CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 Commission File No. 000-16435 COMMUNITY BANCORP. (Exact name of registrant as specified in its charter) Vermont 03-0284070 (State of Incorporation) (IRS Employer Identification No.) Derby Road, Derby, Vermont 05829 (Address of principal executive offices) (Zip Code) Registrant's telephone number: (802) 334-7915 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of each exchange on which registered NONE NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock - $2.50 par value per share
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES (X) NO ( )Indicate by check mark if disclosure of delinquent filers pursuant to Item 405of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ( )
As of March 16, 2001, the date of the latest known sale of the registrant's stock, the aggregate market value of the voting stock held by non-affiliates of the registrant, based on the per share sale price of the stock on that date,was $34,996,050.
There were 3,536,168 shares outstanding of the issuer's class of common stockas of the close of business on March 16, 2001.
DOCUMENTS INCORPORATED BY REFERENCEPortions of the Annual Report to Shareholders for fiscal year 2000 incorporated by reference to Part II, including the following financial statementsReport of Independent Public AccountantsFinancial Statements: Consolidated Balance Sheets as of December 31, 2000 and 1999 Consolidated Statements of Income for the fiscal years December 31, 2000, 1999 and 1998 Consolidated Statements of Stockholders' Equity for the fiscal years December 31, 2000, 1999 and 1998 Consolidated Statements of Cash Flows for the fiscal years December 31, 2000, 1999 and 1998 Notes to Consolidated Financial Statements Condensed Financial Information (Parent Company Only)Portions of the Proxy Statement for the Annual Meeting to be held May 8, 2001 are incorporated by reference to Part III.Total Number of Pages - 30Exhibit Index Begins on Page 25
FORM 10-K ANNUAL REPORT
Table of Contents
PART I
Page
Item I The Business
4
Organization and Operation
Distribution of Assets, Liabilities & Stockholders' Investment
10
Average Balances and Interest Rates
11
Changes in Interest Income and Interest Expense
12
Investment Portfolio
13
Loan Portfolio
14
Summary of Loan Loss Experience
15
Non-Accrual, Past Due, and Restructured Loans
16
Deposits, Return on Equity and Assets
17
Item 2 Properties
18
Item 3 Legal Proceedings
19
Item 4 Submission of Matters to a Vote of Security Holders
PART II
Item 5 Market for Registrant's Common Equity and Related Stockholder Matters
Item 6 Selected Financial Data
Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operation
23
Item 7A Qualitative and Quantitative Disclosures About Market Risk
Item 8 Financial Statements and Supplementary Data
Item 9 Disagreements on Accounting and Financial Disclosures
PART III
Item 10 Directors and Executive Officers of the Registrant
24
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial Owners and Management
Item 13 Certain Relationships and Related Transactions
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K
25
Signatures
30
Item 1. The Business
Community Bancorp. (The Corporation) was organized under the laws of the Stateof Vermont in 1982 and became a registered bank holding company under the Bank Holding Company Act of 1956, as amended, in October 1983 when it acquired all of the voting shares of Community National Bank (the Bank). The Bank is one of two subsidiaries of the Corporation and principally all of the Corporation's business operations are presently conducted through it. Liberty Savings Bank (Liberty), a New Hampshire guaranty savings bank, was acquired by Community Bancorp. on December 31, 1997, and is presently inactive.
Community National Bank was organized in 1851 as the Peoples Bank, and wassubsequently reorganized as the National Bank of Derby Line in 1865. In 1975, after 110 continuous years of operation as the National Bank of Derby Line, the Bank acquired the Island Pond National Bank and changed its name to "Community National Bank." In the year 2001, the Bank is celebrating it's 150 anniversary, with many activities planned throughout the year.
Community National Bank provides a complete range of retail banking services tothe residents and businesses in northeastern Vermont. These services include checking, savings and time deposit accounts, mortgage, consumer and commercial loans, safe deposit and night deposit services, automatic teller machine (ATM) facilities, credit card services, 24 hour telephone banking and a full line ofpersonal fiduciary services. The Bank was among the first financial institutionsto offer internet banking to the Northeast Kingdom of Vermont. This service was first offered to employees in order for them to become more familiar withit, test the different uses, and work out any potential problems. The Bank thenbegan offering this service to its customers near the end of the second quarterof 1999. Additionally, the Bank maintains cash machines in three different businesses located in the towns of Irasburg, St. Johnsbury and Concord, Vermont.
CompetitionThe Bank has five offices located in Orleans County, one office in Essex County, and one office in Caledonia County, all in northeastern Vermont. Its primary service area is in the towns of Derby and Newport, Vermont, with approximately 59% of its total deposits as of December 31, 2000 derived from that area. Currently, the Bank is in the process of establishing a full service branch in Washington County, in the city of Montpelier, Vermont, with future plans for a loan production and trust office in the town of Barre, Vermont.
The Bank competes in all aspects of its business with other banks and credit unions in northern Vermont, including two of the largest banks in the state, which maintain branch offices throughout the Bank's service area. Historically, competition in Orleans and Essex Counties has come from The Chittenden Trust Company and The Howard Bank, N.A., a subsidiary of Banknorth Group, Inc., based in Burlington, Vermont. The Chittenden Trust Company maintains a branch office in Newport, and The Howard Bank maintains one office in Barton, one office in Orleans, and one office in St. Johnsbury. Competition in Caledonia County comprises of the Passumpsic Savings Bank and Citizens Savings Bank, both based in St. Johnsbury, Lyndonville Savings Bank and Trust Company, based in Lyndonville, The Merchants Bank based in Burlington, and with two local credit unions for deposits and consumer loans.
With recent changes in the regulatory framework of the banking industry, thecompetition for deposits and loans has broadened to include not only traditional rivals such as the mutual savings banks and stock savings banks, but also many non-traditional rivals such as insurance companies, brokerage firms, mutual funds and consumer and commercial finance and leasing companies.
EmployeesAs of December 31, 2000, the Bank employed 93 full-time employees and 18 part-time employees. Management of the Bank considers its employee relations to be good.
Regulation and SupervisionHolding Company Regulation - As a registered bank holding company, the Corporation is subject to on-going regulation supervision and examination by the Board of Governors of the Federal Reserve System, under the Bank Holding Company Act of 1956, as amended (the "Act"). A bank holding company for example, must obtain the prior approval of the Board before it acquires all or substantially all of the assets of any bank, or acquires ownership or control of more than 5% of the voting shares of a bank. Prior Federal Reserve Board approval is also required before a bank holding company may acquire more than 5% of any outstanding class of voting securities of a company other than a bankor a more than 5% interest in its property.
