EX-99.1 2 ccne1-24x2299x1xnextgen.htm EX-99.1 Document

News Release
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Contact: Tito L. Lima
Treasurer
(814) 765-9621
FOR IMMEDIATE RELEASE

CNB FINANCIAL CORPORATION REPORTS RECORD EARNINGS PER SHARE OF $3.16 FOR THE FULL-YEAR 2021

Clearfield, Pennsylvania – January 24, 2022

CNB Financial Corporation (“CNB” or the “Corporation”) (NASDAQ: CCNE), the parent company of CNB Bank, today announced its earnings for the quarter and year ended December 31, 2021.

Joseph B. Bower, Jr., President and CEO, stated, “We are pleased to report record earnings to our shareholders coupled with a growing and well-positioned loan portfolio that is poised to benefit with the expected rate increases in 2022. Even excluding PPP fees, 2021 earnings were at a record level for CNB. CNB’s loan pipelines are very promising for positive growth over the next 12 months. The communities we serve have fared well through the pandemic and are reflecting continued growth opportunities. CNB is excited to be a part of their growth with high expectations heading into 2022.”

Executive Summary

•Earnings per diluted share of $3.16 for the twelve months ended December 31, 2021, as compared to $1.97 per diluted share for the twelve months ended December 31, 2020, represented a record level for the Corporation. Earnings for 2021 benefited from growth in commercial loans, coupled with strong levels of fee income and continued stable credit quality, in addition to a higher level of PPP-related fees recognized in 2021. Included in earnings per diluted share for the year ended December 31, 2020 was approximately $0.63 per diluted share in after-tax merger costs, FHLB prepayment penalties and branch closure costs, while no such costs were incurred for the year ended December 31, 2021.

•Earnings per diluted share of $0.80 for the fourth quarter of 2021 represented a 100.0% increase from the fourth quarter of 2020 earnings per diluted share of $0.40. Included in earnings per diluted share for the quarter ended December 31, 2020 was $0.35 per diluted share in after-tax merger costs and Federal Home Loan Bank (“FHLB”) prepayment penalties.

•At December 31, 2021, excluding the impact of Paycheck Protection Program ("PPP") loans, net of PPP deferred processing fees (such loans, the "PPP-related loans"), the Corporation's loan portfolio totaled $3.6 billion, representing an increase of $373.3 million, or 11.6%, from December 31, 2020. The growth was primarily driven by the Corporation's ongoing expansion in the Cleveland and Ridge View regions, combined with continued strong growth in its Private Banking division, and increased lending opportunities in other regions of the Corporation.

◦Included in the loan growth discussed above, and as part of the liquidity management strategies first implemented by the Corporation in 2020, the year ended December 31, 2021 reflected an increase in syndicated lending activities of $103.7 million from December 31, 2020. The syndicated loan portfolio totaled $125.8 million, or 3.5% of total loans, excluding PPP-related loans, at December 31, 2021.

•At December 31, 2021, total deposits were $4.7 billion, reflecting an increase of $533.9 million, or 12.8%, from December 31, 2020, primarily resulting from the Corporation's customer acquisition strategies across all of the Corporation's regions and its Private Banking division, as well as the impact of government stimulus initiatives. The number of households across all regions increased 3.3% from December 31, 2020.

•Total non-performing assets decreased to $20.3 million, or 0.38%, of total assets, as of December 31, 2021 compared to $31.5 million, or 0.67% of total assets, as of December 31, 2020. In addition, for the twelve months ended December 31, 2021 net loan charge-offs were $2.8 million or 0.08% of total average loans, compared to $6.4 million, or 0.21% of total average loans, during the twelve months ended December 31, 2020. For the three months ended December 31, 2021, net loan charge-offs were $456 thousand, or 0.05% of total average loans, compared to $1.8 million, or 0.21%, of total average loans, during the comparable period in 2020.



•On October 18, 2021, the Corporation announced that it had completed the redemption of $50 million aggregate principal amount of its 5.75% Fixed-to-Floating Rate Subordinated Notes due October 15, 2026 (the “2026 Notes”), representing all outstanding 2026 Notes. The 2026 Notes were redeemed pursuant to their terms at a price equal to 100% of the principal amount, plus accrued and unpaid interest up to, but excluding, October 15, 2021. The Corporation financed the redemption of the 2026 Notes with cash on hand, including net proceeds from the issuance and sale of $85.0 million aggregate principal amount of the Corporation’s 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 completed in June 2021.

