Commercial National Financial Corporation Reports 4th Quarter 2015 Earnings

Wednesday, January 27, 2016 11:00 AM UTC

ITHACA, Mich., Jan. 27, 2016 -- Commercial National Financial Corporation (Pink Sheets:CEFC) today announced 2015 fourth quarter net income of $599,000, or $.18 per share compared to 2014 fourth quarter net income of $577,000, or $.18 per share. For the year ended December 31, 2015, net income was $2,685,234, or $.83 per share compared to $2,428,009, or $.75 per share for the year ended December 31, 2014.

Total loans grew $11.1 million, or 4% when comparing December 31, 2015 to December 31, 2014. The majority of loan growth occurred in the commercial loan portfolio. We are continuing our efforts to increase loan volume while maintaining our credit quality standards. As part of this growth strategy, we recently opened a loan production office in downtown Grand Rapids, Michigan.

For the quarter ended December 31, 2015, net interest income increased $53,000 or 2% due to higher average interest-earning assets compared to the quarter ended December 31, 2014. Provision for loan losses expense decreased by $280,000 due to improved credit quality metrics in the loss share portfolio. Loss share reimbursement revenue, a component of non-interest income, decreased by $262,000 primarily due to its linkage to the lower provision for loan loss expense. Loss share reimbursement revenue represents an expected reimbursement from the FDIC of 80% of losses on covered loans acquired in 2010 in an FDIC-assisted transaction of MainStreet Savings Bank. Operating expenses increased by $170,000 primarily due to professional fees related to the renegotiation of the bank’s core data processing, item processing, EFT and internet banking contracts. The new contracts are expected to provide significant savings in future years.

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 Dec. 31,						Twelve Months Ended Dec. 31,
		2015			2014			2015		2014
Return on Equity (ROE)		9.95	%		10.18	%		11.50	%	11.07	%
Return on Assets (ROA)		.62			.61			.71		.65
Interest Margin		3.01			3.05			3.06		3.03

	December 31,
		2015			2014
Non-performing Assets Ratio		.58	%		.87	%
Tier 1 Leverage Capital⁽¹⁾		8.59			8.52
Total Risk-based Capital⁽¹⁾		14.65			15.15
Book Value Per Share	$	7.31		$	6.95
⁽¹⁾Capital ratios are for Commercial Bank.

Consolidated Statements of Income (unaudited):
	Quarter Ended Dec. 31,					Twelve Months Ended Dec. 31,
		2015			2014		2015		2014
Interest Income	$	3,546,082		$	3,524,342	$	14,098,168	$	14,193,114
Interest Expense		853,828			885,521		3,364,476		3,666,105
Net Interest Income		2,692,254			2,638,821		10,733,692		10,527,009
Provision for loan losses		(153,556	)		126,416		60,700		610,620
Non-interest income		252,662			421,439		1,616,359		2,145,856
Operating Expenses		2,266,456			2,096,382		8,555,360		8,730,823
Income before taxes		832,016			837,462		3,733,991		3,331,422
Income tax expense		232,874			260,647		1,048,757		903,413
Net Income	$	599,142		$	576,815	$	2,685,234	$	2,428,009
Net Income per share – basic	$	0.18		$	0.18	$	.83	$	.75
Net Income per share – diluted	$	0.18		$	0.18	$	.83	$	.75

Consolidated Balance Sheets (unaudited):
	December 31,
		2015			2014
Assets
Cash and cash equivalents	$	14,851,190		$	9,678,190
Time deposits with other banks		29,099,000			21,800,000
Securities		35,515,441			46,846,140
Loans		287,667,563			276,587,107
Allowance for loan losses		(2,489,755	)		(2,443,396	)
Loans, net		285,177,808			274,143,711
Bank premises and equipment		4,314,758			4,376,175
Other assets		16,210,910			17,644,545
Total Assets	$	385,169,107		$	374,488,761

Liabilities
Deposits	$	307,124,795		$	305,197,323
Other borrowings		40,165,686			32,456,339
Trust preferred		10,310,000			10,310,000
Other liabilities		3,786,139			3,909,021
Total Liabilities		361,386,620			351,872,683

Equity
Common stock and paid in capital		13,572,835			13,572,835
Retained earnings		10,176,823			9,183,155
Accumulated OCI		32,829			(139,912	)
Total Equity		23,782,487			22,616,078
Total Liabilities and Equity	$	385,169,107		$	374,488,761

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

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