What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-06 compared with 2024-03-07 · 319 added, 320 removed, 2100 unchanged (23% of the section changed)

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of CNB Financial Corporation (the “Corporation”) as of December 31, 2023, the related consolidated statements of income and comprehensive income, changes in shareholders’ equity, and cash flows for the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Corporation as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of CNB Financial Corporation (“Corporation”) as of December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Corporation as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Corporation’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 6, 2025, expressed an unqualified opinion thereon.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Credit Losses on Loans

As described in Notes 1 and 3 to the financial statements, the Corporation establishes an allowance representing the estimate of expected credit losses over the estimated life of the existing portfolio of loans.

Allowance for Credit Losses on Loans – Qualitative Factors

Description of the Critical Audit Matter

As described in Notes 1 and 3 to the financial statements, the Corporation’s loan portfolio totaled $4.6 billion as of December 31, 2024, and the allowance for credit losses on loans (“ACL”) was $47.4 million.

This represents an estimate of expected losses inherent within the Corporation’s loan portfolio.

The Corporation establishes an allowance representing the estimate of expected credit losses over the estimated life of the existing portfolio of loans.

The Corporation measures expected credit losses based on a pooled loan basis when similar risk characteristics exist by primarily applying a discounted cash flow (“DCF”) model.

The DCF model discounts instrument-level contractual cash flows, adjusting for prepayments and curtailments, and incorporates loss expectations based on past events, current conditions, and forecasted macroeconomic indicators using reasonable and supportable forecasts.

The quantitative estimated losses provided by the DCF model are supplemented by qualitative factors that include changes related to relevant data, such as differences in underwriting standards, changes in environmental conditions, delinquency levels, segment growth rates and changes in duration within new markets, or other relevant factors not considered in the DCF model.

We identified the allowance for credit losses on loans as a critical audit matter.

Auditing management’s estimate of the allowance involved a high degree of subjectivity due to the significant judgment required in determining the (1) significant assumptions within the DCF model and (2) measurement of the qualitative factors applied to the loan portfolio.

The quantitative estimated losses provided by the DCF model are supplemented by more qualitative factors that impact potential losses.

Qualitative factors include changes in underwriting standards, changes in lending staff, changes in environmental conditions and other relevant factors.

The allowance for credit loss may be materially affected by these qualitative factors, especially during periods of economic uncertainty, for items not reflected in the lifetime credit loss calculation, but which are deemed appropriate by management's current assessment of the risks related to the loan portfolio and/or external factors.

The evaluation of qualitative factors is inherently imprecise and requires significant management judgment.

We identified the qualitative factor adjustments included in the allowance for credit losses on loans as a critical audit matter.

The principal considerations for our determination included the high degree of judgment and subjectivity in auditing management’s estimation of qualitative factor adjustments, which requires significant judgment.

How the Critical Audit Matter Was Addressed in the Audit

The primary procedures performed to address the critical audit matter included:

• We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Corporation’s internal controls over the allowance for credit losses process, including controls over the qualitative elements of the allowance.

• We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Corporation’s internal controls over the ACL process, including controls over the qualitative elements of the ACL.

This included controls over the review of the relevance and reliability of data used to determine the estimates and the review of the appropriateness of the key assumptions and judgments used in the determination of the qualitative factors.

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• We evaluated the current and expected qualitative adjustments, including assessing the basis for the adjustments and the reasonableness of the significant assumptions.

• We tested of the loan review function and the accuracy of loan grades determined.

Specifically, utilizing internal professionals to assist us in evaluating the appropriateness of loan grades.

Goodwill Impairment Assessment

The Corporation has recorded goodwill of $43.7 million as of December 31, 2023.

The determination of the annual goodwill impairment assessment has been identified by the Corporation as a critical accounting policy.

As further described in Notes 1 and 8 to the consolidated financial statements, goodwill is tested for impairment at least annually, occurring as of November 30, or more frequently if events or circumstances warrant.

At November 30, 2023, the Corporation elected to perform a quantitative assessment to determine if it was more likely than not that the fair value exceeded its carrying value, including goodwill.

The Corporation engaged a third-party valuation firm to assist in performing the quantitative analysis using multiple approaches that were weighted by management.

Based upon the valuation prepared, the quantitative assessment indicated that it was more likely than not that the fair value exceeded its carrying value, resulting in no impairment.

We identified the Corporation’s quantitative goodwill impairment assessment, as of November 30, as a critical audit matter.

The principal considerations for that determination were the degree of subjectivity and judgment required to audit management’s goodwill impairment assessment.

Specifically, evaluating the valuation approaches selected and key assumptions used by management in performing its assessment, such as the selection of comparable publicly-traded companies and control premium utilized in the valuation approaches.

The primary procedures we performed to address this critical audit matter included the following :

• We evaluated the design and tested the operating effectiveness of controls related to management’s goodwill impairment assessment, including controls over management’s review of the quantitative analysis performed, including the key assumptions used to determine the fair value of the reporting unit.

• We tested key financial data used within the valuation approaches by agreeing key inputs to internal and external sources.

• We evaluated, with the assistance of our internal valuation specialists, appropriateness of valuation approaches selected by management, the selection of a control premium and of comparable publicly-traded companies, and the overall reasonableness of the estimated fair value of the reporting unit.

The 2021 financial statements were audited by other auditors whose unqualified reports on those statements thereon, dated March 3, 2022, included an emphasis paragraph that described the change in accounting principle discussed in Note 1.

/s/ FORVIS, LLP

We have served as the Corporation’s auditor since 2022.

/s/ Forvis Mazars, LLP

Indianapolis, Indiana

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Opinion on the Internal Control over Financial Reporting

We have audited CNB Financial Corporation’s (the “Corporation”) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework:

We have audited CNB Financial Corporation’s (“Corporation”) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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(2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Corporation as of December 31, 2023, and the related consolidated statement of income and comprehensive income, changes in shareholders’ equity, and cash flows for each of the year ended December 31, 2023, and our report dated March 7, 2024, expressed an unqualified opinion on those financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Corporation as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024, and our report dated March 6, 2025, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financing Reporting.

Our responsibility is to express an opinion on the Corporation’s internal control over financial reporting based on our audit.

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Definitions and Limitations of Internal Control over Financial Reporting

A corporation’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable financial statements for external purposes in accordance with generally accepted accounting principles.

A corporation’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the corporation;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the corporation are being made only in accordance with authorizations of management and directors of the corporation;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the corporation’s assets that could have a material effect on the financial statements.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of reliable financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

/s/ FORVIS, LLP

/s/ Forvis Mazars, LLP

Indianapolis, Indiana

March 6, 2025

Report of Independent Registered Public Accounting Firm

Shareholders and the Board of Directors of CNB Financial Corporation

Clearfield, Pennsylvania

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of income and comprehensive income, changes in shareholders’ equity, and cash flows of CNB Financial Corporation (the "Corporation") for the year ended December 31, 2021, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the results of its operations and its cash flows of the Corporation for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Corporation’s management.

Our responsibility is to express an opinion on the Corporation’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Corporation in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Crowe LLP

We served as the Corporation's auditor from 2000 through March 3, 2022.

Columbus, Ohio

March 3, 2022

CONSOLIDATED BALANCE SHEETS

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Loans receivable

PPP loans, net of deferred processing fees 48 159

Syndicated loans 79,882 108,710

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Premises and equipment, net 76,011 73,700

Operating lease right-of-use assets 35,699 32,307

Operating & finance lease right-of-use assets 52,715 35,699

Bank owned life insurance 117,579 114,468

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Goodwill and other intangible assets 43,874 43,874

Core deposit intangible 280 364

Core deposit intangible, net 206 280

Accrued interest receivable and other assets 69,193 67,782

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Total deposits 5,371,364 4,998,750

Short-term borrowings — 132,396

Subordinated debentures 20,620 20,620

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shares authorized 60,375 ;

Shares issued 60,375 at December 31, 2023 and 60,375 at December 31, 2022

Shares issued 60,375 at December 31, 2024 and 2023

57,785 57,785

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50,000,000 shares authorized;

Shares issued 21,235,503 shares at December 31, 2023 and 21,121,346 at December 31, 2022

Shares issued 21,235,503 shares at December 31, 2024 and 2023

Additional paid in capital 219,876 220,495

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Stock-based contribution expense — 84 — — — 84

Issuance of common stock, net of issuance costs ( 4,257,446 shares)

— 94,051 — — — 94,051

Purchase of treasury stock ( 50,166 shares)

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Net income — — 58,020 — — 58,020

Other comprehensive loss — — — — ( 52,126 ) ( 52,126 )

Other comprehensive income — — — — 6,442 6,442

Forfeiture of restricted stock award grants ( 6,391 shares)

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Stock-based contribution expense — 55 — — — 55

Issuance of common stock, net of issuance costs ( 4,257,446 shares)

— 94,051 — — — 94,051

Purchase of treasury stock ( 326,459 shares)

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Stock-based compensation expense — 2,225 — — — 2,225

Contribution of treasury stock ( 3,000 shares)

— ( 81 ) — 81 — —

Stock-based contribution expense — 55 — — — 55

Purchase of treasury stock ( 23,988 shares)

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Net increase (decrease) in checking, money market and savings accounts 156,248 316,280 ( 153,191 )

Net increase (decrease) in certificates of deposit 60,033 60,009 ( 90,092 )

Net increase in certificates of deposit 216,366 60,033 60,009

Purchase of treasury stock ( 643 ) ( 6,724 ) ( 1,671 )

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Cash dividends paid, preferred stock ( 4,302 ) ( 4,302 ) ( 4,302 )

Proceeds from issuance of subordinated notes, net of issuance costs — — 83,484

Repayments on long-term borrowings — — ( 50,000 )

Net change in short-term borrowings — ( 132,396 ) 132,396

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Contribution of stock from treasury stock — 81 44

Lease liabilities arising from obtaining right-of-use assets 5,001 13,371 2,643

Lease liabilities arising from obtaining operating right-of-use assets 4,084 5,001 13,371

Lease liabilities arising from obtaining finance right-of-use assets 14,951 — —

See Notes to Consolidated Financial Statements

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The allowance for credit losses on loans receivable and off-balance-sheet credit exposures, the fair values of financial instruments, goodwill and the status of contingencies are particularly subject to change.

