CEFC - Commercial National Financial Corporation Reports 3rd Quarter 2018 Earnings
ITHACA, Mich., Oct. 24, 2018 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced third quarter 2018 net income of $1,177,000, or $.30 per share compared to third quarter 2017 net income of $1,248,000, or $.31 per share. Return on Equity (ROE) was 13.68% for the third quarter of 2018 compared to 15.19% for the third quarter of 2017.
Total assets were $519.1 million at September 30, 2018 compared to $528.8 million at September 30, 2017. Total loans of $381.7 million decreased $7 million, or 1.8% year-over-year. The lending environment remains very competitive in our markets and we experienced several large commercial loan payoffs during 2018. However, our commercial loan pipeline is growing and we continue to develop new and existing customer relationships.
For the quarter ended September 30, 2018, net interest income decreased $283,000, or 7.5% primarily due to a higher cost of funds. Also, interest income in the prior year’s quarter included $141,000 related to the payoff of several non-accrual loans. Non-interest income increased $82,000, or 14.9% primarily due to the sale of a former branch land parcel for a $148,000 gain, partially offset by lower mortgage banking revenue. We continue to see challenges in residential loan demand due to the limited supply of housing inventory. Operating expenses increased by $101,000, or 3.9% primarily due to higher wages and benefits expense. Federal income tax expense was lower by $306,000 primarily due to the decrease in the statutory rate from 34% to 21%.
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, |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| Return on Equity (ROE) |
| 13.68% |
| 15.19% |
| 13.62% |
| 8.56% |
| Return on Assets (ROA) |
| 0.91% |
| 0.94% |
| 0.88% |
| 0.53% |
| Net Interest Margin |
| 2.88% |
| 3.06% |
| 2.93% |
| 2.99% |
| September 30, |
| 2018 |
| 2017 |
| Non-performing Assets Ratio |
| 0.40% |
| 0.52% |
| Tier 1 Leverage Capital(1) |
| 8.51% |
| 7.97% |
| Total Risk-based Capital(1) |
| 13.94% |
| 13.43% |
| Book Value Per Share |
| $8.67 |
| $8.13 |
| Market Value Per Share |
| $12.47 |
| $11.70 |
| (1) Ratios are for Commercial Bank. |
| Consolidated Statements of Income (unaudited): |
| Quarter Ended September 30, |
| Nine Months Ended September 30, |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| Interest Income |
| $ |
| 4,793,171 |
| $ |
| 4,815,576 |
| $ |
| 14,307,061 |
| $ |
| 14,055,469 |
| Interest Expense |
| 1,308,253 |
| 1,047,541 |
| 3,629,503 |
| 3,050,940 |
| Net Interest Income |
| 3,484,918 |
| 3,768,035 |
| 10,677,558 |
| 11,004,529 |
| Provision for loan losses |
| - |
| (75,000 |
| ) |
| - |
| (75,000 |
| ) |
| Non-interest income |
| 628,019 |
| 546,393 |
| 1,512,637 |
| 1,544,928 |
| Operating Expenses |
| 2,704,079 |
| 2,603,002 |
| 8,046,515 |
| 9,715,122 |
| Income before taxes |
| 1,408,858 |
| 1,786,426 |
| 4,143,680 |
| 2,909,335 |
| Income tax expense |
| 231,851 |
| 538,000 |
| 717,851 |
| 824,000 |
| Net Income |
| $ |
| 1,177,007 |
| $ |
| 1,248,426 |
| $ |
| 3,425,829 |
| $ |
| 2,085,335 |
| Net Income per share — diluted |
| $ |
| 0.30 |
| $ |
| 0.31 |
| $ |
| 0.86 |
| $ |
| 0.53 |
| Dividends declared |
| $ |
| 0.13 |
| $ |
| 0.13 |
| $ |
| 0.39 |
| $ |
| 0.39 |
| Consolidated Balance Sheets (unaudited): |
| September 30, |
| 2018 |
| 2017 |
| Assets |
| Cash and cash equivalents |
| $ |
| 21,135,682 |
| $ |
| 20,787,323 |
| Time deposits with other banks |
| 49,052,000 |
| 53,039,000 |
| Securities |
| 38,988,839 |
| 38,560,348 |
| Loans |
| 381,715,154 |
| 388,750,132 |
| Allowance for loan losses |
| (2,668,424 |
| ) |
| (2,766,673 |
| ) |
| Loans, net |
| 379,046,730 |
| 385,983,459 |
| Premises and equipment, net |
| 8,114,616 |
| 6,946,910 |
| Other assets |
| 22,733,983 |
| 23,505,584 |
| Total Assets |
| $ |
| 519,071,850 |
| $ |
| 528,822,624 |
| Liabilities |
| Deposits |
| $ |
| 413,177,885 |
| $ |
| 418,005,708 |
| Other borrowings |
| 55,269,515 |
| 60,331,046 |
| Trust preferred |
| 13,403,000 |
| 13,403,000 |
| Other liabilities |
| 2,855,188 |
| 4,132,806 |
| Total Liabilities |
| 484,705,588 |
| 495,872,560 |
| Equity |
| Total Equity |
| 34,366,262 |
| 32,950,064 |
| Total Liabilities and Equity |
| $ |
| 519,071,850 |
| $ |
| 528,822,624 |
Contact:
Kevin A. Twardy
CFO and COO
989-875-5528