2014

Community Bankers Trust Corporation Reports Results for First Quarter 2013 Quarterly Net Income of $1.3 million Up 34% from Prior Year

GLEN ALLEN, Va., April 26, 2013 /PRNewswire/ -- Community Bankers Trust Corporation (the "Company") (NASDAQ: ESXB), the holding company for Essex Bank (the "Bank"), today reported results for the first quarter of 2013 including the following:

(Logo:  http://photos.prnewswire.com/prnh/20120727/PH46884LOGO )

  • Net income for the first quarter of 2013 was $1.3 million compared with net income of $990,000 for the first quarter of 2012 and net income of $1.6 million for the fourth quarter of 2012.
  • The ratio of nonperforming assets to loans and other real estate has fallen below 5% and was 4.94% at March 31, 2013 compared with 6.89% at March 31, 2012.
  • Noninterest expense decreased $1.2 million, or 11.4%, in the first quarter of 2013 when compared to the same period in 2012.
  • The cost of interest bearing liabilities decreased $160,000, or 7.8%, on a linked quarter basis and $818,000, or 30.2%, year over year.
  • The ratio of the allowance for loan losses to nonaccrual loans was 64.64% at March 31, 2013 compared with 61.38% at December 31, 2012 and 54.43% at March 31, 2012.
  • The ratio of the allowance for loan losses to nonperforming assets was 42.07% compared with 39.94% at December 31, 2012 and 36.01% at March 31, 2012.
  • Adding diversity to the loan portfolio, multifamily loans increased $7.7 million, or 26.7%, on a linked quarter basis and increased $16.6 million, or 83.7%, year over year.

Rex L. Smith, III, President and Chief Executive Officer of the Company and the Bank, stated,  "The first quarter has historically been our slowest time in terms of growth as well as earnings, but I am pleased at the increase of 34% in net income on a year over year basis.  I believe it is a good indicator for what we can expect for the remainder of 2013 based on year over year improvement in asset quality, the level of reserves and trends in noninterest income and noninterest expenses.  Additionally, we continue to make significant progress in the reduction of non-performing assets.  This was evidenced by a linked quarter decrease in nonperforming loans of 9.9% and a decrease from one year ago of 25.3%.  There was also a net reduction in other real estate owned this quarter of 10.0%."

Smith added, "We are aggressively pursuing new relationships for the Bank in all our major markets and continue to look for opportunities to expand our branch network in a cost effective manner.  I believe we will be able to expand our footprint and gain valuable business opportunities because of our capital and liquidity position.  Lastly, we are working diligently with our primary regulators and the Treasury to begin a plan to repay our TARP principal in a safe and timely fashion.  I am excited about the future of the Bank and believe that 2013 will be another year of significant progress for the franchise and our stockholders."

RESULTS OF OPERATIONS

Net income was $1.3 million for the first quarter of 2013. This compares with net income of $990,000 in the first quarter of 2012 and net income of $1.6 million in the fourth quarter of 2012.  Net income available to common stockholders was $1.0 million in the first quarter of 2013 compared with net income available to common stockholders of $714,000 in the first quarter of 2012 and net income available to common stockholders of $1.3 million in the fourth quarter of 2012.  Earnings per common share, basic and fully diluted, were $0.05 per share for the first quarter of 2013 compared with $0.03 per share for the first quarter of 2012 and $0.06 per share for the fourth quarter of 2012.

The increase of $334,000 in net income year over year was driven by a decrease in noninterest expense of $1.2 million, or 11.4%.  A reduction in the FDIC assessment of $417,000 was the largest noninterest expense decrease when comparing the first quarter of 2013 to the same period in 2012.  Also decreasing was FDIC indemnification asset amortization, which was $1.5 million in the first quarter of 2013 compared with $1.9 million in the first quarter of 2012, a decline of $381,000, or 20.2%.  Salaries and employee benefits decreased $245,000 year over year, and other operating expenses decreased $112,000 year over year.  Improvement in noninterest expense was offset by a decrease in net interest income after provision for loan losses of $575,000 and a decrease of $95,000 in noninterest income.  Gain/loss on sale of other real estate owned (OREO) reflected losses and write-downs on bank owned properties of $630,000 in the first quarter of 2013 compared with losses and write-downs of $177,000 for the same period of 2012.  Management continues to resolve problem credits with aggressive valuation and disposition.

The following table presents summary income statements for the three months ended March 31, 2013, December 31, 2012 and March 31, 2012.

