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Commercial National Financial Corporation Reports 4th Quarter 2018 Earnings

ITHACA, Mich., Jan. 23, 2019 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced fourth quarter 2018 net income of $1,076,000, or $.27 per share compared to fourth quarter 2017 net income of $1,334,000, or $.34 per share.  Return on Equity (ROE) was 12.3% for the fourth quarter of 2018 compared to 15.9% for the fourth quarter of 2017.

Total assets were $527.4 million at December 31, 2018 compared to $526.4 million at December 31, 2017.   Total loans of $375 million decreased $14.7 million, or 3.8% year-over-year.  The lending environment remains very competitive in our markets and we experienced a number of large commercial loan payoffs during 2018. 

For the quarter ended December 31, 2018, net interest income decreased $448,000, or 11.2% as compared to the prior year’s quarter primarily due to a higher cost of funds and lower loan interest income.  The prior year’s quarter included loan interest income of $252,000 related to the payoff of several non-accrual loans.  Non-interest income increased $38,000, or 8.7% primarily due to higher mortgage banking revenue.  Operating expenses increased by $140,000, or 5.5% primarily due to higher wages and benefits expense.  Federal income tax expense was lower by $368,000 primarily due to the decrease in pre-tax income and in the statutory rate from 34% to 21%.

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 December 31,   Year Ended December 31,
    2018       2017     2018     2017  
Return on Equity (ROE)   12.30 %     15.91 %   13.28 %   10.41 %
Return on Assets (ROA)   0.81 %     1.00 %   0.86 %   0.65 %
Net Interest Margin   2.88 %     3.23 %   2.92 %   3.05 %
               
  December 31,        
    2018       2017          
Non-performing Assets Ratio   0.35 %     0.53 %        
Tier 1 Leverage Capital(1)   8.42 %     7.94 %        
Total Risk-based Capital(1)   14.36 %     13.43 %        
Book Value Per Share $ 8.85     $ 8.28          
Market Value Per Share $ 11.49     $ 12.00          
(1) Ratios are for Commercial Bank.              
               


Consolidated Statements of Income (unaudited):        
  Quarter Ended December 31,   Year Ended December 31,
    2018     2017       2018     2017  
Interest Income $  4,941,598   $  5,084,876     $  19,248,659   $  19,140,345  
Interest Expense    1,381,420      1,076,326        5,010,923      4,127,266  
Net Interest Income    3,560,178      4,008,550        14,237,736      15,013,079  
Provision for loan losses    -       (75,000 )      -       (150,000 )
Non-interest income    477,311      439,166        1,989,948      1,984,093  
Operating Expenses    2,671,603      2,531,237        10,718,118      12,246,358  
Income before taxes    1,365,886      1,991,479        5,509,566      4,900,814  
Income tax expense    290,149      657,719        1,008,000      1,481,719  
Net Income $  1,075,737   $  1,333,760     $  4,501,566   $  3,419,095  
Net Income per share – diluted $  0.27   $  0.34     $  1.14   $  0.86  
Dividends declared $  0.13   $  0.13     $  0.52   $  0.52  
               


Consolidated Balance Sheets (unaudited):            
  December 31,                        
    2018       2017          
Assets              
Cash and cash equivalents $  31,715,786     $  20,348,244          
Time deposits with other banks    53,036,000        53,039,000          
Securities    39,551,366        36,365,362          
Loans    374,975,157        389,659,820          
Allowance for loan losses    (2,672,568 )      (2,680,743 )        
Loans, net    372,302,589        386,979,077          
Premises and equipment, net    8,295,195        6,972,170          
Other assets    22,466,636        22,669,726          
Total Assets $  527,367,572     $  526,373,579          
               
Liabilities              
Deposits $  421,030,232     $  416,622,495          
Other borrowings    55,024,250        59,531,566          
Trust preferred    13,403,000        13,403,000          
Other liabilities    2,798,839        3,985,188          
Total Liabilities    492,256,321        493,542,249          
               
Equity              
Total Equity    35,111,251        32,831,330          
Total Liabilities and Equity $  527,367,572     $  526,373,579          


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

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