Exhibit 99.1
COMMUNITY BANKERS TRUST CORPORATION REPORTS FIRST QUARTER RESULTS
• | First quarter 2010 loss available to common stockholders was $3.0 million, after recording $5.0 million in provision for loan losses and $447,000 in net write-downs and losses on the sale of other real estate owned, covered by FDIC shared-loss agreements. |
• | The ratio of allowance for loan losses to loans, excluding FDIC covered loans, increased from 3.14% at December 31, 2009 to 3.42% at March 31, 2010. |
• | Net interest margin, on a tax equivalent basis, was 4.04% for the first quarter of 2010, up from 3.83% for the year ended December 31, 2009. A lower cost of funds continued to drive the improvement in the margin. |
• | Interest yield on the carrying value of FDIC covered loans was 9.81% for the first quarter of 2010 compared with 8.94% for the first quarter of 2009. The increase in the yield on the covered loan portfolio reflects better than expected performance on these loans, which contributed to the improvement in the net interest margin. |
• | The total FDIC covered loan balance was $143.3 million at March 31, 2010 (which represents the carrying value of contractual principal balances of $230.7 million). The performance of the FDIC covered loan portfolio did not require the establishment of an allowance for loan losses at March 31, 2010. |
• | Net interest income after provision for loan losses was $5.0 million for the first quarter of 2010, compared with $3.2 million for the first quarter of 2009 due to a $1.3 million decrease in interest expense. |
• | The investment portfolio remains a viable source of liquidity. The investment portfolio’s credit quality remains sound as demonstrated by the absence of impairment. The available-for-sale portfolio reflects a net unrealized gain of $3.8 million at March 31, 2010, including a $757,000 unrealized gain increase in the current quarter. |
• | Liquidity remains strong with a solid core deposit base and low loan-to-deposit ratio of 69.24%. The Company continues to be core funded with a nominal volume of brokered deposits or wholesale funding sources. |
• | Continued strong capital ratios for the Company were in excess of the definition of “Well Capitalized” with a tier 1 leverage ratio of 8.59% and a total risk-based capital ratio of 15.59%. |
Glen Allen, Virginia – Community Bankers Trust Corporation (the “Company”) (NYSE Amex: BTC), the holding company for Essex Bank (the “Bank”), reported a net loss available to common stockholders for the quarter ended March 31, 2010 of $3.0 million, or $0.14 per diluted common share, compared with net income available to common stockholders of $9.9 million, or $0.46 per diluted common share, for the first quarter of 2009. The magnitude of the change in quarterly earnings year-over-year was heavily influenced by the one time after tax gain of $13.4 million taken in the first quarter of 2009 related to the Suburban Federal Savings Bank (SFSB) acquisition.
The loss incurred during the first quarter of 2010 was primarily the result of the following:
• | The Company recorded a provision for loan losses of $5.0 million. This provision was the direct result of $3.4 million in net charge-offs incurred during the quarter and additional provisions to increase the allowance for loan losses to total non-covered loans. |
• | The Company reported net write-downs and losses on the sale of other real estate owned covered by the FDIC shared-loss agreements of $447,000, comprised of $2.2 million of write-downs and losses offset by $1.7 million due from the FDIC. |
• | Noninterest expenses were 5.03% higher in the first quarter of 2010 compared to the first quarter of 2009. The single largest increase in non-interest expenses was higher personnel costs. |
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George M. Longest, Jr., the Company’s President and Chief Executive Officer, stated, “Asset quality issues continue to hinder earnings, yet we feel confident that our balance sheet is well positioned for the future due to our solid liquidity, reserves and equity base. As indicated in our recent announcement of changes in management assignments, we are focused on the organic growth of the Company through deposit growth and prudent lending. We have recently expanded our Special Assets area to provide additional resources to address problem assets. We continue to look for opportunities to enhance efficiencies in our operations and return the Company to profitability. On a positive note, our investment portfolio, which represents 30% of our asset base, has performed well and provides ample liquidity for the Bank, which is a tangible benefit in these uncertain banking times.”
Mr. Longest continued, “We are pleased to have our Maryland franchise fully staffed with lenders. We plan to generate loans in this newly entered market as well as bolster our deposit base. We believe, and are in fact experiencing, that this market has a greater demand for commercial and industrial lending which will help us address our real estate concentrations in the portfolio. The lenders we have recruited are experienced in this type of lending and in the market. The geographic diversification in loans and deposits should prove to mitigate credit concentrations and augment earnings in the future.”