 

 

SUMMARY INCOME STATEMENT


(Dollars in thousands)

For the three months ended


March 31, 2013


December 31, 2012


March 31, 2012

Interest income

$ 12,166


$ 12,919


$ 13,809

Interest expense

1,894


2,054


2,712

Net interest income

10,272


10,865


11,097

Provision for loan losses

-


450


250

Net interest income after provision






  for loan losses

10,272


10,415


10,847

Noninterest income

730


671


825

Noninterest expense

9,115


9,065


10,292

Net income before income taxes

1,887


2,021


1,380

Income tax expense

563


448


390

Net income

1,324


1,573


990

Dividends on preferred stock

221


221


221

Accretion of preferred stock discount

58


55


55

Net income available






  to common stockholders

$ 1,045


$ 1,297


$ 714







EPS Basic

$ 0.05


$ 0.06


$ 0.03

EPS Diluted

$ 0.05


$ 0.06


$ 0.03

 

Interest Income

Interest income was $12.2 million for the first quarter of 2013, a decrease of $753,000 from the fourth quarter of 2012. Interest and fees on total loans decreased $411,000 on a linked quarter basis.  This decrease was the result of a decline in the yield on the average balance of loans of 27 basis points, or 4.2%.  Loans yielded 6.50% in the fourth quarter of 2012 compared with 6.23% in the first quarter of 2013.  Competition for loans is fierce, and new loan pricing continues to trend lower.  The average balance of total loans partially mitigated this effect, increasing $11.1 million on a linked quarter basis.  Interest income on securities decreased $337,000, on a linked quarter basis, as lower rates are not only affecting new securities offerings, but negatively impacting yields on currently owned mortgage backed securities, SBA floaters and callable issues.

Interest income declined $1.6 million, or 11.9%, when comparing the first quarters of 2013 and 2012.  Interest income was $13.8 million in the first quarter of 2012 and declined to $12.2 million in the first quarter of 2013.  Interest and fees on FDIC covered loans declined $1.3 million when comparing the first quarter of 2013 to the first quarter of 2012.  This was due to volume decreases of $12.8 million on the average balance of FDIC covered loans, when comparing the first quarter of 2013 to the same period in 2012, combined with a decline in the yield on FDIC covered loans from 16.39% to 13.03%.  Interest and fees on loans, non-covered, was $7.5 million in the first quarter of 2013 compared with $7.7 million for the same period in 2012.  The yield on the average balance of loans, non-covered, declined from 5.60% in the first quarter of 2012 to 5.26% in the first quarter of 2013.  This decline was mitigated by an increase in the average balance of loans, from $549.0 million for the first quarter of 2012 to $579.6 million for the same period in 2013, resulting in a decrease of $176,000, or 2.3%, in interest income on loans, from $7.7 million in the first quarter of 2012 to $7.5 million in the first quarter of 2013. Tax-equivalent interest income on securities declined $193,000, or 8.6%, from $2.3 million in the first quarter of 2012 to $2.1 million in the first quarter of 2013.  The yield on the securities portfolio, on a tax-equivalent basis, decreased from 3.06% in the first quarter of 2012 to 2.60% in the first quarter of 2013. 

Interest Expense

Interest expense was $1.9 million for the first quarter of 2013 compared with interest expense of $2.1 million in the fourth quarter of 2012, an improvement of $160,000, or 7.8%.  Average interest-bearing deposits increased $4.4 million during the quarter; however, the cost of interest bearing liabilities declined from 0.88% in the fourth quarter of 2012 to 0.83% in the first quarter of 2013

Year over year, interest expense declined $818,000, from $2.7 million in the first quarter of 2012 to $1.9 million in the first quarter of 2013. This expense decline of 30.2% resulted from decreases in cost.  The cost of interest bearing liabilities declined from 1.20% in the first quarter of 2012 to 0.83% in the first quarter of 2013.  The cost of deposits declined similarly from 1.09% in the first quarter of 2012 to 0.79% for the first quarter of 2013.  The cost of FHLB and other borrowings also exhibited improvement, from 3.50% in the first quarter of 2012 to 1.45% in the first quarter of 2013.

Net Interest Income

Net interest income was $10.3 million for the quarter ended March 31, 2013, compared with $10.9 million for the quarter ended December 31, 2012.  This represents a decrease of $593,000, or 5.5%.  On a tax equivalent basis, net interest income was $10.3 million for the first quarter of 2013 compared with tax equivalent net interest income of $10.9 million for the fourth quarter of 2012.  The tax equivalent net interest margin decreased from 4.39% in the fourth quarter of 2012 to 4.17% in the first quarter of 2013. The interest spread decreased from 4.34% to 4.10%, on a linked quarter basis. 

Year over year, net interest income decreased $825,000, or 7.4%, from $11.1 million in the first quarter of 2012 to $10.3 million in the first quarter of 2013.  This was primarily the result of a decrease in the Company's interest spread, from 4.59% in the first quarter of 2012 to 4.10% in the first quarter of 2013.  While the cost of interest bearing liabilities declined 37 basis points, year over year, from 1.20% to 0.83%, the yield on earning assets declined by a larger degree, from 5.79% to 4.93%, or 86 basis points.  This decreased the Company's net interest margin from 4.65% in the first quarter of 2012 to 4.17% for the same period in 2013. 

The following table compares the Company's net interest margin, on a tax-equivalent basis, for the three months ended March 31, 2013, December 31, 2012 and March 31, 2012.

