Exhibit 99.1

 

Community Bankers Trust Corporation Reports Results for Fourth Quarter and Year 2018

 

Conference Call on Friday, January 25, 2019, at 10:00 a.m. Eastern Time

 

Richmond, VA, January 25, 2019 – Community Bankers Trust Corporation (the “Company”) (NASDAQ: ESXB), the holding company for Essex Bank (the “Bank”), today reported unaudited results for the fourth quarter and year ended December 31, 2018.

 

FINANCIAL HIGHLIGHTS

 

·

Fourth quarter 2018 net income was $3.4 million, or $0.15 per common share, basic and fully diluted.

·

Pre-tax income was $4.1 million for the fourth quarter of 2018 compared with $3.6 million in the fourth quarter of 2017, an increase of $568,000, or 15.9%.

·

The fourth quarter of 2018 reflects an increase in net interest margin, which was 3.78%, compared with 3.77% in the third quarter of 2018 and 3.72% in the fourth quarter of 2017.

·

For the year ended December 31, 2018, net income was $13.7 million, or $0.62 per common share basic and $0.61 per common share fully diluted, compared with net income of $7.2 million, or $0.33 per common share basic and $0.32 per common share fully diluted for 2017.

·

For the year ended December 31, 2018, pre-tax income was $16.8 million, an increase of $2.7 million, or 18.9%, over pre-tax income of $14.1 million for the year ended December 31, 2017.

·

For the year ended December 31, 2018, return on average assets was 1.01% and return on average equity was 10.59%.

·

Common tangible book value per share of $6.21 at December 31, 2018 is an increase of $0.59, or 10.5%, from December 31, 2017. This non-GAAP measure is calculated by dividing total shareholders’ equity by shares of common stock outstanding at each period end.

 

OPERATING HIGHLIGHTS

 

·

Gross loans, excluding purchased credit impaired (“PCI”) loans, grew $31.3 million, or 3.3%, during the fourth quarter of 2018 and $51.7 million, or 5.5%, since year-end 2017.

·

Commercial real estate loans grew $21.4 million, or 6.0%, during the fourth quarter of 2018 and commercial loans increased by $18.4 million, or 10.8%.

·

Noninterest bearing deposits grew $12.1 million, or 7.9%, during 2018.

·

The Bank opened two full-service banking facilities in 2018 in strong market areas.

 

MANAGEMENT COMMENTS

 

Rex L. Smith, III, President and Chief Executive Officer, stated, “We finished the year with strong growth both in loans and in core deposits, while slightly increasing our net interest margin. We have emphasized credit quality and pricing discipline throughout the year, which allowed us to grow loan and deposit relationships in the types of products and rate structures that make sense for the uncertain interest rate environment. Our goal was to meet or exceed a 1% return on assets, which we achieved. Net income hit a new company best at $13.7 million for the year, which included opening two new branch offices.”

 

Smith added, “Noninterest expense was slightly higher than anticipated due to group insurance costs and short term replication in salary expenses as we added some important positions as part of succession planning. These will normalize in the first half of 2019. Additionally, we incurred some one-time expenses in data processing and additional equipment and other costs associated with the opening of our new branch in Edgewater, Maryland.”

 

Smith concluded, “We continue to emphasize credit quality and pricing structure as we are preparing for multiple economic and interest rate scenarios. Our liquidity, capital structure and credit discipline are key as we move forward. Our markets are large and diverse and will allow us to continue our controlled growth strategy and sustain strong earnings per share growth in 2019.”

 

 

RESULTS OF OPERATIONS

 

The Company had net income of $3.4 million for the fourth quarter of 2018, compared with linked quarter net income of $4.0 million in the third quarter of 2018 and year-over-year net loss of $640,000 in the fourth quarter of 2017. Fully diluted earnings per common share were $0.15, $0.17 and $(0.03) for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively. For the year ended December 31, 2018, net income was $13.7 million, or $0.61 per fully diluted common share, compared with net income of $7.2 million, or $0.32 per fully diluted common share, for the year ended December 31, 2017.

 

Net income in 2017 was affected by a fourth quarter charge of $3.5 million to income tax expense related to the re-measurement of net deferred tax assets resulting from the 21% corporate income tax rate established by the Tax Cuts and Jobs Act of 2017 (the “Act”) enacted in December 2017.

 

The following table presents summary income statements for the three months ended December 31, 2018, September 30, 2018, and December 31, 2017 and the years ended December 31, 2018 and December 31, 2017.

 

SUMMARY INCOME STATEMENT
(Unaudited)
(Dollars in thousands)		For the three months ended												For the year ended
		31-Dec-18				30-Sep-18				31-Dec-17				31-Dec-18				31-Dec-17
Interest income		$	15,508			$	15,144			$	13,758			$	59,241			$	53,315
Interest expense			3,415				3,164				2,509				12,054				9,199
Net interest income			12,093				11,980				11,249				47,187				44,116
Provision for loan losses			-				-				400				-				550
Net interest income after provision for loan losses			12,093				11,980				10,849				47,187				43,566
Noninterest income			1,084				1,211				1,045				4,463				4,072
Noninterest expense			9,033				8,291				8,318				34,877				33,533
Income before income taxes			4,144				4,900				3,576				16,773				14,106
Income tax expense			787				945				4,216				3,085				6,903
Net income		$	3,357			$	3,955			$	(640	)		$	13,688			$	7,203
EPS Basic		$	0.15			$	0.18			$	(0.03	)		$	0.62			$	0.33
EPS Diluted		$	0.15			$	0.17			$	(0.03	)		$	0.61			$	0.32
Return on average assets, annualized			0.98	%			1.16	%			(0.19	%)			1.01	%			0.56	%
Return on average equity, annualized			10.01	%			12.08	%			(2.02	%)			10.59	%			5.91	%

 

Net Interest Income

 

Linked Quarter Basis

Net interest income was $12.1 million for the quarter ended December 31, 2018 compared with $12.0 million for the quarter ended September 30, 2018. This is an increase of $113,000, or 0.9%.

