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CNB Financial Corporation Reports 2012 Earnings of $17.1 Million, a 13% Increase Over 2011

   CNB Financial Corporation Reports 2012 Earnings of $17.1 Million, a 13%
                              Increase Over 2011

PR Newswire

CLEARFIELD, Pa., Jan. 31, 2013

CLEARFIELD, Pa., Jan.31, 2013 /PRNewswire/ -- CNB Financial Corporation
("CNB") (NASDAQ: CCNE), the parent company of CNB Bank, today announced its
earnings for the year ended December 31, 2012. Highlights include the
following:

  oNet income of $17.1 million for the year ended December 31, 2012, or $1.38
    per share, a 13% increase in net income and a 12% increase in diluted
    earnings per share over the year ended December 31, 2011.
  oLoans of $927.8 million at December 31, 2012, an increase of $77.9
    million, or 9.2%, compared to December 31, 2011.
  oDeposits of $1.49 billion at December 31, 2012, an increase of $131.2
    million, or 9.7%, compared to December 31, 2011.
  oReturns on average assets and equity of 1.00% and 12.17%, respectively,
    for the year ended December 31, 2012.
  oTangible book value per share of $10.77 per share as of December 31, 2012,
    an increase of 10.1% over tangible book value per share of $9.78 at
    December 31, 2011.
  oCost of funds of 1.08% for the year ended December 31, 2012, compared to
    1.44% for the year ended December 31, 2011.
  oNon-performing assets of $15.1 million, or 0.85% of total assets as of
    December 31, 2012, compared to $17.5 million, or1.09% of total assets, at
    December 31, 2011.

Joseph B. Bower, Jr., President and CEO, commented, "We continue to be pleased
with the overall asset growth of the Corporation of 11%, which has resulted in
the 2012 net income growth of 13%. The Corporation's enhanced credit quality
in 2012 should also provide for continued earnings improvement in 2013."

Net Interest Income and Margin

During the year ended December 31, 2012, net interest income increased $5.1
million, or 10.5%, compared to the year ended December 31, 2011. Net interest
margin on a fully tax equivalent basis was 3.49% for the year ended December
31, 2012, compared to 3.59% for the year ended December 31, 2011. Net
interest margin was 3.47% in the first and second quarters of 2012, 3.53% in
the third quarter of 2012, and 3.49% in the fourth quarter of 2012 as CNB was
able to attract and deploy low cost core deposits into loans within our
markets.

Although the yield on earnings assets decreased from 4.84% during the year
ended December 31, 2011 to 4.42% during the year ended December 31, 2012,
CNB's average earning assets increased from $1.41 billion to $1.62 billion, or
14.9%, resulting in an increase in interest income of $2.4 million, or 3.7%.

Due to growth in core deposits, interest-bearing liabilities have increased
significantly during the last twelve months. Interest-bearing deposits as of
December 31, 2012 grew $108.6 million, or 9.0%, as compared to December 31,
2011. However, CNB's total interest expense for the year ended December 31,
2012 decreased by $2.7 million, or 15.1%, compared to the year ended December
31, 2011, primarily as a result of decreases in the cost of core deposits.
CNB's strong and growing deposit base and low cost of funds have, along with
the increase in average earnings assets described above, offset the decline in
yield on earning assets, resulting in the increase in net interest income.

Asset Quality

During the year ended December 31, 2012, CNB recorded a provision for loan
losses of $6.4 million, as compared to a provision for loan losses of $4.9
million for the year ended December 31, 2011. The provision for loan losses
was $2.3 million in both the three month periods ended December 31, 2012 and
2011.

During the fourth quarter of2012, an impaired commercial loan was partially
repaid in October, resulting in an additional chargeoff of $109 thousand and a
reduction in nonperforming assets of $1.8 million. In December 2012, one
impaired commercial and industrial loan with a balance of $1.4 million was
charged off. As of September 30, 2012, a workout agreement with the borrower
was probable, which would have resulted in no loss to CNB. As a result, no
specific reserve was recorded as of the end of the third quarter of 2012. In
December, CNB obtained new information from the borrower and determined that
the likelihood of a workout agreement or any future payments from the borrower
was remote. Therefore, the loan was charged off and the provision for loan
losses was increased by $1.4 million during the fourth quarter of 2012. In
addition, the effect of increases in net chargeoffs in 2012 and the increase
in the loan portfolio in 2012 had a significant impact on the allowance and
provision for loan losses required for homogeneous loan pools as of and for
the year ended December 31, 2012. The allowance for loan loss balance
attributable to loans collectively evaluated for impairment increased from
$11.1 million at December 31, 2011 to $12.2 million at December 31, 2012.

