COMMUNITY NATIONAL BANK MELVILLE, N.Y., Oct. 17, 2014 /PRNewswire/ -- Community National Bank (OTC: CBNY) today announced third quarter results for 2014. Highlights for the quarter include:
-- Net income of $1.3 million or $0.19 diluted earnings per share for the
third quarter of 2014 compared to net income of $0.3 million or $0.04
diluted earnings per share for the same period in 2013.
-- Net income on a linked quarter basis grew 28% compared to the previous
quarter
-- Net interest income increased 16% or $1.1 million to $7.8 million for
the quarter ended September 30, 2014 compared to $6.7 million for the
quarter ended September 30, 2013.
-- Return on average assets and equity of 0.56% and 6.86%, respectively,
for the quarter ended September 30, 2014 compared to 0.13% and 1.42%,
respectively, for the quarter ended September 30, 2013.
-- Loans grew $134.2 million or 22% to $749.8 million at September 30, 2014
when compared to September 30, 2013.
-- Deposits increased $133.1 million or 19% to $826.1 million at September
30, 2014 compared to $693.0 million at September 30, 2013.
-- Demand deposits grew $42.6 million or 23% to $224.3 million at September
30, 2014 compared to $181.7 million at September 30, 2013.
Net Income
Net income for the quarter ended September 30, 2014 was $1.3 million or $0.19 diluted earnings per share compared to net income of $0.3 million or $0.04 diluted earnings per share for the same period in 2013. Net income for the nine months ended September 30, 2014 was $3.4 million or $0.51 diluted earnings per share compared to net income of $1.9 million or $0.30 diluted earnings per share for the same period in 2013, an increase of 72%.
The increase in net income for both the quarter and nine months ended September 30, 2014 was due to higher net interest income associated with loan growth and lower provision for loan losses as well as increased fees from service charges and a rise in servicing and other income. These increases were partially offset by higher non-interest expenses in all categories except advertising.
On a linked quarter basis, net income increased $0.3 million or 28% for the third quarter of 2014. The increase in net income on a linked quarter basis was due to higher net interest income attributable to loan growth and an increase in gains from the sale of SBA loans. Non-interest expense increased slightly when compared to the linked quarter.
Net Interest Income
For the quarter ended September 30, 2014, net interest income increased $1.1 million or 16% to $7.8 million compared to $6.7 million for the quarter ended September 30, 2013. The net interest margin decreased by 19 basis points to 3.54% for the quarter ended September 30, 2014 from 3.73% for the quarter ended September 30, 2013.
For the nine months ended September 30, 2014, net interest income increased $3.4 million or 17% to $22.8 million compared to $19.4 million for the nine months ended September 30, 2013. The net interest margin decreased by 12 basis points to 3.66% for the nine months ended September 30, 2014 from 3.78% for the nine months ended September 30, 2013.
The increase in net interest income for the quarter and nine months ended September 30, 2014 was primarily due to continued growth in our commercial and residential loan portfolios and higher non-interest bearing demand deposits.
The decrease in the net interest margin from comparable periods in the prior year was due to: 1) new loan originations carrying lower yields and 2) the cost of average interest bearing liabilities increasing 2 basis points to 0.76% for the quarter ended September 30, 2014 from 0.74% for the quarter ended September 30, 2013. The increase in the cost of funds was mostly attributable to growth in longer duration certificates of deposit during the third quarter and the year. The Bank increased the duration on a portion of its certificates of deposits to hedge against higher interest rates. If interest rates continue to remain low, we expect to face a continued narrowing of our net interest margin as competition from other financial institutions put pressure on loan yields.
Non-Interest Income
Non-interest income increased $0.1 million or 12% to $1.1 million for the quarter ended September 30, 2014 compared to $1.0 million for the prior year period. The increase in non-interest income was mostly attributable to increased fees from service charges and loan servicing and additional BOLI income.
Non-interest income increased $0.2 million or 6.2% to $3.2 million for the nine months ended September 30, 2014 compared to $3.0 million for the nine months ended September 30, 2013. The increase was due to higher service charge fee income and servicing and other income, which were partially offset by lower gains from the sale of SBA loans and lower BOLI income.
Non-Interest Expense
Non-interest expense increased $0.7 million or 13% to $6.1 million for the quarter ended September 30, 2014 compared to $5.4 million for the same period in 2013. The increase was attributable to higher compensation and occupancy costs associated with (1) additional personnel in credit administration, operations and compliance; (2) additional branch personnel for our Hewlett branch, which opened in September 2013 and (3) higher depreciation expense related to our new corporate headquarters and branch location. Other expenses increased approximately $0.1 million or 11% to $1.4 million for the three months ended September 30, 2014 from $1.3 million for the three months ended September 30, 2013. The increase was mostly attributable to higher data and item processing costs, compliance costs and FDIC assessments.
