Exhibit 99.1

 

Community Bankers Trust Corporation

Reports Fourth Quarter and Annual Results for 2012

 

Glen Allen, VA, January 30, 2013 - Community Bankers Trust Corporation (the “Company”) (NYSE MKT: BTC), the holding company for Essex Bank (the “Bank”), today reported results for the fourth quarter of 2012 and the year ended December 31, 2012, including the following:

 

·

Net income for the fourth quarter of 2012 was $1.6 million compared with net income of $695,000 for the fourth quarter of 2011.

·

Net income for the year ended December 31, 2012 was $5.6 million compared with net income of $1.4 million for the year ended December 31, 2011.

·

Earnings per common share, fully diluted, were $0.06 in the fourth quarter of 2012 and were $0.21 for the full year 2012. This compares with $0.02 for the fourth quarter of 2011 and $0.02 for the year ended December 31, 2011, respectively.

·

Noninterest income increased by $2.5 million, or 50.9%, for the year ended December 31, 2012 compared with the year ended December 31, 2011.

·

Noninterest expense decreased by $3.2 million, or 8.9%, for the year ended December 31, 2012 compared with the year ended December 31, 2011.

·

In December, the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission terminated their written agreement with the Company and the Bank.

·

In August, the Company received regulatory approvals to pay its TARP dividend payment due in August, and paid, all five of its then remaining deferred TARP dividend payments and its current interest payment due on its trust preferred securities.  The total amount of the payments was $1.4 million, plus interest that had accrued.  The Company is current on its dividend and interest obligations.

 

Loan information, excluding loans covered by FDIC shared-loss agreements:

 

·

Gross loans increased $30.8 million, or 5.7%, for the year ended December 31, 2012 and $16.0 million, or 2.9%, for the fourth quarter of 2012.

·

Net charged-off loans decreased $8.8 million, or 72.4%, for the year ended December 31, 2012 and were $3.4 million, compared with $12.2 million for the year ended December 31, 2011.

·

Nonaccrual loans decreased $7.5 million, or 26.3%, for the year ended December 31, 2012 and $4.7 million, or 18.2%, for the fourth quarter of 2012.

·

Total nonperforming assets declined $8.4 million, or 20.7%, for the year ended December 31, 2012 and $5.4 million, or 14.2%, for the fourth quarter of 2012.

·

The ratio of the allowance for loan losses to nonaccrual loans was 61.4% at December 31, 2012 compared with 52.0% at December 31, 2011.

 

Rex L. Smith, III, President and Chief Executive Officer of the Company and the Bank, stated, “The fourth quarter results show the continued success of our business strategy and finalized a year of prominent accomplishments for the Company. Our goals for 2012 were to aggressively manage nonperforming assets, to continue to improve our core earnings, to pay all of the previously deferred TARP dividend payments and, if possible, to be released from the written agreement. Nonperforming assets decreased almost 21% during 2012 despite a continued sluggish economy. Earnings increased significantly year over year, driven by an increase in noninterest income and a significant decrease in noninterest expense. Because of the increase in net income, we were able to become current on all of our deferred TARP payments in the third quarter. Finally, we were completely released from our written agreement in December. The result of these efforts is reflected in our stock price, which improved 130% year over year.”

 

Smith continued, “While these goals were quite meaningful, we have set our sights on new and aggressive goals for 2013. We were able to grow our loan portfolio significantly in the fourth quarter and I believe that momentum will continue. In addition, we will strive to have our nonperforming assets at or below the levels of our peers by the end of the year. Lastly, we are working with the U.S. Treasury and our primary regulators on TARP principal repayment strategies that are non-dilutive to our shareholders. I am excited by what our team accomplished in 2012, but I am also positive that it was just the beginning of our goal to add significant value for our shareholders.”

 

 

RESULTS OF OPERATIONS

Net income was $1.6 million for the fourth quarter of 2012. This compares with net income of $695,000 in the fourth quarter of 2011 and net income of $1.8 million in the third quarter of 2012. Net income available to common stockholders was $1.3 million in the fourth quarter of 2012 compared with net income available to common stockholders of $423,000 in the fourth quarter of 2011 and net income available to common stockholders of $1.5 million in the third quarter of 2012. For the year ended December 31, 2012, net income was $5.6 million and net income available to common stockholders was $4.5 million, compared with net income of $1.4 million and net income available to common stockholders of $354,000 for the year ended December 31, 2011.

 

Net income available to common stockholders was $4.5 million, or $0.21 per common share on a diluted basis, for the year ended December 31, 2012 compared with net income available to common stockholders of $354,000, or $0.02 per common share on a diluted basis, for the year ended December 31, 2011. The increase of $4.1 million in net income available to common stockholders was driven by a decrease in noninterest expense of $3.2 million, or 8.9%, an increase in noninterest income of $2.5 million, or 50.9%, a reduction in provision for loan losses of $298,000 and an increase in net interest income of $220,000. This was offset by an increase in income tax expense of $2.1 million.

 

Net income available to common stockholders was $1.3 million, or $0.06 per common share on a diluted basis, for the quarter ended December 31, 2012 compared with net income available to common stockholders of $423,000, or $0.02 per common share on a diluted basis, for the quarter ended December 31, 2011. The increase in net income available to common stockholders of $874,000, or 206.6%, was driven by a reduction in noninterest expenses of $1.1 million and an increase in noninterest income of $631,000. This was offset by an increase in provision for loan losses of $450,000, a reduction in net interest income of $148,000 and an increase in income tax expense of $209,000.

 

The following table presents summary income statements for the three months ended December 31, 2012, September 30, 2012 and December 31, 2011 and the years ended December 31, 2012 and December 31, 2011.

