Community Bankers Trust Corporation (the “Company”) (NYSE Amex: BTC), the holding company for Essex Bank (the “Bank”), reported its results for the second quarter of 2009, which included adjustments to the tax provisions that the Company had preliminarily reported in a July 29, 2009 press release and corresponding adjustments to earnings and other items affected by the Company’s tax provisions.
In preparing final financial statements for the second quarter, the Company re-evaluated the calculation of its tax provision. Based upon this evaluation, management determined that the tax impact of the goodwill impairment charge, as preliminarily reported, had been incorrectly stated. The Company had inadvertently treated the goodwill impairment charge as a tax deductible item and reduced income tax expense accordingly. However, since the transactions that generated the original goodwill in May 2008 were considered tax-free exchanges, the impairment charge is not deductible for tax purposes.
Following these adjustments, the Company reported a net loss available to common stockholders for the second quarter of 2009 of $24.4 million, or $1.14 per basic and diluted share. This loss was primarily the result of a non-cash goodwill impairment charge of $24.0 million and an FDIC special assessment of $583,000. The second quarter results also reflected $265,000 of dividends and accretion costs associated with the Company’s TARP investment. Excluding the goodwill impairment charge, the FDIC special assessment, and the costs associated with TARP, the Company would have had net operating income of $56,000, or $0.00 per basic and diluted share, for the second quarter.
The adjustments described above caused the income tax provisions to change from an $8.2 million benefit to a $410,000 benefit for the second quarter and from a $2.9 million benefit to a $4.9 million expense for the six months ended June 30, 2009. Thus, the net loss available to common stockholders for the three month period ended June 30, 2009 was adjusted from $16.6 million, as preliminarily reported, to $24.4 million. For the six month period ended June 30, 2009, the loss available to common stockholders was adjusted from $5.9 million to $13.7 million. Accordingly, loss per share, basic and diluted, were $1.14 and $0.64 for the three month and six month periods ended June 30, 2009, respectively. In addition, common tangible book value was $4.65 per share at June 30, 2009, and the Company’s price to common book value and price to common tangible book value were 60.6% and 79.6%, respectively, based on the quarter end closing stock price of $3.70. The Company’s equity to asset ratio was 11.6%.
Complete results for the Company for the second quarter of 2009 and the first six months of 2009 are set forth below.
As noted above, the largest component of the Company’s net loss available to common stockholders was the non-cash goodwill impairment charge. The Company is required to assess the value of its goodwill for impairment periodically, which assessment was performed during the second quarter of 2009, one year following the consummation of the Company’s mergers on May 31, 2008 with TransCommunity Financial Corporation and BOE Financial Services of Virginia, Inc. The assessment resulted in a goodwill impairment that reflected the decline in overall general economic conditions, rapid change in the market valuations of financial institutions and the discount that shares of the Company’s common stock have traded to their tangible book value for an extended period of time. The Company’s average closing stock price during the second quarter of 2008 versus 2009 was $6.64 per share and $3.67 per share, respectively, which represented a 44.73% decline. On the last business day prior to May 31, 2009, the closing stock price was $3.10 per share. The impairment charge did not have a material impact on the Company’s liquidity or strong reserves.
Based on these results, the Company reported a net loss available to common stockholders of $13.7 million for the six months ended June 30, 2009, or $0.64 per basic and diluted share. Excluding the goodwill impairment charge, the FDIC special assessment, the costs associated with TARP, and the $21.3 million gain that the Company recorded in the first quarter with respect to its acquisition of the operations of Suburban Federal Savings Bank (“SFSB”) from the FDIC, the Company’s net operating loss would have equaled $3.3 million, or $0.15 per basic and diluted share, for the six month period. This loss was attributable to the Company’s increasing its provision for loan losses to $6.0 million for the period. The allowance for loan losses to total loans, excluding FDIC-covered assets (which are described below), is 2.21% and reflects prudent recognition of general economic conditions.