Operating Segments

While the Corporation's Chief Operating Decision Maker ("CODM") monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Corporation-wide basis, and operating divisions are aggregated into one as operating results for all divisions are similar.

Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

Cash and Cash Equivalents

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The Corporation accounts for its ownership interest in LIHTC partnerships in accordance with Accounting Standards Update ("ASU") 2023-02, "Investments—Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Qualified Affordable Housing Projects." The standard permits an entity to amortize the initial cost of the investment in proportion to the amount of the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense.

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." The standard allows the Corporation to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits.

There were no impairment losses during the year resulting from the forfeiture or ineligibility of tax credits related to qualified affordable housing project investments.

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Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.

Management does not believe there now are such matters that will have a material effect on the financial statements.

Management does not believe there now are such matters that will have a material effect on the consolidated financial statements.

Treasury Stock

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The Corporation has not recognized any assets from the costs to obtain or fulfill a contract with customers for revenue streams that fall within the guidance of Topic 606.

Revision of Previously Issued Financial Statements

The Corporation has revised amounts reported in previously issued financial statements for the year ended December 31, 2023 presented in this Annual Report on Form 10–K.

The revisions relate to the classification of completed construction loans not being reported in the appropriate permanent loan segment classification.

The revisions resulted in changes to Note 3, "Loans Receivable and Allowance for Credit Losses," and specifically the segment classification in the disclosure.

These revisions do not impact the Corporation's net income.

The Corporation evaluated the aggregate effects of these revisions to its previously issued financial statements in accordance with SEC Staff Accounting Bulletins No.

108 and, based upon quantitative and qualitative factors, determined that the revisions were not material to the previously issued financial statements and disclosures included in its Annual Report on Form 10-K for the year ended December 31, 2023.

The following table presents the revisions to total loans disclosure at December 31, 2023 to reflect the adjustment for the applicable portfolio segments:

As Reported As Revised Adjustment

December 31, 2023 Percentage

of Total December 31, 2023 Percentage

Farmland $ 31,869 0.7 % $ 33,485 0.8 % $ 1,616 0.1 %

Owner-occupied, nonfarm nonresidential properties 493,064 11.0 511,910 11.5 18,846 0.5

Other construction loans and all land development and other land loans 491,539 11.0 340,358 7.6 ( 151,181 ) ( 3.4 )

Multifamily (5 or more) residential properties 254,342 5.7 305,697 6.8 51,355 1.1

Non-owner occupied, nonfarm nonresidential properties 896,043 20.1 984,033 22.0 87,990 1.9

1-4 Family Construction 51,207 1.1 28,055 0.6 ( 23,152 ) ( 0.5 )

Residential Mortgages secured by first liens 990,986 22.2 1,005,335 22.5 14,349 0.3

Residential Mortgages secured by junior liens 91,063 2.0 91,240 2.0 177 —

Total $ 3,300,113 73.8 % $ 3,300,113 73.8 % $ — — %

Adoption of New Accounting Standards

Accounting Standards Adopted in 2022

In August 2018, the FASB issued ASU 2018-14, "Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU 2018-14 amends ASC 715-20, "Compensation - Retirement Benefits - Defined Benefit Plans - General." The amended guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans.

The eliminated disclosures include (a) the amounts in accumulated Other Comprehensive Income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits.

Additional disclosures include descriptions of significant gains

and losses affecting the benefit obligation for the period.

ASU 2018-14 was effective for the Corporation on January 1, 2021 and did not have a material impact on the Corporation's financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12 "Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes." These amendments remove specific exceptions to the general principles in Topic 740 in GAAP.

It eliminates the need for an organization to analyze whether the following apply in a given period:

exception to the incremental approach for intraperiod tax allocation;

exceptions to accounting for basis differences where there are ownership changes in foreign investments;

and exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses.

It also improves financial statement preparers' application of income tax- related guidance and simplifies GAAP for:

franchise taxes that are partially based on income;

transactions with a government that result in a step up in the tax basis of goodwill;

separate financial statements of legal entities that are not subject to tax;

and enacts changes in tax laws in interim periods.

The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

Early adoption is permitted.

ASU 2019-12 was effective for the Corporation on January 1, 2021 and did not have a material impact on the Corporation's financial statements and related disclosures.

In January 2020, the FASB issued ASU 2020-01 - Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.

ASU 2020-01 represents changes to clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815.

These amendments improve current U.S.

GAAP by reducing diversity in practice and increasing comparability of the accounting for these transactions.

ASU 2020-01 was effective for the Corporation on January 1, 2021 and did not have a material impact on the Corporation's financial statements and related disclosures.

In October 2020, the FASB issued ASU 2020-08 - Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs.

ASU 2020-08 clarifies that an entity should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period.

ASU 2020-08 was effective for the Corporation on January 1, 2021 and did not have a material impact on the Corporation's financial statements and related disclosures.

In January 2021, the FASB issued ASU 2021-01 - Reference Rate Reform (Topic 848).

ASU 2021-01 expands and clarifies the scope of ASU 2020-04 to include derivatives affected by changes in interest rates used for margining, discounting, or contract price alignment, commonly referred to as the "discounting transaction." Derivatives impacted by the discounting transaction will be eligible for certain optional expedients and exceptions related to contract modifications and hedge accounting as defined in Topic 848.

The amendments in this update are effective for all entities as of March 12, 2020, and based upon the amendments provided in ASU 2022-06 discussed below, can generally be applied through December 31, 2024.

The adoption of ASU 2021-01 did not significantly impact the Corporation's financial statements and related disclosures.

In August 2021, FASB issued ASU 2021-06 - Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946).

ASU 2021-06 updates the codification to align with SEC Final Rule Releases No.

33-10786 and No.

Specific to financial institutions, these SEC releases updated required annual statistical disclosures.

The amendments in ASU 2021-06 were effective immediately.

The updates to the statistical disclosures are reflected in the Corporation's Annual Report on Form 10-K for the fiscal year ending December 31, 2021, to align with this guidance.

Accounting Standards Adopted in 2022

In December 2022, FASB issued ASU 2022-06 - Reference Rate Reform (Topic 848).

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These updates did not have a material impact on the Corporation's consolidated financial statements and related disclosures.

Effects of Newly Issued But Not Yet Effective Accounting Standards

Accounting Standards Adopted in 2024

In June 2022, FASB issued ASU 2022-03, "Fair Value Measurement (Topic 820):

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The ASU also requires certain disclosures for equity securities that are subject to contractual restrictions.

This guidance is effective for the Corporation on January 1, 2024, with early adoption permitted.

The Corporation is evaluating the effect that ASU 2022-03 will have on its consolidated financial statements and related disclosures.

This guidance was effective for the Corporation on January 1, 2024.

The update did not have a material impact on the Corporation's consolidated financial statements and related disclosures.

In March 2023, FASB issued ASU 2023-01, "Leases (Topic 842):

Common Control Arrangements." This ASU requires the Corporation to amortize leasehold improvements associated with common control leases over the useful life to the common control group.

This guidance is effective for the Corporation on January 1, 2024 with early adoption permitted.

The Corporation is evaluating the effect that ASU 2023-01 will have on its consolidated financial statements and related disclosures.

This guidance is effective for the Corporation on January 1, 2024.

The update did not have a material impact on the Corporation's consolidated financial statements and related disclosures.

In March 2023, FASB issued ASU 2023-02, "Investments—Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." In this ASU, these amendments allow the Corporation to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits.

This guidance is effective for the Corporation on January 1, 2024 with early adoption permitted.

The Corporation is evaluating the effect that ASU 2023-02 will have on its consolidated financial statements and related disclosures.

This guidance is effective for the Corporation on January 1, 2024.

The update did not have a material impact on the Corporation's consolidated financial statements and related disclosures.

In November 2023, FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures (Topic 280)." This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU was effective for the Corporation on December 15, 2024.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

The update did not have a material impact on the Corporation's consolidated financial statements and related disclosures.

Effects of Newly Issued But Not Yet Effective Accounting Standards

In August 2023, FASB issued ASU 2023-05, "Business Combinations—Joint Venture Formations (Subtopic 805-60):

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The Corporation is evaluating the effect that ASU 2023-06 will have on its consolidated financial statements and related disclosures.

In November 2023, FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures (Topic 280)." This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the CODM and included within each reported measure of a segment's profit or loss.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is also permitted.

The Corporation is evaluating the effect that ASU 2023-07 will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures (Topic 740)." The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

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Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.

