<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-Q

            X Quarterly Report Pursuant to Section 13 or 15(d) of the

                       Securities and Exchange Act of 1934

                For the quarterly period ended March 31, 2002, or

           __ Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

              For the Transition Period from ________ to _________

                           Commission File No. 0-17000


                    COMMERCIAL NATIONAL FINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)


           Michigan                                     38-2799780
    (State of Incorporation)                (IRS Employer Identification No.)


  101 North Pine River Street, Ithaca, Michigan               48847
     (address of principal executive offices)               (ZIP Code)


       Registrant's telephone number, including area code: (989) 875-4144

Indicate by check mark 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, as of the latest practicable date.

           Class                         Outstanding at April 24, 2002
           -----                         -----------------------------
        Common Stock                             3,592,836
        No Par Value













<PAGE>
                    COMMERCIAL NATIONAL FINANCIAL CORPORATION

                                      INDEX

<TABLE>
<CAPTION>


PART I               FINANCIAL INFORMATION
<S>         <C>                                                                 <C>
Item 1.     Financial Statements

            Consolidated Balance Sheets as of March 31, 2002                    (Page 3)
            (unaudited) and December 31, 2001

            Consolidated Statements of Income and Other Comprehensive           (Page 4)
            Income (unaudited) for the three months ended March 31, 2002 and
            March 31, 2001

            Consolidated Statements of Changes in Shareholders' Equity          (Page 5)
            (unaudited) for the three months ended March 31, 2002 and March 31,
            2001

            Consolidated Statements of Cash Flows (unaudited) for the           (Page 6)
            three months ended March 31, 2002 and March 31, 2001

            Notes to Consolidated Financial Statements (unaudited)              (Page 7-10)

Item 2.     Management's Discussion and Analysis of Financial Condition         (Page 11-15)
            and Results of Operations

Item 3.     Quantitative and Qualitative Disclosures about Market Risk          (Page 16-17)


PART II              OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K

            b)           Reports on Form 8-K                                    (Page 18)

SIGNATURES                                                                      (Page 19)

</TABLE>



                                       2
<PAGE>
                    COMMERCIAL NATIONAL FINANCIAL CORPORATION


                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                               March 31,      December 31,
                                                                                 2002             2001
                                                                                 ----             ----
                                                                             (Unaudited)
<S>                                                                        <C>             <C>
ASSETS
Cash and due from banks                                                    $   4,337,320    $   7,282,523
Federal funds sold                                                               800,000        5,000,000
Other interest bearing deposits                                                2,069,123        2,064,802
                                                                           -------------    -------------
       Total cash and cash equivalents                                         7,206,443       14,347,325
Securities available for sale                                                 19,858,499       20,471,202
Securities held to maturity (fair value $6,805,423 -
    March 31, 2002; $7,730,608 - December 31, 2001)                            6,604,145        7,496,656
Federal Home Loan Bank stock, at cost                                          1,391,300        1,391,300
Gross loans receivable                                                       176,724,960      168,012,689
Allowance for loan losses                                                     (2,718,824)      (2,586,025)
                                                                           -------------    -------------
   Net loans receivable                                                      174,006,136      165,426,664
Bank owned life insurance                                                      3,093,776        3,050,296
Premises and equipment, net                                                    2,572,865        2,599,704
Accrued interest receivable and other assets                                   2,279,555        3,614,733
                                                                           -------------    -------------

       Total assets                                                        $ 217,012,719    $ 218,397,880
                                                                           =============    =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
       Deposits
              Noninterest-bearing demand                                   $  18,312,694    $  22,199,334
              Interest-bearing demand                                         26,909,499       29,033,317
              Savings                                                         55,564,241       50,116,477
              Time                                                            57,971,565       61,229,483
                                                                           -------------    -------------
                    Total deposits                                           158,757,999      162,578,611
       Securities sold under agreements to repurchase                          7,203,106        6,237,585
       Other short-term borrowings                                               916,468          136,549
       Federal Home Loan Bank advances                                        26,291,230       26,092,551
       Accrued expenses and other liabilities                                  1,463,679        1,288,306
                                                                           -------------    -------------
              Total liabilities                                              194,632,482      196,333,602

Shareholders' equity
       Common stock and paid-in-capital, no par value:  5,000,000 shares
         authorized; shares issued and outstanding
         March 31, 2002 - 3,570,972 and December 31,
         2001 - 3,547,700                                                     22,337,891       22,104,910
       Accumulated deficit                                                      (252,595)        (416,257)
       Accumulated other comprehensive income, net of tax                        294,941          375,625
                                                                           -------------    -------------
              Total shareholders' equity                                      22,380,237       22,064,278
                                                                           -------------    -------------

                    Total liabilities and shareholders' equity             $ 217,012,719    $ 218,397,880
                                                                           =============    =============
</TABLE>



                                                          See accompanying notes

                                       3
<PAGE>
                    COMMERCIAL NATIONAL FINANCIAL CORPORATION




  CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME (Unaudited)

