Financial Performance - Net income for Q1 2025 was $11,481 thousand, down from $12,600 thousand in Q1 2024, indicating a decrease of 8.9%[17] - Comprehensive income for Q1 2025 was $18,542 thousand, compared to $11,475 thousand in Q1 2024, an increase of 62.0%[17] - Basic earnings per common share decreased to $0.50 for the three months ended March 31, 2025, compared to $0.55 in 2024, with net income allocated to common stock at $10,349 thousand versus $11,433 thousand[127] - The segment net income for the three months ended March 31, 2025, is $11,481 million, a decrease from $12,600 million in the same period of 2024[152] Assets and Liabilities - Total assets increased to $6,295,508 thousand as of March 31, 2025, up from $6,192,010 thousand at December 31, 2024, representing a growth of 1.67%[14] - Cash and cash equivalents at the end of Q1 2025 were $520,157,000, up from $301,453,000 at the end of Q1 2024, representing an increase of 72.5%[21] - The corporation's total shareholders' equity increased to $624,508,000 as of March 31, 2025, from $578,640,000 as of March 31, 2024, marking an increase of 7.9%[18] - Total deposits rose to $5,460,078 thousand as of March 31, 2025, compared to $5,371,364 thousand at the end of 2024, marking an increase of 1.65%[14] Income and Expenses - Net interest income for the three months ended March 31, 2025, was $48,431 thousand, compared to $45,222 thousand for the same period in 2024, reflecting an increase of 4.9%[16] - Non-interest expenses totaled $41,038 thousand for Q1 2025, compared to $37,424 thousand in Q1 2024, reflecting an increase of 9.0%[16] - Total cash provided by operating activities in Q1 2025 was $11,599,000, compared to $12,460,000 in Q1 2024, reflecting a decline of 6.9%[20] Credit Losses and Provisions - The provision for credit loss expense increased to $1,556 thousand in Q1 2025 from $1,320 thousand in Q1 2024, a rise of 17.9%[16] - The allowance for credit losses remained constant at $47,357 million for both March 31, 2025, and December 31, 2024[53] - The provision for credit losses was $1.6 million for the three months ended March 31, 2025, compared to $1.3 million for the same period in 2024, reflecting an increase of approximately 23%[58] Loans and Receivables - As of March 31, 2025, total net loans receivable amounted to $4,610,009 million, slightly increasing from $4,608,956 million as of December 31, 2024[53] - The total loans amount remained stable at $47.357 billion as of March 31, 2025, despite fluctuations in charge-offs and recoveries[56] - The total past due loans amounted to $51,127, with not past due loans totaling $4,558,882, leading to a total of $4,610,009 in loans receivable[61] Securities and Investments - The Corporation's total available-for-sale (AFS) debt securities amounted to $559.354 million as of March 31, 2025, with a fair value of $516.442 million[42] - The fair value of debt securities available-for-sale as of March 31, 2025, is $516,442 million, consistent with the carrying amount[146] - The Corporation's total debt securities include $398.702 million in residential and multi-family mortgage securities[43] Mergers and Acquisitions - The merger with ESSA Bancorp, Inc. is pending governmental approvals, which may affect future results and operations[11] Dividends - The company declared cash dividends of $0.180 per share in Q1 2025, up from $0.175 per share in Q1 2024, representing a 2.86% increase[16] - The corporation declared cash dividends of $3,777,000 for common stock in Q1 2025, slightly higher than $3,680,000 in Q1 2024[20] Economic Outlook - Management continues to evaluate expected credit losses due to uncertainties in the domestic and global economy, including elevated interest rates and geopolitical conflicts[57] - The company is focusing on maintaining a healthy loan portfolio while exploring opportunities for market expansion and new product development[86]

Financial Performance - Net income for Q1 2025 was $10.4 million, or $0.50 per diluted share, a decrease of 14.98% from Q4 2024[4] - Total revenue for the three months ended March 31, 2025, was $56.9 million, an increase compared to $54.2 million for the same period in 2024[1] - Net income for Q1 2025 was $11,481,000, down 23.5% from $15,064,000 in Q4 2024, but up 9.0% from $12,600,000 in Q1 2024[30] - Adjusted net income available to common shareholders was $11,893 thousand for Q1 2025, reflecting a decrease from $13,988 thousand in the previous quarter[41] - The diluted earnings per common share for Q1 2025 was $0.50, down from $0.66 in Q4 2024 and $0.55 in Q1 2024[30] Loan and Deposit Growth - Total loans reached $4.5 billion, reflecting a quarterly increase of $11.7 million, or 0.26%, and a year-over-year increase of $188.1 million, or 4.32%[4] - Total deposits increased to $5.5 billion, up $88.7 million, or 1.65% quarterly, and $422.5 million, or 8.39% year-over-year[4] - Average loans and loans held for sale rose to $4,591,395,000 in Q1 2025, up 0.8% from $4,556,770,000 in Q4 2024 and up 3.7% from $4,428,751,000 in Q1 2024[31] - Total deposits grew to $5,460,078,000 in Q1 2025, an increase of 1.7% from $5,371,364,000 in Q4 2024[32] Asset Quality - Nonperforming assets were approximately $56.1 million, or 0.89% of total assets, down from 0.96% in Q4 2024[6] - Total nonperforming assets were approximately $56.1 million, or 0.89% of total assets, as of March 31, 2025, down from $59.5 million, or 0.96%, at the end of 2024[4] - Total nonperforming loans decreased to $54,387 thousand from $56,976 thousand year-over-year, reflecting improved asset quality[33] - The allowance for credit losses as a percentage of total loans was 1.03% as of March 31, 2025, consistent with the previous year[4] Revenue and Expenses - Net interest income was $48.4 million for the three months ended March 31, 2025, a decrease of $613 thousand, or 1.25%, from the previous quarter[1] - Total non-interest expense was $41.0 million for the three months ended March 31, 2025, with an increase of $1.7 million, or 4.51%, from the previous quarter[2] - Total non-interest income decreased to $8,507,000 in Q1 2025 from $10,321,000 in Q4 2024, representing a decline of 17.5%[30] - The provision for credit losses was $1.6 million for the three months ended March 31, 2025, compared to $2.9 million in the previous quarter[3] Capital and Equity - The Corporation's total shareholders' equity was $624.5 million as of March 31, 2025, representing an increase of $45.9 million, or 7.93%, from the same period in 2024[4] - Common shareholders' equity rose to $566,723 thousand, a 2.93% increase from $552,910 thousand at December 31, 2024[39] - Tangible common equity increased to $522,659 thousand, a 2.63% rise from $508,830 thousand at December 31, 2024[39] - Book value per common share increased to $27.01, up from $26.34 at the end of Q4 2024, and tangible book value per common share was $24.91[9] Efficiency and Ratios - The efficiency ratio was 72.07% for the three months ended March 31, 2025, compared to 63.02% for the same period in 2024[1] - The efficiency ratio for the first quarter of 2025 was 72.07%, compared to 63.68% in the previous quarter, indicating a decline in operational efficiency[40] - The net interest margin (fully tax equivalent) was 3.37% for the three months ended March 31, 2025, compared to 3.43% in the previous quarter[35] - Annualized return on average equity was 7.52% for the three months ended March 31, 2025, down from 9.79% in the same quarter of 2024[1] Mergers and Acquisitions - The Corporation is pursuing the acquisition of ESSA Bancorp, Inc., which may incur additional non-recurring merger-related costs[7] - The Corporation announced a definitive merger agreement with ESSA Bancorp, expected to close in the third quarter of 2025[5]

Executive Summary - CNB Financial Corporation reported net income of $10.4 million, or $0.50 per diluted share, for the three months ended March 31, 2025, reflecting a decrease of 14.98% from the previous quarter [3] - Excluding after-tax merger costs, earnings were $11.9 million, or $0.57 per diluted share, which is a 3.19% increase year-over-year compared to the same quarter in 2024 [3] Financial Performance - Total revenue for the quarter was $56.9 million, a decrease from $59.4 million in the previous quarter but an increase from $54.2 million year-over-year [20] - Net interest income was $48.4 million, down from $49.0 million in the previous quarter and up from $45.2 million year-over-year [20] - Non-interest income totaled $8.5 million, down from $10.3 million in the previous quarter and $9.0 million year-over-year [20] Loan and Deposit Growth - Total loans reached $4.5 billion, representing a quarterly increase of $11.7 million, or 0.26%, and a year-over-year increase of $188.1 million, or 4.32% [3] - Total deposits were $5.5 billion, reflecting a quarterly increase of $88.7 million, or 1.65%, and a year-over-year increase of $422.5 million, or 8.39% [3] Asset Quality - Total nonperforming assets were approximately $56.1 million, or 0.89% of total assets, down from $59.5 million, or 0.96% of total assets in the previous quarter [27] - The allowance for credit losses was 1.03% of total loans, consistent with previous quarters [27] Capital and Liquidity - Total shareholders' equity was $624.5 million, an increase of $13.8 million, or 2.26%, from the previous quarter [27] - The Corporation maintained excess liquidity totaling approximately $100.7 million, which covers the unrealized losses on investments [7][27] Merger Activity - The Corporation announced a definitive merger agreement with ESSA Bancorp, Inc., expected to close in the third quarter of 2025, subject to regulatory approvals [25]

