EX-99.1 3 w51955ex99-1.htm NEWS RELEASE BY CNB FINANCIAL CORP ex99-1

Exhibit 99.1

FOR IMMEDIATE RELEASE:
     
Contact: Peter J. Corso
Executive VP & Treasurer
(518) 673-3243

CNB FINANCIAL CORP. REPORTS SECOND QUARTER 2001 EARNINGS

CNB Financial Corp. (Nasdaq: CNBF) today announced that core cash earnings, were $0.28 diluted earnings per share, or $2.065 million for the quarter ended June 30, 2001 compared to $0.34 diluted earnings per share, or $2.543 million for the same period in 2000. Core cash earnings, as reported by the Company, excludes goodwill amortization, securities write-downs, and a transition adjustment for the cumulative effect of a change in accounting principle. Diluted earnings per share, stated in accordance with generally accepted accounting principles, were $0.25, or $1.865 million for the quarter ended June 30, 2001, compared to $0.25 diluted earnings per share, or $1.912 million for the same period in 2000. Diluted earnings per share were $0.52, or $3.881 million for the six-months ended June 30, 2001, compared to $0.54, or $4.096 million for the same period in 2000.

The primary reason for the decrease in core cash earnings for the quarter ended June 30, 2001 when compared to the same period in 2000 can be attributed to a decrease in the Company’s net interest margin. The Company’s net interest margin for the quarter ended June 30, 2001 was 3.49%, a decrease of 43 basis points from net interest margin of 3.92% for the same period in 2000. The decrease in net interest margin resulted in a decrease of $656,000 in net interest income for the quarter ended June 30, 2001 when compared to the same period in 2000. The Company anticipates that the net interest margin will increase in the third quarter of 2001.

Total loans and leases outstanding at June 30, 2001 amounted to $546.895 million as compared to $531.384 million and $497.454 million at March 31, 2001 and June 30, 2000, respectively. The increase from the prior year is primarily the result of continued focus on commercial and residential mortgage lending. Total assets at June 30, 2001 amounted to $992.601 million compared to $945.162 million at June 30, 2000. Total deposits increased from $792.448 million at June 30, 2000 to $839.609 million at June 30, 2001. The increase in deposits is primarily related to entering several new markets during 1999 and 2000.

On June 19, 2001, the Company announced it entered into a definitive agreement to merge into NBT Bancorp Inc. Under the terms of the agreement, the Company’s stockholders will receive 1.2 shares of NBT Bancorp Inc. common stock for each share of CNB Financial Corp. common stock. The merger, which has been unanimously approved by the boards of directors of CNB Financial Corp. and NBT Bancorp Inc., is subject to regulatory approvals as well as approvals by each company’s shareholders and is expected to close in the fourth quarter of 2001.

Headquarted in Canajoharie, New York, CNB Financial Corp. is the holding company for Central National Bank, Canajoharie, and Central Asset Management, Inc. Central National Bank provides a broad range of deposit and loan products to area consumers, businesses and government entities. The Bank operates 29 full service branch offices and two financial service centers throughout nine counties in Central New York. Central Asset Management provides investment advisory services. Visit our web site on the World Wide Web at http://www.canajocnb.com.

Except for historical information contained herein, the matters discussed in this news release and other information contained in CNB Financial Corp.’s Securities and Exchange Commission filings may express “forward-looking statements”. Those “forward-looking statements” may involve risks and uncertainties, including statements concerning future events or performance and assumptions and other statements that are other than statements of historical facts. CNB Financial Corp. wishes to caution readers not to place undue reliance on any “forward-looking statements”, which speak only as of the date made. Readers are advised that various risk factors, including but not limited to: (1) credit risk, (2) interest rate risk, (3) competition, (4) technology risk, (5) changes in the regulatory environment, (6) changes in general business and economic trends, and (7) delay of or failure to complete the merger with NBT Bancorp. Inc., could cause the actual results or circumstances for future periods to differ materially from those anticipated or projected. CNB Financial Corp. does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to any “forward-looking statements” to reflect the occurrence of unanticipated events or circumstances after the date of such statement.

 

This news release may be deemed to be solicitation material in respect of the proposed merger of CNB Financial Corp. (CNB) with NBT Bancorp Inc. (NBT) pursuant to an Agreement and Plan of Merger, dated as of June 19, 2001, by and between NBT and CNB (the Agreement). Filing of this news release is being made in connection with Regulation of Takeovers and Security Holder Communications (Release No. 33-7760, 34-42055) promulgated by the Securities and Exchange Commission (SEC).

CNB and its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the Agreement. These directors and executive officers include the following: Van Ness D. Robinson, Donald L. Brass, Peter J. Corso, Holly C. Craver, Michael D. Hewitt, J. Carl Barbic, Joseph A. Santangelo and John P. Woods, Jr. As of May 31, 2001, these directors and executive officers beneficially owned in the aggregate 586,026 shares, or approximately 7.90 percent of CNB’s outstanding common stock. Additional information about the directors and executive officers of CNB is included in CNB’s proxy statement for its 2001 Annual Meeting of Shareholders dated April 3, 2001.

