Community Bankers Trust Corporation (NASDAQ: ESXB), the holding company for Essex Bank, today reported results for the fourth quarter and year ended December 31, 2019.

Income Statement- Three Months ended December 31, 2019 compared with Three Months ended September 30, 2019

• Net income of $4.0 million for the fourth quarter of 2019 compares with third quarter 2019 net income of $4.6 million.
• Third quarter net income exceeded fourth quarter net income by $568,000 as the third quarter was boosted by a $1.1 million payoff of a purchased credit impaired ("PCI") loan with no carrying value.
• Loans grew $23.8 million, or 2.3%, during the fourth quarter of 2019, fueling interest income.
• Low cost NOW accounts grew $22.9 million, or 15.5%, during the fourth quarter of 2019.
• There was a provision for loan losses of $200,000 recognized in the fourth quarter of 2019 as a result of robust loan growth.
• Interest on deposits declined $183,000, or 4.9%, on a linked quarter basis.
• Noninterest expenses declined $562,000, or 6.1%, on a linked quarter basis.
• Net interest margin was 3.74% in the fourth quarter of 2019 and reflected a reduction in the cost of interest bearing liabilities from 1.49% in the third quarter to 1.43% in the fourth quarter of 2019.
• Return on average assets, annualized, was 1.14% and return on average equity, annualized, was 10.42% in the fourth quarter.

Income Statement- Year ended December 31, 2019 compared with Year ended December 31, 2018

• Net income of $15.7 million for the year 2019 is an increase of $2.0 million, or 14.7%.
• Interest and dividend income of $65.4 million is an increase of $6.2 million, or 10.5%.
• Interest and fees on loans increased $5.3 million, or 11.4%.
• Net interest income of $50.0 million for 2019 is an increase of $2.8 million, or 5.9%, over 2018.
• Noninterest income of $5.4 million for 2019 is an increase of $891,000, or 20.0%.
• Noninterest expenses increased by $852,000, or 2.4%.
• Return on average assets was 1.11% and return on average equity was 10.63% for 2019.

Income Statement- Three Months ended December 31, 2019 compared with Three Months ended December 31, 2018

• Net income of $4.0 million for the fourth quarter of 2019 is an increase year-over-year of $688,000, or 20.5%.
• Interest and dividend income increased $769,000, or 5.0%, in the fourth quarter of 2019 over the same period in 2018, led by interest and fees on loans, which increased $1.1 million, or 9.3%.
• Noninterest income increased by $294,000, or 27.1%.
• Noninterest expenses decreased by $365,000, or 4.0%.
• Net interest margin has remained stable and was 3.74% in the fourth quarter of 2019 compared with 3.78% for the same period in 2018.

Balance Sheet- December 31, 2019 compared with December 31, 2018

• Loans grew $64.6 million, or 6.5%, from $993.7 million at December 31, 2018 to $1.058 billion at December 31, 2019.
• Noninterest bearing deposits grew $13.5 million, or 8.2%, year-over-year and totaled $178.6 million, representing 15.3% of total deposits, an increase from 14.2% one year ago.
• Growth in noninterest bearing deposits enabled the Bank to lower time deposits by $17.2 million, or 2.8%.
• The ratio of loans-to-deposits increased from 88.6% at December 31, 2018 to 93.8% at December 31, 2019.
• Shareholders' equity increased by $18.0 million, or 13.1%, year-over-year.
• The ratio of nonperforming assets to loans and other real estate at December 31, 2019 was 0.92% versus 1.07% one year prior.
• The ratio of the allowance for loan losses to nonaccrual loans at December 31, 2019 was 159.28% versus 94.57% one year ago.

