment to FTE Basis	40			40
Interest Income (FTE) (Non-GAAP)	10,656			11,028
Interest Expense (GAAP)	723			1,011
Net Interest Income (FTE) (Non-GAAP)	$	9,933		$	10,017
Net Interest Rate Spread (GAAP)	2.98		%	2.91		%
Adjustment to FTE Basis	0.01			0.01
Net Interest Rate Spread (FTE) (Non-GAAP)	2.99			2.92
Net Interest Margin (GAAP)	3.08		%	3.04		%
Adjustment to FTE Basis	0.02			0.01
Net Interest Margin (FTE) (Non-GAAP)	3.10			3.05

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.

	March 31, 2022			December 31, 2021
(Dollars in thousands)
Allowance for Loan Losses (Numerator)	$	11,595		$	11,582
Total Loans	1,020,642			$	1,020,796
PPP Loans	(8,242)			(24,523)
Total Loans, Excluding PPP Loans (Non-GAAP) (Denominator)	$	1,012,400		$	996,273
Allowance for Loan Losses to Total Loans (GAAP)	1.14		%	1.13		%
Allowance for Loan Losses to Total Loans, Excluding PPP Loans (Non-GAAP)	1.15		%	1.16		%

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, 2022		December 31, 2021
(Dollars in thousands, except share and per share data)
Stockholders' Equity (GAAP)	$	122,156	$	133,124
Goodwill and Other Intangible Assets, Net	(14,582)		(15,027)
Tangible Common Equity or Tangible Book Value (Non-GAAP) (Numerator)	$	107,574	$	118,097
Common Shares Outstanding (Denominator)	5,156,897		5,260,672
Book Value per Common Share (GAAP)	$	23.69	$	25.31
Tangible Book Value per Common Share (Non-GAAP)	$	20.86	$	22.45

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Consolidated Statements of Financial Condition Analysis

Assets. Total assets increased $13.2 million, or 0.9%, to $1.44 billion at March 31, 2022, compared to $1.43 billion at December 31, 2021. The change is primarily due to increases in cash and due from banks and in securities.

Cash and Securities

•Cash and due from banks increased $3.9 million, or 3.3%, to $123.6 million at March 31, 2022, compared to $119.7 million at December 31, 2021. The change is primarily due to an increase in deposits as further described below in the Liabilities section. The increase was partially offset by purchases of securities detailed in the below Securities section.

•Securities increased $6.1 million, or 2.7%, to $231.1 million at March 31, 2022, compared to $225.0 million at December 31, 2021. Current period activity included $26.8 million of purchases and $8.3 million of paydowns. The purchases were made to earn a higher yield on excess cash. In addition, there was a $12.4 million decrease in the market value of the debt securities portfolio due primarily to increases in market interest rates and a $7,000 loss in market value in the equity securities portfolio, which is primarily comprised of bank stocks.

Payroll Protection Program (“PPP”) Update

•PPP loans decreased $16.3 million to $8.2 million at March 31, 2022 compared to $24.5 million at December 31, 2021. $274,000 of net PPP loan origination fees were unearned at March 31, 2022 compared to $678,000 at December 31, 2021. $404,000 of net PPP loan origination fees were recognized for the three months ended March 31, 2022 compared to $321,000 for the three months ended December 31, 2021.

Loans, Allowance for Loan Losses and Credit Quality

•Total loans held for investment decreased $154,000 or 0.02%, to $1.02 billion at March 31, 2022 compared to $1.02 billion at December 31, 2021. Excluding the net decline of $16.3 million in PPP loans in the current period, loans increased $16.1 million. Average loans for the three months ended March 31, 2022 increased $4.4 million compared to the three months ended December 31, 2021. An increase in consumer loans was the primary driver in the average balance change, offset by increased payoffs in residential and commercial and industrial loans.

•The allowance for loan losses was $11.6 million at both March 31, 2022 and December 31, 2021. As a result, the allowance for loan losses to total loans was 1.14% at March 31, 2022 compared to 1.13% at December 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.15% at March 31, 2022 compared to 1.16% at December 31, 2021. The lack of change in the allowance for loan losses was primarily due to consistent loan balances between the periods and no significant changes in qualitative factors.

