Exhibit 99.1

 

 

 

Community Bankers Trust Corporation Reports Results for Third Quarter of 2018

 

Net income of $4.0 million in the third quarter of 2018 is an increase of $1.5 million, or 63.7%, over the third quarter of 2017. Nine month 2018 net income is an increase of $2.5 million, or 31.7%, over 2017.

 

Conference Call on Friday, October 26, 2018, at 10:00 a.m. Eastern Time

 

Richmond, VA, October 26, 2018 - Community Bankers Trust Corporation (the “Company”) (NASDAQ: ESXB), the holding company for Essex Bank (the “Bank”), today reported results for the third quarter and nine months ended September 30, 2018.

 

Income Statement- Three Months ended September 30, 2018 compared with Three Months ended June 30, 2018

·Net income of $4.0 million for the third quarter of 2018 is an increase of $173,000, or 4.6%, on a linked quarter basis.
·Interest and dividend income increased $634,000, or 4.4%.
·Net interest income increased $333,000, or 2.9%.
·Noninterest income increased $76,000, or 6.7%.
·Basic earnings per common share were $0.18 in the third quarter compared with $0.17 in the second quarter.
·Return on average assets, annualized, was 1.16% and return on average equity, annualized, was 12.08% in the third quarter.

 

Income Statement- Nine Months ended September 30, 2018 compared with Nine Months ended September 30, 2017

·Net income of $10.3 million is an increase of $2.5 million, or 31.7%.
·Income before income taxes increased $2.1 million, or 19.9%.
·Interest and dividend income of $43.7 million is an increase of $4.2 million, or 10.6%.
·Interest and fees on loans increased $4.4 million, or 15.0%.
·Net interest income increased $2.2 million, or 6.8%.
·Return on average assets, annualized, was 1.02% and return on average equity, annualized, was 10.79% for the first nine months of 2018 compared with 0.82% and 8.69%, respectively, for the first nine months of 2017.
·Year-to-date 2018 basic earnings per common share were $0.47 compared with $0.36 for the same period in 2017.

 

Income Statement- Three Months ended September 30, 2018 compared with Three Months ended September 30, 2017

·Net income of $4.0 million for the third quarter of 2018 is an increase year-over-year of $1.5 million, or 63.7%.
·Income before income taxes increased $1.6 million, or 46.9%.
·Interest and dividend income increased $1.8 million, or 13.1%, in the third quarter of 2018 over the same period in 2017, led by interest and fees on loans, which increased $1.8 million, or 17.4%.
·Net interest income after provision for loan losses increased $1.1 million, or 10.2%, year-over-year.
·Noninterest income increased year-over-year by 21.3%, or $213,000.
·Noninterest expenses declined year-over-year by 2.9%, or $248,000.

 

Balance Sheet- Year-over-year- September 30, 2018 compared with September 30, 2017

·Loans grew $72.4 million, or 8.1%, from $890.0 million at September 30, 2017 to $962.4 million at September 30, 2018.
·Noninterest bearing deposits grew $13.5 million, or 9.3%, year-over-year and totaled $158.9 million.
·Deposits increased $55.5 million, or 5.1%, year-over-year.
·NOW accounts increased $9.5 million, or 6.9%, from September 30, 2017 to September 30, 2018.
·Nonaccrual loans of $8.9 million at September 30, 2018 declined $3.8 million, or 29.8%, from one year ago.

  

MANAGEMENT COMMENTS

 

Rex L. Smith, III, President and Chief Executive Officer, stated, “The third quarter showed a continuation of many of the positive trends we saw in the first half of 2018. While loan growth year to date remains well below what we experienced in previous years, it is in line with the trends we see in most banks. Our conservative approach to loan pricing and credit quality has allowed us to increase our margin and continue growth of low cost deposits. Our branches, specifically our newer ones, are gaining good deposit momentum, which has allowed us to significantly pay down our wholesale fundings and increase our noninterest bearing deposit base.”

 

 

 

  

Smith added, “Our disciplined approach to balance sheet management continues to pay off in the rising rate environment. It shows in most of the major metrics of the Company including asset quality, net interest margin and return on total assets. Our earnings year to date are the highest they have been in the history of the Company.”

 

Smith concluded, “We continue to focus on total return for our shareholders and will remain disciplined in our growth in all areas. Given our balance sheet and the current rate environment, we remain optimistic for continued positive trends for the rest of 2018 and 2019.”

 

RESULTS OF OPERATIONS

 

Linked Quarter Basis

Net income was $4.0 million for the third quarter of 2018, compared with net income of $3.8 million in the second quarter of 2018. Basic earnings per common share were $0.18 per share and $0.17 per share for the three months ended September 30, 2018 and June 30, 2018, respectively. Fully diluted earnings per share were $0.17 for each of the three months ended September 30, 2018 and June 30, 2018. The increase in net income of $173,000, or 4.6%, for the third quarter of 2018 compared with the second quarter of 2018, was primarily the result of a $634,000 increase in interest and dividend income, driven by an increase of $540,000, or 4.8%, in interest and fees on loans. Also positively influencing net income were an increase of $333,000 in net interest income after provision for loan losses and an increase of $76,000 in noninterest income. Offsetting these increases were increases of $104,000 in noninterest expenses and $132,000 in income tax expense.

 

Year-Over-Year Nine Months

Net income was $10.3 million for the first nine months of 2018 compared with $7.8 million for the same period in 2017. This is an increase of $2.5 million, or 31.7%. Increases were in interest and dividend income, which increased by $4.2 million, or 10.6%, and in noninterest income, which increased by $351,000, or 11.6%. Also positively affecting earnings were a reduction of $150,000 in the provision for loan losses and a decrease of $389,000 in income tax expense when comparing the two periods. Offsetting these increases to net income were an increase of $1.9 million in interest expense and an increase of $629,000 in noninterest expense.By comparing pre-tax income for the two periods, most of the effect of the Tax Cuts and Jobs Act of 2017 is eliminated. This comparison reflects that income before income taxes increased by $2.1 million, or 19.9%, for the first nine months of 2018 compared with the same period in 2017.

 

Year-Over-Year Quarter

Net income of $4.0 million for the third quarter of 2018 was an increase of $1.5 million, or 63.7%, over third quarter 2017 net income of $2.4 million. Pre-tax net income increased $1.6 million, or 46.9%, in the third quarter of 2018. Interest and dividend income increased by $1.8 million in the third quarter of 2018 compared with the same period in 2017, driven by interest and fees on loans, which increased $1.8 million. Noninterest income increased by $213,000 year-over-year, and noninterest expenses declined by $248,000. Offsetting these increases was an increase in income tax expense, which was $26,000 greater, year-over-year, based on the increase in pre-tax income but lessened by the reduction in the corporate tax rate, from 34% to 21%.

