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[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) CNB Financial Corporation filed its Q2 2025 Form 10-Q, identifying as an accelerated filer with common stock and depositary shares listed on NASDAQ [Registrant Information](index=1&type=section&id=Registrant%20Information) CNB Financial Corporation, an accelerated filer, submitted its Q2 2025 Form 10-Q, with **29,475,148** common shares outstanding as of August 6, 2025 - CNB Financial Corporation is an accelerated filer[4](index=4&type=chunk) Trading Information | Title of Class | Trading Symbol(s) | Name of each exchange on which registered | | :--- | :--- | :--- | | Common Stock, no par value | CCNE | The NASDAQ Stock Market LLC | | Depositary Shares (each representing a 1/40th interest in a share of 7.125% Series A Non Cumulative, perpetual preferred stock) | CCNEP | The NASDAQ Stock Market LLC | - Number of shares outstanding of the issuer's common stock as of August 6, 2025: **29,475,148 shares**[5](index=5&type=chunk) [Table of Contents](index=2&type=section&id=INDEX) This section provides an index to the various parts and items included in the Quarterly Report on Form 10-Q [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Factors%20that%20Could%20Affect%20Future%20Results) This section details forward-looking statements and key risks, including market volatility, interest rate changes, credit risks, and regulatory shifts - Forward-looking statements are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[11](index=11&type=chunk) - Key factors that could affect future results include: - Adverse changes or conditions in capital and financial markets, including potential stresses in the banking industry - Changes in interest rates - Credit risks of lending activities, including ability to estimate credit losses and allowance for credit losses - Effectiveness of data security controls against cyber attacks and reputational risks - Changes in general business, industry, or economic conditions or competition - Changes in applicable law, rule, regulation, policy, guideline, or practice governing financial holding companies - Adverse economic effects from international trade disputes, tariffs, or similar events - Inability to achieve expected synergies and operating efficiencies from mergers or successfully integrate acquired operations - Higher than expected costs or difficulties related to integration of combined businesses - Effects of business combinations and other acquisition transactions, including inability to realize loan and investment portfolios - Changes in the quality or composition of loan and investment portfolios - Adequacy of loan loss reserves - Increased competition - Loss of certain key officers - Deposit attrition - Rapidly changing technology - Unanticipated regulatory or judicial proceedings and liabilities and other costs - Changes in the cost of funds, demand for loan products, or demand for financial services - Other economic, competitive, governmental, or technological factors affecting operations, markets, products, services, and prices - The Corporation undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[13](index=13&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part contains the unaudited condensed consolidated financial statements and management's discussion and analysis for the Corporation [ITEM 1 – Financial Statements](index=4&type=section&id=ITEM%201%20%E2%80%93%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for CNB Financial Corporation, including balance sheets, income statements, and cash flow statements [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$6.32 billion** at June 30, 2025, driven by growth in net loans and available-for-sale debt securities ASSETS (in thousands) | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total cash and cash equivalents | $425,411 | $443,035 | | Debt securities available-for-sale, at fair value | $523,198 | $468,546 | | Debt securities held-to-maturity, at amortized cost | $270,032 | $306,081 | | Net loans receivable | $4,685,091 | $4,561,599 | | Total Assets | $6,318,477 | $6,192,010 | LIABILITIES AND SHAREHOLDERS' EQUITY (in thousands) | LIABILITIES AND SHAREHOLDERS' EQUITY (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total deposits | $5,467,082 | $5,371,364 | | Total liabilities | $5,681,196 | $5,581,315 | | Total shareholders' equity | $637,281 | $610,695 | | Total Liabilities and Shareholders' Equity | $6,318,477 | $6,192,010 | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income available to common shareholders rose to **$12.88 million** for Q2 2025, driven by higher net interest and non-interest income Statements of Income (in thousands, except per share data) | (Dollars in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total interest and dividend income | $85,771 | $80,652 | $168,150 | $158,557 | | Total interest expense | $33,574 | $34,935 | $67,522 | $67,618 | | NET INTEREST INCOME | $52,197 | $45,717 | $100,628 | $90,939 | | PROVISION FOR CREDIT LOSS EXPENSE | $4,338 | $2,591 | $5,894 | $3,911 | | Total non-interest income | $9,008 | $8,865 | $17,515 | $17,820 | | Total non-interest expenses | $39,617 | $35,989 | $80,655 | $73,413 | | NET INCOME | $13,956 | $12,957 | $25,437 | $25,557 | | NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $12,881 | $11,882 | $23,287 | $23,407 | | Basic Earnings Per Common Share | $0.61 | $0.57 | $1.11 | $1.12 | | Diluted Earnings Per Common Share | $0.61 | $0.56 | $1.10 | $1.11 | | Cash Dividends Declared | $0.180 | $0.175 | $0.360 | $0.350 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income significantly increased to **$17.01 million** for Q2 2025, primarily due to positive changes in debt securities Statements of Comprehensive Income (in thousands) | (Dollars in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | NET INCOME | $13,956 | $12,957 | $25,437 | $25,557 | | Other comprehensive income (loss), net of tax | $3,049 | $(187) | $10,110 | $(1,312) | | COMPREHENSIVE INCOME | $17,005 | $12,770 | $35,547 | $24,245 | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Total shareholders' equity increased to **$637.28 million** at June 30, 2025, driven by net income and other comprehensive income Changes in Shareholders' Equity (in thousands) | (Dollars in thousands) | Balance, January 1, 2025 | Net income | Other comprehensive income | Preferred cash dividend declared | Cash dividends declared ($0.360 per common share) | Balance, June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total shareholders' equity | $610,695 | $25,437 | $10,110 | $(2,150) | $(7,579) | $637,281 | Changes in Shareholders' Equity (in thousands) | (Dollars in thousands) | Balance, April 1, 2025 | Net income | Other comprehensive income | Preferred cash dividend declared | Cash dividends declared ($0.180 per common share) | Balance, June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total shareholders' equity | $624,508 | $13,956 | $3,049 | $(1,075) | $(3,802) | $637,281 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations rose to **$31.83 million** for H1 2025, while investing activities used **$135.11 million** Statements of Cash Flows (in thousands) | (Dollars in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | NET CASH PROVIDED BY OPERATING ACTIVITIES | $31,829 | $22,900 | | NET CASH USED BY INVESTING ACTIVITIES | $(135,110) | $(15,739) | | NET CASH PROVIDED BY FINANCING ACTIVITIES | $85,657 | $101,938 | | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | $(17,624) | $109,099 | | CASH AND CASH EQUIVALENTS, Ending | $425,411 | $331,145 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures for the financial statements, covering accounting policies, securities, loans, deposits, and subsequent events [1. Summary of Significant Accounting Policies and Disclosure Rules](index=11&type=section&id=1.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES%20AND%20DISCLOSURE%20RULES) This note outlines CNB's operations through CNB Bank and Holiday Financial, adherence to GAAP, and annual goodwill impairment testing - CNB Financial Corporation operates through CNB Bank (full range of banking, wealth, and asset management services) and Holiday Financial Services Corporation (consumer discount loans)[27](index=27&type=chunk) - The Corporation's market area spans Central and Northwest Pennsylvania, Central and Northeast Ohio, Western New York, and Southwest Virginia[27](index=27&type=chunk) - Goodwill is tested for impairment annually on November 30, with no impairment identified as of June 30, 2025[32](index=32&type=chunk) [2. Recent Accounting Pronouncements](index=12&type=section&id=2.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This note details recent accounting pronouncement adoptions and evaluations, with most having no material impact on financial statements - Recent accounting pronouncements include: - ASU 2022-03 (Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions) adopted January 1, 2024, no material impact - ASU 2023-01 (Leases: Common Control Arrangements) adopted January 1, 2024, no material impact - ASU 2023-02 (Investments—Equity Method and Joint Ventures: Accounting for Investments in Tax Credit Structures) adopted January 1, 2024, no material impact - ASU 2023-07 (Improvements to Reportable Segment Disclosures) effective December 15, 2024, no material impact - ASU 2023-05 (Business Combinations—Joint Venture Formations) effective January 1, 2025, no material impact - ASU 2023-09 (Improvements to Income Tax Disclosures) effective after December 15, 2024, currently evaluating effect - ASU 2024-01 (Compensation - Stock Compensation) effective after December 15, 2024, no material impact - ASU 2024-02 (Codification Improvements) effective after December 15, 2024, no material impact - ASU 2025-02 (Liabilities: Amendments to SEC Paragraphs) effective immediately upon issuance, no material impact - The Corporation is evaluating the effect of ASU 2023-06 (Disclosure Improvements), ASU 2024-03 (Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures), ASU 2024-04 (Debt—Debt with Conversion and Other Options), ASU 2025-01 (Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures), ASU 2025-03 (Business Combinations and Consolidation), and ASU 2025-04 (Compensation - Stock Compensation and Revenue from Contracts with Customers) on its financial statements and disclosures[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk) [3. Securities](index=14&type=section&id=3.