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Community Bankers Trust Corp (ESXB) SEC Filing 8-K Material Event for the period ending Wednesday, October 27, 2021

Community Bankers Trust Corp

CIK: 1323648 Ticker: ESXB

 

Exhibit 99.1

 

Community Bankers Trust Corporation Reports Results for Third Quarter 2021

 

Net income was $6.5 million in the third quarter of 2021. Basic earnings per share were $0.29.

 

Conference Call on Friday, October 29, 2021, at 10:00 a.m. Eastern Time

 

Richmond, VA, October 29, 2021 - Community Bankers Trust Corporation (the “Company”) (NASDAQ: ESXB), the holding company for Essex Bank (the “Bank”), today reported results for the quarter ended September 30, 2021.

 

Financial HIGHLIGHTS

 

·Net income was $6.5 million for the quarter ended September 30, 2021 compared with net income of $5.4 million in the second quarter of 2021 and net income of $4.5 million in the third quarter of 2020.

·As a result of continued improvement in asset quality the allowance for loan losses reflected a reserve recovery of $1.250 million.

·Net interest income was $14.8 million for the third quarter of 2021, a linked quarter increase of $298,000, or 2.1%.

·Interest on deposits declined $85,000 on a linked quarter basis, and the associated cost of funds declined from 0.48% to 0.43%.

·Merger related expenses of $147,000 were incurred in the third quarter.

·Diluted earnings per share were $0.28 for the third quarter of 2021 compared with $0.24 for the second quarter of 2021 and $0.20 for the third quarter of 2020.

·Return on average assets (ROA) was 1.48% for the third quarter of 2021 compared with 1.26% for the second quarter of 2021 and 1.12% for the third quarter of 2020. For the first nine months, ROA was 1.44% in 2021 and 0.87% in 2020.

·Return on average equity (ROE) was 14.28% for the third quarter of 2021 compared with 12.30% for the second quarter of 2021 and 11.04% for the third quarter of 2020. For the first nine months, ROE was 14.00% in 2021 and 8.39% in 2020.

 

operating Highlights

 

·Loans, excluding purchased credit impaired (PCI) loans, grew $39.1 million, or 3.3%, during the third quarter of 2021. Loans grew $53.3 million, or 4.5%, year over year.

·Nonperforming assets were $4.0 million at September 30, 2021, $4.6 million lower than one year earlier. The ratio of nonperforming assets to loans and other real estate was 0.33% at September 30, 2021 compared with 0.75% at December 31, 2020 and 0.73% one year earlier.

·Deposits grew $10.0 million, or 0.7%, during the third quarter of 2021, and grew $129.5 million, or 9.5%, year over year.

·Noninterest bearing deposits grew $64.0 million, or 22.7%, year over year.

·Net interest margin was 3.52% in the third quarter of 2021 compared with 3.58% in the second quarter of 2021 and 3.35% in the third quarter of 2020. The net interest margin was 3.58% for the first nine months of 2021 compared with 3.48% for the same period in 2020.

·PPP loan balances, net of fees, decreased $19.2 million during the third quarter of 2021 and were $32.8 million at September 30, 2021 compared with $49.3 million at December 31, 2020 and $85.1 million at September 30, 2020.

·Total securities, $402.9 million at September 30, 2021, increased $53.3 million during the third quarter and cash and equivalents declined $74.6 million as excess liquidity was invested into higher yielding assets.

 

On June 2, 2021, the Company entered into a merger agreement with United Bankshares, Inc. (“United”), the parent company of United Bank.  Under the merger agreement, United will acquire 100% of the outstanding shares of the Company’s common stock in exchange for shares of United’s common stock.  The exchange ratio will be fixed at 0.3173 of United’s shares for each share of the Company.  The merger is expected to close in the fourth quarter of 2021, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by the Company’s shareholders.  Upon closing, the Company will merge into United, and Essex Bank will merge into United Bank, with United and United Bank being the surviving entities.

 

MANAGEMENT COMMENTS

 

Rex L. Smith, III, President and Chief Executive Officer, stated, “The results of the quarter and the fundamentals behind the results are impressive. Loan growth was better than expected for this time of year at $39.1 million, and the pipeline remains strong. Net interest income continued to increase year over year as noninterest bearing deposits grew 22.7%. Additionally, overall asset quality is exceptional as nonperforming assets are at the lowest level in 10 years.”

 

Smith added, “We are excited about our pending merger with United Bank, which is on track to close in the fourth quarter this year. Becoming a part of the largest regional bank headquartered in Virginia will add enhanced products and delivery services to help us grow stronger in our markets and more value than previously possible to our customers and shareholders.”

 

 

 

 

RESULTS OF OPERATIONS

 

Overview

 

Linked Quarter Basis

 

Net income was $6.5 million for the third quarter of 2021 compared with net income of $5.4 million in the second quarter of 2021. Earnings per share were $0.29 basic and $0.28 fully diluted for the third quarter of 2021 and $0.24 basic and fully diluted for the second quarter of 2021. Provision for loan losses reflected a credit of $1.250 million for the third quarter of 2021 compared with no provision in the second quarter of 2021. Continued improvement in credit quality was the driver behind the recapture in the third quarter of previous provision for loan losses. There was a more stable economic climate in the first nine months of 2021 compared with each quarter in 2020. Net interest income increased by $298,000, or 2.1%, in the third quarter compared with the second quarter of 2021. Net interest income was positively affected by a continuation of decreasing costs in interest expense, which declined $81,000 on a linked quarter basis. Noninterest income decreased $80,000 on a linked quarter basis while noninterest expenses decreased $82,000. Income tax expense increased $428,000 in the third quarter of 2021 compared with the prior quarter. Details of the linked quarter financial performance of the Company are presented below.

 

Year-over-Year Third Quarter

 

Net income in the third quarter of 2021 increased $2.0 million when compared to the same period in 2020. Net income was $6.5 million in the third quarter of 2021, with earnings per share of $0.29 basic and $0.28 fully diluted. Net income for the third quarter of 2020 was $4.5 million, with earnings per share of $0.20 basic and fully diluted. There was an increase of $2.1 million in net interest income, primarily from both a decline in interest expense of $1.4 million in the third quarter of 2021 compared with the same period one year earlier and an increase in interest income of $732,000 over the same comparison period. Provision for loan losses decreased $1.250 million year over year as the Company recaptured in the third quarter of 2021 previously recorded provision. Offsetting these increases to net income were an increase of $584,000 in noninterest expenses and a decrease of $91,000 in noninterest income. There was also an increase of $625,000 in income tax expense year-over-year. Details of the year-over-year financial performance of the Company are presented below.

 

Year-over-Year Nine Months

 

Net income of $18.6 million for the first nine months of 2021 reflects an increase of $8.5 million, or 84.5%, over net income of $10.1 million for the same period in 2020. Provision for loan losses reflects a reserve recovery of $2.650 million for the first nine months of 2021 compared with a provision of $4.2 million during the early stage of the COVID-19 pandemic for the first nine months of 2020. Interest expense declined $5.1 million and was $4.8 million for the first nine months of 2021 compared with $9.9 million for the first nine months of 2020. Smaller increases were in interest and dividend income, which increased $959,000, and in noninterest income, which increased $47,000 in the first nine months of 2021 compared with the same period in 2020. Offsetting these increases to net income were an increase of $2.1 million in noninterest expenses, which were $27.1 million for the first nine months of 2021, and $2.4 million greater expense in income taxes, which were $4.8 million for the first nine months of 2021.

 

2 

 

 

The following table presents summary income statements for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020 and the nine months ended September 30, 2021 and September 30, 2020.

