November 19, 2010 Dear Shareholders, I am very ... - Liberty Online
November 19, 2010 Dear Shareholders, I am very ... - Liberty Online
November 19, 2010 Dear Shareholders, I am very ... - Liberty Online
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<strong>November</strong> <strong>19</strong>, <strong>2010</strong><br />
<strong>Dear</strong> <strong>Shareholders</strong>,<br />
I <strong>am</strong> <strong>very</strong> pleased to report that the third quarter of <strong>2010</strong> produced net income of $220,000. This<br />
is substantially better than second quarter <strong>2010</strong> and an impressive increase over third quarter<br />
2009. Comparing the 2009 and <strong>2010</strong> balance sheets, you will see that total loans were virtually<br />
unchanged, while total assets increased 14%, and total deposits grew an impressive 22%. Much<br />
of this deposit growth is attributed to an internal c<strong>am</strong>paign, with all employees focused on<br />
reaching our Bank goals.<br />
As mentioned, net loan growth has been flat. There are a variety of reasons for this, but the<br />
continued economic pressures placed on most companies has played the biggest role. We are<br />
cautiously optimistic that economic pressures will ease and are finalizing plans to implement<br />
strategic initiatives in 2011 focused on deposit and loan growth. Of equal importance will be our<br />
“E” initiatives, with special emphasis on mobile and internet banking. We are particularly<br />
excited about this opportunity and hope to be able to offer our customers new products and<br />
services within the <strong>very</strong> near future.<br />
Several of you have expressed concern over the increased costs that equity service companies<br />
have charged you to carry Commencement Bank stock in your retirement plans. I <strong>am</strong> <strong>very</strong><br />
pleased to inform you that because of our strategic alliance with Summit Financial Group, you<br />
may have them carry bank stock at a <strong>very</strong> affordable price. You can reach a<br />
retirement/investment professional at 253-858-2884.<br />
I would also like to remind those of you interested in purchasing Commencement Bank stock to<br />
find availability information on our website www.commencementbank.com under “About Us” -<br />
“Investor Relations.”<br />
Lastly, Commencement Bank’s recent advertisement offers prospective customers $25 if they<br />
allow us to offer a competitive bid for their business. If you, or someone you know, may have an<br />
interest in this opportunity, please contact us at 253-284-1800.<br />
As always, we thank you for your support and encourage you to contact us if we can be of<br />
assistance.<br />
Sincerely,<br />
H. R. Russell<br />
President/CEO
Commencement Bank<br />
<strong>2010</strong> Third Quarter<br />
Financial Statement<br />
BALANCE SHEET (Unaudited)<br />
Dollars in Thousands<br />
9/30/10 9/30/09<br />
Assets<br />
Cash and due from banks 1,900 3,293<br />
Interest bearing deposits in banks 20,290 235<br />
Securities available for sale 7,163 4,977<br />
Federal funds sold - - 6,040<br />
Federal Home Loan Bank stock 290 248<br />
Federal Reserve Bank stock 589 573<br />
Loans 90,404 90,291<br />
Allowance for credit losses (1,894) (1,351)<br />
Net loans 88,510 88,940<br />
Leasehold improvements and<br />
equipment, net 428 585<br />
Accrued interest receivable 335 331<br />
Other assets 518 211<br />
Total assets 120,023 105,433<br />
Liabilities and <strong>Shareholders</strong>’ Equity<br />
Liabilities<br />
Deposits:<br />
Demand, non-interest bearing 10,158 10,185<br />
Savings and interest bearing<br />
demand 34,559 <strong>19</strong>,135<br />
Time 54,215 51,916<br />
Total deposits 98,932 81,236<br />
FHLB Borrowings 2,000 4,500<br />
Accrued interest payable 140 153<br />
Other liabilities 74 111<br />
<strong>Shareholders</strong>’ Equity<br />
Common stock 2,2<strong>19</strong> 2,2<strong>19</strong><br />
Additional paid in capital 20,696 20,501<br />
Accumulated deficit (4,126) (3,430)<br />
Comprehensive income 88 143<br />
Total shareholders’ equity 18,877 <strong>19</strong>,433<br />
Total liabilities and shareholders’<br />
equity 120,023 105,433<br />
INCOME STATEMENT (Unaudited)<br />
Dollars in Thousands<br />
Third Third<br />
Quarter Quarter<br />
<strong>2010</strong> 2009<br />
Interest Income<br />
Loans 1,294 1,245<br />
Federal funds sold - - 1<br />
Interest bearing deposits in banks 16 10<br />
Securities available for sale 30 59<br />
Total interest income 1,340 1,315<br />
Interest Expense<br />
Deposits 281 246<br />
FHLB Borrowings 22 40<br />
Total interest expense 303 286<br />
Net Interest Income 1,037 1,029<br />
Provision for credit losses - - 142<br />
Net interest income after provision<br />
for credit losses 1,037 887<br />
Non-Interest Income<br />
Service charges on deposit accounts 21 31<br />
Gain on sale of investment 26 49<br />
Other non-interest income 9 1<br />
Total non-interest income 56 81<br />
Non-Interest Expense<br />
Salaries and employee benefits 500 475<br />
Occupancy expenses 63 65<br />
Other operating expenses 310 290<br />
Total non-interest expense 873 830<br />
Net income (loss) 220 138
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