Community National Bank Announces Earnings For Fourth Quarter Of 2012

    Community National Bank Announces Earnings For Fourth Quarter Of 2012

PR Newswire

GREAT NECK, N.Y., Jan. 23, 2013

GREAT NECK, N.Y., Jan. 23, 2013 /PRNewswire/ --Community National Bank
(SYMBOL: CBNY.OB) today announced fourth quarter and year-end results for
2012. Highlights for the quarter and year include:

  oNet income of $692 thousand or $0.10 per share for the fourth quarter of
    2012 compared to net income of $447 thousand or $0.07 per share for the
    same period in 2011.
  oNet interest income increased 25% or $1.1 million to $5.6 million for the
    quarter ended December 31, 2012 compared to $4.5 million for the quarter
    ended December 31, 2011.
  oReturn on average assets and equity of 0.42% and 3.88%, respectively, for
    the quarter ended December 31, 2012 compared to 0.35% and 2.62%,
    respectively, for the quarter ended December 31, 2011.
  oCommercial loans grew $101.1 million or 40% to $351.6 million at December
    31, 2012 when compared to December 31, 2011.
  oOn a linked quarter basis, commercial loans increased $52 million or 17%
    when compared to $299.6 million at September 30, 2012.
  oDeposits increased 32% or $138.1 million to $563.3 million at December 31,
    2012 compared to $425.2 million at December 31, 2011.
  oDemand deposits increased $61.3 million or 65% from December 31, 2011 to
    $155.9 million at December 31, 2012.
  oContinued strong asset quality with non-performing assets to total assets
    of 0.22%, which is well below peer group average.
  oSignificant capital strength with Tier 1 leverage, Tier 1 risk-based and
    total risk-based capital ratios of 10.35%, 13.85% and 15.10%,
    respectively, at December 31, 2012.

Stuart Lubow, Chairman, President and Chief Executive Officer of Community
National Bank, commented, "The Bank continued to make tremendous strides in
2012. The prior year's investments in talented lending and retail personnel,
our branch network and operational infrastructure have given us strong
momentum to meet our strategic goals of becoming Long Island's premier
community bank. This momentum resulted in commercial loan growth of $52
million for the fourth quarter and over $100 million for the year. The
remarkable growth resulted from our continued focus on building relationships
with small and medium sized businesses. These relationships helped increase
demand deposits to $155.9 million at December 31, 2012, an increase of $61.3
million or 65% increase compared to prior year end. In addition, the growth
in commercial loans increased net interest income by $4 million and improved
the net interest margin during the year. These banking relationships have
increased core non-interest income. Core non-interest income net of loan and
securities gains, increased $0.4 million or 30% to $1.8 million during 2012."

(Photo: http://photos.prnewswire.com/prnh/20130123/NY46754 )

Earnings and Net Interest Income

Net income for the quarter ended December 31, 2012 was $692 thousand or $0.10
basic earnings per share compared to net income of $447 thousand or $0.07
basic earnings per share for the same period in 2011, an increase of $245
thousand or 55%. Net income for the twelve months ended December 31, 2012 was
$2.9 million or $0.43 basic earnings per share compared to net income of $2.3
million or $0.35 basic earnings per share for the same period in 2011, an
increase of $0.6 million or 23%.

The increase in net income for the three and twelve months ended December 31,
2012 was attributable to higher net interest income from commercial loan
growth and lower provision for loan losses, which were partially offset by
higher non-interest expenses associated with two new branch locations and
increased personnel for lending, operations and compliance.

On a linked quarter basis, net income for the fourth quarter of 2012 decreased
$267 thousand or 28% when compared to the third quarter of 2012. While net
interest income increased $0.3 million during the quarter, it was offset by
higher provision for loan losses and lower gains from the sale of SBA loans
and securities. A significant portion of the commercial loans were originated
at the end of the quarter. This resulted in less interest income to offset the
general valuation reserves established on the new commercial loans.

Net interest income for the quarter ended December 31, 2012 increased $1.1
million or 25% to $5.6 million compared to $4.5 million for the quarter ended
December 31, 2011. The net interest margin decreased by ten basis points to
3.60% for the fourth quarter of 2012 compared to 3.70% for the same period in
2011. Net interest income for the twelve months ended December 31, 2012
increased $4.0 million or 24% to $20.9 million compared to $16.9 million for
the twelve months ended December 31, 2011. The net interest margin increased
by two basis points to 3.60% for the twelve months ended December 31, 2012
from 3.58% for the prior year period.

The increase in net interest income for both the quarter and twelve months
ended December 31, 2012 was primarily due to (1) growth in our commercial loan
portfolio; (2) higher non-interest bearing demand deposits; and (3) a
continued decline in overall cost of funds on deposits. The decrease in net
interest margin for the quarter ended December 31, 2012 when compared to the
prior year's quarter primarily resulted from lower yields on loans and
mortgage backed securities from increased prepayments, loan refinancing, and
competition.

