CNB Financial Corporation and ESSA Bancorp, Inc. Announce Strategic Merger
CNB Financial (CCNE) and ESSA Bancorp have announced a strategic merger valued at approximately $214 million. Under the all-stock transaction, ESSA shareholders will receive 0.8547 shares of CNB common stock for each ESSA share, valued at approximately $21.10 per share.
The combined entity will have approximately $8 billion in total assets, $7 billion in deposits, and $6 billion in total loans. ESSA Bank will operate as a division of CNB Bank, maintaining its existing geographic footprint across the Lehigh Valley, Greater Pocono, Scranton/Wilkes-Barre, and suburban Philadelphia areas.
The merger is expected to be 35% accretive to CNB's diluted earnings per share in 2026 and is projected to deliver a return on average tangible common equity of ~16%. The transaction is anticipated to close in the third quarter of 2025, subject to shareholder and regulatory approvals.
CNB Financial (CCNE) ed ESSA Bancorp hanno annunciato una fusione strategica del valore di circa 214 milioni di dollari. Nell'ambito dell'operazione tutta in azioni, gli azionisti di ESSA riceveranno 0,8547 azioni di CNB per ogni azione ESSA, valutate a circa 21,10 dollari per azione.
L'entità combinata avrà approssimativamente 8 miliardi di dollari in attivi totali, 7 miliardi di dollari in depositi e 6 miliardi di dollari in prestiti totali. La banca ESSA opererà come una divisione della banca CNB, mantenendo la sua attuale presenza geografica nelle aree della Lehigh Valley, Greater Pocono, Scranton/Wilkes-Barre e nei sobborghi di Philadelphia.
Si prevede che la fusione sia 35% accretiva per l'utile diluito per azione di CNB nel 2026 e si stima un ritorno sul patrimonio netto tangibile medio di circa il 16%. Si prevede che la transazione si concluda nel terzo trimestre del 2025, soggetta all'approvazione degli azionisti e delle autorità di regolamentazione.
CNB Financial (CCNE) y ESSA Bancorp han anunciado una fusión estratégica valorada en aproximadamente 214 millones de dólares. En la transacción de pura acción, los accionistas de ESSA recibirán 0.8547 acciones de CNB por cada acción de ESSA, valoradas en aproximadamente 21.10 dólares por acción.
La entidad combinada tendrá aproximadamente 8 mil millones de dólares en activos totales, 7 mil millones de dólares en depósitos y 6 mil millones de dólares en préstamos totales. ESSA Bank operará como una división de CNB Bank, manteniendo su huella geográfica existente en el Valle de Lehigh, Greater Pocono, Scranton/Wilkes-Barre y las áreas suburbanas de Filadelfia.
Se espera que la fusión sea 35% accretiva para las ganancias diluidas por acción de CNB en 2026 y se proyecta un retorno sobre el patrimonio tangible común promedio de alrededor del 16%. Se anticipa que la transacción se cierre en el tercer trimestre de 2025, sujeta a la aprobación de los accionistas y a la regulación correspondiente.
CNB 금융 (CCNE)와 ESSA 뱅코프가 약 2억 1400만 달러로 평가되는 전략적 합병을 발표했습니다. 전량 주식 거래에 따라 ESSA 주주들은 각 ESSA 주당 0.8547 주의 CNB 보통주를 받게 되며, 주당 약 21.10 달러로 평가됩니다.
결합된 기업은 약 80억 달러의 총 자산, 70억 달러의 예금, 60억 달러의 총 대출을 보유하게 됩니다. ESSA 은행은 CNB 은행의 한 부서로 운영되며, 레하이 밸리, 그레이터 포코노, 스크랜턴/윌크스-바레, 필라델피아 교외 지역에서 기존의 지리적 범위를 유지합니다.
합병은 2026년 CNB의 희석 주당 수익에 35%의 가치를 더할 것으로 예상되며, 약 16%의 평균 유형 자본에 대한 수익률을 제공할 것으로 예상됩니다. 이 거래는 주주 및 규제 당국의 승인을 조건으로 2025년 3분기 내 마무리될 것으로 보입니다.
CNB Financial (CCNE) et ESSA Bancorp ont annoncé une fusion stratégique d'une valeur approximative de 214 millions de dollars. Dans le cadre de cette opération entièrement en actions, les actionnaires d'ESSA recevront 0,8547 actions de CNB pour chaque action d'ESSA, évaluées à environ 21,10 dollars par action.
