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 September 30, 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 October 28, 2004:
COMMON STOCK: $1.00 PAR VALUE 9,100,446 SHARES
2
CNB FINANCIAL CORPORATION
(Dollars in thousands)
| (unaudited) | ||||||||
| Sept. 30, 2004 |
Dec. 31, 2003 |
|||||||
| ASSETS |
||||||||
| Cash and due from banks |
$ | 14,939 | $ | 15,239 | ||||
| Interest bearing deposits with other financial institutions |
7,196 | 5,742 | ||||||
| Total cash and cash equivalents |
22,135 | 20,981 | ||||||
| Securities available for sale |
153,523 | 175,903 | ||||||
| Loans held for sale |
2,596 | 3,099 | ||||||
| Loans and leases |
486,295 | 458,660 | ||||||
| Less: unearned discount |
158 | 411 | ||||||
| Less: allowance for loan losses |
6,003 | 5,764 | ||||||
| NET LOANS |
480,134 | 452,485 | ||||||
| FHLB and Federal Reserve Stock |
5,174 | 5,032 | ||||||
| Premises and equipment, net |
13,500 | 12,934 | ||||||
| Bank owned life insurance |
13,058 | 12,682 | ||||||
| Accrued interest receivable and other assets |
7,195 | 6,388 | ||||||
| Mortgage servicing rights |
368 | 481 | ||||||
| Goodwill |
10,821 | 10,821 | ||||||
| Intangible, net |
709 | 946 | ||||||
| TOTAL ASSETS |
$ | 709,213 | $ | 701,752 | ||||
| LIABILITIES |
||||||||
| Deposits: |
||||||||
| Non-interest bearing deposits |
$ | 73,653 | $ | 63,297 | ||||
| Interest bearing deposits |
508,540 | 512,141 | ||||||
| TOTAL DEPOSITS |
582,193 | 575,438 | ||||||
| Short-term borrowings |
2,000 | 1,313 | ||||||
| Federal Home Loan Bank advances |
40,000 | 40,000 | ||||||
| Accrued interest and other liabilities |
7,177 | 8,244 | ||||||
| Subordinated debentures |
10,310 | 10,310 | ||||||
| TOTAL LIABILITIES |
641,680 | 635,305 | ||||||
| SHAREHOLDERS’ EQUITY |
||||||||
| Common stock $1.00 par value |
9,234 | 3,694 | ||||||
| Additional paid in capital |
4,289 | 4,123 | ||||||
| Retained earnings |
53,736 | 56,787 | ||||||
| Treasury stock, at cost |
(2,021 | ) | (1,309 | ) | ||||
| Accumulated other comprehensive income |
2,295 | 3,152 | ||||||
| TOTAL SHAREHOLDERS’ EQUITY |
67,533 | 66,447 | ||||||
| TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY |
$ | 709,213 | $ | 701,752 | ||||
3
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
CNB FINANCIAL CORPORATION
(Dollars in thousands, except per share data)
| THREE MONTHS ENDED SEPTEMBER 30, | ||||||
| 2004 |
2003 | |||||
| INTEREST AND DIVIDEND INCOME |
||||||
| Loans including fees |
$ | 7,774 | $ | 7,623 | ||
| Deposits with other financial institutions |
39 | 13 | ||||
| Federal funds sold |
4 | 60 | ||||
| Securities: |
||||||
| Taxable |
806 | 976 | ||||
| Tax-exempt |
485 | 530 | ||||
| Dividends |
209 | 94 | ||||
| TOTAL INTEREST AND DIVIDEND INCOME |
9,317 | 9,296 | ||||
| INTEREST EXPENSE |
||||||
| Deposits |
2,596 | 2,733 | ||||
| Borrowed funds |
655 | 637 | ||||
| TOTAL INTEREST EXPENSE |
3,251 | 3,370 | ||||
| Net interest income |
6,066 | 5,926 | ||||
| Provision for loan losses |
200 | 200 | ||||
| NET INTEREST INCOME AFTER PROVISION |
5,866 | 5,726 | ||||
| OTHER INCOME |
||||||
| Trust & asset management fees |
232 | 275 | ||||
| Service charges on deposit accounts |
1,006 | 927 | ||||
| Other service charges and fees |
115 | 120 | ||||
| Securities gains |
152 | 16 | ||||
| Gains on sale of loans |
46 | 172 | ||||
| Bank owned life insurance earnings |
125 | 138 | ||||
| Other |
41 | 248 | ||||