<TABLE>
<CAPTION>


                                                                                 For Three Months
                                                                                  Ended March 31,
                                                                                2002          2001
                                                                                ----          ----
<S>                                                                       <C>            <C>
Interest and dividend income
    Loans, including fees                                                  $ 3,117,476    $ 3,780,202
    Taxable securities                                                         208,946        223,794
    Nontaxable securities                                                      130,717        139,901
    Federal funds sold                                                          29,080         51,999
    Federal Home Loan Bank stock dividends                                      20,584         27,445
    Interest on other deposits                                                   5,129          6,215
                                                                           -----------    -----------
        Total interest and dividend income                                   3,511,932      4,229,556

Interest expense
    Deposits                                                                   912,955      1,510,239
    Securities sold under agreements to repurchase                              31,159        103,029
    Federal Home Loan Bank advances                                            383,943        386,474
    Other                                                                        2,204          9,703
                                                                           -----------    -----------
        Total interest expense                                               1,330,261      2,009,445

Net interest income                                                          2,181,671      2,220,111

Provision for loan losses                                                      120,000         90,000
                                                                           -----------    -----------
Net interest income after provision for loan losses                          2,061,671      2,130,111

Noninterest income
    Service charges and fees                                                   106,812        109,140
    Net gains on loan sales                                                     55,693         73,786
    Receivable financing fees                                                   37,091         86,679
    Security gains                                                              23,397         94,484
    Other                                                                       90,503         46,755
                                                                           -----------    -----------
        Total noninterest income                                               313,496        410,844

Noninterest expense
    Salaries and employee benefits                                             820,131        806,395
    Occupancy and equipment                                                    222,141        249,960
    FDIC insurance                                                               8,235          7,554
    Printing, postage and supplies                                              73,773         74,692
    Professional and outside services                                          104,207         98,403
    Other                                                                      234,836        218,919
                                                                           -----------    -----------
        Total noninterest expense                                            1,463,323      1,455,923
                                                                           -----------    -----------
Income before income tax expense                                               911,844      1,085,032
Income tax expense                                                             248,100        322,500
                                                                           -----------    -----------
Net income                                                                 $   663,744    $   762,532
                                                                           ===========    ===========
Net change in unrealized gains/(losses) on securities available for sale   $   (98,850)   $   293,123
Reclassification adjustment for (gains) recognized in income                   (23,397)       (94,484)
Tax effects                                                                     41,563        (67,537)
                                                                           -----------    -----------
Total Comprehensive Income                                                 $   583,060    $   893,634
                                                                           ===========    ===========

Per share information
    Basic earnings                                                         $      0.19    $      0.22
    Diluted earnings                                                       $      0.18    $      0.22
    Dividends declared                                                     $      0.14    $      0.13



</TABLE>




                                                          See accompanying notes




                                       4

<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION



           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
        Three Months ended March 31, 2002 and March 31, 2001 (Unaudited)


<TABLE>
<CAPTION>

                                                                                          Accumulated
                                                Shares        Common                         Other
                                                Issued       Stock and                   Comprehensive       Total
                                                  and         Paid in      Accumulated   Income/(Loss),  Shareholders'
                                              Outstanding     Capital        Deficit       Net of Tax       Equity
----------------------------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>            <C>           <C>          <C>
Balance at January 1, 2001                      3,493,586   $ 21,617,080   $ (1,714,089)    $ 207,091   $ 20,110,082

Comprehensive income:
   Net income                                                                   762,532                      762,532
   Net change in unrealized gains/(losses) on
     securities available for sale                                                            293,123        293,123
   Reclassification adjustment for gains
      recognized in income                                                                    (94,484)       (94,484)
   Tax effects                                                                                (67,537)       (67,537)
                                                                                                       ------------
     Total comprehensive income                                                                              893,634

Cash dividends declared, $.13 per share                                        (467,679)                    (467,679)

Issued under dividend reinvestment program         12,961        140,722                                     140,722
Issued under stock option plan                          -              -                                           -
Issued under employee benefit plan                  1,724         16,876                                      16,876
Repurchase and retirement of shares                (2,960)       (26,954)                                    (26,954)
                                                ---------   ------------   ------------     ---------   ------------
Balance at March 31, 2001                       3,505,311   $ 21,747,724   $ (1,419,236)    $ 338,193   $ 20,666,681
                                                =========   ============   ============     =========   ============
--------------------------------------------------------------------------------------------------------------------


Balance at January 1, 2002                      3,547,700   $ 22,104,910   $   (416,257)    $ 375,625   $ 22,064,278
Comprehensive income:
   Net income                                                                   663,744                      663,744
   Net change in unrealized gains/(losses) on
     securities available for sale                                                            (98,850)       (98,850)
   Reclassification adjustment for gains
     recognized in income                                                                     (23,397)       (23,397)
   Tax effects                                                                                 41,563         41,563
                                                                                                        ------------
     Total comprehensive income                                                                              583,060

Cash dividends declared, $.14 per share                                        (500,082)                    (500,082)

Issued under dividend reinvestment program         19,716        197,405                                     197,405
Issued under stock option plan                      1,711         16,289                                      16,289
Issued under employee benefit plan                  3,002         32,303                                      32,303
Repurchase and retirement of shares                (1,157)       (13,016)                                    (13,016)
                                                ---------   ------------   ------------     ---------   ------------
Balance at March 31, 2002                       3,570,972   $ 22,337,891   $   (252,595)    $ 294,941   $ 22,380,237
                                                =========   ============   ============     =========   ============

