COMMUNITY NATIONAL BANK 
By MELVILLE, N.Y., Jan. 31, 2014 /PRNewswire/ -- Community National Bank (OTC: CBNY) today announced fourth quarter and year-end results for 2013. Highlights for the quarter and year include:
-- Net income of $961 thousand or $0.14 per share for the fourth quarter of
2013 compared to net income of $692 thousand or $0.10 per share for the
same period in 2012.
-- Net interest income increased 24% or $1.3 million to $7.0 million for
the quarter ended December 31, 2013 compared to $5.7 million for the
quarter ended December 31, 2012.
-- Return on average assets and equity of 0.47% and 5.35%, respectively,
for the quarter ended December 31, 2013 compared to 0.42% and 3.88%,
respectively, for the quarter ended December 31, 2012.
-- Commercial loans grew $112.5 million or 32% to $464.0 million at
December 31, 2013 when compared to December 31, 2012. On a
linked-quarter basis, commercial loans increased $30 million or 6.9%
compared to September 30, 2013.
-- Service charge income increased $517 thousand or 82% to $1.1 million for
the year ended December 31, 2013 when compared to the same period in
2012.
-- Solid asset quality with non-performing assets to total assets of 0.14%,
which is well below peer group average.
Stuart Lubow, Chairman, CEO and President, commented, "We are committed to our strategic plan of creating solid commercial relationships, core earnings and franchise value for the long-term. During the past year, we have increased loans by $150 million, improved quarterly net interest income by $1.3 million and increased our service charge income. While competition has increased during the past year, we expect to build upon this strategy in the coming year."
Earnings and Net Interest Income
Net income for the quarter ended December 31, 2013 was $961 thousand or $0.14 basic earnings per share compared to net income of $692 thousand or $0.10 basic earnings per share for the same period in 2012, an increase of 39% or $269 thousand.
The increase in net income reflects higher net interest income from loan growth and lower provisions for loan losses, which were partially offset by an increase in non-interest expenses. The increase in non-interest expenses was attributable to (1) higher facility related expenses for our new corporate headquarters and new branch location in Hewlett; (2) additional personnel costs for the branch location, operations and compliance; and (3) an increase in legal fees.
Net income for the year ended December 31, 2013 was $2.9 million or $0.44 basic earnings per share, which was flat when compared to net income of $2.8 million or $0.43 basic earnings per share for the year ended December 31, 2012. Net income remained flat as increases in net interest income were offset by higher provisions for loan losses and non-interest expenses.
On a linked quarter basis, net income for the fourth quarter of 2013 increased $707 thousand or 279% when compared to the third quarter of 2013. The increase was due to a significant decline in the provisions for loan losses, which was offset slightly by lower gains on the sale of SBA loans and higher non-interest expenses.
Net interest income for the quarter ended December 31, 2013 increased $1.3 million or 24% to $7.0 million from $5.7 million for the quarter ended December 31, 2012. The net interest margin decreased 2 basis points to 3.63% for the fourth quarter of 2013 compared to 3.65% for the same period in 2012.
Net interest income for the year ended December 31, 2013 increased $5.5 million or 26% to $26.5 million from $21.0 million for the year ended December 31, 2012. The net interest margin also increased by 12 basis points to 3.74% for the twelve months ended December 31, 2013 from 3.62% for the comparable period in the prior year.
The increase in net interest income for both the quarter and year ended December 31, 2013 was primarily due to (1) growth in the commercial and residential loan portfolios; (2) higher non-interest bearing demand deposits; and (3) a continued decline in overall cost of funds on deposits and FHLB advances.
The net interest margin improved when compared to the prior year due to a continued decline in the Bank's cost of funds. However, on a linked quarterly basis, the net interest margin declined 10 basis points to 3.63% as new loans carried lower yields.
Non-Interest Income
Non-interest income decreased approximately $104 thousand or 13% to $0.7 million for the quarter ended December 31, 2013 compared to $0.8 million for the comparable quarter in the prior year. The decrease was due to lower SBA sales volume and income from Bank Owned Life Insurance ("BOLI"). This was partially offset by higher service charges on commercial accounts and servicing income from the SBA loan portfolio.
Non-interest income for the twelve months ended December 31, 2013 remained relatively flat at $3.6 million when compared to the same period in 2012. Declines in gains from the sale of SBA loans and investments and lower BOLI income were offset by higher service charges and servicing income.
Non-Interest Expense
Non-interest expenses increased $1.1 million or 25% to $5.7 million for the quarter ended December 31, 2013 from $4.6 million for the same period in 2012.
Non-interest expenses increased $3.5 million or 19% to $21.4 million for the twelve months ended December 31, 2013 from $17.9 million for the same period in 2012.
