The platform we are using for the Annual Meeting live webcast will require you to install a software installation or have the ability to run a temporary application in order for you to join the Annual Meeting live webcast.
If you have not registered to attend the meeting, but would like to listen in only on the day of the meeting at 2:00 p.m. (EDT), the toll-free number and access code will be displayed on the site www.viewproxy.com/CNBFinancial/2024.Obtaining an Annual Report on Form
10-K
The Corporation is required to file an Annual Report on Form 10-K (the “Form 10-K”) for the 20202023 fiscal year with the U.S. Securities and Exchange Commission (“SEC”). Shareholders may obtain, free of charge, a copy of the Form 10-K by writing to Richard L. Greslick, Jr., Secretary, CNB Financial Corporation, P.O. Box 42, Clearfield, Pennsylvania 16830. Our annual report2023 Annual Report is also available free of charge on the Investor Relations section of our website (www.cnbbank.bank).
PROPOSAL 1. ELECTION OF DIRECTORS
The Bylaws
of the Corporation provide that the Board shall consist of not less than nine nor more than twenty-four persons. The Board has acted to fix the number of directors
of the Corporation for the ensuing year at
twelve.twelve, including ten independent directors and two directors who are also members of the Corporation’s management team.
The Bylaws further provide that the Board shall be classified into three classes with each class consisting of not less than three nor more than eight directors. The Board has elected to fix the number of each class of directors at four. One class of directors is to be elected annually for a three-year term and until their successors are elected and qualified,
unless theyor until their earlier
reachdeath, resignation, removal or achievement of the mandatory retirement age
ofon the day a director becomes 70
die or resign from the Board.years old. The four Class 3 nominees named below are nominated to serve as Class 3 directors to hold office for a three-year term expiring at the third succeeding annual meeting (in the year
2024)2027). Each nominee has consented to be named as a nominee and has agreed to serve if elected. If, for any reason, any of the nominees named below should become unavailable to serve, the enclosed proxy will be voted for the remaining nominees and such other person or persons as the Board may select among those recommended by the Corporate Governance/Nominating Committee.
Information as to Nominees and Other Directors
The following tables set forth the names of the nominees for election as directors and the current directors of the Corporation. Also set forth in the tables is certain other information with respect to each such person’s age at December 31,
2020,2023, the periods during which such person has served as a director of the Corporation, and positions currently held with the Corporation.
Following the tables are biographies of each of the nominees and continuing directors which contain information regarding each such person’s business experience, director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the Corporate Governance/Nominating Committee and the Board to determine that such person should serve as a director as of the time of filing of this Proxy Statement.
EachThe Corporate Governance/Nominating Committee believes that each director brings a strong and unique background and set of skills to the Board, giving the Board
as a
wholecollective competence and experience in a wide variety of areas, including corporate governance, board service, executive management, business, finance and marketing. “Independent” directors are those who, in the Board’s judgment, meet the standards for independence as required by NASDAQ.
NOMINEES:
The following Class 3 directors for a three-year term expiring at the time of the annual meeting in
2024. | | | | | | | | | | | | |
Name | | Age at
December 31,
2020 | | | Business Experience (Past Five Years) | | Positions Held at CNB | | Director
Since | |
Joseph B. Bower, Jr. | | | 57 | | | President and Chief Executive Officer, CNB Financial Corp. and CNB Bank | | President and Chief Executive Officer, CNB Financial Corp. and CNB Bank | | | 4/19/2005 | |
Robert W. Montler Independent Director | | | 69 | (1) | | Chairperson and CEO, Lee Industries (Manufacturer) | | — | | | 6/28/2005 | |
Joel E. Peterson Independent Director | | | 62 | | | President, Clearfield Wholesale Paper (Wholesaler) | | — | | | 9/13/2011 | |
Richard B. Seager Independent Director | | | 63 | | | President and CEO, Journey Health System (Mental Health) | | — | | | 12/14/2010 | |
| (1) | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | Pursuant to our Bylaws, Mr. Montler will retire from service to the Board by tendering his resignation on or before attaining the age of 70.
| Age at
December 31,
2023 | | Business Experience (Past Five Years) | | Positions Held at CNB | | Director
Since |
Michael Obi
Independent Director | | 56 | | President, UBIZ Venture Capital
Chief Executive Officer, Spectrum Global Solutions | | — | | 9/14/2021 |
| Michael D. Peduzzi | | 58 | | President and Chief Executive Officer, CNB Financial Corp. and CNB Bank President & Chief Operating Officer, CNB Bank Senior Vice President and Chief Financial Officer, Mid Penn Bancorp, Inc | | President and Chief Executive Officer, CNB Financial Corp. and CNB Bank President & Chief Operating Officer, CNB Bank | | 1/1/2023 |
Joel E. Peterson
Independent Director | | 65 | | Chairman/CEO, Clearfield Wholesale Paper | | — | | 9/13/2011 |
Richard B. Seager
Independent Director | | 66 | | Owner, Ritri Holdings, LLC
President and CEO, Journey Health System | | — | | 12/14/2010 |
Joseph B. Bower, Jr., has been with the Corporation since 1997 and previously served as Chief Financial Officer and Chief Operating OfficerMichael Obi is President of CNB Bank as well as Secretary and Treasurer of CNB Financial Corporation. In January 2010, he was named PresidentUBIZ Venture Capital and Chief Executive Officer of CNBSpectrum Global Holdings, LLC, in Cleveland, Ohio. He has seventeen years of experience working in banking and financial services, including executive leadership positions at KeyBank, Bank of America, Wells Fargo and CNB Financial Corporation.SunTrust. Prior to launching Spectrum Global Holdings, LLC, he served as Senior Vice President for KeyBank’s Retail and Business Banking Segments. Mr. Bower previously worked as a certified public accountant and holds aObi obtained both his Bachelor of ArtsScience degree in Accounting from Lycoming College in Williamsport, Pennsylvania. In 1984, Mr. Bower enlisted in the United States Army, where after two and a half years the Army awarded him with a full ROTC scholarship. Upon graduating from Lycoming College, Mr. Bower graduatedMaster of Business Administration from the U.S. Army OrdinanceCoggins School Officer Basic Course.of Business at the University of North Florida in Jacksonville, Florida. Mr. BowerObi has served and continues to serve on various boards within the Cleveland community. He also heads economic development strategies for the Urban League of Greater Cleveland. The Board believes that Mr. Bower’s positionObi, through his extensive experience in all areas of banking, including retail, commercial, operations and finance, provides a significant depth of knowledge of the industry to the Board.
Michael D. Peduzzi joined CNB Financial Corporation as the President and Chief ExecutiveOperating Officer of the Corporation and his day to day leadership of the Corporation provides him with thorough knowledge of the Corporation’s opportunities, challenges and operations.Robert W. Montler is Chairperson andCNB Bank in August 2021. He became CEO of Lee Industries. Mr. Montler is alsoCNB Bank on July 1, 2022, and became President and CEO of Keystone Process Equipment, which purchasesCNB Financial Corporation on December 31, 2022. Mr. Peduzzi has over 30 years of experience working for companies in the banking and refurbishes used process equipment forfinancial services industry while maintaining his Certified Public Accounting license continuously throughout that same period. Prior to joining the pharmaceutical, cosmetic, food and chemical markets. In 1997, he started Keystone Process Equipment and also began a real estate development company knownBank, Mr. Peduzzi served as Tipton Realty. Mr. Montler’s previous experience includes service in either a board or advisory board capacity for threean executive at other publicly-held financial institutions, including services on audit committees for two ofas the institutions. In addition, Mr. Montler has an extensive background in executive level financial management, internal control over financial reporting,Senior Vice President and the application of generally accepted accounting principles in the United States. He held a senior level audit position with a regional public accounting firm and has also worked as both controller and Executive VP/Chief Financial Officer of Mid Penn Bancorp, Inc. from 2016 through August 2021. He has also held Executive and Chief Financial Officer roles at Codorus Valley Bancorp and Union National Financial Corp, and was the Corporate Audit Executive for Lee Industries. AsKeystone Financial Inc. Mr. Peduzzi graduated from The Pennsylvania State University with a result,Bachelor of Science degree in Accounting. He is a Pennsylvania-licensed Certified Public Accountant and a member of both the Board has determined that Mr. Montler qualifies as an “audit committee financial expert” as defined in applicable SEC rules,American Institute of Certified Public Accountants and has designated Mr. Montler as such on the Corporation’s Audit Committee. Mr. Montler has served and continues to serve on various boards within the community. Mr. Montler’s experience as Chairperson and CEOPennsylvania Institute of Lee Industries and President and CEO of Keystone Process Equipment provides him with extensive experience concerning conducting business in the Corporation’s markets.
Certified Public Accountants.
Joel E. Peterson is the Chairman/CEO of Clearfield Wholesale Paper Company, a fourth-generation business that is over 102 years old providing supplies to companies in several states. His previous employment was in banking for several years as a credit and loan origination analyst. Mr. Peterson is a graduate of Pennsylvania State University with a major in Accounting and Marketing. Currently, he serves on the DuBois Educational Foundation as the Development Committee Chair and previously served as the Chairman of the Clearfield Jefferson Regional Airport Authority with duties that included working with state and federal agencies. He ishas also served as President of the ownerBucktail Council of the Boy Scouts of America and President of the Clearfield Wholesale Paper and participates in the governance of many community organizations.YMCA. Mr. Peterson, by virtue of his executive service and business and community involvement in our CNB market, brings meaningful corporate governance experience to the Board.
Richard B. Seager has over 2530 years of experience in health care administration, consulting, and finance. Mr. Seager is actively involved in small business and community development activities throughout northwestern Pennsylvania, including service on various non-profit boards. He obtained his Bachelor of Science degree from Gannon University. Mr. Seager provides the Board with knowledge of the market area and strong governance experience as a result of his executive experience as President and CEOChief Executive Officer of Journey Health System.multiple companies.
There are no arrangements or understandings between any director
nominee and any other person pursuant to which
he or she wasthey were selected as a
director.director nominee.
Under our Bylaws, to be elected in an uncontested election, director nominees must receive the affirmative vote of a majority of the votes cast (the number of shares voted FOR a director nominee must exceed the number of votes cast AGAINST that director nominee). For purposes of the election of directors, abstentions and other shares not voted (whether by broker
non-vote or otherwise) will not be counted as votes cast for or against a nominee’s election and will have no effect on the result of the vote. There is no cumulative voting with respect to the election of directors.
If an incumbent director fails to be reelected by a majority of votes cast, that director is required under our Bylaws to promptly deliver to the Board his or her irrevocable offer to resign from the Board. The Board will
consider such director’s offer to resign, taking into consideration any such factors that the Board deems relevant in deciding whether to accept such director’s resignation, including any recommendation of the Corporate Governance/Nominating Committee. The Board is required to act on such director’s resignation within 90 days after the election results are certified.
Our
Recommendation:Recommendation
The Board unanimously recommends that shareholders vote FOR each of the foregoing
nomineesClass 3 nominees.
The following Class 2 directors’ terms expire at the time of the annual meeting in 2025.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Age at
December 31,
2023 | | Business Experience (Past Five Years) | | Positions Held at CNB | | Director
Since |
| Richard L. Greslick, Jr. | | 47 | | Senior Executive Vice President,
Chief Operating Officer and
Secretary, CNB Financial Corp.
and CNB Bank | | Senior Executive Vice President, Chief Operating Officer and Secretary, CNB Financial Corp. and CNB Bank | | 1/1/2012 |
Deborah Dick Pontzer
Independent Director | | 63 | | President of Grow Rural PA
Economic & Workforce Specialist for Congressman Glenn Thompson | | — | | 6/10/2003 |
Nicholas N. Scott
Independent Director | | 51 | | Vice President/Owner Scott
Enterprises | | — | | 5/14/2013 |
Julie M. Young
Independent Director | | 50 | | Employment Attorney, JMY Law, LLC | | — | | 5/14/2019 |
Richard L. Greslick, Jr., has been with the Corporation since 1998 and serves as the Senior Executive Vice President & Chief Operating Officer of CNB Bank. Mr. Greslick has served as a director and Secretary of CNB Financial Corporation and director and Senior Executive Vice President of CNB Bank since January 2012. He previously held roles as the Chief Support Officer and Senior Vice President of Administration. Mr. Greslick holds a Bachelor of Science in Accounting from Indiana University of Pennsylvania and is a 2009 graduate of the American Bankers Association’s Stonier National Graduate School of Banking in Philadelphia, Pennsylvania. Mr. Greslick has served and continues to serve on various boards within the community. Mr. Greslick’s experience as an executive of the Corporation provides him with a thorough knowledge of the Corporation’s opportunities, challenges, and operations.
Deborah Dick Pontzer is the President of Grow Rural PA, specializing in economic and community development. In her current capacity, she works with business, industry, and communities doing strategic planning, identifying and obtaining the resources for impactful, equitable economic growth through infrastructure development, capacity building, job creation, retention and recruitment. Her prior experience includes serving as an economic development and workforce specialist for U.S. Congressmen, John E. Peterson and Glenn Thompson, and as a senior associate for Coopers & Lybrand in the Business Investigation Services unit. She is active in her community, serving on various boards. Ms. Pontzer earned a Bachelor of Arts degree from Mount Holyoke College and a Masters of Business Administration from the American Graduate School of International Management, a division of Arizona State University. Ms. Pontzer’s experience delivering meaningful economic outcomes enables her to provide a valuable perspective to the Board.
