CNB Financial Corporation (“CNB” or the “Corporation”) (NASDAQ:
CCNE), the parent company of CNB Bank, today announced its earnings
for the twelve and three months ended December 31, 2022.
Executive Summary
- Net income available to common
shareholders ("earnings") was $58.9 million, or $3.26 per diluted
share, for the twelve months ended December 31, 2022, compared to
$53.4 million, or $3.16 per diluted share, for the twelve months
ended December 31, 2021, reflecting increases of $5.5 million, or
10.3%, and $0.10 per diluted share, or 3.2%. The 2022 full-year
earnings per share was partially impacted as a result of the
dilutive effect of the Corporation's common stock offering
completed in September of 2022, 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.
- Earnings for the three months ended
December 31, 2022 were $14.8 million, or $0.70 per diluted share,
compared to $13.6 million, or $0.80 per diluted share, for the
three months ended December 31, 2021. The increase in earnings of
$1.3 million, or 9.2%, for the three months ended December 31, 2022
compared to the same period in the prior year resulted primarily
from growth in commercial loans and year-over-year increases in the
balance of investment securities, stable credit quality, and an
asset-sensitive balance sheet supporting increased net interest
income in the current rising rate environment. The decrease in
diluted earnings per share of $0.10, or 12.5%, for the three months
ended December 31, 2022 compared to the same period in the prior
year is due to the additional shares issued in the common equity
capital raise in the third quarter 2022, as discussed above, which
had a significant impact on the weighted average number of shares
outstanding for the Corporation, in the fourth quarter of
2022.
- Processing fees on Paycheck
Protection Program ("PPP") loans (“PPP-related fees”) totaled
approximately $1.9 million for the twelve months ended December 31,
2022, compared to $8.7 million for the twelve months ended December
31, 2021. PPP-related fees totaled approximately $19 thousand for
the three months ended December 31, 2022, compared to $1.9 million
for the three months ended December 31, 2021. At December 31, 2022,
remaining deferred PPP-related fees totaled approximately $3
thousand.
- At December 31, 2022, loans,
excluding the impact of (i) syndicated loans, and (ii) PPP loans,
net of PPP-related fees (such loans being referred to as the
"PPP-related loans"), totaled $4.1 billion, representing an
increase of $654.5 million, or 18.9%, from December 31, 2021. This
favorable loan growth, which was experienced across the
Corporation's footprint, continued to reflect the Corporation's
ongoing expansion in the Cleveland and Southwest Virginia regions,
as well as new opportunities from its new loan production office in
Rochester, New York, combined with growth in the portfolio related
to its Private Banking division.
- For the twelve months ended
December 31, 2022, the Corporation's balance sheet reflected an
increase in syndicated lending balances of $30.9 million compared
to December 31, 2021. The syndicated loan portfolio totaled $156.6
million, or 3.7% of total loans, excluding PPP-related loans, at
December 31, 2022, compared to $125.8 million, or 3.5% of total
loans, excluding PPP-related loans, at December 31, 2021.
- At December 31, 2022, total
deposits were $4.6 billion, reflecting a decrease of $93.2 million,
or 2.0%, from December 31, 2021. The decrease in deposit balances
was primarily the result of increased utilization of liquidity by
our customers as well as some reductions in excess balances from
certain customers with a higher level of interest rate sensitivity.
While deposit balances decreased, the total number of deposit
households increased by 2.2% from December 31, 2021 to December 31,
2022.
- At December 31, 2022, short-term
borrowings from the Federal Home Bank of Pittsburgh ("FHLB")
totaled approximately $132.4 million, compared to no borrowings at
December 31, 2021. The increase in short-term borrowings resulted
primarily from the fourth quarter growth in loans outpacing the
growth in deposit balances for the same period.
- Total nonperforming assets were
approximately $23.5 million, or 0.43% of total assets, as of
December 31, 2022, compared to $20.3 million, or 0.38% of total
assets, as of December 31, 2021. For the three months ended
December 31, 2022, net loan charge-offs were $821 thousand, or
0.08% (annualized) of average total loans and loans held for sale,
compared to $456 thousand, or 0.05% (annualized) of average total
loans and loans held for sale, during the three months ended
December 31, 2021.
- Pre-provision net revenue ("PPNR"),
a non-GAAP measure, was $86.8 million for the twelve months ended
December 31, 2022, compared to $76.8 million for the twelve months
ended December 31, 2021, reflecting an increase of $10.0 million,
or 13.1%.1 PPNR was $22.8 million for the three months ended
December 31, 2022, compared to $18.5 million for the three months
ended December 31, 2021, reflecting an increase of $4.3 million, or
23.2%.1 The increase in PPNR for the twelve and three months ended
December 31, 2022 was primarily driven by growth in loans and
expansion of the Corporation's net interest margin.
1 This release contains references to certain
financial measures that are not defined under U.S. Generally
Accepted Accounting Principles ("GAAP"). Management believes that
these non-GAAP measures provide a greater understanding of ongoing
operations, enhance comparability of results of operations with
prior periods and show the effects of significant gains and charges
in the periods presented. A reconciliation of these non-GAAP
financial measures is provided in the "Non-GAAP Reconciliations"
section.
Michael D. Peduzzi, President and CEO, stated,
"I am pleased to report that our results for 2022 represent record
full-year earnings for the Corporation. Our performance reflects
the dedicated, collective efforts of our commercial business
development officers, retail office and client service personnel,
wealth management and treasury services professionals, and
corporate support teams. Our strategy of operating multiple
relevant banking brands and divisions across four states
efficiently under one bank charter greatly supported our
double-digit percentage loan growth and increases in fee-based
revenues. Importantly, we maintained our underwriting and pricing
discipline reflected by sound asset quality measures and a strong
net interest margin. With our business development professionals
being strongly connected in the markets across our footprint, and
the addition in 2023 of our new women’s banking division, Impressia
Bank, we believe we remain well-positioned for continued
qualitative growth."
Other Balance Sheet
Highlights
- As of December 31, 2022, the total
balance of investments classified as held-to-maturity was $404.8
million. There were no securities classified as held-to-maturity at
December 31, 2021. During 2022, as a result of the Corporation’s
asset/liability and capital management strategies, securities with
a combined amortized cost of $220.8 million and a fair value of
$213.7 million were transferred from available-for-sale to
held-to-maturity. These held-to-maturity portfolio bonds continue
to support liquidity through pledging and can be utilized as
collateral against borrowings. In addition to these internal
portfolio transfers, some of the investment purchases made by the
Corporation during 2022 were also classified as held-to-maturity
securities.
- Book value per common share was
$22.39 at December 31, 2022, representing a decrease of 2.0% from
$22.85 at December 31, 2021. Tangible book value per common share,
a non-GAAP measure, was $20.30 as of December 31, 2022, reflecting
an increase of 0.4% from a tangible book value per common share of
$20.22 as of December 31, 2021.1 The changes in book value per
common share and tangible book value per common share compared to
the prior year were mostly due to a $52.1 million increase in
accumulated other comprehensive loss primarily from the temporary
unrealized valuation changes in the available-for-sale investment
portfolio. The after-tax impact of these unrealized losses was
substantially, but not completely, offset by a $46.3 million
increase in retained earnings. Book value and tangible book value
also benefited from the issuance price of the shares added from the
previously discussed common equity capital raise completed in
September of 2022. In addition, tangible book value per common
share benefited from a lower core deposit intangible balance at
December 31, 2022.
Performance Ratios
- Annualized return on average equity
was 13.86% and 12.45% for the twelve and three months ended
December 31, 2022, respectively, compared to 13.39% and 13.17% for
the twelve and three months ended December 31, 2021,
respectively.
- Annualized return on average
tangible common equity, a non-GAAP measure, was 16.64% and 14.54%
for the twelve and three months ended December 31, 2022,
respectively, compared to 16.23% and 15.87% for the comparable
periods in 2021, respectively.1
- While the previously discussed
common equity capital raise completed in the third quarter of 2022
significantly enhanced the Corporation’s capital position, it also
impacted the performance ratios for the twelve and three months
ended December 31, 2022 and the related comparison to prior
periods.
