CCNE 10-K & 10-Q changes, risk factors and insider trading
Cnb Financial Corp. (also CCNEP) · Nasdaq · State Commercial Banks · CIK 736772 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Removed heading “Risks Related to the Merger with ESSA”
Removed heading “The market price of the Corporation’s common stock may decline as a result of the Merger and the market price of the Corporation’s common stock after the consummation of the Merger may be affected by factors different from those affecting the price of the Corporation’s common stock before the Merger.”
Removed heading “The Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed.”
Removed heading “Failure to complete the Merger could negatively impact the stock price of the Corporation and its future business and financial results.”
Removed heading “The integration of the Corporation and ESSA will present significant challenges and expenses that may result in the combined business not operating as effectively as expected, or in the failure to achieve some or all of the anticipated benefits of the transaction.”
Largest changes
“•the other party materially breaches any of its representations, warranties, covenants or other agreements set forth in the Merger Agreement (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the Merger Agreement), which breach is not cured within 30 days of written notice of the breach, or by its nature cannot be cured prior to the closing of the Merger, and such breach would entitle the non-breaching party not to consummate the Merger; or”see in full comparison
“The market price of the Corporation’s common stock may decline as a result of the Merger and the market price of the Corporation’s common stock after the consummation of the Merger may be affected by factors different from those affecting the price of the Corporation’s common stock before the Merger.”see in full comparison
“The integration of the Corporation and ESSA will present significant challenges and expenses that may result in the combined business not operating as effectively as expected, or in the failure to achieve some or all of the anticipated benefits of the transaction.”see in full comparison
“Failure to complete the Merger could negatively impact the stock price of the Corporation and its future business and financial results.”see in full comparison
“The Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed.”see in full comparison
Full comparison: every changed paragraph (35)
The Bank’s primary source of funding is customer deposits, gathered throughout its network of banking offices. Periodically, the Corporation utilizes term borrowings from the Federal Home Loan Bank (the "FHLB") of Pittsburgh, of which the Bank is a member, and other lenders to meet funding obligations. In addition, the Bank also maintains borrowing capacity with the Federal Reserve Bank of Philadelphia.Philadelphia (the "Federal Reserve Bank"). The Bank’s securities and loan portfolios provide a source of contingent liquidity that could be accessed in a reasonable time period through sales.
The Corporation’s bylaws, as amended and restated, provide for the division of the Corporation’s Board of Directors into three classes of directors, with each serving staggered terms. In addition, any amendment to the Corporation’s bylaws must be approved by the affirmative vote of a majority of the votes cast by all shareholders entitled to vote thereon and, if any shareholders are entitled to vote thereon as a class, upon receiving the affirmative vote of a majority of the votes cast by the shareholders entitled to vote as a class.
The Corporation’s success is dependent to a significant extent upon general economic conditions in the United States and, in particular, the local economies in CentralCentral, Northeast and Northwest Pennsylvania, Central and Northeast Ohio, Western New York and Southwest Virginia - the primary markets served by the Bank. The Bank is particularly exposed to real estate and economic factors in these geographic areas, as most of its loan portfolio is concentrated among borrowers in these markets. Furthermore, because a substantial portion of the Bank’s loan portfolio is secured by real estate in these areas, the value of the associated collateral is also subject to regional real estate market conditions.
The financial services industry is undergoing rapid technological change, and technological advances, including those related to artificial intelligence,intelligence ("AI"), are likely to intensify competition. In addition to improving customer services, effective use of technology increases efficiency and enables financial institutions to reduce costs. Accordingly, the Corporation’s future success will depend in part on its ability to address customer needs by using technology. The Corporation cannot assure you that it will be able to successfully take advantage of technological changes or advances or develop and market new technology driven products and services to its customers. Failure to keep pace with technological change affecting the financial services industry could have a material adverse effect on the Corporation's financial condition, results of operations, or liquidity.
The Corporation, primarily through the Bank, depends on its information technology networks and systems to continuously process, record and monitor a large number of customer transactions and to process, transmit and store proprietary and confidential information, including personal information of employees and customers. Accordingly, the Corporation’s and its subsidiaries’ information technology networks and systems must continue to be safeguarded and monitored for potential failures, vulnerabilities, disruptions and breakdowns. We face cybersecurity threats, including system, network or internet failures, cyber attacks, ransomware and other malware, social engineering, phishing schemes and workforce member error, negligence, or fraud. Although the Corporation has business continuity plans and other safeguards in place, any such cybersecurity incident, including those impacting personal information, could result in customer attrition, regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs, any of which could materially adversely affect the Corporation’s results of operations or financial condition. Further, adoption of AI tools by us or by third parties may pose new technologiescybersecurity challenges. Threat actors may use AI tools to automate and enhance cybersecurity attacks against us. We use software and platforms designed to detect such ascybersecurity artificialthreats, intelligenceincluding AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may bepose moresignificant capablerisks atto evadingour thesedata safeguardsecurity measures.and systems.
As of December 31, 2024, the Corporation has not experienced any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents or threats, that have materially affected the business strategy, results of operations or financial condition of the Corporation. However, there can be no assurance that the Corporation or its subsidiaries will remain unaffected in the future. Given the evolving nature of security threats and evolving safeguards, there can be no assurance that any preventive, protective, or remedial data security measures that we or our third-party service providers implement are or will be adequate to detect or prevent all cybersecurity incidents. The Corporation continues to enhance its data security systems, technology platforms, employee education and risk management processes, in an effort to underpin its business strategy as well as in response to the evolving threat landscape and any incidents we experience. In connection with these efforts, we have incurred costs and expect to incur additional costs as we continue to enhance our data security infrastructure and take further steps to prevent unauthorized access to our systems and the data we maintain. In addition, any actual or perceived failure by the Corporation or our vendors or business partners to comply with our privacy, confidentiality, or data security-related legal or other obligations to third parties may result in claims by third parties that we have breached our privacy- or confidentiality-related obligations, which could materially and adversely affect our business and prospects.
Our use of artificial intelligenceAI could expose us to various risks.
We have begun to utilize artificial intelligenceAI technologies in various aspects of our business, including internal training material creation. Artificial intelligenceAI technologies are susceptible to errors and other malfunctions which could lead to operational challenges and reputational risks. In addition, we may be subject to increasing regulations related to our use of artificial intelligence,AI, including regulations related to privacy, data security, and intellectual property rights, which could expose us to legal risks.
Failure to comply with laws, including the Bank Secrecy Act and USA Patriot Act, regulations or policies could result in sanctions by regulatory agencies, restrictions, civil money penalties and/or reputation damage, which could have a material adverse effect on the Corporation’s business, financial condition and results of operations and/or cause the Corporation to lose its financial holding company status. While the Corporation has policies and procedures designed to prevent any such violations, there can be no assurance that such violations will not occur. See the section captioned "Supervision and Regulation" in Part I, Item 1 of this report for further information.
As a result of our merger with ESSA, the Bank agreed to and assumed all obligations under the ESSA Consent Order. We could incur unanticipated costs and expenses to achieve compliance with the ESSA Consent Order. Actions taken to achieve compliance with the ESSA Consent Order may affect our business or financial performance and may require us to reallocate resources away from existing business or to undertake significant changes to our business, operations, products and services and risk management practices. In addition, although the ESSA Consent Order resolved all claims by the United States of America against ESSA Bank, we could be subject to other enforcement actions relating to the alleged violations resolved by the ESSA Consent Order.
See the section captioned "Supervision and Regulation" in Part I, Item 1 of this report for further information.
Risks Related to the Merger with ESSA
The market price of the Corporation’s common stock may decline as a result of the Merger and the market price of the Corporation’s common stock after the consummation of the Merger may be affected by factors different from those affecting the price of the Corporation’s common stock before the Merger.