Nicholas N. Scott is Vice President/Owner of Scott Enterprises, a family owned-hospitality enterprise based in Erie, Pennsylvania, focused on restaurants and hotels, including two resorts. Mr. Scott has served in this role since 1995. Mr. Scott also has a degree in Hotel, Restaurant, and Institutional Management from The Pennsylvania State University. Mr. Scott also serves on numerous boards in his community. As a business leader responsible for operations and development of the third-generation family owned hospitality business, Mr. Scott applies his expertise in strategic planning and provides leadership and guidance to the Board.
Julie M. Young is an attorney with 25 years of experience focused on management-side employment law. Since 2016, Ms. Young has led her own boutique law firm specializing in HR and employment law for employers. Ms. Young works closely with small and mid-sized businesses in the Central Ohio area and across the nation to provide comprehensive legal services and compliance support in all aspects of HR law. Ms. Young is a frequent speaker on employment law and human resource topics including employment agreements, federal and state legal compliance, wage matters, and anti-harassment and anti-discrimination policies and practices. Ms. Young is active in her community and also serves as a member of the Board of Advisors of FCBank, a division of CNB Bank, headquartered in Worthington, Ohio. Ms. Young received a Bachelor of Arts degree from Miami University and Juris Doctorate from The Ohio State University Mortiz College of Law. The Board believes that Ms. Young’s qualifications, including her broad human resources and employment law experience as well as her knowledge of and involvement in the Central Ohio market, will provide critical support to the Corporation’s business and strategic goals.
The following Class 1 directors’ terms expire at the time of the annual meeting in
2023.2026. | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Age at
December 31,
2020
2023 | | (Past Five Years) | | Positions Held at CNB | | Director
Since | |
Peter F. Smith
Jeffrey S. Powell Independent Director | | 59 | | 66 | Chairperson of the Board, Attorney at Law
| | — | | | 9/12/1989 | |
Jeffrey S. Powell
Independent Director
| | 56 | | appointed effective January 1, 2024
President, J.J. Powell, Inc. (Petroleum Distributor) | | — | | — | | 12/27/1994 | |
Peter F. Smith
Independent Director | | 69 | | Former Chairperson of the Board (Retired as Chairperson effective December 31, 2023),
Attorney at Law | | — | | 09/12/1989 |
| Francis X. Straub, III
Independent Director
| | 63 | | 60President/CEO of U.S. Complete Care Inc. | | — | | Owner/Pharmacist/CFO/Director, St. Mary’s Pharmacy | — | | | 4/19/2015 | |
Peter C. Varischetti
Independent Director
| | 54 | | 51 | President, Varischetti Holdings, LP | | — | | — | | 7/1/8/11/2015 | |
Peter F. Smith obtained his Bachelor
Jeffrey S. Powell serves as Chairperson of Arts from Williams College in 1976the Board effective January 1, 2024, and later graduated from the Dickinson School of Law in 1981. He joined his late father, William U. Smith, in the general practice of law in Clearfield after graduation. Mr. Smith has continued in the practice, representing a diverse group of businesses and their owners. He concentrates his practice on commercial transactions, real estate, mineral law, estate planning and related litigation. Mr. Smith has served onas a director of both the Ethics CommitteeCorporation and the Bank for 29 years. Prior to becoming Chairperson of the Pennsylvania Bar Association since 1994 and has authored numerous written opinions to assist other lawyers with ethical issues, and has been invited to speakBoard, Mr. Powell served as panelist by the Pennsylvania Bar Institute. Mr. Smith has served and continues to serve numerous charitable and public services organizations. Mr. Smith’s legal experience provides the Corporation’s Board with valuable insight into legal matters affecting it and its markets. Mr. Smith also brings strong corporate governance experience to the Board.Jeffrey S. Powell serves as Audit Committee Chairperson.Chairperson for 26 years. He is a graduate of The Pennsylvania State University where he earned a degree in Business Administration. He is currently the President of J.J. Powell Inc., a petroleum marketer, as well as Snappy’s Convenience Stores. Mr. Powell’s extensive executive experience in the petroleum marketing and retail convenience industry, as well as nearly three decades of serving on the Boards of the Corporation and the Bank, provide strong knowledge regarding finance, operations compliance and planning to the Board.
Peter F. Smith graduated from Williams College in 1976 and from the Dickinson School of Law in 1981. Mr. Smith has practiced law in central Pennsylvania since 1981. He represents a diverse group of businesses and their owners concentrating on commercial transactions, real estate, mineral law, estate planning and related litigation. Mr. Smith served on the Ethics Committee of the Pennsylvania Bar Association for over 20 years. He has authored numerous written opinions to assist other lawyers with ethical issues. Mr. Smith has also spoken as a panelist and presented seminars for the Pennsylvania Bar Institute. He continues to serve numerous charitable and public service organizations. Mr. Smith was Chairperson of the Board from 2017 through December 31, 2023. Mr. Smith’s legal and leadership experience provides the Board with valuable insight into legal and other matters affecting CNB, its customers and its markets. Mr. Smith has strong corporate governance, lending and financial experience resulting from thirty-four years tenure as a director of the corporation and its subsidiary CNB Bank.
Francis X. Straub, III managing executive officer and director is President/CEO of St. Marys Pharmacy,U.S. Complete Care Inc. and Bennetts Valley Pharmacy, Inc., was appointed to the board of CNB Bank in November 2015. Mr. Straub brings a diverse background in healthcare and entrepreneurial culture, which beganentrepreneurship, deeply rooted in his family’sfamily's pharmacy over 40 years ago. Mr. Straub holdslegacy spanning four decades. He is an alumnus of Duquesne University, where he earned a Bachelor of Science degree in the field of pharmacy from Duquesne Universitypharmacy. Mr. Straub’s commitment to community and has been a practicing, licensed pharmacist at St. Marys Pharmacy for over 30 years. He has served onindustry is evident through his numerous charitable and public service boards and currently servesboard positions, including his role as a memberChairman of the Board of Directors/TreasurerDirectors at Value Drug Company, Executive Team Board Member/Vice Chairperson atand as a board member on the Penn Highlands ElkNorthern Regional board and Chairperson of the Board of PCC Management Holdingsat Straub Brewery Inc. Additionally, Mr. Straub is involved withFurthermore, his business acumen extends to industrial manufacturing, oil and gas production, medical services, and commercial real estate development.
Peter C. Varischetti, serves as Audit Committee Chairperson. He is the President of Varischetti Holdings, LP, was appointed toa privately held holding company that includes businesses in the board of CNB Bankmanufacturing industry, gas field services, fabrication, electrical contracting, automation & control systems, and CNB Financial Corporation in July 2015.real estate. He has served on numerous charitable and public service boards and
currently serves asis also a director and officer of Guardian Elder CareHealthcare Holdings, Inc., a healthcare services company providing skilled nursing, rehabilitation, pharmacy, and chairperson of both the Brockway Schoolshealthcare staffing services to communities in Pennsylvania and Community Education Foundation, and the Brockway Center for Arts & Technology.West Virginia. Additionally, Mr. Varischetti is the President of Varischetti Sports, LLC, which owns a board memberminority interest in the Pittsburgh Steelers. In these capacities, Mr. Varischetti is ultimately responsible for leading various businesses across a number of DuBois Central Catholicindustries and servesoversees all major corporate functions, including such companies’ financial reporting and merger and acquisition activities. This leadership experience, together with serving on the Erie Diocesan Finance Council andAudit Committee of the Parish Finance Council of St. Tobias Church.Board since 2017, has enabled Mr. Varischetti serves onto develop an understanding of generally accepted accounting principles and financial statements, the boardability to analyze financial statements of directors fora complexity similar to those of the FrankCorporation, and an understanding of internal control over financial reporting and audit committee functions. In addition to his for-profit work, Mr. Varischetti Foundation,devotes considerable time to charitable and public service causes. He is currently a member of the Board of Trustees for the University of Pittsburgh and is chairpersonchairman of the SchoolBrockway Center for Arts and Technology. He also serves on the Erie Diocesan Finance Council, the Parish Finance Council of HealthSt. Tobias Church, the Finance Committee of DuBois Central Catholic and Rehabilitation Sciencesthe Board of Visitors. Mr.Directors for the Frank Varischetti earned a Bachelor of Science in Business Administration and Psychology from the University of Pittsburgh.
The following Class 2 directors’ terms expire at the time of the annual meeting in 2022.
| | | | | | | | | | |
Name
| | Age at
December 31,
2020 | | Business Experience
(Past Five Years)
| | Positions Held at CNB | | Director
Since | |
Richard L. Greslick, Jr.
| | 44 | | Senior Executive Vice President, Chief Support Officer and Secretary, CNB Financial Corp. and CNB Bank | | Senior Executive Vice
President, Chief
Support Officer and
Secretary, CNB
Financial Corp. and
CNB Bank | | | 1/1/2012 | |
Deborah Dick Pontzer
Independent Director
| | 60 | | Economic Development and Workforce Specialist for Congressman Glenn Thompson | | — | | | 6/10/2003 | |
Nicholas N. Scott
Independent Director
| | 48 | | Vice President/Owner Scott Enterprises (Hospitality Industry) | | — | | | 5/14/2013 | |
Julie M. Young
Independent Director
| | 47 | | Attorney, JMY Law, LLC, Worley Law, LLC | | — | | | 5/14/2019 | |
Richard L. Greslick, Jr., has been with the Corporation since 1998 and previously served as Controller and Vice President of Operations of CNB Bank. In 2009, Mr. Greslick was named Vice President of Administration of CNB Bank and Secretary of the Corporation. In July 2010, Mr. Greslick was named Senior Vice President of Administration of CNB Bank. In December 2012, Mr. Greslick was named Senior Executive Vice President and Chief Support Officer (“CSO”) of CNB Bank. Mr. GreslickFoundation. He holds a Bachelor of Science degree in AccountingBusiness Administration from Indiana University of Pennsylvania and is a 2009 graduate of the American Bankers Association’s Stonier National Graduate School of Banking in Philadelphia, PA. Mr. Greslick has served and continues to serve on various boards within the community. Mr. Greslick’s experience as an executive of the Corporation provides him with thorough knowledge of the Corporation’s opportunities, challenges and operations.
Deborah Dick Pontzer is an Economic Development and Workforce Specialist for Congressman Glenn Thompson. In that capacity, she works with business, industry, and communities to identify and obtain the resources necessary for continued economic development and growth. Her prior experience is in higher education and public accounting, including working as a senior associate in the Business Investigation Services Group for a Big 4 international firm. Ms. Pontzer also served as executive director for the Community Education Council of Elk and Cameron Counties, and her duties included preparation of budgetary, financial, and statistical data, as well as income and payroll tax reporting. Mr. Pontzer served as director of Outreach and Business Services for the University of Pittsburgh at Bradford. In that position, she supervised staff who prepared prospective financial statements for small businesses and entrepreneurs, managed grant funds, and oversawPittsburgh. Given this background, the operation of the adult continuing education division. She is active in her community and currently serves as a Trustee for The Stackpole-Hall Foundation, including services on the foundation’s Audit and Investment Committees. Ms. Pontzer earned a B.A. from Mount Holyoke College and an M.B.A. from the American Graduate School of International Management. Ms. Pontzer’s experience as Economic Development and Workforce Specialist for Congressman Glenn Thompson enables her to provide valuable perspective to the Board.
Nicholas N. Scott is Vice President/Owner of Scott Enterprises of Erie, PA. Mr. Scott has served in this role since 1995. Mr. Scott serves on the UPMC Hamot Health Foundation Board of Trustees, Penn State Behrend Council of Fellows Executive Board, Visit Erie Board of Directors, Erie Regional Chamber and Growth Partnership Board of Directors, and the Pennsylvania Free Enterprise Week Board of Directors. He also lends his expertise to the United Way’s Success by 6 Committee, and the Pennsylvania Early Learning Investment Commission. As a business leader responsible for operations and development of the third-generation family owned hospitality business, Mr. Scott applies his expertise in strategic planning and provides leadership and guidance to the Board.
Julie M. Young is an attorney specializing in employment law and human resources at JMY Law, LLC. Ms. Young has served in this role since 2016. With over 19 years of experience navigating federal and state employment laws, Ms. Young works closely with small and mid-sized businesses to provide comprehensive employment law services. Prior to her current position, Ms. Young practiced employment law at Worley Law, LLC. Ms. Young is a frequent speaker on employment law and human resource topics, from structuring employment agreements, to federal and state compliance considerations and advising on anti-harassment and anti-discrimination policies and practices. Ms. Young is active in her community and previously served as a member of the board of advisors of FCBank, a division of CNB Bank headquartered in Worthington, Ohio, since December 2017. Ms. Young received her B.A. from Miami University of Ohio and J.D. from The Ohio State University Mortiz College of Law. The Board believes that Ms. Young’s qualifications include her broad human resourcesMr. Varischetti meets the requirements adopted by the SEC for qualification as an audit committee financial expert.
