UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2004
or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number 0-13396
CNB FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
| Pennsylvania | 25-1450605 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
County National Bank
1 South Second Street
P.O. Box 42
Clearfield, Pennsylvania 16830
(Address of principal executive offices)
Registrant’s telephone number, including area code, (814) 765-9621
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨
The number of shares outstanding of the issuer’s common stock as of May 3, 2004:
COMMON STOCK: $1.00 PAR VALUE – 9,119,557 SHARES
INDEX
2
CNB FINANCIAL CORPORATION
| (Dollars in thousands) |
March 31 2004 |
Dec. 31, 2003 |
||||||
| ASSETS |
||||||||
| Cash and due from banks |
$ | 13,856 | $ | 15,239 | ||||
| Interest bearing deposits with other banks |
8,902 | 5,742 | ||||||
| Total cash and cash equivalents |
22,758 | 20,981 | ||||||
| Securities available for sale |
170,611 | 175,903 | ||||||
| Loans held for sale |
4,142 | 3,099 | ||||||
| Loans and leases |
471,075 | 458,660 | ||||||
| Less: unearned discount |
305 | 411 | ||||||
| Less: allowance for loan and lease losses |
5,855 | 5,764 | ||||||
| NET LOANS |
464,915 | 452,485 | ||||||
| FHLB and Federal Reserve stock |
4,697 | 5,032 | ||||||
| Premises and equipment, net |
12,814 | 12,934 | ||||||
| Bank owned life insurance |
12,807 | 12,682 | ||||||
| Accrued interest receivable and other assets |
7,398 | 6,388 | ||||||
| Mortgage servicing rights |
441 | 481 | ||||||
| Goodwill |
10,821 | 10,821 | ||||||
| Other intangible assets, net |
867 | 946 | ||||||
| TOTAL ASSETS |
$ | 712,271 | $ | 701,752 | ||||
| LIABILITIES |
||||||||
| Deposits: |
||||||||
| Non-interest bearing deposits |
$ | 67,055 | $ | 63,297 | ||||
| Interest bearing deposits |
517,629 | 512,141 | ||||||
| TOTAL DEPOSITS |
584,684 | 575,438 | ||||||
| Short-term borrowings |
1,993 | 1,313 | ||||||
| Federal Home Loan Bank advances |
40,000 | 40,000 | ||||||
| Accrued interest and other liabilities |
7,381 | 8,554 | ||||||
| Subordinated debentures |
10,000 | 10,000 | ||||||
| TOTAL LIABILITIES |
644,058 | 635,305 | ||||||
| SHAREHOLDERS’ EQUITY |
||||||||
| Common stock $1.00 par value |
||||||||
| Authorized 10,000,000 shares |
||||||||
| Issued 9,233,750 shares |
9,234 | 9,234 | ||||||
| Additional paid in capital |
4,221 | 4,123 | ||||||
| Retained earnings |
52,082 | 51,247 | ||||||
| Treasury stock, at cost |
(1,224 | ) | (1,309 | ) | ||||
| (82,284 shares for March 2004, and 93,974 for December 2003) |
||||||||
| Accumulated other comprehensive income |
3,900 | 3,152 | ||||||
| TOTAL SHAREHOLDERS’ EQUITY |
68,213 | 66,447 | ||||||
| TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY |
$ | 712,271 | $ | 701,752 | ||||
3
CONSOLIDATED STATEMENTS OF INCOME
CNB FINANCIAL CORPORATION
| Three Months Ended March 31, | ||||||
| (Dollars in thousands, except per share data) |
2004 |
2003 | ||||
| INTEREST AND DIVIDEND INCOME |
||||||
| Loans including fees |
$ | 7,527 | $ | 7,595 | ||
| Deposits with other banks |
12 | 12 | ||||
| Federal funds sold |
18 | 40 | ||||
| Investment securities: |
||||||
| Taxable |
1,065 | 1,282 | ||||
| Tax-exempt |
521 | 550 | ||||
| Dividends |
93 | 112 | ||||
| TOTAL INTEREST AND DIVIDEND INCOME |
9,236 | 9,591 | ||||
| INTEREST EXPENSE |
||||||
| Deposits |
2,628 | 2,771 | ||||
| Borrowed funds |
628 | 622 | ||||
| TOTAL INTEREST EXPENSE |
3,256 | 3,393 | ||||
| Net interest income |
5,980 | 6,198 | ||||
| Provision for loan losses |
300 | 540 | ||||
| NET INTEREST INCOME AFTER PROVISION |
5,680 | 5,658 | ||||
| NON-INTEREST INCOME |
||||||
| Trust & asset management fees |
248 | 218 | ||||
| Service charges on deposit accounts |
850 | 751 | ||||
| Other service charges and fees |
128 | 153 | ||||
| Securities gains |
169 | 150 | ||||
| Gains on sale of loans |
23 | 112 | ||||
| Bank owned life insurance earnings |