The market price of the Corporation’s common stock may decline as a result of the Merger if the Corporation does not achieve the perceived benefits of the Merger or the effect of the Merger on the Corporation’s financial results is not consistent with the expectations of financial or industry analysts.
In addition, the consummation of the Merger will result in the combination of two companies that currently operate as independent companies. The business of the Corporation and the business of ESSA differ. As a result, while the Corporation expects to benefit from certain synergies following the Merger, the Corporation may also encounter new risks and liabilities associated with these differences. Following the Merger, shareholders of the Corporation and ESSA will own interests in a combined company operating an expanded business and may not wish to continue to invest in the Corporation, or for other reasons may wish to dispose of some or all of their shares of the Corporation’s common stock. If, following the effective time of the Merger, large amounts of the Corporation’s common stock are sold, the price of the Corporation’s common stock could decline.
Further, the results of operations of the Corporation and the market price of the Corporation’s common stock after the Merger may be affected by factors different from those currently affecting the independent results of operations of each of the Corporation and ESSA and the market price of the Corporation’s common stock. Accordingly, the Corporation’s historical market prices and financial results may not be indicative of these matters for the Corporation after the Merger.
The Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed.
The Corporation and ESSA can mutually agree to terminate the Merger Agreement at any time before the Merger has been completed, and either company can terminate the Merger Agreement if:
•any regulatory approval required for consummation of the Merger and the other transactions contemplated by the Merger Agreement has been denied by final, nonappealable action of any regulatory authority, or an application for regulatory approval has been permanently withdrawn at the request of a governmental authority;
•the required approval of the issuance of common stock of the Corporation in connection with the Merger by the Corporation’s shareholders or the required approval of the Merger Agreement by the ESSA shareholders are not obtained;
•the other party materially breaches any of its representations, warranties, covenants or other agreements set forth in the Merger Agreement (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the Merger Agreement), which breach is not cured within 30 days of written notice of the breach, or by its nature cannot be cured prior to the closing of the Merger, and such breach would entitle the non-breaching party not to consummate the Merger; or
•the Merger is not consummated by January 9, 2026, unless the failure to consummate the Merger by such date is due to a material breach of the Merger Agreement by the terminating party.
In addition, the Corporation may terminate the Merger Agreement if:
•ESSA breaches the non-solicitation provisions in the Merger Agreement; or
•the ESSA Board of Directors:
◦fails to recommend approval of the Merger Agreement, or withdraws, modifies or changes such recommendation in a manner adverse to the Corporation’s interests; or ◦recommends, proposes or publicly announces its intention to recommend or propose to engage in an acquisition transaction with any person other than the Corporation or any of its subsidiaries; or
•ESSA fails to call, give notice of, convene and hold its special meeting.
ESSA may terminate the Merger Agreement, subject to its compliance with the Merger Agreement, if ESSA has received an acquisition proposal, and the ESSA Board of Directors has made a determination that such proposal is a superior proposal and has determined to accept such proposal.
Failure to complete the Merger could negatively impact the stock price of the Corporation and its future business and financial results.
Completion of the Merger is subject to the satisfaction or waiver of a number of conditions, including approval by ESSA shareholders of the Merger. The Corporation cannot guarantee when or if these conditions will be satisfied or that the Merger will be successfully completed. The consummation of the Merger may be delayed, the Merger may be consummated on terms different than those contemplated by the Merger Agreement, or the Merger may not be consummated at all. If the Merger is not completed, the ongoing business of the Corporation may be adversely affected, and the Corporation will be subject to several risks, including the following:
•the Corporation could incur substantial costs relating to the proposed Merger, such as legal, accounting, financial advisor, filing, printing and mailing fees; and
•the Corporation’s management and employees’ attention may be diverted from their day-to-day business and operational matters as a result of efforts relating to the attempt to consummate the Merger.
In addition, if the Merger is not completed, the Corporation may experience negative reactions from the financial markets and from its customers and employees. The Corporation also could be subject to litigation related to any failure to complete the Merger or to enforcement proceedings commenced against the Corporation to perform its obligations under the Merger Agreement. If the Merger is not completed, the Corporation cannot assure its stockholders that the risks described above will not materialize and will not materially affect the Corporation’s business and financial results or the stock price of the Corporation.
The integration of the Corporation and ESSA will present significant challenges and expenses that may result in the combined business not operating as effectively as expected, or in the failure to achieve some or all of the anticipated benefits of the transaction.
The benefits and synergies expected to result from the proposed Merger will depend in part on whether the operations of ESSA can be integrated in a timely and efficient manner with those of the Corporation. The Corporation will face challenges and costs in consolidating its functions with those of ESSA, and integrating the organizations, procedures and operations of the two businesses. The integration of the Corporation and ESSA will be complex and time-consuming, and the management of both companies will have to dedicate substantial time and resources to it. These efforts could divert management’s focus and resources from serving existing customers or other strategic opportunities and from day-to-day operational matters during the integration process. Failure to successfully integrate the operations of the Corporation and ESSA could result in the failure to achieve some of the anticipated benefits from the transaction, including cost savings and other operating efficiencies, and the Corporation may not be able to capitalize on the existing relationships of ESSA to the extent anticipated, or it may take longer, or be more difficult or expensive than expected to achieve these goals. This could have an adverse effect on the business, results of operations, financial condition or prospects of the Corporation and/or the Bank after the transaction.
Management's Discussion & Analysis (MD&A)
New heading “Year Ended December 31, 2025 vs. Year Ended December 31, 2024”
New heading “Business Combinations and Goodwill”
Removed heading “Year Ended December 31, 2023 vs. Year Ended December 31, 2022”
Largest changes
“For mergers and acquisitions, the Corporation is required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their fair value. The difference between consideration and the net fair value of assets acquired is recorded as goodwill. Management uses significant estimates and assumptions to value such items, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values. …”see in full comparison
“Certain intangible assets generated in connection with acquisitions are periodically assessed for impairment. Goodwill is tested at least annually for impairment, and if certain events occur which indicate goodwill might be impaired between annual tests, goodwill must be tested when such events occur. In making this assessment, the Corporation considers a number of factors including operating results, business plans, economic projections, anticipated future cash flows, current market data, stock price, etc. …”see in full comparison
“Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the carrying value of assets, including goodwill and liabilities, which could result in impairment losses affecting our financial statements as a whole and our banking subsidiary in which the goodwill resides.”see in full comparison
For the year ended December 31,see in full comparison2024,2025, the increase in the allowance for credit lossesincreased $1.5 million. This increasewas primarily driven bygrowththe ESSA acquisition, including the $18.2 million in PCD and Purchased Seasoned Loans ("PSL") allowance established on theCorporation'sacquisitionloan portfolio in new market areasdate, as well asan increased unemployment rate forecast, partially offset by improvementsgrowth in theCorporation'sCorporation’shistoricalloanloss rates, annual updates to the Corporation's loss drivers and assumptions, as well as the impact of net charge-offs.portfolio. Significant uncertaintypersistscontinuesregardingto affect both the domestic and globaleconomyeconomic outlook due topersistent inflationchanges incertain segments of theU.S.economy,tariffs and corresponding policy actions by trading partners, persistently elevated interest rates, fluctuatinglevels ofconsumer confidence, and ongoing geopolitical conflicts. Management will continue to proactivelyevaluatereassess its estimate of expected credit losses as new information becomes available.
