Commercial National Financial Corp. has a market cap of $47.4 million; its shares were traded at around $16.56 with a P/E ratio of 9.2 and P/S ratio of 2. The dividend yield of Commercial National Financial Corp. stocks is 5.3%. Commercial National Financial Corp. had an annual average earning growth of 0.5% over the past 10 years.CNAF is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:The Corporation s total assets decreased by $2.8 million, or 0.75% from December 31, 2009 to March 31, 2010. Investments Available for Sale increased by $3.0 million. The increase in investments was mainly due to the purchase of $11.7 million in tax-free municipal bonds, principal pay-downs on mortgage backed securities of $7.4 million, $1.7 million in calls on municipal bonds and $417,000 increase in the fair value of the securities. Net loans outstanding decreased by $5.0 million. The decrease in loans was a result of declines in the following categories; $500,000 in commercial loans, $1.0 million in commercial mortgages, $1.1 million in installment loans and $2.1million in mortgages. The Corporation attributes the loan declines to consumer and commercial customers being cautious during the first quarter of 2010.
The Corporation s total deposits increased $7.7 million from December 31, 2009 to March 31, 2010. Non-interest bearing deposits decreased by $511,000 and interest-bearing deposits increased by $8.2 million. The increase in interest-bearing deposits was mainly due to a $6.4 million increase in money market accounts, a $2.1 million increase in savings accounts and a $1.1 million increase in NOW accounts. These increases were offset by a $1.3 million decline in certificate of deposits and a $228,000 decrease in individual retirement accounts. The Corporation attributes the increase in deposit accounts due to customers maintaining higher average balances in their money market, NOW and savings accounts.
Shareholders' equity was $44.5 million on March 31, 2010 compared to $43.5 million on December 31, 2009. Total shareholders equity increased due to the $1.4 million in net income and a $275,000 increase in other comprehensive income due to increases in fair value of securities available for sale. These increases were offset by $629,000 in dividends paid to shareholders. Book value per common share increased from $15.20 at December 31, 2009 to $15.55 at March 31, 2010.
Interest income for the three months ended March 31, 2010 was $4.7 million, compared with $5.0 million for the three months ending March 31, 2009. Loan income decreased in 2010 due to average loan balances decreasing 4.77% in 2010 compared with 2009 and slightly lower yields. The yield on the loan portfolio for the first three months of 2010 decreased four (4) basis points to 5.76% from 5.80% in 2009. The security portfolio of the Corporation is significantly different in composition for the first three months of 2010 compared with 2009. The Corporations average balance for tax-free municipal bonds was $42.2 million in 2010 compared with $1.0 million in 2009. These bonds provided a significant benefit of decreasing the corporations overall tax rate in 2010. Security income for the three months ended March 31, 2010 was $1.8 million, a decrease of 8.52% or $165,000 in comparison to security income in 2009. The average securities balances increased 5.45% in 2010 compared to 2009. The yield on total average earning assets for the first three months of 2010 decreased thirty-four (34) basis points to 5.55% compared to 2009.
Non-interest income for the first three months of 2010 was $713,000, a decrease from $759,000 for first three months of 2009. Asset management and trust income declined by $35,000 mainly due to the following; the fees on sweep accounts decreased by $22,000 due to the current low yield environment on these products, estate settlement fees declined by $21,000 in 2010 compared to 2009 and mutual fund commissions declined by $9,000 in 2010 compared to 2009. These decreases were offset by an increase in managed asset revenue of $17,000. Service charges on deposit accounts decreased by $12,000 and other service charges increased by $5,000.
Non-interest expense for the first three months of 2010 was $2.9 million compared with $2.8 million in 2009. Personnel costs increased $85,000 due to higher wages in 2010, net occupancy increased $19,000, furniture and equipment expense increased $19,000. The increases in occupancy and furniture and equipment can be attributed to the opening of one additional branch in the fall of 2009. PA shares tax decreased slightly by $4,000 and legal and audit increased slightly by $1,000. The FDIC insurance expense increased by $71,000 due to an increase in FDIC assessment fees in the second quarter of 2009. Other expenses decreased by $27,000.
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