CNB Financial Corporation (“CNB” or the “Corporation”) (NASDAQ:
CCNE), the parent company of CNB Bank, today announced its earnings
for the fourth quarter ended December 31, 2020.
Joseph B. Bower, Jr., President and CEO, stated,
“The year of 2020 will go down in history as one for all to
remember. CNB had the daunting task, like all community banks, of
helping calm the concerns of local businesses and aiding them in
keeping their doors open and their employees engaged. And with the
entire world focused on maintaining health and safety, expansion of
the economy was not paramount. We took the opportunity to review
our balance sheet, delivery channels and processes to improve for
the future. Branch consolidations, an expansion of our
BankOnBuffalo franchise, capital raise, prepayment of long-term
debt, improved technology infrastructure both internally and in the
delivery channels, carbon footprint reduction initiatives, and
improved liquidity are a few of the major initiatives accomplished
by our team. We are excited for our communities’ 2021 prospects as
we successfully navigate through this pandemic and begin to move
forward again.”
CECL Adoption and FHLB Borrowing
Prepayment
- Section 4014 of the CARES Act was
issued in March 2020 that provided financial institutions with
optional temporary relief from having to comply with CECL on
January 1, 2020. On December 31, 2020 CNB adopted Accounting
Standard Update 2016-13, commonly referred to as CECL, effective
January 1, 2020. The CECL methodology replaces the former probable
incurred loss methodology, which requires entities to estimate
credit losses over the life of a financial asset measured at
amortized cost or off-balance sheet exposure. At adoption, CNB
recorded a $5.0 million increase to its allowance for credit
losses, of which $3.4 million was recorded as a reduction of
retained earnings. As a result of the adoption of CECL, coupled
with the impact of ongoing trends in CNB’s loan portfolio and the
COVID-19 pandemic, the allowance for credit losses increased from
$19.5 million, at December 31, 2019, to $34.3 million at December
31, 2020.
- During the fourth quarter of 2020
CNB prepaid the entire balance of its borrowings from the FHLB,
totaling approximately $160 million. The pre-payment penalty
associated with these prepayments totaled approximately $5.9
million after-tax or $0.35 per diluted common share. The weighted
average interest rate associated with these borrowings was
2.24%.
Earnings Performance
Highlights1
- Net income was $7.9 million, or
$0.40 per diluted common share, for the quarter ended December 31,
2020, and $32.7 million, or $1.97 per diluted common share, for the
year ended December 31, 2020. Pre-tax pre-provision ("PTPP") income
was $13.1 million and $55.4 million, for the three months and
twelve months ended December 31, 2020, respectively.1
- Excluding the after-tax FHLB
prepayment penalty, net income was $13.8 million, or $0.75 per
diluted common share, for the three months ended December 31, 2020,
compared to $10.6 million, or $0.70 per diluted share, for the same
period in 2019, reflecting increases of $3.2 million, or 29.5%, and
$0.05 per diluted common share, or 7.1%.1
- Excluding after-tax merger costs
related to CNB's acquisition of Bank of Akron, FHLB prepayment
penalties and branch closure costs totaling a combined $10.2
million, net income was $42.9 million, or $2.60 per diluted common
share, for the year ended December 31, 2020, compared to $40.2
million, or $2.64 per diluted share, for the year ended December
31, 2019, reflecting an increase of $2.7 million, or 6.7%, and a
decrease of $0.04 per diluted common share, or 1.5%.1
- Excluding merger costs and FHLB
prepayment penalties, PTPP income was $20.5 million for the quarter
ended December 31, 2020, representing an increase of approximately
$6.7 million, or 48.9%, from the same period in 2019. For the year
ended December 31, 2020, excluding the impact of merger, prepayment
penalties and branch closure costs PTPP income was $68.1 million,
representing an increase of approximately $13.3 million, or 24.2%,
from the same period in 2019.1
- At December 31, 2020, the
Corporation had $151.0 million of COVID-19 related deferred loan
payments for its commercial and consumer customers, or 4.5% of
total loans, down from $169.3 million, or 5.1% of total loans as of
October 31, 2020, and $626.0 million, or 20.7% of total loans, at
June 30, 2020.
1 This release contains references to financial
measures that are not defined in GAAP ("Generally Accepted
Accounting Principles"). Management believes that these non-GAAP
measures provide a greater understanding of ongoing operations,
enhance comparability of results of operations with prior periods
and show the effects of significant gains and charges in the
periods presented. A reconciliation of these non-GAAP financial
measures is provided below in the "Non-GAAP Reconciliations"
section.
Balance Sheet and Liquidity
Highlights
- Loans totaled $3.4 billion as of
December 31, 2020 and reflected an increase of $567.3 million, or
20.2%, from December 31, 2019, as a result of $319.1 million of
acquired loans from Bank of Akron, net of fair value adjustments,
$155.5 million in Paycheck Protection Program ("PPP") loans, net of
PPP deferred processing fees ("PPP-related loans") and $92.7
million, or 3.3%, of organic growth, primarily from our Cleveland
and Buffalo regions.
- Deposits totaled $4.2 billion as of
December 31, 2020, an increase of $1.1 billion, or 34.8%, from
December 31, 2019, as a result of $419.5 million of acquired
deposits from Bank of Akron, net of fair value adjustments, an
estimated $159.6 million in PPP deposits and $500.3 million, or
16.1%, of increases in deposits across all our regions, including
our Private Banking division.
- At December 31, 2020, the
Corporation’s cash position totaled approximately $532.7 million,
including additional excess liquidity of $483.2 million held at the
Federal Reserve, reflecting, in management's view, a strong
liquidity level. In addition to its cash position, the
Corporation’s borrowing capacity with the FHLB at December 31, 2020
was approximately $797.4 million.
- While book value per common share
was $21.29 and $20.00 as of December 31, 2020 and 2019,
respectively, tangible book value per common share was $18.66 as of
December 31, 2020, reflecting an increase of 6.9% from a tangible
book value per share of $17.45 as of December 31, 2019.
Customer Support Strategies and Loan
Portfolio Profile
- The Corporation participated in the
PPP provided under the auspices of the Small Business
Administration (“SBA”). Under this program, the Corporation lent
money primarily to its existing loan and/or deposit customers,
based on a predetermined SBA-developed formula, intended to
incentivize small business owners to retain their employees. These
loans carry a customer rate of 1.00% plus a processing fee that
varies depending on the balance of the loan at origination. As of
December 31, 2020, the Corporation had outstanding $159.6 million
in PPP loans, or 1,528 PPP loan relationships, at a rate of 1.00%
together with deferred PPP processing fees of approximately $4.1
million. For the three and twelve months ended December 31, 2020,
the Corporation recognized $4.5 million and $5.1 million,
respectively, in deferred PPP processing fees ("PPP-related
fees").
- In addition to participating in the
PPP, during the year ended December 31, 2020, the Corporation
deferred loan payments for several of its commercial and consumer
customers, as determined by the financial needs of each customer.
As of December 31, 2020, the COVID-19 related loans with deferred
loan payment arrangements, totaled $151.0 million, or 4.5% of total
loans outstanding, consisting of 112 loans, totaling $107.2
million, for which principal and interest were deferred, and 55
loans, totaling $43.8 million, for which principal only was
deferred. Loan payment deferrals by loan type were as follows:
- Commercial and industrial loans –
44 loans, totaling $39.1 million;
- Commercial real estate loans – 23
loans, totaling $101.8 million;
- Residential mortgage loans – 88
loans, totaling $9.9 million; and
- Consumer loans – 12 loans, totaling
$154 thousand.