Non-Interest Income

Non-interest income increased approximately $0.2 million or 26% to $0.9
million for the quarter ended December 31, 2012 compared to $0.7 million for
the prior year quarter. The increase in non-interest income for the quarter
was due primarily to higher service charges, servicing income, prepayment fees
and BOLI income, which were partially offset by lower gains on the sale of SBA
loans.

Non-interest income for the twelve months ended December 31, 2012 decreased
$0.7 million or 17% to $3.6 million compared to $4.3 million for the same
period in 2011. The decrease for the twelve months ended December 31, 2012
was primarily the result of a $1.3 million decline in gains on the sale of SBA
loans. The SBA loan volume decreased due to a change in the SBA guarantee
percentage from 90% to 75%. This was offset by higher non-interest income for
service charges, servicing and other income as well as BOLI income for the
twelve months ended December 31, 2012.

Non-Interest Expense

Non-interest expense increased $0.8 million or 22% to $4.6 million for the
quarter ended December 31, 2012 from $3.8 million for the same period in
2011. The increase was primarily attributable to higher compensation
associated with the opening of our Manhattan branch location and the addition
of senior personnel for operations and human resources, the hiring of a
municipal banker and higher occupancy costs associated with the opening of the
Manhattan branch.

Balance Sheet and Asset Quality

Total assets grew to $665.8 million at December 31, 2012, a 25% increase over
total assets of $531.8 million at December 31, 2011. Total loans increased
$115.9 million or 29% to $511.6 million at December 31, 2012 when compared to
December 31, 2011. The commercial loan portfolio increased $101.1 million or
40% when compared to December 31, 2011. The residential loan portfolio
increased $14.7 million or 10% when compared to December 31, 2011. The growth
in the loan portfolio was funded by deposits from our new branch locations and
municipal relationships as well as the continued development of core banking
relationships, which were evident by the $61.3 million or 65% increase in
demand deposits since December 31, 2011.

Our asset quality remains strong and a core focus during these challenging
economic times. Non-performing loans, including loans past due 90 days or
more, increased by $0.2 million or 14% to $1.5 million or 0.28% of total loans
at December 31, 2012 from $1.3 million or 0.32% of total loans at December 31,
2011. Despite the slight increase in non-performing loans in dollars, the
percentage of non-performing loans to total loans declined and remains at a
low level compared to our peers.

The Bank had $0.8 million in provision for loan losses for the fourth quarter
of 2012, an increase of $15 thousand or 1.9% when compared to the prior year
quarter. The allowance for loan losses was $6.6 million or 1.29% of total
loans at December 31, 2012, an increase of approximately $1.8 million or 39%
from $4.8 million or 1.20% of total loans at December 31, 2011. The increase
in the allowance for loan losses was due to general valuation reserves
associated with the significant commercial loan growth throughout the period.
The Bank sold its one foreclosed commercial property at a price that
approximated the carrying value of $0.5 million during the fourth quarter.

"While our commercial loan pipeline remains robust, we remain cognizant of the
many challenges that our industry faces. The duration of this historical low
interest rate environment and unprecedented quantitative easing by the Federal
Reserve Bank has reduced yields on interest earning assets. Over the past
several years, the industry compensated for these lower asset yields by
decreasing rates on customer accounts. If the Federal Reserve Bank continues
its current policy, the ability for banks to maintain margins will become
increasingly more difficult. In addition, the continued uncertainty with
regard to debt and deficit reductions and the local impact from Hurricane
Sandy are concerns management evaluates on a daily basis. We have very strict
underwriting standards; our loan portfolio is mostly adjustable in nature; and
our investment portfolio is comprised of short-term U.S agency mortgage backed
securities. We constantly monitor the balance sheet mix for an eventual rise
in interest rates." commented Mr. Lubow.

Deposits

Total deposits increased $138.1 million or 32% to $563.3 million at December
31, 2012 compared to $425.2 million at December 31, 2011. Demand deposits
grew $61.3 million or 65% to $155.9 million at December 31, 2012 when compared
to December 31, 2011.

