Commercial National Reports September 30, 2023 Results

LATROBE, PA / ACCESSWIRE / October 23, 2023 / Commercial National Financial Corporation (OTCQX:CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended September 30, 2023. The Company earned $881,000 (or $0.31 per average share outstanding) in the third quarter 2023 compared to $677,000 (or $0.23 per average share outstanding) in the third quarter of 2022. The Company earned $2,568,000 (or $0.90 per average share outstanding) for the nine-month period ended September 30, 2023 and $2,582,000 (or $0.90 per average share outstanding) for the nine-month period ended September 30, 2022. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at September 30, 2023 were 23.98%, 24.46%, 13.49% and 23.98% respectively. Tier one capital was $57,848,000 and total risk-based capital was $59,010,000 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. Fully insured well diversified core deposits comprised -83% of total deposits at third quarter-end 2023 which favorably compares to national banking industry metrics.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 467,957 shares, or 16.36% on September 30, 2023.

As disclosed each year in the Annual Report to Shareholders, on September 30, 2023, the Company employed 82 people in full-time and part-time positions. Thirty-three (33) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, thirty (30) 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,
2023 2022 2022
ASSETS
Cash and due from banks on demand
$ 5,601 $ 5,177 $ 2,142
Interest bearing deposits with banks
558 1,158 7,033
Total cash and cash equivalents
6,159 6,335 9,175

Securities available for sale
157,764 170,268 167,952
Restricted investments in bank stock
1,121 630 758

Loans
193,852 201,423 201,714
Allowance for loan losses
(1,162) (1,535) (1,539)
Net loans
192,690 199,888 200,175

Premises and equipment
2,882 2,517 2,571
Accrued interest receivable
2,644 2,203 2,211
Investment in Life Insurance
18,390 17,987 18,046
Other real estate owned
- - 2,160
Other assets
9,355 8,546 9,316

Total assets
$ 391,005 $ 408,374 $ 412,364

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing
$ 162,418 $ 165,551 $ 171,298
Interest bearing
175,494 201,914 198,288
Total deposits
337,912 367,465 369,586

Short-term borrowings
24,100 6,715 11,081
Other liabilities
1,670 1,736 1,729
Total liabilities
363,682 375,916 382,396

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 2023 and 2022
7,200 7,200 7,200
Retained earnings
63,409 63,073 62,492
Accumulated other comprehensive (loss) income
(30,742) (25,271) (27,180)
Less treasury stock, at cost, 739,047 shares in 2023 and 2022
(12,544) (12,544) (12,544)
Total shareholders' equity
27,323 32,458 29,968

Total liabilities and shareholders' equity
$ 391,005 $ 408,374 $ 412,364

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
2023 2022 2023 2022
(unaudited) (unaudited) (unaudited) (unaudited)
INTEREST INCOME:
Interest and fees on loans
$ 2,044 $ 2,071 $ 6,153 $ 6,296
Interest and dividends on securities:
Taxable
1,137 1,172 3,465 3,522
Exempt from federal income taxes
502 521 1,541 1,550
Other
46 22 112 39
Total interest income
3,729 3,786 11,271 11,407

INTEREST EXPENSE:
Interest on deposits
37 42 109 147
Interest on short-term borrowings
363 78 859 95
Total interest expense
400 120 968 242

NET INTEREST INCOME
3,329 3,666 10,303 11,165
PROVISION (CREDIT) FOR LOAN LOSSES
(250) (575) (372) (561)

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
3,579 4,241 10,675 11,726

OTHER OPERATING INCOME:
Asset management and trust
339 344 1,014 1,077
Service charges on deposit accounts
167 172 485 491
Net Security gains/(losses)
- (1) - (11)
Loss on sale of OREO
- (990) - (1,162)
Income from investment in life insurance
127 125 378 373
Other income
19 24 90 149
Total other operating income
652 (326) 1,967 917

OTHER OPERATING EXPENSES:
Salaries and employee benefits
1,933 1,819 5,754 5,462
Net occupancy
194 171 581 542
Furniture and equipment
129 115 395 358
Pennsylvania shares tax
74 148 220 455
Legal and professional
150 134 427 417
FDIC insurance
50 29 140 89
Other real estate expense
- 17 - 194
Other expenses
743 798 2,365 2,379
Total other operating expenses
3,273 3,231 9,882 9,896

INCOME (LOSS) BEFORE INCOME TAXES
958 684 2,760 2,747
Income tax expense
77 7 192 165

Net income (loss)
$ 881 $ 677 $ 2,568 $ 2,582

Average Shares Outstanding
2,860,953 2,860,953 2,860,953 2,860,953

Earnings (Loss) Per Share
$ 0.31 $ 0.23 $ 0.90 $ 0.90

SOURCE: Commercial National Financial Corporation




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