CNB Financial (CCNE) risk factors, FY2024 10-K

Other

1. 01Economic conditions could adversely affect our business and financial results
2. 02The Corporation may not be able to meet its cash flow needs on a timely basis at a reasonable cost, and the Corporation’s cost of funds for banking operations may significantly increase as a result of general economic conditions, interest rates and competitive pressures
3. 03The Bank’s allowance for credit losses may not be adequate to cover loan losses which could have a material adverse effect on the Corporation’s business, financial condition and results of operations
4. 04Interest rate volatility could significantly reduce the Corporation’s profitability
5. 05The Corporation’s investment securities portfolio is subject to credit risk, market risk, and liquidity risk, and declines in value in its investment securities portfolio may require it to record impairment charges that could have a material adverse effect on its results of operations and financial condition
6. 06As a requirement of membership in the FHLB of Pittsburgh, the Bank must own a minimum required amount of FHLB stock, calculated periodically based primarily on its level of borrowings from the FHLB. Borrowings from the FHLB represent the Bank’s primary source of short-term and long-term wholesale funding
7. 07If the capitalization of the FHLB of Pittsburgh is substantially diminished, the Bank’s liquidity may be adversely impacted if it is not able to obtain alternative sources of funding
8. 08The Bank could be held responsible for environmental liabilities relating to properties acquired through foreclosure, resulting in significant financial loss

Risks Related to an Investment in the Corporation’s Securities

1. 09Some provisions contained in the Corporation’s articles of incorporation and its bylaws and under Pennsylvania law could deter a takeover attempt or delay changes in control or management of the Corporation
2. 10The price of the Corporation’s common stock may fluctuate significantly, and this may make it difficult for you to resell shares of common stock owned by you at times or at prices you find attractive
3. 11The Corporation’s ability to pay dividends is limited by law and regulations

Operational and Strategic Risks

1. 12The Bank’s loans are principally concentrated in certain areas of Pennsylvania, Ohio, New York and Virginia, and adverse economic conditions in those markets could adversely affect the Corporation’s business, financial condition and results of operations
2. 13Severe weather, flooding and other effects of climate change and other natural disasters, such as earthquakes, could adversely affect our financial condition, results of operations or liquidity
3. 14The Corporation depends on the accuracy and completeness of information about customers and counterparties
4. 15The risks presented by acquisitions could adversely affect our financial condition and results of operations
5. 16Strong competition within the Corporation’s markets and technological change may have a material adverse impact on its profitability
6. 17The soundness of other financial institutions with which the Corporation does business could adversely affect the Corporation’s business, financial condition or results of operations
7. 18The Corporation’s operations may be adversely affected if its external vendors do not perform as expected or if its access to third-party services is interrupted
8. 19A pandemic and measures intended to prevent its spread, could have a material adverse effect on our business, results of operations, cash flows, and financial condition
9. 20Our business and financial performance could be adversely affected, directly or indirectly, by terrorist activities, international hostilities or domestic civil unrest
10. 21Our use of artificial intelligence could expose us to various risks

Risks Related to Legal and Compliance Matters

1. 22The Corporation is subject to extensive government regulation and supervision, which may affect its ability to conduct its business and may negatively impact its financial results
2. 23Federal and state governments could pass legislation responsive to current credit conditions which could cause the Corporation to experience higher credit losses
3. 24The Corporation relies on its management and other key personnel, and the loss of any of them may adversely affect its operations
4. 25The Corporation's risk management framework may not be effective in mitigating risk and loss

Risks Related to the Merger with ESSA

1. 26The market price of the Corporation’s common stock may decline as a result of the Merger and the market price of the Corporation’s common stock after the consummation of the Merger may be affected by factors different from those affecting the price of the Corporation’s common stock before the Merger
2. 27The market price of the Corporation’s common stock may decline as a result of the Merger if the Corporation does not achieve the perceived benefits of the Merger or the effect of the Merger on the Corporation’s financial results is not consistent with the expectations of financial or industry analysts
3. 28The Merger Agreement may be terminated in accordance with its terms and the Merger may not be completed
4. 29Failure to complete the Merger could negatively impact the stock price of the Corporation and its future business and financial results
5. 30The integration of the Corporation and ESSA will present significant challenges and expenses that may result in the combined business not operating as effectively as expected, or in the failure to achieve some or all of the anticipated benefits of the transaction