8-K
MUNCY COLUMBIA FINANCIAL Corp (CCFN)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
Current
Report
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
August 1, 2023
Date
of Report (Date of earliest event reported)
CCFNB Bancorp, Inc.
(Exact name of registrant as specified in its charter)
| Pennsylvania | 000-19028 | 23-2254643 |
|---|---|---|
| (State<br> or other jurisdiction of<br><br> <br>incorporation) | (Commission<br><br> <br>File<br> Number) | (I.R.S.<br> Employer<br><br> <br>Identification<br> No.) |
232 East Street
Bloomsburg, PA 17815
(Address of principal executive offices)
570-784-4400
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☒ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| None | None | None |
Indicated by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2) ☐
If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
ITEM
2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
Lance O. Diehl, Chief Executive Officer, announced the consolidated financial results for CCFNB Bancorp, Inc. and Subsidiaries for the second quarter 2023. On August 1, 2023, CCFNB Bancorp, Inc. issued a press release titled “CCFNB Bancorp, Inc. Reports Second Quarter 2023 Earnings” attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable
(b) Not applicable
(c) Not applicable
**(**d) Exhibits.
Exhibit Number Description
| 99.1 | Press Release<br> issued by CCFNB Bancorp, Inc. on August 1, 2023 titled “CCFNB Bancorp, Inc. Reports<br> Second Quarter 2023 Earnings” |
|---|---|
| 104 | Cover Page Interactive<br> Data File (embedded in the cover page formatted in Inline XBRL) |
| --- | --- |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| Date: August<br>1, 2023 | CCFNB Bancorp, Inc. |
|---|---|
| By:<br> /s/ Jeffrey T. Arnold | |
| Name:<br>Jeffrey T. Arnold, CPA, CIA | |
| Title:<br>Executive Vice President & Chief Financial Officer |
Exhibit 99.1
Press Release – For Immediate Release
August 1, 2023
CCFNB Bancorp, Inc. Reports Second Quarter 2023Earnings
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
| December 31, | |||||
| (In Thousands, except share data) | 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 |
All values are in US Dollars.
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 ****