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Commercial National Financial Corporation Reports 4th Quarter 2017 Earnings

ITHACA, Mich., Jan. 26, 2018 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets:CEFC) today announced fourth quarter 2017 net income of $1,334,000, or $.34 per share compared to fourth quarter 2016 net income of $599,000, or $.18 per share. Fourth quarter 2016 net income would have been $738,000, or $.23 per share when excluding merger-related expenses for the merger with Capital Directions, Inc., the holding company for Mason State Bank.

Net income for the year ended December 31, 2017 was $3,419,000, or $.86 per share compared to net income for 2016 of $2,598,000, or $.80 per share.

Total assets were $526.4 million at December 31, 2017 compared to $400.4 million at December 31, 2016. Total loans grew $79 million, or 25.4% year over year. Most of the increase in total loans was related to the merger with Mason State Bank with the remainder related to commercial loan growth. The lending environment remains very competitive in our markets. We are continuing our efforts to increase loan volume while maintaining our credit quality standards.

For the quarter ended December 31, 2017, net interest income increased $1,131,000, or 39.3% primarily due to the growth in loans mentioned above as compared to the December 31, 2016 quarter. In addition, $252,000 of interest income was recorded related to the payoff of several non-accrual and purchased-impaired loans. The provision for loan losses decreased $31,000 due to a lower trend in historical losses as well as net recoveries recorded for the year. Non-interest income increased $79,000, or 21.9% for the quarter ended December 31, 2017 compared to December 31, 2016 quarter primarily due to combining both banks. Operating expenses increased by $165,000, or 7% 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 Ended
Year Ended
December 31,
December 31,
2017 2016 2017 2016
Return on Equity (ROE) 15.91% 9.59% 10.41% 10.62%
Return on Assets (ROA) 1.00 .59 .65 .65
Net Interest Margin 3.23 3.08 3.05 3.02
December 31,
2017 2016
Non-performing Assets Ratio .53% .58%
Tier 1 Leverage Capital(1) 7.94 8.45
Total Risk-based Capital(1) 13.43 13.91
Book Value Per Share$8.28 $7.56
Market Value Per Share 12.00 11.99
(1) Ratios are for Commercial Bank.

Consolidated Statements of Income ($ in 000’s except per share data):
Quarter Ended Year Ended
December 31, December 31,
2017 2016 2017 2016
Interest Income $5,085 $3,685 $19,140 $14,484
Interest Expense 1,076 807 4,127 3,233
Net Interest Income 4,009 2,878 15,013 11,251
Provision for loan losses (75) (44) (150) -
Non-interest income 439 360 1,984 1,538
Operating Expenses 2,531 2,366 12,246 9,051
Income before taxes 1,992 916 4,901 3,738
Income tax expense 658 317 1,482 1,140
Net Income $1,334 $599 $3,419 $2,598
Net Income per share – basic $0.34 $0.18 $0.86 $0.80
Net Income per share – diluted $0.34 $0.18 $0.86 $0.80
Dividends declared $0.13 $0.13 $0.52 $0.52
Consolidated Balance Sheets ($ in 000’s):
December 31,
2017 2016
Assets
Cash and cash equivalents $20,348 $8,440
Time deposits with other banks 53,039 35,818
Securities 36,365 26,365
Loans 389,660 310,700
Allowance for loan losses (2,681) (2,692)
Loans, net 386,979 308,008
Bank premises and equipment 6,972 4,784
Other assets 22,670 16,952
Total Assets $526,373 $400,367
Liabilities
Deposits $416,622 $317,286
Other borrowings 59,532 44,342
Trust preferred 13,403 10,310
Other liabilities 3,985 3,833
Total Liabilities 493,542 375,771
Equity
Common stock and paid in capital 20,517 13,573
Retained earnings 12,465 11,083
Accumulated OCI (151) (60)
Total Equity 32,831 24,596
Total Liabilities and Equity $526,373 $400,367

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

Source: Commercial National Financial Corporation