The Act generally limits the activity in which the Corporation and its subsidiaries may engage to certain specified activities, including those activities which the Federal Reserve Board may find, by order or regulation, to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.Some of the activities that the Federal Reserve Board has determined to be closely related to banking are: (1) making, and servicing loans that could be made by mortgage, finance, credit card or factoring companies; (2) performing the functions of a trust company; (3) certain leasingof real or personal property; (4) providing certain financial, banking or economic data processing services; (5) except as otherwise prohibited by law, acting as an insurance agent or broker with respect to insurance that is directly related to the extension of credit or the provision of other financial services or, under certain circumstances, with respect to insurance that is sold in certain small communities in which the bank holding company system maintains banking offices; (6) acting as an underwriter for credit life insuranceand credit health and accident insurance directly related to extensions of creditby the holding company system; (7) providing certain kinds of management consulting advice to unaffiliated banks and non-bank depository institutions;(8) performing real estate appraisals; (9) issuing and selling money order and similar instruments and travelers checks and selling U.S. Savings Bonds; (10) providing certain securities brokerage and related services for the account ofbank customers; (11) underwriting and dealing in certain government obligationsand other obligations such as bankers' acceptances and certificates of deposit;(12) providing consumer financial counseling; (13) providing tax planning and preparation services; (14) providing check guarantee services to merchants; (15) operating a collection agency; and (16) operating a credit bureau. The Corporation does not presently engage, directly or indirectly, in any non-banking activities.
A bank holding company must also obtain prior Federal Reserve approval in orderto purchase or redeem its own stock if the gross consideration to be paid, when added to the net consideration paid by the company for all purchases or redemptions by the company of its equity securities within the preceding 12 months, will equal 10% or more of the company's consolidated net worth.
The Corporation is required to file with the Federal Reserve Board an annualreport and such additional information as the Board may require pursuant to the Act. The Board may also make examinations of the Corporation and any direct or indirect subsidiary of the Corporation.
Community Bancorp. and its subsidiaries, Community National Bank and LibertySavings Bank, are considered "affiliates" for the purposes of Section 18(j) of the Federal Deposit Insurance Act, as amended, and Section 23A of the Federal Reserve Act, as amended. Accordingly, they are subject to limitations with respect to the Bank's ability to make loans and other extensions of credit to or investments in the Corporation or in any other subsidiaries that the Corporation may acquire. The Company is prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or lease or saleof any property of the furnishing of services.
Financial Modernization. On March 11, 2000 the federal Gramm-Leach-Bliley financial modernization act ("Gramm-Leach-Bliley") became effective. Under Gramm-Leach-Bliley, eligible bank holding companies will be permitted to become financial holding companies and thereby affiliate with securities firmsand insurance companies and engage in a broader range of activities than is otherwise permissible for bank holding companies. A bank holding company is eligible to elect to become a financial holding company and to engage in activities that are "financial in nature" if each of its subsidiary banks is well capitalized for regulatory capital purposes, is well managed and has at least a satisfactory rating under the Community Reinvestment Act ("CRA"). Activities which are deemed "financial in nature" under Gramm-Leach-Bliley would include securities underwriting, dealing and market making; sponsoring mutual funds and investment companies; insurance underwriting and agency; merchant banking activities; and activities that the Federal Reserve Board has determined to be closely related to banking. Gramm-Leach-Bliley also contains similar provisions authorizing eligible national banks to engage indirectly through a financial subsidiary and subject to limitations on investment, in activities that are financial in nature, other than insurance underwriting, insurance company portfolio investment, real estate development and real estate investment, through a financial subsidiary of the bank. In order to be considered eligible for these expanded activities, the bank must be well capitalized, well managed and have at least a satisfactory CRA rating.
Implementation of Gramm-Leach-Bliley will likely result in structural changes to the financial services industry, the full effect of which cannot be predicted with any certainty.
The Corporation has registered its Common Stock under Section 12(g) of theSecurities Exchange Act of 1934 and is required to file annual and periodic reports and proxy statements and other information with the Securities and Exchange Commission.
Interstate Banking and Branching. Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, a bank holding company became able to acquire banks in states other than its home state beginning September 29, 1995,without regard to the permissibility of such acquisitions under state law, but subject to any state requirement that the bank has been organized and operatingfor a minimum period of time, not to exceed five years, and the requirement thatthe bank holding company, prior to or following the proposed acquisition, controls no more than 10% of the total amount of deposits of insured depository institutions in the United States and less than 30% of such deposits in that state (or such lesser or greater amount set by state law).
The Interstate Banking and Branching Act also authorizes banks to merge across state lines, subject to certain restrictions, thereby creating interstate branches, and to open new branches in a state in which it does not already have banking operations if the state enacts a law permitting such de novo branching.
Capital and Operational Requirements. The Federal Reserve Board, the OCC and other banking regulators have issued substantially similar risk-based and leverage capital guidelines applicable to U.S. banking organizations. In addition, those regulatory agencies may from time to time require that a banking organization maintain capital above the minimum levels, whether because of its financial condition or actual or anticipated growth. The Federal Reserve Board risk-based guidelines define a three-tier capital framework. "Tier 1 capital" generally consists of common and qualifying preferred shareholders' equity, less certain intangibles and other adjustments. "Tier 2capital" and "Tier 3 capital" generally consist of subordinated and other qualifying debt, preferred stock that does not qualify as Tier 1 capital and the allowance for credit losses up to 1.25% of risk-weighted assets.
The sum of Tier 1, Tier 2 and Tier 3 capital, less investments in unconsolidated subsidiaries, represents qualifying "total capital," at least 50% of which must consist of Tier 1 capital. Risk-based capital ratios are calculated by dividingTier 1 capital and total capital by risk-weighted assets. Assets and off-balancesheet exposures are assigned to one of four categories of risk weights, based primarily on relative credit risk. The minimum Tier 1 capital ratio is 4% and the minimum total capital ratio is 8%. The "leverage ratio" requirement is determined by dividing Tier 1 capital by adjusted average total assets. Althoughthe stated minimum ratio is 3%, most banking organizations are required to maintain ratios of at least 100 to 200 basis points above 3%.
