GlobeNewswire Inc | Oct 28, 2020 06:00AM EDT

October 28, 2020

ITHACA, Mich., Oct. 28, 2020 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced third quarter 2020 net income of $1,177,000, or $.30 per share compared to third quarter 2019 net income of $1,478,000, or $.37 per share. Return on Equity (ROE) was 11.50% for the third quarter of 2020 compared to 15.57% for the third quarter of 2019.

For the third quarter of 2020, net interest income increased $155,000, or 4.1% compared to the third quarter of 2019 primarily due to the growth in Paycheck Protection Program loans. These loans were authorized by the CARES Act approved by Congress in late March. Non-interest income decreased by $211,000, or 27.2% primarily due to lower loan fees. Operating expenses increased by $36,000, or 1.3% primarily due to the absence of FDIC insurance expense small bank assessment credits that were received in the prior year.

The provision for loan losses expense was $300,000 for the third quarter of 2020, compared to none for the third quarter of 2019. The provision expense in the current quarter relates to additional environmental factor allocations and increased classified loans.

Total assets were $548.1 million at September 30, 2020 compared to $512.1 million at September 30, 2019. The increase was primarily due to $33 million of Paycheck Protection Program loans outstanding at September 30, 2020 compared to zero at September 30, 2019. Total loans of $409.7 million increased $27.8 million, or 7.3% year over year.

The Board of Directors recently appointed Brent Hardman to the Bank and Holding Company Boards. Brent is co-owner and Chief Executive Officer of Powell Fabrication & Manufacturing LLC located in St. Louis, Michigan.

Commercial National Financial Corporation operates through a single subsidiary bank, Commercial Bank. Visit www.commercial-bank.com to view the latest consolidated Annual Report, news releases and other information about CEFC and Commercial Bank.

Selected Financial Data (unaudited): Quarter Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Return on Equity (ROE) 11.50% 15.57% 10.45% 13.51% Return on Assets (ROA) 0.85% 1.14% 0.78% 0.95% Net Interest Margin 3.01% 3.12% 3.09% 3.00% September 30, 2020 2019 Non-performing Assets 0.77% 0.75% RatioTier 1 Leverage Capital 8.84% 9.08% ^(^1)Total Risk-based 15.39% 14.10% Capital^(^1)Book Value Per Share $10.27 $9.59 Market Value Per Share $9.11 $10.20 ^(1) Ratios are for . . Commercial Bank.

Consolidated Statements of Income (unaudited): Quarter Ended September Nine Months Ended September 30, 30, 2020 2019 2020 2019Interest Income $ 4,715,503 $ 5,060,484 $ 14,401,670 $ 15,102,630Interest Expense 807,886 1,308,200 2,785,487 4,184,398Net Interest Income 3,907,617 3,752,284 11,616,183 10,918,232Provision for loan 300,000 - 1,250,000 -lossesNon-interest income 566,672 778,132 1,560,698 1,861,603Operating Expenses 2,772,687 2,736,680 8,201,942 8,322,030Income before taxes 1,401,602 1,793,736 3,724,939 4,457,805Income tax expense 224,500 315,500 597,500 755,500Net Income $ 1,177,102 $ 1,478,236 $ 3,127,439 $ 3,702,305Net Income per share ? $ 0.30 $ 0.37 $ 0.79 $ 0.93dilutedDividends declared $ 0.14 $ 0.13 $ 0.42 $ 0.39

Consolidated Balance Sheets (unaudited): September 30, 2020 2019 Assets Cash and cash equivalents $ 51,221,763 $ 29,548,841 Time deposits with other banks 22,839,000 33,703,000 Securities 38,306,539 39,462,218 Loans 409,697,305 381,898,344 Allowance for loan losses (4,043,266 ) (2,753,679 )Loans, net 405,654,039 379,144,665 Premises and equipment, net 8,217,624 8,584,696 Other assets 21,884,842 21,686,072 Total Assets $ 548,123,807 $ 512,129,492 Liabilities Deposits $ 451,610,662 $ 396,407,431 Other borrowings 39,480,000 61,188,333 Trust preferred 13,403,000 13,403,000 Other liabilities 2,904,766 3,120,848 Total Liabilities 507,398,428 474,119,612 Equity Total Equity 40,725,379 38,009,880 Total Liabilities and Equity $ 548,123,807 $ 512,129,492

Contact:Kevin A. Twardy CFO and COO 989-875-5528