EXHIBIT 99.2 – Supplemental, Unaudited Financial Information
CONDENSED, CONSOLIDATED EARNINGS INFORMATION
(Dollars In Thousands, Except Per Share Data)
(Unaudited)
| | | | | | | | | | | | |
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| |
| |
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| |
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| | 1ST | | 1ST | | | | | |
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| | QUARTER | | QUARTER | | | | | |
| ||
| | 2024 | | 2023 | | $ Incr. (Decr.) | | % Incr. (Decr.) |
| |||
Interest and Dividend Income | | $ | 30,336 | | $ | 26,139 | | $ | 4,197 |
| 16.06 | % |
Interest Expense | |
| 11,295 | |
| 5,358 | |
| 5,937 |
| 110.81 | % |
Net Interest Income | |
| 19,041 | |
| 20,781 | |
| (1,740) |
| (8.37) | % |
Provision (Credit) for Credit Losses | |
| 954 | |
| (352) | |
| 1,306 |
| (371.02) | % |
Net Interest Income After Provision (Credit) for Credit Losses | |
| 18,087 | |
| 21,133 | |
| (3,046) |
| (14.41) | % |
Noninterest Income | |
| 6,675 | |
| 5,609 | |
| 1,066 |
| 19.01 | % |
Net Realized Gains on Available-for-sale Debt Securities | |
| 0 | |
| 7 | |
| (7) |
| (100.00) | % |
Noninterest Expense | |
| 18,304 | |
| 19,087 | |
| (783) |
| (4.10) | % |
Income Before Income Tax Provision | |
| 6,458 | |
| 7,662 | |
| (1,204) |
| (15.71) | % |
Income Tax Provision | |
| 1,152 | |
| 1,409 | |
| (257) |
| (18.24) | % |
Net Income | | $ | 5,306 | | $ | 6,253 | | $ | (947) |
| (15.14) | % |
Net Income Attributable to Common Shares (1) | | $ | 5,267 | | $ | 6,201 | | $ | (934) |
| (15.06) | % |
PER COMMON SHARE DATA: | |
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| |
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| |
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|
| |
Net Income - Basic | | $ | 0.35 | | $ | 0.40 | | $ | (0.05) |
| (12.50) | % |
Net Income - Diluted | | $ | 0.35 | | $ | 0.40 | | $ | (0.05) |
| (12.50) | % |
Dividends Per Share | | $ | 0.28 | | $ | 0.28 | | $ | 0.00 |
| 0.00 | % |
Number of Shares Used in Computation - Basic | |
| 15,230,580 | |
| 15,409,680 | |
|
|
|
| |
Number of Shares Used in Computation - Diluted | |
| 15,230,580 | |
| 15,410,617 | |
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|
|
| |
(1) | Basic and diluted net income per common share are determined based on net income less earnings allocated to nonvested restricted shares with nonforfeitable dividends. |
1
CONDENSED, CONSOLIDATED BALANCE SHEET DATA
(Dollars In Thousands)
(Unaudited)
| | | | | | | | | | | | |
| | March 31, | | March 31, | | |
| |||||
|
| 2024 |
| 2023 |
| $ Incr. (Decr.) |
| % Incr. (Decr.) |
| |||
ASSETS | | | | | | | | | | | | |
Cash & Due from Banks | | $ | 46,448 | | $ | 52,212 | | $ | (5,764) |
| (11.04) | % |
Available-for-sale Debt Securities | |
| 405,094 | |
| 472,814 | |
| (67,720) |
| (14.32) | % |
Loans, Net | |
| 1,852,426 | |
| 1,726,793 | |
| 125,633 |
| 7.28 | % |
Bank-Owned Life Insurance | | | 49,857 | | | 31,352 | | | 18,505 | | 59.02 | % |
Bank Premises and Equipment, Net | | | 21,852 | | | 21,277 | | | 575 | | 2.70 | % |
Deferred Tax Asset, Net | | | 17,703 | | | 18,914 | | | (1,211) | | (6.40) | % |
Intangible Assets | |
| 54,877 | |
| 55,280 | |
| (403) |
| (0.73) | % |
Other Assets | |
| 73,280 | |
| 51,230 | |
| 22,050 |
| 43.04 | % |
TOTAL ASSETS | | $ | 2,521,537 | | $ | 2,429,872 | | $ | 91,665 |
| 3.77 | % |
| | | | | | | | | | | | |
LIABILITIES | |
|
| |
|
| |
|
|
|
| |
Deposits | | $ | 1,995,903 | | $ | 1,916,040 | | $ | 79,863 |
| 4.17 | % |
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements | |
| 197,655 | |
| 192,097 | |
| 5,558 |
| 2.89 | % |
Senior Notes, Net | | | 14,848 | | | 14,781 | | | 67 |
| 0.45 | % |
Subordinated Debt, Net | |
| 24,745 | |
| 24,634 | |
| 111 |
| 0.45 | % |
Other Liabilities | |
| 26,730 | |
| 26,752 | |
| (22) |
| (0.08) | % |
TOTAL LIABILITIES | |
| 2,259,881 | |
| 2,174,304 | |
| 85,577 |
| 3.94 | % |
| | | | | | | | | | | | |
STOCKHOLDERS' EQUITY | |
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| |
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| |
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Common Stockholders' Equity, Excluding Accumulated | |
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| |
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| |
