Cnb Financial Corporation · NASDAQ:CCNE
Cnb Financial — IPO Roadshow (September 2022)
42 slides from Cnb Financial's IPO roadshow presentation, Sep 15, 2022
Slide 1: Investor Presentation September 2022
Issuer Free Writing Prospectus Filed Pursuant to Rule 433 Registration Statement No. 333-236018 September 15, 2022 DISCUSSIONMATERIALS INVESTOR PRESENTATION SEPTEMBER 2022
Slide 2: Certain Important Information
CERTAIN IMPORTANT INFORMATION This presentation has been prepared by CNB Financial Corporation (the “Company” or “CNB”) solely for information purposes based on its own information, as well as information from public sources. This presentation is a summary only and has been prepared to assist intere
Slide 3: 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 of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to CNB’s fina
Slide 4: Offering Summary
OFFERING SUMMARY Company CNB Financial Corporation Exchange | Ticker Nasdaq | CCNE Security Common Stock Offering Type Follow-on Public Offering (100% Primary Shares) Base Deal Size $87 Million Overallotment Option Up to 15% (100% Primary Shares) Lock-up Period 90 days for Directors & Executive Offi
Slide 5: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM TOP EXECUTIVES § Chief Executive Officer of CNB Financial Corporation since January 1, 2010§ Served as Senior Executive Vice President & Chief Experience Officer of CNB Bank since 2021 § Has been with the Company since 1997 – previously served as Chief Executive Officer,
Slide 6: Experienced Management Team
EXPERIENCED MANAGEMENT TEAM TOP EXECUTIVES § Currently serves as the Regional President of ERIEBANK and is § Has over 27 years of experience in wealth management and private responsible for the expansion of the Bank into the Cleveland market, banking as well as lead the growth efforts of the Northea
Slide 7: Corporate Overview
CORPORATE OVERVIEW
Slide 8: Investment Highlights
INVESTMENT HIGHLIGHTS A PREMIER FRANCHISE DIVERSIFIED MARKETS ATTRACTIVE BUSINESS MIX § Deep rooted community bank § Meaningful scale in key growth § Diversified and balanced loan established in 1865 markets, including Buffalo, NY, portfolio consisting of 56% of Columbus, OH, Cleveland, OH and outst
Slide 9: Compelling Investment Opportunity
COMPELLING INVESTMENT OPPORTUNITY (2) (1) EARNINGS PER COMMON SHARE RETURN ON AVERAGE TANGIBLE COMMON EQUITY $3.50 $3.16 20.00% ROATCE $3.00 $2.63 ROAE 18.00% $2.50 $2.21 $1.97 $2.00 $1.69 16.00% $1.60 $1.57 $1.54 $1.42 $1.50 $1.29 14.00% $1.00 $0.50 12.00% $- 2013 2014 2015 2016 2017 2018 2019 2020
Slide 10: Total Asset Growth and Key Capital Activities
TOTAL ASSET GROWTH AND KEY CAPITAL ACTIVITIES $6.0 $5.3 $5.3 $5.0 $4.7 $4.0 $3.8 $3.2 $3.0 $2.8 $2.6 $2.3 $2.2 $2.1 $2.0 $1.8 $1.6 $1.4 $1.2 $1.0 $0.9 $1.0 $0.8 $0.8 $0.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 YTD At-The-Market Capital $85M Sub- Rai
Slide 11: Pro Forma Consolidated Capital Position
