EX-99.1 2 tv499347_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

Community Bankers Trust Corporation Reports Results for Second Quarter of 2018

 

Net income of $3.8 million in the second quarter of 2018 is an increase of $1.2 million, or 45.8%, over the

first quarter of 2018.

 

Conference Call on Thursday, July 26, 2018, at 10:00 a.m. Eastern Time

 

Richmond, VA, July 26, 2018 - Community Bankers Trust Corporation (the “Company”) (NASDAQ: ESXB), the holding company for Essex Bank (the “Bank”), today reported results for the second quarter of 2018.

 

Income Statement- Three Months ended June 30, 2018 compared with Three Months ended March 31, 2018

·Net income of $3.8 million for the second quarter of 2018 is an increase of $1.2 million, or 45.8%, on a linked quarter basis.
·Noninterest expenses declined by $1.2 million, driven by a reduction in salaries and employee benefits.
·Interest and fees on loans increased $477,000, or 4.4%.
·Noninterest income increased $102,000, or 9.9%.
·Basic and diluted earnings per common share were $0.17 in the second quarter compared with $0.12 in the first quarter.
·Return on average assets, annualized, was 1.12% and return on average equity, annualized, was 11.92% in the second quarter.

 

Income Statement- Six Months ended June 30, 2018 compared with Six Months ended June 30, 2017

·Net income of $6.4 million is an increase of $949,000, or 17.5%.
·Pre-tax net income increased $534,000, or 7.4%.
·Interest and dividend income of $28.6 million is an increase of $2.4 million, or 9.3%.
·Interest and fees on loans increased $2.7 million, or 13.7%.
·Net interest income increased $1.3 million, or 5.8%.
·Return on average assets, annualized, was 0.95% and return on average equity, annualized, was 10.13% for the first six months of 2018.

 

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

·Net income of $3.8 million for the second quarter of 2018 is an increase year-over-year of $848,000, or 28.9%.
·Pre-tax net income increased $969,000, or 26.7%.
·Interest and dividend income increased $1.3 million, or 9.8%, in the second quarter of 2018 over the same period in 2017, led by interest and fees on loans, which increased $1.4 million, or 14.1%.
·Net interest income after provision for loan losses increased $673,000, or 6.1%, year-over-year.
·Noninterest income increased year-over-year by 9.5%.
·Noninterest expenses declined year-over-year by 2.4%.

 

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

·Loans grew $103.3 million, or 12.0%, from $864.0 million at June 30, 2017 to $967.4 million at June 30, 2018.
·Noninterest bearing deposits grew $13.5 million, or 9.7%, year-over-year and totaled $152.0 million, representing 13.5% of total deposits, an increase from 12.8% one year ago.
·Deposits increased $41.0 million, or 3.8%, year-over-year.
·NOW and Money Market accounts increased $45.6 million from June 30, 2017 to June 30, 2018.
·The growth noted in NOW and Money Market accounts has enabled a decrease in brokered time deposits of $26.5 million, or 73.6%, year-over-year, to only $9.5 million at June 30, 2018.

 

MANAGEMENT COMMENTS

 

Rex L. Smith, III, President and Chief Executive Officer, stated, “The second quarter showed significant progress in the earnings power of the Company. Controlled growth in loans has allowed our new branches time to gain footing and keep our cost of funds from rising significantly. This strategy in the rising rate environment has translated to an overall increase of 45.8% in net income on a linked quarter basis. In addition to improved net interest income, noninterest income continues to increase from increases in fee income on checking accounts, along with mortgage and investment services income.”

 

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Smith added, “All of the core areas of the Bank are showing great progress. While we were prepared for the rising rate environment, our markets remain competitive as some of the newer entrants try to buy market share. But, we continue to remain true to our vision of building total relationships and not engaging in irrational pricing or credit practices for the sake of growth. While that strategy has slowed our loan growth in the first two quarters, it will be enough to continue the growth rate required for a strong net interest margin and growth in our core customer base.”

 

Smith concluded, “We are pleased with the results of the second quarter and the first half of the year and remain excited for the earnings potential for the remainder of the year.”

 

RESULTS OF OPERATIONS

 

Linked Quarter Basis

Net income was $3.8 million for the second quarter of 2018, compared with net income of $2.6 million in the first quarter of 2018. Earnings per common share, basic and fully diluted, were $0.17 per share and $0.12 per share for the three months ended June 30, 2018 and March 31, 2018, respectively. The increase of $1.2 million, or 45.8%, in net income, for the second quarter of 2018 compared with the first quarter of 2018, was primarily the result of a $1.2 million decrease in noninterest expense, driven by a decline of $830,000 in salaries and employee benefits. Also positively influencing net income was an increase of $477,000 in interest and fees on loans. Net interest income after provision for loan losses increased $180,000, and noninterest income increased $102,000. Offsetting these increases was an increase of $273,000 in income tax expense.

 

Year-Over-Year Six Months

Net income was $6.4 million for the first six months of 2018 compared with $5.4 million for the same period in 2017. This is an increase of $949,000, or 17.5%. Increases were in interest and dividend income, which increased by $2.4 million, or 9.3%, and in noninterest income, which increased by $138,000, or 6.8%. Also positively affecting earnings was a reduction of $415,000 in income tax expense. Offsetting these increases to net income was an increase of $1.2 million in interest expense and an increase of $877,000 in noninterest expense. Comparing pre-tax income for the two periods eliminates most of the effect of the Tax Cuts and Jobs Act of 2017. Income before taxes increased by $534,000, or 7.4%, for the first six months of 2018 compared with the same period in 2017.

 

Year-Over-Year Quarter

Net income of $3.8 million for the second quarter of 2018 was an increase of $848,000, or 28.9%, over second quarter 2017 net income of $2.9 million. Pre-tax net income increased $969,000, or 26.7%, in the second quarter of 2018. Interest and dividend income increased by $1.3 million in the second quarter of 2018 compared with the same period in 2017, driven by interest and fees on loans, which increased $1.4 million. Noninterest income increased by $98,000 year-over-year, and noninterest expenses declined by $198,000. Offsetting these increases was an increase in income tax expense, which was $121,000 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 June 30, 2018, March 31, 2018 and June 30, 2017 and the six months ended June 30, 2018 and June 30, 2017.

