ESXB - Earnings call transcript Q1 2019 | Community Bankers Trust Corp

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Operator

Good day, and welcome to the Community Bankers Trust Corporation First Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rex Smith, President and Chief Executive Officer. Please go ahead.

Rex Smith

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

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

all for documents that the www.cbtrustcorp.com. can year. You to payoffs production quarter. not of website actually the Loans pure were We start estate real large our in net the purchase, credit, projects growth our portfolio the payoffs grew at excluding in significantly. million a were From several production gross refinances well these had typical portfolio The but loan for perspective, customer's ahead March access company a projections through $X.X of commercial out had competitors. cashing lowered and from payer and our

grew X.X%. $XX.X or XX months a XXXX, ended total the March of loans For XX, million

our was major growth and among diversify markets. spread continue our to We types geographically the loan also

the this the first quality to loans credit X.XX% yield strategy in XXXX led first in the significant Our focus a quarter of continues to on of X.XX% XXXX. in and from to on increase quarter appropriate be pricing;

focused margin is While bearing numbers. $XX.X undue the just There total year-over-year also one $XXX,XXX pricing in interest remains expansion. expense larger benefit Since earnings enhance of access of loan reduction non-interest the for on million or to also and a this to our growth down get leading in low markets, take costs upgrades and deposit we not growth, main risk banking. cost drivers in non-interest will mobile was structure X.X% net or positive to spending news was strong our digital decrease continue deposit are were area; growth competition included credit, and or expenses, software XX.X% year-over-year. in of more we including web our equipment salaries total Non-interest

per $X.XX quarter channel These for of to $X.X per fourth share an continue was see period the metrics a quarter same and quarter increased the to this year. for from We increase the both, in of year-over-year. an XXXX for us quarter digital million income and our quarter-over-quarter of in for XXXX. for earnings be earnings major XXXX, to the Net diluted positive of compared share $X.XX up the $X.X to the for remainder and of net XXXX. usage in banking led share in million for fully for income increase per led million per it focus $X.X to $X.XX This share, of will first

we nine years. Lastly, capped very in first off paying over a dividend quarter by positive our

financial Bruce I'd to the Thomas of Now, the for the first quarter. to turn to results the discuss like details call over

Bruce Thomas

number than just should what of about wrote-off future. this and was XXXX. and for per for looked XXXX, income of is to of X.XX%, the fortify of FDIC of Rather loss and hard assets exited in for work share XXXX. in all $X,XXX,XXX I rehashing transaction the our this of company a asset for return-on-average morning's giving The the would the the Rex Thank gave, of points fourth I the quarter the you, at over first the $X.XX trends ROA in put that we dent is with that call. return-on-average Net I or a talk XXXX ROE in us where since over quarter that the was per of That you the Rex, thought XX.XX%. quarter items trends the indemnification the increase or the or joining common share and XXXX us $X.XX and first resulted equity shared that same $X.XX on was agreements share equity. earnings quarter and first I this in thank the per like data a of the press $X.XX, direction and quarter release

However, it us path that achieve It sound the are was decision today. on for we on business to results also put a us our better positioned shareholders.

is loans or this XXXX, X.X% At $XXX.X or back million $XXX.X fourth X.XX% and portfolio loans XX has the has XX, of this margin what as a in PCI net quarter since Net total total total XX% the timeframe. has are look million, important fourth our question, the of margin of December XXXX. So portfolio percentage when grown the balance begs were again. or result of this XXXX XXXX XX, quarter interest XX.X%. the loans. high This XX total a X.XX% it end then. at loans. loans timeframe of above yield X.X% the were XXXX average vanishing an has ever-decreasing first a this to to XXXX averaged to March was loan become the the purchase Since of of of a over has interest of percentage the loans December At averaged over but portfolio? XX, quarter because were happened of look total At half was quarter Therefore, quarters loans from the XX.X% PCI approximately credit yielding impaired