 

Interest income with respect to loans, excluding PCI loans, increased $276,000, or 2.3%, during the fourth quarter when compared with the third quarter of 2018. This increase was attributable to an increase in the average balance of loans, excluding PCI loans, of $9.7 million during the fourth quarter of 2018 over the previous quarter, coupled with higher rates. The yield on loans increased from 4.89% in the third quarter of 2018 to 4.95% in the fourth quarter of 2018. Interest income with respect to PCI loans was $1.3 million in each of the third and fourth quarters of 2018. Interest income on securities increased $58,000 on a linked quarter basis. Interest on deposits in other banks increased $6,000 on a linked quarter basis primarily due to an increase of $1.5 million in the average balances of those deposits.

 

Securities income was $2.1 million on a tax-equivalent basis for the fourth quarter of 2018, which was an increase of $52,000 from the third quarter of 2018. The tax-equivalent yield on the securities portfolio was 3.31% in the fourth quarter of 2018 compared with a tax-equivalent yield of 3.21% in the third quarter of 2018.

 

Interest expense of $3.4 million in the fourth quarter of 2018 was an increase of $251,000, or 7.9%, on a linked quarter basis. Interest on deposits increased $361,000, or 13.4%. Interest on borrowed funds decreased by $110,000, or 23.7%. Average balances for interest bearing deposits increased by $26.8 million, or 2.8%. However, the cost of these deposits increased from 1.10% in the third quarter of 2018 to 1.22% in the fourth quarter of 2018, resulting in the 7.9% increase in interest expense. The growth in interest bearing deposits in the fourth quarter of 2018 allowed the Company to reduce the level of more expensive FHLB and other borrowings by $25.9 million, on average, during the quarter. The increased rates paid on interest bearing deposits and wholesale funding resulted in an increase in the cost of interest bearing liabilities from 1.18% in the third quarter of 2018 to 1.27% in the fourth quarter of 2018.

 

 

With the changes in net interest income noted above, the tax-equivalent net interest margin increased from 3.77% in the third quarter of 2018 to 3.78% in the fourth quarter of 2018. The interest spread, however, decreased from 3.58% to 3.57% on a linked quarter basis.

 

Yearly Comparison 2018 versus 2017

Net interest income was $47.2 million for the year ended December 31, 2018, an increase of $3.1 million, or 7.0%, as compared with the year ended December 31, 2017. The yield on earning assets was 4.71% for 2018 compared with 4.54% for 2017. Interest and fees on loans of $46.3 million for 2018 was an increase of $6.0 million compared with $40.3 million for 2017. Interest and fees on PCI loans declined $511,000 over this same time frame. Securities income increased $336,000 for 2018 compared with 2017. Interest on deposits in other banks increased $107,000 for 2018 over 2017 primarily due to an increase in the return on those balances from 1.26% to 2.16% in 2018. On a tax-equivalent basis, income on securities decreased $326,000, primarily the result of less benefit on bank qualified municipal securities under the Act. Despite the lower benefit from the decrease in the tax rate, the tax-equivalent yield on the portfolio actually increased and was 3.15% for 2018, based on a 21% tax rate, and 3.12% for 2017, based on a 34% tax rate.

 

Interest expense of $12.1 million represented an increase of $2.9 million, or 31.0%, for 2018 compared with 2017. Average interest bearing liabilities increased $45.5 million, or 4.5%, as loan growth has been funded by an increase of $38.4 million, or 4.1%, in the average balance of interest bearing deposits. Of this increase in average balances of interest bearing deposits, $16.9 million was in interest bearing demand deposit accounts and $14.5 million was in savings and money market accounts. Higher cost time deposit average balances only increased by $7.0 million in 2018 compared with 2017.

 

The tax equivalent net interest margin declined nominally in 2018 compared with 2017 and was 3.76% for 2018 and 3.78% for 2017. While the yield on earning assets increased by 17 basis points over this time frame, the competition for funding has pushed the cost of interest bearing liabilities up, from 0.90% to 1.13%. Likewise, the net interest spread declined and was 3.58% for 2018 versus 3.64% for 2017. The decrease in the interest spread impact on the net interest margin was mitigated to some degree by an increase, on average, in the level of noninterest bearing deposits of $18.3 million, or 13.4%, in 2018 compared with 2017.

 

Year-Over-Year Quarter

Net interest income increased $844,000, or 7.5%, from the fourth quarter of 2017 to the fourth quarter of 2018. Net interest income was $12.1 million in the fourth quarter of 2018 compared with $11.2 million for the same period of 2017. Interest and dividend income increased $1.8 million, or 12.7%, over this time period. The increase in interest and dividend income was generated by an increase of $49.7 million, or 4.0%, in the level of average earning assets. The yield on earning assets increased from 4.52% in the fourth quarter of 2017 to 4.84% in the fourth quarter of 2018. The average balance of loans, excluding PCI loans, increased $64.2 million, or 7.1%, from $911.2 million in the fourth quarter of 2017 to $975.4 million in the fourth quarter of 2018. Interest income on securities increased $248,000, as it was $2.0 million in the fourth quarter of 2018 and $1.7 million in the fourth quarter of 2017. On a tax-equivalent basis, the yield on investment securities was 3.31% in the fourth quarter of 2018, based on a 21% tax rate, and 3.07% in the fourth quarter of 2017, based on a 34% tax rate. The lower tax rate reduced the benefit derived, on a tax-equivalent basis, from bank qualified municipal securities and lowered the tax-equivalent yield. Interest on deposits in other banks increased by $47,000 in the fourth quarter of 2018 over the same period in 2017. While there was an average balance increase of $1.1 million year-over-year in deposits in other banks, the primary driver in the increase in income was due to an increase in the return on those balances from 1.35% in the fourth quarter of 2017 to 2.36% in the fourth quarter of 2018.

 

Interest on PCI loans was $1.3 million in the fourth quarter of 2018 compared with $1.4 million in the fourth quarter of 2017. The average balance of the PCI portfolio declined $6.1 million during the year-over-year comparison period.