Prompt Corrective Action. The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), among other things, identifies five capital categories for insured depository institutions (well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized) and requires the respective U.S. federal regulatory agencies to implement systems for "prompt corrective action" for insured depository institutions that do not meet minimum capital requirements within such categories. FDICIA imposes progressively more restrictive constraints on operations, management and capital distributions, depending on the category in which an institution is classified. Failure to meet the capital guidelines couldalso subject a banking institution to capital raising requirements. An "undercapitalized" bank must develop a capital restoration plan and its parent holding company must guarantee that bank's compliance with the plan. The liability of the parent holding company under any such guarantee is limited tothe lesser of 5% of the bank's assets at the time it became undercapitalizedor the amount needed to comply with the plan. Furthermore, in the event of the bankruptcy of the parent holding company, such guarantee would take priority over the parent's general unsecured creditors. In addition, FDICIA requires the various regulatory agencies to prescribe certain non-capital standards for safety and soundness related generally to operations and management, asset quality and executive compensation and permits regulatory action against a financial institution that does not meet such standards.
The various federal bank regulatory agencies have adopted substantially similar regulations that define the five capital categories identified by FDICIA, using the total risk-based capital, Tier 1 risk-based capital and leverage capital ratios as the relevant capital measures. Such regulations establish various degrees of corrective action to be taken when an institutionis considered undercapitalized. Under the regulations, a "well capitalized" institution must have a Tier 1 capital ratio of at least 6%, a total capital ratio of at least 10% and a leverage ratio of at least 5% and not be subject to a capital directive order. An "adequately capitalized" institution must have a Tier 1 capital ratio of at least 4%, a total capital ratio of at least 8% and a leverage ratio of at least 4%, or 3% in some cases. Under these guidelines, Community National Bank is considered "well capitalized."
The Federal bank regulatory agencies also have adopted regulations which mandate that regulators take into consideration concentrations of credit risk and risks from non-traditional activities, as well as an institution's ability to manage those risks, when determining the adequacy of an institution's capital.That evaluation will be made as part of the institution's regular safety and soundness examination. Banking agencies also have adopted final regulations requiring regulators to consider interest rate risk (when the interest rate sensitivity of an institution's assets does not match the sensitivity of its liabilities or its off-balance sheet position) in the determination of a bank'scapital adequacy. Concurrently, banking agencies have proposed a method-ology for evaluating interest rate risk. The banking agencies do not intend to establish an explicit risk-based capital charge for interest rate risk but will continue to assess capital adequacy for interest rate risk under a risk assessment approach based on a combination of quantitative and qualitativefactors and have provided guidance on prudent interest rate risk management practices.
Distributions. The Corporation derives funds for cash distributions to its shareholders primarily from dividends received from its subsidiary, Community National Bank. The Bank is subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain capital above regulatory minimums. The prior approval of the Comptroller of the Currency is required if the total of all dividends declaredby a national bank in any calendar year will exceed the sum of such bank's net profits for that last year and its retained net profits for the preceding two calendar years, less any required transfers to surplus. Federal law also prohibits national banks from paying dividends which would be greater than the bank's undivided profits after deducting statutory bad debt in excess of the bank's allowance for loan losses.
In addition, the Corporation and the Bank are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums.The appropriate federal regulatory authority is authorized to determine under certain circumstances relating to the financial condition of a bank or bank holding company that the payment of dividends would be an unsafe or unsound practice and to prohibit such payment. The federal bank regulatory authorities have indicated that paying dividends that deplete a bank's capital base to an inadequate level would be an unsound and unsafe banking practice and that banking organizations should generally pay dividends only out of current operating earnings.
"Source of Strength" Policy. According to Federal Reserve Board policy, bank holding companies are expected to act as a source of financial strength to each subsidiary bank and to commit resources to support each such subsidiary. This support may be required at times when a bank holding company may not be able to provide such support. Similarly, under the cross-guarantee provisions of the Federal Deposit Insurance Act, in the event of a loss suffered or anticipated by the FDIC--either as a result of default of a banking subsidiary of a bank holding company or related to FDIC assistance provided to a subsidiary in danger of default--the other banking subsidiaries of such bank holding company may be assessed for the FDIC's loss, subject to certain exceptions.
Bank Regulation
Liberty is subject to similar banking regulations and provisions in the state of New Hampshire.
Effects of Government Monetary PolicyThe earnings of the Company are affected by general and local economic conditions and by the policies of various governmental regulatory authorities.In particular, the Federal Reserve Board regulates money and credit conditions and interest rates in order to influence general economic conditions, primarily through open market operations and United States Government Securities, varying the discount rate on member bank borrowings, setting reserve requirements against member and nonmember bank deposits, and regulating interest rates payable by member banks on time and savings deposits. Federal Reserve Board monetary policies have had a significant effect on the operating results of commercial banks, including the Company, in the past and are expected to continue to do so in the future.
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY
The following tables summarize various consolidated information and provides a three
year comparison relating to the average assets, liabilities, and stockholders' equity.
(Dollars in Thousands)
Year ended December 31,
2000
1999
1998
ASSETS
Balance
%
Cash and Due from Banks
Non-Interest Bearing
5,279
2.15%
5,212
2.25%
4,522
2.05%
Taxable Investment Securities(1)
48,080
19.61%
49,832
21.54%
38,784
17.56%
Tax-exempt Investment Securities(1)
16,398
6.69%
13,843
5.98%
13,060
5.91%
Other Securities(1)
1,222
0.50%
1,254
0.54%
1,270
0.57%
Total Investment Securities
65,700
26.80%
64,929
28.06%
53,114
24.04%
Overnight Deposits(2)
1,788
0.73%
2,638
1.14%
3,339
1.51%
Federal Funds Sold
1,090
0.45%
2,897
1.25%
4,928
2.23%
Gross Loans
165,176
67.37%
149,707
64.71%
150,321
68.05%
Reserve for Loan Losses and Accrued Fees
(2,713)
-1.11%
(2,579)
-1.12%
(2,491)
-1.13%
Premises and Equipment
4,466
1.82%
4,144
1.79%
3,135
1.42%
Other Real Estate Owned
379
0.16%
678
0.29%
660
0.30%
Other Assets
3,998
1.63%
3,737
3,368
1.53%
Total Assets
245,163
100%
231,363
220,896
LIABILITIES
Demand Deposits
25,574
10.43%
23,619
10.21%
20,857
9.44%
Now and Money Market Accounts
51,296
20.92%
51,850
22.41%
44,916
20.34%
Savings Accounts
32,696
13.34%
32,748
14.15%
30,840
13.96%
Time Deposits
92,747
37.83%
94,694
40.93%
98,181
44.45%
Total Deposits
202,313
82.52%
202,911
87.70%
194,794
88.19%
Other Borrowed Funds
9,319
3.80%
4,059
1.75%
4,060
1.84%
Repurchase Agreements(3)
9,956
4.06%
1,305
0.56%
93
0.04%
Other Liabilities
1,380
1,154
1,020
0.46%
Subordinated Debentures
20
0.01%
0.02%
48
Total Liabilities
222,988
90.95%
209,449
90.53%
200,015
90.55%
STOCKHOLDERS' EQUITY
Common Stock
8,559
3.49%
8,220
3.55%
6,174
2.79%
Surplus
11,257
4.59%
10,624
8,293
3.75%
Retained Earnings
3,549
1.45%
3,654
1.58%
6,649
3.01%
Less: Treasury Stock
(973)
-0.39%
(447)
-0.19%
(445)
-0.20%
Accumulated Other Comprehensive Income(1)
(217)
-0.09%
(137)
-0.06%
210
0.10%
Total Stockholders' Equity
22,175
9.05%
21,914
9.47%
20,881
9.45%
Total Liabilities and Stockholders' Equity
(1) FASB No. 115, an accounting method in which securities classified as Held
to Maturity are carried at book value and securities classified as Available
for Sale are carried at fair value with the unrealized gain (loss), net of
applicable income taxes, reported as a net amount in accumulated other
comprehensive income. The Company does not carry, nor does it intend to
carry, securities classified as Trading Securities.
