SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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

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

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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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 ☐ ~~(Do not check if a smaller reporting company)~~☒						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 ~~November 6, 2017,~~May 9, 2022, the number of shares outstanding of the Registrant’s Common Stock was ~~4,088,025.~~

5,152,409.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF FINANCIAL CONDITION

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

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF INCOME (UNAUDITED)

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

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

Three Months Ended
September 30, Nine Months Ended
September 30,
(Dollars in thousands) 2017 2016 2017 2016

Net Income $ 2,064 $ 1,575 $ 5,569 $ 5,558

Other Comprehensive Income (Loss):
Unrealized Gains (Losses) on Available-for-Sale Securities Net of Income Tax of $5 and ($106) for the Three Months Ended September 30, 2017 and 2016, Respectively, and $314 and $57 for the Nine Months Ended September 30, 2017 and 2016, Respectively 9 (205 ) 612 111

Reclassification Adjustment for Gains on Securities:
Included in Net Income, Net of Income Tax of $4 and $7 for the Three Months Ended September 30, 2017 and 2016, Respectively, and $45 and $27 for the Nine Months Ended September 30, 2017 and 2016, Respectively (1) (6 ) (15 ) (87 ) (53 )
Other Comprehensive Income (Loss), Net of Income Tax 3 (220 ) 525 58
Total Comprehensive Income $ 2,067 $ 1,355 $ 6,094 $ 5,616


	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

(Dollars in thousands, except share and per share data) Shares
Issued Common
Stock Capital
Surplus Retained
Earnings Treasury
Stock Accumulated
Other
Comprehensive
Income Total
Stockholders'
Equity

December 31, 2015 4,363,346 $ 1,818 $ 41,614 $ 47,725 $ (4,836 ) $ 575 $ 86,896
Comprehensive Income:
Net Income - - - 5,558 - - 5,558
Other Comprehensive Income - - - - - 58 58
Stock-Based Compensation Expense - - 262 - - - 262
Dividends Paid ($0.22 Per Share) - - - (2,694 ) - - (2,694 )
September 30, 2016 4,363,346 $ 1,818 $ 41,876 $ 50,589 $ (4,836 ) $ 633 $ 90,080
(1) Reported in Net (Loss) Gain on Securities on the Consolidated Statements of Income.

(Dollars in thousands, except share and per share data) Shares
Issued Common
Stock Capital
Surplus Retained
Earnings Treasury
Stock Accumulated
Other
Comprehensive
Income Total
Stockholders'
Equity

December 31, 2016 4,363,346 $ 1,818 $ 41,863 $ 51,713 $ (4,746 ) $ (1,179 ) $ 89,469
Comprehensive Income:
Net Income - - - 5,569 - - 5,569
Other Comprehensive Income - - - - - 525 525
Stock-Based Compensation Expense - - 258 - - - 258
Exercise of Stock Options - - 7 - 24 - 31
Dividends Paid ($0.22 Per Share) - - - (2,698 ) - - (2,698 )
September 30, 2017 4,363,346 $ 1,818 $ 42,128 $ 54,584 $ (4,722 ) $ (654 ) $ 93,154
(2) Reported in Income Tax Expense on the Consolidated Statements of Income.

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

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF ~~CASH FLOWS~~CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

Nine Months Ended
September 30,
(Dollars in thousands) 2017 2016

OPERATING ACTIVITIES
Net Income $ 5,569 $ 5,558
Αdjustmеnts to Rеconcilе Net Income to Net Cash Provided By Operating Activities:
Net Amortization on Investments 265 154
Depreciation and Amortization 1,867 2,051
Provision for Loan Losses 1,020 1,600
Income from Bank-Owned Life Insurance (348 ) (362 )
Proceeds From Mortgage Loans Sold 16,941 18,945
Originations of Mortgage Loans for Sale (16,552 ) (18,386 )
Gains on Sales of Loans (389 ) (559 )
Gains on Sales of Investment Securities (132 ) (80 )
Gains on Sales of Other Real Estate Owned and Repossessed Assets (357 ) (49 )
Noncash Expense for Stock-Based Compensation 258 262
(Increase) Decrease in Accrued Interest Receivable (131 ) 197
Valuation Adjustment on Foreclosed Real Estate - (566 )
Retirements of Premises and Equipment 152 -
(Decrease) Increase in Taxes Payable (808 ) 1,123
Increase (Decrease) in Accrued Interest Payable 79 (10 )
Net Payment of Federal/State Income Taxes (2,355 ) (2,115 )
Other, Net 4,327 419
NET CASH PROVIDED BY OPERATING ACTIVITIES 9,406 8,182

INVESTING ACTIVITIES
Investment Securities Available for Sale:
Proceeds From Principal Repayments and Maturities 11,683 59,023
Purchases of Securities (32,346 ) (60,035 )
Proceeds from Sales of Securities 11,643 416
Net Increase in Loans (23,413 ) (572 )
Purchase of Premises and Equipment (3,444 ) (1,229 )
Proceeds From Sales of Other Real Estate Owned and Repossessed Assets 357 175
(Increase) Decrease in Restricted Equity Securities (47 ) 122
NET CASH USED IN INVESTING ACTIVITIES (35,567 ) (2,100 )

FINANCING ACTIVITIES
Net Increase (Decrease) in Deposits 64,156 (951 )
Net (Decrease) Increase in Short-Term Borrowings (2,365 ) 1,167
Principal Payments on Other Borrowed Funds (3,500 ) -
Cash Dividends Paid (2,698 ) (2,694 )
Treasury Stock, Purchases at Cost 24 -
Exercise of Stock Options 7 -
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 55,624 (2,478 )

INCREASE IN CASH AND CASH EQUIVALENTS 29,463 3,604
CASH AND DUE FROM BANKS AT BEGINNING OF YEAR 14,282 11,340
CASH AND DUE FROM BANKS AT END OF PERIOD $ 43,745 $ 14,944

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest on deposits and borrowings (including interest credited to deposit accounts of $1,968 and $1,686 respectively) $ 2,390 $ 2,123
Income taxes 2,355 2,115

Real estate acquired in settlement of loans 169 3,236
Transfer of real estate acquired in settlement of loans to premise and equipment - 2,350

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

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

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

NOTES TO ~~UNAUDITED~~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” ~~or “EU”~~). CB Financial, ~~and~~ 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 ~~and the disclosure~~as of ~~contingent assets and liabilities at~~ the date of the ~~financial statements~~Consolidated Statements of Financial Condition and income and expenses ~~during~~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, ~~evaluation~~other-than-temporary impairment evaluations of securities, ~~for other-than-temporary impairment including related cash flow projections,~~ 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 of 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, ~~2016.~~2021. Interim results are not necessarily indicative of results for a full year.

The Company will continue to evaluate the provisions of Accounting Standards Codification (“ASC”) Topic 280 for segment reporting information related to Exchange Underwriters. During the first quarter, Exchange Underwriters insurance commissions comprised of approximately 11% of combined interest and noninterest income but less than 10% of the combined assets of the Company. While EU exceeded the 10% threshold of combined interest and noninterest income, this was primarily related to a unique income event of increased contingency income. Contingency fees are commissions that are contingent upon several factors including, but not limited to, eligible written premiums, earned premiums, incurred losses and stop loss charges. On a year-to-date basis, Exchange Underwriters fell below the 10% threshold of combined interest and noninterest income.

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 ~~ASC Topic~~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 ~~earnings~~income on commercial, commercial mortgage, residential real estate and consumer loan financing, as well as interest ~~earnings~~and dividend income on ~~investment~~ securities, insurance commissions, and fees generated from deposit services to its customers. The Company provides banking services ~~primarily to communities~~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 6 branches and the sale of 2 branches in 2021 and the consolidation of 2 branches in 2020, the Bank operates 11 branches in Greene, Allegheny, Washington, Fayette and Westmoreland Counties ~~located~~ in southwestern ~~Pennsylvania. The Company also conducts~~Pennsylvania, and 3 branches in Marshall and Ohio Counties in West Virginia. Property and casualty, commercial liability, surety and other insurance ~~brokerage activities~~products are offered through Exchange ~~Underwriters.~~

~~Acquired Loans~~

~~Loans that~~Underwriters, a full-service, independent insurance agency.

Critical Accounting Policies; Use of Critical Accounting Estimates

There were ~~acquired~~no material changes in our critical accounting policies during the merger with FedFirst Financial Corporation (the “merger”) were recorded at fair value with no carryover of the related allowance for credit losses. The fair value of the acquired loans was estimated by management with the assistance of a third party valuation specialist.

For performing loans acquired in the merger, the excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. For purchased credit impaired (“PCI”) loans acquired in the merger, the difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. The nonaccretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreasesthree months ended March 31, 2022. See Note 1 to the ~~expected cash flows require an evaluation to determine the need for an allowance for loan losses. Subsequent improvements~~consolidated financial statements included in expected cash flows result in the reversal of a corresponding amount of the nonaccretable discount which is then reclassified as accretable discount that is recognized into interest income over the remaining life of the loan using the interest method. The evaluation of the amount of future cash flows that is expected to be collected is performed in a similar manner as that used to determine our ~~allowance for credit losses. Charge-offs of the principal amount~~Annual Report on ~~acquired loans would be first applied to the nonaccretable discount portion of the fair value adjustment.~~

~~Reclassifications~~

~~Certain comparative amounts~~Form 10-K for the ~~prior~~ year ~~have been reclassified to conform to the current year presentation. Such reclassifications did not affect net income or stockholders’ equity.~~

~~Recent Accounting Standards~~

~~In September 2017, the FASB issued Accounting Standards Update ("ASU") 2017-13,~~ Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments. ASU 2017-13 amends the early adoption date option for certain companies related to the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) and ASU No. 2016-02, Leases (Topic 842). The SEC staff stated the SEC would not object to a public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filingended December 31, 2021, as filed with the SEC, ~~adopting ASC Topic 606~~ for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The SEC staff stated the SEC would not object to a public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financialadditional information in another entity’s filing with the SEC adopting ASC Topic 842 for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company is evaluating the provisions of ASU 2017-13 but believes that its adoption will not have a material impact on the Company's consolidated financial condition or results of operations.

~~In July 2017, the FASB issued Accounting Standards Update ("ASU") 2017-11,~~ Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. ~~ASU 2017-11 amendments simplify the~~regarding our critical accounting for certain financial instruments with down round features. The amendments require companies to disregard the down round feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability or equity classification. Companies that provide earnings per share (EPS) data will adjust their basic EPS calculation for the effect of the feature when triggered and will also recognize the effect of the trigger within equity. ASU 2017-11 is effective for public business entities that are SEC filers for annual periods beginning after December 15, 2018, and interim periods within those annual periods, for public entities that are not SEC filers for annual periods beginning after December 15, 2019 and for all other entities for annual periods beginning after December 15, 2020 with early adoption permitted. The Company is evaluating the provisions of ASU 2017-11 but believes that its adoption will not have a material impact on the Company's consolidated financial condition or results of operations.

~~In May 2017, the FASB issued ASU 2017-10,~~ ~~Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services.~~ ASU 2017-10 amendments clarify that the grantor in a service concession arrangement is the customer of the operation services in all cases for those arrangements. ASU 2017-10 is effective for public business entities that are SEC filers for annual periods beginning after December 15, 2017, and interim periods within those annual periods, for public entities that are not SEC filers for annual periods beginning after December 15, 2018 and for all other entities for annual periods beginning after December 15, 2019 with early adoption permitted, including within an interim period, subject to specific transition requirements depending on whether an entity adopted Topic 606 before or after the issuance of ASU 2017-10. The Company is evaluating the provisions of ASU 2017-10 but believes that its adoption will not have a material impact on the Company's consolidated financial condition or results of operations.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting.~~ ASU 2017-09 amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under ASU Topic 718. ASU 2017-09 is effective for all entities for annual periods, including interim periods within those annual periods beginning after December 15, 2017 with early adoption permitted. The Company is evaluating the provisions of ASU 2017-09 but believes that its adoption will not have a material impact on the Company's consolidated financial condition or results of operations.

~~In March 2017, the FASB issued ASU 2017-08,~~ ~~Receivables- Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchases of Callable Debt Securities.~~ ASU 2017-08 amends guidance on the amortization period of premiums on certain purchases of callable debt securities. The amendments shorten the amortization period of premiums on certain purchases of callable debt securities to the earliest call date. ASU 2017-08 is effective for public business entities that are SEC filers for annual periods beginning after December 15, 2018, and interim periods within those annual periods, for

policies.

Recent Accounting Standards ~~(continued)~~

public entities that are not SEC filers for annual periods beginning after December 15, 2019 and for all other entities for annual periods beginning after December 15, 2020 with early adoption permitted. The Company is evaluating the provisions of ASU 2017-08 but believes that its adoption will not have a material impact on the Company's consolidated financial condition or results of operations.

In ~~January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~. ASU 2017-04 simplifies the accounting for goodwill impairments by eliminating the second step of the goodwill impairment test. Instead, an entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit's carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. ASU 2017-04 is effective for public business entities that are SEC filers for annual periods beginning after December 15, 2019, and interim periods within those annual periods, with early adoption permitted, and is to be applied on a prospective basis. The Company is currently evaluating the provisions of ASU 2017-04, but does not believe that its adoption will have a material impact on the Company's consolidated financial condition or results of operations.

~~In August~~September 2016, the FASB issued ASU ~~2016-15,~~ ~~Statement of Cash Flow (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~. ASU 2016-15 addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted and the amendments should be applied using a retrospective transition method to each period presented. The Company is currently evaluating the provisions of ASU 2016-15, but does not believe that its adoption will have a material impact on the Company's consolidated financial condition or results of operations.

~~In June 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~~available-for-sale debt securities, credit losses should be measured in a manner similar to current ~~GAAP,~~GAAP; however, this ASU ~~will require~~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

Table of Contents

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 iswas originally effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. ~~The Company is currently evaluating~~In November 2019, the ~~provisions~~FASB approved a delay of the required implementation date of ASU 2016-13 ~~but does not believe that its~~for smaller reporting companies, including the Company, resulting in a required implementation date for the Company of January 1, 2023. Early adoption will ~~have~~continue to be permitted. In preparation for the implementation of this ASU, the Company has formed a ~~material~~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~~Company’s consolidated financial condition or results of ~~operations.~~

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~. ASU 2016-09 introduces amendments intended to simplify the accounting for stock compensation. ASU 2016-09 requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity should also recognize excess tax benefits and assess the need for a valuation allowance, regardless of whether the benefit reduces taxes payable in the current period. The ASU also requires excess tax benefits be classified along with other income tax cash flows as an operating activity in the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. The adoption of ASU 2016-09 as of January 1, 2017, had no effect on the Company's consolidated financial condition or results of operations.

operation.

~~Recent Accounting Standards (continued)~~

~~In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02,~~ ~~Leases (Topic 842)~~, which increases the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet, and disclosing key information about leasing arrangements. ASU 2016-02 will require lessees to recognize a right-of-use (ROU) asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation for leases with terms of more than twelve months. Both the ROU asset and lease liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Accounting by lessors will remain largely unchanged from current U.S. GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted, and is to be applied as of the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the provisions of ASU 2016-02, but expects to report increased assets and liabilities as a result of reporting additional leases on the Company's consolidated statement of financial condition or results of operations.

