Company Quick10K Filing
Community Bankers Trust
Price8.57 EPS1
Shares23 P/E17
MCap193 P/FCF13
Net Debt0 EBIT26
TEV193 TEV/EBIT7
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-08
10-K 2019-12-31 Filed 2020-03-13
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-03-15
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-08
10-Q 2018-03-31 Filed 2018-05-09
10-K 2017-12-31 Filed 2018-03-15
10-Q 2017-09-30 Filed 2017-11-08
10-Q 2017-06-30 Filed 2017-08-08
10-Q 2017-03-31 Filed 2018-08-17
10-K 2016-12-31 Filed 2017-03-16
10-Q 2016-09-30 Filed 2016-11-08
10-Q 2016-03-31 Filed 2016-05-09
10-K 2015-12-31 Filed 2016-03-11
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-13
10-Q 2014-09-30 Filed 2014-11-07
10-Q 2014-06-30 Filed 2014-08-08
10-Q 2014-03-31 Filed 2014-05-09
10-K 2013-12-31 Filed 2014-03-14
10-Q 2013-09-30 Filed 2013-11-12
10-Q 2013-06-30 Filed 2013-08-13
10-Q 2013-03-31 Filed 2013-05-14
10-K 2012-12-31 Filed 2013-03-26
10-Q 2012-09-30 Filed 2012-11-14
10-Q 2012-06-30 Filed 2012-08-14
10-Q 2012-03-31 Filed 2012-05-15
10-K 2011-12-31 Filed 2012-03-30
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-15
10-Q 2011-03-31 Filed 2011-05-16
10-K 2010-12-31 Filed 2011-03-31
10-Q 2010-09-30 Filed 2010-11-09
10-Q 2010-06-30 Filed 2010-08-09
10-Q 2010-03-31 Filed 2010-05-10
10-K 2009-12-31 Filed 2010-04-23
8-K 2020-05-01 Amend Bylaw, Other Events, Exhibits
8-K 2020-04-24 Earnings, Exhibits
8-K 2020-01-22 Earnings, Other Events, Exhibits
8-K 2019-10-25 Earnings, Exhibits
8-K 2019-07-26 Earnings, Exhibits
8-K 2019-06-21 Officers
8-K 2019-05-17 Shareholder Vote
8-K 2019-04-26 Earnings, Exhibits
8-K 2019-02-28 Other Events, Exhibits
8-K 2019-01-25 Earnings, Exhibits
8-K 2018-10-26 Earnings, Exhibits
8-K 2018-07-26 Earnings, Exhibits
8-K 2018-06-22 Officers
8-K 2018-05-18 Shareholder Vote
8-K 2018-04-26 Earnings, Exhibits
8-K 2018-03-13 Accountant, Exhibits
8-K 2018-01-30 Earnings, Exhibits

ESXB 10Q Quarterly Report

Part I — Financial Information
Item 1. Financial Statements
Note 1. Nature of Banking Activities and Significant Accounting Policies
Note 2. Securities
Note 3. Loans and Related Allowance for Loan Losses
Note 4. Pci Loans and Related Allowance for Loan Losses
Note 5. Other Real Estate Owned
Note 6. Deposits
Note 7. Accumulated Other Comprehensive Income
Note 8. Fair Values of Assets and Liabilities
Note 9. Earnings per Share
Note 10. Employee Benefit Plan
Note 11. Cash Flow Hedge
Note 12. Revenue Recognition
Note 13. Leases
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 esxb-20200331ex3113a7b4b.htm
EX-31.2 esxb-20200331ex31264c9ab.htm
EX-32.1 esxb-20200331ex32106d5b2.htm

Community Bankers Trust Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
1.51.20.90.60.30.02012201420172020
Assets, Equity
0.10.10.10.00.00.02018201820192020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12012201420172020
Ops, Inv, Fin

10-Q 1 esxb-20200331x10q.htm 10-Q esxb_Current_Folio_10Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended March 31, 2020

 

 

or

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the transition period from                  to                

Commission File Number: 001‑32590

COMMUNITY BANKERS TRUST CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Virginia

20‑2652949

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

9954 Mayland Drive, Suite 2100

 

Richmond, Virginia

23233

(Address of principal executive offices)

(Zip Code)

(804) 934‑9999

(Registrant’s telephone number, including area code)

 

n/a

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

 

 

Title of each class

    

Trading Symbol

    

Name of each exchange on which registered:

Common Stock, $0.01 par value

 

ESXB

 

The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit. such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐  No ☑

 

At March 31, 2020, there were 22,317,420 shares of the Company’s common stock outstanding.