 

SUMMARY INCOME STATEMENT

(Unaudited)                         

(Dollars in thousands)  For the three months ended   For the six months ended 
    30-Jun-18    31-Mar-18    30-Jun-17    30-Jun-18    30-Jun-17 
Interest income  $14,510   $14,079   $13,220   $28,589   $26,168 
Interest expense   2,863    2,612    2,246    5,475    4,327 
Net interest income   11,647    11,467    10,974    23,114    21,841 
Provision for loan losses   -    -    -    -    - 
Net interest income after provision for loan losses   11,647    11,467    10,974    23,114    21,841 
Noninterest income   1,135    1,033    1,037    2,168    2,030 
Noninterest expense   8,187    9,366    8,385    17,553    16,676 
Income before income taxes   4,595    3,134    3,626    7,729    7,195 
Income tax expense   813    540    692    1,353    1,768 
Net income  $3,782   $2,594   $2,934   $6,376   $5,427 
                          
EPS Basic  $0.17   $0.12   $0.13   $0.29   $0.25 
EPS Diluted  $0.17   $0.12   $0.13   $0.28   $0.24 
                          
Return on average assets, annualized   1.12%   0.78%   0.92%   0.95%   0.86%
Return on average equity, annualized   11.92%   8.30%   9.75%   10.13%   9.16%

 

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Net Interest Income

 

Linked Quarter Basis

Net interest income was $11.6 million for the quarter ended June 30, 2018 compared with $11.5 million for the quarter ended March 31, 2018. This is an increase of $180,000, or 1.6%.

 

Interest income on a linked quarter basis increased $431,000, or 3.1%, to $14.5 million for the second quarter of 2018. Interest income with respect to loans, excluding PCI loans, increased $477,000, or 4.4%, during the second quarter when compared with the first quarter of 2018. This increase was partially attributed to continued loan growth, excluding PCI loans, coupled with higher rates. The yield on loans increased from 4.68% in the first quarter of 2018 to 4.75% in the second quarter of 2018. The average balance of loans, excluding PCI loans, increased $15.6 million, or 1.6%, on a linked quarter basis. Interest income with respect to PCI loans was $1.3 million in the second quarter of 2018 and $1.4 million in the first quarter of 2018. Interest income on securities increased $48,000 on a linked quarter basis.

 

Securities income equaled $2.0 million on a tax-equivalent basis for the second quarter of 2018, which was an increase of $40,000 from the first quarter of 2018. The tax-equivalent yield on the securities portfolio was 3.11% in the second quarter of 2018 compared with a tax-equivalent yield of 2.98% in the first quarter of 2018.

 

Interest expense of $2.9 million in the second quarter of 2018 was an increase of $251,000, or 9.6%, on a linked quarter basis. Interest on deposits increased $212,000, or 9.9%. Interest on borrowed funds increased by $39,000, or 8.3%. Average interest bearing balances on deposits increased by only $10.3 million, or 1.1%. However, the cost of these deposits increased from 0.92% in the first quarter of 2018 to 0.99% in the second quarter of 2018, resulting in a 9.9% 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 1.00% in the first quarter of 2018 to 1.08% in the second quarter of 2018.

 

With the changes in interest income noted above, the tax-equivalent net interest margin declined from 3.76% in the first quarter of 2018 to 3.73% in the second quarter of 2018. Likewise, the interest spread decreased from 3.60% to 3.56% on a linked quarter basis.

 

Year-Over-Year Six Months

For the first half of 2018, net interest income increased $1.3 million, or 5.8%, and was $23.1 million. The yield on earning assets was 4.62% compared with 4.57% for the first six months of 2017. Interest and fees on loans of $22.2 million in the first two quarters of 2018 was an increase of $2.7 million compared with $19.5 million for the same period in 2017. Interest and fees on PCI loans declined $260,000 over this same time frame. Securities income decreased $31,000 for the first six months of 2018 compared with the same period in 2017. On a tax-equivalent basis, income on securities decreased $352,000, primarily the result of less benefit on bank qualified municipal securities from the implementation in December 2017 of the Tax Cut and Jobs Act. The tax-equivalent yield on the portfolio was 3.04% for the first two quarters of 2018, based on a 21% tax rate, and 3.15% for the same period in 2017, based on a 34% tax rate.

 

Interest expense of $5.5 million represented an increase of $1.1 million in the first six months of 2018 compared with the same period in 2017. Average interest bearing liabilities increased $52.2 million, or 5.2%, as loan growth has been fueled by an average balance increase of $61.3 million, or 25.5%, in the combination of NOW and MMDA accounts. This has allowed more expensive time deposit balances to decrease, on average, by $30.2 million, or 5.1%, resulting in a $32.9 million increase in the average balance of total deposits.

 

The tax equivalent net interest margin declined from 3.83% for the first six months of 2017 to 3.75% for the first six months of 2018. While the yield on earning assets increased by five basis points over this time frame, the competition for funding has pushed the cost of interest bearing liabilities up, from 0.87% to 1.04%. The net interest spread was 3.58% for the first six months of 2018 versus 3.70% for the first six months of 2017.

 

Year-Over-Year Quarter

Net interest income increased $673,000, or 6.1%, from the second quarter of 2017 to the second quarter of 2018. Net interest income was $11.6 million in the second quarter of 2018 compared with $11.0 million for the same period in 2017. Interest income increased $1.3 million, or 9.8%, over this time period. The increase in interest income was generated by an increase of $69.5 million, or 5.8%, in the level of earning assets. The yield on earning assets increased from 4.53% in the second quarter of 2017 to 4.64% in the second quarter of 2018. The average balance of loans, excluding PCI loans, increased $98.6 million, or 11.5%, from $860.4 million in the second quarter of 2017 to $959.0 million in the second quarter of 2018. Interest income on securities was $1.8 million in each of the second quarter of 2018 and second quarter of 2017. On a tax-equivalent basis, the yield on investment securities was 3.11% in the second quarter of 2018, based on a 21% tax rate, and 3.09% in the second quarter of 2017, based on a 34% tax rate.

