GlobeNewswire Inc | Jan 24, 2022 04:29PM EST

January 24, 2022

CLEARFIELD, Pa., Jan. 24, 2022 (GLOBE NEWSWIRE) -- CNB Financial Corporation (CNB or the Corporation) (NASDAQ: CCNE), the parent company of CNB Bank, today announced its earnings for the quarter and year ended December 31, 2021.

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

Executive Summary

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

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

-- At December 31, 2021, excluding the impact of Paycheck Protection Program ("PPP") loans, net of PPP deferred processing fees (such loans, the "PPP-related loans"), the Corporation's loan portfolio totaled $3.6 billion, representing an increase of $373.3 million, or 11.6%, from December 31, 2020. The growth was primarily driven by the Corporation's ongoing expansion in the Cleveland and Ridge View regions, combined with continued strong growth in its Private Banking division, and increased lending opportunities in other regions of the Corporation.Included in the loan growth discussed above, and as part of the liquidity management strategies first implemented by the Corporation in 2020, the year ended December 31, 2021 reflected an increase in syndicated lending activities of $103.7 million from December 31, 2020. The syndicated loan portfolio totaled $125.8 million, or 3.5% of total loans, excluding PPP-related loans, at December 31, 2021.

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

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

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

Earnings Performance Highlights

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

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

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

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

Balance Sheet and Liquidity Highlights

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

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

Customer Support Strategies and Loan Portfolio Profile

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

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

Performance Ratios

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

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

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

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

Revenue

-- Total revenue (comprised of net interest income plus non-interest income) was $193.2 million for the year ended December 31, 2021, an increase of $30.4 million, or 18.7%, from the year ended December 31, 2020, primarily due to the following:Net interest income of $159.8 million for the year ended December 31, 2021, increased $25.1 million, or 18.6%, from the year ended December 31, 2020, primarily as a result of loan growth, various deposit pricing and liquidity strategies. Included in net interest income were PPP-related fees, which totaled approximately $8.7 million for the year ended December 31, 2021, compared to $5.1 million for the year ended December 31, 2020.Net interest margin on a fully tax-equivalent basis was 3.38% and 3.34% for the year ended December 31, 2021 and 2020, respectively.1The yield on earning assets of 3.79% for the year ended December 31, 2021 decreased 35 basis points from 4.14% for the year ended December 31, 2020, primarily as a result of the lower interest rate environment and higher level of excess cash at the Federal Reserve, partially offset by higher PPP-related fees. The cost of interest-bearing liabilities decreased 43 basis points from 0.95% for the year ended December 31, 2020 to 0.52% for the year ended December 31, 2021, primarily as a result of the Corporations targeted deposit rate reductions and the prepayment of the Corporation's remaining FHLB borrowings, which were approximately $160 million at a weighted average interest rate of 2.24%, in the fourth quarter of 2020.

-- Total revenue (comprised of net interest income plus non-interest income) was $51.0 million for the three months ended December 31, 2021, an increase of $2.9 million, or 6.0%, from the three months ended December 31, 2020, primarily due to the following:Net interest income of $42.1 million for the three months ended December 31, 2021, reflecting an increase of $1.9 million, or 4.8%, from the three months ended December 31, 2020, primarily as a result of loan growth and various deposit pricing and liquidity strategies, partially offset by a decrease in PPP-related fees, which were approximately $1.9 million for the three months ended December 31, 2021, compared to $4.5 million for the three months ended December 31, 2020.Net interest margin on a fully tax-equivalent basis was 3.41% and 3.58% for the three months ended December 31, 2021 and 2020, respectively.1The yield on earning assets of 3.75% for the three months ended December 31, 2021 decreased 41 basis points from 4.16% for the three months ended December 31, 2020, primarily as a result of the lower interest rate environment, a higher level of excess cash at the Federal Reserve, and lower PPP-related fees. The cost of interest-bearing liabilities decreased 28 basis points from 0.71% for the three months ended December 31, 2020 to 0.43% for the three months ended December 31, 2021, primarily as a result of the Corporations targeted deposit rate reductions and the prepayment of the Corporation's remaining FHLB borrowings in the fourth quarter of 2020.