- The Corporation's efficiency ratio
was 61.32% and 61.87% for the twelve and three months ended
December 31, 2022, respectively, compared to 60.26% and 63.68% for
the twelve and three months ended December 31, 2021, respectively.
The efficiency ratio on a fully tax-equivalent basis, a non-GAAP
ratio, was 60.87% and 61.40% for the twelve and three months ended
December 31, 2022, respectively, compared to 59.76% and 63.19% for
the twelve and three months ended December 31, 2021, respectively.1
The increase for the twelve months ended December 31, 2022 was
primarily a result of expected increasing costs associated with the
Corporation’s expanding franchise investments into the Cleveland
and Southwest Virginia markets, coupled with its continued
strategic investments in technologies focused on customer sales
management and connectivity capabilities. In addition, the fourth
quarter of 2021 included approximately $2.3 million in additional
personnel costs primarily from higher incentive compensation
accruals and certain retirement benefit expenses.
Revenue
- Net interest income combined with
non-interest income ("total revenue") was $224.4 million for the
twelve months ended December 31, 2022, representing an increase of
$31.2 million, or 16.2%, from the twelve months ended December 31,
2021, primarily due to the following:
- Net interest income of $189.7
million for the twelve months ended December 31, 2022 increased
$29.9 million, or 18.7%, from the twelve months ended December 31,
2021, primarily as a result of loan growth throughout 2022 and the
benefits of the impact of rising interest rates in 2022 resulting
in greater income on variable-rate loans, coupled with net growth
in the Corporation's investment portfolio. Included in net interest
income were PPP-related fees, which totaled approximately $1.9
million for the twelve months ended December 31, 2022, compared to
$8.7 million for the twelve months ended December 31, 2021.
- Net interest margin was 3.83% and
3.35% for the twelve months ended December 31, 2022 and 2021,
respectively. Net interest margin on a fully tax-equivalent basis,
a non-GAAP measure, was 3.82% and 3.38% for the twelve months ended
December 31, 2022 and 2021, respectively.1
- The yield on earning assets of
4.30% for the twelve months ended December 31, 2022 increased 51
basis points from 3.79% for the twelve months ended December 31,
2021, primarily as a result of loan growth, the repricing of
variable rate loans, and the Corporation's redeployment of excess
cash at the Federal Reserve to investment securities, partially
offset by lower PPP-related fees in 2022 compared to 2021.
- The cost of interest-bearing
liabilities increased 10 basis points from 0.52% for the twelve
months ended December 31, 2021 to 0.62% for the twelve months ended
December 31, 2022, primarily as a result of the Corporation’s
targeted interest-bearing deposit rate increases.
- Total revenue was $59.8 million for
the three months ended December 31, 2022, representing an increase
of $8.9 million, or 17.4%, compared to the three months ended
December 31, 2021, primarily due to the following:
- Net interest income of $50.8
million for the three months ended December 31, 2022 increased $8.8
million, or 20.9%, from the three months ended December 31, 2021,
primarily as a result of loan growth and the net benefit of higher
interest rates on both variable-rate loans and new loan production.
Included in net interest income were PPP-related fees, which
totaled approximately $19 thousand for the three months ended
December 31, 2022, compared to $1.9 million for the three months
ended December 31, 2021.
- Net interest margin was 4.07% and
3.38% for the three months ended December 31, 2022 and 2021,
respectively. Net interest margin on a fully tax-equivalent basis,
a non-GAAP measure, was 4.03% and 3.41% for the three months ended
December 31, 2022 and 2021, respectively.1
- The yield on earning assets of
4.95% for the three months ended December 31, 2022 increased 120
basis points from 3.75% for the three months ended December 31,
2021, primarily as a result of loan growth and the Corporation
redeploying excess cash at the Federal Reserve to investment
securities. Net interest income also reflected the net benefit of
higher interest rates, partially offset by lower PPP-related fees
in 2022 compared to 2021.
- The cost of interest-bearing
liabilities increased 77 basis points from 0.43% for the three
months ended December 31, 2021 to 1.20% for the three months ended
December 31, 2022, primarily as a result of the Corporation’s
targeted interest-bearing deposit rate increases and short-term
borrowings through the FHLB.
- Total non-interest income was $34.8
million for the twelve months ended December 31, 2022, representing
an increase of $1.3 million, or 4.0%, from the same period in 2021.
Included in non-interest income for the twelve months ended
December 31, 2022 and 2021 was $651 thousand and $783 thousand,
respectively, in net realized gains on available-for-sale
securities. Non-interest income excluding realized gains on
available-for-sale securities, a non-GAAP measure, for the twelve
months ended December 31, 2022, increased $1.5 million, or 4.5%,
from the same period in 2021.1 During the twelve months ended
December 31, 2022, Wealth and Asset Management fees increased $432
thousand, or 6.4%, compared to the twelve months ended December 31,
2021, as the Corporation benefited from an increased number of
wealth management relationships. Other notable increases during the
twelve months ended December 31, 2022 included increased income
from service charges on deposits, other service charges and fees,
pass-through income from small business investment companies
("SBICs") and bank owned life insurance mostly due to an $883
thousand gain resulting from death benefit proceeds. These were
partially offset by unrealized losses on equity securities and
decreased mortgage banking activity.
- Total non-interest income was $9.0
million for the three months ended December 31, 2022, representing
an increase of $83 thousand, or 0.9%, from the same period in 2021.
The increase was primarily the result of income from service
charges and fees and pass-through income from SBICs, partially
offset by decreased mortgage banking activity.
Non-Interest Expense
- For the twelve months ended
December 31, 2022, total non-interest expense was $137.6 million,
reflecting an increase of $21.2 million, or 18.2%, from the twelve
months ended December 31, 2021, primarily as a result of (i)
expansion of the Corporation's workforce in its growth regions of
Cleveland, Southwest Virginia, and Rochester, (ii) increased
investments in technology aimed at enhancing both customer
experience and expanding service delivery channels, and (iii) the
Corporation’s sales management and increased legal and professional
expenses.
- For the three months ended December
31, 2022, total non-interest expense was $37.0 million, reflecting
an increase of $4.6 million, or 14.0%, from the three months ended
December 31, 2021, primarily as a result of the same expense
drivers as discussed above.
Income Taxes
- Income tax expense was $15.0
million, representing a 19.2% effective tax rate, and $13.1
million, representing a 18.5% effective tax rate, for the twelve
months ended December 31, 2022 and 2021, respectively.
Asset Quality
- Total nonperforming assets were
$23.5 million, or 0.43% of total assets, as of December 31, 2022,
compared to $20.3 million, or 0.38% of total assets, as of December
31, 2021.
- The allowance for credit losses
measured as a percentage of total loans was 1.02% as of December
31, 2022, compared to 1.03% as of December 31, 2021. In addition,
the allowance for credit losses as a percentage of nonaccrual loans
was 207.0% as of December 31, 2022, compared to 193.6% as of
December 31, 2021.
- Provision for credit losses was
$8.6 million and $3.0 million for the twelve and three months ended
December 31, 2022, respectively, compared to $6.0 million and $814
thousand for the twelve and three months ended December 31, 2021,
respectively. Included in the provision for credit losses for the
twelve and three months ended December 31, 2022 was $603 thousand
expense and a $38 thousand benefit, respectively, related to the
allowance for unfunded commitments compared to no accrual towards
the allowance for unfunded commitments for the twelve and three
months ended December 31, 2021.
- For the twelve months ended
December 31, 2022, net loan charge-offs were $2.1 million, or 0.05%
of average total loans including loans held for sale, compared to
$2.8 million, or 0.08%, during the twelve months ended December 31,
2021.
- For the three months ended December
31, 2022, net loan charge-offs were $821 thousand, or 0.08%
(annualized) of average total loans including loans held for sale,
compared to $456 thousand, or 0.05% (annualized), during the three
months ended December 31, 2021.
