Commercial National Financial Corporation Reports 3rd Quarter 2022 Earnings

Rhea-AI Summary

Commercial National Financial Corporation (CEFC) reported a strong third quarter of 2022, with net income rising to $1,601,000 (or $0.40 per share) compared to $1,478,000 (or $0.37 per share) in 2021. The company's Return on Equity (ROE) increased to 15.72% from 13.35% year-over-year. Net interest income surged by 11.3% to $4,524,951, driven by higher market interest rates. Total loans rose by $21.3 million (5.4%) compared to the previous year. Total assets grew to $613.1 million, up from $591.8 million in 2021, reflecting solid core deposit growth.

Positive

• Net income increased to $1,601,000, up from $1,478,000 year-over-year.
• ROE improved to 15.72%, compared to 13.35% in Q3 2021.
• Net interest income climbed 11.3% to $4,524,951 due to higher market interest rates.
• Total loans increased by $21.3 million or 5.4% year-over-year.

Negative

• Operating expenses rose by $138,000, or 4.4%, primarily due to higher wages and benefits.

ITHACA, Mich., Oct. 27, 2022 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) today announced third quarter 2022 net income of $1,601,000, or $.40 per share compared to third quarter 2021 net income of $1,478,000, or $.37 per share. Return on Equity (ROE) was 15.72% for the third quarter of 2022 compared to 13.35% for the third quarter of 2021.

For the third quarter of 2022, net interest income increased $458,000, or 11.3% compared to the third quarter of 2021 primarily due to higher market interest rates and interest-earning assets. Total loans, excluding Paycheck Protection Program (PPP) loans, increased $21.3 million, or 5.4% when comparing September 30, 2022 to September 30, 2021. Non-interest income increased by $35,000, or 5.8% primarily due to higher debit card interchange fees. Operating expenses increased by $138,000, or 4.4% primarily due to higher wages and benefits expense.  

Total assets were $613.1 million at September 30, 2022 compared to $591.8 million at September 30, 2021. The increase was primarily due to core deposit growth, partially offset by lower wholesale borrowings. At September 30, 2022, PPP loans outstanding were approximately $1.0 million compared to $54.4 million at September 30, 2021.

Commercial National Financial Corporation operates through a single subsidiary bank, Commercial Bank. Visit www.commercial-bank.com to view the latest consolidated Annual Report, news releases and other information about CEFC and Commercial Bank.

Selected Financial Data (unaudited):
	Quarter Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
Return on Equity (ROE)		15.72	%			13.35	%			19.00	%			14.28	%
Return on Assets (ROA)		1.02	%			1.00	%			1.32	%			1.07	%
Net Interest Margin		3.02	%			2.90	%			3.45	%			3.07	%
	September 30,
	2022				2021
Non-performing Assets Ratio		0.11	%			0.74	%
Tier 1 Leverage Capital(1)		8.59	%			8.83	%
Total Risk-based Capital(1)		14.74	%			15.38	%
Book Value Per Share	$	9.39			$	11.07
Market Value Per Share	$	10.75			$	10.58
(1) Ratios are for Commercial Bank.
Consolidated Statements of Income (unaudited):
	Quarter Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
Interest Income	$	5,311,180			$	4,657,097			$	17,231,375			$	14,320,497
Interest Expense		786,229				589,799				1,903,293				1,838,321
Net Interest Income		4,524,951				4,067,298				15,328,082				12,482,176
Provision for loan losses		-				(225,000	)			-				(225,000	)
Non-interest income		641,174				605,799				1,717,031				1,791,714
Operating Expenses		3,243,954				3,106,093				9,518,566				8,885,551
Income before taxes		1,922,171				1,792,004				7,526,547				5,613,339
Income tax expense		321,000				314,000				1,357,000				1,012,000
Net Income	$	1,601,171			$	1,478,004			$	6,169,547			$	4,601,339
Net Income per share – diluted	$	0.40			$	0.37			$	1.56			$	1.16
Dividends declared	$	0.14			$	0.14			$	0.42			$	0.42
Consolidated Balance Sheets (unaudited):
	September 30,
	2022				2021
Assets
Cash and cash equivalents	$	53,518,943			$	35,881,247
Time deposits with other banks		9,458,000				20,854,000
Securities		102,600,641				59,058,059
Loans		416,905,083				449,036,166
Allowance for loan losses		(4,055,878	)			(4,086,664	)
Loans, net		412,849,205				444,949,502
Premises and equipment, net		8,853,644				8,311,175
Other assets		25,825,343				22,785,377
Total Assets	$	613,105,776			$	591,839,360
Liabilities
Deposits	$	540,250,306			$	497,771,045
FHLB borrowings		19,000,000				34,400,000
Trust preferred		13,403,000				13,403,000
Other liabilities		3,210,208				2,371,146
Total Liabilities		575,863,514				547,945,191
Equity
Total Equity		37,242,262				43,894,169
Total Liabilities and Equity	$	613,105,776			$	591,839,360

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

FAQ

What were the earnings results for CEFC in Q3 2022?

CEFC reported net income of $1,601,000, or $0.40 per share, in Q3 2022.

How did CEFC's Return on Equity change in Q3 2022?

The Return on Equity (ROE) for CEFC increased to 15.72% in Q3 2022 from 13.35% in Q3 2021.

What drove the increase in net interest income for CEFC?

Net interest income rose by 11.3% to $4,524,951 due to higher market interest rates.

How have total loans changed for CEFC compared to last year?

Total loans increased by $21.3 million, or 5.4%, when comparing September 30, 2022, to September 30, 2021.