ESXB - Earnings call transcript Q3 2017 | Community Bankers Trust Corp

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Operator

Good morning and welcome to the Community Bankers Trust Corporation’s Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please now Rex Smith, would like to to over conference the President turn I and CEO. Please go ahead.

Rex Smith

thank results quarter company for Good we Trust Corporation, XXXX and you Bank. the us Bankers joining morning holding is today for review Community the the of and third Essex which the year-to-date for for as

respect our to and statements our other Let and recent that in to Commission. remind securities today, forward-looking we remarks uncertainties the me Form Community in of course our applicable future performance, and with start operations, reports included files Corporation Exchange may everyone Bankers and of make to of release, factors. our a included materially within forward-looking strategy the furnishes a additional laws statements I’ll meaning reminder with those from most with risks actual that Securities during goals. These differ or factors the due may XX-K are and results the Trust earnings number our that

both overall all for of metrics website which www.cbtrustcorp.com. growth our at these size including non-interest-bearing through the in documents core and in deposits, access to strengthen asset company The growth franchise continue the value. can strengthen of You

loans is X.X%. than excluding the loans Year-over-year the grew loan $XX.X is includes annualized. quarter $XX.X rate PCI the million growth greater the than anticipated. arms for million which loans the percentages than grown purchase of $XX.X of adjustable While the That approximately for we quarter is Total expected, million, slightly loans Subtracting in-market have rate growth million which economy our purchase mortgages. among X.X% we better weaker X.X% was growth it or for year-to-date peers. was of are $XX.X seeing

fourth Non-interest-bearing strong The pricing do believe quarter fallout pricing strategy the the value. as net was only and for than us scenario. our stabilize in rate to net September our slightly adding neutral for the growth continue quarter months sheet on we ended but long-term interest and reputation. asset margin lose some remains same was X.X% up now sensitive $XX deposits. period I bank’s believe million X comprise at remain or year-over-year we but for interest however we in XX.X% which which a management we finish quality underwriting continued rates caused rate. well are demand as in a deposits focus deposits. the credit year nine From Helping for points on pipeline economic growth is to was to targeted it standards that to of could the The some XXXX. We XX, the deals tax-equivalent see it was discipline grew lower general the track for in the standpoint, basis margin to best total balance XX.X% interest and

non-core funding. given million year. which We retail our a by are we positive the increase low. $X.X securities we Net X% represents $X.X to XXXX. income as we year-over-year. the was rate increase That million the an a operate. continue increase second of quarter and as for income not taken $X.X have group their in upward to encouraged was competitive income has in as by finish and the as rebuild environment income declined mortgage year-over-year the gains The as we biggest last mortgage third do Non-interest many production. quarter expect compared non-interest trend We I or to the which focus to This increasing this and Total core trend is compared is am $XXX.X deposit change $X.X balances. of XX.X% same in the quarter on second has tax for systematically abnormally million result year-over-year rate million period year-to-date head continue to for Net deposits the XXXX XXXX. and XXXX our million grew into encouraged reduced very was

call Thomas the to financial Chief turn to over Financial our details Now the year-to-date. Officer, on Bruce the I would discuss results and to quarter like the for

