GlobeNewswire Inc | Jul 29, 2020 06:00AM EDT

July 29, 2020

ITHACA, Mich., July 29, 2020 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced second quarter 2020 net income of $1,147,000, or $.29 per share compared to second quarter 2019 net income of $1,123,000, or $.28 per share. Return on Equity (ROE) was 11.54% for the second quarter of 2020 compared to 12.32% for the second quarter of 2019.

For the second quarter of 2020, net interest income increased $348,000, or 9.7% compared to the second quarter of 2019 primarily due to net interest margin improvement as well as from growth in interest-earning assets related to Paycheck Protection Program loans. Non-interest income increased by $17,000, or 3.3%. Operating expenses decreased by $100,000, or 3.7% primarily due to lower professional fees, occupancy and equipment expenses.

The provision for loan losses expense was $450,000 for the second quarter of 2020, compared to none for the second quarter of 2019. The provision expense in the current quarter relates to additional environmental factor allocations and increased classified loans.

Total assets were $554.8 million at June 30, 2020 compared to $520.1 million at June 30, 2019. The increase was primarily due to $30.9 million of Paycheck Protection Program loans outstanding at June 30, 2020 compared to zero at June 30, 2019. Total loans of $415.6 million increased $39.4 million, or 10.5% year over year.

We are saddened by the recent passing of our Chairman of the Board and good friend, Mr. Scott Sheldon. Mr. Sheldon was a board member of the Bank for over 35 years and he will be truly missed. Please keep the Sheldon family in your thoughts and prayers as they go through this difficult time.

Due to the recent passing of Mr. Scott Sheldon, the Board of Directors appointed Mr. Richard Prestage as Chairman of both the Bank and holding company boards. Mr. Prestage has been a board member for over 15 years.



Selected Financial Data (unaudited): Quarter Ended June Six Months Ended June 30, 30, 2020 2019 2020 2019Return on Equity (ROE) 11.54% 12.32% 9.90% 12.42%Return on Assets (ROA) 0.84% 0.86% 0.74% 0.86%Net Interest Margin 3.07% 2.95% 3.13% 2.93% June 30, 2020 2019 Non-performing Assets Ratio 0.79% 0.56% Tier 1 Leverage Capital^(1) 8.75% 8.71% Total Risk-based Capital^(1) 14.59% 14.35% Book Value Per Share $10.12 $9.32 Market Value Per Share $9.40 $11.25 ^(1) Ratios are for . . Commercial Bank.

Consolidated Statements of Income (unaudited): Quarter Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019Interest Income $ $ $ $ 4,859,900 5,068,460 9,686,167 10,042,146Interest Expense 911,150 1,467,577 1,977,601 2,876,198Net Interest Income 3,948,750 3,600,883 7,708,566 7,165,948Provision for loan 450,000 - 950,000 -lossesNon-interest income 511,391 494,818 994,026 1,083,471Operating Expenses 2,633,726 2,734,030 5,429,255 5,585,350Income before taxes 1,376,415 1,361,671 2,323,337 2,664,069Income tax expense 229,500 238,500 373,000 440,000Net Income $ $ $ $ 1,146,915 1,123,171 1,950,337 2,224,069Net Income per share ? $ 0.29 $ 0.28 $ 0.49 $ 0.56dilutedDividends declared $ 0.14 $ 0.13 $ 0.28 $ 0.26

Consolidated Balance Sheets (unaudited): June 30, 2020 2019Assets Cash and cash equivalents $ 45,982,221 $ 30,455,622Time deposits with other banks 28,288,000 44,387,000Securities 38,972,896 41,633,532Loans 415,605,705 376,254,807Allowance for loan losses (3,733,130) (2,742,679)Loans, net 411,872,575 373,512,128Premises and equipment, net 8,242,515 8,625,432Other assets 21,472,268 21,508,487Total Assets $ 554,830,475 $ 520,122,201 Liabilities Deposits $ 447,477,547 $ 409,887,337Other borrowings 49,954,378 56,911,082Trust preferred 13,403,000 13,403,000Other liabilities 3,853,904 2,975,910Total Liabilities 514,688,829 483,177,329 Equity Total Equity 40,141,646 36,944,872Total Liabilities and Equity $ 554,830,475 $ 520,122,201

Contact:Kevin A. TwardyCFO and COO989-875-5528