Community National Bank Announces Earnings for Fourth Quarter and Year-End Results for 2014

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

Community National Bank CBNY today announced fourth quarter and year-end results for 2014. Highlights for the quarter and year include:

• Net income of $0.9 million or $0.13 diluted earnings per share for the fourth quarter of 2014 compared to net income of $0.9 million or $0.14 diluted earnings per share for the same period in 2013. Net income for the 2014 fourth quarter included $0.3 million or $0.04 per share of merger related charges, net of tax, associated with the acquisition of Community National Bank in an all-stock merger by Bridge Bancorp. Inc., the parent company of Bridgehampton National Bank, which was announced on December 15, 2014.
• Net interest income increased 12% or $0.8 million to $7.8 million for the quarter ended December 31, 2014 compared to $7.0 million for the quarter ended December 31, 2013.
• Loans grew $99.1 million or 15% to $760.5 million at December 31, 2014 when compared to December 31, 2013. On a linked-quarter basis, loans increased $10.7 million or 1.4% compared to $749.8 million at September 30, 2014.
• Deposits increased $141.8 million or 21% to $828.8 million at December 31, 2014 compared to $687.0 million at December 31, 2013.
• Demand deposits grew $53.5 million or 30% to $230.6 million at December 31, 2014 compared to $177.1 million at December 31, 2013.
• The Bank capital ratios remained strong with Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of 8.63%, 11.48% and 12.74%, respectively, at December 31, 2014.

Net Income

Net income for the quarter ended December 31, 2014 was $0.9 million or $0.13 diluted earnings per share compared to net income of $0.9 million or $0.14 diluted earnings per share for the same period in 2013. Net income was flat when compared to the prior year as higher net interest income from loan growth was offset by additional loan loss provisions and merger related charges.

Net income for the year ended December 31, 2014 was $4.3 million or $0.63 diluted earnings per share compared to net income of $2.9 million or $0.44 diluted earnings per share for the year ended December 31, 2013, an increase of 46%. Net income for the year increased due to significant growth in net interest income from loan growth and additional service charge income, which were partially offset by higher personnel costs for lending, operations and compliance as well as the full year impact of facility related expenses.

Net Interest Income

For the quarter ended December 31, 2014, net interest income increased $0.8 million or 12% to $7.8 million compared to $7.0 million for the quarter ended December 31, 2013. The net interest margin decreased by 10 basis points to 3.53% for the quarter ended December 31, 2014 from 3.63% for the quarter ended December 31, 2013.

For the year ended December 31, 2014, net interest income increased $4.2 million or 16% to $30.7 million compared to $26.5 million for the year ended December 31, 2013. The net interest margin decreased by 12 basis points to 3.62% for the year ended December 31, 2014 from 3.74% for the year ended December 31, 2013.

The decline in the net interest margin for both the quarter and the year was primarily due to new loan originations carrying lower yields and existing loans re-pricing to lower rates.

Non-Interest Income

Non-interest income remained flat at $0.6 million for the quarter ended December 31, 2014 compared to $0.6 million for the prior year period.

Non-interest income increased $0.2 million or 5.3% to $3.8 million for the year ended December 31, 2014 compared to $3.6 million for the year ended December 31, 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 $0.6 million or 10% to $6.3 million for the quarter ended December 31, 2014 compared to $5.7 million for the same period in 2013. Non-interest expense increased $3.1 million or 14% to $24.5 million for the year ended December 31, 2014 compared to $21.4 million for the year ended December 31, 2013.

The increase for both the quarter and year reflects the impact of a full year of expenses related to two new facilities and the employment of additional personnel in lending, credit administration, compliance and operations to support the growth in assets. The increase also included $0.5 million in merger related charges incurred during the fourth quarter.

Balance Sheet

Total assets grew to $950.7 million at December 31, 2014, an increase of $132.1 million or 16% when compared to total assets of $818.6 million at December 31, 2013. The commercial loan portfolio increased $70.8 million or 15% when compared to December 31, 2013 and the residential loan portfolio increased $28.3 million or 14% when compared to December 31, 2013. Loans were funded primarily by the growth in deposits.

