CNB FINANCIAL CORPPA

Previous wording

The following discussion should be read in conjunction with the Corporation’s consolidated financial statements and notes thereto for the year ended December 31, 2023, included the 2023 Form 10-K, and in conjunction with the condensed consolidated financial statements and notes thereto included in Item 1 of this report. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results for the full year ending December 31, 2024, or any future period.

Current wording

The following discussion should be read in conjunction with the Corporation’s consolidated financial statements and notes thereto for the year ended December 31, 2023, included the 2023 Form 10-K, and in conjunction with the condensed consolidated financial statements and notes thereto included in Item 1 of this report. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results for the full year ending December 31, 2024, or any future period.

Previous wording

•Pre-provision net revenue ("PPNR");

Current wording

•Pre-provision net revenue ("PPNR"); and

Previous wording

•Return on average tangible common equity; and

Current wording

•Return on average tangible common equity

Previous wording

Cash and cash equivalents totaled $331.1 million at June 30, 2024, including additional excess liquidity of $271.9 million held at the Federal Reserve, compared to $222.0 million at December 31, 2023. These excess funds, when combined with collective contingent liquidity resources of $4.5 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.

Current wording

Cash and cash equivalents totaled $360.9 million at September 30, 2024, including additional excess liquidity of $282.0 million held at the Federal Reserve, compared to $222.0 million at December 31, 2023. These excess funds, when combined with collective contingent liquidity resources of $4.5 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.

Previous wording

AFS debt securities and equity securities combined totaled $369.6 million and $351.3 million at June 30, 2024 and December 31, 2023, respectively. At June 30, 2024, the total balance of investments classified as HTM debt securities was $354.6 million compared to $389.0 million at December 31, 2023.

Current wording

AFS debt securities and equity securities combined totaled $389.4 million and $351.3 million at September 30, 2024 and December 31, 2023, respectively. At September 30, 2024, the total balance of investments classified as HTM debt securities was $328.2 million compared to $389.0 million at December 31, 2023.

Previous wording

At June 30, 2024, loans, excluding the impact of syndicated loans, totaled $4.4 billion, representing an increase of $66.0 million, or 1.51% year to date increase (3.05% annualized), from December 31, 2023. The increase in loans was primarily driven by qualitative commercial and industrial growth in the Columbus market and continued new relationship growth in the Corporation's recent expansion market of Cleveland, and growth in the Corporation's Private Banking division with notable activity in the Roanoke market.

Current wording

At September 30, 2024, loans, excluding the impact of syndicated loans, totaled $4.5 billion, representing an increase of $162.7 million, or 3.73% year to date increase (4.98% annualized), from December 31, 2023. The increase in loans was primarily driven by qualitative growth in commercial real estate coupled with growth in commercial and industrial and residential real estate in the Columbus, Erie and Roanoke markets and continued new relationship growth in the Corporation's recent expansion market of Cleveland, and growth in the Corporation's Private Banking division with notable activity in the Roanoke market.

Previous wording

At June 30, 2024, the Corporation's condensed consolidated balance sheet reflected a decrease in syndicated lending balances of $54.8 million compared to December 31, 2023, primarily resulting from scheduled paydowns or early payoffs of certain syndicated loans. The syndicated loan portfolio totaled $53.9 million, or 1.20% of total loans, at June 30, 2024, compared to $108.7 million, or 2.43% of total loans at December 31, 2023. The Corporation is closely managing the level of its syndicated loan portfolio as it focuses more resources on organic loan growth from its customer relationships.

Current wording

At September 30, 2024, the Corporation's condensed consolidated balance sheet reflected a decrease in syndicated lending balances of $39.2 million compared to December 31, 2023, primarily resulting from scheduled paydowns or early payoffs of certain syndicated loans. The syndicated loan portfolio totaled $69.5 million, or 1.51% of total loans, at September 30, 2024, compared to $108.7 million, or 2.43% of total loans at December 31, 2023. The Corporation is closely managing the level of its syndicated loan portfolio while it focuses more resources on organic loan growth from its in-market customer relationships.

Previous wording

◦There were no nonaccrual commercial office loans at June 30, 2024; and

Current wording

◦There were no nonaccrual commercial office loans at September 30, 2024;

Previous wording

◦There were 171 outstanding loans, totaling $298.7 million, or 6.67%, of total Corporation loans outstanding;

Current wording

◦There were 173 outstanding loans, totaling $320.6 million, or 6.98% of total Corporation loans outstanding;

Previous wording

◦There were no nonaccrual commercial hospitality loans at June 30, 2024; and

Current wording

◦There were no nonaccrual commercial hospitality loans at September 30, 2024;

Previous wording

◦The average outstanding balance per commercial hospitality loan was $1.7 million.

