Community Bankers Trust Corporation Reports Results for Third Quarter of 2019

RICHMOND, Va., Oct. 25, 2019 /PRNewswire/ -- Community Bankers Trust Corporation (the "Company") (NASDAQ: ESXB), the holding company for Essex Bank (the "Bank"), today reported results for the third quarter and first nine months of 2019.

Income Statement- Three Months ended September 30, 2019 compared with Three Months ended June 30, 2019

• Net income of $4.6 million for the third quarter of 2019 is an increase of $1.1 million, or 30.2%, on a linked quarter basis.
• Net interest income increased $1.4 million, or 11.8%.
• Net interest margin was 4.02% in the third quarter of 2019, driven by an increase of $1.1 million in interest income on the purchased credit impaired ("PCI") portfolio, compared with a net interest margin of 3.69% the previous quarter.
• There was no provision for loan losses in the third quarter of 2019 compared with $125,000 in the second quarter of 2019.
• Basic earnings per common share were $0.21 in third quarter compared with $0.16 in the second quarter.
• Return on average assets, annualized, was 1.29% and return on average equity, annualized, was 12.24% in the third quarter.

Income Statement- Nine Months ended September 30, 2019 compared with Nine Months ended September 30, 2018

• Net income of $11.7 million is an increase of $1.3 million, or 12.9%.
• Interest and dividend income of $49.2 million is an increase of $5.4 million, or 12.4%.
• Interest and fees on loans increased $4.1 million, or 12.1%.
• Net interest income increased $2.5 million, or 7.0%.
• Return on average assets, annualized, was 1.10% and return on average equity, annualized, was 10.71% for the first nine months of 2019.

Income Statement- Three Months ended September 30, 2019 compared with Three Months ended September 30, 2018

• Net income of $4.6 million for the third quarter of 2019 is an increase year over year of $658,000, or 16.6%.
• Interest and dividend income increased $2.3 million, or 15.3%, in the third quarter of 2019 over the same period in 2018, led by interest and fees on loans, which increased $1.3 million, or 10.9%.
• Net interest income increased $1.4 million, or 12.0%, year over year.
• Noninterest income increased by $300,000, or 24.8%.

Balance Sheet- Year-over-Year September 30, 2019 compared with September 30, 2018

• Loans grew $72.1 million, or 7.5%, from $962.4 million at September 30, 2018 to $1.035 billion at September 30, 2019.
• Noninterest bearing deposits grew $24.1 million, or 15.2%, year over year and totaled $183.0 million, representing 15.5% of total deposits, an increase from 14.0% one year ago.
• Deposits increased $43.4 million, or 3.8%.
• Other real estate owned ("OREO") was $4.7 million at September 30, 2019, having increased by a longstanding nonperforming loan that moved to OREO.
• Shareholder's equity increased by $20.8 million, or 15.8%, year over year.
• The ratio of nonperforming loans to total loans at September 30, 2019 was 0.56% versus 0.92% one year prior.
• The ratio of allowance for loan losses to nonaccrual loans at September 30, 2019 was 146.10% versus 101.11% one year ago.

MANAGEMENT COMMENTS 

Rex L. Smith, III, President and Chief Executive Officer, stated, "I am delighted at the progress the Company made on numerous fronts in the third quarter.  The results are very encouraging both year over year and on a linked quarter basis.  Our rate of growth for loans and noninterest bearing deposits is better than expected for this time of year.  Net income continues on a strong positive path as it increased approximately 13% year over year.  Credit quality remains strong, and the change in OREO resulted from the push for final resolution of one of our oldest and largest non-performing loans. 

Smith added, "This quarter shows the value that remains in the PCI portfolio, as it continues to provide strong earnings. While not always consistent period to period, there is the potential for meaningful income to realize for many more years.  We have managed a flexible balance sheet that can continue to grow earnings in the forecasted rate environment, and we continue to focus on operating efficiencies."