%20SECURITIES) AFS debt securities increased to **$523.20 million**, HTM decreased, and unrealized losses on both types of securities declined Debt Securities (in thousands) | Debt Securities (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | AFS, at fair value | $523,198 | $468,546 | | HTM, at amortized cost | $270,032 | $306,081 | | Equity securities | $10,937 | $10,456 | AFS Debt Securities Unrealized Losses (in thousands) | AFS Debt Securities Unrealized Losses (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Unrealized Losses | $(41,577) | $(51,765) | HTM Debt Securities Unrealized Losses (in thousands) | HTM Debt Securities Unrealized Losses (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Unrealized Losses | $(16,425) | $(23,111) | - Management believes there is no credit-related impairment of debt securities at June 30, 2025, as the Corporation does not intend to sell, nor is it likely to be required to sell, these securities before recovery of their amortized cost basis[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) [4. Loans Receivable and Allowance for Credit Losses](index=17&type=section&id=4.%20LOANS%20RECEIVABLE%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) Total loans receivable grew to **$4.73 billion**, allowance for credit losses increased, and nonaccrual loans significantly decreased Loans Receivable (in thousands) | Loans Receivable (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total loans receivable | $4,733,420 | $4,608,956 | | Less: allowance for credit losses | $(48,329) | $(47,357) | | Net loans receivable | $4,685,091 | $4,561,599 | Provision for Credit Loss Expense (in thousands) | Provision for Credit Loss Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Provision for credit loss expense | $4,338 | $2,591 | $5,894 | $3,911 | Nonaccrual Loans and Ratios (in thousands) | Nonaccrual Loans and Ratios (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Nonaccrual loans | $28,509 | $56,323 | | Loans Receivable Past Due over 89 Days Still Accruing | $256 | $653 | | Ratio of allowance for credit losses to nonaccrual loans | 169.52% | 84.08% | - The increase in the allowance for credit losses for the six months ended June 30, 2025, was primarily driven by growth in the Corporation's loan portfolio, with significant uncertainty persisting in the domestic and global economy[68](index=68&type=chunk) [5. Leases](index=35&type=section&id=5.%20LEASES) Total leased assets increased to **$54.76 million**, with corresponding liabilities rising, and net lease costs increased for Q2 2025 Leased Assets and Liabilities (in thousands) | Leased Assets and Liabilities (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total leased assets | $54,758 | $52,858 | | Total leased liabilities | $57,892 | $55,466 | Net Lease Cost (in thousands) | Net Lease Cost (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net lease cost | $1,157 | $762 | $2,353 | $1,528 | Lease Term and Discount Rate | Lease Term and Discount Rate | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Weighted-average remaining lease term (Operating leases) | 22.5 years | 22.8 years | | Weighted-average remaining lease term (Finance leases) | 34.3 years | 34.6 years | | Weighted-average discount rate (Operating leases) | 4.23% | 4.22% | | Weighted-average discount rate (Finance leases) | 5.32% | 5.24% | [6. Deposits](index=37&type=section&id=6.%20DEPOSITS) Total deposits increased to **$5.47 billion**, driven by retail and municipal growth, with uninsured deposits at **$982.0 million** Deposits (in thousands) | Deposits (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Noninterest-bearing demand deposits | $855,788 | $819,680 | | Interest-bearing demand deposits | $698,902 | $706,796 | | Savings | $3,162,515 | $3,122,028 | | Certificates of deposit | $749,877 | $722,860 | | Total deposits | $5,467,082 | $5,371,364 | - Total deposits increased by **$95.7 million**, or **1.78%**, from December 31, 2024, driven by higher retail and municipal deposits and growth in retail time deposits[227](index=227&type=chunk) - Adjusted uninsured deposits were approximately **$982.0 million** (**17.63%** of total Bank deposits) at June 30, 2025, down from **$986.0 million** (**18.01%**) at December 31, 2024[230](index=230&type=chunk)[231](index=231&type=chunk) [7. Borrowings](index=37&type=section&id=7.%20BORROWINGS) The Corporation had no outstanding borrowings from credit lines or FHLB, with subordinated debt totaling **$105.34 million** - No borrowings were outstanding under the **$10.0 million** unsecured line of credit at June 30, 2025[112](index=112&type=chunk) - No outstanding advances from the FHLB at June 30, 2025, despite a **$250.0 million** line-of-credit and **$1.3 billion** in available advances[114](index=114&type=chunk)[115](index=115&type=chunk) - No borrowings from the Federal Reserve BIC program or discount window at June 30, 2025, with a borrowing capacity of **$229.4 million**[116](index=116&type=chunk)[117](index=117&type=chunk) Subordinated Debt (in thousands) | Subordinated Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Subordinated debentures | $20,620 | $20,620 | | Subordinated notes, net of unamortized issuance costs | $84,722 | $84,570 | - Subordinated debentures had an all-in interest rate of **6.13%** at June 30, 2025, floating based on three-month SOFR plus **1.55%** and a credit spread adjustment[119](index=119&type=chunk) - Subordinated notes bear a fixed rate of **3.25%** per annum until June 15, 2026, then reset quarterly to three-month average SOFR plus **2.58%**[120](index=120&type=chunk) [8. Related Party Transactions](index=39&type=section&id=8.%20RELATED%20PARTY%20TRANSACTIONS) Loans to related parties decreased to **$30.09 million**, while deposits from them totaled **$11.7 million**, all on market terms Loans to Principal Officers, Directors, and Affiliates (in thousands) | Loans to Principal Officers, Directors, and Affiliates (in thousands) | Six Months Ended June 30, 2025 | | :--- | :--- | | Beginning balance | $31,689 | | New loans and advances | $177 | | Repayments | $(2,329) | | Ending balance | $30,087 | Deposits from Directors, Executive Officers, and Affiliates (in thousands) | Deposits from Directors, Executive Officers, and Affiliates (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Deposits | $11,700 | $12,100 | - All related party loan and deposit transactions were made on substantially the same terms as those prevailing for comparable transactions and do not involve more than normal collectability risk[121](index=121&type=chunk) [9. Off-Balance Sheet Commitments and Contingencies](index=39&type=section&id=9.%20OFF-BALANCE%20SHEET%20COMMITMENTS%20AND%20CONTINGENCIES) Off-balance sheet commitments include **$482.03 million** in credit extensions and **$22.30 million** in standby letters of credit Off-Balance Sheet Commitments (in thousands) | Off-Balance Sheet Commitments (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commitments to extended credit | $482,033 | $451,764 | | Unused lines of credit | $903,662 | $875,883 | | Standby letters of credit | $22,301 | $22,098 | Allowance for Credit Losses on Unfunded Loan Commitments (in thousands) | Allowance for Credit Losses on Unfunded Loan Commitments (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Ending balance | $1,124 | $822 | $1,124 | $822 | - Unfunded capital commitments in Small Business Investment Corporations (SBIC) and Community Development Entities (CDE) totaled **$6.2 million** at June 30, 2025 - Unfunded commitments in Qualified Affordable Housing Project Investments totaled **$3.5 million** at June 30, 2025 - Unfunded commitments in Federal and State Rehabilitation/Historic Tax Credit investments totaled **$3.2 million** at June 30, 2025 [10. Stock Compensation](index=41&type=section&id=10.%20STOCK%20COMPENSATION) The 2025 Omnibus Incentive Plan authorizes **782,246 shares** for awards, with compensation expense at **$1.1 million** for H1 2025 - The 2025 Omnibus Incentive Plan authorizes the issuance of up to **782,246 shares** of common stock for stock-based compensation[133](index=133&type=chunk) Stock Compensation Expense (in thousands) | Stock Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Compensation expense | $645 | $482 | $1,100 | $1,400 | - Unrecognized compensation cost related to non-vested shares was **$5.0 million** at June 30, 2025[138](index=138&type=chunk) [11. Earnings Per Common Share](index=42&type=section&id=11.%20EARNINGS%20PER%20COMMON%20SHARE) Basic EPS for Q2 2025 was **$0.61**, and diluted EPS was **$0.61**, with unvested restricted stock impacting calculations Per Common Share Data | Per Common Share Data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Basic Earnings Per Common Share | $0.61 | $0.57 | $1.11 | $1.12 | | Diluted Earnings Per Common Share | $0.61 | $0.56 | $1.10 | $1.11 | - Unvested share-based payment awards with nonforfeitable rights to dividends are treated as participating securities in EPS computation using the two-class method[142](index=142&type=chunk) [12. Derivative Instruments](index=43&type=section&id=12.%20DERIVATIVE%20INSTRUMENTS) The Corporation uses back-to-back interest rate swaps (notional **$65.29 million**) and RPAs for credit protection, not for speculation - The Corporation does not use derivatives for trading or speculative purposes[144](index=144&type=chunk) - Back-to-back interest rate swaps are entered into with customers and offsetting financial institutions, allowing customers to convert variable rate loans to fixed rates without impacting the Corporation's results of operations[145](index=145&type=chunk) Back-to-Back Interest Rate Swaps (in thousands) | Back-to-Back Interest Rate Swaps (in thousands) | Notional Amount | Fair Value Asset | Fair Value Liability | | :--- | :--- | :--- | :--- | | June 30, 2025 | $65,285 | $953 | $953 | | December 31, 2024 | $65,629 | $423 | $423 | - Notional amount of RPA swaps (in) was **$35.0 million** at June 30, 2025[149](index=149&type=chunk) - Notional amount of RPA swaps (out) was **$25.4 million** at June 30, 2025[150](index=150&type=chunk) [13. Fair Value](index=44&type=section&id=13.%20FAIR%20VALUE) Fair value measurements are categorized into three levels, with most AFS debt securities and swaps using Level 2 inputs - Fair value measurement levels: - Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets - Level 2: Significant other observable inputs (e.g., quoted prices for similar assets, quoted prices in inactive markets, or corroborated market data) - Level 3: Significant unobservable inputs reflecting company's own assumptions about market participant pricing Fair Value Measurements at June 30, 2025 (in thousands) | Fair Value Measurements at June 30, 2025 (in thousands) | Total | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Securities Available-For-Sale | $523,198 | $3,184 | $520,014 | $0 | | Interest Rate swaps (Assets) | $953 | $0 | $953 | $0 | | Equity Securities | $10,937 | $9,322 | $1,615 | $0 | | Interest Rate Swaps (Liabilities) | $(953) | $0 | $(953) | $0 | Collateral-Dependent Loans Receivable at June 30, 2025 (in thousands) | Collateral-Dependent Loans Receivable at June 30, 2025 (in thousands) | Total | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Farmland | $352 | $0 | $0 | $352 | | Owner-occupied, nonfarm nonresidential properties | $1,182 | $0 | $0 | $1,182 | | Commercial and industrial | $2,151 | $0 | $0 | $2,151 | | Other construction loans and all land development loans and other land loans | $1,152 | $0 | $0 | $1,152 | | Multifamily (5 or more) residential properties | $199 | $0 | $0 | $199 | | Non-owner occupied, nonfarm nonresidential | $3,596 | $0 | $0 | $3,596 | | Home equity lines of credit | $737 | $0 | $0 | $737 | | Residential Mortgages secured by first liens | $598 | $0 | $0 | $598 | [14. Segment Reporting](index=50&type=section&id=14.