Company: CCNE
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000736772-25-000202
Chunk: 148

Company: CNB FINANCIAL CORP/PA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 8
Chunk 148
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45,810 FHLB interests24,218 Bank owned life insurance40,835 Core deposit intangible35,335 Goodwill49,899 Total assets acquired2,123,400 Liabilities assumedDeposits1,455,805 Short-term borrowings437,000 Accrued interest payable and other liabilities24,424 Operating lease liabilities3,601 Total liabilities assumed1,920,830 Net assets acquired$202,570 The Corporation accounted for the Merger using the acquisition method of accounting and accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair value on the acquisition date, in accordance with purchase accounting. The Corporation assessed the fair values based on the following methods for the significant assets acquired and liabilities assumed:

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Cash and cash equivalents: The fair value was determined to approximate the carrying amount based on the short-term nature of these assets.Debt securities AFS: The fair value of the investment portfolio was based on quoted market prices and dealer quotes and pricing obtained from independent pricing services. Following the completion of the Merger, the Corporation sold approximately $204.1 million of $229.1 million in debt securities it acquired through the Merger. These debt securities were sold at fair value and therefore no gain or loss was recognized upon the sale.Loans receivable: The fair value of loans acquired from ESSA were estimated using the discounted cash flow method on an individual loan basis. To estimate the value of the loans, each loans’ contractual cash flows were projected, adjusted for expected prepayments and credit losses. Assumptions for credit losses were based off the risk characteristics of each loan. For loans specifically evaluated by the Corporation, credit losses were based on the estimated loss identified by the Corporation. The projected cash flows were then discounted to present value using a discount rate based on the relative risk of the cash flows. In connection with the acquisition, the Corporation has purchased Purchase Credit Deteriorated ("PCD") loans, some of which have experienced more than insignificant credit deterioration since origination. PCD loans are recorded at the amount paid. An allowance for credit loss is determined using the same methodology as other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or