CCFNB Bancorp (CCFN) 8-K CCFNB Bancorp, Inc. Reports Second Quarter 2023 Earnings

CCFNB Bancorp, Inc. 8-K

Exhibit 99.1

Press Release – For Immediate Release

August 1, 2023

CCFNB Bancorp, Inc. Reports Second Quarter 2023 Earnings

Bloomsburg, PA – CCFNB Bancorp, Inc. (“Corporation”) (OTC Pink: CCFN), parent company of First Columbia Bank & Trust Co. (”Bank”), has released its unaudited financial statements for the second quarter of 2023.

Net income, as reported under U.S. Generally Accepted Accounting Principles, for the quarter-ended June 30, 2023 was $1,462,000 compared to $1,953,000 for the same period in 2022. Net income, as reported under U.S. Generally Accepted Accounting Principles, for the six months-ended June 30, 2023 was $3,402,000 compared to $4,398,000 for the same period in 2022. Net income for the six months-ended June 30, 2023 was impacted by merger related expenses amounting to approximately $449 thousand. Earnings per share for the quarters-ended June 30, 2023 and 2022 were $0.71 and $0.94, respectively. Earnings per share for the six months-ended June 30, 2023 and 2022 were $1.64 and $2.12, respectively. The return on average assets and return on average equity were 0.71% and 7.63% for the quarter-ended June 30, 2023 as compared to 0.93% and 9.14% for the same period of 2022.

The net interest margin, tax effected, on interest earning assets and liabilities was 2.32% and 2.51% at June 30, 2023 and 2022, respectively.

Total consolidated assets amounted to $960.1 million at June 30, 2023 as compared to $944.0 at December 31, 2022. For the six months-ended June 30, 2023, net loans, not held for sale, increased by $22.7 million while investment securities decreased $3.7 million and cash and cash equivalents decreased $289 thousand. Over the same time period, loans held for sale decreased $4.2 million. Total deposits decreased $23.8 million while short term borrowings increased $10.3 million. Long term borrowings increased $25.0 million since the end of 2022 to fund the loan growth and offset deposit losses.

The Corporation invests in various forms of agency debt including mortgage-backed securities and callable agency debt. The fair value of these securities is influenced by market interest rates, prepayment speeds on mortgage-backed securities, bid to offer spreads in the market place and credit premiums for various types of agency debt. These factors change continuously and therefore the fair value of these securities may be higher or lower than the Corporation’s carrying value at any measurement date. The temporary impact on investments will also affect stockholders’ equity as these fluctuations are recorded through accumulated other comprehensive income (loss). As of June 30, 2023, the temporary impact of these unrealized losses on the stockholders’ equity amounted to a reduction of $25.2 million. The Corporation does not consider its debt securities to be other-than-temporarily impaired since it has both the intent and ability to hold the securities to allow a market recovery, which may be at maturity. As of June 30, 2023, the scheduled maturities of the callable agency debt, at par value, over the next 12 months amounted to $40.6 million. Additionally, the Corporation is expecting monthly cash flows from mortgage-backed securities.

Our liquidity position remains strong as the Bank has access to available funding with the Federal Home Loan Bank of Pittsburgh (“FHLB”). Under terms of a blanket agreement, the loans are secured by certain qualifying assets of the Bank which consisted principally of first mortgage loans. As of June 30, 2023, the maximum borrowing capacity with FHLB amounted to $259,100,000 and the available capacity was $225,100,000. The Bank also has unused lines of credit with the Federal Reserve Bank Discount Window and Atlantic Community Bankers Bank in the amounts of $5,953,560 and $10,000,000, respectively, at June 30, 2023.

When compared to December 31, 2022, stockholders’ equity, excluding accumulated other comprehensive loss, increased $2.2 million to $115.5 million as of June 30, 2023. Total stockholders’ equity equated to a book value per share of $43.44 at June 30, 2023 as compared with $41.34 as of December 31, 2022. For the six months-ended June 30, 2023 cash dividends of $0.85 per share were paid to stockholders as compared to $0.83 for the same 2022 period. CCFNB Bancorp, Inc. remains well capitalized, with an equity-to-assets ratio of 9.4% as of June 30, 2023 and 9.1% at December 31, 2022.