</TABLE>







                                                          See accompanying notes

                                       5
<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION




                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

<TABLE>
<CAPTION>


                                                                             For Three Months Ended
                                                                                    March 31,
                                                                              2002             2001
                                                                              ----             ----
<S>                                                                     <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                           $    663,744    $    762,532
    Adjustments to reconcile net income to net
      cash from operating activities
          Provision for loan losses                                           120,000          90,000
          Net gains on loan sales                                             (55,693)        (73,786)
          Originations of loans held for sale                              (2,296,210)     (4,000,298)
          Proceeds from sales of loans held for sale                        2,351,902       4,074,084
          Gain on sales of securities available for sale                      (23,397)        (94,484)
          Depreciation, amortization and accretion                            130,513         128,742
          Net change in accrued interest receivable and other assets        1,333,261         153,110
          Net change in accrued expenses and other liabilities                171,615          (1,908)
                                                                         ------------    ------------
               Net cash from operating activities                           2,395,735       1,037,992

CASH FLOWS FROM INVESTING ACTIVITIES
          Purchases of securities available for sale                         (527,220)     (2,767,962)
          Proceeds from maturities of securities available for sale         1,000,000       3,600,000
          Proceeds from sales of securities available for sale                    -         1,324,633
          Proceeds from maturities of securities held to maturity             912,900             -
          Net change in loans                                              (8,700,288)       (865,560)
          Purchases of premises and equipment, net                            (82,174)        (54,047)
                                                                         ------------    ------------
               Net cash from investing activities                          (7,396,782)      1,237,064

CASH FLOW FROM FINANCING ACTIVITIES
          Net change in deposits                                           (3,820,612)      6,811,348
          Net change in securities sold under agreements to repurchase        965,521         296,902
          Net change in U.S. Treasury demand notes                            779,919      (1,588,790)
          Proceeds from Federal Home Loan Bank advances                     2,000,000       9,000,000
          Repayment of Federal Home Loan Bank advances                     (1,801,321)    (10,490,524)
          Repurchase and retirement of shares of common stock                 (13,016)        (26,954)
          Dividends paid and fractional shares                               (496,323)       (465,804)
          Proceeds from sale of common stock                                  245,997         157,598
                                                                         ------------    ------------
               Net cash from financing activities                          (2,139,835)      3,693,776
                                                                         ------------    ------------

Net change in cash and cash equivalents                                    (7,140,882)      5,968,832

Cash and cash equivalents, at beginning of year                            14,347,325       7,462,021
                                                                         ------------    ------------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD                              $  7,206,443    $ 13,430,853
                                                                         ============    ============
Cash paid during the period for
          Interest                                                       $  1,380,840    $  2,065,567
          Federal income taxes                                                    -            50,000



</TABLE>





                                                          See accompanying notes

                                        6
<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION



             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1-Summary of Significant Accounting Policies

Basic Presentation
The accompanying unaudited condensed consolidated financial statements were
prepared in accordance with Rule 10-01 of regulation S-X and the instructions
for Form 10-Q and, therefore, do not include all disclosures required by
accounting principles generally accepted in the United States of America for
complete presentation of financial statements. In management's opinion, the
condensed consolidated financial statements contain all adjustments (consisting
of normal recurring accruals) necessary to present fairly the financial
condition of Commercial National Financial Corporation as of March 31, 2002 and
December 31, 2001 and the results of its operations for the three months ending
March 31, 2002 and March 31, 2001. The results for the three months ended March
31, 2002 are not necessarily indicative of the results expected for the full
year.

Principals of Consolidation
The accompanying consolidated financial statements include the accounts of
Commercial National Financial Corporation (CNFC), Commercial Bank (Bank) and
CNFC Financial Services, Inc. and CNFC Mortgage Corporation, both wholly owned
subsidiaries of the Bank. All material intercompany accounts and transactions
have been eliminated in consolidation.

Nature of Operations, Industry Segments and Concentrations of Credit Risk
CNFC is a one-bank holding company, which conducts limited business activities.
The Bank performs the majority of business activities.

The Bank provides a full range of banking services to individuals, agricultural
businesses, commercial businesses and light industries located in its service
area. It maintains a diversified loan portfolio, including loans to individuals
for home mortgages, automobiles and personal expenditures, and loans to business
enterprises for current operations and expansion. The Bank offers a variety of
deposit products, including checking, savings, money market, individual
retirement accounts and certificates of deposit. While CNFC's chief
decision-makers monitor the revenue stream of various products and services,
operations are managed and financial performance is evaluated on a
corporation-wide basis. Accordingly, management considers all of the CNFC's
banking operations to be aggregated into one operating segment.

The principal markets for the Bank's financial services are the Michigan
communities in which the Bank is located and the areas surrounding these
communities. The Bank serves these markets through seven offices located in
Gratiot and Montcalm Counties in Michigan.

Use of Estimates
To prepare financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes estimates
and assumptions based on available information. These estimates and assumptions
affect the amounts reported in the financial statements and the disclosures
provided. Future results could differ. The allowance for loan losses and fair
values of securities and other financial instruments are particularly subject to
change.

