Community Bankers Trust Corporation (NASDAQ:ESXB) Q4 2019 Earnings Conference Call - Final Transcript

Jan 24, 2020 • 10:00 am ET


Community Bankers Trust Corporation (NASDAQ:ESXB) Q4 2019 Earnings Conference Call - Final Transcript


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Good morning and welcome to the Community Bankers Trust Corporation Fourth Quarter and Year 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Rex Smith, President and CEO. Please go ahead, sir.

Rex L. Smith

Good morning and thank you for joining us today as we review the results of the fourth quarter and the full year of 2019 for Community Bankers Trust Corporation, which is the holding company for Essex Bank. Let me start with a usual reminder that during the course of our remarks today, we may make forward-looking statements within the meaning of applicable securities laws with respect to our operations, performance, future strategy 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 of these documents through our website at

On today's call, I will give a quick overview of the quarter and the year and then Bruce Thomas, our Chief Financial Officer will cover detailed selective financial highlights. And lastly, I will share our thoughts as we look forward to 2020. Overall, we are pleased with the result for the fourth quarter and for the year. We continually work to manage the growth and structure of the balance sheet to maximize earnings without undue risk. We still believe that credit quality and pricing structure are more important than the overall growth rate of loans. When we review the asset and liability model for the company, this belief is reinforced.

Additionally, we continue to focus on growing core deposits, specifically transaction based demand deposits to reduce our overall cost of funds. To that end, I'm pleased to report that we finished the year hitting our target growth in loans and in core deposits. Loan growth for the fourth quarter was 2.3%, which is 9.2% annualized and the pipeline for the first quarter for 2020 is very strong. The growth rate for the year 2019 was as expected and was a direct result of our deliberate approach to lending in this interest rate environment. Deposit mix changed significantly, as non-interest bearing demand deposits increased 8.2% for the year, which allow the company to reduce higher cost time deposits by over $17 million.

Noninterest income also improved for numerous reasons including growth in deposit account fees of $321,000, growth in mortgage origination fees and growth in income from the Investment Management Group. Noninterest expenses remained relatively flat with the exception of the large tax payment made in the third quarter to bring our oldest nonperforming loan into OREO. All of these factors contributed to a 14.7% increase in net income for the year to $15.7 million, a $2 million increase over 2018. Now I will turn the call over