City National Bank
Annual Report 2013

Plain-text annual report

ANNUAL 2 REPORT 0 1 3 F O E L B A T CONTENTS Consolidated Financial Highlights Message to the Shareholders Executive Management and Board of Directors Officers Shareholder Information 4 5 8 9 12 3 CNB FINANCIAL CORPORATION ANNUAL REPORT HIGHLIGHTS2013 r e p ) a t a d e r a h s s t h g , s d n a s u o h t t p e c x e n i ( S T H G I L H G i l I I H L A C N A N h g H i I L O S N O C D E T A D F I FOR THE YEAR Interest Income Interest Expense Net Interest Income Non-interest Income Non-interest Expense Net Income Net Income Return on: Average Assets Average Equity AT YEAR END Assets Loans, net of unearned Deposits Shareholders’ Equity Trust Assets Under Management (at market value) PER SHARE DATA Net Income, diluted Dividends Book Value Market Value 4 2013 $71,416 12,212 59,204 13,766 43,813 16,679 2012 $68,129 14,920 53,209 12,664 35,945 17,136 % Change 4.8% ( 18.2%) 11.3% 8.7% 21.9% (2.7%) 0.88% 11.38% 1.00% 12.17% (12.0%) (6.5%) $2,131,289 $1,773,079 1,295,363 1,835,314 164,911 422,366 927,824 1,485,003 145,364 387,446 20.2% 39.6% 23.6% 13.4% 9.0% $1.29 0.66 11.43 19.00 $1.38 0.66 11.65 16.38 (6.5%) 0.0% (1.9%) 16.0% MESSAGE SHAREHOLDERS T O T H E To Our Shareholders, Customers, Employees & Friends: 2013 marked another first for CNB Financial Corporation. CNB is now operating in the state of Ohio as a result of its merger with The Farmers Citizens Bank and its parent company, FC Banc Corp., headquartered in Bucyrus, Ohio, on October 11, 2013. CNB added $360 million in assets and eight offices located in two distinct markets. The new markets will provide fresh opportunities for agricultural lending in the rural market, as well as business development opportunities in our first major metropolitan area, Co- lumbus, Ohio. CNB’s strategy has been to grow organically in our markets with quality bankers from that market or to create a de novo presence in markets that fit our busi- ness model. This merger provided an opportunity to gain entry in Ohio and leverage the expertise of the employees of The Farmers Citizens Bank, now FCBank, to continue growing organically in the new markets. In 2013, excluding the acquired assets and liabilities, loans for CNB grew 13% while deposits did not change significantly from 2012. Pre-tax net income, excluding merger related expenses and gain on sale of securities, increased 13%, an indication that the growth in core earnings remains strong, with even greater opportunities for growth as a result of the merger. Earnings for 2013 were positive even with the merger costs included. CNB’s return on average equity was 11.38% and earnings per share was $1.29. As previously an- nounced, the merger is expected to be accretive to earnings during 2014. In addition, the change in asset composition from investments to loans should provide us with a much improved loan to deposit ratio and an enhanced net interest margin and earnings. 5 CNB FINANCIAL CORPORATION ANNUAL REPORT HIGHLIGHTS2013 l i s a c n a n F i 6 ASSET GROWTH (in thousands) 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2009 $1,161,591 2010 2011 2012 2013 $1,413,511 $1,602,207 $1,773,079 $2,131,289 DEPOSIT GROWTH (in thousands) 900 950 1,000 1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400 1,450 1,500 1,600 1,700 1,800 $956,858 $1,162,868 2009 2010 2011 2012 2013 $1,353,851 $1,485,003 $1,835,314 NET INTEREST INCOME (in thousands) $ 34 $ 36 $ 38 $ 40 $ 42 $ 44 $ 46 $ 48 $ 50 $ 52 $ 54 $ 56 $ 58 $ 60 $37,402 $42,091 2009 2010 2011 2012 2013 $48,133 $53,209 $59,204 EARNINGS PER SHARE (fully diluted) $.95 1.00 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.50 $1.06 2009 $0.98 2010 2011 2012 2013 $1.23 $1.38 $1.29 Message to the Shareholders continued… A key focus for all financial companies is the quality of their assets. CNB has a long history of high asset quality, with its loan metrics continuing to be strong and improv- ing. CNB’s ratio of non-performing assets to total assets improved to 0.61% in 2013 from 0.85% in 2012 and its charge-offs as a percentage of average loans at decreased from 0.55% in 2012 to 