L'entité combinée disposera d'environ 8 milliards de dollars d'actifs totaux, de 7 milliards de dollars de dépôts et de 6 milliards de dollars de prêts totaux. La banque ESSA fonctionnera comme une division de la banque CNB, conservant son empreinte géographique existante dans la vallée de Lehigh, le Grand Pocono, Scranton/Wilkes-Barre et les banlieues de Philadelphie.
La fusion devrait être 35% bénéficiaire pour le bénéfice dilué par action de CNB en 2026 et devrait permettre un rendement sur les capitaux propres tangibles moyens d'environ 16%. La transaction devrait se clôturer au troisième trimestre de 2025, sous réserve de l'approbation des actionnaires et des autorités réglementaires.
CNB Financial (CCNE) und ESSA Bancorp haben eine strategische Fusion mit einem Wert von etwa 214 Millionen Dollar angekündigt. Im Rahmen der vollständig aktienbasierten Transaktion erhalten ESSA-Aktionäre 0,8547 Aktien von CNB für jede ESSA-Aktie, die ungefähr 21,10 Dollar pro Aktie wert ist.
Die kombinierte Einheit wird über etwa 8 Milliarden Dollar an Gesamtvermögen, 7 Milliarden Dollar an Einlagen und 6 Milliarden Dollar an Gesamtdarlehen verfügen. Die ESSA Bank wird als Division der CNB Bank agieren und ihre bestehende geografische Präsenz im Lehigh Valley, Greater Pocono, Scranton/Wilkes-Barre und den Vororten von Philadelphia beibehalten.
Es wird erwartet, dass die Fusion 35% adds zu den verwässerten Erträgen pro Aktie von CNB im Jahr 2026 beiträgt und eine Rendite auf das durchschnittliche Eigenkapital von etwa 16% erzielen wird. Der Abschluss der Transaktion wird für das dritte Quartal 2025 erwartet, vorbehaltlich der Genehmigungen von Aktionären und Aufsichtsbehörden.
- Transaction expected to be 35% accretive to CNB's EPS in 2026
- Combined entity will have $8B in assets, $7B in deposits, and $6B in loans
- Projected 16% return on average tangible common equity in 2026
- Pro forma deposit franchise will rank in Top 10 in Pennsylvania
- Expected 1.3% return on average assets in 2026
- 15% tangible book value per share dilution at transaction close
- 3.3-year earnback period for tangible book value dilution
Insights
This strategic merger represents a significant expansion for CNB Financial, creating a formidable banking entity with
The deal's pricing implies a reasonable earnback period of 3.3 years for the
The merger's strategic value extends beyond pure financials. CNB's expansion into eastern Pennsylvania's lucrative markets, particularly the Lehigh Valley, presents substantial growth opportunities. The transaction propels the combined entity into Pennsylvania's top 10 deposit franchises, securing a top 3 position in the greater Lehigh Valley region - a important competitive advantage for market penetration and revenue generation.
CNB's multi-brand strategy preserving ESSA's identity as a division demonstrates smart market positioning, maintaining local relationships while leveraging expanded capabilities. The absence of branch overlap eliminates redundancy concerns while maximizing market coverage. Integration risk appears minimal given CNB's proven M&A track record and the cultural alignment between both institutions.
Market implications of this merger are compelling. The deal strengthens CNB's competitive position in Pennsylvania's banking landscape, particularly in high-growth metropolitan areas. The combined entity's enhanced scale (
The transaction's structure as an all-stock deal preserves capital flexibility while offering ESSA shareholders continued upside participation. The expanded lending capacity and broader product suite should drive revenue synergies, particularly in commercial banking where CNB's "commercial-oriented playbook" can be deployed across ESSA's markets.