- The Corporation tracks lending
exposure by industry classification to determine potential risk
associated with industry concentrations, if any, that could lead to
additional credit loss exposure. As a result of the COVID-19
pandemic, the Corporation has determined the Hotels/Motels and
Restaurants/Fast Foods industries represent a potentially higher
level of credit risk, as many of these customers have incurred a
significant negative impact to their businesses as a result of
governmental stay-at-home orders as well as travel limitations. At
December 31, 2020, the Corporation had loan concentrations for
these industries as follows, excluding PPP-related loans:
- Hotels/Motels – $206.6 million, or
6.42% of total loans outstanding, excluding PPP-related loans;
and
- Restaurants/Fast Foods – $30.1
million, or 0.94% of total loans outstanding, excluding PPP-related
loans.
Performance Ratios
- While annualized return on average
common equity was 7.45% for the three months ended December 31,
2020, annualized return on average tangible common equity was 8.53%
for the same period in 2020. Excluding after-tax merger costs,
prepayment penalties and branch closure costs, annualized adjusted
return on average tangible common equity was 15.94% for the three
months ended December 31, 2020, compared to 16.04% for the three
months ended December 31, 2019.1
- While return on average common
equity was 9.35% for the year ended December 31, 2020, return on
average tangible common equity was 10.67% for the year ended
December 31, 2020. Excluding after-tax merger costs, prepayment
penalties and branch closure costs, adjusted return on average
tangible common equity was 14.10% for the year ended December 31,
2020, compared to 16.34% for the year ended December 31,
2019.1
- Efficiency ratio was 72.16% and
65.10% for the three and twelve months ended December 31, 2020,
respectively. Excluding after-tax merger costs, prepayment
penalties and branch closure costs, the adjusted efficiency ratio
was 56.82% and 57.41% for the three and twelve months ended
December 31, 2020, respectively, compared to 61.12% and 60.07% for
the comparable periods in 2019. The improvement in efficiency ratio
resulted from the impact of PPP-related fees, as discussed below,
coupled with an overall lower level of business activity resulting
from the pandemic and the Corporation’s internal cost management
initiatives focusing on travel restrictions, a hiring freeze, lower
marketing expenditures and other expense management
initiatives.1
Revenue
- Total revenue (comprised of net
interest income plus non-interest income) was $48.1 million for the
three months ended December 31, 2020, an increase of $11.6 million,
or 31.7%, from the three months ended December 31, 2019 due to the
following:
- Net interest income of $40.1
million for the three months ended December 31, 2020, increased
$10.4 million or 34.9% from the three months ended December 31,
2019, primarily as a result of an organic growth of $704.2 million
and the impact of $413.7 million in PPP-related loans and estimated
average PPP-related deposits. In addition, the three months ended
December 31, 2020 included PPP-related fees totaling approximately
$4.5 million.
- Net interest margin on a fully
tax-equivalent basis was 3.58% and 3.54% for the three months ended
December 31, 2020 and 2019, respectively.
- The yield on earning assets of
4.16% for the three months ended December 31, 2020 decreased 65
basis points from 4.81% for the three months ended December 31,
2019, primarily as a result of the lower interest rate environment.
The cost of interest-bearing liabilities decreased 78 basis points
from 1.49% for the three months ended December 31, 2019 to 0.71%
for the three months ended December 31, 2020 primarily as a result
of the Corporation’s targeted deposit rate reductions.
- Total revenue (comprised of net
interest income plus non-interest income) was $162.8 million for
the twelve months ended December 31, 2020, an increase of $20.6
million, or 14.5%, from the twelve months ended December 31, 2019
due to the following:
- Net interest income for the twelve
months ended December 31, 2020 increased 15.9% to $134.7 million
from the twelve months ended December 31, 2019, driven by an
organic growth of $560.8 million and $336.3 million in PPP-related
loans, estimated PPP-related deposits and Paycheck Protection
Program Lending Facility ("PPPLF") related assets (collectively the
"PPP-related assets"). In addition, the twelve months ended
December 31, 2020 included PPP-related fees totaling approximately
$5.1 million.
- Net interest margin on a fully
tax-equivalent basis was 3.34% and 3.69% for the twelve months
ended December 31, 2020 and 2019, respectively, Excluding $336.3
million in PPP-related assets, the net interest margin on a
fully-tax equivalent basis was 3.50% for the twelve months ended
December 31, 2020.1
- The yield on earning assets of
4.15% for the twelve months ended December 31, 2020 included $336.3
million in PPP-related assets. Excluding PPP-related assets and
PPP-related fees, the yield on earning assets was 4.37% for the
twelve months ended December 31, 2020, a decrease of 56 basis
points from 4.93% for the twelve months ended December 31, 2019,
primarily as a result of the lower interest rate environment. The
cost of interest-bearing liabilities decreased 50 basis points to
0.95% for the twelve months ended December 31, 2020 from 1.45% for
the twelve months ended December 31, 2019 primarily as a result of
the Corporation’s targeted deposit rate reductions.1
- Total non-interest income was $8.0
million for the three months ended December 31, 2020, an increase
of $1.2 million, or 18.0%, from the same period in 2019. The
increase was primarily due to continued growth in Wealth and Asset
Management fees and increased mortgage banking and card processing
and interchange income, partially offset by a decrease in service
charges on deposits and other fees resulting from lower business
activity and CNB’s response to the pandemic.
- Total non-interest income was $28.1
million for the twelve months ended December 31, 2020, an increase
of $2.1 million, or 8.0%, from the twelve months ended December 31,
2019.
- Total non-interest income includes
net realized and unrealized losses on trading securities, which
combined totaled $2.5 million for the twelve months ended December
31, 2020 compared to $2.0 million for the twelve months ended
December 31, 2019.
- The remainder of the $2.1 million
increase was primarily due to continued growth in Wealth and Asset
Management fees, increased mortgage banking activity coupled with
higher card processing and interchange income, partially offset by
a decrease in service charges on deposits and other fees resulting
from lower business activity and CNB’s response to the
pandemic.
Non-Interest Expense
- For the three months ended December
31, 2020, total non-interest expense was $35.0 million. Excluding
merger costs, prepayment penalties and branch closure costs, total
non-interest expense was $27.6 million for the three months ended
December 31, 2020, an increase of $4.8 million, or 21.3%, from the
three months ended December 31, 2019, including an approximately
$929 thousand impact from the acquisition of Bank of Akron, $1.2
million related to an additional pay cycle in the fourth quarter of
2020 compared to 2019, as well as the Corporation’s ongoing
investments in technology and other general expenditures to support
long-term growth.1
- For the twelve months ended
December 31, 2020, total non-interest expense was $107.3 million.
Excluding merger costs, prepayment penalties and branch closure
costs, total non-interest expense was $94.7 million for the twelve
months ended December 31, 2020, an increase of $7.3 million, or
8.4%, from the twelve months ended December 31, 2019, including a
$1.6 million impact from the acquisition of Bank of Akron. The
remaining $5.7 million increase was the result of the Corporation’s
ongoing investments in technology and other general expenditures to
support long-term growth.1
Income Taxes
- Income tax expense of $1.9 million
for the three months ended December 31, 2020 decreased $420
thousand, or 18.3%, from the three months ended December 31, 2019.
Our effective tax rate was 19.2% for the three months ended
December 31, 2020 compared to 18.0% for the three months ended
December 31, 2019. The increase in the effective tax rate is
primarily attributable to a higher percentage of pre-tax net income
in the fourth quarter of 2020 that is not tax-exempt than was
recorded in the fourth quarter of 2019.