Total deposits increased $141.8 million or 21% to $828.8 million at December 31, 2014 from $687.0 million at December 31, 2013. Demand deposits grew $53.5 million or 30% to $230.6 million at December 31, 2014 when compared to December 31, 2013. The increase was due primarily to additional commercial business relationships. Demand deposits represented 28% of total deposits at December 31, 2014. NOW, savings and money market deposits increased $47.5 million or 15% to $364.3 million at December 31, 2014 from $316.8 million at December 31, 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 $7.0 million or 0.92% of total loans at December 31, 2014 compared to $1.2 million or 0.18% of total loans at December 31, 2013. The increase was mostly attributable to two loans totaling approximately $5.4 million being placed on non-accrual basis. The Bank recorded $0.6 million in provision for loan losses during the fourth quarter of 2014 compared to $0.3 million for the fourth quarter of 2013.

The allowance for loan losses was $11.0 million or 1.45% of total loans at December 31, 2014, an increase of $1.6 million from $9.4 million or 1.42% of total loans at December 31, 2013. The Bank had net charge-offs of $0.2 million during the fourth quarter of 2014 and $1.0 million for the year ended December 31, 2014.

The Bank did not own any foreclosed properties at December 31, 2014 and December 31, 2013, 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 December 31, 2014 Call Report on or around January 30, 2015.

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 Twelve Months Ended
	December 31,			December 31,			December 31,			December 31,
	2014			2013			2014			2013
Interest Income:
Commercial Loans	$6,495,663			$5,672,443			$25,107,979			$21,151,026
Residential and Consumer Loans	1,916,549			1,738,300			7,367,590			6,752,885
Securities	626,761			609,843			2,496,564			2,285,048
Money Market Investments	25,643			20,428			44,932			53,846
Total Interest Income	9,064,616			8,041,014			35,017,065			30,242,805
Interest Expense:
NOW, Savings & Money Market	329,672			328,531			1,233,441			930,361
Certificates of Deposit	772,105			608,736			2,742,561			2,370,573
Borrowed Funds	90,166			75,860			372,969			482,056
Total Interest Expense	1,191,943			1,013,127			4,348,971			3,782,990
Net Interest Income	7,872,673			7,027,887			30,668,094			26,459,815
Provision For Loan Losses	610,000			373,000			2,690,000			4,003,000
Net Interest Income After Provision for Loan Losses	7,262,673			6,654,887			27,978,094			22,456,815
Non-Interest Income:
Service Charges	375,092			331,778			1,424,042			1,147,897
Servicing & Other Income	119,963			167,308			575,945			540,435
Gain on Sale of Investments	43,760			-			64,192			29,439
Gain on Sale of Loans	6,459			26,237			1,205,677			1,342,162
BOLI Income	139,515			151,206			589,777			605,703
Total Non-Interest Income	684,789			676,529			3,859,633			3,665,636
Non-Interest Expense:
Compensation and Benefits	3,205,963			2,836,429			12,562,411			10,688,891
Occupancy and Equipment	1,509,916			1,388,281			5,986,739			5,381,344
Advertising	4,148			49,321			102,015			223,032
Other Expenses	1,653,325			1,499,655			5,868,234			5,134,232
Total Non-Interest Expense	6,373,352			5,773,686			24,519,399			21,427,499
Income Before Income Taxes	1,574,110			1,557,730			7,318,328			4,694,952
Provision For Income Taxes	693,980			596,387			3,010,971			1,743,303
Net Income	$880,130			$961,343			$4,307,357			$2,951,649
Earnings Per Share:
Basic	$0.13			$0.14			$0.64			$0.44
Diluted	$0.13			$0.14			$0.63			$0.44
Weighted Average Shares Outstanding – Basic	6,706,051			6,673,181			6,681,466			6,673,181
Weighted Average Shares Outstanding – Diluted	6,862,322			6,796,064			6,855,335			6,774,277

