Market Overview

Commercial National Financial Corporation Reports 4th Quarter 2017 Earnings

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ITHACA, Mich., Jan. 26, 2018 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets:CEFC) today announced fourth quarter 2017 net income of $1,334,000, or $.34 per share compared to fourth quarter 2016 net income of $599,000, or $.18 per share.  Fourth quarter 2016 net income would have been $738,000, or $.23 per share when excluding merger-related expenses for the merger with Capital Directions, Inc., the holding company for Mason State Bank.

Net income for the year ended December 31, 2017 was $3,419,000, or $.86 per share compared to net income for 2016 of $2,598,000, or $.80 per share. 

Total assets were $526.4 million at December 31, 2017 compared to $400.4 million at December 31, 2016.   Total loans grew $79 million, or 25.4% year over year.  Most of the increase in total loans was related to the merger with Mason State Bank with the remainder related to commercial loan growth.  The lending environment remains very competitive in our markets.  We are continuing our efforts to increase loan volume while maintaining our credit quality standards. 

For the quarter ended December 31, 2017, net interest income increased $1,131,000, or 39.3% primarily due to the growth in loans mentioned above as compared to the December 31, 2016 quarter.  In addition, $252,000 of interest income was recorded related to the payoff of several non-accrual and purchased-impaired loans.  The provision for loan losses decreased $31,000 due to a lower trend in historical losses as well as net recoveries recorded for the year.  Non-interest income increased $79,000, or 21.9% for the quarter ended December 31, 2017 compared to December 31, 2016 quarter primarily due to combining both banks.  Operating expenses increased by $165,000, or 7% 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
      Year Ended
 
    December 31,
      December 31,
 
    2017       2016       2017     2016  
Return on Equity (ROE)   15.91 %     9.59 %     10.41 %   10.62 %
Return on Assets (ROA)   1.00       .59       .65     .65  
Net Interest Margin   3.23       3.08       3.05     3.02  
                   
    December 31,                
    2017       2016                
Non-performing Assets Ratio   .53 %     .58 %              
Tier 1 Leverage Capital(1)   7.94       8.45                
Total Risk-based Capital(1)   13.43       13.91                
Book Value Per Share $ 8.28     $ 7.56                
Market Value Per Share   12.00       11.99                
                             
(1) Ratios are for Commercial Bank.                            
                             

 

                                     
Consolidated Statements of Income ($ in 000's except per share data):                                    
    Quarter Ended      Year Ended
    December 31,     December 31,
    2017     2016     2017     2016
Interest Income   $ 5,085       $ 3,685       $ 19,140       $ 14,484
Interest Expense     1,076         807         4,127         3,233
Net Interest Income     4,009         2,878         15,013         11,251
Provision for loan losses     (75 )       (44 )       (150 )       -
Non-interest income     439         360         1,984         1,538
Operating Expenses     2,531         2,366         12,246         9,051
Income before taxes     1,992         916         4,901         3,738
Income tax expense     658         317         1,482         1,140
Net Income   $ 1,334       $ 599       $ 3,419       $ 2,598
Net Income per share – basic   $ 0.34       $ 0.18       $ 0.86       $ 0.80
Net Income per share – diluted   $ 0.34       $ 0.18       $ 0.86       $ 0.80
Dividends declared   $ 0.13       $ 0.13       $ 0.52       $ 0.52
                                     
                                     
Consolidated Balance Sheets ($ in 000's):                                    
    December 31,                  
    2017      2016                  
Assets                                    
Cash and cash equivalents   $ 20,348       $ 8,440                    
Time deposits with other banks     53,039         35,818                    
Securities     36,365         26,365                    
Loans     389,660         310,700                    
Allowance for loan losses     (2,681 )       (2,692 )                  
Loans, net     386,979         308,008                    
Bank premises and equipment     6,972         4,784                    
Other assets     22,670         16,952                    
Total Assets   $ 526,373       $ 400,367                    
                                     
Liabilities                                    
Deposits   $ 416,622       $ 317,286                    
Other borrowings     59,532         44,342                    
Trust preferred     13,403         10,310                    
Other liabilities     3,985         3,833                    
Total Liabilities     493,542         375,771                    
                                     
Equity                                    
Common stock and paid in capital     20,517         13,573                    
Retained earnings     12,465         11,083                    
Accumulated OCI     (151 )       (60 )                  
Total Equity     32,831         24,596                    
Total Liabilities and Equity   $ 526,373       $ 400,367                    
                                     

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

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