 

SUMMARY INCOME STATEMENT

(Dollars in thousands)		For the three months ended												For the year ended
		December 31, 2012				September 30, 2012				December 31, 2011				December 31, 2012				December 31, 2011
Interest income		$	12,919			$	12,872			$	13,877			$	53,719			$	56,035
Interest expense			2,054				2,339				2,864				9,692				12,228
Net interest income			10,865				10,533				11,013				44,027				43,807
Provision for loan losses			450				-				-				1,200				1,498
Net interest income after provision
for loan losses			10,415				10,533				11,013				42,827				42,309
Noninterest income			(821	)			152				(1,452	)			(2,430	)			(4,951	)
Noninterest expense			7,573				8,039				8,627				32,667				35,854
Net income before income taxes			2,021				2,646				934				7,730				1,504
Income tax expense			(448	)			(837	)			(239	)			(2,148	)			(60	)
Net income			1,573				1,809				695				5,582				1,444
Dividends on preferred stock			221				221				221				884				884
Accretion of preferred stock discount			55				55				51				220				206
Net income per share available
to common stockholders		$	1,297			$	1,533			$	423			$	4,478			$	354
EPS Basic		$	0.06			$	0.07			$	0.02			$	0.21			$	0.02
EPS Diluted		$	0.06			$	0.07			$	0.02			$	0.21			$	0.02

 

 

Interest Income

Interest income was $12.9 million for the fourth quarter of 2012, an increase of $47,000, from the third quarter of 2012. Interest income on securities increased $101,000 on this linked quarter basis, which was partially offset by a $60,000 decline in interest and fees on loans.

 

Year over year, interest income declined $958,000, or 6.9%, when comparing the fourth quarters of 2012 and 2011. Interest income was $13.9 million in the fourth quarter of 2011 and declined to $12.9 million in the fourth quarter of 2012. Interest and fees on FDIC covered loans declined $1.4 million when comparing the fourth quarter of 2012 to the fourth quarter of 2011. This was due to a decrease of $11.9 million on the average balance of FDIC covered loans when comparing the fourth quarter of 2012 to the same period in 2011. Partially offsetting this decrease was improved interest and fees on loans, which increased $291,000, from $7.4 million in the fourth quarter of 2011 to $7.7 million in the fourth quarter of 2012. This was the result of an increase of $43.7 million, or 8.4%, in the average balance of non-covered loans from the fourth quarter of 2011 to the fourth quarter of 2012.

 

Interest income was $53.7 million for the year ended December 31, 2012, a decrease of $2.3 million from interest income of $56.0 million for the year ended December 31, 2011. Interest and fees on FDIC covered loans declined $3.5 million, from $17.6 million for the year ended December 31, 2011 to $14.1 million for the year ended December 31, 2012. Additionally, securities income declined $219,000, from $9.1 million for the year ended December 31, 2011 to $8.9 million for the year ended December 31, 2012. The tax-equivalent yield on investment securities declined from 3.28% for the year ended December 31, 2011 to 3.02% for the year ended December 31, 2012 as management repositioned a large portion of the portfolio into variable rate securities. Offsetting these decreases was an increase of $1.4 million in interest and fees on loans, from $29.3 million for the year ended December 31, 2011 to $30.7 million for the year ended December 31, 2012. The average balance of non-covered loans increased $45.2 million, or 8.8%, and was $556.1 million for the year ended December 31, 2012 compared with $510.9 million for the same period in 2011. The yield on the average balance of non-covered loans declined from 5.73% for the year ended December 31, 2011 to 5.51% for the year ended December 31, 2012.

 

Interest Expense

Interest expense was $2.1 million for the fourth quarter of 2012 compared with interest expense of $2.3 million in the third quarter of 2012. Average interest bearing liabilities increased $12.3 million, or 1.3%, during the quarter. However, the cost of interest bearing liabilities declined from 1.02% in the third quarter of 2012 to 0.88% in the fourth quarter of 2012. This resulted in a decrease of $285,000, or 12.2%, in the cost of interest bearing liabilities on a linked quarter basis. The continued decline in interest expense is the result of higher than projected demand deposit balances, which has allowed management to reprice both certificate of deposit maturities at lower rates and the renewal of $22.0 million in maturing FHLB advances at lower rates.

 

Year over year, interest expense declined $810,000, from $2.9 million in the fourth quarter of 2011 to $2.1 million in the fourth quarter of 2012. This 28.3% expense decline resulted from decreases in cost. The cost of interest bearing liabilities declined from 1.27% in the fourth quarter of 2011 to 0.88% in the fourth quarter of 2012. The cost of deposits declined similarly from 1.17% in the fourth quarter of 2011 to 0.85% for the fourth quarter of 2012. The cost of Federal Home Loan Bank (FHLB) and other borrowings also exhibited improvement, from 3.51% in the fourth quarter of 2011 to 1.39% in the fourth quarter of 2012. As a result of the opportunity to obtain these borrowings at lower rates, the Company increased the average balance of FHLB borrowings by $14.1 million during the year and the balance of FHLB borrowings at December 31, 2012 was $49.8 million.

 

Interest expense declined $2.5 million from $12.2 million for the year ended December 31, 2011 to $9.7 million for the year ended December 31, 2012. This decline of 20.7% was driven by a reduction in the cost of interest bearing liabilities from 1.36% for the year ended December 31, 2011 to 1.06% for the year ended December 31, 2012.

 

 

Net Interest Income

Net interest income was $10.9 million for the quarter ended December 31, 2012, compared with $10.5 million for the quarter ended September 30, 2012.  This represents an increase of $332,000, or 3.2%. On a tax equivalent basis, net interest income was $10.9 million for the fourth quarter of 2012 compared with tax equivalent net interest income of $10.6 million for the third quarter of 2012. The tax equivalent net interest margin increased from 4.32% in the third quarter of 2012 to 4.39% in the fourth quarter of 2012. This was due to an increase in net interest spread, from 4.25% to 4.34%, on a linked quarter basis.

 

Year over year, net interest income decreased $148,000, or 1.3%, from $11.0 million in the fourth quarter of 2011 to $10.9 million in the fourth quarter of 2012. This was primarily the result of a decrease in the Company’s interest spread, from 4.63% in the fourth quarter of 2011 to 4.34% in the fourth quarter of 2012. This decreased the Company’s net interest margin from 4.69% in the fourth quarter of 2011 to 4.39% for the same period in 2012.

 

Net interest income was $44.0 million for the year ended December 31, 2012, compared with $43.8 million for the year ended December 31, 2011.  This represents an increase in net interest income for 2012 of $220,000. A decline of $2.3 million in the yield on earning assets was virtually offset by a decline of $2.5 million in the cost of interest bearing liabilities, which resulted in the increase of 0.5% in net interest income. The tax equivalent net interest margin decreased from 4.72% for the year ended December 31, 2011 to 4.53% for the year ended December 31, 2012. This was driven by a decrease in interest spread from 4.66% in 2011 to 4.46% in 2012. Interest spread is the product of yield on earning assets less cost of total interest-bearing liabilities.

