EX-99.1 2 tm205753d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Community Bankers Trust Corporation Reports Results for the Fourth Quarter and Year 2019

 

Net income was $4.0 million for the fourth quarter and $15.7 million for the year 2019.

 

Conference Call on Friday, January 24, 2020, at 10:00 a.m. Eastern Time

 

Richmond, VA, January 24, 2020 - Community Bankers Trust Corporation (the “Company”) (NASDAQ: ESXB), the holding company for Essex Bank (the “Bank”), today reported results for the fourth quarter and year ended December 31, 2019.

 

Income Statement- Three Months ended December 31, 2019 compared with Three Months ended September 30, 2019

·Net income of $4.0 million for the fourth quarter of 2019 compares with third quarter 2019 net income of $4.6 million.
·Third quarter net income exceeded fourth quarter net income by $568,000 as the third quarter was boosted by a $1.1 million payoff of a purchased credit impaired (“PCI”) loan with no carrying value.
·Loans grew $23.8 million, or 2.3%, during the fourth quarter of 2019, fueling interest income.
·Low cost NOW accounts grew $22.9 million, or 15.5%, during the fourth quarter of 2019.
·There was a provision for loan losses of $200,000 recognized in the fourth quarter of 2019 as a result of robust loan growth.
·Interest on deposits declined $183,000, or 4.9%, on a linked quarter basis.
·Noninterest expenses declined $562,000, or 6.1%, on a linked quarter basis.
·Net interest margin was 3.74% in the fourth quarter of 2019 and reflected a reduction in the cost of interest bearing liabilities from 1.49% in the third quarter to 1.43% in the fourth quarter of 2019.
·Return on average assets, annualized, was 1.14% and return on average equity, annualized, was 10.42% in the fourth quarter.

 

Income Statement- Year ended December 31, 2019 compared with Year ended December 31, 2018

·Net income of $15.7 million for the year 2019 is an increase of $2.0 million, or 14.7%.
·Interest and dividend income of $65.4 million is an increase of $6.2 million, or 10.5%.
·Interest and fees on loans increased $5.3 million, or 11.4%.
·Net interest income of $50.0 million for 2019 is an increase of $2.8 million, or 5.9%, over 2018.
·Noninterest income of $5.4 million for 2019 is an increase of $891,000, or 20.0%.
·Noninterest expenses increased by $852,000, or 2.4%.
·Return on average assets was 1.11% and return on average equity was 10.63% for 2019.

 

Income Statement- Three Months ended December 31, 2019 compared with Three Months ended December 31, 2018

·Net income of $4.0 million for the fourth quarter of 2019 is an increase year-over-year of $688,000, or 20.5%.
·Interest and dividend income increased $769,000, or 5.0%, in the fourth quarter of 2019 over the same period in 2018, led by interest and fees on loans, which increased $1.1 million, or 9.3%.
·Noninterest income increased by $294,000, or 27.1%.
·Noninterest expenses decreased by $365,000, or 4.0%.
·Net interest margin has remained stable and was 3.74% in the fourth quarter of 2019 compared with 3.78% for the same period in 2018.

 

Balance Sheet- December 31, 2019 compared with December 31, 2018

·Loans grew $64.6 million, or 6.5%, from $993.7 million at December 31, 2018 to $1.058 billion at December 31, 2019.
·Noninterest bearing deposits grew $13.5 million, or 8.2%, year-over-year and totaled $178.6 million, representing 15.3% of total deposits, an increase from 14.2% one year ago.
·Growth in noninterest bearing deposits enabled the Bank to lower time deposits by $17.2 million, or 2.8%.
·The ratio of loans-to-deposits increased from 88.6% at December 31, 2018 to 93.8% at December 31, 2019.
·Shareholders’ equity increased by $18.0 million, or 13.1%, year-over-year.
·The ratio of nonperforming assets to loans and other real estate at December 31, 2019 was 0.92% versus 1.07% one year prior.
·The ratio of the allowance for loan losses to nonaccrual loans at December 31, 2019 was 159.28% versus 94.57% one year ago.

 

   

 

 

MANAGEMENT COMMENTS

Rex L. Smith, III, President and Chief Executive Officer, stated, “I am pleased with the overall results of both the fourth quarter and the full year 2019, particularly the 14.7% growth in net income.   The increase in net income was fueled by several strategic initiatives that included better loan yields, higher fee income from the increase in transaction accounts as well as better than expected results for mortgage and investment sales income.  Additionally, we were able to hold noninterest expense to less than a 2.5% increase including a large onetime expense for taxes related to bringing our largest non-performing loan into OREO in the third quarter.”

 

Smith added, “Loan growth for the fourth quarter was solid at 2.3%, which is 9.2% annualized, and the pipeline for the first quarter of 2020 is very strong. Credit quality remains strong and the pipeline is diversified by loan type as well as spread across our geographic footprint.”

 

Smith concluded, “We continue to emphasize key metrics that will enhance shareholder returns.  This includes ways to leverage our capital, as shown most recently in the increase in our common stock dividend and a new stock repurchase program.  Our markets are large and diverse, which will allow us to continue our controlled growth strategy and sustained strong earnings per share growth in 2020.”

 

 

 

RESULTS OF OPERATIONS

Overview

 

Linked Quarter Basis

Two separate items of note that impact comparative results occurred during the third quarter of 2019. The first item was, a $1.1 million payoff of a loan within the PCI portfolio. The PCI portfolio contains six separate pools, two of which, due to the uncertain nature of the cash flows, have no carrying value. This $1.1 million payoff was in one of those pools, the Acquisition, Development and Construction (ADC) pool, resulting in the entire payment being interest income. The other item was the migration of a $4.0 million nonperforming loan, charged down by $200,000 and moved into the other real estate owned (OREO) category at $3.8 million. As a part of this transaction, the Bank paid delinquent real estate taxes in the amount of $624,000 on this property, all of which was expensed in the third quarter of 2019.

 

Net income of $4.0 million for the fourth quarter of 2019 was a linked quarter decrease of $568,000, or 12.3%, compared with net income of $4.6 million for the third quarter of 2019. Earnings per common share were $0.18, basic and fully diluted, in the fourth quarter of 2019 compared with $0.21 basic and $0.20 fully diluted for the quarter ended September 30, 2019. The decrease in net income on a linked quarter basis was primarily attributable to a decrease of $1.2 million, or 6.8%, in interest income, driven by the payoff in the PCI portfolio. Also affecting net income on a linked quarter basis was a decrease of $133,000 in noninterest income and an increase of $200,000 in provision for loan losses. Offsetting these decreases to net income was a reduction of $177,000 in interest expense, a reduction of $562,000 in noninterest expenses, as noted above, and a reduction of $209,000 in income tax expense.