The Corporation is evaluating the effect that ASU 2023-09 will have on its condensed consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU 2024-01, "Compensation - Stock Compensation (Topic 718)." The ASU adds an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards ("profits interest awards") should be accounted for in accordance with Topic 718, Compensation—Stock Compensation.

The amendment in this ASU should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) prospectively to profits interest and similar awards granted or modified on or after the date at which the entity first applies the amendments.

If the amendments are applied retrospectively, an entity is required to provide the disclosures in paragraphs 250-10-50-1 through 50-3 in the period of adoption.

If the amendment is applied prospectively, an entity is required to disclose the nature of and reason for the change in accounting principle.

The ASU is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods.

Early adoption is also permitted for interim and annual financial statements that have not yet been issued or made available for issuance.

If an entity adopts the amendments in an interim period, it should adopt the amendment as of the beginning of the annual period that includes that interim period.

The Corporation is evaluating the effect that ASU 2024-01 will have on its condensed consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU 2024-02, "Codification Improvements—Amendments to Remove References to the Concepts Statements." The ASU contains amendments to the FASB Accounting Standards Codification that remove references to various Concepts Statements.

In most instances, the references are extraneous and not required to understand or apply the guidance.

In other instances, the references were used in prior Concept Statements to provide guidance in certain topical areas.

The amendment in this ASU should be applied using one of the following transition methods:

(1) prospectively to all new transactions recognized on or after the date that the entity first applies the amendments;

or (2) retrospectively to the beginning of the earliest comparative period presented in which the amendments were first applied.

An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented.

The ASU is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods.

Early application of the amendment is permitted for any fiscal year or interim period for which financial statements have not yet been issued, or made available for issuance.

If an entity adopts the amendment in an interim period, it must adopt the amendment as of the beginning of the fiscal year that includes that interim period.

The Corporation is evaluating the effect that ASU 2024-02 will have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures." The ASU requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement.

The ASU is effective for annual periods beginning after December 15, 2026, and interim report periods beginning after December 15, 2027.

Early application of the amendment is permitted.

The ASU should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to any or all prior periods presented in the financial statements.

The Corporation is evaluating the effect that ASU 2024-03 will have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, "Debt—Debt with Conversion and Other Options (Subtopic 470-20)." The ASU will improve the relevance and consistency in application of the induced conversion guidance.

The ASU is effective for annual periods beginning after December 15, 2025, and interim report periods and interim reporting periods within those annual reporting periods.

Early adoption is permitted for all entities that have adopted the amendments in Update 2020-06.

The Corporation is evaluating the effect that ASU 2024-04 will have on its consolidated financial statements and related disclosures.

In January 2025, the FASB issued ASU 2025-01, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)." The amendment in this ASU amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption of ASU 2024-03 is permitted.

The Corporation is evaluating the effect that ASU 2024-04 will have on its consolidated financial statements and related disclosures.

AFS debt securities at December 31, 2024 and 2023 were as follows:

34 unchanged sentences

Such amounts will be amortized to comprehensive income over the remaining life of the securities.

Information pertaining to security sales is as follows:

Information pertaining to AFS security sales is as follows:

Year ended December 31 Proceeds Gross Gains Gross Losses

81 unchanged sentences

Total $ 10,456 $ 9,301

During the year ended December 31, 2023, 2022, and 2021, the proceeds from sold equity securities were $ 296 thousand in December 31, 2023, zero in December 31, 2022 and zero in December 31, 2021, resulting in net realized gains of $ 22 thousand in December 31, 2023, zero in December 31, 2022, and zero in December 31, 2021.

During the year ended December 31, 2024, 2023, and 2022, the proceeds from sold equity securities were zero in 2024, $ 296 thousand in 2023 and zero in 2022, resulting in net realized gains of zero in 2024, $ 22 thousand in 2023, and zero in 2022.

Loans Receivable and Allowance for Credit Losses

1 unchanged sentence

2024 Percentage

of Total 2022 Percentage

$ 31,869 0.7 % $ 32,168 0.8 %

of Total 2023 (1)

Farmland $ 31,099 0.67 % $ 33,485 0.76 %

Owner-occupied, nonfarm nonresidential properties 515,208 11.18 511,910 11.46

493,064 11.0 468,493 11.0

Agricultural production and other loans to farmers 6,492 0.14 1,652 0.04

1,652 — 1,198 —

Commercial and Industrial 718,775 15.60 726,442 16.26

726,442 16.3 791,911 18.5

Obligations (other than securities and leases) of states and political subdivisions 140,430 3.05 152,201 3.41

152,201 3.4 145,345 3.4

25,507 0.6 24,710 0.6

Other loans 28,110 0.61 25,507 0.57

Other construction loans and all land development and other land loans 282,912 6.14 340,358 7.62

2 unchanged sentences

Non-owner occupied, nonfarm nonresidential properties 1,033,541 22.42 984,033 22.02

896,043 20.1 795,315 18.6

1-4 Family Construction 26,431 0.57 28,055 0.63

11 unchanged sentences

Net deferred loan origination fees (costs) included in the above loan table $ 49 $ 2,448

1 PPP loans, net of deferred PPP processing fees, both those disbursed in 2020 and those disbursed in 2021, are included in the Commercial and Industrial classification.

(1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the total loans disclosure at December 31, 2023, to reflect adjustments for the applicable portfolio segments, which revisions are reflected in the above table.

The Corporation’s outstanding loans receivable and related unfunded commitments are primarily concentrated within Central and Northwest Pennsylvania, Central and Northeast Ohio, Western New York and Southwest Virginia.

6 unchanged sentences

Transactions in the allowance for credit losses for the year ended December 31, 2024 were as follows:

Allowance (Charge-offs) Recoveries Provision (Benefit) for Credit Losses on Loans Receivable (1)

Ending Allowance

$ 159 $ — $ — $ ( 33 ) $ 126

Allowance (1)

(Charge-offs) Recoveries Provision (Benefit) for Credit Losses on Loans Receivable (1)(2)

Farmland $ 138 $ — $ — $ 29 $ 167

Owner-occupied, nonfarm nonresidential properties 4,131 ( 1,448 ) 55 2,958 5,696

2,905 ( 26 ) 29 1,041 3,949

Agricultural production and other loans to farmers 7 — — 30 37

Commercial and Industrial 9,500 ( 2,425 ) 56 628 7,759

9,766 ( 392 ) 438 ( 379 ) 9,433

Obligations (other than securities and leases) of states and political subdivisions 2,627 — — ( 1,258 ) 1,369

1,863 — — 750 2,613

456 — — ( 69 ) 387

Other loans 389 — — ( 60 ) 329

Other construction loans and all land development and other land loans 2,830 ( 11 ) — ( 248 ) 2,571

2 unchanged sentences

Non-owner occupied, nonfarm nonresidential properties 9,783 ( 974 ) 53 1,248 10,110

7,653 ( 694 ) 10 2,201 9,170

1-4 Family Construction 191 — — 7 198

8 unchanged sentences

Total loans $ 45,832 $ ( 8,020 ) $ 508 $ 9,037 $ 47,357

(1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the beginning allowance column disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.

(2) Excludes provision for credit losses related to unfunded commitments.

Note 18, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.

The Corporation's allowance for credit losses is influenced by loan volumes, risk rating migration, delinquency status and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions.

Transactions in the allowance for credit losses for the year ended December 31, 2023 were as follows:

Allowance (Charge-offs) Recoveries Provision (Benefit) for Credit Losses on Loans Receivable (1)(2)

Ending Allowance

$ 151 $ — $ — $ 8 $ 159

Allowance (2)

Farmland $ 159 $ — $ — $ ( 21 ) $ 138

Owner-occupied, nonfarm nonresidential properties 2,905 ( 26 ) 29 1,223 4,131

3,339 ( 21 ) 15 ( 428 ) 2,905

Agricultural production and other loans to farmers 6 — — 1 7

9 — — ( 3 ) 6

Commercial and Industrial 9,766 ( 392 ) 438 ( 312 ) 9,500

8,837 ( 175 ) 139 965 9,766

Obligations (other than securities and leases) of states and political subdivisions 1,863 — — 764 2,627

1,649 — — 214 1,863

149 — — 307 456

Other loans 456 — — ( 67 ) 389

Other construction loans and all land development and other land loans 3,253 — — ( 423 ) 2,830

2 unchanged sentences

Non-owner occupied, nonfarm nonresidential properties 7,653 ( 694 ) 10 2,814 9,783

6,481 ( 335 ) 336 1,171 7,653

1-4 Family Construction 327 — — ( 136 ) 191

10 unchanged sentences

(2) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the provision (benefit) for credit losses on loans receivable column and ending allowance column disclosures as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.

