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What changed in CNB FINANCIAL CORP/PA's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CNB FINANCIAL CORP/PA's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+290 added−277 removedSource: 10-K (2026-03-11) vs 10-K (2025-03-06)

Top changes in CNB FINANCIAL CORP/PA's 2025 10-K

290 paragraphs added · 277 removed · 209 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

70 edited+29 added−10 removed66 unchanged
Biggest changeThe Capital Rules also preclude certain hybrid securities, such as trust preferred securities, from inclusion in bank holding companies’ Tier 1 capital, although bank holding companies that had total consolidated assets of less than $15 billion at December 31, 2009 may include trust preferred securities issued prior to May 19, 2010 as a component of Tier 1 capital. 4 Table of Contents In September 2019, the OCC, the Federal Reserve Board and the FDIC adopted a final rule that is intended to further simplify the Capital Rules for depository institutions and their holding companies that have less than $10 billion in total consolidated assets, such as us, if such institutions meet certain qualifying criteria.
Biggest changeThe Capital Rules also preclude certain hybrid securities, such as trust preferred securities, from inclusion in bank holding companies’ Tier 1 capital, although bank holding companies that had total consolidated assets of less than $15 billion at December 31, 2009 may include trust preferred securities issued prior to May 19, 2010 as a component of Tier 1 capital.
Additionally, in Parma, Ohio, the Corporation provided debt financing of $5.5 million and made an equity investment of $4.2 million in low-income housing tax credits to support a project to rehabilitate low-income senior housing facility, with 63 units.
Additionally, in Parma, Ohio, the Corporation provided debt financing of $5.5 million and made an equity investment of $4.2 million in low‑income housing tax credits to support a project to rehabilitate a low‑income senior housing facility with 63 units.
The Corporation’s succession planning process is further strengthened by its presence in diversified markets that lead to opportunities to attract and retain talent with broad-based skills and experiences. The Corporation is dedicated to recognizing the unique contribution of each employee and is committed to supporting a workplace that understands, accepts and values the similarities and differences between individuals.
The Corporation’s succession planning process is further strengthened by the Corporation's presence in diversified markets that lead to opportunities to attract and retain talent with broad-based skills and experiences. The Corporation is dedicated to recognizing the unique contribution of each employee and is committed to supporting a workplace that understands, accepts and values the similarities and differences between individuals.
The Capital Rules also include a “capital conservation buffer,” composed entirely of CET1, in addition to these minimum risk-weighted asset ratios (which are each of the first three ratios described above, but not the leverage ratio). The capital conservation buffer is designed to absorb losses during periods of economic stress.
The Capital Rules also include a "capital conservation buffer," composed entirely of CET1, in addition to these minimum risk-weighted asset ratios (which are each of the first three ratios described above, but not the leverage ratio). The capital conservation buffer is designed to absorb losses during periods of economic stress.
The CNB Bank franchise operates twenty full-service branch locations in Central and North Central Pennsylvania. ERIEBANK, a division of the Bank, began operations in 2005. In July 2016, the Corporation acquired Lake National Bank, which operated two full-service branches in Mentor, Ohio, approximately 20 miles east of Cleveland, Ohio.
The CNB Bank franchise operates nineteen full-service branch locations in Central and North Central Pennsylvania. ERIEBANK, a division of the Bank, began operations in 2005. In July 2016, the Corporation acquired Lake National Bank, which operated two full-service branches in Mentor, Ohio, approximately 20 miles east of Cleveland, Ohio.
The Bank continues to operate one of these branch locations within its ERIEBANK franchise, with the other location ceasing operations in August 2020. In December 2021, the Corporation opened a full-service branch in Cleveland, Ohio. The Bank currently operates thirteen full-service branch locations within its ERIEBANK franchise, a division of the Bank, with its headquarters in Erie, Pennsylvania.
The Bank continues to operate one of these branch locations within its ERIEBANK franchise, with the other location ceasing operations in August 2020. In December 2021, the Corporation opened a full-service branch in Cleveland, Ohio. The Bank currently operates fourteen full-service branch locations within its ERIEBANK franchise, a division of the Bank, with its headquarters in Erie, Pennsylvania.
The project includes extensive improvements to make the facility more energy efficient and to increase the number of units that are handicap accessible. The Corporation remains deeply committed to promoting financial education within its communities. Through a variety of initiatives, the Corporation aims to empower individuals with the knowledge and tools they need to achieve financial wellness.
The project includes extensive improvements to make the facility more energy‑efficient and to increase the number of units that are handicap accessible. The Corporation remains deeply committed to promoting financial well‑being within its communities. Through a variety of initiatives, the Corporation aims to empower individuals with the knowledge and tools they need to achieve financial wellness.
The commercial space will be available at affordable rents to generate economic and small business opportunities particularly marketed towards local and minority/women-owned business enterprises.
The commercial space will be available at affordable rents to generate economic and small‑business opportunities, particularly marketed toward local and minority/women‑owned business enterprises.
In July 2020, the Corporation acquired Bank of Akron, with its branch locations operating with BankOnBuffalo. The Bank currently operates twelve branch locations, one mobile branch and one drive-up office as BankOnBuffalo, a division of the Bank, with its headquarters in Buffalo, New York.
In July 2020, the Corporation acquired Bank of Akron, with its branch locations operating with BankOnBuffalo. The Bank currently operates twelve full-service branch locations, one mobile branch and two drive-up office as BankOnBuffalo, a division of the Bank, with its headquarters in Buffalo, New York.
The Bank’s loans and other products and services are also subject to numerous federal and state consumer financial protection laws, including, but not limited to, the following: • Truth-In-Lending Act, which governs disclosures of credit terms to consumer borrowers; • Truth-in-Savings Act, which governs disclosures of the terms of deposit accounts to consumers; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to regulators to enable determinations as to whether financial institutions are fulfilling their obligations to meet the home lending needs of the communities they serve and not discriminating in their lending practices; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, sex or other prohibited factors in extending credit; • Real Estate Settlement Procedures Act, which imposes requirements relating to real estate settlements, including requiring lenders to disclose certain information regarding the nature and cost of real estate settlement services; • Fair Credit Reporting Act, covering numerous areas relating to certain types of consumer information and identity theft; • Privacy provisions of the Gramm-Leach-Bliley Act and related regulations, which require that financial institutions provide privacy policies to consumers, to allow customers to "opt out" of certain sharing of their nonpublic personal information, and to safeguard sensitive and confidential customer information; • Electronic Funds Transfer Act, which is a consumer protection law regarding electronic fund transfers; and • Numerous other federal and state laws and regulations, including those related to consumer protection and bank operations.
The Bank’s loans and other products and services are also subject to numerous federal and state consumer financial protection laws, including, but not limited to, the following: • Truth-In-Lending Act, which governs disclosures of credit terms to consumer borrowers; • Truth-in-Savings Act, which governs disclosures of the terms of deposit accounts to consumers; • Home Mortgage Disclosure Act, requiring financial institutions to provide information to regulators to enable determinations as to whether financial institutions are fulfilling their obligations to meet the home lending needs of the communities they serve and not discriminating in their lending practices; • Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, sex or other prohibited factors in extending credit; • Real Estate Settlement Procedures Act, which imposes requirements relating to real estate settlements, including requiring lenders to disclose certain information regarding the nature and cost of real estate settlement services; • Fair Credit Reporting Act, covering numerous areas relating to certain types of consumer information and identity theft; • Privacy provisions of the Gramm-Leach-Bliley Act and related regulations, which require that financial institutions provide privacy policies to consumers, to allow customers to "opt out" of certain sharing of their nonpublic personal information, and to safeguard sensitive and confidential customer information; • Electronic Funds Transfer Act, which is a consumer protection law regarding electronic fund transfers; and • Numerous other federal and state laws and regulations, including those related to consumer protection and bank operations. 8 Table of Contents Governmental Policies Our earnings are significantly affected by the monetary and fiscal policies of governmental authorities, including the Federal Reserve Board.
Pursuant to the Capital Rules, the minimum capital ratios are as follows: • 4.5% CET1 to risk-weighted assets; • 6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets; • 8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and • 4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (called “leverage ratio”).
Pursuant to the Capital Rules, the minimum capital ratios are as follows: • 4.5% CET1 to risk-weighted assets; • 6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets; • 8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and • 4.0% Tier 1 capital to average consolidated assets as reported on consolidated financial statements (called "leverage ratio").
These activities and services principally include checking, savings, and time deposit accounts; real estate, commercial, industrial, residential and consumer loans; and a variety of other specialized financial services. The Bank’s Private Client Solutions division offers a full range of client services, including private banking and wealth and asset management. Merger with ESSA Bancorp, Inc.
These activities and services principally include checking, savings, and time deposit accounts; real estate, commercial, industrial, residential and consumer loans; and a variety of other specialized financial services. The Bank’s Private Client Solutions division offers a full range of client services, including private banking and wealth and asset management.
To encourage employees to give back to their communities, the Corporation introduced the Volunteer Time Off Program, which provides employees with up to 16 hours of paid time off annually to volunteer for nonprofit organizations and local causes who may need volunteer assistance during typical weekday business hours.
To encourage employees to give back to their communities, the Corporation's Volunteer Time Off Program, which provides employees with up to 16 hours of paid time off annually to volunteer for nonprofit organizations and local causes that may need volunteer assistance during typical weekday business hours.
The Capital Rules: (i) include “Common Equity Tier 1” (“CET1”) and a related regulatory capital ratio of CET1 to risk-weighted assets; (ii) specify that Tier 1 capital consists of CET1 and “Additional Tier 1 capital” instruments meeting certain revised requirements; (iii) mandate that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of the deductions from and adjustments to capital as compared to existing regulations.
The Capital Rules: (i) include "Common Equity Tier 1" ("CET1") and a related regulatory capital ratio of CET1 to risk-weighted assets; (ii) specify that Tier 1 capital consists of CET1 and "Additional Tier 1 capital" instruments meeting certain revised requirements; (iii) mandate that most deductions/adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of the deductions from and adjustments to capital as compared to existing regulations.
In 2024, the program was met with tremendous enthusiasm, with employees dedicating a collective total of 3,585 hours to volunteer service across the communities the Corporation serves. Importantly, employees contributed nearly nine times of additional volunteering hours of their own time beyond those hours covered by the Volunteer Time Off Program.
In 2025, the program was met with tremendous enthusiasm, with employees dedicating a collective total of 3,446 hours to volunteer service across the communities the Corporation serves. Importantly, employees contributed over nine times additional volunteering hours of their own time beyond those hours covered by the Volunteer Time Off Program.
The Capital Rules provide for a number of deductions from and adjustments to CET1. These include, for example, the requirement that mortgage servicing assets, deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks, and significant investments in non-consolidated financial entities be deducted from CET1 above certain thresholds.
These include, for example, the requirement that mortgage servicing assets, deferred tax assets arising from temporary differences that could not be realized through net operating loss carrybacks, and significant investments in non-consolidated financial entities be deducted from CET1 above certain thresholds.
CNB Risk Management, Inc. is a Delaware-based captive insurance company which insures against certain risks unique to the operations of the Corporation and its subsidiaries and for which insurance may not be currently available or economically feasible in today's insurance marketplace.
CNB Insurance Agency, incorporated in Pennsylvania, provides for the sale of nonproprietary annuities and other insurance products. CNB Risk Management, Inc. is a Delaware-based captive insurance company which insures against certain risks unique to the operations of the Corporation and its subsidiaries and for which insurance may not be currently available or economically feasible in today's insurance marketplace.
The succession plan was successfully utilized in 2024 after the resignation of a named executive officer, resulting in a seamless transition to a senior executive within the Corporation.
The succession plan was successfully utilized in 2024 after the resignation of a named executive officer, resulting in a seamless transition of related areas of responsibility to other members of the Senior Management within the Corporation.
Such a transaction may also require approval of the Pennsylvania Department of Banking. Pursuant to provisions of the BHC Act and regulations promulgated by the Federal Reserve Board thereunder, the Corporation may only engage in, or own companies that engage in, activities deemed by the Federal Reserve Board to be permissible for bank holding companies or financial holding companies.
Pursuant to provisions of the BHC Act and regulations promulgated by the Federal Reserve Board thereunder, the Corporation may only engage in, or own companies that engage in, activities deemed by the Federal Reserve Board to be permissible for bank holding companies or financial holding companies.
In 2024, the Corporation launched the Financial Wellness Center, offering a series of free, publicly available online trainings that cover a wide range of finance topics, from budgeting basics to retirement planning.
In 2025, the Corporation continued to expand its Financial Wellness Center, offering a robust series of free, publicly available online trainings that cover a wide range of basic finance topics, from budgeting basics to retirement planning.
Thus, the capital standards applicable to the Corporation include an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios inclusive of the capital conservation buffer of (i) CET1 to risk-weighted assets of at least 7%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%, and (iii) total capital to risk-weighted assets of at least 10.5%.
Thus, the capital standards applicable to the Corporation include an additional capital conservation buffer of 2.5% of CET1, effectively resulting in minimum ratios inclusive of the capital conservation buffer of (i) CET1 to risk-weighted assets of at least 7%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%, and (iii) total capital to risk-weighted assets of at least 10.5%. 4 Table of Contents The Capital Rules provide for a number of deductions from and adjustments to CET1.
In December 2006, County National Bank changed its name to CNB Bank (the "Bank") and became a state bank chartered in Pennsylvania and subject to regulation by the Pennsylvania Department of Banking and Securities (the "Pennsylvania Department of Banking") and the Federal Deposit Insurance Corporation.
In December 2006, County National Bank changed its name to CNB Bank (the "Bank") and became a state bank chartered in Pennsylvania and subject to regulation by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation. In October 2013, the Corporation acquired FC Banc Corp. and its subsidiary, The Farmers Citizens Bank.
Under the terms of the Merger Agreement, each outstanding share of ESSA common stock will be converted into the right to receive 0.8547 shares of the Corporation’s common stock.
Pursuant to the Merger Agreement, each outstanding share of ESSA common stock was converted into the right to receive 0.8547 shares of the Corporation’s common stock.
Bank holding companies and insured depository institutions may also be subject to potential enforcement actions of varying levels of severity by the federal banking agencies for unsafe or unsound practices in conducting their business, or for violation of any law, rule, regulation, condition imposed in writing by the agency, or term of a written agreement with the agency.
At December 31, 2025, the Bank qualified as "well capitalized" under applicable regulatory capital standards. 5 Table of Contents Bank holding companies and insured depository institutions may also be subject to potential enforcement actions of varying levels of severity by the federal banking agencies for unsafe or unsound practices in conducting their business, or for violation of any law, rule, regulation, condition imposed in writing by the agency, or term of a written agreement with the agency.
Information sharing among financial institutions for the above purposes is encouraged by an exemption granted to complying financial institutions from the privacy provisions of the Gramm-Leach-Bliley Act and other privacy laws.
Financial institutions also are required to respond to requests for information from federal banking agencies and law enforcement agencies. Information sharing among financial institutions for the above purposes is encouraged by an exemption granted to complying financial institutions from the privacy provisions of the Gramm-Leach-Bliley Act and other privacy laws.
To monitor changes in the Corporation’s employee and management groups relative to both composition and growth, the Corporation uses, among other tools, recurring management and employee surveys, profile analyses, and summaries of year-over-year changes to the pools of employees and management within its various banking divisions and the Corporation as a whole, and utilizes the results to track progress and improve the effectiveness of the Corporation’s leadership development and workforce profile and personnel management practices. 9 Table of Contents The Corporation offers a robust range of training programs tailored to meet the needs of employees across all levels and departments.
To monitor changes in the Corporation's employee and management groups relative to both composition and growth, the Corporation uses, among other tools, recurring management and employee surveys, profile analyses, third-party compensation surveys, and summaries of year-over-year changes to the pools of employees and management within the Corporation's various banking divisions and the Corporation as a whole, and utilizes the results to track progress and improve the effectiveness of the Corporation’s leadership development and workforce profile and personnel management practices.
Blocked assets (property and bank deposits) cannot be paid out, withdrawn, set off, or transferred in any manner without a license from the Office of Foreign Assets Control.
Blocked assets (property and bank deposits) cannot be paid out, withdrawn, set off, or transferred in any manner without a license from the Office of Foreign Assets Control. Failure to comply with these sanctions could have serious legal and reputational consequences.
In more serious cases, enforcement actions may include the issuance of directives to increase capital; the issuance of formal and informal agreements; the imposition of civil monetary penalties; the issuance of a cease and desist order that can be judicially enforced; the issuance of removal and prohibition orders against officers, directors, and other institution affiliated parties; the termination of the insured depository institution’s deposit insurance; the appointment of a conservator or receiver for the insured depository institution; and the enforcement of such actions through injunctions or restraining orders based upon a judicial determination that the FDIC, as receiver, would be harmed if such equitable relief was not granted. 5 Table of Contents Community Reinvestment Act Under the Community Reinvestment Act of 1977 ("CRA"), the FDIC is required to assess the record of all financial institutions it supervises to determine if these institutions are meeting the credit needs of the community (including low and moderate income neighborhoods) which they serve.
In more serious cases, enforcement actions may include the issuance of directives to increase capital; the issuance of formal and informal agreements; the imposition of civil monetary penalties; the issuance of a cease and desist order that can be judicially enforced; the issuance of removal and prohibition orders against officers, directors, and other institution affiliated parties; the termination of the insured depository institution’s deposit insurance; the appointment of a conservator or receiver for the insured depository institution; and the enforcement of such actions through injunctions or restraining orders based upon a judicial determination that the FDIC, as receiver, would be harmed if such equitable relief was not granted.
In October 2013, the Corporation acquired FC Banc Corp. and its subsidiary, The Farmers Citizens Bank. The Bank currently operates seven full-service branch locations as FCBank, a division of the Bank, with its headquarters in Worthington, Ohio. In 2016, the Bank received regulatory approval to conduct business in the State of New York as BankOnBuffalo, a division of the Bank.
The Bank currently operates seven full-service branch locations as FCBank, a division of the Bank, with its headquarters in Worthington, Ohio. 1 Table of Contents In 2016, the Bank received regulatory approval to conduct business in the State of New York as BankOnBuffalo, a division of the Bank.
Government securities and federal funds, changes in the discount rate on member bank borrowings and changes in reserve requirements against member bank deposits. These instruments of monetary policy are used in varying combinations to influence the overall level of bank loans, investments and deposits, and the interest rates charged on loans and paid for deposits.
These instruments of monetary policy are used in varying combinations to influence the overall level of bank loans, investments and deposits, and the interest rates charged on loans and paid for deposits.
The assessment base for the special assessment is equal to an insured depository institution’s ("IDI’s") estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion, applicable either to the IDI, if an IDI is not a subsidiary of a holding company, or at the banking organization level, to the extent that an IDI is part of a holding company with one or more subsidiary IDIs. 6 Table of Contents Financial Privacy and Data Security The Corporation is subject to federal laws, including the Gramm-Leach-Bliley Act, and certain state laws containing consumer privacy protection provisions.
The assessment base for the special assessment is equal to an insured depository institution’s ("IDI’s") estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion, applicable either to the IDI, if an IDI is not a subsidiary of a holding company, or at the banking organization level, to the extent that an IDI is part of a holding company with one or more subsidiary IDIs.