PROPOSAL 2. CHARTER AMENDMENT
The Board is asking our shareholders to amend the Corporation’s Articles of Incorporation to grant the Board the concurrent right to amend the Corporation’s Bylaws by the vote of a majority of the directors present and employment law experience,voting at a meeting at which will provide critical supporta quorum is present; provided that any bylaw provision amended or adopted by the Board that adversely affects the rights of the shareholders must be ratified by the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on the matter prior to such amended or adopted bylaw provision taking effect; provided further that any bylaw provision amended or adopted by our shareholders may only be amended or repealed by the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on the matter; and provided further that any bylaw provision amended or adopted by the Board may be amended or repealed by the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on the matter.
Our Board is committed to strong and effective corporate governance and monitors regularly our corporate governance policies and practices and believes that amending our Articles of Incorporation to grant the Board the concurrent right to amend our Bylaws is in our best interests and in the best interests of our shareholders. Our Bylaws establish a number of fundamental corporate governance operating principles, including rules for meetings of directors and shareholders, election and duties of directors and officers and issuances of shares. Due to the Board’s fiduciary obligations to the Corporation and all of our shareholders, including institutional investors, both active and passive, and retail and individual investors, we believe that it is appropriate for the Board to have the ability to make appropriate amendments to our Bylaws. Amending our Articles of Incorporation to provide our Board with the power to amend our Bylaws will facilitate our ability to efficiently implement and adapt corporate policies and procedures as changing circumstances may necessitate, without having to incur the expense and delay of soliciting proxies and votes from our shareholders and holding a meeting of our shareholders. If this proposal is approved, the power that will be conferred upon the directors will not divest or limit the power of shareholders to adopt, amend or repeal our bylaws, and our Board will not have the power to amend or repeal a Bylaw provision that is adopted or amended by our shareholders.
After careful consideration, we believe that such action is in the best interests of our shareholders. We are proposing an amendment to Article 9 of our Articles of Incorporation to provide that our Bylaws may be amended by the vote of a majority of the directors present and voting at a meeting at which a quorum is present or by the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on the matter; provided that any bylaw provision amended or adopted by the Board that adversely affects the rights of the shareholders must be ratified by the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on the matter prior to such amended or adopted bylaw provision taking effect; provided further that any bylaw provision amended or adopted by our shareholders may only be amended or repealed by the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on the matter; and provided further that any bylaw provision amended or adopted by our Board may be amended or repealed by the affirmative vote of a majority of the votes cast by all shareholders entitled to vote on the matter. A copy of the proposed amendment to our Articles of Incorporation is attached as Appendix A to this Proxy Statement and incorporated by reference into this proposal. Finally, the Board believes that this amendment better aligns our practices with those of the majority of public companies, including the Corporation’s businesspeers, nearly all of which grant their board of directors the right to amend their bylaws.
If this proposal is approved, the Board intends to adopt an amendment to Section 8.08 of our Bylaws, which addresses the ability to make amendments, to conform to the similar provision of Article 9 of our Articles of Incorporation.
Vote Required
The affirmative vote of a majority of the votes cast by all shareholders entitled to vote on this proposal is required to approve this proposal. For purposes of the vote on this proposal, abstentions and strategic goals.other shares not voted (whether by broker non-vote or otherwise) will not be counted as votes cast and will have no effect on the result of the vote.
The BoardunanimouslyrecommendsthatshareholdersvoteFORtheproposal.
PROPOSAL
2.3. ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) added Section 14A to the Securities Exchange Act of 1934 (the “Exchange Act”), which requires that
wethe Corporation provide
ourits shareholders with the opportunity to approve, on a
non-binding advisory basis, the compensation of
ourits named executive officers (the “NEOs”) as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC.
As described in greater detail under the heading “Compensation Discussion and Analysis,”
we seekthe Corporation seeks to align the interests of our NEOs with the interests of our shareholders. Our
executive compensation programs are designed to reward our NEOs for the achievement of short-term results and long-term growth
that are consistent with enhancing shareholder value, while at the same time
avoiding the encouragement ofdiscouraging unnecessary or excessive risk-taking.
The Corporation is presenting the following proposal, which gives you as a shareholder the opportunity to endorse or not endorse our compensation program for NEOs by voting for or against the following resolution (a
“say-on-pay”“Say-On-Pay” vote). While the vote on the resolution is advisory in nature and therefore will not bind
usthe Corporation or the Board to take any particular action, our Board intends to carefully consider the shareholder vote resulting from the proposal in making future decisions regarding our
executive compensation program.
“RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the Corporation’s NEOs, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related narrative executive compensation disclosures contained in this Proxy Statement.”
The affirmative vote of a majority of the votes cast by all shareholders entitled to vote on this proposal is required to approve (on a
non-binding advisory basis) the compensation of the Corporation’s named executive officers. For purposes of the vote on this proposal, abstentions and other shares not voted (whether by broker
non-vote or otherwise) will not be counted as votes cast and will have no effect on the result of the vote.
Our
Recommendation:Recommendation
The Board unanimously recommends that shareholders vote FOR the resolution approving on a non-binding advisory basis the compensation of the Corporation’s named executive officers.
PROPOSAL
3.4. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board is responsible for selecting the Corporation’s independent registered public accounting firm. At its meeting held on
March 3, 2021,February 13, 2024, the Audit Committee appointed
CroweFORVIS, LLP as the independent registered public accounting firm for the fiscal year ending December 31,
2021.2024. Although shareholder approval for this appointment is not required, the Board is submitting the selection of
CroweFORVIS, LLP for ratification to obtain the views of shareholders. If the appointment is not ratified, the Audit Committee will reconsider its selection.
In making the appointment of
CroweFORVIS, LLP as the Corporation’s independent registered public accounting firm for the fiscal year ending December 31,
2021,2024, the Audit Committee considered whether
CroweFORVIS, LLP’s provision of services other than audit services is compatible with maintaining independence as our independent auditors and decided that the provision of such services is compatible with maintaining independence.
The affirmative vote of a majority of the votes cast by all shareholders entitled to vote on this proposal is required to approve the ratification of the appointment of
CroweFORVIS, LLP as the Corporation’s independent registered public accounting firm. For purposes of approving Proposal 3, abstentions and other shares not voted will not be counted as votes cast and will have no effect on the result of the vote. Even if the appointment of
CroweFORVIS, LLP as the Corporation’s independent registered public accounting firm is ratified, the Audit Committee may, in its discretion, change that appointment at any time during the year should it determine such a change would be in our and our shareholders’ best interests.
Our
Recommendation:Recommendation
The Board unanimously recommends that shareholders vote FOR ratification of the appointment of independent auditors.
CONCERNING THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Corporation’s independent registered public accounting firm for the fiscal year ended December 31,
20202023 was
CroweFORVIS, LLP. The Audit Committee
hashad selected
CroweFORVIS, LLP to be the independent registered public accounting firm for the fiscal year ending December 31,
2020.2023. Representatives of
CroweFORVIS, LLP are expected to be
present atavailable during the
virtual Annual Meeting to respond to appropriate questions and to make such statements as they may desire, including comments on the financial statements of the Corporation.
Audit Fees.
The following table
sets forthshows the
aggregate fees
billed topaid or accrued by the Corporation for
professional services provided by FORVIS, LLP during the fiscal
yearsyear ended December 31,
20202023 and
2019 by the Corporation’s independent registered public accounting firm Crowe LLP. | | | | | | | | |
| | | December 31, | |
| | | 2020 | | | 2019 | |
Audit Fees | | $ | 316,000 | | | $ | 312,025 | |
Audit-Related Fees | | | 295,000 | | | | 15,000 | |
Tax Fees | | | 7,500 | | | | 7,500 | |
All Other Fees | | | 143,000 | | | | 96,000 | |
| | | | | | | | |
| | $ | 761,500 | | | $ | 428,025 | |
| | | | | | | | |
2022:
| | | | | | | | | | | |
| | December 31, |
| | 2023 | | 2022 |
| Audit Fees | $ | 432,200 | | | $ | 415,000 | |
| Audit-Related Fees | 23,150 | | | — | |
| Tax Fees | 25,300 | | | 28,000 | |
| All Other Fees | — | | | 75,000 | |
| $ | 480,650 | | | $ | 518,000 | |
Audit fees represent fees for professional services rendered by
CroweFORVIS, LLP in connection with the audit of the Corporation’s consolidated financial statements and internal control over financial reporting and reviews of the consolidated financial statements included in the Corporation’s quarterly reports on Form
10-Q. Tax fees relate to the Corporation’s Federal and State income tax compliance. Audit-related fees for
20202023 represent
fees related to audit
feesservices performed for the
acquisitionCNB Bank Employees' Savings & Profit-Sharing Plan and Trust. The amount paid for “All Other Fees” for 2022 represent fees related to certain services provided by FORVIS, LLP in support of
Bank of Akron and the
adoption of CECL. Audit-related fees for 2019 represent audit fees for the captive insurance company. Tax feesCorporation’s common equity capital raise in
2020 and 2019 reflect tax compliance services for the captive insurance company. All other fees in 2020 represent consent letters and comfort letters for our At the Market Common Stock offering and Preferred Stock offering. All other fees in 2019 represent the comfort letter for our At the Market offering and delivery of Crowe LLP’s consent in connection with the filing of a Form S-8.2022.
Auditor Independence.Independence
The Audit Committee of the Board believes that the non-audit services provided by CroweFORVIS, LLP arewere compatible with the effective provision of support to the Corporation while maintaining the auditor’s independence.independence in connection with the audit of the Corporation’s consolidated financial statements and internal control over financial reporting. None of the time devoted by CroweFORVIS, LLP on its engagement to audit the financial statements for the year ended December 31, 20202023 is attributable to work performed by persons other than full-time, permanent employees of CroweFORVIS, LLP. The Audit Committee is responsible for approving any service provided by Crowe LLP.the Corporation’s independent registered public accounting firm. The Audit Committee pre-approved all services performed by FORVIS, LLP during 2023 and 2022, including those listed in the table above.
The business and affairs of the Corporation are managed under the direction of the Board. Members of the Board are kept informed of the Corporation’s business through discussions with the Chairperson of the Board and the Corporation’s executive officers, by reviewing materials provided to them and by participating in meetings and strategic planning sessions of the Board and its various committees. The Board is also kept apprised by the Chairperson of the Board and
members of management of continuing educational programs on corporate governance and fiduciary duties and responsibilities.
The Corporation believes in the importance of sound and effective corporate governance and has adopted policies and promoted practices which it believes enhance
the corporate governance of the Corporation.
Board Leadership Structure
The Corporation has elected to have two separate individuals as Chief Executive Officer (“CEO”) and Chairperson. The
CorporationBoard believes that this separation facilitates the independence of the Board and is appropriate for the size and structure of the Corporation.
In addition, this structure allows us to draw upon the skills and experiences of both our Chairperson and our CEO, while allowing our CEO to focus on overseeing the Corporation’s day-to-day operations and long-term strategic planning. If in the future, the Board, after considering facts and circumstances at that time, appoints the CEO as Chairperson of the Board, we will promptly publicly disclose the appointment.
The Chairperson’s duties and responsibilities include: (1) developing and establishing Board meeting agendas and the appropriate schedule of Board meetings, in consultation with the CEO and the other directors; (2) along with other Board members, engaging in communications with shareholders and other stakeholders, including at our annual meetings; (3) engaging with the CEO, chairs of Board committees, and other members of the Board regarding Board structure; and (4) encouraging professional development of the Board members and executive officers.
Mr. Smith served as Chairperson of the Board through December 31, 2023, when he stepped down as Chairperson, but remained as a Board member, in advance of his mandatory retirement in 2024 in accordance with the age limitation for directors under the Corporation’s Bylaws. The Board elected Mr. Powell as Chairperson, effective January 1, 2024. Mr. Powell has served as a director of the Corporation and CNB Bank since 1994 and served as the Audit Committee Chairperson for 26 years prior to becoming Board Chairperson.
Risk identification and management are essential elements for the successful management of the Corporation. In the normal course of business, the Corporation is subject to various types of risk. These risks are controlled through policies and procedures established throughout the Corporation, which are monitored and reviewed by the
Board. Our Board
is responsible for overseeing our company-wide approach to the identification, assessment, and management of short-term, intermediate-term, and long-term risks facing the Corporation. The Board recognizes its responsibility for overseeing the assessment and management of risks that may threaten the Corporation's safety and soundness, and the successful execution of our long-term strategies, and in
accordancethis capacity the Board consults with
established Corporation policies.outside advisors and experts when necessary.
The Corporation’s Enterprise Risk Management (“ERM”) program includes measurement and monitoring of the following risks: credit, market, liquidity, operational, compliance, strategic and reputation. An ERM Risk Assessment Team,
led by the Corporation’s Chief Risk Officer, evaluates, analyzes, and reports annual risk assessment(s) and provides quarterly updates to the ERM Risk Steering Committee, comprised of the Executive Management Team. The Board of Directors has established an ERM Policy, Risk Philosophy Statements, and
a Risk Appetite
StatementsStatement that summarize the risk appetite of the Corporation as well as the expected reward for the risks.
