CNB FINANCIAL CORP/PA
For the period ended Sep 30, 2025. Filed Nov 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 5, 2025
CCNE$35.78-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000736772-25-000169
ITEM 2. – Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0000736772-25-000202
ITEM 2. – Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 185 previous paragraphs and 187 current paragraphs.
113 unchanged; 54 reworded; 19 added; 18 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 34 previous and 35 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
During the third quarter on July 23, 2025, the Corporation completed its acquisition of ESSA Bancorp, Inc. (“ESSA”), which added total assets, net of estimated purchase accounting fair value adjustments, of $2.1 billion, comprised primarily of $1.7 billion in loans. The acquisition also added $1.5 billion in deposits to CNB Bank's funding base as the transaction added 20 offices to CNB Bank’s branch network and extended its operating footprint into the Northeastern Pennsylvania Region including the Lehigh Valley of Pennsylvania.
Current report
•merger transaction related expenses, net of tax;
Current report
•Book value per common share (excluding merger transaction related expenses);
Current report
•Return on average equity (excluding merger transaction related expenses); and
Current report
◦There were 154 outstanding loans, totaling $154.2 million, or 2.38% of total Corporation loans outstanding;
Current report
◦Included in the above commercial office loan metrics were 40 outstanding loans, totaling $44.1million acquired from the Merger.
Current report
◦There were 159 outstanding loans, totaling $332.5 million, or 5.14% of total Corporation loans outstanding;
Current report
◦Included in the above commercial hospitality loan metrics were nine outstanding loans, totaling $18.3 million acquired from the Merger.
Current report
◦There were 378 outstanding loans, totaling $639.7 million, or 9.89% of total Corporation loans outstanding;
Current report
◦Included in the above commercial multifamily loan metrics were 161 outstanding loans, totaling $226.4 million acquired from the Merger. In addition, there were three nonaccrual loans that totaled $2.5 million and two past-due loans that totaled $2.4 million.
Current report
Net interest income was $67.1 million for the three months ended September 30, 2025, compared to $47.5 million for the three months ended September 30, 2024. When comparing the third quarter of 2025 to the third quarter of 2024, the increase in net interest income of $19.6 million, or 41.26%, was primarily due to the Merger, including $3.4 million in purchase accounting loan accretion, coupled with organic loan growth and the Corporation's targeted interest-bearing deposit rate decreases. This accretion reflects the recognition of fair value marks on acquired loans, which are accreted into interest income over the expected life of the assets.
Current report
The yield on earning assets of 5.96% for the three months ended September 30, 2025 decreased 2 basis points compared to September 30, 2024.
Current report
The provision for credit losses was $18.5 million and $2.4 million for the three months ended September 30, 2025 and September 30, 2024, respectively. The $16.1 million increase in the provision expense for the third quarter of 2025 compared to the third quarter of 2024 was primarily driven by a $16.4 million reserve established for non-PCD loans acquired in the Merger, coupled with the impacts of higher loan portfolio growth and lower loan net charge-offs.
Current report
Total non-interest income was $10.6 million for the three months ended September 30, 2025, including $391 thousand attributable to ESSA, compared to $11.0 million for the three months ended September 30, 2024. The decrease year-over-year in non-interest income was primarily due to lower pass-through income from small business investment companies ("SBICs"), partially offset by increases in wealth and asset management fees, service charges on deposits and net realized gains on available-for-sale securities.
Current report
Nine Months Ended September 30, 2025 and 2024
Current report
The provision for credit losses was $24.4 million for the nine months ended September 30, 2025, compared to $6.3 million for the nine months ended September 30, 2024. The $18.1 million increase in the provision expense for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily a result of the $16.4 million reserve established for non-PCD loans acquired in the ESSA acquisition, couple with loan portfolio growth.
