Community National Bank Announces Earnings For First Quarter Of 2014

MELVILLE, N.Y., April 16, 2014 /PRNewswire/ -- Community National Bank (OTC: CBNY) today announced first quarter results for 2014.  Highlights for the quarter include:

  • Net income of $1.1 million or $0.17 per share for the first quarter of 2014 compared to net income of $943 thousand or $0.14 per share for the same period in 2013. 
  • Net interest income increased 23% or $1.4 million to $7.6 million for the quarter ended March 31, 2014 compared to $6.2 million for the quarter ended March 31, 2013.
  • Return on average assets and equity of 0.54% and 6.08%, respectively, for the quarter ended March 31, 2014 compared to 0.55% and 5.24%, respectively, for the quarter ended March 31, 2013. 
  • Commercial loans grew $96.6 million or 26% to $471.4 million at March 31, 2014 when compared to March 31, 2013.
  • Deposits increased $120.4 million or 20% to $708.4 million at March 31, 2014 compared to $588.0 million at March 31, 2013.
  • Demand deposits grew $36.3 million or 22% to $198.3 million at March 31, 2014 compared to $162.0 million at March 31, 2013.

Earnings and Net Interest Income

Net income for the quarter ended March 31, 2014 was $1.1 million or $0.17 basic earnings per share compared to net income of $943 thousand or $0.14 basic earnings per share for the same period in 2013, an increase of $162 thousand or 17%. The increase in net income was due to higher net interest income, which resulted from substantial loan growth, increased fees from service charges and gains from the sale of SBA loans.

For the quarter ended March 31, 2014, net interest income increased $1.4 million or 23% to $7.6 million compared to $6.2 million for the quarter ended March 31, 2013. The net interest margin also increased during this same period by 3 basis points to 3.84% from 3.81% for the quarter ended March 31, 2013. The increase in net interest income and margin was primarily due to (1) growth in the commercial and residential loan portfolios; (2) an increase in non-interest bearing demand deposits; (3) a 13 basis point decline in the yield on interest bearing liabilities; and (4) additional commercial loan interest income of $385 thousand from loan prepayment penalties during the first quarter of 2014. 

Non-Interest Income

Non-interest income increased $385 thousand or 44% to $1.2 million for the quarter ended March 31, 2014 compared to $875 thousand for the prior year period. The increase in non-interest income was attributable to higher gains from the sale of SBA loans and increased fees from service charges. 

Non-Interest Expense

Non-interest expense increased $1.1 million or 23% to $6.1 million for the quarter ended March 31, 2014 compared to $5.0 million for the same period in 2013. The increase was attributable to higher compensation and occupancy costs associated with (1) our new Hewlett branch location, which opened in September 2013; (2) the addition of a new Senior Credit Officer and other personnel in loan administration and bank operations; and (3) increased depreciation expense for our new corporate headquarters and Hewlett Branch. Other expenses increased approximately $300 thousand or 28% to $1.4 million for the quarter ended March 31, 2014 compared to $1.1 million during the same period in 2013. The increase was attributable to increased data and item processing volume, consulting fees for regulatory compliance and legal fees associated with loan collections and general corporate matters.

Balance Sheet

Total assets grew to $833.0 million at March 31, 2014, an increase of $127.5 million or 18% when compared to total assets of $705.5 million at March 31, 2013. Total loans increased $127.7 million or 24% to $670.3 million at March 31, 2014 when compared to March 31, 2013. The commercial loan portfolio increased $96.6 million or 26% when compared to March 31, 2013, and the residential loan portfolio increased $31.1 million or 19% when compared to March 31, 2013. Loans were funded by deposit growth from our new Hewlett branch location and increased business demand deposits and municipal deposits.

Total deposits increased $120.4 million or 20% to $708.4 million at March 31, 2014 from $588.0 million at March 31, 2013. Demand deposits grew $36.3 million or 22% to $198.3 million at March 31, 2014 when compared to March 31, 2013.  The increase was due primarily to additional commercial business relationships. Demand deposits represented 28% of total deposits at March 31, 2014.  NOW, savings and money market deposits increased $69.1 million or 27% to $323.5 million at March 31, 2014 from $254.4 million at March 31, 2013. A significant portion of this growth was from new municipal deposit relationships.

Asset Quality & Capital

Non-performing loans, consisting of loans past due 90 days or more, was $1.3 million or 0.20% of total loans at March 31, 2014 compared to $1.0 million or 0.19% of total loans at March 31, 2013. The Bank recorded $0.9 million in provision for loan losses during the first quarter of 2014 compared to $0.6 million for the first quarter of 2013. The higher provision charge was mostly attributable to one commercial and industrial loan being adversely classified during the first quarter of 2014.  Payments on this loan are current, and management continues to closely monitor the relationship. The Bank did not own any foreclosed properties at March 31, 2014 and 2013, respectively.

