• CNB Financial Corporation Reports Third Quarter 2022 Earnings Per Share of $0.90 Compared to $0.82 for Third Quarter 2021

    Source: Nasdaq GlobeNewswire / 18 Oct 2022 15:05:18   America/Chicago

    CLEARFIELD, Penn., Oct. 18, 2022 (GLOBE NEWSWIRE) -- CNB Financial Corporation (“CNB” or the “Corporation”) (NASDAQ: CCNE), the parent company of CNB Bank, today announced its earnings for the quarter and nine months ended September 30, 2022.

    Joseph B. Bower, Jr., President and CEO, stated, "The third quarter for CNB was filled with success. First was the $100 million capital raise which will support the growth CNB historically experiences. Second is the successful management transition. Mike Peduzzi took on the role of President and Chief Executive Officer of CNB Bank. Mike has been with us for over a year and has a great grasp on our culture and operating model. Finally, the financial results for the quarter are very positive, as reflected in our asset quality, loan and revenue growth and earnings per share."

    Executive Summary

    • On September 21, 2022, CNB successfully completed a common stock offering resulting in the issuance of 4,257,446 shares of common stock at $23.50 per share and net proceeds of $94.1 million after the deducting underwriting discount and customary offering expenses. The net proceeds from the capital raise will be used for general corporate purposes, including working capital and funding the Corporation's organic growth across its multiple geographic markets, or evaluating potential acquisition opportunities.
    • Net income available to common shareholders was $15.5 million, or $0.90 per diluted share, for the three months ended September 30, 2022, compared to $13.8 million, or $0.82 per diluted share, for the three months ended September 30, 2021, reflecting increases of $1.7 million, or 12.4%, and $0.08 per diluted share, or 9.8%. Earnings for the quarter ended September 30, 2022 compared to the same period in the prior year benefited primarily from growth in commercial loans and year-over-year increases in the balance of investment securities, stable credit quality, and an asset sensitive balance sheet supporting increased net interest income in the current rising rate environment.

      • Processing fees on Paycheck Protection Program ("PPP") loans (“PPP-related fees”) totaled approximately $74 thousand for the three months ended September 30, 2022, compared to $2.4 million for the three months ended September 30, 2021. At September 30, 2022, remaining deferred PPP-related fees totaled approximately $23 thousand.
    • Net income available to common shareholders was $44.1 million, or $2.59 per diluted share, for the nine months ended September 30, 2022, compared to $39.9 million, or $2.36 per diluted share, for the nine months ended September 30, 2021, reflecting increases of $4.2 million, or 10.6%, and $0.23 per diluted share, or 9.7%. 

      • PPP-related fees totaled approximately $1.9 million for the nine months ended September 30, 2022, compared to $6.8 million for the nine months ended September 30, 2021.
    • At September 30, 2022, loans, excluding the impact of (i) syndicated loans, and (ii) PPP loans, net of PPP-related fees (such loans being referred to as the "PPP-related loans"), totaled $3.9 billion, representing an increase of $407.6 million, or 11.8% year to date growth (15.8% annualized), from December 31, 2021. The loan growth, which was experienced across the Corporation's footprint, continued to benefit from the Corporation's ongoing expansion in the Cleveland and Southwest Virginia regions, as well as new opportunities from its new loan production office in Rochester, New York, combined with growth in the portfolio related to its Private Banking division.

      • For the nine months ended September 30, 2022, the Corporation's balance sheet reflected an increase in syndicated lending balances of $27.0 million compared to December 31, 2021. The syndicated loan portfolio totaled $152.8 million, or 3.8% of total loans, excluding PPP-related loans, at September 30, 2022. The Corporation expects the level of this syndicated loan portfolio to remain stable going forward.
    • At September 30, 2022, total deposits were $4.6 billion, reflecting a decrease of $91.8 million, or 1.9%, from December 31, 2021. While noninterest-bearing deposits increased approximately $75.6 million, or 9.5%, benefiting significantly from adding business and fee-generating treasury management deposit relationships, the Corporation’s total interest-bearing deposits decreased approximately $167.4 million, or 4.3%, from December 31, 2021.
    • Total nonperforming assets were approximately $21.8 million, or 0.41% of total assets, as of September 30, 2022, compared to $20.3 million, or 0.38% of total assets, as of December 31, 2021, and decreased from $22.1 million, or 0.42% of total assets, as of September 30, 2021. In addition, for the three months ended September 30, 2022, net loan charge-offs were $310 thousand, or 0.03% of average total loans and loans held for sale, compared to $778 thousand, or 0.09% of average total loans and loans held for sale, during the three months ended September 30, 2021.
    • Pre-provision net revenue ("PPNR"), a non-GAAP measure, was $21.8 million for the three months ended September 30, 2022, compared to $19.5 million for the three months ended September 30, 2021, reflecting an increase of $2.3 million, or 11.6%.1
    • PPNR, a non-GAAP measure, was $64.0 million for the nine months ended September 30, 2022, compared to $58.3 million for the nine months ended September 30, 2021, reflecting an increase of $5.7 million, or 9.8%.1

    1 This release contains references to certain financial measures that are not defined under U.S. Generally Accepted Accounting Principles ("GAAP"). Management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. A reconciliation of these non-GAAP financial measures is provided in the "Non-GAAP Reconciliations" section.