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

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

Non-Interest Expense

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

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

Income Taxes

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

Asset Quality

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

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

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

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

Capital

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

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

-- As of December 31, 2021, the Corporations ratio of tangible equity to tangible assets and tangible common equity to tangible assets of 7.54% and 6.45%, respectively, reflected the impact of approximately $45.2 million in PPP-related loans as well as the Corporation's significant excess liquidity. Excluding PPP-related loans and excess liquidity of $684.3 million at December 31, 2021, the Corporations adjusted ratios of tangible equity to tangible assets and tangible common equity to tangible assets of 8.75% and 7.48%, respectively, represent a decrease from the December 31, 2020 adjusted ratios of 9.19% and 7.76%, respectively, primarily as a result of the decrease in accumulated other comprehensive income, partially offset by increases in retained earnings, net of dividends.1

About CNB Financial Corporation

CNB Financial Corporation is a financial holding company with consolidated assets of approximately $5.3 billion. CNB Financial Corporation conducts business primarily through its principal subsidiary, CNB Bank. CNB Bank is a full-service bank engaging in a full range of banking activities and services, including trust and wealth management services, for individual, business, governmental, and institutional customers. CNB Bank operations include a private banking division, three loan production offices, one drive-up office and 45 full-service offices in Pennsylvania, Ohio, New York and Virginia. CNB 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 loan production offices in the Roanoke, Virginia region. CNB Bank is headquartered in Clearfield, Pennsylvania, with offices in central and north central Pennsylvania. Additional information about CNB Financial Corporation may be found at www.CNBBank.bank.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to 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, severity and scope of the COVID-19 pandemic and its impact on our customers and demand for financial services; (ii) actions governments, businesses and individuals take in response to the pandemic; (iii) the direct and indirect economic effects of the pandemic and containment measures; (iv) treatment developments, public adoption rates of COVID-19 vaccines, including booster shots, and their effectiveness against emerging variants of COVID-19, including the Delta and Omicron variants; (v) the pace of recovery when the COVID-19 pandemic subsides; (vi) changes in general business, industry or economic conditions or competition; (vii) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (viii) adverse changes or conditions in capital and financial markets; (ix) changes in interest rates; (x) higher than expected costs or other difficulties related to integration of combined or merged businesses; (xi) the effects of business combinations and other acquisition transactions, including the inability to realize our loan and investment portfolios; (xii) changes in the quality or composition of our loan and investment portfolios; (xiii) adequacy of loan loss reserves; (xiv) increased competition; (xv) loss of certain key officers; (xvi) deposit attrition; (xvii) rapidly changing technology; (xviii) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xix) changes in the cost of funds, demand for loan products or demand for financial services; and (xx) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices. Such developments could have an adverse impact on CNB's financial position and results of operations. For more information about factors that could cause actual results to differ from those discussed in the forward-looking statements, please refer to the Risk Factors and 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) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) % % 2021 2020 