 

The following table presents summary income statements for the three months ended September 30, 2018, June 30, 2018, and September 30, 2017 and the nine months ended September 30, 2018 and September 30, 2017.

 

SUMMARY INCOME STATEMENT

(Unaudited)

(Dollars in thousands)  For the three months ended   For the nine months ended 
   30-Sep-18   30-Jun-18   30-Sep-17   30-Sep-18   30-Sep-17 
Interest income  $15,144   $14,510   $13,389   $43,733   $39,557 
Interest expense   3,164    2,863    2,363    8,639    6,690 
Net interest income   11,980    11,647    11,026    35,094    32,867 
Provision for loan losses   -    -    150    -    150 
Net interest income after provision for loan losses   11,980    11,647    10,876    35,094    32,717 
Noninterest income   1,211    1,135    998    3,379    3,028 
Noninterest expense   8,291    8,187    8,539    25,844    25,215 
Income before income taxes   4,900    4,595    3,335    12,629    10,530 
Income tax expense   945    813    919    2,298    2,687 
Net income  $3,955   $3,782   $2,416   $10,331   $7,843 
                          
EPS Basic  $0.18   $0.17   $0.11   $0.47   $0.36 
EPS Diluted  $0.17   $0.17   $0.11   $0.46   $0.35 
                          
Return on average assets, annualized   1.16%   1.12%   0.75%   1.02%   0.82%
Return on average equity, annualized   12.08%   11.92%   7.80%   10.79%   8.69%

 

 2 

 

 

Net Interest Income

 

Linked Quarter Basis

Net interest income was $12.0 million for the quarter ended September 30, 2018 compared with $11.6 million for the quarter ended June 30, 2018. This is an increase of $333,000, or 2.9%.

 

Interest income with respect to loans, excluding PCI loans, increased $540,000, or 4.8%, during the third quarter when compared with the second quarter of 2018. This increase was attributed to an increase in the average balance of loans, excluding PCI loans, of $6.8 million during the third quarter of 2018 over the previous quarter, coupled with higher rates. The yield on loans increased from 4.75% in the second quarter of 2018 to 4.89% in the third quarter of 2018. Interest income with respect to PCI loans was $1.3 million in each of the second and third quarters of 2018. Interest income on securities increased $79,000 on a linked quarter basis. Interest on deposits in other banks increased $25,000 on a linked quarter basis primarily due to an increase in the return on those balances from 1.85% in the second quarter of 2018 to 2.45% in the third quarter of 2018.

 

Securities income was $2.0 million on a tax-equivalent basis for the third quarter of 2018, which was an increase of $74,000 from the second quarter of 2018. The tax-equivalent yield on the securities portfolio was 3.21% in the third quarter of 2018 compared with a tax-equivalent yield of 3.11% in the second quarter of 2018.

 

Interest expense of $3.2 million in the third quarter of 2018 was an increase of $301,000, or 10.5%, on a linked quarter basis. Interest on deposits increased $344,000, or 14.6%. Interest on borrowed funds decreased by $43,000, or 8.5%. Average balances for interest bearing deposits increased by $15.7 million, or 1.6%. However, the cost of these deposits increased from 0.99% in the second quarter of 2018 to 1.10% in the third quarter of 2018, resulting in a 10.5% increase in interest expense. The increased rates paid on interest bearing deposits and wholesale funding resulted in an increase in the cost of interest bearing liabilities from 1.08% in the second quarter of 2018 to 1.18% in the third quarter of 2018.

 

With the changes in interest income noted above, the tax-equivalent net interest margin increased from 3.73% in the second quarter of 2018 to 3.77% in the third quarter of 2018. Likewise, the interest spread increased from 3.56% to 3.58% on a linked quarter basis.

 

Year-Over-Year Nine Months

For the first nine months of 2018 compared with the same period in 2017, net interest income increased $2.2 million, or 6.8%, and was $35.1 million. The yield on earning assets was 4.67% for the first nine months of 2018 compared with 4.55% for the first nine months of 2017. Interest and fees on loans of $34.1 million in the first three quarters of 2018 was an increase of $4.4 million compared with $29.7 million for the same period in 2017. Interest and fees on PCI loans declined $418,000 over this same time frame. Securities income increased $88,000 for the first nine months of 2018 compared with the same period in 2017. Interest on deposits in other banks increased $60,000 for the first three quarters of 2018 over the same period in 2017 primarily due to an increase in the return on those balances from 1.22% to 2.08% in 2018. On a tax-equivalent basis, income on securities decreased $402,000, primarily the result of less benefit on bank qualified municipal securities from the enactment in December 2017 of the Tax Cut and Jobs Act. The tax-equivalent yield on the portfolio was 3.10% for the first three quarters of 2018, based on a 21% tax rate, and 3.14% for the same period in 2017, based on a 34% tax rate.

 

Interest expense of $8.6 million represented an increase of $1.9 million in the first nine months of 2018 compared with the same period in 2017. Average interest bearing liabilities increased $50.9 million, or 5.0%, as loan growth has been fueled by an increase of $42.0 million, or 16.6%, in the average balance of demand - interest bearing accounts. This has allowed more expensive time deposit balances to decrease, on average, by $11.4 million, or 2.0%, resulting in a $33.1 million increase in the average balance of total deposits.

 

The tax equivalent net interest margin declined from 3.80% for the first nine months of 2017 to 3.76% for the first nine months of 2018. While the yield on earning assets increased by 12 basis points over this time frame, the competition for funding has pushed the cost of interest bearing liabilities up, from 0.89% to 1.09%. Likewise, the net interest spread declined and was 3.58% for the first nine months of 2018 versus 3.66% for the first nine months of 2017.