126 | 86 | ||||
| Other income |
166 | 129 | ||||
| TOTAL NON-INTEREST INCOME |
1,710 | 1,599 | ||||
| NON-INTEREST EXPENSES |
||||||
| Salaries |
1,817 | 1,702 | ||||
| Employee benefits |
710 | 628 | ||||
| Net occupancy expense of premises |
679 | 613 | ||||
| Amortization of intangible |
129 | 124 | ||||
| Other |
1,489 | 1,488 | ||||
| TOTAL NON-INTEREST EXPENSES |
4,824 | 4,555 | ||||
| Income before income taxes |
2,566 | 2,702 | ||||
| Applicable income taxes |
551 | 693 | ||||
| NET INCOME |
$ | 2,015 | $ | 2,009 | ||
| EARNINGS PER SHARE, BASED ON WEIGHTED AVERAGE SHARES OUTSTANDING* |
||||||
| Net income, basic |
$ | 0.22 | $ | 0.22 | ||
| Net income, diluted |
$ | 0.22 | $ | 0.22 | ||
| DIVIDENDS PER SHARE |
||||||
| Cash dividends per share |
$ | 0.128 | $ | 0.112 | ||
| * | Per share data are restated to reflect a 2 1/2 for 1 stock split announced April 13, 2004. |
4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CNB FINANCIAL CORPORATION
| Three Months Ended March 31, |
|||||||
| (Dollars in thousands) |
2004 |
2003 |
|||||
| Net income |
$ | 2,015 | $ | 2,009 | |||
| Other comprehensive income, net of tax |
|||||||
| Unrealized gains/(losses) on securities: |
|||||||
| Unrealized gains/(losses) arising during the period |
638 | (761 | ) | ||||
| Reclassified adjustment for accumulated gains included in net income, net of tax |
110 | 99 | |||||
| Other comprehensive income/(loss) |
748 | (662 | ) | ||||
| Comprehensive income |
$ | 2,763 | $ | 1,347 | |||
5
CONSOLIDATED STATEMENTS OF CASHFLOWS
CNB FINANCIAL CORPORATION
| Three Months Ended March 31, |
||||||||
| (Dollars in thousands) |
2004 |
2003 |
||||||
| Cash flows from operating activities: |
||||||||
| Net Income |
$ | 2,015 | $ | 2,009 | ||||
| Adjustments to reconcile net income to |
||||||||
| Provision for loan losses |
300 | 540 | ||||||
| Depreciation and amortization |
435 | 380 | ||||||
| Amortization and accretion and deferred loan fees |
58 | 153 | ||||||
| Deferred taxes |
(50 | ) | (30 | ) | ||||
| Security (gains)/losses |
(169 | ) | (151 | ) | ||||
| Gain on sale of loans |
(24 | ) | (112 | ) | ||||
| Net (gains)losses on dispositions of acquired property |
(18 | ) | 0 | |||||
| Proceeds from sale of loans |
1,658 | 8,485 | ||||||
| Origination of loans for sale |
(2,677 | ) | (10,598 | ) | ||||
| Increase in Bank Owned Life Insurance |
(126 | ) | (85 | ) | ||||
| Changes in: |
||||||||
| Interest receivable and other assets |
(1,160 | ) | (403 | ) | ||||
| Interest payable and other liabilities |
(1,600 | ) | (1,438 | ) | ||||
| Net cash used by operating activities |
(1,358 | ) | (1,250 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Proceeds from maturities of: |
||||||||
| Securities available for sale |
11,839 | 22,525 | ||||||
| Proceeds from sales of securities available for sale |
3,271 | 2,438 | ||||||
| Purchase of securities available for sale |
(8,613 | ) | (21,057 | ) | ||||
| Loan origination and payments, net |
(12,598 | ) | (8,019 | ) | ||||
| Purchase (Sale) of Federal Reserve Bank Stock and |
334 | (294 | ) | |||||
| Net, purchase of premises and equipment |
(186 | ) | (662 | ) | ||||
| Proceeds from the sale of foreclosed assets |
159 | 50 | ||||||
| Net cash used in investing activities |
(5,794 | ) | (5,019 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Net change in: |
||||||||
| Checking, money market and savings accounts |
3,070 | 6,882 | ||||||
| Certificates of deposit |
6,176 | 7,149 | ||||||
| Treasury stock purchased |
(29 | ) | (177 | ) | ||||
| Proceeds from sale of treasury stock |
212 | 164 | ||||||
| Cash dividends paid |
(1,180 | ) | (1,028 | ) | ||||
| Net advances (repayments) from short-term borrowings |
680 | (96 | ) | |||||
| Net cash provided by financing activities |
8,929 | 12,894 | ||||||
| Net increase in cash and cash equivalents |
1,777 | 6,625 | ||||||
| Cash and cash equivalents at beginning of year |
||||||||