Community National Bank Announces Earnings for First Quarter 2015

MELVILLE, N.Y.--(BUSINESS WIRE)--

Community National Bank CBNY today announced first quarter results for 2015. Highlights for the quarter include:

• Net income of $1.4 million or $0.20 diluted earnings per share for the first quarter of 2015 compared to net income of $1.1 million or $0.16 diluted earnings per share for the same period in 2014.
• Return on average assets and equity of 0.61% and 7.04%, respectively, for the quarter ended March 31, 2015 compared to 0.54% and 6.08%, respectively, for the quarter ended March 31, 2014.
• Loans grew $110.5 million or 16% to $780.8 million at March 31, 2015 when compared to March 31, 2014.
• Deposits increased $117.1 million or 16% to $825.4 million at March 31, 2015 compared to March 31, 2014.
• Demand Deposits increased $25.9 million or 13% to $224.2 million at March 31, 2015 compared to March 31, 2014.

Earnings and Net Interest Income

Net income for the quarter ended March 31, 2015 was $1.4 million or $0.20 diluted earnings per share compared to net income of $1.1 million or $0.16 diluted earnings per share for the same period in 2014. The increase in net income was primarily attributed to a lower provision for loan loss, which was partially offset by lower gains from the sale of SBA loans.

For the quarter ended March 31, 2015, net interest income increased slightly by $0.1 million or 2% to $7.7 million compared to $7.6 million for the quarter ended March 31, 2014. The net interest margin decreased by 38 basis points to 3.46% for the quarter ended March 31, 2015 from 3.84% for the quarter ended March 31, 2014. The decrease in the net interest margin was attributed to a decline in rates on the loan portfolio while funding costs remained relatively flat.

Non-Interest Income

Non-interest income decreased $0.4 million for the quarter ended March 31, 2015 to $0.8 million compared to $1.2 million for same quarter in 2014. The decline was due primarily to lower gains from the sale of SBA loans.

Non-Interest Expense

Non-interest expense was $6.1 million for the quarter ended March 31, 2015, flat when compared to the same quarter in 2014.

Balance Sheet

Total assets grew to $950.5 million at March 31, 2015, an increase of $117.5 million or 14% when compared to total assets of $833.0 million at March 31, 2014. The commercial loan portfolio increased $82.5 million or 17% to $553.9 million at March 31, 2015 when compared to March 31, 2014. The residential loan portfolio increased $28.0 million or 14% to $227.0 million at March 31, 2015 when compared to March 31, 2014. Loans were funded primarily by growth in deposits.

Total deposits increased $117.1 million or 16% to $825.4 million at March 31, 2015 from $708.3 million at March 31, 2014. Demand deposits grew $25.9 million or 13% to $224.2 million at March 31, 2015 when compared to March 31, 2014. The increase was due primarily to additional commercial business relationships. Demand deposits represented 27% of total deposits at March 31, 2015. NOW, savings and money market deposits increased $54.6 million or 17% to $378.1 million at March 31, 2015 from $323.5 million at March 31, 2014. 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 $6.8 million or 0.88% of total loans at March 31, 2015 compared to $1.3 million or 0.20% of total loans at March 31, 2014. The increase was mostly attributable to two loans totaling approximately $5.4 million which were placed on non-accrual basis during the fourth quarter of 2014.

The Bank recorded $0.2 million in provision for loan losses during the first quarter of 2015 compared to $1.0 million for the first quarter of 2014.

The allowance for loan losses was $11.4 million or 1.46% of total loans at March 31, 2015, an increase of $1.0 million from $10.4 million or 1.54% of total loans at March 31, 2014. The Bank had net recoveries of $0.2 million during the first quarter of 2015 compared to a minimal net recovery during the first quarter of 2014.

The Bank did not own any foreclosed properties at March 31, 2015 and March 31, 2014, respectively.

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 March 31, 2015 Call Report on or around April 30, 2015.

ABOUT COMMUNITY NATIONAL BANK

Community National Bank, or CNB, 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,
					2015			2014			2014
Interest Income:
Commercial Loans					$6,447,959			$6,495,663			$6,190,101
Residential and Consumer Loans					1,943,618			1,916,549			1,743,561
Securities					528,001			626,761			632,347
Money Market Investments					13,366			25,643			4,067
Total Interest Income					8,932,944			9,064,616			8,570,076
Interest Expense:
NOW, Savings & Money Market					352,655			329,672			295,813
Certificates of Deposit					717,269			772,105			565,524
Borrowed Funds					89,241			90,166			86,393
Total Interest Expense					1,159,165			1,191,943			947,730
Net Interest Income					7,773,779			7,872,673			7,622,346
Provision For Loan Losses					180,000			610,000			975,000
Net Interest Income After Provision for Loan Losses					7,593,779			7,262,673			6,647,346
Non-Interest Income:
Service Charges					370,632			375,092			324,075
Servicing & Other Income					97,037			119,963			101,375
Gain on Sale of Investments					-			43,760			20,432
Gain on Sale of Loans					222,999			6,459			673,026
BOLI Income					145,280			139,515			141,925
Total Non-Interest Income					835,948			684,789			1,260,833
Non-Interest Expense:
Compensation and Benefits					3,035,221			3,205,963			3,142,452
Occupancy and Equipment					1,498,628			1,509,916			1,521,403
Advertising					16,356			4,148			51,043
Other Expenses					1,617,282			1,653,325			1,380,646
Total Non-Interest Expense					6,167,487			6,373,352			6,095,544
Income Before Income Taxes					2,262,240			1,574,110			1,812,635
Provision For Income Taxes					837,850			693,980			708,000
Net Income					$1,424,390			$880,130			$1,104,635
Earnings Per Share:
Basic					$0.21			$0.13			$0.17
Diluted					$0.20			$0.13			$0.16
Weighted Average Shares Outstanding – Basic					6,864,848			6,706,051			6,673,181
Weighted Average Shares Outstanding – Diluted					7,082,783			6,862,322			6,813,748
Actual Shares Outstanding					6,866,181			6,862,181			6,673,181