RESULTS OF OPERATIONS
Overview

Linked Quarter Basis
Net income of $4.6 million for the third quarter of 2019 was an increase of $1.1 million, or 30.2%, compared with net income of $3.5 million for the second quarter of 2019.  Earnings per common share were $0.21, basic, and $0.20, fully diluted, in the third quarter of 2019 compared with $0.16 basic and fully diluted for the quarter ended June 30, 2019. The increase in net income on a linked quarter basis was primarily attributable to an increase of $1.4 million, or 11.8%, in net interest income, a decrease of $125,000 in provision for loan losses and an increase of $60,000 in noninterest income.  These net increases were offset by an increase of $239,000 in noninterest expenses and an increase of $296,000 in income tax expense.

Two separate items of note occurred during the quarter. First, a $1.1 million payoff of a loan within the PCI portfolio was received. The PCI portfolio contains six separate pools, two of which, due to the uncertain nature of the cash flows, have no carrying value. This $1.1 million payoff was in one of those pools, the Acquisition, Development and Construction (ADC) pool, resulting in the entire payment being interest income. The other item was the migration of a $4.0 million nonperforming loan, charged down by $200,000 and moved into the OREO category at $3.8 million. As a part of this transaction, the Bank paid delinquent real estate taxes in the amount of $624,000 on this property, all of which was expensed in the current quarter.

Year-Over-Year Nine Months
Net income was $11.7 million for the first nine months of 2019 compared with $10.3 million for the same period in 2018. This is an increase of $1.3 million, or 12.9%. Interest and dividend income increased by $5.4 million, or 12.4%, and noninterest income increased by $597,000, or 17.7%. Offsetting these increases to net income were increases of $3.0 million in interest expense, $1.2 million in noninterest expense, $125,000 in provision for loan losses and $376,000 in income tax expense. Earnings per common share, basic and fully diluted, were $0.52 for the first nine months of 2019 compared with $0.47, basic, and $0.46, fully diluted, for the first nine months of 2018.

Year-Over-Year Quarter
Net income of $4.6 million for the third quarter of 2019 was an increase of $658,000, or 16.6%, compared with third quarter 2018 net income of $4.0 million. Interest and dividend income increased by $2.3 million in the third quarter of 2019 compared with the same period in 2018, driven by interest and fees on loans, which increased $1.3 million, and interest and fees on PCI loans, which increased $1.1 million, primarily from the $1.1 million payment noted above. Noninterest income increased by $300,000 year over year. Offsetting these increases was an increase of $939,000 in noninterest expenses, an increase of $877,000 in interest expense and an increase of $142,000 in income tax expense.

The following table presents summary income statements for the three months ended September 30, 2019, June 30, 2019 and September 30, 2018 and the nine months ended September 30, 2019 and September 30, 2018.

Net Interest Income

Linked Quarter Basis
Net interest income was $13.4 million for the quarter ended September 30, 2019 compared with $12.0 million for the quarter ended June 30, 2019.  This is an increase of $1.4 million, or 11.8%.

Interest and dividend income on a linked quarter basis increased $1.6 million, or 9.8%, to $17.5 million for the third quarter of 2019.  Interest income with respect to loans, excluding PCI loans, increased $547,000, or 4.3%, during the third quarter when compared with the second quarter of 2019.  This increase was attributed to continued loan growth on a linked quarter basis. The average balance of loans, excluding PCI loans, increased $26.0 million, or 10.3%, on an annualized basis. The yield on loans increased, from 5.01% in the second quarter of 2019 to 5.04% in the third quarter of 2019. Interest income with respect to PCI loans was $2.3 million in the third quarter of 2019 and $1.3 million in the second quarter of 2019. The increase in income in the PCI portfolio was driven by a $1.1 million payoff of a loan in the ADC portfolio. Interest income on securities decreased $49,000 on a linked quarter basis and the average balance on the portfolio declined $3.5 million.

Securities income equaled $1.9 million on a tax-equivalent basis for the third quarter of 2019 compared with $2.0 million in the second quarter of 2019.  The tax-equivalent yield on the securities portfolio was 3.17% in the third quarter of 2019 compared with a tax-equivalent yield of 3.23% in the second quarter of 2019. Tax-exempt securities balances declined by $9.5 million, on average, during the third quarter of 2019. Call activity has increased in both taxable and tax-exempt securities due to the current rate environment, and $2.8 million in municipal bonds were called during the third quarter of 2019. This is having a negative impact on the yield realized on the portfolio.