 

SUMMARY INCOME STATEMENT

(Unaudited)

(Dollars in thousands)

   For the three months ended   For the nine months ended 
   30-Sep-21   30-Jun-21   30-Sep-20   30-Sep-21   30-Sep-20 
Interest income  $16,281   $16,064   $15,549   $48,205   $47,246 
Interest expense   1,486    1,567    2,836    4,835    9,935 
Net interest income   14,795    14,497    12,713    43,370    37,311 
(Recovery of) provision for loan losses   (1,250)   -    -    (2,650)   4,200 
Net interest income after (recovery of ) provision for loan losses   16,045    14,497    12,713    46,020    33,111 
Noninterest income   1,381    1,461    1,472    4,470    4,423 
Noninterest expense   9,110    9,192    8,526    27,057    24,993 
Income before income taxes   8,316    6,766    5,659    23,433    12,541 
Income tax expense   1,768    1,340    1,143    4,816    2,450 
Net income  $6,548   $5,426   $4,516   $18,617   $10,091 
EPS Basic  $0.29   $0.24   $0.20   $0.83   $0.45 
EPS Diluted  $0.28   $0.24   $0.20   $0.82   $0.45 
Fully Diluted share count   23,002    22,733    22,503    22,717    22,534 
Return on average assets, annualized   1.48%   1.26%   1.12%   1.44%   0.87%
Return on average equity, annualized   14.28%   12.30%   11.04%   14.00%   8.39%

 

Net Interest Income

 

Linked Quarter Basis

 

Net interest income was $14.8 million for the quarter ended September 30, 2021. This was a linked quarter increase of $298,000, or 2.1%. Interest and dividend income on a linked quarter basis increased $217,000, or 1.4%, to $16.3 million for the third quarter of 2021. Interest income with respect to loans, excluding PCI loans, increased $245,000, or 1.9%, during the third quarter of 2021 when compared with the second quarter of 2021. Interest income on PCI loans decreased $76,000 on a linked quarter basis as the average balance declined $3.0 million. Excess liquidity was invested in the third quarter, and the average balance of taxable and tax-exempt securities increased by $63.0 million, or 19.5%, over the prior quarter. This resulted in a linked quarter increase of $43,000 in interest and dividends on securities.

 

The yield on loans for the third quarter of 2021 was 4.43% compared with 4.39% in the second quarter of 2021. The yield on all loans for the third quarter of 2021 was 4.60% and 4.58% for the second quarter of 2021. Interest income on securities was $2.1 million in the third quarter of 2021 compared with $2.0 million in the second quarter of 2021. Interest bearing bank balances income was $59,000 in the third quarter of 2021 compared with $54,000 in the second quarter of 2021.

 

Interest income on securities on a tax-equivalent basis equaled $2.2 million for the third quarter of 2021 and $2.1 million for the second quarter of 2021. The tax-equivalent yield on the securities portfolio was 2.25% in the third quarter of 2021 compared with 2.63% in the second quarter of 2021. As a result of these changes in rate and volume, the yield on earning assets decreased from 3.97% in the second quarter of 2021 to 3.87% in the third quarter of 2021.

 

Interest expense of $1.5 million in the third quarter of 2021 was a decrease of $81,000, or 5.2%, on a linked quarter basis. Interest on deposits decreased $85,000, or 6.3%. The cost of interest bearing deposits decreased from 0.48% in the second quarter of 2021 to 0.43% in the third quarter of 2021. The Company’s cost of interest bearing liabilities of 0.48% in the third quarter of 2021 was a decrease of four basis points from the prior quarter when the cost of interest bearing liabilities was 0.52%.

 

With the changes in net interest income noted above, the tax-equivalent net interest margin decreased on a linked quarter basis and was 3.52% in the third quarter of 2021 compared with 3.58% in the second quarter of 2021. The interest spread was 3.39% for the current quarter compared with 3.45% in the prior quarter. The Company also examined the net interest margin without the effects of PPP net fees, interest income and average balances. Excluding these PPP related items from the net interest margin calculation would have resulted in a margin of 3.39% in the third quarter of 2021 compared with the actual margin of 3.52%. The same exclusion of PPP related items would have resulted in a margin of 3.54% in the second quarter of 2021 compared with the actual margin of 3.58%. The yield on the loan portfolio would have been 4.28% in the third quarter of 2021 when excluding the PPP related items versus the actual yield of 4.43%. The yield on the loan portfolio would have been 4.38% in the second quarter of 2021 when excluding the PPP related items versus the actual yield of 4.39%. The yield on earning assets would have been 3.75% for the third quarter of 2021 without the PPP related items as opposed to the actual yield of 3.87%. For the second quarter of 2021, the yield on earning assets would have been 3.94% without the PPP related items compared to the actual yield of 3.97%.

 

3 

 

 

Year-over-Year Third Quarter

 

Net interest income increased $2.1 million, or 16.4%, from the third quarter of 2020 to the third quarter of 2021. Net interest income was $14.8 million in the third quarter of 2021 compared with $12.7 million for the same period in 2020. Interest and dividend income increased $732,000, or 4.7%, over this time period. In the third quarter of 2021, $785,000 in PPP net origination fees were recognized as income versus $331,000 in the same period of 2020. Interest and fees on loans were $13.4 million in the third quarter of 2021, an increase of $681,000, or 5.3%, over the same period in 2020. Interest and fees on PCI loans decreased by $254,000 and were $708,000 in the third quarter of 2021. Securities income was $2.1 million in the third quarter of 2021, an increase of $367,000 over the same period in 2020. Income on interest on deposits in other banks decreased by $62,000 year over year.

 

The average balance of the loan portfolio, excluding PCI loans, increased by $34.3 million year over year and averaged $1.204 billion for the third quarter of 2021. The average balance of the PCI portfolio declined $11.7 million during the year-over-year comparison period. The average balance of securities increased by $136.9 million in the third quarter of 2021 compared with the same period one year earlier. The average balance of total earning assets increased $162.2 million, or 10.7%, from the third quarter of 2020 to the third quarter of 2021. The yield on earning assets decreased from 4.09% in the third quarter of 2020 to 3.87% in the third quarter of 2021. The change in yield on earning assets was the culmination of the decrease in the yield on securities, from 2.89% in the third quarter of 2020 to 2.25% in the third quarter of 2021 and in the yield on interest bearing bank balances, from 0.68% to 0.32% year over year. The yield on total loans increased year over year, from 4.55% in the third quarter of 2020, to 4.60% for the same period in 2021.

 

Interest expense decreased $1.4 million, or 47.6%, when comparing the third quarter of 2021 and the third quarter of 2020. Interest expense on deposits decreased $1.4 million, or 51.7%, as the cost declined from 0.96% in the third quarter of 2020 to 0.43% for the same period in 2021. The average balance of interest bearing deposits increased $74.5 million, or 6.9%. This growth was from non-maturity deposit sources. First, there was an increase of $82.8 million, or 41.2%, in the average balance of interest bearing checking accounts, which averaged $283.8 million in the third quarter of 2021. Additionally, there was an increase of $63.6 million in the average balance of savings and money market accounts from the third quarter of 2020 to the same period in 2021. Offsetting these increases was a decrease of $71.9 million in the average balance of time deposits, to $540.9 million for the third quarter of 2021. FHLB and other borrowings costs were stable over the time frame and were 1.22% in the third quarter of 2021 compared with 1.19% for the same period in 2020. All of the above contributed to the reduction of interest expense for interest bearing liabilities by $1.4 million despite an increase of $72.4 million in the average amount outstanding. Also noteworthy is that, although not an interest bearing category, a sizeable amount of funding was generated in the third quarter of 2021 by a year-over-year average balance increase of $63.3 million in noninterest bearing deposits. The amount of liquidity in the banking system, along with lower interest rates and a shift in deposit balances, decreased the cost of interest bearing liabilities from 0.97% in the third quarter of 2020 to 0.48% in the third quarter of 2021.