In conjunction with the proposed merger, NBT will file with the SEC a registration statement on SEC Form S-4. The registration statement will contain a joint proxy statement/prospectus, which describes the proposed merger of NBT and CNB and the proposed terms and conditions of the merger. Stockholders of NBT and CNB are encouraged to read the registration statement after it is filed and the joint proxy statement/prospectus contained in the registration statement, because these documents will contain important information about the merger. The registration statement, including the joint proxy statement/prospectus, will be available for free, both on the SEC’s web site (www.sec.gov) or by contacting NBT Bancorp Inc., Attention: Michael J. Chewens, 52 South Broad Street, Norwich, New York 13815, telephone 607-337-6520; or CNB Financial Corp., Attn: Holly C. Craver, 24 Church Street, Canajoharie, New York 13317, telephone 518-673-3243

Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934.

 

CNB Financial Corp.
Summary of Unaudited Quarterly Financial Data

                                   
2001 2000
30-Jun 31-Mar 31-Dec 30-Jun
(Amounts in thousands)
Condensed consolidated balance sheets
Cash and due from banks $ 14,319 $ 15,725 $ 16,528 $ 19,350
Federal funds sold — 3,700 — —
Trading securities 9,550 6,994 — —
Securities available for sale 388,066 372,090 365,409 390,192
Loans and leases 546,895 531,384 533,112 497,454
Allowance for loan and lease losses (8,435 ) (8,277 ) (8,145 ) (8,736 )
Net loans and leases 538,460 523,107 524,967 488,718
Goodwill 17,471 17,804 18,135 18,799
 
Other real estate owned and repossessed assets 941 1,102 1,134 888
Other assets 23,794 23,842 25,167 27,215
Total assets $ 992,601 $ 964,364 $ 951,340 $ 945,162
 
Non-interest-bearing deposits $ 79,138 $ 65,458 $ 69,134 $ 66,240
Interest-bearing deposits 760,471 764,106 730,804 726,208
Total deposits 839,609 829,564 799,938 792,448
 
Short-term borrowings 50,871 32,280 52,605 65,628
Long-term borrowings 5,385 5,560 5,658 5,851
Other liabilities 12,942 13,712 11,993 9,175
Total liabilities 908,807 881,116 870,194 873,102
 
Capital securities 18,000 18,000 18,000 18,000
 
Stockholders’ equity 65,794 65,248 63,146 54,060
Total liabilities, capital securities, and stockholders’ equity $ 992,601 $ 964,364 $ 951,340 $ 945,162
 
Condensed consolidated income statements
 
Interest income $ 16,998 $ 17,275 $ 17,740 $ 17,597
Interest expense 9,023 9,339 10,006 8,966
Net interest income 7,975 7,936 7,734 8,631
Provision for loan and lease losses 360 260 395 320
 
Net interest income after provision for loan and lease losses 7,615 7,676 7,339 8,311
Non-interest income:
Service charges on deposit accounts 759 633 697 644
Net gain (loss) on securities transactions (1) 224 640 (808 ) (645 )
Other income 472 472 516 567
Total non-interest income 1,455 1,745 405 566
Non-interest expenses:
Salaries and employee benefits 2,398 2,666 2,046 2,305
Occupancy and equipment 798 811 646 700
Data processing 678 714 680 610
Goodwill 331 332 332 331
Capital securities 361 427 427 420
Other expenses 1,815 1,512 2,403 1,916
Total non-interest expenses 6,381 6,462 6,534 6,282
Income before income tax expense and cumulative effect change in accounting principle 2,689 2,959 1,210 2,595
Income tax expense 824 848 360 683
 
Net income before cumulative effect change in accounting principle 1,865 2,111 850 1,912
 
Cumulative effect change in accounting principle, net of tax (2) — (95 ) — —
Net income $ 1,865 $ 2,016 $ 850 $ 1,912

(1)   Includes write-downs taken for the other-than-temporary impairment on corporate debt securities totaling $1.181 million and $720,000 for the quarters ended December 31, 2000 and June 30, 2000, respectively.
 
(2)   Cumulative effect change in accounting principle is due to the adoption of Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities”, which resulted in a $159,000 pre-tax transition adjustment.

