MORRISTOWN, Tenn., Feb. 20 /PRNewswire-FirstCall/ -- Community National Bank of the Lakeway Area today reported results for the fourth quarter and year ended December 31, 2006. Net income for the fourth quarter was $120 thousand, or $0.07 per basic and diluted share, compared with a loss of $(114) thousand, or $(0.12) per share for the prior year period. Year to date net income was $161 thousand, or $0.12 per basic and diluted share, compared with a loss of $(412) thousand or $(0.42) per share for the prior year period. Highlights for the year of 2006 include:
* Community National Bank reported its third consecutive quarterly profit
and first annual profit for the period ended December 31, 2006. Based
on current trends, management expects profitability to continue to
increase, as the net interest margin continues to climb, loan demand has
continued to be steady, and economies of scale continue to have a
positive effect on earnings.
* The net interest margin for the quarter ended December 31, 2006 was
3.39% as compared to 2.70% for the same period in 2005. For the year,
the net interest margin increased from 2.83% in 2005 to 3.00% in 2006.
The increase in net interest margin is attributable to two factors.
First, the increase in earning assets as a result of the public stock
offering completed in August of 2006, and secondly, the significant
increase in the loan-to-deposit ratio from approximately 70.6% to 96.2%
during the year.
* Total assets grew 12.5% for the year from $92.7 million at December 31,
2005 to $104.3 million at December 31, 2006. This growth has primarily
resulted from growth in the loan portfolio, which was up 36.2% during
the year, from $53.0 million at December 31, 2005 to $72.2 million at
December 31, 2006. The Bank's loan-to-deposit ratio rose to 96.2% at
December 31, 2006, compared to 70.6% at December 31, 2005. Management
is targeting a loan-to-deposit ratio of at least 85% on an ongoing
basis.
* As a result of not replacing brokered deposits as they matured during
the year, total deposits decreased by 0.1% from $75.9 million at
December 31, 2005 to $75.8 million at December 31, 2006. Core deposits
(total deposits less brokered deposits) increased by 12.6% during the
year, from $66.0 million to $74.3 million. The majority of the increase
in core deposits was in demand deposits which increased from $6.7
million at December 31, 2005 to $9.9 million at December 31, 2006 and
certificates of deposit under $100,000 which increased from $17.6
million to $20.9 million for the same period. Currently, brokered
deposits account for approximately 2% of total deposits.
Samuel F. Grigsby, Jr., CEO of Community National Bank of the Lakeway Area, commented "In the fourth quarter of 2006, the Bank continued the positive trend of increasing interest margins and increasing noninterest income, with the result being our third consecutive quarter of profitability. I am pleased by our progress, and look forward to reporting continuing profits to our shareholders."
During the third quarter of 2006, Community National Bank also completed the sale of 800,000 shares of its common stock at an offering price of $11.00 per share through a rights offering to its shareholders and a best-efforts offering underwritten by McKinnon & Company, Inc. The Bank sold 137,685 shares in the rights offering to its shareholders of record on June 23, 2006, and 662,315 shares to the public. Shares of Community National Bank of the Lakeway Area common stock began trading Wednesday, August 16th, on the NASDAQ Capital Market under the symbol "CNLA." This new capital raised the maximum loan to one borrower to slightly over $2 million, and will allow the Bank to better compete in the small business area, which is a large segment of its market.
About Community National Bank of the Lakeway Area
Community National Bank of the Lakeway Area is a national bank headquartered in Morristown, Tennessee, that opened for business on April 9, 2003, with a branch in Jefferson City, fifteen miles south of Morristown. Community National Bank of the Lakeway Area is one of the four independent banks headquartered in the Morristown Metropolitan Statistical Area. At December 31, 2006, Community National Bank of the Lakeway Area had total assets of $104.3 million, net loans of $72.2 million, deposits of $75.8 million, and shareholders' equity of $14.3 million. Shares of Community National Bank of the Lakeway Area common stock are listed and traded on the NASDAQ Capital Market under the symbol "CNLA".
This press release contains forward-looking statements concerning Community National Bank of the Lakeway Area's future activities. Such statements are subject to important factors that could cause Community National Bank of the Lakeway Area's actual results to differ materially from those anticipated by the forward-looking statements. These factors include the factors identified in Community National Bank of the Lakeway Area's Annual Report on Form 10-KSB for the year ended December 31, 2005 under the heading "Risk Factors" which are incorporated herein by reference.
Community National Bank of the Lakeway Area
Financial Highlights
(Unaudited)
Three-Months Ended December 31, Year Ended December 31,
% %
2006 2005 Change 2006 2005 Change
All dollars in thousands except per share data
EARNINGS
Net interest
income $820 $565 45.1 % $2,836 $2,049 38.4 %
Provision for
loan losses 60 52 15.4 % 209 131 59.5 %
Noninterest
income 129 86 50.0 % 446 319 39.8 %
Noninterest
expense 769 713 7.9 % 2,912 2,649 9.9 %
Income taxes 0 0 0 % 0 0 0 %
Net income 120 (114) 205.3 % 161 (412) 139.1 %
PER SHARE INFORMATION
Earnings per
share, basic $0.07 $(0.12) 158.3 % $0.12 $(0.42) 128.6 %
Dividends per
share 0 0 0 0 0 0
Book value
per share 7.89 5.64 39.9 % 7.89 5.64 39.9 %
OPERATING RATIOS (1)
Net interest
margin 3.39 % 2.70 % 3.00 % 2.83 %
Return on
average
assets 0.47 % (0.52%) 0.16 % (0.54%)
Return on
average
equity 3.38 % (8.08%) 1.82 % (6.91%)
Efficiency
ratio 81.1 % 109.5 % 88.7 % 111.9 %
Net charge
offs /
average
loans 0.01 % 0.01 % 0.04 % 0.04 %
AVERAGE BALANCES
Loans $ 67,555 $ 51,985 30.0 % $ 61,444 $ 45,490 35.1 %
Total earning
assets 96,813 83,780 15.6 % 94,484 72,329 30.6 %
Total assets 102,356 88,007 16.3 % 98,896 76,553 29.2 %
Deposits 73,883 71,126 3.9 % 77,789 65,732 18.3 %
Borrowed
funds 13,658 10,825 26.2 % 11,735 4,539 158.5 %
Shareholders'
equity 14,206 5,647 151.6 % 8,864 5,965 48.6 %
As of December 31, %
END OF PERIOD BALANCES 2006 2005 Change
Loans $ 72,971 $ 53,569 36.2 %
Reserve for loan
losses 734 547 34.2 %
Total earning assets 98,568 88,202 11.8 %
Total assets 104,348 92,714 12.5 %
Deposits 75,823 75,877 (0.1%)
Borrowed funds 13,631 10,740 26.9 %
Shareholders' equity 14,300 5,659 152.7 %
ASSET QUALITY (END OF PERIOD)
Loans 90 days past due
and still accruing $ 0 $ 18
Nonaccrual loans 295 22
Other real estate
owned 0 0
Total nonperforming assets 295 40
Nonperforming assets /
total assets 0.28 % 0.04 %
Allowance for loan
losses / total loans 1.01 % 1.02 %
(1) All ratios are annualized.