The combination of various tax-equivalent yields within the asset mix resulted in a yield on earning assets of 5.23% for the third quarter of 2019 compared with 4.88% in the second quarter of 2019. The receipt of cash basis income on the PCI portfolio, due to improved economic conditions, subsequent to the acquisition date in 2009, has resulted in better than forecasted performance and may produce recurring but unpredictable income over the remaining life of these loans.  Excluding the $1.1 million payment, the yield on the PCI portfolio would have been 13.81% compared with the actual yield of 26.07%. The yield on earning assets would have been 4.90% compared with the actual yield of 5.23%. The interest spread would have been 3.41% compared with the actual interest spread of 3.74% and the net interest margin would have been 3.70% compared with the actual net interest margin of 4.02%.

Interest expense of $4.0 million in the third quarter of 2019 was an increase of $135,000, or 3.5%, on a linked quarter basis.  Interest on deposits increased $109,000, or 3.0%.  Interest on borrowed funds increased by $26,000, or 8.2%.  Average interest bearing deposits decreased by $8.2 million, or 0.8%. The cost of interest bearing deposits increased from 1.41% in the second quarter of 2019 to 1.45% in the third quarter of 2019. The increased rates paid on interest bearing deposits and on short-term borrowings resulted in an increase in the cost of interest bearing liabilities from 1.45% in the second quarter of 2019 to 1.49% in the third quarter of 2019.

With the changes in net interest income noted above, the tax-equivalent net interest margin increased from 3.69% in the second quarter of 2019 to 4.02% in the third quarter of 2019. Likewise, the interest spread increased from 3.43% to 3.74% on a linked quarter basis.

Year-Over-Year Nine Months
Net interest income was $37.5 million for the first nine months of 2019, or an increase of $2.5 million, or 7.0%, when comparing the first nine months of 2018 and 2019.  The yield on earning assets was 5.02% for the first nine months of 2019 compared with 4.67% for the first nine months of 2018. Interest and fees on loans of $38.2 million in the first nine months of 2019 was an increase of $4.1 million compared with $34.1 million for the same period in 2018.  Interest and fees on PCI loans, including the $1.1 million ADC payment noted above, increased $940,000 over this same time frame.  For the first nine months of 2019 compared with the same period in 2018, securities income increased $265,000. On a tax-equivalent basis the increase was $158,000. The average balance of tax-exempt securities declined $18.8 million, thus reducing the benefit received on a tax-equivalent basis on these securities. The tax-equivalent yield on the portfolio increased and was 3.17% for the first nine months of 2019 compared with 3.10% for the same period in 2018.

Interest expense of $11.6 million represented an increase of $3.0 million, or 34.6%, in the first nine months of 2019 compared with the same period in 2018. Average interest bearing liabilities increased $19.0 million, or 1.8%.  The cost of interest bearing liabilities increased from 1.09% for the first nine months of 2018 to 1.44% for the first nine months of 2019. Driving the increase was growth of $65.5 million, or 11.5%, in the average balance of time deposits, from $569.0 million for the first nine months of 2018 to $634.4 million for the same period in 2019. This growth in time deposits, as a result of higher rates, came partly from a shift away from savings and money market accounts, which experienced a decline of $13.2 million in average balances between the comparison periods. Additionally, time deposit growth included a shift out of FHLB and other borrowings, which reflected an average balance decline of $35.0 million, or 35.2%, over the two nine-month comparison periods.

The tax-equivalent net interest margin was 3.84% for the first nine months of 2019 compared with 3.76% for the first nine months of 2018. The yield on earning assets increased by 35 basis points over this time frame. The competition for funding, however, pushed the cost of interest bearing liabilities up an equal amount, 35 basis points, from 1.09% to 1.44%.  The net interest spread was 3.58% for the first nine months of each of 2018 and 2019. The net interest margin of 3.84% for the first nine months of 2019 is an increase from 3.76% for the first nine months of 2018. The net interest margin has been enhanced by growth in the average balance of noninterest bearing deposits of $18.2 million, or 11.9%, and in shareholders' equity of $17.6 million, or 13.8%. Excluding the $1.1 million ADC loan payment the yield on the PCI portfolio would have been 13.72%, the yield on earning assets would have been 4.91%, the interest spread would have been 3.47% and the net interest margin would have been 3.73%.

