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      Community National Bank Announces Earnings For Second Quarter Of 2013


      News provided by

      Community National Bank

      Jul 22, 2013, 11:00 ET

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      GREAT NECK, N.Y., July 22, 2013 /PRNewswire/ -- Community National Bank (SYMBOL: CBNY.OB) today announced second quarter results for 2013.  Highlights for the quarter include:

      • Net income of $794 thousand or $0.12 per share for the second quarter of 2013 compared to net income of $672 thousand or $0.10 per share for the same period in 2012. 
      • Net interest income increased 27% or $1.4 million to $6.5 million for the quarter ended June 30, 2013 compared to $5.1 million for the quarter ended June 30, 2012.
      • Net interest margin improved 24 basis points to 3.81% for the quarter ended June 30, 2013 from 3.57% for the same period in 2012.  
      • Commercial loans grew 28% or $81.7 million to $372.2 million at June 30, 2013 when compared to June 30, 2012.
      • Demand deposits increased $49.7 million or 41% to $169.9 million at June 30, 2013 when compared to June 30, 2012.
      • Strong asset quality with non-performing assets to total assets of 0.30%, which is well below peer group average.
      • Return on average assets and equity of 0.44% and 4.36%, respectively, for the quarter ended June 30, 2013.

      Stuart Lubow, Chairman, President and CEO of Community National Bank, commented, "The Bank made significant progress since last year. Our total loan portfolio increased $102 million or 23% to approximately $550 million and demand deposits grew approximately $50 million or 41% since June 30, 2012, helping to improve our net interest margin by 24 basis points to 3.81%. We continue to focus on core earnings growth and made tremendous strides with service charge income increasing by $109 thousand or 69% when compared to the three months ending June 30, 2012.  We are excited about the opening of our eleventh branch location in Hewlett and the relocation of our corporate headquarters to Melville this upcoming August. We believe it is important to be centrally located on Long Island and this new corporate headquarters provides us with additional visibility and convenience to our customers. The Bank's commercial loan portfolio declined $2.5 million during the past quarter when compared to March 31, 2013. The decline was the result of large payoffs in our taxi medallion loan portfolio. The marketplace for taxi medallions loans has become very competitive and many financial institutions have lowered their underwriting standards at a time when taxi medallion prices have reached record valuations. We did not think it was prudent to match our competitors' terms. Our loan pipeline remains robust and we anticipate loan growth in the upcoming quarters."

      Earnings and Net Interest Income

      Net income for the quarter ended June 30, 2013 was $794 thousand or $0.12 basic earnings per share compared to net income of $672 thousand or $0.10 basic earnings per share for the same period in 2012, an increase of 18% or $122 thousand. Net income for the six months ended June 30, 2013 was $1.7 million or $0.26 basic earnings per share compared to net income of $1.2 million or $0.18 basic earnings per share for the same period in 2012, an increase of 45% or $538 thousand.

      The increase in net income for both the quarter and six months ended June 30, 2013 was due to higher net interest income associated with loan growth, increases in service fees and servicing income and gains on the sale of loans. These increases were partially offset by higher non-interest expenses associated with our infrastructure build-out and provision for loan losses. 

      On a linked quarter basis, net income for the second quarter of 2013 decreased $148 thousand or 16% when compared to the first quarter of 2013.  The decrease was due to higher provisions for loan losses and non-interest expenses, which were partially offset by continued growth in net interest income of $286 thousand or 4.6% to $6.5 million and increased service charges and gains on the sale of loans.

      Net interest income for the quarter ended June 30, 2013 increased $1.4 million or 27% to $6.5 million from $5.1 million for the quarter ended June 30, 2012. The net interest margin increased 24 basis points to 3.81% for the second quarter of 2013 compared to 3.57% for the same period in 2012. Net interest income for the six months ended June 30, 2013 increased $2.8 million or 28% to $12.7 million from $9.9 million for the six months ended June 30, 2012. The net interest margin also increased during these corresponding periods by 19 basis points to 3.81% for the six months ended June 30, 2013 from 3.62% for the prior year period.

      The increase in net interest income and margin for both the quarter and six months ended June 30, 2013 was primarily due to (1) growth in our commercial and residential loan portfolios; (2) higher non-interest bearing demand deposits; and (3) a continued decline in overall cost of funds on deposits. 

      Non-Interest Income

      Non-interest income increased approximately $260 thousand or 30% to $1.1 million for the quarter ended June 30, 2013 compared to $0.9 million for the prior year quarter. Non-interest income for the six months ended June 30, 2013 increased $485 thousand or 32% to $2.0 million from $1.5 million for the same period in 2012. The increase in non-interest income was attributable to higher service fees and gains on the sale of SBA loans for both the quarter and six months ended June 30, 2013.  