As part of its lending policy and risk management activities, the Corporation tracks lending exposure by industry classification and type to determine potential risks associated with industry concentrations, andsee in full comparisonwhetherto identify any concentration risk issues that could lead to additional credit loss exposure.InAn important and recurring part of this process involves thecurrentCorporation’spost-pandemiccontinued measurement andinflationaryevaluationeconomic environment, the Corporation has evaluatedof its exposure to the office, hospitality, and multifamily industries within its commercial real estate portfolio. Even given the Corporation’s historically sound underwriting protocols and high credit qualityratingsstandards for borrowers inthesetheindustries,commercial real estate industry segments, the Corporation monitors numerous relevant sensitivityelements at both underwriting and through and beyond the funding period,elements, includingprojectsoccupancy, loan-to-value, absorption and cap rates, debt service coverage and covenant compliance, and developer/lessor financial strength both in the project and globally. At December 31,2024,2025, the Corporation had the following key metrics related to its office, hospitality and multifamily portfolios with such metrics including the impact on the respective portfolios of loans acquired during the third quarter of 2025 from the ESSA acquisition:
Full comparison: every changed paragraph (84)
Such known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to, (i) adverse changes or conditions in capital and financial markets, including actual or potential stresses in the banking industry; (ii) changes in interest rates; (iii) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (iv) effectiveness of our data security controls in the face of cyber attacks and any reputational risks following a cybersecurity incident; (v) changes in general business, industry or economic conditions or competition; (vi) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (vii) governmentaladverse approvalseconomic ofeffects from international trade disputes, including threatened or implemented tariffs imposed by the Corporation'sU.S. pendingand merger with ESSA may not be obtained,threatened or adverseimplemented regulatory conditions may betariffs imposed by foreign countries in connectionretaliation, withor governmentalsimilar approvalsevents ofimpacting theeconomic mergeractivity; (viii) the Corporation's shareholders and/or the shareholders of ESSA may fail to approve the merger or the issuance of the Corporation’s common stock in the merger, as applicable; (ix) higher than expected costs or other difficulties related to integration of combined or merged businesses; (xix) the effects of business combinations and other acquisition transactions, including the inability to realize our loanl and investment portfolios; (xix) changes in the quality or composition of our loan and investment portfolios; (xiixi) adequacy of loan loss reserves; (xiiixii) increased competition; (xivxiii) loss of certain key officers; (xvxiv) deposit attrition; (xvixv) rapidly changing technology; (xviixvi) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xviiixvii) changes in the cost of funds, demand for loan products or demand for financial services; and (xixxviii) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices. Such developments could have an adverse impact on CNB's financial position and results of operations.
The Corporation is a financial holding company registered under the BHC Act. It was incorporated under the laws of the Commonwealth of Pennsylvania in 1983 for the purpose of engaging in the business of a financial holding company. The Corporation’s subsidiary, the Bank, provides financial services to individuals and businesses. The CNB Bank franchise's primary market areas are the Pennsylvania counties of Blair, Cambria, Centre, Clearfield, Elk, Indiana, Jefferson, and McKean. ERIEBANK, a division of the Bank, operates in the Pennsylvania counties of Crawford, Erie, and Warren and in the Ohio counties of Ashtabula, Cuyahoga, Geauga, Lake, and Lorain. FCBank, a division of the Bank, operates in the Ohio counties of Crawford, Delaware, Franklin, Knox, Marion, Morrow, and Richland. BankOnBuffalo, a division of the Bank, operates in the New York counties of Erie, Niagara, and Ontario. Ridge View Bank, a division of the Bank, operates in the Virginia counties of Botetourt, Craig, Franklin, New River Valley, and Roanoke. ESSA Bank, a division of the Bank, operates in the Pennsylvania counties of Delaware, Chester, Lackawanna, Lehigh, Luzerne, Monroe, and Northampton. Impressia Bank, a division of the Bank, operates in the Bank’s primary market areas. Although the Corporation’s strategies, through the Bank, are executed based on the divisions discussed above, the Bank is a single Pennsylvania-chartered bank whereby all divisions of the Bank conduct their business on a doing business as basis.
On JanuaryJuly 9,23, 2025, the Corporation andcompleted CNBits Bankpreviously enteredannounced intoacquisition the Merger Agreement withof ESSA and its subsidiary bank, ESSA Bank, pursuant to which the CorporationMerger willAgreement. acquireThe Corporation’s acquisition of ESSA inwas an all-stock transaction. Subject toUnder the terms and conditions of the Merger Agreement, which has been approved by the boards of directors of each party, ESSA will mergemerged with and into the Corporation, with the Corporation as the surviving entity, and immediately thereafter, ESSA Bank will mergemerged with and into the Bank, with the Bank as the surviving bank. UnderBanking the terms of the Merger Agreement, each outstanding shareoffices of ESSA commonBank stockoperate will be converted intounder the righttrade toname receiveESSA 0.8547Bank, sharesa division of theCNB Corporation’s common stock. The transaction is currently expected to close in the third quarter of 2025, subject to customary closing conditions, including the receipt of regulatory approvals and approvals by the shareholders of ESSA and the Corporation.Bank.
Pursuant to the Merger Agreement, each outstanding share of ESSA common stock was converted into the right to receive 0.8547 shares of the Corporation’s common stock. The total consideration paid to ESSA shareholders was approximately $202.6 million, comprised of approximately 8,359,430 shares of the Corporation's common stock, valued at approximately $202.5 million based on the July 23, 2025 closing price of $24.23 per share of the Corporation's common stock, and $21 thousand in cash in lieu of fractional shares.
Non-GAAP measures reflected within the discussion below also include adjusted calculations to exclude after-tax merger and integration costs ("merger transaction related expenses") related to the Corporation’s acquisition of ESSA.
•Adjusted net income available to common shareholders;
•Adjusted earnings per share;
•Merger transaction related expenses, net of tax;
•Net interest margin (fully tax equivalent basis) and Net interest margin excluding purchase accounting loan accretion (fully tax equivalent basis);
•Efficiency ratio (fully tax equivalent basis) and Adjusted efficiency ratio (fully tax equivalent basis);
•Efficiency ratio;
•Pre-provision net revenue ("PPNR") and Adjusted PPNR; and
•Return on average tangible common equity and Adjusted return on average tangible common equity.
Cash and cash equivalents totaled $443.0$527.9 million at December 31, 2024,2025, including $375.0$441.5 million held at the Federal Reserve, compared to $222.0$443.0 million at December 31, 2023.2024. These excess funds, when combined with collective contingent liquidity resources of $4.6$6.7 billion including (i) available borrowing capacity from the FHLB and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, result in the total on-hand and contingentavailable liquidity sources for the Corporation as of December 31, 2025 to be approximately 5.05.4 times the estimated amount of adjusted uninsured deposit balances. The increase in cash and cash equivalents from December 31, 2023 to December 31, 2024, was primarily due to an increase in deposits, partially offset by an increase in the loan portfolio and securities portfolio.
The Corporation monitors the earnings performance and the effectiveness of the liquidity of the securities portfolio on a regular basis through meetings of the Asset/Liability Committee ("ALCO").ALCO. The ALCO also reviews and manages interest rate risk for the Corporation. Through active balance sheet management and analysis of the securities portfolio, a sufficient level of liquidity is maintained to satisfy depositor requirements and various credit needs of our customers.
At December 31, 2025, loans totaled $6.4 billion, excluding $70.8 million of syndicated loans. Excluding $1.7 billion in loans, net of estimated purchase accounting fair value adjustments, acquired in the ESSA acquisition, organic loan growth for the full year was $218.8 million, or an increase of 4.83%, compared to December 31, 2024. The full-year increase in loans as of December 31, 2025, compared to December 31, 2024, was primarily driven by growth in the Ridge View Bank, BankOnBuffalo, and legacy CNB Bank and ERIEBANK markets and loan activity in CNB Bank's Private Banking division.
