Independent Auditors' Review Report
Board of Directors
CNB Bank Shares, Inc.
Carlinville, Illinois
Results of Review of Interim Financial Information
We have reviewed the accompanying interim condensed consolidated financial statements of CNB Bank Shares, Inc. and subsidiary, which comprise the interim condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021, and the related interim condensed consolidated statements of income for the three and six months ended June 30, 2022 and 2021, and the interim condensed consolidated statements of comprehensive income, stockholders' equity, and cash flows for the three and six months ended June 30, 2022 and 2021, and the related notes to the interim condensed consolidated financial statements.
Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed interim financial information for it to be in accordance with generally accepted accounting principles in the United States of America for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Basis for Review Results
We conducted our reviews in accordance with auditing standards generally accepted in the United States of America (GAAS) applicable to reviews of interim financial information. A review of condensed interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. A review of condensed interim financial information is substantially less in scope that an audit conducted in accordance with GAAS, the objective of which is the expression of an opinion regarding the financial statements as a whole, and accordingly, we do not express such an opinion. We are required to be independent of CNB Bank Shares, Inc. and to meet our ethical responsibilities in accordance with the relevant ethical requirements relating to our review. We believe that the results of the review procedures provide a reasonable basis for our conclusion.
Responsibilities for Management for the Interim Financial Information
Management is responsible for the preparation and fair presentation of the interim condensed consolidated financial information in accordance with generally accepted accounting principles in the United States of America for interim financial information and the instructions to Form 10- Q and Rule 10-01 of Regulation S-X and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of interim financial information that is free from material misstatement, whether due to fraud or error.
Report on Interim Condensed Balance Sheet
We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of CNB Bank Shares, Inc. and subsidiary as of December 31, 2021, and the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows for the year then ended (not presented herein); and we expressed our unmodified audit opinion on those audited consolidated financial statements in our report dated February 25, 2022. In our opinion, the accompanying interim condensed consolidated balance sheet of CNB Bank Shares, Inc. and subsidiary as of December 31, 2021 is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived.
July 29, 2022
CNB BANK SHARES, INC. AND SUBSIDIARY
Interim Condensed Consolidated Balance Sheets
June 30, 2022 and December 31, 2021
ASSETS | June 30, | December 31, | ||||||||
2022 | 2021 | |||||||||
Cash and due from banks | $ | 25,357,249 | 27,221,301 | |||||||
Interest-earning deposits in other financial institutions | 31,207,582 | 79,360,329 | ||||||||
Cash and cash equivalents | 56,564,831 | 106,581,630 | ||||||||
Investments in available-for-sale debt securities, | ||||||||||
at fair value | 460,649,348 | 502,225,565 | ||||||||
Mortgage loans held for sale | 402,388 | 284,993 | ||||||||
Loans | 929,943,128 | 908,652,367 | ||||||||
Less deferred loan fees, net of related costs | (1,340,521) | (1,509,878) | ||||||||
Less reserve for possible loan losses | (12,193,385) | (11,448,685) | ||||||||
Net loans | 916,409,222 | 895,693,804 | ||||||||
Bank premises and equipment, net | 18,439,173 | 18,811,266 | ||||||||
Accrued interest receivable | 8,300,977 | 8,785,085 | ||||||||
Bank-owned life insurance | 13,012,177 | 12,907,510 | ||||||||
Identifiable intangible assets, net | 4,125,508 | 4,599,414 | ||||||||
Goodwill | 21,415,712 | 21,415,712 | ||||||||
Deferred tax asset, net | 15,168,651 | 1,963,089 | ||||||||
Other assets | $ | 11,112,170 | 10,762,656 | |||||||
1,525,600,157 | 1,584,030,724 | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Noninterest-bearing deposits | $ | 320,402,602 | 319,142,332 | |||||||
Interest-bearing deposits | 1,037,175,155 | 1,038,316,082 | ||||||||
Total deposits | 1,357,577,757 | 1,357,458,414 | ||||||||
Short-term borrowings | 24,895,135 | 34,235,199 | ||||||||
Accrued interest payable | 298,000 | 344,607 | ||||||||
Federal Home Loan Bank borrowings | 9,250,000 | 14,250,000 | ||||||||
Notes payable | 3,752,397 | 4,394,437 | ||||||||
Other liabilities | 16,940,468 | 16,353,517 | ||||||||
Total liabilities | 1,412,713,757 | 1,427,036,174 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity: | ||||||||||
Preferred stock and related surplus, $0.01 par value; 200,000 | ||||||||||
shares authorized, 9,745 shares issued and outstanding | 19,352,310 | 19,352,310 | ||||||||
Common stock, $0.05 par value; 20,000,000 shares authorized; | ||||||||||
5,779,659 shares issued; 5,398,882 and 5,377,912 shares | 288,983 | 288,983 | ||||||||
outstanding at June 30, 2022 and December 31, 2021, respectively | ||||||||||
Surplus | 18,464,728 | 18,896,783 | ||||||||
Retained earnings | 128,155,573 | 122,065,157 | ||||||||
Accumulated other comprehensive income (loss) | (45,622,282) | 4,056,416 | ||||||||
Treasury stock at cost - 380,777 and 401,747 shares | ||||||||||
at June 30, 2022 and December 31, 2021, respectively | (7,752,912) | (7,665,099) | ||||||||
Total stockholders' equity | 112,886,400 | 156,994,550 | ||||||||
$ | 1,525,600,157 | 1,584,030,724 | ||||||||
Book value per common share | $ | 17.32 | 25.59 | |||||||
See accompanying notes to the interim condensed consolidated financial statements and accountants' review report.
