What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-11 compared with 2025-03-06 · 242 added, 129 removed, 737 unchanged (33% of the section changed)

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(vi) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise;

(vii) governmental approvals of the Corporation's pending merger with ESSA may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger;

(viii) the Corporation's shareholders and/or the shareholders of ESSA may fail to approve the merger or the issuance of the Corporation’s common stock in the merger, as applicable;

(ix) higher than expected costs or other difficulties related to integration of combined or merged businesses;

(x) the effects of business combinations and other acquisition transactions, including the inability to realize our loan and investment portfolios;

(xi) changes in the quality or composition of our loan and investment portfolios;

(xii) adequacy of loan loss reserves;

(xiii) increased competition;

(xiv) loss of certain key officers;

(xv) deposit attrition;

(xvi) rapidly changing technology;

(xvii) unanticipated regulatory or judicial proceedings and liabilities and other costs;

(xviii) changes in the cost of funds, demand for loan products or demand for financial services;

and (xix) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices.

(vii) adverse economic effects from international trade disputes, including threatened or implemented tariffs imposed by the U.S.

and threatened or implemented tariffs imposed by foreign countries in retaliation, or similar events impacting economic activity;

(viii) higher than expected costs or other difficulties related to integration of combined or merged businesses;

(ix) the effects of business combinations and other acquisition transactions, including the inability to realize our l and investment portfolios;

(x) changes in the quality or composition of our loan and investment portfolios;

(xi) adequacy of loan loss reserves;

(xii) increased competition;

(xiii) loss of certain key officers;

(xiv) deposit attrition;

(xv) rapidly changing technology;

(xvi) unanticipated regulatory or judicial proceedings and liabilities and other costs;

(xvii) changes in the cost of funds, demand for loan products or demand for financial services;

and (xviii) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices.

Such developments could have an adverse impact on CNB's financial position and results of operations.

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Ridge View Bank, a division of the Bank, operates in the Virginia counties of Botetourt, Craig, Franklin, New River Valley, and Roanoke.

ESSA Bank, a division of the Bank, operates in the Pennsylvania counties of Delaware, Chester, Lackawanna, Lehigh, Luzerne, Monroe, and Northampton.

Impressia Bank, a division of the Bank, operates in the Bank’s primary market areas.

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Merger with ESSA Bancorp, Inc.

On January 9, 2025, the Corporation and CNB Bank entered into the Merger Agreement with ESSA and 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.

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.

On July 23, 2025, the Corporation completed its previously announced acquisition of ESSA and its subsidiary bank, ESSA Bank, pursuant to the Merger Agreement.

The Corporation’s acquisition of ESSA was an all-stock transaction.

Under the terms of the Merger Agreement, ESSA merged with and into the Corporation, with the Corporation as the surviving entity, and immediately thereafter, ESSA Bank merged with and into the Bank, with the Bank as the surviving bank.

Banking offices of ESSA Bank operate under the trade name ESSA Bank, a division of CNB Bank.

Pursuant to the Merger Agreement, each outstanding share of ESSA common stock was converted into the right to receive 0.8547 shares of the Corporation’s common stock.

The total consideration paid to ESSA shareholders was approximately $202.6 million, comprised of approximately 8,359,430 shares of the Corporation's common stock, valued at approximately $202.5 million based on the July 23, 2025 closing price of $24.23 per share of the Corporation's common stock, and $21 thousand in cash in lieu of fractional shares.

Non-GAAP Financial Information

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Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that different companies might calculate these measures differently.

Non-GAAP measures reflected within the discussion below also include adjusted calculations to exclude after-tax merger and integration costs ("merger transaction related expenses") related to the Corporation’s acquisition of ESSA.

Non-GAAP measures reflected within the discussion below include:

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• Tangible common equity/tangible assets;

• Net interest margin (fully tax equivalent basis);

• Efficiency ratio;

• Pre-provision net revenue ("PPNR");

• Return on average tangible common equity.

• Adjusted net income available to common shareholders;

• Adjusted earnings per share;

• Merger transaction related expenses, net of tax;

• Net interest margin (fully tax equivalent basis) and Net interest margin excluding purchase accounting loan accretion (fully tax equivalent basis);

• Efficiency ratio (fully tax equivalent basis) and Adjusted efficiency ratio (fully tax equivalent basis);

• Pre-provision net revenue ("PPNR") and Adjusted PPNR;

• Return on average tangible common equity and Adjusted return on average tangible common equity.

A reconciliation of these non-GAAP financial measures is provided below in the "Non-GAAP Financial Measures" section.

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Cash and cash equivalents totaled $527.9 million at December 31, 2025, including $441.5 million held at the Federal Reserve, compared to $443.0 million at December 31, 2024.

These excess funds, when combined with collective contingent liquidity resources of $4.6 billion including (i) available borrowing capacity from the FHLB and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, result in the total on-hand and contingent liquidity sources for the Corporation to be approximately 5.0 times the estimated amount of adjusted uninsured deposit balances.

The increase in cash and cash equivalents from December 31, 2023 to December 31, 2024, was primarily due to an increase in deposits, partially offset by an increase in the loan portfolio and securities portfolio.

These excess funds, when combined with collective contingent liquidity resources of $6.7 billion including (i) available borrowing capacity from the FHLB and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, result in total available liquidity sources for the Corporation as of December 31, 2025 to be approximately 5.4 times the estimated amount of adjusted uninsured deposit balances.

Management believes the liquidity needs of the Corporation are satisfied primarily by the current balance of cash and cash equivalents, customer and brokered deposits, FHLB financing, the portions of the securities and loan portfolios that mature within one year, and other third-party funding channels.

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The Corporation's strategy given the current environment is to focus on lower risk securities and shorter durations that complement the current portfolio investment ladder, coupled with consistent reinvestment of cash flows to replace lower earning assets.

The Corporation monitors the earnings performance and the effectiveness of the liquidity of the securities portfolio on a regular basis through meetings of the Asset/Liability Committee ("ALCO").

The Corporation monitors the earnings performance and the effectiveness of the liquidity of the securities portfolio on a regular basis through meetings of the ALCO.

The ALCO also reviews and manages interest rate risk for the Corporation.

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Note 4, "Loans Receivable and Allowance for Credit Losses," to the consolidated financial statements provides more detail concerning the loan portfolio of the Corporation.

At December 31, 2024, loans totaled $4.5 billion, excluding the balances of syndicated loans.

This adjusted total of $4.5 billion in loans represented an increase of $169.4 million, or 3.88%, compared to the same adjusted total loans measured as of December 31, 2023.

