UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter ended SEPTEMBER 30, 1997
Commission file number 0-18676
COMMERCIAL NATIONAL FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1623213
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
900 LIGONIER STREET LATROBE, PA 15650
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412)539-3501
Indicate by checkmark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock.
CLASS OUTSTANDING AT OCTOBER 31, 1997
Common Stock, $2 Par Value 1,800,000 Shares
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Included in Part I of this report:
Page
Commercial National Financial Corporation
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Changes in
Shareholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II - OTHER INFORMATION
Other Information 14
Signatures 15
<PAGE>
<TABLE>
COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 30 December 31
1997 1996
<S> <C> <C>
ASSETS
Cash and due from banks $ 10,146,772 $ 8,839,707
Interest bearing deposits with
other banks 61,346 153,667
---------- ----------
Total cash and due from banks 10,208,118 8,993,374
Federal funds sold - -
Investment securities available for sale 41,816,023 37,816,171
Investment securities held to maturity
(Market value $69,529,799 in 1997 and 68,113,328 64,539,801
$63,630,084 in 1996)
Loans (all domestic) 177,185,743 160,048,235
Less unearned income (157,316) (112,712)
Less reserve for possible loan losses (1,898,428) (2,035,818)
------------ ------------
Net loans 175,129,999 157,899,705
Premises and equipment 5,472,137 4,802,465
Other assets 4,169,278 4,059,008
------------ ------------
Total Assets $304,908,883 $278,110,524
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits (all domestic):
Non-interest bearing $ 37,656,923 $ 33,972,163
Interest bearing 222,692,778 204,835,908
------------ ------------
Total deposits 260,349,701 238,808,071
Federal funds purchased 4,625,000 1,400,000
Other liabilities 2,364,053 2,514,199
------------ ------------
Total Liabilities 267,338,754 242,722,270
------------ ------------
Shareholders' Equity:
Common stock, par value $2
Authorized shares 10,000,000; issued
and outstanding 1,800,000 shares 3,600,000 3,600,000
Retained earnings 33,859,336 31,777,511
Unrealized gain/(loss) on investment securities
available for sale net of taxes 110,793 10,743
------------ ------------
Total Shareholders' Equity 37,570,129 35,388,254
------------ ------------
Total Liabilities and
Shareholders' Equity $304,908,883 $278,110,524
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
<TABLE>
COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
Three Months Nine Months
Ending Sept 30 Ending Sept 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $3,883,874 $3,312,913 $11,224,874 $ 9,872,220
Interest and dividends on investments:
Taxable interest 1,182,182 1,242,289 3,600,031 3,716,660
Interest exempt from federal
income tax 448,513 351,119 1,237,972 1,033,087
Interest on federal funds sold 8,709 11,377 31,855 85,149
Interest on bank deposits 1,731 1,711 5,941 4,355
---------- ---------- ----------- -----------
Total interest income 5,525,009 4,919,409 16,100,673 14,711,471
INTEREST EXPENSE:
Interest on deposits 2,417,457 2,111,954 6,917,619 6,238,760
Interest on short-term borrowings 70,122 15,045 159,456 20,134
---------- ---------- ---------- ----------
Total interest expense 2,487,579 2,126,999 7,077,075 6,258,894
NET INTEREST INCOME 3,037,430 2,792,410 9,023,598 8,452,577
PROVISION FOR POSSIBLE LOAN LOSSES 75,000 30,000 180,000 75,000
---------- ---------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 2,962,430 2,762,410 8,843,598 8,377,577
OTHER INCOME
Asset management and trust income 45,051 21,857 116,594 53,663
Service charges on deposit accounts 146,400 130,727 429,606 372,637
Other service charges and fees 94,168 57,412 307,378 231,069
Securities gains/(losses) - - - 577
Other income 98,068 93,762 257,441 285,227
---------- ---------- ---------- ----------
Total other income 383,687 303,758 1,111,019 943,173
OTHER EXPENSES
Salaries and employee benefits 1,110,676 933,766 3,417,151 2,974,222
Net occupancy expense 127,866 122,935 398,021 354,259
Furniture and equipment expense 115,420 151,605 443,305 449,624
PA shares tax 70,257 67,578 207,933 187,578
Other expense 490,761 528,663 1,512,382 1,496,804
---------- ---------- ---------- ----------
Total other expenses 1,914,980 1,804,547 5,978,792 5,462,487
INCOME BEFORE TAXES 1,431,137 1,261,621 3,975,825 3,858,263
Applicable income taxes 347,000 318,000 958,000 975,000
---------- ---------- ---------- ----------
NET INCOME $1,084,137 $ 943,621 $3,017,825 $2,883,263
========== ========== ========== ==========
Average Shares Outstanding 1,800,000 1,800,000 1,800,000 1,800,000