0.38% in 2013. The loan portfolio mix of Commercial & Indus- trial, Commercial Real Estate and Residential Real Estate provides for good diversity in the portfolio. With the new markets and a chance to grow the agricultural portfolio, the lending portfolio diversification will also be enhanced by greater geographical di- versity. The merger with The Farmers Citizens Bank was our major highlight for 2013 but was not our only significant event. Throughout 2013, the major expansion of our main office in Clearfield has been underway. At the writing of last year’s letter, we expected to open the facility in the fourth quarter of 2013. Although the date of the opening was delayed until March of 2014, the expanded office will be fully operational at the time of this year’s annual meeting. The office will have the open floor plan first used in ERIE- BANK which provides the customer with a more inviting approach to banking. During 2013, we also upgraded our Indiana, PA loan production office to a full service location in order to better serve that market. Finally, Holiday Financial Services opened a new location in Indiana, PA in 2013 while relocating both the Ebensburg and Bellefonte stores to locations that are more convenient to our customers. Charles H. Reams retired from our Board of Directors in January 2014. Chuck served for seven years as a Director of the Corporation and CNB Bank. Chuck was very in- strumental in CNB gaining entry in the Erie market and with the formation and success of ERIEBANK. Chuck played a crucial role on our ERIEBANK advisory board since its founding and will remain a member of the advisory board. On behalf of the Board and Management, I would like to thank Chuck for his years of service and wish him well in all of his future endeavors. As always, we are proud to report CNB Financial Corporation’s 2013 results. We thank you for your continued ownership in CNB and look forward to another prosperous year in 2014. Joseph B. Bower, Jr. President and Chief Executive Officer 7 CNB FINANCIAL CORPORATION ANNUAL REPORT HIGHLIGHTS2013EXECUTIVE MANAGEMENT & BOARD OF DIRECTORS Corporate Officers, CNB Financial Corporation Joseph B. Bower, Jr. President & Chief Executive Officer Brian W. Wingard Treasurer & Principal Financial Officer Richard L. Greslick, Jr. Secretary Vincent C. Turiano Assistant Secretary Executive Officers, CNB Bank Joseph B. Bower, Jr. President & Chief Executive Officer Mark D. Breakey Executive Vice President & Chief Credit Officer Richard L. Greslick, Jr. Executive Vice President, Chief Operating Officer Brian W. Wingard Senior Vice President & Chief Financial Officer Mary Ann Conaway Senior Vice President, Human Resources Joseph E. Dell, Jr. Senior Vice President & Chief Lending Officer Leanne D. Kassab Senior Vice President, Marketing Vincent C. Turiano Senior Vice President, Operations Board of Directors CNB Financial Corporation and CNB Bank Dennis L. Merrey Chairman of the Board Retired, Formerly President, Clearfield Powdered Metals, Inc. (Manufacturer) Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation; President and Chief Executive Officer, CNB Bank William F. Falger Retired, Formerly President and Chief Executive Officer, CNB Financial Corporation, CNB Bank Richard L. Greslick, Jr. Executive Vice President & Chief Operating Officer, CNB Bank; Secretary, CNB Financial Corporation Robert D. Hord President of Hord Livestock Company, Inc. (Agriculture) Nick Scott, Jr. Vice President & Owner, Scott Enterprises (Hospitality Industry) Richard B. Seager President and Chief Executive Officer, Beacon Light Behavioral Health Systems (Health Services) Peter F. Smith Attorney at Law DIRECTOR EMERITUS L. E. Soult, Jr. Robert W. Montler President & Chief Executive Officer, Lee Industries and Keystone Process Equipment (Manufacturer) Joel E. Peterson President, Clearfield Wholesale Paper (Wholesaler) Deborah Dick Pontzer Economic Development and Workforce Specialist, Office of Congressman Glenn Thompson Jeffrey S. Powell President, J.J. Powell, Inc. (Petroleum Distributor) James B. Ryan Retired, Formerly Vice President of Sales, Marketing, Windfall