Net interest income equaled $10.1 million for the first quarter of 2010, which drove a net interest margin of 4.04%. This compared favorably with the same period in 2009, for which net interest income was $8.7 million and net interest margin was 3.43%. The following table portrays net interest income for the first quarter of 2010 compared with the first quarter of 2009, as adjusted to reflect the application of accounting related to loans acquired in the SFSB transaction which resulted in adjustments to the initial carrying value of the loans and realized gain on the transaction:
(dollars in thousands) | 3/31/2010 | 3/31/2009 | ||||||
Total interest income | $ | 15,246 | $ | 15,191 | ||||
Total interest expense | 5,188 | 6,465 | ||||||
Net interest income | $ | 10,058 | $ | 8,726 | ||||
Average earning assets | $ | 1,042,006 | $ | 1,064,565 | ||||
Net interest margin (1) | 4.04 | % | 3.43 | % |
(1) | Net interest margin on a tax equivalent basis, using a tax rate of 34%. Net interest income is not presented on a tax equivalent basis. |
The primary component influencing net interest income, as well as the net interest margin, was a lower overall interest expense relative to the deposit base. Management proactively lowered rates on virtually all deposits during 2009 in an effort to enhance earnings. This resulted in a 60 basis point decline in the cost of deposits for the quarter ended March 31, 2010 versus the same period in 2009. The most significant influence on the cost of funds for the Bank was the repricing of the time deposit base during the same period. The average cost of time deposits declined 46 basis points from 2.93% for the period ended March 31, 2009 to 2.47% for the period ended March 31, 2010. This improvement was the direct result of prudent deposit pricing in all regions, while not compromising the Bank’s liquidity.
An additional benefit to the net interest margin was the improved yield on FDIC covered loans. The yield on these loans improved 87 basis points from the first quarter of 2009 to the first quarter of 2010. This is primarily the result of better than expected performance on these loans.
For the three months ended March 31, 2010, noninterest income totaled $415,000, compared with $21.2 million for the period ended March 31, 2009. The decrease year-over-year was due to the one-time $20.3 million pre-tax gain on the SFSB transaction in 2009.
Noninterest income for the first quarter of 2010 includes a net write-down and losses on the sale of covered other real estate in the FDIC acquired SFSB portfolio of $447,000, comprised of $2.2 million of write-downs and losses offset by
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$1.7 million due from the FDIC. The net amount reflects the Company’s 20% portion under its shared-loss agreements of the total write-down and losses of $2.2 million. Service charges on deposit accounts were $565,000 for the first quarter of 2010 compared with $571,000 for the same period in 2009. The Company reported $354,000 in securities gains for the quarter ended March 31, 2010, which compared favorably with net losses on the sales of securities of $48,000 taken in the corresponding period of 2009.
For the first quarter of 2010, noninterest expenses were $9.9 million compared with $9.4 million for the same period in 2009. Salaries and employee benefits were $5.1 million and represented 52.04% of all noninterest expenses for the quarter. Salaries and wages increased $705,000, or 15.93%, from the same quarter in 2009. Personnel costs increased $326,000 over the same time frame, reflecting a full quarter of expenses related to the SFSB transaction on January 30, 2009 as well as additional corporate staff hires in the second half of 2009 for positions necessary for increased asset growth.
FDIC expenses aggregated $605,000 for the first quarter of 2010 compared with $130,000 in the first quarter of 2009. The increase in these expenses is due solely to a FDIC special assessment prepaid in 2009 by all financial institutions to replenish FDIC reserves, which is being amortized over three years. Other noninterest expenses for the first quarter of 2010 included the following: other operating expenses of $1.5 million, occupancy expenses of $739,000, data processing fees of $506,000, amortization of intangibles of $565,000, equipment expense of $412,000, legal fees of $46,000, and professional fees of $334,000.
Occupancy and equipment expenses increased $159,000 and $69,000, or 27.44% and 20.02%, respectively, during the first quarter of 2010 compared with the same period in 2009. These increases are the result of a full quarter’s burden in 2010 compared to two months of expenses in 2009 related to the SFSB transaction, which was consummated on January 30, 2009. Correspondingly, legal and professional fees declined $204,000 and $366,000, or 81.79%, and 52.30%, respectively, during the same time frame. The declines in legal and professional fees were all related to the SFSB transaction. Furthermore, the Company achieved efficiencies with respect to data processing fees. Data processing fees declined $236,000, or 31.83%, for the quarter ended March 31, 2010 versus the same period in 2009. The decline is attributable to the full integration of the SFSB platform made in the second half of 2009.
The following noninterest expense items for the three months ended March 31, 2009 were related to the SFSB transaction:
• | $576,000 related to various professional fees paid to complete the transaction. |
• | One-time legal fees equaled $135,000. |
• | Data processing fees consisted of $98,000 of conversion fees and $130,000 of bank card expenses. |
Asset Quality
Nonperforming assets, excluding FDIC covered assets, were $30.3 million, or 5.21%, of loans and other real estate at March 31, 2010 compared with $21.8 million, or 3.77%, at December 31, 2009. Nonaccrual loans increased $8.7 million during the quarter ended March 31, 2010, primarily attributable to eight credit relationships aggregating over 80% of the total additions to nonaccrual status loans. These borrowers are mainly commercial/residential land developers and their loans are secured by real estate. The remaining increase in nonaccrual loans during the quarter arose from smaller credit relationships.