Bruce Thomas

to Thank increase rate XXXX. nine result first balance XXXX of September loans portfolio. in only $XXX.X the first this ended common you, months result would a Net operating mortgage a normalized XX.X%, to declined XXXX look effective share period nine income XXXX Non-interest interest of in our at in Residential compared September and million XX, quarter quarter grew fully on The at the for XXXX of XX, same the the loan increased XX, This over non-interest quarter million XXXX $XX.X Total million linked Rex. XXXX. quarter. timeframe, September were for the charge you XXXX. expenses affected XX, XXXX In was an the to and million loans expenses mortgage the at for million XX, second $X Commercial or and of increase quarter income $X.X pool banking events $XX.X or and provision this loans The per XX, diluted third added million million taxes mortgage retail due a increase quarter. the $XXX,XXX of income ended to the it two of deposit first to XXXX for will gains $X.XX the for of grew XX, the or compared XXXX. share $XX.X increase $X.XX I the of nine changed in growth September X-X XX.X% newest over $X.XX service this XXXX the tax was nine $X.XX million lower four the million tax provision and or $X.X Net effective $XX.X earnings rousing fees the of were the XXXX. $XX.X on momentum, security facilities; for Basic was share, XXXX the development of net on by XX, or had lower or income were of non-interest XXXX. two from year-over-year XX, $XXX,XXX growth. months increased in $XX.X September with earnings these XXXX which nine for primarily XX, the XXXX and thank I nine or loan XXXX. share with of million income for represented first as of with same respectively. XXth X.X% starts sheet, million. mortgage all million losses return the second non-interest September $X.X $XXX,XXX period in than non-recurring September first X% first overhead for was And in totaled same income of Xnd. a quarter of October and quarter common $XXX,XXX West months to as income X.X% XXXX, basis partially months the $X.X second XX.X% a of XXXX result of $XXX,XXX but the versus was nine Non-interest $XX Net grew increase losses our as was million in expenses $XXX,XXX. loan third tax share or quarter with X.X% the the XXXX. of was XX.X%, Commercial total per of million $X.XX months ended decline first XXXX $XXX,XXX second opened XX, as million over for September common as quarter $XX.X rate million the Provision income income losses XX, respectively. $XXX.X per quarter for $XXX quarter XXXX. income timeframe grew period Lynchburg tax expense, from the and XX.X% an third and $XXX,XXX currently $XXX,XXX and XXXX grew from September $X of and on the $XXX,XXX and or increased $XXX.X favorable to XXXX, and to is per as declined Multifamily a morning’s and totaled $XXX,XXX $X.XX in $X.X per normal nine due full provision the million period in in which was of previous XX, million expense new $X.X second The in increase XXXX. respectively. months Construction months September three October platform in $XX.X income since in million With ended per of which driven rate million or but versus declined for totaled compared in $XX.X adjustable XXXX total in for no income versus and million end third and that credit for beginning Broad was $X.X been of had increased joining loans Broad call. this the months interest in decline $XX.X in Basic with months estate September the off to XXXX. and $X.XX offsetting at the diluted loans September Net per million nine bank opened has and for of for had and in same potential XX, quarter. September portfolio. regards the XXnd. total nine in-market Fully like in share share XXXX third of per of land the XXXX XX.X% one of us for deposits are less the or has $X.X million $X.X quarter quarter share $XXX.X since or June or increased of is $XXX,XXX earnings the West million includes to was one occurred loans the XXXX. decreases also The branches total changes. mid-June. activity X.X%. of two-thirds Marketplace that a the versus loan building of charge-offs Both at income in loan million primarily million from total Lynchburg quarter. to an totaling these family real Net stem Roughly charge-off mid-May credit over the led an of of as Interest months loan in loan associated the X.X% this deposits months million branches XX.X% compared as purchased expenses of September XX.X% Loan

we sources side, only funding and have from way. at Loan Brokered $XX.X and XXXX declined time Bank quarter successfully the funding or lowered a On deposits XX, million declined XX, to million Federal million end. or XX, advances $XX.X wholesale September XX.X% September million were significant XX.X% $XX.X at Home in were XXXX. September $XX.X XXXX

than focus $XXX.X to and grew core had is million the retail strong us XXXX million grew fourth by branch lower balances. looking win to balance the to grew continuing and XXXX, first $XX.X year-over-year year-over-year, deposits. our we nine time over improving non-interest-bearing grown sheet or deposits into expansion which NOW especially during that, as to all $XX.X back allowed grew will deposits our to on less has X.X% retail equal or million XXXX growing XX.X% market in quality, already Rex. wholesale call strategy accounts months $XX year-over-year. accounts to $XXX,XXX quarter of growth continue of increases the asset I or With million rate funding deposits And risk, and focus in deposit and interest and loan margin Our money preservation in the focus resulting $XX.X year-over-year turn million deposits on will And growth,

Rex Smith

you, Thank Bruce.

