GlobeNewswire Inc | Oct 25, 2021 04:15PM EDT

October 25, 2021

CLEARFIELD, Pa., Oct. 25, 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 and nine months ended September 30, 2021.

Joseph B. Bower, Jr., President and CEO, stated, CNBs proven track record of organic loan growth over the last 20 years is serving shareholders well. Loan growth coupled with a disciplined approach to pricing are strong aides in fighting margin compression.

Mr. Bower went on to say, "This business model expansion in Roanoke, VA with Ridge View Bank is being very well received. We are exceeding projections in all categories in only five months of operation.

Executive Summary

-- Earnings per diluted share of $0.82 for the third quarter of 2021 increased 74.5% from the third quarter of 2020. Included in earnings per diluted share for the quarter ended September 30, 2020 was $0.23 per diluted share in merger costs related to CNB's acquisition of Bank of Akron, prepayment penalties and branch closure costs. -- At September 30, 2021, excluding the impact of PPP loans, net of PPP deferred processing fees (such loans, the "PPP-related loans"), the Corporation's loan portfolio had net growth of 6.5%, or 8.7% annualized, from December 31, 2020. The net organic growth for the first nine months of 2021 was $135.0 million, or 4.2% (5.6% annualized) primarily driven by the Corporation's continued expansion in the Cleveland, Buffalo and Ridge View regions, and Private Banking division. In addition, as part of the liquidity management strategies first implemented by the Corporation in 2020, the first nine months of 2021 reflect an increase in syndicated lending activities of $74.5 million. The syndicated loan portfolio totaled $96.6 million, or 2.8% of total loans, excluding PPP-related loans, at September 30, 2021. -- At September 30, 2021, the Corporation had $24.0 million in outstanding commercial and consumer loans with deferred loan payments related to the ongoing novel coronavirus, or COVID-19, pandemic, representing 0.7% of total loans. The Corporation believes that the majority of such loans will resume regular contractual payments by the end of 2021. -- As of September 30, 2021, the Corporation had outstanding $89.2 million in Paycheck Protection Program ("PPP") loans, or 869 PPP loan relationships and deferred PPP processing fees of approximately $3.8 million. -- At September 30, 2021, total deposits were $4.6 billion, an increase of 9.8%, or 13.2% 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 2.8%, or 3.8% annualized, from December 31, 2020. -- Total non-performing assets were $22.1 million, or 0.42%, of total assets, as of September 30, 2021 compared to $31.5 million, or 0.67% of total assets, as of December 31, 2020. In addition, for the three months ended September 30, 2021, net loan charge-offs were $778 thousand, or 0.09% of total average loans, compared to $948 thousand, or 0.11%, 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 Corporations 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 completed in June 2021.

Earnings Performance Highlights

-- Net income was $14.9 million, or $0.82 per diluted common share, for the quarter ended September 30, 2021, compared to $7.8 million, or $0.47 per diluted share, for the same period in 2020, reflecting increases of $7.1 million, or 91.5%, and $0.35 per diluted share, or 74.5%. Included in net income for the quarter ended September 30, 2020 was the after-tax impact of $3.8 million, or $0.23 per diluted share, in merger costs, prepayment penalties and branch closure costs. -- Net income was $43.1 million, or $2.36 per diluted common share, for the nine months ended September 30, 2021, compared to $24.8 million, or $1.57 per diluted share, for the same period in 2020, reflecting increases of $18.2 million, or 73.4%, and $0.79 per diluted share, or 50.3%. Included in net income for the nine months ended September 30, 2020 was the after-tax impact of $4.3 million, or $0.27 per diluted share, in merger costs, prepayment penalties and branch closure costs. -- Pre-provision net revenue ("PPNR") was $19.5 million for the three months ended September 30, 2021, compared to $13.1 million for the three months ended September 30, 2020, reflecting an increase of $6.4 million, or 49.2%.1 PPNR for the three months ended September 30, 2020 included $4.7 million in merger costs, prepayment penalties and branch closure costs. -- PPNR was $58.3 million for the nine months ended September 30, 2021, compared to $42.4 million for the nine months ended September 30, 2020, reflecting an increase of $15.9 million, or 37.5%.1 Included in PPNR for the nine months ended September 30, 2020 was $5.2 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

