Commercial National Financial

Commercial National Financial is a financial holding company that operates primarily through its wholly-owned subsidiary, Commercial Bank. Commercial Bank, originally chartered in 1962 as Commercial National Bank, converted to a state-chartered bank on December 30, 1992. The company's core business revolves around commercial lending and residential real estate lending, with loan, deposit, and other products designed to support these market segments. Commercial Bank also provides a full range of traditional banking services to individuals, including checking, savings, money market accounts, individual retirement accounts, certificates of deposit, and repurchase agreements. Commercial National Financial also owns Commercial National Financial Services Incorporated (the Agency), an inactive insurance agency acquired on July 16, 1997. The Agency previously held a minority interest in Michigan Bankers Title of Northern Michigan, LLC, which was dissolved during 2000, and made a similar, non-material investment in Michigan Bankers Title of Eastern Michigan. Through customer referrals to The Centennial Group, a financial planning group, the Agency receives commissions for product placements and fee-based services. In 2001, Commercial Bank formed CNFC Mortgage Corporation, a 100% owned mortgage company, to pursue out-of-market mortgages and offer products and services beyond those typically provided by community banks. The principal markets for Commercial Bank's financial services are the mid-Michigan communities where its nine locations are situated, and the immediately surrounding areas. The Bank also lends outside this principal geographic market to support existing customers. The principal source of revenue for Commercial National Financial is interest and fees on loans. The company does not have any material foreign assets or income.