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Commercial National Financial Corporation Reports 3rd Quarter 2017 Earnings

ITHACA, Mich., Oct. 26, 2017 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets:CEFC) today announced third quarter 2017 net income of $1,248,000 or $.31 per share compared to third quarter 2016 net income of $673,000, or $.21 per share. Third quarter 2016 net income would have been $809,000, or $.25 per share when excluding merger-related expenses for the merger with Capital Directions, Inc., the holding company for Mason State Bank.

Total assets were $528.8 million at September 30, 2017 compared to $399.8 million at September 30, 2016. Total loans grew $87.3 million, or 29.2% 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 September 30, 2017, net interest income increased $879,000, or 30.4% primarily due to the growth in loans mentioned above as compared to the September 30, 2016 quarter. In addition, $141,000 of interest income recorded was related to the payoff of several non-accrual loans. The provision for loan losses decreased $76,000 due to a lower trend in historical losses as well as net recoveries recorded for the quarter and year-to-date periods. Non-interest income increased $140,000, or 34.5% for the quarter ended September 30, 2017 compared to September 30, 2016 quarter primarily due to combining both banks. Operating expenses increased by $286,000, or 12.3% mostly due to combining both banks.

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 EndedNine Months Ended
September 30,September 30,
2017 2016 2017 2016
Return on Equity (ROE) 15.19% 10.86%8.56%10.97%
Return on Assets (ROA) .94 .68 .53 .67
Net Interest Margin 3.06 3.04 2.99 2.99
September 30,
2017 2016
Non-performing Assets Ratio .52% .56%
Tier 1 Leverage Capital(1) 7.97 8.53
Total Risk-based Capital(1) 13.43 14.22
Book Value Per Share$8.31 $7.60
Market Value Per Share 11.70 10.55

(1) Ratios are for Commercial Bank.


Consolidated Statements of Income ($ in 000’s except per share data):

Quarter EndedNine Months Ended
September 30,September 30,
2017 2016 2017 2016
Interest Income$4,816 $3,620 $14,056 $10,798
Interest Expense 1,048 731 3,051 2,425
Net Interest Income 3,768 2,889 11,005 8,373
Provision for loan losses (75) 1 (75) 45
Non-interest income 546 406 1,545 1,178
Operating Expenses 2,603 2,317 9,715 6,685
Income before taxes 1,786 976 2,909 2,821
Income tax expense 538 303 824 823
Net Income$1,248 $ 673 $2,085 $1,998
Net Income per share – basic$0.31 $0.21 $0.53 $0.61
Net Income per share – diluted $0.31 $0.21 $0.53 $0.61
Dividends declared$0.13 $0.13 $0.39 $0.39


Consolidated Balance Sheets ($ in 000’s):

September 30,
2017 2016
Assets
Cash and cash equivalents$20,787 $18,049
Time deposits with other banks 53,039 35,818
Securities 38,561 26,973
Loans 388,750 301,420
Allowance for loan losses (2,767) (2,744)
Loans, net 385,983 298,676
Bank premises and equipment 6,947 4,520
Other assets 23,506 15,796
Total Assets$528,823 $399,832
Liabilities
Deposits$418,006 $319,470
Other borrowings 60,331 42,222
Trust preferred 13,403 10,310
Other liabilities 4,133 3,123
Total Liabilities 495,873 375,125
Equity
Common stock and paid in capital 21,237 13,573
Retained earnings 11,622 10,906
Accumulated OCI 91 228
Total Equity 32,950 24,707
Total Liabilities and Equity$528,823 $399,832

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

Source: Commercial National Financial Corporation