 

The tax-equivalent net interest margin increased 17 basis points, from 3.35% in the third quarter of 2020 to 3.52% in the third quarter of 2021. Likewise, the interest spread increased from 3.12% to 3.39% over the same time period.  The increase in the margin was precipitated by a decrease of 22 basis points in the yield on earning assets compared with a greater decline of 49 basis points in the cost of interest bearing liabilities applied against growth of $162.2 million, or 10.7%, in earning assets. As noted in the linked quarter discussion above, without the effects of PPP related items, the net interest margin would have been 3.39% in the third quarter of 2021. Without the effects of PPP related items, the net interest margin would have been 3.39% in the third quarter of 2020.

 

Year-over-Year Nine Months

 

Net interest income was $43.4 million for the nine months of 2021. This is an increase of $6.1 million, or 16.2%, from net interest income of $37.3 million for the first nine months of 2020. Interest and dividend income increased by $959,000 over this time frame. Interest and dividend income was impacted by volume increases offset by a decline in yield. First, there was an increase of $929,000, or 2.4%, in interest and fees on loans, which increased as a result of growth of $73.0 million, or 6.5%, in the average balance of loans in 2021 over 2020. The yield on loans declined from 4.59% for the first nine months of 2020 to 4.43% for the same period in 2021. Interest and fees on PCI loans declined by $773,000, or 24.8%. The yield on the PCI portfolio was 15.54% for the first nine months of 2021 compared with 13.71% for the first nine months of 2020. Interest and dividends on securities increased by $861,000 in the first nine months of 2021 compared with the same period in 2020. The average balance of the securities portfolio increased $91.0 million, or 37.9%, and the yield declined from 2.95% for the first nine months of 2020 to 2.48% for the same period in 2021. The yield on earning assets was 3.98% for the first nine months of 2021, a decline of 40 basis points from 4.38% in the first nine months of 2020. The yield on total loans, which includes PCI loans and PPP loans, declined from 4.83% for the first nine months of 2020 compared with 4.62% for the same period in 2021.

 

4 

 

 

Interest expense of $4.8 million for the first nine months of 2021 was a decrease of $5.1 million, or 51.3%, from interest expense of $9.9 million for the first nine months of 2020. The cost of interest bearing liabilities decreased over this time frame from 1.17% for the first nine months of 2020 to 0.54% for the same period in 2021. Interest on deposits decreased $5.0 million due to a decline in the rate paid from 1.16% for the first nine months of 2020 to 0.50% for the first nine months of 2021. The average balance of interest bearing liabilities increased over this time frame by $67.3 million, or 6.0%. Short term borrowing expense decreased by $24,000, and the cost of FHLB and other borrowings decreased by $35,000, or 5.0%, as the rate paid decreased from 1.30% for the first nine months of 2020 to 1.23% for the first nine months of 2021.

 

The changes noted to interest income and interest expense led to an increase in the net interest margin from 3.48% for the first nine months of 2020 to 3.58% for the same period in 2021. The interest spread also increased over this time frame from 3.21% in 2020 to 3.44% in 2021. Excluding PPP related items from the net interest margin calculation would have resulted in a margin of 3.50% for the first nine months of 2021 compared with the actual margin of 3.58%. Excluding PPP related items from the net interest margin calculation for the first nine months of 2020 would have resulted in a margin of 3.49% for the first nine months of 2020 compared with the actual margin of 3.48%. The yield on the loan portfolio for the first nine months of 2021 would have been 4.36% excluding PPP related items versus the actual yield of 4.43%. The yield on the loan portfolio for the first nine months of 2020 would have been 4.68% excluding PPP related items versus the actual yield of 4.59%. The yield on earning assets for the first nine months of 2021 would have been 3.91% without PPP related items as opposed to the actual yield of 3.98%. The yield on earning assets for the first nine months of 2020 would have been 4.44% without PPP related items as opposed to the actual yield of 4.38%.

 

The following table compares the Company's net interest margin, on a tax-equivalent basis, for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020 and the nine months ended September 30 2021 and September 30, 2020.

 

NET INTEREST MARGIN

(Unaudited)

(Dollars in thousands)

 

   For the three months ended 
   30-Sep-21   30-Jun-21   30-Sep-20 
Average interest earning assets  $1,679,564   $1,633,672   $1,517,374 
Interest income  $16,281   $16,064   $15,549 
Interest income - tax-equivalent  $16,374   $16,153   $15,640 
Yield on interest earning assets   3.87%   3.97%   4.09%
Average interest bearing liabilities  $1,228,482   $1,199,036   $1,156,089 
Interest expense  $1,486   $1,567   $2,836 
Cost of interest bearing liabilities   0.48%   0.52%   0.97%
Net interest income  $14,795   $14,497   $12,713 
Net interest income - tax-equivalent  $14,888   $14,586   $12,804 
Interest spread   3.39%   3.45%   3.12%
Net interest margin   3.52%   3.58%   3.35%

 

   For the nine months ended 
   30-Sep-21   30-Sep-20 
Average interest earning assets  $1,627,852   $1,443,925 
Interest income  $48,205   $47,246 
Interest income - tax-equivalent  $48,474   $47,521 
Yield on interest earning assets   3.98%   4.38%
Average interest bearing liabilities  $1,196,940   $1,129,625 
Interest expense  $4,835   $9,935 
Cost of interest bearing liabilities   0.54%   1.17%
Net interest income  $43,370   $37,311 
Net interest income - tax-equivalent  $43,639   $37,586 
Interest spread   3.44%   3.21%
Net interest margin   3.58%   3.48%

 

5 

 

 

 

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 recovery of $1.250 million of previously recorded provision for loan losses in the third quarter of 2021 compared with no provision in either of the second quarter of 2021 or the third quarter of 2020. The recovery of $2.650 million of provision for loan losses for the first nine months of 2021 compares with a provision of $4.2 million for the first nine months of 2020.

 

The recovery of provision recorded in the first and third quarters of 2021 was due to continued improvement in the quality of the loan portfolio and an overall improvement in the risks associated with the potential economic impact of the COVID-19 pandemic, which continued through the third quarter of 2021. Beginning in the first quarter of 2020, management performs a review of each loan within the portfolio to identify, and monitor on a going forward basis, those borrowers that management believed to be possibly impacted by the COVID affected economy. Loans identified with increased risk are aggregated by loan type. During the first and second quarter of 2020, this analysis indicated a risk grade migration in a number of loan categories that led to a heightened risk level in the loan portfolio. The impact of the loans’ risk grade migration was applied to the allowance for loan loss calculation, which led to a provision for loan losses of $4.2 million for the first half of 2020. The Company determined that no provision was necessary for the third or fourth quarters of 2020 after a similar analysis and review process. The loan portfolio has exhibited a trend over the last year of lower nonaccrual loans, lower other real estate loans, very low charge-offs and a gradual improvement in risk grades as previously COVID deferred loan relationships return to their original payment terms.

 

With respect to the PCI portfolio, no provision was recorded during the first nine months of 2021 or 2020 due to the stable nature of the portfolio’s performance. Additional discussion of loan quality is presented below.

