GlobeNewswire Inc | Jan 31, 2022 06:00AM EST

January 31, 2022

ITHACA, Mich., Jan. 31, 2022 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced fourth quarter 2021 net income of $1,765,000, or $.45 per share compared to fourth quarter 2020 net income of $1,237,000, or $.31 per share. Return on Equity (ROE) was 15.62% for the fourth quarter of 2021 compared to 11.91% for the fourth quarter of 2020.

For the fourth quarter of 2021, net interest income increased $590,000, or 15.1% compared to the fourth quarter of 2020 primarily due to higher accretion on Paycheck Protection Program (PPP) loans as well as from a higher average balance of interest-earning assets. Non-interest income decreased by $75,000, or 12.3% primarily due to lower miscellaneous income, partially offset by higher debit card interchange revenue. Operating expenses increased by $326,000 or 11.6% primarily due to higher compensation and benefits expense. During 2021, we hired additional commercial lending and treasury employees.

The provision for loan losses expense was negative $275,000 for the fourth quarter of 2021, compared to expense of $200,000 for the fourth quarter of 2020. The negative provision expense in the fourth quarter of 2021 was primarily due to improved economic conditions and lower allocations to classified loans as compared to the fourth quarter of 2020.

Total assets were $610.8 million at December 31, 2021 compared to $547.8 million at December 31, 2020. The increase was primarily due to core deposit growth, partially offset by lower wholesale borrowings. At December 31, 2021, Paycheck Protection Program loans outstanding were approximately $50 million compared to $31 million at December 31, 2020.

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 December Year Ended December 31, 31, 2021 2020 2021 2020Return on Equity (ROE) 15.62% 11.91% 14.63% 10.82%Return on Assets (ROA) 1.14% 0.90% 1.09% 0.81%Net Interest Margin 3.11% 3.02% 3.10% 3.07% December 31, 2021 2020 Non-performing Assets Ratio 0.72% 1.35% Tier 1 Leverage Capital^(1) 8.63% 8.99% Total Risk-based Capital^(1) 15.17% 15.50% Book Value Per Share $11.32 $10.42 Market Value Per Share $13.00 $9.25 ^(1) Ratios are for . . Commercial Bank.

Consolidated Statements of Income (unaudited): Quarter Ended December Year Ended December 31, 31, 2021 2020 2021 2020Interest Income $ 5,061,892 $ 4,626,763 $ 19,382,389 $ 19,028,433Interest Expense 567,963 722,502 2,406,284 3,507,989Net Interest Income 4,493,929 3,904,261 16,976,105 15,520,444Provision for loan (275,000) 200,000 (500,000) 1,450,000lossesNon-interest income 531,784 606,595 2,323,498 2,216,653Operating Expenses 3,137,945 2,812,374 12,023,496 11,063,677Income before taxes 2,162,768 1,498,482 7,776,107 5,223,420Income tax expense 398,000 261,500 1,410,000 859,000Net Income $ 1,764,768 $ 1,236,982 $ 6,366,107 $ 4,364,420Net Income per share ? $ 0.45 $ 0.31 $ 1.61 $ 1.10dilutedDividends declared $ 0.14 $ 0.14 $ 0.56 $ 0.56

Consolidated Balance Sheets (unaudited): December 31, 2021 2020Assets Cash and cash equivalents $ 28,713,832 $ 42,773,240Time deposits with other banks 20,854,000 24,337,000Securities 81,934,068 45,738,432Loans 451,571,794 409,106,744Allowance for loan losses (3,820,897) (4,215,192)Loans, net 447,750,897 404,891,552Premises and equipment, net 8,479,525 8,148,851Other assets 23,070,012 21,890,496Total Assets $ 610,802,334 $ 547,779,571 Liabilities Deposits $ 515,058,691 $ 450,901,065Other borrowings 34,400,000 39,480,000Trust preferred 13,403,000 13,403,000Other liabilities 3,047,041 2,658,928Total Liabilities 565,908,732 506,442,993 Equity Total Equity 44,893,602 41,336,578Total Liabilities and Equity $ 610,802,334 $ 547,779,571

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