Current report
For the nine months ended September 30, 2025, total non-interest expense was $130.8 million. Excluding merger and integration costs, total non-interest expense was $124.8 million, compared to $112.2 million for the nine months ended September 30, 2024. Excluding merger and integration costs, the increase of $12.6 million, or 11.20%, from the nine months ended September 30, 2024, was primarily driven by higher salaries and benefits. This reflects staff additions related to the ESSA acquisition, merit-based annual increases in base salaries, higher incentive compensation accruals (due to strong financial performance in 2025), and increase retirement plan contribution accruals. Occupancy expense also increased, largely due to higher rent associated with additional full-service office locations added both before and after the ESSA acquisition.
Current report
(1) Merger transaction related expenses represent legal, advisory, severance, technology conversion, day one non-PCD provision expense, and other expenses directly related to the ESSA acquisition. Management believes exclusion of these non-recurring charges provides more meaningful period-over-period comparisons of operating performance.
Current report
(1) Purchase accounting loan accretion represents income recognized on fair value adjustments to acquired loans.
Removed paragraphs (18)
Previous report
On July 23, 2025, the Corporation completed its previously announced acquisition of 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. 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 CNB Bank, with CNB Bank as the surviving bank (the "Merger"). Banking offices of ESSA Bank operate under the trade name ESSA Bank, a division of CNB Bank.
Previous report
The transaction has extended CNB Bank's branch network into the Northeastern Region including the Lehigh Valley of Pennsylvania. With the addition of ESSA's 20 community offices, CNB Bank now has 78 offices comprised of one loan production office, one drive-up office, one mobile office, and 75 full-service offices across its four-state footprint.
Previous report
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. The total consideration paid to ESSA shareholders was approximately $202.5 million, comprised of approximately 8,357,157 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 $20 thousand in cash (cash in lieu of fractional shares).
Previous report
The acquisition of ESSA was completed subsequent to the second quarter of 2025, and as a result ESSA's balance sheet and results of operations are not included in the Corporation's condensed consolidated financial statements for the period ended June 30, 2025. The merger with ESSA will be accounted for as a business combination. The Corporation is currently in the process of completing the purchase accounting and has not made all of the remaining required disclosures, such as the fair value of assets acquired and supplemental pro forma information, which will be disclosed in subsequent filings. As of June 30, 2025, ESSA had approximately $2.2 billion in total assets, $1.8 billion in total loans, and $1.5 billion in total deposits.
Previous report
•Merger costs, net of tax;
Previous report
•Return on average equity (excluding merge costs); and
Previous report
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. The Corporation's strategy given the current environment is to focus on lower risk securities and shorter durations that complement the current portfolio investment ladder, coupled with consistent reinvestment of cash flows to replace lower earning assets.
Previous report
◦There were 113 outstanding loans, totaling $111.1 million, or 2.35% of total Corporation loans outstanding;
Previous report
◦There were 156 outstanding loans, totaling $321.2 million, or 6.79% of total Corporation loans outstanding;
Previous report
◦There were 223 outstanding loans, totaling $405.4 million, or 8.57% of total Corporation loans outstanding;
Previous report
At June 30, 2025, the average deposit balance per account for the Bank was approximately $34 thousand, which has remained stable at this level for an extended period.
Previous report
Net interest income was $52.2 million for the three months ended June 30, 2025, compared to $45.7 million for the three months ended June 30, 2024. When comparing the second quarter of 2025 to the second quarter of 2024, the increase in net interest income of $6.5 million, or 14.17%, was primarily due to an increase in the Corporation's interest income as a result of the increase in investments and total loans outstanding quarter over quarter coupled with a decrease in total interest expense as a result of lower interest rates on deposits.
Previous report
The yield on earning assets of 5.89% for the three months ended June 30, 2025 was unchanged from June 30, 2024, primarily attributable to the net impact of declining interest rates on variable and floating-rate loans as a result of the Federal Reserve decreases since mid-September 2024, coupled with changes in the yield curve.
Previous report
The provision for credit losses was $4.3 million and $2.6 million for the three months ended June 30, 2025 and June 30, 2024, respectively.