Loan growth for the year ended December 31, 2024, primarily resulted from growth in commercial and residential real estate loans in the Corporation's recent expansion markets of Cleveland, OH and Roanoke, VA.

Additional growth occurred in the commercial and residential real estate loans in the Columbus, OH market, commercial industrial loans in the Erie, PA market and residential real estate loans in CNB Bank’s Private Banking division.

At December 31, 2024, the Corporation's balance sheet reflected a decrease in syndicated lending balances of $28.8 million compared to December 31, 2023, reflecting scheduled paydowns or early payoffs of certain syndicated credits during 2024.

The syndicated loan portfolio totaled $79.9 million, or 1.73% of total loans at December 31, 2024, compared to $108.7 million, or 2.43% of total loans, at December 31, 2023.

At December 31, 2025, loans totaled $6.4 billion, excluding $70.8 million of syndicated loans.

Excluding $1.7 billion in loans, net of estimated purchase accounting fair value adjustments, acquired in the ESSA acquisition, organic loan growth for the full year was $218.8 million, or an increase of 4.83%, compared to December 31, 2024.

The full-year increase in loans as of December 31, 2025, compared to December 31, 2024, was primarily driven by growth in the Ridge View Bank, BankOnBuffalo, and legacy CNB Bank and ERIEBANK markets and loan activity in CNB Bank's Private Banking division.

At December 31, 2025, the syndicated loan portfolio totaled $70.8 million, or 1.09% of total loans, compared to $79.9 million, or 1.73% of total loans, at December 31, 2024.

The decrease in syndicated lending balances of $9.1 million compared to December 31, 2024 reflects net scheduled amortization and prepayments of credits in excess of added holdings, with no recorded charge-offs in the syndicated portfolio in 2025.

The Corporation continues to focus on evaluating the level and composition of its syndicated loan portfolio to ensure it continues to provide strong credit quality, profitable use of excess liquidity, and a complement to the Corporation’s loan growth from its in-market customer relationships.

Loan Origination/Risk Management

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Loan Portfolio Profile

As part of its lending policy and risk management activities, the Corporation tracks lending exposure by industry classification and type to determine potential risks associated with industry concentrations, and whether any risk issues could lead to additional credit loss exposure.

In the current post-pandemic and inflationary economic environment, the Corporation has evaluated its exposure to the office, hospitality, and multifamily industries within its commercial real estate portfolio.

Even given the Corporation’s historically sound underwriting protocols and high credit quality ratings for borrowers in these industries, the Corporation monitors numerous relevant sensitivity elements at both underwriting and through and beyond the funding period, including projects occupancy, loan-to-value, absorption and cap rates, debt service coverage and covenant compliance, and developer/lessor financial strength both in the project and globally.

At December 31, 2024, the Corporation had the following key metrics related to its office, hospitality and multifamily portfolios:

As part of its lending policy and risk management activities, the Corporation tracks lending exposure by industry classification and type to determine potential risks associated with industry concentrations, and to identify any concentration risk issues that could lead to additional credit loss exposure.

An important and recurring part of this process involves the Corporation’s continued measurement and evaluation of its exposure to the office, hospitality, and multifamily industries within its commercial real estate portfolio.

Even given the Corporation’s historically sound underwriting protocols and high credit quality standards for borrowers in the commercial real estate industry segments, the Corporation monitors numerous relevant sensitivity elements, including occupancy, loan-to-value, absorption and cap rates, debt service coverage and covenant compliance, and developer/lessor financial strength both in the project and globally.

At December 31, 2025, the Corporation had the following key metrics related to its office, hospitality and multifamily portfolios with such metrics including the impact on the respective portfolios of loans acquired during the third quarter of 2025 from the ESSA acquisition:

• Commercial office loans

◦ There were 112 outstanding loans, totaling $113.7 million, or 2.47% of total Corporation loans outstanding;

◦ There were no nonaccrual commercial office loans at December 31, 2024;

◦ There were no past due commercial office loans at December 31, 2024;

◦ There were 147 outstanding loans, totaling $150.4 million, or 2.32% of total loans outstanding;

◦ There were no nonaccrual commercial office loans;

◦ There were three past-due commercial office loans that totaled $2.3 million, or 1.54% of the total office loans outstanding;

◦ The average outstanding balance per commercial office loan was $1.0 million.

• Commercial hospitality loans

◦ There were 170 outstanding loans, totaling $321.6 million, or 6.98% of total Corporation loans outstanding;

◦ There were no nonaccrual commercial hospitality loans at December 31, 2024;

◦ There were no past due commercial hospitality loans at December 31, 2024;

◦ There were 153 outstanding loans, totaling $320.6 million, or 4.94% of total loans outstanding;

◦ There were no nonaccrual commercial hospitality loans;

◦ There were no past-due commercial hospitality loans;

◦ The average outstanding balance per commercial hospitality loan was $2.1 million.

• Commercial multifamily loans

◦ There were 225 outstanding loans, totaling $367.6 million, or 7.98% of total Corporation loans outstanding;

◦ There were two nonaccrual commercial multifamily loan that totaled $20.7 million, or 5.62% of total multifamily loans outstanding.

As previously discussed, one customer relationship did have a specific reserve of $885 thousand, while the other customer relationship did not have a related specific loss reserve at December 31, 2024;

◦ There were three past due commercial multifamily loans that totaled $21.1 million, or 5.75% of total commercial multifamily loans outstanding at December 31, 2024;

◦ There were 375 outstanding loans, totaling $601.4 million, or 9.26% of total loans outstanding;

◦ There were two nonaccrual commercial multifamily loans that totaled $799 thousand, or 0.13% of total multifamily loans outstanding;

◦ There was one past-due commercial multifamily loan that totaled $645 thousand, or 0.11% of total multifamily loans outstanding;

◦ The average outstanding balance per commercial multifamily loan was $1.6 million.

The following table summarize the geographic region (based upon metropolitan statistical areas) in which the commercial office, hospitality and multifamily loans were originated as of December 31, 2024:

The following table summarizes the geographic region (based upon metropolitan statistical areas) in which the commercial office, hospitality and multifamily loans were originated as of December 31, 2025:

December 31, 2025

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Cleveland, OH 21.49

Allentown-Bethlehem-Easton, PA 8.67

Cincinnati, OH 7.25

Columbus, OH 6.40

Erie-Meadville, PA 3.99

All other geographical regions 35.35

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Buffalo, NY 19.19 %

Columbus, OH 18.42

Pittsburgh, PA 15.64

Columbus, OH 15.00

Cleveland, OH 9.40

Erie-Meadville, PA 5.98

All other geographical regions 34.79

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Buffalo, NY 18.18

Allentown-Bethlehem-Easton, PA 16.59

Columbus, OH 10.37

Philadelphia, PA 10.22

All other geographical regions 20.61

Total Commercial Multifamily 100.00 %

The Corporation had no commercial office, hospitality or multifamily loan relationships considered by the banking regulators to be a high volatility commercial real estate credit ("HVCRE") as of December 31, 2024.