About CCFNB Bancorp, Inc.

CCFNB Bancorp, Inc. is a registered financial holding company, headquartered in Bloomsburg, Pennsylvania. CCFNB Bancorp, Inc. has one subsidiary bank, First Columbia Bank & Trust Co. First Columbia Bank & Trust Co. is a full-service community bank, serving a market area in Columbia, Montour, Luzerne, Lycoming, and Northumberland counties. The Bank engages in a full line of personal, business and municipal financial services and alternative investment products, including corporate and personal fiduciary services. The Bank has 12 offices located throughout the communities of Bloomsburg, Berwick, Danville, Benton, Millville, Elysburg and Catawissa. The Bank has 177 employees. As of June 30, 2023, CCFNB Bancorp, Inc. had $960.1 million in total assets.

Cautionary Note Regarding Forward Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of current or historical fact and involve substantial risks and uncertainties. Words such as "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects," "may," "will," "should," and other similar expressions can be used to identify forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to the following: costs or difficulties associated with newly developed or acquired operations; risks related to the proposed merger with Muncy Bank Financial, Inc.; changes in general economic trends, including inflation and changes in interest rates; increased competition; changes in consumer demand for financial services; our ability to control costs and expenses; adverse developments in borrower industries and, in particular, declines in real estate values; changes in and compliance with federal and state laws that regulate our business and capital levels; our ability to raise capital as needed; and the effects of the COVID-19 pandemic and actions taken by governments, businesses and individuals in response. We do not undertake, and specifically disclaim, any obligation to publicly revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law. Accordingly, you should not place undue reliance on forward-looking statements.

CCFNB Bancorp, Inc. and Muncy Bank Financial, Inc. Merger - Additional Information and Where to Find It

On April 18, 2023 CCFNB Bancorp, Inc. (OTCPK: CCFN) and Muncy Bank Financial, Inc. (OTCQB: MYBF) jointly announced the signing of a definitive merger agreement to combine the two companies in a strategic merger of equals. In connection with the proposed transaction, CCFNB has filed a registration statement on Form S-4 with the SEC. The registration statement includes a joint proxy statement of CCFNB and Muncy, which also will constitute a prospectus of CCFNB, that will be sent to CCFNB’s and Muncy’s shareholders seeking certain approvals related to the proposed transaction.

The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Investors and security holders of CCFNB and Muncy and their respective affiliates are urged to read, when available, the registration statement on Form S-4, the joint proxy statement/prospectus included within the registration statement on Form S-4 and any other relevant documents filed or to be filed with the SEC in connection with the proposed transaction, as well as any amendments or supplements to those documents, because they will contain important information about CCFNB, Muncy and the proposed transaction. Investors and security holders will be able to obtain a free copy of the registration statement, including the joint proxy statement/prospectus, as well as other relevant documents filed with the SEC containing information about CCFNB and Muncy, without charge, at the SEC’s website (http://www.sec.gov). Copies of documents filed with the SEC by CCFNB will be made available free of charge in the “Investor Relations” section of CCFNB’s website, https://www.firstcolumbiabank.com. Copies of documents filed with the SEC by Muncy will be made available free of charge in the “Investor Relations” section of Muncy’s website, https://ir.muncybank.com.

Participants in Solicitation

CCFNB, Muncy, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction under the rules of the SEC. Information regarding directors and executive officers of CCFNB and Muncy will be made available in the joint proxy statement/prospectus included in the registration statement on Form S-4 filed by CCFNB with the SEC in connection with the proposed transaction, and certain other documents filed with the SEC by CCFNB and Muncy, respectively. Free copies of these documents, when available, may be obtained as described in the preceding paragraph.

CCFNB Bancorp, Inc.