(2) Overnight deposits refers to the BankBoston sweep account established during
the first half of 1998 as another means of selling funds overnight.
(3) Repurchase agreements were introduced during the second part of 1998 in
an effort to attract new business customers.
AVERAGE BALANCES AND INTEREST RATES
The table below presents the following information: average earning assets
(including non-accrual loans) and average interest-bearing liabilities
supporting earning assets; and interest income and interest expense as a
rate/yield.
AVE.
INC./
RATE/
BAL.
EXP.
YIELD
EARNING ASSETS
Loans (1)
14,539
8.80%
13,036
8.71%
13,758
9.15%
Taxable Investment
Securities
2,835
5.90%
2,715
5.45%
2,196
5.66%
Tax-exempt Investment
Securities(2)
1,208
7.37%
924
6.67%
930
7.12%
Federal Funds
Sold
67
6.15%
143
4.94%
237
4.81%
Overnight
Deposits(3)
104
5.82%
133
5.04%
185
5.54%
Other
Securities (4)
92
7.53%
85
6.78%
82
6.46%
TOTAL
233,754
18,845
8.06%
220,171
17,036
7.74%
211,702
17,388
8.21%
INTEREST-BEARING LIABILITIES
Savings
Deposits
752
2.30%
756
2.31%
807
2.62%
NOW and Money
Market Funds
1,907
3.72%
1,656
3.19%
1,565
3.48%
Time
5,040
5.43%
4,865
5.14%
5,496
5.60%
Other Borrowed
Funds
601
6.45%
203
5.00%
198
4.88%
Repurchase
Agreements(5)
487
4.89%
52
3.98%
4.30%
Subordinated
Debentures
2
11.00%
5
10.42%
196,034
8,789
4.48%
184,676
7,534
4.08%
178,138
8,075
4.53%
Net Interest Income
10,056
9,502
9,313
Net Interest Spread(6)
3.58%
3.66%
3.68%
Interest Differential(7)
4.32%
4.40%
(1) Included in gross loans are non-accrual loans with an average balance of
$1,344,971 for 2000, $1,894,097 for 1999, and $2,004,438 for 1998.
(2) Income on investment securities of state and political subdivisions is
stated on a tax equivalent basis (assuming a 34% rate). The amount of
adjustment was $410,588 in 2000, $314,301 in 1999, and $316,232 in 1998.
(3) Overnight deposits refers to the BankBoston sweep account established
during the first half of 1998 as another means of selling funds overnight.
(4) Included in other securities are taxable industrial development bonds
(VIDA) , with income of $4,377 for 2000, $5,443 for 1999, $7,549 for 1998.
(5) Repurchase agreements were introduced during the second part of 1998
in an effort to attract new business customers.
(6) Net interest spread is the difference between the yield on earning assets
and the rate paid on interest-bearing liabilities.
(7) Interest differential is net interest income divided by average earning assets.
CHANGES IN INTEREST INCOME AND INTEREST EXPENSE
The following table summarizes the variances in income for the years 2000, 1999,
1999, 1998, and 1997 resulting from volume changes in assets and liabilities
and fluctuations in rates earned and paid.
2000 vs. 1999
1999 vs. 1998
1998 vs. 1997
Rate Volume
Variance(1)
Due to
Total
Rate
Volume
Variance
Income-Earning Assets
Loans(2)
156
1,347
1,503
(669)
(53)
(722)
(305)
195
(110)
223
(103)
120
(107)
626
519
186
79
Tax-Exempt Investment
Securities (3)
113
171
284
(62)
56
(6)
(69)
70
1
35
(111)
(76)
6
(100)
(94)
(30)
127
97
(49)
(29)
(17)
(35)
(52)
0
9
(2)
7
(1)
3
(4)
Total Interest
Earnings
556
1,253
1,809
(845)
493
(352)
(515)
770
255
Interest-Bearing Liabilities
Savings Deposits
(3)
(101)
50
(51)
(42)
(28)
(70)
272
(21)
251
(151)
242
91
168
281
(106)
175
(452)
(179)
(631)
192
135
263
398
(47)
Agreements
90
345
435
Expense
775
480
1,255
(703)
162
(541)
(119)
360
241
(1) Items which have shown a year-to-year increase in volume have variances
As follows:
Variance due to rate = Change in rate x new volume
Variance due to volume = Change in volume x old rate
Items which have shown a year-to-year decrease in volume have variances
Allocated as follows:
Variance due to rate = Change in rate x old volume
Variance due to volume = Change in volume x new rate
(2) Total loans are stated net of unearned discount and allowance for loan
Losses. Interest on non-accrual loans is excluded from income. The
Principal balances of non-accrual loans are included in calculations of the
Yield on loans.
(3) Income on tax-exempt securities is stated on a tax equivalent basis.
The assumed rate is 34%.
INVESTMENT PORTFOLIO
The following tables show the classification of the investment portfolio by
type of investment security based on book value for Held to Maturity
securities and fair value for Available for Sale securities on December 31
for Sale securities on December 31 for each of the last 3 years.