- Income tax expense of $7.3 million
for the twelve months ended December 31, 2020 decreased $1.2
million, or 14.2%, from the twelve months ended December 31, 2019.
Our effective tax rate was 18.3% for the twelve months ended
December 31, 2020 compared to 17.6% for the twelve months ended
December 31, 2019. The increase in the effective tax rate is
primarily attributable to a higher percentage of pre-tax net income
for the twelve months ended December 31, 2020, that is not
tax-exempt than was recorded in the twelve months ended December
31, 2019.
Asset Quality
- Total non-performing assets were
$31.5 million, or 0.67%, of total assets, as of December 31, 2020.
Total assets at December 31, 2020 include approximately $315.1
million in PPP-related assets. Excluding the PPP-related assets,
the ratio of total non-performing assets to total assets was 0.71%
as of December 31, 2020 compared to 0.62% as of December 31, 2019.1
The increase from December 31, 2019, was primarily due to one
commercial real estate loan relationship totaling approximately
$8.7 million. During the three months ended March 31, 2020, this
loan was downgraded to substandard and placed on non-accrual as a
result of a covenant violation. Management performed an evaluation
of the collateral supporting the loan and concluded to charge-off
$1.0 million in the fourth quarter of 2020.
- The allowance for credit losses
measured as a percentage of loans, net of unearned income, as of
December 31, 2020 was 1.01%. Total loans at December 31, 2020
include approximately $155.5 million in PPP-related loans.
Excluding PPP-related loans, the allowance for credit losses
measured as a percentage of loans, net of unearned income, was
1.07% as of December 31, 2020 compared to 0.69% as of December 31,
2019.1 The increase in the allowance for credit losses from
December 31, 2019 to December 31, 2020 resulted primarily from the
adoption of CECL, coupled with the impact of ongoing trends in
CNB’s loan portfolio and the COVID-19 pandemic. Included within the
trend in the allowance for credit losses, charge-offs totaling
approximately $6.4 million for the twelve months ended December 31,
2020, were comprised primarily of a $2.6 million charge-off in the
second quarter of 2020, related to a secured commercial and
industrial loan relationship with a borrower who is now deceased,
and a $1.0 million charge-off in the fourth quarter of 2020,
related to one commercial real estate loan.
- Management recognizes the degree of
uncertainty related to the pandemic and its potential impact on the
economy and, as a result, the allowance for credit losses at
December 31, 2020 also included a qualitative factor specifically
related to the COVID-19 pandemic deferred loans. As of December 31,
2020, the specific COVID-19 qualitative factor totaled
approximately $1.5 million, which was reflected in the
Corporation’s provision expense for the twelve months ended
December 31, 2020 and the related allowance for credit losses
during the same period. The Corporation will continue to evaluate
this factor and update its analysis, as necessary, as developments
related to the COVID-19 pandemic and its impact on the economy
evolve.
- For the three months ended December
31, 2020, net loan charge-offs were $1.8 million, or 0.21% of total
average loans, compared to $1.5 million, or 0.22%, of total average
loans during the comparable period in 2019. The fourth quarter of
2020 included a net charge-off totaling $1.0 million, related to
one commercial real estate loan, as discussed above.
- For the twelve months ended
December 31, 2020, net loan charge-offs were $6.4 million, or
0.21%, of total average loans, compared to $6.3 million, or 0.24%,
of total average loans during the twelve months ended December 31,
2019.
Capital
- As of December 31, 2020, CNB’s
total shareholders’ equity was $416.1 million, an increase of
$111.2 million, or 36.5%, from December 31, 2019 primarily as a
result of an increase in additional paid in capital related to the
Bank of Akron acquisition combined with the issuance of preferred
equity, an increase in accumulated other comprehensive income and
growth in organic earnings, partially offset by the adoption of
CECL and payment of common and preferred stock dividends to our
shareholders during the twelve months ended December 31, 2020.
- During the second quarter of 2020,
the Corporation announced the termination of its “at-the-market”
equity offering program (the “ATM Program”), pursuant to which the
Corporation could offer and sell up to $40 million of common stock.
The Corporation elected to terminate the ATM Program due to market
conditions and to limit uncertainty and unfavorable dilution for
its shareholders during this period of global economic volatility.
Prior to termination, the Corporation had sold 168,358 shares of
its common stock, raising approximately $5.1 million in gross
proceeds.
- On July 17, 2020, the Corporation
completed its acquisition of Bank of Akron, a state bank in Akron,
NY. Under the terms of the merger agreement, Bank of Akron merged
with and into CNB Bank, with CNB Bank as the surviving institution.
Banking offices of Bank of Akron operate under the trade name
BankOnBuffalo, a division of CNB Bank. Based on the elections and
proration procedures, the total consideration payable to Bank of
Akron shareholders was approximately $40.8 million, comprised of
approximately $16.1 million in cash and 1,501,402 shares of CNB
common stock, valued at $24.7 million based on the July 17, 2020
closing price of $16.43 per share of CNB common stock.
- During the three months ended
September 30, 2020, the Corporation raised $57.8 million, net of
issuance costs, from the issuance of depositary shares, each
representing a 1/40th ownership interest in a share of the
Corporation's 7.125% Series A fixed-to-floating rate non-cumulative
perpetual preferred stock, no par value, with a liquidation
preference of $1,000 per share of preferred stock.
- As of December 31, 2020 all of the
Corporation’s regulatory capital ratios reflected increases from
December 31, 2019. The Corporation’s Tier 1 Leverage ratio of 8.06%
at December 31, 2020, includes the impact of average PPP-related
loans, of $203.1 million.
- As of December 31, 2020, the
Corporation’s ratio of Tangible Common Equity to Tangible Assets
reflected the impact of approximately $155.5 million in PPP-related
loans. Excluding PPP-related loans, the Corporation’s ratio of
Tangible Common Equity to Tangible Assets of 6.93% decreased 21 bps
from December 31, 2019, primarily as a result of the impact of the
acquisition of Bank of Akron and the adoption of CECL, partially
offset by a net increase in earnings, net of common dividends and
an increase in accumulated other comprehensive income.1
About CNB Financial
Corporation
CNB Financial Corporation is a financial holding
company with consolidated assets of approximately $4.7 billion. CNB
Financial Corporation conducts business primarily through its
principal subsidiary, CNB Bank. 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, one loan production
office, one drive-up office and 44 full-service offices in
Pennsylvania, Ohio, and New York. CNB Bank’s divisions include
ERIEBANK, based in Erie, Pennsylvania, with offices in northwest
Pennsylvania and northeast Ohio; FCBank, based in Worthington,
Ohio, with offices in central Ohio; and BankOnBuffalo, based in
Buffalo, New York, with offices in northern New York. CNB Bank is
headquartered in Clearfield, Pennsylvania, with offices in central
and north central Pennsylvania. Additional information about CNB
Financial Corporation may be found at www.CNBBank.bank.
