Market Overview

Commercial National Financial Corporation Reports 3rd Quarter 2017 Earnings

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ITHACA, Mich., Oct. 26, 2017 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets:CEFC) today announced third quarter 2017 net income of $1,248,000 or $.31 per share compared to third quarter 2016 net income of $673,000, or $.21 per share.  Third quarter 2016 net income would have been $809,000, or $.25 per share when excluding merger-related expenses for the merger with Capital Directions, Inc., the holding company for Mason State Bank.

Total assets were $528.8 million at September 30, 2017 compared to $399.8 million at September 30, 2016.   Total loans grew $87.3 million, or 29.2% year over year.  Most of the loan growth was related to the merger with Mason State Bank with the remainder related to commercial loan originations.  We are continuing our efforts to increase loan volume while maintaining our credit quality standards. 

For the quarter ended September 30, 2017, net interest income increased $879,000, or 30.4% primarily due to the growth in loans mentioned above as compared to the September 30, 2016 quarter.  In addition, $141,000 of interest income recorded was related to the payoff of several non-accrual loans.  The provision for loan losses decreased $76,000 due to a lower trend in historical losses as well as net recoveries recorded for the quarter and year-to-date periods.  Non-interest income increased $140,000, or 34.5% for the quarter ended September 30, 2017 compared to September 30, 2016 quarter primarily due to combining both banks.  Operating expenses increased by $286,000, or 12.3% mostly due to combining both banks. 

Commercial National Financial Corporation operates through a single subsidiary bank, Commercial Bank.   Visit www.commercial-bank.com to view the latest consolidated Annual Report, news releases and other information about CEFC and Commercial Bank.


Selected Financial Data (unaudited):

     
  Quarter Ended Nine Months Ended
  September 30, September 30,
    2017     2016   2017   2016  
                     
Return on Equity (ROE)   15.19 %   10.86 % 8.56 % 10.97 %
Return on Assets (ROA)   .94     .68   .53   .67  
Net Interest Margin   3.06     3.04   2.99   2.99  
         
         
  September 30,    
    2017     2016      
Non-performing Assets Ratio        .52%     .56%      
Tier 1 Leverage Capital(1)   7.97     8.53      
Total Risk-based Capital(1)   13.43     14.22      
Book Value Per Share $ 8.31   $ 7.60      
Market Value Per Share   11.70     10.55      
         

(1) Ratios are for Commercial Bank.


Consolidated Statements of Income ($ in 000's except per share data):

     
  Quarter Ended Nine Months Ended
  September 30, September 30,
    2017     2016   2017     2016
         
Interest Income $ 4,816   $ 3,620   $ 14,056   $ 10,798
Interest Expense   1,048       731   3,051     2,425
Net Interest Income   3,768     2,889   11,005     8,373
Provision for loan losses   (75 )   1   (75 )   45
Non-interest income   546     406   1,545     1,178
Operating Expenses   2,603      2,317   9,715      6,685
Income before taxes   1,786     976   2,909     2,821
Income tax expense   538       303   824     823
Net Income $ 1,248   $   673   $ 2,085   $ 1,998
Net Income per share – basic $ 0.31   $ 0.21   $ 0.53   $ 0.61
Net Income per share – diluted      $ 0.31   $ 0.21   $ 0.53   $ 0.61
Dividends declared $ 0.13   $ 0.13   $ 0.39   $ 0.39


Consolidated Balance Sheets ($ in 000's):

   
  September 30,
    2017     2016  
Assets    
Cash and cash equivalents $ 20,787   $ 18,049  
Time deposits with other banks   53,039     35,818  
Securities   38,561     26,973  
Loans   388,750     301,420  
Allowance for loan losses     (2,767 )     (2,744 )
Loans, net   385,983     298,676  
Bank premises and equipment   6,947     4,520  
Other assets   23,506     15,796  
Total Assets $ 528,823   $ 399,832  
     
Liabilities    
Deposits $ 418,006   $ 319,470  
Other borrowings   60,331     42,222  
Trust preferred   13,403     10,310  
Other liabilities   4,133     3,123  
Total Liabilities   495,873     375,125  
     
Equity    
Common stock and paid in capital        21,237     13,573  
Retained earnings   11,622     10,906  
Accumulated OCI   91     228  
Total Equity   32,950     24,707  
Total Liabilities and Equity $ 528,823   $ 399,832  
             

Contact:
Kevin A. Twardy
CFO and COO
989-875-5528

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