City National Bank
Annual Report 2019

Plain-text annual report

2019 ANNUAL R E P O R T TABLE OF CONTENTS Board of Directors and Executive Management 3 Message to the Shareholders 4-5 Consolidated Financial Highlights 6-7 CNB Bank Senior Management and Officer Listings 8 ERIEBANK Senior Management, Officer and Advisory Board Listings 9 FCBank Senior Management, Officer and Advisory Board Listings 10 BankOnBuffalo Senior Management, Officer and Advisory Board Listings 10 Shareholder Information 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 Tito L. Lima Treasurer & Principal Financial Officer BOARD OF DIRECTORS, CNB FINANCIAL CORPORATION AND CNB BANK Peter F. Smith Chairperson of the Board; Attorney at Law Jeffrey S. Powell President, J.J. Powell, Inc. 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 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. Joel E. Peterson President, Clearfield Wholesale Paper Peter C. Varischetti President, Varischetti Holdings, LP Deborah Dick Pontzer Economic Development and Workforce Specialist, Office of Congressman Glenn Thompson EXECUTIVE OFFICERS, CNB BANK Joseph B. Bower, Jr. President and Chief Executive Officer Joseph E. Dell, Jr. Senior Executive Vice President, Chief Commercial Banking Officer Richard L. Greslick, Jr. Senior Executive Vice President, Chief Support Officer Mary Ann Conaway Executive Vice President, Employee Experience Gregory M. Dixon Executive Vice President, Chief Risk Officer Julie Young Human Resources Attorney, JMY Law, LLC Martin T. Griffith Executive Vice President, Community Banking; President BankOnBuffalo Leanne D. Kassab Executive Vice President, Customer Experience Tito L. Lima Executive Vice President, Chief Financial Officer Steven R. Shilling Executive Vice President, Private Client Solutions 3 2019 ANNUAL REPORT HIGHLIGHTSMESSAGE TO OUR SHAREHOLDERS, CUSTOMERS, EMPLOYEES AND FRIENDS It is my pleasure to share CNB Financial Corporation 2019 highlights with you. The expansion of CNB’s customer base was significant despite not actively expanding our market area. Our households served increased 7.8% to 68,892 households, which contributed to asset growth of 17%. Other financial highlights for the year include: Earnings Growth EPS Growth Deposit Growth Loan Growth 18.9% 19.0% 18.8% 13.3% Return on Average Tangible Common Equity 16.28% Loan to Deposit Ratio Improved To 90.38% The Corporation strives to achieve, and maintain, financial performance levels in the top quartile of our peer group in order to provide a positive return to shareholders. While this measure is critical to long-term success and a safe, sound financial institution, management and the Board believe that other, non-financial measures are equally important. CNB’s roots are deep within the communities we serve. Their success and well-being are critical to our organization and to our employees. We believe in a workforce that enjoys what they do every day. CNB not only listens to their employees, we also take measures to minimize stress points in the lives of our team. Our team is extremely important to our success as satisfied employees provide better service to our customers. CNB provides each employee with the opportunity for a solid foundation for retirement with matching and profit sharing contribution plans in place. In addition, our employees have access to expert financial planning advice through our Private Client Solutions group. Beyond financial wellness, CNB also provides health and wellness programs, online/telephone doctor assistance, a confidential Employee Assistance Program, and a robust healthcare plan that includes premium-free vision and dental. We recently addressed several additional topics that are key to a healthy family environment. By listening to feedback from employees, we improved our position on paternity leave, adoption leave and student loan payment assistance. We have reduced travel time by better utilizing technology, and improved educational opportunities throughout the Bank. Most job functions have training tracks designed to help team members develop their knowledge, understand the importance of collaboration and improve communications. In 2015, we developed the CNB Leadership Institute to build depth in our organization and create a better leadership succession track. This program continues to evolve and, to date, has graduated 38 individuals, many whom have already made great advancements here at CNB. Community Involvement took on an extra meaning this year when a group from the last CNB Leadership class developed an initiative inspired by Dr. Martin Luther King, Jr. The group developed a program for CNB to “Take the Day On” instead of taking Martin Luther King Day off. The event was a huge success that resulted in the support of 44 non-profit