Community Bankers’ Bank and CBB Financial Corp. Announce Fourth Quarter 2022 Operating Results

a. Net loan balances are up 10% year over year.

b. Recent increase in rates is initially helping improve asset yields and net interest margin. However, upcoming funding maturities are expected to put pressure on net interest margin going forward.

c. The rising interest rates also affect earnings credit rates, resulting in lower net service fee income.  This lower net service fee income and decrease in investment sale income is the primary reason for the decrease in non-interest income.

d. Other non-interest income continues to improve as our alliance partnerships help our client banks create efficiencies and improve productivity.

In the first quarter of 2023, the Company will transition from its existing Allowance for Loan and Lease Loss (“ALLL”) procedures to the Current Expected Credit Loss (“CECL”) standard, using the Scaled CECL Allowance for Losses Estimator (“SCALE model”) provided by the Federal Reserve. The SCALE model includes all required components of CECL; the use of historical loss rates, current economic condition factors, and forecasted future economic factors. The model leverages Call Report information and institution-specific details to estimate credit losses. Throughout 2022, the Company was running SCALE in parallel with its existing ALLL procedures.

The Bank continues to maintain a strong capital position that exceeds all regulatory requirements to be classified as “well capitalized,” with a Community Bank Leverage Ratio of 12.99% at December 31, 2022, compared to 12.20% at December 31, 2021.

Gary R. Shook, President and Chief Executive Officer of CBB Financial Corp and Community Bankers’ Bank, commented, “We are pleased with Community Bankers’ Bank’s 2022 performance. Loan growth was especially positive due to expanding our skill sets and the banks we work with. As a bank-owned cooperative, we exist to provide our shareholders and clients with services and products to enhance operating efficiencies. To that end, our focus is to continue building out those services. Growing Cash Settlement, Lending, and Alliance Partnerships will be our go-forward strategy as we look forward to 2023 and beyond.”

For further information, please contact:

Gary R. Shook