Vermont Business Magazine Community Bancorp, based in Derby, held its Annual Shareholders meeting on Tuesday, May 14, 2024.
A quorum of shareholders cast ballots and voted affirmatively on two proposals: re-electing Directors Kathryn M. Austin, Bruce L. Baker, David M. Bouffard, Christopher L. Caldwell and Aminta K. Conant to three-year terms expiring in 2027, and ratifying BerryDunn as the Company's external auditors for 2024.
Following the business portion of the meeting, CEO Kathy Austin shared that in 2023, the bank continued to generate solid organic growth in both its loan portfolio and deposit base, especially time deposits, as well as assets. Its success contributed to the decision to raise the bank’s quarterly dividend again in 2023. The bank reported $1.11 billion in total assets as of March 31, 2024, up 7% year-over-year.
She noted, “Our financial results through 2023 and early 2024, demonstrate continued success. We have assembled a strong team and invested in the operations and technology to support continued profitable growth. We have an integral role in the communities we serve, know our markets well, and practice sound community banking principles.”
President Christopher Caldwell discussed the bank’s lending growth across all commercial loan segments in 2023 and early 2024, despite higher interest rates, and referenced the enduring relationships CNB's experienced lending team builds with customers. He also recognized that the bank’s strong position in the regional market enables the team to seize opportunities, some emerging from industry consolidation.
Executive Vice President and Chief Financial Officer Louise Bonvechio provided a deeper review of the bank's strong recent financial results, including overall trends and metrics.
CEO Austin concluded the meeting by commenting, "We are well positioned for continued success. This is our place. We live and work here, and we are committed to stewardship of this franchise. We grew to a billion dollar bank one loan, one deposit, one relationship at a time.”
Community Bancorp (OTCQX:CMTV) Community National Bank reported earnings for the first quarter ended March 31, 2024, of $2.8 million or $0.51 per share, a decrease of $515,860 or 15.45% compared to $3.3 million or $0.61 per share for the first quarter of 2023.
Total assets for the Company on March 31, 2024, were $1.1 billion, unchanged from year end 2023, and up slightly from $1.03 billion as of March 31, 2023. Contributing to the bank's healthy asset levels was continued growth in the first quarter of 2024 in the Company's loan portfolio of $107.8 million, or 14.21%, compared to the 2023 period. Deposit balances decreased $4.8 million, or 0.54%, compared to the same period in 2023. The year-over-year loan growth was funded by an increase in borrowed funds of $83.9 million as well as a decrease in cash and cash equivalents of $21.7 million.
The Company's securities portfolio totaled $180.6 million as of March 31, 2024, a 6.28% decrease compared to $192.7 million as of March 31, 2023. The portfolio is classified as available-for-sale and is required to be reported at fair market value with the unrealized loss, net of a deferred tax adjustment, reported as an adjustment to total equity. Such unrealized losses reflect the interest rate environment, as current rates remain above the coupon rates on the securities, resulting in a fair market value lower than current book values. As of March 31, 2024, the adjustment to equity was $17.4 million, which has remained consistent in recent quarters, including $15.9 million on December 31, 2023, and $18.0 million as of March 31, 2023.
Total net interest income for the first quarter ended March 31, 2024, decreased $165,720, or 1.94%, to $8.4 million, compared to $8.5 million for the same quarter in 2023. The slight year-over-year decrease reflects an increase of $2,302,192, or 24.55%, in interest and fees on loans due to loan growth and higher interest rates, offset by higher interest on deposits expense of $1,235,425, or 66.97%, as well as higher interest on borrowed funds of $921,296.
The provision for credit losses for the first quarter ended March 31, 2024, was $313,579, compared to $286,526 for the same period in 2023. The provision for credit losses for the first quarter ended March 31, 2024, was determined under Accounting Standard No. 2016-13, Measurement of Credit Losses on Financial Instruments, commonly referenced as the Current Expected Credit Losses, or CECL, which the Company adopted effective January 1, 2023.
Total non-interest income for the first quarter ended March 31, 2024, of $1.6 million decreased $124,870, or 7.10%, compared to $1.8 million for the same period in 2023. The decrease is partially due to lower commercial loan documentation fees and commercial rate lock fees associated with transaction timing.
Equity capital increased to $89.4 million, with a book value per share of $15.88, as of March 31, 2024, compared to equity capital of $89.0 million and a book value of $15.87 as of December 31, 2023. This change includes an increase of $1.5 million in unrealized losses in the investment portfolio, due to changing bond rates, which decreased the fair market value of the investment portfolio, offset by an increase of $1.52 million in retained earnings. The unrealized loss position is considered temporary and does not impact the Company's regulatory capital ratios.
President and CEO Kathryn Austin commented on the Company's results: "Our solid financial performance in the first quarter of 2024 demonstrates the strength of our customer relationships. Continued year-over-year growth in loans during a period of higher interest rates is a testament to the success of our team who helped customers navigate economic challenges. We believe these results also reflect our strategic decision to focus on organic loan and deposit growth, within our well-established risk management framework, and the continued resilience of our local economy in the communities we serve throughout Vermont and New Hampshire. As always, we are grateful for our dedicated employees who support their communities and our growing customer base every day."
As previously announced, the Company declared a quarterly cash dividend of $0.23 per share payable May 1, 2024, to shareholders of record as of April 15, 2024.
About Community National Bank
Community National Bank is an independent bank that has been serving its communities since 1851, with retail banking offices located in Derby, Derby Line, Island Pond, Barton, Newport, Troy, St. Johnsbury, Montpelier, Barre, Lyndonville, Morrisville and Enosburg Falls as well as loan offices located in Burlington, Vermont and Lebanon, New Hampshire
For more information about Community National Bank visit communitynationalbank.com.
To learn more about Community Bancorp. visit communitybancorpvt.com.
Source: DERBY, VT / May 23, 2024 / Community Bancorp.
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