Commercial National Financial Corporation Reports 4th Quarter 2024 Results

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(Neutral)

Rhea-AI Summary

Commercial National Financial (CEFC) reported Q4 2024 net income of $1,882,000 ($0.47 per share), up from $1,458,000 ($0.37 per share) in Q4 2023. The company's ROE increased to 14.73% from 13.34% year-over-year. Net interest income rose by $362,000 (7.9%), driven by federal funds rate cuts and higher yields on loans and securities.

Total assets decreased to $567 million from $579 million, primarily due to $13 million in repayment of wholesale borrowings and trust preferred debt. Total loans decreased by $22 million (5.2%), though loan quality remained strong with a non-performing assets ratio of 0.28%. The security portfolio decreased by $12 million as matured securities were used to repay wholesale borrowings. Commercial Bank maintains 'well capitalized' status with improved capital ratios.

Positive

Net income increased 29% YoY to $1,882,000 in Q4 2024
Net interest income grew 7.9% YoY
ROE improved to 14.73% from 13.34%
Non-interest income increased by $250,000
Strong loan quality with 0.28% non-performing assets ratio
Improved capital ratios with Tier 1 at 10.32% (up from 9.63%)

Negative

Total assets declined by $12 million YoY
Loan portfolio decreased by 5.2% ($22 million)
Full-year net income decreased to $5.86M from $6.17M
Operating expenses increased by $151,000
Deposit balances decreased by 0.6%

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01/21/2025 - 04:35 PM

ITHACA, Mich., Jan. 21, 2025 (GLOBE NEWSWIRE) -- Commercial National Financial Corporation (Pink Sheets: CEFC) reported net income for the fourth quarter of 2024 of $1,882,000 or $0.47 per share compared to fourth quarter 2023 net income of $1,458,000 or $0.37 per share. Return on Equity (ROE) was 14.73% for the fourth quarter of 2024 compared to 13.34% for the fourth quarter of 2023.

The federal funds rate cuts helped alleviate interest margin pressure during the fourth quarter of 2024, as net interest income increased by $362,000 or 7.9% compared to the respective 2023 period. Interest income increased by $112,000, as yields on loans and securities remained above prior period levels. Interest expense decreased by $250,000, as deposit rates were reduced following the federal funds rate cuts. Non-interest income improved by $250,000 for the current quarter, while operating expenses increased by $151,000, which were mainly due to higher wages and benefits expense.

Total assets were $567 million as of December 31, 2024 compared to $579 million as of December 31, 2023. The decrease in assets was due to the repayment of wholesale borrowings and trust preferred debt totaling $13 million, along with a 0.6% decrease in deposit balances. The security portfolio decreased by $12 million, as funds from matured securities were used to repay wholesale borrowings. While total loans decreased by $22 million or 5.2% due to the high interest rate environment and early loan payoffs, loan quality remained strong with a non-performing assets ratio of 0.28%. Additionally, 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						Year Ended
	Dec 31, 2024			Dec 31, 2023			Dec 31, 2024			Dec 31, 2023
Return on Equity (ROE)		14.73	%		13.34	%		12.04	%		14.40	%
Return on Assets (ROA)		1.31	%		0.99	%		1.02	%		1.04	%
Net Interest Margin		3.66	%		3.28	%		3.44	%		3.26	%

	Dec 31, 2024			Dec 31, 2023
Non-Performing Assets Ratio		0.28	%		0.16	%
Tier 1 Leverage Capital Ratio⁽¹⁾		10.32	%		9.63	%
Total Risk-Based Capital Ratio⁽¹⁾		16.99	%		15.58	%
Book Value Per Share	$12.74			$11.80
Market Value Per Share	$9.85			$9.26
⁽¹⁾Ratios are for Commercial Bank



Consolidated Statements of Income (unaudited):
	Quarter Ended						Year Ended
	Dec 31, 2024			Dec 31, 2023			Dec 31, 2024			Dec 31, 2023
Interest Income	$	6,692,617		$	6,580,148		$	26,762,188		$	25,392,219
Interest Expense		1,764,560			2,014,110			8,087,045			7,026,000
Net Interest Income		4,928,057			4,566,038			18,675,143			18,366,219
Provision for credit losses		(55,008	)		(57,494	)		(93,980	)		(165,494	)
Non-interest income		706,790			456,500			2,407,386			1,998,998
Operating Expenses		3,433,219			3,281,896			14,102,164			13,005,407
Income before taxes		2,256,636			1,798,136			7,074,345			7,525,304
Income tax expense		374,998			340,000			1,211,078			1,352,663
Net Income	$	1,881,638		$	1,458,136		$	5,863,267		$	6,172,641

Net Income per share — diluted	$	0.47		$	0.37		$	1.48		$	1.56
Dividends declared	$	0.14		$	0.14		$	0.56		$	0.56



Consolidated Balance Sheets (unaudited):

	Dec 31, 2024			Dec 31, 2023
Assets
Cash and cash equivalents	$	55,588,156		$	32,942,957
Time deposits with other banks		1,743,000			3,735,000
Securities		82,075,403			94,306,770
Loans		395,651,055			417,403,567
Allowance for credit losses		(3,482,203	)		(3,570,271	)
Loans, net		392,168,852			413,833,296
Premises and equipment, net		10,037,771			9,252,193
Other assets		25,029,745			25,090,633
Total Assets	$	566,642,927		$	579,160,849

Liabilities
Deposits	$	498,507,449		$	501,646,583
FHLB borrowings		4,000,000			14,000,000
Trust preferred		10,310,000			13,403,000
Other liabilities		3,295,393			3,301,371
Total Liabilities		516,112,842			532,350,954

Equity
Total Equity		50,530,085			46,809,895
Total Liabilities and Equity	$	566,642,927		$	579,160,849

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

FAQ

What was CEFC's net income for Q4 2024?

CEFC reported a net income of $1,882,000 ($0.47 per share) for Q4 2024, compared to $1,458,000 ($0.37 per share) in Q4 2023.

How did CEFC's loan portfolio perform in 2024?

CEFC's total loans decreased by $22 million or 5.2% in 2024, though loan quality remained strong with a non-performing assets ratio of 0.28%.

What was CEFC's Return on Equity (ROE) in Q4 2024?

CEFC's ROE for Q4 2024 was 14.73%, an improvement from 13.34% in Q4 2023.

How did CEFC's net interest income change in Q4 2024?

Net interest income increased by $362,000 or 7.9% compared to Q4 2023, helped by federal funds rate cuts.

What were CEFC's total assets as of December 31, 2024?

CEFC's total assets were $567 million as of December 31, 2024, compared to $579 million at the end of 2023.