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 JUNE 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 JULY 31, 1997
Common Stock, $2 Par Value 1,800,000 Shares
<PAGE>
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 16
<PAGE>
<TABLE>
COMMERCIAL NATIONAL FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30 December 31
1997 1996
<S> <C> <C>
ASSETS
Cash and due from banks $ 8,567,114 $ 8,839,707
Interest bearing deposits with
other banks 103,796 153,667
--------- ---------
Total cash and due from banks 8,670,910 8,993,374
========= =========
Federal funds sold - -
Investment securities available for sale 42,582,262 37,816,171
Investment securities held to maturity
(Market value $68,021,006 in 1997 and
$65,571,756 in 1996) 66,894,806 64,539,801
Loans (all domestic) 168,864,052 160,048,235
Less unearned income (137,605) (112,712)
Less reserve for possible loan losses (1,917,911) (2,035,818)
------------ ------------
Net loans 166,808,536 157,899,705
Premises and equipment 4,924,294 4,802,465
Other assets 3,945,910 4,059,008
------------ ------------
Total Assets $293,826,718 $278,110,524
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits (all domestic):
Non-interest bearing $ 35,730,730 $ 33,972,163
Interest bearing 215,627,642 204,835,908
------------ ------------
Total deposits 251,358,372 238,808,071
Short-term borrowings 3,600,000 1,400,000
Other liabilities 2,201,198 2,514,199
------------ ------------
Total Liabilities 257,159,570 242,722,270
------------ ------------
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 33,099,197 31,777,511
Unrealized gain/(loss) on investment securities
available for sale net of taxes (32,049) 10,743
------------ ------------
Total Shareholders' Equity 36,667,148 35,388,254
------------ ------------
Total Liabilities and
Shareholders' Equity $293,826,718 $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 Six Months
Ending June 30 Ending June 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $3,777,633 $3,277,725 $7,341,000 $6,559,307
Interest and dividends on investments:
Taxable interest 1,228,865 1,245,684 2,417,849 2,474,371
Interest exempt from federal
income tax 416,694 342,865 789,459 681,968
Interest on federal funds sold 8,380 27,062 23,146 73,772
Interest on bank deposits 2,085 1,387 4,210 2,644
----------- ----------- ----------- -----------
Total Interest Income 5,433,657 4,894,723 10,575,664 9,792,062
INTEREST EXPENSE
Interest on deposits 2,304,584 2,041,377 4,500,162 4,126,806
Interest on short-term borrowings 61,694 2,355 89,334 5,089
----------- ----------- ----------- -----------
Total interest expense 2,366,278 2,043,732 4,589,496 4,131,895
NET INTEREST INCOME 3,067,379 2,850,991 5,986,168 5,660,167
PROVISION FOR POSSIBLE LOAN LOSSES 60,000 30,000 105,000 45,000
----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 3,007,379 2,820,991 5,881,168 5,615,167
OTHER INCOME
Asset management and trust income 45,621 22,294 71,543 31,806
Service charges on deposit accounts 147,833 121,795 283,206 241,910
Other service charges and fees 110,799 73,896 213,210 173,657
Securities gains/(losses) - (1,173) - 577
Other income 80,779 99,504 159,373 191,465
----------- ----------- ----------- -----------
Total Other Income 385,032 316,316 727,332 639,415
OTHER EXPENSES
Salaries and employee benefits 1,123,979 975,105 2,306,477 2,040,456
Net occupancy expense 127,684 109,331 270,155 231,324
Furniture and equipment expense 168,649 128,977 327,885 263,219
Pennsylvania shares tax 70,257 60,000 137,676 120,000
Other expense 532,263 521,984 1,021,621 1,002,941
----------- ----------- ----------- -----------
Total Other Expenses 2,022,832 1,795,397 4,063,814 3,657,940
INCOME BEFORE TAXES 1,369,579 1,341,910 2,544,686 2,596,642
Applicable income taxes 327,000 335,000 611,000 657,000
----------- ----------- ----------- -----------
NET INCOME $1,042,579 $1,006,910 $1,933,686 1,939,642
=========== =========== =========== ===========
Average Shares Outstanding 1,800,000 1,800,000 1,800,000 1,800,000
=========== =========== =========== ===========
EARNINGS PER SHARE $ .58 $ .56 $ 1.07 $ 1.08
=========== =========== =========== ===========
CASH DIVIDENDS DECLARED PER SHARE $ .18 $ .16 $ .34 $ .30
=========== =========== =========== ===========
</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 $33,036,470
Net Income - - 1,939,642 - 1,939,642
Cash dividends
declared ($.30 per share) - - (546,000) - (546,000)
Net change in
unrealized gain/(loss)
