Community National Bank Reports Fourth Quarter And Year-End Results For 2013

 Community National Bank Reports Fourth Quarter And Year-End Results For 2013

PR Newswire

MELVILLE, N.Y., Jan. 31, 2014

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:

  oNet 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.
  oNet 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.
  oReturn 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.
  oCommercial 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.
  oService 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.
  oSolid 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         1,738,300     1,626,252    6,752,885     6,526,396
Consumer Loans
Securities              609,843       541,214      2,285,048     2,340,440
Money Market            20,428        23,148       53,846        51,626
Investments
 Total Interest       8,041,014     6,694,127    30,242,805    25,345,037
Income
Interest Expense:
NOW, Savings & Money    328,531       229,149      930,361       903,032
Market
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       1,013,127     1,004,415    3,782,990     4,394,942
Expense
 Net Interest      7,027,887     5,689,712    26,459,815    20,950,095
Income
Provision For Loan      373,000       800,000      4,003,000     2,193,000
Losses
Net Interest Income
After Provision for     6,654,887     4,889,712    22,456,815    18,757,095
Loan Losses
Non-Interest Income:
Service Charges         331,778       189,246      1,147,897     630,406
Servicing Income & Loan 167,308       99,005       540,435       408,035
Fees
Gain on Sale of         -             6,788        29,439        280,581
Investments
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   676,529       780,789      3,665,636     3,549,069
Income
Non-Interest Expenses:
Compensation and        2,836,429     2,380,164    10,688,891    9,152,494
Benefits
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   5,773,686     4,621,172    21,427,499    17,909,971
Expenses
Income Before Income    1,557,730     1,049,329    4,694,952     4,396,193
Taxes
Provision For Income    596,387       356,929      1,743,303     1,544,933
Taxes
 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 –    6,673,181     6,673,181    6,673,181     6,673,181
Basic
 Weighted Average
Shares Outstanding –    6,796,064     6,701,691    6,774,277     6,689,481
Diluted





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    1,738,300    1,695,999     1,670,716  1,626,252
Loans
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   6,654,887    4,696,296     5,508,529  4,889,712
Provision for Loan Losses
Non-Interest Income:
Service Charges             331,778      301,609       267,690    189,246
Servicing Income & Loan     167,308      143,632       134,972    99,005
Fees
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       676,529      987,648       1,126,098  780,789
Income
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       5,773,686    5,378,438     5,309,502  4,621,172
Expenses
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  6,673,181    6,673,181     6,673,181  6,673,181
Outstanding – Basic
 Weighted Average Shares  6,796,064    6,792,969     6,767,440  6,701,691
Outstanding – Diluted





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 -              100,894,759  106,001,818   107,982,445  100,126,177
Available-for-Sale
Securities –              6,053,339    -             -            -
Held-to-Maturity
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    197,350,345  181,653,928   176,034,480  160,030,011
Loans
Gross Loans               661,387,961  615,674,409   548,271,203  511,617,262
Held-For-Investment
Less: Allowance For      (9,383,788)  (8,942,236)   (8,228,359)  (6,606,498)
Loans Losses
 Net Loans              652,004,173  606,732,173   540,042,844  505,010,764
Held-For-Investment
Premises and Equipment,   11,116,968   10,927,997    9,590,787    8,709,570
net
Bank Owned Life Insurance 20,099,560   19,948,355    19,800,850   19,493,857
("BOLI")
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      316,807,903  316,213,221   230,706,025  233,241,844
Market
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      4,985,420    6,550,574     4,170,988    5,666,170
Other Liabilities
 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;       33,365,905   33,365,905    33,365,905   33,365,905
issued 6,673,181 shares
Additional                34,362,152   34,295,244    34,228,336   34,101,246
Paid-in-Capital
Retained Earnings         6,406,941    5,445,598     5,192,007    3,455,292
Unrealized (Loss)/Gain on (2,509,351)  (1,797,013)   (1,095,465)  881,113
Securities
 Total Stockholders' 71,625,647   71,309,734    71,690,783   71,803,556
Equity
 Total Liabilities   $818,582,214 $797,330,105  $718,052,339 $665,783,350
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,
                        2013         2012          2013          2012
Per Share:
Net Income-Basic        $0.14        $0.10         $0.44         $0.43
Average Shares          6,673,181    6,673,181     6,673,181     6,673,181
Outstanding – Basic
Net Income – Diluted    $0.14        $0.10         $0.44         $0.43
Average Shares          6,796,064    6,701,691     6,774,277     6,689,481
Outstanding – Diluted
Tangible Book Value     $10.73       $10.76        $10.73        $10.76
Performance:
Return on Average       0.47%        0.42%         0.40%         0.46%
Assets
Return on Average       5.35%        3.88%         4.09%         4.09%
Equity
Efficiency Ratio        74.94%       71.42%        71.13%        73.10%
Yield on Average        4.16%        4.30%         4.28%         4.37%
Earning Assets
Cost on Average
Interest Bearing        0.74%        0.91%         0.76%         1.05%
Liabilities
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      1.42%        1.45%         1.50%         1.29%
Losses to Total Loans
Allowance for Loan
Losses to               800%         577%          386%          456%
Non-Performing Loans
Non-Performing Loans to 0.18%        0.25%         0.39%         0.28%
Total Loans
Non-Performing Assets   0.14%        0.19%         0.30%         0.22%
to Total Assets
Annualized Quarterly
Net Charge offs to Avg. -0.04%       0.88%         0.00%         0.08%
Loans
Yield on Average        4.16%        4.25%         4.35%         4.30%
Earning Assets
Cost on Average
Interest Bearing        0.74%        0.74%         0.78%         0.91%
Liabilities
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

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