|
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| |
Other Comprehensive Loss | |
| 302,362 | |
| 298,365 | |
| 3,997 |
| 1.34 | % |
Accumulated Other Comprehensive Loss: | |
| | |
| | |
|
|
|
| |
Net Unrealized Losses on Available-for-sale Debt Securities | |
| (41,071) | |
| (43,271) | |
| 2,200 |
| (5.08) | % |
Defined Benefit Plans | |
| 365 | |
| 474 | |
| (109) |
| (23.00) | % |
TOTAL STOCKHOLDERS' EQUITY | |
| 261,656 | |
| 255,568 | |
| 6,088 |
| 2.38 | % |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | | $ | 2,521,537 | | $ | 2,429,872 | | $ | 91,665 |
| 3.77 | % |
2
CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars In Thousands, Except Per Share Data)
(Unaudited)
| | | | | | | | | |
|
| AS OF OR FOR THE |
| |
| ||||
| | THREE MONTHS ENDED | | % |
| ||||
| | March 31, | | INCREASE |
| ||||
|
| 2024 |
| 2023 |
| (DECREASE) |
| ||
EARNINGS PERFORMANCE - U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP") |
| |
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| |
|
|
| |
Net Income | | $ | 5,306 | | $ | 6,253 |
| (15.14) | % |
Return on Average Assets (Annualized) | |
| 0.84 | % |
| 1.03 | % | (18.45) | % |
Return on Average Equity (Annualized) | |
| 8.13 | % |
| 9.90 | % | (17.88) | % |
| | | | | | | | | |
PRE-TAX, PRE-PROVISION NET REVENUE ("PPNR") - NON-GAAP (a) | | | | | | | | | |
PPNR | | $ | 7,607 | | $ | 7,572 | | 0.46 | % |
PPNR (Annualized) as a % of Average Assets | | | 1.21 | % | | 1.25 | % | (3.20) | % |
PPNR (Annualized) as a % of Average Equity | | | 11.65 | % | | 11.99 | % | (2.84) | % |
| | | | | | | | | |
BALANCE SHEET HIGHLIGHTS | |
| | |
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| |
Total Assets | | $ | 2,521,537 | | $ | 2,429,872 |
| 3.77 | % |
Available-for-Sale Debt Securities | |
| 405,094 | |
| 472,814 |
| (14.32) | % |
Loans, Net | |
| 1,852,426 | |
| 1,726,793 |
| 7.28 | % |
Allowance for Credit Losses: | |
| | | | | | | |
Allowance for Credit Losses on Loans | | | 20,023 | |
| 18,346 |
| 9.14 | % |
Allowance for Credit Losses on Off-Balance Sheet Exposures | | | 684 | |
| 1,178 |
| (41.94) | % |
Deposits | |
| 1,995,903 | |
| 1,916,040 |
| 4.17 | % |
| | | | | | | | | |
OFF-BALANCE SHEET | |
| | |
| |
|
| |
Outstanding Balance of Mortgage Loans Sold with Servicing Retained | | $ | 322,319 | | $ | 321,326 |
| 0.31 | % |
Trust Assets Under Management | |
| 1,224,573 | |
| 1,127,439 |
| 8.62 | % |
| | | | | | | | | |
STOCKHOLDERS' VALUE (PER COMMON SHARE) | |
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Net Income - Basic | | $ | 0.35 | | $ | 0.40 |
| (12.50) | % |
Net Income - Diluted | | $ | 0.35 | | $ | 0.40 |
| (12.50) | % |
Dividends | | $ | 0.28 | | $ | 0.28 |
| 0.00 | % |
Common Book Value | | $ | 17.01 | | $ | 16.50 |
| 3.09 | % |
Tangible Common Book Value (b) | | $ | 13.45 | | $ | 12.93 |
| 4.02 | % |
Market Value (Last Trade) | | $ | 18.78 | | $ | 21.38 |
| (12.16) | % |
Market Value / Common Book Value | |
| 110.41 | % |
| 129.58 | % | (14.79) | % |
Market Value / Tangible Common Book Value | |
| 139.63 | % |
| 165.35 | % | (15.55) | % |
Price Earnings Multiple | |
| 13.41 | |
| 13.36 |
| 0.37 | % |
Dividend Yield | |
| 5.96 | % |
| 5.24 | % | 13.74 | % |
Common Shares Outstanding, End of Period | |
| 15,378,065 | |
| 15,485,035 |
| (0.69) | % |
3
CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS (Continued)
(Dollars In Thousands, Except Per Share Data)
(Unaudited)
| | | | | | | | | |
| | AS OF OR FOR THE | | |
| ||||
| | THREE MONTHS ENDED | | % |
| ||||
| | March 31, | | INCREASE |
| ||||
|
| 2024 |
| 2023 |
| (DECREASE) |
| ||
SAFETY AND SOUNDNESS | | | | | | | | | |
Tangible Common Equity / Tangible Assets (b) |
| | 8.38 | % | | 8.43 | % | (0.59) | % |
Nonperforming Assets / Total Assets |
| | 0.78 | % | | 0.60 | % | 30.00 | % |
Allowance for Credit Losses / Total Loans |
| | 1.07 | % | | 1.05 | % | 1.90 | % |
Total Risk Based Capital Ratio (c) |
| | 15.55 | % | | 16.49 | % | (5.70) | % |
Tier 1 Risk Based Capital Ratio (c) |
| | 13.14 | % | | 13.96 | % | (5.87) | % |
Common Equity Tier 1 Risk Based Capital Ratio (c) |
| | 13.14 | % | | 13.96 | % | (5.87) | % |
Leverage Ratio (c) |
| | 9.89 | % | | 10.07 | % | (1.79) | % |
| | | | | | | | | |
AVERAGE BALANCES | | | | | | | | | |
Average Assets | | $ | 2,518,776 | | $ | 2,420,819 |