 

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Interest on PCI loans was $1.3 million in the second quarter of 2018 compared with $1.5 million in the second quarter of 2017. The average balance of the PCI portfolio declined $8.1 million during the year-over-year comparison period.

 

Interest expense increased $617,000, or 27.5%, when comparing the second quarter of 2017 and the second quarter of 2018. Interest expense on deposits increased $411,000, or 21.1%, as the average balance of interest bearing deposits increased $24.6 million, or 2.6%. The increase in deposit cost was driven by an increase in NOW and MMDA average balances, which increased a combined $60.1 million year-over-year. Likewise, the cost of these balances increased $174,000, from 0.26% to 0.44%, over the same time frame. Higher cost time deposit average balances declined over the comparison period by $37.9 million; however, expense on this category increased by $236,000, resulting in an increase in cost from 1.16% to 1.41%. FHLB and other borrowings increased, on average, $18.4 million year-over-year, and there was an increase in the rate paid, from 1.42% in the second quarter of 2017 to 1.87% in the second quarter of 2018. This resulted in an increase in the expense of this wholesale funding source of $182,000, to $482,000 in the second quarter of 2018. The average balance of FHLB and other borrowings was $103.2 million in the second quarter of 2018. Overall, the Bank’s cost of interest bearing liabilities increased 19 basis points, from 0.89% in the second quarter of 2017 to 1.08% in the second quarter of 2018.

 

The tax-equivalent net interest margin decreased five basis points, from 3.78% in the second quarter of 2018 to 3.73% in the second quarter of 2018. Likewise, the interest spread decreased from 3.64% to 3.56% over the same time period.  The decrease in the margin was precipitated by the increase in the cost of interest bearing liabilities without a corresponding increase in the yield on earning assets.

 

The following table compares the Company's net interest margin, on a tax-equivalent basis, for the three months ended June 30, 2018, March 31, 2018 and June 30, 2017 and the six months ended June 30, 2018 and June 30, 2017.

 

NET INTEREST MARGIN

(Unaudited)            

(Dollars in thousands)  For the three months ended 
    30-Jun-18    31-Mar-18    30-Jun-17 
Average interest earning assets  $1,266,663   $1,253,752   $1,197,207 
Interest income  $14,510   $14,079   $13,220 
Interest income - tax-equivalent  $14,656   $14,233   $13,532 
Yield on interest earning assets   4.64%   4.60%   4.53%
Average interest bearing liabilities  $1,064,626   $1,054,282   $1,017,342 
Interest expense  $2,863   $2,612   $2,246 
Cost of interest bearing liabilities   1.08%   1.00%   0.89%
Net interest income  $11,647   $11,467   $10,974 
Net interest income - tax-equivalent  $11,793   $11,621   $11,286 
Interest spread   3.56%   3.60%   3.64%
Net interest margin   3.73%   3.76%   3.78%

 

   For the six months ended         
    30-Jun-18    30-Jun-17         
Average interest earning assets  $1,260,243   $1,182,237         
Interest income  $28,589   $26,168         
Interest income - tax-equivalent  $28,887   $26,787         
Yield on interest earning assets   4.62%   4.57%        
Average interest bearing liabilities  $1,059,482   $1,007,321         
Interest expense  $5,475   $4,327         
Cost of interest bearing liabilities   1.04%   0.87%        
Net interest income  $23,114   $21,841         
Net interest income - tax-equivalent  $23,412   $22,460         
Interest spread   3.58%   3.70%        
Net interest margin   3.75%   3.83%        

 

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 of the second quarter or the first six months of either 2018 or 2017. The absence of a provision in the second quarter of 2018 was the direct result of nominal charge-offs and stable asset quality, coupled with the level of loan growth in the second quarter of 2018. There was no provision for loan losses on the PCI loan portfolio during the first and second quarters of 2018 or during the first and second quarters of 2017. Additional discussion of loan quality is presented below.

 

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Noninterest Income

 

Linked Quarter Basis

Noninterest income was $1.1 million for the second quarter of 2018, an increase of $102,000 compared with $1.0 million for the first quarter of 2018.  Other noninterest income of $223,000 was an increase of $95,000 from the first quarter of 2018. The linked quarter change was primarily attributable to an increase of $74,000 in commission income and an increase of $9,000 in dividend income. There was $53,000 in gain on sale of loans in the second quarter of 2018 versus $0 in the first quarter of 2018. Also increasing were service charges and fees, which increased by $30,000 over the linked quarter. Partially offsetting these increases was a loss on securities transactions that resulted in $46,000 less income than in the prior quarter and a decrease of $31,000 in mortgage loan income in the second quarter of 2018.

 

Year-Over-Year Six Months

Noninterest income was $2.2 million for the first six months of 2018, an increase of $138,000, or 6.8%, compared with $2.0 million for the first six months of 2017. Mortgage loan income of $191,000 for the first six months of 2018 was an increase of $87,000 from $104,000 for the same period in 2017. Service charges and fees accounts increased $85,000 for the first six months of 2018 compared with the same period in 2017 and were $1.2 million. Gain on sale of loans was $53,000 for the first six months of 2018 versus $0 for the same period in 2017. Other noninterest income, driven by higher commission income, reflected an increase of $48,000 for the first six months of 2018 over the same period in 2017. Partially offsetting these increases was a decline of $118,000 in gains on securities transactions.

 

Year-Over-Year Quarter

Noninterest income increased $98,000, or 9.5%, and was $1.1 million in the second quarter of 2018. Other noninterest income, once again as a result of improved commission income, increased $68,000 year-over-year, and service charges increased $29,000. Gain on sale of loans was $53,000 in the second quarter of 2018 versus $0 in the second quarter of 2017. Offsetting these increases to noninterest income was a decrease of $53,000 in gain on securities transactions, when a gain of $37,000 was reported in the second quarter of 2017 compared with a loss of $16,000 in the second quarter of 2018.