COMMUNITY NATIONAL BANK STATEMENTS OF INCOME Unaudited
			For the Three Months Ended
			December 31,			September 30,			June 30,			December, 31
			2014			2014			2014			2013
Interest Income:
Commercial Loans			$6,495,663			$6,492,204			$5,930,011			$5,672,443
Residential and Consumer Loans			1,916,549			1,896,659			1,810,821			1,738,300
Securities			626,761			597,278			640,178			609,843
Money Market Investments			25,643			11,645			3,577			20,428
Total Interest Income			9,064,616			8,997,786			8,384,587			$8,041,014
Interest Expense:
NOW, Savings & Money Market			329,672			324,750			283,207			328,531
Certificates of Deposit			772,105			771,647			633,285			608,736
Borrowed Funds			90,166			93,868			102,541			75,860
Total Interest Expense			1,191,943			1,190,265			1,019,033			1,013,127
Net Interest Income			7,872,673			7,807,521			7,365,554			7,027,887
Provision For Loan Losses			610,000			565,000			540,000			373,000
Net Interest Income After Provision for Loan Losses			7,262,673			7,242,521			6,825,554			6,654,887
Non-Interest Income:
Service Charges			375,092			368,935			355,939			331,778
Servicing & Other Income			119,963			176,788			177,818			167,308
Gain on Sale of Investments			43,760			-			-			-
Gain on Sale of Loans			6,459			405,169			121,024			26,237
BOLI Income			139,515			160,015			148,321			151,206
Total Non-Interest Income			684,789			1,110,907			803,102			676,529
Non-Interest Expense:
Compensation and Benefits			3,205,963			3,142,732			3,071,264			2,836,429
Occupancy and Equipment			1,509,916			1,500,284			1,455,135			1,388,281
Advertising			4,148			1,855			44,969			49,321
Other Expenses			1,653,325			1,438,479			1,395,784			1,499,655
Total Non-Interest Expense			6,373,352			6,083,350			5,967,152			5,773,686
Income Before Income Taxes			1,574,110			2,270,078			1,661,504			1,557,730
Provision For Income Taxes			693,980			967,990			641,000			596,387
Net Income			$880,130			$1,302,088			$1,020,504			$961,343
Earnings Per Share:
Basic			$0.13			$0.20			$0.15			$0.14
Diluted			$0.13			$0.19			$0.15			$0.14
Weighted Average Shares Outstanding – Basic			6,706,051			6,673,181			6,673,181			6,673,181
Weighted Average Shares Outstanding – Diluted			6,862,322			6,836,003			6,845,990			6,796,064

COMMUNITY NATIONAL BANK STATEMENTS OF CONDITION Unaudited
			December 31,			September 30,			June 30,			December, 31
			2014			2014			2014			2013
Assets:
Cash and Due From Banks			$15,092,542			$14,206,744			$12,876,224			$8,783,780
Money Market Investments			45,121,637			41,449,611			28,984,287			2,102,723
Securities – Available-for-Sale			84,288,861			93,370,412			96,991,395			100,894,759
Securities – Held-to-Maturity			8,229,963			8,605,371			8,989,549			6,053,339
Restricted Stock			4,580,100			4,605,100			4,924,950			5,408,850
Total Securities			97,098,924			106,580,883			110,905,894			112,356,948
Commercial Loans			534,876,102			529,813,930			509,189,897			464,037,616
Residential & Consumer Loans			225,637,144			220,032,946			214,296,552			197,350,345
Gross Loans Held-For-Investment			760,513,246			749,846,876			723,486,449			661,387,961
Less: Allowance For Loans Losses			(11,008,163)			(10,629,364)			(10,897,125)			(9,383,788)
Net Loans Held-For-Investment			749,505,083			739,217,512			712,589,324			652,004,173
Premises and Equipment, net			10,007,801			10,298,002			10,529,647			11,116,968
Bank Owned Life Insurance (“BOLI”)			22,689,337			22,549,822			22,389,807			20,099,560
Other Assets			11,156,072			10,713,315			10,588,820			12,118,062
Total Assets			$950,671,396			$945,015,889			$908,864,003			$818,582,214
Liabilities and Stockholders' Equity:
Deposits:
Demand			$230,608,244			$224,352,849			$220,648,870			$177,107,547
NOW, Savings & Money Market			364,278,786			359,236,060			331,320,846			316,807,903
Certificates of Deposit			233,914,633			242,588,408			238,321,973			193,134,562
Total Deposits			828,801,663			826,177,317			790,291,689			687,050,012
FHLB Advances			35,891,243			36,448,268			37,178,305			54,921,135
Accrued Expenses and Other Liabilities			5,913,512			5,857,278			6,148,817			4,985,420
Total Liabilities			870,606,418			868,482,863			833,618,811			746,956,567
Stockholders' Equity:
Common Stock, par value $5.00; authorized
10,000,000 shares; issued 6,673,181 shares			34,310,905			33,365,905			33,365,905			33,365,905
Additional Paid in Capital			35,581,203			34,566,573			34,496,707			34,362,152
Retained Earnings			10,714,298			9,834,168			8,532,080			6,406,941
Unrealized Loss on Securities			(541,428)			(1,233,620)			(1,149,500)			(2,509,351)
Total Stockholders' Equity			80,064,978			76,533,026			75,245,192			71,625,647
Total Liabilities and Stockholders' Equity			$950,671,396			$945,015,889			$908,864,003			$818,582,214