PRO FORMA CONSOLIDATED CAPITAL POSITION PRO FORMA CONSOLIDATED PRO FORMA CONSOLIDATED CAPITALIZATION CAPITAL RATIOS TABLE (Dollars in millions, except per share amounts) As of June 30, 2022 Pro Forma 16.03% With 1 2 Actual Pro Forma Overallotment 14.23% Long-Term Debt 13.10% Subordinated Debt $ 83.8
Slide 12: CNB Financial Corporation
CNB FINANCIAL CORPORATION GREATER § Holding Company for CNB Bank (Clearfield, BUFFALO, NY PA), serving the community since 1865 BANKONBUFFALO § 46 full-service offices, 1 drive-through ERIEBANK location and 3 loan production office across Pennsylvania, New York, Ohio and Virginia ERIE, PA NY § CNB B
Slide 13: Unique Multi-State, Multi-Brand Model
UNIQUE MULTI-STATE, MULTI-BRAND MODEL § Legacy bank of the organization founded § Opened August 2005§ Opened in 2013 with the acquisition of FC in 1865 Banc Corp. in Bucyrus, OH § Comprised of two premium franchises § Focus on the greater-Columbus metro § 18 full-service offices serving Clearfield,
Slide 14: Board Leadership
BOARD LEADERSHIP (1) CNB BOARD OF DIRECTORS § Attorney specializing in commercial transactions, real estate, mineral law and estate planning PETER F. SMITH Independent Chairman of the Board of Directors § Independent Chairman since January 1, 2017 § See biographical information on management team pa
Slide 15: Demonstrated Commitment to Diversity, Equity and Inclusion
DEMONSTRATED COMMITMENT TO DIVERSITY, EQUITY AND INCLUSION Established an Inclusion and Diversity Committee in 2018 comprised of underrepresented minorities, females, and those who identify as LGBTQ+ • Encourage an inclusive and engaged workforce culture through communications and training • Demonst
Slide 16: Franchise Milestones
FRANCHISE MILESTONES Preferred Joseph Equity Bower Capital becomes Raise of CEO $60.4M CNB County Financial Common Michael National Corporation Equity Acquisition Peduzzi th Bank of holding Capital 150 of becomes Clearfield company Raise of Anniversary Bank of CNB Bank established organized $34.5M C
Slide 17: Technology Evolution
TECHNOLOGY EVOLUTION Agility, Scalability and Security Application Programming Interface (API) and Mobile Features 17
Slide 18: Legacy and New Markets
(1) LEGACY AND NEW MARKETS (2) LEGACY VS. NEW – LOAN PORTFOLIO JUNE ‘21 TO JUNE ‘22 – LOAN GROWTH 15.1% Growth Rate (2) LEGACY VS. NEW – DEPOSITS JUNE ‘21 TO JUNE ‘22 – DEPOSIT GROWTH 4.4% Growth Rate (1) New markets include BankOnBuffalo, ERIEBANK – Northeast Ohio, FCBank and Southwest Virginia; Le
Slide 19: Loans to Deposits
LOANS TO DEPOSITS (1) (1) AS OF 12/31/19 AS OF 6/30/22 $4,702 $3,910 $3,102 $2,804 LOANS DEPOSITS LOANS DEPOSITS As of December 31, As of ($000) 2019 2020 2021 6/30/2022 2019 – 2Q’22 CAGR Total Loans $2,804,035 $3,371,789 $3,634,792 $3,909,753 +14% Total Deposits $3,102,327 $4,181,744 $4,715,619 $4,
Slide 20: New Growth Markets – Loan and Deposit Detail