 

NET INTEREST MARGIN


(Dollars in thousands)

For the three months ended


March 31, 2013


December 31, 2012


March 31, 2012







Average interest earning assets

$             1,006,528


$                996,023


$              958,921

Interest income

$                  12,166


$                  12,919


$                13,809

Interest income - tax equivalent

$                  12,243


$                  12,988


$                13,870

Yield on interest earning assets

4.93%


5.22%


5.79%

Average interest bearing liabilities

$              1,009,151


$                 927,856


$              907,829

Interest expense

$                     1,894


$                     2,054


$                  2,712

Cost of interest bearing liabilities

0.83%


0.88%


1.20%

Net interest income

$                   10,272


$                   10,865


$                11,097

Net interest income - tax equivalent

$                   10,349


$                   10,934


$                11,158

Interest spread

4.10%


4.34%


4.59%

Net interest margin

4.17%


4.39%


4.65%

Provision for Loan Losses

There was no provision for loan losses for the quarter ended March 31, 2013 compared with a provision for loan losses of $450,000 for the quarter ended December 31, 2012 and a provision for loan losses of $250,000 for the quarter ended March 31, 2012.  The lack of the need for a provision for the current quarter was the result of increased coverage levels for the ratio of allowance for loan losses to nonperforming loans and the ratio of allowance for loan losses to nonaccrual loans and a decrease in both the level of nonperforming assets to loans and other real estate and the level of net charge-offs for the quarter.

The Company records a separate provision for loan losses for its non-covered loan portfolio and its FDIC covered loan portfolio.  The provision for loan losses on covered loans was a $250,000 credit for the quarter ended March 31, 2012, the result of improvement in expected losses on the Company's FDIC covered portfolio.  There was a provision of $500,000 for the quarter ended March 31, 2012 on the non-covered portfolio.  As a result, the reported provision for loan losses reflects both the covered credit of $250,000 and the non-covered provision of $500,000, or a net provision of $250,000 for the quarter ended March 31, 2012. The provision for loan losses for the quarter ended December 31, 2012 related to the non-covered loan portfolio.

Noninterest Income

Noninterest income was $730,000 for the first quarter of 2013 compared with $671,000 for the fourth quarter of 2012.  Gain on sales of securities was $278,000 in the first quarter of 2013, an increase of $140,000, or 101.4%, over gain on sales of securities of $138,000 in the fourth quarter of 2012.  Gain/(loss) on OREO through the sale or write-down of bank owned properties reflected losses of $630,000 in the first quarter of 2013 and $660,000 in the fourth quarter of 2012, an improvement of $30,000.  These results were offset by a decline of $66,000 in service charges on deposit accounts and a decrease of $45,000 in other noninterest income from the fourth quarter of 2012 to the first quarter of 2013.

Year over year, noninterest income decreased $95,000, from $825,000 in the first quarter of 2012 to $730,000 in the first quarter of 2013.  Gain/(loss) on OREO was the largest contributor to this decrease, which reflected a loss on the sale and write-down of bank properties of $630,000 in the first quarter of 2013 compared with a loss of $177,000 in the first quarter of 2012.  Other noninterest income declined $82,000 and was $419,000 in the first quarter of 2013 compared with $501,000 in the first quarter of 2012.  Offsetting these decreases were an increase of $394,000 in gains/(loss) on sale of securities.  Gains/(loss) on sale of securities reflected gains of $278,000 in the first quarter of 2013 and losses of $116,000 in the first quarter of 2012.  Also, service charges on deposit accounts increased $46,000 year-over-year, and were $663,000 for the first quarter of 2013 compared with $617,000 for the first quarter of 2012.

Noninterest Expense

On a linked quarter basis, noninterest expenses totaled $9.1 million for the three months ended March 31, 2013 and $9.1 million for the quarter ended December 31, 2012, and increased $50,000, or 0.5%.  Fees on data processing increased $202,000, from $335,000 in the fourth quarter of 2012 to $537,000 in the first quarter of 2013.  During the fourth quarter of 2012, the Company received a reimbursement of $177,000 from its third party core processor for indirect expenses related to its processing delays as a result of Hurricane Sandy.  FDIC assessment increased $130,000 on a linked quarter basis. Accounting adjustments positively affected the fourth quarter 2012 expense because of a change in the Bank's risk classification and an adjustment in the amortization of the FDIC's 2010 prepaid assessment.

Offsetting these increases to noninterest expense on a linked quarter basis was a decline of $168,000 in other operating expenses, which were $1.5 million in the fourth quarter of 2012 and $1.4 million in the first quarter of 2013.  Salaries and employee benefits decreased $75,000 on a linked quarter basis and professional fees and occupancy expenses decreased $34,000 and $28,000, respectively.

Noninterest expenses declined $1.2 million, or 11.4%, when comparing the first quarter of 2013 to the same period in 2012.  FDIC assessment declined $417,000, from $584,000 in the first quarter of 2012 to $167,000 in the first quarter of 2013.  FDIC indemnification asset amortization decreased $381,000, year-over-year, from $1.9 million for the first quarter of 2012 to $1.5 million for the same period in 2013.  Salaries and employee benefits decreased $245,000, from $4.2 million in the first quarter of 2012 to $4.0 million in the first quarter of 2013.  Other operating expenses declined $112,000, from $1.5 million in the first quarter of 2012 to $1.4 million in the first quarter of 2013.  Other decreases, year-over-year, were in professional fees ($35,000), equipment expense ($28,000), and legal fees ($11,000)

Only occupancy expenses and data processing expenses exhibited year-over-year increases.  Occupancy expenses increased $32,000, from $631,000 in the first quarter of 2012 to $663,000 for the same period in 2013.  Data processing fees increased $20,000, from $517,000 in the first quarter of 2012 to $537,000 in the first quarter of 2013.

