Sept 2005 press release





NEWS RELEASE


Contact:  Wendy S. Schmucker
Sr. Vice President, Secretary and Treasurer
724-537-9923


For Immediate Release


COMMERCIAL NATIONAL SEPTEMBER 30, 2005 EARNINGS REFLECT CONTINUED STRENGTHENING OF CORE PROFITABILITY ALONG WITH LOAN AND DEPOSIT GROWTH
LATROBE, PA, November 8, 2005 - Commercial National Financial Corporation (NASDAQ:CNAF), parent company of Commercial Bank & Trust of PA, has reported unaudited earnings for the nine-month period ended September 30, 2005. The Company earned $2,544,000 (or $.75 per average share outstanding) compared to a loss of $160,000 (or $.05 per average share outstanding) in the same period last year. Year-to-date non-GAAP core earnings are $2,234,000 compared to 2004 core earnings of $1,823,000 - up by approximately 22.6%. To determine its core earnings, the Company excludes from earnings any credits to its provision for loan losses, its realized security gains/losses and any non-recurring items (see attached table). Earnings-per-share in 2005 are based on 3,413,426 average shares outstanding compared to 3,426,056 shares outstanding for the same period a year ago.

For the three-month period ended September 30, 2005, the Company earned $773,000. For the same period ended September 30, 2004, the Company showed a loss of $2,226,000. The core earnings for the third quarter 2005 of $773,000 reflects an improvement of 72.2% compared to non-GAAP core earnings of $449,000 for the third quarter 2004.

The Company reported total loans of $205.8 million for the period ended September 30, 2005, up 9.2% from the same period last year. In addition to loan growth, deposits grew to $279.2 million from $268.9 million during the same time period last year.


 
       
Three Months
  
Nine Months
  
       
Ended September 30
  
Ended September 30
  
       
2005
  
2004
  
2005
  
2004
  
       
(unaudited)
  
(unaudited)
  
(unaudited)
  
(unaudited)
  
                       
Net Income (GAAP)
  
$ 773
 
$ (2,226)
 
$  2,544
 
$(160)
 
Less:
                    
 
FHLB Prepayment Penalty
(non-recurring)
  -
 
4,402
 
  -
 
4,402
 
 
Credit for Loan Losses
 
-
 
-
 
(470)
 
(436)
 
 
Security Gains
 
 -
 
(349)
 
  -
 
(1,195)
 
 
Severance (non-recurring)
 
-
 
  -
-
  -
 
233
 
       
  -
-
  4,053
-
  (470)
  
  3,004
  
         
  -
 
  -
 
      
Tax effect (34%)
  
  -
 
(1,378)
  
  160
  
  (1,021)
 
"Core" Earnings
  
$ 773
 
$ 449
 
$ 2,234
 
$ 1,823
 
                       
                       
                       

In addition to Latrobe where it is headquartered, the Company operates community banking facilities in Greensburg, Hempfield Township, Ligonier, North Huntingdon, Unity Township and West Newton, Pennsylvania and also maintains a commercial business development sales force throughout its entire market area. The Company also serves its customer base from an Internet banking site (www.cbthebank.com) and an automated TouchTone Teller banking system. The Company operates an asset management and trust division headquartered in Greensburg, Pennsylvania.

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
    
(Dollars in thousands)
  
                 
       
September
  
September
    
       
2005
  
2004
    
                 
ASSETS
            
Cash and due from banks on demand
  
$ 12,962
 
$ 10,330
   
Interest bearing deposits with banks
  
31
 
693
   
       
12,993
 
11,023
   
                 
Federal funds sold
  
11,350
 
-
   
Securities available for sale
  
74,689
 
109,202
   
Restricted investments in bank stock
  
1,096
 
2,372
   
                 
Loans
    
205,832
 
188,538
   
 
Allowance for loan losses
  
(1,548)
  
(1,839)
    
   
Net loans
  
204,284
 
186,699
   
                 
Premises and equipment
  
4,378
 
4,888
   
Other assets
  
16,249
 
17,114
   
       
 
        
 
Total assets
  
$ 325,039
 
$ 331,298
 
 
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
            
Liabilities:
            
 
Deposits:
            
   
Non-interest bearing
  
$ 72,397
 
$ 60,531
   
   
Interest bearing
  
206,783
 
208,411
   
   
Total deposits
  
279,180
 
268,942
   
                 
 