•Net recoveries for the three months ended March 31, 2022 were $13,000, or 0.01% of average loans on an annualized basis. Net charge-offs for the three months ended March 31, 2021 were $46,000, or 0.02% of average loans on an annualized basis.

•Nonperforming loans, which includes nonaccrual loans, accruing loans past due 90 days or more, and accruing loans that are considered troubled debt restructurings, were $7.3 million at March 31, 2022 compared to $7.3 million at December 31, 2021. Nonperforming loans to total loans ratio was 0.72% at March 31, 2022 compared to 0.71% at December 31, 2021.

Other

•Intangible Assets decreased $445,000 to $4.9 million at March 31, 2022 compared to $5.3 million at December 31, 2021 due to amortization expense of $445,000 recognized during the period.

•Accrued Interest Receivable and Other Assets increased $3.7 million, or 28.8% to $16.5 million at March 31, 2022, compared to $12.9 million at December 31, 2021 This change is primarily driven by deferred taxes as a result of the increase in market interest rates and the resulting decrease in the market value of the portfolio.

•There was one loan in forbearance at March 31, 2022 totaling $128,000, compared to no loans in forbearance at December 31, 2021.

Liabilities. Total liabilities increased $24.2 million, or 1.9%, to $1.32 billion at March 31, 2022 compared to $1.29 billion at December 31, 2021.

Deposits

•Total deposits increased $23.7 million to $1.25 billion as of March 31, 2022 compared to $1.23 billion at December 31, 2021. Noninterest bearing demand deposits, NOW accounts and savings accounts increased $14.3 million, $7.9 million and $8.1 million, respectively, partially offset by a decrease of $7.5 million in time deposits. Annualized deposit growth

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rate was 7.7%. Average total deposits decreased $54.6 million, primarily in time deposits, for the three months ended March 31, 2022 compared to the three months ended December 31, 2021.

Borrowed Funds

•Short-term borrowings decreased $47,000, or 0.12%, to $39.2 million at March 31, 2022, compared to $39.3 million at December 31, 2021. At March 31, 2022 and December 31, 2021, short-term borrowings were comprised entirely of securities sold under agreements to repurchase, 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.

Stockholders’ Equity. Stockholders’ equity decreased $11.0 million, or 8.3%, to $122.2 million at March 31, 2022, compared to $133.1 million at December 31, 2021.

•Net income was $3.0 million for the three months ended March 31, 2022.

•Accumulated other comprehensive income decreased $9.7 million primarily due to the effect of market interest rate increases on the Company’s debt securities.

•The Company declared and paid $1.2 million in dividends to common stockholders in the current period.

•The Company repurchased $3.4 million of its common stock as part of its stock repurchase program that was completed on February 15, 2022

•Book value per share (GAAP) was $23.69 at March 31, 2022 compared to $25.31 at December 31, 2021, a decrease of $1.62. Tangible book value per share (Non-GAAP) decreased $1.59, or 7.1%, to $20.86 compared to $22.45 at December 31, 2021. Refer to Explanation of Use of Non-GAAP Financial Measures in this Report.

Consolidated Results of Operations for the Three Months Ended March 31, 2022 and 2021 

Overview. Net income was $3.0 million for the three months ended March 31, 2022, an increase of $202,000 compared to net income of $2.8 million for the three months ended March 31, 2021.

Net Interest and Dividend Income. Net interest and dividend income decreased $84,000, or 0.8%, to $9.9 million for the three months ended March 31, 2022 compared to $10.0 million for the three months ended March 31, 2021. Net interest margin (FTE) (Non-GAAP) increased 5 basis points (“bps”) to 3.10% for the three months ended March 31, 2022 compared to 3.05% the three months ended March 31, 2021. Net interest margin (GAAP) increased to 3.08% for the three months ended March 31, 2022 compared to 3.04% for the three months ended March 31, 2021.

Interest and Dividend Income

•Interest and dividend income decreased $372,000, or 3.4%, to $10.6 million for the three months ended March 31, 2022 compared to $11.0 million the three months ended March 31, 2021.

◦Interest income on loans decreased $595,000, or 5.9%, to $9.6 million for the three months ended March 31, 2022 compared to $10.1 million for the three months ended March 31, 2021. The average balance of loans decreased $22.6 million and the average yield decreased 15 bps to 3.85% compared to the three months ended March 31, 2021.

