Investor Meetings August 2014 Exhibit 99.1 |
Forward-Looking Statements This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, liquidity, results of operations, future performance and business of CNB Financial Corporation. These forward-looking statements are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that are not historical facts. Forward-looking statements include statements with respect to beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors (some of which are beyond our control). Forward-looking statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would” and “could.” 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) changes in general business, industry or economic conditions or competition; (ii) 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; (iii) adverse changes or conditions in capital and financial markets; (iv) changes in interest rates; (v) higher than expected costs or other difficulties related to integration of combined or merged businesses; (vi) the inability to realize expected cost savings or achieve other anticipated benefits in connection with business combinations and other acquisitions; (vii) changes in the quality or composition of our loan and investment portfolios; (viii) adequacy of loan loss reserves; (ix) increased competition; (x) loss of certain key officers; (xi) continued relationships with major customers; (xii) deposit attrition; (xiii) rapidly changing technology; (xiv) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xv) changes in the cost of funds, demand for loan products or demand for financial services; and (xvi) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices. Such developments could have an adverse impact on our financial position and our results of operations. The forward-looking statements are based upon management’s beliefs and assumptions. Any forward-looking statement made herein speaks only as of the date of this presentation. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. 2 |
CNB Financial Overview 3 Source: SNL Financial and company data. Information and data as of June 30, 2014 CNB Financial is a full-service bank, headquartered in Clearfield, PA, providing services, including wealth and asset management, to individuals, businesses, governments, and institutional customers As of June 30, 2014: Operates 36 branches in North Central Pennsylvania and Ohio through its principal subsidiary, CNB Bank CNB Bank is a regional independent community bank operating: NASDAQ-listed under the symbol “CCNE” • Assets: $2.2 billion • Loans: $1.3 billion • Deposits: $1.9 billion • 21 branches in North Central Pennsylvania • 7 full-service branches through ERIEBANK, a division of CNB Bank headquartered in Erie, PA • 8 full-service branches through its newest division FCBank, headquartered in Bucyrus, Ohio • Holiday Financial Services: Consumer loan company with 12 offices |
Strong Balance Sheet Growth • Successfully closed on previously announced acquisition of FC Banc Corp. during the fourth quarter of 2013 • Loans of $1.3 billion at June 30, 2014 represent 33.1% growth over June 30, 2013, comprised of 25.2% from the FC acquisition and organic growth of 7.9% • Deposits of $1.9 billion at June 30, 2014 represent 19.7% growth over June 30, 2013, which is primarily attributable to the FC Banc Corp. acquisition Profitability • Net income of $10.8 million for the six months ended June 20, 2014, up 48.8% from the first six months of 2013 • Return on assets of 1.01% and return on equity of 12.28%, as compared to 0.80% and 10.04% at June 30, 2013 • Net interest margin of 3.79%, up from 3.39% at June 30, 2013 Superior Asset Quality • Nonperforming assets to total assets of 0.62% • Net charge-offs to average loans of 0.21% • Allowance for loan losses to loans of 1.33% Capital • Tangible common equity to tangible assets of 6.87%* • Leverage ratio of 8.13% • Tier 1 Risk Based Ratio of 12.83% • Total Risk Based Capital Ratio of 14.07% Financial Highlights – YTD 2014 4 Note: Financial data as of or for the six months ended June 30, 2014 *Please see the Appendix for a reconciliation of non-GAAP financial information. |
2014 Initiatives Opened a CNB Bank loan production office in Blair County, PA in April Opened a FCBank full-service branch in Dublin, OH in July Construction of new ERIEBANK full-service branch in Erie, PA that is scheduled to open prior to the end of 2014 |