Balance Sheet
Total assets grew to $945.0 million at September 30, 2014, an increase of $147.7 million or 19% when compared to total assets of $797.3 million at September 30, 2013. Total loans increased $134.2 million or 22% to $749.8 million at September 30, 2014 when compared to September 30, 2013. The commercial loan portfolio increased $95.8 million or 22% when compared to September 30, 2013 and the residential loan portfolio increased $38.4 million or 21% when compared to September 30, 2013. Loans were funded primarily by the growth in deposits.
Total deposits increased $133.1 million or 19% to $826.1 million at September 30, 2014 from $693.0 million at September 30, 2013. Demand deposits grew $42.6 million or 23% to $224.3 million at September 30, 2014 when compared to September 30, 2013. The increase was due primarily to additional commercial business relationships. Demand deposits represented 27% of total deposits at September 30, 2014. NOW, savings and money market deposits increased $43.0 million or 14% to $359.2 million at September 30, 2014 from $316.2 million at September 30, 2013. A significant portion of the money market deposit growth was from new and existing municipal banking relationships.
Asset Quality & Capital
Non-performing loans, which consist of loans past due 90 days or more, were $1.9 million or 0.26% of total loans at September 30, 2014 compared to $1.5 million or 0.25% of total loans at September 30, 2013. The Bank recorded $0.6 million in provision for loan losses during the third quarter of 2014 compared to $2.0 million for the third quarter of 2013.
The allowance for loan losses was $10.6 million or 1.42% of total loans at September 30, 2014, an increase of $1.7 million from $8.9 million or 1.45% of total loans at September 30, 2013. The Bank had net charge-offs of $0.8 million during the third quarter of 2014 and did not have any charge-offs during the first two quarters of 2014. A significant portion of the loans charged-off during the third quarter were SBA loans.
The Bank did not own any foreclosed properties at September 30, 2014 and 2013, respectively.
The Bank continues to have significant capital strength with Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of 8.42%, 11.15% and 12.40%, respectively, at September 30, 2014.
Further information about the financial condition and performance of Community National Bank is available from its Call Reports filed with the FDIC and available on the FDIC website at: http://www.fdic.gov/. The Bank expects to file its September 30, 2014 Call Report on or around October 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 For The Nine Months Ended
-------------------------- -------------------------
September 30, September 30, September 30, September 30,
2014 2013 2014 2013
---- ---- ---- ----
Interest Income:
Commercial Loans $6,492,204 $5,350,569 $18,612,316 $15,478,583
Residential and
Consumer Loans 1,896,659 1,695,999 5,451,040 5,014,585
Securities 597,278 583,095 1,869,803 1,675,205
Money Market
Investments 11,645 12,880 19,289 33,418
------ ------ ------ ------
Total Interest
Income 8,997,786 7,642,543 25,952,448 22,201,791
--------- --------- ---------- ----------
Interest Expense:
NOW, Savings &
Money Market 324,750 221,026 903,770 601,830
Certificates of
Deposit 771,647 592,162 1,970,456 1,761,837
Borrowed Funds 93,868 118,059 282,802 406,196
------ ------- ------- -------
Total Interest
Expense 1,190,265 931,247 3,157,028 2,769,863
--------- ------- --------- ---------
Net Interest Income 7,807,521 6,711,296 22,795,420 19,431,928
Provision For Loan
Losses 565,000 2,015,000 2,080,000 3,630,000
------- --------- --------- ---------
Net Interest Income
After Provision
for Loan Losses 7,242,521 4,696,296 20,715,420 15,801,928
--------- --------- ---------- ----------
Non-Interest Income:
Service Charges 368,935 301,609 1,048,950 816,119
Servicing & Other
Income 176,788 143,632 455,981 373,127
Gain on Sale of
Investments - - 20,432 29,439
Gain on Sale of
Loans 405,169 394,166 1,199,218 1,315,925
BOLI Income 160,015 148,241 450,262 454,497