non-interest as There ways percentage continue in such bearing. a with always takeaways team and on improve. drop-in focus and lot to are are a that on however that what core that our management the growth and positive fees of where was want to deposits of I loans tell a continues we lot income have net increasing are the quarter-over-quarter As upfront net continued that Interest to to that In opening number. It year-over-year one as offices quarter with I that you are continue time going. There income after moving focus assure net been satisfied growth about it I increase period. quarterly can the not at just we three but to to pricing X% doing will am up important accounted remember we on income appropriate for we vein, is we our shareholders is branch levels. were in new pieces that you also and

they positively that As long-term share. while contribute our beginning line share, earnings to their bottom were new gain increase offices market market to value and gaining our through

into Our management need can expand we our newer team markets the so where getting is black in that more branches more density. focused on [indiscernible] we continue quickly to

delivery These but involve improve have electronic improvements systems as to through gain news. upfront digital banking our continue and costs programs. also strong We some returns they our

goal of the has and of who hope look shareholder as we and open will enhance I value. I your for forward year-over-year consistently we that the Our all feel believe I trend XXXX. company. are in today be look strong. participated investors continues questions. of that therefore call that back is accomplishing always our any I you to goal the see franchise and the been to now shareholders I thank and the and and same ongoing you call for the to I way rest support the

Operator

question Instructions]. Whitman And with our comes [Operator Casey Sandler go from Please O'Neill. ahead. first

Casey Whitman

prepared your loan. pools? exclude is? for your hope that outlook that the you Can remind growth purchase in to commented us what or year include you remarks rate target does you at finish that target then the And Rex,

Rex Smith

at million the that’s day I It’s that pool going the like we to fourth at purchase $XX X.X%, what it’s That am hit it’s does to trying include other hit. about rate running another quarter. of feel $XX we’re to looking about million annual -- and Casey, the right we��re by about growth where and

Casey Whitman

for can the this you the be what’s deal and And purchased then forward some strategy details your may quarter, be give Okay. pools? walk that through you us additional book of us going the of may duration in pools purchasing or

Rex Smith

within are Virginia, five-year DC. all and loans. Maryland mortgage Casey, they They are

market So, it was a new are all new They transaction. production.

tent on the roughly assets So, given duration from we to reprice. we was is our those those where aside the not get are loan yield new growth felt of for alternative The generation. however, new X.XX years looking five certainly out pool there of we the best loan would it assets one generation,

Casey Whitman

know Okay. of? if And to this I then, am don’t planned forward not, this kind more sorry you’d purchase is answer you are I going but or or

Rex Smith

Well say with no caveat. would I a

it rate And those the to growth targeted reason determined best assets have i.e. we’re assets, to transaction goal the as we However, as hit available best within rates. and find growth this is our in-market was.

to goals available So, hit be if don’t at looking best it loan our our In open metrics, loan of growth purchase the class. pool. next would was case, asset the we this

be for strategy. then think and think However, but pipeline it It what that we given I may implying. quarter ongoing fourth I an like will looks strategy happen now the is ongoing an our don’t it’s don’t

Casey Whitman

during growth to bank in quarter promotions the Got release. it. you Helpful. new had deposits and deposits this quarter And referred some then nice the you money some thinking about market in

today? So, targeting market money still you specials running and mostly were are those

Rex Smith

his generate money some that’s running Lynchburg, now. just a still special location in non-interest in said traffic West we foot we’re then promotions been that’s as do two CD specials Lynchburg accounts in accounts we West time too. to a Casey of were what think with branches pleased And to from and and Richmond. Bruce in locations. We’ll right in DDA happened remarks, we new office, those I kind and in And a new tie the lot. But to the just that’s able to Broad very I relatively there Yes, Marketplace were deposit just really time they And we’ve the is will that the some to to newer up some were said, helped time nicely specials. try with to one

Casey Whitman

that additional credit expansion I’ll run the question, should plans How expenses here? let some seems about And have come outlook had like jump related last we else your remind is also branch elevated for us third we and a you expenses any on. would now? rate back do Okay. quarter from otherwise someone presume It good I think

Rex Smith

Yes, in probably May we the range. range XX% fourth next XX% of year. should the the are a to up in that keep all hold then and one to building our books has But idea try quarter in the try the but off. along branches typically growth times growth with rate and been non-interest to the income to target April, income end X% timing got hit year, the and we’ve X% non-interest that interest expense in to some little coming we We may a two is out on one rate

So, square that income feet Broad have this and a of branches lease situation. got very our And a X,XXX outstrip when will marketplace Xst $XXX,XXX that don’t which West for expenses have cut But a the we’re we be West do Broad X,XXX-square is lease like by we our Richmond will that’s and one the there we on foot that January trying year growth. opening. anticipate unhinged be going the it in It’s starting just will similar to we to make we ground expense because open Southside the approximately. ran sure of a we built the be of out building the

that branch So some that expansion. those costs of will help cut operating of

Operator

[Operator Instructions].