| 4.05 | % |
Average Equity | | $ | 261,146 | | $ | 252,638 |
| 3.37 | % |
| | | | | | | | | |
EFFICIENCY RATIO (d) | | | | | | | | | |
Net Interest Income on a Fully Taxable-Equivalent | | | | | | | | | |
Basis (d) | | $ | 19,236 | | $ | 21,050 |
| (8.62) | % |
Noninterest Income, Excluding Net Realized Gains on Available-for-sale Debt Securities | |
| 6,675 | |
| 5,609 |
| 19.01 | % |
Total (1) | | $ | 25,911 | | $ | 26,659 |
| (2.81) | % |
Noninterest Expense (2) | | $ | 18,304 | | $ | 19,087 |
| (4.10) | % |
Efficiency Ratio = (2)/(1) | |
| 70.64 | % |
| 71.60 | % | (1.34) | % |
(a) | PPNR includes net interest income plus noninterest income minus total noninterest expense but excludes provision (credit) for credit losses, realized gains or losses on securities, the income tax provision and nonrecurring items included in earnings. Management believes disclosure of PPNR provides useful information for evaluating C&N’s financial performance without the impact of unusual items or events that may obscure trends in C&N’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. A reconciliation of this non-GAAP measure to the comparable GAAP measure is provided in Exhibit 99.2 under the table “PPNR- NON- GAAP RECONCILIATION.” |
(b)Tangible common book value per share and tangible common equity as a percentage of tangible assets are non-GAAP ratios. Management believes this non-GAAP information is helpful in evaluating the strength of the C&N's capital and in providing an alternative, conservative valuation of C&N's net worth. The ratios shown above are based on the following calculations of tangible assets and tangible common equity:
| | | | | | | | | |
Total Assets |
| $ | 2,521,537 |
| $ | 2,429,872 | | | |
Less: Intangible Assets, Primarily Goodwill | |
| (54,877) | |
| (55,280) | | | |
Tangible Assets | | $ | 2,466,660 | | $ | 2,374,592 | | | |
Total Stockholders' Equity | | $ | 261,656 | | $ | 255,568 | | | |
Less: Intangible Assets, Primarily Goodwill | |
| (54,877) | |
| (55,280) | | | |
Tangible Common Equity (3) | | $ | 206,779 | | $ | 200,288 | | | |
| | | | | | | | | |
Common Shares Outstanding, End of Period (4) | |
| 15,378,065 | |
| 15,485,035 | | | |
Tangible Common Book Value per Share = (3)/(4) | | $ | 13.45 | | $ | 12.93 | | | |
(c)Capital ratios for the most recent period are estimated.
(d)The efficiency ratio is a non-GAAP ratio that is calculated as shown above. For purposes of calculating the efficiency ratio, net interest income on a fully taxable-equivalent basis includes amounts of interest income on tax-exempt securities and loans that have been increased to a fully taxable-equivalent basis, using C&N's marginal federal income tax rate of 21%. A reconciliation of net interest income under U.S. GAAP as compared to net interest income as adjusted to a fully taxable-equivalent basis is provided in Exhibit 99.2 under the table “COMPARISON OF INTEREST INCOME AND EXPENSE.”
4
QUARTERLY CONDENSED, CONSOLIDATED
INCOME STATEMENT INFORMATION
(Dollars In Thousands, Except Per Share Data)
(Unaudited)
| | | | | | | | | | | | | | | |
|
| | For the Three Months Ended: | ||||||||||||
| | March 31, |
| December 31, |
| September 30, |
| June 30, |
| March 31, | |||||
| | 2024 | | 2023 | | 2023 | | 2023 | | 2023 | |||||
Interest income | | $ | 30,336 | | $ | 30,236 | | $ | 29,118 | | $ | 28,011 | | $ | 26,139 |
Interest expense | |
| 11,295 | |
| 10,642 | |
| 9,455 | |
| 7,649 | |
| 5,358 |
Net interest income | |
| 19,041 | |
| 19,594 | |
| 19,663 | |
| 20,362 | |
| 20,781 |
Provision (credit) for credit losses | |
| 954 | |
| 951 | |
| (1,225) | |
| 812 | |
| (352) |
Net interest income after provision (credit) for credit losses | |
| 18,087 | |
| 18,643 | |
| 20,888 | |
| 19,550 | |
| 21,133 |
Noninterest income | |
| 6,675 | |
| 8,720 | |
| 6,489 | |
| 6,635 | |
| 5,609 |
Net realized (losses) gains on securities | |
| 0 | |
| (3,042) | |
| 0 | |
| (1) | |
| 7 |
Noninterest expense | |
| 18,304 | |
| 18,399 | |
| 17,940 | |
| 18,722 | |
| 19,087 |
Income before income tax provision | |
| 6,458 | |
| 5,922 | |
| 9,437 | |
| 7,462 | |
| 7,662 |
Income tax provision | |
| 1,152 | |
| 1,661 | |
| 1,846 | |
| 1,419 | |
| 1,409 |
Net income | | $ | 5,306 | | $ | 4,261 | | $ | 7,591 | | $ | 6,043 | | $ | 6,253 |