========== ========== ========== ==========
EARNINGS PER SHARE $ .60 $ .52 $ 1.68 $ 1.60
========== ========== ========== ==========
CASH DIVIDENDS DECLARED PER SHARE $ .18 $ .16 $ .52 $ .46
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
<TABLE>
COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<CAPTION>
Unrealized
Gain/(Loss)
on Investment
Additional Securities Total
Common Paid-in Retained Available Shareholders'
Stock Capital Earnings for Sale Equity
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $3,600,000 $ - $ 29,143,045 $ 293,425 $33,036,470
Net income - - 2,883,263 - 2,883,263
Cash dividends declared
($.46 per share) - - (834,000) - (834,000)
Net change in unrealized
gain/(loss) on investment
securities AFS net of taxes - - - (448,792) (448,792)
----------------------------------------------------------------------
Balance at September 30, 1996 $3,600,000 $ - $31,192,308 $(155,367) $34,636,941
======================================================================
Balance at December 31, 1996 $3,600,000 $ - $31,777,511 $ 10,743 $35,388,254
Net income - - 3,017,825 - 3,017,825
Cash dividends declared
($.52 per share) - - (936,000) - (936,000)
Net change in unrealized
gain/(loss) on investment
securities AFS net of taxes - - - 100,050 100,050
----------------------------------------------------------------------
Balance at September 30, 1997 $3,600,000 $ - $33,859,336 $ 110,793 $37,570,129
======================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
<TABLE>
COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
For Nine Months
Ended September 30
1997 1996
<S> <C> <C>
OPERATING ACTIVITIES
Net income $3,017,825 $2,883,263
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization 434,166 423,508
Provision for possible loan losses 180,000 75,000
Net amortization of securities
and loan fees 47,836 64,626
Increase in interest receivable (420,507) (257,143)
Increase (decrease) in interest payable 8,096 (92,866)
Increase(decrease)in taxes payable 120,696 (80,332)
Decrease in other liabilities (180,761) (142,727)
(Increase)decrease in other assets 160,519 (83,622)
Net securities gains - (577)
---------- ----------
Net cash provided by operating activities 3,367,870 2,789,130
---------- ----------
INVESTING ACTIVITIES
Net decrease in deposits
with other banks 92,321 44,037
Net decrease in fed funds sold - 5,425,000
Purchase of securities AFS (14,118,532) (10,768,047)
Purchase of securities HTM (9,702,873) (23,179,071)
Maturities and calls of securities AFS 10,232,357 11,104,410
Maturities and calls of securities HTM 6,095,000 5,089,061
Sale of securities AFS - 16,641,321
Net increase in loans (17,385,870) (11,957,104)
Purchase of premises and equipment (1,103,838) (1,141,715)
------------ ------------
Net cash used in investing activities (25,891,435) (8,742,108)
------------ ------------
FINANCING ACTIVITIES
Net increase in deposits 21,541,630 9,021,305
Net increase in short-term borrowings 3,225,000 -
Dividends paid (936,000) (834,000)
------------ ------------
Net cash provided by financing activities 23,830,630 8,187,305
------------ ------------
Increase in cash and cash equivalents 1,307,065 2,234,327
Cash and cash equivalents at beginning of year 8,839,707 7,550,942
------------ ------------
Cash and cash equivalents at end of quarter $10,146,772 $ 9,785,269
============ ============
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 7,068,979 $ 6,351,760
============ ============
Income taxes $ 766,800 $ 1,000,000
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
COMMERCIAL NATIONAL FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
Note 1 Management Representation
- ------ -------------------------
The accomanying unaudited consolidated interim financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information. However, they do not include all information
and footnotes required by generally accepted accounting
principles for complete financial statements and should
be read in conjunction with the annual financial
statements of Commercial National Financial Corporation
for the year ending December 31, 1996, including the notes
thereto. In the opinion of management, the unaudited
interim consolidated financial statements include all
adjustments (consisting of only normal recurring adjustments)
necessary for a fair statement of financial position as of
September 30, 1997 and the results of operations for the
three and nine month periods ended September 30, 1997 and
1996, and the statements of cash flows and changes in
shareholders' equity for the nine month periods ended
September 30, 1997 and 1996. The results of the nine
months ended September 30, 1997 are not necessarily
indicative of the results to be expected for the entire year.
