Commercial National Reports 22.78% Second Quarter And 33.39% First Six Months 2014 Earnings Growth

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Commercial National Financial Corporation

Jul 28, 2014, 11:05 ET

LATROBE, Pa., July 28, 2014 /PRNewswire/ -- Commercial National Financial Corporation (OTC Markets: CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended June 30, 2014. The Company earned $1,655,000 (or $0.58 per average share outstanding) in the second quarter 2014 compared to $1,348,000 (or $0.47 per average share outstanding) in the second quarter 2013. The Company earned $3,268,000 (or $1.14 per average share outstanding) for the six-month period ended June 30, 2014 and $2,450,000 (or $0.86 per average share outstanding) for the six-month period ended June 30, 2013. The Company's annualized return on average assets and average equity were 1.66% and 12.55%, respectively, for the quarter ended June 30, 2014 compared to 1.44% and 10.30%, respectively, for the quarter ended June 30, 2013. The Company's annualized return on average assets and average equity for the six month period ended June 30, 2014 were 1.65% and 12.39%, respectively, compared to 1.30% and 9.32%, respectively, for the six month period ended June 30, 2013. Tier one risk-based, total risk-based and leverage capital ratios for June 30, 2014 were 22.04%, 22.74% and 12.87%, respectively.

President and Chief Executive Officer, Gregg E. Hunter noted, "Second quarter 2014 earnings increased $307,000, or 22.78%, while first six months earnings increased $818,000, or 33.39%. Tax equivalent net interest margin was 5.08% in 2014's first six months while the efficiency ratio was 55.83%. Net interest margin and efficiency ratio diagnostics reaffirm significant core earnings strengthening over the past five fiscal quarters. Successful tax position optimization and very high asset quality have also materially contributed to overall profitability. Capital adequacy remains well in excess of both present and upcoming 2015 Basel III regulatory requirements. The Company's strong underlying core profitability in conjunction with its substantial capital base continue to surpass those of the broader banking industry and provide ample capacity to support the regular $0.26 per share quarterly common stock cash dividend payments to shareholders."

In addition to Latrobe, Pennsylvania where it is headquartered, the Company operates ten community banking facilities in Greensburg, Hempfield Township, Ligonier, North Huntingdon, Unity Township and West Newton, Pennsylvania and also maintains a commercial business development sales force throughout its entire market area. The Company operates an asset management and trust division of Commercial Bank & Trust of PA headquartered in Greensburg, Pennsylvania. Commercial Bank & Trust of PA also serves its customer base from an Internet banking site (www.cbthebank.com) and an automated TouchTone Teller banking system.

Safe Harbor Statement

Forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "to," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements are based on information currently available to the Company, and the Company assumes no obligation to update these statements as circumstances change. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including changes in general economic and financial market conditions, unforeseen credit problems, and the Company's ability to execute its business plans. The actual results of future events could differ materially from those stated in any forward-looking statements herein.

COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands, except per share data)

			June 30,	December 31,	June 30,
			2014	2013	2013


ASSETS
Cash and due from banks on demand			$ 7,275	$ 8,036	$ 6,216
Interest bearing deposits with banks			62	3,999	4,883
	Total cash and cash equivalents		7,337	12,035	11,099

Securities available for sale			194,331	185,446	169,522
Restricted investments in bank stock			1,386	1,425	1,490

Loans			170,666	163,916	160,426
	Allowance for loan losses		(1,619)	(1,619)	(1,640)
		Net loans	169,047	162,297	158,786

Premises and equipment			3,358	3,096	3,171
Investment in Life Insurance			17,339	17,111	16,797
Other assets			4,033	12,924	4,901

	Total assets		$ 396,831	$ 394,334	$ 365,766

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
	Deposits:
		Non-interest bearing	$ 102,948	$ 104,792	$ 106,717
		Interest bearing	208,875	211,769	211,514
		Total deposits	311,823	316,561	318,231

	Short-term borrowings		28,344	23,311	-
	Other liabilities		2,342	8,325	909
		Total liabilities	342,509	348,197	319,140

Shareholders' equity:
	Common stock, par value $2 per share; 10,000,000 shares authorized; 3,600,000 shares issued; 2,860,953 shares outstanding in 2014 and 2013

			7,200	7,200	7,200
	Retained earnings		56,799	55,020	53,566
	Accumulated other comprehensive income		2,867	(3,539)	(1,596)
	Less treasury stock, at cost, 739,047 shares in 2014 and 2013		(12,544)	(12,544)	(12,544)
		Total shareholders' equity	54,322	46,137	46,626

		Total liabilities and shareholders' equity	$ 396,831	$ 394,334	$ 365,766

COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)

			Three Months		Six Months
			Ended June 30		Ended June 30
			2014	2013	2014	2013
			(unaudited)	(unaudited)	(unaudited)	(unaudited)

INTEREST INCOME:
	Interest and fees on loans		$ 1,919	$ 2,001	$ 3,814	$ 4,083
	Interest and dividends on securities:
		Taxable	215	361	453	807
		Exempt from federal income taxes	1,766	1,314	3,541	2,314
	Other		17	10	26	26
	Total Interest income		3,917	3,686	7,834	7,230

INTEREST EXPENSE:
	Interest on deposits		150	215	305	441
	Interest on short-term borrowings		19	-	40	-
	Interest on long-term borrowings		-	-	-	-
	Total Interest expense		169	215	345	441

NET INTEREST INCOME			3,748	3,471	7,489	6,789
PROVISION FOR LOAN LOSSES			-	-	-	-

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES			3,748	3,471	7,489	6,789

OTHER OPERATING INCOME:
	Asset management and trust income		284	246	561	483
	Service charges on deposit accounts		248	261	484	516
	Net Security gains		21	57	14	57
	Income from investment in life insurance		114	121	228	235
	Other income		53	52	156	151
	Total other operating income		720	737	1,443	1,442

OTHER OPERATING EXPENSES:
	Salaries and employee benefits		1,739	1,665	3,546	3,377
	Net occupancy expense		212	206	441	431
	Furniture and equipment		102	125	203	228
	Pennsylvania shares tax		101	138	201	276
	Legal and professional		76	63	160	126
	FDIC insurance expense		48	44	96	88
	Other expenses		691	639	1,354	1,297
	Total other operating expenses		2,969	2,880	6,001	5,823

INCOME BEFORE INCOME TAXES			1,499	1,328	2,931	2,408
Income tax expense (benefit)			(156)	(20)	(337)	(42)

	Net income		$ 1,655	$ 1,348	$ 3,268	$ 2,450

Average Shares Outstanding			2,860,953	2,860,953	2,860,953	2,860,953

Earnings Per Share			$ 0.58	$ 0.47	$ 1.14	$ 0.86