At December 31, 2025, the syndicated loan portfolio totaled $70.8 million, or 1.09% of total loans, compared to $79.9 million, or 1.73% of total loans, at December 31, 2024. The decrease in syndicated lending balances of $9.1 million compared to December 31, 2024 reflects net scheduled amortization and prepayments of credits in excess of added holdings, with no recorded charge-offs in the syndicated portfolio in 2025. The Corporation continues to focus on evaluating the level and composition of its syndicated loan portfolio to ensure it continues to provide strong credit quality, profitable use of excess liquidity, and a complement to the Corporation’s loan growth from its in-market customer relationships.
At December 31, 2024, loans totaled $4.5 billion, excluding the balances of syndicated loans. This adjusted total of $4.5 billion in loans represented an increase of $169.4 million, or 3.88%, compared to the same adjusted total loans measured as of December 31, 2023. Loan growth for the year ended December 31, 2024, primarily resulted from growth in commercial and residential real estate loans in the Corporation's recent expansion markets of Cleveland, OH and Roanoke, VA. Additional growth occurred in the commercial and residential real estate loans in the Columbus, OH market, commercial industrial loans in the Erie, PA market and residential real estate loans in CNB Bank’s Private Banking division.
At December 31, 2024, the Corporation's balance sheet reflected a decrease in syndicated lending balances of $28.8 million compared to December 31, 2023, reflecting scheduled paydowns or early payoffs of certain syndicated credits during 2024. The syndicated loan portfolio totaled $79.9 million, or 1.73% of total loans at December 31, 2024, compared to $108.7 million, or 2.43% of total loans, at December 31, 2023.
As part of its lending policy and risk management activities, the Corporation tracks lending exposure by industry classification and type to determine potential risks associated with industry concentrations, and whetherto identify any concentration risk issues that could lead to additional credit loss exposure. InAn important and recurring part of this process involves the currentCorporation’s post-pandemiccontinued measurement and inflationaryevaluation economic environment, the Corporation has evaluatedof its exposure to the office, hospitality, and multifamily industries within its commercial real estate portfolio. Even given the Corporation’s historically sound underwriting protocols and high credit quality ratingsstandards for borrowers in thesethe industries,commercial real estate industry segments, the Corporation monitors numerous relevant sensitivity elements at both underwriting and through and beyond the funding period,elements, including projects occupancy, loan-to-value, absorption and cap rates, debt service coverage and covenant compliance, and developer/lessor financial strength both in the project and globally. At December 31, 2024,2025, the Corporation had the following key metrics related to its office, hospitality and multifamily portfolios with such metrics including the impact on the respective portfolios of loans acquired during the third quarter of 2025 from the ESSA acquisition:
◦There were 112147 outstanding loans, totaling $113.7$150.4 million, or 2.47%2.32% of total Corporation loans outstanding;
◦There were no nonaccrual commercial office loans at December 31, 2024;
◦There were nothree past duepast-due commercial office loans atthat Decembertotaled 31,$2.3 2024million, or 1.54% of the total office loans outstanding; and ◦The average outstanding balance per commercial office loan was $1.0 million.
◦There were 170153 outstanding loans, totaling $321.6$320.6 million, or 6.98%4.94% of total Corporation loans outstanding;
◦There were no nonaccrual commercial hospitality loans at December 31, 2024;
◦There were no past duepast-due commercial hospitality loans at December 31, 2024; and ◦The average outstanding balance per commercial hospitality loan was $1.9 million.
◦The average outstanding balance per commercial hospitality loan was $2.1 million.
◦There were 225375 outstanding loans, totaling $367.6$601.4 million, or 7.98%9.26% of total Corporation loans outstanding;
◦There were two nonaccrual commercial multifamily loan that totaled $20.7 million, or 5.62% of total multifamily loans outstanding. As previously discussed, one customer relationship did have a specific reserve of $885 thousand, while the other customer relationship did not have a related specific loss reserve at December 31, 2024;
◦There were threetwo past duenonaccrual commercial multifamily loans that totaled $21.1$799 million,thousand, or 5.75%0.13% of total commercial multifamily loans outstanding at December 31, 2024; and ◦The average outstanding balance per commercial multifamily loan was $1.6 million.
◦There was one past-due commercial multifamily loan that totaled $645 thousand, or 0.11% of total multifamily loans outstanding; and ◦The average outstanding balance per commercial multifamily loan was $1.6 million.
The following table summarizesummarizes the geographic region (based upon metropolitan statistical areas) in which the commercial office, hospitality and multifamily loans were originated as of December 31, 20242025:
The Corporation had no commercial office, hospitality or multifamily loan relationships considered by the banking regulators to be a high volatility commercial real estate credit ("HVCRE") ascredits. ofNo Decembercredits 31,acquired 2024.from ESSA were considered HVCRE.
Total nonperforming assets were approximately $42.2 million, or 0.50% of total assets, as of December 31, 2025, compared to $59.5 million, or 0.96% of total assets, as of December 31, 2024, compared to $31.8 million, or 0.55% of total assets, as of December 31, 2023.2024. The increasedecrease in nonperforming assets for the year ended December 31, 2024,2025 was due to onethe commercialresolution multifamilyof relationshipseveral totalingloans, $20.4 millioncoupled with apaydowns specificon reserveexisting balancenonperforming ofassets, $885partially thousand.offset by certain nonperforming assets acquired in the ESSA acquisition. Management does not believe there is a risk of significant additional loss exposure beyond the specific reserves related to this loan relationship and is actively working with the borrower and their real estate broker to facilitate the sale of the property. In addition, to the loan relationship discussed above, there were two other relationships: (i) a commercial and industrial and owner-occupied commercial real estate relationship as previously disclosed in the second quarter of 2024 and (ii) a commercial relationship (consisting of various loan types) in the third quarter of 2024 that contributed to the increase in nonperforming assets as of December 31, 2024, compared to December 31, 2023.
The Corporation has established written lending policies and procedures that require underwriting standards, loan documentation, and credit analysis standards to be met prior to funding a loan. Subsequent to the funding of a loan, ongoing review of credits is required. Credit reviews are performed quarterlyfive times per year by an outsourced loan review firm and cover approximately 65% of the commercial loan portfolio on an annual basis. In addition, the external independent loan review firm reviews past due loans and all significant classified assets and nonaccrual loans annually.
(1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the amount of allowance allocated and total loans receivable columns disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.
For the year ended December 31, 2024,2025, the increase in the allowance for credit losses increased $1.5 million. This increase was primarily driven by growththe ESSA acquisition, including the $18.2 million in PCD and Purchased Seasoned Loans ("PSL") allowance established on the Corporation'sacquisition loan portfolio in new market areasdate, as well as an increased unemployment rate forecast, partially offset by improvementsgrowth in the Corporation'sCorporation’s historicalloan loss rates, annual updates to the Corporation's loss drivers and assumptions, as well as the impact of net charge-offs.portfolio. Significant uncertainty persistscontinues regardingto affect both the domestic and global economyeconomic outlook due to persistent inflationchanges in certain segments of the U.S. economy,tariffs and corresponding policy actions by trading partners, persistently elevated interest rates, fluctuating levels of consumer confidence, and ongoing geopolitical conflicts. Management will continue to proactively evaluatereassess its estimate of expected credit losses as new information becomes available.
(1) Excludes provision for credit losses totaling $185 thousand related to unfunded commitments. Note 19, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.