The following table provides a reconcilement of the Company’s operating results to present the items and assessments described above:
(dollars in 000's, except per share data) | Three months ended | Six months ended | |||||||||
June 30, 2009 | June 30, 2009 | ||||||||||
Operating loss prior to income taxes, as reported | $ | (24,529 | ) | $ | (8,313 | ) | |||||
add: | |||||||||||
Goodwill impairment charge | 24,032 | 24,032 | |||||||||
FDIC special assessment | 583 | 583 | |||||||||
subtract: | |||||||||||
(Gain) on SFSB transaction | - | (21,260 | ) | ||||||||
Operating income (loss), as adjusted | 86 | (4,958 | ) | ||||||||
Income tax expense (benefit) | 30 | (1,686 | ) | ||||||||
Operating income (loss), as adjusted, net of taxes | $ | 56 | $ | (3,272 | ) | ||||||
Operating income (loss), as adjusted, per basic and diluted share | $ | 0.00 | $ | (0.15 | ) |
Balance Sheet
Total assets aggregated $1.28 billion at June 30, 2009. Total assets declined $63.2 million or 4.69% from March 31, 2009. This decline was directly attributable to management’s planned reduction in interest bearing bank balances of $15.4 million, a reduction in securities of $23.1 million and the non-cash goodwill impairment charge of $24.0 million. Loans not covered by the FDIC shared-loss agreements increased $9.6 million or 1.77% from $542.2 million at March 31, 2009 to $551.8 million at June 30, 2009. Despite the reduction in time deposits noted below, the Company remains highly liquid with a structured securities portfolio, as well as a net seller of overnight funds. The Company had federal funds sold of $25.8 million at June 30, 2009. Management anticipates funding future loan growth by divesting FDIC-covered assets and by reducing its position in overnight funds sales. The Company’s loan and FDIC-covered loan to deposit ratio equaled 75.7% at June 30, 2009. Excluding FDIC-covered loans, the loan-to-deposit ratio equaled 51.7% at quarter-end.
Loans
The Company’s loan portfolio, excluding FDIC covered assets, at June 30, 2009 and December 31, 2008, was comprised of the following:
June 30, 2009 | December 31, 2008 | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||
Mortgage loans on real estate | ||||||||||||||||||
Residential 1-4 family | $ | 135,701 | 24.56 | % | $ | 129,607 | 24.73 | % | ||||||||||
Commercial | 179,079 | 32.41 | % | 158,062 | 30.16 | % | ||||||||||||
Construction | 137,951 | 24.97 | % | 139,515 | 26.62 | % | ||||||||||||
Second mortgages | 14,356 | 2.60 | % | 15,599 | 2.98 | % | ||||||||||||
Multifamily | 9,152 | 1.66 | % | 9,370 | 1.79 | % | ||||||||||||
Agriculture | 4,859 | 0.88 | % | 5,143 | 0.98 | % | ||||||||||||
Total real estate loans | 481,098 | 87.08 | % | 457,296 | 87.26 | % | ||||||||||||
Commercial loans | 45,685 | 8.27 | % | 45,320 | 8.65 | % | ||||||||||||
Consumer installment loans | ||||||||||||||||||
Personal | 13,490 | 2.44 | % | 14,457 | 2.76 | % | ||||||||||||
All other loans | 12,228 | 2.21 | % | 7,005 | 1.33 | % | ||||||||||||
Gross loans | 552,501 | 100.00 | % | 524,078 | 100.00 | % | ||||||||||||
Less unearned income on loans | (702 | ) | (780 | ) | ||||||||||||||
Loans, net of unearned income | $ | 551,799 | $ | 523,298 |
On January 30, 2009, the Bank acquired certain assets and assumed all deposit liabilities relating to seven former branch offices of SFSB. The Bank purchased approximately $348 million in loans and other assets and is currently providing loan servicing to its existing loan customers. The Bank has entered into shared-loss agreements with the FDIC with respect to certain covered assets acquired.