MANAGEMENT COMMENTS Rex L. Smith, III, President and Chief Executive Officer, stated, "I am pleased with the overall results of both the fourth quarter and the full year 2019, particularly the 14.7% growth in net income. The increase in net income was fueled by several strategic initiatives that included better loan yields, higher fee income from the increase in transaction accounts as well as better than expected results for mortgage and investment sales income. Additionally, we were able to hold noninterest expense to less than a 2.5% increase including a large onetime expense for taxes related to bringing our largest non-performing loan into OREO in the third quarter."

Smith added, "Loan growth for the fourth quarter was solid at 2.3%, which is 9.2% annualized, and the pipeline for the first quarter of 2020 is very strong. Credit quality remains strong and the pipeline is diversified by loan type as well as spread across our geographic footprint."

Smith concluded, "We continue to emphasize key metrics that will enhance shareholder returns. This includes ways to leverage our capital, as shown most recently in the increase in our common stock dividend and a new stock repurchase program. Our markets are large and diverse, which will allow us to continue our controlled growth strategy and sustained strong earnings per share growth in 2020."

RESULTS OF OPERATIONSOverview

Linked Quarter BasisTwo separate items of note that impact comparative results occurred during the third quarter of 2019. The first item was, a $1.1 million payoff of a loan within the PCI portfolio. The PCI portfolio contains six separate pools, two of which, due to the uncertain nature of the cash flows, have no carrying value. This $1.1 million payoff was in one of those pools, the Acquisition, Development and Construction (ADC) pool, resulting in the entire payment being interest income. The other item was the migration of a $4.0 million nonperforming loan, charged down by $200,000 and moved into the other real estate owned (OREO) category at $3.8 million. As a part of this transaction, the Bank paid delinquent real estate taxes in the amount of $624,000 on this property, all of which was expensed in the third quarter of 2019.

Net income of $4.0 million for the fourth quarter of 2019 was a linked quarter decrease of $568,000, or 12.3%, compared with net income of $4.6 million for the third quarter of 2019. Earnings per common share were $0.18, basic and fully diluted, in the fourth quarter of 2019 compared with $0.21 basic and $0.20 fully diluted for the quarter ended September 30, 2019. The decrease in net income on a linked quarter basis was primarily attributable to a decrease of $1.2 million, or 6.8%, in interest income, driven by the payoff in the PCI portfolio. Also affecting net income on a linked quarter basis was a decrease of $133,000 in noninterest income and an increase of $200,000 in provision for loan losses. Offsetting these decreases to net income was a reduction of $177,000 in interest expense, a reduction of $562,000 in noninterest expenses, as noted above, and a reduction of $209,000 in income tax expense.

Yearly Comparison 2019 versus 2018Net income was $15.7 million for the year ended December 31, 2019 compared with $13.7 million for the same period in 2018. This is an increase of $2.0 million, or 14.7%. Interest and dividend income increased by $6.2 million, or 10.5%, and noninterest income increased by $891,000, or 20.0%. Offsetting these increases to net income were increases of $3.4 million, or 28.5%, in interest expense, $852,000, or 2.4%, in noninterest expense, $325,000 in provision for loan losses and $467,000 in income tax expense. Earnings per common share were $0.71 basic and $0.70 fully diluted for 2019 compared with $0.62 basic and $0.61 fully diluted for 2018.

Year-Over-Year QuarterNet income of $4.0 million for the fourth quarter of 2019 was an increase of $688,000, or 20.5%, compared with fourth quarter 2018 net income of $3.4 million. Interest and dividend income increased by $769,000, or 5.0%, in the fourth quarter of 2019 compared with the same period in 2018, driven by interest and fees on loans, which increased $1.1 million. Noninterest income increased by $294,000, or 27.1%, year-over-year, and there was a reduction of $365,000 in noninterest expenses. Offsetting these increases to net income was an increase of $449,000, or 13.1%, in interest expense, an increase of $200,000 in provision for loan losses and an increase of $91,000 in income tax expense.

The following table presents summary income statements for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018 and the year ended December 31, 2019 and December 31, 2018.

