Commercial National Reports June 30, 2019 Earnings

LATROBE, PA / ACCESSWIRE / July 26, 2019 / Commercial National Financial Corporation (OTCQX: CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended June 30, 2019. The Company earned $1,032,000 (or $0.36 per average share outstanding) in the second quarter 2019 compared to $1,037,000 (or $0.36 per average share outstanding) in the second quarter of 2018. The Company earned $2,240,000 (or $0.78 per average share outstanding) for the six-month period ended June 30, 2019 and $2,077,000 (or $0.73 per average share outstanding) for the six-month period ended June 30, 2018.

The Company’s annualized return on average assets for the quarter ended June 30, 2019 was 0.98%, compared to 1.05% for the quarter ended June 30, 2018. The Company’s annualized return on average assets for the six-month period ended June 30, 2019 was 1.07% compared to 1.06% for the six-month period ended June 30, 2018. The Company’s very large AFS bond portfolio net unrealized market value gains, which represented 5.45% of book value at second quarter-end, have materially influenced ROA and ROE calculations thus far in 2019. Second quarter tax equivalent net interest margin was 4.03%. The effective tax rate for the quarter ended June 30, 2019 was 10.90% and the first six month effective tax rate was 8.70%. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios for June 30, 2019 were 22.05%, 22.57%, 14.01% and 22.05%, 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 472,975 shares, or 16.53% on June 30, 2019.

As disclosed each year in the Annual Report to Shareholders, on June 30, 2019, the Company employed 98 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)

June 30,

December 31

June 30,

2019

2018

ASSETS

Cash and due from banks on demand

$
4,730

$
5,642

$
5,017

Interest bearing deposits with banks

2,081

Total cash and cash equivalents

6,811

5,701

5,082

Securities available for sale

162,326

159,741

165,791

Restricted investments in bank stock

1,656

1,411

1,278

Loans

230,469

227,747

212,768

Allowance for loan losses

(1,374
)

(1,349
)

(1,289
)

Net loans

229,095

226,398

211,479

Premises and equipment

2,756

2,800

2,943

Investment in Life Insurance

20,034

19,767

19,493

Other assets

3,792

3,808

4,003

Total assets

$
426,470

$
419,626

$
410,069

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:

Deposits:

Non-interest bearing

$
128,333

$
128,437

$
119,561

Interest bearing

188,714

197,482

196,677

Total deposits

317,047

325,919

316,238

Short-term borrowings

41,684

32,822

34,338

Other liabilities

2,622

1,351

877

Total liabilities

361,353

360,092

351,453

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

Retained earnings

63,838

63,085

62,305

Accumulated other comprehensive (loss) income

6,623

1,793

1,655

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

(12,544
)

Total shareholders’ equity

65,117

59,534

58,616

Total liabilities and shareholders’ equity

$
426,470

$
419,626

$
410,069

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

Three Months

Six Months

Ended June 30

2019

2018

2019

2018

(unaudited)

INTEREST INCOME:

Interest and fees on loans

$
2,582

$
2,255

$
5,173

$
4,485

Interest and dividends on securities:

Taxable

1,047

1,098

2,098

2,137

Exempt from federal income taxes

538

506

1,097

974

Other

Total Interest income

4,196

3,875

8,431

7,624

INTEREST EXPENSE:

Interest on deposits

190

125

377

226

Interest on short-term borrowings

257

115

509

172

Total Interest expense

447

240

886

398

NET INTEREST INCOME

3,749

3,635

7,545

7,226

PROVISION FOR LOAN LOSSES

–

NET INTEREST INCOME AFTER

PROVISION FOR LOAN LOSSES

3,749

3,635

7,545

7,226

OTHER OPERATING INCOME:

Asset management and trust income

331

321

671

677

Service charges on deposit accounts

185

354

362

Net Security losses

(4
)

–

(7
)

–

Gain on sale of OREO

–

Income from investment in life insurance

124

120

250

247

Other income

100

129

Total other operating income

672

676

1,372

1,415

OTHER OPERATING EXPENSES:

Salaries and employee benefits

1,906

1,796

3,773

3,626

Net occupancy expense

202

210

420

427

Furniture and equipment

108

214

180

Pennsylvania shares tax

142

284

270

Legal and professional

114

175

234

FDIC insurance expense

Other expenses

780

809

1,543

1,532

Total other operating expenses

3,263

3,156

6,465

6,325

INCOME BEFORE INCOME TAXES

1,158

1,155

2,452

2,316

Income tax expense

126

118

212

239

Net income

$
1,032

$
1,037

$
2,240

$
2,077

Average Shares Outstanding

2,860,953

Earnings Per Share

$
0.36

$
0.78

$
0.73

SOURCE: Commercial National Financial Corporation

ReleaseID: 553573

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