COMMUNITY NATIONAL BANK MELVILLE, N.Y., July 18, 2014 /PRNewswire/ -- Community National Bank (OTC: CBNY) today announced second quarter results for 2014. Highlights for the quarter include:
-- Net income of $1.1 million or $0.15 per share for the second quarter of
2014 compared to net income of $0.8 million or $0.12 per share for the
same period in 2013.
-- Net interest income increased 13% or $0.9 million to $7.4 million for
the quarter ended June 30, 2014 compared to $6.5 million for the quarter
ended June 30, 2013.
-- Return on average assets and equity of 0.48% and 5.51%, respectively,
for the quarter ended June 30, 2014 compared to 0.44% and 4.36%,
respectively, for the quarter ended June 30, 2013.
-- Commercial loans grew $137.0 million or 37% to $509.2 million at June
30, 2014 when compared to June 30, 2013.
-- Deposits increased $205.1 million or 35% to $790.3 million at June 30,
2014 compared to $585.2 million at June 30, 2013.
-- Demand deposits grew $50.7 million or 30% to $220.6 million at June 30,
2014 compared to $169.9 million at June 30, 2013.
Net Income
Net income for the quarter ended June 30, 2014 was $1.1 million or $0.15 diluted earnings per share compared to net income of $0.8 million or $0.12 diluted earnings per share for the same period in 2013, an increase of 29%. Net income for the six months ended June 30, 2014 was $2.1 million or $0.31 diluted earnings per share compared to net income of $1.7 million or $0.26 diluted earnings per share for the same period in 2013, an increase of 22%.
The increase in net income for both the quarter and six months ended June 30, 2014 was due to higher net interest income associated with loan growth, lower provision for loan losses and increased fees from service charges and loan servicing income. The increases were partially offset by lower gains from the sale of SBA loans and higher non-interest expenses associated with our new branch located in Hewlett, New York and our new corporate headquarters in Melville, New York. These two facilities opened during the third quarter of 2013.
On a linked quarter basis, net income for the second quarter of 2014 declined slightly. Net income for the second quarter of 2014 did not include $385 thousand in loan prepayment penalties that were received from borrowers and recorded during the first quarter of 2014. In addition, gains on the sale of SBA loans decreased by $552 thousand. These items were partially offset by declines of $435 thousand in the provision for loan losses and $128 thousand in non-interest expenses.
Net Interest Income
For the quarter ended June 30, 2014, net interest income increased $0.9 million or 13% to $7.4 million compared to $6.5 million for the quarter ended June 30, 2013. The net interest margin decreased by 24 basis points to 3.60% for the quarter ended June 30, 2014 from 3.81% for the quarter ended June 30, 2013.
For the six months ended June 30, 2014, net interest income increased $2.3 million or 18% to $15.0 million compared to $12.7 million for the six months ended June 30, 2013. The net interest margin decreased by 9 basis points to 3.72% for the six months ended June 30, 2014 from 3.81% for the six months ended June 30, 2013.
The increase in net interest income for the quarter and six months ended June 30, 2014 was primarily due to (1) continued growth in our commercial and residential loan portfolios; (2) higher non-interest bearing demand deposits; and (3) a decline in the cost of average interest bearing deposits.
The decrease in the net interest margin from comparable periods in the prior year was due to new loan originations carrying lower yields and re-pricing downward at a faster pace than average interest bearing liabilities. If interest rates continue to remain low, we expect to face a continued narrowing of our net interest margin as the cost of funds on deposits reaches a floor and competition from other financial institutions continue to put pressure on loan yields.
Non-Interest Income
Non-interest income decreased $0.3 million or 29% to $0.8 million for the quarter ended June 30, 2014 compared to $1.1 million for the prior year period. The decrease in non-interest income was attributable to lower gains from the sale of SBA loans, which was partially offset by increased fees from service charges and loan servicing income.
Non-Interest Expense
Non-interest expense increased $0.6 million or 12% to $5.9 million for the quarter ended June 30, 2014 compared to $5.3 million for the same period in 2013. The increase was attributable to higher compensation and occupancy costs associated with (1) our Hewlett branch location; (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 branch location. Other expenses increased approximately $100 thousand or 10% to $1.4 million for the three months ended June 30, 2014 from $1.3 million for the three months ended June 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 $908.8 million at June 30, 2014, an increase of $190.8 million or 27% when compared to total assets of $718.0 million at June 30, 2013. Total loans increased $175.2 million or 32% to $723.5 million at June 30, 2014 when compared to June 30, 2013. The commercial loan portfolio increased $137.0 million or 37% when compared to June 30, 2013 and the residential loan portfolio increased $38.3 million or 22% when compared to June 30, 2013. Loans were funded primarily by the growth in deposits.
