Cnb Financial Corporation · NASDAQ:CCNE
Cnb Financial — Investor Presentation (November 2021)
41 slides from Cnb Financial's investor presentation, Nov 10, 2021
Slide 1: Discussion Materials Investor Presentation November 2021
Exhibit 99.1 DISCUSSIONMATERIALS INVESTOR PRESENTATION NOVEMBER 2021
Slide 2: Caution Regarding Forward Looking Statements
CERTAIN IMPORTANT INFORMATION CAUTION REGARDING FORWARD LOOKING STATEMENTS This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act with respect to CNB’s financial condition, liquidity, results of operations, fu
Slide 3: Corporate Overview
CORPORATE OVERVIEW
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS A PREMIER FRANCHISE DIVERSIFIED MARKETS ATTRACTIVE BUSINESS MIX ▪ Meaningful scale in key growth ▪ Diversified loan portfolio with high ▪ #1 market share and community bank in markets, including Buffalo, NY, growth in Cleveland and Buffalo Clearfield County since 1865 Columbus,
Slide 5: CNB Financial Corporation
CNB FINANCIAL CORPORATION GREATER ▪ Holding Company for CNB Bank (Clearfield, BUFFALO, NY PA), serving the community since 1865 BANKONBUFFALO ▪ 44 full-service offices, 1 drive-through ERIEBANK location and 2 loan production office across Pennsylvania, New York, Ohio and Virginia ERIE, PA ▪ CNB Bank
Slide 6: Unique Multi-State, Multi-Brand Model
UNIQUE MULTI-STATE, MULTI-BRAND MODEL ▪ 18 full-service offices▪ Opened August 2005▪ Opened in 2013 with the acquisition of FC Banc Corp. in Bucyrus, OH ▪ Western and Central PA focus▪ 10 full-service offices serving Erie, Crawford, & Warren counties in PA, ▪ Focus on the greater-Columbus metro ▪ Le
Slide 7: Experienced Leadership
EXPERIENCED LEADERSHIP TOP EXECUTIVES BOARD OF DIRECTORS ▪ Attorney specializing in commercial transactions, real PETER F. SMITH estate, mineral law, estate planning and related ▪ CEO of CNB Financial Corporation since January 1, 2010 Independent Chairman of litigation the Board of Directors ▪ Has b
Slide 8: Growth Milestones
GROWTH MILESTONES Joseph Bower Preferred Equity becomes CEO Capital Raise of $58M CNB Financial County Corporation Common th National Bank holding Equity Capital 150 Acquisition of Clearfield company Raise of Anniversary of established organized $34.5M Celebration Bank of Akron 1865 1934 1984 2005 2
Slide 9: A Bank of Choice in Legacy CNB Bank Markets
A BANK OF CHOICE IN LEGACY CNB BANK MARKETS (1) LEADING COMMUNITY BANK MARKET SHARE (1) Combined CNB Bank Franchise County Footprint (2) 2021 2021 Total Deposits Market Institution (ST) Rank Branches ($000) Share (%) ▪ 18 full-service offices operate as CNB Bank 1 S&T Bancorp Inc. (PA) 20 2,494,249
Slide 10: Key Growth Markets
KEY GROWTH MARKETS BUFFALO, NY CLEVELAND, OH ROANOKE, VA nd nd ▪ 2 largest city in New York state▪ Cleveland is the 2 largest city in the ▪ Largest city and metropolitan statistical state of Ohio area in Southwest Virginia with a total ▪ New economic development is population in the Roanoke, VA MSA
Slide 11: Growth: Focus on Buffalo
GROWTH: FOCUS ON BUFFALO LEADING DEPOSIT MARKET SHARE Buffalo-Cheektowaga, NY 2021 2021 Total Deposits Market ▪ BankOnBuffalo established as a division of CNB since Institution (ST) Rank Branches ($000) Share (%) 2016 1 M&T Bank Corp. (NY) 51 44,329,460 63.0 2 KeyCorp (OH) 56 10,099,024 14.4 3 HSBC
Slide 12: Growth: Cleveland Market
GROWTH: CLEVELAND MARKET FASTEST GROWING DEPOSIT MARKET SHARE 30% 18% 16% ▪ Expanded into the NE Ohio market through the 14% acquisition of Lake National Bank in (closed in July 12% 2016) 11% 10% ▪ In January 2020, expanded from suburban 9% Cleveland into metropolitan Cleveland through the 9% establ
Slide 13: Business Highlights
BUSINESS HIGHLIGHTS
Slide 14: Loan Portfolio Composition
LOAN PORTFOLIO COMPOSITION 9/30/21 LOAN PORTFOLIO COMPOSITION OBSERVATIONS ▪ MRQ loan yield of 4.82% compared to 4.76% in Q3 2020. ▪ Loan growth driven primarily by increases in C&I loans and CRE loans primarily from our Cleveland, Buffalo and Roanoke regions ▪ Excluding $85 million of net PPP loans
Slide 15: Additional Loan Detail – Commercial Mortgages
