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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022
or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission File Number 001-39472
CNB FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Pennsylvania |  | 25-1450605
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

1 South Second Street
P.O. Box 42
Clearfield, Pennsylvania 16830
(Address of principal executive offices)
Registrant’s telephone number, including area code, (814) 765-9621

Securities registered pursuant to Section 12(b) of the Act:
Title of Class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Common Stock, no par value |  | CCNE |  | The NASDAQ Stock Market LLC
Depositary Shares (each representing a 1/40th interest in a share of 7.125% Series A Non-Cumulative, perpetual preferred stock) |  | CCNEP |  | The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer |  | ☐ |  | Accelerated Filer |  | ☒
Non-accelerated filer |  | ☐ |  | Smaller reporting company |  | ☐
|  |  |  | Emerging growth company |  | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
The number of shares outstanding of the issuer’s common stock as of May 3, 2022:
COMMON STOCK, NO PAR VALUE PER SHARE: 16,859,608 SHARES

Table of Contents
INDEX
PART I.
FINANCIAL INFORMATION

| Page Number
ITEM 1 – Financial Statements |
C ondensed C onsolidated Balance Sheets March 3 1, 202 2 (unaudited) and December 31, 202 1 (audited) | 1
C ondensed C onsolidated Statements of Income – Three months ended March 3 1, 202 2 and 202 1 (unaudited) | 2
C ondensed C onsolidated Statements of Comprehensive Income – Three months ended March 3 1, 202 2 and 202 1 (unaudited) | 3
C ondensed C onsolidated Statements of Changes in Shareholders' Equity - Three months ended March 31, 2022 and 2021 (unaudited) | 4
C ondensed C onsolidated Statements of Cash Flows – Three months ended March 3 1, 202 2 and 202 1 (unaudited) | 5
Notes to Condensed Consolidated Financial Statements | 7
ITEM 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations | 40
ITEM 3 – Quantitative and Qualitative Disclosures about Market Risk | 59
ITEM 4 – Controls and Procedures | 60
PART II. OTHER INFORMATION
ITEM 1 – Legal Proceedings | 61
ITEM 1A – Risk Factors | 61
ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds | 61
ITEM 3 – Defaults Upon Senior Securities | 61
ITEM 4 – Mine Safety Disclosures | 61
ITEM 5 – Other Information | 61
ITEM 6 – Exhibits | 62
Signatures | 63

Table of Contents
Forward-Looking Statements and Factors that Could Affect Future Results
The information below includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, liquidity, results of operations, future performance and business of CNB Financial Corporation (“CNB”). These forward-looking statements are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that are not historical facts. Forward-looking statements include statements with respect to beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors (some of which are beyond CNB’s control). Forward-looking statements often include the words "believes," "expects," "anticipates," "estimates," "forecasts," "intends," "plans," "targets," "potentially," "probably," "projects," "outlook" or similar expressions or future conditional verbs such as "may," "will," "should," "would" and "could." CNB’s actual results may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance.
Currently, one of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the potential adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on the financial condition, results of operations, cash flows and performance of CNB, our customers and the global economy and financial markets. The COVID-19 pandemic has impacted us and our customers significantly, and the extent that it continues to impact us and our customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic and its impact on our customers and demand for financial services, the actions governments, businesses and individuals take in response to the pandemic, the direct and indirect economic effects of the pandemic and containment measures, treatment developments, public adoption rates of COVID-19 vaccines, including booster shots, and their effectiveness against emerging variants of COVID-19, such as the Delta and Omicron variants, and the pace of recovery when the COVID-19 pandemic subsides, among others. Moreover, investors are cautioned to interpret many of the risks identified under Part I, "Item 1A. Risk Factors" in CNB's Annual Report on Form 10-K for the year ended December 31, 2021 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic.
Additional factors that could cause the actual results to differ materially from the statements, include, but are not limited to, (i) changes in general business, industry or economic conditions or competition; (ii) changes in any applicable law, rule, regulation, policy, guideline or practice governing or affecting financial holding companies and their subsidiaries or with respect to tax or accounting principles or otherwise; (iii) adverse changes or conditions in capital and financial markets; (iv) changes in interest rates; (v) higher than expected costs or other difficulties related to integration of combined or merged businesses; (vi) the effects of business combinations and other acquisition transactions, including the inability to realize our loan and investment portfolios; (vii) changes in the quality or composition of our loan and investment portfolios; (viii) adequacy of loan loss reserves; (ix) increased competition; (x) loss of certain key officers; (xi) deposit attrition; (xii) rapidly changing technology; (xiii) unanticipated regulatory or judicial proceedings and liabilities and other costs; (xiv) changes in the cost of funds, demand for loan products or demand for financial services; and (xv) other economic, competitive, governmental or technological factors affecting our operations, markets, products, services and prices. Such developments could have an adverse impact on CNB's financial position and results of operations.
The forward-looking statements contained herein are based upon management’s beliefs and assumptions. Any forward-looking statement made herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. CNB undertakes no obligation to publicly update or revise any forward-looking statements included in this Quarterly Report on Form 10-Q, whether as a result of new information, future events or otherwise, except to the extent required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed might not occur and you should not put undue reliance on any forward-looking statements.

Table of Contents
Part I Financial Information
Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
Dollars in thousands, except share data

| (unaudited) |  |
| March 31, 2022 |  | December 31, 2021
ASSETS
Cash and due from banks | $ | 47,137 |  |  | $ | 42,440 |
Interest bearing deposits with other banks | 357,837 |  |  | 689,758 |
Total cash and cash equivalents | 404,974 |  |  | 732,198 |
Debt securities available-for-sale, at fair value (amortized cost of $575,248 and $698,085 as of March 31, 2022 and December 31, 2021, respectively) | 539,562 |  |  | 697,191 |
Debt securities held-to-maturity, at amortized cost (fair value $295,688 as of March 31, 2022 and $0 as of December 31, 2021) | 307,597 |  |  | 0 |
Equity securities | 10,092 |  |  | 10,366 |
Loans held for sale | 1,563 |  |  | 849 |
Loans |  |  |
PPP, net of deferred processing fees | 18,416 |  |  | 45,203 |
Syndicated | 147,085 |  |  | 125,761 |
All other | 3,590,862 |  |  | 3,463,828 |
Total Loans | 3,756,363 |  |  | 3,634,792 |
Less: allowance for credit losses | (38,117) |  |  | (37,588) |
Net loans | 3,718,246 |  |  | 3,597,204 |
FHLB, other equity interests | 23,891 |  |  | 23,276 |
Premises and equipment, net | 62,223 |  |  | 61,659 |
Operating lease right-of-use assets | 25,698 |  |  | 19,928 |
Bank owned life insurance | 100,413 |  |  | 99,719 |
Mortgage servicing rights | 1,872 |  |  | 1,664 |
Goodwill | 43,749 |  |  | 43,749 |
Core deposit intangible, net | 435 |  |  | 460 |
Accrued interest receivable and other assets | 43,685 |  |  | 40,676 |
Total Assets | $ | 5,284,000 |  |  | $ | 5,328,939 |
LIABILITIES AND SHAREHOLDERS’ EQUITY
Non-interest bearing demand deposits | $ | 817,611 |  |  | $ | 792,086 |
Interest bearing demand deposits | 1,060,951 |  |  | 1,079,336 |
Savings | 2,474,362 |  |  | 2,457,745 |
Certificates of deposit | 337,939 |  |  | 386,452 |
Total deposits | 4,690,863 |  |  | 4,715,619 |
Subordinated debentures | 20,620 |  |  | 20,620 |
Subordinated notes, net of unamortized issuance costs | 83,736 |  |  | 83,661 |
Operating lease liabilities | 26,955 |  |  | 21,159 |
Accrued interest payable and other liabilities | 35,891 |  |  | 45,033 |
Total liabilities | 4,858,065 |  |  | 4,886,092 |
Commitments and contingent liabilities |  |  |
Preferred stock, Series A non-cumulative perpetual, $0 par value; $1,000 liquidation preference; shares authorized 60,375; Shares issued 60,375 at March 31, 2022 and December 31, 2021 | 57,785 |  |  | 57,785 |
Common stock, no par value; 50,000,000 shares authorized; Shares issued 16,978,057 at March 31, 2022 and 16,978,057 at December 31, 2021 | 0 |  |  | 0 |
Additional paid in capital | 126,703 |  |  | 127,351 |
Retained earnings | 271,792 |  |  | 260,582 |
Treasury stock, at cost (117,539 shares at March 31, 2022 and 122,995 shares December 31, 2021) | (2,998) |  |  | (2,477) |
Accumulated other comprehensive loss | (27,347) |  |  | (394) |
Total shareholders’ equity | 425,935 |  |  | 442,847 |
Total Liabilities and Shareholders’ Equity | $ | 5,284,000 |  |  | $ | 5,328,939 |

See Notes to Condensed Consolidated Financial Statements
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Table of Contents
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Dollars in thousands, except per share data

| Three Months Ended March 31, |  |
| 2022 |  | 2021 |  |  |  |
INTEREST AND DIVIDEND INCOME: |  |  |  |  |  |  |
Loans including fees |  |  |  |  |  |  |
Interest and fees on loans | $ | 41,150 |  |  | $ | 38,408 |  |  |  |  |
Processing fees on PPP loans | 1,237 |  |  | 2,731 |  |  |  |  |
Securities: |  |  |  |  |  |  |
Taxable | 3,614 |  |  | 2,661 |  |  |  |  |
Tax-exempt | 219 |  |  | 351 |  |  |  |  |
Dividends | 34 |  |  | 144 |  |  |  |  |
Total interest and dividend income | 46,254 |  |  | 44,295 |  |  |  |  |
INTEREST EXPENSE: |  |  |  |  |  |  |
Deposits | 2,706 |  |  | 4,280 |  |  |  |  |
Finance lease liabilities | 5 |  |  | 6 |  |  |  |  |
Subordinated notes and debentures (includes $67 and $69 accumulated other comprehensive income reclassification for change in fair value of interest rate swap agreements, respectively) | 926 |  |  | 888 |  |  |  |  |
Total interest expense | 3,637 |  |  | 5,174 |  |  |  |  |
NET INTEREST INCOME | 42,617 |  |  | 39,121 |  |  |  |  |
PROVISION FOR CREDIT LOSS EXPENSE | 1,643 |  |  | 2,122 |  |  |  |  |
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSS EXPENSE | 40,974 |  |  | 36,999 |  |  |  |  |
NON-INTEREST INCOME: |  |  |  |  |  |  |
Service charges on deposit accounts | 1,757 |  |  | 1,348 |  |  |  |  |
Other service charges and fees | 655 |  |  | 490 |  |  |  |  |
Wealth and asset management fees | 1,783 |  |  | 1,522 |  |  |  |  |
Net realized gains on available-for-sale securities (includes $651 and $0 accumulated other comprehensive income reclassifications for net realized gains on available-for-sale securities, respectively) | 651 |  |  | 0 |  |  |  |  |
Net realized and unrealized gains (losses) on equity securities | (394) |  |  | 120 |  |  |  |  |
Mortgage banking | 475 |  |  | 1,235 |  |  |  |  |
Bank owned life insurance | 694 |  |  | 940 |  |  |  |  |
Card processing and interchange income | 1,809 |  |  | 1,834 |  |  |  |  |
Other | 2,224 |  |  | 750 |  |  |  |  |
Total non-interest income | 9,654 |  |  | 8,239 |  |  |  |  |
NON-INTEREST EXPENSES: |  |  |  |  |  |  |
Compensation and benefits | 16,988 |  |  | 14,573 |  |  |  |  |
Net occupancy expense | 3,230 |  |  | 3,269 |  |  |  |  |
Amortization of core deposit intangible | 25 |  |  | 28 |  |  |  |  |
Technology expense | 3,372 |  |  | 2,670 |  |  |  |  |
State and local taxes | 1,048 |  |  | 1,017 |  |  |  |  |
Legal, professional, and examination fees | 837 |  |  | 1,153 |  |  |  |  |
Advertising | 620 |  |  | 281 |  |  |  |  |
FDIC insurance premiums | 723 |  |  | 616 |  |  |  |  |
Dues and subscriptions | 600 |  |  | 453 |  |  |  |  |
Card processing and interchange expenses | 1,029 |  |  | 680 |  |  |  |  |
Other | 3,420 |  |  | 3,064 |  |  |  |  |
Total non-interest expenses | 31,892 |  |  | 27,804 |  |  |  |  |
INCOME BEFORE INCOME TAXES | 18,736 |  |  | 17,434 |  |  |  |  |
INCOME TAX EXPENSE (includes $124 and $(14) income tax expense from reclassification items, respectively) | 3,491 |  |  | 3,253 |  |  |  |  |
NET INCOME | 15,245 |  |  | 14,181 |  |  |  |  |
PREFERRED STOCK DIVIDENDS | 1,075 |  |  | 1,075 |  |  |  |  |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ | 14,170 |  |  | $ | 13,106 |  |  |  |  |
EARNINGS PER COMMON SHARE: |  |  |  |  |  |  |
Basic | $ | 0.84 |  |  | $ | 0.78 |  |  |  |  |
Diluted | $ | 0.84 |  |  | $ | 0.78 |  |  |  |  |
DIVIDENDS PER COMMON SHARE: |  |  |  |  |  |  |
Cash dividends per share | $ | 0.175 |  |  | $ | 0.170 |  |  |  |  |

See Notes to Condensed Consolidated Financial Statements
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)
Dollars in thousands

| Three months ended March 31, |  |
| 2022 |  | 2021 |  |  |  |
NET INCOME | $ | 15,245 |  |  | $ | 14,181 |  |  |  |  |
Other comprehensive loss, net of tax: |  |  |  |  |  |  |
Net change in fair value of derivative instruments:: |  |  |  |  |  |  |
Unrealized gain on interest rate swaps, net of tax $(42) and $(8), respectively | 158 |  |  | 29 |  |  |  |  |
Reclassification adjustment for losses recognized in earnings, net of tax $(13) and $(14), respectively | 54 |  |  | 55 |  |  |  |  |
| 212 |  |  | 84 |  |  |  |  |
Net change in debt securities: |  |  |  |  |  |  |
Unrealized holding losses on available-for-sale securities arising during the period, net of tax of $7,070 and $2,451, respectively | (26,600) |  |  | (9,214) |  |  |  |  |
Amortization of unrealized gains from held-to-maturity securities, net of tax of $14 and $0, respectively | (51) |  |  | 0 |  |  |  |  |
Reclassification adjustment for realized gains included in net income, net of tax of $137 and $0, respectively | (514) |  |  | 0 |  |  |  |  |
| (27,165) |  |  | (9,214) |  |  |  |  |
Other comprehensive loss | (26,953) |  |  | (9,130) |  |  |  |  |
COMPREHENSIVE INCOME (LOSS) | $ | (11,708) |  |  | $ | 5,051 |  |  |  |  |

See Notes to Condensed Consolidated Financial Statements
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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)
Dollars in thousands, except share and per share data

| Preferred Stock |  | Additional Paid-In Capital |  | Retained Earnings |  | Treasury Stock |  | Accumulated Other Comprehensive Income (Loss) |  | Total Share- holders’ Equity
Balance, January 1, 2022 | $ | 57,785 |  |  | $ | 127,351 |  |  | $ | 260,582 |  |  | $ | (2,477) |  |  | $ | (394) |  |  | $ | 442,847 |
Net income |  |  |  |  | 15,245 |  |  |  |  |  |  | 15,245 |
Other comprehensive loss |  |  |  |  |  |  |  |  | (26,953) |  |  | (26,953) |
Restricted stock award grants (56,159 shares) |  |  | (976) |  |  |  |  | 976 |  |  |  |  | 0 |
Performance based restricted stock award grants (11,895 shares) |  |  | (173) |  |  |  |  | 173 |  |  |  |  | 0 |
Stock-based compensation expense |  |  | 501 |  |  |  |  |  |  |  |  | 501 |
Purchase of treasury stock (50,166 shares) |  |  |  |  |  |  | (1,342) |  |  |  |  | (1,342) |
Purchase of treasury stock for the purpose of tax withholding related to restricted stock award vesting (7,546 shares) |  |  |  |  |  |  | (202) |  |  |  |  | (202) |
Purchase of treasury stock for the purpose of tax withholding related to performance based restricted stock award vesting (4,706 shares) |  |  |  |  |  |  | (126) |  |  |  |  | (126) |
Preferred cash dividend declared |  |  |  |  | (1,075) |  |  |  |  |  |  | (1,075) |
Cash dividends declared ($0.175 per common share) |  |  |  |  | (2,960) |  |  |  |  |  |  | (2,960) |
Balance, March 31, 2022 | $ | 57,785 |  |  | $ | 126,703 |  |  | $ | 271,792 |  |  | $ | (2,998) |  |  | $ | (27,347) |  |  | $ | 425,935 |
Balance, January 1, 2021 | $ | 57,785 |  |  | $ | 127,518 |  |  | $ | 218,727 |  |  | $ | (2,967) |  |  | $ | 15,074 |  |  | $ | 416,137 |
Net income |  |  |  |  | 14,181 |  |  |  |  |  |  | 14,181 |
Other comprehensive loss |  |  |  |  |  |  |  |  | (9,130) |  |  | (9,130) |
Forfeiture of restricted stock award grants (1,578 shares) |  |  | 35 |  |  |  |  | (35) |  |  |  |  | 0 |
Restricted stock award grants (50,106 shares) |  |  | (1,228) |  |  |  |  | 1,228 |  |  |  |  | 0 |
Performance based restricted stock award grants (10,587 shares) |  |  | (262) |  |  |  |  | 262 |  |  |  |  | 0 |
Stock-based compensation expense |  |  | 509 |  |  |  |  |  |  |  |  | 509 |
Purchase of treasury stock for the purpose of tax withholding related to restricted stock award vesting (6,598 shares) |  |  |  |  |  |  | (139) |  |  |  |  | (139) |
Purchase of treasury stock for the purpose of tax withholding related to performance based restricted stock award vesting (941 shares) |  |  |  |  |  |  | (20) |  |  |  |  | (20) |
Preferred cash dividend declared |  |  |  |  | (1,075) |  |  |  |  |  |  | (1,075) |
Cash dividends declared ($0.170 per common share) |  |  |  |  | (2,860) |  |  |  |  |  |  | (2,860) |
Balance, March 31, 2021 | $ | 57,785 |  |  | $ | 126,572 |  |  | $ | 228,973 |  |  | $ | (1,671) |  |  | $ | 5,944 |  |  | $ | 417,603 |

See Notes to Condensed Consolidated Financial Statements
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Dollars in thousands

| Three months ended March 31,
| 2022 |  | 2021
CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
Net income | $ | 15,245 |  |  | $ | 14,181 |
Adjustments to reconcile net income to net cash provided by operations: |  |  |
Provision for credit loss expense | 1,643 |  |  | 2,122 |
Depreciation and amortization of premises and equipment, operating leases assets, core deposit intangible, and mortgage servicing rights | 1,758 |  |  | 1,721 |
Accretion of securities, deferred loan fees and costs, net yield and credit mark on acquired loans, and unearned income | (985) |  |  | (963) |
Net amortization of deferred costs on borrowings | 75 |  |  | 0 |
Accretion of deferred PPP processing fees | (1,237) |  |  | (2,731) |
Net realized gains on sales of available-for-sale securities | (651) |  |  | 0 |
Net realized and unrealized (gains) losses on equity securities | 394 |  |  | (120) |
Gain on sale of loans | (724) |  |  | (1,144) |
Net losses (gains) on dispositions of premises and equipment and foreclosed assets | 0 |  |  | 42 |
Proceeds from sale of loans | 9,731 |  |  | 22,807 |
Origination of loans held for sale | (15,645) |  |  | (18,612) |
Income on bank owned life insurance | (694) |  |  | (486) |
Gain on bank owned life insurance (death benefit proceeds in excess of cash surrender value) | 0 |  |  | (454) |
Restricted stock compensation expense | 501 |  |  | 509 |
Changes in: |  |  |
Accrued interest receivable and other assets | (3,102) |  |  | (2,190) |
Accrued interest payable, lease liabilities, and other liabilities | (2,521) |  |  | (3,572) |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 3,788 |  |  | 11,110 |
CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
Proceeds from maturities, prepayments and calls of available-for-sale securities | 30,475 |  |  | 44,082 |
Proceeds from sales of available-for-sale securities | 22,164 |  |  | 0 |
Purchase of available-for-sale securities | (30,181) |  |  | (84,961) |
Proceeds from maturities, prepayments and calls of held-to-maturity securities | 7,220 |  |  | 0 |
Purchases of held-to-maturity securities | (213,853) |  |  | 0 |
Purchase of equity securities | (120) |  |  | (108) |
Loan origination and payments, net | (113,804) |  |  | (22,471) |
Proceeds from death benefit of bank owned life insurance policies | 0 |  |  | 1,389 |
Redemption (purchase) of FHLB, other equity, and restricted equity interests | (615) |  |  | 555 |
Purchase of premises and equipment | (1,874) |  |  | (1,439) |
Proceeds from the sale of premises and equipment and foreclosed assets | 37 |  |  | 130 |
NET CASH USED BY INVESTING ACTIVITIES | (300,551) |  |  | (62,823) |
CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
Net change in: |  |  |
Checking, money market and savings accounts | 23,757 |  |  | 193,911 |
Certificates of deposit | (48,513) |  |  | (17,555) |
Purchase of treasury stock | (1,670) |  |  | (159) |
Cash dividends paid, common stock | (2,960) |  |  | (2,860) |
Cash dividends paid, preferred stock | (1,075) |  |  | (1,075) |
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES | (30,461) |  |  | 172,262 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (327,224) |  |  | 120,549 |
CASH AND CASH EQUIVALENTS, Beginning | 732,198 |  |  | 532,694 |
CASH AND CASH EQUIVALENTS, Ending | $ | 404,974 |  |  | $ | 653,243 |

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (continued)
Dollars in thousands

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |  |  |
Cash paid during the period for: |  |  |
Interest | $ | 3,668 |  |  | $ | 5,053 |
Income taxes | 1,133 |  |  | 726 |
SUPPLEMENTAL NONCASH DISCLOSURES: |  |  |
Transfers to other real estate owned | $ | 0 |  |  | $ | 4 |
Transfers from loans held for sale to loans held for investment | 5,600 |  |  | 0 |
Transfers from available-for-sale to held-to-maturity | 101,069 |  |  | 0 |
Grant of restricted stock awards from treasury stock | 976 |  |  | 1,228 |
Grant of performance based restricted stock awards from treasury stock | 173 |  |  | 262 |
Lease liabilities arising from obtaining right-of-use assets | 6,077 |  |  | 0 |