Core Viewpoint - CNB Financial Corporation has received a recommendation from Institutional Shareholder Services Inc (ISS) for shareholders to vote "FOR" the proposals related to the merger with ESSA Bancorp, the approval of the 2025 Omnibus Incentive Plan, and the advisory resolution on executive compensation [1] Group 1: Merger and Proposals - The proposals include issuing shares of CNB common stock in connection with the merger of ESSA Bancorp into CNB [1] - The Annual Meeting for shareholders is scheduled for April 15, 2025, at 2:00 p.m. Eastern Time [2] - Shareholders of record as of February 18, 2025, can attend the meeting and vote via live webcast [2] Group 2: Shareholder Engagement - CNB encourages shareholders to read the joint proxy statement/prospectus and submit their voting instructions promptly [3] - Assistance for voting can be obtained from CNB's proxy solicitor, Alliance Advisors [3] Group 3: Company Overview - CNB Financial Corporation is a financial holding company with consolidated assets of approximately $6.2 billion [4] - The company operates primarily through its subsidiary, CNB Bank, which offers a full range of banking services [4] - CNB Bank has multiple divisions and operates 56 full-service offices across Pennsylvania, Ohio, New York, and Virginia [4]

Risk Management - The Bank's interest rate risk is managed through static gap analysis and earnings simulation modeling, focusing on preserving net interest income sensitivity to interest rate changes [95]. - The Corporation's risk management framework may not effectively mitigate all risks, potentially affecting financial results [134]. - The risks associated with acquisitions may hinder the Corporation's ability to realize anticipated benefits and integrate operations effectively [112]. - Cybersecurity threats remain a significant concern, with potential incidents leading to customer attrition and regulatory scrutiny, impacting financial condition [121]. - As of December 31, 2024, the Corporation has not experienced material risks from cybersecurity threats, but future incidents cannot be ruled out [123]. - The Corporation's reliance on information technology systems poses risks, including service denials and operational challenges if third-party systems fail [118]. - Legislative changes could lead to higher credit losses for the Corporation, impacting its ability to collect on loans [132]. - The Corporation's use of artificial intelligence may expose it to operational challenges and increasing regulatory scrutiny [129]. - The Corporation's financial performance could be adversely affected by geopolitical instabilities and terrorist activities, leading to increased delinquencies and defaults [128]. Financial Condition - The Corporation's investment securities portfolio is subject to credit risk, market risk, and liquidity risk, which could lead to impairment charges affecting financial results [96]. - A substantial decline in the value of the Bank's FHLB common stock could adversely impact the Corporation's liquidity and financial condition [98]. - The Corporation's ability to pay dividends is limited by legal and regulatory requirements, which depend on the Bank's financial condition and retained earnings [107]. - The Corporation's stock price is subject to significant fluctuations due to various factors, including market conditions and operational performance [106]. Competition and Market Environment - The Corporation faces strong competition from both traditional banks and non-bank financial service providers, which may impact profitability [113]. - Rapid technological changes in the financial services industry necessitate the Corporation's adaptation to maintain competitiveness and efficiency [114]. Merger Considerations - The Merger with ESSA may lead to a decline in the market price of the Corporation's common stock if perceived benefits are not realized [135]. - Completion of the Merger is subject to various conditions, and failure to complete it could negatively impact the Corporation's stock price and future business [139]. - The Corporation may incur substantial costs related to the proposed Merger, including legal, accounting, and financial advisory fees [141]. - If the Merger is not completed, the Corporation could face negative reactions from financial markets, customers, and employees [142]. - The integration of the Corporation and ESSA will present significant challenges and expenses, potentially affecting operational effectiveness and anticipated benefits [143]. - The successful integration of ESSA's operations is critical for achieving expected synergies and cost savings [143]. - Management's focus may be diverted from day-to-day operations during the integration process, impacting service to existing customers [143]. - The Merger must be consummated by January 9, 2026, or it may be terminated under certain conditions [140]. - Approval from the Corporation's shareholders and ESSA shareholders is required for the Merger to proceed [140]. - Any material breach of the Merger Agreement by either party could lead to termination of the Merger [140]. - ESSA's Board of Directors must recommend approval of the Merger Agreement to avoid adverse impacts on the Corporation [140]. - The Corporation cannot assure stockholders that risks associated with the Merger will not materialize, potentially affecting business and financial results [142].

