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

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

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

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

Core Viewpoint - CNB Financial Corporation and ESSA Bancorp Inc. have received necessary regulatory approvals to proceed with their proposed merger, which is expected to close on July 23, 2025, pending customary closing conditions [1][2]. Group 1: Merger Details - The merger involves ESSA merging with CNB in an all-stock transaction, followed by the merger of ESSA Bank with CNB Bank [2]. - The Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking and Securities have approved the merger, and CNB received a waiver from the Federal Reserve Bank of Philadelphia [1][2]. Group 2: Company Profiles - CNB Financial Corporation has consolidated assets of approximately $6.3 billion and operates through its principal subsidiary, CNB Bank, which offers a full range of banking services across multiple states [3]. - ESSA Bancorp, Inc. has total assets of $2.2 billion and operates 19 community offices, providing a full range of commercial and retail financial services [4].

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].