 

Yearly Comparison 2019 versus 2018

Net income was $15.7 million for the year ended December 31, 2019 compared with $13.7 million for the same period in 2018. This is an increase of $2.0 million, or 14.7%. Interest and dividend income increased by $6.2 million, or 10.5%, and noninterest income increased by $891,000, or 20.0%. Offsetting these increases to net income were increases of $3.4 million, or 28.5%, in interest expense, $852,000, or 2.4%, in noninterest expense, $325,000 in provision for loan losses and $467,000 in income tax expense. Earnings per common share were $0.71 basic and $0.70 fully diluted for 2019 compared with $0.62 basic and $0.61 fully diluted for 2018.

 

Year-Over-Year Quarter

Net income of $4.0 million for the fourth quarter of 2019 was an increase of $688,000, or 20.5%, compared with fourth quarter 2018 net income of $3.4 million. Interest and dividend income increased by $769,000, or 5.0%, in the fourth quarter of 2019 compared with the same period in 2018, driven by interest and fees on loans, which increased $1.1 million. Noninterest income increased by $294,000, or 27.1%, year-over-year, and there was a reduction of $365,000 in noninterest expenses. Offsetting these increases to net income was an increase of $449,000, or 13.1%, in interest expense, an increase of $200,000 in provision for loan losses and an increase of $91,000 in income tax expense.

 

 2 

 

 

The following table presents summary income statements for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018 and the year ended December 31, 2019 and December 31, 2018.

 

SUMMARY INCOME STATEMENT                    
(Unaudited)                    
(Dollars and shares in thousands)  For the three months ended   For the year ended 
   31-Dec-19   30-Sep-19   31-Dec-18   31-Dec-19   31-Dec-18 
Interest income  $16,277   $17,460   $15,508   $65,449   $59,241 
Interest expense   3,864    4,041    3,415    15,492    12,054 
Net interest income   12,413    13,419    12,093    49,957    47,187 
Provision for loan losses   200    -    -    325    - 
Net interest income after provision for loan losses   12,213    13,419    12,093    49,632    47,187 
Noninterest income   1,378    1,511    1,084    5,354    4,463 
Noninterest expense   8,668    9,230    9,033    35,729    34,877 
Income before income taxes   4,923    5,700    4,144    19,257    16,773 
Income tax expense   878    1,087    787    3,552    3,085 
Net income  $4,045   $4,613   $3,357   $15,705   $13,688 
                          
EPS Basic  $0.18   $0.21   $0.15   $0.71   $0.62 
EPS Diluted  $0.18   $0.20   $0.15   $0.70   $0.61 
Fully Diluted share count   22,696    22,561    22,547    22,531    22,569 
                          
Return on average assets, annualized   1.14%   1.29%   0.98%   1.11%   1.01%
Return on average equity, annualized   10.42%   12.24%   10.01%   10.63%   10.59%

 

 

Net Interest Income

 

Linked Quarter Basis

Net interest income was $12.4 million for the quarter ended December 31, 2019 compared with $13.4 million for the quarter ended September 30, 2019. The decrease of $1.0 million was mainly attributable to the $1.1 million PCI loan payoff in the third quarter.

 

Interest and dividend income on a linked quarter basis decreased $1.2 million, or 6.8%, to $16.3 million for the fourth quarter of 2019. Interest income with respect to loans, excluding PCI loans, increased $118,000, or 0.9%, during the fourth quarter when compared with the third quarter of 2019. The yield on loans remained constant at 5.04% in each of the third and fourth quarters of 2019. Interest income with respect to PCI loans was $1.2 million in the fourth quarter of 2019 and $2.3 million in the third quarter of 2019. The increase in income in the PCI portfolio in the third quarter was driven by the $1.1 million loan payoff. Interest income on securities decreased $128,000 on a linked quarter basis as the average balance on the portfolio declined $16.0 million.

 

Securities income equaled $1.8 million on a tax-equivalent basis for the fourth quarter of 2019 compared with $1.9 million in the third quarter of 2019, a decrease of $136,000. The tax-equivalent yield on the securities portfolio was 3.15% in the fourth quarter of 2019 compared with a tax-equivalent yield of 3.17% in the third quarter of 2019. Tax-exempt securities balances declined by $3.5 million, on average, during the fourth quarter of 2019. Call activity has increased in both taxable and tax-exempt securities due to the current rate environment, and $6.8 million in municipal bonds were called during the fourth quarter of 2019. This is having a negative impact on the yield realized on the portfolio.

 

The combination of various tax-equivalent yields within the asset mix resulted in a yield on earning assets of 4.90% for the fourth quarter of 2019 compared with 5.23% in the third quarter of 2019. The receipt of cash basis income on the PCI portfolio, due to improved economic conditions, subsequent to the acquisition date in 2009, has resulted in better than forecasted performance and may produce recurring but unpredictable income over the remaining life of these loans. Excluding the $1.1 million payment in the third quarter, the yield on the PCI portfolio would have been 13.82% compared with the actual yield of 26.07%. The yield on earning assets would have been 4.90% in the third quarter compared with the actual yield of 5.23%. The yield on earning assets in the fourth quarter was 4.90%.

 

Interest expense of $3.9 million in the fourth quarter of 2019 reflected a decrease of $177,000, or 4.4%, on a linked quarter basis. Interest on deposits decreased $183,000, or 4.9%. Interest on borrowed funds increased $6,000, or 1.7%. Average interest bearing deposits decreased by $16.6 million, or 1.6%. The cost of interest bearing deposits decreased from 1.45% in the third quarter of 2019 to 1.40% in the fourth quarter of 2019. Decreased rates paid on interest bearing deposits and on short-term borrowings resulted in a decrease in the cost of interest bearing liabilities from 1.49% in the third quarter of 2019 to 1.43% in the fourth quarter of 2019.

 

 3 

 

 

The interest spread, which is reflective of the yield on earning assets less the cost of interest bearing liabilities, was 3.47% in the fourth quarter of 2019. This compares with an interest spread of 3.74% in the third quarter. Excluding the PCI payment, the interest spread would have been 3.41% in the third quarter. The net interest margin was 3.74% in the fourth quarter of 2019. The net interest margin was 4.02% in the third quarter of 2019 and, excluding the PCI payment, would have been 3.70%.

 

Yearly Comparison 2019 versus 2018

Net interest income was $50.0 million for 2019, or an increase of $2.8 million, or 5.9%, when comparing 2018 and 2019. Net interest income on a tax-equivalent basis was $50.4 million for 2019 compared with $47.8 million for 2018, an increase of $2.6 million. The yield on earning assets was 4.99% for 2019 compared with 4.71% for 2018. Interest and fees on loans of $51.6 million in 2019 was an increase of $5.3 million compared with $46.3 million for 2018. Interest and fees on PCI loans, including the $1.1 million ADC payment, increased $820,000 over this same time frame. For 2019 compared with 2018, securities income increased $31,000. On a tax-equivalent basis, the change was a decrease of $124,000. The average balance of tax-exempt securities declined $20.3 million, thus reducing the benefit received on a tax-equivalent basis on these securities. The tax-equivalent yield on the portfolio increased and was 3.23% for 2019 compared with 3.15% for 2018.