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. Such known and unknown risks, uncertainties and
other factors that could cause the actual results to differ
materially from the statements, include, but are not limited to,
(i) the duration and scope of the COVID-19 pandemic and the local,
national and global impact of COVID-19, (ii) actions governments,
businesses and individuals take in response to the pandemic, (iii)
the pace of recovery when the COVID-19 pandemic subsides, (iv)
changes in general business, industry or economic conditions or
competition; (v) changes in any applicable law, rule, regulation,
policy, guideline or practice governing or affecting financial
holding companies and their subsidiaries or with respect to tax or
accounting principles or otherwise; (vi) adverse changes or
conditions in capital and financial markets; (vii) changes in
interest rates; (viii) higher than expected costs or other
difficulties related to integration of combined or merged
businesses; (ix) the effects of business combinations and other
acquisition transactions, including the inability to realize our
loan and investment portfolios; (x) changes in the quality or
composition of our loan and investment portfolios; (xi) adequacy of
loan loss reserves; (xii) increased competition; (xiii) loss of
certain key officers; (xiv) deposit attrition; (xv) rapidly
changing technology; (xvi) unanticipated regulatory or judicial
proceedings and liabilities and other costs; (xvii) changes in the
cost of funds, demand for loan products or demand for financial
services; and (xviii) other economic, competitive, governmental or
technological factors affecting our operations, markets, products,
services and prices. Such developments could have an adverse impact
on CNB's financial position and results of operations. 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 the 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. All dollars are stated in
thousands, except share and per share data.
|
(unaudited) |
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
% |
|
|
|
% |
|
2020 |
2019 |
change |
|
2020 |
2019 |
change |
Income Statement |
|
|
|
|
|
|
|
Interest income |
$ |
46,648 |
|
$ |
40,608 |
|
14.9 |
|
% |
|
$ |
167,167 |
|
$ |
155,728 |
|
7.3 |
|
% |
Interest expense |
6,533 |
|
10,863 |
|
(39.9 |
) |
% |
|
32,456 |
|
39,530 |
|
(17.9 |
) |
% |
Net interest income |
40,115 |
|
29,745 |
|
34.9 |
|
% |
|
134,711 |
|
116,198 |
|
15.9 |
|
% |
Provision for credit losses (2) |
3,289 |
|
812 |
|
305.0 |
|
% |
|
15,354 |
|
6,024 |
|
154.9 |
|
% |
Net interest income after provision for credit losses |
36,826 |
|
28,933 |
|
27.3 |
|
% |
|
119,357 |
|
110,174 |
|
8.3 |
|
% |
|
|
|
|
|
|
|
|
Non-interest income |
|
|
|
|
|
|
|
Service charges on deposit accounts |
1,443 |
|
1,676 |
|
(13.9 |
) |
% |
|
5,095 |
|
6,402 |
|
(20.4 |
) |
% |
Other service charges and fees |
700 |
|
775 |
|
(9.7 |
) |
% |
|
2,548 |
|
2,930 |
|
(13.0 |
) |
% |
Wealth and asset management fees |
1,416 |
|
1,145 |
|
23.7 |
|
% |
|
5,497 |
|
4,627 |
|
18.8 |
|
% |
Net realized gains on available-for-sale securities |
0 |
|
0 |
|
NA |
|
|
|
2,190 |
|
148 |
|
1,379.7 |
|
% |
Net realized and unrealized gains (losses) on trading
securities |
408 |
|
700 |
|
(41.7 |
) |
% |
|
328 |
|
1,888 |
|
(82.6 |
) |
% |
Realized gains on Visa Class B shares |
0 |
|
0 |
|
NA |
|
|
|
0 |
|
463 |
|
NA |
|
|
Mortgage banking |
1,264 |
|
395 |
|
220.0 |
|
% |
|
3,354 |
|
1,412 |
|
137.5 |
|
% |
Bank owned life insurance |
457 |
|
315 |
|
45.1 |
|
% |
|
1,747 |
|
1,317 |
|
32.6 |
|
% |
Card processing and interchange income |
1,668 |
|
1,196 |
|
39.5 |
|
% |
|
5,727 |
|
4,641 |
|
23.4 |
|
% |
Other |
612 |
|
552 |
|
10.9 |
|
% |
|
1,573 |
|
2,147 |
|
(26.7 |
) |
% |
Total non-interest income |
7,968 |
|
6,754 |
|
18.0 |
|
% |
|
28,059 |
|
25,975 |
|
8.0 |
|
% |
Non-interest expenses |
|
|
|
|
|
|
|
Salaries and benefits |
14,145 |
|
12,365 |
|
14.4 |
|
% |
|
48,723 |
|
46,405 |
|
5.0 |
|
% |
Net occupancy expense of premises |
3,391 |
|
2,977 |
|
13.9 |
|
% |
|
12,333 |
|
11,221 |
|
9.9 |
|
% |
FDIC insurance premiums |
448 |
|
350 |
|
28.0 |
|
% |
|
2,414 |
|
1,252 |
|
92.8 |
|
% |
Core Deposit Intangible amortization |
28 |
|
97 |
|
(71.1 |
) |
% |
|
206 |
|
567 |
|
(63.7 |
) |
% |
Card processing and interchange expenses |
943 |
|
711 |
|
32.6 |
|
% |
|
3,135 |
|
2,891 |
|
8.4 |
|
% |
Merger costs, prepayment penalties and branch closure costs |
7,435 |
|
170 |
|
4,273.5 |
|
% |
|
12,642 |
|
170 |
|
7,336.5 |
|
% |
Other |
8,627 |
|
6,235 |
|
38.4 |
|
% |
|
27,873 |
|
25,002 |
|
11.5 |
|
% |
Total non-interest expenses |
35,017 |
|
22,905 |
|
52.9 |
|
% |
|
107,326 |
|
87,508 |
|
22.6 |
|
% |
|
|
|
|
|
|
|
|
Income before income
taxes |
9,777 |
|
12,782 |
|
(23.5 |
) |
% |
|
40,090 |
|
48,641 |
|
(17.6 |
) |
% |
Income tax expense |
1,878 |
|
2,298 |
|
(18.3 |
) |
% |
|
7,347 |
|
8,560 |
|
(14.2 |
) |
% |
Net income |
7,899 |
|
10,484 |
|
(24.7 |
) |
% |
|
32,743 |
|
40,081 |
|
(18.3 |
) |
% |
Preferred stock dividends |
1,147 |
|
0 |
|
NA |
|
|
|
1,147 |
|
0 |
|
NA |
|
|
Net income available to common
stockholders |
$ |
6,752 |
|
$ |
10,484 |
|
(35.6 |
) |
% |
|
$ |
31,596 |
|
$ |
40,081 |
|
(21.2 |
) |
% |
|
|
|
|
|
|
|
|
Average diluted common shares
outstanding |
16,792,676 |
|
15,178,128 |
|
|
|
16,000,749 |
|
15,164,280 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common
share |
$ |
0.40 |
|
$ |
0.69 |
|
(42.0 |
) |
% |
|
$ |
1.97 |
|
$ |
2.63 |
|
(25.1 |
) |
% |
Cash dividends per common
share |
$ |
0.17 |
|
$ |
0.17 |