Current wording

◦The average outstanding balance per commercial hospitality loan was $1.9 million.

Previous wording

◦There were 217 outstanding loans, totaling $281.6 million, or 6.29%, of total Corporation loans outstanding;

Current wording

◦There were 225 outstanding loans, totaling $349.1 million, or 7.60% of total Corporation loans outstanding;

Previous wording

◦Nonaccrual commercial multifamily loans (two customer relationship) totaled $541 thousand, or 0.19% of total multifamily loans outstanding. The two customer relationship did not have a related specific loss reserve at June 30, 2024; and

Current wording

◦There was one nonaccrual commercial multifamily loan that totaled $268 thousand, or 0.08% of total multifamily loans outstanding. The one customer relationship did not have a related specific loss reserve at September 30, 2024;

Previous wording

◦The average outstanding balance per commercial multifamily loan was $1.3 million.

Current wording

◦The average outstanding balance per commercial multifamily loan was $1.6 million.

Previous wording

The Corporation had no commercial office, hospitality or multifamily loan relationships considered by the banking regulators to be a high volatility commercial real estate credit.

Current wording

The Corporation had no commercial office, hospitality or multifamily loan relationships considered by the banking regulators to be a high volatility commercial real estate credit ("HVCRE").

Previous wording

Total nonperforming assets were $36.5 million, or 0.62% of total assets, as of June 30, 2024, compared to $31.8 million, or 0.55% of total assets, as of December 31, 2023. In addition, the allowance for credit losses as a percentage of nonaccrual loans was 130.88% at June 30, 2024, compared to 154.63% at December 31, 2023. The increase in nonperforming assets was primarily due to two relationships. The first relationship was a commercial and industrial relationship totaling $3.1 million with a specific reserve balance of $1.2 million, and the second relationship was an owner-occupied commercial real estate relationship totaling $4.6 million with a specific reserve balance of $1.2 million. Management does not believe there is risk of significant additional loss exposures beyond the specific reserves related to these loan relationships.

Current wording

Total nonperforming assets were $42.0 million, or 0.70% of total assets, as of September 30, 2024, compared to $31.8 million, or 0.55% of total assets, as of December 31, 2023. In addition, the allowance for credit losses as a percentage of nonaccrual loans was 117.03% at September 30, 2024, compared to 154.63% at December 31, 2023. The increase in nonperforming assets was primarily due to two relationships. The first relationship was an owner-occupied commercial real estate relationship totaling $4.6 million with a specific reserve balance of $1.2 million and the second was a commercial relationship (consisting of various loan types) totaling $7.9 million with a specific reserve of $2.2 million. Management does not believe there is risk of significant additional loss exposures beyond the specific reserves related to these loan relationships.

Previous wording

The above table includes revisions 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 as described previously in Note 4, "Loans Receivable and Allowance for Credit Losses."

Current wording

(1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, 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.

Previous wording

For the six months ended June 30, 2024, the allowance for credit losses decreased $300 thousand. The growth in the Corporation's loan portfolio in new market areas was offset by improvements in the Corporation's historical loss rates, as well as the impact of net charge-offs. Significant uncertainty persists regarding the domestic and global economy, tightening credit conditions, persistent inflation, and higher interest rates. Management will continue to proactively evaluate its estimate of expected credit losses as new information becomes available.

Current wording

For the nine months ended September 30, 2024, the allowance for credit losses increased $812 thousand. This increase was primarily driven by growth in the Corporation's loan portfolio in new market areas as well as an increased unemployment rate forecast, partially offset by improvements in the Corporation's historical loss rates, annual updates to the Corporation's loss drivers and assumptions, as well as the impact of net charge-offs. Significant uncertainty persists regarding the domestic and global economy due to persistent inflation in certain segments of the U.S. economy, continued 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.

Previous wording

Provision for credit losses was $2.6 million and $3.9 million for the three and six months ended June 30, 2024, respectively, compared to $2.4 million and $3.7 million for the three and six months ended June 30, 2023, respectively. Included in the provision for credit losses for the three and six months ended June 30, 2024 was $87 thousand and $63 thousand, respectively, related to the allowance for unfunded commitments compared to $56 and $115 thousand accrual towards the allowance for unfunded commitments for the three and six months ended June 30, 2023, respectively.