organizations by 382 CNB team members, from across four bank divisions in three states. This community outreach event is in addition to the continued leadership, volunteer hours and financial support that our 605 employees provide to local non-profits, youth programs and governmental organizations all year long. 4 CNB FINANCIAL CORPORATION A few years ago, CNB began taking on several initiatives to reduce emissions and electric usage. Our main office now features equipment that minimizes the use of lighting, heat and air conditioning not only during overnight hours, but also during working hours. While efforts have significantly reduced our usage of electricity, we are not finished. Over the next few years, we will install this technology into all of our locations. We are also looking into ways to reduce the power needs for all of our technology, which will require assistance from our major vendors and creative thinking. Opening our latest version of a state of the art financial center in Niagara Falls, NY was another of our highlights. This new BankOnBuffalo office furthers our open floor plan design which began in ERIEBANK 14 years ago. This new office is even more welcoming, offering coffee, wireless functionality for both our staff and our customers along with comfortable areas to relax during their visit at our office. The office also features enhanced teller machines both inside and at the drive thru. The addition of these machines provides a more personal touch at the drive thru and the convenience of expanded hours of service. On December 18, 2019, CNB announced the acquisition of Bank of Akron. This will add six new BankOnBuffalo locations along with a talented team of bankers to our rapidly expanding presence in the western NY market area. In order to support our growing franchise, the Main Office expansion project was announced. The new building plan calls for additional space for up to 70 more employees. This project will enable CNB to continue its growth while providing back office infrastructure in areas of compliance, account and loan servicing, eSolutions, marketing, information technology, and security. We are happy to maintain such a large workforce in our hometown. Clearfield has been very supportive of our bank and our growth throughout the 155 years in business. I want to welcome Julie Young to the CNB Financial Corporation and the CNB Bank Boards. Julie comes to CNB from Columbus, OH, where she is also a member of our FCBank Advisory Board. She brings a breadth of knowledge to the Board with her experience in employment law, both at the federal and state levels. She is a lifelong resident of the Columbus area and provides us with perspective from a large, rapidly growing metropolitan area. Management and the Board look forward to working with Julie. Finally, I want to thank you for your continued trust in CNB to provide you with a beneficial relationship as a customer, shareholder or employee. We will continue to work hard to maintain that trust through the successful integration of personal relationships and innovative solutions to provide exceptional experiences for our customers and employees alike. Joseph B. Bower, Jr. President and Chief Executive Officer 5 2019 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 2019 $155,728 39,530 116,198 25,975 87,508 40,081 2018 % Change $131,870 26,950 104,920 20,723 79,342 33,719 18.1% 46.7% 10.7% 25.3% 10.3% 18.9% 1.17% 14.05% 1.12% 13.46% 4.5% 4.4% $3,763,659 2,804,035 3,102,327 304,966 $3,221,521 2,474,557 2,610,786 262,830 16.8% 13.3% 18.8% 16.0% $2.63 0.68 20.00 $2.21 0.67 17.28 19.0% 1.5% 15.7% 6 CNB FINANCIAL CORPORATION CONSOLIDATED FINANCIAL HIGHLIGHTS (dollars in thousands, except per share data) ASSET GROWTH (in thousands) 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 $2,285,136 $2,573,136 $2,768,773 $3,221,521 $3,763,659 LOANS, NET OF UNEARNED (in thousands) $1,577,798 $1,873,536 $2,145,959 $2,474,557 $2,804,035 2015 2016 2017 2018 2019 NET INTEREST INCOME (in thousands) $74,707 $81,287 $91,509 $104,920 $116,198 EARNINGS PER SHARE 2015 2016 2017 2018 2019 $1.54 $1.42 $1.57 $2.21 $2.63 7 2019 ANNUAL REPORT HIGHLIGHTSCNB BANK SENIOR MANAGEMENT AND OFFICERS Christopher L. Stott Senior Vice President, Market President Jeffrey W. Alabran Senior Vice President, Commercial Banking Yarrow L. Diamond Senior Vice President, Innovative Solutions Robin W. Mink Senior Vice President, Senior Treasury Management Director Glenn R. Pentz Senior Vice President, Investment Advisor Craig C. Ball Vice President, Wealth Advisor Timothy D. Clapper Vice President, Commercial Banking Rosanne Faraci Vice President, Credit Administration Kylie L. Graham Vice President, Support Joseph K. Haines Vice President, Commercial Banking Michael E. Haines Vice President, Commercial