------- ------- ------- -------
Total Non-Interest
Income 1,110,907 987,648 3,174,843 2,989,107
--------- ------- --------- ---------
Non-Interest Expense:
Compensation and
Benefits 3,142,732 2,665,323 9,356,448 7,852,462
Occupancy and
Equipment 1,500,284 1,350,272 4,476,822 3,993,063
Advertising 1,855 65,403 97,867 173,711
Other Expenses 1,438,479 1,297,440 4,214,909 3,634,577
--------- --------- --------- ---------
Total Non-Interest
Expense 6,083,350 5,378,438 18,146,046 15,653,813
--------- --------- ---------- ----------
Income Before
Income Taxes 2,270,078 305,506 5,744,217 3,137,222
Provision For
Income Taxes 967,990 51,915 2,316,990 1,146,916
------- ------ --------- ---------
Net Income $1,302,088 $253,591 $3,427,227 $1,990,306
========== ======== ========== ==========
Earnings Per Share:
Basic $0.20 $0.04 $0.51 $0.30
Diluted $0.19 $0.04 $0.51 $0.30
Weighted Average
Shares Outstanding
- Basic 6,673,181 6,673,181 6,673,181 6,673,181
Weighted Average
Shares Outstanding
- Diluted 6,836,003 6,792,969 6,778,947 6,736,313
COMMUNITY NATIONAL BANK
STATEMENTS OF INCOME
Unaudited
For the Three Months Ended
September 30, June 30, March 31, December, 31
2014 2014 2014 2013
---- ---- ---- ----
Interest Income:
Commercial Loans $6,492,204 $5,930,011 $6,190,101 $5,672,443
Residential and
Consumer Loans 1,896,659 1,810,821 1,743,561 1,738,300
Securities 597,278 640,178 632,347 609,843
Money Market
Investments 11,645 3,577 4,067 20,428
------ ----- ----- ------
Total Interest
Income 8,997,786 8,384,587 8,570,076 $8,041,014
--------- --------- --------- ----------
Interest Expense:
NOW, Savings &
Money Market 324,750 283,207 295,813 328,531
Certificates of
Deposit 771,647 633,285 565,524 608,736
Borrowed Funds 93,868 102,541 86,393 75,860
------ ------- ------ ------
Total Interest
Expense 1,190,265 1,019,033 947,730 1,013,127
--------- --------- ------- ---------
Net Interest Income 7,807,521 7,365,554 7,622,346 7,027,887
Provision For Loan
Losses 565,000 540,000 975,000 373,000
------- ------- ------- -------
Net Interest Income
After Provision
for Loan Losses 7,242,521 6,825,554 6,647,346 6,654,887
--------- --------- --------- ---------
Non-Interest Income:
Service Charges 368,935 355,939 324,075 331,778
Servicing & Other
Income 176,788 177,818 101,375 167,308
Gain on Sale of
Investments - - 20,432 -
Gain on Sale of
Loans 405,169 121,024 673,026 26,237
BOLI Income 160,015 148,321 141,925 151,206
------- ------- ------- -------
Total Non-Interest
Income 1,110,907 803,102 1,260,833 676,529
--------- ------- --------- -------
Non-Interest Expense:
Compensation and
Benefits 3,142,732 3,071,264 3,142,452 2,836,429
Occupancy and
Equipment 1,500,284 1,455,135 1,521,403 1,388,281
Advertising 1,855 44,969 51,043 49,321
Other Expenses 1,438,479 1,395,784 1,380,646 1,499,655
--------- --------- --------- ---------
Total Non-Interest
Expense 6,083,350 5,967,152 6,095,544 5,773,686
--------- --------- --------- ---------
Income Before
Income Taxes 2,270,078 1,661,504 1,812,635 1,557,730
Provision For
Income Taxes 967,990 641,000 708,000 596,387
------- ------- ------- -------
Net Income $1,302,088 $1,020,504 $1,104,635 $961,343
========== ========== ========== ========
Earnings Per Share:
Basic $0.20 $0.15 $0.17 $0.14
Diluted $0.19 $0.15 $0.16 $0.14
Weighted Average
Shares Outstanding
- Basic 6,673,181 6,673,181 6,673,181 6,673,181
Weighted Average
Shares Outstanding
- Diluted 6,836,003 6,845,990 6,813,748 6,796,064
COMMUNITY NATIONAL BANK
STATEMENTS OF CONDITION
Unaudited
September 30, June 30, December, 31 September 30,
2014 2014 2013 2013
---- ---- ---- ----
Assets:
Cash and Due From Banks $14,206,744 $12,876,224 $8,783,780 $8,323,492
Money Market
Investments 41,449,611 28,984,287 2,102,723 26,344,244
Securities - Available-
for-Sale 93,370,412 96,991,395 100,894,759 106,001,818
Securities - Held-to-
Maturity 8,605,371 8,989,549 6,053,339 -
Restricted Stock 4,605,100 4,924,950 5,408,850 4,121,350
--------- --------- --------- ---------
Total Securities 106,580,883 110,905,894 112,356,948 110,123,168