Capital
- As of December 31, 2022, the
Corporation’s total shareholders’ equity was $530.8 million,
representing an increase of $87.9 million, or 19.9%, from December
31, 2021, primarily due to the $94.1 million increase in additional
paid in capital as a result of the Corporation's common stock
offering and the increase from the Corporation's earnings,
partially offset by both common and preferred dividends paid during
the year, and a significant increase in accumulated other
comprehensive loss during the year resulting primarily from the
temporary unrealized reduction in the value of the
available-for-sale investment portfolio during the twelve months
ended December 31, 2022.
- Regulatory capital ratios for the
Corporation continue to exceed regulatory “well-capitalized” levels
as of December 31, 2022.
- As of December 31, 2022, the
Corporation’s ratio of common shareholders' equity to total assets
was 8.64% compared to 7.23% at December 31, 2021. As of December
31, 2022, the Corporation’s ratio of tangible common equity to
tangible assets, a non-GAAP measure, was 7.90% compared to 6.45% at
December 31, 2021. This increase was the result of the above-noted
impacts of the Corporation's common stock offering and an increase
in retained earnings, partially offset by an increase in
accumulated other comprehensive loss during the twelve months ended
December 31, 2022.1
About CNB Financial
Corporation
CNB Financial Corporation is a financial holding
company with consolidated assets of approximately $5.5 billion. CNB
Financial Corporation conducts business primarily through its
principal subsidiary, CNB Bank. CNB Bank is a full-service bank
engaging in a full range of banking activities and services,
including trust and wealth management services, for individual,
business, governmental, and institutional customers. CNB Bank
operations include a private banking division, three loan
production offices, one drive-up office, one mobile office and 47
full-service offices in Pennsylvania, Ohio, New York and Virginia.
CNB Bank’s divisions include ERIEBANK, based in Erie, Pennsylvania,
with offices in Northwest Pennsylvania and Northeast Ohio; FCBank,
based in Worthington, Ohio, with offices in Central Ohio;
BankOnBuffalo, based in Buffalo, New York, with offices in Western
New York; Ridge View Bank, with loan production offices in the
Southwest Virginia region; and Impressia Bank which will operate in
CNB Bank’s primary market areas. CNB Bank is headquartered in
Clearfield, Pennsylvania, with offices in Central and North Central
Pennsylvania. Additional information about CNB Financial
Corporation may be found at www.CNBBank.bank.
Forward-Looking Statements
This press release includes forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, with respect to CNB’s financial condition,
liquidity, results of operations, future performance and business.
These forward-looking statements are intended to be covered by the
safe harbor for “forward-looking statements” provided by the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are those that are not historical facts. Forward-looking
statements include statements with respect to beliefs, plans,
objectives, goals, expectations, anticipations, estimates and
intentions that are subject to significant risks and uncertainties
and are subject to change based on various factors (some of which
are beyond CNB’s control). Forward-looking statements often include
the words “believes,” “expects,” “anticipates,” “estimates,”
“forecasts,” “intends,” “plans,” “targets,” “potentially,”
“probably,” “projects,” “outlook” or similar expressions or future
conditional verbs such as “may,” “will,” “should,” “would” and
“could.” CNB’s actual results may differ materially from those
contemplated by the forward-looking statements, which are neither
statements of historical fact nor guarantees or assurances of
future performance. 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;
(ii) changes in interest rates; (iii) the duration and scope of a
pandemic, including the ongoing COVID-19 pandemic, and the local,
national and global impact of a pandemic;; (iv) changes in general
business, industry or economic conditions or competition; (v)
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; (vi) higher than expected costs or other difficulties
related to integration of combined or merged businesses; (vii) the
effects of business combinations and other acquisition
transactions, including the inability to realize our loan and
investment portfolios; (viii) changes in the quality or composition
of our loan and investment portfolios; (ix) adequacy of loan loss
reserves; (x) increased competition; (xi) loss of certain key
officers; (xii) deposit attrition; (xiii) rapidly changing
technology; (xiv) unanticipated regulatory or judicial proceedings
and liabilities and other costs; (xv) changes in the cost of funds,
demand for loan products or demand for financial services; and
(xvi) 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. For more information
about factors that could cause actual results to differ from those
discussed in the forward-looking statements, please refer to the
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of and the
forward-looking statement disclaimers in CNB’s annual and quarterly
reports filed with the Securities and Exchange Commission.
The forward-looking statements are based upon
management’s beliefs and assumptions and are made as of the date of
this press release. CNB undertakes no obligation to publicly update
or revise any forward-looking statements included in this press
release or to update the reasons why actual results could differ
from those contained in such statements, whether as a result of new
information, future events or otherwise, except to the extent
required by law. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this press
release might not occur and you should not put undue reliance on
any forward-looking statements.
Financial Tables
The following tables supplement the financial
highlights described previously for CNB. All dollars are stated in
thousands, except share and per share data.
|
|
(unaudited) |
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
% change |
|
|
(unaudited)2022 |
|
|
|
2021 |
|
|
% change |
Income Statement |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
|
$ |
57,781 |
|
|
$ |
40,923 |
|
|
41.2 |
% |
|
$ |
