CB Financial Services, Inc. (CBFV): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for the real story on CB Financial Services, Inc. (CBFV) after their big balance sheet moves this year, and honestly, the competitive landscape is a mixed bag. We need to see how their focus on sticky core deposits-keeping supplier power low there-is holding up against high rivalry in Southwestern Pennsylvania and West Virginia, especially since they are a small-cap player with only $1.55 billion in assets as of Q3 2025. To be fair, their asset quality is rock solid, with nonperforming loans at just 0.19% in Q3 2025, which helped push their Net Interest Margin to 3.64%; but the threat from digital-only banks and national lenders is defintely rising. Below, we map out the five forces so you can see exactly where the pressure points are for CBFV right now.

CB Financial Services, Inc. (CBFV) - Porter's Five Forces: Bargaining power of suppliers

When looking at CB Financial Services, Inc. (CBFV), the power of its suppliers-primarily those providing funding and technology-varies significantly based on the funding source.

For core funding, the bargaining power is low. CBFV is clearly focused on maintaining sticky, core deposit relationships. As of March 31, 2025, core deposits represented 79% of total deposits. This strategy is supported by the Q1 2025 activity where core (non-time) deposits grew by \$26.7 million, while time deposits declined by \$29.1 million compared to year-end 2024.

Conversely, the power is high for wholesale funding sources, which CBFV has been actively managing down. Costly brokered deposits were a focus for reduction in early 2025. At March 31, 2025, brokered time deposits represented only 2.6% of total assets. Brokered deposits are generally considered less stable and more expensive funding, so reducing reliance shifts power back to the bank.

CB Financial Services, Inc. is advancing its Specialty Treasury Payments & Services program, which management is optimistic will drive sustainable revenue growth in the future.

Technology suppliers hold a moderate level of power in the current environment. While global IT spending is projected to rise 9.8% by 2025, reaching \$5.61 trillion globally, CBFV's recent system upgrades suggest they are managing this cost pressure. For instance, noninterest expenses decreased by \$1.1 million from Q1 2025 to Q2 2025, which included ongoing savings from operational changes.

The cost of capital, which is the interest paid on deposits, remains the primary lever influencing profitability. This cost is definitely influenced by Federal Reserve policy. The cost of funds for CBFV reduced to 1.89% in the three months ended June 30, 2025, down from 2.03% in the preceding quarter, directly resulting from disciplined deposit pricing and a recent reduction in the federal funds rate. Interest expense related to deposits was reported at \$5.81M, reflecting a -26.38% change in one reported period.

Here is a quick look at the key funding and cost metrics for CB Financial Services, Inc. as of mid-2025:

The strategic focus on deposit mix directly impacts supplier power:

• Core Deposit Strength: Sticky, core relationships keep supplier power low for the majority of funding.
• Brokered Deposit Reduction: Active reduction limits supplier power in the high-cost, wholesale segment.
• Cost of Funds Lever: The 1.89% cost of funds in Q2 2025 demonstrates successful management of the primary supplier cost.
• Technology Spend: System upgrades suggest managed cost control despite broader market IT spending increases.

Finance: draft 13-week cash view by Friday.

CB Financial Services, Inc. (CBFV) - Porter's Five Forces: Bargaining power of customers

When you look at CB Financial Services, Inc. (CBFV), the power of its customers really splits into two distinct groups: the retail depositors and the commercial borrowers. Honestly, this split dictates a lot about their pricing flexibility.

For retail depositors, the power is definitely moderate. You, as a retail customer, can jump ship pretty easily if you see a better savings rate down the street or online. CB Financial Services, Inc. is operating in a competitive local market, so they can't stray too far from prevailing rates without seeing deposits walk out the door. Still, the bank is actively working to lock in stickier money, evidenced by their focus on core deposits, which made up 77% of total deposits at the end of Q3 2025.

The dynamic flips when you consider commercial borrowers. Their bargaining power is quite low, and here's why: commercial lending is the engine of their loan book. As of September 30, 2025, commercial loans represented a hefty 59.8% of the Bank's total loan portfolio. That's a significant increase from 53.8% just one year prior on September 30, 2024. Switching a large commercial loan relationship is a major headache involving underwriting, covenants, and time; you aren't going to do it for a few basis points.

