CNB Financial (CCNE) 8-K CNB Financial Corporation Reports 2014 Earnings

Exhibit 99.1

News Release
	Contact:	Brian W. Wingard
		Treasurer
		(814) 765-9621
		FOR IMMEDIATE RELEASE

CNB FINANCIAL CORPORATION REPORTS 2014 EARNINGS

Clearfield, Pennsylvania – January 30, 2015

CNB Financial Corporation (“CNB”) (NASDAQ: CCNE), the parent company of CNB Bank, today announced its earnings for the year ended December 31, 2014. Highlights include the following:

• Net income of $23.1 million for the year ended December 31, 2014, or $1.60 per share, a 38% increase in net income and a 24% increase in diluted earnings per share over the year ended December 31, 2013.

• Loans of $1.36 billion at December 31, 2014, an increase of $59.9 million, or 4.6%, compared to December 31, 2013.

• Returns on average assets and equity of 1.07% and 12.76%, respectively, for the year ended December 31, 2014.

• Tangible book value per share of $10.91 per share as of December 31, 2014, an increase of 18.2% over tangible book value per share of $9.23 at December 31, 2013.

• Net interest margin of 3.82% for the year ended December 31, 2014, compared to 3.47% for the year ended December 31, 2013.

• Non-performing assets of $10.2 million, or 0.47% of total assets as of December 31, 2014, compared to $12.9 million, or 0.61% of total assets, at December 31, 2013.

Joseph B. Bower, Jr., President and CEO commented, “We are pleased to report record earnings of $23.1 million in 2014, resulting in a return on average equity to our shareholders of 12.76%. This past year, CNB focused on the integration of the recent acquisition of FCBank. Our challenges were to manage the asset quality to appropriate levels while instilling our culture of true relationship banking into the marketplace. We feel we have been very successful in both areas as our asset quality metrics are well below peer groups and our culture has already begun to pay dividends in the market.”

Net Interest Income and Margin

Net interest margin on a fully tax equivalent basis was 3.94% and 3.82% for the three months and year ended December 31, 2014, compared to 3.70% and 3.47% for the three months and year ended December 31, 2013. Net accretion included in loan interest income related to loans acquired in the fourth quarter of 2013 was $1.2 million and $2.9 million for the three months and year ended December 31, 2014, resulting in an increase in the net interest margin of 23 basis points and 14 basis points, respectively. Changes in average earning assets, interest-bearing liabilities, and resulting interest income in 2014 compared to 2013 are primarily a result of the acquisition of FC Banc Corp. in the fourth quarter of 2013.

Asset Quality

During the year ended December 31, 2014, CNB recorded a provision for loan losses of $3.8 million, as compared to a provision for loan losses of $6.1 million for the year ended December 31, 2013. The provision for loan losses was $282 thousand and $1.2 million for the three months ended December 31, 2014 and 2013, respectively. Net chargeoffs during the year ended December 31, 2014 were $2.7 million, as compared to net chargeoffs of $4.0 million during the year ended December 31, 2013, and the ratio of net chargeoffs to average loans was 0.21% and 0.38% for the years ended December 31, 2014 and 2013, respectively.

During the fourth quarter, the CNB recorded an additional reserve for an impaired commercial real estate loan of $652 thousand. The ratio of nonperforming assets to total assets declined from 0.55% at September 30, 2014 to 0.47% at December 31, 2014. In addition, two commercial and industrial loan relationships that had previously been classified as substandard totaling $11.4 million were paid in full during the quarter ended December 31, 2014, resulting in a reduction of the allowance for loan losses of $1.3 million.

Non-Interest Income

Excluding the effects of securities transactions, non-interest income was $13.8 million for the year ended December 31, 2014, compared to $12.7 million for the year ended December 31, 2013. Net realized gains on available-for-sale securities were $429 thousand during the year ended December 31, 2014, compared to $355 thousand during the year ended December 31, 2013. Net realized and unrealized gains on trading securities were $121 thousand during the year ended December 31, 2014, compared to $728 thousand during the year ended December 31, 2013.