Income Taxes

Income tax expense was $563,000 for the three months ended March 31, 2013, compared with income tax expense of $448,000 in the fourth quarter of 2012.  Income tax expense was $390,000 in the first quarter of 2012.  The effective tax rate was 29.8% for the first quarter of 2013 compared with 22.2% for the fourth quarter of 2012 and 28.3% for the first quarter of 2012.

FINANCIAL CONDITION

At March 31, 2012, the Company had total assets of $1.1 billion, a decrease of $36.2 million, or 3.1%, from total assets of $1.2 billion at December 31, 2012. Total loans were $662.2 million at March 31, 2013, increasing $2.1 million from $660.1 million at December 31, 2012.   The carrying value of FDIC covered loans declined $2.3 million, or 2.7%, from December 31, 2012 and were $82.4 million at March 31, 2013. Non-covered loans equaled $579.8 million at March 31, 2013, increasing $4.3 million since December 31, 2012.  

Multifamily loans increased $7.7 million, or 26.7%, and ended the first quarter of 2013 at $36.3 million. Since March 31, 2012 multifamily loans have increased $16.6 million, or 83.7%, and exhibited the largest dollar increase for both the first quarter of 2013 and over the March 31, 2013 to March 31, 2012 time frame.  Commercial loans increased $3.1 million, or 4.0%, and were $80.9 million at March 31, 2013.  Commercial real estate loans decreased $6.7 million, or 2.7%, during the first quarter of 2013 and were $239.8 million at March 31, 2013. 

The following table shows the composition of the Company's non-covered loan portfolio at March 31, 2013, December 31, 2012 and March 31, 2012.

 

 

NON-COVERED LOANS






(Dollars in thousands)

March 31, 2013


December 31, 2012


March 31, 2012



Amount

% of Non-

Covered

Loans


Amount

% of Non-

Covered

Loans


Amount

% of Non-

Covered

 Loans

Mortgage loans on real estate:










Residential 1-4 family

$      137,302

23.68%


$  135,420

23.53%


$  127,111

23.15%


Commercial

239,794

41.35%


246,521

42.83%


231,274

42.13%


Construction and land development

60,565

10.44%


61,127

10.62%


67,240

12.25%


Second mortgages

7,326

1.26%


7,230

1.26%


8,458

1.54%


Multifamily

36,344

6.27%


28,683

4.98%


19,785

3.60%


Agriculture

9,616

1.66%


10,359

1.80%


10,897

1.99%


   Total real estate loans

490,947

84.66%


489,340

85.01%


464,765

84.66%

Commercial loans

80,942

13.96%


77,835

13.52%


73,959

13.47%

Consumer installment loans

6,523

1.12%


6,929

1.20%


8,597

1.57%

All other loans

1,524

0.26%


1,526

0.27%


1,659

0.30%


   Gross loans

579,936

100.00%


575,630

100.00%


548,980

100.00%

Allowance for loan losses

(12,258)



(12,920)



(13,935)


Net unearned income/unamortized









     premium on loans

(129)



(148)



(191)


Non-covered loans, net of unearned
      income

$      567,549



$  562,562



$  534,854













The Company's securities portfolio, excluding equity securities, decreased $38.6 million, or 11.0%, from $351.4 million at December 31, 2012 to $312.8 at March 31, 2013. Realized gains of $278,000 occurred during the first quarter of 2013 through sales and call activity.  The Company took a short-term position in a $40 million U.S. Treasury issue at December 31, 2012 to fully invest short-term excess cash balances on deposit by local municipal governments.  The issue matured in the first quarter of 2013 and is the primary factor for the decrease in securities balances in the first quarter of 2013.  The maturity of these funds was not reinvested but was offset by a decline in public funds.

The Company had cash and cash equivalents of $24.1 million at both March 31, 2013 and December 31, 2012.  There was $992,000 in Federal funds purchased at March 31, 2013 compared with $5.4 million in Federal funds purchased at December 31, 2012. 

The following table shows the composition of the Company's securities portfolio, excluding equity securities, at March 31, 2013, December 31, 2012 and March 31, 2012.

