Commercial National Financial : 2018 Fourth Quarter Earnings

Commercial National Financial Corporation Reports

4thQuarter 2018 Earnings

Ithaca, Michigan, January 23, 2019 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced fourth quarter 2018 net income of $1,076,000, or $.27 per share compared to fourth quarter 2017 net income of $1,334,000, or $.34 per share. Return on Equity (ROE) was 12.3% for the fourth quarter of 2018 compared to 15.9% for the fourth quarter of 2017.

Total assets were $527.4 million at December 31, 2018 compared to $526.4 million at December 31, 2017. Total loans of $375 million decreased $14.7 million, or 3.8% year-over-year. The lending environment remains very competitive in our markets and we experienced a number of large commercial loan payoffs during 2018.

For the quarter ended December 31, 2018, net interest income decreased $448,000, or 11.2% as compared to the prior year's quarter primarily due to a higher cost of funds and lower loan interest income. The prior year's quarter included loan interest income of $252,000 related to the payoff of several non-accrual loans. Non-interest income increased $38,000, or 8.7% primarily due to higher mortgage banking revenue. Operating expenses increased by $140,000, or 5.5% primarily due to higher wages and benefits expense. Federal income tax expense was lower by $368,000 primarily due to the decrease in pre-tax income and in the statutory rate from 34% to 21%.

Commercial National Financial Corporation operates through a single subsidiary bank, Commercial Bank. Visitwww.commercial-bank.comto view the latest consolidated Annual Report, news releases and other information about CEFC and Commercial Bank.

Selected Financial Data (unaudited):

Quarter Ended December 31, Year Ended December 31,2018 2017 2018 2017

Return on Equity (ROE) Return on Assets (ROA) Net Interest Margin

12.30%

0.81%

2.88%

15.91% 1.00% 3.23%

13.28% 10.41%

0.86% 0.65%

2.92% 3.05%

December 31,

2018

2017

Non-performing Assets Ratio 0.35% 0.53%Tier 1 Leverage Capital(1)

8.42% 7.94%

Total Risk-based Capital(1)

14.36% 13.43%Book Value Per Share $8.85 $8.28

Market Value Per Share $11.49 $12.00

(1)Ratios are for Commercial Bank.

Consolidated Statements of Income (unaudited):

Quarter Ended December 31,2018 2017

Year Ended December 31,2018 2017

Interest Income	$	4,941,598	$	5,084,876	$	19,248,659	$	19,140,345
Interest Expense	1,381,420	1,076,326	5,010,923	4,127,266
Net Interest Income	3,560,178	4,008,550	14,237,736	15,013,079
Provision for loan losses	-	(75,000)	-	(150,000)
Non-interest income	477,311	439,166	1,989,948	1,984,093
Operating Expenses	2,671,603	2,531,237	10,718,118	12,246,358
Income before taxes	1,365,886	1,991,479	5,509,566	4,900,814
Income tax expense	290,149	657,719	1,008,000	1,481,719
Net Income	$	1,075,737	$	1,333,760	$	4,501,566	$	3,419,095
Net Income per share - diluted	$	0.27	$	0.34	$	1.14	$	0.86
Dividends declared	$	0.13	$	0.13	$	0.52	$	0.52

Consolidated Balance Sheets (unaudited):

December 31,

2018

2017

Assets
Cash and cash equivalents	$ 20,348,244
Time deposits with other banks	53,039,000
Securities	36,365,362
Loans	389,659,820
Allowance for loan losses	(2,680,743)
Loans, net	386,979,077
Premises and equipment, net	6,972,170
Other assets	22,669,726
Total Assets	$ 527,367,572	$526,373,579
Liabilitie s
Deposits	$ 421,030,232	$416,622,495
Other borrowings	55,024,250	59,531,566
Trust preferred	13,403,000	13,403,000
Other liabilities	2,798,839	3,985,188
Total Liabilities	492,256,321	493,542,249
Equity
Total Equity	35,111,251	32,831,330
Total Liabilities and Equity	$ 527,367,572	$526,373,579
Contact:
Kevin A. Twardy
CFO and COO
989-875-5528

22,466,636

$ 31,715,786

53,036,000

39,551,366

374,975,157

(2,672,568)

372,302,589

8,295,195