◦Interest and fee income on PPP loans was $445,000 for the three months ended March 31, 2022 and contributed 13 bps to loan yield, compared to $676,000 for the three months ended March 31, 2021, which contributed 5 bps to loan yield.

◦The impact of the accretion of the credit mark on acquired loan portfolios was $56,000 for the three months ended March 31, 2022 compared to $138,000 for the three months ended March 31, 2021, or 2 bps in the current period compared to 6 bps in the prior period.

◦Interest income on taxable investment securities increased $259,000, or 40.1%, to $905,000 for the three months ended March 31, 2022 compared to $646,000 for the three months ended March 31, 2021 driven by a $93.0 million increase in average investment securities balances and 42 bps decrease in average yield.

Interest Expense

•Interest expense decreased $288,000, or 28.5%, to $723,000 for the three months ended March 31, 2022 compared to $1.0 million for the three months ended March 31, 2021.

◦Interest expense on deposits decreased $417,000, or 44.0%, to $530,000 for the three months ended March 31, 2022 compared to $947,000 for the three months ended March 31, 2021. While average interest-earning deposits decreased $38.6 million compared to the three months ended March 31, 2021, controlling the deposit cost structure as deposit balances decreased combined with non-renewal or repricing of higher-cost time deposit resulted in an 18

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bp, or 41.4%, decrease in average cost compared to the three months ended March 31, 2021. In addition, average time deposits and the related average cost decreased $55.1 million and 30 bps, respectively.

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Average Balances and Yields. The following tables present 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 securities 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,
	2022						2021
	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)	$	1,009,210	$	9,573	3.85	%	$	1,031,853	$	10,168	4.00	%
Debt Securities
Taxable	215,906		905		1.68		122,883		646		2.10
Tax Exempt	10,195		84		3.30		12,943		96		2.97
Marketable Equity Securities	2,693		22		3.27		2,632		20		3.04
Interest Bearing Deposits at Other Banks	59,296		22		0.15		157,962		36		0.09
Other Interest-Earning Assets	3,483		50		5.82		3,909		62		6.43
Total Interest-Earning Assets	1,300,783		10,656		3.32		1,332,182		11,028		3.36
Noninterest-Earning Assets	122,288						92,550
Total Assets	$	1,423,071					$	1,424,732
Liabilities and Stockholders' Equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits	$	276,603	48		0.07	%	$	259,065	77		0.12	%
Savings	243,786		19		0.03		239,850		32		0.05
Money Market	192,425		41		0.09		197,395		98		0.20
Time Deposits	132,015		422		1.30		187,114		740		1.60
Total Interest-Bearing Deposits	844,829		530		0.25		883,424		947		0.43
Short-Term Borrowings
Securities Sold Under Agreements to Repurchase	37,884		19		0.20		41,094		23		0.23
Other Borrowings	17,604		174		4.01		7,200		41		2.31
Total Interest-Bearing Liabilities	900,317		723		0.33		931,718		1,011		0.44
Noninterest-Bearing Demand Deposits	384,188						349,108
Other Liabilities	8,554						8,869
Total Liabilities	1,293,059						1,289,695
Stockholders' Equity	130,012						135,037
Total Liabilities and Stockholders' Equity	$	1,423,071					$	1,424,732
Net Interest Income (FTE) (Non-GAAP) (3)			$	9,933					$	10,017
Net Interest Rate Spread (FTE) (Non-GAAP) (3)(4)					2.99	%					2.92	%
Net Interest-Earning Assets (5)	$	400,466					$	400,464
Net Interest Margin (GAAP) (6)					3.08						3.04
Net Interest Margin (FTE) (Non-GAAP) (3)(6)					3.10						3.05
Return on Average Assets (1)					0.87						0.81
Return on Average Equity (1)					9.50						8.54
Average Equity to Average Assets					9.14						9.48
Average Interest-Earning Assets to Average Interest-Bearing Liabilities					144.48						142.98
PPP Loans	$	14,673	$	445	12.30		$	56,945	$	676	4.81

(1)Annualized based on three months ended results.

(2)Net of the allowance for loan losses, and includes nonaccrual loans with a zero yield

(3)See section entitled "Explanation of Use of Non-GAAP Financial Measures" appearing earlier in this quarterly report.