See Notes to Condensed Consolidated Financial Statements
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Table of Contents
CNB F INANCIAL C ORPORATION
N OTES T O C ONDENSED C ONSOLIDATED F INANCIAL S TATEMENTS
(U NAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
CNB Financial Corporation (the "Corporation") is headquartered in Clearfield, Pennsylvania, and provides a full range of banking and related services through its wholly owned subsidiary, CNB Bank (the "Bank"). In addition, the Bank provides wealth and asset management services, including the administration of trusts and estates, retirement plans, and other employee benefit plans as well as a full range of wealth management services. The Bank serves individual and corporate customers and is subject to competition from other financial institutions and intermediaries with respect to these services. In addition to the Bank, the Corporation also operates a consumer discount loan and finance business through its wholly owned subsidiary, Holiday Financial Services Corporation ("Holiday"). The Corporation and its other subsidiaries are subject to examination by federal and state regulators. The Corporation’s market area is primarily concentrated in the Central and Northwest regions of the Commonwealth of Pennsylvania, the Central and Northeast regions of the state of Ohio, Western New York and Southwest Virginia.
Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared pursuant to rules and regulations of the SEC and in compliance with U.S. generally accepted accounting principles ("GAAP"). Because this report is based on an interim period, certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted.
In the opinion of management of the registrant, the accompanying condensed consolidated financial statements as of March 31, 2022 and for the three month period ended March 31, 2022 and 2021 include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial condition and the results of operations for the periods presented. The financial performance reported for the Corporation for the three months ended March 31, 2022 is not necessarily indicative of the results to be expected for the full year. This information should be read in conjunction with the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Form 10-K"). Certain amounts appearing in the condensed consolidated financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassifications had no effect on net income or shareholders’ equity as previously reported. Dollar amounts in tables are stated in thousands, except for per share amounts.
Risks and Uncertainties
The worldwide spread of COVID-19 has created significant uncertainty in the global economy. The ultimate impact of the COVID-19 pandemic and the extent to which the COVID-19 pandemic and the related government responses impact the Corporation’s business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict.
The Corporation's business is dependent upon the willingness and ability of its employees and customers to conduct banking and other financial transactions. If the global response to contain the COVID-19 pandemic requires further restrictive measures or is unsuccessful, the Corporation could experience a material adverse effect on its business, financial condition, results of operations and cash flows. Since the extent to which the COVID-19 pandemic impacts its operations will depend on future developments that are highly uncertain, the Corporation cannot estimate the impact on its business, financial condition or near or long-term financial or operational results with reasonable certainty. Accordingly, the Corporation is disclosing potentially material items of which it is aware.
Use of Estimates
To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided and future results could differ.
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Operating Segments
While the Corporation monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Corporation-wide basis, and operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.
Debt Securities
Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.
Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the settlement date and determined using the specific identification method.
The Corporation has made a policy election to exclude accrued interest from the amortized cost basis of debt securities and report accrued interest separately in accrued interest receivable and other assets in the condensed consolidated balance sheets. A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a security placed on nonaccrual is reversed against interest income. There was no accrued interest related to debt securities reversed against interest income for the three months ended March 31, 2022.
2. RECENT ACCOUNTING PRONOUNCEMENTS
Accounting Standards Adopted in 2021
In August 2018, the FASB issued ASU 2018-14, "Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." ASU 2018-14 amends ASC 715-20, "Compensation - Retirement Benefits - Defined Benefit Plans - General." The amended guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans by removing and adding certain disclosures for these plans. The eliminated disclosures include (a) the amounts in accumulated Other Comprehensive Income expected to be recognized in net periodic benefit costs over the next fiscal year, and (b) the effects of a one percentage point change in assumed health care cost trend rates on the net periodic benefit costs and the benefit obligation for post-retirement health care benefits. Additional disclosures include descriptions of significant gains and losses affecting the benefit obligation for the period. ASU 2018-14 was effective for the Corporation on January 1, 2021 and did not have a material impact on its consolidated financial statements and related disclosures.
In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." These amendments remove specific exceptions to the general principles in Topic 740 in GAAP. It eliminates the need for an organization to analyze whether the following apply in a given period: exception to the incremental approach for intraperiod tax allocation; exceptions to accounting for basis differences where there are ownership changes in foreign investments; and exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. It also improves financial statement preparers' application of income tax- related guidance and simplifies GAAP for: franchise taxes that are partially based on income; transactions with a government that result in a step up in the tax basis of goodwill; separate financial statements of legal entities that are not subject to tax; and enacts changes in tax laws in interim periods. The guidance is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. ASU 2019-12 was effective for the Corporation on January 1, 2021 and did not have a material impact on its consolidated financial statements and related disclosures.
In January 2020, the FASB issued ASU 2020-01, "Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815." ASU 2020-01 represents changes to clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815. These amendments improve current U.S. GAAP by reducing diversity in practice and increasing comparability of the accounting for these transactions. ASU 2020-01 was effective for the Corporation on January 1, 2021 and did not have a material impact on its consolidated financial statements and related disclosures.
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In October 2020, the FASB issued ASU 2020-08, "Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs." ASU 2020-08 clarifies that an entity should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. ASU 2020-08 was effective for the Corporation on January 1, 2021 and did not have a material impact on its consolidated financial statements and related disclosures.
In August 2021, FASB issued ASU 2021-06, "Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946)." ASU 2021-06 updates the codification to align with SEC Final Rule Releases No. 33-10786 and No. 33-10835. Specific to financial institutions, these SEC releases updated required annual statistical disclosures. The amendments in ASU 2021-06 were effective immediately. The updates to the statistical disclosures are reflected in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2021, to align with this guidance.
Accounting Pronouncements Pending Adoption
In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provides optional expedients and exceptions for accounting related to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 applies only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Corporation is currently evaluating the effect of the reference rate reform on its consolidated financial statements.
In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848)." ASU 2021-01 expands and clarifies the scope of ASU No. 2020-04 to include derivatives affected by changes in interest rates used for margining, discounting, or contract price alignment, commonly referred to as the “discounting transaction.” Derivatives impacted by the discounting transaction will be eligible for certain optional expedients and exceptions related to contract modifications and hedge accounting as defined in Topic 848. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. The Corporation is currently evaluating the effect of the reference rate reform on its consolidated financial statements and related disclosures.
In March 2022, the FASB issued ASU No. 2022-02, "Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." This ASU eliminates the separate recognition and measurement guidance for Troubled Debt Restructurings ("TDRs") by creditors. The elimination of the TDR guidance may be adopted prospectively for loan modifications after adoption or on a modified retrospective basis, which would also apply to loans previously modified, resulting in a cumulative effect adjustment to retained earnings in the period of adoption for changes in the allowance for credit losses. This guidance is effective for the Corporation for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The Corporation is evaluating the effect that ASU 2022-02 will have on its consolidated financial statements and related disclosures.
3. SECURITIES
Debt securities available-for-sale ("AFS") at March 31, 2022 and December 31, 2021 are as follows:

| March 31, 2022 |  | December 31, 2021
| Amortized |  | Unrealized |  | Fair |  | Amortized |  | Unrealized |  | Fair
| Cost |  | Gains |  | Losses |  | Value |  | Cost |  | Gains |  | Losses |  | Value
U.S. Government sponsored entities | $ | 1,831 |  |  | $ | 0 |  |  | $ | (35) |  |  | $ | 1,796 |  |  | $ | 110,788 |  |  | $ | 2,728 |  |  | $ | (1,768) |  |  | $ | 111,748 |
State & political subdivisions | 113,292 |  |  | 495 |  |  | (7,923) |  |  | 105,864 |  |  | 103,232 |  |  | 2,162 |  |  | (1,682) |  |  | 103,712 |
Residential & multi-family mortgage | 406,532 |  |  | 494 |  |  | (26,489) |  |  | 380,537 |  |  | 437,021 |  |  | 4,127 |  |  | (6,513) |  |  | 434,635 |
Corporate notes & bonds | 35,773 |  |  | 59 |  |  | (1,678) |  |  | 34,154 |  |  | 28,257 |  |  | 250 |  |  | (443) |  |  | 28,064 |
Pooled SBA | 17,820 |  |  | 20 |  |  | (629) |  |  | 17,211 |  |  | 18,787 |  |  | 283 |  |  | (38) |  |  | 19,032 |
Total | $ | 575,248 |  |  | $ | 1,068 |  |  | $ | (36,754) |  |  | $ | 539,562 |  |  | $ | 698,085 |  |  | $ | 9,550 |  |  | $ | (10,444) |  |  | $ | 697,191 |

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Debt securities held-to-maturity ("HTM") at March 31, 2022 and December 31, 2021 are as follows:

| March 31, 2022 |  | December 31, 2021
| Amortized |  | Unrealized |  | Fair |  | Amortized |  | Unrealized |  | Fair
| Cost |  | Gains |  | Losses |  | Value |  | Cost |  | Gains |  | Losses |  | Value
U.S. Government sponsored entities | $ | 307,597 |  |  | $ | 0 |  |  | $ | (11,909) |  |  | $ | 295,688 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Total | $ | 307,597 |  |  | $ | 0 |  |  | $ | (11,909) |  |  | $ | 295,688 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |

The Corporation elected to transfer 23 AFS securities with an aggregate fair value of $101.1 million to a classification of HTM on January 1, 2022. In accordance with FASB ASC 320-10-55-24, the transfer from AFS to HTM must be recorded at the fair value of the AFS securities at the time of transfer. The net unrealized holding gain of $373 thousand, net of tax, at the date of transfer was retained in accumulated other comprehensive income (loss), with the associated pre-tax amount retained in the carrying value of the HTM securities. Such amounts will be amortized to comprehensive income over the remaining life of the securities.
Information pertaining to security sales on AFS securities is as follows:

| Proceeds |  | Gross Gains |  | Gross Losses
Three months ended March 31, 2022 | $ | 22,164 |  |  | $ | 651 |  |  | $ | 0 |
Three months ended March 31, 2021 | 0 |  | 0 |  | 0

The tax provision related to these net realized gains was $137 thousand for the three months ended March 31, 2022 and zero during the three months ended March 31, 2021, respectively.
The table below illustrates the maturity distribution of debt securities at amortized cost and fair value as of March 31, 2022:

| Available-for-sale |  | Held-to-maturity
| Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
1 year or less | $ | 7,343 |  |  | $ | 7,377 |  |  | $ | 503 |  |  | $ | 477 |
1 year – 5 years | 41,120 |  |  | 40,800 |  |  | 232,668 |  |  | 225,357 |
5 years – 10 years | 94,461 |  |  | 86,401 |  |  | 68,939 |  |  | 64,722 |
After 10 years | 7,972 |  |  | 7,236 |  |  | 5,487 |  |  | 5,132 |
| 150,896 |  |  | 141,814 |  |  | 307,597 |  |  | 295,688 |
Residential & multi-family mortgage | 406,532 |  |  | 380,537 |  |  | 0 |  |  | 0 |
Pooled SBA | 17,820 |  |  | 17,211 |  |  | 0 |  |  | 0 |
Total debt securities | $ | 575,248 |  |  | $ | 539,562 |  |  | $ | 307,597 |  |  | $ | 295,688 |

Mortgage securities and pooled SBA securities are not due at a single date; periodic payments are received based on the payment patterns of the underlying collateral.
On March 31, 2022 and December 31, 2021, securities carried at $601.5 million and $461.5 million, respectively, were pledged to secure public deposits and for other purposes as provided by law.
At March 31, 2022 and December 31, 2021, there were no holdings of securities of any one issuer, other than the U.S. Government sponsored entities, in an amount greater than 10% of shareholders’ equity. The Corporation’s residential and multi-family mortgage securities are issued by government sponsored entities.
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AFS debt securities with unrealized losses at March 31, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:
March 31, 2022

| Less than 12 Months |  | 12 Months or More |  | Total
Description of Securities | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss
U.S. Government sponsored entities | $ | 1,796 |  |  | $ | (35) |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 1,796 |  |  | $ | (35) |
State & political subdivisions | 78,991 |  |  | (6,275) |  |  | 14,547 |  |  | (1,648) |  |  | 93,538 |  |  | (7,923) |
Residential & multi-family mortgage | 293,601 |  |  | (17,743) |  |  | 100,040 |  |  | (8,746) |  |  | 393,641 |  |  | (26,489) |
Corporate notes & bonds | 22,174 |  |  | (1,401) |  |  | 5,777 |  |  | (277) |  |  | 27,951 |  |  | (1,678) |
Pooled SBA | 16,379 |  |  | (629) |  |  | 126 |  |  | 0 |  |  | 16,505 |  |  | (629) |
| $ | 412,941 |  |  | $ | (26,083) |  |  | $ | 120,490 |  |  | $ | (10,671) |  |  | $ | 533,431 |  |  | $ | (36,754) |

December 31, 2021

| Less than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss
U.S. Government sponsored entities | $ | 23,733 |  |  | $ | (553) |  |  | $ | 37,911 |  |  | $ | (1,215) |  |  | $ | 61,644 |  |  | $ | (1,768) |
State & political subdivisions | 55,636 |  |  | (1,399) |  |  | 5,026 |  |  | (283) |  |  | 60,662 |  |  | (1,682) |
Residential & multi-family mortgage | 248,690 |  |  | (4,837) |  |  | 45,185 |  |  | (1,676) |  |  | 293,875 |  |  | (6,513) |
Corporate notes & bonds | 6,466 |  |  | (249) |  |  | 3,806 |  |  | (194) |  |  | 10,272 |  |  | (443) |
Pooled SBA | 4,394 |  |  | (37) |  |  | 127 |  |  | (1) |  |  | 4,521 |  |  | (38) |
| $ | 338,919 |  |  | $ | (7,075) |  |  | $ | 92,055 |  |  | $ | (3,369) |  |  | $ | 430,974 |  |  | $ | (10,444) |

HTM debt securities with unrealized losses at March 31, 2022 and December 31, 2021, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:
March 31, 2022

| Less than 12 Months |  | 12 Months or More |  | Total
Description of Securities | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss
U.S. Government sponsored entities | $ | 265,151 |  |  | $ | (9,108) |  |  | $ | 54,355 |  |  | $ | (2,801) |  |  | $ | 319,506 |  |  | $ | (11,909) |
| $ | 265,151 |  |  | $ | (9,108) |  |  | $ | 54,355 |  |  | $ | (2,801) |  |  | $ | 319,506 |  |  | $ | (11,909) |

December 31, 2021

| Less than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss
U.S. Government sponsored entities | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
| $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |

At March 31, 2022 and December 31, 2021, management performed an assessment for possible impairment related to credit losses of the Corporation’s debt securities, relying on information obtained from various sources, including publicly available financial data, ratings by external agencies, brokers and other sources. Based on the results of the assessment, management believes impairment of these debt securities at March 31, 2022 and December 31, 2021 to be temporary.
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For the securities that comprise corporate notes and bonds and the securities that are issued by state and political subdivisions, management monitors publicly available financial information, such as filings with the Securities and Exchange Commission, in order to evaluate the securities for other-than-temporary impairment. For financial institution issuers, management monitors information from quarterly “call” report filings that are used to generate Uniform Bank Performance Reports. All other securities that were in an unrealized loss position at the balance sheet date were reviewed by management, and issuer-specific documents were reviewed as appropriate given the following considerations; the financial condition and near-term prospects of the issuer and whether downgrades by bond rating agencies have occurred, the length of time and extent to which fair value has been less than cost, and whether management does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.
As of March 31, 2022 and December 31, 2021, management concluded the debt securities described in the previous paragraphs were not impaired for reasons due to credit quality for the following reasons:
•There is no indication of any significant deterioration of the creditworthiness of the institutions that issued the securities.
•All contractual interest payments on the securities have been received as scheduled, and no information has come to management’s attention through the processes previously described which would lead to a conclusion that future contractual payments will not be timely received.
•The unrealized losses were deemed to be temporary changes in value related to market movements in interest yields.
The Corporation does not intend to sell and it is not more likely than not that it will be required to sell the securities in an unrealized loss position before recovery of its amortized cost basis.
Equity securities at March 31, 2022 and December 31, 2021 are as follows:

| March 31, 2022 |  | December 31, 2021
Corporate equity securities | $ | 6,484 |  |  | $ | 6,715 |
Mutual funds | 2,383 |  |  | 2,566 |
Certificates of deposit | 663 |  |  | 506 |
Corporate notes and bonds | 562 |  |  | 579 |
Total | $ | 10,092 |  |  | $ | 10,366 |

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4. LOANS AND ALLOWANCE FOR CREDIT LOSSES
Total net loans at March 31, 2022 and December 31, 2021 are summarized as follows:

| March 31, 2022 |  | Percentage of Total |  | December 31, 2021 |  | Percentage of Total
Farmland | $ | 31,299 |  |  | 0.8 | % |  | $ | 23,768 |  |  | 0.7 | %
Owner-occupied, nonfarm nonresidential properties | 448,180 |  |  | 11.9 | % |  | 434,672 |  |  | 12.0 | %
Agricultural production and other loans to farmers | 1,376 |  |  | 0.0 | % |  | 1,379 |  |  | 0.0 | %
Commercial and Industrial 1 | 717,252 |  |  | 19.1 | % |  | 708,989 |  |  | 19.5 | %
Obligations (other than securities and leases) of states and political subdivisions | 142,415 |  |  | 3.8 | % |  | 140,887 |  |  | 3.9 | %
Other loans | 13,441 |  |  | 0.4 | % |  | 13,979 |  |  | 0.4 | %
Other construction loans and all land development and other land loans | 319,154 |  |  | 8.5 | % |  | 298,869 |  |  | 8.2 | %
Multifamily (5 or more) residential properties | 228,534 |  |  | 6.1 | % |  | 216,143 |  |  | 5.9 | %
Non-owner occupied, nonfarm nonresidential properties | 698,574 |  |  | 18.6 | % |  | 663,062 |  |  | 18.2 | %
1-4 Family Construction | 41,023 |  |  | 1.1 | % |  | 37,822 |  |  | 1.0 | %
Home equity lines of credit | 109,224 |  |  | 2.9 | % |  | 104,517 |  |  | 2.9 | %
Residential Mortgages secured by first liens | 841,001 |  |  | 22.4 | % |  | 826,729 |  |  | 22.7 | %
Residential Mortgages secured by junior liens | 57,909 |  |  | 1.5 | % |  | 56,689 |  |  | 1.6 | %
Other revolving credit plans | 25,857 |  |  | 0.7 | % |  | 26,536 |  |  | 0.7 | %
Automobile | 20,416 |  |  | 0.5 | % |  | 20,862 |  |  | 0.6 | %
Other consumer | 49,517 |  |  | 1.3 | % |  | 49,676 |  |  | 1.4 | %
Credit cards | 10,937 |  |  | 0.3 | % |  | 9,935 |  |  | 0.3 | %
Overdrafts | 254 |  |  | 0.0 | % |  | 278 |  |  | 0.0 | %
Total loans | $ | 3,756,363 |  |  | 100.0 | % |  | $ | 3,634,792 |  |  | 100.0 | %
Less: Allowance for credit losses | (38,117) |  |  |  |  | (37,588) |  |  |
Loans, net | $ | 3,718,246 |  |  |  |  | $ | 3,597,204 |  |  |
Net deferred loan origination fees (costs) included in the above loan table | $ | 4,842 |  |  |  |  | $ | 5,667 |  |  |
1 PPP loans, net of deferred PPP processing fees, both those disbursed in 2020 and those disbursed in 2021, are included in the Commercial and Industrial classification. |  |

The Corporation’s outstanding loans and related unfunded commitments are primarily concentrated within central and northwest Pennsylvania, central and northeast Ohio, western New York and Southwestern Virginia. The Bank attempts to limit concentrations within specific industries by utilizing dollar limitations to single industries or customers, and by entering into participation agreements with third parties. Collateral requirements are established based on management’s assessment of the customer. The Corporation maintains lending policies to control the quality of the loan portfolio. These policies delegate the authority to extend loans under specific guidelines and underwriting standards. These policies are prepared by the Corporation’s management and reviewed and ratified annually by the Corporation’s Board of Directors.
During the second quarter of 2020, the Corporation began originating loans to qualified small businesses under the Paycheck Protection Program ("PPP") administered by the Small Business Administration (“SBA”) under the provisions of the Coronavirus Aid, Relief, and Economic Security Act. PPP loans, both those disbursed in 2020 and those disbursed in 2021, are included in the commercial and industrial classification and, as the PPP loans are fully guaranteed by the SBA, no allowance for credit losses was required recorded against the PPP loans, net of deferred PPP processing fees, outstanding of $18.4 million and $45.2 million as of March 31, 2022 and December 31, 2021, respectively. Syndicated loans, net of deferred fees and costs, are included in the commercial and industrial classification and totaled $147.1 million and $125.8 million as of March 31, 2022 and December 31, 2021, respectively.
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Transactions in the allowance for credit losses for the three months ended March 31, 2022 were as follows:

| Beginning Allowance |  | (Charge-offs) |  | Recoveries |  | Provision (Benefit) for Credit Losses on Loans (1) |  | Ending Allowance |
Farmland | $ | 151 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 35 |  |  | $ | 186 |  |
Owner-occupied, nonfarm nonresidential properties | 3,339 |  |  | (21) |  |  | 7 |  |  | 270 |  |  | 3,595 |  |
Agricultural production and other loans to farmers | 9 |  |  | 0 |  |  | 0 |  |  | 1 |  |  | 10 |  |
Commercial and Industrial | 8,837 |  |  | (71) |  |  | 78 |  |  | 246 |  |  | 9,090 |  |
Obligations (other than securities and leases) of states and political subdivisions | 1,649 |  |  | 0 |  |  | 0 |  |  | 179 |  |  | 1,828 |  |
Other loans | 149 |  |  | 0 |  |  | 0 |  |  | (6) |  |  | 143 |  |
Other construction loans and all land development and other land loans | 2,198 |  |  | 0 |  |  | 0 |  |  | (148) |  |  | 2,050 |  |
Multifamily (5 or more) residential properties | 2,289 |  |  | 0 |  |  | 0 |  |  | (53) |  |  | 2,236 |  |
Non-owner occupied, nonfarm nonresidential properties | 6,481 |  |  | 0 |  |  | 0 |  |  | (70) |  |  | 6,411 |  |
1-4 Family Construction | 158 |  |  | 0 |  |  | 0 |  |  | 52 |  |  | 210 |  |
Home equity lines of credit | 1,169 |  |  | 0 |  |  | 8 |  |  | 4 |  |  | 1,181 |  |
Residential Mortgages secured by first liens | 6,943 |  |  | (47) |  |  | 12 |  |  | (3) |  |  | 6,905 |  |
Residential Mortgages secured by junior liens | 546 |  |  | 0 |  |  | 0 |  |  | 6 |  |  | 552 |  |
Other revolving credit plans | 528 |  |  | (26) |  |  | 6 |  |  | 39 |  |  | 547 |  |
Automobile | 263 |  |  | (7) |  |  | 0 |  |  | (2) |  |  | 254 |  |
Other consumer | 2,546 |  |  | (401) |  |  | 22 |  |  | 402 |  |  | 2,569 |  |
Credit cards | 92 |  |  | (14) |  |  | 4 |  |  | 21 |  |  | 103 |  |
Overdrafts | 241 |  |  | (119) |  |  | 41 |  |  | 84 |  |  | 247 |  |
Total loans | $ | 37,588 |  |  | $ | (706) |  |  | $ | 178 |  |  | $ | 1,057 |  |  | $ | 38,117 |  |

(1) Excludes provision for credit losses related to unfunded commitments. Note 8, "Off-Balance Sheet Commitments and Contingencies," in the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.
Transactions in the allowance for credit losses for the three months ended March 31, 2021 were as follows:

| Beginning Allowance |  | (Charge-offs) |  | Recoveries |  | Provision (Benefit) for Credit Losses on Loans (1) |  | Ending Allowance |
Farmland | $ | 221 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 3 |  |  | $ | 224 |  |
Owner-occupied, nonfarm nonresidential properties | 3,700 |  |  | (531) |  |  | 2 |  |  | (236) |  |  | 2,935 |  |
Agricultural production and other loans to farmers | 24 |  |  | 0 |  |  | 0 |  |  | 4 |  |  | 28 |  |
Commercial and Industrial | 6,233 |  |  | (56) |  |  | 5 |  |  | 297 |  |  | 6,479 |  |
Obligations (other than securities and leases) of states and political subdivisions | 998 |  |  | 0 |  |  | 0 |  |  | 717 |  |  | 1,715 |  |
Other loans | 68 |  |  | 0 |  |  | 0 |  |  | 5 |  |  | 73 |  |
Other construction loans and all land development and other land loans | 1,956 |  |  | 0 |  |  | 0 |  |  | 50 |  |  | 2,006 |  |
Multifamily (5 or more) residential properties | 2,724 |  |  | 0 |  |  | 0 |  |  | 30 |  |  | 2,754 |  |
Non-owner occupied, nonfarm nonresidential properties | 8,658 |  |  | 0 |  |  | 0 |  |  | 2,668 |  |  | 11,326 |  |
1-4 Family Construction | 82 |  |  | 0 |  |  | 0 |  |  | (15) |  |  | 67 |  |
Home equity lines of credit | 985 |  |  | 0 |  |  | 0 |  |  | (142) |  |  | 843 |  |
Residential Mortgages secured by first liens | 4,539 |  |  | (28) |  |  | 31 |  |  | (992) |  |  | 3,550 |  |
Residential Mortgages secured by junior liens | 241 |  |  | 0 |  |  | 0 |  |  | (17) |  |  | 224 |  |
Other revolving credit plans | 507 |  |  | (6) |  |  | 2 |  |  | 24 |  |  | 527 |  |
Automobile | 132 |  |  | (5) |  |  | 0 |  |  | 55 |  |  | 182 |  |
Other consumer | 2,962 |  |  | (315) |  |  | 48 |  |  | (321) |  |  | 2,374 |  |
Credit cards | 66 |  |  | (33) |  |  | 8 |  |  | 24 |  |  | 65 |  |
Overdrafts | 244 |  |  | (84) |  |  | 55 |  |  | (32) |  |  | 183 |  |
Total loans | $ | 34,340 |  |  | $ | (1,058) |  |  | $ | 151 |  |  | $ | 2,122 |  |  | $ | 35,555 |  |