 

The following tables compare the Company’s net interest margin, on a tax-equivalent basis, for the three months ended December 31, 2012, September 30, 2012 and December 31, 2011 and for the years ended December 31, 2012 and December 31, 2011.

 

NET INTEREST MARGIN

(Dollars in thousands)		For the three months ended
		December 31, 2012				September 30, 2012				December 31, 2011
Average interest earning assets		$	996,023			$	981,090			$	947,751
Interest income		$	12,919			$	12,872			$	13,877
Interest income - tax equivalent		$	12,988			$	12,932			$	13,968
Yield on interest earning assets			5.22	%			5.27	%			5.90	%
Average interest bearing liabilities		$	927,856			$	915,514			$	900,610
Interest expense		$	2,054			$	2,339			$	2,864
Cost of interest bearing liabilities			0.88	%			1.02	%			1.27	%
Net interest income		$	10,865			$	10,533			$	11,013
Net interest income - tax equivalent		$	10,934			$	10,593			$	11,104
Interest spread			4.34	%			4.25	%			4.63	%
Net interest margin			4.39	%			4.32	%			4.69	%

 

		For the year ended
		December 31, 2012				December 31, 2011
Average interest earning assets		$	977,066			$	938,867
Interest income		$	53,719			$	56,035
Interest income - tax equivalent		$	53,971			$	56,563
Yield on interest earning assets			5.52	%			6.02	%
Average interest bearing liabilities		$	916,038			$	901,203
Interest expense		$	9,692			$	12,228
Cost of interest bearing liabilities			1.06	%			1.36	%
Net interest income		$	44,027			$	43,807
Net interest income - tax equivalent		$	44,279			$	44,335
Interest spread			4.46	%			4.66	%
Net interest margin			4.53	%			4.72	%

 

 

Provision for Loan Losses

The provision for loan losses was $450,000 for the quarter ended December 31, 2012 compared with no provision for the quarters ended September 30, 2012 and December 31, 2011. The provision for loan losses was $1.2 million for the year ended December 31, 2012 compared with $1.5 million for the year ended December 31, 2011.

 

The Company records a separate provision for loan losses for its non-covered loan portfolio and its FDIC covered loan portfolio. Only the non-covered portfolio had a provision for the fourth quarter of 2012. The provision for loan losses on non-covered loans was $1.5 million for the year ended December 31, 2012 compared with $1.5 million for the year ended December 31, 2011. The provision for loan losses on covered loans was a $250,000 credit for the year ended December 31, 2012, which was the result of improvement in expected losses on the Company’s FDIC covered portfolio, which the Company recognized in the first quarter of the year. There was no provision for the covered loan portfolio for the year ended December 31, 2011.

 

Noninterest Income

Noninterest income was negative $821,000 for the fourth quarter of 2012 compared with $152,000 for the third quarter of 2012.  The largest component of noninterest income was FDIC indemnification asset amortization, which reduces noninterest income, and was $1.5 million in the fourth quarter of 2012 and $1.6 million in the third quarter of 2012. Amortization of the FDIC indemnification asset is the result of better than expected performance on the covered loan portfolio. This better than expected performance also results in increased accretable yield and interest income on the covered portfolio. Loss on other real estate owned (OREO) was $660,000 in the fourth quarter of 2012 and $767,000 in the third quarter of 2012. Management proactively assesses OREO and as a result wrote down values by $477,000 in the third quarter of 2012 and $626,000 in the fourth quarter of 2012.

 

Noninterest income was positively affected by $138,000 in gains on sales of securities in the fourth quarter of 2012 and $1.2 million in gains on sales of securities in the third quarter of 2012. Also positively affecting noninterest income on a linked quarter basis was an increase in service charges on deposit accounts of $13,000, from $716,000 in the third quarter of 2012 to $729,000 in the fourth quarter of 2012. Other noninterest income declined $138,000 on a linked quarter basis and was $464,000 in the fourth quarter of 2012 compared with $602,000 in the third quarter of 2012. This decrease reflects fewer reimbursable loss events in FDIC covered loans.

 

Year over year, noninterest income increased $631,000, from negative $1.5 million in the fourth quarter of 2011, to negative $821,000 in the fourth quarter of 2012. FDIC indemnification asset amortization was the largest contributor to this increase, $1.1 million, and improved from negative $2.6 million in the fourth quarter of 2011 to negative $1.5 million for the same period in 2012. Service charges on deposit accounts increased $82,000, from $647,000 in the fourth quarter of 2011 to $729,000 for the same period in 2012. Offsetting these increases was an increase of $323,000 in loss on OREO. Loss on OREO was $337,000 in the fourth quarter of 2011 and $660,000 in the fourth quarter of 2012. Additionally, gains on sales of securities declined $168,000 year over year and were $306,000 in the fourth quarter of 2011 and $138,000 in the fourth quarter of 2012. Other noninterest income declined $71,000, from $535,000 in the fourth quarter of 2011 to $464,000 in the fourth quarter of 2012.

 

For the year ended December 31, 2012, noninterest income equaled negative $2.4 million, compared with negative $5.0 million for the year ended December 31, 2011. This improvement of $2.5 million was due to a reduction in FDIC indemnification asset amortization of $3.4 million, from $10.4 million for the year ended December 31, 2011 to $6.9 million for the same period in 2012. Also improving noninterest income performance was a $1.0 million reduction in loss on OREO, from a loss of $2.9 million for the year ended December 31, 2011 to a loss of $1.8 million for the same period in 2012. Service charges on deposit accounts increased 9.3%, or $233,000, from $2.5 million for the year ended December 31, 2011 to $2.7 million for the same period in 2012. Offsetting these increases was a decrease in gain on sale of securities of $1.4 million, from $2.9 million for the year ended December 31, 2011 to $1.5 million for the same period in 2012. Other noninterest income declined $800,000 for the year ended December 31, 2012 compared with the same period in 2011. Other noninterest income was $2.1 million for the year ended December 31, 2012 and $2.9 million for the year ended December 31, 2011.

 

 

Noninterest Expense

On a linked quarter basis, noninterest expenses totaled $7.6 million for the three months ended December 31, 2012 compared with $8.0 million for the quarter ended September 30, 2012, a decrease of $466,000, or 5.8%. FDIC assessment declined $331,000 on a linked quarter basis, the result of a change in the Bank’s risk classification and an adjustment in the amortization of the FDIC’s 2010 prepaid assessment. Data processing expenses declined $138,000 on a linked quarter basis and were $473,000 in the third quarter of 2012 and $335,000 in the fourth quarter of 2012. During the fourth quarter of 2012, the Company received a reimbursement of $177,000 from its third party core processor for indirect expenses related to processing delays as a result of Hurricane Sandy.

