Company: CCNE
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000736772-25-000202
Chunk: 149

Company: CNB FINANCIAL CORP/PA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 8
Chunk 149
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 premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit loss expense.The Corporation evaluated acquired loans for deterioration in credit quality based on any of, but not limited to, the following: (1) non-accrual status; (2) modifications for borrowers experiencing financial difficulty; (3) risk ratings of watch, special mention, substandard or doubtful; and (4) loans greater than 60 days past due. Of the $1.7 billion net loans held for investment acquired, $132.2 million were identified as PCD loans on the acquisition date. The following table provides a summary of these PCD loans at acquisition:July 23, 2025Par value of acquired loans at acquisition$138,153 Allowance for credit losses at acquisition(1,857)Non-credit discount at acquisition(4,121)Total merger consideration$132,175 Premises and equipment: The fair value of bank premises and equipment held for use was valued by obtaining recent market data for similar property types with adjustments for characteristics of individual properties. The Corporation acquired 20 branches from ESSA, 10 of which were owned premises.Operating lease right of use (“ROU”) assets and lease liabilities: The fair value of the lease ROU assets was measured at an amount equal to the lease liability and evaluated for favorable or unfavorable lease terms when compared with market terms on a lease-by-lease basis.Accrued interest receivable and other assets: Consists mainly of accrued interest receivable, accounts receivable, and deferred tax assets. The accrued interest receivable and accounts receivable was fair valued based on the cash value expected to be received. Deferred taxes represent the expected book and tax differences which approximate fair value. FHLB interests: Included in the identifiable assets acquired is FHLB stock, which represents the acquired entity’s required membership stock in the Federal Home Loan Bank system, carried at par value (cost) with no readily determinable fair market value, consistent with ASC 942-325. Bank owned life insurance (“BOLI”): The fair value of BOLI is carried at its current cash surrender value, which is the most reasonable estimate of fair value.

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Core deposit intangibles (“CDI”): CDI represents the future economic benefit of acquired customer deposits. The fair value of the CDI was estimated based on a discounted cash flow methodology that incorporated expected customer