Commercial National Reports December 31, 2016 Earnings

LATROBE, Pa., Jan. 31, 2017

The Company's annualized return on average assets and average equity were .83% and 5.24%, respectively, for the quarter ended December 31, 2016 compared to 1.09% and 7.70%, respectively, for the quarter ended December 31, 2015. The Company's annualized return on average assets and average equity for the twelve-month period ended December 31, 2016 were 1.07% and 6.99%, respectively, compared to 1.48% and 10.23%, respectively, for the twelve-month period ended December 31, 2015. Tier one risk-based, total risk-based, leverage and common equity tier one capital ratios for December 31, 2016 were 22.70%, 23.26%, 14.93% and 22.70%, respectively. Fourth quarter tax equivalent net interest margin was 4.42%.

Throughout 2016, the Company accelerated its transition toward greater loan portfolio emphasis against an ultimate backdrop of rising market interest rates and yields. This transition began in 2014's third quarter and gained substantial momentum in 2016 following extensive 2015 sales force refreshening and the second quarter 2016 implementation of more effective loan underwriting and promotional practices.  This transition is producing more diverse and sustainable financial performance going into future years. In 2016, net loan outstandings rose $19.2 million, or 10.60%, and new money loan amounts pending close at year-end were $17.4 million.  Loan portfolio credit quality remains strong with 2016 marking the Company's ninth consecutive year without any need for loan loss provisioning. Partial funding for 2016's loan growth came from first half bond portfolio sales into an over-bought market which as a by-product helped generate net realized gains of $1,196,000 prior to the late-year 2016 deep bond market sell-off that still left the Company's high-yield and high-credit quality bond portfolio with net unrealized market value gains as a percentage of book value that were far in excess of peer banks.

Also during 2016, the Company materially expanded the features of its deposit service offerings via the successful late-year roll-out of real-time internet and mobile banking capabilities for both consumer and commercial customers.  These enhanced capabilities will accentuate growth in the Company's deposit footings through broadened appeal to a wider range of potential customers. In addition, these new technological service delivery features helped facilitate a long planned for limited community branch office network consolidation in mid-December for a material savings in ongoing future Company-wide overhead expense. Finally in 2016, the Company's Asset Management and Trust operation was meaningfully restructured to greatly improve the client service quality experience and further promote more earnings accretive new business acquisition.

Cash dividends paid per share during 2016 were $1.04. The Company's dividend payout ratio remains strong and this strength is evident in the very high dividend yield of the Company's stock shares. The Company's underlying core earnings in conjunction with its solid capital base provide the capacity to maintain the regular $0.26 per share quarterly common stock cash dividend payments to shareholders. Providing an attractive and reliable cash dividend income stream to all our shareholders in the most equitable manner possible through the prudent operation of the subsidiary bank remains a long-standing top priority for the Company.

As disclosed each year in the Annual Report to Shareholders, on December 31, 2016, the Company employed 99 people in full-time and part-time positions. Forty-seven (47) employees are represented by the United Auto Workers, Local 1799. The Company has had unionized employees since 1972.  In 2013, the Company and the bargaining unit entered into a labor agreement that will expire in February 2019. The Commonwealth of Pennsylvania and the National Labor Relations Board both afford protection to the organized status of pre-existing collective bargaining units. The Company has been advised that bargaining unit status may limit the Company's strategic options relative to those of non-unionized insured depository institutions. The Company continues to consider this as a factor in its strategic and capital management decisions.

The Company operates nine community banking facilities in Greensburg, Hempfield Township, Latrobe, 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 operates an asset management and trust division of Commercial Bank & Trust of PA headquartered in Greensburg, Pennsylvania. Commercial Bank & Trust of PA also serves its customer base from an Internet banking site (www.cbthebank.com) and an automated TouchTone Teller banking system.