Commercial National Financial : 2021 Fourth Quarter Brochure

COMMERCIAL NATIONAL FINANCIAL CORPORATION

Board of Directors

Kevin D. Collison

Heather M. Cook Fisette

Timothy J. Coscarelly

Aaron L. Davis

Christopher E. Goggin

Brent J. Hardman

Richard S. Prestage

Loren R. Roslund

Jeffrey A. Stahl

Visit www.commercial-bank.com to view the latest consolidated Annual Report, news releases and other information about CEFC and Commercial Bank.

www.commercial-bank.com

FOURTH QUARTER REPORT

DECEMBER 31, 2021

COMMERCIAL NATIONAL

FINANCIAL CORPORATION

101 N. PINE RIVER ST.

P.O. BOX 280

ITHACA, MICHIGAN 48847

989-875-4144

To Our Shareholders,

Net Income for the fourth quarter of 2021 was $1,765,000, or $.45 per share compared to fourth quarter 2020 net income of $1,237,000, or $.31 per share. Return on Equity (ROE) was 15.62% for the fourth quarter of 2021 compared to 11.91% for the fourth quarte of 2020.

For the fourth quarter of 2021, net interest income increased $590,000, or 15.1% compared to the fourth quarter of 2020 primarily due to higher accretion on Paycheck Protection Program (PPP) loans as well as from a higher average balance of interest-earning assets. Non-interest income decreased by $75,000, or 12.3% primarily due to lower miscellaneous income, partially offset by higher debit card interchange revenue. Operating expenses increased by $326,000, or 11.6 % primarily due to higher compensation and benefits expense. During 2021, we hired additional commercial lending and treasury employees.

The provision for loan losses expense was negative $275,000 for the fourth quarter of 2021, compared to expense of $200,000 for the fourth quarter of 2020. The negative provision expense in the fourth quarter of 2021 was primarily due to improved economic conditions and lower allocations to classified loans as compared to the fourth quarter of 2020.

Total assets were $610.8 million at December 31, 2021 compared to $547.8 million at December 31, 2020. The increase was primarily due to core deposit growth, partially offset by lower wholesale borrowings. At December 31, 2021 Paycheck Protection Program loans outstanding were approximately $50 million compared to $31 million at December 31, 2020.

As always, please feel free to contact me with any questions or concerns.

Kevin D. Collison

President and CEO

COMMERCIAL NATIONAL FINANCIAL

CORPORATION

FINANCIAL HIGHLIGHTS

	12/31/2021	12/31/2020
		QUARTER ENDING
Basic Earnings	$	0.45	$	0.31
Diluted Earnings	$	0.45	$	0.31
Return on Average Equity		15.62%		11.91%
Return on Average Assets		1.14%		0.90%
Net Interest Margin		3.11%		3.02%
		YEAR TO DATE
Basic Earnings	$	1.61	$	1.10
Diluted Earnings	$	1.61	$	1.10
Return on Average Equity		14.63%		10.82%
Return on Average Assets		1.09%		0.81%
Cash Dividends Paid	$	0.56	$	0.55
Book Value	$	11.32	$	10.42
Market Price	$	13.00	$	9.25
Dividend Yield		4.31%		5.95%
Allowance for Loan Loss to Total		0.85%		1.03%
Loans
Net Interest Margin		3.10%		3.07%

INVESTMENT BROKERS

Stifel, Nicolaus & Company, Incorporated

Kyle Travis- Financial Advisor

1-616-224-1559

Products & services are offered through Stifel. Stifel is not affiliated

with Commercial Bank. Member SIPC/NYSE

D.A. Davidson & Co.

Nick Bicking	[e-mail]	[phone]
Tom Dooley	[e-mail]	[phone]

Brokerage & Advisory services offered through D.A. Davidson & Co. are

not affiliated with Commercial Bank.