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Financial Instruments – Overall (Subtopic 825-10)~~, which enhances the reporting model for financial instruments regarding certain aspects of recognition, measurement, presentation, and disclosure. ASU 2016-01 (i) requires equity investments (except those accounted for under the equity method or that are consolidated) to be measured at fair value with changes in fair value recognized in net income; (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) eliminates the requirement for an entity to disclose the methods and significant assumptions used to estimate the fair value of financial instruments measured at amortized cost; (iv) requires an entity to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; and (v) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements. ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied using a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The Company is currently evaluating the provisions of ASU 2016-01, but does not believe that its adoption will have a material impact on the Company's consolidated financial condition or results of operations.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~, which establishes a comprehensive revenue recognition standard for virtually all industries under GAAP, including those that previously followed industry-specific guidance, such as the real estate, construction and software industries. ASU 2014-09 specifies that an entity shall recognize revenue when, or as, the entity satisfies a performance obligation by transferring a promised good or service (i.e., an asset) to a customer. An asset is transferred when, or as, the customer obtains control of the asset. Entities are required to disclose qualitative and quantitative information on the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09. The guidance is effective for the Company’s financial statements beginning January 1, 2018. The guidance allows an entity to apply the new standard either retrospectively or through a cumulative effect adjustment as of January 1, 2018. This guidance does not apply to revenue associated with financial instruments, including loans, securities, and derivatives that are accounted for under other U.S. GAAP guidance. For that reason, we do not expect it to have a material impact on our consolidated results of operations for elements of the statement of income associated with financial instruments, including securities gains, interest income, and interest expense. However, we do believe the new standard will result in new disclosure requirements. We are currently in the process of reviewing contracts to assess the impact of the new guidance on our service offerings that are in the scope of the guidance included in non-interest income, such as insurance commission fees, deposit related fees and service charges, payment processing fees, trust services fees and brokerage services fees. The Company is continuing to evaluate the effect of the new guidance on revenue sources other than financial instruments on its consolidated financial position or results of operations and will use modified retrospective method for transition in which the cumulative effect will be recognized at the date of adoption with no restatement of comparative periods presented.

Note 2. Earnings ~~Per~~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 ~~Statement~~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
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Weighted-Average Common Shares Outstanding 4,363,346 4,363,346 4,363,346 4,363,346
Average Treasury Stock Shares (275,321 ) (282,329 ) (275,563 ) (282,329 )
Weighted-Average Common Shares and Common Stock Equivalents Used to Calculate Basic Earnings Per Share 4,088,025 4,081,017 4,087,783 4,081,017
Additional Common Stock Equivalents (Stock Options and Restricted Stock) Used to Calculate Diluted Earnings Per Share 20,698 6,320 16,374 3,713
Weighted-Average Common Shares and Common Stock Equivalents Used to Calculate Diluted Earnings Per Share 4,108,723 4,087,337 4,104,157 4,084,730
Earnings per share:
Basic $ 0.50 $ 0.38 $ 1.36 $ 1.36
Diluted 0.50 0.38 1.36 1.36


	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

Table of Contents

Note 3. ~~Investment~~ Securities

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

	(Dollars in thousands)
	September 30, 2017										March 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
(Dollars in thousands)										(Dollars in thousands)

Available-for-Sale Debt Securities:										Available-for-Sale Debt Securities:
U.S. Government Agencies	$	59,622	$	-	$	(1,242	)	$	58,380	U.S. Government Agencies	$	53,992	$	—	$	(4,781)	$	49,211
Obligations of States and Political Subdivisions		37,616		314		(122	)		37,808	Obligations of States and Political Subdivisions	17,946		448		(1)		18,393
Mortgage-Backed Securities - Government-Sponsored Enterprises		17,890		14		(45	)		17,859	Mortgage-Backed Securities - Government-Sponsored Enterprises	52,505		177		(2,063)		50,619
Equity Securities - Mutual Funds		500		10		-			510
Equity Securities - Other		1,253		94		(15	)		1,332
Total	$	116,881	$	432	$	(1,424	)	$	115,889
Collateralized Mortgage Obligations - Government Sponsored Enterprises										Collateralized Mortgage Obligations - Government Sponsored Enterprises	107,848		2		(7,042)		100,808
Corporate Debt										Corporate Debt	9,480		—		(273)		9,207
Total Available-for-Sale Debt Securities										Total Available-for-Sale Debt Securities	241,771		627		(14,160)		228,238

Equity Securities:										Equity Securities:
Mutual Funds										Mutual Funds							944
Other										Other							1,915
Total Equity Securities										Total Equity Securities							2,859
Total Securities										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

December 31, 2016
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Value

U.S. Government Agencies $ 67,944 $ 18 $ (1,806 ) $ 66,156
Obligations of States and Political Subdivisions 35,856 366 (487 ) 35,735
Mortgage-Backed Securities - Government-Sponsored Enterprises 2,588 31 - 2,619
Equity Securities - Mutual Funds 500 7 - 507
Equity Securities - Other 1,106 91 (6 ) 1,191
Total $ 107,994 $ 513 $ (2,299 ) $ 106,208

For debt securities, the Company does not believe that any individual unrealized loss as of ~~September 30, 2017 and~~March 31, 2022 or December 31, ~~2016~~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

securities that are temporarily impaired at ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016~~2021 relate principally to changes in market interest rates subsequent to the acquisition of the specific securities. The Company does not intend to sell, orand 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 ~~investment~~debt securities as of the date indicated:

	(Dollars in thousands)
	September 30, 2017					March 31, 2022
	Available-for-Sale					Amortized Cost		Fair Value
(Dollars in thousands)					(Dollars in thousands)
	Amortized Cost		Fair Value
Due in One Year or Less	$	2,115	$	2,126	Due in One Year or Less	$	2,576	$	2,584
Due after One Year through Five Years		23,469		23,443	Due after One Year through Five Years	4,900		4,690
Due after Five Years through Ten Years		68,376		67,362	Due after Five Years through Ten Years	78,948		74,332
Due after Ten Years		22,921		22,958	Due after Ten Years	155,347		146,632
Total	$	116,881	$	115,889	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 ~~– Mutual Funds~~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 ~~Equity Securities – Other do not~~December 31, 2021, securities available to be pledged have a ~~scheduled maturity date, but have been included in the Due After Ten Years category.~~

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 ~~Related~~ Allowance for Loan ~~Loss~~

Losses

The Company’s loan portfolio is ~~made up~~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 ~~four classifications:~~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

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 ~~consumer~~are generally secured by business assets, inventories, accounts receivable, etc., which present collateral risk.

Consumer loans generally have higher interest rates and ~~other loans. These segments are further segregated between loans accounted for under~~shorter terms than residential mortgage loans; however, they have additional credit risk due to the ~~amortized cost method (“Originated Loans”) and acquired loans that were originally recorded at fair value with no carryover~~type of collateral securing the ~~related pre-merger allowance for loan losses (“Loans Acquired at Fair Value”).~~ loan.

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

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 ~~$682,000~~$1.6 million and ~~$818,000~~$1.9 million at ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, respectively.

~~Real estate loans serviced for others, which~~

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 ~~included~~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 ~~Consolidated Statement~~substandard category have well-defined weaknesses that jeopardize the liquidation of ~~Financial Condition, totaled $94.6 million~~the debt and ~~$83.9 million at September 30, 2017~~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 ~~December 31, 2016, respectively.~~

facts, is highly improbable. Loans classified as loss are considered uncollectible and of such little value that continuance as an asset is not warranted.

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 ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, there were no loans in the criticized category of Loss within the internal risk rating system.

(Dollars in thousands)
September 30, 2017
Pass Special
Mention Substandard Doubtful Total
Originated Loans
Real Estate:
Residential $ 191,801 $ 1,006 $ 407 $ - $ 193,214
Commercial 133,529 13,909 2,467 537 150,442
Construction 28,356 - 550 59 28,965
Commercial and Industrial 66,415 8,326 1,111 1,365 77,217
Consumer 113,795 - 27 - 113,822
Other 3,444 - - - 3,444
Total Originated Loans $ 537,340 $ 23,241 $ 4,562 $ 1,961 $ 567,104

Loans Acquired at Fair Value
Real Estate:
Residential $ 73,213 $ - $ 2,004 $ - $ 75,217
Commercial 50,381 1,939 506 - 52,826
Commercial and Industrial 8,176 9 263 84 8,532
Consumer 195 - - - 195
Total Loans Acquired at Fair Value $ 131,965 $ 1,948 $ 2,773 $ 84 $ 136,770

Total Loans
Real Estate:
Residential $ 265,014 $ 1,006 $ 2,411 $ - $ 268,431
Commercial 183,910 15,848 2,973 537 203,268
Construction 28,356 - 550 59 28,965
Commercial and Industrial 74,591 8,335 1,374 1,449 85,749
Consumer 113,990 - 27 - 114,017
Other 3,444 - - - 3,444
Total Loans $ 669,305 $ 25,189 $ 7,335 $ 2,045 $ 703,874

December 31, 2016
Pass Special
Mention Substandard Doubtful Total
Originated Loans
Real Estate:
Residential $ 184,721 $ 1,050 $ 306 $ - $ 186,077
Commercial 122,811 14,118 2,035 930 139,894
Construction 9,944 - 595 107 10,646
Commercial and Industrial 65,612 2,720 1,322 1,437 71,091
Consumer 113,847 - 160 - 114,007
Other 3,637 - - - 3,637
Total Originated Loans $ 500,572 $ 17,888 $ 4,418 $ 2,474 $ 525,352

Loans Acquired at Fair Value
Real Estate:
Residential $ 83,044 $ - $ 2,467 $ - $ 85,511
Commercial 58,411 2,358 347 - 61,116
Commercial and Industrial 9,117 42 441 121 9,721
Consumer 197 - - - 197
Total Loans Acquired at Fair Value $ 150,769 $ 2,400 $ 3,255 $ 121 $ 156,545

Total Loans
Real Estate:
Residential $ 267,765 $ 1,050 $ 2,773 $ - $ 271,588
Commercial 181,222 16,476 2,382 930 201,010
Construction 9,944 - 595 107 10,646
Commercial and Industrial 74,729 2,762 1,763 1,558 80,812
Consumer 114,044 - 160 - 114,204
Other 3,637 - - - 3,637
Total Loans $ 651,341 $ 20,288 $ 7,673 $ 2,595 $ 681,897


	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.

	(Dollars in thousands)
	September 30, 2017															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			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
Originated Loans
Real Estate:
Residential	$	192,769	$	91	$	42	$	-	$	133	$	312	$	193,214
Commercial		150,154		-		-		-		-		288		150,442
Construction		28,906		-		-		-		-		59		28,965
Commercial and Industrial		75,108		-		-		496		496		1,613		77,217
Consumer		112,485		1,155		103		52		1,310		27		113,822
Other		3,444		-		-		-		-		-		3,444
Total Originated Loans	$	562,866	$	1,246	$	145	$	548	$	1,939	$	2,299	$	567,104
(Dollars in Thousands)															(Dollars in Thousands)

Loans Acquired at Fair Value
Real Estate:
Residential	$	73,977	$	45	$	-	$	75	$	120	$	1,120	$	75,217
Commercial		52,826		-		-		-		-		-		52,826
Commercial and Industrial		8,516		-		-		-		-		16		8,532
Consumer		190		5		-		-		5		-		195
Total Loans Acquired at Fair Value	$	135,509	$	50	$	-	$	75	$	125	$	1,136	$	136,770

Total Loans
Real Estate:															Real Estate:
Residential	$	266,746	$	136	$	42	$	75	$	253	$	1,432	$	268,431	Residential	$	313,306	$	2,106	$	191	$	—	$	2,297	$	1,651	$	317,254
Commercial		202,980		-		-		-		-		288		203,268	Commercial	425,202		—		—		—		—		2,025		427,227
Construction		28,906		-		-		-		-		59		28,965	Construction	54,227		—		—		—		—		—		54,227
Commercial and Industrial		83,624		-		-		496		496		1,629		85,749	Commercial and Industrial	66,202		101		—		—		101		1,540		67,843
Consumer		112,675		1,160		103		52		1,315		27		114,017	Consumer	142,931		338		57		—		395		96		143,422
Other		3,444		-		-		-		-		-		3,444	Other	10,669		—		—		—		—		—		10,669
Total Loans	$	698,375	$	1,296	$	145	$	623	$	2,064	$	3,435	$	703,874	Total Loans	$	1,012,537	$	2,545	$	248	$	—	$	2,793	$	5,312	$	1,020,642

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.

The following table sets forth the amounts and categories of ~~our~~ 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.

(Dollars in Thousands)
September 30,
2017 December 31,
2016
Nonaccrual Loans:
Originated Loans:
Real Estate:
Residential $ 312 $ 308
Commercial 288 73
Construction 59 107
Commercial and Industrial 1,613 1,829
Consumer 27 160
Total Originated Nonaccrual Loans 2,299 2,477

Loans Acquired at Fair Value:
Real Estate:
Residential 1,120 1,565
Commercial - 347
Commercial and Industrial 16 -
Total Loans Acquired at Fair Value Nonaccrual Loans 1,136 1,912
Total Nonaccrual Loans 3,435 4,389

Accruing Loans Past Due 90 Days or More:
Originated Loans:
Real Estate:
Residential - 120
Commercial and Industrial 496 -
Consumer 52 8
Total Originated Accruing Loans 90 Days or More Past Due 548 128

Loans Acquired at Fair Value:
Real Estate:
Residential 75 223
Total Loans Acquired at Fair Value Accruing Loans 90 Days or More Past Due 75 223
Total Accruing Loans 90 Days or More Past Due 623 351
Total Nonaccrual Loans and Accruing Loans 90 Days or More Past Due 4,058 4,740

Troubled Debt Restructurings, Accruing:
Originated Loans:
Real Estate - Residential 61 -
Real Estate - Commercial 1,285 1,325
Commercial and Industrial 5 6
Other 2 4
Total Originated Loans 1,353 1,335
Loans Acquired at Fair Value:
Real Estate - Residential 1,268 1,299
Real Estate - Commercial 438 660
Commercial and Industrial 247 393
Total Loans Acquired at Fair Value 1,953 2,352
Total Troubled Debt Restructurings, Accruing 3,306 3,687

Total Nonperforming Loans 7,364 8,427

Real Estate Owned:
Residential 236 -
Commercial 174 174
Total Real Estate Owned 410 174

Total Nonperforming Assets $ 7,774 $ 8,601

Nonperforming Loans to Total Loans 1.05 % 1.24 %
Nonperforming Assets to Total Assets 0.86 1.02

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 ~~$1.2 million~~$945,000 and ~~$2.2 million~~$571,000 at ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, respectively.

~~TDRs typically are~~

As of March 31, 2022 , the ~~result of our loss mitigation activities whereby concessions are granted~~Company had 1 TDR loan in forbearance that totaled $128,000. There were no modifications to minimize loss and avoid foreclosure or repossession of collateral. The concessions granted for the TDRs in the portfolio primarily consist of, but are not limited to, modification of payment or other terms, temporary rate modification and extension of maturity date. Loans classified as TDRs consisted of 16 loans totaling $4.7 million and 15 loans totaling $4.7 million at September 30, 2017 and December 31, 2016, respectively. Originated loans classified as TDRs consisted of 8 loans totaling $2.8 million and 6 loans totaling $2.3 million at September 30, 2017 and December 31, 2016, respectively. Loans acquired at fair value classified as TDRs consisted of 8 loans totaling $1.9 million and 9 loans totaling $2.4 million at September 30, 2017 and December 31, 2016, respectively.

During the three and nine months ended September 30, 2017, one residential real estate loan modified terms in a new TDR transaction. During the nine months ended September 30, 2016, one commercial loan previously identified as an acquired loan at fair value TDR paid off, an originated consumer loan modified terms in a new TDR transaction, and one commercial and one residential real estate loan that were acquired at fair value modified terms into new TDR transactions. No loans were modified in a TDRtroubled debt restructurings during the three months ended ~~September 30, 2016. No TDRs subsequently defaulted during the three or nine months ended September 30, 2017 and 2016, respectively.~~

~~The following table presents information at the time~~March 31, 2022. As of ~~modification related to~~December 31, 2021, there were no loans ~~modified~~ in ~~a TDR during the three and nine months ended September 30, 2017 and nine months ended September 30, 2016.~~

forbearance.