| TOTAL OTHER INCOME |
1,717 | 1,896 | ||||
| OTHER EXPENSES |
||||||
| Salaries |
1,739 | 1,714 | ||||
| Employee benefits |
795 | 652 | ||||
| Net occupancy expense of premises |
629 | 562 | ||||
| Amortization of intangibles |
125 | 135 | ||||
| Other |
1,673 | 1,451 | ||||
| TOTAL OTHER EXPENSES |
4,961 | 4,514 | ||||
| Income before income taxes |
2,622 | 3,108 | ||||
| Applicable income taxes |
590 | 728 | ||||
| NET INCOME |
$ | 2,032 | $ | 2,380 | ||
| EARNINGS PER SHARE, BASED ON WEIGHTED AVERAGE SHARES OUTSTANDING |
||||||
| Net income, basic |
$ | 0.22 | $ | 0.26 | ||
| Net income, diluted |
$ | 0.22 | $ | 0.26 | ||
| DIVIDENDS PER SHARE |
||||||
| Cash dividends per share |
$ | 0.13 | $ | 0.12 | ||
4
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
CNB FINANCIAL CORPORATION
(Dollars in thousands, except per share data)
| NINE MONTHS ENDED SEPTEMBER 30, | ||||||
| 2004 |
2003 | |||||
| INTEREST AND DIVIDEND INCOME |
||||||
| Loans including fees |
$ | 22,983 | $ | 22,865 | ||
| Deposits with other financial institutions |
64 | 32 | ||||
| Federal funds sold |
29 | 147 | ||||
| Securities: |
||||||
| Taxable |
2,838 | 3,406 | ||||
| Tax-exempt |
1,530 | 1,643 | ||||
| Dividends |
378 | 310 | ||||
| TOTAL INTEREST AND DIVIDEND INCOME |
27,822 | 28,403 | ||||
| INTEREST EXPENSE |
||||||
| Deposits |
7,809 | 8,269 | ||||
| Borrowed funds |
1,920 | 1,888 | ||||
| TOTAL INTEREST EXPENSE |
9,729 | 10,157 | ||||
| Net interest income |
18,093 | 18,246 | ||||
| Provision for loan losses |
800 | 1,280 | ||||
| NET INTEREST INCOME AFTER PROVISION |
17,293 | 16,966 | ||||
| OTHER INCOME |
||||||
| Trust & asset management fees |
698 | 719 | ||||
| Service charges on deposit accounts |
2,804 | 2,543 | ||||
| Other service charges and fees |
352 | 408 | ||||
| Securities gains |
316 | 167 | ||||
| Gains on sale of loans |
103 | 500 | ||||
| Bank owned life insurance earnings |
376 | 351 | ||||
| Other |
332 | 616 | ||||
| TOTAL OTHER INCOME |
4,981 | 5,304 | ||||
| OTHER EXPENSES |
||||||
| Salaries |
5,201 | 5,064 | ||||
| Employee benefits |
2,200 | 1,961 | ||||
| Net occupancy expense of premises |
1,941 | 1,776 | ||||
| Amortization of intangibles |
381 | 385 | ||||
| Other |
4,687 | 4,258 | ||||
| TOTAL OTHER EXPENSES |
14,410 | 13,444 | ||||
| Income before income taxes |
7,864 | 8,826 | ||||
| Applicable income taxes |
1,801 | 2,154 | ||||
| NET INCOME |
$ | 6,063 | $ | 6,672 | ||
| EARNINGS PER SHARE, BASED ON WEIGHTED AVERAGE SHARES OUTSTANDING |
||||||
| Net income, basic |
$ | 0.66 | $ | 0.73 | ||
| Net income, diluted |
$ | 0.66 | $ | 0.73 | ||
| DIVIDENDS PER SHARE |
||||||
| Cash dividends per share |
$ | 0.39 | $ | 0.34 | ||
5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CNB FINANCIAL CORPORATION
Consolidated Statements of Comprehensive Income (unaudited)
(dollars in thousands)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
||||||||||||
| Net Income |
$ | 2,032 | $ | 2,380 | $ | 6,063 | $ | 6,672 | |||||||
| Other comprehensive income, net of tax Unrealized gains/(losses) on securities: |
|||||||||||||||
| Unrealized gains/(losses) arising during the period |
1,327 | (1,724 | ) | (1,062 | ) | (740 | ) | ||||||||
| Reclassified adjustment for accumulated gains included in net income, net of tax |
99 | 10 | 205 | 109 | |||||||||||
| Other comprehensive income (loss) |
1,426 | (1,714 | ) | (857 | ) | (631 | ) | ||||||||