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CB Financial Services, Inc. (CBFV)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 EPS of $0.74 beat S&P Global consensus of $0.42 by $0.32; revenue of $13.46M beat consensus of $12.99M by ~$0.47M. Net interest margin expanded to 3.54% (+27 bps QoQ) on lower cost of funds and higher loan yields (company data); dividend raised 4% to $0.26 per share.*
  • Net income rose to $3.95M from $1.91M in Q1 2025, with efficiency ratio improving to 64.9% (from 81.0%) as RIF-related costs rolled off and deposit mix improved. Loans grew $22.4M QoQ; deposits grew $28.3M QoQ.
  • Asset quality remained strong: NPLs/loans 0.16%; ACL/loans 0.88%; annualized net recoveries 0.01%. Tangible book value per share (TBV) increased to $27.88.
  • Post-quarter, management announced a securities portfolio repositioning expected to add ~20 bps to NIM and ~$0.41 to annual EPS, and authorized a new $5M share repurchase (3.1% of shares outstanding).

What Went Well and What Went Wrong

  • What Went Well

    • Margin expansion: “Net interest margin expansion during the quarter was driven primarily by a reduction in our cost of funds… [and] the positive impact of our balance sheet repositioning strategies,” with NIM up to 3.54% (GAAP).
    • Balance sheet growth and mix: Loans +$22.4M QoQ, deposits +$28.3M QoQ, with core (non-time) deposits +$16.0M; TBV/share rose to $27.88.
    • Cost control: Noninterest expense fell 10.8% QoQ as prior quarter included $1.0M RIF; efficiency ratio improved to 64.9%.

  • What Went Wrong

    • Deposit costs still elevated vs pre-2024 regime even as they declined QoQ; interest-bearing deposit cost was 2.28% (down from 2.46% in Q1), reflecting ongoing rate-sensitivity.
    • Brokered CDs increased to $79.0M (from $39.0M at year-end) to fund CLO purchases, implying some reliance on wholesale-like funding near term.
    • Salaries/benefits up $663K YoY on merit increases, revenue-producing hires, and higher insurance costs (partly offset by RIF savings).

Financial Results

MetricQ2 2024Q4 2024Q1 2025Q2 2025
Net Income ($M)$2.650 $2.529 $1.909 $3.949
Diluted EPS ($)$0.51 $0.46 $0.35 $0.74
Net Interest Income ($M)$11.470 $11.532 $11.311 $12.540
Noninterest Income ($M)$0.688 $1.655 $0.787 $0.931
Provision for Credit Losses ($M)$(0.036) $0.683 $(0.040) $0.008
Net Interest Margin (GAAP)3.18% 3.12% 3.27% 3.54%
Efficiency Ratio (%)73.89% 71.68% 81.02% 64.94%
Loans, Net ($M)$1,069.167 $1,082.821 $1,078.675 $1,101.102
Total Deposits ($M)$1,349.768 $1,283.517 $1,281.097 $1,309.432

Segment/Portfolio Mix (Loan Detail)

Category ($M)6/30/20246/30/2025
Real Estate – Residential$342.7 $329.3
Real Estate – Commercial$458.7 $513.2
Real Estate – Construction$44.0 $40.7
Commercial & Industrial$112.4 $138.2
Consumer$90.4 $57.4
Other$30.5 $32.0
Total Loans$1,078.7 $1,110.8

Key KPIs

KPIQ4 2024Q1 2025Q2 2025
ROAA (GAAP, annualized)0.65% 0.53% 1.06%
ROAE (GAAP, annualized)6.80% 5.24% 10.76%
ROATCE (Non‑GAAP, annualized)7.54% 5.61% 11.53%
NPLs / Loans0.16% 0.22% 0.16%
NPA / Assets0.12% 0.16% 0.13%
ACL / Loans0.90% 0.90% 0.88%
TBV per Share ($)$26.82 $27.17 $27.88
CET1 (Bank)14.78% 14.94% 15.28%
Tier 1 Leverage (Bank)9.98% 10.36% 10.49%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per quarterStarting Q3 2025 pay date$0.25 (Q1 2025) $0.26 (declared with Q2 results; payable ~Aug 29, 2025) Raised 4%
Expense savings (RIF)2025 run-rate~+$1.5M pre-tax annual savings expected (Q1 disclosure) Ongoing savings realized; Q2 noninterest expense down QoQ excluding Q1 one-time Maintained
Treasury Management rolloutLate 2025Initial implementation by late 2025 “Fully operational by late 2025” focus and buildout continued Maintained
Post-quarter securities repositioningForwardN/AExpect +20 bps NIM and +$0.41 annual EPS accretion (Q3 announcement) New (Post-quarter)