CNB BANK SHARES, INC. AND SUBSIDIARY
Interim Condensed Consolidated Statements of Income
Three and Six Months Ended June 30, 2022 and 2021
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||
Interest income: | ||||||||||||||
Interest and fees on loans | $ 10,595,703 | 10,452,380 | 20,634,231 | 20,834,705 | ||||||||||
Interest on debt securities: | ||||||||||||||
Taxable | 1,353,722 | 789,467 | 2,474,787 | 1,659,247 | ||||||||||
Exempt from federal income taxes | 1,218,149 | 1,038,227 | 2,382,015 | 1,992,542 | ||||||||||
Interest on short-term investments | 103,672 | 29,624 | 146,343 | 57,931 | ||||||||||
Total interest income | 13,271,246 | 12,309,698 | 25,637,376 | 24,544,425 | ||||||||||
Interest expense: | ||||||||||||||
Interest on deposits | 724,063 | 1,032,496 | 1,456,916 | 2,284,030 | ||||||||||
Interest on short-term borrowings | 13,574 | 14,919 | 27,043 | 40,752 | ||||||||||
Interest on Federal Home Loan Bank borrowings | 46,340 | 99,929 | 92,172 | 198,761 | ||||||||||
Interest on notes payable | 37,919 | 61,198 | 78,368 | 113,561 | ||||||||||
Total interest expense | 821,896 | 1,208,542 | 1,654,499 | 2,637,104 | ||||||||||
Net interest income | 12,449,350 | 11,101,156 | 23,982,877 | 21,907,321 | ||||||||||
Provision for possible loan losses | 701,674 | 1,624,753 | 701,674 | 2,107,405 | ||||||||||
Net interest income after | ||||||||||||||
provision for possible loan losses | 11,747,676 | 9,476,403 | 23,281,203 | 19,799,916 | ||||||||||
Noninterest income: | ||||||||||||||
Service charges on deposit accounts | 590,749 | 378,574 | 1,112,592 | 742,306 | ||||||||||
Card-based revenue | 477,035 | 610,306 | 941,217 | 1,109,662 | ||||||||||
Income from fiduciary activities | 603,760 | 580,859 | 1,156,626 | 1,036,047 | ||||||||||
Mortgage banking revenue | 447,374 | 842,136 | 1,001,341 | 1,898,576 | ||||||||||
Increase in cash surrender value of life insurance policies | 52,041 | 52,610 | 104,667 | 105,312 | ||||||||||
Brokerage commissions | 468,084 | 476,324 | 966,015 | 1,001,636 | ||||||||||
Other noninterest income | 223,148 | 396,384 | 374,800 | 673,024 | ||||||||||
Total noninterest income | 2,862,191 | 3,337,193 | 5,657,258 | 6,566,563 | ||||||||||
Noninterest expense: | ||||||||||||||
Salaries and employee benefits | 5,530,810 | 5,578,504 | 11,353,253 | 11,137,700 | ||||||||||
Occupancy and equipment expense | 1,488,021 | 1,465,715 | 3,008,363 | 2,952,738 | ||||||||||
Legal and professional fees | 277,585 | 264,804 | 588,248 | 416,500 | ||||||||||
Postage, printing, and supplies | 192,723 | 185,788 | 357,997 | 351,239 | ||||||||||
Amortization of intangible assets | 326,484 | 342,970 | 662,035 | 675,089 | ||||||||||
Advertising expense | 233,677 | 198,498 | 415,013 | 363,631 | ||||||||||
FDIC insurance assessments | 161,741 | 145,524 | 339,112 | 291,749 | ||||||||||
Other noninterest expense | 1,138,828 | 1,074,774 | 2,361,831 | 2,053,009 | ||||||||||
Total noninterest expense | 9,349,869 | 9,256,577 | 19,085,852 | 18,241,655 | ||||||||||
Income before applicable income taxes | 5,259,998 | 3,557,019 | 9,852,609 | 8,124,824 | ||||||||||
Applicable income taxes | 1,141,528 | 588,102 | 2,105,575 | 1,446,250 | ||||||||||
Net income | $ 4,118,470 | 2,968,917 | 7,747,034 | 6,678,574 |
See accompanying notes to the interim condensed consolidated financial statements and accountants' review report.
CNB BANK SHARES, INC. AND SUBSIDIARY
Interim Condensed Consolidated Statements of Comprehensive Income (Loss)
Six Months Ended June 30, 2022 and 2021
2022 | 2021 | ||||
Net income | $ | 7,747,034 | 6,678,574 | ||
Other comprehensive loss, before tax: | |||||
Market value adjustment for cash flow hedge | 132,538 | 59,391 | |||
Net unrealized losses on available-for-sale debt securities | (63,016,799) | (4,046,496) | |||
Other comprehensive loss, before tax | (62,884,261) | (3,987,105) | |||
Income tax related to items of other comprehensive loss | (13,205,563) | (837,292) | |||
Total other comprehensive loss | (49,678,698) | (3,149,813) | |||
Total comprehensive income (loss) | $ | (41,931,664) | 3,528,761 | ||
See accompanying notes to the interim condensed consolidated financial statements and accountants' review report.
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CNB Bank published this content on 29 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2022 20:11:12 UTC.