The following is a summary of information for impaired and nonaccrual loans as of June 30, 2009, excluding FDIC covered assets (dollars in thousands):
Amount | |||||
Impaired loans without a valuation allowance | $ | 65,686 | |||
Impaired loans with a valuation allowance | 24,681 | ||||
Total impaired loans | $ | 90,367 | |||
Valuation allowance related to impaired loans | $ | 6,729 | |||
Total nonaccrual loans | $ | 24,482 | |||
Total loans 90 days or more past due and still accruing | $ | 514 | |||
Average investment in impaired loans during the six months ending June 30, 2009 | $ | 92,128 | |||
Interest income recognized on impaired loans | $ | 773 | |||
Interest income recognized on a cash basis on impaired loans | $ | 773 |
Securities
Amortized costs and fair values of securities available for sale at June 30, 2009 were as follows:
(dollars in thousands) | Amortized | Gross Unrealized | |||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
U.S. Treasury issues and other | |||||||||||||||||
U.S. Government agencies | $ | 15,025 | $ | 372 | $ | (13 | ) | $ | 15,384 | ||||||||
State, county and municipal | 78,162 | 886 | (697 | ) | 78,351 | ||||||||||||
Corporates and other bonds | 6,663 | 86 | (1 | ) | 6,748 | ||||||||||||
Mortgage backed securities | 75,711 | 1,502 | (156 | ) | 77,057 | ||||||||||||
Other securities | 1,278 | 157 | (52 | ) | 1,383 | ||||||||||||
Total securities available for sale | $ | 176,839 | $ | 3,003 | $ | (919 | ) | $ | 178,923 |
As of June 30, 2009, there were $2.3 million of securities available for sale that were in a continuous loss position for more than twelve months. These securities, primarily municipal obligations, had an unrealized loss position of $118,000 at June 30, 2009. Management has evaluated the investment portfolio by security and determined the declines in fair value were primarily attributable to changes in credit and market spreads, not in estimated cash flows or credit quality.
Amortized costs and fair values of securities held to maturity at June 30, 2009 were as follows:
(dollars in thousands) | Amortized | Gross Unrealized | |||||||||||||||
Cost | Gains | Losses | Fair Value | ||||||||||||||
U.S. Treasury issues and other | |||||||||||||||||
U.S. Government agencies | $ | 748 | $ | - | $ | (15 | ) | $ | 733 | ||||||||
State, county and municipal | 13,111 | 336 | (32 | ) | 13,415 | ||||||||||||
Corporates and other bonds | 1,035 | 9 | - | 1,044 | |||||||||||||
Mortgage backed securities | 115,219 | 1,750 | (409 | ) | 116,560 | ||||||||||||
Total securities held to maturity | $ | 130,113 | $ | 2,095 | $ | (456 | ) | $ | 131,752 |
No held to maturity securities had been in a loss position for twelve months or more at June 30, 2009.
Deposits
Total deposits equaled $1.07 billion at June 30, 2009 versus $1.11 billion at March 31, 2009. Higher cost time deposits decreased during the quarter while lower cost savings and transactional deposit accounts increased $4.7 million during the second quarter. Savings deposits equaled $58.4 million at June 30, 2009 compared to $55.8 million at March 31, 2009, an increase of 4.66%. NOW and Money Market Deposit accounts totaled $205.4 million at June 30, 2009 compared to $203.3 million at March 31, 2009.
The following table breaks down interest bearing deposit totals by category at June 30, 2009, March 31, 2009 and December 31, 2008:
(dollars in thousands) | |||||||||||
June 30, 2009 | March 31, 2009 | December 31, 2008 | |||||||||
NOW | $ | 90,380 | $ | 83,518 | $ | 76,575 | |||||
MMDA | 115,048 | 119,793 | 55,200 | ||||||||
Savings | 58,380 | 55,782 | 34,688 | ||||||||
Time deposits less | 453,953 | 463,459 | 303,424 | ||||||||
Time deposits greater | 289,737 | 322,099 | 276,762 | ||||||||
Total interest-bearing | $ | 1,007,498 | $ | 1,044,651 | $ | 746,649 |
Capital
At June 30, 2009, the Company’s ratio of total capital to risk-weighted assets was 17.61%. The ratio of Tier 1 Capital to risk-weighted assets was 16.48%, and the leverage ratio (Tier 1 capital to average adjusted total assets) was 9.08%. All three ratios exceed capital adequacy guidelines outlined by its regulator, and the Company is considered “well-capitalized”. The Company has trust preferred subordinated debt that qualifies as regulatory capital. This trust preferred debt has a 30-year maturity with a 5-year call option, was issued at a rate of three month LIBOR plus 3.00%, and was priced at 4.22% in the second quarter of 2009.
Results of Operations
For the three months ended June 30, 2009, the Company recognized a provision for loan losses of $540,000 versus $5.5 million for the first quarter of 2009. The year-to-date provision for loan losses was $6.0 million, which increased the loan loss reserve to $12.2 million or 2.21% of non-FDIC covered loans. Net charge-offs of loans equaled $346,000 for the three months ended June 30, 2009 and $794,000 for the first six months of 2009.