 

Noninterest Expenses

 

Linked Quarter Basis

Noninterest expenses totaled $8.2 million for the second quarter of 2018, as compared with $9.4 million for the first quarter of 2018, a decrease of $1.2 million, or 12.6%. Salaries and employee benefits decreased $830,000, or 14.9% on a linked quarter basis. The vast majority of this decrease was related to lower group benefit costs, which decreased by $683,000. Salaries and employee benefits in the second quarter of 2018 were $5.0 million compared with $5.8 million in the first quarter of 2018. Other operating expenses also declined, $336,000 on a linked quarter basis, from $1.6 million in the first quarter of 2018 to $1.3 million in the second quarter of 2018. The Company converted to a new phone system in the first quarter of 2018. This conversion resulted in one-time costs absorbed in the first quarter to terminate the previous vendor relationship and created a much lower expense beginning with the second quarter of 2018. This decrease on a linked quarter basis was $192,000. Also providing meaningful reductions to noninterest expenses on a linked quarter basis was a decrease of $93,000 in stationery, printing and supplies, a decrease of $45,000 in marketing expense and a decrease of $25,000 in other expenses.

 

Year-Over-Year Six Months

Noninterest expenses were $17.6 million for the first six months of 2018, as compared with $16.7 million for the same period in 2017. This is an increase of $877,000, or 5.3%. Salaries and employee benefits increased $1.4 million for the first six months of 2018 compared with the same period in 2017. Within this increase, $723,000 was related to group hospital and medical insurance increases and $525,000 were related to increases in total salaries. Also impacting noninterest expenses for the first six months of 2018 compared with the same period in 2017 were increases of $114,000 in equipment expenses and $109,000 in occupancy expenses due to branch expansion activities that added three new offices during 2017. These increases were offset by a decline of $816,000 in amortization of intangibles, which became fully amortized in 2017.

 

Year-Over-Year Quarter

Noninterest expenses decreased $198,000, or 2.4%, when comparing the second quarter of 2018 to the same period in 2017. Amortization of intangibles decreased $339,000 year-over-year, and other operating expenses decreased by $215,000. Within the decrease of $215,000 in other operating expenses were declines of $113,000 in telephone and internet line, $64,000 in stationery, printing and supplies, $56,000 in marketing expense and $55,000 in credit expense. Offsetting these decreases to noninterest expenses were increases of $176,000 in salaries and employee benefits, $84,000 in equipment expenses, $34,000 in FDIC assessment, $29,000 in occupancy expenses, $22,000 in data processing fees and $11,000 in other real estate expenses.

 

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

 

OTHER OPERATING EXPENSES

(Unaudited)

                
(Dollars in thousands)  For the three months ended 
    30-Jun-18    31-Mar-18    31-Dec-17    30-Jun-17 
Bank franchise tax  $179   $179   $158   $158 
Telephone and internet line   51    243    172    164 
Stationery, printing and supplies   85    178    153    149 
Marketing expense   133    178    155    189 
Credit expense   101    91    75    156 
Outside vendor fees   154    145    200    133 
Other expenses   610    635    602    579 
Total other operating expenses  $1,313   $1,649   $1,515   $1,528 

 

Income Taxes

 

Income tax expense was $813,000 for the three months ended June 30, 2018, compared with income tax expense of $540,000 for the first quarter of 2018 and $692,000 for the second quarter of 2017. For the six months ended June 30, 2018, income tax expense was $1.4 million compared with $1.8 million for the first six months of 2017. The effective tax rate for the second quarter of 2018 was 17.7% versus 17.2% for the first quarter of 2018 and 19.1% in the second quarter of 2017. For the first six months of 2018, the effective tax rate was 17.5% and for the same period in 2017 it was 24.6%. The decrease in the Company’s effective tax rate resulted principally from the decrease in its applicable federal corporate 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 $17.7 million, or 1.3%, to $1.354 billion at June 30, 2018 when compared with December 31, 2017. Total assets increased $63.4 million, or 4.9%, since June 30, 2017. Total loans, excluding PCI loans, were $967.4 million at June 30, 2018, increasing $25.3 million, or 2.7%, from year end 2017 and $103.3 million, or 12.0%, from June 30, 2017.  Total PCI loans were $39.9 million at June 30, 2018 versus $44.3 million at year end 2017 and $48.4 million at June 30, 2017.

 

During the second quarter of 2018 total loan growth was $3.1 million, or 0.32%. Construction and land development loans grew by $9.6 million, or 8.7%, and totaled $119.1 million at June 30, 2018. Commercial mortgage loans, the largest category of loans, grew $4.6 million, or 1.2%, and were $376.1 million at June 30, 2018. Offsetting these increases were declining balances in multifamily loans, which declined by $5.6 million, or 9.3%, and in residential 1 – 4 family loans, which declined by $5.1 million, or 2.3%.

 

During the first six months of 2018, loans grew by $25.3 million, or 2.7%. Construction and land development loans grew by $11.3 million, or 10.5%, commercial loans grew by $11.0 million, or 6.9%, and commercial mortgages grew by $9.8 million, or 2.7%. Offsetting these increases were declining balances in residential 1 – 4 family mortgages, which declined by $9.9 million, or 4.4%, and multifamily loans, which decreased $4.7 million, or 8.0%. 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. This purchase resulted in an increase of $8.5 million in consumer installment loans for the six months ended June 30, 2018.

 

The Company’s loan portfolio exhibits balanced growth when comparing June 30, 2018 and June 30, 2017. Total loans grew $103.3 million, or 12.0%, over the time frame with commercial mortgage loans growing by $35.0 million, or 10.2%, followed by growth of $32.8 million, or 23.9%, in commercial loans, $18.4 million, or 18.3%, in construction and land development loans, $8.6 million in consumer installment loans, $5.1 million, or 2.4%, in residential 1-4 family loans and $3.8 million, or 7.6%, in multifamily loans.

