Commercial National Financial Corporation Reports 2nd Quarter 2024 Results

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Rhea-AI Summary

Commercial National Financial (CEFC) reported Q2 2024 net income of $1,412,000 or $0.36 per share, compared to $1,543,000 or $0.39 per share in Q2 2023. The Return on Equity (ROE) decreased to 11.96% from 14.44% year-over-year. Net interest income slightly increased by 0.8%, with interest income up by $430,000 due to higher yields. Non-interest income rose by 19.1%, while operating expenses increased by 11.5%. Total assets decreased to $572.7 million from $587.9 million, with a 1.4% decrease in deposit balances. Loan quality remained strong with a non-performing assets ratio of 0.22%. CEFC's subsidiary, Commercial Bank, maintains a well-capitalized status. The company also announced the opening of a new banking office in Grand Rapids.

Positive

Net interest income increased by 0.8% year-over-year
Non-interest income rose by 19.1%
Loan quality remained strong with a non-performing assets ratio of 0.22%
Commercial Bank maintains well-capitalized status
New banking office opened in Grand Rapids, expanding market presence

Negative

Net income decreased from $1,543,000 to $1,412,000 year-over-year
Return on Equity (ROE) declined from 14.44% to 11.96%
Operating expenses increased by 11.5%
Total assets decreased by 2.6% from $587.9 million to $572.7 million
Total loans decreased by 2.2% or $9.1 million

AI-generated analysis. How Rhea-AI works. Not financial advice.

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07/26/2024 - 03:16 PM

ITHACA, Mich., July 26, 2024 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) reported net income for the second quarter of 2024 of $1,412,000 or $0.36 per share compared to second quarter 2023 net income of $1,543,000 or $0.39 per share. Return on Equity (ROE) was 11.96% for the second quarter of 2024 compared to 14.44% for the second quarter of 2023.

Net interest income for the second quarter of 2024 slightly increased by $38,000 or 0.8% compared to the respective 2023 period. Interest income increased by $430,000 due to higher yields on loans and other interest-earning assets, as the federal funds rate was higher during the current period. The higher federal funds rate, as well as a noticeable shift in customers that moved from lower interest-bearing deposit accounts to higher interest-bearing checking and time deposit accounts, resulted in an increase in interest expense of $392,000. Non-interest income increased by $99,000 or 19.1% primarily due to higher interchange income and other miscellaneous income. Operating expenses increased by $366,000 or 11.5% mainly due to higher wages and benefits expense.

Total assets were $572.7 million as of June 30, 2024 compared to $587.9 million as of June 30, 2023. The decrease in assets was due to the repayment of wholesale borrowings and trust preferred debt, along with a 1.4% decrease in deposit balances. The security portfolio decreased by $12.4 million, as funds from matured securities were used to repay wholesale borrowings. While total loans decreased by $9.1 million or 2.2%, loan quality remained strong with a non-performing assets ratio of 0.22%. Additionally, CEFC’s wholly owned subsidiary, Commercial Bank, remains significantly above “well capitalized” for regulatory purposes.

We are very pleased to announce that our new banking office in Grand Rapids is officially open. We are excited to extend our full banking services to the Grand Rapids community and look forward to growing our loan and deposit base in the Grand Rapids area.

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


Selected Financial Data (unaudited):
	Three Months Ended						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Return on Equity (ROE)	11.96		%	14.44		%		10.96	%		14.42	%
Return on Assets (ROA)	0.98		%	1.04		%		0.89	%		1.01	%
Net Interest Margin	3.38		%	3.23		%		3.31	%		3.26	%

	June 30, 2024			June 30, 2023
Non-Performing Assets Ratio	0.22		%	0.18		%
Tier 1 Leverage Capital Ratio⁽¹⁾	9.98		%	9.37		%
Total Risk-Based Capital Ratio⁽¹⁾	16.00		%	15.22		%
Book Value Per Share	$	12.16		$	10.89
Market Value Per Share	$	8.90		$	9.30
⁽¹⁾Ratios are for Commercial Bank

Consolidated Statements of Income (unaudited):
	Three Months Ended						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Interest Income	$	6,709,614		$	6,279,754		$	13,325,088		$	12,355,813
Interest Expense	2,131,773			1,740,142			4,255,200				3,125,557
Net Interest Income	4,577,841			4,539,612			9,069,888				9,230,256
Provision for credit losses	(79,201		)	(12,000		)	(39,201		)		109,000
Non-interest income	613,892			515,297			1,150,984				987,801
Operating Expenses	3,555,700			3,189,499			7,150,718				6,460,291
Income before taxes	1,715,234			1,877,410			3,109,355				3,648,766
Income tax expense	303,070			334,463			536,060				635,763
Net Income	$	1,412,164		$	1,542,947		$	2,573,295		$	3,013,003

Net Income per share – diluted	$	0.36		$	0.39		$	0.65		$	0.76
Dividends declared	$	0.14		$	0.14		$	0.28		$	0.28

Consolidated Balance Sheets (unaudited):

	June 30, 2024			June 30, 2023
Assets
Cash and cash equivalents	$	47,039,228		$	39,832,080
Time deposits with other banks	1,992,000			4,482,000
Securities	80,159,284			92,532,540
Loans	412,197,881			421,267,286
Allowance for credit losses	(3,528,389		)	(3,868,740		)
Loans, net	408,669,492			417,398,546
Premises and equipment, net	9,920,094			8,624,817
Other assets	24,949,807			25,075,126
Total Assets	$	572,729,905		$	587,945,109

Liabilities
Deposits	$	501,929,583		$	508,939,164
FHLB borrowings	9,000,000			19,000,000
Trust preferred	10,310,000			13,403,000
Other liabilities	3,269,872			3,422,503
Total Liabilities	524,509,455			544,764,667

Equity
Total Equity	48,220,450			43,180,442
Total Liabilities and Equity	$	572,729,905		$	587,945,109

Contact:
Benjamin Z. Ogle
CFO
989-875-5562

FAQ

What was CEFC's net income for Q2 2024?

CEFC reported a net income of $1,412,000 or $0.36 per share for Q2 2024.

How did CEFC's Return on Equity (ROE) change in Q2 2024 compared to Q2 2023?

CEFC's ROE decreased from 14.44% in Q2 2023 to 11.96% in Q2 2024.

What was CEFC's non-performing assets ratio as of June 30, 2024?

CEFC's non-performing assets ratio was 0.22% as of June 30, 2024.

How did CEFC's total assets change from June 30, 2023 to June 30, 2024?

CEFC's total assets decreased from $587.9 million on June 30, 2023 to $572.7 million on June 30, 2024.

What new development did CEFC announce regarding its market expansion?

CEFC announced the opening of a new banking office in Grand Rapids, extending its full banking services to the Grand Rapids community.