Terms

Series

7.125% Series A Fixed-Rate Non-Cumulative Perpetual Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

7.125%

Rate Type

Fixed

Annual Dividend

$1.78

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

September 1, 2025

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness And Other Liabilities, Any Future Preferred Stock Expressly Ranking Senior To The Preferred Stock (With Required Holder Consent); Pari Passu With: Any Future Preferred Stock Expressly Ranking On Parity With The Preferred Stock; Senior To: Common Stock, Any Future Preferred Stock Not Expressly Ranking On Parity Or Senior

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.025

Shares Offered

2,100,000

Prospectus Summary

CNB Financial Corporation, a Pennsylvania bank holding company, is offering 2,100,000 depositary shares (ticker: CCNEP on NASDAQ), each representing a 1/40th interest in a share of its 7.125% Series A Fixed-Rate Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $1,000 per underlying share ($25 per depositary share). The fixed coupon of 7.125% per annum yields approximately $1.78 per depositary share annually, paid quarterly in arrears on March 1, June 1, September 1, and December 1, commencing December 1, 2020. Critically, dividends are non-cumulative: if the board does not declare a dividend for any quarter, that payment is permanently lost and holders have no claim to recover it in future periods. As a holding company obligation, these depositary shares are structurally subordinated to all liabilities of CNB Bank (the operating subsidiary), including deposits and other creditor claims — holders look only to CNB Financial's assets, not the bank's directly. Within the holding company capital stack, the Series A Preferred ranks senior to common stock and any future junior preferred, pari passu with any future parity preferred, and junior to all existing and future indebtedness (approximately $4.14 billion in total liabilities as of June 30, 2020). The issuer may redeem the entire series (but not in part) within 90 days of a 'regulatory capital treatment event' — meaning if regulators determine the Preferred Stock no longer qualifies as Additional Tier 1 capital — at $25 per depositary share, effectively exposing holders to involuntary call risk if regulatory capital rules change. At the $25 offering price, the effective yield is exactly 7.125%. Dividends are paid quarterly with a record date set as of the close of business on the 15th of the month preceding each payment date. For corporate holders, distributions may qualify for the dividends-received deduction (DRD) to the extent CNB Financial has sufficient current or accumulated earnings and profits; for individual holders, dividends are expected to qualify as qualified dividend income (QDI) taxed at preferential 15%/20% rates, though this is not guaranteed in future years. The dividend stopper provision prevents CNB Financial from paying dividends on common stock or redeeming junior/parity securities if it has not paid full dividends on the Series A Preferred for the most recently completed quarter — providing a measure of protection but not guaranteeing payment.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If CNB Financial has not paid full dividends on the Series A Preferred Stock for the most recently completed dividend period, it cannot declare or pay dividends on its common stock or other junior securities, and cannot repurchase or redeem junior or parity securities, subject to certain exceptions.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 72 (Strong)