City National Bank
Annual Report 2018

Plain-text annual report

2018 ANNUAL REPORT Table of Contents Board of Directors and Executive Management 3 Message to Our Shareholders, Customers, Employees and Friends 4-5 Consolidated Financial Highlights CNB Bank Senior Management and Officer Listings ERIEBANK Senior Management and Officer Listings FCBank Senior Management and Officer Listings BankOnBuffalo Senior Management and Officer Listings Shareholder Information 6-7 8 9 10 10 11 2 CNB FINANCIAL CORPORATIONBoard of Directors and Executive Management CORPORATE OFFICERS, CNB FINANCIAL CORPORATION Joseph B. Bower, Jr. President & Chief Executive Officer Richard L. Greslick, Jr. Secretary Mary Ann Conaway Assistant Secretary Brian W. Wingard Treasurer & Principal Financial Officer BOARD OF DIRECTORS, CNB FINANCIAL CORPORATION AND CNB BANK Peter F. Smith Chairperson of the Board; Attorney at Law Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation; President and Chief Executive Officer, CNB Bank Richard L. Greslick, Jr. Secretary, CNB Financial Corporation; Senior Executive Vice President and Chief Support Officer, CNB Bank Robert W. Montler President and Chief Executive Officer, Lee Industries and Keystone Process Equipment Joel E. Peterson President, Clearfield Wholesale Paper EXECUTIVE OFFICERS, CNB BANK Joseph B. Bower, Jr. President and Chief Executive Officer Mark D. Breakey Senior Executive Vice President and Chief Risk Officer Joseph E. Dell, Jr. Senior Executive Vice President and Chief Commercial Banking Officer Richard L. Greslick, Jr. Senior Executive Vice President and Chief Support Officer Deborah Dick Pontzer Economic Development and Workforce Specialist, Office of Congressman Glenn Thompson Jeffrey S. Powell President, J.J. Powell, Inc. Nicholas N. Scott Vice President and Owner, Scott Enterprises Richard B. Seager President and Chief Executive Officer, Beacon Light Behavioral Health Systems Francis X. Straub, III Managing Officer and Director, St. Marys Pharmacy, Inc. and Bennetts Valley Pharmacy, Inc. Peter C. Varischetti President, Varischetti Holdings, LP Mary Ann Conaway Executive Vice President, Employee Experience Leanne D. Kassab Executive Vice President, Customer Experience Steven R. Shilling Executive Vice President, Private Client Solutions Brian W. Wingard Executive Vice President and Chief Financial Officer 3 2018 ANNUAL REPORT HIGHLIGHTSMessage to Our Shareholders, Customers, Employees and Friends: GROWTH! Growth was the theme of our year for 2018 at CNB Financial Corporation (CNB). CNB experienced solid performance and expansion in virtually every area. As you read through the financial report you will see many of the accomplishments that have been achieved in the past twelve months: • Earnings increased 41% • EPS increased 40% • Deposits increased 20% • Assets increased 16% • Loans increased 15% • BankOnBuffalo reached deposits of $300,000,000 in deposits in just two years • ERIEBANK expanding into Cleveland Last year, I mentioned the three key principles of our strategic plan: 1. Be the source of exceptional experiences 2. Foster an environment of leadership 3. Position for long term growth As we work toward achievement of these principles, our belief is that success will follow. Through hard work by our team, we’ve made significant progress in successfully implementing our plan. One example of this is CNB’s overall growth in customer households over the prior year. Household growth and retention are two of the key measures of our quality customer experience. Customer households grew year over year by 4,869, which equates to an 8% increase. Our normal growth rate is in the 2% to 3% range. Perhaps the best news surrounding the growth of CNB is that it has occurred in all of our markets across our four brands. A few notable events that occurred at each division are highlighted for you in the following paragraphs. CNB Bank has been serving its customers in central PA for over 152 years. In 2018, we named Chris Stott as President of the CNB Bank market to focus on the advancement of our local communities and our 20 offices that serve the area. Chris has been with the Bank since 1997 when he started our secondary mortgage