SEGMENT REPORTING AND RELATED INFORMATION

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate resources and in assessing performance. The Company's President and Chief Executive Officer functions as its CODM. At December 31, 2024, the Company has one reportable segment, community banking services, upon which the CODM makes decisions regarding how to allocate resources and assess performance. Individual bank branches offer a group of similar services, including commercial, real estate and consumer loans, time deposits, checking and savings accounts all with similar operating and economic characteristics. While the CODM monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis.

The CODM uses net interest income, noninterest income and net income to evaluate income generated from segment assets in deciding whether to reinvest profits into the Company, pursue acquisitions or pay out dividends. Net income is used to monitor budget versus actual results. These metrics and the Company's significant expense categories are disclosed on the Company's Consolidated Statements of Income.

Prior to 2024, the Company managed its operations through two reportable segments, consisting of community banking services and insurance brokerage services. The insurance brokerage services were offered through the Bank's wholly-owned subsidiary, Exchange Underwriters (EU). EU was an independent insurance agency that offered property, casualty, commercial liability, surety and other insurance products. EU had an independent board of directors from the Company and was managed separately from community banking services.

On December 1, 2023, the Company announced that the Bank and EU entered into an Asset Purchase Agreement with World Insurance Associates, LLC ("World") pursuant to which EU sold substantially all of its assets to World for a purchase price of $30.5 million cash plus possible additional earn-out payments. The sale of assets was completed on December 8, 2023 and resulted in an initial pre-tax gain of $24.6 million. During 2024, the Company recognized an additional gain of $138,000 following the final settlement of all liabilities and an earn-out payment of $708,000. Assets remaining in the EU subsidiary at

December 31, 2024 consisted primarily of cash received from the sale of assets. The Bank intends to merge EU into the Bank during 2025.

Following are the results of operations and selected financial information by operating segment for 2023:


	Year Ended December 31, 2023
	Community Banking		Insurance Brokerage		Total		Eliminations		Consolidated Total
Interest Income	$	62,219	$	6	$	62,225	$	—	$	62,225
Interest Expense	17,672		—		17,672		—		17,672
Net Interest and Dividend Income	44,547		6		44,553		—		44,553
Recovery for Credit Losses - Loans	(284)		—		(284)		—		(284)
Recovery for Credit Losses - Unfunded Commitments	(218)		—		(218)		—		(218)
Noninterest (Loss) Income	(6,402)		30,414		24,012		—		24,012
Noninterest Expense (1)
Salaries and Employee Benefits	18,776		3,127		21,903		—		21,903
Occupancy	2,839		159		2,998		—		2,998
Equipment	896		168		1,064		—		1,064
Data Processing	3,014		—		3,014		—		3,014
Federal Deposit Insurance Corporation Assessment	754		—		754		—		754
Pennsylvania Shares Tax	889		—		889		—		889
Contracted Services	1,070		96		1,166		—		1,166
Legal and Professional Fees	1,169		13		1,182		—		1,182
Advertising	370		56		426		—		426
Other Real Estate Owned (Income)	(115)		—		(115)		—		(115)
Amortization of Intangible Assets	1,592		174		1,766		—		1,766
Other Expense	3,478		257		3,735		—		3,735
Total Noninterest Expense	34,732		4,050		38,782		—		38,782
Income before Income Taxes	$	3,915	$	26,370	$	30,285	$	—	$	30,285
Income Tax Expense	351		7,384		7,735		—		7,735
Net Income	$	3,564	$	18,986	$	22,550	$	—	$	22,550
Total Assets	$	1,607,167	$	28,830	$	1,635,997	$	(179,906)	$	1,456,091

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

CB Financial Services, Inc. Segments Disclosure

About Segments Disclosures

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