194,149 |
|
|
$ |
157,799 |
|
|
23.0 |
% |
Processing fees on PPP loans |
|
|
19 |
|
|
|
1,920 |
|
|
(99.0)% |
|
|
1,889 |
|
|
|
8,737 |
|
|
(78.4)% |
Interest and dividends on securities and cash and cash
equivalents |
|
|
4,645 |
|
|
|
3,486 |
|
|
33.2 |
% |
|
|
17,700 |
|
|
|
13,064 |
|
|
35.5 |
% |
Interest expense |
|
|
(11,612 |
) |
|
|
(4,270 |
) |
|
171.9 |
% |
|
|
(24,079 |
) |
|
|
(19,820 |
) |
|
21.5 |
% |
Net interest income |
|
|
50,833 |
|
|
|
42,059 |
|
|
20.9 |
% |
|
|
189,659 |
|
|
|
159,780 |
|
|
18.7 |
% |
Provision for credit losses |
|
|
2,950 |
|
|
|
814 |
|
|
262.4 |
% |
|
|
8,589 |
|
|
|
6,003 |
|
|
43.1 |
% |
Net interest income after provision for credit losses |
|
|
47,883 |
|
|
|
41,245 |
|
|
16.1 |
% |
|
|
181,070 |
|
|
|
153,777 |
|
|
17.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
|
1,806 |
|
|
|
1,806 |
|
|
0.0 |
% |
|
|
7,206 |
|
|
|
6,195 |
|
|
16.3 |
% |
Other service charges and fees |
|
|
943 |
|
|
|
731 |
|
|
29.0 |
% |
|
|
3,196 |
|
|
|
2,436 |
|
|
31.2 |
% |
Wealth and asset management fees |
|
|
1,716 |
|
|
|
1,719 |
|
|
(0.2)% |
|
|
7,172 |
|
|
|
6,740 |
|
|
6.4 |
% |
Net realized gains on available-for-sale securities |
|
|
0 |
|
|
|
783 |
|
|
NM |
|
|
651 |
|
|
|
783 |
|
|
(16.9)% |
Net realized and unrealized gains (losses) on equity
securities |
|
|
284 |
|
|
|
313 |
|
|
(9.3)% |
|
|
(1,149 |
) |
|
|
790 |
|
|
(245.4)% |
Mortgage banking |
|
|
172 |
|
|
|
532 |
|
|
(67.7)% |
|
|
1,237 |
|
|
|
3,147 |
|
|
(60.7)% |
Bank owned life insurance |
|
|
655 |
|
|
|
636 |
|
|
3.0 |
% |
|
|
3,433 |
|
|
|
2,638 |
|
|
30.1 |
% |
Card processing and interchange income |
|
|
2,021 |
|
|
|
1,925 |
|
|
5.0 |
% |
|
|
7,797 |
|
|
|
7,796 |
|
|
0.0 |
% |
Other non-interest income |
|
|
1,410 |
|
|
|
479 |
|
|
194.4 |
% |
|
|
5,223 |
|
|
|
2,909 |
|
|
79.5 |
% |
Total non-interest income |
|
|
9,007 |
|
|
|
8,924 |
|
|
0.9 |
% |
|
|
34,766 |
|
|
|
33,434 |
|
|
4.0 |
% |
Non-interest expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits |
|
|
18,800 |
|
|
|
17,733 |
|
|
6.0 |
% |
|
|
71,460 |
|
|
|
61,175 |
|
|
16.8 |
% |
Net occupancy expense of premises |
|
|
3,358 |
|
|
|
3,227 |
|
|
4.1 |
% |
|
|
13,298 |
|
|
|
12,381 |
|
|
7.4 |
% |
Technology expense |
|
|
5,093 |
|
|
|
3,271 |
|
|
55.7 |
% |
|
|
17,041 |
|
|
|
11,723 |
|
|
45.4 |
% |
Advertising expense |
|
|
1,021 |
|
|
|
763 |
|
|
33.8 |
% |
|
|
2,887 |
|
|
|
2,081 |
|
|
38.7 |
% |
State and local taxes |
|
|
957 |
|
|
|
961 |
|
|
(0.4)% |
|
|
4,078 |
|
|
|
4,057 |
|
|
0.5 |
% |
Legal, professional, and examination fees |
|
|
1,141 |
|
|
|
732 |
|
|
55.9 |
% |
|
|
4,173 |
|
|
|
3,517 |
|
|
18.7 |
% |
FDIC insurance premiums |
|
|
654 |
|
|
|
689 |
|
|
(5.1)% |
|
|
2,796 |
|
|
|
2,509 |
|
|
11.4 |
% |
Card processing and interchange expenses |
|
|
1,315 |
|
|
|
1,020 |
|
|
28.9 |
% |
|
|
4,801 |
|
|
|
3,836 |
|
|
25.2 |
% |
Other non-interest expense |
|
|
4,682 |
|
|
|
4,069 |
|
|
15.1 |
% |
|
|
17,088 |
|
|
|
15,154 |
|
|
12.8 |
% |
Total non-interest expenses |
|
|
37,021 |
|
|
|
32,465 |
|
|
14.0 |
% |
|
|
137,622 |
|
|
|
116,433 |
|
|
18.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
19,869 |
|
|
|
17,704 |
|
|
12.2 |
% |
|
|
78,214 |
|
|
|
70,778 |
|
|
10.5 |
% |
Income tax expense |
|
|
3,989 |
|
|
|
3,075 |
|
|
29.7 |
% |
|
|
15,026 |
|
|
|
13,071 |
|
|
15.0 |
% |
Net income |
|
|
15,880 |
|
|
|
14,629 |
|
|
8.6 |
% |
|
|
63,188 |
|
|
|
57,707 |
|
|
9.5 |
% |
Preferred stock dividends |
|
|
1,076 |
|
|
|
1,076 |
|
|
0.0 |
% |
|
|
4,302 |
|
|
|
4,302 |
|
|
0.0 |
% |
Net income available to common shareholders |
|
$ |
14,804 |
|
|
$ |
13,553 |
|
|
9.2 |
% |
|
$ |
58,886 |
|
|
$ |
53,405 |
|
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average diluted common shares outstanding |
|
|
21,092,770 |
|
|
|
16,823,060 |
|
|
|
|
|
18,019,604 |
|
|
|
16,820,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share |
|
$ |
0.70 |
|
|
$ |
0.80 |
|
|
(12.5)% |
|
$ |
3.26 |
|
|
$ |
3.16 |
|
|
3.2 |
% |
Cash dividends per common share |
|
$ |
0.175 |
|
|
$ |
0.175 |
|
|
0.0 |
% |
|
$ |
0.700 |
|
|
$ |
0.685 |
|
|
2.2 |
% |
Dividend payout ratio |
|
|
25 |
% |
|
|
22 |
% |
|
|
|
|
21 |
% |
|
|
22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Twelve Months Ended |
|
|
|
|
December 31, |
|
|
|
December 31, |
|
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
(unaudited)2022 |
|
|
|
2021 |
|
|
|
Average Balances |
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and loans held for sale |
|
$ |
4,123,857 |
|
|
$ |
3,560,753 |
|
|
|
|
$ |
3,897,722 |
|
|
$ |
3,465,919 |
|
|
|
Investment securities |
|
|
787,259 |
|
|
|
735,926 |
|
|
|
|
|
813,172 |
|
|
|
675,124 |
|
|
|
Total earning assets |
|
|
4,959,490 |
|
|
|
4,931,292 |
|
|
|
|
|
4,954,547 |
|
|
|
4,768,040 |
|
|
|
Total assets |
|
|
5,311,790 |
|
|
|
5,240,449 |
|
|
|
|
|
5,284,213 |
|
|
|
5,058,900 |
|
|
|
Noninterest-bearing deposits |
|
|
874,131 |
|
|
|
787,865 |
|
|
|
|
|
847,793 |
|
|
|
724,839 |
|
|
|
Interest-bearing deposits |
|
|
3,714,040 |
|
|
|
3,835,434 |
|
|
|
|
|
3,796,642 |
|
|
|
3,733,327 |
|
|
|
Shareholders' equity |
|
|
505,992 |
|
|
|
440,808 |
|
|
|
|
|
455,748 |
|
|
|
431,062 |
|
|
|
Tangible common shareholders' equity (non-GAAP) (1) |
|
|
404,079 |
|
|
|
338,798 |
|
|
|
|
|
353,800 |
|
|
|
329,012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Yields (annualized) |
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and loans held for sale |
|
|
5.58 |
% |
|
|
4.80 |
% |
|
|
|
|
5.06 |
% |
|
|
4.83 |
% |
|
|
Investment securities |
|
|
1.90 |
% |
|
|
1.77 |
% |
|
|
|
|
1.85 |
% |
|
|
1.83 |
% |
|
|
Total earning assets |
|
|
4.95 |
% |
|
|
3.75 |
% |
|
|
|
|
4.30 |
% |
|
|
3.79 |
% |
|
|
Interest-bearing deposits |
|
|
1.09 |
% |
|
|
0.34 |
% |
|
|
|
|
0.52 |
% |
|
|
0.40 |
% |
|
|
Interest-bearing liabilities |
|
|
1.20 |
% |
|
|
0.43 |
% |
|
|
|
|
0.62 |
% |
|
|
0.52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios (annualized) |
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
1.19 |
% |
|
|
1.11 |
% |
|
|
|
|
1.20 |
% |
|
|
1.14 |
% |
|
|
Return on average equity |
|
|
12.45 |
% |
|
|
13.17 |
% |
|
|
|
|
13.86 |
% |
|
|
13.39 |
% |
|
|
Return on average tangible common equity (non-GAAP) (1) |
|
|
14.54 |
% |
|
|
15.87 |
% |
|
|
|
|
16.64 |
% |
|
|
16.23 |
% |
|
|
Net interest margin, fully tax equivalent basis (non-GAAP) (1) |
|
|
4.03 |
% |
|
|
3.41 |
% |
|
|
|
|
3.82 |
% |
|
|
3.38 |