Group 1 - Investors in CNB Financial Corporation (CCNE) should monitor the stock closely due to significant implied volatility in the options market, particularly the Mar 21, 2025 $25.00 Put option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that a major event may be anticipated that could lead to a substantial price change [2] - CNB Financial currently holds a Zacks Rank 3 (Hold) in the Banks - Northeast industry, which is in the top 6% of the Zacks Industry Rank, but analysts have not increased earnings estimates for the current quarter, with a consensus estimate dropping from 58 cents to 53 cents per share [3][4] Group 2 - The high implied volatility for CNB Financial could indicate a developing trading opportunity, as options traders often seek to sell premium on such options, hoping the stock does not move as much as expected by expiration [4]

Group 1 - CNB Financial Corporation declared a quarterly cash dividend of $0.18 per share, payable on March 14, 2025, to shareholders of record as of February 28, 2025 [1] - CNB Financial Corporation has consolidated assets of approximately $6.2 billion [2] - The company operates primarily through its subsidiary, CNB Bank, which offers a full range of banking services including trust and wealth management [2] Group 2 - CNB Bank has a diverse operational structure with a private banking division, one drive-up office, one mobile office, and 55 full-service offices across Pennsylvania, Ohio, New York, and Virginia [2] - The bank serves various customer segments including individuals, businesses, governments, and institutions [2] - CNB Bank operates multiple divisions, including ERIEBANK, FCBank, BankOnBuffalo, Ridge View Bank, and Impressia Bank, which focuses on banking opportunities for women [2]

Group 1 - CNB Financial (CCNE) reported quarterly earnings of $0.66 per share, exceeding the Zacks Consensus Estimate of $0.54 per share, and showing an increase from $0.62 per share a year ago, representing an earnings surprise of 22.22% [1] - The company posted revenues of $59.97 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.22%, compared to year-ago revenues of $56.83 million [2] - CNB has outperformed the S&P 500 with a 2.9% increase since the beginning of the year, while the S&P 500 gained 2.2% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $58.2 million, and for the current fiscal year, it is $1.72 on revenues of $264.8 million [7] - The Zacks Industry Rank for Banks - Northeast is in the top 9% of over 250 Zacks industries, indicating strong performance potential [8] - Another company in the same industry, Isabella Bank Corporation (ISBA), is expected to report quarterly earnings of $0.49 per share, reflecting a year-over-year decline of 3.9%, with revenues projected at $18.6 million, an increase of 8.6% from the previous year [9]

[Financial and Operational Highlights](index=1&type=section&id=Executive%20Summary) CNB Financial Corporation reported strong Q4 2024 earnings, steady loan and deposit growth, maintained robust liquidity and capital, while noting an increase in nonperforming assets [Earnings Performance](index=1&type=section&id=Executive%20Summary) CNB Financial Corporation reported strong fourth-quarter 2024 results with net income of **$14.0 million** (**$0.66/share**), an increase both quarter-over-quarter and year-over-year, driven by higher net interest income and lower expenses, though full-year 2024 earnings of **$50.3 million** (**$2.39/share**) were down from 2023 primarily due to increased deposit costs | Period | Net Income (Available to Common) | Diluted EPS | | :--- | :--- | :--- | | **Q4 2024** | **$14.0 million** | **$0.66** | | Q3 2024 | $12.9 million | $0.61 | | Q4 2023 | $12.9 million | $0.62 | | **Full-Year 2024** | **$50.3 million** | **$2.39** | | Full-Year 2023 | $53.7 million | $2.55 | - The increase in Q4 2024 earnings compared to Q3 2024 was attributed to a rise in net interest income combined with reduced non-interest expenses[4](index=4&type=chunk) - The year-over-year increase for the quarter was due to growth in both net interest and non-interest income, alongside lower non-interest expenses[4](index=4&type=chunk) - The decline in full-year 2024 earnings compared to 2023 was primarily caused by the significant rise in deposit costs year-over-year[4](index=4&type=chunk) [Loan and Deposit Growth](index=1&type=section&id=Executive%20Summary) The Corporation achieved steady loan and deposit growth, with loans (excluding syndicated) reaching **$4.5 billion** (up **3.88%** year-over-year) and total deposits growing to **$5.4 billion** (a **7.45%** increase) as of December 31, 2024 | Metric (as of Dec 31, 2024) | Amount | YoY Change | | :--- | :--- | :--- | | Total Loans (ex-syndicated) | $4.5 billion | +3.88% | | Total Deposits | $5.4 billion | +7.45% | - Loan growth was primarily driven by commercial and residential real estate loans in expansion markets like Cleveland, OH, and Roanoke, VA, as well as in the Columbus, OH market and