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 expects to file its
December 31, 2012 Call Report on or around January 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 County. 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,
                        2012          2011         2012          2011
Interest Income:
Commercial Loans        $4,416,729    $3,444,917   $16,339,791   $12,591,969
Residential and         1,626,252     1,674,388    6,526,396     6,730,776
Consumer Loans
Securities              541,214       563,730      2,340,440     2,511,308
Money Market            23,148        9,258        51,626        33,780
Investments
 Total Interest       6,607,343     5,692,293    25,258,253    21,867,833
Income
Interest Expense:
NOW, Savings & Money    229,149       176,588      903,032       599,564
Market
Certificates of Deposit 649,781       865,295      2,922,078     3,716,771
Borrowed Funds          125,485       154,795      569,832       698,441
 Total Interest       1,004,415     1,196,678    4,394,942     5,014,776
Expense
 Net Interest      5,602,928     4,495,615    20,863,311    16,853,057
Income
Provision For Loan      800,000       785,000      2,193,000     2,628,000
Losses
Net Interest Income
After Provision for     4,802,928     3,710,615    18,670,311    14,225,057
Loan Losses
Non-Interest Income:
Service Charges         189,246       116,268      630,406       468,091
Loan Fees & Servicing   185,789       84,421       494,819       336,237
Income
Gain on Sale of         6,788         -            280,581       130,829
Investments
Gain on Sale of Loans   289,091       329,743      1,508,280     2,832,716
BOLI Income             196,659       160,155      721,767       612,085
 Total Non-Interest   867,573       690,587      3,635,853     4,379,958
Income
Non-Interest Expense:
Compensation and        2,380,164     1,933,852    9,152,494     7,407,481
Benefits
Occupancy and Equipment 1,141,651     1,029,566    4,520,830     3,899,986
Advertising             59,419        62,139       218,213       186,905
Other Expenses          1,039,938     772,346      4,018,434     3,566,102
 Total Non-Interest   4,621,172     3,797,903    17,909,971    15,060,474
Expense
Income Before Income    1,049,329     603,299      4,396,193     3,544,541
Taxes
Provision For Income    356,929       156,000      1,544,933     1,228,600
Taxes
 Net Income        $692,400      $447,299     $2,851,260    $2,315,941
Earnings Per Share:
 Basic                $0.10         $0.07        $0.43         $0.35
 Diluted              $0.10         $0.07        $0.43         $0.35
 Weighted Average
Shares Outstanding –    6,673,181     6,673,181    6,673,181     6,673,181
Basic
 Weighted Average
Shares Outstanding –    6,701,691     6,686,691    6,689,481     6,698,905
Diluted







COMMUNITY NATIONAL BANK
STATEMENTS OF INCOME
Unaudited
                                   For the Three Months Ended
                            December 31, September 30, June 30,   December 31,
                            2012         2012          2012       2011
Interest Income:
Commercial Loans            $4,416,729   $4,198,087    $3,984,291 $3,444,917
Residential and Consumer    1,626,252    1,631,210     1,640,173  1,674,388
Loans
Securities                  541,214      587,751       626,625    563,730
Money Market Investments    23.148       11,183        10,216     9,258
 Total Interest Income    6,607,343    6,428,231     6,261,305  5,692,293
Interest Expense:
NOW, Savings & Money Market 229,149      234,914       235,288    176,588
Certificates of Deposit     649,781      707,539       754,517    865,295
Borrowed Funds              125,485      138,624       149,253    154,795
 Total Interest Expense   1,004,415    1,081,077     1,139,058  1,196,678
 Net Interest Income   5,602,928    5,347,154     5,122,247  4,495,615
Provision For Loan Losses   800,000      475,000       475,000    785,000
Net Interest Income After   4,802,928    4,872,154     4,647,247  3,710,615
Provision for Loan Losses
Non-Interest Income:
Service Charges             189,246      140,704       158,438    116,268
Loan Fees & Servicing       185,789      136,067       79,510     84,421
Income
Gain on Sale of Investments 6,788        141,217       -          -
Gain on Sale of Loans       289,091      656,256       442,252    329,743
BOLI Income                 196,659      177,812       186,034    160,155
 Total Non-Interest       867,573      1,252,056     866,234    690,587
Income
Non-Interest Expense:
Compensation and Benefits   2,380,164    2,355,625     2,258,229  1,933,852
Occupancy and Equipment     1,141,651    1,168,866     1,139,060  1,029,566
Advertising                 59,419       59,409        52,360     62,139
Other Expenses              1,039,938    1,039,594     1,018,972  772,346
 Total Non-Interest       4,621,172    4,623,494     4,468,621  3,797,903
Expense
Income Before Income Taxes  1,049,329    1,500,716     1,044,860  603,299
Provision For Income Taxes  356,929      541,050       372,754    156,000
 Net Income            $692,400     $959,666      $672,106   $447,299
Earnings Per Share:
 Basic                    $0.10        $0.14         $0.10      $0.07
 Diluted                  $0.10        $0.14         $0.10      $0.07
 Weighted Average Shares  6,673,181    6,673,181     6,673,181  6,673,181
Outstanding – Basic
 Weighted Average Shares  6,701,691    6,697,675     6,700,265  6,686,691
Outstanding – Diluted







