CNB Community Bancorp, Inc. (OTC: CNBB), the parent company of County National Bank, today announced earnings for the three and nine months ended September 30, 2021. Earnings during the third quarter of 2021 totaled $2.9 million, an increase of $315,000 or 12.1% compared to the $2.6 million earned during the three months ended September 30, 2020. Basic earnings per share for CNB Community Bancorp, Inc. (the “Company”) increased to $1.36 during the three months ended September 30, 2021, up $0.14 from $1.22 during the third quarter of 2020. For the nine months ended September 30, 2021, the Company reported net income of $9.2 million, an increase of $1.5 million, or 19.5%, from the $7.7 million earned during the nine months ended September 30, 2020. Basic earnings per share increased to $4.32 during the nine months ended September 30, 2021, up $0.66 from $3.66 during the first nine months of 2020.

The annualized return on average assets (ROA) decreased to 1.22% for the three months ended September 30, 2021, down 15 basis points or 10.9% from 1.37% for the three months ended September 30, 2020. The annualized return on average equity (ROE) increased to 14.86% for the current quarter, up from 14.81% for the third quarter of 2020. ROA remained flat at 1.29% during the nine months ended September 30, 2021, compared to the first nine months of 2020. ROE was 16.40% during the first nine months of 2021, up from 15.54% during the nine-month period ended September 30, 2020. Book value per share increased to $37.14 at September 30, 2021, up $4.00 from $33.14 at September 30, 2020.

John R. Waldron, President and Chief Executive Officer of CNB Community Bancorp, Inc. and County National Bank, remarked, “CNB continues to grow its customer base while increasing its existing customers’ balances, as 2021 has seen deposits rise by $150 million. Also, while still working with our customers on progressing through the PPP loan process, CNB’s loan growth has been robust with over $44 million in non- PPP growth in 2021. Our increases in loans and deposits has contributed to record earnings for the first nine months of the year of over $9.2 million. I continue to marvel at the successes our employees and our bank have had despite these unprecedented times.”

Financial Highlights

• Total assets increased $152.2 million, or 16.2%, to $1.1 billion from September 30, 2020 and $153.1 million, or 16.3% from December 31, 2020.
• Net loans exclusive of PPP loans increased $63.2 million, or 9.7%, to $716.8 million at September 30, 2021 compared to $653.6 million at September 30, 2020 and increased $53.0 million, or 8.0%, from December 31, 2020.
• Total deposits increased $147.4 million, or 17.5%, to $990.1 million at September 30, 2021 from
• $842.7 million at September 30, 2020 and increased $149.9 million, or 17.8% from December 31, 2020.
• Book value per share increased $4.00, or 12.1%, to $37.14 at September 30, 2021, up from $33.14 at September 30, 2020 and up $3.38 from $33.76 at December 31, 2020.
• CNB funded over $210 million in PPP loans to over 1,800 existing and new customers.
• Net income increased $315,000, 12.1%, to $2.9 for the three month period ended September 30, 2021 and basic EPS increased $0.14, or 11.6%, to $1.36 from $1.22 in the third quarter of 2020.
• Net interest income in the third quarter of 2021 increased $998,000 to $9.0 million compared to the third quarter of 2020.
• Pre-tax, pre-provision income decreased $471,000 to $3.8 million in the third quarter of 2021, compared to $4.2 million in the third quarter of 2020.

Balance Sheet Review

The Company’s assets totaled $1.1 billion at September 30, 2021 compared to $937.9 million at December 31, 2020, and $938.9 million at September 30, 2020. The increase in assets was predominately related to the increase in cash from customer deposits, partially as a result of the Paycheck Protection Program (the “PPP”), a fully government supported loan program for small businesses, as well as from government-initiated stimulus checks and new customers that have been leveraged by our continued community outreach programs. CNB funded over $210 million in PPP loans to over 1,800 existing and new customers and has already assisted over 75% of those loans to be forgiven as of September 30, 2021.