The Corporation had no commercial office, hospitality or multifamily loan relationships considered by the banking regulators to be high volatility commercial real estate ("HVCRE") credits.

No credits acquired from ESSA were considered HVCRE.

Maturities and Sensitivities of Loans Receivable to Changes in Interest Rate

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Agricultural production and other loans to farmers 39 37 — 7 83

Loans to depository institutions — — — — —

Commercial and Industrial 77,388 136,865 86,895 23,077 324,225

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Multifamily (5 or more) residential properties

55,548 158,551 16,888 — 230,987

Non-owner occupied, nonfarm nonresidential properties 90,526 259,910 95,863 897 447,196

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Agricultural production and other loans to farmers 686 426 4,794 — 5,906

Loans to depository institutions — 2,439 — — 2,439

Commercial and Industrial 317,415 66,541 68,567 2,230 454,753

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Multifamily (5 or more) residential properties

82,853 98,044 291,498 6,450 478,845

Non-owner occupied, nonfarm nonresidential properties 153,337 258,879 512,615 47,616 972,447

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Total $ 780,888 $ 688,256 $ 1,529,731 $ 912,989 $ 3,911,864

1 1-4 family construction loans and other construction loans and all land development and other land loans segments may include loans that have a permanent financing period as part of the original term of the loan.

Upon completion of the construction period the loans are reclassified to their permanent financing loan segment.

(1) 1-4 family construction loans and other construction loans and all land development and other land loans segments include loans that are construction to permanent loans in which the loan segment will change when the construction period has concluded.

Loan Concentration

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Total nonperforming assets were approximately $42.2 million, or 0.50% of total assets, as of December 31, 2025, compared to $59.5 million, or 0.96% of total assets, as of December 31, 2024.

The increase in nonperforming assets for the year ended December 31, 2024, was due to one commercial multifamily relationship totaling $20.4 million with a specific reserve balance of $885 thousand.

The decrease in nonperforming assets for the year ended December 31, 2025 was due to the resolution of several loans, coupled with paydowns on existing nonperforming assets, partially offset by certain nonperforming assets acquired in the ESSA acquisition.

Management does not believe there is a risk of significant additional loss exposure beyond the specific reserves related to this loan relationship and is actively working with the borrower and their real estate broker to facilitate the sale of the property.

In addition, to the loan relationship discussed above, there were two other relationships:

(i) a commercial and industrial and owner-occupied commercial real estate relationship as previously disclosed in the second quarter of 2024 and (ii) a commercial relationship (consisting of various loan types) in the third quarter of 2024 that contributed to the increase in nonperforming assets as of December 31, 2024, compared to December 31, 2023.

The Corporation has established written lending policies and procedures that require underwriting standards, loan documentation, and credit analysis standards to be met prior to funding a loan.

Subsequent to the funding of a loan, ongoing review of credits is required.

Credit reviews are performed quarterly by an outsourced loan review firm and cover approximately 65% of the commercial loan portfolio on an annual basis.

Credit reviews are performed five times per year by an outsourced loan review firm and cover approximately 65% of the commercial loan portfolio on an annual basis.

In addition, the external independent loan review firm reviews past due loans and all significant classified assets and nonaccrual loans annually.

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Agricultural production and other loans to farmers 37 0.09 5,989 0.62

Loans to depository institutions 20 0.04 2,439 0.82

Commercial and Industrial 9,360 12.00 778,978 1.20

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Total loans $ 47,357 100.00 % $ 4,608,956 1.03 %

(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 amount of allowance allocated and total loans receivable columns disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.

The allowance for credit losses measured as a percentage of total loans was 1.03% as of December 31, 2025 and 2024.

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

For the year ended December 31, 2024, the allowance for credit losses increased $1.5 million.

This increase was primarily driven by growth in the Corporation's loan portfolio in new market areas as well as an increased unemployment rate forecast, 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.

For the year ended December 31, 2025, the increase in the allowance for credit losses was primarily driven by the ESSA acquisition, including the $18.2 million in PCD and Purchased Seasoned Loans ("PSL") allowance established on the acquisition date, as well as growth in the Corporation’s loan portfolio.

Significant uncertainty continues to affect both the domestic and global economic outlook due to changes in U.S.

tariffs and corresponding policy actions by trading partners, persistently elevated interest rates, fluctuating consumer confidence, and ongoing geopolitical conflicts.

Management will continue to proactively reassess its estimate of expected credit losses as new information becomes available.

Note 4, "Loans Receivable and Allowance for Credit Losses," to the consolidated financial statements provides further disclosure of loan balances by portfolio segment as of December 31, 2025 and 2024.

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Agricultural production and other loans to farmers — — 6,366 —

Loans to depository institutions (38) — 7,090 —

Commercial and Industrial 1,962 (934) 748,932 (0.12)

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Total $ 9,037 $ (7,512) $ 4,491,304 (0.17) %

(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 provision (benefit) for credit losses on loans receivable column disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.

(1) Excludes provision for credit losses totaling $185 thousand related to unfunded commitments.

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Year Ended December 31, 2023 (1)

Provision (Benefit) for Credit Loss Expense Net

Provision (Benefit) for Credit Losses on Loans Receivable (2)

(Charge-Offs)

Recoveries Average

Loans Ratio of Annualized Net (Charge-Offs)

Recoveries to Average Loans

Recoveries Average Loans Receivable Ratio of Annualized Net (Charge-Offs) Recoveries to Average Loans Receivable

Farmland $ (21) $ — $ 34,397 — %

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Total loans $ 5,837 $ (3,441) $ 4,396,341 (0.08) %

(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 provision (benefit) for credit losses on loans receivable column disclosure as of December 31, 2023, to reflect the revisions for the applicable portfolio segments.

(2) Excludes provision for credit losses totaling $156 thousand related to unfunded commitments.

Note 19, "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.

During the year ended December 31, 2025, the Corporation recorded a provision for credit losses of $8.9 million compared to $9.2 million for the year ended December 31, 2024.

Included in the provision for credit losses for the year ended December 31, 2025 was a $208 thousand expense related to the allowance for unfunded commitments compared to a $185 thousand expense for the year ended December 31, 2024.