 

Interest expense increased $906,000, or 36.1%, when comparing the fourth quarter of 2017 and the fourth quarter of 2018. Interest expense on deposits increased $939,000, or 44.3%, as the average balance of interest bearing deposits increased $54.1 million, or 5.7%. The increase in deposit cost was driven by an increase of 11.0% in the average balance of time deposits of $61.4 million, year-over-year, coupled with an increase in the rate paid on those deposits of 48 basis points. The cost of time deposits was 1.72% for the fourth quarter of 2018 compared with 1.24% for the same period in 2017. The average balance of FHLB and other borrowings decreased $23.4 million year-over-year, and there was an increase in the rate paid, from 1.68% in the fourth quarter of 2017 to 2.08% in the fourth quarter of 2018. This resulted in a decrease of $32,000 in the expense of this wholesale funding source, to $340,000 in the fourth quarter of 2018. The average balance of FHLB and other borrowings was $64.8 million in the fourth quarter of 2018. Overall, the Bank’s cost of interest bearing liabilities increased 31 basis points, from 0.96% in the fourth quarter of 2017 to 1.27% in the fourth quarter of 2018.

 

The tax-equivalent net interest margin increased six basis points, from 3.72% in the fourth quarter of 2017 to 3.78% in the fourth quarter of 2018. The interest spread was 3.57% in the fourth quarter of 2018 and was 3.56% for the same period in 2017. Net interest margin increased despite the stable interest spread because of growth of $13.8 million, or 9.3%, in the average balance of noninterest bearing deposits.

 

 

The following table compares the Company's net interest margin, on a tax-equivalent basis, for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017 and the years ended December 31, 2018 and December 31, 2017.

 

NET INTEREST MARGIN
(Unaudited)
(Dollars in thousands)		For the three months ended
		31-Dec-18				30-Sep-18				31-Dec-17
Average interest earning assets		$	1,283,502			$	1,274,435			$	1,233,754
Interest income		$	15,508			$	15,144			$	13,758
Interest income - tax-equivalent		$	15,643			$	15,285			$	14,065
Yield on interest earning assets			4.84	%			4.76	%			4.52	%
Average interest bearing liabilities		$	1,066,139			$	1,065,268			$	1,036,542
Interest expense		$	3,415			$	3,164			$	2,509
Cost of interest bearing liabilities			1.27	%			1.18	%			0.96	%
Net interest income		$	12,093			$	11,980			$	11,249
Net interest income - tax-equivalent		$	12,228			$	12,121			$	11,556
Interest spread			3.57	%			3.58	%			3.56	%
Net interest margin			3.78	%			3.77	%			3.72	%
		For the year ended
		31-Dec-18				31-Dec-17
Average interest earning assets		$	1,269,683			$	1,200,734
Interest income		$	59,241			$	53,315
Interest income - tax-equivalent		$	59,816			$	54,552
Yield on interest earning assets			4.71	%			4.54	%
Average interest bearing liabilities		$	1,062,619			$	1,017,082
Interest expense		$	12,054			$	9,199
Cost of interest bearing liabilities			1.13	%			0.90	%
Net interest income		$	47,187			$	44,116
Net interest income - tax-equivalent		$	47,762			$	45,353
Interest spread			3.58	%			3.64	%
Net interest margin			3.76	%			3.78	%

 

Provision for Loan Losses

 

The Company records a separate provision for loan losses for its loan portfolio, excluding PCI loans, and the PCI loan portfolio. There was no provision for loan losses on the loan portfolio, excluding PCI loans, during either the fourth quarter or the year ended December 31, 2018. This compares with a provision for loan losses of $400,000 for the fourth quarter of 2017 and $550,000 for the year ended December 31, 2017. The absence of a provision during the fourth quarter and year ended December 31, 2018 was the direct result of nominal charge-offs and stable asset quality, coupled with the level of loan growth during the period. There was no provision for loan losses on the PCI loan portfolio during any of 2018 or 2017. Additional discussion of loan quality is presented below.

 

Noninterest Income

 

Linked Quarter Basis

Noninterest income was $1.1 million for the fourth quarter of 2018, a decrease of $127,000 compared with $1.2 million for the third quarter of 2018.  Gain (loss) on securities transactions, net exhibited a linked quarter decrease of $80,000. There were losses of $12,000 realized in the fourth quarter of 2018 through sales and calls of securities. Gains of $68,000 were realized on the sale of securities in the third quarter of 2018. Mortgage loan income decreased $66,000 on a linked quarter basis and was $31,000 in the fourth quarter of 2018. There was $65,000 in gain on sale of loans in the third quarter of 2018 versus none in the fourth quarter of 2018. Offsetting these decreases to noninterest income was service charges and fees, which increased $66,000 on a linked quarter basis and were $692,000 for the fourth quarter of 2018. Other noninterest income of $189,000 was a linked quarter increase of $18,000.

 

 

Yearly Comparison 2018 versus 2017

Noninterest income was $4.5 million for 2018, an increase of $391,000, or 9.6%, compared with $4.1 million for 2017. Service charges on deposit accounts of $2.5 million was an increase of $274,000 for 2018 compared with $2.2 million in 2017. Mortgage loan income of $319,000 for 2018 was an increase of $77,000 from $242,000 for 2017. Gain on sale of loans was $118,000 for 2018 versus none for 2017. Other noninterest income, driven by higher brokerage commission and investment dividend income, was $711,000 and reflected an increase of $86,000 in 2018 over $625,000 in 2017. Partially offsetting these increases was a decline of $140,000 in gain (loss) on securities transactions, net, which were $70,000 for 2018 compared with $210,000 for 2017.

 

Year-Over-Year Quarter

Noninterest income increased $39,000, or 3.7%, and was $1.1 million in the fourth quarter of 2018 compared with $1.0 million in the fourth quarter of 2017. Service charges and fees exhibited the largest increase, $120,000, in the fourth quarter of 2018 compared with the same period in 2017 and were $692,000. Other noninterest income, once again as a result of improved brokerage commission and investment dividend income, increased $12,000 year-over-year and was $189,000 in the fourth quarter of 2018. Mortgage loan income decreased $48,000 year-over-year, from $79,000 in the fourth quarter of 2017 to $31,000 in the same period of 2018. Gains (losses) on securities transactions, net decreased $42,000 year-over-year as a result of sales and call activity in the securities portfolio.