operation. Most recently he directed our Private Banking group for all four divisions. A major accomplishment for CNB Bank and our entire corporation was the CNB Bank market surpassing the $1 Billion mark in deposits. This was a tremendous accomplishment, as our whole company focused on deposit gathering activities all year. ERIEBANK continues to lead the corporation in deposits per office, averaging over $81 million, with eleven locations across five counties. High average deposits in a branch leads to enhanced profitability. ERIEBANK has set the example for our corporation. Over the past few years, we have been evaluating entry into the Cleveland market and expanding ERIEBANK further around Lake Erie. We were excited to announce the hiring of Wesley Gillespie to lead this endeavor as our Regional President in late 2018. Wes comes to us with 26 years of experience in all aspects of banking and has spent most of his career in the Cleveland area. This new market will provide additional opportunities to grow our ERIEBANK division for years to come. 4 CNB FINANCIAL CORPORATION FCBank leads all divisions in profitability per dollar of funding. This achievement is even more surprising since it is by far our most competitive market. Our strategy to be a true community bank for each distinct market in central Ohio has resulted in many great partnerships with these municipalities. We participate in the major events within the towns and cities with both leadership from our team, and financial contributions and sponsorships. We were a major sponsor of the iceless skating rink in Bucyrus for the Candlelight Christmas event. In addition, we ran the 10 Fantastic Charities at Worthington’s Concert on the Green series, donating to 10 different charities including a grand prize of $3,500 to the Possibility Playground at Sutter Park Preschool. Commercially, we focus on smaller rehabs or new builds and commercial and industrial entities that are not being served by many of our competitors. We also avoid many of the large, highly competitive construction projects in central Ohio. This model provides us with steady, solid growth at profitable levels. BankOnBuffalo led our deposit gathering effortsin 2018 with over $282 million in growth. Loans also grew at a pace of 148% to $269 million. Commercial and industrial lending led the way with $97 million in new loans. Our Private Client group also experienced success with $43 million in assets under management and $55 million in loans. We entered Niagara County with a temporary site in Niagara Falls with ground breaking expected on our first BankOnBuffalo ground up build in March 2019. Erie and Niagara Counties have been very welcoming to our approach to banking and we are honored to be a part of these communities. We are excited about the future for CNB in all of our divisions. The bank-wide focus on the three key principles that were laid out in our strategic plan have been key to our success. Leadership at all levels in our two most mature divisions has helped us become one of the top two banks, by deposit size, in virtually all communities we serve. Our continued efforts with providing exceptional experiences will ensure we maintain our position in these divisions and improve our market share in the newer divisions. CNB’s future for opportunities and growth remains solid with BankOnBuffalo gaining traction, ERIEBANK’s entry to Cleveland and the robust community of Columbus for FCBank. Our move into these major metropolitan areas has begun to add more opportunities for customers, employees, directors, diversity of assets and more. I would like to recognize a long-term board member who recently retired. Denny Merrey retired after 28 years on the board, including 10 years serving as chairperson. Denny’s leadership through the Great Recession was invaluable in the boardroom as well as in our markets. Denny, on behalf of the Board, and the team, thank you for your commitment to CNB. We wish you the very best for many years to come. In closing, I want to extend a sincere thank you to all of our customers for continuing to partner with CNB for your financial solutions. I also want to thank our shareholders for your ownership