possible? the this X.XX% XXXX added total branches it locations. of bank focus net margin average hard One have control the over worked over At increase is we $XXX.X March go above and total of XXXX. and associates total of XX, branches The non-interest time, or deposits. in end that XX.X% deposits, been total to At were reason but banks to same non-interest very has also worked interest bearing this are technology, that of XXXX on better has balance We XX% at branch first of were the the of XX.X% timeframe. expense this the to since at of closed realization it's invested shows to above deposits average XXXX is big December want quarter a and How XX, deposits. non-interest of this million a $XX.X Non-interest deposits bearing XX.X% bearing of moved deposits XX.X% has deposits. million timeframe. The

were result, of the X.X% since the expenses XX XXXX a non-interest of this first over $X,XXX,XXX above and average As third were XXXX, quarter. quarter In have only quarter the the non-interest quarters expenses per $X,XXX,XXX, averaged timeframe. over

the company, have on point will the our we we than we is The out focus it goals company and correct to As has ratio not to is drive this results. one. lower want on are The that efficiency deliver but a superior course it look-back path to to continue fully a today. realized purpose been this of is

it a will deposit As the or the forms, continue That quality over non-interest through yield With no a a I will preservation, margin that, turn growth, will on economy back focus expense in company, curve us and loan consistent variety increasing basis, bearing Rex. primarily what to with. be matter the presents be on of control. EPS growth, to

Rex Smith

you, Bruce. Thank

value. shareholder sheet Our unpredictable and to main building consistently that will fortress on flexibility goal always has to increase a We're allow in been an be focused will rate environment. continue interest balance

that is selective slow prudent asset our to quarter-to-quarter, we growth and net believe may interest this growth focus more it loan While margin. protect from our on

competition also balance side remain year-over-year costs us and interest top also competitive. deposits the the protects flexibility and extremely bearing growth focused is half balance gives as At more funding margin on the of sheet. double-digit low bearing deposits for the and We our of on non-interest sheet

line the We we the of and us a the gives for continue but to to will not getting and cost Progress our We channels. was this controlling grow the delivery ratio which quarter and of of we peers. to overhead diverse three in the mid-Atlantic from in focus operate reduce XXXX, strategies expense their on performing opportunity in marketplace. will a will ways in the in remainder growth non-interest our earnings with efficiency focus also markets employ best only controlled first on made strategy top geographic

grow We franchise average enhancing undue are value per without at earnings committed and risk. taking than to to levels better share

and strategy Despite to today, and market the and growth in focus forward of rest future earnings, the will call of the all the of in for we support company. call ongoing we XXXX. thank of the consistent for the prevail bank the remain now your believe you any We our excited produce stocks in we our With overall, participated that, trends company. Given will solid open questions. I in look performance. long-term who about the

Operator

first Whitman of Our comes O’Neill. Instructions] Sandler question [Operator from Please Casey go ahead.

Casey Whitman

in Rex, first growth. on quarter touched pay morning. downs loan impact of you've the the a Good little

for So what up of is it the outlook growth? to over you Are the year a your remainder bit? expecting pick

Rex Smith

Yes.

the little fourth pick a years at, We going it's a couple really of last last the we in the I'm probably than was thinking in it's lot the trend we're range year years. the steady showing for we're quarter, seeing I by and pipeline what looking to the of been in. be have time think but where been Casey it's a up more settles X% it couple in

Casey Whitman

outlook just on the margin. maybe little a then the bit And for

margin going maybe margin into than a think got had better ended flat to the up you and quarter it that. obviously, I

So without the of outlook here from hikes? your more rate possibility what is

Bruce Thomas

meet to we or improvement going beta slight of think our we it year-over-year numbers, our see if increase we'll we can the you total can in beat look bank non-interest the degree on beat the growth see but if mean, rate do back growth, is higher be could a and the that the liability on again, projections we well. side that than I expectations than see stable. to in and bearing the terms then is I the The once loan as definitely liability how that feel margin. deposits you higher side. margin or of growth uptick to Depending on relatively higher in

three For declined this the X than rate of and non-interest growth year basis the up X spread it's growing our total you margins of year, our basis margin went the but projections, months result deposits example, look points bearing three beating months if last a the at versus faster in points, bank.

