Cnb Financial Corporation · NASDAQ:CCNE
Cnb Financial — Investor Presentation (August 2021)
41 slides from Cnb Financial's investor presentation, Aug 2, 2021
Slide 1: Discussion Materials Investor Presentation August 2021
84 87 90 164 30 52 230 228 229 Discussion Materials Investor Presentation AUgust 2021 164 30 52 164 30 52 164 30 52 Exhibit 99.1
Slide 2: Certain Important Information
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 Experienced Leadership Strong financial positioning Consistent Growth Story #1 market share and community bank in Clearfield County since 1865 #3 community bank(1) in legacy CNB Bank markets #3 ranked community ban
Slide 5: CNB Financial Corporation
NY PA OH ERIEBANK BANKONBUFFALO FC BANK CNB BANK COLUMBUS, OH GREATER BUFFALO, NY CLEVELAND, OH ERIE, PA CNB Financial Corporation 1)ROATCE is a non-GAAP measure. See appendix for reconciliation Note: Market data as of 7/30/2021. Financial data as of 6/30/2021 Source: Company filings and market capi
Slide 6: Unique Multi-state, Multi-brand Model
Unique Multi-state, multi-brand model 18 full-service offices Western and Central PA focus Legacy bank of the organization founded in 1865 Opened August 2005 10 full-service offices serving Erie, Crawford, & Warren counties in PA, and Lake, Ashtabula, & Cuyahoga counties in OH 1 loan production offi
Slide 7: Management Team
Joseph B. Bower Jr. President, CEO & Director CEO of CNB Financial Corporation since January 1, 2010 Has been with the Company since 1997 – previously served as Chief Financial Officer and Chief Operating Officer of CNB Bank as well as Secretary and Treasurer of CNB Financial Corporation Previously
Slide 8: Growth Milestones
Growth Milestones 2020 Acquisition of Bank of Akron 2013 2010 2005 1934 Reorganized through a stock offering to existing depositors 1984 1865 County National Bank of Clearfield established 2015 2016 2021 CNB Financial Corporation holding company organized ERIEBANK formed Common Equity Capital Raise
Slide 9: A Bank of Choice in Legacy CNB Bank Markets
(1) Community bank defined as banks with total assets < $30 billion. Deposit market share data as of June 30, 2020 (2) Combined county market includes: McKean, PA; Elk, PA; Jefferson, PA; Clearfield, PA; Indiana, PA; Cambria, PA; Blair, PA; Centre, PA Source: Deposit Market Share data from S&P Globa
Slide 10: Key Growth Markets
Source: city-buffalo.com; buffaloniagara.com; city.cleveland.oh.us; rethinkcleveland.org; roanokechamber.org Key growth markets 2nd largest city in New York state High growth market due to several development activities worth over $6B enacted since 2006: Wider development of the Buffalo Niagara Medi
Slide 11: Growth: Focus on Buffalo
(1) Community bank defined as banks with total assets < $30 billion Note: Deposit market share data shown based upon 2020 FDIC data Source: Deposit Market Share data from S&P Global Market Intelligence growth: focus on buffalo Leading deposit Market Share #3 ranked community bank(1) in the Buffalo-C
Slide 12: Growth: Cleveland Market
(1) Deposit data as of June 30, 2020, as adjusted for acquisitions where discernable Source: Deposit Market Share data from S&P Global Market Intelligence growth: Cleveland market Fast Growing deposit Market Share #4 ranked in year over year deposit growth in 2020 in the Cleveland MSA among banks wi
Slide 13: Business Highlights
Business Highlights
Slide 14: Loan Portfolio Composition
MRQ loan yield of 4.76% compared to 4.67% in Q2 2020. Loan growth driven primarily by increases in C&I loans and CRE loans primarily from our Cleveland and Buffalo regions Excluding $140 million of net PPP loans, loans grew $526 million, or 18.8%, from December 31, 2019, including Bank of Akron CNB
Slide 15: Additional Loan Detail – Commercial Mortgages
Additional Loan Detail – Commercial mortgages Total commercial mortgage loans of $1.1 billion (31.7% of total loans) as of June 30, 2021 Diversified by property type – highest concentrations are Apartments and Accommodation and Food Services, 26% and 20% of commercial mortgages, respectively Average
Slide 16: Additional Detail – Hospitality / Hotels
Additional Detail – Hospitality / Hotels (1) Hospitality/Hotels Loan Portfolio Franchise hotels comprise 99% of total hotel portfolio as of 6/30/21 Resort or destination related hospitality sites comprise approximately 1% of the total hotel portfolio as of 6/30/21 Prioritize tier 1 preferred franchi
Slide 17: Healthcare Loan Portfolio
healthcare Loan Portfolio(1) healthcare Loan Portfolio Total healthcare portfolio comprises approximately 4.4% of total loan portfolio as of 6/30/21 Well diversified portfolio Full recourse from owners/partners at origination Hard cash/land in the project or purchase Delinquent and non-performing lo
Slide 18: Covid-19 Loan Modifications Observations
Covid-19 loan modifications observations Total modified loans of $55.6 million comprise 1.6% of the total loan portfolio outstanding as of June 30, 2021 Starting point in Q2 2020 was $626 million, or 20.7% of total loans. Modifications are 82% Principal & Interest, 18% Principal only Modifications s
Slide 19: Conservative Credit Culture
Conservative credit culture June 30, 2021 nonaccrual loans by type Historical asset quality Historical NPAs/Assets & Ncos/Loans Note: TDRs is an abbreviation for Troubled Debt Restructurings and excludes COVID-19 related modifications. NPAs is an abbreviation for non-performing assets. NCOs is an ab
Slide 20: Additional Credit Quality Detail