 

Interest expense of $15.5 million represented an increase of $3.4 million, or 28.5%, in 2019 compared with 2018. Average interest bearing liabilities increased $15.1 million, or 1.4%. However, the cost of interest bearing liabilities increased from 1.13% for 2018 to 1.44% for 2019. Driving the increase was growth of $46.3 million, or 8.0%, in the average balance of time deposits, from $581.6 million for 2018 to $627.9 million for 2019. This growth in time deposits, as a result of higher rates, came partly from a shift away from savings and money market accounts, which experienced a decline of $8.8 million in average balances between the comparison periods. Additionally, time deposit growth included a shift out of FHLB and other borrowings, which reflected an average balance decline of $25.3 million, or 27.8%, over the two comparison periods.

 

The tax-equivalent net interest margin was 3.82% for 2019 compared with 3.76% for 2018. The yield on earning assets increased by 28 basis points over this time frame. The competition for funding, however, pushed the cost of interest bearing liabilities up 31 basis points, from 1.13% to 1.44%. The net interest spread was 3.55% for 2019 and 3.58% for 2018. The net interest margin of 3.82% for 2019 was an increase from 3.76% for 2018. The net interest margin has been enhanced by year-over-year growth in the average balance of noninterest bearing deposits of $19.2 million, or 12.4%, and in shareholders’ equity of $18.5 million, or 14.3%.

 

Year-Over-Year Quarter

Net interest income increased $320,000, or 2.6%, from the fourth quarter of 2018 to the fourth quarter of 2019. Net interest income was $12.4 million in the fourth quarter of 2019 compared with $12.1 million for the same period in 2018. Interest and fees on loans increased by $1.1 million, or 9.3%, year-over-year, and was $13.3 million for the fourth quarter of 2019. Interest and fees on PCI loans of $1.2 million was a decrease of $120,000, or 9.3%. The average balance of loans, excluding PCI loans, was $1.047 billion for the fourth quarter of 2019, an increase of $71.6 million, or 7.3%, from the fourth quarter of 2018. The yield on loans also increased nine basis points year-over-year, from 4.95% in the fourth quarter of 2018 to 5.04% in the fourth quarter of 2019.

 

Interest income on securities of $1.7 million for the fourth quarter of 2019 was a year-over-year decrease of $234,000. Interest income on securities, on a tax-equivalent basis, was $1.8 million in the fourth quarter of 2019, which was a decrease of $282,000 compared with the fourth quarter of 2018. This decrease was driven both by average balance and yield. The average balance of the securities portfolio decreased $23.0 million year over year. Additionally, on a tax-equivalent basis, the yield on investment securities decreased from 3.31% in the fourth quarter of 2018 to 3.15% in the fourth quarter of 2019.

 

Interest expense increased $449,000, or 13.1%, when comparing the fourth quarter of 2019 and the fourth quarter of 2018. Interest expense on deposits increased $455,000, or 14.9%, even though the average balance of interest bearing deposits declined $3.5 million. The increase in deposit cost was driven by an increase in rates paid on interest bearing deposits. The cost of interest bearing deposits increased from 1.22% in the fourth quarter of 2018 to 1.40% in the fourth quarter of 2019. FHLB and other borrowings increased, on average, $3.8 million year-over-year, which was more than offset by a decrease in the rate paid, from 2.08% in the fourth quarter of 2018 to 1.82% in the fourth quarter of 2019. Overall, the Bank’s cost of interest bearing liabilities increased 16 basis points, from 1.27% in the fourth quarter of 2018 to 1.43% in the fourth quarter of 2019.

 

The tax-equivalent net interest margin decreased four basis points, from 3.78% in the fourth quarter of 2018 to 3.74% in the fourth quarter of 2019. Likewise, the interest spread decreased from 3.57% to 3.47% over the same time period.  The margin declined less than the decrease in spread as a result of an increase in the average balances in noninterest bearing deposits of $22.1 million and shareholders’ equity of $21.2 million.

 

 4 

 

 

The following table compares the Company's net interest margin, on a tax-equivalent basis, for the three months ended December 31, 2019, September 30, 2019, December 31, 2018 and the year ended December 31, 2019 and December 31, 2018.

 

NET INTEREST MARGIN            
(Unaudited)            
(Dollars in thousands)  For the three months ended 
   31-Dec-19   30-Sep-19   31-Dec-18 
Average interest earning assets  $1,326,184   $1,332,698   $1,283,502 
Interest income  $16,277   $17,460   $15,508 
Interest income - tax-equivalent  $16,364   $17,555   $15,643 
Yield on interest earning assets   4.90%   5.23%   4.84%
Average interest bearing liabilities  $1,069,709   $1,012,234   $1,066,139 
Interest expense  $3,864   $4,041   $3,415 
Cost of interest bearing liabilities   1.43%   1.49%   1.27%
Net interest income  $12,213   $13,419   $12,093 
Net interest income - tax-equivalent  $12,500   $13,514   $12,228 
Interest spread   3.47%   3.74%   3.57%
Net interest margin   3.74%   4.02%   3.78%

 

   For the year ended     
   31-Dec-19   31-Dec-18     
Average interest earning assets  $1,320,073   $1,269,683      
Interest income  $65,449   $59,241      
Interest income - tax-equivalent  $65,869   $59,816      
Yield on interest earning assets   4.99%   4.71%     
Average interest bearing liabilities  $1,077,701   $1,062,619      
Interest expense  $15,492   $12,054      
Cost of interest bearing liabilities   1.44%   1.13%     
Net interest income  $49,632   $47,187      
Net interest income - tax-equivalent  $50,377   $47,762      
Interest spread   3.55%   3.58%     
Net interest margin   3.82%   3.76%     

 

Provision for Loan Losses

 

The Company records a separate provision for loan losses for its loan portfolio, excluding PCI loans, and the PCI loan portfolio. There was a $200,000 provision for loan losses on the loan portfolio, excluding PCI loans, during the fourth quarter of 2019 compared with no provision for loan losses in the third quarter of 2019 and no provision in the fourth quarter of 2018. For the year ended December 31, 2019, there was a provision for loan losses of $325,000 compared with no provision for loan losses for the year ended December 31, 2018. The provision recognized in the fourth quarter of 2019 was due to loan growth of $23.8 million, or 2.3%, during the quarter and an uptick in delinquencies less than 90 days past due and still accruing interest. There was no provision for loan losses on the PCI loan portfolio during 2019 or 2018. Additional discussion of loan quality is presented below.