Section 23B requires that all Covered Transactions and certain other transactions, including the sale of securities or other assets by the Bank to an affiliate and the payment of money or the furnishing of services by the Bank to an affiliate, be on terms comparable to those prevailing for similar transactions with nonaffiliates.
Section 23B requires that all Covered Transactions and certain other transactions, including the sale of securities or other assets by the Bank to an affiliate and the payment of money or the furnishing of services by the Bank to an affiliate, be on terms comparable to those prevailing for similar transactions with nonaffiliates. 6 Table of Contents The Bank is also subject to Sections 22(g) and 22(h) of the Federal Reserve Act, and the implementation of Regulation O issued by the Federal Reserve Board.
This location will be the first bank to open on Parade Street in over a decade. Launched in May 2023, Impressia Bank is CNB Bank’s sixth division and is dedicated to empowering women business owners and leaders.
Located on Parade Street, this location provides financial education and accessible banking to underserved communities, promoting economic empowerment, and narrowing the wealth gap. This location was the first bank to open on Parade Street in over a decade. • Launched in May 2023, Impressia Bank is CNB Bank’s sixth division and is dedicated to empowering women business owners and leaders.
One requisite element of such a plan is that the institution’s parent holding company must guarantee compliance by the institution with the plan, subject to certain limitations. At December 31, 2024, the Bank qualified as "well capitalized" under applicable regulatory capital standards.
One requisite element of such a plan is that the institution’s parent holding company must guarantee compliance by the institution with the plan, subject to certain limitations.
The Corporation is generally competitive with all competing financial institutions in its service area with respect to interest rates paid on time and savings deposits, service charges on deposit accounts, and interest rates charged on loans.
The Corporation is generally competitive with all competing financial institutions in its service area with respect to interest rates paid on time and savings deposits, service charges on deposit accounts, and interest rates charged on loans. 2 Table of Contents Supervision and Regulation The Corporation is a bank holding company that has elected financial holding company status, and the Bank is a Pennsylvania state‑chartered bank.
Through the CNB Academy, the Corporation’s learning management system, the Corporation delivers targeted learning solutions that empower employees to excel in their roles while advancing their professional growth. The Corporation’s training programs are designed to support a culture of continuous learning and career progression.
The Corporation offers a robust range of training programs tailored to meet the needs of employees across all levels and departments. Through the CNB Academy, the Corporation’s learning management system, the Corporation delivers targeted learning solutions that empower employees to excel in their roles while advancing their professional growth.
Five lunch and learns were hosted by the Corporation in 2024, with more planned for 2025. These initiatives reflect the Corporation’s dedication to fostering a financially informed and resilient community. 10 Table of Contents The Corporation continued to focus on increasing its outreach to those who have been traditionally underserved by the financial institution industry.
These initiatives are a sample of the robust financial education programs that the Corporation offered in 2025 and reflect the Corporation’s dedication to fostering a financially informed and resilient community. The Corporation continued to focus on increasing its outreach to those who have been traditionally underserved by the financial institution industry.
The federal banking agencies and the SEC proposed such regulations in 2016, and issued re-proposed regulations in substantially the same form in May 2024, which have not been finalized. If the regulations are adopted in the form proposed or a similar form, they will restrict the manner in which executive compensation is structured.
The federal banking agencies and the SEC proposed such regulations in 2016, and issued re-proposed regulations in substantially the same form in May 2024, which have not been finalized.
A change in applicable statutes, regulations or regulatory policy may have a material effect on our business. Bank Holding Company Regulation As a bank holding company that controls a Pennsylvania state-chartered bank, the Corporation is subject to regulation and examination by the Pennsylvania Department of Banking and the Federal Reserve Board.
Bank Holding Company Regulation As a bank holding company that controls a Pennsylvania state-chartered bank, the Corporation is subject to regulation and examination by the Pennsylvania Department of Banking and Securities and the Federal Reserve Board.
Accordingly, the Corporation is subject to the oversight of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") and the Pennsylvania Department of Banking and is regulated under the BHC Act, and the Bank is subject to the oversight of the Pennsylvania Department of Banking and the Federal Deposit Insurance Corporation ("FDIC"), as its primary federal regulator.
The Corporation is subject to the oversight and regulation of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") and the Pennsylvania Department of Banking and Securities under the Bank Holding Company Act ("BHC Act").
In addition to the impact of regulation, commercial banks are significantly affected by the actions of the Federal Reserve Board, including actions taken with respect to interest rates, as the Federal Reserve Board attempts to control the money supply and credit availability in the U.S. in order to influence the economy. 2 Table of Contents The following summary sets forth certain of the material elements of the regulatory framework applicable to bank holding companies and their subsidiaries and provides certain specific information about us and our subsidiaries.
In addition to the impact of regulation, commercial banks are significantly affected by the actions of the Federal Reserve Board, including actions taken with respect to interest rates, as the Federal Reserve Board attempts to control the money supply and credit availability in the U.S. in order to influence the economy.
Regulation of CNB Bank Federal and state banking laws and regulations govern, among other things, the scope of a bank’s business, the investments a bank may make, the reserves against deposits a bank must maintain, the loans a bank makes and collateral it takes, the activities of a bank with respect to mergers and acquisitions, the establishment of branches, management practices, and numerous other aspects of banking operations.
Regulation of CNB Bank Federal and state banking laws and regulations govern, among other things, the scope of a bank’s business, the investments a bank may make, the reserves against deposits a bank must maintain, the loans a bank makes and collateral it takes, the activities of a bank with respect to mergers and acquisitions, the establishment of branches, management practices, and numerous other aspects of banking operations. 3 Table of Contents Source of Strength Doctrine Under Section 616 of the Dodd-Frank Act, a bank holding company is required to serve as a source of financial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner.
It does not describe all of the provisions of the statutes, regulations and policies that are identified. To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by express reference to each of the particular statutory and regulatory provisions.
To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by express reference to each of the particular statutory and regulatory provisions. A change in applicable statutes, regulations or regulatory policy may have a material effect on our business.
BankOnBuffalo’s BankOnWheels initiative enhances financial inclusion by delivering banking services to underserved communities. By addressing disparities in access to financial resources, BankOnWheels empowers individuals and communities to fully participate in the economy.
Impressia’s mission is to close the gender funding gap and advance economic empowerment for women by offering innovative financial solutions, mentorship, and leadership development opportunities. • BankOnBuffalo’s BankOnWheels initiative enhances financial inclusion by delivering banking services to underserved communities. By addressing disparities in access to financial resources, BankOnWheels empowers individuals and communities to fully participate in the economy.
In 2023, the Bank launched Impressia Bank, a full-service banking division dedicated to the professional and financial development and advancement of women business owners and women leaders.
In 2023, the Bank launched Impressia Bank, a full-service banking division dedicated to the professional and financial development and advancement of women business owners and women leaders. This women-focused commercial bank operates within the existing geographic footprint of each of CNB Bank’s other divisions and also has an online presence.
This program must include reasonable policies and procedures to detect suspicious patterns or practices that indicate the possibility of identity theft, such as inconsistencies in personal information or changes in account activity. 3 Table of Contents Capital Adequacy The Capital Rules adopted in 2013 by the Federal Reserve Board, the FDIC, and the Office of the Comptroller of the Currency ("OCC") generally implement the Basel Committee on Banking Supervision’s capital framework, referred to as Basel III, for strengthening international capital standards.
Capital Adequacy The Capital Rules adopted in 2013 by the Federal Reserve Board, the FDIC, and the Office of the Comptroller of the Currency ("OCC") generally implement the Basel Committee on Banking Supervision’s capital framework, referred to as Basel III, for strengthening international capital standards.
FCBank, a division of the Bank, operates in the Ohio counties of Crawford, Delaware, Franklin, Knox, Marion, Morrow and Richland. BankOnBuffalo, a division of the Bank, operates in the New York counties of Erie and Niagara. Ridge View Bank, a division of the Bank, operates in the Virginia counties of Botetourt, Craig, Franklin, and Roanoke.
BankOnBuffalo, a division of the Bank, operates in the New York counties of Erie, Niagara, and Ontario. Ridge View Bank, a division of the Bank, operates in the Virginia counties of Botetourt, Craig, Franklin, New River Valley, and Roanoke. ESSA Bank, a division of the Bank, operates in the Pennsylvania counties of Delaware, Chester, Lackawanna, Lehigh, Luzerne, Monroe, and Northampton.
USA PATRIOT Act Under Title III of the USA PATRIOT Act, all financial institutions are required to take certain measures to identify their customers, prevent money laundering, monitor customer transactions, and report suspicious activity to U.S. law enforcement agencies. Financial institutions also are required to respond to requests for information from federal banking agencies and law enforcement agencies.
If the regulations are adopted in the form proposed or a similar form, they will restrict the manner in which executive compensation is structured. 7 Table of Contents USA PATRIOT Act Under Title III of the USA PATRIOT Act, all financial institutions are required to take certain measures to identify their customers, prevent money laundering, monitor customer transactions, and report suspicious activity to U.S. law enforcement agencies.
The Bank is also subject to Sections 22(g) and 22(h) of the Federal Reserve Act, and the implementation of Regulation O issued by the Federal Reserve Board. These provisions impose limitations on loans and extensions of credit by the Bank to its and its affiliates' executive officers, directors and principal shareholders and their related interests.
These provisions impose limitations on loans and extensions of credit by the Bank to its and its affiliates' executive officers, directors and principal shareholders and their related interests. The limitations restrict the terms and aggregate amount of such transactions. Regulation O also imposes certain recordkeeping and reporting requirements.
From foundational skills in client interactions to advanced leadership development, employees are equipped with the tools and knowledge to succeed in their current roles and prepare for future opportunities. Career-focused programs like the Mentoring Program, Career Path Planning, and Rising Professionals enable employees to map and achieve their long-term aspirations.
The Corporation’s training programs are designed to support a culture of continuous learning and career progression. From foundational skills in client interactions to advanced leadership development, employees are equipped with the tools and knowledge to succeed in their current roles and prepare for future opportunities.
In October 2013, the Corporation acquired FC Banc Corp. and its subsidiary, The Farmers Citizens Bank. In July 2016, the Corporation acquired Lake National Bank, and in July 2020, the Corporation acquired Bank of Akron. In addition to the Bank, the Corporation has four other subsidiaries.
In October 2013, the Corporation acquired FC Banc Corp. and its subsidiary, The Farmers Citizens Bank.
Moreover, other bills may be introduced in Congress which would further regulate, deregulate or restructure the financial services industry, including proposals to substantially reform the regulatory framework.
Moreover, other bills may be introduced in Congress which would further regulate, deregulate or restructure the financial services industry, including proposals to substantially reform the regulatory framework. It is not possible to predict whether any such proposals will be enacted into law or, even if enacted, what effect such action may have on our business and earnings.
Headquartered in Buffalo, NY, with additional team members located in Ohio and Pennsylvania, Impressia Bank provides specialized services such as SBA and grant advisory services, wealth management, and private banking. Impressia’s mission is to close the gender funding gap and advance economic empowerment for women by offering innovative financial solutions, mentorship, and leadership development opportunities.
Headquartered in Buffalo, NY, with additional team members located in Ohio and Pennsylvania, Impressia Bank provides specialized services such as SBA and grant advisory services, wealth management, and private banking.
The Bank is also subject to lending limits on loans to one borrower and regulatory guidance on concentrations of credit.
Other Federal Laws and Regulations State usury and other credit laws limit the amount of interest and various other charges collected or contracted by a bank on loans. The Bank is also subject to lending limits on loans to one borrower and regulatory guidance on concentrations of credit.
Human Capital Management and Leadership Development The Corporation firmly believes in the importance of succession planning and, as such, has in place a formal succession planning process for all named executive officers, members of the executive management team, and regional presidents.
The differences among the Corporation's Board of Directors and employees, and its customers and community members, are respected and embraced to drive innovative products, services, and solutions that effectively meet the variety of needs among the Corporation’s broad group of stakeholders. 9 Table of Contents Human Capital Management and Leadership Development The Corporation firmly believes in the importance of succession planning and, as such, has in place a formal succession planning process for all named executive officers, members of the executive management team, and regional presidents.
The base for insurance assessments is the average consolidated total assets less tangible equity capital of a financial institution. Assessment rates are calculated using formulas that take into account the risk of the institution being assessed.
Assessment rates are calculated using formulas that take into account the risk of the institution being assessed.
Governmental Policies Our earnings are significantly affected by the monetary and fiscal policies of governmental authorities, including the Federal Reserve Board. Among the instruments of monetary policy used by the Federal Reserve Board to implement these objectives are open-market operations in U.S.
Among the instruments of monetary policy used by the Federal Reserve Board to implement these objectives are open-market operations in U.S. Government securities and federal funds, changes in the discount rate on member bank borrowings and changes in reserve requirements against member bank deposits.
The Corporation’s employees actively participate in their local communities through volunteer activities in education, economic development, human and health services, and community reinvestment. During 2024, the Corporation’s employees collectively contributed 34,741 hours in voluntary support to 1,397 organizations, with 88% of employees actively participating.
The Corporation is committed to strengthening these communities through the active volunteering of its employees. The Corporation’s employees actively participate in their local communities through volunteer activities in education, economic development, human and health services, and community reinvestment.
A critical measure is the opportunity for individuals from all professional and demographic backgrounds to advance into senior leadership positions. These leaders have a greater ability to drive innovation and change and provide the Corporation with financial services expertise to ensure the Corporation benefits from the active engagement and perspectives of all groups within its workforce and communities.
These leaders have a greater ability to drive innovation and change and provide the Corporation with financial services expertise to ensure the Corporation benefits from the active engagement and perspectives of all groups within its workforce and communities. 10 Table of Contents Community Involvement and Social Impacts The Corporation serves as a cornerstone institution of both financial support and community service in the markets in which it serves.
The CNB Bank franchise's primary market areas are the Pennsylvania counties of Blair, Cambria, Centre, Clearfield, Elk, Indiana, Jefferson, and McKean. ERIEBANK, a division of the Bank, operates in the Pennsylvania counties of Crawford, Erie, and Warren and in the Ohio counties of Ashtabula, Cuyahoga, Geauga, Lake, and Lorain.
ERIEBANK, a division of the Bank, operates in the Pennsylvania counties of Crawford, Erie, and Warren and in the Ohio counties of Ashtabula, Cuyahoga, Geauga, Lake, and Lorain. FCBank, a division of the Bank, operates in the Ohio counties of Crawford, Delaware, Franklin, Knox, Marion, Morrow and Richland.
The standard maximum deposit insurance amount is $250,000 per depositor, per insured depository institution, per ownership category, in accordance with applicable FDIC regulations. The FDIC uses a risk-based assessment system that imposes insurance premiums based on a risk matrix that takes into account the bank’s capital level and supervisory rating.
Deposit Insurance and Premiums The deposits of the Bank are insured up to applicable limits per insured depositor by the FDIC. The standard maximum deposit insurance amount is $250,000 per depositor, per insured depository institution, per ownership category, in accordance with applicable FDIC regulations.
In 2024, CNB Bank partnered with twelve local schools to host seven financial reality fairs for high school students, providing hands-on experiences to help them understand budgeting, saving, and preparing for unexpected expenses. To further support financial literacy, lunch-and-learn sessions are offered regularly on topics such as saving for college, building a healthy financial mindset, and retirement planning.
In 2025, the Corporation partnered with ten schools to host five financial reality fairs for middle school and high school students, providing hands‑on experiences to help them understand budgeting, saving, and preparing for unexpected expenses.
On January 9, 2025, the Corporation and CNB Bank entered into a definitive merger agreement (the “Merger Agreement”) with ESSA Bancorp, Inc. (“ESSA”) and its subsidiary bank, ESSA Bank & Trust Company (“ESSA Bank”), pursuant to which the Corporation will acquire ESSA in an all-stock transaction.
("ESSA") and its subsidiary bank, ESSA Bank & Trust Company ("ESSA Bank"), pursuant to the definitive merger agreement (the "Merger Agreement") dated as of January 9, 2025. The Corporation’s acquisition of ESSA was an all-stock transaction.
By aligning training programs with strategic planning, the Corporation ensures employees are empowered to deliver exceptional service and contribute to organizational success. Through the Corporation’s integrated approach, it builds a resilient, innovative workforce that is prepared to adapt to industry challenges and opportunities while upholding the core values that define its institution.
Through the Corporation’s integrated approach, it builds a resilient, innovative workforce that is prepared to adapt to industry challenges and opportunities while upholding the core values that define its institution. A critical measure is the opportunity for individuals from all professional and demographic backgrounds to advance into senior leadership positions.
CRA performance evaluations are based on a four-tiered rating system: Outstanding, Satisfactory, Needs to Improve, and Substantial Noncompliance. CRA performance evaluations are considered in evaluating applications for such things as mergers, acquisitions, and applications to open branches. The Bank received a CRA rating of "Satisfactory" at its most recent CRA exam.
Because the Bank became a member bank of the Federal Reserve System effective February 12, 2026, the Federal Reserve Board is now the Bank’s primary federal regulator for CRA purposes. CRA performance evaluations are considered in evaluating applications for such things as mergers, acquisitions, and applications to open branches.
The special assessment is being collected over an eight-quarter collection period (and potentially longer), beginning with the first quarterly assessment period of 2024.
The special assessment was originally intended to be collected over an eight-quarter collection period, beginning with the first quarterly assessment period of 2024. The FDIC announced in August 2025 that the collection period will be extended for at least one more quarter.
Additionally, there were approximately $1.5 million in donations to community organizations and events within the communities the Corporation serves.
During 2025, the Corporation’s employees collectively reported service of 32,421 hours in voluntary support to 1,374 organizations, with 74% of employees actively participating. Additionally, there were approximately $1.4 million in donations, from both the Corporation and employees through internal fundraising efforts, to community organizations and events within the communities the Corporation serves.
This women-focused commercial bank operates within the existing geographic footprint of each of CNB Bank’s other divisions and also has an online presence. 1 Table of Contents The Bank had one loan production office, one drive-up office, one mobile office, and 55 full-service branch offices located in various communities in its market area at December 31, 2024.
The Bank had one loan production office, two drive-up office, one mobile office, and 75 full-service branch offices located in various communities in its market area at December 31, 2025. The CNB Bank franchise's primary market areas are the Pennsylvania counties of Blair, Cambria, Centre, Clearfield, Elk, Indiana, Jefferson, and McKean.
Subject to the terms and conditions of the Merger Agreement, which has been approved by the boards of directors of each party, ESSA will merge with and into the Corporation, with the Corporation as the surviving entity, and immediately thereafter, ESSA Bank will merge with and into the Bank, with the Bank as the surviving bank (the “Merger”).
Under the terms of the Merger Agreement, ESSA merged with and into the Corporation, with the Corporation as the surviving entity, and immediately thereafter, ESSA Bank merged with and into the Bank, with the Bank as the surviving bank. Banking offices of ESSA Bank operate under the trade name ESSA Bank, a division of CNB Bank.
CNB Securities Corporation is incorporated in Delaware and currently maintains investments in debt and equity securities. CNB Insurance Agency, incorporated in Pennsylvania, provides for the sale of nonproprietary annuities and other insurance products.