Earnings Performance Highlights

•Net income was $57.7 million, or $3.16 per diluted common share, for the year ended December 31, 2021, compared to $32.7 million, or $1.97 per diluted share, for the year ended December 31, 2020, reflecting increases of $25.0 million, or 76.2%, and $1.19 per diluted share, or 60.4%. Included in net income for the year ended December 31, 2020 was the after-tax impact of $10.2 million, or $0.63 per diluted share, in merger costs, FHLB prepayment penalties and branch closure costs.

•Net income was $14.6 million, or $0.80 per diluted common share, for the quarter ended December 31, 2021, compared to $7.9 million, or $0.40 per diluted share, for the same period in 2020, reflecting increases of $6.7 million, or 85.2%, and $0.40 per diluted share, or 100.0%. Included in net income for the quarter ended December 31, 2020 was the after-tax impact of $5.9 million, or $0.35 per diluted share, in merger costs and FHLB prepayment penalties.

•Pre-provision net revenue ("PPNR") was $76.8 million for the year ended December 31, 2021, compared to $55.4 million for the year ended December 31, 2020, reflecting an increase of $21.3 million, or 38.5%.1 Included in PPNR for the year ended December 31, 2020 was $12.6 million in merger costs, prepayment penalties and branch closure costs.

1 This release contains references to financial measures that are not defined under GAAP ("Generally Accepted Accounting Principles"). 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.

Balance Sheet and Liquidity Highlights

•At December 31, 2021, the Corporation’s cash position was approximately $732.2 million, including excess liquidity of $684.3 million held at the Federal Reserve, reflecting, in management's view, a strong liquidity level to support both existing operations and future loan and investment portfolio growth. In addition to its cash position, the Corporation’s borrowing capacity with the FHLB at December 31, 2021 was approximately $932.7 million.

•Book value per common share was $22.85 at December 31, 2021, representing an increase of 7.3% from $21.29 at December 31, 2020. Tangible book value per common share was $20.22 as of December 31, 2021, reflecting an increase of 8.4% from a tangible book value per common share of $18.66 as of December 31, 2020.1 The increases in book value per common share and tangible book value per common share were primarily due to increases in retained earnings of $41.9 million, net of dividends, partially offset by an $15.5 million decrease in accumulated other comprehensive income primarily from unrealized valuation changes in the available-for-sale investment portfolio.

Customer Support Strategies and Loan Portfolio Profile

•As of December 31, 2021, the Corporation had outstanding $47.1 million in PPP loans at a rate of 1.00%, representing 446 PPP loan relationships, and deferred PPP processing fees of approximately $1.9 million. For the three and twelve months ended December 31, 2021, the Corporation recognized $1.9 million and $8.7 million in deferred PPP processing fees ("PPP-related fees"), respectively. The outstanding balance of PPP loans at December 31, 2021 included loans from the two different origination years: (i) $199 thousand, or 7 loans from the Corporation's participation in the PPP in 2020, and (ii) $46.9 million, or 439 loans, from the Corporation’s participation in the PPP in 2021.

•In accordance with the CARES Act, the Corporation also deferred loan payments for its commercial and consumer customers, as determined on a case-by-case basis by the financial needs of each customer. As of December 31, 2021, there were five loans with deferred loan payment arrangements totaling $397 thousand.

Performance Ratios

•Return on average equity was 13.39% for the year ended December 31, 2021, compared to 9.14% for the year ended December 31, 2020. Return on average tangible common equity was 16.23% and 10.67% for the same periods in 2021 and 2020, respectively.1 Excluding after-tax merger costs, FHLB prepayment penalties and branch closure costs, adjusted return on average equity and average tangible common equity were 11.98% and 14.10% for the year ended December 31, 2020, respectively.1



•Annualized return on average equity was 13.17% for the three months ended December 31, 2021, compared to 7.52% for the three months ended December 31, 2020. Annualized return on average tangible common equity was 15.87% and 8.53% for the same periods in 2021 and 2020, respectively.1 Excluding after-tax merger costs and FHLB prepayment penalties, annualized adjusted return on average equity and average tangible common equity were 13.10% and 15.94% for the three months ended December 31, 2020, respectively.1

•Efficiency ratio was 59.76% for the year ended December 31, 2021, compared to 65.10% for the year ended December 31, 2020.1 The efficiency ratio for the year ended December 31, 2020 included $12.6 million in merger costs, FHLB prepayment penalties and branch closure costs.

•Efficiency ratio was 63.19% for the three months ended December 31, 2021, compared to 72.16% for the comparable period in 2020.1 Included in the efficiency ratio for the three months ended December 31, 2020 was $7.4 million in merger costs and FHLB prepayment penalties.