 

SECURITIES PORTFOLIO






(Dollars in thousands)

March 31, 2013


December 31, 2012


March 31, 2012


 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

$       121,353

$    121,355


$       153,480

$   153,277


$     15,381

$    15,455

U.S. Government sponsored agencies

-

-


500

503


1,003

1,023

State, county and municipal

117,964

123,059


112,110

117,596


78,078

81,371

Corporate and other bonds

5,453

5,519


7,530

7,618


6,788

6,739

Mortgage backed securities - U.S. Government agencies

10,996

11,272


15,192

15,560


65,436

65,598

Mortgage backed securities - U.S. Government sponsored agencies

12,634

12,885


14,349

14,524


64,509

65,125

   Total securities available for sale

$      268,400

$    274,090


$       303,161

$   309,078


$    231,195

$    235,311




















March 31, 2013


December 31, 2012


March 31, 2012


 Amortized

Cost

 Fair

Value


 Amortized

Cost

 Fair

Value


 Amortized

 Cost

 Fair

Value

Securities Held to Maturity









State, county and municipal

$        11,819

$      12,865


$        11,825

$   12,967


$      12,161

$     13,311

Mortgage backed securities - U.S. Government agencies

8,360

8,923


9,112

9,727


11,936

12,722

Mortgage backed securities - U.S. Government sponsored agencies

18,498

19,534


21,346

22,534


35,020

36,801

   Total securities held to maturity

$       38,677

$      41,322


$        42,283

$   45,228


$      59,117

$     62,834












 

Interest bearing deposits at March 31, 2013 were $860.7 million, a decrease of $35.6 million from December 31, 2012. Time deposits $100,000 and over decreased $18.8 million during the quarter ended March 31, 2013 as management did not renew a $20 million public funds certificate of deposit.  NOW accounts decreased $16.1 million, or 11.3%, during the first quarter of 2013, and were impacted by seasonality and anticipated outflows of public funds accumulated in the fourth quarter of 2012.  Time deposits less than $100,000 decreased $2.5 million during the first quarter of 2013, and MMDA accounts declined $698,000.  Savings deposits increased $2.5 million during the quarter ended March 31, 2013.

The following table compares the mix of interest bearing deposits for March 31, 2013, December 31, 2012 and March 31, 2012.

 

INTEREST BEARING DEPOSITS






(Dollars in thousands)







March 31, 2013


December 31, 2012


March 31, 2012

NOW

$                126,784


$                    142,923


$                   119,356

MMDA

112,473


113,171


113,365

Savings

79,988


77,506


72,587

Time deposits less than $100,000

284,936


287,422


318,016

Time deposits $100,000 and over

256,547


275,318


243,678

   Total interest bearing deposits

$                860,728


$                    896,340


$                   867,002

 

The Company had Federal Home Loan Bank (FHLB) advances of $49.7 million at March 31, 2013 compared with $49.8 million at December 31, 2012.  The blended rate on the average balance of these borrowings was 1.45% during the first quarter of 2013.

Stockholders' equity was $116.3 million at March 31, 2013 and $115.3 million at December 31, 2012. The equity-to-asset ratios were 10.4% at March 31, 2013 and 10.0% at December 31, 2012.

Asset Quality – non-covered assets

Nonaccrual loans were $19.0 million, down from $21.0 million at December 31, 2012 and $25.6 million at March 31, 2012.  The decrease from December 31, 2012 was the net result of $863,000 in additions to nonaccrual loans and $2.9 million in reductions.  With respect to the reductions to nonaccrual loans, $1.2 million were paid out by the borrower or another lending institution, $756,000 were moved to foreclosure, $744,000 were charged-off and $196,000 were the result of payments to existing credits. 

Total nonperforming assets decreased $3.2 million, from $32.3 million at December 31, 2012 to $29.1 million at March 31, 2013. Total nonperforming assets also decreased $9.6 million, or 24.7%, from total nonperforming assets of $38.7 million at March 31, 2012. 

There were net charge-offs of $662,000 in the first quarter of 2013 compared with $1.8 million in the fourth quarter of 2012 and $1.4 million in the first quarter of 2012.  Total charge-offs for the first quarter of 2013 were $908,000 compared with $2.0 million in the fourth quarter of 2012 and $1.6 million in the first quarter of 2012.  Recoveries of previously charged-off loans were $246,000 in the first quarter of 2013 compared with $141,000 in the fourth quarter of 2012 and $157,000 in the first quarter of 2012.  

Non-covered OREO decreased $1.1 million in the first quarter of 2013 and was $9.7 million at March 31, 2013. The change in non-covered OREO during the first quarter of 2013 was reflected in additions of $942,000, reductions by sales of $1.6 million and write-downs of $431,000.  Non-covered OREO was $10.8 million at December 31, 2012 and $12.7 million at March 31, 2012.

The allowance for loan losses equaled 64.64% of non-covered nonaccrual loans at March 31, 2013 compared with 61.38% of non-covered nonaccrual loans at December 31, 2012 and 54.43% of non-covered nonaccrual loans at March 31, 2012. The ratio of the allowance for loan losses to total nonperforming assets was 42.07% at March 31, 2013 compared with 39.94% at December 31, 2012 and 36.01% at March 31, 2012.  Nonperforming assets to loans and other real estate have declined from 6.89% at March 31, 2012 to 4.94% at March 31, 2013.