In addition to the ERM program, the following risks are specifically addressed as outlined below: market, credit, and liquidity risk.
Market risk is the sensitivity of net interest income and the market value of financial instruments to the direction and frequency of changes in interest rates. Market risk results from various repricing frequencies and the maturity structure of the financial instruments owned by the Corporation. The Corporation uses its asset/liability management policy and systems to control, monitor, and manage market risk. Such policies and systems are monitored by the Management Asset/Liability Committee,
which generally meets monthly, and by the Asset/Liability Committee of the Board, which meets four times per year.
Credit risk represents the possibility that a customer may not perform in accordance with contractual terms. Credit risk results from loans with customers and the purchase of investment securities. The Corporation manages credit risk by following an
established credit policy and through a disciplined evaluation of the adequacy of the allowance for
loancredit losses. Also, the investment policy limits the amount of credit risk that may be taken in the securities portfolio. Such policies and systems are monitored by both the Asset/Liability Committee of the Board and the Loan Committee of the Board, both of which meet four times per year.
The evaluation of the allowance for credit losses by the Corporation’s independent registered public accounting firm, which identified the allowance for credit losses as a critical audit matter, is also subject to review by the Audit Committee.
Liquidity risk represents the inability to generate or otherwise obtain funds at reasonable rates to satisfy commitments to borrowers and obligations to depositors. The Corporation has established guidelines within its
asset liability management policy to manage liquidity risk. These guidelines include establishing contingent funding alternatives.alternatives, and evaluation of the adequacy of on-hand and contingent liquidity resources compared to uninsured deposits. Such guidelines are monitored at least monthly by the Management Asset/Liability Committee, which generally meets monthly, and by the Asset/Liability Committee of the Board.
Board, which meets four times per year.
Meetings and Committees of the Board
The Board held ten meetings during
2020. All twelve directors attended the 2020 Annual Meeting of Shareholders.2023. Each incumbent director attended at least 75% of the aggregate of (i) the total number of meetings held by the Board during the period that the individual served and (ii) the total number of meetings held by all committees of the Board on which the individual served during the period that the individual served.
All directors attended the 2023 Annual Meeting of Shareholders.
The Board of the Corporation and the Board of
theCNB Bank have
a number ofthree standing joint committees that serve both the Corporation and the Bank, including
standingthe Audit
Committee, Executive Compensation and
Personnel Committee, and the Corporate Governance/Nominating
Committees.Committee. Directors
Peter F. Smith, Joseph B. Bower, Jr.Jeffrey S. Powell, Michael D. Peduzzi, and Richard L. Greslick, Jr. are
ex-officio members of all committees if not otherwise named, except
for the Audit, Corporate Governance/Nominating and Executive Compensation
and Personnel Committees as to Mr.
BowerPeduzzi and Mr. Greslick.
Audit Committee.Committee
The Audit Committee met four times in 2020.2023. The Audit Committee appoints the Corporation’s independent registered public accounting firm, reviews and approves the audit plan and fee estimate of the independent registered public accounting firm, appraises the effectiveness of the internal and external audit efforts, evaluates the adequacy and effectiveness of accounting policies and financial and accounting management, approves and evaluates the internal audit function, pre-approves all audit and any non-audit services, and reviews and approves the annual and quarterly financial statements. The Audit Committee also is responsible for reviewing and overseeing the Corporation’s privacy, information technology security and cybersecurity risk exposures. The Audit Committee has the authority to engage legal counsel or other experts or consultants as it deems appropriate to carry out its responsibilities, at the Corporation’s expense. The members of the Audit Committee are Peter C. Varischetti (Committee Chairperson), Jeffrey S. Powell Chairperson, Peter F. Smith, Robert W. Montler,(Board Chairperson), Joel E. Peterson Deborah Dick Pontzer, and Peter C. Varischetti.S. Smith. The Corporation’s Board adoptedhas a written charter for the Audit Committee, on May 3, 2001. The charterwhich is reviewed annually by the Audit Committee and was updated in 2020.Committee. The charter is available on the Corporation’s website at www.cnbbank.bank. In the opinion of the Corporation’s Board, the members of the Audit Committee do not have a relationship with the Corporation or any of its affiliates that would interfere with the exercise of independent judgment in carrying out their responsibilities as directors. None of them is or has for the past three years been an employee of the Corporation or any of its affiliates; no immediate family members of any of them is or has for the past three years been an executive officer of the Corporation or any of its affiliates; and they otherwise meet the standards for independence required by NASDAQ.
The Board has also determined that Mr.
MontlerVarischetti qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation
S-K. Mr.
MontlerVarischetti is also an independent director.
The Audit Committee must
pre-approve all permitted
non-audit services performed by the Corporation’s external
auditindependent registered public accounting firm. The Audit Committee may delegate such authority to a subcommittee, provided that any decisions of the subcommittee are presented to the full Audit Committee at its next scheduled meeting.
The Audit Committee has submitted the following report (the “Audit Committee Report”) for inclusion in this Proxy Statement:
The Audit Committee has reviewed the audited financial statements for the year ended December 31, 20202023 and has discussed them with management. The Audit Committee has also discussed with CroweFORVIS, LLP, the Corporation's external independent registered public accounting firm, the matters required to be discussed by the Public Company Accounting Oversight Board’s Auditing Standard No. 16 and by SEC rules. The Audit Committee has received the written disclosures and the letter from CroweFORVIS, LLP required by applicable requirements of the Public Company Accounting Oversight Board
regarding CroweFORVIS, LLP’s communications with the Audit Committee, and has discussed with CroweFORVIS, LLP their independence. Based on this, the Audit Committee recommended to the Board that the audited
financial statements be included in CNB Financial Corporation’s Annual Report on Form
10-K for the fiscal year ended December 31,
20202023 for filing with the SEC.
Submitted by the Audit Committee:
| | | | | | | | |
| Peter C. Varischetti, Committee Chairperson | Jeffrey S. Powell Chairperson | Joel E. Peterson |
| Peter F. Smith | | | Robert W. Montler
| | |
Joel E. Peterson | | Deborah Dick Pontzer | | Peter C. Varischetti |
This report of the Audit Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Exchange Act and shall not be deemed filed under the Exchange Act.
Executive Compensation Committee. and Personnel Committee
The Executive Compensation
and Personnel Committee (the “ECC”) consists of the following independent directors as defined by NASDAQ rules:
Richard B. Seager, Chairperson,Michael Obi (Committee Chairperson), Jeffrey S. Powell (Board Chairperson), Nicholas N. Scott, Peter F. Smith,
Robert W. Montler, Deborah Dick Pontzer, Jeffrey S. Powell,Francis X. Straub, III and Julie
Young and Nicholas N. Scott.Young. The
CommitteeECC met
sevenfour times during
2020.2023. See “Compensation Determination Process” for more information about the ECC.
Corporate Governance/Nominating Committee. Committee
The Corporate Governance/Nominating Committee
(the “CGN Committee”) met
threefive times during
2020.2023. The
CGN Committee consists of the following independent directors as defined by NASDAQ rules:
Jeffrey Powell (Committee and Board Chairperson), Peter F. Smith
Chairperson, Robert W. Montler,(Former Chairperson), Michael Obi, Joel E. Peterson, Deborah Dick Pontzer, and
Jeffrey S. Powell.Richard B. Seager. The
CGN Committee was established by resolution of the Board and recommends to the Board candidates for nomination for election to the Board. Any shareholder who wishes to have the
CGN Committee consider a candidate should submit the name of the candidate, along with any biographical or other relevant information that the shareholder wishes the
CGN Committee to consider and the consent of such candidate evidencing his or her willingness to serve as a director, to the
Chairperson or President of the Corporation at the address appearing on the Notice of Annual Meeting no later than November
11, 2021.8, 2024 if the shareholder proposes that such candidate be included in the Corporation’s proxy statement. All recommendations are subject to the process described below.
We believe that the collective competence as reflected by the professional quality, focus and diversity of skills, experience, and perspective of the Board have been a key driver of the Corporation’s success, and that the governance strength of the Board is a competitive advantage. The
CGN Committee has the responsibility of reviewing and evaluating candidates for election or appointment to the Board,
strategically thinking about board refreshment and
comparessuccession planning, rather than simply reacting to isolated retirements. In anticipating Board vacancies and potentially adding new directors, the CGN Committee evaluates, among other things, the current Board’s diversity of professional backgrounds and expertise, range of skills, education and experience, and further alignment of the demographic profile of the Board in gender, race, and ethnicity with the shareholder base and the communities and customers served by the Corporation. In identifying candidates to
the current Board to ensure thatjoin the Board,
hasthe CGN Committee solicits input from a
groupvariety of
individualssources, including existing directors, advisory board members in its banking divisions, executive and senior management members, third-party firms that
are represented by diverse professions, experience, education or skill. The process utilized by the Committee to recommend a candidate consists of first reviewingspecialize in identifying potential candidates, and formal expressions of interest by
interested individuals
whichthat have been communicated to the
CGN Committee.
In addition, the Committee obtains input from shareholders, directors and management regarding other potential candidates who have not indicated an interest in a Board position. Utilizing the selection criteria set forth below, the
CGN Committee selects a
prospective candidate and then conducts an interview in order to further evaluate the individual. Subsequent to the interview the
CGN Committee meets to determine whether to recommend the candidate to the Board for election or appointment. The Board,
exclusive of excluding all non-independent directors, either accepts or rejects the
CGN Committee’s recommendation.
The
CGN Committee utilizes various selection criteria to evaluate a candidate for election or appointment to the Board including, among others, the following minimum criteria:
| 1. | Residency within the market area of CNB Bank.
|
| 2. | Ability and willingness to commit time necessary to fulfill Board and committee duties.
|
| 3. | Strong interest in or familiarity with the financial services industry.
|
| 4. | Successful career in a business or profession suitable to our business plan within the Bank’s market area.
|
| 5. | Character and reputation.
|
| 6. | Whether the candidate is “independent” under SEC and NASDAQ rules.
|
| 7. | Provide expertise in an area needed for the Board.
|
1.Residency within the market area of CNB Bank.
2.Ability and willingness to commit time necessary to fulfill Board and committee duties.
3.Strong interest in or familiarity with the financial services industry.
4.Successful career in a business or profession, or valuable community knowledge and perspective, suitable to our business and community service plans within the Bank’s market area.
5.Character and reputation.
6.Whether the candidate is “independent” under SEC and NASDAQ rules.
7.Provide expertise in an area needed for the Board.
No incumbent director may be nominated without approval of at least 25% of the existing directors and no person not then a director may be proposed for nomination without approval of at least
two-thirds of the directors. The Bylaws provide that any director, upon first being appointed or elected to serve as a director, must own the lesser of 1,000 unencumbered shares of common stock of the Corporation or the number of shares equivalent to $15,000 of market value as of the date of the appointment or election. Further, on or before the third anniversary of the director’s first election to the Board, the director must own at least the lesser of 2,500 unencumbered shares of common stock of the Corporation or the number of shares equal to $25,000 of market value.
The Corporate Governance/Nominating Committee has a charter, a copy of which is available on the Corporation’s website at www.cnbbank.bank.
Communications with Directors
Any shareholder who wishes to communicate with the directors (or with any individual director) should send a letter to the directors as follows: ATTN: Corporate Secretary - Communication to Directors, CNB Financial Corp.,
POP.O. Box 42, Clearfield, PA
16830-0042.16830. The Corporate Secretary will regularly forward all such correspondence to the directors.
Director Attendance at Annual Meetings
The Corporation typically schedules a meeting of the Board in conjunction with the annual meeting and expects that the members of the Board will attend the annual meeting, absent a valid reason, such as a previously scheduled conflict. All
twelve of the individuals then serving as directors attended the
20202023 Annual Meeting of Shareholders in April
2020.2023.
The Corporation and the Board believe that continuing director education is essential to the Board’s performance and continued oversight of the Corporation and its business. On May 19, 2020,9, 2023, the Board attended a formal training session related to the Bank Secrecy Act of 1970, Office of Foreign Assets Control requirements and anti-money laundering, as well as the expectations for a public company board and managing through COVID-19.laundering. In addition, periodic training sessions for the Board occur during regularly scheduled boardBoard and committee meetings. Topics covered during these trainings in 20202023 included information technology, information security, cyber securitycybersecurity, transactions with insiders, bank owned life insurance policies and asset-liability management. The Board also attended a formal unconscious bias training on October 27, 2020. Finally, individual Board members, at times, attend specialized industry conferences based on director responsibilities, their committee assignments, and other desired training needs that are identified throughto enhance their knowledge of the Board’s self-assessment process.financial service industry and related governance.