The allowance for loans losses increased to 3.42% of total loans, excluding covered loans at March 31, 2010, compared with 3.14% at December 31, 2009 and 2.13% at March 31, 2009. Allowance for loan losses equaled 65.40% of nonperforming assets and 68.97% of nonaccrual loans at March 31, 2010, compared with 83.18% and 90.80%, respectively, at December 31, 2009 (all excluding FDIC covered assets). Annualized net charge-offs for the quarter ended March 31, 2010, represented 2.36% of average loans versus an annualized ratio of 4.09% for the fourth quarter of 2009.
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The following table provides asset quality ratios, excluding FDIC covered assets, for the end of the first quarter of 2010 and the four quarter ends of 2009:
Asset quality ratios (dollars in thousands) | ||||||||||||||||||||
(excluding FDIC covered assets) | 3/31/2010 | 12/31/2009 | 9/30/2009 | 6/30/2009 | 3/31/2009 | |||||||||||||||
Nonaccrual loans | $ | 28,706 | $ | 20,011 | $ | 20,572 | $ | 24,482 | $ | 9,870 | ||||||||||
Loans past due over 90 days and still accruing | — | 247 | 1,462 | 514 | 1,195 | |||||||||||||||
Other real estate owned | 1,565 | 1,586 | 1,175 | 864 | 412 | |||||||||||||||
Total nonperforming assets | $ | 30,271 | $ | 21,844 | $ | 23,209 | $ | 25,860 | $ | 11,477 | ||||||||||
Balances | ||||||||||||||||||||
Allowance for loan losses | $ | 19,798 | $ | 18,169 | $ | 16,211 | $ | 12,185 | $ | 11,543 | ||||||||||
Average loans during quarter, net of unearned income | 577,715 | 573,367 | 559,547 | 548,577 | 534,566 | |||||||||||||||
Loans, net of unearned income | 579,724 | 578,629 | 569,452 | 551,799 | 542,191 | |||||||||||||||
Ratios | ||||||||||||||||||||
Allowance for loan losses to loans | 3.42 | % | 3.14 | % | 2.85 | % | 2.21 | % | 2.13 | % | ||||||||||
Allowance for loan losses to nonperforming assets | 65.40 | % | 83.18 | % | 69.85 | % | 47.12 | % | 100.58 | % | ||||||||||
Allowance for loan losses to nonaccrual loans | 68.97 | % | 90.80 | % | 78.80 | % | 49.77 | % | 116.95 | % | ||||||||||
Nonperforming assets to loans and other real estate | 5.21 | % | 3.77 | % | 4.07 | % | 4.68 | % | 2.12 | % | ||||||||||
Net charge-offs for quarter to average loans, annualized | 2.36 | % | 4.09 | % | 0.86 | % | 0.25 | % | 0.26 | % |
The following table presents nonaccrual loans for the non-covered loan portfolio at March 31, 2010 and December 31, 2009.
3/31/2010 | 12/31/2009 | |||||||||||||||||
Amount of Non Accrual | Non-Covered Loans | Percentage of Non-Covered Loans | Amount of Non Accrual | Non-Covered Loans | Percentage of Non-Covered Loans | |||||||||||||
Mortgage loans on real estate | ||||||||||||||||||
Residential 1-4 family | $ | 5,723 | $ | 144,938 | 3.95 | % | $ | 4,750 | $ | 146,141 | 3.25 | % | ||||||
Commercial | 2,635 | 204,708 | 1.29 | % | 3,861 | 188,991 | 2.04 | % | ||||||||||
Construction and land development | 19,422 | 142,324 | 13.65 | % | 10,115 | 144,297 | 7.01 | % | ||||||||||
Second mortgages | 152 | 13,694 | 1.11 | % | 194 | 13,935 | 1.39 | % | ||||||||||
Multifamily | 105 | 11,414 | 0.92 | % | — | 11,995 | — | |||||||||||
Agriculture | — | 4,137 | — | — | 5,516 | — | ||||||||||||
Total real estate loans | 28,037 | 521,215 | 5.38 | % | 18,920 | 510,875 | 3.70 | % | ||||||||||
Commercial loans | 619 | 43,090 | 1.44 | % | 174 | 42,157 | 0.41 | % | ||||||||||
Consumer installment loans | 45 | 11,984 | 0.38 | % | 910 | 14,145 | 6.43 | % | ||||||||||
All other loans | 5 | 4,072 | 0.12 | % | 7 | 12,205 | 0.06 | % | ||||||||||
Gross loans | $ | 28,706 | $ | 580,361 | 4.95 | % | $ | 20,011 | $ | 579,382 | 3.45 | % | ||||||
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The following table shows a reconciliation of the allowance for loan losses for the three months ended March 31, 2010, for the twelve months ended December 31, 2009 and for the three months ended March 31, 2009.