(1) Excludes provision for credit losses related to unfunded commitments. Note 8, "Off-Balance Sheet Commitments and Contingencies," in the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.
The Corporation's allowance for credit losses is influenced by loan volumes, risk rating migration, delinquency status and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions.
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For the three months ended March 31, 2022, the allowance for credit losses increased due to the growth in the Corporation's loan portfolio, including growth in new market areas. This was partially offset by improvements in the Corporation's historical loss rates, as well as the impact of net charge-offs. There is still a significant amount of uncertainty related to the economic impact of COVID-19, including duration of the pandemic, new variants, future government responses, and the resiliency of the U.S. economy, as well as the uncertain macroeconomic environment. Management will continue to evaluate its estimate of expected credit losses as new information becomes available.
Provision for credit losses was $1.6 million for the three months ended March 31, 2022, compared to $2.1 million for March 31, 2021. Included in the provision for credit losses for the three months ended March 31, 2022 was $586 thousand related to the allowance for unfunded commitments compared to zero for the three months ended March 31, 2021.
The following tables presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of March 31, 2022 and December 31, 2021, respectively:

| March 31, 2022
| Nonaccrual |  | Nonaccrual With No Allowance for Credit Loss |  | Loans Past Due over 89 Days Still Accruing
Farmland | $ | 965 |  |  | $ | 965 |  |  | $ | 0 |
Owner-occupied, nonfarm nonresidential properties | 751 |  |  | 668 |  |  | 0 |
Commercial and Industrial | 7,264 |  |  | 1,915 |  |  | 5 |
Other construction loans and all land development and other land loans | 77 |  |  | 77 |  |  | 0 |
Multifamily (5 or more) residential properties | 1,143 |  |  | 0 |  |  | 0 |
Non-owner occupied, nonfarm nonresidential properties | 3,724 |  |  | 2,097 |  |  | 0 |
Home equity lines of credit | 646 |  |  | 646 |  |  | 0 |
Residential Mortgages secured by first liens | 4,133 |  |  | 3,668 |  |  | 36 |
Residential Mortgages secured by junior liens | 139 |  |  | 139 |  |  | 0 |
Other revolving credit plans | 31 |  |  | 31 |  |  | 0 |
Automobile | 28 |  |  | 28 |  |  | 0 |
Other consumer | 477 |  |  | 477 |  |  | 0 |
Credit cards | 0 |  |  | 0 |  |  | 11 |
Total loans | $ | 19,378 |  |  | $ | 10,711 |  |  | $ | 52 |

| December 31, 2021
| Nonaccrual |  | Nonaccrual With No Allowance for Credit Loss |  | Loans Past Due over 89 Days Still Accruing
Farmland | $ | 965 |  |  | $ | 965 |  |  | $ | 0 |
Owner-occupied, nonfarm nonresidential properties | 850 |  |  | 762 |  |  | 0 |
Commercial and Industrial | 7,060 |  |  | 1,653 |  |  | 8 |
Other construction loans and all land development and other land loans | 516 |  |  | 77 |  |  | 0 |
Multifamily (5 or more) residential properties | 1,270 |  |  | 5 |  |  | 0 |
Non-owner occupied, nonfarm nonresidential properties | 3,771 |  |  | 2,143 |  |  | 0 |
Home equity lines of credit | 824 |  |  | 824 |  |  | 0 |
Residential Mortgages secured by first liens | 3,410 |  |  | 3,410 |  |  | 137 |
Residential Mortgages secured by junior liens | 147 |  |  | 147 |  |  | 0 |
Other revolving credit plans | 13 |  |  | 13 |  |  | 0 |
Automobile | 36 |  |  | 36 |  |  | 0 |
Other consumer | 558 |  |  | 558 |  |  | 0 |
Credit cards | 0 |  |  | 0 |  |  | 23 |
Total loans | $ | 19,420 |  |  | $ | 10,593 |  |  | $ | 168 |

All payments received while on nonaccrual status are applied against the principal balance of the loan. The Corporation does not recognize interest income while loans are on nonaccrual status.
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The following table presents the amortized cost basis of individually evaluated collateral-dependent loans by class of loans as of March 31, 2022:

| Real Estate Collateral |  | Non-Real Estate Collateral
Farmland | $ | 920 |  |  | $ | 0 |
Owner-occupied, nonfarm nonresidential properties | 185 |  |  | 9 |
Commercial and Industrial | 1,438 |  |  | 2,279 |
Multifamily (5 or more) residential properties | 1,143 |  |  | 0 |
Non-owner occupied, nonfarm nonresidential properties | 3,293 |  |  | 0 |
Residential Mortgages secured by first liens | 894 |  |  | 0 |
Total loans | $ | 7,873 |  |  | $ | 2,288 |

The following table presents the amortized cost basis of individually evaluated collateral-dependent loans by class of loans as of December 31, 2021:

| Real Estate Collateral |  | Non-Real Estate Collateral
Farmland | $ | 920 |  |  | $ | 0 |
Owner-occupied, nonfarm nonresidential properties | 194 |  |  | 9 |
Commercial and Industrial | 1,488 |  |  | 2,351 |
Other construction loans and all land development and other land loans | 438 |  |  | 0 |
Multifamily (5 or more) residential properties | 1,265 |  |  | 0 |
Non-owner occupied, nonfarm nonresidential properties | 3,378 |  |  | 0 |
Residential Mortgages secured by first liens | 435 |  |  | 0 |
Total loans | $ | 8,118 |  |  | $ | 2,360 |

The following table presents the aging of the amortized cost basis in past-due loans as of March 31, 2022 by class of loans:

| 30 - 59 Days Past Due |  | 60 - 89 Days Past Due |  | Greater Than 89 Days Past Due |  | Total Past Due |  | Loans Not Past Due |  | Total
Farmland | $ | 0 |  |  | $ | 998 |  |  | $ | 0 |  |  | $ | 998 |  |  | $ | 30,301 |  |  | $ | 31,299 |
Owner-occupied, nonfarm nonresidential properties | 688 |  |  | 0 |  |  | 354 |  |  | 1,042 |  |  | 447,138 |  |  | 448,180 |
Agricultural production and other loans to farmers | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,376 |  |  | 1,376 |
Commercial and Industrial | 251 |  |  | 368 |  |  | 285 |  |  | 904 |  |  | 716,348 |  |  | 717,252 |
Obligations (other than securities and leases) of states and political subdivisions | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 142,415 |  |  | 142,415 |
Other loans | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 13,441 |  |  | 13,441 |
Other construction loans and all land development and other land loans | 0 |  |  | 0 |  |  | 77 |  |  | 77 |  |  | 319,077 |  |  | 319,154 |
Multifamily (5 or more) residential properties | 0 |  |  | 0 |  |  | 90 |  |  | 90 |  |  | 228,444 |  |  | 228,534 |
Non-owner occupied, nonfarm nonresidential properties | 215 |  |  | 0 |  |  | 1,680 |  |  | 1,895 |  |  | 696,679 |  |  | 698,574 |
1-4 Family Construction | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 41,023 |  |  | 41,023 |
Home equity lines of credit | 216 |  |  | 11 |  |  | 49 |  |  | 276 |  |  | 108,948 |  |  | 109,224 |
Residential Mortgages secured by first liens | 1,611 |  |  | 373 |  |  | 1,323 |  |  | 3,307 |  |  | 837,694 |  |  | 841,001 |
Residential Mortgages secured by junior liens | 57 |  |  | 0 |  |  | 8 |  |  | 65 |  |  | 57,844 |  |  | 57,909 |
Other revolving credit plans | 131 |  |  | 21 |  |  | 9 |  |  | 161 |  |  | 25,696 |  |  | 25,857 |
Automobile | 83 |  |  | 6 |  |  | 12 |  |  | 101 |  |  | 20,315 |  |  | 20,416 |
Other consumer | 380 |  |  | 285 |  |  | 259 |  |  | 924 |  |  | 48,593 |  |  | 49,517 |
Credit cards | 219 |  |  | 19 |  |  | 11 |  |  | 249 |  |  | 10,688 |  |  | 10,937 |
Overdrafts | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 254 |  |  | 254 |
Total loans | $ | 3,851 |  |  | $ | 2,081 |  |  | $ | 4,157 |  |  | $ | 10,089 |  |  | $ | 3,746,274 |  |  | $ | 3,756,363 |

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The following table presents the aging of the amortized cost basis in past-due loans as of December 31, 2021 by class of loans:

| 30 - 59 Days Past Due |  | 60 - 89 Days Past Due |  | Greater Than 89 Days Past Due |  | Total Past Due |  | Loans Not Past Due |  | Total
Farmland | $ | 348 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 348 |  |  | $ | 23,420 |  |  | $ | 23,768 |
Owner-occupied, nonfarm nonresidential properties | 278 |  |  | 18 |  |  | 414 |  |  | 710 |  |  | 433,962 |  |  | 434,672 |
Agricultural production and other loans to farmers | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,379 |  |  | 1,379 |
Commercial and Industrial | 377 |  |  | 13 |  |  | 333 |  |  | 723 |  |  | 708,266 |  |  | 708,989 |
Obligations (other than securities and leases) of states and political subdivisions | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 140,887 |  |  | 140,887 |
Other loans | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 13,979 |  |  | 13,979 |
Other construction loans and all land development and other land loans | 0 |  |  | 0 |  |  | 77 |  |  | 77 |  |  | 298,792 |  |  | 298,869 |
Multifamily (5 or more) residential properties | 0 |  |  | 10 |  |  | 209 |  |  | 219 |  |  | 215,924 |  |  | 216,143 |
Non-owner occupied, nonfarm nonresidential properties | 0 |  |  | 0 |  |  | 1,792 |  |  | 1,792 |  |  | 661,270 |  |  | 663,062 |
1-4 Family Construction | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 37,822 |  |  | 37,822 |
Home equity lines of credit | 506 |  |  | 50 |  |  | 172 |  |  | 728 |  |  | 103,789 |  |  | 104,517 |
Residential Mortgages secured by first liens | 1,286 |  |  | 1,145 |  |  | 1,647 |  |  | 4,078 |  |  | 822,651 |  |  | 826,729 |
Residential Mortgages secured by junior liens | 32 |  |  | 24 |  |  | 1 |  |  | 57 |  |  | 56,632 |  |  | 56,689 |
Other revolving credit plans | 56 |  |  | 17 |  |  | 4 |  |  | 77 |  |  | 26,459 |  |  | 26,536 |
Automobile | 45 |  |  | 3 |  |  | 23 |  |  | 71 |  |  | 20,791 |  |  | 20,862 |
Other consumer | 283 |  |  | 158 |  |  | 295 |  |  | 736 |  |  | 48,940 |  |  | 49,676 |
Credit cards | 26 |  |  | 12 |  |  | 23 |  |  | 61 |  |  | 9,874 |  |  | 9,935 |
Overdrafts | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 278 |  |  | 278 |
Total loans | $ | 3,237 |  |  | $ | 1,450 |  |  | $ | 4,990 |  |  | $ | 9,677 |  |  | $ | 3,625,115 |  |  | $ | 3,634,792 |

Troubled Debt Restructurings
In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without a loan modification. This evaluation is performed using the Corporation’s internal underwriting policies. The Corporation has no further loan commitments to customers whose loans are classified as a troubled debt restructuring.
As of March 31, 2022 and December 31, 2021, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included either or both of the following: a reduction of the stated interest rate of the loan; or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. The Corporation had an amortized cost in troubled debt restructurings of $18.1 million and $16.6 million as of March 31, 2022 and December 31, 2021, respectively. The Corporation has allocated $2.6 million and $2.6 million of allowance for those loans as of March 31, 2022 and December 31, 2021, respectively.
There was one loan modified as troubled debt restructuring during the three months ended March 31, 2022:

| Three Months Ended March 31, 2022
| Number of Loans |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment |  | Type of Modification
Non-owner occupied, nonfarm nonresidential properties | 1 |  |  | $ | 1,784 |  |  | $ | 1,784 |  |  | Modify Rate and Extend Amortization
Total loans | 1 |  |  | $ | 1,784 |  |  | $ | 1,784 |  |  |

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There were two loans modified as troubled debt restructurings during the three months ended March 31, 2021.

| Three Months Ended March 31, 2021
| Number of Loans |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment |  | Type of Modification
Multifamily (5 or more) residential properties | 1 |  |  | $ | 717 |  |  | $ | 717 |  |  | Modify Payment
Non-owner occupied, nonfarm nonresidential properties | 1 |  |  | 1,604 |  |  | 1,604 |  |  | Modify Payment
Total loans | 2 |  |  | $ | 2,321 |  |  | $ | 2,321 |  |  |

The troubled debt restructurings described above increased the allowance for credit losses by an immaterial amount for the three months ended March 31, 2022 and 2021, respectively.
A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no loans modified as troubled debt restructurings for which there was a payment default within a twelve-month cycle following the modification during the three months ended March 31, 2022 and 2021, respectively. There were no principal balances forgiven in connection with the loan restructurings.
Generally, nonperforming troubled debt restructurings are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt.
Credit Quality Indicators
The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually to classify the loans as to credit risk.
The Corporation uses the following definitions for risk ratings:
Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Corporation’s credit position at some future date.
Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected.
Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
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The following tables represent the Corporation's credit risk profile by risk rating. Loans not rated as special mention, substandard, or doubtful are considered to be pass rated loans.

| March 31, 2022
|  |  | Non-Pass Rated |  |  |  |
| Pass |  | Special Mention |  | Substandard |  | Doubtful |  | Total Non-Pass |  | Total
Farmland | $ | 28,832 |  |  | $ | 1,503 |  |  | $ | 964 |  |  | $ | 0 |  |  | $ | 2,467 |  |  | $ | 31,299 |
Owner-occupied, nonfarm nonresidential properties | 433,189 |  |  | 6,711 |  |  | 8,280 |  |  | 0 |  |  | 14,991 |  |  | 448,180 |
Agricultural production and other loans to farmers | 1,376 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,376 |
Commercial and Industrial | 696,196 |  |  | 6,626 |  |  | 13,060 |  |  | 1,370 |  |  | 21,056 |  |  | 717,252 |
Obligations (other than securities and leases) of states and political subdivisions | 142,415 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 142,415 |
Other loans | 13,441 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 13,441 |
Other construction loans and all land development and other land loans | 316,925 |  |  | 2,152 |  |  | 77 |  |  | 0 |  |  | 2,229 |  |  | 319,154 |
Multifamily (5 or more) residential properties | 227,291 |  |  | 100 |  |  | 1,143 |  |  | 0 |  |  | 1,243 |  |  | 228,534 |
Non-owner occupied, nonfarm nonresidential properties | 668,003 |  |  | 7,327 |  |  | 23,244 |  |  | 0 |  |  | 30,571 |  |  | 698,574 |
Total loans | $ | 2,527,668 |  |  | $ | 24,419 |  |  | $ | 46,768 |  |  | $ | 1,370 |  |  | $ | 72,557 |  |  | $ | 2,600,225 |

| December 31, 2021
|  |  | Non-Pass Rated |  |  |  |
| Pass |  | Special Mention |  | Substandard |  | Doubtful |  | Total Non-Pass |  | Total
Farmland | $ | 21,286 |  |  | $ | 1,514 |  |  | $ | 968 |  |  | $ | 0 |  |  | $ | 2,482 |  |  | $ | 23,768 |
Owner-occupied, nonfarm nonresidential properties | 419,368 |  |  | 6,723 |  |  | 8,581 |  |  | 0 |  |  | 15,304 |  |  | 434,672 |
Agricultural production and other loans to farmers | 1,379 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,379 |
Commercial and Industrial | 687,010 |  |  | 7,946 |  |  | 12,654 |  |  | 1,379 |  |  | 21,979 |  |  | 708,989 |
Obligations (other than securities and leases) of states and political subdivisions | 140,887 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 140,887 |
Other loans | 13,979 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 13,979 |
Other construction loans and all land development and other land loans | 294,103 |  |  | 4,221 |  |  | 545 |  |  | 0 |  |  | 4,766 |  |  | 298,869 |
Multifamily (5 or more) residential properties | 214,772 |  |  | 100 |  |  | 1,271 |  |  | 0 |  |  | 1,371 |  |  | 216,143 |
Non-owner occupied, nonfarm nonresidential properties | 631,534 |  |  | 9,628 |  |  | 21,900 |  |  | 0 |  |  | 31,528 |  |  | 663,062 |
Total loans | $ | 2,424,318 |  |  | $ | 30,132 |  |  | $ | 45,919 |  |  | $ | 1,379 |  |  | $ | 77,430 |  |  | $ | 2,501,748 |

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The following tables detail the amortized cost of loans, by year of origination (for term loans) and by risk grade within each portfolio segment as of March 31, 2022. The current period originations may include modifications, extensions and renewals.

| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted to Term |  | Total
Farmland |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 8,397 |  |  | $ | 7,843 |  |  | $ | 1,637 |  |  | $ | 3,174 |  |  | $ | 3,509 |  |  | $ | 3,962 |  |  | $ | 310 |  |  | $ | 0 |  |  | $ | 28,832 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,503 |  |  | 0 |  |  | 0 |  |  | 1,503 |
Substandard | 0 |  |  | 388 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 576 |  |  | 0 |  |  | 0 |  |  | 964 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 8,397 |  |  | $ | 8,231 |  |  | $ | 1,637 |  |  | $ | 3,174 |  |  | $ | 3,509 |  |  | $ | 6,041 |  |  | $ | 310 |  |  | $ | 0 |  |  | $ | 31,299 |
Owner-occupied, nonfarm nonresidential properties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 44,624 |  |  | $ | 117,597 |  |  | $ | 77,014 |  |  | $ | 76,674 |  |  | $ | 27,642 |  |  | $ | 75,893 |  |  | $ | 13,745 |  |  | $ | 0 |  |  | $ | 433,189 |
Special mention | 0 |  |  | 240 |  |  | 0 |  |  | 896 |  |  | 4,239 |  |  | 1,326 |  |  | 10 |  |  | 0 |  |  | 6,711 |
Substandard | 505 |  |  | 161 |  |  | 401 |  |  | 2,117 |  |  | 832 |  |  | 4,264 |  |  | 0 |  |  | 0 |  |  | 8,280 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 45,129 |  |  | $ | 117,998 |  |  | $ | 77,415 |  |  | $ | 79,687 |  |  | $ | 32,713 |  |  | $ | 81,483 |  |  | $ | 13,755 |  |  | $ | 0 |  |  | $ | 448,180 |
Agricultural production and other loans to farmers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 129 |  |  | $ | 169 |  |  | $ | 99 |  |  | $ | 73 |  |  | $ | 195 |  |  | $ | 0 |  |  | $ | 711 |  |  | $ | 0 |  |  | $ | 1,376 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 129 |  |  | $ | 169 |  |  | $ | 99 |  |  | $ | 73 |  |  | $ | 195 |  |  | $ | 0 |  |  | $ | 711 |  |  | $ | 0 |  |  | $ | 1,376 |
Commercial and Industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 68,951 |  |  | $ | 271,679 |  |  | $ | 80,410 |  |  | $ | 23,658 |  |  | $ | 13,591 |  |  | $ | 18,850 |  |  | $ | 219,057 |  |  | $ | 0 |  |  | $ | 696,196 |
Special mention | 0 |  |  | 0 |  |  | 169 |  |  | 570 |  |  | 358 |  |  | 220 |  |  | 5,309 |  |  | 0 |  |  | 6,626 |
Substandard | 0 |  |  | 2,614 |  |  | 1,048 |  |  | 1,882 |  |  | 436 |  |  | 1,320 |  |  | 5,760 |  |  | 0 |  |  | 13,060 |
Doubtful(1) | 0 |  |  | 1,370 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,370 |
Total | $ | 68,951 |  |  | $ | 275,663 |  |  | $ | 81,627 |  |  | $ | 26,110 |  |  | $ | 14,385 |  |  | $ | 20,390 |  |  | $ | 230,126 |  |  | $ | 0 |  |  | $ | 717,252 |
Obligations (other than securities and leases) of states and political subdivisions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 8,080 |  |  | $ | 37,278 |  |  | $ | 16,379 |  |  | $ | 4,932 |  |  | $ | 14,765 |  |  | $ | 56,325 |  |  | $ | 4,656 |  |  | $ | 0 |  |  | $ | 142,415 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 8,080 |  |  | $ | 37,278 |  |  | $ | 16,379 |  |  | $ | 4,932 |  |  | $ | 14,765 |  |  | $ | 56,325 |  |  | $ | 4,656 |  |  | $ | 0 |  |  | $ | 142,415 |
Other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 0 |  |  | $ | 5,530 |  |  | $ | 4,775 |  |  | $ | 460 |  |  | $ | 2 |  |  | $ | 0 |  |  | $ | 2,674 |  |  | $ | 0 |  |  | $ | 13,441 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 0 |  |  | $ | 5,530 |  |  | $ | 4,775 |  |  | $ | 460 |  |  | $ | 2 |  |  | $ | 0 |  |  | $ | 2,674 |  |  | $ | 0 |  |  | $ | 13,441 |

(1) Consists of one loan relationship that was originated in 2015 and modified in 2021. The modification met the requirements to disclose the loan relationship as a new loan during the current period.
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| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted to Term |  | Total
Other construction loans and all land development and other land loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 60,426 |  |  | $ | 88,849 |  |  | $ | 141,261 |  |  | $ | 7,623 |  |  | $ | 9,188 |  |  | $ | 2,930 |  |  | $ | 6,648 |  |  | $ | 0 |  |  | $ | 316,925 |
Special mention | 0 |  |  | 1,508 |  |  | 0 |  |  | 644 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 2,152 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 77 |  |  | 0 |  |  | 77 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 60,426 |  |  | $ | 90,357 |  |  | $ | 141,261 |  |  | $ | 8,267 |  |  | $ | 9,188 |  |  | $ | 2,930 |  |  | $ | 6,725 |  |  | $ | 0 |  |  | $ | 319,154 |
Multifamily (5 or more) residential properties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 19,212 |  |  | $ | 73,560 |  |  | $ | 54,943 |  |  | $ | 30,179 |  |  | $ | 7,365 |  |  | $ | 39,516 |  |  | $ | 2,516 |  |  | $ | 0 |  |  | $ | 227,291 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 100 |  |  | 0 |  |  | 100 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 675 |  |  | 378 |  |  | 90 |  |  | 0 |  |  | 0 |  |  | 1,143 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 19,212 |  |  | $ | 73,560 |  |  | $ | 54,943 |  |  | $ | 30,854 |  |  | $ | 7,743 |  |  | $ | 39,606 |  |  | $ | 2,616 |  |  | $ | 0 |  |  | $ | 228,534 |
Non-owner occupied, nonfarm nonresidential properties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 149,254 |  |  | $ | 175,170 |  |  | $ | 61,746 |  |  | $ | 83,158 |  |  | $ | 50,639 |  |  | $ | 139,464 |  |  | $ | 8,572 |  |  | $ | 0 |  |  | $ | 668,003 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 423 |  |  | 992 |  |  | 5,462 |  |  | 450 |  |  | 0 |  |  | 7,327 |
Substandard | 0 |  |  | 818 |  |  | 0 |  |  | 2,291 |  |  | 1,656 |  |  | 16,364 |  |  | 2,115 |  |  | 0 |  |  | 23,244 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 149,254 |  |  | $ | 175,988 |  |  | $ | 61,746 |  |  | $ | 85,872 |  |  | $ | 53,287 |  |  | $ | 161,290 |  |  | $ | 11,137 |  |  | $ | 0 |  |  | $ | 698,574 |

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The following tables detail the amortized cost of loans, by year of origination (for term loans) and by risk grade within each portfolio segment as of December 31, 2021. The current period originations may include modifications, extensions and renewals.

| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted to Term |  | Total
Farmland |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 8,203 |  |  | $ | 1,690 |  |  | $ | 3,276 |  |  | $ | 3,547 |  |  | $ | 564 |  |  | $ | 3,545 |  |  | $ | 461 |  |  | $ | 0 |  |  | $ | 21,286 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 394 |  |  | 1,120 |  |  | 0 |  |  | 0 |  |  | 1,514 |
Substandard | 388 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 48 |  |  | 532 |  |  | 0 |  |  | 0 |  |  | 968 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 8,591 |  |  | $ | 1,690 |  |  | $ | 3,276 |  |  | $ | 3,547 |  |  | $ | 1,006 |  |  | $ | 5,197 |  |  | $ | 461 |  |  | $ | 0 |  |  | $ | 23,768 |
Owner-occupied, nonfarm nonresidential properties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 135,095 |  |  | $ | 78,068 |  |  | $ | 78,621 |  |  | $ | 29,100 |  |  | $ | 40,677 |  |  | $ | 50,079 |  |  | $ | 7,728 |  |  | $ | 0 |  |  | $ | 419,368 |
Special mention | 243 |  |  | 0 |  |  | 903 |  |  | 4,287 |  |  | 135 |  |  | 1,145 |  |  | 10 |  |  | 0 |  |  | 6,723 |
Substandard | 687 |  |  | 416 |  |  | 2,190 |  |  | 868 |  |  | 250 |  |  | 4,152 |  |  | 18 |  |  | 0 |  |  | 8,581 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 136,025 |  |  | $ | 78,484 |  |  | $ | 81,714 |  |  | $ | 34,255 |  |  | $ | 41,062 |  |  | $ | 55,376 |  |  | $ | 7,756 |  |  | $ | 0 |  |  | $ | 434,672 |
Agricultural production and other loans to farmers |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 211 |  |  | $ | 103 |  |  | $ | 76 |  |  | $ | 198 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 791 |  |  | $ | 0 |  |  | $ | 1,379 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 211 |  |  | $ | 103 |  |  | $ | 76 |  |  | $ | 198 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 791 |  |  | $ | 0 |  |  | $ | 1,379 |
Commercial and Industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 313,983 |  |  | $ | 84,815 |  |  | $ | 31,375 |  |  | $ | 16,577 |  |  | $ | 12,389 |  |  | $ | 6,777 |  |  | $ | 221,094 |  |  | $ | 0 |  |  | $ | 687,010 |
Special mention | 0 |  |  | 363 |  |  | 793 |  |  | 381 |  |  | 82 |  |  | 844 |  |  | 5,483 |  |  | 0 |  |  | 7,946 |
Substandard | 1,991 |  |  | 800 |  |  | 1,862 |  |  | 452 |  |  | 29 |  |  | 2,016 |  |  | 5,504 |  |  | 0 |  |  | 12,654 |
Doubtful(1) | 1,379 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,379 |
Total | $ | 317,353 |  |  | $ | 85,978 |  |  | $ | 34,030 |  |  | $ | 17,410 |  |  | $ | 12,500 |  |  | $ | 9,637 |  |  | $ | 232,081 |  |  | $ | 0 |  |  | $ | 708,989 |
Obligations (other than securities and leases) of states and political subdivisions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 36,853 |  |  | $ | 16,688 |  |  | $ | 8,774 |  |  | $ | 16,957 |  |  | $ | 20,071 |  |  | $ | 36,764 |  |  | $ | 4,780 |  |  | $ | 0 |  |  | $ | 140,887 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 36,853 |  |  | $ | 16,688 |  |  | $ | 8,774 |  |  | $ | 16,957 |  |  | $ | 20,071 |  |  | $ | 36,764 |  |  | $ | 4,780 |  |  | $ | 0 |  |  | $ | 140,887 |
Other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 5,851 |  |  | $ | 5,305 |  |  | $ | 552 |  |  | $ | 3 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 2,268 |  |  | $ | 0 |  |  | $ | 13,979 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 5,851 |  |  | $ | 5,305 |  |  | $ | 552 |  |  | $ | 3 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 2,268 |  |  | $ | 0 |  |  | $ | 13,979 |