 

Year-Over-Year Quarter

Net interest income increased $954,000, or 8.7%, from the third quarter of 2017 to the third quarter of 2018. Net interest income was $12.0 million in the third quarter of 2018 compared with $11.0 million for the same period in 2017. Interest and dividend income increased $1.8 million, or 13.1%, over this time period. The increase in interest and dividend income was generated by an increase of $70.3 million, or 5.8%, in the level of earning assets. The yield on earning assets increased from 4.51% in the third quarter of 2017 to 4.76% in the third quarter of 2018. The average balance of loans, excluding PCI loans, increased $96.3 million, or 11.1%, from $869.5 million in the third quarter of 2017 to $965.8 million in the third quarter of 2018. Interest income on securities increased $119,000 and was $1.9 million in the third quarter of 2018 and $1.8 million in the third quarter of 2017. On a tax-equivalent basis, the yield on investment securities was 3.21% in the third quarter of 2018, based on a 21% tax rate, and 3.10% in the third quarter of 2017, based on a 34% tax rate. Interest on deposits in the other banks increased by $29,000 in the third quarter of 2018 over the same period in 2017 primarily due to an increase in the return on those balances from 1.40% in 2017 to 2.45% in 2018.

 

 3 

 

  

Interest on PCI loans was $1.3 million in the third quarter of 2018 compared with $1.4 million in the third quarter of 2017. The average balance of the PCI portfolio declined $7.7 million during the year-over-year comparison period.

 

Interest expense increased $801,000, or 33.9%, when comparing the third quarter of 2017 and the third quarter of 2018. Interest expense on deposits increased $646,000, or 31.5%, as the average balance of interest bearing deposits increased $33.5 million, or 3.6%. The increase in deposit cost was driven by an increase in the average balance of demand – interest bearing accounts, which increased a combined $4.2 million year-over-year. Likewise, the cost of these balances increased $13,000, from 0.40% to 0.42%, over the same time frame. Higher cost time deposit average balances increased over the comparison period by $25.7 million, and expense on this category increased by $631,000, resulting in an increase in cost from 1.19% to 1.56%. The average balance of FHLB and other borrowings increased, on average, $13.1 million year-over-year, and there was an increase in the rate paid, from 1.57% in the third quarter of 2017 to 1.98% in the third quarter of 2018. This resulted in an increase in the expense of this wholesale funding source of $144,000, to $452,000 in the third quarter of 2018. The average balance of FHLB and other borrowings was $90.8 million in the third quarter of 2018. Overall, the Bank’s cost of interest bearing liabilities increased 26 basis points, from 0.92% in the third quarter of 2017 to 1.18% in the third quarter of 2018.

 

The tax-equivalent net interest margin increased three basis points, from 3.74% in the third quarter of 2018 to 3.77% in the third quarter of 2018. The interest spread decreased from 3.59% to 3.58% over the same time period.  Net interest margin increased despite the decrease in interest spread because growth in the average balance of earning assets of $70.3 million was partially funded by growth in the average balance of noninterest bearing deposits of $18.9 million.

 

The following table compares the Company's net interest margin, on a tax-equivalent basis, for the three months ended September 30, 2018, June 30, 2018 and September 30, 2017 and the nine months ended September 30, 2018 and September 30, 2017.

 

NET INTEREST MARGIN

(Unaudited)  

(Dollars in thousands)  For the three months ended 
   30-Sep-18   30-Jun-18   30-Sep-17 
Average interest earning assets  $1,274,435   $1,266,663   $1,204,106 
Interest income  $15,144   $14,510   $13,389 
Interest income - tax-equivalent  $15,285   $14,656   $13,699 
Yield on interest earning assets   4.76%   4.64%   4.51%
Average interest bearing liabilities  $1,065,268   $1,064,626   $1,016,825 
Interest expense  $3,164   $2,863   $2,363 
Cost of interest bearing liabilities   1.18%   1.08%   0.92%
Net interest income  $11,980   $11,647   $11,026 
Net interest income - tax-equivalent  $12,121   $11,793   $11,336 
Interest spread   3.58%   3.56%   3.59%
Net interest margin   3.77%   3.73%   3.74%

  

   For the nine months ended 
   30-Sep-18   30-Sep-17 
Average interest earning assets  $1,265,026   $1,189,607 
Interest income  $43,733   $39,557 
Interest income - tax-equivalent  $44,173   $40,487 
Yield on interest earning assets   4.67%   4.55%
Average interest bearing liabilities  $1,061,432   $1,010,523 
Interest expense  $8,639   $6,690 
Cost of interest bearing liabilities   1.09%   0.89%
Net interest income  $35,094   $32,867 
Net interest income - tax-equivalent  $35,534   $33,797 
Interest spread   3.58%   3.66%
Net interest margin   3.76%   3.80%

  

 4 

 

  

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 no provision for loan losses on the loan portfolio, excluding PCI loans, during either the third quarter or the nine months ended September 30, 2018. This compares with a provision for loan losses of $150,000 for the third quarter and the nine months ended September 30, 2017. The absence of a provision during the third quarter of 2018 was the direct result of nominal charge-offs and stable asset quality, coupled with the level of loan growth during the period. There was no provision for loan losses on the PCI loan portfolio during any of 2018 or 2017. Additional discussion of loan quality is presented below.

 

Noninterest Income

 

Linked Quarter Basis

Noninterest income was $1.2 million for the third quarter of 2018, an increase of $76,000 compared with $1.1 million for the second quarter of 2018.  Gain (loss) on securities transactions, net exhibited a linked quarter change of $84,000. Gains of $68,000 were realized on the sale of securities in the third quarter of 2018 compared with losses of $16,000 realized in the second quarter of 2018. Mortgage loan income increased $17,000 on a linked quarter basis and was $97,000 in the third quarter of 2018. Service charges and fees increased $15,000 on a linked quarter basis and were $626,000 for the third quarter of 2018. There was $65,000 in gain on sale of loans in the third quarter of 2018 versus $53,000 in the second quarter of 2018. Offsetting these increases to noninterest income was other noninterest income of $171,000, which was a decrease of $52,000 from the second quarter of 2018. The linked quarter change was primarily attributable to a decrease of $59,000 in brokerage commission income in the third quarter of 2018.

 

Year-Over-Year Nine Months

Noninterest income was $3.4 million for the first nine months of 2018, an increase of $351,000, or 11.6%, compared with $3.0 million for the first nine months of 2017. Service charges and fees increased $153,000 for the first nine months of 2018 compared with the same period in 2017 and were $1.8 million. Mortgage loan income of $288,000 for the first nine months of 2018 was an increase of $125,000 from $163,000 for the same period in 2017. Gain on sale of loans was $118,000 for the first nine months of 2018 versus $0 for the same period in 2017. Other noninterest income, driven by higher brokerage commission and investment dividend income, reflected an increase of $74,000 for the first nine months of 2018 over the same period in 2017. Partially offsetting these increases was a decline of $98,000 in gain (loss) on securities transactions, net, which were $82,000 for the first nine months of 2018.