the Private Banking division[4](index=4&type=chunk) - The syndicated loan portfolio stood at **$79.9 million** (**1.73%** of total loans), a decrease of **$28.8 million** year-over-year due to paydowns, but an increase of **$10.4 million** from Q3 2024 as the Corporation identified opportunities with favorable yields[4](index=4&type=chunk) [Liquidity and Capital Position](index=3&type=section&id=Executive%20Summary) The Corporation maintains a strong liquidity and capital position, with adjusted uninsured deposits at approximately **18.01%** of total deposits and total liquidity sources covering these deposits by approximately **5.0 times**, while all regulatory capital ratios exceed 'well-capitalized' levels - Adjusted estimated uninsured deposits were approximately **$986.0 million**, or **18.01%** of total CNB Bank deposits as of December 31, 2024[5](index=5&type=chunk) - The Corporation had total on-hand and contingent liquidity sources of approximately **$4.6 billion**, which is about **5.0 times** the estimated adjusted uninsured deposit balances[5](index=5&type=chunk) - Pre-tax net unrealized losses on securities totaled **$74.8 million** (**12.25%** of total shareholders' equity), however, regulatory capital ratios would still exceed 'well-capitalized' levels if these losses were fully recognized[5](index=5&type=chunk) - As of December 31, 2024, the Corporation had no outstanding short-term borrowings from the FHLB or the Federal Reserve's Discount Window[5](index=5&type=chunk) [Asset Quality](index=3&type=section&id=Executive%20Summary) Asset quality metrics showed an increase in nonperforming assets (NPAs) during the fourth quarter, with NPAs rising to **$59.5 million** (**0.96%** of total assets) primarily due to a single commercial multifamily relationship, and net loan charge-offs also increased to **$2.1 million** for the quarter - Total nonperforming assets were **$59.5 million** (**0.96%** of total assets) at Q4 2024, up from **$42.0 million** at Q3 2024 and **$31.8 million** at Q4 2023[5](index=5&type=chunk) - The quarterly increase in NPAs was primarily driven by one commercial multifamily relationship of **$20.4 million**, for which a specific reserve of **$885 thousand** has been established[5](index=5&type=chunk) - Net loan charge-offs for Q4 2024 were **$2.1 million**, or **0.19%** annualized, compared to **$1.2 million** (**0.11%** annualized) in Q3 2024[5](index=5&type=chunk) [CEO Commentary and Outlook](index=4&type=section&id=Executive%20Summary) The CEO highlighted the favorable earnings trend over the last three quarters of 2024, attributing it to the successful implementation of core strategic initiatives, and expressed optimism about the planned acquisition of ESSA Bancorp, which is expected to expand the business model and create operational efficiencies - CEO Michael Peduzzi noted that Q4 2024 performance continued a favorable trend of increased earnings for the third consecutive quarter[6](index=6&type=chunk) - Key strategic initiatives include deepening customer relationships, disciplined underwriting, risk-based pricing, and solid risk management[6](index=6&type=chunk) - The company is excited about the planned acquisition of ESSA Bancorp, Inc., which is expected to add over **$2 billion** in assets and enhance business development and operational scale[6](index=6&type=chunk) [Balance Sheet Analysis](index=4&type=section&id=Other%20Balance%20Sheet%20Highlights) The Corporation's book value and tangible book value per common share increased year-over-year, supported by retained earnings and share repurchases [Shareholders' Equity and Book Value](index=4&type=section&id=Other%20Balance%20Sheet%20Highlights) Book value and tangible book value per common share both increased year-over-year, reaching **$26.34** and **$24.24** respectively as of December 31, 2024, driven by a **$35.4 million** rise in retained earnings and share repurchases, which offset the negative impact of unrealized losses on the investment portfolio | Metric per Common Share | Dec 31, 2024 | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | :--- | | Book Value | $26.34 | $26.13 | $24.57 | | Tangible Book Value (Non-GAAP) | $24.24 | $24.03 | $22.46 | - The year-over-year increase in book value was primarily due to a **$35.4 million** increase in retained earnings and the repurchase of **23,988** common shares in Q2 2024[9](index=9&type=chunk) [Loan Portfolio Analysis](index=4&type=section&id=Loan%20Portfolio%20Profile) The Corporation monitors its commercial real estate exposure, with no nonaccrual loans in office or hospitality, but an increase in multifamily nonaccruals [Commercial Real Estate (CRE) Concentrations](index=4&type=section&id=Loan%20Portfolio%20Profile) The Corporation actively monitors its exposure to key commercial real estate sectors, with no nonaccrual or past due loans in the office and hospitality portfolios, while the multifamily portfolio had **$20.7 million** in nonaccrual loans (representing **5.62%** of the