 

Noninterest Expenses

 

Linked Quarter Basis

Noninterest expenses totaled $9.0 million for the fourth quarter of 2018, as compared with $8.3 million for the third quarter of 2018, an increase of $742,000, or 8.9%. Salaries and employee benefits were $5.6 million in the fourth quarter of 2018 and increased $551,000 on a linked quarter basis. Group insurance costs increased $375,000 on a linked quarter basis, while salaries increased $165,000. The group insurance cost increase was related to higher expected claims costs when compared with the third quarter. Also increasing in the fourth quarter of 2018 compared with the third quarter of 2018 were data processing expenses, which were $655,000, an increase of $173,000. Other operating expenses increased $89,000 on a linked quarter basis and were $1.5 million in the fourth quarter of 2018. Occupancy expenses of $827,000 increased $47,000, or 6.0%, in the fourth quarter of 2018 as a result of the December opening of a new branch banking facility in Edgewater, Maryland. Offsetting these increases to noninterest expenses was a decrease of $108,000 on a linked quarter basis in other real estate expenses, net, which reflected a credit of $45,000 in the fourth quarter of 2018 compared with expense of $63,000 in the third quarter of 2018. In the fourth quarter of 2018, there were gains on sales of several properties classified in other real estate expense versus write-downs and losses on other real estate properties that occurred in the third quarter of 2018.

 

Yearly Comparison 2018 versus 2017

Noninterest expenses were $34.9 million for the year ended December 31, 2018 as compared with $33.5 million for the year ended December 31, 2017. This is an increase of $1.3 million, or 4.0%. Salaries and employee benefits increased $2.1 million, or 10.6%, for 2018 compared with the same period in 2017. Within this increase, $1.0 million was related to group hospital and medical insurance increases and $850,000 was related to increases in total salaries. Also impacting noninterest expenses for 2018 compared with 2017 were increases of $254,000 in equipment expenses and $58,000 in occupancy expenses reflecting the opening of three new branches during the second half of 2017 and two new branches in 2018. Data processing fees of $2.1 million represented an increase of $199,000, or 10.3%, over 2017. FDIC assessment of $776,000 for 2018 was an increase of $50,000 over 2017. Offsetting these increases was a decrease of $898,000 in amortization of intangibles expense, which were fully amortized in 2017, and the Company’s financial statements no longer reflect the expense associated with any core deposit intangibles. Other operating expenses of $5.8 million for 2018 was a decrease of 5.3%, or $323,000, from 2017. Telephone and internet lines decreased $278,000 in 2018 as a result of reconfiguration, including changing service providers.

 

Year-Over-Year Quarter

Noninterest expenses increased $715,000, or 8.6%, when comparing the fourth quarter of 2018 to the same period in 2017. Salaries and employee benefits increased $590,000, or 11.8%, as a result of the new branches and increased group health insurance costs noted above. Data processing expenses of $655,000 in the fourth quarter of 2018 was a year-over-year increase of $198,000. Equipment expenses of $374,000 was a year-over-year increase of $79,000, while occupancy expenses increased by $26,000, the result of the two branches added since the beginning of 2018. Offsetting these year-over-year increases to noninterest expenses were decreases of $109,000 in other real estate expenses, net and $50,000 in other operating expenses.

 

 

The following table compares the Company's other operating expenses included in noninterest expenses for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017 and the years ended December 31, 2018 and December 31, 2017.

 

OTHER OPERATING EXPENSES
(Unaudited)
(Dollars in thousands)		For the three months ended
		31-Dec-18				30-Sep-18				31-Dec-17
Bank franchise tax		$	179			$	37			$	158
Telephone and internet line			53				50				172
Stationery, printing and supplies			163				160				153
Marketing expense			146				156				155
Credit expense			128				180				75
Outside vendor fees			177				155				200
Other expenses			619				638				602
Total other operating expenses		$	1,465			$	1,376			$	1,515
		For the year ended
		31-Dec-18				31-Dec-17
Bank franchise tax		$	574			$	632
Telephone and internet line			398				676
Stationery, printing and supplies			586				674
Marketing expense			613				656
Credit expense			501				584
Outside vendor fees			631				562
Other expenses			2,500				2,342
Total other operating expenses		$	5,803			$	6,126

 

Income Taxes

 

Income tax expense was $787,000 for the fourth quarter of 2018, compared with income tax expense of $945,000 for the third quarter of 2018 and $4.2 million for the fourth quarter of 2017. For the year ended December 31, 2018, income tax expense was $3.1 million compared with $6.9 million for the year ended December 31, 2017. Fourth quarter 2017 income tax expense included a one-time charge of $3.5 million due to the new 21% tax rate established by the Act. This legislation caused a re-assessment of the Company’s net deferred tax assets and, as a result of this re-assessment, that asset was lowered in value by $3.5 million. The effective tax rate was 19.0% for the fourth quarter of 2018 versus 19.3% for the third quarter of 2018. For the year ended December 31, 2018, the effective tax rate was 18.4% and, for the same period in 2017, it would have been 23.8% excluding the write-down entry of $3.5 million. The decrease in the Company’s effective tax rate resulted principally from the decrease in its applicable federal corporate income tax rate from, 34% to 21%, as a result of the Act.

 

FINANCIAL CONDITION

 

Total assets increased $57.7 million, or 4.3%, to $1.394 billion at December 31, 2018 when compared with December 31, 2017. Total assets increased $43.5 million, or 3.2%, during the fourth quarter of 2018. Total loans, excluding PCI loans, were $993.7 million at December 31, 2018, increasing $51.7 million, or 5.5%, from year end 2017. Total loans, excluding PCI loans, grew $31.3 million in the fourth quarter of 2018. Total PCI loans were $38.3 million at December 31, 2018 versus $44.3 million at year end 2017, a decrease of $6.0 million, or 13.6%.

 

During 2018, commercial loans reflected the largest loan category growth, increasing by $29.7 million, or 18.7%, and were $188.7 million at December 31, 2018. Commercial mortgage loans, the largest category, increased in 2018 by $13.6 million, or 3.7%, and ended the year at $380.0 million. Construction and land development loans of $120.4 million at December 31, 2018 reflected growth of $12.6 million during the year. Consumer installment loans of $12.0 million grew by $6.9 million during 2018 and included the addition of a purchased in-market, high quality consumer auto loan pool of $9.0 million in March. Offsetting these increases were declining balances in residential 1 – 4 family mortgages, which declined by $11.3 million, or 5.0%, and second mortgages, which declined by $1.6 million.

 

 

The following table shows the composition of the Company's loan portfolio, excluding PCI loans, at December 31, 2018, September 30, 2018 and December 31, 2017.