Net income attributable to common shares | | $ | 5,267 | | $ | 4,231 | | $ | 7,534 | | $ | 5,996 | | $ | 6,201 |
Basic earnings per common share | | $ | 0.35 | | $ | 0.28 | | $ | 0.50 | | $ | 0.39 | | $ | 0.40 |
Diluted earnings per common share | | $ | 0.35 | | $ | 0.28 | | $ | 0.50 | | $ | 0.39 | | $ | 0.40 |
5
QUARTERLY CONDENSED, CONSOLIDATED
BALANCE SHEET INFORMATION
(In Thousands) (Unaudited)
| | | | | | | | | | | | | | | |
|
| As of: |
| |
| | |
| | |
| | |||
| | March 31, |
| Dec. 31, |
| Sept. 30, |
| June 30, |
| March 31, | |||||
| | 2024 | | 2023 | | 2023 | | 2023 | | 2023 | |||||
ASSETS |
| |
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| |
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| |
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| |
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| |
|
Cash & Due from Banks | | $ | 46,448 | | $ | 56,878 | | $ | 52,658 | | $ | 51,762 | | $ | 52,212 |
Available-for-Sale Debt Securities | |
| 405,094 | |
| 415,755 | |
| 429,138 | |
| 445,695 | |
| 472,814 |
Loans, Net | |
| 1,852,426 | |
| 1,828,931 | |
| 1,812,585 | |
| 1,795,454 | |
| 1,726,793 |
Bank-Owned Life Insurance | | | 49,857 | | | 63,674 | | | 31,557 | | | 31,504 | | | 31,352 |
Bank Premises and Equipment, Net | | | 21,852 | | | 21,632 | | | 21,267 | | | 20,970 | | | 21,277 |
Deferred Tax Asset, Net | | | 17,703 | | | 17,441 | | | 23,731 | | | 20,687 | | | 18,914 |
Intangible Assets | |
| 54,877 | |
| 54,974 | |
| 55,076 | |
| 55,178 | |
| 55,280 |
Other Assets | |
| 73,280 | |
| 56,299 | |
| 57,937 | |
| 49,530 | |
| 51,230 |
TOTAL ASSETS | | $ | 2,521,537 | | $ | 2,515,584 | | $ | 2,483,949 | | $ | 2,470,780 | | $ | 2,429,872 |
| | | | | | | | | | | | | | | |
LIABILITIES | |
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| |
|
| |
|
| |
|
| |
|
|
Deposits (1) | | $ | 1,995,903 | | $ | 2,014,806 | | $ | 2,024,997 | | $ | 2,010,118 | | $ | 1,916,040 |
Borrowed Funds - Federal Home Loan Bank and Repurchase Agreements | |
| 197,655 | |
| 172,211 | |
| 148,529 | |
| 146,694 | |
| 192,097 |
Senior Notes, Net | | | 14,848 | | | 14,831 | | | 14,814 | | | 14,798 | | | 14,781 |
Subordinated Debt, Net | |
| 24,745 | |
| 24,717 | |
| 24,689 | |
| 24,661 | |
| 24,634 |
Other Liabilities | |
| 26,730 | |
| 26,638 | |
| 30,715 | |
| 26,392 | |
| 26,752 |
TOTAL LIABILITIES | |
| 2,259,881 | |
| 2,253,203 | |
| 2,243,744 | |
| 2,222,663 | |
| 2,174,304 |
| | | | | | | | | | | | | | | |
STOCKHOLDERS' EQUITY | |
|
| |
|
| |
|
| |
|
| |
|
|
Common Stockholders' Equity, Excluding Accumulated Other Comprehensive Loss | |
| 302,362 | |
| 300,818 | |
| 300,031 | |
| 296,190 | |
| 298,365 |
Accumulated Other Comprehensive Loss: | |
| | |
| | |
| | |
| | |
| |
Net Unrealized Losses on Available-for-sale Debt Securities | |
| (41,071) | |
| (38,878) | |
| (60,278) | |
| (48,536) | |
| (43,271) |
Defined Benefit Plans | |
| 365 | |
| 441 | |
| 452 | |
| 463 | |
| 474 |
TOTAL STOCKHOLDERS' EQUITY | |
| 261,656 | |
| 262,381 | |
| 240,205 | |
| 248,117 | |
| 255,568 |
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | | $ | 2,521,537 | | $ | 2,515,584 | | $ | 2,483,949 | | $ | 2,470,780 | | $ | 2,429,872 |
| | | | | | | | | | | | | | | |
(1) Brokered Deposits (Included in Total Deposits) | | $ | 69,391 | | $ | 64,369 | | $ | 62,512 | | $ | 70,653 | | $ | 15,117 |
6
AVAILABLE-FOR-SALE DEBT SECURITIES
(In Thousands)
| | | | | | | | | | | | | | | | | | |
|
| March 31, 2024 | | December 31, 2023 | | March 31, 2023 | ||||||||||||
| | Amortized | | Fair | | Amortized | | Fair | | Amortized | | Fair | ||||||
|
| Cost |
| Value |
| Cost |
| Value |
| Cost |
| Value | ||||||
Obligations of the U.S. Treasury | | $ | 11,324 | | $ | 10,231 | | $ | 12,325 | | $ | 11,290 | | $ | 33,924 | | $ | 31,163 |
Obligations of U.S. Government agencies | | | 10,637 | | | 9,376 | | | 11,119 | | | 9,946 | | | 25,479 | | | 23,348 |
Bank holding company debt securities | | | 28,953 | | | 23,469 | | | 28,952 | | | 23,500 | | | 28,947 | | | 24,723 |
Obligations of states and political subdivisions: | |
| | | | | |
| | |
| | |
|
| |
|
|
Tax-exempt | |
| 113,181 | | | 102,826 | |
| 113,464 | |
| 104,199 | |
| 128,285 | |
| 117,812 |
Taxable | |
| 57,960 | | | 49,255 | |
| 58,720 | |
| 50,111 | |
| 67,076 | |
| 57,572 |
Mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored agencies: | |