(Dollars in thousands)
Three Months Ended September 30, 2017
Number
of
Contracts Pre-
Modification
Outstanding
Recorded
Investment Post-
Modification
Outstanding
Recorded
Investment Related
Allowance
Originated Loans
Real Estate
Residential 1 $ 61 $ 61 $ -
Total 1 $ 61 $ 61 $ -

(Dollars in thousands)
Nine Months Ended September 30, 2017
Number
of
Contracts Pre-
Modification
Outstanding
Recorded
Investment Post-
Modification
Outstanding
Recorded
Investment Related
Allowance
Originated Loans
Real Estate
Residential 1 $ 61 $ 61 $ -
Total 1 $ 61 $ 61 $ -

Table of Contents

(Dollars in thousands)
Nine Months Ended September 30, 2016
Number
of
Contracts Pre-
Modification
Outstanding
Recorded
Investment Post-
Modification
Outstanding
Recorded
Investment Related
Allowance
Originated Loans
Real Estate
Other 1 $ 7 $ 7 $ -
Total 1 $ 7 $ 7 $ -

Loans Acquired at Fair Value
Real Estate
Residential 1 $ 37 $ 45 $ -
Commercial 1 539 539 -
Total 2 $ 576 $ 584 $ -

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

	(Dollars in thousands)
	September 30, 2017											March 31, 2022
	Recorded Investment		Related Allowance		Unpaid Principal Balance		Average Recorded Investment		Interest Income Recognized			Recorded Investment		Related Allowance		Unpaid Principal Balance		Average Recorded Investment		Interest Income Recognized
(Dollars in thousands)											(Dollars in thousands)

With No Related Allowance Recorded:											With No Related Allowance Recorded:
Originated Loans
Real Estate:											Real Estate:
Residential	$	124	$	-	$	126	$	133	$	3	Residential	$	1,118			$	1,123	$	1,124	$	11
Commercial		1,886		-		1,886		1,972		67	Commercial	9,525				9,609		9,626		73
Construction		609		-		609		640		20	Construction	540				540		540		4
Commercial and Industrial		751		-		751		747		28	Commercial and Industrial	1,900				2,227		1,942		5
Other		2		-		2		3		-
Total With No Related Allowance Recorded	$	3,372	$	-	$	3,374	$	3,495	$	118	Total With No Related Allowance Recorded	$	13,083	$	—	$	13,499	$	13,232	$	93

Loans Acquired at Fair Value
Real Estate:
Residential	$	1,268	$	-	$	1,268	$	1,284	$	49
Commercial		944		-		944		975		38
Commercial and Industrial		263		-		263		351		11
Total With No Related Allowance Recorded	$	2,475	$	-	$	2,475	$	2,610	$	98

Total Loans
With A Related Allowance Recorded:											With A Related Allowance Recorded:
Real Estate:											Real Estate:
Residential	$	1,392	$	-	$	1,394	$	1,417	$	52	Residential	$	—	$	—	$	—	$	—	$	—
Commercial		2,830		-		2,830		2,947		105	Commercial	—		—		—		—		—
Construction		609		-		609		640		20	Construction	1,992		84		1,992		2,001		22
Commercial and Industrial		1,014		-		1,014		1,098		39	Commercial and Industrial	96		96		96		146		2
Other		2		-		2		3		-
Total With No Related Allowance Recorded	$	5,847	$	-	$	5,849	$	6,105	$	216

With A Related Allowance Recorded:
Originated Loans
Real Estate:
Commercial	$	1,495	$	392	$	1,495	$	1,516	$	49
Commercial and Industrial		1,730		636		1,804		2,025		75
Total With A Related Allowance Recorded	$	3,225	$	1,028	$	3,299	$	3,541	$	124	Total With A Related Allowance Recorded	$	2,088	$	180	$	2,088	$	2,147	$	24

Loans Acquired at Fair Value
Total Impaired Loans:											Total Impaired Loans:
Real Estate:											Real Estate:
Residential											Residential	$	1,118	$	—	$	1,123	$	1,124	$	11
Commercial											Commercial	9,525		—		9,609		9,626		73
Construction											Construction	2,532		84		2,532		2,541		26
Commercial and Industrial	$	84	$	10	$	84	$	103	$	4	Commercial and Industrial	1,996		96		2,323		2,088		7
Total With A Related Allowance Recorded	$	84	$	10	$	84	$	103	$	4

Total Loans
Real Estate:
Commercial	$	1,495	$	392	$	1,495	$	1,516	$	49
Commercial and Industrial		1,814		646		1,888		2,128		79
Total With A Related Allowance Recorded	$	3,309	$	1,038	$	3,383	$	3,644	$	128
Total Impaired Loans											Total Impaired Loans	$	15,171	$	180	$	15,587	$	15,379	$	117

Table of Contents

September 30, 2017 (cont.)
Recorded
Investment Related
Allowance Unpaid
Principal
Balance Average
Recorded
Investment Interest
Income
Recognized
Total Impaired Loans:
Originated Loans
Real Estate:
Residential $ 124 $ - $ 126 $ 133 $ 3
Commercial 3,381 392 3,381 3,488 116
Construction 609 - 609 640 20
Commercial and Industrial 2,481 636 2,555 2,772 103
Other 2 - 2 3 -
Total Impaired Loans $ 6,597 $ 1,028 $ 6,673 $ 7,036 $ 242

Loans Acquired at Fair Value
Real Estate:
Residential $ 1,268 $ - $ 1,268 $ 1,284 $ 49
Commercial 944 - 944 975 38
Commercial and Industrial 347 10 347 454 15
Total Impaired Loans $ 2,559 $ 10 $ 2,559 $ 2,713 $ 102

Total Loans
Real Estate:
Residential $ 1,392 $ - $ 1,394 $ 1,417 $ 52
Commercial 4,325 392 4,325 4,463 154
Construction 609 - 609 640 20
Commercial and Industrial 2,828 646 2,902 3,226 118
Other 2 - 2 3 -
Total Impaired Loans $ 9,156 $ 1,038 $ 9,232 $ 9,749 $ 344

December 31, 2016
Recorded
Investment Related
Allowance Unpaid
Principal
Balance Average
Recorded
Investment Interest
Income
Recognized
With No Related Allowance Recorded:
Originated Loans
Real Estate:
Commercial $ 2,112 $ - $ 2,112 $ 2,228 $ 100
Construction 702 - 702 843 28
Commercial and Industrial 825 - 825 891 45
Other 4 - 4 6 1
Total With No Related Allowance Recorded $ 3,643 $ - $ 3,643 $ 3,968 $ 174

Loans Acquired at Fair Value
Real Estate:
Residential $ 1,300 $ - $ 1,300 $ 1,320 $ 68
Commercial 660 - 660 763 47
Commercial and Industrial 441 - 441 543 21
Total With No Related Allowance Recorded $ 2,401 $ - $ 2,401 $ 2,626 $ 136

Total Loans
Real Estate:
Residential $ 1,300 $ - $ 1,300 $ 1,320 $ 68
Commercial 2,772 - 2,772 2,991 147
Construction 702 - 702 843 28
Commercial and Industrial 1,266 - 1,266 1,434 66
Other 4 - 4 6 1
Total With No Related Allowance Recorded $ 6,044 $ - $ 6,044 $ 6,594 $ 310

With A Related Allowance Recorded:
Originated Loans
Real Estate:
Commercial $ 1,249 $ 360 $ 1,249 $ 1,277 $ 66
Commercial and Industrial 1,940 655 1,946 1,951 27
Total With A Related Allowance Recorded $ 3,189 $ 1,015 $ 3,195 $ 3,228 $ 93

Loans Acquired at Fair Value
Real Estate:
Commercial $ 347 $ 114 $ 437 $ 367 $ -
Commercial and Industrial 121 31 121 141 6
Total With A Related Allowance Recorded $ 468 $ 145 $ 558 $ 508 $ 6

Total Loans
Real Estate:
Commercial $ 1,596 $ 474 $ 1,686 $ 1,644 $ 66
Commercial and Industrial 2,061 686 2,067 2,092 33
Total With A Related Allowance Recorded $ 3,657 $ 1,160 $ 3,753 $ 3,736 $ 99


	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

December 31, 2016 (cont.)
Recorded
Investment Related
Allowance Unpaid
Principal
Balance Average
Recorded
Investment Interest
Income
Recognized
Total Impaired Loans
Originated Loans
Real Estate:
Commercial $ 3,361 $ 360 $ 3,361 $ 3,505 $ 166
Construction 702 - 702 843 28
Commercial and Industrial 2,765 655 2,771 2,842 72
Other 4 - 4 6 1
Total Impaired Loans $ 6,832 $ 1,015 $ 6,838 $ 7,196 $ 267

Loans Acquired at Fair Value
Real Estate:
Residential $ 1,300 $ - $ 1,300 $ 1,320 $ 68
Commercial 1,007 114 1,097 1,130 47
Commercial and Industrial 562 31 562 684 27
Total Impaired Loans $ 2,869 $ 145 $ 2,959 $ 3,134 $ 142

Total Loans
Real Estate:
Residential $ 1,300 $ - $ 1,300 $ 1,320 $ 68
Commercial 4,368 474 4,458 4,635 213
Construction 702 - 702 843 28
Commercial and Industrial 3,327 686 3,333 3,526 99
Other 4 - 4 6 1
Total Impaired Loans $ 9,701 $ 1,160 $ 9,797 $ 10,330 $ 409

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 ~~table presents~~tables present the activity in the allowance for loan losses summarized by ~~major classifications~~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.

(Dollars in thousands)
September 30, 2017
Real
Estate
Residential Real
Estate
Commercial Real
Estate
Construction Commercial
and
Industrial Consumer Other Unallocated Total
Originated Loans
June 30, 2017 $ 940 $ 2,017 $ 142 $ 1,760 $ 2,223 $ - $ 385 $ 7,467
Charge-offs (22 ) - - - (217 ) - - (239 )
Recoveries 6 - - 1 38 - - 45
Provision (47 ) 64 85 (155 ) 317 - 36 300
September 30, 2017 $ 877 $ 2,081 $ 227 $ 1,606 $ 2,361 $ - $ 421 $ 7,573

Loans Acquired at Fair Value
June 30, 2017 $ - $ 613 $ - $ 109 $ - $ - $ (106 ) $ 616
Charge-offs (45 ) - - - - - - (45 )
Recoveries 11 1 - - - - - 12
Provision 34 (5 ) - (7 ) - - (22 ) -
September 30, 2017 $ - $ 609 $ - $ 102 $ - $ - $ (128 ) $ 583

Total Allowance for Loan Losses
June 30, 2017 $ 940 $ 2,630 $ 142 $ 1,869 $ 2,223 $ - $ 279 $ 8,083
Charge-offs (67 ) - - - (217 ) - - (284 )
Recoveries 17 1 - 1 38 - - 57
Provision (13 ) 59 85 (162 ) 317 - 14 300
September 30, 2017 $ 877 $ 2,690 $ 227 $ 1,708 $ 2,361 $ - $ 293 $ 8,156

Originated Loans
December 31, 2016 $ 1,106 $ 1,942 $ 65 $ 1,579 $ 2,463 $ - $ 128 $ 7,283
Charge-offs (22 ) - - - (661 ) - - (683 )
Recoveries 11 - - 37 155 - - 203
Provision (218 ) 139 162 (10 ) 404 - 293 770
September 30, 2017 $ 877 $ 2,081 $ 227 $ 1,606 $ 2,361 $ - $ 421 $ 7,573

Loans Acquired at Fair Value
December 31, 2016 $ - $ 365 $ - $ 120 $ - $ - $ 35 $ 520
Charge-offs (109 ) (132 ) - - - - - (241 )
Recoveries 49 2 - - 3 - - 54
Provision 60 374 - (18 ) (3 ) - (163 ) 250
September 30, 2017 $ - $ 609 $ - $ 102 $ - $ - $ (128 ) $ 583

Total Allowance for Loan Losses
December 31, 2016 $ 1,106 $ 2,307 $ 65 $ 1,699 $ 2,463 $ - $ 163 $ 7,803
Charge-offs (131 ) (132 ) - - (661 ) - - (924 )
Recoveries 60 2 - 37 158 - - 257
Provision (158 ) 513 162 (28 ) 401 - 130 1,020
September 30, 2017 $ 877 $ 2,690 $ 227 $ 1,708 $ 2,361 $ - $ 293 $ 8,156


	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

September 30, 2017
Real
Estate
Residential Real
Estate
Commercial Real
Estate
Construction Commercial
and
Industrial Consumer Other Unallocated Total
Originated Loans
Individually Evaluated for Impairment $ - $ 392 $ - $ 636 $ - $ - $ - $ 1,028
Collectively Evaluated for Potential Impairment $ 877 $ 1,689 $ 227 $ 970 $ 2,361 $ - $ 421 $ 6,545

Loans Acquired at Fair Value
Individually Evaluated for Impairment $ - $ - $ - $ 10 $ - $ - $ - $ 10
Collectively Evaluated for Potential Impairment $ - $ 609 $ - $ 92 $ - $ - $ (128 ) $ 573

Total Allowance for Loan Losses
Individually Evaluated for Impairment $ - $ 392 $ - $ 646 $ - $ - $ - $ 1,038
Collectively Evaluated for Potential Impairment $ 877 $ 2,298 $ 227 $ 1,062 $ 2,361 $ - $ 293 $ 7,118

Table of Contents

September 30, 2016
Real
Estate
Residential Real
Estate
Commercial Real
Estate
Construction Commercial
and
Industrial Consumer Other Unallocated Total
Originated Loans
June 30, 2016 $ 1,110 $ 1,956 $ 82 $ 1,468 $ 2,143 $ 1 $ 295 $ 7,055
Charge-offs (4 ) (11 ) - - (166 ) (17 ) - (198 )
Recoveries 4 - - - 21 5 - 30
Provision (38 ) 77 (20 ) 50 360 12 - 441
September 30, 2016 $ 1,072 $ 2,022 $ 62 $ 1,518 $ 2,358 $ 1 $ 295 $ 7,328

Loans Acquired at Fair Value
June 30, 2016 $ - $ 11 $ - $ 115 $ - $ - $ 10 $ 136
Charge-offs (8 ) - - - - (2 ) - (10 )
Recoveries 2 - - - 1 - - 3
Provision 6 (11 ) - 20 (1 ) 2 (7 ) 9
September 30, 2016 $ - $ - $ - $ 135 $ - $ - $ 3 $ 138

Total Allowance for Loan Losses
June 30, 2016 $ 1,110 $ 1,967 $ 82 $ 1,583 $ 2,143 $ 1 $ 305 $ 7,191
Charge-offs (12 ) (11 ) - - (166 ) (19 ) - (208 )
Recoveries 6 - - - 22 5 - 33
Provision (32 ) 66 (20 ) 70 359 14 (7 ) 450
September 30, 2016 $ 1,072 $ 2,022 $ 62 $ 1,653 $ 2,358 $ 1 $ 298 $ 7,466

Originated Loans
December 31, 2015 $ 1,623 $ 2,045 $ 137 $ 784 $ 1,887 $ - $ 14 $ 6,490
Charge-offs (24 ) (11 ) - - (476 ) (43 ) - (554 )
Recoveries 8 - - - 102 16 - 126
Provision (535 ) (12 ) (75 ) 734 845 28 281 1,266
September 30, 2016 $ 1,072 $ 2,022 $ 62 $ 1,518 $ 2,358 $ 1 $ 295 $ 7,328

Loans Acquired at Fair Value
December 31, 2015 $ - $ - $ - $ - $ - $ - $ - $ -
Charge-offs (24 ) (180 ) - - (7 ) - - (211 )
Recoveries 7 2 - - 6 - - 15
Provision 17 178 - 135 1 - 3 334
September 30, 2016 $ - $ - $ - $ 135 $ - $ - $ 3 $ 138

Total Allowance for Loan Losses
December 31, 2015 $ 1,623 $ 2,045 $ 137 $ 784 $ 1,887 $ - $ 14 $ 6,490
Charge-offs (48 ) (191 ) - - (483 ) (43 ) - (765 )
Recoveries 15 2 - - 108 16 - 141
Provision (518 ) 166 (75 ) 869 846 28 284 1,600
September 30, 2016 $ 1,072 $ 2,022 $ 62 $ 1,653 $ 2,358 $ 1 $ 298 $ 7,466

September 30, 2016
Real
Estate
Residential Real
Estate
Commercial Real
Estate
Construction Commercial
and
Industrial Consumer Other Unallocated Total
Originated Loans
Individually Evaluated for Impairment $ - $ 385 $ - $ 701 $ - $ - $ - $ 1,086
Collectively Evaluated for Potential Impairment $ 1,072 $ 1,637 $ 62 $ 817 $ 2,358 $ 1 $ 295 $ 6,242