    Michael D. Peduzzi, President and CEO of CNB Bank, commented, "Our third quarter results align very strongly with the themes presented to our investors with our recent successful common capital raise. We continue to experience quality loan growth while maintaining our historical discipline on credit structures and sound underwriting practices. Our asset-sensitive balance sheet position, coupled with our consistent loan growth, supported a higher net interest margin as our increase in earning asset yields more than offset the rising deposit and funding costs we and the banking industry are experiencing as a result of the Federal Reserve rate hikes. Our revenue diversification continues to progress with increasing fee income from wealth and asset management activities, treasury management services, and increasing cardholder usage and interchange income volumes. These all position us well, across our multiple markets and brands, to support the effective deployment of our stronger capital base."

    Balance Sheet and Liquidity Highlights

    • At September 30, 2022, the Corporation’s cash and equivalents position was approximately $209.8 million, including excess liquidity of $153.2 million held at the Federal Reserve, reflecting, in management's view, an adequate liquidity level.
    • As of September 30, 2022, the total balance of investments classified as held-to-maturity was $408.2 million. There were no securities classified as held-to-maturity at either December 31, 2021 or September 30, 2021. During January 2022, investments with an amortized cost of approximately $100.6 million and a fair value of $101.1 million were transferred from available-for-sale to held-to-maturity as a result of the Corporation's asset/liability management strategies. The transfer included $95.7 million of U.S. Government agency securities and $4.9 million of U.S. Treasury notes. During April 2022, mortgage backed securities with an amortized cost of approximately $120.2 million and a fair value of $112.6 million were transferred from available-for-sale to held-to-maturity as a result of the Corporation's asset/liability management strategies. These bonds continue to provide liquidity through pledging and can be utilized as collateral against borrowings. In addition to these internal portfolio transfers, some of the investment purchases made by the Corporation during the first six months of 2022 were also classified as held-to-maturity securities.
    • Book value per common share was $21.70 at September 30, 2022, representing a decrease of 3.5% from $22.49 at September 30, 2021. Tangible book value per common share, a non-GAAP measure, was $19.61 as of September 30, 2022, reflecting a decrease of 1.3% from a tangible book value per common share of $19.87 as of September 30, 2021.1 The decreases in book value per common share and tangible book value per common share were mostly due to a $60.1 million decrease in accumulated other comprehensive income primarily from the temporary unrealized valuation changes in the available-for-sale investment portfolio, which was substantially, but not completely, offset by a $45.8 million increase in retained earnings.

    Performance Ratios

    • Annualized return on average equity was 14.97% and 14.50% for the three and nine months ended September 30, 2022, respectively, compared to 13.51% and 13.46% for the three and nine months ended September 30, 2021, respectively.
    • Annualized return on average tangible common equity, a non-GAAP measure, was 18.21% and 17.63% for the three and nine months ended September 30, 2022, respectively, compared to 16.34% and 16.35% for the comparable periods in 2021, respectively.1
    • The additional capital raised and shares issued on September 21, 2022 will significantly impact future performance ratios and the weighted average number of shares outstanding in the earnings per share calculations, respectively.
    • Efficiency ratio, a non-GAAP ratio, was 61.95% and 60.68% for the three and nine months ended September 30, 2022, respectively, compared to 59.47% and 58.53% for the three and nine months ended September 30, 2021, respectively. The increases for the 2022 periods were primarily a result of expected increasing costs associated with the Corporation’s expanding franchise investments into the Cleveland and Southwest Virginia markets, coupled with its continued strategic investments in technologies focused on customer sales management, while expanding and improving customer connectivity capabilities.1

    Revenue

    • Total revenue (comprised of net interest income plus non-interest income) was $57.9 million for the three months ended September 30, 2022, representing an increase of $9.2 million, or 18.8%, compared to the three months ended September 30, 2021, primarily due to the following:

      • Net interest income of $49.9 million for the three months ended September 30, 2022 increased $9.6 million, or 23.9%, from the three months ended September 30, 2021, primarily as a result of loan growth and the net benefit of higher interest rates. Included in net interest income were PPP-related fees, which totaled approximately $74 thousand for the three months ended September 30, 2022, compared to $2.4 million for the three months ended September 30, 2021.

      • Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 4.02% and 3.30% for the three months ended September 30, 2022 and 2021, respectively.1 
        • The yield on earning assets of 4.45% for the three months ended September 30, 2022 increased 73 basis points from 3.72% for the three months ended September 30, 2021, primarily as a result of loan growth and the Corporation redeploying excess cash at the Federal Reserve to investment securities. Net interest income also reflected the net benefit of higher interest rates, partially offset by lower PPP-related fees in 2022 compared to 2021. The cost of interest-bearing liabilities increased 4 basis points from 0.52% for the three months ended September 30, 2021 to 0.56% for the three months ended September 30, 2022, primarily as a result of the Corporation’s targeted interest-bearing deposit rate increases, which are expected to impact deposit costs beyond the third quarter.
    • Total revenue (comprised of net interest income plus non-interest income) was $164.6 million for the nine months ended September 30, 2022, representing an increase of $22.4 million, or 15.7%, from the nine months ended September 30, 2021, primarily due to the following: 

      • Net interest income of $138.8 million for the nine months ended September 30, 2022 increased $21.1 million, or 17.9%, from the nine months ended September 30, 2021, primarily as a result of loan growth and the benefits of higher interest rates in 2022 from variable-rate loans and net growth in the Corporation's investment portfolio. Included in net interest income were PPP-related fees, which totaled approximately $1.9 million for the nine months ended September 30, 2022, compared to $6.8 million for the nine months ended September 30, 2021.

      • Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.75% and 3.37% for the nine months ended September 30, 2022 and 2021, respectively.1 
        • The yield on earning assets of 4.08% for the nine months ended September 30, 2022 increased 27 basis points from 3.81% for the nine months ended September 30, 2021, primarily as a result of loan growth and the Corporation redeploying excess cash at the Federal Reserve to investment securities. Net interest income also reflected the net benefit of higher interest rates, partially offset by lower PPP-related fees in 2022 compared to 2021. The cost of interest-bearing liabilities decreased 13 basis points from 0.55% for the nine months ended September 30, 2021 to 0.42% for the nine months ended September 30, 2022, primarily as a result of the Corporation’s targeted deposit rate strategies coupled with an increase in the mix of non-interest bearing deposits from 16.9% of total deposits at September 30, 2021 to 18.8% at September 30, 2022.
    • Total non-interest income was $8.0 million for the three months ended September 30, 2022, representing an decrease of $455 thousand, or 5.4%, from the same period in 2021. The decrease was primarily comprised of a $405 thousand increase in unrealized losses on equity securities and a $546 thousand decrease in mortgage banking activity. These changes were partially offset by a $477 thousand increase in income from charges on deposits and a $146 thousand increase in wealth management revenues as the Corporation benefited from an increased number of wealth management relationships.
    • Total non-interest income was $25.8 million for the nine months ended September 30, 2022, representing an increase of $1.2 million, or 5.1%, from the same period in 2021. Included in non-interest income for the nine months ended September 30, 2022 was $651 thousand in net realized gains on available-for-sale securities. Excluding the impact of the realized gains on available-for-sale securities, a non-GAAP measure, for the nine months ended September 30, 2022, total non-interest income increased $598 thousand, or 2.4%, from the same period in 2021.1 During the nine months ended September 30, 2022, Wealth and Asset Management fees increased $435 thousand, or 8.7%, compared to the nine months ended September 30, 2021, as the Corporation benefited from an increased number of wealth management relationships. Other notable increases during the nine months ended September 30, 2022 included increased income from charges on deposit, pass through income from small business investment companies and bank owned life insurance mostly due to an $830 thousand gain resulting from death benefit proceeds. These were partially offset by unrealized losses on equity securities and decreased mortgage banking activity.

    Non-Interest Expense

    • For the three months ended September 30, 2022, total non-interest expense was $36.1 million, reflecting an increase of $6.9 million, or 23.6%, from the three months ended September 30, 2021. The third quarter of 2022 included expenses related to expansion of the Corporation's workforce in its growth regions of Cleveland and Southwest Virginia, increased incentive compensation accruals resulting from the Corporation's financial performance and increased investments in technology aimed at enhancing both customer experience and the Corporation’s sales management. Also, included in the third quarter of 2022 is an approximately a $267 thousand increase in accelerated retirement benefit expenses related to a pending executive retirement.
    • For the nine months ended September 30, 2022, total non-interest expense was $100.6 million, reflecting an increase of $16.6 million, or 19.8%, from the nine months ended September 30, 2021, primarily as a result of the expense drivers discussed above.