 

Noninterest Income

 

Linked Quarter Basis

 

Noninterest income was $1.4 million for the third quarter of 2021, an $80,000 decrease compared with the second quarter of 2021. Other noninterest income decreased $138,000 on a linked quarter basis and was $297,000 for the third quarter of 2021. Gain (loss) on securities transactions, net improved by $21,000 and were net losses of $7,000 in the third quarter of 2021 compared with net losses of $28,000 in the second quarter of 2021. Service charges and fees of $671,000 in the third quarter of 2021 increased $20,000 on a linked quarter basis. Mortgage loan income increased $20,000 on a linked quarter basis and was $255,000 in the third quarter of 2021 compared with $235,000 in the prior quarter. Income on bank owned life insurance was $165,000 in the third quarter of 2021 and $168,000 in the second quarter of 2021.

 

Year-over-Year Third Quarter

 

Noninterest income of $1.4 million in the third quarter of 2021 was a decrease of $91,000, or 6.2%, compared with the third quarter of 2020. Other noninterest income declined by $85,000 year over year and was $297,000 in the third quarter of 2021. Gains (loss) on securities transactions decreased $85,000 year over year as securities losses of $7,000 were recognized in the third quarter of 2021 compared with gains of $78,000 in the third quarter of 2020. Offsetting these decreases to noninterest income was an increase of $58,000 in service charges and fees, which were $671,000 in the third quarter of 2021. Additionally, mortgage loan income of $255,000 in the third quarter of 2021 was an increase of $27,000 year over year.

 

Year-over-Year Nine Months

 

Noninterest income was $4.5 million for the first nine months of 2021, an increase of $47,000, or 1.1%, over noninterest income of $4.4 million for the first nine months of 2020. Other noninterest income was $1.2 million for the first nine months of 2021, an increase of $205,000 over the same period in 2020. Service charges and fees of $2.0 million for the first nine months of 2021 was an increase of $184,000 over the same period in 2020. Gain (loss) on securities transactions, net exhibited the greatest decline, $300,000, and reflected a net loss of $19,000 recognized for the first nine months of 2021 compared with gains of $281,000 for the same period in 2020. Income on bank owned life insurance was $499,000 for the first nine months of 2021, a decrease of $19,000 from the same period in 2020. Mortgage loan income was $810,000 for the first nine months of 2021, a decrease of $12,000 over the same period in 2020.

 

6

 

 

Noninterest Expenses

 

Linked Quarter Basis

 

Noninterest expenses totaled $9.1 million for the third quarter of 2021, as compared with $9.2 million for the second quarter of 2021, a decrease of $82,000, or 0.9%. Other operating expenses decreased $546,000, from $2.3 million in the second quarter of 2021 to $1.8 million in the third quarter of 2021. The decrease was partially due to $570,000 in merger related expenses from legal, professional and director fees during the second quarter of 2021. Also, there was an assessment of the fair value of a low income housing tax credit investment that resulted in a downward adjustment of $154,000 in the second quarter. Data processing fees of $673,000 in the third quarter of 2021 was a decrease of $68,000 over the linked quarter. Equipment expenses were $275,000 in the third quarter of 2021 and decreased $42,000 on a linked quarter basis. Offsetting these decreases to noninterest expenses were a number of categories that increased on a linked quarter basis. Other real estate expenses, net, increased $436,000 on a linked quarter basis and were $5,000 for the third quarter of 2021. Other real estate expenses, net reflected a credit of $431,000 in the second quarter of 2021 and reflected gains on the disposition of other real estate owned in the second quarter of 2021. Salaries and employee expenses of $5.4 million in the third quarter of 2021 was an increase of $56,000, or 1.0%, on a linked quarter basis. FDIC assessment of $161,000 in the third quarter of 2021 was a linked quarter increase of $53,000, as there were retroactive rate adjustments by the FDIC in the second quarter of 2021. Occupancy expenses increased by $29,000, from $761,000 in the second quarter of 2021 to $790,000 in the third quarter of 2021.

 

Year-over-Year Third Quarter

 

Noninterest expenses of $9.1 million for the third quarter of 2021 was an increase of $584,000, or 6.8%, from noninterest expenses of $8.5 million for the third quarter of 2020. The largest component of the increase was an increase in other operating expenses, which increased by $375,000, from $1.4 million in the third quarter of 2020, to $1.8 million for the same period in 2021. Salaries and employee benefits of $5.4 million in the third quarter of 2021 increased $367,000, or 7.3%, over the third quarter of 2020. This increase is comprised mainly of $146,000 in merger related expenses incurred during the third quarter of 2021, combined with increases of $71,000 in professional fees, $459,000 in marketing expense and $50,000 in telephone and data expenses. Data processing fees of $673,000 in the third quarter of 2021 reflected an increase of $17,000 year over year. Offsetting these increases was a year-over-year decline of $82,000 in other real estate expenses, net, which were $5,000 in the third quarter of 2021. Equipment expenses were $275,000 in the third quarter of 2021 compared with $330,000 for the same period in 2020, a decrease of $55,000, or 16.7%. Occupancy expenses, $790,000 in the third quarter of 2021, declined $25,000 from the same period in 2020. FDIC assessment, which was $161,000 in the third quarter of 2021, declined by $13,000 year over year.

 

Year-over-Year Nine Months

 

Noninterest expenses were $27.1 million for the nine months ended September 30, 2021, an increase of $2.1 million, or 8.3%, compared with the same period in 2020. Other operating expenses were $5.7 million and increased by $1.4 million, or 31.7%, in the first nine months of 2021 compared with the same period in 2020. Part of the increase is attributed to $717,000 in merger related expenses, $154,000 for the low income housing tax credit investment adjustment, a $201,000 increase in legal fees, and a $114,000 increase in professional fees incurred during the second quarter of 2021. Salaries and employee benefits of $16.0 million were an increase of $1.2 million, or 7.8%, for the first nine months of 2021 over the same period in 2020. Data processing fees, which were $2.0 million, increased by $201,000, or 11.0%, for the first nine months of 2021 over the same period in 2020. Other real estate expenses, net, decreased $504,000 as a result of gains recognized in the second quarter of 2021 on the disposition of other real estate owned. Also offsetting these increases were a decline of $167,000 in equipment expenses, which was $880,000 for the first nine months of 2021, and a decrease of $33,000 in occupancy expenses, which was $2.4 million for the first nine months of 2021.

 

The following table compares the Company's other operating expenses included in noninterest expenses for the three months ended September 30, 2021, June 30, 2021, December 31, 2020 and September 30, 2020.

 

OTHER OPERATING EXPENSES

(Unaudited)

(Dollars in thousands)  

 

   For the three months ended 
   30-Sep-21   30-Jun-21   31-Dec-20   30-Sep-20 
Bank franchise tax  $257   $257   $237   $237 
Stationery, printing and supplies   170    152    138    167 
Marketing expense   138    140    89    79 
Credit expense   73    92    114    71 
Outside vendor fees   220    110    146    177 
Other expenses   940    1,593    726    692 
Total other operating expenses  $1,798   $2,344   $1,450   $1,423 

 

Income Taxes

 

Income tax expense was $1.8 million for the third quarter of 2021 compared with income tax expense of $1.3 million and $1.1 million for the second quarter of 2021 and the third quarter of 2020, respectively. The effective tax rate was 21.3% for the third quarter of 2021, 19.8% for the second quarter of 2021 and 20.2% for the third quarter of 2020.

 

Income tax expense was $4.8 million for the first nine months of 2021 compared with $2.5 million for the same period in 2020. The effective tax rate was 20.6% for the first nine months of 2021 compared with an effective tax rate of 19.5% for the first nine months of 2020.

 

7

 

 

FINANCIAL CONDITION

 

Total assets were $1.771 billion at September 30, 2021 and increased $126.5 million, or 7.7%, when compared with December 31, 2020. Total loans, excluding PCI loans, were $1.231 billion at September 30, 2021, increasing $48.6 million, or 4.1%, from year end 2020. Total PCI loans were $15.7 million at September 30, 2021 versus $24.0 million at December 31, 2020.

