Progress takes place when it is planned well…and that is what your local Board of Directors, your experienced management team, and a dedicated group of employees set out to achieve in 2015. With a solid strategic plan in place, Community State Bank continued to focus on increased franchise value throughout the communities we served.
Net income for the year was $1,206,000 or a $3.83 per share for the 12 months ended
December 31, 2015, compared to $201,000 or a $0.64 per share for the previous 12-month period. Although net income increased substantially in 2015, the majority is attributed to extraordinary income and reversal of excess loan loss provision – both one-time events. Nevertheless, Community State Bank continues to see progress in all phases of our operations. And our ratings with the FDIC continue to improve.
Our loan portfolio grew to $79,752,000 in 2015 from $70,609,000 compared to the same time in2014. Deposits also increased to $173,603,000 in 2015 from $169,582,000 in 2014. Stockholders’ equity grew by 5.39% to $21,379,000 at year-end 2015, from $20,286,000 in 2014. Total assets increased to $195,665,000 in 2015 compared with $190,195,000 in the previous year. The bank’s classified or problem loans continued to improve and decreased to 21.9% of total loans at the end of 2015 compared to 31.92% at year-end 2014. This 10% decline is an excellent reflection of the effectiveness of our collection efforts.
During the year, we changed leadership at the bank and holding company when John Wendling assumed the role of President and CEO upon the resignation of Douglas Kelley. In addition, after much research and serious consideration, we closed our Flushing branch office and have sold the building in the first quarter of 2016. This office was part of our acquisition of Montrose State Bank and was in an area that was never conducive to growth. With consistently low transaction volumes, it was the right decision. This strategy will help us focus on the areas that will prove resourceful for the bank’s progress. We also continued to bring in new staff with varied experience levels to help lead and grow the bank.
As you may know, on March 23, 2016, we announced that our Corporation entered into a definitive agreement with Fentura Financial, Inc. providing for a merger of Community Bancorp, Inc. with Fentura Financial, Inc. and The State Bank. This agreement calls for an all cash transaction. Shareholders of Community Bancorp, Inc. will receive a cash consideration of $68.75 per share, or approximately $21.6 million in aggregate. The agreement remains subject to the approval of shareholders and regulatory agencies including the Federal Reserve, FDIC and State of Michigan.
You may question why after we had a successful year and so much hard work by our team, would we decide to merge at this time. The answer to your question is the basic promise of our Mission Statement: We will work to achieve excellent returns for our stockholders by always placing the best interests of our customers and communities first.
We are very pleased to have the opportunity to partner with an organization that also believes in the power of true community banking… where local does matter. Our customers will have even more access to ATMs, larger loans, more convenience, and more financial services to help them manage their money.
Our community will now have the support of the largest bank headquartered in Genesee County, with growth opportunities in Saginaw, Oakland and Livingston Counties.
So based on these benefits to our shareholders, our customers and our community, our Board of Directors has decided now is the optimal time to enter into a merger with Fentura Financial, Inc. and The State Bank. And while our name on the door will change, the spirit of Community State Bank and the dedication of our employees will remain strong. We are proud of everyone who helped to make our local community bank a financial institution where local truly matters.
John C. Wendling Ronald A. Fields
President & CEO Chairman, Board of Directors