(1) Consists of one loan relationship that was originated in 2015 and modified in 2021. The modification met the requirements to disclose the loan relationship as a new loan during the current period.
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| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted to Term |  | Total
Other construction loans and all land development and other land loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 98,406 |  |  | $ | 168,372 |  |  | $ | 8,752 |  |  | $ | 11,141 |  |  | $ | 853 |  |  | $ | 898 |  |  | $ | 5,681 |  |  | $ | 0 |  |  | $ | 294,103 |
Special mention | 1,500 |  |  | 0 |  |  | 650 |  |  | 0 |  |  | 2,071 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 4,221 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 29 |  |  | 439 |  |  | 0 |  |  | 77 |  |  | 0 |  |  | 545 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 99,906 |  |  | $ | 168,372 |  |  | $ | 9,402 |  |  | $ | 11,170 |  |  | $ | 3,363 |  |  | $ | 898 |  |  | $ | 5,758 |  |  | $ | 0 |  |  | $ | 298,869 |
Multifamily (5 or more) residential properties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 74,687 |  |  | $ | 55,663 |  |  | $ | 33,436 |  |  | $ | 7,937 |  |  | $ | 27,729 |  |  | $ | 12,882 |  |  | $ | 2,438 |  |  | $ | 0 |  |  | $ | 214,772 |
Special mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 100 |  |  | 0 |  |  | 0 |  |  | 100 |
Substandard | 0 |  |  | 6 |  |  | 682 |  |  | 379 |  |  | 204 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1,271 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 74,687 |  |  | $ | 55,669 |  |  | $ | 34,118 |  |  | $ | 8,316 |  |  | $ | 27,933 |  |  | $ | 12,982 |  |  | $ | 2,438 |  |  | $ | 0 |  |  | $ | 216,143 |
Non-owner occupied, nonfarm nonresidential properties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 194,800 |  |  | $ | 125,039 |  |  | $ | 84,943 |  |  | $ | 52,233 |  |  | $ | 42,714 |  |  | $ | 123,021 |  |  | $ | 8,784 |  |  | $ | 0 |  |  | $ | 631,534 |
Special mention | 0 |  |  | 0 |  |  | 428 |  |  | 1,004 |  |  | 189 |  |  | 5,556 |  |  | 2,451 |  |  | 0 |  |  | 9,628 |
Substandard | 826 |  |  | 0 |  |  | 2,305 |  |  | 1,662 |  |  | 4,638 |  |  | 12,134 |  |  | 335 |  |  | 0 |  |  | 21,900 |
Doubtful | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 195,626 |  |  | $ | 125,039 |  |  | $ | 87,676 |  |  | $ | 54,899 |  |  | $ | 47,541 |  |  | $ | 140,711 |  |  | $ | 11,570 |  |  | $ | 0 |  |  | $ | 663,062 |

The Corporation considers the performance of the loan portfolio and its impact on the allowance for credit losses. For 1-4 family construction, home equity lines of credit, residential mortgages secured by first liens, residential mortgages secured by junior liens, automobile, credit cards, other revolving credit plans and other consumer segments, the Corporation evaluates credit quality based on the performance status of the loan, which was previously presented, and by payment activity. Nonperforming loans include loans on nonaccrual status and loans past due over 89 days and still accruing interest.

| March 31, 2022 |  | December 31, 2021
| Performing |  | Nonperforming |  | Total |  | Performing |  | Nonperforming |  | Total
1-4 Family Construction | $ | 41,023 |  |  | $ | 0 |  |  | $ | 41,023 |  |  | $ | 37,822 |  |  | $ | 0 |  |  | $ | 37,822 |
Home equity lines of credit | 108,578 |  |  | 646 |  |  | 109,224 |  |  | 103,693 |  |  | 824 |  |  | 104,517 |
Residential Mortgages secured by first liens | 836,832 |  |  | 4,169 |  |  | 841,001 |  |  | 823,182 |  |  | 3,547 |  |  | 826,729 |
Residential Mortgages secured by junior liens | 57,770 |  |  | 139 |  |  | 57,909 |  |  | 56,542 |  |  | 147 |  |  | 56,689 |
Other revolving credit plans | 25,826 |  |  | 31 |  |  | 25,857 |  |  | 26,523 |  |  | 13 |  |  | 26,536 |
Automobile | 20,388 |  |  | 28 |  |  | 20,416 |  |  | 20,826 |  |  | 36 |  |  | 20,862 |
Other consumer | 49,040 |  |  | 477 |  |  | 49,517 |  |  | 49,118 |  |  | 558 |  |  | 49,676 |
Total loans | $ | 1,139,457 |  |  | $ | 5,490 |  |  | $ | 1,144,947 |  |  | $ | 1,117,706 |  |  | $ | 5,125 |  |  | $ | 1,122,831 |

23

Table of Contents
The following tables detail the amortized cost of loans, by year of origination (for term loans) and by payment activity within each portfolio segment as of March 31, 2022. The current period originations may include modifications, extensions and renewals.

| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted to Term |  | Total
1-4 Family Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 4,080 |  |  | $ | 27,925 |  |  | $ | 7,745 |  |  | $ | 835 |  |  | $ | 65 |  |  | $ | 0 |  |  | $ | 373 |  |  | $ | 0 |  |  | $ | 41,023 |
Nonperforming | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 4,080 |  |  | $ | 27,925 |  |  | $ | 7,745 |  |  | $ | 835 |  |  | $ | 65 |  |  | $ | 0 |  |  | $ | 373 |  |  | $ | 0 |  |  | $ | 41,023 |
Home equity lines of credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 8,012 |  |  | $ | 15,692 |  |  | $ | 14,214 |  |  | $ | 9,175 |  |  | $ | 9,375 |  |  | $ | 43,353 |  |  | $ | 8,757 |  |  | $ | 0 |  |  | $ | 108,578 |
Nonperforming | 0 |  |  | 0 |  |  | 0 |  |  | 10 |  |  | 9 |  |  | 627 |  |  | 0 |  |  | 0 |  |  | 646 |
Total | $ | 8,012 |  |  | $ | 15,692 |  |  | $ | 14,214 |  |  | $ | 9,185 |  |  | $ | 9,384 |  |  | $ | 43,980 |  |  | $ | 8,757 |  |  | $ | 0 |  |  | $ | 109,224 |
Residential mortgages secured by first lien |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 53,333 |  |  | $ | 226,195 |  |  | $ | 173,046 |  |  | $ | 105,694 |  |  | $ | 58,037 |  |  | $ | 216,969 |  |  | $ | 3,558 |  |  | $ | 0 |  |  | $ | 836,832 |
Nonperforming | 0 |  |  | 622 |  |  | 287 |  |  | 311 |  |  | 131 |  |  | 2,627 |  |  | 191 |  |  | 0 |  |  | 4,169 |
Total | $ | 53,333 |  |  | $ | 226,817 |  |  | $ | 173,333 |  |  | $ | 106,005 |  |  | $ | 58,168 |  |  | $ | 219,596 |  |  | $ | 3,749 |  |  | $ | 0 |  |  | $ | 841,001 |
Residential mortgages secured by junior liens |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 5,156 |  |  | $ | 19,712 |  |  | $ | 10,647 |  |  | $ | 6,391 |  |  | $ | 3,897 |  |  | $ | 11,560 |  |  | $ | 407 |  |  | $ | 0 |  |  | $ | 57,770 |
Nonperforming | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 139 |  |  | 0 |  |  | 0 |  |  | 139 |
Total | $ | 5,156 |  |  | $ | 19,712 |  |  | $ | 10,647 |  |  | $ | 6,391 |  |  | $ | 3,897 |  |  | $ | 11,699 |  |  | $ | 407 |  |  | $ | 0 |  |  | $ | 57,909 |
Other revolving credit plans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 1,220 |  |  | $ | 4,143 |  |  | $ | 4,069 |  |  | $ | 3,040 |  |  | $ | 2,434 |  |  | $ | 10,920 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 25,826 |
Nonperforming | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 17 |  |  | 14 |  |  | 0 |  |  | 0 |  |  | 31 |
Total | $ | 1,220 |  |  | $ | 4,143 |  |  | $ | 4,069 |  |  | $ | 3,040 |  |  | $ | 2,451 |  |  | $ | 10,934 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 25,857 |
Automobile |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 2,176 |  |  | $ | 6,374 |  |  | $ | 4,810 |  |  | $ | 3,942 |  |  | $ | 2,080 |  |  | $ | 1,006 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 20,388 |
Nonperforming | 0 |  |  | 0 |  |  | 12 |  |  | 12 |  |  | 4 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 28 |
Total | $ | 2,176 |  |  | $ | 6,374 |  |  | $ | 4,822 |  |  | $ | 3,954 |  |  | $ | 2,084 |  |  | $ | 1,006 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 20,416 |
Other consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 7,211 |  |  | $ | 26,170 |  |  | $ | 9,153 |  |  | $ | 3,733 |  |  | $ | 1,219 |  |  | $ | 1,554 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 49,040 |
Nonperforming | 0 |  |  | 257 |  |  | 113 |  |  | 35 |  |  | 12 |  |  | 60 |  |  | 0 |  |  | 0 |  |  | 477 |
Total | $ | 7,211 |  |  | $ | 26,427 |  |  | $ | 9,266 |  |  | $ | 3,768 |  |  | $ | 1,231 |  |  | $ | 1,614 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 49,517 |

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The following tables detail the amortized cost of loans, by year of origination (for term loans) and by payment activity within each portfolio segment as of December 31, 2021. The current period originations may include modifications, extensions and renewals.

| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving Loans Amortized Cost Basis |  | Revolving Loans Converted to Term |  | Total
1-4 Family Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 27,539 |  |  | $ | 9,137 |  |  | $ | 857 |  |  | $ | 66 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 223 |  |  | $ | 0 |  |  | $ | 37,822 |
Nonperforming | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 27,539 |  |  | $ | 9,137 |  |  | $ | 857 |  |  | $ | 66 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 223 |  |  | $ | 0 |  |  | $ | 37,822 |
Home equity lines of credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 14,383 |  |  | $ | 14,621 |  |  | $ | 9,564 |  |  | $ | 10,584 |  |  | $ | 6,863 |  |  | $ | 39,527 |  |  | $ | 8,151 |  |  | $ | 0 |  |  | $ | 103,693 |
Nonperforming | 0 |  |  | 0 |  |  | 9 |  |  | 10 |  |  | 377 |  |  | 428 |  |  | 0 |  |  | 0 |  |  | 824 |
Total | $ | 14,383 |  |  | $ | 14,621 |  |  | $ | 9,573 |  |  | $ | 10,594 |  |  | $ | 7,240 |  |  | $ | 39,955 |  |  | $ | 8,151 |  |  | $ | 0 |  |  | $ | 104,517 |
Residential mortgages secured by first lien |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 232,606 |  |  | $ | 178,380 |  |  | $ | 111,333 |  |  | $ | 62,850 |  |  | $ | 74,136 |  |  | $ | 160,402 |  |  | $ | 3,475 |  |  | $ | 0 |  |  | $ | 823,182 |
Nonperforming | 79 |  |  | 259 |  |  | 227 |  |  | 151 |  |  | 258 |  |  | 2,379 |  |  | 194 |  |  | 0 |  |  | 3,547 |
Total | $ | 232,685 |  |  | $ | 178,639 |  |  | $ | 111,560 |  |  | $ | 63,001 |  |  | $ | 74,394 |  |  | $ | 162,781 |  |  | $ | 3,669 |  |  | $ | 0 |  |  | $ | 826,729 |
Residential mortgages secured by junior liens |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 20,617 |  |  | $ | 11,256 |  |  | $ | 7,239 |  |  | $ | 4,407 |  |  | $ | 3,508 |  |  | $ | 9,095 |  |  | $ | 420 |  |  | $ | 0 |  |  | $ | 56,542 |
Nonperforming | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 84 |  |  | 63 |  |  | 0 |  |  | 0 |  |  | 147 |
Total | $ | 20,617 |  |  | $ | 11,256 |  |  | $ | 7,239 |  |  | $ | 4,407 |  |  | $ | 3,592 |  |  | $ | 9,158 |  |  | $ | 420 |  |  | $ | 0 |  |  | $ | 56,689 |
Other revolving credit plans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 5,313 |  |  | $ | 3,596 |  |  | $ | 3,090 |  |  | $ | 2,592 |  |  | $ | 2,977 |  |  | $ | 8,955 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 26,523 |
Nonperforming | 0 |  |  | 0 |  |  | 4 |  |  | 4 |  |  | 0 |  |  | 5 |  |  | 0 |  |  | 0 |  |  | 13 |
Total | $ | 5,313 |  |  | $ | 3,596 |  |  | $ | 3,094 |  |  | $ | 2,596 |  |  | $ | 2,977 |  |  | $ | 8,960 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 26,536 |
Automobile |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 7,047 |  |  | $ | 5,448 |  |  | $ | 4,668 |  |  | $ | 2,457 |  |  | $ | 682 |  |  | $ | 524 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 20,826 |
Nonperforming | 11 |  |  | 13 |  |  | 12 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 36 |
Total | $ | 7,058 |  |  | $ | 5,461 |  |  | $ | 4,680 |  |  | $ | 2,457 |  |  | $ | 682 |  |  | $ | 524 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 20,862 |
Other consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 30,423 |  |  | $ | 11,017 |  |  | $ | 4,537 |  |  | $ | 1,451 |  |  | $ | 316 |  |  | $ | 1,374 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 49,118 |
Nonperforming | 204 |  |  | 170 |  |  | 96 |  |  | 25 |  |  | 3 |  |  | 60 |  |  | 0 |  |  | 0 |  |  | 558 |
Total | $ | 30,627 |  |  | $ | 11,187 |  |  | $ | 4,633 |  |  | $ | 1,476 |  |  | $ | 319 |  |  | $ | 1,434 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 49,676 |

| March 31, 2022 |  | December 31, 2021
Credit card |  |  |
Payment performance |  |  |
Performing | $ | 10,926 |  |  | $ | 9,912 |
Nonperforming | 11 |  |  | 23 |
Total | $ | 10,937 |  |  | $ | 9,935 |

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Holiday’s loan portfolio, included in other consumer loans above, is summarized as follows at March 31, 2022 and December 31, 2021:

| March 31, 2022 |  | December 31, 2021
Gross other consumer | $ | 28,424 |  |  | $ | 29,227 |
Less: other consumer unearned discounts | (5,390) |  |  | (5,716) |
Total automobile and other consumer loans, net of unearned discounts | $ | 23,034 |  |  | $ | 23,511 |

5. LEASES
Operating lease assets represent the Corporation's right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the lease commencement date. Operating lease cost, which is comprised of amortization of the operating lease asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in net occupancy expense in the condensed consolidated statements of income.
The Corporation leases certain full-service branch offices, land and equipment. Leases with an initial term of twelve months or less are not recorded on the balance sheet. Most leases include one or more options to renew and the exercise of the lease renewal options are at the Corporation's sole discretion. The Corporation includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Corporation will exercise the option. Certain lease agreements of the Corporation include rental payments adjusted periodically for changes in the consumer price index.

Leases |  | Classification |  | March 31, 2022 |  | December 31, 2021
Assets: |  |  |  |  |  |
Operating lease assets |  | Operating lease assets |  | $ | 25,698 |  |  | $ | 19,928 |
Finance lease assets |  | Premises and equipment, net (1) |  | 340 |  |  | 358 |
Total leased assets |  |  |  | $ | 26,038 |  |  | $ | 20,286 |
Liabilities: |  |  |  |  |  |
Operating lease liabilities |  | Operating lease liabilities |  | $ | 26,955 |  |  | $ | 21,159 |
Finance lease liabilities |  | Accrued interest payable and other liabilities |  | 448 |  |  | 469 |
Total leased liabilities |  |  |  | $ | 27,403 |  |  | $ | 21,628 |

(1) Finance lease assets are recorded net of accumulated amortization of $876 thousand as of March 31, 2022 and $858 thousand as of December 31, 2021.
The components of the Corporation's net lease expense for the three months ended March 31, 2022 and 2021, respectively, were as follows:

|  |  |  | Three months ended March 31, |  |
Lease Cost |  | Classification |  | 2022 |  | 2021 |  |  |  |
Operating lease cost |  | Net occupancy expense |  | $ | 492 |  |  | $ | 440 |  |  |  |  |
Variable lease cost |  | Net occupancy expense |  | 13 |  |  | 17 |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |  |
Amortization of leased assets |  | Net occupancy expense |  | 18 |  |  | 18 |  |  |  |  |
Interest on lease liabilities |  | Interest expense - borrowed funds |  | 5 |  |  | 6 |  |  |  |  |
Sublease income (1) |  | Net occupancy expense |  | (17) |  |  | (19) |  |  |  |  |
Net lease cost |  |  |  | $ | 511 |  |  | $ | 462 |  |  |  |  |

(1) Sublease income excludes rental income from owned properties.
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The following table sets forth future minimum rental payments under noncancellable leases with initial terms in excess of one year as of March 31, 2022:

Maturity of Lease Liabilities as of March 31, 2022 |  | Operating Leases (1) |  | Finance Leases |  | Total
2022 |  | $ | 1,487 |  |  | $ | 79 |  |  | $ | 1,566 |
2023 |  | 1,919 |  |  | 105 |  |  | 2,024 |
2024 |  | 1,880 |  |  | 105 |  |  | 1,985 |
2025 |  | 1,873 |  |  | 105 |  |  | 1,978 |
2026 |  | 1,845 |  |  | 105 |  |  | 1,950 |
After 2026 |  | 30,620 |  |  | 0 |  | 30,620 |
Total lease payments |  | 39,624 |  |  | 499 |  |  | 40,123 |
Less: Interest |  | 12,669 |  |  | 51 |  |  | 12,720 |
Present value of lease liabilities |  | $ | 26,955 |  |  | $ | 448 |  |  | $ | 27,403 |

(1) Operating lease payments include payments related to options to extend lease terms that are reasonably certain of being exercised and exclude $6.6 million of legally binding minimum lease payments for leases signed, but not yet commenced.
Lease terms and discount rates related to the Corporation's lease liabilities as of March 31, 2022 and December 31, 2021 were as follows:

Lease Term and Discount Rate |  | March 31, 2022 |  | December 31, 2021
Weighted-average remaining lease term (years) |  |  |  |
Operating leases |  | 22.3 |  | 18.8
Finance leases |  | 4.7 |  | 5.0
Weighted-average discount rate |  |  |  |
Operating leases |  | 3.42 | % |  | 3.42 | %
Finance leases |  | 4.49 | % |  | 4.49 | %

Other information related to the Corporation's lease liabilities as of March 31, 2022 and 2021 was as follows:

Other Information |  | March 31, 2022 |  | March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |
Operating cash flows from operating leases |  | $ | 283 |  |  | $ | 223 |

6. DEPOSITS
The following table reflects time certificates of deposit accounts included in total deposits and their remaining maturities at March 31, 2022:

Time deposits maturing: |
2022 | $ | 181,812 |
2023 | 63,261 |
2024 | 36,771 |
2025 | 33,731 |
2026 | 7,839 |
Thereafter | 14,525 |
| $ | 337,939 |

Certificates of deposits of $250 thousand or more totaled $102.1 million and $116.6 million at March 31, 2022 and December 31, 2021, respectively.
The Corporation had $37.2 million and $52.9 million in reciprocal ICS deposits at March 31, 2022 and December 31, 2021, respectively.
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7. BORROWINGS
At March 31, 2022 and December 31, 2021, the Corporation had available one $10.0 million unsecured line of credit with an unaffiliated institution. Borrowings under the line of credit bear interest at a variable rate equal to three-month LIBOR plus 2.75%. There were no borrowings under the line of credit at March 31, 2022 and December 31, 2021.
FHLB Borrowings
The Bank has the ability to borrow funds from the Federal Home Loan Bank ("FHLB"). The Bank maintains a $150.0 million line-of-credit (Open Repo Plus) with the FHLB which is a revolving term commitment available on an overnight basis. The term of this commitment may not exceed 364 days and it reprices daily at market rates. Under terms of a blanket collateral agreement with the FHLB, the line-of-credit and long term advances are secured by FHLB stock and the Bank pledges its single-family residential mortgage loan portfolio, certain commercial real estate loans, and certain agriculture real estate loans as security for any advances.
Total loans pledged to the FHLB at March 31, 2022, and December 31, 2021, were $1.4 billion and $1.3 billion, respectively. The Bank could obtain advances of up to approximately $990.3 million from the FHLB at March 31, 2022 and $932.7 million at December 31, 2021.
At March 31, 2022 and December 31, 2021, the Bank had no advances from the FHLB.
At March 31, 2022 and December 31, 2021, municipal deposit letters of credit issued by the FHLB on behalf of the Bank naming applicable municipalities as beneficiaries were $10.4 million and $10.4 million, respectively. The letters of credit were utilized in place of securities pledged to the municipalities for their deposits maintained at the Bank.
Other Borrowings
At March 31, 2022 and December 31, 2021, the Bank had no outstanding borrowings from unaffiliated institutions under overnight borrowing agreements.
Subordinated Debentures
In 2007, the Corporation issued two $10.0 million floating rate trust preferred securities as part of a pooled offering of such securities. The interest rate on each offering is determined quarterly and floats based on the three-month LIBOR plus 1.55%. The all-in rate was 2.38% at March 31, 2022 and 1.75% at December 31, 2021. The Corporation issued subordinated debentures to the trusts in exchange for the proceeds of the offerings, which debentures represent the sole assets of the trusts. The subordinated debentures must be redeemed no later than 2037. The Corporation may redeem the debentures, in whole or in part, at face value at any time. The Corporation has the option to defer interest payments from time to time for a period not to exceed five consecutive years. Although the trusts are variable interest entities, the Corporation is not the primary beneficiary. As a result, because the trusts are not consolidated with the Corporation, the Corporation does not report the securities issued by the trusts as liabilities. Instead, the Corporation reports as liabilities the subordinated debentures issued by the Corporation and held by the trusts, since the liabilities are not eliminated in consolidation. The trust preferred securities were designated to qualify as Tier 1 capital under the Federal Reserve’s capital guidelines.
Subordinated Notes
In June 2021, the Corporation sold $85.0 million aggregate principal amount of its fixed-to-floating rate subordinated notes to eligible purchasers in a private offering in reliance on the exemption from the registration requirements of Section 4(a)(2) of the Securities Act and the provisions of Rule 506 of Regulation D thereunder. The notes will mature in June 2031, and initially bear interest at a fixed rate of 3.25% per annum, payable semi-annually in arrears, to, but excluding, June 15, 2026, and thereafter to, but excluding, the maturity date or earlier redemption, the interest rate will reset quarterly to an interest rate per annum equal to the then current three-month average Secured Overnight Financing Rate plus 2.58%. The net proceeds from the sale were approximately $83.5 million, after deducting offering expenses. These subordinated notes were designed to qualify as Tier 2 capital under the Federal Reserve’s capital guidelines and were given an investment grade rating of BBB- by Kroll Bond Rating Agency. The unamortized debt issuance costs were $1.3 million as of March 31, 2022 and December 31, 2021.
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8. OFF-BALANCE SHEET COMMITMENTS AND CONTINGENCIES
Financial Instruments with Off-Balance Sheet Risk
Loan commitments are made to accommodate the financial needs of the Corporation’s customers commitments that result in market risk. Standby letters of credit commit the Corporation to make payments on behalf of customers when certain specified future events occur. They primarily are issued to facilitate customers’ trade transactions.
Both arrangements have credit risk, essentially the same as that involved in extending loans to customers, and are subject to the Corporation’s normal credit policies. Collateral is obtained based on a credit assessment of the customer.
The Corporation's maximum obligation to extend credit for loan commitments (unfunded loans and unused lines of credit) and standby letters of credit outstanding as of March 31, 2022 and December 31, 2021 were as follows:

| March 31, 2022 |  | December 31, 2021
| Fixed Rate |  | Variable Rate |  | Fixed Rate |  | Variable Rate
Commitments to make loans | $ | 88,515 |  |  | $ | 398,927 |  |  | $ | 94,924 |  |  | $ | 323,013 |
Unused lines of credit | 24,222 |  |  | 688,489 |  |  | 13,265 |  |  | 663,903 |
Standby letters of credit | 15,267 |  |  | 1,621 |  |  | 15,063 |  |  | 1,623 |

