Financial Performance - Total assets increased to $8,254,319 thousand as of September 30, 2025, up from $6,192,010 thousand at December 31, 2024, representing a growth of 33.4%[15] - Net income for Q3 2025 was $7,045,000, a decrease of 49.6% compared to $13,954,000 in Q3 2024[18] - Comprehensive income for Q3 2025 was $9,947,000, down from $24,048,000 in Q3 2024, reflecting a decline of 58.7%[18] - Net income for the nine months ended September 30, 2025, was $32,482 thousand, a decrease from $39,511 thousand in the same period of 2024, representing a decline of approximately 18.4%[22] - Basic earnings per common share for Q3 2025 was $0.22, down from $0.61 in Q3 2024, a decrease of 63.6%[17] - The company reported a significant increase in salaries to $15,597 million in Q3 2025, up from $13,726 million in Q3 2024, reflecting investment in human resources[192] Loan and Credit Quality - Net loans receivable rose to $6,400,512 thousand, compared to $4,561,599 thousand in the previous period, marking an increase of 40.3%[15] - Provision for credit loss expense significantly increased to $18,456,000 in Q3 2025 from $2,381,000 in Q3 2024, indicating a rise in expected credit losses[17] - The allowance for credit losses increased to $67,684 thousand from $47,357 thousand, indicating a rise of 42.9%[15] - The total provision for credit losses for the nine months ended September 30, 2025, was $5.936 billion, significantly impacting the overall financial performance[87] - The allowance for credit losses for owner-occupied, nonfarm nonresidential properties increased to $6.704 billion, reflecting a charge-off of $1.516 billion[87] - The Corporation's allowance for credit losses is influenced by loan volumes, risk rating migration, and economic forecasts[89] Deposits and Funding - Total deposits grew to $6,900,267 thousand, up from $5,371,364 thousand, reflecting a 28.5% increase[15] - The company experienced a net increase in checking, money market, and savings accounts of $155,024 thousand in 2025, compared to $70,861 thousand in 2024, indicating a growth of approximately 118.0%[22] - Brokered deposits increased to $261.9 million as of September 30, 2025, compared to $185.0 million at December 31, 2024[131] - Total loans pledged to the Federal Home Loan Bank (FHLB) were $3.6 billion as of September 30, 2025, up from $2.1 billion at December 31, 2024[134] Merger and Acquisition - The company is focused on integrating operations following the merger with ESSA Bancorp, Inc., aiming for expected synergies and efficiencies[12] - The acquisition of ESSA Bancorp and ESSA Bank contributed $202,549,000 to additional paid-in capital[19] - The total consideration paid to ESSA shareholders was approximately $202.6 million, consisting of about 8,359,430 shares valued at approximately $202.5 million and $21 thousand in cash for fractional shares[51] - The Corporation incurred merger and integration costs of $4.2 million for the three months and $6.0 million for the nine months ended September 30, 2025[52] Non-Interest Income and Expenses - Non-interest income totaled $10,566,000 in Q3 2025, slightly down from $10,973,000 in Q3 2024, showing a decrease of 3.7%[17] - Total non-interest expenses increased to $50,157,000 in Q3 2025, up from $38,784,000 in Q3 2024, marking a 29.4% rise[17] - Total non-interest income for the nine months ended September 30, 2025, was $28,081 million, slightly down from $28,793 million in the same period of 2024[192] Cash Flow and Investments - Net cash provided by operating activities decreased to $38,879 thousand in 2025 compared to $49,271 thousand in 2024, reflecting a decline of about 21.0%[22] - The company reported net cash provided by investing activities of $62,086 thousand in 2025, a significant improvement compared to a net cash used of $113,594 thousand in 2024[22] - Cash dividends declared for common stock were $12,885 thousand in 2025, compared to $11,134 thousand in 2024, representing an increase of approximately 15.7%[22] Asset Management - The total liabilities increased to $7,410,134 thousand, up from $5,581,315 thousand, representing a growth of 32.7%[15] - The total cash and cash equivalents at the end of September 2025 were $438,088 thousand, up from $360,909 thousand at the end of September 2024, marking an increase of approximately 21.4%[23] - The fair value of debt securities available-for-sale was $533.55 million as of September 30, 2025, with an amortized cost of $569.24 million[68] Risk Management - Future performance may be impacted by changes in interest rates and credit risks associated with lending activities[12] - The company anticipates potential challenges from economic conditions and competition affecting its operations and market position[12] - Significant uncertainty regarding the economy persists due to elevated interest rates and geopolitical conflicts, prompting management to evaluate expected credit losses proactively[90]

