10-Q 1 esxb-20190630x10q.htm 10-Q esxb_Current_Folio_10Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended June 30, 2019

 

 

or

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the transition period from                  to                

Commission File Number: 001‑32590

COMMUNITY BANKERS TRUST CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Virginia

20‑2652949

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

9954 Mayland Drive, Suite 2100

 

Richmond, Virginia

23233

(Address of principal executive offices)

(Zip Code)

(804) 934‑9999

(Registrant’s telephone number, including area code)

 

n/a

(Former name, former address and former fiscal year, if changed since last report)

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 during the 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 ☑  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit. such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐  No ☑

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

 

 

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common Stock, $0.01 par value

 

ESXB

 

The NASDAQ Stock Market, LLC

 

At June 30, 2019, there were 22,258,456 shares of the Company’s common stock outstanding.

 

 

COMMUNITY BANKERS TRUST CORPORATION

TABLE OF CONTENTS

FORM 10‑Q

June 30, 2019

PART I — FINANCIAL INFORMATION 

 

Item 1. Financial Statements 

3

Unaudited Consolidated Balance Sheets 

3

Unaudited Consolidated Statements of Income 

4

Unaudited Consolidated Statements of Comprehensive Income 

5

Unaudited Consolidated Statements of Changes in Shareholders’ Equity 

6

Unaudited Consolidated Statements of Cash Flows 

7

Notes to Unaudited Consolidated Financial Statements 

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 

31

Item 3. Quantitative and Qualitative Disclosures About Market Risk 

45

Item 4. Controls and Procedures 

46

PART II — OTHER INFORMATION 

 

Item 1. Legal Proceedings 

46

Item 1A. Risk Factors 

47

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

47

Item 3. Defaults upon Senior Securities 

47

Item 4. Mine Safety Disclosures 

47

Item 5. Other Information 

47

Item 6. Exhibits 

47

SIGNATURES 

48

 

 

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2019 AND DECEMBER 31, 2018

(dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

    

June 30, 2019

    

December 31, 2018  *

ASSETS

 

 

 

 

 

 

Cash and due from banks

 

$

17,858

 

$

18,292

Interest bearing bank deposits

 

 

14,696

 

 

15,927

Federal funds sold

 

 

228

 

 

 —

Total cash and cash equivalents

 

 

32,782

 

 

34,219

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

211,904

 

 

206,726

Securities held to maturity, at cost (fair value of $41,208 and $42,253, respectively)

 

 

40,368

 

 

42,108

Equity securities, restricted, at cost

 

 

7,718

 

 

7,800

Total securities

 

 

259,990

 

 

256,634

 

 

 

 

 

 

 

Loans held for sale

 

 

639

 

 

146

 

 

 

 

 

 

 

Loans

 

 

1,024,250

 

 

993,705

Purchased credit impaired (PCI) loans

 

 

35,898

 

 

38,285

Total loans

 

 

1,060,148

 

 

1,031,990

Allowance for loan losses (loans of $8,819 and $8,983, respectively; PCI loans of $156 and $156, respectively)

 

 

(8,975)

 

 

(9,139)

Net loans

 

 

1,051,173

 

 

1,022,851

 

 

 

 

 

 

 

Bank premises and equipment, net

 

 

30,635

 

 

31,488

Bank premises and equipment held for sale

 

 

1,252

 

 

1,252

Leased assets

 

 

6,944

 

 

 —

Other real estate owned

 

 

983

 

 

1,099

Bank owned life insurance

 

 

29,199

 

 

28,834

Other assets

 

 

17,534

 

 

16,627

Total assets

 

$

1,431,131

 

$

1,393,150

 

 

 

 

 

 

 

LIABILITIES

 

 

  

 

 

  

Deposits:

 

 

  

 

 

  

Noninterest bearing

 

$

180,399

 

$

165,086

Interest bearing

 

 

1,035,809

 

 

999,889

Total deposits

 

 

1,216,208

 

 

1,164,975

 

 

 

 

 

 

 

Federal funds purchased

 

 