% |
|
|
Efficiency Ratio, fully tax equivalent basis (non-GAAP) (1) |
|
|
61.40 |
% |
|
|
63.19 |
% |
|
|
|
|
60.87 |
% |
|
|
59.76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loan Charge-Offs |
|
|
|
|
|
|
|
|
|
|
|
|
CNB Bank net loan charge-offs |
|
$ |
437 |
|
|
$ |
142 |
|
|
|
|
$ |
694 |
|
|
$ |
1,763 |
|
|
|
Holiday Financial net loan charge-offs |
|
|
384 |
|
|
|
314 |
|
|
|
|
|
1,444 |
|
|
|
992 |
|
|
|
Total Corporation net loan charge-offs |
|
$ |
821 |
|
|
$ |
456 |
|
|
|
|
$ |
2,138 |
|
|
$ |
2,755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annualized net loan charge-offs / average total loans and loans
held for sale |
|
|
0.08 |
% |
|
|
0.05 |
% |
|
|
|
|
0.05 |
% |
|
|
0.08 |
% |
|
|
|
(unaudited) |
|
|
|
% change |
|
December 31, |
|
December 31, |
|
versus |
|
|
2022 |
|
|
|
2021 |
|
|
12/31/21 |
Ending Balance Sheet |
|
|
|
|
|
PPP loans, net of deferred processing fees |
$ |
159 |
|
|
$ |
45,203 |
|
|
(99.6)% |
Syndicated loans |
|
156,649 |
|
|
|
125,761 |
|
|
24.6 |
% |
Loans |
|
4,118,370 |
|
|
|
3,463,828 |
|
|
18.9 |
% |
Total Loans |
|
4,275,178 |
|
|
|
3,634,792 |
|
|
17.6 |
% |
Loans held for sale |
|
231 |
|
|
|
849 |
|
|
(72.8)% |
Investment securities - available for sale & equities |
|
381,024 |
|
|
|
707,557 |
|
|
(46.1)% |
Investment securities - held to maturity |
|
404,765 |
|
|
|
0 |
|
|
NM |
FHLB and other restricted stock holdings |
|
9,034 |
|
|
|
2,966 |
|
|
204.6 |
% |
Other earning assets |
|
47,401 |
|
|
|
689,758 |
|
|
(93.1)% |
Total earning assets |
|
5,117,633 |
|
|
|
5,035,922 |
|
|
1.6 |
% |
Allowance for credit losses |
|
(43,436 |
) |
|
|
(37,588 |
) |
|
15.6 |
% |
Goodwill |
|
43,749 |
|
|
|
43,749 |
|
|
0.0 |
% |
Core deposit intangible |
|
364 |
|
|
|
460 |
|
|
(20.9)% |
Other assets |
|
356,869 |
|
|
|
286,396 |
|
|
24.6 |
% |
Total assets |
$ |
5,475,179 |
|
|
$ |
5,328,939 |
|
|
2.7 |
% |
|
|
|
|
|
|
Noninterest-bearing demand deposits |
$ |
898,437 |
|
|
$ |
792,086 |
|
|
13.4 |
% |
Interest-bearing demand deposits |
|
1,007,202 |
|
|
|
1,079,336 |
|
|
(6.7)% |
Savings |
|
2,270,337 |
|
|
|
2,457,745 |
|
|
(7.6)% |
Certificates of deposit |
|
446,461 |
|
|
|
386,452 |
|
|
15.5 |
% |
Total deposits |
|
4,622,437 |
|
|
|
4,715,619 |
|
|
(2.0)% |
Short-term borrowings |
|
132,396 |
|
|
|
0 |
|
|
NA |
Subordinated debentures |
|
20,620 |
|
|
|
20,620 |
|
|
0.0 |
% |
Subordinated notes, net of issuance costs |
|
83,964 |
|
|
|
83,661 |
|
|
0.4 |
% |
Other liabilities |
|
85,000 |
|
|
|
66,192 |
|
|
28.4 |
% |
Total liabilities |
|
4,944,417 |
|
|
|
4,886,092 |
|
|
1.2 |
% |
Common stock |
|
0 |
|
|
|
0 |
|
|
NM |
Preferred stock |
|
57,785 |
|
|
|
57,785 |
|
|
0.0 |
% |
Additional paid in capital |
|
221,553 |
|
|
|
127,351 |
|
|
74.0 |
% |
Retained earnings |
|
306,911 |
|
|
|
260,582 |
|
|
17.8 |
% |
Treasury stock |
|
(2,967 |
) |
|
|
(2,477 |
) |
|
19.8 |
% |
Accumulated other comprehensive loss |
|
(52,520 |
) |
|
|
(394 |
) |
|
13,229.9 |
% |
Total shareholders' equity |
|
530,762 |
|
|
|
442,847 |
|
|
19.9 |
% |
|
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
5,475,179 |
|
|
$ |
5,328,939 |
|
|
2.7 |
% |
|
|
|
|
|
|
Ending shares outstanding |
|
21,121,346 |
|
|
|
16,855,062 |
|
|
25.3 |
% |
|
|
|
|
|
|
Book value per common share |
$ |
22.39 |
|
|
$ |
22.85 |
|
|
(2.0)% |
Tangible book value per common share(1) |
$ |
20.30 |
|
|
$ |
20.22 |
|
|
0.4 |
% |
|
|
|
|
|
|
Capital Ratios |
|
|
|
|
|
Tangible common equity / tangible assets (non-GAAP)(1) |
|
7.90 |
% |
|
|
6.45 |
% |
|
|
Tier 1 leverage ratio(3) |
|
10.80 |
% |
|
|
8.22 |
% |
|
|
Common equity tier 1 ratio(3) |
|
11.42 |
% |
|
|
9.65 |
% |
|
|
Tier 1 risk-based ratio(3) |
|
13.24 |
% |
|
|
11.79 |
% |
|
|
Total risk-based ratio(3) |
|
16.08 |
% |
|
|
14.92 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
Asset Quality |
|
|
|
|
|
Nonaccrual loans(2) |
$ |
20,986 |
|
|
$ |
19,420 |
|
|
|
Loans 90+ days past due and accruing |
|
1,121 |
|
|
|
168 |
|
|
|
Total nonperforming loans |
|
22,107 |
|
|
|
19,588 |
|
|
|
Other real estate owned |
|
1,439 |
|
|
|
707 |
|
|
|
Total nonperforming assets |
$ |
23,546 |
|
|
$ |
20,295 |
|
|
|
|
|
|
|
|
|
Loans modified in a troubled debt restructuring ("TDR"): |
|
|
|
|
|
Performing TDR loans |
$ |
6,006 |
|
|
$ |
9,006 |
|
|
|
Nonperforming TDR loans(2) |
|
6,377 |
|
|
|
7,600 |
|
|
|
Total TDR loans |
$ |
12,383 |
|
|
$ |
16,606 |
|
|
|
|
|
|
|
|
|
Nonperforming assets / Total loans + OREO |
|
0.55 |
% |
|
|
0.56 |
% |
|
|
Nonperforming assets / Total assets |
|
0.43 |
% |
|
|
0.38 |
% |
|
|
Ratio of allowance for credit losses on loans to nonaccrual
loans |
|
206.98 |
% |
|
|
193.55 |
% |
|
|
Allowance for credit losses / Total loans |
|
1.02 |
% |
|
|
1.03 |
% |
|
|
Allowance for credit losses / Total loans, net of PPP-related loans
(non-GAAP)(1) |
|
1.02 |
% |
|
|
1.05 |
% |
|
|
Financial Tables Notes: |
(1) Management uses non-GAAP financial information in its
analysis of the Corporation’s performance. Management believes that
these non-GAAP measures provide a greater understanding of ongoing
operations, enhance comparability of results of operations with
prior periods and show the effects of significant gains and charges
in the periods presented. The Corporation’s management believes
that investors may use these non-GAAP measures to analyze the
Corporation’s financial performance without the impact of unusual
items or events that may obscure trends in the Corporation’s
underlying performance. This non-GAAP data should be considered in
addition to results prepared in accordance with GAAP, and is not a
substitute for, or superior to, GAAP results. Limitations
associated with non-GAAP financial measures include the risks that
persons might disagree as to the appropriateness of items included
in these measures and that different companies might calculate
these measures differently. A reconciliation of these non-GAAP
financial measures is provided below (dollars in thousands, except
per share data). |
(2) Nonperforming TDR loans are also included in the balance of
nonaccrual loans in the previous table. |
(3) Capital ratios as of December 31, 2022 are estimated
pending final regulatory filings. |
Average Balances, Interest Rates and
Yields
The following tables present average balances of
certain measures of our financial condition and net interest margin
for the three months ended December 31, 2022 and 2021,
respectively.
