CCFNB Bancorp (CCFN) 8-K Muncy Columbia Financial Corporation Declares Dividend and Reports Fourth Quarter 2023 Earnings

MUNCY COLUMBIA FINANCIAL CORPORATION 8-K

Exhibit 99.1

Press Release – For Immediate Release

February 13, 2024

Muncy Columbia Financial Corporation Declares Dividend and Reports Fourth Quarter 2023 Earnings

Bloomsburg, PA – Muncy Columbia Financial Corporation (“Corporation”) (OTCQX: CCFN), parent company of Journey Bank (”Bank”), has released its unaudited financial statements for the fourth quarter of 2023.

Merger with Muncy Bank Financial, Inc.

On April 18, 2023, CCFNB Bancorp, Inc. (“CCFNB”) and Muncy Bank Financial, Inc. (“MBF”) jointly announced the signing of a definitive merger agreement to combine the two companies in a strategic merger of equals. Effective November 11, 2023, the merger was completed. Under the terms of the Merger Agreement, (i) MBF merged with and into CCFNB, with CCFNB being the surviving entity, and (ii) The Muncy Bank & Trust Company merged with and into CCFNB's wholly-owned banking subsidiary, First Columbia Bank & Trust Co. ("First Columbia Bank"), with First Columbia Bank being the surviving bank (the "Mergers"). In connection with the Mergers, CCFNB changed its name to Muncy Columbia Financial Corporation and First Columbia Bank changed its name to Journey Bank.

At the effective time of the merger, MBF’s shareholders received a fixed exchange ratio of 0.9259 shares of the Corporation’s common stock for each MBF common share they owned, except to the extent of cash received for fractional shares at $41.47 per share. Total purchase consideration was $55,101,000, including common stock with a fair value of $55,092,000 and cash of $9,000 paid for fractional shares. Holders of MBF common stock prior to the consummation of the merger held approximately 41.7% of the Corporation’s common stock outstanding immediately following the merger.

In connection with the acquisition, effective November 11, 2023, the Corporation recorded goodwill of $17.7 million and a core deposit intangible asset of $12.1 million. Assets acquired included gross loans valued at $504.1 million, available-for-sale debt securities valued at $93.0 million, bank-owned life insurance valued at $17.8 million and premises and equipment, net, valued at $14.9 million. Liabilities assumed included deposits valued at $521.3 million and borrowings valued at $105.5 million. The fair value adjustments made to the acquired assets and liabilities of MBF are considered preliminary at this time and are subject to change as the Corporation finalizes its fair value determinations. The assets purchased and liabilities assumed in the acquisition were recorded at their preliminary estimated fair values at the time of closing and may be adjusted for up to one year subsequent to the acquisition.

For the year-ended December 31, 2023, the Corporation incurred pre-tax merger-related expenses related to the MBF transaction of $3.0 million, including expenses totaling $1.8 million in the fourth quarter 2023. Merger-related expenses include voluntary severance and similar expenses as well as expenses related to conversion of MBF’s core banking system into the Corporation’s core system and legal and other professional expenses. Also during the fourth quarter 2023, the Corporation recorded a one-time provision for credit losses of $2.9 million for acquired non-Purchase Credit Deteriorated (“PCD”) loans (also known as the “CECL Credit Double Count”).

Dividend Declared and Unaudited Financial Information

On February 13, 2024, the Corporation’s Board of Directors declared a regular quarterly cash dividend of $0.44 per share, which represents an increase of $0.01 per share compared to the last quarterly dividend of $0.43 per share. The dividend is payable on March 14, 2024 to shareholders of record as of February 27, 2024. Highlights related to the Corporation’s fourth quarter 2023 unaudited results are presented below.