 

At September 30, 2021, there were 13 loans with an aggregate outstanding balance of $15.8 million under COVID-19 related payment relief. Two PCI loans comprised $1.3 million of this total.

 

Loans, net of fees that the Bank originated under the PPP were $32.8 million at September 30, 2021, $52.0 million at June 30, 2021, $67.7 million at March 31, 2021, $49.3 million at December 31, 2020 and $85.1 million at September 30, 2020. All of these balances have been included in commercial loans. As a result of the economic conditions that existed during 2020 and the first nine months of 2021, commercial loans balances, excluding PPP loans, have been stagnant and declined by $2.1 million since December 31, 2020 and $1.7 million since September 30, 2020. Commercial real estate loans, the largest category of loans at $542.4 million, or 44.1% of gross loans outstanding at September 30, 2021, increased $67.6 million, or 14.2%, since December 31, 2020. Construction and land development loans were $200.9 million at September 30, 2021 and represent 16.3% of the loan portfolio. This category has grown $18.6 million during the first nine months of 2021. Residential 1 – 4 family loans declined during the first nine of 2021 by $19.1 million, or 9.7%, and ended the period at $178.1 million, or 14.5% of the portfolio.

 

The following table shows the composition of the Company's loan portfolio, excluding PCI loans, at September 30, 2021, June 30, 2021, December 31, 2020 and September 30, 2020.

 

LOANS (excluding PCI loans)

(Unaudited)

(Dollars in thousands)

 

    30-Sep-21    30-Jun-21   31-Dec-20   30-Sep-20
    Amount    % of Loans    Amount    % of Loans    Amount    % of Loans    Amount    % of Loans 
Mortgage loans on real estate:                                        
Residential 1-4 family  $178,099    14.47%  $182,929    15.35%  $197,228    16.68%  $204,366    17.35%
Commercial   542,418    44.06    506,951    42.53    474,856    40.16    452,677    38.44 
Construction and land development   200,878    16.32    180,215    15.12    182,277    15.42    159,766    13.57 
Second mortgages   7,078    0.57    6,893    0.58    6,360    0.54    6,488    0.55 
Multifamily   80,245    6.52    72,918    6.12    78,158    6.61    77,787    6.60 
Agriculture   7,748    0.63    7,841    0.66    6,662    0.56    7,138    0.61 
Total real estate loans   1,016,466    82.57    957,747    80.36    945,541    79.97    908,222    77.12 
Commercial loans   206,801    16.80    224,437    18.83    225,386    19.06    257,362    21.85 
Consumer installment loans   6,841    0.56    8,452    0.71    9,996    0.85    10,606    0.90 
All other loans   873    0.07    1,205    0.10    1,439    0.12    1,519    0.13 
Gross loans   1,230,981    100.00%   1,191,841    100.00%   1,182,362    100.00%   1,177,709    100.00%
Allowance for loan losses   (9,929)        (11,006)        (12,340)        (12,328)     
Loans, net of unearned income  $1,221,052        $1,180,835        $1,170,022        $1,165,381      

 

The Company’s securities portfolio, excluding restricted equity securities, was $394.9 million at September 30, 2021 and increased $102.4 million, or 35.0%, during the first nine months of 2021 and $138.3 million, or 53.8%, since September 30, 2020. U.S. Treasury issues decreased by $3.6 million during the first nine months of 2021. U.S. Government agencies increased $27.0 million during the first nine months of 2021 and were $52.8 million at September 30, 2021. State, county and municipal securities, the largest investment category totaling $212.3 million at September 30, 2021, increased by $65.4 million during the first nine months of 2021. Asset backed securities, consisting of student loan pools 97% guaranteed by the U.S. Government, increased $9.3 million during the first three quarters of 2021 and were $46.7 million at September 30, 2021. Mortgage backed securities were $38.9 million at September 30, 2021 and grew by $6.7 million during 2021. Corporate securities were $24.2 million at September 30, 2021.

 

The Company had cash and cash equivalents of $49.1 million at September 30, 2021 compared with $63.2 million at year end 2020. This category grew to $123.6 million at June 30, 2021 but decreased during the third quarter of 2021 as funds were invested into higher earning loans and securities. Interest bearing bank balances were $23.6 million at September 30, 2021 compared with $45.1 million at December 31, 2021 and peaked at $102.0 million at June 30, 2021.

 

8

 

 

The following table shows the composition of the Company's securities portfolio, excluding equity securities, restricted, at September 30, 2021, December 31, 2020 and September 30, 2020.

 

SECURITIES PORTFOLIO

(Unaudited)

(Dollars in thousands)

 

   30-Sep-21   31-Dec-20   30-Sep-20 
    Amortized
Cost
    Fair  
Value
    Amortized
Cost
    Fair 
  Value
    Amortized
Cost
    Fair 
  Value
 
Securities Available for Sale                              
                               
U.S. Treasury issue  $19,896    19,880   $23,500   $23,499   $12,500   $12,500 
U.S. Government agencies   52,948    52,808    25,880    25,853    19,942    19,745 
State, county, and municipal   187,999    193,291    118,612    125,720    109,976    116,534 
Mortgage backed securities   37,885    38,908    30,434    32,189    28,086    29,951 
Asset backed securities   45,951    46,729    36,841    37,488    28,748    28,986 
Corporate   23,749    24,229    26,136    26,598    25,454    25,937 
Total securities available for sale  $368,428    375,845   $261,403   $271,347   $224,706   $233,653 

 

   30-Sep-21   31-Dec-20   30-Sep-20 
   Amortized
Cost
   Fair
Value
   Amortized
Cost
   Fair
Value
   Amortized
Cost
   Fair
Value
 
Securities Held to Maturity                              
                               
State, county, and municipal  $19,052   $19,844   $21,176   $22,257   $23,026   $24,118 
                               
Total securities held to maturity  $19,052    19,844   $21,176    22,257   $23,026    24,118 

 

Interest bearing deposits at September 30, 2021 were $1.153 billion, an increase of $53.3 million, or 4.8%, from December 31, 2020. Interest bearing checking accounts of $276.2 million grew by $36.6 million, or 15.3%, during the first nine months of 2021 and $75.1 million, or 37.3%, year over year. The balance of interest bearing checking accounts decreased by $8.8 million during the third quarter of 2021. Money market deposit accounts were $184.8 million at September 30, 2021 and grew $30.2 million, or 19.6%, during the first nine months of 2021 and $26.2 million, or 16.5%, year over year. Savings accounts totaled $151.1 million at September 30, 2021 and grew $9.0 million, or 6.3%, during the third quarter of 2021 and $26.7 million, or 21.5%, during the first nine months of 2021. Strong growth in these non-maturity categories for the year has allowed the Bank to react to lower interest rates through proactive repricing in certificates of deposit, the highest costing deposit category. As a result, time deposits less than or equal to $250,000 decreased by $27.8 million, or 6.1%, in the first nine months of 2021 and were $425.1 million at September 30, 2021.Year over year, time deposits less than or equal to $250,000 declined $43.5 million, or 9.3%. Time deposits over $250,000 declined $12.5 million in the first nine months of 2021 and were $115.9 million at September 30, 2021. Year over year, time deposits over $250,000 declined by $25.5 million, or 18.0%. Time deposit balances combined were 46.9% of interest bearing deposits at September 30, 2021 and 36.1% of all deposit balances. This is a decline from 52.9% of interest bearing balances and 41.6% of all deposit balances at December 31, 2020. The growth in interest bearing checking accounts, money market accounts and savings accounts, as well as in noninterest bearing checking accounts, was $140.4 million during the first nine months of 2021. A portion of this growth was associated with the PPP loans originated during 2020 and 2021 and stimulus checks issued under the CARES Act, as well as previously postponed business activity that resulted from the COVID-19 stay-at-home orders.