Revenue

•Total revenue (comprised of net interest income plus non-interest income) was $193.2 million for the year ended December 31, 2021, an increase of $30.4 million, or 18.7%, from the year ended December 31, 2020, primarily due to the following:

◦Net interest income of $159.8 million for the year ended December 31, 2021, increased $25.1 million, or 18.6%, from the year ended December 31, 2020, primarily as a result of loan growth, various deposit pricing and liquidity strategies. Included in net interest income were PPP-related fees, which totaled approximately $8.7 million for the year ended December 31, 2021, compared to $5.1 million for the year ended December 31, 2020.

◦Net interest margin on a fully tax-equivalent basis was 3.38% and 3.34% for the year ended December 31, 2021 and 2020, respectively.1

▪The yield on earning assets of 3.79% for the year ended December 31, 2021 decreased 35 basis points from 4.14% for the year ended December 31, 2020, primarily as a result of the lower interest rate environment and higher level of excess cash at the Federal Reserve, partially offset by higher PPP-related fees. The cost of interest-bearing liabilities decreased 43 basis points from 0.95% for the year ended December 31, 2020 to 0.52% for the year ended December 31, 2021, primarily as a result of the Corporation’s targeted deposit rate reductions and the prepayment of the Corporation's remaining FHLB borrowings, which were approximately $160 million at a weighted average interest rate of 2.24%, in the fourth quarter of 2020.

•Total revenue (comprised of net interest income plus non-interest income) was $51.0 million for the three months ended December 31, 2021, an increase of $2.9 million, or 6.0%, from the three months ended December 31, 2020, primarily due to the following:

◦Net interest income of $42.1 million for the three months ended December 31, 2021, reflecting an increase of $1.9 million, or 4.8%, from the three months ended December 31, 2020, primarily as a result of loan growth and various deposit pricing and liquidity strategies, partially offset by a decrease in PPP-related fees, which were approximately $1.9 million for the three months ended December 31, 2021, compared to $4.5 million for the three months ended December 31, 2020.

◦Net interest margin on a fully tax-equivalent basis was 3.41% and 3.58% for the three months ended December 31, 2021 and 2020, respectively.1

◦The yield on earning assets of 3.75% for the three months ended December 31, 2021 decreased 41 basis points from 4.16% for the three months ended December 31, 2020, primarily as a result of the lower interest rate environment, a higher level of excess cash at the Federal Reserve, and lower PPP-related fees. The cost of interest-bearing liabilities decreased 28 basis points from 0.71% for the three months ended December 31, 2020 to 0.43% for the three months ended December 31, 2021, primarily as a result of the Corporation’s targeted deposit rate reductions and the prepayment of the Corporation's remaining FHLB borrowings in the fourth quarter of 2020.



•Total non-interest income was $33.4 million for the year ended December 31, 2021 compared to $28.1 million from the same period in 2020, reflecting an increase of $5.4 million, or 19.2%. Included in non-interest income for the year ended December 31, 2021 and 2020 were $783 thousand and $2.2 million, respectively, in net realized gains on available for sale securities. Excluding the impact of the realized gains on available for sale securities for the year ended December 31, 2021 and 2020, total non-interest income for the year ended December 31, 2021, increased $6.8 million, or 26.2%, from the same period in 2020.1 The increase was partially driven by growth in Wealth and Asset Management fees, as assets under management increased by $135.2 million, or 11.9%, from December 31, 2020, to $1.3 billion as of December 31, 2021. Other significant factors that contributed to the increase included income from investments in small business investment company ("SBIC") funds, card processing and interchange income and service charges on deposits from increased business activity as well as an increase in bank owned life insurance income.

•Total non-interest income was $8.9 million for the three months ended December 31, 2021, representing an increase of $956 thousand, or 12.0%, from the same period in 2020. Included in non-interest income for the three months ended December 31, 2021 was $783 thousand in net realized gains on available for sale securities. Excluding the impact of the realized gains on available for sale securities for the three months ended December 31, 2021, total non-interest income for the three months ended December 31, 2021, increased $173 thousand, or 2.2%, from the same period in 2020.1 During the three months ended December 31, 2021, Wealth and Asset Management fees increased $303 thousand, or 21.4%, compared to the three months ended December 31, 2020. Other significant improvements during the three months ended September 30, 2021 included increased income from charges on deposits and card processing and interchange income, resulting from increased business activity, partially offset by decreased mortgage banking activity.