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

CREDIT QUALITY










(Dollars in thousands)

2013


2012


First


Fourth


Third


Second


First


Quarter


Quarter


Quarter


Quarter


Quarter

Allowance for loan losses:










Beginning of period

$      12,920


$      14,303


$      13,526


$      13,935


$      14,835

Provision for loan losses

-


450


-


500


500

Charge-offs

(908)


(1,974)


(819)


(1,147)


(1,557)

Recoveries

246


141


1,596


238


157

Net (charge-offs) recovery

(662)


(1,833)


777


(909)


(1,400)

End of period

$      12,258


$      12,920


$      14,303


$      13,526


$      13,935

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

ASSET QUALITY (NON-COVERED)

(Dollars in thousands)

2013


2012


March


December

September

June

March


31


31

30

30

31








Nonaccruing loans

$18,963


$  21,048

$    25,730

$25,168

$25,601

Loans past due 90 days and accruing interest

465


509

85

-

403

Total nonperforming non-covered loans

19,428


21,557

25,815

25,168

26,004

Other real estate owned non-covered

9,712


10,793

11,896

11,869

12,696

Total nonperforming non-covered assets

$29,140


$  32,350

$    37,711

$37,037

$38,700








Allowance for loan losses to loans

2.11%


2.25%

2.56%

2.46%

2.54%

Allowance for loan losses to nonperforming assets

42.07%


39.94%

37.93%

36.52%

36.01%

Allowance for loan losses to nonaccrual loans

64.64%


61.38%

55.59%

53.74%

54.43%

Nonperforming assets to loans and other real estate

4.94%


5.52%

6.60%

6.60%

6.89%

Net charge-offs for quarter to average loans,







   annualized

0.46%


1.30%

(0.56%)

0.66%

1.02%

A further breakout of nonaccrual loans, excluding covered loans, at March 31, 2013, December 31, 2012 and March 31, 2012 is below:

 

NON-COVERED NONACCRUAL LOANS






(Dollars in thousands)

March 31, 2013


December 31, 2012


March 31, 2012



Amount

% of

Non-

Covered

Loans


Amount

% of

Non-

Covered

Loans


Amount

% of

Non-

Covered

Loans

Mortgage loans on real estate:










Residential 1-4 family

$      5,717

0.99%


$     5,562

0.97%


$     5,677

1.04%


Commercial

3,853

0.66%


5,818

1.01%


8,240

1.50%


Construction and land development

8,772

1.51%


8,815

1.53%


10,388

1.89%


Second mortgages

141

0.03%


141

0.03%


185

0.03%


Multifamily

-

-


-

-


-

-


Agriculture

234

0.04%


250

0.04%


54

0.01%


   Total real estate loans

18,717

3.23%


20,586

3.58%


24,544

4.47%

Commercial loans

161

0.03%


385

0.07%


880

0.16%

Consumer installment loans

85

0.01%


77

0.01%


177

0.03%

All other loans

-

-


-

-


-

-


   Gross loans

$    18,963

3.27%


$     21,048

3.66%


$   25,601

4.66%

Capital Requirements

Total stockholders' equity increased $1.0 million in the first quarter of 2013 and was $116.3 million at March 31, 2013.  The Company's ratio of total risk-based capital was 17.2% at March 31, 2013 compared with 17.0% at December 31, 2012.  The tier 1 risk-based capital ratio was 16.0% at March 31, 2013 and 15.8% at December 31, 2012. The Company's tier 1 leverage ratio was 9.6% at March 31, 2013 and 9.4% at December 31, 2012.  All capital ratios exceed regulatory minimums.

About Community Bankers Trust Corporation

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

Earnings Conference Call and Webcast

The Company will host a conference call for the financial community on Friday, April 26, 2013, at 10:00 a.m. Eastern Time to discuss the first quarter 2013 financial results. The public is invited to listen to this conference call by dialing 800-860-2442 at least five minutes prior to the call.  Interested parties may also listen to this conference call through the internet by accessing the "Corporate Overview – Corporate Profile" page of the Company's internet site at www.cbtrustcorp.com.

A replay of the conference call will be available from 1:00 p.m. Eastern Time on April 26, 2013 until 9:00 a.m. Eastern Time on May 3, 2013. The replay will be available by dialing 877-344-7529 and entering access code 10027831 or through the internet by accessing the "Corporate Overview – Corporate Profile" page of the Company's internet site at www.cbtrustcorp.com.

Forward-Looking Statements

This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements with respect to the Company's operations, performance, future strategy and goals. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the effects of and changes in the following: the quality or composition of the Company's loan or investment portfolios, including collateral values and the repayment abilities of borrowers and issuers; assumptions that underlie the Company's allowance for loan losses; general economic and market conditions, either nationally or in the Company's  market areas; the ability of the Company to comply with regulatory actions, and the costs associated with doing so; the interest rate environment; competitive pressures among banks and financial institutions or from companies outside the banking industry; real estate values; the demand for deposit, loan, and investment products and other financial services; the demand, development and acceptance of new products and services; the Company's compliance with, and the timing of future reimbursements from the FDIC to the Company under, the shared loss agreements; assumptions and estimates that underlie the accounting for loan pools under the shared loss agreements; consumer profiles and spending and savings habits; the securities and credit markets; costs associated with the integration of banking and other internal operations; management's evaluation of goodwill and other assets on a periodic basis, and any resulting impairment charges, under applicable accounting standards; the soundness of other financial institutions with which the Company does business; inflation; technology; and legislative and regulatory requirements. Many of these factors and additional risks and uncertainties are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 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.