 

Noninterest Income

 

Linked Quarter Basis

Noninterest income was $1.4 million for the fourth quarter of 2019, a decrease of $133,000 compared with the third quarter of 2019. Gain/(loss) on securities transactions, net decreased $89,000 during the fourth quarter of 2019 versus the third period of 2019. Mortgage loan income of $148,000 in the fourth quarter of 2019 was a decrease of $28,000 compared with the third quarter of 2019. Also, other noninterest income of $320,000 was a decrease of $26,000 compared with the prior quarter. The linked quarter decrease was partially the result of income from life insurance proceeds of $120,000 recognized in the third quarter of 2019 offset by dividend income of $52,000 received in the fourth quarter of 2019. Gain on sale of loans of $104,000 was recognized in the fourth quarter of 2019 compared with no gain on sale of loans the prior quarter.

 

 5 

 

 

Yearly Comparison 2019 versus 2018

Noninterest income was $5.4 million for 2019, an increase of $891,000, or 20.0%, compared with $4.5 million for 2018. Service charges and fees, driven by an increase in deposits, were $2.8 million for 2019, an increase of $321,000 compared with the same period in 2018. Other noninterest income was $1.1 million for 2019, an increase of $353,000 versus 2018. The 2019 period benefited from the receipt of life insurance proceeds of $120,000, dividends on an equity investment of $159,000, compared with $30,000 in 2018, and swap fee income of $87,000. Mortgage loan income of $486,000, driven by low interest rates and refinance activity, increased by $167,000 in 2019 compared with the same period in 2018. Gain on securities transactions, net was $235,000 in 2019 compared with $70,000 for 2018. Gain on sale of loans declined by $14,000 in 2019 compared with 2018.

 

Year-Over-Year Quarter

Noninterest income increased $294,000, or 27.1%, and was $1.4 million in the fourth quarter of 2019 compared with $1.1 million for the fourth quarter of 2018. Other noninterest income increased by $131,000, driven by life insurance proceeds of $120,000, an increase in equity investment dividends of $45,000, and swap fee income of $52,000. Mortgage loan income of $148,000 was an increase of $117,000 over the same period one year earlier. Service charges and fees were $757,000 in the fourth quarter of 2019 and increased $65,000 year-over-year. Gain on sale of loans increased by $14,000 in the fourth quarter of 2019 compared with the same period in 2018. Losses on securities transactions were $39,000 in the fourth quarter of 2019 compared with losses of $12,000 for the same period in 2018.

 

Noninterest Expenses

 

Linked Quarter Basis

Noninterest expenses totaled $8.7 million for the fourth quarter of 2019, as compared with $9.2 million for the third quarter of 2019, a decrease of $562,000, or 6.1%. Other real estate expenses, net decreased by $509,000, affected by $624,000 in delinquent real estate taxes paid by the Bank in the third quarter to take title to a past due loan that was moved to OREO. Other operating expenses decreased $147,000 on a linked quarter basis and were $1.4 million in the fourth quarter of 2019. Equipment expenses declined $45,000 on a linked quarter basis and were $332,000 in the fourth quarter of 2019. Offsetting decreases to noninterest expenses was an increase of $191,000 in salaries and employee benefits, which were $5.5 million for the fourth quarter of 2019.

 

Yearly Comparison 2019 versus 2018

Noninterest expenses were $35.7 million for 2019, as compared with $34.9 million for 2018. This is an increase of $852,000, or 2.4%. Other real estate expenses, net increased $605,000 and were $718,000 for 2019, compared with $113,000 for 2018. The major cause for the increase was the payment of $624,000 in past due taxes noted above. Occupancy expenses increased $265,000 in 2019 compared with 2018 and were $3.5 million. Data processing fees increased $207,000, or 9.8% and were $2.3 million for 2019. Other operating expenses increased $223,000 and were $6.0 million for 2019. Offsetting these increases, the FDIC assessment decreased $480,000 for 2019 compared with the same period in 2018.

 

Year-Over-Year Quarter

Noninterest expenses were $8.7 million in the fourth quarter of 2019 and decreased $365,000, or 4.0%, compared with 2018. FDIC assessment decreased $197,000 and were $177,000 in the fourth quarter of 2018 and a credit of $20,000 for the fourth quarter of 2019. Salaries and employee benefits of $5.5 million in the fourth quarter of 2019 decreased $100,000 compared with the same period in 2019. Data processing expenses were $588,000 in the fourth quarter of 2019 and decreased by $67,000 compared with the same period in 2018. Equipment expenses decreased $42,000 year-over-year and were $332,000 in the fourth quarter of 2019. Occupancy expenses of $791,000 in the fourth quarter of 2019 were a decrease of $36,000 from the fourth quarter of 2018. Other operating expenses decreased $24,000 year-over-year and were $1.4 million in the fourth quarter of 2019. Offsetting these decreases to noninterest expenses was an increase in other real estate expenses, net by $101,000, as such expenses were $56,000 for the fourth quarter of 2019.

 

 6 

 

 

The following table compares the Company's other operating expenses included in noninterest expenses for the three months ended December 31, 2019, September 30, 2019, December 31, 2018 and the year ended December 31, 2019 and December 31, 2018.

 

OTHER OPERATING EXPENSES            
(Unaudited)            
(Dollars in thousands)  For the three months ended 
   31-Dec-19   30-Sep-19   31-Dec-18 
Bank franchise tax  $220   $220   $179 
Stationery, printing and supplies   155    152    163 
Marketing expense   89    117    146 
Credit expense   86    229    128 
Outside vendor fees   223    152    177 
Other expenses   668    718    672 
Total other operating expenses  $1,441   $1,588   $1,465 

 

   For the year ended     
   31-Dec-19   31-Dec-18     
Bank franchise tax  $880   $574     
Stationery, printing and supplies   625    586      
Marketing expense   526    613      
Credit expense   617    501      
Outside vendor fees   673    631      
Other expenses   2,705    2,898      
Total other operating expenses  $6,026   $5,803      

 

 

Income Taxes

 

Income tax expense was $878,000 for the three months ended December 31, 2019, compared with income tax expense of $1.1 million for the third quarter of 2019 and $787,000 for the fourth quarter of 2018. For the year ended December 31, 2019, income tax expense was $3.6 million compared with $3.1 million for 2018. The effective tax rate for the fourth quarter of 2019 was 17.8% versus 19.1% for the third quarter of 2019 and 19.0% in the fourth quarter of 2018. The effective tax rate was 18.4% for each of the years ended December 31, 2019 and 2018.

 

FINANCIAL CONDITION

 

Total assets increased $38.1 million, or 2.7%, during 2019 to $1.431 billion at December 31, 2019. Total loans, excluding PCI loans, were $1.058 billion at December 31, 2019, increasing $64.6 million, or 6.5%, from year end 2018.  Total PCI loans were $32.5 million at December 31, 2019 versus $38.3 million at year end 2018.