The $3.2 million increase in the provision expense for the year ended December 31, 2024 compared to the year ended December 31, 2023, was primarily a result of the increase in loan portfolio growth and increase in the net loan charge-offs.

Net charge-offs during the year ended December 31, 2025 were $7.2 million, or 0.13% of average total loans and loans held for sale, compared to $7.5 million, or 0.17% of average total loans and loans held for sale, during the year ended December 31, 2024.

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During the years ended December 31, 2025 and 2024, the Corporation invested $6.3 million and $16.3 million, respectively, in its physical infrastructure through the purchase of land, buildings, and equipment.

The year ended December 31, 2025 includes premises and equipment related to the ESSA acquisition.

Bank Owned Life Insurance

The Corporation has periodically purchased Bank Owned Life Insurance ("BOLI").

The policies cover executive officers and a select group of other employees with the Bank being named as beneficiary.

The policies cover executive officers, directors and a select group of other employees with the Bank being named as beneficiary.

Earnings from BOLI assist the Corporation in offsetting its benefit costs.

The Corporation made no purchases of BOLI during the years ended December 31, 2024 and December 31, 2023.

The Corporation made no purchases of BOLI during the years ended December 31, 2025 and December 31, 2024, respectively.

Funding Sources

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Total $ 7,027,109 100.00 % $ 5,371,364 100.00 % 30.8%

At December 31, 2024, total deposits were $5.4 billion, reflecting an increase of $372.6 million, or 7.45%, from December 31, 2023.

The increase in deposits was due to continued growth in the Corporation's treasury management customer base and resulting increases in municipal and institutional/corporate deposits, including wealth and asset management deposit relationships resulting from CNB's participation in deposit insurance sharing programs.

At December 31, 2025, total deposits were $7.0 billion, reflecting an increase of $1.7 billion, or 30.8%, from December 31, 2024.

Organic deposit growth for the full year of 2025, excluding $1.5 billion in deposits, net of estimated purchase accounting fair value adjustments, assumed in the ESSA acquisition and including $88.1 million in deposits classified as held for sale, total deposits increased $288.1 million, or 5.36%, compared to December 31, 2024.

The $88.1 million in deposits classified as held for sale as of December 31, 2025 are associated with a planned sale of certain customer deposit accounts that are part of a broader strategic initiative to optimize the Corporation’s branch and market footprint following the ESSA acquisition.

The increase in deposits was primarily attributable to retail account growth, as well as an increase in Treasury Management-sourced business including municipal deposits.

The following table sets forth the average balances of and the average rates paid on deposits for the period indicated.

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Total $ 6,088,884 $ 5,110,210 $ 4,831,267

At December 31, 2024, the average deposit balance per account for CNB Bank was approximately $34 thousand, which has remained consistently at this level for an extended period.

The following table presents additional information about our December 31, 2025 and 2024 deposits:

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At December 31, 2025, the total estimated uninsured deposits for CNB Bank were approximately $2.0 billion, or approximately 28.13% of total CNB Bank deposits.

However, when excluding affiliate company deposits of $101.9 million and pledged-investment collateralized deposits of $429.0 million, the adjusted amount and percentage of total estimated uninsured deposits was approximately $986.0 million, or approximately 18.01% of total CNB Bank deposits as of December 31, 2024.

However, when excluding affiliate company deposits of $18.4 million and pledged-investment collateralized deposits of $680.4 million, the adjusted amount and percentage of total estimated uninsured deposits was approximately $1.3 billion, or approximately 18.33% of total CNB Bank deposits as of December 31, 2025.

At December 31, 2024, the total estimated uninsured deposits for CNB Bank were approximately $1.5 billion, or approximately 27.71% of total CNB Bank deposits.

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The terms of these borrowings are detailed in Note 11, "Borrowings," to the consolidated financial statements.

There were no short-term FHLB borrowings as of December 31, 2024 and December 31, 2023.

There were $164 million in short term FHLB borrowings as of December 31, 2025, compared to zero at December 31, 2024.

The increase in short-term borrowings at December 31, 2025 compared to December 31, 2024 was attributable to borrowings assumed with the ESSA acquisition.

In June 2021, the Corporation sold $85.0 million aggregate principal amount of 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 (the "2031 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.

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At December 31, 2025, the Corporation’s cash and cash equivalents position was approximately $527.9 million, including liquidity of $441.5 million held at the Federal Reserve.

These excess funds, when combined with (i) available borrowing capacity of $4.6 billion from the Federal Home Loan Bank of Pittsburgh ("FHLB") and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, resulted in the total on-hand and contingent liquidity sources for the Corporation being approximately 5.0 times the estimated amount of adjusted uninsured deposit balances discussed above.

These excess funds, when combined with collective contingent liquidity resources of $6.4 billion including (i) available borrowing capacity from the FHLB and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, resulted in total available liquidity sources for the Corporation as of December 31, 2025 to be approximately 5.2 times the estimated amount of adjusted uninsured deposit balances.

The following table summarizes the Corporation's net available liquidity and borrowing capacities as of December 31, 2025:

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Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2025.

The Corporation’s material contractual obligations as of December 31, 2024 consist of (i) long-term borrowings - Note 10, "Borrowings," (ii) operating leases - Note 7, "Leases," (iii) time deposits with stated maturity dates - Note 9, "Deposits," and (iv) commitments to extend credit and standby letters of credit - Note 18, "Off-Balance Sheet Commitments and Contingencies."

The Corporation’s material contractual obligations as of December 31, 2025 consist of (i) long-term borrowings - Note 11, "Borrowings," (ii) operating and finance leases - Note 8, "Leases," (iii) time deposits with stated maturity dates - Note 10, "Deposits," and (iv) commitments to extend credit and standby letters of credit - Note 19, "Off-Balance Sheet Commitments and Contingencies."

Shareholders’ Equity, Capital Ratios and Metrics

Shareholders' Equity

On September 21, 2022, the Corporation successfully completed a common stock offering resulting in the issuance of 4,257,446 shares of common stock at $23.50 per share and net proceeds of $94.1 million after deducting the underwriting discount and customary offering expenses.

The net proceeds from the capital raise will be used for general corporate purposes, including working capital and funding the Corporation's organic growth across its multiple geographic markets, or evaluating potential acquisition opportunities.

As of December 31, 2025, the Corporation’s total shareholders’ equity was $872.1 million, representing an increase of $261.4 million, or 42.81%, from December 31, 2024.

The changes resulted from an increase in the Corporation's retained earnings (net income, partially offset by the common and preferred stock dividends paid) and a decrease in accumulated other comprehensive loss primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’s AFS investment portfolio.