(dollars in thousands) | Allowance for loan losses | |||||||||||
Quarter ending 3/31/2010 | Year ending 12/31/2009 | Quarter ending 3/31/2009 | ||||||||||
Beginning allowance | $ | 18,169 | $ | 6,939 | $ | 6,939 | ||||||
Provision for loan losses | 5,042 | 19,089 | 5,500 | |||||||||
Recoveries of loans charged off | 73 | 742 | 39 | |||||||||
Loans charged off | (3,486 | ) | (8,601 | ) | (935 | ) | ||||||
Allowance at end of period | $ | 19,798 | $ | 18,169 | $ | 11,543 | ||||||
The following table presents charge-offs and recoveries for all non-covered loans for the quarter ended March 31, 2010.
Three months ended March 31, 2010 | |||||||||
Charge-offs | Recoveries | Net Charge-offs | |||||||
Mortgage loans on real estate | |||||||||
Residential 1-4 family | $ | 342 | $ | — | $ | 342 | |||
Commercial | 776 | 1 | 775 | ||||||
Construction and land development | 1,607 | — | 1,607 | ||||||
Second mortgages | 74 | 41 | 33 | ||||||
Multifamily | 350 | — | 350 | ||||||
Agriculture | — | — | — | ||||||
Total real estate loans | 3,149 | 42 | 3,107 | ||||||
Commercial loans | 201 | — | 201 | ||||||
Consumer installment loans | 106 | 12 | 94 | ||||||
All other loans | 30 | 19 | 11 | ||||||
Totals | $ | 3,486 | $ | 73 | $ | 3,413 | |||
For the three months ended March 31, 2010, the Company’s provision for loan losses was $5.0 million compared with $5.5 million in the same period in 2009.
The increase to the loan loss reserves as a percentage of total non-covered loans during the first quarter of 2010 reflects economic conditions that have continued to show signs of deterioration for classified assets. The continued high provisions for loan losses were necessitated by the following: 1) $3.4 million in net charge-offs during the quarter 2) increase in nonaccrual loans and classified assets, and 3) a desire to further insulate from the economic downturn. Management continues to monitor the loan portfolio closely and make appropriate adjustments using the Company’s internal risk rating system.
Balance Sheet
Total assets were $1.22 billion at March 31, 2010, declining slightly from $1.23 billion at year end. The single largest asset category reduction was evidenced in the FDIC covered loans. FDIC covered loans declined $7.6 million, or 5.04%, from $150.9 million at December 31, 2009 to $143.3 million at March 31, 2010. The reduction in the covered loan portfolio was attributable to aggressive work of the Company’s special assets division in handling the disposition of FDIC covered assets and declining balances of FDIC covered loans.
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Total loans, including FDIC covered loans, were $723.1 million at March 31, 2010 compared with $729.6 million at December 31, 2009. Non-covered loans increased $1.1 million, or 0.19%, from $578.6 million at December 31, 2009 to $579.7 million at March 31, 2010.
The following table shows the composition of the non-covered loan portfolio at March 31, 2010 and December 31, 2009.
3/31/2010 | 12/31/2009 | |||||||||||||
Non-Covered Loans | Non-Covered Loans | |||||||||||||
Mortgage loans on real estate | ||||||||||||||
Residential 1-4 family | $ | 144,938 | 24.97 | % | $ | 146,141 | 25.22 | % | ||||||
Commercial | 204,708 | 35.27 | % | 188,991 | 32.62 | % | ||||||||
Construction and land development | 142,324 | 24.52 | % | 144,297 | 24.91 | % | ||||||||
Second mortgages | 13,694 | 2.36 | % | 13,935 | 2.41 | % | ||||||||
Multifamily | 11,414 | 1.97 | % | 11,995 | 2.07 | % | ||||||||
Agriculture | 4,137 | 0.72 | % | 5,516 | 0.95 | % | ||||||||
Total real estate loans | $ | 521,215 | 89.81 | % | $ | 510,875 | 88.18 | % | ||||||
Commercial loans | 43,090 | 7.42 | % | 42,157 | 7.28 | % | ||||||||
Consumer installment loans | 11,984 | 2.06 | % | 14,145 | 2.44 | % | ||||||||
All other loans | 4,072 | 0.71 | % | 12,205 | 2.10 | % | ||||||||
Gross loans | $ | 580,361 | 100.00 | % | $ | 579,382 | 100.00 | % | ||||||
Less unearned income on loans | (637 | ) | (753 | ) | ||||||||||
Loans, net of unearned income | $ | 579,724 | $ | 578,629 | ||||||||||