-- Loans totaled $3.5 billion as of September 30, 2021 reflecting an increase of $165.3 million, or 4.9%, from September 30, 2020, as a result of $210.4 million, or 6.7%, of net organic growth, primarily driven by the Corporation's continued expansion in the Cleveland, Buffalo and Ridge View regions and Private Banking division, and an increase in syndicated lending activities of approximately $92.5 million, partially offset by a $137.6 million decrease in PPP-related loans.Loans at September 30, 2021, excluding the impact of PPP-related loans, reflected net growth of $209.5 million, or 6.5% (8.7% annualized), from December 31, 2020, as discussed in the "Executive Summary" section above. -- Deposits totaled $4.6 billion as of September 30, 2021, an increase of $570.9 million, or 14.2%, from September 30, 2020, as a result of the increase in deposits across all of the Corporation's regions, as well as increases in deposits in its Private Banking division.At September 30, 2021, total deposits increased $411.9 million, or 9.8% (13.2% annualized), from December 31, 2020, as a result of organic growth and the impact of government stimulus initiatives. -- At September 30, 2021, the Corporations cash position was approximately $737.1 million, including excess liquidity of $682.5 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 September 30, 2021 was approximately $879.2 million. -- Book value per common share was $22.49 and $21.28 as of September 30, 2021 and 2020, respectively, while tangible book value per common share was $19.87 as of September 30, 2021, reflecting an increase of 6.9% from a tangible book value per common share of $18.58 as of September 30, 2020.1The increases in book value per common share and tangible book value per common share were primarily due to increases in retained earnings of $31.7 million, net of dividends, partially offset by an $11.3 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 September 30, 2021, the Corporation had outstanding $89.2 million in PPP loans, or 869 PPP loan relationships, at a rate of 1.00%, and deferred PPP processing fees of approximately $3.8 million. For the three and nine months ended September 30, 2021, the Corporation recognized $2.4 million and $6.8 million in deferred PPP processing fees ("PPP-related fees"), respectively. The outstanding balance of PPP loans at September 30, 2021 was (i) $522 thousand, or 23 loans from the Corporation's participation in the PPP in 2020, and (ii) $88.6 million, or 846 loans, from the Corporations participation in the PPP in the first nine 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 September 30, 2021, loans with deferred loan payment arrangements, totaled $24.0 million, or 0.7% of total loans outstanding, consisting of eight loans, totaling $23.9 million, for which principal and interest were deferred, and one loan, totaling $20 thousand, for which principal only was deferred. The Corporation believes that the majority of such loans will resume regular contractual payments by the end of 2021. Loan payment deferrals by loan type were as follows: Commercial and industrial loans 3 loans, totaling $4.5 million;Commercial real estate loans 2 loans, totaling $18.9 million;Residential mortgage loans 3 loans, totaling $602 thousand; andConsumer loans 1 loan, totaling $9 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 September 30, 2021, the Corporation had loan concentrations for these industries as follows:Hotels/Motels $199.7 million, or 5.8% of total loans outstanding, excluding PPP-related loans; andRestaurants/Fast Foods $31.2 million, or 0.9% of total loans outstanding, excluding PPP-related loans.

Performance Ratios

-- Annualized return on average equity was 13.51% for the three months ended September 30, 2021, compared to 8.28% for the three months ended September 30, 2020. Annualized return on average tangible equity was 15.03% for the three months ended September 30, 2021, compared to 9.39% for the three months ended September 30, 2020.1 Annualized return on average tangible common equity was 16.34% and 10.08% for the same periods in 2021 and 2020, respectively.1 Excluding after-tax merger costs, prepayment penalties and branch closure costs, annualized adjusted return on average equity, average tangible equity and average tangible common equity were 12.32%, 13.98% and 15.00% for the three months ended September 30, 2020.1 -- Annualized return on average equity was 13.46% for the nine months ended September 30, 2021, compared to 9.77% for the nine months ended September 30, 2020. Annualized return on average tangible equity was 15.01% for the nine months ended September 30, 2021, compared to 11.10% for the nine months ended September 30, 2020.1 Annualized return on average tangible common equity was 16.35% and 11.39% for the same periods in 2021 and 2020, respectively.1 Excluding after-tax merger costs, prepayment penalties and branch closure costs, annualized adjusted return on average equity, average common equity and average tangible common equity were 11.47%, 13.03% and 13.37% for the nine months ended September 30, 2020.1 -- Efficiency ratio was 59.47% for the three months ended September 30, 2021, compared to 67.71% for the comparable period in 2020.1 Included in the efficiency ratio for the three months ended September 30, 2020 was $4.7 million in merger costs, prepayment penalties and branch closure costs. -- Efficiency ratio was 58.53% for the nine months ended September 30, 2021, compared to 62.15% for the comparable period in 2020.1 The efficiency ratio for the nine months ended September 30, 2020 included $5.2 million in merger costs, prepayment penalties and branch closure costs.

