Good morning, everyone. Good morning, this is Pat McCune, CEO of Community Bank. We're starting our investor call following our announcement yesterday of our transaction with First West Virginia. I am in the Ralph J. Sommers Operations Center in Waynesburg, along with Kevin Lemley, our CFO, and Ralph Burchianti, who is our Chief Credit Officer. We are joined by Pat O'Brien, the President of Community Bank; and Bill Petroplus, the CEO and President of Progressive Bank, although they are in Wheeling. This morning, a number of Community Bank representatives went to Wheeling to personally address the employees of Progressive Bank to further explain the transaction and to assure them that this combination is going to be a success and in their interest as well. Before I start, I'm obligated to remind everybody that all listeners are cautioned regarding forward-looking statements and other legal disclosures included on the second page of the presentation, and that presentation is the investor presentation that can be found on the Community Bank website, www.communitybank.tv, in the Financial Highlights and Press Releases section. It can also be found with the 8-K, which has been filed. But to continue, all forward-looking statements discussed during this call are based on management's current beliefs and assumptions and speak only as of the date and time they are made. We do not undertake to update such forward-looking statements. Investors are urged to read the proxy statement and other relevant materials related to the merger when they become available as they will contain important information about CB Financial Services, First West Virginia and the merger. Having done that, I'd like to make some comments about Community Bank and Progressive and the transaction, and then ask Pat O'Brien to give his comments and briefly review the investor deck. So I'm presuming that…

And sir, your line is open.

Good morning. This is Pat O'Brien, can you hear me now?

Yes, Pat. I can hear you.

Okay, great. Thank you, Pat, and thank you for that introduction. Good morning to everybody that is listening in. We truly appreciate your time and your interest in the transaction that you saw announced last evening. It truly is a transformational transaction for CBFV. I joined in with Pat in just being very excited to have Bill Petroplus and Progressive Bank joining together with us in the very near future. To guide my comments with you today, I'd like to use the Investor Deck that was embedded in the 8-K that was sent out last night. And so if you are looking at that, I'm looking at Page 2, just to talk about the transactional rationale for a few moments. It's an attractive expansion into the Ohio River Valley. And you'll see the highlights there. First West Virginia is the fifth largest deposit market share in the Wheeling, West Virginia MSA. So a good sizable chunk of deposits, $285 million worth, and at a very low cost, which is very attractive to us. And I will drive into a little bit more detail in that in a few moments. First full year earnings per share accretion somewhere around 15%. It certainly improves core funding and liquidity profile for CBFV. Again, of those deposits, 80% are non-time, about 40% are transactional. Total costs of deposits, again, a very attractive 23 basis points, that's as of September 30. And together, more than $1 billion in combined deposits with a weighted average cost of 35 basis points. So together, it's a very low-cost, sticky relational group of deposits that we have. As far as market familiarity, Pat mentioned that I do have a long history in the Ohio Valley market. I live in Washington County, Pennsylvania, which is just to the east southwestern…

Thank you, Pat. Good job. And this investor deck can be found on the Community Bank website as well. And again, I just wanted to identify and congratulate and thank Bill Petroplus for his leadership during this transaction. I thought he did a great job for his bank and protecting his people, and we look forward to working with him on the combined bank to build that market share in the Ohio Valley and elsewhere. With that, we'll open it up to questions. Jessica, would you please allow any questions to come through?

[Operator Instructions] And you do have a question, caller, please ask your question.

First of all, congratulations and look forward to working closely with the Progressive Bank leadership team on the integration. A couple of financial questions, then I have a few strategic questions as well that maybe you won't have the full picture of yet, but maybe you can provide some color on. From a financial perspective, am I doing the math correctly that with about $40 million of purchase price being in stock, this would add about 1.3 million, 1.4 million additional shares to be outstanding?

That's correct, Doug.

And how are we funding the additional 20% of the purchase price is in cash? How is that being funded?

We have sufficient cash on hand to accomplish that.

So paying cash for the 20% and then issuing additional stock, which will be about 25% dilutive to the current amount, which is about 4.1 million. So is that about that right?

Yes.