Here's the quick math on that portfolio shift:

This strategic pivot towards commercial relationships, which management noted they are using to redeploy funds from lower-yielding residential and indirect auto loans, gives CB Financial Services, Inc. more leverage in pricing those specific loans. Plus, the bank's local focus means pricing is often relationship-driven, not dictated by the national rate sheets you see from the mega-banks. That personal touch and local knowledge inherently reduces your power as a borrower to shop purely on price.

On the flip side, customers benefit immensely from the bank's strong credit discipline, which translates to stability. You can see this in the asset quality figures. Nonperforming loans (NPLs) stood at just 0.19% of total loans at the close of Q3 2025. That low level of bad debt means the bank isn't stressed by unexpected losses, which supports a more stable, relationship-focused business model rather than one forced to be aggressively opportunistic on pricing due to credit issues. The Net Interest Margin (NIM) even improved to 3.64% in Q3 2025, showing they are managing their asset yields well, partly through that commercial loan focus.

The power dynamics can be summarized by looking at the core customer segments:

• Retail Depositors: Moderate power due to rate shopping ease.
• Commercial Borrowers: Low power due to high switching costs.
• Asset Quality: Strong credit quality benefits all customers via stability.
• Local Focus: Relationship pricing dampens customer negotiation leverage.

Finance: draft a sensitivity analysis on NIM change if commercial loans drop to 55% of the portfolio by Q4 2026, due Friday.

CB Financial Services, Inc. (CBFV) - Porter's Five Forces: Competitive rivalry

You're looking at the competitive landscape for CB Financial Services, Inc. (CBFV), and honestly, the rivalry is intense because the playing field is highly fragmented across its core operating areas. Community Bank, the subsidiary of CB Financial Services, Inc., concentrates its retail and commercial network across southwestern Pennsylvania and parts of West Virginia. This local focus means CBFV is constantly battling numerous other community and regional players for every loan and deposit dollar.

The sheer size difference between CB Financial Services, Inc. and some of its regional peers definitely puts pressure on its competitive positioning. As of the third quarter of 2025, CBFV reported total assets of $1.55 billion. To put that in perspective, a peer like Mid Penn Bancorp (MPB) reported total assets of $6.27 billion as of September 30, 2025. This disparity means CBFV is a small-cap player in a market that includes institutions with balance sheets more than four times its size, which can translate to advantages in funding costs or scale of marketing efforts for the larger banks.

Here's a quick look at how CB Financial Services, Inc. stacks up against Mid Penn Bancorp on key margin metrics as of Q3 2025, which shows the competitive pressure on profitability:

The competitive environment demands constant optimization, and CB Financial Services, Inc.'s recent actions are a direct response to this. The strategic repositioning of its investment securities portfolio was a clear move to boost its core profitability metric. This repositioning involved selling $129.6 million in book value of lower-yielding investment securities, which carried an average yield of only 2.87%, resulting in an estimated after-tax realized loss of $9.3 million. The goal was to reinvest those proceeds into higher-yielding assets, which is exactly what happened, pushing the Net Interest Margin (NIM) up to 3.64% in Q3 2025, up from 3.11% a year prior. Management anticipates this move will add an approximate 19 basis point increase to the NIM going forward.

This focus on margin improvement is critical for a smaller institution competing against larger, potentially more efficient rivals. You can see the direct competitive actions CB Financial Services, Inc. is taking to stay relevant:

• Shifted loan production towards higher-yielding commercial loans.
• Expected NIM accretion from the securities repositioning of approximately 19 bps.
• Rolling out Specialty Treasury Payments & Services, targeting ~$60 million in deposits by the end of 2025.
• Maintained strong asset quality with Nonperforming Loans (NPLs) at 0.19% of total loans as of Q3 2025.

The rivalry here isn't just about price; it's about executing balance sheet strategy effectively to generate superior net interest income in a crowded, local market. Finance: draft 13-week cash view by Friday.

CB Financial Services, Inc. (CBFV) - Porter's Five Forces: Threat of substitutes

You're looking at how external pressures could pull business away from CB Financial Services, Inc. (CBFV), and the reality is, the substitution threat is quite real across its core business lines. For a community bank, the biggest immediate pressure comes from where people put their money.

• - High threat from national online banks offering superior rates and lower fees for deposits.

