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Community Bankers Trust Corporation Reports Results for Third Quarter 2021
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PR Newswire
RICHMOND, Va., Oct. 29, 2021
RICHMOND, Va., Oct. 29, 2021 /PRNewswire/ -- Community Bankers Trust Corporation (the "Company") (NASDAQ: ESXB), the holding company for Essex Bank (the "Bank"), today reported results for the quarter ended September 30, 2021.
FINANCIAL HIGHLIGHTS
- Net income was $6.5 million for the quarter ended September 30, 2021 compared with net income of $5.4 million in the second quarter of 2021 and net income of $4.5 million in the third quarter of 2020.
- As a result of continued improvement in asset quality the allowance for loan losses reflected a reserve recovery of $1.250 million.
- Net interest income was $14.8 million for the third quarter of 2021, a linked quarter increase of $298,000, or 2.1%.
- Interest on deposits declined $85,000 on a linked quarter basis, and the associated cost of funds declined from 0.48% to 0.43%.
- Merger related expenses of $147,000 were incurred in the third quarter.
- Diluted earnings per share were $0.28 for the third quarter of 2021 compared with $0.24 for the second quarter of 2021 and $0.20 for the third quarter of 2020.
- Return on average assets (ROA) was 1.48% for the third quarter of 2021 compared with 1.26% for the second quarter of 2021 and 1.12% for the third quarter of 2020. For the first nine months, ROA was 1.44% in 2021 and 0.87% in 2020.
- Return on average equity (ROE) was 14.28% for the third quarter of 2021 compared with 12.30% for the second quarter of 2021 and 11.04% for the third quarter of 2020. For the first nine months, ROE was 14.00% in 2021 and 8.39% in 2020.
OPERATING HIGHLIGHTS
- Loans, excluding purchased credit impaired (PCI) loans, grew $39.1 million, or 3.3%, during the third quarter of 2021. Loans grew $53.3 million, or 4.5%, year over year.
- Nonperforming assets were $4.0 million at September 30, 2021, $4.6 million lower than one year earlier. The ratio of nonperforming assets to loans and other real estate was 0.33% at September 30, 2021 compared with 0.75% at December 31, 2020 and 0.73% one year earlier.
- Deposits grew $10.0 million, or 0.7%, during the third quarter of 2021, and grew $129.5 million, or 9.5%, year over year.
- Noninterest bearing deposits grew $64.0 million, or 22.7%, year over year.
- Net interest margin was 3.52% in the third quarter of 2021 compared with 3.58% in the second quarter of 2021 and 3.35% in the third quarter of 2020. The net interest margin was 3.58% for the first nine months of 2021 compared with 3.48% for the same period in 2020.
- PPP loan balances, net of fees, decreased $19.2 million during the third quarter of 2021 and were $32.8 million at September 30, 2021 compared with $49.3 million at December 31, 2020 and $85.1 million at September 30, 2020.
- Total securities, $402.9 million at September 30, 2021, increased $53.3 million during the third quarter and cash and equivalents declined $74.6 million as excess liquidity was invested into higher yielding assets.
On June 2, 2021, the Company entered into a merger agreement with United Bankshares, Inc. ("United"), the parent company of United Bank. Under the merger agreement, United will acquire 100% of the outstanding shares of the Company's common stock in exchange for shares of United's common stock. The exchange ratio will be fixed at 0.3173 of United's shares for each share of the Company. The merger is expected to close in the fourth quarter of 2021, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals and approval by the Company's shareholders. Upon closing, the Company will merge into United, and Essex Bank will merge into United Bank, with United and United Bank being the surviving entities.
MANAGEMENT COMMENTS
Rex L. Smith, III, President and Chief Executive Officer, stated, "The results of the quarter and the fundamentals behind the results are impressive. Loan growth was better than expected for this time of year at $39.1 million, and the pipeline remains strong. Net interest income continued to increase year over year as noninterest bearing deposits grew 22.7%. Additionally, overall asset quality is exceptional as nonperforming assets are at the lowest level in 10 years. "
Smith added, "We are excited about our pending merger with United Bank, which is on track to close in the fourth quarter this year. Becoming a part of the largest regional bank headquartered in Virginia will add enhanced products and delivery services to help us grow stronger in our markets and more value than previously possible to our customers and shareholders."