<TABLE>
Note 2 Reserve for Possible Loan Losses
- ------ --------------------------------
Description of changes:
<CAPTION>
1997 1996
<S> <C> <C>
Reserve balance January 1 $ 2,035,819 $ 2,081,700
Additions:
Provision charged to operating expenses 180,000 75,000
Recoveries on previously charged off
loans 18,118 21,905
Deductions:
Loans charged off (335,509) (96,948)
------------ -----------
Reserve balance September 30 $ 1,898,428 $ 2,081,657
============ ===========
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
First Nine Months of 1997 as compared to the First Nine Months of
1996
- --------------------------------------------------------------------
Pre-tax net income for the first nine months of 1997 was $3,975,825
compared to $3,858,263 during the same period of 1996, representing
a 3.05% increase.
Interest income was $16,100,673, an increase of 9.44%. The loan
return rate increased thirteen (13) basis points to 8.99% and the
securities return rate decreased nine (9) basis points to 5.93%. As
a result, the return rate on total average earning assets increased
eleven (11) basis points to 7.78%. Average earning asset volume rose
$20,181,577, a 7.89% increase.
Interest expense was $7,077,075, an increase of 13.07%. The cost
rate on average interest bearing liabilities was 4.34%, a fifteen
(15) basis point increase from a year ago. Average interest bearing
deposit volume rose $18,298,147, an increase of 9.20%.
Net interest income increased 6.76% to $9,023,598, and represented
4.16% of average total assets compared to 4.21% during the first
nine months of 1996.
The average reserve for loan losses declined 5.66% to $1,967,835. By
comparison, total average loans grew 11.98% during the same period.
The 1997 first nine months provision for loan losses was $180,000,
compared to $75,000 for the first nine months of 1996.
Net interest income after the application of the provision for
possible loan losses grew 5.56% to $8,843,598 representing a 4.08%
return on total average assets compared to 4.17% for the first nine
months of 1996.
Non-interest income increased 17.80% to $1,111,019. Service charges
on deposit accounts grew 15.29% to $429,606. Other service charges
and fees rose 33.02%, reaching $307,378. Other income decreased
9.74% to $257,441. Asset management and trust fees totaled $116,594,
an increase of 117.27%.
Non-interest expense was $5,978,792, an increase of 9.45%, or
$516,305, while total average assets grew 8.00%. Personnel costs
rose 14.89%, a $442,929 increase. Net occupancy expense rose 12.35%,
or $43,762. Furniture and equipment expense declined 1.41%,
representing a cost decrease of $6,319. Pennsylvania shares tax
expense was $207,933, an increase of 10.85%. Other expense rose
1.04%, an increase of $15,578.
Federal income tax on total first nine months earnings was $958,000
compared to $975,000 a year ago. Net income after taxes rose 4.67%
to $3,017,825, an increase of $134,562. The annualized return on
average assets was 1.39% for the first nine months of 1997 compared
to 1.43% for the nine months ended September 30, 1996. The
annualized return on average equity through September 30, 1997 was
11.08% and had been 11.38% through the first nine months of 1996.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (continued)
- ---------------------------------
Three Months Ended Sep 30, 1997 as Compared to the Three Months
Ended Sep 1996
- ---------------------------------------------------------------------
Pre-tax net income for the third quarter of 1997 increased 13.44%
and was $1,431,137 compared to $1,261,621 during the same period of
1996.