 —

 

 

19,440

Federal Home Loan Bank borrowings

 

 

48,696

 

 

59,447

Trust preferred capital notes

 

 

4,124

 

 

4,124

Lease liabilities

 

 

7,192

 

 

 —

Other liabilities

 

 

7,515

 

 

7,703

Total liabilities

 

 

1,283,735

 

 

1,255,689

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

  

 

 

  

Common stock (200,000,000 shares authorized, $0.01 par value; 22,258,456 and 22,132,304 shares issued and outstanding, respectively)

 

 

223

 

 

221

Additional paid in capital

 

 

149,752

 

 

148,763

Retained deficit

 

 

(4,529)

 

 

(10,244)

Accumulated other comprehensive income (loss)

 

 

1,950

 

 

(1,279)

Total shareholders’ equity

 

 

147,396

 

 

137,461

Total liabilities and shareholders’ equity

 

$

1,431,131

 

$

1,393,150


*Derived from audited consolidated financial statements

See accompanying notes to unaudited consolidated financial statements

3

 

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(dollars and shares in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Three months ended

 

Six months ended

 

 

 

June 30, 2019

    

June 30, 2018

 

June 30, 2019

    

June 30, 2018

 

Interest and dividend income

 

 

  

 

 

  

 

 

  

 

 

  

 

Interest and fees on loans

 

$

12,640

 

$

11,353

 

$

25,059

 

$

22,229

 

Interest and fees on PCI loans

 

 

1,251

 

 

1,274

 

 

2,544

 

 

2,672

 

Interest on federal funds sold

 

 

 5

 

 

 1

 

 

 5

 

 

 1

 

Interest on deposits in other banks

 

 

117

 

 

69

 

 

213

 

 

109

 

Interest and dividends on securities

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

1,472

 

 

1,266

 

 

2,994

 

 

2,452

 

Nontaxable

 

 

421

 

 

547

 

 

897

 

 

1,126

 

Total interest and dividend income

 

 

15,906

 

 

14,510

 

 

31,712

 

 

28,589

 

Interest expense

 

 

  

 

 

  

 

 

  

 

 

  

 

Interest on deposits

 

 

3,589

 

 

2,355

 

 

6,823

 

 

4,498

 

Interest on borrowed funds

 

 

317

 

 

508

 

 

764

 

 

977

 

Total interest expense

 

 

3,906

 

 

2,863

 

 

7,587

 

 

5,475

 

Net interest income

 

 

12,000

 

 

11,647

 

 

24,125

 

 

23,114

 

Provision for loan losses

 

 

125

 

 

 —

 

 

125

 

 

 —

 

Net interest income after provision for loan losses

 

 

11,875

 

 

11,647

 

 

24,000

 

 

23,114

 

Noninterest income

 

 

  

 

 

  

 

 

  

 

 

  

 

Service charges and fees

 

 

707

 

 

611

 

 

1,316

 

 

1,192

 

Gain (loss) on securities transactions, net

 

 

238

 

 

(16)

 

 

224

 

 

14

 

Gain on sale of other loans

 

 

 —

 

 

53

 

 

 —

 

 

53

 

Income on bank owned life insurance

 

 

184

 

 

184

 

 

365

 

 

367

 

Mortgage loan income

 

 

100

 

 

80

 

 

162

 

 

191

 

Other

 

 

222

 

 

223

 

 

398

 

 

351

 

Total noninterest income

 

 

1,451

 

 

1,135

 

 

2,465

 

 

2,168

 

Noninterest expense

 

 

  

 

 

  

 

 

  

 

 

  

 

Salaries and employee benefits

 

 

5,273

 

 

5,019

 

 

10,654

 

 

10,868

 

Occupancy expenses

 

 

919

 

 

769

 

 

1,849

 

 

1,581

 

Equipment expenses

 

 

394

 

 

344

 

 

775

 

 

658

 

FDIC assessment

 

 

162

 

 

198

 

 

312

 

 

404

 

Data processing fees

 

 

579

 

 

499

 

 

1,147

 