Cash Flow Reporting
Cash and cash equivalents include cash on hand, demand deposits with other
financial institutions and federal funds sold. Cash flows are reported net for
customer loan and deposit transactions, securities sold under agreements to
repurchase with original maturity of 90 days or less and U.S. Treasury demand
notes.

Securities
Securities are classified as held to maturity and carried at amortized cost when
management has the positive intent and ability to hold them to maturity.
Securities are classified as available for sale when they might be sold before
maturity. Securities available for sale are carried at fair value, with net
unrealized holding gains and losses reported separately in other comprehensive
income (loss), net of tax. Trading securities are bought principally for sale in
the near term, and are reported at fair value with unrealized gains and losses
included in earnings. Securities are written down to fair value when a decline
in fair value is not temporary. CNFC did not classify any securities for trading
at any time during 2002 or 2001.

Gains and losses on sales are determined using the amortized cost of the
specific security sold. Interest and dividend income, adjusted by amortization
of purchase premiums and discounts, is included in earnings.




                                        7
<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION


Loans Held for Sale
Loans held for sale are reported at the lower of cost or market value in the
aggregate. Net unrealized losses are recorded in a valuation allowance by
charges to income.

Loans
Loans that management has the intent and the ability to hold for the foreseeable
future or until maturity or payoff are reported at the principal balance
outstanding, net of unearned interest, deferred loan fees and costs, and an
allowance for loan losses. Interest income is reported on the interest method
and includes amortization of net deferred loan fees and costs over the loan
term.

Interest income is not reported when full loan repayment is in doubt, typically
when payments are past due over 90 days, unless the loan is both well secured
and in the process of collection. Payments received on such loans are reported
as principal reductions.

Allowance for Loan Losses
The allowance for loan losses is a valuation allowance for probable credit
losses, increased by the provision for loan losses and decreased by charge-offs
less recoveries. Estimating the risk of loss and the amount of loss on any loan
is subjective. Accordingly, management estimates the allowance balance required
based on past loan loss experience, known and inherent risks in the portfolio,
information about specific borrower situations and estimated collateral values,
economic conditions, and other factors. Allocations of the allowance may be made
for specific loans, but the entire allowance is available for any loan that
should be charged-off. A problem loan is charged-off by management as a loss
when deemed uncollectible, although collection efforts continue and future
recoveries may occur.

Loan impairment is reported when full payment under the loan terms is not
expected. Impairment is evaluated in total for smaller-balance loans of similar
nature such as residential mortgage and consumer loans and individually for
other loans. If a loan is impaired, a portion of the allowance is allocated so
that the loan is reported, net, at the present value of estimated future cash
flows using the loan's existing rate or at the fair value of collateral if
repayment is expected solely from the collateral. Loans are evaluated for
impairment when payments are delayed, typically 90 days or more, or when it is
probable that all principal and interest amounts will not be collected according
to the original terms of the loan.

Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using a combination of straight-line and accelerated
methods with useful lives ranging from 10 to 40 years for buildings and
improvements, and 3 to 10 years for furniture and equipment. These assets are
reviewed for impairment when events indicate their carrying amount may not be
recoverable from future undiscounted cash flows. Maintenance, repairs and minor
alterations are charged to current operations as expenditures occur. Major
improvements are capitalized.

Servicing Rights
Servicing rights represent both purchased rights and the allocated value of
servicing rights retained on loans sold. Servicing rights are expensed in
proportion to, and over the period of, estimated net servicing revenues.

Impairment is evaluated based on the fair value of the rights, using groupings
of the underlying loans as to interest rates and then, secondarily, as to
geographic and prepayment characteristics. Any impairment of a grouping is
reported as a valuation allowance.

Excess servicing receivable is reported when a loan sale results in servicing in
excess of normal amounts and is expensed over the life of the servicing on the
interest method.

Other Real Estate Owned
Real estate properties acquired in collection of a loan receivable are recorded
at fair value at acquisition. Any reduction to fair value from the carrying
value of the related loan is accounted for as a loan loss. After acquisition, a
valuation allowance reduces the reported amount to the lower of the initial
amount or fair value less costs to sell. Expenses, gains and losses on
disposition, and changes in the valuation allowance are reported in other
expense.




                                        8
<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION


Securities Sold Under Agreements to Repurchase
All of these liabilities represent amounts advanced by various customers and are
secured by securities owned, as they are not covered by general deposit
insurance.

Employee Benefits
A benefit plan with 401(k) features covers substantially all employees. The plan
allows participant compensation deferrals. The amount of any matching
contribution is based solely on the discretion of the board of directors.
Historically, CNFC has matched up to 6% of such deferrals at 100%.

Stock Compensation
Expense for employee compensation under stock option plans is reported only if
options are granted below market price at grant date.

Income Taxes
Income tax expense is the sum of the current year income tax due or refundable
and the change in deferred tax assets and liabilities. Deferred tax assets and
liabilities are the expected future tax consequences of temporary differences
between the carrying amounts and tax bases of assets and liabilities, computed
using enacted tax rates. A valuation allowance, if needed, reduces deferred tax
assets to the amount expected to be realized.

