Commercial National Reports September 30, 2022 Results

LATROBE, PA / ACCESSWIRE / October 27, 2022 / Commercial National Financial Corporation (OTCQX:CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended September 30, 2022. The Company earned $677,000 (or $0.23 per average share outstanding) in the third quarter 2022 compared to $909,000 (or $0.32 per average share outstanding) in the third quarter of 2021. The Company earned $2,582,000 (or $0.90 per average share outstanding) for the nine-month period ended September 30, 2022 and $2,978,000 (or $1.04 per average share outstanding) for the nine-month period ended September 30, 2021. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at September 30, 2022 were 22.05%, 22.65%, 12.68% and 22.05% respectively. Tier one capital was $56,605,000 and total risk-based capital was $58,144,000 while book capital reflected a temporary after-tax accumulated other comprehensive loss stemming from net unrealized securities available-for-sale market value depreciation. As with many other insured depository institutions nation-wide, the Company's securities portfolio has been adversely impacted by rising interest rates. The other real estate owned property reported in the September 30, 2022 statement of financial condition was successfully disposed of on October 14, 2022 with a $70,0000 fourth quarter 2022 gain on sale.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 489,660 shares, or 17.12% on September 30, 2022.

As disclosed each year in the Annual Report to Shareholders, on September 30, 2022, the Company employed 79 people in full-time and part-time positions. Thirty-one (31) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, twenty-eight (28) employees are full-time and there are three (3) part-time employees. The Company has had unionized employees since 1972. In October 2018, the agreement between the Company and the bargaining unit was negotiated and subsequently ratified by the bargaining unit with an effective date of February 16, 2019. The labor agreement will expire in February 2024. The Commonwealth of Pennsylvania and the National Labor Relations Board both afford protection to the organized status of pre-existing collective bargaining units. The Company has been advised that bargaining unit status limits the Company's strategic options relative to those of non-unionized insured depository institutions. The Company continues to consider this as a factor in its strategic and capital management decisions.

The Company operates seven community banking facilities in Hempfield Township, Latrobe, Ligonier, Unity Township and West Newton, Pennsylvania and also maintains a commercial business development sales force throughout its entire market area. The Company operates an asset management and trust division of Commercial Bank & Trust of PA headquartered in Greensburg, Pennsylvania. Commercial Bank & Trust of PA also serves its customer base from an Internet banking site (www.cnbthebankonline.com) and an automated TouchTone Teller banking system.

Safe Harbor Statement

Forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "to," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements are based on information currently available to the Company, and the Company assumes no obligation to update these statements as circumstances change. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including changes in general economic and financial market conditions, unforeseen credit problems, and the Company's ability to execute its business plans. The actual results of future events could differ materially from those stated in any forward-looking statements herein.

COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands, except per share data)

September 30, December 31, September 30,
2022 2021 2021
ASSETS
Cash and due from banks on demand
$ 2,142 $ 3,168 $ 6,465
Interest bearing deposits with banks
7,033 30,164 69,587
Total cash and cash equivalents
9,175 33,332 76,052
Securities available for sale
167,952 194,936 126,946
Restricted investments in bank stock
758 145 145
Loans
201,714 216,639 223,015
Allowance for loan losses
(1,539 ) (2,093 ) (1,991 )
Net loans
200,175 214,546 221,024
Premises and equipment
2,571 2,580 2,624
Investment in Life Insurance
18,046 17,655 19,463
Other real estate owned
2,160 3,399 -
Other assets
11,527 5,382 3,030
Total assets
$ 412,364 $ 471,975 $ 449,284
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing
$ 171,298 $ 167,513 $ 168,461
Interest bearing
198,288 235,299 211,562
Total deposits
369,586 402,812 380,023
Short-term borrowings
11,081 - -
Other liabilities
1,729 4,181 3,569
Total liabilities
382,396 406,993 383,592
Shareholders' equity:
Common stock, par value $2 per share; 10,000,000 shares authorized; 3,600,000 shares issued; 2,860,953 shares outstanding in 2022 and 2021
7,200 7,200 7,200
Retained earnings
62,492 62,141 61,178
Accumulated other comprehensive (loss) income
(27,180 ) 8,185 9,858
Less treasury stock, at cost, 739,047 shares in 2022 and 2021
(12,544 ) (12,544 ) (12,544 )
Total shareholders' equity
29,968 64,982 65,692
Total liabilities and shareholders' equity
$ 412,364 $ 471,975 $ 449,284

COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)

Three Months Nine Months
Ended September 30 Ended September 30
2022 2021 2022 2021
(unaudited) (unaudited) (unaudited) (unaudited)
INTEREST INCOME:
Interest and fees on loans
$ 2,071 $ 2,390 $ 6,296 $ 7,339
Interest and dividends on securities:
Taxable
1,172 975 3,522 2,941
Exempt from federal income taxes
521 200 1,550 645
Other
22 26 39 46
Total interest income
3,786 3,591 11,407 10,971
INTEREST EXPENSE:
Interest on deposits
42 57 147 172
Interest on short-term borrowings
78 - 95 -
Total interest expense
120 57 242 172
NET INTEREST INCOME
3,666 3,534 11,165 10,799
PROVISION (CREDIT) FOR LOAN LOSSES
(575 ) - (561 ) -
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
4,241 3,534 11,726 10,799
OTHER OPERATING INCOME:
Asset management and trust
344 388 1,077 1,126
Service charges on deposit accounts
172 178 491 516
Net Security gains/(losses)
(1 ) (11 ) (11 ) 35
Loss on sale of OREO
(990 ) - (1,162 ) -
Income from investment in life insurance
125 123 373 368
Other income
24 22 149 113
Total other operating income
(326 ) 700 917 2,158
OTHER OPERATING EXPENSES:
Salaries and employee benefits
1,819 1,848 5,462 5,501
Net occupancy
171 161 542 583
Furniture and equipment
115 114 358 359
Pennsylvania shares tax
148 165 455 479
Legal and professional
134 97 417 307
FDIC insurance
29 27 89 88
Other real estate expense
17 194
Other expenses
798 757 2,379 2,142
Total other operating expenses
3,231 3,169 9,896 9,459
INCOME (LOSS) BEFORE INCOME TAXES
684 1,065 2,747 3,498
Income tax expense
7 156 165 520
Net income (loss)
$ 677 $ 909 $ 2,582 $ 2,978
Average Shares Outstanding
2,860,953 2,860,953 2,860,953 2,860,953
Earnings (Loss) Per Share
$ 0.23 $ 0.32 $ 0.90 $ 1.04

SOURCE: Commercial National Financial Corporation



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