 

985

 

Other real estate expense, net

 

 

105

 

 

45

 

 

97

 

 

95

 

Other operating expenses

 

 

1,559

 

 

1,313

 

 

2,997

 

 

2,962

 

Total noninterest expense

 

 

8,991

 

 

8,187

 

 

17,831

 

 

17,553

 

Income before income taxes

 

 

4,335

 

 

4,595

 

 

8,634

 

 

7,729

 

Income tax expense

 

 

791

 

 

813

 

 

1,587

 

 

1,353

 

Net income

 

$

3,544

 

$

3,782

 

$

7,047

 

$

6,376

 

Net income per share — basic

 

$

0.16

 

$

0.17

 

$

0.32

 

$

0.29

 

Net income per share — diluted

 

$

0.16

 

$

0.17

 

$

0.31

 

$

0.28

 

Weighted average number of shares outstanding

 

 

  

 

 

  

 

 

  

 

 

  

 

Basic

 

 

22,228

 

 

22,096

 

 

22,185

 

 

22,086

 

Diluted

 

 

22,433

 

 

22,580

 

 

22,432

 

 

22,551

 

 

See accompanying notes to unaudited consolidated financial statements

4

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

    

June 30, 2019

 

June 30, 2018

 

June 30, 2019

 

June 30, 2018

 

Net income

 

$

3,544

 

$

3,782

 

$

7,047

 

$

6,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized gain (loss) in investment securities

 

 

2,399

 

 

(667)

 

 

4,603

 

 

(3,154)

 

Tax related to unrealized (gain) loss in investment securities

 

 

(527)

 

 

147

 

 

(1,012)

 

 

694

 

Reclassification adjustment for (gain) loss in securities sold

 

 

(238)

 

 

16

 

 

(224)

 

 

(14)

 

Tax related to realized gain (loss) in securities sold

 

 

52

 

 

(4)

 

 

49

 

 

 3

 

Cash flow hedge:

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in unrealized (loss) gain in cash flow hedge

 

 

(145)

 

 

24

 

 

(239)

 

 

211

 

Tax related to cash flow hedge

 

 

32

 

 

(5)

 

 

52

 

 

(46)

 

Total other comprehensive income (loss)

 

 

1,573

 

 

(489)

 

 

3,229

 

 

(2,306)

 

Total comprehensive income

 

$

5,117

 

$

3,293

 

$

10,276

 

$

4,070

 

 

See accompanying notes to unaudited consolidated financial statements

5

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(dollars and shares in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Paid in

 

Retained

 

Comprehensive

 

 

 

 

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income  (Loss)

    

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance January 1, 2019

 

22,132

 

$

221

 

$

148,763

 

$

(10,244)

 

$

(1,279)

 

$

137,461

Issuance of common stock

 

 6

 

 

 —

 

 

54

 

 

 —

 

 

 —

 

 

54

Exercise and issuance of employee stock options

 

31

 

 

 1

 

 

298

 

 

 —

 

 

 —

 

 

299

Net income

 

 —

 

 

 —

 

 

 —

 

 

3,503

 

 

 —

 

 

3,503

Dividends of $0.03 per share paid on common stock

 

 —

 

 

 —

 

 

 —

 

 

(665)

 

 

 —

 

 

(665)

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

1,656

 

 

1,656

Balance March 31, 2019

 

22,169

 

 

222

 

 

149,115

 

 

(7,406)

 

 

377

 

 

142,308

Issuance of common stock

 

 8

 

 

 —

 

 

53

 

 

 —

 

 

 —

 

 

53

Exercise and issuance of employee stock options

 

81

 

 

 1

 

 

584

 

 

 —

 

 

 —

 

 

585

Net income

 

 —

 

 

 —

 

 

 —

 

 

3,544

 

 

 —

 

 

3,544

Dividends of $0.03 per share paid on common stock

 

 —

 

 

 —

 

 

 —

 

 

(667)

 

 

 —

 

 

(667)

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

1,573

 

 

1,573

Balance June 30, 2019

 

