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Commercial National Reports Higher Earnings For 2019

LATROBE, PA / ACCESSWIRE / January 27, 2020 / Commercial National Financial Corporation (OTCQX:CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended December 31, 2019. The Company earned $1,219,000 (or $0.43 per average share outstanding) in the fourth quarter 2019 compared to $1,143,000 (or $0.40 per average share outstanding) in the fourth quarter of 2018. The Company earned $4,736,000(or $1.66 per average share outstanding) for the twelve-month period ended December 31, 2019 and $4,345,000 (or $1.52 per average share outstanding) for the twelve-month period ended December 31, 2018. Fourth quarter earnings increased 6.65% and full year earnings increased 9.00%.

The Company's annualized return on average assets for 2019 rose to 1.12%. Fourth quarter tax equivalent net interest margin at 4.13% was indicative of the Company's very successful administration of balance sheet optionality relative to emerging financial market conditions. Asset quality metrics remained outstanding across-the-board. The effective tax rate for 2019 was only 10.62%. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at year-end 2019 were all exceedingly strong at 20.80%, 21.32%, 13.26% and 20.80% respectively. Low cost liquidity sources remained ample as evidenced by the Company's appropriately sized AFS bond portfolio's extensive net unrealized market value gains which represented 6.92% of book value at year-end 2019. All of the aforementioned financial diagnostics favorably compare to prevailing banking industry norms and are reflective of Commercial National Financial Corporation's admirable safety and soundness over an extended number of years.

Cash dividends paid per share in 2019 reached a new all-time record high of $2.54. Dividends paid during 2019 included four regular quarterly payments of $0.26 per share plus a special $1.00 per share dividend and a special $0.50 per share dividend. The Company's cash dividend payouts to shareholders were fully supported by current year earnings in conjunction with undistributed earnings from 2018 and 2017. Total cash dividends paid in 2019 constituted a $7,267,000 return of capital to the Company's shareholders. The Company's underlying core earnings together with its substantial capital provide the capacity to maintain the regular $0.26 per share quarterly common stock cash dividend payments to shareholders. As circumstances allow, special extra cash dividends will continue to be periodically considered by the Board of Directors.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 476,175 shares, or 16.64% on December 31, 2019.

As disclosed each year in the Annual Report to Shareholders, on December 31, 2019, the Company employed 98 people in full-time and part-time positions. Forty-six (46) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, thirty-seven (37) employees are full-time and nine (9) employees are part-time. 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 may limit 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 nine community banking facilities in Greensburg, Hempfield Township, Latrobe, Ligonier, North Huntingdon, 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.cbthebank.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)

   December 31    December 31 
   2019    2018 
          
ASSETS         
Cash and due from banks on demand  4,510    5,642 
Interest bearing deposits with banks    47      59 
Total cash and cash equivalents    4,557      5,701 
                
Securities available for sale    150,838      159,741 
Restricted investments in bank stock    899      1,411 
                
Loans    238,407      227,747 
Allowance for loan losses    (1,374)    (1,349)
Net loans    237,033      226,398 
                
Premises and equipment    3,262      2,800 
Investment in Life Insurance    20,310      19,767 
Other assets    2,675      3,808 
                
Total assets  419,574    419,626 
                
LIABILITIES AND SHAREHOLDERS' EQUITY               
Liabilities:               
Deposits:               
Non-interest bearing  133,362    128,437 
Interest bearing    198,986      197,482 
Total deposits    332,348      325,919 
                
Short-term borrowings    20,200      32,822 
 Other liabilities    4,102      1,351 
Total liabilities    356,650      360,092 
                
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 2019 and 2018.    7,200      7,200 
Retained earnings    60,554      63,085 
Accumulated other comprehensive income    7,714      1,793 
Less treasury stock, at cost,               
739,047 shares in 2019 and 2018    (12,544)    (12,544)
Total shareholders' equity    62,924      59,534 
                
Total liabilities and shareholders' equity  419,574    419,626 
                

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

   Three Months    Twelve Months 
   Ended December 31    Ended December 31 
   2019    2018    2019    2018 
                    
INTEREST INCOME:                   
Interest and fees on loans    2,690      2,509    10,520    9,391 
Interest and dividends on securities:                               
Taxable    1,041      1,089      4,183      4,323 
Exempt from federal income taxes    429      523      1,997      2,098 
Other    25      26      116      77 
Total Interest income    4,185      4,147      16,816      15,889 
                                
INTEREST EXPENSE:                               
Interest on deposits    179      200      749      573 
Interest on short-term borrowings    149      234      837      618 
Total Interest expense    328      434      1,586      1,191 
                                
NET INTEREST INCOME    3,857      3,713      15,230      14,698 
PROVISION FOR LOAN LOSSES    -      -      -      - 
                                
NET INTEREST INCOME AFTER                               
PROVISION FOR LOAN LOSSES    3,857      3,713      15,230      14,698 
                                
OTHER OPERATING INCOME:                               
Asset management and trust income    337      311      1,429      1,306 
Service charges on deposit accounts    184      189      724      736 
Net Security gains/losses    75      -      68      (11)
Gain on sale of OREO    -      -      4      - 
Income from investment in life insurance    130      127      510      505 
Other income    31      43      163      213 
Total other operating income    757      670      2,898      2,749 
                                
OTHER OPERATING EXPENSES                               
Salaries and employee benefits    1,911      1,852      7,552      7,273 
Net occupancy expense    179      221      799      860 
Furniture and equipment    104      120      413      489 
Pennsylvania shares tax    143      142      569      554 
Legal and professional    121      133      396      456 
FDIC Insurance expense    -      29      56      113 
Other expenses    759      745      3,044      3,002 
Total other operating expenses    3,217      3,242      12,829      12,747 
                                
INCOME BEFORE INCOME TAXES    1,397      1,141      5,299      4,700 
Income tax (benefit) expense    178      (2)    563      355 
                                
Net income  1,219    1,143    4,736    4,345 
                                
Average Shares Outstanding    2,860,953      2,860,953      2,860,953      2,860,953 
                                
Earnings Per Share    0.43      0.40      1.66      1.52 
                                

Contact Information:

Wendy S. Piper, First Senior Vice President, Secretary/Treasurer
wpiper@cbthebank.com
724-537-9923

SOURCE: Commercial National Financial Corporation



View source version on accesswire.com:
https://www.accesswire.com/574180/Commercial-National-Reports-Higher-Earnings-For-2019

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