Consolidated Balance Sheets 

	(Unaudited)
	June 30,			December 31,
(In Thousands, except share data)	2023			2022
ASSETS
Cash and due from banks	$	10,546		$	9,750
Interest-bearing deposits in other banks		2,243			3,333
Federal funds sold		6			1
Total cash and cash equivalents		12,795			13,084
Investment debt securities, available for sale, at fair value		336,252			341,051
Investment equity securities, at fair value		929			1,077
Restricted securities		4,498			3,223
Loans held for sale		402			4,568
Loans, net of unearned income		550,469			527,729
Less: Allowance for credit losses		6,278			7,279
Loans, net		544,191			520,450
Premises and equipment:
Operating lease right-of-use		284			298
Other premises and equipment, net		12,365			12,514
Accrued interest receivable		2,331			2,222
Cash surrender value of bank-owned life insurance		22,126			21,859
Investment in limited partnerships		5,472			3,745
Goodwill		7,937			7,937
Other assets		10,498			11,986
TOTAL ASSETS	$	960,080		$	944,014
LIABILITIES
Interest-bearing deposits	$	482,962		$	500,480
Noninterest-bearing deposits		175,521			181,845
Total deposits		658,483			682,325
Short-term borrowings		182,022			171,741
Long-term borrowings		25,023			24
Accrued interest payable		508			187
Operating lease liability		284			298
Other liabilities		3,392			3,497
TOTAL LIABILITIES		869,712			858,072
STOCKHOLDERS' EQUITY
Common stock, par value $1.25 per share; authorized
15,000,000 shares, issued  2,344,809 shares in 2023
and 2,343,835 shares in 2022		2,931			2,930
Surplus		30,070			30,030
Retained earnings		92,318			90,156
Accumulated other comprehensive loss		(25,161	)		(27,384	)
Treasury stock, at cost; 264,700 shares in 2023 and  2022		(9,790	)		(9,790	)
TOTAL STOCKHOLDERS' EQUITY		90,368			85,942
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	960,080		$	944,014

CCFNB Bancorp, Inc.

Consolidated Statements of Income

(Unaudited) 

	For the Three Months Ended						For the Six Months Ended
(In Thousands, Except Share and Per Share Data)	June 30,						June 30,
	2023			2022			2023			2022
INTEREST AND DIVIDEND INCOME
Interest and fees on loans:
Taxable	$	6,298		$	4,806		$	12,232		$	9,615
Tax-exempt		215			139			431			303
Interest and dividends on investment securities:
Taxable		1,222			1,036			2,430			1,843
Tax-exempt		134			30			263			67
Dividend and other interest income		69			48			136			93
Federal funds sold		1			5			1			6
Deposits in other banks		25			55			85			88
TOTAL INTEREST AND DIVIDEND INCOME		7,964			6,119			15,578			12,015
INTEREST EXPENSE
Deposits		780			422			1,407			836
Short-term borrowings		2,125			168			3,911			257
Long-term borrowings		146			1			146			1
TOTAL INTEREST EXPENSE		3,051			591			5,464			1,094
NET INTEREST INCOME		4,913			5,528			10,114			10,921
CREDIT LOSS EXPENSE
(Credit) Provision for credit losses  - loans		(4	)		(190	)		(422	)		(160	)
(Credit) Provision for credit losses  - investment debt securities		—			—			—			—
(Credit) Provision for credit losses  - off-balance sheet commitments		(12	)		—			(3	)		—
TOTAL CREDIT LOSS EXPENSE		(16	)		(190	)		(425	)		(160	)
NET INTEREST INCOME AFTER (CREDIT) PROVISION
FOR CREDIT LOSSES		4,929			5,718			10,539			11,081
NON-INTEREST INCOME
Service charges and fees		514			493			1,039			1,004
Gain on sale of loans		96			67			125			356
Earnings on bank-owned life insurance		113			108			222			211
Brokerage		151			163			279			323
Trust		227			177			418			386
Loss on equity securities		(66	)		(40	)		(147	)		(43	)
Interchange fees		442			445			866			857
Other		229			194			530			471
TOTAL NON-INTEREST INCOME		1,706			1,607			3,332			3,565
NON-INTEREST EXPENSE
Salaries		1,832			1,925			3,632			3,771
Employee benefits		608			769			1,400			1,504
Occupancy		320			344			643			671
Furniture and equipment		491			503			1,010			853
State shares tax		131			177			292			344
Professional fees		760			342			1,071			640
Director's fees		73			79			155			167
FDIC assessments		109			64			217			131
Telecommunications		76			111			160			195
Automated teller machine and interchange		(9	)		(4	)		110			105
Other		466			538			984			981
TOTAL NON-INTEREST EXPENSE		4,857			4,848			9,674			9,362
INCOME BEFORE INCOME TAX PROVISION		1,778			2,477			4,197			5,284
INCOME TAX PROVISION		316			524			795			886
NET INCOME	$	1,462		$	1,953		$	3,402		$	4,398
			��
EARNINGS PER SHARE	$	0.71		$	0.94		$	1.64		$	2.12
CASH DIVIDENDS PER SHARE	$	0.43		$	0.42		$	0.85		$	0.83
WEIGHTED AVERAGE SHARES OUTSTANDING		2,079,649			2,077,971			2,079,393			2,077,977