Wealth and asset management fees increased to $2.9 million for the year ended December 31, 2014, from $2.4 million during the year ended December 31, 2013 due to increases in assets under management resulting from CNB’s strategic focus to grow its Wealth and Asset Management Division. Income recorded from bank owned life insurance policies decreased to $1.0 million for the year ended December 31, 2014, from $1.6 million during the year ended December 31, 2013. The 2013 income included $576 thousand representing the excess of the face value of certain policies over their cash surrender values resulting from the maturity of the policies.

Non-Interest Expenses

Total non-interest expenses were $52.7 million during the year ended December 31, 2014, compared to $43.8 million during the year ended December 31, 2013. CNB recorded amortization expense associated with a core deposit intangible asset of $1.2 million and $251 thousand during the years ended December 31, 2014 and 2013, respectively. Non-interest expenses for the year ended December 31, 2013 include merger-related expenses of $2.4 million in connection with CNB’s acquisition of FC Banc Corp. in the fourth quarter of 2013.

Salaries and benefits expenses increased $5.3 million, or 24.3%, during the year ended December 31, 2014 compared to the year ended December 31, 2013, due to an increase in average full-time equivalent employees resulting primarily from the acquisition of FC Banc Corp., routine merit increases, and increases in certain employee benefit expenses, such as health insurance premiums, which continue to increase in line with market conditions. Net occupancy expenses increased $1.4 million, or 25.5% during the year ended December 31, 2014 compared to the year ended December 31, 2013, as a result of anticipated increases in repair, maintenance, and utility expenses, increases in depreciation expense for recently completed projects and asset purchases, and the addition of eight branch locations from the acquisition of FC Banc Corp. Other non-interest expenses increased $3.6 million, or 28.5%, during the year ended December 31, 2014 compared to the year ended December 31, 2013, primarily as a result of the acquisition of FC Banc Corp.

The ratio of non-interest expenses to average assets was 2.43% and 2.31% during the years ended December 31, 2014 and 2013, respectively.

About CNB Financial Corporation

CNB Financial Corporation is a financial holding company with consolidated assets of approximately $2.2 billion that conducts business primarily through CNB Bank, CNB’s principal subsidiary. CNB Bank is a full-service bank engaging in a full range of banking activities and services, including trust and wealth management services, for individual, business, governmental, and institutional customers. CNB Bank operations include a private banking division, loan production offices in Hollidaysburg, Pennsylvania and Ashtabula, Ohio, and 28 full-service offices in Pennsylvania, including ERIEBANK, a division of CNB Bank, as well as 9 full-service offices in central Ohio conducting business as FCBank, a division of CNB Bank. More information about CNB and CNB Bank may be found on the internet atwww.bankcnb.com.

Forward-Looking Statements

This press release 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 CNB’s financial condition, liquidity, results of operations, future performance and business. 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 CNB’s 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.” CNB’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. For more information about factors that could cause actual results to differ from those discussed in the forward-looking statements, please refer to the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of and forward-looking statement disclaimers in CNB’s annual and quarterly reports.

The forward-looking statements are based upon management’s beliefs and assumptions and are made as of the date of this press release. CNB undertakes no obligation to publicly update or revise any forward-looking statements included in this press release or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise, except to the extent required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur and you should not put undue reliance on any forward-looking statements.

Financial Tables

The following tables supplement the financial highlights described previously for CNB Financial Corporation.

