Upgraded rating good news for CNB Financial Corp. - The Business Review (Albany):

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Only six months ago, shares of the Canajohari e company (Nasdaq: CNBF) were getting beaten up by the They hit anew 52-week low in late Septembetr and seemed doomed to languish at less than $10 a Bank shares in general began slidin more than a year ago, when investorsa turned to technology issues. But CNB, parent to Central National Bank and Central AssetrManagement Inc., was hit harder than most. Donaled Brass, CEO of CNB, attributec this to the fact that thecompany had, for a traded at higher multiplexs than other banking stocks. "Our price-to-earninge ratio started out aboveother banks, then was even with them, and then fell below them," Brass said.
CNB shares began inching upwarxd earlierthis year, when the Federal Reservwe cut interest rates and some investors rediscovered bank stocks. But it really took off when the company got a valentine from NewYork City-basec CIBC World Markets. CIBC analyst Peter Winter initiated coverage ofCNB Feb. 14, callingg it a "buy." At the time, the stocm was trading for $11.87 a share, giving it a price-to-earnings ratio 18 percent below its peer group of small bankds inthe Northeast. "We thought the discount was because we were lookingfor above-averag e earnings-per-share growth, at 14 percent this year and 12 percent next Winter said.
"For the peer group, we're looking at 10 percent for both years." Winter said he based his estimates on CNB's heavy investment in its businessz over the past few years, positioning the companyu for growth. First, it increase d its branch network by 50 percenft to a total of28 offices, including five purchasedd in April 1999 from Astoriq Federal Savings and Loan Association. Winter notedx that new branches typically take about a year tobreao even. This would include the Astoria branches because they had justbeen deposit-taker under the Queens bank.
This meana the new offices should breakk even in the first half of this year and turn a profi for CNB in thesecond half, Winter The analyst also liked the fact that CNB hiresd KPMG LLP, a Big 5 CPA and consultinbg firm, to help it strengthejn its sales and customer-service efforts and enhance its use of The company also bolstered its managementg ranks by adding 11 new Finally, CNB took steps to cleah up its balance sheet, writingy down some debt securitiess and two large loans that accounted for nearlh half of its non-performing assets as of Dec. 31. "The company has been in a transitiohn period, and everything should come togethein 2001," Winter said.
Brasd said he is gratified by Winter's comments. "As you're dointg it, you're saying in you're mind, `I think we're doing the right things, I think we're heading in the right direction,' he said. "But it can take so long to see youcan second-guess To have someone else look from the outside in and say they like the compang and like the stock makes me very Others apparently decided they liked the stock, too. A week aftee Winter's report was released, CNB stockl hit a new 52-week high of $14.50 a share.