 

LOANS (excluding PCI loans)
(Unaudited)
(Dollars in thousands)			31-Dec-18								30-Sep-18								31-Dec-17
		Amount				% of Loans				Amount				% of Loans				Amount				% of Loans
Mortgage loans on real estate:
Residential 1-4 family		$	216,268				21.77	%		$	216,203				22.46	%		$	227,542				24.16	%
Commercial			379,904				38.23				358,490				37.25				366,331				38.89
Construction and land development			120,413				12.12				135,021				14.03				107,814				11.44
Second mortgages			6,778				0.68				7,179				0.75				8,410				0.89
Multifamily			59,557				5.99				52,255				5.43				59,024				6.27
Agriculture			8,370				0.84				8,066				0.84				7,483				0.79
Total real estate loans			791,290				79.63				777,214				80.76				776,604				82.44
Commercial loans			188,722				18.99				170,310				17.70				159,024				16.88
Consumer installment loans			12,048				1.21				13,135				1.36				5,169				0.55
All other loans			1,645				0.17				1,766				0.18				1,221				0.13
Gross loans			993,705				100.00	%			962,425				100.00	%			942,018				100.00	%
Allowance for loan losses			(8,983	)							(8,993	)							(8,969	)
Loans, net of unearned income		$	984,722							$	953,432							$	933,049

 

The Company’s securities portfolio, excluding restricted equity securities of $7.8 million, declined $2.1 million since year end 2017 to total $248.8 million at December 31, 2018. State, county and municipal securities balances declined by $16.8 million during 2018 while mortgage-backed securities of U.S. Government sponsored agencies increased by $15.4 million. This shift in categories reflected the lower tax benefit from municipal securities and the reinvestment into monthly cash flowing mortgage backed securities. Net gains of $70,000 were realized during 2018 through sales and call activity. For 2017, there were net gains of $210,000 realized through sales and call activity. The Company actively manages the portfolio to improve its liquidity and maximize the return within the desired risk profile.

 

The Company had cash and cash equivalents of $34.2 million at December 31, 2018 compared with $22.0 at December 31, 2017. Cash and due from banks were $18.3 million at December 31, 2018 and $14.6 million at December 31, 2017. Interest bearing bank balances were $15.9 million at December 31, 2018 compared with $7.3 million at December 31, 2017. There were no federal funds sold at December 31, 2018 or December 31, 2017.

 

The following table shows the composition of the Company's securities portfolio, excluding equity securities, at December 31, 2018, September 30, 2018 and December 31, 2017.

 

SECURITIES PORTFOLIO
(Unaudited)
(Dollars in thousands)		31-Dec-18								30-Sep-18								31-Dec-17
		Amortized Cost				Fair Value				Amortized Cost				Fair Value				Amortized Cost				Fair Value
Securities Available for Sale
U.S. Treasury issue and other U.S. Government agencies		$	29,908			$	29,512			$	26,600			$	26,037			$	27,478			$	27,183
U.S Government sponsored agencies			8,241				8,221				8,378				8,424				9,247				9,278
State, county, and municipal			112,465				112,542				117,557				115,744				124,032				125,760
Corporate and other bonds			10,027				10,034				9,647				9,651				7,323				7,460
Mortgage backed securities - U.S. Government agencies			14,468				14,398				14,420				14,254				18,546				18,515
Mortgage backed securities - U.S. Government sponsored agencies			32,409				32,019				27,255				26,493				16,985				16,638
Total securities available for sale		$	207,518			$	206,726			$	203,857			$	200,603			$	203,611			$	204,834

 

		31-Dec-18								30-Sep-18								31-Dec-17
		Amortized Cost				Fair Value				Amortized Cost				Fair Value				Amortized Cost				Fair Value
Securities Held to Maturity
U.S Government sponsored agencies		$	10,000			$	9,790			$	10,000			$	9,680			$	10,000			$	9,845
State, county, and municipal			32,108				32,463				33,559				33,515				35,678				36,567
Mortgage backed securities - U.S. Government agencies			-				-				-				-				468				476
Total securities held to maturity		$	42,108				42,253			$	43,559			$	43,195			$	46,146			$	46,888

 

Interest bearing deposits at December 31, 2018 were $999.9 million, an increase of $57.2 million from December 31, 2017. Time deposits less than or equal to $250,000 showed the largest dollar volume growth during 2018 with $47.3 million in additional balances and totaling $485.2 million at year-end. Time deposits over $250,000 grew by $18.4 million during 2018 and were $128.9 million at year-end 2018. NOW accounts increased by $8.9 million during 2018 and were $165.9 million at December 31, 2018. Offsetting these deposit balance increases were decreases to several deposit categories. Money market deposit accounts decreased $16.4 million, or 11.5%, from $143.4 million at December 31, 2017 to $126.9 million at December 31, 2018 as some depositors shifted into higher yielding time deposits. Savings accounts, with balances of $92.9 million at December 31, 2018, were $1.1 million lower than the prior year end.

 

In other funding activity, noninterest bearing deposits were $165.1 million at December 31, 2018 and increased by $12.1 million, or 7.9%, during 2018. Federal funds purchased balances were $19.4 million at December 31, 2018 and $4.8 million at December 31, 2017. FHLB advances were $59.4 million at December 31, 2018, compared with $101.4 million at December 31, 2017. This decrease of $42.0 million reflected the increased cost of FHLB advances in 2018, compared with retail certificates of deposits.

 

The following table compares the mix of interest bearing deposits at December 31, 2018, September 30, 2018, June 30, 2018 and December 31, 2017.

 

INTEREST BEARING DEPOSITS
(Unaudited)
(Dollars in thousands)
		31-Dec-18				30-Sep-18				30-Jun-18				31-Dec-17
NOW		$	165,946			$	147,026			$	162,984			$	157,037
MMDA			126,933				128,277				145,071				143,363
Savings			92,910				94,972				94,498				93,980
Time deposits less than or equal to $250,000			485,155				491,044				452,734				437,810
Time deposits over $250,000			128,945				113,715				116,657				110,546
Total interest bearing deposits		$	999,889			$	975,034			$	971,944			$	942,736

 

Shareholders’ equity was $137.5 million at December 31, 2018 compared with $124.0 million at December 31, 2017. This is an increase of $13.5 million, or 10.9%. Shareholder’s equity to assets was 9.9% at December 31, 2018 compared with 9.3% at December 31, 2017.

