Company: CCNE
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0000736772-25-000071
Chunk: 180

Company: CNB FINANCIAL CORP/PA
Filing Date: 2025-03-06
Form: 10-K
Item: Item 8
Chunk 180
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 allowance for credit losses is measured by estimating the fair value of the loan based on the present value of expected cash flows, the market price of the loan, or the underlying fair value of the loan’s collateral. For real estate loans, fair value of the loan’s collateral is determined by third-party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods being the predominant approach. The Corporation reviews the third-party appraisal for appropriateness and may adjust the value downward to consider selling and closing costs. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s businessThe following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2024:FairvalueValuationTechniqueUnobservable InputsRange(WeightedAverage)Collateral-dependent loans receivable:Farmland$352 Valuation of third party appraisal on underlying collateralLoss severity rates37% (37%)Owner-occupied, nonfarm nonresidential properties2,531 Valuation of third party appraisal on underlying collateralLoss severity rates22%-44% (25%)Commercial and industrial2,334 Valuation of third party appraisal on underlying collateralLoss severity rates9%-100% (31%)Other construction loans and all land development loans and other land loans1,196 Valuation of third party appraisal on underlying collateralLoss severity rates38% (38%)Multifamily (5 or more) residential properties19,773 Valuation of third party appraisal on underlying collateralLoss severity rates10% (10%)Non-owner occupied, nonfarm nonresidential5,225 Valuation of third party appraisal on underlying collateralLoss severity rates51% (51%)Home equity lines of credit290 Valuation of third party appraisal on underlying collateralLoss severity rates25%-29% (