Products, Inc. (Manufacturer) 8 OFFICERS Susan B. Kurtz Customer Service Officer Dennis J. Sloppy Information Systems Officer B.J. Sterndale Training Officer Brenda L. Terry Banking Officer Shannon L. Irwin Assistant Vice President, Human Resources Carolyn B. Smeal Assistant Vice President, Operations Becky Coleman Operations Officer Carol J. Cossick Assistant Controller Thomas W. Grice Network Administration Officer Denise J. Greene Community Office Manager, DuBois Office Susan J. Shimmel Community Office Manager, Old Town Road Office, Clearfield Lynette Hebel Community Office Manager, Karthaus and Kylertown Offices Pam Synder Community Office Manager, Kane Office Caroline Henry Community Office Manager, Presqueisle Street Office, Philipsburg Douglas M. Shaffer Community Office Manager, Punxsutawney Office Lori D. Shimel Community Office Manager, Houtzdale and Madera Offices Larry A. Putt Banking Officer, Clearfield Nadine J. Rodgers Banking Officer, Indiana Mary Ann Roney Banking Officer, Bradford Gregory R. Williams Banking Officer, Clearfield Michael C. Sutika Vice President, Commercial Banking, Clearfield Eileen F. Ryan Assistant Vice President, Mortgage Lending Joseph H. Yaros Vice President, Commercial Banking, Bradford David W. Ogden Vice President, Credit Administration Christopher L. Stott Vice President, Retail Lending C. Brett Stewart Assistant Vice President, Commercial Banking, Indiana Russell Daniels Assistant Commercial Lending Officer, St. Marys James C. Davidson Mortgage Lending Officer, Philipsburg Autumn F. Farley Commercial Loan Portfolio Manager & Support Lending Officer Cory Johnston Credit Administration Officer Paul A. McDermott Collections Officer Calvin R. Thomas, Jr. Vice President, Wealth & Asset Management Shawn Amblod Assistant Vice President, Wealth & Asset Management Eric A. Johnson Assistant Vice President, Wealth & Asset Management R. Michael Love Assistant Vice President, Wealth & Asset Management Administrative Services Timothy A. Bracken Vice President, Controller Edward H. Proud Vice President, Information Systems Susan M. Warrick Vice President, Operations Thomas J. Ammerman, Jr. Assistant Vice President, Security Donna J. Collins Assistant Vice President, Compliance Branch Division Ruth Anne Ryan-Catalano Vice President, Regional Branch Administration, Industrial Park Road Office, Clearfield Vickie L. Baker Assistant Vice President, Regional Branch Administration, Bradford Main Street Office Mary A. Baker Assistant Vice President, Northern Cambria Office Lori Curtis Community Office Manager, Plaza Office, Philipsburg Lending Division Jeffrey W. Alabran Senior Vice President, Commercial Banking, Indiana Gregory M. Dixon Vice President, Commercial Banking, Clearfield Michael E. Haines Vice President, Commercial Banking, St. Marys Robin L. Hay Vice President, Commercial Banking, Clearfield Karen R. Pfingstler Vice President, Commercial Banking, DuBois Wealth & Asset Management Services Craig C. Ball Vice President, Wealth & Asset Management Glenn R. Pentz Vice President, Wealth & Asset Management Andrew Roman Vice President, Wealth & Asset Management 9 CNB FINANCIAL CORPORATION ANNUAL REPORT HIGHLIGHTS2013 OFFICERS & AFFILIATES ERIEBANK, a Division of CNB Bank David J. Zimmer President Scott Bailey Senior Vice President, ERIEBANK Investment Advisors Steven M. Cappellino Senior Vice President, Commercial Banking, Meadville Office Donald W. Damon Senior Vice President, Private Banking William L. DeLuca, Jr. Senior Vice President, Commercial Banking Betsy Bort Vice President, Commercial Banking Scott O. Calhoun Vice President, Commercial Banking Kristen L. Ludwig Vice President, Commercial Banking Larry Morton Vice President, ERIEBANK Investment Advisors John M. Schulze Vice President, Commercial Banking Theresa L. Swanson Community Office Manager, Warren Office Mary J. Taormina Community Office Manager, Meadville Office Abby L. Williams Community Office Manager, Interchange Office Kelly S. Buck Private Banking Officer Allison Hodas Cash Management Officer Julie L. Martin Operations Officer James Miale Commercial Lending Officer Timothy