ADDITIONAL LOAN DETAIL – COMMERCIAL MORTGAGES ▪ Total commercial mortgage loans of $1.1 billion (32.5% of total loans) as of September 30, 2021 ▪ Diversified by property type – highest concentrations are Apartments and Accommodation and Food Services, 26% and 20% of commercial mortgages, respectivel
Slide 16: Additional Detail – Hospitality / Hotels
(1) ADDITIONAL DETAIL – HOSPITALITY / HOTELS HOSPITALITY LOANS BY CATEGORY (9/30/21) HOSPITALITY/HOTELS LOAN PORTFOLIO ▪ Franchise hotels comprise 98.6% of total hotel portfolio as of 9/30/21 ▪ Resort or destination related hospitality sites comprise approximately 1% of the total hotel portfolio as
Slide 17: Healthcare Loan Portfolio
(1) HEALTHCARE LOAN PORTFOLIO HEALTHCARE LOANS BY CATEGORY (9/30/21) HEALTHCARE LOAN PORTFOLIO ▪ Total healthcare portfolio comprises approximately (1) 4.6% of total loan portfolio as of 9/30/21 ▪ Well diversified portfolio ▪ Full recourse from owners/partners at origination $159M ▪ Hard cash/land i
Slide 18: COVID-19 Loan Modifications
COVID-19 LOAN MODIFICATIONS (1) COVID-19 MODIFICATIONS BY INDUSTRY OBSERVATIONS ▪ Total modified loans of $24.0 million comprise 0.7% of the total loan portfolio outstanding as of September 30, 2021 ▪ Starting point in Q2 2020 was $626 million, or 20.7% of total loans. ▪ Modifications are 99.6% Prin
Slide 19: Conservative Credit Culture
CONSERVATIVE CREDIT CULTURE SEPTEMBER 30, 2021 NONACCRUAL LOANS BY TYPE HISTORICAL NPAs/ASSETS & NCOs/LOANS HISTORICAL ASSET QUALITY 12/31/2017 12/31/2018 12/31/2019 12/31/2020 9/30/2021 NONACCRUAL LOANS $15,653 $14,262 $21,736 $30,359 $20,004 ACCRUAL LOANS GREATER THAN 89 DAYS 616 887 61 325 724 OR
Slide 20: Additional Credit Quality Detail
ADDITIONAL CREDIT QUALITY DETAIL COMMERCIAL LOANS BY RISK RATING (9/30/21) Special $ in Thousands Pass Mention Substandard Doubtful Total Pass % Commercial, Industrial and Agricultural $1,218,646 $16,812 $24,471 $1,423 $1,261,352 96.6% Commercial Mortgages 1,100,878 11,929 27,312 0 1,140,119 96.6% T
Slide 21: SBA PPP Loans
SBA PPP LOANS SBA PAYCHECK PROTECTION PROGRAM (PPP) (AS OF SEPTEMBER 30, 2021) ▪ PPP Round 1 has $522 thousand loan outstandings as of September 30, 2021, with $8 thousand in deferred processing fees ▪ Initial PPP Round 1 as of June 30, 2020, had $226 million loan outstandings with $8.8 million in d
Slide 22: Deposit Mix
DEPOSIT MIX 9/30/21 DEPOSIT MIX AVERAGE DEPOSITS PER BRANCH $120,000 $104,401 $95,040 $100,000 $73,872 $80,000 $62,172 $52,884 $60,000 $40,000 $20,000 $0 2017 2018 2019 2020 2021YTD HIGHLIGHTS Deposit Composition ▪ $104 million average deposits per branch as of ($000) 2017Y 2018Y 2019Y 2020Y 2021Q3
Slide 23: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 24: 3rd Quarter 2021 Highlights
3RD QUARTER 2021 HIGHLIGHTS FINANCIAL HIGHLIGHTS OBSERVATIONS ▪ Net income of $14.9 million ▪ Q3 2021 represented one of the highest levels of EPS in the Corporation’s history ▪ Diluted earnings per common share of $0.82 ▪ Participated in the second round of SBA PPP totaling ▪ MRQ Return on average
Slide 25: Financial Trends
FINANCIAL TRENDS TOTAL ASSETS ($M) TOTAL GROSS LOANS ($M) (1) TOTAL DEPOSITS ($M) NET INCOME & ADJ. NET INCOME ($M) (1) Adjusted Net income is a non-GAAP financial measure; see appendix for reconciliation Note: YTD data as of September 30, 2021 and “LTM” means for the unaudited 12 month period ended
Slide 26: Earnings Power
EARNINGS POWER (1) ROAA AND ADJUSTED ROAA RECENT PROFITABILITY TRENDS ▪ MRQ reflected increased growth in loans, deposits and households ▪ Wealth & Asset business continues to grow at a strong pace: ▪ Assets Under Management $1.2 billion at September 30, 2021, reflecting an increase of 8.2%, or 11.0
Slide 27: Net Interest Margin & Pre-Provision Net Revenue
NET INTEREST MARGIN & PRE-PROVISION NET REVENUE (1) (2) NIM & ADJUSTED NIM (1)(3) PPNR AND ADJUSTED PPNR ($000) ($M) (1) Net interest margin and pre-tax pre-provision are non-GAAP financial measures; see appendix for reconciliation (2) Excludes PPP-related income (fees and interest income) and PPP-r
Slide 28: Allowance for Credit Losses (ACL)