Net loss, as reported under accounting principles generally accepted in the United States of America (“GAAP”), for the quarter-ended December 31, 2023, was $1,186,000 compared to net income of $2,595,000 for the same period in 2022. Net income, as reported under GAAP, for the year -ended December 31, 2023 was $3,387,000 compared to $9,514,000 for the same period in 2022. Net income for the quarter and year-ended December 31, 2023 was significantly impacted by merger related expenses, as described in further detail in the Merger with Muncy Bank Financial, Inc. section above. Earnings per share, basic and diluted, for the quarters-ended December 31, 2023 and 2022 were ($0.41) and $1.25, respectively. Earnings per share, basic and diluted, for the years-ended December 31, 2023 and 2022 were $1.49 and $4.58, respectively. Return on average assets and return on average equity were (0.35%) and (3.95%) for the quarter-ended December 31, 2023 as compared to 1.00% and 10.45% for the same period of 2022.

The fully-tax equivalent net interest margin on interest earning assets and liabilities was 2.34% and 2.55% at December 31, 2023 and 2022, respectively.

Total consolidated assets amounted to $1.6 billion at December 31, 2023 as compared to $944.0 million at December 31, 2022. Changes from December 31, 2022 to December 31, 2023 were primarily driven by the Corporation’s merger with Muncy Bank Financial, Inc. on November 11, 2023.

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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 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 market value of these securities may be higher or lower than the Corporation’s carrying value at any measurement date. The temporary impact on investment securities will also affect stockholders’ equity as these fluctuations are recorded through accumulated other comprehensive income (loss). For the year-ended December 31, 2023, the temporary impact of these unrealized losses on the stockholders’ equity amounted to a reduction of $15.0 million. The Corporation does not consider its debt securities to be credit impaired since it has both the intent and ability to hold the securities until a recovery of its amortized cost basis, which may be maturity, and the decline in fair value is deemed to be as a result of increases in interest rates and not credit factors.

Total stockholders’ equity equated to a book value per share of $43.08 at December 31, 2023 as compared with $41.34 at December 31, 2022. For the year-ended December 31, 2023 cash dividends of $1.71 per share were paid to stockholders as compared to $1.67 for the same period of 2022. The Corporation remains well capitalized, with an equity to assets ratio of 9.38% as of December 31, 2023 and 9.10% at December 31, 2022.

About Muncy Columbia Financial Corporation

Muncy Columbia Financial Corporation ("MCFC") is a registered financial holding company headquartered in Bloomsburg, Pennsylvania. MCFC has one subsidiary bank, Journey Bank, serving individuals, families, nonprofits and business clients throughout Clinton, Columbia, Lycoming, Montour, Northumberland and Sullivan Counties through 22 banking offices.

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 related to integration following the merger; the risk that the anticipated benefits, cost savings and other savings from the merger may not be fully realized or may take longer than expected to realize; potential impairment to the goodwill recorded in connection with the merger; changes in general economic trends, including inflation and changes in interest rates; our ability to manage credit risk; our ability to maintain an adequate level of allowance for credit loss on loans; increased competition; changes in consumer demand for financial services; our ability to control costs and expenses; fluctuations in the values of securities held in our securities portfolio, including as a result of changes in interest rates; our ability to successfully manage liquidity risk; adverse developments in borrower industries and, in particular, declines in real estate values; the concentration of large deposits from certain customers who have balances above current FDIC insurance limits; changes in and compliance with federal and state laws that regulate our business and capital levels; our ability to raise capital as needed; and any other risks described in the “Risk Factors” sections of reports filed by the Corporation with the Securities and Exchange Commission. 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.

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Muncy Columbia Financial Corporation