Total deposits increased $205.1 million or 35% to $790.3 million at June 30, 2014 from $585.2 million at June 30, 2013. Demand deposits grew $50.7 million or 30% to $220.6 million at June 30, 2014 when compared to June 30, 2013. The increase was due primarily to additional commercial business relationships. Demand deposits represented 28% of total deposits at June 30, 2014. NOW, savings and money market deposits increased $100.6 million or 44% to $331.3 million at June 30, 2014 from $230.7 million at June 30, 2013. A significant portion of the money market 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 $2.7 million or 0.37% of total loans at June 30, 2014 compared to $2.1 million or 0.39% of total loans at June 30, 2013. The Bank recorded $0.5 million in provision for loan losses during the second quarter of 2014 compared to $1.0 million for the second quarter of 2013. The Bank did not own any foreclosed properties at June 30, 2014 and 2013, respectively.
The allowance for loan losses was $10.9 million or 1.51% of total loans at June 30, 2014, an increase of $2.7 million from $8.2 million or 1.50% of total loans at June 30, 2013.
The Bank continues to have significant capital strength with Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of 8.94%, 11.42% and 12.68%, respectively, at June 30, 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://www.fdic.gov/. The Bank expects to file its June 30, 2014 Call Report on or around July 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 Six Months Ended
-------------------------- ------------------------
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
---- ---- ---- ----
Interest Income:
Commercial Loans $5,930,011 $5,194,321 $12,120,112 $10,128,014
Residential and Consumer Loans 1,810,821 1,670,716 3,554,382 3,318,586
Securities 640,178 551,025 1,272,525 1,092,110
Money Market Investments 3,577 10,823 7,644 20,538
----- ------ ----- ------
Total Interest Income 8,384,587 7,426,885 16,954,663 14,559,248
--------- --------- ---------- ----------
Interest Expense:
NOW, Savings & Money Market 283,207 175,984 579,020 380,804
Certificates of Deposit 633,285 592,243 1,198,809 1,169,675
Borrowed Funds 102,541 155,129 188,934 288,137
------- ------- ------- -------
Total Interest Expense 1,019,033 923,356 1,966,763 1,838,616
--------- ------- --------- ---------
Net Interest Income 7,365,554 6,503,529 14,987,900 12,720,632
Provision For Loan Losses 540,000 995,000 1,515,000 1,615,000
------- ------- --------- ---------
Net Interest Income After Provision for Loan Losses 6,825,554 5,508,529 13,472,900 11,105,632
--------- --------- ---------- ----------
Non-Interest Income:
Service Charges 355,939 267,690 680,014 514,510
Servicing Income & Loan Fees 177,818 134,972 279,193 229,495
Gain on Sale of Investments - - 20,432 29,439
Gain on Sale of Loans 121,024 575,299 794,050 921,759
BOLI Income 148,321 148,137 290,246 306,256
------- ------- ------- -------
Total Non-Interest Income 803,102 1,126,098 2,063,935 2,001,459
------- --------- --------- ---------
Non-Interest Expense:
Compensation and Benefits 3,071,264 2,639,070 6,213,716 5,187,139
Occupancy and Equipment 1,455,135 1,340,234 2,976,538 2,642,791
Advertising 44,969 67,045 96,012 108,308
Other Expenses 1,395,784 1,263,153 2,776,430 2,337,137
--------- --------- --------- ---------
Total Non-Interest Expense 5,967,152 5,309,502 12,062,696 10,275,375
--------- --------- ---------- ----------
Income Before Income Taxes 1,661,504 1,325,125 3,474,139 2,831,716
Provision For Income Taxes 641,000 530,999 1,349,000 1,095,001
------- ------- --------- ---------
Net Income $1,020,504 $794,126 $2,125,139 $1,736,715