ALLOWANCE FOR CREDIT LOSSES (ACL) ALLOWANCE FOR CREDIT LOSSES TRENDS OBSERVATIONS ▪ The company adopted the current expected credit loss (“CECL”) methodology in Q4 2020 effective January 1, 2020 ▪ First nine months of 2021 the allowance for credit losses reflects a reserve build of $0.17 per diluted
Slide 29: Capital Ratios
CAPITAL RATIOS CNB FINANCIAL CORPORATION – CAPITAL RATIOS 16.8% 16.8% 14.6% 14.3% 8.3% 8.2% 8.1% 8.1% 7.8% 7.8% 7.7% 7.6% TCE/TA - Adjusted for PPP & Excess Fed Tier 1 Leverage Ratio Total Risk Based Liquidity Q4 2020 Q1 2021 Q2 2021 Q3 2021 ▪ All capital ratios have significant excess to well-capit
Slide 30: Dividend History
DIVIDEND HISTORY HISTORICAL DIVIDEND PER COMMON SHARE ▪ Dividend yield of 2.79% as of September 30, 2021 (1) ▪ LTM ending September 30, 2021 dividend payout ratio of 21.9% ▪ The Corporation’s long, uninterrupted history of dividends to its common shareholders reflects a key component of its Total Sh
Slide 31: Interest Rate Sensitivity
INTEREST RATE SENSITIVITY ▪ Base case assumes composition of interest sensitive assets and liabilities remain static as of 9/30/2021 ▪ Assumes rate shocks are instantaneous and sustained parallel rate shifts, or reflected uniformly across the yield curve regardless of duration to maturity or reprici
Slide 32: Appendix: Mergers & Acquisitions
APPENDIX MERGERS & ACQUISITIONS
Slide 33: Recent Acquisitive Success
RECENT ACQUISITIVE SUCCESS (1) (2) (3) FC BANC CORP. LAKE NATIONAL BANK BANK OF AKRON ACQUISITION DATE 10/11/2013 7/15/2016 7/17/2020 ASSETS ($000) $364,163 $156,575 $471,221 LOANS ($000) $250,885 $122,367 $329,001 DEPOSITS ($000) $326,963 $139,712 $425,696 LTM ROAA (%) 0.98% 0.53% 0.81% LTM ROAE (%
Slide 34: Overview: Acquisition of Bank of Akron
OVERVIEW: ACQUISITION OF BANK OF AKRON KEY TRANSACTION METRICS TRANSACTION RATIONALE At Completion June 30, 2020 MRQ at Completion Target Financials Completion Date: July 17, 2020 Assets ($000): $471,221 Purchase Price ($M): $40.8 Loans ($000): 329,001 Deposits ($000): 425,696 Price / Tangible Book
Slide 35: Appendix: Other Relevant Information
APPENDIX OTHER RELEVANT INFORMATION
Slide 36: KBRA Ratings Summary
KBRA RATINGS SUMMARY KBRA - RATINGS SUMMARY Ratings last affirmed July 22, 2021 CNB FINANCIAL CORP Senior Unsecured Debt BBB Subordinated Debt BBB- Short-Term Debt K3 CNB BANK Senior Unsecured Debt BBB+ Subordinated Debt BBB Short-Term Deposit K2 Short-Term Debt K2 OUTLOOK Stable 36 Source: Press Re
Slide 37: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION This presentation contains references to financial measures that are not defined in GAAP. 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 ongoi
Slide 38: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION As of or for the year ending December 31, Year-to-Date Dollars in thousands, except per share data 2017 2018 2019 2020 9/30/2021 Average Common Equity $239,223 $250,496 $285,324 $337,963 $370,134 LESS: Average Intangibles 40,984 3 9,877 3 9,145 4 1,821 44,278 Average Tangible
Slide 39: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Dollars in thousands, except per share data 12/31/2019 3/31/2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 9/30/2021 Interest Income (fully tax equivalent basis) (non-GAAP) $40,970 $40,425 $38,435 $42,692 $46,977 $44,619 $43,836 $45,745 LESS: Interest Expense (fully
Slide 40: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION As of or for the quarter ending, Dollars in thousands, except per share data 9/30/2020 12/31/2020 3/31/2021 6/30/2021 9/30/2021 Net Interest Income $34,664 $40,115 $39,121 $38,305 $40,295 ADD: Non-interest income 6 ,778 7 ,968 8,239 7,857 8,414 Less: Non-interest expense 28,3
Slide 41: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION As of or for the year ending December 31, Year-to-Date Dollars in thousands, except per share data 2017 2018 2019 2020 9/30/2021 Allowance for Loan Losses $19,693 $19,704 $19,473 $34,340 $37,230 A Total Loans, net of Unearned Income $2,145,959 $2,474,557 $2,804,035 $3,371,789
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