The following table provides asset quality ratios, excluding FDIC-covered assets, at June 30, 2009 and March 31, 2009:
Dollars in 000's | June 30, 2009 | March 31, 2009 | ||||||
Nonaccrual loans | $ | 24,482 | $ | 8,009 | ||||
Loans past due over 90 days | 514 | 1,195 | ||||||
Other real estate owned | 864 | 412 | ||||||
Total nonperforming assets | $ | 25,860 | $ | 9,616 | ||||
Balances | ||||||||
Allowance for loan losses | $ | 12,185 | $ | 11,543 | ||||
Average loans during quarter, net of unearned income | $ | 548,577 | $ | 534,566 | ||||
Loans, net of unearned income | $ | 551,799 | $ | 542,190 | ||||
Ratios | ||||||||
Allowance for loan losses to total loans | 2.21% | 2.13% | ||||||
Allowance for loan losses to nonperforming assets | 47.12% | 120.04% | ||||||
Nonperforming assets to loans and other real estate | 4.68% | 1.77% | ||||||
Net charge-offs for the quarter to average loans, annualized | 0.25% | 0.34% |
Management proactively identified impaired loans during the first quarter of the year and had significantly increased the Company’s loan loss provision commensurate with the risks inherent in the portfolio. Although, loans migrated to non-accrual status during the second quarter, the majority of which was comprised of two credits, the Company had sufficiently reserved for them with its prior provisions.
Covered Assets
On January 30, 2009, the Bank entered into a purchase and assumption agreement with the FDIC, as receiver, for SFSB. The Bank assumed all deposit liabilities and purchased certain assets of SFSB. In connection with the SFSB transaction, the Bank entered into two shared-loss agreements with the FDIC with respect to the loan and foreclosed real estate assets purchased. One agreement relates to losses arising from single family one-to-four residential mortgage loans, and one agreement relates to losses arising from other loans and foreclosed real estate.
Under the shared-loss agreements, the FDIC will reimburse the Bank for 80% of losses arising from covered loan assets, on the first $118 million of such covered loans, and for 95% of losses on covered loans thereafter. The shared-loss agreements provide for indemnification from the first dollar of losses without any threshold requirement. The reimbursable losses from the FDIC are based on the book value of the relevant loan as determined by the FDIC at the date of the transaction, January 30, 2009. New loans made after that date are not covered by the shared-loss agreements.
At June 30, 2009, FDIC-covered assets totaled $278.4 million. Of this amount, $191.8 million are performing loans, $64.4 million are non-accrual loans, $21.5 million are other real estate owned, and $714,000 are loans 90 days past due and still accruing. All of these loan relationships are under the shared-loss agreements, which limit the potential loss to the Company in the event that these loans should default. The Company’s special assets department is aggressively working towards the appropriate resolution of these credits.
Following an independent loan review encompassing 100% of the acquired loan portfolio, management recognized, in the first quarter of 2009, all anticipated losses and the FDIC-guaranteed portion on such losses as reflected in the mark to market value recorded on the Company’s financial statements for that period. Furthermore, the Company offset against the $45 million negative bid it was awarded from the FDIC in the transaction, a net discount of $23.8 million, reflecting its portion of the anticipated losses, leaving a net fair market value of the FDIC-covered assets of $296.3 million.
Allowance for Loan Losses
Activity in the allowance for loan losses, for the six months ended June 30, 2009 and 2008, was comprised of the following:
(dollars in thousands) | June 30, 2009 | June 30, 2008 | ||||||||
Beginning balance | $ | 6,939 | $ | 4,993 | ||||||
Provision for loan losses | 6,040 | 234 | ||||||||
Recoveries of loans charged off | 82 | 25 | ||||||||
Loans charged off | (876 | ) | (70 | ) | ||||||
Balance at end of period | $ | 12,185 | $ | 5,182 |
Net interest earnings totaled $9.5 million and $18.5 million for the three and six month periods ended June 30, 2009, respectively. The increase in the amount of non-accrual loans noted during the second quarter of the year slightly hampered the net interest margin. The net interest margin for the three months ended June 30, 2009 equaled 3.30%, a decrease from 3.37% for the three months ended March 31, 2009. Despite the increase in non-accrual loans, margin compression was mitigated somewhat as management lowered rates on virtually all deposit accounts. The Company, by virtue of aggressively lowering the rates paid on certificates of deposits and not renewing certain brokered funds, lowered balances in this high cost category by $41.9 million during the second quarter of 2009. Average cost of deposits was 2.51% during the quarter.