%20SEGMENT%20REPORTING) The Corporation operates as a single reportable segment, with the CEO assessing performance based on consolidated net income and assets - The Corporation manages its business activities on a consolidated basis and considers all financial service operations to be aggregated in one reportable operating segment[166](index=166&type=chunk) - The CODM (Chief Executive Officer, Michael D. Peduzzi) assesses performance and allocates resources based on consolidated net income and total consolidated assets[167](index=167&type=chunk) - Net income is a key metric for evaluating overall financial performance, profitability, and monitoring budget versus actual results, also used in establishing management's compensation[167](index=167&type=chunk) [15. Subsequent Event: ESSA Bancorp, Inc. Acquisition](index=52&type=section&id=15.%20SUBSEQUENT%20EVENT) The Corporation completed the **$202.5 million** all-stock acquisition of ESSA Bancorp on July 23, 2025, expanding its branch network - On July 23, 2025, CNB Financial Corporation completed the acquisition of ESSA Bancorp, Inc. and its subsidiary bank, ESSA Bank & Trust Company[171](index=171&type=chunk) - The acquisition was an all-stock transaction, with total consideration of approximately **$202.5 million**, comprising **8,357,157 shares** of CNB common stock and **$20 thousand** in cash[172](index=172&type=chunk) - The merger expanded CNB Bank's branch network to **78 offices** across its four-state footprint, adding ESSA's **20 community offices**[183](index=183&type=chunk) - Merger-related expenses totaled **$1.9 million** for the six months ended June 30, 2025[174](index=174&type=chunk) - As of June 30, 2025, ESSA had approximately **$2.2 billion** in total assets, **$1.8 billion** in total loans, and **$1.5 billion** in total deposits[173](index=173&type=chunk) [ITEM 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=ITEM%202%20%E2%80%93%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and results, covering business overview, recent events, and key financial components [General Overview](index=53&type=section&id=GENERAL%20OVERVIEW) CNB Financial Corporation, a financial holding company, operates through CNB Bank and other subsidiaries across multiple states - CNB Financial Corporation is a financial holding company with CNB Bank as its primary subsidiary, offering financial services in PA, OH, NY, and VA[179](index=179&type=chunk) - CNB's subsidiaries include: - CNB Securities Corporation: Investments in debt and equity securities - CNB Insurance Agency: Sale of nonproprietary annuities and insurance products - CNB Risk Management, Inc.: Captive insurance company for unique operational risks - Holiday Financial Services Corporation: Small balance unsecured and secured loans to higher-risk borrowers [Recent Events](index=53&type=section&id=RECENT%20EVENTS) The **$202.5 million** acquisition of ESSA Bancorp on July 23, 2025, expanded CNB Bank's network to **78 offices** - Acquisition of ESSA Bancorp, Inc. completed on July 23, 2025, for approximately **$202.5 million** in an all-stock transaction[182](index=182&type=chunk)[184](index=184&type=chunk) - The merger expanded CNB Bank's branch network to **78 offices** across its four-state footprint[183](index=183&type=chunk) ESSA Financials (as of June 30, 2025, in billions) | ESSA Financials (as of June 30, 2025, in billions) | | :--- | | Total assets | $2.2 | | Total loans | $1.8 | | Total deposits | $1.5 | [Non-GAAP Financial Information and Performance Evaluation](index=54&type=section&id=NON-GAAP%20FINANCIAL%20INFORMATION) Management uses non-GAAP measures like adjusted earnings and tangible book value to assess performance and ongoing operations - Management uses non-GAAP financial measures to understand ongoing operations, enhance comparability, and show effects of significant gains/charges[186](index=186&type=chunk) - Non-GAAP financial measures include: - Merger costs, net of tax - Income available to common (excluding merger costs) - Tangible book value per share and tangible book value per share (excluding merger costs) - Tangible common equity/tangible assets and tangible common equity/tangible assets (excluding merger costs) - Efficiency ratio (fully tax-equivalent basis) and efficiency ratio (fully tax-equivalent basis and excluding merger costs) - Net interest margin (fully tax-equivalent basis) - Pre-provision net revenue ("PPNR") and PPNR (excluding merger costs) - Basic and diluted earnings per share (excluding merger costs) - Dividend payout ratio (excluding merger costs) - Return on average assets (excluding merger costs) - Return on average equity (excluding merge costs) - Return on average tangible common equity and return on average tangible common equity (excluding merger costs) - Key performance measures include return on average assets, return on average equity, earnings per common share, tangible book value per common share, asset quality, and net interest margin[188](index=188&type=chunk) [Cash and Cash Equivalents](index=55&type=section&id=CASH%20AND%20CASH%20EQUIVALENTS) Cash and cash equivalents totaled **$425.4 million**, with total available liquidity sources approximately **5.1 times** uninsured deposits Cash and Cash Equivalents (in thousands) | Cash and Cash Equivalents (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents due from banks | $88,721 | $63,771 | | Interest-bearing deposits with Federal Reserve | $332,214 | $375,009 | | Total cash and cash equivalents | $425,411 | $443,035 | - Total available liquidity sources are approximately **5.1 times** the estimated adjusted uninsured deposit balances[190](index=190&type=chunk) - Liquidity needs are primarily satisfied by cash, customer and brokered deposits, FHLB financing, and maturing securities/loans[191](index=191&type=chunk) [Securities Portfolio](index=55&type=section&id=SECURITIES) AFS and equity securities increased to **$534.1 million**, while HTM securities decreased, with a focus on lower-risk, shorter-duration assets Securities (in thousands) | Securities (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | AFS debt securities and equity securities | $534,135 | $479,002 | | HTM debt securities | $270,032 | $306,081 | - The Corporation's strategy is to focus on lower risk securities and shorter durations that complement the current portfolio investment ladder, coupled with consistent reinvestment of cash flows to replace lower earning assets[197](index=197&type=chunk) Weighted Average Modified Duration (in Years) | Weighted Average Modified Duration (in Years) | June 30, 2025 | | :--- | :--- | | AFS Securities | 3.71 | | HTM Securities | 2.78 | [Loans Receivable and Credit Quality](index=57&type=section&id=LOANS%20RECEIVABLE) Total loans, excluding syndicated, increased to **$4.7 billion**, and nonperforming assets significantly decreased to **$30.4 million** - Total loans, excluding syndicated loans, increased by **$125.4 million** (**2.77%** YTD) to **$4.7 billion** at June 30, 2025[200](index=200&type=chunk) - The syndicated loan portfolio decreased by **$946 thousand** to **$78.9 million** at June 30, 2025[201](index=201&type=chunk) Nonperforming Assets (in thousands) | Nonperforming Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total nonperforming loans | $28,765 | $56,976 | | Other real estate owned | $1,624 | $2,509 | | Total nonperforming assets | $30,389 | $59,485 | | Nonperforming assets as a percentage of total assets | 0.48% | 0.96% | - The decrease in nonperforming assets was primarily due to paydowns and charge-offs on two larger nonaccrual loan relationships[211](index=211&type=chunk) - Commercial loan portfolio details: - Commercial office loans: **$111.1 million** (**2.35%** of total loans), no nonaccrual loans, **0.19%** past due - Commercial hospitality loans: **$321.2 million** (**6.79%** of total loans), no nonaccrual or past due loans - Commercial multifamily loans: **$405.4 million** (**8.57%** of total loans), one nonaccrual and past due loan totaling **$199 thousand** (**0.05%**) [Allowance for Credit Losses](index=62&type=section&id=ALLOWANCE%20FOR%20CREDIT%20LOSSES) Allowance for credit losses increased to **$48.33 million** due to loan growth, with provision for credit losses rising to **$5.9 million** for H1 2025 Allowance for Credit Losses (in thousands) | Allowance for Credit Losses (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total allowance for credit losses | $48,329 | $47,357 | | Allowance for credit losses / Total loans | 1.02% | 1.03% | - The allowance for credit losses increased by **$972 thousand** for the six months ended June 30, 2025, primarily driven by growth in the Corporation's loan portfolio[219](index=219&type=chunk) Provision for Credit Losses (in thousands) | Provision for Credit Losses (in thousands) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Provision for credit losses | $4,300 | $5,900 | | Provision for credit losses on unfunded commitments | $63 | $180 | [Deposits](index=66&type=section&id=DEPOSITS) Total deposits increased to **$5.47 billion**, driven by retail and municipal growth, while the average rate on interest-bearing deposits decreased Deposits (in thousands) | Deposits (in thousands) | June 30, 2025 | December 31, 2024 | Percentage Change | | :--- | :--- | :--- | :--- | | Demand, noninterest-bearing | $855,788 | $819,680 | 4.4% | | Demand, interest-bearing | $698,902 | $706,796 | (1.1)% | | Savings deposits | $3,162,515 | $3,122,028 | 1.3% | | Time deposits | $749,877 | $722,860 | 3.7% | | Total deposits | $5,467,082 | $5,371,364 | 1.8% | Average Annual Rate on Interest-Bearing Deposits | Average Annual Rate on Interest-Bearing Deposits | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Demand, interest-bearing | 0.97% | 0.76% | 0.93% | 0.70% | | Savings deposits | 3.01% | 3.57% | 3.05% | 3.52% | | Time deposits | 3.92% | 3.93% | 3.96% | 3.78% | | Total interest-bearing deposits | 2.84% | 3.15% | 2.87% | 3.07% | [Liquidity and Capital