    Income Taxes

    • Income tax expense was $11.0 million, representing a 18.9% effective tax rate, and $10.0 million, representing a 18.8% effective tax rate, for the nine months ended September 30, 2022 and 2021, respectively.

    Asset Quality

    • Total nonperforming assets were $21.8 million, or 0.41% of total assets, as of September 30, 2022, compared to $20.3 million, or 0.38% of total assets, as of December 31, 2021, and $22.1 million, or 0.42% of total assets as of September 30, 2021.
    • The allowance for credit losses measured as a percentage of total loans was 1.03% as of September 30, 2022, compared to 1.03% as of December 31, 2021 and 1.06% as of September 30, 2021. In addition, the allowance for credit losses as a percentage of nonaccrual loans was 211.5% as of September 30, 2022, compared to 193.6% as of December 31, 2021 and 186.1% as of September 30, 2021.
    • Provision for credit losses was $1.1 million and $5.6 million for the three and nine months ended September 30, 2022, respectively, compared to $1.1 million and $5.2 million for the three and nine months ended September 30, 2021, respectively. Included in the provision for credit losses for the three and nine months ended September 30, 2022 were $55 thousand and $641 thousand, respectively, related to the allowance for unfunded commitments compared to no accrual towards the allowance for unfunded commitments for the three and nine months ended September 30, 2021.
    • For the three months ended September 30, 2022, net loan charge-offs were $310 thousand, or 0.03% (annualized) of average total loans including loans held for sale, compared to $778 thousand, or 0.09% (annualized), during the three months ended September 30, 2021.
    • For the nine months ended September 30, 2022, net loan charge-offs were $1.3 million, or 0.05% (annualized) of average total loans including loans held for sale, compared to $2.3 million, or 0.09% (annualized), during the nine months ended September 30, 2021.

    Capital

    • As of September 30, 2022, the Corporation’s total shareholders’ equity was $516.1 million, representing an increase of $73.3 million, or 16.5%, from December 31, 2021, primarily due to the $94.1 million increase in additional paid in capital as a result of the Corporation's common stock offering and the increase from the Corporation's quarterly earnings, partially offset by a decrease in both common dividends paid during the quarter, and accumulated other comprehensive income, resulting primarily from the temporary unrealized reduction in the value of the available-for-sale investment portfolio during the nine months ended September 30, 2022.
    • Regulatory capital ratios for the Corporation continue to exceed regulatory “well-capitalized” levels as of September 30, 2022.
    • As of September 30, 2022, the Corporation’s ratio of tangible common equity to tangible assets, a non-GAAP measure, was 7.85% compared to 6.45% at December 31, 2021. This increase was the result of the above-noted impacts of the Corporation's common stock offering, increase in retained earnings and decrease in accumulated other comprehensive income during the nine months ended September 30, 2022.1

    About CNB Financial Corporation

    CNB Financial Corporation is a financial holding company with consolidated assets of approximately $5.3 billion. CNB Financial Corporation conducts business primarily through its principal subsidiary, CNB Bank. CNB Bank is a full-service bank engaging in a full range of banking activities and services, including trust and wealth management services, for individual, business, governmental, and institutional customers. CNB Bank operations include a private banking division, three loan production offices, one drive-up office and 46 full-service offices in Pennsylvania, Ohio, New York and Virginia. CNB Bank’s divisions include ERIEBANK, based in Erie, Pennsylvania, with offices in Northwest Pennsylvania and Northeast Ohio; FCBank, based in Worthington, Ohio, with offices in Central Ohio; BankOnBuffalo, based in Buffalo, New York, with offices in Western New York; and Ridge View Bank, with loan production offices in the Southwest Virginia region. CNB Bank is headquartered in Clearfield, Pennsylvania, with offices in Central and North Central Pennsylvania. Additional information about CNB Financial Corporation may be found at www.CNBBank.bank.

