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	%

 

 

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.

 

  

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	%

  

  

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.

 

 

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.

 

  

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

 

  

 

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.

 

  

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.

 

 

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 

 

 

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

 

 

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

 

 

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

 

  

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.

 

 

 

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.