 

Year-Over-Year Quarter

Noninterest income increased $213,000, or 21.3%, and was $1.2 million in the third quarter of 2018 compared with $998,000 in the third quarter of 2017. Service charges and fees exhibited the largest increase, $68,000, in the third quarter of 2018 compared with the same period in 2017 and were $626,000. Gain on sale of loans was $65,000 in the third quarter of 2018 compared with $0 in the third quarter of 2017. Mortgage loans increased $38,000 year-over-year, from $59,000 in the third quarter of 2017 to $97,000 in the same period in 2018. Other noninterest income, once again as a result of improved brokerage commission and investment dividend income, increased $26,000 year-over-year.

 

Noninterest Expenses

 

Linked Quarter Basis

Noninterest expenses totaled $8.3 million for the third quarter of 2018, as compared with $8.2 million for the second quarter of 2018, an increase of $104,000, or 1.3%. Other operating expenses increased by $63,000 on a linked quarter basis, driven by increases of $79,000 in credit expense, $75,000 in stationery, printing and supplies, $28,000 in other expenses and $23,000 in marketing expense. Offsetting these increases to other operating expenses was a decrease of $142,000 in bank franchise tax due to refunds received on amended returns during the third quarter of 2018. Also increasing on a linked quarter basis was equipment expense, which was $366,000 for the third quarter of 2018 versus $344,000 for the previous quarter, an increase of $22,000.

 

Year-Over-Year Nine Months

Noninterest expenses were $25.8 million for the first nine months of 2018, as compared with $25.2 million for the same period in 2017. This is an increase of $629,000, or 2.5%. Salaries and employee benefits increased $1.5 million for the first nine months of 2018 compared with the same period in 2017. Within this increase, $668,000 was related to group hospital and medical insurance increases and $576,000 was related to increases in total salaries. Also impacting noninterest expenses for the first nine months of 2018 compared with the same period in 2017 were increases of $175,000 in equipment expenses and $32,000 in occupancy expenses reflecting the opening of three new branches during the second half of 2017. Other real estate expenses, net, also increased $60,000 during the same period. These increases were offset by a decline of $878,000 in amortization of intangibles, which became fully amortized in 2017, and a decline of $273,000 in other operating expenses. Significant decreases in 2018 in other operating expenses were declines of $160,000 in telephone and internet line expense as a result of bringing line monitoring management in-house during the second quarter of 2018, $135,000 in credit expense, $97,000 in stationery, printing and supplies and $79,000 in bank franchise tax. Other expenses included in other operating expenses increased $140,000 for the first nine months of 2018 compared with the same period in 2017 as did outside vendor fees, which increased by $92,000.

 

 5 

 

 

Year-Over-Year Quarter

Noninterest expenses decreased $248,000, or 2.9%, when comparing the third quarter of 2018 to the same period in 2017. Other operating expenses decreased $265,000, or 16.1%. Bank franchise tax declined by $121,000 over the comparison period due to the previously mentioned refund, as did telephone and internet line expense, which decreased by $114,000 due to the in-house change noted above, and credit expense, which decreased by $67,000. Occupancy expense decreased by $77,000 year-over-year and amortization of intangibles decreased $62,000 year-over-year. Offsetting these decreases to noninterest expenses were increases of $78,000 in salaries and employee benefits, $61,000 in equipment expenses and $26,000 in other real estate expenses, net.

  

The following table compares the Company's other operating expenses included in noninterest expenses for the three months ended September 30, 2018, June 30, 2018, December 31, 2017 and September 30, 2017 and nine months ended September 30, 2018 and September 30, 2017.

 

OTHER OPERATING EXPENSES

(Unaudited) 

(Dollars in thousands)  For the three months ended   For the nine months ended 
   30-Sep-18   30-Jun-18   31-Dec-17   30-Sep-17   30-Sep-18   30-Sep-17 
Bank franchise tax  $37   $179   $158   $158   $395   $474 
Telephone and internet line   50    51    172    164    344    504 
Stationery, printing and supplies   160    85    153    174    423    520 
Marketing expense   156    133    155    161    467    501 
Credit expense   180    101    75    247    373    508 
Outside vendor fees   155    154    200    117    454    362 
Other expenses   638    610    602    620    1,882    1,742 
Total other operating expenses  $1,376   $1,313   $1,515   $1,641   $4,338   $4,611 

 

Income Taxes

 

Income tax expense was $945,000 for the three months ended September 30, 2018, compared with income tax expense of $813,000 for the second quarter of 2018 and $919,000 for the third quarter of 2017. For the nine months ended September 30, 2018, income tax expense was $2.3 million compared with $2.7 million for the first nine months of 2017. The effective tax rate for the third quarter of 2018 was 19.3% versus 17.7% for the second quarter of 2018 and 27.6% in the third quarter of 2017. For the first nine months of 2018, the effective tax rate was 18.2% and, for the same period in 2017, it was 25.5%. The decrease in the Company’s effective tax rate resulted principally from the decrease in its applicable federal corporate income tax rate from 34% to 21% as a result of the Tax Cuts and Jobs Act enacted in December 2017.

 

FINANCIAL CONDITION

 

Total assets increased $14.2 million, or 1.1%, to $1.350 billion at September 30, 2018 when compared with December 31, 2017. Total assets increased $56.3 million, or 4.3%, since September 30, 2017. Total loans, excluding PCI loans, were $962.4 million at September 30, 2018, increasing $20.4 million, or 2.2%, from year end 2017 and $72.4 million, or 8.1%, from September 30, 2017.  Total PCI loans were $39.1 million at September 30, 2018 versus $44.3 million at year end 2017 and $45.5 million at September 30, 2017.

 

During the third quarter, commercial mortgage loans, the largest category of loans, decreased by $17.6 million, or 4.7%, and were $358.5 million at September 30, 2018. Multifamily loan balances were $52.3 million at September 30, 2018 and decreased $2.1 million during the third quarter of 2018. Also, residential 1 – 4 family loan balances decreased by $1.4 million during the third quarter of 2018 and were $216.2 million at September 30, 2018. Offsetting these decreases was an increase of $15.9 million during the third quarter of 2018 in construction and land development loan balances, which totaled $135.0 million at September 30, 2018.

 

During the first nine months of 2018, loans grew by $20.4 million, or 2.2%. Construction and land development loans grew by $27.2 million, or 25.2%, commercial loans grew by $11.3 million, or 7.1%, and consumer installment loans grew by $8.0 million. Offsetting these increases were declining balances in residential 1 – 4 family mortgages, which declined by $11.3 million, or 5.0%, commercial mortgage loans, which declined by $7.8 million, or 2.1%, and multifamily loans, which decreased $6.8 million, or 11.5%. In March 2018, the Company purchased an in-market, high quality consumer auto loan pool totaling $9.0 million. The addition of these loans brought an increase in diversification to the portfolio.