Revenue

-- Total revenue (comprised of net interest income plus non-interest income) was $48.7 million for the three months ended September 30, 2021, an increase of $7.3 million, or 17.5%, from the three months ended September 30, 2020, primarily due to the following:Net interest income of $40.3 million for the three months ended September 30, 2021, an increase of $5.6 million, or 16.2%, from the three months ended September 30, 2020, primarily as a result of loan growth, various deposit pricing and liquidity strategies and PPP-related fees, which were approximately $2.4 million for the three months ended September 30, 2021, compared to $683 thousand for the three months ended September 30, 2020.Net interest margin on a fully tax-equivalent basis was 3.30% and 3.15% for the three months ended September 30, 2021 and 2020, respectively.1The yield on earning assets of 3.72% for the three months ended September 30, 2021 decreased 12 basis points from 3.84% for the three months ended September 30, 2020, primarily as a result of the lower interest rate environment and higher level of excess cash at the Federal Reserve. The cost of interest-bearing liabilities decreased 31 basis points from 0.83% for the three months ended September 30, 2020 to 0.52% for the three months ended September 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 $142.2 million for the nine months ended September 30, 2021, an increase of $27.5 million, or 24.0%, from the nine months ended September 30, 2020, primarily due to the following:Net interest income of $117.7 million for the nine months ended September 30, 2021, an increase of $23.1 million, or 24.4%, from the nine months ended September 30, 2020, primarily as a result of loan growth, various deposit pricing and liquidity strategies and PPP-related fees, which totaled for the nine months ended September 30, 2021 approximately $6.8 million, compared to $683 thousand for the nine months ended September 30, 2020.Net interest margin on a fully tax-equivalent basis was 3.37% and 3.25% for the nine months ended September 30, 2021 and 2020, respectively.1The yield on earning assets of 3.81% for the nine months ended September 30, 2021 decreased 32 basis points from 4.13% for the nine months ended September 30, 2020, primarily as a result of the lower interest rate environment and higher level of excess cash at the Federal Reserve. The cost of interest-bearing liabilities decreased 49 basis points from 1.04% for the nine months ended September 30, 2020 to 0.55% for the nine months ended September 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 $8.4 million for the three months ended September 30, 2021, an increase of $1.6 million, or 24.1%, from the same period in 2020. During the three months ended September 30, 2021, Wealth and Asset Management fees increased $320 thousand, or 22.6%, compared to the three months ended September 30, 2020. Other significant improvements during the three months ended September 30, 2021 included increased income from investments in Small Business Investment Company ("SBIC") funds, charges on deposits and card processing and interchange income, resulting from increased business activity. -- Total non-interest income was $24.5 million for the nine months ended September 30, 2021 compared to $20.1 million from the same period in 2020, reflecting an increase of $4.4 million, or 22.0%. Included in non-interest income for the nine months ended September 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 for the nine months ended September 30, 2020, total non-interest income for the nine months ended September 30, 2021, increased $6.6 million, or 36.9%, 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 $94.4 million, or 8.2%, from September 30, 2020, to $1.2 billion as of September 30, 2021. Other significant factors that contributed to the increase included mortgage banking, income from investments in SBIC funds, 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 September 30, 2021, total non-interest expense was $29.2 million, reflecting an increase of $831 thousand, or 2.9%, from the three months ended September 30, 2020. Included in non-interest expense for the three months ended September 30, 2020 is $4.7 million in merger costs, prepayment penalties and branch closure costs. In addition, the third quarter of 2021 included the expenses related to hiring additional personnel in the Corporation's growth regions of Cleveland, Buffalo and Ridge View. Also, the third quarter of 2021 included investments in technology aimed at enhancing customer experience. -- For the nine months ended September 30, 2021, total non-interest expense was $84.0 million, an increase of $11.7 million, or 16.1%, from the nine months ended September 30, 2020. Included in non-interest expense for the nine months ended September 30, 2020 was $5.2 million in merger costs, prepayment penalties and branch closure costs. In addition, the first nine months of 2021 included expenses related to hiring additional personnel in the Corporation's growth regions of Cleveland, Buffalo and Ridge View. Also, the first nine 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 was $3.5 million, representing a 19.0% effective tax rate, and $2.0 million, representing a 20.3% effective tax rate, for the three months ended September 30, 2021 and 2020, respectively. The decrease in the effective tax rate was primarily attributable to the change in mix of taxable and tax-exempt activities. -- Income tax expense was $10.0 million, representing a 18.8% effective tax rate, and $5.5 million, representing a 18.0% effective tax rate, for the nine months ended September 30, 2021 and 2020, respectively. Included in the 18.0% effective tax rate for the nine month ended September 30, 2020 were merger costs, prepayment penalties and branch closure costs, which reduced the effective tax rate.