During the year ended December 31, 2024,2025, the Corporation recorded a provision for credit losses of $9.2$8.9 million compared to $6.0$9.2 million for the year ended December 31, 2023.2024. Included in the provision for credit losses for the year ended December 31, 2024,2025 was a $185$208 thousand expense related to the allowance for unfunded commitments compared to a $156$185 thousand expense for the year ended December 31, 2023. The $3.2 million increase in the provision expense for the year ended December 31, 2024 compared to the year ended December 31, 2023, was primarily a result of the increase in loan portfolio growth and increase in the net loan charge-offs.2024. Net charge-offs during the year ended December 31, 20242025 were $7.5$7.2 million, or 0.17%0.13% of average total loans and loans held for sale, compared to $3.4$7.5 million, or 0.08%0.17% of average total loans and loans held for sale, during the year ended December 31, 2023.2024.
During the years ended December 31, 20242025 and 2023,2024, the Corporation invested $16.3$6.3 million and $10.8$16.3 million, respectively, in its physical infrastructure through the purchase of land, buildings, and equipment. The year ended December 31, 2025 includes premises and equipment related to the ESSA acquisition.
The Corporation has periodically purchased Bank Owned Life Insurance ("BOLI"). The policies cover executive officersofficers, directors and a select group of other employees with the Bank being named as beneficiary. Earnings from BOLI assist the Corporation in offsetting its benefit costs. The Corporation made no purchases of BOLI during the years ended December 31, 20242025 and December 31, 2023.2024, respectively.
At December 31, 2025, total deposits were $7.0 billion, reflecting an increase of $1.7 billion, or 30.8%, from December 31, 2024. Organic deposit growth for the full year of 2025, excluding $1.5 billion in deposits, net of estimated purchase accounting fair value adjustments, assumed in the ESSA acquisition and including $88.1 million in deposits classified as held for sale, total deposits increased $288.1 million, or 5.36%, compared to December 31, 2024. The $88.1 million in deposits classified as held for sale as of December 31, 2025 are associated with a planned sale of certain customer deposit accounts that are part of a broader strategic initiative to optimize the Corporation’s branch and market footprint following the ESSA acquisition. The increase in deposits was primarily attributable to retail account growth, as well as an increase in Treasury Management-sourced business including municipal deposits.
At December 31, 2024, total deposits were $5.4 billion, reflecting an increase of $372.6 million, or 7.45%, from December 31, 2023. The increase in deposits was due to continued growth in the Corporation's treasury management customer base and resulting increases in municipal and institutional/corporate deposits, including wealth and asset management deposit relationships resulting from CNB's participation in deposit insurance sharing programs.
At December 31, 2024, the average deposit balance per account for CNB Bank was approximately $34 thousand, which has remained consistently at this level for an extended period.
At December 31, 2025, the total estimated uninsured deposits for CNB Bank were approximately $2.0 billion, or approximately 28.13% of total CNB Bank deposits. However, when excluding affiliate company deposits of $18.4 million and pledged-investment collateralized deposits of $680.4 million, the adjusted amount and percentage of total estimated uninsured deposits was approximately $1.3 billion, or approximately 18.33% of total CNB Bank deposits as of December 31, 2025.
At December 31, 2023, the total estimated uninsured deposits for CNB Bank were approximately $1.4 billion, or approximately 28.21% of total CNB Bank deposits. However, when excluding affiliate company deposits of $101.3 million and pledged-investment collateralized deposits of $400.5 million, the adjusted amount and percentage of total estimated uninsured deposits was approximately $937.1 million, or approximately 18.37% of total CNB Bank deposits as of December 31, 2023.
Periodically, the Corporation utilizes term borrowings from the FHLB and other lenders to meet funding obligations or match fund certain loan assets. The terms of these borrowings are detailed in Note 10,11, "Borrowings," to the consolidated financial statements. There were no$164 short-termmillion in short term FHLB borrowings as of December 31, 20242025, andcompared to zero at December 31, 2023.2024. The increase in short-term borrowings at December 31, 2025 compared to December 31, 2024 was attributable to borrowings assumed with the ESSA acquisition.
At December 31, 2024,2025, the Corporation’s cash and cash equivalents position was approximately $443.0$527.9 million, including liquidity of $375.0$441.5 million held at the Federal Reserve. These excess funds, when combined with collective contingent liquidity resources of $6.4 billion including (i) available borrowing capacity of $4.6 billion from the Federal Home Loan Bank of Pittsburgh ("FHLB") and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, resulted in the total on-hand and contingentavailable liquidity sources for the Corporation beingas of December 31, 2025 to be approximately 5.05.2 times the estimated amount of adjusted uninsured deposit balances discussed above.balances.
In the ordinary course of business the Corporation has entered into contractual obligations and have made other commitments to make future payments. Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2024.2025. The Corporation’s material contractual obligations as of December 31, 20242025 consist of (i) long-term borrowings - Note 10,11, "Borrowings," (ii) operating and finance leases - Note 7,8, "Leases," (iii) time deposits with stated maturity dates - Note 9,10, "Deposits," and (iv) commitments to extend credit and standby letters of credit - Note 18,19, "Off-Balance Sheet Commitments and Contingencies."
On September 21, 2022, the Corporation successfully completed a common stock offering resulting in the issuance of 4,257,446 shares of common stock at $23.50 per share and net proceeds of $94.1 million after deducting the underwriting discount and customary offering expenses. The net proceeds from the capital raise will be used for general corporate purposes, including working capital and funding the Corporation's organic growth across its multiple geographic markets, or evaluating potential acquisition opportunities.
As of December 31, 2024,2025, the Corporation’s total shareholders’ equity was $610.7$872.1 million, representing an increase of $39.4$261.4 million, or 6.91%,42.81%, from December 31, 2023.2024. The changesincrease resulted from an increase in theadditional Corporation'spaid retainedin earningscapital (netof income,$202.6 partiallymillion offsetrelated byto the commonESSA and preferred stock dividends paid)acquisition, and a decrease in accumulated other comprehensive lossloss, primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’sCorporation's AFSavailable-for-sale investment portfolio.portfolio, Theand additionsgrowth toin shareholders equity from retained earnings were alsoearnings, partially offset by the Corporation's repurchasepayment of some of its common stock.and preferred stock dividends to the Corporation's shareholders during the year ended December 31, 2025.
(2) Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio. The taxable equivalent adjustment to net interest income for the years ended December 31, 2025, 2024, 2023, and 20222023 were $1.2 million, $955 thousand, and $997 thousand, and $1.2 million, respectively.
Year Ended December 31, 2025 vs. Year Ended December 31, 2024
Net income available to common shareholders ("earnings") was $61.8 million, or $2.49 per diluted share, for the year ended December 31, 2025. Excluding after-tax merger transaction related expenses, adjusted earnings were $73.4 million, or $2.95 per diluted share, for the year ended December 31, 2025, reflecting an increase of $23.2 million, or 46.06%, and $0.56 per diluted share, or 23.43%, compared to earnings of $50.3 million, or $2.39 per diluted share, for the year ended December 31, 2024. The full-year increase was primarily due to the overall impact of the acquisition of ESSA, coupled with an increase in net interest income, partially offset by an increase in non-interest expense, as discussed in more detail below. PPNR, a non-GAAP measure, was $91.3 million for the year ended December 31, 2025. Excluding merger and integration costs, adjusted PPNR was $105.1 million for the year ended December 31, 2025, compared to $76.6 million for the year ended December 31, 2024. The increase in year-to-date adjusted PPNR, when compared to the PPNR for the year ended December 31, 2024, was primarily due to the overall impact of incremental PPNR resulting from the acquisition of ESSA, coupled with an increase in net interest income across the legacy franchise for the year, partially offset by an increase in non-interest expense.
Return on average equity was 9.14% for the year ended December 31, 2025. Excluding after-tax merger transaction related expenses, return on average equity was 10.75% for the year ended December 31, 2025, compared to 9.21% for the year ended December 31, 2024. Return on average tangible common equity, a non-GAAP measure, was 10.59% for the year ended December 31, 2025. Excluding after-tax merger transaction related expenses, return on average tangible common equity was 12.58% for the year ended December 31, 2025, compared to 10.25% for the year ended December 31, 2024.