Resources](index=68&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Strong liquidity with **$425.4 million** cash and **$4.6 billion** contingent resources, and all capital ratios exceed 'well-capitalized' levels - Cash and cash equivalents totaled **$425.4 million** at June 30, 2025, including **$332.2 million** held at the Federal Reserve[238](index=238&type=chunk) Net Available Liquidity and Borrowing Capacities (in thousands) | Net Available Liquidity and Borrowing Capacities (in thousands) | June 30, 2025 | | :--- | :--- | | FHLB borrowing capacity | $1,301,656 | | Federal Reserve borrowing capacity | $458,944 | | Brokered deposits | $2,073,815 | | Other third-party funding channels | $808,412 | | Total net available liquidity and borrowing capacity | $4,642,827 | - Total shareholders' equity increased by **$26.6 million** (**4.35%**) to **$637.3 million** at June 30, 2025[241](index=241&type=chunk) Capital Ratios | Capital Ratios | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total risk-based ratio | 16.14% | 16.16% | | Tier 1 risk-based ratio | 13.38% | 13.41% | | Common equity tier 1 ratio | 11.78% | 11.76% | | Tier 1 leverage ratio | 10.42% | 10.43% | | Tangible common equity/tangible assets (non-GAAP) | 8.53% | 8.28% | - All capital ratios exceeded regulatory 'well-capitalized' levels at June 30, 2025[243](index=243&type=chunk) - Pre-tax net unrealized losses on AFS and HTM securities totaled **$55.6 million** at June 30, 2025, but regulatory capital ratios would still exceed 'well-capitalized' levels if fully recognized[243](index=243&type=chunk) [Average Balances, Interest Rates and Yields](index=70&type=section&id=AVERAGE%20BALANCES%2C%20INTEREST%20RATES%20AND%20YIELDS) Net interest margin (FTE) increased to **3.59%** for Q2 2025, with earning assets yielding **5.89%** and interest-bearing liabilities at **2.88%** Average Balances and Rates (Three Months Ended June 30) | Average Balances and Rates (Three Months Ended June 30) | 2025 Average Balance (in thousands) | 2025 Annual Rate | 2024 Average Balance (in thousands) | 2024 Annual Rate | | :--- | :--- | :--- | :--- | :--- | | Total earning assets | $5,817,121 | 5.89% | $5,465,645 | 5.89% | | Total interest-bearing liabilities | $4,680,897 | 2.88% | $4,426,938 | 3.17% | | Net interest margin (fully tax-equivalent) | N/A | 3.59% | N/A | 3.34% | Average Balances and Rates (Six Months Ended June 30) | Average Balances and Rates (Six Months Ended June 30) | 2025 Average Balance (in thousands) | 2025 Annual Rate | 2024 Average Balance (in thousands) | 2024 Annual Rate | | :--- | :--- | :--- | :--- | :--- | | Total earning assets | $5,810,364 | 5.81% | $5,407,954 | 5.85% | | Total interest-bearing liabilities | $4,687,944 | 2.90% | $4,380,640 | 3.10% | | Net interest margin (fully tax-equivalent) | N/A | 3.48% | N/A | 3.36% | [Volume Analysis of Changes in Net Interest Income](index=72&type=section&id=VOLUME%20ANALYSIS%20OF%20CHANGES%20IN%20NET%20INTEREST%20INCOME) Net interest income increased by **$6.53 million** for Q2 2025, primarily driven by volume growth in earning assets Change in Net Interest Income (Three Months Ended June 30, 2025 vs 2024, in thousands) | Change in Net Interest Income (Three Months Ended June 30, 2025 vs 2024, in thousands) | Volume | Rate | Net | | :--- | :--- | :--- | :--- | | Total Earning Assets | $4,936 | $234 | $5,170 | | Total Interest-Bearing Liabilities | $2,668 | $(4,029) | $(1,361) | | Change in Net Interest Income | $2,268 | $4,263 | $6,531 | Change in Net Interest Income (Six Months Ended June 30, 2025 vs 2024, in thousands) | Change in Net Interest Income (Six Months Ended June 30, 2025 vs 2024, in thousands) | Volume | Rate | Net | | :--- | :--- | :--- | :--- | | Total Earning Assets | $10,316 | $(629) | $9,687 | | Total Interest-Bearing Liabilities | $5,718 | $(5,814) | $(96) | | Change in Net Interest Income | $4,598 | $5,185 | $9,783 | [Results of Operations](index=75&type=section&id=RESULTS%20OF%20OPERATIONS) This section details the Corporation's financial performance for Q2 and H1 2025, covering net income, net interest income, and expenses [Three Months Ended June 30, 2025 and 2024](index=75&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net income available to common shareholders rose to **$12.9 million** for Q2 2025, with diluted EPS at **$0.61**, and net interest income increased Financial Performance (Three Months Ended June 30) | Financial Performance (Three Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net income available to common shareholders (in thousands) | $12,881 | $11,882 | | Diluted Earnings Per Common Share | $0.61 | $0.56 | | Diluted Earnings Per Common Share (excluding merger costs, non-GAAP) | $0.63 | $0.56 | | Net interest income (in thousands) | $52,197 | $45,717 | | Net interest margin (fully tax-equivalent, non-GAAP) | 3.59% | 3.34% | | Provision for credit losses (in thousands) | $4,338 | $2,591 | | Total non-interest income (in thousands) | $9,008 | $8,865 | | Total non-interest expense (in thousands) | $39,617 | $35,989 | | Income tax expense (in thousands) | $3,294 | $3,045 | | Effective tax rate | 19.10% | 19.03% | - The increase in net interest income was primarily due to increased investments and total loans outstanding, coupled with lower interest rates on deposits[253](index=253&type=chunk) - Non-interest expense increased primarily due to higher salaries and benefits, occupancy expense, card processing and interchange expenses, and merger costs[258](index=258&type=chunk) [Six Months Ended June 30, 2025 and 2024](index=77&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Net income available to common shareholders was **$23.3 million** for H1 2025, with diluted EPS at **$1.10**, and net interest income increased Financial Performance (Six Months Ended June 30) | Financial Performance (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net income available to common shareholders (in thousands) | $23,287 | $23,407 | | Diluted Earnings Per Common Share | $1.10 | $1.11 | | Diluted Earnings Per Common Share (excluding merger costs, non-GAAP) | $1.19 | $1.11 | | Net interest income (in thousands) | $100,628 | $90,939 | | Net interest margin (fully tax-equivalent, non-GAAP) | 3.48% | 3.36% | | Provision for credit losses (in thousands) | $5,894 | $3,911 | | Total non-interest income (in thousands) | $17,515 | $17,820 | | Total non-interest expense (in thousands) | $80,655 | $73,413 | | Total non-interest expense (excluding merger costs, non-GAAP) | $78,736 | $73,413 | | Income tax expense (in thousands) | $6,157 | $5,878 | | Effective tax rate | 19.49% | 18.70% | - The increase in net interest income was due to investment and loan growth, higher average balance of interest-bearing deposits with the Federal Reserve, and a decrease in rates on deposits[265](index=265&type=chunk) - The increase in provision for credit losses was primarily a result of increased net loan charge-offs and higher loan growth[268](index=268&type=chunk) - Non-interest expense increased due to higher personnel costs (merit increases, staff growth, new offices), occupancy expense, card processing, and technology expenses[271](index=271&type=chunk) [Off-Balance Sheet Arrangements](index=78&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS) Off-balance sheet arrangements, including credit commitments and letters of credit, involve credit and interest rate risks - Off-balance sheet arrangements include commitments to extend credit and standby and commercial letters of credit[273](index=273&type=chunk) - These instruments involve elements of credit risk and interest rate risk in excess of amounts recognized in the condensed consolidated balance sheets[273](index=273&type=chunk) [Critical Accounting Policies](index=78&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES) Critical accounting policies involve material estimates for credit losses and fair value of acquired assets, with no significant changes since 2024 - Critical accounting policies involve material estimates for the allowance for credit losses and the fair value of assets acquired and liabilities assumed in business combinations (including goodwill and intangibles)[274](index=274&type=chunk) - Application of different assumptions could result in material changes to the Corporation's financial position or results of operations[274](index=274&type=chunk) - No significant changes in accounting policies have occurred since December 31, 2024[274](index=274&type=chunk) [Non-GAAP Financial Measures Reconciliations](index=79&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) This section reconciles non-GAAP financial measures, including adjusted net income, tangible book value, and efficiency ratios, to GAAP equivalents Non-GAAP Financial Measures (in thousands, except per share data) | Non-GAAP Financial Measures (in thousands, except per share data) | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Merger costs, net of tax | $357 | $1,844 | | Adjusted net income available to common shareholders | $13,238 | $25,131 | | Tangible common equity | $535,449 | $535,449 | | Tangible assets | $6,274,430 | $6,274,430 | | Tangible book value per common share | $25.35 | $25.35 | | Tangible common equity / Tangible assets | 8.53% | 8.53% | | Adjusted efficiency ratio (fully tax equivalent basis) | 63.50% | 65.97% | | Net interest margin, fully tax equivalent basis | 3.59% | 3.48% | | Adjusted PPNR | $21,945 | $39,374 | | Adjusted diluted earnings per common share | $0.63 | $1.19 | | Adjusted dividend payout ratio | 28.57% | 30.25% | [ITEM 3 – Quantitative and Qualitative Disclosures about Market Risk](index=85&type=section&id=ITEM%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Primary market risk is interest rate risk, managed via simulations, with a +100 bps yield curve shift increasing net interest income by **0.2%** - The Corporation's primary source of market risk exposure is interest rate risk (IRR), which influences fluctuations in future earnings due to changes in interest rates[284](index=284&type=chunk) - IRR is managed using income simulation models and standard gap reports to quantify potential impacts of changing interest rates on earnings[287](index=287&type=chunk) % Change in Net Interest Income (June 30, 2025) | % Change in Net Interest Income (June 30, 2025) | | :--- | | +300 basis points | (0.8)% | | +200 basis points | —% | | +100 basis points | 0.2% | | -100 basis points | (0.8)% | | -200 basis points | (0.2)% | | -300 basis points | (0.2)% | - Approximately **$2.5 billion** in outstanding loans receivable balances are rate sensitive over the next twelve months[291](index=291&type=chunk) [ITEM 4 – Controls and Procedures](index=86&type=section&id=ITEM%204%20%E2%80%93%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no significant changes in internal control