22,258

 

$

223

 

$

149,752

 

$

(4,529)

 

$

1,950

 

$

147,396

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Other

 

 

 

 

 

Common Stock

 

Paid in

 

Retained

 

Comprehensive

 

 

 

 

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income (Loss)

    

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance January 1, 2018

 

22,073

 

$

221

 

$

147,671

 

$

(23,932)

 

$

43

 

$

124,003

Issuance of common stock

 

 4

 

 

 —

 

 

39

 

 

 —

 

 

 —

 

 

39

Exercise and issuance of employee stock options

 

 7

 

 

 —

 

 

225

 

 

 —

 

 

 —

 

 

225

Net income

 

 —

 

 

 —

 

 

 —

 

 

2,594

 

 

 —

 

 

2,594

Other comprehensive loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(1,817)

 

 

(1,817)

Balance March 31, 2018

 

22,084

 

 

221

 

 

147,935

 

 

(21,338)

 

 

(1,774)

 

 

125,044

Issuance of common stock

 

 3

 

 

 —

 

 

35

 

 

 —

 

 

 —

 

 

35

Exercise and issuance of employee stock options

 

24

 

 

 —

 

 

272

 

 

 —

 

 

 —

 

 

272

Net income

 

 —

 

 

 —

 

 

 —

 

 

3,782

 

 

 —

 

 

3,782

Other comprehensive loss

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(489)

 

 

(489)

Balance June 30, 2018

 

22,111

 

$

221

 

$

148,242

 

$

(17,556)

 

$

(2,263)

 

$

128,644

 

See accompanying notes to unaudited consolidated financial statements

6

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018

(dollars in thousands)

 

 

 

 

 

 

 

 

 

    

June 30, 2019

    

June 30, 2018

 

Operating activities:

 

 

 

 

 

 

 

Net income

 

$

7,047

 

$

6,376

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and intangibles amortization

 

 

1,061

 

 

940

 

Leased asset amortization

 

 

464

 

 

 —

 

Stock-based compensation expense

 

 

536

 

 

464

 

Tax benefit of exercised stock options

 

 

(83)

 

 

(37)

 

Amortization of purchased loan premium

 

 

191

 

 

143

 

Provision for loan losses

 

 

125

 

 

 —

 

Amortization of security premiums and accretion of discounts, net

 

 

623

 

 

850

 

Net gain on sale of securities

 

 

(224)

 

 

(14)

 

Net gain on sale and valuation of other real estate owned

 

 

 (37)

 

 

 —

 

Net gain on sale of loans

 

 

 —

 

 

(53)

 

Originations of mortgages held for sale

 

 

(4,827)

 

 

(872)

 

Proceeds from sales of mortgages held for sale

 

 

4,334

 

 

872

 

Increase in bank owned life insurance investment

 

 

(365)

 

 

(368)

 

Changes in assets and liabilities:

 

 

 

 

 

  

 

Increase in other assets

 

 

(1,486)

 

 

(643)

 

(Decrease) increase in accrued expenses and other liabilities

 

 

(304)

 

 

525

 

Net cash provided by operating activities

 

 

7,055

 

 

8,183

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

  

 

 

  

 

Proceeds from sales/calls/maturities/paydowns of available for sale securities

 

 

46,366

 

 

20,549

 

Proceeds from calls/maturities/paydowns of held to maturity securities

 

 

1,700

 

 

2,103

 

Proceeds from sales of restricted equity securities

 

 

866

 

 

465

 

Purchase of available for sale securities

 

 

(47,525)

 

 

(18,828)

 

Purchase of restricted equity securities

 

 

(784)

 

 

(105)

 

Proceeds from sale of other real estate owned

 

 

544

 

 

40

 

Net increase in loans

 

 

(29,947)

 

 

(25,423)

 

Principal recoveries of loans previously charged off

 

 

213

 

 

324

 

Purchase of premises and equipment, net

 

 

(270)

 

 

(1,717)

 

Purchase small business investment company fund investment

 

 

(525)

 

 

(210)

 