The allowance for loan losses was $10.3 million or 1.54% of total loans at March 31, 2014, an increase of $3.1 million from $7.2 million or 1.33% of total loans at March 31, 2013. 

The Bank continues to have significant capital strength with Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of 9.13%, 12.04% and 13.29%, respectively, at March 31, 2014.

Further information about the financial condition and performance of Community National Bank is available from its Call Reports filed by the Bank with the FDIC and available on the FDIC website at: www.fdic.gov. The Bank expects to file its March 31, 2014 Call Report on or around April 30, 2014.

ABOUT COMMUNITY NATIONAL BANK
Community National Bank is a Long Island based independent commercial bank and operates eleven locations in Nassau, Suffolk, Queens and Manhattan Counties. We offer a full range of modern financial services, backed by state-of-the-art technology. In addition to commercial loans, commercial mortgages, small business loans and lines of credit and residential mortgages, CNB also provides a complete selection of traditional personal and commercial deposit products such as no fee individual and business checking accounts, IRA accounts and statement savings.

Cautionary Statement about Forward-Looking Statements

This release contains certain "forward looking statements" about CNB which, to the extent applicable, are intended to be covered by the safe harbor for forward looking statements provided under the Federal securities laws and, regardless of such coverage, you are cautioned about. Examples of forward-looking statements include but are not limited to, CNB's financial condition, capital ratios, results of operations and outlook. Forward-looking statements are not historical facts. Such statements may be identified by the use of such words as "may," "believe," "expect," "anticipate," "plan," "continue," or similar terminology. These statements relate to future events or our future financial performance and involve risks and uncertainties that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we caution you not to place undue reliance on these forward-looking statements. Factors which may cause our forward looking statements to be materially inaccurate include, but are not limited to, a unexpected deterioration in our loan portfolio, unexpected increases in our expenses, greater than anticipated growth, unanticipated regulatory action, unexpected changes in interest rates, a loss of key personnel, an unanticipated loss of existing customers, competition from other institutions causing us unanticipated changes in our deposit or loan rates, increases in FDIC insurance costs and unanticipated adverse changes in our customers' economic conditions or economic conditions in our local area generally. Forward-looking statements speak only as of the date of this press release We do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 


COMMUNITY NATIONAL BANK

STATEMENTS OF INCOME

(Unaudited)






For The Three Months Ended


March 31,

December 31,

March 31,


2014

2013

2013

Interest Income:




Commercial Loans

$6,190,101

$5,672,443

$4,933,693

Residential and Consumer Loans

1,743,561

1,738,300

1,647,870

Securities

632,347

609,843

541,085

Money Market Investments

4,067

20,428

9,715

   Total Interest Income

8,570,076

8,041,014

7,132,363





Interest Expense:




NOW, Savings & Money Market

295,813

328,531

204,820

Certificates of Deposit

565,524

608,736

577,432

Borrowed Funds

86,393

75,860

133,008

   Total Interest Expense

947,730

1,013,127

915,260

      Net Interest Income

7,622,346

7,027,887

6,217,103

Provision For Loan Losses

975,000

373,000

620,000

Net Interest Income After Provision for Loan Losses

6,647,346

6,654,887

5,597,103





Non-Interest Income:




Service Charges

324,075

331,778

246,820

Servicing Income & Loan Fees

101,375

167,308

94,523

Gain on Sale of Investments

20,432

-

29,439

Gain on Sale of Loans

673,026

26,237

346,460

BOLI Income

141,925

151,206

158,119

   Total Non-Interest Income

1,260,833

676,529

875,361





Non-Interest Expense:




Compensation and Benefits

3,142,452

2,836,429

2,548,069

Occupancy and Equipment

1,521,403

1,388,281

1,302,557

Advertising

51,043

49,321

41,263

Other Expenses

1,380,646

1,499,655

1,073,984

   Total Non-Interest Expense

6,095,544

5,773,686

4,965,873

Income Before Income Taxes

1,812,635

1,557,730

1,506,591

Provision For Income Taxes

708,000

596,387

564,002

      Net Income

$1,104,635

$961,343

$942,589





Earnings Per Share:




   Basic

$0.17

$0.14

$0.14

   Diluted

$0.16

$0.14

$0.14

   Weighted Average Shares Outstanding - Basic

6,673,181

6,673,181

6,673,181

   Weighted Average Shares Outstanding - Diluted

6,813,748

6,796,064

6,745,079

 

