CNB Financial Q3 profit rises on ESSA deal

Overview

• U.S. regional bank's Q3 net income and EPS rose sharply yr/yr, aided by ESSA acquisition

• Q3 revenue increased yr/yr, driven by higher net interest income and loan growth

• Q3 deposits declined due to exit from higher-cost corporate deposits; underlying deposits rose

Outlook

• CNB Financial sees a sound loan production pipeline and deposit growth opportunities entering Q4

• Company expects to sustain a positive net interest margin amid changing interest rate environment

• Company expects continued accretion of tangible book value despite higher unrealized investment losses

Result Drivers

• LOAN GROWTH - Increase in organic loans was primarily driven by growth in commercial real estate and residential real estate loans

• TREASURY MANAGEMENT - Growth in noninterest-bearing deposits was primarily driven by new and expanded treasury management customer relationships

• NET INTEREST INCOME - Higher net interest income reflected impact of ESSA acquisition and legacy loan portfolio growth

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for CNB Financial Corp is $38.00, about 9.9% above its October 20 closing price of $34.58

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

Reuters Recommended Reads

• Oct 20 - Commerce Bancshares Q3 EPS beats, helped by loan growth

• Oct 20 - East West Bancorp Q3 revenue beats estimates on loan and deposit growth

• Oct 21 - Community Trust Bancorp's Q3 net interest income rises nearly 10%

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)