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Financial Feature - Winter 2019
By Louise Bonvechio, Treasurer, Community Bancorp. and Sr. Vice President and Chief Financial Officer and Cashier, Community National Bank
I am pleased to report that Community Bancorp., the parent company of Community National Bank, reported earnings for the year ended December 31, 2018, of $8,397,532 or $1.61 per share compared to $6,231,298 or $1.21 per share for the year ended December 31, 2017.

Consolidated assets at December 31, 2018, were $720,347,498, an increase of 8.0% from December 31, 2017. The increase in assets was due to an increase in loans of $28.5 million and an increase in overnight deposits of $21.1 million, with the increase in loans continuing to be attributable to growth in commercial loans. On December 31, 2018, the loan portfolio totaled $531,383,494 compared to $502,864,651 on December 31, 2017, an increase of 5.7%. Funding for the increase in earning assets was from an increase in deposits of $48.2 million. An increase in municipal deposits at year end contributed to the increase in overnight deposits.

The increase in the loan portfolio, along with increases in interest rates, resulted in an increase in interest income of $2,673,654, or 10.1%, for the year. The increase in rates also had a significant impact on the larger deposit base with an increase in interest expense of $1,416,698, or 46.2%, year to date. This resulted in an increase in net interest income of $1,256,956, or 5.4%, year to date. Further contributing to the Company’s results was an increase in non-interest income of $596,916, or 10.7%, year to date. The year-to-date increase in non-interest income is partly attributable to a one-time gain on sale of property of $263,118 which was directly related to the sale of a condominium unit to the Company’s affiliate, CFSG. Prior to the sale, CFSG rented this unit since its formation in 2002.

Total non-interest expense increased $728,703, or 3.8%, year to date. These increases were mostly due to increases in salaries and wages of $430,628, or 6.4%, year over year. These increases were mostly due to a one-time bonus paid and a $0.25 increase per hour to all employees, except the Executive Officers. The bonus was paid, and the increase was effective, in September 2018.

Also contributing to the increase in non-interest expense was an increase to employee benefits, due to increases in the cost of the employee health insurance plan, of $231,988, or 8.8%, for the year when compared to the prior year comparison periods.

Further contributing to the Company’s financial performance was the reduction in the federal corporate tax rate to 21% under the 2017 Tax Act resulting in a decrease in income tax expense of $1,171,065, or 40.3%, for the year compared to the same period in 2017.

The Board of Directors declared dividends of $0.74 per common share in 2018 compared to $0.68 per common share in 2017. As of December 31, 2018, the Company reported retained earnings of $17.9 million, compared to $13.4 million as of December 31, 2017, and total shareholders’ equity of $62.6 million and $57.9 million, respectively. The Company is committed to remaining a well-capitalized community bank, working to meet the needs of our customers while providing a fair return to our shareholders.