      Non-Interest Expense

      Non-interest expense increased $841 thousand or 19% to $5.3 million for the quarter ended June 30, 2013 from $4.5 million for the same period in 2012. The increase was attributable to higher compensation associated with the hiring of a director of human resources, a senior vice president of operations, support staff for lending and higher occupancy costs associated with the new Hewlett branch location and corporate headquarters in Melville, both of which are expected to open in August 2013.

      Balance Sheet and Asset Quality

      Total assets grew $99.3 million or 16% to $718.1 million at June 30, 2013 compared to total assets of $618.7 million at June 30, 2012. Total loans increased $102.8 million or 23% to $548.3 million at June 30, 2013 when compared to June 30, 2012. The commercial loan portfolio increased $81.7 million or 28% when compared to June 30, 2012. The residential and consumer loan portfolio increased $21.1 million or 13.6% when compared to June 30, 2012. Loan growth was funded by increases in core deposits from our existing branch network as well as our newest location in New York City, which opened in June 2012, and additional municipal deposit relationships and FHLB advances.  

      Our asset quality remains strong and a core focus during these challenging economic times. Non-performing loans, consisting of loans past due 90 days or more, increased $1.4 million to $2.1 million or 0.39% of total loans at June 30, 2013 from $0.7 million or 0.17% of total loans at June 30, 2012.

      The Bank's provision for loan losses for the second quarter of 2013 was $995 thousand, an increase of $520 thousand or 109% when compared to the prior year quarter. The allowance for loan losses was $8.2 million or 1.50% of total loans at June 30, 2013, an increase of approximately $2.8 million from $5.4 million or 1.21% of total loans at June 30, 2012. The increase in the allowance for loan losses was mostly attributable to general valuation reserves related to the significant commercial loan growth since June 30, 2012. 

      The Bank did not have any other real estate owned at June 30, 2013. It had one property classified as other real estate owned at June 30, 2012, which sold for its carrying value in the fourth quarter of 2012. 

      Deposits

      Total deposits increased $73.3 million or 14% to $585.2 million at June 30, 2013 from $511.9 million at June 30, 2012. Demand deposits grew $49.7 million or 41% to $169.9 million at June 30, 2013 when compared to June 30, 2012.

      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: http://research.fdic.gov/bankfind. The Bank expects to file its June 30, 2013 Call Report on or around July 30, 2013.

      ABOUT COMMUNITY NATIONAL BANK
      Community National Bank is a Long Island based independent commercial bank and operates ten 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

      For The Six Months Ended


      June 30,

      June 30,

      June 30,

      June 30,


      2013

      2012

      2013

      2012

      Interest Income:





      Commercial Loans

      $5,194,321

      $3,984,291

      $10,128,014

      $7,724,975

      Residential and Consumer Loans

      1,670,716

      1,640,173

      3,318,586

      3,268,934

      Securities

      551,025

      626,625

      1,092,110

      1,211,475

      Money Market Investments

      10,823

      10,216

      20,538

      17,295

         Total Interest Income

      7,426,885

      6,261,305

      14,559,248

      12,222,679






      Interest Expense:





      NOW, Savings & Money Market

      175,984

      235,288

      380,804

      438,969

      Certificates of Deposit

      592,243

      754,517

      1,169,675

      1,564,758

      Borrowed Funds

      155,129

      149,253

      288,137

      305,723

         Total Interest Expense

      923,356

      1,139,058

      1,838,616

      2,309,450

            Net Interest Income

      6,503,529

      5,122,247

      12,720,632

      9,913,229

      Provision For Loan Losses

      995,000

      475,000

      1,615,000

      918,000

      Net Interest Income After Provision for Loan Losses

      5,508,529

      4,647,247

      11,105,632

      8,995,229






      Non-Interest Income:





      Service Charges

      267,690

      158,438

      514,510

      300,456

      Servicing Income & Loan Fees

      134,972

      79,510

      229,495

      172,963

      Gain on Sale of Investments

      -

      -

      29,439

      132,576

      Gain on Sale of Loans

      575,299

      442,252

      921,759

      562,933

      BOLI Income

      148,137

      186,034

      306,256

      347,296

         Total Non-Interest Income

      1,126,098

      866,234

      2,001,459

      1,516,224






      Non-Interest Expense:





      Compensation and Benefits

      2,639,070

      2,258,229

      5,187,139

      4,416,705

      Occupancy and Equipment

      1,340,234

      1,139,060

      2,642,791

      2,210,313

      Advertising

      67,045

      52,360

      108,308

      99,385

      Other Expenses

      1,263,153

      1,018,972

      2,337,137

      1,938,902

         Total Non-Interest Expense

      5,309,502

      4,468,621

      10,275,375

      8,665,305

      Income Before Income Taxes

      1,325,125

      1,044,860

      2,831,716

      1,846,148

      Provision For Income Taxes

      530,999

      372,754

      1,095,001

      646,954

            Net Income

      $794,126

      $672,106

      1,736,715

      $1,199,194






      Earnings Per Share:





         Basic

      $0.12

      $0.10

      $0.26

      $0.18

         Diluted

      $0.12

      $0.10

      $0.26

      $0.18

         Weighted Average Shares Outstanding – Basic

      6,673,181

      6,673,181

      6,673,181

      6,673,181

         Weighted Average Shares Outstanding – Diluted

      6,767,440

      6,700,265

      6,756,881

      6,692,062

      COMMUNITY NATIONAL BANK

      STATEMENTS OF INCOME

      Unaudited





      For the Three Months Ended


      June 30,

      March 31,

      December 31,

      September 30,


      2013

      2013

      2012

      2012

      Interest Income:





      Commercial Loans

      $5,194,321

      $4,933,693

      $4,503,513

      $4,198,087

      Residential and Consumer Loans

      1,670,716

      1,647,870

      1,626,252

      1,631,210

      Securities

      551,025

      541,085

      541,214

      587,751

      Money Market Investments

      10,823

      9,715

      23,148

      11,183

         Total Interest Income

      7,426,885

      7,132,363

      $6,694,127

      6,428,231






      Interest Expense:





      NOW, Savings & Money Market

      175,984

      204,820

      229,149

      234,914

      Certificates of Deposit

      592,243

      577,432

      649,781

      707,539

      Borrowed Funds

      155,129

      133,008

      125,485

      138,624

         Total Interest Expense

      923,356

      915,260

      1,004,415

      1,081,077

            Net Interest Income

      6,503,529

      6,217,103

      5,689,712

      5,347,154

      Provision For Loan Losses

      995,000

      620,000

      800,000

      475,000

      Net Interest Income After Provision for Loan Losses

      5,508,529

      5,597,103

      4,889,712

      4,872,154






      Non-Interest Income:





      Service Charges

      267,690

      246,820

      189,246

      140,704

      Loan Fees & Servicing Income

      134,972

      94,523

      99,005

      136,067

      Gain on Sale of Investments

      -

      29,439

      6,788

      141,217

      Gain on Sale of Loans

      575,299

      346,460

      289,091

      656,256

      BOLI Income

      148,137

      158,119

      196,659

      177,812

         Total Non-Interest Income

      1,126,098

      875,361

      780,789

      1,252,056






      Non-Interest Expense:





      Compensation and Benefits

      2,639,070

      2,548,069

      2,380,164

      2,355,625

      Occupancy and Equipment

      1,340,234

      1,302,557

      1,141,651

      1,168,866

      Advertising

      67,045

      41,263

      59,419

      59,409

      Other Expenses

      1,263,153

      1,073,984

      1,039,938

      1,039,594

         Total Non-Interest Expense

      5,309,502

      4,965,873

      4,621,172

      4,623,494

      Income Before Income Taxes

      1,325,125

      1,506,591

      1,049,329

      1,500,716

      Provision For Income Taxes

      530,999

      564,002

      356,929

      541,050

            Net Income

      $794,126

      $942,589

      $692,400

      $959,666






      Earnings Per Share:





         Basic

      $0.12

      $0.14

      $0.10

      $0.14

         Diluted

      $0.12

      $0.14

      $0.10

      $0.14

         Weighted Average Shares Outstanding – Basic

      6,673,181

      6,673,181

      6,673,181

      6,673,181

         Weighted Average Shares Outstanding – Diluted

      6,767,440

      6,745,079

      6,701,691

      6,697,975







      COMMUNITY NATIONAL BANK

      STATEMENTS OF CONDITION

      Unaudited








      June 30,

      March 31,

      December 31,

      June 30,


      2013

      2013

      2012

      2012

      Assets:





      Cash and Due From Banks

      $7,927,992

      $8,223,778

      $13,453,651

      $7,980,739

      Money Market Investments

      18,966,565

      15,708,308

      7,391,467

      11,756,613






      Securities - Available-for-Sale

      107,982,445

      104,853,026

      100,126,177

      116,969,332

      Restricted Stock

      5,494,450

      4,603,950

      3,904,850

      4,080,250

         Total Securities

      113,476,895

      109,456,976

      104,031,027

      121,049,582






      Loans Held-For-Sale

      -

      -

      -

      400,000






      Commercial Loans

      372,236,723

      374,772,120

      351,587,251

      290,558,824

      Residential & Consumer Loans

      176,034,480

      167,837,569

      160,030,011

      154,910,682

      Gross Loans Held-For-Investment

      548,271,203

      542,609,689

      511,617,262

      445,469,506

      Less:  Allowance For Loans Losses

      (8,228,359)