Casey Whitman

pressure. Are the has that still quarter beta been ease there? just around good guess pretty some later so that starting deposit commentary is actually the liability see you I curious hike; argue your your in that I'd rate throughout of to the towards least at last or

Bruce Thomas

probably It's still there.

Rex Smith

I would agree.

the is of able for the mix get folks deposits still room deposit really to on. think of to typical. touched non-interest I -- XX% Casey, think target the bearing as which to Bruce It's I have our it us, be would some and -- trying we in to total be

Casey Whitman

And maybe set? have for are your here you branch what from plans us additional remind expansions that

Rex Smith

closely offices. all very looking been We've branch our at

but Maryland they're in offices some in be we we have be in up may we're -- feel offices growth one at fairly and office the of But couple this didn't at up scheduled where we like at come onboard we really for two end our additional We is one to see offices going that -- -- in good potential a Fairfax, get can wanted places deposit which looking we going it's traction rapidly. May of is just Lynchburg, the year closure to get there.

Operator

of Our comes Austin ahead. Stephens. from next go question Nicholas Please

Austin Nicholas

of if Maybe give just did. apologize reported from quarter? just kind expenses number of you Can you on trending hit already, outlook see you that that this was where you on if what maybe I hadn't an

Rex Smith

going it's be stable. relatively I think to

sure that Maryland our I expenses there. were think Edgewater, Maryland our occupancy Timonium, to in trying fairly new offices salary diligent from been and about leases We've benefits had and make hold. expenses the -- we

that got lot that more to in over far trying strong control As a that said, with don't peer expense, been ratio; get pretty steady. efficiency always, have Bruce so think I a we're on to we've little we've that as line And tracking of and something a [ph]. focus, on benefit we down but budget

Austin Nicholas

that with of capital; I then, the place maybe of of on the do guess guess on view? And kind you I how kind in into how view just capital maybe M&A and play view overall maybe your dividend would now, level

Rex Smith

said, deposit at, we've very we've activity; that's So is premium our balance looking now, have strength and engaged and we in looked as couple good M&A very obviously a deposits capital things also are part and competitive. we're a we've side it's in -- that's good approach. We sheet. of of do somebody right it disciplined the fortress got are for been

I you stretch long tale before, around I've back to just could on front it woe. the a that enough M&A never-ending think been this we've said when be see and come of

but there just ROEs feel in a hard in of So think starting there pretty I selective, smaller out are it's that the scale being think do. they're realizing years and a for -- good it's I that to the we've the been really than us, get last their they can't we're pinch, and our lot at are marketplace just cycle banks to are three

anything look we're but at make to that it do doesn't continue we not sense. to going So,

Austin Nicholas

one, in the Understood. for number? any And rate; then tax that changes just last maybe outlook be

Rex Smith

No.

I think it, there rate good be quarter that nothing this run unusual effective was a that so the tax should -- rate. is in

Operator

Our Catherine next question comes of ahead. Mealor Please go KBW. from

Catherine Mealor

Most profitability. driving Rex, EPS focus than talked on my growth. you of a questions better maybe big answered just peer were [ph], one picture of kind on about

what As expectations great? Do that which year? about be? it drivers about the that, over -- we go also see your the ROA, is like is you will there for should would how there the maybe X% we feel think moves you you it momentum your as upward ROA think think Do to back through do and for

Rex Smith

to Our to down that every on plan -- a and thorough went do boils around places, and of is can try execution a like we there; for how we hit machine, deposit and we're is year the the of I a it's to is lot item because "It pretty this get we going the XXX fuel be key we kind growth to target for table we're to going us. items, be think two push a feel of which market we said, double-digit we need, growth in loan strategic year like one mix" good not to going so key

do we spend primary about hard about one the being the being drivers smart piece that focus the growth way non-interest deposit bearing the we're is And that. that So, expense is second of of smart and on going then it's to money. we things, control, how their

cost-effective us to digital the do, the way going do think two places things channel I is laser-focused. be lot to of going we're a banking want a for to we to be are and where those

Catherine Mealor

investments Are that the more digital there to need near-term? make on any the in you increase could expenses banking side

Rex Smith

we've right those as pretty speak Yes, of we lot now. a pushed in expenses much

be it's that we driver. think the addition software one to later I would come might but year have on in not going a other big

Operator

[Operator of Instructions] Please Our from next Rodis question go ahead. John comes FIG Partners.