Commitments to make loans are generally made for periods of 60 days or less.
Other Off-Balance Sheet Commitments
The Corporation makes investments in limited partnerships, including certain small business investment corporations and low income housing partnerships. Capital contributions for investments in small business companies ("SBIC") and other limited partnerships, reported in FHLB and other equity interests on the condensed consolidated balance sheet, as of March 31, 2022 and December 31, 2021 were $14.9 million and $14.5 million, respectively. Unfunded capital commitments in investments in SBIC's and other limited partnerships totaled $7.6 million and $8.0 million as of March 31, 2022 and December 31, 2021, respectively. These investments are accounted for under the equity method of accounting.
The carrying value of investments in the low income housing partnerships, reported in FHLB and other equity interests on the consolidated balance sheet, as of March 31, 2022 and December 31, 2021 were $5.1 million and $5.3 million, respectively. The related amortization for the three months ended March 31, 2022 and March 31, 2021 were $198 thousand and $189 thousand, respectively. Unfunded commitments, reported in accrued interest payable and other liabilities on the condensed consolidated balance sheets, as of March 31, 2022 and December 31, 2021 were $1.4 million and $2.1 million, respectively.
Allowance for Credit Losses on Unfunded Loan Commitments
The Corporation maintains an allowance for credit losses on unfunded commercial lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses for loans, modified to take into account the probability of a draw-down on the commitment. The provision for credit losses on unfunded loan commitments is included in the provision for credit losses on the Corporation's condensed consolidated statements of income. The allowance for unfunded commitments is included in other liabilities in the condensed consolidated balance sheets. Note 4, "Loans and Allowance for Credit Losses," in the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to the loan portfolio of the Corporation.
The following table presents activity in the allowance for credit losses on unfunded loan commitments for the three months ended Mach 31, 2022 and 2021, respectively:

| Three Months Ended
| March 31,
| 2022 |  | 2021
Beginning balance | $ | 0 |  |  | $ | 0 |
Provision for credit losses on unfunded loan commitments (1) | 586 |  |  | 0 |
Ending balance | $ | 586 |  |  | $ | 0 |

(1) Excludes provision for credit losses related to the loan portfolio.
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Litigation
The Corporation is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Corporation.
9. STOCK COMPENSATION
The Corporation has a stock incentive plan, which is administered by a committee of the Board of Directors and which permits the Corporation to provide various types of stock-based compensation to its key employees, directors, and/or consultants, including time-based and performance-based shares of restricted stock. The Corporation maintains the CNB Financial Corporation 2019 Omnibus Incentive Plan (the "2019 Stock Incentive Plan"), which was approved by the Corporation’s shareholders and became effective on April 16, 2019.
The 2019 Stock Incentive Plan provides for up to 507,671 shares of common stock to be awarded in the form of nonqualified options or restricted stock. For key employees, the vesting of time-based restricted stock is one-third, one-fourth, or one-fifth of the granted restricted shares per year, beginning one year after the grant date, with 100% vesting on the third, fourth or fifth anniversary of the grant date, respectively. Prior to 2018, for non-employee directors, the vesting schedule was one-third of the granted restricted shares per year, beginning one year after the grant date, with 100% vested on the third anniversary of the grant date. Beginning in 2018, stock compensation received by non-employee directors vests immediately.
At March 31, 2022, there was no unrecognized compensation cost related to stock-based compensation awarded under this plan and, except for the time-based and performance-based restricted stock awards disclosed below and in previous filings, no other stock-based compensation was granted during the three month period ended March 31, 2022 and 2021.
Compensation expense for the restricted stock awards is recognized over the requisite service period based on the fair value of the shares at the date of grant on a straight-line basis. Non-vested restricted stock awards are recorded as a reduction of additional paid-in-capital in shareholders’ equity until earned. Compensation expense resulting from time-based, performance-based and director restricted stock awards was $501 thousand for the three months ended March 31, 2022 and $509 thousand for the three months ended March 31, 2021. The total income tax benefit related to the recognized compensation cost of vested restricted stock awards was $105 thousand and $107 thousand for the three months ended March 31, 2022 and 2021, respectively.
A summary of changes in time-based unvested restricted stock awards for the three months ended March 31, 2022 follows:

| Shares |  | Per Share Weighted Average Grant Date Fair Value
Unvested at beginning of period | 69,643 |  |  | $ | 24.18 |
Granted | 44,369 |  |  | 26.71 |
Vested | (25,121) |  |  | 24.78 |
Unvested at end of period | 88,891 |  |  | $ | 20.10 |

The above table excludes 11,790 shares in restricted stock awards that were granted at a weighted average fair value of $26.71 and immediately vested. As of March 31, 2022 and December 31, 2021, there was $2.1 million and $1.1 million of total unrecognized compensation cost related to unvested restricted stock awards, respectively. The fair value of shares vested was $985 thousand during the three months ended March 31, 2022 and $786 thousand during the three months ended March 31, 2021.
In addition to the time-based restricted stock disclosed above, the Corporation’s Board of Directors grants performance-based restricted stock awards (“PBRSAs”) to key employees. The number of PBRSAs will depend on certain performance conditions earned over a three year period and are also subject to service-based vesting. In 2022, awards with a maximum of 13,761 shares in aggregate were granted to key employees. In 2021, awards with a maximum of 18,210 shares in aggregate were granted to key employees. In 2020, awards with a maximum of 18,100 shares in aggregate were granted to key employees.
In 2021, the 2019 PBRSAs were fully earned and in 2022, 11,895 shares were fully distributed. The fair value of the shares distributed in 2022 was $318 thousand.
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10. EARNINGS PER COMMON SHARE
Basic earnings per common share is computed by dividing net income, excluding net earnings allocated to participating securities, by the weighted average number of shares outstanding during the applicable period, excluding outstanding participating securities. Diluted earnings per common share is computed using the weighted average number of shares determined for the basic computation plus the dilutive effect of potential common shares issuable under certain stock compensation plans. For the three months ended March 31, 2022 and 2021, there were no outstanding stock options to include in the diluted earnings per common share calculations.
Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per common share pursuant to the two-class method. The Corporation has determined that its outstanding unvested time-based stock awards are participating securities.
The computation of basic and diluted earnings per common share is shown below:

| Three months ended March 31, |  |
| 2022 |  | 2021 |  |  |  |
Basic earnings per common share computation: |  |  |  |  |  |  |
Net income per condensed consolidated statements of income | $ | 14,170 |  |  | $ | 13,106 |  |  |  |  |
Net earnings allocated to participating securities | (63) |  |  | (45) |  |  |  |  |
Net earnings allocated to common stock | $ | 14,107 |  |  | $ | 13,061 |  |  |  |  |
Distributed earnings allocated to common stock | $ | 2,944 |  |  | $ | 2,859 |  |  |  |  |
Undistributed earnings allocated to common stock | 11,163 |  |  | 10,202 |  |  |  |  |
Net earnings allocated to common stock | $ | 14,107 |  |  | $ | 13,061 |  |  |  |  |
Weighted average common shares outstanding, including shares considered participating securities | 16,883 |  |  | 16,855 |  |  |  |  |
Less: Average participating securities | (72) |  |  | (56) |  |  |  |  |
Weighted average shares | 16,811 |  |  | 16,799 |  |  |  |  |
Basic earnings per common share | $ | 0.84 |  |  | $ | 0.78 |  |  |  |  |
Diluted earnings per common share computation: |  |  |  |  |  |  |
Net earnings allocated to common stock | $ | 14,107 |  |  | $ | 13,061 |  |  |  |  |
Weighted average common shares outstanding for basic earnings per common share | 16,811 |  |  | 16,799 |  |  |  |  |
Add: Dilutive effects of performance based-shares | 33 |  |  | 0 |  |  |  |  |
Weighted average shares and dilutive potential common shares | 16,844 |  |  | 16,799 |  |  |  |  |
Diluted earnings per common share | $ | 0.84 |  |  | $ | 0.78 |  |  |  |  |

11. DERIVATIVE INSTRUMENTS
On September 7, 2018, the Corporation executed an interest rate swap agreement with a 5-year term and an effective date of September 15, 2018 in order to hedge cash flows associated with $10.0 million of a subordinated trust preferred security that was issued by the Corporation during 2007 and elected cash flow hedge accounting for the agreement. The Corporation’s objective in using this derivative is to add stability to interest expense and to manage its exposure to interest rate risk. The interest rate swap involves the receipt of variable-rate amounts in exchange for fixed-rate payments from September 15, 2018 to September 15, 2023 without the exchange of the underlying notional amount. At March 31, 2022, the variable rate on the subordinated trust preferred security was 2.38% (LIBOR plus 155 basis points) and the Corporation was paying 4.53% (2.98% fixed rate plus 155 basis points).
As of March 31, 2022 and December 31, 2021, no derivatives were designated as fair value hedges or hedges of net investments in foreign operations. Additionally, the Corporation does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges.
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The following tables provide information about the amounts and locations of activity related to the interest rate swaps designated as cash flow hedges within the Corporation’s condensed consolidated balance sheets and statements of income as of March 31, 2022 and December 31, 2021 and for the three months ended March 31, 2022 and 2021:

|  |  | Fair value as of
| Balance Sheet Location |  | March 31, 2022 |  | December 31, 2021
Interest rate contracts | Accrued interest and other liabilities |  | $ | (120) |  |  | $ | (388) |

For the Three Months Ended March 31, 2022 | (a) |  | (b) |  | (c) |  | (d) |  | (e)
Interest rate contracts | $ | 212 |  |  | Interest expense – subordinated notes and debentures |  | $ | (67) |  |  | Other income |  | $ | 0 |
For the Three Months Ended March 31, 2021 | (a) |  | (b) |  | (c) |  | (d) |  | (e)
Interest rate contracts | $ | 84 |  |  | Interest expense – subordinated notes and debentures |  | $ | (69) |  |  | Other income |  | $ | 0 |

(a)Amount of Gain or (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion), net of tax
(b)Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
(c)Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
(d)Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(e)Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Amounts reported in accumulated other comprehensive income (loss) related to the interest rate swap will be reclassified to interest expense as interest payments are made on the subordinated notes and debentures. Such amounts reclassified from accumulated other comprehensive income (loss) to interest expense in the next twelve months are expected to be $215 thousand.
As of March 31, 2022 and December 31, 2021, a cash collateral balance in the amount of $1.1 million and $1.1 million, respectively, was maintained with a counterparty to the interest rate swaps. These balances are included in interest bearing deposits with other banks on the condensed consolidated balance sheets.
The Corporation entered into certain interest rate swap contracts that are not designated as hedging instruments. These derivative contracts relate to transactions in which the Corporation enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each swap transaction, the Corporation agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. Concurrently, the Corporation agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the Corporation’s customers to effectively convert a variable rate loan to a fixed rate. Because the Corporation acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts offset each other and do not impact the Corporation’s results of operations.
The Corporation pledged cash collateral to another financial institution with a balance $3.4 million as of March 31, 2022 and $3.4 million as of December 31, 2021. This balance is included in interest bearing deposits with other banks on the condensed consolidated balance sheets. The Corporation may require its customers to post cash or securities as collateral on its program of back-to-back swaps depending upon the specific facts and circumstances surrounding each loan and individual swap. In addition, certain language is included in the International Swaps and Derivatives Association agreement and loan documents where, in default situations, the Corporation is permitted to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. The Corporation may be required to post additional collateral to swap counterparties in the future in proportion to potential increases in unrealized loss positions.
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The following table provides information about the amounts and locations of activity related to the back-to-back interest rate swaps within the Corporation’s condensed consolidated balance sheet as of March 31, 2022 and December 31, 2021:

| Notional Amount |  | Weighted Average Maturity (in years) |  | Weighted Average Fixed Rate |  | Weighted Average Variable Rate |  | Fair Value |  |
March 31, 2022 |  |  |  |  |  |  |  |  |  |  |
3rd Party interest rate swaps | $ | 32,432 |  |  | 5.7 |  | 4.12 | % |  | 1 month LIBOR + 2.27% |  | $ | 391 |  |  | (a)
Customer interest rate swaps | (32,432) |  |  | 5.7 |  | 4.12 | % |  | 1 month LIBOR + 2.27% |  | (391) |  |  | (b)
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
3rd Party interest rate swaps | $ | 32,768 |  |  | 5.8 |  | 4.12 | % |  | 1 month LIBOR + 2.27% |  | $ | 2,124 |  |  | (a)
Customer interest rate swaps | (32,768) |  |  | 5.8 |  | 4.12 | % |  | 1 month LIBOR + 2.27% |  | (2,124) |  |  | (b)

(a)Reported in accrued interest receivable and other assets within the condensed consolidated balance sheets
(b)Reported in accrued interest payable and other liabilities within the condensed consolidated balance sheets
12. FAIR VALUE
Fair Value Measurement
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The following three levels of inputs are used to measure fair value:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The Corporation used the following methods and significant assumptions to estimate fair value:
Investment Securities: The fair values of most equity securities and debt securities AFS are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather relying on the securities’ relationship to other benchmark quoted securities (Level 2). These models utilize the market approach with standard inputs that include, but are not limited to benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. For certain securities that observable inputs about the specific issuer are not available, fair values are estimated using observable data from other securities presumed to be similar or other market data on other similar securities (Level 3).
Loans Held for Sale: Loans held for sale are carried at the lower of cost or fair value, which is evaluated on a loan-level basis. The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan or other observable market data, such as outstanding commitments from third party investors (Level 2).
Derivatives: The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). The Corporation's derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.
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Individually Evaluated Loans: The fair value of individually evaluated loans with specific allocations of the allowance for credit losses is generally based on recent real estate appraisals prepared by third-parties. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Management also adjusts appraised values based on the length of time that has passed since the appraisal date and other factors. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower's financial statements, or aging reports, adjusted or discounted based on management's historical knowledge, changes in market conditions from the time of the valuation, and management's expertise and knowledge of the client and client's business, resulting in a Level 3 fair value classification. Individually evaluated loans are evaluated on a quarterly basis for additional impairment and adjusted in accordance with the allowance policy.
Assets and liabilities measured at fair value on a recurring basis are as follows at March 31, 2022 and December 31, 2021:

|  |  | Fair Value Measurements at March 31, 2022 Using:
|  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
Description | Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets: |  |  |  |  |  |  |
Securities Available-For-Sale: |  |  |  |  |  |  |
U.S. Government sponsored entities | $ | 1,796 |  |  | $ | 0 |  |  | $ | 1,796 |  |  | $ | 0 |
States and political subdivisions | 105,864 |  |  | 0 |  |  | 105,864 |  |  | 0 |
Residential and multi-family mortgage | 380,537 |  |  | 0 |  |  | 380,537 |  |  | 0 |
Corporate notes and bonds | 34,154 |  |  | 0 |  |  | 34,154 |  |  | 0 |
Pooled SBA | 17,211 |  |  | 0 |  |  | 17,211 |  |  | 0 |
Total Securities Available-For-Sale | $ | 539,562 |  |  | $ | 0 |  |  | $ | 539,562 |  |  | $ | 0 |
Interest Rate swaps | $ | 391 |  |  | $ | 0 |  |  | $ | 391 |  |  | $ | 0 |
Equity Securities: |  |  |  |  |  |  |
Corporate equity securities | $ | 6,484 |  |  | $ | 6,484 |  |  | $ | 0 |  |  | $ | 0 |
Mutual funds | 2,383 |  |  | 2,383 |  |  | 0 |  |  | 0 |
Certificates of deposit | 663 |  |  | 663 |  |  | 0 |  |  | 0 |
Corporate notes and bonds | 562 |  |  | 562 |  |  | 0 |  |  | 0 |
Total Trading Securities | $ | 10,092 |  |  | $ | 10,092 |  |  | $ | 0 |  |  | $ | 0 |
Liabilities: |  |  |  |  |  |  |
Interest rate swaps | $ | (511) |  |  | $ | 0 |  |  | $ | (511) |  |  | $ | 0 |

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|  |  | Fair Value Measurements at December 31, 2021 Using:
|  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
Description | Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets: |  |  |  |  |  |  |
Securities Available-For-Sale: |  |  |  |  |  |  |
U.S. Government sponsored entities | $ | 111,748 |  |  | $ | 0 |  |  | $ | 111,748 |  |  | $ | 0 |
States and political subdivisions | 103,712 |  |  | 0 |  |  | 103,712 |  |  | 0 |
Residential and multi-family mortgage | 434,635 |  |  | 4,995 |  |  | 429,640 |  |  | 0 |
Corporate notes and bonds | 28,064 |  |  | 0 |  |  | 28,064 |  |  | 0 |
Pooled SBA | 19,032 |  |  | 0 |  |  | 19,032 |  |  | 0 |
Total Securities Available-For-Sale | $ | 697,191 |  |  | $ | 4,995 |  |  | $ | 692,196 |  |  | $ | 0 |
Interest Rate swaps | $ | 2,124 |  |  | $ | 0 |  |  | $ | 2,124 |  |  | $ | 0 |
Equity Securities: |  |  |  |  |  |  |
Corporate equity securities | $ | 6,715 |  |  | $ | 6,715 |  |  | $ | 0 |  |  | $ | 0 |
Mutual funds | 2,566 |  |  | 2,566 |  |  | 0 |  |  | 0 |
Certificates of deposit | 506 |  |  | 506 |  |  | 0 |  |  | 0 |
Corporate notes and bonds | 579 |  |  | 579 |  |  | 0 |  |  | 0 |
Total Trading Securities | $ | 10,366 |  |  | $ | 10,366 |  |  | $ | 0 |  |  | $ | 0 |
Liabilities: |  |  |  |  |  |  |
Interest rate swaps | $ | (2,512) |  |  | $ | 0 |  |  | $ | (2,512) |  |  | $ | 0 |

The table below presents a reconciliation of the fair value of securities AFS measured on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2021:

| States and Political Subdivisions |  | Corporate Notes and Bonds
Balance, January 1, 2021 | $ | 64 |  |  | $ | 0 |
Purchases | 0 |  |  | 750 |
Total gains or (losses): |  |  |
Included in other comprehensive income (loss) | 0 |  |  | 0 |
Settlements | (64) |  |  | 0 |
Transfers into Level 3 | 0 |  |  | 1,500 |
Transfers out of Level 3 | $ | 0 |  |  | $ | 0 |
Balance, March 31, 2021 | $ | 0 |  |  | $ | 2,250 |

The Corporation's corporate notes and bonds with a fair value of $1.5 million for the three months ended March 31, 2021 were transferred out of Level 3 and into Level 2 because of available observable market data for these investments.
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Assets and liabilities measured at fair value on a non-recurring basis are as follows at March 31, 2022 and December 31, 2021:

|  |  | Fair Value Measurements at March 31, 2022 Using
Description | Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Collateral-dependent loans: |  |  |  |  |  |  |
Farmland | $ | 920 |  |  | 0 |  |  | 0 |  |  | $ | 920 |
Owner-occupied, nonfarm nonresidential properties | 185 |  |  | 0 |  |  | 0 |  |  | 185 |
Commercial and industrial | 3,008 |  |  | 0 |  |  | 0 |  |  | 3,008 |
Multifamily (5 or more) residential properties | 544 |  |  | 0 |  |  | 0 |  |  | 544 |
Non-owner occupied, nonfarm nonresidential | 2,792 |  |  | 0 |  |  | 0 |  |  | 2,792 |
Residential Mortgages secured by first liens | 650 |  |  | 0 |  |  | 0 |  |  | 650 |

|  |  | Fair Value Measurements at December 31, 2021 Using
Description | Total |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Collateral-dependent loans: |  |  |  |  |  |  |
Farmland | $ | 920 |  |  | 0 |  |  | 0 |  |  | $ | 920 |
Owner-occupied, nonfarm nonresidential properties | 194 |  |  | 0 |  |  | 0 |  |  | 194 |
Commercial and industrial | 3,102 |  |  | 0 |  |  | 0 |  |  | 3,102 |
Other construction loans and all land development loans and other land loans | 248 |  |  | 0 |  |  | 0 |  |  | 248 |
Multifamily (5 or more) residential properties | 627 |  |  | 0 |  |  | 0 |  |  | 627 |
Non-owner occupied, nonfarm nonresidential | 2,889 |  |  | 0 |  |  | 0 |  |  | 2,889 |

A loan is considered to be a collateral dependent loan when, based on current information and events, the Corporation expects repayment of the financial assets to be provided substantially through the operation or sale of the collateral and the Corporation has determined that the borrower is experiencing financial difficulty as of the measurement date. The allowance for credit losses is measured by estimating the fair value of the loan based on the present value of expected cash flows, the market price of the loan, or the underlying fair value of the loan’s collateral. For real estate loans, fair value of the loan’s collateral is determined by third-party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods being the predominant approach. The Corporation reviews the third-party appraisal for appropriateness and may adjust the value downward to consider selling and closing costs. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business.
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The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at March 31, 2022:

| Fair value |  | Valuation Technique |  | Unobservable Inputs |  | Range (Weighted Average)
Collateral-dependent loans: |  |  |  |  |  |  |
Farmland | $ | 920 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 60% (60%)
Owner-occupied, nonfarm nonresidential properties | 185 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 0%-60% (57%)
Commercial and industrial | 3,008 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 0%-60% (41%)
Multifamily (5 or more) residential properties | 544 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 0%-59% (23%)
Non-owner occupied, nonfarm nonresidential | 2,792 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 25%-60% (35%)
Residential Mortgages secured by first liens | 650 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 25%-57% (40%)

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2021:

| Fair value |  | Valuation Technique |  | Unobservable Inputs |  | Range (Weighted Average)
Collateral-dependent loans: |  |  |  |  |  |  |
Farmland | $ | 920 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 60% (60%)
Owner-occupied, nonfarm nonresidential properties | 194 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 0%-60% (57%)
Commercial and industrial | 3,102 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 0%-59% (42%)
Other construction loans and all land development loans and other land loans | 248 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 25% (25%)
Multifamily (5 or more) residential properties | 627 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 0%-57% (26%)
Non-owner occupied, nonfarm nonresidential | 2,889 |  |  | Valuation of third party appraisal on underlying collateral |  | Loss severity rates |  | 25%-60% (34%)

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Fair Value of Financial Instruments
The following table presents the carrying amount and fair value of financial instruments at March 31, 2022:

| Carrying |  | Fair Value Measurement Using: |  | Total
| Amount |  | Level 1 |  | Level 2 |  | Level 3 |  | Fair Value
ASSETS |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 404,974 |  |  | $ | 404,974 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 404,974 |
Debt securities available-for-sale | 539,562 |  |  | 0 |  |  | 539,562 |  |  | 0 |  |  | 539,562 |
Debt securities held-to-maturity | 307,597 |  |  | 0 |  |  | 295,688 |  |  | 0 |  |  | 295,688 |
Equity securities | 10,092 |  |  | 10,092 |  |  | 0 |  |  | 0 |  |  | 10,092 |
Loans held for sale | 1,563 |  |  | 0 |  |  | 1,573 |  |  | 0 |  |  | 1,573 |
Net loans | 3,718,246 |  |  | 0 |  |  | 0 |  |  | 3,758,866 |  |  | 3,758,866 |
FHLB and other restricted interests | 23,891 |  |  | n/a |  | n/a |  | n/a |  | n/a
Interest rate swaps | 391 |  |  | 0 |  |  | 391 |  |  | 0 |  |  | 391 |
Accrued interest receivable | 16,405 |  |  | 0 |  |  | 2,882 |  |  | 13,523 |  |  | 16,405 |
LIABILITIES |  |  |  |  |  |  |  |  |
Deposits | $ | (4,690,863) |  |  | $ | (4,352,922) |  |  | $ | (341,809) |  |  | $ | 0 |  |  | $ | (4,694,731) |
Subordinated debentures | (20,620) |  |  | 0 |  |  | (13,305) |  |  | 0 |  |  | (13,305) |
Subordinated notes, net of unamortized issuance costs | (83,736) |  |  | 0 |  |  | (79,864) |  |  | 0 |  |  | (79,864) |
Interest rate swaps | (511) |  |  | 0 |  |  | (511) |  |  | 0 |  |  | (511) |
Accrued interest payable | (856) |  |  | 0 |  |  | (856) |  |  | 0 |  |  | (856) |