CLEARFIELD, PA and STROUDSBURG, PA, Jan. 10, 2025 (GLOBE NEWSWIRE) -- CNB Financial Corporation (Nasdaq: CCNE) (“CNB”), parent company of CNB Bank, and ESSA Bancorp, Inc. (Nasdaq: ESSA) (“ESSA”), parent company of ESSA Bank & Trust (“ESSA Bank”), jointly announced today that they have entered into a definitive agreement pursuant to which ESSA will merge with and into CNB, and ESSA Bank will merge with and into CNB Bank. The combined company is expected to have approximately
The transaction consideration is all common stock and is presently valued at approximately
Headquartered in Stroudsburg, PA, ESSA operates 20 community offices throughout the Lehigh Valley, Greater Pocono, Scranton/Wilkes-Barre, and suburban Philadelphia areas. Following completion of the merger, ESSA Bank & Trust will operate as ESSA Bank, a division of CNB Bank (“ESSA Bank” or “ESSA division”), operating within its existing geographic footprint. CNB anticipates accelerating growth in the greater Lehigh Valley and Scranton/Wilkes-Barre markets utilizing its commercial-oriented playbook and expanding fee-based business lines, bolstering its presence across Pennsylvania.
Under the terms of the merger agreement, CNB and CNB Bank will each add three directors from ESSA to their respective boards of directors. Gary S. Olson, current President, CEO, and Director of ESSA, Robert C. Selig Jr., current Chairman of the Board of ESSA, and Daniel J. Henning, ESSA Director, will join both the CNB board and the CNB Bank board following the consummation of the merger. Additionally, Mr. Olson will have a role as strategic advisor to CNB’s Chief Executive Officer. Also, CNB will form a Board of Advisors for the ESSA Bank division.
“We are excited to partner with ESSA which shares such a strong banking tradition with CNB. This combination aligns two high performing banks with an exceptional commitment to client-focused services for its customers and financial support to sustain the economic vitality of the communities in which they operate,” announced Michael D. Peduzzi, President and CEO of CNB. “There are many similarities between the markets of ESSA and our existing CNB locations, as well as with our personal approach to banking. We understand the needs of the commercial, retail, and wealth management customers in these markets and look forward to providing the ESSA division with the support and assistance they need to continue to grow and thrive.”
Mr. Olson added, “CNB is a powerful partner for our bank that closely mirrors our culture and values, making the transaction a natural fit. CNB’s multi-state, multi-brand business model fosters our entrepreneurial spirit, and continues our commitment and presence in eastern Pennsylvania. Leveraging CNB’s infrastructure and robust capital position, suite of banking products, and combined larger lending limit, will further enhance our community banking model, and continue to serve our new and existing customers extremely well.”
Strategic Transaction Highlights:
- Expands CNB’s services to eastern Pennsylvania and the greater Lehigh Valley market without any branch overlap.
- Pro forma deposit franchise will rank the combined company within the Top 10 in Pennsylvania and Top 3 in the greater Lehigh Valley.
- Low execution risk: CNB is a seasoned acquiror with an executive management team possessing extensive experience in M&A integration.
- Strong cultural alignment: ESSA’s community banking model fits within CNB’s operating philosophy and established multi-state, multi-brand business model.
- Financially attractive economics: The merger is expected to be ~
35% accretive to CNB’s diluted earnings per share in 2026, inclusive of fully phased-in cost synergies. Tangible book value per share dilution at transaction close is projected to be15% , with an earnback period of approximately 3.3 years. - CNB projects pro forma 2026 to deliver a return on average tangible common equity of ~
16% and a return on average assets of ~1.3% . - The combined company is expected to have a very sound estimated pro forma balance sheet at transaction close, with a tangible common equity to tangible asset (TCE/TA) ratio of ~
7.7% , Common Equity Tier 1 (CET1) capital ratio of ~10.7% , and loan to deposit ratio of ~89% .
The transaction has been unanimously approved by the Board of Directors of both companies and is expected to be completed in the third quarter of 2025 subject to approval by shareholders of both ESSA and CNB, as well as regulatory approvals and other customary closing conditions.
Stephens Inc. is serving as CNB’s exclusive financial advisor, and Hogan Lovells US LLP is serving as its legal advisor. Piper Sandler & Co rendered a fairness opinion to CNB’s board. PNC FIG Advisory, part of PNC Capital Markets LLC, is serving as ESSA’s exclusive financial advisor and rendered a fairness opinion to ESSA’s board, and Luse Gorman LLP is serving as its legal advisor.
About CNB Financial Corporation
CNB Financial Corporation is a financial holding company with consolidated assets of approximately
About ESSA Bancorp, Inc.
ESSA Bancorp, Inc. is the holding company for its wholly owned subsidiary, ESSA Bank & Trust, which was formed in 1916. The company has total assets of
Investor Presentation
An investor presentation that provides additional details regarding this transaction is available online at cnbbank.q4ir.com/events-and-presentations.
