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Bank Information

Dear Shareholders,

Net income totaled $259,340 for the first half of 2013 (un-audited) or $0.83 per share, compared to $734,735 or $2.34 per share during the same period one year ago. Two reasons accounted for the decline of earnings; the funding of the provision for loan loss increased by $300,000 and net interest income before the provision for loan losses declined by $243,313 as compared to last year. Our economic and interest rate environment continues to place pressure on the banks margin. The interest margin ended the quarter at 3.62% compared to 3.85% at the same period of the prior year.

Past due loans ended the quarter at 3.53% of total loans, compared to 4.56% one year ago. Net loan charge offs totaled $31,458 for the period. The provision for loan loss funding was $450,000 leaving the allowance for loan loss reserve at 2.49% of total loans. Other Real Estate (ORE) at $373,668 represents the value of eight parcels. This total has declined by $305,117 as compared to the previous year. The inventory of property includes both residential and commercial real estate.

Our capital position improved despite weak second quarter earnings. The bank was able to maintain its Tier 1 Leverage Ratio at 8.33%. This ratio increased slightly from the first quarters 8.20% and improved from last year’s 7.69%. No cash dividend payment will be scheduled until it’s determined that the payment of such dividend would not jeopardize the minimum 8.00% ratio. Book value of Community Bancorp, Inc. is $63.25. No shares traded during the period. The most recent recorded transfer of Community Bancorp, Inc. shares traded at $52 per share.

On May 22, 2013, Ronald W. Howe retired as a director of Community Bancorp, Inc. Thank you, Ron, for your dedication to the bank and this company for the past 30 years. James R. Howe has filled the open seat; see the attached press release for more details.

Sincerely,
Robert M. Wolak
President & CEO