and support of our vision and strategy. Finally, thank you to our employees for your leadership and collaboration to provide exceptional experiences to all. Joseph B. Bower, Jr. President and Chief Executive Officer 5 2018 ANNUAL REPORT HIGHLIGHTSConsolidated Financial Highlights (dollars in thousands, except per share data) FOR THE YEAR Interest and Dividend 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 PER SHARE DATA Net Income, Diluted Dividends Book Value 2018 $131,870 26,950 104,920 20,723 79,342 33,719 2017 % Change $108,874 17,365 91,509 21,435 70,037 23,860 21.1% 55.2% 14.7% (3.37%) 13.3% 41.3% 1.12% 13.46% 0.89% 9.97% 25.8% 35.0% $3,221,521 2,474,557 2,610,786 262,830 $2,768,773 2,145,959 2,167,815 243,910 16.4% 15.3% 20.4% 7.8% $2.21 0.67 17.28 $1.57 0.66 15.98 40.8% 1.5% 8.1% 6 CNB FINANCIAL CORPORATION Financials ASSET GROWTH (in thousands) 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 $2,189,213 $2,285,136 $2,573,136 $2,768,773 $3,221,521 LOANS, NET OF UNEARNED (in thousands) 2014 2015 2016 2017 2018 $1,355,289 $1,577,798 $1,873,536 $2,145,959 $2,474,557 NET INTEREST INCOME (in thousands) $74,595 $74,707 $81,287 $91,509 $104,920 EARNINGS PER SHARE 2014 2015 2016 2017 2018 $1.60 $1.54 $1.42 $1.57 $2.21 7 2018 ANNUAL REPORT HIGHLIGHTSCNB BANK SENIOR MANAGEMENT AND OFFICERS Christopher L. Stott Market President Jeffrey W. Alabran Senior Vice President, Commercial Banking R. Michael Love Vice President, Wealth & Asset Management Eileen F. Ryan Vice President, Director of Private Banking Glenn R. Pentz Senior Vice President, Wealth & Asset Management C. Brett Stewart Vice President, Commercial Banking Kay E. DellAntonio Assistant Vice President, Commercial Banking Denise J. Greene Assistant Vice President, Private Banking Heather Koptchak Assistant Vice President, Market Manager Craig C. Ball Vice President, Wealth & Asset Management Calvin R. Thomas, Jr. Vice President, Wealth & Asset Management Dustin A. Minarchick Assistant Vice President, Commercial Banking Leader Timothy D. Clapper Vice President, Commercial Banking Michael E. Haines Vice President, Commercial Banking Joseph H. Yaros Vice President, Commercial Banking Katie A. Penoyer Assistant Vice President, Treasury Services Vickie L. Baker Assistant Vice President, Community Office Manager Heather D. Serafini Assistant Vice President, Private Banking Eric A. Johnson Vice President, Wealth & Asset Management James C. Davidson Assistant Vice President, Private Banking Katie M. Whysong Assistant Vice President, Commercial Banking ADMINISTRATIVE SERVICES Yarrow L. Diamond Senior Vice President, Innovative Solutions Gregory M. Dixon Senior Vice President, Senior Credit Officer Cory K. Johnston Vice President, Controller Ruth Anne Ryan-Catalano Vice President, Retail Banking John H. Sette Vice President, Information Technology Susan M. Warrick Vice President, Operations Carla M. Higgins Vice President, Quality Assurance Manager Rebecca A. Coleman Assistant Vice President, Operations Officer Shannon L. Irwin Assistant Vice President, Employee Experience Paul A. McDermott Assistant Vice President, Facilities Amy B. Potter Assistant Vice President, Marketing B.J. Sterndale Assistant Vice President, Training Julie L. Martin Vice President, Commercial Services Andrew D. Franson Assistant Vice President, Wealth & Asset Operations Sherry L. Wallace Assistant Vice President, Mortgage Banking Robin W. Mink Vice President, Senior Treasury Product and Sales Team Leader Kylie L. Graham Assistant Vice President, Compliance Joel M. Zupich Assistant Vice President, Credit Administration CNB SECURITIES CORPORATION, A SUBSIDIARY OF CNB FINANCIAL CORPORATION BOARD OF DIRECTORS CORPORATE OFFICERS BOARD OF DIRECTORS CORPORATE OFFICERS Joseph B. Bower, Jr. Chairperson Joseph P. Strouse President Richard L. Greslick, Jr. Secretary Francis A. Goss Vice President Mark D. Breakey Director Halsey M. Ginther Director Glenn R. Pentz Director Brian W. Wingard President Evan R. Pizzuto Treasurer, Wilmington Trust SP Services, Inc. Evan R. Pizzuto Wilmington Trust SP Services, Inc. Elizabeth F. Bothner Secretary, Wilmington Trust SP Services, Inc. 8 CNB FINANCIAL CORPORATION ERIEBANK SENIOR MANAGEMENT