Asset Quality

-- Total non-performing assets were $22.1 million, or 0.42%, of total assets, as of September 30, 2021, compared to $31.5 million, or 0.67%, as of December 31, 2020 and $28.0 million, or 0.59% as of September 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 September 30, 2021. Total loans at September 30, 2021 include approximately $85.4 million in PPP-related loans. Excluding PPP-related loans, the allowance for credit losses measured as a percentage of loans was 1.09% as of September 30, 2021 compared to 1.07% as of December 31, 2020 and 0.86% as of September 30, 2020.1 -- For the three months ended September 30, 2021, net loan charge-offs were $778 thousand, or 0.09% of total average loans, compared to $948 thousand, or 0.11%, of total average loans, during the comparable period in 2020. -- For the nine months ended September 30, 2021, net loan charge-offs were $2.3 million, or 0.09% of total average loans, compared to $4.7 million, or 0.20%, of total average loans, during the comparable period in 2020. The second quarter of 2020 included a charge-off of approximately $2.6 million related to a secured commercial and industrial loan relationship with a borrower who is deceased.

Capital

-- As of September 30, 2021, the Corporations total shareholders equity was $437.7 million, an increase of $21.8 million, or 5.2%, from September 30, 2020 primarily as a result of 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 nine months ended September 30, 2021. -- As of September 30, 2021, with the exception of the leverage ratio remaining unchanged at 8.11%, all of the Corporations regulatory capital ratios increased from December 31, 2020. The leverage ratio as of September 30, 2021 remained consistent as retained earnings supported the increase in excess liquidity from December 31, 2020. -- As of September 30, 2021, the Corporations ratio of tangible equity to tangible assets and tangible common equity to tangible assets of 7.56% and 6.45%, respectively, reflected the impact of approximately $85.4 million in PPP-related loans as well as the Corporation's significant excess liquidity. Excluding PPP-related loans and excess liquidity of $682.5 million at September 30, 2021, the Corporations adjusted ratios of tangible equity to tangible assets and tangible common equity to tangible assets of 8.87% and 7.57%, respectively, represent a decrease from the September 30, 2020 adjusted ratios of 9.36% and 7.90%, respectively, primarily as a result of the adoption of CECL and 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 $5.2 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 44 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 western 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 Nine Months Ended September 30, September 30, % % 2021 2020 change 2021 2020 changeIncome Statement Interest income $ 45,448 $ 42,356 7.3 % $ 133,271 $ 120,519 10.6 %Interest expense 5,153 7,692 (33.0 )% 15,550 25,923 (40.0 )%Net interest 40,295 34,664 16.2 % 117,721 94,596 24.4 %incomeProvision for 1,100 3,306 (66.7 )% 5,189 12,065 (57.0 )%credit losses ^(2)Net interestincome after 39,195 31,358 25.0 % 112,532 82,531 36.4 %provision forcredit losses Non-interest incomeService charges on 1,595 1,201 32.8 % 4,389 3,652 20.2 %deposit accountsOther service 614 652 (5.8 )% 1,705 1,848 (7.7 )%charges and feesWealth and asset 1,734 1,414 22.6 % 5,021 4,081 23.0 %management feesNet realized gainson 0 0 NA 