Earnings and Dividends Per Share
Basic earnings per common share is based on net income divided by the weighted
average number of common shares outstanding during the period. Diluted earnings
per common share shows the diluted effect of any additional potential common
shares. Earnings and dividends per common share are restated for all stock
splits and stock dividends.

Stock Dividends
Dividends issued in stock are reported by transferring the market value of the
stock issued from retained earnings to common stock, to the extent of available
retained earnings. Any excess of fair value over available retained earnings is
considered a return of capital and thus is transferred from paid in capital.
Fractional shares are paid in cash for all stock dividends.

Comprehensive Income
Comprehensive income consists of net income and other comprehensive income
(loss). Other comprehensive income (loss) includes the change in unrealized
appreciation and depreciation on securities available for sale, net of tax,
which is also recognized as a separate component of shareholders' equity.

Financial Instruments with Off-Balance-Sheet Risk
Financial instruments include off-balance sheet credit instruments, such as
commitments to make loans and standby letters of credit issued to meet customer
needs. The face amount for these items represents the exposure to loss before
considering customer collateral or ability to repay. Such financial instruments
are recorded when they are funded.

Fair Values of Financial Instruments
Fair values of financial instruments are estimated using relevant market
information and other assumptions. Fair value estimates involve uncertainties
and matters of significant judgment regarding interest rates, credit risk,
prepayments, and other factors, especially in the absence of broad markets for
particular items. Changes in assumptions or in market conditions could
significantly affect the estimates. The fair value estimates of existing on-and
off-balance-sheet financial instruments do not include the value of anticipated
future business or values of assets and liabilities not considered financial
instruments.

Reclassifications
Some items in the prior year financial statements have been reclassified to
conform with the current year presentation.

Recent Accounting Pronouncements
Effective January 1, 2002, the Company adopted a new standard issued by the FASB
on impairment and disposal of long-lived assets. The effect of this on the
financial position and results of operations of the Company was not material.

A new accounting standard dealing with asset retirement obligations will apply
for 2003. The company does not believe this standard will have a material affect
on its financial position or results of operations.





                                        9

<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION



Note 2 - Earnings Per Share
A reconciliation of the numerators and denominators of the basic earnings per
share and diluted earnings per share computations for the periods ended is
presented below:

<TABLE>
<CAPTION>

                                                                      For three months ended
                                                        MARCH 31, 2002                     MARCH 31, 2001
---------------------------------------------------------------------------------------------------------
<S>                                                     <C>                                <C>
BASIC EARNINGS PER SHARE:
Net income available to common shareholders                $    663,744                      $     762,532

Weighted-average common shares outstanding for
    basic earnings per share                                  3,570,688                          3,505,595
----------------------------------------------------------------------------------------------------------

BASIC EARNINGS PER SHARE                                   $        .19                      $         .22
==========================================================================================================


DILUTED EARNINGS PER SHARE:
Net income available to common shareholders                $    663,744                      $     762,532

Weighted-average common shares outstanding for basic
    earnings per share                                        3,570,688                          3,505,595

Add:
Dilutive effect of assumed exercise of stock options             26,143                              9,667
----------------------------------------------------------------------------------------------------------

Weighted-average common and dilutive additional potential
    common shares outstanding                                 3,596,831                          3,515,262
==========================================================================================================

DILUTED EARNINGS PER SHARE                                 $        .18                      $         .22
==========================================================================================================


</TABLE>


                                       10


<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION




ITEM 2:     MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

FINANCIAL CONDITION
Summary
Total assets at March 31, 2002 decreased to $217,013,000 from the $218,398,000
at December 31, 2001. Federal funds sold decreased $4,200,000. The Federal Funds
sold balances were used to fund an $8,712,000 increase in gross loans compared
to December 31, 2001.

Other assets decreased $1,335,000. One million of repossessed assets included in
other assets were sold at book value during the quarter.

As a result of the low rate of return paid on certificates of deposits,
customers continue to shift funds from certificates of deposit to savings and
money market accounts. This accounts for majority of the $5,448,000 increase in
balances in savings accounts. Management also elected to price network
certificate of deposits less aggressively. As a result, balances in network
certificate of deposits decreased from $12,054,000 at December 31, 2001 to
$9,726,000 at March 31, 2002. This $2,328,000 decrease is reflected in the
$3,258,000 overall decrease in certificates of deposit.

Liquidity
Management defines liquidity as the ability to fund appropriate levels of credit
worthy loans, meet the immediate cash withdrawal requirements of depositors, and
maintain access to sufficient resources to meet unexpected contingencies at a
reasonable cost, with minimal losses.

The loan to deposit ratio at March 31, 2002 was 111.3% compared to 103.3% at
December 31, 2001. Management believes that the combination of available FHLB
advances, Federal funds lines of credit, the available for sale investment
portfolio, and our ability to sell mortgage loans provides adequate short and
medium term sources of liquidity. At a minimum the Bank has the following
available to meet short-term liquidity needs: $8,550,000 in available FHLB
advances and $9,000,000 in short term federal funds lines of credit with
correspondent banks.

