Commercial National Financial Corporation Reports 1st Quarter 2021 Earnings

Rhea-AI Summary

Commercial National Financial Corporation (ticker: CEFC) reported a strong performance in Q1 2021, with net income soaring to $1,712,000, or $0.43 per share, a significant increase from $803,000, or $0.20 per share in Q1 2020. The Return on Equity (ROE) rose to 16.42%, up from 8.23% the previous year. Net interest income grew by 15.5% year-over-year, driven largely by accelerated Paycheck Protection Program loan payoffs. Total assets reached $569.8 million, a 11.4% increase, largely attributed to $60.4 million in PPP loans, while non-performing assets rose slightly to 1.09%.

Positive

• Net income increased to $1,712,000 in Q1 2021 from $803,000 in Q1 2020.
• Return on Equity (ROE) improved to 16.42% from 8.23% year-over-year.
• Net interest income rose by 15.5%, driven by PPP loan payoffs.
• Total assets increased to $569.8 million, up 11.4% from the previous year.
• Total loans improved by $56.9 million, or 14.7%, year-over-year.

Negative

• Non-performing assets ratio increased to 1.09% from 0.70% year-over-year.

ITHACA, Mich., April 28, 2021 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced first quarter 2021 net income of $1,712,000, or $.43 per share compared to first quarter 2020 net income of $803,000, or $.20 per share.   Return on Equity (ROE) was 16.42% for the first quarter of 2021 compared to 8.23% for the first quarter of 2020.

For the first quarter of 2021, net interest income increased $583,000, or 15.5% compared to the first quarter of 2020 primarily due to accelerated accretion of deferred fees from Paycheck Protection Program (PPP) loan payoffs. These loans were authorized by the CARES Act approved by Congress in response to the Covid-19 pandemic. Non-interest income increased by $74,000, or 14.6% primarily due to higher debit card fees. Operating expenses increased by $2,000, or .08%.

The provision for loan losses expense was zero for the first quarter of 2021, compared to $500,000 for the first quarter of 2020. The provision expense in the first quarter of 2020 was primarily due to additional environmental factor allocations related to worsening economic conditions from the Covid-19 pandemic.

Total assets were $569.8 million at March 31, 2021 compared to $511.3 million at March 31, 2020. The increase was primarily due to $60.4 million of Paycheck Protection Program loans outstanding at March 31, 2021 compared to zero at March 31, 2020. Total loans of $444.8 million increased $56.9 million, or 14.7% year over year.

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 March 31,
		2021				2020
Return on Equity (ROE)		16.42%				8.23%
Return on Assets (ROA)		1.25%				0.64%
Net Interest Margin		3.35%				3.19%
	March 31,
		2021				2020
Non-performing Assets Ratio		1.09%				0.70%
Tier 1 Leverage Capital(1)		9.06%				9.37%
Total Risk-based Capital(1)		15.59%				14.23%
Book Value Per Share	$10.68				$9.94
Market Value Per Share	$10.50				$8.40
(1) Ratios are for Commercial Bank.
Consolidated Statements of Income (unaudited):
	Quarter Ended March 31,
		2021				2020
Interest Income	$	4,982,565			$	4,826,267
Interest Expense		639,874				1,066,451
Net Interest Income		4,342,691				3,759,816
Provision for loan losses		-				500,000
Non-interest income		582,683				508,676
Operating Expenses		2,823,852				2,821,570
Income before taxes		2,101,522				946,922
Income tax expense		390,000				143,500
Net Income	$	1,711,522			$	803,422
Net Income per share - diluted	$	0.43			$	0.20
Dividends declared	$	0.14			$	0.14
Consolidated Balance Sheets (unaudited):
	March 31,
		2021				2020
Assets
Cash and cash equivalents	$	29,060,961			$	23,764,952
Time deposits with other banks		22,097,000				34,442,000
Securities		46,981,725				38,334,501
Loans		444,836,860				387,974,640
Allowance for loan losses		(4,256,978	)			(3,255,076	)
Loans, net		440,579,882				384,719,564
Premises and equipment, net		8,087,637				8,349,490
Other assets		22,967,038				21,713,027
Total Assets	$	569,774,243			$	511,323,534
Liabilities
Deposits	$	475,090,235			$	396,667,495
Other borrowings		35,400,000				58,749,303
Trust preferred		13,403,000				13,403,000
Other liabilities		3,533,757				3,084,575
Total Liabilities		527,426,992				471,904,373
Equity
Total Equity		42,347,251				39,419,161
Total Liabilities and Equity	$	569,774,243			$	511,323,534

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

FAQ

What were the earnings results for CEFC in Q1 2021?

CEFC reported net income of $1,712,000, or $0.43 per share, in Q1 2021.

How did CEFC's Return on Equity change in Q1 2021?

The Return on Equity (ROE) increased to 16.42% in Q1 2021 from 8.23% in Q1 2020.

What was the total asset value for CEFC in Q1 2021?

Total assets for CEFC reached $569.8 million as of March 31, 2021.

What significant factors contributed to CEFC's revenue increase?

The increase in net interest income was primarily driven by accelerated PPP loan payoffs.

Was there any change in CEFC's non-performing assets ratio?

Yes, the non-performing assets ratio increased to 1.09% in Q1 2021 from 0.70% in Q1 2020.