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On Wednesday, DA Davidson confirmed a Neutral rating for CB Financial Services (NASDAQ:CBFV) with a steady price target of $30.00. The $149.71 million market cap bank, which according to InvestingPro analysis is currently trading below its Fair Value, showed mixed results. The analysis by Manuel Navas highlighted several key financial aspects, including a miss on pre-provision net revenue (PPNR) due to weaker net interest income (NII) and fees, which was somewhat balanced by improved operating expenses. The report also noted a decline in loans by 2% and deposits by 1%, despite a positive net interest margin (NIM) expansion of 14 basis points.
Navas mentioned a provision release and a buyback program, which repurchased approximately 1.5% of the company’s outstanding shares. Following the earnings report, CB Financial’s shares have fallen 9% against the Keefe Bruyette & Woods Bank Index (KRX) due to the PPNR shortfall and subdued loan growth.
The firm anticipates a more favorable loan growth trajectory in 2026, driven by investments in the Treasury Management team, which are expected to provide better funding. DA Davidson forecasts that these developments will lead to improved operating leverage after 2025. However, projected returns are still below peer averages, with an estimated 1.2% PPNR return on average assets (ROAA) in 2026.
Navas concluded with an outlook for CB Financial, suggesting that despite the positive impact of a better NIM on the 2025 estimates, the potential for stock price appreciation remains limited, maintaining the Neutral stance on the stock.
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