RESULTS OF OPERATIONS
Overview
Linked Quarter Basis
Net income was $6.5 million for the third quarter of 2021 compared with net income of $5.4 million in the second quarter of 2021. Earnings per share were $0.29 basic and $0.28 fully diluted for the third quarter of 2021 and $0.24 basic and fully diluted for the second quarter of 2021. Provision for loan losses reflected a credit of $1.250 million for the third quarter of 2021 compared with no provision in the second quarter of 2021. Continued improvement in credit quality was the driver behind the recapture in the third quarter of previous provision for loan losses. There was a more stable economic climate in the first nine months of 2021 compared with each quarter in 2020. Net interest income increased by $298,000, or 2.1%, in the third quarter compared with the second quarter of 2021. Net interest income was positively affected by a continuation of decreasing costs in interest expense, which declined $81,000 on a linked quarter basis. Noninterest income decreased $80,000 on a linked quarter basis while noninterest expenses decreased $82,000. Income tax expense increased $428,000 in the third quarter of 2021 compared with the prior quarter. Details of the linked quarter financial performance of the Company are presented below.
Year-over-Year Third Quarter
Net income in the third quarter of 2021 increased $2.0 million when compared to the same period in 2020. Net income was $6.5 million in the third quarter of 2021, with earnings per share of $0.29 basic and $0.28 fully diluted. Net income for the third quarter of 2020 was $4.5 million, with earnings per share of $0.20 basic and fully diluted. There was an increase of $2.1 million in net interest income, primarily from both a decline in interest expense of $1.4 million in the third quarter of 2021 compared with the same period one year earlier and an increase in interest income of $732,000 over the same comparison period. Provision for loan losses decreased $1.250 million year over year as the Company recaptured in the third quarter of 2021 previously recorded provision. Offsetting these increases to net income were an increase of $584,000 in noninterest expenses and a decrease of $91,000 in noninterest income. There was also an increase of $625,000 in income tax expense year-over-year. Details of the year-over-year financial performance of the Company are presented below.
Year-over-Year Nine Months
Net income of $18.6 million for the first nine months of 2021 reflects an increase of $8.5 million, or 84.5%, over net income of $10.1 million for the same period in 2020. Provision for loan losses reflects a reserve recovery of $2.650 million for the first nine months of 2021 compared with a provision of $4.2 million during the early stage of the COVID-19 pandemic for the first nine months of 2020. Interest expense declined $5.1 million and was $4.8 million for the first nine months of 2021 compared with $9.9 million for the first nine months of 2020. Smaller increases were in interest and dividend income, which increased $959,000, and in noninterest income, which increased $47,000 in the first nine months of 2021 compared with the same period in 2020. Offsetting these increases to net income were an increase of $2.1 million in noninterest expenses, which were $27.1 million for the first nine months of 2021, and $2.4 million greater expense in income taxes, which were $4.8 million for the first nine months of 2021.
The following table presents summary income statements for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020 and the nine months ended September 30, 2021 and September 30, 2020.
| SUMMARY INCOME STATEMENT | | | | | | | | | | |
| (Unaudited) (Dollars in thousands) | | | | | | | | | | |
| | | For the three months ended | | For the nine months ended | ||||||
| | | 30-Sep-21 | | 30-Jun-21 | | 30-Sep-20 | | 30-Sep-21 | | 30-Sep-20 |
| Interest income | $ | 16,281 | $ | 16,064 | $ | 15,549 | $ | 48,205 | $ | 47,246 |
| Interest expense | | 1,486 | | 1,567 | | 2,836 | | 4,835 | | 9,935 |
| Net interest income | | 14,795 | | 14,497 | | 12,713 | | 43,370 | | 37,311 |
| (Recovery of) provision for loan losses | | (1,250) | | - | | - | | (2,650) | | 4,200 |
| Net interest income after (recovery of ) provision for | | 16,045 | | 14,497 | | 12,713 | | 46,020 | | 33,111 |
| Noninterest income | | 1,381 | | 1,461 | | 1,472 | | 4,470 | | 4,423 |
| Noninterest expense | | 9,110 | | 9,192 | | 8,526 | | 27,057 | | 24,993 |
| Income before income taxes | | 8,316 | | 6,766 | | 5,659 | | 23,433 | | 12,541 |
| Income tax expense | | 1,768 | | 1,340 | | 1,143 | | 4,816 | | 2,450 |
| Net income | $ | 6,548 | $ | 5,426 | $ | 4,516 | $ | 18,617 | $ | 10,091 |
| | | | | | | | | | | |
| EPS Basic | $ | 0.29 | $ Werbung Mehr Nachrichten zur COMMUNITY BKERS TR. Aktie kostenlos abonnieren
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