GlobeNewswire Inc | Jul 20, 2021 04:18PM EDT

July 20, 2021

CLEARFIELD, Pa., July 20, 2021 (GLOBE NEWSWIRE) -- CNB Financial Corporation (CNB or the Corporation) (NASDAQ: CCNE), the parent company of CNB Bank, today announced its earnings for the quarter ended June 30, 2021.

Joseph B. Bower, Jr., President and CEO, stated, We are pleased to announce another quarter that reflects the earnings power of our Corporation. Our focus on risk-based loan pricing has supported the Corporation's growth strategies while delivering a strong level of profitability for our shareholders."

Mr. Bower went on to say, "It is very exciting for us to bring our banking model to Roanoke and southwest Virginia. Our expansion continues to provide the Corporation with organic growth and positive capital management, without the disruption of culture that mergers create. With this new market, along with our existing presence in Buffalo, Cleveland, Columbus and Erie, we believe our model has years of built-in opportunities for growth.

Executive Summary

-- In July 2021, the Corporation expanded its footprint by entering the Roanoke, Virginia market through the establishment of its newest brand, Ridge View Bank. Ridge View Bank's focus is on commercial lending, cash management and private banking. A loan production office will open for business in August 2021, in Roanoke. -- Also during the second quarter of 2021, the Corporation sold $85 million aggregate principal amount of its 3.25% fixed-to-floating rate subordinated notes due 2031 (the 2031 Notes) to certain eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended, and the provisions of Rule 506 of Regulation D thereunder. The Corporation intends to use the net proceeds to, among other things, redeem its existing $50 million in subordinated indebtedness, which indebtedness is redeemable on or after October 15, 2021. The 2031 Notes were designed to qualify as Tier 2 capital under the Federal Reserves capital guidelines and received an investment grade rating of BBB- by Kroll Bond Rating Agency. -- Earnings per diluted share of $0.76 for the second quarter of 2021 increased 40.7% from the second quarter of 2020 primarily as a result of a wider net interest margin, coupled with stable credit quality and well-controlled operating efficiency. -- At June 30, 2021, excluding the impact of government stimulus initiatives, the Corporation's loan portfolio had net organic growth of 3.5%, or 7.1% annualized, from December 31, 2020. The net organic growth for the first six months of this year was primarily driven by the Corporation's Cleveland market, as well as increased syndicated lending activities. -- At June 30, 2021, total deposits of $4.5 billion increased 7.7%, or 15.6% annualized, from December 31, 2020, primarily due to organic growth and the impact of government stimulus initiatives. The number of households across all regions increased 1.9%, or 3.8% annualized, from December 31, 2020. -- The Corporation's Wealth and Asset business continues to provide diversification in its revenue as Assets Under Management reached $1.2 billion, at June 30, 2021, which increased 7.3%, or 14.8%, annualized, from December 31, 2020. For the first six months of 2021, wealth and asset management fees totaled approximately $3.3 million, or 23.2%, higher than the first six months of 2020. -- Annualized return on average equity for the second quarter of 2021 was 13.36% compared to 10.30% for the second quarter of 2020, while return on average tangible common equity for the second quarter of 2021 was 16.06%, an increase of 435 basis points from 11.71%, for the second quarter of 2020, reflecting the Corporation's continued focus on efficient utilization of capital.1 -- The Corporation's excess liquidity at the end of the second quarter of 2021 increased to $682.9 million from $482.5 million at the end of 2020, primarily as a result of the additional government stimulus initiatives during the first six months of 2021 and the completion of the offering of the 2031 Notes.

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.

Earnings Performance Highlights

-- Net income was $14.0 million, or $0.76 per diluted common share, for the quarter ended June 30, 2021, compared to $8.2 million, or $0.54 per diluted share, for the same period in 2020, reflecting increases of $5.8 million, or 69.7%, and $0.22 per diluted share, or 40.7%, respectively. Included in net income for the quarter ended June 30, 2020 was $365 thousand, or $0.02 per diluted share, in merger costs related to CNB's acquisition of Bank of Akron. -- Net income was $28.2 million, or $1.54 per diluted common share, for the six months ended June 30, 2021, compared to $17.1 million, or $1.11 per diluted share, for the same period in 2020, reflecting increases of $11.1 million, or 65.1%, and $0.43 per diluted share, or 38.7%, respectively. Included in net income for the six months ended June 30, 2020 was $422 thousand, or $0.03 per diluted share, in merger costs. -- Pre-provision net revenue ("PPNR") was $19.2 million for the three months ended June 30, 2021, compared to $15.7 million for the three months ended June 30, 2020, reflecting an increase of $3.5 million, or 22.4%.1 PPNR for the three months ended June 30, 2020 included $462 thousand in merger costs. -- PPNR was $38.8 million for the six months ended June 30, 2021, compared to $29.3 million for the six months ended June 30, 2020, reflecting an increase of $9.4 million, or 32.2%.1 Included in PPNR for the six months ended June 30, 2020 was $534 thousand in merger costs. -- At June 30, 2021, the Corporation had $55.6 million in outstanding commercial and consumer loans with deferred loan payments related to the ongoing novel coronavirus, or COVID-19, pandemic, or 1.6% of total loans.