Non-Interest Expense

•For the year ended December 31, 2021, total non-interest expense was $116.4 million, reflecting an increase of $9.1 million, or 8.5%, from the year ended December 31, 2020. Included in non-interest expense for the year ended December 31, 2020 was $12.6 million in merger costs, prepayment penalties and branch closure costs. In addition, 2021 included expenses related to hiring additional personnel in the Corporation's growth regions of Cleveland, Buffalo and Ridge View (Roanoke) as well as investments in technology aimed at enhancing customer experience. Also, included in the fourth quarter of 2021 is approximately $2.3 million in additional personnel costs primarily from increased incentive compensation accruals and certain retirement benefit expenses.

•For the three months ended December 31, 2021, total non-interest expense was $32.5 million, reflecting a decrease of $2.6 million, or 7.3%, from the three months ended December 31, 2020. Included in non-interest expense for the three months ended December 31, 2020 is $7.4 million in merger costs and prepayment penalties. In addition, the fourth quarter of 2021 included expenses related to hiring additional personnel in the Corporation's growth regions of Cleveland, Buffalo and Ridge View and investments in technology aimed at enhancing customer experience.

Income Taxes

•Income tax expense was $13.1 million, representing a 18.5% effective tax rate, and $7.3 million, representing a 18.3% effective tax rate, for the year ended December 31, 2021 and 2020, respectively. Included in the 18.3% effective tax rate for the year ended December 30, 2020 were merger costs, FHLB prepayment penalties and branch closure costs, all of which reduced the effective tax rate.

Asset Quality

•Total non-performing assets were $20.3 million, or 0.38%, of total assets, as of December 31, 2021, reflecting a substantial decrease when compared to non-performing assets of $31.5 million, or 0.67%, as of December 31, 2020. The reduction in non-performing assets resulted primarily from the resolution of an $8.7 million commercial real estate loan relationship with no additional loss to the Corporation. In addition, the fourth quarter of 2021 included the resolution of a $1.4 million non-performing commercial real estate loan relationship with no loss to the Corporation.

•The allowance for credit losses measured as a percentage of loans was 1.03% as of December 31, 2021, compared to 1.02% as of December 2020. The allowance for credit losses measured as a percentage of loans, net of PPP-related loans, was 1.05% as of December 31, 2021 compared to 1.07% as of December 31, 2020.1

•For the year ended December 31, 2021, net loan charge-offs were $2.8 million, or 0.08% of total average loans, compared to $6.4 million, or 0.21%, of total average loans, during the year ended December 31, 2020. The year ended December 31, 2020 included (i) a charge-off of approximately $2.6 million related to a secured commercial and industrial loan relationship with a borrower who is deceased, and (ii) a separate $1 million charge-off related to the $8.7 million commercial real estate loan relationship discussed above.

•For the three months ended December 31, 2021, net loan charge-offs were $456 thousand, or 0.05% of total average loans, compared to $1.8 million, or 0.21%, of total average loans, during the comparable period in 2020.



Capital

•As of December 31, 2021, the Corporation’s total shareholders’ equity was $442.8 million, representing an increase of $26.7 million, or 6.4%, from December 31, 2020 primarily as a result of growth in organic earnings, partially offset by a decrease in accumulated other comprehensive income and payment of common and preferred stock dividends to the Corporation's common and preferred shareholders during the year ended December 31, 2021.

•Regulatory capital ratios for the Corporation exceeded regulatory “well-capitalized” levels at both December 31, 2021 and 2020, and continue to support the Corporation's growth strategy.

•As of December 31, 2021, the Corporation’s ratio of tangible equity to tangible assets and tangible common equity to tangible assets of 7.54% and 6.45%, respectively, reflected the impact of approximately $45.2 million in PPP-related loans as well as the Corporation's significant excess liquidity. Excluding PPP-related loans and excess liquidity of $684.3 million at December 31, 2021, the Corporation’s adjusted ratios of tangible equity to tangible assets and tangible common equity to tangible assets of 8.75% and 7.48%, respectively, represent a decrease from the December 31, 2020 adjusted ratios of 9.19% and 7.76%, respectively, primarily as a result of the decrease in accumulated other comprehensive income, partially offset by increases in retained earnings, net of dividends.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 45 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 Roanoke, 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) the duration, severity and scope of the COVID-19 pandemic and its impact on our customers and demand for financial services; (ii) actions governments, businesses and individuals take in response to the pandemic; (iii) the direct and indirect economic effects of the pandemic and containment measures; (iv) treatment developments, public adoption rates of COVID-19 vaccines, including booster shots, and their effectiveness against emerging variants of COVID-19, including the Delta and Omicron variants; (v) the pace of recovery when the COVID-19 pandemic subsides; (vi) changes in general business, industry or economic conditions or competition; (vii) 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; (viii) adverse changes or conditions in capital and financial markets; (ix) changes in interest rates; (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.

