Community National Bank Announces Earnings For Second Quarter Of 2013

    Community National Bank Announces Earnings For Second Quarter Of 2013

PR Newswire

GREAT NECK, N.Y., July 22, 2013

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:

  oNet 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.
  oNet 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.
  oNet 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.
  oCommercial loans grew 28% or $81.7 million to $372.2 million at June 30,
    2013 when compared to June 30, 2012.
  oDemand deposits increased $49.7 million or 41% to $169.9 million at June
    30, 2013 when compared to June 30, 2012.
  oStrong asset quality with non-performing assets to total assets of 0.30%,
    which is well below peer group average.
  oReturn 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   1,670,716     1,640,173    3,318,586    3,268,934
Loans
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       175,984       235,288      380,804      438,969
Market
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  5,508,529     4,647,247    11,105,632   8,995,229
Provision for Loan Losses
Non-Interest Income:
Service Charges            267,690       158,438      514,510      300,456
Servicing Income & Loan    134,972       79,510       229,495      172,963
Fees
Gain on Sale of            -             -            29,439       132,576
Investments
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      1,126,098     866,234      2,001,459    1,516,224
Income
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      5,309,502     4,468,621    10,275,375   8,665,305
Expense
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 6,673,181     6,673,181    6,673,181    6,673,181
Outstanding – Basic
 Weighted Average Shares 6,767,440     6,700,265    6,756,881    6,692,062
Outstanding – Diluted



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      1,670,716  1,647,870  1,626,252    1,631,210
Loans
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     5,508,529  5,597,103  4,889,712    4,872,154
Provision for Loan Losses
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    6,673,181  6,673,181  6,673,181    6,673,181
Outstanding – Basic
 Weighted Average Shares    6,767,440  6,745,079  6,701,691    6,697,975
Outstanding – Diluted



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 -               107,982,445  104,853,026  100,126,177  116,969,332
Available-for-Sale
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     176,034,480  167,837,569  160,030,011  154,910,682
Loans
Gross Loans                548,271,203  542,609,689  511,617,262  445,469,506
Held-For-Investment
Less: Allowance For Loans (8,228,359)  (7,227,875)  (6,606,498)  (5,396,607)
Losses
 Net Loans               540,042,844  535,381,814  505,010,764  440,072,899
Held-For-Investment
Premises and Equipment,    9,590,787    8,614,816    8,709,570    9,087,941
net
Bank Owned Life Insurance  19,800,850   19,651,976   19,493,857   19,119,387
("BOLI")
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       230,706,025  254,477,223  233,241,844  202,311,136
Market
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 4,170,988    4,731,800    5,666,170    2,917,289
Liabilities
 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 33,365,905   33,365,905   33,365,905   33,365,905
6,673,181 shares
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  (1,095,465)  468,582      881,113      774,850
Securities
 Total Stockholders'  71,690,783   72,396,486   71,803,556   69,912,641
Equity
 Total Liabilities    $718,052,339 $705,543,506 $665,783,350 $618,748,700
and Stockholders' Equity



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            6,673,181     6,673,181     6,673,181      6,673,181
Outstanding – Basic
Net Income – Diluted      $0.12         $0.10         $0.26          $0.18
Average Shares            6,767,440     6,700,265     6,756,881      6,692,062
Outstanding – Diluted
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  4.35%         4.37%         4.36%          4.47%
Assets
Cost on Average Interest  0.78%         1.08%         0.79%          1.16%
Bearing Liabilities
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 1.50%         1.33%         1.29%          1.21%
to Total Loans
Allowance for Loan Losses 386%          706%          456%           732%
to Non-Performing Loans
Non-Performing Loans to   0.39%         0.19%         0.28%          0.17%
Total Loans
Non-Performing Assets to  0.30%         0.15%         0.22%          0.21%
Total Assets
Annualized Quarterly Net  0.00%         0.00%         0.08%          0.26%
Charge offs to Avg. Loans



SOURCE Community National Bank

Contact: Jay McConie, Senior Vice President, Chief Financial Officer, (516)
498-9111 Ext 1139
 
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