 

Consolidated Balance Sheets






Unaudited Condensed












(Dollars in thousands)







March 31, 2013


December 31, 2012


March 30, 2012

     Assets






Cash and due from banks

$                    10,477


$                    12,502


$                    14,784

Interest bearing bank deposits

13,591


11,635


18,500

Federal funds sold

-


-


2,500

  Total cash and cash equivalents

24,068


24,137


35,784

Securities available for sale, at fair value

274,090


309,078


235,311

Securities held to maturity, at cost

38,677


42,283


59,117

Equity securities, restricted, at cost

7,198


7,405


6,939

  Total securities

319,965


358,766


301,367







Loans held for resale

1,145


1,266


349

 

Loans not covered by FDIC shared loss agreements

579,807


575,482


548,789

Loans covered by FDIC shared loss agreements

82,364


84,637


94,695

Allowance for loan losses (non-covered)

(12,258)


(12,920)


(13,935)

Allowance for loan losses (covered)

(484)


(484)


(460)

  Net loans

649,429


646,715


629,089







Bank premises and equipment, net

33,237


33,638


34,754

Other real estate owned, non-covered

9,712


10,793


12,696

Other real estate owned, covered by FDIC loss share agreement

2,483


3,370


3,974

FDIC receivable

750


895


1,402

Bank owned life insurance

20,274


15,146


14,730

Core deposit intangibles, net

9,731


10,297


11,993

FDIC indemnification asset

31,517


33,837


40,232

Other assets

14,790


14,428


16,308

    Total assets

$               1,117,101


$               1,153,288


$               1,102,678







     Liabilities






Deposits:






    Noninterest bearing

81,330


77,978


77,055

    Interest bearing

860,728


896,340


867,002

      Total deposits

942,058


974,318


944,057







Federal funds purchased

992


5,412


-

Federal Home Loan Bank advances

49,654


49,828


37,000

Trust preferred capital notes

4,124


4,124


4,124

Other liabilities

3,938


4,289


6,075

    Total liabilities

1,000,766


1,037,971


991,256







     Stockholders' Equity






Preferred stock (5,000,000 shares authorized $0.01 par value 17,680 shares issued and outstanding)

17,680


17,680


17,680

Discount on preferred stock

(176)


(234)


(399)

Warrants on preferred stock

1,037


1,037


1,037

Common stock (200,000,000 shares authorized $0.01 par value; 21,682,963 shares issued and outstanding  at March 31, 2013)

218


217


216

Additional paid in capital

144,463


144,398


144,259

Retained deficit

(49,564)


(50,609)


(53,047)

Accumulated other comprehensive income

2,677


2,828


1,676

   Total stockholders' equity

$                  116,335


$                  115,317


$                  111,422

   Total liabilities and stockholders' equity

$               1,117,101


$               1,153,288


$               1,102,678

Income Statement Trend Analysis

Three

months

ended











Unaudited (Dollars in thousands)















Three months ended


March 31,  

  2013


Year 2012


December 31, 

2012


September 30,

 2012


June 30,

 2012


March 31, 

 2012

 Interest and dividend income












 Interest and fees on loans

$    7,511


$  30,658


$       7,687


$       7,710


$       7,574


$  7,687

 Interest and fees on FDIC covered loans

2,659


14,105


2,894


2,931


4,366


3,914

 Interest on federal funds sold

2


5


1


-


3


1

 Interest on deposits in other banks

8


54


14


9


19


12

 Investments (taxable)

1,838


8,408


2,189


2,103


2,039


2,077

 Investments (nontaxable)

148


489


134


119


118


118

 Total interest income

12,166


53,719


12,919


12,872


14,119


13,809

 Interest expense












 Interest on deposits

1,701


8,508


1,858


2,056


2,241


2,353

 Interest on federal funds purchased

1


9


3


3


3


-

 Interest on other borrowed funds

192


1,175


193


280


343


359

 Total interest expense

1,894


9,692


2,054


2,339


2,587


2,712













 Net interest income

10,272


44,027


10,865


10,533


11,532


11,097













 Provision for loan losses

-


1,200


450


-


500


250

 Net interest income after provision for loan losses

10,272


42,827


10,415


10,533


11,032


10,847













 Noninterest income












 Loss on other real estate, net

(630)


(1,833)


(660)


(767)


(229)


(177)

 Gain/(loss) on sale of securities, net

278


1,492


138


1,180


290


(116)