The additions to shareholders equity from retained earnings were also partially offset by the Corporation's repurchase of some of its common stock.

The increase resulted from an increase in additional paid in capital of $202.6 million related to the ESSA acquisition, and a decrease in accumulated other comprehensive loss, primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation's available-for-sale investment portfolio, and growth in earnings, partially offset by the payment of common and preferred stock dividends to the Corporation's shareholders during the year ended December 31, 2025.

Preferred Stock

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(2) Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21%) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio.

The taxable equivalent adjustment to net interest income for the years ended December 31, 2024, 2023, and 2022 were $955 thousand, $997 thousand, and $1.2 million, respectively.

The taxable equivalent adjustment to net interest income for the years ended December 31, 2025, 2024, and 2023 were $1.2 million, $955 thousand, and $997 thousand, respectively.

(3) Average loans receivable outstanding includes the average balance outstanding of all nonaccrual loans.

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Overview of the Statements of Income and Comprehensive Income

Net income available to common shareholders ("earnings") was $50.3 million, or $2.39 per diluted share, for the year ended December 31, 2024, compared to earnings of $53.7 million, or $2.55 per diluted share, for the year ended December 31, 2023.

The decrease in diluted earnings per share in the year ended December 31, 2024 was primarily due to the rise in deposit costs year over year.

In addition, during the year ended December 31, 2024, the Corporation repurchased 23,988 shares of common stock at a weighted average price per share of $18.33, compared to repurchases of 326,459 shares of common stock at a weighted average price per share of $20.08 during the year ended December 31, 2023.

PPNR, a non-GAAP measure, was $76.6 million for the year ended December 31, 2024, compared to $77.8 million for the year ended December 31, 2023.

The decrease in PPNR for the year ended December 31, 2024 compared to the year ended December 31, 2023, was primarily driven by the year-over-year increase in deposit costs combined with increases in certain personnel costs (primarily from new offices and personnel added in the recently added expansion markets of Cleveland, OH and Roanoke, VA) and the growth in technology expenses for recently completed full implementation of certain franchise-wide business development and customer management applications.

Return on average equity was 9.21% for the year ended December 31, 2024, compared to 10.54% for the year ended December 31, 2023.

Return on average tangible common equity, a non-GAAP measure, was 10.25% for the year ended December 31, 2024, compared to 11.98% for the year ended December 31, 2023.

The Corporation's efficiency ratio was 66.20% for the year ended December 31, 2024, compared to 65.13% for the year ended December 31, 2023.

The efficiency ratio on a fully tax-equivalent basis, a non-GAAP ratio, was 65.47% for the year ended December 31, 2024, compared to 64.45% the year ended December 31, 2023.

The increase was primarily the result of rising deposit costs coupled with higher salaries and benefits and technology expenses.

Net income available to common shareholders ("earnings") was $61.8 million, or $2.49 per diluted share, for the year ended December 31, 2025.

Excluding after-tax merger transaction related expenses, adjusted earnings were $73.4 million, or $2.95 per diluted share, for the year ended December 31, 2025, reflecting an increase of $23.2 million, or 46.06%, and $0.56 per diluted share, or 23.43%, compared to earnings of $50.3 million, or $2.39 per diluted share, for the year ended December 31, 2024.

The full-year increase was primarily due to the overall impact of the acquisition of ESSA, coupled with an increase in net interest income, partially offset by an increase in non-interest expense, as discussed in more detail below.

PPNR, a non-GAAP measure, was $91.3 million for the year ended December 31, 2025.

Excluding merger and integration costs, adjusted PPNR was $105.1 million for the year ended December 31, 2025, compared to $76.6 million for the year ended December 31, 2024.

The increase in year-to-date adjusted PPNR, when compared to the PPNR for the year ended December 31, 2024, was primarily due to the overall impact of incremental PPNR resulting from the acquisition of ESSA, coupled with an increase in net interest income across the legacy franchise for the year, partially offset by an increase in non-interest expense.

Return on average equity was 9.14% for the year ended December 31, 2025.

Excluding after-tax merger transaction related expenses, return on average equity was 10.75% for the year ended December 31, 2025, compared to 9.21% for the year ended December 31, 2024.

Return on average tangible common equity, a non-GAAP measure, was 10.59% for the year ended December 31, 2025.

Excluding after-tax merger transaction related expenses, return on average tangible common equity was 12.58% for the year ended December 31, 2025, compared to 10.25% for the year ended December 31, 2024.

The Corporation's efficiency ratio was 67.64% for the year ended December 31, 2025, and 66.35% on a fully tax-equivalent basis, a non-GAAP measure.

Excluding merger and integration costs, the efficiency ratio on a fully tax-equivalent basis was 61.49% for the year ended December 31, 2025, compared to 65.47% for the year ended December 31, 2024.

The year-over-year decrease was primarily driven by higher net interest income, partially offset by higher non-interest expense, and also reflected the anticipated economies-of-scale operational efficiencies resulting from the ESSA acquisition.

Interest Income and Expense

Net interest income was $242.0 million for the year ended December 31, 2025 compared to $187.5 million for the year ended December 31, 2024.

The decrease of $2.4 million, or 1.24%, was primarily due to an increase in the Corporation's interest expense as a result of targeted interest-bearing deposit rate increases to ensure both deposit growth and retention, more than offsetting the interest income growth from both year-over-year loan growth and the impact of higher interest rates for much of the 2024 year resulting in greater income on loans, coupled with a higher average balance of earnings excess liquidity maintained as interest-bearing deposits with the Federal Reserve.

When comparing the year ended December 31, 2025 to the year ended December 31, 2024, the increase in net interest income of $54.6 million, or 29.11%, was due to investment and loan growth, coupled with the impact of the ESSA acquisition, including $6.6 million in purchase accounting loan accretion realized for the period from the July 23, 2025 acquisition date through December 31, 2025.

Net interest margin was 3.65% and 3.41% for the years ended December 31, 2025 and 2024, respectively.

Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.65% and 3.39% for the years ended December 31, 2025 and 2024, respectively.

Excluding the $6.6 million in purchase accounting loan accretion, net interest margin on a fully tax-equivalent basis for the year ended December 31, 2025 was 3.55%.

The yield on earning assets for the year ended December 31, 2025 was 5.90%, an increase of 2 basis points from December 31, 2024.

The increase was primarily a result of loan growth and the net benefit of higher interest rates on both variable-rate loans and new loan production.

The yield on earning assets for the year ended December 31, 2023 included the previously mentioned $1.4 million, or three basis points, in one-time syndicated loan interest income.

