Commercial National Financial Corporation Reports 4th Quarter 2017 Earnings

Friday, January 26, 2018 11:00 AM UTC

ITHACA, Mich., Jan. 26, 2018 -- 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

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Commercial National Financial Corporation Reports 4th Quarter 2017 Earnings

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