The following table provides additional detail to the loan portfolio including both non-covered loans and loans covered by the shared-loss agreements (“covered loans”) at March 31, 2010:
Non-Covered Loans | Covered Loans | Total Loans | ||||||||||||||||||
Mortgage loans on real estate | ||||||||||||||||||||
Residential 1-4 family | $ | 144,938 | 24.97 | % | $ | 115,437 | 80.54 | % | $ | 260,375 | 35.98 | % | ||||||||
Commercial | 204,708 | 35.27 | % | 5,204 | 3.63 | % | 209,912 | 29.01 | % | |||||||||||
Construction and land development | 142,324 | 24.52 | % | 13,828 | 9.65 | % | 156,152 | 21.58 | % | |||||||||||
Second mortgages | 13,694 | 2.36 | % | 8,120 | 5.67 | % | 21,814 | 3.01 | % | |||||||||||
Multifamily | 11,414 | 1.97 | % | — | — | 11,414 | 1.58 | % | ||||||||||||
Agriculture | 4,137 | 0.72 | % | 596 | 0.41 | % | 4,733 | 0.65 | % | |||||||||||
Total real estate loans | $ | 521,215 | 89.81 | % | $ | 143,185 | 99.90 | % | $ | 664,400 | 91.81 | % | ||||||||
Commercial loans | 43,090 | 7.42 | % | — | — | 43,090 | 5.95 | % | ||||||||||||
Consumer installment loans | 11,984 | 2.06 | % | 149 | 0.10 | % | 12,133 | 1.68 | % | |||||||||||
All other loans | 4,072 | 0.71 | % | — | — | 4,072 | 0.56 | % | ||||||||||||
Gross loans | $ | 580,361 | 100.00 | % | $ | 143,334 | 100.00 | % | $ | 723,695 | 100.00 | % | ||||||||
Less unearned income on loans | (637 | ) | — | (637 | ) | |||||||||||||||
Loans, net of unearned income | $ | 579,724 | $ | 143,334 | $ | 723,058 | ||||||||||||||
Total deposits were $1.04 billion at March 31, 2010, increasing $12.9 million, or 1.25%, from December 31, 2009. The most significant dollar increase by deposit category was evidenced in Money Market Deposit Accounts, which increased
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$10.9 million, or 9.65%, during the first quarter. Time deposits declined $2.5 million during the quarter as management lowered pricing among all regions as loan demand remained nominal and covered loan balances continued to decline, as mentioned above.
The Company’s total loan-to-deposits ratio, including FDIC covered loans, was 69.24% at March 31, 2010 and 70.74% at December 31, 2009.
The following table details interest-bearing deposit totals by category at March 31, 2010 and December 31, 2009:
(dollars in thousands)
3/31/2010 | 12/31/2009 | $ change | ||||||||
NOW | $ | 94,975 | $ | 94,711 | $ | 264 | ||||
MMDA | 123,980 | 113,071 | 10,909 | |||||||
Savings | 61,210 | 58,373 | 2,837 | |||||||
Time deposits less than $100,000 | 420,702 | 423,902 | (3,200 | ) | ||||||
Time deposits $100,000 and over | 279,841 | 279,147 | 694 | |||||||
Total interest-bearing deposits | $ | 980,708 | $ | 969,204 | $ | 11,504 | ||||
Capital
At March 31, 2010, the Company’s total risk-based capital ratio was 15.59%. The Tier 1 risk-based capital ratio was 14.37%, and the leverage ratio (Tier 1 capital to average adjusted total assets) was 8.59%. At December 31, 2009, the Company’s total risk-based capital ratio was 16.03%. The Tier 1 risk-based capital ratio was 14.82%, and the leverage ratio (Tier 1 capital to average adjusted total assets) was 8.93%. For both periods, all three ratios exceed capital adequacy guidelines outlined by its primary regulator, and the Company is considered “well-capitalized”.
Following the payment of its cash dividend in February 2010, the Company suspended the payment of its quarterly dividend to holders of common stock. While the Company believes that its capital and liquidity levels remain above the averages of its peers, the Company incurred a net loss to common stockholders for the 2009 year and remains concerned over asset quality and the uncertainty of the real estate markets and general economy in the central Virginia region. Due to these factors, the Company has determined that it is currently prudent to retain capital until such time as the Company experiences a return to consistent quarterly profitability.
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Securities
The Company’s securities portfolio remains solid and a viable source of liquidity. The following two tables show the amortized costs and fair values of securities for the entire investment portfolio at March 31, 2010.
