×

Commercial National Financial Corporation Reports 2nd Quarter 2016 Earnings

ITHACA, Mich., July 27, 2016 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets:CEFC) today announced 2016 second quarter net income of $689,000, or $.21 per share compared to 2015 second quarter net income of $687,000, or $.21 per share. Excluding merger-related expenses of the previously announced merger with Capital Directions, Inc., the holding company for Mason State Bank, second quarter 2016 net income was $750,000, or $.23 per share.

Total assets were $397.9 million at June 30, 2016 compared to $376.6 million at June 30, 2015. Total loans grew $14.7 million, or 5.2% when comparing June 30, 2016 to June 30, 2015. The majority of loan growth occurred in the commercial loan portfolio. We have experienced increased residential mortgage loan activity with the continued low interest rate environment and an uptick in home listings and new construction loans. We are continuing our efforts to increase loan volume while maintaining our credit quality standards.

For the quarter ended June 30, 2016, net interest income increased $124,000, or 4.7% due to growth in interest-earning assets, partially offset by lower interest margin compared to the quarter ended June 30, 2015. Provision for loan losses expense decreased by $95,000 due to improved credit quality metrics. Loss share reimbursement revenue, a component of non-interest income, decreased by $65,000 primarily due to its linkage to the lower provision for loan losses expense. Loss share reimbursement revenue represents an expected reimbursement from the FDIC of 80% of losses on covered loans acquired in 2010 in the FDIC-assisted transaction of MainStreet Savings Bank. Operating expenses increased by $230,000 primarily due to merger-related cost of $93,000.

Commercial National Financial Corporation operates through a single subsidiary bank, Commercial Bank, with full-service banking offices in Alma, Greenville, Hastings, Ithaca, Lake Odessa, Middleton and St. Louis and loan production offices in Grand Rapids and Mount Pleasant, Michigan. 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 June 30, Six Months Ended June 30,
2016 2015 2016 2015
Return on Equity (ROE) 11.39% 11.85% 11.03 11.59
Return on Assets (ROA) .69 .74 .67 .71
Interest Margin 2.93 3.06 2.93 3.10
June 30,
2016 2015
Non-performing Assets Ratio .42% .69%
Tier 1 Leverage Capital(1) 8.35 8.72
Total Risk-based Capital(1) 14.50 15.24
Book Value Per Share$7.52 $7.13
(1) Ratios are for Commercial Bank.

Consolidated Statements of Income ($ in 000’s except per share data):
Quarter Ended June 30,Six Months Ended June 30,
2016 2015 2016 2015
Interest Income$3,611 $3,463 $7,179 $7,031
Interest Expense 840 816 1,695 1,662
Net Interest Income 2,771 2,647 5,484 5,369
Provision for loan losses 11 106 43 212
Non-interest income 419 435 772 878
Operating Expenses 2,216 1,986 4,368 4,171
Income before taxes 963 990 1,845 1,864
Income tax expense 274 303 520 540
Net Income$689 $687 $1,325 $1,324
Net Income per share – basic$0.21 $0.21 $0.41 $0.41
Net Income per share – diluted$0.21 $0.21 $0.41 $0.41

Consolidated Balance Sheets ($ in 000’s):
June 30,
2016 2015
Assets
Cash and cash equivalents$13,830 $11,402
Time deposits with other banks 41,548 19,554
Securities 28,979 45,270
Loans 296,230 281,551
Allowance for loan losses (2,705) (2,575)
Loans, net 293,525 278,976
Bank premises and equipment 4,261 4,329
Other assets 15,789 17,044
Total Assets$397,932 $376,575
Liabilities
Deposits$318,033 $300,461
Other borrowings 41,761 38,941
Trust preferred 10,310 10,310
Other liabilities 3,362 3,669
Total Liabilities 373,466 353,381
Equity
Common stock and paid in capital 13,573 13,573
Retained earnings 10,656 9,661
Accumulated OCI 237 (40)
Total Equity 24,466 23,194
Total Liabilities and Equity$397,932 $376,575


Contact: Kevin Twardy CFO and COO (989) 875-5528

Source: Commercial National Financial Corporation