Member SIPC

Stock Symbol: CEFC

CONSOLIDATED BALANCE SHEETS				CONSOLIDATED STATEMENTS OF INCOME					OFFICERS OF COMMERCIAL BANK
																				President & CEO
		12/31/2021			12/31/2020				QUARTER ENDING			YEAR TO DATE		Kevin D. Collison
Assets		(Unaudited)		(Unaudited)		Interest Income		12/31/2021			12/31/2020			12/31/2021			12/31/2020		Executive Vice President & Chief Lending Officer
Cash and due from banks	$	28,584,832		$	42,565,240			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)		Andrew P. Shafley
Federal funds sold		129,000			208,000		Interest & fees on loans	$	4,672,949	$	4,317,824	$	18,160,796	$	17,522,587		Chief Financial Officer & Chief Operating Officer
Total cash & cash equivalents		28,713,832			42,773,240		Interest on federal funds sold		10			8			30			706			Kevin A. Twardy
Time deposits in banks		20,854,000			24,337,000		Interest on deposits in banks		125,306			144,373			497,729			739,022		First Vice President
Securities		81,934,068			45,738,432		Interest & dividends on securities		263,627			164,558			723,834			766,118		Matthew O. Fletcher
Loans		451,571,794			409,106,744		Total Interest Income		5,061,892			4,626,763			19,382,389			19,028,433			Vice Presidents
Less: Allowance for loan losses		(3,820,897)			(4,215,192)															Garth W. Anderson	Paul D. Harger
Net loans		447,750,897			404,891,552		Interest Expense													Corey S. Bailey	Jayme L. Kosal
							Interest on deposits		362,631			490,367			1,568,325			2,377,681		Kathleen R. Baker	Michael D. Miller
Bank premises & equipment		8,479,525			8,148,851		Interest on FHLB advances		138,251			161,302			568,315			768,993		Jason D. Beebe	Benjamin Z. Ogle
Other assets		23,070,012			21,890,496		Trust Preferred		67,076			70,833			269,635			345,223		Chelsey A. Foster	Sandra Panella
Total Assets	$	610,802,334		$	547,779,571		Interest on other borrowings		-			-			9			16,092		Trisha A. Gough	Heather A. Schaeffer
Liabilities							Total Interest Expense		567,958			722,502			2,406,284			3,507,989		Jacky Halliwill	Linda M. Vaughn
Deposits																				Greg R. Hansen	Jessica L. Wright
Non-interest bearing	$	123,311,848		$	118,764,346		Net Interest Income		4,493,929			3,904,261			16,976,105			15,520,444
Interest bearing		391,746,843			332,136,719		Provision for loan losses		(275,000)			200,000			(500,000)			1,450,000		Assistant Vice Presidents
Total deposits		515,058,691			450,901,065		Net Interest Income after Provision		4,768,929			3,704,261			17,476,105			14,070,444		Sara F. Bajema	Heidi L. Miller
																				Melanie S. Baxter	Jamie L. Ogle
							Non-interest Income													Nate R. Kirk, Jr.	Denise L. Reese
Federal Home Loan Bank borrowings		34,400,000			39,480,000		Service charges and fees		253,418			239,025			984,589			856,791		Tammy L. McCollum	Courtney A. Samson
Trust Preferred		13,403,000			13,403,000		Other income		278,366			367,570			1,338,909			1,359,862		Roger K. Merritt
Accrued expenses and other liabilities		3,047,041			2,658,928		Total Other Income		531,784			606,595			2,323,498			2,216,653			Officers
							Operating Expenses									Tricia C. Frost	Kayla M. Grzeskowiak
Total Liabilities		565,908,732			506,442,993
Shareholders' Equity							Salaries & employee benefits		1,948,972			1,685,032			7,164,629			6,555,618			OFFICES
														Ithaca	Okemos	Middleton
																				989-875-4144	517-337-5000	989-236-7236
Common stock & paid-in-capital		20,517,672			20,517,679		Occupancy & equipment expense		588,164			564,618			2,354,115			2,172,224		Alma- Wright Ave.	Greenville	St. Louis
Accumulated other comprehensive income,																				989-463-3901	616-754-7166	989-681-5738
net of tax		225,517			814,023		Other expenses		600,809			562,724			2,504,752			2,335,835		Mason- Jefferson St.	Mason- Cedar St.	Hastings
Retained earnings							Total Operating Expenses		3,137,945			2,812,374			12,023,496			11,063,677		517-676-0500	517-676-0515	269-945-9561
	24,150,413			20,004,876		Income Before Income Taxes													**Alma- N. State St.
Total Shareholders' Equity								2,162,768			1,498,482			7,776,107			5,223,420			989-463-2185
	44,893,602			41,336,578		Income Tax Expense		398,000			261,500			1,410,000			859,000		**Mt. Pleasant		**Grand Rapids
Total Liabilities & Shareholders' Equity	$	610,802,334		$	547,779,571		Net Income	$	1,764,768	$	1,236,982	$	6,366,107	$	4,364,420		989-775-0355		616-608-0022
			**Loan production office only