 

                                   
(Dollars in thousands, exluding per share amounts)
Financial Highlights
 
Per common share:
Basic earnings —Before cumulative effect (1) $ 0.25 $ 0.28 $ 0.11 $ 0.26
Basic earnings —After cumulative effect (1) $ 0.25 $ 0.27 $ 0.11 $ 0.26
Diluted earnings —Before cumulative effect (1) $ 0.25 $ 0.28 $ 0.11 $ 0.25
Diluted earnings —After cumulative effect (1) $ 0.25 $ 0.27 $ 0.11 $ 0.25
Core cash diluted earnings (2) $ 0.28 $ 0.31 $ 0.23 $ 0.34
 
Common shares outstanding:
Average —diluted 7,508 7,495 7,485 7,507
Period end 7,421 7,474 7,474 7,475
 
Return on (annualized):
Average assets 0.76 % 0.86 % 0.36 % 0.81 %
Average stockholders’ equity 11.49 % 12.66 % 5.82 % 14.23 %
Average assets —core cash (2) 0.84 % 0.98 % 0.74 % 1.08 %
Average stockholders’ equity —core cash (2) 12.72 % 14.51 % 12.05 % 18.92 %
 
Yield on average earning assets (3) 7.38 % 7.79 % 7.84 % 7.91 %
Cost of interest-bearing liabilities 4.42 % 4.77 % 5.00 % 4.52 %
Net interest spread (3) 2.96 % 3.02 % 2.84 % 3.39 %
Net interest margin (3) 3.49 % 3.60 % 3.43 % 3.92 %
Loan quality:
Nonaccrual loans $ 4,432 $ 4,283 $ 4,415 $ 4,792
Accruing loans past due 90 days or more 615 278 249 386
Total non-performing loans $ 5,047 $ 4,561 $ 4,664 $ 5,178
Non-performing loans to total loans and leases 0.92 % 0.86 % 0.87 % 1.04 %
Allowance for loan and lease losses to non-performing loans 167.13 % 181.47 % 174.64 % 168.71 %
Allowance for loan and lease losses to total loans and leases 1.54 % 1.56 % 1.53 % 1.76 %

(1)   Cumulative effect change in accounting principle is due to the adoption of Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities”, which resulted in a $159,000 pre-tax transition adjustment ($95,000 after-tax).
 
(2)   Core cash earnings, as reported by the Company, excludes goodwill amortization, the write-downs taken for the other-than-temporary impairment on corporate debt securities, and the transition adjustment for the cumulative effect change in accounting principle.
 
(3)   Ratios are calculated using fully tax equivalent interest income.

 

CNB Financial Corp.
Summary of Unaudited Financial Data for the six months ended June 30, 2001 and 2000

                   
2001 2000
30-Jun 30-Jun
Condensed consolidated income statement (Amounts in thousands,
excluding per share amounts)
Interest income $ 34,273 $ 34,568
Interest expense 18,362 17,410
Net interest income 15,911 17,158
Provision for loan and lease losses 620 740
Net interest income after provision for loan and lease losses 15,291 16,418
Non-interest income:
Service charges on deposit accounts 1,392 1,224
Net gain (loss) on securities transactions (1) 864 (326 )
Other income 944 1,069
Total non-interest income 3,200 1,967
Non-interest expenses:
Salaries and employee benefits 5,064 4,982
Occupancy and equipment 1,609 1,427
Data processing 1,392 1,231
Goodwill 663 663
Capital securities 788 835
Other expenses 3,327 3,685
Total non-interest expenses 12,843 12,823
 
Income before income tax expense and
  cumulative effect change in accounting principle		 5,648 5,562
Income tax expense 1,672 1,466
 
Net income before cumulative effect change in accounting principle 3,976 4,096
 
Cumulative effect change in accounting principle, net of tax (2) (95 ) —
Net income $ 3,881 $ 4,096

(1)   Includes write-down taken for the other-than-temporary impairment on corporate debt securities totaling $720,000 for the quarter ended June 30, 2000.
 
(2)   Cumulative effect change in accounting principle is due to the adoption of Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities”, which resulted in a $159,000 pre-tax transition adjustment.

 

                 
Financial Highlights
 
Per common share:
Basic earnings —Before cumulative effect (1) $ 0.53 $ 0.55
Basic earnings —After cumulative effect (1) $ 0.52 $ 0.55
Diluted earnings —Before cumulative effect (1) $ 0.53 $ 0.54
Diluted earnings —After cumulative effect (1) $ 0.52 $ 0.54
Core cash diluted earnings (2) $ 0.58 $ 0.65
 
Common shares outstanding:
Average —diluted 7,502 7,533
Period end 7,421 7,475
 
Return on (annualized):
Average assets 0.81 % 0.88 %
Average stockholders’ equity 12.07 % 15.05 %
Average assets —core cash (2) 0.91 % 1.06 %
Average stockholders’ equity —core cash (2) 13.61 % 18.11 %
 
Yield on average earning assets (3) 7.58 % 7.88 %
Cost of interest-bearing liabilities 4.59 % 4.43 %
Net interest spread (3) 2.99 % 3.45 %
Net interest margin (3) 3.54 % 3.96 %

(1)   Cumulative effect change in accounting principle is due to the adoption of Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities”, which resulted in a $159,000 pre-tax transition adjustment ($95,000 after-tax).
 
(2)   Core cash earnings, as reported by the Company, excludes goodwill amortization, the write-downs taken for the other-than-temporary impairment on corporate debt securities, and the transition adjustment for the cumulative effect change in accounting principle.
 
(3)   Ratios are calculated using fully tax equivalent interest income.