Previous report
Total non-interest income was $9.0 million for the three months ended June 30, 2025 compared to $8.9 million for the three months ended June 30, 2024. The increase during the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was primarily due to increases in bank owned life insurance (death benefit) and an improvement in unrealized gains on equity securities, partially offset by lower other charges and fees, coupled with lower pass-through income SBICs.
Previous report
Six Months Ended June 30, 2025 and 2024
Previous report
The provision for credit losses was $5.9 million for the six months ended June 30, 2025, compared to $3.9 million for the six months ended June 30, 2024. The $2.0 million increase in the provision expense for six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily a result of the increased net loan charge-offs and higher loan growth.
Previous report
For the six months ended June 30, 2025, total non-interest expense was $80.7 million. Excluding merger costs, total non-interest expense was $78.8 million, compared to $73.4 million for the six months ended June 30, 2024. Excluding merger costs, the increase of $5.4 million, or 7.30%, from the six months ended June 30, 2024 was primarily a result of an increase in salaries and benefits, occupancy expense, card processing and interchange expense, state and local taxes and technology expenses, partially offset by a decrease in legal fees, advertising and FDIC insurance premiums. In addition, total non-interest expenses increased primarily due to an increase in personnel costs related to annual merit increases and growth in the Corporation's staff and new offices in its expansion markets, while the increase in occupancy expense was primarily due to higher rent expense related to three additional full-service office locations. Additionally, increases in card processing and interchange expenses and other non-interest expenses were due to timing of business development expenses.
Reworded paragraphs (54)
Previous wording
The Corporation is a financial holding company registered under the BHC Act. It was incorporated under the laws of the Commonwealth of Pennsylvania in 1983 for the purpose of engaging in the business of a financial holding company. The Corporation's subsidiary, the Bank, provides financial services to individuals and businesses. 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. 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, 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 Monroe, Northampton, Lehigh, Delaware, Chester, Montgomery, Lackawanna, and Luzerne. 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.
Current wording
The Corporation is a financial holding company registered under the BHC Act. It was incorporated under the laws of the Commonwealth of Pennsylvania in 1983 for the purpose of engaging in the business of a financial holding company. The Corporation's subsidiary, the Bank, provides financial services to individuals and businesses. 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. 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, 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. 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.
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, 2024, included the 2024 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, 2025 are not necessarily indicative of the results for the full year ending December 31, 2025, 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, 2024, included the 2024 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, 2025 are not necessarily indicative of the results for the full year ending December 31, 2025, or any future period.
Previous wording
•Income available to common (excluding merger costs);
Current wording
•Income available to common (excluding merger transaction related expenses);
Previous wording
•Tangible book value per share and tangible book value per share (excluding merger costs);
Current wording
•Tangible book value per common share and tangible book value per common share (excluding merger transaction related expenses);
Previous wording
•Tangible common equity/tangible assets and tangible common equity/tangible assets (excluding merger costs);
Current wording
•Tangible common equity/tangible assets and tangible common equity/tangible assets (excluding merger transaction related expenses);
Previous wording
•Efficiency ratio (fully tax-equivalent basis) and efficiency ratio (fully tax-equivalent basis and excluding merger costs);
Current wording
•Efficiency ratio (fully tax-equivalent basis) and efficiency ratio (fully tax-equivalent basis and excluding merger and integration costs);
Previous wording
•Net interest margin (fully tax-equivalent basis);
Current wording
•Net interest margin (fully tax-equivalent basis) and net interest margin, excluding purchase accounting loan accretion (fully tax-equivalent basis);
Previous wording
•Pre-provision net revenue ("PPNR") and PPNR (excluding merger costs);
Current wording
•Pre-provision net revenue ("PPNR") and PPNR (excluding merger and integration costs);
Previous wording
•Basic and diluted earnings per share (excluding merger costs);
Current wording
•Basic and diluted earnings per share (excluding merger transaction related expenses);
Previous wording
•Dividend payout ratio (excluding merger costs);
Current wording
•Dividend payout ratio (excluding merger transaction related expenses);
Previous wording
•Return on average assets (excluding merger costs);
Current wording
•Return on average assets (excluding merger transaction related expenses);
Previous wording
•Return on average tangible common equity and return on average tangible common equity (excluding merger costs)
Current wording
•Return on average tangible common equity and return on average tangible common equity (excluding merger transaction related expenses)
Previous wording
Cash and cash equivalents totaled $425.4 million at June 30, 2025, including additional excess liquidity of $332.2 million held at the Federal Reserve, compared to $375.0 million at December 31, 2024. 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 available liquidity sources for the Corporation to be approximately 5.1 times the estimated amount of adjusted uninsured deposit balances.