Balance Sheet and Liquidity Highlights

-- Loans totaled $3.5 billion as of June 30, 2021 reflecting an increase of $439.7 million, or 14.5%, from June 30, 2020, as a result of the addition of $319.1 million in loans on July 17, 2020, related to the acquisition of Bank of Akron, net of fair value adjustments, and $198.0 million of net organic growth, primarily from the Corporation's Cleveland and Buffalo regions and increased syndicated lending activities, partially offset by a $77.4 million decrease in Paycheck Protection Program ("PPP") loans, net of PPP deferred processing fees (such loans, the "PPP-related loans").At June 30, 2021, loans, excluding the impact of PPP-related loans, had net organic growth of $114 million, or 3.5% (7.1% annualized), from December 31, 2020. The net organic growth for the first six months of this year was primarily driven by the Corporation's Cleveland market and increased syndicated lending activities. -- Deposits totaled $4.5 billion as of June 30, 2021, an increase of $908.7 million, or 25.3%, from June 30, 2020, as a result of the addition of $419.5 million in deposits on July 17, 2020, related to the acquisition of Bank of Akron, net of fair value adjustments, and a $489.2 million, or 13.6%, increase in deposits across all of the Corporation's regions, including its Private Banking division.At June 30, 2021, total deposits increased $323 million, or 7.7% (15.6% annualized), from December 31, 2020, as a result of organic growth and the impact of government stimulus initiatives. -- At June 30, 2021, the Corporations cash position was approximately $737.7 million, including excess liquidity of $682.9 million held at the Federal Reserve, reflecting, in management's view, a strong liquidity level. In addition to its cash position, the Corporations borrowing capacity with the Federal Home Loan Bank (the "FHLB") at June 30, 2021 was approximately $833.1 million. -- In June 2021, the Corporation completed an offering of $85 million aggregate principal amount of the 2031 Notes. The 2031 Notes mature in June 2031 and will bear interest (i) at a fixed rate of 3.25% per annum from and including the original issue date to but excluding June 15, 2026 or the earlier redemption date, payable semi-annually in arrears, and (ii) from and excluding the maturity date or earlier redemption date, at the rate per year, reset quarterly, equal to the sum of the then current three-month average Secured Overnight Financing Rate (SOFR), determined on the determination date of the applicable interest period, plus 258 basis points, payable quarterly in arrears. The 2031 Notes were designed to qualify as Tier 2 capital under the Federal Reserves capital guidelines and received an investment grade rating of BBB- by Kroll Bond Rating Agency. -- Book value per common share was $22.04 and $21.45 as of June 30, 2021 and 2020, respectively, while tangible book value per common share was $19.42 as of June 30, 2021, reflecting an increase of 2.5% from a tangible book value per share of $18.94 as of June 30, 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 $25.7 million, net of dividends, and additional paid in capital of $24.5 million primarily from the issuance of common stock related to the Bank of Akron acquisition, partially offset by a $8.7 million decrease in accumulated other comprehensive income and approximately $5.0 million in intangible assets recorded as a result of the acquisition of Bank of Akron.