The ESSA acquisition has extended CNB Bank’s branch network into the Northeastern Region including the Lehigh Valley of Pennsylvania through the addition of ESSA’s 20 community offices. In addition to the Bank, the Corporation has four other subsidiaries. CNB Securities Corporation is incorporated in Delaware and currently maintains investments in debt and equity securities.
Removed
The transaction is currently expected to close in the third quarter of 2025, subject to customary closing conditions, including the receipt of regulatory approvals and approvals by the shareholders of ESSA and the Corporation.
Added
In July 2016, the Corporation acquired Lake National Bank, and in July 2020, the Corporation acquired Bank of Akron. On July 23, 2025, the Corporation completed its previously announced acquisition of ESSA Bancorp, Inc.
Removed
Supervision and Regulation The Corporation is a bank holding company that has elected financial holding company status, and the Bank is a Pennsylvania state-chartered bank that is not a member of the Federal Reserve System.
Added
The total consideration paid to ESSA shareholders was approximately $202.6 million, comprised of approximately 8,359,430 shares of the Corporation's common stock, valued at approximately $202.5 million based on the July 23, 2025 closing price of $24.23 per share of the Corporation's common stock, and $21 thousand in cash in lieu of fractional shares.
Removed
Source of Strength Doctrine Under Section 616 of the Dodd-Frank Act, a bank holding company is required to serve as a source of financial strength to its subsidiary banks and may not conduct its operations in an unsafe or unsound manner.
Added
In 2025, the Corporation acquired ESSA Bancorp, Inc., and its subsidiary, ESSA Bank & Trust Company. The Bank currently operates twenty full-service branch locations as ESSA Bank, a division of the Bank, with its headquarters in Stroudsburg, Pennsylvania.
Removed
The FDIC, along with other federal bank regulators, published in October 2023 substantially updated regulations regarding CRA, as well as some amendments to this final rule in March 2024, which became effective on April 1, 2024, with various phase-in periods.
Added
Prior to February 12, 2026, the Bank was a Pennsylvania state‑chartered, non‑member bank supervised by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corporation ("FDIC") as its primary federal regulator. Effective February 12, 2026, the Bank became a member bank of the Federal Reserve System, and its primary federal regulator is now the Federal Reserve Board.
Removed
The limitations restrict the terms and aggregate amount of such transactions. Regulation O also imposes certain recordkeeping and reporting requirements. Deposit Insurance and Premiums The deposits of the Bank are insured up to applicable limits per insured depositor by the FDIC.
Added
Therefore, the Bank remains a Pennsylvania state-chartered bank and continues to be subject to oversight by the Pennsylvania Department of Banking and Securities, but it is now a member bank with the Federal Reserve Board as its primary federal regulator, instead of the FDIC.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny of the foregoing provisions may have the effect of deterring takeovers or delaying changes in control or management of the Corporation. The price of the Corporation’s common stock may fluctuate significantly, and this may make it difficult for you to resell shares of common stock owned by you at times or at prices you find attractive.
Biggest changeThe price of the Corporation’s common stock may fluctuate significantly, and this may make it difficult for you to resell shares of common stock owned by you at times or at prices you find attractive. The price of the Corporation’s common stock on the Global Select Market of The NASDAQ Stock Market LLC ("NASDAQ") constantly changes.
Periodically, the Corporation utilizes term borrowings from the Federal Home Loan Bank (the "FHLB") of Pittsburgh, of which the Bank is a member, and other lenders to meet funding obligations. In addition, the Bank also maintains borrowing capacity with the Federal Reserve Bank of Philadelphia.
Periodically, the Corporation utilizes term borrowings from the Federal Home Loan Bank (the "FHLB") of Pittsburgh, of which the Bank is a member, and other lenders to meet funding obligations. In addition, the Bank also maintains borrowing capacity with the Federal Reserve Bank of Philadelphia (the "Federal Reserve Bank").
The Corporation’s success is dependent to a significant extent upon general economic conditions in the United States and, in particular, the local economies in Central and Northwest Pennsylvania, Central and Northeast Ohio, Western New York and Southwest Virginia - the primary markets served by the Bank.
The Corporation’s success is dependent to a significant extent upon general economic conditions in the United States and, in particular, the local economies in Central, Northeast and Northwest Pennsylvania, Central and Northeast Ohio, Western New York and Southwest Virginia - the primary markets served by the Bank.
If sustained or repeated, a system failure or service denial could result in a deterioration of our ability to process new and renewal loans, gather deposits and provide customer service, compromise our ability to operate effectively, damage our reputation, result in a loss of customer business and subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations. 18 Table of Contents A failure in or breach of the Corporation’s or any of its subsidiaries’ information technology network and systems, or those of third party vendors and other service providers, including as a result of cyber attacks, could disrupt the Corporation’s or any of its subsidiaries’ businesses, result in the unauthorized disclosure or misuse of confidential or proprietary information, damage its reputation, increase its costs, and/or cause losses.
If sustained or repeated, a system failure or service denial could result in a deterioration of our ability to process new and renewal loans, gather deposits and provide customer service, compromise our ability to operate effectively, damage our reputation, result in a loss of customer business and subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations. 19 Table of Contents A failure in or breach of the Corporation’s or any of its subsidiaries’ information technology network and systems, or those of third party vendors and other service providers, including as a result of cyber attacks, could disrupt the Corporation’s or any of its subsidiaries’ businesses, result in the unauthorized disclosure or misuse of confidential or proprietary information, damage its reputation, increase its costs, and/or cause losses.
Moreover, as cyber attacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as adequate for our operations. Further information relating to cybersecurity risk management is discussed in Item 1C. “Cybersecurity” of this report.
Moreover, as cyber attacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as adequate for our operations. Further information relating to cybersecurity risk management is discussed in Item 1C. "Cybersecurity" of this report.
The financial services industry is undergoing rapid technological change, and technological advances, including those related to artificial intelligence, are likely to intensify competition. In addition to improving customer services, effective use of technology increases efficiency and enables financial institutions to reduce costs.
The financial services industry is undergoing rapid technological change, and technological advances, including those related to artificial intelligence ("AI"), are likely to intensify competition. In addition to improving customer services, effective use of technology increases efficiency and enables financial institutions to reduce costs.
Furthermore, increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm the Corporation. 19 Table of Contents While we have purchased cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any incurred losses.
Furthermore, increased regulation of data collection, use and retention practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws, could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm the Corporation. 20 Table of Contents While we have purchased cybersecurity insurance, there are no assurances that the coverage would be adequate in relation to any incurred losses.
Changes in economic conditions, including consumer savings habits and availability of or access to capital, could potentially have a significant impact on the Bank’s liquidity position, which in turn could materially impact the Corporation’s financial condition, results of operations and cash flows. 12 Table of Contents Credit and Interest Rate Risks The Bank’s allowance for credit losses may not be adequate to cover loan losses which could have a material adverse effect on the Corporation’s business, financial condition and results of operations.
Changes in economic conditions, including consumer savings habits and availability of or access to capital, could potentially have a significant impact on the Bank’s liquidity position, which in turn could materially impact the Corporation’s financial condition, results of operations and cash flows. 13 Table of Contents Credit and Interest Rate Risks The Bank’s allowance for credit losses may not be adequate to cover loan losses which could have a material adverse effect on the Corporation’s business, financial condition and results of operations.
This impact could lead to decreased loan demand and increase the number of borrowers who fail to pay the Bank interest or principal on their loans, and accordingly, could have a material adverse effect on the Corporation’s business, financial condition, results of operations, or liquidity. 16 Table of Contents Severe weather, flooding and other effects of climate change and other natural disasters, such as earthquakes, could adversely affect our financial condition, results of operations or liquidity.
This impact could lead to decreased loan demand and increase the number of borrowers who fail to pay the Bank interest or principal on their loans, and accordingly, could have a material adverse effect on the Corporation’s business, financial condition, results of operations, or liquidity. 17 Table of Contents Severe weather, flooding and other effects of climate change and other natural disasters, such as earthquakes, could adversely affect our financial condition, results of operations or liquidity.
Failure to keep pace with technological change affecting the financial services industry could have a material adverse effect on the Corporation's financial condition, results of operations, or liquidity. 17 Table of Contents Many regional, national, and international competitors have far greater assets and capitalization than the Corporation has and greater resources to invest in technology and access to capital markets and can consequently offer a broader array of financial services than the Corporation can.
Failure to keep pace with technological change affecting the financial services industry could have a material adverse effect on the Corporation's financial condition, results of operations, or liquidity. 18 Table of Contents Many regional, national, and international competitors have far greater assets and capitalization than the Corporation has and greater resources to invest in technology and access to capital markets and can consequently offer a broader array of financial services than the Corporation can.
This relationship, commonly known as the net interest margin, is susceptible to significant fluctuation and is affected by economic and competitive factors that influence the yields and rates, and the volume and mix of the Bank’s interest earning assets and interest bearing liabilities. 13 Table of Contents Interest rate risk can be defined as the sensitivity of net interest income and of the market value of financial instruments to the direction and frequency of changes in interest rates.
This relationship, commonly known as the net interest margin, is susceptible to significant fluctuation and is affected by economic and competitive factors that influence the yields and rates, and the volume and mix of the Bank’s interest earning assets and interest bearing liabilities. 14 Table of Contents Interest rate risk can be defined as the sensitivity of net interest income and of the market value of financial instruments to the direction and frequency of changes in interest rates.
The following risks together with all of the other information in this Annual Report on Form 10-K should be considered. 11 Table of Contents Economic Risks Economic conditions could adversely affect our business and financial results. The Corporation’s financial condition and results of operations are impacted by global markets and economic conditions over which the Corporation has no control.
The following risks together with all of the other information in this Annual Report on Form 10-K should be considered. 12 Table of Contents Economic Risks Economic conditions could adversely affect our business and financial results. The Corporation’s financial condition and results of operations are impacted by global markets and economic conditions over which the Corporation has no control.
The Corporation expects that the market price of its common stock will continue to fluctuate, and the Corporation cannot give you any assurances regarding any trends in the market prices for its common stock. 15 Table of Contents The Corporation’s stock price may fluctuate as a result of a variety of factors, many of which are beyond its control.
The Corporation expects that the market price of its common stock will continue to fluctuate, and the Corporation cannot give you any assurances regarding any trends in the market prices for its common stock. 16 Table of Contents The Corporation’s stock price may fluctuate as a result of a variety of factors, many of which are beyond its control.
The Corporation cannot assure you, however, that the FHLB system will be able to meet these obligations. 14 Table of Contents The Bank could be held responsible for environmental liabilities relating to properties acquired through foreclosure, resulting in significant financial loss.
The Corporation cannot assure you, however, that the FHLB system will be able to meet these obligations. 15 Table of Contents The Bank could be held responsible for environmental liabilities relating to properties acquired through foreclosure, resulting in significant financial loss.
Artificial intelligence technologies are susceptible to errors and other malfunctions which could lead to operational challenges and reputational risks. In addition, we may be subject to increasing regulations related to our use of artificial intelligence, including regulations related to privacy, data security, and intellectual property rights, which could expose us to legal risks.
AI technologies are susceptible to errors and other malfunctions which could lead to operational challenges and reputational risks. In addition, we may be subject to increasing regulations related to our use of AI, including regulations related to privacy, data security, and intellectual property rights, which could expose us to legal risks.
They could also cause a reduction in demand for lending or other services that we provide. Our use of artificial intelligence could expose us to various risks. We have begun to utilize artificial intelligence technologies in various aspects of our business, including internal training material creation.
They could also cause a reduction in demand for lending or other services that we provide. Our use of AI could expose us to various risks. We have begun to utilize AI technologies in various aspects of our business, including internal training material creation.
If conditions or circumstances arise that expose flaws or gaps in the Corporation's risk-management program, or if its controls break down, the Corporation's results of operations and financial condition may be adversely affected.
If conditions or circumstances arise that expose flaws or gaps in the Corporation's risk-management program, or if its controls break down, the Corporation's results of operations and financial condition may be adversely affected. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 22 Table of Contents
Such changes could subject it to additional costs, limit the types of financial services and products the Corporation may offer, and/or limit the pricing it may charge on certain banking services, among other things. 20 Table of Contents Failure to comply with laws, including the Bank Secrecy Act and USA Patriot Act, regulations or policies could result in sanctions by regulatory agencies, restrictions, civil money penalties and/or reputation damage, which could have a material adverse effect on the Corporation’s business, financial condition and results of operations and/or cause the Corporation to lose its financial holding company status.
Failure to comply with laws, including the Bank Secrecy Act and USA Patriot Act, regulations or policies could result in sanctions by regulatory agencies, restrictions, civil money penalties and/or reputation damage, which could have a material adverse effect on the Corporation’s business, financial condition and results of operations and/or cause the Corporation to lose its financial holding company status.
The Corporation’s bylaws, as amended and restated, provide for the division of the Corporation’s Board of Directors into three classes of directors, with each serving staggered terms.
The Corporation’s bylaws, as amended and restated, provide for the division of the Corporation’s Board of Directors into three classes of directors, with each serving staggered terms. Any of the foregoing provisions may have the effect of deterring takeovers or delaying changes in control or management of the Corporation.
While the Corporation has policies and procedures designed to prevent any such violations, there can be no assurance that such violations will not occur. See the section captioned "Supervision and Regulation" in Part I, Item 1 of this report for further information.
While the Corporation has policies and procedures designed to prevent any such violations, there can be no assurance that such violations will not occur. 21 Table of Contents As a result of our merger with ESSA, the Bank agreed to and assumed all obligations under the ESSA Consent Order.
Removed
In addition, any amendment to the Corporation’s bylaws must be approved by the affirmative vote of a majority of the votes cast by all shareholders entitled to vote thereon and, if any shareholders are entitled to vote thereon as a class, upon receiving the affirmative vote of a majority of the votes cast by the shareholders entitled to vote as a class.
Added
Further, adoption of AI tools by us or by third parties may pose new cybersecurity challenges. Threat actors may use AI tools to automate and enhance cybersecurity attacks against us.
Removed
The price of the Corporation’s common stock on the Global Select Market of The NASDAQ Stock Market LLC ("NASDAQ") constantly changes.
Added
We use software and platforms designed to detect such cybersecurity threats, including AI-based tools, but these threats could become more sophisticated and harder to detect and counteract, which may pose significant risks to our data security and systems.
Removed
Further, new technologies such as artificial intelligence may be more capable at evading these safeguard measures.
Added
Such changes could subject it to additional costs, limit the types of financial services and products the Corporation may offer, and/or limit the pricing it may charge on certain banking services, among other things.
Removed
As of December 31, 2024, the Corporation has not experienced any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents or threats, that have materially affected the business strategy, results of operations or financial condition of the Corporation.
Added
We could incur unanticipated costs and expenses to achieve compliance with the ESSA Consent Order. Actions taken to achieve compliance with the ESSA Consent Order may affect our business or financial performance and may require us to reallocate resources away from existing business or to undertake significant changes to our business, operations, products and services and risk management practices.
Removed
However, there can be no assurance that the Corporation or its subsidiaries will remain unaffected in the future.
Added
In addition, although the ESSA Consent Order resolved all claims by the United States of America against ESSA Bank, we could be subject to other enforcement actions relating to the alleged violations resolved by the ESSA Consent Order. See the section captioned "Supervision and Regulation" in Part I, Item 1 of this report for further information.
Removed
Risks Related to the Merger with ESSA The market price of the Corporation’s common stock may decline as a result of the Merger and the market price of the Corporation’s common stock after the consummation of the Merger may be affected by factors different from those affecting the price of the Corporation’s common stock before the Merger.
Removed
The market price of the Corporation’s common stock may decline as a result of the Merger if the Corporation does not achieve the perceived benefits of the Merger or the effect of the Merger on the Corporation’s financial results is not consistent with the expectations of financial or industry analysts.
Removed
In addition, the consummation of the Merger will result in the combination of two companies that currently operate as independent companies. The business of the Corporation and the business of ESSA differ. As a result, while the Corporation expects to benefit from certain synergies following the Merger, the Corporation may also encounter new risks and liabilities associated with these differences.
Removed
Following the Merger, shareholders of the Corporation and ESSA will own interests in a combined company operating an expanded business and may not wish to continue to invest in the Corporation, or for other reasons may wish to dispose of some or all of their shares of the Corporation’s common stock.
Removed
If, following the effective time of the Merger, large amounts of the Corporation’s common stock are sold, the price of the Corporation’s common stock could decline. 21 Table of Contents Further, the results of operations of the Corporation and the market price of the Corporation’s common stock after the Merger may be affected by factors different from those currently affecting the independent results of operations of each of the Corporation and ESSA and the market price of the Corporation’s common stock.
Removed
Accordingly, the Corporation’s historical market prices and financial results may not be indicative of these matters for the Corporation after the Merger. The Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed.
Removed
The Corporation and ESSA can mutually agree to terminate the Merger Agreement at any time before the Merger has been completed, and either company can terminate the Merger Agreement if: • any regulatory approval required for consummation of the Merger and the other transactions contemplated by the Merger Agreement has been denied by final, nonappealable action of any regulatory authority, or an application for regulatory approval has been permanently withdrawn at the request of a governmental authority; • the required approval of the issuance of common stock of the Corporation in connection with the Merger by the Corporation’s shareholders or the required approval of the Merger Agreement by the ESSA shareholders are not obtained; • the other party materially breaches any of its representations, warranties, covenants or other agreements set forth in the Merger Agreement (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the Merger Agreement), which breach is not cured within 30 days of written notice of the breach, or by its nature cannot be cured prior to the closing of the Merger, and such breach would entitle the non-breaching party not to consummate the Merger; or • the Merger is not consummated by January 9, 2026, unless the failure to consummate the Merger by such date is due to a material breach of the Merger Agreement by the terminating party.
Removed
In addition, the Corporation may terminate the Merger Agreement if: • ESSA breaches the non-solicitation provisions in the Merger Agreement; or • the ESSA Board of Directors: ◦ fails to recommend approval of the Merger Agreement, or withdraws, modifies or changes such recommendation in a manner adverse to the Corporation’s interests; or ◦ recommends, proposes or publicly announces its intention to recommend or propose to engage in an acquisition transaction with any person other than the Corporation or any of its subsidiaries; or • ESSA fails to call, give notice of, convene and hold its special meeting.
Removed
ESSA may terminate the Merger Agreement, subject to its compliance with the Merger Agreement, if ESSA has received an acquisition proposal, and the ESSA Board of Directors has made a determination that such proposal is a superior proposal and has determined to accept such proposal.
Removed
Failure to complete the Merger could negatively impact the stock price of the Corporation and its future business and financial results. Completion of the Merger is subject to the satisfaction or waiver of a number of conditions, including approval by ESSA shareholders of the Merger.
Removed
The Corporation cannot guarantee when or if these conditions will be satisfied or that the Merger will be successfully completed. The consummation of the Merger may be delayed, the Merger may be consummated on terms different than those contemplated by the Merger Agreement, or the Merger may not be consummated at all.
Removed
If the Merger is not completed, the ongoing business of the Corporation may be adversely affected, and the Corporation will be subject to several risks, including the following: • the Corporation could incur substantial costs relating to the proposed Merger, such as legal, accounting, financial advisor, filing, printing and mailing fees; and • the Corporation’s management and employees’ attention may be diverted from their day-to-day business and operational matters as a result of efforts relating to the attempt to consummate the Merger. 22 Table of Contents In addition, if the Merger is not completed, the Corporation may experience negative reactions from the financial markets and from its customers and employees.