U.S. Treasury Obligations:
Available-for-Sale
19,146
28,982
20,590
Held-to-Maturity
5,702
6,650
15,562
U.S. Agency Obligations
22,975
11,127
4,582
Obligations of State &
Political Subdivisions
13,520
12,110
9,734
Restricted Equity Securities
1,142
62,485
60,011
51,610
The following is an analysis of the maturities and yields of investment securities
as defined: (Available for Sale; fair value, Held to Maturity; book value)
December 31,
U.S. Treasury & Agency Obligations
Wtd.
Fair
Ave.
Available for Sale
Value
Due within 1 year
9,028
6.37%
9,993
5.96%
0.00%
Due after 1 year within 5 years
10,118
6.21%
18,989
6.27%
6.16%
6.28%
Book
Held to Maturity
5,667
5.40%
1,000
6.38%
14,634
6.51%
12,056
14,824
5.30%
5,510
5.78%
Due after 5 years within 10 years
10,954
7.60%
1,953
6.93%
28,677
6.66%
17,777
20,144
6.31%
Political Subdivisions (1)
10,875
7.26%
8,738
6.40%
6,473
6.58%
7.50%
1,507
7.18%
1,522
7.58%
445
8.09%
600
7.78%
392
8.03%
Due after 10 years
1,200
9.92%
1,265
9.76%
9.65%
7.54%
6.92%
7.21%
Total Restricted Equity Securities
7.76%
6.00%
(1) Income on Obligations of State and Political Subdivisions is stated on a tax
equivalent basis assuming a 34 percent tax rate. Also included are taxable
industrial development bonds (VIDA) with a fair value of $60,626 as of
December 31, 2000, $92,828 as of December 31, 1999, and $123,546
as of December 31, 1998 with respective yields of 6.09%, 5.23%, and 4.76%.
LOAN PORTFOLIO
The following table reflects the composition of the Company's loan portfolio for years ended December 31:
1997
1996
% OF
LOANS
Real Estate Loans
Construction & Land
Development
1,021
0.58%
1,620
1.06%
2,025
1.37%
1,091
1,432
0.98%
Farm Land
2,939
1.66%
3,229
2.11%
2,634
1.78%
2,093
1.39%
2,148
1.48%
1-4 Family
Residential
107,411
60.50%
98,439
64.22%
98,407
66.34%
98,743
65.78%
94,393
64.83%
Commercial Real
Estate
29,133
16.41%
21,223
13.85%
19,555
13.18%
19,992
13.32%
20,602
Loans to Finance Agricultural
Production
646
0.36%
661
0.43%
829
1,354
0.90%
0.84%
Commercial &
Industrial
13,989
7.88%
11,527
7.52%
8,767
7,759
5.17%
7,084
4.87%
Consumer
Loans
22,223
12.52%
16,344
10.66%
16,008
10.79%
18,943
12.62%
18,556
12.74%
All Other
164
0.09%
236
0.15%
110
0.07%
141
166
0.11%
Gross
177,526
153,279
148,335
150,116
145,603
Less:
Reserve for Loan
Losses
(1,797)
-1.01%
(1,715)
(1,659)
(1,502)
-1.00%
(1,401)
-0.96%
Deferred Loan
Fees
(951)
-0.54%
(891)
-0.58%
(849)
-0.57%
(867)
(904)
-0.62%
Net Loans
174,778
98.45%
150,673
98.30%
145,827
98.31%
147,747
98.42%
143,298
MATURITY OF LOANS
The following table shows the estimated maturity of loans (excluding residential properties of
1 - 4 families, consumer loans and other loans) outstanding as of December 31, 2000.
Maturity
Schedule
Fixed Rate Loans
Within
1 - 5
After
1 Year
Years
5 years
Real Estate
Construction & Land Development
821
Secured by Farm Land
835
844
Commercial Real Estate
534
512
6,064
7,110
Loans to Finance Agricultural Production
140
343
Commercial & Industrial Loans
551
5,531
2,781
8,863
2,046
6,255
9,680
17,981
Variable Rate Loans
200
1,755
340
2,095
12,953
4,927
4,143
22,023
292
303
4,034
1,075
5,126
19,234
6,353
4,160
29,747
SUMMARY OF LOAN LOSS EXPERIENCE
The following table summarizes the Company's loan loss experience for each of the last five years.
(Thousands of Dollars)
Loans Outstanding
End of Period
Ave. Loans Outstanding
148,147
140,996
During Period
Loan Loss Reserve,
1,715
1,659
1,502
1,401
1,519
Beginning of Period
Loans Charged Off:
177
227
191
116
Commercial
41
86
246
436
383
438
549
705
731
585
Recoveries:
65
8
27
107
68
136
108
202
172
102
Net Loans Charged Off
302
441
503
559
483
Provision Charged to Income
384
497
365
Loan Loss Reserve, End of Period
1,797
Net Losses as a Percent
Of Ave. Loans
0.18%
0.33%
0.38%
0.34%
Provision Charged to Income as a
Percent of Average Loans
0.23%
0.44%
0.26%
At End of Period:
Loan Loss Reserve as a Percent
Of Outstanding Loans
1.01%
1.12%
1.00%
0.96%
Factors considered in the determination of the level of loan loss coverage include, but are not limited to historical
Loss ratios, composition of the loan portfolio, overall economic conditions as well as future potential losses.
The following table shows an allocation of the allowance for loan losses, as well as the percent to the total
allowance for the last five years (the corporation has no foreign loans, therefore, allocations for this
category are not necessary).
Domestic
467
26%
421
24%
33%
362
490
35%
30%
372
22%
475
29%
645
43%
307
492
27%
356
21%
448
32%
395
28%
Unallocated
304
17%
566
11%
1%
209
15%
NON-ACCURAL, PAST DUE, AND RESTRUCTURED LOANS
The following table summarizes the bank's past due, non-accrual, and restructured loans:
Accruing Loans Past Due 90 Days or More:
77
53
121
36
119
34
311
211
Total Past Due 90 Days or More
388
418
351
401
Non-accrual Loans
1,415
1,758
2,228
1,486
Restructured Loans (incl. non-accrual)
126
506
Total Non-accrual, Past Due
And Restructured Loans
1,465
2,146
2,772
1,973
2,162
201
542
1,089
663
Total Non Performing Loans
1,666
2,581
3,314
3,062
2,825
Percent of Gross Loans
0.94%
1.68%
2.04%
1.94%
Reserve Coverage of Non performing Loans
107.86%
66.45%
50.06%
49.05%
49.59%
When a loan reaches non-accrual status, it is determined that future collection
of interest and principal is doubtful. At this point, the Company's policy is to
reverse the accrued interest and to discontinue the accrual of interest until
the borrower clearly demonstrates the ability to resume normal payments. Our
portfolio of non-accrual loans for the years ended 2000, 1999, 1998, 1997,
and 1996 are made up primarily of commercial real estate loans and residential
real estate loans. Management does not anticipate any substantial effect to
future operations if any of these loans are liquidated. Although interest is
included in income only to the extent received by the borrower , deferred taxes
are calculated monthly, based on the accrued interest of all non-accrual loans.
