CB Financial Services, Inc. Authorizes New Stock Repurchase Program of up to 5% of Outstanding Common Stock

Rhea-AI Summary

CB Financial Services, Inc. (NASDAQ: CBFV), the holding company for Community Bank, has authorized a new stock repurchase program to buy back up to 5% of its outstanding common stock. Based on the July 22, 2024 closing price, this program could involve 257,095 shares, valued at approximately $6.0 million. The repurchase program will commence after the Q2 2024 earnings release and terminate on July 25, 2025. Repurchases may occur in open-market or private transactions, following a Rule 10b5-1 trading plan. The program can be suspended, terminated, or modified at any time and does not obligate the company to purchase a specific number of shares.

Positive

• Authorization of a stock repurchase program for up to 5% of outstanding shares
• Potential $6.0 million value of the repurchase program
• Implementation of a Rule 10b5-1 trading plan for systematic repurchases
• Flexibility to suspend, terminate, or modify the program as needed

Negative

• Potential reduction in cash reserves due to the $6.0 million repurchase program
• timeframe for repurchase completion (July 25, 2025 deadline)

Insights

Financial Analyst

The decision by CB Financial Services, Inc. to authorize a new stock repurchase program can signal confidence in the company's financial health and future performance. By reducing the number of outstanding shares, earnings per share (EPS) can potentially increase, making the stock more attractive to investors. However, it is important to note that share buybacks do not inherently add value to the company’s core business operations.

One key factor here is the company's available liquidity and its ability to execute this repurchase without compromising other strategic initiatives. Investors should be aware that while stock buybacks may lead to short-term stock price appreciation, this action alone does not guarantee long-term financial stability or growth.

Market Research Analyst

From a market research perspective, the timing of this repurchase program is vital. The company plans to begin repurchasing shares after releasing its quarterly earnings. This suggests that management might be confident about the upcoming earnings report, anticipating positive market reception. However, investors should keep in mind the potential market volatility and how external economic factors might impact the company's ability to follow through with the repurchase plan.

Additionally, the flexibility within the repurchase plan (such as the ability to suspend or modify repurchases) indicates a cautious approach, allowing for adjustments based on market conditions and other factors. This flexibility can be seen as both a prudent risk management strategy and a potential source of uncertainty for investors.

Legal Expert

Analyzing the legal aspects, the adoption of the Rule 10b5-1 repurchase plan is a significant point. This rule allows companies to buy back shares during periods when they might otherwise be restricted due to blackout periods. The strategy ensures that repurchases can be conducted in a structured manner, adhering to SEC regulations, which helps mitigate legal risks associated with insider trading allegations.

However, it's important for investors to understand that the repurchase plan's execution will depend on various factors, including market conditions and legal constraints. The company's commitment to compliance with Rule 10b5-1 reflects a strong adherence to regulatory standards, which can bolster investor confidence in the governance and transparency of the company.

WASHINGTON, Pa.--(BUSINESS WIRE)-- CB Financial Services, Inc. (the “Company”) (NASDAQ: CBFV), the holding company for Community Bank, announced today a program to repurchase up to 5% of the Company’s outstanding shares of common stock. Based on the Company’s closing stock price on July 22, 2024, the program, if fully completed, would encompass 257,095 shares, or approximately $6.0 million of shares currently outstanding.

Repurchases will not occur until after the Company issues its earnings release for the quarter ended June 30, 2024, which the Company expects to do during the week of July 22^nd. The repurchase program will terminate on July 25, 2025, regardless of whether all shares have been purchased.

Repurchases may be transacted in the open-market or in negotiated private transactions and will be conducted pursuant to a trading plan adopted in accordance with limitations set forth in Rule 10b5-1 of the Securities and Exchange Commission. The Rule 10b5-1 repurchase plan allows the Company to repurchase its shares during periods when it would normally not be active in the market due to its internal trading blackout period. The repurchase program may be suspended, terminated or modified at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate. These factors may also affect the timing and amount of share repurchases. The repurchase program does not obligate the Company to purchase any particular number of shares.

About CB Financial Services, Inc.

CB Financial Services, Inc. is the bank holding company for Community Bank, a Pennsylvania-chartered commercial bank. Community Bank operates its branch network in southwestern Pennsylvania and West Virginia. Community Bank offers a broad array of retail and commercial lending and deposit services.

For more information about CB Financial Services, Inc. and Community Bank, visit our website at www.cb.bank.

Forward Looking Statements

This press release contains certain forward-looking statements about the stock repurchase program. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Certain factors that could cause actual results to differ materially from expected results include delays in completing the proposed repurchase program, changes in the interest rate environment, changes in the market price of the Company’s common stock, changes in the general economic conditions, legislative and regulatory changes that adversely affect the business of the Company and Community Bank, changes in the securities markets, and other factors disclosed in the Company’s periodic filings with the Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240722567184/en/

John H. Montgomery

President and Chief Executive Officer

Phone: (724) 223-8317

Source: CB Financial Services, Inc.

FAQ

What is the size of CB Financial Services' new stock repurchase program?

CB Financial Services (CBFV) has authorized a stock repurchase program for up to 5% of its outstanding common stock, which equates to approximately 257,095 shares or $6.0 million based on the July 22, 2024 closing price.

When will CB Financial Services (CBFV) begin its stock repurchase program?

The stock repurchase program will commence after CB Financial Services (CBFV) releases its earnings report for the quarter ended June 30, 2024, expected during the week of July 22nd.

What is the duration of CB Financial Services' (CBFV) stock repurchase program?

CB Financial Services' (CBFV) stock repurchase program will terminate on July 25, 2025, regardless of whether all shares have been purchased.

How will CB Financial Services (CBFV) conduct its stock repurchases?

CB Financial Services (CBFV) will conduct stock repurchases through open-market transactions or negotiated private transactions, following a Rule 10b5-1 trading plan.