on investment securities
AFS net of taxes - - - (492,615) (492,615)
---------------------------------------------------------------
Balance at
June 30, 1996 $3,600,000 $ - $30,536,687 $ (199,190) $33,937,497
===============================================================
Balance at
December 31, 1996 $3,600,000 $ - $31,777,511 $ 10,743 $35,388,254
Net Income - - 1,933,686 - 1,933,686
Cash dividends
declared ($.34 per share) - - (612,000) - (612,000)
Net change in
unrealized gain/(loss)
on investment securities
AFS net of taxes - - - (42,792) (42,792)
---------------------------------------------------------------
Balance at
June 30, 1997 $3,600,000 $ - $33,099,197 $ (32,049) $36,667,148
===============================================================
</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 Six Months
Ended June 30
1997 1996
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $1,933,686 $1,939,642
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization 317,309 274,164
Provision for possible loan losses 105,000 45,000
Net(accretion)/amortization of securities
and loan fees 25,571 (14,124)
Increase in interest receivable (246,622) (199,485)
Increase(decrease) in interest payable 34,473 (43,633)
Increase(decrease)in taxes payable 8,442 (94,360)
Decrease in other liabilities (347,474) (328,867)
Decrease in other assets 373,323 67,001
Net securities gains - (577)
------------ ------------
Net cash provided by operating activities 2,203,708 1,644,761
------------ ------------
INVESTING ACTIVITIES
Net(increase)decrease in deposits
with other banks 49,871 (41,241)
Net decrease in fed funds sold - 4,575,000
Purchase of securities AFS (13,058,220) (6,688,203)
Purchase of securities HTM (6,622,774) (21,816,622)
Maturities and calls of securities AFS 8,204,989 4,604,411
Maturities and calls of securities HTM 4,245,000 3,849,060
Sale of securities AFS - 16,641,321
Net increase in loans (8,994,330) (4,547,934)
Purchase of premises and equipment (439,138) (819,972)
------------ -------------
Net cash used in investing activities (16,614,602) (4,244,180)
------------ -------------
FINANCING ACTIVITIES
Net increase in deposits 12,550,301 2,406,411
Net increase in short-term borrowings 2,200,000 -
Dividends paid (612,000) (546,000)
------------ -------------
Net cash provided by financing activities 14,138,301 1,860,411
------------ -------------
(272,593) (739,008)
Cash and cash equivalents at beginning of year 8,839,707 7,550,942
------------ ------------
Cash and cash equivalents at end of quarter $ 8,567,114 $ 6,811,934
============ ============
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 4,555,203 $ 4,175,528
============ ============
Income Taxes $ 454,000 $ 616,000
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
COMMERCIAL NATIONAL FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1997
Note 1 Management Representation
- ------ -------------------------
The accompanying 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 June 30, 1997 and the
results of operations for the three and six month periods ended
June 30, 1997 and 1996, and the statements of cash flows and
changes in shareholders' equity for the six month periods ended
June 30, 1997 and 1996. The results of the six months ended June
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 105,000 45,000
Recoveries on previously charged off
loans 11,829 20,622
Deductions:
Loans charged off (234,737) (59,261)
----------- -----------
Reserve balance June 30 $ 1,917,911 $ 2,088,061
=========== ===========
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
First Six Months of 1997 as compared to the First Six Months of
1996
- -----------------------------------------------------------------
Pre-tax net income for the first six months of 1997 was
$2,544,686 compared to $2,596,642 during the same period of 1996,
representing a 2.00% decrease.
Interest income was $10,575,664 an increase of 8.00%. The loan
return rate increased five (5) basis points to 9.01% and the
securities return rate decreased seven (7) basis points to 5.94%.
As a result, the return rate on total average earning assets
increased seven (7) basis points to 7.78%. Average earning asset
volume rose $17,817,443, a 7.01% increase.
Interest expense was $4,589,496 an increase of 11.07%. The cost
rate on average interest-bearing liabilities was 4.29%, a ten
(10) basis point increase from a year ago. Average interest-
bearing liability volume rose $16,668,839 an increase of 8.45%.
