CB Financial Services, Inc. Announces Implementation of Branch Optimization Initiatives
CB Financial Services, Inc. (NASDAQGM: CBFV) (“CB Financial” or “the Company”), the holding company of Community Bank, today announced the implementation of strategic initiatives to improve Community Bank’s financial performance and to position the bank for continued profitable growth.
Community Bank intends to optimize its current branch network through the consolidation of six branches and the possible divestiture of others, while expanding technology and infrastructure investments in its remaining locations. The decision was the result of a comprehensive internal study that measured branch performance by comparing financial and non-financial indicators to growth opportunities, while evolving changes in consumer preferences, largely driven by the global pandemic, led to an acceleration of branch optimization efforts. Community Bank plans to provide affected customers with details to ensure a seamless transition with minimal disruption to their daily banking needs.
Management believes this initiative is an important first step to improve Community Bank’s operations, and to provide enhanced efficiency and production capabilities. The Bank has also engaged with third-party workflow optimization experts to assist in implementing a number of robotic process automations (RPAs) and more effective sales management that it expects will improve operational efficiencies in the near and long-term. These efforts will likely result in additional innovations designed to improve growth prospects for the Community Bank as customer preferences for mobile and other technology-based services evolve.
In connection with the branch consolidations and the other branch optimization initiatives, CB Financial anticipates non-recurring pre-tax costs during 2021 of up to $6.1 million. This estimated cost excludes the impact of any premium from sale of branches, and assumes no salvage value, lease termination, severance, and other costs associated with the consolidations or sales; however, the Company does anticipate some recovery of these costs over time.
CB Financial expects an annual reduction in pre-tax operating expenses in 2021 of approximately $1.5 million, along with $3.0 million of ongoing pre-tax cost savings as a result of the implementation of the branch optimization initiatives.
The Company intends to provide updates to these estimates when it reports its 2021 first quarter financial results in April 2021.
John H Montgomery, President and Chief Executive Officer, stated, “Over the past 119 years, Community Bank has served as a fixture in the southwestern PA region, with a commitment to providing both quality service to local consumers as well as favorable returns for shareholders. At the same time, we remain vigilant that the global pandemic has driven changes in how customers utilize banking services and have identified strategic areas where we can help to grow our loan pipeline while also providing better service to customers in southwestern Pennsylvania, Ohio, and West Virginia. With a strong financial position, we felt it was time to move forward with a branch optimization strategy that will better align our infrastructure with changing market conditions.”