change 2021 2020 changeIncome Statement Interest income $ 46,329 $ 46,648 (0.7 )% $ 179,600 $ 167,167 7.4 %Interest expense 4,270 6,533 (34.6 )% 19,820 32,456 (38.9 )%Net interest 42,059 40,115 4.8 % 159,780 134,711 18.6 %incomeProvision for 814 3,289 (75.3 )% 6,003 15,354 (60.9 )%credit lossesNet interestincome after 41,245 36,826 12.0 % 153,777 119,357 28.8 %provision forcredit losses Non-interest incomeService charges on 1,806 1,443 25.2 % 6,195 5,095 21.6 %deposit accountsOther service 731 700 4.4 % 2,436 2,548 (4.4 )%charges and feesWealth and asset 1,719 1,416 21.4 % 6,740 5,497 22.6 %management feesNet realized gainson 783 0 NA 783 2,190 NA available-for-salesecuritiesNet realized andunrealized gains 313 408 (23.3 )% 790 328 140.9 %(losses) ontrading securitiesMortgage banking 532 1,264 (57.9 )% 3,147 3,354 (6.2 )%Bank owned life 636 457 39.2 % 2,638 1,747 51.0 %insuranceCard processingand interchange 1,925 1,668 15.4 % 7,796 5,727 36.1 %incomeOther 479 612 (21.7 )% 2,909 1,573 84.9 %Total non-interest 8,924 7,968 12.0 % 33,434 28,059 19.2 %incomeNon-interest expensesSalaries and 17,733 14,145 25.4 % 61,175 48,723 25.6 %benefitsNet occupancyexpense of 3,227 3,391 (4.8 )% 12,381 12,333 0.4 %premisesTechnology expense 3,271 2,436 34.3 % 11,723 7,153 63.9 %State and local 961 931 3.2 % 4,057 3,340 21.5 %taxesLegal,professional, and 732 1,063 (31.1 )% 3,517 2,990 17.6 %examination feesFDIC insurance 689 448 53.8 % 2,509 2,414 3.9 %premiumsCore DepositIntangible 25 28 (10.7 )% 107 206 (48.1 )%amortizationCard processingand interchange 1,020 943 8.2 % 3,836 3,135 22.4 %expensesMerger costs,prepaymentpenalties and 0 7,435 NA 0 12,642 NA branch closurecostsOther 4,807 4,197 14.5 % 17,128 14,390 19.0 %Total non-interest 32,465 35,017 (7.3 )% 116,433 107,326 8.5 %expenses Income before 17,704 9,777 81.1 % 70,778 40,090 76.5 %income taxesIncome tax expense 3,075 1,878 63.7 % 13,071 7,347 77.9 %Net income 14,629 7,899 85.2 % 57,707 32,743 76.2 %Preferred stock 1,076 1,147 NA 4,302 1,147 NA dividendsNet incomeavailable to $ 13,553 $ 6,752 100.7 % $ 53,405 $ 31,596 69.0 %commonstockholders Average dilutedcommon shares 16,823,060 16,792,676 16,820,054 16,000,749 outstanding Diluted earnings $ 0.80 $ 0.40 100.0 % $ 3.16 $ 1.97 60.4 %per common shareCash dividends per $ 0.175 $ 0.170 2.9 % $ 0.685 $ 0.680 0.7 %common share Dividend payout 22 % 43 % 22 % 35 % ratio (unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020 Average Balances Loans $ 3,560,753 $ 3,351,980 $ 3,465,919 $ 3,115,171 Investment 735,926 586,747 675,124 574,044 securitiesTotal earning 4,931,292 4,508,257 4,768,040 4,092,076 assetsTotal assets 5,240,449 4,779,624 5,058,900 4,347,142 Noninterest-bearing 787,865 627,843 724,839 516,723 depositsInterest-bearing 3,835,434 3,469,102 3,733,327 3,123,823 depositsShareholders' 440,808 418,147 431,062 358,163 equityTangibleshareholders' 396,583 372,799 386,797 316,342 equityTangible commonshareholders' 338,798 315,039 329,012 296,142 equity ^(1) Average Yields Loans 4.80 % 5.20 % 4.83 % 4.93 % Investment 1.77 % 2.10 % 1.83 % 2.53 % securitiesTotal earning 3.75 % 4.16 % 3.79 % 4.14 % assetsInterest-bearing 0.34 % 0.54 % 0.40 % 0.77 % depositsInterest-bearing 0.43 % 0.71 % 0.52 % 0.95 % liabilities Performance Ratios (annualized)Return on average 1.11 % 0.66 % 1.14 % 0.75 % assetsReturn on average 13.17 % 7.52 % 13.39 % 9.14 % equityReturn on averageequity, net ofmerger costs,prepayment 13.17 % 13.10 % 13.39 % 11.98 % penalties andbranch closurecosts ^(1)Return on average 14.63 % 8.43 % 14.92 % 10.35 % tangible equityReturn on averagetangible equity,net of mergercosts, prepayment 14.63 % 14.70 % 14.92 % 13.56 % penalties andbranch closurecosts ^(1)Return on averagetangible common 15.87 % 8.53 % 16.23 % 10.67 % equity ^(1)Return on averagetangible commonequity, net ofmerger costs, 15.87 % 15.94 % 16.23 % 14.10 % prepaymentpenalties andbranch closurecosts ^(1)Net interestmargin, fully tax 3.41 % 3.58 % 3.38 % 3.34 % equivalent basis ^(1)Efficiency Ratio ^ 63.19 % 72.16 % 59.76 % 65.10 % (1)Efficiency Ratio,net of mergercosts, prepayment 63.19 % 56.82 % 59.76 % 57.41 % penalties andbranch closurecosts ^(1) Net Loan Charge-OffsCNB Bank net loan $ 142 $ 1,571 $ 1,763 $ 5,131 charge-offsHoliday Financialnet loan 314 208 992 1,299 charge-offsTotal net loan $ 456 $ 1,779 $ 2,755 $ 6,430 charge-offs Net loancharge-offs / 0.05 % 0.21 % 0.08 % 0.21 % average loans