Net interest income rose 5.76% to $5,986,168 and represented
4.20% of average total assets compared to 4.26% during the first
six months of 1996.
The average reserve for loan losses decreased 4.31% to
$1,993,704. By comparison, total average loans grew 11.36% during
the same period. The 1997 first six months provision for loan
losses was $105,000, compared to $45,000 for the first six months
of 1996, an increase of 133.33%.
Net interest income after the application of the provision for
possible loan losses grew 4.74% to $5,881,168, representing a
4.13% return on total average assets compared to 4.23% for the
first six months of 1996.
Non-interest income increased 13.75% to $727,332. Asset
management and trust fees totaled $71,543. Service charges on
deposit accounts increased 17.07% to $283,206. Other service
charges and fees rose 22.78% reaching $213,210. Other income
decreased 16.76% to $159,373.
Non-interest expense reached $4,063,814, an increase of 11.10%,
or $405,874, while total average assets grew 7.21%. Personnel
costs rose 13.04%, a $266,021 increase. Net occupancy expense
rose 16.79%, or $38,831. Furniture and equipment expense rose
24.57%, representing a cost increase of $64,666. Pennsylvania
shares tax expense was $17,676, an increase of 14.73%. Other
expense rose 1.86%, an increase of $18,680.
Federal income tax on total first six months earnings was
$611,000 compared to $657,000 a year ago. This decrease was due
to the increase in volume of tax-free municipal securities. Net
income after taxes decreased $5,956 to $1,933,686, a decrease of
.31%. The annualized return on average assets was 1.36% for the
first six months of 1997 compared to 1.46% for the six months
ended June 30, 1996. The annualized return on average equity
through June 30, 1997 was 10.76% and had been 11.57% through the
first six 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 June 30, 1997 as Compared to the Three Months
Ended June 30, 1996
- -----------------------------------------------------------------
Pre-tax net income for the second quarter of 1997 rose 2.06% and
was $1,369,579 compared to $1,341,910 during the same period of
1996.
Interest income was $5,433,657 an increase of 11.01%. The loan
return rate increased twenty-six (26) basis points to 9.17%, the
securities return rate decreased six (6) basis points to 5.94%
and the return rate on total average earning assets increased
eighteen (18) basis points to 7.86%. Volume growth in total
average earning assets was $21,463,415.
Interest expense was $2,366,278 an increase of 15.78%. The volume
increase in average interest-bearing liabilities was $19,563,316.
Cost rate rose to 4.35%, a twenty-two (22) basis point increase
from a year ago.
The average reserve for loan losses decreased 6.38% to
$1,953,597, while total average loans grew 17,727,819%. The 1997
second quarter provision for loan losses was $60,000, compared to
$30,000 for the second quarter of 1996, a 100.00% increase.
Net interest income after the application of the provision for
possible loan losses grew 6.61% to $3,007,379 representing a
4.15% return on total average assets compared to 4.24% for the
second quarter of 1996.
Non-interest income increased 21.72%, or $68,716, to $385,032.
Service charges on deposit accounts increased 21.38% to $147,833.
Other service charges and fees grew 49.94% to $110,799. Other
income decreased 18.82% to $80,779. Asset management and trust
income was $45,621.
Non-interest expense rose $227,435, a 12.67% increase, compared
to total average asset growth of 8.68%. Personnel costs rose
$148,874, a 15.27% increase. Net occupancy expense rose $18,353 a
16.79% increase. Furniture and equipment expense rose $39,672 a
30.76% increase. Pennsylvania shares tax expense was $10,257, an
increase of 17.10%. Other expense rose $10,279, a 1.97% increase.
Federal income tax on total second quarter earnings was $327,000
compared to $335,000 a year ago. Net income after taxes grew
$35,669 to $1,042,579, a 3.54% increase. The annualized return on
average assets was 1.44% for the three months ended June 30, 1997
compared to 1.51% for the second quarter of 1996. The annualized
return on average equity for the second quarter of 1997 was
11.49% compared to 11.96% for the second 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 debt investment
securities available for sale which amounted to $41,672,022 on
June 30, 1997.
During the first six months of 1997, average interest-bearing
liabilities increased $16,668,839 over the same period in 1996.
Investments maturing within one year were 5.48% of total assets
on June 30, 1997 and 7.10% on June 30, 1996.