Non-interest income was $1.3 million and $23.4 million for the three and six month periods ended June 30, 2009, respectively. Excluding the gain recorded on the SFSB transaction in the first quarter, non-interest income would have equaled $2.2 million for the six-month period. The single largest component of non-interest income was service charges on deposit accounts, which totaled $618,000 and $1.2 million for the three and six month periods ended June 30, 2009, respectively. During the second quarter of 2009, non-interest income was favorably affected by securities gains of $341,000.
For the three months ended June 30, 2009, non-interest expense was $34.8 million. Excluding the goodwill impairment charge and the FDIC special assessment, non-interest expense would have totaled $10.2 million for the three months ended June 30, 2009. Salaries and wages equaled $5.0 million for the quarter, which would have been 49.37% of non-interest expenses, as so adjusted. On a linked quarter basis, salaries and wages increased $602,000, which was the result of increased management staffing in the first quarter and one full quarter of operations in Maryland.
Non-interest expense was $44.2 million for the six months ended June 30, 2009. Excluding the non-cash goodwill impairment charge and the FDIC special assessment, non-interest expenses would have totaled $19.6 million. Salaries and wages equaled $9.5 million, or 48.30% of non-interest expenses, as so adjusted, for the first six months of 2009.
Management anticipates ongoing operating efficiencies throughout the remainder of 2009 as SFSB’s operating systems will be converted in early August.
The following table provides a reconcilement of non-interest expenses, as discussed above:
[dollars in 000's] | Three months ended | Six months ended | ||||||||
June 30, 2009 | June 30, 2009 | |||||||||
Non-interest expense | $ | 34,800 | $ | 44,188 | ||||||
less: | ||||||||||
Goodwill impairment charge | 24,032 | 24,032 | ||||||||
FDIC special assessment | 583 | 583 | ||||||||
Adjusted non-interest expense | $ | 10,185 | $ | 19,573 |
About Community Bankers Trust Corporation
The Company is the holding company for Essex Bank, a Virginia state bank with 25 full-service offices, 14 of which are in Virginia, seven of which are in Maryland and four of which are in Georgia. Additional information is available on the Company’s 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, growth 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: general economic and market conditions, either nationally or locally; the interest rate environment; competitive pressures among banks and financial institutions or from companies outside the banking industry; real estate values; the quality or composition of the Company’s loan or investment portfolios; the demand for deposit, loan, and investment products and other financial services; the demand, development and acceptance of new products and services; the timing of future reimbursements from the FDIC to the Company under the shared-loss agreements; consumer profiles and spending and savings habits; the securities and credit markets; costs associated with the integration of banking and other internal operations, including the integration of SFSB's operations in the third quarter of 2009; management's evaluation of goodwill and other assets on a periodic basis, and any resulting impairment charges, under applicable accounting standards; the soundness of other financial institutions with which the Company does business; inflation; technology; and legislative and regulatory requirements. 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, 2008 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.