 

Asset Quality – non-covered assets

 

Nonaccrual loans were $9.5 million at December 31, 2018, increasing a nominal $474,000 during 2018. Net increases occurred in commercial real estate loans (by $625,000), construction and land development loans (by $294,000) and commercial loans (by $335,000). These were offset by net decreases in nonaccrual loans of $705,000 in residential 1 – 4 family, $68,000 in agriculture mortgages and $7,000 in consumer installments.

 

The following chart shows the level of nonaccrual loans, classified loans and criticized loans over the last five quarters.

 

ASSET QUALITY
(Unaudited)
(Dollars in thousands)		2018																2017
		31-Dec-18				30-Sep-18				30-Jun-18				31-Mar-18				31-Dec-17
Nonaccrual loans		$	9,500			$	8,894			$	9,343			$	10,090			$	9,026
Criticized (special mention) loans			9,072				10,338				17,400				19,526				13,573
Classified (substandard) loans			14,915				13,083				15,181				14,243				13,264
Other real estate owned			1,099				1,732				3,147				3,166				2,791
Total classified and criticized assets		$	25,086			$	25,153			$	35,728			$	36,935			$	29,628

 

Nonperforming assets totaled $10.6 million at December 31, 2018 compared with $11.8 million at December 31, 2017. Nonperforming assets declined $1.2 million, or 10.3%, during 2018. At December 31, 2018, nonaccrual loans were $9.5 million and other real estate owned was $1.1 million. There were no loans past due over 90 days and accruing interest at December 31, 2018 or December 31, 2017. There were net recoveries of $15,000 in 2018.

 

The allowance for loan losses equaled 94.6% of nonaccrual loans at December 31, 2018, compared with 99.4% at December 31, 2017. The ratio of nonperforming assets to loans and OREO was 1.07% at December 31, 2018 and 1.25% December 31, 2017.

 

 

The following table reconciles the activity in the Company's allowance for loan losses, excluding PCI loans, by quarter, for the past five quarters.

 

ALLOWANCE FOR LOAN LOSSES
(Unaudited)
(Dollars in thousands)		2018																2017
		Fourth				Third				Second				First				Fourth
		Quarter				Quarter				Quarter				Quarter				Quarter
Allowance for loan losses:
Beginning of period		$	8,993			$	9,089			$	8,968			$	8,969			$	8,667
Provision for loan losses			-				-				-				-				400
Net (charge-offs) recoveries			(10	)			(96	)			121				(1	)			(98	)
End of period		$	8,983			$	8,993			$	9,089			$	8,968			$	8,969

 

The following table sets forth selected asset quality data, excluding PCI loans, and ratios for the dates indicated.

 

ASSET QUALITY (excluding PCI loans)
(Unaudited)
(Dollars in thousands)		2018																2017
		31-Dec-18				30-Sep-18				30-Jun-18				31-Mar-18				31-Dec-17
Nonaccrual loans		$	9,500			$	8,894			$	9,343			$	10,090			$	9,026
Total nonperforming loans			9,500				8,894				9,343				10,090				9,026
Other real estate owned			1,099				1,732				3,147				3,166				2,791
Total nonperforming assets		$	10,599			$	10,626			$	12,490			$	13,256			$	11,817
Allowance for loan losses to loans			0.90	%			0.93	%			0.94	%			0.93	%			0.95	%
Allowance for loan losses to nonaccrual loans			94.57				101.11				97.28				88.88				99.37
Nonperforming assets to loans and other real estate			1.07				1.10				1.29				1.37				1.25
Net charge-offs/(recoveries) for quarter to average loans, annualized			0.00	%			0.04	%			(0.05	)%			-%				0.04	%

 

A further breakout of nonaccrual loans, excluding PCI loans, at December 31, 2018, September 30, 2018 and December 31, 2017 is below.

 

NONACCRUAL LOANS (excluding PCI loans)
(Unaudited)
(Dollars in thousands)		31-Dec-18				30-Sep-18				31-Dec-17
Mortgage loans on real estate:
Residential 1-4 family		$	1,257			$	1,530			$	1,962
Commercial			2,123				2,243				1,498
Construction and land development			4,571				4,610				4,277
Agriculture			-				-				68
Total real estate loans		$	7,951			$	8,383			$	7,805
Commercial loans			1,549				506				1,214
Consumer installment loans			-				5				7
Gross loans		$	9,500			$	8,894			$	9,026

 

Capital Requirements

 

The Bank’s ratio of total risk-based capital was 13.3% at December 31, 2018 compared with 12.5% at December 31, 2017. The tier 1 risk-based capital ratio was 12.6% at December 31, 2018 and 11.7% at December 31, 2017. The Bank’s tier 1 leverage ratio was 10.2% at December 31, 2018 and 9.6% at December 31, 2017.  All capital ratios exceed regulatory minimums to be considered well capitalized. BASEL III introduced the common equity tier 1 capital ratio, which was 12.5% at December 31, 2018 and 11.7% at December 31, 2017.

 

Earnings Conference Call and Webcast

 

The Company will host a conference call for interested parties on Friday, January 25, 2019, at 10:00 a.m. Eastern Time to discuss the financial results for the fourth quarter and year 2018. The public is invited to listen to this conference call by dialing 866-374-8379 at least five minutes prior to the call.  Interested parties may also listen to this conference call through the internet by accessing the "Corporate Overview – Corporate Profile" page of the Company's internet site at www.cbtrustcorp.com.

 

 

A replay of the conference call will be available from 12:00 noon Eastern Time on January 25, 2019, until 9:00 a.m. Eastern Time on February 15, 2019. The replay will be available by dialing 877-344-7529 and entering access code 10127506 or through the internet by accessing the "Corporate Overview – Corporate Profile" page of the Company's internet site www.cbtrustcorp.com.

 

About Community Bankers Trust Corporation and Essex Bank

 

Community Bankers Trust Corporation is the holding company for Essex Bank, a Virginia state bank with 26 full-service offices, 20 of which are in Virginia and six of which are in Maryland.  The Bank also operates one loan production office in Virginia.  The Bank opened a new branch office in Edgewater, Maryland on December 3, 2018. 