The following table presents the carrying amount and fair value of financial instruments at December 31, 2021:

| Carrying |  | Fair Value Measurement Using: |  | Total
| Amount |  | Level 1 |  | Level 2 |  | Level 3 |  | Fair Value
ASSETS |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 732,198 |  |  | $ | 732,198 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 732,198 |
Debt securities available-for-sale | 697,191 |  |  | 4,995 |  |  | 692,196 |  |  | 0 |  |  | 697,191 |
Equity securities | 10,366 |  |  | 10,366 |  |  | 0 |  |  | 0 |  |  | 10,366 |
Loans held for sale | 849 |  |  | 0 |  |  | 858 |  |  | 0 |  |  | 858 |
Net loans | 3,597,204 |  |  | 0 |  |  | 0 |  |  | 3,613,452 |  |  | 3,613,452 |
FHLB and other restricted interests | 23,276 |  |  | n/a |  | n/a |  | n/a |  | n/a
Interest rate swaps | 2,124 |  |  | 0 |  |  | 2,124 |  |  | 0 |  |  | 2,124 |
Accrued interest receivable | 15,516 |  |  | 16 |  |  | 2,171 |  |  | 13,329 |  |  | 15,516 |
LIABILITIES |  |  |  |  |  |  |  |  |
Deposits | $ | (4,715,619) |  |  | $ | (4,329,167) |  |  | $ | (391,850) |  |  | $ | 0 |  |  | $ | (4,721,017) |
Subordinated notes, net of unamortized issuance costs | (104,281) |  |  | 0 |  |  | (92,675) |  |  | 0 |  |  | (92,675) |
Interest rate swaps | (2,512) |  |  | 0 |  |  | (2,512) |  |  | 0 |  |  | (2,512) |
Accrued interest payable | (886) |  |  | 0 |  |  | (886) |  |  | 0 |  |  | (886) |

While estimates of fair value are based on management’s judgment of the most appropriate factors as of the balance sheet date, there is no assurance that the estimated fair values would have been realized if the assets had been disposed of or the liabilities settled at that date, since market values may differ depending on various circumstances. The estimated fair values would also not apply to subsequent dates. The fair value of other equity interests is based on the net asset values provided by the underlying investment partnership. ASU 2015-7 removes the requirement to categorize within the fair value hierarchy all investments measured using the net asset value per share practical expedient and related disclosures. In addition, other assets and liabilities that are not financial instruments, such as premises and equipment, are not included in the disclosures.
Also, non-financial assets such as, among other things, the estimated earnings power of core deposits, the earnings potential of trust accounts, the trained workforce, and customer goodwill, which typically are not recognized on the balance sheet, may have value but are not included in the fair value disclosures..
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13. REVENUE FROM CONTRACTS WITH CUSTOMERS
All of the Corporation’s revenue from contracts with customers in the scope of ASC 606 is recognized within Non-Interest Income. The following table presents the Corporation's Non-Interest Income by revenue stream and reportable segment for the three months ended March 31, 2022 and 2021. Items outside the scope of ASC 606 are noted as such.

| Three months ended March 31, |  |
| 2022 |  | 2021 |  |  |  |
Non-interest Income |  |  |  |  |  |  |
Service charges on deposit accounts | $ | 1,757 |  |  | $ | 1,348 |  |  |  |  |
Wealth and asset management fees | 1,783 |  |  | 1,522 |  |  |  |  |
Mortgage banking (1) | 475 |  |  | 1,235 |  |  |  |  |
Card processing and interchange income | 1,809 |  |  | 1,834 |  |  |  |  |
Net gains (losses) on sales of securities (1) | 651 |  |  | 0 |  |  |  |  |
Other income | 3,179 |  |  | 2,300 |  |  |  |  |
Total non-interest income | $ | 9,654 |  |  | $ | 8,239 |  |  |  |  |

(1) Not within scope of ASU 2014-9
Management determined that the primary sources of revenue emanating from interest and dividend income on loans and investment securities along with non-interest revenue resulting from security gains, loan servicing, gains on the sale of loans, commitment fees, fees from financial guarantees, certain credit card fees, gains (losses) on sale of other real estate owned not financed by the Corporation, is not within the scope of ASU 2014-9.
The types of non-interest income within the scope of the standard that are material to the condensed consolidated financial statements are services charges on deposit accounts, wealth and asset management fee income, card processing and interchange income, and other income.
Service charges on deposit accounts: The Corporation earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed, as that is the point in time the Corporation fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Corporation satisfies the performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Services charges on deposits are withdrawn from the customer’s account balance.
Wealth and asset management fees: The Corporation earns wealth and asset management fees from its contracts with trust and brokerage customers to manage assets for investment, and/or to transact on their accounts. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management at month end. Fees for these services are billed to customers on a monthly or quarterly basis and are recorded as revenue at the end of the period for which the wealth and asset management services have been performed. Other performance obligations, such as the delivery of account statements to customers, are generally considered immaterial to the overall transaction price.
Card processing and interchange income: The Corporation earns interchange fees from check card and credit card transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder.
Other income: The Corporation's other income includes sources such as bank owned life insurance, changes in fair value and realized gains on sales of trading securities, certain service fees, gains (losses) on sales of fixed assets, and gains (losses) on sale of other real estate owned. The service fees are recognized in the same manner as the service charges mentioned above. While gains (losses) on the sale of other real estate owned are within the scope of ASU 2014-9 if financed by the Corporation, the Corporation does not finance the sale of transactions. The revenue on the sale is recorded upon the transfer of control of the property to the buyer and the other real estate owned asset is derecognized.
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I TEM 2
M ANAGEMENT’S D ISCUSSION AND A NALYSIS OF F INANCIAL C ONDITION
A ND R ESULTS OF O PERATIONS
GENERAL OVERVIEW
The following discussion and analysis of the condensed consolidated financial statements of the Corporation is presented to provide insight into management’s assessment of financial results. The terms “we”, “us” and “our” refer to CNB Financial Corporation and its subsidiaries. The financial condition and results of operations of the Corporation and its consolidated subsidiaries are not necessarily indicative of future performance.
The Corporation’s subsidiary, the Bank, provides financial services to individuals and businesses primarily within its primary market area of the Pennsylvania counties of Blair, Cambria, Cameron, Centre, Clearfield, Crawford, Elk, Indiana, Jefferson and McKean. ERIEBANK, a division of the Bank, operates in the Pennsylvania counties of Crawford, Erie, and Warren and in the Ohio counties of Ashtabula, Cuyahoga and Lake. FCBank, a division of the Bank, operates in the Ohio counties of Crawford, Richland, Ashland, Wayne, Marion, Morrow, Knox, Delaware and Franklin. BankOnBuffalo, a division of the Bank, operates in the New York counties of Erie and Niagara. Ridge View Bank, a division of the Bank, operates in Southwest, Virginia. The Bank is subject to regulation, supervision and examination by the Pennsylvania State Department of Banking as well as the FDIC.
In addition to the Bank, the Corporation has four other subsidiaries. CNB Securities Corporation is incorporated in Delaware and currently maintains investments in debt and equity securities. CNB Insurance Agency, incorporated in Pennsylvania, provides for the sale of nonproprietary annuities and other insurance products. CNB Risk Management, Inc. is a Delaware-based captive insurance company which insures against certain risks unique to the operations of the Corporation and its subsidiaries and for which insurance may not be currently available or economically feasible in today's insurance marketplace. Holiday, incorporated in Pennsylvania, offers small balance unsecured loans and secured loans, primarily collateralized by automobiles and equipment, to borrowers with higher risk characteristics.
The following discussion should be read in conjunction with the Corporation’s consolidated financial statements and notes thereto for the year ended December 31, 2021, included in its Annual Report on Form 10-K for the year ended December 31, 2021, and in conjunction with the condensed consolidated financial statements and notes thereto included in Item 1 of this report. Operating results for three months ended March 31, 2022 are not necessarily indicative of the results for the full year ending December 31, 2022, or any future period.
NON-GAAP FINANCIAL INFORMATION
This report contains references to financial measures that are not defined in GAAP. Management uses non-GAAP financial information in its analysis of the Corporation’s performance. Management believes that these non-GAAP measures provide a greater understanding of ongoing operations, enhance comparability of results of operations with prior periods and show the effects of significant gains and charges in the periods presented. The Corporation’s management believes that investors may use these non-GAAP measures to analyze the Corporation’s financial performance without the impact of unusual items or events that may obscure trends in the Corporation’s underlying performance. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures and that different companies might calculate these measures differently.
Non-GAAP measures reflected within the discussion below include:
•Tangible book value per share;
•Tangible common equity/tangible assets;
•Adjusted allowance/loans, net of PPP related loans;
•Net interest margin (fully tax equivalent basis);
•Efficiency ratio;
•Pre-provision net revenue ("PPNR");
•Return on average tangible common equity; and
•Non-interest income excluding realized gains on AFS securities.
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Management considers return on average assets, return on average equity, return on average tangible common equity, earnings per common share, asset quality, net interest margin, and other metrics as key measures of the financial performance of the Corporation. The interest rate environment will continue to play an important role in the future earnings of the Corporation. To address the challenging interest rate and competitive environments, the Corporation continues to evaluate, develop and implement strategies necessary to support its ongoing financial performance objectives and future growth goals.
While non-interest costs are expected to increase with the growth of the Corporation, management’s growth strategies are also expected to result in an increase in earning assets as well as enhanced revenue, which is expected to more than offset increases in non-interest expenses in 2022 and beyond.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents totaled $405.0 million at March 31, 2022, including additional excess liquidity of $352.9 million held at the Federal Reserve. Cash and cash equivalents totaled $732.2 million at December 31, 2021. The decrease in cash and cash equivalents from December 31, 2021 to March 31, 2022 was due to a decrease in total deposits, robust loan growth and an increase in investment activities to position a portion of the excess liquidity into higher earning assets.
Management believes the liquidity needs of the Corporation are satisfied primarily by the current balance of cash and cash equivalents, customer deposits, FHLB financing, and the portions of the securities and loan portfolios that mature within one year. The Corporation expects that these sources of funds will enable it to meet cash obligations and off-balance sheet commitments as they come due. In addition to the above noted liquidity sources, the Corporation maintains access to the Federal Reserve discount window.
SECURITIES
AFS and equity securities totaled $549.7 million and $707.6 million at March 31, 2022 and December 31, 2021, respectively. HTM securities totaled $307.6 million and zero at March 31, 2022 and December 31, 2021, respectively. In a strategy to lessen the impact of the current interest rate environment on the Corporation’s equity and tangible equity, management evaluated the Corporation’s investment portfolio and reclassified government-sponsored investments from AFS to HTM during the first quarter of 2022. Additionally, during the first quarter of 2022, purchases of certain government-sponsored investments were classified into HTM
The Corporation’s objective is to maintain the investment securities portfolio at an appropriate level to balance the earnings and liquidity provided by the portfolio. Note 3, "Securities," in the condensed consolidated financial statements provides more detail concerning the composition of the Corporation’s securities portfolio and the process for evaluating securities for impairment.
The following table summarizes the maturity distribution schedule with corresponding weighted-average yields of securities AFS as of March 31, 2022. Weighted-average yields have been computed on a fully taxable-equivalent basis using a tax rate of 21%. Mortgage-backed securities are included in maturity categories based on their stated maturity date.

| March 31, 2022
| Within One Year |  | After One But Within Five Years |  | After Five But Within Ten Years |  | After Ten Years |  | Total
| $ Amt. |  | Yield |  | $ Amt. |  | Yield |  | $ Amt. |  | Yield |  | $ Amt. |  | Yield |  | $ Amt. |  | Yield
U.S. Government Sponsored Entities | $ | 248 |  |  | 1.50 | % |  | $ | 1,548 |  |  | 0.52 | % |  | $ | 0 |  |  | 0.00 | % |  | $ | 0 |  |  | 0.00 | % |  | 1,796 |  |  | 0.66 | %
State and Political Subdivisions | 4,343 |  |  | 3.22 | % |  | 29,130 |  |  | 2.63 | % |  | 51,532 |  |  | 2.24 | % |  | 20,859 |  |  | 2.32 | % |  | 105,864 |  |  | 2.40 | %
Residential and multi-family mortgage | 0 |  |  | 0.00 | % |  | 22,585 |  |  | 2.95 | % |  | 27,537 |  |  | 1.81 | % |  | 330,415 |  |  | 1.47 | % |  | 380,537 |  |  | 1.58 | %
Corporate notes and bonds | 402 |  |  | 0.62 | % |  | 6,887 |  |  | 2.45 | % |  | 26,865 |  |  | 3.85 | % |  | 0 |  |  | 0.00 | % |  | 34,154 |  |  | 3.53 | %
Pooled SBA | 0 |  |  | 0.00 | % |  | 306 |  |  | 5.19 | % |  | 12,934 |  |  | 2.64 | % |  | 3,971 |  |  | 1.70 | % |  | 17,211 |  |  | 2.47 | %
Total | $ | 4,993 |  |  | 2.93 | % |  | $ | 60,456 |  |  | 2.69 | % |  | $ | 118,868 |  |  | 2.55 | % |  | $ | 355,245 |  |  | 1.52 | % |  | $ | 539,562 |  |  | 1.89 | %

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The following table summarizes the maturity distribution schedule with corresponding weighted-average yields of securities HTM as of March 31, 2022.

| March 31, 2022
| Within One Year |  | After One But Within Five Years |  | After Five But Within Ten Years |  | After Ten Years |  | Total
| $ Amt. |  | Yield |  | $ Amt. |  | Yield |  | $ Amt. |  | Yield |  | $ Amt. |  | Yield |  | $ Amt. |  | Yield
U.S. Government Sponsored Entities | $ | 0 |  |  | 0.00 | % |  | $ | 256,812 |  |  | 1.53 | % |  | $ | 50,785 |  |  | 1.76 | % |  | $ | 0 |  |  | 0.00 | % |  | $ | 307,597 |  |  | 1.57 | %
Total | $ | 0 |  |  | 0.00 | % |  | $ | 256,812 |  |  | 1.53 | % |  | $ | 50,785 |  |  | 1.76 | % |  | $ | 0 |  |  | 0.00 | % |  | $ | 307,597 |  |  | 1.57 | %

The following table summarizes the weighted average modified duration of securities AFS as of March 31, 2022.

| Weighted Average Modified Duration (in Years)
U.S. Government Sponsored Entities | 2.09 |
State and Political Subdivisions | 6.62 |
Residential and multi-family mortgage | 3.94 |
Corporate notes and bonds | 4.06 |
Pooled SBA | 2.97 |
Total | 4.44 |

The following table summarizes the weighted average modified duration of securities HTM as of March 31, 2022.

| Weighted Average Modified Duration (in Years)
U.S. Government Sponsored Entities | 4.15 |

The portfolio contains no holdings of a single issuer that exceeds 10% of shareholders’ equity other than the U.S. Treasury and governmental sponsored entities.
The Corporation generally purchases debt securities over time and does not attempt to "time" its transactions, which allows for more efficient management of fluctuations in the interest rate environment. The Corporation's strategy given the current environment is to focus on lower risk securities, shorter durations that complement the current portfolio investment ladder, and consistent reinvestment of cash flows to replace lower earning assets.
The Corporation monitors the earnings performance and the effectiveness of the liquidity of the securities portfolio on a regular basis through meetings of the Asset/Liability Committee ("ALCO"). The ALCO also reviews and manages interest rate risk for the Corporation. Through active balance sheet management and analysis of the securities portfolio, a sufficient level of liquidity is maintained to satisfy depositor requirements and various credit needs of our customers.
LOANS
Note 4, "Loans and Allowance for Credit Losses," in the condensed consolidated financial statements provides more detail concerning the loan portfolio of the Corporation.
At March 31, 2022, excluding the impact of syndicated loans and PPP loans, net of PPP deferred processing fees (such loans, the "PPP-related loans"), the Corporation's loan portfolio totaled $3.6 billion, representing an increase of $127.0 million, or 3.7%, from December 31, 2021. The growth was primarily driven by the Corporation's ongoing expansion in the Cleveland and Southwest Virginia regions, combined with continued strong growth in its Private Banking division, and increased lending opportunities in other regions in which the Corporation operates.
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As part of the liquidity management strategies first implemented by the Corporation in 2020, the three months ended March 31, 2022 reflected an increase in syndicated lending balances of $21.3 million from December 31, 2021. The syndicated loan portfolio totaled $147.1 million, or 3.9% of total loans, excluding PPP-related loans, at March 31, 2022. The Corporation internally underwrites each syndicated loan individually and considers these loans as an alternative to purchasing investment securities. While the overall strategy is to redeploy lower earning assets towards a higher profitability loan with a risk profile that meets the underwriting policies, the Corporation does not expect this type of activity to become a significant component of its business.
Loan Origination/Risk Management
The Corporation has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions. The Corporation has not underwritten any hybrid loans, payment option loans, or low documentation/no documentation loans. Variable rate loans are generally underwritten at the fully indexed rate. Loan underwriting policies and procedures have not changed materially between any periods presented. As discussed more fully above, syndicated loan purchases are underwritten utilizing the same process as the Corporation’s originated loans.
The Corporation has begun to explore the credit and reputational risks associated with climate change and their potential impact on the foregoing, while closely monitoring regulatory developments on climate risk. This includes, among other things, researching and developing a formalized approach to considering climate change related risks in the Corporation's underwriting processes. This approach will be impacted, in part, by the accessibility and reliability of both customer climate risk data and climate risk data in general. One of the objectives of these efforts is to enable the Corporation to better understand the climate change related risks associated with the Corporation's customers' business activities and to be able to monitor their response to those risks and their ultimate impact on the Corporation's customers.
Although it is possible that the on-going effects of COVID-19 could continue to impact demand for our loan products, the Corporation expects to continue to achieve its loan growth objectives in 2022 as a result of its diversified markets and its focus on core customer acquisition strategies.
Customer Support Strategies and Loan Portfolio Profile
As of March 31, 2022, the Corporation had outstanding $19.1 million in PPP loans at a rate of 1.00%, representing 145 PPP loan relationships, and deferred PPP processing fees of approximately $655 thousand. For the three months ended March 31, 2022, the Corporation recognized $1.2 million in deferred PPP processing fees ("PPP-related fees") compared to $2.7 million in PPP-related fees for the three months ended March 31, 2021. The outstanding balance of PPP loans at March 31, 2022 included loans from two different origination years: (i) $154 thousand, or 5 loans from the Corporation's participation in the PPP in 2020, and (ii) $18.9 million, or 140 loans, from the Corporation’s participation in the PPP in 2021.
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Maturities and Sensitivities of Loans to Changes in Interest Rate
The following table presents the maturity distribution of the Corporation's loan portfolio at March 31, 2022. The table also presents the portion of loans that have fixed interest rates or variable interest rates that fluctuate over the life of the loans in accordance with changes in an interest rate index.

| March 31, 2022
| Due in One Year or Less |  | After One, but Within Five Years |  | After Five but Within Fifteen Years |  | After Fifteen Years |  | Total
Loans with Fixed Interest Rate |  |  |  |  |  |  |  |  |
Farmland | $ | 165 |  |  | $ | 1,501 |  |  | $ | 8,492 |  |  | $ | 934 |  |  | $ | 11,092 |
Owner-occupied, nonfarm nonresidential properties | 8,161 |  |  | 23,237 |  |  | 14,767 |  |  | 7,700 |  |  | 53,865 |
Agricultural production and other loans to farmers | 773 |  |  | 344 |  |  | 0 |  |  | 0 |  |  | 1,117 |
Commercial and Industrial | 4,894 |  |  | 225,845 |  |  | 75,799 |  |  | 181 |  |  | 306,719 |
Obligations (other than securities and leases) of states and political subdivisions | 2,627 |  |  | 5,254 |  |  | 48,293 |  |  | 47,430 |  |  | 103,604 |
Other loans | 10 |  |  | 919 |  |  | 604 |  |  | 291 |  |  | 1,824 |
Other construction loans and all land development and other land loans (1) | 15,849 |  |  | 12,516 |  |  | 7,961 |  |  | 1,382 |  |  | 37,708 |
Multifamily (5 or more) residential properties | 1,440 |  |  | 56,898 |  |  | 3,065 |  |  | 4,709 |  |  | 66,112 |
Non-owner occupied, nonfarm nonresidential properties | 20,499 |  |  | 73,509 |  |  | 29,982 |  |  | 7,246 |  |  | 131,236 |
1-4 Family Construction (1) | 2,876 |  |  | 0 |  |  | 861 |  |  | 6,237 |  |  | 9,974 |
Home equity lines of credit | 8 |  |  | 85 |  |  | 579 |  |  | 484 |  |  | 1,156 |
Residential Mortgages secured by first liens | 2,513 |  |  | 23,669 |  |  | 252,528 |  |  | 113,601 |  |  | 392,311 |
Residential Mortgages secured by junior liens | 147 |  |  | 5,917 |  |  | 42,328 |  |  | 5,216 |  |  | 53,608 |
Other revolving credit plans | 45 |  |  | 15 |  |  | 15 |  |  | 0 |  |  | 75 |
Automobile | 359 |  |  | 14,831 |  |  | 5,226 |  |  | 0 |  |  | 20,416 |
Other consumer | 7,071 |  |  | 31,113 |  |  | 8,405 |  |  | 2,739 |  |  | 49,328 |
Credit cards | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Overdrafts | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | $ | 67,437 |  |  | $ | 475,653 |  |  | $ | 498,905 |  |  | $ | 198,150 |  |  | $ | 1,240,145 |
Loans with Variable or Floating Interest Rate |  |  |  |  |  |  |  |  |
Farmland | $ | 819 |  |  | $ | 2,903 |  |  | $ | 9,291 |  |  | $ | 7,194 |  |  | $ | 20,207 |
Owner-occupied, nonfarm nonresidential properties | 13,394 |  |  | 34,565 |  |  | 296,176 |  |  | 50,180 |  |  | 394,315 |
Agricultural production and other loans to farmers | 0 |  |  | 0 |  |  | 259 |  |  | 0 |  |  | 259 |
Commercial and Industrial | 221,358 |  |  | 104,692 |  |  | 83,142 |  |  | 1,341 |  |  | 410,533 |
Obligations (other than securities and leases) of states and political subdivisions | 0 |  |  | 1,747 |  |  | 13,271 |  |  | 23,793 |  |  | 38,811 |
Other loans | 2,243 |  |  | 2,973 |  |  | 1,495 |  |  | 4,906 |  |  | 11,617 |
Other construction loans and all land development and other land loans (1) | 54,043 |  |  | 133,880 |  |  | 82,041 |  |  | 11,482 |  |  | 281,446 |
Multifamily (5 or more) residential properties | 34,654 |  |  | 33,668 |  |  | 75,415 |  |  | 18,685 |  |  | 162,422 |
Non-owner occupied, nonfarm nonresidential properties | 56,382 |  |  | 150,630 |  |  | 299,519 |  |  | 60,807 |  |  | 567,338 |
1-4 Family Construction (1) | 4,408 |  |  | 3,058 |  |  | 2,938 |  |  | 20,645 |  |  | 31,049 |
Home equity lines of credit | 5,912 |  |  | 7,178 |  |  | 71,182 |  |  | 23,796 |  |  | 108,068 |
Residential Mortgages secured by first liens | 7,792 |  |  | 13,553 |  |  | 159,054 |  |  | 268,291 |  |  | 448,690 |
Residential Mortgages secured by junior liens | 1,088 |  |  | 143 |  |  | 2,755 |  |  | 315 |  |  | 4,301 |
Other revolving credit plans | 2,471 |  |  | 2,676 |  |  | 20,615 |  |  | 20 |  |  | 25,782 |
Automobile | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Other consumer | 1 |  |  | 42 |  |  | 64 |  |  | 82 |  |  | 189 |
Credit cards | 10,937 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 10,937 |
Overdrafts | 254 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 254 |
Total | $ | 415,756 |  |  | $ | 491,708 |  |  | $ | 1,117,217 |  |  | $ | 491,537 |  |  | $ | 2,516,218 |
1 1-4 family construction loans and other construction loans and all land development and other land loans segments include loans that are construction to permanent loans in which the loan segment will change when the construction period has concluded.