Loans Acquired at Fair Value
Individually Evaluated for Impairment $ - $ 122 $ - $ 39 $ - $ - $ - $ 161
Collectively Evaluated for Potential Impairment $ - $ (122 ) $ - $ 96 $ - $ - $ 3 $ (23 )

Total Allowance for Loan Losses
Individually Evaluated for Impairment $ - $ 507 $ - $ 740 $ - $ - $ - $ 1,247
Collectively Evaluated for Potential Impairment $ 1,072 $ 1,515 $ 62 $ 913 $ 2,358 $ 1 $ 298 $ 6,219


	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, 2016
	Real Estate Residential		Real Estate Commercial		Real Estate Construction		Commercial and Industrial		Consumer		Other		Unallocated		Total			December 31, 2021
Originated Loans
																		Real Estate Residential		Real Estate Commercial		Real Estate Construction		Commercial and Industrial		Consumer		Other		Unallocated		Total
(Dollars in thousands)																	(Dollars in thousands)

Individually Evaluated for Impairment	$	-	$	360	$	-	$	655	$	-	$	-	$	-	$	1,015	Individually Evaluated for Impairment	$	—	$	195	$	104	$	—	$	—	$	—	$	—	$	299
Collectively Evaluated for Potential Impairment	$	1,106	$	1,582	$	65	$	924	$	2,463	$	-	$	128	$	6,268	Collectively Evaluated for Potential Impairment	$	1,420	$	5,765	$	1,145	$	1,151	$	1,050	$	—	$	752	$	11,283

Loans Acquired at Fair Value
Individually Evaluated for Impairment	$	-	$	114	$	-	$	31	$	-	$	-	$	-	$	145
Collectively Evaluated for Potential Impairment	$	-	$	251	$	-	$	89	$	-	$	-	$	35	$	375

Total Allowance for Loan Losses
Individually Evaluated for Impairment	$	-	$	474	$	-	$	686	$	-	$	-	$	-	$	1,160
Collectively Evaluated for Potential Impairment	$	1,106	$	1,833	$	65	$	1,013	$	2,463	$	-	$	163	$	6,643

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

Accretable
Discount
Balance at December 31, 2016 $ 1,640
Accretable Yield (533 )
Nonaccretable Discount (113 )
Balance at September 30, 2017 $ 994


	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

(Dollars in thousands)
September 30, 2017
Real
Estate
Residential Real
Estate
Commercial Real
Estate
Construction Commercial
and
Industrial Consumer Other Total
Originated Loans
Individually Evaluated for Impairment $ 124 $ 3,381 $ 609 $ 2,481 $ - $ 2 $ 6,597
Collectively Evaluated for Potential Impairment 193,090 147,061 28,356 74,736 113,822 3,442 560,507
$ 193,214 $ 150,442 $ 28,965 $ 77,217 $ 113,822 $ 3,444 $ 567,104

Loans Acquired at Fair Value
Individually Evaluated for Impairment $ 1,268 $ 944 $ - $ 347 $ - $ - $ 2,559
Collectively Evaluated for Potential Impairment 73,949 51,882 - 8,185 195 - 134,211
$ 75,217 $ 52,826 $ - $ 8,532 $ 195 $ - $ 136,770

Total Loans
Individually Evaluated for Impairment $ 1,392 $ 4,325 $ 609 $ 2,828 $ - $ 2 $ 9,156
Collectively Evaluated for Potential Impairment 267,039 198,943 28,356 82,921 114,017 3,442 694,718
$ 268,431 $ 203,268 $ 28,965 $ 85,749 $ 114,017 $ 3,444 $ 703,874

Table of Contents

December 31, 2016
Real
Estate
Residential Real
Estate
Commercial Real
Estate
Construction Commercial
and
Industrial Consumer Other Total
Originated Loans
Individually Evaluated for Impairment $ - $ 3,361 $ 702 $ 2,765 $ - $ 4 $ 6,832
Collectively Evaluated for Potential Impairment 186,077 136,533 9,944 68,326 114,007 3,633 518,520
$ 186,077 $ 139,894 $ 10,646 $ 71,091 $ 114,007 $ 3,637 $ 525,352

Loans Acquired at Fair Value
Individually Evaluated for Impairment $ 1,300 $ 1,007 $ - $ 562 $ - $ - $ 2,869
Collectively Evaluated for Potential Impairment 84,211 60,109 - 9,159 197 - 153,676
$ 85,511 $ 61,116 $ - $ 9,721 $ 197 $ - $ 156,545

Total Loans
Individually Evaluated for Impairment $ 1,300 $ 4,368 $ 702 $ 3,327 $ - $ 4 $ 9,701
Collectively Evaluated for Potential Impairment 270,288 196,642 9,944 77,485 114,204 3,633 672,196
$ 271,588 $ 201,010 $ 10,646 $ 80,812 $ 114,204 $ 3,637 $ 681,897
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

~~Note 5. Deposits~~

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 ~~shows~~presents changes in the ~~maturities of time deposits for~~accretable discount on the ~~next five years and beyond~~loans acquired at fair value at the ~~date indicated (dollars in thousands).~~

Maturity Period: September 30,
2017
One Year or Less $ 43,884
Over One Through Two Years 66,257
Over Two Through Three Years 20,973
Over Three Through Four Years 12,111
Over Four Through Five Years 9,112
Over Five Years 8,129
Total $ 160,466

~~The balance in time deposits that meet or exceed the FDIC insurance limit of $250,000 totaled $47.9 million and $46.0 million as of September 30, 2017 and December 31, 2016, respectively.~~

dates indicated.


	Accretable Discount
(Dollars in Thousands)

December 31, 2021	$	726
Accretable Yield	(56)
March 31, 2022	$	670

Note 6.5. 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.

	(Dollars in thousands)
	September 30, 2017					December 31, 2016						March 31, 2022				December 31, 2021
	Amount		Weighted Average Rate			Amount		Weighted Average Rate				Amount		Weighted Average Rate		Amount		Weighted Average Rate
Short-term Borrowings
Federal Funds Purchased:
Average Balance Outstanding During the Period	$	11		-	%	$	307		0.65	%
Maximum Amount Outstanding at any Month End		550					6,000

FHLB Borrowings:
Balance at Period End		-		-			-		-
Average Balance Outstanding During the Period		-		-			596		0.67
Maximum Amount Outstanding at any Month End		-					6,160
(Dollars in thousands)											(Dollars in thousands)

Securities Sold Under Agreements to Repurchase:											Securities Sold Under Agreements to Repurchase:
Balance at Period End		24,662		0.25			27,027		0.24		Balance at Period End	$	39,219	0.17	%	$	39,266	0.17	%
Average Balance Outstanding During the Period		26,302		0.30			26,311		0.26		Average Balance Outstanding During the Period	37,884		0.20		43,988		0.22
Maximum Amount Outstanding at any Month End		27,817					30,095				Maximum Amount Outstanding at any Month End	39,219				52,777

Securities Collaterizing the Agreements at Period-End:											Securities Collaterizing the Agreements at Period-End:
Carrying Value		35,128					33,785				Carrying Value	58,757				59,867
Market Value		34,510					32,931				Market Value	54,703				59,339

Note ~~7. Other Borrowed Funds~~

~~Other borrowed funds consist of fixed rate advances from~~6. Fair Value Disclosure

FASB ASC 820 “Fair Value Measurement” defines fair value and provides the ~~Federal Home Loan Bank of Pittsburgh (“FHLB”). The following table sets forth~~framework for measuring fair value and required disclosures about fair value measurements. Fair value is defined as the ~~scheduled maturities of other borrowed funds~~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 ~~dates indicated.~~

transaction date. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used in valuation methods to determine fair value.

(Dollars in thousands)
September 30, 2017 December 31, 2016
Amount Weighted
Average
Rate Amount Weighted
Average
Rate
Due in One Year $ 3,500 1.35 % $ - - %
Due After One Year to Two Years 4,000 1.67 3,500 0.94
Due After Two Years to Three Years 6,000 1.88 4,500 1.41
Due After Three Years to Four Years 5,000 2.09 6,000 1.78
Due After Four Years to Five Years 3,000 2.23 6,000 1.97
Due After Five Years 3,000 2.41 8,000 2.27
Total $ 24,500 1.92 $ 28,000 1.80

Level 1 – Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company ~~maintained a credit arrangement~~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 ~~a maximum borrowing limit~~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 ~~approximately $286.3 million with~~valuation methodologies that would result in Level 3 classification include option pricing models, discounted cash flows, and other similar techniques.

This hierarchy requires the FHLB. This arrangement is subject to annual renewal, incurs no service charge, and is secured by a blanket security agreement on outstanding residential mortgage loans and the Company’s investment in FHLB stock. Under this arrangement the Company had available a variable rate Lineuse of ~~Credit~~observable market data when available. The level in the ~~amount of $143.1 million and $148.5 million as of September 30, 2017 and December 31, 2016, respectively.~~

~~The Company maintains a Borrower-In-Custody of Collateral line of credit agreement with~~fair value hierarchy within which the ~~Federal Reserve Bank (“FRB”) for $88.3 million~~fair value measurement falls is determined based on the lowest level input that ~~requires monthly certification of collateral,~~ is subject to annual renewal, incurs no service charge and is secured by commercial and consumer indirect auto loans. The Company also maintains multiple line of credit arrangements with various unaffiliated banks totaling $40.0 million. As of September 30, 2017 and December 31, 2016, no draws had been taken on these facilities.

~~Note 8. 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 Statement 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~~significant to the financial instrument for commitments to extend credit and standby and performance letters of credit written is represented by the contractual amount of 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.

fair value measurement.

The following table presents the ~~unused~~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, ~~credit~~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.


	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

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 ~~whose contracts~~would not represent ~~credit risk~~the full value of the Company.

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

(Dollars in thousands)
September 30,
2017 December 31,
2016
Standby Letters of Credit $ 49,889 $ 36,657
Performance Letters of Credit 4,396 2,471
Construction Mortgages 23,825 21,363
Personal Lines of Credit 6,271 5,905
Overdraft Protection Lines 6,183 5,680
Home Equity Lines of Credit 15,799 14,722
Commercial Lines of Credit 71,776 51,725
$ 178,139 $ 138,523


		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 ~~9. Fair Value Disclosure~~

~~FASB ASC 820 “Fair Value Measurement” defines fair value~~7. Commitments and ~~provides the framework for measuring fair value and required disclosures about fair value measurements. Fair value~~Contingent Liabilities

The Company is ~~defined as the price that would be received for an asset or paid~~a party to ~~transfer a liability in an orderly transaction between market participants~~financial instruments with off-balance-sheet risk in the ~~principal or most advantageous market~~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

Table of Contents

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

~~The three levels of fair value hierarchy are as follows:~~

~~Level I –~~

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.

corresponding reserve.

~~Level II –~~

Fair value is based on significant inputs, other than Level I inputs, that are observable either directly or indirectly for substantially the full term of the asset through corroboration with observable market data. Level II 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 III –~~

Fair value would be based on significant unobservable inputs. Examples of valuation methodologies that would result in Level III 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 unused and available credit balances of financial ~~assets measured~~instruments whose contracts represent credit risk at ~~fair value~~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 ~~recurring basis~~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 ~~reported~~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 ~~Statement~~Statements of Financial ~~Condition as~~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 ~~dates indicated, by level within the fair value hierarchy. The majority of the Company’s securities are included~~related lease liabilities in ~~Level II of the fair value hierarchy. Fair values for Level II securities were primarily determined by a third party pricing service using both quoted prices for similar assets, when available,~~Accrued Interest Payable 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.

(Dollars in thousands)
Fair Value
Hierarchy September 30,
2017 December 31,
2016
Available for Sales Securities:
U.S. Government Agencies Level II $ 58,380 $ 66,156
Obligations of States and Political Subdivisions Level II 37,808 35,735
Mortgage-Backed Securities - Government-Sponsored Enterprises Level II 17,859 2,619
Equity Securities - Mutual Funds Level I 510 507
Equity Securities - Other Level I 1,332 1,191
Total Available for Sale Securities $ 115,889 $ 106,208

~~The following table presents the financial assets measured at fair value on a nonrecurring basis~~Other Liabilities on the Consolidated ~~Statement~~Statements of Financial ~~Condition as~~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 by level within the fair value hierarchy. The table also presents the significant unobservable inputs used in the fair value measurements. Impaired loans that are collateral dependent are written down to fair value through the establishmentindicated.


	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

Table of specific reserves. Techniques used to value the collateral that secure the impaired loans include quoted market prices for identical assets classified as Level I inputs or observable inputs, employed by certified appraisers, for similar assets classified as Level II inputs. In cases where valuation techniques included inputs that are unobservable and are based on estimates and assumptions developed by management based on the best information available under each circumstance, the asset valuation is classified as Level III inputs.

Contents

(Dollars in thousands)
Fair Value at Significant
Financial Asset Fair Value
Hierarchy September 30,
2017 December 31,
2016 Valuation
Techniques Significant
Unobservable Inputs Unobservable
Input Value
Impaired Loans Level III $ 2,271 $ 2,497 Market Comparable Properties Marketability Discount 10% to 30% ⁽¹⁾
OREO Level III 169 - Market Comparable Properties Marketability Discount 10% to 50% ⁽¹⁾

⁽¹⁾		~~Range includes discounts taken since appraisal and estimated values.~~

Impaired loans are evaluated when a loan is identified as impaired and valued at the lower of cost or fair value at that time. Fair value is measured based on the value of the collateral securing these loans and is classified as Level III in the fair value hierarchy. At September 30, 2017 and December 31, 2016, the fair value of impaired loans consists of the loan balances of $3.3 million and $3.7 million, respectively, less their specific valuation allowances of $1.0 million and $1.2 million, respectively.

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


	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 September 30, 2017, one residential real estate loan for $14,000 moved into OREO. During the nine months ended September 30, 2017, two residential real estate loans for $155,000 and $14,000 moved into OREO. During the nine months ended September 30, 2016, two commercial real estate properties for $3.2 million were foreclosed on, moved into OREO, evaluated for fair value and recorded a prior first quarter gain on the valuation adjustment on foreclosed real estate for approximately $566,000. This recognized gain on the valuation adjustment was supported by independent appraisals of the two properties. One property was subject to a tentative sales agreement with a current customer which closed in the prior year. The other property was transferred into premises and equipment ofMarch 31, 2022, the Company ~~due to its location and the Company’s need of~~entered into a new ~~headquarters location.~~

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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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 Company employs simulation modeling in determining the estimated fair value of financial instruments for which quoted market prices are not available, based upon the following assumptions:~~

~~Cash and Due From Banks, Restricted Stock, Bank-Owned Life Insurance, Accrued Interest Receivable, Short-Term Borrowings, and Accrued Interest Payable~~

~~The fair value is equal to the current carrying value.~~

~~Investment Securities~~

The fair value of investment securities is equal to the available quoted market price. If no quoted market price is available, fair value is estimated using the quoted market price for similar securities or matrix pricing, which is a mathematical technique, used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted prices.

~~Loans Receivable~~

For variable-rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values. Fair values for certain mortgage loans and other consumer loans are based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted for differences in loan characteristics. Fair values for other loans are estimated using discounted cash flow analyses, using market interest rates for comparable loans. Fair values for nonperforming loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

~~Deposit Liabilities~~

The fair values disclosed for demand deposits, are, by definition, equal to the amount payable on demand at the reporting date. The carrying amounts of variable-rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates on comparable instruments to a schedule of aggregated expected monthly maturities on time deposits.

~~Borrowed Funds~~

~~Fair values of borrowed funds are estimated using discounted cash flow analyses based on current market rates for similar types of borrowing arrangements.~~

~~Commitments to Extend Credit~~

These financial instruments are generally not subject to sale and estimated fair values are not readily available. The carrying value, represented by the net deferred fee arising from the unrecognized commitment or letter of credit, and the fair value determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into similar agreements with similar credit risk, are not considered material for disclosure. The contractual amounts of unfunded commitments and letters of credit are presented in Note 8.

