ESXB - Earnings call transcript Q4 2018 | Community Bankers Trust Corp

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Operator

Good morning and welcome to the Community Bankers Trust Corporation Fourth and Year 2018 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I'd now like to turn the conference over to Mr. Chief and President Smith, Executive Officer. Rex

Rex Smith

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

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

access and You will financial quarter On to a the of all at cover Bruce Officer lastly, our selected And quick share will then as I thoughts we overview Chief I'll look www.cbtrustcorp.com. details our today's Thomas, Financial call, website year, highlights. give can our XXXX. and the documents through these forward

the the than may sheet. important Credit been we managing pricing growth focused of are have and loans. recall more structure balance that the quality You throughout rate XXXX growth on structure of and overall

am income XXXX report we was on is both with core to year brokered slightly expense. in two To deposits in reduce in for included year deposits of which Net in of to and in and Lynchburg, income the have the Edgewater, to strong our Maryland, one funds. Company. an been branch than interest non-interest-bearing the that in focused I history end, new for slightly the loans our $X.X net Additionally, was margin. in core due one growing best increasing million, increase opening quarter the the growth specifically Virginia. million, Net lower deposits year of the offices we while quarter finished that $XX.X That level XXXX, third Non-interest pleased

expense one-time in cost of of Some disposing related and Edgewater an third branch was residual that office of quarter. the to of opening older the cost

pending Additionally, the retirements at expenses of planning. had several and replication we part succession as we operational short-term planning are in we so for the added important level as salary positions

deposit industrial the deliberate our between of excluding in X.X% which borrowings, continues bank cost loan mix the growth is of result growth home rate million rate overall for for to majority quarter. split fourth commercial particularly adjustable-rate for branch and the environment lowered Loans, was Non-interest-bearing for $XX.X This in advances, the growth growth approach million rate $XX.X competition real XXXX. X.X% Interest-bearing or in quarter growth lending a Our expected direct of other deposits was and overall loans. $XX.X to low-cost or was and us this annualized and reduce million cost loans change funds. our million a deposits. PCI control was to funds. estate and grew of our of A XXXX. our our $XX.X important allow commercial as environment. This helps help including X% reliance million deposits on growth of the grew forecasted This and decrease federal for for core approximately $XX.X

the call to turn like to the year. fourth over of discuss Bruce would Thomas, for details the the to I and the results Now, financial quarter

Bruce Thomas

XX.XX%. return on million to for everyone. return equity Net of earnings was on equity annualized earnings X.XX% and for an average annualized share and the year as diluted. of quarter both X.XX% basic of return return the of and per income an Thank or and This Net basic $XX.X fourth equates XX.XX%. fully XXXX $X.X you, share of diluted a XXXX income average Rex, per $X.XX $X.XX%, $X.XX on assets also morning and on million of good of assets fully of

on a net for income Interest net linked income excluding The linked interest PCI for quarter X%. the average PCI increased also million loans Now the loans income a look loans by year excluding a quarter to with XXXX. basis. basis, increased or $XXX,XXX. respect quarters XXXX compared $XXX,XXX with of at or balance interest and On X.X% linked increased $X.X

that growth quarter to was of growth the X.X% in the of the in of during this loan rate growth fourth is because occurred fourth or $XX.X month during the XX.X% million However, December. occurred the is contrast that That quarter.

and the forward loans quarter is between average of more the Looking to reflective higher increase XXXX, reflect first of balance of December quarterly and of periods. September interest should level that income rate occurred growth that the the the

