ITHACA, Mich., Oct. 28, 2020 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced third quarter 2020 net income of $1,177,000, or $.30 per share compared to third quarter 2019 net income of $1,478,000, or $.37 per share. Return on Equity (ROE) was 11.50% for the third quarter of 2020 compared to 15.57% for the third quarter of 2019.
For the third quarter of 2020, net interest income increased $155,000, or 4.1% compared to the third quarter of 2019 primarily due to the growth in Paycheck Protection Program loans. These loans were authorized by the CARES Act approved by Congress in late March. Non-interest income decreased by $211,000, or 27.2% primarily due to lower loan fees. Operating expenses increased by $36,000, or 1.3% primarily due to the absence of FDIC insurance expense small bank assessment credits that were received in the prior year.
The provision for loan losses expense was $300,000 for the third quarter of 2020, compared to none for the third quarter of 2019. The provision expense in the current quarter relates to additional environmental factor allocations and increased classified loans.
Total assets were $548.1 million at September 30, 2020 compared to $512.1 million at September 30, 2019. The increase was primarily due to $33 million of Paycheck Protection Program loans outstanding at September 30, 2020 compared to zero at September 30, 2019. Total loans of $409.7 million increased $27.8 million, or 7.3% year over year.
The Board of Directors recently appointed Brent Hardman to the Bank and Holding Company Boards. Brent is co-owner and Chief Executive Officer of Powell Fabrication & Manufacturing LLC located in St. Louis, Michigan.
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 September 30, | Nine Months Ended September 30, | ||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||
| Return on Equity (ROE) | 11.50% | 15.57% | 10.45% | 13.51% | |||||||||
| Return on Assets (ROA) | 0.85% | 1.14% | 0.78% | 0.95% | |||||||||
| Net Interest Margin | 3.01% | 3.12% | 3.09% | 3.00% | |||||||||
| September 30, | |||||||||||||
| 2020 | 2019 | ||||||||||||
| Non-performing Assets Ratio | 0.77% | 0.75% | |||||||||||
| Tier 1 Leverage Capital(1) | 8.84% | 9.08% | |||||||||||
| Total Risk-based Capital(1) | 15.39% | 14.10% | |||||||||||
| Book Value Per Share | $10.27 | $9.59 | |||||||||||
| Market Value Per Share | $9.11 | $10.20 | |||||||||||
| (1) Ratios are for Commercial Bank. | . | . | |||||||||||
| Consolidated Statements of Income (unaudited): | |||||||||||
| Quarter Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||
| Interest Income | $ | 4,715,503 | $ | 5,060,484 | $ | 14,401,670 | $ | 15,102,630 | |||
| Interest Expense | 807,886 | 1,308,200 | 2,785,487 | 4,184,398 | |||||||
| Net Interest Income | 3,907,617 | 3,752,284 | 11,616,183 | 10,918,232 | |||||||
| Provision for loan losses | 300,000 | - | 1,250,000 | - | |||||||
| Non-interest income | 566,672 | 778,132 | 1,560,698 | 1,861,603 | |||||||
| Operating Expenses | 2,772,687 | 2,736,680 | 8,201,942 | 8,322,030 | |||||||
| Income before taxes | 1,401,602 | 1,793,736 | 3,724,939 | 4,457,805 | |||||||
| Income tax expense | 224,500 | 315,500 | 597,500 | 755,500 | |||||||
| Net Income | $ | 1,177,102 | $ | 1,478,236 | $ | 3,127,439 | $ | 3,702,305 | |||
| Net Income per share – diluted | $ | 0.30 | $ | 0.37 | $ | 0.79 | $ | 0.93 | |||
| Dividends declared | $ | 0.14 | $ | 0.13 | $ | 0.42 | $ | 0.39 | |||
| Consolidated Balance Sheets (unaudited): | |||||||
| September 30, | |||||||
| 2020 | 2019 | ||||||
| Assets | |||||||
| Cash and cash equivalents | $ | 51,221,763 | $ | 29,548,841 | |||
| Time deposits with other banks | 22,839,000 | 33,703,000 | |||||
| Securities | 38,306,539 | 39,462,218 | |||||
| Loans | 409,697,305 | 381,898,344 | |||||
| Allowance for loan losses | (4,043,266 | ) | (2,753,679 | ) | |||
| Loans, net | 405,654,039 | 379,144,665 | |||||
| Premises and equipment, net | 8,217,624 | 8,584,696 | |||||
| Other assets | 21,884,842 | 21,686,072 | |||||
| Total Assets | $ | 548,123,807 | $ | 512,129,492 | |||
| Liabilities | |||||||
| Deposits | $ | 451,610,662 | $ | 396,407,431 | |||
| Other borrowings | 39,480,000 | 61,188,333 | |||||
| Trust preferred | 13,403,000 | 13,403,000 | |||||
| Other liabilities | 2,904,766 | 3,120,848 | |||||
| Total Liabilities | 507,398,428 | 474,119,612 | |||||
| Equity | |||||||
| Total Equity | 40,725,379 | 38,009,880 | |||||
| Total Liabilities and Equity | $ | 548,123,807 | $ | 512,129,492 | |||
Contact:
Kevin A. Twardy
CFO and COO
989-875-5528