Net loans totaled $768.2 million at September 30, 2021, compared to $761.2 million at December 31, 2020 and $786.5 million at September 30, 2020.

The loan portfolio at September 30, 2021 included: $383.1 million in commercial real estate loans, $178.3 million in commercial loans, $130.2 in residential real estate loans, $51.4 in PPP loans and $38.7 million in consumer loans.

Nonperforming assets (which are predominately comprised of nonperforming loans and other real estate owned (“OREO”)) at September 30, 2021 were $2.2 million compared to $2.6 million at December 31, 2020 and $3.0 million at September 30, 2020. Nonperforming assets as a percentage of total assets decreased to 0.21% at September 30, 2021 from 0.28% at December 31, 2020 and 0.37% at September 30, 2020.

Nonperforming loans at September 30, 2021 were $2.2 million, decreasing $388,000 from the $2.6 million balance at December 31, 2020 and a decrease of $812,000 from the $3.0 million balance at September 30, 2020. Nonperforming loans as a percentage of total loans (excluding PPP loans) decreased to 0.30% at September 30, 2021, as compared to 0.38% at December 31, 2020 and 0.45% at September 30, 2020.

During the third quarter of 2021, there was recorded a provision for loan losses of $105,000, which is a decrease of $885,000 from a provision of $990,000 recorded during the third quarter of 2020. Net recoveries totaled $8,000 during the third quarter of 2021 compared to net charge-offs of $125,000 in the fourth quarter of 2020 and net charge-offs of $1,000 in the third quarter of 2020.

Net charge-offs as a percentage of average loans was 0.00% for third quarter of 2021, which was a decrease from net charge-offs of 0.01% from the fourth quarter of 2020 and flat from the 0.00% from the third quarter of 2020. The allowance for loan losses totaled $11.7 million at September 30, 2021 compared to $10.5 million at December 31, 2020 and $9.4million at September 30, 2020. The allowance for loan losses as a percentage of total loans (exclusive of PPP loans) increased from 1.55% at December 31, 2020 and 1.38% at September 30, 2020 to 1.60% at September 30, 2021. The increase in the required allowance for loan losses is directly attributable to the impact on the regional economy from the worldwide pandemic and the growth of the loan portfolio. In addition, the continued economic disruption from the COVID-19 virus has the potential to impact the portfolio for the immediate future. The allowance will continue to be adjusted based upon all these perceived risks inherent in the portfolio.

Total investment securities, exclusive of the Federal Home Loan Bank of Indianapolis, Federal Reserve Bank and other stock without readily determined fair value aggregated to $38.5 million at September 30, 2021, an increase of 28.3% from $30.0 million at December 31, 2020 and an increase of 29.2% from $29.8 million at September 30, 2020. The increase from year-end 2020 was largely a result of continued focus on effectively employing the cash on the balance sheet partially offset by maturities of municipals and certificate of deposits combined with a material increase in amortization of purchase premiums and paydowns. Overall, the Bank continues to plan for growth in the portfolio through prudent investment in securities that align with the Bank’s investment criteria regardless of the rate environment.

Noninterest bearing deposits have increased by $52.5 million (22.9%) from $229.4 million at December 31, 2020 and $39.0 million (16.1%) from $242.9 million one year ago. Interest bearing deposits have increased from $610.8 million at December 31, 2020 and $599.8 million at September 30, 2020 to $708.2 million at September 30, 2021. The growth in deposits is still a result of ongoing efforts by our employees as well as customers continuing to maintain high levels of deposit balances due to continued economic uncertainties.

Total shareholders’ equity increased by $7.2 million (10.0%) from $72.0 million at December 31, 2020 and $9.0 million (12.9%) from $70.2 million one year ago. The increase from year end 2020 of $7.2 million was mainly related to earnings during 2021 of $9.2 million, which were partially offset by three quarterly $0.27 per share cash dividends totaling $1.8 million.