Consolidated Balance Sheets

	December 31,
(In Thousands, Except Share and Per Share Data) (Unaudited)	2023			2022
ASSETS
Cash and due from banks	$	14,614		$	9,750
Interest-bearing deposits in other banks		3,763			3,333
Federal funds sold		—			1
Total cash and cash equivalents		18,377			13,084
Interest-bearing time deposits		979			—
Available-for-sale debt securities, at fair value		413,302			341,051
Marketable equity securities, at fair value		1,295			1,077
Restricted investment in bank stocks, at cost		10,394			3,223
Loans held for sale		366			4,568
Loans receivable		1,068,429			527,729
Allowance for credit losses		(9,302	)		(7,279	)
Loans, net		1,059,127			520,450
Premises and equipment, net		27,569			12,514
Foreclosed assets held for sale		170			—
Accrued interest receivable		5,362			2,222
Bank-owned life insurance		40,209			21,859
Investment in limited partnerships		5,828			3,745
Deferred tax asset, net		12,634			8,377
Goodwill		25,609			7,937
Core deposit intangible, net		11,895			—
Other assets		6,663			3,907
TOTAL ASSETS	$	1,639,779		$	944,014
LIABILITIES
Interest-bearing deposits	$	884,654		$	500,480
Noninterest-bearing deposits		266,015			181,845
Total deposits		1,150,669			682,325
Short-term borrowings		252,532			171,741
Long-term borrowings		70,448			24
Accrued interest payable		2,358			187
Other liabilities		9,947			3,795
TOTAL LIABILITIES		1,485,954			858,072
STOCKHOLDERS' EQUITY
Common stock, par value $1.25 per share; 15,000,000 shares authorized;
issued 3,834,976 and outstanding 3,570,276 at December 31, 2023;
issued 2,343,835 and outstanding 2,079,135 at December 31, 2022		4,794			2,930
Additional paid-in capital		83,343			30,030
Retained earnings		90,514			90,156
Accumulated other comprehensive loss		(15,036	)		(27,384	)
Treasury stock, at cost; 264,700 shares at December 31, 2023 and 2022		(9,790	)		(9,790	)
TOTAL STOCKHOLDERS' EQUITY		153,825			85,942
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,639,779		$	944,014

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Muncy Columbia Financial Corporation

Consolidated Statements of Income

	For the Three Months Ended						For the Year Ended
	December 31,						December 31,
(In Thousands, Except Share and Per Share Data) (Unaudited)	2023			2022			2023			2022
INTEREST AND DIVIDEND INCOME
Interest and fees on loans:
Taxable	$	12,024		$	5,571		$	30,885		$	20,604
Tax-exempt		295			215			969			675
Interest and dividends on investment securities:
Taxable		1,389			1,234			5,030			4,321
Tax-exempt		519			92			917			185
Dividend and other interest income		96			54			318			198
Federal funds sold		—			5			1			20
Deposits in other banks		58			123			227			385
TOTAL INTEREST AND DIVIDEND INCOME		14,381			7,294			38,347			26,388
INTEREST EXPENSE
Deposits		2,665			484			4,964			1,773
Short-term borrowings		2,871			1,356			9,119			2,286
Long-term borrowings		588			1			1,002			2
TOTAL INTEREST EXPENSE		6,124			1,841			15,085			4,061
NET INTEREST INCOME		8,257			5,453			23,262			22,327
Provision (credit) for credit losses - loans		3,148			(450	)		2,554			(1,810	)
(Credit) provision for credit losses - off balance sheet credit exposures		(34	)		—			(33	)		—
TOTAL PROVISION (CREDIT) FOR CREDIT LOSSES		3,114			(450	)		2,521			(1,810	)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES		5,143			5,903			20,741			24,137
NON-INTEREST INCOME
Service charges and fees		578			541			2,094			2,117
Gain on sale of loans		83			47			276			478
Earnings on bank-owned life insurance		168			332			503			652
Brokerage		211			149			636			597
Trust		272			240			885			845
(Gains) losses on marketable equity securities		146			22			(119	)		(37	)
Realized losses on available-for-sale debt securities, net		—			—			—			(1,236	)
Interchange fees		545			435			1,839			1,720
Other non-interest income		264			242			1,007			935
TOTAL NON-INTEREST INCOME		2,267			2,008			7,121			6,071
NON-INTEREST EXPENSE
Salaries and employee benefits		4,311			2,527			11,618			10,406
Occupancy		422			469			1,391			1,476
Furniture and equipment		524			486			2,070			1,757
Pennsylvania shares tax		131			(109	)		365			412
Professional fees		653			476			1,638			1,390
Director's fees		99			76			326			314
Federal deposit insurance		151			67			478			262
Telecommunications		80			77			323			351
Automated teller machine and interchange		119			132			340			338
Merger-related expenses		1,822			—			3,028			—
Other non-interest expense		851			837			2,533			2,362
TOTAL NON-INTEREST EXPENSE		9,163			5,038			24,110			19,068
(LOSS) INCOME BEFORE INCOME TAX PROVISION		(1,753	)		2,873			3,752			11,140
INCOME TAX (CREDIT) PROVISION		(567	)		278			365			1,626
NET (LOSS) INCOME	$	(1,186	)	$	2,595		$	3,387		$	9,514
(LOSS) EARNINGS PER SHARE - BASIC AND DILUTED	$	(0.41	)	$	1.25		$	1.49		$	4.58
WEIGHTED AVERAGE SHARES OUTSTANDING		2,873,775			2,078,705			2,279,808			2,078,218