CNFC also needs cash to pay dividends to its shareholders. The primary source of
cash is the dividends paid to CNFC by the Bank. Management believes that cash
from operations is sufficient to supply the cash needed to continue paying a
reasonable dividend. CNFC also has a $1,500,000 line of credit with a
correspondent institution.


                                       11

<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION



Asset Quality
At March 31, 2002 CNFC has identified $4,116,000 of loans as non-performing.
This compares to $462,000 at December 31, 2001. Approximately $3,234,000 in
non-accrual loans are associated with several related borrowers. All of the
$3,234,000 in non-accrual loans are considered impaired and the allowance for
loan loss allocated to these loans is $0. In addition to the loans identified
below as non-performing, management has identified $16,414,000 of loans at March
31, 2002 where the borrower is experiencing some financial difficulty. These
loans are included on management reports commonly referred to as a Watch List.
This compares to $11,900,000 included on the Watch List at December 31, 2001.


<TABLE>
<CAPTION>


                                                       March 31, 2002           December 31, 2001
<S>                                                 <C>                         <C>
Total loans                                          $      176,724,960         $     168,012,689

Non-accrual loans                                    $        3,621,837         $         387,822
Accruing loans past due 90 days or more                         493,667                    74,664
-------------------------------------------------------------------------------------------------
     Total non-performing loans                      $        4,115,504         $         462,486

Repossessed assets and other real estate                              -                 1,000,000
-------------------------------------------------------------------------------------------------
     Total non-performing assets                     $        4,115,504         $       1,462,486
=================================================================================================

Total non-performing loans as a
     percentage of total loans                                     2.33%                      .28%
=================================================================================================

Allowance for loan loss as a percentage of
     non-performing loans                                         66.06%                   559.16%
=================================================================================================

Total non-performing assets as a percentage of
     total assets                                                  1.90%                      .67%
=================================================================================================
</TABLE>

Allowance for Loan Loss
The allowance for loan losses was 1.54% of total loans at March 31, 2002 and
1.54% at December 31, 2001. Year to date net recoveries totaled $13,000. Year
2001 net charge-offs totaled $334,000. Approximately $390,000 relates to one
business loan relationship. Excluding this charge-off, CNFC recorded net
recoveries of $56,000 during 2001.

Management systematically evaluates the adequacy of the allowance such that the
balance is commensurate with the performance of the loan portfolio, loan growth,
general market conditions and other relevant factors. Included in the
calculation of the appropriate level for the allowance for loan loss is the risk
associated with approximately $16,389,000 of loans that management has
identified as experiencing some financial difficulty and an increase in
non-performing assets to $4,116,000. Also the loan portfolio has increased
$8,712,000 or 5.19% in the first quarter of 2002. For these reasons, management
elected to increase the provision to $120,000, which was $30,000 more than the
amount expensed for the three months ended March 31, 2001.

<TABLE>
<CAPTION>


                                 Three Months Ended        Year Ended       Three Months Ended
                                   March 31, 2002       December 31, 2001      March 31, 2001
-----------------------------------------------------------------------------------------------
<S>                               <C>                 <C>                    <C>
Beginning balance                  $    2,586,025      $       2,545,363      $      2,545,363

Loan charge-offs                           (7,997)              (415,904)               (5,701)
Loan recoveries                            20,796                 81,566                12,410
----------------------------------------------------------------------------------------------
Net loan recoveries/(charge-offs)          12,799               (334,338)                6,709
Provision for loan losses                 120,000                375,000                90,000
----------------------------------------------------------------------------------------------
Ending balance                     $    2,718,824      $       2,586,025      $      2,642,072
==============================================================================================
</TABLE>



                                       12

<PAGE>


                    COMMERCIAL NATIONAL FINANCIAL CORPORATION



Capital Resources
CNFC's capital ratios continue to exceed regulatory guidelines for a "well
capitalized" institution. It is management's intent to maintain capital ratios
in excess of the minimum required to be well capitalized. A summary of CNFC's
capital ratios follows:

<TABLE>
<CAPTION>
                                                                                   Minimum Required to be
                                                                                   Well Capitalized Under
                                                                                  Prompt Corrective Action
                                            March 31, 2002     December 31, 2001         Regulations
---------------------------------------------------------------------------------------------------------
<S>                                         <C>                <C>                <C>
Total capital to risk weighted assets            14.2%                 14.4%                10.0%
Tier 1 capital to risk weighted assets           12.9%                 13.1%                 6.0%
Tier 1 capital to average assets                 10.1%                  9.7%                 5.0%
</TABLE>


RESULTS OF OPERATIONS
Summary
Net income for the quarter ended March 31, 2002 was $664,000, a decrease of
$99,000, or 13.0% compared to the same period in 2001. A $97,000 or 23.7%
decrease in noninterest income, generated by reductions in receivable financing
fees, security sales and loan sales offset by an increase in insurance
commissions due to the BOLI, are the primary contributing factors to the
decrease in net income. CNFC's net interest income decreased by $38,000,
primarily as a result of a decrease in margin during the quarter. Non-interest
expense for the quarter increased $7,000 or .48% compared to the same period in
2001.