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

(Dollars in thousands)
September 30, 2017 December 31, 2016
Fair Value
Hierarchy Carrying
Value Fair
Value Carrying
Value Fair
Value
Financial Assets:
Cash and Due From Banks:
Interest Bearing Level I $ 31,979 $ 31,979 $ 7,699 $ 7,699
Non-Interest Bearing Level I 11,766 11,766 6,583 6,583
Investment Securities:
Available for Sale See Above 115,889 115,889 106,208 106,208
Loans, Net Level III 695,718 706,433 674,094 684,777
Restricted Stock Level II 3,712 3,712 3,665 3,665
Bank-Owned Life Insurance Level II 19,035 19,035 18,687 18,687
Accrued Interest Receivable Level II 2,572 2,572 2,441 2,441

Financial Liabilities:
Deposits Level II 762,374 738,836 698,218 697,806
Short-term Borrowings Level II 24,662 24,662 27,027 27,027
Other Borrowed Funds Level II 24,500 24,671 28,000 28,098
Accrued Interest Payable Level II 413 413 334 334

Note ~~10.~~9. Other Noninterest Expense

~~In accordance with SEC Regulation S-X, other noninterest expense that exceeds 10% of total noninterest expense is required to be disclosed by detailed expenses.~~

The details ~~for~~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 2 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 ~~statement~~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

Table of ~~income~~Contents

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 ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2022 and ~~2016, are~~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 ~~follows:~~

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.

(Dollars in thousands)
Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Other Noninterest Expense
Non-employee compensation $ 101 $ 135 $ 301 $ 403
Printing and supplies 107 88 310 296
Postage 36 55 166 158
Telephone 99 108 287 289
Charitable contributions 30 18 111 87
Dues and subscriptions 54 56 172 148
Loan expenses 110 87 271 231
Meals and entertainment 41 36 108 94
Travel 36 41 105 110
Training - 10 20 28
Miscellaneous 179 236 581 698
Total Other Noninterest Expense $ 793 $ 870 $ 2,432 $ 2,542

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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, ~~2016.~~

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;~~

~~Changes in 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;~~

~~Our ability to manage the risks involved in our business;~~

~~Our ability to integrate the operations of businesses we acquire;~~

~~Inflation, market and monetary fluctuations;~~

~~Our ability to control costs and expenses; and~~

~~Changes in federal and state legislation and regulation applicable to our business.~~

•General and local economic conditions;

•The ~~Company uses~~scope and duration of economic contraction as a result of the ~~current statutory tax rate~~COVID-19 pandemic and its effects on the Company’s business and that of ~~34.0%~~the Company’s customers;

•Government action in response to ~~value~~the COVID-19 pandemic and its ~~deferred tax assets~~effects on the Company's business and ~~liabilities. On April 26, 2017,~~that of the ~~Trump Administration announced a comprehensive tax reform proposal that includes a reduction~~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 ~~U.S. corporate income tax rate to 15.0%. The latest tax reform discussion from~~Company’s periodic reports as filed with the Trump Administration has the proposed reduction in the U.S. corporate income tax rate to 20.0%. If corporate tax rates were reduced, management expects the Company would be required to record an initial charge against earnings to lower the carrying amountSecurities and Exchange Commission.

Many of ~~its net deferred tax asset,~~these risks and ~~then, going forward, would record lower tax provisions on an ongoing basis. The proposal is at the beginning stages of negotiations~~uncertainties have been elevated by and ~~will need~~may continue to be ~~addressed~~elevated by ~~both houses of Congress. It is too early in~~ the ~~process~~COVID-19 pandemic. The ability to ~~determine if any~~predict the impact of the ~~proposals are actionable. Accordingly, management cannot assess~~ongoing COVID-19 pandemic on the ~~effect a change in the corporate tax rate would have on~~ Company’s future operating results ~~or financial position at the present time.~~

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 ~~Inc.~~ is a bank holding company established in ~~2006.~~2006 and headquartered in Carmichaels, Pennsylvania. CB Financial’s business activity is conducted primarily through its wholly owned ~~banking~~bank subsidiary, Community Bank.

The Bank is a Pennsylvania-chartered commercial bank headquartered in Carmichaels, Pennsylvania. The Bank operates from ~~16 offices~~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~~wholly owned subsidiary that is a full-service, independent insurance ~~agency.~~

On October 31, 2014, the Company completed its merger with FedFirst Financial Corporation (“FedFirst” or the “merger”), the holding company for First Federal Savings Bank, a community bank basedagency located in ~~Monessen, Pennsylvania. The merger resulted in the addition of five branches and expanded the Company’s reach into Fayette and Westmoreland counties in southwestern Pennsylvania.~~

~~The Bank’s website address is www.communitybank.tv. Information on the website is not and should not be considered a part of this Form 10-Q.~~

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 ~~September 30, 2017~~March 31, 2022, compared to the financial condition as of December 31, ~~2016~~2021 and the consolidated results of operations for the three ~~and nine~~ months ended ~~September 30, 2017 and 2016.~~

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, ~~fees and charges on loans,~~ 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, ~~other real estate owned,~~ advertising, ~~and promotion, stationery and supplies,~~ deposit and general insurance and other expenses.

Financial institutions like us, in general, are significantly affected by economic conditions, competition, and the monetary and fiscal policies of the federal government. Lending activities are influenced by the demand for and supply of housing, competition among lenders, interest rate conditions, and funds availability. Our operations and lending are principally concentrated in ~~the~~ southwestern Pennsylvania and Ohio Valley market ~~area.~~

~~Statement~~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 ~~$62.3~~$13.2 million, or ~~7.4%~~0.9%, to ~~$908.3 million~~$1.44 billion at ~~September 30, 2017~~March 31, 2022, compared to ~~$846.1 million~~$1.43 billion at December 31, ~~2016.~~

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 ~~$29.5~~$3.9 million, or ~~206.3%~~3.3%, to ~~$43.7~~$123.6 million at ~~September 30, 2017~~March 31, 2022, compared to ~~$14.3~~$119.7 million at December 31, ~~2016. This~~2021. The change is primarily due to an increase in deposits as further described below in the ~~result~~Liabilities section. The increase was partially offset by purchases of ~~deposit growth.~~

~~Investment~~ securities ~~classified as available-for-sale~~detailed in the below Securities section.

•Securities increased ~~$9.7~~$6.1 million, or ~~9.1%~~2.7%, to ~~$115.9~~$231.1 million at ~~September 30, 2017~~March 31, 2022, compared to ~~$106.2~~$225.0 million at December 31, ~~2016. This increase~~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 ~~result~~equity securities portfolio, which is primarily comprised of ~~new security purchases funded by deposit growth.~~

~~Loans, net, increased $21.6~~bank stocks.

Payroll Protection Program (“PPP”) Update

•PPP loans decreased $16.3 million ~~or 3.2%,~~ to ~~$695.7~~$8.2 million at ~~September 30, 2017~~March 31, 2022 compared to ~~$674.1~~$24.5 million at December 31, ~~2016. This~~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 ~~net~~consistent loan ~~originations~~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 ~~$18.3 million~~average loans on ~~construction~~an annualized basis. Net charge-offs for the three months ended March 31, 2021 were $46,000, or 0.02% of average loans ~~$4.9 million~~ on ~~commercial~~an annualized basis.

•Nonperforming loans, which includes nonaccrual loans, accruing loans past due 90 days or more, and ~~industrial~~accruing loans ~~and $2.3 million on commercial real estate loans, partially offset by net loan payoffs of $3.2 million on residential mortgage loans and $380,000 in consumer loans (mainly indirect auto loans).~~

~~Premises and equipment, net, increased $2.4 million, or 17.2%, to $16.6~~that are considered troubled debt restructurings, were $7.3 million at ~~September 30, 2017~~March 31, 2022 compared to ~~$14.1~~$7.3 million at December 31, ~~2016. This is due~~2021. Nonperforming loans to ~~the additions related~~total loans ratio was 0.72% at March 31, 2022 compared to ~~the new Operations Center that was placed into service in the second quarter. Total premises and equipment capitalized for the new Operations Center totaled $5.3 million.~~

~~Liabilities.~~ ~~Total liabilities increased $58.6 million, or 7.7%,~~0.71% at December 31, 2021.

Other

•Intangible Assets decreased $445,000 to ~~$815.2~~$4.9 million at ~~September 30, 2017~~March 31, 2022 compared to ~~$756.6~~$5.3 million at December 31, ~~2016.~~

~~Total deposits~~2021 due to amortization expense of $445,000 recognized during the period.

•Accrued Interest Receivable and Other Assets increased ~~$64.2~~$3.7 million, or ~~9.2%,~~28.8% to ~~$762.4~~$16.5 million at ~~September 30, 2017~~March 31, 2022, compared to ~~$698.2~~$12.9 million at December 31, ~~2016.~~ 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 ~~were increases~~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 ~~$33.2 million in~~March 31, 2022 compared to $1.23 billion at December 31, 2021. Noninterest bearing demand deposits, NOW accounts ~~$22.6 million in demand deposits, $9.7 in~~and savings accounts increased $14.3 million, $7.9 million and ~~$5.4~~$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 ~~partially offset by decreases of $4.4~~decreased $54.6 million, primarily in ~~brokered~~time deposits, ~~and $2.4 million in money market accounts. Due~~for the three months ended March 31, 2022 compared to the rising interest rate environment, the Bank has been selective on offering promotional interest rates and has concentrated its efforts on increasing noninterest-bearing accounts by building strong customer relationships. In addition, school district and municipal deposits increased $27.1 million due to building stronger customer relationships with these depositors and new accounts.

three months ended December 31, 2021.

Borrowed Funds

•Short-term borrowings decreased ~~$2.4 million,~~$47,000, or ~~8.8%~~0.12%, to ~~$24.7~~$39.2 million at ~~September 30, 2017~~March 31, 2022, compared to ~~$27.0~~$39.3 million at December 31, ~~2016.~~2021. At ~~September 30, 2017,~~March 31, 2022 and December 31, 2021, short-term borrowings were comprised ~~of $24.7 million~~entirely of securities sold under agreements to repurchase, ~~compared to $27.0 million at December 31, 2016. The decrease is~~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. ~~Other borrowed funds~~

Stockholders’ Equity. Stockholders’ equity decreased ~~by $3.5~~$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 ~~a maturing FHLB long-term borrowing that was retired~~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. ~~As a result~~

•The Company repurchased $3.4 million of ~~current period activity, the weighted average interest rate~~its common stock as part of its stock repurchase program that was completed on ~~long-term borrowings increased by 12 basis points to 1.92%.~~

~~Stockholders’ Equity.~~ ~~Stockholders’ equity increased $3.7 million, or 4.1%, to $93.2 million~~February 15, 2022

•Book value per share (GAAP) was $23.69 at ~~September 30, 2017~~March 31, 2022 compared to ~~$89.5 million~~$25.31 at December 31, ~~2016. During the period, net income was $5.6 million and the Company paid $2.7 million~~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 ~~dividends to stockholders.~~

this Report.

Consolidated Results of Operations for the Three Months Ended ~~September 30, 2017~~March 31, 2022 and ~~2016~~

2021

Overview. Net income ~~increased $489,000, to $2.1~~was $3.0 million for the three months ended ~~September 30, 2017~~March 31, 2022, an increase of $202,000 compared to ~~$1.6~~net income of $2.8 million for the three months ended September 30, 2016. The quarterly results benefited from an increase in interest income related to loan growth in the current quarter. In addition, improving credit quality reduced the provision for loan losses and the settlements of prior loan collection efforts yielded a decrease in noninterest expense during the current quarter. Quarterly pre-tax income increased by $792,000 due in part to the successful resolution of prior loan collection efforts and an increase in net interest income.

March 31, 2021.

Net Interest and Dividend Income. Net interest and dividend income ~~increased $377,000,~~decreased $84,000, or ~~5.4%~~0.8%, to ~~$7.4~~$9.9 million for the three months ended ~~September 30, 2017~~March 31, 2022 compared to ~~$7.0~~$10.0 million for the three months ended ~~September 30, 2016.~~

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 ~~increased $529,000,~~decreased $372,000, or ~~6.9%~~3.4%, to ~~$8.2~~$10.6 million for the three months ended ~~September 30, 2017~~March 31, 2022 compared to ~~$7.7~~$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 ~~September 30, 2016. Interest income on loans increased $366,000~~March 31, 2022 compared to $10.1 million for the three months ended ~~September 30, 2017~~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 ~~September 30, 2016. Average~~March 31, 2021.

��Interest and fee income on PPP loans ~~increased by $13.0 million during the current quarter. The loan portfolio had an increase of 12 basis points in yield. Contributing to the yield increase this quarter~~ was ~~the accretion on the acquired loan portfolio credit mark. The positive impact of the accretion~~$445,000 for the three months ended ~~September 30, 2017 was $127,000, or 8 basis points,~~March 31, 2022 and contributed 13 bps to loan yield, compared to ~~$87,000, or 5 basis points,~~$676,000 for the three months ended ~~September 30, 2016.~~ March 31, 2021, which contributed 5 bps to loan yield.

◦The ~~remaining~~impact of the accretion of the credit mark ~~balance for~~on acquired ~~loans~~loan portfolios was $994,000 as of September 30, 2017. Interest income on taxable securities increased $99,000 mainly due to an increase of $29.3 million in the average balance for taxable securities in the current period. The increase in the average balance offset a decrease of 32 basis points in yield on taxable securities. This is a result of new purchases with lower prevailing yields replacing security calls and maturities with higher yields within the portfolio. Interest income on Federal funds sold increased to $64,000$56,000 for the three months ended ~~September 30, 2017~~March 31, 2022 compared to ~~$3,000~~$138,000 for the three months ended ~~September 30, 2016. This is the result of the increase in interest rates~~March 31, 2021, or 2 bps in the ~~last year and the increases~~current period compared to 6 bps in the ~~average interest-earning balances of $23.0 million as a result of deposit growth~~prior period.

◦Interest income on taxable investment securities increased $259,000, or 40.1%, to $905,000 for the three months ended September 30, 2017. In addition, other interest and dividend income increased $35,000 as a result of increased interest earned with correspondent deposit banks and FHLB dividends in the current period. Interest income on securities exempt from federal tax decreased $32,000 dueMarch 31, 2022 compared to deploying proceeds from security calls and maturities into lower yielding taxable security purchases in the current period. There was a decrease of $2.0 million in the average balance on securities exempt from federal tax and a decrease of 30 basis points in yield as a result of security calls and maturities that had higher yields.

~~Interest expense increased $152,000, or 21.5%, to $860,000~~$646,000 for the three months ended ~~September 30, 2017 compared~~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 ~~$708,000~~$723,000 for the three months ended ~~September 30, 2016.~~ March 31, 2022 compared to $1.0 million for the three months ended March 31, 2021.

◦Interest expense on deposits ~~increased $163,000 due~~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 ~~increase~~18

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bp, or 41.4%, decrease in average ~~interest-bearing deposits of $57.4 million, primarily due~~cost compared to ~~increases in interest-bearing demand deposits,~~the three months ended March 31, 2021. In addition, average time deposits and ~~savings accounts. The~~the related average cost decreased $55.1 million and 30 bps, respectively.

Table of interest-bearing deposits increased 6 basis points. This was related to the multiple interest rate hikes over the last year by the Federal Reserve Board (“FRB”). Interest expense on other borrowed funds decreased $9,000 primarily due to a FHLB long-term borrowing for $3.5 million that matured in the first quarter. Interest expense on short-term borrowings decreased $1,000 mainly due to an average balance decrease of $1.1 million on securities sold under agreements to repurchase.

Contents

Average Balances and Yields.The following ~~table presents~~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. ~~Tax-equivalent~~FTE yield adjustments have been made for tax exempt loan and securities interest income utilizing a marginal federal income tax rate of ~~34%.~~21.0% for the periods presented. As such, amounts will not agree to income as reported in the consolidated financial statements. ~~Average balances for loans are net of the allowance for loan losses, but include non-accrual loans.~~ 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.