NEW GROWTH MARKETS – LOAN AND DEPOSIT (1) DETAIL COMMERCIAL & PRIVATE BANKING – COMMERCIAL & PRIVATE BANKING – (2) (2) LOANS – 6/30/22 DEPOSITS – 6/30/22 PRIVATE BANKING 8.9% ALL OTHER 48.8% PRIVATE BANKING ALL OTHER 13.4% 14.3% COMMERCIAL 76.8% COMMERCIAL 37.9% § Loan portfolio is based on historic
Slide 21: Business Highlights
BUSINESS HIGHLIGHTS
Slide 22: Interest Rate Sensitivity
INTEREST RATE SENSITIVITY § Base case assumes composition of interest sensitive assets and liabilities remain static as of June 30, 2022 § Assumes rate shocks are instantaneous and sustained parallel rate shifts, or reflected uniformly across the yield curve regardless of duration to maturity or rep
Slide 23: Loan Portfolio Composition
LOAN PORTFOLIO COMPOSITION 6/30/22 LOAN PORTFOLIO COMPOSITION OBSERVATIONS § Loan growth driven primarily by increases in C&I loans and CRE loans primarily from our Cleveland, Buffalo and Southwest Virginia regions § Excluding net PPP loans and syndicated loans, loans grew $493 million, or 15.1%, fr
Slide 24: Additional Loan Portfolio Detail
ADDITIONAL LOAN PORTFOLIO DETAIL § Well diversified and granular C&I portfolio with no single industry greater than 14% of total C&I portfolio § CNB has proven C&I underwriting practices and strong loan loss history § CRE portfolio is also well diversified and granular with no single segment greater
Slide 25: Conservative Credit Culture
CONSERVATIVE CREDIT CULTURE 6/30/22 NONACCRUAL LOANS BY TYPE HISTORICAL NPAs/ASSETS & NCOs/LOANS 1.00% 0.80% 0.67% COMMERCIAL 0.62% REAL ESTATE 0.60% COMMERCIAL 26% 0.48% & INDUSTRIAL 0.39% 0.38% 45% 0.40% 0.26% 0.24% 0.21% 0.20% RESIDENTIAL 0.08% MORTGAGE 0.18% 0.05% 0.17% 0.17% 25% 0.05% 0.02% 0.0
Slide 26: Additional Credit Quality Detail
ADDITIONAL CREDIT QUALITY DETAIL COMMERCIAL LOANS BY RISK RATING (6/30/22) Special $ in Thousands Pass Mention Substandard Doubtful Total Pass % Commercial, Industrial and Agricultural $1,378,106 $14,410 $20,225 $1,356 $1,414,097 97.5% Commercial Mortgages 1,256,044 8,288 24,208 0 1,288,540 97.5% To
Slide 27: Deposit Mix
DEPOSIT MIX AVERAGE COST OF INTEREST-BEARING 6/30/22 DEPOSIT MIX DEPOSITS 1.40% 1.26% 1.20% 1.00% 0.84% 0.77% 0.80% 0.60% 0.40% 0.40% 0.28% 0.26% 0.20% 0.00% 2018Y 2019Y 2020Y 2021Y 1Q'22 2Q'22 HIGHLIGHTS § Time deposits represented less than Deposit Composition 10% of total deposits as of June 30,
Slide 28: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 29: Q2 2022 vs 2021 Highlights
Q2 2022 VS 2021 HIGHLIGHTS (1) TOTAL LOANS (EX. PPP) ($M) TOTAL DEPOSITS ($M) YoY Growth = 4.4% YoY Growth = 17.3% $6,000 $5,000 $4,702 $5,000 $4,505 $3,907 $4,000 $3,330 $4,000 $3,000 $3,000 $2,000 $2,000 $1,000 $1,000 $0 $0 Q2 2021 Q2 2022 Q2 2021 Q2 2022 (2) NET INCOME AVAILABLE TO COMMON EARNING
Slide 30: Q2 2022 vs 2021 Highlights
Q2 2022 VS 2021 HIGHLIGHTS (1) RETURN ON AVERAGE ASSETS NET INTEREST MARGIN 1.20% 4.00% 3.74% 3.73% 1.17% 3.60% 1.15% 3.28% 3.25% 1.12% 3.20% 1.10% NIM (FTE) NIM 2.80% NIM (FTE) NIM 1.05% 2.40% 1.00% 2.00% Q2 2021 Q2 2022 Q2 2021 Q2 2022 (1) RETURN ON AVERAGE EQUITY EFFICIENCY RATIO 15.00% 65.0% 14.