Our Board brings diverse experience and perspectives to areas critical to our business. Their collective knowledge ensures appropriate management and risk oversight and supports our strategy of long-term sustainable shareholder value.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | INDEPENDENT DIRECTORS | | | INSIDERS | |
| | | Smith | | | Montler | | | Peterson | | | Pontzer | | | Powell | | | Scott | | | Seager | | | Straub | | | Varischetti | | | Young | | | Bower | | | Greslick | |
Financial industry experience | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | | | X | |
CEO/business head | | | | | | | X | | | | X | | | | | | | | X | | | | | | | | X | | | | X | | | | X | | | | | | | | X | | | | | |
Business ethics | | | X | | | | | | | | | | | | X | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Technology | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | | | X | | | | | | | | | | | | X | | | | X | |
Human capital management/compensation | | | | | | | X | | | | | | | | | | | | X | | | | | | | | X | | | | | | | | | | | | X | | | | X | | | | X | |
Audit Committee financial expert | | | | | | | X | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mergers and acquisitions | | | X | | | | | | | | | | | | | | | | | | | | X | | | | X | | | | X | | | | X | | | | | | | | X | | | | X | |
Public company governance | | | | | | | | | | | | | | | X | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | | | X | |
Sales and marketing | | | | | | | | | | | X | | | | | | | | X | | | | X | | | | | | | | | | | | | | | | | | | | | | | | | |
Legal, legislative or regulatory | | | X | | | | | | | | | | | | X | | | | | | | | | | | | | | | | | | | | X | | | | X | | | | X | | | | X | |
Demographic background | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ethnic, gender, nationality or other diversity | | | | | | | | | | | | | | | X | | | | | | | | | | | | | | | | | | | | | | | | X | | | | | | | | | |
Years on Board | | | 33 | | | | 16 | | | | 9 | | | | 18 | | | | 25 | | | | 8 | | | | 10 | | | | 6 | | | | 6 | | | | 2 | | | | 16 | | | | 9 | |
Age | | | 66 | | | | 69 | | | | 62 | | | | 60 | | | | 56 | | | | 48 | | | | 63 | | | | 60 | | | | 51 | | | | 47 | | | | 57 | | | | 44 | |
Environmental, Social
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INDEPENDENT DIRECTORS | | INSIDERS |
| Powell | | Obi | | Peterson | | Pontzer | | Scott | | Seager | | Smith | | Straub | | Varischetti | | Young | | Peduzzi | | Greslick |
| Financial industry experience | | | X | | | | | | | | | | X | | | | | | | | X | | X |
| CEO/business head | X | | X | | X | | | | | | X | | | | X | | X | | | | X | | |
| Business ethics | | | X | | X | | X | | | | | | X | | | | | | X | | X | | |
| Technology/cybersecurity | | | | | | | | | | | X | | | | X | | | | | | X | | X |
| Human capital management/compensation | X | | X | | | | | | | | X | | | | | | | | X | | X | | X |
| Audit Committee financial expert | | | | | | | | | | | | | | | | | X | | | | | | |
| Mergers and acquisitions | | | | | X | | | | X | | X | | X | | X | | X | | | | X | | X |
| Public company governance | | | | | | | X | | | | | | | | | | | | | | X | | X |
| Sales and marketing | X | | | | X | | | | X | | | | | | | | | | | | X | | |
| Legal, legislative or regulatory | | | | | | | X | | | | | | X | | | | X | | X | | X | | X |
Board Diversity Matrix
Our Board views its diversity as an important strength, as our commitment to diversity of experience, gender, and
Governanceethnicity as a reflection of the demographics of our shareholder base and the markets we serve is a strength contributing to the Corporation’s success. The following matrix illustrates the demographic diversity of the Board as of the date of the Annual Meeting of Shareholders.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Number of Directors | 12 | | | | | | | |
| | | | | | | | |
| | | Female | | Male | | Non-Binary | | Did Not Disclose
Gender |
| Part I: Gender Identity | | | | | | | | |
| Directors | | 2 | | 10 | | — | | — |
| Part II: Demographic Background | | | | | | | | |
| African American or Black | | — | | 1 | | — | | — |
| Alaskan or Native American | | — | | — | | — | | — |
| Asian | | — | | — | | — | | — |
| Hispanic or Latinx | | — | | — | | — | | — |
| Native Hawaiian or Pacific Islander | | — | | — | | — | | — |
| White | | 2 | | 9 | | — | | — |
| Two or More Races or Ethnicities | | — | | — | | — | | — |
| LGBTQ+ | | — | | — | | — | | — |
| Did Not Disclose Demographic Background | | — | | — | | — | | — |
In addition to the valuable perspectives resulting from the demographic diversity of the Board, the CGN Committee seeks to ensure that there is diversity of thought among directors, resulting in more thorough analysis of each issue and better decisions, which contributes to the positive long-term performance that results in greater shareholder value. The Board and CGN Committee believes that diversity of thought stems from many factors including professional business and services experience, life experience, socio-economic background, gender, race, religion, skill set, and geographic representation. The Corporation servesbelieves that the collective backgrounds and qualifications of the directors should provide a significant composite mix of experience, knowledge, abilities, and shareholder and community representation that will allow the Board to promote successful fulfillment of its responsibilities.
The Board recognizes and values the importance of diversity and the beneficial impact it has on the long-term success of the Corporation. As such, the Board has commenced a search for qualified, independent directors that identify themselves as a cornerstonegender other than male (“Qualified Directors”). The Board continues to be focused on adding Qualified Directors so that the eventual mix of Qualified Directors meets or exceeds 30% of the local community. We are committedtotal number of directors.
Corporate Responsibility Principles and Activities of the Corporation
The Corporation respects and values the responsibilities of the Corporation to
strengtheningbe reasonably environmentally considerate and socially responsible, including by avoiding discrimination of any investors, customers, or employees by promoting an increasingly diverse and inclusive profile in our company, reflective of the communities we
serve, whether throughserve. In addition to the
active volunteeringabove-described Board attributes, the Corporation emphasizes relevant governance principles in strategic planning, human capital management and leadership development (which includes recruiting and retaining employees), and vendor management, as relationships with third parties represent critical connections to and extensions of
our employees, corporate philanthropy or our leadership on environmental responsibilitythe values and
sustainability initiatives.The Corporation’s environmental awarenessoperating principles of the Corporation and sustainability initiatives are driven by encouragingBoard.
Strategic Planning and
facilitating widespread recycling, responsible waste management practices and energy conservation. CNB has made significant progress on the environmental-friendly initiatives discussed in our proxy statement for the 2020 Annual Meeting of Shareholders. For example, even before the COVID-19 pandemic significantly reduced work-related travel, we implemented Corporation-wide measures to improve our travel efficiency. As a result, we have seen a reduction of approximately 80% in automobile travel and nearly a total elimination of air travel. Although the drastically reduced travel levels will necessarily rise once the pandemic subsides and travel resumes, we aim to maintain a travel load at 50% per person of pre-pandemic miles. Virtual tools and interactive technology advancements are not only better for the environment, they are also more efficient by eliminating idle commuting time.Related Training
The Corporation has also implemented widespread paper reduction initiatives. Paper purchases in 2020 were 32% less than in 2019established a formal Strategic Plan, and subscriptions to newspapersthe framework of the Strategic Plan considers the core values and magazinesprinciples that have been reduced dramatically by transitioningfundamental to online sources. Our goal is 100% online subscriptionsthe Corporation’s long-term success. These attributes include respect, integrity, accountability, leadership, professionalism, collaboration, client-focused, innovation, inclusion, and volunteerism. In establishing these core values and principles as the foundation upon which all other strategic objectives are anchored, the Corporation seeks to further develop and sustain a corporate culture with sensitivity to the entirety of the Corporation’s business and demographic footprint and environment in which it operates. The differences among the Board and employees, and its
customers and community members, are respected and embraced to drive innovative products, services, and solutions that effectively meet the variety of needs among the Corporation’s diverse group of stakeholders.
To ensure that the core values and corporate responsibility principles are understood, implemented, and demonstrated by the end of 2022. We continueCorporation’s employee team on a sustained basis, the Corporation developed comprehensive communication processes and a training curriculum which was rolled out to look for opportunities to recycle our waste and to replace items we currently use with recycled products, keepingall employees, including establishing a focus on the need to choose biodegradable solutions where waste cannot be eliminated. In addition, products made locally are sourced where possible not only to support local businesses, but also to reduce the necessary
transportation to deliver those products to our facilities. Finally, we arecommittee focused on reducing energy usage through newer, better equipmentensuring diversity, equity, and inclusion issues are considered in our buildingsemployee activities. Our employee resources include a certified diversity and sourcing technology solutions that monitorinclusion trainer, and control usage flowexternal training courses. Employee experience committees were also formed in 2022 to maximize efficiencies.
As of December 31, 2020, the Corporation had a total of 651explore and evaluate how various diversity, equity and inclusion (“DEI”) topics impact our employees of which 601 were full time and 50 were part time.how we can better address them. The Corporation respects, valuesconducted a company-wide survey on DEI to monitor progress and invitessolicit feedback. The results of this survey were utilized to develop areas of focus for 2023.
CNB Bank’s Diversity, Equity and Inclusion Committee (“DEI Committee”) plays a crucial role in providing a platform for employee members from underrepresented groups and their allies to have their voices heard, promote education and availability of resources, ensure fair representation, and contribute ideas for consideration by CNB Bank’s key decision-makers. The input to Senior Management from the DEI Committee, which generally meets monthly or more frequently as warranted, includes initiatives to address the unique challenges and opportunities faced by underrepresented groups. The DEI Committee reviews policies, practices, and procedures to identify and eliminate potentially discriminatory practices, potential bias, and inequality. The DEI Committee works toward promoting a culture of nondiscrimination and inclusion within the Bank, fostering a sense of belonging for employees from diverse backgrounds. In 2023, CNB Bank further demonstrated its continuing commitment to its organizational culture by establishing two employee resource groups (“ERGs”) – “Bankers with Pride” and “CNB in Color”. These ERGs provide a safe and inclusive space while fostering a culture that promotes diversity and acceptance. CNB in ourColor is an ERG focused on supporting employees customersfrom Black, Indigenous, and communities. People of Color (BIPOC) communities, while Bankers with Pride is aimed at supporting employees who identify with the LGBTQIA+ community. The ERGs supplement the efforts of the Bank’s DEI Committee, helping to ensure representation, equity, and fairness for all employees, irrespective of their gender, identity, racial or ethnic background. Currently, there are 58 employees involved in DEI initiatives with the Bank through the DEI committee and ERGs.
Human Capital Management and Leadership Development
We seek to recognize the unique contribution each
individualemployee brings to the Corporation, and we are fully committed to supporting a
diverse workplace that understands, accepts and values the similarities and differences between individuals.
The Corporation’s key human capital management objectives are to attract, recruit, hire, develop and promote a deepdeeply experienced and diverse bench of talentemployee team, supplemented by similarly inclusive and diversity-focused third-party vendors, that translatescollectively translate into a strong workforce committed to fostering, promoting, and successful workforce.preserving the entire spectrum of our communities and culture, while successfully executing our business strategies and demonstrating our corporate values. To support these objectives, the Corporation’s Employee Experience processes and programs are designed toand operated to:
•Attract and develop talent to prepare themtalented employees across the spectrum of professional experience, life experience, socio-economic background, gender, race, religion, skill set, and geographic representation;
•Prepare all members of our team for critical roles and leadership positions forboth now and the future; rewardfuture, in serving as employees and valuable community members;
•Reward and support employees fairly and without discrimination based on successful performance and through competitive pay and benefit programs; enhance
•Enhance the Corporation’s culture through efforts to better understand, foster, promote, and preserve a culture of diversity and inclusion; and evolve
•Evolve and invest in technology, tools, and resources to better support employees of varying skills and backgrounds at work. Among the means we use to monitor our performance in employee experience and management, we take recurring management and employee demographic measurements and engagement surveys, and utilize the results to identify progress made, as well as areas in need of more attention, in improving the effectiveness of our leadership development and workforce profile, and personnel management practices.
A critical measure is realizing increasing diversity in our senior leadership positions, as those members of the Corporation’s management have greater ability to demonstrate their professional skills and experience, effectuate sustained change in the composition of our team, and provide us with their important financial services expertise to ensure we benefit from the relevant involvement of all groups within the spectrum of our workforce and communities. We are proud of the diversity we have
achieved within the Corporation’s senior leadership team, which is comprised of 19 individuals, of which 58% are female or members of underrepresented minority groups.
Overall, the Corporation’s workforce is 66% female and 34% male, as reported by those who self-identified. In addition, 14% of the Corporation’s workforce self-identified as a member of an underrepresented minority group. The Corporation identifies its underrepresented minority groups as those including individuals who self-identify as an ethnicity other than white, LGBTQ+, or are a military veteran or active military reservist.
As a result of broadening our recruitment efforts to increase the diversity of our teams, for the year ended December 31, 2023, 33 people out of 167 total hires for the Corporation identified as being from an underrepresented group. The Corporation’s efforts to identify qualified candidates from underrepresented minority group has allowed us to continue to improve our overall diversity workforce profile, as our regional banks’ employee teams are moving towards better alignment with the overall demographics of the respective communities they serve.
