Commercial National Reports December 31, 2022 Results

Rhea-AI Summary

Commercial National Financial Corporation (OTCQX:CNAF) reported a net income of $1,325,000 for Q4 2022, down from $1,707,000 in Q4 2021. For the full year ended December 31, 2022, earnings dropped to $3,907,000 compared to $4,685,000 in 2021. The company’s tier one capital ratios remain strong at 22.73%, with total risk-based capital at $58,943,000. However, the securities portfolio has been negatively impacted by rising interest rates, contributing to a temporary loss in book capital. The company employs 80 staff members, with 17.12% of shares owned by executive officers and directors.

Positive

• Tier one capital ratio at 22.73%, indicating strong financial health.
• Maintained a full-time and part-time workforce of 80 employees.

Negative

• Net income decreased by 22.4% in Q4 2022 compared to Q4 2021.
• Full-year earnings fell by 16.5% from 2021.
• Securities portfolio affected by rising interest rates, leading to unrealized losses.

LATROBE, PA / ACCESSWIRE / January 31, 2023 / Commercial National Financial Corporation (OTCQX:CNAF) (Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended December 31, 2022. The Company earned $1,325,000 (or $0.0.46 per average share outstanding) in the fourth quarter 2022 compared to $1,707,000 (or $0.60 per average share outstanding) in the fourth quarter of 2021. The Company earned $3,907,000 (or $1.37 per average share outstanding) for the twelve-month period ended December 31, 2022 and $4,685,000 (or $1.64 per average share outstanding) for the twelve-month period ended December 31, 2021. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at December 31, 2022 were 22.73%, 23.34%, 13.02% and 22.73% respectively. Tier one capital was $57,408,000 and total risk-based capital was $58,943,000 while book capital reflected a temporary after-tax accumulated other comprehensive loss stemming from net unrealized securities available-for-sale market value depreciation. As with many other insured depository institutions nation-wide, the Company's securities portfolio has been adversely impacted by rising interest rates.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 489,660 shares, or 17.12% on December 31, 2022.

As disclosed each year in the Annual Report to Shareholders, on December 31, 2022, the Company employed 80 people in full-time and part-time positions. Thirty-two (32) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, twenty-nine (29) employees are full-time and there are three (3) part-time employees. The Company has had unionized employees since 1972. In October 2018, the agreement between the Company and the bargaining unit was negotiated and subsequently ratified by the bargaining unit with an effective date of February 16, 2019. The labor agreement will expire in February 2024. The Commonwealth of Pennsylvania and the National Labor Relations Board both afford protection to the organized status of pre-existing collective bargaining units. The Company has been advised that bargaining unit status limits the Company's strategic options relative to those of non-unionized insured depository institutions. The Company continues to consider this as a factor in its strategic and capital management decisions.

The Company operates seven community banking facilities in Hempfield Township, Latrobe, Ligonier, Unity Township and West Newton, Pennsylvania and also maintains a commercial business development sales force throughout its entire market area. The Company operates an asset management and trust division of Commercial Bank & Trust of PA headquartered in Greensburg, Pennsylvania. Commercial Bank & Trust of PA also serves its customer base from an Internet banking site (www.cnbthebankonline.com) and an automated TouchTone Teller banking system.

Safe Harbor Statement

Forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "to," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements are based on information currently available to the Company, and the Company assumes no obligation to update these statements as circumstances change. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including changes in general economic and financial market conditions, unforeseen credit problems, and the Company's ability to execute its business plans. The actual results of future events could differ materially from those stated in any forward-looking statements herein.

COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
(Dollars in thousands)

		December 31				December 31
		2022				2021
ASSETS
Cash and due from banks on demand		$	5,177			$	3,168
Interest bearing deposits with banks			1,158				30,164
Total cash and cash equivalents			6,335				33,332
Securities available for sale			170,268				194,936
Restricted investments in bank stock			630				145
Loans			201,423				216,639
Allowance for loan losses			(1,535	)			(2,093	)
Net loans			199,888				214,546
Premises and equipment			2,517				2,580
Accrued Interest receivable			2,203				1,719
Investment in Life Insurance			17,987				17,655
Other Real estate owned			-				3,399
Other assets			8,546				3,663
Total assets		$	408,374			$	471,975
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing		$	165,551			$	167,513
Interest bearing			201,914				235,299
Total deposits			367,465				402,812
Short -Term borrowings			6,715				-
Other liabilities			1,736				4,181
Total liabilities			375,916				406,993
Shareholders' equity:
Common stock, par value $2 per share;
10,000,000 shares authorized; 3,600,000 shares
issued; 2,860,953 shares
outstanding in 2022 and 2021.			7,200				7,200
Retained earnings			63,073				62,141
Accumulated other comprehensive income			(25,271	)			8,185
Less treasury stock, at cost,
739,047 shares in 2022 and 2021			(12,544	)			(12,544	)
Total shareholders' equity			32,458				64,982
Total liabilities and shareholders' equity		$	408,374			$	471,975

COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Dollars in thousands, except per share data)

		Three Months								Twelve Months
		Ended December 31								Ended December 31
		2022				2021				2022				2021
INTEREST INCOME:
Interest and fees on loans			2,033				2,197			$	8,329			$	9,536
Interest and dividends on securities:
Taxable			1,172				1,015				4,694				3,956
Exempt from federal income taxes			519				299				2,069				944
Other			28				24				67				70
Total Interest income			3,752				3,535				15,159				14,506
INTEREST EXPENSE:
Interest on deposits			39				56				186				228
Interest on short-term borrowings			112				-				207				-
Total Interest expense			151				56				393				228
NET INTEREST INCOME			3,601				3,479				14,766				14,278
PROVISION(CREDIT) FOR LOAN LOSSES			-				550				(561	)			550
NET INTEREST INCOME AFTER
PROVISION(CREDIT) FOR LOAN LOSSES			3,601				2,929				15,327				13,728
OTHER OPERATING INCOME:
Asset management and trust income			323				379				1,400				1,505
Service charges on deposit accounts			151				174				642				690
Net Security gains(losses)			-				1,455				(11	)			1,490
Gain (Loss) on sale of other real estate			102								(1,060	)
Income from investment in life insurance			426				549				799				917
Other income			24				122				173				235
Total other operating income			1,026				2,679				1,943				4,837
OTHER OPERATING EXPENSES
Salaries and employee benefits			1,776				2,062				7,238				7,563
Net occupancy expense			191				207				733				790
Furniture and equipment			132				119				490				478
Pennsylvania shares tax			147				165				602				644
Legal and professional			138				262				555				569
FDIC Insurance expense			31				22				120				110
Other real estate expenses			3				117				197				119
Other expenses			789				751				3,168				2,891
Total other operating expenses			3,207				3,705				13,103				13,164
INCOME BEFORE INCOME TAXES			1,420				1,903				4,167				5,401
Income tax expense			95				196				260				716
Net income		$	1,325			$	1,707			$	3,907			$	4,685
Average Shares Outstanding			2,860,953				2,860,953				2,860,953				2,860,953
Earnings Per Share			0.46				0.60				1.37				1.64

SOURCE: Commercial National Financial Corporation

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FAQ

What were Commercial National Financial's earnings for Q4 2022?

The company earned $1,325,000 in Q4 2022, down from $1,707,000 in Q4 2021.

How did CNAF's full-year earnings compare from 2021 to 2022?

For the year ended December 31, 2022, earnings were $3,907,000, down from $4,685,000 in 2021.

What is the current tier one capital ratio for CNAF?

As of December 31, 2022, CNAF's tier one capital ratio is 22.73%.

How many employees does Commercial National Financial have?

The company employs 80 full-time and part-time employees.

What impact did rising interest rates have on CNAF?

Rising interest rates adversely affected the company's securities portfolio, leading to unrealized losses.