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	At or 3 Months Ended (Unaudited)
(Dollars in Thousands, Except Per Share Data)	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Operating Highlights
Net (loss) income	$	(1,186	)	$	1,171		$	1,462		$	1,940		$	2,595
Net interest income		8,257			4,891			4,913			5,201			5,453
Provision (credit) for credit losses		3,114			(168	)		(16	)		(409	)		(450	)
Non-interest income		2,267			1,522			1,706			1,626			2,008
Non-interest expense		9,163			5,273			4,857			4,817			5,038
Balance Sheet Highlights
Total assets	$	1,639,779		$	957,580		$	960,080		$	955,030		$	944,014
Loans, net and loans held for sale		1,059,493			556,862			544,593			535,843			525,018
Intangibles		37,504			7,937			7,937			7,937			7,937
Total deposits
Noninterest-bearing	$	266,015		$	165,888		$	175,521		$	178,438		$	181,845
Savings		204,968			155,750			157,833			166,231			171,462
NOW		251,953			146,944			152,358			151,191			152,656
Money Market		103,602			41,521			44,341			51,846			51,850
Time Deposits		324,131			130,472			128,430			127,670			124,512
Total interest-bearing deposits		884,654			474,687			482,962			496,938			500,480
Core deposits*		826,538			510,103			530,053			547,706			557,813
Selected Ratios
Fully tax-equivalent net interest margin (YTD)		2.34	%		2.29	%		2.32	%		2.41	%		2.55	%
Annualized return on average assets		-0.35	%		0.63	%		0.71	%		0.82	%		1.00	%
Annualized return on average equity		-3.95	%		6.78	%		7.63	%		8.94	%		10.45	%
Capital Ratios - Journey Bank
Common equity tier I capital ratio		13.52	%		18.80	%		18.96	%		18.94	%		18.88	%
Tier 1 capital ratio		13.52	%		18.80	%		18.96	%		18.94	%		18.88	%
Total risk-based capital ratio		14.49	%		19.91	%		20.11	%		20.10	%		20.13	%
Leverage ratio		8.03	%		10.58	%		10.65	%		10.62	%		10.52	%
Asset Quality Ratios
Non-performing assets	$	4,475		$	2,659		$	2,562		$	2,808		$	2,654
Allowance for credit losses - loans		9,302			6,094			6,278			6,288			7,279
Allowance for credit losses to total loans		0.87	%		1.09	%		1.14	%		1.16	%		1.37	%
Allowance for credit losses to non-performing assets		207.87	%		244.81	%		245.04	%		223.91	%		274.33	%
Per Share Data
(Loss) earnings per share	$	(0.41	)	$	0.56		$	0.71		$	0.93		$	1.25
Dividend declared per share		0.43			0.43			0.43			0.42			0.42
Book value		43.08			42.50			43.44			44.52			41.34
Common stock price:
Bid	$	34.50		$	34.59		$	37.57		$	40.05		$	45.00
Ask		37.17			35.00			43.00			42.50			51.00
Weighted average common shares		2,873,775			2,080,109			2,079,649			2,079,135			2,078,705

* Core deposits are defined as total deposits less time deposits

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