over financial reporting - The Corporation's disclosure controls and procedures are effective as of June 30, 2025, ensuring timely and accurate reporting of material information[293](index=293&type=chunk) - No significant change in internal control over financial reporting occurred during the quarter ended June 30, 2025[294](index=294&type=chunk) [PART II. OTHER INFORMATION](index=87&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part contains other required information not included in the financial statements, such as legal proceedings, risk factors, and sales of equity securities [ITEM 1 – Legal Proceedings](index=87&type=section&id=ITEM%201%20%E2%80%93%20Legal%20Proceedings) No material pending legal proceedings exist against the Corporation or its subsidiaries, beyond routine business matters - No pending legal proceedings to which the Corporation or its subsidiaries is a party, except for ordinary routine proceedings incidental to business[297](index=297&type=chunk) [ITEM 1A – Risk Factors](index=87&type=section&id=ITEM%201A%20%E2%80%93%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2024 Form 10-K have occurred - No material changes to the risk factors disclosed in the 2024 Form 10-K[299](index=299&type=chunk) [ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds](index=87&type=section&id=ITEM%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock was repurchased in Q2 2025; a new program authorizes repurchases up to **500,000 shares** or **$15 million** - No shares of common stock were purchased by the Corporation during the quarter ended June 30, 2025[301](index=301&type=chunk) - The 2025 Common Share Repurchase Program, approved on June 23, 2025, authorizes the repurchase of up to **500,000 shares**, not exceeding **$15 million**, through June 10, 2026[301](index=301&type=chunk) - Declaration and payment of cash dividends depend on the Bank's payments to the Corporation and are subject to regulatory restrictions, profitability, financial condition, and capital requirements[302](index=302&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk) [ITEM 3 – Defaults Upon Senior Securities](index=88&type=section&id=ITEM%203%20%E2%80%93%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - None[307](index=307&type=chunk) [ITEM 4 – Mine Safety Disclosures](index=88&type=section&id=ITEM%204%20%E2%80%93%20Mine%20Safety%20Disclosures) This item is not applicable to the Corporation's operations - Not applicable[309](index=309&type=chunk) [ITEM 5 – Other Information](index=88&type=section&id=ITEM%205%20%E2%80%93%20Other%20Information) No Rule 10b5-1 trading plans were adopted or terminated by directors or executive officers in Q2 2025 - None of the Corporation's directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the quarter ended June 30, 2025[311](index=311&type=chunk) [ITEM 6 – Exhibits](index=89&type=section&id=ITEM%206%20%E2%80%93%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, incentive plans, and certifications - Exhibits include: - Third Amended and Restated Articles of Incorporation and Bylaws - Amendment No. 1 to the Third Amended and Restated Bylaws - CNB Financial Corporation 2025 Omnibus Incentive Plan - Certifications of Chief Executive Officer and Chief Financial Officer (Sections 302 and 906 of Sarbanes-Oxley Act) - Inline XBRL Instance Document and Taxonomy Extension Documents

Company Overview - CNB Financial (CCNE) is a bank holding company based in Clearfield, operating in the Finance sector. The company's shares have experienced a price change of -9.37% this year [3]. Dividend Information - CNB Financial currently pays a dividend of $0.18 per share, resulting in a dividend yield of 3.2%. This yield is higher than the Banks - Northeast industry's yield of 2.73% and the S&P 500's yield of 1.49% [3]. - The company's annualized dividend of $0.72 has increased by 1.4% from the previous year. Over the last five years, CNB Financial has raised its dividend two times, achieving an average annual increase of 1.20% [4]. - The current payout ratio for CNB Financial is 29%, indicating that the company paid out 29% of its trailing 12-month earnings per share as dividends [4]. Earnings Growth - The Zacks Consensus Estimate for CNB Financial's earnings in 2025 is $2.71 per share, reflecting a year-over-year earnings growth rate of 13.39% [5]. Investment Appeal - CNB Financial is characterized as an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [6].

Core Viewpoint - CNB Financial (CCNE) shares have recently experienced a decline of 5.9% over the past week, but the formation of a hammer chart pattern suggests potential support and a possible trend reversal in the future [1][2]. Technical Analysis - The hammer chart pattern indicates a minor difference between opening and closing prices, with a long lower wick, suggesting that the stock may have found support after a downtrend [4][5]. - This pattern typically signals that bears may have lost control, indicating a potential trend reversal if buying interest emerges [5]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for CCNE, which is considered a bullish indicator, as it often leads to price appreciation [7]. - The consensus EPS estimate for the current year has increased by 5% over the last 30 days, indicating that analysts expect better earnings than previously predicted [8]. - CCNE currently holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10].

Core Viewpoint - CNB Financial Corporation has successfully completed the merger with ESSA Bancorp, Inc., enhancing its branch network and market presence in the Northeastern Region of Pennsylvania [1][2]. Group 1: Merger Details - The merger was finalized on July 23, 2025, with ESSA's subsidiary bank, ESSA Bank & Trust, merging into CNB's subsidiary, CNB Bank [1]. - ESSA's 20 community offices will now operate under the brand of ESSA Bank, a division of CNB Bank, increasing CNB Bank's total branches to 78 across four states [2]. Group 2: Strategic Implications - CNB's President and CEO, Michael D. Peduzzi, expressed optimism about the merger, highlighting the cultural and service alignment between CNB and ESSA, which is expected to drive strategic asset and profitability growth [3]. - The merger is anticipated to strengthen relationships with customers, communities, and shareholders, ensuring a smooth transition [3]. Group 3: Advisory and Legal Support - Stephens Inc. acted as CNB's exclusive financial advisor, while Hogan Lovells US LLP provided legal advice [4]. - Piper Sandler & Co. and PNC FIG Advisory rendered fairness opinions to their respective boards [4]. Group 4: Company Overview - CNB Financial Corporation is a financial holding company with consolidated assets exceeding $8.0 billion, primarily operating through CNB Bank, which offers a full range of banking services [5]. - CNB Bank has a diverse operational structure, including various divisions and a significant presence in Pennsylvania, Ohio, New York, and Virginia [5].

Group 1: Earnings Performance - CNB Financial (CCNE) reported quarterly earnings of $0.63 per share, exceeding the Zacks Consensus Estimate of $0.58 per share, and up from $0.56 per share a year ago, representing an earnings surprise of +8.62% [1] - Over the last four quarters, CNB has surpassed consensus EPS estimates four times, with revenues of $61.8 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.46%, compared to year-ago revenues of $54.58 million [2] Group 2: Stock Performance and Outlook - CNB shares have declined approximately 4.5% since the beginning of the year, while the S&P 500 has gained 7.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Group 3: Earnings Estimate Revisions - The trend for estimate revisions for CNB was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - The current consensus EPS estimate for the coming quarter is $0.74 on revenues of $75.6 million, and $2.64 on revenues of $275 million for the current fiscal year [7] Group 4: Industry Context - The Zacks Industry Rank for Banks - Northeast, to which CNB belongs, is currently in the top 30% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

[Executive Summary and Key Financial Highlights](index=1&type=section&id=Executive%20Summary%20and%20Key%20Financial%20Highlights) CNB Financial Corporation reported strong Q2 2025 results, driven by increased net income, significant loan growth, improved net interest margin, and reduced nonperforming assets [Key Financial Trends Overview](index=1&type=section&id=Key%20Financial%20Trends%20Overview) CNB Financial Corporation achieved strong Q2 2025 results, marked by increased net income, significant loan growth, improved net interest margin, and reduced nonperforming assets | Metric | Q2 2025 (3 months ended June 30) | Q1 2025 (3 months ended March 31) | Change (QoQ) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :--------- | | Net Income (GAAP) | $12.9 million | $10.4 million | +$2.5 million | +24.04% | | Diluted EPS (GAAP) | $0.61 | $0.50 | +$0.11 | +22.00% | | Net Income (Excl. merger costs) | $13.2 million | $11.9 million | +$1.3 million | +10.92% | | Diluted EPS (Excl. merger costs) | $0.63 | $0.57 | +$0.06 | +10.53% | | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | Change (%) | | :-------------------------------- | :------------ | :------------- | :----------- | :--------- | | Loans (excl. syndicated) | $4.7 billion | $4.6 billion | +$113.7 million | +2.50% | | Total Deposits | $5.5 billion | $5.5 billion | +$7.0 million | +0.13% | | Net Interest Margin | 3.60% | 3.38% | +0.22% | +6.51% | | Nonperforming Assets | $30.4 million | $56.1 million | -$25.7 million | -45.81% | | Common Shareholders' Equity to Total Assets | 9.17% | 9.00% | +0.17% | +1.89% | - The decrease in nonperforming assets was primarily due to the resolution of approximately **$24.1 million** in non-performing assets[4](index=4&type=chunk) [Detailed Executive Summary](index=2&type=section&id=Detailed%20Executive%20Summary) Q2 2025 performance was driven by increased net interest income and non-interest income, robust loan growth, strategically managed deposits, strong liquidity, and reduced unrealized securities losses | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended March 31, 2025 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :---------------------------- | :--------------------------- | :--------------------------- | | Net Income (GAAP) | $12.9 million | $10.4 million | $23.3 million | $23.4 million | | Diluted EPS (GAAP) | $0.61 | $0.50 | $1.10 | $1.11 | | Net Income (Excl. merger costs) | $13.2 million | $11.9 million | $25.1 million | $23.4 million | | Diluted EPS (Excl. merger costs) | $0.63 | $0.57 | $1.19 | $1.11 | - Loans, excluding syndicated balances, increased by **$113.7 million** (**2.50%** QoQ, **10.04%** annualized) to **$4.7 billion** at