And then the dividend yield that Pat O'Brien was just referring to of 3.2%, is that based on the current $0.88 a share because CB has been trading above $30, it's closer to 2.9%. So I just wasn't sure how the dividend yield was being calculated in the investor presentation?

Yes, that was calculated versus the price of the stock when that was done. And as the stock goes up, the calculation you've done is probably correct today.

And finally, there has been some appreciation to CBFV, of late. I saw the plans, when Pat O'Brien went through the slide deck, I saw about $3 million of maybe some cost overlap. Is that kind of corporate redundancies, not having two corporate operations and maybe redeploying people into different areas -- I saw that the efficiency ratio in one of the slides was 82.3%. I'm assuming that part of the plan is to get that a bit lower?

Yes. I'll hit that one, Pat. Doug, good morning. You are exactly right. There are a number of redundancies that we've already identified from a standpoint of the operations. Some of those will be within the systems that are duplicated. We're on Fiserv. They are on Jack Henry. We will, obviously, combine that together, there will be savings there and a number of other operational and system savings. And then, as everybody would expect, there are redundancies with people with FTE, and so we're driving those expense saves on that side as well. We don't know them all granularly yet. That's part of our process that we're beginning today in the branches and within the corporate center of Progressive Bank, but that's where those cost saves will be derived.

And then, as far as Exchange Underwriters, I know that the insurance operations and all the great cross-sell activities to date in Pennsylvania, have you thought about -- I mean, it maybe a little early, but will there be a similar approach to hire licensed insurance agents in West Virginia, maybe on the Ohio side of it too just to make sure -- to cross-sell to the current Progressive Bank customers and benefit from that as well?

And for those listening in, Community Bank owns a full-service insurance brokerage firm known as Exchange Underwriters, and we've been successful over the last number of years of integrating the bankers and the insurance agents together to cross-refer business. We had success both on the commercial side of the bank as well as the personal lines side. As we look at the Ohio Valley market and West Virginia, we definitely will extend that same partnership between Exchange Underwriters and Community Bank to drive additional revenue through the insurance side of what we do, and we will be linking the commercial lenders with the commercial insurance producers and similarly with the consumer lenders and the personal lines producers of Exchange Underwriters to develop additional revenue through the insurance agency.

And can I assume when you all were doing the modeling on the merger that any of the -- any of those benefits from an insurance standpoint, increased insurance revenues for EU were not included in any of the merger assumptions -- in any of like the EPS moving forward, am I correct? Or did you include insurance?

Not in any type of -- in any significant way.

We did not model in additional earnings from Exchange, but I would recall that Rich Boyer, the President of Exchange, is also licensed in West Virginia.

So that could present some upside opportunity moving forward that is not even contemplated in the existing modeling. And my last question, just so I am not monopolizing any other questions that are out there. The allowance for loan loss reserves of Progressive Bank, I know Community Bank has always had a very conservative, reserve take in loss provision and Progressive's is a little bit lower. Is that part of the charge in 2018 to boost reserves a bit to get it more in line with Community Banks' historical ratio? What are your thoughts about that?

I can take that. Their existing reserve -- this is Ralph Burchianti by the way. Their existing reserve is 1.7%, so actually they're higher than our reserve at this point. We think they're fairly conservative in their reserve calculation. So and we reviewed it, we think it's certainly adequate.

It goes away though.

That reserve by the way will go away, and we'll do a calculation, of course, establish a credit mark on the loan portfolio that we're purchasing. I think we modeled $2.5 million as credit mark, I believe.

[Operator Instructions] And you do have another question, caller, please state your name and ask your question.

This is Shanon Chase with FIG Partners. Just wanted to check, I saw you referring to the consensus earnings when you were talking about the 15% earnings accretion in 2019, are you using 207 for that?

We used basically, First West Virginia's internal budget projections for that period absent any projected interest rate increases. So that number sounds reasonable.

So I had consensus for CBFV of 207 for 2019 and then what is that 15% earnings accretion from that, from what we see in the slides? Does that sound reasonable?

Yes, that sounds reasonable.

And your next question comes from the line of Michael Perito.

