Commercial National Reports March 31, 2018 Earnings Increase

LATROBE, PA / ACCESSWIRE / April 25, 2018 / Commercial National Financial Corporation (OTCQX: CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended March 31, 2018. The Company earned $1,040,000 (or $0.36 per average share outstanding) in the first quarter 2018 compared to $1,014,000 (or $0.35 per average share outstanding) in the first quarter of 2017.

The Company’s annualized return on average assets and average equity for the quarter ended March 31, 2018 were 1.08% and 7.07%, respectively, compared to 1.07% and 7.29%, respectively, for the quarter ended March 31, 2017. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios for March 31, 2018 were 22.43%, 22.95%, 14.65% and 22.43%, respectively. First quarter tax equivalent net interest margin was 4.21%. The effective tax rate for the quarter ended March 31, 2018 was 10.42%. 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.

As disclosed each year in the Annual Report to Shareholders, on March 31, 2018, the Company employed 99 people in full-time and part-time positions. Forty-seven (47) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, Thirty-five (35) employees are full-time and twelve (12) employees are part-time. The Company has had unionized employees since 1972. In 2013, the Company and the bargaining unit entered into a labor agreement that will expire in February 2019. 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.

Contact Information:

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

COMMERCIAL NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

(Dollars in thousands, except per share data)

March 31,

December 31

March 31,

2018

2017

ASSETS

Cash and due from banks on demand

$
3,163

$
4,933

$
4,954

Interest bearing deposits with banks

Cash and Cash Equivalents

3,207

4,982

5,013

Securities available for sale

153,582

145,669

162,101

Restricted investments in bank stock

894

412

1,554

Loans

206,969

209,661

212,406

Allowance for loan losses

(1,289)

(1,250)

(1,288)

Net loans

205,680

208,411

211,118

Premises and equipment

2,919

2,946

3,035

Investment in life insurance

19,365

19,230

18,818

Other assets

4,606

4,369

3,118

Total assets

$
390,253

$
386,019

$
404,757

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities

Deposits

Non-interest bearing

$
120,765

$
121,861

$
116,428

Interest bearing

194,828

196,386

191,076

Total deposits

315,593

318,247

307,504

Short-term borrowings

15,265

5,650

38,606

Other liabilities

876

2,096

2,431

Total liabilities

331,734

325,993

348,541

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 2018 and 2017

7,200

Retained earnings

62,011

61,715

59,440

Accumulated other comprehensive income

1,852

3,655

2,120

Treasury stock, at cost, 739,047 shares

in 2018 and 2017

(12,544)

Total shareholders’ equity

58,519

60,026

56,216

Total liabilities and shareholders’ equity

$
390,253

$
386,019

$
404,757

COMMERCIAL NATIONAL FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

March 31,

2018

2017

INTEREST INCOME

Interest and fees on loans

$
2,230

$
2,223

Interest and dividends on securities:

Taxable

1,039

688

Exempt from federal income taxes

468

670

Other

Total Interest income

3,749

3,593

INTEREST EXPENSE

Interest on deposits

101

Interest on short term borrowings

Total Interest expense

158

113

NET INTEREST INCOME

3,591

3,480

PROVISION FOR LOAN LOSSES

–

NET INTEREST INCOME AFTER

PROVISION FOR LOAN LOSSES

3,591

3,480

OTHER OPERATING INCOME

Asset management and trust income

356

309

Service charges on deposit accounts

177

185

Loss on sale of OREO

–

(6)

Income from investment in life insurance

127

136

Other income

101

Total other operating income

739

725

OTHER OPERATING EXPENSES

Salaries and employee benefits

1,830

1,748

Net occupancy expense

217

218

Furniture and equipment

122

125

Pennsylvania shares tax

128

122

Legal and professional

120

FDIC Insurance

Other expenses

723

685

Total other operating expenses

3,169

3,009

INCOME BEFORE INCOME TAXES

1,161

1,196

Income tax expense

121

182

Net income

$
1,040

$
1,014

Average Shares Outstanding

2,860,953

Earnings Per Share

$
0.36

$
0.35

SOURCE: Commercial National Financial Corporation

ReleaseID: 497441

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