(unaudited) % change December 31, December 31, versus 2021 2020 12/31/20Ending Balance Sheet Loans, PPP, net of deferred fees $ 45,203 $ 155,529 (70.9 ) %Loans, net of PPP-related loans 3,589,589 3,216,260 11.6 %Total Loans 3,634,792 3,371,789 7.8 %Loans held for sale 849 8,514 (90.0 ) %Investment securities 707,557 591,557 19.6 %FHLB and other equity interests 2,966 2,899 2.3 %Other earning assets 689,758 488,326 41.2 %Total earning assets 5,035,922 4,463,085 12.8 % Allowance for credit losses (37,588 ) (34,340 ) 9.5 %Goodwill 43,749 43,749 0.0 %Core deposit intangible 460 567 (18.9 ) %Other assets 286,396 256,338 11.7 %Total assets $ 5,328,939 $ 4,729,399 12.7 % Non-interest bearing demand $ 792,086 $ 627,114 26.3 %depositsInterest bearing demand deposits 1,079,336 951,903 13.4 %Savings 2,457,745 2,126,183 15.6 %Certificates of Deposit 386,452 476,544 (18.9 ) %Total deposits 4,715,619 4,181,744 12.8 % Subordinated debt, net of issuance 104,281 70,620 47.7 %costsOther liabilities 66,192 60,898 8.7 % Common stock 0 0 NA Preferred stock 57,785 57,785 NA Additional paid in capital 127,351 127,518 (0.1 ) %Retained earnings 260,582 218,727 19.1 %Treasury stock (2,477 ) (2,967 ) (16.5 ) %Accumulated other comprehensive (394 ) 15,074 (102.6 )income (loss) %Total shareholders' equity 442,847 416,137 6.4 %Total liabilities and shareholders' $ 5,328,939 $ 4,729,399 12.7 %equity Ending shares outstanding 16,855,062 16,833,008 Book value per common share $ 22.85 $ 21.29 7.3 %Tangible book value per common $ 20.22 $ 18.66 8.4 %share ^(1) Capital Ratios Tangible common equity / tangible 6.45 % 6.70 % assets ^(1)Tangible common equity / tangibleassets, net of PPP-related loans 7.48 % 7.76 % and excess liquidity at the FederalReserve^(1)Tangible equity / tangible assets ^ 7.54 % 7.94 % (1)Tangible equity / tangible assets,net of PPP-related loans and excess 8.75 % 9.19 % liquidity at the Federal Reserve^(1)Tier 1 leverage ratio ^(3) 8.22 % 8.11 % Common equity tier 1 ratio ^(3) 9.65 % 9.50 % Tier 1 risk based ratio ^(3) 11.79 % 11.91 % Total risk based ratio ^(3) 14.92 % 14.32 % Asset Quality Non-accrual loans^(2) $ 19,420 $ 30,359 Loans 90+ days past due and 168 325 accruingTotal non-performing loans 19,588 30,684 Other real estate owned 707 862 Total non-performing assets $ 20,295 $ 31,546 Loans modified in a troubled debt restructuring (TDR):Performing TDR loans $ 9,006 $ 10,457 Non-performing TDR loans ^(2) 7,600 4,631 Total TDR loans $ 16,606 $ 15,088 Non-performing assets / Loans + 0.56 % 0.94 % OREONon-performing assets / Total 0.38 % 0.67 % assetsAllowance for credit losses / Loans 1.03 % 1.02 % Allowance for credit losses /Loans, net of PPP-related loans^ 1.05 % 1.07 % (1) ^(1) Management uses non-GAAP financial information in its analysisof the Corporation?s performance. Management believes that thesenon-GAAP measures provide a greater understanding of ongoingoperations, enhance comparability of results of operations withprior periods and show the effects of significant gains and chargesin the periods presented. The Corporation?s management believes thatinvestors may use these non-GAAP measures to analyze theCorporation?s financial performance without the impact of unusualitems or events that may obscure trends in the Corporation?s underlying performance. This non-GAAP data should be considered inaddition to results prepared in accordance with GAAP, and is not asubstitute for, or superior to, GAAP results. Limitations associatedwith non-GAAP financial measures include the risks that personsmight disagree as to the appropriateness of items included in thesemeasures and that different companies might calculate these measuresdifferently. A reconciliation of these non-GAAP financial measuresis provided below (dollars in thousands, except per share data).^(2) Nonperforming TDR loans are also included in the balance of non-accrual loans in the previous table.^(3) Capital ratios as of December 31, 2021 are estimated.