Transactions in the allowance for credit losses for the year ended December 31, 2022 were as follows:

1 unchanged sentence

Ending Allowance

$ 221 $ — $ — $ ( 70 ) $ 151

Farmland $ 151 $ — $ — $ 8 $ 159

Owner-occupied, nonfarm nonresidential properties 3,339 ( 21 ) 15 ( 428 ) 2,905

3,700 ( 584 ) 10 213 3,339

Agricultural production and other loans to farmers 9 — — ( 3 ) 6

24 — — ( 15 ) 9

Commercial and Industrial 8,837 ( 175 ) 139 965 9,766

6,233 ( 163 ) 203 2,564 8,837

Obligations (other than securities and leases) of states and political subdivisions 1,649 — — 214 1,863

998 ( 407 ) 30 1,028 1,649

68 — — 81 149

Other loans 149 — — 307 456

Other construction loans and all land development and other land loans 2,198 — — 1,055 3,253

2 unchanged sentences

Non-owner occupied, nonfarm nonresidential properties 6,481 ( 335 ) 336 1,171 7,653

8,658 ( 49 ) — ( 2,128 ) 6,481

1-4 Family Construction 158 — — 169 327

10 unchanged sentences

For the year ended December 31, 2023, the allowance for credit losses increased primarily due to the growth in the Corporation's loan portfolio, including growth in new market areas.

This was partially offset by improvements in the Corporation's historical loss rates, as well as the impact of net charge-offs.

The year-over-year increase in reserves experienced in 2022 was primarily due to loan growth, the impact of net charge-offs, and the provision for credit losses recorded in 2022.

There is still a significant amount of uncertainty related to the domestic and global economy, tightening credit conditions, persistent inflation, and higher interest rates.

For the year ended December 31, 2024, the allowance for credit losses increased primarily due to the growth in the Corporation's loan portfolio in new market areas, partially offset by improvements in the Corporation's historical loss rates, annual updates to the Corporation's loss drivers and assumptions, as well as the impact of net charge-offs.

Significant uncertainty persists regarding the domestic and global economy due to persistent inflation in certain segments of the U.S.

economy, 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.

Provision for credit losses was $ 9.2 million for the year ended December 31, 2024, compared to $ 6.0 million and $ 8.6 million for the years ended December 31, 2023 and 2022, respectively.

Included in the provision for credit losses for the year ended December 31, 2023 was $ 156 thousand related to the allowance for unfunded commitments compared to $ 603 thousand and zero provision towards the allowance for unfunded commitments for the years ended December 31, 2022 and 2021, respectively.

Included in the provision for credit losses for the year ended December 31, 2024 was $ 185 thousand related to the allowance for unfunded commitments compared to $ 156 thousand and $ 603 thousand provision towards the allowance for unfunded commitments for the years ended December 31, 2023 and 2022, respectively.

The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of December 31, 2024 and 2023, respectively:

1 unchanged sentence

Nonaccrual Nonaccrual With No Allowance for Credit Loss Loans Past Due over 89 Days Still Accruing

$ 1,083 $ 1,083 $ —

Farmland $ 522 $ 522 $ —

Owner-occupied, nonfarm nonresidential properties 5,896 1,392 —

2,673 1,488 —

Commercial and Industrial 10,682 10,111 —

7,512 4,389 —

Other construction loans and all land development and other land loans 1,482 36 —

Multifamily (5 or more) residential properties

Non-owner occupied, nonfarm nonresidential properties

20,658 266 491

Non-owner occupied, nonfarm nonresidential properties 5,913 5,913 —

Home equity lines of credit 837 837 —

8 unchanged sentences

Nonaccrual Nonaccrual With No Allowance for Credit Loss Loans Past Due over 89 Days Still Accruing

$ 1,011 $ 1,011 $ 994

Farmland $ 1,083 $ 1,083 $ —

Owner-occupied, nonfarm nonresidential properties 2,673 1,488 —

2,055 1,987 —

Commercial and Industrial 7,512 4,389 —

5,485 2,366 71

Other construction loans and all land development and other land loans 1,653 104 —

1 unchanged sentence

Non-owner occupied, nonfarm nonresidential properties 9,076 6,716 —

5,081 2,665 —

Home equity lines of credit 940 940 —

11 unchanged sentences

Real Estate Collateral Non-Real Estate Collateral

Farmland $ 352 $ —

Owner-occupied, nonfarm nonresidential properties 4,503 —

8 unchanged sentences

Real Estate Collateral Non-Real Estate Collateral

Farmland $ 736 $ —

Owner-occupied, nonfarm nonresidential properties 6,890 4

10 unchanged sentences

Days Past Due Total Past Due Loans Not Past Due Total

$ — $ 182 $ 129 $ 311 $ 31,558 $ 31,869

Farmland $ — $ — $ — $ — $ 31,099 $ 31,099

Owner-occupied, nonfarm nonresidential properties 77 1,479 5,030 6,586 508,622 515,208

120 — 1,390 1,510 491,554 493,064

Agricultural production and other loans to farmers — — — — 6,492 6,492

— — — — 1,652 1,652

Commercial and Industrial 704 185 6,632 7,521 711,254 718,775

64 379 314 757 725,685 726,442

Obligations (other than securities and leases) of states and political subdivisions — — — — 140,430 140,430

— — — — 152,201 152,201

— — — — 25,507 25,507

Other loans — — — — 28,110 28,110

Other construction loans and all land development and other land loans — — 1,482 1,482 281,430 282,912

2 unchanged sentences

Non-owner occupied, nonfarm nonresidential properties — — — — 1,033,541 1,033,541

95 299 2,031 2,425 893,618 896,043

1-4 Family Construction 216 — — 216 26,215 26,431

11 unchanged sentences

Days Past Due Greater Than 89

Days Past Due Total Past Due Loans Not Past Due Total

$ — $ — $ 1,136 $ 1,136 $ 31,032 $ 32,168

Days Past Due Total Past Due Loans Not Past Due (1)

Farmland $ — $ 182 $ 129 $ 311 $ 33,174 $ 33,485

Owner-occupied, nonfarm nonresidential properties 120 — 1,390 1,510 510,400 511,910

185 27 734 946 467,547 468,493

Agricultural production and other loans to farmers — — — — 1,652 1,652

— — — — 1,198 1,198

Commercial and Industrial 64 379 314 757 725,685 726,442

246 93 611 950 790,961 791,911

Obligations (other than securities and leases) of states and political subdivisions — — — — 152,201 152,201

— — — — 145,345 145,345

— — — — 24,710 24,710

Other loans — — — — 25,507 25,507

Other construction loans and all land development and other land loans — 41 1,612 1,653 338,705 340,358

2 unchanged sentences

Non-owner occupied, nonfarm nonresidential properties 95 299 2,031 2,425 981,608 984,033

113 60 879 1,052 794,263 795,315

1-4 Family Construction — — — — 28,055 28,055

8 unchanged sentences

Total loans $ 3,980 $ 3,231 $ 8,298 $ 15,509 $ 4,452,967 $ 4,468,476

(1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the loans receivable not past due and total columns disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.

Loan Modifications

12 unchanged sentences

Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combination Payment Delay and Term Extension Total Class of Financing Receivable

Farmland $ — $ 1,040 $ — $ — $ — 3.34 %

Owner-occupied, nonfarm nonresidential properties — 696 — — — 0.14

$ — $ 5,934 $ — $ — $ — 1.2 %

Commercial and Industrial — — 410 — — 0.06

— 7,794 524 320 — 1.2

Non-owner occupied, nonfarm nonresidential properties — 5,225 — — — 0.51

Total $ — $ 6,961 $ 410 $ — $ — 0.16 %

The following table presents the amortized cost basis of loans at December 31, 2023 that were both experiencing financial difficulty and modified during the year ended December 31, 2023, by class and by type of modification.

The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below:

Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combination Payment Delay and Term Extension Total Class of Financing Receivable

Owner-occupied, nonfarm nonresidential properties $ — $ 5,934 $ — $ — $ — 1.20 %

Commercial and Industrial — 7,794 524 320 — 1.19

Non-owner occupied, nonfarm nonresidential properties — 5,911 — — 785 0.75

Residential Mortgages secured by first liens — — 414 — — 0.04

1 unchanged sentence

Total $ — $ 19,639 $ 967 $ 320 $ 785 0.49 %

The Corporation has zero in unfunded available credit to customers whose loan receivables are included in the previous table.

The Corporation has zero in unfunded available credit to customers whose loan receivables are included in the previous tables.

The Corporation closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

4 unchanged sentences

Days Past Due Total Past Due

Farmland $ 1,040 $ — $ — $ — $ —

Owner-occupied, nonfarm nonresidential properties 696 — — — —

$ 5,934 $ — $ — $ — $ —

Commercial and Industrial 410 — — — —

8,638 — — — —

Non-owner occupied, nonfarm nonresidential properties 5,225 — — — —

Total $ 7,371 $ — $ — $ — $ —

The following table presents the performance of such loans that have been modified during the year ended December 31, 2023:

Current 30 - 59

Days Past Due 60 - 89

Days Past Due Greater Than 89

Days Past Due Total Past Due

Owner-occupied, nonfarm nonresidential properties $ 5,934 $ — $ — $ — $ —

Commercial and Industrial 8,638 — — — —

Non-owner occupied, nonfarm nonresidential properties 6,696 — — — —

Residential Mortgages secured by first liens 414 — — — —

7 unchanged sentences

Commercial and Industrial $ — 1.00 — %

$ — 1.00 0.5 %

Total $ — 1.00 — %

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the year ended December 31, 2023:

Principal Forgiveness Weighted Average

Term Extension

(in years) Weighted Average

Interest Rate Reduction

Commercial and Industrial $ — 1.00 0.50 %

Non-owner occupied, nonfarm nonresidential properties — 0.75 —

2 unchanged sentences

Total $ — 0.76 0.50 %

There were no loans that had a payment default during the year ended December 31, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

The following table presents the amortized cost basis of loans that had a payment default during the year ended December 31, 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty:

4 unchanged sentences

If the Corporation determines that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off and the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

Troubled Debt Restructurings Prior to the Adoption of ASU 2022-02

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without a loan modification.