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)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
%%
20212020change20212020change
Income Statement
Interest income$46,329 $46,648 (0.7)%$179,600 $167,167 7.4 %
Interest expense4,270 6,533 (34.6)%19,820 32,456 (38.9)%
Net interest income42,059 40,115 4.8 %159,780 134,711 18.6 %
Provision for credit losses814 3,289 (75.3)%6,003 15,354 (60.9)%
Net interest income after provision for credit losses41,245 36,826 12.0 %153,777 119,357 28.8 %
Non-interest income
Service charges on deposit accounts1,806 1,443 25.2 %6,195 5,095 21.6 %
Other service charges and fees731 700 4.4 %2,436 2,548 (4.4)%
Wealth and asset management fees1,719 1,416 21.4 %6,740 5,497 22.6 %
Net realized gains on available-for-sale securities783 0 NA783 2,190 NA
Net realized and unrealized gains (losses) on trading securities313 408 (23.3)%790 328 140.9 %
Mortgage banking532 1,264 (57.9)%3,147 3,354 (6.2)%
Bank owned life insurance636 457 39.2 %2,638 1,747 51.0 %
Card processing and interchange income1,925 1,668 15.4 %7,796 5,727 36.1 %
Other479 612 (21.7)%2,909 1,573 84.9 %
Total non-interest income8,924 7,968 12.0 %33,434 28,059 19.2 %
Non-interest expenses
Salaries and benefits17,733 14,145 25.4 %61,175 48,723 25.6 %
Net occupancy expense of premises3,227 3,391 (4.8)%12,381 12,333 0.4 %
Technology expense3,271 2,436 34.3 %11,723 7,153 63.9 %
State and local taxes961 931 3.2 %4,057 3,340 21.5 %
Legal, professional, and examination fees732 1,063 (31.1)%3,517 2,990 17.6 %
FDIC insurance premiums689 448 53.8 %2,509 2,414 3.9 %
Core Deposit Intangible amortization25 28 (10.7)%107 206 (48.1)%
Card processing and interchange expenses1,020 943 8.2 %3,836 3,135 22.4 %
Merger costs, prepayment penalties and branch closure costs0 7,435 NA0 12,642 NA
Other4,807 4,197 14.5 %17,128 14,390 19.0 %
Total non-interest expenses32,465 35,017 (7.3)%116,433 107,326 8.5 %
Income before income taxes17,704 9,777 81.1 %70,778 40,090 76.5 %
Income tax expense3,075 1,878 63.7 %13,071 7,347 77.9 %
Net income14,629 7,899 85.2 %57,707 32,743 76.2 %
Preferred stock dividends1,076 1,147 NA4,302 1,147 NA
Net income available to common stockholders$13,553 $6,752 100.7 %$53,405 $31,596 69.0 %
Average diluted common shares outstanding16,823,060 16,792,676 16,820,054 16,000,749 
Diluted earnings per common share$0.80 $0.40 100.0 %$3.16 $1.97 60.4 %
Cash dividends per common share$0.175 $0.170 2.9 %$0.685 $0.680 0.7 %
Dividend payout ratio22 %43 %22 %35 %


