Commercial National Financial Corporation is a bank holding company. The corporation is owner of 100% of the outstanding shares of common stock of Commercial National Bank of Pennsylvania. Commercial National Financial Corp. has a market cap of $49.67 million; its shares were traded at around $17.3 with a P/E ratio of 10.95 and P/S ratio of 2.19. The dividend yield of Commercial National Financial Corp. stocks is 5.09%.
Highlight of Business Operations:The Corporation s total assets increased by $9.5 million, or 2.63%, from December 31, 2008 to June 30, 2009. Total cash and cash equivalents increased by $2.8 million and investment securities available for sale increased by $15.2 million. The increase in investments was mainly due to the purchase of $34.1 million in securities, $19.5 million in principal pay-downs on mortgage-backed securities, a $1.0 million maturity (call) of a municipal bond and a $1.3 million increase in fair value of securities. Net loans outstanding decreased by $9.5 million. The decrease in loans was mainly the result of declines in the following categories; $6.3 million in mortgages and $3.0 million in installment loans. The Corporation attributes the loan declines to consumer and commercial customers being cautious in the first half of 2009.
Shareholders\' equity was $40.7 million on June 30, 2009 compared to $39.1 million on December 31, 2008. Total shareholders equity increased due to the following; the $2.3 million in net income, a $844,000 increase in other comprehensive income, due to increases in the fair value of securities available for sale, a $291,000 decrease from the purchase of treasury stock and a $1.3 million decrease from cash dividends paid to shareholders. Book value per common share increased from $13.56 at December 31, 2008 to $14.22 at June 30, 2009.
Interest income for the six months ended June 30, 2009 and June 30, 2008 was $9.9 million. Loan income for the six months ended June 30, 2009 was $6.1 million compared to $6.7 million in 2008. The decrease in loan income was due to lower average loan balances and lower yields in 2009 compared to 2008. Loan outstanding averages in 2009 were $10.9 million lower than 2008, loan yields for the first six months of 2009 decreased twenty (20) basis points to 5.80%. This decrease in the loan yield is due to lower market rates for new loans and existing loans tied to the prime rate. Investment income from securities increased $600,000 or 17.16% for the first six months of 2009 compared with the same period of 2008. The increase is a result of higher outstanding averages and a slightly lower yield on the securities portfolio for the first six months of 2009. The average outstanding securities for the first six months of 2009 increased by $18.8 million or 17.52% compared to same period 2008. The yield on total average earning assets for the first six months of 2009 and 2008 was 5.86% and 6.00%, respectively.
Non-interest income for the first six months of 2009 was $1.5 million, a slight decrease of $34,000 from non-interest income for the first six months of 2008. The $34,000 decrease is the result of the following; asset management and trust income declined by $26,000 and service charges on deposit accounts decreased by $25,000, life insurance income increased by $11,000 and other income increased by $5,000. The asset management and trust income declined in 2009 due to lower market values for assets under management due to overall market declines and service charges declined due to lower volume of overdraft fees in 2009.
Non-interest expense for the first six months of 2009 was $5.7 million, an increase of $236,000 or 4.27% from non-interest expense for the first six months of 2008. The majority of the increase was due to higher FDIC costs in 2009. FDIC assessment for insurance premiums was $96,000 for the six months ended June 30, 2009, compared to $17,000 for the six months ended June 30, 2008; in addition, the FDIC charged a special assessment of $165,000 in 2009. Other changes to non-interest expenses were; personnel costs decreased by $33,000, net occupancy increased $28,000, furniture and equipment expense decreased $17,000 and PA Shares Tax decreased by $10,000 and other expenses increased $11,000.
Non-interest expense increased $256,000 during the second quarter of 2009, a 9.43% increase from the same period in 2008. The main increase in non-interest expense in 2009 was FDIC insurance cost increases, which increased by $250,000 in 2009 compared with 2008 due to higher rates assessed on insurance premiums and a $165,000 special assessment. Other non-interest expense changes; personnel costs decreased by $22,000, occupancy cost increased $19,000, legal and professional costs decreased by $8,000, other expenses increased by $30,000, and furniture and fixture costs decreased $6,000 due to lower equipment depreciation expense.
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