 

 6 

 

  

The Company’s loan portfolio exhibits balanced growth when comparing September 30, 2018 and September 30, 2017. Total loans grew $72.4 million, or 8.1%, over the time frame with commercial loans exhibiting the largest increase, $33.7 million, or 24.6%, followed by construction and land development loans, which grew by $32.4 million, or 31.6%, commercial mortgage loans, which grew by $12.7 million, or 3.7%, and consumer installment loans, which grew by $7.8 million.

 

The following table shows the composition of the Company's loan portfolio, excluding PCI loans, at September 30, 2018, June 30, 2018, December 31, 2017 and September 30, 2017.

 

LOANS (excluding PCI loans)

(Unaudited)

(Dollars in thousands)  30-Sep-18   30-Jun-18   31-Dec-17   30-Sep-17 
   Amount   % of
Loans
   Amount   % of
Loans
   Amount   % of
Loans
   Amount   % of
Loans
 
Mortgage loans on real estate:                                        
Residential 1-4 family  $216,203    22.46%   217,610    22.50%   227,542    24.16%   229,745    25.82%
Commercial   358,490    37.25    376,134    38.88    366,331    38.89    345,759    38.85 
Construction and land development   135,021    14.03    119,110    12.31    107,814    11.44    102,594    11.53 
Second mortgages   7,179    0.75    7,387    0.76    8,410    0.89    7,399    0.83 
Multifamily   52,255    5.43    54,329    5.62    59,024    6.27    53,642    6.03 
Agriculture   8,066    0.84    7,467    0.77    7,483    0.79    7,588    0.85 
Total real estate loans   777,214    80.76    782,037    80.84    776,604    82.44    746,727    83.91 
Commercial loans   170,310    17.70    170,065    17.58    159,024    16.88    136,643    15.35 
Consumer installment loans   13,135    1.36    13,717    1.42    5,169    0.55    5,331    0.60 
All other loans   1,766    0.18    1,542    0.16    1,221    0.13    1,279    0.14 
Gross loans   962,425    100.00%   967,361    100.00%   942,018    100.00%   889,980    100.00%
Allowance for loan losses   (8,993)        (9,089)        (8,969)        (8,667)     
Loans, net of unearned income  $953,432        $958,272        $933,049        $881,313      

  

The Company’s securities portfolio, excluding restricted equity securities of $7.9 million, declined $6.8 million since year end 2017 to total $244.2 million at September 30, 2018. Securities balances declined $12.7 million since September 30, 2017. Net gains of $68,000 were realized during the third quarter of 2018 through sales and call activity. For the first nine months of 2018, there were net gains of $82,000 realized through sales and call activity. The Company actively manages the portfolio to improve its liquidity and maximize the return within the desired risk profile.

 

The Company had cash and cash equivalents of $24.3 million, $22.0 million and $22.6 million at September 30, 2018, December 31, 2017 and September 30, 2017, respectively. There were federal funds sold of $240,000 at September 30, 2018 and $144,000 at September 30, 2017. There were federal funds purchased of $10.0 million at September 30, 2018 and $4.8 million at December 31, 2017. Interest bearing bank balances were $11.2 million at September 30, 2018 compared with $7.3 million at December 31, 2017 and $12.7 million at September 30, 2017.

 

The following table shows the composition of the Company's securities portfolio, excluding equity securities, at September 30, 2018, June 30, 2018, December 31, 2017 and September 30, 2017.

 

SECURITIES PORTFOLIO

(Unaudited)

(Dollars in thousands)  30-Sep-18   30-Jun-18   31-Dec-17   30-Sep-17 
   Amortized
Cost
   Fair
Value
   Amortized
Cost
   Fair
Value
   Amortized
Cost
   Fair
Value
   Amortized
Cost
   Fair
Value
 
Securities Available for Sale                                        
U.S. Treasury issue and other                                        
     U.S. Government agencies  $26,600   $26,037   $25,021   $24,520   $27,478   $27,183   $28,657   $28,439 
U.S Government sponsored agencies   8,378    8,424    9,077    9,124    9,247    9,278    2,779    2,743 
State, county, and municipal   117,557    115,744    120,935    120,079    124,032    125,760    122,318    124,329 
Corporate and other bonds   9,647    9,651    8,539    8,658    7,323    7,460    14,947    15,022 
Mortgage backed securities - U.S. Government agencies   14,420    14,254    15,057    14,954    18,546    18,515    23,921    23,531 
Mortgage backed securities - U.S. Government sponsored agencies   27,255    26,493    22,479    21,828    16,985    16,638    16,625    16,383 
Total securities available for sale  $203,857   $200,603   $201,108   $199,163   $203,611   $204,834   $209,247   $210,447 
                                         
Securities Held to Maturity                                        
U.S Government sponsored agencies  $10,000   $9,680   $10,000   $9,713   $10,000   $9,845   $10,000   $9,922 
State, county, and municipal   33,559    33,515    33,585    33,792    35,678    36,567    35,965    36,897 
Mortgage backed securities - U.S. Government agencies   -    -    404    409    468    476    495    506 
Total securities held to maturity  $43,559   $43,195   $43,989   $43,914   $46,146   $46,888   $46,460   $47,325 

 

  

 7 

 

 

Interest bearing deposits at September 30, 2018 were $975.0 million, an increase of $32.3 million from December 31, 2017 and $42.0 million from September 30, 2017. Time deposits less than or equal to $250,000 have shown the largest dollar volume growth during 2018 with $53.2 million in additional balances and totaling $491.0 million at quarter end. Time deposits over $250,000 grew by $3.2 million and were $113.7 million at September 30, 2018. NOW accounts decreased by $10.0 million and were $147.0 million at September 30, 2018.

 

Money market deposit accounts decreased $16.1 million, or 11.2%, from $144.4 million at September 30, 2017 to $128.3 million at September 30, 2018. NOW accounts grew $9.5 million, or 6.9%, since September 30, 2017. These increases have allowed the Bank to decrease balances with brokered time deposits by $12.0 million over the last year, and those balances were only $2.5 million at September 30, 2018.

 

The following table compares the mix of interest bearing deposits at September 30, 2018, June 30, 2018, December 31, 2017 and September 30, 2017.