 

 

COMMUNITY BANKERS TRUST CORPORATION

TABLE OF CONTENTS

FORM 10‑Q

March 31, 2020

PART I — FINANCIAL INFORMATION 

 

Item 1. Financial Statements 

3

Unaudited Consolidated Balance Sheets 

3

Unaudited Consolidated Statements of Income 

4

Unaudited Consolidated Statements of Comprehensive Income 

5

Unaudited Consolidated Statements of Changes in Shareholders’ Equity 

6

Unaudited Consolidated Statements of Cash Flows 

7

Notes to Unaudited Consolidated Financial Statements 

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 

27

Item 3. Quantitative and Qualitative Disclosures About Market Risk 

41

Item 4. Controls and Procedures 

42

PART II — OTHER INFORMATION 

 

Item 1. Legal Proceedings 

42

Item 1A. Risk Factors 

42

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

44

Item 3. Defaults upon Senior Securities 

44

Item 4. Mine Safety Disclosures 

44

Item 5. Other Information 

44

Item 6. Exhibits 

44

SIGNATURES 

45

 

 

2

 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2020 AND DECEMBER 31, 2019

(dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

    

March 31, 2020

    

December 31, 2019*

ASSETS

 

 

 

 

 

 

Cash and due from banks

 

$

15,406

 

$

16,976

Interest bearing bank deposits

 

 

14,960

 

 

11,708

Total cash and cash equivalents

 

 

30,366

 

 

28,684

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

202,711

 

 

186,969

Securities held to maturity, at cost (fair value of $25,485 and $36,633, respectively)

 

 

24,649

 

 

35,733

Equity securities, restricted, at cost

 

 

8,458

 

 

8,855

Total securities

 

 

235,818

 

 

231,557

 

 

 

 

 

 

 

Loans held for sale

 

 

2,470

 

 

501

 

 

 

 

 

 

 

Loans

 

 

1,079,229

 

 

1,058,323

Purchased credit impaired (PCI) loans

 

 

30,275

 

 

32,528

Total loans

 

 

1,109,504

 

 

1,090,851

Allowance for loan losses (loans of $11,819 and $8,429, respectively; PCI loans of $156 and $156, respectively)

 

 

(11,975)

 

 

(8,585)

Net loans

 

 

1,097,529

 

 

1,082,266

 

 

 

 

 

 

 

Bank premises and equipment, net

 

 

29,065

 

 

29,472

Bank premises and equipment held for sale

 

 

1,589

 

 

1,589

Right-of-use lease assets

 

 

6,234

 

 

6,472

Other real estate owned

 

 

4,506

 

 

4,527

Bank owned life insurance

 

 

29,514

 

 

29,340

Other assets

 

 

16,449

 

 

16,432

Total assets

 

$

1,453,540

 

$

1,430,840

 

 

 

 

 

 

 

LIABILITIES

 

 

  

 

 

  

Deposits:

 

 

  

 

 

  

Noninterest bearing

 

$

188,327

 

$

178,584

Interest bearing

 

 

1,032,731

 

 

984,864

Total deposits

 

 

1,221,058

 

 

1,163,448

 

 

 

 

 

 

 

Federal funds purchased

 

 

 —

 

 

24,437

Federal Home Loan Bank borrowings

 

 

58,333

 

 

68,500

Trust preferred capital notes

 

 

4,124

 

 

4,124

Lease liabilities

 

 

6,513

 

 

6,737

Other liabilities

 

 

8,044

 

 

8,115

Total liabilities

 

 

1,298,072

 

 

1,275,361

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

  

 

 

  

Common stock (200,000,000 shares authorized, $0.01 par value; 22,317,420 and 22,422,621 shares issued and outstanding, respectively)

 

 

223

 

 

224

Additional paid in capital

 

 

150,219

 

 

150,728

Retained earnings

 

 

2,856

 

 

2,562

Accumulated other comprehensive income

 

 

2,170

 

 

1,965

Total shareholders’ equity

 

 

155,468

 

 

155,479

Total liabilities and shareholders’ equity

 

$

1,453,540

 

$

1,430,840


*Derived from audited consolidated financial statements

See accompanying notes to unaudited consolidated financial statements

 

 

3

 

 

 

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(dollars and shares in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

March 31, 2020

    

March 31, 2019

 