Vendor Management
Beginning in 2021 and continuing to the present time, the Corporation enhanced its new vendor selection process to include an evaluation of the potential vendor’s commitment to sustainability and diversity and inclusion. Our goal is to work with vendors that share our core values and commitment to be a responsible corporate citizen. We are making the necessary changes to ensure that our procurement practices are designed to identify and provide engagement opportunities to diverse-owned businesses committed to delivering the service, quality, and value that defines our brand, and to request vendors to definitively respond regarding their diversity and inclusiveness practices and measures. It is our goal to promote the economic growth of the local business communities we serve, in a manner reflective of our size, growth, and geographical location of individuals, departments and services. We understand the competitive advantage of having a broad selection of available suppliers to choose from with respect to factors such as price, quality, attention to detail, and future relationship building, and we now add their respective embracing of diversity and inclusion to the list of significant determining factors.
Community Involvement and Social Impacts
The Corporation serves as a cornerstone institution of both financial support and community service in the markets in which we serve. We are committed to strengthening these communities through the active volunteering of our employees. The Corporation’s employees actively participate in their
local communities through volunteer activities in education, economic development, human and health services, and community reinvestment. During
2020,2023, employees donated
3,80022,486 hours in support of more than
310 organizations. Even through a
pandemic,thousand organizations, with 77% of employees actively participating. Additionally, there were approximately $1.08 million in donations to community organizations and events within the communities we serve. Notably, in 2023, the Corporation’s
Martin Luther King, Jr. “Take the Day On” efforts resulted in 158 employees
found creative waysdonating 503 hours of their time across the communities the Corporation serves. Employees collected donations and delivered them to
give back to their communities.local organizations in need during this national day of service, which typically serves as a bank holiday.
Throughout its history, the Corporation has focused on strengthening the communities
we serve.it serves. We accomplish this by promoting economic development through investments in community-strengthening initiatives, such as affordable
housing.housing and revitalization efforts. As of December 31,
2020,2023, the Corporation’s investment in affordable housing totaled approximately
$5.4$8.2 million, with an additional investment commitment of
$3.6 million.Board Diversity
$0.8 million, and $2.5 million invested in the Erie Downtown Development Corporation, which is focused on revitalization efforts in downtown Erie, Pennsylvania.
The Corporation doesexpanded its efforts surrounding its financial literacy outreach in 2023, conducting six Financial Reality Fairs in various regions throughout the footprint we serve. The fairs included eleven high schools and almost 1,500 students. 116 employees donated over 1,428 hours of volunteer time and leveraged partnerships with thirty-one community organizations. Our employees and community volunteers not only shared their real-life knowledge of budgeting, but also provided additional financial education after the events. In addition to the fairs, employees participated in 243 other financial literacy events ranging from basic community banking sessions to school presentations. Employees contributed 1,263 hours of their time to participate in the Corporation’s financial literacy program. Further, the Corporation sponsored elementary and secondary banking curriculum materials donating $24,976 to provide 9,206 student workbooks, along with teacher guides and complimentary digital programs. Additionally, the Corporation provided $400,000 in Educational Improvement Tax Credit Program scholarships, and $23,500 in academic scholarships in service to the communities in which we operate. New in 2023, we had the opportunity to educate our clients and employees on financial literacy topics during Financial Literacy Month through an interactive trivia contest and social media. Further, we offered a virtual summer financial literacy series, reaching each of our geographic markets on topics such as budgeting, credit, fraud, and basic investing. We also launched a virtual first-time home buyer series to teach the financial basics of buying your first home. All external sessions were made available to employees.
The Corporation continued to focus on increasing its outreach to those who have been traditionally underserved by the financial institution industry. Examples of some the Corporation’s key recent initiatives are outlined below.
Impressia Bank (“Impressia”) launched in May 2023 and is the sixth bank division of CNB Bank, and is dedicated to the professional and financial development and advancement of women business owners and leaders. Impressia's digital-centric approach is complemented by regional relationship managers and support managers, as well as specialized services such as
SBA and grant advisory services, treasury management, wealth management, and private banking. Impressia is headquartered out of Buffalo, New York, with direct representation in our market offices in Columbus and Cleveland, Ohio, and Erie and State College, Pennsylvania. As part of the CNB Bank family of banks, Impressia clients have access to more than 51 full-service offices throughout Pennsylvania, Ohio, New York, and Virginia. Built from the ground up by a specific written policy regarding how diversitySteering Committee of experts in financial services and entrepreneurship, a key element of Impressia’s mission is to be consideredclose the gender gap in funding support and full access to banking services for women. Impressia provides clients with innovative resources and redefines the banker/client relationship. Impressia’s sophisticated suite of products and services helps women to navigate the complex landscape of business financing, which traditionally favored male entrepreneurs and often overlooked the unique circumstances and requirements of women-owned businesses. By empowering women in business, it is the goal of Impressia Bank to unleash a significant source of untapped potential, fostering innovation, entrepreneurship, and economic stability in the director nomination process; however,process.
BankOnWheels, which began services in the Corporate Governancefourth quarter of 2022, is an innovative new banking experience, making full-service banking accessible to more consumers and Nominating Committee seekssmall businesses, particularly those in underserved communities, through a banking unit built on a mobile-home-like commercial trucking chassis. The first of its kind operated by any financial institution in Western New York, BankOnWheels is a full-service, yet fully mobile bank branch, which will enable the Bank to deliver essential banking services to communities with little or no access to such services today. The BankOnWheels rotates between four locations in the cities of Buffalo and Niagara Falls, which are located in communities underserved by banks.
In May 2023, CNB Bank announced the launch of the At-Ease Program, a customized suite of products and solutions designed specifically for veterans and active members of the armed forces and their families. The At-Ease program is a testament to CNB Bank's commitment to the men and women who have served and continue to serve. Designed to make banking easier and more convenient for those who have served, the At-Ease program includes a variety of benefits for veterans, members of the armed forces, and their families. These benefits include international transaction fees refunded, waived out-of-network ATM, currency exchange, and international statement fees, as well as free cashier's checks and money orders, and mobile and online banking.
In February 2024, ERIEBANK, a division of CNB Bank, broke ground on a new community banking office and financial education center on Parade Street in Erie, Pennsylvania as part of the ongoing revitalization effort led by Erie’s East Side Renaissance organization. Once this new office is completed, ERIEBANK employees will bring financial education and accessible banking to the community in an ongoing effort to bring needed resources to the area. In support of this endeavor, ERIEBANK has formed a community advisory committee, comprised of local stakeholders who are working in partnership with ERIEBANK to ensure that there is diversitythe financial and educational needs of thought among directors. Having diversitythe community are being met.
Environmental
The Corporation continues to evaluate opportunities to become more environmentally considerate through new initiatives as well as altering existing business practices. Importantly, many of thought results inthese same initiatives allow us to be more thorough analysis of each issuecost-efficient and better decisions, whicheffective in the long-termdelivery of our products and services.
For example, for a number of years, the Corporation has realized increasing customer enrollment in paperless “eStatements”. This initiative not only improves the carbon footprint by reducing paper usage for both statements and mailing envelopes, but it also provides customer with their account information more time efficiently through immediate electronic delivery. Over the past three years, customers enrolled to receive eStatements has increased from 36% at the end of 2021, to 43% at the end of 2022, and 45% as of December 31, 2023. To achieve even greater enrollment and environmental and cost benefits, customers are prompted to consider enrolling in eStatements each time they log in unless they specifically request not to be enrolled. Also, we will be adopting a new charge in 2024 for most account holders who receive paper statements, further encouraging them to enroll in eStatements.
Another example of a corporate-wide paper-reducing practice is having our numerous corporate-network printers being set to default to printing double-sided to reduce paper output.
Other significant processing changes that the Corporation has implemented to reduce the need for paper documents is (i) utilizing electronic filing of mortgage documents, and (ii) the widespread adoption of using verified and legally-binding e-signatures for endorsement of bank documents, primarily through the application DocuSign. The use of e-signatures resulted in an estimated reduction of approximately 11.7 thousand lbs. and 13.0 thousand lbs. of carbon emissions in 2023 and 2022, respectively, and we expect even greater utilization in 2024 and beyond.
We also rolled out new functionality on our website and mobile app to allow businesses to fully open new accounts, including funding the initial deposits, without having to visit a branch, reducing automobile travel and emissions for our new customers. We are further increasing our online banking capabilities for both commercial and retail customers to allow customers to do an increasing volume of transactions electronically, further cutting down on the number of fuel-burning trips they need to make to one of our offices. Another example of these electronic banking capabilities is the Corporation’s “Small Business Xpress” lending platform, which provides our customer with a totally digital experience from start to finish. The customer completes an online application, uploads digital loan support documents, and receives paperless loan funding.
As we have done for several years, we continue to identify opportunities to recycle portions of our waste, including one of our largest waste byproducts – paper - and where practical, to replace items we currently use with recycled products, and choose
biodegradable solutions. Not only do we order and use recycled copy paper, we have paper recycling conveniently located throughout our numerous facilities, and for sensitive documents needing to be disposed, we have placed secured shred bins that provide for both security of data and disposal in a manner that allows for recycling as well. Products made locally are utilized where possible not only to support local businesses, but also to reduce the carbon footprint created through the excess costs and emissions from requiring transportation of goods from out-of-area sources.
Finally, we are reducing energy usage through the implementation of higher efficiency infrastructure components in new buildings or renovated facilities, and more energy-efficient climate-control equipment and technology solutions, including those with monitors and settings to control usage flow to help reduce the energy demands and improve the overall carbon footprint of operating our facilities.
Cybersecurity
Risk Management and Strategy
The Corporation maintains robust processes for assessing, identifying, and managing material risks from cybersecurity threats. The Corporation’s cybersecurity program is based on the Federal Financial Institutions Examination Council (“FFIEC”) framework which tailors the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework to be more financial services focused. The risk of cybersecurity threats is integrated into its Enterprise Risk Management (“ERM”) program, led by the Corporation’s Chief Risk Officer. The ERM program includes an annual risk prioritization process to identify key enterprise risks. Each key risk is assigned a risk owner to establish action plans and implement risk mitigation strategies. The cybersecurity threat risk action plan is managed at the enterprise level by the Chief Information Technology & Security Officer (the “CITSO”), the VP of Information Technology, and the VP of Information Security. Each quarter, the risk owners review and update the cybersecurity threat risk action plan to provide the status on specific risk mitigation actions and to identify new threats. To oversee and identify cybersecurity threat risks on a day-to-day basis, including from third party service providers, the Corporation maintains a third-party security operations center with round-the-clock monitoring, and the CITSO receives regular reports on industry activity. Management also assesses the cybersecurity proficiency of potential third-party suppliers before utilizing their services. The assessment identifies cybersecurity-related risks and makes recommendations to enhance the security of all new computing services. The Corporation reassesses all suppliers on a regular interval.
The Corporation works closely with its internal and external auditors to assess, identify, and manage cybersecurity risks. In addition, the Corporation engages with third party cybersecurity specialists to provide an independent assessment of the Corporation’s cybersecurity programs and to prepare a 3-year plan to maintain compliance and operational excellence. Management periodically reviews the 3-year plan and modifies it in response to changes in the threat landscape or otherwise as needed. Management has not identified risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Corporation, including its business strategy, results in greater shareholder value. of operations or financial condition.
Governance
The Board of Directors is responsible for overseeing the assessment and Corporate Governancemanagement of enterprise-level risks that may impact the Corporation. The Audit Committee has primary responsibility for overseeing risk management, including oversight of risks from cybersecurity threats. Management, including the CITSO, reports on cybersecurity matters regularly to the Board, primarily through the Audit and Nominating Committee believes that diversityIT Committees, including an annual report regarding specific risks and mitigation efforts within the Bank and a 3-year cybersecurity threat assessment conducted by third party experts. Management provides benchmarking information and updates on key operational and compliance metrics to the Board. In addition, cybersecurity training is provided to the full Board of thought stems from many factors including professional experience, life experience, socio-economic background, gender, race, religion, skill set,Directors to educate directors on the current cyber threat environment and geographic representation. The Corporate Governancemeasures companies can take to mitigate risk and Nominating Committee does not assign specific weights to particular factors, and no particular factor is necessarily applicable to all prospective nominees. impact of cyber attacks.
The Corporation believesmaintains a Cybersecurity Incident Response Plan (the “CSIRP”), which establishes an organizational framework and guidelines intended to facilitate an effective response and handling of cybersecurity incidents that could jeopardize the backgrounds and qualificationsavailability, integrity, or confidentiality of the directors, considered asCorporation’s assets. The CSIRP outlines roles and responsibilities, criteria for measuring the severity of a group, should provide a significant composite mix of experience, knowledge,cybersecurity incident, and abilities that will allowan escalation framework, including processes for informing the General Counsel and the Board of Directors of material cybersecurity incidents. As described above, management is actively involved in assessing and managing the Bank’s material cybersecurity risks. The CITSO and the VP of Information Security primarily lead these efforts. The CITSO, who reports directly to fulfill its responsibilities. The diversitythe CEO, is responsible for the oversight of the BoardCorporation’s IT operation, including the cybersecurity program, and holds a Bachelor of Directors is evaluated onScience degree in Information Technology and Security and a continuing basis by assessing whether varying viewpoints are routinely presented, evaluatingMaster of Science in Information Security and Assurance. He also holds 20 industry recognized Technology and Security certifications. The VP of Information Security reports directly to the individual performanceCITSO and contributionshas responsibility for leadership of each director,the Bank’s cybersecurity program. He holds a bachelor’s degree in mathematics and ensuring that varying perspectives are presented on key issues.computer science, as well as several industry recognized information security certifications.