Available for Sale
(dollars in thousands) | Amortized Cost | Gross Unrealized | |||||||||||
Gains | Losses | Fair Value | |||||||||||
U.S. Treasury issue and other U.S. Government agencies | $ | 16,708 | 387 | $ | (28 | ) | $ | 17,067 | |||||
State, county and municipal | 118,236 | 2,612 | (259 | ) | 120,589 | ||||||||
Corporates and other bonds | 2,055 | 96 | (5 | ) | 2,146 | ||||||||
Mortgage backed securities | 47,625 | 1,220 | (62 | ) | 48,783 | ||||||||
Financial securities | 1,177 | 136 | (261 | ) | 1,052 | ||||||||
Total securities available for sale | $ | 185,801 | $ | 4,451 | $ | (615 | ) | $ | 189,637 | ||||
Held to Maturity
(dollars in thousands) | Amortized Cost | Gross Unrealized | ||||||||||
Gains | Losses | Fair Value | ||||||||||
U.S. Treasury issue and other U.S. Government agencies | $ | — | $ | — | $ | — | $ | — | ||||
State, county and municipal | 13,090 | 716 | — | 13,806 | ||||||||
Corporates and other bonds | 1,019 | 29 | — | 1,048 | ||||||||
Mortgage backed securities | 91,211 | 3,859 | — | 95,070 | ||||||||
Total securities held to maturity | $ | 105,320 | $ | 4,604 | $ | — | $ | 109,924 | ||||
At March 31, 2010, there were $2.7 million of securities, consisting entirely of municipal obligations that were in a continuous loss position for more than twelve months. These obligations had unrealized losses of $108,000. Management has a third party review the investment portfolio quarterly for credit quality considerations. Based upon this review as of March 31, 2010, management determined there were no investments considered other than temporarily impaired.
The Company does not hold any trust preferred securities, private label CMOs, or other volatile instruments that have evidenced credit deterioration throughout the financial industry.
Non-GAAP Financial Measures
This press release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (GAAP). Common book value equals total stockholders’ equity less preferred stock; and common book value per share is computed by dividing common book value by the number of common shares outstanding. 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.
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Management believes that common book value, 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 book value and common tangible book value per share, the change in stock price to common book value and 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 tables reconcile these non-GAAP measures from their respective GAAP basis measures.
(dollars in thousands, except per common share data)
3/31/2010 | 12/31/2009 | |||||||
Common book value | ||||||||
Total stockholder’s equity | $ | 128,250 | $ | 131,594 | ||||
Less: preferred stock (net) | 17,911 | 17,863 | ||||||
Common book value | $ | 110,339 | $ | 113,731 | ||||
Common book value per common share | $ | 5.14 | $ | 5.30 | ||||
Common tangible book value | ||||||||
Total stockholder’s equity | $ | 128,250 | $ | 131,594 | ||||
Less: preferred stock (net) | 17,911 | 17,863 | ||||||
Less: goodwill | 5,727 | 5,727 | ||||||
Less: core deposit intangible | 16,515 | 17,080 | ||||||
Common tangible book value | $ | 88,097 | $ | 90,924 | ||||
Common tangible book value per common share | $ | 4.10 | $ | 4.24 | ||||
Common Tangible Assets | ||||||||
Total assets | $ | 1,224,208 | $ | 1,226,723 | ||||
Less: preferred stock (net) | 17,911 | 17,863 | ||||||
Less: goodwill | 5,727 | 5,727 | ||||||
Less: core deposit intangible | 16,515 | 17,080 | ||||||
Common tangible assets | $ | 1,184,055 | $ | 1,186,053 | ||||
Common shares outstanding | 21,468 | 21,468 | ||||||
Common stock price | $ | 2.91 | $ | 3.21 | ||||
Price/common book value | 56.6 | % | 60.6 | % | ||||
Price/common tangible book value | 71.0 | % | 75.7 | % | ||||
Common tangible book value to tangible assets | 7.4 | % | 7.7 | % |
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About Community Bankers Trust Corporation
The Company is the holding company for Essex Bank, a Virginia state bank with 25 full-service offices, 14 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.