|
0.0 |
|
% |
|
$ |
0.68 |
|
$ |
0.68 |
|
0.0 |
|
% |
|
|
|
|
|
|
|
|
Payout ratio |
43 |
% |
25 |
% |
|
|
35 |
% |
26 |
% |
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
December 31, |
|
|
December 31, |
|
|
|
|
|
|
(unaudited) |
|
|
|
2020 |
2019 |
|
|
2020 |
2019 |
|
Average Balances |
|
|
|
|
|
|
|
Loans, net of unearned income |
$ |
3,351,980 |
|
$ |
2,764,173 |
|
|
|
$ |
3,115,171 |
|
$ |
2,630,110 |
|
|
Loans, net of unearned income and PPP-related loans (1) |
3,148,921 |
|
2,764,173 |
|
|
|
2,965,096 |
|
2,630,110 |
|
|
Investment securities |
586,747 |
|
547,386 |
|
|
|
574,044 |
|
540,127 |
|
|
Total earning assets |
4,508,257 |
|
3,390,416 |
|
|
|
4,092,076 |
|
3,194,911 |
|
|
Total earning assets, net of PPP-related assets (1) |
4,094,577 |
|
3,390,416 |
|
|
|
3,755,758 |
|
3,194,911 |
|
|
Total assets |
4,779,624 |
|
3,616,347 |
|
|
|
4,347,142 |
|
3,413,737 |
|
|
Total assets, net of PPP-related assets (1) |
4,365,944 |
|
3,616,347 |
|
|
|
4,010,824 |
|
3,413,737 |
|
|
Non interest-bearing deposits |
627,843 |
|
373,289 |
|
|
|
516,723 |
|
360,208 |
|
|
Interest-bearing deposits |
3,469,102 |
|
2,588,202 |
|
|
|
3,123,823 |
|
2,402,361 |
|
|
Common shareholders' equity |
360,387 |
|
301,605 |
|
|
|
337,963 |
|
285,324 |
|
|
Tangible common shareholders' equity (1) |
315,039 |
|
262,656 |
|
|
|
296,142 |
|
246,161 |
|
|
|
|
|
|
|
|
|
|
Average Yields |
|
|
|
|
|
|
|
Loans, net of unearned income |
5.20 |
% |
5.28 |
% |
|
|
4.93 |
% |
5.35 |
% |
|
Investment securities |
2.10 |
% |
2.88 |
% |
|
|
2.53 |
% |
2.99 |
% |
|
Total earning assets |
4.16 |
% |
4.81 |
% |
|
|
4.15 |
% |
4.93 |
% |
|
Total earning assets, net of PPP-related assets (1) |
4.15 |
% |
4.81 |
% |
|
|
4.37 |
% |
4.93 |
% |
|
Interest-bearing deposits |
0.54 |
% |
1.32 |
% |
|
|
0.77 |
% |
1.26 |
% |
|
Interest-bearing liabilities |
0.71 |
% |
1.49 |
% |
|
|
0.95 |
% |
1.45 |
% |
|
|
|
|
|
|
|
|
|
Performance Ratios (annualized) |
|
|
|
|
|
|
|
Return on average assets |
0.66 |
% |
1.15 |
% |
|
|
0.75 |
% |
1.17 |
% |
|
Return on average assets, net of merger costs, prepayment penalties
and branch closure costs (1) |
1.15 |
% |
1.16 |
% |
|
|
0.99 |
% |
1.18 |
% |
|
Return on average common equity |
7.45 |
% |
13.79 |
% |
|
|
9.35 |
% |
14.05 |
% |
|
Return on average common equity, net of merger costs, prepayment
penalties and branch closure costs (1) |
13.94 |
% |
13.97 |
% |
|
|
12.36 |
% |
14.09 |
% |
|
Return on average tangible common equity (1) |
8.53 |
% |
15.84 |
% |
|
|
10.67 |
% |
16.28 |
% |
|
Return on average tangible common equity, net of merger costs,
prepayment penalties and branch closure costs (1) |
15.94 |
% |
16.04 |
% |
|
|
14.10 |
% |
16.34 |
% |
|
Net interest margin, fully tax equivalent basis (1) |
3.58 |
% |
3.54 |
% |
|
|
3.34 |
% |
3.69 |
% |
|
Net interest margin, fully tax equivalent basis and net of
PPP-related assets (1) |
3.51 |
% |
3.54 |
% |
|
|
3.50 |
% |
3.69 |
% |
|
Efficiency Ratio |
72.16 |
% |
61.58 |
% |
|
|
65.10 |
% |
60.19 |
% |
|
Efficiency Ratio, net of merger costs, prepayment penalties and
branch closure costs (1) |
56.82 |
% |
61.12 |
% |
|
|
57.41 |
% |
60.07 |
% |
|
|
|
|
|
|
|
|
|
Net Loan Charge-Offs |
|
|
|
|
|
|
|
CNB Bank net loan charge-offs |
$ |
1,571 |
|
$ |
1,043 |
|
|
|
$ |
5,131 |
|
$ |
4,384 |
|
|
Holiday Financial net loan charge-offs |
208 |
|
503 |
|
|
|
1,299 |
|
1,871 |
|
|
Total net loan charge-offs |
$ |
1,779 |
|
$ |
1,546 |
|
|
|
$ |
6,430 |
|
$ |
6,255 |
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs / average loans |
0.21 |
% |
0.22 |
% |
|
|
0.21 |
% |
0.24 |
% |
|
|
(unaudited)December 31, |
December 31, |
|
% change versus |
|
2020 |
2019 |
|
12/31/19 |
|
|
|
|
Ending Balance Sheet |
|
|
|
|
Loans, net of unearned income |
$ |
3,371,789 |
|
|
$ |
2,804,035 |
|
|
|
20.2 |
|
% |
Loans held for sale |
8,514 |
|
|
930 |
|
|
|
815.5 |
|
% |
Investment securities |
591,557 |
|
|
552,122 |
|
|
|
7.1 |
|
% |
FHLB and other equity interests |
2,899 |
|
|
11,354 |
|
|
|
(74.5 |
) |
% |
Other earning assets |
488,326 |
|
|
150,601 |
|
|
|
224.3 |
|
% |
Total earning assets |
4,463,085 |
|
|
3,519,042 |
|
|
|
26.8 |
|
% |
|
|
|
|
|
Allowance for credit losses (2) |
(34,340 |
) |
|
(19,473 |
) |
|
|
76.3 |
|
% |
Goodwill |
43,749 |
|
|
38,730 |
|
|
|
13.0 |
|
% |
Core deposit intangible |
567 |
|
|
160 |
|
|
|
254.4 |
|
% |
Other assets |
256,338 |
|
|
225,200 |
|
|
|
13.8 |
|
% |
Total assets |
$ |
4,729,399 |
|
|
$ |
3,763,659 |
|
|
|
25.7 |
|
% |
|
|
|
|
|
Non interest-bearing deposits |
$ |
627,114 |
|
|
$ |
382,259 |
|
|
|
64.1 |
|
% |
Interest-bearing deposits |
3,554,630 |
|
|
2,720,068 |
|
|
|
30.7 |
|
% |
Total deposits |
4,181,744 |
|
|
3,102,327 |
|
|
|
34.8 |
|
% |
|
|
|
|
|
Borrowings |
0 |
|
|
227,907 |
|
|
|
(100.0 |
) |
% |
Subordinated debt |
70,620 |
|
|
70,620 |
|
|
|
0.0 |
|
% |
Other liabilities |
60,898 |
|
|
57,839 |
|
|
|
5.3 |
|
% |
|
|
|
|
|
Common stock |
0 |
|
|
0 |
|
|
|
NA |
Preferred stock |
57,785 |
|
|
0 |
|
|
|
NA |
Additional paid in capital |
127,518 |
|
|
99,335 |
|
|
|
28.4 |
|
% |
Retained earnings |
218,727 |
|
|
201,503 |
|
|
|
8.5 |
|
% |
Treasury stock |
(2,967 |
) |
|
(2,811 |
) |
|
|
5.5 |
|
% |
Accumulated other comprehensive income (loss) |
15,074 |
|
|
6,939 |
|
|
|
NA |
Total shareholders' equity |
416,137 |
|
|
304,966 |
|
|
|
36.5 |
|
% |
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
4,729,399 |
|
|
$ |
3,763,659 |
|
|
|
25.7 |
|
% |
|
|
|
|
|
Ending shares outstanding |
16,833,008 |
|
|
15,247,985 |
|
|
|
|
|
|
|
|
|
Book value per common share |
