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8-K - PRIMARY DOCUMENT - COMMUNITY BANCORP /VT | form8kearnings06302020.htm |
PRESS
RELEASE
Exhibit 99.1
Community
Bancorp. Reports Earnings and Dividend
July
22, 2020
|
For
immediate release
|
For
more information, contact: Kathryn M. Austin, President & CEO
at (802) 334-7915
Trading
Symbol: CMTV
(Traded
on the OTCQX)
Derby,
VT: Community Bancorp., the parent company of Community National
Bank, has reported earnings for the second quarter ended June 30,
2020, of $2,842,310 or $0.54 per share compared to $2,419,298 or
$0.46 per share for the second quarter of 2019. Year to date
earnings for 2020 are $4,703,550 or $0.89 per share compared to
$4,191,203 or $0.80 per share a year ago.
Total
assets at June 30, 2020 were $822,980,551 compared to $737,955,319
at year end and $679,538,291 at June 30, 2019. The year-over-year
asset growth has been driven by an increase in loans in the amount
of $153.5 million offset by a decrease in cash of $5.6 million and
a decrease in the investment portfolio of $3.5 million. The loan
growth year over year is partly attributable to the origination of
Paycheck Protection Program (PPP) loans. Community National Bank,
the subsidiary of the Company, participated in the Paycheck
Protection Program administered by the Small Business Association
as part of the Coronavirus Aid, Relief and Economic Security
(CARES) Act. As of June 30, 2020, Community National Bank
originated 786 loans with a total of over $98.5
million.
Net
interest income increased 4.0% and 3.2% for the quarter to date and
year to date comparative periods. With the Federal Reserve’s
150 basis point reduction in short term interest rates in March,
any increase in interest income for the quarter from loan volume
was offset by a decrease in yields earned on loans resulting in a
decrease in interest income of $70,981 for the second quarter of
2020 compared to the second quarter of 2019. The decrease in short
term rates resulted in a decrease in rates paid on deposit
accounts, borrowed funds and debentures for a decrease in interest
expense of $340,044 for the quarter comparison period and $402,191
for the six months ended June 30, 2020 compared to the six months
ended June 30, 2019.
Current
year to date provision for loan losses was $684,002 compared to
$354,169 for the same period in 2019. Increases to the provision
were partially due to loan growth early in the year as well as
adjustments to the qualitative factors used to estimate the
allowance for loan losses, particularly factors related to the
economic impact to borrowers from the COVID pandemic.
The
Company reported increases in year to date non-interest income of
$362,970 or 13.2% and $327,964 or 22.9% for the second quarter over
the same periods in 2019. Contributing to the increase in
non-interest income is an increase in income from fees related to
mortgage banking activity due to an increase in originations and
sales in the secondary market. The increase in these fees year over
year were $304,977 or 131.6% for the first six months of 2020 and
$267,601 or 207.9% for the quarter.
Non-interest
expenses decreased for the first six months of 2020 $154,312 or
1.5% over the same period last year due in part to write downs of
two OREO properties for a total of $95,008 in the second quarter of
2019 compared to a gain of $24,000 in the first six months of 2020.
Also contributing to the decrease in non-interest expenses are
decreases in travel expenses, marketing expenses, and consulting
expenses as a direct result of the current pandemic
situation.
President
and CEO Kathryn Austin commented on the second quarter results.
“During these unprecedented times, our bankers provided a
sense of stability, ensuring access to essential banking services.
We facilitated 786 PPP loans with an average loan size of $125,421,
with 644, or 82% of those loans under $150,000. This was vital
relief for small businesses and non-profit organizations in our
communities. We provided consumers access to relief payments,
information on assistance programs, and forbearance to
borrowers.
We are
pleased with the second quarter results. It is difficult to predict
the long term effects of the pandemic on the economy, our
borrowers, and the Company’s financial results. We will
continue to support our customers and communities in the days
ahead.
While
the pandemic necessitated a pivot almost overnight to a work
environment and delivery methods we had not experienced, our
employees quickly adjusted, and we rightly assumed our role in the
relief and recovery effort. I could not be more proud of our team
and the amazing work they’ve done for our customers,
shareholders and communities. It is a proud moment to be a
community banker, and we are proud to be Vermont’s Community
Bank.”
As
previously announced, the Company has declared a quarterly cash
dividend of $0.19 per share payable August 1, 2020 to shareholders
of record as of July 15, 2020.
Community
National Bank is an independent bank that has been serving its
communities since 1851, with offices located in Vermont in Derby,
Derby Line, Island Pond, Barton, Newport, Troy, St. Johnsbury,
Montpelier, Barre, Lyndonville, Morrisville, Enosburg Falls,
Burlington and Lebanon, NH.
Forward Looking Statements
This press release contains forward-looking statements, including,
without limitation, statements about the Company’s financial
condition, capital status, dividend payment practices, business
outlook and affairs. Although these statements are based on
management’s current expectations and estimates, actual
conditions, results, and events may differ materially from those
contemplated by such forward-looking statements, as they could be
influenced by numerous factors which are unpredictable and outside
the Company’s control. Factors that may cause actual results
to differ materially from such statements include, among others,
the following: (1) general economic or monetary conditions, either
nationally or regionally, continue to decline, resulting in a
deterioration in credit quality or diminished demand for the
Company’s products and services; (2) changes in laws or
government rules, or the way in which courts interpret those laws
or rules, adversely affect the financial industry generally or the
Company’s business in particular, or may impose additional
costs and regulatory requirements; (3) interest rates change in
such a way as to reduce the Company’s interest margins and
its funding sources; and (4) competitive pressures increase among
financial services providers in the Company’s northern New
England market area or in the financial services industry
generally, including pressures from nonbank financial service
providers, from increasing consolidation and integration of
financial service providers and from changes in technology and
delivery systems.