Commercial National Reports December 31, 2024 Results

Rhea-AI Summary

Commercial National Financial (OTCQX:CNAF) reported fourth quarter 2024 earnings of $636,000 ($0.22 per share), up from $479,000 ($0.17 per share) in Q4 2023. However, full-year 2024 earnings decreased to $1,841,000 ($0.64 per share) from $3,047,000 ($1.07 per share) in 2023.

The company's 2024 performance showed a 0.48% return on average assets and 5.40% return on equity, with a tax-equivalent net interest margin of 3.44%. Capital ratios remained strong, with tier one risk-based at 24.90%, total risk-based at 25.28%, and leverage at 14.01%. Fully insured core deposits comprised 87.36% of total deposits.

The company's securities portfolio was impacted by high market interest rates, though monetary policy easing began in mid-September 2024. Dividend declarations in Q4 2024 became dependent on current earnings expectations due to the full utilization of undistributed earnings from 2022 and 2023.

Positive

• Q4 2024 earnings increased 32.8% YoY to $636,000
• Strong capital ratios well above industry benchmarks (24.90% tier one risk-based)
• High proportion of insured core deposits at 87.36%
• Exceptional asset quality maintained

Negative

• Full-year 2024 earnings declined 39.6% to $1,841,000 from $3,047,000 in 2023
• Low return on average assets at 0.48%
• Securities portfolio adversely impacted by high interest rates
• Reduced dividend capacity due to full utilization of undistributed earnings

LATROBE, PA / ACCESS Newswire / January 30, 2025 / Commercial National Financial Corporation (OTCQX:CNAF) (Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended December 31, 2024. The Company earned $636,000 (or $0.22 per average share outstanding) in the fourth quarter 2024 compared to $479,000 (or $0.17 per average share outstanding) in the fourth quarter of 2023. The Company earned $1,841,000 (or $0.64 per average share outstanding) for the twelve-month period ended December 31, 2024 and $3,047,000 (or $1.07 per average share outstanding) for the twelve-month period ended December 31, 2023.

The Company's full-year 2024 return on average assets was 0.48% while return on average equity was 5.40%. Tax equivalent net interest margin for 2024 was 3.44%. Overhead costs in 2024 were reflective of optimum staffing to sustain operational continuity in the community branch office network, commercial business development and asset management/trust division along with area specific joint sales team focus. Fully insured well diversified core deposits comprised 87.36% of total deposits at year-end 2024 which very favorably compares to national banking industry metrics. Asset quality remained exceptionally strong across-the-board. Year-end 2024 capital adequacy and strength greatly exceeded major banking industry benchmarks. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at December 31, 2024 were 24.90%, 25.28%, 14.01% and 24.90% respectively. Tier one capital was $56,870,000 and total risk-based capital was $57,735,000 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 nationwide, the Company's securities portfolio has been adversely impacted by generationally elevated market interest rates and yields.

At year-end 2023 there was strong market expectation for timely and extensive Federal Reserve Bank monetary policy easing beginning by first quarter 2024 following the Federal Reserve's unprecedentedly rapid and extensive 525 basis points of interest rate hikes between March 2022 and July 2023. However, such easing, which would materially benefit the Company's overall financial condition and performance by reducing marginal funding cost along with the deposit footing impeding attractiveness of non-deposit money market alternatives, only belatedly initiated in mid-September 2024. Undistributed earnings from 2022 and 2023 were at last fully utilized during 2024's third quarter to provide limited carryover capacity in augmenting 2024 dividend declarations. As a result, beginning in 2024's fourth quarter, ongoing dividend declarations were solely reliant on prevailing earnings expectations which continue to be influenced by a recently receding multiple decade high in Federal Reserve Bank driven marginal funding cost. Commercial National Financial Corporation's traditional practice of optimizing dividends within the limitations imposed by banking regulation and earnings circumstance has not changed. That practice continues to be supported by exceptional asset quality and exceedingly strong capital which, together, provide a firm basis for future earnings and dividends improvement as conditions warrant.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 460,757 shares, or 16.11% on December 31, 2024.

