Community National Bank Reports First Quarter 2011 Results Showing an Increase in Net Income, Commercial Loans and Demand Deposits Compared to Prior Year

Community National Bank (OTC BB: CBNY.OB) today announced first quarter results for 2011. Highlights for the quarter include:

• Net income of $623 thousand for the first quarter of 2011 compared to net income of $134 thousand for the same period in 2010.
• Net interest income grew 7% over 2010 to $3.9 million for the quarter. The net interest margin was 3.39%.
• Commercial loans increased 22% or $37.3 million to $205.2 million compared to March 31, 2010.
• Deposits increased 12% or $12.8 million to $369 million compared to the prior year quarter.
• $1.3 million in gains on the sale of Small Business Administration Loans ("SBA”) during the quarter.
• The Bank received approval from the OCC to open its 9^th branch location in Melville, New York. The branch is expected to open during the second half of 2011.

Chairman, President and CEO, Stuart Lubow commented "Community National Bank continues to execute its business strategy by staying focused on our core business of commercial and residential lending in our marketplace. This is evident by the 18% annualized growth rate in our loan portfolio on a linked quarter basis as well as a 15% increase from the prior year quarter.” We expect this loan growth to continue as the loan pipeline remains robust and we open our 8^th branch location in Bayside in May 2011 and our 9^th location in Melville by the end of 2011.”

Net Earnings and Net Interest Income

Net income for the quarter ended March 31, 2011 was $623 thousand or $0.09 earnings per share as compared to net income of $134 thousand or $0.03 earnings per share for the comparable period in 2010.

For the quarter ended March 31, 2011, net interest income and net interest margin were $3.9 million and 3.39%, respectively, compared to $3.6 million and 3.64% for the prior 2010 quarter. The Bank’s increase in net interest income was primarily due to the growth in commercial loan portfolio. The growth in the commercial loan portfolio was funded by a $16 million reduction in lower yielding money market investments and a $20.6 million increase in business demand deposits. The net interest margin decreased 25 basis points from the prior year quarter due to a significant decline in interest rates during the period which resulted in higher prepayments and payoffs in the investment securities and residential loan portfolio. The proceeds from these prepayments and payoffs were reinvested at lower yields.

Non-Interest Income

Non-Interest income increased $1.5 million to $1.7 million at March 31, 2011 compared to $143 thousand for the prior quarter. The increase is mostly due to $1.3 million in gains on the sale of SBA loans. The increase in gains on the sale of SBA loans was the result of the SBA expanding the requirements of their program to encourage lending to small businesses. Mr. Lubow commented "As a preferred SBA lender and 2010 Gold medal recipient for originating over $20 million in SBA loans in 2010, we are proud that we have been able to help local small business owners in our marketplace obtain access to credit. The SBA ended the expanded program towards the end of 2010 and we expect that the SBA loan origination pipeline and gains will decrease in the second half of 2011.” The Bank recorded BOLI income of $135 thousand during the first quarter of 2011. The Bank purchased approximately $15 million in BOLI since the prior year period. These purchased were primarily funded through longer term FHLB Advances.

Loans and Asset Quality

Loans held-for-investment increased $14.3 million for an annualized growth rate of 18% to $338.8 million at March 31, 2011 compared to $324.5 million at December 31, 2010. The commercial loan portfolio increased $43.9 million or 15% when compared to the prior year quarter. "As the Bank expands its branching network it will continue to focus on increasing core earnings through business and personal banking relationships” commented Mr. Lubow.

Non-Performing loans increased to $4.9 million or 1.45% of total loans at March 31, 2011 from $4.2 million or 1.30% at December 31, 2010. The Bank had six non-accrual loans at March 31, 2011. The Bank’s provision for loan losses was $760 thousand during the first quarter of 2011 compared to $300 thousand for quarter ended December 31, 2010. The increase was due to one loan that became non-accrual during the quarter and increased general valuation reserves due to normal loan growth.

The allowance for loan losses to total loans held for investment increased to 1.38% at March 31, 2011 from 1.22% at December 31, 2010. The Bank charged off $37 thousand in SBA loans during the quarter.

Further information about the financial condition and performance of Community National Bank is available from its Call Reports filed by the Bank with the FDIC and available on the FDIC website at: http://www2.fdic.gov/idasp/main_bankfind.asp.

ABOUT COMMUNITY NATIONAL BANK

Community National Bank is a Long Island based independent commercial bank and operates seven locations in Nassau and Suffolk counties. We offer a full range of modern financial services, backed by state-of-the-art technology. In addition to commercial loans, commercial mortgages, small business loans and lines of credit, residential mortgages, CNB also provides a complete selection of traditional personal and commercial deposit products such as no fee individual and business checking accounts, IRA accounts and statement savings.

Cautionary Statement about Forward-Looking Statements

This release contains certain "forward looking statements” about CNB which, to the extent applicable, are intended to be covered by the safe harbor for forward looking statements provided under the Federal securities laws and, regardless of such coverage, you are cautioned about. Examples of forward-looking statements include but are not limited to, CNB’s financial condition and capital ratios, results of operations and the CNB’s outlook and business. Forward-looking statements are not historical facts. Such statements may be identified by the use of such words as "may,” "believe,” "expect,” "anticipate,” "plan,” "continue,” or similar terminology. These statements relate to future events or our future financial performance and involve risks and uncertainties that may cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we caution you not to place undue reliance on these forward-looking statements. Factors which may cause our forward looking statements to be materially inaccurate include, but are not limited to, a unexpected deterioration in our loan portfolio, unexpected increases in our expenses, greater than anticipated growth, unanticipated regulatory action, unexpected changes in interest rates, a loss of key personnel, an unanticipated loss of existing customers, competition from other institutions causing us unanticipated changes in our deposit or loan rates, increases in FDIC insurance costs and unanticipated adverse changes in our customers’ economic conditions or economic conditions in our local area generally.

Forward-looking statements speak only as of the date of this press release We do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.