(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Average Balances
Loans$3,560,753 $3,351,980 $3,465,919 $3,115,171 
Investment securities735,926 586,747 675,124 574,044 
Total earning assets4,931,292 4,508,257 4,768,040 4,092,076 
Total assets5,240,449 4,779,624 5,058,900 4,347,142 
Non interest-bearing deposits787,865 627,843 724,839 516,723 
Interest-bearing deposits3,835,434 3,469,102 3,733,327 3,123,823 
Shareholders' equity440,808 418,147 431,062 358,163 
Tangible shareholders' equity396,583 372,799 386,797 316,342 
Tangible common shareholders' equity (1)
338,798 315,039 329,012 296,142 
Average Yields
Loans4.80 %5.20 %4.83 %4.93 %
Investment securities1.77 %2.10 %1.83 %2.53 %
Total earning assets3.75 %4.16 %3.79 %4.14 %
Interest-bearing deposits0.34 %0.54 %0.40 %0.77 %
Interest-bearing liabilities0.43 %0.71 %0.52 %0.95 %
Performance Ratios (annualized)
Return on average assets1.11 %0.66 %1.14 %0.75 %
Return on average equity13.17 %7.52 %13.39 %9.14 %
Return on average equity, net of merger costs, prepayment penalties and branch closure costs (1)
13.17 %13.10 %13.39 %11.98 %
Return on average tangible equity14.63 %8.43 %14.92 %10.35 %
Return on average tangible equity, net of merger costs, prepayment penalties and branch closure costs (1)
14.63 %14.70 %14.92 %13.56 %
Return on average tangible common equity (1)
15.87 %8.53 %16.23 %10.67 %
Return on average tangible common equity, net of merger costs, prepayment penalties and branch closure costs (1)
15.87 %15.94 %16.23 %14.10 %
Net interest margin, fully tax equivalent basis (1)
3.41 %3.58 %3.38 %3.34 %
Efficiency Ratio (1)
63.19 %72.16 %59.76 %65.10 %
Efficiency Ratio, net of merger costs, prepayment penalties and branch closure costs (1)
63.19 %56.82 %59.76 %57.41 %
Net Loan Charge-Offs
CNB Bank net loan charge-offs$142 $1,571 $1,763 $5,131 
Holiday Financial net loan charge-offs314 208 992 1,299 
Total net loan charge-offs$456 $1,779 $2,755 $6,430 
Net loan charge-offs / average loans0.05 %0.21 %0.08 %0.21 %
    
















(unaudited)% change
December 31,December 31,versus
2021202012/31/20
Ending Balance Sheet
Loans, PPP, net of deferred fees$45,203 $155,529 (70.9)%
Loans, net of PPP-related loans3,589,589 3,216,260 11.6 %
   Total Loans3,634,792 3,371,789 7.8 %
Loans held for sale849 8,514 (90.0)%
Investment securities707,557 591,557 19.6 %
FHLB and other equity interests2,966 2,899 2.3 %
Other earning assets689,758 488,326 41.2 %
   Total earning assets5,035,922 4,463,085 12.8 %
Allowance for credit losses(37,588)(34,340)9.5 %
Goodwill43,749 43,749 0.0 %
Core deposit intangible460 567 (18.9)%
Other assets286,396 256,338 11.7 %
   Total assets$5,328,939 $4,729,399 12.7 %
Non-interest bearing demand deposits$792,086 $627,114 26.3 %
Interest bearing demand deposits1,079,336 951,903 13.4 %
Savings2,457,745 2,126,183 15.6 %
Certificates of Deposit386,452 476,544 (18.9)%
   Total deposits4,715,619 4,181,744 12.8 %
Subordinated debt, net of issuance costs104,281 70,620 47.7 %
Other liabilities66,192 60,898 8.7 %
Common stock0 0 NA
Preferred stock57,785 57,785 NA
Additional paid in capital127,351 127,518 (0.1)%
Retained earnings260,582 218,727 19.1 %
Treasury stock(2,477)(2,967)(16.5)%
Accumulated other comprehensive income (loss)(394)15,074 (102.6)%
   Total shareholders' equity442,847 416,137 6.4 %
   Total liabilities and shareholders' equity$5,328,939 $4,729,399 12.7 %
Ending shares outstanding16,855,062 16,833,008 
Book value per common share$22.85 $21.29 7.3 %
Tangible book value per common share (1)
$20.22 $18.66 8.4 %
Capital Ratios
Tangible common equity / tangible assets (1)
6.45 %6.70 %
Tangible common equity / tangible assets, net of PPP-related loans and excess liquidity at the Federal Reserve(1)
7.48 %7.76 %
Tangible equity / tangible assets (1)
7.54 %7.94 %
Tangible equity / tangible assets, net of PPP-related loans and excess liquidity at the Federal Reserve(1)
8.75 %9.19 %
Tier 1 leverage ratio (3)
8.22 %8.11 %
Common equity tier 1 ratio (3)
9.65 %9.50 %
Tier 1 risk based ratio (3)
11.79 %11.91 %
Total risk based ratio (3)
14.92 %14.32 %


Asset Quality
Non-accrual loans(2)
$19,420 $30,359 
Loans 90+ days past due and accruing168 325 
   Total non-performing loans19,588 30,684 
Other real estate owned707 862 
   Total non-performing assets$20,295 $31,546 
Loans modified in a troubled debt restructuring (TDR):
   Performing TDR loans$9,006 $10,457 
   Non-performing TDR loans (2)
7,600 4,631 
        Total TDR loans$16,606 $15,088 
Non-performing assets / Loans + OREO0.56 %0.94 %
Non-performing assets / Total assets0.38 %0.67 %
Allowance for credit losses / Loans1.03 %1.02 %
Allowance for credit losses / Loans, net of PPP-related loans (1)
1.05 %1.07 %
(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 non-accrual loans in the previous table.
(3) Capital ratios as of December 31, 2021 are estimated.