 

Additional information on the Bank is available on the Bank’s website at www.essexbank.com. For information on Community Bankers Trust Corporation, please visit its 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, performance, future 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 quality or composition of the Company’s loan or investment portfolios, including collateral values and the repayment abilities of borrowers and issuers; assumptions that underlie the Company’s allowance for loan losses; general economic and market conditions, either nationally or in the Company’s market areas; the interest rate environment; competitive pressures among banks and financial institutions or from companies outside the banking industry; real estate values; the demand for deposit, loan and investment products and other financial services; the demand, development and acceptance of new products and services; the performance of vendors or other parties with which the Company does business; time and costs associated with de novo branching, acquisitions, dispositions and similar transactions; the realization of gains and expense savings from acquisitions, dispositions and similar transactions; consumer profiles and spending and savings habits; levels of fraud in the banking industry; the level of attempted cyber-attacks in the banking industry; the securities and credit markets; costs associated with the integration of banking and other internal operations; 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, 2017 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

Executive Vice President/Chief Financial Officer

Community Bankers Trust Corporation

804-934-9999 

 

 

 

COMMUNITY BANKERS TRUST CORPORATION
CONSOLIDATED BALANCE SHEETS
UNAUDITED
(Dollars in thousands, except per share data)
		31-Dec-18				30-Sep-18				31-Dec-17
Assets
Cash and due from banks		$	18,292			$	12,918			$	14,642
Interest bearing bank deposits			15,927				11,177				7,316
Federal funds sold			-				240				-
Total cash and cash equivalents			34,219				24,335				21,958
Securities available for sale, at fair value			206,726				200,603				204,834
Securities held to maturity, at cost			42,108				43,559				46,146
Equity securities, restricted, at cost			7,800				7,886				9,295
Total securities			256,634				252,048				260,275
Loans held for resale			146				-				-
Loans			993,705				962,425				942,018
Purchased credit impaired (PCI) loans			38,285				39,144				44,333
Allowance for loan losses			(8,983	)			(8,993	)			(8,969	)
Allowance for loan losses – PCI loans			(156	)			(137	)			(200	)
Net loans			1,022,851				992,439				977,182
Bank premises and equipment, net			31,488				31,782				30,198
Bank premises and equipment held for sale			1,252				1,252				-
Other real estate owned			1,099				1,732				2,791
Bank owned life insurance			28,834				28,649				28,099
Other assets			17,351				18,183				15,687
Total assets		$	1,393,874			$	1,350,420			$	1,336,190
Liabilities
Deposits:
Noninterest bearing		$	165,086			$	158,854			$	153,028
Interest bearing			999,889				975,034				942,736
Total deposits			1,164,975				1,133,888				1,095,764
Federal funds purchased			19,440				10,000				4,849
Federal Home Loan Bank advances			59,447				63,820				101,429
Trust preferred capital notes			4,124				4,124				4,124
Other liabilities			8,427				6,785				6,021
Total liabilities			1,256,413				1,218,617				1,212,187
Shareholders' Equity
Common stock (200,000,000 shares authorized $0.01 par value; 22,132,304, 22,120,862, and 22,072,523 shares issued and outstanding, respectively)			221				221				221
Additional paid in capital			148,763				148,494				147,671
Retained deficit			(10,244	)			(13,601	)			(23,932	)
Accumulated other comprehensive (loss) income			(1,279	)			(3,311	)			43
Total shareholders' equity			137,461				131,803				124,003
Total liabilities and shareholders' equity		$	1,393,874			$	1,350,420			$	1,336,190

 

 

COMMUNITY BANKERS TRUST CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(Dollars in thousands)		For the year ended
		2018				2017				2016
Interest and dividend income
Interest and fees on loans		$	46,291			$	40,301			$	35,998
Interest and fees on PCI loans			5,222				5,733				6,230
Interest on federal funds sold			5				1				-
Interest on deposits in other banks			303				196				122
Interest and dividends on securities
Taxable			5,258				4,682				4,696
Nontaxable			2,162				2,402				2,249
Total interest and dividend income			59,241				53,315				49,295
Interest expense
Interest on deposits			10,257				7,897				6,382
Interest on borrowed funds			1,797				1,302				1,438
Total interest expense			12,054				9,199				7,820
Net interest income			47,187				44,116				41,475
Provision for loan losses			-				550				166
Net interest income after provision for loan losses			47,187				43,566				41,309
Noninterest income
Service charges and fees			2,510				2,236				2,005
Gain on securities transactions, net			70				210				634
Gain on sale of loans			118				-				-
Income on bank owned life insurance			735				759				719
Mortgage loan income			319				242				606
Other			711				625				649
Total noninterest income			4,463				4,072				4,613
Noninterest expense
Salaries and employee benefits			21,477				19,423				18,261
Occupancy expenses			3,188				3,130				2,737
Equipment expenses			1,398				1,144				999
FDIC assessment			776				726				823
Data processing fees			2,122				1,923				1,674
Amortization of intangibles			-				898				1,907
Other real estate expenses, net			113				162				175
Other operating expenses			5,803				6,126				5,608
Total noninterest expense			34,877				33,532				32,184
Income before income taxes			16,773				14,106				13,738
Income tax expense			3,085				6,903				3,816
Net income		$	13,688			$	7,203			$	9,922

 

 

 