Year-Over-Year Quarter
Net interest income increased $1.4 million, or 12.0%, from the third quarter of 2018 to the third quarter of 2019. Net interest income was $13.4 million in the third quarter of 2019 compared with $12.0 million for the same period in 2018.  Interest and fees on loans increased by $1.3 million, or 10.9%, year over year, and was $13.2 million for the third quarter of 2019. Interest and fees on PCI loans of $2.3 million is an increase of $1.1 million, driven by the $1.1 million ADC payment. The average balance of loans, excluding PCI loans, was $965.8 million for the third quarter of 2018 and increased by $71.7 million, or 7.4%, in the third quarter of 2019. The yield on loans also increased, year over year, and was 4.89% in the third quarter of 2018 and increased by 15 basis points to 5.04% in the third quarter of 2019.

Interest income on securities of $1.8 million was a year-over-year decrease of $48,000. Interest income on securities, on a tax-equivalent basis, was $1.9 million in the third quarter of 2019, which was a decrease of $95,000 compared with the third quarter of 2018. This decrease was driven both by average balance and yield.  The average balance of the securities portfolio decreased $8.7 million year over year.  Additionally, on a tax-equivalent basis, the yield on investment securities decreased four basis points and was 3.17% in the third quarter of 2019 and 3.21% in the third quarter of 2018. 

Interest expense increased $877,000, or 27.7%, when comparing the third quarter of 2019 and the third quarter of 2018. Interest expense on deposits increased $999,000, or 37.0%, as the average balance of interest bearing deposits increased $39.9 million, or 4.1%.  The increase in deposit cost was driven by an increase in time deposit average balances, which increased $39.2 million, or 6.6%, year over year. The cost of time deposits increased from 1.56% to 2.06%, which resulted in an increase in the cost of total interest bearing deposits from 1.10% to 1.45%, over the same time frame. FHLB and other borrowings decreased, on average, $28.7 million year over year, and there was a slight increase in the rate paid, from 1.98% in the third quarter of 2018 to 1.99% in the third quarter of 2019.  Overall, the Bank's cost of interest bearing liabilities increased 31 basis points, from 1.18% in the third quarter of 2018 to 1.49% in the third quarter of 2019.

The tax-equivalent net interest margin increased 25 basis points, from 3.77% in the third quarter of 2018 to 4.02% in the third quarter of 2019.  Likewise, the interest spread increased from 3.58% to 3.74% over the same time period.  The increase in the margin was precipitated by the increase of $2.4 million in loan income, including the PCI loan payoff, and from an increase in the average balances in noninterest bearing deposits of $24.0 million and shareholders' equity of $19.7 million.

The following table compares the Company's net interest margin, on a tax-equivalent basis, for the three months ended September 30, 2019, June 30, 2019, September 30, 2018 and the nine months ended September 30, 2019 and September 30, 2018.

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 the third quarter of 2019 compared with $125,000 in provision for loan losses in the second quarter of 2019 and no provision in the third quarter of 2018. The provision recognized in the second quarter of 2019 was due to loan growth of $26.3 million, or 2.6%, during the quarter and an uptick in delinquencies less than 90 days past due and still accruing interest. There was no provision for loan losses on the PCI loan portfolio during the first three quarters of 2019 or 2018.  Additional discussion of loan quality is presented below.

Noninterest Income

Linked Quarter Basis
Noninterest income was $1.5 million for the third quarter of 2019, an increase of $60,000 compared with the second quarter of 2019. Other noninterest income of $346,000 was an increase of $124,000 from the second quarter of 2019. The linked quarter increase was primarily the result of life insurance proceeds of $120,000 recognized in the third quarter of 2019 from death benefits associated with a former Board member and a retired Senior Vice President. Mortgage loan income in the third quarter of 2019 was $176,000, an increase of $76,000 over the second quarter of 2019. Service charges on deposit accounts were $758,000, an increase of $51,000, or 7.2%, over the second quarter of 2019. Securities gains of $50,000 in the third quarter of 2019 compared with securities gains of $238,000 in the second quarter of 2019, a decline of $188,000.