Customer Support Strategies and Loan Portfolio Profile

-- As of June 30, 2021, the Corporation had outstanding $145.9 million in PPP loans, or 1,442 PPP loan relationships, at a rate of 1.00% and deferred PPP processing fees of approximately $6.2 million. For the three and six months ended June 30, 2021, the Corporation recognized $1.6 million and $4.4 million in deferred PPP processing fees ("PPP-related fees"), respectively. The outstanding balance of PPP loans at June 30, 2021 is (i) $22.6 million, comprised of 181 loans from the Corporation's participation in the PPP in 2020, and (ii) $123.3 million, or 1,261 loans, from the Corporations participation in the PPP in the first six months of 2021. -- 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 June 30, 2021, loans with deferred loan payment arrangements, totaled $55.6 million, or 1.6% of total loans outstanding, consisting of 12 loans, totaling $45.6 million, for which principal and interest were deferred, and 6 loans, totaling $10.0 million, for which principal only was deferred. The Corporation expects $15.4 million, or 27.7%, of such loans to resume regular contractual payments by the end of the third quarter of 2021, $37.5 million, or 67.4%, of such loans to resume regular contractual payments by the end of the 2021 and $2.7 million, or 4.9%, resuming regular contractual payments by the end of the first quarter of 2022. Loan payment deferrals by loan type were as follows: Commercial and industrial loans 10 loans, totaling $17.5 million;Commercial real estate loans 5 loans, totaling $37.4 million; andResidential mortgage loans 3 loans, totaling $695 thousand. -- The Corporation tracks lending exposure by industry classification to determine potential risk associated with industry concentrations, if any, that could lead to additional credit loss exposure. As a result of the COVID-19 pandemic, the Corporation has determined the Hotels/Motels and Restaurants/Fast Foods industries represent a potentially higher level of credit risk, as many of these customers have incurred a significant, negative impact to their businesses as a result of the pandemic. At June 30, 2021, the Corporation had loan concentrations for these industries as follows:Hotels/Motels $208.7 million, or 6.02% of total loans outstanding, excluding PPP-related loans; andRestaurants/Fast Foods $31.7 million, or 0.91% of total loans outstanding, excluding PPP-related loans.

Performance Ratios

-- Annualized return on average common equity was 14.12% for the three months ended June 30, 2021, compared to 10.30% for the three months ended June 30, 2020. Annualized return on average tangible common equity was 16.06% and 11.71% for the same periods in 2021 and 2020, respectively.1 -- Annualized return on average equity for the six months ended June 30, 2021 was 13.45% compared to 10.80% for the six months ended June 30, 2020. Annualized return on average common equity was 14.39% for the six months ended June 30, 2021, compared to 10.80% for the six months ended June 30, 2020. Annualized return on average tangible common equity was 16.38% and 12.31% for the same periods in 2021 and 2020, respectively.1 -- Efficiency ratio was 57.91% for the three months ended June 30, 2021, compared to 57.76% for the comparable period in 2020.1 Included in the efficiency ratio for the three months ended June 30, 2020 is $462 thousand in merger costs. -- Efficiency ratio was 58.04% for the six months ended June 30, 2021, compared to 59.01% for the comparable period in 2020.1 The efficiency ratio for the six months ended June 30, 2020 included $534 thousand in merger costs.

Revenue

-- Total revenue (comprised of net interest income plus non-interest income) was $46.2 million for the three months ended June 30, 2021, an increase of $8.3 million, or 21.8%, from the three months ended June 30, 2020, primarily due to the following:Net interest income of $38.3 million for the three months ended June 30, 2021, an increase of $8.4 million, or 27.9%, from the three months ended June 30, 2020, primarily as a result of growth in average earning assets and a 14 basis point increase in net interest margin for the same period. The three months ended June 30, 2021 included PPP-related fees totaling approximately $1.6 million, compared to zero for the three months ended June 30, 2020.Net interest margin on a fully tax-equivalent basis was 3.28% and 3.14% for the three months ended June 30, 2021 and 2020, respectively.1The yield on earning assets of 3.72% for the three months ended June 30, 2021 decreased 26 basis points from 3.98% for the three months ended June 30, 2020, primarily as a result of the lower interest rate environment. The cost of interest-bearing liabilities decreased 45 basis points from 1.00% for the three months ended June 30, 2020 to 0.55% for the three months ended June 30, 2021, primarily as a result of the Corporations targeted deposit rate reductions and the repayment of the Corporation's remaining FHLB borrowings in the fourth quarter of 2020. -- Total revenue (comprised of net interest income plus non-interest income) was $93.5 million for the six months ended June 30, 2021, an increase of $20.3 million, or 27.7%, from the six months ended June 30, 2020, primarily due to the following:Net interest income of $77.4 million for the six months ended June 30, 2021, an increase of $17.5 million, or 29.2%, from the six months ended June 30, 2020, primarily as a result of growth in average earning assets and a 11 basis point increase in net interest margin for the same period. The six months ended June 30, 2021 included PPP-related fees totaling approximately $4.4 million, compared to zero for the six months ended June 30, 2020.Net interest margin on a fully tax-equivalent basis was 3.42% and 3.31% for the six months ended June 30, 2021 and 2020, respectively.1The yield on earning assets of 3.87% for the six months ended June 30, 2021 decreased 43 basis points from 4.30% for the six months ended June 30, 2020, primarily as a result of the lower interest rate environment. The cost of interest-bearing liabilities decreased 61 basis points from 1.17% for the six months ended June 30, 2020 to 0.56% for the six months ended June 30, 2021, primarily as a result of the Corporations targeted deposit rate reductions and the repayment of the Corporation's remaining FHLB borrowings in the fourth quarter of 2020. -- Total non-interest income was $7.9 million for the three months ended June 30, 2021, a decrease of $92 thousand, or 1.2%, from the same period in 2020. Included in non-interest income for the three months ended June 30, 2020 was $2.2 million in net realized gains on available for sale securities. Excluding the impact of the realized gains on available for sale securities, total non-interest income of $7.9 million for the quarter ended June 30, 2021 increased $2.1 million, or 36.4%, from the same period in 2020.1 During the three months ended June 30, 2021, Wealth and Asset Management fees increased $391 thousand, or 28.5%, compared to the three months ended June 30, 2020. Other significant improvements during the three months ended June 30, 2021, included service charges on deposits and card processing and interchange income, resulting from increased business activity. -- Total non-interest income was $16.1 million for the six months ended June 30, 2021, an increase of $2.8 million, or 20.9%, from the same period in 2020. Included in non-interest income for the six months ended June 30, 2020 was $2.2 million in net realized gains on available for sale securities. Excluding the impact of the realized gains on available for sale securities, total non-interest income of $16.1 million for the six months June 30, 2021 increased $5.0 million, or 44.7%, from the same period in 2020, partially driven by growth in Wealth and Asset Management fees, as assets under management increased by $134.3 million, or 12.4%, from June 30, 2020, to $1.2 billion as of June 30, 2021.1 Other significant factors included mortgage banking, card processing and interchange income from increased business activity as well as an increase in net realized and unrealized gains on trading securities.

