CNB Financial Corp., the parent company of CNB Bank, reported a profit of $5 million, or $0.35 per share, for the first quarter in 2016 compared with $5.6 million for the quarter in the first quarter of 2016.
Headquartered in Clearfield, Pa., CNB Bank is the second largest bank in Crawford County with two offices in Bucyrus.
Total deposits for the first quarter were $1.9 billion, an increase of $22.8 million, or 1.2 percent, as compared to the first quarter in 2015. CNB’s loan to deposit ratio increased from 72.6 percent in the first quarter of 2015 to 85 percent for the same quarter in 2016.
Total loans for the first quarter were $1.6 billion, an increase of $250.2 million, or 18.4 percent, as compared with the same period last year. CNB said its loan growth during the 12 months ended March 31 were organic.
“CNB is pleased to see a turnaround in deposit growth so far in 2016 after a lull in 2015. While funding is not currently an issue, increasing deposits is core to our fundamental business. Some concern continues to surround the narrowing of our net interest margin. The margin contraction of 15 basis points on a year over year basis is significant. We expect to maintain the current margin throughout the rest of 2016,” said Joseph B. Bower, Jr., president and chief executive officer, in a statement.
In December 2015, CNB announced the acquisition of Lake National Bank, headquartered in Mentor, which is expected to close in the third quarter of 2016, subject to receipt of certain regulatory approvals and the approval of Lake National Bank’s shareholders.
Net interest margin on a fully tax equivalent basis was 3.67 percent for the first quarter of 2016 compared with 3.82 percent for the first quarter of 2015.
CNB recorded a provision for loan losses of $1.2 million in the first quarter of this year as compared with a provision for loan losses of $943,000 for the same period last year.
Non-interest income was $3.1 million for both the first quarter of 2015 and 2016.
Throughout 2015 and the first three months of 2016, CNB said it made numerous infrastructure, personnel and other investments to facilitate its continued growth.
“In order to better serve our customers and to achieve operational efficiencies, CNB is undertaking a core processing system upgrade with completion scheduled for the second quarter of 2016,” the company said.
Total non-interest expenses were $14.2 million and $13.1 million during the first quarters of 2016 and 2015, respectively. Included in non-interest expenses in the first quarter of 2016 were $109,000 of non-recurring items, with merger related expenses of $42,000 and costs associated with its core processing system upgrade of $67,000. The company expects an additional $450,000 in one-time costs related to the core processing system upgrade in the second quarter of 2016.
Salaries and benefits expenses increased $866,000, or 13.1 percent, during the first quarter of 2016 compared with same quarter of 2015. As of March 31, CNB had 441 full-time employees, compared with 419 as of March 31, 2015. Added staff during this period included both customer-facing personnel such as business development and wealth management officers, as well as support department personnel.
The ratio of non-interest expenses to average assets was 2.47 percent and 2.41 percent during the first quarters of 2016 and 2015, respectively.