Net Interest Income
The following table illustrates the effect that changes in rates and balances of
interest-earning assets and interest-bearing liabilities had on tax-equivalent
net interest income for the three months ending March 31, 2002 and 2001.

<TABLE>
<CAPTION>


                                    Three Months Ending March 31,
                                       2002             2001
                                       ----             ----
<S>                                 <C>            <C>
Interest Income (tax equivalent)    $  3,639,262    $  4,408,525
Interest Expense                       1,330,261       2,009,445
                                    ------------    ------------
Net Interest Income                 $  2,309,001    $  2,399,080
                                    ============    ============

Average Balances
Interest-earning Assets             $207,572,386    $209,374,136
Interest-bearing Liabilities         176,770,888     177,649,442
                                    ------------    ------------
Net Differential                    $ 30,801,498    $ 31,724,694
                                    ============    ============

Average Yields/Rates (annualized)
Yield on Earning Assets                     7.11%           8.54%
Rate Paid on Liabilities                    3.05%           4.59%
                                    ------------    ------------

Interest Spread                             4.06%           3.95%
                                    ============    ============

Net Interest Margin                         4.51%           4.65%
                                    ============    ============
</TABLE>




                                       13
<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION




The change in tax equivalent net interest income is attributable to the
following:
<TABLE>
<CAPTION>

                                               Three Months Ending
                                                  March 31, 2002
                                         Balance       Rate       Inc/(Dec)
<S>                                    <C>          <C>          <C>
Interest Earning Assets                 $ (92,557)   $(676,706)   $(769,263)
Interest Bearing Liabilities              (77,818)    (601,366)    (679,184)
                                        ---------    ---------    ---------
Net Interest Income                     $ (14,739)   $ (75,340)   $ (90,079)
                                        =========    =========    =========
</TABLE>


The $90,000 decrease in tax-equivalent net interest income for the three months
ending March 31, 2002 resulted from a decrease in margin and a $923,000 decrease
in net earning assets. Net interest margin for the three months ending March 31,
2002 decreased to 4.51% compared to 4.65% for the three months ending March 31,
2001.

In response to the September 11th attacks and a slowing national economy, the
Federal Reserve Open Market Committee lowered the discount rate 475 basis points
during 2001. These decreases in the discount rate result in an almost immediate
decrease in the Bank's prime lending rate.

The interest rate on a significant portion of the Bank's commercial loan
portfolio is tied to the prime-lending rate. As the Bank adjusts its prime
lending rate accordingly, the Bank experiences an almost immediate decrease in
net interest income. In response, management has lowered retail deposit rates,
however, it is unable to lower the cost of retail deposits as quickly and to the
same extent as the Federal Reserve has lowered the federal funds target rate. In
addition, many customers are refinancing higher yielding, fixed rate, long-term
loans at lower rates. The combination of these factors has resulted in a
decrease in margin from 4.65% for the three months ended March 31, 2001 to 4.51%
for the same period in 2002.

Noninterest Income
Noninterest income for the three months ending March 31, 2002 was $313,000. This
represents a $97,000 or 23.7% decrease over the same period in 2001.

Net gain on loan sales decreased from $74,000 to $56,000. Residential real
estate interest rates were historically low during the fourth quarter of 2001.
As a result, the Bank experienced significant refinancing activity. Current
interest rates are higher than those experienced in the fourth quarter of 2001.

Receivable financing decreased from $87,000 to $37,000 as the result of lower
volume of receivables financed with fewer customers.

In 2001, CNFC elected to liquidate several investments held as available for
sale by the holding company. This resulted in $94,000 in securities gains in
2001. In 2002 the Bank had a gain of $23,000 resulting from municipal securities
called at a premium.

The $44,000 increase in other income reflects the income recorded on the Bank's
investment in bank owned life insurance (BOLI).

Noninterest Expense
Noninterest expense for the three months ending March 31, 2002 totaled
$1,463,000. This represents a $7,000 or .48% increase over the same period in
2001.


                                       14

<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION


Salary and benefit expense for the three months ending March 31, 2002 totaled
$820,000 compared to $806,000 for the same period in 2001, an increase of
$14,000 or 1.7%. The increase reflects normal salary increases, combined with a
double-digit increase in the cost of medical insurance. Bank staffing levels
have not significantly changed compared to the same period in 2001.


                                       15

<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION



ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Asset liability management involves developing, implementing and monitoring
strategies to maintain sufficient liquidity, maximize net interest income and
minimize the impact that significant fluctuations in market interest rates would
have on earnings. Commercial's Asset/Liability Committee (ALCO) is responsible
for managing this process.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Commercial's primary market risk exposure is interest rate risk and, to a lesser
extent, liquidity risk. Commercial's transactions are denominated in U.S.
dollars with no specific foreign exchange exposure. Also, Commercial has a
limited exposure to commodity prices related to agricultural loans. Any impacts
that changes in foreign exchange rate and commodity prices would have on
interest rates are assumed to be insignificant.

Interest rate risk (IRR) is the exposure of a banking organization's financial
condition to adverse movements in interest rates. Accepting this risk can be an
important source of profitability and stockholder value; however, excessive
levels of IRR could pose a significant threat to earnings and capital.
Accordingly, effective risk management that maintains IRR at prudent levels is
essential to Commercial's safety and soundness.