Non-Interest Expense

-- For the three months ended June 30, 2021, total non-interest expense was $27.0 million, reflecting an increase of $4.8 million, or 21.5%, from the three months ended June 30, 2020. In addition to the acquisition of Bank of Akron, the second quarter of 2021 included the expenses related to hiring additional personnel in the Corporation's growth regions of Cleveland and Buffalo. Also, the second quarter of 2021 included investments in technology aimed at enhancing customer experience. -- For the six months ended June 30, 2021, total non-interest expense was $54.8 million, an increase of $10.8 million, or 24.6%, from the six months ended June 30, 2020. In addition to the acquisition of Bank of Akron, the first six months of 2021 included the effects of hiring additional personnel in the Corporation's growth regions of Cleveland and Buffalo. Also, the first six months of 2021 included a market value appreciation in the Corporations deferred compensation plans, as well, as investments in technology aimed at enhancing customer experience.

Income Taxes

-- Income tax expense of $3.2 million for the three months ended June 30, 2021 increased $1.5 million, or 83.9%, from the three months ended June 30, 2020. The Corporation's effective tax rate was 18.8% for the three months ended June 30, 2021, compared to 17.6% for the three months ended June 30, 2020. The increase in the effective tax rate was primarily attributable to a higher percentage of pre-tax net income in the second quarter of 2021 that was not tax-exempt than was recorded in the second quarter of 2020. -- Income tax expense of $6.5 million for the six months ended June 30, 2021 increased $3.0 million, or 86.3%, from the six months ended June 30, 2020. The Corporation's effective tax rate was 18.7% for the six months ended June 30, 2021, compared to 17.0% for the six months ended June 30, 2020. The increase in the effective tax rate was primarily attributable to a higher percentage of pre-tax net income in the first six months of 2021 that was not tax-exempt than was recorded in the first six months of 2020.

Asset Quality

-- Total non-performing assets were $33.2 million, or 0.64%, of total assets, as of June 30, 2021, compared to $31.5 million, or 0.67%, as of December 31, 2020 and $30.4 million, or 0.68% as of June 30, 2020. -- Beginning with the quarter ended December 31, 2020, the Corporation adopted Accounting Standard Update 2016-13, commonly referred to as CECL. Prior to the quarter ended December 31, 2020, the allowance for credit losses was calculated using the incurred loss methodology, which results have not been restated. The allowance for credit losses measured as a percentage of loans was 1.06% as of June 30, 2021. Total loans at June 30, 2021 include approximately $139.7 million in PPP-related loans. Excluding PPP-related loans, the allowance for credit losses measured as a percentage of loans was 1.11% as of June 30, 2021 compared to 1.07% as of December 31, 2020 and 0.87% as of June 30, 2020.1 -- For the three months ended June 30, 2021, net loan charge-offs were $614 thousand, or 0.07% of total average loans, compared to $3.1 million, or 0.41%, of total average loans, during the comparable period in 2020. The second quarter of 2020 included a charge-off of approximately $2.6 million that related to a secured commercial and industrial loan relationship with a borrower who is deceased. -- For the six months ended June 30, 2021, net loan charge-offs were $1.5 million, or 0.09% of total average loans, compared to $3.7 million, or 0.26%, of total average loans, during the comparable period in 2020.