Core Insights - CNB Financial (CCNE) reported quarterly earnings of $0.82 per share, exceeding the Zacks Consensus Estimate of $0.78 per share, and up from $0.61 per share a year ago, representing an earnings surprise of +5.13% [1] - The company achieved revenues of $78.41 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.40% and increasing from $59.11 million year-over-year [2] - CNB has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.83 on revenues of $83.9 million, and for the current fiscal year, it is $2.71 on revenues of $280.5 million [7] - The estimate revisions trend for CNB was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Banks - Northeast industry, to which CNB belongs, is currently ranked in the top 14% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income for the third quarter of 2025 was $6.0 million, or $0.22 per diluted share, a decrease from $12.9 million, or $0.61 per diluted share, in the previous quarter[5] - Adjusted earnings for the third quarter of 2025 were $22.5 million, or $0.82 per diluted share, reflecting a 70.17% increase compared to adjusted earnings of $13.2 million, or $0.63 per diluted share, for the previous quarter[8] - Total revenue for the three months ended September 30, 2025, was $77.7 million, an increase of $16.5 million, or 26.94%, from $61.2 million for the three months ended June 30, 2025[22] - Net income available to common shareholders for Q3 2025 was $5,969,000, a decrease from $12,881,000 in Q2 2025 and $12,878,000 in Q3 2024[44] - Adjusted net income available to common shareholders for the nine months ended September 30, 2025, was $47,582 thousand, up from $36,285 thousand in 2024, marking a 31.2% increase[42] Asset and Loan Growth - Total loans as of September 30, 2025, were $6.4 billion, with organic loan growth of $90.8 million, or 1.95% (7.74% annualized), compared to June 30, 2025[8] - Total assets reached $7,783,995,000 as of September 30, 2025, compared to $6,235,036,000 at the end of the previous quarter, marking a 24.8% growth[36] - Average loans and loans held for sale increased to $5,971,441,000 for the three months ended September 30, 2025, from $4,668,051,000 in the previous quarter, representing a 27.9% rise[36] - Total loans receivable rose to $5,971,441 thousand, an increase of 27.9% compared to $4,668,051 thousand in the previous quarter[40] Deposit Growth - Total deposits reached $6.9 billion, with organic deposit growth of $70.2 million, or 1.28% (5.10% annualized), compared to June 30, 2025[8] - Total deposits as of September 30, 2025, were $6,900,267,000, an increase from $5,467,082,000 in Q2 2025 and $5,216,949,000 in Q3 2024[43] Interest Income and Margin - Net interest income for the three months ended September 30, 2025, was $67.1 million, reflecting an increase of $14.9 million, or 28.61%, from $52.2 million for the three months ended June 30, 2025[22] - The net interest margin improved to 3.69% for the third quarter of 2025, up from 3.60% in the previous quarter[5] - Interest income for Q3 2025 reached $108,645,000, up 26.6% from $85,771,000 in Q2 2025 and 30.6% from $83,235,000 in Q3 2024[45] Non-Interest Income and Expenses - Total non-interest income for the three months ended September 30, 2025, was $10.6 million, including $391 thousand from fee-based sources acquired from the ESSA acquisition[23] - Total non-interest expense for Q3 2025 was $50.2 million, up 17.17% from $39.6 million in Q2 2025, primarily due to increased salaries and benefits related to the ESSA acquisition[28] - Non-interest income totaled $10,566,000 for the three months ended September 30, 2025, up from $9,008,000 in the previous quarter, reflecting a 17.3% increase[35] Credit Quality and Allowance for Losses - Total nonperforming assets increased to approximately $40.4 million, or 0.49% of total assets, as of September 30, 2025, compared to $30.4 million, or 0.48% of total assets, as of June 30, 2025[5] - The allowance for credit losses was 1.05% of total loans as of September 30, 2025, up from 1.02% in Q2 2025[29] - Provision for credit losses was $18.5 million for Q3 2025, significantly higher than $4.3 million in Q2 2025, driven by a $16.4 million reserve for non-PCD loans from the ESSA acquisition[29] Shareholder Equity - Total shareholders' equity as of September 30, 2025, was $844.2 million, an increase of 32.47% from $637.3 million in Q2 2025[32] - The