Non-GAAP Reconciliations ^(1): (unaudited) December 31, December 31, 2021 2020 Calculation of tangible book value pershare and tangible common equity/tangible assets:Shareholders' equity $ 442,847 $ 416,137 Less: preferred equity 57,785 57,785 Less: goodwill 43,749 43,749 Less: core deposit intangible 460 567 Tangible common equity $ 340,853 $ 314,036 Total assets $ 5,328,939 $ 4,729,399 Less: goodwill 43,749 43,749 Less: core deposit intangible 460 567 Tangible assets $ 5,284,730 $ 4,685,083 Ending shares outstanding 16,855,062 16,833,008 Tangible book value per common share $ 20.22 $ 18.66 Tangible common equity/Tangible assets 6.45 % 6.70 % Calculation of tangible equity/tangible assets:Shareholders' equity $ 442,847 $ 416,137 Less: goodwill 43,749 43,749 Less: core deposit intangible 460 567 Tangible equity $ 398,638 $ 371,821 Tangible assets $ 5,284,730 $ 4,685,083 Tangible equity/Tangible assets 7.54 % 7.94 % Calculation of tangible common equity/tangible assets, net of PPP-related loans and excess liquidity at the FederalReserve:Tangible common equity $ 340,853 $ 314,036 Tangible assets $ 5,284,730 $ 4,685,083 Less: PPP-related loans 45,203 155,529 Less: Excess liquidity at the Federal 684,306 482,503 ReserveAdjusted tangible assets $ 4,555,221 $ 4,047,051 Adjusted tangible common equity/tangible 7.48 % 7.76 %assets Calculation of tangible equity/tangibleassets, net of PPP-related loans and excess liquidity at the Federal Reserve:Tangible equity $ 398,638 $ 371,821 Adjusted tangible assets $ 4,555,221 $ 4,047,051 Adjusted tangible equity/tangible assets 8.75 % 9.19 %

Non-GAAP Reconciliations (1)