 

Construction and land development loans increased by the largest dollar amount during 2019, $26.2 million, or 21.7%, and were $146.6 million at December 31, 2019, or 13.9% of total loans. Commercial mortgage loans, the largest category of loans, grew by $17.0 million during 2019 and were $396.9 million at December 31, 2019, or 37.5% of total loans. Multifamily loans grew by $13.4 million during 2019 and were $73.0 million, or 6.9% of total loans. Residential 1 – 4 family loans grew $7.3 million during 2019 and were $223.5 million, or 21.1% of total loans at year end 2019. Commercial loans, 18.1% of total loans, were $191.2 million at December 31, 2019 and grew by $2.5 million during 2019.

 

 7 

 

 

The following table shows the composition of the Company's loan portfolio, excluding PCI loans, at December 31, 2019, September 30, 2019 and December 31, 2018.

 

LOANS (excluding PCI loans)                   
(Unaudited)                   
(Dollars in thousands)  31-Dec-19   30-Sep-19   31-Dec-18  
   Amount   % of Loans   Amount   % of Loans   Amount   % of Loans 
Mortgage loans on real estate:                              
Residential 1-4 family  $223,538    21.12%  $222,003    21.46%  $216,268    21.77%
Commercial   396,858    37.50    393,064    38.00    379,904    38.23 
Construction and land development   146,566    13.85    130,977    12.66    120,413    12.12 
Second mortgages   6,639    0.63    6,384    0.62    6,778    0.68 
Multifamily   72,978    6.90    73,774    7.13    59,557    5.99 
Agriculture   8,346    0.79    9,457    0.91    8,370    0.84 
Total real estate loans   854,925    80.79    835,659    80.78    791,290    79.63 
Commercial loans   191,183    18.06    185,999    17.98    188,722    18.99 
Consumer installment loans   11,163    1.05    11,883    1.15    12,048    1.21 
All other loans   1,052    0.10    981    0.09    1,645    0.17 
Gross loans   1,058,323    100.00%   1,034,522    100.00%   993,705    100.00%
Allowance for loan losses   (8,429)        (8,393)        (8,983)     
Loans, net of unearned income  $1,049,894        $1,026,129        $984,722      

 

 

The Company’s securities portfolio, excluding restricted equity securities, decreased $26.1 million, or 10.5%, since year end 2018, to $222.7 million at December 31, 2019. State, county and municipal bonds, 55.8% of total securities, decreased $20.3 million during the year and totaled $124.3 million at December 31, 2019. Gains on securities transactions, net totaled $235,000 during 2019 compared with $70,000 in 2018. The Company actively manages the portfolio to improve its liquidity and maximize the return within the desired risk profile.

 

The Company had cash and cash equivalents of $28.7 million at December 31, 2019 compared with $34.2 million at December 31, 2018. There were federal funds purchased of $24.4 million at December 31, 2019 and $19.4 million at December 31, 2018. Interest bearing bank deposits were $11.7 million at December 31, 2019 compared with $15.9 million at December 31, 2018. Cash and due from banks was $17.0 million at December 31, 2019 compared with $18.3 million at December 31, 2018.

 

The following table shows the composition of the Company's securities portfolio, excluding restricted equity securities, at December 31, 2019, September 31, 2018 and December 31, 2018.

 

SECURITIES PORTFOLIO                        
(Dollars in thousands)  31-Dec-19   30-Sep-19   31-Dec-18 
   Amortized Cost  

Fair

Value

   Amortized Cost  

Fair

Value

   Amortized Cost  

Fair

Value

 
Securities Available for Sale                              
U.S. Treasury issue  $-   $-   $7,991   $7,957   $13,460   $13,124 
U.S. Government agencies   22,104    21,936    23,098    22,955    24,689    24,609 
State, county, and municipal   95,467    98,592    90,806    94,670    112,465    112,542 
Mortgage backed securities   48,045    48,740    46,798    47,794    46,877    46,417 
Asset backed securities   11,637    11,604    10,703    10,708    5,342    5,411 
Corporate   6,016    6,097    6,011    6,075    4,685    4,623 
Total securities available for sale  $183,269   $186,969   $185,407   $190,159   $207,518   $206,726 

 

   31-Dec-19   30-Sep-19   31-Dec-18 
   Amortized Cost  

Fair

Value

   Amortized Cost  

Fair

Value

   Amortized Cost  

Fair

Value

 
Securities Held to Maturity                              
U.S. Government agencies  $10,000   $9,988   $10,000   $9,964   $10,000   $9,790 
State, county, and municipal   25,733    26,645    28,213    29,167    32,108    32,463 
Mortgage backed securities   -    -    -    -    -    - 
Total securities held to maturity  $35,733    36,633   $38,213   $39,131   $42,108   $42,253 

 

 8 

 

 

Interest bearing deposits at December 31, 2019 were $984.9 million, a decrease of $15.0 million, or 1.5%, from December 31, 2018. Time deposits over $250,000 declined by $9.5 million and were $119.5 million at December 31, 2019. Time deposits less than or equal to $250,000 decreased $7.7 million and totaled $477.5 million at December 31, 2019. Money market deposit accounts, $120.8 million at December 31, 2019, decreased by $6.1 million during 2019. Offsetting these decreases to interest bearing deposits was an increase of $4.6 million in NOW accounts and an increase of $3.7 million in savings accounts.

 

The following table compares the mix of interest bearing deposits at December 31, 2019, September 30, 2019, June 30, 2019 and December 31, 2018.

 

INTEREST BEARING DEPOSITS                
(Unaudited)                
(Dollars in thousands)                
   31-Dec-19   30-Sep-19   30-Jun-19   31-Dec-18 
NOW  $170,532   $147,639   $163,224   $165,946 
MMDA   120,841    130,263    130,720    126,933 
Savings   96,570    96,388    94,508    92,910 
Time deposits less than or equal to $250,000   477,461    483,745    508,598    485,155 
Time deposits over $250,000   119,460    136,206    138,759    128,945 
Total interest bearing deposits  $984,864   $994,241   $1,035,809   $999,889 

 

 

FHLB borrowings were $68.5 million at December 31, 2019, compared with $59.4 million at December 31, 2018.

 

Shareholders’ equity was $155.5 million at December 31, 2019, an increase of $18.0 million, or 13.1%, from shareholders’ equity of $137.5 million at December 31, 2018. Shareholders’ equity to assets was 10.9% at December 31, 2019 compared with 9.9% at December 31, 2018.

 

Asset Quality – non-covered assets

 

The allowance for loan losses equaled 159.3% of nonaccrual loans at December 31, 2019, compared with 146.1% at September 30, 2019, 79.85% at June 30, 2019 and 94.6% at December 31, 2018. The ratio of nonperforming assets to loans and OREO was 0.92% at December 31, 2019, 1.01% at September 30, 2019, 1.17% at June 30, 2019 and 1.07% at December 31, 2018.

