Commercial National Reports Higher Earnings For 2019

Commercial National Financial Corporation

Companies Mentioned:

Primary Exchange: OTCQX
Under the Symbol: CNAF

Commercial National Reports Higher Earnings For 2019

Monday, January 27, 2020 10:10 AM

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
[email protected]
724-537-9923

SOURCE: Commercial National Financial Corporation


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