Community National Bank Announces Earnings For First Quarter Of 2014

     Community National Bank Announces Earnings For First Quarter Of 2014

PR Newswire

MELVILLE, N.Y., April 16, 2014

MELVILLE, N.Y., April 16, 2014 /PRNewswire/ --Community National Bank (OTC:
CBNY) today announced first quarter results for 2014. Highlights for the
quarter include:

  oNet income of $1.1 million or $0.17 per share for the first quarter of
    2014 compared to net income of $943 thousand or $0.14 per share for the
    same period in 2013.
  oNet interest income increased 23% or $1.4 million to $7.6 million for the
    quarter ended March 31, 2014 compared to $6.2 million for the quarter
    ended March 31, 2013.
  oReturn on average assets and equity of 0.54% and 6.08%, respectively, for
    the quarter ended March 31, 2014 compared to 0.55% and 5.24%,
    respectively, for the quarter ended March 31, 2013.
  oCommercial loans grew $96.6 million or 26% to $471.4 million at March 31,
    2014 when compared to March 31, 2013.
  oDeposits increased $120.4 million or 20% to $708.4 million at March 31,
    2014 compared to $588.0 million at March 31, 2013.
  oDemand deposits grew $36.3 million or 22% to $198.3 million at March 31,
    2014 compared to $162.0 million at March 31, 2013.

Earnings and Net Interest Income

Net income for the quarter ended March 31, 2014 was $1.1 million or $0.17
basic earnings per share compared to net income of $943 thousand or $0.14
basic earnings per share for the same period in 2013, an increase of $162
thousand or 17%. The increase in net income was due to higher net interest
income, which resulted from substantial loan growth, increased fees from
service charges and gains from the sale of SBA loans.

For the quarter ended March 31, 2014, net interest income increased $1.4
million or 23% to $7.6 million compared to $6.2 million for the quarter ended
March 31, 2013. The net interest margin also increased during this same period
by 3 basis points to 3.84% from 3.81% for the quarter ended March 31, 2013.
The increase in net interest income and margin was primarily due to (1) growth
in the commercial and residential loan portfolios; (2) an increase in
non-interest bearing demand deposits; (3) a 13 basis point decline in the
yield on interest bearing liabilities; and (4) additional commercial loan
interest income of $385 thousand from loan prepayment penalties during the
first quarter of 2014.

Non-Interest Income

Non-interest income increased $385 thousand or 44% to $1.2 million for the
quarter ended March 31, 2014 compared to $875 thousand for the prior year
period. The increase in non-interest income was attributable to higher gains
from the sale of SBA loans and increased fees from service charges.

Non-Interest Expense

Non-interest expense increased $1.1 million or 23% to $6.1 million for the
quarter ended March 31, 2014 compared to $5.0 million for the same period in
2013. The increase was attributable to higher compensation and occupancy costs
associated with (1) our new Hewlett branch location, which opened in September
2013; (2) the addition of a new Senior Credit Officer and other personnel in
loan administration and bank operations; and (3) increased depreciation
expense for our new corporate headquarters and Hewlett Branch. Other expenses
increased approximately $300 thousand or 28% to $1.4 million for the quarter
ended March 31, 2014 compared to $1.1 million during the same period in 2013.
The increase was attributable to increased data and item processing volume,
consulting fees for regulatory compliance and legal fees associated with loan
collections and general corporate matters.

Balance Sheet

Total assets grew to $833.0 million at March 31, 2014, an increase of $127.5
million or 18% when compared to total assets of $705.5 million at March 31,
2013. Total loans increased $127.7 million or 24% to $670.3 million at March
31, 2014 when compared to March 31, 2013. The commercial loan portfolio
increased $96.6 million or 26% when compared to March 31, 2013, and the
residential loan portfolio increased $31.1 million or 19% when compared to
March 31, 2013. Loans were funded by deposit growth from our new Hewlett
branch location and increased business demand deposits and municipal deposits.