Evaluating exposure to changes in interest rates includes assessing both the
adequacy of management's process used to control IRR and the organization's
quantitative level of exposure. When assessing the IRR management process,
Commercial seeks to ensure that appropriate policies, procedures, management
information systems and internal controls are in place to maintain IRR at
prudent levels with consistency and continuity. Evaluating the quantitative
level of IRR exposure requires the assessment of existing and potential future
effects of changes in interest rates on its consolidated financial condition,
including capital adequacy, earnings, liquidity, and, where appropriate, asset
quality.

Commercial derives the majority of income from the excess of interest collected
over interest paid. The rates of interest earned on its assets and owed on its
liabilities generally are established contractually for a period of time. Since
market interest rates change over time, Commercial is exposed to lower profit
margins (or losses) if it cannot adapt to interest rate changes.

For example, assume that an institution's assets carry long-term fixed rates and
that those assets are funded with short-term liabilities. If market interest
rates rise by the time the short-term liabilities must be refinanced, the
increase in the institution's interest expense may exceed the interest earned on
its long-term assets. Accordingly, an institution's profits could decrease.

Commercial is also subject to repayment risk when interest rates fall. For
example, mortgage loans and other financial assets may be prepaid by a debtor so
that the debtor may refinance their obligations at new, lower rates. Prepayments
of assets carrying higher rates reduces interest income and overall asset
yields.

Several ways an institution can manage IRR include: selling existing assets or
repaying certain liabilities; matching repricing periods for new assets and
liabilities, for example, by shortening terms of new loans or investments and
hedging existing assets, liabilities, or anticipated transactions. An
institution might also invest in more complex financial instruments intended to
hedge or otherwise change IRR. Interest rate swaps, futures contracts, options
on futures, and other such derivative financial instruments are often used for
this purpose. Because these instruments are sensitive to interest rate changes,
they require management's expertise to be effective. Commercial has not
purchased derivative financial instruments in the past and does not presently
intend to purchase such instruments.

ALCO uses various techniques to monitor IRR. Commercial's primary tool in
measuring interest rate risk is to perform a simulation analysis. This analysis
forecasts the effect of various interest rate changes on the balance sheet,
economic value of equity, net interest income and net income.



                                       16

<PAGE>


                    COMMERCIAL NATIONAL FINANCIAL CORPORATION


ALCO monitors the effect on the balance sheet and income statement of various
interest rate scenarios. One common scenario performed by ALCO is to "shock" the
balance sheet by assuming that Commercial has just experienced an immediate and
parallel shift in the yield curve up or down 200 basis points. These results are
recorded and compared to previous results. Management performs this calculation
quarterly.

The results of this calculation combined with a review of market interest rates,
economic conditions, loan demand, local deposit interest rates and other
factors, allows ALCO to structure the balance sheet with the goal of maximizing
net interest income and minimizing interest rate risk. ALCO applies the
percentage change anticipated in net interest income to the net interest income
actually earned to determine if the change is within acceptable limits. ALCO has
concluded from these results that Commercial has an acceptable level of interest
rate risk.



Forward Looking Statements
This discussion and analysis of financial condition and results of operations,
and other sections of this report contain forward looking statements that are
based on management's beliefs, assumptions, current expectations, estimates and
projections about the financial services industry, the economy, and about the
Corporation itself. Words such as "anticipates", "believes", "estimates",
"expects" "forecasts" "intends", "is likely", "plans", "product", "projects",
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties, and assumptions ("Future
Factors") that are difficult to predict with regard to timing, extent,
likelihood and degree of occurrence. Therefore, actual results and outcomes may
materially differ from what may be expressed or forecasted in such forward
looking statements. Furthermore, CNFC undertakes no obligation to update, amend
or clarify forward-looking statements, whether as a result of new information,
future events, or otherwise.

Future Factors include changes in interest rates and interest rate
relationships; demand for products and services; the degree of competition by
traditional and non-traditional competitors; changes in banking regulations and
tax laws; changes in prices, levies, and assessments; the impact of technology,
governmental and regulatory policy changes; the outcome of pending and future
litigation and contingencies; trends in customer behavior including their
ability to repay loans; and vicissitudes of the national and local economies.
These are representative of the Future Factors that could cause a difference
between an actual outcome and a forward-looking statement.


                                       17

<PAGE>

                    COMMERCIAL NATIONAL FINANCIAL CORPORATION





                    COMMERCIAL NATIONAL FINANCIAL CORPORATION

PART II.                                                OTHER INFORMATION

Item 6 (b)                                              Reports on Form 8-K

None



                                       18
<PAGE>
                    COMMERCIAL NATIONAL FINANCIAL CORPORATION



                    COMMERCIAL NATIONAL FINANCIAL CORPORATION

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)

Date: May 3, 2002        /s/ JEFFREY S. BARKER
                         -------------------------------------
                         Jeffrey S. Barker
                         President and Chief Executive Officer

                         /s/ PATRICK G. DUFFY
                         --------------------------------------
                         Patrick G. Duffy
                         Executive Vice President and Chief Financial
                         Officer


                                       19