 

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

 

LOANS (excluding PCI loans)

(Unaudited)

                                
(Dollars in thousands)  30-Jun-18   31-Mar-18   31-Dec-17   30-Jun-17 
   Amount   % of Loans   Amount   % of Loans   Amount   % of Loans   Amount   % of Loans 
Mortgage loans on real estate:                                        
Residential 1-4 family   217,610    22.50%   222,717    23.10%   227,542    24.16%   212,502    24.59%
Commercial   376,134    38.88    371,494    38.52    366,331    38.89    341,182    39.49 
Construction and land development   119,110    12.31    109,534    11.36    107,814    11.44    100,677    11.65 
Second mortgages   7,387    0.76    7,689    0.80    8,410    0.89    7,537    0.87 
Multifamily   54,329    5.62    59,920    6.21    59,024    6.27    50,511    5.85 
Agriculture   7,467    0.77    7,424    0.77    7,483    0.79    7,985    0.92 
Total real estate loans   782,037    80.84    778,778    80.76    776,604    82.44    720,394    83.37 
Commercial loans   170,065    17.58    170,445    17.67    159,024    16.88    137,261    15.89 
Consumer installment loans   13,717    1.42    13,878    1.44    5,169    0.55    5,107    0.59 
All other loans   1,542    0.16    1,210    0.13    1,221    0.13    1,287    0.15 
Gross loans   967,361    100.00%   964,311    100.00%   942,018    100.00%   864,049    100.00%
Allowance for loan losses   (9,089)        (8,968)        (8,969)        (9,489)     
Loans, net of unearned income  $958,272        $955,343        $933,049        $854,560      

 

The Company’s securities portfolio, excluding restricted equity securities, declined $7.8 million since year end 2017 to total $243.2 million at June 30, 2018. Securities balances declined $16.1 million since June 30, 2017. Net losses of $16,000 were realized during the second quarter of 2018 through sales and call activity. For the first six months of 2018, there have been net gains of $14,000 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 $23.8 million, $22.0 million and $41.4 million at June 30, 2018, December 31, 2017 and June 30, 2017, respectively. There were federal funds sold of $180,000 at June 30, 2018 and $152,000 at June 30, 2017. This compares with federal funds purchased of $4.8 million at December 31, 2017. Interest bearing bank balances were $12.0 million at June 30, 2018 compared with $7.3 million at December 31, 2017 and $29.9 million at June 30, 2017.

 

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

 

SECURITIES PORTFOLIO

(Unaudited)

                                
(Dollars in thousands)  30-Jun-18   31-Mar-18   31-Dec-17   30-Jun-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  $34,745   $34,339   $37,978   $37,601   $40,473   $40,256   $47,450   $46,829 
U.S Government sponsored agencies   9,077    9,124    9,168    9,227    9,247    9,278    2,844    2,790 
State, county, and municipal   120,935    120,079    123,949    123,574    124,032    125,760    123,625    125,833 
Corporate and other bonds   8,539    8,658    7,702    7,814    7,323    7,460    16,087    16,090 
Mortgage backed securities - U.S. Government agencies   5,333    5,135    5,456    5,272    5,551    5,442    4,372    4,254 
Mortgage backed securities - U.S. Government sponsored agencies   22,479    21,828    19,207    18,677    16,985    16,638    16,784    16,547 
Total securities available for sale  $201,108   $199,163   $203,460   $202,165   $203,611   $204,834   $211,162   $212,343 

 

   30-Jun-18   31-Mar-18   31-Dec-17   30-Jun-17 
   Amortized Cost  

Fair

Value

   Amortized Cost  

Fair

Value

   Amortized Cost  

Fair

Value

   Amortized Cost  

Fair

Value

 
Securities Held to Maturity                                        
U.S Government sponsored agencies  $10,000   $9,713   $10,000   $9,745   $10,000   $9,845   $10,000   $9,921 
State, county, and municipal   33,585    33,792    34,111    34,405    35,678    36,567    36,392    37,310 
Mortgage backed securities - U.S. Government agencies   404    409    423    428    468    476    522    533 
Total securities held to maturity  $43,989   $43,914   $44,534   $44,578   $46,146   $46,888   $46,914   $47,764 

 

 7 

 

 

Interest bearing deposits at June 30, 2018 were $971.9 million, an increase of $29.2 million from December 31, 2017 and $27.5 million greater than at June 30, 2017. Time deposits less than or equal to $250,000 have shown the largest dollar volume growth during 2018 with $14.9 million in additional balances and now totaling $452.7 million. Time deposits over $250,000 grew by $6.1 million and were $116.7 million at June 30, 2018. NOW accounts grew by $5.9 million and were $163.0 million at June 30, 2018.

 

As a result primarily of new account promotions at the three branches opened during 2017, money market deposit accounts grew $25.5 million, or 21.3%, from $119.6 million at June 30, 2017 to $145.1 million at June 30, 2018. NOW accounts grew $20.1 million, or 14.1%, since June 30, 2017. These increases have allowed the Bank to decrease balances with brokered time deposits by $26.5 million over the last year, and those balances were only $9.5 million at June 30, 2018.

 

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

 

INTEREST BEARING DEPOSITS

(Unaudited)

                
(Dollars in thousands)                
   30-Jun-18   31-Mar-18   31-Dec-17   30-Jun-17 
NOW  $162,984   $154,236   $157,037   $142,838 
MMDA   145,071    148,404    143,363    119,582 
Savings   94,498    93,724    93,980    90,224 
Time deposits less than or equal to $250,000   452,734    435,481    437,810    451,352 
Time deposits over $250,000   116,657    114,438    110,546    140,418 
Total interest bearing deposits  $971,944   $946,283   $942,736   $944,414 

 

FHLB advances were $90.7 million at June 30, 2018, compared with $101.4 million at December 31, 2017 and $76.5 million at June 30, 2017.

 

Shareholders’ equity was $128.6 million at June 30, 2018, $124.0 million at December 31, 2017 and $121.8 million at June 30, 2017. Shareholder’s equity to assets was 9.5% at June 30, 2018, 9.3% at December 31, 2017 and 9.4% at June 30, 2017.