COMMUNITY BANKERS TRUST CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(Dollars in thousands)		Three months ended
		31-Dec-18				30-Sep-18				30-Jun-18				31-Mar-18				31-Dec-17
Interest and dividend income
Interest and fees on loans		$	12,169			$	11,893			$	11,353			$	10,876			$	10,625
Interest and fees on PCI loans			1,285				1,265				1,274				1,398				1,378
Interest on federal funds sold			4				-				1				-				-
Interest on deposits in other banks			100				94				69				40				53
Interest and dividends on securities
Taxable			1,442				1,364				1,266				1,186				1,105
Nontaxable			508				528				547				579				597
Total interest and dividend income			15,508				15,144				14,510				14,079				13,758
Interest expense
Interest on deposits			3,060				2,699				2,355				2,143				2,121
Interest on borrowed funds			355				465				508				469				388
Total interest expense			3,415				3,164				2,863				2,612				2,509
Net interest income			12,093				11,980				11,647				11,467				11,249
Provision for loan losses			-				-				-				-				400
Net interest income after provision for loan losses			12,093				11,980				11,647				11,467				10,849
Noninterest income
Service charges and fees			692				626				611				581				572
Gain (loss) on securities transactions, net			(12	)			68				(16	)			30				30
Gain on sale of loans			-				65				53				-				-
Income on bank owned life insurance			184				184				184				183				187
Mortgage loan income			31				97				80				111				79
Other			189				171				223				128				177
Total noninterest income			1,084				1,211				1,135				1,033				1,045
Noninterest expense
Salaries and employee benefits			5,580				5,029				5,019				5,849				4,990
Occupancy expenses			827				780				769				812				801
Equipment expenses			374				366				344				314				295
FDIC assessment			177				195				198				206				176
Data processing fees			655				482				499				486				457
Amortization of intangibles			-				-				-				-				20
Other real estate expenses, net			(45	)			63				45				50				64
Other operating expenses			1,465				1,376				1,313				1,649				1,515
Total noninterest expense			9,033				8,291				8,187				9,366				8,318
Income before income taxes			4,144				4,900				4,595				3,134				3,576
Income tax expense			787				945				813				540				4,216
Net income (loss)		$	3,357			$	3,955			$	3,782			$	2,594			$	(640	)

 

 

COMMUNITY BANKERS TRUST CORPORATION
NET INTEREST MARGIN ANALYSIS
AVERAGE BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
		Three months ended December 31, 2018												Three months ended December 31, 2017
		Average Balance Sheet				Interest Income / Expense				Average Rates Earned / Paid				Average Balance Sheet				Interest Income / Expense				Average Rates Earned / Paid
ASSETS:
Loans, including fees		$	975,428			$	12,169				4.95	%		$	911,188			$	10,625				4.63	%
PCI loans,  including fees			38,489				1,285				13.06				44,616				1,378				12.08
Total loans			1,013,917				13,454				5.26				955,804				12,003				4.98
Interest bearing bank balances			16,761				100				2.36				15,681				53				1.35
Federal funds sold			725				4				2.11				85				-				1.24
Securities (taxable)			181,192				1,442				3.18				177,772				1,105				2.49
Securities (tax exempt)(1)			70,907				643				3.63				84,412				904				4.28
Total earning assets			1,283,502				15,643				4.84				1,233,754				14,065				4.52
Allowance for loan losses			(9,126	)											(8,788	)
Non-earning assets			94,478												91,810
Total assets		$	1,368,854											$	1,316,776
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Demand - interest bearing		$	159,645			$	88				0.22			$	150,289			$	72				0.19
Savings and money market			220,391				284				0.51				237,105				306				0.51
Time deposits			619,116				2,688				1.72				557,669				1,743				1.24
Total interest bearing deposits			999,152				3,060				1.22				945,063				2,121				0.89
Short-term borrowings			2,156				15				2.74				3,221				16				1.92
FHLB and other borrowings			64,831				340				2.08				88,258				372				1.68
Total interest bearing liabilities			1,066,139				3,415				1.27				1,036,542				2,509				0.96
Noninterest bearing deposits			161,720												147,968
Other liabilities			6,891												5,737
Total liabilities			1,234,750												1,190,247
Shareholders’ equity			134,104												126,529
Total liabilities and
shareholders’ equity		$	1,368,854											$	1,316,776
Net interest earnings						$	12,228											$	11,556
Interest spread											3.57	%											3.56	%
Net interest margin											3.78	%											3.72	%
Tax-equivalent adjustment:
Securities						$	135											$	307

 

(1)

Income and yields are reported on a tax-equivalent basis assuming a federal tax rate of 21% for 2018 and 34% for 2017.

                                                 

 

COMMUNITY BANKERS TRUST CORPORATION
NET INTEREST MARGIN ANALYSIS
AVERAGE BALANCE SHEETS
(Unaudited)
(Dollars in thousands)
		Year ended December 31, 2018												Year ended December 31, 2017
		Average Balance Sheet				Interest Income / Expense				Average Rates Earned / Paid				Average Balance Sheet				Interest Income / Expense				Average Rates Earned / Paid
ASSETS:
Loans, including fees		$	960,978			$	46,291				4.82	%		$	870,258			$	40,301				4.63	%
PCI loans, including fees			40,641				5,222				12.85				47,983				5,733				11.95
Total loans			1,001,619				51,513				5.14				918,241				46,034				5.01
Interest bearing bank balances			13,995				303				2.16				15,618				196				1.26
Federal funds sold			242				5				2.03				94				1				1.11
Securities (taxable)			178,086				5,258				2.95				181,476				4,682				2.58
Securities (tax exempt)(1)			75,741				2,737				3.61				85,305				3,639				4.27
Total earning assets			1,269,683				59,816				4.71				1,200,734				54,552				4.54
Allowance for loan losses			(9,198	)											(9,431	)
Non-earning assets			92,621												89,904
Total assets		$	1,353,106											$	1,281,207
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Demand - interest bearing		$	156,541			$	325				0.21			$	139,620			$	260				0.19
Savings and money market			230,637				1,187				0.51				216,149				880				0.41
Time deposits			581,619				8,745				1.50				574,630				6,757				1.18
Total interest bearing deposits			968,797				10,257				1.06				930,399				7,897				0.85
Short-term borrowings			2,856				65				2.28				1,556				25				1.58
FHLB and other borrowings			90,966				1,732				1.90				85,127				1,277				1.50
Total interest bearing liabilities			1,062,619				12,054				1.13				1,017,082				9,199				0.90
Noninterest bearing deposits			155,003												136,674
Other liabilities			6,219												5,550
Total liabilities			1,223,841												1,159,306
Shareholders’ equity			129,265												121,901
Total liabilities and shareholders'
equity		$	1,353,106											$	1,281,207
Net interest earnings						$	47,762											$	45,353
Interest spread											3.58	%											3.64	%
Net interest margin											3.76	%											3.78	%
Tax-equivalent adjustment:
Securities						$	576											$	1,237

 

(1)

Income and yields are reported on a tax-equivalent basis assuming a federal tax rate of 34%.