Roberts Commercial Lending Officer William J. Vitron, Jr. Vice President, ERIEBANK Investment Advisors Carla M. LaBoda Assistant Vice President, Commercial Banking Gregory Noon Assistant Vice President, Commercial Banking, Warren Paul D. Sallie Assistant Vice President, Private Banking Katie J. Jones Regional Retail Administrator, Community Office Manager, Harborcreek Office Andrea G. Carr Community Office Manager, Downtown Erie Office Debra Masone Community Office Manager, Vernon Township Office Helicia E. Sonney Community Office Manager, Asbury Road Office ERIEBANK Regional Board of Directors Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation, CNB Bank Charles Hagerty President, Hamot Health Foundation (Health Services) Mark D. Breakey Executive Vice President & Chief Credit Officer, CNB Bank Thomas Kennedy President, Professional Development Associates, Inc. (Real Estate developer) Gary L. Clark Vice President, Chief Financial Officer and Chief Administrative Officer, Snap-tite, Inc. (Manufacturer) David K. Galey Treasurer, Chief Financial Officer, Greenleaf Corporation (Manufacturer) James E. Gehrlein Chief Financial Officer, Sisters of St. Joseph of NW PA (Finance) Richard L. Greslick, Jr. Executive Vice President and Chief Operating Officer, CNB Bank; Secretary, CNB Financial Corporation Charles H. Reams President, C. H. Reams & Associates, Inc. (Insurance) Nick Scott, Jr. Vice President & Owner, Scott Enterprises (Hospitality Industry) James E. Spoden Esquire, MacDonald Illig Jones & Britton, LLP (Law office) David J. Zimmer President, ERIEBANK 10 FCBank, a Division of CNB Bank J. Andrew Dale Interim President Louis J. Torchio Senior Vice President, Private Banking Terrance E. Hamm Vice President, Commercial Banking Donna M. Conley Assistant Vice President, Lending Elizabeth M. Ricketts Assistant Vice President, Regional Branch Administration Annette D. Lester Community Office Manager, Cardington Office Clara J. McClung Community Office Manager, Worthington Office FCBank, Regional Board of Directors Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation, CNB Bank Mark D. Breakey Executive Vice President & Chief Credt Officer, CNB Bank David G. Dostal President, The Auck Dostal Agency, Inc., Vice President, ADM Benefit Plans, Inc. (Insurance) Patrick J. Drouhard Retired, Superintentdent, Cardington- Lincoln School District (Education) Brian A. McFarland Community Office Manager, Upper Arlington Office Elaine M. Wilson Community Office Manager, Fredericktown Office Teri A. Slate Community Office Manager, Shiloh Office Brian C. Bach Agriculture Loan Officer Jared Butler Network Adminstrator, Facilities Officer William R. Diehl Banking Officer, Dublin Office Jennifer S. Gingery Operations Officer Scott Everhart President and CEO, Everhart Advisors (Investments) Richard L. Greslick, Jr. Executive Vice President and Chief Operating Officer, CNB Bank; Secretary, CNB Financial Corporation Robert D. Hord President, Hord Livestock, Inc. (Agriculture) Michelle P. Muchow Banking Officer, Bucryus North Office Toni M. Ridge Banking Officer, Bucyrus North Office Jason M. Shade Banking Officer, Bucyrus North Office Travis M. Smith Operations Officer Ashley Snyder Agricultural Lending Officer Patrick Hord CEO, Hord Livestock, Inc. (Agriculture) Lawrence A. Morrison CPA and Partner, Kleshinski, Morrison & Morris, LLP (Accounting) J. Andrew Dale Interim President Holiday Financial Services Corporation, a Subsidiary of CNB Financial Corporation BOARD OF DIRECTORS Joseph B. Bower, Jr. Chairman Richard L. Greslick, Jr. Secretary Christopher L. Stott Director Brian W. Wingard Director CORPORATE OFFICERS Christopher L. Stott Chairman Joseph P. Strouse President CNB Securities Corporation, a Subsidiary of CNB Financial Corporation, Wilmington, DE BOARD OF DIRECTORS CORPORATE OFFICERS Timothy A. Bracken Director Glenn R. Pentz Director Donald R. McLamb, Jr. Wilmington Trust SP Services, Inc. Brian W. Wingard President Donald R. McLamb, Jr. Treasurer, Wilmington Trust SP Services, Inc. Elizabeth F. Bothner Secretary, Wilmington Trust SP Services, Inc 11 CNB FINANCIAL CORPORATION ANNUAL