========== ======== ========== ==========
Earnings Per Share:
Basic $0.15 $0.12 $0.32 $0.26
Diluted $0.15 $0.12 $0.31 $0.26
Weighted Average Shares Outstanding - Basic 6,673,181 6,673,181 6,673,181 6,673,181
Weighted Average Shares Outstanding - Diluted 6,845,990 6,767,440 6,830,153 6,756,881
COMMUNITY NATIONAL BANK
STATEMENTS OF INCOME
Unaudited
For the Three Months Ended
--------------------------
June 30, March 31, December 31, September 30,
2014 2014 2013 2013
---- ---- ---- ----
Interest Income:
Commercial Loans $5,930,011 $6,190,101 $5,672,443 $5,350,569
Residential and Consumer Loans 1,810,821 1,743,561 1,738,300 1,695,999
Securities 640,178 632,347 609,843 583,095
Money Market Investments 3,577 4,067 20,428 12,880
----- ----- ------ ------
Total Interest Income 8,384,587 8,570,076 $8,041,014 7,642,543
--------- --------- ---------- ---------
Interest Expense:
NOW, Savings & Money Market 283,207 295,813 328,531 221,026
Certificates of Deposit 633,285 565,524 608,736 592,162
Borrowed Funds 102,541 86,393 75,860 118,059
------- ------ ------ -------
Total Interest Expense 1,019,033 947,730 1,013,127 931,247
--------- ------- --------- -------
Net Interest Income 7,365,554 7,622,346 7,027,887 6,711,296
Provision For Loan Losses 540,000 975,000 373,000 2,015,000
------- ------- ------- ---------
Net Interest Income After Provision for Loan Losses 6,825,554 6,647,346 6,654,887 4,696,296
--------- --------- --------- ---------
Non-Interest Income:
Service Charges 355,939 324,075 331,778 301,609
Loan Fees & Servicing Income 177,818 101,375 167,308 143,632
Gain on Sale of Investments - 20,432 - -
Gain on Sale of Loans 121,024 673,026 26,237 394,166
BOLI Income 148,321 141,925 151,206 148,241
------- ------- ------- -------
Total Non-Interest Income 803,102 1,260,833 676,529 987,648
------- --------- ------- -------
Non-Interest Expense:
Compensation and Benefits 3,071,264 3,142,452 2,836,429 2,665,323
Occupancy and Equipment 1,455,135 1,521,403 1,388,281 1,350,272
Advertising 44,969 51,043 49,321 65,403
Other Expenses 1,395,784 1,380,646 1,499,655 1,297,440
--------- --------- --------- ---------
Total Non-Interest Expense 5,967,152 6,095,544 5,773,686 5,378,438
--------- --------- --------- ---------
Income Before Income Taxes 1,661,504 1,812,635 1,557,730 305,506
Provision For Income Taxes 641,000 708,000 596,387 51,915
------- ------- ------- ------
Net Income $1,020,504 $1,104,635 $961,343 $253,591
========== ========== ======== ========
Earnings Per Share:
Basic $0.15 $0.17 $0.14 $0.04
Diluted $0.15 $0.16 $0.14 $0.04
Weighted Average Shares Outstanding - Basic 6,673,181 6,673,181 6,673,181 6,673,181
Weighted Average Shares Outstanding - Diluted 6,845,990 6,813,748 6,796,064 6,792,969
COMMUNITY NATIONAL BANK
STATEMENTS OF CONDITION
Unaudited
June 30, March 31, December 31, June 30,
2014 2014 2013 2013
---- ---- ---- ----
Assets:
Cash and Due From Banks $12,876,224 $4,819,820 $8,783,780 $7,927,992
Money Market Investments 28,984,287 15,953,371 2,102,723 18,966,565
Securities - Available-for-Sale 96,991,395 98,770,601 100,894,759 107,982,445
Securities - Held-to-Maturity 8,989,549 5,824,335 6,053,339 -
Restricted Stock 4,924,950 4,899,450 5,408,850 5,494,450
--------- --------- --------- ---------
Total Securities 110,905,894 109,494,386 112,356,948 113,476,895
----------- ----------- ----------- -----------
Commercial Loans 509,189,897 471,362,962 464,037,616 372,236,723
Residential & Consumer Loans 214,296,552 198,968,236 197,350,345 176,034,480
----------- ----------- ----------- -----------
Gross Loans Held-For-Investment 723,486,449 670,331,198 661,387,961 548,271,203
Less: Allowance For Loans Losses (10,897,125) (10,355,770) (9,383,788) (8,228,359)