total multifamily loan balance) primarily from one relationship, and no loans in these categories were classified as high volatility commercial real estate (HVCRE) | CRE Portfolio (as of Dec 31, 2024) | Total Balance | % of Total Loans | Nonaccrual Loans | Past Due Loans | | :--- | :--- | :--- | :--- | :--- | | **Commercial Office** | $113.7 million | 2.47% | $0 | $0 | | **Commercial Hospitality** | $321.6 million | 6.98% | $0 | $0 | | **Commercial Multifamily** | $367.6 million | 7.98% | $20.7 million | $21.1 million | - The Corporation had no loans considered by regulators to be high volatility commercial real estate (HVCRE) in its office, hospitality, or multifamily portfolios[12](index=12&type=chunk) [Performance Analysis](index=5&type=section&id=Performance%20Ratios) Profitability and efficiency improved in Q4 2024, driven by increased net interest income and reduced expenses, though full-year returns were lower than the prior year [Profitability and Efficiency Ratios](index=5&type=section&id=Performance%20Ratios) Profitability metrics improved in Q4 2024 compared to Q3 2024, with annualized return on average tangible common equity (ROATCE) at **10.90%**, though full-year returns were lower than in 2023, and the efficiency ratio showed significant improvement in Q4 2024, falling to **63.68%** from **66.34%** in the prior quarter, driven by higher net interest income and lower non-interest expenses | Performance Ratio (Annualized) | Q4 2024 | Q3 2024 | Q4 2023 | | :--- | :--- | :--- | :--- | | Return on Average Equity | 9.79% | 9.28% | 9.97% | | Return on Average Tangible Common Equity (Non-GAAP) | 10.90% | 10.33% | 11.27% | | Efficiency Ratio | 63.68% | 66.34% | 67.66% | - The full-year 2024 return on average equity was **9.21%**, down from **10.54%** in 2023[14](index=14&type=chunk) - The full-year efficiency ratio was **66.20%**, up from **65.13%** in 2023[14](index=14&type=chunk) [Revenue Analysis](index=5&type=section&id=Revenue) Total revenue for Q4 2024 was **$59.4 million**, an increase from both the prior quarter and the same quarter last year, supported by a rise in net interest income, while for the full year, total revenue increased slightly to **$226.6 million**, as higher non-interest income offset a small decline in net interest income | Revenue Component ($ millions) | Q4 2024 | Q3 2024 | Q4 2023 | | :--- | :--- | :--- | :--- | | Net Interest Income | $49.0 | $47.5 | $47.7 | | Non-Interest Income | $10.3 | $11.0 | $9.1 | | **Total Revenue** | **$59.4** | **$58.5** | **$56.8** | | Revenue Component ($ millions) | Full-Year 2024 | Full-Year 2023 | | :--- | :--- | :--- | | Net Interest Income | $187.5 | $189.8 | | Non-Interest Income | $39.1 | $33.3 | | **Total Revenue** | **$226.6** | **$223.2** | Net Interest Income and Margin - Q4 2024 net interest income increased by **$1.6 million** (**13.05%** annualized) from Q3 2024, primarily due to targeted decreases in interest-bearing deposit rates following Federal Reserve rate cuts[15](index=15&type=chunk) - Full-year 2024 net interest income decreased by **$2.4 million** from 2023, as the increase in interest expense on deposits outpaced the growth in interest income from loans and other earning assets[18](index=18&type=chunk) | Net Interest Margin | Q4 2024 | Q3 2024 | Q4 2023 | | :--- | :--- | :--- | :--- | | Net Interest Margin (GAAP) | 3.44% | 3.43% | 3.54% | | Cost of Interest-Bearing Liabilities | 3.03% | 3.21% | 2.89% | Non-Interest Income - Q4 2024 non-interest income was **$10.3 million**, down from **$11.0 million** in Q3 2024 due to increased net losses on equity securities, however, it was up from **$9.1 million** in Q4 2023, driven by higher wealth management fees and SBIC income[18](index=18&type=chunk) - Full-year 2024 non-interest income increased to **$39.1 million** from **$33.3 million** in 2023, primarily due to higher pass-through income from SBICs, increased gains on equity securities, and growth in wealth and asset management fees[18](index=18&type=chunk) [Non-Interest Expense](index=7&type=section&id=Non-Interest%20Expense) Total non-interest expense decreased in Q4 2024 to **$37.8 million**, down **2.52%** from the prior quarter, mainly due to lower salaries and benefits from reduced incentive compensation accruals, while for the full year, expenses rose **3.21%** to **$150.0 million**, driven by higher personnel costs from expansion and increased technology investments | Period | Total Non-Interest Expense ($ millions) | Change | | :--- | :--- | :--- | | **Q4 2024** | **$37.8** | -2.52% vs Q3 2024 | | Q3 2024 | $38.8 | | | Q4 2023 | $38.5 | | | **Full-Year 2024** | **$150.0** | +3.21% vs FY 2023 | | Full-Year 2023 | $145.3 | | - The quarterly decrease in expenses was primarily due to a reduction in salaries and benefits, related to lower incentive compensation accruals and the departure of an executive[17](index=17&type=chunk) - The annual increase in expenses was driven by higher personnel costs from merit increases and staffing in new markets (Cleveland, OH and Roanoke, VA), and increased technology and licensing costs[19](index=19&type=chunk) [Income Taxes](index=9&type=section&id=Income%20Taxes) The effective tax rate remained relatively stable, with Q4 2024 at **19.14%** (slightly lower than Q3 2024's **19.31%**) and the full-year 2024 rate at **18.98%** compared to **19.22%** for 2023 | Period | Income Tax Expense ($ millions) | Effective Tax Rate | | :--- | :--- | :--- | | **Q4 2024** | **$3.6** | **19.14%** | | Q3 2024 | $3.3 | 19.31% | | Q4 2023 | $3.2 | 18.45% | | **Full-Year 2024** | **$12.8** | **18.98%** | | Full-Year 2023 | $13.8 | 19.22% | [Asset Quality](index=9&type=section&id=Asset%20Quality) Asset quality metrics weakened in Q4 2024 due to increased nonperforming assets and higher net loan charge-offs, despite a stable allowance for credit losses ratio [Asset Quality Metrics](index=9&type=section&id=Asset%20Quality) Asset quality weakened in Q4 2024, with nonperforming assets (NPAs) increasing to **$59.5 million** (**0.96%** of total assets) due to a large commercial real estate relationship moving to nonaccrual status, while the allowance for credit losses (ACL) as a percentage of total loans remained stable at **1.03%**, but the coverage of nonaccrual loans decreased significantly to **84.08%** due to the higher nonaccrual balance, and provision for credit losses increased to **$2.9 million** for the quarter to account for loan growth and higher charge-offs | Asset Quality Metric | Dec 31, 2024 | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | :--- | | Nonperforming Assets (NPAs) | $59.5 M | $42.0 M | $31.8 M | | NPAs / Total Assets | 0.96% | 0.70% | 0.55% | | ACL / Total Loans | 1.03% | 1.02% | 1.03% | | ACL / Nonaccrual Loans | 84.08% | 117.03% | 154.63% | | Credit Loss Metric ($ millions) | Q4 2024 | Q3 2024 | Q4 2023 | | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $2.9 | $2.4 | $1.2 | | Net Loan Charge-offs | $2.1 | $1.2 | $1.2 | - Full-year 2024 net loan charge-offs were **$7.5 million** (**0.17%** of average loans), compared to **$3.4 million** (**0.08%**) for the full-year 2023[23](index=23&type=chunk) [Capital Position](index=9&type=section&id=Capital) The Corporation maintains a strong capital position with all regulatory ratios exceeding 'well-capitalized' levels, supported by a year-over-year increase in total shareholders' equity [Capital Ratios](index=9&type=section&id=Capital) The Corporation's capital position remains strong, with all regulatory capital ratios continuing to exceed 'well-capitalized' levels, and total shareholders' equity increased by **$39.4 million** year-over-year to **$610.7 million**, driven by retained earnings, with the tangible common equity to tangible assets ratio standing at **8.28%** as of December 31, 2024 - Total shareholders' equity was **$610.7 million** at December 31, 2024, an increase of **6.91%** from December 31, 2023, resulting from increased retained earnings and a decrease in accumulated other comprehensive loss[24](index=24&type=chunk) - Regulatory capital ratios for the Corporation continue to exceed regulatory 'well-capitalized' levels as of December 31, 2024[24](index=24&type=chunk) | Capital Ratio | Dec 31, 2024 | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | :--- | | Tangible Common Equity / Tangible Assets (Non-GAAP) | 8.28% | 8.45% | 8.22% | | Tier 1 Leverage Ratio | 10.43% | 10.59% | 10.54% | | Common Equity Tier 1 Ratio | 11.76% | 11.64% | 11.49% | | Total Risk-Based Ratio | 16.16% | 16.06% | 15.99% | [Recent Events](index=10&type=section&id=Recent%20Events) CNB Financial Corporation announced a definitive all-stock merger agreement with ESSA Bancorp, Inc., expected to close in Q3 2025 pending approvals [Merger with ESSA Bancorp, Inc.](index=10&type=section&id=Recent%20Events) On January 10, 2025, CNB Financial Corporation announced a definitive merger agreement with ESSA Bancorp, Inc. in an all-stock transaction, expected to close in the third quarter of 2025, pending regulatory and shareholder approvals - The Corporation entered into a definitive merger agreement with ESSA Bancorp, Inc. in an all-stock transaction[27](index=27&type=chunk) - Under the agreement, each share of ESSA Bancorp common stock will be converted into **0.8547 shares** of CNB's common stock[27](index=27&type=chunk) - The transaction is expected to close in Q3 2025, subject to customary closing conditions, including regulatory and shareholder approvals[27](index=27&type=chunk) [Consolidated Financial Statements](index=12&type=section&id=CNB%20FINANCIAL%20CORPORATION%20CONSOLIDATED%20FINANCIAL%20DATA) The consolidated financial statements provide a detailed overview of the Corporation's financial performance and position, including income, balance sheet, and non-GAAP reconciliations [Consolidated Income Statement](index=12&type=section&id=CNB%20FINANCIAL%20CORPORATION%20CONSOLIDATED%20FINANCIAL%20DATA) The consolidated income statement details the components of the Corporation's earnings, showing