 

Noninterest expenses declined $1.1 million, or 12.2%, when comparing the fourth quarter of 2012 to the same period in 2011. FDIC assessment declined $538,000, from $575,000 in the fourth quarter of 2011 to $37,000 in the fourth quarter of 2012. Other operating expenses declined $176,000, from $1.7 million in the fourth quarter of 2011 to $1.5 million in the fourth quarter of 2012. Data processing fees declined $124,000 when comparing the fourth quarter of 2012 to the same period in 2011 and were $459,000 in the fourth quarter of 2011 and $335,000 in the fourth quarter of 2012. Salaries and employee benefits declined $110,000 year over year, from $4.2 million in the fourth quarter of 2011 to $4.1 million in the fourth quarter of 2012.

 

For the year ended December 31, 2012, noninterest expenses declined $3.2 million, or 8.9%, when compared with the same period in 2011. Noninterest expenses were $35.9 million for the year ended December 31, 2011 and declined to $32.7 million for the same period in 2012. FDIC assessment exhibited the largest category decrease, $1.3 million, and was $2.8 million for the year ended December 31, 2011 compared with $1.5 million for the same period in 2012, a decrease of 46.7%. Other operating expenses were $6.3 million and declined $838,000 from $7.2 million for the year ended December 31, 2011. Additional declines for the year ended December 31, 2012 compared with the year ended December 31, 2011 were $393,000 in legal fees, $192,000 in professional fees, $179,000 in occupancy expenses, $150,000 in equipment expenses, $92,000 in salaries and employee benefits and $40,000 in data processing fees. The decrease in legal fees and professional fees were primarily a reflection of improved credit quality. Other improvements reflect a concerted effort on the part of management to drive overhead expenses lower.

 

Income Taxes

Income tax expense was $448,000 for the three months ended December 31, 2012, compared with income tax expense of $837,000 in the third quarter of 2012. Income tax expense was $239,000 in the fourth quarter of 2011. For the year ended December 31, 2012, income tax expense was $2.1 million compared with income tax expense of $60,000 for the year ended December 31, 2011.

 

FINANCIAL CONDITION

At December 31, 2012, the Company had total assets of $1.153 billion, an increase of $60.8 million, or 5.6%, from total assets of $1.092 billion at December 31, 2011. Total loans were $660.1 million at December 31, 2012, increasing $17.8 million, or 2.8%, from $642.3 million at December 31, 2011.   The carrying value of FDIC covered loans declined $12.9 million, or 13.2%, from December 31, 2011 and was $84.6 million at December 31, 2012. Non-covered loans equaled $575.5 million at December 31, 2012, increasing $30.8 million, or 5.6%, since December 31, 2011.  

 

Non-covered loans, net of unearned income, increased $15.9 million, or 2.9%, during the fourth quarter of 2012. Multifamily loans exhibited the largest dollar increase, $6.7 million, or 30.3%, and ended the year at $28.7 million. Commercial real estate loans increased $4.8 million, or 2.0%, and were $246.5 million at December 31, 2012. Residential 1-4 family loans grew $4.2 million, or 3.2%, in the fourth quarter of 2012, and were $135.4 million at December 31, 2012. Commercial loans grew $4.4 million, or 6.0%, during the fourth quarter of 2012 and were $77.8 million at December 31, 2102.

 

 

The following table shows the composition of the Company’s non-covered loan portfolio at December 31, 2012, September 30, 2012 and December 31, 2011.

 

NON-COVERED LOANS

(Dollars in thousands)		December 31, 2012								September 30, 2012								December 31, 2011
		Amount				% of Non-Covered Loans				Amount				% of Non-Covered Loans				Amount				% of Non-Covered Loans
Mortgage loans on real estate:
Residential 1-4 family		$	135,420				23.53	%		$	131,192				23.44	%		$	127,200				23.34	%
Commercial			246,521				42.83	%			241,692				43.18	%			220,471				40.46	%
Construction and land development			61,127				10.62	%			64,304				11.49	%			75,691				13.89	%
Second mortgages			7,230				1.26	%			7,569				1.35	%			8,129				1.49	%
Multifamily			28,683				4.98	%			22,018				3.93	%			19,746				3.62	%
Agriculture			10,359				1.80	%			10,527				1.88	%			11,444				2.10	%
Total real estate loans			489,340				85.01	%			477,302				85.27	%			462,681				84.90	%
Commercial loans			77,835				13.52	%			73,415				13.12	%			72,149				13.24	%
Consumer installment loans			6,929				1.20	%			7,442				1.33	%			8,461				1.55	%
All other loans			1,526				0.27	%			1,565				0.28	%			1,659				0.31	%
Gross loans			575,630				100.00	%			559,724				100.00	%			544,950				100.00	%
Allowance for loan losses			(12,920	)							(14,303	)							(14,835	)
Net unearned income/unamortized
premium on loans			(148	)							(192	)							(232	)
Non-covered loans, net of unearned income		$	562,562							$	545,229							$	529,883

 

 

The Company’s securities portfolio, including equity securities, increased $54.7 million, or 18.0%, during the year ended December 31, 2012, to $358.8 million, with realized gains of $1.5 million, through sales activity. These net gains were taken during the year in a portfolio repositioning strategy to mitigate interest rate risk in a higher rate environment. In a higher rate environment, the liquidity of fixed rate securities is compromised and interest rate risk increases. The Company has shifted from mortgage-backed securities balances to floating rate securities issued by the Small Business Administration (SBA) and high quality state, county and municipalities. Additionally, the Company took a short-term position in a $40 million U.S. Treasury issue at December 31, 2012 to fully invest excess cash and due balances.

 

The fair value of available-for-sale mortgage backed securities and available-for-sale mortgage backed securities of U.S. Government sponsored agencies declined by $127.6 million during 2012. Balances in U.S. Treasury and U.S. Government agencies increased $145.9 million as the Company enacted its strategy of buying SBA floating rate securities as a tool to mitigate interest and liquidity risks in a higher rate environment. Also, balances in available-for-sale municipal bonds increased by $55.6 million.

 

On a linked quarter basis, the Company’s securities portfolio, including equity securities, increased $46.3 million, from $312.4 million at September 30, 2012 to $358.8 million at December 31, 2012. There were $138,000 in gains realized during the fourth quarter. 