Current wording
Cash and cash equivalents totaled $438.1 million at September 30, 2025, including additional excess liquidity of $351.9 million held at the Federal Reserve, compared to $375.0 million at December 31, 2024. These excess funds, when combined with collective contingent liquidity resources of $5.8 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 available liquidity sources for the Corporation to be approximately 4.3 times the estimated amount of adjusted uninsured deposit balances.
Previous wording
AFS debt securities and equity securities combined totaled $534.1 million and $479.0 million at June 30, 2025 and December 31, 2024, respectively. At June 30, 2025, the total balance of investments classified as HTM debt securities was $270.0 million compared to $306.1 million at December 31, 2024.
Current wording
AFS debt securities and equity securities combined totaled $544.1 million and $479.0 million at September 30, 2025 and December 31, 2024, respectively. At September 30, 2025, the total balance of investments classified as HTM debt securities was $249.2 million compared to $306.1 million at December 31, 2024.
Previous wording
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. 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.
Current wording
The Corporation’s securities portfolio serves as a source of liquidity, provides collateral for pledging requirements, and generates interest income. 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. 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 the Corporation's customers.
Previous wording
At June 30, 2025, loans, excluding the impact of syndicated loans, totaled $4.7 billion, representing an increase of $125.4 million, or 2.77% year to date increase (5.58% annualized), from December 31, 2024. The increase in loans for the six months ended June 30, 2025 compared to December 31, 2024 was primarily driven by growth in the ERIEBANK, Ridge View Bank, BankOnBuffalo and the legacy CNB markets, as well as CNB Bank's Private Banking Division.
Current wording
Excluding $71.9 million of syndicated loan balances, total loans were $6.4 billion as of September 30, 2025. Excluding $1.7 billion in loans acquired through the Merger, net of estimated purchase accounting fair value adjustments, organic loan growth was $216.2 million, or 4.77% year to date increase (6.38% annualized), from December 31, 2024. The increase in loans for the nine months ended September 30, 2025 compared to December 31, 2024 was primarily driven by growth in the Ridge View Bank and BankOnBuffalo markets, and the legacy CNB market, as well as in CNB Bank's Private Banking division.
Previous wording
At June 30, 2025, the Corporation's condensed consolidated balance sheet reflected a decrease in syndicated lending balances of $946 thousand compared to December 31, 2024, primarily resulting from scheduled paydowns of certain syndicated loans. The syndicated loan portfolio totaled $78.9 million, or 1.67% of total loans, at June 30, 2025, compared to $79.9 million, or 1.73% of total loans at December 31, 2024. The Corporation closely manages the level and composition of its syndicated loan portfolio to ensure it continues to provide a high credit quality, profitable use of excess liquidity to complement the Corporation's loan growth from its in-market customer relationships.
Current wording
At September 30, 2025, the Corporation's condensed consolidated balance sheet reflected a decrease in syndicated lending balances of $8.0 million compared to December 31, 2024, primarily resulting from scheduled paydowns of certain syndicated loans. The syndicated loan portfolio totaled $71.9 million, or 1.11% of total loans, at September 30, 2025, compared to $79.9 million, or 1.73% of total loans at December 31, 2024. The Corporation closely manages the level and composition of its syndicated loan portfolio to ensure it continues to provide strong credit quality, profitable use of excess liquidity, and complement the Corporation’s loan growth from its in-market customer relationships.