Non-Interest Income

Excluding the effects of the securities transactions described below,
non-interest income was $10.7 million for the year ended December 31, 2012,
compared to $10.4 million for the year ended December 31, 2011. Net realized
gains on available-for-sale securities were $1.4 million during the year ended
December 31, 2012, compared to $614 thousand during the year ended December
31, 2011. Net realized and unrealized gains on securities for which fair
value was elected were $461 thousand and $64 thousand during the years ended
December 31, 2012 and 2011, respectively. An other-than-temporary impairment
charge of $398 thousand was recorded in earnings on structured pooled trust
preferred securities during the year ended December 31, 2011.

Non-Interest Expenses

Total non-interest expenses increased $2.7 million, or 8.0%, during the year
ended December 31, 2012 compared to the year ended December 31, 2011.
Salaries and benefits expenses increased $1.6 million, or 9.3%, during the
year ended December 31, 2012 compared to the year ended December 31, 2011, in
part due to routine merit increases, an increase in full-time equivalent
employees from 300 at December 31, 2011 to 323 at December 31, 2012, and
increases in certain employee benefit expenses, such as health insurance
costs, which continue to increase in line with market conditions. In
addition, other non-interest expenses increased from $10.3 million for year
ended December 31, 2011 to $11.3 million for the year ended December 31, 2012
as a result of CNB's continued growth.

Total non-interest expenses in relation to CNB's average asset size declined
from 2.20% for the year ended December 31, 2011 to 2.10% for the year ended
December 31, 2012.

About CNB Financial Corporation

CNB Financial Corporation is a financial holding company with consolidated
assets of approximately $1.8 billion that conducts business primarily through
CNB Bank, CNB's principal subsidiary. CNB Bank is a full-service bank
engaging in a full range of banking activities and services, including trust
and wealth management services, for individual, business, governmental, and
institutional customers. CNB Bank operations include a loan production
office, a private banking division and 28 full-service offices in
Pennsylvania, including ERIEBANK, a division of CNB Bank. More information
about CNB and CNB Bank may be found on the internet at www.bankcnb.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of
Section27A of the Securities Act of 1933, as amended, and Section21E of the
Securities Exchange Act of 1934, as amended, with respect to CNB's financial
condition, liquidity, results of operations, future performance and business.
These forward-looking statements are intended to be covered by the safe
harbor for "forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are those that are
not historical facts. Forward-looking statements include statements with
respect to beliefs, plans, objectives, goals, expectations, anticipations,
estimates and intentions that are subject to significant risks and
uncertainties and are subject to change based on various factors (some of
which are beyond CNB's control). Forward-looking statements often include the
words "believes," "expects," "anticipates," "estimates," "forecasts,"
"intends," "plans," "targets," "potentially," "probably," "projects,"
"outlook" or similar expressions or future conditional verbs such as "may,"
"will," "should," "would" and "could." Such known and unknown risks,
uncertainties and other factors that could cause the actual results to differ
materially from the statements include, but are not limited to:changes in
general business, industry or economic conditions or competition; changes in
any applicable law, rule, regulation, policy, guideline or practice governing
or affecting financial holding companies and their subsidiaries or with
respect to tax or accounting principles or otherwise; adverse changes or
conditions in capital and financial markets; changes in interest rates; higher
than expected costs or other difficulties related to integration of combined
or merged businesses; the inability to realize expected cost savings or
achieve other anticipated benefits in connection with business combinations
and other acquisitions; changes in the quality or composition of CNB's loan
and investment portfolios; adequacy of loan loss reserves; increased
competition; loss of certain key officers; continued relationships with major
customers; deposit attrition; rapidly changing technology; unanticipated
regulatory or judicial proceedings and liabilities and other costs; changes in
the cost of funds, demand for loan products or demand for financial services;
and other economic, competitive, governmental or technological factors
affecting CNB's operations, markets, products, services and prices. Some of
these and other factors are discussed in CNB's annual and quarterly reports
previously filed with the SEC. Such factors could cause actual results to
differ materially from those in the forward-looking statements.

The forward-looking statements are based upon management's beliefs and
assumptions and are made as of the date of this press release. CNB undertakes
no obligation to publicly update or revise any forward-looking statements
included in this press release or to update the reasons why actual results
could differ from those contained in such statements, whether as a result of
new information, future events or otherwise, except to the extent required by
law. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this press release might not occur and you
should not put undue reliance on any forward-looking statements.

Financial Tables

The following tables supplement the financial highlights described previously
for CNB Financial Corporation.