As disclosed each year in the Annual Report to Shareholders, on December 31, 2024, the Company employed 78 people in full-time and part-time positions. Thirty three (33) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, thirty (30) employees are full-time and there are three (3) part-time employees. The Company has had unionized employees since 1972. In November 2023, the agreement between the Company and the bargaining unit was negotiated and subsequently ratified by the bargaining unit with an effective date of February 15, 2024. The labor agreement will expire in February 2029. 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
		2024				2023
ASSETS
Cash and due from banks on demand		$	3,743			$	4,274
Interest bearing deposits with banks			1,322				1,172
Total cash and cash equivalents			5,065				5,446
Securities available for sale			156,076				161,832
Restricted investments in bank stock			1,671				1,244
Loans			181,452				192,812
Allowance for loan losses			(865	)			(1,162	)
Net loans			180,587				191,650
Premises and equipment			2,790				2,866
Accrued Interest receivable			2,202				2,199
Investment in Life Insurance			19,083				18,534
Other assets			7,381				6,848
Total assets		$	374,855			$	390,619
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing		$	145,735			$	156,767
Interest bearing			155,826				170,508
Total deposits			301,561				327,275
Short -Term borrowings			38,665				25,317
Other liabilities			1,854				1,891
Total liabilities			342,080				354,483
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 2024 and 2023.			7,200				7,200
Retained earnings			62,439				63,145
Accumulated other comprehensive income			(24,320	)			(21,665	)
Less treasury stock, at cost,
739,047 shares in 2024 and 2023			(12,544	)			(12,544	)
Total shareholders' equity			32,775				36,136
Total liabilities and shareholders' equity		$	374,855			$	390,619

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
		2024				2023				2024				2023
INTEREST INCOME:
Interest and fees on loans			2,055				2,062			$	8,214			$	8,215
Interest and dividends on securities:
Taxable			1,000				1,136				4,404				4,601
Exempt from federal income taxes			547				482				1,794				2,023
Other			57				50				215				162
Total Interest income			3,659				3,730				14,627				15,001
INTEREST EXPENSE:
Interest on deposits			48				79				208				188
Interest on short-term borrowings			477				414				1,836				1,273
Total Interest expense			525				493				2,044				1,461
NET INTEREST INCOME			3,134				3,237				12,583				13,540
PROVISION(CREDIT) FOR LOAN LOSSES			(219	)			-				(293	)			(372	)
NET INTEREST INCOME AFTER
PROVISION(CREDIT) FOR LOAN LOSSES			3,353				3,237				12,876				13,912
OTHER OPERATING INCOME:
Asset management and trust income			375				332				1,451				1,346
Service charges on deposit accounts			166				167				644				652
Net Security gains(losses)			-				(6	)			3				(6	)
Income from investment in life insurance			135				136				524				514
Other income			25				20				120				110
Total other operating income			701				649				2,742				2,616
OTHER OPERATING EXPENSES
Salaries and employee benefits			2,001				1,993				8,111				7,747
Net occupancy expense			200				185				839				766
Furniture and equipment			134				139				552				534
Pennsylvania shares tax			84				73				328				293
Legal and professional			112				156				550				583
FDIC Insurance expense			46				46				185				186
Other expenses			835				837				3,261				3,202
Total other operating expenses			3,412				3,429				13,826				13,311
INCOME BEFORE INCOME TAXES			642				457				1,792				3,217
Income tax expense			6				(22	)			(49	)			170
Net income		$	636			$	479			$	1,841			$	3,047
Average Shares Outstanding			2,860,953				2,860,953				2,860,953				2,860,953
Earnings Per Share			0.22				0.17				0.64				1.07

CONTACT:
Wendy Piper
wpiper@cbthebank.com

SOURCE: Commercial National Financial Corp. (Pennsylvania)

View the original press release on ACCESS Newswire

FAQ

What were CNAF's Q4 2024 earnings compared to Q4 2023?

CNAF earned $636,000 ($0.22 per share) in Q4 2024, compared to $479,000 ($0.17 per share) in Q4 2023, representing a 32.8% increase.

How much did CNAF's full-year earnings decline in 2024?

CNAF's full-year earnings declined by 39.6%, from $3,047,000 in 2023 to $1,841,000 in 2024.

What were CNAF's key capital ratios as of December 31, 2024?

As of December 31, 2024, CNAF's tier one risk-based ratio was 24.90%, total risk-based ratio was 25.28%, leverage ratio was 14.01%, and common equity tier one ratio was 24.90%.

What percentage of CNAF's deposits were fully insured core deposits in 2024?

87.36% of CNAF's total deposits were fully insured core deposits at year-end 2024.

When did CNAF begin experiencing monetary policy easing in 2024?

CNAF began experiencing monetary policy easing in mid-September 2024, later than the initially expected first quarter 2024 timeline.