Cnb Financial Corporation · NASDAQ:CCNE
Cnb Financial — Debt Investor Presentation (June 2021)
41 slides from Cnb Financial's debt investor presentation, Jun 3, 2021
Slide 1: Discussion Materials: Subordinated Debt Offering Investor Presentation
Exhibit 99.1 DISCUSSION MATERIALS SUBORDINATED DEBT OFFERING INVESTOR PRESENTATION MAY 2021Exhibit 99.1 DISCUSSION MATERIALS SUBORDINATED DEBT OFFERING INVESTOR PRESENTATION MAY 2021
Slide 2: Certain Important Information
CERTAIN IMPORTANT INFORMATION CERTAIN IMPORTANT INFORMATION This presentation is confidential. This presentation is personal to each prospective investor and has been prepared by CNB Financial Corporation (the “Company” or “CNB”) solely for information purposes based on its own information, as well
Slide 3: Private Placement Disclaimer
CERTAIN IMPORTANT INFORMATION PRIVATE PLACEMENT DISCLAIMER This presentation has been prepared by the Company solely for informational purposes based on information regarding our operations, as well as information from public sources. This presentation is for information purposes only and is being f
Slide 4: 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 5: Preliminary Term Sheet
PRELIMINARY TERM SHEET Issuer: CNB Financial Corporation (NASDAQ: CCNE) Fixed-to-Floating Rate Subordinated Debt Due 2031 Security Offered: (1) Expected Rating : BBB- (Kroll Bond Rating Agency) Reg. D Private Placement Format: Term: 10 Years 5 years Optional Call Date: General corporate purposes, wh
Slide 6: Corporate Overview
CORPORATE OVERVIEWCORPORATE OVERVIEW
Slide 7: Investment Highlights
INVESTMENT HIGHLIGHTS A PREMIER FRANCHISE SUPERIOR MARKET POSITION ATTRACTIVE BUSINESS MIX § Strong market presence with 4 § Diversified loan portfolio with high § #1 market share and community bank in diversified local brands that are well growth in Cleveland and Buffalo Clearfield County since 186
Slide 8: CNB Financial Corporation
CNB FINANCIAL CORPORATION § Holding Company for CNB Bank (Clearfield, PA), serving the community since 1865 § 44 full-service offices, 1 drive-through location and 1 loan production office across GREATER Pennsylvania, New York and Ohio BUFFALO, NY § CNB Bank’s regional divisions include CNB Bank (We
Slide 9: Unique Multi-State, Multi-Brand Model
UNIQUE MULTI-STATE, MULTI-BRAND MODEL 18 full-service offices Opened August 2005 Opened in 2013 with the Opened in 2016 as a acquisition of FC Banc single loan production Western and Central PA Led by Division President Corp. in Bucyrus, OH office which was focus David J. Zimmer, III, an converted t
Slide 10: Experienced Leadership
EXPERIENCED LEADERSHIP TOP EXECUTIVES & CHAIRMAN OF THE BOARD BOARD OF DIRECTORS PETER F. SMITH Independent Chairman of § See biographical information on left § CEO of CNB Financial Corporation since January 1, 2010 the Board of Directors § Has been with the Company since 1997 – previously served as
Slide 11: A Bank of Choice in Legacy CNB Bank Markets
A BANK OF CHOICE IN LEGACY CNB BANK MARKETS (1) LEADING COMMUNITY BANK MARKET SHARE (2) (1) Combined CNB Bank Franchise County Footprint 2020 2020 Number of Total Deposits In Total Market Rank Institution (ST) Branches Market ($000) Share (%) § 18 full-service offices operate as CNB Bank 1 S&T Banco
Slide 12: Key Growth Markets
KEY GROWTH MARKETS BUFFALO, NY COLUMBUS, OH CLEVELAND, OH nd nd § 2 largest city in New York state§ One of the nation’s fastest growing § Cleveland is the 2 largest city in the cities state of Ohio § High growth market due to several development activities worth over $6B § Growth fueled by a diversi
Slide 13: Business Highlights
BUSINESS HIGHLIGHTSBUSINESS HIGHLIGHTS
Slide 14: Loan Portfolio Composition