This evaluation is performed using the Corporation’s internal underwriting policies.

The Corporation has no further loan commitments to customers whose loan receivables are classified as a TDR.

As of December 31, 2022, the terms of certain loans were modified as TDRs.

The modification of the terms of such loans included either or both of the following:

a reduction of the stated interest rate of the loan;

or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk.

The Corporation had an amortized cost in TDRs of $ 12.4 million and $ 16.6 million as of December 31, 2022 and 2021, respectively.

The Corporation has allocated $ 2.2 million and $ 2.6 million of allowance for those loans as of December 31, 2022 and 2021, respectively.

The following tables presents loans by class modified as troubled debt restructurings that occurred during the years ended December 31, 2022, and 2021:

Year Ended December 31, 2022

Loans Pre-Modification

Outstanding Recorded

Investment Post-Modification

Outstanding Recorded

Investment Type of Modification

Commercial and Industrial

1 $ 96 $ 96 Extend Amortization

Non-owner occupied, nonfarm nonresidential properties

1 1,784 1,784 Modify Rate and Extend Amortization

Total loans 2 $ 1,880 $ 1,880

Year Ended December 31, 2021

Loans Pre-Modification

Outstanding Recorded

Investment Post-Modification

Outstanding Recorded

Investment Type of Modification

Commercial and Industrial

2 3,336 3,336 Modify Payment

Multifamily (5 or more) residential properties

1 717 717 Modify Payment

Non-owner occupied, nonfarm nonresidential properties

1 1,604 1,604 Modify Payment

Total loans 4 $ 5,657 $ 5,657

The TDRs described above increased the allowance for credit losses by immaterial amounts for the years ended December 31, 2022, and 2021, respectively.

A loan receivable is considered to be in payment default once it is 90 days contractually past due under the modified terms.

There were no loans receivable modified as TDRs for which there was a payment default within twelve months following the modification during the years ended December 31, 2022 and 2021, respectively, and no principal balances were forgiven in connection with the loan receivable restructurings.

As discussed above, effective for January 1, 2023, the Corporation adopted prospectively Accounting Standard Update 2022-02, which eliminated the separate recognition and measurement guidance for TDRs by creditors.

Credit Quality Indicators

11 unchanged sentences

A loan classified as doubtful has all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following tables represent the Corporation's commercial credit risk profile by risk rating as of December 31, 2023 and 2022, respectively.

The following tables represent the Corporation's commercial credit risk profile by risk rating.

Loans receivable not rated as special mention, substandard, or doubtful are considered to be pass rated loans.

2 unchanged sentences

Pass Special Mention Substandard Doubtful Total Non-Pass Total

$ 30,786 $ — $ 1,083 $ — $ 1,083 $ 31,869

Farmland $ 25,171 $ 5,267 $ 661 $ — $ 5,928 $ 31,099

Owner-occupied, nonfarm nonresidential properties 491,798 1,289 22,121 — 23,410 515,208

461,554 20,177 11,333 — 31,510 493,064

Agricultural production and other loans to farmers 6,492 — — — — 6,492

1,652 — — — — 1,652

Commercial and Industrial 654,139 4,321 60,315 — 64,636 718,775

653,981 52,030 20,431 — 72,461 726,442

Obligations (other than securities and leases) of states and political subdivisions 140,430 — — — — 140,430

139,014 13,187 — — 13,187 152,201

25,507 — — — — 25,507

Other loans 28,110 — — — — 28,110

Other construction loans and all land development and other land loans 281,466 — 1,446 — 1,446 282,912

6 unchanged sentences

Pass Special Mention Substandard Doubtful Total Non-Pass Total

$ 29,706 $ 1,450 $ 1,012 $ — $ 2,462 $ 32,168

Farmland $ 32,402 $ — $ 1,083 $ — $ 1,083 $ 33,485

Owner-occupied, nonfarm nonresidential properties 475,093 25,484 11,333 — 36,817 511,910

433,467 27,796 7,230 — 35,026 468,493

Agricultural production and other loans to farmers 1,652 — — — — 1,652

1,198 — — — — 1,198

Commercial and Industrial 653,981 52,030 20,431 — 72,461 726,442

765,821 14,740 10,037 1,313 26,090 791,911

Obligations (other than securities and leases) of states and political subdivisions 139,014 13,187 — — 13,187 152,201

145,345 — — — — 145,345

24,710 — — — — 24,710

Other loans 25,507 — — — — 25,507

Other construction loans and all land development and other land loans 338,746 — 1,612 — 1,612 340,358

2 unchanged sentences

Non-owner occupied, nonfarm nonresidential properties 957,254 3,008 23,771 — 26,779 984,033

772,450 2,791 20,074 — 22,865 795,315

Total loans $ 2,927,203 $ 95,055 $ 59,027 $ — $ 154,082 $ 3,081,285

(1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the pass, special mention, total non-pass and total columns disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.

The following tables detail the amortized cost of loans receivable, by year of origination (for term loans) and by risk grade within each portfolio segment as of December 31, 2024.

58 unchanged sentences

Current period originations may include modifications.

As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the vintage loan disclosure at December 31, 2023, to reflect the revisions for the applicable portfolio segments.

Term Loans Amortized Cost Basis by Origination Year

4 unchanged sentences

Total $ 3,250 $ 12,897 $ 7,151 $ 1,465 $ 815 $ 7,605 $ 302 $ — $ 33,485

Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Owner-occupied, nonfarm nonresidential properties

3 unchanged sentences

Total $ 65,405 $ 132,505 $ 109,616 $ 58,201 $ 56,511 $ 76,452 $ 13,220 $ — $ 511,910

Current period gross write offs $ — $ — $ — $ — $ — $ 26 $ — $ — $ 26

Agricultural production and other loans to farmers

3 unchanged sentences

Total $ 703 $ 34 $ 89 $ 60 $ 5 $ 159 $ 602 $ — $ 1,652

Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Commercial and Industrial

2 unchanged sentences

Substandard — 385 4,281 396 3,476 1,655 10,238 — 20,431

— 1,313 — — — — — — 1,313

Total $ 86,043 $ 148,366 $ 148,515 $ 33,936 $ 10,277 $ 16,385 $ 282,920 $ — $ 726,442

Current period gross write offs $ 50 $ — $ — $ 191 $ — $ — $ 151 $ — $ 392

Obligations (other than securities and leases) of states and political subdivisions

3 unchanged sentences

Total $ 24,964 $ 16,791 $ 31,768 $ 12,399 $ 4,190 $ 58,518 $ 3,571 $ — $ 152,201

Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Pass $ 3,649 $ 12,211 $ 5,289 $ 1,809 $ 288 $ — $ 2,261 $ — $ 25,507

2 unchanged sentences

Total $ 3,649 $ 12,211 $ 5,289 $ 1,809 $ 288 $ — $ 2,261 $ — $ 25,507

(1) Consists of one loan relationship originated in 2015 and modified in 2021.

The modification met the requirements to disclose the loan relationship as a new loan during 2021.

Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Term Loans Amortized Cost Basis by Origination Year

5 unchanged sentences

Total $ 92,321 $ 197,166 $ 23,484 $ 15,540 $ 3,255 $ 1,129 $ 7,463 $ — $ 340,358

Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Multifamily (5 or more) residential properties

3 unchanged sentences

Total $ 51,709 $ 127,027 $ 70,261 $ 25,232 $ 10,928 $ 19,786 $ 754 $ — $ 305,697

Current period gross write offs $ — $ — $ — $ — $ — $ 65 $ — $ — $ 65

Non-owner occupied, nonfarm nonresidential properties

3 unchanged sentences

Total $ 199,121 $ 333,867 $ 195,594 $ 50,014 $ 58,416 $ 136,704 $ 10,317 $ — $ 984,033

Current period gross write offs $ — $ 358 $ — $ — $ 88 $ — $ 248 $ — $ 694

The Corporation considers the performance of the loan portfolio and its impact on the allowance for credit losses.

11 unchanged sentences

Total loans $ 1,416,673 $ 11,170 $ 1,427,843 $ 1,367,754 $ 7,360 $ 1,375,114

(1) As previously disclosed in the Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and Note 1, "Summary of Significant Accounting Policies," immaterial revisions were made to the performing and total columns at December 31, 2023, to reflect the revisions for the applicable portfolio segments.

The following tables detail the amortized cost of loans receivable, by year of origination (for term loans) and by payment activity within each portfolio segment as of December 31, 2024.

44 unchanged sentences

The following tables detail the amortized cost of loans receivable, by year of origination (for term loans) and by payment activity within each portfolio segment as of December 31, 2023.

The current period originations may include modifications, extensions and renewals.

Current period originations may include modifications.