Removed
The Corporation also could be subject to litigation related to any failure to complete the Merger or to enforcement proceedings commenced against the Corporation to perform its obligations under the Merger Agreement.
Removed
If the Merger is not completed, the Corporation cannot assure its stockholders that the risks described above will not materialize and will not materially affect the Corporation’s business and financial results or the stock price of the Corporation.
Removed
The integration of the Corporation and ESSA will present significant challenges and expenses that may result in the combined business not operating as effectively as expected, or in the failure to achieve some or all of the anticipated benefits of the transaction.
Removed
The benefits and synergies expected to result from the proposed Merger will depend in part on whether the operations of ESSA can be integrated in a timely and efficient manner with those of the Corporation.
Removed
The Corporation will face challenges and costs in consolidating its functions with those of ESSA, and integrating the organizations, procedures and operations of the two businesses. The integration of the Corporation and ESSA will be complex and time-consuming, and the management of both companies will have to dedicate substantial time and resources to it.
Removed
These efforts could divert management’s focus and resources from serving existing customers or other strategic opportunities and from day-to-day operational matters during the integration process.
Removed
Failure to successfully integrate the operations of the Corporation and ESSA could result in the failure to achieve some of the anticipated benefits from the transaction, including cost savings and other operating efficiencies, and the Corporation may not be able to capitalize on the existing relationships of ESSA to the extent anticipated, or it may take longer, or be more difficult or expensive than expected to achieve these goals.
Removed
This could have an adverse effect on the business, results of operations, financial condition or prospects of the Corporation and/or the Bank after the transaction. ITEM 1B. UNRESOLVED STAFF COMMENTS None.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+0 added−0 removed13 unchanged
Biggest changeManagement has not identified risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Corporation, including its business strategy, results of operations or financial condition.
Biggest changeAs of December 31, 2025, the Corporation has not experienced any known instances of material cybersecurity threats, including known third party provider incidents, during any of the prior three fiscal years that have materially affected the business strategy, results of operations or financial condition of the Corporation.
The risk of cybersecurity threats is integrated into the Corporation’s Enterprise Risk Management (“ERM”) program, led by the Corporation’s Chief Risk Officer. The ERM program includes an annual risk prioritization process to identify key enterprise risks. Each key risk is assigned a risk owner to establish action plans and implement risk mitigation strategies.
The risk of cybersecurity threats is integrated into the Corporation’s Enterprise Risk Management ("ERM") program, led by the Corporation’s Chief Risk Officer. The ERM program includes an annual risk prioritization process to identify key enterprise risks. Each key risk is assigned a risk owner to establish action plans and implement risk mitigation strategies.
The Corporation maintains a Cybersecurity Incident Response Plan (the “CSIRP”), which establishes an organizational framework and guidelines intended to facilitate an effective response and handling of cybersecurity incidents that could jeopardize the availability, integrity, or confidentiality of the Corporation’s assets.
The Corporation maintains a Cybersecurity Incident Response Plan (the "CSIRP"), which establishes an organizational framework and guidelines intended to facilitate an effective response and handling of cybersecurity incidents that could jeopardize the availability, integrity, or confidentiality of the Corporation’s assets.
While the particular personnel assigned to an incident response team will depend on the particular facts and circumstances, the CITSO and the VP of Information Security primarily lead these efforts. 23 Table of Contents The Corporation works closely with its internal auditors to assess, identify, and manage cybersecurity risks.
While the particular personnel assigned to an incident response team will depend on the particular facts and circumstances, the CITSO and the VP of Information Security primarily lead these efforts. The Corporation works closely with its internal auditors to assess, identify, and manage cybersecurity risks.
ITEM 1C. CYBERSECURITY Risk Management and Strategy The Corporation maintains robust processes for assessing, identifying, and managing material risks from cybersecurity threats. The Corporation’s cybersecurity program is based on the Federal Financial Institutions Examination Council (“FFIEC”) framework which tailors the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework to be more financial services focused.
ITEM 1C. CYBERSECURITY Risk Management and Strategy The Corporation maintains robust processes for assessing, identifying, and managing material risks from cybersecurity threats. The Corporation’s cybersecurity program is based on the Federal Financial Institutions Examination Council ("FFIEC") framework which tailors the National Institute of Standards and Technology ("NIST") Cybersecurity Framework to be more financial services focused.
The Corporation’s cybersecurity threat risk action plan is managed at the enterprise level by the Chief Information Technology & Security Officer (the “CITSO”), the VP of Information Technology, and the VP of Information Security.
The Corporation’s cybersecurity threat risk action plan is managed at the enterprise level by the Chief Information Technology & Security Officer (the "CITSO"), the VP of Information Technology, and the VP of Information Security.
In addition, although the Corporation maintains cybersecurity insurance to provide some coverage for certain risks arising out of data and network breaches, there can be no assurance that the Corporation’ cybersecurity insurance coverage will be sufficient in the event of a cyber attack. See “Item 1A. Risk Factors” above for more information.
In addition, although the Corporation maintains cybersecurity insurance to provide some coverage for certain risks arising out of data and network breaches, there can be no assurance that the Corporation’ cybersecurity insurance coverage will be sufficient in the event of a cyber attack. See "Item 1A. Risk Factors" above for more information.
Several members of the Board of Directors, including the Chairperson of the Audit Committee, also have cybersecurity experience. As described above, management is actively involved in assessing and managing the Bank’s material cybersecurity risks.
Several members of the Board of Directors, including the Chairperson of the Audit Committee, also have cybersecurity experience. 23 Table of Contents As described above, management is actively involved in assessing and managing the Bank’s material cybersecurity risks.
He holds a bachelor’s degree in information technology and has worked in the technology field for 29 years with 17 of those years in a financial institution in various technology management, security, and audit roles.
He holds a bachelor’s degree in information technology and has worked in the technology field for 30 years with 18 of those years in a financial institution in various technology management, security, and audit roles.
However, there can be no assurance that the Corporation’s security efforts and measures will be effective or that attempted security incidents or disruptions would not be successful or damaging.
However, there can be no assurance that the Corporation’s security efforts and measures or those of our third-party providers will be effective or that attempted security incidents or disruptions would not be successful or damaging.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThere are no encumbrances on the offices owned and the rental expense on the leased property is immaterial in relation to operating expenses. The initial lease terms range from one to twenty years. 24 Table of Contents
Biggest changeImpressia Bank, a division of the Bank, operates in the Bank’s primary market areas. There are no encumbrances on the offices owned and the rental expense on the leased property is immaterial in relation to operating expenses. The initial lease terms range from one to twenty years.
ITEM 2. PROPERTIES The headquarters of the Corporation and the Bank are located at 1 South Second Street, Clearfield, Pennsylvania, in a building owned by the Corporation. The Bank operates 55 full-service offices at December 31, 2024. Of these 55 offices, 29 are owned and 25 are leased from independent owners and one is leased from the Corporation.
ITEM 2. PROPERTIES The headquarters of the Corporation and the Bank are located at 1 South Second Street, Clearfield, Pennsylvania, in a building owned by the Corporation. The Bank operates 75 full-service offices at December 31, 2025. Of these 75 offices, 39 are owned and 35 are leased from independent owners and one is leased from the Corporation.
BankOnBuffalo, a division of the Bank, operates in the New York counties of Erie, Niagara, and Ontario. Ridge View Bank, a division of the Bank, operates in the Virginia counties of Botetourt, Craig, Franklin, Montgomery, and Roanoke. Impressia Bank, a division of the Bank, operates in the Bank’s primary market areas.
BankOnBuffalo, a division of the Bank, operates in the New York counties of Erie, Niagara, and Ontario. Ridge View Bank, a division of the Bank, operates in the Virginia counties of Botetourt, Craig, Franklin, Montgomery, and Roanoke. ESSA Bank, a division of the Bank, operates in the Pennsylvania counties of Delaware, Chester, Lackawanna, Lehigh, Luzerne, Monroe, and Northampton.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS There are no material pending legal proceedings to which the Corporation or any of its subsidiaries is a party, or of which any of their properties is the subject, except ordinary routine proceedings which are incidental to the business. ITEM 4. MINE SAFETY DISCLOSURES None. 25 Table of Contents PART II.
Biggest changeITEM 3. LEGAL PROCEEDINGS There are no material pending legal proceedings to which the Corporation or any of its subsidiaries is a party, or of which any of their properties is the subject, except ordinary routine proceedings which are incidental to the business. ITEM 4. MINE SAFETY DISCLOSURES None. 24 Table of Contents PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or approximate dollar value) of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1 – 31, 2024 — $ — — 500,000 November 1 – 30, 2024 — — — 500,000 December 1 – 31, 2024 — — — 500,000 Total — $ — — 500,000 (1) On June 12, 2024, the Corporation received acknowledgement from the Federal Reserve of the Corporation’s 2024 Common Share Repurchase Program (the "2024 Plan").
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Common Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) October 1 – 31, 2025 — $ — — 500,000 November 1 – 30, 2025 — — — 500,000 December 1 – 31, 2025 — — — 500,000 Total — $ — — 500,000 (1) The Company's 2024 Common Share Repurchase Program expired on May 14, 2025.
Issuer Purchases of Equity Securities The following table provides information with respect to any purchase of shares of the Corporation’s common stock made by or on behalf of the Corporation for the quarter ended December 31, 2024.
Issuer Purchases of Equity Securities The following table provides information with respect to any purchase of shares of the Corporation’s common stock made by or on behalf of the Corporation for the quarter ended December 31, 2025.
The amount of any future dividends will depend on economic and market conditions, the Corporation's financial condition and operating results and other factors, including applicable government regulations and policies. 26 Table of Contents Share Return Performance Set forth below is a chart comparing the Corporation’s cumulative return to stockholders against the cumulative return of the NASDAQ Composite Index and a peer group index of banking organizations for the five-year period commencing December 31, 2019 and ending December 31, 2024.
The amount of any future dividends will depend on economic and market conditions, the Corporation's financial condition and operating results and other factors, including applicable government regulations and policies. 25 Table of Contents Share Return Performance Set forth below is a chart comparing the Corporation’s cumulative return to stockholders against the cumulative return of the NASDAQ Composite Index and a peer group index of banking organizations for the five-year period commencing December 31, 2020 and ending December 31, 2025.
Pursuant to the 2024 Plan, repurchase of common stock, if any, are authorized to be made during the period beginning on June 12, 2024 (the date on which the Corporation received acknowledgement from the Federal Reserve Bank) through and including May 14, 2025, through open market purchases, privately negotiated transactions or in such other manner as will comply with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, subject to compliance with any material agreement to which the Corporation is a party.
Pursuant to the Plan, repurchases of common stock, if any, are authorized to be made during the period beginning on June 23, 2025 (the date on which the Corporation received acknowledgement from the Federal Reserve Bank) through and including June 10, 2026, through open market purchases, privately negotiated transactions or in such other manner as will comply with the provisions of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder, subject to compliance with any material agreement to which the Corporation is a party.
The Corporation’s Board of Directors previously approved the 2024 Plan, subject to the Federal Reserve Bank's response, authorizing the repurchase from time to time by the Corporation of up to 500,000 shares of the Corporation’s common stock, provided that the aggregate purchase price of shares of common stock repurchased does not exceed $15,000,000.
The Corporation's Board of Directors previously approved the Plan, subject to the Federal Reserve Bank's response, authorizing the repurchase from time to time by the Corporation of up to 500,000 shares of the Corporation's common stock, no par value per share, provided that the aggregate purchase price of shares of common stock repurchased does not exceed $15,000,000.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Global Select Market of NASDAQ under the symbol "CCNE." As of December 31, 2024, the number of shareholders of record of the Corporation’s common stock was 8,461.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Global Select Market of NASDAQ under the symbol "CCNE." As of December 31, 2025, the number of shareholders of record of the Corporation’s common stock was 14,185.
Additionally, during the quarter ended December 31, 2024, certain employees surrendered shares of common stock owned by them to satisfy their statutory minimum U.S. federal and state tax obligations associated with the vesting of shares of restricted common stock issued under the CNB Financial Corporation 2019 Omnibus Incentive Plan.
As of December 31, 2025, there were 500,000 shares remaining for repurchase under the Plan Additionally, during the quarter ended December 31, 2025, certain employees surrendered shares of common stock owned by them to satisfy their statutory minimum U.S. federal and state tax obligations associated with the vesting of shares of restricted common stock issued under the CNB Financial Corporation 2025 Omnibus Incentive Plan.
Depending on market conditions and other factors, these repurchases may be commenced or suspended without prior notice. As of December 31, 2024, there were 500,000 shares remaining for repurchase under the 2024 Plan.
Depending on market conditions and other factors, these repurchases may be commenced or suspended without prior notice.
Removed
CNB Financial Corporation Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 CNB Financial Corporation 100.00 67.42 86.27 79.58 78.30 88.96 NASDAQ Composite Index 100.00 144.92 177.06 119.45 172.77 223.87 KBW NASDAQ Bank Index 100.00 89.69 124.06 97.52 96.65 132.60 Source: S&P Global Market Intelligence © 2025 ITEM 6. RESERVED 27 Table of Contents
Added
On June 23, 2025, the Corporation received acknowledgement from the Federal Reserve Bank of the Corporation's 2025 Common Share Repurchase Program (the "Plan").
Added
CNB Financial Corporation Period Ending Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 CNB Financial Corporation 100.00 127.96 118.04 116.14 131.95 143.01 NASDAQ Composite Index 100.00 122.18 82.43 119.22 154.48 187.14 KBW NASDAQ Bank Index 100.00 138.33 108.73 107.76 147.85 196.00 Source: S&P Global Market Intelligence © 2026 ITEM 6. RESERVED

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDecember 31, December 31, 2024 2023 Calculation of tangible book value per common share and tangible common equity / tangible assets (non-GAAP): Shareholders' equity $ 610,695 $ 571,247 Less: preferred equity 57,785 57,785 Common shareholders' equity 552,910 513,462 Less: goodwill and other intangibles 43,874 43,874 Less: core deposit intangible 206 280 Tangible common equity (non-GAAP) $ 508,830 $ 469,308 Total assets $ 6,192,010 $ 5,752,957 Less: goodwill and other intangibles 43,874 43,874 Less: core deposit intangible 206 280 Tangible assets (non-GAAP) $ 6,147,930 $ 5,708,803 Ending shares outstanding 20,987,992 20,896,439 Book value per common share (GAAP) $ 26.34 $ 24.57 Tangible book value per common share (non-GAAP) $ 24.24 $ 22.46 Common shareholders' equity / Total assets (GAAP) 8.93 % 8.93 % Tangible common equity / Tangible assets (non-GAAP) 8.28 % 8.22 % 52 Table of Contents Years Ended December 31, 2024 2023 Calculation of net interest margin: Interest income $ 325,470 $ 293,696 Interest expense 138,001 103,867 Net interest income $ 187,469 $ 189,829 Average total earning assets $ 5,499,187 $ 5,232,117 Net interest margin (GAAP) 3.41 % 3.63 % Calculation of net interest margin (fully tax equivalent basis) (non-GAAP): Interest income $ 325,470 $ 293,696 Tax equivalent adjustment (non-GAAP) 955 997 Adjusted interest income (fully tax equivalent basis) (non-GAAP) 326,425 294,693 Interest expense 138,001 103,867 Net interest income (fully tax equivalent basis) (non-GAAP) $ 188,424 $ 190,826 Average total earning assets $ 5,499,187 $ 5,232,117 Less: average mark to market adjustment on investments (non-GAAP) (53,087) (61,089) Adjusted average total earning assets, net of mark to market (non-GAAP) $ 5,552,274 $ 5,293,206 Net interest margin, fully tax equivalent basis (non-GAAP) 3.39 % 3.61 % Years Ended December 31, 2024 2023 Calculation of PPNR (non-GAAP): (1) Net interest income $ 187,469 $ 189,829 Add: Non-interest income 39,114 33,335 Less: Non-interest expense 150,002 145,342 PPNR (non-GAAP) $ 76,581 $ 77,822 (1) Management believes that this is an important metric as it illustrates the underlying performance of the Corporation, it enables investors and others to assess the Corporation's ability to generate capital to cover credit losses through the credit cycle and provides consistent reporting with a key metric used by bank regulatory agencies. 53 Table of Contents Years Ended December 31, 2024 2023 Calculation of efficiency ratio: Non-interest expense $ 150,002 $ 145,342 Non-interest income $ 39,114 $ 33,335 Net interest income 187,469 189,829 Total revenue $ 226,583 $ 223,164 Efficiency ratio 66.20 % 65.13 % Calculation of efficiency ratio (fully tax equivalent basis) (non-GAAP): Non-interest expense $ 150,002 $ 145,342 Less: core deposit intangible amortization 73 84 Adjusted non-interest expense (non-GAAP) $ 149,929 $ 145,258 Non-interest income $ 39,114 $ 33,335 Net interest income 187,469 189,829 Less: tax exempt investment and loan income, net of TEFRA (non-GAAP) 5,635 5,425 Add: tax exempt investment and loan income (fully tax equivalent basis) (non-GAAP) 8,068 7,635 Adjusted net interest income (fully tax equivalent basis) (non-GAAP) 189,902 192,039 Adjusted net revenue (fully tax equivalent basis) (non-GAAP) $ 229,016 $ 225,374 Efficiency ratio (fully tax equivalent basis) (non-GAAP) 65.47 % 64.45 % Years Ended December 31, 2024 2023 Calculation of return on average tangible common equity (non-GAAP): Net income $ 54,575 $ 58,020 Less: preferred stock dividends 4,302 4,302 Net income available to common shareholders $ 50,273 $ 53,718 Average shareholders' equity $ 592,550 $ 550,333 Less: average goodwill & intangibles 44,118 44,193 Less: average preferred equity 57,785 57,785 Tangible common shareholders' equity (non-GAAP) $ 490,647 $ 448,355 Return on average equity (GAAP) 9.21 % 10.54 % Return on average common equity (GAAP) 9.40 % 10.91 % Return on average tangible common equity (non-GAAP) 10.25 % 11.98 % 54 Table of Contents
