Commercial National Financial : 2022 Second Quarter Brochure

COMMERCIAL NATIONAL FINANCIAL CORPORATION

Board of Directors

Kevin D. Collison

Heather M. Cook Fisette

Timothy J. Coscarelly

Aaron L. Davis

Christopher E. Goggin

Brent J. Hardman

Richard S. Prestage

Loren R. Roslund

Jeffrey A. Stahl

Visit www.commercial-bank.com to view the latest consolidated Annual Report, news releases and other information about CEFC and Commercial Bank.

www.commercial-bank.com

SECOND QUARTER REPORT

JUNE 30, 2022

COMMERCIAL NATIONAL FINANCIAL CORPORATION

101 N. PINE RIVER ST.

P.O. BOX 280

ITHACA, MICHIGAN 48847

989-875-4144

To Our Shareholders,

Net income for the second quarter of 2022 was $1,518,113, or $.38 per share compared to the second quarter of 2021 net income of $1,411,813, or $.36 per share. Return on Equity (ROE) was 14.23% for the second quarter of 2022 compared to 13.15% for the second quarter of 2021.

For the second quarter of 2022, net interest income increased $386,000, or 9.5% compared to the second quarter of 2021 primarily due to higher interest-earning assets as well as from the recovery of interest on non-accrual loan payoffs. Total loans, excluding Paycheck Protection Program ("PPP") loans, increased $25.9 million, or 6.7% when comparing June 30, 2022 to June 30, 2021. Non-interest income decreased by $106,000, or 17.6% due to lower miscellaneous income, partially offset by higher debit card fees. Operating expenses increased by $172,000, or 5.8% primarily due to higher wages and benefits expense.

Total assets were $625 million at June 30, 2022 compared to $587.6 million at June 30, 2021. The increase was primarily due to core deposits growth, partially offset by lower wholesale borrowings. At June 30, 2022, Paycheck Protection Program loans outstanding were approximately $1.8 million compared to $60 million at June 30, 2021.

We are pleased to announce that our Ithaca branch office remodeling is complete. Customers have been impressed with the appearance and functionality.

As always, please feel free to contact me with any questions or concerns.

COMMERCIAL NATIONAL FINANCIAL

CORPORATION

		6/30/2022		6/30/2021
		QUARTER ENDING
Basic Earnings	$	0.38	$	0.36
Diluted Earnings	$	0.38	$	0.36
Return on Average Equity		14.23%		13.15%
Return on Average Assets		0.97%		0.97%
Net Interest Margin		3.02%		2.99%
		YEAR TO DATE
Basic Earnings	$	1.15	$	0.79
Diluted Earnings	$	1.15	$	0.79
Return on Average Equity		20.51%		14.76%
Return on Average Assets		1.47%		1.11%
Cash Dividends Paid	$	0.28	$	0.28
Book Value	$	9.81	$	10.87
Market Price	$	11.44	$	10.75
Dividend Yield		4.90%		5.21%
Allowance for Loan Loss to Total		0.93%		0.95%
Loans
Net Interest Margin		3.68%		3.17%

INVESTMENT BROKERS

Stifel, Nicolaus & Company, Incorporated

Kyle Travis- Financial Advisor

1-616-224-1559

Products & services are offered through Stifel. Stifel is not affiliated

with Commercial Bank. Member SIPC/NYSE

D.A. Davidson & Co.

Nick Bicking	[e-mail]	[phone]
Tom Dooley	[e-mail]	[phone]

Brokerage & Advisory services offered through D.A. Davidson & Co. are

not affiliated with Commercial Bank.