| | | | | |
| | |
| | |
|
| |
|
|
Residential pass-through securities | |
| 102,048 | | | 91,116 | |
| 105,549 | |
| 95,405 | |
| 109,028 | |
| 97,807 |
Residential collateralized mortgage obligations | |
| 48,477 | | | 44,501 | |
| 50,212 | |
| 46,462 | |
| 42,296 | |
| 38,117 |
Commercial mortgage-backed securities | |
| 76,249 | | | 66,121 | |
| 76,412 | |
| 66,682 | |
| 84,449 | |
| 74,195 |
Private label commercial mortgage-backed securities | | | 8,252 | | | 8,199 | | | 8,215 | | | 8,160 | | | 8,105 | | | 8,077 |
Total Available-for-Sale Debt Securities | | $ | 457,081 | | $ | 405,094 | | $ | 464,968 | | $ | 415,755 | | $ | 527,589 | | $ | 472,814 |
SUMMARY OF LOANS BY TYPE
(Excludes Loans Held for Sale)
(In Thousands)
| | | | | | | | | |
|
| March 31, |
| December 31, |
| March 31, | |||
| | 2024 | | 2023 | | 2023 | |||
Commercial real estate - non-owner occupied | |
|
| |
|
| |
|
|
Non-owner occupied | | $ | 507,223 | | $ | 499,104 | | $ | 457,814 |
Multi-family (5 or more) residential | | | 64,866 | | | 64,076 | | | 58,111 |
1-4 Family - commercial purpose | | | 167,740 | | | 174,162 | | | 166,773 |
Total commercial real estate - non-owner occupied | | | 739,829 | | | 737,342 | | | 682,698 |
Commercial real estate - owner occupied | | | 250,145 | | | 237,246 | | | 221,766 |
All other commercial loans: | | | | | | | | | |
Commercial and industrial | | | 80,136 | | | 78,832 | | | 83,420 |
Commercial lines of credit | | | 121,791 | | | 117,236 | | | 119,109 |
Political subdivisions | | | 84,652 | | | 79,031 | | | 85,555 |
Commercial construction and land | | | 106,255 | | | 104,123 | | | 70,612 |
Other commercial loans | | | 19,971 | | | 20,471 | | | 26,106 |
Total all other commercial loans | | | 412,805 | | | 399,693 | | | 384,802 |
Residential mortgage loans: | | | | | | | | | |
1-4 Family - residential | | | 387,542 | | | 389,262 | | | 372,241 |
1-4 Family residential construction | | | 22,121 | | | 24,452 | | | 29,479 |
Total residential mortgage | | | 409,663 | | | 413,714 | | | 401,720 |
Consumer loans: | | | | | | | | | |
Consumer lines of credit (including HELCs) | | | 41,204 | | | 41,503 | | | 35,245 |
All other consumer | | | 18,803 | | | 18,641 | | | 18,908 |
Total consumer | | | 60,007 | | | 60,144 | | | 54,153 |
Total | | | 1,872,449 | | | 1,848,139 | | | 1,745,139 |
Less: allowance for credit losses on loans | | | (20,023) | | | (19,208) | | | (18,346) |
Loans, net | | $ | 1,852,426 | | $ | 1,828,931 | | $ | 1,726,793 |
7
NON-OWNER OCCUPIED COMMERCIAL REAL ESTATE
(In Thousands)
| | | | | | | | | |
Loan Type | | March 31, | | % of Non-owner | | % of | |||
| | 2024 | | Occupied CRE | | Total Loans | |||
Industrial | | $ | 117,199 | | 23.1 | % | | 6.3 | % |
Office | | | 93,998 | | 18.5 | % | | 5.0 | % |
Retail | | | 93,585 | | 18.5 | % | | 5.0 | % |
Hotels | | | 72,999 | | 14.4 | % | | 3.9 | % |
Mixed Use | | | 59,230 | | 11.7 | % | | 3.2 | % |
Other | | | 70,212 | | 13.8 | % | | 3.7 | % |
Total Non-owner Occupied CRE Loans | | $ | 507,223 | | | | | | |
Total Gross Loans | | $ | 1,872,449 | | | | | | |
PAST DUE LOANS AND NONPERFORMING ASSETS
(Dollars In Thousands)
| | | | | | | | | | |
|
| March 31, |
| December 31, |
| March 31, |
| |||
| | 2024 | | 2023 | | 2023 |
| |||
Loans individually evaluated with a valuation allowance | | $ | 10,062 | | $ | 7,786 | | $ | 5,802 | |
Loans individually evaluated without a valuation allowance | | | 4,743 | | | 3,478 | | | 3,507 | |
Total individually evaluated loans | | $ | 14,805 | | $ | 11,264 | | $ | 9,309 | |
| | | | | | | | | | |
Total loans past due 30-89 days and still accruing | | $ | 6,560 | | $ | 9,275 | | $ | 5,493 | |
| | | | | | | | | | |
Nonperforming assets: | |
|
| |
|
| |
|
| |
Total nonaccrual loans | | $ | 19,069 | | $ | 15,177 | | $ | 12,876 | |
Total loans past due 90 days or more and still accruing | |
| 227 | |
| 3,190 | |
| 1,216 | |
Total nonperforming loans | |
| 19,296 | |
| 18,367 | |
| 14,092 | |
Foreclosed assets held for sale (real estate) | |
| 456 | |
| 478 | |
| 459 | |
Total nonperforming assets | | $ | 19,752 | | $ | 18,845 | | $ | 14,551 | |
| | | | | | | | | | |
Total nonperforming loans as a % of total loans | |
| 1.03 | % |
| 0.99 | % |
| 0.81 | % |
Total nonperforming assets as a % of assets | |
| 0.78 | % |
