Commercial National Financial Corporation Reports 2nd Quarter 2021 Earnings

Ithaca, Michigan, UNITED STATES


ITHACA, Mich., July 28, 2021 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced second quarter 2021 net income of $1,412,000, or $.36 per share compared to second quarter 2020 net income of $1,147,000, or $.29 per share.   Return on Equity (ROE) was 13.15% for the second quarter of 2021 compared to 11.54% for the second quarter of 2020.

For the second quarter of 2021, net interest income increased $123,000, or 3.1% compared to the second quarter of 2020 primarily due to accelerated accretion of deferred fees from Paycheck Protection Program (PPP) loan payoffs. These loans were authorized by the CARES Act approved by Congress in response to the Covid-19 pandemic. Non-interest income increased by $69,000, or 12.8% primarily due to higher debit card fees. Operating expenses increased by $299,000, or 11.2% primarily due to the hiring of additional commercial lending and treasury employees as well as from professional fees related to our upcoming core data processing conversion.

The provision for loan losses expense was zero for the second quarter of 2021, compared to $450,000 for the second quarter of 2020. The provision expense in the second quarter of 2020 was primarily due to additional environmental factor allocations related to worsening economic conditions from the Covid-19 pandemic and higher classified loans.

Total assets were $587.6 million at June 30, 2021 compared to $554.8 million at June 30, 2020. The increase was primarily due to core deposit growth, partially offset by lower wholesale borrowings. At June 30, 2021, Paycheck Protection Program loans outstanding were approximately $60 million compared to $29.9 million at June 30, 2020.

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 June 30, Six Months Ended June 30,
  2021   2020   2021   2020 
Return on Equity (ROE) 13.15%  11.54%  14.76%  9.90%
Return on Assets (ROA) 0.97%  0.84%  1.11%  0.74%
Net Interest Margin 2.99%  3.07%  3.17%  3.13%
        
 June 30,    
  2021   2020     
Non-performing Assets Ratio 0.84%  0.79%    
Tier 1 Leverage Capital(1) 8.79%  8.75%    
Total Risk-based Capital(1) 15.89%  14.59%    
Book Value Per Share$10.87  $10.12     
Market Value Per Share$10.75  $9.40     
(1) Ratios are for Commercial Bank.. .    
        
Consolidated Statements of Income (unaudited):    
 Quarter Ended June 30, Six Months Ended June 30,
  2021   2020   2021   2020 
Interest Income$4,680,835  $4,859,900  $9,663,400  $9,686,167 
Interest Expense 608,648   911,150   1,248,522   1,977,601 
Net Interest Income 4,072,187   3,948,750   8,414,878   7,708,566 
Provision for loan losses -   450,000   -   950,000 
Non-interest income 603,232   534,710   1,185,915   1,043,386 
Operating Expenses 2,955,606   2,657,045   5,779,458   5,478,615 
Income before taxes 1,719,813   1,376,415   3,821,335   2,323,337 
Income tax expense 308,000   229,500   698,000   373,000 
Net Income$1,411,813  $1,146,915  $3,123,335  $1,950,337 
Net Income per share -- diluted$0.36  $0.29  $0.79  $0.49 
Dividends declared$0.14  $0.14  $0.28  $0.28 
        
        
Consolidated Balance Sheets (unaudited):      
 June 30,    
  2021   2020     
Assets       
Cash and cash equivalents$51,343,114  $45,982,221     
Time deposits with other banks 20,854,000   28,288,000     
Securities 44,822,995   38,972,896     
Loans 444,406,884   415,605,705     
Allowance for loan losses (4,238,164)  (3,733,130)    
Loans, net 440,168,720   411,872,575     
Premises and equipment, net 8,134,522   8,242,515     
Other assets 22,308,977   21,472,268     
Total Assets$587,632,328  $554,830,475     
        
Liabilities       
Deposits$492,885,149  $447,477,547     
Other borrowings 35,400,000   49,954,378     
Trust preferred 13,403,000   13,403,000     
Other liabilities 2,842,747   3,853,904     
Total Liabilities 544,530,896   514,688,829     
        
Equity       
Total Equity 43,101,432   40,141,646     
Total Liabilities and Equity$587,632,328  $554,830,475     
        

Contact:
Kevin A. Twardy
CFO and COO
989-875-5528