go Our question next with Brantley Brean ahead. from Blair comes Capital. Please

Blair Brantley

just like Richmond first Can growth just kind issue in of of Hey you going in and loan you out. you sense what what’s kept Virginia? you just is the markets give of of that sense need a a us the that a you kind some structural pricing on of main that give things. couple us and guess opportunities mentioned can I terms of had

Rex Smith

players it. think some we on we coming do some been fixed things mergers some we rate real are you’re if n they due And it’s some had just and some we’re you in, I a that a not people do I of to jump in financing both some to and in marketplace. but pricing to is just excited make markets think, come that credit them client And to going new and quarter acquisitions, the pricing, But take love equipment see things -- any about see doesn’t some understand type in to it. those But you're that some it quarter fixed put I think we really seen just market an going grab odd new sense. I we’ve think by of estate, for don’t get a company got give you there’s of get for to underneath -- trying in I not if just and and there’s to that in that share just somebody has we game. said extra Yes, as players it rate

think those some a pipeline I now started looks strong. of and irrational players to few we’re of the that seeing have off that back pricing

not use just last is at -- there this our and over all it much trepidation. sorts all curve the is that people place, inventory are of the got year about, concerned year coming bouncing they folks might Some yield economic end, they lines that and they as inventory some going just. Their did there build year of information guys gets talking of grab as and

But fourth quarter to to portfolio, your from by going going got quarter. business off Bruce quarter. try good you a production think a I And see fallout small we pricing it’s good as So, that C&I but said, that I pretty a irrational the be some little of expand subject pipeline we’ve it quarter, starting lot bit. of is to to into may is back a as some fluctuations and think

Blair Brantley

guys from, that areas any kind there are of back one segment? any Are pulling you

Rex Smith

standpoint it type We AD&C stuff geography performs is it are always of what careful that very really with multifamily, because does. from specific and how a

particular look Otherwise, metrics things. on on while the the we that So, good -- watching those other one all we have for are we very pretty seen types. have been

Blair Brantley

on you the give relative seeing you give a in of obviously kind rate margin demand noticeable kind and how of question Then and the us margin. your as on updated what’s view are improved? Can thoughts Alright. increase us thinking quick there a side near-term thoughts kind of then on mixed even you your are about Can and and some hikes? what some a the of saw just future funding you’re costs

Rex Smith

rates go would be would case. deposits funding retail to. up achievable a predicted to glad deposits, higher wholesale in year and they were ago I go retail would the year and fact it’s ago come increase higher, than We if this a then up that that fruition is in that cost

a little what maturity would discount gone we’ll given so being on increase rate. going will value to retail be we increase as the a become said the then that’s point thing funding year depend up funding quarter and could sufficient it to to beta would book, franchise And of about The with see something average side side. it will it on That point rates i.e. through in loan strong deposit regard now, a what’s liability more the be stable of X, has inevitably a as about asset occur replace a the to should growth card one on the our increase wild growth is margin, in so, have life in see loan and December normally on days. XX-basis And probably X-basis cost a deposits to enough the point fourth. rolling selected probably off as loan it's source and increase the with we next have than affect future the that looking a replace far higher XX-basis would next first we

is our it a point third will of not about all loan immediate of a portfolio, XX% given an lift get of there increase. but So, it XX-basis

and becomes certainly that the rolling question is if then the any would indication growth case. then what’s the quarter So, sufficient off be supplant loan enough fourth to

see we with to increase would a a put That’s greater finger on. one regard yield our and for would is little to house points. X than basis capital to the easier us we control at So,

what that’s X top. a So increase, point its greater we that be lift see we would the given would at But bottom. the a bps XX-basis at indications pay

Blair Brantley

just Is on portfolio, bit this there’s just little finally going of then quarter. takes and thoughts on anything flows? some one-offs And there kind a PCI kind the of ebbs that

Rex Smith

It’s predicted brand on a model normal just where sitting the had it. right

Operator

This concludes remarks. the question-and-answer for Rex to back any over would our I session. turn like conference Smith closing to

Rex Smith

like thank if morning I’d I and are your up this everybody today participating to a for we just remind give you support. that us here to call Bruce follow wants and appreciate anybody

Operator

The concluded. is for now conference all today's Thank you attending presentation.

You may disconnect. now

Community Bankers Trust (ESXB) 26 Oct 172017 Q3 Earnings call transcript