COMMUNITY NATIONAL BANK 
By FOR IMMEDIATE RELEASE | Contact: | Jay McConie |
Senior Vice President | ||
Chief Financial Officer | ||
(516) 498-9111 Ext 1139 |
• Net 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.
• Net 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.
• Return 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.
• Commercial loans grew $96.6 million or 26% to $471.4 million at March 31, 2014 when compared to March 31, 2013.
• Deposits increased $120.4 million or 20% to $708.4 million at March 31, 2014 compared to $588.0 million at March 31, 2013.
• Demand deposits grew $36.3 million or 22% to $198.3 million at March 31, 2014 compared to
$162.0 million at March 31, 2013.
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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 $708.3 million at March 31, 2014 from $587.9 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
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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: http://www2.fdic.gov/idasp/main_bankfind.asp. The Bank expects to file its March 31, 2014 Call Report on or around April 30, 2014.
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.
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.
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COMMUNITY NATIONAL BANK STATEMENTS OF INCOME (Unaudited)
Interest Income:
For The Three Months Ended March 31, December 31, March 31,
2014 2013 2013
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 Loan Losses | 6,647,346 6,654,887 5,597,103 |
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 - Basic | 6,673,181 | 6,673,181 | 6,673,181 |
Weighted Average Shares Outstanding - Diluted | 6,813,748 | 6,796,064 | 6,745,079 |
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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
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 shares | 33,365,905 | 33,365,905 | 33,365,905 |
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 Stockholders' Equity | $833,062,612 $818,582,214 $705,543,506 |
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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 Loans | 791% | 800% | 706% |
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 Average Loans | 0.00% | -0.04% | 0.00% |
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