Biggest changeYears Ended December 31, 2025 2024 Calculation of PPNR (non-GAAP): (1) Net interest income $ 242,036 $ 187,469 Add: Non-interest income 40,165 39,114 Less: Non-interest expense 190,881 150,002 PPNR (non-GAAP) $ 91,320 $ 76,581 Adjusted calculation of PPNR (non-GAAP): (1) Net interest income $ 242,036 $ 187,469 Add: Non-interest income 40,165 39,114 Less: Non-interest expense 190,881 150,002 Add: Merger and integration costs (non-GAAP) 13,824 Adjusted PPNR (non-GAAP) $ 105,144 $ 76,581 (1) Management believes that this is an important metric as it illustrates the underlying performance of the Corporation, it enables investors and others to assess the Corporation's ability to generate capital to cover credit losses through the credit cycle and provides consistent reporting with a key metric used by bank regulatory agencies. 51 Table of Contents Twelve Months Ended December 31, 2025 December 31, 2024 Basic earnings per common share computation: Net income available to common shareholders $ 61,829 $ 50,273 Less: net income available to common shareholders allocated to participating securities 476 388 Net income available to common shareholders allocated to common stock $ 61,353 $ 49,885 Weighted average common shares outstanding, including shares considered participating securities 24,755 20,993 Less: average participating securities 169 155 Weighted average shares 24,586 20,838 Basic earnings per common share $ 2.50 $ 2.39 Diluted earnings per common share computation: Net income available to common shareholders allocated to common stock $ 61,353 $ 49,885 Weighted average common shares outstanding for basic earnings per common share 24,586 20,838 Add: dilutive effect of stock compensation 83 62 Weighted average shares and dilutive potential common shares 24,669 20,900 Diluted earnings per common share $ 2.49 $ 2.39 Adjusted basic earnings per common share computation (non-GAAP): Net income available to common shareholders $ 61,829 $ 50,273 Add: merger transaction related expenses, net of tax (non-GAAP) 11,600 — Less: net income available to common shareholders allocated to participating securities 476 388 Adjustment to net income available to common shareholders allocated to participating securities for merger transaction related expenses, net of tax (non-GAAP) 79 — Adjusted net income available to common shareholders allocated to common stock (non-GAAP) $ 72,874 $ 49,885 Weighted average common shares outstanding, including shares considered participating securities 24,755 20,993 Less: average participating securities 169 155 Weighted average shares 24,586 20,838 Adjusted basic earnings per common share (non-GAAP) $ 2.96 $ 2.39 Adjusted diluted earnings per common share computation (non-GAAP): Adjusted net income available to common shareholders allocated to common stock (non-GAAP) $ 72,874 $ 49,885 Weighted average common shares outstanding for basic earnings per common share 24,586 20,838 Add: dilutive effect of stock compensation 83 62 Weighted average shares and dilutive potential common shares 24,669 20,900 Adjusted diluted earnings per common share (non-GAAP) $ 2.95 $ 2.39 52 Table of Contents December 31, December 31, 2025 2024 Calculation of tangible book value per common share and tangible common equity / tangible assets (non-GAAP): Shareholders' equity $ 872,127 $ 610,695 Less: preferred equity 57,785 57,785 Common shareholders' equity 814,342 552,910 Less: goodwill and other intangibles 88,512 43,874 Less: core deposit intangible 33,693 206 Tangible common equity (non-GAAP) $ 692,137 $ 508,830 Total assets $ 8,396,435 $ 6,192,010 Less: goodwill and other intangibles 88,512 43,874 Less: core deposit intangible 33,693 206 Tangible assets (non-GAAP) $ 8,274,230 $ 6,147,930 Ending shares outstanding 29,473,352 20,987,992 Book value per common share (GAAP) $ 27.63 $ 26.34 Tangible book value per common share (non-GAAP) $ 23.48 $ 24.24 Common shareholders' equity / Total assets (GAAP) 9.70 % 8.93 % Tangible common equity / Tangible assets (non-GAAP) 8.36 % 8.28 % Years Ended December 31, 2025 2024 Calculation of net interest margin: Interest income $ 392,345 $ 325,470 Interest expense 150,309 138,001 Net interest income $ 242,036 $ 187,469 Average total earning assets $ 6,629,434 $ 5,499,187 Net interest margin (GAAP) 3.65 % 3.41 % Calculation of net interest margin (fully tax equivalent basis) (non-GAAP): Interest income $ 392,345 $ 325,470 Tax equivalent adjustment (non-GAAP) 1,177 955 Adjusted interest income (fully tax equivalent basis) (non-GAAP) 393,522 326,425 Interest expense 150,309 138,001 Net interest income (fully tax equivalent basis) (non-GAAP) $ 243,213 $ 188,424 Average total earning assets $ 6,629,434 $ 5,499,187 Less: average mark to market adjustment on investments (non-GAAP) (41,218) (53,087) Adjusted average total earning assets, net of mark to market (non-GAAP) $ 6,670,652 $ 5,552,274 Net interest margin, fully tax equivalent basis (non-GAAP) 3.65 % 3.39 % Calculation of net interest margin, excluding purchase accounting loan accretion (fully tax equivalent basis) (non-GAAP) (1) : Net interest income (fully tax equivalent basis) (non-GAAP) $ 243,213 $ 188,424 Less: purchase accounting loan accretion (6,578) 0 Adjusted net interest income (fully tax equivalent basis) (non-GAAP) $ 236,635 $ 188,424 Adjusted average total earning assets, net of mark to market (non-GAAP) $ 6,670,652 $ 5,552,274 Adjusted net interest margin, fully tax equivalent basis (non-GAAP) (annualized) 3.55 % 3.39 % (1) Purchase accounting loan accretion represents income recognized on estimated fair value adjustments to acquired loans. 53 Table of Contents Years Ended December 31, 2025 2024 Calculation of efficiency ratio: Non-interest expense $ 190,881 $ 150,002 Non-interest income $ 40,165 $ 39,114 Net interest income 242,036 187,469 Total revenue $ 282,201 $ 226,583 Efficiency ratio 67.64 % 66.20 % Calculation of efficiency ratio (fully tax equivalent basis) (non-GAAP): Non-interest expense $ 190,881 $ 150,002 Less: core deposit intangible amortization 1,848 73 Adjusted non-interest expense (non-GAAP) $ 189,033 $ 149,929 Non-interest income $ 40,165 $ 39,114 Net interest income $ 242,036 187,469 Less: tax exempt investment and loan income, net of TEFRA (non-GAAP) 6,551 5,635 Add: tax exempt investment and loan income (fully tax equivalent basis) (non-GAAP) 9,266 8,068 Adjusted net interest income (fully tax equivalent basis) (non-GAAP) 244,751 189,902 Adjusted net revenue (fully tax equivalent basis) (non-GAAP) $ 284,916 $ 229,016 Efficiency ratio (fully tax equivalent basis) (non-GAAP) 66.35 % 65.47 % Adjusted calculation of efficiency ratio (fully tax equivalent basis) (non-GAAP): Adjusted non-interest expense (non-GAAP) $ 189,033 $ 149,929 Less: merger and integration costs (non-GAAP) 13,824 — Adjusted non-interest expense (non-GAAP) $ 175,209 $ 149,929 Adjusted net revenue (fully tax equivalent basis) (non-GAAP) $ 284,916 $ 229,016 Adjusted efficiency ratio (fully tax equivalent basis) (non-GAAP) 61.49 % 65.47 % 54 Table of Contents Years Ended December 31, 2025 2024 Calculation of return on average tangible common equity (non-GAAP): Net income $ 66,131 $ 54,575 Less: preferred stock dividends 4,302 4,302 Net income available to common shareholders $ 61,829 $ 50,273 Average shareholders' equity $ 723,241 $ 592,550 Less: average goodwill & intangibles 81,548 44,118 Less: average preferred equity 57,785 57,785 Tangible common shareholders' equity (non-GAAP) $ 583,908 $ 490,647 Return on average equity (GAAP) 9.14 % 9.21 % Return on average common equity (GAAP) 9.29 % 9.40 % Return on average tangible common equity (non-GAAP) 10.59 % 10.25 % Adjusted calculation of return on average equity (non-GAAP): Net income $ 66,131 $ 54,575 Add: merger transaction related expenses, net of tax (non-GAAP) 11,600 — Adjusted net income (non-GAAP) $ 77,731 $ 54,575 Average shareholders' equity $ 723,241 $ 592,550 Adjusted return on average equity (non-GAAP) (annualized) 10.75 % 9.21 % Adjusted calculation of return on average tangible common equity (non-GAAP): Net income available to common shareholders $ 61,829 $ 50,273 Add: merger transaction related expenses, net of tax (non-GAAP) 11,600 — Adjusted net income available to common shareholders $ 73,429 $ 50,273 Average tangible common shareholders' equity (non-GAAP) $ 583,908 $ 490,647 Adjusted return on average tangible common equity (non-GAAP) (annualized) 12.58 % 10.25 % 55 Table of Contents
The Corporation expects to satisfy these short-term and long-term cash requirements through deposit growth, principal and interest payments from loans and investment securities, maturing loans and investment securities, as well as by maintaining access to wholesale funding sources. 42 Table of Contents The objective of the Corporation's liquidity management is to manage cash flow and liquidity reserves so that they are adequate to fund the Corporation's operations and to meet cash obligations and other commitments on a timely basis and at a reasonable cost.
The Corporation expects to satisfy these short-term and long-term cash requirements through deposit growth, principal and interest payments from loans and investment securities, maturing loans and investment securities, as well as by maintaining access to wholesale funding sources. 40 Table of Contents The objective of the Corporation's liquidity management is to manage cash flow and liquidity reserves so that they are adequate to fund the Corporation's operations and to meet cash obligations and other commitments on a timely basis and at a reasonable cost.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations is presented to provide insight into management’s assessment of financial results and should be read in conjunction with the following parts of this Annual Report on Form 10-K: Part I, Item 1 "Business," Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," and Part II, Item 8 "Financial Statements and Supplementary Data." This section of this Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations is presented to provide insight into management’s assessment of financial results and should be read in conjunction with the following parts of this Annual Report on Form 10-K: Part I, Item 1 "Business," Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," and Part II, Item 8 "Financial Statements and Supplementary Data." This section of this Annual Report on Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
The net proceeds from the sale were approximately $83.5 million, after deducting offering expenses. Additional details about our subordinated debentures and notes are included in Note 10, "Borrowings" in the accompanying notes to consolidated financial statements. Liquidity and Capital Resources Liquidity measures an organization’s ability to meet its cash obligations as they come due.
The net proceeds from the sale were approximately $83.5 million, after deducting offering expenses. Additional details about our subordinated debentures and notes are included in Note 11, "Borrowings" in the accompanying notes to consolidated financial statements. Liquidity and Capital Resources Liquidity measures an organization’s ability to meet its cash obligations as they come due.
If actual results differ significantly from management's assumptions, the Corporation's allowance for credit loss may not be sufficient to cover inherent losses in the Corporation's loan portfolio, resulting in additions to the Corporation's allowance for credit loss and an increase in the provision for credit losses. 51 Table of Contents Fair Value Measurements The Corporation uses fair value measurements to record certain financial instruments and to determine fair value disclosures.
If actual results differ significantly from management's assumptions, the Corporation's allowance for credit loss may not be sufficient to cover inherent losses in the Corporation's loan portfolio, resulting in additions to the Corporation's allowance for credit loss and an increase in the provision for credit losses. 49 Table of Contents Fair Value Measurements The Corporation uses fair value measurements to record certain financial instruments and to determine fair value disclosures.
The qualitative factors applied at December 31, 2024, and the importance and levels of the qualitative factors applied, may change in future periods depending on the level of changes to items such as the uncertainty of economic conditions and management's assessment of the level of credit risk within the loan portfolio as a result of such changes, compared to the amount of allowance for credit loss calculated by the model.
The qualitative factors applied at December 31, 2025, and the importance and levels of the qualitative factors applied, may change in future periods depending on the level of changes to items such as the uncertainty of economic conditions and management's assessment of the level of credit risk within the loan portfolio as a result of such changes, compared to the amount of allowance for credit loss calculated by the model.
Weighted-average yields have been computed on a fully taxable-equivalent basis using a tax rate of 21%. Mortgage-backed securities are included in maturity categories based on their stated maturity date. December 31, 2024 Within One Year After One But Within Five Years After Five But Within Ten Years After Ten Years Total $ Amt. Yield $ Amt. Yield $ Amt.
Weighted-average yields have been computed on a fully taxable-equivalent basis using a tax rate of 21%. Mortgage-backed securities are included in maturity categories based on their stated maturity date. December 31, 2025 Within One Year After One But Within Five Years After Five But Within Ten Years After Ten Years Total $ Amt. Yield $ Amt. Yield $ Amt.
The forecast and reversion to mean time period used for each economic index at December 31, 2024 were four quarters and eight quarters, respectively. Prepayment and curtailment assumptions are based on the Corporation's historical experience over the trailing 12 months and are adjusted by management as deemed necessary. The prepayment and curtailment assumptions vary based on segment.
The forecast and reversion to mean time period used for each economic index at December 31, 2025 were four quarters and eight quarters, respectively. Prepayment and curtailment assumptions are based on the Corporation's historical experience over the trailing 12 months and are adjusted by management as deemed necessary. The prepayment and curtailment assumptions vary based on segment.
Through active balance sheet management and analysis of the securities portfolio, a sufficient level of liquidity is maintained to satisfy depositor requirements and various credit needs of our customers. Loans Receivable Note 3, "Loans Receivable and Allowance for Credit Losses," to the consolidated financial statements provides more detail concerning the loan portfolio of the Corporation.
Through active balance sheet management and analysis of the securities portfolio, a sufficient level of liquidity is maintained to satisfy depositor requirements and various credit needs of our customers. Loans Receivable Note 4, "Loans Receivable and Allowance for Credit Losses," to the consolidated financial statements provides more detail concerning the loan portfolio of the Corporation.
The taxable equivalent adjustment to net interest income for the years ended December 31, 2024, 2023, and 2022 were $955 thousand, $997 thousand, and $1.2 million, respectively. (3) Average loans receivable outstanding includes the average balance outstanding of all nonaccrual loans. Loans receivable consist of the average of total loans receivable less average unearned income.
The taxable equivalent adjustment to net interest income for the years ended December 31, 2025, 2024, and 2023 were $1.2 million, $955 thousand, and $997 thousand, respectively. (3) Average loans receivable outstanding includes the average balance outstanding of all nonaccrual loans. Loans receivable consist of the average of total loans receivable less average unearned income.
In light of these risks, uncertainties and assumptions, the forward-looking events discussed might not occur and you should not put undue reliance on any forward-looking statements. 28 Table of Contents Overview The Corporation is a financial holding company registered under the BHC Act.
In light of these risks, uncertainties and assumptions, the forward-looking events discussed might not occur and you should not put undue reliance on any forward-looking statements. 27 Table of Contents Overview The Corporation is a financial holding company registered under the BHC Act.
Management's Discussion and Analysis of Financial Condition and Results of Operations. 44 Table of Contents Average Balances, Interest Rates and Yields The loan categories used to monitor and analyze interest income and yields are different than the portfolio segments used to determine the allowance for credit losses for loans.
Management's Discussion and Analysis of Financial Condition and Results of Operations. 42 Table of Contents Average Balances, Interest Rates and Yields The loan categories used to monitor and analyze interest income and yields are different than the portfolio segments used to determine the allowance for credit losses for loans.
A weight category (0% for the lowest risk assets and increasing for each tier of higher risk assets) is assigned to each asset on the balance sheet. As of December 31, 2024, all of the Corporation's capital ratios exceeded regulatory "well-capitalized" levels.
A weight category (0% for the lowest risk assets and increasing for each tier of higher risk assets) is assigned to each asset on the balance sheet. As of December 31, 2025, all of the Corporation's capital ratios exceeded regulatory "well-capitalized" levels.
The allowance for credit losses was calculated by pooling loans of similar credit risk characteristics and credit monitoring procedures. See Note 1, "Summary of Significant Accounting Policies," and Note 3, "Loans Receivable and Allowance for Credit Losses," to the consolidated financial statements for more information about pooling of loans for the allowance for credit losses.
The allowance for credit losses was calculated by pooling loans of similar credit risk characteristics and credit monitoring procedures. See Note 1, "Summary of Significant Accounting Policies," and Note 4, "Loans Receivable and Allowance for Credit Losses," to the consolidated financial statements for more information about pooling of loans for the allowance for credit losses.
The following table presents average balances of certain measures of our financial condition and net interest margin for the specified years. December 31, 2024 December 31, 2023 December 31, 2022 Average Balance Annual Rate Interest Inc./ Exp. Average Balance Annual Rate Interest Inc./ Exp. Average Balance Annual Rate Interest Inc./ Exp.
The following table presents average balances of certain measures of our financial condition and net interest margin for the specified years. December 31, 2025 December 31, 2024 December 31, 2023 Average Balance Annual Rate Interest Inc./ Exp. Average Balance Annual Rate Interest Inc./ Exp. Average Balance Annual Rate Interest Inc./ Exp.
Further discussion of these commitments is included Note 18, "Off-Balance Sheet Commitments and Contingencies." Critical Accounting Policies and Estimates The Corporation's consolidated financial statements are prepared in accordance with accounting principles GAAP and follow general practices within the industries in which the Corporation operates.
Further discussion of these commitments is included Note 19, "Off-Balance Sheet Commitments and Contingencies." Critical Accounting Policies and Estimates The Corporation's consolidated financial statements are prepared in accordance with GAAP and follow general practices within the industries in which the Corporation operates.
Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2024.
Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2025.
One of the objectives of these efforts is to enable the Corporation to better understand the climate change related risks associated with the Corporation's customers' business activities and to be able to monitor their response to those risks and their ultimate impact on the Corporation's customers. 32 Table of Contents Loan Portfolio Profile As part of its lending policy and risk management activities, the Corporation tracks lending exposure by industry classification and type to determine potential risks associated with industry concentrations, and whether any risk issues could lead to additional credit loss exposure.
One of the objectives of these efforts is to enable the Corporation to better understand the climate change related risks associated with the Corporation's customers' business activities and to be able to monitor their response to those risks and their ultimate impact on the Corporation's customers. 31 Table of Contents Loan Portfolio Profile As part of its lending policy and risk management activities, the Corporation tracks lending exposure by industry classification and type to determine potential risks associated with industry concentrations, and to identify any concentration risk issues that could lead to additional credit loss exposure.
Note 18, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation. 39 Table of Contents Year Ended December 31, 2023 (1) Provision (Benefit) for Credit Losses on Loans Receivable (2) Net (Charge-Offs) Recoveries Average Loans Receivable Ratio of Annualized Net (Charge-Offs) Recoveries to Average Loans Receivable Farmland $ (21) $ — $ 34,397 — % Owner-occupied, nonfarm nonresidential properties 1,223 3 502,925 — Agricultural production and other loans to farmers 1 — 1,255 — Commercial and Industrial (312) 46 777,991 0.01 Obligations (other than securities and leases) of states and political subdivisions 764 — 154,225 — Other loans (67) — 30,410 — Other construction loans and all land development and other land loans (423) — 435,967 — Multifamily (5 or more) residential properties (1,043) (59) 259,557 (0.02) Non-owner occupied, nonfarm nonresidential properties 2,814 (684) 838,674 (0.08) 1-4 Family Construction (136) — 55,392 — Home equity lines of credit (324) (5) 124,865 — Residential Mortgages secured by first liens (96) (114) 966,225 (0.01) Residential Mortgages secured by junior liens 452 — 84,803 — Other revolving credit plans 344 (89) 41,417 (0.21) Automobile 144 (55) 25,044 (0.22) Other consumer 1,839 (1,848) 49,631 (3.72) Credit cards 199 (171) 13,261 (1.29) Overdrafts 479 (465) 302 (153.97) Total $ 5,837 $ (3,441) $ 4,396,341 (0.08) % (1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the provision (benefit) for credit losses on loans receivable column disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.