CB Financial Services, Inc. is actively managing its funding mix to counter this. Management is focused on improving its deposit base, evidenced by the strategic goal of generating approximately $60 million of deposits from the Specialty Treasury Payments & Services rollout by 4Q25. This initiative is part of a broader effort to reduce reliance on higher-cost funding, which helped the Net Interest Margin (NIM) expand to 3.64% in Q3 2025 from 3.54% in Q2 2025. The bank's total assets stood at $1.55 billion as of September 30, 2025.

• - Increasing threat from fintech lenders for consumer and small business loans (e.g., online platforms).

While I don't have the specific market share data for fintech lenders in CB Financial Services, Inc.'s operating area, the bank is clearly shifting its asset focus. As of June 30, 2025, commercial loans represented 59% of the loan portfolio, a notable increase from 53% at June 30, 2024. This shift suggests a strategic pivot away from potentially more commoditized or easily substituted consumer lending areas. For context on the loan book as of March 31, 2025, Commercial Real Estate loans made up 45.7% of the portfolio, while Residential Real Estate was 30.7%.

• - Credit unions and non-bank lenders offer specialized products, eroding market share in specific loan types.

The bank's focus on commercial lending, which grew to 59% of the loan portfolio by June 30, 2025, is a key area where specialized non-bank lenders often compete aggressively. The Consumer loan segment was only 5.7% of the portfolio as of March 31, 2025.

• - Insurance brokerage segment (Exchange Underwriters) faces substitution from large national brokers.

In the insurance brokerage space, the scale of national competitors presents a clear substitution risk for Exchange Underwriters. For instance, Lockton, one of the largest privately owned global insurance brokers, produces over $4 billion of annual revenue. Meanwhile, small and midsize brokers surveyed by Reagan Consulting expect a 10% gain in 2025, which gives you a sense of the competitive landscape for smaller players. The overall market context shows the total available market for insurance distribution revenue is forecast to grow roughly 36% between 2024 and 2029, a large pie that national players are better positioned to capture.

CB Financial Services, Inc. (CBFV) - Porter's Five Forces: Threat of new entrants

The threat of new entrants for CB Financial Services, Inc. is generally considered low when looking at the traditional, full-service bank model, but this assessment shifts when considering agile, digital-only competitors.

For traditional bank entrants, the barriers to entry remain substantial due to the heavy regulatory environment and the significant capital required to operate. Starting a new bank requires navigating complex federal and state chartering processes, which is a time-consuming and expensive endeavor. This regulatory friction acts as a significant moat around established players like CB Financial Services, Inc.

CB Financial Services, Inc.'s capital strength serves as a direct barrier to entry for potential traditional rivals. As of the first quarter of 2025, CBFV's stated Tier 1 Leverage Ratio was 10.36%. This figure is well above the general minimum Tier 1 leverage ratio of 4% required for all banking organizations subject to U.S. capital rules, indicating a robust capital cushion that new entrants would need to match or exceed to compete on perceived stability. Furthermore, the FDIC has proposed lowering the Community Bank Leverage Ratio (CBLR) requirement from 9 percent to 8 percent for qualifying community banks, but this still represents a high capital hurdle for a startup to clear immediately.

However, the threat level increases considerably from digital-only banks, often called neobanks. These entities can enter the market with a fundamentally different cost structure, primarily by avoiding the massive fixed costs associated with maintaining a physical branch network. They compete on user experience and digital convenience, which can attract younger demographics or customers prioritizing mobile access over in-person service.

CB Financial Services, Inc.'s defense against these digital threats rests heavily on its established local footprint. The local relationship banking model, deeply embedded in its operating regions, creates a barrier based on trust and existing customer relationships. Community Bank operates its branch network specifically in southwestern Pennsylvania and northern West Virginia. While the company has engaged in branch optimization, as of 2021, it operated 14 locations across these two states, focusing on core markets. This physical presence and long-standing community ties are difficult for an unproven digital entrant to replicate quickly.

Key structural barriers for new entrants include:

• High initial capital to meet regulatory minimums.
• Established physical presence in PA/WV markets.
• Deep local commercial lending relationships.
• Regulatory compliance complexity for charters.

Finance: draft a comparative analysis of CBFV's loan portfolio mix versus the regional average by Friday.