Commercial National Reports March 31, 2020 Earnings Increase

LATROBE, PA, / ACCESSWIRE / April 22, 2020 / Commercial National Financial Corporation (OTCQX:CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended March 31, 2020. The Company earned $1,816,000 (or $0.63 per average share outstanding) in the first quarter 2020 compared to $1,208,000 (or $0.42 per average share outstanding) in the first quarter of 2019. Life insurance proceeds of $730,000 favorably influenced 2020 earnings results.

First quarter 2020 earnings increased $608,000, or 50.30%, over first quarter 2019 results. The Company’s annualized return on average assets for the quarter ended March 31, 2020 was 1.73%, compared to 1.15% for the quarter ended March 31, 2019. First quarter tax equivalent net interest margin was 4.10%. Asset credit quality metrics remained favorable relative to prevailing COVID-19 driven banking industry norms. The effective tax rate for the quarter ended March 31, 2020 was 7.90%. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios for March 31, 2020 were 21.16%, 21.78%, 13.78% and 21.16%, respectively.

The Company’s strong capital position, supplemented by recent and reasonably anticipated core earnings, remains supportive of the regular $0.26 quarterly common stock cash dividend payments to shareholders. Providing an attractive and reliable cash dividend income stream to all our shareholders through the safe and sound operation of the subsidiary bank is a long-standing top priority for the Company.

Direct and beneficial ownership by executive officers and directors of the Company’s outstanding shares totaled 476,638 shares, or 16.66% on March 31, 2020.

As disclosed each year in the Annual Report to Shareholders, on March 31, 2019, the Company employed 97 people in full-time and part-time positions. Forty-four (44) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, Thirty-five (35) employees are full-time and nine (9) employees are part-time. The Company has had unionized employees since 1972. In October 2018, the agreement between the Company and the bargaining unit was negotiated and subsequently ratified by the bargaining unit with an effective date of February 16, 2019. The labor agreement will expire in February 2024. The Commonwealth of Pennsylvania and the National Labor Relations Board both afford protection to the organized status of pre-existing collective bargaining units. The Company has been advised that bargaining unit status may limit the Company’s strategic options relative to those of non-unionized insured depository institutions. The Company continues to consider this as a factor in its strategic and capital management decisions.

The Company operates nine community banking facilities in Greensburg, Hempfield Township, Latrobe, Ligonier, North Huntingdon, Unity Township and West Newton, Pennsylvania and also maintains a commercial business development sales force throughout its entire market area. The Company operates an asset management and trust division of Commercial Bank & Trust of PA headquartered in Greensburg, Pennsylvania. Commercial Bank & Trust of PA also serves its customer base from an Internet banking site (www.cbthebank.com) and an automated TouchTone Teller banking system.

Safe Harbor Statement

Forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “to,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements are based on information currently available to the Company, and the Company assumes no obligation to update these statements as circumstances change. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including changes in general economic and financial market conditions, unforeseen credit problems, and the Company’s ability to execute its business plans. The actual results of future events could differ materially from those stated in any forward-looking statements herein.

COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands, except per share data)

 
  March 31,     December 31,     March 31,  
 
  2020     2019     2019  
 
                 
ASSETS
                 
Cash and due from banks on demand
  $ 6,015     $ 4,510     $ 5,068  
Interest bearing deposits with banks
    191       47       103  
Cash and Cash Equivalents
    6,206       4,557       5,171  
 
                       
Securities available for sale
    145,670       150,838       160,841  
Restricted investments in bank stock
    1,211       899       1,558  
 
                       
Loans
    239,194       238,407       228,167  
Allowance for loan losses
    (1,663 )     (1,374 )     (1,340 )
Net loans
    237,531       237,033       226,827  
 
                       
Premises and equipment
    2,834       2,618       2,713  
Investment in life insurance
    18,695       20,310       19,901  
Other assets
    4,372       3,319       4,679  
 
                       
Total assets
  $ 416,519     $ 419,574     $ 421,690  
 
                       
LIABILITIES AND SHAREHOLDERS’ EQUITY
                       
Liabilities
                       
Deposits
                       
Non-interest bearing
  $ 133,910     $ 133,362     $ 128,131  
Interest bearing
    192,618       198,986       193,786  
Total deposits
    326,528       332,348       321,917  
 
                       
Short-term borrowings
    25,375       20,200       35,512  
Other liabilities
    3,298       4,102       1,912  
Total liabilities
    355,201       356,650       359,341  
 
                       
Shareholders’ equity
                       
Common stock, par value $2 per share;
                       
10,000,000 shares authorized; 3,600,000
                       
shares issued; 2,860,953 shares
                       
outstanding in 2020 and 2019
    7,200       7,200       7,200  
Retained earnings
    61,626       60,554       63,549  
Accumulated other comprehensive income
    5,036       7,714       4,144  
Treasury stock, at cost, 739,047 shares
                       
in 2020 and 2019
    (12,544 )     (12,544 )     (12,544 )
 
                       
Total shareholders’ equity
    61,318       62,924       62,349  
 
                       
Total liabilities and shareholders’ equity
  $ 416,519     $ 419,574     $ 421,690  
 
                       

COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share data)

 
  Three Months Ended     Three Months Ended  
 
  March 31,     March 31,  
 
  2020     2019  
 
           
INTEREST INCOME
           
Interest and fees on loans
  $ 2,606     $ 2,591  
Interest and dividends on securities:
               
Taxable
    1,037       1,051  
Exempt from federal income taxes
    393       559  
Other
    24       34  
Total Interest income
    4,060       4,235  
 
               
INTEREST EXPENSE
               
Interest on deposits
    159       187  
Interest on short term borrowings
    120       252  
Total Interest expense
    279       439  
 
               
NET INTEREST INCOME
    3,781       3,796  
PROVISION FOR LOAN LOSSES
           
 
               
NET INTEREST INCOME AFTER
               
PROVISION FOR LOAN LOSSES
    3,781       3,796  
 
               
OTHER OPERATING INCOME
               
Asset management and trust income
    343       340  
Service charges on deposit accounts
    160       169  
Net Security losses
          (3 )
Gain on sale of OREO
          4  
Income from investment in life insurance
    111       126  
Life Insurance proceeds
    730        
Other income
    72       64  
Total other operating income
    1,416       700  
 
               
OTHER OPERATING EXPENSES
               
Salaries and employee benefits
    1,964       1,867  
Net occupancy expense
    212       218  
Furniture and equipment
    96       106  
Pennsylvania shares tax
    142       142  
Legal and professional
    101       78  
FDIC Insurance
          28  
Other expenses
    709       763  
Total other operating expenses
    3,224       3,202  
 
               
INCOME BEFORE INCOME TAXES
    1,973       1,294  
Income tax expense
    157       86  
 
               
Net income
  $ 1,816     $ 1,208  
 
               
Average Shares Outstanding
    2,860,953       2,860,953  
 
               
Earnings Per Share
  $ 0.63     $ 0.42  

Contact Information:

Wendy S. Piper
First Senior Vice President
Secretary/Treasurer
wpiper@cbthebank.com
724-537-9923

SOURCE: Commercial National Financial Corporation

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