Year-Over-Year Nine Months
Noninterest income was $4.0 million for the first nine months of 2019, an increase of $597,000, or 17.7%, compared with $3.4 million for the first nine months of 2018. Service charges and fees, driven by an increase in deposits, were $2.1 million for the first nine months of 2019, an increase of $256,000 compared with the same period in 2018. Other noninterest income was $744,000 for the first nine months of 2019, an increase of $222,000 versus the first nine months of 2018. The 2019 period benefited from the receipt of life insurance proceeds of $120,000, dividends on an equity investment of $45,000 and swap fee income of $35,000. Gain on securities transactions increased $192,000 and was $274,000 for the first nine months of 2019 compared with $82,000 for the same period in 2018. Mortgage loan income of $338,000, driven by low interest rates and refinance activity, increased by $50,000 in the first nine months of 2019 compared with the same period in 2018. Gain on sale of loans declined by $118,000 in the first nine months of 2019 compared with the same period in 2018.

Year-Over-Year Quarter
Noninterest income increased $300,000, or 24.8%, and was $1.5 million in the third quarter of 2019 compared with $1.2 million for the third quarter of 2018. Other noninterest income increased by $175,000, driven by life insurance proceeds of $120,000, equity investment dividends of $45,000 and swap fee income of $35,000. Service charges and fees were $758,000 in the third quarter of 2019 and increased $132,000 year over year. Mortgage loan income of $176,000 in the third quarter of 2019 was an increase of $79,000 over the same period in 2018. Gain on sale of loans declined $65,000 in the third quarter of 2019 compared with the same period in 2018, and gain(loss) on securities transactions, net declined from $68,000 in the third quarter of 2018 to $50,000 in the same period in 2019.

Noninterest Expenses

Linked Quarter Basis
Noninterest expenses totaled $9.2 million for the third quarter of 2019, as compared with $9.0 million for the second quarter of 2019, an increase of $239,000, or 2.7%. Other real estate expenses, net increased by $460,000, affected by $624,000 in delinquent real estate taxes paid by the Bank to take title to a past due loan that was moved to OREO. Additionally, there were gains from the sale of other properties recorded in other real expenses, net of $98,000 in the third quarter of 2019 compared with net losses of $76,000 in the prior quarter. Offsetting increases to noninterest expenses was a decrease of $158,000 in FDIC assessment costs and a decrease of $106,000 in occupancy expenses.

Year-Over-Year Nine Months
Noninterest expenses were $27.1 million for the first nine months of 2019, as compared with $25.8 million for the same period in 2018.  This is an increase of $1.2 million, or 4.7%. Other real estate expenses, net increased $504,000, and were $662,000 for the first nine months of 2019, compared with $158,000 for the same period in 2018. The major cause for the increase was the payment of $624,000 in past due taxes noted above. Expense in 2019 has been reduced by gain on sale of other properties. Occupancy expenses increased $301,000, or 12.7%. Data processing fees increased $274,000, or 18.7% and were $1.7 million for the first nine months of 2019. Other operating expenses increased $247,000 and were $4.6 million for the first nine months of 2019. Equipment expenses increased by $128,000 and were $1.2 million for the first nine months of 2019. Offsetting these increases, the FDIC assessment decreased $283,000 for the first nine months of 2019 compared with the same period in 2018.

Year-Over-Year Quarter
Noninterest expenses were $9.2 million in the third quarter of 2019 and increased $939,000, or 11.3%, compared with the same period in 2018. Other real estate expenses, net increased by the largest dollar amount, $502,000, and were $565,000 for the third quarter of 2019 compared with $63,000 for the third quarter of 2018. Salaries and employee benefits increased by $260,000, or 5.2%, and were $5.3 million for the third quarter of 2019. Other operating expenses increased by $212,000 year over year and were $1.6 million in the third quarter of 2019. Data processing fees of $594,000 in the third quarter of 2019 were $112,000 greater than one year earlier.  