LOAN PORTFOLIO COMPOSITION 3/31/21 LOAN PORTFOLIO COMPOSITION OBSERVATIONS § MRQ loan yield of 4.76% § Loan growth driven primarily by increases in C&I loans and CRE loans primarily from our Cleveland and Buffalo regions § Excluding $195 million of net PPP loans, loans grew $402 million, or 14.3%, f
Slide 15: COVID-19 Loan Modifications
COVID-19 LOAN MODIFICATIONS (1) COVID-19 MODIFICATIONS BY INDUSTRY OBSERVATIONS § Total modified loans comprised 3.4% of the total loan portfolio outstanding as of March 31, 2021 § Modifications are 81% Principal & Interest, 19% Principal only § 79% of modifications are scheduled to resume $114M con
Slide 16: Additional Detail – Hospitality / Hotels
(1) ADDITIONAL DETAIL – HOSPITALITY / HOTELS HOSPITALITY LOANS BY CATEGORY (3/31/21) HOSPITALITY/HOTELS LOAN PORTFOLIO § Franchise hotels comprise 98% of total hotel portfolio as of 3/31/21 § Resort or destination related hospitality sites comprise approximately 1% of the total hotel portfolio as of
Slide 17: Conservative Credit Culture
CONSERVATIVE CREDIT CULTURE MARCH 31, 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 3/31/2021 NONACCRUAL LOANS $15,653 $14,262 $21,736 $30,359 $31,882 ACCRUAL LOANS GREATER THAN 89 DAYS 616 887 61 325 987 OREO 7
Slide 18: Additional Credit Quality Detail
ADDITIONAL CREDIT QUALITY DETAIL COMMERCIAL LOANS BY RISK RATING (3/31/21) Special $ in Thousands Pass Mention Substandard Doubtful Total Pass % Commercial, Industrial and Agricultural $1,228,161 $10,921 $30,057 $0 $1,269,139 96.8% Commercial Mortgages 1,026,707 16,360 36,412 0 1,079,479 95.1% Total
Slide 19: Financial Trends
FINANCIAL TRENDS TOTAL ASSETS ($M) TOTAL GROSS LOANS ($M) (1) TOTAL DEPOSITS ($M) NET INCOME & ADJ. NET INCOME ($M) $60.0 $48.2 $50.0 $42.9 $40.1 $40.2 $38.1 $40.0 $33.7 $32.7 $30.0 $23.9 $20.0 $10.0 $0.0 2017 2018 2019 2020 LTM Net Income Adjusted Net Income (1) Adjusted Net income is a non-GAAP fi
Slide 20: Earnings Power
EARNINGS POWER (1) ROAA AND ADJUSTED ROAA RECENT EFFICIENCY INITIATIVES 1.40% § Re-established loan pricing floors from 4% to 5% 1.20% 1.17%1.18% 1.12% based on risk rating 1.20% 0.99% 1.00% 0.89% § Implemented strategies to utilize excess liquidity 0.75% 0.80% to enhance ongoing profitability 0.60%
Slide 21: 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 § Q1 2021 allowance for credit losses reflects a reserve build of $0.06 per diluted common share HISTORIC
Slide 22: Deposit Mix
DEPOSIT MIX 3/31/21 DEPOSIT MIX AVERAGE DEPOSITS PER BRANCH HIGHLIGHTS Deposit Composition § $99 million average deposits per branch as of ($000) 2017Y 2018Y 2019Y 2020Y 2021Q1 March 31, 2021, nearly doubling in size since 2017 Demand - Noninterest Bearing $321,858 $356,797 $382,259 $627,114 $699,23
Slide 23: Investment Portfolio
INVESTMENT PORTFOLIO MARCH 31, 2021 AVAILABLE FOR SALE SECURITIES PORTFOLIO FAIR VALUE Amortized Unrealized Fair $ in thousands Cost Gains Losses Value U.S. Government Sponsored Entities $156,342 $4,897 ($1,673) $159,566 State and Political Subdivisions 78,024 2,422 (1,251) 79,195 Residential and Mu
Slide 24: Liquidity
LIQUIDITY § The Company manages liquidity to meet short-term financial obligations including the payment of deposits on demand or at maturity, the repayment of borrowings at maturity and the ability to fund commitments and other new business opportunities § Funding is obtained through a variety of s
Slide 25: Offering Impact
OFFERING IMPACTOFFERING IMPACT
Slide 26: Illustrative Impact of the Proposed Offering
ILLUSTRATIVE IMPACT OF THE PROPOSED OFFERING CNB FINANCIAL CORPORATION – PRO FORMA CONSOLIDATED CAPITAL RATIOS (1) Note: Assumes $75 million gross offering size and redemption of outstanding $50 million of subordinated debt which is redeemable in October 2021 subject to regulatory approval Note: All
