Q3 2021 Community Bankers Trust Corp Earnings Call

<unk> and goals I'll remind everyone that our actual results may differ materially from those included in the forward looking statements due to a number of factors. These factors and additional risks and uncertainties are included in our earnings release and most recent Form 10-K, and other reports that community bankers.

Trust Corporation files with or furnishes to the Securities and Exchange Commission.

You can access all these documents through our website at www Dot CB Trustcorp dotcom.

This should be our final earnings call for the Corporation as we expect to be merged into United Bank subject to appropriate approvals and the satisfaction of other closing conditions before the end of the fourth quarter of 2021.

We remain extremely excited about the merger and look forward to what the additional resources and products and services will give us in terms of market share growth and value added to our customers in the meantime, we continue to improve the quality of our balance sheet and the overall financial metrics of the company.

At this point I will turn the call over to Bruce to cover some of the highlights for the quarter.

Thank you Rex and thank you to all of you that have listened to these conference calls over the years. The results I will be presenting to you today are in my opinion, the best we have issued over the years.

Net income was $6 $5 million for the quarter ended September 32021, 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.

On a linked quarter basis earnings were positively affected by the following.

Provision for loan losses reflected a credit of $1 million to $5 million for the third quarter of 2021 compared with no provision in the second quarter of 2021 continued improvement in credit quality was a driver behind the recapture in the third quarter of previous provision.

<unk> for loan losses.

Net interest income increased by $298000 or two 1% in the third quarter compared with the second quarter of 2021.

Net interest income was positively affected by a continuation of decreasing costs and interest expense, which declined $81000 on a linked quarter basis.

We continue to see stability in the tax equivalent net interest margin, which was 352% in the third quarter of 2021, compared with $3 five 8% in the second quarter of 2021 the.

The company also examine the net interest margin without the effects of P. P. P net fees interest income and average balances.

Excluding these PPP related items from the net interest margin calculation.

Would have resulted in a margin of 339% in the third quarter of 2021 compared with the actual margin of 352%.

The same exclusion of PPP related items would have resulted in a margin of 354% in the second quarter of 2021 compared with the actual margin of 358%.

The nine month comparison period between 2021, and 2020 earnings were positively affected by the following.

Provision for loan losses reflected a reserve recovery of $2 $65 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 $959000.

The net interest margin increased from 348% for the first nine months of 2020 to three 5% to 8% for the same period in 2021.

The interest spread also increased over this timeframe from 3.21% in 2020% to 344% in 2021, excluding PPP related items from the net interest margin calculation would have resulted in a margin of 350% for the first nine.

Months of 2021, compared with the actual margin of 358%.

Excluding PPP related items from the net interest margin calculation for the first nine months of 2020 would have resulted in a margin of 349% for the first nine months of 2020 compared with the actual margin of 348% therefore margin increased by one basis.

Year over year, when excluding the effects of PPP. Many banks will not report similar results with regard to the margin.

Also of note at September 30th 2021 loans, excluding purchased credit impaired loans grew $39 1 million or three 3% during the third quarter of 2021 loans grew $53 $3 million or four 5% year.

A year.

Nonperforming assets were $4 million at September 32021, $4 $6 million lower than one year earlier and.

The ratio of nonperforming assets to loans and other real estate was 0.33% at September 32021, compared with 0.73% one year earlier.

Deposits grew $10 million or seven tenths of 1% during the third quarter of 2021 and grew $129 $5 million or nine 5% year over year.

Noninterest bearing deposits grew $64 million or 22, 7% year over year.

Total securities $402 9 million at September 32021 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.

These results are the culmination of years of asset liability management planning and execution.

Strong credit and risk management practices and great guidance from our board of directors I'm very happy that we saved our best for last so to speak and I'm happy to turn the call back over to Rex for closing comments.

Thank you Bruce.

As we close out what we expect to be our last quarter as Essex Bank I am overcome with many memories.

A few especially early on were not so good but overall it has been an extremely positive experience.

Want to thank the management team and the board of directors for their commitment knowledge and guidance through the years. It has been a great pleasure to work with them for the past 12 years.

When we changed the management team to its current structure. The bank was trading at less than $1 per share and had so many problems theres not enough time today to begin to cover them.

Since that time, we have built an incredibly strong franchise with very solid and steady returns for our shareholders.

That was only accomplished because of the hard work experience and dedication throughout the entire company.

As we move closer to our merger with United Bank, We continue to enhance value through our guiding principles of honesty responsiveness Trust respect and diversity.

All of our associates have worked hard to provide safe and secure banking and financial support for all of our customers and I know they will continue to do so until the effective date of the merger and beyond.

That hard work has produced the best balance sheet in the history of the company, which is also producing superior returns.

We are very pleased by the core results for the quarter and very optimistic for the future as we become a part of one of the largest and most successful banks headquartered in Virginia.

We hope that you our shareholders are also pleased with our direction and we thank each of you for your ongoing support of the company.

I will now open the call for any questions.

Yeah.

Well now begin the question and answer session Basketball question You May Press Star then one on your Touchtone phone.

Using a speakerphone please pick up your handset before pressing the keys.

Your question. Please press Star then two.

At this time, we'll pause momentarily to assemble the roster.

There's no questions at this time well go back to Mr. Rex Smith for closing remarks.

Okay I'd like to thank everybody for their ongoing support it has been a real pleasure and Bruce and I will be available all day, if anybody has any follow up questions.

Yeah.

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

Okay.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.

Yeah.