Non-GAAP Reconciliations (1):
(unaudited)
December 31,December 31,
20212020
Calculation of tangible book value per share and tangible common equity/tangible assets:
Shareholders' equity$442,847 $416,137 
Less: preferred equity57,785 57,785 
Less: goodwill43,749 43,749 
Less: core deposit intangible460 567 
Tangible common equity$340,853 $314,036 
Total assets$5,328,939 $4,729,399 
Less: goodwill43,749 43,749 
Less: core deposit intangible460 567 
Tangible assets$5,284,730 $4,685,083 
Ending shares outstanding16,855,062 16,833,008 
Tangible book value per common share$20.22 $18.66 
Tangible common equity/Tangible assets6.45 %6.70 %
Calculation of tangible equity/tangible assets:
Shareholders' equity$442,847 $416,137 
Less: goodwill43,749 43,749 
Less: core deposit intangible460 567 
Tangible equity$398,638 $371,821 
Tangible assets$5,284,730 $4,685,083 
Tangible equity/Tangible assets7.54 %7.94 %
Calculation of tangible common equity/tangible assets, net of PPP-related loans and excess liquidity at the Federal Reserve:
Tangible common equity$340,853 $314,036 
Tangible assets$5,284,730 $4,685,083 
Less: PPP-related loans45,203 155,529 
Less: Excess liquidity at the Federal Reserve684,306 482,503 
Adjusted tangible assets$4,555,221 $4,047,051 
Adjusted tangible common equity/tangible assets7.48 %7.76 %
Calculation of tangible equity/tangible assets, net of PPP-related loans and excess liquidity at the Federal Reserve:
Tangible equity$398,638 $371,821 
Adjusted tangible assets$4,555,221 $4,047,051 
Adjusted tangible equity/tangible assets8.75 %9.19 %



Non-GAAP Reconciliations (1):
(unaudited)
December 31,December 31,
20212020
Calculation of allowance / loans, net of PPP-related loans:
Total allowance for credit losses$37,588 $34,340 
Total loans$3,634,792 $3,371,789 
Less: PPP-related loans45,203 155,529 
Adjusted total loans, net of PPP-related loans (non-GAAP)$3,589,589 $3,216,260 
Adjusted allowance / loans, net of PPP-related loans (non-GAAP)1.05 %1.07 %

Non-GAAP Reconciliations (1):
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Calculation of net interest margin (fully tax equivalent basis):
Interest income (fully tax equivalent basis) (non-GAAP)$46,652 $46,977 $180,553 $168,528 
Interest expense (fully tax equivalent basis) (non-GAAP)4,270 6,533 19,820 32,456 
Net interest income (fully tax equivalent basis) (non-GAAP)$42,382 $40,444 $160,733 $136,072 
Average total earning assets$4,931,292 $4,508,257 $4,768,040 $4,092,076 
Less: average mark to market adjustment on investments13 19,765 8,141 18,884 
Adjusted average total earning assets, net of mark to market (non-GAAP)$4,931,279 $4,488,492 $4,759,899 $4,073,192 
Net interest margin, fully tax equivalent basis (non-GAAP) (annualized)3.41 %3.58 %3.38 %3.34 %



Non-GAAP Reconciliations (1):
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Calculation of efficiency ratio:
Non-interest expense$32,465 $35,017 $116,433 $107,326 
Less: core deposit intangible amortization25 28 107 206 
Adjusted non-interest expense (non-GAAP)$32,440 $34,989 $116,326 $107,120 
Non-interest income$8,924 $7,968 $33,434 $28,059 
Net interest income$42,059 $40,115 $159,780 $134,711 
Less: tax exempt investment and loan income, net of TEFRA (non-GAAP)1,263 1,352 4,973 5,703 
Add: tax exempt investment and loan income (non-GAAP) (tax-equivalent)1,620 1,759 6,416 7,490 
Adjusted net interest income (non-GAAP)42,416 40,522 161,223 136,498 
Adjusted net revenue (non-GAAP) (tax-equivalent)$51,340 $48,490 $194,657 $164,557 
Efficiency ratio63.19 %72.16 %59.76 %65.10 %