	(unaudited)
	Three Months Ended									Twelve Months Ended
	December 31,									December 31,
	(Dollars in thousands, except share and per share data)
										(unaudited)
	2014			2013			% change			2014			2013			% change
Income Statement
Interest income	$	22,495		$	20,489			9.8	%	$	86,882		$	71,416			21.7	%
Interest expense		3,063			3,210			-4.6	%		12,287			12,212			0.6	%
Net interest income		19,432			17,279			12.5	%		74,595			59,204			26.0	%
Provision for loan losses		282			1,247			-77.4	%		3,840			6,138			-37.4	%
Net interest income after provision for loan losses		19,150			16,032			19.4	%		70,755			53,066			33.3	%
Non-interest income
Wealth and asset management fees		725			699			3.7	%		2,860			2,426			17.9	%
Service charges on deposit accounts		1,176			1,209			-2.7	%		4,560			4,272			6.7	%
Other service charges and fees		809			618			30.9	%		2,809			2,179			28.9	%
Net realized gains on available-for-sale securities		184			27			581.5	%		429			355			20.8	%
Net realized and unrealized gains on trading securities		106			231			-54.1	%		121			728			-83.4	%
Mortgage banking		279			307			-9.1	%		781			940			-16.9	%
Bank owned life insurance		340			110			209.1	%		1,041			1,552			-32.9	%
Other		487			475			2.5	%		1,720			1,314			30.9	%
Total non-interest income		4,106			3,676			11.7	%		14,321			13,766			4.0	%
Non-interest expenses
Salaries and benefits		7,151			5,900			21.2	%		26,991			21,717			24.3	%
Net occupancy expense of premises		1,695			1,674			1.3	%		6,911			5,506			25.5	%
FDIC insurance premiums		296			336			-11.9	%		1,322			1,266			4.4	%
Merger costs		—			1,067			NA			—			2,396			NA
Intangible amortization		274			251			9.2	%		1,180			251			370.1	%
Other		4,253			3,767			12.9	%		16,284			12,677			28.5	%
Total non-interest expenses		13,669			12,995			5.2	%		52,688			43,813			20.3	%
Income before income taxes		9,587			6,713			42.8	%		32,388			23,019			40.7	%
Income tax expense		2,844			1,985			43.3	%		9,314			6,340			46.9	%
Net income	$	6,743		$	4,728			42.6	%	$	23,074		$	16,679			38.3	%
Average diluted shares outstanding		14,340,919			14,146,379						14,360,278			12,880,636
Diluted earnings per share	$	0.47		$	0.33			42.4	%	$	1.60		$	1.29			24.0	%
Cash dividends per share	$	0.165		$	0.165			0.0	%	$	0.66		$	0.66			0.0	%
Payout ratio		35	%		50	%					41	%		51	%
Average Balances
Loans, net of unearned income	$	1,329,958		$	1,291,482					$	1,316,745			1,052,429
Total earning assets		2,060,641			1,997,675						2,025,080			1,792,773
Total assets		2,191,695			2,134,875						2,161,076			1,894,861
Total deposits		1,855,266			1,842,866						1,843,476			1,613,982
Shareholders’ equity		188,501			167,529						180,776			146,563

Performance Ratios (quarterly information annualized)
Return on average assets		1.23	%		0.89	%		1.07	%		0.88	%
Return on average equity		14.31	%		11.29	%		12.76	%		11.38	%
Net interest margin (FTE)		3.94	%		3.70	%		3.82	%		3.47	%
Loan Charge-Offs
Net loan charge-offs	$	751		$	2,230		$	2,708		$	3,964
Net loan charge-offs / average loans		0.23	%		0.69	%		0.21	%		0.38	%