0 2,190 NA available-for-salesecuritiesNet realized andunrealized gains 7 202 (96.5 )% 477 (80 ) (696.3 )%(losses) ontrading securitiesMortgage banking 844 1,089 (22.5 )% 2,615 2,090 25.1 %Bank owned life 558 425 31.3 % 2,002 1,290 55.2 %insuranceCard processingand interchange 1,958 1,606 21.9 % 5,871 4,059 44.6 %incomeOther 1,104 189 484.1 % 2,430 961 152.9 %Total non-interest 8,414 6,778 24.1 % 24,510 20,091 22.0 %incomeNon-interest expensesSalaries and 15,351 12,508 22.7 % 43,442 34,578 25.6 %benefitsNet occupancyexpense of 2,950 2,870 2.8 % 9,154 8,942 2.4 %premisesFDIC insurance 647 726 (10.9 )% 1,820 1,966 (7.4 )%premiumsCore DepositIntangible 26 26 0.0 % 82 178 (53.9 )%amortizationCard processingand interchange 728 804 (9.5 )% 2,816 2,192 28.5 %expensesMerger costs,prepaymentpenalties and 0 4,673 NA 0 5,207 NA branch closurecostsOther 9,497 6,761 40.5 % 26,654 19,246 38.5 %Total non-interest 29,199 28,368 2.9 % 83,968 72,309 16.1 %expenses Income before 18,410 9,768 88.5 % 53,074 30,313 75.1 %income taxesIncome tax expense 3,503 1,983 76.7 % 9,996 5,469 82.8 %Net income 14,907 7,785 91.5 % 43,078 24,844 73.4 %Preferred stock 1,076 0 NA 3,226 0 NA dividendsNet incomeavailable to $ 13,831 $ 7,785 77.7 % $ 39,852 $ 24,844 60.4 %commonstockholders Average dilutedcommon shares 16,832,932 16,569,440 16,818,945 15,734,847 outstanding Diluted earnings $ 0.82 $ 0.47 74.5 % $ 2.36 $ 1.57 50.3 %per common shareCash dividends per $ 0.17 $ 0.17 0.0 % $ 0.51 $ 0.51 0.0 %common share Dividend payout 21 % 36 % 22 % 32 % ratio (unaudited) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Average Balances Loans $ 3,478,560 $ 3,283,850 $ 3,433,963 $ 3,034,990 Investment 704,323 576,257 654,348 569,783 securitiesTotal earning 4,889,774 4,441,326 4,712,741 3,951,669 assetsTotal assets 5,187,023 4,715,159 4,996,944 4,205,339 Noninterest-bearing 744,563 587,405 703,777 479,414 depositsInterest-bearing 3,789,849 3,378,547 3,698,917 3,007,889 depositsShareholders' 437,822 374,091 427,919 339,560 equityTangibleshareholders' 393,571 329,859 383,641 298,922 equityTangible commonshareholders' 335,786 307,257 325,856 291,333 equity ^(1) Average Yields Loans 4.82 % 4.76 % 4.84 % 4.88 % Investment 1.83 % 2.32 % 1.87 % 2.67 % securitiesTotal earning 3.72 % 3.84 % 3.81 % 4.13 % assetsInterest-bearing 0.36 % 0.66 % 0.43 % 0.86 % depositsInterest-bearing 0.52 % 0.83 % 0.55 % 1.04 % liabilities Performance Ratios (annualized)Return on average 1.14 % 0.66 % 1.15 % 0.79 % assetsReturn on average 13.51 % 8.28 % 13.46 % 9.77 % equityReturn on averageequity, net ofmerger costs,prepayment 13.51 % 12.32 % 13.46 % 11.47 % penalties andbranch closurecosts ^(1)Return on average 15.03 % 9.39 % 15.01 % 11.10 % tangible equityReturn on averagetangible equity,net of mergercosts, prepayment 15.03 % 13.98 % 15.01 % 13.03 % penalties andbranch closurecosts ^(1)Return on averagetangible common 16.34 % 10.08 % 16.35 % 11.39 % equity ^(1)Return on averagetangible commonequity, net ofmerger costs, 16.34 % 15.00 % 16.35 % 13.37 % prepaymentpenalties andbranch closurecosts ^(1)Net interestmargin, fully tax 3.30 % 3.15 % 3.37 % 3.25 % equivalent basis ^(1)Efficiency Ratio ^ 59.47 % 67.71 % 58.53 % 62.15 % (1) Net Loan Charge-OffsCNB Bank net loan $ 539 $ 719 $ 1,621 $ 3,560 charge-offsHoliday Financialnet loan 239 229 678 1,091 charge-offsTotal net loan $ 778 $ 948 $ 2,299 $ 4,651 charge-offs Net loancharge-offs / 0.09 % 0.11 % 0.09 % 0.20 % average loans