 

The Company had cash and cash equivalents of $24.1 million at December 31, 2012 compared with $21.8 million at December 31, 2011. There were $5.4 million in Federal funds purchased at December 31, 2012 compared with no Federal funds sold or purchased at December 31, 2011. 

 

 

The following table shows the composition of the Company’s securities portfolio, excluding equity securities, at December 31, 2012, September 30, 2012 and December 31, 2011.

 

SECURITIES PORTFOLIO

(Dollars in thousands)		December 31, 2012								September 30, 2012								December 31, 2011
		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		$	153,480			$	153,277			$	111,523			$	110,899			$	7,255			$	7,414
U.S. Government sponsored agencies			500				503				502				509				1,005				1,033
State, county and municipal			112,110				117,596				100,847				105,738				58,183				62,043
Corporate and other bonds			7,530				7,618				6,535				6,608				4,801				4,631
Mortgage backed securities (MBS)			15,192				15,560				16,888				17,236				73,616				74,093
MBS - U.S. Government sponsored agencies			14,349				14,524				15,422				15,404				82,966				83,550
Total securities available for sale		$	303,161			$	309,078			$	251,717			$	256,394			$	227,826			$	232,764

 

		December 31, 2012								September 30, 2012								December 31, 2011
		Amortized Cost				Fair Value				Amortized Cost				Fair Value				Amortized Cost				Fair Value
Securities Held to Maturity
State, county and municipal		$	11,825			$	12,967			$	11,832			$	13,054			$	12,168			$	13,479
Mortgage backed securities (MBS)			9,112				9,727				10,099				10,820				12,743				13,565
MBS - U.S. Government sponsored agencies			21,346				22,534				26,758				28,139				39,511				41,541
Total securities held to maturity		$	42,283			$	45,228			$	48,689			$	52,013			$	64,422			$	68,585

 

Interest bearing deposits at December 31, 2012 were $896.3 million, an increase of $27.8 million from December 31, 2011. Time deposits $100,000 and over increased $47.2 million during the year ended December 31, 2012 as management obtained $41.0 million in low cost brokered and municipal certificates. Low cost NOW accounts increased $14.2 million, or 11.0%, during 2012 and $25.8 million, or 22.0%, during the fourth quarter. Savings deposits increased $7.6 million during the year ended December 31, 2012. Time deposits less than $100,000 decreased $39.0 million during 2012 as the availability of low cost funds $100,000 and over allowed management to lower rates on retail certificates. MMDA accounts declined $2.2 million during the year ended December 31, 2012 and were $113.2 million.

 

The following table compares the mix of interest bearing deposits for December 31, 2012, September 30, 2012 and December 31, 2011.

 

INTEREST BEARING DEPOSITS

(Dollars in thousands)
		December 31, 2012				September 30, 2012				December 31, 2011
NOW		$	142,923			$	117,120			$	128,758
MMDA			113,171				113,288				115,397
Savings			77,506				76,499				69,872
Time deposits less than $100,000			287,422				292,374				326,383
Time deposits $100,000 and over			275,318				263,087				228,128
Total interest bearing deposits		$	896,340			$	862,368			$	868,538

 

 

The Company had FHLB advances of $49.8 million at December 31, 2012 and $37.0 million at December 31, 2011. During the third quarter of 2012, the Company obtained an additional $13.0 million in FHLB advances, as well as rolling over $22.0 million in maturing advances at much lower rates than was being carried prior to their maturities during the quarter. The Company anticipates that the repricing on the $37.0 million will result in approximately $480,000 in after tax savings and that net after tax savings on total FHLB borrowings will be approximately $370,000.

 

Stockholders’ equity was $115.3 million at December 31, 2012 and $111.2 million at December 31, 2011. The equity-to-asset ratios were 10.0% at December 31, 2012 and 10.2% at December 31, 2011. Stockholders’ equity was $113.1 million at September 30, 2012.

 

Asset Quality – non-covered assets

Nonaccrual loans were $21.0 million at December 31, 2012, compared with $25.7 million at September 30, 2012 and $28.5 million at December 31, 2011. The decrease from September 30, 2012 was comprised of $3.0 million in additions to nonaccrual loans, $4.6 million of loans returning to accrual status due to satisfactory payment performance, $1.9 million in charge-offs, $82,000 in foreclosures and $1.4 million in payments to existing loans on nonaccrual.

 

Total nonperforming assets decreased $5.4 million, from $37.7 million at September 30, 2012 to $32.4 million at December 31, 2012. Total nonperforming assets also decreased $8.4 million, or 20.7%, from total nonperforming assets of $40.8 million at December 31, 2011. 

 

There were net charge-offs of $1.8 million in the fourth quarter of 2012 and $3.4 million for the year ended December 31, 2012.  Total charge-offs for the fourth quarter of 2012 were $2.0 million and recoveries of previously charged-off loans for the same period were $141,000.  Total charge-offs for the year ended December 31, 2012 were $5.5 million and recoveries of previously charged-off loans for the same period were $2.1 million.

 

Non-covered OREO decreased $1.1 million in the fourth quarter of 2012 and was $10.8 million at December 31, 2012. The change in non-covered OREO during the fourth quarter of 2012 was reflected in additions of $425,000, reductions by sales of $900,000 and write-downs of $626,000.  Non-covered OREO of $10.8 million at December 31, 2012 was $541,000 higher than at December 31, 2011.

 

The allowance for loan losses equaled 61.38% of non-covered nonaccrual loans at December 31, 2012, compared with 55.59% of non-covered nonaccrual loans at September 30, 2012 and 51.98% at December 31, 2011. The ratio of the allowance for loan losses to total nonperforming assets was 39.94% at December 31, 2012, compared with 37.93% at September 30, 2012 and 36.36% at December 31, 2011.  Nonperforming assets to loans and other real estate have declined from 7.35% at December 31, 2011 to 5.52% at December 31, 2012.