COMPENSATION OF DIRECTORS
Director fees
for non-employee directors are reviewed annually by the ECC for recommendation to
the Board. Directors who are also employees of the Corporation do not receive compensation for their service on the Board. The ECC reviews relevant peer group data similar to that used in the executive compensation review. The ECC believes that appropriate compensation is critical to attracting, retaining and motivating directors who have the qualities necessary to
direct thisserve the Corporation
as a director and who meet the guidelines
referred to under Corporate Governance/Nominatingset forth by our CGN Committee. In addition, the ECC annually recommends an equity award of the Corporation’s common stock for
directors who have served at least one year on the Board.directors. The equity awards vest immediately.
The Board has adopted
certain stock ownership guidelines (the “Director Stock Ownership Guidelines”) for directors of the Corporation and CNB Bank because it believes that it is important for the Corporation’s future success that directors own and hold a minimum number of shares of common stock of the Corporation in order to further align their interests and actions with the interests of the Corporation’s shareholders. The
Corporation’s Bylaws provide that any director, upon first being appointed or elected to serve as a director, must own the lesser of 1,000 unencumbered shares of common stock of the Corporation or the number of shares equivalent to $15,000 of market value as of the date of the appointment or election. Further, on or before the third anniversary of the director’s first election to the Board, the director must own at least the lesser of 2,500 unencumbered shares of common stock of the Corporation or the number of shares equal to $25,000 of market value. Beyond this initial three-year period and prior to the five-year anniversary of a director joining the Board, the Director Stock Ownership Guidelines require directors of the Corporation and CNB Bank to own
at all timesand sustain during the period of their directorship a number of shares of the Corporation’s common stock with a market value equal to 500% or more of the director’s annual retainer for serving on both the CNB Bank and Corporation boards of directors.
This ownership threshold must be met within five years of a director joining the board. Compliance with the Director Stock Ownership Guidelines is monitored and
periodically reported to
the ECC and the Board by the Corporation’s
President & CEO.
2020 Director Fee Schedule
| | | | | | |
Meeting/Committee
Description
| | Fee ($) | | | Frequency |
Board Meeting – CNB Bank
| | | 600 | | | Monthly |
Board Meeting – CNB Financial Corp.
| | | 600 | | | Quarterly |
Retainer – CNB Bank
| | | 1,042 | | | Monthly |
Retainer – CNB Financial Corp.
| | | 1,042 | | | Monthly |
Committee Meeting
| | | 500 | | | Committee dependent |
Committee Chairs
| | | 600 | | | Committee dependent |
Retainer – Audit Committee Chair
| | | 2,125 | | | Quarterly |
Retainer – Executive Compensation Committee Chair
| | | 1,250 | | | Quarterly |
Retainer – Corporate Governance/Nominating Committee Chair
| | | 1,250 | | | Quarterly |
Annual Meeting
| | | 600 | | | Annual |
Director Training
| | | 500 | | | Varies |
Non-routine Director Work
| | | 1,000 | | | Per full day |
2020 Non-Employee Director
Deferred Compensation
Table | | | | | | | | | | | | | | | | |
Name | | Fees Earned
or Paid in
Cash ($) | | | Stock Awards
($) (1) | | | All Other
Compensation ($) | | | Total
($) | |
Peter F. Smith | | | 121,300 | | | | 35,000 | | | | — | | | | 156,300 | |
Julie Young | | | 47,400 | | | | 0 | | | | — | | | | 47,400 | |
Robert W. Montler | | | 48,300 | | | | 35,000 | | | | — | | | | 83,300 | |
Joel E. Peterson | | | 45,900 | | | | 35,000 | | | | — | | | | 80,900 | |
Deborah Dick Pontzer | | | 52,800 | | | | 35,000 | | | | — | | | | 87,800 | |
Jeffrey S. Powell | | | 59,500 | | | | 35,000 | | | | — | | | | 94,500 | |
Nicholas N. Scott | | | 48,400 | | | | 35,000 | | | | — | | | | 83,400 | |
Richard B. Seager | | | 0 | | | | 35,000 | | | | 50,400 | | | | 85,400 | |
Francis X. Straub, III | | | 0 | | | | 35,000 | | | | 44,000 | | | | 79,000 | |
Peter C. Varischetti | | | 34,725 | | | | 35,000 | | | | 11,575 | | | | 81,300 | |
The Corporation has established a deferred compensation plan for its non-employee directors which provides for the deferralthat allows each director to elect to defer receipt of up to 100% of his or her director compensation. AllAmounts deferred compensation isare credited to a general liabilitybookkeeping account established in the name of the Corporationdirector and may be notionally invested by the Bank.director among a portfolio of investment funds. Any appreciation or depreciation in each participant’sa director’s bookkeeping account value will reflect the performance of the underlying investments. No above-market earnings accrue under this plan. All amounts deferred under the deferred compensation plan are unfunded and represent a general liability of the Corporation and the Bank. Deferred compensation willis structured so that it could serve as a funding source for a Rabbi trust. Investments are expectedTrust. Amounts credited to closely matcha non-employee director’s deferred compensation account will be distributed upon the appreciatednon-employee director’s normal retirement, death, or depreciated liability. Distributions are receiveddisability in the form of a lump sum or annuity, upon normal retirement, death, or disability. Any variance will be adjustedas elected by an expense or gainthe director. Amounts deferred and any earnings thereon are not subject to federal individual income tax until distributed to the Corporation or Bank. The plan provides tax advantages to the participants and participation in the plan further aligns the interests of participants with those of our shareholders.non-employee director. Accounting treatment for this plan is subject to the ASC Topic 718.
2023 Director Fee Schedule
| | | | | | | | | | | | | | | | | |
| Meeting/Committee Description | | Fee
($) | | Frequency |
| Board Meeting – CNB Financial Corporation | | 600 | | Per meeting |
| Board Meeting – CNB Bank | | 600 | | Per meeting |
| Retainer – CNB Financial Corporation | | 1,458 | | Monthly |
| Retainer – CNB Bank | | 1,458 | | Monthly |
| Committee Meeting | | 500 | | Committee dependent |
| Committee Chairs | | 600 | | Committee dependent |
| Retainer – Chairperson of the Board – CNB Financial Corporation | | 2,550 | | Monthly |
| Retainer – Chairperson of the Board – CNB Bank | | 2,550 | | Monthly |
| Retainer – Audit Committee Chair | | 2,125 | | Quarterly |
| Retainer – Executive Compensation and Personnel Committee Chair | | 1,250 | | Quarterly |
| Retainer – Corporate Governance/Nominating Committee Chair | | 1,250 | | Quarterly |
| Annual Meeting | | 600 | | Annual |
| Director Training | | 500 | | Varies |
| Non-routine Director Work (subject to ECC approval) | | 1,000 | | Per full day |
2023 Non-Employee Director Compensation Table
| | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash(1) ($) | | Stock Awards(2) ($) | | Total
($) |
Jeffrey S. Powell (3) | | 67,650 | | 34,998 | | 102,648 |
| Michael Obi | | 60,800 | | 34,998 | | 95,798 |
| Joel E. Peterson | | 55,300 | | 34,998 | | 90,298 |
| Deborah Dick Pontzer | | 63,500 | | 34,998 | | 98,498 |
| Nicholas N. Scott | | 56,800 | | 34,998 | | 91,798 |
| Richard B. Seager | | 52,600 | | 34,998 | | 87,598 |
Peter F. Smith (3) | | 135,800 | | 34,998 | | 170,798 |
| Francis X. Straub, III | | 55,800 | | 34,998 | | 90,798 |
| Peter C. Varischetti | | 56,500 | | 34,998 | | 91,498 |
| Julie Young | | 62,800 | | 34,998 | | 97,798 |
(1) Includes deferred compensation election amounts under the non-employee directors’ plan.
(2) Total stock award value computed using the closing price on the date of the award multiplied by the number of shares awarded.
(3) Mr. Powell became Chairperson of the Board effective January 1, 2024. The higher retainer for the Chairperson of the Board was received by Mr. Smith for the entire 2023 year as Mr. Smith served in the Chairperson capacity until December 31, 2023.
The Corporation has also established a Survivor Benefit Plan for the benefit of non-employee directors. The purpose ofUnder the plan isSurvivor Benefit Plan, each non-employee director may designate a beneficiary (or beneficiaries) who will be entitled to providereceive a $100,000 to $150,000 (amount varies by participant) life insurancedeath benefit to designated beneficiaries if a participant dieseither (i) upon the non-employee director’s death while serving as a director of the Corporation or (ii) in the case of a non-employee directors director who has served as a director of the Corporation for ten or more years (or attain age 70 while serving as a director), followingupon such non-employee director’s death after their termination of board service. The planSurvivor Benefit Plan is considered an unfunded plan for tax and ERISA purposes, and all obligations arising under the plan are payable from the general assets of the Corporation. Messrs. Bower and Greslick are ineligible to participate in the plan.
The following table sets forth information regarding our executive officers:
CNB Financial Corporation:
| | | | | | | | | | | | | | |
| Name | | Age as of
February 20, 2024 | | Title |
Name
Michael D. Peduzzi | | December 31,
2020
58 | | Title
|
Joseph B. Bower, Jr.
| | 57 | | President and Chief Executive Officer |
Richard L. Greslick, Jr. | | 47 | | Senior Executive V.P., Chief Operating Officer and Secretary |
| Tito L. Lima | | 5559 | | Senior Executive V.P., Chief Financial Officer and Treasurer |
Richard L. Greslick, Jr.
Leanne D. Kassab | | 4456 | | Senior Executive V.P., Chief SupportExperience Officer and Assistant Secretary |
CNB Bank:
| | | | | | | | | | | | | | |
| Name | | Age as of
February 20, 2024 | | Title |
Mary Ann Conaway
Michael D. Peduzzi | | 58 | | President and Chief Executive Officer |
| Richard L. Greslick, Jr. | | 47 | | Senior Executive V.P., Employee ExperienceChief Operating Officer |
Joseph E. Dell Jr.
Tito L. Lima | | 59 | | 64 | Senior Executive V.P. and, Chief Financial Officer |
| Martin T. Griffith | | 61 | | Senior Executive V.P., Chief Banking Officer |
| Leanne D. Kassab | | 56 | | Senior Executive V.P., Chief Experience Officer |
| Anna K. Andersen | | 43 | | Senior V.P., Chief Risk Officer |
| Gregory M. Dixon | | 46 | | Executive V.P., Chief Credit Officer |
| Darryl P. Koch | | 38 | | Executive V.P., Chief Information Technology & Security Officer |
| Heather J. Koptchak | | 39 | | Senior V.P., Chief Employee Resources Officer |
| Robin W. Mink | | 61 | | Senior V.P., Chief Treasury Management Officer |
| Steven R. Shilling | | 53 | | Executive V.P., Chief Wealth Management Officer |
| Angela D. Wilcoxson | | 53 | | Executive V.P., Chief Commercial Banking Officer |
Gregory M. Dixon
| | 43 | | Executive V.P. and Chief Risk Officer
|
Martin T. Griffith
| | 58 | | Executive V.P. Community Banking
|
Leanne D. Kassab
| | 53 | | Executive V.P., Customer Experience
|
Steven R. Shilling
| | 50 | | Executive V.P., Private Client Solutions
|
Provided below is biographical information for each of our executive officers, other than Messrs.
BowerPeduzzi and
Greslick.Greslick, who also serve as directors of the Corporation. For information regarding Messrs.
BowerPeduzzi and Greslick, see
the preceding section in this Proxy Statement titled “Election of Directors.”
Tito L. Limahas over 3134 years of experience in various areas of banking. Prior to joining the Corporation in July 2019, he served as Executive Vice President and Chief Financial Officer at NexTier Bank, N.A. from 2015 through June 2019. Prior to joining NexTier Bank, N.A. Mr. Lima served as Executive Vice President of Finance for National Penn Bancshares from 2013 to 2015. Mr. Lima graduated from the Robert Morris University with a Bachelor of Science degree in Finance.Mary Ann ConawayFinance.
Martin T. Griffith has been withover 30 years of experience in various areas of banking. Prior to joining the Corporation since 1982in 2016, he was employed for the prior 16 years with Five Star Bank in Western New York, serving in roles of SVP/Retail Banking Executive, SVP/Commercial Banking and Regional President. Mr. Griffith graduated from Ithaca College with a Bachelor of Science degree in Business Administration and has served as the Executive Vice President/Employee Experience since 2014. Ms. Conaway first took a lead role in her field with the promotion in 1992 to Human Resource Officer. In 2011, Ms. Conaway graduateddegree from the Human Resource Management School of the Graduate School of Banking presented byat the Central States Conference of Banking Associations and University of Wisconsin-Madison.Wisconsin.
