CNB Financial stock receives regulatory approvals for ESSA merger

Investing.com - CNB Financial Corp (NASDAQ:CCNE) has received all necessary regulatory approvals to complete its proposed merger with ESSA, according to Keefe, Bruyette & Woods, which reiterated its Market Perform rating and $25.00 price target on the stock.

The Federal Deposit Insurance Corporation and Pennsylvania Department of Banking & Securities have granted approvals for the transaction, while the Federal Reserve Bank of Philadelphia provided a waiver for any application regarding the merger. The deal is expected to close on July 23, 2025, aligning with previous expectations for completion in the third quarter.

CNB Financial has a history of successfully expanding into new markets through acquisitions, with ESSA offering a strong deposit base in Eastern Pennsylvania markets that should provide growth opportunities. Management plans to invest in experienced commercial banking personnel to transform ESSA into a commercially focused institution.

The merger is projected to deliver approximately 35% earnings per share accretion in 2026. CNB Financial shares currently trade at 1.0 times pro forma third-quarter 2025 tangible book value, representing over a 30% discount to the bank’s historical tangible book value multiple of approximately 1.50 times.

Keefe, Bruyette & Woods views the strategic considerations of the deal as positive, though notes the transformation of ESSA’s asset and customer mix will likely take time but should result in improved deal accretion as changes are implemented.

In other recent news, CNB Financial Corporation and ESSA Bancorp (NASDAQ:ESSA) Inc. have received all necessary regulatory approvals to proceed with their proposed merger. The Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking and Securities have approved the merger, and CNB received a waiver from the Federal Reserve Bank of Philadelphia. The all-stock transaction, initially announced in January 2025, is expected to close in July 2025, pending customary conditions. This merger will combine CNB’s $6.3 billion in assets with ESSA’s $2.2 billion, expanding their operational footprint.

Additionally, Keefe, Bruyette & Woods has maintained a Market Perform rating for CNB Financial, with a price target of $27. The firm’s analysis noted that CNB’s first-quarter earnings per share exceeded their estimates but fell short of broader market expectations. Despite this, CNB’s credit performance was solid, and the company saw a modest increase in capital levels. Institutional Shareholder Services Inc. has also endorsed CNB Financial’s proposals ahead of the upcoming Annual Meeting of Shareholders, including the issuance of common stock for the merger with ESSA. Shareholders are encouraged to review the joint proxy statement and cast their votes accordingly.

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