	Quarter Ended (unaudited)
(Dollars in Thousands, Except Per Share Data)	6/30/2023			3/31/2023			12/31/2022			9/30/2022			6/30/2022
Operating Highlights
Net income	$	1,462		$	1,940		$	2,595		$	2,521		$	1,953
Net interest income		4,913			5,201			5,453			5,953			5,528
(Credit) Provision for credit losses		(16	)		(409	)		(450	)		(1,200	)		(190	)
Non-interest income		1,706			1,626			2,008			498			1,607
Non-interest expense		4,857			4,817			5,038			4,668			4,848
Financial Condition Data:
Total assets	$	960,080		$	955,030		$	944,014		$	952,822		$	953,045
Loans, net and loans held for sale		544,593			535,843			525,018			506,760			487,334
Intangibles		7,937			7,937			7,937			7,937			7,937
Total deposits
Noninterest-bearing	$	175,521		$	178,438		$	181,845		$	182,469		$	184,855
Savings		157,833			166,231			171,462			174,173			176,056
NOW		152,358			151,191			152,656			156,961			159,048
Money Market		44,341			51,846			51,850			51,894			56,293
Time Deposits		128,430			127,670			124,512			129,900			135,784
Total interest-bearing deposits		482,962			496,938			500,480			512,928			527,181
Core deposits*		530,053			547,706			557,813			565,497			576,252
Selected Ratios
Net interest margin(YTD)		2.32	%		2.41	%		2.55	%		2.56	%		2.51	%
Annualized return on average assets		0.71	%		0.82	%		1.00	%		0.97	%		0.93	%
Annualized return on average equity		7.63	%		8.94	%		10.45	%		9.82	%		9.14	%
Capital Ratios
Common equity tier I capital ratio		19.30	%		19.83	%		19.79	%		20.77	%		20.32	%
Tier 1 capital ratio		19.30	%		19.83	%		19.79	%		20.77	%		20.32	%
Total risk-based capital ratio		20.45	%		20.99	%		21.04	%		22.03	%		21.58	%
Leverage ratio		10.83	%		11.11	%		11.02	%		10.74	%		10.79	%
Asset Quality Ratios
Non-performing assets	$	2,562		$	2,808		$	2,654		$	2,678		$	2,816
Allowance for credit losses - loans		6,278			6,288			7,279			7,743			8,960
Allowance for credit losses to total loans		1.14	%		1.16	%		1.37	%		1.51	%		1.81	%
Allowance for credit losses to
non-performing loans		245.04	%		223.91	%		274.33	%		293.22	%		318.16	%
Per Share Data
Earnings per share	$	0.71		$	0.93		$	1.25		$	1.21		$	0.94
Dividend declared per share		0.43			0.42			0.42			0.42			0.42
Book value		43.44			44.52			41.34			39.88			42.29
Common stock price:
Bid	$	37.57		$	40.05		$	45.00		$	45.50		$	52.20
Ask		43.00			42.50			51.00			49.50			55.90
Weighted average common shares		2,079,649			2,079,135			2,078,705			2,078,204			2,077,971

* Core deposits are defined as total deposits less time deposits