 

The following table reconciles the activity in the Company's non-PCI allowance for loan losses, by quarter, for the past five quarters.

 

ALLOWANCE FOR LOAN LOSSES               
(Unaudited)                    
(Dollars in thousands)  2019   2018 
   Fourth   Third   Second   First   Fourth 
   Quarter   Quarter   Quarter   Quarter   Quarter 
Allowance for loan losses:                    
Beginning of period  $8,393   $8,819   $8,661   $8,983   $8,993 
Provision for loan losses   200    -    125    -    - 
Net (charge-offs) recoveries   (164)   (426)   33    (322)   (10)
End of period  $8,429   $8,393   $8,819   $8,661   $8,983 

 

 

The following table sets forth selected asset quality data, excluding PCI loans, and ratios for the dates indicated.

 

ASSET QUALITY (excluding PCI loans)         
(Unaudited)                    
(Dollars in thousands)  2019   2018 
   31-Dec-19   30-Sep-19   30-Jun-19   31-Mar-19   31-Dec-18 
Nonaccrual loans  $5,292   $5,746   $11,045   $10,990   $9,500 
Total nonperforming loans   5,292    5,746    11,045    10,990    9,500 
Other real estate owned   4,527    4,740    983    1,225    1,099 
Total nonperforming assets  $9,819   $10,486   $12,028   $12,215   $10,599 
                          
Allowance for loan losses to loans   0.80%   0.81%   0.86%   0.87%   0.90%
Allowance for loan losses to nonaccrual loans   159.28    146.10    79.85    78.81    94.57 
Nonperforming assets to loans and other real estate   0.92    1.01    1.17    1.22    1.07 
Net charge-offs/(recoveries) for quarter to average loans, annualized   0.06%   0.16%   (0.01)%   0.13%%   0.00%

 

 

 9 

 

 

A further breakout of nonaccrual loans, excluding PCI loans, at December 31, 2019, September 30, 2018 and December 31, 2018 is below.

 

NONACCRUAL LOANS (excluding PCI loans)           
(Unaudited)       
(Dollars in thousands)            
   31-Dec-19   30-Sep-19   31-Dec-18 
Mortgage loans on real estate:               
Residential 1-4 family  $1,378   $1,349   $1,257 
Commercial   1,006    1,059    2,123 
Construction and land development   376    406    4,571 
Multi-family   2,463    2,494    - 
Total real estate loans  $5,223   $5,308   $7,951 
Commercial loans   62    431    1,549 
Consumer installment loans   7    7    - 
Gross loans  $5,292   $5,746   $9,500 

 

 

Capital Requirements

 

The Bank’s ratio of total risk-based capital was 13.9% at December 31, 2019 compared with 13.3% at December 31, 2018. The tier 1 risk-based capital ratio was 13.2% at December 31, 2019 and 12.6% at December 31, 2018. The Bank’s tier 1 leverage ratio was 11.0% at December 31, 2019 and 10.2% at December 31, 2018.  All capital ratios exceed regulatory minimums to be considered well capitalized. BASEL III introduced the common equity tier 1 capital ratio, which was 13.2% at December 31, 2019 and 12.6% at December 31, 2018.

 

Earnings Conference Call and Webcast

 

The Company will host a conference call for interested parties on Friday, January 24, 2020, at 10:00 a.m. Eastern Time to discuss the fourth quarter and year 2019 results. The public is invited to listen to this conference call by dialing 866-374-8379 at least five minutes prior to the call.  Interested parties may also listen to this conference call through the internet by accessing the “Corporate Overview – Corporate Profile” page of the Company’s internet site at www.cbtrustcorp.com.

 

A replay of the conference call will be available from 12:00 noon Eastern Time on January 24, 2020 until 9:00 a.m. Eastern Time on February 14, 2020. The replay will be available by dialing 877-344-7529 and entering access code 10138188 or through the internet by accessing the “Corporate Overview – Corporate Profile” page of the Company’s internet site at www.cbtrustcorp.com.

 

About Community Bankers Trust Corporation and Essex Bank

 

Community Bankers Trust Corporation is the holding company for Essex Bank, a Virginia state bank with 24 full-service offices, 18 of which are in Virginia and six of which are in Maryland. The Bank also operates two loan production offices.

 

Additional information on the Bank is available on the Bank’s website at www.essexbank.com. For information on Community Bankers Trust Corporation, please visit its website at www.cbtrustcorp.com.

 

 10 

 

 

Forward-Looking Statements

 

This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements with respect to the Company’s operations, performance, future strategy and goals. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the effects of and changes in the following: the quality or composition of the Company’s loan or investment portfolios, including collateral values and the repayment abilities of borrowers and issuers; assumptions that underlie the Company’s allowance for loan losses; general economic and market conditions, either nationally or in the Company’s market areas; the interest rate environment; competitive pressures among banks and financial institutions or from companies outside the banking industry; real estate values; the demand for deposit, loan and investment products and other financial services; the demand, development and acceptance of new products and services; the performance of vendors or other parties with which the Company does business; time and costs associated with de novo branching, acquisitions, dispositions and similar transactions; the realization of gains and expense savings from acquisitions, dispositions and similar transactions; consumer profiles and spending and savings habits; levels of fraud in the banking industry; the level of attempted cyber-attacks in the banking industry; the securities and credit markets; costs associated with the integration of banking and other internal operations; the soundness of other financial institutions with which the Company does business; inflation; technology; and legislative and regulatory requirements. Many of these factors and additional risks and uncertainties are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and other reports filed from time to time by the Company with the Securities and Exchange Commission. This press release speaks only as of its date, and the Company disclaims any duty to update the information in it.