The increase in yield compared to December 31, 2024 was primarily attributable to the $6.6 million in purchase accounting loan accretion.

Provision for Credit Losses

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Included in the provision for credit losses for the year ended December 31, 2025 was a $208 thousand expense related to the allowance for unfunded commitments compared to $185 thousand for the year ended December 31, 2024.

The $3.2 million increase in the provision expense for the year ended December 31, 2024 compared to the year ended December 31, 2023, was primarily a result of the higher loan portfolio growth.

Net loan charge-offs were $7.2 million during the year ended December 31, 2025, compared to $7.5 million during the year ended December 31, 2024.

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Total non-interest income was $40.2 million for the year ended December 31, 2025, compared to $39.1 million for the year ended December 31, 2024.

During the year ended December 31, 2024, notable changes compared to the year ended December 31, 2023 included an increase in higher pass-through income from SBICs coupled with an increase in net realized and unrealized gains on equity securities and an increase in wealth and asset management fees.

This increase was primarily due to the overall impact of the acquisition of ESSA, organic increases in wealth and asset management fees and a $1.1 million transition fee for the Corporation moving its existing retail investment business platform to a new provider, an increase in bank owned life insurance benefits, primarily from the result of $1.0 million in death benefit proceeds, and net realized gain on available-for-sale securities, partially offset by a decrease in other non-interest income resulting from a $1.6 million loss on sale of certain commercial real estate loans and lower pass-through income from small business companies ("SBIC").

Non-Interest Expense

For the year ended December 31, 2024, total non-interest expense was $150.0 million, compared to $145.3 million for the year ended December 31, 2023.

The increase of $4.7 million, or 3.21%, from the year ended December 31, 2023 was primarily a result of an increase in salaries and benefits and technology expenses.

The increase in salaries and benefits was driven by an increase in personnel costs related to annual merit increases and growth in the Corporation's staff and new offices in its expansion markets (Cleveland, OH and Roanoke, VA), while the increase in technology was primarily due to usage and licensing increases in year-over-year investments in applications aimed at enhancing both customer online banking capabilities, customer call center communications and in-branch technology delivery channels.

For the year ended December 31, 2025, total non-interest expense was $190.9 million.

Excluding merger and integration costs, total non-interest expense was $177.1 million compared to $150.0 million for the year ended December 31, 2024.

Excluding merger and integration costs, the increase of $27.1 million, or 18.04%, from the year ended December 31, 2024 was primarily driven by higher salaries and benefits.

This reflects staff additions related to the ESSA acquisition, merit-based annual increases in base salaries, higher incentive compensation accruals (due to strong financial performance in 2025), increased retirement plan contribution accruals and higher health insurance costs.

Occupancy expense also increased, largely due to higher rent associated with additional full-service office locations added both before and after the ESSA acquisition.

Technology expense increased, primarily due to the above-mentioned ESSA acquisition and investments in automation applications.

In addition, the full-year 2025 included increases in the amortization of core deposit intangibles and other non-interest expenses, which were impacted by business development activities.

Income Tax Expense

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Overview of the Statements of Income and Comprehensive Income

Earnings were $53.7 million, or $2.55 per diluted share, for the year ended December 31, 2023, compared to $58.9 million, or $3.26 per diluted share, for the year ended December 31, 2022, reflecting decreases of $5.2 million, or 8.78%, and $0.71 per diluted share, or 21.78%.

The 2022 full-year earnings per share was partially impacted by the effect of the Corporation's common stock offering completed in September 2022, resulting in the issuance of 4,257,446 shares of common stock at $23.50 per share and net proceeds of $94.1 million after deducting the underwriting discount and customary offering expenses.

PPNR, a non-GAAP measure, was $77.8 million for the year ended December 31, 2023, compared to $86.8 million for the year ended December 31, 2022, reflecting an decrease of $9.0 million, or 10.35%.

The increase in PPNR for the year ended December 31, 2023 was primarily driven by the increase in deposit costs combined with the growth in technology expenses due to investments in applications aimed at enhancing both customer relationship management and customer online experience, as well as expanding service delivery channels.

In addition, the Corporation had a year-over-year decrease in non-interest income as a result of lower pass-through income from small business investment companies ("SBICs").

Earnings were $50.3 million, or $2.39 per diluted share, for the year ended December 31, 2024, compared to earnings of $53.7 million, or $2.55 per diluted share, for the year ended December 31, 2023.

The decrease in diluted earnings per share in the year ended December 31, 2024 was primarily due to the rise in deposit costs year over year.

PPNR, a non-GAAP measure, was $76.6 million for the year ended December 31, 2024, compared to $77.8 million for the year ended December 31, 2023.

Return on average equity was 9.21% for the year ended December 31, 2024, compared to 10.54% for the year ended December 31, 2023.

Return on average tangible common equity, a non-GAAP measure, was 11.98% and 16.64% for the same periods in 2023 and 2022, respectively.

The Corporation's efficiency ratio was 65.13% for the year ended December 31, 2023, compared to 61.32% for the year ended December 31, 2022, respectively.

The efficiency ratio on a fully tax-equivalent basis, a non-GAAP ratio, was 64.45% for the year ended December 31, 2023, compared to 60.87% for the year ended December 31, 2022, respectively.

The increase for the year ended December 31, 2023 was primarily the result of rising deposit costs coupled with higher occupancy costs and technology expenses.

Return on average tangible common equity, a non-GAAP measure, was 10.25% for the year ended December 31, 2024, compared to 11.98% for the year ended December 31, 2023.

The Corporation's efficiency ratio was 66.20% for the year ended December 31, 2024, compared to 65.13% for the year ended December 31, 2023.

The efficiency ratio on a fully tax-equivalent basis, a non-GAAP ratio, was 65.47% for the year ended December 31, 2024, compared to 64.45% the year ended December 31, 2023.

The increase was primarily the result of rising deposit costs coupled with higher salaries and benefits and technology expenses.

Interest Income and Expense

Net interest income of $189.8 million for the year ended December 31, 2023 increased $170 thousand, or 0.09%, from the year ended December 31, 2022, primarily as a result of loan growth throughout 2023 and the benefits of the impact of rising interest rates in 2023 resulting in greater income on variable-rate loans and new loan production, which was substantially offset by an increase in the Corporation's interest expense as a result of both (i) targeted interest-bearing deposit rate increases in ensure both deposit growth and retention, and (ii) a year-over-year increase in the average balance of short-term borrowings through the FHLB.

