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CNB Financial Corp. Announces Third Quarter Earnings.



CANAJOHARIE Canajoharie may refer to:
  • Canajoharie (town), New York
  • Canajoharie (village), New York
  • Canajoharie Central School District
  • Canajoharie and Catskill Railroad
, N.Y.--(BUSINESS WIRE)--Oct. 25, 1999--

CNB CNB Czech National Bank
CNB Centro Nacional de Biotecnologia
CNB City National Bank
CNB Citizens National Bank
CNB Croatian National Bank
CNB Chloronitrobenzene
CNB Corresponsales No Bancarios (Spanish, Colombia) 
 Financial Corp. (Nasdaq:CNBF) announced operating results for the three and nine month periods ended September. 30, 1999.

Net income for the third quarter of 1999 amounted to $1.658 million, an 10.5 percent decrease from the $1.852 million reported for the third quarter of 1998, while net income for the nine months ended September 30, 1999 amounted to $4.804 million, a 11.5 percent decrease from the $5.428 million reported for the nine months ended September 30, 1998. Diluted earnings per share diluted earnings per share

An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of
 amounted to $0.22 for the quarter ended September 30, 1999, an 8.3 percent decrease compared to diluted earnings per share of $0.24 for the quarter ended September 30, 1998 and diluted earnings per share for the nine months ended September 30, 1999 amounted to $0.63, an 11.3 percent decrease compared to diluted earnings per share of $0.71 for the nine months ended September 30, 1998. Cash dividends paid to shareholders in the first nine months of 1999 totaled $0.25 per share, or 12 percent higher than the $0.22 per share paid in the first nine months of 1998.

The decrease in net income in the third quarter of 1999 when compared to the third quarter of 1998, was due primarily to the Corporation's continued expansion. On August 27, 1999, Central National Bank, Canajoharie, New York Canajoharie, New York may refer to:
  • Canajoharie (town), New York
  • Canajoharie (village), New York
 ("CNB"), the principal banking subsidiary of CNB Financial Corp., completed its acquisition of five bank branches and related deposits from Astoria Federal Savings and Loan Association Federal Savings and Loan Association

An institution chartered by the federal government whose primary function is to collect savings deposits and to provide mortgage loans.
 ("AFS A distributed file system for large, widely dispersed Unix and Windows networks from Transarc Corporation, now part of IBM. It is noted for its ease of administration and expandability and stems from Carnegie-Mellon's Andrew File System.

AFS - Andrew File System
"). The five branches are located in Central New York Central New York is a term used to broadly describe the central region of New York State, roughly including the following counties and cities:

Cayuga County – Auburn
Cortland County – Cortland
Madison County – Oneida
 State, in the communities of Oneonta (3), Cooperstown and Norwich. In addition, CNB opened two branches (Clifton Park and Whitesboro, New York Whitesboro is a village in Oneida County, New York, United States. United States. The population was 3,943 at the 2000 census. The village is named after Hugh White, an early settler.

The Village of Whitesboro is inside the Town of Whitestown.
) in the third quarter of 1999. This expansion activity resulted in an increase in operating expenses Operating expenses

The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted.
 in the third quarter of 1999. Included in the increases were salaries and employee benefits, occupancy and equipment, advertising, stationary Stationary can mean:
  • Fixed in position, or mode: immobile.
  • Unchanging in condition or character.
  • In statistics and probability: a stationary process.
  • In mathematics: a stationary point.
  • In mathematics: a stationary set.
 and supplies. In addition, interest on junior subordinated debentures subordinated debenture

An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before
 and amortization of the goodwill incurred with the purchase of the AFS branches, have added on going expenditures. The increase in advertising and stationary and supplies are a result of start-up Start-up

The earliest stage of a new business venture.
 costs associated with acquiring and opening branches.

As a result of the acquisition of branches, CNB assumed approximately $156.5 million in deposits, including accrued interest Accrued Interest

The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date.

There are two methods for calculating accrued interest:
1) 360-day year method, used for corporate and municipal bonds.
 payable, and paid a premium of 12.1 percent on the deposits. In consideration for its assumption of the deposits and other liabilities other liabilities

Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately.
, CNB received the branch-related assets (primarily fixed assets fixed assets nplactivo sg fijo

fixed assets nplimmobilisations fpl

fixed assets fix npl
) and a total net cash payment equal to approximately $133.9 million. A substantial portion of this cash was invested in federal funds Federal Funds

Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements.

Notes:
These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve
 sold during the third quarter of 1999 which bears a much lower rate of interest than loans and securities. As CNB continues to deploy these funds in higher yielding loans and securities, an improvement in operating results is anticipated.

The decrease in net income for the nine months ended September30, 1999 when compared to the same period in 1998 was due primarily to the expansion activity that occurred in the third quarter of 1999, noted above, and a write-down Write-Down

Reducing the book value of an asset because it is overvalued compared to the market value.