 

INTEREST BEARING DEPOSITS

(Unaudited) 

(Dollars in thousands)                
   30-Sep-18   30-Jun-18   31-Dec-17   30-Sep-17 
NOW  $147,026   $162,984   $157,037   $137,559 
MMDA   128,277    145,071    143,363    144,409 
Savings   94,972    94,498    93,980    91,642 
Time deposits less than or equal to $250,000   491,044    452,734    437,810    440,607 
Time deposits over $250,000   113,715    116,657    110,546    118,837 
Total interest bearing deposits  $975,034   $971,944   $942,736   $933,054 

  

FHLB advances were $63.8 million at September 30, 2018, compared with $101.4 million at December 31, 2017 and $81.3 million at September 30, 2017.

 

Shareholders’ equity was $131.8 million at September 30, 2018, $124.0 million at December 31, 2017 and $124.4 million at September 30, 2017. Shareholder’s equity to assets was 9.8% at September 30, 2018, 9.3% at December 31, 2017 and 9.6% at September 30, 2017.

 

Asset Quality – non-covered assets

 

Nonaccrual loans were $8.9 million at September 30, 2018, decreasing $449,000 during the third quarter of 2018 and decreasing $132,000 from December 31, 2017. Nonaccrual loan balances declined by $3.8 million, or 29.8%, since September 30, 2017.

 

The following chart shows the level of nonaccrual loans, classified loans and criticized loans over the last five quarters.

 

ASSET QUALITY

(Unaudited) 

(Dollars in thousands)  2018   2017 
   30-Sep-18   30-Jun-18   31-Mar-18   31-Dec-17   30-Sep-17 
Nonaccrual loans  $8,894   $9,343   $10,090   $9,026   $12,677 
Criticized (special mention) loans   10,338    17,400    19,526    13,573    8,200 
Classified (substandard) loans   13,083    15,181    14,243    13,264    16,886 
Other real estate owned   1,732    3,147    3,166    2,791    2,710 
Total classified and criticized assets  $25,153   $35,728   $36,935   $29,628   $27,796 

 

Nonperforming assets totaled $10.6 million at September 30, 2018 compared with $11.8 million at December 31, 2017. Nonperforming assets declined $1.9 million, or 14.9%, during the third quarter of 2018. Nonperforming assets decreased $4.8 million, or 30.9%, since September 30, 2017. There were net charge-offs of $96,000 in the third quarter of 2018.

 

The allowance for loan losses equaled 101.1% of nonaccrual loans at September 30, 2018, compared with 97.3% at June 30, 2018, 99.4% at December 31, 2017 and 68.4% at September 30, 2017. The ratio of nonperforming assets to loans and OREO was 1.10% at September 30, 2018, 1.29% at June 30, 2018, 1.25% at December 31, 2017 and 1.72% at September 30, 2017.

 

 8 

 

  

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

 

ALLOWANCE FOR LOAN LOSSES

(Unaudited) 

(Dollars in thousands)  2018   2017 
   Third   Second   First   Fourth   Third 
   Quarter   Quarter   Quarter   Quarter   Quarter 
Allowance for loan losses:                         
Beginning of period  $9,089   $8,968   $8,969   $8,667   $9,489 
Provision for loan losses   -    -    -    400    150 
Net (charge-offs) recoveries   (96)   121    (1)   (98)   (972)
End of period  $8,993   $9,089   $8,968   $8,969   $8,667 

 

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)  2018   2017 
   30-Sep-18   30-Jun-18   31-Mar-18   31-Dec-17   30-Sep-17 
Nonaccrual loans  $8,894   $9,343   $10,090   $9,026   $12,677 
Loans past due over 90 days and accruing interest   -    -    -    -    - 
Total nonperforming loans   8,894    9,343    10,090    9,026    12,677 
Other real estate owned   1,732    3,147    3,166    2,791    2,710 
Total nonperforming assets  $10,626   $12,490   $13,256   $11,817   $15,387 
                          

Allowance for loan losses to loans   0.93%   0.94%   0.93%   0.95%   0.97%
Allowance for loan losses to nonaccrual loans   101.11    97.28    88.88    99.37    68.37 
Nonperforming assets to loans and other real estate   1.10    1.29    1.37    1.25    1.72 
Net charge-offs/(recoveries) for quarter to average loans, annualized   0.04%   (0.05)%   -%   0.04%   0.45%

  

A further breakout of nonaccrual loans, excluding PCI loans, at September 30, 2018, December 31, 2017 and September 30, 2017 is below.

 

NONACCRUAL LOANS (excluding PCI loans)

(Unaudited)  

(Dollars in thousands)  30-Sep-18   31-Dec-17   30-Sep-17 
   Amount   Amount   Amount 
Mortgage loans on real estate:               
 Residential 1-4 family  $1,530   $1,962   $2,140 
 Commercial   2,243    1,498    3,492 
 Construction and land development   4,610    4,277    4,283 
 Agriculture   -    68    66 
 Total real estate loans  $8,383   $7,805   $9,981 
Commercial loans   506    1,214    2,666 
Consumer installment loans   5    7    30 
 Gross loans  $8,894   $9,026   $12,677 

 

Capital Requirements

 

The Bank’s ratio of total risk-based capital was 13.5% at September 30, 2018 compared with 12.5% at December 31, 2017. The tier 1 risk-based capital ratio was 12.7% at September 30, 2018 and 11.7% at December 31, 2017. The Bank’s tier 1 leverage ratio was 10.1% at September 30, 2018 and 9.6% at December 31, 2017.  All capital ratios exceed regulatory minimums to be considered well capitalized. BASEL III introduced the common equity tier 1 capital ratio, which was 12.7% at September 30, 2018 and 11.7% at December 31, 2017.

 

 9 

 

 

Earnings Conference Call and Webcast

 

The Company will host a conference call for interested parties on Friday, October 26, 2018, at 10:00 a.m. Eastern Time to discuss the financial results for the third quarter of 2018. 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 26, 2018, until 9:00 a.m. Eastern Time on November 16, 2018. The replay will be available by dialing 877-344-7529 and entering access code 10125021 or through the internet by accessing the "Corporate Overview – Corporate Profile" page of the Company's internet site 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 25 full-service offices, 20 of which are in Virginia and five of which are in Maryland.  The Bank also operates one loan production office in Virginia.  The Bank opened a new branch office in the Stonehenge Village development in Midlothian, Virginia on July 31, 2018.  The Bank closed its Arnold branch office on September 14, 2018.