 

Contact: Bruce E. Thomas

Executive Vice President/Chief Financial Officer

Community Bankers Trust Corporation

804-934-9999 

 

 

 

 11 

 

 

COMMUNITY BANKERS TRUST CORPORATION 
CONSOLIDATED BALANCE SHEETS       
UNAUDITED       
(Dollars in thousands, except per share data) 
   31-Dec-19   30-Sep-19   31-Dec-18 
Assets               
Cash and due from banks  $16,976   $23,056   $18,292 
Interest bearing bank deposits   11,708    13,742    15,927 
Total cash and cash equivalents   28,684    36,798    34,219 
                
Securities available for sale, at fair value   186,969    190,159    206,726 
Securities held to maturity, at cost   35,733    38,213    42,108 
Equity securities, restricted, at cost   8,855    8,929    7,800 
Total securities   231,557    237,301    256,634 
                
Loans held for resale   501    -    146 
                
Loans   1,058,323    1,034,522    993,705 
Purchased credit impaired (PCI) loans   32,528    33,958    38,285 
Allowance for loan losses   (8,429)   (8,393)   (8,983)
Allowance for loan losses – PCI loans   (156)   (156)   (156)
Net loans   1,082,266    1,059,931    1,022,851 
                
Bank premises and equipment, net   29,472    29,713    31,488 
Bank premises and equipment held for sale   1,589    1,589    1,252 
Leased assets   6,472    6,709    - 
Other real estate owned, net   4,527    4,740    1,099 
Bank owned life insurance   29,340    29,161    28,834 
Other assets   16,849    16,739    16,627 
Total assets  $1,431,257   $1,422,681   $1,393,150 
                
Liabilities               
Deposits:               
Noninterest bearing  $178,584   $183,000   $165,086 
Interest bearing   984,864    994,241    999,889 
Total deposits   1,163,448    1,177,241    1,164,975 
                
Federal funds purchased   24,437    71    19,440 
Federal Home Loan Bank borrowings   68,500    73,667    59,447 
Trust preferred capital notes   4,124    4,124    4,124 
Lease liabilities   6,737    6,967    - 
Other liabilities   8,532    7,973    7,703 
Total liabilities   1,275,778    1,270,043    1,255,689 
                
Shareholders' Equity               
Common stock (200,000,000 shares authorized $0.01 par value; 22,422,621, 22,335,411 and 22,132,304 shares issued and outstanding, respectively)   224    223    221 
Additional paid in capital   150,728    150,264    148,763 
Retained earnings (deficit)   2,562    (586)   (10,244)
Accumulated other comprehensive income (loss)   1,965    2,737    (1,279)
Total shareholders' equity   155,479    152,638    137,461 
Total liabilities and shareholders' equity  $1,431,257   $1,422,681   $1,393,150 

 

 12 

 

 

COMMUNITY BANKERS TRUST CORPORATION    
CONSOLIDATED STATEMENTS OF INCOME    
UNAUDITED        
(Dollars in thousands)    
   2019   2018 
Interest and dividend income          
Interest and fees on loans  $51,551   $46,291 
Interest and fees on PCI loans   6,042    5,222 
Interest on federal funds sold   14    5 
Interest on deposits in other banks   391    303 
Interest and dividends on securities          
  Taxable   5,870    5,258 
  Nontaxable   1,581    2,162 
Total interest and dividend income   65,449    59,241 
Interest expense          
Interest on deposits   14,036    10,257 
Interest on borrowed funds   1,456    1,797 
Total interest expense   15,492    12,054 
           
Net interest income   49,957    47,187 
Provision for loan losses   325    - 
Net interest income after provision for loan losses   49,632    47,187 
           
Noninterest income          
Service charges and fees   2,831    2,510 
Gain on securities transactions, net   235    70 
Gain on sale of loans, net   14    118 
Income on bank owned life insurance   724    735 
Mortgage loan income   486    319 
Other   1,064    711 
Total noninterest income   5,354    4,463 
           
Noninterest expense          
Salaries and employee benefits   21,423    21,477 
Occupancy expenses   3,453    3,188 
Equipment expenses   1,484    1,398 
FDIC assessment   296    776 
Data processing fees   2,329    2,122 
Other real estate expenses, net   718    113 
Other operating expenses   6,026    5,803 
Total noninterest expense   35,729    34,877 
           
Income before income taxes   19,257    16,773 
Income tax expense   3,552    3,085 
Net income  $15,705   $13,688 

 

 13 

 

 

COMMUNITY BANKERS TRUST CORPORATION            
CONSOLIDATED STATEMENTS OF INCOME            
UNAUDITED                    
(Dollars in thousands)  Three months ended 
   31-Dec-19   30-Sep-19   30-Jun-19   31-Mar-19   31-Dec-18 
Interest and dividend income                         
Interest and fees on loans  $13,305   $13,187   $12,640   $12,419   $12,169 
Interest and fees on PCI loans   1,165    2,333    1,251    1,293    1,285 
Interest on federal funds sold   -    9    5    -    4 
Interest on deposits in other banks   91    87    117    96    100 
Interest and dividends on securities                         
  Taxable   1,387    1,489    1,472    1,522    1,442 
  Nontaxable   329    355    421    476    508 
Total interest and dividend income   16,277    17,460    15,906    15,806    15,508 
Interest expense                         
Interest on deposits   3,515    3,698    3,589    3,234    3,060 
Interest on borrowed funds   349    343    317    447    355 
Total interest expense   3,864    4,041    3,906    3,681    3,415 
                          
Net interest income   12,413    13,419    12,000    12,125    12,093 
Provision for loan losses   200    -    125    -    - 
Net interest income after provision for loan losses   12,213    13,419    11,875    12,125    12,093 
                          
Noninterest income                         
Service charges and fees   757    758    707    609    692 
Gain (loss) on securities transactions, net   (39)   50    238    (14)   (12)
Gain on sale of loans, net   14    -    -    -    - 
Income on bank owned life insurance   178    181    184    181    184 
Mortgage loan income   148    176    100    62    31 
Other   320    346    222    176    189 
Total noninterest income   1,378    1,511    1,451    1,014    1,084 
                          
Noninterest expense                         
Salaries and employee benefits   5,480    5,289    5,273    5,381    5,580 
Occupancy expenses   791    813    919    930    827 
Equipment expenses   332    377    394    381    374 
FDIC assessment   (20)   4    162    150    177 
Data processing fees   588    594    579    568    655 
Other real estate expenses, net   56    565    105    (8)   (45)
Other operating expenses   1,441    1,588    1,559    1,438    1,465 
Total noninterest expense   8,668    9,230    8,991    8,840    9,033 
                          
Income before income taxes   4,923    5,700    4,335    4,299    4,144 
Income tax expense   878    1,087    791    796    787 
Net income  $4,045   $4,613   $3,544   $3,503   $3,357 

 

 14 

 

 

COMMUNITY BANKERS TRUST CORPORATION

NET INTEREST MARGIN ANALYSIS

AVERAGE BALANCE SHEETS

(Unaudited)

(Dollars in thousands)                          

   Three months ended December 31, 2019   Three months ended September 30, 2019  
   Average
Balance
Sheet		   Interest Income / Expense   Average Rates Earned / Paid   Average
Balance
Sheet		   Interest Income / Expense   Average Rates Earned / Paid 
ASSETS:                              
Loans, including fees  $1,047,069   $13,305    5.04%  $1,037,433   $13,187    5.04%
PCI loans,  including fees   33,331    1,165    13.68    34,999    2,333    26.07 
Total loans   1,080,400    14,470    5.31    1,072,432    15,520    5.74 
Interest bearing bank balances   16,644    91    2.16    13,454    87    2.58 
Federal funds sold   90    -    1.66    1,795    9    2.08 
Securities (taxable)   182,887    1,387    3.03    195,401    1,489    3.05 
Securities (tax exempt)(1)   46,163    416    3.60    49,616    450    3.63 
Total earning assets   1,326,184    16,364    4.90    1,332,698    17,555    5.23 
Allowance for loan losses   (8,513)             (8,872)          
Non-earning assets   105,654              101,129           
Total assets  $1,423,325             $1,424,955           
                               