 


COMMUNITY NATIONAL BANK

STATEMENTS OF CONDITION

(Unaudited)






March 31,

December 31,

March 31,

Assets:

2014

2013

2013

Cash and Due From Banks

$4,819,820

$8,783,780

$8,223,778

Money Market Investments

15,953,371

2,102,723

15,708,308





Securities - Available-for-Sale

98,770,601

100,894,759

104,853,026

Securities – Held-to-Maturity

5,824,335

6,053,339

-

Restricted Stock

4,899,450

5,408,850

4,603,950

   Total Securities

109,494,386

112,356,948

109,456,976









Commercial Loans

471,362,962

464,037,616

374,772,120

Residential & Consumer Loans

198,968,236

197,350,345

167,837,569

Gross Loans Held-For-Investment

670,331,198

661,387,961

542,609,689

Less:  Allowance For Loans Losses

(10,355,770)

(9,383,788)

(7,227,875)

   Net Loans Held-For-Investment

659,975,428

652,004,173

535,381,814





Premises and Equipment, net

10,845,303

11,116,968

8,614,816

Bank Owned Life Insurance ("BOLI")

20,241,485

20,099,560

19,651,976

Other Assets

11,732,819

12,118,062

8,505,838

   Total Assets

$833,062,612

$818,582,214

$705,543,506





Liabilities and Stockholders' Equity:




Deposits:




Demand

$198,252,200

$177,107,547

$161,971,063

NOW, Savings & Money Market

323,544,027

316,807,903

254,477,223

Certificates of Deposit

186,568,373

193,134,562

171,504,040

   Total Deposits

708,364,600

687,050,012

587,952,326





FHLB Advances

43,601,230

54,921,135

40,462,894

Accrued Expenses and Other Liabilities

7,773,533

4,985,420

4,731,800

   Total Liabilities

759,739,363

746,956,567

633,147,020





Stockholders' Equity:




Common Stock, par value $5.00; authorized




10,000,000 shares;  issued 6,673,181 shares

33,365,905

33,365,905

33,365,905

Additional Paid-in-Capital

34,428,937

34,362,152

34,164,118

Retained Earnings

7,511,576

6,406,941

4,397,881

Unrealized (Loss)/Gain on Securities

(1,983,169)

(2,509,351)

468,582

      Total Stockholders' Equity

73,323,249

71,625,647

72,396,486

      Total Liabilities and Stockholders' Equity

$833,062,612

$818,582,214

$705,543,506

 

 


COMMUNITY NATIONAL BANK

SELECTED FINANCIAL DATA AND BALANCE SHEET COMPONENTS

(Unaudited)





SELECTED FINANCIAL DATA:

For The Three Months Ended


March 31,

December 31,

March 31,

Per Share:

2014

2013

2013

Net Income - Basic

$0.17

$0.14

$0.14

Average Shares Outstanding - Basic

6,673,181

6,673,181

6,673,181

Net Income - Diluted

$0.16

$0.14

$0.14

Average Shares Outstanding - Diluted

6,813,748

6,796,064

6,745,079

Tangible Book Value

$10.99

$10.73

$10.85





Performance:




Return on Average Total Assets

0.54%

0.47%

0.55%

Return on Average Equity

6.08%

5.35%

5.24%

Efficiency Ratio

68.62%

74.94%

70.02%









Yield on Average Earning Assets

4.32%

4.16%

4.38%

Yield on Average Interest Bearing Liabilities

0.68%

0.74%

0.81%

Cost of Deposits

0.49%

0.53%

0.54%

Net Interest Spread

3.64%

3.42%

3.57%

Net Interest Margin

3.84%

3.63%

3.81%






March 31,

December 31,

March 31,

Capital Ratios:

2014

2013

2013

Tangible Common Equity

8.80%

8.75%

10.26%

Leverage

9.13%

9.12%

10.42%

Tier 1

12.04%

11.91%

13.77%

Total Risk Based

13.29%

13.16%

15.02%





Asset Quality:




Allowance for Loan Losses to Total Loans

1.54%

1.42%

1.33%

Allowance for Loan Losses to Non-Performing Loans

791%

800%

706%

Non-performing Loans to Total Loans

0.20%

0.18%

0.19%

Non-performing Assets to Total Assets

0.16%

0.14%

0.15%

Annualized Quarterly Net Charge-offs to Average Loans

0.00%

-0.04%

0.00%

 

SOURCE Community National Bank



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