Community Bankers' : Annual Report

Providing financial solutions to generations since 1905.

2021 Annual Report

F i n ancial H ighlights

Community Bankers' Corporation and Subsidiary Marion Center Bank

(In Thousands except for per share information)

2021

2020

2019

2018

2017

AT YEAR END

B A LA NC E S H E E T

Total Assets Investment Securities Gross Loans Deposits

$

• 389,524 $ 97,557 275,542 357,830

• 355,389 $ 74,252 253,419 317,828

• 319,365 $ 56,507 245,132 283,228

306,379 $ 292,604 50,557 53,790 239,476 222,057 261,807 251,763

Total Stockholders' Equity

Adjusted for:

Accumulated other comprehensive loss Goodwill Subordinated debt Total Tier I Capital

24,198

1,101 (366) 1,962

• $ 26,895 $

24,239

22,509

20,171 19,242

(494) (366) 2,191 25,570 $

263 (366) 2,391 24,797 $

1,272 1,029

(366) 2,591 23,668 $

(366) 2,791 22,696

R A TI OS

Return on Average Assets Return on Average Equity

0.64 % 9.81

0.54 % 7.84

0.68 % 9.94

0.66 % 10.03

0.46 % 6.95

P E R S H A R E I N F O R M A T I O N

Net Income Dividends Declared Book Value

Book Value on Tier I Capital

$

• 1.06 $ 0.3600 10.75 11.95

• 0.81 $ 0.3600 10.76 11.36

The market closing price on December 31, 2021 was $8.75 per share.

• 0.94 $ 0.3600 9.97 10.98

0.88 $ 0.59 0.3640 0.3480 8.94 8.53 10.49 10.03

Dear Shareholders:

We successfully navigated another year of uncertainty with COVID-19 and its impact on the banking system. At Marion Center Bank and its holding company, Community Bankers' Corporation, we have learned to adjust and adapt to the multiple changes presented to us.

Over the past year, we once again witnessed the necessity of limiting in-person customer contact and successfully offered electronic banking solutions to safely serve and protect our valuable customers and our employees. Our dedicated staff must be commended for adhering to the many federal guidelines and changes issued by the Centers for Disease Control (CDC).

As a recap to the Balance Sheet, total net loans are over $272 million. This is an 8.7% increase year-over-year. The Allowance for Loan Loss reserve continues to provide appropriate coverage for potential non-performing loans.

The Bank's investment portfolio increased $23 million or 31.4% for the year to bring the total portfolio to an ending balance of over $97 million.

Our deposits increased by over $40 million, or 12.6%, due in part to the stimulus checks issued to our customers by the federal government in response to the pandemic. Total bank assets grew to $389 million and lowered the capital ratios since asset growth outpaced earnings. While we continue to be classified as a well-capitalized institution, we are closely monitoring our retained earnings and positioning ourselves for controlled growth.

Despite the many obstacles we faced, your bank was able to achieve a record earnings year. The consolidated income was 29.5% higher than the prior year. A major contribution was the receipt of $622,339 in fee income derived from the Paycheck Protection Program (PPP). We were pleased to assist business borrowers with federal funding to aid their needs during the COVID-19 crisis. We helped 144 companies by processing their loan requests. In turn, these businesses were able to receive the necessary funds to keep their operations going and their staff employed during the pandemic.

As a return on your investment in Community Bankers' Corporation, the dividends paid to shareholders were very attractive. The payout percentage to shareholders of 2021 earnings was 34.12%. In relation to the dividend yield, it was 4.11% as of December 31, 2021 with a stock price of $8.75 per share. Earnings per share were $1.06 per share for the year ended December 31, 2021, which is 30.9% higher than the prior year.

In closing, we want to thank you for your support. Marion Center Bank has been independently owned since 1905 and it is because of loyal shareholders like you that we are able to serve our local communities.

If your family, relatives, friends or associates have any financial or banking needs, please refer them to us so that we can grow together.

John Gandolfi

George Karlheim

John Gandolfi, Chairman

President/CEO

COMMUNITY BANKERS' CORPORATION

AND SUBSIDIARY

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

Page
Number
Independent Auditor's Report	1-2
Financial Statements
Consolidated Balance Sheet	3
Consolidated Statements of Income	4
Consolidated Statements of Comprehensive Income	5
Consolidated Statements of Changes in Stockholders' Equity	6
Consolidated Statements of Cash Flows	7
Notes to Consolidated Financial Statements	8-37

ANNUAL REPORT

DECEMBER 31, 2021

THIS REPORT HAS NOT BEEN REVIEWED OR CONFIRMED FOR

ACCURACY OR RELEVANCE BY THE FEDERAL DEPOSIT INSURANCE CORPORATION

INDEPENDENT AUDITOR'S REPORT

Board of Directors and Stockholders

Community Bankers' Corporation Indiana, Pennsylvania

Opinion

We have audited the accompanying consolidated financial statements of Community Bankers' Corporation and its subsidiary (the "Company"), which comprise the consolidated balance sheets as of December 31, 2021 and 2020; the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for the years then ended; and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued or available to be issued.