Bank Notes - Spring 2019

What is a community?

It’s welcoming 170 of our shareholders to the Community Bancorp. Annual Meeting, where we have the opportunity to inform, share and celebrate some of the successes of the past year. There is important business to be conducted, of course, but it is also a time to catch up with some old friends and make new ones. It is somewhat unique that so many shareholders turn out for a publicly-traded company’s annual meeting. We appreciate this uniqueness and the support it represents.

It’s the culture that has been created and nurtured in our workplace that provides an environment conducive to teamwork, collaboration, communication and growth. This newsletter highlights some recent promotions of deserving individuals and there are many others supporting our collective work moving us forward.

It’s being awarded Vermont’s North Country Chamber of Commerce Impact Business of the Year for 2019. The award recognized the bank’s support of some special events such as Newport’s Centennial Celebration and the impactful work of the ReNewport project. It’s our responsibility as a good corporate citizen to provide financial support to non-profits and their work. And, it’s our employees’ involvement on boards and committees working to enhance the lives of their friends and neighbors.

We continue to work to add value to our customers’ lives, to strengthen our communities and to contribute to our economy. It’s our responsibility and our commitment. After all, it’s in our name. I’m thankful for the opportunity to serve this bank, our communities and you. I enjoy hearing from our customers and community members, so please feel free to give me a call or stop by for a visit. It would be my pleasure to meet you.

I am pleased to report that Community Bancorp., the parent company of Community National Bank, reported earnings for the first quarter ended March 31, 2019, of $1,771,905 or $0.34 per share compared to $1,982,543 or $0.38 per share for the first quarter of 2018. Also announced during the quarter was a quarterly cash dividend of $0.19 per common share, payable on May 1, 2019, to shareholders of record on April 15, 2019.

Total assets for the Company at the end of the quarter were $706,733,113 compared to $720,347,498 at year end 2018 and $665,971,750 at the end of the quarter a year ago. The decrease in total consolidated assets from year-end is mostly due to a decrease in cash and overnight deposits of $15.9 million which was used to offset seasonal deposit outflows of $17.8 million. Total deposit balances have increased $32.6 million, or 5.9%, year over year. The $40.7 million increase in assets, year over year, was due mostly to an increase in loans of $26.9 million during 2018 and an increase in overnight deposits of $12.1 million. At quarter-end, the loan portfolio balances remained flat from year-end 2018.

The decrease in total deposits of $17.8 million since December 31, 2018, was due primarily to the runoff of a large balance account at year-end with one municipal customer, which had been expected. The year-over-year increase in deposits of $32.7 million was largely due to increases in interest-bearing transaction accounts of $29.5 million, or 22.4%, and other time deposits of $15.6 million, or 16.6%. The increase in interest-bearing transaction accounts is due to increases in all categories, while the increase in wholesale time deposits is predominantly due to the use of brokered deposits as an alternative to short-term borrowing from the Federal Home Loan Bank of Boston.

Interest income increased $921,530, or 13.6%, for the first quarter of 2019 compared to the same quarter in 2018. Interest expense increased $669,791, or 77.1%, for the first quarter of 2019 compared to the same quarter in 2018. The increase in interest income is due to the higher average loan balances, which exceeded the three month comparison period by $25.0 million, or 4.5%, as well as the continued increases in short-term rates. While the increase in short-term rates is having a positive impact on interest income, it is also continuing to put upward pressure on interest rates paid on deposit accounts and other borrowings.

On March 31, 2019, the Company completed a second partial redemption of its outstanding Series A non-cumulative perpetual preferred stock. Five shares were redeemed at par, at an aggregate redemption price of $500,000, plus accrued dividends. The Company completed a similar partial redemption of five shares of its preferred stock on March 31, 2018.

As of March 31, shareholders’ equity has grown to $63.6 million with a book value per share of $11.97 compared to $58.3 million and $10.99 per share as of March 31, 2018.

We are pleased to recognize employees that are celebrating service milestones and important life events. Our organization is fortunate to have such a dedicated group of employees. Our Wellness Committee continues to offer healthy living activities and recently accepted a Governor’s Excellence in Worksite Wellness Award.

Service Awards

• 5-year awards were celebrated by St. Johnsbury Vice President and Commercial Loan Officer Mark Clough and Barre Commercial Loan Officer David Rubel.
• A 10-year award goes out to Kelly Mayhew, Certified Teller in our Newport Office.

Baby News

• Derby Electronic Banking Assistant Cassandra Griffin and husband Chance welcomed a new baby girl Larissa on February 26. She joins proud big sister Savannah.
• Derby Loan Servicing Representative Amber Bernier and Brent Ming celebrated the birth of their daughter Raelynn on March 13.
• Derby Compliance Assistant Andrew Plante and wife Shaylyn celebrated their first child together, a son, Landon born on April 29. He joins big brother Caleb.

