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Commercial National Financial Corporation Reports 2nd Quarter 2017 Earnings

ITHACA, Mich., July 27, 2017 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets:CEFC) today announced second quarter 2017 net income of $1,043,000, or $.26 per share compared to second quarter 2016 net income of $689,000, or $.21 per share. Second quarter 2016 net income would have been $750,000, or $.23 per share when excluding merger-related expenses of the merger with Capital Directions, Inc., the holding company for Mason State Bank.

Total assets were $522.7 million at June 30, 2017 compared to $397.9 million at June 30, 2016. Total loans grew $86.8 million, or 29.3% year over year. Most of the loan growth was related to the merger with Mason State Bank with the remainder related to commercial loan originations. We are continuing our efforts to increase loan volume while maintaining our credit quality standards.

For the quarter ended June 30, 2017, net interest income increased $865,000, or 31.2% primarily due to the growth in loans mentioned above as compared to the June 30, 2016 quarter. Non-interest income increased $159,000 or 37.8% over the same time frame primarily due to higher service charges and other income levels as a result of combining both banks. In addition, a $61,000 gain was recognized related to the settlement and termination of the Shared Loss Agreement with the FDIC. Operating expenses increased by $507,000 mostly due to combining both banks. The increase in operating expenses also included $42,000 related to the upcoming closing of the Lake Odessa and Leslie branches.

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 June 30,
Six Months Ended June 30,
2017
2016
2017 2016
Return on Equity (ROE)13.08% 11.39% 5.21% 11.03%
Return on Assets (ROA).79 .69 .32 .67
Net Interest Margin2.76 2.93 2.76 2.93
June 30,
2017
2016
Non-performing Assets Ratio .45% .42%
Tier 1 Leverage Capital(1)7.80 8.35
Total Risk-based Capital(1)13.58 14.50
Book Value Per Share$8.13 $7.52
Market Value Per Share 11.20 9.65
(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,
2017 2016 2017 2016
Interest Income $4,679 $3,611 $9,240 $7,179
Interest Expense 1,043 840 2,003 1,695
Net Interest Income 3,636 2,771 7,237 5,484
Provision for loan losses (16) 11 - 43
Non-interest income 578 419 998 772
Operating Expenses 2,723 2,216 7,112 4,368
Income before taxes 1,507 963 1,123 1,845
Income tax expense 464 274 286 520
Net Income $1,043 $689 $837 $1,325
Net Income per share – basic $0.26 $0.21 $0.21 $0.41
Net Income per share – diluted $0.26 $0.21 $0.21 $0.41
Dividends declared $0.13 $0.13 $0.26 $0.26


Consolidated Balance Sheets ($ in 000’s):
June 30,
2017 2016
Assets
Cash and cash equivalents $22,327 $13,830
Time deposits with other banks 51,568 41,548
Securities 37,991 28,979
Loans 383,029 296,230
Allowance for loan losses (2,791) (2,705)
Loans, net 380,238 293,525
Bank premises and equipment 7,162 4,261
Other assets 23,393 15,789
Total Assets $522,679 $397,932
Liabilities
Deposits $416,485 $318,033
Other borrowings 56,114 41,761
Trust preferred 13,403 10,310
Other liabilities 4,429 3,362
Total Liabilities 490,431 373,466
Equity
Common stock and paid in capital 21,237 13,573
Retained earnings 10,889 10,656
Accumulated OCI 122 237
Total Equity 32,248 24,466
Total Liabilities and Equity $522,679 $397,932

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

Source: Commercial National Financial Corporation