Capital

-- As of June 30, 2021, the Corporations total shareholders equity was $429.9 million, an increase of $99.7 million, or 30.2%, from June 30, 2020 primarily as a result of an increase in additional paid in capital related to the Bank of Akron acquisition, the Corporation's issuance of depositary shares, each representing a 1/40th ownership interest in a share of the Corporation's 7.125% Series A fixed-to-floating rate non-cumulative perpetual preferred stock, no par value per share, and growth in organic earnings, partially offset by the adoption of CECL, 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 six months ended June 30, 2021. -- As of June 30, 2021, all of the Corporations regulatory capital ratios increased from December 31, 2020. -- As of June 30, 2021, the Corporations ratio of tangible common equity to tangible assets of 6.42% reflected the impact of approximately $139.7 million in PPP-related loans as well as the Corporation's significant excess liquidity. Excluding PPP-related loans and excess liquidity of $682.9 million at June 30, 2021, the Corporations adjusted ratio of tangible common equity to tangible assets of 7.66% represents a decrease from the June 30, 2020 adjusted ratio of 8.09%, primarily as a result of the impact of the acquisition of Bank of Akron, the adoption of CECL and the decrease in accumulated other comprehensive income, partially offset by increases in retained earnings, net of dividends and additional paid in capital.1

About CNB Financial Corporation

CNB Financial Corporation is a financial holding company with consolidated assets of approximately $5.1 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, two loan production offices, one drive-up office and 45 full-service offices in Pennsylvania, Ohio, New York and Virginia. CNB Banks 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 northern New York; and Ridge View Bank, with a loan production office in Roanoke, Virginia. 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 CNBs 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 CNBs 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. CNBs 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 and scope of the COVID-19 pandemic and the local, national and global impact of COVID-19; (ii) actions governments, businesses and individuals take in response to the pandemic; (iii) the speed and effectiveness of vaccine and treatment developments and deployment; (iv) variations of COVID-19, such as the Delta variant, and the response thereto, (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 Managements Discussion and Analysis of Financial Condition and Results of Operations sections of and the forward-looking statement disclaimers in CNBs annual and quarterly reports.