In addition, as previously mentioned, net interest income for the year ended December 31, 2023 included $1.4 million in nonrecurring interest income related primarily to payoffs in the syndicated loan portfolio.

Net interest income was $187.5 million for the year ended December 31, 2024, compared to $189.8 million for the year ended December 31, 2023.

Net interest margin was 3.41% and 3.63% for the years ended December 31, 2024 and 2023, respectively.

Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.39% and 3.61% for the years ended December 31, 2024,and 2023, respectively.

The yield on earning assets of 5.57% for the year ended December 31, 2023 increased 127 basis points from 4.30% for the year ended December 31, 2022, primarily as a result of loan growth, the net benefit of higher interest rates on both variable-rate loans and new loan production.

The yield on earning assets for the year ended December 31, 2024 was 5.88%, an increase of 31 basis points from December 31, 2023.

The increase was primarily a result of loan growth and the net benefit of higher interest rates on both variable-rate loans and new loan production.

The yield on earning assets for the year ended December 31, 2023 included the previously mentioned $1.4 million, or three basis points, in one-time syndicated loan interest income.

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The Corporation recorded a provision for credit losses of $9.2 million in 2024 compared to $6.0 million in 2023.

Included in the provision for credit losses for the year ended December 31, 2023 was $156 thousand expense related to the allowance for unfunded commitments compared to $603 thousand for the year ended December 31, 2022.

Included in the provision for credit losses for the year ended December 31, 2024 was a $185 thousand expense related to the allowance for unfunded commitments compared to $156 thousand for the year ended December 31, 2023.

The $3.2 million increase in the provision expense for the year ended December 31, 2024 compared to the year ended December 31, 2023, was primarily a result of the higher loan portfolio growth.

Net loan charge-offs were $7.5 million during the year ended December 31, 2024, compared to $3.4 million during the year ended December 31, 2023.

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Non-Interest Income

Total non-interest income was $33.3 million for the year ended December 31, 2023, representing a decrease of $1.5 million, or 4.12%, from the same period in 2022.

During the year ended December 31, 2023, Wealth and Asset Management fees increased $79 thousand, or 1.10%, compared to the year ended December 31, 2022, as the Corporation benefited from an increased number of wealth management relationships.

Other notable changes during the year ended December 31, 2023 included lower net realized gains on the sale of AFS debt securities, lower mortgage banking income from the reduced mortgage loan production volume in the higher-rate environment, lower level of full-year bank owned life insurance income and pass-through income from SBICs, partially offset by an increase in card processing and interchange income and a favorable variance in unrealized losses on equity securities.

Total non-interest income was $39.1 million for the year ended December 31, 2024, compared to $33.3 million for the year ended December 31, 2023.

Non-Interest Expense

For the year ended December 31, 2023, total non-interest expense was $145.3 million, reflecting an increase of $7.7 million, or 5.61%, from the year ended December 31, 2022, primarily as a result of higher occupancy costs combined with higher technology expenses.

In addition, other non-interest expenses increased primarily due to business generation related expenses and consulting fees.

Furthermore, full-year base-salary and related benefit increases, intended to account for inflationary merit increases and the addition of personnel to staff new offices in 2023, were substantially offset by an approximately $8.1 million reduction in incentive-related expenses.

For the year ended December 31, 2024, total non-interest expense was $150.0 million, compared to $145.3 million for the year ended December 31, 2023.

The increase of $4.7 million, or 3.21%, from the year ended December 31, 2023 was primarily a result of an increase in salaries and benefits and technology expenses.

Income Tax Expense

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Critical Accounting Policies and Estimates

The Corporation's consolidated financial statements are prepared in accordance with accounting principles GAAP and follow general practices within the industries in which the Corporation operates.

The Corporation's consolidated financial statements are prepared in accordance with GAAP and follow general practices within the industries in which the Corporation operates.

The most significant accounting policies used by the Corporation are presented in Note 1, "Summary of Significant Accounting Policies," to the consolidated financial statements.

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Fair value is discussed further in Note 1, "Summary of Significant Accounting Policies" and in Note 5, "Fair Value."

Certain intangible assets generated in connection with acquisitions are periodically assessed for impairment.

Goodwill is tested at least annually for impairment, and if certain events occur which indicate goodwill might be impaired between annual tests, goodwill must be tested when such events occur.

In making this assessment, the Corporation considers a number of factors including operating results, business plans, economic projections, anticipated future cash flows, current market data, stock price, etc.

There are inherent uncertainties related to these factors and the Corporation's judgment in applying them to the analysis of goodwill impairment.

Future changes in economic and operating conditions could result in goodwill impairment in subsequent periods.

Business Combinations and Goodwill

For mergers and acquisitions, the Corporation is required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their fair value.

The difference between consideration and the net fair value of assets acquired is recorded as goodwill.

Management uses significant estimates and assumptions to value such items, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values.

The allowance for credit losses for PSL and PCD loans is recognized within acquisition accounting.

Fair value adjustments are amortized or accreted into the income statement over the estimated life of the acquired assets or assumed liabilities.

The purchase date valuations and any subsequent adjustments determine the amount of goodwill recognized in connection with the merger or acquisition.

The use of different assumptions could produce significantly different valuation results, which could have material positive or negative effects on our results of operations.

The carrying value of goodwill recorded must be reviewed for impairment on an annual basis, as well as on an interim basis if events or changes indicate that the asset might be impaired.

An impairment loss must be recognized for any excess of carrying value over fair value of the goodwill.

The determination of fair values is based on valuations using management’s assumptions of future growth rates, future attrition, discount rates, multiples of earnings or other relevant factors.

In addition, the Corporation engages third party specialists to assist in the development of fair values.

Preliminary estimates of fair values may be adjusted for a period of time subsequent to the merger or acquisition date if new information is obtained about facts and circumstances that existed as of the merger or acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date.

Adjustments recorded during this period are recognized in the current reporting period.

Management uses various valuation methodologies to estimate the fair value of these assets and liabilities, and often involves a significant degree of judgment, particularly when liquid markets do not exist for the particular item being valued.

Examples of such items include loans, deposits, identifiable intangible assets, and certain other assets and liabilities.

Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the carrying value of assets, including goodwill and liabilities, which could result in impairment losses affecting our financial statements as a whole and our banking subsidiary in which the goodwill resides.

Non-GAAP Financial Measures

The following tables reconcile the non-GAAP financial measures to their most directly comparable measures under GAAP.