  

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; 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, 2017 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 

 

 10 

 

 

COMMUNITY BANKERS TRUST CORPORATION

CONSOLIDATED BALANCE SHEETS

UNAUDITED

(Dollars in thousands, except per share data)

 

   30-Sep-18   31-Dec-17   30-Sep-17 
Assets               
Cash and due from banks  $12,918   $14,642   $9,750 
Interest bearing bank deposits   11,177    7,316    12,656 
Federal funds sold   240    -    144 
Total cash and cash equivalents   24,335    21,958    22,550 
                
Securities available for sale, at fair value   200,603    204,834    210,447 
Securities held to maturity, at cost   43,559    46,146    46,460 
Equity securities, restricted, at cost   7,886    9,295    8,356 
Total securities   252,048    260,275    265,263 
                
Loans   962,425    942,018    889,980 
Purchased credit impaired (PCI) loans   39,144    44,333    45,451 
Allowance for loan losses   (8,993)   (8,969)   (8,667)
Allowance for loan losses – PCI loans   (137)   (200)   (200)
Net loans   992,439    977,182    926,564 
                
Bank premises and equipment, net   31,782    30,198    29,469 
Bank premises and equipment held for sale   1,252    -      
Other real estate owned   1,732    2,791    2,710 
Bank owned life insurance   28,649    28,099    27,911 
Core deposit intangibles, net   -    -    20 
Other assets   18,183    15,687    19,643 
Total assets  $1,350,420   $1,336,190   $1,294,130 
                
Liabilities               
Deposits:               
Noninterest bearing  $158,854   $153,028   $145,328 
Interest bearing   975,034    942,736    933,054 
Total deposits   1,133,888    1,095,764    1,078,382 
                
Federal funds purchased   10,000    4,849    - 
Federal Home Loan Bank advances   63,820    101,429    81,296 
Trust preferred capital notes   4,124    4,124    4,124 
Other liabilities   6,785    6,021    5,905 
Total liabilities   1,218,617    1,212,187    1,169,707 
                
Shareholders' Equity               
Common stock (200,000,000 shares authorized $0.01 par value; 22,120,862, 22,072,523, and 22,047,833 shares issued and outstanding, respectively)   221    221    220 
Additional paid in capital   148,494    147,671    147,453 
Retained deficit   (13,601)   (23,932)   (23,285)
Accumulated other comprehensive (loss) income   (3,311)   43    35 
Total shareholders' equity   131,803    124,003    124,423 
Total liabilities and shareholders' equity  $1,350,420   $1,336,190   $1,294,130 

 

 11 

 

 

COMMUNITY BANKERS TRUST CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

UNAUDITED

(Dollars in thousands)  YTD   Three months ended   YTD   Three months ended 
   2018   30-Sep-18   30-Jun-18   2017   30-Sep-17   30-Jun-17 
Interest and dividend income                              
Interest and fees on loans  $34,122   $11,893   $11,353   $29,676   $10,127   $9,952 
Interest and fees on PCI loans   3,937    1,265    1,274    4,355    1,423    1,452 
Interest on federal funds sold   1    -    1    1    1    - 
Interest on deposits in other banks   203    94    69    143    65    53 
Interest and dividends on securities                              
  Taxable   3,816    1,364    1,266    3,577    1,171    1,157 
  Nontaxable   1,654    528    547    1,805    602    606 
Total interest and dividend income   43,733    15,144    14,510    39,557    13,389    13,220 
Interest expense                              
Interest on deposits   7,197    2,699    2,355    5,776    2,053    1,944 
Interest on borrowed funds   1,442    465    508    914    310    302 
Total interest expense   8,639    3,164    2,863    6,690    2,363    2,246 
                               
Net interest income   35,094    11,980    11,647    32,867    11,026    10,974 
                               
Provision for loan losses   -    -    -    150    150    - 
Net interest income after provision for loan losses   35,094    11,980    11,647    32,717    10,876    10,974 
                               
Noninterest income                              
Service charges and fees   1,818    626    611    1,665    558    582 
Gain (loss) on securities transactions, net   82    68    (16)   180    48    37 
Gain on sale of loans   118    65    53    -    -    - 
Income on bank owned life insurance   551    184    184    572    188    192 
Mortgage loan income   288    97    80    163    59    71 
Other   522    171    223    448    145    155 
Total noninterest income   3,379    1,211    1,135    3,028    998    1,037 
                               
Noninterest expense                              
Salaries and employee benefits   15,897    5,029    5,019    14,434    4,951    4,843 
Occupancy expenses   2,361    780    769    2,329    857    740 
Equipment expenses   1,024    366    344    849    305    260 
FDIC assessment   599    195    198    550    185    164 
Data processing fees   1,467    482    499    1,466    501    477 
Amortization of intangibles   -    -    -    878    62    339 
Other real estate expenses, net   158    63    45    98    37    34 
Other operating expenses   4,338    1,376    1,313    4,611    1,641    1,528 
Total noninterest expense   25,844    8,291    8,187    25,215    8,539    8,385 
                               
Income before income taxes   12,629    4,900    4,595    10,530    3,335    3,626 
Income tax expense   2,298    945    813    2,687    919    692 
Net income  $10,331   $3,955   $3,782   $7,843   $2,416   $2,934 

 

 12 

 

 

COMMUNITY BANKERS TRUST CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

UNAUDITED

(Dollars in thousands)  Three months ended 
   30-Sep-18   30-Jun-18   31-Mar-18   31-Dec-17   30-Sep-17 
Interest and dividend income                         
Interest and fees on loans  $11,893   $11,353   $10,876   $10,625   $10,127 
Interest and fees on PCI loans   1,265    1,274    1,398    1,378    1,423 
Interest on federal funds sold   -    1    -    -    1 
Interest on deposits in other banks   94    69    40    53    65 
Interest and dividends on securities                         
  Taxable   1,364    1,266    1,186    1,105    1,171 
  Nontaxable   528    547    579    597    602 
Total interest and dividend income   15,144    14,510    14,079    13,758    13,389 
Interest expense                         
Interest on deposits   2,699    2,355    2,143    2,121    2,053 
Interest on borrowed funds   465    508    469    388    310 
Total interest expense   3,164    2,863    2,612    2,509    2,363 
                          
Net interest income   11,980    11,647    11,467    11,249    11,026 
                          
Provision for loan losses   -    -    -    400    150 
Net interest income after provision for loan losses   11,980    11,647    11,467    10,849    10,876 
                          