The forward-looking statements are based upon managements 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 Six Months Ended June 30, June 30, % % 2021 2020 change 2021 2020 changeIncome Statement Interest income $ 43,528 $ 38,073 14.3 % $ 87,823 $ 78,163 12.4 %Interest expense 5,223 8,135 (35.8 )% 10,397 18,231 (43.0 )%Net interest 38,305 29,938 27.9 % 77,426 59,932 29.2 %incomeProvision for 1,967 5,680 (65.4 )% 4,089 8,759 (53.3 )%credit losses ^(2)Net interestincome after 36,338 24,258 49.8 % 73,337 51,173 43.3 %provision forcredit losses Non-interest incomeService charges on 1,446 924 56.5 % 2,794 2,451 14.0 %deposit accountsOther service 601 606 (0.8 )% 1,091 1,196 (8.8 )%charges and feesWealth and asset 1,765 1,374 28.5 % 3,287 2,667 23.2 %management feesNet realized gainson 0 2,190 NA 0 2,190 NAavailable-for-salesecuritiesNet realized andunrealized gains 350 306 14.4 % 470 (282 ) (266.7 )%(losses) ontrading securitiesMortgage banking 536 664 (19.3 )% 1,771 1,001 76.9 %Bank owned life 504 386 30.6 % 1,444 865 66.9 %insuranceCard processingand interchange 2,079 1,325 56.9 % 3,913 2,453 59.5 %incomeOther 576 174 231.0 % 1,326 772 71.8 %Total non-interest 7,857 7,949 (1.2 )% 16,096 13,313 20.9 %income Non-interest expensesSalaries and 13,518 10,673 26.7 % 28,091 22,070 27.3 %benefitsNet occupancyexpense of 2,935 3,047 (3.7 )% 6,204 6,072 2.2 %premisesFDIC insurance 557 621 (10.3 )% 1,173 1,240 (5.4 )%premiumsCore DepositIntangible 28 69 (59.4 )% 56 152 (63.2 )%amortizationCard processingand interchange 1,408 592 137.8 % 2,088 1,388 50.4 %expensesMerger costs 0 462 NA 0 534 NAOther 8,519 6,735 26.5 % 17,157 12,485 37.4 %Total non-interest 26,965 22,199 21.5 % 54,769 43,941 24.6 %expenses Income before 17,230 10,008 72.2 % 34,664 20,545 68.7 %income taxesIncome tax expense 3,240 1,762 83.9 % 6,493 3,486 86.3 %Net income 13,990 8,246 69.7 % 28,171 17,059 65.1 %Preferred stock 1,075 0 NA 2,150 0 NA dividendsNet incomeavailable to $ 12,915 $ 8,246 56.6 % $ 26,021 $ 17,059 52.5 %commonstockholders Average dilutedcommon shares 16,824,700 15,341,317 16,811,836 15,312,965 outstanding Diluted earnings $ 0.76 $ 0.54 40.7 % $ 1.54 $ 1.11 38.7 %per common shareCash dividends per $ 0.17 $ 0.17 0.0 % $ 0.34 $ 0.34 0.0 %common share Dividend payout 22 % 31 % 22 % 31 % ratio (unaudited) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Average Balances Loans $ 3,436,151 $ 3,000,701 $ 3,411,299 $ 2,909,194 Investment 642,394 556,253 628,489 566,510 securitiesTotal earning 4,734,660 3,903,207 4,622,299 3,704,135 assetsTotal assets 5,017,734 4,149,762 4,900,128 3,947,618 Noninterest-bearing 712,725 488,754 682,649 429,296 depositsInterest-bearing 3,724,746 2,930,833 3,652,698 2,820,524 depositsShareholders' 424,534 322,059 422,472 317,587 equityCommonshareholders' 366,749 322,059 364,687 317,587 equityTangible commonshareholders' 322,471 283,280 320,395 278,767 equity ^(1) Average Yields Loans 4.76 % 4.67 % 4.86 % 4.88 % Investment 1.84 % 2.66 % 1.97 % 2.86 % securitiesTotal earning 3.72 % 3.98 % 3.87 % 4.30 % assetsInterest-bearing 0.44 % 0.81 % 0.46 % 0.99 % depositsInterest-bearing 0.55 % 1.00 % 0.56 % 1.17 % liabilities Performance Ratios (annualized)Return on average 1.12 % 0.80 % 1.16 % 0.87 % assetsReturn on average 13.36 % 10.30 % 13.45 % 10.80 % equityReturn on average 14.12 % 10.30 % 14.39 % 10.80 % common equityReturn on averagetangible common 16.06 % 11.71 % 16.38 % 12.31 % equity ^(1)Net interestmargin, fully tax 3.28 % 3.14 % 3.42 % 3.31 % equivalent basis ^(1)Efficiency Ratio ^ 57.91 % 57.76 % 58.04 % 59.01 % (1) Net Loan Charge-OffsCNB Bank net loan $ 430 $ 2,733 $ 1,082 $ 2,841 charge-offsHoliday Financialnet loan 184 333 439 862 charge-offsTotal net loan $ 614 $ 3,066 $ 1,521 $ 3,703 charge-offs Net loancharge-offs / 0.07 % 0.41 % 0.09 % 0.26 % average loans