 Service charges on deposit accounts

663


2,736


729


716


674


617

 Other 

419


2,111


464


602


544


501

Total noninterest income

730


4,506


671


1,731


1,279


825













 Noninterest expense












 Salaries and employee benefits

3,993


16,511


4,068


4,028


4,177


4,238

 Occupancy expenses

663


2,715


691


708


685


631

 Equipment expenses

267


1,087


256


266


270


295

 Legal fees

13


51


9


3


15


24

 Professional fees

50


391


84


74


148


85

 FDIC assessment

167


1,485


37


368


496


584

 Data processing fees

537


1,824


335


473


499


517

 FDIC indemnification asset amortization

1,501


6,936


1,492


1,579


1,983


1,882

 Amortization of intangibles

565


2,261


566


565


565


565

 Other operating expenses

1,359


6,342


1,527


1,554


1,790


1,471

 Total noninterest expense

9,115


39,603


9,065


9,618


10,628


10,292













 Net income before income taxes

1,887


7,730


2,021


2,646


1,683


1,380

 Income tax expense

563


2,148


448


837


473


390

 Net income

1,324


5,582


1,573


1,809


1,210


990

 Dividends on preferred stock

221


884


221


221


221


221

 Accretion of discount on preferred stock

58


220


55


55


55


55

 Net income available to common












    stockholders

$     1,045


$    4,478


$       1,297


$       1,533


$          934


$      714

 

 

Net Interest Margin Analysis













Average Balance Sheet













(Dollars in thousands)















Three months ended March 31, 2013


Three months ended December 31, 2012


Three months ended March 31, 2012




Average

Balance  

Sheet

Interest

Income /

Expense

Average

Rates

Earned /

Paid


Average

Balance  

Sheet

Interest

Income /

Expense

Average

Rates

Earned /

Paid


Average

Balance  

Sheet

Interest

Income /

Expense

Average

Rates

Earned /

Paid












ASSETS:














Loans, including fees

$    579,635

$        7,511

5.26%


$     564,926

$        7,687

5.44%


$  549,019

$     7,687

5.60%



Loans covered by FDIC loss share

82,776

2,659

13.03%


86,415

2,894

13.40%


95,546

3,914

16.39%



   Total loans

662,411

10,170

6.23%


651,341

10,581

6.50%


644,565

11,601

7.20%



Interest bearing bank balances

16,402

8

0.20%


23,636

14

0.25%


16,565

12

0.28%



Federal funds sold

9,811

2

0.10%


2,641

1

0.11%


2,967

1

0.10%



Investments (taxable)

300,001

1,838

2.45%


302,949

2,189

2.89%


282,510

2,077

2.94%



Investments (tax exempt)(1)

17,903

225

5.02%


15,456

203

5.25%


12,314

179

5.81%



   Total earning assets

1,006,528

12,243

4.93%


996,023

12,988

5.22%


958,921

13,870

5.79%



Allowance for loan losses

(13,470)




(14,323)




(15,711)





Non-earning assets

132,378




141,492




150,278





   Total assets

$1,125,436




$ 1,123,192




$1,093,488


















LIABILITIES AND














STOCKHOLDERS' EQUITY














Demand - interest     bearing

$    245,714

$           191

0.32%


$     240,391

$           189

0.31%


$  235,663

$      244

0.41%



Savings

78,377

62

0.32%


77,484

58

0.30%


71,148

72

0.41%



Time deposits

551,125

1,448

1.07%


552,926

1,611

1.17%


559,709

2,037

1.46%



   Total interest-bearing deposits

875,216

1,701

0.79%


870,801

1,858

0.85%


866,520

2,353

1.09%



Fed funds purchased

329

1

0.72%


1,833

3

0.51%


185

-

0.61%



FHLB and other borrowings

53,938

192

1.45%


55,222

193

1.39%


41,124

359

3.50%



   Total interest-bearing liabilities

929,483

1,894

0.83%


927,856

2,054

0.88%


907,829

2,712

1.20%



Non-interest bearing deposits

75,551




76,154




69,036





Other liabilities

4,117




4,216




4,868





   Total liabilities

1,009,151




1,008,226




981,733





Stockholders' equity

116,285




114,966




111,755





   Total liabilities and














   stockholders' equity

$1,125,436




$ 1,123,192




$1,093,488





Net interest earnings


$     10,349




$     10,934




$   11,158




Interest spread



4.10%




4.34%




4.59%



Net interest margin



4.17%




4.39%




4.65%
















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


 Non-GAAP Financial Measures

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

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

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

 

 


March 31, 

2013


December 31,

2012


March 31, 

2012

Common Tangible Book Value






Total stockholder's equity

$   116,335,000


$  115,317,000


$ 111,422,000

Preferred stock (net)

18,541,000


18,483,000


18,318,000

Core deposit intangible (net)

9,731,000


10,297,000


11,993,000

Common tangible book value

88,063,000


86,537,000


81,111,000

Shares outstanding

21,682,963


21,670,212


21,627,549

Common tangible book value per share

$                 4.06


$                3.99


$               3.75







Stock Price

$                 3.29


$                2.65


$               2.14







Price/common tangible book

81.0%


66.4%


57.1%







Common tangible book/common tangible assets






     Total assets

1,117,101,000


1,153,288,000


1,102,678,000

     Preferred stock (net)

18,541,000


18,483,000


18,318,000

     Core deposit intangible

9,731,000


10,297,000


11,993,000

Common tangible assets

1,088,829,000


1,124,508,000


1,072,367,000

Common tangible book 

88,063,000


86,537,000


81,111,000

Common tangible equity to assets

8.09%


7.70%


7.56%

SOURCE Community Bankers Trust Corporation



RELATED LINKS
http://www.cbtrustcorp.com

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