                      (unaudited)
                      Three Months Ended            Twelve Months Ended
                      December 31,                  December 31,
                                                    (unaudited)
                      2012       2011       %       2012        2011       %
                                            change                         change
                      (Dollars in thousands, except share and per share data)
Income Statement
Interest income       $         $         0.9%    $         $         3.7%
                      16,965    16,808            68,129      65,712
Interest expense      3,377      4,264      -20.8%  14,920      17,579     -15.1%
 Net interest income  13,588     12,544     8.3%    53,209      48,133     10.5%
Provision for loan    2,343      2,264      3.5%    6,381       4,937      29.2%
losses
 Net interest income
 after provision for  11,245     10,280     9.4%    46,828      43,196     8.4%
 loan losses
Non-interest income
 Wealth and asset     508        466        9.0%    1,819       1,691      7.6%
 management fees
 Service charges on   1,086      1,104      -1.6%   4,106       4,233      -3.0%
 deposit accounts
 Other service        501        425        17.9%   1,868       1,626      14.9%
 charges and fees
 Net realized and
 unrealized gains on
 securities
 for which fair value 6          280        -97.9%  461         64         620.3%
 was elected
 Mortgage banking     304        229        32.8%   990         735        34.7%
 Bank owned life      221        256        -13.7%  973         930        4.6%
 insurance
 Other                198        238        -16.8%  965         1,224      -21.2%
 Total
 other-than-temporary
 impairment losses
 on available for     -          -          NA      -           (398)      NA
 sale securities
 Less portion of loss
 recognized in other
 comprehensive income -          -          NA      -           -          NA
 Net impairment
 losses recognized in -          -          NA      -           (398)      NA
 earnings
 Net realized gains
 (losses) on          (21)       456        NA      1,379       614        124.6%
 available-for-sale
 securities
   Net impairment
   losses recognized
   in earnings and   (21)       456        NA      1,379       216        538.4%
   realized gains on
   available-for-sale
   securities
   Total non-interest 2,803      3,454      -18.8%  12,561      10,719     17.2%
   income
Non-interest expenses
 Salaries and         4,718      4,443      6.2%    18,893      17,285     9.3%
 benefits
 Net occupancy        1,257      1,038      21.1%   4,651       4,416      5.3%
 expense of premises
 FDIC insurance       299        290        3.1%    1,115       1,259      -11.4%
 premiums
 Other                2,616      2,769      -5.5%   11,286      10,322     9.3%
   Total non-interest 8,890      8,540      4.1%    35,945      33,282     8.0%
   expenses
Income before income  5,158      5,194      -0.7%   23,444      20,633     13.6%
taxes
Income tax expense    1,268      1,325      -4.3%   6,308       5,529      14.1%
Net income            $        $        0.5%    $         $         13.5%
                      3,890     3,869             17,136      15,104
Average diluted       12,438,228 12,332,755         12,403,110  12,279,617
shares outstanding
Diluted earnings per  $0.31      $0.31      0.0%    $1.38       $1.23      12.2%
share
Cash dividends per    $0.165     $0.165     0.0%    $0.66       $0.66      0.0%
share
Payout ratio          53%        53%                48%         54%
Average Balances
Loans, net of         $ 916,796 $ 843,884         $  892,908 $ 819,766
unearned income
Total earning assets  1,652,019  1,486,356          1,617,359   1,407,744
Total assets          1,754,164  1,587,946          1,714,175   1,510,779
Total deposits        1,480,775  1,341,131          1,445,758   1,266,906
Shareholders' equity  146,297    130,480            140,851     122,211
Performance Ratios
Return on average     0.89%      0.97%              1.00%       1.00%
assets
Return on average     10.64%     11.86%             12.17%      12.36%
equity
Net interest margin   3.49%      3.52%              3.49%       3.59%
(FTE)
Loan Charge-Offs
Net loan charge-offs  $        $                $        $  
                      1,932     1,901             4,936       3,142
Net loan charge-offs  0.84%      0.90%              0.55%       0.38%
/ average loans