(unaudited) (unaudited) % % change June 30, December 31, June 30, change versus versus 2021 2020 2020 12/31/ 06/30/20 20Ending Balance SheetLoans $ 3,469,845 $ 3,371,789 $ 3,030,171 2.9 % 14.5 %Loans held for 10,528 8,514 6,065 23.7 % 73.6 %saleInvestment 685,060 591,557 554,983 15.8 % 23.4 %securitiesFHLB and other 3,230 2,899 11,383 11.4 % (71.6 )equity interests %Other earning 687,910 488,326 617,785 40.9 % 11.4 %assetsTotal earning 4,856,573 4,463,085 4,220,387 8.8 % 15.1 %assets Allowance for (36,908 ) (34,340 ) (24,529 ) 7.5 % 50.5 %credit losses ^(2)Goodwill 43,749 43,749 38,730 0.0 % 13.0 %Core deposit 511 567 8 (9.9 ) 6287.5 %intangible %Other assets 285,893 256,338 234,955 11.5 % 21.7 % Total assets $ 5,149,818 $ 4,729,399 $ 4,469,551 8.9 % 15.2 % Noninterest-bearing $ 727,177 $ 627,114 $ 507,236 16.0 % 43.4 %depositsInterest-bearing 3,777,588 3,554,630 3,088,786 6.3 % 22.3 %depositsTotal deposits 4,504,765 4,181,744 3,596,022 7.7 % 25.3 % Borrowings 0 0 416,313 NA (100.0 ) %Subordinated debt 155,620 70,620 70,620 120.4 % 120.4 %Other liabilities 59,484 60,898 56,324 (2.3 ) 5.6 % % Common stock 0 0 0 NA NAPreferred stock 57,785 57,785 0 0.0 % NAAdditional paid in 126,875 127,518 102,374 (0.5 ) 23.9 %capital %Retained earnings 239,017 218,727 213,327 9.3 % 12.0 %Treasury stock (1,672 ) (2,967 ) (2,027 ) (43.6 ) (17.5 ) % %Accumulated other )comprehensive 7,944 15,074 16,598 (47.3 % (52.1 )income (loss)Totalshareholders' 429,949 416,137 330,272 3.3 % 30.2 %equity Totalliabilities and $ 5,149,818 $ 4,729,399 $ 4,469,551 8.9 % 15.2 %shareholders'equity Ending shares 16,884,519 16,833,008 15,396,561 outstanding Book value per $ 22.04 $ 21.29 $ 21.45 3.5 % 2.8 %common shareTangible bookvalue per common $ 19.42 $ 18.66 $ 18.94 4.1 % 2.5 %share ^(1) Capital Ratios Tangible commonequity / tangible 6.42 % 6.70 % 6.58 % assets ^(1)Tangible commonequity / tangibleassets, net ofPPP-related loans 7.66 % 7.76 % 8.09 % and excessliquidity at theFederal Reserve^(1)Tier 1 leverage 8.16 % 8.11 % 7.55 % ratio ^(4)Common equity tier 9.68 % 9.50 % 9.78 % 1 ratio ^(4)Tier 1 risk based 11.97 % 11.91 % 10.48 % ratio^ (4)Total risk based 16.83 % 14.32 % 13.11 % ratio^ (4) Asset Quality Non-accrual loans $ 32,299 $ 30,359 $ 29,269 Loans 90+ dayspast due and 611 325 128 accruingTotalnon-performing 32,910 30,684 29,397 loansOther real estate 294 862 998 ownedTotalnon-performing $ 33,204 $ 31,546 $ 30,395 assets Loans modified ina troubled debt restructuring(TDR):Performing TDR $ 9,115 $ 10,457 $ 7,366 loansNon-performing TDR 7,854 4,631 3,747 loans ^(3)Total TDR loans $ 16,969 $ 15,088 $ 11,113 Non-performingassets / Loans + 0.96 % 0.94 % 1.00 % OREONon-performingassets / Total 0.64 % 0.67 % 0.68 % assetsAllowance forcredit losses / 1.06 % 1.02 % 0.81 % Loans ^(2)Allowance forcredit losses /Loans, net of 1.11 % 1.07 % 0.87 % PPP-related loans^(1) (2) ^(1) Management uses non-GAAP financial information in itsanalysis of the Corporation?s performance. Managementbelieves that these non-GAAP measures provide a greaterunderstanding of ongoing operations, enhance comparabilityof results of operations with prior periods and show theeffects of significant gains and charges in the periodspresented. The Corporation?s management believes thatinvestors may use these non-GAAP measures to analyze theCorporation?s financial performance without the impact ofunusual items or events that may obscure trends in the Corporation?s underlying performance. This non-GAAP datashould be considered in addition to results prepared inaccordance with GAAP, and is not a substitute for, orsuperior to, GAAP results. Limitations associated withnon-GAAP financial measures include the risks that personsmight disagree as to the appropriateness of items includedin these measures and that different companies mightcalculate these measures differently. A reconciliation ofthese non-GAAP financial measures is provided below (dollarsin thousands, except per share data).^(2) Beginning with the quarter ended December 31, 2020 theCorporation adopted ASU 2016-13. Prior to the quarter ended December 31, 2020, the results were based on incurred lossmethodology and these results have not been restated.^(3) Nonperforming TDR loans are also included in the balance of non-accrual loans in the previous table.^(4) Capital ratios as of June 30, 2021 are estimated.

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) June 30, December 31, June 30, 2021 2020 2020Calculation of tangible book valueper share and tangible common equity/tangible assets:Shareholders' equity $ 429,949 $ 416,137 $ 330,272 Less: preferred equity 57,785 57,785 0 Less: goodwill 43,749 43,749 38,730 Less: core deposit intangible 511 567 8 Tangible common equity $ 327,904 $ 314,036 $ 291,534 Total assets $ 5,149,818 $ 4,729,399 $ 4,469,551 Less: goodwill 43,749 43,749 38,730 Less: core deposit intangible 511 567 8 Tangible assets $ 5,105,558 $ 4,685,083 $ 4,430,813 Ending shares outstanding 16,884,519 16,833,008 15,396,561 Tangible book value per common $ 19.42 $ 18.66 $ 18.94 shareTangible common equity/Tangible 6.42 % 6.70 % 6.58 %assets Calculation of tangible commonequity/tangible assets, net of PPP-related loans and excessliquidity at the Federal Reserve:Additional paid in capital $ 126,875 $ 127,518 $ 102,374 Retained earnings 239,017 218,727 213,327 Treasury stock (1,672 ) (2,967 ) (2,027 )Accumulated other comprehensive 7,944 15,074 16,598 incomeLess: goodwill 43,749 43,749 38,730 Less: core deposit intangible 511 567 8 Tangible common equity $ 327,904 $ 314,036 $ 291,534 Tangible assets $ 5,105,558 $ 4,685,083 $ 4,430,813 Less: PPP-related loans 139,653 155,529 217,007 Less: Excess liquidity at the 682,868 482,503 612,325 Federal ReserveAdjusted tangible assets $ 4,283,037 $ 4,047,051 $ 3,601,481 Adjusted tangible common equity/ 7.66 % 7.76 % 8.09 %tangible assets