Interest and dividend income

 

 

  

 

 

  

 

Interest and fees on loans

 

$

13,086

 

$

12,419

 

Interest and fees on PCI loans

 

 

1,097

 

 

1,293

 

Interest on deposits in other banks

 

 

69

 

 

96

 

Interest and dividends on securities

 

 

 

 

 

 

 

Taxable

 

 

1,351

 

 

1,522

 

Nontaxable

 

 

343

 

 

476

 

Total interest and dividend income

 

 

15,946

 

 

15,806

 

Interest expense

 

 

  

 

 

  

 

Interest on deposits

 

 

3,419

 

 

3,234

 

Interest on borrowed funds

 

 

289

 

 

447

 

Total interest expense

 

 

3,708

 

 

3,681

 

Net interest income

 

 

12,238

 

 

12,125

 

Provision for loan losses

 

 

3,300

 

 

 —

 

Net interest income after provision for loan losses

 

 

8,938

 

 

12,125

 

Noninterest income

 

 

  

 

 

  

 

Service charges and fees

 

 

672

 

 

609

 

Loss on securities transactions, net

 

 

(39)

 

 

(14)

 

Gain on sale of other loans

 

 

11

 

 

 —

 

Income on bank owned life insurance

 

 

174

 

 

181

 

Mortgage loan income

 

 

221

 

 

62

 

Other

 

 

296

 

 

176

 

Total noninterest income

 

 

1,335

 

 

1,014

 

Noninterest expense

 

 

  

 

 

  

 

Salaries and employee benefits

 

 

5,152

 

 

5,381

 

Occupancy expenses

 

 

827

 

 

930

 

Equipment expenses

 

 

372

 

 

381

 

FDIC assessment

 

 

125

 

 

150

 

Data processing fees

 

 

592

 

 

568

 

Other real estate expense, net

 

 

 6

 

 

(8)

 

Other operating expenses

 

 

1,520

 

 

1,438

 

Total noninterest expense

 

 

8,594

 

 

8,840

 

Income before income taxes

 

 

1,679

 

 

4,299

 

Income tax expense

 

 

264

 

 

796

 

Net income

 

$

1,415

 

$

3,503

 

Net income per share — basic

 

$

0.06

 

$

0.16

 

Net income per share — diluted

 

$

0.06

 

$

0.16

 

Weighted average number of shares outstanding

 

 

  

 

 

  

 

Basic

 

 

22,400

 

 

22,141

 

Diluted

 

 

22,591

 

 

22,430

 

 

See accompanying notes to unaudited consolidated financial statements

4

 

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

    

March 31, 2020

    

March 31, 2019

 

Net income

 

$

1,415

 

$

3,503

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

Unrealized gain  on investment securities:

 

 

 

 

 

 

 

Change in unrealized gain on investment securities

 

 

782

 

 

2,204

 

Tax related to unrealized gain on investment securities

 

 

(172)

 

 

(485)

 

Reclassification adjustment for loss on securities sold

 

 

39

 

 

14

 

Tax related to realized loss on securities sold

 

 

(9)

 

 

(3)

 

Cash flow hedge:

 

 

 

 

 

 

 

Change in unrealized loss on cash flow hedge

 

 

(557)

 

 

(94)

 

Tax related to cash flow hedge

 

 

122

 

 

20

 

Total other comprehensive income

 

 

205

 

 

1,656

 

Total comprehensive income

 

$

1,620

 

$

5,159

 

 

See accompanying notes to unaudited consolidated financial statements

5

 

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(dollars and shares in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

Additional

 

Retained

 

Other

 

 

 

 

 

Common Stock

 

Paid in

 

Earnings

 

Comprehensive

 

 

 

 

    

Shares

    

Amount

    

Capital

    

(Deficit)

    

Income (Loss)

    

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance January 1, 2019

 

22,132

 

$

221

 

$

148,763

 

$

(10,244)

 

$

(1,279)

 

$

137,461

Issuance of common stock

 

 6

 

 

 —

 

 

54

 

 

 —

 

 

 —

 

 

54

Exercise and issuance of employee stock options

 

31

 

 

 1

 

 

298

 

 

 —

 

 

 —

 

 

299

Net income

 

 —

 

 

 —

 

 

 —

 

 

3,503

 

 

 —

 

 

3,503

Dividends paid on common stock

 

 —

 

 

 —

 

 

 —

 

 

(665)

 

 

 —

 

 

(665)

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

1,656

 