Proceeds from sale of loans

 

 

705

 

 

3,812

 

Net cash used in investing activities

 

 

(28,657)

 

 

(18,990)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

  

 

 

  

 

Net increase in deposits

 

 

51,233

 

 

28,136

 

Net decrease in federal funds purchased

 

 

(19,440)

 

 

(4,849)

 

Net decrease in short-term Federal Home Loan Bank borrowings

 

 

(10,000)

 

 

(5,000)

 

Payments on long-term Federal Home Loan Bank borrowings

 

 

(751)

 

 

(5,738)

 

Proceeds from issuance of common stock

 

 

455

 

 

107

 

Cash dividends paid

 

 

(1,332)

 

 

 —

 

Net cash provided by financing activities

 

 

20,165

 

 

12,656

 

 

 

 

 

 

 

 

 

Net (decrease) increase  in cash and cash equivalents

 

 

(1,437)

 

 

1,849

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

  

 

 

  

 

Beginning of the period

 

 

34,219

 

 

21,958

 

End of the period

 

$

32,782

 

$

23,807

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

  

 

 

  

 

Interest paid

 

$

7,469

 

$

5,294

 

Income taxes paid

 

 

1,285

 

 

1,169

 

Transfers of loans to other real estate owned

 

 

 392

 

 

396

 

Transfers of building premises and equipment to held for sale

 

 

 —

 

 

552

 

 

See accompanying notes to unaudited consolidated financial statements

 

 

7

COMMUNITY BANKERS TRUST CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Banking Activities and Significant Accounting Policies

Organization

Community Bankers Trust Corporation (the “Company”) is headquartered in Richmond, Virginia and is the holding company for Essex Bank (the “Bank”), a Virginia state bank with 24 full-service offices and two loan production offices.  

The Bank engages in a general commercial banking business and provides a wide range of financial services primarily to individuals, small businesses and larger commercial companies, including individual and commercial demand and time deposit accounts, commercial and industrial loans, consumer and small business loans, real estate and mortgage loans, investment services, on-line and mobile banking products, and cash management services.

Financial Statements

The consolidated statements presented include accounts of the Company and the Bank, its wholly-owned subsidiary. All material intercompany balances and transactions have been eliminated. The statements should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes to consolidated financial statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018. The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (GAAP) and to the general practices within the banking industry. The interim financial statements have not been audited; however, in the opinion of management, all adjustments, consisting of normal accruals, were made that are necessary to present fairly the balance sheet of the Company as of June 30, 2019, the statements of income and comprehensive income and changes in shareholders’ equity for the three and six months ended June 30, 2019, and the statements of cash flows for the six months ended June 30, 2019. Results for the six month period ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.

The financial information contained within the statements is, to a significant extent, financial information that is based on measures of the financial effects of transactions and events that have already occurred. A variety of factors could affect the ultimate value that is obtained when either earning income, recognizing an expense, recovering an asset or relieving a liability. The Company uses historical loss factors as one factor in determining the inherent loss that may be present in its loan portfolio. Actual losses could differ significantly from the historical factors that the Company uses. In addition, GAAP itself may change from one previously acceptable method to another method. Although the economics of the Company’s transactions would be the same, the timing of events that would impact its transactions could change.

In preparing these financial statements, the Company has evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued.

Certain reclassifications have been made to prior period balances to conform to the current year presentations. Such reclassifications had no impact on net income or shareholders’ equity.

8

Note 2. Securities

Amortized costs and fair values of securities available for sale and held to maturity at June 30, 2019 and December 31, 2018 were as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

 

 

 

 

Gross Unrealized

 

  

 

 

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

Securities Available for Sale

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Treasury issue

 

$

22,972

 

$

 —

 

$

(74)

 

$

22,898

U.S. Government agencies

 

 

24,375

 

 

67

 

 

(220)

 

 

24,222

State, county and municipal

 

 

94,175

 

 

3,132

 

 

(17)

 

 

97,290

Mortgage backed securities

 

 

50,025

 

 

795

 

 

(185)