This accrued interest amounted to $369,536 in 2000, $398,006 in 1999,
$363,713 in 1998, $216,770 in 1997, and $309,388 in 1996. The
Company had total foreign loans of less than one percent in 2000, and has no
Concentration in any industrial category.
DEPOSITS
The average daily amount of deposits and rates paid on such deposits is summarized for
for the last three years. (Dollars in Thousands)
Amount
NOW & Money Market Funds
3.81%
3.59%
Increments of maturity of time certificates of deposit and other time deposits
of $100,000 or more issued by domestic offices outstanding on December 31,
2000 are summarized as follows:
Time Certificates
Maturity Date
of Deposit
3 Months or Less
1,531
Over 3 through 6 Months
7,989
Over 6 through 12 Months
4,194
Over 12 Months
3,790
17,504
RETURN ON EQUITY AND ASSETS
The following table shows consolidated operating and capital ratios of the
Company for each of the last three years
Return on Average Assets
0.99%
Return on Average Equity
10.92%
10.65%
10.49%
Dividend Payout Ratio
89.19%
90.75%
88.48%
Ave. Equity to Ave. Assets Ratio
Item 2. Properties
Community Bancorp. does not own or lease real property. The Corporation'soffices are located at the main offices of the Bank. All of the Bank's officesare located in Vermont. In addition to the main office in Derby, the Bank maintains facilities located in; City of Newport, Towns of Barton and St. Johnsbury, and Villages of Island Pond, Troy and Derby Line. Due to its inactive status, Liberty Savings Bank shares the same address as the main offices as it does not maintain a facility.
The Bank's main offices are located in a two-story brick building on U.S. Route5 in Derby, Vermont. The main banking lobby and adjacent offices were constructed in 1972, expanded in 1978, and the most recent expansion was completed in July 1993, providing a total of 15,000 square feet at this location.The main office is equipped with a drive-up facility as well as an Automated Teller Machine (ATM). Computer and similar support equipment is also locatedin the main office building. The building previously housing our computer equipment serves as a conference center for the Bank as well as various non-profit organizations, free of charge, upon request.
The Bank owns the Derby Line office located on Main Street in a renovated bank building. The facility consists of a small banking lobby containing approximately 200 square feet. An ATM was installed in 1999, replacing the walk-up window at this office. Now all seven offices of the Bank are equipped with an ATM.
The Island Pond office is located in the renovated "Railroad Station" acquiredby the town of Brighton in 1993. The Bank leases approximately two-thirds ofthe downstairs including a banking lobby, a drive-up window, and an ATM. The other portion of the downstairs is occupied by an information center, and the upstairs section houses the Island Pond Historical Society.
The Barton office is located on Church Street, in a renovated facility. This office is equipped with a banking lobby, a drive-up window, and an ATM. The facility is leased from Dean M. Comstock, who is a member of the Bank's Barton Advisory Committee. The lease was entered into in 1985 with a fifteen-year term, and was renewed in 2000 for an additional 15 years.
The Bank occupies condominium space in the state office building on Main Street in Newport to house its Newport office. The Bank occupies approximately 3,084 square feet on the first floor of the building for a full service banking facility equipped with a remote drive-up facility and an ATM. In addition, theBank owns approximately 4,400 square feet on the second floor housing our trust department and an office for our public relations coordinator, with roomfor future expansion.
The Bank owns the Troy office located in a relatively new facility. This officeis also equipped with an ATM to provide the same type of limited 24-hour accessibility as all of the other offices. The marketing department recently moved into this building in space formerly leased to another business.
The St. Johnsbury office is located at the corner of the I-91 Access Road andRoute 5 in the town of St. Johnsbury. The Bank occupies approximately 2,250 square feet in the front of the Price Chopper building. Fully equipped with anATM and a drive-up window, this office operates as a full service banking facility. This space is leased from Murphy Realty of St. Johnsbury. Peter Murphy, President of Murphy Realty, is a member of the Bank's St. Johnsbury Advisory Committee.
The Company has leased approximately 1,500 square feet of office space located at 95-97 State Street in Montpelier. This office is scheduled to open at the end of April or the first part of May and will operate as a fullservice banking facility.
Item 3. Legal Proceedings
Community National Bank is currently involved in a lawsuit filed on March 23,1998, in the Orleans Superior Court against the State of Vermont. The issue involves OREO property that is on "filled land" on the shores of Lake Memphremagog in the City of Newport. According to a so-called "public trust doctrine", the State of Vermont might have ownership of any lands created by filling any portion of the navigable waters of the state. The result of this is that the Bank has been unable to sell these properties for fair value because some attorneys will not clear title to the property. The suit filed is an attempt to clear title to said properties by seeking judicial clarification of the public trust doctrine. The Bank received documents in mid April pertaining to the ruling of the lawsuit. The judgement was not inthe Bank's favor. On June 23, 2000, The Bank filed an appeal to the Vermont Supreme Court, but as of this filing, no date has been set for oral arguments.Regardless of the outcome of the suit, is not likely to have a material impacton the financial statements of the Bank or consolidated Company.
There are no other pending legal proceedings to which the Company is a party or of which any of its property is the subject, other than routine litigation incidental to its banking business.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II.
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters
Common Stock Performance by Quarter
Incorporated by reference to Page 35 of the Annual Report to Shareholders forfiscal year 2000.