Total deposits increased $120.4 million or 20% to $708.4 million at March 31,
2014 from $588.0 million at March 31, 2013. Demand deposits grew $36.3 million
or 22% to $198.3 million at March 31, 2014 when compared to March 31, 2013.
The increase was due primarily to additional commercial business
relationships. Demand deposits represented 28% of total deposits at March 31,
2014. NOW, savings and money market deposits increased $69.1 million or 27%
to $323.5 million at March 31, 2014 from $254.4 million at March 31, 2013. A
significant portion of this growth was from new municipal deposit
relationships.

Asset Quality & Capital

Non-performing loans, consisting of loans past due 90 days or more, was $1.3
million or 0.20% of total loans at March 31, 2014 compared to $1.0 million or
0.19% of total loans at March 31, 2013. The Bank recorded $0.9 million in
provision for loan losses during the first quarter of 2014 compared to $0.6
million for the first quarter of 2013. The higher provision charge was mostly
attributable to one commercial and industrial loan being adversely classified
during the first quarter of 2014. Payments on this loan are current, and
management continues to closely monitor the relationship. The Bank did not own
any foreclosed properties at March 31, 2014 and 2013, respectively.

The allowance for loan losses was $10.3 million or 1.54% of total loans at
March 31, 2014, an increase of $3.1 million from $7.2 million or 1.33% of
total loans at March 31, 2013.

The Bank continues to have significant capital strength with Tier 1 leverage,
Tier 1 risk-based and total risk-based capital ratios of 9.13%, 12.04% and
13.29%, respectively, at March 31, 2014.

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: www.fdic.gov. The Bank expects to
file its March 31, 2014 Call Report on or around April 30, 2014.

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
                                            March 31,  December 31, March 31,
                                            2014       2013         2013
Interest Income:
Commercial Loans                            $6,190,101 $5,672,443   $4,933,693
Residential and Consumer Loans              1,743,561  1,738,300    1,647,870
Securities                                  632,347    609,843      541,085
Money Market Investments                    4,067      20,428       9,715
 Total Interest Income                    8,570,076  8,041,014    7,132,363
Interest Expense:
NOW, Savings & Money Market                 295,813    328,531      204,820
Certificates of Deposit                     565,524    608,736      577,432
Borrowed Funds                              86,393     75,860       133,008
 Total Interest Expense                   947,730    1,013,127    915,260
 Net Interest Income                   7,622,346  7,027,887    6,217,103
Provision For Loan Losses                   975,000    373,000      620,000
Net Interest Income After Provision for     6,647,346  6,654,887    5,597,103
Loan Losses
Non-Interest Income:
Service Charges                             324,075    331,778      246,820
Servicing Income & Loan Fees                101,375    167,308      94,523
Gain on Sale of Investments                 20,432     -            29,439
Gain on Sale of Loans                       673,026    26,237       346,460
BOLI Income                                 141,925    151,206      158,119
 Total Non-Interest Income                1,260,833  676,529      875,361
Non-Interest Expense:
Compensation and Benefits                   3,142,452  2,836,429    2,548,069
Occupancy and Equipment                     1,521,403  1,388,281    1,302,557
Advertising                                 51,043     49,321       41,263
Other Expenses                              1,380,646  1,499,655    1,073,984
 Total Non-Interest Expense               6,095,544  5,773,686    4,965,873
Income Before Income Taxes                  1,812,635  1,557,730    1,506,591
Provision For Income Taxes                  708,000    596,387      564,002
 Net Income                            $1,104,635 $961,343     $942,589
Earnings Per Share:
 Basic                                    $0.17      $0.14        $0.14
 Diluted                                  $0.16      $0.14        $0.14
 Weighted Average Shares Outstanding -    6,673,181  6,673,181    6,673,181
Basic
 Weighted Average Shares Outstanding -    6,813,748  6,796,064    6,745,079
Diluted