    Forward-Looking Statements

    This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to CNB’s financial condition, liquidity, results of operations, future performance and business. These forward-looking statements are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that are not historical facts. Forward-looking statements include statements with respect to beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors (some of which are beyond CNB’s control). Forward-looking statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would” and “could.” CNB’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Such known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to, (i) adverse changes or conditions in capital and financial markets; (ii) changes in interest rates; (iii) the duration and scope of the COVID-19 pandemic and the local, national and global impact of COVID-19; (iv) actions governments, businesses and individuals take in response to the pandemic; (v) the speed and effectiveness of vaccine and treatment developments and deployment; (vi) variations of COVID-19, such as the Delta and Omicron variants, and the response thereto, (vii) the pace of recovery when the COVID-19 pandemic subsides; (vii) changes in general business, industry or economic conditions or competition; (ix) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (x) higher than expected costs or other difficulties related to integration of combined or merged businesses; (xi) the effects of business combinations and other acquisition transactions, including the inability to realize our loan and investment portfolios; (xii) changes in the quality or composition of our loan and investment portfolios; (xiii) adequacy of loan loss reserves; (xiv) increased competition; (xv) loss of certain key officers; (xvi) deposit attrition; (xvii) rapidly changing technology; (xviii) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xix) changes in the cost of funds, demand for loan products or demand for financial services; and (xx) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices. Such developments could have an adverse impact on CNB's financial position and results of operations. For more information about factors that could cause actual results to differ from those discussed in the forward-looking statements, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of and the forward-looking statement disclaimers in CNB’s annual and quarterly reports filed with the Securities and Exchange Commission.

    The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this press release. CNB undertakes no obligation to publicly update or revise any forward-looking statements included in this press release or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise, except to the extent required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur and you should not put undue reliance on any forward-looking statements.

    Financial Tables

    The following tables supplement the financial highlights described previously for CNB. All dollars are stated in thousands, except share and per share data.

     (unaudited) (unaudited)
     Three Months Ended Nine Months Ended
     September 30, September 30,
       %   %
      2022  2021 change  2022  2021 change
    Income Statement       
    Interest and fees on loans$50,552 $39,573 27.7% $136,368 $116,876 16.7%
    Processing fees on PPP loans 74  2,447 (97.0)%  1,870  6,817 (72.6)%
    Interest and dividends on securities and cash and cash equivalents 4,672  3,428 36.3%  13,055  9,578 36.3%
    Interest expense (5,390) (5,153)4.6%  (12,467) (15,550)(19.8)%
    Net interest income 49,908  40,295 23.9%  138,826  117,721 17.9%
    Provision for credit losses 1,091  1,100 (0.8)%  5,639  5,189 8.7%
    Net interest income after provision for credit losses 48,817  39,195 24.5%  133,187  112,532 18.4%
            
    Non-interest income       
    Service charges on deposit accounts 1,872  1,595 17.4%  5,400  4,389 23.0%
    Other service charges and fees 814  614 32.6%  2,253  1,705 32.1%
    Wealth and asset management fees 1,870  1,734 7.8%  5,456  5,021 8.7%
    Net realized gains on available-for-sale securities 0  0 NA   651  0 NA 
    Net realized and unrealized gains (losses) on equity securities (398) 7 (5,785.7)%  (1,433) 477 (400.4)%
    Mortgage banking 298  844 (64.7)%  1,065  2,615 (59.3)%
    Bank owned life insurance 694  558 24.4%  2,778  2,002 38.8%
    Card processing and interchange income 1,975  1,958 0.9%  5,776  5,871 (1.6)%
    Other non-interest income 834  1104 (24.5)%  3,813  2,430 56.9%
    Total non-interest income 7,959  8,414 (5.4)%  25,759  24,510 5.1%
    Non-interest expenses       
    Salaries and benefits 18,901  15,351 23.1%  52,660  43,442 21.2%
    Net occupancy expense of premises 3,375  2,950 14.4%  9,940  9,154 8.6%
    Technology expense 4,552  2,894 57.3%  11,948  8,452 41.4%
    State and local taxes 1,036  1,050 (1.3)%  3,121  3,096 0.8%
    Legal, professional, and examination fees 1,019  735 38.6%  3,032  2,785 8.9%
    FDIC insurance premiums 709  647 9.6%  2,142  1,820 17.7%
    Core Deposit Intangible amortization 23  26         (11.5)%  73  82 (11.0)%
    Card processing and interchange expenses 1,201  728 65.0%  3,486  2,816 23.8%
    Other non-interest expense 5,284  4,818 9.7%  14,199  12,321 15.2%
    Total non-interest expenses 36,100  29,199 23.6%  100,601  83,968 19.8%
            
    Income before income taxes 20,676  18,410 12.3%  58,345  53,074 9.9%
    Income tax expense 4,051  3,503 15.6%  11,037  9,996 10.4%
    Net income 16,625  14,907 11.5%  47,308  43,078 9.8%
    Preferred stock dividends 1,076  1,076 NA   3,226  3,226 NA 
    Net income available to common stockholders$15,549 $13,831 12.4% $44,082 $39,852 10.6%
            
    Average diluted common shares outstanding 17,287,770  16,832,932    16,983,958  16,818,945  
            