Year Ended December 31, 2023 (1) Provision (Benefit) for Credit Losses on Loans Receivable (2) Net (Charge-Offs) Recoveries Average Loans Receivable Ratio of Annualized Net (Charge-Offs) Recoveries to Average Loans Receivable Farmland $ (21) $ — $ 34,397 — % Owner-occupied, nonfarm nonresidential properties 1,223 3 502,925 — Agricultural production and other loans to farmers 1 — 1,255 — Commercial and Industrial (312) 46 777,991 0.01 Obligations (other than securities and leases) of states and political subdivisions 764 — 154,225 — Other loans (67) — 30,410 — Other construction loans and all land development and other land loans (423) — 435,967 — Multifamily (5 or more) residential properties (1,043) (59) 259,557 (0.02) Non-owner occupied, nonfarm nonresidential properties 2,814 (684) 838,674 (0.08) 1-4 Family Construction (136) — 55,392 — Home equity lines of credit (324) (5) 124,865 — Residential Mortgages secured by first liens (96) (114) 966,225 (0.01) Residential Mortgages secured by junior liens 452 — 84,803 — Other revolving credit plans 344 (89) 41,417 (0.21) Automobile 144 (55) 25,044 (0.22) Other consumer 1,839 (1,848) 49,631 (3.72) Credit cards 199 (171) 13,261 (1.29) Overdrafts 479 (465) 302 (153.97) Total loans $ 5,837 $ (3,441) $ 4,396,341 (0.08) % (1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the provision (benefit) for credit losses on loans receivable column disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.
(2) Changes in interest income on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21% for the year ended December 31, 2024 and 2023. 46 Table of Contents Results of Operations Year Ended December 31, 2024 vs.
(2) Changes in interest income on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21% for the year ended December 31, 2025 and 2024. 44 Table of Contents Results of Operations Year Ended December 31, 2025 vs.
The Corporation monitors the earnings performance and the effectiveness of the liquidity of the securities portfolio on a regular basis through meetings of the Asset/Liability Committee ("ALCO"). The ALCO also reviews and manages interest rate risk for the Corporation.
The Corporation monitors the earnings performance and the effectiveness of the liquidity of the securities portfolio on a regular basis through meetings of the ALCO. The ALCO also reviews and manages interest rate risk for the Corporation.
Year Ended December 31, 2024 Provision (Benefit) for Credit Losses on Loans Receivable (1) Net (Charge-Offs) Recoveries Average Loans Receivable Ratio of Annualized Net (Charge-Offs) Recoveries to Average Loans Receivable Farmland $ 29 $ — $ 32,278 — % Owner-occupied, nonfarm nonresidential properties 2,958 (1,393) 526,379 (0.26) Agricultural production and other loans to farmers 30 — 2,456 — Commercial and Industrial 628 (2,369) 700,935 (0.34) Obligations (other than securities and leases) of states and political subdivisions (1,258) — 151,788 — Other loans (60) — 26,831 — Other construction loans and all land development and other land loans (248) (11) 401,083 — Multifamily (5 or more) residential properties 1,718 — 310,485 — Non-owner occupied, nonfarm nonresidential properties 1,248 (921) 927,788 (0.10) 1-4 Family Construction 7 — 34,451 — Home equity lines of credit 491 5 145,978 — Residential Mortgages secured by first liens 763 (79) 1,003,331 (0.01) Residential Mortgages secured by junior liens (144) — 97,421 — Other revolving credit plans 109 (126) 40,971 (0.31) Automobile 55 (140) 22,821 (0.61) Other consumer 2,138 (1,902) 51,793 (3.67) Credit cards 158 (126) 14,274 (0.88) Overdrafts 415 (450) 241 (186.72) Total $ 9,037 $ (7,512) $ 4,491,304 (0.17) % (1) Excludes provision for credit losses totaling $944 thousand related to unfunded commitments.
Note 19, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation. 37 Table of Contents Year Ended December 31, 2024 Provision (Benefit) for Credit Losses on Loans Receivable (1) Net (Charge-Offs) Recoveries Average Loans Receivable Ratio of Annualized Net (Charge-Offs) Recoveries to Average Loans Receivable Farmland $ 29 $ — $ 32,278 — % Owner-occupied, nonfarm nonresidential properties 2,958 (1,393) 526,379 (0.26) Agricultural production and other loans to farmers 30 — 2,456 — Commercial and Industrial 628 (2,369) 700,935 (0.34) Obligations (other than securities and leases) of states and political subdivisions (1,258) — 151,788 — Other loans (60) — 26,831 — Other construction loans and all land development and other land loans (248) (11) 401,083 — Multifamily (5 or more) residential properties 1,718 — 310,485 — Non-owner occupied, nonfarm nonresidential properties 1,248 (921) 927,788 (0.10) 1-4 Family Construction 7 — 34,451 — Home equity lines of credit 491 5 145,978 — Residential Mortgages secured by first liens 763 (79) 1,003,331 (0.01) Residential Mortgages secured by junior liens (144) — 97,421 — Other revolving credit plans 109 (126) 40,971 (0.31) Automobile 55 (140) 22,821 (0.61) Other consumer 2,138 (1,902) 51,793 (3.67) Credit cards 158 (126) 14,274 (0.88) Overdrafts 415 (450) 241 (186.72) Total $ 9,037 $ (7,512) $ 4,491,304 (0.17) % (1) Excludes provision for credit losses totaling $185 thousand related to unfunded commitments.
December 31, 2024 Within One Year After One But Within Five Years After Five But Within Ten Years After Ten Years Total $ Amt. Yield $ Amt. Yield $ Amt. Yield $ Amt. Yield $ Amt. Yield U.S.
December 31, 2025 Within One Year After One But Within Five Years After Five But Within Ten Years After Ten Years Total $ Amt. Yield $ Amt. Yield $ Amt. Yield $ Amt. Yield $ Amt. Yield U.S.
These excess funds, when combined with collective contingent liquidity resources of $4.6 billion including (i) available borrowing capacity from the FHLB and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, result in the total on-hand and contingent liquidity sources for the Corporation to be approximately 5.0 times the estimated amount of adjusted uninsured deposit balances.
These excess funds, when combined with collective contingent liquidity resources of $6.7 billion including (i) available borrowing capacity from the FHLB and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, result in total available liquidity sources for the Corporation as of December 31, 2025 to be approximately 5.4 times the estimated amount of adjusted uninsured deposit balances.
Credit reviews are performed quarterly by an outsourced loan review firm and cover approximately 65% of the commercial loan portfolio on an annual basis. In addition, the external independent loan review firm reviews past due loans and all significant classified assets and nonaccrual loans annually.
Credit reviews are performed five times per year by an outsourced loan review firm and cover approximately 65% of the commercial loan portfolio on an annual basis. In addition, the external independent loan review firm reviews past due loans and all significant classified assets and nonaccrual loans annually.
Note 2, "Securities," to the consolidated financial statements provides more detail concerning the composition of the Corporation’s securities portfolio and the process for evaluating securities for impairment. 30 Table of Contents The following table summarizes the maturity distribution schedule with corresponding weighted-average yields of AFS debt securities as of December 31, 2024.
Note 3, "Securities," to the consolidated financial statements provides more detail concerning the composition of the Corporation’s securities portfolio and the process for evaluating securities for impairment. The following table summarizes the maturity distribution schedule with corresponding weighted-average yields of AFS debt securities as of December 31, 2025.
Note 3, "Loans Receivable and Allowance for Credit Losses," to the consolidated financial statements provides further disclosure of loan balances by portfolio segment as of December 31, 2024 and 2023. 38 Table of Contents Additional information related to credit loss expense and net (charge-offs) recoveries at December 31, 2024, 2023, and 2022 is presented in the tables below.
Note 4, "Loans Receivable and Allowance for Credit Losses," to the consolidated financial statements provides further disclosure of loan balances by portfolio segment as of December 31, 2025 and 2024. Additional information related to credit loss expense and net (charge-offs) recoveries at December 31, 2025, 2024, and 2023 is presented in the tables below.
Included in the provision for credit losses for the year ended December 31, 2024, was a $185 thousand expense related to the allowance for unfunded commitments compared to a $156 thousand expense for the year ended December 31, 2023.
Included in the provision for credit losses for the year ended December 31, 2025 was a $208 thousand expense related to the allowance for unfunded commitments compared to a $185 thousand expense for the year ended December 31, 2024.
In determining the appropriate estimate for the allowance for credit losses, management considers a number of factors relative to both individually evaluated credits in the loan portfolio and macro-economic factors relative to the economy of the U.S. as a whole and the economies of the areas in which the Corporation does business. 50 Table of Contents Management performs a quarterly evaluation of the adequacy of the allowance for credit losses.
In determining the appropriate estimate for the allowance for credit losses, management considers a number of factors relative to both individually evaluated credits in the loan portfolio and macro-economic factors relative to the economy of the U.S. as a whole and the economies of the areas in which the Corporation does business.
The adjustment to the average balance for securities in the calculation of average yield for the years ended December 31, 2024, 2023, and 2022 were $(53.1) million, $(61.1) million, and $(40.3) million, respectively. (5) Includes loans held for sale.
The adjustment to the average balance for securities in the calculation of average yield for the years ended December 31, 2025, 2024, and 2023 were $(41.2) million, $(53.1) million, and $(61.1) million, respectively. (5) Includes loans held for sale.
Year Ended December 31, 2023 Overview of the Statements of Income and Comprehensive Income Net income available to common shareholders ("earnings") was $50.3 million, or $2.39 per diluted share, for the year ended December 31, 2024, compared to earnings of $53.7 million, or $2.55 per diluted share, for the year ended December 31, 2023.
Year Ended December 31, 2023 Overview of the Statements of Income and Comprehensive Income Earnings were $50.3 million, or $2.39 per diluted share, for the year ended December 31, 2024, compared to earnings of $53.7 million, or $2.55 per diluted share, for the year ended December 31, 2023.
Such known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to, (i) adverse changes or conditions in capital and financial markets, including actual or potential stresses in the banking industry; (ii) changes in interest rates; (iii) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (iv) effectiveness of our data security controls in the face of cyber attacks and any reputational risks following a cybersecurity incident; (v) changes in general business, industry or economic conditions or competition; (vi) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (vii) governmental approvals of the Corporation's pending merger with ESSA may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; (viii) the Corporation's shareholders and/or the shareholders of ESSA may fail to approve the merger or the issuance of the Corporation’s common stock in the merger, as applicable; (ix) higher than expected costs or other difficulties related to integration of combined or merged businesses; (x) the effects of business combinations and other acquisition transactions, including the inability to realize our loan and investment portfolios; (xi) changes in the quality or composition of our loan and investment portfolios; (xii) adequacy of loan loss reserves; (xiii) increased competition; (xiv) loss of certain key officers; (xv) deposit attrition; (xvi) rapidly changing technology; (xvii) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xviii) changes in the cost of funds, demand for loan products or demand for financial services; and (xix) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices.
Such known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from the statements, include, but are not limited to, (i) adverse changes or conditions in capital and financial markets, including actual or potential stresses in the banking industry; (ii) changes in interest rates; (iii) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (iv) effectiveness of our data security controls in the face of cyber attacks and any reputational risks following a cybersecurity incident; (v) changes in general business, industry or economic conditions or competition; (vi) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (vii) adverse economic effects from international trade disputes, including threatened or implemented tariffs imposed by the U.S. and threatened or implemented tariffs imposed by foreign countries in retaliation, or similar events impacting economic activity; (viii) higher than expected costs or other difficulties related to integration of combined or merged businesses; (ix) the effects of business combinations and other acquisition transactions, including the inability to realize our l and investment portfolios; (x) changes in the quality or composition of our loan and investment portfolios; (xi) adequacy of loan loss reserves; (xii) increased competition; (xiii) loss of certain key officers; (xiv) deposit attrition; (xv) rapidly changing technology; (xvi) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xvii) changes in the cost of funds, demand for loan products or demand for financial services; and (xviii) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices.
Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming, and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.
A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming, and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions.
The Corporation is also party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of the Corporation's clients. These financial instruments include commitments to extend credit and standby letters of credit.
In accordance with GAAP, these assets are not included on the Corporation's balance sheet. The Corporation is also party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of the Corporation's clients. These financial instruments include commitments to extend credit and standby letters of credit.
CNB Securities Corporation is incorporated in Delaware and currently maintains investments in debt and equity securities. CNB Insurance Agency, incorporated in Pennsylvania, provides for the sale of nonproprietary annuities and other insurance products.
In addition to the Bank, the Corporation has four other subsidiaries. CNB Securities Corporation is incorporated in Delaware and currently maintains investments in debt and equity securities. CNB Insurance Agency, incorporated in Pennsylvania, provides for the sale of nonproprietary annuities and other insurance products.
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 ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented.
Management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented.
Management considers a variety of factors in establishing this estimate. This evaluation is inherently subjective as it requires material estimates by management that may be susceptible to significant change based on changes in economic and real estate market conditions. The evaluation is comprised of specific and pooled components.
This evaluation is inherently subjective as it requires material estimates by management that may be susceptible to significant change based on changes in economic and real estate market conditions. 48 Table of Contents The evaluation is comprised of specific and pooled components.
Net charge-offs during the year ended December 31, 2024 were $7.5 million, or 0.17% of average total loans and loans held for sale, compared to $3.4 million, or 0.08% of average total loans and loans held for sale, during the year ended December 31, 2023.
Net charge-offs during the year ended December 31, 2025 were $7.2 million, or 0.13% of average total loans and loans held for sale, compared to $7.5 million, or 0.17% of average total loans and loans held for sale, during the year ended December 31, 2024.
(2) Excludes provision for credit losses totaling $759 thousand related to unfunded commitments. Note 18, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.
Note 19, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.
The following table summarizes the Corporation's net available liquidity and borrowing capacities as of December 31, 2024: Net Available FHLB borrowing capacity (1) $ 1,211,618 Federal Reserve borrowing capacity (2) 497,782 Brokered deposits (3) 2,035,038 Other third-party funding channels (3) (4) 859,723 Total net available liquidity and borrowing capacity $ 4,604,161 (1) Availability contingent on the FHLB activity-based stock ownership requirement (2) Includes access to discount window, BIC program and Bank Term Funding Program (3) Availability contingent on internal borrowing guidelines (4) Availability contingent on correspondent bank approvals at time of borrowing As of December 31, 2024, management is not aware of any events that are reasonably likely to have a material adverse effect on the Corporation's liquidity, capital resources or operations.
The following table summarizes the Corporation's net available liquidity and borrowing capacities as of December 31, 2025: Net Available FHLB borrowing capacity (1) $ 1,879,963 Federal Reserve borrowing capacity (2) 395,641 Brokered deposits (3) 2,614,299 Other third-party funding channels (3) (4) 1,461,568 Total net available liquidity and borrowing capacity $ 6,351,471 (1) Availability contingent on the FHLB activity-based stock ownership requirement (2) Includes access to discount window, BIC program and Bank Term Funding Program (3) Availability contingent on internal borrowing guidelines (4) Availability contingent on correspondent bank approvals at time of borrowing As of December 31, 2025, management is not aware of any events that are reasonably likely to have a material adverse effect on the Corporation's liquidity, capital resources or operations.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024. 26 Table of Contents Dollar amounts in tables are stated in thousands, except for per share amounts.
The effective tax rate for the periods differed from the federal statutory rate of 21.0% principally as a result of tax-exempt income from securities and loans as well as earnings from bank owned life insurance. 48 Table of Contents Year Ended December 31, 2023 vs.
The effective tax rates were 19.81% and 18.98% for 2025 and 2024, respectively. The effective tax rate for the periods differed from the federal statutory rate of 21.0% principally as a result of tax-exempt income from securities and loans as well as earnings from bank owned life insurance. 46 Table of Contents Year Ended December 31, 2024 vs.
Weighted Average Modified Duration (in Years) U.S. Government Sponsored Entities 0.34 State and Political Subdivisions 4.89 Residential and multi-family mortgage 3.85 Corporate notes and bonds 4.13 Pooled SBA 2.27 Total 3.93 The following table summarizes the weighted average modified duration of HTM debt securities as of December 31, 2024. Weighted Average Modified Duration (in Years) U.S.
Weighted Average Modified Duration (in Years) U.S. Government Sponsored Entities 5.91 State and Political Subdivisions 4.34 Residential and multi-family mortgage 4.33 Corporate notes and bonds 3.78 Pooled SBA 2.17 Total 4.56 The following table summarizes the weighted average modified duration of HTM debt securities as of December 31, 2025. Weighted Average Modified Duration (in Years) U.S.
These excess funds, when combined with (i) available borrowing capacity of $4.6 billion from the Federal Home Loan Bank of Pittsburgh ("FHLB") and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, resulted in the total on-hand and contingent liquidity sources for the Corporation being approximately 5.0 times the estimated amount of adjusted uninsured deposit balances discussed above.
These excess funds, when combined with collective contingent liquidity resources of $6.4 billion including (i) available borrowing capacity from the FHLB and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, resulted in total available liquidity sources for the Corporation as of December 31, 2025 to be approximately 5.2 times the estimated amount of adjusted uninsured deposit balances.
Even given the Corporation’s historically sound underwriting protocols and high credit quality ratings for borrowers in these industries, the Corporation monitors numerous relevant sensitivity elements at both underwriting and through and beyond the funding period, including projects occupancy, loan-to-value, absorption and cap rates, debt service coverage and covenant compliance, and developer/lessor financial strength both in the project and globally.
Even given the Corporation’s historically sound underwriting protocols and high credit quality standards for borrowers in the commercial real estate industry segments, the Corporation monitors numerous relevant sensitivity elements, including occupancy, loan-to-value, absorption and cap rates, debt service coverage and covenant compliance, and developer/lessor financial strength both in the project and globally.
However, when excluding affiliate company deposits of $101.3 million and pledged-investment collateralized deposits of $400.5 million, the adjusted amount and percentage of total estimated uninsured deposits was approximately $937.1 million, or approximately 18.37% of total CNB Bank deposits as of December 31, 2023.
However, when excluding affiliate company deposits of $18.4 million and pledged-investment collateralized deposits of $680.4 million, the adjusted amount and percentage of total estimated uninsured deposits was approximately $1.3 billion, or approximately 18.33% of total CNB Bank deposits as of December 31, 2025.
A reconciliation of these non-GAAP financial measures is provided below in the "Non-GAAP Financial Measures" section. 29 Table of Contents Primary Factors Used To Evaluate Performance Management considers return on average assets, return on average equity, return on average tangible common equity, earnings per common share, tangible book value per common share, asset quality, net interest margin, and other metrics as key measures of the financial performance of the Corporation.
Primary Factors Used To Evaluate Performance Management considers return on average assets, return on average equity, return on average tangible common equity, earnings per common share, tangible book value per common share, asset quality, net interest margin, and other metrics as key measures of the financial performance of the Corporation.
The "watchlist" is comprised of all credits risk rated special mention, substandard and doubtful. 36 Table of Contents Allowance for Credit Losses The amount of each allowance for credit losses account represents management's best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument.
Allowance for Credit Losses The amount of each allowance for credit losses account represents management's best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument.
Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.61% and 3.82% for the years ended December 31, 2023, and 2022, respectively.
Net interest margin was 3.65% and 3.41% for the years ended December 31, 2025 and 2024, respectively. Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.65% and 3.39% for the years ended December 31, 2025 and 2024, respectively.