Twelve Months Ended

2025 December 31,

Calculation of net income available to common (GAAP):

Net income $ 66,131 $ 54,575

preferred stock dividends 4,302 4,302

Net income available to common shareholders $ 61,829 $ 50,273

Adjusted calculation of net income available to common (non-GAAP):

Net income available to common shareholders $ 61,829 $ 50,273

merger transaction related expenses, net of tax (non-GAAP) 11,600 —

Adjusted net income available to common shareholders (non-GAAP) $ 73,429 $ 50,273

Twelve Months Ended

2025 December 31,

Calculation of merger transaction related expenses, net of tax (non-GAAP) (1) :

Merger transaction related expenses - non deductible $ 3,234 $ —

Merger transaction related expenses - deductible 10,590 —

Statutory federal tax rate 21 % 21 %

Tax benefit (expense) of merger and integration costs (non-GAAP) 2,224 —

Merger transaction related expenses - deductible, net of tax 8,366 —

Merger transaction related expenses, net of tax (non-GAAP) $ 11,600 $ —

(1) Merger transaction related expenses represent legal, advisory, severance, technology conversion, and other expenses directly related to the ESSA acquisition.

Management believes exclusion of these non-recurring charges provides more meaningful period-over-period comparisons of operating performance.

Calculation of PPNR (non-GAAP):

Net interest income $ 242,036 $ 187,469

Non-interest income 40,165 39,114

Non-interest expense 190,881 150,002

PPNR (non-GAAP) $ 91,320 $ 76,581

Adjusted calculation of PPNR (non-GAAP):

Net interest income $ 242,036 $ 187,469

Non-interest income 40,165 39,114

Non-interest expense 190,881 150,002

Merger and integration costs (non-GAAP) 13,824

Adjusted PPNR (non-GAAP) $ 105,144 $ 76,581

(1) Management believes that this is an important metric as it illustrates the underlying performance of the Corporation, it enables investors and others to assess the Corporation's ability to generate capital to cover credit losses through the credit cycle and provides consistent reporting with a key metric used by bank regulatory agencies.

Twelve Months Ended

2025 December 31,

Basic earnings per common share computation:

Net income available to common shareholders $ 61,829 $ 50,273

net income available to common shareholders allocated to participating securities 476 388

Net income available to common shareholders allocated to common stock $ 61,353 $ 49,885

Weighted average common shares outstanding, including shares considered participating securities 24,755 20,993

average participating securities 169 155

Weighted average shares 24,586 20,838

Basic earnings per common share $ 2.50 $ 2.39

Diluted earnings per common share computation:

Net income available to common shareholders allocated to common stock $ 61,353 $ 49,885

Weighted average common shares outstanding for basic earnings per common share 24,586 20,838

dilutive effect of stock compensation 83 62

Weighted average shares and dilutive potential common shares 24,669 20,900

Diluted earnings per common share $ 2.49 $ 2.39

Adjusted basic earnings per common share computation (non-GAAP):

Net income available to common shareholders $ 61,829 $ 50,273

merger transaction related expenses, net of tax (non-GAAP) 11,600 —

net income available to common shareholders allocated to participating securities 476 388

Adjustment to net income available to common shareholders allocated to participating securities for merger transaction related expenses, net of tax (non-GAAP) 79 —

Adjusted net income available to common shareholders allocated to common stock (non-GAAP) $ 72,874 $ 49,885

Weighted average common shares outstanding, including shares considered participating securities 24,755 20,993

average participating securities 169 155

Weighted average shares 24,586 20,838

Adjusted basic earnings per common share (non-GAAP) $ 2.96 $ 2.39

Adjusted diluted earnings per common share computation (non-GAAP):

Adjusted net income available to common shareholders allocated to common stock (non-GAAP) $ 72,874 $ 49,885

Weighted average common shares outstanding for basic earnings per common share 24,586 20,838

dilutive effect of stock compensation 83 62

Weighted average shares and dilutive potential common shares 24,669 20,900

Adjusted diluted earnings per common share (non-GAAP) $ 2.95 $ 2.39

December 31, December 31,

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Net interest margin, fully tax equivalent basis (non-GAAP) 3.65 % 3.39 %

Calculation of PPNR (non-GAAP):

Net interest income $ 187,469 $ 189,829

Non-interest income 39,114 33,335

Non-interest expense 150,002 145,342

PPNR (non-GAAP) $ 76,581 $ 77,822

Calculation of net interest margin, excluding purchase accounting loan accretion (fully tax equivalent basis) (non-GAAP) (1) :

Net interest income (fully tax equivalent basis) (non-GAAP) $ 243,213 $ 188,424

purchase accounting loan accretion (6,578) 0

Adjusted net interest income (fully tax equivalent basis) (non-GAAP) $ 236,635 $ 188,424

Adjusted average total earning assets, net of mark to market (non-GAAP) $ 6,670,652 $ 5,552,274

Adjusted net interest margin, fully tax equivalent basis (non-GAAP) (annualized) 3.55 % 3.39 %

(1) Purchase accounting loan accretion represents income recognized on estimated fair value adjustments to acquired loans.

Calculation of efficiency ratio:

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Efficiency ratio (fully tax equivalent basis) (non-GAAP) 66.35 % 65.47 %

Adjusted calculation of efficiency ratio (fully tax equivalent basis) (non-GAAP):

Adjusted non-interest expense (non-GAAP) $ 189,033 $ 149,929

merger and integration costs (non-GAAP) 13,824 —

Adjusted non-interest expense (non-GAAP) $ 175,209 $ 149,929

Adjusted net revenue (fully tax equivalent basis) (non-GAAP) $ 284,916 $ 229,016

Adjusted efficiency ratio (fully tax equivalent basis) (non-GAAP) 61.49 % 65.47 %

Calculation of return on average tangible common equity (non-GAAP):

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Return on average tangible common equity (non-GAAP) 10.59 % 10.25 %

Adjusted calculation of return on average equity (non-GAAP):

Net income $ 66,131 $ 54,575

merger transaction related expenses, net of tax (non-GAAP) 11,600 —

Adjusted net income (non-GAAP) $ 77,731 $ 54,575

Average shareholders' equity $ 723,241 $ 592,550

Adjusted return on average equity (non-GAAP) (annualized) 10.75 % 9.21 %

Adjusted calculation of return on average tangible common equity (non-GAAP):

Net income available to common shareholders $ 61,829 $ 50,273

merger transaction related expenses, net of tax (non-GAAP) 11,600 —

Adjusted net income available to common shareholders $ 73,429 $ 50,273

Average tangible common shareholders' equity (non-GAAP) $ 583,908 $ 490,647

Adjusted return on average tangible common equity (non-GAAP) (annualized) 12.58 % 10.25 %

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 7. Management’s Discussion and Analysis