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, growth 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 ultimate resolution of regulatory, legal and related issues relating to the 2010 transaction-based bonus awards to the Company’s chief strategic officer; general economic and market conditions, either nationally or locally; the interest rate environment; competitive pressures among banks and financial institutions or from companies outside the banking industry; real estate values; the quality or composition of the Company’s loan or investment portfolios; the demand for deposit, loan, and investment products and other financial services; the demand, development and acceptance of new products and services; the timing of future reimbursements from the FDIC to the Company 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, 2009 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
Senior Vice President/Chief Financial Officer
Community Bankers Trust Corporation
804-443-4343
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COMMUNITY BANKERS TRUST CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
as of March 31, 2010 and December 31, 2009
March 31, 2010 (unaudited) | December 31, 2009 (audited) | |||||||
(dollars in thousands) | ||||||||
ASSETS | ||||||||
Cash and due from banks | $ | 16,001 | $ | 13,575 | ||||
Interest bearing bank deposits | 15,340 | 18,660 | ||||||
Federal funds sold | 6,174 | — | ||||||
Total cash and cash equivalents | 37,515 | 32,235 | ||||||
Securities available for sale, at fair value | 189,637 | 179,440 | ||||||
Securities held to maturity, at cost (fair value of $109,924 and $117,008, respectively) | 105,320 | 113,165 | ||||||
Equity securities, restricted, at cost | 8,346 | 8,346 | ||||||
Total securities | 303,303 | 300,951 | ||||||
Loans not covered by FDIC shared-loss agreement | 579,724 | 578,629 | ||||||
Allowance for loan losses on non-covered loans | (19,798 | ) | (18,169 | ) | ||||
Net non-covered loans | 559,926 | 560,460 | ||||||
Loans covered by FDIC shared-loss agreement | 143,334 | 150,935 | ||||||
Net loans | 703,260 | 711,395 | ||||||
FDIC indemnification asset | 74,658 | 76,107 | ||||||
Bank premises and equipment, net | 36,670 | 37,105 | ||||||
Other real estate owned, covered by FDIC shared-loss agreement | 10,727 | 12,822 | ||||||
Other real estate owned, non-covered | 1,565 | 1,586 | ||||||
Bank owned life insurance | 6,608 | 6,534 | ||||||
FDIC receivable under shared-loss agreement | 10,922 | 7,950 | ||||||
Core deposit intangibles, net | 16,515 | 17,080 | ||||||
Goodwill | 5,727 | 5,727 | ||||||
Other assets | 16,738 | 17,231 | ||||||
Total assets | $ | 1,224,208 | $ | 1,226,723 | ||||
LIABILITIES | ||||||||
Deposits: | ||||||||
Noninterest bearing | $ | 63,579 | $ | 62,198 | ||||
Interest bearing | 980,708 | 969,204 | ||||||
Total deposits | 1,044,287 | 1,031,402 | ||||||
Federal funds purchased | — | 8,999 | ||||||
Federal Home Loan Bank advances | 37,000 | 37,000 | ||||||
Trust preferred capital notes | 4,124 | 4,124 | ||||||
Other liabilities | 10,547 | 13,604 | ||||||
Total liabilities | 1,095,958 | 1,095,129 | ||||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred stock (5,000,000 shares authorized, $0.01 par value; 17,680 shares issued and outstanding) | 17,680 | 17,680 | ||||||
Warrants on preferred stock | 1,037 | 1,037 | ||||||
Discount on preferred stock | (806 | ) | (854 | ) | ||||
Common stock (200,000,000 shares authorized, $0.01 par value) 21,468,455 shares issued and outstanding) | 215 | 215 | ||||||
Additional paid in capital | 143,999 | 143,999 | ||||||
Retained deficit | (35,911 | ) | (32,019 | ) | ||||
Accumulated other comprehensive income | 2,036 | 1,536 | ||||||
Total stockholders’ equity | 128,250 | 131,594 | ||||||
Total liabilities and stockholders’ equity | $ | 1,224,208 | $ | 1,226,723 | ||||
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COMMUNITY BANKERS TRUST CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 2010 and 2009 restated
March 31, 2010 | March 31, 2009 | |||||||
(dollars and shares in thousands, except per share data) | ||||||||
Interest and dividend income | ||||||||
Interest and fees on non-covered loans | $ | 8,723 | $ | 8,457 | ||||
Interest and fees on FDIC covered loans | 3.593 | 2,950 | ||||||
Interest on federal funds sold | 1 | 14 | ||||||
Interest on deposits in other banks | 30 | 121 | ||||||
Interest and dividends on securities | ||||||||
Taxable | 2,005 | 2,892 | ||||||
Nontaxable | 894 | 757 | ||||||
Total interest and dividend income | 15,246 | 15,191 | ||||||