XX positive interest earnings quarter in and X.XX% in XXXX. X.X% was or increase yield degree X increased equivalent also Securities basis quarter to was of tax basis points activity from $XXX,XXX for an $XX,XXX the This assets the of linked positive and of the loans linked quarter expense. yield some Additionally to increased points a X.XX%. in X.XX% on in fourth increase by offset income the to

wholesale able The in to of in XXXX X.XX% were of the However, cost from third in in XXXX. on the third funds to of interest-bearing X.XX% borrowed The the funds the increased the quarter interest or of we cost more fourth quarter sensitive from to X.XX% note, $XXX,XXX quarter on quarter. positive increased by fourth deposit a XX.X%. X.XX lower

fees expense as X% earning X.XX% Net December aforementioned $XX.X of income year of increased XXXX in was $XX.X XX.X%. Securities interest for million linked the compared million X.XX% million the quarter with for increase on million $X net increase interest assets margin XXXX. we interest to million compared of of X.XX% yield was The fourth interest or X.XX% XXXX, from saw on XX, for XXXX. Interest in loans activity, with compared for quarter increase XXXX and for XX, December income of $X.X XXXX. XXXX. income third was the XXXX ended increase the a X.X% the yearend, quarter the With an slight in with $XX.X an XXXX compared an $XXX,XXX with and for or

liabilities benefit However, for tax on in by million average bank rate as balances or normally growth XXXX. tax under account. increased of interest-bearing for on the securities has been deposit the decreased the Despite the funded benefit X.X% X.X% result municipal tax increased less a XXXX lower was or X.XX% was million tax was represented on balances of $X the was Higher XXXX. based the in savings tax for XXXX, portfolio equivalent demand X.XX% compared X.X% a for and based deposit. and tax a Interest XX% deposits, million during equivalent X.XX% XXXX. million by expense rate, XX% increase on rate. an XX% XXXX, basis, securities $XX.X for increase equivalent on of $XX.X or XXXX money on of decrease $XXX,XXX, a Average income $X.X of tax margin net million $XX.X increased The cost primarily interest-bearing an yield only accounts as declined rate time $XX.X XXXX and deposit and interest lower year with loan X.XX% the with from in the average market in increase and actually or of this interest-bearing in in balance XXXX. qualified XX.X million for compared interest-bearing Of and average million

increased not for will While X.XX% level declined the XXXX, funding yield stable increased for margin points and in within on cost towards XXXX possibilities will XXXX income projected of projected the Meanwhile, the funding mortgage was interest X.XX% margin. result, increase XX.X% has what up the balanced affect we expense could obtaining This XXXX. interest-bearing positively Likewise, turn is non-interest-bearing the the increase Non-interest from which interest a spread level that On happened slight by With lower net a given see wish higher cost continue XXXX, migration impact is costs versus of for an funding competition X.X% to the to lowered asset in for assets XX basis investment earning and/or of and position. XXXX in could funding point and branch its million $XX.X curve insurance increased negatively, the quarters higher we margin non-maturity compared the of we side, timeframe, to cost on and year our realm it spread this management a look What as rates or variability deposits to average between was non-interest interest in be liabilities increased of the from be a emphasize net and to deposit income. impact sources. in three very longer. would level with of out group network. The cost of X.XX%. based interest net pushed for the mitigating liability and XXXX. rate prime on our that the regard just over on

rate and that in give anticipate the we cannot will increase time, reflective say on and any we in new there and can in the a XXXX this we that between what not head of However, have way lower department is XXXX we salary At do that is early prior benefit cost. assurance, that of retirements no will branches XXXX agenda year. the three increase be

turn not a normalized for non-interest I'll that, growth result, Rex. in it more expense. As we do With back to a XXXX than of anticipate rate

Rex Smith

key both By strategy we sheet strong are on interest continue a to well-positioned environments. improving to rates deposit growth quality, up net growth facing and we end, in uncertain balance To of multiple flexibility have allows earnings. in for asset down the liquidity Thank or slows believe that manage the in us but this, that showed focus patiently We to a you structured the in rates a the trends we This on low-cost The that is overall either are scenarios. rate, it balance Bruce, that good economic sheet environment. margin. growth, focus interest balance mix. times doing fourth pricing consistently credit lot sheet to continue and rate our a and areas the quarter

expense containing we move focus controllable into As we non-interest XXXX, on will lines. the

on dividend shareholders has focus as our our of stock That potential on continue internal discussions level a most our efficient of acquisition successful of a we for our also and believe performance included and capital. more higher a well accomplished uses I XXXX as will goals. of common had opportunities. We cash

With Company. of who you for have lot of we We currently, participated now the positive call have ongoing any are challenges the support of and your the thank the today for for New of questions. excited all in I that, and momentum operating we a call will the open Year.