COMMUNITY NATIONAL BANK
STATEMENTS OF CONDITION
Unaudited
                          December 31, September 30, June 30,     December 31,
                          2012         2012          2012         2011
Assets:
Cash and Due From Banks   $13,453,651  $7,666,354    $7,980,739   $6,758,552
Money Market Investments  7,391,467    31,922,204    11,756,613   6,703,973
Securities -              100,126,177  109,974,255   116,969,332  90,516,272
Available-for-Sale
Restricted Stock          3,904,850    3,922,650     4,080,250    4,279,500
 Total Securities       104,031,027  113,896,905   121,049,582  94,795,772
Loans Held-For-Sale       -            500,000       400,000      -
Commercial Loans          351,587,251  299,607,536   290,558,824  250,444,848
Residential & Consumer    160,030,011  158,791,493   154,910,682  145,310,058
Loans
Gross Loans               511,617,262  458,399,029   445,469,506  395,754,906
Held-For-Investment
Less: Allowance For      (6,606,498)  (5,904,167)   (5,396,607)  (4,759,124)
Loans Losses
 Net Loans              505,010,764  452,494,862   440,072,899  390,995,782
Held-For-Investment
Premises and Equipment,   8,709,570    8,869,722     9,087,941    8,722,455
net
Bank Owned Life Insurance 19,493,857   19,297,199    19,119,387   15,872,091
("BOLI")
Other Assets              7,693,014    9,280,117     9,281,539    7,959,080
 Total Assets           $665,783,350 $643,927,363  $618,748,700 $531,807,705
Liabilities and
Stockholders' Equity:
Deposits:
Demand                    $155,877,268 $136,410,679  $120,182,668 $94,531,309
NOW, Savings & Money      233,241,844  224,776,773   202,311,136  134,268,269
Market
Certificates of Deposit   174,223,625  181,175,999   189,446,881  196,452,756
 Total Deposits         563,342,737  542,363,451   511,940,685  425,252,334
FHLB Advances             24,970,887   25,475,945    33,978,085   34,973,678
Accrued Expenses and      5,666,170    4,983,042     2,917,289    3,198,516
Other Liabilities
 Total Liabilities      593,979,794  572,822,438   548,836,059  463,424,528
Stockholders' Equity:
Common Stock, par value
$5.00; authorized
10,000,000 shares;       33,365,905   33,365,905    33,365,905   33,365,905
issued 6,673,181 shares
Additional Paid in        34,101,246   34,037,538    33,968,660   33,872,063
Capital
Retained Earnings         3,455,291    2,762,891     1,803,225    604,031
Unrealized Gain on        881,114      938,591       774,851      541,178
Securities
 Total Stockholders' 71,803,556   71,104,925    69,912,641   68,383,177
Equity
 Total Liabilities   $665,783,350 $643,927,363  $618,748,700 $531,807,705
and Stockholders' Equity







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,
                        2012          2011         2012          2011
Per Share:
Net Income-Basic        $0.10         $0.07        $0.43         $0.35
Average Shares          6,673,181     6,673,181    6,673,181     6,673,181
Outstanding – Basic
Net Income – Diluted    $0.10         $0.07        $0.43         $0.35
Average Shares          6,701,691     6,686,691    6,689,481     6,698,905
Outstanding – Diluted
Book Value              $10.76        $10.25       $10.76        $10.25
Performance:
Return on Average       0.42%         0.35%        0.46%         0.46%
Assets
Return on Average       3.88%         2.62%        4.09%         3.49%
Equity
Efficiency Ratio        71.42%        73.23%       73.10%        70.93%
Yield on Average        4.24%         4.69%        4.36%         4.65%
Earning Assets
Cost on Average
Interest Bearing        0.91%         1.36%        1.05%         1.44%
Liabilities
Cost of Deposits        0.63%         1.00%        0.75%         1.09%
Net Interest Spread     3.33%         3.33%        3.31%         3.21%
Net Interest Margin     3.60%         3.70%        3.60%         3.58%
                        December 31,   September June 30,       December 31,
                                      30,
                        2012          2012         2012           2011
Risk Based Capital:
Leverage Ratio          10.35%        10.70%       11.00%        12.75%
Tier 1                  13.85%        15.28%       15.53%        17.50%
Total Risk Based        15.10%        16.53%       16.78%        18.75%
Asset Quality:
Allowance for Loan      1.29%         1.29%        1.21%         1.20%
Losses to Total Loans
Allowance for Loan
Losses to               456%          406%         732%          374%
Non-Performing Loans
Non-Performing Loans to 0.28%         0.32%        0.17%         0.32%
Total Loans
Non-Performing Assets   0.22%         0.31%        0.21%         0.36%
to Total Assets
Annualized Quarterly
Net Charge offs to Avg. 0.08%         -0.03%       0.26%         0.37%
Loans



SOURCE Community National Bank

Contact: Jay McConie, Senior Vice President, Chief Financial Officer,
+1-516-498-9111 Ext 139
 
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