The Corporation's efficiency ratio was 67.64% for the year ended December 31, 2025, and 66.35% on a fully tax-equivalent basis, a non-GAAP measure. Excluding merger and integration costs, the efficiency ratio on a fully tax-equivalent basis was 61.49% for the year ended December 31, 2025, compared to 65.47% for the year ended December 31, 2024. The year-over-year decrease was primarily driven by higher net interest income, partially offset by higher non-interest expense, and also reflected the anticipated economies-of-scale operational efficiencies resulting from the ESSA acquisition.
Net interest income was $242.0 million for the year ended December 31, 2025 compared to $187.5 million for the year ended December 31, 2024. When comparing the year ended December 31, 2025 to the year ended December 31, 2024, the increase in net interest income of $54.6 million, or 29.11%, was due to investment and loan growth, coupled with the impact of the ESSA acquisition, including $6.6 million in purchase accounting loan accretion realized for the period from the July 23, 2025 acquisition date through December 31, 2025.
Net interest margin was 3.65% and 3.41% for the years ended December 31, 2025 and 2024, respectively. Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.65% and 3.39% for the years ended December 31, 2025 and 2024, respectively. Excluding the $6.6 million in purchase accounting loan accretion, net interest margin on a fully tax-equivalent basis for the year ended December 31, 2025 was 3.55%.
The yield on earning assets for the year ended December 31, 2025 was 5.90%, an increase of 2 basis points from December 31, 2024. The increase in yield compared to December 31, 2024 was primarily attributable to the $6.6 million in purchase accounting loan accretion.
The Corporation recorded a provision for credit losses of $8.9 million in 2025 compared to $9.2 million in 2024. Included in the provision for credit losses for the year ended December 31, 2025 was a $208 thousand expense related to the allowance for unfunded commitments compared to $185 thousand for the year ended December 31, 2024. Net loan charge-offs were $7.2 million during the year ended December 31, 2025, compared to $7.5 million during the year ended December 31, 2024. As disclosed in "Allowance for Credit Losses" discussion above, management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, reasonable and supportable forecasts, and other significant qualitative and quantitative factors.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors disclosed in Part I, Item 1A of the 2025 Form 10-K.
No wording changes found in this section.
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Management's Discussion & Analysis (MD&A)
New heading “RESULTS OF OPERATIONS”
New heading “Six Months Ended June 30, 2026 and 2025”
New heading “NET INTEREST INCOME”
New heading “PROVISION FOR CREDIT LOSSES”
New heading “NON-INTEREST INCOME”
New heading “NON-INTEREST EXPENSE”
New heading “INCOME TAX EXPENSE”
Largest changes
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The Corporation is a financial holding company registered under the BHC Act. It was incorporated under the laws of the Commonwealth of Pennsylvania in 1983 for the purpose of engaging in the business of a financial holding company. The Corporation's subsidiary, the Bank, provides financial services to individuals and businesses. The CNB Bank franchise's primary market areas are the Pennsylvania counties of Blair, Cambria, Centre, Clearfield, Elk, Indiana, Jefferson, and McKean. ERIEBANK, a division of the Bank, operates in the Pennsylvania counties of Crawford, Erie, and Warren and in the Ohio counties of Ashtabula, Cuyahoga, Geauga, Lake, and Lorain. FCBank, a division of the Bank, operates in the Ohio counties of Crawford, Delaware, Franklin, Knox, Marion, Morrow, and Richland. BankOnBuffalo, a division of the Bank, operates in the New York counties of Erie, Niagara, and Ontario. Ridge View Bank, a division of the Bank, operates in the Virginia counties of Botetourt, Craig, Franklin, New River Valley, and Roanoke. ESSA Bank, a division of the Bank, operates in the Pennsylvania counties of Delaware, Chester, Lackawanna, Lehigh, Luzerne, Monroe, and Northampton. Impressia Bank, a division of the Bank, operates in the Bank's primary market areas. Although the Corporation's strategies, through the Bank, are executed based on the divisions discussed above, the Bank is a single Pennsylvania-chartered bank whereby all divisions of the Bank conduct their business on a doing business as basis. Effective February 12, 2026, the Bank became a member bank of the Federal Reserve System, and its primary federal regulator is now the Federal Reserve Board, instead of the Federal Deposit Insurance Corporation.
The following discussion should be read in conjunction with the Corporation's consolidated financial statements and notes thereto for the year ended December 31, 2025, included in the 2025 Form 10-K, and in conjunction with the condensed consolidated financial statements and notes thereto included in Item 1 of this report. Operating results for the three and six months ended MarchJune 31,30, 2026 are not necessarily indicative of the results for the full year ending December 31, 2026, or any future period.
RECENT EVENTS
On July 23, 2025, the Corporation completed its acquisition of ESSA Bancorp, Inc. (“ESSA”), which added total assets, net of estimated purchase accounting fair value adjustments, of $2.1 billion, comprised primarily of $1.7 billion in loans. The acquisition also added $1.5 billion in deposits to CNB Bank's funding base as the transaction added 20 offices to CNB Bank’s branch network and extended its operating footprint into the Northeastern Pennsylvania Region including the Lehigh Valley of Pennsylvania.
Cash and cash equivalents totaled $602.5$458.4 million at MarchJune 31,30, 2026, including additional excess liquidity of $517.7$364.8 million held at the Federal Reserve, compared to $527.9 million at December 31, 2025. These excess funds, when combined with collective contingent liquidity resources of $6.2$6.0 billion including (i) available borrowing capacity from the FHLB and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, result in the total available liquidity sources for the Corporation to be approximately 5.34.8 times the estimated amount of adjusted uninsured deposit balances.
AFS debt securities and equity securities combined totaled $706.4$704.2 million and $595.2 million at MarchJune 31,30, 2026 and December 31, 2025, respectively. At MarchJune 31,30, 2026, the total balance of investments classified as HTM debt securities was $225.2$203.0 million compared to $242.1 million at December 31, 2025.
The following table summarizes the maturity distribution schedule with corresponding weighted-average yields of AFS debt securities as of MarchJune 31,30, 2026. Weighted-average yields have been computed on a fully taxable-equivalent basis using a tax rate of 21%. Mortgage-backed securities are included in maturity categories based on their stated maturity date.
The following table summarizes the maturity distribution schedule with corresponding weighted-average yields of HTM debt securities as of MarchJune 31,30, 2026:
The following table summarizes the weighted average modified duration of AFS securities as of MarchJune 31,30, 2026:
The following table summarizes the weighted average modified duration of securities HTM as of MarchJune 31,30, 2026:
Excluding $78.3$93.9 million of syndicated loan balances, total loans were $6.4 billion as of MarchJune 31,30, 2026. Organic loans decreased $67.3$2.9 million, or 1.05%0.05% year to date decrease (4.25%0.09% annualized), from December 31, 2025. The decrease in loans for the threesix months ended MarchJune 31,30, 2026 compared to December 31, 2025 was primarily driven by an increased level of commercial real estate ("CRE") loan prepayments, including full repayments of $71.4 million of CRE loans acquired in 2025 as a result of the ESSA acquisition, and a full payoff of $40.0 million of the Corporation’s largest office building loan related to a CRE property in the BankOnBuffalo division.