(unaudited) (unaudited) % % change change September 30, December 31, September 30, versus versus 2021 2020 2020 12/31/ 09/30/20 20Ending Balance SheetLoans $ 3,511,125 $ 3,371,789 $ 3,345,810 4.1 % 4.9 %Loans held for 3,415 8,514 3,668 (59.9 ) (6.9 )sale % %Investment 742,734 591,557 591,021 25.6 % 25.7 %securitiesFHLB and other 3,126 2,899 9,369 7.8 % (66.6 )equity interests %Other earning 687,153 488,326 513,851 40.7 % 33.7 %assetsTotal earning 4,947,553 4,463,085 4,463,719 10.9 % 10.8 %assets Allowance forcredit losses ^ (37,230 ) (34,340 ) (26,887 ) 8.4 % 38.5 %(2)Goodwill 43,749 43,749 44,775 0.0 % (2.3 ) %Core deposit 485 567 595 (14.5 ) (18.5 )intangible % %Other assets 291,729 256,338 252,273 13.8 % 15.6 %Total assets $ 5,246,286 $ 4,729,399 $ 4,734,475 10.9 % 10.8 % Noninterest-bearing $ 774,851 $ 627,114 $ 602,902 23.6 % 28.5 %depositsInterest-bearing 3,818,777 3,554,630 3,419,803 7.4 % 11.7 %depositsTotal deposits 4,593,628 4,181,744 4,022,705 9.8 % 14.2 % Borrowings 0 0 169,327 NA (100.0 ) %Subordinateddebt, net of 154,212 70,620 70,620 118.4 % 118.4 %issuance costsOther 60,757 60,898 55,920 (0.2 ) 8.6 %liabilities % Common stock 0 0 0 NA NA Preferred stock 57,785 57,785 57,760 NA NA Additional paid 127,124 127,518 127,231 (0.3 ) (0.1 )in capital % %Retained 249,978 218,727 218,239 14.3 % 14.5 %earningsTreasury stock (1,535 ) (2,967 ) (2,966 ) (48.3 ) (48.2 ) % %Accumulatedother 4,337 15,074 15,639 (71.2 ) (72.3 )comprehensive % %income (loss)Totalshareholders' 437,689 416,137 415,903 5.2 % 5.2 %equity Totalliabilities and $ 5,246,286 $ 4,729,399 $ 4,734,475 10.9 % 10.8 %shareholders'equity Ending shares 16,889,694 16,833,008 16,833,090 outstanding Book value per $ 22.49 $ 21.29 $ 21.28 5.6 % 5.7 %common shareTangible bookvalue per common $ 19.87 $ 18.66 $ 18.58 6.5 % 6.9 %share ^(1) Capital Ratios Tangible commonequity / 6.45 % 6.70 % 6.67 % tangible assets^(1)Tangible commonequity /tangible assets,net ofPPP-related 7.57 % 7.76 % 7.90 % loans and excessliquidity at theFederal Reserve^(1)Tangible equity/ tangible 7.56 % 7.94 % 7.90 % assets ^(1)Tangible equity/ tangibleassets, net ofPPP-related 8.87 % 9.19 % 9.36 % loans and excessliquidity at theFederal Reserve^(1)Tier 1 leverage 8.11 % 8.11 % 8.20 % ratio ^(4)Common equitytier 1 ratio ^ 9.80 % 9.50 % 9.57 % (4)Tier 1 risk 12.05 % 11.91 % 12.05 % based ratio^ (4)Total risk based 16.76 % 14.32 % 14.51 % ratio^ (4) Asset Quality Non-accrual $ 20,004 $ 30,359 $ 26,844 loans^(3)Loans 90+ dayspast due and 724 325 265 accruingTotalnon-performing 20,728 30,684 27,109 loansOther real 1,359 862 877 estate ownedTotalnon-performing $ 22,087 $ 31,546 $ 27,986 assets Loans modifiedin a troubleddebt restructuring(TDR):Performing TDR $ 9,034 $ 10,457 $ 7,329 loansNon-performing 6,268 4,631 3,641 TDR loans ^(3)Total TDR loans $ 15,302 $ 15,088 $ 10,970 Non-performingassets / Loans + 0.63 % 0.94 % 0.84 % OREONon-performingassets / Total 0.42 % 0.67 % 0.59 % assetsAllowance forcredit losses / 1.06 % 1.02 % 0.80 % Loans ^(2)Allowance forcredit losses /Loans, net of 1.09 % 1.07 % 0.86 % PPP-relatedloans^ (1) (2) ^(1) Management uses non-GAAP financial information in itsanalysis of the Corporation?s performance. Management believesthat these non-GAAP measures provide a greater understandingof ongoing operations, enhance comparability of results ofoperations with prior periods and show the effects ofsignificant gains and charges in the periods presented. TheCorporation?s management believes that investors may use thesenon-GAAP measures to analyze the Corporation?s financialperformance without the impact of unusual items or events thatmay obscure trends in the Corporation?s underlying performance. This non-GAAP data should be considered inaddition to results prepared in accordance with GAAP, and isnot a substitute for, or superior to, GAAP results.Limitations associated with non-GAAP financial measuresinclude the risks that persons might disagree as to theappropriateness of items included in these measures and thatdifferent companies might calculate these measuresdifferently. A reconciliation of these non-GAAP financialmeasures is provided below (dollars in thousands, except pershare 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 September 30, 2021 are estimated.