Banking Carla M. Higgins Vice President, Customer Experience/Quality Assurance Eric A. Johnson Vice President, Wealth & Asset Management Team Leader Cory K. Johnston Vice President, Controller R. Michael Love Vice President, Wealth Advisor Heather J. Koptchak Vice President, Employee Administration Julie L. Martin Vice President, Commercial Services Kay E. DellAntonio Assistant Vice President, Commercial Banking William R. Diehl Assistant Vice President, Senior Portfolio Manager Dustin A. Minarchick Vice President, Commercial Banking Leader Andrew D. Franson Assistant Vice President, Wealth & Asset Operations Amy B. Potter Vice President, Customer Experience Eileen F. Ryan Vice President, Director of Private Banking Ruth Anne Ryan-Catalano Vice President, Retail Banking John M. Schulze Vice President, Director of Participations and Syndications John H. Sette Vice President, Information Technology Kelly J. Sheffield Vice President, BSA Officer C. Brett Stewart Vice President, Commercial Banking Susan M. Warrick Vice President, Operations Katie M. Whysong Vice President, Commercial Banking Joseph H. Yaros Vice President, Commercial Banking Vickie L. Baker Assistant Vice President, Community Office Manager Rebecca A. Coleman Assistant Vice President, Operations Officer James C. Davidson Assistant Vice President, Private Banking Denise E. Gelofsack Assistant Vice President, Senior Portfolio Manager Shannon L. Irwin Assistant Vice President, Employee Experience Darryl P. Koch Assistant Vice President, Information Security Officer Paul A. McDermott Assistant Vice President, Facilities Katie A. Penoyer Assistant Vice President, Treasury Services Heather D. Serafini Assistant Vice President, Private Banking B.J. Sterndale Assistant Vice President, Training Dorthy M. Turner Assistant Vice President, Wealth Advisor Sherry L. Wallace Assistant Vice President, Mortgage Banking Eric E. White Assistant Vice President, Market Manager Carrie A. Wood Assistant Vice President, Marketing & Financial Literacy Manager 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 Richard L. Greslick, Jr Chairperson Gregory M. Dixon Secretary Joseph B. Bower, Jr. Treasurer Gregory M. Dixon Chairperson Joseph P. Strouse President Francis Goss Vice President Glenn R. Pentz Director Tito L. Lima President Donald R. McLamb, Jr. Wilmington Trust SP Services, Inc. Donald R. McLamb, Jr. Treasurer, 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, Northeast Ohio Steven M. Cappellino Senior Vice President, Area Manager William L. DeLuca, Jr. Senior Vice President, Commercial Banking David P. Bogardus Vice President, Area Manager Travis J. Burch Vice President, Investment Advisor James E. Burke Vice President, Commercial Banking Scott O. Calhoun Vice President, Commercial Banking Maggie M. Dempsey Senior Vice President, Private Banking Timothy A. Flenner Vice President, Area Manager Suzanne Hamilton Vice President, Commercial Banking Christine Hartog Vice President, Community Office Manager ERIEBANK BOARD OF ADVISORS David J. Zimmer Chairperson of the Board; President, ERIEBANK Gary M. Alizzeo Esquire, Shafer Law Firm, P.C. Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation, CNB Bank Gary L. Clark Chief Executive Officer, Reed Manufacturing Company Donald W. Damon Retired; Former ERIEBANK Senior Vice President ERIEBANK OHIO ADVISORY BOARD Wesley H. Gillespie Chairperson of the Board; Regional President, ERIEBANK Northeast Ohio Dr. Lundon Albrecht Owner, Albrecht Family Dentistry Katie J. Jones Vice President, Market Manager Thomas J. Walker Vice President, Commercial Banking Steven B. Levy Senior Vice President, Commercial Banking Mark R. Weibel Vice President, Wealth Advisor James R. Miale Vice President, Commercial Banking Larry G. Morton Vice President, Wealth Advisor Kelly S. Buck Assistant Vice President, Private Banking Chrystal M. Fairbanks Assistant Vice President, Community Office Manager Gregory A. Noon Vice President, Commercial Banking Area Manager Jessica A. Figoli Assistant Vice President, Private Banking Benjamin V. Palazzo Vice President, Commercial Banking Timothy J. Roberts Vice President, Commercial Banking Paul D. Sallie Vice President, Private Banking Alison A. Samuels Vice President, Commercial Banking Jerome L. Smith Vice President, Commercial Banking Joanne L. Fulton Assistant Vice President, Treasury Services Allison M. Hodas Assistant Vice President, Commercial Banking Bryan G. Kusich Assistant Vice President, Commercial Banking Barbara A. Macks Assistant Vice President, Wealth Advisor Theresa L. Swanson Assistant Vice President, Community Office Manager William J. Vitron, Jr. Vice President, ERIEBANK Investment Advisors John R. VanTassel Assistant Vice President, Treasury Services Joseph E. Dell, Jr. Senior Executive Vice President, Chief