CEFC - Commercial National Financial Corporation Reports 1st Quarter 2020 Earnings
ITHACA, Mich., April 29, 2020 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced first quarter 2020 net income of $803,000, or $.20 per share compared to first quarter 2019 net income of $1,101,000, or $.28 per share. Return on Equity (ROE) was 8.23% for the first quarter of 2020 compared to 12.60% for the first quarter of 2019.
For the first quarter of 2020, net interest income increased $195,000, or 5.5% primarily due to net interest margin improvement and growth in loans as compared to the first quarter of 2019. Non-interest income decreased by $106,000, or 18% primarily due to lower other income. Operating expenses decreased by $56,000, or 2% primarily due to lower professional fees.
The provision for loan losses expense was $500,000 for the first quarter of 2020, compared to none for the first quarter of 2019. The increase is primarily due to additional environmental factor allocations related to worsening economic conditions from the Covid-19 pandemic. Commercial Bank is making 90-day payment deferrals available to loan customers. We are also making Paycheck Protection Program loans authorized by the CARES Act approved by Congress in late March.
Total assets were $511.3 million at March 31, 2020 compared to $527.6 million at March 31, 2019. The decrease in total assets and deposits is primarily due to intentionally decreasing higher cost brokered certificates of deposit with excess liquidity. This contributed to an improved net interest margin. Total loans of $388 million increased $10 million, or 2.6% year over year.
The Board of Directors has undergone some recent changes. In April, Tim Gaylord retired from the Board. We would like to thank Tim for his years of dedicated service and wish him well in retirement. To fill his position, the Board appointed Tim Coscarelly. Tim has significant experience in commercial real estate management and development and is active in charitable organizations in the Mount Pleasant, Michigan community.
| Selected Financial Data (unaudited): |
| Quarter Ended March 31, |
| 2020 |
| 2019 |
| Return on Equity (ROE) |
| 8.23% |
| 12.60% |
| Return on Assets (ROA) |
| 0.64% |
| 0.85% |
| Net Interest Margin |
| 3.19% |
| 2.93% |
| March 31, |
| 2020 |
| 2019 |
| Non-performing Assets Ratio |
| 0.70% |
| 0.49% |
| Tier 1 Leverage Capital(1) |
| 9.37% |
| 8.57% |
| Total Risk-based Capital(1) |
| 14.23% |
| 14.27% |
| Book Value Per Share |
| $9.94 |
| $9.07 |
| Market Value Per Share |
| $8.40 |
| $11.35 |
| (1) Ratios are for Commercial Bank. |
| . |
| . |
| Consolidated Statements of Income (unaudited): |
| Quarter Ended March 31, |
| 2020 |
| 2019 |
| Interest Income |
| $ |
| 4,826,267 |
| $ |
| 4,973,686 |
| Interest Expense |
| 1,066,451 |
| 1,408,621 |
| Net Interest Income |
| 3,759,816 |
| 3,565,065 |
| Provision for loan losses |
| 500,000 |
| - |
| Non-interest income |
| 482,635 |
| 588,653 |
| Operating Expenses |
| 2,795,529 |
| 2,851,320 |
| Income before taxes |
| 946,922 |
| 1,302,398 |
| Income tax expense |
| 143,500 |
| 201,500 |
| Net Income |
| $ |
| 803,422 |
| $ |
| 1,100,898 |
| Net Income per share – diluted |
| $ |
| 0.20 |
| $ |
| 0.28 |
| Dividends declared |
| $ |
| 0.14 |
| $ |
| 0.13 |
| Consolidated Balance Sheets (unaudited): |
| March 31, |
| 2020 |
| 2019 |
| Assets |
| Cash and cash equivalents |
| $ |
| 23,764,952 |
| $ |
| 35,029,958 |
| Time deposits with other banks |
| 34,442,000 |
| 46,875,000 |
| Securities |
| 38,334,501 |
| 39,792,107 |
| Loans |
| 387,974,640 |
| 378,025,529 |
| Allowance for loan losses |
| (3,255,076 |
| ) |
| (2,672,096 |
| ) |
| Loans, net |
| 384,719,564 |
| 375,353,433 |
| Premises and equipment, net |
| 8,349,490 |
| 8,577,836 |
| Other assets |
| 21,713,027 |
| 22,016,752 |
| Total Assets |
| $ |
| 511,323,534 |
| $ |
| 527,645,086 |
| Liabilities |
| Deposits |
| $ |
| 396,667,495 |
| $ |
| 423,767,554 |
| Other borrowings |
| 58,749,303 |
| 51,874,954 |
| Trust preferred |
| 13,403,000 |
| 13,403,000 |
| Other liabilities |
| 3,084,575 |
| 2,634,945 |
| Total Liabilities |
| 471,904,373 |
| 491,680,453 |
| Equity |
| Total Equity |
| 39,419,161 |
| 35,964,633 |
| Total Liabilities and Equity |
| $ |
| 511,323,534 |
| $ |
| 527,645,086 |
Contact:
Kevin A. Twardy
CFO and COO
989-875-5528