Commercial National Reports June 30, 2015 Earnings

News provided by

Commercial National Financial Corporation

Jul 28, 2015, 04:04 ET

LATROBE, Pa., July 28, 2015 /PRNewswire/ -- Commercial National Financial Corporation (OTC Markets:CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for June 30, 2015. The Company earned $2,390,000(or $0.83 per average share outstanding) in the second quarter 2015 compared to $1,655,000 (or $0.58 per average share outstanding) in the second quarter 2014. The Company earned $3,987,000 (or $1.39 per average share outstanding) for the six-month period ended June 30, 2015 and $3,268,000 (or $1.14 per average share outstanding) for the six-month period ended June 30, 2014.

The Company's annualized return on average assets and average equity were 2.51% and 16.83%, respectively, for the quarter ended June 30, 2015 compared to 1.66% and 12.55%, respectively, for the quarter ended June 30, 2014. The Company's annualized return on average assets and average equity for the six-month period ended June 30, 2015 were 2.10% and 13.82%, respectively, compared to 1.65% and 12.39%, respectively, for the six-month period ended June 30, 2014. The Company recorded a deferred tax asset valuation allowance in the second quarter 2015, resulting in higher second quarter and six-month effective tax rates. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios for June 30, 2015 were 22.00%, 22.68%, 13.85% and 22.00%, respectively.

President and Chief Executive Officer, Gregg E. Hunter noted, "Second quarter earnings increased $735,000, or 44.41%, while six-month earnings increased $719,000, or 22.00%. Thus far in 2015 meaningful profitability enhancements have been achieved with both the loan portfolio and the deposit base. Asset quality remains exceptional relative to prevailing banking industry norms as demonstrated by no required loan loss provisioning over the past thirty consecutive fiscal quarters. In 2015 the Company's trust revenues have surged by $199,000 which represents a 35.47% improvement. Prior to 2015's late second quarter bond market sell-off, significant realized securities gains were harvested at the beginning of April in order to fully benefit from the exceedingly strong bond market price rally of 2015's first quarter. This non-recurring income materially supplemented the Company's core earnings which were greatly influenced by various timing factors related to securities portfolio activities. The Company's core earnings in conjunction with its substantial capital base provide ample capacity to maintain 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,
			2015	2014	2014


ASSETS
Cash and due from banks on demand			$ 5,941	$ 5,286	$ 7,275
Interest bearing deposits with banks			927	90	62
	Total cash and cash equivalents		6,868	5,376	7,337

Securities available for sale			174,462	187,070	194,331
Restricted investments in bank stock			682	722	1,386

Loans			178,815	171,224	170,666
	Allowance for loan losses		(1,616)	(1,616)	(1,619)
		Net loans	177,199	169,608	169,047

Premises and equipment			3,263	3,207	3,358
Investment in Life Insurance			17,884	17,650	17,339
Other assets			3,314	3,886	4,033

	Total assets		$ 383,672	$ 387,519	$ 396,831

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
	Deposits:
		Non-interest bearing	$ 111,150	$ 105,717	$ 102,948
		Interest bearing	201,710	207,669	208,875
		Total deposits	312,860	313,386	311,823

	Short-term borrowings		17,200	12,225	28,344
	Other liabilities		1,465	3,603	2,342
		Total liabilities	331,525	329,214	342,509

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 2015 and 2014

			7,200	7,200	7,200
	Retained earnings		57,892	58,254	56,799
	Accumulated other comprehensive (loss) income		(401)	5,395	2,867
	Less treasury stock, at cost, 739,047 shares in 2015 and 2014		(12,544)	(12,544)	(12,544)
		Total shareholders' equity	52,147	58,305	54,322

		Total liabilities and shareholders' equity	$ 383,672	$ 387,519	$ 396,831

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
			2015	2014	2015	2014
			(unaudited)	(unaudited)	(unaudited)	(unaudited)

INTEREST INCOME:
	Interest and fees on loans		$ 1,978	$ 1,919	$ 3,911	$ 3,814
	Interest and dividends on securities:
		Taxable	543	215	775	453
		Exempt from federal income taxes	1,047	1,766	2,309	3,541
	Other		6	17	61	26
	Total Interest income		3,574	3,917	7,056	7,834

INTEREST EXPENSE:
	Interest on deposits		100	150	211	305
	Interest on short-term borrowings		3	19	3	40
	Interest on long-term borrowings		-	-	-	-
	Total Interest expense		103	169	214	345

NET INTEREST INCOME			3,471	3,748	6,842	7,489
PROVISION FOR LOAN LOSSES			-	-	-	-

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES			3,471	3,748	6,842	7,489

OTHER OPERATING INCOME:
	Asset management and trust income		426	284	760	561
	Service charges on deposit accounts		233	248	449	484
	Net Security gains		2,949	21	3,590	14
	Income from investment in life insurance		117	114	234	228
	Other income		45	53	142	156
	Total other operating income		3,770	720	5,175	1,443

OTHER OPERATING EXPENSES:
	Salaries and employee benefits		1,684	1,739	3,515	3,546
	Net occupancy expense		211	212	442	441
	Furniture and equipment		157	102	259	203
	Pennsylvania shares tax		133	101	247	201
	Legal and professional		121	76	206	160
	FDIC insurance expense		47	48	96	96
	Other expenses		715	691	1,404	1,354
	Total other operating expenses		3,068	2,969	6,169	6,001

INCOME BEFORE INCOME TAXES			4,173	1,499	5,848	2,931
Income tax expense/benefit			1,783	(156)	1,861	(337)

	Net income		$ 2,390	$ 1,655	$ 3,987	$ 3,268

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

Earnings Per Share			$ 0.83	$ 0.58	$ 1.39	$ 1.14