                     (unaudited)   (unaudited)
                     December 31,  September 30, December     % change versus
                                                 31,
                     2012          2012          2011         9/30/12 12/31/11
                     (Dollars in thousands, except share and
                     per share data)
Ending Balance Sheet
Loans, net of        $        $         $        1.9%    9.2%
unearned income      927,824       910,217       849,883
Loans held for sale  2,398         3,847         1,442        -37.7%  66.3%
Investment           741,770       722,904       641,340      2.6%    15.7%
securities
FHLB and other       6,684         6,755         6,537        -1.1%   2.2%
equity interests
Other earning assets 3,536         4,050         3,895        -12.7%  -9.2%
 Total earning     1,682,212     1,647,773     1,503,097    2.1%    11.9%
assets
Allowance for loan   (14,060)      (13,649)      (12,615)     3.0%    11.5%
losses
Goodwill             10,946        10,946        10,821       0.0%    1.2%
Other assets         93,981        96,127        100,904      -2.2%   -6.9%
 Total assets      $          $           $         1.8%    10.7%
                     1,773,079    1,741,197    1,602,207
Non interest-bearing $        $         $        3.8%    14.7%
deposits             175,239       168,888       152,732
Interest-bearing     1,309,764     1,311,382     1,201,119    -0.1%   9.0%
deposits
 Total deposits    1,485,003     1,480,270     1,353,851    0.3%    9.7%
Borrowings           97,806        74,336        74,456       31.6%   31.4%
Subordinated debt    20,620        20,620        20,620       0.0%    0.0%
Other liabilities    24,286        22,280        21,391       9.0%    13.5%
Common stock         -             -             -            NA      NA
Additional paid in   44,223        44,150        44,350       0.2%    -0.3%
capital
Retained earnings    88,960        87,128        80,038       2.1%    11.1%
Treasury stock       (1,743)       (1,828)       (3,260)      -4.6%   -46.5%
Accumulated other    13,924        14,241        10,761       -2.2%   29.4%
comprehensive income
 Total             145,364       143,691       131,889      1.2%    10.2%
shareholders' equity
 Total liabilities $          $           $   
and shareholders'    1,773,079    1,741,197    1,602,207    1.8%    10.7%
equity
Ending shares        12,475,904    12,470,371    12,377,318
outstanding
Book value per share $       $       $     
                      11.65       11.52          10.66
Tangible book value  $       $       $     
per share (*)         10.77       10.64           9.78
Capital Ratios
Tangible common
equity / tangible    7.63%         7.67%         7.61%
assets (*)
Leverage ratio       8.06%         8.03%         8.22%
Tier 1 risk based    14.03%        14.10%        13.89%
ratio
Total risk based     15.28%        15.36%        15.14%
ratio
Asset Quality
Non-accrual loans    $       $        $     
                     14,445        18,557        16,567
Loans 90+ days past  357           454           441
due and accruing
 Total             14,802        19,011        17,008
non-performing loans
Other real estate    325           491           505
owned
 Total             $       $        $     
non-performing       15,127        19,502        17,513
assets
Loans modified in a
troubled debt
restructuring (TDR):
 Performing TDR    $       $       $     
loans                 9,961       8,726          7,688
 Non-performing    1,660         1,657         -
TDR loans **
 Total TDR    $       $        $     
loans                11,621        10,383         7,688
Non-performing
assets / Loans +     1.63%         2.14%         2.06%
OREO
Non-performing
assets / Total       0.85%         1.12%         1.09%
assets
Allowance for loan   1.52%         1.50%         1.48%
losses / Loans
* - Tangible common equity, tangible assets and tangible book
value per share are non-GAAP financial measures calculated
using GAAP amounts. Tangible common equity is calculated by
excluding the balance of goodwill and other intangible assets
from the calculation of stockholders' equity. Tangible
assets is calculated by excluding the balance of goodwill and
other intangible assets from the calculation of total
assets. Tangible book value per share is calculated by
dividing tangible common equity by the number of shares
outstanding. CNB believes that these non-GAAP financial
measures provide information to investors that is useful in
understanding its financial condition. Because not all
companies use the same calculation of tangible common equity
and tangible assets, this presentation may not be comparable
to other similarly titled measures calculated by other
companies. A reconciliation of these non-GAAP financial
measures is provided below (dollars in thousands, except per
share data).
** - Nonperforming TDR loans are also included in the balance
of non-accrual loans in the previous table.
                     (Dollars in thousands, except share and
                     per share data)
                     (unaudited)   (unaudited)
                     December 31,  September 30, December
                                                 31,
                     2012          2012          2011
Shareholders' equity $        $         $    
                     145,364       143,691       131,889
 Less goodwill   10,946        10,946        10,821
Tangible common      $        $         $    
equity               134,418       132,745       121,068
Total assets         $          $           $   
                     1,773,079    1,741,197    1,602,207
 Less goodwill   10,946        10,946        10,821
Tangible assets      $          $           $   
                     1,762,133    1,730,251    1,591,386
Ending shares        12,475,904    12,470,371    12,377,318
outstanding
Tangible book value  $       $       $     
per share             10.77       10.64           9.78
Tangible common
equity/Tangible      7.63%         7.67%         7.61%
assets

SOURCE CNB Financial Corporation

Website: http://www.bankcnb.com
Contact: Brian W. Wingard, Treasurer, +1-814-765-9621
 
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