$ |
21.29 |
|
|
$ |
20.00 |
|
|
|
6.5 |
|
% |
Tangible book value per common share (1) |
$ |
18.66 |
|
|
$ |
17.45 |
|
|
|
6.9 |
|
% |
|
|
|
|
|
Capital Ratios |
|
|
|
|
Tangible common equity / tangible assets (1) |
6.70 |
|
% |
7.14 |
|
% |
|
|
Tier 1 leverage ratio (4) |
8.06 |
|
% |
7.86 |
|
% |
|
|
Common equity tier 1 ratio (4) |
9.45 |
|
% |
9.32 |
|
% |
|
|
Tier 1 risk based ratio (4) |
11.86 |
|
% |
10.03 |
|
% |
|
|
Total risk based ratio (4) |
14.29 |
|
% |
12.51 |
|
% |
|
|
|
|
|
|
|
Asset Quality |
|
|
|
|
Non-accrual loans |
$ |
30,359 |
|
|
$ |
21,736 |
|
|
|
|
Loans 90+ days past due and accruing |
325 |
|
|
61 |
|
|
|
|
Total non-performing loans |
30,684 |
|
|
21,797 |
|
|
|
|
Other real estate owned |
862 |
|
|
1,633 |
|
|
|
|
Total non-performing assets |
$ |
31,546 |
|
|
$ |
23,430 |
|
|
|
|
|
|
|
|
|
Loans modified in a troubled debt restructuring (TDR): |
|
|
|
|
Performing TDR loans |
$ |
6,773 |
|
|
$ |
7,359 |
|
|
|
|
Non-performing TDR loans (3) |
3,536 |
|
|
2,443 |
|
|
|
|
Total TDR loans |
$ |
10,309 |
|
|
$ |
9,802 |
|
|
|
|
|
|
|
|
|
Non-performing assets / Loans + OREO |
0.94 |
|
% |
0.84 |
|
% |
|
|
Non-performing assets / Total assets |
0.67 |
|
% |
0.62 |
|
% |
|
|
Non-performing assets / Total assets, net of PPP-related assets
(1) |
0.71 |
|
% |
0.62 |
|
% |
|
|
Allowance for credit losses / Loans (2) |
1.02 |
|
% |
0.69 |
|
% |
|
|
Allowance for credit losses / Loans, net of PPP-related loans (1)
(2) |
1.07 |
|
% |
0.69 |
|
% |
|
|
|
|
|
|
|
(1) Management uses non-GAAP financial information in its analysis
of the Corporation’s performance. Management believes that these
non-GAAP measures provide a greater understanding of ongoing
operations, enhance comparability of results of operations with
prior periods and show the effects of significant gains and charges
in the periods presented. The Corporation’s management believes
that investors may use these non-GAAP measures to analyze the
Corporation’s financial performance without the impact of unusual
items or events that may obscure trends in the Corporation’s
underlying performance. This non-GAAP data should be considered in
addition to results prepared in accordance with GAAP, and is not a
substitute for, or superior to, GAAP results. Limitations
associated with non-GAAP financial measures include the risks that
persons might disagree as to the appropriateness of items included
in these measures and that different companies might calculate
these measures differently.. A reconciliation of these non-GAAP
financial measures is provided below (dollars in thousands, except
per share data). |
|
(2) Beginning January 1, 2020, calculation is based upon current
expected credit loss methodology. Prior to January 1, 2020,
calculation was based on probable incurred loss methodology. |
|
(3) Nonperforming TDR loans are also included in the balance of
non-accrual loans in the previous table. |
|
(4) Capital ratios as of December 31, 2020 are estimated. |
|
|
|
|
|
|
Non-GAAP
Reconciliations
(1): |
|
|
(unaudited) |
|
|
|
|
December 31, |
December 31, |
|
|
|
2020 |
2019 |
|
|
Calculation of tangible book value per share and tangible
common equity/tangible assets: |
|
|
|
|
Shareholders' equity |
$ |
416,137 |
|
|
$ |
304,966 |
|
|
|
|
Less: preferred equity |
57,785 |
|
|
0 |
|
|
|
|
Less: goodwill |
43,749 |
|
|
38,730 |
|
|
|
|
Less: core deposit intangible |
567 |
|
|
160 |
|
|
|
|
Tangible common equity |
$ |
314,036 |
|
|
$ |
266,076 |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
4,729,399 |
|
|
$ |
3,763,659 |
|
|
|
|
Less: goodwill |
43,749 |
|
|
38,730 |
|
|
|
|
Less: core deposit intangible |
567 |
|
|
160 |
|
|
|
|
Tangible assets |
$ |
4,685,083 |
|
|
$ |
3,724,769 |
|
|
|
|
|
|
|
|
|
Ending shares outstanding |
16,833,008 |
|
|
15,247,985 |
|
|
|
|
|
|
|
|
|
Tangible book value per common share |
$ |
18.66 |
|
|
$ |
17.45 |
|
|
|
|
Tangible common equity/Tangible assets |
6.70 |
|
% |
7.14 |
|
% |
|
|
|
|
|
|
|
Calculation of tangible common equity/tangible assets, net
of PPP-related loans: |
|
|
|
|
Tangible common equity |
$ |
314,036 |
|
|
$ |
266,076 |
|
|
|
|
|
|
|
|
|
Tangible assets |
$ |
4,685,083 |
|
|
$ |
3,724,769 |
|
|
|
|
Less: PPP-related loans |
155,529 |
|
|
0 |
|
|
|
|
Adjusted tangible assets |
$ |
4,529,554 |
|
|
$ |
3,724,769 |
|
|
|
|
|
|
|
|
|
Adjusted tangible common equity/tangible assets |
6.93 |
|
% |
7.14 |
|
% |
|
|
Non-GAAP
Reconciliations
(1): |
|
(unaudited) |
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
(unaudited) |
|
|
2020 |
2019 |
|
2020 |
2019 |
Calculation of average loans, net of unearned income and
PPP-related loans: |
|
|
|
|
|
Average loans, net of unearned |
$ |
3,351,980 |
|
$ |
2,764,173 |
|
|
$ |
3,115,171 |
|
$ |
2,630,110 |
|
Less: average PPP loans |
203,059 |
|
0 |
|
|
150,075 |
|
0 |
|
Adjusted average loans, net of unearned income and PPP-related
loans (non-GAAP) |
$ |
3,148,921 |
|
$ |
2,764,173 |
|
|
$ |
2,965,096 |
|
$ |
2,630,110 |
|
|
|
|
|
|
|
Calculation of average total earning assets, net of
PPP-related assets: |
|
|
|
|
|
Average total earning assets |
$ |
4,508,257 |
|
$ |
3,390,416 |
|
|
$ |
4,092,076 |
|
$ |
3,194,911 |
|
Less: average PPP-related loans |
203,059 |
|
0 |
|
|
150,075 |
|
0 |
|
Less: estimated average PPP deposits held at the Federal
Reserve |
210,621 |
|
0 |
|
|
154,124 |
|
0 |
|
Less: average PPPLF deposits held at the Federal Reserve |
0 |
|
0 |
|
|
32,119 |
|
0 |
|
Adjusted average total earning assets, net of PPP-related assets
(non-GAAP) |
$ |
4,094,577 |
|
$ |
3,390,416 |
|
|
$ |
