Commercial National Financial Corporation: Commercial National Reports June 30, 2024 Results

LATROBE, PA / ACCESSWIRE / July 31, 2024 / Commercial National Financial Corporation (OTCQX:CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended June 30, 2024. The Company earned $353,000 (or $0.12 per average share outstanding) in the second quarter 2024 compared to $842,000 (or $0.29 per average share outstanding) in the second quarter of 2023. The Company earned $880,000 (or $0.30 per average share outstanding) for the six-month period ended June 30, 2024 and $1,687,000 (or $0.59 per average share outstanding) for the six-month period ended June 30, 2023.

Year-end 2023 market expectation for timely and extensive Federal Reserve Bank monetary policy easing, which would materially benefit the Company's overall financial condition and performance, diminished through mid-year 2024. Undistributed earnings at second quarter-end 2024 were $395,000 which, subject to regional Federal Reserve Bank non-objection, provides limited carryover capacity to augment 2024 dividend declarations. Upon depletion of these undistributed earnings, future dividend declarations would be limited by ongoing earnings levels. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at June 30, 2024 were 24.13%, 24.61%, 13.74% and 24.13% respectively. Tier one capital was $56,975,000 and total risk-based capital was $58,094,000 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 generationally elevated interest rates. The Company's second quarter-end 2024 asset quality remained exceptionally strong. Fully insured well diversified core deposits comprised 12.49% of total deposits at second quarter-end 2024 which favorably compares to national banking industry metrics. Overhead costs in 2024 reflect optimum staffing to sustain operational continuity in the community branch banking office network along with area specific sales team focus.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 467,957 shares, or 16.36% on June 30, 2024.

As disclosed each year in the Annual Report to Shareholders, on June 30, 2024, the Company employed 81 people in full-time and part-time positions. Thirty four (34) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, thirty one (31) employees are full-time and there are three (3) part-time employees. The Company has had unionized employees since 1972. In November 2023, the agreement between the Company and the bargaining unit was negotiated and subsequently ratified by the bargaining unit with an effective date of February 15, 2024. The labor agreement will expire in February 2029. 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)

		June 30,				December 31,				June 30,
		2024				2023				2023
ASSETS
Cash and due from banks on demand		$	4,578			$	4,274			$	5,380
Interest bearing deposits with banks			804				1,172				1,223
Total cash and cash equivalents			5,382				5,446				6,603
Securities available for sale			157,869				161,832				169,024
Restricted investments in bank stock			1,889				1,244				1,317
Loans			190,046				192,812				196,031
Allowance for credit losses			(1,120	)			(1,162	)			(1,412	)
Net loans			188,926				191,650				194,619
Premises and equipment			2,896				2,866				2,820
Accrued interest receivable			2,230				2,199				2,220
Investment in Life Insurance			18,809				18,534				18,255
Other assets			7,321				6,848				7,515
Total assets		$	385,322			$	390,619			$	402,373
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing		$	152,876				156,767			$	162,680
Interest bearing			156,297				170,508				178,621
Total deposits			309,173				327,275				341,301
Short-term borrowings			40,254				25,317				24,753
Other liabilities			1,748				1,891				1,755
Total liabilities			351,175				354,483				367,809
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 2024 and 2023			7,200				7,200				7,200
Retained earnings			62,537				63,145				63,271
Accumulated other comprehensive (loss) income			(23,046	)			(21,665	)			(23,364	)
Less treasury stock, at cost, 739,047 shares in 2024 and 2023			(12,544	)			(12,544	)			(12,544	)
Total shareholders' equity			34,147				36,136				34,563
Total liabilities and shareholders' equity		$	385,322			$	390,619			$	402,372

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

		Three Months								Six Months
		Ended June 30								Ended June 30
		2024				2023				2024				2023
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
INTEREST INCOME:
Interest and fees on loans		$	2,055			$	2,055			$	4,113			$	4,109
Interest and dividends on securities:
Taxable			1,074				1,153				2,211				2,328
Exempt from federal income taxes			475				521				892				1,039
Other			58				36				100				66
Total Interest income			3,662				3,765				7,316				7,542
INTEREST EXPENSE:
Interest on deposits			54				34				114				72
Interest on short-term borrowings			461				281				830				496
Total Interest expense			515				315				944				568
NET INTEREST INCOME			3,147				3,450				6,372				6,974
CREDIT FOR CREDIT LOSSES			-				(122	)			(39	)			(122	)
NET INTEREST INCOME AFTER
CREDIT FOR CREDIT LOSSES			3,147				3,572				6,411				7,096
OTHER OPERATING INCOME:
Asset management and trust income			362				338				714				675
Service charges on deposit accounts			160				162				312				318
Net Security Gains			-				-				3				-
Income from investment in life insurance			129				125				259				251
Other income			18				21				72				71
Total other operating income			669				646				1,360				1,315
OTHER OPERATING EXPENSES:
Salaries and employee benefits			2,068				1,925				4,059				3,821
Net occupancy expense			194				173				425				387
Furniture and equipment			137				140				278				266
Pennsylvania shares tax			83				73				160				146
Legal and professional			153				151				284				277
FDIC insurance			46				59				92				90
Other expenses			822				800				1,631				1,622
Total other operating expenses			3,503				3,321				6,929				6,609
INCOME BEFORE INCOME TAXES			313				897				842				1,802
Income tax expense			(40	)			55				(38	)			115
Net income		$	353			$	842			$	880			$	1,687
Average Shares Outstanding			2,860,953				2,860,953				2,860,953				2,860,953
Earnings Per Share		$	0.12			$	0.29			$	0.30			$	0.59

SOURCE: Commercial National Financial Corporation

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