At MarchJune 31,30, 2026, the Corporation's condensed consolidated balance sheet reflected an increase in syndicated lending balances of $7.5$23.1 million compared to December 31, 2025. The syndicated loan portfolio totaled $78.3$93.9 million, or 1.22%1.44% of total loans, at MarchJune 31,30, 2026, compared to $70.8 million, or 1.09% of total loans at December 31, 2025. The Corporation continues to focus on evaluating the level and composition of its syndicated loan portfolio to ensure it continues to provide strong credit quality, profitable use of excess liquidity, andwhile complementscomplementing the Corporation’s loan growth from its in-market customer relationships. The Corporation’s portfolio of syndicated credits includes only commercial and industrial loans and no CRE exposure.
At MarchJune 31,30, 2026, the Corporation had the following key metrics related to its office, hospitality, and multifamily portfolios with such metrics including the impact on the respective portfolios of loans acquired during the third quarter of 2025 in the ESSA acquisition, as well as notable early payoffs of larger CRE credits occurring in the first quarter of 2026 as previously noted:
◦There werewas threeone past-due commercial office loansloan that totaled $2.3$204 million,thousand, or 1.58%0.16% of the total commercial office loans outstanding; and ◦The average outstanding balance per commercial office loan was $1.0$902 million.thousand.
◦There were fourtwo past-due commercial multifamily loanloans that totaled $1.1$751 million,thousand, or 0.19%0.14% of total multifamily loans outstanding; and ◦The average outstanding balance per commercial multifamily loan was $1.6 million.
The following table summarizes the geographic region (based upon metropolitan statistical areas) in which the commercial office, hospitality and multifamily loans were originated as of MarchJune 31,30, 2026:
As of MarchJune 31,30, 2026, the Corporation had no commercial office, hospitality or multifamily loan relationships considered by the banking regulators to be high volatility commercial real estate ("HVCRE") credits.
Maturities and Sensitivities of Loans Receivable to Changes in Interest Rate The following table presents the maturity distribution of the Corporation's loans receivable at MarchJune 31,30, 2026. The table also presents the portion of loans receivable that have fixed interest rates or variable interest rates that fluctuate over the life of the loans in accordance with changes in an interest rate index.
At MarchJune 31,30, 2026, no industry concentration existed which exceeded 10% of the total loan portfolio.
The following table presents information concerning the loan portfolio delinquency and other nonperforming assets at MarchJune 31,30, 2026 and December 31, 2025:
Total nonperforming assets were $49.2$58.4 million, or 0.58%0.69% of total assets, as of MarchJune 31,30, 2026, compared to $42.2 million, or 0.50% of total assets, as of December 31, 2025. In addition, the allowance for credit losses as a percentage of nonaccrual loans was 145.33%123.00% at MarchJune 31,30, 2026, compared to 168.29% at December 31, 2025. The increase in nonperforming assets for the threesix months ended MarchJune 31,30, 2026, compared to December 31, 2025 was primarily driven by onetwo commercial relationship.relationships.
The tables below provide an allocation of the allowance for credit losses on loans receivable by loan portfolio segment at MarchJune 31,30, 2026 and December 31, 2025; however, allocation of a portion of the allowance for credit losses to one segment does not preclude its availability to absorb losses in other segments.
The allowance for credit losses measured as a percentage of total loans receivable was 1.04% as of MarchJune 31,30, 2026 and 1.03% as of December 31, 2025.
For the threesix months ended MarchJune 31,30, 2026, the allowance for credit losses remainedincreased unchanged,$400 reflectingthousand, stableprimarily creditdriven qualityby growth in the Corporation's loan portfolio. Significant uncertainty persists in the domestic and global economic environment due to changes in U.S. tariffs and related actions by U.S. trading partners, elevated interest rates, inflationary pressures, fluctuating consumer confidence, and geopolitical events. The Corporation continues to monitor these conditions and other economic factors that may affect the financial strength of corporate and consumer borrowers, and management will update its estimate of expected credit losses as additional information becomes available.
Note 5, "Loans Receivable and Allowance for Credit Losses," to the condensed consolidated financial statements provides further disclosure of loan balances by portfolio segment as of MarchJune 31,30, 2026 and December 31, 2025.
Additional information related to provision for credit loss expense and net charge-offs and recoveries for the three and six months ended MarchJune 31,30, 2026 and 2025 is presented in the tables below.
(1) Excludes provision for credit losses related to unfunded commitments. Note 10, "Off-Balance Sheet Commitments and Contingencies," to the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.
(1) Excludes provision for credit losses related to unfunded commitments. Note 10, "Off-Balance Sheet Commitments and Contingencies," to the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.
Provision for credit losses was $998$1.8 thousandmillion forand the three months ended March 31,2026, compared to $1.6$2.8 million for the three and six months ended MarchJune 31,30, 2026, respectively, compared to $4.3 million and $5.9 million for the three and six months ended June 30, 2025, respectively. The decrease in provision for credit losses was primarily due to atwo decreasepreviously indisclosed commercial real estate charge-offs recognized during the loanthree portfolio,and coupledsix withmonths lowerended loanJune net30, charge-offs.2025. In addition, included in the provision for credit losses for the three and six months ended MarchJune 31,30, 2026 was a reversal of $66 thousand and a provision of $114$48 thousandthousand, respectively, related to the allowance for unfunded commitments compared to $117provisions of $63 thousand provision,and $180 thousand, respectively, related to the allowance for unfunded commitments for the three and six months ended MarchJune 31,30, 2025.
At MarchJune 31,30, 2026, total deposits were $7.1 billion. Including $89.9$81.3 million in deposits classified as held for sale, organic deposit growth for the quarteryear totaled $115.0$46.5 million, or 1.62%,0.65%, from December 31, 2025. The quarter-over-quartersecond quarter of 2026 included the exit of a higher cost municipal deposit relationship totaling approximately $140.0 million, with an average interest cost of 3.49%. Excluding the impact of this exit, total deposits increased approximately $186.5 million or 2.62% (5.29% annualized), compared to December 31, 2025. The increase in organic deposit balances as of MarchJune 31,30, 2026, compared to December 31, 2025, was driven primarily by expanded Treasury Management activity among municipal deposit relationships, supplemented by growth in corporate and wholesale deposits.
The following table presents additional information about our MarchJune 31,30, 2026 and December 31, 2025 deposits:
At MarchJune 31,30, 2026, the total estimated uninsured deposits for the Bank were approximately $2.1 billion, or approximately 29.11%28.83% of total Bank deposits. However, when excluding $32.1$21.2 million of affiliate company deposits and $808.1$704.2 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $1.3 billion, or approximately 17.54%18.73% of total Bank deposits as of MarchJune 31,30, 2026.
Scheduled maturities of time deposits not covered by deposit insurance at MarchJune 31,30, 2026 were as follows:
The Corporation's expected material cash requirements for the twelve months ended MarchJune 31,30, 2027 and thereafter consist of withdrawals by depositors, credit commitments to borrowers, shareholder dividends, share repurchases, operating expenses, and capital expenditures that are pursuant to the Corporation's strategic initiatives. The Corporation expects to satisfy these short-term and long-term cash requirements through deposit growth, principal and interest payments from loans and investment securities, maturing loans and investment securities, as well as by maintaining access to wholesale funding sources.
At MarchJune 31,30, 2026, the Corporation's cash and cash equivalents position was approximately $602.5$458.4 million, including liquidity of $517.7$364.8 million held at the Federal Reserve. These excess funds, when combined with $6.2$6.0 billion in (i) available borrowing capacity from the FHLB and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, result in the total available liquidity sources for the Corporation to be approximately 5.34.8 times the estimated amount of adjusted uninsured deposit balances discussed above.
The following table summarizes the Corporation's net available liquidity and borrowing capacities as of MarchJune 31,30, 2026:
(1) Availability contingent on the FHLB activity-based stock ownership requirement (2) Includes access to discount window and BIC program (3) Availability contingent on internal borrowing guidelines (4) Availability contingent on correspondent bank approvals at time of borrowing As of MarchJune 31,30, 2026, management is not aware of any events that are reasonably likely to have a material adverse effect on the Corporation's liquidity, capital resources or operations. In addition, management is not aware of any regulatory recommendations regarding liquidity that would have a material adverse effect on the Corporation.