 

9

 

 

 

The following table compares the mix of interest bearing deposits at September 30, 2021, June 30, 2021, December 31, 2020 and September 30, 2020.

 

INTEREST BEARING DEPOSITS                
(Unaudited)                
(Dollars in thousands)                
   30-Sep-21   30-Jun-21   31-Dec-20   30-Sep-20 
Interest Bearing Checking Accounts  $276,222   $285,044   $239,628   $201,121 
                     
MMDA   184,750    182,702    154,503    158,569 
Savings   151,090    142,110    124,384    118,007 
Time deposits less than or equal to $250,000   425,072    425,837    452,885    468,549 
Time deposits over $250,000   115,947    113,423    128,400    141,417 
Total interest bearing deposits  $1,153,081   $1,149,116   $1,099,800   $1,087,663 

 

FHLB borrowings were $67.3 million at September 30, 2021 compared with $57.8 million at December 31, 2020 and $68.0 million at September 30, 2020. The stable level of FHLB borrowings during 2020 and into 2021 has been due to the FHLB swiftly responding to the March 16, 2020 rate cut of 1.50% to the discount rate by repricing advances downward to ensure low cost liquidity for the banking system. As a result, the Bank has found this level of borrowing to be a stable source of low cost funding. The average rate paid on FHLB borrowings was 1.23% during the first nine months of 2021. There were Federal funds purchased of $2.7 million at September 30, 2021 compared with no Federal funds purchased at December 31, 2020.

 

Shareholders’ equity was $184.3 million at September 30, 2021, or 10.4% of total assets, compared with $169.7 million, or 10.3% of total assets, at December 31, 2020.

 

Asset Quality – excluding PCI loans

 

Nonperforming loans were $3.8 million at September 30, 2021, a decrease of $735,000 from December 31, 2020. Nonperforming loans declined $444,000 year over year. Total non-performing assets totaled $4.0 million at September 30, 2021 compared with $8.9 million at December 31, 2020. Non-performing assets declined $4.6 million, or 53.4%, year over year. On April 7, 2021, the Company sold an item included in other real estate owned at March 31, 2021 in the amount of $3.8 million, and this sale was the primary reason for the decline in non-performing assets. There were net recoveries of $239,000 in the first nine months of 2021.

 

The allowance for loan losses equaled 263.4% of nonaccrual loans at September 30, 2021 compared with 276.7% at December 31, 2020. The ratio of nonperforming assets to loans and other real estate owned (OREO) was 0.33% at September 30, 2021 compared with 0.75% at December 31, 2020.

 

The allowance for loan losses to total loans was 0.81% at September 30, 2021 compared with 1.04% at December 31, 2020 and 1.05% at September 30, 2020. The volume of PPP loans originated since the second quarter of 2020 impacted the ratio. PPP loans, net of fees, were $32.8 million at September 30, 2021 and $49.3 million at December 31, 2020. When excluding PPP loans, the allowance for loan losses to total loans would have been 0.83% and 1.09% at September 30, 2021 and December 31, 2020, respectively. These loans are fully guaranteed by the SBA in accordance with the CARES Act; therefore, no allowance is required. The Company monitors and adjusts the allowance for loan losses based on loans requiring a reserve.

 

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

 

ALLOWANCE FOR LOAN LOSSES                    
(Unaudited)                    
(Dollars in thousands)  2021   2020 
   Third   Second   First   Fourth   Third 
   Quarter   Quarter   Quarter   Quarter   Quarter 
Allowance for loan losses:                         
Beginning of period  $11,006   $10,828   $12,340   $12,328   $12,238 
Provision for loan losses   (1,250)   -    (1,400)   -    - 
Net (charge-offs) recoveries   173    178    (112)   12    90 
End of period  $9,929   $11,006   $10,828   $12,340   $12,328 

 

 10 

 

 

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)  2021   2020 
   30-Sep-21   30-Jun-21   31-Mar-21   31-Dec-20   30-Sep-20 
Nonaccrual loans  $3,770   $3,555   $3,496   $4,460   $4,214 
Loans past due 90 days and accruing interest   -    -    33    45    - 
Total nonperforming loans   3,770    3,555    3,529    4,505    4,214 
Other real estate owned   255    364    4,313    4,361    4,416 
Total nonperforming assets  $4,025   $3,919   $7,842   $8,866   $8,630 
Allowance for loan losses to loans   0.81%   0.92%   0.90%   1.04%   1.05%
Allowance for loan losses to nonaccrual loans   263.37    309.59    309.73    276.68    292.55 
Nonperforming assets to loans and other real estate   0.33    0.33    0.65    0.75    0.73 
Net charge-offs/(recoveries) to average loans   (0.06)%   (0.06)%   0.04%   0.03%   0.04%

 

A further breakout of nonaccrual loans, excluding PCI loans, at September 30, 2021, June 30, 2021, December 31, 2020, and September 30, 2020 is below.

 

NONACCRUAL LOANS (excluding PCI loans)            
(Unaudited)                
(Dollars in thousands)                
   30-Sep-21   30-Jun-21   31-Dec-20   30-Sep-20 
Mortgage loans on real estate:                    
Residential 1-4 family  $1,168   $1,316   $1,357   $1,338 
Commercial   602    953    730    764 
Construction and land development   2    2    44    572 
                     
Agriculture   -    -    45    51 
Total real estate loans  $1,772   $2,271   $2,176   $2,725 
Commercial loans   1,998    1,284    2,264    1,470 
Consumer installment loans   -    -    20    19 
Gross loans  $3,770   $3,555   $4,460   $4,214 

 

Capital Requirements

 

The Bank’s ratio of total risk-based capital was 13.7% at September 30, 2021 compared with 13.6% at December 31, 2020. The tier 1 risk-based capital ratio was 13.0% at September 30, 2021 and 12.7% at December 31, 2020. The Bank’s tier 1 leverage ratio was 10.3% at September 30, 2021 and 10.1% at December 31, 2020.  All capital ratios exceed regulatory minimums to be considered well capitalized. BASEL III introduced the common equity tier 1 capital ratio, which was 13.3% at September 30, 2021 and 12.7% at December 31, 2020.

 

Earnings Conference Call and Webcast

 

The Company will host a conference call for interested parties on Friday, October 29, 2021, at 10:00 a.m. Eastern Time to discuss the financial results for the third quarter of 2021. 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 October 29, 2021, until 9:00 a.m. Eastern Time on November 19, 2021. The replay will be available by dialing 877-344-7529 and entering access code 10161610 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.

 

 11 

 

 

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.