(Dollars in thousands) (Unaudited)
Three Months Ended September 30,
2017 2016
Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost ⁽¹⁾ Balance Dividends Cost ⁽¹⁾
Assets:
Interest-Earning Assets:
Loans, Net $ 684,384 $ 7,480 4.34 % $ 671,346 $ 7,120 4.22 %
Investment Securities
Taxable 80,791 386 1.91 51,460 287 2.23
Exempt From Federal Tax 37,390 340 3.64 39,428 388 3.94
Other Interest-Earning Assets 32,553 139 1.69 9,296 43 1.84
Total Interest-Earning Assets 835,118 8,345 3.96 771,530 7,838 4.04
Noninterest-Earning Assets 61,859 54,484
Total Assets $ 896,977 $ 826,014

Liabilities and
Stockholders' equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits $ 138,742 92 0.26 % $ 112,679 49 0.17 %
Savings 131,420 61 0.18 121,439 56 0.18
Money Market 135,214 88 0.26 138,033 87 0.25
Time Deposits 160,456 479 1.18 136,258 365 1.07
Total Interest-Bearing Deposits 565,832 720 0.50 508,409 557 0.44

Borrowings 50,741 140 1.09 57,791 151 1.04
Total Interest-Bearing Liabilities 616,573 860 0.55 566,200 708 0.50

Noninterest-Bearing Demand Deposits 183,061 165,422
Other Liabilities 4,361 4,199
Total Liabilities 803,995 735,821

Stockholders' Equity 92,982 90,193
Total Liabilities and
Stockholders' Equity $ 896,977 $ 826,014

Net Interest Income $ 7,485 $ 7,130

Net Interest Rate Spread ⁽²⁾ 3.41 % 3.54 %
Net Interest-Earning Assets ⁽³⁾ $ 218,545 $ 205,330
Net Interest Margin ⁽⁴⁾ 3.56 3.68
Return on Average Assets 0.91 0.76
Return on Average Equity 8.81 6.95
Average Equity to Average Assets 10.37 10.92
Average Interest-Earning Assets to
Average Interest-Bearing Liabilities 135.45 136.26


	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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	~~(1)~~	~~Annualized.~~

~~(2)~~

~~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.~~

~~(3)~~

~~Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.~~

~~(4)~~

Net interest margin represents net interest income divided by average total interest-earning assets. Interest income and yields are on a fully tax equivalent basis utilizing a marginal tax rate of 34%.

Rate/Volume Analysis.The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. ~~Tax-equivalent~~FTE yield adjustments have been made for tax exempt loan and securities income utilizing a marginal federal income tax rate of ~~34%~~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.

(Dollars in thousands) (Unaudited)
Three Months Ended September 30, 2017
Compared To
Three Months Ended September 30, 2016
Increase (Decrease) Due to
Volume Rate Total

Interest and Dividend Income:
Loans, net $ 155 $ 205 $ 360
Investment Securities:
Taxable 145 (46 ) 99
Exempt From Federal Tax (19 ) (29 ) (48 )
Other Interest-Earning Assets 100 (4 ) 96
Total Interest-Earning Assets 381 126 507

Interest Expense:
Deposits 81 82 163
Borrowings (18 ) 7 (11 )
Total Interest-Bearing Liabilities 63 89 152
Change in Net Interest Income $ 318 $ 37 $ 355

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 ~~$300,000~~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 ~~September 30, 2017~~March 31, 2022, compared to ~~$450,000~~$3.2 million for the three months ended ~~September 30, 2016. Net charge-offs for the three months ended September 30, 2017 were $227,000, which included $149,000 of net charge-offs on automobile loans, compared~~March 31, 2021.

•Insurance commissions increased $203,000 to $175,000 of net charge-offs for the three months ended September 30, 2016, which included $145,000 of net charge-offs on automobile loans. The increase in net charge-offs during the current period was due to charge-offs of $67,000 for residential mortgages and $52,000 for consumer loans. Management analyzes the loan portfolio on a quarterly basis to determine the adequacy of the allowance for loan losses and the need for additional provisions for loan losses. This was due to improvements in the loan department along with loan personnel experience, and improvements in the local economy which had a positive impact on the qualitative factors within the allowance calculation.

~~Noninterest Income~~. ~~Noninterest income decreased $3,000, or 0.2%, and remained constant at~~ $1.8 million for the three months ended ~~September 30, 2017 and 2016. There was a decrease~~March 31, 2022 compared to $1.6 million for the three months ended March 31, 2021. The increase in ~~the net gains on the sales of residential mortgage loans of $113,000. The decrease in gains~~insurance commissions was primarily due to a decrease in the number of loans originated and subsequently sold to the FHLB as part of the Mortgage Partnership Finance® (“MPF®”) program. The MPF® program enables member financial institutions to offer competitive interest rates for fixed-rate mortgage loans without assuming any of the interest rate risk associated with a long-term asset. Net gains on the sales of investments decreased $12,000 due to the sale of equity securities in 2016. These sales were transacted to recognize capital gains that will be offsetdriven by a capital loss carry forward deferred tax asset that was acquired in the merger with FedFirst Financial Corporation in October 2014 (“merger”). The capital loss carry forward deferred tax asset was fully recognized in the prior quarter. In addition, there was a decrease of $6,000 in income from bank-owned life insurance due to lower crediting rates. Mainly offsetting the decreases were insurance commissions from Exchange Underwriters that increased $82,000 due to increased commercial lines commission and fee income and contingency fees ~~received in the current period.~~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.~~ charges which resulted from the higher than lock-in amounts received.

•Net ~~gains~~(loss) gain on ~~purchased tax credits increased $14,000 due~~securities decreased $454,000 to a $7,000 loss for the ~~purchased Pennsylvania shares tax credits being~~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 ~~current period.~~ 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 ~~commissions increased $13,000 due~~income was $65,000 for the three months ended March 31, 2022 compared to ~~miscellaneous income~~$180,000 for the three months ended March 31, 2021, the Company recognized ~~from forfeited funds from an employee flexible spending account (“FSA”) from prior years. Service fees~~a recapture of a temporary impairment on ~~deposit accounts increased $11,000 due to increased non-sufficient funds (“NSF”) fees due to customer overdrafts of deposit accounts and check card fees~~mortgage servicing rights in the current ~~quarter.~~

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 ~~$268,000,~~$739,000, or ~~4.3%~~7.9%, to ~~$5.9~~$8.7 million for the three months ended ~~September 30, 2017~~March 31, 2022 compared to ~~$6.2~~$9.4 million for the three months ended ~~September 30, 2016. Other real estate owned expense decreased $353,000~~March 31, 2021, primarily due to the ~~final resolutions~~implementation of ~~loan collection efforts through~~branch optimization initiatives completed during 2021 which established a lower expense base. Partially offsetting the sale of a mineral rights interest for $186,000, bankruptcy court settlement for $86,000 and mortgage insurance proceeds for $85,000. The aforementioned items were proceeds from previously sold OREO properties. The additional proceeds represent contingent gains recorded by the Company when the proceeds were received. These items are considered non-recurring. Other noninterestlower expense decreased $77,000 primarily due to reduced overdraft and debit card fraud losses, postage, employee training, telephone and travel. Legal and professional fees decreased $59,000 due to the above mentioned mortgage insurance proceeds, in which part of the insurance proceeds were utilized to offset legal fees attributed to the problem loan relationship. Contracted services decreased $36,000 as a result of combining services at the new Ralph J. Sommers Jr. Operations Center (“Operations Center”). Occupancy decreased $18,000 primarily due to decreases in rent expense and accelerated depreciation taken on leasehold improvementsbase in the ~~Bank’s former operations center that did not transfer over to the new Operations Center~~first quarter were investment in the current quarter. The new Operations Center was completed and placed into bank operations during the second quarter. The Federal Deposit Insurance Corporation (“FDIC”) assessment expense decreased $8,000 due to an assessment factor reduction by the FDIC in the computation of the insurance assessment. Partially offsetting these favorable variances were salariesexecutive leadership tasked with implementing growth initiatives.

•Salaries and employee benefits ~~that increased $221,000 primarily due~~decreased $329,000 to normal salary increases, employee group health insurance, retirement benefits expense and employee stock options. Pennsylvania shares tax, which is calculated based on the Bank’s stockholders’ equity, increased $48,000 due to the increase in equity that was calculated on the current year shares tax return. Advertising expense increased $8,000 due to the Bank’s current marketing initiatives.

~~Income Tax Expense.~~ ~~Income taxes increased $303,000 to $910,000~~$4.6 million for the three months ended ~~September 30, 2017~~March 31, 2022 compared to ~~$607,000~~$4.9 million for the three months ended ~~September 30, 2016.~~March 31, 2021. The ~~effective tax rate~~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 ~~September 30, 2017 was 30.6%~~March 31, 2022 compared to ~~27.8%~~$710,000 for the three months ended ~~September 30, 2016.~~March 31, 2021. The ~~increase in income taxes was~~decrease is primarily due to ~~an increase of $792,000 in pre-tax income. The increase~~branch consolidations and divestitures in the ~~effective~~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 ~~rate~~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 change in the securities portfolio composition of new purchases of taxable securities replacing tax-exempt security calls and maturities within the portfolio. In addition, the capital loss carry forward deferredprior period income tax ~~asset has been fully recognized and the expiration of the low income housing~~adjustment that resulted from amended tax ~~credit program in the prior quarter, which attributed to the increase in both income taxes and the effective tax rate.~~

~~Results of Operations for the Nine Months Ended September 30, 2017 and 2016~~

~~Overview.~~ ~~Net income increased $11,000 and remained constant at $5.6 million, for the nine months ended September 30, 2017 and 2016, respectively.~~

~~Net Interest Income.~~ ~~Net interest income decreased $161,000 , or 0.7%, to $21.5 million for the nine months ended September 30, 2017 compared to $21.6 million for the nine months ended September 30, 2016.~~

Interest and dividend income increased $196,000, or 0.8%, to $24.0 million for the nine months ended September 30, 2017 compared to $23.8 million for the nine months ended September 30, 2016. Interest income on taxable securities increased $215,000 despite a decrease of 38 basis points in yield from new purchases with lower prevailing yields. The average balance for taxable securities increased $25.9 million for the nine months ended September 30, 2017. Federal Funds sold increased $104,000 for the nine months ended September 30, 2017. This is the direct result of the end of the historically low interest rates in the last year and the increases in the average interest-earning balances to $16.1 millionreturns as a result of ~~deposit growth for~~ the nine months ended September 30, 2017. Other interest and dividend income increased $82,000 primarily due to increased interest earned with correspondent deposit banks and FHLB dividends in the current period. Interest income on securities exempt from federal tax decreased $122,000 due to deploying proceeds from security calls and maturities into purchasing taxable securities in the current year. There was a decrease of $2.7 million in the average balance on securities exempt from federal tax and a decrease of 38 basis points in yield as a result of security calls and maturities that had higher yields. Interest income on loans decreased $83,000 primarily due to accretion on the acquired loan portfolio credit mark for the nine months ended September 30, 2017 of $533,000, or 16 basis points compared to $860,000, or 26 basis points for the nine months ended September 30, 2016. There was an increase in average loans outstanding of $471,000. The increase in average loans was due to the loan originations within the entire loan portfolio in the later part of the current period.

CARES Act.

Interest expense increased $357,000, or 16.9%, to $2.5 million for the nine months ended September 30, 2017 compared to $2.1 million for the nine months ended September 30, 2016. Interest expense on deposits increased $372,000 due to recent rate increases and an increase in average interest-bearing deposits of $33.7 million which we attribute primarily to time deposits, interest-bearing demand deposits and savings accounts. The average cost of interest-bearing deposits increased 7 basis points. In addition, short-term borrowings increased $9,000 in the current period due to increased interest rates on securities sold under agreements to repurchase. Interest expense on other borrowed funds decreased $22,000 due to a decrease in long-term borrowings as a result of a FHLB long-term borrowing for $3.5 million that matured in the current period.

~~Average Balances and Yields~~. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. Average balances are derived from daily balances over the periods indicated. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Tax-equivalent yield adjustments have been made for tax exempt loan and securities income utilizing a marginal federal tax rate of 34%. Average balances for loans are net of the allowance for loan losses, but include non-accrual loans. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented and are expressed in annualized rates.

(Dollars in thousands) (Unaudited)
Nine Months Ended September 30,
2017 2016
Interest Interest
Average and Yield/ Average and Yield/
Balance Dividends Cost ⁽¹⁾ Balance Dividends Cost ⁽¹⁾
Assets:
Interest-Earning Assets:
Loans, Net $ 673,922 $ 21,896 4.34 % $ 673,451 $ 21,998 4.36 %
Investment Securities
Taxable 79,432 1,133 1.90 53,580 918 2.28
Exempt From Federal Tax 36,177 987 3.64 38,902 1,172 4.02
Other Interest-Earning Assets 27,643 325 1.57 11,533 139 1.61
Total Interest-Earning Assets 817,174 24,341 3.98 777,466 24,227 4.16
Noninterest-Earning Assets 58,709 53,806
Total Assets $ 875,883 $ 831,272

Liabilities and
Stockholders' equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits $ 127,736 239 0.25 % $ 114,959 147 0.17 %
Savings 128,583 177 0.18 123,079 169 0.18
Money Market 137,906 270 0.26 142,820 268 0.25
Time Deposits 159,232 1,364 1.15 138,917 1,094 1.05
Total Interest-Bearing Deposits 553,457 2,050 0.50 519,775 1,678 0.43

Borrowings 51,505 420 1.09 54,533 435 1.07
Total Interest-Bearing Liabilities 604,962 2,470 0.55 574,308 2,113 0.49

Noninterest-Bearing Demand Deposits 175,401 163,815
Other Liabilities 3,822 4,086
Total Liabilities 784,185 742,209

Stockholders' Equity 91,698 89,063
Total Liabilities and
Stockholders' Equity $ 875,883 $ 831,272

Net interest income $ 21,871 $ 22,114

Net Interest Rate Spread ⁽²⁾ 3.43 % 3.67 %
Net Interest-Earning Assets ⁽³⁾ $ 212,212 $ 203,158
Net Interest Margin ⁽⁴⁾ 3.58 3.80
Return on Average Assets 0.85 0.89
Return on Average Equity 8.12 8.34
Average Equity to Average Assets 10.47 10.71
Average Interest-Earning Assets to
Average Interest-Bearing Liabilities 135.08 135.37

~~(1)~~

~~Annualized.~~

~~(2)~~

~~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.~~

~~(3)~~

~~Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.~~

~~(4)~~

~~Rate/Volume Analysis~~. The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. 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.

(Dollars in thousands) (Unaudited)
Nine Months Ended September 30, 2017
Compared To
Nine Months Ended September 30, 2016
Increase (Decrease) Due to
Volume Rate Total

Interest and Dividend Income:
Loans, net $ (1 ) $ (101 ) $ (102 )
Investment Securities:
Taxable 387 (172 ) 215
Exempt From Federal Tax (79 ) (106 ) (185 )
Other Interest-Earning Assets 189 (3 ) 186
Total Interest-Earning Assets 496 (382 ) 114

Interest Expense:
Deposits 87 285 372
Borrowings (23 ) 8 (15 )
Total Interest-Bearing Liabilities 64 293 357
Change in Net Interest Income $ 432 $ (675 ) $ (243 )

~~Provision for Loan Losses.~~ The provision for loan losses decreased $580,000 to $1.0 million, for the nine months ended September 30, 2017, of which $250,000 was attributed to the acquired loan portfolio, compared to $1.6 million of provision for loan losses for the nine months ended September 30, 2016. Net charge-offs for the nine months ended September 30, 2017 were $667,000, which included $435,000 of net charge-offs on automobile loans, compared to net charge-offs of $625,000 for the nine months ended September 30, 2016, which included $375,000 of net charge-offs on automobile loans. Management analyzes the loan portfolio on a quarterly basis to determine the adequacy of the allowance for loan losses and the need for an increase or reduction in provision for loan losses for the nine months ended September 30, 2017. The decrease in provision is mainly attributed to loan payoffs and improving credit quality of impaired loans resulting in an average balance decrease of approximately $4.0 million in impaired loans for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016. There was sizable loan growth and increased performance in substandard loans which resulted in upgrades to credit quality risk ratings as compared to the prior year. As the acquired loan portfolio has loan payoffs, paydowns and accretion of the credit mark, the need for additional provision may be required based on our loan loss analysis.