Non-GAAP Reconciliations (1):
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Calculation of adjusted efficiency ratio, net of merger costs, prepayment penalties and branch closure costs:
Non-interest expense$32,465 $35,017 $116,433 $107,326 
Less: core deposit intangible amortization25 28 107 206 
Less: merger costs, prepayment penalties and branch closure costs0 7,435 0 12,642 
Adjusted non-interest expense (non-GAAP)$32,440 $27,554 $116,326 $94,478 
Non-interest income$8,924 $7,968 $33,434 $28,059 
Net interest income$42,059 $40,115 $159,780 $134,711 
Less: tax exempt investment and loan income, net of TEFRA (non-GAAP)1,263 1,352 4,973 5,703 
Add: tax exempt investment and loan income (non-GAAP) (tax-equivalent)1,620 1,759 6,416 7,490 
Adjusted net interest income (non-GAAP)42,416 40,522 161,223 136,498 
Adjusted net revenue (non-GAAP) (tax-equivalent)$51,340 $48,490 $194,657 $164,557 
Adjusted efficiency ratio, net of merger costs, prepayment penalties and branch closure costs63.19 %56.82 %59.76 %57.41 %




Non-GAAP Reconciliations (1):
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Calculation of PPNR:
Net interest income$42,059 $40,115 $159,780 $134,711 
Add: Non-interest income8,924 7,968 33,434 28,059 
Less: Non-interest expense32,465 35,017 116,433 107,326 
PPNR (non-GAAP)$18,518 $13,066 $76,781 $55,444 
Non-GAAP Reconciliations (1):
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Calculation of PPNR, net of merger costs, prepayment penalties and branch closure costs:
Net interest income$42,059 $40,115 $159,780 $134,711 
Add: Non-interest income8,924 7,968 33,434 28,059 
Less: Non-interest expense32,465 35,017 116,433 107,326 
Add: merger costs, prepayment penalties and branch closure costs0 7,435 0 12,642 
PPNR, net of merger costs, prepayment penalties and branch closure costs (non-GAAP)$18,518 $20,501 $76,781 $68,086 

Non-GAAP Reconciliations (1):
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Calculation of adjusted return on average equity:
Net income$14,629 $7,899 $57,707 $32,743 
Add: merger costs, prepayment penalties and branch closure costs (net of tax)0 5,874 0 10,168 
Adjusted net income$14,629 $13,773 $57,707 $42,911 
Average shareholders' equity$440,808 $418,147 $431,062 $358,163 
Adjusted return on average equity13.17 %13.10 %13.39 %11.98 %



Non-GAAP Reconciliations (1):
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Calculation of return on average tangible equity:
Net income$14,629 $7,899 $57,707 $32,743 
Average tangible shareholders' equity396,583 372,799 386,797 316,342 
Return on average tangible equity (non-GAAP) (annualized)14.63 %8.43 %14.92 %10.35 %
Calculation of adjusted return on average tangible equity:
Net income$14,629 $7,899 $57,707 $32,743 
Add: merger costs, prepayment penalties and branch closure costs (net of tax)0 5,874 0 10,168 
Adjusted net income$14,629 $13,773 $57,707 $42,911 
Average tangible shareholders' equity396,583 372,799 386,797 316,342 
Adjusted return on average tangible equity (non-GAAP) (annualized)14.63 %14.70 %14.92 %13.56 %

Non-GAAP Reconciliations (1):
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Calculation of return on average tangible common equity:
Net income available to common stockholders$13,553 $6,752 $53,405 $31,596 
Average tangible common shareholders' equity338,798 315,039 329,012 296,142 
Return on average tangible common equity (non-GAAP) (annualized)15.87 %8.53 %16.23 %10.67 %
Calculation of adjusted return on average tangible common equity:
Net income available to common stockholders$13,553 $6,752 $53,405 $31,596 
Add: merger costs, prepayment penalties and branch closure costs (net of tax)0 5,874 0 10,168 
Adjusted net income available to common stockholders$13,553 $12,626 $53,405 $41,764 
Average tangible common shareholders' equity338,798 315,039 329,012 296,142 
Adjusted return on average tangible common equity (non-GAAP) (annualized)15.87 %15.94 %16.23 %14.10 %



Non-GAAP Reconciliations (1):
(unaudited)
Three Months EndedTwelve Months Ended
December 31,December 31,
(unaudited)
2021202020212020
Calculation of non-interest income excluding net realized gains on available-for-sale securities:
Non-interest income$8,924 $7,968 $33,434 $28,059 
Less: net realized gains on available-for-sale securities783 0 783 2,190 
Adjusted non-interest income$8,141 $7,968 $32,651 $25,869