The following table compares the Company's other operating expenses included in noninterest expenses for the three months ended September 30, 2019, June 30, 2019, December 31, 2018 and September 30, 2018.

Income Taxes

Income tax expense was $1.1 million for the three months ended September 30, 2019, compared with income tax expense of $791,000 for the second quarter of 2019 and $945,000 for the third quarter of 2018.  For the nine months ended September 30, 2019, income tax expense was $2.7 million compared with $2.3 million for the first nine months of 2018. The effective tax rate for the third quarter of 2019 was 19.1% versus 18.2% for the second quarter of 2019 and 19.3% in the third quarter of 2018. For the first nine months of 2019, the effective tax rate was 18.7% and, for the same period in 2018, it was 18.2%. The increase in the effective tax rate was primarily from lower tax-exempt income from municipal securities.     

FINANCIAL CONDITION

Total assets increased $29.5 million, or 2.1%, during the first nine months of 2019 to $1.423 billion at September 30, 2019.  Total assets increased $72.3 million, or 5.4%, since September 30, 2018.  Total loans, excluding PCI loans, were $1.035 billion at September 30, 2019, increasing $40.8 million, or 4.1%, from year end 2018 and $72.1 million, or 7.5%, from September 30, 2018.   Total PCI loans were $34.0 million at September 30, 2019 versus $38.3 million at year end 2018 and $39.1 million at September 30, 2018.

During the third quarter of 2019, loan growth, excluding PCI loans, was $10.3 million, or 1.0%. Multifamily loans grew by $16.5 million during the third quarter and were $73.8 million and 7.1% of total loans. Commercial mortgage loans, the largest category of loans, grew by $4.3 million during the third quarter and were $393.1 million at September 30, 2019 and 38.0% of total loans. Residential 1 – 4 family loans were $222.0 million at September 30, 2019, 21.5% of total loans, and grew by $2.3 million, or 1.1%, during the third quarter. Construction and land development loans declined by $6.0 million, or 4.4%, during the third quarter of 2019 and at $131.0 million were 12.7% of total loans at September 30, 2019. The primary factor for this decline was moving a $4.0 million nonperforming loan out of this category into OREO.  Commercial loans of $186.0 million at September 30, 2019 were 18.0% of total loans as this category declined $5.0 million, or 2.6%, during the third quarter.

During the first nine months of 2019, loans, excluding PCI loans, grew by $40.8 million, or 4.1%. Multifamily loans grew $14.2 million, or 23.9%. Commercial mortgage loans grew $13.2 million, or 3.5%. Construction and land development loans grew $10.6 million, or 8.8%. Residential 1 – 4 family loans grew $5.7 million, or 2.7%. Offsetting these increases was a decline in commercial loans of $2.7 million, or 1.4%.

When comparing September 30, 2019 and September 30, 2018, three categories fueled loan growth, excluding PCI loans, of $72.1 million, or 7.5%.  Commercial mortgage loans grew $34.6 million, or 9.6%. Multifamily loans grew $21.5 million, or 41.2%, and commercial loans grew $15.7 million, or 9.2%. Additionally, residential 1 – 4 family loans increased by $5.8 million, or 2.7% and agriculture loans increased $1.4 million, or 17.2%. Construction and land development loans declined $4.0 million, or 3.0%. Consumer installment loans declined $1.3 million, or 9.5%. Second mortgages and all other loans declined by $795,000 and $785,000, respectively.

The following table shows the composition of the Company's loan portfolio, excluding PCI loans, at September 30, 2019, June 30, 2019, December 31, 2018 and September 30, 2018.