Additional credit quality detail Commercial Loans by Risk Rating (6/30/21) Residential, Consumer & Credit card – performing detail (6/30/21) Source: Company filings
Slide 21: SBA PPP Loans
SBA PPP Loans SBA Paycheck protection program (PPP) (as of June 30, 2021) PPP Round 1 has $22.6 million outstanding as of June 30, 2021, with $145 thousand in deferred processing fees Initial PPP Round 1 as of June 30, 2020, had $226 million outstanding with $8.8 million in deferred processing fees
Slide 22: Deposit Mix
Deposit mix 6/30/21 deposit mix Highlights $102 million average deposits per branch as of June 30, 2021, nearly doubling in size since 2017 Core deposits(1) represent over 90% of total deposits, with cost of deposits of 0.44% for the quarter ended June 30, 2021 Deposit costs have declined for 6 cons
Slide 23: Financial Highlights
Financial Highlights
Slide 24: 2nd Quarter 2021 Highlights
(1) Tangible common equity is a non-GAAP financial measure; see appendix for reconciliation (2) Tier 1 Leverage Ratio is estimated as of June 30, 2021 Note: “MRQ” means for the unaudited 3 month period ended June 30, 2021; “PPP” means the Paycheck Protection Program Source: Company filings 2nd Quart
Slide 25: Financial Trends
(1) Adjusted Net income is a non-GAAP financial measure; see appendix for reconciliation Note: YTD data as of June 30, 2021 and “LTM” means for the unaudited 12 month period ended June 30, 2021 Source: Company filings Financial trends Total Assets ($M) Total Gross Loans ($M) Total Deposits ($M) Net
Slide 26: 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 June 30, 2021, reflecting an increase of 7.3%, or 14.8%, annualized, from December 31, 2020 Fee income of $3.3 million for YTD June 202
Slide 27: Net Interest Margin & Pre-Provision Net Revenue
(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-related assets and Federal Reserve excess liquidity and income (3) Excludes applicable merger and acquisition, FHLB pr
Slide 28: Allowance for Credit Losses (ACL)
Allowance for CREDIT losses (ACL) The company adopted the current expected credit loss (“CECL”) methodology in Q4 2020 effective January 1, 2020 First six months of 2021 the allowance for credit losses reflects a reserve build of $0.12 per diluted common share Excluding PPP-related loans, the ACL wa
Slide 29: Capital Ratios
Capital ratios CNB Financial Corporation – Capital Ratios Note: Tier 1 Leverage and Total Risk Based are estimated as of Q2 2021 Source: Company filings All capital ratios have significant excess to well-capitalized thresholds Excess capital level equivalent to 20+ years cumulative net credit losses
Slide 30: Dividend History
Dividend History Historical dividend per common share Dividend yield of 2.98% as of June 30, 2021 LTM ending June 30, 2021 dividend payout ratio of 22.7% (1) The Corporation’s long, uninterrupted history of dividends to its common shareholders reflects a key component of its Total Shareholder Return
Slide 31: Interest Rate Sensitivity
Interest rate sensitivity Base case assumes composition of interest sensitive assets and liabilities remain static as of 6/30/2021 Assumes rate shocks are instantaneous and sustained parallel rate shifts, or reflected uniformly across the yield curve regardless of duration to maturity or repricing o
Slide 32: Appendix: Mergers & Acquisitions
Appendix Mergers & acquisitions
Slide 33: Recent Acquisitive Success
(1) Financial data as of most recent available quarter or twelve month (LTM) period prior to close, (quarter ended 9/30/2013) (2) Financial data as of most recent available quarter or twelve month (LTM) period prior to close, (quarter ended 6/30/2016) (3) Financial data as of most recent available q
Slide 34: Overview: Acquisition of Bank of Akron
Overview: acquisition of Bank of AKron Transaction rationale In market expansion for high growth BankOnBuffalo division of CNB Branches, footprints and target markets contiguous but not overlapping Similar commercial banking focus to CNB Provides critical personnel depth to rapidly growing Buffalo f
Slide 35: Appendix: Other Relevant Information
Appendix Other relevant information
Slide 36: KBRA Ratings Summary
Source: Press Release – “KBRA Affirms Ratings for CNB Financial Corporation” (July 22, 2020) KBRA ratings summary
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 ots in bounds, excep per shore dato 2017 2018 2019 2020 6/30/2024 ‘Average Common Equity $239,223 $250,496 $285,324 $337,963 $364,687 it 40.984 39.877 39,145 41,821 44,292 ‘Average Tangible common equity (non-GAAP) $198,239 $210,619 $246,179 $296,142 $320,395 A [Net Income Av
Slide 39: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION For the quarter ending 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 Interest Income (fully tax equivalent basis) (non-GAAP) $40,970 $40,425 $38,435 $42,692 ‘$46,977 $44,619 $43,836 10,863 10,096 8,135
Slide 40: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION As of or for the quarter ending, Dollars in thousands, except per share data 6/30/2020 9/30/2020 12/31/2020 3/31/2021 __ 6/30/2021 Net Interest Income $29,938 $34,664 $40,115 $39,121 $38,305 ADD: Non-interest income 7,949 6,778 7,968 8,239 7,857 22,199 28,368 35,017, 27,804 2
Slide 41: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION As of or for the year ending December 31, Year-to-Date 2017 2018 2019 2020 6/30/2021 Allowance for Loan Losses $19,693 $19,704 $19,473 $34,340 $36,908 A Total Loans, net of Unearned Income $2,145,959 $2,474,557 $2,804,035 $3,371,789 $3,469,845 B LESS: PPP-s Fees : : : 155,529