Noninterest income                         
Service charges and fees   626    611    581    572    558 
Gain (loss) on securities transactions, net   68    (16)   30    30    48 
Gain on sale of loans   65    53    -    -    - 
Income on bank owned life insurance   184    184    183    187    188 
Mortgage loan income   97    80    111    79    59 
Other   171    223    128    177    145 
Total noninterest income   1,211    1,135    1,033    1,045    998 
                          
Noninterest expense                         
Salaries and employee benefits   5,029    5,019    5,849    4,990    4,951 
Occupancy expenses   780    769    812    801    857 
Equipment expenses   366    344    314    295    305 
FDIC assessment   195    198    206    176    185 
Data processing fees   482    499    486    457    501 
Amortization of intangibles   -    -    -    20    62 
Other real estate expenses, net   63    45    50    64    37 
Other operating expenses   1,376    1,313    1,649    1,515    1,641 
Total noninterest expense   8,291    8,187    9,366    8,318    8,539 
                          
Income before income taxes   4,900    4,595    3,134    3,576    3,335 
Income tax expense   945    813    540    4,216    919 
Net income (loss)  $3,955   $3,782   $2,594   $(640)  $2,416 

 

 13 

 

  

COMMUNITY BANKERS TRUST CORPORATION

NET INTEREST MARGIN ANALYSIS

AVERAGE BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

 

    Three months ended September 30, 2018     Three months ended September 30, 2017  
    Average
Balance
Sheet
    Interest
Income /
Expense
    Average
Rates
Earned /
Paid
    Average
Balance
Sheet
    Interest
Income /
Expense
    Average
Rates
Earned /
Paid
 
ASSETS:                                                
Loans, including fees   $ 965,763     $ 11,893       4.89 %   $ 869,501     $ 10,127       4.62 %
PCI loans, including fees     39,614       1,265       12.49       47,358       1,423       11.76  
Total loans     1,005,377       13,158       5.19       916,859       11,550       5.00  
Interest bearing bank balances     15,244       94       2.45       18,333       65       1.40  
Federal funds sold     91       -       1.92       105       1       1.21  
Securities (taxable)     179,738       1,364       3.04       182,703       1,171       2.56  
Securities (tax exempt)(1)     73,985       669       3.62       86,106       912       4.24  
Total earning assets     1,274,435       15,285       4.76       1,204,106       13,699       4.51  
Allowance for loan losses     (9,219 )                     (9,523 )                
Non-earning assets     94,804                       89,935                  
 Total assets   $ 1,360,020                     $ 1,284,518                  
                                                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                                                
Demand - interest bearing   $ 284,407     $ 297       0.42     $ 280,253     $ 284       0.40  
Savings     94,487       62       0.26       90,774       60       0.26  
Time deposits     593,450       2,340       1.56       567,800       1,709       1.19  
Total interest bearing deposits     972,344       2,699       1.10       938,827       2,053       0.87  
Short-term borrowings     2,163       13       2.32       381       2       1.67  
FHLB and other borrowings     90,761       452       1.98       77,617       308       1.57  
Total interest bearing liabilities     1,065,268       3,164       1.18       1,016,825       2,363       0.92  
Noninterest bearing deposits     157,252                       138,330                  
Other liabilities     6,509                       5,395                  
Total liabilities     1,229,029                       1,160,550                  
Shareholders’ equity     130,991                       123,968                  
Total liabilities and shareholders’ equity   $ 1,360,020                     $ 1,284,518                  
                                                 
Net interest earnings           $ 12,121                     $ 11,336          
Interest spread                     3.58 %                     3.59 %
Net interest margin                     3.77 %                     3.74 %
Tax-equivalent adjustment:                                                
Securities           $ 140                     $ 310          

  

(1)Income and yields are reported on a tax-equivalent basis assuming a federal tax rate of 21% for 2018 and 34% for 2017.

 

 

 14 

 

 

COMMUNITY BANKERS TRUST CORPORATION

NET INTEREST MARGIN ANALYSIS

AVERAGE BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

 

    Nine months ended September 30, 2018     Nine months ended September 30, 2017
    Average
Balance
Sheet
    Interest
Income /
Expense
    Average
Rates
Earned /
Paid
    Average
Balance
Sheet
    Interest
Income /
Expense
    Average
Rates
Earned /
Paid
 
ASSETS:                                                
Loans, including fees   $ 956,109     $ 34,122       4.77 %   $ 856,465     $ 29,676       4.63 %
PCI loans,  including fees     41,366       3,937       12.55       49,117       4,355       11.69  
   Total loans     997,475       38,059       5.10       905,582       34,031       5.02  
Interest bearing bank balances     13,063       203       2.08       15,597       143       1.22  
Federal funds sold     79       1       1.80       97       1       1.08  
Securities (taxable)     177,039       3,816       2.87       182,724       3,577       2.61  
Securities (tax exempt)(1)     77,370       2,094       3.61       85,607       2,735       4.26  
Total earning assets     1,265,026       44,173       4.67       1,189,607       40,487       4.55  
Allowance for loan losses     (9,222 )                     (9,647 )                
Non-earning assets     91,994                       89,261                  
   Total assets   $ 1,347,798                     $ 1,269,221                  
                                                 

LIABILITIES AND SHAREHOLDERS’ EQUITY

                                               
Demand - interest bearing   $ 295,683     $ 957       0.43     $ 253,638     $ 579       0.31  
Savings     93,902       184       0.26       91,473       181       0.27  
Time deposits     568,983       6,056       1.42       580,346       5,016       1.16  
Total interest bearing deposits     958,568       7,197       1.00       925,457       5,776       0.83  
Short-term borrowings     3,091       50       2.17       994       9       1.21  
FHLB and other borrowings     99,773       1,392       1.84       84,072       905       1.44  
Total interest bearing liabilities     1,061,432       8,639       1.09       1,010,523       6,690       0.89  
Noninterest bearing deposits     152,740                       132,868                  
Other liabilities     5,992                       5,487                  
Total liabilities     1,220,164                       1,148,878                  
Shareholders’ equity     127,634                       120,343                  
Total liabilities and shareholders’ equity   $ 1,347,798                     $ 1,269,221                  
Net interest earnings           $ 35,534                     $ 33,797          
Interest spread                     3.58 %                     3.66 %
Net interest margin                     3.76 %                     3.80 %
                                                 
Tax-equivalent adjustment:                                                
Securities           $ 440                     $ 930          

  

(1)Income and yields are reported on a tax-equivalent basis assuming a federal tax rate of 21% for 2018 and 34% for 2017.

 

 15 

 

 

 

 

 

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