Attached files
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| 8-K - CURRENT REPORT - COMMUNITY BANCORP /VT | cmtv-20201231.htm |
Exhibit 99.1
PRESS RELEASE
Community
Bancorp. Reports Earnings and Dividend
|
October
20, 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 third quarter ended September
30, 2020, of $2,880,443 or $0.54 per share compared to $2,261,943
or $0.43 per share for the third quarter of 2019. Year to date
earnings for 2020 are $7,583,992 or $1.43 per share compared to
$6,453,146 or $1.23 per share a year ago.
Total
assets at September 30, 2020 were $868,853,092 compared to
$737,955,319 at year end and $729,231,941 at September 30, 2019.
The asset growth has been driven by an increase in loans in the
amount of $131.3 million in the year to date comparison and $134.1
million in the year-over-year comparison. This loan growth is
largely attributable to the origination of Paycheck Protection
Program (“PPP”) loans. Community National Bank, the
subsidiary of the Company, participated in the PPP administered by
the Small Business Administration (“SBA”) as part of
the Coronavirus Aid, Relief and Economic Security
(“CARES”) Act. As of September 30, 2020, the PPP loan
portfolio totaled $100.2 million. The balance of the loan growth of
$31.0 million and $33.9 million was mostly due to an increase in
commercial loans in both periods.
Net
interest income increased $688,665, or 10.0% and $1.0 million, or
5.4% for the quarter to date and year to date comparative periods.
While loan growth is supporting interest income, the opportunity
for an increase in interest income is offset by the impact of the
low rate environment on new loan originations and interest rate
adjustments on adjustable rate loans, as well as the mandated 1%
interest rate on the PPP loans. The processing fees from the SBA of
$453,505 and $1.0 million for the quarter to date and year to date
comparison periods as well as a decrease in interest expense of
$458,254, or 30.4% and $860,444, or 18.7% for those same periods
contributed to the increase in net interest income compared to the
periods ended September 30, 2019. Although deposit balances have
increased year to date by $128.0 million, or 20.8% and $136.6
million, or 22.5%, year over year, the lower interest rates and
significant increases in non-interest bearing demand deposit
accounts provided for the decrease in interest
expense.
Current
year to date provision for loan losses was $1,046,501 compared to
$766,668 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
$706,934 or 16.3% and $343,963 or 21.5% for the third quarter over
the same periods in 2019. Contributing to this increase is an
increase in income from fees related to mortgage banking activity
due to an increase in originations and sales in the secondary
market. Loan originations that were subsequently sold in the
secondary market were $12.3 million for the third quarter compared
to $1.7 million for the same period in 2019 resulting in gains on
sale of loans of $601,825 and 203,175 for the third quarter
comparison periods. Loan originations of $31.9 million for the
first nine months of 2020 compared to $7.5 million for the same
period in 2019 resulting in gains on sale of loans of $1.1 million
and $434,951 for the nine months comparison periods.
Non-interest
expenses for the third quarter ended September 30, 2020 were $5.1
million compared to $4.9 million for the same period in 2019, an
increase of 5.0%. Non-interest expenses for the first nine months
of 2020 of $15.2 million compares to $15.1 million for the same
period in 2019, an increase of 0.6%. The year to date comparison
period was impacted by write down adjustments of two OREO
properties for a total of $151,427 in the second quarter of 2019
compared to a gain of $32,230 during the third quarter of 2020.
Travel expenses, marketing expenses, and consulting expenses are
also lower in 2020, as a direct result of the current pandemic
situation. It is uncertain if these expenses will be shifted into
the fourth quarter or into 2021.
President
and CEO Kathryn Austin commented on the second quarter
results.
“The
third quarter saw a return to a more normal cadence of the business
of banking. We continued to serve our customers and communities
with PPP and other loans to businesses, as well as through the
strong demand for real estate mortgages in this low rate
environment. Our participation in the PPP program introduced us to
many new customers, and we look forward to strengthening these
relationships.
During
this time, we continued our ongoing support of our communities by
sponsoring events, contributing to food pantries and purchasing
weekly meals for essential workers, including our own essential
employees. Working together, we demonstrated the value of bankers
as neighbors, trusted advisors and fellow humans. I couldn’t
be more proud of the amazing work our team has done for our
customers, shareholders and communities.
We are
pleased with the third 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.”
As
previously announced, the Company has declared a quarterly cash
dividend of $0.19 per share payable November 1, 2020 to
shareholders of record as of October 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.