Commercial National Reports March 31, 2024 Result

*LATROBE, PA / ACCESSWIRE / April 29, 2024 /* Commercial National Financial Corporation (OTCQX:CNAF)(Company), parent Company of Commercial Bank & Trust of PA, has reported results for the quarter ended March 31, 2024. The Company earned $527,000 (or $0.18 per average share outstanding) in the first quarter 2024 compared to $845,000 (or $0.30 per average share outstanding) in the first quarter of 2023.

Year-end 2023 market expectation for timely and extensive Federal Reserve Bank monetary policy easing, which would materially benefit the Company's overall financial condition and performance, has diminished thus far in 2024. Undistributed earnings at first quarter-end 2024 were $786,000 which, subject to regional Federal Reserve Bank non-objection, provides as needed carryover capacity to augment 2024 dividend declarations. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios at March 31, 2024 were 24.32%, 24.80%, 13.78% and 24.32% respectively. Tier one capital was $57,363,000 and total risk-based capital was $58,482,000 while book capital reflected a temporary after-tax accumulated other comprehensive loss stemming from net unrealized securities available-for-sale market value depreciation. As with many other insured depository institutions nation-wide, the Company's securities portfolio has been adversely impacted by generationally elevated interest rates. The Company's first quarter-end 2024 asset quality remained exceptionally strong as evidenced by no loan delinquencies, no non-accrual loans and no other real estate owned. Fully insured well diversified core deposits comprised 84.5% of total deposits at first quarter-end 2024 which favorably compares to national banking industry metrics. Overhead costs in 2024 reflect optimum staffing to sustain operational continuity in the community branch banking office network along with area specific sales team focus.

Direct and beneficial ownership by executive officers and directors of the Company's outstanding shares totaled 467,957 shares, or 16.36% on March 31, 2024.

As disclosed each year in the Annual Report to Shareholders, on March 31, 2024, 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 one (31) employees are full-time and there are three (3) part-time employees. The Company has had unionized employees since 1972. In November 2023, the agreement between the Company and the bargaining unit was negotiated and subsequently ratified by the bargaining unit with an effective date of February 15, 2024. The labor agreement will expire in February 2029. 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.cnbthebankonline.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)

March 31, December 31, March 31,
2024 2023 2023

*ASSETS*

Cash and due from banks on demand
$ 2,766 $ 4,274 $ 4,306
Interest bearing deposits with banks
1,830 1,172 1,068
Cash and Cash Equivalents
4,596 5,446 5,374
Securities available for sale
157,498 161,832 174,661
Restricted investments in bank stock
1,025 1,244 1,018
Loans
191,151 192,812 198,466
Allowance for credit losses
(1,120 ) (1,162 ) (1,535 )
Net loans
190,031 191,650 196,931
Premises and equipment
2,906 2,866 2,535
Accrued Interest receivable
2,521 2,199 2,672
Investment in life insurance
18,672 18,534 18,121
Other Assets
7,668 6,848 7,390
Total assets
$ 384,917 $ 390,619 $ 408,702
*LIABILITIES AND SHAREHOLDERS' EQUITY*

Liabilities

Deposits

Non-interest bearing
$ 157,567 156,767 $ 163,477
Interest bearing
169,758 170,508 187,481
Total deposits
327,325 327,275 350,958
Short-term borrowings
21,633 25,317 20,076
Other liabilities
1,783 1,891 1,561
Total liabilities
350,741 354,483 372,595
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 2024 and 2023
7,200 7,200 7,200
Retained earnings
62,928 63,145 63,174
Accumulated other comprehensive income
(23,408 ) (21,665 ) (21,723 )
Treasury stock, at cost, 739,047 shares

in 2024 and 2023
(12,544 ) (12,544 ) (12,544 )
Total shareholders' equity
34,176 36,136 36,107
Total liabilities and shareholders' equity
$ 384,917 $ 390,619 $ 408,702

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

Three Months Ended Three Months Ended
March 31, March 31,
2024 2023

INTEREST INCOME

Interest and fees on loans
$ 2,058 $ 2,054
Interest and dividends on securities:

Taxable
1,137 1,175
Exempt from federal income taxes
417 518
Other
42 30
Total Interest income
3,654 3,777
INTEREST EXPENSE

Interest on deposits
60 38
Interest on short-term borrowings
369 215
Total Interest expense
429 253
NET INTEREST INCOME
3,225 3,524
CREDIT FOR CREDIT LOSSES
(39 ) -
NET INTEREST INCOME AFTER

CREDIT FOR CREDIT LOSSES
3,264 3,524
OTHER OPERATING INCOME

Asset management and trust income
352 337
Service charges on deposit accounts
152 156
Net Security gains
3 -
Income from investment in life insurance
130 126
Other income
54 50
Total other operating income
691 669
OTHER OPERATING EXPENSES

Salaries and employee benefits
1,991 1,896
Net occupancy expense
231 214
Furniture and equipment
141 126
Pennsylvania shares tax
77 73
Legal and professional
131 126
FDIC Insurance
46 31
Other expenses
809 822
Total other operating expenses
3,426 3,288
INCOME BEFORE INCOME TAXES
529 905
Income tax expense
2 60
Net income
$ 527 $ 845
Average Shares Outstanding
2,860,953 2,860,953
Earnings Per Share
$ 0.18 $ 0.30

*SOURCE: *Commercial National Financial Corporation
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