 

Asset Quality – non-covered assets

 

Nonaccrual loans were $9.3 million at June 30, 2018, decreasing $747,000 during the second quarter of 2018 and increasing $317,000 from December 31, 2017. Nonaccrual loan balances declined by $2.2 million, or 18.9%, since June 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-Jun-18    31-Mar-18    31-Dec-17    30-Sep-17    30-Jun-17 
Nonaccrual loans  $9,343   $10,090   $9,026   $12,677   $11,514 
Criticized (special mention) loans   17,400    19,526    13,573    8,200    10,523 
Classified (substandard) loans   15,181    14,243    13,264    16,886    17,081 
Other real estate owned   3,147    3,166    2,791    2,710    2,387 
Total classified and criticized assets  $35,728   $36,935   $29,628   $27,796   $29,991 

 

Nonperforming assets totaled $12.5 million at June 30, 2018 compared with $11.8 million at December 31, 2017. Nonperforming assets declined $766,000, or 5.8%, during the second quarter of 2018. Nonperforming assets decreased $1.4 million, or 10.2%, since June 30, 2017. There were net recoveries of $121,000 in the second quarter of 2018.

 

The allowance for loan losses equaled 97.3% of nonaccrual loans at June 30, 2018, compared with 88.9% at March 31, 2018, 99.4% at December 31, 2017 and 82.4% at June 30, 2017. The ratio of nonperforming assets to loans and OREO was 1.29% at June 30, 2018, 1.37% at March 31, 2018, 1.25% at December 31, 2017 and 1.60% at June 30, 2017.

 

 8 

 

 

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

 

ALLOWANCE FOR LOAN LOSSES

(Unaudited)

                    
(Dollars in thousands)  2018   2017 
   Second   First   Fourth   Third   Second 
   Quarter   Quarter   Quarter   Quarter   Quarter 
Allowance for loan losses:                         
Beginning of period  $8,968   $8,969   $8,667   $9,489   $9,513 
Provision for loan losses   -    -    400    150    - 
Net (charge-offs) recoveries   121    (1)   (98)   (972)   (24)
End of period  $9,089   $8,968   $8,969   $8,667   $9,489 

 

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-Jun-18    31-Mar-18    31-Dec-17    30-Sep-17    30-Jun-17 
Nonaccrual loans  $9,343   $10,090   $9,026   $12,677   $11,514 
Loans past due over 90 days and accruing interest   -    -    -    -    - 
Total nonperforming loans   9,343    10,090    9,026    12,677    11,514 
Other real estate owned   3,147    3,166    2,791    2,710    2,387 
Total nonperforming assets  $12,490   $13,256   $11,817   $15,387   $13,901 
                          
Allowance for loan losses to loans   0.94%   0.93%   0.95%   0.97%   1.10 
Allowance for loan losses to nonaccrual loans   97.28    88.88    99.37    68.37    82.41 
Nonperforming assets to loans and other real estate   1.29    1.37    1.25    1.72    1.60 
Net charge-offs/(recoveries) for quarter to average loans, annualized   0.05%   -%   0.04%   0.45%   0.01 

 

 

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

 

NONACCRUAL LOANS (excluding PCI loans)

(Unaudited)

        
(Dollars in thousands)  30-Jun-18   31-Dec-17   30-Jun-17 
   Amount   Amount   Amount 
Mortgage loans on real estate:               
Residential 1-4 family  $1,578   $1,962   $2,130 
Commercial   2,274    1,498    3,548 
Construction and land development   5,184    4,277    4,296 
Second mortgages   -    68    - 
Agriculture   -    -    258 
Total real estate loans  $9,036   $7,805   $10,232 
Commercial loans   307    1,214    1,272 
Consumer installment loans   -    7    10 
Gross loans  $9,343   $9,026   $11,514 

 

Capital Requirements

 

The Company’s ratio of total risk-based capital was 13.3% at June 30, 2018 compared with 12.7% at December 31, 2017. The tier 1 risk-based capital ratio was 12.5% at June 30, 2018 and 11.9% at December 31, 2017. The Company’s tier 1 leverage ratio was 10.0% at June 30, 2018 and 9.7% 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 12.1% at June 30, 2018 and 11.5% at December 31, 2017.

 

Earnings Conference Call and Webcast

 

The Company will host a conference call for interested parties on Thursday, July 26, 2018, at 10:00 a.m. Eastern Time to discuss the financial results for the second 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.

 

 9 

 

 

A replay of the conference call will be available from 12:00 noon Eastern Time on July 26, 2018, until 9:00 a.m. Eastern Time on August 9, 2018. The replay will be available by dialing 877-344-7529 and entering access code 10122400 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, 19 of which are in Virginia and six of which are in Maryland.  The Bank also operates one loan production office in Virginia.  The Bank will open a new branch office in the Stonehenge Village development in Midlothian, Virginia on July 31, 2018.

 

Additional information on the Bank is available on the Bank’s website at www.essexbank.com. For information on Community Bankers Trust Corporation, please visit its website at www.cbtrustcorp.com.

 

Forward-Looking Statements

 

This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements with respect to the Company’s operations, performance, future strategy and goals. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the effects of and changes in the following: the quality or composition of the Company’s loan or investment portfolios, including collateral values and the repayment abilities of borrowers and issuers; assumptions that underlie the Company’s allowance for loan losses; general economic and market conditions, either nationally or in the Company’s market areas; the interest rate environment; competitive pressures among banks and financial institutions or from companies outside the banking industry; real estate values; the demand for deposit, loan and investment products and other financial services; the demand, development and acceptance of new products and services; the performance of vendors or other parties with which the Company does business; time and costs associated with de novo branching, acquisitions, dispositions and similar transactions; the realization of gains and expense savings from acquisitions, dispositions and similar transactions; consumer profiles and spending and savings habits; levels of fraud in the banking industry; the level of attempted cyber-attacks in the banking industry; the securities and credit markets; costs associated with the integration of banking and other internal operations; the soundness of other financial institutions with which the Company does business; inflation; technology; and legislative and regulatory requirements. Many of these factors and additional risks and uncertainties are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 and other reports filed from time to time by the Company with the Securities and Exchange Commission. This press release speaks only as of its date, and the Company disclaims any duty to update the information in it.

