Commercial National Financial Corporation Reports 2nd Quarter 2025 Results

Core Insights - Commercial National Financial Corporation (CEFC) reported a net income of $1,607,000 or $0.41 per share for Q2 2025, an increase from $1,412,000 or $0.36 per share in Q2 2024, with a return on equity of 12.36% compared to 11.96% in the previous year [1][6]. Financial Performance - Net interest income for Q2 2025 rose by $400,000 or 8.7% year-over-year, while interest income decreased by $168,000 due to lower loan balances. Interest expense fell by $568,000 as deposit rates were reduced following federal funds rate cuts [2]. - Non-interest income decreased by $71,000 or 11.6%, primarily due to lower miscellaneous income, and operating expenses increased by $40,000 or 1.1% [2]. Asset and Loan Quality - Total assets as of June 30, 2025, were $552 million, down from $573 million a year earlier, mainly due to repayment of wholesale funding and trust preferred debt. Total loans decreased by $28 million or 6.9% due to high-interest rates and early loan payoffs, but loan quality remained strong with a non-performing assets ratio of 0.27% [3][6]. Capital and Shareholder Returns - CEFC's wholly owned subsidiary, Commercial Bank, is significantly above "well capitalized" for regulatory purposes. The company announced a share repurchase program in May 2025, which remains in effect indefinitely, allowing for discretionary repurchases based on various market factors [4][6]. Selected Financial Ratios - Return on equity for Q2 2025 was 12.36%, up from 11.96% in Q2 2024. Return on assets improved to 1.16% from 0.98%, and net interest margin increased to 3.80% from 3.38% [6]. - The non-performing assets ratio was 0.27%, up from 0.22% a year earlier, while the Tier 1 leverage capital ratio was 10.63%, compared to 9.98% in the previous year [6]. Income Statement Highlights - For Q2 2025, interest income was $6,541,806, down from $6,709,614 in Q2 2024. Net interest income increased to $4,977,600 from $4,577,841 year-over-year. Non-interest income was $542,666, down from $613,892 [7][8].