3,755,758 |
|
$ |
3,194,911 |
|
|
|
|
|
|
|
Calculation of average total assets, net of PPP-related
assets: |
|
|
|
|
|
Average total assets |
$ |
4,779,624 |
|
$ |
3,616,347 |
|
|
$ |
4,347,142 |
|
$ |
3,413,737 |
|
Less: average PPP-related loans |
203,059 |
|
0 |
|
|
150,075 |
|
0 |
|
Less: estimated average PPP deposits held at the Federal
Reserve |
210,621 |
|
0 |
|
|
154,124 |
|
0 |
|
Less: average PPPLF deposits held at the Federal Reserve |
0 |
|
0 |
|
|
32,119 |
|
0 |
|
Adjusted average total assets, net of PPP-related assets
(non-GAAP) |
$ |
4,365,944 |
|
$ |
3,616,347 |
|
|
$ |
4,010,824 |
|
$ |
3,413,737 |
|
|
|
|
|
|
|
Calculation of average yield on earning assets, net of
unearned income, PPP-related assets and PPP-related
fees: |
|
|
|
|
|
Investment income (tax equivalent) |
$ |
2,999 |
|
$ |
3,889 |
|
|
$ |
14,037 |
|
$ |
15,963 |
|
Add: loan income (tax equivalent) |
43,823 |
|
36,806 |
|
|
153,639 |
|
140,742 |
|
Add: other earning asset income (tax equivalent) |
155 |
|
275 |
|
|
852 |
|
499 |
|
Less: PPP-related fees |
4,457 |
|
0 |
|
|
5,140 |
|
0 |
|
Total income related to earning assets (tax equivalent)
(non-GAAP) |
$ |
42,520 |
|
40,970 |
|
|
$ |
163,388 |
|
$ |
157,204 |
|
|
|
|
|
|
|
Adjusted average total earning assets, net of PPP-related assets
(non-GAAP) |
$ |
4,094,577 |
|
$ |
3,390,416 |
|
|
$ |
3,755,758 |
|
$ |
3,194,911 |
|
Less: average mark to market adjustment on investments
(non-GAAP) |
19,765 |
|
12,116 |
|
|
18,884 |
|
5,631 |
|
Adjusted average total earning assets, net of market to market,
PPP-related assets (non-GAAP) |
$ |
4,074,812 |
|
$ |
3,378,300 |
|
|
$ |
3,736,874 |
|
3,189,280 |
|
Adjusted average yield on earning assets, net of unearned income,
PPP-related assets and PPP-related fees (non-GAAP)
(annualized) |
4.15 |
% |
4.81 |
% |
|
4.37 |
% |
4.93 |
% |
Non-GAAP
Reconciliations
(1): |
|
(unaudited) |
|
|
December 31, |
December 31, |
|
2020 |
2019 |
|
|
|
Calculation of non-performing assets / Total assets, net of
PPP-related assets: |
|
|
Non-performing assets |
$ |
31,546 |
|
$ |
23,430 |
|
|
|
|
Total assets |
$ |
4,729,399 |
|
$ |
3,763,659 |
|
Less: PPP-related loans |
155,529 |
|
0 |
|
Less: estimated PPP deposits held at the Federal Reserve |
159,584 |
|
0 |
|
Adjusted total assets, net of PPP-related assets (non-GAAP) |
$ |
4,414,286 |
|
$ |
3,763,659 |
|
|
|
|
Adjusted non-performing assets / total assets, net of PPP-related
assets (non-GAAP) |
0.71 |
% |
0.62 |
% |
|
|
|
Calculation of allowance / loans, net of PPP-related
loans: |
|
|
Total allowance for credit losses (2) |
$ |
34,340 |
|
$ |
19,473 |
|
|
|
|
Total loans net of unearned income |
$ |
3,371,789 |
|
$ |
2,804,035 |
|
Less: PPP-related loans |
155,529 |
|
0 |
|
Adjusted total loans, net of unearned income, PPP-related loans
(non-GAAP) |
$ |
3,216,260 |
|
$ |
2,804,035 |
|
|
|
|
Adjusted allowance / loans, net of PPP-related loans (non-GAAP)
(2) |
1.07 |
% |
0.69 |
% |
|
|
|
|
|
|
(unaudited) |
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
(unaudited) |
|
|
2020 |
2019 |
|
2020 |
2019 |
Calculation of net interest margin (fully tax equivalent
basis): |
|
|
|
|
|
Interest income (fully tax equivalent basis) (non-GAAP) |
$ |
46,977 |
|
$ |
40,970 |
|
|
$ |
168,528 |
|
$ |
157,204 |
|
Interest expense (fully tax equivalent basis) (non-GAAP) |
6,533 |
|
10,863 |
|
|
32,456 |
|
39,530 |
|
Net interest income (fully tax equivalent basis) (non-GAAP) |
$ |
40,444 |
|
$ |
30,107 |
|
|
$ |
136,072 |
|
$ |
117,674 |
|
|
|
|
|
|
|
Average total earning assets |
$ |
4,508,257 |
|
$ |
3,390,416 |
|
|
$ |
4,092,076 |
|
$ |
3,194,911 |
|
Less: average mark to market adjustment on investments |
19,765 |
|
12,116 |
|
|
18,884 |
|
5,631 |
|
Adjusted average total earning assets, net of mark to market
(non-GAAP) |
$ |
4,488,492 |
|
$ |
3,378,300 |
|
|
$ |
4,073,192 |
|
$ |
3,189,280 |
|
|
|
|
|
|
|
Net interest margin, fully tax equivalent basis (non-GAAP)
(annualized) |
3.58 |
% |
3.54 |
% |
|
3.34 |
% |
3.69 |
% |
|
|
|
|
|
|
Calculation of net interest margin (fully tax equivalent
basis), net of PPP-related assets and PPP-related
fees: |
|
|
|
|
|
Net interest income (fully tax equivalent basis) (non-GAAP) |
$ |
40,444 |
|
$ |
30,107 |
|
|
$ |
136,072 |
|
$ |
117,674 |
|
Less: Recognized PPP-related fees |
4,457 |
|
0 |
|
|
5,140 |
|
0 |
|
Adjusted interest income (fully tax equivalent basis), net of
PPP-related fees (non-GAAP) |
$ |
35,987 |
|
$ |
30,107 |
|
|
$ |
130,932 |
|
$ |
117,674 |
|
Adjusted average total earning assets, net of market to market,
PPP-related assets (non-GAAP) |
$ |
4,074,812 |
|
$ |
3,378,300 |
|
|
$ |
3,736,874 |
|
$ |
3,189,280 |
|
|
|
|
|
|
|
Net interest margin, fully tax equivalent basis, net of PPP-related
assets and PPP-related fees (non-GAAP) (annualized) |
3.51 |
% |
3.54 |
% |
|
3.50 |
% |
3.69 |
% |
Non-GAAP
Reconciliations
(1): |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
(unaudited) |
|
|
2020 |
2019 |
|
2020 |
2019 |
Calculation of adjusted efficiency ratio, net of merger
costs, prepayment penalties and branch closure costs: |
|
|
|
|
|
Non-interest expense |
$ |
35,017 |
|
$ |
22,905 |
|
|
$ |
107,326 |
|
$ |
87,508 |
|
Less: core deposit intangible amortization |
28 |
|
97 |
|
|
206 |
|
567 |
|
Less: merger costs, prepayment penalties and branch closure
costs |
7,435 |
|
170 |
|
|
12,642 |
|
170 |
|
Adjusted non-interest expense (non-GAAP) |
$ |
27,554 |
|
$ |
22,638 |
|
|
$ |
94,478 |
|
$ |
86,771 |
|
|
|
|
|
|
|
Non-interest income |
$ |
7,968 |
|
$ |
6,754 |
|
|
$ |
28,059 |
|
$ |
25,975 |
|
|
|
|
|
|