    Diluted earnings per common share$0.90 $0.82 9.8% $2.59 $2.36 9.7%
    Cash dividends per common share$0.175 $0.170 2.9% $0.525 $0.510 2.9%
            
    Dividend payout ratio 19% 21%   20% 22% 
                    
                    
     (unaudited)  (unaudited) 
     Three Months Ended  Nine Months Ended 
     September 30,  September 30, 
      2022  2021    2022  2021  
    Average Balances       
    Total loans and loans held for sale$3,956,041 $3,478,560   $3,821,516 $3,433,963  
    Investment securities 821,311  704,323    821,933  654,348  
    Total earning assets 4,909,666  4,889,774    4,952,999  4,712,741  
    Total assets 5,241,472  5,187,023    5,274,953  4,996,944  
    Noninterest-bearing deposits 880,990  744,563    841,661  703,777  
    Interest-bearing deposits 3,744,413  3,789,849    3,824,480  3,698,917  
    Shareholders' equity 440,659  437,822    436,201  427,919  
    Tangible common shareholders' equity (1) 338,723  335,786    334,241  325,856  
            
    Average Yields       
    Total loans and loans held for sale 5.10% 4.82%   4.86% 4.84% 
    Investment securities 1.86% 1.83%   1.84% 1.87% 
    Total earning assets 4.45% 3.72%   4.08% 3.81% 
    Interest-bearing deposits 0.47% 0.36%   0.34% 0.43% 
    Interest-bearing liabilities 0.56% 0.52%   0.42% 0.55% 
            
    Performance Ratios (annualized)       
    Return on average assets 1.26% 1.14%   1.20% 1.15% 
    Return on average equity 14.97% 13.51%   14.50% 13.46% 
    Return on average tangible common equity (1) 18.21% 16.34%   17.63% 16.35% 
    Net interest margin, fully tax equivalent basis (1) 4.02% 3.30%   3.75% 3.37% 
    Efficiency Ratio (1) 61.95% 59.47%   60.68% 58.53% 
            
    Net Loan Charge-Offs       
    CNB Bank net loan charge-offs$(62)$539   $257 $1,621  
    Holiday Financial net loan charge-offs 372  239    1,060  678  
    Total Corporation net loan charge-offs$310 $778   $1,317 $2,299  
            
    Annualized net loan charge-offs / average total loans and loans held for sale 0.03% 0.09%   0.05% 0.09% 
                    


     (unaudited) (unaudited) % change% change
     September 30,December 31,September 30, versusversus
      2022  2021  2021  12/31/2109/30/21
    Ending Balance Sheet      
    PPP loans, net of deferred processing fees$462 $45,203 $85,354  (99.0)%        (99.5)%
    Syndicated loans 152,783  125,761  96,623  21.5%58.1%
    Loans 3,871,420  3,463,828  3,329,148  11.8%16.3%
    Total Loans 4,024,665  3,634,792  3,511,125  10.7%14.6%
    Loans held for sale 624  849  3,415  (26.5)%(81.7)%
    Investment securities - available for sale & equities 387,471  707,557  742,734  (45.2)%(47.8)%
    Investment securities - held to maturity 408,209  0  0  NA NA 
    FHLB and other restricted stock holdings 3,128  2,966  3,126  5.5%0.1%
    Other earning assets 158,618  689,758  687,153  (77.0)%(76.9)%
    Total earning assets 4,982,715  5,035,922  4,947,553  (1.1)%0.7%
    Allowance for credit losses (41,269) (37,588) (37,230) 9.8%10.8%
    Goodwill 43,749  43,749  43,749  0.0%0.0%
    Core deposit intangible 386  460  485  (16.1)%(20.4)%
    Other assets 331,765  286,396  291,729  15.8%13.7%
    Total assets$5,317,346 $5,328,939 $5,246,286  (0.2)%1.4%
           
    Noninterest-bearing demand deposits$867,662 $792,086 $774,851  9.5%12.0%
    Interest-bearing demand deposits 1,055,367  1,079,336  1,031,488  (2.2)%2.3%
    Savings 2,376,694  2,457,745  2,350,266  (3.3)%1.1%
    Certificates of deposit 324,088  386,452  437,023  (16.1)%(25.8)%
    Total deposits 4,623,811  4,715,619  4,593,628  (1.9)%0.7%
    Subordinated debentures 20,620  20,620  20,620  0.0%0.0%
    Subordinated notes, net of issuance costs 83,888  83,661  133,592  0.3%(37.2)%
    Other liabilities 72,899  66,192  60,757  10.1%20.0%
    Total liabilities 4,801,218  4,886,092  4,808,597  (1.7)%(0.2)%
    Common stock 0  0  0  NA NA 
    Preferred stock 57,785  57,785  57,785  NA NA 
    Additional paid in capital 221,326  127,351  127,124  73.8%74.1%
    Retained earnings 295,803  260,582  249,978  13.5%18.3%
    Treasury stock (2,975) (2,477) (1,535) 20.1%93.8%
    Accumulated other comprehensive income (loss) (55,811) (394) 4,337  14,065.2%(1,386.9)%
    Total shareholders' equity 516,128  442,847  437,689  16.5%17.9%
           