June 30, 2025, driven by growth in ERIEBANK, Ridge View Bank, BankOnBuffalo, legacy CNB markets, and CNB Bank's Private Banking division[6](index=6&type=chunk) - Total deposits increased by **$7.0 million** (**0.13%** QoQ, **0.51%** annualized) to **$5.5 billion**, despite exiting/reducing **$77.7 million** in higher-cost municipal deposits. Excluding these, deposits increased by **$84.7 million** (**1.55%** QoQ, **6.22%** annualized)[6](index=6&type=chunk) - Total available liquidity sources were approximately **5.1 times** the estimated adjusted uninsured deposit balances as of June 30, 2025[8](index=8&type=chunk) - Pre-tax net unrealized losses on combined available-for-sale and held-to-maturity securities decreased to **$55.6 million** (**8.73%** of total shareholders' equity) at June 30, 2025, from **$61.7 million** (**9.88%**) at March 31, 2025[8](index=8&type=chunk) [CEO's Strategic Commentary](index=4&type=section&id=CEO%27s%20Strategic%20Commentary) CEO highlighted strong commercial loan growth, improved net interest margin, and strategic preparation for the ESSA Bancorp acquisition to expand assets and market footprint - Second quarter earnings and growth reflected positive momentum from continued commercial loan growth and demand, including realized deposit and relationship growth from Treasury Management activities[9](index=9&type=chunk) - The taxable-equivalent net interest margin increased by **22 basis points** compared to the first quarter, driven by increases in average loan yield and continued decreases in the cost of interest-bearing funds[9](index=9&type=chunk) - The acquisition of ESSA Bancorp, Inc. is scheduled to close on **July 23, 2025**, expected to significantly add to CNB's earning-asset base and market footprint, and to realize economies-of-scale cost efficiencies[9](index=9&type=chunk) [Financial Performance Analysis](index=5&type=section&id=Financial%20Performance%20Analysis) The Corporation demonstrated improved Q2 2025 profitability through increased net interest income, managed non-interest income and expenses, and strong key performance ratios [Earnings and Profitability](index=5&type=section&id=Earnings%20and%20Profitability) The Corporation demonstrated improved profitability in Q2 2025, with increased returns on equity and tangible common equity, and an improved efficiency ratio | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------------------------------- | :------ | :------ | :------ | | Annualized Return on Average Equity (GAAP) | 8.83% | 7.52% | 8.94% | | Annualized Return on Average Equity (Excl. merger costs) | 9.06% | 8.49% | 8.94% | | Annualized Return on Average Tangible Common Equity (GAAP) | 9.71% | 8.15% | 9.93% | | Annualized Return on Average Tangible Common Equity (Excl. merger costs) | 9.98% | 9.32% | 9.93% | | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--------------------------------------- | :------ | :------ | :------ | | Efficiency Ratio (GAAP) | 64.73% | 72.07% | 65.94% | | Efficiency Ratio (FTE, Non-GAAP) | 64.08% | 71.28% | 65.20% | | Adjusted Efficiency Ratio (FTE, Non-GAAP) | 63.50% | 68.62% | 65.20% | - The quarter-over-quarter decrease in the efficiency ratio was primarily driven by higher net interest income and non-interest income, and decreased non-interest expense[19](index=19&type=chunk) [Net Interest Income and Margin](index=5&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income and margin significantly increased in Q2 2025, driven by a favorable earning asset mix, higher yields, and lower interest-bearing liability costs | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Total Revenue | $61.2 million | $56.9 million | $54.6 million | | Net Interest Income | $52.2 million | $48.4 million | $45.7 million | | Net Interest Margin (GAAP) | 3.60% | 3.38% | 3.36% | | Net Interest Margin (FTE, Non-GAAP) | 3.59% | 3.37% | 3.34% | - The increase in net interest income of **$3.8 million** (**7.78%** QoQ, **31.19%** annualized) was primarily due to the change in the earning asset mix from interest-bearing deposits to loans, coupled with changes in the yield curve[19](index=19&type=chunk) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | :------ | | Yield on Earning Assets | 5.89% | 5.73% | 5.89% | | Cost of Interest-Bearing Liabilities | 2.88% | 2.93% | 3.17% | - The decrease in the cost of interest-bearing liabilities was primarily the result of the Corporation's targeted interest-bearing deposit rate decreases in response to Federal Reserve rate decreases since mid-September 2024[19](index=19&type=chunk) [Non-Interest Income](index=7&type=section&id=Non-Interest%20Income) Non-interest income rose quarter-over-quarter from wealth management and insurance, but decreased year-to-date due to lower fees and SBIC income | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------ | :------- | :------- | | Total Non-Interest Income | $9.0 million | $8.5 million | $8.9 million | $17.5 million | $17.8 million | - Quarter-over-quarter increase was primarily attributable to increases in wealth and asset management fees, bank owned life insurance revenue (death benefit), and an improvement in unrealized gains on equity securities[25](index=25&type=chunk) - Year-over-year decrease in non-interest income was primarily due to lower other charges and fees, coupled with lower pass-through income from small business investment companies (SBICs)[25](index=25&type=chunk) [Non-Interest Expense](index=7&type=section&id=Non-Interest%20Expense) Non-interest expense decreased QoQ (excl. merger costs) due to lower salaries, but increased YoY from higher staffing, occupancy, and card processing costs | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------ | :------- | :------- | | Total Non-Interest Expense | $39.6 million | $41.0 million | $36.0 million | $80.7 million | $73.4 million | | Total Non-Interest Expense (Excl. merger costs) | $39.3 million | $39.5 million | $36.0 million | $78.8 million | $73.4 million | - Quarter-over-quarter decrease (excluding merger costs) was primarily driven by a decrease in salaries and benefits due to a decrease in staffing levels and retirement plan contribution accruals, in anticipation of the ESSA acquisition[25](index=25&type=chunk) - Year-over-year increase (excluding merger costs) was primarily driven by higher salaries and benefits, increased occupancy expense (three additional full-service office locations), and increased card processing and interchange expenses[25](index=25&type=chunk) [Income Tax Expense](index=7&type=section&id=Income%20Tax%20Expense) Income tax expense increased slightly QoQ, with the effective tax rate stable around 19-20%, impacted by non-deductible merger costs | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------ | :------- | :------- | | Income Tax Expense | $3.3 million | $2.9 million | $3.0 million | $6.2 million | $5.9 million | | Effective Tax Rate | 19.10% | 19.96% | 19.03% | 19.49% | 18.70% | - The effective tax rate for the first and second quarters of 2025 was impacted by **non-deductible merger costs** of **$1.3 million** and **$357 thousand**, respectively[22](index=22&type=chunk) [Key Performance Ratios](index=11&type=section&id=Key%20Performance%20Ratios) The Corporation's Q2 2025 performance ratios showed improvements in return on average assets and equity, net interest margin, and efficiency ratio | Metric (Annualized) | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Return on Average Assets (GAAP) | 0.90% | 0.75% | 0.89% | 0.82% | 0.89% | | Adjusted Return on Average Assets (Non-GAAP) | 0.92% | 0.85% | 0.89% | 0.88% | 0.89% | | Return on Average Equity (GAAP) | 8.83% | 7.52% | 8.94% | 8.18% | 8.86% | | Adjusted Return on Average Equity (Non-GAAP) | 9.06% | 8.49% | 8.94% | 8.78% | 8.86% | | Return on Average Tangible Common Equity (Non-GAAP) | 9.71% | 8.15% | 9.93% | 8.95% | 9.85% | | Adjusted Return on Average Tangible Common Equity (Non-GAAP) | 9.98% | 9.32% | 9.93% | 9.66% | 9.85% | | Net Interest Margin, FTE (Non-GAAP) | 3.59% | 3.37% | 3.34% | 3.48% | 3.36% | | Efficiency Ratio, FTE (Non-GAAP) | 64.08% | 71.28% | 65.20% | 67.55% | 66.74% | | Adjusted Efficiency Ratio, FTE (Non-GAAP) | 63.50% | 68.62% | 65.20% | 65.97% | 66.74% | [Balance Sheet and Asset Quality](index=4&type=section&id=Balance%20Sheet%20and%20Asset%20Quality) The balance sheet reflects strong loan growth, strategically managed deposits, robust liquidity, improved asset quality, and a solid capital position [Loans and Deposits](index=4&type=section&id=Loans%20and%20Deposits) Strong loan growth across core markets and private banking, modest deposit growth with strategic municipal deposit reductions, and a high-quality loan portfolio | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :------------ | | Total Loans Receivable | $4,733,420 | $4,610,009 | $4,479,692 | | Syndicated Loans | $78,936 | $69,189 | $53,938 | | Total Deposits | $5,467,082 | $5,460,078 | $5,110,845 | | Noninterest-bearing demand deposits | $855,788 | $842,398 | $762,918 | - Commercial office loans totaled **$111.1 million** (**2.35%** of total loans), with **no nonaccrual loans** and two past-due loans totaling **$209 thousand**[15](index=15&type=chunk) - Commercial hospitality loans totaled **$321.2 million** (**6.79%** of total loans), with **no nonaccrual or past-due loans**[15](index=15&type=chunk) - Commercial multifamily loans totaled **$405.4 million** (**8.57%** of total loans), with **one nonaccrual and past-due loan** totaling **$199 thousand**[15](index=15&type=chunk) [Liquidity and Investment Portfolio](index=3&type=section&id=Liquidity%20and%20Investment%20Portfolio) Strong liquidity maintained with decreased unrealized investment losses, ensuring all regulatory capital ratios remain well-capitalized without short-term borrowings | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :------------ | | Cash equivalents at Federal Reserve | $332.2 million | $447.1 million | $271.9 million | | Total available liquidity sources | $4.6 billion (contingent) | N/A | N/A | | Pre-tax net unrealized losses on securities | $55.6 million | $61.7 million | $84.1 million | | Unrealized losses as % of shareholders' equity | 8.73% | 9.88% | 14.33% | - The Corporation had **no outstanding short-term borrowings** from the FHLB or the Federal Reserve's Discount Window at June 30, 2025, March 31, 2025, and June 30, 2024[8](index=8&type=chunk) - All regulatory capital ratios would still **exceed regulatory 'well-capitalized' levels** if net unrealized losses were fully recognized[8](index=8&type=chunk) [Asset Quality and Credit Losses](index=7&type=section&id=Asset%20Quality%20and%20Credit%20Losses) Asset quality improved significantly with decreased nonperforming assets, though provision for credit losses rose due to higher charge-offs and loan growth | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :------------ | | Total Nonperforming Assets | $30.4 million | $56.1 million | $36.5 million | | Nonperforming Assets as % of Total Assets | 0.48% | 0.89% | 0.62% | | Allowance for Credit Losses as % of Total Loans | 1.02% | 1.03% | 1.02% | | Allowance for Credit Losses as % of Nonaccrual Loans | 169.52% | 87.57% | 130.88% | | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Provision for Credit Losses | $4.3 million | $1.6 million | $2.6 million | $5.9 million | $3.9 million | | Net Loan Charge-offs | $3.3 million | $1.4 million | $2.8 million | $4.7 million | $4.1 million | | Annualized Net Loan Charge-offs / Average Total Loans | 0.28% | 0.13% | 0.25% | 0.21% | 0.19% | - The **$25.7 million** decrease in nonperforming assets was primarily due to paydowns from workout-related efforts on two larger nonaccrual loan relationships and resulting charge-offs[8](index=8&type=chunk) [Capital Position](index=8&type=section&id=Capital%20Position) The Corporation's capital position strengthened in Q2 2025, with increases in total shareholders' equity and key capital ratios, exceeding 'well-capitalized' levels | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :------------ | | Total Shareholders' Equity | $637.3 million | $624.5 million | $586.7 million | | Common Shareholders' Equity to Total Assets | 9.17% | 9.00% | 8.99% | | Tangible Common Equity to Tangible Assets (Non-GAAP) | 8.53% | 8.36% | 8.30% | | Tier 1 Leverage Ratio | 10.42% | 10.27% | 10.56% | | Common Equity Tier 1 Ratio | 11.78% | 11.85% | 11.71% | | Tier 1 Risk-Based Ratio | 13.38% | 13.50% | 13.41% | | Total Risk-Based Ratio | 16.14% | 16.30% | 16.20% | - The increase in total shareholders' equity was due to an increase in retained earnings (net income, partially offset by dividends) and a decrease in accumulated other comprehensive loss[29](index=29&type=chunk) - Regulatory capital ratios for the Corporation continue to **exceed regulatory 'well-capitalized' levels** as of June 30, 2025[29](index=29&type=chunk) [Book Value Metrics](index=4&type=section&id=Book%20Value%20Metrics) Book value and tangible book value per share increased QoQ and YoY (adjusted for merger costs), driven by retained earnings and reduced comprehensive loss | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :------------ | | Book Value Per Common Share (GAAP) | $27.44 | $27.01 | $25.19 | | Adjusted Book Value Per Common Share (Non-GAAP) | $27.53 | $27.08 | $25.19 | | Tangible Book Value Per Common Share (Non-GAAP) | $25.35 | $24.91 | $23.09 | | Adjusted Tangible Book Value Per Common Share (Non-GAAP) | $25.44 | $24.98 | $23.09 | - The increases in book value and tangible book value per common share (excluding merger costs) were primarily due to a **$9.1 million** increase in retained earnings and a **$3.0 million** decrease in accumulated other comprehensive loss quarter-over-quarter[11](index=11&type=chunk) [Corporate Information and Outlook](index=8&type=section&id=Corporate%20Information%20and%20Outlook) This section details the upcoming ESSA acquisition, provides a company overview, and outlines cautionary forward-looking statements [Recent Strategic Events](index=8&type=section&id=Recent%20Strategic%20Events) CNB Financial Corporation announced the upcoming ESSA Bancorp acquisition, with regulatory approvals received and legal merger scheduled for July 23, 2025 - CNB Financial Corporation entered into a definitive merger agreement with ESSA Bancorp, Inc. in an **all-stock transaction**, with each ESSA common stock share converting into **0.8547 shares** of CNB's common stock[28](index=28&type=chunk) - Requisite bank regulatory approvals and waivers have been received, and the transaction is **scheduled to close on July 23, 2025**[28](index=28&type=chunk) [About CNB Financial Corporation](index=9&type=section&id=About%20CNB%20Financial%20Corporation) CNB Financial Corporation, with **$6.3 billion** in assets, operates CNB Bank across multiple states and divisions, offering comprehensive financial services - CNB Financial Corporation is a financial holding company with consolidated assets of approximately **$6.3 billion**[30](index=30&type=chunk) - CNB Bank operates **55** full-service offices and other facilities across Pennsylvania, Ohio, New York, and Virginia, serving individual, business, governmental, and institutional customers[30](index=30&type=chunk) - The Corporation operates through multi-brand divisions including ERIEBANK, FCBank, BankOnBuffalo, Ridge View Bank, and Impressia Bank[30](index=30&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) Forward-looking statements carry risks from market changes, interest rates, credit, economic conditions, regulatory shifts, and acquisition integration challenges - Forward-looking statements are subject to **significant risks and uncertainties**, including adverse changes in capital and financial markets, changes in interest rates, credit risks of lending activities, and effectiveness of data security controls[31](index=31&type=chunk) - Risks also include the inability to achieve expected synergies and operating efficiencies from the ESSA merger, higher than expected integration costs, and changes in the quality or composition of loan and investment portfolios[31](index=31&type=chunk) - The Corporation undertakes **no obligation to publicly update or revise** any forward-looking statements, except as required by law[32](index=32&type=chunk) [Consolidated Financial Data](index=10&type=section&id=Consolidated%20Financial%20Data) This section provides detailed consolidated financial data, including income statement, average balances, ending balance sheet, and key capital and asset quality ratios [Income Statement](index=10&type=section&id=Income%20Statement) The consolidated income statement shows a QoQ increase in net interest income and net income available to common shareholders, despite higher provision for credit losses | Metric (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Interest and fees on loans | $75,408 | $72,379 | $72,142 | $147,787 | $143,655 | | Net interest income | $52,197 | $48,431 | $45,717 | $100,628 | $90,939 | | Provision for credit losses | $4,338 | $1,556 | $2,591 | $5,894 | $3,911 | | Total non-interest income | $9,008 | $8,507 | $8,865 | $17,515 | $17,820 | | Total non-interest expenses | $39,617 | $41,038 | $35,989 | $80,655 | $73,413 | | Net income available to common shareholders | $12,881 | $10,406 | $11,882 | $23,287 | $23,407 | | Diluted earnings per common share | $0.61 | $0.50 | $0.56 | $1.10 | $1.11 | [Average Balances, Income and Interest Rates (Taxable Equivalent Basis)](index=11&type=section&id=Average%20Balances%2C%20Income%20and%20Interest%20Rates%20%28Taxable%20Equivalent%20Basis%29) Average earning assets increased, yield improved, and cost of interest-bearing liabilities decreased, expanding the net interest margin on a fully tax-equivalent basis | Metric (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Average Total Loans and Loans Held for Sale | $4,668,051 | $4,591,395 | $4,441,633 | $4,629,956 | $4,435,246 | | Average Total Earning Assets | $5,817,121 | $5,803,526 | $5,465,645 | $5,810,364 | $5,407,954 | | Average Interest-Bearing Deposits | $4,558,732 | $4,574,700 | $4,321,678 | $4,566,673 | $4,275,406 | | Average Yield on Total Earning Assets | 5.89% | 5.73% | 5.89% | 5.81% | 5.85% | | Average Cost of Interest-Bearing Liabilities | 2.88% | 2.93% | 3.17% | 2.90% | 3.10% | | Net Interest Margin (FTE) | 3.59% | 3.37% | 3.34% | 3.48% | 3.36% | - The yield on earning assets for Q2 2025 increased by **16 basis points** from Q1 2025, attributable to quarter-over-quarter increases in the yield on both the loan and securities portfolios[19](index=19&type=chunk) - The cost of interest-bearing liabilities decreased by **5 basis points** from Q1 2025 and **29 basis points** from Q2 2024, primarily due to targeted interest-bearing deposit rate decreases[19](index=19&type=chunk) [Ending Balance Sheet](index=12&type=section&id=Ending%20Balance%20Sheet) The ending balance sheet reflects growth in total assets, loans, and deposits, with increased shareholders' equity due to retained earnings and reduced comprehensive loss | Metric (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :------------ | | Total Assets | $6,318,477 | $6,295,508 | $5,886,571 | | Total Loans Receivable | $4,733,420 | $4,610,009 | $4,479,692 | | Total Deposits | $5,467,082 | $5,460,078 | $5,110,845 | | Total Liabilities | $5,681,196 | $5,671,000 | $5,299,871 | | Total Shareholders' Equity | $637,281 | $624,508 | $586,700 | | Book Value Per Common Share | $27.44 | $27.01 | $25.19 | | Tangible Book Value Per Common Share (Non-GAAP) | $25.35 | $24.91 | $23.09 | [Capital and Asset Quality Ratios](index=13&type=section&id=Capital%20and%20Asset%20Quality%20Ratios) Capital ratios remained strong and above well-capitalized levels, with significant improvement in asset quality ratios and nonperforming assets coverage | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :------------ | | Tangible Common Equity / Tangible Assets (Non-GAAP) | 8.53% | 8.36% | 8.30% | | Tier 1 Leverage Ratio | 10.42% | 10.27% | 10.56% | | Common Equity Tier 1 Ratio | 11.78% | 11.85% | 11.71% | | Total Nonperforming Assets | $30,389 | $56,051 | $36,541 | | Nonperforming Assets / Total Assets | 0.48% | 0.89% | 0.62% | | Ratio of Allowance for Credit Losses on Loans to Nonaccrual Loans | 169.52% | 87.57% | 130.88% | | Allowance for Credit Losses / Total Loans | 1.02% | 1.03% | 1.02% | - Capital ratios as of June 30, 2025, are estimated pending final regulatory filings[37](index=37&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=16&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to non-GAAP financial measures, adjusting for merger costs to provide clearer insights into operational performance [Merger Costs, Net of Tax](index=16&type=section&id=Merger%20Costs%2C%20Net%20of%20Tax) This section details the calculation of merger costs, distinguishing between deductible and non-deductible components, presented net of tax for Q2 and YTD 2025 | Metric (in thousands) | Q2 2025 | Q1 2025 | YTD 2025 | | :--------------------------------------- | :------ | :------ | :------- | | Merger costs - non deductible | $357 | $1,327 | $1,684 | | Merger costs - deductible | $0 | $202 | $202 | | Tax benefit of merger costs (non-GAAP) | $0 | $42 | $42 | | Merger costs, net of tax (non-GAAP) | $357 | $1,487 | $1,844 | [Adjusted Net Income Available to Common Shareholders](index=16&type=section&id=Adjusted%20Net%20Income%20Available%20to%20Common%20Shareholders) This reconciliation adjusts GAAP net income available to common shareholders by adding back merger costs, net of tax, for clearer operational performance | Metric (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Net income available to common shareholders (GAAP) | $12,881 | $10,406 | $11,882 | $23,287 | $23,407 | | Add: Merger costs, net of tax (non-GAAP) | $357 | $1,487 | $0 | $1,844 | $0 | | Adjusted net income available to common shareholders (non-GAAP) | $13,238 | $11,893 | $11,882 | $25,131 | $23,407 | [Adjusted Pre-Provision Net Revenue (PPNR)](index=16&type=section&id=Adjusted%20Pre-Provision%20Net%20Revenue%20%28PPNR%29) The adjusted PPNR calculation removes merger costs from non-interest expense, offering insight into capital generation before credit losses and unusual items | Metric (in thousands) | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | PPNR (non-GAAP) | $21,588 | $15,900 | $18,593 | $37,488 | $35,346 | | Add: Merger costs | $357 | $1,529 | $0 | $1,886 | $0 | | Adjusted PPNR (non-GAAP) | $21,945 | $17,429 | $18,593 | $39,374 | $35,346 | [Adjusted Earnings Per Common Share](index=17&type=section&id=Adjusted%20Earnings%20Per%20Common%20Share) This section reconciles basic and diluted earnings per common share, adjusted for merger costs, net of tax, for a normalized view of profitability | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Diluted earnings per common share (GAAP) | $0.61 | $0.50 | $0.56 | $1.10 | $1.11 | | Adjusted diluted earnings per common share (non-GAAP) | $0.63 | $0.57 | $0.56 | $1.19 | $1.11 | [Adjusted Dividend Payout Ratio](index=18&type=section&id=Adjusted%20Dividend%20Payout%20Ratio) The adjusted dividend payout ratio uses adjusted diluted EPS, offering a more representative measure of earnings distributed as dividends, excluding merger costs | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Dividend payout ratio (GAAP) | 30% | 36% | 31% | 33% | 32% | | Adjusted dividend payout ratio (non-GAAP) | 29% | 32% | 31% | 30% | 32% | [Adjusted Net Interest Margin (Fully Tax Equivalent Basis)](index=18&type=section&id=Adjusted%20Net%20Interest%20Margin%20%28Fully%20Tax%20Equivalent%20Basis%29) This reconciliation presents the net interest margin on a fully tax-equivalent basis, adjusting interest income for tax benefits of tax-exempt securities and loans | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Net interest margin (GAAP) (annualized) | 3.60% | 3.38% | 3.36% | 3.49% | 3.38% | | Net interest margin (fully tax equivalent basis) (non-GAAP) (annualized) | 3.59% | 3.37% | 3.34% | 3.48% | 3.36% | [Adjusted Tangible Book Value Per Common Share and Tangible Common Equity / Tangible Assets](index=19&type=section&id=Adjusted%20Tangible%20Book%20Value%20Per%20Common%20Share%20and%20Tangible%20Common%20Equity%20%2F%20Tangible%20Assets) This section reconciles GAAP book value and equity to tangible measures, adjusted for merger costs, offering a conservative view of equity and asset quality | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :------------ | | Book value per common share (GAAP) | $27.44 | $27.01 | $25.19 | | Tangible book value per common share (non-GAAP) | $25.35 | $24.91 | $23.09 | | Adjusted book value per common share (non-GAAP) | $27.53 | $27.08 | $25.19 | | Adjusted tangible book value per common share (non-GAAP) | $25.44 | $24.98 | $23.09 | | Common shareholders' equity / Total assets (GAAP) | 9.17% | 9.00% | 8.99% | | Tangible common equity / Tangible assets (non-GAAP) | 8.53% | 8.36% | 8.30% | | Adjusted tangible common equity / Adjusted tangible assets (non-GAAP) | 8.56% | 8.38% | 8.30% | [Adjusted Efficiency Ratio (Fully Tax Equivalent Basis)](index=20&type=section&id=Adjusted%20Efficiency%20Ratio%20%28Fully%20Tax%20Equivalent%20Basis%29) The adjusted efficiency ratio, on a fully tax-equivalent basis and excluding merger costs, provides a refined measure of operational efficiency | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Efficiency ratio (GAAP) | 64.73% | 72.07% | 65.94% | 68.27% | 67.50% | | Efficiency ratio (fully tax equivalent basis) (non-GAAP) | 64.08% | 71.28% | 65.20% | 67.55% | 66.74% | | Adjusted efficiency ratio (fully tax equivalent basis) (non-GAAP) | 63.50% | 68.62% | 65.20% | 65.97% | 66.74% | [Adjusted Return on Average Assets](index=21&type=section&id=Adjusted%20Return%20on%20Average%20Assets) This reconciliation adjusts GAAP return on average assets by adding back merger costs, net of tax, for a more accurate representation of asset profitability | Metric (annualized) | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Return on average assets (GAAP) | 0.90% | 0.75% | 0.89% | 0.82% | 0.89% | | Adjusted return on average assets (non-GAAP) | 0.92% | 0.85% | 0.89% | 0.88% | 0.89% | [Adjusted Total Deposits](index=21&type=section&id=Adjusted%20Total%20Deposits) This reconciliation adjusts total deposits by including high-cost municipal deposits that were exited/reduced, providing a view of deposit levels before adjustments | Metric (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--------------------------------------- | :------------ | :------------- | :------------ | | Total deposits (GAAP) | $5,467,082 | $5,460,078 | $5,110,845 | | Add: High cost municipal deposits | $77,690 | $0 | $0 | | Adjusted total deposits (non-GAAP) | $5,544,772 | $5,460,078 | $5,110,845 | [Adjusted Return on Average Tangible Common Equity](index=22&type=section&id=Adjusted%20Return%20on%20Average%20Tangible%20Common%20Equity) This reconciliation provides the return on average tangible common equity, adjusted for merger costs, offering a refined measure of profitability relative to tangible common equity | Metric (annualized) | Q2 2025 | Q1 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--------------------------------------- | :------ | :------ | :------ | :------- | :------- | | Return on average tangible common equity (non-GAAP) | 9.71% | 8.15% | 9.93% | 8.95% | 9.85% | | Adjusted return on average tangible common equity (non-GAAP) | 9.98% | 9.32% | 9.93% | 9.66% | 9.85% |

Core Insights - CNB Financial Corporation reported net income of $12.9 million, or $0.61 per diluted share, for the three months ended June 30, 2025, reflecting an increase from $10.4 million, or $0.50 per diluted share, for the previous quarter [4][5] - The Corporation's total loans reached $4.7 billion as of June 30, 2025, marking a quarterly increase of $113.7 million, or 2.50% [4][5] - Total deposits were $5.5 billion at June 30, 2025, with a quarterly increase of $7.0 million, or 0.13% [4][5] - The net interest margin improved to 3.60% for the three months ended June 30, 2025, compared to 3.38% for the previous quarter [4][5] - Nonperforming assets decreased to approximately $30.4 million, or 0.48% of total assets, as of June 30, 2025, down from $56.1 million, or 0.89% of total assets, at March 31, 2025 [10][31] - The Corporation's total shareholders' equity increased to $637.3 million as of June 30, 2025, representing a 2.05% increase from the previous quarter [31] Financial Performance - Earnings for the six months ended June 30, 2025, were $23.3 million, or $1.10 per diluted share, with an increase in net interest income contributing to this growth [4][5] - The annualized return on average equity was 8.83% for the three months ended June 30, 2025, up from 7.52% for the previous quarter [17][19] - Total revenue for the three months ended June 30, 2025, was $61.2 million, an increase from $56.9 million in the previous quarter [20][21] Loan and Deposit Growth - The loan portfolio increased by $113.7 million, or 2.50%, compared to the previous quarter, driven by growth in various banking divisions [5][12] - Total deposits increased by $7.0 million, or 0.13%, with a year-over-year increase of $356.2 million, or 6.97% [5][12] Asset Quality - The allowance for credit losses was 1.02% of total loans as of June 30, 2025, slightly down from 1.03% in the previous quarter [31] - Net loan charge-offs for the three months ended June 30, 2025, were $3.3 million, or 0.28% of average total loans, compared to $1.4 million, or 0.13%, in the previous quarter [31] Capital and Regulatory Ratios - The Corporation's ratio of common shareholders' equity to total assets was 9.17% as of June 30, 2025, compared to 9.00% at March 31, 2025 [31] - Regulatory capital ratios continue to exceed "well-capitalized" levels as of June 30, 2025 [31][6] Recent Events - The Corporation is set to close its acquisition of ESSA Bancorp, Inc. on July 23, 2025, which is expected to enhance its earning-asset base and market footprint [8][30][32]

Company Overview - CNB Financial (CCNE) is headquartered in Clearfield and operates in the Finance sector, with a stock price change of -4.67% since the beginning of the year [3] - The company currently pays a dividend of $0.18 per share, resulting in a dividend yield of 3.04%, which is higher than the Banks - Northeast industry's yield of 2.72% and the S&P 500's yield of 1.52% [3] Dividend Analysis - The current annualized dividend of CNB Financial is $0.72, reflecting a 1.4% increase from the previous year [4] - Over the past 5 years, CNB Financial has increased its dividend twice on a year-over-year basis, with an average annual increase of 1.20% [4] - The company's current payout ratio is 30%, indicating that it pays out 30% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for CNB Financial's earnings in 2025 is $2.64 per share, which represents a year-over-year earnings growth rate of 10.46% [5] - The company is viewed as an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [6]

Company Overview - CNB Financial (CCNE) is a bank holding company headquartered in Clearfield, with a year-to-date price change of -3.46% [3] - The company currently pays a dividend of $0.18 per share, resulting in a dividend yield of 3%, which is higher than the Banks - Northeast industry's yield of 2.78% and the S&P 500's yield of 1.53% [3] Dividend Performance - The current annualized dividend of CNB Financial is $0.72, reflecting a 1.4% increase from the previous year [4] - Over the past five years, CNB Financial has increased its dividend two times year-over-year, with an average annual increase of 1.17% [4] - The company's current payout ratio is 30%, indicating that it pays out 30% of its trailing 12-month earnings per share as dividends [4] Earnings Expectations - CNB Financial is expected to see earnings growth in the current fiscal year, with the Zacks Consensus Estimate for 2025 at $2.64 per share, representing a 10.46% increase from the previous year [5] Investment Appeal - Dividends are favored by investors for various reasons, including tax advantages and reduced overall portfolio risk, which can enhance stock investing profits [6] - High-growth firms typically do not provide dividends, while established companies with secure profits are viewed as better dividend options [7] - CNB Financial is considered an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [7]