 

1,656

Balance March 31, 2019

 

22,169

 

$

222

 

$

149,115

 

$

(7,406)

 

$

377

 

$

142,308

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance January 1, 2020

 

22,423

 

$

224

 

$

150,728

 

$

2,562

 

$

1,965

 

$

155,479

Issuance of common stock

 

 6

 

 

 —

 

 

54

 

 

 —

 

 

 —

 

 

54

Exercise and issuance of employee stock options

 

 4

 

 

 —

 

 

242

 

 

 —

 

 

 —

 

 

242

Stock purchased under stock repurchase program

 

(116)

 

 

(1)

 

 

(805)

 

 

 —

 

 

 —

 

 

(806)

Net income

 

 —

 

 

 —

 

 

 —

 

 

1,415

 

 

 —

 

 

1,415

Dividends paid on common stock

 

 —

 

 

 —

 

 

 —

 

 

(1,121)

 

 

 —

 

 

(1,121)

Other comprehensive income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

205

 

 

205

Balance March 31, 2020

 

22,317

 

$

223

 

$

150,219

 

$

2,856

 

$

2,170

 

$

155,468

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to unaudited consolidated financial statements

6

 

COMMUNITY BANKERS TRUST CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

(dollars in thousands)

 

 

 

 

 

 

 

 

 

    

March 31, 2020

    

March 31, 2019

 

Operating activities:

 

 

 

 

 

 

 

Net income

 

$

1,415

 

$

3,503

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation

 

 

483

 

 

545

 

Leased asset amortization

 

 

238

 

 

231

 

Stock-based compensation expense

 

 

285

 

 

266

 

Tax benefit of exercised stock options

 

 

(6)

 

 

(31)

 

Amortization of purchased loan premium

 

 

160

 

 

60

 

Provision for loan losses

 

 

3,300

 

 

 —

 

Amortization of security premiums and accretion of discounts, net

 

 

233

 

 

281

 

Net loss on sale of securities

 

 

39

 

 

14

 

Net gain on sale and valuation of other real estate owned

 

 

(6)

 

 

(50)

 

Net gain on sale of loans

 

 

(11)

 

 

 —

 

Originations of mortgages held for sale

 

 

(8,668)

 

 

(1,976)

 

Proceeds from sales of mortgages held for sale

 

 

6,699

 

 

1,726

 

Increase in bank owned life insurance investment

 

 

(174)

 

 

(181)

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Decrease (increase) in other assets

 

 

174

 

 

(366)

 

Decrease in accrued expenses and other liabilities

 

 

(846)

 

 

(58)

 

Net cash provided by operating activities

 

 

3,315

 

 

3,964

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

  

 

 

  

 

Proceeds from sales/calls/maturities/paydowns of available for sale securities

 

 

9,893

 

 

19,264

 

Proceeds from calls/maturities/paydowns of held to maturity securities

 

 

11,065

 

 

626

 

Proceeds from sales of restricted equity securities

 

 

1,700

 

 

 —

 

Purchase of available for sale securities

 

 

(25,069)

 

 

(10,682)

 

Purchase of restricted equity securities

 

 

(1,302)

 

 

(626)

 

Proceeds from sale of other real estate owned

 

 

27

 

 

316

 

Net increase in loans

 

 

(19,527)

 

 

(4,351)

 

Principal recoveries of loans previously charged off

 

 

184

 

 

77

 

Purchase of premises and equipment, net

 

 

(76)

 

 

(199)

 

Purchase small business investment company fund investment

 

 

(250)

 

 

(262)

 

Proceeds from sale of loans

 

 

632

 

 

705

 

Net cash (used in) provided by investing activities

 

 

(22,723)

 

 

4,868

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

  

 

 

  

 

Net increase in deposits

 

 

57,610

 

 

3,148

 

Net decrease in federal funds purchased

 

 

(24,437)

 

 

(19,440)

 

Net (decrease) increase in short-term Federal Home Loan Bank borrowings

 

 

(10,000)

 

 

10,000

 

Proceeds from long-term Federal Home Loan Bank borrowings

 

 

40,000

 

 

 —

 

Payments on long-term Federal Home Loan Bank borrowings

 

 

(40,167)

 

 

(375)

 

Proceeds from issuance of common stock

 

 

11

 

 

87

 

Cash dividends paid

 

 

(1,121)

 

 

(665)

 

Repurchase of common stock

 

 

(806)

 

 

 —

 