Interest expense | ||||||||
Interest on deposits | 4,857 | 6,118 | ||||||
Interest on other borrowed funds | 331 | 347 | ||||||
Total interest expense | 5,188 | 6,465 | ||||||
Net interest income | 10,058 | 8,726 | ||||||
Provision for loan losses | 5,042 | 5,500 | ||||||
Net interest income after provision for loan losses | 5,016 | 3,226 | ||||||
Noninterest income | ||||||||
Service charges on deposit accounts | 565 | 571 | ||||||
Gain on bank acquisition transaction | — | 20,255 | ||||||
Gain (loss) on securities transactions, net | 354 | (48 | ) | |||||
Loss on other real estate owned | (2,377 | ) | (46 | ) | ||||
Other | 1,873 | 427 | ||||||
Total noninterest income | 415 | 21,159 | ||||||
Noninterest expense | ||||||||
Salaries and employee benefits | 5,131 | 4,426 | ||||||
Occupancy expenses | 739 | 580 | ||||||
Equipment expenses | 412 | 343 | ||||||
Legal fees | 46 | 250 | ||||||
Professional fees | 334 | 700 | ||||||
FDIC assessment | 605 | 130 | ||||||
Data processing fees | 506 | 742 | ||||||
Amortization of intangibles | 565 | 456 | ||||||
Other operating expenses | 1,522 | 1,761 | ||||||
Total noninterest expense | 9,860 | 9,388 | ||||||
(Loss) income before income tax expense | (4,429 | ) | 14,997 | |||||
Income tax (benefit) expense | (1,665 | ) | 4,867 | |||||
Net (loss) income | (2,764 | ) | 10,130 | |||||
Dividends paid on preferred stock | 221 | 218 | ||||||
Accretion of discount on preferred stock | 48 | 43 | ||||||
Net (loss) income available to common stockholders | $ | (3,033 | ) | $ | 9,869 | |||
Net (loss) income per common share — basic | $ | (0.14 | ) | $ | 0.46 | |||
Net (loss) income per common share — diluted | $ | (0.14 | ) | $ | 0.46 | |||
Weighted average number of shares outstanding | ||||||||
Basic | 21,468 | 21,468 | ||||||
Diluted | 21,468 | 21,478 |
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COMMUNITY BANKERS TRUST CORPORATION
NET INTEREST MARGIN ANALYSIS
AVERAGE BALANCE SHEETS
(dollars in thousands)
Three months ended March 31, 2010 | Three months ended March 31, 2009 | |||||||||||||||||||
Average Balance Sheet | Interest Income/ Expense | Average Rates Earned/ Paid | Average Balance Sheet | Interest Income/ Expense | Average Rates Earned/ Paid | |||||||||||||||
ASSETS: | ||||||||||||||||||||
Loans, including fees | $ | 577,715 | $ | 8,723 | 6.04 | % | $ | 534,566 | $ | 8,457 | 6.33 | % | ||||||||
Loans covered by FDIC loss share | 146,460 | 3,593 | 9.81 | % | 131,978 | 2,950 | 8.94 | % | ||||||||||||
Total loans | 724,175 | 12,316 | 6.80 | % | 666,544 | 11,407 | 6.85 | % | ||||||||||||
Interest bearing bank balances | 22,614 | 30 | 0.53 | % | 41,676 | 121 | 1.16 | % | ||||||||||||
Federal funds sold | 1,696 | 1 | 0.16 | % | 16,647 | 14 | 0.34 | % | ||||||||||||
Investments (taxable) | 201,166 | 2,005 | 3.99 | % | 262,720 | 2,892 | 4.40 | % | ||||||||||||
Investments (tax exempt) (1) | 92,355 | 1,355 | 5.87 | % | 76,978 | 1,147 | 5.96 | % | ||||||||||||
Total earning assets | 1,042,006 | 15,707 | 6.03 | % | 1,064,565 | 15,581 | 5.85 | % | ||||||||||||
Allowance for loan losses | (18,647 | ) | (9,110 | ) | ||||||||||||||||
Non-earning assets | 200,668 | 186,179 | ||||||||||||||||||
Total assets | $ | 1,224,027 | $ | 1,241,634 | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Demand - interest bearing | $ | 211,845 | $ | 400 | 0.76 | % | $ | 176,755 | $ | 689 | 1.56 | % | ||||||||
Savings | 60,339 | 93 | 0.62 | % | 48,174 | 160 | 1.33 | % | ||||||||||||
Time deposits | 705,658 | 4,364 | 2.47 | % | 718,708 | 5,269 | 2.93 | % | ||||||||||||
Total deposits | 977,842 | 4,857 | 1.99 | % | 943,637 | 6,118 | 2.59 | % | ||||||||||||
Fed funds purchased | 537 | — | 0.14 | % | 268 | — | — | |||||||||||||
FHLB and other borrowings | 41,124 | 331 | 3.22 | % | 45,548 | 347 | 3.05 | % | ||||||||||||
Total interest-bearing liabilities | 1,019,503 | 5,188 | 2.04 | % | 989,453 | 6,465 | 2.60 | % | ||||||||||||
Non-interest bearing deposits | 60,746 | 60,101 | ||||||||||||||||||
Other liabilities | 11,817 | 24,914 | ||||||||||||||||||
Total liabilities | 1,092,066 | 1,074,468 | ||||||||||||||||||
Stockholders’ equity | 131,961 | 167,166 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,224,027 | $ | 1,241,634 | ||||||||||||||||
Net interest earnings | $ | 10,519 | $ | 9,116 | ||||||||||||||||
Interest spread | 3.99 | % | 3.25 | % | ||||||||||||||||
Net interest margin | 4.04 | % | 3.43 | % | ||||||||||||||||
(1) | Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%. |
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