Cnb Financial Corporation · NASDAQ:CCNE
Cnb Financial — Merger or Acquisition (January 2025)
25 slides from Cnb Financial's merger presentation, Jan 10, 2025
Slide 1: Strategic Merger CNB | ESSA
Exhibit 99.1 STRATEGIC MERGER CNB | ESSA January 10, 2025 O U R F A M I L Y O F B A N K S
Slide 2: Disclaimer & Forward-Looking Statements
Disclaimer & Forward-Looking Statements Forward-Looking Statements This communication contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements about CNB and ESSA and their industry involve substantial risks and uncertaint
Slide 3: CNB At a Glance
CNB At a Glance Cultural Cornerstones and Distinct Geographic Business Model Driving Outsized Returns Financial Snapshot as of 2024Q3 Our Core Values Experienced M&A Community Banking Focus Executive Team Social Impact & Greater Leadership, Accountability, Purpose and Integrity Distinguished Brands
Slide 4: CNB's Demonstrated Track Record of Strong Growth and Shareholder Returns
2023 2021 CNB’s Demonstrated Track Record of Strong Growth and Qualitative Shareholder Returns (2) Total Asset Growth and Key Franchise Growth Activities ($B) Stock Price Performance ~1.6x outperformance Common Equity At-The-Market Common Capital Raise of Capital Raise of Equity $34.5M $20.0M Capita
Slide 5: Strategic Merger with ESSA Bancorp Strengthens Multi-State, Multi-Brand Model
Strategic Merger with ESSA Bancorp, Inc. Strengthens CNB Financial Corporation’s Multi-State, Multi-Brand Model Expected Powerful Combined Franchise CCNE (55) (2) ESSA (20) (1) Pro Forma $6.3B + $2.2B = ~$8.3B Buffalo, NY Total Assets at Close New York Anticipated Favorable Shareholder Impacts Cleve
Slide 6: Transaction Summary
Transaction Summary • Entities: CNB Financial Corporation (“CNB” or “CCNE”), ESSA Bancorp, Inc. (“ESSA”) • 100% common stock consideration; CNB to issue shares to ESSA shareholders Merger Structure & Consideration • Fixed exchange ratio of 0.8547 CNB shares for each ESSA share outstanding (1) • Aggr
Slide 7: Overview of ESSA Bancorp, Inc.
Overview of Bancorp, Inc. (NASDAQ: ESSA) Company Overview & Key Highlights Financial Highlights as of 9/30/2024 (Fiscal Year End) • Founded in 1916 • Headquartered in Stroudsburg, PA • Operating footprint includes 20 retail branch (1) locations throughout the Lehigh Valley, Northern Pennsylvania, an
Slide 8: Top Combined Pennsylvania Franchise
Top 10 Combined Pennsylvania Franchise Combined Franchise Anticipated to be Top 10 (1) Deposit Share in Pennsylvania (5) Pro Forma Pennsylvania Branch Map CCNE (29) ESSA (20) ✓ $4.8 Billion in Total Pennsylvania Deposits ✓ 49 Total Branches in Pennsylvania ✓ $97 Million Pro Forma Average Branch Size
Slide 9: Well-Positioned for Growth in the Greater Lehigh Valley Market
Well-Positioned for Growth in the Highly Attractive Greater Lehigh Valley Market (2) Leading Community Bank Deposit Market Share (1) Scarcity Value in an Attractive and Robust Lehigh Valley Market Total Deposits in Market ($M) #1 #3 $55.7B Largest Bank Ranked Bank in Greater 2023 Local HQ’d In the R
Slide 10: Combination Unlocks Potential Significant Synergized Earnings
Combination Unlocks Potential Significant Synergized Earnings $ in millions Historical Net Income Projected Net Income Contributed by ESSA Inclusive of Cost Saves & Mark-to-Market Impact Discount of 6.7% modeled (primarily rate) and accreted into earnings over 6 years; portfolio currently yields 5.1
Slide 11: Key Model Assumptions & Financial Impacts
Key Model Assumptions & Financial Impacts Key Financial Impacts ROAA ROATCE GAAP Cash ~35% ~14% 2026 Diluted 2026 Diluted EPS Accretion EPS Accretion (3%) (15%) TBV per share TBV per share Dilution at Close Dilution at Close 2026E 3.3yrs 1.7yrs Pro Forma TBV per share TBV per share Net Interest Marg
Slide 12: Compelling & Efficient Utilization of Capital