	(unaudited)			(unaudited)
	December 31,			September 30,			December 31,			% change versus
	2014			2014			2013			9/30/14			12/31/13
	(Dollars in thousands, except share and per share data)
Ending Balance Sheet
Loans, net of unearned income	$	1,355,289		$	1,326,375		$	1,295,363			2.2	%		4.6	%
Loans held for sale		887			1,290			487			-31.2	%		82.1	%
Investment securities		690,225			703,806			690,118			-1.9	%		0.0	%
FHLB and other equity interests		6,695			8,491			7,533			-21.2	%		-11.1	%
Other earning assets		3,633			3,553			4,139			2.3	%		-12.2	%
Total earning assets		2,056,729			2,043,515			1,997,640			0.6	%		3.0	%
Allowance for loan losses		(17,373	)		(17,843	)		(16,234	)		-2.6	%		7.0	%
Goodwill		27,194			27,194			27,194			0.0	%		0.0	%
Core deposit intangible		3,403			3,677			4,583			-7.5	%		-25.7	%
Other assets		119,260			116,431			118,106			2.4	%		1.0	%
Total assets	$	2,189,213		$	2,172,974		$	2,131,289			0.7	%		2.7	%
Non interest-bearing deposits	$	244,743		$	245,914		$	221,293			-0.5	%		10.6	%
Interest-bearing deposits		1,602,336			1,620,950			1,614,021			-1.1	%		-0.7	%
Total deposits		1,847,079			1,866,864			1,835,314			-1.1	%		0.6	%
Borrowings		111,695			83,877			87,950			33.2	%		27.0	%
Subordinated debt		20,620			20,620			20,620			0.0	%		0.0	%
Other liabilities		21,271			19,996			22,494			6.4	%		-5.4	%
Common stock		—			—			—			NA			NA
Additional paid in capital		78,022			77,892			77,923			0.2	%		0.1	%
Retained earnings		110,619			106,252			97,066			4.1	%		14.0	%
Treasury stock		(1,152	)		(1,742	)		(633	)		-33.9	%		82.0	%
Accumulated other comprehensive loss		1,059			(785	)		(9,445	)		-234.9	%		-111.2	%
Total shareholders’ equity		188,548			181,617			164,911			3.8	%		14.3	%
Total liabilities and shareholders’ equity	$	2,189,213		$	2,172,974		$	2,131,289			0.7	%		2.7	%
Ending shares outstanding		14,473,482			14,368,413			14,427,780
Book value per share	$	13.03		$	12.64		$	11.43
Tangible book value per share (*)	$	10.91		$	10.49		$	9.23
Capital Ratios
Tangible common equity / tangible assets (*)		7.32	%		7.04	%		6.34	%
Leverage ratio		8.39	%		8.22	%		7.96	%
Tier 1 risk based ratio		13.06	%		12.99	%		12.51	%
Total risk based ratio		14.31	%		14.24	%		13.72	%

Asset Quality
Non-accrual loans	$	9,190		$	10,412		$	11,573
Loans 90+ days past due and accruing		213			350			344
Total non-performing loans		9,403			10,762			11,917
Other real estate owned		806			1,101			986
Total non-performing assets	$	10,209		$	11,863		$	12,903
Loans modified in a troubled debt restructuring (TDR):
Performing TDR loans	$	14,771		$	7,705		$	8,006
Non-performing TDR loans **		3,887			3,957			4,130
Total TDR loans	$	18,658		$	11,662		$	12,136
Non-performing assets / Loans + OREO		0.75	%		0.89	%		1.00	%
Non-performing assets / Total assets		0.47	%		0.55	%		0.61	%
Allowance for loan losses / Loans		1.28	%		1.35	%		1.25	%

* - Tangible common equity, tangible assets and tangible book value per share are non-GAAP financial measures calculated using GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets from the calculation of stockholders’ equity. Tangible assets is calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets. Tangible book value per share is calculated by dividing tangible common equity by the number of shares outstanding. CNB believes that these non-GAAP financial measures provide information to investors that is useful in understanding its financial condition. Because not all companies use the same calculation 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 these non-GAAP financial measures is provided below (dollars in thousands, except per share data).

** - Nonperforming TDR loans are also included in the balance of non-accrual loans in the previous table.

	(Dollars in thousands, except share and per share data)
	(unaudited)			(unaudited)
	December 31,			September 30,			December 31,
	2014			2014			2013
Shareholders’ equity	$	188,548		$	181,617		$	164,911
Less goodwill		27,194			27,194			27,194
Less core deposit intangible		3,403			3,677			4,583
Tangible common equity	$	157,951		$	150,746		$	133,134
Total assets	$	2,189,213		$	2,172,974		$	2,131,289
Less goodwill		27,194			27,194			27,194
Less core deposit intangible		3,403			3,677			4,583
Tangible assets	$	2,158,616		$	2,142,103		$	2,099,512
Ending shares outstanding		14,473,482			14,368,413			14,427,780
Tangible book value per share	$	10.91		$	10.49		$	9.23
Tangible common equity/Tangible assets		7.32	%		7.04	%		6.34	%