Term Loans Amortized Cost Basis by Origination Year

5 unchanged sentences

Total $ 16,968 $ 9,977 $ 251 $ — $ 59 $ 1 $ 799 $ — $ 28,055

Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Home equity lines of credit

3 unchanged sentences

Total $ 27,110 $ 32,027 $ 11,437 $ 9,844 $ 6,781 $ 30,481 $ 7,479 $ 5,541 $ 130,700

Current period gross write offs $ — $ — $ — $ — $ 10 $ — $ — $ — $ 10

Residential mortgages secured by first lien

3 unchanged sentences

Total $ 141,516 $ 238,416 $ 201,581 $ 145,291 $ 78,411 $ 196,921 $ 3,199 $ — $ 1,005,335

Current period gross write offs $ — $ — $ — $ — $ — $ 22 $ 95 $ — $ 117

Residential mortgages secured by junior liens

3 unchanged sentences

Total $ 28,685 $ 27,070 $ 14,204 $ 7,102 $ 3,888 $ 8,875 $ 1,416 $ — $ 91,240

Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ —

Other revolving credit plans

3 unchanged sentences

Total $ 8,684 $ 8,056 $ 2,737 $ 11,274 $ 1,634 $ 10,492 $ — $ — $ 42,877

Current period gross write offs $ — $ — $ 50 $ 4 $ 16 $ 49 $ — $ — $ 119

Payment performance

2 unchanged sentences

Total $ 12,561 $ 6,851 $ 2,597 $ 1,479 $ 1,030 $ 797 $ — $ — $ 25,315

Current period gross write offs $ 18 $ 23 $ — $ 8 $ 7 $ — $ — $ — $ 56

Other consumer

3 unchanged sentences

Total $ 27,485 $ 12,591 $ 5,371 $ 3,119 $ 1,477 $ 1,549 $ — $ — $ 51,592

Current period gross write offs $ 210 $ 1,164 $ 467 $ 96 $ 33 $ 12 $ — $ — $ 1,982

December 31, 2024 December 31, 2023

49 unchanged sentences

Government sponsored entities $ 14,810 $ 14,810 $ — $ —

$ 4,988 $ 4,988 $ — $ —

States and political subdivisions 90,956 — 90,956 —

11 unchanged sentences

Interest rate swaps $ ( 423 ) $ — $ ( 423 ) $ —

(1) In 2023, the Corporation transitioned to a new pricing provider, leading to the reclassification of United States Treasury investments as Level 1 pricing instruments.

Fair Value Measurements at December 31, 2023 Using

6 unchanged sentences

Government sponsored entities (1)

$ 4,988 $ 4,988 $ — $ —

States and political subdivisions 91,809 — 91,809 —

11 unchanged sentences

Interest rate swaps $ ( 1,013 ) $ — $ ( 1,013 ) $ —

(1) In 2023, the Corporation transitioned to a new pricing provider, leading to the reclassification of United States Treasury investments as Level 1 pricing instruments.

Assets and liabilities measured at fair value on a non-recurring basis are as follows at December 31, 2024 and 2023:

69 unchanged sentences

Debt securities available-for-sale 468,546 14,810 453,736 — 468,546

341,955 4,988 336,967 — 341,955

Debt securities held-to-maturity 306,081 71,323 211,647 — 282,970

388,968 104,141 256,429 — 360,570

Equity securities 10,456 8,765 1,691 — 10,456

8 unchanged sentences

Accrued interest payable ( 7,152 ) — ( 7,152 ) — ( 7,152 )

(1) In 2023, the Corporation transitioned to a new pricing provider, leading to the reclassification of United States Treasury investments as Level 1 pricing instruments.

The following table presents the carrying amount and fair value of financial instruments at December 31, 2023:

3 unchanged sentences

Debt securities available-for-sale (1)

341,955 4,988 336,967 — 341,955

Debt securities held-to-maturity (1)

388,968 104,141 256,429 — 360,570

Equity securities 9,301 8,667 634 — 9,301

1 unchanged sentence

Net loans 4,422,644 — — 4,323,476 4,323,476

FHLB and other equity interests 30,715 n/a n/a n/a n/a

FHLB and other restricted stock holdings and investments 30,011 n/a n/a n/a n/a

Interest rate swaps 1,013 — 1,013 — 1,013

1 unchanged sentence

Deposits $ ( 4,998,750 ) $ ( 4,492,256 ) $ ( 508,181 ) $ — $ ( 5,000,437 )

FHLB and other borrowings ( 132,396 ) — ( 132,396 ) — ( 132,396 )

Subordinated debentures ( 104,887 ) — ( 134,298 ) — ( 134,298 )

1 unchanged sentence

Accrued interest payable ( 3,550 ) — ( 3,550 ) — ( 3,550 )

(1) In 2023, the Corporation transitioned to a new pricing provider, leading to the reclassification of United States Treasury investments as Level 1 pricing instruments.

While estimates of fair value are based on management’s judgment of the most appropriate factors as of the balance sheet dates, there is no assurance that the estimated fair values would have been realized if the assets had been disposed of or the liabilities settled at that date, since market values may differ depending on various circumstances.

44 unchanged sentences

Operating lease assets Operating lease right-of-use assets $ 37,764 $ 35,699

Finance lease assets Finance lease right-of-use assets 14,951 —

Finance lease assets Premises and equipment, net (1)

3 unchanged sentences

Total leased liabilities $ 55,466 $ 37,944

(1) Finance lease assets are recorded net of accumulated amortization of $ 1.0 million and $ 930 thousand as of December 31, 2023 and 2022, respectively.

(1) Finance lease assets are recorded net of accumulated amortization of $ 1.1 million and $ 1.0 million as of December 31, 2024 and 2023, respectively.

The components of the Corporation's net lease expense for the years ended December 31, 2024, 2023, and 2022 were as follows:

7 unchanged sentences

Net occupancy expense ( 96 ) ( 93 ) ( 79 )

Gain on sale-leaseback transactions Noninterest income - other ( 63 ) — —

Net lease cost $ 3,093 $ 3,049 $ 2,335

37 unchanged sentences

The Corporation has also determined that a change in the annual testing date did not result in adjustments to the consolidated financial statements when applied retrospectively.

At November 30, 2023, the Corporation elected to perform a quantitative assessment to determine if it was more likely than not that the fair value exceeded its carrying value, including goodwill.

The Corporation engaged a third party valuation firm to assist in performing the quantitative analysis using multiple approaches, reflecting assumptions that were provided and weighted by management.

The primary methodology used was the discounted cash flow approach while also considering a market approach of comparing the multiples of the Corporation to multiples of similar public companies and market price with control premiums.

In addition, the value relied upon projections and growth rates prepared by management.

Based upon the valuation prepared, the quantitative assessment indicated that it was more likely than not that the fair value exceeded its carrying value, resulting in no impairment.

At November 30, 2024, the Corporation elected to perform a qualitative assessment to determine if it was more likely than not that the fair value exceeded its carrying value, including goodwill.

The qualitative assessment indicated that it was more likely than not that the fair value exceeded its carrying value, resulting in no impairment.

Intangible Assets

4 unchanged sentences

Estimated amortization expense of core deposit intangible assets for each of the next five years is as follows:

Thereafter 25

In connection with the formation of Ridge View Bank, a division of the Bank, the Corporation recorded an intangible asset related to naming rights in 2023.

21 unchanged sentences

Total loans pledged to the FHLB at December 31, 2024, and 2023, were $ 2.1 billion and $ 1.8 billion, respectively.

The Bank could obtain advances of up to approximately $ 993.8 million from the FHLB at December 31, 2023 and $ 757.8 million at December 31, 2022.

The Bank could obtain advances of up to approximately $ 1.2 billion from the FHLB at December 31, 2024, and $ 993.8 million at December 31, 2023.

At December 31, 2024, and December 31, 2023, outstanding advances from the FHLB were as follows:

1 unchanged sentence

The maximum amount of the Open Repo borrowing available is $ 250,000 .

$ — $ 132,396

Total $ — $ —

24 unchanged sentences

Subordinated Notes

In June 2021, the Corporation sold $ 85.0 million aggregate principal amount of its fixed-to-floating rate subordinated notes to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act and the provisions of Rule 506 of Regulation D thereunder.

In June 2021, the Corporation sold $ 85.0 million aggregate principal amount of its fixed-to-floating rate subordinated notes to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended, and the provisions of Rule 506 of Regulation D thereunder.

The notes will mature in June 2031, and initially bear interest at a fixed rate of 3.25 % per annum, payable semi-annually in arrears, to, but excluding, June 15, 2026, and thereafter to, but excluding, the maturity date or earlier redemption, the interest rate will reset quarterly to an interest rate per annum equal to the then current three-month average SOFR plus 2.58 %.

5 unchanged sentences

The plan permits eligible employees to make pre-tax and Roth contributions up to 70 % of salary.

Employees 21 years of age or over with a minimum of 90 days of service are eligible for matching contributions by the Corporation at 100 % for every 1 % contributed up to 3 % then 50 % for every 1 % contributed up to the next 2 % in total of the employee’s compensation.

Employees 21 years of age or over with a minimum of 90 days of service are eligible for matching contributions by the Corporation at 100 % of elective contributions not to exceed 5 % of plan salary.

The Corporation’s matching contribution and related expenses were $ 2.4 million, $ 1.8 million, and $ 1.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

A profit sharing discretionary non-contributory pension plan component is in place for employees 21 years of age or over with a minimum of one-year with 1,000 hours of service and allows employer contributions in an amount equal to a percentage of eligible compensation plus 5.7 % of the compensation in excess of $ 169 thousand, subject to a $ 345 thousand salary limit.

The Corporation recognized profit sharing expense of $ 3.6 million, $ 2.9 million and $ 2.0 million for the year ended December 31, 2023, 2022, and 2021 respectively.