Compelling & Efficient Utilization of Capital Significant CET1 Capital Generation Materially Higher Returns Than a Share Buyback Pro Forma (3) ~140bps CET1 Annually (4) Excluding Asset Growth Pro Forma BHC CET1 Ratios CET1 Ratio Earnback in ~2 Years Source: S&P Global Market Intelligence; FactSet; B
Slide 13: Positioned for Upside & Outperformance
Positioned for Upside & Outperformance (1) Pro Forma CNB vs. Peers (2) (3) Pro Forma Profitability Pro Forma Trading Valuation (4) 2026E Consensus ROAA Trading Price / Pro Forma TBV Standalone Pro Forma Standalone Pro Forma (5) 2026E Consensus ROATCE Trading Price / Pro Forma 2026E Diluted EPS Stand
Slide 14: Merger with ESSA Checks Key Strategic Boxes
Merger with ESSA Checks Key Strategic Boxes CCNE Investment Thesis From September 2022 Capital Raise Presentation: ✓Deep rooted community bank established in 1865✓Deep rooted community bank established in 1916 A Premier (1) ✓Top 5 ranked market share in legacy CNB markets and in the ✓Top 5 ranked ma
Slide 15: Model Assumptions & Diligence
Model Assumptions & Diligence
Slide 16: Model Assumptions Detail
Model Assumptions Detail (1) • Aggregate deal value of approximately $214 million | Deal value of $206 million , inclusive of ESOP loan pay-down • Indicative purchase price per ESSA share of $21.10 • Price / TBV: 0.99x (Pay-to-Trade Ratio: 96%) Deal Value & Key (2) • Price / LTM GAAP Earnings multip
Slide 17: Model Assumptions Detail (Cont.)
Model Assumptions Detail (Cont.) (1) • Gross credit markdown of $23.5 million (excluding CECL Double Count of $15.3 million) or 1.3% of ESSA’s HFI loans , and 154% of ESSA’s loan loss reserves − $8.2 million (35%) allocated to purchase credit deteriorated (PCD) loans Credit Mark − $15.3 million (65%
Slide 18: Extensive M&A Experience & Diligence Process
Extensive M&A Experience & Diligence Process ✓ Leveraged CCNE's M&A expertise and diligence team, Combined M&A Experience which included more than 20 members across various focus areas ✓ Virtual and on-site diligence meetings conducted between both companies and all advisors across all focus areas ✓
Slide 19: Pro Forma Capital Ratios vs. Peers
Pro Forma Capital Ratios vs. Peers (1) Pro Forma @ Close Source: S&P Global Market Intelligence; FactSet; Call Report. Note: Peer median regulatory capital ratios as of 2024Q3. 19 (1) Assumes $30 million of CCNE BHC capital pushed down to bank concurrent with merger. (2) Peers are defined as nationw
Slide 20: Appendix
Appendix
Slide 21: Loans and Deposits Detail
Loans and Deposits Detail (3) CNB Financial Corporation ESSA Bancorp, Inc. Pro Forma Company (1)(2) Loan Composition Total Loans: $4.6B Total Loans: $1.8B Total Loans: $6.4B Yield on Loans: 6.66% Yield on Loans: 5.19% Yield on Loans: 6.25% (3) (4) (5) CRE / TRBC: 231% CRE / TRBC: 292% CRE / TRBC: 26
Slide 22: Illustrative Pro Forma Net Income & Diluted EPS Accretion
Illustrative Pro Forma Net Income & Diluted EPS Accretion Illustrative 2026 Diluted EPS Accretion ESSA Fully Synergized Earnings Reconciliation (2) (3) Source: S&P Global Market Intelligence; FactSet; Bloomberg; Company documents. (1) Assumes CCNE issuance price of $24.69 per share (10-day VWAP as o
Slide 23: Tangible Book Value Dilution Reconciliation
Tangible Book Value Dilution Reconciliation Calculation of Intangibles Illustrative Tangible Book Value Dilution (1) (1) Source: S&P Global Market Intelligence; FactSet; Bloomberg; Company documents. 23 (1) Assumes CCNE issuance price of $24.69 per share (10-day VWAP as of 1/8/2025) and ESSA common
Slide 24: Non-GAAP Reconciliations
Non-GAAP Reconciliations Tangible Common Equity / Tangible Assets CCNE CCNE ESSA Source: S&P Global Market Intelligence; Bloomberg. 24 Note: 9/30/2024 is ESSA fiscal year end.
Slide 25: Non-GAAP Reconciliations (cont.)
Non-GAAP Reconciliations (cont.) Return on Average Tangible Common Equity CCNE ESSA Source: S&P Global Market Intelligence. 25 Note: 9/30/2024 is ESSA fiscal year end.