(4)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.

(5)Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(6)Net interest margin represents annualized net interest income divided by average total interest-earning assets.

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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 securities 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, 2022 Compared to Three Months Ended March 31, 2021
	Increase (Decrease) Due to
	Volume		Rate		Total
(Dollars in thousands) (Unaudited)
Interest and Dividend Income:
Loans, net	$	(218)	$	(377)	$	(595)
Debt Securities:
Taxable	408		(149)		259
Exempt From Federal Tax	(22)		10		(12)
Marketable Equity Securities	1		1		2
Other Interest-Earning Assets	(6)		(6)		(12)
Total Interest-Earning Assets	134		(506)		(372)
Interest Expense:
Deposits	(40)		(377)		(417)
Short-Term Borrowings:
Securities Sold Under Agreements to Repurchase	(1)		(3)		(4)
Other Borrowings	88		45		133
Total Interest-Bearing Liabilities	47		(335)		(288)
Change in Net Interest and Dividend Income	$	87	$	(171)	$	(84)

Provision for Loan Losses. There was no provision for loan losses for either the three months ended March 31, 2022 or the three months ended March 31, 2021. The provision for loan losses remaining constant was primarily due to consistent loan balances between the periods and no significant changes in qualitative factors.

Noninterest Income. Noninterest income decreased $561,000, or 17.7%, to $2.6 million for the three months ended March 31, 2022, compared to $3.2 million for the three months ended March 31, 2021.

•Insurance commissions increased $203,000 to $1.8 million for the three months ended March 31, 2022 compared to $1.6 million for the three months ended March 31, 2021. The increase in insurance commissions was primarily driven by contingency fees of $114,000. Contingency fees are profit sharing commissions that are contingent upon several factors including, but not limited to, eligible written premiums, earned premiums, incurred losses, policy cancellations and stop loss charges which resulted from the higher than lock-in amounts received.

•Net (loss) gain on securities decreased $454,000 to a $7,000 loss for the three months ended March 31, 2022 compared to a $447,000 gain for the three months ended March 31, 2021. The change was driven by a $229,000 decrease in fair market value of equity securities between the three months ended March 31, 2021 and three months ended March 31, 2022, in addition to a $225,000 net gain on sale of debt securities during the three months ended March 31, 2021, compared to no gain recognized in the three months ended March 31, 2022.

•Net gain on sale of loans decreased $86,000 as there were no loans sold for the three months ended March 31, 2022.

•Other income was $65,000 for the three months ended March 31, 2022 compared to $180,000 for the three months ended March 31, 2021, the Company recognized a recapture of a temporary impairment on mortgage servicing rights in the current quarter of $59,000, compared to the prior period recapture of temporary impairment of $172,000.

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Noninterest Expense. Noninterest expense decreased $739,000, or 7.9%, to $8.7 million for the three months ended March 31, 2022 compared to $9.4 million for the three months ended March 31, 2021, primarily due to the implementation of branch optimization initiatives completed during 2021 which established a lower expense base. Partially offsetting the lower expense base in the first quarter were investment in executive leadership tasked with implementing growth initiatives.

•Salaries and employee benefits decreased $329,000 to $4.6 million for the three months ended March 31, 2022 compared to $4.9 million for the three months ended March 31, 2021. The decrease was primarily related to prior year branch optimization, including the consolidation of six branches in June 2021 and the divestiture of two branches in December 2021, partially offset by costs for new strategic executive team members hired during the three months ended March 31, 2022.

•Occupancy expense decreased $24,000 to $686,000 for the three months ended March 31, 2022 compared to $710,000 for the three months ended March 31, 2021. The decrease is primarily due to branch consolidations and divestitures in the prior year, reducing the Company's physical footprint, and partially offset by increased maintenance costs due to improvements at remaining locations.

•Contracted services decreased $100,000 to $587,000 for the three months ended March 31, 2022 compared to $687,000 for the three months ended March 31, 2021. The decrease was primarily driven by a change in expense for occupancy management services, partially offset by increases in operational efficiency strategic expenses, Current Expected Credit Losses ("CECL") implementation expense and contracted recruiting spend.