----------- ----------- ----------- -----------
Commercial Loans 529,813,930 509,189,897 464,037,616 434,020,481
Residential & Consumer
Loans 220,032,946 214,296,552 197,350,345 181,653,928
----------- ----------- ----------- -----------
Gross Loans Held-For-
Investment 749,846,876 723,486,449 661,387,961 615,674,409
Less: Allowance For
Loans Losses (10,629,364) (10,897,125) (9,383,788) (8,942,236)
----------- ----------- ---------- ----------
Net Loans Held-For-
Investment 739,217,512 712,589,324 652,004,173 606,732,173
Premises and Equipment,
net 10,298,002 10,529,647 11,116,968 10,927,997
Bank Owned Life
Insurance ("BOLI") 22,549,822 22,389,807 20,099,560 19,948,355
Other Assets 10,713,315 10,588,820 12,118,062 14,930,676
---------- ---------- ---------- ----------
Total Assets $945,015,889 $908,864,003 $818,582,214 $797,330,105
============ ============ ============ ============
Liabilities and Stockholders' Equity:
Deposits:
Demand $224,352,849 $220,648,870 $177,107,547 $181,740,742
NOW, Savings & Money
Market 359,236,060 331,320,846 316,807,903 316,213,221
Certificates of Deposit 242,588,408 238,321,973 193,134,562 195,077,799
----------- ----------- ----------- -----------
Total Deposits 826,177,317 790,291,689 687,050,012 693,031,762
----------- ----------- ----------- -----------
FHLB Advances 36,448,268 37,178,305 54,921,135 26,438,035
Accrued Expenses and
Other Liabilities 5,857,278 6,148,817 4,985,420 6,550,574
--------- --------- --------- ---------
Total Liabilities 868,482,863 833,618,811 746,956,567 726,020,371
----------- ----------- ----------- -----------
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 33,365,905
Additional Paid in
Capital 34,566,573 34,496,707 34,362,152 34,295,244
Retained Earnings 9,834,168 8,532,080 6,406,941 5,445,598
Unrealized Loss on
Securities (1,233,620) (1,149,500) (2,509,351) (1,797,013)
---------- ---------- ---------- ----------
Total Stockholders'
Equity 76,533,026 75,245,192 71,625,647 71,309,734
---------- ---------- ---------- ----------
Total Liabilities and
Stockholders' Equity $945,015,889 $908,864,003 $818,582,214 $797,330,105
============ ============ ============ ============
COMMUNITY NATIONAL BANK
SELECTED FINANCIAL DATA & BALANCE SHEET COMPONENTS
Unaudited
For The Three Months Ended For The Nine Months Ended
--------------------------
September 30, September 30, September 30, September 30,
2014 2013 2014 2013
---- ---- ---- ----
Per Share:
Net Income-Basic $0.20 $0.04 $0.51 $0.30
Average Shares
Outstanding - Basic 6,673,181 6,673,181 6,673,181 6,673,181
Net Income - Diluted $0.19 $0.04 $0.51 $0.30
Average Shares
Outstanding - Diluted 6,836,003 6,792,969 6,778,947 6,736,313
Tangible Book Value $11.47 $10.69 $11.47 $10.69
Performance:
Return on Average
Assets 0.56% 0.13% 0.53% 0.37%
Return on Average
Equity 6.86% 1.42% 6.15% 3.68%
Efficiency Ratio 68.21% 69.86% 69.87% 69.82%
Yield on Average
Earning Assets 4.08% 4.25% 4.16% 4.32%
Cost on Average
Interest Bearing
Liabilities 0.76% 0.74% 0.72% 0.77%
Cost of Deposits 0.55% 0.51% 0.51% 0.53%
Net Interest Spread 3.32% 3.51% 3.44% 3.55%
Net Interest Margin 3.54% 3.73% 3.66% 3.78%
Quarter Ended
-------------
September 30, June 30, December 31, September 30,
2014 2014 2013 2013
---- ---- ---- ----
Capital Ratios:
Tangible Common Equity 8.10% 8.28% 8.75% 8.94%
Leverage 8.42% 8.94% 9.12% 9.62%
Tier 1 11.15% 11.42% 11.91% 12.39%
Total Risk Based 12.40% 12.68% 13.16% 13.64%
Asset Quality:
Allowance for Loan
Losses to Total Loans 1.42% 1.51% 1.42% 1.45%
Allowance for Loan
Losses to Non-
Performing Loans 541% 402% 800% 577%
0.18%
Non-Performing Loans
to Total Loans 0.26% 0.37% 0.25%
Non-Performing Assets
to Total Assets 0.21% 0.30% 0.14% 0.19%
Annualized Quarterly
Net Charge offs to
Avg. Loans 0.45% 0.00% -0.04% 0.88%
Yield on Average
Earning Assets 4.08% 4.10% 4.16% 4.25%
Cost on Average
Interest Bearing
Liabilities 0.76% 0.71% 0.74% 0.74%
Cost of Deposits 0.55% 0.51% 0.53% 0.51%
Net Interest Spread 3.32% 3.39% 3.42% 3.51%
Net Interest Margin 3.54% 3.60% 3.63% 3.73%
SOURCE Community National Bank