~~Noninterest Income~~. Noninterest income increased $324,000, or 5.9%, to $5.9 million for the nine months ended September 30, 2017 compared to $5.5 million at September 30, 2016. There was a $395,000 increase in insurance commissions from Exchange Underwriters due to additional contingency fees received and an increase in commercial commission and fee income received in the current period. Net gains on the sales of investments increased $52,000 due to the sale of equity securities. These sales were transacted to recognize capital gains that will be offset by a capital loss carry forward deferred tax asset that was acquired in the merger. The capital loss carry forward deferred tax asset has been fully recognized in the current period. Net gains on purchased tax credits increased $43,000 due to purchased Pennsylvania shares tax credits being recognized in the current period. Service fees on deposit accounts increased $28,000 primarily due to increased NSF fees due to customer overdrafts of deposit accounts and check card fees. There was a decrease in the net gains on sales of residential mortgage loans of $170,000. The decrease in gains was primarily due to a decrease in the number of loans originated and subsequently sold to the FHLB as part of the Mortgage Partnership Finance® (“MPF®”) program. The MPF® program enables member financial institutions to offer competitive interest rates for fixed-rate mortgage loans without assuming any of the interest rate risk associated with a long-term asset. Income from bank-owned life insurance decreased $13,000 due to lower crediting rates in the current period. Other miscellaneous income decreased $6,000 due to student loan servicing fees and an increase in amortization on mortgage servicing rights related to loans sold to the FHLB. This was partially offset by an increase in the servicing income received from mortgage loans sold to the FHLB as part of the MPF® program. Other commissions decreased $5,000 primarily due to decreases in merchant services and check sales fees in the current period, partially offset by an increase in miscellaneous income recognized from forfeited funds from an employee FSA from prior years.

~~Noninterest Expense.~~ Noninterest expense increased $651,000, or 3.7%, to $18.4 million for the nine months ended September 30, 2017 compared to $17.8 million for the nine months ended September 30, 2016. Salaries and employee benefits increased $480,000, primarily due to additional employees, normal salary increases, retirement benefits, employee stock options and employee group health insurance. This was partially offset by a decrease in restricted stock awards expense. Occupancy and equipment increased $222,000 and $59,000, respectively, primarily due to accelerated depreciation taken on leasehold improvements in the Bank’s former operations center that did not transfer over to the new Operations Center that was placed into service in the prior quarter. In addition, the new Operations Center increased depreciation during the current period. Other increases for occupancy were related to real estate taxes, moving expenses, utilities and property insurance. Equipment expense increases were mainly due to equipment purchases and new maintenance contracts for the Operations Center. Bankcard processing expense increased $25,000 due to the increased number of automatic teller transactions (“ATM”) in the current period. Pennsylvania shares tax, which is calculated based on the Bank’s stockholders’ equity, increased $19,000 due to the increase in equity that was calculated on the current year shares tax return. Other real estate owned expense was $343,000 of income in the current period compared to $531,000 of income in the prior period resulting in an increase of $188,000 in expense. This change is primarily due to the $566,000 pre-tax gain recognized due to the foreclosure procedures on two commercial real estate loans that moved into other real estate owned properties in the first quarter of 2016. This was partially offset due to the final resolutions of loan collection efforts through the sale of a mineral rights interest, bankruptcy court settlement and mortgage insurance proceeds. These items are considered non-recurring. Other noninterest expense decreased $110,000 primarily due to decreases in various miscellaneous expenses, such as other insurance, other losses, non-employee restricted stock awards and a Pennsylvania state sales tax refund as a result of a Bank initiated reverse audit. The FDIC assessment decreased $86,000 due to an assessment factor reduction by the FDIC in the computation of the insurance assessment. Legal and professional fees decreased $71,000 due to the previously mentioned mortgage insurance proceeds, in which part of the insurance proceeds were utilized to offset legal fees attributed to the problem loan relationship. Advertising decreased $39,000 related to decreases in print/media advertising and promotional items as a cost savings initiative.

~~Income Tax Expense.~~ Income taxes increased $81,000 to $2.3 million for the nine months ended September 30, 2017 compared to $2.3 million for the nine months ended September 30, 2016. The effective tax rate for the nine months ended September 30, 2017 was 29.6% compared to 28.9% for the nine months ended September 30, 2016. The increase in income taxes was primarily due to an increase of $92,000 in pre-tax income and the expiration of the low income housing tax credit program. The increase in the effective tax rate was related to the decrease in tax exempt income, the expiration of the low income housing tax credit program and the capital loss carry forward deferred tax asset that has been fully recognized, partially offset by the favorable tax preference charitable donation of a former First Federal Savings Bank building to the City of Monessen, Pennsylvania in the current period.

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 87 in the Notes to Consolidated Financial Statements of this report for a summary of commitments outstanding as of ~~September 30, 2017.~~

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 ~~September 30, 2017~~March 31, 2022 to satisfy its short- and long-term liquidity ~~needs at that date.~~

needs.

The Company’s most liquid assets are cash and due from banks, which totaled ~~$43.7~~$123.6 million at ~~September 30, 2017.~~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 ~~$20.0~~$83.7 million at ~~September 30, 2017.~~March 31, 2022. In addition, at ~~September 30, 2017,~~March 31, 2022, the Company had the ability to borrow up to ~~$286.3~~$430.9 million from the FHLB of Pittsburgh, of which ~~$24.5~~$347.8 million ~~was outstanding and $48.9 million was utilized toward standby letters of credit.~~is available. The Company also has the ability to borrow up to ~~$88.3~~$102.7 million million from the FRB through its Borrower-In-Custody line of credit agreement and ~~$40.0 million from~~the Company also maintains multiple line of credit arrangements with various unaffiliated banks ~~none~~totaling $50.0 million as of ~~which were outstanding.~~

both March 31, 2022 and December 31, 2021.

At ~~September 30, 2017, time deposits due within one year of that date totaled $43.9~~March 31, 2022, $72.2 million, or ~~27.3%~~55.9% of total time ~~deposits.~~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 ~~certificates of deposit.~~time deposits. The Company believes, however, based on past experience that a significant portion of its ~~certificates of deposit~~time deposits will remain with it, either as ~~certificates~~

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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.

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 September 30, 2017, CB Financial (on an unconsolidated, stand-alone basis) had liquid assets of $1.8 million.

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.

~~Capital Management.~~ ~~The Company and~~

CB Financial is a separate legal entity from the Bank ~~are~~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. The capital conservation buffer, which is composed of common equity Tier I capital, began on January 1, 2017 at the 0.625% level and will be phased in over a three year period (increasing by that amount on each January 1, until it reaches 2.5% on January 1, 2019).

At ~~September 30, 2017~~March 31, 2022 and December 31, ~~2016,~~2021, the ~~Company~~Bank was categorized as ~~well capitalized~~“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

(Dollars in thousands)
September 30, 2017 December 31, 2016
Amount Ratio Amount Ratio
Common Equity Tier 1 (to risk weighted assets)
Actual $ 84,325 13.18 % $ 81,845 13.38 %
For Capital Adequacy Purposes 28,797 4.50 27,533 4.50
To Be Well Capitalized 41,596 6.50 39,770 6.50

Tier 1 Capital (to risk weighted assets)
Actual 84,325 13.18 81,845 13.38
For Capital Adequacy Purposes 38,397 6.00 36,711 6.00
To Be Well Capitalized 51,195 8.00 48,947 8.00

Total Capital (to risk weighted assets)
Actual 92,331 14.43 89,497 14.63
For Capital Adequacy Purposes 51,195 8.00 48,947 8.00
To Be Well Capitalized 63,994 10.00 61,184 10.00

Tier 1 Leverage (to adjusted total assets)
Actual 84,325 9.48 81,845 9.80
For Capital Adequacy Purposes 35,567 4.00 33,390 4.00
To Be Well Capitalized 44,458 5.00 41,738 5.00

Item 3. Quantitative and Qualitative Disclosure about Market Risk.

Management of Interest Rate Risk.The ~~Company believes that as~~majority of ~~September 30, 2017, there was no material change~~the Company’s assets and liabilities are monetary in nature. Consequently, the ~~quantitative and qualitative disclosure about~~Company’s most significant form of market risk ~~data as~~is interest rate risk and a principal part of ~~December 31, 2016, as disclosed~~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 ~~Annual Report~~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 ~~Form 10-K~~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 ~~year ended December~~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, ~~2016.~~

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.

~~CB Financial’s~~

(a)Evaluation of Disclosure Controls and Procedures

Our management, ~~including CB Financial’s principal executive officer~~with the participation of our Chief Executive Officer and ~~principal financial officer, have~~our Chief Financial Officer, evaluated the effectiveness of ~~CB Financial’s~~our disclosure controls and procedures as of March 31, 2022. The term “disclosure controls and ~~procedures”~~procedures,” as ~~such term is~~ defined in ~~Rule 13a-15(c) promulgated~~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, ~~CB Financial’s~~our disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that ~~CB Financial~~the Company files or submits under the Exchange Act with the ~~Securities and Exchange Commission (the “SEC”)~~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 ~~CB Financial’s~~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 ~~CB Financial’s~~our internal control over financial reporting during the quarter ended ~~September 30, 2017,~~March 31, 2022, that has materially affected, or is reasonably likely to materially affect, ~~CB Financial’s~~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, ~~2016,~~2021, which could materially affect our business, financial condition or future results. The risks described in ~~our~~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.

~~Not applicable.~~

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

~~31.1~~
	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 ~~Certification~~and Chief Financial Officer pursuant to 18 U.S.C. ~~Section 1350, as adopted to Section 906 of the Sarbanes-Oxley Act of 2002~~

~~32.2~~

~~Chief Financial Officer Certification pursuant to 18 U.S. C.~~ Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

			~~101.0~~101			The following materials for the quarter ended ~~September 30, 2017,~~March 31, 2022, formatted in XBRL (Extensible Business Reporting Language); the (i) ~~the~~ Consolidated ~~Statement~~Statements of Financial Condition, (ii) ~~the~~ Consolidated ~~Statement~~Statements of ~~Operations,~~Income, (iii) ~~the~~ Consolidated ~~Statement~~Statements of Comprehensive (Loss) Income , (iv) ~~the~~ Consolidated ~~Statement~~Statements of Stockholders’ Equity, (v) ~~the~~ Consolidated ~~Statement~~Statements of Cash Flows and (vi) ~~the~~ Notes to the ~~Unaudited~~ 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:	~~November 8, 2017~~May 11, 2022	/s/ ~~Barron P. McCune, Jr.~~John H. Montgomery
		~~Barron P. McCune, Jr.~~John H. Montgomery
		President and Chief Executive Officer

Date:	~~November 8, 2017~~May 11, 2022	/s/ ~~Kevin D. Lemley~~Jamie L. Prah
		~~Kevin D. Lemley~~Jamie L. Prah
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer and Chief Accounting Officer)

~~Pennsylvania~~	~~51-0534721~~
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)


			CB FINANCIAL SERVICES, INC.
			(Exact name of registrant as specified in its charter)

	~~(724) 966-5041~~
			(724) 966-5041
			(Registrant’s telephone number, including area code)

	~~N/A~~
			N/A
			(Former name, former address and former fiscal year, if changed since last report)


			Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).			1
Consolidated ~~Statement~~Statements of Financial Condition			1
Consolidated ~~Statement~~Statements of Income			2
Consolidated ~~Statement~~Statements of Comprehensive (Loss ) Income			3
Consolidated ~~Statement~~Statements of Changes In Stockholders’ Equity			34
Consolidated ~~Statement~~Statements of Cash Flows			45
Notes to ~~Unaudited~~the Consolidated Financial Statements (Unaudited)			57
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.			3228
Item 3. Quantitative and Qualitative Disclosure about Market Risk.			4438
Item 4. Controls and Procedures.			4439
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.			4440
Item 1A. Risk Factors.			4540
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			4540
Item 3. Defaults Upon Senior Securities.			4540
Item 4. Mine Safety Disclosures.			4540
Item 5. Other Information.			4540
Item 6. Exhibits			4540
SIGNATURES			4641

		(Unaudited)
(Dollars in thousands, except share data)		September 30, 2017			December 31, 2016
									(Unaudited) March 31, 2022			December 31, 2021
(Dollars in thousands, except per share and share data)								(Dollars in thousands, except per share and share data)

ASSETS	ASSETS										ASSETS
Cash and Due From Banks:								Cash and Due From Banks:
Interest Bearing		$	31,979		$	7,699		Interest Bearing	$	55,233		$	63,968
Non-Interest Bearing			11,766			6,583		Non-Interest Bearing	68,355			55,706
Total Cash and Due From Banks			43,745			14,282		Total Cash and Due From Banks	123,588			119,674

Investment Securities:
Available-for-Sale			115,889			106,208
Loans, Net			695,718			674,094
Securities:								Securities:
Available-for-Sale Debt Securities, at Fair Value								Available-for-Sale Debt Securities, at Fair Value	228,238			222,108
Equity Securities, at Fair Value								Equity Securities, at Fair Value	2,859			2,866
Total Securities								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								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			16,558			14,132		Premises and Equipment, Net	18,349			18,399
Bank-Owned Life Insurance			19,035			18,687		Bank-Owned Life Insurance	25,468			25,332
Goodwill			4,953			4,953		Goodwill	9,732			9,732
Core Deposit Intangible, Net			3,418			3,819
Accrued Interest and Other Assets			9,013			9,900
Intangible Assets, Net								Intangible Assets, Net	4,850			5,295
Accrued Interest Receivable and Other Assets								Accrued Interest Receivable and Other Assets	16,539			12,859
TOTAL ASSETS		$	908,329		$	846,075		TOTAL ASSETS	$	1,438,670		$	1,425,479

LIABILITIES								LIABILITIES

Deposits:								Deposits:
Demand Deposits		$	187,968		$	165,400
Non-Interest Bearing Demand Deposits								Non-Interest Bearing Demand Deposits	400,105			385,775
NOW Accounts			139,191			105,962		NOW Accounts	280,455			272,518
Money Market Accounts			139,244			141,674		Money Market Accounts	192,929			192,125
Savings Accounts			131,262			121,520		Savings Accounts	247,589			239,482
Time Deposits			160,466			155,028		Time Deposits	129,235			136,713
Brokered Deposits			4,243			8,634
Total Deposits			762,374			698,218		Total Deposits	1,250,313			1,226,613

Short-Term Borrowings			24,662			27,027		Short-Term Borrowings	39,219			39,266
Other Borrowed Funds			24,500			28,000
Accrued Interest and Other Liabilities			3,639			3,361
Other Borrowings								Other Borrowings	17,607			17,601
Accrued Interest Payable and Other Liabilities								Accrued Interest Payable and Other Liabilities	9,375			8,875
TOTAL LIABILITIES			815,175			756,606		TOTAL LIABILITIES	1,316,514			1,292,355

STOCKHOLDERS' EQUITY								STOCKHOLDERS' EQUITY
Preferred Stock, No Par Value; 5,000,000 Shares Authorized			-			-		Preferred Stock, No Par Value; 5,000,000 Shares Authorized	—			—
Common Stock, $0.4167 Par Value; 35,000,000 Shares Authorized, 4,363,346 Shares Issued and 4,088,025 and 4,086,625 Shares Outstanding at September 30, 2017 and December 31, 2016, Respectively			1,818			1,818
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								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			42,128			41,863		Capital Surplus	83,422			83,294
Retained Earnings			54,584			51,713		Retained Earnings	59,343			57,534
Treasury Stock, at Cost (275,321 and 276,721 Shares at September 30, 2017 and December 31, 2016, Respectively)			(4,722	)		(4,746	)
Treasury Stock, at Cost (544,861 and 420,321 Shares at March 31, 2022 and December 31, 2021, Respectively)								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			(654	)		(1,179	)	Accumulated Other Comprehensive Loss	(10,618)			(927)
TOTAL STOCKHOLDERS' EQUITY			93,154			89,469		TOTAL STOCKHOLDERS' EQUITY	122,156			133,124
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	908,329		$	846,075		TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,438,670		$	1,425,479


													Three Months Ended March 31,
	Three Months Ended September 30,					Nine Months Ended September 30,							2022		2021
(Dollars in thousands, except share and per share data)	2017			2016		2017			2016			(Dollars in thousands, except share and per share data)

