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| 8-K - 8-K - CNB CORP /MI/ | d427509d8k.htm |
Exhibit 99
Quarterly Shareholder Brochure of CNB Corporation
October 19, 2012
Dear Shareholder,
Third quarter financial results remain on track and earnings for the first nine months of 2012 were encouraging. Highlights of financial performance through September 30, 2012 follow:
| • | Total assets were $262.1 million, an increase of nearly 1% compared to 2011. |
| • | Loans were $110.8 million, down from $118.2 on June 30, 2012; a decrease of 6.2%. The decline was due in part to three large commercial credits that refinanced with larger financial institutions outside of our market area for better rates. |
| • | Allowance for loan losses increased $605,000 over 2011. Management believes the loan loss provision is sufficient given the decline in the level of problem loans as well as the low delinquency level. |
| • | Net income was $1 million, compared to a net loss of $1.4 million through September 30, 2011. |
| • | Net realized gains from sale of loans increased $384,000 over the same period last year. Mortgage customers continue to refinance taking advantage of lower interest rates. |
| • | Net interest margin of 3.23% continues to be a challenge given the decline in loan activity and the increase in deposits. Management’s efforts are focused on increasing loans and earnings to positively impact net interest income. |
As reported in the second quarter message, with the increase in the shareholder threshold resulting from passage of the Jumpstart Our Jobs Act, the Corporation submitted its notice of deregistration to the Securities and Exchange Commission on August 6 and anticipates it will become effective by early November. Once the deregistration process is complete shareholders will be provided with information on the financial reporting and stock trading process.
I am pleased to announce that at its October 11, 2012 meeting the Citizens National Bank Board of Directors appointed Thomas J. Redman as a new director. His family owns and has operated Tube Fab in Afton, Michigan since 1970, a tube fabrication and assembly company that has a current employment base of over 130. Tom assumed the position as Tube Fab’s president in 1998. His business and manufacturing knowledge, as well as his longstanding commitment to the area, makes Tom a welcome addition to the board.
Lastly, James C. Conboy, Jr. has announced his retirement from both the CNB Corporation and Citizens National Bank boards effective October 31, 2012. Jim has been a board member since 1983 and has been associated with the bank since the early 1970s when he and his family moved to the area. In his retirement Jim intends to spend more time with his family and peddling the beautiful bike trails that he has been so instrumental in bringing to our area. We thank Jim for his years of service and wish Jim and his wife Sue the very best.
Sincerely,
Susan A. Eno
President & CEO
Consolidated Balance Sheets
(UNAUDITED)
in thousands of dollars
| September 30, | ||||||||
| 2012 | 2011 | |||||||
| ASSETS |
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| Cash and due from banks |
$ | 3,913 | $ | 10,101 | ||||
| Interest-bearing deposits with other financial institutions |
14,389 | 20,802 | ||||||
| Federal funds sold |
0 | 0 | ||||||
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| Total cash and cash equivalents |
18,302 | 30,903 | ||||||
| Time deposits with other financial institutions |
14,040 | 11,511 | ||||||
| Securities available for sale |
98,955 | 69,324 | ||||||
| Securities held to maturity (market value of $4,991 in 2012 and $5,946 in 2011) |
4,572 | 5,489 | ||||||
| Other securities |
997 | 997 | ||||||
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| Total investment securities |
104,524 | 75,810 | ||||||
| Loans |
110,811 | 124,950 | ||||||
| Less allowance for loan losses |
(3,568 | ) | (2,963 | ) | ||||
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| Loans, Net |
107,243 | 121,987 | ||||||
| Premises and equipment, net |
5,220 | 5,280 | ||||||
| Other assets |
12,809 | 14,357 | ||||||
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| Total assets |
$ | 262,138 | $ | 259,848 | ||||
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| LIABILITIES |
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| Deposits |
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| Noninterest-bearing demand |
$ | 53,630 | $ | 51,150 | ||||
| Interest-bearing deposits |
185,472 | 184,556 | ||||||
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| Total deposits |
239,102 | 235,706 | ||||||
| Other liabilities |
4,242 | 4,465 | ||||||
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| Total liabilities |
243,344 | 240,171 | ||||||
| SHAREHOLDERS’ EQUITY |
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| Common Stock |
3,030 | 3,030 | ||||||
| Surplus |
19,498 | 19,498 | ||||||
| Retained Earnings and Accumulated other Comprehensive Income/(Loss) |
(3,734 | ) | (2,851 | ) | ||||
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| Total shareholders’ equity |
18,794 | 19,677 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 262,138 | $ | 259,848 | ||||
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Consolidated Statement of Income
(Unaudited)
in thousands of dollars
Nine months ended September 30,
| 2012 | 2011 | 2010 | ||||||||||
| INTEREST INCOME |
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| Interest and fees on loans |
$ | 5,355 | $ | 5,864 | $ | 6,567 | ||||||
| Interest on securities: |
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| Taxable |
606 | 784 | 708 | |||||||||
| Tax exempt |
246 | 356 | 398 | |||||||||
| Other interest income |
166 | 160 | 179 | |||||||||
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| Total interest income |
6,373 | 7,164 | 7,852 | |||||||||
| INTEREST EXPENSE ON DEPOSITS |
825 | 1,148 | 1,640 | |||||||||
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| NET INTEREST INCOME |
5,548 | 6,016 | 6,212 | |||||||||
| Provision for loan losses |
960 | 1,975 | 525 | |||||||||
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| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
4,588 | 4,041 | 5,687 | |||||||||
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| NONINTEREST INCOME |
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| Service charges and fees |
753 | 775 | 798 | |||||||||
| Net realized gains from sale of loans |
514 | 130 | 200 | |||||||||
| Loan servicing fees, net of amortization |
(2 | ) | 65 | 39 | ||||||||
| Gain on the sale of assets |
412 | 23 | 5 | |||||||||
| Gain on life insurance proceeds |
— | — | 189 | |||||||||
| Gain on the sale of investment securities |
274 | — | 5 | |||||||||
| Other income |
339 | 366 | 284 | |||||||||
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| Total noninterest income |
2,290 | 1,359 | 1,520 | |||||||||
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| NONINTEREST EXPENSES |
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| Salaries and benefits |
3,099 | 2,977 | 2,975 | |||||||||
| Occupancy |
706 | 749 | 743 | |||||||||
| FDIC insurance premiums |
258 | 316 | 404 | |||||||||
| Expenses relating to ORE property |
(67 | ) | 1,664 | 656 | ||||||||
| Securities impairment write-downs |
— | 470 | — | |||||||||
| Other expenses |
1,498 | 1,562 | 1,474 | |||||||||
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| Total noninterest expenses |
5,494 | 7,738 | 6,252 | |||||||||
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| INCOME BEFORE INCOME TAXES |
1,384 | (2,338 | ) | 955 | ||||||||
| Income tax expense |
345 | (949 | ) | 96 | ||||||||
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| NET INCOME |
$ | 1,039 | ($ | 1,389 | ) | $ | 859 | |||||
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| BASIC NET INCOME PER SHARE |
$ | 0.86 | ($ | 1.15 | ) | $ | 0.71 | |||||
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| Return on Average Assets |
0.55 | % | -0.73 | % | 0.46 | % | ||||||
| Return on Average Equity |
7.53 | % | -8.83 | % | 5.49 | % | ||||||