ratio of common shareholders' equity to total assets improved to 9.53% as of September 30, 2025, compared to 9.17% in Q2 2025[32] - Common shareholders' equity increased to $786,400,000 in Q3 2025, up 35.7% from $579,496,000 in Q2 2025 and 43.3% from $548,578,000 in Q3 2024[46] Efficiency and Returns - The efficiency ratio improved to 64.56% for the three months ended September 30, 2025, down from 64.73% for the three months ended June 30, 2025, with a fully tax-equivalent basis efficiency ratio of 57.67% when excluding merger costs[22] - The annualized return on average equity was 3.60% for the three months ended September 30, 2025, compared to 8.83% for the three months ended June 30, 2025, but 12.05% when excluding after-tax merger transaction related expenses[22] - Adjusted return on average equity (non-GAAP) for Q3 2025 was 12.05%, an increase from 9.06% in Q2 2025 and 9.28% in Q3 2024[49]

Core Insights - CNB Financial Corporation reported earnings of $6.0 million, or $0.22 per diluted share, for the three months ended September 30, 2025, a decrease from $12.9 million, or $0.61 per diluted share, for the previous quarter [6][7] - The acquisition of ESSA Bancorp, completed on July 23, 2025, added total assets of $2.1 billion, including $1.7 billion in loans and $1.5 billion in deposits, expanding CNB Bank's branch network by 20 offices [2][10] - Adjusted earnings for the third quarter of 2025 were $22.5 million, or $0.82 per diluted share, reflecting a 70.17% increase from the previous quarter [8][12] Financial Performance - Total revenue for the three months ended September 30, 2025, was $77.7 million, compared to $61.2 million for the previous quarter [22] - Net interest income increased to $67.1 million for the third quarter of 2025, up from $52.2 million in the second quarter [22] - The net interest margin was 3.69% for the third quarter of 2025, compared to 3.60% for the previous quarter [22] Loan and Deposit Growth - Total loans were $6.4 billion as of September 30, 2025, with organic loan growth of $90.8 million, or 1.95% for the quarter [8][12] - Total deposits reached $6.9 billion, with organic deposit growth of $70.2 million, or 1.28% for the quarter [8][12] - The increase in deposits was primarily driven by growth in Treasury Management-sourced business deposits [12] Credit Quality - Total nonperforming assets were approximately $40.4 million, or 0.49% of total assets, as of September 30, 2025, an increase from $30.4 million, or 0.48% of total assets, in the previous quarter [12][32] - Net loan charge-offs were $957 thousand, or 0.06% of average total loans, for the third quarter of 2025, down from $3.3 million, or 0.28% in the previous quarter [12][32] Capital and Equity - The Corporation's total shareholders' equity was $844.2 million as of September 30, 2025, an increase of 32.47% from the previous quarter [31] - The ratio of common shareholders' equity to total assets was 9.53% as of September 30, 2025, compared to 9.17% at June 30, 2025 [7][31] Strategic Initiatives - The acquisition of ESSA Bancorp is seen as a significant milestone, expanding CNB's asset base to over $8 billion and enhancing its operational scale [10][11] - The integration of ESSA's operations is progressing positively, with expected cost savings and earnings accretion meeting or exceeding pre-merger expectations [11][12]

Company Overview - CNB Financial (CCNE) is headquartered in Clearfield and operates in the Finance sector [3] - The stock has experienced a price change of -1.93% since the beginning of the year [3] Dividend Information - CNB Financial currently pays a dividend of $0.18 per share, resulting in a dividend yield of 2.95% [3] - The dividend yield of the Banks - Northeast industry is 2.63%, while the S&P 500's yield is 1.49% [3] - The company's annualized dividend of $0.72 has increased by 1.4% from the previous year [4] - Over the last 5 years, CNB Financial has increased its dividend twice on a year-over-year basis, averaging an annual increase of 1.20% [4] - The current payout ratio is 29%, indicating that the company paid out 29% of its trailing 12-month EPS as dividends [4] Earnings Growth Expectations - For the fiscal year, CCNE anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 at $2.71 per share, reflecting a year-over-year growth rate of 13.39% [5] Investment Considerations - High-yielding stocks may struggle during periods of rising interest rates, but CCNE is considered a compelling investment opportunity due to its strong dividend profile [6] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a stable investment outlook [6]

[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]