CNB Financial, the parent company of CNB Bank, has agreed to acquire ESSA Bancorp, the parent company of ESSA Bank & Trust, in an all-stock transaction valued at around $214m.
The consideration equates to $21.1 per ESSA Bancorp share, based on CNB Financial’s 10-day volume-weighted average stock price of $24.69 as of 8 January 2025. Both firms are listed on Nasdaq.
Under the terms of the agreement, shareholders of ESSA Bancorp will receive 0.8547 shares of CNB common stock for each ESSA Bancorp share.
The combined company will have total assets of about $8bn, deposits of $7bn, and loans of $6bn.
Headquartered in Pennsylvania, ESSA Bancorp operates 20 community offices across Lehigh Valley, Greater Pocono, Scranton/Wilkes-Barre, and suburban Philadelphia.
ESSA Bank & Trust delivers various commercial and retail financial services, asset management and trust services, investment services through Ameriprise Financial Institutions Group. It also provides insurance benefit services through ESSA Advisory Services.
ESSA Bancorp president, CEO, and director Gary Olson said: “CNB’s multi-state, multi-brand business model fosters our entrepreneurial spirit, and continues our commitment and presence in eastern Pennsylvania.
“Leveraging CNB’s infrastructure and robust capital position, suite of banking products, and combined larger lending limit, will further enhance our community banking model, and continue to serve our new and existing customers extremely well.”
Following the merger, ESSA Bank & Trust will continue operating within its existing geographic footprint as a division of CNB Bank.
The combined entity will focus on accelerating growth in eastern Pennsylvania markets, particularly the Lehigh Valley and Scranton/Wilkes-Barre, by leveraging CNB’s commercial banking expertise and expanding fee-based business lines.
CNB Financial has assets of $6bn. The bank holding firm operates primarily through CNB Bank, which serves clients across Pennsylvania, Ohio, New York, and Virginia through 55 branches and various service offerings.
Its main subsidiary, CNB Bank, is a full-service bank providing banking activities and services, including trust and wealth management services, for individual, business, governmental, and institutional customers.
CNB Financial president and CEO Michael Peduzzi said: “This combination aligns two high performing banks with an exceptional commitment to client-focused services for its customers and financial support to sustain the economic vitality of the communities in which they operate.”
“There are many similarities between the markets of ESSA and our existing CNB locations, as well as with our personal approach to banking.”
The boards of directors of both companies have unanimously approved the transaction.
Subject to shareholder and regulatory approvals, the deal is expected to close in Q3 2025.
For transaction, Stephens is acting as CNB’s financial adviser, with Hogan Lovells US as legal counsel. ESSA Bancorp’s financial adviser is PNC FIG Advisory, and Luse Gorman serves as its legal counsel.