----------- ----------- ---------- ----------
Net Loans Held-For-Investment 712,589,324 659,975,428 652,004,173 540,042,844
Premises and Equipment, net 10,529,647 10,845,303 11,116,968 9,590,787
Bank Owned Life Insurance ("BOLI") 22,389,807 20,241,485 20,099,560 19,800,850
Other Assets 10,588,820 11,732,819 12,118,062 8,246,406
---------- ---------- ---------- ---------
Total Assets $908,864,003 $833,062,612 $818,582,214 $718,052,339
============ ============ ============ ============
Liabilities and Stockholders' Equity:
Deposits:
Demand $220,648,870 $198,252,200 $177,107,547 $169,896,257
NOW, Savings & Money Market 331,320,846 323,544,027 316,807,903 230,706,025
Certificates of Deposit 238,321,973 186,568,373 193,134,562 184,636,337
----------- ----------- ----------- -----------
Total Deposits 790,291,689 708,364,600 687,050,012 585,238,619
----------- ----------- ----------- -----------
FHLB Advances 37,178,305 43,601,230 54,921,135 56,951,949
Accrued Expenses and Other Liabilities 6,148,817 7,773,533 4,985,420 4,170,988
--------- --------- --------- ---------
Total Liabilities 833,618,811 759,739,363 746,956,567 646,361,556
----------- ----------- ----------- -----------
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 34,496,707 34,428,937 34,362,152 34,228,336
Retained Earnings 8,532,080 7,511,576 6,406,941 5,192,007
Unrealized Loss on Securities (1,149,500) (1,983,169) (2,509,351) (1,095,465)
---------- ---------- ---------- ----------
Total Stockholders' Equity 75,245,192 73,323,249 71,625,647 71,690,783
---------- ---------- ---------- ----------
Total Liabilities and Stockholders' Equity $908,864,003 $833,062,612 $818,582,214 $718,052,339
============ ============ ============ ============
COMMUNITY NATIONAL BANK
SELECTED FINANCIAL DATA & BALANCE SHEET COMPONENTS
Unaudited
For The Three Months Ended For The Six Months Ended
-------------------------- ------------------------
June 30, 2014 June 30, 2013 June 30, 2014 June 30, 2013
------------- ------------- ------------- -------------
Per Share:
Net Income-Basic $0.15 $0.12 $0.32 $0.26
Average Shares Outstanding - Basic 6,673,181 6,673,181 6,673,181 6,673,181
Net Income - Diluted $0.15 $0.12 $0.31 $0.26
Average Shares Outstanding - Diluted 6,845,990 6,767,440 6,830.153 6,756,881
Tangible Book Value $11.28 $10.74 $11.28 $10.74
Performance:
Return on Average Assets 0.48% 0.44% 0.51% 0.49%
Return on Average Equity 5.51% 4.36% 5.79% 4.80%
Efficiency Ratio 73.05% 69.59% 70.74% 69.80%
Yield on Average Earning Assets 4.10% 4.35% 4.21% 4.36%
Cost on Average Interest Bearing Liabilities 0.71% 0.78% 0.69% 0.79%
Cost of Deposits 0.51% 0.53% 0.50% 0.53%
Net Interest Spread 3.39% 3.57% 3.52% 3.57%
Net Interest Margin 3.60% 3.81% 3.72% 3.81%
Quarter Ended
-------------
June 30, March 31, December 31, June 30,
2014 2014 2013 2013
---- ---- ---- ----
Capital Ratios:
Tangible Common Equity 8.28% 8.80% 8.75% 9.98%
Leverage 8.94% 9.13% 9.12% 10.10%
Tier 1 11.42% 12.04% 11.91% 13.90%
Total Risk Based 12.68% 13.29% 13.16% 15.16%
Asset Quality:
Allowance for Loan Losses to Total Loans 1.51% 1.54% 1.42% 1.50%
Allowance for Loan Losses to Non-Performing Loans 402% 791% 800% 386%
Non-Performing Loans to Total Loans 0.37% 0.20% 0.18% 0.39%
Non-Performing Assets to Total Assets 0.30% 0.16% 0.14% 0.30%
Annualized Quarterly Net Charge offs to Avg. Loans 0.00% 0.00% -0.04% 0.00%
Yield on Average Earning Assets 4.10% 4.32% 4.16% 4.35%
Cost on Average Interest Bearing Liabilities 0.71% 0.68% 0.74% 0.78%
Cost of Deposits 0.51% 0.49% 0.53% 0.53%
Net Interest Spread 3.39% 3.64% 3.42% 3.57%
Net Interest Margin 3.60% 3.84% 3.63% 3.81%
SOURCE Community National Bank