Current wording

Provision for credit losses was $2.4 million and $6.3 million for the three and nine months ended September 30, 2024, respectively, compared to $1.1 million and $4.8 million for the three and nine months ended September 30, 2023, respectively. Included in the provision for credit losses for the three and nine months ended September 30, 2024 was $49 thousand and $112 thousand, respectively, related to the allowance for unfunded commitments compared to $33 thousand and $148 thousand accrual towards the allowance for unfunded commitments for the three and nine months ended September 30, 2023, respectively.

Previous wording

At June 30, 2024, total deposits were $5.1 billion, reflecting an increase of $112.1 million, or 2.24%, from December 31, 2023. The increase in deposit balances was primarily attributable to an increase in business and retail deposits. In addition, the total number of deposit households increased by approximately 1.46% from December 31, 2023.

Current wording

At September 30, 2024, total deposits were $5.2 billion, reflecting an increase of $218.2 million, or 4.37%, from December 31, 2023. The increase in deposit balances was primarily attributable to an increase in noninterest-bearing business deposits and retail saving deposits. In addition, the total number of deposit households increased by approximately 1.85% from December 31, 2023.

Previous wording

At June 30, 2024, the average deposit balance per account for the Bank was approximately $33 thousand. The Bank had increases in municipal deposits, as well as retail customer household deposits, including those added after the 2023 launches of (i) the Bank's "At Ease" account, a service for U.S. service member and veteran families, and (ii) the Corporation's women-focused banking division, Impressia Bank.

Current wording

At September 30, 2024, the average deposit balance per account for the Bank was approximately $33 thousand. The Bank had increases in business deposits, as well as retail customer household deposits, including those added after the 2023 launches of (i) the Bank's "At Ease" account, a service for U.S. service member and veteran families, and (ii) the Corporation's women-focused banking division, Impressia Bank.

Previous wording

At June 30, 2024, the total estimated uninsured deposits for the Bank were approximately $1.5 billion, or approximately 29.00% of total Bank deposits. However, when excluding $101.4 million of affiliate company deposits and $460.7 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $949.8 million, or approximately 18.22% of total Bank deposits as of June 30, 2024.

Current wording

At September 30, 2024, the total estimated uninsured deposits for the Bank were approximately $1.5 billion, or approximately 28.50% of total Bank deposits. However, when excluding $103.1 million of affiliate company deposits and $462.7 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $950.6 million, or approximately 17.87% of total Bank deposits as of September 30, 2024.

Previous wording

At June 30, 2024, the Corporation’s cash and cash equivalents position was approximately $331.1 million, including liquidity of $271.9 million held at the Federal Reserve. These excess funds, when combined with $4.5 billion in (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 discussed above.

Current wording

At September 30, 2024, the Corporation’s cash and cash equivalents position was approximately $361.0 million, including liquidity of $282.0 million held at the Federal Reserve. These excess funds, when combined with $4.5 billion in (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 discussed above.

Previous wording

As of June 30, 2024, the Corporation’s total shareholders’ equity was $586.7 million, representing an increase of $15.5 million, or 2.71%, from December 31, 2023, primarily due to an increase in the Corporation's retained earnings (net income, partially offset by the common and preferred dividends paid).

Current wording

As of September 30, 2024, the Corporation’s total shareholders’ equity was $606.4 million, representing an increase of $35.1 million, or 6.15%, from December 31, 2023, primarily due to an increase in the Corporation's retained earnings (net income, partially offset by the common and preferred dividends paid).

Previous wording

At June 30, 2024, the Corporation's pre-tax net unrealized losses on available-for-sale and held-to-maturity securities totaled approximately $84.1 million, or 14.33% of total shareholders' equity, compared to $82.2 million, or 14.40% of total shareholders' equity at December 31, 2023. The change is unrealized losses was primarily due to changes in the yield curve during the first and second quarters of 2024 compared to 2023, relative to the Corporation's scheduled bond maturities. Importantly, all regulatory capital ratios for the Corporation would exceed regulatory "well-capitalized" levels as of both June 30, 2024 and December 31, 2023 if the net unrealized losses at the respective dates were fully recognized. Additionally, the Corporation maintained $100.5 million of liquid funds at its holding company, which more than covers the $84.1 million in unrealized losses on investments held primarily in its wholly-owned banking subsidiary, as an immediately available source of contingent capital to be down-streamed to the Bank, if necessary.