History of CNB Financial 6 1865 1934 1984 2005 2006 2008 2009 2010 2013 1865: County National Bank of Clearfield established 1934: Reorganizes through a stock offering to existing depositors 1984: Forms CNB Financial Corporation holding company 2005: ERIEBANK is formed 2005: Purchases assets of Holiday Consumer Discount Company and forms Holiday Financial Services Corporation 2006: Conversion to a state banking charter 2010: Joseph Bower becomes CEO after retirement of William Falger 2008-2009: Receives approval to raise $21 million via TARP; CNB chooses not to participate 2010: Capital raise of $34.5 million 2013: Acquisition of FC Banc Corp. headquartered in Bucyrus, Ohio with $360 million in assets |
ERIEBANK, a division of CNB Bank, was created de novo in 2005 7 At June 30, 2014: Seven branches $396 million in loans $603 million in deposits |
Expansion into Ohio • The acquisition of FC Banc Corp., which closed in the fourth quarter of 2013, expanded CNB’s geographic footprint into Central Ohio with meaningful size and scale – Entry into 5 new markets, similar to those that CNB currently serves, with dominant market share position – $360 million in total assets; $248 million in loans; and $332 million in deposits as of October 11, 2013 • Opportunity to replicate CNB’s already successful ERIEBANK model in a market conducive to CNB’s business plan • Significant opportunity for both organic and strategic growth going forward • Significant accretion to EPS expected in the first full combined year without significant TBV dilution – 5.4% EPS accretion expected in first full year with TBV dilution earned back by the end of 2014 8 |
CNB’s Experienced Management Team Years at Years in Executive Title CCNE Industry Joseph B. Bower Jr. President & Chief Executive Officer 17 21 Richard L. Greslick Jr. EVP / Chief Operating Officer & Secretary 16 16 Joseph E. Dell Jr. SVP / Chief Lending Officer 1 30 Mark D. Breakey EVP / Chief Credit Officer 23 29 Brian W. Wingard SVP / Chief Financial Officer & Treasurer 6 6 Vincent C. Turiano SVP / Operations 5 41 Leanne D. Kasseb SVP / Marketing 18 20 Mary Ann Conaway SVP / Human Resources 32 32 David J. Zimmer President of ERIEBANK 9 30 J. Andrew Dale President of FC Bank 1 27 9 |
CNB Stock Price Performance Since its follow-on offering in 2010, CNB has outperformed the NASDAQ Bank Index Source: SNL Financial. Price change from 6/14/10 to 7/15/14 10 |
Strong Organic Loan and Deposit Growth 11 Strong organic loan and deposit growth through the financial crisis and recession Fundamental focus on originating loans in-market and funding with local, low-cost core deposits while maintaining asset quality The Bank strives to be more customer- driven than its competitors and builds long-term customer relationships by being reliable and competitively priced Loans and deposits at June 30, 2014 are relatively flat compared to year-end 2013 Loan and deposit growth for the first six months of 2014 was 2.35% and 1.81%, respectively, within CNB’s historical markets Loans and deposits acquired from FC Banc Corp. have run off 4.81% and 3.55%, respectively, since December 31, 2013, within our expectations During the next 12 months, CNB anticipates moderate loan and deposit growth across all of its markets Total Loans Total Deposits |
0 0 0 0 Residential Mortgage 36.4% Commercial Real Estate 26.1% C&I 32.2% Consumer 5.3% 6/30/14 Diversified Loan Portfolio 0 0 0.00 0 Residential Mortgage 33.2% Commercial Real Estate 26.8% C&I 32.4% Consumer 7.6% 12/31/10 $795 million 6.43% yield $1.3 billion 5.31% yield 12 |
0 0 0.00 0 Non- interest Bearing 12.2% MMDA & Savings 77.0% Retail CDs 6.2% Jumbo CDs 4.6% 6/30/14 Attractive Deposit Mix $1.2 billion 1.42% cost of deposits $1.9 billion 0.52% cost of deposits 0 0 0.00 0 Non- interest Bearing 12.1% MMDA & Savings 56.1% Retail CDs 17.5% Jumbo CDs 14.2% 12/31/10 13 |
Deposit Market Share Source: SNL Financial. Deposit market share as of June 30, 2013 CNB Growth Market Growth Market Rank # of Branches CNB Deposits ($000) CNB Deposit Market Share (%) Year over Year (%) 5-Year CAGR (%) Total Deposits in Market ($000) Year over Year (%) 5-Year CAGR (%) Clearfield, PA 1 11 449,038 33.96 3.26 2.52 1,322,107 0.06 0.19 Erie, PA 5 4 426,736 10.09 6.13 51.94 4,228,343 3.57 5.56 Elk, PA 2 4 165,653 24.09 3.34 11.21 687,547 2.05 1.29 Crawford, OH 2 2 132,660 17.81 6.93 5.52 744,874 0.46 1.20 Crawford, PA 5 2 124,153 10.17 39.24 - 1,220,579 4.25 2.68 Mc Kean, PA 3 3 122,177 14.73 3.55 10.75 829,566 2.69 4.91 Franklin, OH 17 2 111,671 0.26 0.47 23.97 42,412,438 6.91 10.37 Centre, PA 9 1 84,641 3.16 7.94 11.64 2,680,576 7.21 7.26 Jefferson, PA 5 1 60,432 6.79 0.54 11.50 890,119 (1.18) 1.29 Warren, PA 4 1 59,694 7.03 (3.01) 33.49 848,819 5.83 4.70 Cambria, PA 10 1 51,717 1.87 0.87 6.33 2,770,851 (0.21) 2.47 Knox, OH 6 1 36,705 4.98 5.30 12.63 736,557 2.55 3.39 Morrow, OH 4 1 32,294 16.34 1.23 7.16 197,582 3.78 2.29 Richland, OH 13 1 10,753 0.63 10.32 - 1,705,766 (2.10) 1.43 Holmes, OH 9 1 2,880 0.39 - - 730,505 3.50 6.27 Indiana, PA 9 1 2,645 0.11 - - 2,436,997 20.10 4.62 Total 37 1,873,849 2.91 6.02 14.83 64,443,226 5.93 7.82 14 |
