Michael Perito's questions to CB Financial Services (CBFV) leadership • Q3 2017
Question
Michael Perito from Keefe, Bruyette & Woods inquired about the pro forma financial model, asking about the source of the projected $155 million in loan growth, the timeline to mitigate net interest margin dilution, plans for the investment portfolio, the target capital level, and the strategy to improve the return on assets (ROA).
Answer
President Pat O'Brien explained that the loan growth would be driven by deploying the acquired low-cost deposits into CBFV's core markets, particularly Pittsburgh. CFO Kevin Lemley added that mitigating the margin impact would be a gradual 2-3 year process. CEO Barron McCune noted they will seek opportunities to restructure the investment portfolio post-closing. Pat O'Brien also stated that while the pro forma 8.1% TCE ratio is lower than historical levels, it is acceptable, and that improving ROA above 90 basis points will depend on redeploying funds and growing fee income.