The Corporation recognized profit sharing expense of $ 1.4 million, $ 3.6 million, and $ 2.9 million for the years ended December 31, 2024, 2023, and 2022 respectively.

The Corporation has adopted a non-qualified supplemental executive retirement plan ("SERP") for certain executives to compensate those executive participants in the Corporation’s retirement plan whose benefits are limited by compensation limitations under current tax law.

The SERP is considered an unfunded plan for tax and ERISA purposes and all obligations arising under the SERP are payable from the general assets of the Corporation.

At December 31, 2023 and 2022, obligations of $ 10.0 million and $ 9.7 million, respectively, were included in other liabilities for this plan.

Expenses related to this plan were $ 565 thousand for the year ended December 31, 2023, $ 1.3 million for the year ended December 31, 2022, and $ 2.1 million for the year ended December 31, 2021.

Additionally, on December 31, 2021, the Corporation adopted a Defined Contribution Plan for several employees (the "DCP"), pursuant to which the Corporation will make certain annual contributions to the DCP on the employee's behalf, which will be paid to the employee following their termination of employment from the Corporation or, if earlier, upon the employee becoming disabled.

The DCP became effective as of January 2, 2022.

The SERP and DCP are considered an unfunded plan for tax and ERISA purposes and all obligations arising under the SERP and DCP are payable from the general assets of the Corporation.

At December 31, 2024 and 2023, obligations of $ 10.5 million and $ 10.0 million, respectively, were included in other liabilities for the SERP and DCP.

Expenses related to the SERP and DCP were $ 866 thousand for the year ended December 31, 2024, $ 565 thousand for the year ended December 31, 2023, and $ 1.3 million for the year ended December 31, 2022.

The Corporation has established a Survivor Benefit Plan for the benefit of outside directors.

3 unchanged sentences

Expenses (benefits) related to this plan were $( 17 ) thousand for the year ended December 31, 2024, $( 213 ) thousand for the year ended December 31, 2023, and $ 81 thousand for the year ended December 31, 2022.

On December 31, 2021, the Corporation adopted a Defined Contribution Plan for several employees (the "Plan"), pursuant to which the Corporation will make certain annual contributions to the Plan on the employee's behalf, which will be paid to the employee following their termination of employment from the Corporation or, if earlier, upon the employee becoming disabled.

The Plan became effective as of January 2, 2022.

Deferred Compensation Plans

38 unchanged sentences

Unrealized loss on securities held-to-maturity 963 1,108

Operating lease liability 8,509 7,645

Lease liability 12,360 8,509

Other 547 453

2 unchanged sentences

Premises and equipment 3,054 3,761

Unrealized gain on equity securities — 119

Intangibles – section 197 2,475 2,487

Mortgage servicing rights 278 345

Unrealized gain on interest rate swap — 32

Operating lease asset 8,128 7,397

Lease asset 11,839 8,128

Other 633 571

18,279 15,292

23 unchanged sentences

The Corporation previously maintained the CNB Financial Corporation 2009 Stock Incentive Plan, which terminated in accordance with its terms on February 10, 2019, and currently maintains the CNB Financial Corporation 2019 Omnibus Incentive Plan (the "2019 Stock Incentive Plan"), which was approved by the Corporation’s shareholders and became effective on April 16, 2019.

The Corporation does not have a policy or practice on the timing of awards of options in relation to the disclosure of material nonpublic information because the Corporation does not issue nor does it have any outstanding options.

The Executive Compensation and Personnel Committee generally grants equity awards annually at a regularly scheduled meeting in connection with its annual compensation review process in the first quarter of the fiscal year.

On occasion, the Executive Compensation and Personnel Committee may grant equity awards outside of its annual grant cycle for new hires, promotions, recognition, retention, or other purposes.

The Executive Compensation and Personnel Committee does not have a practice or policy of granting equity awards in anticipation of the release of material nonpublic information and, in any event, we do not time the release of material non-public information in coordination with grants of equity awards for the purpose of affecting the value of executive compensation.

The 2019 Stock Incentive Plan provides for up to 507,671 shares of common stock to be awarded in the form of nonqualified options or restricted stock.

17 unchanged sentences

As of December 31, 2024 and 2023, there was $ 2.7 million and $ 2.1 million, respectively, of total unrecognized compensation cost related to non-vested shares granted under the 2019 Stock Incentive Plan.

The fair value of shares vesting during the year end December 31, 2023, 2022, and 2021 was $ 1.0 million, $ 1.4 million and $ 835 thousand, respectively.

The fair value of shares vesting during the year end December 31, 2024, 2023, and 2022 was $ 1.4 million, $ 1.0 million, and $ 1.4 million, respectively.

As of December 31, 2024, there were zero outstanding unvested restricted stock awards granted to the Corporation's Board of Directors.

In addition to the time-based restricted stock disclosed above, the Corporation’s Board of Directors grants performance-based restricted stock awards ("PBRSAs") to key employees.

1 unchanged sentence

Awards with a maximum of 44,988 shares, 35,129 shares, and 13,761 shares in aggregate were granted to key employees in 2024, 2023, and 2022, respectively.

Total compensation expense related to the PBRSAs and included in the above compensation expense total was $ 235 thousand, $ 91 thousand and $ 378 thousand for 2023, 2022, and 2021.

As of December 31, 2024, there were a maximum 85,785 shares outstanding related to PBRSAs.

Total compensation expense related to the PBRSAs and included in the above compensation expense total was $ 431 thousand, $ 235 thousand and $ 91 thousand for 2024, 2023, and 2022, respectively.

Estimated remaining unearned compensation related to PBRSAs at December 31, 2024 was $ 562 thousand.

79 unchanged sentences

(e) Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)

As of December 31, 2023 and 2022, a cash collateral balance of zero and $ 200 thousand, respectively, was maintained with the counterparty to the interest rate swaps.

These balances are included in interest bearing deposits with other banks on the consolidated balance sheets.

Derivatives on Behalf of Customers

The Corporation entered into certain interest rate swap contracts that are not designated as hedging instruments.

11 unchanged sentences

The following table provides information about the amounts and locations of activity related to the back-to-back interest rate swaps within the Corporation’s consolidated balance sheet as of December 31, 2024 and 2023:

Current Notional

Amount Average

(in years) Weighted

Fixed Rate Weighted

Average Variable Rate Fair

December 31, 2023

3 rd Party interest rate swaps

$ 21,302 4.9 4.19 % 1 month Fallback SOFR + 1.79 %

Customer interest rate swaps ( 21,302 ) 4.9 4.19 % 1 month Fallback SOFR + 1.79 %

( 1,013 ) (b)

December 31, 2022

3 rd Party interest rate swaps

$ 31,417 4.9 4.12 % 1 month LIBOR + 1.68 %

Customer interest rate swaps ( 31,417 ) 4.9 4.12 % 1 month LIBOR + 1.68 %

( 1,700 ) (b)

Amount Asset Liability

December 31, 2024 $ 65,629 $ 423 (a) $ 423 (b)

December 31, 2023 $ 21,302 $ 1,013 (a) $ 1,013 (b)

(a) Reported in accrued interest receivable and other assets within the consolidated balance sheets

1 unchanged sentence

Risk Participation Agreements

The Corporation entered into Risk Participation Agreement ("RPA") swaps with other financial institution related to loans in which the Corporation is a participant.

The RPAs provide credit protection to the financial institutions should the borrower fail to perform on its interest rate derivative contracts with the financial institutions.

The notional amounts of these contingent agreements total $ 21.7 million as of December 31, 2023, and zero as of December 31, 2022.

The Corporation’s existing credit derivatives result from participation in or out of interest rate swaps provided by or to external lenders as part of loan participation arrangements, and therefore, are not used to manage interest rate risk in the Corporation’s assets or liabilities.

Derivatives not designated as hedges are not speculative and result from a service the Corporation provides to certain lenders which participate in loans.

The Corporation entered into Risk Participation Agreement ("RPA") swaps with other financial institutions related to loans in which the Corporation is a participant in.

The RPA provides credit protection to the financial institution should the borrower fail to perform on its interest rate derivative contract with the financial institution.

The notional amount of this contingent agreement is $ 21.3 million as of December 31, 2024 and $ 21.7 million as of December 31, 2023.

The Corporation entered into RPA swaps with other financial institutions related to loans in which the Corporation is a participant out.

The RPA provides credit protection to the Corporation should the borrower fail to perform on its interest rate derivative contract with the financial institution.

The notional amount of this contingent agreement is $ 25.5 million as of December 31, 2024 and zero as of December 31, 2023.

The fair value of the RPA swaps was $ 11 thousand and $ 49 thousand as of December 31, 2024 and December 31, 2023, respectively, and is reported in accrued interest payable and other liabilities within the condensed consolidated balance sheets.

Off-Balance Sheet Commitments and Contingencies

Financial Instruments with Off-Balance Sheet Risk

The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financial needs of its customers.

34 unchanged sentences

(1) Excludes provision for credit losses related to the loan portfolio.

Other Off-Balance Sheet Commitments

The Corporation makes investments in limited partnerships, including certain small business investment corporations and low income housing partnerships.

Capital contributions for investments in small business companies ("SBIC") and other limited partnerships, reported in FHLB and other restricted stock holdings and investments on the consolidated balance sheet, as of December 31, 2023 and 2022, were $ 21.7 million and $ 17.0 million, respectively.

