Commercial National Reports Increased September 30, 2019 Earnings

LATROBE, PA / ACCESSWIRE / October 24, 2019 / Commercial National Financial Corporation (OTCQX:CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended September 30, 2019. The Company earned $1,277,000 (or $0.45 per average share outstanding) in the third quarter 2019 compared to $1,125,000 (or $0.39 per average share outstanding) in the third quarter of 2018. The Company earned $3,517,000 (or $1.23 per average share outstanding) for the nine-month period ended September 30, 2019 and $3,202,000 (or $1.12 per average share outstanding) for the nine-month period ended September 30, 2018.

Third quarter earnings increased $152,000, or 13.51%, while nine month earnings increased $315,000, or 9.83%, in 2019 relative to prior time periods for 2018. The Company's annualized return on average assets for the quarter ended September 30, 2019 was 1.20%, compared to 1.08% for the quarter ended September 30, 2018. The Company's annualized return on average assets for the nine-month period ended September 30, 2019 was 1.11% compared to 1.07% for the nine-month period ended September 30, 2018. The Company's very large AFS bond portfolio net unrealized market value gains, which represented 7.99% of book value at third quarter-end, have materially influenced selected diagnostic calculations thus far in 2019. Third quarter tax equivalent net interest margin was 4.11%. The effective tax rate for the quarter ended September 30, 2019 was 11.93% and the first nine month effective tax rate was 9.86%. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios for September 30, 2019 were 20.89%, 21.40%, 13.51% and 20.89%, 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. In September 2019, the Company declared a special cash dividend of $1.00 per share payable on October 4, 2019.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 472,975 shares, or 16.53% on September 30, 2019.

As disclosed each year in the Annual Report to Shareholders, on September 30, 2019, the Company employed 97 people in full-time and part-time positions. Forty-five (45) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, Thirty-five (35) employees are full-time and ten (10) 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.

Contact Information:

Wendy S. Piper
First 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)

September 30,

December 31,

September 30,

2019

2018

2018

ASSETS

Cash and due from banks on demand

$
9,083

$
5,642

$
8,183

Interest bearing deposits with banks

45

59

50

Total cash and cash equivalents

9,128

5,701

8,233

Securities available for sale

158,796

159,741

160,194

Restricted investments in bank stock

1,319

1,411

1,563

Loans

237,717

227,747

226,132

Allowance for loan losses

(1,374
)

(1,349
)

(1,348
)

Net loans

236,343

226,398

224,784

Premises and equipment

2,674

2,800

2,889

Investment in Life Insurance

20,172

19,767

19,633

Other assets

3,322

3,808

4,530

Total assets

$
431,754

$
419,626

$
421,826

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Deposits:

Non-interest bearing

$
134,091

$
128,437

$
130,450

Interest bearing

192,094

197,482

195,706

Total deposits

326,185

325,919

326,156

Short-term borrowings

33,551

32,822

37,155

Other liabilities

6,569

1,351

1,067

Total liabilities

366,305

360,092

364,378

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 2019 and 2018

7,200

7,200

7,200

Retained earnings

61,510

63,085

62,686

Accumulated other comprehensive income

9,283

1,793

106

Less treasury stock, at cost, 739,047 shares in 2019 and 2018

(12,544
)

(12,544
)

(12,544
)

Total shareholders' equity

65,449

59,534

57,448

Total liabilities and shareholders' equity

$
431,754

$
419,626

$
421,826

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

Three Months

Nine Months

Ended September 30

Ended September 30

2019

2018

2019

2018

(unaudited)

(unaudited)

(unaudited)

(unaudited)

INTEREST INCOME:

Interest and fees on loans

$
2,657

$
2,397

$
7,830

$
6,882

Interest and dividends on securities:

Taxable

1,044

1,097

3,142

3,234

Exempt from federal income taxes

471

601

1,568

1,575

Other

28

23

91

51

Total Interest income

4,200

4,118

12,631

11,742

INTEREST EXPENSE:

Interest on deposits

193

147

570

373

Interest on short-term borrowings

179

212

688

384

Total Interest expense

372

359

1,258

757

NET INTEREST INCOME

3,828

3,759

11,373

10,985

PROVISION FOR LOAN LOSSES

–

–

–

–

NET INTEREST INCOME AFTER

PROVISION FOR LOAN LOSSES

3,828

3,759

11,373

10,985

OTHER OPERATING INCOME:

Asset management and trust income

421

318

1,092

995

Service charges on deposit accounts

186

185

540

547

Net Security loses

–

(11
)

(7
)

(11
)

Gain on sale of OREO

–

–

4

–

Income from investment in life insurance

130

131

380

378

Other income

32

41

132

170

Total other operating income

769

664

2,141

2,079

OTHER OPERATING EXPENSES:

Salaries and employee benefits

1,868

1,795

5,641

5,421

Net occupancy expense

200

212

620

639

Furniture and equipment

95

189

309

369

Pennsylvania shares tax

142

142

426

412

Legal and professional

100

89

275

323

FDIC insurance expense

–

28

56

84

Other expenses

742

725

2,285

2,257

Total other operating expenses

3,147

3,180

9,612

9,505

INCOME BEFORE INCOME TAXES

1,450

1,243

3,902

3,559

Income tax expense

173

118

385

357

Net income

$
1,277

$
1,125

$
3,517

$
3,202

Average Shares Outstanding

2,860,953

2,860,953

2,860,953

2,860,953

Earnings Per Share

$
0.45

$
0.39

$
1.23

$
1.12

SOURCE: Commercial National Financial Corporation

ReleaseID: 564042

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