Previous wording
◦The average outstanding balance per commercial office loan was $983 thousand.
Current wording
◦The average outstanding balance per commercial office loan was $1.0 million; and
Previous wording
◦There were no past due commercial hospitality loans; and
Current wording
◦There were no past-due commercial hospitality loans;
Previous wording
◦The average outstanding balance per commercial hospitality loan was $2.1 million.
Current wording
◦The average outstanding balance per commercial hospitality loan was $2.1 million; and
Previous wording
◦There was one nonaccrual and past due commercial multifamily loan that totaled $199 thousand, or 0.05% of total multifamily loans outstanding; and
Current wording
◦There were four nonaccrual commercial multifamily loans that totaled $2.7 million, or 0.43% of total multifamily loans outstanding;
Previous wording
◦There were two past due commercial office loans that totaled $209 thousand, or 0.19% of total commercial office loans outstanding; and
Current wording
◦There were two past-due commercial multifamily loans that totaled $2.4 million, or 0.38% of total multifamily loans outstanding;
Previous wording
◦The average outstanding balance per commercial multifamily loan was $1.8 million.
Current wording
◦The average outstanding balance per commercial multifamily loan was $1.7 million; and
Previous wording
Total nonperforming assets were $30.4 million, or 0.48% of total assets, as of June 30, 2025, compared to $59.5 million, or 0.96% of total assets, as of December 31, 2024. In addition, the allowance for credit losses as a percentage of nonaccrual loans was 169.52% at June 30, 2025, compared to 84.08% at December 31, 2024. The decrease in nonperforming assets for the six months ended June 30, 2025, compared to December 31, 2024 was primarily due to paydowns to workout-related efforts on two larger nonaccrual loan relationships, and resulting charge-offs on these workouts and other smaller problem loans. The most significant charge-offs were $1.5 million for an owner-occupied commercial real estate relationship (balance of approximately $3.8 million with a specific reserve balance of $1.4 million) and a $1.1 million charge-off of a multifamily commercial real estate loan (balance of approximately $20.3 million with a specific reserve balance of $885 thousand).
Current wording
Total nonperforming assets were $40.4 million, or 0.49% of total assets, as of September 30, 2025, compared to $59.5 million, or 0.96% of total assets, as of December 31, 2024. In addition, the allowance for credit losses as a percentage of nonaccrual loans was 187.94% at September 30, 2025, compared to 84.08% at December 31, 2024. The decrease in nonperforming assets for the nine months ended September 30, 2025, compared to December 31, 2024 was primarily due to paydowns to workout-related efforts on two larger nonaccrual loan relationships, and resulting charge-offs on these workouts and other smaller problem loans. The most significant charge-offs during the nine months ended September 30, 2025 were $1.5 million for an owner-occupied commercial real estate relationship (balance of approximately $3.8 million with a specific reserve balance of $1.4 million) and a $1.1 million charge-off of a multifamily commercial real estate loan (balance of approximately $20.3 million with a specific reserve balance of $885 thousand).
Previous wording
The allowance for credit losses measured as a percentage of total loans receivable was 1.02% as of June 30, 2025 and 1.03% as of December 31, 2024.
Current wording
The allowance for credit losses measured as a percentage of total loans receivable was 1.05% as of September 30, 2025 and 1.03% as of December 31, 2024.
Previous wording
For the six months ended June 30, 2025, the allowance for credit losses increased $972 thousand, primarily driven by growth in the Corporation's loan portfolio. Significant uncertainty persists regarding the domestic and global economy due to changes to U.S. tariffs and corresponding policy changes by U.S. trading partners, 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.