|
Net interest income |
$ |
40,115 |
|
$ |
29,745 |
|
|
$ |
134,711 |
|
$ |
116,198 |
|
Less: tax exempt investment and loan income, net of TEFRA
(non-GAAP) |
1,352 |
|
1,606 |
|
|
5,703 |
|
6,664 |
|
Add: tax exempt investment and loan income (non-GAAP)
(tax-equivalent) |
1,759 |
|
2,148 |
|
|
7,490 |
|
8,946 |
|
Adjusted net interest income (non-GAAP) |
40,522 |
|
30,287 |
|
|
136,498 |
|
118,480 |
|
Adjusted net revenue (non-GAAP) (tax-equivalent) |
$ |
48,490 |
|
$ |
37,041 |
|
|
$ |
164,557 |
|
$ |
144,455 |
|
Adjusted efficiency ratio, net of merger costs, prepayment
penalties and branch closure costs |
56.82 |
% |
61.12 |
% |
|
57.41 |
% |
60.07 |
% |
|
|
|
|
|
|
Calculation of adjusted return on average total assets, net
of merger costs, prepayment penalties, branch closure costs
and PPP-related assets: |
|
|
|
|
|
Net income |
$ |
7,899 |
|
$ |
10,484 |
|
|
$ |
32,743 |
|
$ |
40,081 |
|
Add: merger costs, prepayment penalties and branch closure costs
(net of tax) |
5,874 |
|
134 |
|
|
10,168 |
|
134 |
|
Adjusted net income (non-GAAP)(net of tax) |
$ |
13,773 |
|
$ |
10,618 |
|
|
$ |
42,911 |
|
$ |
40,215 |
|
Average total assets |
$ |
4,779,624 |
|
$ |
3,616,347 |
|
|
$ |
4,347,142 |
|
$ |
3,413,737 |
|
Adjusted return on average total assets, net of merger costs,
prepayment penalties, branch closure costs and PPP-related
assets (non-GAAP)(annualized) |
1.15 |
% |
1.16 |
% |
|
0.99 |
% |
1.18 |
% |
|
|
|
|
|
|
Calculation of adjusted return on average common equity,
net of merger costs, prepayment penalties and branch closure
costs: |
|
|
|
|
|
Net income available to common stockholders |
$ |
6,752 |
|
$ |
10,484 |
|
|
$ |
31,596 |
|
$ |
40,081 |
|
Add: merger costs, prepayment penalties and branch closure costs
(net of tax) |
5,874 |
|
134 |
|
|
10,168 |
|
134 |
|
Adjusted net income (non-GAAP)(net of tax) |
$ |
12,626 |
|
$ |
10,618 |
|
|
$ |
41,764 |
|
$ |
40,215 |
|
Average shareholders' common equity |
$ |
360,387 |
|
$ |
301,605 |
|
|
$ |
337,963 |
|
$ |
285,324 |
|
Adjusted return on average common equity, net of merger costs,
prepayment penalties and branch closure
costs (non-GAAP)(annualized) |
13.94 |
% |
13.97 |
% |
|
12.36 |
% |
14.09 |
% |
|
|
|
|
|
|
Calculation of adjusted return on average tangible common
equity, net of merger costs, prepayment penalties and branch
closure costs: |
|
|
|
|
|
Net income available to common stockholders |
$ |
6,752 |
|
$ |
10,484 |
|
|
$ |
31,596 |
|
$ |
40,081 |
|
Add: merger costs, prepayment penalties and branch closure costs
(net of tax) |
5,874 |
|
134 |
|
|
10,168 |
|
134 |
|
Adjusted net income (non-GAAP)(net of tax) |
$ |
12,626 |
|
$ |
10,618 |
|
|
$ |
41,764 |
|
$ |
40,215 |
|
Average tangible shareholders' common equity |
$ |
315,039 |
|
$ |
262,656 |
|
|
$ |
296,142 |
|
$ |
246,161 |
|
Adjusted return on average tangible common equity, net of merger
costs, prepayment penalties and branch closure
costs (non-GAAP)(annualized) |
15.94 |
% |
16.04 |
% |
|
14.10 |
% |
16.34 |
% |
Non-GAAP
Reconciliations
(1): |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, |
|
December 31, |
|
|
|
|
(unaudited) |
|
|
2020 |
2019 |
|
2020 |
2019 |
Calculation of adjusted earnings per common share, net of
merger costs, prepayment penalties and branch closure
costs: |
|
|
|
|
|
Net earnings allocated to common stock |
$ |
6,733 |
|
$ |
10,451 |
|
|
$ |
31,496 |
|
$ |
39,934 |
|
Add: Merger costs, prepayment penalties and branch closure costs,
after-tax allocated to common stock |
5,860 |
|
133 |
|
|
10,138 |
|
134 |
|
Adjusted net earnings allocated to common stock (non-GAAP) |
$ |
12,593 |
|
$ |
10,584 |
|
|
$ |
41,634 |
|
$ |
40,068 |
|
|
|
|
|
|
|
Weighted average common shares outstanding |
16,833 |
|
15,222 |
|
|
16,048 |
|
15,219 |
|
Less: Average participating shares |
40 |
|
44 |
|
|
48 |
|
55 |
|
Add: Dilutive shares |
0 |
|
0 |
|
|
0 |
|
0 |
|
Weighted average shares and dilutive potential common shares |
16,793 |
|
15,178 |
|
|
16,000 |
|
15,164 |
|
|
|
|
|
|
|
Adjusted diluted earnings per common share, net of merger costs,
prepayment penalties and branch closure costs |
$ |
0.75 |
|
$ |
0.70 |
|
|
$ |
2.60 |
|
$ |
2.64 |
|
|
|
|
|
|
|
Calculation of PTPP income: |
|
|
|
|
|
Net income |
$ |
7,899 |
|
$ |
10,484 |
|
|
$ |
32,743 |
|
$ |
40,081 |
|
Add: Provision expense |
3,289 |
|
812 |
|
|
15,354 |
|
6,024 |
|
Add: Income tax expense |
1,878 |
|
2,298 |
|
|
7,347 |
|
8,560 |
|
PTPP income (non-GAAP) |
$ |
13,066 |
|
$ |
13,594 |
|
|
$ |
55,444 |
|
$ |
54,665 |
|
|
|
|
|
|
|
Calculation of PTPP income before merger costs, prepayment
penalties and branch closure costs: |
|
|
|
|
|
PTPP income (non-GAAP) |
$ |
13,066 |
|
$ |
13,594 |
|
|
$ |
55,444 |
|
$ |
54,665 |
|
Add: Merger costs, prepayment penalties and branch closure
costs |
7,435 |
|
170 |
|
|
12,642 |
|
170 |
|
PTPP before merger costs, prepayment penalties and branch closure
costs (non-GAAP) |
$ |
20,501 |
|
$ |
13,764 |
|
|
$ |
68,086 |
|
$ |
54,835 |
|
|
|
|
|
|
|
Calculation of non-interest expenses excluding merger
costs, prepayment penalties and branch closure
costs: |
|
|
|
|
|
Non-interest expense |
$ |
35,017 |
|
$ |
22,905 |
|
|
$ |
107,326 |
|
$ |
87,508 |
|
Less: Merger costs, prepayment penalties and branch closure
costs |
7,435 |
|
170 |
|
|
12,642 |
|
170 |
|
Non-interest expense excluding merger costs, prepayment penalties
and branch closure costs (non-GAAP) |
$ |
27,582 |
|
$ |
22,735 |
|
|
$ |
94,684 |
|
$ |
87,338 |
|
|
|
|
|
|
|
Contact: Tito L. Lima
Treasurer
(814) 765-9621
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