|
|
Average Balances, Income and Interest Rates on a Taxable Equivalent
Basis |
|
|
For the Three Months Ended, |
|
|
December 31, 2022 (unaudited) |
|
December 31, 2021 (unaudited) |
|
|
AverageBalance |
|
AnnualRate |
|
InterestInc./Exp. |
|
AverageBalance |
|
AnnualRate |
|
InterestInc./Exp. |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable (1) (4) |
|
$ |
744,979 |
|
|
1.86 |
% |
|
$ |
3,786 |
|
$ |
689,148 |
|
|
1.70 |
% |
|
$ |
2,945 |
Tax-exempt (1) (2) (4) |
|
|
32,884 |
|
|
2.74 |
% |
|
|
250 |
|
|
38,719 |
|
|
3.14 |
% |
|
|
296 |
Equity securities (1) (2) |
|
|
9,396 |
|
|
2.24 |
% |
|
|
53 |
|
|
8,059 |
|
|
1.92 |
% |
|
|
39 |
Total securities (4) |
|
|
787,259 |
|
|
1.90 |
% |
|
|
4,089 |
|
|
735,926 |
|
|
1.77 |
% |
|
|
3,280 |
Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial (2) (3) |
|
|
1,489,416 |
|
|
5.76 |
% |
|
|
21,641 |
|
|
1,305,759 |
|
|
4.94 |
% |
|
|
16,260 |
Mortgage and loans held for sale (2) (3) |
|
|
2,515,400 |
|
|
5.22 |
% |
|
|
33,112 |
|
|
2,147,866 |
|
|
4.45 |
% |
|
|
24,096 |
Consumer (3) |
|
|
119,041 |
|
|
10.93 |
% |
|
|
3,280 |
|
|
107,128 |
|
|
10.17 |
% |
|
|
2,746 |
Total loans receivable (3) |
|
|
4,123,857 |
|
|
5.58 |
% |
|
|
58,033 |
|
|
3,560,753 |
|
|
4.80 |
% |
|
|
43,102 |
Other earning assets |
|
|
48,374 |
|
|
4.96 |
% |
|
|
605 |
|
|
634,613 |
|
|
0.17 |
% |
|
|
270 |
Total earning assets |
|
|
4,959,490 |
|
|
4.95 |
% |
|
$ |
62,727 |
|
|
4,931,292 |
|
|
3.75 |
% |
|
$ |
46,652 |
Noninterest-bearing assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
|
54,791 |
|
|
|
|
|
|
|
54,257 |
|
|
|
|
|
Premises and equipment |
|
|
96,804 |
|
|
|
|
|
|
|
82,347 |
|
|
|
|
|
Other assets |
|
|
242,585 |
|
|
|
|
|
|
|
210,157 |
|
|
|
|
|
Allowance for credit losses |
|
|
(41,880 |
) |
|
|
|
|
|
|
(37,604 |
) |
|
|
|
|
Total non interest-bearing assets |
|
|
352,300 |
|
|
|
|
|
|
|
309,157 |
|
|
|
|
|
TOTAL ASSETS |
|
$ |
5,311,790 |
|
|
|
|
|
|
$ |
5,240,449 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand—interest-bearing |
|
$ |
1,002,822 |
|
|
0.25 |
% |
|
$ |
643 |
|
$ |
1,031,385 |
|
|
0.17 |
% |
|
$ |
441 |
Savings |
|
|
2,293,534 |
|
|
1.33 |
% |
|
|
7,681 |
|
|
2,384,345 |
|
|
0.19 |
% |
|
|
1,127 |
Time |
|
|
417,684 |
|
|
1.81 |
% |
|
|
1,908 |
|
|
419,704 |
|
|
1.62 |
% |
|
|
1,709 |
Total interest-bearing deposits |
|
|
3,714,040 |
|
|
1.09 |
% |
|
|
10,232 |
|
|
3,835,434 |
|
|
0.34 |
% |
|
|
3,277 |
Short-term borrowings |
|
|
34,865 |
|
|
4.25 |
% |
|
|
369 |
|
|
0 |
|
|
0.00 |
% |
|
|
0 |
Finance lease liabilities |
|
|
394 |
|
|
5.03 |
% |
|
|
5 |
|
|
476 |
|
|
4.17 |
% |
|
|
5 |
Subordinated notes and debentures |
|
|
104,546 |
|
|
3.82 |
% |
|
|
1,006 |
|
|
112,586 |
|
|
3.48 |
% |
|
|
988 |
Total interest-bearing liabilities |
|
|
3,853,845 |
|
|
1.20 |
% |
|
$ |
11,612 |
|
|
3,948,496 |
|
|
0.43 |
% |
|
$ |
4,270 |
Demand—noninterest-bearing |
|
|
874,131 |
|
|
|
|
|
|
|
787,865 |
|
|
|
|
|
Other liabilities |
|
|
77,822 |
|
|
|
|
|
|
|
63,280 |
|
|
|
|
|
Total liabilities |
|
|
4,805,798 |
|
|
|
|
|
|
|
4,799,641 |
|
|
|
|
|
Shareholders’ equity |
|
|
505,992 |
|
|
|
|
|
|
|
440,808 |
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
5,311,790 |
|
|
|
|
|
|
$ |
5,240,449 |
|
|
|
|
|
Interest income/Earning assets |
|
|
|
4.95 |
% |
|
$ |
62,727 |
|
|
|
3.75 |
% |
|
$ |
46,652 |
Interest expense/Interest-bearing liabilities |
|
|
|
1.20 |
% |
|
|
11,612 |
|
|
|
0.43 |
% |
|
|
4,270 |
Net interest spread |
|
|
|
3.75 |
% |
|
$ |
51,115 |
|
|
|
3.32 |
% |
|
$ |
42,382 |
Interest income/Earning assets |
|
|
|
4.95 |
% |
|
|
62,727 |
|
|
|
3.75 |
% |
|
|
46,652 |
Interest expense/Earning assets |
|
|
|
0.92 |
% |
|
|
11,612 |
|
|
|
0.34 |
% |
|
|
4,270 |
Net interest margin (fully tax-equivalent) |
|
|
|
4.03 |
% |
|
$ |
51,115 |
|
|
|
3.41 |
% |
|
$ |
42,382 |
(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 three
months ended December 31, 2022 and 2021 was $282 thousand and $323
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 three months ended
December 31, 2022 and 2021 was $(66.8) million and $1.3 million,
respectively. |
The following tables present average balances of
certain measures of our financial condition and net interest margin
for the twelve months ended December 31, 2022 and 2021,
respectively.