Q4 2024 net interest income of **$49.0 million** and non-interest income of **$10.3 million**, leading to net income available to common shareholders of **$14.0 million**, while for the full year 2024, net interest income was **$187.5 million** and non-interest income was **$39.1 million**, resulting in net income available to common shareholders of **$50.3 million** | Income Statement ($ thousands) | Q4 2024 | Q4 2023 | Full-Year 2024 | Full-Year 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | 49,044 | 47,694 | 187,469 | 189,829 | | Provision for Credit Losses | 2,930 | 1,242 | 9,222 | 5,993 | | Total Non-Interest Income | 10,321 | 9,137 | 39,114 | 33,335 | | Total Non-Interest Expenses | 37,805 | 38,450 | 150,002 | 145,342 | | Net Income | 15,064 | 13,977 | 54,575 | 58,020 | | Net Income Available to Common | 13,988 | 12,901 | 50,273 | 53,718 | | Diluted EPS | $0.66 | $0.62 | $2.39 | $2.55 | [Consolidated Balance Sheet](index=14&type=section&id=CNB%20FINANCIAL%20CORPORATION%20CONSOLIDATED%20FINANCIAL%20DATA) The consolidated balance sheet shows total assets grew to **$6.19 billion** at year-end 2024, up from **$5.75 billion** at year-end 2023, funded by a significant increase in total deposits, which rose to **$5.37 billion** from **$5.00 billion**, and net loans receivable also increased to **$4.56 billion** | Balance Sheet ($ thousands) | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Cash and Cash Equivalents | 443,035 | 222,046 | | Net Loans Receivable | 4,561,599 | 4,422,644 | | **Total Assets** | **6,192,010** | **5,752,957** | | Total Deposits | 5,371,364 | 4,998,750 | | **Total Liabilities** | **5,581,315** | **5,181,710** | | **Total Shareholders' Equity** | **610,695** | **571,247** | [Reconciliation of Non-GAAP Measures](index=18&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations for non-GAAP financial measures used in the report, such as Tangible Book Value per Common Share, Pre-Provision Net Revenue (PPNR), fully tax-equivalent Net Interest Margin, and Return on Average Tangible Common Equity, which bridge the gap between reported GAAP figures and the adjusted metrics management uses to assess ongoing operational performance PPNR Reconciliation ($ thousands) | | Q4 2024 | Q4 2023 | Full-Year 2024 | Full-Year 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | 49,044 | 47,694 | 187,469 | 189,829 | | Add: Non-interest income | 10,321 | 9,137 | 39,114 | 33,335 | | Less: Non-interest expense | 37,805 | 38,450 | 150,002 | 145,342 | | **PPNR (non-GAAP)** | **21,560** | **18,381** | **76,581** | **77,822** | Tangible Book Value Reconciliation ($ thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Common Shareholders' Equity | 552,910 | 513,462 | | Less: Goodwill & Intangibles | 44,080 | 44,154 | | **Tangible Common Equity (non-GAAP)** | **508,830** | **469,308** |

Core Viewpoint - CNB Financial Corporation reported an increase in quarterly earnings for Q4 2024, driven by higher net interest income and reduced non-interest expenses, despite a year-over-year decline in annual earnings due to rising deposit costs [3][7]. Financial Performance - Net income for Q4 2024 was $14.0 million, or $0.66 per diluted share, up from $12.9 million, or $0.61 per diluted share in Q3 2024, and compared to $12.9 million, or $0.62 per diluted share in Q4 2023 [3]. - Total earnings for the twelve months ended December 31, 2024, were $50.3 million, or $2.39 per diluted share, down from $53.7 million, or $2.55 per diluted share for the same period in 2023 [3]. Loan and Deposit Growth - Total loans reached $4.5 billion as of December 31, 2024, reflecting a quarterly increase of $6.6 million, or 0.15%, and a year-over-year increase of $169.4 million, or 3.88% [3]. - Total deposits were $5.4 billion, with a quarterly increase of $154.4 million, or 2.96%, and a year-over-year increase of $372.6 million, or 7.45% [3]. Asset Quality - Nonperforming assets totaled approximately $59.5 million, or 0.96% of total assets, as of December 31, 2024, up from $42.0 million, or 0.70% of total assets in Q3 2024 [25]. - The allowance for credit losses was 1.03% of total loans as of December 31, 2024, compared to 1.02% in Q3 2024 [25]. Revenue and Expenses - Total revenue for Q4 2024 was $59.4 million, an increase from $58.5 million in Q3 2024 [20]. - Net interest income for Q4 2024 was $49.0 million, up from $47.5 million in Q3 2024 [20]. - Total non-interest expense was $37.8 million for Q4 2024, down from $38.8 million in Q3 2024, primarily due to a decrease in salaries and benefits [24]. Capital and Equity - Total shareholders' equity was $610.7 million as of December 31, 2024, reflecting an increase of $4.3 million from Q3 2024 [31]. - Book value per common share increased to $26.34 at December 31, 2024, from $26.13 at September 30, 2024 [10]. Strategic Initiatives - The Corporation announced a merger agreement with ESSA Bancorp, expected to close in Q3 2025, which aims to enhance business development and operational efficiencies [28].