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| 8-K - FORM 8-K - CNB CORP /MI/ | d379967d8k.htm |
Exhibit 99
Quarterly Shareholder Brochure of CNB Corporation
July 13, 2012
Dear Shareholder,
We are pleased to announce the first six months of 2012 have resulted in positive income for the Corporation, well ahead of 2011. It is anticipated this trend will continue given the reduction in both other real estate owned and past due loan levels.
Highlights of financial performance for the first half of 2012 follow:
| • | Assets totaled $252.2 million as of June 30, 2012, compared to assets of $248.3 million at June 30, 2011; an increase of 1.60%. Nearly $5 million of the increase is attributable to the escrow account from the sale of Cheboygan Memorial Hospital which is expected to be liquidated by year-end. The increase in deposits is also attributable, in part, to the escrow account. |
| • | Loans on June 30, 2012 were $118.2 million, down from $126.9 million on June 30, 2011; a decrease of 6.9%. Loans at December 31, 2011 were $118.4 million. The relatively unchanged loan balance from December 31, 2011 to June 30, 2012 is an indication that new loan growth is keeping pace with loan payoffs and a sign that business and consumer confidence is returning. |
| • | Allowance for loan losses increased $1.9 million over 2011 and is now 3.4% of total outstanding loans. This reflects management’s conservative approach to potential loan losses. |
| • | Net interest income through June 30, 2012 was $3.7 million, a reduction of $249,000 over the same period in 2011. The sustained low interest rate environment continues to put pressure on both deposit and loan rates. |
| • | Net realized gains from the sale of loans for the first six months of 2012 was $338,000, compared to $67,000 for the same period in 2011. Mortgage customers are responding well to our marketing efforts and taking advantage of 15-year mortgage rates below 3%. The Company, in turn, is able to take advantage of secondary market pricing to sell the loans for increased gains. |
As noted at the 2012 annual meeting of shareholders the passage of the Jumpstart Our Business Startups (JOBS) Act earlier this year makes it possible for the Corporation to pursue deregistration. Once the deregistration process is complete shareholders will be provided with updated information on the financial reporting and stock trading process. Upon deregistration stock trades can be handled through a broker or in-house using a system similar to what was in place prior to 2007.
At the annual meeting of shareholders the previous year’s slate of directors were all reelected for another term and at the organizational meeting of the Corporation Vincent J. Hillesheim was reelected as Chairman of the Board of Directors and Thomas J. Ellenberger was reelected as Chairman of the Audit Committee. Additionally, at its June 28, 2012 meeting the Citizens National Bank Board of Directors appointed Rick A. Tromble as a new director. Locally, Rick owns Tromble Bay Farms and is a partner in Cheboygan’s Fernelius Ford dealership. His business knowledge and dedication to community make Rick a welcome addition to the board.
I continue to invite your comments and questions. Please don’t hesitate to call or stop in.
Sincerely,
Susan A. Eno
President & CEO
CNB Corporation
Consolidated Balance Sheets
(UNAUDITED)
in thousands of dollars
| June 30, | ||||||||
| 2012 | 2011 | |||||||
| ASSETS |
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| Cash and due from banks |
$ | 4,056 | $ | 3,842 | ||||
| Interest-bearing deposits with other financial institutions |
14,099 | 11,082 | ||||||
| Federal funds sold |
0 | 0 | ||||||
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| Total cash and cash equivalents |
18,155 | 14,924 | ||||||
| Time deposits with other financial institutions |
14,469 | 9,806 | ||||||
| Securities available for sale |
82,156 | 71,065 | ||||||
| Securities held to maturity (market value of $4,456 in 2012 and $ 7,699 in 2011) |
4,030 | 7,116 | ||||||
| Other securities |
997 | 997 | ||||||
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| Total investment securities |
87,183 | 79,178 | ||||||
| Loans |
118,174 | 126,954 | ||||||
| Less allowance for loan losses |
(3,978 | ) | (2,090 | ) | ||||
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| Loans, Net |
114,196 | 124,864 | ||||||
| Premises and equipment, net |
5,307 | 5,334 | ||||||
| Other assets |
12,916 | 14,149 | ||||||
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| Total assets |
$ | 252,226 | $ | 248,255 | ||||
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| LIABILITIES |
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| Deposits |
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| Noninterest-bearing demand |
$ | 54,713 | $ | 46,631 | ||||
| Interest-bearing deposits |
174,664 | 175,970 | ||||||
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| Total deposits |
229,377 | 222,601 | ||||||
| Other liabilities |
4,394 | 4,353 | ||||||
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| Total liabilities |
233,771 | 226,954 | ||||||
| SHAREHOLDERS' EQUITY |
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| Common Stock |
3,030 | 3,030 | ||||||
| Surplus |
19,499 | 19,499 | ||||||
| Retained Earnings and Accumulated other |
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| Comprehensive Income/(Loss) |
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| (4,074 | ) | (1,228 | ) | |||||
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| Total shareholders’ equity |
18,455 | 21,301 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 252,226 | $ | 248,255 | ||||
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Consolidated Statement of Income
(Unaudited)
in thousands of dollars
Six months ended June 30,
| 2012 | 2011 | 2010 | ||||||||||
| INTEREST INCOME |
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| Interest and fees on loans |
$ | 3,637 | $ | 3,884 | $ | 4,466 | ||||||
| Interest on securities: |
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| Taxable |
385 | 549 | 476 | |||||||||
| Tax exempt |
169 | 246 | 278 | |||||||||
| Other interest income |
108 | 106 | 115 | |||||||||
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| Total interest income |
4,299 | 4,785 | 5,335 | |||||||||
| INTEREST EXPENSE ON DEPOSITS |
555 | 792 | 1,129 | |||||||||
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| NET INTEREST INCOME |
3,744 | 3,993 | 4,206 | |||||||||
| Provision for loan losses |
860 | 700 | 375 | |||||||||
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| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
2,884 | 3,293 | 3,831 | |||||||||
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| NONINTEREST INCOME |
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| Service charges and fees |
488 | 498 | 515 | |||||||||
| Net realized gains from sale of loans |
338 | 67 | 80 | |||||||||
| Loan servicing fees, net of amortization |
(8 | ) | 46 | 45 | ||||||||
| Gains on the sale of assets |
400 | 0 | 0 | |||||||||
| Gains on life insurance proceeds |
0 | 0 | 189 | |||||||||
| Gain on sale of investment securities |
274 | 0 | 5 | |||||||||
| Other income |
210 | 274 | 170 | |||||||||
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| Total noninterest income |
1,702 | 885 | 1,004 | |||||||||
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| NONINTEREST EXPENSES |
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| Salaries and benefits |
2,050 | 1,966 | 1,959 | |||||||||
| Occupancy |
468 | 502 | 496 | |||||||||
| FDIC insurance premiums |
177 | 219 | 262 | |||||||||
| Expenses relating to ORE property |
(10 | ) | 204 | 265 | ||||||||
| Other expenses |
1,003 | 1,038 | 952 | |||||||||
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| Total noninterest expenses |
3,688 | 3,929 | 3,934 | |||||||||
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| INCOME BEFORE INCOME TAXES |
898 | 249 | 901 | |||||||||
| Income tax expense |
221 | (33 | ) | 129 | ||||||||
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| NET INCOME |
$ | 677 | $ | 282 | $ | 772 | ||||||
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| BASIC NET INCOME PER SHARE |
$ | 0.56 | $ | 0.23 | $ | 0.64 | ||||||
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