Interest income was $5,525,009, an increase of 12.31%. The loan
return rate increased thirty-two (32) basis points to 8.98%, the
securities return rate decreased thirteen (13) basis points to 5.91%
and the return rate on total average earning assets increased
nineteen (19) basis points to 7.78%. Volume growth in total average
earning assets was $24,816,430.
Interest expense was $2,487,579, an increase of 16.95%. The volume
increase on average interest-bearing liabilities was $21,484,785.
Cost rate rose to 4.44%, a twenty-four (24) basis point increase
from a year ago.
The average reserve for loan losses declined 8.31% to $1,916,939,
while total average loans grew 13.14%. The 1997 third quarter
provision for loan losses was $75,000, compared to $30,000 for the
third quarter of 1996.
Net interest income after the application of the provision for
possible loan losses grew 7.24% to $2,962,430 representing a 3.98%
return on total average assets compared to 4.06% for the third
quarter of 1996.
Non-interest income increased 26.31%, or $79,929, to $383,687.
Service charges on deposit accounts increased 11.99% to $146,400.
Other service charges and fees increased 64.02% to $94,168. Other
income increased 4.59% to $98,068. Asset management and trust fees
totaled $45,051, representing a 106.12% increase.
Non-interest expense grew 6.12%, a $110,433 increase, compared to
total average asset growth of 9.51%. Personnel costs rose 18.95%, a
$176,910 increase. Net occupancy expense rose 4.01%, a $4,931
increase. Furniture and equipment expense fell 23.87%, a $36,185
decrease. Pennsylvania shares tax expense was 70,257, an increase of
3.96%. Other expense fell 7.17%, a $37,902 decrease.
Federal income tax on total third quarter earnings was $347,000
compared to $318,000 a year ago. Net income after taxes rose 14.89%
to $140,516. The annualized return on average assets was 1.45% for
the three months ended September 1997 compared to 1.39% for the
third quarter of 1996. The annualized return on average equity for
the third quarter of 1997 was 11.71% compared to 11.01% for the
third quarter of 1996.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS (continued)
- ---------------------------------
LIQUIDITY
- ---------
Liquidity, the measure of the corporation's ability to meet the
normal cash flow needs of depositors and borrowers in an efficient
manner, is generated primarily from the acquisition of deposit funds
and the maturity of loans and securities. Additional liquidity can
be provided by the sale of investment securities available for sale
which amounted to $40,857,223 on September 30, 1997.
During the first nine months of 1997, average interest-bearing
liabilities increased $21,484,785 over the same period in 1996.
Investments maturing within one year were 5.08% of total assets on
September 30, 1997 and 6.02% on September 30, 1996.
Average loans grew by $20,106,687 and the average securities
portfolio, including federal funds sold, increased $4,709,743.
INTEREST SENSITIVITY
- --------------------
Interest rate management seeks to maintain a balance between
consistent income growth and the risk that is created by variations
in ability to reprice deposit and investment categories. The effort
to determine the effect of potential interest rate changes normally
involves measuring the so called "gap" between assets (loans and
securities) subject to rate fluctuation and liabilities (interest
bearing deposits) subject to rate fluctuation as related to earning
assets over different time periods and calculating the ratio of
interest sensitive assets to interest sensitive liabilities.
Repricing periods for the loans, securities, interest-bearing
deposits, non-interest-bearing assets and non-interest-bearing
liabilities are based on contractual maturities, were applicable, as
well as the corporation's historical experience regarding the impact
of interest rate fluctuations on the prepayment and withdrawal
patterns of certain assets and liabilities. Regular savings, NOW and
other similar interest bearing demand deposit accounts are subject
to immediate withdrawal and therefore are presented as beginning to
reprice in the earliest period presented in the "gap" table.