Other liabilities
  
1,858
 
2,351
   
 
Short-term borrowings
  
-
 
15,125
   
   
Total liabilities
  
281,038
 
286,418
   
                 
Shareholders' equity
            
 
Common stock, par value $2 per share; 10,000,000 shares authorized; 3,600,000 shares issued; 3,413,426 and 3,413,426 shares outstanding in 2005 and 2004, respectively
            
             
             
   
7,200
 
7,200
   
             
                 
 
Retained earnings
  
39,271
 
39,018
   
                 
 
Accumulated other comprehensive income
  
1,108
 
2,240
   
                 
 
Less treasury stock, at cost, 186,574 and 186,574 shares in 2005 and 2004
            
   
(3,578)
  
(3,578)
    
   
Total shareholders' equity
  
44,001
 
44,880
   
                 
   
Total liabilities and shareholders' equity
325,039
 
331,298
   
                 
                 
                 
                 
       
-
       

# # #


COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
                   
     
Three Months
  
Nine Months
     
Ended September 30
  
Ended September 30
     
2005
  
2004
  
2005
  
2004
     
(unaudited)
  
(unaudited)
  
(unaudited)
  
(unaudited)
                   
INTEREST INCOME:
              
 
Interest and fees on loans
$ 2,909
 
$ 2,667
 
$ 8,406
 
$ 8,088
 
Interest and dividends on securities:
              
   
Taxable
1,053
 
1,561
 
3,489
 
5,508
   
Exempt from federal income taxes
37
 
36
 
104
 
364
   
Other
90
 
100
 
131
 
122
 
Total Interest income
4,089
 
4,364
 
12,130
 
14,082
                   
INTEREST EXPENSE:
              
 
Interest on deposits
1,119
 
916
 
3,206
 
2,693
 
Interest on short-term borrowings
-
 
13
 
22
 
95
 
Interest on long-term borrowings
-
 
678
 
-
 
2,129
 
Total Interest expense
1,119
 
1,607
 
3,228
 
4,917
                   
NET INTEREST INCOME
2,970
 
2,757
 
8,902
 
9,165
PROVISION (CREDIT) FOR LOAN LOSSES
15
 
-
 
(455)
  
(436)
                   
NET INTEREST INCOME AFTER
              
PROVISION (CREDIT) FOR LOAN LOSSES
2,955
 
2,757
 
9,357
 
9,601
                   
OTHER OPERATING INCOME:
              
 
Asset management and trust income
189
 
230
 
625
 
692
 
Service charges on deposit accounts
168
 
159
 
443
 
539
 
Other service charges and fees
160
 
168
 
518
 
511
 
Net security gains
-
 
349
 
-
 
1,195
 
Commissions and fees from insurance sales
-
 
-
 
-
 
342
 
Income from investment in life insurance
124
 
107
 
377
 
384
 
Loss on Gooder asset sale
-
 
-
 
-
 
(39)
 
Other income
48
 
88
 
160
 
275
 
Total other operating income
689
 
1,101
 
2,123
 
3,899
                   
OTHER OPERATING EXPENSES
              
 
Salaries and employee benefits
1,266
 
1,483
 
3,958
 
4,894
 
Executive severance
-
 
-
 
-
 
233
 
Net occupancy
170
 
180
 
538
 
552
 
Furniture and equipment
185
 
196
 
556
 
612
 
Pennsylvania shares tax
140
 
133
 
418
 
400
 
Legal and professional
147
 
196
 
421
 
562
 
FHLB Advance prepayment penalty
-
 
4,402
 
-
 
4,402
 
Other expenses
674
 
780
 
2,119
 
2,627
 
Total other operating expenses
2,582
 
7,370
 
8,010
 
14,282
                   
INCOME/(LOSS) BEFORE INCOME TAXES
1,062
 
(3,512)
  
3,470
 
(782)
Income tax expense/(benefit)
289
 
(1,286)
  
926
 
(622)
                   
 
Net income/(loss)
$ 773
 
$ (2,226)
  
$ 2,544
 
$ (160)
                   
Average Shares Outstanding
3,413,426
 
3,436,539
 
3,413,426
 
3,426,056
                   
Net Income/(Loss) Per Share
$ 0.23
 
$ (0.65)
  
$ 0.75
 
$ (0.05)