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) September 30, December 31, September 30, 2021 2020 2020Calculation of tangible book valueper share and tangible common equity/tangible assets:Shareholders' equity $ 437,689 $ 416,137 $ 415,903 Less: preferred equity 57,785 57,785 57,760 Less: goodwill 43,749 43,749 44,775 Less: core deposit intangible 485 567 595 Tangible common equity $ 335,670 $ 314,036 $ 312,773 Total assets $ 5,246,286 $ 4,729,399 $ 4,734,475 Less: goodwill 43,749 43,749 44,775 Less: core deposit intangible 485 567 595 Tangible assets $ 5,202,052 $ 4,685,083 $ 4,689,105 Ending shares outstanding 16,889,694 16,833,008 16,833,090 Tangible book value per common $ 19.87 $ 18.66 $ 18.58 shareTangible common equity/Tangible 6.45 % 6.70 % 6.67 %assets Calculation of tangible equity/ tangible assets:Shareholders' equity $ 437,689 $ 416,137 $ 415,903 Less: goodwill 43,749 43,749 44,775 Less: core deposit intangible 485 567 595 Tangible equity $ 393,455 $ 371,821 $ 370,533 Tangible assets $ 5,202,052 $ 4,685,083 $ 4,689,105 Tangible equity/Tangible assets 7.56 % 7.94 % 7.90 % Calculation of tangible commonequity/tangible assets, net of PPP-related loans and excessliquidity at the Federal Reserve:Tangible common equity $ 335,670 $ 314,036 $ 312,773 Tangible assets $ 5,202,052 $ 4,685,083 $ 4,689,105 Less: PPP-related loans 85,354 155,529 222,972 Less: Excess liquidity at the 682,475 482,503 508,072 Federal ReserveAdjusted tangible assets $ 4,434,223 $ 4,047,051 $ 3,958,061 Adjusted tangible common equity/ 7.57 % 7.76 % 7.90 %tangible assets Calculation of tangible equity/tangible assets, net of PPP-related loans and excessliquidity at the Federal Reserve:Tangible equity $ 393,455 $ 371,821 $ 370,533 Adjusted tangible assets $ 4,434,223 $ 4,047,051 $ 3,958,061 Adjusted tangible equity/tangible 8.87 % 9.19 % 9.36 %assets

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) September 30, December 31, September 30, 2021 2020 2020Calculation of allowance / loans, net of PPP-related loans:Total allowance for credit losses $ 37,230 $ 34,340 $ 26,887 ^(2) Total loans net of unearned income $ 3,511,125 $ 3,371,789 $ 3,345,810 Less: PPP-related loans 85,354 155,529 222,972 Adjusted total loans, net ofunearned income, PPP-related loans $ 3,425,771 $ 3,216,260 $ 3,122,838 (non-GAAP) Adjusted allowance / loans, net of 1.09 % 1.07 % 0.86 %PPP-related loans (non-GAAP) ^(2)

Non-GAAP Reconciliations (1): (unaudited) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Calculationof netinterestmargin (fully taxequivalentbasis):Interestincome (fullytax $ 45,745 $ 42,692 $ 133,963 $ 121,551 equivalentbasis)(non-GAAP)Interestexpense(fully tax 5,153 7,692 15,550 25,923 equivalentbasis)(non-GAAP)Net interestincome (fullytax $ 40,592 $ 35,000 $ 118,413 $ 95,628 equivalentbasis)(non-GAAP) Average totalearning $ 4,889,774 $ 4,441,326 $ 4,712,741 $ 3,951,669 assetsLess: averagemark tomarket 10,029 21,859 10,879 18,589 adjustment oninvestmentsAdjustedaverage totalearningassets, net $ 4,879,745 $ 4,419,467 $ 4,701,862 $ 3,933,080 of mark tomarket(non-GAAP) Net interestmargin, fullytaxequivalent 3.30 % 3.15 % 3.37 % 3.25 %basis(non-GAAP)(annualized)

