Comments 2012 Annual Meeting


CB Financial Corporation

June 28, 2012

Mr. Anthony:    Comments

Good morning. I am John Anthony, Chairman of the Board of Directors of CB Financial Corporation, the bank holding company for Cornerstone Bank. On behalf of my fellow directors, the company’s management and staff, stockholders and customers, I welcome you to our 2012 Annual Meeting of stockholders. Thank you for your interest and congratulations to all who have helped Cornerstone Bank into a preferred bank for this area.

Copies of the 2011 annual report and the proxy statement and proxy card for the meeting were mailed in advance to each shareholder. We have additional copies here today for anyone who would like one.

I am thrilled to be here this morning to discuss our progress. Never have I appreciated an annual meeting as much as this one. Over the last three years we have suffered the worst economy since the Great Depression.  But we have survived! The worst is behind us and we look forward to the future. Now we can turn our attentions to thriving.  There will be more challenges but we will not falter.  And, we will not change who we are. We’re still the Bank we promised our community: a Bank that is locally owned, locally managed, and with a mission of serving THIS market. And THIS market has embraced Cornerstone, building us into the largest community bank in Wilson, behind only BB&T and Wells Fargo and ahead of banks such as First Citizens, Heritage, PNC & Bank of America.

Mr. Osborn:     Comments

………. Now as we move outside the formalities and requirements of the annual meeting, we can shift to some comments and updates on our progress. We have been above-board and frank in telling you that we have lost a lot money in the past three years and that we are continuing to work through the requirements of our “consent agreement” with the FDIC. We have complied with virtually every item in that agreement.  One of the requirements was that we replenish the Bank’s regulatory capital.  On February 29 of this year we closed a private placement offering that provided us an additional $4 million of capital. We can never underestimate the importance of that campaign. Today there are more than 21 troubled banks in North Carolina that are either closed, under new management, or under new ownership composed of private equity or similar investors. Those troubled banks tried, in one way or another, to raise the capital necessary to remain independent and failed.  We are the only NC bank and one of the few banks in the nation to accomplish the feat of raising the capital necessary to survive and thrive from our stockholders and our community. We exist because the people of Wilson want us to exist and we are very much aware of that. Simply put, we are thankful.

The past three years have been extremely difficult, for our directors, our senior management team, our employees and for our shareholders. We have diligently managed our asset size, reduced expenses and right-sized the Bank—all because of the severe market conditions that confronted you Bank.  Since the economic crash of 2008 we have reduced core operating expenses, not including our FDIC insurance premium over $1.7 million annually or 32%.  At the same time the FDIC has raised our insurance premium, 330% to almost $600,000 annually. Even with these additional premiums we have saved the Bank almost $1.6 million during this time period. And we have not stopped seeking ways to reduce expenses and increase revenue.

Unfortunately, one of the downsides of this “Great Recession” and the “right-sizing” of our Bank is the unfortunate reduction in personnel.  One of our remaining employees said she feels like she’s been in a plane crash, and that she survived but others did not. She said she feels guilty that she has a job and others do not. That’s a very heavy burden for anyone to carry.

But I tell her this. She does not need to feel guilty. She is here because she is needed, is important to us past, present, and future, and the problems of the economy are not her fault. And, in most cases, all of us can say that. We are not at fault for the practices of Wall Street financial institutions.  The problem is, the consequences of Wall Street recklessness eventually reached Main Street, and that’s how we have been damaged. None of us here seek bankruptcies or foreclosures, none of us seek job losses, and none of us desire to see businesses closed. But bad things happened to good people, and we held some of those loans.

Now, we sense our ship is righted. Our losses have been substantially reduced, and we continue to work on eliminating our few remaining problem loans. For the first time in three years, we see the light at the end of the tunnel. And, in a sense, we have a huge opportunity to reconstruct our Bank and become and even stronger fixture in our market.

That said, I think it is fair and appropriate to ask, what have we learned?

First, we would NOT change who we are.  We would still stand by our customers, still do what a community bank does, and still strive to be the best we can in our market. Nothing means more than standing by our customers. And throughout this difficult period, we have not wavered at all in our commitment to customer service to our customers.

Secondly, we have learned that the people of Wilson are exactly the kind of people we want to be around. We choose to live here, choose to work here, choose to invest here, choose to bank here, and no matter what others are doing in corporate banking offices in far away places, we are genuinely thrilled to be a part of this community.

A few years from now, we’ll look back at the bad times and our astonishing accomplishments of the past three years, and we’ll know that we were survivors…and that we did what we’ve always intended to do:  do things right and do the right things.
We still believe that is enough. It’s who we are; it’s engrained into our culture, visible in our employees, and shared with our customers. If anyone wants to see what a banking experience is supposed to be like, just stop by our offices —I really believe that you’ll like what you see. And, in due time, we’ll have shareholders who recognize our value and are proud to have ownership in this bank.

2012 Annual Meeting Comments