In the ordinary course of business, the Corporation has entered into contractual obligations and have made other commitments to make future payments. Refer to the accompanying notes to condensed consolidated financial statements elsewhere in this report for the expected timing of such payments as of MarchJune 31,30, 2026. The Corporation's material contractual obligations as of MarchJune 31,30, 2026 consisted of (i) long-term borrowings - Note 8, "Borrowings," (ii) operating leases - Note 6, "Leases," (iii) time deposits with stated maturity dates - Note 7, "Deposits," and (iv) commitments to extend credit and standby letters of credit - Note 10, "Off-Balance Sheet Commitments and Contingencies."
As of MarchJune 31,30, 2026, the Corporation's total shareholders' equity was $889.1$909.4 million, representing an increase of $17.0$37.3 million, or 1.95%,4.28%, from December 31, 2025, primarily duedriven to an increase in additional paid in capital related to the ESSA acquisition,by growth in retained earnings, andnet a decrease in accumulated other comprehensive loss, partially offset byof the payment of common and preferred stock dividendsdividends, topartially shareholders.offset by an increase in accumulated other comprehensive loss.
As of MarchJune 31,30, 2026, all of the Corporation's capital ratios exceeded regulatory "well-capitalized" levels. The Corporation's capital ratios and book value per common share at MarchJune 31,30, 2026 and December 31, 2025 were as follows:
(1) The primary driver of the decrease in the Total risk-based ratio from December 31, 2025, to June 30, 2026, was the redemption of $50.0 million of Subordinated Notes in June 2026. See Note 8, "Borrowings," to the condensed consolidated financial statements for additional information regarding the redemption.
At MarchJune 31,30, 2026, the Corporation's pre-tax net unrealized losses on the combined portfolios of available-for-sale and held-to-maturity securities totaled approximately $51.9$54.8 million, or 5.83%6.02% of total shareholders' equity, compared to $47.0 million, or 5.39% of total shareholders' equity at December 31, 2025. The change in unrealized losses was primarily due to changes in the yield curve, coupled with the Corporation's scheduled bond maturities, which were all realized at par. Importantly, all regulatory capital ratios for the Corporation would exceed regulatory "well-capitalized" levels as of both MarchJune 31,30, 2026 and December 31, 2025 if the net unrealized losses at the respective dates were fully recognized.
The following tabletables presentspresent average balances of certain measures of our financial condition and net interest margin for the three and six months ended MarchJune 31,30, 2026 and 2025:
(2) Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio. The taxable equivalent adjustment to net interest income for the three months ended MarchJune 31,30, 2026 and 2025 was $398$497 thousand and $260$265 thousand, respectively.
(4) Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the three months ended MarchJune 31,30, 2026 and 2025 was $(32.240.2) million and $(48.142.6) million, respectively.
(1) Includes unamortized discounts and premiums.
(2) Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio. The taxable equivalent adjustment to net interest income for the six months ended June 30, 2026 and 2025 was $894 thousand and $525 thousand, respectively.
(3) Average loans receivable outstanding includes the average balance outstanding of all nonaccrual loans. Loans receivable consist of the average of total loans receivable less average unearned income. In addition, loans receivable interest income consists of loans receivable fees, including PPP deferred processing fees.
(4) Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the six months ended June 30, 2026 and 2025 was $(36.2) million and $(45.3) million, respectively.
The following table presents the change in net interest income for the three months ended MarchJune 31,30, 2026 and 2025:
(2) Changes in interest income on tax-exempt securities and loans receivable are presented on a fully taxable-equivalent basis, using the Corporation's marginal federal income tax rate of 21% for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025.
(3) Includes loans held for sale.
The following table presents the change in net interest income for the six months ended June 30, 2026 and 2025:
(1) Changes in interest income or expense not arising solely as a result of volume or rate variances are allocated to volume changes.
(2) Changes in interest income on tax-exempt securities and loans receivable are presented on a fully taxable-equivalent basis, using the Corporation's marginal federal income tax rate of 21% for the six months ended June 30, 2026 and June 30, 2025.
Three Months Ended MarchJune 31,30, 2026 and 2025
Net income available to common shareholders ("earnings") was $26.0$27.2 million, or $0.88$0.91 per diluted share, for the three months ended MarchJune 31,30, 2026, compared to $10.4$12.9 million, or $0.50$0.61 per diluted share, for the three months ended MarchJune 31,30, 2025. Excluding after-tax merger transaction related expenses, a non-GAAP measure, earnings were $11.9$13.2 million, or $0.57$0.63 per diluted share, for the three months ended MarchJune 31,30, 2025. Earnings for the three months ended MarchJune 31,30, 2026 increased $14.1$14.0 million, or $0.31$0.28 per diluted share, a 54.39% increase compared to adjusted earnings per share for the three months ended MarchJune 31,30, 2025, due primarily to the overall impact of the acquisition of ESSA.
Annualized return on average equity was 12.36%12.65% and 7.52%8.83% for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively. Excluding after-tax merger transaction related expenses, annualized return on average equity was 8.49%9.06% for the three months ended MarchJune 31,30, 2025. Annualized return on average tangible common equity, a non-GAAP measure, was 14.89%15.20% and 8.15%9.71% for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively. Excluding after-tax merger transaction related expenses, annualized return on average tangible common equity was 9.32%9.98% for the three months ended MarchJune 31,30, 2025.
The Corporation's efficiency ratio was 59.03%57.86% and 72.07%64.73% for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively, and 57.32%56.14% and 71.28%,64.08%, respectively, on a fully tax-equivalent basis, a non-GAAP measure. Excluding merger and integration costs, the efficiency ratio on fully tax-equivalent basis was 68.62%63.50% for the three months ended MarchJune 31,30, 2025.
Net interest income was $73.3$76.3 million for the three months ended MarchJune 31,30, 2026, compared to $48.4$52.2 million for the three months ended MarchJune 31,30, 2025. When comparing the firstsecond quarter of 2026 to the firstsecond quarter of 2025, the increase in net interest income of $24.9$24.1 million, or 51.40%,46.26%, was primarily due to the acquisition of ESSA, including $3.0 million in purchase accounting loan accretion. This accretion reflects the recognition of fair value marks on acquired loans, which are accreted into interest income over the expected lifeimpact of the assets.acquisition of ESSA and growth in the Corporation's legacy loan portfolio.
CCNE insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (1 insider, 2 trade dates, 2,100 shares, about $69.3K) and open-market sales in 3 filings (3 insiders, 3 trade dates, 1,648 shares, about $50.2K). Net open-market shares: 452 (purchases minus sales); net value about $19.1K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-05 | Peduzzi Michael D |
Open-market purchase | 1,100 | $35.37 | $38.9K |
| 2026-06-05 | Straub Francis X Iii |
Gift | 15,169 | — | — |
| 2026-06-05 | Straub Francis X Iii |
Gift | 5,250 | — | — |
| 2026-06-04 | Mink Robin |
Open-market sale | 104 | $30.53 | $3.2K |
| 2026-04-30 | Pontzer Deborah Dick |
Open-market sale | 244 | $30.55 | $7.5K |
| 2026-04-27 | Higgins Carla M. |
Open-market sale | 1,300 | $30.45 | $39.6K |
| 2026-04-24 | Peduzzi Michael D |
Open-market purchase | 1,000 | $30.35 | $30.4K |
Well-known investors holding CCNE (13F)
None of the 59 investors we track reported a position in their latest 13F.