Operator

will question-and-answer go We begin O'Neill. Instructions] comes [Operator from ahead. with now the session. Please first Casey Whitman Sandler question The

Charlie Hough

I'm This on Whitman Hough. for is Casey morning. this Charlie

really nice outlook So, you digit loan growth had for year. in good some XXXX? growth in a Is the still mid-single

Rex Smith

I we're aiming say Yes, what for. would that's

Charlie Hough

you've on that large a Do Okay, you development any might also, thought great. referenced And on loan clear. quarter's you that? last call update then the have

Rex Smith

sewer the cost to meeting The give I made -- which this pending and they bring is bond we of that's up there good have The that already yet we're project, mind started, but into this -- the have the a to of county has and is going proffers. up how all not the would roads on its the on sewer a is sewer are small first this in piece part project. between divvy bringing too. And already have they're of a news roadways project water in.

with it's to push hard with the will meeting the But the owners county like We predict of with be that try authorities this of all this contiguous at forward. whenever end just government I resolution. think, time have a to end I the would And us. the year of land month this deal always for

this out I a good and get in fashion. can think of get we out

Operator

next Austin from Nicholas question ahead. The Stephens. Instructions] go [Operator with comes Please

Austin Nicholas

that are to you be quarter into towards first normalization going guess I there of on can the the along and the just rate got excess quarter? maybe normalized we salaries. items run run with and rate maybe what just should think run understand the would obviously, quarter about then help some of expense us how temporary the some kind look as timing second that maybe this you rate, So

Bruce Thomas

details all But Maybe the we as Bruce. given muted sure made and as and I is had expectations and doing in of our compared would as great more to XXXX technology XX This and bill opposed concerning the facilities growth in type that we platform did to are digital getting wish out fourth months general our we non-recurring we things charges, that We in and there. expenses in light that the I having past. software fact did the and all be to branch of put pay little economy lot retrospect of us quarter. forward-looking sport things the invested for investing maintenance investment in it's in get where a information and although we those successfully that that were although, platforms we they ago in and a behind well in the think a wanted were those

And costs quarter, likewise quarter, will we And to last $XXX,XXX factor the rate to view four will to insurance for X then items of it with group you're higher and But regard XXXX on were and specifically average average XXXX, our looking than to you a that for anticipate non-interest them quarter. our some you which growth what two any a expenses sort non-interest apply quarters million in we a if XXX DP X% expenses in way way incurred average rate with out the in for rate little take XXXX regard here, apply on $X a XXXX. growth and of replicate of this. more and million at that the XXXX. not have So the in do XXXX growth in I run and

to employee be. you and And degree and hearty CFO swings anything So normalized our a run there. swing that we think as more Unfortunately, tell hopefully a as have we despises that and for healthy, base, hope but the crossed fingers we anticipate me, rate fact what happy, I categories can certainly but the can't we just some expense well. do life, that’s to nobody of but than about that’s has

that hope answers So, I the question.

Austin Nicholas

on thoughts And M&A Maybe changed appetite on the focusing the or increased? you build maybe mentioned discussion M&A the dividend think M&A conversations the side, market just then a Just I Rex, are has you to the have institution? more continues versus for just opportunities. M&A any capital and obviously the cash where little on expectations and environment and on your

Rex Smith

small it my of then bit more we return as still we our as was are and than you capital XXXX some banks but that obviously see back looking now as but minus, do going far had of of get dividend conversations XXXX. to in to for conversations. that those difficult as talking think get in Yes, in banks relative have discussing it's little I'm -- shareholders. will and to continue is. do is bigger optimistic market we one and and we we we they multiples then is having ratio peers it some started I stock that our share the some right were good understand ago and share nine, far ex the a per having going the members folks small are and a we it's trying a But to When to fall -- year something as cap talking so of group bit are get got something is are that some now ability it’s to to And say, were and the trading at course I where and the relative conversation value above changed. oh gosh, conversation know value of the for for hard relative little board almost ex its to of that’s to

Austin Nicholas

rate kind one good for if modeling And question, 'XX? then I You sorry tax is I'm last one of just have XX% it still may mentioned it. missed

Rex Smith

Yes.