Current wording
For the nine months ended September 30, 2025, the allowance for credit losses increased $20.3 million, primarily driven by the Merger and the $1.9 million in PCD allowance and $16.4 million in non-PCD allowance established on acquisition date, coupled with growth in the Corporation's loan portfolio. Significant uncertainty persists regarding the domestic and global economy due to changes to U.S. tariffs and corresponding policy changes by U.S. trading partners, 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 $4.3 million and $5.9 million for the three and six months ended June 30, 2025, compared to $2.6 million and $3.9 million for the three and six months ended June 30, 2024. Included in the provision for credit losses for the three and six months ended June 30, 2025 was $63 thousand and $180 thousand related to the allowance for unfunded commitments compared to $87 thousand and $63 thousand towards the allowance for unfunded commitments for the three and six months ended June 30, 2024.
Current wording
Provision for credit losses was $18.5 million and $24.4 million for the three and nine months ended September 30, 2025, compared to $2.4 million and $6.3 million for the three and nine months ended September 30, 2024, respectively. The increase in provision for credit losses was primarily due to a $16.4 million reserve established for non-PCD loans acquired in the Merger, coupled with the impacts of higher loan portfolio growth and lower loan net charge-offs. In addition, included in the provision for credit losses for the three and nine months ended September 30, 2025 was a provision of $1 thousand and $181 thousand, respectively, related to the allowance for unfunded commitments compared to $49 thousand and $112 thousand provision, related to the allowance for unfunded commitments for the three and nine months ended September 30, 2024, respectively.
Previous wording
At June 30, 2025, total deposits were $5.5 billion, reflecting an increase of $95.7 million, or 1.78%, from December 31, 2024. The increase in deposit balances was driven by higher retail and municipal deposits, coupled with growth in retail time deposits.
Current wording
At September 30, 2025, total deposits were $6.9 billion, reflecting an increase of $1.5 billion, or 28.46%, from December 31, 2024. Excluding $1.5 billion in deposits acquired in the Merger, the year to date increase in deposit balances was primarily attributable to retail account growth, including time deposits, as well as higher Treasury Management-sourced business and municipal deposits.
Previous wording
At June 30, 2025, the total estimated uninsured deposits for the Bank were approximately $1.6 billion, or approximately 28.62% of total Bank deposits. However, when excluding $103.5 million of affiliate company deposits and $509.0 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $982.0 million, or approximately 17.63% of total Bank deposits as of June 30, 2025.
Current wording
At September 30, 2025, the total estimated uninsured deposits for the Bank were approximately $2.1 billion, or approximately 30.02% of total Bank deposits. However, when excluding $23.4 million of affiliate company deposits and $734.1 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $1.4 billion, or approximately 20.55% of total Bank deposits as of September 30, 2025.
Previous wording
At June 30, 2025, the Corporation's cash and cash equivalents position was approximately $425.4 million, including liquidity of $332.2 million held at the Federal Reserve. These excess funds, when combined with $4.6 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 available liquidity sources for the Corporation to be approximately 5.1 times the estimated amount of adjusted uninsured deposit balances discussed above.
Current wording
At September 30, 2025, the Corporation's cash and cash equivalents position was approximately $438.1 million, including liquidity of $351.9 million held at the Federal Reserve. These excess funds, when combined with $5.8 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 available liquidity sources for the Corporation to be approximately 4.3 times the estimated amount of adjusted uninsured deposit balances discussed above.
Previous wording
As of June 30, 2025, the Corporation's total shareholders' equity was $637.3 million, representing an increase of $26.6 million, or 4.35%, from December 31, 2024, primarily due to 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 available-for-sale portfolio.
Current wording
As of September 30, 2025, the Corporation's total shareholders' equity was $844.2 million, representing an increase of $233.5 million, or 38.23%, from December 31, 2024, primarily due to an increase in additional paid in capital related to the Merger of $202.6 million, 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 shareholders.