 

 

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

 

CREDIT QUALITY                

(Dollars in thousands)		2012				2012				2012				2012				2011
		Fourth				Third				Second				First				Fourth
		Quarter				Quarter				Quarter				Quarter				Quarter
Allowance for loan losses:
Beginning of period		$	14,303			$	13,526			$	13,935			$	14,835			$	15,764
Provision for loan losses			450				-				500				500				-
Charge-offs			(1,974	)			(819	)			(1,147	)			(1,557	)			(969	)
Recoveries			141				1,596				238				157				40
Net (charge-offs) recovery			(1,833	)			777				(909	)			(1,400	)			(929	)
End of period		$	12,920			$	14,303			$	13,526			$	13,935			$	14,835

 

 

The following table sets forth selected asset quality data, excluding FDIC covered assets, and ratios for the dates indicated:

 

 

ASSET QUALITY (NON-COVERED)

(Dollars in thousands)		2012																2011
		December				September				June				March				December
		31				30				30				31				31
Nonaccruing loans		$	21,048			$	25,730			$	25,168			$	25,601			$	28,542
Loans past due over 90 days and accruing interest			509				85				-				403				2,005
Total nonperforming non-covered loans			21,557				25,815				25,168				26,004				30,547
Other real estate owned non-covered			10,793				11,896				11,869				12,696				10,252
Total nonperforming non-covered assets		$	32,350			$	37,711			$	37,037			$	38,700			$	40,799
Allowance for loan losses to loans			2.25	%			2.56	%			2.46	%			2.54	%			2.72	%
Allowance for loan losses to nonperforming assets			39.94	%			37.93	%			36.52	%			36.01	%			36.36	%
Allowance for loan losses to nonaccrual loans			61.38	%			55.59	%			53.74	%			54.43	%			51.98	%
Nonperforming assets to loans and other real estate			5.52	%			6.60	%			6.60	%			6.89	%			7.35	%
Net charge-offs/(recovery) for quarter to average loans, annualized			1.30	%			(0.56	%)			0.66	%			1.02	%			0.71	%

 

 

 

A further breakout of nonaccrual loans, excluding covered loans, at December 31, 2012, September 30, 2012 and December 31, 2011 is below:

 

NON-COVERED NONACCRUAL LOANS

(Dollars in thousands)		December 31, 2012								September 30, 2012								December 31, 2011
		Amount				% of Non-Covered Loans				Amount				% of Non-Covered Loans				Amount				% of Non-Covered Loans
Mortgage loans on real estate:
Residential 1-4 family		$	5,562				0.97	%		$	5,474				0.98	%		$	5,320				0.98	%
Commercial			5,818				1.01	%			8,916				1.59	%			9,187				1.69	%
Construction and land development			8,814				1.53	%			10,318				1.84	%			12,718				2.33	%
Second mortgages			141				0.02	%			140				0.03	%			189				0.03	%
Multifamily			-				-				-				-				-				-
Agriculture			250				0.04	%			54				0.01	%			53				0.01	%
Total real estate loans			20,585				3.58	%			24,902				4.45	%			27,467				5.04	%
Commercial loans			385				0.07	%			703				0.13	%			1,003				0.18	%
Consumer installment loans			78				0.01	%			125				0.02	%			72				0.01	%
All other loans			-				-				-				-				-				-
Gross loans		$	21,048				3.66	%		$	25,730				4.60	%		$	28,542				5.24	%

 

 

Capital Requirements

Total stockholders’ equity was $115.3 million at December 31, 2012. The Company’s ratio of total risk-based capital was 16.9% at December 31, 2012 compared to 16.2% at December 31, 2011. The tier 1 risk-based capital ratio was 15.7% at December 31, 2012 and 15.0% at December 31, 2011. The Company’s tier 1 leverage ratio was 9.4% at December 31, 2012 and 8.9% at December 31, 2011.  All capital ratios exceed regulatory minimums.

 

 

 

 

About Community Bankers Trust Corporation

 

The Company is the holding company for Essex Bank, a Virginia state bank with 24 full-service offices, 13 of which are in Virginia, seven of which are in Maryland and four of which are in Georgia. The Company also operates one loan production office. Additional information is available on the Company’s website at www.cbtrustcorp.com.

 

Earnings Conference Call and Webcast

 

The Company will host a conference call for the financial community on Wednesday, January 30, 2013, at 10:00 a.m. Eastern Time to discuss the fourth quarter and year 2012 financial results. The public is invited to listen to this conference call by dialing 800-860-2442 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 1:00 p.m. Eastern Time on January 30, 2013 until 9:00 a.m. Eastern Time on February 11, 2013. The replay will be available by dialing 877-344-7529 and entering access code 10024161 or through the internet by accessing the “Corporate Overview – Corporate Profile” page of the Company’s internet site 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 ability of the Company to comply with regulatory actions, and the costs associated with doing so; 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 Company’s compliance with, and the timing of future reimbursements from the FDIC to the Company under, the shared loss agreements; assumptions and estimates that underlie the accounting for loan pools under the shared loss agreements; consumer profiles and spending and savings habits; the securities and credit markets; costs associated with the integration of banking and other internal operations; management’s evaluation of goodwill and other assets on a periodic basis, and any resulting impairment charges, under applicable accounting standards; 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, 2011 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 

 

 

Consolidated Statements of Financial Condition

Unaudited Condensed

(Dollars in thousands)
		December 31, 2012				September 30, 2012				December 31, 2011
Assets
Cash and due from banks		$	12,502			$	15,116			$	11,078
Interest bearing bank deposits			11,635				17,298				10,763
Federal funds sold			-				5,000				-
Total cash and cash equivalents			24,137				37,414				21,751
Securities available for sale, at fair value			309,078				256,394				232,764
Securities held to maturity			42,283				48,689				64,422
Equity securities, restricted, at cost			7,405				7,351				6,872
Total securities			358,766				312,434				304,058
Loans held for resale			1,266				1,736				580
Loans not covered by FDIC shared loss agreements			575,482				559,532				544,718
Loans covered by FDIC shared loss agreements			84,637				89,121				97,561
Allowance for loan losses (non-covered)			(12,920	)			(14,303	)			(14,835	)
Allowance for loan losses (covered)			(484	)			(456	)			(776	)
Net loans			646,715				633,894				626,668
Bank premises and equipment			33,638				34,002				35,084
Other real estate owned			10,793				11,896				10,252
Covered FDIC other real estate owned			3,370				2,943				5,764
FDIC receivable			895				715				1,780
Bank owned life insurance			15,146				15,008				14,592
Core deposit intangibles, net			10,296				10,863				12,558
FDIC indemnification asset			33,837				36,191				42,641
Other assets			14,429				15,181				16,768
Total assets		$	1,153,288			$	1,112,277			$	1,092,496
Liabilities
Deposits:
Noninterest bearing		$	77,978			$	78,388			$	64,953
Interest bearing			896,340				862,368				868,538
Total deposits			974,318				940,756				933,491
Federal funds purchased			5,412				-				-
Federal Home Loan Bank advances			49,828				50,000				37,000
Trust preferred capital notes			4,124				4,124				4,124
Other liabilities			4,289				4,259				6,701
Total liabilities			1,037,971				999,139				981,316
Stockholders' Equity
Preferred stock (5,000,000 shares authorized $0.01 par value) 17,680 shares issued and outstanding			17,680				17,680				17,680
Discount on preferred stock			(234	)			(289	)			(454	)
Warrants on preferred stock			1,037				1,037				1,037
Common stock (200,000,000 shares authorized $0.01 par value; 21,670,212 shares issued and outstanding at December 31, 2012)			217				217				216
Additional paid in capital			144,398				144,351				144,243
(Accumulated deficit) retained earnings			(50,609	)			(51,906	)			(53,761	)
Accumulated other comprehensive income			2,828				2,048				2,219
Total stockholders' equity			115,317				113,138				111,180
Total liabilities and stockholders' equity		$	1,153,288			$	1,112,277			$	1,092,496

