Community Bankers Trust Corporation (NASDAQ:ESXB) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 10:00 am ET


Community Bankers Trust Corporation (NASDAQ:ESXB) Q2 2020 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Community Bankers Trust Corporation Second Quarter 2020 Earnings Conference Call. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions]

At this time, I would like to turn the conference over to Rex Smith, President and Chief Executive Officer. Please go ahead.

Rex L. Smith

Good morning, and thank you for joining us today as we review the results of the second quarter and the first half of 2020 for Community Bankers Trust Corporation, which is the holding company for Essex Bank.

Let me start with our 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 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, our 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

The results for the second quarter of 2020 show some recovery from the effects of the COVID-19 pandemic that we experienced in the first quarter. While the State of Virginia has opened Phase III, Maryland remains partially closed. We continue to try and anticipate the final effect of the disruption, but much is still in question.

The bank participated in the Paycheck Protection Program or PPP lending, originating over 740 loans amounting to $83.5 million for the quarter. These loans are expected to be fully forgiven by the United States Treasury after borrowers use the loans to keep employees on their payroll and cover operating expenses. They were a big help to many of our customers and to the communities in which we operate. We also continue to grant payment relief to specific customers in the second quarter, although at a much reduced level from the previous quarter.

Total relief granted was $170 million and represented a little over 14% of the total amount of net loans. This is slightly lower than the experience of our peers in the biz district. Of the $170 million, approximately $30 million were shorter term in nature and those loans have resumed normal payments at this time. We are still offering some relief as we work very closely with our customers to build strong and complete relationships, but it has not been a significant amount since quarter end.

Overall, loan growth without the PPP loans was 4.4% year-to-date annualized and 5.6% year-over-year, which is in line with our expectations. Credit quality remains strong and the provision expense was $900,000 for the quarter, down from the $3.3 million expense in the first quarter, as delinquencies remained low and substandard classifications remain stable.

The provision addition increased the allowances coverage to 1.13% of total loans, if you exclude the PPP