 

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; unusual and infrequently occurring events, such as weather-related disasters, terrorist acts or public health events (such as the current COVID-19 pandemic), and of governmental and societal responses to them; the pending merger with United Bankshares, including its closing on the expected terms and schedule, the costs associated with completing it and integrating the businesses, and business operations until and through its closing; 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, 2020 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

 

 12 

 

 

COMMUNITY BANKERS TRUST CORPORATION                
CONSOLIDATED BALANCE SHEETS                
UNAUDITED                
(Dollars in thousands, except per share data)                
   30-Sep-21   30-Jun-21   31-Dec-20   30-Sep-20 
Assets                    
Cash and due from banks  $25,485   $21,414   $17,845   $18,689 
Interest bearing bank deposits   23,591    101,996    45,118    56,795 
Federal funds sold   -    234    222    - 
Total cash and cash equivalents   49,076    123,644    63,185    75,484 
                     
Securities available for sale, at fair value   375,845    321,759    271,347    233,653 
Securities held to maturity, at cost   19,052    19,824    21,176    23,026 
Equity securities, restricted, at cost   8,049    8,049    8,436    8,875 
Total securities   402,946    349,632    300,959    265,554 
                     
Loans held for sale   -    -    -    1,151 
                     
Loans   1,230,981    1,191,841    1,182,362    1,177,709 
Purchased credit impaired (PCI) loans   15,679    17,943    24,040    27,146 
Allowance for loan losses   (9,929)   (11,006)   (12,340)   (12,328)
Allowance for loan losses – PCI loans   (156)   (156)   (156)   (156)
Net loans   1,236,575    1,198,622    1,193,906    1,192,371 
                     
Bank premises and equipment, net   26,967    27,297    27,897    28,197 
Bank premises and equipment held for sale   1,507    1,507    1,507    1,589 
Right-of-use lease assets   4,811    5,053    5,530    5,766 
Other real estate owned   255    364    4,361    4,416 
Bank owned life insurance   30,528    30,363    30,029    29,858 
Other assets   18,635    17,731    17,435    17,851 
Total assets  $1,771,300   $1,754,213   $1,644,809   $1,622,237 
                     
Liabilities                    
Deposits:                    
Noninterest bearing  $345,721   $339,712   $298,901   $281,679 
Interest bearing   1,153,081    1,149,116    1,099,800    1,087,663 
Total deposits   1,498,802    1,488,828    1,398,701    1,369,342 
                     
Federal funds purchased   2,698    -    -    940 
Federal Home Loan Bank borrowings   67,333    67,500    57,833    68,000 
Trust preferred capital notes   4,124    4,124    4,124    4,124 
Lease liabilities   5,045    5,297    5,787    6,027 
Other liabilities   8,961    8,733    8,710    8,014 
Total liabilities   1,586,963    1,574,482    1,475,155    1,456,447 
                     
Shareholders' Equity                    
Common stock (200,000,000 shares authorized $0.01 par value; 22,464,593, 22,451,463, 22,200,929 and 22,321,000 shares issued and outstanding, respectively)   225    225    222    223 
Additional paid in capital   151,905    151,522    149,822    150,708 
Retained earnings   27,787    22,811    13,419    9,300 
Accumulated other comprehensive income   4,420    5,173    6,191    5,559 
Total shareholders' equity   184,337    179,731    169,654    165,790 
Total liabilities and shareholders' equity  $1,771,300   $1,754,213   $1,644,809   $1,622,237 

 

 13 

 

 

COMMUNITY BANKERS TRUST CORPORATION            
CONSOLIDATED STATEMENTS OF INCOME            
UNAUDITED                        
(Dollars in thousands)  YTD   Three months ended   YTD   Three months ended 
   2021   30-Sep-21   30-Jun-21   2020   30-Sep-20   30-Jun-20 
Interest and dividend income                              
Interest and fees on loans  $39,787   $13,441   $13,196   $38,858   $12,760   $13,012 
Interest and fees on PCI loans   2,348    708    784    3,121    962    1,062 
Interest on deposits in other banks   173    59    54    231    121    41 
Interest and dividends on securities                              
Taxable   4,885    1,723    1,695    4,000    1,362    1,287 
Nontaxable   1,012    350    335    1,036    344    349 
Total interest and dividend income   48,205    16,281    16,064    47,246    15,549    15,751 
Interest expense                              
Interest on deposits   4,174    1,262    1,347    9,215    2,614    3,182 
Interest on borrowed funds   661    224    220    720    222    209 
Total interest expense   4,835    1,486    1,567    9,935    2,836    3,391 
                               
Net interest income   43,370    14,795    14,497    37,311    12,713    12,360 
(Recovery of) provision for loan losses   (2,650)   (1,250)   -    4,200    -    900 
Net interest income after (recovery of ) provision for loan losses   46,020    16,045    14,497    33,111    12,713    11,460 
                               
Noninterest income                              
Service charges and fees   2,001    671    651    1,817    613    532 
Gain (loss) on securities transactions, net   (19)   (7)   (28)   281    78    242 
Gain on sale of loans   -    -    -    11    -    - 
Income on bank owned life insurance   499    165    168    518    171    173 
Mortgage loan income   810    255    235    822    228    373 
Other   1,179    297    435    974    382    296 
Total noninterest income   4,470    1,381    1,461    4,423    1,472    1,616 
                               
Noninterest expense                              
Salaries and employee benefits   15,968    5,408    5,352    14,806    5,041    4,613 
Occupancy expenses   2,387    790    761    2,420    815    778 
Equipment expenses   880    275    317    1,047    330    345 
FDIC assessment   481    161    108    455    174    156 
Data processing fees   2,022    673    741    1,821    656    573 
Other real estate expenses, net   (415)   5    (431)   89    87    (4)
Other operating expenses   5,734    1,798    2,344    4,355    1,423    1,412 
Total noninterest expense   27,057    9,110    9,192    24,993    8,526    7,873 
                               
Income before income taxes   23,433    8,316    6,766    12,541    5,659    5,203 
Income tax expense   4,816    1,768    1,340    2,450    1,143    1,043 
Net income  $18,617   $6,548   $5,426   $10,091   $4,516   $4,160 
                               

 

 14 

 

 

 

COMMUNITY BANKERS TRUST CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

UNAUDITED

(Dollars in thousands)

  Three months ended 
   30-Sep-21   30-Jun-21   31-Mar-21   31-Dec-20   30-Sep-20 
Interest and dividend income                         
Interest and fees on loans  $13,441   $13,196   $13,150   $13,622   $12,760 
Interest and fees on PCI loans   708    784    856    932    962 
Interest on deposits in other banks   59    54    60    107    121 
Interest and dividends on securities                         
  Taxable   1,722    1,695    1,467    1,373    1,362 
  Nontaxable   350    335    327    337    344 
Total interest and dividend income   16,281    16,064    15,860    16,371    15,549 
Interest expense                         
Interest on deposits   1,262    1,347    1,565    2,151    2,614 
Interest on borrowed funds   224    220    217    221    222 
Total interest expense   1,486    1,567    1,782    2,372    2,836 
                          
Net interest income   14,795    14,497    14,078    13,999    12,713 
(Recovery of) provision for loan losses   (1,250)   -    (1,400)   -    - 
Net interest income after (recovery of ) provision for loan losses   16,045    14,497    15,478    13,999    12,713 
                          
Noninterest income                         
Service charges and fees   671    651    679    777    613 
Gain (loss) on securities transactions, net   (7)   (28)   16    3    78 
Gain on sale of loans   -    -    -    -    - 
Income on bank owned life insurance   165    168    166    171    171 
Mortgage loan income   255    235    320    294    228 
Other   297    435    447    280    382 
Total noninterest income   1,381    1,461    1,628    1,525    1,472 
                          
Noninterest expense                         
Salaries and employee benefits   5,408    5,352    5,208    5,332    5,041 
Occupancy expenses   790    761    836    758    815 
Equipment expenses   275    317    288    320    330 
FDIC assessment   161    108    212    184    174 
Data processing fees   673    741    608    632    656 
Other real estate expenses, net   5    (431)   11    63    87 
Other operating expenses   1,798    2,344    1,592    1,450    1,423 
Total noninterest expense   9,110    9,192    8,755    8,739    8,526 
                          
Income before income taxes   8,316    6,766    8,351    6,785    5,659 
Income tax expense   1,768    1,340    1,708    1,328    1,143 
Net income  $6,548   $5,426   $6,643   $5,457   $4,516 