 

Contact: Bruce E. Thomas

Executive Vice President/Chief Financial Officer

Community Bankers Trust Corporation

804-934-9999 

 

 10 

 

 

COMMUNITY BANKERS TRUST CORPORATION            
CONSOLIDATED BALANCE SHEETS            
UNAUDITED            
(Dollars in thousands, except per share data)            
   30-Jun-18   31-Dec-17   30-Jun-17 
Assets               
Cash and due from banks  $11,607   $14,642   $11,342 
Interest bearing bank deposits   12,020    7,316    29,908 
Federal funds sold   180    -    152 
Total cash and cash equivalents   23,807    21,958    41,402 
                
Securities available for sale, at fair value   199,163    204,834    212,343 
Securities held to maturity, at cost   43,989    46,146    46,914 
Equity securities, restricted, at cost   8,935    9,295    8,048 
Total securities   252,087    260,275    267,305 
                
Loans   967,361    942,018    864,049 
Purchased credit impaired (PCI) loans   39,911    44,333    48,387 
Allowance for loan losses   (9,089)   (8,969)   (9,489)
Allowance for loan losses – PCI loans   (200)   (200)   (200)
Net loans   997,983    977,182    902,747 
                
Bank premises and equipment, net   30,423    30,198    29,771 
Bank premises and equipment held for sale   552    -    - 
Other real estate owned   3,147    2,791    2,387 
Bank owned life insurance   28,466    28,099    27,723 
Core deposit intangibles, net   -    -    82 
Other assets   17,403    15,687    19,090 
Total assets  $1,353,868   $1,336,190   $1,290,507 
                
Liabilities               
Deposits:               
Noninterest bearing  $151,956   $153,028   $138,471 
Interest bearing   971,944    942,736    944,414 
Total deposits   1,123,900    1,095,764    1,082,885 
                
Federal funds purchased   -    4,849    - 
Federal Home Loan Bank advances   90,691    101,429    76,494 
Trust preferred capital notes   4,124    4,124    4,124 
Other liabilities   6,509    6,021    5,247 
Total liabilities   1,225,224    1,212,187    1,168,750 
                
Shareholders' Equity               

Common stock (200,000,000 shares authorized $0.01 par value;

22,111,495, 22,072,523 and 22,037,221 shares issued and outstanding, respectively)

   221    221    220 
Additional paid in capital   148,242    147,671    147,250 
Retained deficit   (17,556)   (23,932)   (25,701)
Accumulated other comprehensive (loss) income   (2,263)   43    (12)
Total shareholders' equity   128,644    124,003    121,757 
Total liabilities and shareholders' equity  $1,353,868   $1,336,190   $1,290,507 

 

 11 

 

 

COMMUNITY BANKERS TRUST CORPORATION            
CONSOLIDATED STATEMENTS OF INCOME            
UNAUDITED                        
(Dollars in thousands)  YTD   Three months ended   YTD   Three months ended 
   2018   30-Jun-18   31-Mar-18   2017   30-Jun-17   31-Mar-17 
Interest and dividend income                              
Interest and fees on loans  $22,229   $11,353   $10,876   $19,549   $9,952   $9,597 
Interest and fees on PCI loans   2,672    1,274    1,398    2,932    1,453    1,479 
Interest on federal funds sold   1    1    -    -    -    - 
Interest on deposits in other banks   109    69    40    78    52    26 
Interest and dividends on securities                              
  Taxable   2,452    1,266    1,186    2,406    1,157    1,249 
  Nontaxable   1,126    547    579    1,203    606    597 
Total interest and dividend income   28,589    14,510    14,079    26,168    13,220    12,948 
Interest expense                              
Interest on deposits   4,498    2,355    2,143    3,723    1,944    1,779 
Interest on borrowed funds   977    508    469    604    302    302 
Total interest expense   5,475    2,863    2,612    4,327    2,246    2,081 
                               
Net interest income   23,114    11,647    11,467    21,841    10,974    10,867 
                               
Provision for loan losses   -    -    -    -    -    - 
Net interest income after provision for loan losses   23,114    11,647    11,467    21,841    10,974    10,867 
                               
Noninterest income                              
Service charges and fees   1,192    611    581    1,107    582    525 
Gain (loss) on securities transactions, net   14    (16)   30    132    37    95 
Gain on sale of loans   53    53    -    -    -    - 
Income on bank owned life insurance   367    184    183    384    192    192 
Mortgage loan income   191    80    111    104    71    33 
Other   351    223    128    303    155    148 
Total noninterest income   2,168    1,135    1,033    2,030    1,037    993 
                               
Noninterest expense                              
Salaries and employee benefits   10,868    5,019    5,849    9,483    4,843    4,640 
Occupancy expenses   1,581    769    812    1,472    740    732 
Equipment expenses   658    344    314    544    260    284 
FDIC assessment   404    198    206    365    164    201 
Data processing fees   985    499    486    965    477    488 
Amortization of intangibles   -    -    -    816    339    477 
Other real estate expenses, net   95    45    50    61    34    27 
Other operating expenses   2,962    1,313    1,649    2,970    1,528    1,442 
Total noninterest expense   17,553    8,187    9,366    16,676    8,385    8,291 
                               
Income before income taxes   7,729    4,595    3,134    7,195    3,626    3,569 
Income tax expense   1,353    813    540    1,768    692    1,076 
Net income  $6,376   $3,782   $2,594   $5,427   $2,934   $2,493 

 

 12 

 

 

COMMUNITY BANKERS TRUST CORPORATION             
CONSOLIDATED STATEMENTS OF INCOME             
UNAUDITED                    
(Dollars in thousands)  Three months ended 
    30-Jun-18    31-Mar-18    31-Dec-17    30-Sep-17    30-Jun-17 
Interest and dividend income                         
Interest and fees on loans  $11,353   $10,876   $10,625   $10,127   $9,952 
Interest and fees on PCI loans   1,274    1,398    1,378    1,423    1,452 
Interest on federal funds sold   1    -    -    1    - 
Interest on deposits in other banks   69    40    53    65    53 
Interest and dividends on securities                         
  Taxable   1,266    1,186    1,105    1,171    1,157 
  Nontaxable   547    579    597    602    606 
Total interest and dividend income   14,510    14,079    13,758    13,389    13,220 
Interest expense                         
Interest on deposits   2,355    2,143    2,121    2,053    1,944 
Interest on borrowed funds   508    469    388    310    302 
Total interest expense   2,863    2,612    2,509    2,363    2,246 
                          