|
|
Average Balances, Income and Interest Rates on a Taxable Equivalent
Basis |
|
|
For the Twelve Months Ended, |
|
|
December 31, 2022 (unaudited) |
|
December 31, 2021 |
|
|
AverageBalance |
|
AnnualRate |
|
InterestInc./Exp. |
|
AverageBalance |
|
AnnualRate |
|
InterestInc./Exp. |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable (1) (4) |
|
$ |
768,959 |
|
|
1.80 |
% |
|
$ |
14,560 |
|
$ |
624,330 |
|
|
1.70 |
% |
|
$ |
10,500 |
Tax-exempt (1) (2) (4) |
|
|
35,965 |
|
|
2.87 |
% |
|
|
1,080 |
|
|
42,658 |
|
|
3.43 |
% |
|
|
1,403 |
Equity securities (1) (2) |
|
|
8,248 |
|
|
2.13 |
% |
|
|
176 |
|
|
8,136 |
|
|
3.58 |
% |
|
|
291 |
Total securities (4) |
|
|
813,172 |
|
|
1.85 |
% |
|
|
15,816 |
|
|
675,124 |
|
|
1.83 |
% |
|
|
12,194 |
Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
Commercial (2) (3) |
|
|
1,429,634 |
|
|
5.08 |
% |
|
|
72,684 |
|
|
1,284,750 |
|
|
4.95 |
% |
|
|
63,642 |
Mortgage and loans held for sale (2) (3) |
|
|
2,355,662 |
|
|
4.78 |
% |
|
|
112,583 |
|
|
2,080,000 |
|
|
4.51 |
% |
|
|
93,738 |
Consumer (3) |
|
|
112,426 |
|
|
10.48 |
% |
|
|
11,778 |
|
|
101,169 |
|
|
9.98 |
% |
|
|
10,098 |
Total loans receivable (3) |
|
|
3,897,722 |
|
|
5.06 |
% |
|
|
197,045 |
|
|
3,465,919 |
|
|
4.83 |
% |
|
|
167,478 |
Other earning assets |
|
|
243,653 |
|
|
1.16 |
% |
|
|
2,112 |
|
|
626,997 |
|
|
0.14 |
% |
|
|
881 |
Total earning assets |
|
|
4,954,547 |
|
|
4.30 |
% |
|
$ |
214,973 |
|
|
4,768,040 |
|
|
3.79 |
% |
|
$ |
180,553 |
Noninterest-bearing assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
|
51,670 |
|
|
|
|
|
|
|
48,673 |
|
|
|
|
|
Premises and equipment |
|
|
89,940 |
|
|
|
|
|
|
|
79,807 |
|
|
|
|
|
Other assets |
|
|
227,991 |
|
|
|
|
|
|
|
199,107 |
|
|
|
|
|
Allowance for credit losses |
|
|
(39,935 |
) |
|
|
|
|
|
|
(36,727 |
) |
|
|
|
|
Total noninterest-bearing assets |
|
|
329,666 |
|
|
|
|
|
|
|
290,860 |
|
|
|
|
|
TOTAL ASSETS |
|
$ |
5,284,213 |
|
|
|
|
|
|
$ |
5,058,900 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Demand—interest-bearing |
|
$ |
1,061,452 |
|
|
0.20 |
% |
|
$ |
2,131 |
|
$ |
978,279 |
|
|
0.18 |
% |
|
$ |
1,783 |
Savings |
|
|
2,383,918 |
|
|
0.54 |
% |
|
|
12,772 |
|
|
2,309,560 |
|
|
0.22 |
% |
|
|
5,164 |
Time |
|
|
351,272 |
|
|
1.40 |
% |
|
|
4,930 |
|
|
445,488 |
|
|
1.82 |
% |
|
|
8,115 |
Total interest-bearing deposits |
|
|
3,796,642 |
|
|
0.52 |
% |
|
|
19,833 |
|
|
3,733,327 |
|
|
0.40 |
% |
|
|
15,062 |
Short-term borrowings |
|
|
8,793 |
|
|
4.20 |
% |
|
|
369 |
|
|
0 |
|
|
0.00 |
% |
|
|
0 |
Finance lease liabilities |
|
|
426 |
|
|
4.69 |
% |
|
|
20 |
|
|
507 |
|
|
4.54 |
% |
|
|
23 |
Subordinated notes and debentures |
|
|
104,432 |
|
|
3.69 |
% |
|
|
3,857 |
|
|
108,963 |
|
|
4.35 |
% |
|
|
4,735 |
Total interest-bearing liabilities |
|
|
3,910,293 |
|
|
0.62 |
% |
|
$ |
24,079 |
|
|
3,842,797 |
|
|
0.52 |
% |
|
$ |
19,820 |
Demand—noninterest-bearing |
|
|
847,793 |
|
|
|
|
|
|
|
724,839 |
|
|
|
|
|
Other liabilities |
|
|
70,379 |
|
|
|
|
|
|
|
60,202 |
|
|
|
|
|
Total liabilities |
|
|
4,828,465 |
|
|
|
|
|
|
|
4,627,838 |
|
|
|
|
|
Shareholders’ equity |
|
|
455,748 |
|
|
|
|
|
|
|
431,062 |
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
5,284,213 |
|
|
|
|
|
|
$ |
5,058,900 |
|
|
|
|
|
Interest income/Earning assets |
|
|
|
4.30 |
% |
|
$ |
214,973 |
|
|
|
3.79 |
% |
|
$ |
180,553 |
Interest expense/Interest-bearing liabilities |
|
|
|
0.62 |
% |
|
|
24,079 |
|
|
|
0.52 |
% |
|
|
19,820 |
Net interest spread |
|
|
|
3.68 |
% |
|
$ |
190,894 |
|
|
|
3.27 |
% |
|
$ |
160,733 |
Interest income/Earning assets |
|
|
|
4.30 |
% |
|
|
214,973 |
|
|
|
3.79 |
% |
|
|
180,553 |
Interest expense/Earning assets |
|
|
|
0.48 |
% |
|
|
24,079 |
|
|
|
0.41 |
% |
|
|
19,820 |
Net interest margin (fully tax-equivalent) |
|
|
|
3.82 |
% |
|
$ |
190,894 |
|
|
|
3.38 |
% |
|
$ |
160,733 |
(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 twelve
months ended December 31, 2022 and 2021 was $1.2 million and $953
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 twelve months ended
December 31, 2022 and 2021 was $(40.3) million and $9.9 million,
respectively. |
Non-GAAP Financial Measures
The following tables reconcile the non-GAAP
financial measures to their most directly comparable measures under
GAAP.
|
(unaudited) |
|
|
|
December 31, |
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
Calculation of tangible book value per common share and
tangible common equity / tangible assets (non-GAAP): |
|
|
|
Shareholders' equity |
$ |
530,762 |
|
|
$ |
442,847 |
|
Less: preferred equity |
|
57,785 |
|
|
|
57,785 |
|
Common shareholders' equity |
|
472,977 |
|
|
|
385,062 |
|
Less: goodwill |
|
43,749 |
|
|
|
43,749 |
|
Less: core deposit intangible |
|
364 |
|
|
|
460 |
|
Tangible common equity (non-GAAP) |
$ |
428,864 |
|
|
$ |
340,853 |
|
|
|
|
|
Total assets |
$ |
5,475,179 |
|
|
$ |
5,328,939 |
|
Less: goodwill |
|
43,749 |
|
|
|
43,749 |
|
Less: core deposit intangible |
|
364 |
|
|
|
460 |
|
Tangible assets (non-GAAP) |
$ |
5,431,066 |
|
|
$ |
5,284,730 |
|
|
|
|
|
Ending shares outstanding |
|
21,121,346 |
|
|
|
16,855,062 |
|
|
|
|
|
Book value per common share (GAAP) |
$ |
22.39 |
|
|
$ |
22.85 |
|
Tangible book value per common share (non-GAAP) |
$ |
20.30 |
|
|
$ |
20.22 |
|
|
|
|
|
Common shareholders' equity / Total assets (GAAP) |
|
8.64 |
% |
|
|
7.23 |
% |
Tangible common equity / Tangible assets (non-GAAP) |
|
7.90 |
% |
|
|
6.45 |
% |
|
(unaudited) |
|
|
|
December 31, |
|
December 31, |
|
|
2022 |
|
|
|
2021 |
|
Calculation of allowance for credit losses / total loans,
net of PPP-related loans (non-GAAP): |
|
|
|
Total allowance for credit losses |
$ |
43,436 |
|
|
$ |
37,588 |
|
|
|
|
|
Total loans |
$ |
4,275,178 |
|
|
$ |
3,634,792 |
|
Less: PPP-related loans |
|
159 |
|
|
|
45,203 |
|
Adjusted total loans, net of PPP-related loans (non-GAAP) |
$ |
4,275,019 |
|
|
$ |
3,589,589 |
|
|
|
|
|
Allowance for credit losses / total loans (GAAP) |
|
1.02 |
% |
|
|
1.03 |
% |
Adjusted allowance for credit losses / total loans, net of
PPP-related loans (non-GAAP) |
|
1.02 |
% |
|
|
1.05 |
% |
|
(unaudited) |
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
|
(unaudited) |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Calculation of net interest margin: |
|
|
|
|
|
|
|
Interest income |
$ |
62,445 |
|
|
$ |
46,329 |
|
|
$ |
213,738 |
|
|