(unaudited) December 31, December 31, 2021 2020 Calculation of allowance / loans, net of PPP-related loans:Total allowance for credit losses $ 37,588 $ 34,340 Total loans $ 3,634,792 $ 3,371,789 Less: PPP-related loans 45,203 155,529 Adjusted total loans, net of PPP-related loans $ 3,589,589 $ 3,216,260 (non-GAAP) Adjusted allowance / loans, net of PPP-related 1.05 % 1.07 %loans (non-GAAP)

Non-GAAP Reconciliations (1):

(unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020 Calculationof netinterestmargin (fully taxequivalentbasis):Interestincome(fully tax $ 46,652 $ 46,977 $ 180,553 $ 168,528 equivalentbasis)(non-GAAP)Interestexpense(fully tax 4,270 6,533 19,820 32,456 equivalentbasis)(non-GAAP)Net interestincome(fully tax $ 42,382 $ 40,444 $ 160,733 $ 136,072 equivalentbasis)(non-GAAP) Averagetotal $ 4,931,292 $ 4,508,257 $ 4,768,040 $ 4,092,076 earningassetsLess:average markto market 13 19,765 8,141 18,884 adjustmentoninvestmentsAdjustedaveragetotalearning $ 4,931,279 $ 4,488,492 $ 4,759,899 $ 4,073,192 assets, netof mark tomarket(non-GAAP) Net interestmargin,fully taxequivalent 3.41 % 3.58 % 3.38 % 3.34 %basis(non-GAAP)(annualized)

Non-GAAP Reconciliations (1)

(unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020 Calculation of efficiency ratio:Non-interest $ 32,465 $ 35,017 $ 116,433 $ 107,326 expenseLess: core depositintangible 25 28 107 206 amortizationAdjustednon-interest $ 32,440 $ 34,989 $ 116,326 $ 107,120 expense (non-GAAP) Non-interest income $ 8,924 $ 7,968 $ 33,434 $ 28,059 Net interest income $ 42,059 $ 40,115 $ 159,780 $ 134,711 Less: tax exemptinvestment and loan 1,263 1,352 4,973 5,703 income, net ofTEFRA (non-GAAP)Add: tax exemptinvestment and loan 1,620 1,759 6,416 7,490 income (non-GAAP)(tax-equivalent)Adjusted netinterest income 42,416 40,522 161,223 136,498 (non-GAAP)Adjusted netrevenue (non-GAAP) $ 51,340 $ 48,490 $ 194,657 $ 164,557 (tax-equivalent)Efficiency ratio 63.19 % 72.16 % 59.76 % 65.10 %

Non-GAAP Reconciliations (1)

(unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020 Calculation ofadjusted efficiencyratio, net ofmerger costs, prepaymentpenalties andbranch closurecosts:Non-interest $ 32,465 $ 35,017 $ 116,433 $ 107,326 expenseLess: core depositintangible 25 28 107 206 amortizationLess: merger costs,prepaymentpenalties and 0 7,435 0 12,642 branch closurecostsAdjustednon-interest $ 32,440 $ 27,554 $ 116,326 $ 94,478 expense (non-GAAP) Non-interest income $ 8,924 $ 7,968 $ 33,434 $ 28,059 Net interest income $ 42,059 $ 40,115 $ 159,780 $ 134,711 Less: tax exemptinvestment and loan 1,263 1,352 4,973 5,703 income, net ofTEFRA (non-GAAP)Add: tax exemptinvestment and loan 1,620 1,759 6,416 7,490 income (non-GAAP)(tax-equivalent)Adjusted netinterest income 42,416 40,522 161,223 136,498 (non-GAAP)Adjusted netrevenue (non-GAAP) $ 51,340 $ 48,490 $ 194,657 $ 164,557 (tax-equivalent)Adjusted efficiencyratio, net ofmerger costs,prepayment 63.19 % 56.82 % 59.76 % 57.41 %penalties andbranch closurecosts

Non-GAAP Reconciliations (1)

(unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020Calculation of PPNR: Net interest income $ 42,059 $ 40,115 $ 159,780 $ 134,711 Add: Non-interest 8,924 7,968 33,434 28,059 incomeLess: Non-interest 32,465 35,017 116,433 107,326 expensePPNR (non-GAAP) $ 18,518 $ 13,066 $ 76,781 $ 55,444

Non-GAAP Reconciliations (1)

(unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020Calculation ofPPNR, net of mergercosts, prepayment penalties andbranch closurecosts:Net interest income $ 42,059 $ 40,115 $ 159,780 $ 134,711 Add: Non-interest 8,924 7,968 33,434 28,059 incomeLess: Non-interest 32,465 35,017 116,433 107,326 expenseAdd: merger costs,prepaymentpenalties and 0 7,435 0 12,642 branch closurecostsPPNR, net of mergercosts, prepaymentpenalties and $ 18,518 $ 20,501 $ 76,781 $ 68,086 branch closurecosts (non-GAAP)

Non-GAAP Reconciliations (1)

(unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020 Calculation ofadjusted return on averageequity:Net income $ 14,629 $ 7,899 $ 57,707 $ 32,743 Add: mergercosts, prepaymentpenalties and 0 5,874 0 10,168 branch closurecosts (net oftax)Adjusted net $ 14,629 $ 13,773 $ 57,707 $ 42,911 incomeAverageshareholders' $ 440,808 $ 418,147 $ 431,062 $ 358,163 equityAdjusted return 13.17 % 13.10 % 13.39 % 11.98 %on average equity

Non-GAAP Reconciliations (1)

(unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020 Calculation ofreturn on average tangible equity:Net income $ 14,629 $ 7,899 $ 57,707 $ 32,743 Average tangibleshareholders' 396,583 372,799 386,797 316,342 equityReturn on averagetangible equity 14.63 % 8.43 % 14.92 % 10.35 %(non-GAAP)(annualized) Calculation ofadjusted return on averagetangible equity:Net income $ 14,629 $ 7,899 $ 57,707 $ 32,743 Add: mergercosts, prepaymentpenalties and 0 5,874 0 10,168 branch closurecosts (net oftax)Adjusted net $ 14,629 $ 13,773 $ 57,707 $ 42,911 incomeAverage tangibleshareholders' 396,583 372,799 386,797 316,342 equityAdjusted returnon averagetangible equity 14.63 % 14.70 % 14.92 % 13.56 %(non-GAAP)(annualized)

Non-GAAP Reconciliations (1)

(unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020 Calculation ofreturn on average tangible commonequity:Net incomeavailable to $ 13,553 $ 6,752 $ 53,405 $ 31,596 commonstockholdersAverage tangiblecommon 338,798 315,039 329,012 296,142 shareholders'equityReturn on averagetangible common 15.87 % 8.53 % 16.23 % 10.67 %equity (non-GAAP)(annualized) Calculation ofadjusted returnon average tangible commonequity:Net incomeavailable to $ 13,553 $ 6,752 $ 53,405 $ 31,596 commonstockholdersAdd: mergercosts, prepaymentpenalties and 0 5,874 0 10,168 branch closurecosts (net oftax)Adjusted netincome available $ 13,553 $ 12,626 $ 53,405 $ 41,764 to commonstockholdersAverage tangiblecommon 338,798 315,039 329,012 296,142 shareholders'equityAdjusted returnon averagetangible common 15.87 % 15.94 % 16.23 % 14.10 %equity (non-GAAP)(annualized)

Non-GAAP Reconciliations (1)

(unaudited) Three Months Ended Twelve Months Ended December 31, December 31, (unaudited) 2021 2020 2021 2020Calculation ofnon-interest incomeexcluding net realized gains onavailable-for-salesecurities:Non-interest income $ 8,924 $ 7,968 $ 33,434 $ 28,059 Less: net realizedgains on 783 0 783 2,190 available-for-salesecuritiesAdjusted non-interest $ 8,141 $ 7,968 $ 32,651 $ 25,869 income

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