Item 6. Selected Financial Data
Following pages
SELECTED FINANCIAL DATA
(Not covered by Report of Independent Public Accountants)
(Dollars in thousands, except per share data)
Year Ended December 31,
Total Interest Income
18,435
16,723
17,072
16,817
16,532
Total Interest Expense
7,535
8,077
7,834
8,177
9,646
9,188
8,995
8,983
8,355
Provision for Loan Losses
Other Operating Income
1,865
1,759
1,586
1,336
1,281
Other Operating Expense
7,929
7,330
7,021
6,759
6,397
Income Before Income Taxes
3,198
3,120
2,900
2,874
Applicable Income Taxes (1)
776
786
710
755
654
Net Income
2,422
2,334
2,190
2,145
2,220
Per Share Data: (2)
Earnings per Share
0.72
0.71
0.68
0.69
0.74
Cash Dividends Declared
0.64
0.60
0.56
0.52
Weighted Average Number of
Common Shares Outstanding
3,375,196
3,309,375
3,229,702
3,125,270
3,005,843
Number of Common Shares
Outstanding
3,355,784
3,358,507
3,266,508
3,165,821
3,049,798
Balance Sheet Data:
174,068
252,785
232,216
225,051
213,001
205,536
208,385
201,843
197,797
187,580
183,854
230,255
210,035
203,049
192,521
186,425
Borrowed Funds
5,592
4,075
4,080
4,164
235
Total Shareholders' Equity
22,530
22,181
22,002
20,480
19,111
(1) Applicable Income Taxes above includes the income tax effect, assuming a
34% tax rate, on securities gains (losses), which totaled $(6,386) in 2000,
$0 in each 1999, 1998, 1997, and $(656) in 1996.
(2) All per share data for calendar years prior to 1999 have been restated to
reflect a 5% stock dividend paid in the first quarter of 1999. A 100% stock
dividend was paid on June 1, 1998, requiring restatement of per share data
for the calendar years 1997 and 1996. Additionally, a 5% stock dividend
was declared payable during the first quarter of 1997, requiring restatement
of per share data for the 1996 calendar year.
QUARTERLY RESULTS OF OPERATIONS
The following is an unaudited summary of the quarterly results of operations
for the years ended December 31, 2000, 1999 and 1998.
MAR. 31
JUNE 30
SEPT. 30
DEC. 31
Interest Income
4,177
4,457
4,815
4,986
Interest Expense
1,831
2,013
2,395
2,551
2,346
2,444
2,420
2,435
Provisions For Loan Losses
96
63
Other Operating Expenses
2,009
1,972
1,977
1,971
Income Before Taxes
578
895
830
Applicable Income Taxes
144
247
187
434
648
632
708
Net Income Per Share(1):
0.13
0.19
0.21
4,050
4,203
4,248
4,221
1,872
1,889
1,897
1,876
2,178
2,314
2,351
2,345
150
115
1,847
1,829
1,826
1,827
554
785
814
967
219
214
411
604
753
0.17
0.18
0.23
4,225
4,207
4,325
4,315
1,990
2,053
2,045
1,989
2,235
2,154
2,280
2,326
160
1,810
1,761
1,768
1,730
522
747
744
888
114
189
182
226
408
558
562
662
Net Income Per Share (1):
(1) All 1998 per share data has been restated to reflect a 5% stock dividend paid during the
first quarter of 1999. Per share data for the first quarter of 1998 has been restated to
reflect a 100% stock dividend paid on June 1, 1998.
CAPITAL RATIOS
Community Bancorp. and Subsidiaries
ANNUAL
GROWTH RATE
At December 31,
2000/1999
1999/1998
LESS: Goodwill (3)
274
297
320
Allowance for Possible Loan Losses
Total Adjusted Assets
254,308
233,634
226,390
8.85%
3.20%
Gross Risk-Adjusted Assets
132,204
111,995
107,450
Allowance for Loan Loss over limit (2)
315
316
Total Risk-Adjusted Assets
132,060
111,680
107,134
18.25%
4.24%
Shareholders' Equity
LESS:
Valuation Allowance for Securities
(23)
(247)
Intangible Assets(3)
293
319
339
Total Adjusted Tier 1 Capital (1)
22,260
22,109
21,427
0.68%
3.18%
Eligible Discounted Subordinated Debt
Max. Allowance for Possible Loan Losses (2)
1,653
1,400
1,343
Total Capital (Tier II)
23,925
23,525
22,786
1.70%
3.24%
Tier l Capital/Total Adjusted Assets
8.75%
9.46%
Tier ll Capital/Total Adjusted Assets
9.41%
10.07%
10.06%
Tier l Capital/Total Risk-Adjusted Assets
16.86%
19.80%
20.00%
Tier ll Capital/Total Risk-Adjusted Assets
18.12%
21.06%
21.27%
(1) Net unrealized holding gains and losses on available-for-sale securities
are excluded from common stockholders' equity for regulatory capital
purposes. However, National Banks continue to deduct unrealized losses
on equity securities in their computation of Tier I Capital.
(2) The maximum allowance for possible loan losses used in calculating primary
(TierII) capital is the lower of the period end allowance for possible loan
losses or 1.25% of gross risk-adjusted assets, as implemented by regulatory
capital guidelines.
(3) Included in the 2000, 1999 and 1998 balances of intangible assets are
$274,130, $296,974 and $318,818 respectively, in goodwill associated
with the acquisition of Liberty Savings Bank. Excess mortgage servicing
rights totaling $19,528, $21,817, and $18,706 for 2000,1999 and 1998,
respectively, comprise the balance of intangible assets.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Incorporated by reference to Pages 23-34 of the Annual Report to Shareholders for fiscal year 2000.
Forward-looking statements are not guarantees of future performance. They necessarily involve risks, uncertainties and assumptions. Future results of the Company may differ materially from those expressed in these forward-looking statements. Although these statements are based on management's current expectations and estimates, many of the factors that could influence or determine actual results are unpredictable and not within the Company's control. In addition, the Company does not undertake to, and disclaims any obligation to, publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence or anticipated occurrence of events or circumstances after the date of this Report. The Company claims the protection of the safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995.
Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include, among others, the following possibilities: (1) competitive pressures increase among financialservices providers in the Company's northern New England market area or in the financial services industry generally, including competitive pressures from nonbank financial service providers, from increasing consolidation and integration of financial service providers, and from changes in technology and delivery systems; (2) interest rates change in such a way as to reduce the Company's margins; (3) general economic or monetary conditions, either nationally or regionally, are less favorable than expected, resulting in a deterioration in credit quality or a diminished demand for the Company's products and services; and (4) changes in laws or government rules, or the way in which courts interpret those laws or rules, adversely affect the Company's business.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
Incorporated by reference to Pages 23-27 of the Management's Discussion and Analysis of Financial Condition and Results of Operation in the Annual Reportto Shareholders for fiscal year 2000.
Item 8. Financial Statements and Supplementary Data
The financial statements and related notes of Community Bancorp. and Subsidiaries are incorporated herein by reference from the Annual Report to Shareholders for fiscal year 2000, Page 4 through Note 24 on Page 22.
Item 9. Disagreements on Accounting and Financial Disclosures
Inapplicable.
PART III.