The increase for both the quarter and year reflects investments in new facilities, enhancements in technology, increased personnel to support the growth of the Bank, additional regulatory burdens and higher legal fees. Although non-interest expenses increased in 2013, the Bank's ratio of operating expenses to average assets decreased to 2.87% in 2013 from 2.91% in 2012.
Balance Sheet
Total assets grew $152.8 million or 23% to $818.6 million at December 31, 2013 when compared to total assets of $665.8 million at December 31, 2012. A significant portion of the asset growth was in the loan category. Total loans increased $149.8 million or 29% to $661.4 million at December 31, 2013 when compared to December 31, 2012. The commercial and residential loan portfolios increased $112.5 million or 32% and $37.3 million or 23%, respectively, when compared to December 31, 2012. The loan growth was funded by increased demand deposits, municipal deposits, certificates of deposit and FHLB advances.
Total deposits increased $123.7 million or 22% to $687.0 million at December 31, 2013 from $563.3 million at December 31, 2012. Demand deposits grew $21.2 million or 14% to $177.1 million at December 31, 2013 when compared to December 31, 2012. The increase was due to additional commercial business relationships. Demand deposits represent 26% of total deposits at December 31, 2013.
NOW, savings and money market deposits increased $83.6 million or 36% to $316.8 million at December 31, 2013 from $233.2 million at December 31, 2012. A significant portion of this growth was from new municipal deposit relationships.
Certificates of deposits increased $18.9 million or 10.9% to $193.1 million at December 31, 2013 when compared to December 31, 2012 due to the Bank's competitive pricing in the local market.
Asset Quality & Capital
Non-performing loans, consisting of loans past due 90 days or more, decreased by $0.3 million or 19% to $1.2 million or 0.18% of total loans at December 31, 2013 from $1.5 million or 0.28% of total loans at December 31, 2012.
The Bank had $0.4 million in provisions for loan losses for the fourth quarter of 2013, a decrease of $0.4 million or 53% when compared to the same quarter in the prior year. The decline in the provision from the same quarter in the prior year was due to less loan origination volume.
The allowance for loan losses was $9.4 million or 1.42% of total loans at December 31, 2013, an increase of approximately $2.8 million from $6.6 million or 1.29% of total loans at December 31, 2012. The Bank had net charge-offs of $1.2 million in 2013 compared to 0.3 million in 2012.
The Bank continues to have significant capital strength with Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of 9.12%, 11.91% and 13.16%, respectively, at December 31, 2013.
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://www2.fdic.gov/idasp/main_bankfind.asp. The Bank filed its December 31, 2013 Call Report on January 30, 2014.
Certain items in the prior year's financial statements were reclassified to conform to the current presentation.
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 For The Twelve Months Ended
-------------------------- ---------------------------
December 31, December 31, December 31, December 31,
2013 2012 2013 2012
---- ---- ---- ----
Interest Income:
Commercial Loans $5,672,443 $4,503,513 $21,151,026 $16,426,575
Residential and Consumer Loans 1,738,300 1,626,252 6,752,885 6,526,396
Securities 609,843 541,214 2,285,048 2,340,440
Money Market Investments 20,428 23,148 53,846 51,626
------ ------ ------ ------
Total Interest Income 8,041,014 6,694,127 30,242,805 25,345,037
--------- --------- ---------- ----------
Interest Expense:
NOW, Savings & Money Market 328,531 229,149 930,361 903,032
Certificates of Deposit 608,736 649,781 2,370,573 2,922,078
Borrowed Funds 75,860 125,485 482,056 569,832
------ ------- ------- -------
Total Interest Expense 1,013,127 1,004,415 3,782,990 4,394,942
--------- --------- --------- ---------
Net Interest Income 7,027,887 5,689,712 26,459,815 20,950,095
Provision For Loan Losses 373,000 800,000 4,003,000 2,193,000
------- ------- --------- ---------
Net Interest Income After Provision for Loan Losses 6,654,887 4,889,712 22,456,815 18,757,095