 

15 

 

 

COMMUNITY BANKERS TRUST CORPORATION

NET INTEREST MARGIN ANALYSIS

AVERAGE BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

   Three months ended September 30, 2021   Three months ended June 30, 2021 
   Average
Balance Sheet
   Interest Income / Expense   Average
Rates
Earned /
Paid
   Average Balance Sheet   Interest
Income /
Expense
   Average
Rates
Earned /
Paid
 
ASSETS:                              
Loans, including fees  $1,203,674   $13,441    4.43%  $1,204,691   $13,196    4.39%
PCI loans,  including fees   16,789    708    16.51    19,827    784    15.63 
   Total loans   1,220,463    14,149    4.60    1,224,518    13,980    4.58 
Interest bearing bank balances   73,098    59    0.32    86,130    54    0.25 
Federal funds sold   225    -    0.12    208    -    0.08 
Securities (taxable)   332,322    1,723    2.07    272,556    1,695    2.49 
Securities (tax exempt)(1)   53,456    443    3.32    50,260    424    3.37 
Total earning assets   1,679,564    16,374    3.87    1,633,672    16,153    3.97 
Allowance for loan losses   (11,312)             (11,037)          
Non-earning assets   101,745              104,716           
   Total assets  $1,769,997             $1,727,351           
                               
LIABILITIES AND SHAREHOLDERS’ EQUITY                              
Demand - interest bearing  $283,809   $125    0.18   $268,525   $119    0.18 
Savings and money market   331,981    201    0.24    323,137    205    0.25 
Time deposits   540,934    936    0.69    535,455    1,023    0.77 
Total interest bearing deposits   1,156,724    1,262    0.43    1,127,117    1,347    0.48 
Short-term borrowings   139    -    0.19    134    -    0.20 
FHLB and other borrowings   71,619    224    1.22    71,785    220    1.22 
Total interest bearing liabilities   1,228,482    1,486    0.48    1,199,036    1,567    0.52 
Noninterest bearing deposits   344,320              337,907           
Other liabilities   13,776              13,921           
Total liabilities   1,586,578              1,550,864           
Shareholders’ equity   183,419              176,487           
Total liabilities and                              
   Shareholders’ equity  $1,769,997             $1,727,351           
Net interest earnings       $14,888             $14,586      
Interest spread             3.39%             3.45%
Net interest margin             3.52%             3.58%
                               
Tax-equivalent adjustment:                              
Securities        93              89      

 

(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 September 30, 2021   Three months ended September 30, 2020 
   Average Balance Sheet   Interest Income / Expense   Average
Rates
Earned /
Paid
   Average Balance Sheet   Interest
Income /
Expense
   Average
Rates
Earned /
Paid
 
ASSETS:                              
Loans, including fees  $1,203,674   $13,441    4.43%  $1,169,330   $12,760    4.33%
PCI loans,  including fees   16,789    708    16.51    28,480    962    13.21 
   Total loans   1,220,463    14,149    4.60    1,197,810    13,722    4.55 
Interest bearing bank balances   73,098    59    0.32    70,590    121    0.68 
Federal funds sold   225    -    0.12    127    -    0.07 
Securities (taxable)   332,322    1,723    2.07    198,296    1,362    2.75 
Securities (tax exempt)(1)   53,456    443    3.32    50,551    435    3.44 
Total earning assets   1,679,564    16,374    3.87    1,517,374    15,640    4.09 
Allowance for loan losses   (11,312)             (12,424)          
Non-earning assets   101,745              108,772           
   Total assets  $1,769,997             $1,613,722           
                               
LIABILITIES AND SHAREHOLDERS’ EQUITY                              
Demand - interest bearing  $283,809   $125    0.18   $200,995   $112    0.22 
Savings and money market   331,981    201    0.24    268,350    241    0.36 
Time deposits   540,934    936    0.69    612,848    2,261    1.46 
Total interest bearing deposits   1,156,724    1,262    0.43    1,082,193    2,614    0.96 
Short-term borrowings   139    -    0.19    1,611    1    0.21 
FHLB and other borrowings   71,619    224    1.22    72,285    221    1.19 
Total interest bearing liabilities   1,228,482    1,486    0.48    1,156,089    2,836    0.97 
Noninterest bearing deposits   344,320              281,026           
Other liabilities   13,776              12,980           
Total liabilities   1,586,578              1,450,095           
Shareholders’ equity   183,419              163,627           
Total liabilities and                              
   Shareholders’ equity  $1,769,997             $1,613,722           
Net interest earnings       $14,888             $12,804      
Interest spread             3.39%             3.12%
Net interest margin             3.52%             3.35%
                               
Tax-equivalent adjustment:                              
Securities        93              91      

 

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

 

17 

 

COMMUNITY BANKERS TRUST CORPORATION

NET INTEREST MARGIN ANALYSIS

AVERAGE BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

   Nine months ended September 30, 2021   Nine months ended September 30, 2020 
   Average Balance Sheet   Interest Income / Expense   Average
Rates
Earned /
Paid
   Average Balance Sheet   Interest
Income /
Expense
   Average
Rates
Earned /
Paid
 
ASSETS:                              
Loans, including fees  $1,199,965   $39,787    4.43%  $1,127,002   $38,858    4.59%
PCI loans,  including fees   19,924    2,348    15.54    29,917    3,121    13.71 
   Total loans   1,219,889    42,135    4.62    1,156,919    41,979    4.83 
Interest bearing bank balances   76,484    173    0.30    46,620    231    0.66 
Federal funds sold   210    -    0.09    159    -    0.36 
Securities (taxable)   280,295    4,885    2.32    190,035    4,000    2.81 
Securities (tax exempt)(1)   50,974    1,281    3.35    50,192    1,311    3.48 
Total earning assets   1,627,852    48,474    3.98    1,443,925    47,521    4.38 
Allowance for loan losses   (11,594)             (11,023)          
Non-earning assets   104,124              108,056           
   Total assets  $1,720,382             $1,540,958           
                               
LIABILITIES AND SHAREHOLDERS’ EQUITY                              
Demand - interest bearing  $267,862   $382    0.19   $184,415   $304    0.22 
Savings and money market   315,779    589    0.25    243,311    749    0.41 
Time deposits   542,195    3,203    0.79    629,598    8,162    1.73 
   Total interest bearing deposits   1,125,836    4,174    0.50    1,057,324    9,215    1.16 
Short-term borrowings   236    -    0.21    2,038    24    1.57 
FHLB and other borrowings   70,868    661    1.23    70,263    696    1.30 
Total interest bearing liabilities   1,196,940    4,835    0.54    1,129,625    9,935    1.17 
Noninterest bearing deposits   332,509              237,198           
Other liabilities   13,644              13,849           
Total liabilities   1,543,093              1,380,672           
Shareholders’ equity   177,289              160,286           
Total liabilities and                              
   shareholders’ equity  $1,720,382             $1,540,958           
Net interest earnings       $43,639             $37,586      
Interest spread             3.44%             3.21%
Net interest margin             3.58%             3.48%
                               
Tax-equivalent adjustment:                              
Securities        269             $275      

 

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

18 

 

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Ticker: ESXB
CIK: 1323648
Form Type: 8-K Corporate News
Accession Number: 0001104659-21-131466
Submitted to the SEC: Fri Oct 29 2021 9:09:34 AM EST
Accepted by the SEC: Fri Oct 29 2021
Period: Wednesday, October 27, 2021
Industry: State Commercial Banks
Events:
  1. Earnings Release
  2. Financial Exhibit
  3. Other Events

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