REPORT HIGHLIGHTS2013SHAREHOLDER INFORMATION Annual Meeting Quarterly Share Data For information regarding the Corporation’s quarterly share data, please refer to Item 5 in the 2013 Form 10-K. Market Makers The following firm has chosen to make a market in the stock of the Corporation. Inquiries concerning their services should be directed to: Boenning & Scattergood, Inc. 1700 Market Street, Ste 1420 Philadelphia, PA 19103 (800) 842-8928 The Annual Meeting of the Shareholders of CNB Financial Corporation will be held Tuesday, April 15, 2014 at 2:00 p.m. at the Corporation’s Headquarters in Clearfield, PA. Corporate Address CNB Financial Corporation 1 S. Second Street P.O. Box 42 Clearfield, PA 16830 (814) 765-9621 Stock Transfer Agent & Registrar Registrar and Transfer Company 10 Commerce Drive Cranford, NJ 07016 (800) 368-5948 www.rtco.com Form 10-K Shareholders may obtain a copy of the Annual Report to the Securities and Exchange Commission on Form 10-K by writing to: CNB Financial Corporation 1 S. Second Street P.O. Box 42 Clearfield, PA 16830 ATTN: Shareholder Relations 12  SHAREHOLDER INFORMATION Corporate Profile ERIEBANK CNB Financial Corporation is a leader in providing integrated financial solutions which create value for both consumers and businesses. These solutions encompass checking, savings, time and deposit accounts, Private Banking, loans and lines of credit (real estate, commercial, industrial, residential and consumer), credit cards, cash management, on- line banking, mobile banking, merchant credit card processing, on-site banker and accounts receiv- able handling. In addition, the Corporation provides wealth and asset management services, retirement plans and other employee benefit plans. CNB Bank A subsidiary of CNB Financial Corporation, CNB is a regional independent community bank in North Central Pennsylvania with approximately 400 em- ployees who make customer service more respon- sive and reliable. For over 145 years, the Bank has strived to be more customer-driven than its compet- itors and to build long-term customer relationships by being reliable and competitively priced. CNB continually seeks innovative ways to execute a personal, quality-driven customer service strategy and prides itself being first-to-market for many of these innovations. To satisfy customers’ financial needs and expectations, it offers a variety of delivery channels, which includes 22 full-service offices, 19 ATMs, telephone banking (1-866-224-7314), Internet banking (www.bankcnb.com), mobile banking, and a centralized customer service center (1-800-492- 3221). Headquartered in Erie, Pennsylvania, ERIEBANK is a division of CNB Bank. Presently, there are a total of seven full service offices which house its com- mercial, retail and Private Banking divisions. Four of those offices are in Erie, two in Meadville, and one in Warren, Pennsylvania. In addition, ERIEBANK Invest- ment Advisors provides wealth and asset manage- ment services, retirement plans and other employee benefit plans. FCBANK FCBank, a division of CNB Bank, is headquartered in Bucyrus, Ohio with eight full service offices in the communties of Bucyrus, Shiloh, Mt. Hope, Carding- ton, Fredericktown, Worthington and Upper Arling- ton, and one loan production office in Dublin, Ohio. FCBank is driven by a strong focus on meeting the financial heeds of businesses and individuals in a way only a community bank can deliver. FCBank of- fers commercial, retail, and Private Banking services. Holiday Financial Services Holiday Financial Services, a subsidiary of CNB Financial Corporation, is a consumer loan company, currently has eleven conveniently located offices in State College, Bradford, Clearfield, Hollidays- burg, Erie, Northern Cambria, Ridgway, Johnstown, Ebensburg, DuBois and Indiana, Pennsylvania. 13 CNB FINANCIAL CORPORATION ANNUAL REPORT HIGHLIGHTS2013 The common stock of the Corporation trades on the NASDAQ National Market under the symbol CCNE. 14 CNB Financial Corporation 1 South Second Street – P.O. Box 42 Clearfield, PA 16830 800-492-3221 www.BankCNB.com 

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