Investments in Small Business Investment Corporation and Community Development Entities

The Corporation makes investments in limited partnerships, including certain small business investment corporations ("SBICs") and community development entities ("CDEs").

Capital contributions for investments in SBICs and CDEs, reported in FHLB and other restricted stock holdings and investment on the consolidated balance sheet, as of December 31, 2024 and 2023, were $ 23.5 million and $ 21.7 million, respectively.

Unfunded capital commitments in investments in SBIC's and other limited partnerships totaled $ 8.0 million and $ 6.8 million as of December 31, 2024 and 2023, respectively.

These investments are accounted for under the equity method of accounting.

Qualified Affordable Housing Project Investments

Investments in Qualified Affordable Housing Project Investments

The carrying value of investments in the low-income housing partnerships, reported in FHLB and other restricted stock holdings and investments on the consolidated balance sheet, as of December 31, 2024 and 2023 were $ 7.3 million and $ 3.8 million, respectively.

The related amortization for the years ended December 31, 2024 2023, and 2022 were $ 711 thousand, $ 747 thousand, and $ 803 thousand, respectively.

Unfunded commitments, reported in accrued interest payable and other liabilities on the consolidated balance sheet, as of December 31, 2023 and 2022, were $ 796 thousand and $ 1.0 million, respectively.

Unfunded commitments, reported in accrued interest payable and other liabilities on the consolidated balance sheet, as of December 31, 2024 and 2023, were $ 3.7 million and $ 796 thousand, respectively.

Investments in Federal and State Rehabilitation/Historic Tax Credit

From time to time, the Corporation invests in certain limited partnerships that were formed to provide certain federal and state rehabilitation/historic tax credits.

The carrying value of these investments, reported in FHLB and other restricted stock holdings and investments on the consolidated balance sheet, as of December 31, 2024 and 2023 were $ 4.1 million and zero , respectively.

The investments do not have any related amortization for the years ended December 31, 2024, 2023, and 2022, respectively.

Unfunded commitments, reported in accrued interest payable and other liabilities on the consolidated balance sheets, as of December 31, 2024 and December 31, 2023, were $ 3.2 million and zero , respectively.

The Corporation is subject to claims and lawsuits that arise primarily in the ordinary course of business.

9 unchanged sentences

Total assets $ 716,145 $ 676,796

Subordinated debentures $ 104,887 $ 104,584

Subordinated notes and debentures $ 105,190 $ 104,887

Other liabilities 260 662

12 unchanged sentences

16,671 16,776 16,742

Change in net unrealized holdings gains (losses) on equity securities not held for trading ( 722 ) ( 132 ) 121

Change in net unrealized holdings (losses) on equity securities not held for trading ( 290 ) ( 722 ) ( 132 )

Income tax benefit 1,513 1,606 1,422

12 unchanged sentences

Net realized and unrealized (gains) losses on equity securities ( 290 ) 700 132

Decrease in other assets ( 230 ) 609 60

Increase (decrease) in other assets 174 ( 230 ) 609

Increase in other liabilities 2,734 2,064 1,571

8 unchanged sentences

Dividends paid on preferred stock ( 4,302 ) ( 4,302 ) ( 4,302 )

Proceeds from issuance of long term debt — — 83,484

Repayment of long term debt — — ( 50,000 )

Purchase of treasury stock ( 1,003 ) ( 6,858 ) ( 1,707 )

54 unchanged sentences

Amortization of unrealized gains from held-to-maturity securities 1,466 545 2,011

Unrealized gains (losses) on postretirement benefits plan 768 ( 139 ) 629

Unrealized gains (losses) on interest rate swap 119 ( 119 ) —

Unrealized gains on postretirement benefits plan 629 245 874

Total $ ( 46,078 ) $ 2,505 $ ( 43,573 )

2 unchanged sentences

December 31, 2023

Unrealized losses on securities available-for-sale $ ( 706 ) $ ( 53,576 ) $ ( 54,282 )

Unrealized gains on securities available-for-sale $ ( 54,282 ) $ 6,109 $ ( 48,173 )

Amortization of unrealized gains from held-to-maturity securities 875 591 1,466

Unrealized gains on postretirement benefits plan 618 150 768

Unrealized gains (losses) on interest rate swap ( 306 ) 425 119

Unrealized losses on postretirement benefits plan 768 ( 139 ) 629

Unrealized losses on interest rate swap 119 ( 119 ) —

Total $ ( 52,520 ) $ 6,442 $ ( 46,078 )

2 unchanged sentences

December 31, 2022

Unrealized gains (losses) on securities available-for-sale $ 15,338 $ ( 16,044 ) $ ( 706 )

Unrealized losses on securities available-for-sale $ ( 706 ) $ ( 53,576 ) $ ( 54,282 )

Amortization of unrealized gains from held-to-maturity securities — 875 875

Unrealized gains on postretirement benefits plan 618 150 768

Unrealized gains (losses) on interest rate swap ( 607 ) 301 ( 306 )

Unrealized gains on interest rate swap ( 306 ) 425 119

Total $ ( 394 ) $ ( 52,126 ) $ ( 52,520 )

Segment Reporting

The Corporation generates revenue through the operation of a full-service bank and manages the business activities on a consolidated basis.

The nature of the products and services offered, and the types of customers served are similar across the geographic footprint the Bank operates in.

The banking segment derives its revenue primarily through the operations as 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.

There are branch offices located in Pennsylvania, Ohio, New York and Virginia.

The accounting policies of the banking segment are the same as those described in the summary of significant accounting policies.

Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

The Corporation’s CODM is the Chief Executive Officer, Michael D.

The CODM assesses performance for the banking segment and decides how to allocate resources based on consolidated net income as reported on the income statement.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

The CODM uses net income to evaluate overall financial performance and profitability, and it is utilized as a key metric in evaluating the achievement of the corporation’s strategic plan.

Net income is used to monitor budget versus actual results.

The comparison of budgeted versus actual net income results are used in assessing the banking segment’s performance and in establishing management’s compensation.

Information reported internally for performance assessment by the CODM follows, including reconciliation to the financial statements.

Year ended December 31,

2024 2023 2022

Interest and Dividend Income:

Loans including fees

Interest and fees on loans $ 293,544 $ 273,220 $ 194,149

PPP fees — 3 1,889

Investment Securities 31,926 20,473 17,700

Total interest and dividend income 325,470 293,696 213,738

Interest Expense:

Deposits 133,493 97,770 19,833

Borrowed funds 4,508 6,097 4,246

Total interest expense 138,001 103,867 24,079

NET INTEREST INCOME 187,469 189,829 189,659

PROVISION FOR CREDIT LOSS EXPENSE 9,222 5,993 8,589

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSS EXPENSE 178,247 183,836 181,070

NON-INTEREST INCOME:

Service charges on deposit accounts 6,990 7,372 7,206

Other service charges and fees 2,973 3,010 3,196

Wealth and asset management fees 7,845 7,251 7,172

Security gains (losses), net 828 ( 335 ) ( 498 )

Mortgage banking 673 676 1,237

Bank owned life insurance 3,110 2,945 3,433

Card processing and interchange income 8,666 8,301 7,797

Other non-interest income 8,029 4,115 5,223

Total non-interest income 39,114 33,335 34,766

NON-INTEREST EXPENSES:

Salaries 54,089 50,871 44,495

Incentive 2,465 2,847 9,875

Benefits 17,982 17,344 17,090

Net occupancy expense 14,737 14,509 13,298

Technology expense 21,805 20,202 17,041

State and local taxes 4,726 4,126 4,078

Legal, professional and examination fees 4,217 4,414 4,173

Advertising 2,545 3,133 2,887

FDIC insurance 3,718 3,879 2,796

Card processing and interchange expenses 4,575 5,025 4,801

Other non-interest expenses 19,143 18,992 17,088

Total non-interest expenses 150,002 145,342 137,622

INCOME BEFORE INCOME TAXES 67,359 71,829 78,214

INCOME TAX EXPENSE 12,784 13,809 15,026

SEGMENT NET INCOME $ 54,575 $ 58,020 $ 63,188

Reconciliation of profit or loss

Adjustments and reconciling items — — —

CONSOLIDATED NET INCOME $ 54,575 $ 58,020 $ 63,188

Reconciliation of assets

Adjustments and reconciling items — —

TOTAL CONSOLIDATED ASSETS $ 6,192,010 $ 5,752,957

Subsequent Events

On January 9, 2025, the Corporation and CNB Bank entered into a definitive merger agreement (the “Merger Agreement”) with ESSA Bancorp, Inc.

(“ESSA”) and its subsidiary bank, ESSA Bank & Trust Company (“ESSA Bank”), pursuant to which the Corporation will acquire ESSA in an all-stock transaction.

Subject to the terms and conditions of the Merger Agreement, which has been approved by the boards of directors of each party, ESSA will merge with and into the Corporation, with the Corporation as the surviving entity, and immediately thereafter, ESSA Bank will merge with and into the Bank, with the Bank as the surviving bank (the “Merger”).

Under the terms of the Merger Agreement, each outstanding share of ESSA common stock will be converted into the right to receive 0.8547 shares of the Corporation’s common stock.

The transaction is currently expected to close in the third quarter of 2025, subject to customary closing conditions, including the receipt of regulatory approvals and approvals by the shareholders of ESSA and the Corporation.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data