 

 

Consolidated Statements of Operations

Unaudited Condensed

(Dollars in thousands)		Three months ended																Three months ended
		December 31, 2012				September 30, 2012				June 30, 2012				March 31, 2012				December 31, 2011
Interest and dividend income
Interest and fees on loans		$	7,687			$	7,710			$	7,574			$	7,687			$	7,396
Interest and fees on FDIC covered loans			2,894				2,931				4,366				3,914				4,251
Interest on federal funds sold			1				-				3				1				1
Interest on deposits in other banks			14				9				19				12				13
Investments (taxable)			2,189				2,103				2,039				2,077				2,036
Investments (nontaxable)			134				119				118				118				180
Total interest income			12,919				12,872				14,119				13,809				13,877
Interest expense
Interest on deposits			1,858				2,056				2,241				2,353				2,504
Interest on federal funds purchased			3				3				3				-				-
Interest on other borrowed funds			193				280				343				359				360
Total interest expense			2,054				2,339				2,587				2,712				2,864
Net interest income			10,865				10,533				11,532				11,097				11,013
Provision for loan losses			450				-				500				250				-
Net interest income after provision for loan losses			10,415				10,533				11,032				10,847				11,013
Noninterest income
Loss on OREO			(660	)			(767	)			(229	)			(177	)			(337	)
FDIC indemnification asset amortization			(1,492	)			(1,579	)			(1,983	)			(1,882	)			(2,603	)
Gain/(loss) on sale of securities			138				1,180				290				(116	)			306
Service charges on deposit accounts			729				716				674				617				647
Other			464				602				544				501				535
Total noninterest income			(821	)			152				(704	)			(1,057	)			(1,452	)
Noninterest expense
Salaries and employee benefits			4,068				4,028				4,177				4,238				4,178
Occupancy expenses			691				708				685				631				660
Equipment expenses			256				266				270				295				298
Legal fees			9				3				15				24				63
Professional fees			84				74				148				85				126
FDIC assessment			37				368				496				584				575
Data processing fees			335				473				499				517				459
Amortization of intangibles			566				565				565				565				565
Other operating expenses			1,527				1,554				1,790				1,471				1,703
Total noninterest expense			7,573				8,039				8,645				8,410				8,627
Net income before income taxes			2,021				2,646				1,683				1,380				934
Income tax expense			(448	)			(837	)			(473	)			(390	)			(239	)
Net income			1,573				1,809				1,210				990				695
Dividends on preferred stock			221				221				221				221				221
Accretion of discount on preferred stock			55				55				55				55				51
Net income available to common
stockholders		$	1,297			$	1,533			$	934			$	714			$	423

 

 

Income Statement Trend Analysis

Unaudited Condensed

(Dollars in thousands)		Year ended
		December 31,				December 31,				December 31,
		2012				2011				2010
Interest and dividend income
Interest and fees on loans		$	30,658			$	29,272			$	33,444
Interest and fees on FDIC covered loans			14,105				17,576				13,759
Interest on federal funds sold			5				6				9
Interest on deposits in other banks			54				65				100
Investments (taxable)			8,408				8,091				8,486
Investments (nontaxable)			489				1,025				3,128
Total interest income			53,719				56,035				58,926
Interest expense
Interest on deposits			8,508				10,815				17,041
Interest on federal funds purchased			9				1				3
Interest on other borrowed funds			1,175				1,412				1,345
Total interest expense			9,692				12,228				18,389
Net interest income			44,027				43,807				40,537
Provision for loan losses			1,200				1,498				27,363
Net interest income after provision for loan losses			42,827				42,309				13,174
Noninterest income
Loss on OREO			(1,833	)			(2,869	)			(5,052	)
FDIC indemnification asset amortization			(6,936	)			(10,364	)			(3,165	)
Gains on sale of securities			1,492				2,868				3,588
Service charges on deposit accounts			2,736				2,503				2,464
Other			2,111				2,911				3,809
Total noninterest income			(2,430	)			(4,951	)			(1,644	)
Noninterest expense
Salaries and employee benefits			16,511				16,603				19,190
Occupancy expenses			2,715				2,894				2,948
Equipment expenses			1,087				1,237				1,394
Legal fees			51				444				456
Professional fees			391				583				1,802
FDIC assessment			1,485				2,788				2,395
Data processing fees			1,824				1,864				2,306
Amortization of intangibles			2,261				2,261				2,261
Impairment of goodwill			-				-				5,727
Other operating expenses			6,342				7,180				6,774
Total noninterest expense			32,667				35,854				45,253
Net income/(loss) before income tax			7,730				1,504				(30,435	)
Income tax (expense) benefit			(2,148	)			(60	)			9,442
Net income/(loss)			5,582				1,444				(20,993	)
Dividends on preferred stock			884				884				884
Accretion of discount on preferred stock			220				206				194
Net income/(loss) available to common stockholders		$	4,478			$	354			$	(22,071	)

 

 

Net Interest Margin Analysis

Average Balance Sheet

(Dollars in thousands)