John Rodis

you to think that level? been have do when GDAs on my ideally, asked XX% could and you questions of you but Most target mentioned -- the answered, get

Rex Smith

it's are I run. about some still good but branches Well, a like it a out some pushing -- relatively be interesting bit legs going that, I would I people are be products some them got that to couple us. we've are longer to It But think we've there things that and got we're on an that's right tomorrow. that something now, bringing for that in, that are probably of to very got for I new help hard XX-month as is very going getting pretty we've under could think like there be said, me, little

for said, us. one top I as priorities it the is of So,

John Rodis

credits loan is The question, it provide said LTB? any and increase you multi-family you too one it was that commercial can where one Just on detail other like loan; multi-family in NPAs, Rex. in

Rex Smith

issues and Yes, it's foresee we handle it's and one. on it's any we've don't a Lynchburg, resolved quarter it's -- in one in I I have -- I it that will on think think and up the next got good

John Rodis

as low? it's far think loss pretty you sounds as it like So potential

Rex Smith

front on bit resolved it I think if bit as we've it was but in it's to resolved it Yes. on getting quarter of a and catching a -- in of its slowed with It's things were it but this are good little wouldn't before put much the we're it, -- construction it little the a up I some marketplace time where been think I that diligently leases road working those that. like down of ahead I over. one feel got and be will very is there

John Rodis

are I -- And what non-accrual closer million on million. that getting $X about or it's that? any had? other like the any Any to we progress on resolution long-term you've $X think

Rex Smith

a the there. a weeks, Monday we've road through which in county on meeting that out some and And of plan gotten been property county laid been with we've hold we think system is there that how I run up and the a and So, progress told water Monday, the in sewer the resides progress meeting was has week finally good have that that to sewer scheduled and pretty or that from get has Monday; the two this made. already

that after the to I think of the [ph] and going are which all was to -- we whole are they're surrounding how one, going we if property zoning the about of So, owners piece accomplished. ask lap get that,

we zoning. going property think two because great the our county where pieces of wants it's the in in be intersections us, the residential; sit, lot lighted for higher commercial of to commercial of For going which scream we're have a values is course, to I and piece

and that go so So, the we're point zoning actual good that's where around progress, get layout you're about the of when system, that's roads where the and getting; to road encouraged. major talking sewer I'm and the secondary you final

John Rodis

probably quarters away like few or… still But it a sounds

Rex Smith

lucky, quarter, -- we're fourth it's mean, if possibly. I Yes.

John Rodis

all just provisioning, provision thinking provisioning as of then to as And about all going How you we the tie of should sort had quarter the this last zero and be it far rest for again together, year? year. forward

Rex Smith

Yes, We've some of you're just putting the going, experiencing I to where to going good done next think right with and I appropriate think the quarters. your for growth going quarterly provisions we're the but provision specific we're a three job I we're problems, of think a see against see and going forward. reserves

Bruce Thomas

the probably I would we in month gotten got in March, have first payoffs If we the the agree. had of quarter. had we provision not that would

John Rodis

provision of you $XXX,XXX you may what And think $XXX,XXX and with just a the assuming hit probably -- X% ROA provision? or can even Okay. that be still above profitability

Rex Smith

And Yes. I a we're looking our -- budget quarter. think $XXX,XXX was

Operator

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

Rex Smith

everybody this remind and forward with I to any to like participating morning I'd Bruce and we'd here have rest XXXX. follow-up looking of thank that for questions, pleased if the today; are to and be you speak we're you you

Operator

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

You may now disconnect.

Community Bankers Trust (ESXB) 26 Apr 192019 Q1 Earnings call transcript