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The Corporation generally structures commercial loans with shorter-term maturities in order to match our funding sources and to enable us to effectively manage the loan portfolio by providing the flexibility to respond to liquidity needs, changes in interest rates and changes in underwriting standards and loan structures, among other factors. Due to the shorter-term nature of such loans, from time to time in the ordinary course of business and without any contractual obligation on our part, we will renew/extend maturing lines of credit or refinance existing loans at their maturity dates.
Loan Concentration
At March 31, 2022, no industry concentration existed which exceeded 10% of the total loan portfolio.
Loan Quality
The following table presents information concerning loan delinquency and other nonperforming assets at March 31, 2022 and December 31, 2021:

| March 31, 2022 |  | December 31, 2021 |  |  |  |  |  |
Nonaccrual loans | $ | 19,378 |  |  | $ | 19,420 |  |  |  |  |  |  |
Accrual loans greater than 90 days past due | 52 |  |  | 168 |  |  |  |  |  |  |
Total nonperforming loans | 19,430 |  |  | 19,588 |  |  |  |  |  |  |
Other real estate owned | 689 |  |  | 707 |  |  |  |  |  |  |
Total nonperforming assets | $ | 20,119 |  |  | $ | 20,295 |  |  |  |  |  |  |
Loans modified in a troubled debt restructuring (TDR): |  |  |  |  |  |  |  |  |
Performing TDR loans | $ | 10,702 |  |  | $ | 9,006 |  |  |  |  |  |  |
Nonperforming TDR loans (1) | 7,379 |  |  | 7,600 |  |  |  |  |  |  |
Total TDR loans | $ | 18,081 |  |  | $ | 16,606 |  |  |  |  |  |  |
Total loans | $ | 3,756,363 |  |  | $ | 3,634,792 |  |  |  |  |  |  |
Nonaccrual loans as a percentage of loans | 0.52 | % |  | 0.53 | % |  |  |  |  |  |
Total assets | $ | 5,284,000 |  |  | $ | 5,328,939 |  |  |  |  |  |  |
Nonperforming assets as a percentage of total assets | 0.38 | % |  | 0.38 | % |  |  |  |  |  |
Allowance for credit losses on loans | $ | 38,117 |  |  | $ | 37,588 |  |  |  |  |  |  |
Ratio of allowance for credit losses to nonaccrual loans | 196.70 | % |  | 193.55 | % |  |  |  |  |  |

(1) Nonperforming TDR loans are also included in the balance of nonaccrual loans.
Total nonperforming assets were $20.1 million, or 0.38%, of total assets, as of March 31, 2022, and remained relatively stable with nonperforming assets of $20.3 million, or 0.38%, as of December 31, 2021.
The Corporation has established written lending policies and procedures that require underwriting standards, loan documentation, and credit analysis standards to be met prior to funding a loan. Subsequent to the funding of a loan, ongoing review of credits is required. Credit reviews are performed quarterly by an outsourced loan review firm and cover approximately 65% of the commercial loan portfolio on an annual basis. In addition, the external independent loan review firm reviews classified assets, past due loans and nonaccrual loans quarterly.
Potential problem loans consist of loans that are performing in accordance with contractual terms but for which management has concerns about the ability of a borrower to continue to comply with repayment terms because of the borrower’s potential operating or financial difficulties. Management monitors these "watchlist" loans on a monthly basis to determine potential losses within the commercial loan portfolio. The "watchlist" is comprised of all credits risk rated special mention, substandard and doubtful.
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ALLOWANCE FOR CREDIT LOSSES
The amount of each allowance for credit losses account represents management's best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current conditions and reasonable and supportable forecasts. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions or other relevant factors. While management utilizes its best judgment and information available, the ultimate adequacy of the Corporation's allowance for credit losses account is dependent upon a variety of factors beyond the Corporation's control, including the performance of the Corporation's portfolios, the economy, changes in interest rates and the view of the regulatory authorities toward classification of assets. The adequacy of the allowance for credit losses is subject to a formal analysis by the Credit Administration and Finance Departments of the Corporation. For additional information regarding the Corporation's accounting policies related to credit losses, refer to Note 1, "Summary of Significant Accounting Policies" in the Corporation's 2021 Form 10-K and Note 4, "Loans" in these condensed consolidated financial statements.
The tables below provides an allocation of the allowance for credit losses on loans by loan portfolio segment at March 31, 2022 and December 31, 2021; however, allocation of a portion of the allowance for credit losses to one segment does not preclude its availability to absorb losses in other segments.

| March 31, 2022
| Amount of Allowance Allocated |  | Percent of Loans in Each Category to Total Loans |  | Total Loans |  | Ratio of Allowance Allocated to Loans in Each Category
Farmland | $ | 186 |  |  | 0.8 | % |  | $ | 31,299 |  |  | 0.59 | %
Owner-occupied, nonfarm nonresidential properties | 3,595 |  |  | 11.9 | % |  | 448,180 |  |  | 0.80 | %
Agricultural production and other loans to farmers | 10 |  |  | 0.0 | % |  | 1,376 |  |  | 0.73 | %
Commercial and Industrial 1 | 9,090 |  |  | 19.1 | % |  | 717,252 |  |  | 1.27 | %
Obligations (other than securities and leases) of states and political subdivisions | 1,828 |  |  | 3.8 | % |  | 142,415 |  |  | 1.28 | %
Other loans | 143 |  |  | 0.4 | % |  | 13,441 |  |  | 1.06 | %
Other construction loans and all land development and other land loans | 2,050 |  |  | 8.5 | % |  | 319,154 |  |  | 0.64 | %
Multifamily (5 or more) residential properties | 2,236 |  |  | 6.1 | % |  | 228,534 |  |  | 0.98 | %
Non-owner occupied, nonfarm nonresidential properties | 6,411 |  |  | 18.6 | % |  | 698,574 |  |  | 0.92 | %
1-4 Family Construction | 210 |  |  | 1.1 | % |  | 41,023 |  |  | 0.51 | %
Home equity lines of credit | 1,181 |  |  | 2.9 | % |  | 109,224 |  |  | 1.08 | %
Residential Mortgages secured by first liens | 6,905 |  |  | 22.4 | % |  | 841,001 |  |  | 0.82 | %
Residential Mortgages secured by junior liens | 552 |  |  | 1.5 | % |  | 57,909 |  |  | 0.95 | %
Other revolving credit plans | 547 |  |  | 0.7 | % |  | 25,857 |  |  | 2.12 | %
Automobile | 254 |  |  | 0.5 | % |  | 20,416 |  |  | 1.24 | %
Other consumer | 2,569 |  |  | 1.3 | % |  | 49,517 |  |  | 5.19 | %
Credit cards | 103 |  |  | 0.3 | % |  | 10,937 |  |  | 0.94 | %
Overdrafts | 247 |  |  | 0.0 | % |  | 254 |  |  | 97.24 | %
Total loans | $ | 38,117 |  |  | 100.0 | % |  | $ | 3,756,363 |  |  | 1.01 | %
Excluding PPP loans, net of deferred processing fees | $ | 38,117 |  |  |  |  | $ | 3,737,947 |  |  | 1.02 | %
1 PPP loans, net of deferred PPP processing fees, disbursed in 2021 and 2020 are included in the Commercial and Industrial classification.

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| December 31, 2021
| Amount of Allowance Allocated |  | Percent of Loans in Each Category to Total Loans |  | Total Loans |  | Ratio of Allowance Allocated to Loans in Each Category
Farmland | $ | 151 |  |  | 0.7 | % |  | $ | 23,768 |  |  | 0.64 | %
Owner-occupied, nonfarm nonresidential properties | 3,339 |  |  | 12.0 | % |  | 434,672 |  |  | 0.77 | %
Agricultural production and other loans to farmers | 9 |  |  | 0.0 | % |  | 1,379 |  |  | 0.65 | %
Commercial and Industrial 1 | 8,837 |  |  | 19.5 | % |  | 708,989 |  |  | 1.25 | %
Obligations (other than securities and leases) of states and political subdivisions | 1,649 |  |  | 3.9 | % |  | 140,887 |  |  | 1.17 | %
Other loans | 149 |  |  | 0.4 | % |  | 13,979 |  |  | 1.07 | %
Other construction loans and all land development and other land loans | 2,198 |  |  | 8.2 | % |  | 298,869 |  |  | 0.74 | %
Multifamily (5 or more) residential properties | 2,289 |  |  | 5.9 | % |  | 216,143 |  |  | 1.06 | %
Non-owner occupied, nonfarm nonresidential properties | 6,481 |  |  | 18.2 | % |  | 663,062 |  |  | 0.98 | %
1-4 Family Construction | 158 |  |  | 1.0 | % |  | 37,822 |  |  | 0.42 | %
Home equity lines of credit | 1,169 |  |  | 2.9 | % |  | 104,517 |  |  | 1.12 | %
Residential Mortgages secured by first liens | 6,943 |  |  | 22.7 | % |  | 826,729 |  |  | 0.84 | %
Residential Mortgages secured by junior liens | 546 |  |  | 1.6 | % |  | 56,689 |  |  | 0.96 | %
Other revolving credit plans | 528 |  |  | 0.7 | % |  | 26,536 |  |  | 1.99 | %
Automobile | 263 |  |  | 0.6 | % |  | 20,862 |  |  | 1.26 | %
Other consumer | 2,546 |  |  | 1.4 | % |  | 49,676 |  |  | 5.13 | %
Credit cards | 92 |  |  | 0.3 | % |  | 9,935 |  |  | 0.93 | %
Overdrafts | 241 |  |  | 0.0 | % |  | 278 |  |  | 86.69 | %
Total loans | $ | 37,588 |  |  | 100.0 | % |  | $ | 3,634,792 |  |  | 1.03 | %
Excluding PPP loans, net of deferred processing fees | $ | 37,588 |  |  |  |  | $ | 3,589,589 |  |  | 1.05 | %
1 PPP loans, net of deferred PPP processing fees, disbursed in 2021 and 2020 are included in the Commercial and Industrial classification.

The allowance for credit losses measured as a percentage of loans was 1.01% as of March 31, 2022, compared to 1.03% as of December 2021. The allowance for credit losses measured as a percentage of loans, net of PPP-related loans, was 1.02% as of March 31, 2022 compared to 1.05% as of December 31, 2021.
The Corporation's allowance for credit losses is influenced by loan volumes, risk rating migration, delinquency status and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions and other external factors.
For the three months ended March 31, 2022, the allowance for credit losses increased primarily due to the growth in the Corporation's loan portfolio, including growth in new market areas. This increase was partially offset by improvements in the Corporation's historical loss rates, as well as the impact of net charge-offs. There is still a significant amount of uncertainty related to the economic impact of COVID-19, including duration, new variants, future government responses, and the resiliency of the U.S. economy, as well as the uncertain macroeconomic environment. Management will continue to evaluate its estimate of expected credit losses as new information becomes available.
Note 4, "Loans and Allowance for Credit Losses," to the condensed consolidated financial statements provides further disclosure of loan balances by portfolio segment as of March 31, 2022 and December 31, 2021, as well as the nature and scope of loans modified in a troubled debt restructuring during 2022 and 2021 and the related effect on provision for credit expense and allowance for credit losses.
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Additional information related to provision for credit loss expense and net charge-offs and recoveries at March 31, 2022 and 2021 is presented in the tables below.

| March 31, 2022
| Provision (Benefit) for Credit Losses on Loans (1) |  | Net (Charge-Offs) Recoveries |  | Average Loans |  | Ratio of Annualized Net (Charge-Offs) Recoveries to Average Loans
Farmland | $ | 35 |  |  | $ | 0 |  |  | $ | 30,310 |  |  | 0.00 | %
Owner-occupied, nonfarm nonresidential properties | 270 |  |  | (14) |  |  | 448,410 |  |  | (0.01) | %
Agricultural production and other loans to farmers | 1 |  |  | 0 |  |  | 1,403 |  |  | 0.00 | %
Commercial and Industrial | 246 |  |  | 7 |  |  | 717,926 |  |  | 0.00 | %
Obligations (other than securities and leases) of states and political subdivisions | 179 |  |  | 0 |  |  | 145,395 |  |  | 0.00 | %
Other loans | (6) |  |  | 0 |  |  | 13,687 |  |  | 0.00 | %
Other construction loans and all land development and other land loans | (148) |  |  | 0 |  |  | 300,369 |  |  | 0.00 | %
Multifamily (5 or more) residential properties | (53) |  |  | 0 |  |  | 215,487 |  |  | 0.00 | %
Non-owner occupied, nonfarm nonresidential properties | (70) |  |  | 0 |  |  | 658,698 |  |  | 0.00 | %
1-4 Family Construction | 52 |  |  | 0 |  |  | 39,303 |  |  | 0.00 | %
Home equity lines of credit | 4 |  |  | 8 |  |  | 106,559 |  |  | 0.03 | %
Residential Mortgages secured by first liens | (3) |  |  | (35) |  |  | 827,563 |  |  | (0.02) | %
Residential Mortgages secured by junior liens | 6 |  |  | 0 |  |  | 56,519 |  |  | 0.00 | %
Other revolving credit plans | 39 |  |  | (20) |  |  | 26,281 |  |  | (0.31) | %
Automobile | (2) |  |  | (7) |  |  | 20,388 |  |  | (0.14) | %
Other consumer | 402 |  |  | (379) |  |  | 49,072 |  |  | (3.13) | %
Credit cards | 21 |  |  | (10) |  |  | 11,098 |  |  | (0.37) | %
Overdrafts | 84 |  |  | (78) |  |  | 248 |  |  | (127.55) | %
Total loans | $ | 1,057 |  |  | $ | (528) |  |  | $ | 3,668,716 |  |  | (0.06) | %

(1) Excludes provision for credit losses related to unfunded commitments. Note 8, "Off-Balance Sheet Commitments and Contingencies," in the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.
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| March 31, 2021
| Provision (Benefit) for Credit Losses on Loans (1) |  | Net (Charge-Offs) Recoveries |  | Average Loans |  | Ratio of Annualized Net (Charge-Offs) Recoveries to Average Loans
Farmland | $ | 3 |  |  | $ | 0 |  |  | $ | 23,969 |  |  | 0.00 | %
Owner-occupied, nonfarm nonresidential properties | (236) |  |  | (529) |  |  | 422,699 |  |  | (0.51) | %
Agricultural production and other loans to farmers | 4 |  |  | 0 |  |  | 2,950 |  |  | 0.00 | %
Commercial and Industrial | 297 |  |  | (51) |  |  | 669,346 |  |  | (0.03) | %
Obligations (other than securities and leases) of states and political subdivisions | 717 |  |  | 0 |  |  | 136,895 |  |  | 0.00 | %
Other loans | 5 |  |  | 0 |  |  | 11,919 |  |  | 0.00 | %
Other construction loans and all land development and other land loans | 50 |  |  | 0 |  |  | 207,477 |  |  | 0.00 | %
Multifamily (5 or more) residential properties | 30 |  |  | 0 |  |  | 225,381 |  |  | 0.00 | %
Non-owner occupied, nonfarm nonresidential properties | 2,668 |  |  | 0 |  |  | 622,786 |  |  | 0.00 | %
1-4 Family Construction | (15) |  |  | 0 |  |  | 26,003 |  |  | 0.00 | %
Home equity lines of credit | (142) |  |  | 0 |  |  | 107,967 |  |  | 0.00 | %
Residential Mortgages secured by first liens | (992) |  |  | 3 |  |  | 776,918 |  |  | 0.00 | %
Residential Mortgages secured by junior liens | (17) |  |  | 0 |  |  | 53,309 |  |  | 0.00 | %
Other revolving credit plans | 24 |  |  | (4) |  |  | 25,202 |  |  | (0.06) | %
Automobile | 55 |  |  | (5) |  |  | 24,722 |  |  | (0.08) | %
Other consumer | (321) |  |  | (267) |  |  | 40,138 |  |  | (2.70) | %
Credit cards | 24 |  |  | (25) |  |  | 8,275 |  |  | (1.23) | %
Overdrafts | (32) |  |  | (29) |  |  | 211 |  |  | (55.74) | %
Total loans | $ | 2,122 |  |  | $ | (907) |  |  | $ | 3,386,167 |  |  | (0.11) | %

(1) Excludes provision for credit losses related to unfunded commitments. Note 8, "Off-Balance Sheet Commitments and Contingencies," in the condensed consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation.
Provision for credit losses was $1.6 million for the three months ended March 31, 2022, compared to $2.1 million for March 31, 2021. Included in the provision for credit losses for the three months ended March 31, 2022 was $586 thousand related to the allowance for credit losses related to unfunded commitments compared to zero for the three months ended March 31, 2021. Net chargeoffs during the three months ended March 31, 2022 were $528 thousand, compared to net chargeoffs of $907 thousand during the three months ended March 31, 2021.
DEPOSITS
The Corporation’s sources of funds are deposits, borrowings, amortization and repayment of loan principal, interest earned on or maturation of investment securities and funds provided from operations. The Corporation considers deposits to be its primary source of funding in support of growth in assets.

| March 31, 2022 |  | December 31, 2021 |  | Percentage change 2022 vs. 2021
Demand, Non interest bearing | $ | 817,611 |  |  | $ | 792,086 |  |  | 3.2%
Demand, Interest bearing | 1,060,951 |  |  | 1,079,336 |  |  | (1.7)%
Savings deposits | 2,474,362 |  |  | 2,457,745 |  |  | 0.7%
Time deposits | 337,939 |  |  | 386,452 |  |  | (12.6)%
Total | $ | 4,690,863 |  |  | $ | 4,715,619 |  |  | (0.5)%

Deposits totaled $4.7 billion at March 31, 2022, reflecting a $24.8 million, or .05%, decrease from December 31, 2021. While non-interest bearing deposits increased approximately $25.5 million, or 3.2%, total interest bearing deposits of $3.9 billion, at March 31, 2022, decreased approximately $50.3 million, or 1.3%, from December 31, 2021. The number of households across all regions increased 0.9% from December 31, 2021. Growth in the Corporation’s non-interest bearing deposits are primarily from increases in business deposits as a result of management initiatives as well as the Corporation's overall customer relationship efforts.
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The following table sets forth the average balances of and the average rates paid on deposits for the period indicated.

| Three Months Ended March 31,
| 2022 |  | 2021 |  |
| Average Amount |  | Annual Rate |  | Average Amount |  | Annual Rate |  |  |  |
Demand – Non-Interest Bearing | $ | 804,964 |  |  |  |  | $ | 652,080 |  |  |  |  |  |  |
Demand – Interest Bearing | 1,046,502 |  |  | 0.17 | % |  | 906,297 |  |  | 0.20 | % |  |  |  |
Savings Deposits | 2,467,932 |  |  | 0.18 | % |  | 2,200,577 |  |  | 0.27 | % |  |  |  |
Time Deposits | 359,476 |  |  | 1.30 | % |  | 472,974 |  |  | 2.03 | % |  |  |  |
Total | $ | 4,678,874 |  |  |  |  | $ | 4,231,928 |  |  |  |  |  |  |

The following table presents additional information about our March 31, 2022 and December 31, 2021 deposits:

| March 31, 2022 |  | December 31, 2021
Time deposits not covered by deposit insurance | $ | 61,879 |  |  | $ | 68,562 |
Total deposits not covered by deposit insurance | 1,678,086 |  |  | 1,711,676 |

Scheduled maturities of time deposits not covered by deposit insurance at March 31, 2022 were as follows:

| March 31, 2022
3 months or less | $ | 9,656 |
Over 3 through 6 months | 3,760 |
Over 6 through 12 months | 33,727 |
Over 12 months | 14,736 |
Total | $ | 61,879 |

LIQUIDITY AND CAPITAL RESOURCES
Liquidity
Liquidity measures an organization’s ability to meet its cash obligations as they come due. The condensed consolidated statements of cash flows included in the accompanying financial statements provide analysis of the Corporation’s cash and cash equivalents and the sources and uses of cash. Additionally, the portion of the loan portfolio that matures within one year and securities with maturities within one year in the investment portfolio are considered part of the Corporation’s primary liquid assets. Liquidity is monitored by both management and the ALCO, which establishes and monitors ranges of acceptable liquidity. Management believes that the Corporation’s current liquidity position is acceptable and commensurate with the Corporation’s current and expected liquidity requirements.
At March 31, 2022, the Corporation’s cash position totaled approximately $405.0 million, including excess liquidity of $352.9 million held at the Federal Reserve, reflecting, in management's view, a strong liquidity level. In addition to its cash position, the Corporation’s borrowing capacity with the FHLB at March 31, 2022 was approximately $990.3 million.
Shareholders’ Equity, Capital Ratios and Metrics
The Corporation’s capital continues to provide a source of strength for the Corporation's profitability and long-term growth strategies. Total shareholders’ equity was $425.9 million at March 31, 2022, reflecting a decrease of $16.9 million, or 3.8%, from $442.8 million at December 31, 2021. This decrease was due to accumulated other comprehensive income and payment of common and preferred stock dividends to the Corporation's common and preferred shareholders during the three months ended March 31, 2022, partially offset by growth in organic earnings.
The Corporation has complied with the standards of capital adequacy mandated by government regulations. Bank regulators have established "risk-based" capital requirements designed to measure capital adequacy. Risk-based capital ratios reflect the relative risks of various assets banks hold in their portfolios. A weight category (0% for the lowest risk assets and increasing for each tier of higher risk assets) is assigned to each asset on the balance sheet.
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As of March 31, 2022 all of the Corporation's capital ratios exceeded regulatory “well-capitalized” levels and continue to support the Corporation's growth strategy. The Corporation’s capital ratios and book value per common share at March 31, 2022 and December 31, 2021 were as follows:

| March 31, 2022 |  | December 31, 2021
Total risk-based capital ratio | 14.44 | % |  | 14.92 | %
Tier 1 leverage ratio | 8.30 | % |  | 8.22 | %
Common equity tier 1 ratio | 9.37 | % |  | 9.65 | %
Tier 1 risk based ratio | 11.40 | % |  | 11.79 | %
Tangible common equity/tangible assets (1) | 6.18 | % |  | 6.45 | %
Book value per common share | $ | 21.83 |  |  | $ | 22.85 |
Tangible book value per common share (1) | $ | 19.21 |  |  | $ | 20.22 |

(1) Tangible common equity, tangible assets and tangible book value per common share are non-GAAP financial measures calculated using GAAP amounts. Tangible common equity is calculated by excluding the balance of goodwill and other intangible assets and preferred equity from the calculation of shareholders’ equity. Tangible assets is calculated by excluding the balance of goodwill and other intangible assets from the calculation of total assets. Tangible book value per common share is calculated by dividing tangible common equity by the number of shares outstanding. The Corporation believes that these non-GAAP financial measures provide information to investors that is useful in understanding its financial condition. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies. A reconciliation of these non-GAAP financial measures is provided.
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AVERAGE BALANCES, INTEREST RATES AND YIELDS
The loan categories used to monitor and analyze interest income and yields are different than the portfolio segments used to determine the allowance for credit losses for loans. The allowance for credit losses was calculated by pooling loans of similar credit risk characteristics and credit monitoring procedures. See Note 4, "Loans and Allowance for Credit Losses," for more information about pooling of loans for the allowance for credit losses.
The following table presents average balances of certain measures of our financial condition and net interest margin for the three months ended March 31, 2022 and 2021:

|  | Average Balances, Income and Interest Rates on a Taxable Equivalent Basis
|  | For the Three Months Ended,
|  | March 31, 2022 |  | March 31, 2021
|  | Average Balance |  | Annual Rate |  | Interest Inc./Exp. |  | Average Balance |  | Annual Rate |  | Interest Inc./Exp.
ASSETS: |  |  |  |  |  |  |  |  |  |  |  |
Securities: |  |  |  |  |  |  |  |  |  |  |  |
Taxable (1) (4) |  | $ | 759,601 |  |  | 1.76 | % |  | $ | 3,340 |  |  | $ | 564,498 |  |  | 1.86 | % |  | $ | 2,513 |
Tax-Exempt (1) (2) (4) |  | 37,586 |  |  | 3.01 | % |  | 274 |  |  | 45,165 |  |  | 4.10 | % |  | 436 |
Equity Securities (1) (2) |  | 7,931 |  |  | 2.15 | % |  | 42 |  |  | 5,744 |  |  | 11.44 | % |  | 162 |
Total securities (4) |  | 805,118 |  |  | 1.82 | % |  | 3,656 |  |  | 615,407 |  |  | 2.11 | % |  | 3,111 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial (2) (3) |  | 1,357,133 |  |  | 4.69 | % |  | 15,697 |  |  | 1,267,780 |  |  | 5.14 | % |  | 16,076 |
Mortgage (2) (3) |  | 2,204,497 |  |  | 4.47 | % |  | 24,290 |  |  | 2,019,841 |  |  | 4.60 | % |  | 22,897 |
Consumer (3) |  | 107,086 |  |  | 10.15 | % |  | 2,679 |  |  | 98,547 |  |  | 9.82 | % |  | 2,387 |
Total loans (3) |  | 3,668,716 |  |  | 4.72 | % |  | 42,666 |  |  | 3,386,168 |  |  | 4.76 | % |  | 41,360 |
Other earning assets |  | 508,462 |  |  | 0.17 | % |  | 213 |  |  | 508,087 |  |  | 0.12 | % |  | 148 |
Total earning assets |  | 4,982,296 |  |  | 3.78 | % |  | $ | 46,535 |  |  | 4,509,662 |  |  | 4.03 | % |  | $ | 44,619 |
Non interest-bearing assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | 49,869 |  |  |  |  |  |  | 46,529 |  |  |  |  |
Premises and equipment |  | 83,722 |  |  |  |  |  |  | 78,727 |  |  |  |  |
Other assets |  | 213,501 |  |  |  |  |  |  | 181,520 |  |  |  |  |
Allowance for credit losses |  | (38,035) |  |  |  |  |  |  | (35,221) |  |  |  |  |
Total non interest-bearing assets |  | 309,057 |  |  |  |  |  |  | 271,555 |  |  |  |  |
TOTAL ASSETS |  | $ | 5,291,353 |  |  |  |  |  |  | $ | 4,781,217 |  |  |  |  |
LIABILITIES AND SHAREHOLDERS’ EQUITY: |  |  |  |  |  |  |  |  |  |  |  |
Demand—interest-bearing |  | $ | 1,046,502 |  |  | 0.17 | % |  | $ | 438 |  |  | $ | 906,297 |  |  | 0.20 | % |  | $ | 438 |
Savings |  | 2,467,932 |  |  | 0.18 | % |  | 1,115 |  |  | 2,200,577 |  |  | 0.27 | % |  | 1,469 |
Time |  | 359,476 |  |  | 1.30 | % |  | 1,153 |  |  | 472,974 |  |  | 2.03 | % |  | 2,373 |
Total interest-bearing deposits |  | 3,873,910 |  |  | 0.28 | % |  | 2,706 |  |  | 3,579,848 |  |  | 0.48 | % |  | 4,280 |
Finance lease liabilities |  | 459 |  |  | 4.42 | % |  | 5 |  |  | 537 |  |  | 4.53 | % |  | 6 |
Subordinated notes and debentures |  | 104,300 |  |  | 3.60 | % |  | 926 |  |  | 70,620 |  |  | 5.06 | % |  | 888 |
Total interest-bearing liabilities |  | 3,978,669 |  |  | 0.37 | % |  | $ | 3,637 |  |  | 3,651,005 |  |  | 0.57 | % |  | $ | 5,174 |
Demand—non interest-bearing |  | 804,964 |  |  |  |  |  |  | 652,080 |  |  |  |  |
Other liabilities |  | 65,910 |  |  |  |  |  |  | 57,683 |  |  |  |  |
Total liabilities |  | 4,849,543 |  |  |  |  |  |  | 4,360,768 |  |  |  |  |
Shareholders’ equity |  | 441,810 |  |  |  |  |  |  | 420,449 |  |  |  |  |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |  | $ | 5,291,353 |  |  |  |  |  |  | $ | 4,781,217 |  |  |  |  |
Interest income/Earning assets |  |  |  | 3.78 | % |  | $ | 46,535 |  |  |  |  | 4.03 | % |  | $ | 44,619 |
Interest expense/Interest-bearing liabilities |  |  |  | 0.37 | % |  | 3,637 |  |  |  |  | 0.57 | % |  | 5,174 |
Net interest spread |  |  |  | 3.41 | % |  | $ | 42,898 |  |  |  |  | 3.46 | % |  | $ | 39,445 |
Interest income/Earning assets |  |  |  | 3.78 | % |  | 46,535 |  |  |  |  | 4.03 | % |  | 44,619 |
Interest expense/Earning assets |  |  |  | 0.30 | % |  | 3,637 |  |  |  |  | 0.47 | % |  | 5,174 |
Net interest margin |  |  |  | 3.48 | % |  | $ | 42,898 |  |  |  |  | 3.56 | % |  | $ | 39,445 |