Retirement News
Derby Vice President and Chief Technology Officer France Lambert retired after 24 years. France worked in the bank’s Loan and Trust departments before finding her niche in Information Technology. She has been instrumental in guiding the bank through the rapid evolution of technology, including the bank’s customer-facing electronic banking services necessary in today’s world. We wish France all the best as she retires and thank her for the many years of dedicated service!

CNB Recognized for Worksite Wellness
Our Wellness Committee accepted a Governor’s Excellence in Worksite Wellness Award at the Worksite Wellness Conference in Burlington on March 21. Each year the Vermont Department of Health and the Governor’s Council on Physical Fitness and Sports honor Vermont businesses for their efforts to promote health and wellness in the workplace.

The bank’s Wellness Committee offers engaging activities that encourage physical fitness, healthy eating habits and emotional health. Our employees have welcomed the opportunities provided by the Committee to learn about health-related topics and to participate in activities. CNB is honored to have received the Gold Level award for the Governor’s Excellence in Worksite Wellness.

Join the Community Circle Club for “Fort Ticonderoga Battle” Re-enactment: Montcalm’s Cross

• Meet the British and Provincial soldiers.
• Tour the Carillon Battlefield and discover how this battlefield preserves both the memory and remains of the battle.
• Follow the drummers of the French Army as they provide musical escorts.
• Join Fort Ticonderoga's expert staff for detailed presentations and historic trades.
• Explore the breathtaking King’s Garden during featured narrated tours.

The price for this excursion is $89.00 per person, which includes deluxe motor coach transportation and admission. Please call Community Circle Director Linda Cloutier or Community Circle Assistant Julie Mossa at 334-7915 for a detailed itinerary.

Financial Planning for Every Stage of Life

Whether you are just starting out on your own or in full retirement, it makes sense to have a financial plan.

As you start out, you need to develop a plan to begin saving for retirement, pay back student loans and make major purchases such as a vehicle or house. These actions could be made even more complicated when you integrate the finances of a spouse or significant other.

As you enter midlife, the myriad of financial issues get even more complex. At this point, you may be in the “sandwich generation” meaning that you are responsible for your children and perhaps aging parents. Retirement savings takes on an even greater priority in midlife when you realize that the last decade just flew by. You should determine if your retirement account(s) are invested appropriately and whether you are on track to reach your retirement goal(s). At the midlife stage you will also need to assess your income tax situation and develop tax efficient investment strategies. Other midlife items that take on more importance are saving for education costs and building up a rainy day fund.

As you near retirement, you will need to continue the steps you took earlier in life and also consider estate planning, nursing home costs and a retirement timeframe. If you were proactive in taking steps during your starting-out stage and midlife stage, this stage shouldn’t be too scary. If not, there may be some catching up to do.

As you enjoy your retirement years, you will want to make sure that your retirement assets are invested appropriately to produce income for your basic needs as well as leisure and travel activities. At this stage it would also be prudent to reassess your estate plan, plan for charitable contributions and consider the alternatives for financing long-term care costs.

Community Financial Services Group manages $800 million for hundreds of individuals, families and non-profit organizations. If you are interested in meeting with a CFSG representative for unbiased investment and financial planning advice, please call 877-334-1677. Our Trust Officers can meet with you at any Community National Bank office or other convenient location.

Community Financial Services Group, LLC (CFSG) is the Trust and Investment management affiliate of Community National Bank. CFSG accounts are:

• not deposits or other obligations of the bank
• not guaranteed by the bank
• not insured by the FDIC; and
• the investments are subject to risk, including the possible gain or loss of principal.

Clausing and Findlay Recognized for Community Service

Newark, VT—Community National Bank Marketing Assistant Tia Judd had the privilege of presenting Jan Clausing and John Findlay with the bank’s Community Service Award. This award was created to recognize remarkable people who give back to our communities making them better places to live, work and grow.

For several years Jan and John have volunteered countless hours assisting with major renovation projects and the maintenance of the Newark Union Church. They take care of repairs as needed, help to maintain the electrical system, the ancient round oak wood stove and the upkeep of the grounds. They get the church ready for the annual Old Home Day Festival, sunrise Easter services, weddings and celebrations of life. They work closely with Jo Ann Clausing who has also been a longtime volunteer of the church.

Jan and John are active members of several other organizations. Jan is a volunteer at the Lyndonville Welcome Center, a 30-year member of the St. Johnsbury Players, currently serving as Vice President, Newark Supervisor of the Northeast Kingdom Waste Management District and a Board Member of Lyndon Rescue. John is a member of Faith In Action, the Lyndon Historical Society, the Vail Museum at Northern Vermont University-Lyndon and a Board Member of the Darling Inn Meal Site.

CNB is proud to present Mr. Clausing and Mr. Findlay with the bank’s Community Service Award for the first quarter of 2019. The bank recognizes our recipients by making a $500.00 contribution to a local non-profit organization of the recipient’s choice. Jan and John have requested that their donation be made to the Newark Union Church.

For more information about this award and to nominate a deserving neighbor, visit communitynationalbank.com or contact Marketing Assistant Anne Quirion at 802-487-3513 or [email protected].