Improved Profitability * Note 2013 full year net income includes one-time merger costs related to the acquisition of FC Banc Corp 15 0 0 0 0 $5,235 $8,512 $11,316 $15,104 $17,136 $16,679 $10,783 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y* 2014 YTD Net Income 5-Year CAGR +27.7% 0 0 0 0 0.55 0.79 0.87 1.00 1.00 0.88 1.01 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y 2014 YTD ROAA 0 0 0 0 $0.61 $0.98 $1.06 $1.23 $1.38 $1.29 $0.75 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y* 2014 YTD Diluted EPS 5-Year CAGR +16.2% 0 0 0 0 64.83 59.91 58.54 54.96 53.67 58.19 58.16 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y 2014 YTD Efficiency Ratio |
Stable Net Interest Margin 16 0 0 0 0 4.33 4.00 3.65 3.59 3.49 3.47 3.79 6.74 5.86 5.22 4.80 4.35 4.15 4.40 2.64 2.07 1.78 1.44 1.08 0.79 0.71 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y 2014 YTD Net Interest Margin Yield on Interest Earning Assets Cost of Interest Bearing Liabilities |
Superior Asset Quality Source: SNL Financial. NPAs excluded restructured loans. Texas ratio defined as NPA & Loans 90+/ Tangible Common Equity* + Allowance for Loan Losses. * Please see the Appendix for a reconciliation of non-GAAP financial information 17 0 0 0 0 0.42 1.17 0.93 1.09 0.85 0.62 0.62 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y Jun-14 NPAs/Assets 0 0 0 0 0.28 0.49 0.56 0.38 0.55 0.38 0.21 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y 2014 YTD NCOs/Average Loans 0 0 0 0 1.29 1.37 1.35 1.48 1.51 1.25 1.33 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y Jun-14 Allowance for Loan Losses/ Gross Loans 0 0 0 0 7.06 20.30 14.82 18.85 16.90 8.64 8.18 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y Jun-14 Texas Ratio |
Strong Capital Levels 18 * Please see the Appendix for a reconciliation of non-GAAP financial information. 0 0 0 0 5.12 5.08 7.05 7.61 7.63 6.34 6.87 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y Jun-14 Tangible Common Equity/Tangible Assets* 0 0 0 0 8.40 7.87 8.81 8.22 8.06 7.96 8.13 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y Jun-14 Leverage Ratio 0 0 0 0 10.80 10.70 14.13 13.89 14.03 12.51 12.83 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y Jun-14 Tier 1 Risk Based Ratio 0 0 0 0 12.00 11.95 15.38 15.14 15.28 13.72 14.07 2008Y 2009Y 2010Y 2011Y 2012Y 2013Y Jun-14 Total Risk Based Ratio |
CNB’s Growth Strategy Organic / De Novo Growth Strategy Acquisition Strategy Expand our presence into new markets that fit our business model (i.e. FCBank) Bring significant talent 19 FCBank market provides for organic growth through new offices and additional lenders ERIEBANK growth continues to be strong Continue to open loan production offices to fill-in our markets M&A is not a priority in our growth strategy; however, we will remain opportunistic and would consider a transaction that would: |
Appendix 20 |
Non-GAAP Financial Reconciliation Tangible common equity to tangible assets is a non-GAAP financial measure calculated using GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of shareholders’ equity. Tangible assets is calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets. CNB believes that this non-GAAP financial measure provides information to investors that is useful in understanding our financial condition. Because not all companies use the same calculations of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. A reconciliation of this non-GAAP financial measure is provided below. 21 Year ended December 31, ($ in thousands) 2008 2009 2010 2011 2012 2013 June 30, 2014 Total Shareholders' Equity $62,467 $69,409 $109,645 $131,889 $145,364 $164,911 $177,186 Less Goodwill 10,821 10,821 10,821 10,821 10,946 27,194 27,194 Less Other Intangible Assets 185 85 - - - 4,583 3,979 Tangible Common Equity $51,461 $58,503 $98,824 $121,068 $134,418 $133,134 $146,013 Total Assets $1,016,518 $1,161,591 $1,413,511 $1,602,207 $1,773,079 $2,131,289 $2,156,665 Less Goodwill 10,821 10,821 10,821 10,821 10,946 27,194 27,194 Less Other Intangible Assets 185 85 - - - 4,583 �� 3,979 Tangible Assets $1,005,512 $1,150,685 $1,402,690 $1,591,386 $1,762,133 $2,099,512 $2,125,492 Total Shareholders' Equity / Total Assets 6.15% 5.98% 7.76% 8.23% 8.20% 7.74% 8.22% Tangible Common Equity / Tangible Assets 5.12% 5.08% 7.05% 7.61% 7.63% 6.34% 6.87% |