      (7,227,875)

      (6,606,498)

      (5,396,607)

         Net Loans Held-For-Investment

      540,042,844

      535,381,814

      505,010,764

      440,072,899






      Premises and Equipment, net

      9,590,787

      8,614,816

      8,709,570

      9,087,941

      Bank Owned Life Insurance ("BOLI")

      19,800,850

      19,651,976

      19,493,857

      19,119,387

      Other Assets

      8,246,406

      8,505,838

      7,693,014

      9,281,539

         Total Assets

      $718,052,339

      $705,543,506

      $665,783,350

      $618,748,700






      Liabilities and Stockholders' Equity:





      Deposits:





      Demand

      $169,896,257

      $161,971,063

      $155,877,268

      $120,182,668

      NOW, Savings & Money Market

      230,706,025

      254,477,223

      233,241,844

      202,311,136

      Certificates of Deposit

      184,636,337

      171,504,040

      174,223,625

      189,446,881

         Total Deposits

      585,238,619

      587,952,326

      563,342,737

      511,940,685






      FHLB Advances

      56,951,949

      40,462,894

      $24,970,887

      33,978,085

      Accrued Expenses and Other Liabilities

      4,170,988

      4,731,800

      5,666,170

      2,917,289

         Total Liabilities

      646,361,556

      633,147,020

      593,979,794

      548,836,059






      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

      33,365,905

      Additional Paid in Capital

      34,228,336

      34,164,118

      34,101,246

      33,968,660

      Retained Earnings

      5,192,007

      4,397,881

      3,455,292

      1,803,226

      Unrealized (Loss)/Gain on Securities

      (1,095,465)

      468,582

      881,113

      774,850

            Total Stockholders' Equity

      71,690,783

      72,396,486

      71,803,556

      69,912,641

            Total Liabilities and Stockholders' Equity

      $718,052,339

      $705,543,506

      $665,783,350

      $618,748,700







      COMMUNITY NATIONAL BANK

      SELECTED FINANCIAL DATA & BALANCE SHEET COMPONENTS

      Unaudited








      For The Three Months Ended

      For The Six Months Ended


      June 30, 2013

      June 30, 2012

      June 30, 2013

      June 30, 2012

      Per Share:





      Net Income-Basic

      $0.12

      $0.10

      $0.26

      $0.18

      Average Shares Outstanding – Basic

      6,673,181

      6,673,181

      6,673,181

      6,673,181

      Net Income – Diluted

      $0.12

      $0.10

      $0.26

      $0.18

      Average Shares Outstanding – Diluted

      6,767,440

      6,700,265

      6,756,881

      6,692,062

      Book Value

      $10.74

      $10.48

      $10.74

      $10.48






      Performance:





      Return on Average Assets

      0.44%

      0.44%

      0.49%

      0.41%

      Return on Average Equity

      4.36%

      3.88%

      4.80%

      3.49%

      Efficiency Ratio

      69.59%

      74.62%

      69.80%

      75.82%






      Yield on Average Earning Assets

      4.35%

      4.37%

      4.36%

      4.47%

      Cost on Average Interest Bearing Liabilities

      0.78%

      1.08%

      0.79%

      1.16%

      Cost of Deposits

      0.53%

      0.78%

      0.53%

      0.84%

      Net Interest Spread

      3.57%

      3.29%

      3.58%

      3.31%

      Net Interest Margin

      3.81%

      3.57%

      3.81%

      3.62%







      Quarter Ended


      June 30,

      March 31,

      December 31,

      June 30,


      2013

      2013

      2012

      2012

      Capital Ratios:


      Tangible Common Equity

      9.98%

      10.26%

      10.78%

      11.30%

      Leverage

      10.10%

      10.42%

      10.35%

      11.00%

      Tier 1

      13.90%

      13.77%

      13.85%

      15.53%

      Total Risk Based

      15.16%

      15.02%

      15.10%

      16.78%






      Asset Quality:





      Allowance for Loan Losses to Total Loans

      1.50%

      1.33%

      1.29%

      1.21%

      Allowance for Loan Losses to Non-Performing Loans

      386%

      706%

      456%

      732%

      Non-Performing Loans to Total Loans

      0.39%

      0.19%

      0.28%

      0.17%

      Non-Performing Assets to Total Assets

      0.30%

      0.15%

      0.22%

      0.21%

      Annualized Quarterly Net Charge offs to Avg. Loans

      0.00%

      0.00%

      0.08%

      0.26%






      SOURCE Community National Bank

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