    Total liabilities and shareholders' equity$5,317,346 $5,328,939 $5,246,286  (0.2)%1.4%
           
    Ending shares outstanding 21,120,584  16,855,062  16,889,694    
           
    Book value per common share$21.70 $22.85 $22.49  (5.0)%(3.5)%
    Tangible book value per common share (1)$19.61 $20.22 $19.87  (3.0)%(1.3)%
           
    Capital Ratios      
    Tangible common equity / tangible assets (1) 7.85% 6.45% 6.45%   
    Tier 1 leverage ratio (3) 10.67% 8.22% 8.11%   
    Common equity tier 1 ratio (3) 11.70% 9.65% 9.80%   
    Tier 1 risk-based ratio (3) 13.60% 11.79% 12.05%   
    Total risk-based ratio (3) 16.53% 14.92% 16.76%   
           
           
           
     (unaudited) (unaudited)   
     September 30,December 31,September 30,   
      2022  2021  2021    
    Asset Quality      
    Nonaccrual loans(2)$19,508 $19,420 $20,004    
    Loans 90+ days past due and accruing 1,051  168  724    
    Total nonperforming loans 20,559  19,588  20,728    
    Other real estate owned 1,206  707  1,359    
    Total nonperforming assets$21,765 $20,295 $22,087    
           
    Loans modified in a troubled debt restructuring ("TDR"):      
    Performing TDR loans$6,866 $9,006 $9,034    
    Nonperforming TDR loans (2) 6,609  7,600  6,268    
    Total TDR loans$13,475 $16,606 $15,302    
           
    Nonperforming assets / Total loans + OREO 0.54% 0.56% 0.63%   
    Nonperforming assets / Total assets 0.41% 0.38% 0.42%   
    Ratio of allowance for credit losses on loans to nonaccrual loans 211.55% 193.55% 186.11%   
    Allowance for credit losses / Total loans 1.03% 1.03% 1.06%   
    Allowance for credit losses / Total loans, net of PPP-related loans (1) 1.03% 1.05% 1.09%   
           
           
    (1) Management uses non-GAAP financial information in its analysis of the Corporation’s performance. Management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. The Corporation’s management believes that investors may use these non-GAAP measures to analyze the Corporation’s financial performance without the impact of unusual items or events that may obscure trends in the Corporation’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that different companies might calculate these measures differently. A reconciliation of these non-GAAP financial measures is provided below (dollars in thousands, except per share data).
    (2) Nonperforming TDR loans are also included in the balance of nonaccrual loans in the previous table.
    (3) Capital ratios as of September 30, 2022 are estimated pending final regulatory filings.


    Non-GAAP Reconciliations (1):
     (unaudited) (unaudited)
     September 30,December 31,September 30,
      2022  2021  2021 
    Calculation of tangible book value per share and tangible common equity/tangible assets:   
    Shareholders' equity$516,128 $442,847 $437,689 
    Less: preferred equity 57,785  57,785  57,785 
    Less: goodwill 43,749  43,749  43,749 
    Less: core deposit intangible 386  460  485 
    Tangible common equity$414,208 $340,853 $335,670 
        
    Total assets$5,317,346 $5,328,939 $5,246,286 
    Less: goodwill 43,749  43,749  43,749 
    Less: core deposit intangible 386  460  485 
    Tangible assets$5,273,211 $5,284,730 $5,202,052 
        
    Ending shares outstanding 21,120,584  16,855,062  16,889,694 
        
    Tangible book value per common share$19.61 $20.22 $19.87 
    Tangible common equity/Tangible assets 7.85% 6.45% 6.45%


    Non-GAAP Reconciliations (1):
     (unaudited) (unaudited)
     September 30,December 31,September 30,
      2022  2021  2021 
    Calculation of allowance / total loans, net of PPP-related loans:   
    Total allowance for credit losses$41,269 $37,588 $37,230 
        
    Total loans$4,024,665 $3,634,792 $3,511,125 
    Less: PPP-related loans 462  45,203  85,354 
    Adjusted total loans, net of PPP-related loans (non-GAAP)$4,024,203 $3,589,589 $3,425,771 
        
    Adjusted allowance / total loans, net of PPP-related loans (non-GAAP) 1.03% 1.05% 1.09%