COMMUNITY BANKERS TRUST CORPORATION | ||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION | ||||||||||||
AT JUNE 30, 2009, MARCH 31, 2009 AND DECEMBER 31, 2008 | ||||||||||||
(dollars in thousands) | ||||||||||||
June 30, 2009 | March 31, 2009 | December 31, 2008 | ||||||||||
Unaudited | Unaudited | Audited | ||||||||||
Assets | (Restated) | (Restated) | ||||||||||
Cash and due from banks | $ | 20,110 | $ | 20,863 | $ | 10,864 | ||||||
Interest bearing bank deposits | 14,158 | 29,571 | 107,376 | |||||||||
Federal funds sold | 25,830 | 34,467 | 10,193 | |||||||||
Total cash and cash equivalents | 60,098 | 84,901 | 128,433 | |||||||||
Securities available for sale, at fair value | 178,923 | 190,513 | 193,992 | |||||||||
Securities held to maturity | 130,113 | 143,464 | 94,865 | |||||||||
Equity securities, restricted, at cost | 6,838 | 5,016 | 3,612 | |||||||||
Total securities | 315,874 | 338,993 | 292,469 | |||||||||
Loans held for resale | 668 | 386 | 200 | |||||||||
Loans | 551,799 | 542,190 | 523,298 | |||||||||
Allowance for loan losses | (12,185) | (11,543) | (6,939) | |||||||||
Net loans | 539,614 | 530,647 | 516,359 | |||||||||
FDIC - covered assets | 278,436 | 290,099 | - | |||||||||
Bank premises and equipment | 37,484 | 31,854 | 24,111 | |||||||||
Other real estate owned | 864 | 412 | 223 | |||||||||
Bank owned life insurance | 6,415 | 6,349 | 6,300 | |||||||||
Core deposit intangibles, net | 18,211 | 18,865 | 17,163 | |||||||||
Goodwill | 13,152 | 37,184 | 37,184 | |||||||||
Other assets | 13,022 | 7,352 | 7,325 | |||||||||
Total assets | $ | 1,283,838 | $ | 1,347,042 | $ | 1,029,767 | ||||||
Liabilities | ||||||||||||
Deposits: | ||||||||||||
Demand: | ||||||||||||
Noninterest bearing | $ | 59,949 | $ | 60,706 | $ | 59,699 | ||||||
Interest bearing | 1,007,498 | 1,044,651 | 746,649 | |||||||||
Total deposits | 1,067,447 | 1,105,357 | 806,348 | |||||||||
Federal Home Loan Bank advances | 37,000 | 37,900 | 37,900 | |||||||||
Trust preferred capital notes | 4,124 | 4,124 | 4,124 | |||||||||
Other liabilities | 26,379 | 24,861 | 16,992 | |||||||||
Total liabilities | $ | 1,134,950 | $ | 1,172,242 | $ | 865,364 | ||||||
Stockholders' Equity | ||||||||||||
Preferred stock (5,000,000 shares authorized, | ||||||||||||
$0.01 par value) 17,680 shares issued and | ||||||||||||
outstanding | 17,680 | 17,680 | 17,680 | |||||||||
Discount on preferred stock | (943) | (988) | (1,031) | |||||||||
Warrants on preferred stock | 1,037 | 1,037 | 1,037 | |||||||||
Common stock (50,000,000 shares authorized, | ||||||||||||
$0.01 par value) 21,468,455 shares issued and | ||||||||||||
outstanding | 215 | 215 | 215 | |||||||||
Retired warrants on common stock | - | - | ||||||||||
Additional paid in capital | 144,506 | 144,572 | 146,076 | |||||||||
Retained earnings | (13,677) | 11,622 | 1,691 | |||||||||
Accumulated other comprehensive income (loss) | 70 | 662 | (1,265) | |||||||||
Total stockholders' equity | $ | 148,888 | $ | 174,800 | $ | 164,403 | ||||||
Total liabilities and stockholders' equity | $ | 1,283,838 | $ | 1,347,042 | $ | 1,029,767 |
COMMUNITY BANKERS TRUST CORPORATION | ||||||||
UNAUDITED CONSOLIDATED INCOME STATEMENTS | ||||||||
FOR THE SIX MONTHS ENDED JUNE 30, 2009 and 2008 | ||||||||
(dollars and shares in thousands, except per share data) | ||||||||
June 30, 2009 | June 30, 2008 | |||||||
Interest and dividend income | Unaudited | Unaudited | ||||||
Interest and fees on loans | $ | 18,047 | $ | 2,704 | ||||
Interest and fees on FDIC covered loans | 6,286 | - | ||||||
Interest on federal funds sold | 26 | 46 | ||||||
Interest on deposits in other banks | 202 | - | ||||||