INTEREST AND DIVIDEND INCOME												INTEREST AND DIVIDEND INCOME
Loans, Including Fees	$	7,459		$	7,093	$	21,830		$	21,913		Loans, Including Fees	$	9,551	$	10,146
Federal Funds Sold		64			3		120			15
Investment Securities:												Investment Securities:
Taxable		386			287		1,133			918		Taxable	905		646
Exempt From Federal Income Tax		229			261		665			787
Tax-Exempt												Tax-Exempt	66		78
Dividends												Dividends	22		20
Other Interest and Dividend Income		75			40		205			123		Other Interest and Dividend Income	72		98
TOTAL INTEREST AND DIVIDEND INCOME		8,213			7,684		23,953			23,756		TOTAL INTEREST AND DIVIDEND INCOME	10,616		10,988

INTEREST EXPENSE												INTEREST EXPENSE
Deposits		720			557		2,050			1,678		Deposits	530		947
Federal Funds Purchased		-			1		-			2
Short-Term Borrowings		20			21		59			50		Short-Term Borrowings	19		23
Other Borrowed Funds		120			129		361			383
Other Borrowings												Other Borrowings	174		41
TOTAL INTEREST EXPENSE		860			708		2,470			2,113		TOTAL INTEREST EXPENSE	723		1,011

NET INTEREST INCOME		7,353			6,976		21,483			21,643
NET INTEREST AND DIVIDEND INCOME												NET INTEREST AND DIVIDEND INCOME	9,893		9,977
Provision For Loan Losses		300			450		1,020			1,600		Provision For Loan Losses	—		—
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		7,053			6,526		20,463			20,043		NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	9,893		9,977

NONINTEREST INCOME												NONINTEREST INCOME
Service Fees on Deposit Accounts		630			619		1,839			1,811
Service Fees												Service Fees	526		546
Insurance Commissions		758			676		2,686			2,291		Insurance Commissions	1,798		1,595
Other Commissions		125			112		336			341		Other Commissions	89		165
Net Gains on Sales of Loans		137			249		389			559
Net Gains on Sales of Investments		10			22		132			80
Net Gains on Purchased Tax Credits		14			-		43			-
Net Gain on Sales of Loans												Net Gain on Sales of Loans	—		86
Net (Loss) Gain on Securities												Net (Loss) Gain on Securities	(7)		447
Net Gain on Purchased Tax Credits												Net Gain on Purchased Tax Credits	14		18

Net Loss on Disposal of Fixed Assets												Net Loss on Disposal of Fixed Assets	(8)		—
Income from Bank-Owned Life Insurance		116			123		348			362		Income from Bank-Owned Life Insurance	136		137
Other		28			20		87			93
Other Income												Other Income	65		180
TOTAL NONINTEREST INCOME		1,818			1,821		5,860			5,537		TOTAL NONINTEREST INCOME	2,613		3,174

NONINTEREST EXPENSE												NONINTEREST EXPENSE
Salaries and Employee Benefits		3,512			3,291		10,425			9,945		Salaries and Employee Benefits	4,565		4,894
Occupancy		526			544		1,678			1,456		Occupancy	686		710
Equipment		464			463		1,376			1,317		Equipment	210		266
Data Processing												Data Processing	485		518
FDIC Assessment		104			112		267			353		FDIC Assessment	209		250
PA Shares Tax		186			138		562			543		PA Shares Tax	240		265
Contracted Services		119			155		408			444		Contracted Services	587		687
Legal and Professional Fees		81			140		324			395		Legal and Professional Fees	152		189
Advertising		197			189		504			543		Advertising	116		140
Bankcard Processing Expense		130			125		384			359
Other Real Estate Owned (Income) Expense		(349	)		4		(343	)		(531	)
Amortization of Core Deposit Intangible		134			134		401			401
Other		793			870		2,432			2,542
Other Real Estate Owned (Income)												Other Real Estate Owned (Income)	(38)		(38)
Amortization of Intangible Assets												Amortization of Intangible Assets	445		532

Other Expense												Other Expense	999		982
TOTAL NONINTEREST EXPENSE		5,897			6,165		18,418			17,767		TOTAL NONINTEREST EXPENSE	8,656		9,395

Income Before Income Taxes		2,974			2,182		7,905			7,813
Income Taxes		910			607		2,336			2,255
Income Before Income Tax Expense												Income Before Income Tax Expense	3,850		3,756
Income Tax Expense												Income Tax Expense	803		911
NET INCOME	$	2,064		$	1,575	$	5,569		$	5,558		NET INCOME	$	3,047	$	2,845

EARNINGS PER SHARE												EARNINGS PER SHARE
Basic	$	0.50		$	0.38	$	1.36		$	1.36		Basic	$	0.59	$	0.52
Diluted		0.50			0.38		1.36			1.36		Diluted	0.58		0.52

WEIGHTED AVERAGE SHARES OUTSTANDING												WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		4,088,025			4,081,017		4,087,783			4,081,017		Basic	5,198,194		5,434,374
Diluted		4,108,723			4,087,337		4,104,157			4,084,730		Diluted	5,220,887		5,436,881

(Dollars in thousands, except share and per share data)	Shares Issued		Common Stock		Capital Surplus		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income		Total Stockholders' Equity

December 31, 2015		4,363,346	$	1,818	$	41,614	$	47,725		$	(4,836	)	$	575	$	86,896
Comprehensive Income:
Net Income		-		-		-		5,558			-			-		5,558
Other Comprehensive Income		-		-		-		-			-			58		58
Stock-Based Compensation Expense		-		-		262		-			-			-		262
Dividends Paid ($0.22 Per Share)		-		-		-		(2,694	)		-			-		(2,694	)
September 30, 2016		4,363,346	$	1,818	$	41,876	$	50,589		$	(4,836	)	$	633	$	90,080


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

	December 31, 2016
	Less than 12 months							12 Months or Greater							Total								December 31, 2021
	Number of Securities		Fair Value		Gross Unrealized Losses			Number of Securities		Fair Value		Gross Unrealized Losses			Number of Securities		Fair Value		Gross Unrealized Losses				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)																						(Dollars in thousands)

U.S. Government Agencies		23	$	62,853	$	(1,806	)		-	$	-	$	-			23	$	62,853	$	(1,806	)	U.S. Government Agencies	5	$	17,729	$	(269)	7	$	31,830	$	(1,164)	12	$	49,559	$	(1,433)
Obligations of States and Political Subdivisions		39		19,749		(485	)		1		260		(2	)		40		20,009		(487	)	Obligations of States and Political Subdivisions	—	—		—		—	—		—		—	—		—
Equity Securities - Other		2		160		(6	)		-		-		-			2		160		(6	)
Mortgage Backed Securities- Government Sponsored Enterprises																						Mortgage Backed Securities- Government Sponsored Enterprises	8	28,772		(282)		—	—		—		8	28,772		(282)
Collateralized Mortgage Obligations - Government Sponsored Enterprises																						Collateralized Mortgage Obligations - Government Sponsored Enterprises	10	77,560		(2,074)		—	—		—		10	77,560		(2,074)
Corporate Debt																						Corporate Debt	2	7,450		(31)		—	—		—		2	7,450		(31)
Total		64	$	82,762	$	(2,297	)		1	$	260	$	(2	)		65	$	83,022	$	(2,299	)	Total	25	$	131,511	$	(2,656)	7	$	31,830	$	(1,164)	32	$	163,341	$	(3,820)

	(Dollars in thousands)
	Three Months Ended September 30, 2017
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Related Allowance
Originated Loans
Real Estate
Residential		1	$	61	$	61	$	-
Total		1	$	61	$	61	$	-

	(Dollars in thousands)
	Nine Months Ended September 30, 2017
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Related Allowance
Originated Loans
Real Estate
Residential		1	$	61	$	61	$	-
Total		1	$	61	$	61	$	-

	(Dollars in thousands)
	Nine Months Ended September 30, 2016
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Related Allowance
Originated Loans
Real Estate
Other		1	$	7	$	7	$	-
Total		1	$	7	$	7	$	-

Loans Acquired at Fair Value
Real Estate
Residential		1	$	37	$	45	$	-
Commercial		1		539		539		-
Total		2	$	576	$	584	$	-

	September 30, 2017 (cont.)
	Recorded Investment		Related Allowance		Unpaid Principal Balance		Average Recorded Investment		Interest Income Recognized
Total Impaired Loans:
Originated Loans
Real Estate:
Residential	$	124	$	-	$	126	$	133	$	3
Commercial		3,381		392		3,381		3,488		116
Construction		609		-		609		640		20
Commercial and Industrial		2,481		636		2,555		2,772		103
Other		2		-		2		3		-
Total Impaired Loans	$	6,597	$	1,028	$	6,673	$	7,036	$	242

Loans Acquired at Fair Value
Real Estate:
Residential	$	1,268	$	-	$	1,268	$	1,284	$	49
Commercial		944		-		944		975		38
Commercial and Industrial		347		10		347		454		15
Total Impaired Loans	$	2,559	$	10	$	2,559	$	2,713	$	102

Total Loans
Real Estate:
Residential	$	1,392	$	-	$	1,394	$	1,417	$	52
Commercial		4,325		392		4,325		4,463		154
Construction		609		-		609		640		20
Commercial and Industrial		2,828		646		2,902		3,226		118
Other		2		-		2		3		-
Total Impaired Loans	$	9,156	$	1,038	$	9,232	$	9,749	$	344

	December 31, 2016 (cont.)
	Recorded Investment		Related Allowance		Unpaid Principal Balance		Average Recorded Investment		Interest Income Recognized
Total Impaired Loans
Originated Loans
Real Estate:
Commercial	$	3,361	$	360	$	3,361	$	3,505	$	166
Construction		702		-		702		843		28
Commercial and Industrial		2,765		655		2,771		2,842		72
Other		4		-		4		6		1
Total Impaired Loans	$	6,832	$	1,015	$	6,838	$	7,196	$	267

Loans Acquired at Fair Value
Real Estate:
Residential	$	1,300	$	-	$	1,300	$	1,320	$	68
Commercial		1,007		114		1,097		1,130		47
Commercial and Industrial		562		31		562		684		27
Total Impaired Loans	$	2,869	$	145	$	2,959	$	3,134	$	142

Total Loans
Real Estate:
Residential	$	1,300	$	-	$	1,300	$	1,320	$	68
Commercial		4,368		474		4,458		4,635		213
Construction		702		-		702		843		28
Commercial and Industrial		3,327		686		3,333		3,526		99
Other		4		-		4		6		1
Total Impaired Loans	$	9,701	$	1,160	$	9,797	$	10,330	$	409

	Accretable Discount
Balance at December 31, 2016	$	1,640
Accretable Yield		(533	)
Nonaccretable Discount		(113	)
Balance at September 30, 2017	$	994

Maturity Period:	September 30, 2017
One Year or Less	$	43,884
Over One Through Two Years		66,257
Over Two Through Three Years		20,973
Over Three Through Four Years		12,111
Over Four Through Five Years		9,112
Over Five Years		8,129
Total	$	160,466

	(Dollars in thousands) (Unaudited)
	Three Months Ended September 30,
	2017							2016
			Interest							Interest
	Average		and		Yield/			Average		and		Yield/
	Balance		Dividends		Cost ⁽¹⁾			Balance		Dividends		Cost ⁽¹⁾
Assets:
Interest-Earning Assets:
Loans, Net	$	684,384	$	7,480		4.34	%	$	671,346	$	7,120		4.22	%
Investment Securities
Taxable		80,791		386		1.91			51,460		287		2.23
Exempt From Federal Tax		37,390		340		3.64			39,428		388		3.94
Other Interest-Earning Assets		32,553		139		1.69			9,296		43		1.84
Total Interest-Earning Assets		835,118		8,345		3.96			771,530		7,838		4.04
Noninterest-Earning Assets		61,859							54,484
Total Assets	$	896,977						$	826,014

Liabilities and
Stockholders' equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits	$	138,742		92		0.26	%	$	112,679		49		0.17	%
Savings		131,420		61		0.18			121,439		56		0.18
Money Market		135,214		88		0.26			138,033		87		0.25
Time Deposits		160,456		479		1.18			136,258		365		1.07
Total Interest-Bearing Deposits		565,832		720		0.50			508,409		557		0.44

Borrowings		50,741		140		1.09			57,791		151		1.04
Total Interest-Bearing Liabilities		616,573		860		0.55			566,200		708		0.50

Noninterest-Bearing Demand Deposits		183,061							165,422
Other Liabilities		4,361							4,199
Total Liabilities		803,995							735,821

Stockholders' Equity		92,982							90,193
Total Liabilities and
Stockholders' Equity	$	896,977						$	826,014

Net Interest Income			$	7,485						$	7,130

Net Interest Rate Spread ⁽²⁾						3.41	%						3.54	%
Net Interest-Earning Assets ⁽³⁾	$	218,545						$	205,330
Net Interest Margin ⁽⁴⁾						3.56							3.68
Return on Average Assets						0.91							0.76
Return on Average Equity						8.81							6.95
Average Equity to Average Assets						10.37							10.92
Average Interest-Earning Assets to
Average Interest-Bearing Liabilities						135.45							136.26

	(Dollars in thousands) (Unaudited)
	Three Months Ended September 30, 2017
	Compared To
	Three Months Ended September 30, 2016
	Increase (Decrease) Due to
	Volume			Rate			Total

Interest and Dividend Income:
Loans, net	$	155		$	205		$	360
Investment Securities:
Taxable		145			(46	)		99
Exempt From Federal Tax		(19	)		(29	)		(48	)
Other Interest-Earning Assets		100			(4	)		96
Total Interest-Earning Assets		381			126			507

Interest Expense:
Deposits		81			82			163
Borrowings		(18	)		7			(11	)
Total Interest-Bearing Liabilities		63			89			152
Change in Net Interest Income	$	318		$	37		$	355

	(Dollars in thousands) (Unaudited)
	Nine Months Ended September 30,
	2017							2016
			Interest							Interest
	Average		and		Yield/			Average		and		Yield/
	Balance		Dividends		Cost ⁽¹⁾			Balance		Dividends		Cost ⁽¹⁾
Assets:
Interest-Earning Assets:
Loans, Net	$	673,922	$	21,896		4.34	%	$	673,451	$	21,998		4.36	%
Investment Securities
Taxable		79,432		1,133		1.90			53,580		918		2.28
Exempt From Federal Tax		36,177		987		3.64			38,902		1,172		4.02
Other Interest-Earning Assets		27,643		325		1.57			11,533		139		1.61
Total Interest-Earning Assets		817,174		24,341		3.98			777,466		24,227		4.16
Noninterest-Earning Assets		58,709							53,806
Total Assets	$	875,883						$	831,272

Liabilities and
Stockholders' equity:
Interest-Bearing Liabilities:
Interest-Bearing Demand Deposits	$	127,736		239		0.25	%	$	114,959		147		0.17	%
Savings		128,583		177		0.18			123,079		169		0.18
Money Market		137,906		270		0.26			142,820		268		0.25
Time Deposits		159,232		1,364		1.15			138,917		1,094		1.05
Total Interest-Bearing Deposits		553,457		2,050		0.50			519,775		1,678		0.43

Borrowings		51,505		420		1.09			54,533		435		1.07
Total Interest-Bearing Liabilities		604,962		2,470		0.55			574,308		2,113		0.49

Noninterest-Bearing Demand Deposits		175,401							163,815
Other Liabilities		3,822							4,086
Total Liabilities		784,185							742,209

Stockholders' Equity		91,698							89,063
Total Liabilities and
Stockholders' Equity	$	875,883						$	831,272

Net interest income			$	21,871						$	22,114

Net Interest Rate Spread ⁽²⁾						3.43	%						3.67	%
Net Interest-Earning Assets ⁽³⁾	$	212,212						$	203,158
Net Interest Margin ⁽⁴⁾						3.58							3.80
Return on Average Assets						0.85							0.89
Return on Average Equity						8.12							8.34
Average Equity to Average Assets						10.47							10.71
Average Interest-Earning Assets to
Average Interest-Bearing Liabilities						135.08							135.37