COMMUNITY NATIONAL BANK

STATEMENTS OF CONDITION

(Unaudited)
                                        March 31,    December 31, March 31,
Assets:                                 2014         2013         2013
Cash and Due From Banks                 $4,819,820   $8,783,780   $8,223,778
Money Market Investments                15,953,371   2,102,723    15,708,308
Securities - Available-for-Sale         98,770,601   100,894,759  104,853,026
Securities – Held-to-Maturity           5,824,335    6,053,339    -
Restricted Stock                        4,899,450    5,408,850    4,603,950
 Total Securities                     109,494,386  112,356,948  109,456,976
Commercial Loans                        471,362,962  464,037,616  374,772,120
Residential & Consumer Loans            198,968,236  197,350,345  167,837,569
Gross Loans Held-For-Investment         670,331,198  661,387,961  542,609,689
Less: Allowance For Loans Losses       (10,355,770) (9,383,788)  (7,227,875)
 Net Loans Held-For-Investment        659,975,428  652,004,173  535,381,814
Premises and Equipment, net             10,845,303   11,116,968   8,614,816
Bank Owned Life Insurance ("BOLI")      20,241,485   20,099,560   19,651,976
Other Assets                            11,732,819   12,118,062   8,505,838
 Total Assets                         $833,062,612 $818,582,214 $705,543,506
Liabilities and Stockholders' Equity:
Deposits:
Demand                                  $198,252,200 $177,107,547 $161,971,063
NOW, Savings & Money Market             323,544,027  316,807,903  254,477,223
Certificates of Deposit                 186,568,373  193,134,562  171,504,040
 Total Deposits                       708,364,600  687,050,012  587,952,326
FHLB Advances                           43,601,230   54,921,135   40,462,894
Accrued Expenses and Other Liabilities  7,773,533    4,985,420    4,731,800
 Total Liabilities                    759,739,363  746,956,567  633,147,020
Stockholders' Equity:
Common Stock, par value $5.00;
authorized
10,000,000 shares; issued 6,673,181    33,365,905   33,365,905   33,365,905
shares
Additional Paid-in-Capital              34,428,937   34,362,152   34,164,118
Retained Earnings                       7,511,576    6,406,941    4,397,881
Unrealized (Loss)/Gain on Securities    (1,983,169)  (2,509,351)  468,582
 Total Stockholders' Equity        73,323,249   71,625,647   72,396,486
 Total Liabilities and             $833,062,612 $818,582,214 $705,543,506
Stockholders' Equity





COMMUNITY NATIONAL BANK

SELECTED FINANCIAL DATA AND BALANCE SHEET COMPONENTS

(Unaudited)
SELECTED FINANCIAL DATA:                      For The Three Months Ended
                                              March 31, December 31, March 31,
Per Share:                                    2014      2013         2013
Net Income - Basic                            $0.17     $0.14        $0.14
Average Shares Outstanding - Basic            6,673,181 6,673,181    6,673,181
Net Income - Diluted                          $0.16     $0.14        $0.14
Average Shares Outstanding - Diluted          6,813,748 6,796,064    6,745,079
Tangible Book Value                           $10.99    $10.73       $10.85
Performance:
Return on Average Total Assets                0.54%     0.47%        0.55%
Return on Average Equity                      6.08%     5.35%        5.24%
Efficiency Ratio                              68.62%    74.94%       70.02%
Yield on Average Earning Assets               4.32%     4.16%        4.38%
Yield on Average Interest Bearing Liabilities 0.68%     0.74%        0.81%
Cost of Deposits                              0.49%     0.53%        0.54%
Net Interest Spread                           3.64%     3.42%        3.57%
Net Interest Margin                           3.84%     3.63%        3.81%
                                              March 31, December 31, March 31,
Capital Ratios:                               2014      2013         2013
Tangible Common Equity                        8.80%     8.75%        10.26%
Leverage                                      9.13%     9.12%        10.42%
Tier 1                                        12.04%    11.91%       13.77%
Total Risk Based                              13.29%    13.16%       15.02%
Asset Quality:
Allowance for Loan Losses to Total Loans      1.54%     1.42%        1.33%
Allowance for Loan Losses to Non-Performing   791%      800%         706%
Loans
Non-performing Loans to Total Loans           0.20%     0.18%        0.19%
Non-performing Assets to Total Assets         0.16%     0.14%        0.15%
Annualized Quarterly Net Charge-offs to       0.00%     -0.04%       0.00%
Average Loans



SOURCE Community National Bank

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