Commercial National Financial Corporation Reports 2nd Quarter 2018 Earnings
ITHACA, Mich., July 25, 2018 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets:CEFC) today announced second quarter 2018 net income of $1,185,000, or $.30 per share compared to second quarter 2017 net income of $1,043,000, or $.26 per share.
Total assets were $507.4 million at June 30, 2018 compared to $522.7 million at June 30, 2017. Total loans of $379.2 million decreased $3.8 million, or 1% year over year. The lending environment remains very competitive in our markets and we experienced several large commercial loan payoffs in the first six months of 2018. However, our commercial loan pipeline is growing and we continue to develop new and existing customer relationships.
For the quarter ended June 30, 2018, net interest income decreased $60,000, or 1.7%. The increase in interest income from the higher interest rate environment was more than offset by a higher cost of funds. Non-interest income decreased $101,000, or 17.6% primarily due to significantly lower mortgage banking revenue. We continue to see challenges in residential loan demand due to the limited supply of housing inventory. Operating expenses decreased by $105,000, or 3.9% due to lower expense in a number of other expense categories. Federal income tax expense was lower by $214,000 primarily due to the decrease in the statutory rate from 34% to 21%.
Commercial National Financial Corporation operates through a single subsidiary bank, Commercial Bank. Visit 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, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Return on Equity (ROE) | 14.17 | % | 13.08 | % | 13.60 | % | 5.21 | % | |||||||
| Return on Assets (ROA) | 0.91 | % | 0.79 | % | 0.87 | % | 0.32 | % | |||||||
| Net Interest Margin | 2.92 | % | 2.96 | % | 2.95 | % | 2.96 | % | |||||||
| June 30, | |||||||||||||||
| 2018 | 2017 | ||||||||||||||
| Non-performing Assets Ratio | 0.47 | % | 0.45 | % | |||||||||||
| Tier 1 Leverage Capital(1) | 8.24 | % | 7.80 | % | |||||||||||
| Total Risk-based Capital(1) | 13.97 | % | 13.58 | % | |||||||||||
| Book Value Per Share | $ | 8.52 | $ | 8.13 | |||||||||||
| Market Value Per Share | $ | 12.00 | $ | 11.20 | |||||||||||
| (1) Ratios are for Commercial Bank. | |||||||||||||||
| Consolidated Statements of Income (unaudited): | |||||||||||||||
| Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Interest Income | $ | 4,777,678 | $ | 4,679,237 | $ | 9,513,890 | $ | 9,239,893 | |||||||
| Interest Expense | 1,201,560 | 1,043,565 | 2,321,250 | 2,003,399 | |||||||||||
| Net Interest Income | 3,576,118 | 3,635,672 | 7,192,640 | 7,236,494 | |||||||||||
| Provision for loan losses | - | (15,814 | ) | - | - | ||||||||||
| Non-interest income | 476,552 | 578,012 | 884,618 | 998,535 | |||||||||||
| Operating Expenses | 2,617,459 | 2,722,594 | 5,342,436 | 7,112,120 | |||||||||||
| Income before taxes | 1,435,211 | 1,506,904 | 2,734,822 | 1,122,909 | |||||||||||
| Income tax expense | 250,000 | 464,000 | 486,000 | 286,000 | |||||||||||
| Net Income | $ | 1,185,211 | $ | 1,042,904 | $ | 2,248,822 | $ | 836,909 | |||||||
| Net Income per share – diluted | $ | 0.30 | $ | 0.26 | $ | 0.57 | $ | 0.21 | |||||||
| Dividends declared | $ | 0.13 | $ | 0.13 | $ | 0.26 | $ | 0.26 | |||||||
| Consolidated Balance Sheets (unaudited): | |||||||||||||||
| June 30, | |||||||||||||||
| 2018 | 2017 | ||||||||||||||
| Assets | |||||||||||||||
| Cash and cash equivalents | $ | 12,422,133 | $ | 22,326,706 | |||||||||||
| Time deposits with other banks | 47,834,000 | 51,568,000 | |||||||||||||
| Securities | 40,971,026 | 37,991,116 | |||||||||||||
| Loans | 379,195,022 | 383,028,784 | |||||||||||||
| Allowance for loan losses | (2,655,800 | ) | (2,790,614 | ) | |||||||||||
| Loans, net | 376,539,222 | 380,238,170 | |||||||||||||
| Bank premises and equipment | 7,914,647 | 7,162,001 | |||||||||||||
| Other assets | 21,765,211 | 23,392,621 | |||||||||||||
| Total Assets | $ | 507,446,239 | $ | 522,678,614 | |||||||||||
| Liabilities | |||||||||||||||
| Deposits | $ | 401,676,958 | $ | 416,484,452 | |||||||||||
| Other borrowings | 55,801,013 | 56,114,030 | |||||||||||||
| Trust preferred | 13,403,000 | 13,403,000 | |||||||||||||
| Other liabilities | 2,790,775 | 4,429,113 | |||||||||||||
| Total Liabilities | 473,671,746 | 490,430,595 | |||||||||||||
| Equity | |||||||||||||||
| Total Equity | 33,774,493 | 32,248,019 | |||||||||||||
| Total Liabilities and Equity | $ | 507,446,239 | $ | 522,678,614 | |||||||||||
Contact:
Kevin A. Twardy
CFO and COO
989-875-5528