<PAGE>
INTEREST
SENSITIVITY (In thousands)
- --------------------------
The following table presents this information as of September 30, 1997 and
December 31, 1996:
<TABLE>
<CAPTION>
September 30, 1997
0-30 DAYS 31-90 DAYS 91-180 DAYS 181-365 DAYS 1 - 5 YEARS OVER 5YRS
<S> <C> <C> <C> <C> <C> <C>
Interest sensitive
assets $ 49,039 $ 8,292 $ 13,178 $ 20,573 $ 121,248 $ 73,642
Interest sensitive
liabilities $ 11,437 $ 19,182 $ 33,247 $ 43,111 $ 121,036 $ 303
Interest sensitivity -----------------------------------------------------------------------
gap $ 37,602 $(10,890) $ (20,069) $ (22,538) $ 212 $ 73,339
=======================================================================
Cumulative gap $ 26,712 $ 6,643 $ (15,895) $ (15,683) $ 57,656
Ratio of cumulative gap ===========================================================
to earning assets 9.30% 2.31% (5.54%) (5.46%) 20.08%
===========================================================
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
0-30 DAYS 31-90 DAYS 91-180 DAYS 181-365 DAYS 1 - 5 YEARS OVER 5 YRS
<S> <C> <C> <C> <C> <C> <C>
Interest sensitive
assets $ 42,401 $ 6,912 $ 13,855 $ 20,397 $ 117,481 $ 60,563
Interest sensitive
liabilities $ 13,673 $ 19,101 $ 25,281 $ 31,181 $ 116,367 $ 633
Interest sensitivity -----------------------------------------------------------------------
gap $ 28,728 $(12,189) $ (11,426) $ (10,784) $ 1,114 $ 59,930
=======================================================================
Cumulative gap $ 16,539 $ 5,113 $ (5,671) $ (4,557) $ 55,373
Ratio of cumulative gap ===========================================================
to earning assets 6.29% 1.95% (2.16%) (1.74%) 21.09%
===========================================================
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
CREDIT QUALITY RISK
- -------------------
The following table presents a comparison of loan performance as of
September 30, 1997 with that of September 30, 1996. Non-accrual
loans are those for which interest income is recorded only when
received and past due loans are those which are contractually past
due 90 days or more in respect to interest or principal payments.
As of September 30, 1997 the corporation had no other real estate
owned and no in substance foreclosures.
<TABLE>
<CAPTION>
At Sept 30,
1997 1996
<S> <C> <C>
Non-performing Loans:
Loans on non-accrual basis $ 23,172 $ 23,172
Past due loans 144,385 48,063
Renegotiated loans 965,341 111,111
------------ ------------
Total non-performing loans $ 1,132,898 $ 182,346
------------ ------------
Other real estate owned $ - $ 272,919
Total non-performing assets $ 1,132,898 $ 455,265
============ ============
Loans outstanding at end of period $ 177,185,743 $ 155,866,324
Average loans outstanding (year-to-date) $ 166,404,817 $ 148,595,845
Non-performing loans as percent of total
loans .64% .29%
Provision for possible loan losses $ 180,000 $ 75,000
Net charge-offs $ 317,391 $ 75,043
Net charge-offs as percent of average
loans .19% .05%
Provision for possible loan losses as
percent of net charge-offs 56.71% 99.94%
Reserve for possible loan losses as
percent of average loans outstanding 1.14% 1.37%
</TABLE>
CAPITAL RESOURCES
- -----------------
Shareholders' equity for the first nine months of 1997 averaged
$36,317,739 which represented an increase of $2,536,879 over the
average capital of $33,780,860 recorded in the same period of 1996.
These capital levels represented a capital ratio of 12.55% in 1997
and 12.61% in 1996. When the loan loss reserve is included, the 1997
capital ratio becomes 13.23%.