Slide 27: Leverage and Interest Coverage Analysis
LEVERAGE AND INTEREST COVERAGE ANALYSIS CNB FINANCIAL CORPORATION HISTORICAL LEVERAGE AND INTEREST COVERAGE 2021 Q1 PF Offering and Sub Note ($000) 2018 2019 2020 2021 Q1 Redemption Investment in subsidiaries $ 331, 260 $ 373, 913 $ 472,212 $ 473, 201 $ 473, 201 Consolidated equity 262, 830 304, 966
Slide 28: Appendix: Additional Financial Detail
APPENDIX ADDITIONAL FINANCIAL DETAILAPPENDIX ADDITIONAL FINANCIAL DETAIL
Slide 29: CNB Financial Corp. Financial Highlights
CNB FINANCIAL CORP. FINANCIAL HIGHLIGHTS For the Twelve Months Ended Quarters Ended In $000s except for per share data 12/31/2018 12/31/2019 12/31/2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 Balance Sheet Total Assets $3,221,521 $3,763,659 $4,729,399 $4,469,551 $4,734,475 $4,729,399 $4,901,092 Tot
Slide 30: Additional Loan Detail – Commercial Mortgages
ADDITIONAL LOAN DETAIL – COMMERCIAL MORTGAGES § Total commercial mortgage loans of $1.08 billion (31.7% of total loans) as of March 31, 2021 § Diversified by property type – highest concentrations are Apartments and Accommodation and Food Services, 26% and 19% of commercial mortgages, respectively §
Slide 31: Economically Sensitive Industries
ECONOMICALLY SENSITIVE INDUSTRIES TOTAL GROSS LOANS AS OF 3/31/21 COMMENTARY § The Company identifies its most economically sensitive loan exposure categories as hospitality, energy, restaurants, and healthcare § The Company is not significantly dependent on these economically sensitive industries §
Slide 32: Healthcare Loan Portfolio
(1) HEALTHCARE LOAN PORTFOLIO HEALTHCARE LOANS BY CATEGORY (3/31/21) HEALTHCARE LOAN PORTFOLIO § Total healthcare portfolio comprises approximately 4% of total loan portfolio as of 3/31/21 § Well diversified portfolio § Full recourse from owners/partners at origination $147M § Hard cash/land in the
Slide 33: Appendix: Mergers & Acquisitions
APPENDIX MERGERS & ACQUISITIONSAPPENDIX MERGERS & ACQUISITIONS
Slide 34: 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 35: 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 36: Appendix: Other Relevant Information
APPENDIX OTHER RELEVANT INFORMATIONAPPENDIX OTHER RELEVANT INFORMATION
Slide 37: Kroll Ratings Summary
KROLL RATINGS SUMMARY KROLL BOND RATING AGENCY - RATINGS SUMMARY Ratings last affirmed July 2020 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 37
Slide 38: 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 39: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION For the year ending December 31, Year-to-Date Dollars in thousands, except per share data 2017 2018 2019 2020 3/31/2021 Non-Interest Expense $70,037 $79,342 $87,508 $107,326 $27,804 LESS: Core Deposit Intangible Amortization 1,229 898 567 206 28 LESS: Merger Costs, Prepayment
Slide 40: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION As of or for the year ending December 31, As of or for quarter, Dollars in thousands, except per share data 2017 2018 2019 2020 3/31/2021 Average Common Equity $239,223 $250,496 $285,324 $337,963 $362,664 LESS: Average Intangibles 40,984 39,877 39,145 41,821 44,306 Average Ta
Slide 41: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION For the year ending December 31, For the quarter ending Dollars in thousands, except per share data 2018 2019 2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 Interest Income (fully tax equivalent basis) (non-GAAP) $133,318 $157,204 $168,528 $38,435 $42,692 $46,977 $44,619 LESS:
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