LIABILITIES AND                              
SHAREHOLDERS’ EQUITY                              
Demand - interest bearing  $162,449   $88    0.22   $155,208   $85    0.22 
Savings and money market   224,636    337    0.60    224,401    330    0.58 
Time deposits   608,560    3,090    2.01    632,625    3,283    2.06 
Total interest bearing deposits   995,645    3,515    1.40    1,012,234    3,698    1.45 
Short-term borrowings   5,462    29    2.10    4,409    28    2.53 
FHLB and other borrowings   68,602    320    1.82    62,079    315    1.99 
Total interest bearing liabilities   1,069,709    3,864    1.43    1,078,722    4,041    1.49 
Noninterest bearing deposits   183,787              181,249           
Other liabilities   14,502              14,246           
Total liabilities   1,267,998              1,274,217           
Shareholders’ equity   155,327              150,738           
Total liabilities and                              
  shareholders’ equity  $1,423,325             $1,424,955           
Net interest earnings       $12,500             $13,514      
Interest spread             3.47%             3.74%
Net interest margin             3.74%             4.02%
                               
Tax-equivalent adjustment:                              
Securities        86             $95      

 

(1)Income and yields are reported on a tax-equivalent basis assuming a federal tax rate of 21%.

 

 15 

 

 

COMMUNITY BANKERS TRUST CORPORATION

NET INTEREST MARGIN ANALYSIS

AVERAGE BALANCE SHEETS

(Unaudited)

(Dollars in thousands)                                  

   Year ended December 31, 2019   Year ended December 31, 2018  
   Average
Balance
Sheet		   Interest Income / Expense   Average Rates Earned / Paid   Average
Balance
Sheet		   Interest Income / Expense   Average Rates Earned / Paid 
ASSETS:                              
Loans, including fees  $1,023,861   $51,551    5.03%  $960,978   $46,291    4.82%
PCI loans, including fees   35,568    6,042    16.99    40,641    5,222    12.85 
Total loans   1,059,429    57,593    5.44    1,001,619    51,513    5.14 
Interest bearing bank balances   15,977    391    2.45    13,995    303    2.16 
Federal funds sold   688    14    2.16    242    5    2.03 
Securities (taxable)   188,531    5,870    3.11    178,086    5,258    2.95 
Securities (tax exempt)(1)   55,448    2,001    3.61    75,741    2,737    3.61 
Total earning assets   1,320,073    65,869    4.99    1,269,683    59,815    4.71 
Allowance for loan losses   (8,821)             (9,198)          
Non-earning assets   101,590              92,621           
Total assets  $1,412,842             $1,353,106           
                               
LIABILITIES AND                              
SHAREHOLDERS’ EQUITY                              
Demand - interest bearing  $157,876   $346    0.22   $156,541   $325    0.21 
Savings and money market   221,817    1,268    0.57    230,637    1,187    0.51 
Time deposits   627,913    12,422    1.98    581,619    8,745    1.50 
Total interest bearing deposits   1,007,606    14,036    1.39    968,797    10,257    1.06 
Short-term borrowings   4,422    113    2.56    2,856    65    2.28 
FHLB and other borrowings   65,673    1,343    2.04    90,966    1,732    1.90 
Total interest bearing liabilities   1,077,701    15,492    1.44    1,062,619    12,054    1.13 
Noninterest bearing deposits   174,163              155,003           
Other liabilities   13,235              6,219           
Total liabilities   1,265,099              1,223,841           
Shareholders’ equity   147,743              129,265           
Total liabilities and Shareholders'                              
equity  $1,412,842             $1,353,106           
Net interest earnings       $50,377             $47,762      
Interest spread             3.55%             3.58%
Net interest margin             3.82%             3.76%
                               
Tax-equivalent adjustment:                              
Securities       $420             $575      

 

(1)Income and yields are reported on a tax-equivalent basis assuming a federal tax rate of 21%.

 

 16 

 

 

COMMUNITY BANKERS TRUST CORPORATION

NET INTEREST MARGIN ANALYSIS

AVERAGE BALANCE SHEETS

(Unaudited)

(Dollars in thousands)                                  

   Three months ended December 31, 2019   Three months ended December 31, 2018  
   Average
Balance
Sheet		   Interest Income / Expense   Average Rates Earned / Paid   Average
Balance
Sheet		   Interest Income / Expense   Average Rates Earned / Paid 
ASSETS:                              
Loans, including fees  $1,047,069   $13,305    5.04%  $975,428   $12,169    4.95%
PCI loans, including fees   33,331    1,165    13.68    38,489    1,285    13.06 
Total loans   1,080,400    14,470    5.31    1,013,917    13,454    5.26 
Interest bearing bank balances   16,644    91    2.16    16,761    100    2.36 
Federal funds sold   90    -    1.66    725    4    2.11 
Securities (taxable)   182,887    1,387    3.03    181,192    1,442    3.18 
Securities (tax exempt)(1)   46,163    416    3.60    70,907    643    3.63 
Total earning assets   1,326,184    16,364    4.90    1,283,502    15,643    4.84 
Allowance for loan losses   (8,513)             (9,126)          
Non-earning assets   105,654              94,478           
Total assets  $1,423,325             $1,368,854           
                               
LIABILITIES AND                              
SHAREHOLDERS’ EQUITY                              
Demand - interest bearing  $162,449   $88    0.22   $159,645   $88    0.22 
Savings and money market   224,636    337    0.60    220,391    284    0.51 
Time deposits   608,560    3,090    2.01    619,116    2,688    1.72 
Total interest bearing deposits   995,645    3,515    1.40    999,152    3,060    1.22 
Short-term borrowings   5,462    29    2.10    2,156    15    2.74 
FHLB and other borrowings   68,602    320    1.82    64,831    340    2.08 
Total interest bearing liabilities   1,069,709    3,864    1.43    1,066,139    3,415    1.27 
Noninterest bearing deposits   183,787              161,720           
Other liabilities   14,502              6,891           
Total liabilities   1,267,998              1,234,750           
Shareholders’ equity   155,327              134,104           
Total liabilities and                              
   shareholders’ equity  $1,423,325             $1,368,854           
Net interest earnings       $12,500             $12,228      
Interest spread             3.47%             3.57%
Net interest margin             3.74%             3.78%
                               
Tax-equivalent adjustment:                              
Securities        86             $135      

 

(1)Income and yields are reported on a tax-equivalent basis assuming a federal tax rate of 21%.

 

 17