Commercial National Reports June 30, 2023 Results

PRESS RELEASE
Published July 31, 2023

LATROBE, PA / ACCESSWIRE / July 31, 2023 / 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, 2023. The Company earned $842,000 (or $0.29 per average share outstanding) in the second quarter 2023 compared to $932,000 (or $0.33 per average share outstanding) in the second quarter of 2022. The Company earned $1,687,000 (or $0.59 per average share outstanding) for the six-month period ended June 30, 2023 and $1,905,000 (or $0.67 per average share outstanding) for the six-month period ended June 30, 2022. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at June 30, 2023 were 23.77%, 24.36%, 13.31% and 23.77% respectively. Tier one capital was $57,659,000 and total risk-based capital was $ 59,071,000 while book capital reflected a temporary after-tax accumulated other comprehensive loss stemming from net unrealized securities available-for-sale market value depreciation. As with many other insured depository institutions nation-wide, the Company's securities portfolio has been adversely impacted by rising interest rates. Fully insured well diversified core deposits comprised 85% of total deposits at second quarter-end 2023 which favorably compares to national banking industry metrics.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 489,660 shares, or 17.12% on June 30, 2023.

As disclosed each year in the Annual Report to Shareholders, on June 30, 2023, the Company employed 81 people in full-time and part-time positions. Thirty-three (33) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, thirty (30) employees are full-time and there are three (3) part-time employees. The Company has had unionized employees since 1972. In October 2018, the agreement between the Company and the bargaining unit was negotiated and subsequently ratified by the bargaining unit with an effective date of February 16, 2019. The labor agreement will expire in February 2024. The Commonwealth of Pennsylvania and the National Labor Relations Board both afford protection to the organized status of pre-existing collective bargaining units. The Company has been advised that bargaining unit status limits the Company's strategic options relative to those of non-unionized insured depository institutions. The Company continues to consider this as a factor in its strategic and capital management decisions.

The Company operates seven community banking facilities in Hempfield Township, Latrobe, Ligonier, 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.cnbthebankonline.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,
2023 2022 2022
ASSETS
Cash and due from banks on demand
$5,380 $5,177 $4,691
Interest bearing deposits with banks
1,223 1,158 4,790
Total cash and cash equivalents
6,603 6,335 9,481
Securities available for sale
169,024 170,268 177,879
Restricted investments in bank stock
1,317 630 645
Loans
196,031 201,423 208,362
Allowance for loan losses
(1,412) (1,535) (2,115)
Net loans
194,619 199,888 206,247
Premises and equipment
2,820 2,517 2,635
Accrued interest receiable
2,220 2,203 2,211
Investment in Life Insurance
18,255 17,987 17,921
Other real estate owned
- - 3,150
Other assets
7,515 8,546 6,813
Total assets
$402,373 $408,374 $426,982
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing
$162,680 $165,551 $165,932
Interest bearing
178,621 201,914 208,922
Total deposits
341,301 367,465 374,854
Short-term borrowings
24,753 6,715 12,736
Other liabilities
1,755 1,736 1,700
Total liabilities
367,809 375,916 389,290
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 2023 and 2022
7,200 7,200 7,200
Retained earnings
63,271 63,073 62,558
Accumulated other comprehensive (loss) income
(23,364) (25,271) (19,522)
Less treasury stock, at cost, 739,047 shares in 2023 and 2022
(12,544) (12,544) (12,544)
Total shareholders' equity
34,563 32,458 37,692
Total liabilities and shareholders' equity
$402,372 $408,374 $426,982

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
2023 2022 2023 2022
(unaudited) (unaudited) (unaudited) (unaudited)
INTEREST INCOME:
Interest and fees on loans
$2,055 $2,102 $4,109 $4,225
Interest and dividends on securities:
Taxable
1,153 1,175 2,328 2,350
Exempt from federal income taxes
521 523 1,039 1,029
Other
36 9 66 17
Total Interest income
3,765 3,809 7,542 7,621

INTEREST EXPENSE:
Interest on deposits
34 49 72 105
Interest on short-term borrowings
281 17 496 17
Total Interest expense
315 66 568 122

NET INTEREST INCOME
3,450 3,743 6,974 7,499
PROVISION (CREDIT) FOR LOAN LOSSES
(122) - (122) 14

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
3,572 3,743 7,096 7,485
OTHER OPERATING INCOME:
Asset management and trust income
338 358 675 733
Service charges on deposit accounts
162 167 318 319
Net Security losses
- (23) - (10)
Losses on other real estate
- (185) - (172)
Income from investment in life insurance
125 125 251 248
Other income
21 78 71 125
Total other operating income
646 520 1,315 1,243

OTHER OPERATING EXPENSES:
Salaries and employee benefits
1,925 1,758 3,821 3,643
Net occupancy expense
173 167 387 371
Furniture and equipment
140 130 266 243
Pennsylvania shares tax
73 148 146 307
Legal and professional
151 172 277 283
FDIC insurance
59 36 90 60
Other real estate expense
- 15 - 177
Other expenses
800 832 1,622 1,581
Total other operating expenses
3,321 3,258 6,609 6,665

INCOME BEFORE INCOME TAXES
897 1,005 1,802 2,063
Income tax expense
55 73 115 158
Net income
$842 $932 $1,687 $1,905
Average Shares Outstanding
2,860,953 2,860,953 2,860,953 2,860,953
Earnings Per Share
$0.29 $0.33 $0.59 $0.67

SOURCE: Commercial National Financial Corporation



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