•Amortization of intangible assets decreased $87,000 to $445,000 for the three months ended March 31, 2022 compared to $532,000 for the three months ended March 31, 2021 primarily due to impairment recognized in the later half of 2021 on the core deposit intangible asset from the announcement of the branch divestitures, and the corresponding sale of the related deposits, which reduced the remaining amount of intangible assets to amortize.

Income Taxes. Income tax expense was $803,000 for the three months ended March 31, 2022 compared to income tax expense of $911,000 for the three months ended March 31, 2021. This change was primarily related to a prior period income tax adjustment that resulted from amended tax returns as a result of the CARES Act.

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, 2022 and December 31, 2021.

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 mortgage 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, 2022 to satisfy its short- and long-term liquidity needs.

The Company’s most liquid assets are cash and due from banks, which totaled $123.6 million at March 31, 2022. 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 $83.7 million at March 31, 2022. In addition, at March 31, 2022, the Company had the ability to borrow up to $430.9 million from the FHLB of Pittsburgh, of which $347.8 million is available. The Company also has the ability to borrow up to $102.7 million 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, 2022 and December 31, 2021.

At March 31, 2022, $72.2 million, or 55.9% 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

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time deposits or as other deposit products. The Company has the ability to attract and retain deposits by adjusting the interest rates offered.

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, 2022, CB Financial (on an unconsolidated, stand-alone basis) had liquid assets of $18.3 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.

At March 31, 2022 and December 31, 2021, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action. At March 31, 2022, the Bank's capital ratios were not affected by loans modified in accordance with Section 4013 of the CARES Act. In addition, PPP loans received a zero-percent risk weight under the regulatory capital rules regardless of whether they were pledged as collateral to the Federal Reserve Bank's PPP lending facility, but were included in the Bank's leverage ratio requirement due to the Bank not pledging the loans as collateral to the PPP lending facility.

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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, 2022				December 31, 2021
	Amount		Ratio		Amount		Ratio
(Dollars in thousands)
Common Equity Tier 1 (to risk weighted assets)
Actual	$	115,291	11.99	%	$	113,086	11.95	%
For Capital Adequacy Purposes	43,264		4.50		42,571		4.50
To Be Well Capitalized	62,492		6.50		61,491		6.50
Tier 1 Capital (to risk weighted assets)
Actual	115,291		11.99		113,086		11.95
For Capital Adequacy Purposes	57,685		6.00		56,761		6.00
To Be Well Capitalized	76,914		8.00		75,682		8.00
Total Capital (to risk weighted assets)
Actual	126,886		13.20		124,668		13.18
For Capital Adequacy Purposes	76,914		8.00		75,682		8.00
To Be Well Capitalized	96,142		10.00		94,602		10.00
Tier 1 Leverage (to adjusted total assets)
Actual	115,291		8.19		113,086		7.76
For Capital Adequacy Purposes	56,306		4.00		58,307		4.00
To Be Well Capitalized	70,383		5.00		72,884		5.00

Item 3. Quantitative and Qualitative Disclosure about Market Risk.

Management of Interest Rate Risk. The majority of the Company’s assets and liabilities are monetary in nature. Consequently, the Company’s most significant form of market risk is interest rate risk and a principal part of its business strategy is to manage interest rate risk by reducing the exposure of net interest income to changes in market interest rates. Accordingly, the Company’s Board has established an Asset/Liability Management Committee, which is responsible for evaluating the interest rate risk inherent in the Company’s assets and liabilities, for determining the level of risk that is appropriate given the Company’s business strategy, operating environment, capital, liquidity and performance objectives; and for managing this risk consistent with the guidelines approved by the Board. Senior management monitors the level of interest rate risk and the Asset/Liability Management Committee meets on a quarterly basis to review its asset/liability policies and position and interest rate risk position, and to discuss and implement interest rate risk strategies.

The Company monitors interest rate risk through the use of a simulation model. The quarterly reports developed in the simulation model assist the Company in identifying, measuring, monitoring and controlling interest rate risk to ensure compliance within the Company’s policy guidelines. This quantitative analysis measures interest rate risk from both a capital and earnings perspective. With regard to earnings, movements in interest rates and the shape of the yield curve significantly influence the amount of net interest income that is recognized. Movements in market interest rates significantly influence the spread between the interest earned on our interest-earning assets and the interest paid on our interest-bearing liabilities. Our internal interest rate risk analysis calculates the sensitivity of our projected net interest income over a one year period utilizing a static balance sheet assumption through which incoming and outgoing asset and liability cash flows are reinvested into similar instruments. Product pricing and earning asset prepayment speeds are adjusted for each rate scenario.