Interest and dividends on securities: | ||||||||
Taxable | 5,499 | 687 | ||||||
Nontaxable | 1,577 | 110 | ||||||
Total interest income | 31,637 | 3,547 | ||||||
Interest expense | ||||||||
Interest on deposits | 12,417 | 1,027 | ||||||
Interest on federal funds purchased | - | 13 | ||||||
Interest on other borrowed funds | 737 | 80 | ||||||
Total interest expense | 13,154 | 1,120 | ||||||
Net interest income | 18,483 | 2,427 | ||||||
Provision for loan losses | 6,040 | 234 | ||||||
Net interest income after provision for loan losses | 12,443 | 2,193 | ||||||
Noninterest income | ||||||||
Service charges on deposit accounts | 1,189 | 180 | ||||||
Gain on Suburban transaction | 21,260 | - | ||||||
Gain on securities transactions, net | 293 | - | ||||||
Gain on sale of other real estate | 21 | - | ||||||
Other | 669 | 119 | ||||||
Total noninterest income | 23,432 | 299 | ||||||
Noninterest expense | ||||||||
Salaries and employee benefits | 9,454 | 574 | ||||||
Occupancy expenses | 1,134 | 112 | ||||||
Equipment expenses | 762 | 108 | ||||||
Legal fees | 555 | 99 | ||||||
Professional fees | 1,156 | 100 | ||||||
FDIC assessment | 874 | 16 | ||||||
Data processing fees | 1,474 | 104 | ||||||
Amortization of intangibles | 1,110 | 149 | ||||||
Impairment of goodwill | 24,032 | - | ||||||
Other operating expenses | 3,637 | 673 | ||||||
Total noninterest expense | 44,188 | 1,935 | ||||||
(Loss) income before income taxes | (8,313) | 557 | ||||||
Income tax expense | 4,872 | 158 | ||||||
Net (loss) income | $ | (13,185) | $ | 399 | ||||
Dividends accrued on preferred stock | 438 | - | ||||||
Accretion of discount on preferred stock | 88 | - | ||||||
Net (loss) income available to common stockholders | $ | (13,711) | $ | 399 | ||||
Net (loss) income per share - basic | $ | (0.64) | $ | 0.04 | ||||
Net (loss) income per share - diluted | $ | (0.64) | $ | 0.03 |
COMMUNITY BANKERS TRUST CORPORATION | |||||||
UNAUDITED CONSOLIDATED INCOME STATEMENTS | |||||||
FOR THE THREE MONTHS ENDED JUNE 30, 2009 and 2008 | |||||||
(dollars and shares in thousands, except per share data) | |||||||
June 30, 2009 | June 30, 2008 | ||||||
Interest and dividend income | Unaudited | Unaudited | |||||
Interest and fees on loans | $ | 9,631 | $ | 2,704 | |||
Interest and fees on FDIC covered loans | 3,016 | - | |||||
Interest on federal funds sold | 12 | 46 | |||||
Interest on deposits in other banks | 81 | - | |||||
Interest and dividends on securities | |||||||
Taxable | 2,607 | 282 | |||||
Nontaxable | 820 | 110 | |||||
Total interest income | 16,167 | 3,142 | |||||
Interest expense | |||||||
Interest on deposits | 6,299 | 1,027 | |||||
Interest on federal funds purchased | - | 13 | |||||
Interest on other borrowed funds | 390 | 80 | |||||
Total interest expense | 6,689 | 1,120 | |||||
Net interest income | 9,478 | 2,022 | |||||
Provision for loan losses | 540 | 234 | |||||
Net interest income after provision for loan losses | 8,938 | 1,788 | |||||
Noninterest income | |||||||
Service charges on deposit accounts | 618 | 180 | |||||
Gain on Suburban transaction | - | - | |||||
Gain on securities transactions, net | 341 | - | |||||
Gain on sale of other real estate | - | - | |||||
Other | 374 | 119 | |||||
Total noninterest income | 1,333 | 299 | |||||
Noninterest expense | |||||||
Salaries and employee benefits | 5,028 | 574 | |||||
Occupancy expenses | 554 | 112 | |||||
Equipment expenses | 419 | 108 | |||||
Legal fees | 305 | 46 | |||||
Professional fees | 456 | 24 | |||||
FDIC assessment | 744 | 16 | |||||
Data processing fees | 732 | 104 | |||||
Amortization of intangibles | 654 | 149 | |||||