(1) Includes unamortized discounts and premiums.
(2) Average yields are stated on a fully taxable equivalent basis (calculated using statutory rates of 21 percent) resulting from tax-free municipal securities in the investment portfolio and tax-free municipal loans in the commercial loan portfolio. The taxable equivalent adjustment to net interest income for March 31, 2022 and 2021 was $281 thousand and $324 thousand, respectively.
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(3) Average loans outstanding includes the average balance outstanding of all nonaccrual loans. Loans consist of the average of total loans less average unearned income. In addition, loan interest income consists of loan fees, including PPP deferred processing fees.
(4) Average balance is computed using the fair value of AFS securities and amortized cost of HTM securities. Average yield has been computed using amortized cost average balance for AFS and HTM securities. The adjustment to the average balance for securities in the calculation of average yield for March 31, 2022 and 2021 was $(10.6) million and $17.3 million, respectively.
VOLUME ANALYSIS OF CHANGES IN NET INTEREST INCOME
The following table presents the change in net interest income for the three months ended March 31, 2022 and 2021:

Net Interest Income Rate-Volume Variance | For Three Months Ended March 31, 2022 over (under) 2021 Due to Change In (1) |  |
| Volume |  | Rate |  | Net |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |  |
Securities: |  |  |  |  |  |  |  |  |  |  |
Taxable | $ | 966 |  |  | $ | (139) |  |  | $ | 827 |  |  |  |  |  |  |
Tax-Exempt (2) | (41) |  |  | (121) |  |  | (162) |  |  |  |  |  |  |
Equity Securities (2) | 12 |  |  | (132) |  |  | (120) |  |  |  |  |  |  |
Total Securities | 937 |  |  | (392) |  |  | 545 |  |  |  |  |  |  |
Loans: |  |  |  |  |  |  |  |  |  |  |
Commercial (2) | 1,028 |  |  | (1,407) |  |  | (379) |  |  |  |  |  |  |
Mortgage (2) | 2,040 |  |  | (647) |  |  | 1,393 |  |  |  |  |  |  |
Consumer | 212 |  |  | 80 |  |  | 292 |  |  |  |  |  |  |
Total Loans | 3,280 |  |  | (1,974) |  |  | 1,306 |  |  |  |  |  |  |
Other Earning Assets | 2 |  |  | 63 |  |  | 65 |  |  |  |  |  |  |
Total Earning Assets | $ | 4,219 |  |  | $ | (2,303) |  |  | $ | 1,916 |  |  |  |  |  |  |
Liabilities and Shareholders’ Equity |  |  |  |  |  |  |  |  |  |  |
Interest Bearing Deposits |  |  |  |  |  |  |  |  |  |  |
Demand – Interest Bearing | $ | 67 |  |  | $ | (67) |  |  | $ | 0 |  |  |  |  |  |  |
Savings | 134 |  |  | (488) |  |  | (354) |  |  |  |  |  |  |
Time | (369) |  |  | (851) |  |  | (1,220) |  |  |  |  |  |  |
Total Interest Bearing Deposits | (168) |  |  | (1,406) |  |  | (1,574) |  |  |  |  |  |  |
Finance Lease Liabilities | (1) |  |  | 0 |  |  | (1) |  |  |  |  |  |  |
Subordinated Debentures | 292 |  |  | (254) |  |  | 38 |  |  |  |  |  |  |
Total Interest Bearing Liabilities | $ | 123 |  |  | $ | (1,660) |  |  | $ | (1,537) |  |  |  |  |  |  |
Change in Net Interest Income | $ | 4,096 |  |  | $ | (643) |  |  | $ | 3,453 |  |  |  |  |  |  |

(1) The change in interest due to both volume and rate have been allocated entirely to volume changes.
(2) Changes in interest income on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21% for the three months ended March 31, 2022.
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R ESULTS OF O PERATIONS
Three Months Ended March 31, 2022 and 2021
OVERVIEW
Net income available to common stockholders was $14.2 million, or $0.84 per diluted common share, for the quarter ended March 31, 2022, compared to $13.1 million, or $0.78 per diluted share, for the same period in 2021, reflecting increases of $1.1 million, or 8.1%, and $0.06 per diluted share, or 7.7%. Earnings for the three months ended March 31, 2022 benefited from growth in commercial loans, stable credit quality and higher non-interest income. PPNR, a non-GAAP measure, was $20.4 million for the three months ended March 31, 2022, compared to $19.6 million for the three months ended March 31, 2021, reflecting an increase of $823 thousand, or 4.2%.
Annualized Return on average equity was 13.99% for the three months ended March 31, 2022, compared to 13.68% for the three months ended March 31, 2021. Annualized return on average tangible common equity, a non-GAAP measure, was 16.91% and 16.70% for the same periods in 2022 and 2021, respectively.
As a measure of the Corporation’s efficiency in management of its expenses, the efficiency ratio, a non-GAAP measure, was 60.53% for the three months ended March 31, 2022, compared to 58.18% for the three months ended March 31, 2021, primarily as a result of costs associated with the Corporation’s expansion into the Southwest Virginia region, coupled with its continued investments in customer-related technology.
INTEREST INCOME AND EXPENSE
Net interest income was $42.6 million for the three months ended March 31, 2022, an increase of $3.5 million, or 8.9%, from the three months ended March 31, 2021, primarily as a result of loan growth and various deposit pricing initiatives and liquidity strategies. Included in net interest income were PPP-related fees, which totaled approximately $1.2 million for the three months ended March 31, 2022, compared to $2.7 million for the three months ended March 31, 2021.
Net interest margin on a fully tax-equivalent basis, a non-GAAP measure, was 3.48% and 3.56% for the three months ended March 31, 2022 and 2021, respectively.
Yield on earning assets was 3.78% for the three months ended March 31, 2022, a decrease of 25 basis points from 4.03% for the three months ended March 31, 2021, primarily as a result of the lower interest rate environment and lower PPP-related fees, partially offset by a lower level of excess cash at the Federal Reserve. The cost of interest-bearing liabilities decreased 20 basis points from 0.57% for the three months ended March 31, 2021 to 0.37% for the three months ended March 31, 2022, primarily as a result of the Corporation’s targeted deposit rate reductions.
PROVISION FOR CREDIT LOSES
Provision for credit losses was $1.6 million for the three months ended March 31, 2022 compared to $2.1 million for the three months ended March 31, 2021. Included in the provision for credit losses for the three months ended March 31, 2022 was $586 thousand related to the allowance for unfunded commitments compared to zero for the three months ended March 31, 2021. For the three months ended March 31, 2022, net loan charge-offs were $528 thousand, or 0.06% (annualized) of total average loans, compared to $907 thousand, or 0.11% (annualized) of total average loans, during the three months ended March 31, 2021. As disclosed in "Allowance for Credit Losses" discussion above, management estimates the allowance for credit losses balance using relevant available information, from internal and external sources, relating to past events, current conditions, reasonable and supportable forecasts, and other significant qualitative and quantitative factors.
Management believes the charges to the provision for credit losses in for the three months ended March 31, 2022 were appropriate and the allowance for credit losses was adequate to absorb current expected credit losses in the loan portfolio at March 31, 2022.
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NON-INTEREST INCOME
Total non-interest income was $9.7 million for the three months ended March 31, 2022, an increase of $1.4 million, or 17.2%, from the same period in 2021. Included in non-interest income for the three months ended March 31, 2022 was $651 thousand in net realized gains on AFS securities. Excluding the impact of the realized gains on AFS securities, a non-GAAP measure, for the three months ended March 31, 2022, total non-interest income for the three months ended March 31, 2022 increased $764 thousand, or 9.3%, from the same period in 2021. During the three months ended March 31, 2022, Wealth and Asset Management fees increased $261 thousand, or 17.1%, compared to the three months ended March 31, 2021. Other significant improvements during the three months ended March 31, 2022 included increased income from charges on deposits and pass through income from investments in SBIC partnerships, partially offset by a decrease in mortgage banking activity.
NON-INTEREST EXPENSE
For the three months ended March 31, 2022, total non-interest expense was $31.9 million, an increase of $4.1 million, or 14.7%, from the three months ended March 31, 2021. The first quarter of 2022 included expenses related to hiring additional personnel in the Corporation's growth regions of Cleveland and Southwest Virginia. Non-interest expense in the first quarter of 2022 also included increased investments in technology aimed at enhancing customer experience.
INCOME TAX EXPENSE
Income tax expense was $3.5 million, representing an 18.6% effective tax rate, and $3.3 million, representing a 18.7% effective
tax rate, for the three months ended March 31, 2022 and 2021, respectively.
OFF-BALANCE SHEET ARRANGEMENTS
In the normal course of business, the Corporation enters into various transactions, which, in accordance with GAAP, are not included in its condensed consolidated balance sheets. The Corporation enters into these transactions to meet the financing needs of its customers. These transactions include commitments to extend credit and standby and commercial letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the condensed consolidated balance sheets. For further information, see Note 8, "Off-Balance Sheet Activities," in the in the condensed consolidated financial statements.
CRITICAL ACCOUNTING POLICIES
The Corporation’s accounting and reporting policies are in accordance with GAAP and conform to general practices within the financial services industry. Accounting and reporting practices for the allowance for credit losses and the fair value of assets acquired and liabilities assumed in connection with business combinations, including the associated goodwill and intangibles that was recorded, required the use of material estimates. Application of assumptions different than those used by management could result in material changes in the Corporation’s financial position or results of operations. Note 1 (Summary of Significant Accounting Policies) and Note 4 (Loans) of the 2021 Form 10-K provide additional detail with regard to the Corporation’s accounting for the allowance for credit losses and loans. There have been no other significant changes in the application of accounting policies since December 31, 2021.
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NON-GAAP FINANCIAL MEASURES
The following tables reconcile the non-GAAP financial measures to their most directly comparable measures under GAAP.

| (unaudited) |  |  |
| March 31, |  | December 31, |
| 2022 |  | 2021 |
Calculation of tangible book value per common share and tangible common equity/tangible assets: |  |  |  |
Shareholders' equity | $ | 425,935 |  |  | $ | 442,847 |  |
Less: preferred equity | 57,785 |  |  | 57,785 |  |
Less: goodwill | 43,749 |  |  | 43,749 |  |
Less: core deposit intangible | 435 |  |  | 460 |  |
Tangible common equity | $ | 323,966 |  |  | $ | 340,853 |  |
Total assets | $ | 5,284,000 |  |  | $ | 5,328,939 |  |
Less: goodwill | 43,749 |  |  | 43,749 |  |
Less: core deposit intangible | 435 |  |  | 460 |  |
Tangible assets | $ | 5,239,816 |  |  | $ | 5,284,730 |  |
Ending common shares outstanding | 16,860,698 |  |  | 16,855,062 |  |
Tangible book value per common share | $ | 19.21 |  |  | $ | 20.22 |  |
Tangible common equity/Tangible assets | 6.18 | % |  | 6.45 | % |

| (unaudited) |  |  |
| March 31, |  | December 31, |
| 2022 |  | 2021 |
Calculation of allowance / loans, net of PPP-related loans: |  |  |  |
Total allowance for credit losses | $ | 38,117 |  |  | $ | 37,588 |  |
Total loans | $ | 3,756,363 |  |  | $ | 3,634,792 |  |
Less: PPP-related loans | 18,416 |  |  | 45,203 |  |
Adjusted total loans, net of PPP-related loans (non-GAAP) | $ | 3,737,947 |  |  | $ | 3,589,589 |  |
Adjusted allowance / loans, net of PPP-related loans (non-GAAP) | 1.02 | % |  | 1.05 | % |

| Three Months Ended |  |
| March 31, |  |
| 2022 |  | 2021 |  |  |
Calculation of efficiency ratio: |  |  |  |  |  |
Non-interest expense | $ | 31,892 |  |  | $ | 27,804 |  |  |  |
Less: core deposit intangible amortization | 25 |  |  | 28 |  |  |  |
Adjusted non-interest expense (non-GAAP) | $ | 31,867 |  |  | $ | 27,776 |  |  |  |
Non-interest income | $ | 9,654 |  |  | $ | 8,239 |  |  |  |
Net interest income | $ | 42,617 |  |  | $ | 39,121 |  |  |  |
Less: tax exempt investment and loan income, net of TEFRA (non-GAAP) | 1,327 |  |  | 1,304 |  |  |  |
Add: tax exempt investment and loan income (non-GAAP) (tax-equivalent) | 1,703 |  |  | 1,689 |  |  |  |
Adjusted net interest income (non-GAAP) | 42,993 |  |  | 39,506 |  |  |  |
Adjusted net revenue (non-GAAP) (tax-equivalent) | $ | 52,647 |  |  | $ | 47,745 |  |  |  |
Efficiency ratio | 60.53 | % |  | 58.18 | % |  |  |

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NON-GAAP FINANCIAL MEASURES (continued)

| (unaudited) |  |
| Three Months Ended |  |
| March 31, |  |
| 2022 |  | 2021 |  |  |
Calculation of net interest margin: |  |  |  |  |  |
Interest income | $ | 46,254 |  |  | $ | 44,295 |  |  |  |
Interest expense | 3,637 |  |  | 5,174 |  |  |  |
Net interest income | $ | 42,617 |  |  | $ | 39,121 |  |  |  |
Average total earning assets | $ | 4,982,296 |  |  | $ | 4,509,662 |  |  |  |
Net interest margin (annualized) | 3.47 | % |  | 3.52 | % |  |  |
Calculation of net interest margin (fully tax equivalent basis): |  |  |  |  |  |
Interest income | $ | 46,254 |  |  | $ | 44,295 |  |  |  |
Tax equivalent adjustment (non-GAAP) | 281 |  |  | 324 |  |  |  |
Adjusted interest income (fully tax equivalent basis) (non-GAAP) | 46,535 |  |  | 44,619 |  |  |  |
Interest expense | 3,637 |  |  | 5,174 |  |  |  |
Net interest income (fully tax equivalent basis) (non-GAAP) | $ | 42,898 |  |  | $ | 39,445 |  |  |  |
Average total earning assets | $ | 4,982,296 |  |  | $ | 4,509,662 |  |  |  |
Less: average mark to market adjustment on investments (non-GAAP) | (10,560) |  |  | 17,310 |  |  |  |
Adjusted average total earning assets, net of mark to market (non-GAAP) | $ | 4,992,856 |  |  | $ | 4,492,352 |  |  |  |
Net interest margin (fully tax equivalent basis) (non-GAAP) (annualized) | 3.48 | % |  | 3.56 | % |  |  |

| (unaudited) |  |
| Three Months Ended |  |
| March 31, |  |
| 2022 |  | 2021 |  |  |
Calculation of PPNR: (1) |  |  |  |  |  |
Net interest income | $ | 42,617 |  |  | $ | 39,121 |  |  |  |
Add: Non-interest income | 9,654 |  |  | 8,239 |  |  |  |
Less: Non-interest expense | 31,892 |  |  | 27,804 |  |  |  |
PPNR (non-GAAP) | $ | 20,379 |  |  | $ | 19,556 |  |  |  |
(1) Management believes that this is an important metric as it illustrates the underlying performance of the Corporation, it enables investors and others to assess the Corporation's ability to generate capital to cover credit losses through the credit cycle and provides consistent reporting with a key metric used by bank regulatory agencies. |  |  |

| (unaudited) |  |
| Three Months Ended |  |
| March 31, |  |
| 2022 |  | 2021 |  |  |
Calculation of return on average tangible common equity: |  |  |  |  |  |
Net income available to common stockholders | $ | 14,170 |  |  | $ | 13,106 |  |  |  |
Average tangible common shareholders' equity | 339,825 |  |  | 318,358 |  |  |  |
Return on average tangible common equity (non-GAAP) (annualized) | 16.91 | % |  | 16.70 | % |  |  |

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NON-GAAP FINANCIAL MEASURES (continued)

| (unaudited) |  |
| Three Months Ended |  |
| March 31, |  |
| 2022 |  | 2021 |  |  |
Calculation of non-interest income excluding net realized gains on available-for-sale securities: |  |  |  |  |  |
Non-interest income | $ | 9,654 |  |  | $ | 8,239 |  |  |  |
Less: net realized gains on available-for-sale securities | 651 |  |  | 0 |  |  |  |
Adjusted non-interest income | $ | 9,003 |  |  | $ | 8,239 |  |  |  |

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I TEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a financial institution, the Corporation’s primary source of market risk is interest rate risk, which is the exposure to fluctuations in the Corporation’s future earnings resulting from changes in interest rates. This exposure is correlated to the repricing characteristics of the Corporation’s portfolio of assets and liabilities. Each asset or liability reprices either at maturity or during the life of the instrument.
The principal purpose of asset/liability management is to maximize current and future net interest income within acceptable levels of interest rate risk while satisfying liquidity and capital requirements. Net interest income is enhanced by increasing the net interest margin and the growth in earning assets. As a result, the primary goal of interest rate risk management is to maintain a balance between risk and reward such that net interest income is maximized while risk is maintained at an acceptable level.
The Corporation uses an asset-liability management model to measure the effect of interest rate changes on its net interest income. The Corporation’s management also reviews asset-liability maturity gap and repricing analyses regularly. The Corporation does not always attempt to achieve a precise match between interest sensitive assets and liabilities because it believes that an actively managed amount of interest rate risk is inherent and appropriate in the management of the Corporation’s profitability.
Asset-liability modeling techniques and simulation involve assumptions and estimates that inherently cannot be measured with precision. Key assumptions in these analyses include maturity and repricing characteristics of assets and liabilities, prepayments on amortizing assets, non-maturing deposit sensitivity, and loan and deposit pricing. These assumptions are inherently uncertain due to the timing, magnitude, and frequency of rate changes and changes in market conditions and management strategies, among other factors. However, the analyses are useful in quantifying risk and provide a relative gauge of the Corporation’s interest rate risk position over time.
Management reviews interest rate risk on a quarterly basis and reports to the ALCO. This review includes earnings shock scenarios whereby interest rates are immediately increased and decreased by 100, 200, 300 and 400 basis points. These scenarios, detailed in the table below, indicate that there would not be a significant variance in net interest income over a one-year period due to interest rate changes; however, actual results could vary significantly. At March 31, 2022 and December 31, 2021, all interest rate risk levels according to the model were within the tolerance limits of ALCO-approved policy. In addition, the table does not take into consideration changes that management would make to realign its assets and liabilities in the event of an unexpected changing interest rate environment. Due to the current interest rate environment, the 300 and 400 basis point declining interest rate scenarios have been excluded from the table.

| % Change in Net Interest Income
| March 31, 2022 |  | December 31, 2021
+400 basis points | 30.9% |  | 24.6%
+300 basis points | 23.3% |  | 18.0%
+200 basis points | 16.3% |  | 12.4%
+100 basis points | 9.0% |  | 6.3%
-100 basis points | (3.3)% |  | (6.3)%
-200 basis points | (7.4)% |  | (10.7)%

At March 31, 2022, the Corporation has approximately $1.8 billion in outstanding loan balances that are rate sensitive over the next twelve months.
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I TEM 4
CONTROLS AND PROCEDURES
The Corporation’s management, under the supervision of and with the participation of the Corporation’s Principal Executive Officer and Principal Financial Officer, has carried out an evaluation of the design and effectiveness of the Corporation’s disclosure controls and procedures as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based upon that evaluation, management, including the Principal Executive Officer and Principal Financial Officer, have concluded that, as of the end of such period, the Corporation’s disclosure controls and procedures are effective to provide reasonable assurance that all material information required to be disclosed in reports the Corporation files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.
There was no significant change in the Corporation’s internal control over financial reporting that occurred during the quarter ended March 31, 2022 that has materially affected, or that is reasonably likely to materially affect, our internal control over financial reporting.
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P ART II
O THER I NFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Corporation or any of its subsidiaries is a party, or of which any of their properties is the subject, except ordinary routine proceedings which are incidental to the business.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors disclosed in Part I, Item 1A of the 2021 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table provides information with respect to any purchase of shares of the Corporation’s common stock made by or on behalf of the Corporation for the three months ended March 31, 2022.

Period | Total Number of Shares Purchased |  | Average Price Paid per Common Share |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | Maximum Number (or approximate dollar value) of Shares that May Yet Be Purchased Under the Plans or Programs (1)
January 1 – 31, 2022 | 0 |  |  | $ | 0 |  |  | 0 |  |  | 146,772 |
February 1 – 28, 2022 | 0 |  |  | 0 |  |  | 0 |  |  | 146,772 |
March 1 – 31, 2022 | 50,166 |  |  | 26.75 |  |  | 50,166 |  |  | 96,606 |

(1) The Corporation’s stock repurchase program, which was approved by the Corporation's Board of Directors on November 12, 2014, authorizes the repurchase of up to 500,000 shares of common stock. The program will remain in effect until fully utilized or until modified, suspended or terminated. As of March 31, 2022, there were 96,606 shares remaining in the program.
Additionally, during the quarter ended March 31, 2022, certain employees surrendered shares of common stock owned by them to satisfy their statutory minimum U.S. federal and state tax obligations associated with the vesting of shares of restricted common stock issued under the CNB Financial Corporation 2019 Omnibus Incentive Plan.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS

Exhibit No. |  | Description
10.1(1) |  | Letter Agreement, dated April 4, 2022, among CNB Bank and Joseph E. Dell, Jr. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 4, 2022)
31.1 |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS |  | Inline XBRL Instance Document
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF |  | Inline XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101)

(1) Indicates a management contract or compensatory plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  |  |  |  |  | CNB FINANCIAL CORPORATION
|  |  |  |  |  | (Registrant)
DATE: May 5, 2022 |  |  |  |  |  | /s/ Joseph B. Bower, Jr.
|  |  |  |  |  | Joseph B. Bower, Jr.
|  |  |  |  |  | President and Chief Executive Officer
|  |  |  |  |  | (Principal Executive Officer)
DATE: May 5, 2022 |  |  |  |  |  | /s/ Tito L. Lima
|  |  |  |  |  | Tito L. Lima
|  |  |  |  |  | Treasurer
|  |  |  |  |  | (Principal Financial and Accounting Officer)

63