Commercial Banking Officer Gregory M. Dixon Executive Vice President, Chief Risk Officer, CNB Bank Jane M. Earll Esquire; Retired Pennsylvania State Senator Richard L. Greslick, Jr. Senior Executive Vice President & Chief Support Officer, CNB Bank; Secretary, CNB Financial Corporation Charles “Boo” Hagerty President, Hamot Health Foundation Dr. Andrea T. Jeffress Physician, OB-GYN Associates of Erie, PC Thomas M. Kennedy President, Professional Development Associates, Inc. Jerome T. Osborne, III President, JTO, Inc. Thomas W. Reams President, C. H. Reams & Associates, Inc. Nicholas N. Scott Vice President & Owner, Scott Enterprises James E. Spoden Esquire, MacDonald Illig Jones & Britton, LLP Richard T. Flenner, Jr. Retired; Former President, Lake National Bank Kevin D. Malecek Director of Economic Development, City of Mentor Bryce A. Heinbaugh Managing Partner and Founder, IEN Risk Management Consultants Shawn Neece Director, NMS Certified Public Accountants Joseph T. Svete President, Svete & McGee Company, LPA 9 Jennifer Brown Economic Development Specialist, CT Consultants Richard J. Kessler President, Society of Rehabilitation 2019 ANNUAL REPORT HIGHLIGHTSFCBANK SENIOR MANAGEMENT AND OFFICERS Jenny L. Saunders President Kate M. Miller Vice President, Commercial Banking Neal S. Clark Senior Vice President, Commercial Banking Amy E. Pierce Vice President, Treasury Services Chris D. Butcher Vice President, Private Client Solutions Team Leader J. Ralph Parker Senior Vice President, Credit Officer Robert P. Linnabary Vice President, Commercial Banking Bernard J. McGuinness Vice President, Commercial Banking Michael D. Mantor Vice President, Commercial Banking FCBANK BOARD OF ADVISORS Jenny L. Saunders Chairperson of the Board, President, FCBank Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation, CNB Bank Jennifer Carney Pincipal, OHM-Advisors Linda K. Salters Vice President, Business Development Leader Jack L. Trachtenberg Vice President, Private Banking Stephanie A. Wagner Vice President, Wealth Advisor Jeff P. Wallace Vice President, Treasury Services Stephen D. Winner Vice President, Commercial Real Estate Jeffrey J. Beyke Assistant Vice President, Market Manager 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 Gregory M. Dixon Executive Vice President, Chief Risk Officer, CNB Bank 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 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 Executive Vice President, Community Banking; President BankOnBuffalo Maria E. Barth Senior Vice President, Commercial Banking Michael J. Noah Senior Vice President, Commercial Banking David P. Paul Senior Vice President, Private Client Solutions Team Leader Michael A. Anderson Vice President, Regional Retail Banking Administrator Joseph D. Becker Vice President, Private Banking Christine M. Domster Vice President, Treasury Services David G. Hawker Vice President, Commercial Banking Kathleen B. Kane Vice President, Community Office Manager Kelly A. Navagh Vice President, Treasury Services Gail E. Testa-Romano Vice President, Wealth Advisor Annette A. Tomlin Vice President, Community Office Manager BANK ON BUFFALO BOARD OF ADVISORS Martin T. Griffith Chairperson of the Board, Executive Vice President, Community Banking; President BankOnBuffalo Herbert L. Bellamy, Jr. CEO, Bellamy Enterprises; CEO, Buffalo Black Achievers, Inc. Joseph B. Bower, Jr. President and Chief Executive Officer, CNB Financial Corporation, CNB Bank Joseph E. Dell, Jr. Senior Executive Vice President & Chief Commercial Banking Officer, CNB Bank Gregory M. Dixon Executive Vice President, Chief Risk Officer, CNB Bank Richard L. Greslick, Jr. Senior Executive Vice President & Chief Support Officer, CNB Bank; Secretary, CNB Financial Corporation 10 James H. Cosgriff Assistant Vice President, Wealth Advisor Ryan T. Gorman Assistant Vice President, Community Office Manager Angela M. Indelicato-Matar Assistant Vice President, Commercial Banking Thomas J. Ivancic Assistant Vice President, Commercial Banking James P. Reidy Assistant Vice President, Community Office Manager Gerry Murak Principal and Founder, Murak & Associates, LLC; CEO and Board Chairman, SoPark Corporation; President, CEO, and Founder, Precision Scientific Instruments, Inc. 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 21, 2020 at 2:00 pm at the Lock Haven University - Clearfield Campus, 201 University Drive, Clearfield, PA 16830, 2nd Floor Upper Lounge. CORPORATE ADDRESS CNB Financial Corporation 31 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 2019 ANNUAL REPORT HIGHLIGHTSBacked by the full faith and credit of the United States government Each depositor insured to at least $250,000 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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