| 0.75 | % |
| 0.60 | % |
Allowance for credit losses as a % of total loans | |
| 1.07 | % |
| 1.04 | % |
| 1.05 | % |
ANALYSIS OF THE ALLOWANCE FOR CREDIT LOSSES ON LOANS
(In Thousands)
| | | | | | | | | | | | |
|
| 3 Months |
| 3 Months |
| 3 Months |
| Year | ||||
| | Ended | | Ended | | Ended | | Ended | ||||
| | March 31, | | December 31, | | March 31, | | December 31, | ||||
| | 2024 | | 2023 | | 2023 | | 2023 | ||||
Balance, beginning of period | | $ | 19,208 | | $ | 18,085 | | $ | 16,615 | | $ | 16,615 |
Adoption of ASU 2016-13 (CECL) | | | 0 | | | 0 | | | 2,104 | | | 2,104 |
Charge-offs | |
| (180) | |
| (57) | |
| (67) | |
| (356) |
Recoveries | |
| 35 | |
| 18 | |
| 6 | |
| 92 |
Net charge-offs | |
| (145) | |
| (39) | |
| (61) | |
| (264) |
Provision (credit) for credit losses on loans | |
| 960 | |
| 1,162 | |
| (312) | |
| 753 |
Balance, end of period | | $ | 20,023 | | $ | 19,208 | | $ | 18,346 | | $ | 19,208 |
8
ANALYSIS OF THE PROVISION (CREDIT) FOR CREDIT LOSSES
(In Thousands)
| | | | | | | | | | |
| | 3 Months | | 3 Months | | 3 Months | | |||
| | Ended | | Ended | | Ended | | |||
| | March 31, | | December 31, | | March 31, | | |||
| | 2024 | | 2023 | | 2023 | | |||
Provision (credit) for credit losses: | | | | | | | | | | |
Loans receivable | | $ | 960 | | $ | 1,162 | | $ | (312) | |
Off-balance sheet exposures | |
| (6) | |
| (211) | |
| (40) | |
Total provision (credit) for credit losses | | $ | 954 | | $ | 951 | | $ | (352) | |
PPNR NON- GAAP RECONCILIATION
(In Thousands)
| | | | | | | | | | |
| | Three Months Ended | ||||||||
| | March 31, | | December 31, | | March 31, | | |||
Calculation of PPNR: | | 2024 | | 2023 | | 2023 | | |||
Net Income (GAAP) | | $ | 5,306 | | $ | 4,261 | | $ | 6,253 | |
Add: Provision for income taxes | | | 1,152 | | | 1,661 | | | 1,409 | |
Add: Provision (credit) for credit losses | | | 954 | | | 951 | | | (352) | |
Less: Enhancement fee included in noninterest income related to purchase of Bank-Owned Life Insurance | | | 0 | | | (2,100) | | | 0 | |
Add: Realized losses (gains) on available-for-sale securities debt securities | | | 0 | | | 3,042 | | | (7) | |
Add: Adjustments to reflect net interest income on a fully taxable-equivalent basis | | | 195 | | | 199 | | | 269 | |
PPNR (non-GAAP) | | $ | 7,607 | | $ | 8,014 | | $ | 7,572 | |
9
COMPARISON OF INTEREST INCOME AND EXPENSE
(In Thousands)
| | | | | | | | | |
|
| Three Months Ended | |||||||
| | March 31, | | December 31, | | March 31, | |||
|
| 2024 |
| 2023 |
| 2023 | |||
INTEREST INCOME | | | | | | | | | |
Interest-bearing due from banks | | $ | 383 | | $ | 447 | | $ | 278 |
Available-for-sale debt securities: | |
| | |
| | |
| |
Taxable | |
| 2,136 | |
| 2,115 | |
| 2,211 |
Tax-exempt | |
| 623 | |
| 654 | |
| 767 |
Total available-for-sale debt securities | |
| 2,759 | |
| 2,769 | |
| 2,978 |
Loans receivable: | |
| | | | | | | |
Taxable | |
| 26,703 | |
| 26,532 | |
| 22,431 |
Tax-exempt | | | 670 | | | 663 | | | 713 |
Total loans receivable | | | 27,373 | | | 27,195 | | | 23,144 |
Other earning assets | | | 16 | | | 24 | | | 8 |
Total Interest Income | | | 30,531 | | | 30,435 | | | 26,408 |
| | | | | | | | | |
INTEREST EXPENSE | | | | | | | | | |
Interest-bearing deposits: | | | | | | | | | |
Interest checking | | | 2,806 | | | 2,809 | | | 987 |
Money market | | | 2,180 | | | 2,032 | | | 873 |
Savings | | | 55 | | | 57 | | | 63 |
Time deposits | | | 3,850 | | | 3,742 | | | 1,307 |
Total interest-bearing deposits | | | 8,891 | | | 8,640 | | | 3,230 |
Borrowed funds: | | | | | | | | | |
Short-term | | | 597 | | | 322 | | | 1,097 |
Long-term - FHLB advances | | | 1,456 | | | 1,329 | | | 681 |
Senior notes, net | | | 120 | | | 120 | | | 120 |
Subordinated debt, net | | | 231 | | | 231 | | | 230 |
Total borrowed funds | | | 2,404 | | | 2,002 | | | 2,128 |
Total Interest Expense | | | 11,295 | | | 10,642 | | | 5,358 |
| | | | | | | | | |
Net Interest Income | | $ | 19,236 | | $ | 19,793 | | $ | 21,050 |
Note: Interest income from tax-exempt securities and loans has been adjusted to a fully taxable-equivalent basis, using C&N’s marginal federal income tax rate of 21%. The following table is a reconciliation of net interest income under U.S. GAAP as compared to net interest income as adjusted to a fully taxable-equivalent basis.