$ |
179,600 |
|
Interest expense |
|
11,612 |
|
|
|
4,270 |
|
|
|
24,079 |
|
|
|
19,820 |
|
Net interest income |
$ |
50,833 |
|
|
$ |
42,059 |
|
|
$ |
189,659 |
|
|
$ |
159,780 |
|
|
|
|
|
|
|
|
|
Average total earning assets |
$ |
4,959,490 |
|
|
$ |
4,931,292 |
|
|
$ |
4,954,547 |
|
|
$ |
4,768,040 |
|
|
|
|
|
|
|
|
|
Net interest margin (GAAP) (annualized) |
|
4.07 |
% |
|
|
3.38 |
% |
|
|
3.83 |
% |
|
|
3.35 |
% |
|
|
|
|
|
|
|
|
Calculation of net interest margin (fully tax equivalent
basis) (non-GAAP): |
|
|
|
|
|
|
|
Interest income |
$ |
62,445 |
|
|
$ |
46,329 |
|
|
$ |
213,738 |
|
|
$ |
179,600 |
|
Tax equivalent adjustment (non-GAAP) |
|
282 |
|
|
|
323 |
|
|
|
1,235 |
|
|
|
953 |
|
Adjusted interest income (fully tax equivalent basis)
(non-GAAP) |
|
62,727 |
|
|
|
46,652 |
|
|
|
214,973 |
|
|
|
180,553 |
|
Interest expense |
|
11,612 |
|
|
|
4,270 |
|
|
|
24,079 |
|
|
|
19,820 |
|
Net interest income (fully tax equivalent basis) (non-GAAP) |
$ |
51,115 |
|
|
$ |
42,382 |
|
|
$ |
190,894 |
|
|
$ |
160,733 |
|
|
|
|
|
|
|
|
|
Average total earning assets |
$ |
4,959,490 |
|
|
$ |
4,931,292 |
|
|
$ |
4,954,547 |
|
|
$ |
4,768,040 |
|
Less: average mark to market adjustment on investments
(non-GAAP) |
|
(66,781 |
) |
|
|
1,297 |
|
|
|
(40,271 |
) |
|
|
9,879 |
|
Adjusted average total earning assets, net of mark to market
(non-GAAP) |
$ |
5,026,271 |
|
|
$ |
4,929,995 |
|
|
$ |
4,994,818 |
|
|
$ |
4,758,161 |
|
|
|
|
|
|
|
|
|
Net interest margin, fully tax equivalent basis (non-GAAP)
(annualized) |
|
4.03 |
% |
|
|
3.41 |
% |
|
|
3.82 |
% |
|
|
3.38 |
% |
|
(unaudited) |
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
|
(unaudited) |
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Calculation of PPNR (non-GAAP):
(1) |
|
|
|
|
|
|
|
Net interest income |
$ |
50,833 |
|
$ |
42,059 |
|
$ |
189,659 |
|
$ |
159,780 |
Add: Non-interest income |
|
9,007 |
|
|
8,924 |
|
|
34,766 |
|
|
33,434 |
Less: Non-interest expense |
|
37,021 |
|
|
32,465 |
|
|
137,622 |
|
|
116,433 |
PPNR (non-GAAP) |
$ |
22,819 |
|
$ |
18,518 |
|
$ |
86,803 |
|
$ |
76,781 |
(1)
Management believes that this is an important metric as it
illustrates the underlying performance of the Corporation, it
enables investors and others to assess the Corporation's ability to
generate capital to cover credit losses through the credit cycle
and provides consistent reporting with a key metric used by bank
regulatory agencies. |
|
(unaudited) |
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
|
(unaudited) |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Calculation of efficiency ratio: |
|
|
|
|
|
|
|
Non-interest expense |
$ |
37,021 |
|
|
$ |
32,465 |
|
|
$ |
137,622 |
|
|
$ |
116,433 |
|
|
|
|
|
|
|
|
|
Non-interest income |
$ |
9,007 |
|
|
$ |
8,924 |
|
|
$ |
34,766 |
|
|
$ |
33,434 |
|
Net interest income |
|
50,833 |
|
|
|
42,059 |
|
|
|
189,659 |
|
|
|
159,780 |
|
Total revenue |
$ |
59,840 |
|
|
$ |
50,983 |
|
|
$ |
224,425 |
|
|
$ |
193,214 |
|
Efficiency ratio |
|
61.87 |
% |
|
|
63.68 |
% |
|
|
61.32 |
% |
|
|
60.26 |
% |
|
|
|
|
|
|
|
|
Calculation of efficiency ratio (fully tax equivalent
basis) (non-GAAP): |
|
|
|
|
|
|
|
Non-interest expense |
$ |
37,021 |
|
|
$ |
32,465 |
|
|
$ |
137,622 |
|
|
$ |
116,433 |
|
Less: core deposit intangible amortization |
|
23 |
|
|
|
25 |
|
|
|
96 |
|
|
|
107 |
|
Adjusted non-interest expense (non-GAAP) |
$ |
36,998 |
|
|
$ |
32,440 |
|
|
$ |
137,526 |
|
|
$ |
116,326 |
|
|
|
|
|
|
|
|
|
Non-interest income |
$ |
9,007 |
|
|
$ |
8,924 |
|
|
$ |
34,766 |
|
|
$ |
33,434 |
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
50,833 |
|
|
$ |
42,059 |
|
|
$ |
189,659 |
|
|
$ |
159,780 |
|
Less: tax exempt investment and loan income, net of TEFRA
(non-GAAP) |
|
1,244 |
|
|
|
1,263 |
|
|
|
5,011 |
|
|
|
4,973 |
|
Add: tax exempt investment and loan income (fully tax equivalent
basis) (non-GAAP) |
|
1,658 |
|
|
|
1,620 |
|
|
|
6,509 |
|
|
|
6,416 |
|
Adjusted net interest income (fully tax equivalent basis)
(non-GAAP) |
|
51,247 |
|
|
|
42,416 |
|
|
|
191,157 |
|
|
|
161,223 |
|
Adjusted net revenue (fully tax equivalent basis) (non-GAAP) |
$ |
60,254 |
|
|
$ |
51,340 |
|
|
$ |
225,923 |
|
|
$ |
194,657 |
|
|
|
|
|
|
|
|
|
Efficiency ratio (fully tax equivalent basis) (non-GAAP) |
|
61.40 |
% |
|
|
63.19 |
% |
|
|
60.87 |
% |
|
|
59.76 |
% |
|
(unaudited) |
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
|
(unaudited) |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Calculation of return on average tangible common equity
(non-GAAP): |
|
|
|
|
|
|
|
Net income |
$ |
15,880 |
|
|
$ |
14,629 |
|
|
$ |
63,188 |
|
|
$ |
57,707 |
|
Less: preferred stock dividends |
|
1,076 |
|
|
|
1,076 |
|
|
|
4,302 |
|
|
|
4,302 |
|
Net income available to common shareholders |
$ |
14,804 |
|
|
$ |
13,553 |
|
|
$ |
58,886 |
|
|
$ |
53,405 |
|
|
|
|
|
|
|
|
|
Average shareholders' equity |
$ |
505,992 |
|
|
$ |
440,808 |
|
|
$ |
455,748 |
|
|
$ |
431,062 |
|
Less: average goodwill & intangibles |
|
44,128 |
|
|
|
44,225 |
|
|
|
44,163 |
|
|
|
44,265 |
|
Less: average preferred equity |
|
57,785 |
|
|
|
57,785 |
|
|
|
57,785 |
|
|
|
57,785 |
|
Tangible common shareholders' equity (non-GAAP) |
$ |
404,079 |
|
|
$ |
338,798 |
|
|
$ |
353,800 |
|
|
$ |
329,012 |
|
|
|
|
|
|
|
|
|
Return on average equity (GAAP) (annualized) |
|
12.45 |
% |
|
|
13.17 |
% |
|
|
13.86 |
% |
|
|
13.39 |
% |
Return on average common equity (GAAP) (annualized) |
|
11.61 |
% |
|
|
12.20 |
% |
|
|
12.92 |
% |
|
|
12.39 |
% |
Return on average tangible common equity (non-GAAP)
(annualized) |
|
14.54 |
% |
|
|
15.87 |
% |
|
|
16.64 |
% |
|
|
16.23 |
% |
|
(unaudited) |
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
|
(unaudited) |
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
Calculation of non-interest income excluding net realized
gains on available-for-sale securities (non-GAAP): |
|
|
|
|
|
|
|
Non-interest income |
$ |
9,007 |
|
$ |
8,924 |
|
$ |
34,766 |
|
$ |
33,434 |
Less: net realized gains on available-for-sale securities |
|
0 |
|
|
783 |
|
|
651 |
|
|
783 |
Adjusted non-interest income (non-GAAP) |
$ |
9,007 |
|
$ |
8,141 |
|
$ |
34,115 |
|
$ |
32,651 |
Contact: Tito L. Lima
Treasurer
(814) 765-9621
CNB Financial (NASDAQ:CCNE)
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CNB Financial (NASDAQ:CCNE)
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