Current wording

At September 30, 2024, the Corporation's pre-tax net unrealized losses on available-for-sale and held-to-maturity securities totaled approximately $62.5 million, or 10.30% of total shareholders' equity, compared to $82.2 million, or 14.40% of total shareholders' equity at December 31, 2023. The change in unrealized losses was primarily due to changes in the yield curve during the first, second and third quarters of 2024 compared to 2023, relative to the Corporation's scheduled bond maturities. Importantly, all regulatory capital ratios for the Corporation would exceed regulatory "well-capitalized" levels as of both September 30, 2024 and December 31, 2023 if the net unrealized losses at the respective dates were fully recognized. Additionally, the Corporation maintained $102.0 million of liquid funds at its holding company, which more than covers the $62.5 million in unrealized losses on investments held primarily in its wholly-owned banking subsidiary, as an immediately available source of contingent capital to be down-streamed to the Bank, if necessary.

Previous wording

(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. The taxable equivalent adjustment to net interest income for the three months ended June 30, 2024 and 2023 was $214 thousand and $243 thousand, respectively.

Current wording

(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. The taxable equivalent adjustment to net interest income for the three months ended September 30, 2024 and 2023 was $240 thousand and $242 thousand, respectively.

Previous wording

(4) Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the three months ended June 30, 2024 and 2023 was $(59.2) million and $(55.9) million, respectively.

Current wording

(4) Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the three months ended September 30, 2024 and 2023 was $(51.1) million and $(61.1) million, respectively.

Previous wording

(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. The taxable equivalent adjustment to net interest income for the six months ended June 30, 2024 and 2023 was $431 thousand and $514 thousand, respectively.

Current wording

(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. The taxable equivalent adjustment to net interest income for the nine months ended September 30, 2024 and 2023 was $671 thousand and $755 thousand, respectively.

Previous wording

(4) Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the six months ended June 30, 2024 and 2023 was $(57.2) million and $(57.3) million, respectively.

Current wording

(4) Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for the nine months ended September 30, 2024 and 2023 was $(55.1) million and $(58.6) million, respectively.

Previous wording

The following table presents the change in net interest income for the six months ended June 30, 2024 and 2023:

Current wording

The following table presents the change in net interest income for the nine months ended September 30, 2024 and 2023:

Previous wording

(2)Changes in interest income on tax-exempt securities and loans receivable are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21% for the six months ended June 30, 2024 and June 30, 2023.

Current wording

(2)Changes in interest income on tax-exempt securities and loans receivable are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21% for the nine months ended September 30, 2024 and September 30, 2023.

Previous wording

Net income available to common shareholders ("earnings") was $11.9 million, or $0.56 per diluted share, for the three months ended June 30, 2024. The Corporation’s earnings for the three months ended June 30, 2023 were $12.8 million, or $0.61 per diluted share. The decrease in diluted earnings per share comparing the three months ended June 30, 2024 to the three months ended June 30, 2023 was primarily due to the significant year-over-year increase in deposit costs primarily resulting from Federal Reserve rate increases throughout 2023 and the resulting market impact to the Corporation's deposit base.

Current wording

Net income available to common shareholders ("earnings") was $12.9 million, or $0.61 per diluted share, for the three months ended September 30, 2024. The Corporation’s earnings for the three months ended September 30, 2023 were $12.7 million, or $0.60 per diluted share. The increase in diluted earnings per share comparing the three months ended September 30, 2024 to the three months ended September 30, 2023 was primarily due to the increase in non-interest income, partially offset by an increase in non-interest expense.

Previous wording

Annualized return on average equity was 8.94% for the three months ended June 30, 2024, compared to 10.07% for the three months ended June 30, 2023. Annualized return on average tangible common equity, a non-GAAP measure, was 9.93% for the three months ended June 30, 2024, compared to 11.40% for the three months ended June 30, 2023.

Current wording

Annualized return on average equity was 9.28% for the three months ended September 30, 2024, compared to 9.80% for the three months ended September 30, 2023. Annualized return on average tangible common equity, a non-GAAP measure, was 10.33% for the three months ended September 30, 2024, compared to 11.07% for the three months ended September 30, 2023.