Impairment of goodwill | 24,032 | - | |||||
Other operating expenses | 1,876 | 582 | |||||
Total noninterest expense | 34,800 | 1,715 | |||||
Income before income taxes | (24,529) | 372 | |||||
Income tax expense (benefit) | (410) | 84 | |||||
Net income | $ | (24,119) | $ | 288 | |||
Dividends accrued on preferred stock | 220 | - | |||||
Accretion of discount on preferred stock | 45 | - | |||||
Net income available to common stockholders | $ | (24,384) | $ | 288 | |||
Net (loss) income per share - basic | $ | (1.14) | $ | 0.02 | |||
Net (loss) income per share - diluted | $ | (1.14) | $ | 0.02 |
COMMUNITY BANKERS TRUST CORPORATION | ||||||||||||||||||||||||
NET INTEREST MARGIN ANALYSIS | ||||||||||||||||||||||||
AVERAGE BALANCE SHEETS | ||||||||||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 | ||||||||||||||||||||||||
For the three months ended June 30, 2009 | For the six months ended June 30, 2009 | |||||||||||||||||||||||
Average | Interest | Average | Average | Interest | Average | |||||||||||||||||||
Balance | Income/ | Rates | Balance | Income/ | Rates | |||||||||||||||||||
Sheet | Expense | Earned/Paid | Sheet | Expense | Earned/Paid | |||||||||||||||||||
ASSETS: | (Dollars in thousands) | |||||||||||||||||||||||
Loans, including fees | $ | 548,577 | $ | 9,631 | 7.02 | % | $ | 541,184 | $ | 18,047 | 6.67 | % | ||||||||||||
FDIC covered loans | 261,205 | 3,016 | 4.62 | % | 232,513 | 6,286 | 5.41 | % | ||||||||||||||||
Interest bearing bank balances | 19,741 | 81 | 1.64 | % | 34,122 | 202 | 1.18 | % | ||||||||||||||||
Federal funds sold | 24,142 | 12 | 0.20 | % | 20,041 | 26 | 0.26 | % | ||||||||||||||||
Investments (taxable) | 262,007 | 2,607 | 3.98 | % | 264,566 | 5,499 | 4.16 | % | ||||||||||||||||
Investments (tax exempt) | 83,505 | 1,242 | 5.95 | % | 80,232 | 2,389 | 5.96 | % | ||||||||||||||||
Total earning assets | 1,199,177 | 16,589 | 5.53 | % | 1,172,658 | 32,449 | 5.53 | % | ||||||||||||||||
Allowance for loan losses | (11,009 | ) | (9,280 | ) | ||||||||||||||||||||
Non-earning assets | 137,175 | 133,414 | ||||||||||||||||||||||
Total assets | $ | 1,325,343 | $ | 1,296,792 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||
Demand - | ||||||||||||||||||||||||
Interest bearing | $ | 203,965 | $ | 485 | 0.95 | % | $ | 191,231 | $ | 1,175 | 1.23 | % | ||||||||||||
Savings | 57,364 | 114 | 0.79 | % | 53,252 | 274 | 1.03 | % | ||||||||||||||||
Time deposits | 763,276 | 5,700 | 2.99 | % | 744,007 | 10,968 | 2.95 | % | ||||||||||||||||
Total deposits | 1,024,605 | 6,299 | 2.46 | % | 988,490 | 12,417 | 2.51 | % | ||||||||||||||||
FHLB and other borrowings | 41,913 | 390 | 3.72 | % | 47,437 | 737 | 3.11 | % | ||||||||||||||||
Total interest-bearing | ||||||||||||||||||||||||
liabilities | 1,066,518 | 6,689 | 2.51 | % | 1,035,927 | 13,154 | 2.54 | % | ||||||||||||||||
Non-interest bearing | ||||||||||||||||||||||||
deposits | 61,421 | 61,301 | ||||||||||||||||||||||
Other liabilities | 31,056 | 31,253 | ||||||||||||||||||||||
Total liabilities | 1,158,995 | 1,128,481 | ||||||||||||||||||||||
Stockholders' equity | 166,348 | 168,311 | ||||||||||||||||||||||
Total liabilities and | ||||||||||||||||||||||||
stockholders' equity | $ | 1,325,343 | $ | 1,296,792 | ||||||||||||||||||||
Net interest earnings | $ | 9,900 | $ | 19,295 | ||||||||||||||||||||
Interest rate spread | 3.02 | % | 2.99 | % | ||||||||||||||||||||
Net interest margin | 3.30 | % | 3.29 | % | ||||||||||||||||||||
(1) Income and yields are reported on a tax equivalent basis assuming a federal tax rate of 34%. |
Contacts:
Community Bankers Trust Corporation
Bruce E. Thomas, 804-443-4343
Senior
Vice President/Chief Financial Officer