		Three months ended December 31, 2012												Three months ended December 31, 2011
		Average Balance Sheet				Interest Income / Expense				Average Rates Earned / Paid				Average Balance Sheet				Interest Income / Expense				Average Rates Earned / Paid
ASSETS:
Loans, including fees		$	564,926			$	7,687				5.44	%		$	521,194			$	7,396				5.68	%
Loans covered by FDIC loss share			86,415				2,894				13.40	%			98,283				4,251				17.30	%
Total loans			651,341				10,581				6.50	%			619,477				11,647				7.52	%
Interest bearing bank balances			23,636				14				0.25	%			26,961				13				0.20	%
Federal funds sold			2,641				1				0.11	%			1,739				1				0.10	%
Investments (taxable)			302,949				2,189				2.89	%			280,771				2,036				2.90	%
Investments (tax exempt) (1)			15,456				203				5.25	%			18,803				271				5.76	%
Total earning assets			996,023				12,988				5.22	%			947,751				13,968				5.90	%
Allowance for loan losses			(14,323	)											(15,983	)
Non-earning assets			141,492												151,277
Total assets		$	1,123,192											$	1,083,045
LIABILITIES AND
STOCKHOLDERS' EQUITY
Demand - interest bearing		$	240,391			$	189				0.31	%		$	235,291			$	284				0.48	%
Savings			77,484				58				0.30	%			69,480				82				0.47	%
Time deposits			552,926				1,611				1.17	%			554,713				2,138				1.54	%
Total interest-bearing deposits			870,801				1,858				0.85	%			859,484				2,504				1.17	%
Fed funds purchased			1,833				3				0.51	%			2				-				0.71	%
FHLB and other borrowings			55,222				193				1.39	%			41,124				360				3.51	%
Total interest-bearing liabilities			927,856				2,054				0.88	%			900,610				2,864				1.27	%
Non-interest bearing deposits			76,154												66,111
Other liabilities			4,216												5,434
Total liabilities			1,008,226												972,155
Stockholders' equity			114,966												110,890
Total liabilities and
stockholders' equity		$	1,123,192											$	1,083,045
Net interest earnings						$	10,934											$	11,104
Interest spread											4.34	%											4.63	%
Net interest margin											4.39	%											4.69	%

  

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

 

  

Net Interest Margin Analysis

Average Balance Sheet

(Dollars in thousands)

		Year ended December 31, 2012												Year ended December 31, 2011
		Average Balance Sheet				Interest Income / Expense				Average Rates Earned / Paid				Average Balance Sheet				Interest Income / Expense				Average Rates Earned / Paid
ASSETS:
Loans, including fees		$	556,113			$	30,658				5.51	%		$	510,940			$	29,272				5.73	%
Loans covered by FDIC loss share			91,489				14,105				15.42	%			104,558				17,576				16.81	%
Total loans			647,602				44,763				6.91	%			615,498				46,848				7.61	%
Interest bearing bank balances			22,425				54				0.24	%			25,678				65				0.26	%
Federal funds sold			4,254				5				0.11	%			4,036				6				0.14	%
Investments (taxable)			289,617				8,408				2.90	%			266,887				8,091				3.03	%
Investments (tax exempt) (1)			13,168				741				5.63	%			26,768				1,553				5.80	%
Total earning assets			977,066				53,971				5.52	%			938,867				56,563				6.02	%
Allowance for loan losses			(14,601	)											(19,614	)
Non-earning assets			145,507												160,217
Total assets		$	1,107,972											$	1,079,470
LIABILITIES AND
STOCKHOLDERS' EQUITY
Demand - interest bearing		$	238,418			$	859				0.36	%		$	234,180			$	1,323				0.56	%
Savings			74,129				256				0.35	%			67,469				347				0.51	%
Time deposits			556,784				7,393				1.33	%			558,239				9,145				1.64	%
Total interest-bearing deposits			869,331				8,508				0.98	%			859,888				10,815				1.26	%
Fed funds purchased			1,348				9				0.64	%			191				1				0.63	%
FHLB and other borrowings			45,359				1,175				2.59	%			41,124				1,412				3.43	%
Total interest-bearing liabilities			916,038				9,692				1.06	%			901,203				12,228				1.36	%
Non-interest bearing deposits			72,391												64,150
Other liabilities			4,532												4,998
Total liabilities			992,961												970,351
Stockholders' equity			115,011												109,119
Total liabilities and stockholders’
equity		$	1,107,972											$	1,079,470
Net interest earnings						$	44,279											$	44,335
Interest spread											4.46	%											4.66	%
Net interest margin											4.53	%											4.72	%

 

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

 

 

Non-GAAP Financial Measures

 

The information below presents certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). Common tangible book value equals total stockholders’ equity less preferred stock, goodwill and identifiable intangible assets, and common tangible book value per share is computed by dividing common tangible book value by the number of common shares outstanding. Common tangible assets equal total assets less preferred stock, goodwill and identifiable intangible assets.

 

Management believes that common tangible book value and the ratio of common tangible book value to common tangible assets are meaningful because they are some of the measures that the Company and investors use to assess capital adequacy. Management believes that presenting the change in common tangible book value per share, the change in stock price to common tangible book value per share, and the change in the ratio of common tangible book value to common tangible assets provide meaningful period-to-period comparisons of these measures.

 

These measures are a supplement to GAAP used to prepare the Company’s financial statements and should not be viewed as a substitute for GAAP measures. In addition, the Company’s non-GAAP measures may not be comparable to non-GAAP measures of other companies. The following table reconciles these non-GAAP measures from their respective GAAP basis measures.

 

 

		December 31, 2012				September 30, 2012				December 31, 2011
Common Tangible Book Value
Total stockholder's equity			115,317,000				113,138,000				111,118,000
Preferred stock (net)			18,483,000				18,428,000				18,263,000
Core deposit intangible (net)			10,296,000				10,862,000				12,558,000
Common tangible book value			86,538,000				83,848,000				80,297,000
Shares outstanding			21,670,212				21,656,951				21,627,549
Common tangible book value per share		$	3.99			$	3.87			$	3.71
Stock Price		$	2.65			$	2.80			$	1.15
Price/common tangible book			66.4	%			72.3	%			31.0	%
Common tangible book/common tangible assets
Total assets			1,153,288,000				1,112,277,000				1,092,496,000
Preferred stock (net)			18,483,000				18,428,000				18,263,000
Core deposit intangible			10,296,000				10,863,000				12,558,000
Common tangible assets			1,124,509,000				1,082,987,000				1,061,675,000
Common tangible book			86,538,841				83,848,000				80,297,000
Common tangible equity to assets			7.70	%			7.74	%			7.56	%