Forward-Looking Statements
This communication contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements about CNB and ESSA and their industry involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding CNB’s or ESSA’s future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, and the impact of any laws or regulations applicable to CNB or ESSA, are forward-looking statements. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “may,” “will,” “should” and other similar expressions are intended to identify these forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results.
Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to the following: (i) CNB’s and ESSA’s ability to complete the proposed transaction on the proposed terms or on the anticipated timeline, or at all, including the risk that governmental approvals of the merger may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger and risks and uncertainties related to securing the necessary shareholder approvals and satisfaction of other closing conditions to consummate the proposed transaction; (ii) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement relating to the proposed transaction; (iii) risks related to diverting the attention of ESSA and CNB management from ongoing business operations; (iv) failure to realize the expected benefits of the proposed transaction; (v) significant transaction costs and/or unknown or inestimable liabilities; (vi) the risk of shareholder litigation in connection with the proposed transaction, including resulting expense or delay; (vii) the risk that ESSA’s business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; (viii) risks related to future opportunities and plans for the combined company, including the uncertainty of expected future financial performance and results of the combined company following completion of the proposed transaction; (ix) the effect of the announcement of the proposed transaction on the ability of ESSA and CNB to operate their respective businesses and retain and hire key personnel and to maintain favorable business relationships; (x) risks related to the market value of the CNB common stock to be issued in the proposed transaction; (xi) other risks related to the completion of the proposed transaction and actions related thereto; (xii) the dilution caused by CNB’s issuance of additional shares of its capital stock in connection with the proposed transaction; (xiii) national, international, regional and local economic and political climates and conditions; (xiv) changes in general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; and (xv) legislative and regulatory changes. Further information about these and other relevant risks and uncertainties may be found in CNB’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, in ESSA’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 and in subsequent filings CNB and ESSA make with the Securities and Exchange Commission (“SEC”).
Forward-looking statements speak only as of the date they are made. CNB and ESSA do not undertake, and specifically disclaim any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. You are cautioned not to place undue reliance on these forward-looking statements.
Additional Information and Where to Find It
In connection with the proposed transaction, CNB expects to file with the SEC a registration statement on Form S-4 that will include a document that serves as a prospectus of CNB and a joint proxy statement of CNB and ESSA (the “joint proxy statement/prospectus”), which joint proxy statement/prospectus will be mailed or otherwise disseminated to CNB’s and ESSA’s shareholders when it becomes available. CNB and ESSA also plan to file other relevant documents with the SEC regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS TO BE INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4, AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CNB, ESSA AND THE PROPOSED TRANSACTION. You may obtain a free copy of the registration statement, including the proxy statement/prospectus (when it becomes available) and other relevant documents filed by CNB and ESSA with the SEC, without charge, at the SEC’s website at www.sec.gov. Copies of the documents filed by CNB with the SEC will be available free of charge on CNB’s website at www.cnbbank.bank or by directing a request to CNB Financial Corporation, 1 South Second Street, PO Box 42, Clearfield, PA, attention: Treasurer, telephone (814) 765-9621. Copies of the documents filed by ESSA with the SEC will be available free of charge on ESSA’s website at www.essabank.com or by directing a request to ESSA Bancorp, Inc., 200 Palmer Street, Stroudsburg, PA 18360, attention: Stephanie Lefferson, telephone (570) 422-0182.
No Offer
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
Participants in the Solicitation
CNB and ESSA and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. You can find information about CNB’s executive officers and directors in CNB’s definitive proxy statement filed with the SEC on March 8, 2024. You can find information about ESSA’s executive officers and directors in ESSA’s definitive proxy statement filed with the SEC on January 25, 2024. Additional information regarding the interests of such potential participants will be included in the joint proxy statement/prospectus and other relevant documents filed with the SEC when they become available. You may obtain free copies of these documents from CNB or ESSA using the sources indicated above.
CNB Investor Contact
Tito L. Lima
Senior EVP, CFO, and Treasurer
(814) 765-9621
ESSA Investor Contact
Stephanie Lefferson
Corporate Secretary & Investor and Community Relations
(570) 422-0182
Source: CNB Financial Corporation; ESSA Bancorp, Inc.
FAQ
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