| | | | | | | | | |
(In Thousands) | | Three Months Ended | |||||||
| | March 31, | | December 31, | | March 31, | |||
| | 2024 |
| 2023 |
| 2023 | |||
Net Interest Income Under U.S. GAAP | | $ | 19,041 | | $ | 19,594 | | $ | 20,781 |
Add: fully taxable-equivalent interest income adjustment from tax-exempt securities | | | 69 | | | 74 | | | 127 |
Add: fully taxable-equivalent interest income adjustment from tax-exempt loans | | | 126 | | | 125 | | | 142 |
Net Interest Income as adjusted to a fully taxable-equivalent basis | | $ | 19,236 | | $ | 19,793 | | $ | 21,050 |
10
ANALYSIS OF AVERAGE DAILY BALANCES AND RATES
(Dollars in Thousands)
| | | | | | | | | | | | | | | | |
|
| 3 Months |
| |
| 3 Months |
| | | 3 Months |
| |
| |||
| | Ended | | Rate of | | Ended | | Rate of | | Ended | | Rate of |
| |||
| | 3/31/2024 | | Return/ | | 12/31/2023 | | Return/ | | 3/31/2023 | | Return/ |
| |||
| | Average | | Cost of | | Average | | Cost of | | Average | | Cost of |
| |||
| | Balance | | Funds % | | Balance | | Funds % | | Balance | | Funds % | | |||
EARNING ASSETS |
| |
|
|
|
| |
|
|
|
| |
|
|
| |
Interest-bearing due from banks | | $ | 32,725 | | 4.71 | % | $ | 37,555 |
| 4.72 | % | $ | 31,637 |
| 3.56 | % |
Available-for-sale debt securities, at amortized cost: | |
| | | | |
| |
| | |
| |
| | |
Taxable | |
| 347,885 | | 2.47 | % |
| 372,797 |
| 2.25 | % |
| 410,110 |
| 2.19 | % |
Tax-exempt | |
| 113,363 | | 2.21 | % |
| 121,143 |
| 2.14 | % |
| 131,392 |
| 2.37 | % |
Total available-for-sale debt securities | |
| 461,248 | | 2.41 | % |
| 493,940 |
| 2.22 | % |
| 541,502 |
| 2.23 | % |
Loans receivable: | |
|
| | | |
|
|
| | |
|
|
| | |
Taxable | |
| 1,774,064 | | 6.05 | % |
| 1,752,047 | | 6.01 | % |
| 1,634,012 | | 5.57 | % |
Tax-exempt | |
| 85,182 | | 3.16 | % |
| 84,349 | | 3.12 | % |
| 91,851 | | 3.15 | % |
Total loans receivable | |
| 1,859,246 | | 5.92 | % |
| 1,836,396 |
| 5.88 | % |
| 1,725,863 |
| 5.44 | % |
Other earning assets | |
| 1,384 | | 4.65 | % |
| 1,534 |
| 6.21 | % |
| 1,200 |
| 2.70 | % |
Total Earning Assets | |
| 2,354,603 | | 5.22 | % |
| 2,369,425 |
| 5.10 | % |
| 2,300,202 |
| 4.66 | % |
Cash | |
| 20,448 | | | |
| 21,019 |
|
| |
| 22,276 |
|
| |
Unrealized loss on securities | |
| (50,849) | | | |
| (72,605) |
|
| |
| (60,055) |
|
| |
Allowance for credit losses | |
| (19,484) | | | |
| (18,575) |
|
| |
| (17,053) |
|
| |
Bank-owned life insurance | | | 54,466 | | | | | 32,980 | | | | | 31,267 | | | |
Bank premises and equipment | |
| 21,788 | | | |
| 21,532 |
|
| |
| 21,518 |
|
| |
Intangible assets | |
| 54,925 | | | |
| 55,025 |
|
| |
| 55,331 |
|
| |
Other assets | |
| 82,879 | | | |
| 78,558 |
|
| |
| 67,333 |
|
| |
Total Assets | | $ | 2,518,776 | | | | $ | 2,487,359 |
|
| | $ | 2,420,819 |
|
| |
| | | | | | | | | | | | | | | | |
INTEREST-BEARING LIABILITIES | |
| | | | |
|
|
|
| |
|
|
|
| |
Interest-bearing deposits: | |
| | | | |
|
|
|
| |
|
|
|
| |
Interest checking | | $ | 514,905 | | 2.19 | % | $ | 521,432 | | 2.14 | % | $ | 457,277 | | 0.88 | % |
Money market | |
| 362,864 | | 2.42 | % |
| 354,854 | | 2.27 | % |
| 364,646 | | 0.97 | % |
Savings | |
| 213,278 | | 0.10 | % |
| 218,810 | | 0.10 | % |
| 257,047 | | 0.10 | % |
Time deposits | |
| 429,085 | | 3.61 | % |
| 429,898 | | 3.45 | % |
| 312,497 | | 1.70 | % |
Total interest-bearing deposits | |
| 1,520,132 | | 2.35 | % |
| 1,524,994 |
| 2.25 | % |
| 1,391,467 |
| 0.94 | % |
Borrowed funds: | |
| | | | |
|
|
| | |
|
|
| | |
Short-term | |
| 44,642 | | 5.38 | % |
| 24,196 | | 5.28 | % |
| 91,767 | | 4.85 | % |
Long-term - FHLB advances | |
| 142,753 | | 4.10 | % |
| 132,089 | | 3.99 | % |
| 80,648 | | 3.42 | % |
Senior notes, net | |
| 14,840 | | 3.25 | % |
| 14,822 | | 3.21 | % |
| 14,773 | | 3.29 | % |
Subordinated debt, net | |
| 24,731 | | 3.76 | % |
| 24,704 | | 3.71 | % |
| 24,620 | | 3.79 | % |
Total borrowed funds | |
| 226,966 | | 4.26 | % |
| 195,811 |
| 4.06 | % |
| 211,808 |
| 4.07 | % |
Total Interest-bearing Liabilities | |
| 1,747,098 | | 2.60 | % |
| 1,720,805 |
| 2.45 | % |
| 1,603,275 |
| 1.36 | % |
Demand deposits | |
| 481,146 | | | |
| 491,944 |
|
| |
| 539,659 |
|
| |
Other liabilities | |
| 29,386 | | | |
| 32,122 |
|
| |
| 25,247 |
|
| |
Total Liabilities | |
| 2,257,630 | | | |
| 2,244,871 |
|
| |
| 2,168,181 |
|
| |
Stockholders' equity, excluding accumulated other comprehensive loss | |
| 301,032 | | | |
| 299,401 |
|
| |
| 299,599 |
|
| |
Accumulated other comprehensive loss | |
| (39,886) | | | |
| (56,913) |
|
| |
| (46,961) |
|
| |
Total Stockholders' Equity | |
| 261,146 | | | |
| 242,488 |
|
| |
| 252,638 |
|
| |
Total Liabilities and Stockholders' Equity | | $ | 2,518,776 | | | | $ | 2,487,359 |
|
| | $ | 2,420,819 |
|
| |
Interest Rate Spread | |
| | | 2.62 | % |
| | | 2.65 | % |
| | | 3.30 | % |
Net Interest Income/Earning Assets | | | | | 3.29 | % | | | | 3.31 | % | | | | 3.71 | % |
| | | | | | | | | | | | | | | | |
Total Deposits (Interest-bearing and Demand) | | $ | 2,001,278 |
|
| | $ | 2,016,938 |
|
| | $ | 1,931,126 |
|
| |
(1)Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using C&N’s marginal federal income tax rate of 21%.