Slide 31: Change in Net Interest Margin
CHANGE IN NET INTEREST MARGIN Q2 2021 VS Q2 2022 + + + + DEPOSIT GROWTH AND JUNE 30, PPP SUBORDINATED EXCESS JUNE 30, RATE INTEREST RATE 2021 FEES DEBT REFINANCE LIQUIDITY 2022 REDUCTIONS INCREASE § Net interest margin expansion of 45 basis points is primarily the result of deposit rate management c
Slide 32: Financial Trends
FINANCIAL TRENDS TOTAL ASSETS ($M) TOTAL GROSS LOANS ($M) CAGR = 14.0% CAGR = 15.3% (1) TOTAL DEPOSITS ($M) EARNINGS PER COMMON SHARE CAGR = 12.2% CAGR = 18.3% (1) Earnings per share includes merger costs in 2019 and merger costs, FHLB prepayment penalties and branch closure costs in 2020 32 Note: Y
Slide 33: Earnings Power
EARNINGS POWER (1) (2) RETURN ON AVERAGE ASSETS NET INTEREST MARGIN (FTE) (1) (1)(2) RETURN ON AVERAGE EQUITY EFFICIENCY RATIO (1) Return on average assets, return on average equity, and efficiency ratio includes merger costs in 2019 and merger costs, FHLB prepayment penalties and branch closure cos
Slide 34: Wealth & Asset Management Financial Trends
WEALTH & ASSET MANAGEMENT FINANCIAL TRENDS ASSETS UNDER MANAGEMENT (“AUM”) ($M) & NET REVENUE MARGIN (%) $1,400 60.0% AUM CAGR = 10.1% 52.0% $1,200 40.3% 46.7% 50.0% 1,273 38.7% 1,146 1,138 41.3% 1,070 $1,000 40.0% 35.8% $800 791 30.0% 742 $600 20.0% $400 10.0% $200 $0 0.0% 2017 2018 2019 2020 2021
Slide 35: 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 § ACL to Total Loans was 1.04% at June 30, 2022, compared to 1.03% and 1.02%, at December 31, 2021 and De
Slide 36: Dividend History
DIVIDEND HISTORY HISTORICAL DIVIDEND PER COMMON SHARE $0.800 $0.700 $0.600 $0.500 $0.400 $0.300 $0.200 $0.100 $0.000 COMMON DIVIDEND SPECIAL DIVIDEND § The Corporation’s long, uninterrupted history of dividends to its common shareholders reflects a key component of its Total Shareholder Return § Div
Slide 37: Securities Portfolio
SECURITIES PORTFOLIO § Investment portfolio is comprised of 52% available-for-sale and 48% held-to-maturity, as of June 30, 2022, as part of a strategy to mitigate volatility in tangible common equity § Overall low credit risk profile with 80% of the portfolio comprised of government or government s
Slide 38: New Markets – Staffing Detail
(1) MARKETS – STAFFING DETAIL 6/30/22 NEW MARKETS – SALES VS 6/30/22 STAFFING LEGACY VS NEW MARKETS SUPPORT NEW MARKET NEW SUPPORT STAFF MARKET 21% 34% LEGACY MARKET NEW MARKET 66% SALES STAFF 79% § Growth markets provide expanded § Innovative technology and processes opportunities for attracting sk
Slide 39: Appendix: Other Relevant Information
APPENDIX OTHER RELEVANT INFORMATION
Slide 40: Non-GAAP Reconciliation
(1) 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 o
Slide 41: Non-GAAP Reconciliation
(1) NON-GAAP RECONCILIATION For the year ending December 31, Year-to-Date Quarter-to-Date 12/31/2018 12/31/2019 12/31/2020 12/31/2021 6/30/2022 6/30/2021 6/30/2022 Interest Income $131,870 $155,728 $167,167 $179,600 $95,995 $43,528 $49,741 LESS: Interest Expense 26,950 39,530 32,456 19,820 7,077 5,2
Slide 42: Non-GAAP Reconciliation
(1) NON-GAAP RECONCILIATION For the year ending December 31, Quarter-Date 2013 2014 2015 2016 2017 2018 2019 2020 2021 6/30/2021 6/30/2022 Total Common Equity $164,911 $188,548 $201,913 $211,784 $243,910 $262,830 $304,966 $358,352 $385,062 $372,164 $365,803 Goodwill $27,194 $27,194 $27,194 $38,730 $