Notes:
This is usually reflected in the company's income statement as an expense, thereby reducing net income.
 of a corporate bond in the second quarter 1999 of $879,000 after tax ($1.187 million pre-tax). Excluding the write-down, net income would have been $5.683 million for the nine months ended September 30, 1999, an increase of $255,000 (4.7 percent) over the same period in 1998. Diluted earnings per share would have been $0.75 per share for the nine months ended September 30, 1999, an increase of $0.04 (5.6 percent). The increase in net income excluding the write-down was due primarily to an increase in net interest income of $1.285 million (6.5 percent). The increase in net interest income is due primarily to the Corporation's growth in earning assets Earning Assets

Any income-earning asset owned by a company.

Notes:
These assets are generally interest-bearing accounts, bonds, and securities available for sale.
See also: Asset, Asset Valuation, Earnings, Net Interest Margin
. The average balance of earning assets increased from $644.5 million for the nine months ended September 30, 1998 to $716.1 million for the nine months ended September 30, 1999, an increase of $71.6 million (11.1 percent).

Due primarily to the acquisition of branches from AFS, the Corporation's total assets increased $161.1 million (23.1 percent) from $697.0 million at September 30, 1998 to $858.1 million at September 30, 1999. Return on average assets for the nine months ended September 30, 1999 was 11.25 percent vs. 13.07 percent for the same period in 1998. Excluding the write-down, return on average assets would have been 1.02 percent and return on average equity would have been 13.29 percent for the nine months ended September 30, 1999. Asset quality continues to improve, as the ratio of non-performing assets to total assets decreased from 0.95 percent at September 30, 1998 to 0.72 percent at September 30, 1999. The ratio of the allowance for loan losses to non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms.  increased from 154 percent at September 30, 1998 to 166 percent at September 30, 1999.

Headquartered in Canajoharie, New York, CNB Financial Corp. is the holding company for Central National Bank, Canajoharie, and Central Asset Management, Inc. Central National Bank provides a broad range of deposit and loan products to area consumers, businesses and government entities. The bank operates 27 full service branch offices and two financial service centers throughout eight counties in Central New York. Central Asset Management provides investment advisory services advisory services

advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal
. Visit our web site on the World Wide Web at http:www.canajonb.com.

Except for historical information contained herein, the matters discussed in this news release and other information contained in CNB Financial Corp.'s Securities and Exchange Commission filings may express "forward-looking statements forward-looking statement

A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections.
". Those "forward-looking statements" may involve risk and uncertainties, including statements concerning future events or performance and assumptions and other statements that are other than statements of historical facts. CNB Financial Corp. wishes to caution readers not to place undue reliance on any "forward-looking statements", which speak only as of the date made. Readers are advised that various risk factors, including but not limited to: (1) credit risk, (2) interest rate risk, (3) competition, (4) certain vendors' critical systems or services failing to comply with Year 2000 programming issues, (5) changes in the regulatory environment, and (6) changes in general business and economic trends, could cause the actual results or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact.
     2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or
 for future periods to differ materially from those anticipated or projected. CNB Financial Corp. does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to any "forward-looking statements" to reflect the occurrence of unanticipated events or circumstances after the date of such statement. -0-
                          CNB FINANCIAL CORP.
              UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTS
                        (Dollars in Thousands)

QUARTERLY DATA              9/30/99      9/30/98     Change
                                                    (in percents)
Summary of Operations
  Net interest income        $7,458         $6,531      14.2
  Provision for loan losses     340            320       6.3
  Net gain on securities trans   32             82     (61.0)
  Other income                  998            938       6.4
  Other expenses              5,853          4,736      23.6
  Net Income                  1,658          1,852     (10.5)

Performance Ratios (Annualized):
 (in percents)
  Net interest margin
   (tax equivalent)           4.08 percent    4.21 percent
  Return on average assets    0.86 percent    1.09 percent
  Return on average equity   12.05 percent   13.33 percent

YEAR-TO-DATE DATA (Y-T-D)

Summary of Operations:
  Net interest income       $20,972        $19,687       6.5 percent
  Provision for loan losses   1,060            610      73.8 percent
  Net (loss) gain on           (620)           318    (295.0) percent
   securities transactions(1)
  Other income                2,916          2,682       8.7 percent
  Other expenses             15,648         14,745       6.1 percent
  Net income                  4,804          5,428     (11.5) percent
  Net Income(2)               5,683          5,428       4.7 percent

Performance Ratios (Annualized):
  (in percents)
  Net interest margin
  (tax equivalent) 4.07 percent 4.25 percent Return on average assets
  0.87 percent 1.07 percent Return on average assets(2) 1.02 percent

  1.07 percent Return on average equity 11.25 percent 13.07 percent
  Return on average equity(2)13.29 percent 13.07 percent

BALANCE SHEET DATA             9/30/99            9/30/98

  Assets                      $858,129           $696,958
  Deposits                     759,652            618,719
  Gross loans                  425,383            371,561
  Allowance for loan losses      8,508              8,403
  Non-performing loans           5,137              5,454
  Allowance to
   non-performing loans
   (in percents)                   166 percent        154 percent
  Allowance to total loans
   (in percents)                   2.0 percent        2.3 percent
  Stockholders' equity          56,576             56,067

(1)  -- Includes write-down of corporate bond of $1.187 million in the
     quarter ended June 30, 1999.

(2)  -- Excludes after tax $879,000 write-down of corporate bond in
     the quarter ended June 30, 1999.

COPYRIGHT 1999 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Business Wire
Date:Oct 26, 1999
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