Average loans grew by $16,628,834 and the average securities
portfolio including federal funds sold increased $1,188,609.
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, where
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 June 30, 1997 and
December 31, 1996:
<TABLE>
<CAPTION>
June 30, 1997
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 $ 47,111 $ 7,845 $ 10,557 $ 25,338 $ 118,085 $ 68,605
Interest sensitive
liabilities $ 11,504 $ 17,275 $ 23,625 $ 44,936 $ 122,332 $ 290
Interest sensitivity ----------------------------------------------------------------------------
gap $ 35,607 $ (9,430) $ (13,068) $ (19,598) $ (4,247) $ 68,315
============================================================================
Cumulative gap $ 26,177 $ 13,109 $ (6,489) $ (10,736) $ 57,579
Ratio of cumulative gap ================================================================
to earning assets 9.40% 4.71% (2.33%) (3.86%) 20.68%
================================================================
</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 June 30,
1997 with that of June 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 June 30, 1997 the corporation
had no other real estate owned and no in-substance foreclosures.
<TABLE>
<CAPTION>
At June 30,
1997 1996
<S> <C> <C>
Non-performing Loans:
Loans on non-accrual basis $ 23,172 $ 235,545
Past due loans 127,790 27,493
Renegotiated loans 985,948 747,609
------------ ------------
Total Non-performing Loans $ 1,136,910 $ 1,010,647
------------ ------------
Other real estate owned $ - $ 272,919
Total Non-performing Assets $ 1,136,910 $ 1,283,566
============ ============
Loans outstanding at end of period $ 168,726,447 $ 148,553,617
Average loans outstanding (year-to-date) $ 163,009,746 $ 146,380,912
Non-performing loans as percent of total
loans .67% .86%
Provision for possible loan losses $ 105,000 $ 45,000
Net charge-offs $ 222,908 $ 38,639
Net charge-offs as percent of average
loans .14% .03%
Provision for possible loan losses as
percent of net charge-offs 47.10% 116.46%
Reserve for possible loan losses as
percent of average loans outstanding 1.25% 1.43%
</TABLE>
CAPITAL RESOURCES
- -----------------
Shareholders' equity for the first six months of 1997 averaged $35,955,096
which represented an increase of $2,426,198 over the average capital
of $33,528,898 recorded in the same period of 1996. These capital
levels represented a capital ratio of 12.62% in 1997 and 1996. When
the loan loss reserve is included, the 1997 capital ratio becomes
13.32%.
The Federal Reserve Board's risk-based capital adequacy guidelines are
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 to be
4-5 percent for all but the most highly rated banks, as determined by
a regulatory rating system. As of June 30, 1997, the corporation,
under these guidelines, had a Tier I and total equity capital to risk
adjusted assets ratio of 21.22% and 22.33% respectively. The leverage
ratio was 12.67%.
<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 June 30, 1997
(Dollar amounts in thousands)
Percent
of Adjusted
Amount Assets
------- ------
Tier I Capital $ 36,699 21.22
Tier I Requirement 6,918 4.00
Total Equity Capital $ 38,617 22.33
Total Equity Capital Requirement 13,837 8.00
- --------------------------------------------------------------------
Leverage Capital $ 36,699 12.67
Leverage Requirement 11,591 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.
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a. April 15, 1997 Annual Meeting of Shareholders
b.c. Directors elected at the meeting and results of voting:
Director For Against Withheld Abstentions
William M. Charley 1,517,877 100
Gregg E. Hunter 1,517,977 0
Debra L. Spatola 1,513,782 4,095
Louis A.Steiner 1,517,977 0
George V. Welty 1,513,782 4,095
Continuing directors:
Edwin P. Cover Louis T. Steiner
George A. Conti, Jr. Dorothy S. Hunter
Frank E. Jobe Roy M. Landers
Richmond H. Ferguson Joseph A. Mosso
John C. McClatchey C. Edward Wible
Approve amendment to the Articles of Incorporation, increasing
authorized Common stock to 10,000,000
For Against Withheld Abstained
1,391,593 115,380 11,004
Ratification of the appointment of Jarrett Stokes & Kelly as
independent auditors:
For Against Withheld Abstained
1,517,977
d. N/A
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: August 7, 1997 [S] Louis A. Steiner
Louis A. Steiner
Chairman of the Board
Dated: August 7, 1997 [S] Wendy S. Schmucker
Wendy S. Schmucker
Assistant 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
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