Mar 29, 2024 5 min read

How 123-year-old Community Bank is leaning into new FinTech and interaction-driven process improvement to effect a transformative expansion that is positioning it to compete head-on with the region’s traditionally big banks

Deep in the hills of Southwestern Pennsylvania, in a rural Greene County coal community with fewer than 500 residents, 1901 marked the launch of a small community bank called the First National Bank of Carmichaels.

It would take 86 more years for the Bank to begin its official expansion into Washington County and change its name to Community Bank. And still longer to acquire another bank that would allow it to become publicly traded (NASDAQ: CBFV), with office branches throughout Greene and Washington counties, as well as in West Virginia’s western panhandle, and expanded financial service offerings. But that was then.

Today, only three years into an ambitious 10-year strategic growth plan, Community Bank continues to serve its traditional markets while expanding rapidly with a new commercial lending division, a dedicated Small Business Team, a Treasury Management Team, specialized financial services for the health care industry, a locally based call center, and a series of financial technology investments aimed at elevating the Bank’s client interactions and cybersecurity.

“Our focus today remains firmly on innovation and excellence,” said John H. Montgomery, President and CEO of Community Bank for the past three years and author of the Bank’s latest transformative strategic plan. “We are continuously exploring new ways to enhance our client’s banking experience, whether it’s through financial solutions or innovative digital tools that empower them to achieve their goals.”

The planning efforts are paying off already, according to the latest reported year-end financial results. The Bank’s holding company, CB Financial Services, Inc., reported adjusted net income (Non -GAAP) of $12.6 million for the year ended 12/31/23 versus $11.2 million for the previous year. Adjusted earnings per common share – diluted (Non-GAAP), meanwhile ended 2023 at $2.46 per share, up from $2.14 per share in 2022.

Total assets rose to $1.46 billion in 2023, up from $1.41 billion in 2022. Excluding the $34.9 million decrease in indirect automobile loans, a product the Bank discontinued in 2023, total loans increased $95.4 million in 2023, up 9.1% and included an increase of $41.2 million – or 58.9 percent-in commercial and industrial loans.

Shoring up its legacy

“We are a true community bank that is heavily invested in our communities, and we tend to have a long tenure with our clients,” Montgomery said. “But the banking and finance industries have changed as client expectations have evolved. We needed to change with it if we were going to continue being the bank of choice for our clients.”

The Bank’s strategic growth plan has upgraded the technologies supporting the Bank’s services and back-office processing functions, significantly improving client service.

“We had to do some rationalization and consolidation along the way, but we stayed committed to our communities and clients and kept our grand vision focused at a very local level,” Montgomery said of the strategic plan and its ongoing implementation.

At the same time, he said, the Bank’s leaders worked hard to preserve the Bank’s legacy identity. That is, to remain people-centric, “still focusing on clients and employees,” and values-driven, which means embracing an agile work environment and “leaning into” new technologies and processes.

The goal, Montgomery said: “Making it simple and easy for our clients to bank with us.”

The value of human interaction

Among the Bank’s investments is the establishment of a large – and local – virtual banking and call center located in Waynesburg, Pa., that provides real time service to clients through the Interactive Teller Machine (ITM) network. The new ITMs are replacing the older ATMs and have increased functionality via self-service methods and provide complete full-service options via touch screen, connecting clients with a Virtual Teller to completely handle their transactions.

“We now are transacting faster, more efficiently, and less expensively, even as we’re engaging more with our clients,” he said.

“Transactions, though, aren’t where the value is anymore. It comes down to the people. The value is in the human interaction. That’s a differentiator for us in the market.”

In fact, Community Bank is in the middle of a building project for a new, “state-of-the-art” banking facility in Rostraver Township and has been updating other branches across the network, to encourage interactions that add true value to its clients.

Other recent technology investments include an upgraded mobile banking app, back-end transaction processing systems, a new loan origination system, and even a new “.bank” Web domain (www.cb.bank) with builtin safeguards developed specifically for the banking industry and its clients.

Moreover, Montgomery said, all transactional data now is processed in near real time and securely stored in cloud servers with backup redundancy.

Said Montgomery: “We want to be an innovative institution that makes it simple and easy for our clients to do business with us.”

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