AND OFFICERS David J. Zimmer President Wesley H. Gillespie Regional President Steven M. Cappellino Senior Vice President, Area Manager William L. DeLuca, Jr. Senior Vice President, Commercial Banking Steven Levy Senior Vice President, Commercial Banking David P. Bogardus Vice President, Area Manager Betsy C. Bort Vice President, Commercial Banking Travis J. Burch Vice President, ERIEBANK Investment Advisors Scott O. Calhoun Vice President, Commercial Banking Timothy A. Flenner Vice President, Area Manager Christine Hartog Vice President, Community Office Manager Katie J. Jones Vice President, Market Manager ERIEBANK BOARD OF ADVISORS Gary M. Alizzeo Esquire; Shafer Law Firm, P.C. Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation, CNB Bank Mark D. Breakey Senior Executive Vice President and Chief Risk Officer, CNB Bank Gary L. Clark Chief Executive Officer, Reed Manufacturing Company ERIEBANK OHIO ADVISORY BOARD James R. Miale Vice President, Commercial Banking Joshua P. Miller Vice President, ERIEBANK Investment Advisors Larry G. Morton, Jr. Vice President, ERIEBANK Investment Advisors Gregory A. Noon Vice President, Commercial Banking Benjamin V. Palazzo Vice President, Commercial Banking Timothy J. Roberts Vice President, Commercial Banking Paul D. Sallie Vice President, Private Banking John M. Schulze Vice President, Commercial Banking William J. Vitron, Jr. Vice President, ERIEBANK Investment Advisors Thomas J. Walker Vice President, Commercial Banking J. Allen Weaver Vice President, Commercial Banking Kelly S. Buck Assistant Vice President, Private Banking Chrystal M. Fairbanks Assistant Vice President, Commercial Banking/ Community Office Manage Jessica A. Figoli Assistant Vice President, Private Banking Joanne L. Fulton Assistant Vice President, Treasury Services Denise E. Gelofsack Assistant Vice President, Portfolio Manager Allison M. Hodas Assistant Vice President, Commercial Banking Bryan G. Kusich Assistant Vice President, Commercial Banking Barbara A. Macks Assistant Vice President, ERIEBANK Investment Advisors Theresa L. Swanson Assistant Vice President, Community Office Manager Mary J. Taormina Assistant Vice President, Community Office Manager John R. VanTassel Assistant Vice President, Treasury Services Abigail L. Williams Assistant Vice President, Community Office Manager Donald W. Damon Retired; Former ERIEBANK Senior Vice President Thomas M. Kennedy President, Professional Development Associates, Inc. Jane M. Earll Esquire; Retired Pennsylvania State Senator Jerome T. Osborne, III President, JTO, Inc. Richard L. Greslick, Jr. Senior Executive Vice President and Chief Support Officer, CNB Bank; Secretary, CNB Financial Corporation Charles “Boo” Hagerty President, Hamot Health Foundation Andrea T. Jeffress Physician, OB-GYN Associates of Erie, PC Thomas W. Reams Vice President, C. H. Reams & Associates, Inc. Nick Scott, Jr. Vice President & Owner, Scott Enterprises James E. Spoden Esquire, MacDonald Illig Jones & Britton, LLP David J. Zimmer Chairperson of the Board; President, ERIEBANK Dr. Lundon Albrecht Owner, Albrecht Family Dentistry; Dental Consultant, Coltene Whaledent Bryce A. Heinbaugh Managing Partner and Founder, IEN Risk Management Consultants Jennifer Brown Economic Development Specialist, CT Consultants Richard J. Kessler President, Society of Rehabilitation Richard T. Flenner, Jr. Retired; Former President, Lake National Bank Kevin D. Malecek Senior Development Officer, Lakeland Foundation and Lakeland Community College Shawn Neece Director, NMS Certified Public Accountants Joseph T. Svete President, Svete & McGee Company, LPA David J. Zimmer Chairperson of the Board; President, ERIEBANK 9 2018 ANNUAL REPORT HIGHLIGHTSFCBANK SENIOR MANAGEMENT AND OFFICERS Jenny L. Saunders President Linda K. Salters Vice President, Market Manager Neal S. Clark Senior Vice President, Commercial Banking Jack L. Trachtenberg Vice President, Private Banking Team Leader J. Ralph Parker Senior Vice President, Senior Credit Officer Ryan T. Connell Vice President, Financial Advisor Robert P. Linnabary Vice President, Commercial Banking Bernard J. McGuinness Vice President, Commercial Banking Kate McNeill Miller Vice President, Commercial