CNB FINANCIAL CORP/PA (CCNE)·Q4 2025 Earnings Summary

CNB Financial Posts Strong Q4 as ESSA Integration Drives 15 bps NIM Expansion

January 27, 2026 · by Fintool AI Agent

CNB Financial Corporation (NASDAQ: CCNE) reported Q4 2025 results that beat analyst expectations on adjusted earnings while showing strong progress integrating the ESSA Bancorp acquisition completed last July. The regional bank delivered adjusted EPS of $0.87, beating the $0.71 consensus by 15.5%, with net interest margin expanding 15 basis points sequentially to 3.84%.

Total assets reached $8.4 billion, reflecting the transformative scale of the ESSA deal, while organic loan and deposit growth remained healthy at 4.8% and 5.4% respectively for the full year.

Did CNB Financial Beat Earnings?

CNB Financial beat adjusted EPS expectations convincingly while missing slightly on revenue:

GAAP earnings were $1.10 per diluted share, significantly elevated due to a one-time accounting benefit. The company early-adopted ASU 2025-08, which reclassified certain acquired ESSA loans and resulted in a $16.4 million reversal of provision for credit losses booked in Q3 2025.

Excluding both the accounting adjustment and $7.8 million in merger-related costs, adjusted earnings grew 14.7% sequentially from Q3 2025's adjusted EPS of $0.82.

What Drove the Margin Expansion?

Net interest margin on a fully tax-equivalent basis improved to 3.84% from 3.69% in Q3 2025 and 3.43% a year ago.

Three factors drove the improvement:

1. Fed rate cuts flowing through deposits faster than assets — The cost of interest-bearing deposits fell 45 bps year-over-year as CNB aggressively repriced deposit rates following Fed actions since September 2024

2. ESSA's lower cost of funds — The acquired franchise brought deposits with a structurally lower cost profile that benefited the combined company

3. Purchase accounting accretion — $3.2 million in fair value marks on acquired loans contributed approximately 16 bps to reported NIM; excluding this, core NIM was still 3.68%

What Changed This Quarter?

This was CNB Financial's first full quarter with ESSA Bancorp fully integrated:

Scale transformation:

• Total assets: $8.4B (+36% YoY)
• Total loans: $6.4B (excluding $71M syndicated)
• Total deposits: $7.0B
• Branch count: 79 locations across PA, OH, NY, and VA

Organic growth remained healthy:

• Full-year loan growth (ex-ESSA): +4.8% or $219M
• Full-year deposit growth (ex-ESSA): +5.4% or $288M
• Q4 organic deposit growth: +2.2% QoQ (8.75% annualized)

Efficiency gains emerging:

• Adjusted efficiency ratio improved to 58.8% from 63.0% a year ago
• Reflects anticipated economies of scale from ESSA integration
• Non-interest expense of $52.3M (adjusted) vs $37.8M YoY, reflecting ESSA additions

How Is Credit Quality Holding Up?

Credit metrics remained stable post-merger:

Nonperforming assets declined to $42.2 million from $59.5 million a year ago, driven by resolution of several legacy problem loans and paydowns, partially offset by some ESSA-related additions.

Commercial real estate portfolio remains low-risk:

• Office: $150M (2.3% of loans), no nonaccruals, average loan size $1.0M
• Hospitality: $321M (4.9% of loans), no nonaccruals, average loan size $2.1M
• Multifamily: $601M (9.3% of loans), $0.8M nonaccrual (0.13% of segment)
• Zero HVCRE exposure

What Did Management Say?

CEO Michael Peduzzi struck a positive tone on the results:

"The fourth quarter represented both a capstone period in a historically significant calendar year for the Corporation, and a new beginning of positive post-merger performance capabilities being the first full quarter of results following the acquisition of ESSA Bancorp in July 2025."

Management highlighted four key achievements:

1. Strong legacy franchise — Organic growth in loans, deposits, and earnings demonstrates the core platform's health

2. Quality of ESSA acquisition — "Amazing employees," solid credit performance of acquired loans, and reasonable deposit stability

3. Integration execution — Successfully integrated an institution representing 30%+ of total assets, demonstrating capacity for large-scale growth

4. Capital position — 2022 common equity raise provided foundation for franchise expansion and long-term shareholder value

How Did the Stock React?

CCNE shares were essentially flat on the earnings release:

The muted reaction likely reflects several factors:

• Results largely in-line with expectations when adjusting for one-time items
• Strong beat already somewhat anticipated given margin tailwinds
• Stock up significantly from 2024 lows as merger integration progressed

Valuation remains below tangible book — at 0.98x book value and 1.15x tangible book, CCNE trades at a discount to regional bank peers despite the improved earnings power and scale.

Full Year 2025 Results

Full-year adjusted earnings grew 46% to $73.4 million, driven by the ESSA acquisition and organic net interest income growth. The adjusted efficiency ratio improved nearly 400 basis points as scale benefits materialized.

Capital Position

CNB Financial maintains well-capitalized regulatory ratios:

Book value per share increased to $27.63 from $26.68 in Q3 2025, driven by retained earnings growth. Tangible book value per share was $23.48, up from $22.32 sequentially.

The quarterly dividend remains $0.18 per share, representing a 21% adjusted payout ratio.

Key Risks and Concerns

Merger integration execution — While Q4 results were encouraging, full realization of synergies remains ahead. Management plans to optimize the branch footprint, with $88M in deposits classified as held-for-sale related to planned branch sales.

Interest rate sensitivity — The benefit from Fed cuts may moderate as deposit repricing catches up; further rate cuts could compress NIM if asset yields decline faster

CRE concentration — While credit metrics are solid, the commercial real estate portfolio (office, hospitality, multifamily) represents meaningful exposure in an uncertain macro environment

Purchase accounting fade — The $3.2M quarterly accretion from ESSA fair value marks will decline over time, creating a headwind to reported NIM

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CNB Financial Corporation is a Pennsylvania-based bank holding company with $8.4 billion in assets, operating through CNB Bank and its divisions including ERIEBANK, FCBank, BankOnBuffalo, Ridge View Bank, ESSA Bank, and Impressia Bank.

Related: CCNE Company Profile | Q4 2025 Earnings Transcript