Loan Quality The following table presents information concerning the loan portfolio delinquency and other nonperforming assets at December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Nonaccrual loans $ 56,323 $ 29,639 Accrual loans greater than 90 days past due 653 55 Total nonperforming loans 56,976 29,694 Other real estate owned 2,509 2,111 Total nonperforming assets $ 59,485 $ 31,805 Total loans $ 4,608,956 $ 4,468,476 Nonaccrual loans as a percentage of loans 1.22 % 0.66 % Total assets $ 6,192,010 $ 5,752,957 Nonperforming assets as a percentage of total assets 0.96 % 0.55 % Allowance for credit losses on loans $ 47,357 $ 45,832 Allowance for credit losses / Total loans 1.03 % 1.03 % Ratio of allowance for credit losses on loans to nonaccrual loans 84.08 % 154.63 % Total nonperforming assets were approximately $59.5 million, or 0.96% of total assets, as of December 31, 2024, compared to $31.8 million, or 0.55% of total assets, as of December 31, 2023.
Loan Quality The following table presents information concerning the loan portfolio delinquency and other nonperforming assets at December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Nonaccrual loans $ 39,845 $ 56,323 Accrual loans greater than 90 days past due 42 653 Total nonperforming loans 39,887 56,976 Other real estate owned 2,280 2,509 Total nonperforming assets $ 42,167 $ 59,485 Total loans $ 6,493,740 $ 4,608,956 Nonaccrual loans as a percentage of loans 0.61 % 1.22 % Total assets $ 8,396,435 $ 6,192,010 Nonperforming assets as a percentage of total assets 0.50 % 0.96 % Allowance for credit losses on loans $ 67,055 $ 47,357 Allowance for credit losses / Total loans 1.03 % 1.03 % Ratio of allowance for credit losses on loans to nonaccrual loans 168.29 % 84.08 % Total nonperforming assets were approximately $42.2 million, or 0.50% of total assets, as of December 31, 2025, compared to $59.5 million, or 0.96% of total assets, as of December 31, 2024.
Management believes the charges to the provision for credit losses in 2023 were appropriate and the allowance for credit losses was adequate to absorb losses in the loan portfolio at December 31, 2023. 49 Table of Contents Non-Interest Income Total non-interest income was $33.3 million for the year ended December 31, 2023, representing a decrease of $1.5 million, or 4.12%, from the same period in 2022.
Management believes the charges to the provision for credit losses in 2024 were appropriate and the allowance for credit losses was adequate to absorb losses in the loan portfolio at December 31, 2024. 47 Table of Contents Non-Interest Income Total non-interest income was $39.1 million for the year ended December 31, 2024, compared to $33.3 million for the year ended December 31, 2023.
ASSETS: Securities: Taxable (1) (4) $ 700,078 2.14 % $ 16,059 $ 720,818 1.89 % $ 14,766 $ 768,959 1.80 % $ 14,560 Tax-exempt (1) (2) (4) 25,919 2.60 731 30,153 2.59 844 35,965 2.87 1,080 Equity securities (1) (2) 7,058 5.71 403 10,005 5.09 509 8,248 2.13 176 Total securities (4) 733,055 2.19 17,193 760,976 1.96 16,119 813,172 1.85 15,816 Loans receivable: Commercial (2) (3) 1,440,667 6.88 99,184 1,501,202 6.63 99,587 1,429,634 5.08 72,684 Mortgage (2) (3) (5) 2,920,537 6.15 179,645 2,765,484 5.77 159,606 2,355,662 4.78 112,583 Consumer (3) 130,100 11.95 15,547 129,655 11.47 14,868 112,426 10.48 11,778 Total loans receivable (3) 4,491,304 6.55 294,376 4,396,341 6.23 274,061 3,897,722 5.06 197,045 Other earning assets 274,828 5.41 14,856 74,800 6.03 4,513 243,653 1.16 2,112 Total earning assets 5,499,187 5.88 $ 326,425 5,232,117 5.57 $ 294,693 4,954,547 4.30 $ 214,973 Noninterest-bearing assets: Cash and due from banks 56,295 54,824 51,670 Premises and equipment 116,341 107,635 89,940 Other assets 269,167 251,725 227,991 Allowance for credit losses (46,032) (44,930) (39,935) Total noninterest-bearing assets 395,771 369,254 329,666 TOTAL ASSETS $ 5,894,958 $ 5,601,371 $ 5,284,213 LIABILITIES AND SHAREHOLDERS’ EQUITY: Demand—interest-bearing $ 705,488 0.77 % $ 5,451 $ 853,632 0.54 % $ 4,626 $ 1,061,452 0.20 % $ 2,131 Savings 3,052,031 3.46 105,675 2,666,905 2.92 77,782 2,383,918 0.54 12,772 Time 570,911 3.92 22,367 517,017 2.97 15,362 351,272 1.40 4,930 Total interest-bearing deposits 4,328,430 3.08 133,493 4,037,554 2.42 97,770 3,796,642 0.52 19,833 Short-term borrowings — — — 35,224 5.07 1,787 8,793 4.20 369 Finance lease liabilities 247 4.45 11 339 4.42 15 426 4.69 20 Subordinated notes and debentures 105,039 4.28 4,497 104,735 4.10 4,295 104,432 3.69 3,857 Total interest-bearing liabilities 4,433,716 3.11 $ 138,001 4,177,852 2.49 $ 103,867 3,910,293 0.62 $ 24,079 Demand—noninterest-bearing 781,780 793,713 847,793 Other liabilities 86,912 79,473 70,379 Total liabilities 5,302,408 5,051,038 4,828,465 Shareholders’ equity 592,550 550,333 455,748 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 5,894,958 $ 5,601,371 $ 5,284,213 Interest income/Earning assets 5.88 % $ 326,425 5.57 % $ 294,693 4.30 % $ 214,973 Interest expense/Interest-bearing liabilities 3.11 138,001 2.49 103,867 0.62 24,079 Net interest spread 2.77 % $ 188,424 3.08 % $ 190,826 3.68 % $ 190,894 Interest income/Earning assets 5.88 % $ 326,425 5.57 % $ 294,693 4.30 % $ 214,973 Interest expense/Earning assets 2.49 138,001 1.96 103,867 0.48 24,079 Net interest margin (fully tax-equivalent) 3.39 % $ 188,424 3.61 % $ 190,826 3.82 % $ 190,894 (1) Includes unamortized discounts and premiums. 45 Table of Contents (2) Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio.
ASSETS: Securities: Taxable (1) (4) $ 778,122 2.85 % $ 23,331 $ 700,078 2.14 % $ 16,059 $ 720,818 1.89 % $ 14,766 Tax-exempt (1) (2) (4) 24,646 2.64 700 25,919 2.60 731 30,153 2.59 844 Equity securities (1) (2) 14,436 6.14 886 7,058 5.71 403 10,005 5.09 509 Total securities (4) 817,204 2.90 24,917 733,055 2.19 17,193 760,976 1.96 16,119 Loans receivable: Commercial (2) (3) 1,579,792 6.80 107,350 1,440,667 6.88 99,184 1,501,202 6.63 99,587 Mortgage (2) (3) (5) 3,728,827 6.17 230,033 2,920,537 6.15 179,645 2,765,484 5.77 159,606 Consumer (3) 127,532 11.43 14,574 130,100 11.95 15,547 129,655 11.47 14,868 Total loans receivable (3) 5,436,151 6.47 351,957 4,491,304 6.55 294,376 4,396,341 6.23 274,061 Other earning assets 376,079 4.43 16,648 274,828 5.41 14,856 74,800 6.03 4,513 Total earning assets 6,629,434 5.90 $ 393,522 5,499,187 5.88 $ 326,425 5,232,117 5.57 $ 294,693 Noninterest-bearing assets: Cash and due from banks 67,775 56,295 54,824 Premises and equipment 138,465 116,341 107,635 Other assets 357,700 269,167 251,725 Allowance for credit losses (56,177) (46,032) (44,930) Total noninterest-bearing assets 507,763 395,771 369,254 TOTAL ASSETS $ 7,137,197 $ 5,894,958 $ 5,601,371 LIABILITIES AND SHAREHOLDERS’ EQUITY: Demand—interest-bearing $ 832,291 0.95 % $ 7,894 $ 705,488 0.77 % $ 5,451 $ 853,632 0.54 % $ 4,626 Savings 3,369,184 2.88 97,033 3,052,031 3.46 105,675 2,666,905 2.92 77,782 Time 921,467 3.87 35,638 570,911 3.92 22,367 517,017 2.97 15,362 Total interest-bearing deposits 5,122,942 2.74 140,565 4,328,430 3.08 133,493 4,037,554 2.42 97,770 Short-term borrowings 100,734 4.30 4,336 — — — 35,224 5.07 1,787 Finance lease liabilities 17,046 6.58 1,122 247 4.45 11 339 4.42 15 Subordinated notes and debentures 105,342 4.07 4,286 105,039 4.28 4,497 104,735 4.10 4,295 Total interest-bearing liabilities 5,346,064 2.81 $ 150,309 4,433,716 3.11 $ 138,001 4,177,852 2.49 $ 103,867 Demand—noninterest-bearing 965,942 781,780 793,713 Other liabilities 101,950 86,912 79,473 Total liabilities 6,413,956 5,302,408 5,051,038 Shareholders’ equity 723,241 592,550 550,333 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 7,137,197 $ 5,894,958 $ 5,601,371 Interest income/Earning assets 5.90 % $ 393,522 5.88 % $ 326,425 5.57 % $ 294,693 Interest expense/Interest-bearing liabilities 2.81 150,309 3.11 138,001 2.49 103,867 Net interest spread 3.09 % $ 243,213 2.77 % $ 188,424 3.08 % $ 190,826 Interest income/Earning assets 5.90 % $ 393,522 5.88 % $ 326,425 5.57 % $ 294,693 Interest expense/Earning assets 2.25 150,309 2.49 138,001 1.96 103,867 Net interest margin (fully tax-equivalent) 3.65 % $ 243,213 3.39 % $ 188,424 3.61 % $ 190,826 (1) Includes unamortized discounts and premiums. 43 Table of Contents (2) Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio.
Financial Condition The following table presents ending balances, growth, and the percentage change of certain measures of our financial condition for specified years (dollars in millions): 2024 Balance 2023 Balance $ Change vs. prior year % Change vs. prior year Total assets $ 6,192.0 $ 5,753.0 $ 439.1 7.6 % Total loans, net of allowance for credit losses 4,561.6 4,422.6 139.0 3.1 Total securities 785.1 740.2 44.9 6.1 Total deposits 5,371.4 4,998.8 372.6 7.5 Total shareholders’ equity 610.7 571.2 39.4 6.9 Cash and Cash Equivalents Cash and cash equivalents totaled $443.0 million at December 31, 2024, including $375.0 million held at the Federal Reserve, compared to $222.0 million at December 31, 2023.
Financial Condition The following table presents ending balances, growth, and the percentage change of certain measures of our financial condition for specified years (dollars in millions): 2025 Balance 2024 Balance $ Change vs. prior year % Change vs. prior year Total assets $ 8,396.4 $ 6,192.0 $ 2,204.4 35.6 % Total loans, net of allowance for credit losses 6,426.7 4,561.6 1,865.1 40.9 Total securities 837.3 785.1 52.2 6.7 Total deposits 7,027.1 5,371.4 1,655.7 30.8 Total shareholders’ equity 872.1 610.7 261.4 42.8 Cash and Cash Equivalents Cash and cash equivalents totaled $527.9 million at December 31, 2025, including $441.5 million held at the Federal Reserve, compared to $443.0 million at December 31, 2024.
Scheduled maturities of time deposits not covered by deposit insurance at December 31, 2024 were as follows: December 31, 2024 3 months or less $ 11,067 Over 3 through 6 months 8,059 Over 6 through 12 months 33,582 Over 12 months 5,622 Total $ 58,330 Borrowings Periodically, the Corporation utilizes term borrowings from the FHLB and other lenders to meet funding obligations or match fund certain loan assets.
Scheduled maturities of time deposits not covered by deposit insurance at December 31, 2025 were as follows: December 31, 2025 3 months or less $ 22,520 Over 3 through 6 months 12,835 Over 6 through 12 months 21,799 Over 12 months 18,653 Total $ 75,807 Borrowings Periodically, the Corporation utilizes term borrowings from the FHLB and other lenders to meet funding obligations or match fund certain loan assets.
The Corporation’s capital ratios and book value per common share at December 31, 2024 and 2023 were as follows: December 31, 2024 December 31, 2023 Total risk-based capital ratio 16.16 % 15.99 % Tier 1 capital ratio 13.41 % 13.20 % Common equity tier 1 ratio 11.76 % 11.49 % Leverage ratio 10.43 % 10.54 % Common shareholders' equity/total assets 8.93 % 8.93 % Tangible common equity/tangible assets (1) 8.28 % 8.22 % Book value per common share $ 26.34 $ 24.57 Tangible book value per common share (1) $ 24.24 $ 22.46 (1) Tangible common equity, tangible assets and tangible book value per common share are non-GAAP financial measures calculated using GAAP amounts.
The Corporation’s capital ratios and book value per common share at December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 Total risk-based capital ratio 14.78 % 16.16 % Tier 1 capital ratio 12.65 % 13.41 % Common equity tier 1 ratio 11.44 % 11.76 % Leverage ratio 9.87 % 10.43 % Common shareholders' equity/total assets 9.70 % 8.93 % Tangible common equity/tangible assets (1) 8.36 % 8.28 % Book value per common share $ 27.63 $ 26.34 Tangible book value per common share (1) $ 23.48 $ 24.24 (1) Tangible common equity, tangible assets and tangible book value per common share are non-GAAP financial measures calculated using GAAP amounts.
At December 31, 2023, the total estimated uninsured deposits for CNB Bank were approximately $1.4 billion, or approximately 28.21% of total CNB Bank deposits.
At December 31, 2024, the total estimated uninsured deposits for CNB Bank were approximately $1.5 billion, or approximately 27.71% of total CNB Bank deposits.
Although the Corporation’s strategies, through the Bank, are executed based on the divisions discussed above, the Bank is a single Pennsylvania-chartered bank whereby all divisions of the Bank conduct their business on a doing business as basis. In addition to the Bank, the Corporation has four other subsidiaries.
Impressia Bank, a division of the Bank, operates in the Bank’s primary market areas. Although the Corporation’s strategies, through the Bank, are executed based on the divisions discussed above, the Bank is a single Pennsylvania-chartered bank whereby all divisions of the Bank conduct their business on a doing business as basis.
At December 31, 2024, the Corporation’s cash and cash equivalents position was approximately $443.0 million, including liquidity of $375.0 million held at the Federal Reserve.
At December 31, 2025, the Corporation’s cash and cash equivalents position was approximately $527.9 million, including liquidity of $441.5 million held at the Federal Reserve.
As disclosed in "Allowance for Credit Losses" discussion above, management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, reasonable and supportable forecasts, and other significant qualitative and quantitative factors. 47 Table of Contents Management believes the charges to the provision for credit losses in 2024 were appropriate and the allowance for credit losses was adequate to absorb losses in the loan portfolio at December 31, 2024.
As disclosed in "Allowance for Credit Losses" discussion above, management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, reasonable and supportable forecasts, and other significant qualitative and quantitative factors.
Non-GAAP measures reflected within the discussion below include: • Tangible book value per common share; • Tangible common equity/tangible assets; • Net interest margin (fully tax equivalent basis); • Efficiency ratio; • Pre-provision net revenue ("PPNR"); and • Return on average tangible common equity.
Non-GAAP measures reflected within the discussion below include: • Tangible book value per common share; • Tangible common equity/tangible assets; • Adjusted net income available to common shareholders; 28 Table of Contents • Adjusted earnings per share; • Merger transaction related expenses, net of tax; • Net interest margin (fully tax equivalent basis) and Net interest margin excluding purchase accounting loan accretion (fully tax equivalent basis); • Efficiency ratio (fully tax equivalent basis) and Adjusted efficiency ratio (fully tax equivalent basis); • Pre-provision net revenue ("PPNR") and Adjusted PPNR; and • Return on average tangible common equity and Adjusted return on average tangible common equity.
BankOnBuffalo, a division of the Bank, operates in the New York counties of Erie, Niagara, and Ontario. Ridge View Bank, a division of the Bank, operates in the Virginia counties of Botetourt, Craig, Franklin, New River Valley, and Roanoke. Impressia Bank, a division of the Bank, operates in the Bank’s primary market areas.
BankOnBuffalo, a division of the Bank, operates in the New York counties of Erie, Niagara, and Ontario. Ridge View Bank, a division of the Bank, operates in the Virginia counties of Botetourt, Craig, Franklin, New River Valley, and Roanoke. ESSA Bank, a division of the Bank, operates in the Pennsylvania counties of Delaware, Chester, Lackawanna, Lehigh, Luzerne, Monroe, and Northampton.
The table below provides an allocation of the allowance for credit losses on loans by loan portfolio segment at December 31, 2024 and 2023; however, allocation of a portion of the allowance to one segment does not preclude its availability to absorb losses in other segments.
For additional information regarding the Corporation's accounting policies related to credit losses, refer to Note 1, "Summary of Significant Accounting Policies" and Note 4, "Loans and Allowance for Credit Losses" to these consolidated financial statements. 35 Table of Contents The table below provides an allocation of the allowance for credit losses on loans by loan portfolio segment at December 31, 2025 and 2024; however, allocation of a portion of the allowance to one segment does not preclude its availability to absorb losses in other segments.
The policies cover executive officers and a select group of other employees with the Bank being named as beneficiary. Earnings from BOLI assist the Corporation in offsetting its benefit costs. The Corporation made no purchases of BOLI during the years ended December 31, 2024 and December 31, 2023.
Bank Owned Life Insurance The Corporation has periodically purchased Bank Owned Life Insurance ("BOLI"). The policies cover executive officers, directors and a select group of other employees with the Bank being named as beneficiary. Earnings from BOLI assist the Corporation in offsetting its benefit costs.
Holiday, incorporated in Pennsylvania, offers small balance unsecured loans and secured loans, primarily collateralized by automobiles and equipment, to borrowers with higher risk characteristics. Merger with ESSA Bancorp, Inc. On January 9, 2025, the Corporation and CNB Bank entered into the Merger Agreement with ESSA and ESSA Bank, pursuant to which the Corporation will acquire ESSA in an all-stock transaction.
Holiday, incorporated in Pennsylvania, offers small balance unsecured loans and secured loans, primarily collateralized by automobiles and equipment, to borrowers with higher risk characteristics. Merger with ESSA Bancorp, Inc. On July 23, 2025, the Corporation completed its previously announced acquisition of ESSA and its subsidiary bank, ESSA Bank, pursuant to the Merger Agreement.
Under the terms of the Merger Agreement, each outstanding share of ESSA common stock will be converted into the right to receive 0.8547 shares of the Corporation’s common stock.
Banking offices of ESSA Bank operate under the trade name ESSA Bank, a division of CNB Bank. Pursuant to the Merger Agreement, each outstanding share of ESSA common stock was converted into the right to receive 0.8547 shares of the Corporation’s common stock.