(unaudited) (unaudited) June 30, December 31, June 30, 2021 2020 2020Calculation of allowance / loans, net of PPP-related loans:Total allowance for credit losses $ 36,908 $ 34,340 $ 24,529 ^(2) Total loans net of unearned income $ 3,469,845 $ 3,371,789 $ 3,030,171 Less: PPP-related loans 139,653 155,529 217,007 Adjusted total loans, net ofunearned income, PPP-related loans $ 3,330,192 $ 3,216,260 $ 2,813,164 (non-GAAP) Adjusted allowance / loans, net of 1.11 % 1.07 % 0.87 %PPP-related loans (non-GAAP) ^(2)

Non-GAAP Reconciliations (1): (unaudited) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020Calculation ofnet interestmargin (fully tax equivalentbasis):Interest income(fully taxequivalent $ 43,836 $ 38,435 $ 88,454 $ 78,859 basis)(non-GAAP)Interest expense(fully taxequivalent 5,223 8,135 10,397 18,231 basis)(non-GAAP)Net interestincome (fullytax equivalent $ 38,613 $ 30,300 $ 78,057 $ 60,628 basis)(non-GAAP) Average total $ 4,734,660 $ 3,903,207 $ 4,622,299 $ 3,704,135 earning assetsLess: averagemark to market 9,238 21,665 13,246 16,936 adjustment oninvestmentsAdjusted averagetotal earningassets, net of $ 4,725,422 $ 3,881,542 $ 4,609,053 $ 3,687,199 mark to market(non-GAAP) Net interestmargin, fullytax equivalent 3.28 % 3.14 % 3.42 % 3.31 %basis (non-GAAP)(annualized)

Calculation of efficiency ratio:Non-interest expense $ 26,965 $ 22,199 $ 54,769 $ 43,941 Less: core deposit 28 69 56 152 intangible amortizationAdjusted non-interest $ 26,937 $ 22,130 $ 54,713 $ 43,789 expense (non-GAAP) Non-interest income $ 7,857 $ 7,949 $ 16,096 $ 13,313 Net interest income $ 38,305 $ 29,938 $ 77,426 $ 59,932 Less: tax exempt investmentand loan income, net of 1,221 1,440 2,525 2,976 TEFRA (non-GAAP)Add: tax exempt investmentand loan income (non-GAAP) 1,576 1,868 3,265 3,938 (tax-equivalent)Adjusted net interest income 38,660 30,366 78,166 60,894 (non-GAAP)Adjusted net revenue $ 46,517 $ 38,315 $ 94,262 $ 74,207 (non-GAAP) (tax-equivalent)Efficiency ratio 57.91 % 57.76 % 58.04 % 59.01 %

(unaudited) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020Calculation of PPNR: Net interest income $ 38,305 $ 29,938 $ 77,426 $ 59,932 Add: Non-interest income 7,857 7,949 16,096 13,313 Less: Non-interest expense 26,965 22,199 54,769 43,941 PPNR (non-GAAP) $ 19,197 $ 15,688 $ 38,753 $ 29,304

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020Calculation of return onaverage tangible common equity:Net income available to $ 12,915 $ 8,246 $ 26,021 $ 17,059 common stockholdersAverage tangible common 322,471 283,280 320,395 278,767 shareholders' equityReturn on average tangiblecommon equity (non-GAAP) 16.06 % 11.71 % 16.38 % 12.31 %(annualized)

(unaudited) (unaudited) Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020Calculation of non-interestincome excluding net realized gains on available-for-salesecurities:Non-interest income $ 7,857 $ 7,949 $ 16,096 $ 13,313 Less: net realized gains on 0 2,190 0 2,190 available-for-sale securitiesAdjusted non-interest income $ 7,857 $ 5,759 $ 16,096 $ 11,123

Contact: Tito L. LimaTreasurer(814) 765-9621