ITHACA, Mich., Jan. 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. Visit www.commercial-bank.com to 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) | 12.30 | % | 15.91 | % | 13.28 | % | 10.41 | % | |||||
| Return on Assets (ROA) | 0.81 | % | 1.00 | % | 0.86 | % | 0.65 | % | |||||
| Net Interest Margin | 2.88 | % | 3.23 | % | 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, | Year Ended December 31, | ||||||||||||
| 2018 | 2017 | 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 | $ | 31,715,786 | $ | 20,348,244 | |||||||
| Time deposits with other banks | 53,036,000 | 53,039,000 | |||||||||
| Securities | 39,551,366 | 36,365,362 | |||||||||
| Loans | 374,975,157 | 389,659,820 | |||||||||
| Allowance for loan losses | (2,672,568 | ) | (2,680,743 | ) | |||||||
| Loans, net | 372,302,589 | 386,979,077 | |||||||||
| Premises and equipment, net | 8,295,195 | 6,972,170 | |||||||||
| Other assets | 22,466,636 | 22,669,726 | |||||||||
| Total Assets | $ | 527,367,572 | $ | 526,373,579 | |||||||
| Liabilities | |||||||||||
| 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