With regard to capital, our internal interest rate risk analysis calculates the sensitivity of our economic value of equity (“EVE”) ratio to movements in interest rates. EVE represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities. EVE attempts to quantify our economic value using a discounted cash flow methodology while the EVE ratio reflects that value as a form of capital ratio. The degree to which the EVE ratio changes for any hypothetical interest rate scenario from its base case measurement is a reflection of an institution’s sensitivity to interest rate risk.

For both net interest income and capital at risk, our interest rate risk analysis calculates a base case scenario that assumes no change in interest rates. The model then measures changes throughout a series of interest rate scenarios representing immediate

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and permanent, parallel shifts in the yield curve up and down 100, 200 and 300 basis points with additional scenarios modeled where appropriate. The model requires that interest rates remain positive for all points along the yield curve for each rate scenario which may preclude the modeling of certain falling rate scenarios during periods of lower market interest rates such as that experienced in the current rate environment at March 31, 2022.

The table below sets forth, as of March 31, 2022, the estimated changes in EVE and net interest income at risk that would result from the designated instantaneous changes in market interest rates. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results.

	EVE						EVE as a Percent of Portfolio Value of Assets				Net Interest Earnings at Risk
Change in Interest Rates in Basis Points	Dollar Amount		Dollar Change		Percent Change		NPV Ratio		Basis Point Change		Dollar Amount		Dollar Change		Percent Change
(Dollars in thousands)
+300	$	174,858	$	(10,610)	(5.7)	%	13.45	%		33	$	44,517	$	4,495	11.2	%
+200	179,104		(6,364)		(3.4)	%	13.40			28	43,219		3,197		8.0
+100	182,216		(3,252)		(1.8)	%	13.25			13	41,195		1,173		2.9
Flat	185,468		—		—	%	13.12			—	40,022		—		—
(100)	176,073		(9,395)		(5.1)	%	12.18			(94)	37,814		(2,208)		(5.5)

Certain shortcomings are inherent in the methodology used in the above interest rate risk measurement. Modeling changes in EVE and net interest income require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the table presented assumes that the composition of the Company’s interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured, and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the table provides an indication of the Company’s interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on EVE and net interest income and will differ from actual results. EVE calculations also may not reflect the fair values of financial instruments. For example, changes in market interest rates can increase the fair values of the Company’s loans, deposits and borrowings.

Item 4. Controls and Procedures.

(a)Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.

Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the SEC (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosures.

(b)Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended March 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Periodically, there have been various claims and lawsuits against us, such as claims to enforce liens, claims seeking damages for improper collection procedures or misrepresentations, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans and other issues incident to our business. We are not a party to any other pending legal proceedings that we believe would have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

Item 1A. Risk Factors.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition or future results. The risks described in such Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The Company made the following purchases of its common stock during the three months ended March 31, 2022.

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of the Publicly Announced Program	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program
January 1-31, 2022	28,600	$	24.49	28,600	$	2,682,598
February 1-28, 2022	103,240	25.99		103,240	$	—
March 1-31, 2022	—	—		—	$	—
Total	131,840	$	25.66	131,840

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-4 filed on June 13, 2014 (File No. 333-196749))
3.2	Bylaws, as amended (incorporated herein by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on May 20, 2020)
31.1	Rule 13a-14(a) / 15d-14(a) Certification (Chief Executive Officer)
31.2	Rule 13a-14(a) / 15d-14(a) Certification (Chief Financial Officer)
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials for the quarter ended March 31, 2022, formatted in XBRL (Extensible Business Reporting Language); the (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive (Loss) Income , (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to the Consolidated Financial Statements (Unaudited)
104	Cover Page Interactive Data File (Embedded within Inline XBRL contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CB FINANCIAL SERVICES, INC.
		(Registrant)
Date:	May 11, 2022	/s/ John H. Montgomery
		John H. Montgomery
		President and Chief Executive Officer
Date:	May 11, 2022	/s/ Jamie L. Prah
		Jamie L. Prah
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer and Chief Accounting Officer)

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