ITHACA, Mich., April 26, 2023 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced first quarter 2023 net income of $1,470,000, or $.37 per share compared to first quarter 2022 net income of $3,050,000, or $.77 per share. Return on Equity (ROE) was 14.40% for the first quarter of 2023 compared to 26.26% for the first quarter of 2022.

For the first quarter of 2023, net interest income decreased by $1.65 million, or 26.1% compared to the first quarter of 2022 primarily due to substantially lower Paycheck Protection Program (PPP) loan fee accretion by approximately $2.5 million ($.50 per share, after taxes). When excluding PPP loan fee accretion, net interest income increased by $866,000, or 22.7% primarily due to an increase in net interest margin. Total loans, excluding PPP loans, increased $16.3 million, or 4% when comparing March 31, 2023 to March 31, 2022. The provision for credit losses expense increased from zero to $121,000 primarily due to general reserves being added corresponding to loan growth during the first quarter of 2023 as required by the new credit losses accounting standard adopted January 1, 2023. Non-interest income decreased by $106,000, or 18.4% primarily due to lower miscellaneous income. Operating expenses increased by $123,000, or 3.9% primarily due to higher wages and miscellaneous expense.

Total assets were $600.9 million at March 31, 2023 compared to $627.4 million at March 31, 2022. The decrease was primarily due to the repayment of $18.6 million of brokered certificates of deposit and $15.4 million of Federal Home Loan Bank borrowings with excess liquidity. At March 31, 2023, PPP loans outstanding were approximately $.5 million compared to $3.8 million at March 31, 2022. CEFC’s wholly owned subsidiary, Commercial Bank, remains significantly above “well capitalized” for regulatory purposes.

Visit www.commercial-bank.com to view the latest news releases and other information about CEFC and Commercial Bank.


Selected Financial Data (unaudited):  
 Quarter Ended March 31,
  2023   2022 
Return on Equity (ROE) 14.40%  26.26%
Return on Assets (ROA) 0.98%  1.99%
Net Interest Margin 3.28%  4.37%
    
 March 31,
  2023   2022 
Non-performing Assets Ratio 0.13%  0.70%
Tier 1 Leverage Capital(1) 9.04%  8.59%
Total Risk-based Capital(1) 15.06%  14.94%
Book Value Per Share$10.66  $11.51 
Market Value Per Share$10.75  $13.30 
(1)Ratios are for Commercial Bank.   


Consolidated Statements of Income (unaudited):
 Quarter Ended March 31,
  2023   2022 
Interest Income$6,076,059  $6,876,555 
Interest Expense 1,385,415   531,862 
Net Interest Income 4,690,644   6,344,693 
Provision for credit losses 121,000   - 
Non-interest income 472,504   578,875 
Operating Expenses 3,270,792   3,147,305 
Income before taxes 1,771,356   3,776,263 
Income tax expense 301,300   726,000 
Net Income$1,470,056  $3,050,263 
Net Income per share - diluted$0.37  $0.77 
Dividends declared$0.14  $0.14 


Consolidated Balance Sheets (unaudited):  
 March 31,
  2023   2022 
Assets   
Cash and cash equivalents$45,031,302  $67,543,910 
Time deposits with other banks 4,482,000   14,380,000 
Securities 98,252,929   108,533,063 
Loans 423,195,140   410,228,551 
Allowance for credit losses (3,881,282)  (3,831,809)
Loans, net 419,313,858   406,396,742 
Premises and equipment, net 8,718,868   8,377,785 
Other assets 25,101,915   22,165,771 
Total Assets$600,900,872  $627,397,271 
    
Liabilities   
Deposits$523,072,519  $531,049,989 
FHLB borrowings 19,000,000   34,400,000 
Trust preferred 13,403,000   13,403,000 
Other liabilities 3,170,449   2,886,462 
Total Liabilities 558,645,968   581,739,451 
    
Equity   
Total Equity 42,254,904   45,657,820 
Total Liabilities and Equity$600,900,872  $627,397,271 
    

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


Source: Commercial National Financial Corporation

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