Banking FCBANK BOARD OF ADVISORS Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation, CNB Bank Mark D. Breakey Senior Executive Vice President & Chief Risk Officer, CNB Bank Jennifer Carney Partner and Co-Founder, Carney Ranker Architects, Ltd. Annette D. Lester Assistant Vice President , Community Office Manager Jillian V. Price Assistant Vice President, Private Banking Sam P. Rawal Assistant Vice President, Private Banking Rory Reid Assistant Vice President, Community Office Manager Andrew C. Shuneson Assistant Vice President, Commercial Banking Dean J. Vande Water Vice President, Commercial Real Estate Team Leader Jeff P. Wallace Vice President, Treasury Services William R. Diehl Assistant Vice President, Senior Portfolio Manager Anthony D. Laughner Assistant Vice President, Community Office Manager Richard L. Greslick, Jr. Senior Executive Vice President & Chief Support Officer, CNB Bank; Secretary, CNB Financial Corporation Lawrence A. Morrison CPA and Partner, Kleshinski, Morrison & Morris, LLP Jason Pohl Partner and Co-Founder, Centric Consulting, LLC Jenny L. Saunders Chairperson of the Board, President, FCBank Sam Shim Board Member, Worthington City Schools Julie Young Human Resources Attorney, JMY Law, LLC BANK ON BUFFALO SENIOR MANAGEMENT AND OFFICERS Martin T. Griffith President Maria E. Barth Senior Vice President, Commercial Banking Rosanne Faraci Vice President, Credit Administration David G. Hawker Vice President, Commercial Banking David P. Paul Senior Vice President, Wealth & Asset Management Kathleen B. Kane Vice President, Community Office Manager Michael A. Anderson Vice President,Regional Retail Banking Administrator Gregory G. Emminger Vice President, Commercial Banking Kelly A. Navagh Vice President, Treasury Services Michael J. Noah Vice President, Commercial Banking BANK ON BUFFALO BOARD OF ADVISORS Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation, CNB Bank Mark D. Breakey Senior Executive Vice President & Chief Risk Officer, CNB Bank Joseph E. Dell, Jr. Senior Executive Vice President & Chief Commercial Banking Officer, CNB Bank Ellen E. Grant Weiss Institute Fellow, Former Deputy Mayor of the City of Buffalo Richard L. Greslick, Jr. Senior Executive Vice President & Chief Support Officer, CNB Bank; Secretary, CNB Financial Corporation Martin T. Griffith Chairperson of the Board, President, BankOnBuffalo Gerry Murak Principal and Founder, Murak & Associates, LLC; CEO and Board Chairman, SoPark Corporation; President, CEO, and Founder, Precision Scientific Instruments, Inc. 10 Annette A. Tomlin Vice President, Community Office Manager Joseph D. Becker Assistant Vice President, Private Banking James H. Cosgriff Assistant Vice President, Wealth Advisor Angela M. Indelicato-Matar Assistant Vice President, Commercial Banking James P. Reidy Assistant Vice President, Community Office Manager Michael Newman Owner and Executive Vice President, NOCO, Inc. Peter J. Romano, Jr. President and CEO, United Materials, LLC Stephen J. Schop Managing Partner, Schop, Powell & Associates Mark A. Tronconi Partner at Tronconi, Segarra & Associates CNB FINANCIAL CORPORATIONShareholder Information ANNUAL MEETING QUARTERLY SHARE DATA For information regarding the Corporation’s quarterly share data, please refer to Item 5 in the 2018 Form 10-K. MARKET MAKERS The following firms 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 Keefe, Bruyette & Woods, Inc. 787 Seventh Avenue, 4th Floor New York, NY 10019 (212) 887-7777 The Annual Meeting of the Shareholders of CNB Financial Corporation will be held Tuesday, April 16, 2019 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 (800) 492-3221 STOCK TRANSFER AGENT & REGISTRAR American Stock Transfer & Trust Company, LLC 6201 15th Avenue Brooklyn, NY 11219 (800) 937-5449 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 11 2018 ANNUAL REPORT HIGHLIGHTSBacked by the full faith and credit of the United States government Each depositor insured to at least $100,000 FDIC Federal Deposit Insurance Corporation•www.fdic.gov The common stock of the Corporation trades on the NASDAQ Global Select Market under the symbol CCNE. 

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