    Non-GAAP Reconciliations (1):
      (unaudited) (unaudited)
      Three Months Ended Nine Months Ended
      September 30, September 30,
       2022  2021   2022  2021 
    Calculation of net interest margin:      
    Interest income $55,298 $45,448  $151,293 $133,271 
    Interest expense  5,390  5,153   12,467  15,550 
    Net interest income $49,908 $40,295  $138,826 $117,721 
           
    Average total earning assets $4,909,666 $4,889,774  $4,952,999 $4,712,741 
           
    Net interest margin, fully tax equivalent basis (non-GAAP) (annualized)  4.03% 3.27%  3.75% 3.34%
           
    Calculation of net interest margin (fully tax equivalent basis):      
    Interest income (fully tax equivalent basis) (non-GAAP) $55,298 $45,448  $151,293 $133,271 
    Tax equivalent adjustment (non-GAAP)  305  297   954  692 
    Adjusted interest income (fully tax equivalent basis) (non-GAAP)  55,603  45,745   152,247  133,963 
    Interest expense  5,390  5,153   12,467  15,550 
    Net interest income (fully tax equivalent basis) (non-GAAP) $50,213 $40,592  $139,780 $118,413 
           
    Average total earning assets $4,909,666 $4,889,774  $4,952,999 $4,712,741 
    Less: average mark to market adjustment on investments  (45,559) 10,029   (31,330) 10,879 
    Adjusted average total earning assets, net of mark to market (non-GAAP) $4,955,225 $4,879,745  $4,984,329 $4,701,862 
           
    Net interest margin, fully tax equivalent basis (non-GAAP) (annualized)  4.02% 3.30%  3.75% 3.37%


    Non-GAAP Reconciliations (1):
      (unaudited) (unaudited)
      Three Months Ended Nine Months Ended
      September 30, September 30,
       2022  2021   2022  2021 
    Calculation of efficiency ratio:      
    Non-interest expense $36,100 $29,199  $100,601 $83,968 
    Less: core deposit intangible amortization  23  26   73  82 
    Adjusted non-interest expense (non-GAAP) $36,077 $29,173  $100,528 $83,886 
           
    Non-interest income $7,959 $8,414  $25,759 $24,510 
           
    Net interest income $49,908 $40,295  $138,826 $117,721 
    Less: tax exempt investment and loan income, net of TEFRA (non-GAAP)  1,232  1,185   3,767  3,710 
    Add: tax exempt investment and loan income (non-GAAP) (tax-equivalent)  1,599  1,532   4,851  4,796 
    Adjusted net interest income (non-GAAP)  50,275  40,642   139,910  118,807 
    Adjusted net revenue (non-GAAP) (tax-equivalent) $58,234 $49,056  $165,669 $143,317 
    Efficiency ratio  61.95% 59.47%  60.68% 58.53%


    Non-GAAP Reconciliations (1):
      (unaudited) (unaudited)
      Three Months Ended Nine Months Ended
      September 30, September 30,
       2022 2021  2022 2021
    Calculation of PPNR: (4)      
    Net interest income $49,908$40,295 $138,826$117,721
    Add: Non-interest income  7,959 8,414  25,759 24,510
    Less: Non-interest expense  36,100 29,199  100,601 83,968
    PPNR (non-GAAP) $21,767$19,510 $63,984$58,263
           
    (4) Management believes that this is an important metric as it illustrates the underlying performance of the Corporation, it enables investors and others to assess the Corporation's ability to generate capital to cover credit losses through the credit cycle and provides consistent reporting with a key metric used by bank regulatory agencies.


    Non-GAAP Reconciliations (1):
      (unaudited) (unaudited)
      Three Months Ended Nine Months Ended
      September 30, September 30,
       2022  2021   2022  2021 
    Calculation of return on average tangible common equity:      
    Net income available to common stockholders $15,549 $13,831  $44,082 $39,852 
    Average tangible common shareholders' equity  338,723  335,786   334,241  325,856 
    Return on average tangible common equity (non-GAAP) (annualized)  18.21% 16.34%  17.63% 16.35%


    Non-GAAP Reconciliations (1):
      (unaudited) (unaudited)
      Three Months Ended Nine Months Ended
      September 30, September 30,
       2022 2021  2022 2021
    Calculation of non-interest income excluding net realized gains on available-for-sale securities:      
    Non-interest income $7,959$8,414 $25,759$24,510
    Less: net realized gains on available-for-sale securities  0 0  651 0
    Adjusted non-interest income $7,959$8,414 $25,108$24,510

    Contact: 
Tito L. Lima
Treasurer 
(814) 765-9621

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