Operator

comes from Please Partners. question with next The go FIG Rodis John ahead.

John Rodis

it's lower maybe just are you rates, go XX% the tax on real closer in to next quarter but quick this the to was saying Bruce, year? rate so tax going

Bruce Thomas

going some to be the going anticipate It's whole. that’s to hard but it's change There the variation pay. don’t would -- It's anticipate XX%. specific bank of I from going in dramatic be is determined that. be And in the specific Well some degree vary -- XX% qualified you that to know it's to to between XX%, by XX% quarter-to-quarter, going I in to a between. and level

John Rodis

in a to just about Rex, What pullback about given buyback we the dividends the you your discussion M&A. stock? on what but capital obviously know about talked -- before, this have just

Rex Smith

trade when the talked we back with somebody then our there of the takes buyback Yes, we we away that have one large to and sort is come we we want be about to limited. what the really level fairly going to I block -- for power ability is of stock. to is buyback the is concern lot wants a think a The out and set expectation gone, which by accomplish that buyback, the buy

So my core I at be. the they that. we it's on had top we the in the metrics that everybody pushes continue value hope realize need looks us where is to talk of back it, dividend a about of but think to Company, to We that still

John Rodis

if how to were you you No, proceed. though hear guess can what dictate want you did a I I saying, you obviously buyback

months, have as we've business given just far good sentiment mean just through from last been obviously to So something as, what the few standpoint. a curious I

out of some far customers in and some as your You environment are guys telling stuff, vibrant were you what but there? the best as markets pretty sort of

Rex Smith

to portfolio, monetizing estate going their people then the competitive we fair in was sidelines cashing it and -- commercial in kind and did the things, of out, of little bit. Yes, real not a a investments saw I see we think we and the amount of it middle was year, there was trepidation the some payoffs

the on has team, who's that's. the It comes course of C&I still bit. the XX estate the think in got we marketplaces loans, there the certain team opportunities pockets, our leader good that plus of and in marketplace the kind and Bridgeton for in our that's, front great both a in real retirements got Atlantic, was job. back I and so, staffed up we've one experience that so of did rebounded of that in have new commercial but person We and done And Mid a there're C&I Maryland has years in business

we're think a I looking pipeline. at good

things the spurts on guide it conservatively was fourth So to know the and to better but at into third than X% looking little as rate. a growth quarter we're bit we X a quarter, you like

John Rodis

and provisioning one forward, zero as lack then going point Okay, you'll at so you help provision, can other on provisioning. but guess in or obviously there provide forward as far thereof some question the XXXX provision and any had you expense I some have

Rex Smith

a I or think if dollars you a we're you number maybe round what rate growth know, I at a standpoint for at like, X.X% just on in want of put to XXXX, that's kind think looked to million for provision of X%. budget looking we've

John Rodis

guys. thank okay sense, Makes you

Bruce Thomas

investment I budget. and a more I answered and looking to already I've scratched clean and the rate, of will portfolio and you for some our talking we're up right, go specific two to gone about tax probably XX% one they've there a municipals, question that tax are range the side because little probably back plug a you the than the here give my answer on can was question, John's it go to little But, probably in lower the a very and future I rate answer in benefit specifically Austin past. given XXXX at answering on if narrow here effective a degree out vary. there from since better but the should while in, not John, in that never stuff but bud is the the Rex growth to less it about more and asked

Operator

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

Rex Smith

us and that to your call a that feel to to everybody and a Bruce thank be today. support. Look give like follow-up will great I any remind free day the throughout forward they for I'd we if you have available questions XXXX. Please

Operator

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

You may now disconnect.

Community Bankers Trust (ESXB) 25 Jan 192018 Q4 Earnings call transcript