Previous wording

The Corporation's efficiency ratio was 65.94% for the three months ended June 30, 2024, compared to 64.78% for the three months ended June 30, 2023. The efficiency ratio on a fully tax-equivalent basis, a non-GAAP ratio, was 65.20% for the three months ended June 30, 2024, compared to 64.10% for the three months ended June 30, 2023.

Current wording

The Corporation's efficiency ratio was 66.34% for the three months ended September 30, 2024, compared to 67.00% for the three months ended September 30, 2023. The efficiency ratio on a fully tax-equivalent basis, a non-GAAP ratio, was 65.58% for the three months ended September 30, 2024, compared to 66.26% for the three months ended September 30, 2023.

Previous wording

Net interest income was $45.7 million for the three months ended June 30, 2024, compared to $47.3 million for the three months ended June 30, 2023. When comparing the first quarter of 2024 to the first quarter of 2023, the decrease in net interest income of $1.5 million, or 3.26%, was primarily due to an increase in the Corporation's interest expense as a result of targeted interest-bearing deposit rate increases to ensure both deposit relationship retention, and new deposit growth in recently entered expansion markets.

Current wording

Net interest income was $47.5 million for the three months ended September 30, 2024, compared to $47.2 million for the three months ended September 30, 2023. When comparing the third quarter of 2024 to the third quarter of 2023, the increase in net interest income of $250 thousand, or 0.53%, was primarily due to an increase in the Corporation's interest income as a result of the increase in total loans outstanding quarter over quarter, partially offset by targeted interest-bearing deposit rate increases to ensure both deposit relationship retention and new deposit growth in the Corporation's markets.

Previous wording

Net interest margin was 3.36% and 3.62% for the three months ended June 30, 2024 and June 30, 2023, respectively. Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.34% and 3.60%, for the three months ended June 30, 2024 and June 30, 2023, respectively.

Current wording

Net interest margin was 3.43% and 3.55% for the three months ended September 30, 2024 and September 30, 2023, respectively. Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.42% and 3.53%, for the three months ended September 30, 2024 and September 30, 2023, respectively.

Previous wording

The yield on earning assets of 5.89% for the three months ended June 30, 2024 increased 39 basis points from June 30, 2023, primarily as a result of the net benefit of higher interest rates on both variable-rate loans and new loan production.

Current wording

The yield on earning assets of 5.98% for the three months ended September 30, 2024 increased 35 basis points from September 30, 2023, primarily as a result of the net benefit of higher interest rates on both variable-rate loans and new loan production.

Previous wording

Total non-interest income was $8.9 million for the three months ended June 30, 2024 compared to $8.3 million for the three months ended June 30, 2023. The increase during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, was primarily due to higher pass-through income from small business investment companies.

Current wording

Total non-interest income was $11.0 million for the three months ended September 30, 2024 compared to $7.9 million for the three months ended September 30, 2023. The increase during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, was primarily due to higher pass-through income from small business investment companies and net realized and unrealized gains on equity securities.

Previous wording

For the three months ended June 30, 2024, total non-interest expense was $36.0 million, compared to $36.0 million for the three months ended June 30, 2023. The increase from the three months ended June 30, 2023 was primarily a result of higher salaries and benefits driven by an increase in personnel costs related to merit increases, coupled with year-over-year investments in technology applications aimed at enhancing both customer online banking capabilities, customer call center communications and in-branch technology delivery channels. In addition, card processing and interchange expense for the second quarter of 2024 was $878 thousand, or 40.15% of card processing and interchange income, compared to $1.6 million, or 76.24% of card processing and interchange income for the second quarter of 2023.

Current wording

For the three months ended September 30, 2024, total non-interest expense was $38.8 million, compared to $36.9 million for the three months ended September 30, 2023. The increase from the three months ended September 30, 2023 was primarily a result of higher salaries and benefits driven by costs for personnel added for new offices in expansion markets, an increase in personnel costs related to annual merit increases, increases in health insurance costs, and contractual renewal increases in the Corporation's investments in technology applications. In addition, card processing and interchange expense for the third quarter of 2024 was $1.2 million, or 53.24% of card processing and interchange income, compared to $1.2 million, or 57.53% of card processing and interchange income for the third quarter of 2023.

Previous wording

Income tax expense was $3.0 million, representing a 19.03% effective tax rate, compared to $3.3 million, representing a 19.42% effective tax rate for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Income tax expense was $3.3 million, representing a 19.31% effective tax rate, compared to $3.4 million, representing a 19.86% effective tax rate for the three months ended September 30, 2024 and 2023, respectively.