CNB FINANCIAL CORP/PA (CCNE)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered resilient core performance: adjusted diluted EPS was $0.57 (GAAP diluted EPS $0.50) on total revenue of $56.9M, with NIM at 3.38% and efficiency ratio deteriorating to 72.07% on higher non-interest expense and lower non-interest income .
• Versus estimates: consensus Primary EPS was ~$0.58*, so adjusted EPS was a slight miss; revenue of $56.9M materially exceeded consensus ~$52.3M* driven by stronger net interest income and deposit growth (3-5 estimates contributed) *.
• Balance sheet progress: loans rose modestly QoQ (+$11.7M) and deposits up $88.7M; adjusted uninsured deposit ratio declined YoY to 17.46% with available liquidity at ~5.3x adjusted uninsured deposits .
• Strategic catalyst: management reiterated the ESSA Bancorp all-stock merger expected to close in Q3 2025; pro forma metrics and accretion (2026) underpin medium-term EPS leverage and scale benefits .
• Asset quality stabilized QoQ: nonperforming assets fell to 0.89% of assets with lower net charge-offs; coverage against nonaccrual loans at ~88% and allowance at 1.03% of total loans .

What Went Well and What Went Wrong

What Went Well

• Deposit and loan growth: “continued commercial loan growth and demand” with deposits up 1.65% QoQ and favorable growth in noninterest-bearing deposits, while cost of interest-bearing liabilities fell 10 bps to 2.93% .
• Adjusted profitability YoY: adjusted EPS increased vs Q1 2024 ($0.57 vs $0.55) on higher net interest income; adjusted PPNR rose YoY ($17.4M vs $16.8M) .
• Liquidity and capital: available liquidity (~$4.7B contingent plus $447.1M at Fed) ~5.3x adjusted uninsured deposits; unrealized losses narrowed to $61.7M with capital ratios above well-capitalized thresholds .

What Went Wrong

• Margin and efficiency pressure: NIM compressed to 3.38% (3.43% in Q4) and efficiency ratio increased to 72.07% from 63.68% QoQ on lower net interest income, lower non-interest income, and higher non-interest expense .
• Non-interest income softness: fell to $8.5M vs $10.3M in Q4, driven by lower SBIC pass-throughs, higher unrealized losses on equities, and lower wealth fees .
• Elevated opex ex-merger: excluding merger costs, non-interest expense rose to $39.5M (from $37.8M in Q4) on salaries/benefits accruals and higher SERP/tech costs; merger-related costs added $1.5M .

Financial Results

Headline Financials vs Prior Periods and Estimates

Notes: Consensus values marked with asterisk were retrieved from S&P Global (Primary EPS Consensus Mean and Revenue Consensus Mean; 3 contributing estimates). Values retrieved from S&P Global.

Revenue Composition (Net Interest vs Non-Interest)

KPIs and Operating Metrics

Guidance Changes

No formal quantitative guidance ranges (revenue, margins, tax rate, OpEx) were provided in Q1 2025 materials .

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available in our document set; themes below synthesize management’s prepared remarks and prior quarter disclosures.

Management Commentary

• “These fundamentals of well‑priced and steadily growing loans and deposits position us well in our primary spread management business moving forward… we continue to focus on tightly managing the Corporation’s core overhead… and realize positive operating leverage and improved efficiencies” — Michael Peduzzi, President & CEO .
• “Fourth quarter 2024 continued the favorable trend… through disciplined pricing, risk management, and expanded multi-state franchise” .
• “Monitored market conditions and realized substantial interest expense savings by repositioning wholesale funding sources” .
• ESSA merger: pro forma ~$8B assets, Top 10 deposits in PA, ~35% EPS accretion (2026) with ~3.3-year TBV earnback, targeted cost synergies and loan/investment marks to support earnings trajectory .

Q&A Highlights

• No Q1 2025 earnings call transcript was available in our source set; therefore, no Q&A highlights or clarifications could be extracted [ListDocuments result: none].

Estimates Context

• EPS: Q1 2025 Primary EPS consensus ~$0.58* vs actual adjusted diluted EPS $0.57; slight miss, while GAAP diluted EPS was $0.50 reflecting $1.5M merger-related costs *.
• Revenue: consensus ~$52.3M* vs reported revenue $56.9M; a material beat driven by net interest income resilience and deposit growth *.
• Estimate count: 3 estimates each for EPS and revenue contributed to consensus*.

Notes: Values marked with asterisk were retrieved from S&P Global. Values retrieved from S&P Global.

Key Takeaways for Investors

• Near-term margin pressure but structural improvement in cost of funds: NIM compressed to 3.38% while cost of interest-bearing liabilities fell to 2.93% (below 3%), supporting spread stabilization as Fed cuts flow through .
• Revenue beat vs Street offset by softer fee income: net interest income resilience and deposit growth drove a top-line beat, but SBIC pass‑throughs and equity marks weigh on non-interest income variability .
• Opex normalization is a focus area: salaries/benefits accruals and tech costs elevated the efficiency ratio; watch for operating leverage as merger synergies and scale benefits materialize .
• Asset quality trending better QoQ: NPA ratio improved and net charge-offs fell; the specific multifamily exposure is reserved and being actively resolved; coverage and ACL metrics remain sound .
• Liquidity and deposit quality de-risk the story: adjusted uninsured deposits ~17.46% and liquidity coverage ~5.3x strengthen defense against volatility, reducing funding risk .
• ESSA merger is the medium-term catalyst: expected close in Q3 2025 with ~35% EPS accretion in 2026, scale and fee-line expansion, and accretion mechanics (marks) that bolster earnings profile; TBV earnback ~3.3 years .
• Trading implications: near-term sensitivity to margin/fee income prints and merger-cost cadence; medium-term re-rating potential on synergy execution, deposit cost discipline, and asset-quality stability.