Commercial National Reports June 30, 2022 Earnings

Rhea-AI Summary

Commercial National Financial Corporation (OTCQX:CNAF) reported Q2 2022 earnings of $932,000 ($0.33 per share), down from $1,001,000 ($0.35 per share) in Q2 2021. For the first six months, earnings were $1,905,000 ($0.67 per share) compared to $2,069,000 ($0.72 per share) in the same period last year. The company maintained strong capital ratios: 21.74% tier one risk-based and 22.55% total risk-based at June 30, 2022. Direct and beneficial ownership by executives totaled 17.12%. The workforce included 82 employees, 34 of whom are unionized, with a labor agreement expiring in February 2024.

Positive

• Strong capital ratios: 21.74% tier one risk-based and 22.55% total risk-based.
• Direct ownership by executives reflects commitment, totaling 17.12%.

Negative

• Q2 2022 earnings declined by 6.9% year-over-year.
• 6.4% decrease in earnings for the six-month period compared to last year.
• Unionized workforce may limit strategic options compared to non-unionized institutions.

LATROBE, PA / ACCESSWIRE / July 21, 2022 / Commercial National Financial Corporation (OTCQX:CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended June 30, 2022. The Company earned $932,000 (or $0.33 per average share outstanding) in the second quarter 2022 compared to $1,001,000 (or $0.35 per average share outstanding) in the second quarter of 2022. The Company earned $1,905,000 (or $0.67 per average share outstanding) for the six-month period ended June 30, 2022 and $2,069,000 (or $0.72 per average share outstanding) for the six-month period ended June 30, 2021. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at June 30, 2022 were 21.74% ($56,787,000), 22.55% ($56,787,000), 12.63% ($58,902,000) and 21.74% ($56,787,000) respectively.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 489,660 shares, or 17.12% on June 30, 2022.

As disclosed each year in the Annual Report to Shareholders, on June 30, 2022, the Company employed 82 people in full-time and part-time positions. Thirty-four (34) employees are represented by the United Auto Workers, Local 1799. Of that bargaining unit total, thirty(30) employees are full-time and there are four (4) 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.cbthebank.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, except per share data)

		June 30,				December 31,				June 30,
		2022				2021				2021
ASSETS
Cash and due from banks on demand		$	4,691			$	3,168			$	4,806
Interest bearing deposits with banks			4,790				30,164				58,417
Total cash and cash equivalents			9,481				33,332				63,223
Securities available for sale			177,879				194,936				128,633
Restricted investments in bank stock			645				145				145
Loans			208,362				216,639				234,532
Allowance for loan losses			(2,115	)			(2,093	)			(1,991	)
Net loans			206,247				214,546				232,541
Premises and equipment			2,635				2,580				2,629
Accrued interest receivable			2,211				1,719				1,627
Investment in Life Insurance			17,921				17,655				19,332
Other real estate owned			3,150				3,399				-
Other assets			6,813				3,663				1,367
Total assets		$	426,982			$	471,975			$	449,497
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits:
Non-interest bearing		$	165,932			$	167,513			$	164,726
Interest bearing			208,922				235,299				215,455
Total deposits			374,854				402,812				380,181
Short-term borrowings			12,736				-				-
Other liabilities			1,700				4,181				4,067
Total liabilities			389,290				406,993				384,248
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				7,200
Retained earnings			62,558				62,141				61,012
Accumulated other comprehensive (loss) income			(19,522	)			8,185				9,581
Less treasury stock, at cost, 739,047 shares in 2022 and 2021			(12,544	)			(12,544	)			(12,544	)
Total shareholders' equity			37,692				64,982				65,249
Total liabilities and shareholders' equity		$	426,982			$	471,975			$	449,497

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

		Three Months								Six Months
		Ended June 30								Ended June 30
		2022				2021				2022				2021
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
INTEREST INCOME:
Interest and fees on loans		$	2,102			$	2,434			$	4,225			$	4,949
Interest and dividends on securities:
Taxable			1,175				981				2,350				1,966
Exempt from federal income taxes			523				217				1,029				445
Other			9				13				17				20
Total Interest income			3,809				3,645				7,621				7,380
INTEREST EXPENSE:
Interest on deposits			49				58				105				115
Interest on short-term borrowings			17				-				17				-
Total Interest expense			66				58				122				115
NET INTEREST INCOME			3,743				3,587				7,499				7,265
PROVISION FOR LOAN LOSSES			-				-				14				-
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES			3,743				3,587				7,485				7,265
OTHER OPERATING INCOME:
Asset management and trust income			358				380				733				738
Service charges on deposit accounts			167				172				319				338
Net Security (losses) gains			(23	)			45				(10	)			46
Losses on other real estate			(185	)			-				(172	)			-
Income from investment in life insurance			125				122				248				245
Other income			78				37				125				91
Total other operating income			520				756				1,243				1,458
OTHER OPERATING EXPENSES:
Salaries and employee benefits			1,758				1,822				3,643				3,653
Net occupancy expense			167				200				371				422
Furniture and equipment			130				132				243				245
Pennsylvania shares tax			148				164				307				314
Legal and professional			172				109				283				210
FDIC insurance			36				31				60				61
Other real estate expense			15				-				177				-
Other expenses			832				704				1,581				1,385
Total other operating expenses			3,258				3,162				6,665				6,290
INCOME BEFORE INCOME TAXES			1,005 -				1,181				2,063				2,433
Income tax expense			73				180				158				364
Net income		$	932			$	1,001			$	1,905			$	2,069
Average Shares Outstanding			2,860,953				2,860,953				2,860,953				2,860,953
Earnings Per Share		$	0.33			$	0.35			$	0.67			$	0.72

SOURCE: Commercial National Financial Corporation

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FAQ

What were the Q2 2022 earnings for CNAF?

CNAF reported earnings of $932,000, or $0.33 per average share outstanding, in Q2 2022.

How did CNAF's earnings in H1 2022 compare to H1 2021?

Earnings for H1 2022 were $1,905,000 ($0.67 per share), down from $2,069,000 ($0.72 per share) in H1 2021.

What is the status of the labor agreement for CNAF?

The labor agreement with the bargaining unit is set to expire in February 2024.

What are the capital ratios for CNAF as of June 30, 2022?

CNAF's capital ratios included 21.74% tier one risk-based and 22.55% total risk-based.