Company: CCNE
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0000736772-25-000202
Chunk: 19

Company: CNB FINANCIAL CORP/PA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 19
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 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 attrition rates, cost of deposit base, net maintenance cost associated with customer deposits, and the cost for alternative funding sources. The discount rates used were based on market rates.Deposits: The fair value of interest bearing and non-interest bearing deposits is the amount payable on demand at the acquisition date. The fair value of time deposits was estimated using a discounted cash flow calculation that includes a market rate analysis of the current rates offered by market participants for certificates of deposits that mature in the same period.Short-term Borrowings: Acquired other borrowings consisted of FHLB short-term borrowings. The carrying amount of short-term borrowings was determined to approximate fair value. Subsequent to the completion of the acquisition, the Corporation repaid $265.4 million of $437.0 million in FHLB borrowings.Accrued interest payable and other liabilities: Accrued interest payable and other liabilities were fair valued using the expected amount of cash to be paid.Supplemental Pro Forma Financial InformationThe following table presents supplemental pro forma information as if the Merger had occurred as of January 1, 2024. The unaudited pro forma information combines the historical results of the Corporation and ESSA in the Corporation’s Consolidated Statements of Income and includes adjustments for the estimated impact of certain fair value adjustments such as interest income on loans and securities acquired, amortization of intangibles arising from the merger, depreciation expense on property acquired