--------- --------- ---------- ----------
Non-Interest Income:
Service Charges 331,778 189,246 1,147,897 630,406
Servicing Income & Loan Fees 167,308 99,005 540,435 408,035
Gain on Sale of Investments - 6,788 29,439 280,581
Gain on Sale of Loans 26,237 289,091 1,342,162 1,508,280
BOLI Income 151,206 196,659 605,703 721,767
------- ------- ------- -------
Total Non-Interest Income 676,529 780,789 3,665,636 3,549,069
------- ------- --------- ---------
Non-Interest Expenses:
Compensation and Benefits 2,836,429 2,380,164 10,688,891 9,152,494
Occupancy and Equipment 1,388,281 1,141,651 5,381,344 4,520,830
Advertising 49,321 59,419 223,032 218,213
Other Expenses 1,499,655 1,039,938 5,134,232 4,018,434
--------- --------- --------- ---------
Total Non-Interest Expenses 5,773,686 4,621,172 21,427,499 17,909,971
--------- --------- ---------- ----------
Income Before Income Taxes 1,557,730 1,049,329 4,694,952 4,396,193
Provision For Income Taxes 596,387 356,929 1,743,303 1,544,933
------- ------- --------- ---------
Net Income $961,343 $692,400 $2,951,649 $2,851,260
======== ======== ========== ==========
Earnings Per Share:
Basic $0.14 $0.10 $0.44 $0.43
Diluted $0.14 $0.10 $0.44 $0.43
Weighted Average Shares Outstanding - Basic 6,673,181 6,673,181 6,673,181 6,673,181
Weighted Average Shares Outstanding - Diluted 6,796,064 6,701,691 6,774,277 6,689,481
COMMUNITY NATIONAL BANK
STATEMENTS OF INCOME
Unaudited
For the Three Months Ended
--------------------------
December 31, September 30, June 30, December, 31
2013 2013 2013 2012
---- ---- ---- ----
Interest Income:
Commercial Loans $5,672,443 $5,350,569 $5,194,321 $4,503,513
Residential and Consumer Loans 1,738,300 1,695,999 1,670,716 1,626,252
Securities 609,843 583,095 551,025 541,214
Money Market Investments 20,428 12,880 10,823 23,148
------ ------ ------ ------
Total Interest Income 8,041,014 7,642,543 7,426,885 $6,694,127
--------- --------- --------- ----------
Interest Expense:
NOW, Savings & Money Market 328,531 221,026 175,984 229,149
Certificates of Deposit 608,736 592,162 592,243 649,781
Borrowed Funds 75,860 118,059 155,129 125,485
------ ------- ------- -------
Total Interest Expense 1,013,127 931,247 923,356 1,004,415
--------- ------- ------- ---------
Net Interest Income 7,027,887 6,711,296 6,503,529 5,689,712
Provision For Loan Losses 373,000 2,015,000 995,000 800,000
------- --------- ------- -------
Net Interest Income After Provision for Loan Losses 6,654,887 4,696,296 5,508,529 4,889,712
--------- --------- --------- ---------
Non-Interest Income:
Service Charges 331,778 301,609 267,690 189,246
Servicing Income & Loan Fees 167,308 143,632 134,972 99,005
Gain on Sale of Investments - - - 6,788
Gain on Sale of Loans 26,237 394,166 575,299 289,091
BOLI Income 151,206 148,241 148,137 196,659
------- ------- ------- -------
Total Non-Interest Income 676,529 987,648 1,126,098 780,789
------- ------- --------- -------
Non-Interest Expenses:
Compensation and Benefits 2,836,429 2,665,323 2,639,070 2,380,164
Occupancy and Equipment 1,388,281 1,350,272 1,340,234 1,141,651
Advertising 49,321 65,403 67,045 59,419
Other Expenses 1,499,655 1,297,440 1,263,153 1,039,938
--------- --------- --------- ---------
Total Non-Interest Expenses 5,773,686 5,378,438 5,309,502 4,621,172
--------- --------- --------- ---------
Income Before Income Taxes 1,557,730 305,506 1,325,125 1,049,329
Provision For Income Taxes 596,387 51,915 530,999 356,929
------- ------ ------- -------
Net Income $961,343 $253,591 $794,126 $692,400
======== ======== ======== ========
Earnings Per Share:
Basic $0.14 $0.04 $0.12 $0.10
Diluted $0.14 $0.04 $0.12 $0.10
Weighted Average Shares Outstanding - Basic 6,673,181 6,673,181 6,673,181 6,673,181
Weighted Average Shares Outstanding - Diluted 6,796,064 6,792,969 6,767,440 6,701,691
COMMUNITY NATIONAL BANK
STATEMENTS OF CONDITION
Unaudited
December 31, September 30, June 30, December, 31
2013 2013 2013 2012
---- ---- ---- ----
Assets:
Cash and Due From Banks $8,783,780 $8,323,492 $7,927,992 $13,453,651
Money Market Investments 2,102,723 26,344,244 18,966,565 7,391,467
Securities - Available-for-Sale 100,894,759 106,001,818 107,982,445 100,126,177
Securities - Held-to-Maturity 6,053,339 - - -