December 31, 2024 Percent of Deposits in Each Category to Total Deposits December 31, 2023 Percent of Deposits in Each Category to Total Deposits Percentage change 2024 vs. 2023 Noninterest-bearing demand deposits $ 819,680 15.26 % $ 728,881 14.58 % 12.5% Interest-bearing demand deposits 706,796 13.16 803,093 16.07 (12.0) Savings 3,122,028 58.12 2,960,282 59.22 5.5 Certificates of deposit 722,860 13.46 506,494 10.13 42.7 Total $ 5,371,364 100.00 % $ 4,998,750 100.00 % 7.5% At December 31, 2024, total deposits were $5.4 billion, reflecting an increase of $372.6 million, or 7.45%, from December 31, 2023.
December 31, 2025 Percent of Deposits in Each Category to Total Deposits December 31, 2024 Percent of Deposits in Each Category to Total Deposits Percentage change 2025 vs. 2024 Noninterest-bearing demand deposits $ 1,092,076 15.54 % $ 819,680 15.26 % 33.2% Interest-bearing demand deposits 1,014,606 14.44 706,796 13.16 43.6 Savings 3,822,639 54.40 3,122,028 58.12 22.4 Certificates of deposit 1,097,788 15.62 722,860 13.46 51.9 Total $ 7,027,109 100.00 % $ 5,371,364 100.00 % 30.8% At December 31, 2025, total deposits were $7.0 billion, reflecting an increase of $1.7 billion, or 30.8%, from December 31, 2024.
Significant uncertainty persists regarding the domestic and global economy due to persistent inflation in certain segments of the U.S. economy, elevated interest rates, fluctuating levels of consumer confidence, and geopolitical conflicts. Management will continue to proactively evaluate its estimate of expected credit losses as new information becomes available.
Significant uncertainty continues to affect both the domestic and global economic outlook due to changes in U.S. tariffs and corresponding policy actions by trading partners, persistently elevated interest rates, fluctuating consumer confidence, and ongoing geopolitical conflicts. Management will continue to proactively reassess its estimate of expected credit losses as new information becomes available.
The changes resulted from an increase in the Corporation's retained earnings (net income, partially offset by the common and preferred stock dividends paid) and a decrease in accumulated other comprehensive loss primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’s AFS investment portfolio.
The increase resulted from an increase in additional paid in capital of $202.6 million related to the ESSA acquisition, and a decrease in accumulated other comprehensive loss, primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation's available-for-sale investment portfolio, and growth in earnings, partially offset by the payment of common and preferred stock dividends to the Corporation's shareholders during the year ended December 31, 2025.
Premises and Equipment During the years ended December 31, 2024 and 2023, the Corporation invested $16.3 million and $10.8 million, respectively, in its physical infrastructure through the purchase of land, buildings, and equipment. Bank Owned Life Insurance The Corporation has periodically purchased Bank Owned Life Insurance ("BOLI").
Premises and Equipment During the years ended December 31, 2025 and 2024, the Corporation invested $6.3 million and $16.3 million, respectively, in its physical infrastructure through the purchase of land, buildings, and equipment. The year ended December 31, 2025 includes premises and equipment related to the ESSA acquisition.
The terms of these borrowings are detailed in Note 10, "Borrowings," to the consolidated financial statements. There were no short-term FHLB borrowings as of December 31, 2024 and December 31, 2023.
The terms of these borrowings are detailed in Note 11, "Borrowings," to the consolidated financial statements. There were $164 million in short term FHLB borrowings as of December 31, 2025, compared to zero at December 31, 2024. The increase in short-term borrowings at December 31, 2025 compared to December 31, 2024 was attributable to borrowings assumed with the ESSA acquisition.
The effective tax rates were 19.22% and 19.21% for 2023 and 2022, respectively. The effective tax rate for the periods differed from the federal statutory rate of 21.0% principally as a result of tax-exempt income from securities and loans as well as earnings from bank owned life insurance.
The effective tax rate for the periods differed from the federal statutory rate of 21.0% principally as a result of tax-exempt income from securities and loans as well as earnings from bank owned life insurance. Off-Balance Sheet Arrangements Assets under management and assets under custody are held in fiduciary or custodial capacity for the Corporation's clients.
Funding Sources Deposits The Corporation’s sources of funds are deposits, borrowings, amortization and repayment of loan principal, interest earned on or maturation of investment securities, and funds provided from operations. The Corporation considers deposits to be its primary source of funding in support of growth in assets.
The Corporation made no purchases of BOLI during the years ended December 31, 2025 and December 31, 2024, respectively. Funding Sources Deposits The Corporation’s sources of funds are deposits, borrowings, amortization and repayment of loan principal, interest earned on or maturation of investment securities, and funds provided from operations.
December 31, 2024 Amount of Allowance Allocated Percent of Loans in Each Category to Total Loans Total Loans Ratio of Allowance Allocated to Loans in Each Category Farmland $ 167 0.67 % $ 31,099 0.54 % Owner-occupied, nonfarm nonresidential properties 5,696 11.18 515,208 1.11 Agricultural production and other loans to farmers 37 0.14 6,492 0.57 Commercial and Industrial 7,759 15.60 718,775 1.08 Obligations (other than securities and leases) of states and political subdivisions 1,369 3.05 140,430 0.97 Other loans 329 0.61 28,110 1.17 Other construction loans and all land development and other land loans 2,571 6.14 282,912 0.91 Multifamily (5 or more) residential properties 2,969 8.92 411,146 0.72 Non-owner occupied, nonfarm nonresidential properties 10,110 22.42 1,033,541 0.98 1-4 Family Construction 198 0.57 26,431 0.75 Home equity lines of credit 1,340 3.61 166,327 0.81 Residential Mortgages secured by first liens 8,958 21.97 1,012,746 0.88 Residential Mortgages secured by junior liens 1,343 2.31 106,462 1.26 Other revolving credit plans 960 0.89 41,095 2.34 Automobile 275 0.45 20,961 1.31 Other consumer 2,892 1.17 53,821 5.37 Credit cards 127 0.29 13,143 0.97 Overdrafts 257 0.01 257 100.00 Total loans $ 47,357 100.00 % $ 4,608,956 1.03 % 37 Table of Contents December 31, 2023 (1) Amount of Allowance Allocated Percent of Loans in Each Category to Total Loans Total Loans Ratio of Allowance Allocated to Loans in Each Category Farmland $ 138 0.76 % $ 33,485 0.41 % Owner-occupied, nonfarm nonresidential properties 4,131 11.46 511,910 0.81 Agricultural production and other loans to farmers 7 0.04 1,652 0.42 Commercial and Industrial 9,500 16.26 726,442 1.31 Obligations (other than securities and leases) of states and political subdivisions 2,627 3.41 152,201 1.73 Other loans 389 0.57 25,507 1.53 Other construction loans and all land development and other land loans 2,830 7.62 340,358 0.83 Multifamily (5 or more) residential properties 1,251 6.84 305,697 0.41 Non-owner occupied, nonfarm nonresidential properties 9,783 22.02 984,033 0.99 1-4 Family Construction 191 0.63 28,055 0.68 Home equity lines of credit 844 2.92 130,700 0.65 Residential Mortgages secured by first liens 8,274 22.50 1,005,335 0.82 Residential Mortgages secured by junior liens 1,487 2.04 91,240 1.63 Other revolving credit plans 977 0.96 42,877 2.28 Automobile 360 0.57 25,315 1.42 Other consumer 2,656 1.14 51,592 5.15 Credit cards 95 0.26 11,785 0.81 Overdrafts 292 0.01 292 100.00 Total loans $ 45,832 100.00 % $ 4,468,476 1.03 % (1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the amount of allowance allocated and total loans receivable columns disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.
December 31, 2025 Amount of Allowance Allocated Percent of Loans in Each Category to Total Loans Total Loans Ratio of Allowance Allocated to Loans in Each Category Farmland $ 162 0.43 % $ 27,583 0.59 % Owner-occupied, nonfarm nonresidential properties 6,176 9.80 636,444 0.97 Agricultural production and other loans to farmers 37 0.09 5,989 0.62 Loans to depository institutions 20 0.04 2,439 0.82 Commercial and Industrial 9,360 12.00 778,978 1.20 Obligations (other than securities and leases) of states and political subdivisions 1,823 2.64 171,486 1.06 Other loans 454 0.74 47,719 0.95 Other construction loans and all land development and other land loans 4,366 5.64 366,174 1.19 Multifamily (5 or more) residential properties 4,314 10.93 709,832 0.61 Non-owner occupied, nonfarm nonresidential properties 15,467 21.86 1,419,643 1.09 1-4 Family Construction 350 0.64 41,659 0.84 Home equity lines of credit 1,884 3.86 250,823 0.75 Residential Mortgages secured by first liens 15,910 27.15 1,763,071 0.90 Residential Mortgages secured by junior liens 1,732 2.17 140,790 1.23 Other revolving credit plans 1,222 0.75 48,953 2.50 Automobile 207 0.26 17,037 1.22 Other consumer 3,056 0.79 51,474 5.94 Credit cards 146 0.20 13,276 1.10 Overdrafts 369 0.01 370 99.73 Total loans $ 67,055 100.00 % $ 6,493,740 1.03 % December 31, 2024 Amount of Allowance Allocated Percent of Loans in Each Category to Total Loans Total Loans Ratio of Allowance Allocated to Loans in Each Category Farmland $ 167 0.67 % $ 31,099 0.54 % Owner-occupied, nonfarm nonresidential properties 5,696 11.18 515,208 1.11 Agricultural production and other loans to farmers 37 0.14 6,492 0.57 Commercial and Industrial 7,759 15.60 718,775 1.08 Obligations (other than securities and leases) of states and political subdivisions 1,369 3.05 140,430 0.97 Other loans 329 0.61 28,110 1.17 Other construction loans and all land development and other land loans 2,571 6.14 282,912 0.91 Multifamily (5 or more) residential properties 2,969 8.92 411,146 0.72 Non-owner occupied, nonfarm nonresidential properties 10,110 22.42 1,033,541 0.98 1-4 Family Construction 198 0.57 26,431 0.75 Home equity lines of credit 1,340 3.61 166,327 0.81 Residential Mortgages secured by first liens 8,958 21.97 1,012,746 0.88 Residential Mortgages secured by junior liens 1,343 2.31 106,462 1.26 Other revolving credit plans 960 0.89 41,095 2.34 Automobile 275 0.45 20,961 1.31 Other consumer 2,892 1.17 53,821 5.37 Credit cards 127 0.29 13,143 0.97 Overdrafts 257 0.01 257 100.00 Total loans $ 47,357 100.00 % $ 4,608,956 1.03 % The allowance for credit losses measured as a percentage of total loans was 1.03% as of December 31, 2025 and 2024. 36 Table of Contents The Corporation's allowance for credit losses is influenced by loan volumes, risk rating migration, delinquency status and other internal and external conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions and other external factors.
The adequacy of the allowance for credit losses is subject to a formal analysis by the Credit Administration and Finance Departments of the Corporation. For additional information regarding the Corporation's accounting policies related to credit losses, refer to Note 1, "Summary of Significant Accounting Policies" and Note 3, "Loans and Allowance for Credit Losses" to these consolidated financial statements.
The adequacy of the allowance for credit losses is subject to a formal analysis by the Credit Administration and Finance Departments of the Corporation.
Analysis of Year-to-Year Changes in Net Interest Income 2024 compared to 2023 2023 compared to 2022 Increase (Decrease) Due to Change in (1) Increase (Decrease) Due to Change in (1) Volume Rate Net Volume Rate Net Assets Securities: Taxable $ (462) $ 1,755 $ 1,293 $ (443) $ 649 $ 206 Tax-Exempt (2) (116) 3 (113) (152) (84) (236) Equity Securities (2) (150) 44 (106) 37 296 333 Total Securities (728) 1,802 1,074 (558) 861 303 Loans: Commercial (2) (4,015) 3,612 (403) 3,634 23,269 26,903 Mortgage (2) 8,911 11,128 20,039 19,645 27,378 47,023 Consumer 53 626 679 1,806 1,284 3,090 Total Loans 4,949 15,366 20,315 25,085 51,931 77,016 Other Earning Assets 12,052 (1,709) 10,343 (1,242) 3,643 2,401 Total Earning Assets $ 16,273 $ 15,459 $ 31,732 $ 23,285 $ 56,435 $ 79,720 Liabilities and Shareholders’ Equity Interest Bearing Deposits Demand – Interest Bearing $ (802) $ 1,627 $ 825 $ (417) $ 2,912 $ 2,495 Savings 11,367 16,526 27,893 1,516 63,494 65,010 Time 1,566 5,439 7,005 2,326 8,106 10,432 Total Interest Bearing Deposits 12,131 23,592 35,723 3,425 74,512 77,937 Short-Term Borrowings (1,787) — (1,787) 1,112 306 1,418 Finance Lease Liabilities (4) — (4) — — — Subordinated Debentures 12 190 202 (4) (1) (5) Total Interest Bearing Liabilities $ 10,352 $ 23,782 $ 34,134 $ 4,533 $ 74,817 $ 79,350 Change in Net Interest Income $ 5,921 $ (8,323) $ (2,402) $ 18,752 $ (18,382) $ 370 (1) The change in interest due to both volume and rate have been allocated entirely to volume changes.
Analysis of Year-to-Year Changes in Net Interest Income 2025 compared to 2024 2024 compared to 2023 Increase (Decrease) Due to Change in (1) Increase (Decrease) Due to Change in (1) Volume Rate Net Volume Rate Net Assets Securities: Taxable $ 1,747 $ 5,525 $ 7,272 $ (462) $ 1,755 $ 1,293 Tax-Exempt (2) (41) 10 (31) (116) 3 (113) Equity Securities (2) 421 62 483 (150) 44 (106) Total Securities 2,127 5,597 7,724 (728) 1,802 1,074 Loans: Commercial (2) 9,430 (1,264) 8,166 (4,015) 3,612 (403) Mortgage (2) 49,642 746 50,388 8,911 11,128 20,039 Consumer (310) (663) (973) 53 626 679 Total Loans 58,762 (1,181) 57,581 4,949 15,366 20,315 Other Earning Assets 5,478 (3,686) 1,792 12,052 (1,709) 10,343 Total Earning Assets $ 66,367 $ 730 $ 67,097 $ 16,273 $ 15,459 $ 31,732 Liabilities and Shareholders’ Equity Interest Bearing Deposits Demand – Interest Bearing $ 945 $ 1,498 $ 2,443 $ (802) $ 1,627 $ 825 Savings 10,899 (19,541) (8,642) 11,367 16,526 27,893 Time 13,732 (461) 13,271 1,566 5,439 7,005 Total Interest Bearing Deposits 25,576 (18,504) 7,072 12,131 23,592 35,723 Short-Term Borrowings 4,336 — 4,336 (1,787) — (1,787) Finance Lease Liabilities 748 363 1,111 (4) — (4) Subordinated Debentures 10 (221) (211) 12 190 202 Total Interest Bearing Liabilities $ 30,670 $ (18,362) $ 12,308 $ 10,352 $ 23,782 $ 34,134 Change in Net Interest Income $ 35,697 $ 19,092 $ 54,789 $ 5,921 $ (8,323) $ (2,402) (1) The change in interest due to both volume and rate have been allocated entirely to volume changes.
Included in the provision for credit losses for the year ended December 31, 2023 was $156 thousand expense related to the allowance for unfunded commitments compared to $603 thousand for the year ended December 31, 2022. Net loan charge-offs were $3.4 million during the year ended December 31, 2023, compared to $2.1 million during the year ended December 31, 2022.
Included in the provision for credit losses for the year ended December 31, 2025 was a $208 thousand expense related to the allowance for unfunded commitments compared to $185 thousand for the year ended December 31, 2024.
The Corporation’s objective is to maintain the investment securities portfolio at an appropriate level to balance the earnings and liquidity provided by the portfolio.
Investments classified as held-to-maturity ("HTM") securities totaled $242.1 million and $306.1 million at December 31, 2025 and 2024, respectively. 29 Table of Contents The Corporation’s objective is to maintain the investment securities portfolio at an appropriate level to balance the earnings and liquidity provided by the portfolio.
The Corporation’s material contractual obligations as of December 31, 2024 consist of (i) long-term borrowings - Note 10, "Borrowings," (ii) operating leases - Note 7, "Leases," (iii) time deposits with stated maturity dates - Note 9, "Deposits," and (iv) commitments to extend credit and standby letters of credit - Note 18, "Off-Balance Sheet Commitments and Contingencies." 43 Table of Contents Shareholders’ Equity, Capital Ratios and Metrics Shareholders' Equity On September 21, 2022, the Corporation successfully completed a common stock offering resulting in the issuance of 4,257,446 shares of common stock at $23.50 per share and net proceeds of $94.1 million after deducting the underwriting discount and customary offering expenses.
The Corporation’s material contractual obligations as of December 31, 2025 consist of (i) long-term borrowings - Note 11, "Borrowings," (ii) operating and finance leases - Note 8, "Leases," (iii) time deposits with stated maturity dates - Note 10, "Deposits," and (iv) commitments to extend credit and standby letters of credit - Note 19, "Off-Balance Sheet Commitments and Contingencies." 41 Table of Contents Shareholders’ Equity, Capital Ratios and Metrics Shareholders' Equity As of December 31, 2025, the Corporation’s total shareholders’ equity was $872.1 million, representing an increase of $261.4 million, or 42.81%, from December 31, 2024.
Government Sponsored Entities 2.18 Residential and multi-family mortgage 4.90 Total 2.86 The portfolio contains no holdings of a single issuer that exceeds 10% of shareholders’ equity other than U.S. government sponsored entities. 31 Table of Contents The Corporation generally purchases debt securities over time and does not attempt to "time" its transactions, which allows for more efficient management of fluctuations in the interest rate environment.
Government Sponsored Entities 1.76 Residential and multi-family mortgage 4.79 Total 2.57 30 Table of Contents The portfolio contains no holdings of a single issuer that exceeds 10% of shareholders’ equity other than U.S. government sponsored entities.
The syndicated loan portfolio totaled $79.9 million, or 1.73% of total loans at December 31, 2024, compared to $108.7 million, or 2.43% of total loans, at December 31, 2023. Loan Origination/Risk Management The Corporation has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk.
Loan Origination/Risk Management The Corporation has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe changes to net interest income shown below are in compliance with the Corporation’s policy guidelines. % Change in Net Interest Income Change in Basis Points December 31, 2024 December 31, 2023 300 (0.2)% 2.6% 200 0.5% 3.8% 100 0.5% 4.6% (100) (1.1)% (3.8)% (200) (1.4)% (6.5)% (300) (3.3)% (12.8)% At December 31, 2024, the Corporation has approximately $2.5 billion in outstanding loan balances that are rate sensitive over the next twelve months. 55 Table of Contents
Biggest changeThe changes to net interest income shown below are in compliance with the Corporation’s policy guidelines. % Change in Net Interest Income Change in Basis Points December 31, 2025 December 31, 2024 300 1.6% (0.2)% 200 1.5% 0.5% 100 1.0% 0.5% (100) (1.8)% (1.1)% (200) (2.0)% (1.4)% (300) (2.8)% (3.3)% At December 31, 2025, the Corporation has approximately $4.1 billion in outstanding loan balances that are rate sensitive over the next twelve months. 56 Table of Contents

Other CCNE 10-K year-over-year comparisons