Previous wording
(1)Tangible common equity, tangible assets, book value per common share (excluding merger costs), and tangible book value per common 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 and preferred equity 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. Tangible book value per common share is calculated by dividing tangible common equity by the number of shares outstanding. The Corporation 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 in the "Non-GAAP Financial Measures" section in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Current wording
(1)Tangible common equity, tangible assets, book value per common share (excluding merger transaction related expenses), and tangible book value per common 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 and preferred equity 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. Tangible book value per common share is calculated by dividing tangible common equity by the number of shares outstanding. The Corporation 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 in the "Non-GAAP Financial Measures" section in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Previous wording
At June 30, 2025, the Corporation's pre-tax net unrealized losses on available-for-sale and held-to-maturity securities totaled approximately $55.6 million, or 8.73% of total shareholders' equity, compared to $74.8 million, or 12.25% of total shareholders' equity at December 31, 2024. The change in unrealized losses was primarily due to changes in the yield curve during the first and second quarter of 2025 compared to 2024, coupled with the Corporation's scheduled bond maturities, which were all realized at par. Importantly, all regulatory capital ratios for the Corporation would exceed regulatory "well-capitalized" levels as of both June 30, 2025 and December 31, 2024 if the net unrealized losses at the respective dates were fully recognized. Additionally, the Corporation continued to maintain excess liquidity totaling approximately $102.2 million of liquid funds at June 30, 2025, which more than covers the $55.6 million in combined available-for-sale and held-to-maturity 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, 2025, the Corporation's pre-tax net unrealized losses on the combined portfolios of available-for-sale and held-to-maturity securities totaled approximately $49.8 million, or 5.90% of total shareholders' equity, compared to $74.8 million, or 12.25% of total shareholders' equity at December 31, 2024. The change in unrealized losses was primarily due to changes in the yield curve during the first three quarters of 2025 compared to 2024, coupled with the Corporation's scheduled bond maturities, which were all realized at par. Importantly, all regulatory capital ratios for the Corporation would exceed regulatory "well-capitalized" levels as of both September 30, 2025 and December 31, 2024 if the net unrealized losses at the respective dates were fully recognized.
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, 2025 and 2024 was $265 thousand and $214 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, 2025 and 2024 was $314 thousand and $240 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, 2025 and 2024 was $(42.6) million and $(59.2) 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, 2025 and 2024 was $(39.1) million and $(51.1) 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, 2025 and 2024 was $525 thousand and $431 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, 2025 and 2024 was $838 thousand and $671 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, 2025 and 2024 was $(45.3) million and $(57.2) 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, 2025 and 2024 was $(43.2) million and $(55.1) million, respectively.
Previous wording
The following table presents the change in net interest income for the six months ended June 30, 2025 and 2024:
Current wording
The following table presents the change in net interest income for the nine months ended September 30, 2025 and 2024:
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, 2025 and June 30, 2024.
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, 2025 and September 30, 2024.
Previous wording
Net income available to common shareholders ("earnings") was $12.9 million, or $0.61 per diluted share, for the three months ended June 30, 2025. Excluding after-tax merger costs, earnings were $13.2 million, or $0.63 per diluted share, for the three months ended June 30, 2025. The Corporation's earnings for the three months ended June 30, 2024 were $11.9 million, or $0.56 per diluted share. Excluding after-tax merger costs, the increase in diluted earnings per share comparing the three months ended June 30, 2025 to the three months ended June 30, 2024 was primarily due to an increase in net interest income and non-interest income, partially offset by increases in non-interest expense and the provision for credit losses.
Current wording
Net income available to common shareholders ("earnings") was $6.0 million, or $0.22 per diluted share, for the three months ended September 30, 2025. Excluding after-tax merger and integration costs and the day-one reserve established for non-Purchase Credit Deteriorated ("non-PCD") loans ("merger transaction related expenses"), adjusted earnings were $22.5 million, or $0.82 per diluted share, for the three months ended September 30, 2025. The Corporation's earnings for the three months ended September 30, 2024 were $12.9 million, or $0.61 per diluted share. Excluding merger transaction related expenses, the increase in diluted earnings per share comparing the three months ended September 30, 2025 to the three months ended September 30, 2024 was due primarily to higher net interest income, partially offset by an incresae in non-interest expense.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
◦There were no past-due commercial office loans;