Member SIPC

Kevin D. Collison	Stock Symbol: CEFC
President and CEO

														President & CEO
		6/30/2022		6/30/2021			QUARTER ENDING		YEAR TO DATE	Kevin D. Collison
Assets		(Unaudited)		(Unaudited)	Interest Income		6/30/2022		6/30/2021		6/30/2022		6/30/2021	Executive Vice President & Chief Lending Officer
Cash and due from banks	$	68,760,849	$	51,212,114		(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)	Andrew P. Shafley
Federal funds sold		162,000		131,000	Interest & fees on loans	$	4,327,994	$	4,414,171	$	10,722,708	$	9,107,566	Chief Financial Officer & Chief Operating Officer
Total cash & cash equivalents		68,922,849		51,343,114	Interest & dividends on securities		523,049		146,019		888,836		311,212	Kevin A. Twardy
Time deposits in banks		11,450,000		20,854,000	Interest on deposits in banks		191,902		120,640		307,921		244,612	First Vice President
Securities		103,209,588		44,822,995	Interest on federal funds sold		695		5		730		10	Matthew O. Fletcher
Loans		412,037,495		444,406,884	Total Interest Income		5,043,640		4,680,835		11,920,195		9,663,400	Vice Presidents
Less: Allowance for loan losses		(3,831,495)		(4,238,164)										Garth W. Anderson	Paul D. Harger
Net loans		408,206,000		440,168,720	Interest Expense									Corey S. Bailey	Jayme L. Kosal
					Interest on deposits		367,688		398,062		692,713		825,364	Kathleen R. Baker	Michael D. Miller
Bank premises & equipment		8,595,466		8,134,522	Interest on FHLB borrowings		122,808		142,865		258,053		287,242	Jason D. Beebe	Benjamin Z. Ogle
Other assets		24,602,640		22,308,977	Trust Preferred		94,692		67,717		166,284		135,912	Chelsey A. Foster	Heather A. Schaeffer
Total Assets	$	624,986,543	$	587,632,328	Interest on other borrowings		14		4		14		4	Trisha A. Gough	Linda M. Vaughn
Liabilities					Total Interest Expense		585,202		608,648		1,117,064		1,248,522	Jacky Halliwill	Jessica L. Wright
Deposits														Gregory R. Hansen
Non-interest bearing	$	134,327,034	$	125,477,878	Net Interest Income		4,458,438		4,072,187		10,803,131		8,414,878	Assistant Vice Presidents
Interest bearing		411,565,423		367,407,271	Provision for loan losses		-		-		-		-	Sara F. Bajema	Roger K. Merritt
Total deposits		545,892,457		492,885,149	Net Interest Income after Provision		4,458,438		4,072,187		10,803,131		8,414,878	Melanie S. Baxter	Heidi L. Miller
														Kimberly S. Campbell	Jamie L. Ogle
				-	Non-interest Income									Dakota T. Curns	Denise L. Reese
Federal Home Loan Bank borrowings		24,000,000		35,400,000	Service charges and fees		269,714		247,949		522,639		480,015	Nate R. Kirk, Jr.	Courtney A. Samson
Trust Preferred		13,403,000		13,403,000	Other income		227,268		355,283		553,218		705,900	Tammy L. McCollum
Accrued expenses and other liabilities		2,792,569		2,842,747	Total Other Income		496,982		603,232		1,075,857		1,185,915		Officers
					Operating Expenses									Tricia C. Frost	Kayla M. Grzeskowiak
Total Liabilities		586,088,026		544,530,896
Shareholders' Equity					Salaries & employee benefits		1,914,393		1,783,648		3,858,347		3,362,112
Common stock & paid-in-capital		20,517,672		20,517,671	Occupancy & equipment expense		564,767		551,085		1,151,427		1,155,458	989-875-4144	517-337-5000	989-236-7236
Accumulated other comprehensive income														Alma- Wright Ave.	Greenville	St. Louis
(loss), net of tax		(9,227,659)		565,835	Other expenses		648,147		620,873		1,264,838		1,261,888	989-463-3901	616-754-7166	989-681-5738
					Total Operating Expenses		3,127,307		2,955,606		6,274,612		5,779,458	Mason- Jefferson St.	Mason- Cedar St.	Hastings
Retained earnings		27,608,504		22,017,926	Income Before Income Taxes									517-676-0500	517-676-0515	269-945-9561
						1,828,113		1,719,813		5,604,376		3,821,335	*Alma- N. State St.	**Mt. Pleasant	**Grand Rapids
Total Shareholders' Equity		38,898,517		43,101,432	Income Tax Expense		310,000		308,000		1,036,000		698,000	989-463-2185	989-775-0355	616-405-4626
					Net Income									*Loan operations center only
Total Liabilities & Shareholders' Equity	$	624,986,543	$	587,632,328	$	1,518,113	$	1,411,813	$	4,568,376	$	3,123,335	**Loan production office only