COMMUNITY NATIONAL BANK
STATEMENTS OF CONDITION
Unaudited
					March 31,			December 31,			March 31,
					2015			2014			2014
Assets:
Cash and Due From Banks					$12,073,900			$15,092,542			$4,819,820
Money Market Investments					30,612,998			45,121,637			15,953,371
Securities – Available-for-Sale					82,074,973			84,288,861			98,770,601
Securities – Held-to-Maturity					7,849,917			8,229,963			5,824,335
Restricted Stock					4,570,800			4,580,100			4,899,450
Total Securities					94,495,690			97,098,924			109,494,386
Commercial Loans					553,869,580			534,876,102			471,362,962
Residential & Consumer Loans					226,953,324			225,637,144			198,968,236
Gross Loans Held-For-Investment					780,822,904			760,513,246			670,331,198
Less: Allowance For Loans Losses					(11,393,548)			(11,008,163)			(10,355,770)
Net Loans Held-For-Investment					769,429,356			749,505,083			659,975,428
Premises and Equipment, net					9,672,130			10,007,801			10,845,303
Bank Owned Life Insurance ("BOLI")					22,834,617			22,689,337			20,241,485
Other Assets					11,417,528			11,156,072			11,732,819
Total Assets					$950,536,219			$950,671,396			$833,062,612
Liabilities and Stockholders' Equity:
Deposits:
Demand					$224,195,840			$230,608,244			$198,252,200
NOW, Savings & Money Market					378,168,474			364,278,786			323,544,027
Certificates of Deposit					223,078,021			233,914,633			186,568,373
Total Deposits					825,442,335			828,801,663			708,364,600
FHLB Advances					35,685,944			35,891,243			43,601,230
Accrued Expenses and Other Liabilities					7,318,721			5,913,512			7,773,533
Total Liabilities					868,447,000			870,606,418			759,739,363
Stockholders' Equity:
Common Stock, par value $5.00; authorized
10,000,000 shares; issued 6,866,181 shares at March 31, 2015					34,330,905			34,310,905			33,365,905
Additional Paid in Capital					35,689,024			35,581,203			34,428,937
Retained Earnings					12,138,688			10,714,298			7,511,576
Unrealized Loss on Securities					(69,398)			(541,428)			(1,983,169)
Total Stockholders' Equity					82,089,219			80,064,978			73,323,249
Total Liabilities and Stockholders' Equity					$950,536,219			$950,671,396			$833,062,612

COMMUNITY NATIONAL BANK
SELECTED FINANCIAL DATA & BALANCE SHEET COMPONENTS
Unaudited
					For The Three Months Ended
					March 31,			December 31,			March 31,
					2015			2014			2014
Per Share:
Net Income-Basic					$0.21			$0.13			$0.17
Average Shares Outstanding – Basic					6,864,848			6,706,051			6,673,181
Net Income – Diluted					$0.20			$0.13			$0.16
Average Shares Outstanding – Diluted					7,082,783			6,862,322			6,813,748
Tangible Book Value					$11.96			$11.67			$10.99
Performance:
Return on Average Assets					0.61%			0.38%			0.54%
Return on Average Equity					7.04%			4.53%			6.08%
Efficiency Ratio					71.63%			74.48%			68.62%
Yield on Average Earning Assets					3.98%			4.06%			4.32%
Cost on Average Interest Bearing Liabilities					0.73%			0.76%			0.68%
Cost of Deposits					0.53%			0.54%			0.49%
Net Interest Spread					3.25%			3.30%			3.64%
Net Interest Margin					3.46%			3.53%			3.84%
					Quarter Ended
					March 31,			December 31,			March 31,
					2015			2014			2014
Capital Ratios:
Tangible Common Equity					8.64%			8.42%			8.80%
Leverage					8.74%			8.63%			9.13%
Tier 1					11.13%			11.48%			12.04%
Total Risk Based					12.38%			12.74%			13.29%
Asset Quality:
Allowance for Loan Losses to Total Loans					1.46%			1.45%			1.54%
Allowance for Loan Losses to Non-Performing Loans					166%			157%			791%
Non-Performing Loans to Total Loans					0.88%			0.92%			0.20%
Non-Performing Assets to Total Assets					0.72%			0.74%			0.16%
Annualized Quarterly Net Charge offs to Avg. Loans					-0.11%			0.12%			0.00%