Net cash provided by (used in) financing activities

 

 

21,090

 

 

(7,245)

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

1,682

 

 

1,587

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

  

 

 

  

 

Beginning of the period

 

 

28,684

 

 

34,219

 

End of the period

 

$

30,366

 

$

35,806

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

  

 

 

  

 

Interest paid

 

$

3,689

 

$

3,512

 

Income taxes paid

 

 

 —

 

 

439

 

Transfers of loans to other real estate owned

 

 

 —

 

 

392

 

Right-of-use lease assets in exchange for lease liability

 

 

 

 

7,408

 

 

See accompanying notes to unaudited consolidated financial statements

 

7

 

COMMUNITY BANKERS TRUST CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Banking Activities and Significant Accounting Policies

Organization

Community Bankers Trust Corporation (the “Company”) is headquartered in Richmond, Virginia and is the holding company for Essex Bank (the “Bank”), a Virginia state bank with 24 full-service offices, 18 of which are in Virginia and six of which are in Maryland. The Bank also operates two loan production offices.

The Bank engages in a general commercial banking business and provides a wide range of financial services primarily to individuals, small businesses and larger commercial companies, including individual and commercial demand and time deposit accounts, commercial and industrial loans, consumer and small business loans, real estate and mortgage loans, investment services, on-line and mobile banking products, and cash management services.

Financial Statements

The consolidated statements presented include accounts of the Company and the Bank, its wholly-owned subsidiary. All material intercompany balances and transactions have been eliminated. The statements should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes to consolidated financial statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2019. The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles (GAAP) and to the general practices within the banking industry. The interim financial statements have not been audited; however, in the opinion of management, all adjustments, consisting of normal accruals, were made that are necessary to present fairly the balance sheet of the Company as of March 31, 2020, the statements of income and comprehensive income, changes in shareholders’ equity, and cash flows for the three months ended March 31, 2020. Results for the three month period ended March 31 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.

The financial information contained within the statements is, to a significant extent, financial information that is based on measures of the financial effects of transactions and events that have already occurred. A variety of factors could affect the ultimate value that is obtained when either earning income, recognizing an expense, recovering an asset or relieving a liability. The Company uses historical loss factors as one factor in determining the inherent loss that may be present in its loan portfolio. Actual losses could differ significantly from the historical factors that the Company uses. In addition, GAAP itself may change from one previously acceptable method to another method. Although the economics of the Company’s transactions would be the same, the timing of events that would impact its transactions could change.

In preparing these financial statements, the Company has evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued.

Recent Accounting Developments

 In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, (the “agencies”) issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by the coronavirus (COVID-19) pandemic. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 310-40, Receivables – Troubled Debt Restructurings by Creditors, a restructuring of debt constitutes a troubled debt restructuring (TDR) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to the impact of COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments as of December 31, 2019. This interagency guidance is expected to

8

 

have a material impact on the Company’s financial statements; however, due to the uncertainties regarding the economic effects of COVID-19, this impact cannot be quantified at this time. 

Note 2. Securities

Amortized costs and fair values of securities available for sale and held to maturity at March 31, 2020 and December 31, 2019 were as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2020

 

 

 

 

 

Gross Unrealized

 

  

 

 

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

Securities Available for Sale

 

 

  

 

 

  

 

 

  

 

 

  

U.S. Treasury securities

 

$

7,497

 

$

 3

 

$

 —

 

$

7,500

U.S. Government agencies

 

 

21,452

 

 

67

 

 

(715)

 

 

20,804

State, county and municipal

 

 

98,168

 

 

4,120

 

 

(99)

 

 

102,189

Mortgage backed securities

 

 

45,118

 

 

1,959

 

 

(80)

 

 

46,997

Asset backed securities

 

 

13,568

 

 

 4

 

 

(646)

 

 

12,926

Corporate bonds

 

 

12,388

 

 

35

 

 

(128)

 

 

12,295

Total Securities Available for Sale

 

$

198,191

 

$

6,188

 

$

(1,668)

 

$

202,711

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Held to Maturity

 

 

  

 

 

  

 

 

  

 

 

  

State, county and municipal

 

$

24,649

 

$

847

 

$

(11)

 

$

25,485

Total Securities Held to Maturity

 

$

24,649

 

$

847

 

$

(11)

 

$

25,485

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

Gross Unrealized

 

 

 

 

    

Amortized Cost

    

Gains

    

Losses

    

Fair Value

Securities Available for Sale