Net interest income   11,647    11,467    11,249    11,026    10,974 
                          
Provision for loan losses   -    -    400    150    - 
Net interest income after provision for loan losses   11,647    11,467    10,849    10,876    10,974 
                          
Noninterest income                         
Service charges and fees   611    581    572    559    582 
Gain (loss) on securities transactions, net   (16)   30    30    48    37 
Gain on sale of loans   53    -    -    -    - 
Income on bank owned life insurance   184    183    187    188    192 
Mortgage loan income   80    111    79    58    71 
Other   223    128    177    145    155 
Total noninterest income   1,135    1,033    1,045    998    1,037 
                          
Noninterest expense                         
Salaries and employee benefits   5,019    5,849    4,990    4,951    4,843 
Occupancy expenses   769    812    801    857    740 
Equipment expenses   344    314    295    305    260 
FDIC assessment   198    206    176    185    164 
Data processing fees   499    486    457    501    477 
Amortization of intangibles   -    -    20    62    339 
Other real estate expenses, net   45    50    64    37    34 
Other operating expenses   1,313    1,649    1,515    1,641    1,528 
Total noninterest expense   8,187    9,366    8,318    8,539    8,385 
                          
Income before income taxes   4,595    3,134    3,576    3,335    3,626 
Income tax expense   813    540    4,216    919    692 
Net income (loss)  $3,782   $2,594   $(640)  $2,416   $2,934 

 

 13 

 

 

COMMUNITY BANKERS TRUST CORPORATION             
NET INTEREST MARGIN ANALYSIS             

AVERAGE BALANCE SHEETS

UNAUDITED

            
(Dollars in thousands)                        
   Three months ended June 30, 2018   Three months ended June 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  $958,955   $11,353    4.75%  $860,393   $9,952    4.64%
PCI loans,  including fees   41,157    1,274    12.24    49,253    1,453    11.80 
   Total loans   1,000,112    12,627    5.06    909,646    11,405    5.03 
Interest bearing bank balances   14,819    69    1.85    19,225    52    1.10 
Federal funds sold   87    1    1.82    137    -    1.04 
Securities (taxable)   174,781    1,266    2.90    182,227    1,157    2.54 
Securities (tax exempt)(1)   76,864    693    3.61    85,972    918    4.27 
Total earning assets   1,266,663    14,656    4.64    1,197,207    13,532    4.53 
Allowance for loan losses   (9,271)             (9,697)          
Non-earning assets   92,502              89,222           
   Total assets  $1,349,894             $1,276,732           
                               
LIABILITIES AND                              
SHAREHOLDERS’ EQUITY                              
Demand - interest bearing  $301,515   $328    0.44   $241,376   $154    0.26 
Savings   94,096    61    0.26    91,723    60    0.26 
Time deposits   561,056    1,966    1.41    598,965    1,730    1.16 
Total interest bearing deposits   956,667    2,355    0.99    932,064    1,944    0.84 
Short-term borrowings   4,771    26    2.20    517    2    1.37 
FHLB and other borrowings   103,188    482    1.87    84,761    300    1.42 
Total interest bearing liabilities   1,064,626    2,863    1.08    1,017,342    2,246    0.89 
Noninterest bearing deposits   152,498              133,320           
Other liabilities   5,909              5,654           
Total liabilities   1,223,033              1,156,316           
Shareholders’ equity   126,861              120,416           
Total liabilities and                              
   Shareholders’ equity  $1,349,894             $1,276,732           
Net interest earnings       $11,793             $11,286      
Interest spread             3.56%             3.64%
Net interest margin             3.73%             3.78%
                               
Tax-equivalent adjustment:                              
Securities       $146             $312      

 

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

 

 14 

 

 

COMMUNITY BANKERS TRUST CORPORATION             
NET INTEREST MARGIN ANALYSIS             
AVERAGE BALANCE SHEETS             
UNAUDITED
(Dollars in thousands)		             
   Six months ended June 30, 2018   Six months ended June 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  $951,201   $22,229    4.71%  $849,839   $19,549    4.64%
PCI loans,  including fees   42,257    2,672    12.58%   50,011    2,932    11.66 
   Total loans   993,458    24,901    5.05%   899,850    22,481    5.04 
Interest bearing bank balances   11,955    109    1.83%   14,207    78    1.11 
Federal funds sold   72    1    1.71%   93    -    1.00 
Securities (taxable)   175,667    2,452    2.79%   182,734    2,406    2.63 
Securities (tax exempt)(1)   79,091    1,424    3.60%   85,353    1,822    4.27 
Total earning assets   1,260,243    28,887    4.62%   1,182,237    26,787    4.57 
Allowance for loan losses   (9,224)             (9,709)          
Non-earning assets   90,567              88,919           
   Total assets  $1,341,586             $1,261,447           
                               
LIABILITIES AND                              
SHAREHOLDERS’ EQUITY                              
Demand - interest bearing  $301,415   $659    0.44%  $240,110   $295    0.25 
Savings   93,604    121    0.26%   91,829    121    0.27 
Time deposits   556,546    3,718    1.35%   586,722    3,307    1.14 
Total interest bearing deposits   951,565    4,498    0.95%   918,661    3,723    0.82 
Short-term borrowings   3,563    37    2.12%   1,306    7    1.14 
FHLB and other borrowings   104,354    940    1.79%   87,354    597    1.38 
Total interest bearing liabilities   1,059,482    5,475    1.04%   1,007,321    4,327    0.87 
Noninterest bearing deposits   150,446              130,091           
Other liabilities   5,731              5,534           
Total liabilities   1,215,659              1,142,946           
Shareholders’ equity   125,927              118,500           
Total liabilities and                              
   shareholders’ equity  $1,341,586             $1,261,446           
Net interest earnings       $23,412             $22,460      
Interest spread             3.58%             3.70%
Net interest margin             3.75%             3.83%
                               
Tax-equivalent adjustment:                              
Securities       $299             $619      

 

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

 

 15