Maybe a question for Pat O'Brien. So looking on the slide deck here, and it says assumes $155 million of incremental loan growth from CBFV and FWVB funded through of redeployment of excess liquidity over the next three years. So I just want to make sure I am thinking about that in the right way. Is that essentially saying, if you break that down over the next three years, 2018, '19, and '20, you essentially expect to do about $50 million of net loan growth between the pro forma institution, which now will be funded by all that excess liquidity that you guys are bringing on versus before where that might have been more funded by some higher incremental cost funding?

That is correct.

And I guess, how much growth assumption of that $155 million is coming from FWVB versus the legacy CB franchise?

We're still working on some of that budgeting to drill down to it, but we're not anticipating that, that growth will be as robust in the first couple of years from the traditional First West Virginia market. There is some revamping of the lending staff that needs to occur. And as we think about Pennsylvania though in the core market of CBFV, that's where our confidence lies in those growth numbers. As you know from us talking before, Mike, we know that the Pittsburgh market is a robust market right now, and we are making good inroads there as well as the core Community Bank markets of Washington County, in particular. So it's a strategy of taking those low-cost funds of the Ohio Valley and redeploying them in an aggressive way in the Greater Pittsburgh market, while we put in place people and processes to more effectively lend in the Ohio Valley market.

And then the -- so obviously on day one, the deal will be dilutive to your margin, Just because of the bigger investment portfolio you guys would be carrying. I guess, it seems like it's going to be about 50 basis points at the start. I guess, maybe, Kevin, I mean, how fast you guys think you can kind of redeploy and work that impact down over the next few years?

Well, the key is the deployment of the favorably priced cost of funds of the deposits from First West Virginia. And we've dedicated ourselves to trying to get that money redeployed as quickly as possible, but it is going to be slow and ramp up over the next two to three years.

Is there anything, I guess, in the investment portfolio that you guys are going to look to maybe sell and reposition or anything like that? Or is it pretty consistent with how you guys have run your investment portfolio historically?

It's very consistent with what we have done historically. But as you just noted, we will once we run some pro forma of the combined portfolio, we'll look for opportunities to restructure and improve yield at the same time.

And then maybe a question for Pat O'Brien on capital or Pat McCune on capital, either/or. The TCE ratio seems like it's going to come into the 8% ballpark pro forma for the transaction. Is that feel like a nice level for you guys? I mean, is that a little lower than you would like to see it or maybe even a little higher? I mean, how do you guys think about kind of the capital position moving forward here after the deal is successfully closed later next year?

Pat O'Brien, you want to take that?

Sure. We traditionally, Mike, as you know, have run with a little healthier number there than 8.1%. And so would we look to probably build that up just a bit, we probably would, but it's not as we break into this new size company and the way we need to perform, operating at levels just slightly higher than that, probably makes sense to us.

I guess, just one last question from me, if I can, on just -- it seems like looking at the pro forma numbers you've provided in the deck, which were helpful, the ROA should get back towards that 90 basis point, maybe a few bps higher range, by 2019, which will be good to see. I mean, as I look back, obviously, after FedFirst, you guys are running about 100 bps. I guess, what do you guys think it takes to kind of continue to close that gap beyond taking the cost saves out of this deal? I mean, is it -- as you move into 2020 and you get more of this liquidity deployed, you think that gets you there in and of itself? Or do you think there is other items that you need to focus on and try and help kind of get the level back to that 2015 level?

From an ROA perspective, Mike, I think in some of our recent discussions to get back up to 1% ROA is going to be a challenging thing. There is no doubt about it. We probably view somewhere a little bit north of 90 bps as a good place to be, where we are able to continue to reinvest in our company and reinvest in our people as well for that long-term health and long-term return. I don't see, again, going back to some of the questions earlier, redeploying the funds is going to be very important. We're going to work extremely hard to do that to get earning levels back up. Some of the synergy with Exchange Underwriters should throw off additional fee income for us as well that will help enhance that overall ROA. But beyond being prudent in our cost saves and managing our expenses and working very hard to redeploy our money safely and profitably is the key to that ROA number improving.

[Operator Instructions] And there are no more questions at this time.

Well, thank you, everyone, who listened and participated in the call. Again, both banks are very excited about this transaction. We think it's the key to building an even more successful and stronger franchise, and we appreciate your support in doing so. Goodbye.

Thank you all. Thank you.

And this concludes today's conference call. You may now disconnect.