Leanne D. Kassab joined the marketing team at the Corporation in 1996 and has held various roles including EVP of Client Experience, before transitioning to her current role in 2021. Ms. Kassab graduated from Indiana University of Pennsylvania with a Bachelor of Science in Marketing. She has also served as a past member ofgraduated with honors from the American Bankers Association (ABA) Bank Marketing School, the Pennsylvania Bankers Association/Advanced School of Banking and the Pennsylvania Bankers Commercial Lending School. She was awarded the Certified Financial Marketing Professional Development Network State Educational(CFMP) designation from the Institute of Certified Bankers (ICB) and serves as a national ABA Bank Marketing Conference Advisory Committee. Ms. Conaway has servedBoard member and continuesPresident of the board of directors for Clearfield Arts Studio Theater, Inc. (CAST).
Anna K. "Katie" Andersen joined CNB Bank in 2020 as the Vice President of Compliance before transitioning to serve on various boards within the community.Joseph E. Dell, Jr. has been withher current role as Senior Vice President, Chief Risk Officer in 2023. Prior to joining the Corporation, since 2013 and has served asshe held various banking positions in the Chief Commercial Banking Officer since 2014. Mr. DellWashington, D.C. metropolitan area. Ms. Andersen holds a Bachelor’sBachelor of ScienceArts degree in Business AdministrationManagement from Clarion University and a Master’s in Business Administration from Waynesburg University. HeGettysburg College. She is a graduate of the American Bankers Association Stonier Graduate School of Banking. Mr. Dell has over 30 years of experience in commercial banking and credit administrationBaking and has previously served in executive and senior leadership roles with FSG Bank, a division of Atlantic Capital, First Commonwealth Bank, and National Bank ofbeen awarded the Commonwealth. Mr. Dell has served and continues to serve on various boards withinCertified Regulatory Compliance Manager (CRCM) designation from the community.
American Bankers Association.
Gregory M. Dixon has been with the Corporation since 2003 and has served in various capacities, with the most recent being Senior Credit Officer. Mr. Dixon holds a Bachelor’sBachelor of Science degree in Accounting from Indiana University of Pennsylvania. He is a graduate of the American Bankers Association Stonier Graduate School of Banking and a graduate of the Pennsylvania Bankers Association School of Commercial Lending. Mr. Dixon has served and continues to serve on various boards within the community.Martin T. Griffith
Darryl P. Koch has over 20 years of experience in the field of information technology and security. Prior joining the Corporation in 2019, Mr. Koch operated an information technology consulting business, which provides him with a depth and breadth of experience in the numerous technology, cybersecurity, and information security considerations impacting businesses and individuals. Mr. Koch holds a Bachelor of Science in Information Technology & Security and Master of Science in Information Security & Assurance from Western Governors University. In addition, he has obtained numerous relevant certifications, including; Certified Ethical Hacker, Computer Hacking Forensic Investigator, Cisco CCNP, and Microsoft MCSA.
Heather J. Koptchak has been with the Corporation since 2004, rising through the organization in various progressively significant roles starting as a Universal Associate to her current role as Chief Employee Resources Officer for the Bank. She holds an Associate of Science in Business Administration from Pennsylvania State University and is a Certified Society of Human Resource Management (SHRM-CP) professional. Mrs. Koptchak also graduated from the Graduate School of Banking, Human Resources Management School, PA Bankers, and Advanced School of Banking. She serves on various nonprofit boards and volunteers within the community.
Robin W. Mink joined CNB Bank in 2017 to develop and oversee the treasury management product and sales strategy for the Corporation. She has over 30 years of experience in various areas of banking. Priortreasury management as both a banker and corporate finance practitioner having served as Corporate Cash Manager at both Cardinal Health and Safelite Autoglass prior to joining the Corporation in 2016, he was employed for the prior 16 years with Five Star Bank, serving in roles of SVP/Retail Banking Executive, SVP/Commercial Banking and Regional President. Mr. Griffith graduated from Ithaca College with a B.S. in Business Administration and has a degree from the Graduate School of Banking at the University of Wisconsin.
Leanne D. Kassab joined CNB Bank in 1996her role as a Marketing Assistant and served in various roles, including Senior Vice President, Treasury Management Market Executive for PNC Bank. Robin is a graduate of Marketing, before transitioning to her current role as Executive Vice President of Customer Experience in 2014. She served as Senior Risk Officer for CNB Financial Corporation’s Enterprise Risk Management (ERM) program from 2013 to 2015. Ms. Kassab graduated from IndianaOtterbein University of Pennsylvania with a Bachelor of Science in Marketing. She graduated with honors from the American Bankers Association (ABA) School of Bank Marketing and Management and from the Pennsylvania Bankers Association Advanced School of Banking. She was awardedholds the Certified Financial MarketingTreasury Professional (CFMP) designation from the Institute of Certified Bankers (CIB) and serves as an ABA Bank Marketing Conference Advisory Board member and Vice President of the board of directors for Clearfield Arts Studio Theater, Inc. (CAST)credential (CTP).
Steven R. Shilling has over 2625 years of experience in wealth management and private banking. Prior to joining the corporation,Corporation in 2015, he served as a Senior Vice President in leadership roles with Huntington Wealth Advisors, National City Private Client Services and the Bank of America Private Bank. He graduated summa cum laude with a BABachelor of Arts degree in Economics from Grove City College and received an MBAa Master of Business Administration degree from the Fuqua School of Business at Duke University.
Angela D. Wilcoxson has been with the Corporation since 2020 and has served as the Chief Commercial Banking Officer since January 1, 2022. Ms. Wilcoxson holds a Bachelor of Business Administration degree in Finance from Kent State University and a Master of Arts in Applied Biblical Studies from Moody Bible Institute. Ms. Wilcoxson has over 30 years of experience in various areas of commercial banking and credit underwriting and has previously served in a senior leadership role with KeyBank. Ms. Wilcoxson has served and continues to serve on various boards within the community.
COMPENSATION DISCUSSION AND ANALYSIS
This discussion and analysis is focused on the Corporation’s NEOs and summarizes the philosophy, strategy and major details of the Corporation’s approach to compensating our NEOs. Our NEOs for the year ending December 31,
20202023, are as follows:
Joseph B. Bower, Jr.•Michael D. Peduzzi – President and Chief Executive Officer
•Tito L. Lima – Senior Executive Vice President, Chief Financial Officer and Treasurer
•Richard L. Greslick, Jr. – Senior Executive Vice President, Chief SupportOperating Officer and Secretary
Joseph E. Dell, Jr.•Martin T. Griffith – Senior Executive Vice President and Chief Commercial Banking Officer
Martin T. Griffith•Leanne D. Kassab – Senior Executive Vice President, Community Banking
Chief Experience Officer and Assistant Secretary
Financial
and Operational Highlights
During
Despite a continued level of uncertainty and volatility in the
challenging times of 2020,marketplace, for the year ended December 31, 2023, the Corporation continued to execute on its strategies while focusing on its long-term objectives:
Delivered 2020 net•Net income of $32.7available to common shareholders (“earnings”) was $53.7 million, or $1.97$2.55 per diluted common share, for the twelve months ended December 31, 2023, compared to $40.1earnings of $58.9 million, or $2.63$3.26 per diluted commonshare, for the twelve months ended December 31, 2022. The decrease in diluted earnings per share in 2019;
the twelve months ended December 31, 2023 was primarily due to the rise in deposit costs year over year, as well as the dilutive effect of the Corporation's common stock offering completed in September 2022, which resulted in the issuance of over 4.2 million shares of common stock, or an increase of approximately 25% in total common shares outstanding.Maintained•During the twelve months ended December 31, 2023, the Corporation repurchased 326,459 common shares at a weighted average price per share of $20.08, compared to repurchases of 50,166 common shares at a weighted average price per share of $26.75 during the twelve months ended December 31, 2022;
•As part of its overall capital management strategy, the Corporation maintained the dividend per common share of $0.68$0.70 for the full-year 2020;2023;
Increased tangible•Book value per common share was $24.57 at December 31, 2023, an increase of $2.18, or approximately 10% from $22.39 at December 31, 2022. A key objective for the Corporation is to target an increase of at least 10% in shareholder value annually. The increase in book value per common share by 6.9%, from $17.45 atcompared to December 31, 2019,2022 was primarily due to $18.66a $39.0 million increase in retained earnings combined with a $6.4 million decrease in accumulated other comprehensive loss primarily from the after-tax impact of temporary unrealized valuation changes in the Corporation’s available-for-sale investment portfolio, partially offset by a $3.9 million increase in treasury stock driven by the repurchase of 326,459 common shares at a weighted average price per share of $20.08 during 2023. The unrealized valuation changes in the Corporation’s investments were resulting from the 2023 market yield curve changes relative to the scheduled maturities of the Corporation’s holdings;
•At December 31, 2020;
Expanded2023, total loans receivable totaled $4.5 billion, increasing $193.3 million, or 4.5% compared to December 31, 2022. Loans generated through the Corporation’s regional divisions, increased of $241.3 million, or 5.86%, which was partially offset by a decrease of $47.9 million, or 30.6% in the Corporation’s syndicated loan portfolio. The Corporation was strategically focused on managing the concentration in its highest growth franchise, BankOnBuffalo, through organic growthcommercial real estate loan portfolio and the acquisition of Bank of Akron;
Raised $57.8 million in a preferred stock offering,its loan pricing discipline in support of its net interest margin;
•In 2023, the Corporation expanded its recently established division based in the Greater Roanoke area of Southern Virginia, and extended its footprint to State College, Pennsylvania, one of the fastest growth counties in the state, providing new opportunities for sustainable, long-term growth in all facets of the banking and wealth management businesses;
•At December 31, 2023, total deposits were $5.0 billion, reflecting an increase of $376.3 million, or 8.14% from December 31, 2022. The increase in deposits compared to December 31, 2022 was primarily due to continued growth in the Corporation’s long-term growth strategy;treasury management customer base and resulting increases in municipal and institutional/corporate deposits, including new wealth and asset management deposit relationships resulting from CNB’s participation in deposit insurance sharing programs;
Prepaid its entire borrowings•At December 31, 2023, the total estimated uninsured deposits for CNB Bank were approximately $1.4 billion, or approximately 28.21% of total CNB Bank deposits. However, when excluding $101.3 million of affiliate company deposits and $400.5 million of pledged-investment collateralized deposits, the adjusted amount and percentage of total estimated uninsured deposits was approximately $937.1 million, or approximately 18.37% of total CNB Bank deposits as of December 31, 2023;
•At December 31, 2023, the Corporation had $164.4 million of cash equivalents held in CNB Bank’s interest-bearing deposit account at the Federal Reserve Bank of Philadelphia (“Federal Reserve”). These excess funds, when combined with (i) available borrowing capacity of approximately $3.6 billion from the Federal Home Loan Bank of Pittsburgh ("FHLB") and the Federal Reserve, and (ii) available unused commitments from brokered deposit sources and other third-party funding channels, including previously established lines of credit from correspondent banks, result in the total on-hand and contingent liquidity sources for the Corporation to be approximately 4.0 times the estimated amount of adjusted uninsured deposit balances discussed above;
▪As of December 31, 2023, the Corporation did not have any borrowings from either the Federal Reserve’s Discount Window or Bank Term Funding Program ("BTFP"). The Corporation has added the BTFP as a potential contingent liquidity source but has not borrowed from the BTFP to date due to the general stability and growth in the Corporation's core deposit funding base throughout 2023;
•The Corporation's Return on Average Assets and Return on Average Equity (“FHLB”ROE”) of 1.04% and 10.54%, totaling approximately $160 million with a weighted average interest raterespectively, were lower for the twelve months ended December 31, 2023, compared to the same measures of 2.24%;
Ended 20201.20% and 13.86%, respectively, for the twelve months ended December 31, 2023. The decline in a strong liquidity position,the Corporation's profitability metrics was primarily driven by 35% growththe increase in deposits;
deposit costs due to the economic environment in 2023, as discussed above;Enhanced efficiency•CNB Bank launched a new division, Impressia Bank (“Impressia”), in May 2023. Impressia represents the sixth bank division of CNB Bank, and is dedicated to the professional and financial development and advancement of women business owners and leaders. Impressia's digital-centric approach is complemented by regional relationship managers and support managers, as well as specialized services such as SBA and grant advisory services, treasury management, wealth management, and private banking. Impressia is headquartered out of Buffalo, New York, with direct representation in our market offices in Columbus and Cleveland, Ohio, and Erie and State College, Pennsylvania.
•CNB Bank also introduced a new suite of products product in March 2023 through it’s “At-Ease” program, with customized accounts and solutions designed specifically for veterans and active members of the Corporation’s operations through the consolidation of three branches;
Increased households by 4.4% from year-end 2019armed forces and their families, to year-end 2020;
Continuedhelp make banking easier and more convenient for those who have served or continue to improve technology infrastructure both internally andserve our country in the delivery channels;
military.Focused on the Corporation’s responsibilities to its communities through the participation in the Paycheck Protection Program, resulting in approximately $160 million or 1,528 loan relationships at year-end 2020;
Further supported customers by deferring loan payments for several of its commercial and consumer loans, totaling approximately $151 million or 4.5% of total loans, at year-end 2020;
Focused on the Corporation’s environmental responsibilities by taking steps to reduce carbon footprint at its properties.
Say-on-Pay Results and Shareholder Outreach