The Federal Reserve Board has issued risk-based capital adequacy
guidelines which went into effect in stages through 1992. The risk-
based capital standard is designed principally as a measure of
credit risk. These guidelines require that: (1) at least 50% of a
banking organization's total capital be common and certain other
"core" equity capital ("Tier I Capital"); (2) assets and off-balance
sheet items must be weighted according to risk; and (3) the total
capital to risk-weighted assets ratio be at least 8%; and (4) a
minimum 4.00% leverage ratio of Tier I capital to average total
assets. The minimum leverage ratio is not specifically defined, but
is generally expected to be 4-5 percent for all but the most highly
rated banks, as determined by a regulatory rating system. As of
September 30, 1997, the corporation, under these guidelines, had a
Tier I and total equity capital to risk adjusted assets ratio of
20.87% and 21.93% respectively. The leverage ratio was 12.57%
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
CAPITAL RESOURCES (continued)
- -----------------------------
The table below presents the corporation's capital position at
September 30, 1997 (Dollar amounts in thousands)
Percent
of Adjusted
Amount Assets
------ ------
Tier I Capital $ 37,459 20.87
Risk-Based Requirement 7,180 4.00
Total Capital $ 39,358 21.93
Risk-Based Requirement 14,360 8.00
- ----------------------------------------------------------------
Minimum Leverage Capital $ 37,459 12.57
Minimum Leverage Requirement 11,919 4.00
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
COMMERCIAL NATIONAL FINANCIAL CORPORATION
(Registrant)
Dated: November 7, 1997 [S] Louis T. Steiner
Louis T. Steiner
Chief Executive Officer
Dated: November 7, 1997 [S] Wendy S. Schmucker
Wendy S. Schmucker
Secretary/Treasurer
<PAGE>
Commercial National Financial Corporation
900 Ligonier Street
Latrobe, Pennsylvania 15650
Telephone (412) 539-3501
Banking Subsidiary:
Commercial National Bank of Westmoreland County
Banking Offices
Latrobe Area
900 Ligonier Street (412) 539-3501
1900 Lincoln Avenue (412) 537-9980
11 Terry Way * (412) 539-9774
Pleasant Unity
Church Street * (412) 423-5222
Ligonier
201 Main Street * (412) 238-9538
West Newton
109 East Main Street * (412) 872-5100
Greensburg Area
Georges Station Road * (412) 836-7600
19 North Main Street (412) 836-7699
Asset Management and (412) 836-7670
Trust Division
19 North Main Street
Drive-up Facility
Latrobe
Lincoln Road at
Josephine Street * (412) 537-9927
Murrysville
4785 Old William Penn Highway * (412) 733-4888
* Automatic Teller Facilities
Automatic Teller Facilities also located at
Latrobe Area Hospital, Westmoreland County Airport,
and Saint Vincent College
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 10,146,772
<INT-BEARING-DEPOSITS> 61,346
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 41,816,023
<INVESTMENTS-CARRYING> 68,113,328
<INVESTMENTS-MARKET> 69,529,799
<LOANS> 177,028,427
<ALLOWANCE> 1,898,428
<TOTAL-ASSETS> 304,908,883
<DEPOSITS> 260,349,701
<SHORT-TERM> 4,625,000
<LIABILITIES-OTHER> 2,364,053
<LONG-TERM> 0
0
0
<COMMON> 3,600,000
<OTHER-SE> 33,970,129
<TOTAL-LIABILITIES-AND-EQUITY> 304,908,883
<INTEREST-LOAN> 11,224,874
<INTEREST-INVEST> 4,838,003
<INTEREST-OTHER> 37,796
<INTEREST-TOTAL> 16,100,673
<INTEREST-DEPOSIT> 6,917,619
<INTEREST-EXPENSE> 7,077,075
<INTEREST-INCOME-NET> 9,023,598
<LOAN-LOSSES> 180,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,978,792
<INCOME-PRETAX> 3,975,825
<INCOME-PRE-EXTRAORDINARY> 3,017,825
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,017,825
<EPS-PRIMARY> $1.68
<EPS-DILUTED> $1.68
<YIELD-ACTUAL> 7.78
<LOANS-NON> 23,172
<LOANS-PAST> 144,385
<LOANS-TROUBLED> 965,341
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,035,819
<CHARGE-OFFS> 335,509
<RECOVERIES> 18,118
<ALLOWANCE-CLOSE> 1,898,428
<ALLOWANCE-DOMESTIC> 1,898,428
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
