Commercial National Reports December 31, 2022 Results

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LATROBE, PA / ACCESSWIRE / January 31, 2023 / Commercial National Financial Corporation (OTCQX:CNAF) (Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended December 31, 2022. The Company earned $1,325,000 (or $0.0.46 per average share outstanding) in the fourth quarter 2022 compared to $1,707,000 (or $0.60 per average share outstanding) in the fourth quarter of 2021. The Company earned $3,907,000 (or $1.37 per average share outstanding) for the twelve-month period ended December 31, 2022 and $4,685,000 (or $1.64 per average share outstanding) for the twelve-month period ended December 31, 2021. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at December 31, 2022 were 22.73%, 23.34%, 13.02% and 22.73% respectively. Tier one capital was $57,408,000 and total risk-based capital was $58,943,000 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.

Direct and beneficial ownership by executive officers and directors of the Company’s outstanding shares totaled 489,660 shares, or 17.12% on December 31, 2022.

As disclosed each year in the Annual Report to Shareholders, on December 31, 2022, the Company employed 80 people in full-time and part-time positions. Thirty-two (32) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, twenty-nine (29) 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)

	December 31			December 31
	2022			2021

ASSETS
Cash and due from banks on demand	$	5,177		$	3,168
Interest bearing deposits with banks		1,158			30,164
Total cash and cash equivalents		6,335			33,332

Securities available for sale		170,268			194,936
Restricted investments in bank stock		630			145

Loans		201,423			216,639
Allowance for loan losses		(1,535	)		(2,093	)
Net loans		199,888			214,546

Premises and equipment		2,517			2,580
Accrued Interest receivable		2,203			1,719
Investment in Life Insurance		17,987			17,655
Other Real estate owned		–			3,399
Other assets		8,546			3,663
Total assets	$	408,374		$	471,975

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	165,551		$	167,513
Interest bearing		201,914			235,299
Total deposits		367,465			402,812

Short -Term borrowings		6,715			–
Other liabilities		1,736			4,181
Total liabilities		375,916			406,993

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 2022 and 2021.		7,200			7,200
Retained earnings		63,073			62,141
Accumulated other comprehensive income		(25,271	)		8,185
Less treasury stock, at cost,
739,047 shares in 2022 and 2021		(12,544	)		(12,544	)
Total shareholders’ equity		32,458			64,982

Total liabilities and shareholders’ equity	$	408,374		$	471,975

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

	Three Months				Twelve Months
	Ended December 31				Ended December 31
	2022		2021		2022			2021

INTEREST INCOME:
Interest and fees on loans		2,033		2,197	$	8,329		$	9,536
Interest and dividends on securities:
Taxable		1,172		1,015		4,694			3,956
Exempt from federal income taxes		519		299		2,069			944
Other		28		24		67			70
Total Interest income		3,752		3,535		15,159			14,506

INTEREST EXPENSE:
Interest on deposits		39		56		186			228
Interest on short-term borrowings		112		–		207			–
Total Interest expense		151		56		393			228

NET INTEREST INCOME		3,601		3,479		14,766			14,278
PROVISION(CREDIT) FOR LOAN LOSSES		–		550		(561	)		550

NET INTEREST INCOME AFTER
PROVISION(CREDIT) FOR LOAN LOSSES		3,601		2,929		15,327			13,728

OTHER OPERATING INCOME:
Asset management and trust income		323		379		1,400			1,505
Service charges on deposit accounts		151		174		642			690
Net Security gains(losses)		–		1,455		(11	)		1,490
Gain (Loss) on sale of other real estate		102				(1,060	)
Income from investment in life insurance		426		549		799			917
Other income		24		122		173			235
Total other operating income		1,026		2,679		1,943			4,837

OTHER OPERATING EXPENSES
Salaries and employee benefits		1,776		2,062		7,238			7,563
Net occupancy expense		191		207		733			790
Furniture and equipment		132		119		490			478
Pennsylvania shares tax		147		165		602			644
Legal and professional		138		262		555			569
FDIC Insurance expense		31		22		120			110
Other real estate expenses		3		117		197			119
Other expenses		789		751		3,168			2,891
Total other operating expenses		3,207		3,705		13,103			13,164

INCOME BEFORE INCOME TAXES		1,420		1,903		4,167			5,401
Income tax expense		95		196		260			716

Net income	$	1,325	$	1,707	$	3,907		$	4,685

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

Earnings Per Share		0.46		0.60		1.37			1.64