(2) | Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings. |
(3) | Rates of return on earning assets and costs of funds have been presented on an annualized basis. |
11
COMPARISON OF NONINTEREST INCOME
(In Thousands)
| | | | | | | | | |
|
| Three Months Ended | |||||||
| | March 31, | | December 31, | | March 31, | |||
|
| 2024 |
| 2023 |
| 2023 | |||
Trust revenue | | $ | 1,897 | | $ | 1,913 | | $ | 1,777 |
Brokerage and insurance revenue | |
| 539 | |
| 486 | |
| 430 |
Service charges on deposit accounts | |
| 1,318 | |
| 1,446 | |
| 1,290 |
Interchange revenue from debit card transactions | |
| 1,013 | |
| 1,045 | |
| 1,007 |
Net gains from sales of loans | |
| 191 | |
| 273 | |
| 74 |
Loan servicing fees, net | |
| 230 | |
| 136 | |
| 122 |
Increase in cash surrender value of life insurance | |
| 470 | |
| 2,253 | |
| 138 |
Other noninterest income | |
| 1,017 | |
| 1,168 | |
| 771 |
Total noninterest income, excluding realized gains | | $ | 6,675 | | $ | 8,720 | | $ | 5,609 |
COMPARISON OF NONINTEREST EXPENSE
(In Thousands)
| | | | | | | | | |
|
| Three Months Ended | |||||||
|
| March 31, | | December 31, | | March 31, | |||
| | 2024 | | 2023 | | 2023 | |||
Salaries and employee benefits | | $ | 11,562 | | $ | 11,113 | | $ | 11,427 |
Net occupancy and equipment expense | |
| 1,450 | |
| 1,364 | |
| 1,402 |
Data processing and telecommunications expenses | |
| 1,992 | |
| 1,923 | |
| 1,936 |
Automated teller machine and interchange expense | |
| 487 | |
| 308 | |
| 475 |
Pennsylvania shares tax | |
| 433 | |
| 392 | |
| 403 |
Professional fees | |
| 518 | |
| 509 | |
| 937 |
Other noninterest expense | |
| 1,862 | |
| 2,790 | |
| 2,507 |
Total noninterest expense | | $ | 18,304 | | $ | 18,399 | | $ | 19,087 |
12
LIQUIDITY INFORMATION
(In Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Available Credit Facilities |
| Outstanding | | | Available | | | Total Credit | |||||||||||||||||||||
| | March 31, | | Dec. 31, | | March 31, | | | March 31, | | Dec. 31, | | March 31, | | | March 31, | | Dec. 31, | | March 31, | |||||||||
| | 2024 | | 2023 | | 2023 | | | 2024 | | 2023 | | 2023 | | | 2024 | | 2023 | | 2023 | |||||||||
Federal Home Loan Bank of Pittsburgh | | $ | 215,018 | | $ | 189,021 | | $ | 201,357 | | | $ | 712,932 | | $ | 737,824 | | $ | 655,577 | | | $ | 927,950 | | $ | 926,845 | | $ | 856,934 |
Federal Reserve Bank Discount Window | | | 0 | | | 0 | | | 0 | | | | 19,063 | | | 19,982 | | | 22,340 | | | | 19,063 | | | 19,982 | | | 22,340 |
Other correspondent banks | | | 0 | | | 0 | | | 0 | | | | 75,000 | | | 75,000 | | | 95,000 | | | | 75,000 | | | 75,000 | | | 95,000 |
Total credit facilities | | $ | 215,018 | | $ | 189,021 | | $ | 201,357 | | | $ | 806,995 | | $ | 832,806 | | $ | 772,917 | | | $ | 1,022,013 | | $ | 1,021,827 | | $ | 974,274 |
| | | | | | | | | | |
Uninsured Deposits Information | | March 31, | December 31, | March 31, | ||||||
| | 2024 | 2023 | 2023 | ||||||
Total Deposits - C&N Bank | | $ | 2,012,167 | | $ | 2,030,909 | | $ | 1,934,686 | |
| | | | | | | | | | |
Estimated Total Uninsured Deposits | | $ | 568,085 | | $ | 592,206 | | $ | 613,875 | |
Portion of Uninsured Deposits that are | | | | | | | | | | |
Collateralized | | | 140,063 | | | 151,031 | | | 189,239 | |
Uninsured and Uncollateralized Deposits | | $ | 428,022 | | $ | 441,175 | | $ | 424,636 | |
| | | | | | | | | | |
Uninsured and Uncollateralized Deposits as | | | | | | | | | | |
a % of Total Deposits | | | 21.3 | % | | 21.7 | % | | 21.9 | % |
| | | | | | | | | | |
Available Funding from Credit Facilities | | $ | 806,995 | | $ | 832,806 | | $ | 772,917 | |
Fair Value of Available-for-sale Debt | | | | | | | | | | |
Securities in Excess of Pledging Obligations | | | 259,489 | | | 256,058 | | | 269,763 | |
Highly Liquid Available Funding | | $ | 1,066,484 | | $ | 1,088,864 | | $ | 1,042,680 | |
| | | | | | | | | | |
Highly Liquid Available Funding as a % of | | | | | | | | | | |
Uninsured Deposits | | | 187.7 | % | | 183.9 | % | | 169.9 | % |
| | | | | | | | | | |
Highly Liquid Available Funding as a % of | | | | | | | | | | |
Uninsured and Uncollateralized Deposits | | | 249.2 | % | | 246.8 | % | | 245.5 | % |
13