COMMUNITY NATIONAL BANK SELECTED FINANCIAL DATA & BALANCE SHEET COMPONENTS Unaudited
			For The Three Months Ended						For The Twelve Months Ended
			December 31,			December 31,			December 31,			December 31,
			2014			2013			2014			2013
Per Share:
Net Income-Basic			$0.13			$0.14			$0.64			$0.44
Average Shares Outstanding – Basic			6,706,051			6,673,181			6,681,466			6,673,181
Net Income – Diluted			$0.13			$0.14			$0.63			$0.44
Average Shares Outstanding – Diluted			6,862,322			6,796,064			6,855,335			6,774,277
Tangible Book Value			$11.67			$10.73			$11.67			$10.73
Performance:
Return on Average Assets			0.38%			0.47%			0.49%			0.40%
Return on Average Equity			4.53%			5.35%			5.73%			4.09%
Efficiency Ratio			74.48%			74.94%			71.01%			71.13%
Yield on Average Earning Assets			4.06%			4.16%			4.14%			4.28%
Cost on Average Interest Bearing Liabilities			0.76%			0.74%			0.73%			0.76%
Cost of Deposits			0.54%			0.53%			0.52%			0.53%
Net Interest Spread			3.30%			3.42%			3.41%			3.51%
Net Interest Margin			3.53%			3.63%			3.62%			3.74%
			Quarter Ended
			December 31,			September 30,			June 30,			December 31,
			2014			2014			2014			2013
Capital Ratios:
Tangible Common Equity			8.42%			8.10%			8.28%			8.75%
Leverage			8.63%			8.42%			8.94%			9.12%
Tier 1			11.48%			11.15%			11.42%			11.91%
Total Risk Based			12.74%			12.40%			12.68%			13.16%
Asset Quality:
Allowance for Loan Losses to Total Loans			1.45%			1.42%			1.51%			1.42%
Allowance for Loan Losses to Non-Performing Loans			157%			541%			402%			800%
Non-Performing Loans to Total Loans			0.92%			0.26%			0.37%			0.18%
Non-Performing Assets to Total Assets			0.74%			0.21%			0.30%			0.14%
Annualized Quarterly Net Charge offs to Avg. Loans			0.12%			0.45%			0.00%			-0.04%
Yield on Average Earning Assets			4.06%			4.08%			4.10%			4.16%
Cost on Average Interest Bearing Liabilities			0.76%			0.76%			0.71%			0.74%
Cost of Deposits			0.54%			0.55%			0.51%			0.53%
Net Interest Spread			3.30%			3.32%			3.39%			3.42%
Net Interest Margin			3.53%			3.54%			3.60%			3.63%