Note: Company does not provide formal revenue/EPS quantitative guidance.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Net interest margin and cost of fundsQ4’24 NIM 3.12%; easing funding costs; reduced brokered CDs NIM 3.54% on lower cost of funds (1.89%) and higher loan yields; cost of interest-bearing deposits 2.28% Improving
Deposit mix/core growthShift toward core deposits; reduced brokered/time in Q4’24; Q1’25 non-time +$26.7M, time –$29.1M Core deposits +$16.0M; time +$12.4M (total deposits +$28.3M); core 79% of deposits Improving core; tactical time
Treasury & specialized depositsTreasury program build started; targeted launch late 2025 Continued build; fully operational by late 2025; expected to drive sustainable revenue and core deposits On track
Credit qualityNPLs 0.16% at YE’24; ticked to 0.22% in Q1’25 NPLs back to 0.16%; net recoveries 0.01% annualized Stable/strong
Capital returnActive repurchases; regular dividend (Q4/Q1) Dividend increased 4% to $0.26; completed 5% buyback in Q2; new $5M repurchase post‑quarter More shareholder-friendly
Balance sheet repositioningPrior repositioning in 2023; CLO purchases in 2024 Ongoing repositioning cited supporting yields; post‑quarter AFS repositioning with NIM/EPS accretion expected Positive tailwind

Note: No Q2 2025 earnings call transcript was available in our document set.

Management Commentary

  • “Net interest margin expansion during the quarter was driven primarily by a reduction in our cost of funds… [and] the positive impact of our balance sheet repositioning strategies, which effectively mitigated the effects of recent rate reductions on asset repricing.”
  • “Asset quality remains strong, with nonperforming loans representing just 0.16% of total loans and allowance for credit losses to nonperforming assets of 505.0% at quarter-end.”
  • “We continue to prioritize strengthening core banking relationships and strategically reducing our reliance on time deposit-only accounts… As we begin to scale our treasury deposit initiatives later this year, we anticipate the opportunity to reduce or fully replace brokered CDs.”

Q&A Highlights

  • An earnings call transcript for Q2 2025 was not found in our corpus; no Q&A excerpts are available.

Estimates Context

MetricPeriodConsensusActualSurprise# of Estimates
Primary EPSQ2 2025$0.42*$0.74*+$0.32*3*
Revenue ($)Q2 2025$12,986,000*$13,459,000*+$473,000*1*

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Clear operational beat: EPS and revenue exceeded consensus alongside strong NIM expansion; efficiency ratio reset lower as one‑time costs rolled off. Expect near-term estimate revisions upward.*
  • Loan and deposit momentum with improving core mix supports sustained NIM; management is proactively repositioning the balance sheet and deposit base to defend margins.
  • Asset quality remains a competitive advantage (NPLs 0.16%, net recoveries), limiting credit cost volatility.
  • Shareholder returns accelerating: dividend raised 4%; 5% buyback completed in Q2; new $5M authorization post‑quarter adds optionality.
  • Catalysts: execution on Treasury Management rollout (late 2025), realized accretion from Q3 securities repositioning (+20 bps NIM, +$0.41 annual EPS), and further core deposit wins.
  • Watch items: tactical use of brokered CDs ($79M) to fund securities; monitor funding mix normalization as treasury deposits scale.
  • Medium-term thesis: a better‑mix, core‑funded community bank with rising TBV, robust capital (CET1 15.3%), and improving profitability trajectory into 2026.

Footnotes:

  • Company financial and operating metrics are sourced from the Q2 2025 8‑K earnings release and investor presentation; prior periods from Q1 2025 and Q4 2024 releases.
  • Post‑quarter developments (repositioning, repurchase authorization) from September 2025 press releases.