Restricted Stock 5,408,850 4,121,350 5,494,450 3,904,850
--------- --------- --------- ---------
Total Securities 112,356,948 110,123,168 113,476,895 104,031,027
----------- ----------- ----------- -----------
Commercial Loans 464,037,616 434,020,481 372,236,723 351,587,251
Residential & Consumer Loans 197,350,345 181,653,928 176,034,480 160,030,011
----------- ----------- ----------- -----------
Gross Loans Held-For-Investment 661,387,961 615,674,409 548,271,203 511,617,262
Less: Allowance For Loans Losses (9,383,788) (8,942,236) (8,228,359) (6,606,498)
---------- ---------- ---------- ----------
Net Loans Held-For-Investment 652,004,173 606,732,173 540,042,844 505,010,764
Premises and Equipment, net 11,116,968 10,927,997 9,590,787 8,709,570
Bank Owned Life Insurance ("BOLI") 20,099,560 19,948,355 19,800,850 19,493,857
Other Assets 12,118,062 14,930,676 8,246,406 7,693,014
---------- ---------- --------- ---------
Total Assets $818,582,214 $797,330,105 $718,052,339 $665,783,350
============ ============ ============ ============
Liabilities and Stockholders' Equity:
Deposits:
Demand $177,107,547 $181,740,742 $169,896,257 $155,877,268
NOW, Savings & Money Market 316,807,903 316,213,221 230,706,025 233,241,844
Certificates of Deposit 193,134,562 195,077,799 184,636,337 174,223,625
----------- ----------- ----------- -----------
Total Deposits 687,050,012 693,031,762 585,238,619 563,342,737
----------- ----------- ----------- -----------
FHLB Advances 54,921,135 26,438,035 56,951,949 $24,970,887
Accrued Expenses and Other Liabilities 4,985,420 6,550,574 4,170,988 5,666,170
--------- --------- --------- ---------
Total Liabilities 746,956,567 726,020,371 646,361,556 593,979,794
----------- ----------- ----------- -----------
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 34,362,152 34,295,244 34,228,336 34,101,246
Retained Earnings 6,406,941 5,445,598 5,192,007 3,455,292
Unrealized (Loss)/Gain on Securities (2,509,351) (1,797,013) (1,095,465) 881,113
---------- ---------- ---------- -------
Total Stockholders' Equity 71,625,647 71,309,734 71,690,783 71,803,556
---------- ---------- ---------- ----------
Total Liabilities and Stockholders' Equity $818,582,214 $797,330,105 $718,052,339 $665,783,350
============ ============ ============ ============
COMMUNITY NATIONAL BANK
SELECTED FINANCIAL DATA & BALANCE SHEET COMPONENTS
Unaudited
For The Three Months Ended For The Twelve Months Ended
-------------------------- ---------------------------
December 31, December 31, December 31, December 31,
2013 2012 2013 2012
---- ---- ---- ----
Per Share:
Net Income-Basic $0.14 $0.10 $0.44 $0.43
Average Shares Outstanding - Basic 6,673,181 6,673,181 6,673,181 6,673,181
Net Income - Diluted $0.14 $0.10 $0.44 $0.43
Average Shares Outstanding - Diluted 6,796,064 6,701,691 6,774,277 6,689,481
Tangible Book Value $10.73 $10.76 $10.73 $10.76
Performance:
Return on Average Assets 0.47% 0.42% 0.40% 0.46%
Return on Average Equity 5.35% 3.88% 4.09% 4.09%
Efficiency Ratio 74.94% 71.42% 71.13% 73.10%
Yield on Average Earning Assets 4.16% 4.30% 4.28% 4.37%
Cost on Average Interest Bearing Liabilities 0.74% 0.91% 0.76% 1.05%
Cost of Deposits 0.53% 0.63% 0.53% 0.75%
Net Interest Spread 3.42% 3.39% 3.52% 3.32%
Net Interest Margin 3.63% 3.65% 3.74% 3.62%
Quarter Ended
-------------
December 31, September 30, June 30, December 31,
2013 2013 2013 2012
---- ---- ---- ----
Capital Ratios:
Tangible Common Equity 8.75% 8.94% 9.98% 10.78%
Leverage 9.12% 9.62% 10.10% 10.35%
Tier 1 11.91% 12.39% 13.90% 13.85%
Total Risk Based 13.16% 13.64% 15.16% 15.10%
Asset Quality:
Allowance for Loan Losses to Total Loans 1.42% 1.45% 1.50% 1.29%
Allowance for Loan Losses to Non-Performing Loans 800% 577% 386% 456%
Non-Performing Loans to Total Loans 0.18% 0.25% 0.39% 0.28%
Non-Performing Assets to Total Assets 0.14% 0.19% 0.30% 0.22%
Annualized Quarterly Net Charge offs to Avg. Loans -0.04% 0.88% 0.00% 0.08%
Yield on Average Earning Assets 4.16% 4.25% 4.35% 4.30%
Cost on Average Interest Bearing Liabilities 0.74% 0.74% 0.78% 0.91%
Cost of Deposits 0.53% 0.51% 0.53% 0.63%
Net Interest Spread 3.42% 3.51% 3.57% 3.38%
Net Interest Margin 3.63% 3.73% 3.81% 3.65%
SOURCE Community National Bank