The Company's securities portfolio, excluding restricted equity securities, decreased $20.5 million, or 8.2%, since year end 2018 to total $228.4 million at September 30, 2019. Securities balances decreased $23.9 million during the third quarter of 2019. There were $6.1 million in purchases, $12.3 million in maturities, $11.7 million in sales and $2.8 million in bonds called during the third quarter of 2019. Net gains of $50,000 were realized during the third quarter of 2019 through sales and call activity. For the first nine months of 2019, there were net gains of $274,000 realized through sales and call activity. Securities decreased $15.8 million from September 30, 2019 to September 30, 2018.  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 $36.8 million, $34.2 million and $24.3 million at September 30, 2019, December 31, 2018 and September 30, 2018, respectively.  There were federal funds purchased of $71,000 at September 30, 2019, $19.4 million at December 31, 2018 and $10.0 million at September 30, 2018. There were federal funds sold of $240,000 at September 30, 2018. Interest bearing bank deposits were $13.7 million at September 30, 2019 compared with $15.9 million at December 31, 2018 and $11.2 million at September 30, 2018.

The following table shows the composition of the Company's securities portfolio, excluding restricted equity securities, at September 30, 2019, December 31, 2018 and September 30, 2018.

Interest bearing deposits at September 30, 2019 were $994.2 million, a decrease of $5.6 million from December 31, 2018. Interest bearing deposits are $19.2 million greater than at September 30, 2018. During 2019, NOW accounts declined $18.3 million, or 11.0% and were $147.6 million at September 30, 2019. Time deposits less than or equal to $250,000 decreased $1.4 million and total $483.7 million at September 30, 2019. Time deposits over $250,000 grew by $7.3 million during 2019 and were $136.2 million at September 30, 2019. Savings accounts grew $3.5 million during 2019 and total $96.4 million. Money market deposit accounts, $130.3 million at September 30, 2019, grew $3.3 million, or 2.6%, during the first nine months of 2019.

The following table compares the mix of interest bearing deposits at September 30, 2019, June 30, 2019, December 31, 2018 and September 30, 2018.

FHLB advances were $73.7 million at September 30, 2019, compared with $59.4 million at December 31, 2018 and $63.8 million at September 30, 2018.   

Shareholders' equity was $152.6 million at September 30, 2019, $137.5 million at December 31, 2018 and $131.8 million at September 30, 2018.  Shareholders' equity to assets was 10.7% at September 30, 2019, 9.9% at December 31, 2018 and 9.8% at September 30, 2018. 

Asset Quality – non-covered assets

The allowance for loan losses equaled 146.1% of nonaccrual loans at September 30, 2019, compared with 79.9% at June 30, 2019, 94.6% at December 31, 2018 and 101.1% at September 30, 2018. The ratio of nonperforming assets to loans and OREO was 1.01% at September 30, 2019, 1.17% at June 30, 2019, 1.07% at December 31, 2018 and 1.10% at September 30, 2018.

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

The following table sets forth selected asset quality data, excluding PCI loans, and ratios for the dates indicated.

A further breakout of nonaccrual loans, excluding PCI loans, at September 30, 2019, December 31, 2018 and September 30, 2018 is below.

Capital Requirements

The Bank's ratio of total risk-based capital was 13.8% at September 30, 2019 compared with 13.3% at December 31, 2018.  The tier 1 risk-based capital ratio was 13.1% at September 30, 2019 and 12.6% at December 31, 2018. The Bank's tier 1 leverage ratio was 10.7% at September 30, 2019 and 10.2% at December 31, 2018.  All capital ratios exceed regulatory minimums to be considered well capitalized.  BASEL III introduced the common equity tier 1 capital ratio, which was 13.1% at September 30, 2019 and 12.6% at December 31, 2018.

Earnings Conference Call and Webcast

The Company will host a conference call for interested parties on Friday, October 25, 2019, at 10:00 a.m. Eastern Time to discuss the third quarter 2019 results. 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 25, 2019 until 9:00 a.m. Eastern Time on November 15, 2019. The replay will be available by dialing 877-344-7529 and entering access code 10135800 or through the internet by accessing the "Corporate Overview – Corporate Profile" page of the Company's internet site at www.cbtrustcorp.com.

About Community Bankers Trust Corporation and Essex Bank

Community Bankers Trust Corporation is the holding company for Essex Bank, a Virginia state bank with 24 full-service offices, 18 of which are in Virginia and six of which are in Maryland.  The Bank also operates two loan production offices.

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, 2018 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.

SOURCE Community Bankers Trust Corporation

Related Links

http://www.cbtrustcorp.com