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Calculation of efficiency ratio:Non-interest expense $ 29,199 $ 28,368 $ 83,968 $ 72,309 Less: core deposit 26 26 82 178 intangible amortizationAdjusted non-interest $ 29,173 $ 28,342 $ 83,886 $ 72,131 expense (non-GAAP) Non-interest income $ 8,414 $ 6,778 $ 24,510 $ 20,091 Net interest income $ 40,295 $ 34,664 $ 117,721 $ 94,596 Less: tax exemptinvestment and loan 1,185 1,375 3,710 4,351 income, net of TEFRA(non-GAAP)Add: tax exemptinvestment and loan 1,532 1,792 4,796 5,730 income (non-GAAP)(tax-equivalent)Adjusted net interest 40,642 35,081 118,807 95,975 income (non-GAAP)Adjusted net revenue(non-GAAP) $ 49,056 $ 41,859 $ 143,317 $ 116,066 (tax-equivalent)Efficiency ratio 59.47 % 67.71 % 58.53 % 62.15 %

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Calculation of PPNR: Net interest income $ 40,295 $ 34,664 $ 117,721 $ 94,596 Add: Non-interest income 8,414 6,778 24,510 20,091 Less: Non-interest 29,199 28,368 83,968 72,309 expensePPNR (non-GAAP) $ 19,510 $ 13,074 $ 58,263 $ 42,378

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Calculation ofadjusted return on average equity:Net income $ 14,907 $ 7,785 $ 43,078 $ 24,844 Add: merger costs,prepayment penalties 0 3,803 0 4,322 and branch closurecosts (net of tax)Adjusted net income $ 14,907 $ 11,588 $ 43,078 $ 29,166 Average shareholders' $ 437,822 $ 374,091 $ 427,919 $ 339,560 equityAdjusted return on 13.51 % 12.32 % 13.46 % 11.47 %average equity

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Calculation of return on average tangible equity:Net income $ 14,907 $ 7,785 $ 43,078 $ 24,844 Average tangible 393,571 329,859 383,641 298,922 shareholders' equityReturn on averagetangible equity 15.03 % 9.39 % 15.01 % 11.10 %(non-GAAP) (annualized) Calculation of adjustedreturn on average common equity:Net income available to $ 14,907 $ 7,785 $ 43,078 $ 24,844 common stockholdersAdd: merger costs,prepayment penalties and 0 3,803 0 4,322 branch closure costs (netof tax)Adjusted net incomeavailable to common $ 14,907 $ 11,588 $ 43,078 $ 29,166 stockholdersAverage common 393,571 329,859 383,641 298,922 shareholders' equityAdjusted return onaverage common equity 15.03 % 13.98 % 15.01 % 13.03 %(non-GAAP) (annualized)

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Calculation of return onaverage tangible common equity:Net income available to $ 13,831 $ 7,785 $ 39,852 $ 24,844 common stockholdersAverage tangible common 335,786 307,257 325,856 291,333 shareholders' equityReturn on averagetangible common equity 16.34 % 10.08 % 16.35 % 11.39 %(non-GAAP) (annualized) Calculation of adjustedreturn on average tangible common equity:Net income available to $ 13,831 $ 7,785 $ 39,852 $ 24,844 common stockholdersAdd: merger costs,prepayment penalties and 0 3,803 0 4,322 branch closure costs (netof tax)Adjusted net incomeavailable to common $ 13,831 $ 11,588 $ 39,852 $ 29,166 stockholdersAverage tangible common 335,786 307,257 325,856 291,333 shareholders' equityAdjusted return onaverage tangible common 16.34 % 15.00 % 16.35 % 13.37 %equity (non-GAAP)(annualized)

Non-GAAP Reconciliations ^(1): (unaudited) (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Calculation of non-interestincome excluding netrealized gains on available-for-salesecurities:Non-interest income $ 8,414 $ 6,778 $ 24,510 $ 20,091 Less: net realized gains onavailable-for-sale 0 0 0 2,190 securitiesAdjusted non-interest $ 8,414 $ 6,778 $ 24,510 $ 17,901 income



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