Item 10. Directors and Executive Officers of the Registrant
The following is incorporated by reference to the Company's Proxy Statement for the Annual Meeting of Shareholders to be held on May 8, 2001:
Listing of the names, ages, principal occupations and business experience of the directors under the caption "ARTICLE I - ELECTION OF DIRECTORS." Listing of the names, ages, titles and business experience of the executiveofficers under the caption "EXECUTIVE OFFICERS." Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 under the caption "SHARE OWNERSHIP INFORMATION -Section 16(a) Beneficial Ownership Reporting Compliance.
Item 11A. Executive Compensation
Information regarding compensation of directors under the captions "ARTICLEI - ELECTION OF DIRECTORS - Directors' Fee and Other Compensation" and"-Directors' Deferred Compensation Plan."
Information regarding executive compensation and benefit plans under thecaption "EXECUTIVE COMPENSATION."
Information regarding management interlocks and certain transactions underthe caption "ARTICLE I - ELECTION OF DIRECTORS - Compensation CommitteeInterlocks and Insider Participation."
Information set forth under the caption "HUMAN RESOURCES COMMITTEEREPORT."
Information set forth under the caption "STOCK PERFORMANCE GRAPH."
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information regarding the share ownership of management and principal shareholders under the captions "SHARE OWNERSHIP INFORMATION" and"ARTICLE I - ELECTION OF DIRECTORS."
Item 13. Certain Relationships and Related Party TransactionsThe following is Incorporated by reference to the Company's Proxy Statement for the Annual Meeting of Shareholders to be held on May 8, 2001:
Information regarding transactions with management under the caption "ARTICLE I - ELECTION OF DIRECTORS - Transactions with Management."
PART IV.
Item 14. Financial Statement Schedules, Exhibits and Reports on Form 8-K(a) (1) and (2) Financial StatementsFinancial statements are incorporated by reference to the Annual Report to Shareholders for fiscal year 2000, filed as Exhibit 13 to this report.
(a) (3) ExhibitsThe following exhibits are incorporated by reference:Exhibit 3(i) - Restated Articles of Association filed as Exhibit 1 to the Company'scurrent report on Form 8-K filed with the Commission on September 8, 1998.Exhibit 3(ii) - By-laws of Community Bancorp. are incorporated by reference to Community Bancorp.'s Registration Statement dated May 20, 1983 (Registration No.2-83166).Exhibit 4 - Indenture dated August 1, 1984 between Community Bancorp. and Community National Bank as trustee, relating to $750,000 in principal amount of 11% Convertible Subordinated Debentures due 2004 is incorporated by reference to Community Bancorp.'s Registration Statement dated July 11, 1984 (Registration No. 2-92147).Exhibit 10(i) - Directors Deferred Compensation Plan* is incorporated by referenceto pages 25-30 of the Form 10-K filed with the Commission on March 31, 2000.Exhibit 10(ii) - Description of Supplemental Retirement Plan* is incorporated by reference to page 30 of the Form 10-K filed with the Commission on March 31, 2000.Exhibit 10(iii) - Description of the Officer Incentive Plan* is incorporated by reference to the section of the Company's Proxy Statement for the Annual Meeting of Shareholders to be held on May 8, 2001, under the caption "EXECUTIVECOMPENSATION - Officer Incentive Plan."
The following exhibits are filed as part of this report:Exhibit 11 - Computation of Per Share EarningsExhibit 13 - Portions of the Annual Report to Shareholders of Community Bancorp. for fiscal year 2000, specifically mentioned in this report andincorporated by reference.Exhibit 21 - Subsidiaries of Community Bancorp.Exhibit 23 - Consent of A.M. Peisch & Company
(b) Reports on Form 8-K
None
______________*Denotes compensatory plan or arrangement.
Exhibit 11
COMMUNITY BANCORP.
PRIMARY EARNINGS PER SHARE
For The Fourth Quarter Ended December 31,
$707,782
$753,167
$662,615
Average Number of Common Shares Outstanding.
3,359,502
3,358,506
3,266,510
Earnings Per Common Share
$0.21
$0.22
$0.20
FULLY DILUTED EARNINGS PER SHARE
Adjustments to Net Income (Assuming Conversion
of Subordinated Convertible Debentures).
363
Adjusted Net Income
$708,145
$753,530
$662,978
Increase in Shares (Assuming Conversion of
Subordinated Convertible Debentures).
8,557
Average Number of Common Shares Outstanding
(Fully Diluted).
3,368,059
3,367,063
3,275,067
Earnings Per Common Share Assuming Full Dilution.
Per share data for 1998 restated to reflect a 5% stock dividend paid on February 1, 1999.
Exhibit 11 (cont'd.)
For the Years Ended December 31,
$2,422,421
$2,334,358
$2,190,374
$0.72
$0.71
$0.68
1,452
3,034
$2,423,873
$2,335,810
$2,193,408
8,558
16,691
3,383,753
3,317,933
3,246,393
$0.70
Exhibit 21The subsidiaries of Community Bancorp.are Community National Bank, a banking corporation incorporated under the Banking Laws of The United States, and Liberty Savings Bank, a New Hampshire guaranty savings bank.
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Annual Report (Form 10-K) of Community Bancorp. of our report dated January 5, 2001, included in the 2000Annual Report to Shareholders of Community Bancorp.
We also consent to the incorporation by reference in the Registration Statement (Form S-3 No. 33-18535) pertaining to the Community Bancorp. Dividend Reinvestment Plan and in the Registration Statement (Form S-8 No. 33-44713) pertaining to the Community Bancorp. Retirement Savings Plan of our report dated January 5, 2001, with respect to the consolidated financial statements incorporated herein by reference of Community Bancorp. included in the Annual Report (Form 10-K) for the year ended December 31, 2000.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities ExchangeAct of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BY: /s/ Richard C. White
Date: March 28, 2001
Richard C. White, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this reporthas been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
BY: /s/ Stephen P. Marsh
Stephen P. Marsh, Treasurer
and Chief Financial and Accounting Officer
COMMUNITY BANCORP. DIRECTORS
/s/ Thomas E. Adams
Thomas E. Adams
/s/ Jacques R. Couture
Jacques R. Couture
/s/ Elwood G. Duckless
Elwood G. Duckless
/s/ Michael H. Dunn
Michael H. Dunn
/s/ Rosemary M. Lalime
Rosemary M. Lalime
/s/ Marcel Locke
Marcel Locke
/s/ Stephen P. Marsh
Stephen P. Marsh
/s/ Anne T. Moore
Anne T. Moore
/s/ Dale Wells
Dale Wells
/s/Richard C. White
Richard C. White