Net Interest Income

Linked Quarter BasisNet interest income was $12.4 million for the quarter ended December 31, 2019 compared with $13.4 million for the quarter ended September 30, 2019. The decrease of $1.0 million was mainly attributable to the $1.1 million PCI loan payoff in the third quarter.

Interest and dividend income on a linked quarter basis decreased $1.2 million, or 6.8%, to $16.3 million for the fourth quarter of 2019. Interest income with respect to loans, excluding PCI loans, increased $118,000, or 0.9%, during the fourth quarter when compared with the third quarter of 2019. The yield on loans remained constant at 5.04% in each of the third and fourth quarters of 2019. Interest income with respect to PCI loans was $1.2 million in the fourth quarter of 2019 and $2.3 million in the third quarter of 2019. The increase in income in the PCI portfolio in the third quarter was driven by the $1.1 million loan payoff. Interest income on securities decreased $128,000 on a linked quarter basis as the average balance on the portfolio declined $16.0 million.

Securities income equaled $1.8 million on a tax-equivalent basis for the fourth quarter of 2019 compared with $1.9 million in the third quarter of 2019, a decrease of $136,000. The tax-equivalent yield on the securities portfolio was 3.15% in the fourth quarter of 2019 compared with a tax-equivalent yield of 3.17% in the third quarter of 2019. Tax-exempt securities balances declined by $3.5 million, on average, during the fourth quarter of 2019. Call activity has increased in both taxable and tax-exempt securities due to the current rate environment, and $6.8 million in municipal bonds were called during the fourth quarter of 2019. This is having a negative impact on the yield realized on the portfolio.

The combination of various tax-equivalent yields within the asset mix resulted in a yield on earning assets of 4.90% for the fourth quarter of 2019 compared with 5.23% in the third quarter of 2019. The receipt of cash basis income on the PCI portfolio, due to improved economic conditions, subsequent to the acquisition date in 2009, has resulted in better than forecasted performance and may produce recurring but unpredictable income over the remaining life of these loans. Excluding the $1.1 million payment in the third quarter, the yield on the PCI portfolio would have been 13.82% compared with the actual yield of 26.07%. The yield on earning assets would have been 4.90% in the third quarter compared with the actual yield of 5.23%. The yield on earning assets in the fourth quarter was 4.90%.

Interest expense of $3.9 million in the fourth quarter of 2019 reflected a decrease of $177,000, or 4.4%, on a linked quarter basis. Interest on deposits decreased $183,000, or 4.9%. Interest on borrowed funds increased $6,000, or 1.7%. Average interest bearing deposits decreased by $16.6 million, or 1.6%. The cost of interest bearing deposits decreased from 1.45% in the third quarter of 2019 to 1.40% in the fourth quarter of 2019. Decreased rates paid on interest bearing deposits and on short-term borrowings resulted in a decrease in the cost of interest bearing liabilities from 1.49% in the third quarter of 2019 to 1.43% in the fourth quarter of 2019.

The interest spread, which is reflective of the yield on earning assets less the cost of interest bearing liabilities, was 3.47% in the fourth quarter of 2019. This compares with an interest spread of 3.74% in the third quarter. Excluding the PCI payment, the interest spread would have been 3.41% in the third quarter. The net interest margin was 3.74% in the fourth quarter of 2019. The net interest margin was 4.02% in the third quarter of 2019 and, excluding the PCI payment, would have been 3.70%.

Yearly Comparison 2019 versus 2018Net interest income was $50.0 million for 2019, or an increase of $2.8 million, or 5.9%, when comparing 2018 and 2019. Net interest income on a tax-equivalent basis was $50.4 million for 2019 compared with $47.8 million for 2018, an increase of $2.6 million. The yield on earning assets was 4.99% for 2019 compared with 4.71% for 2018. Interest and fees on loans of $51.6 million in 2019 was an increase of $5.3 million compared with $46.3 million for 2018. Interest and fees on PCI loans, including the $1.1 million ADC payment, increased $820,000 over this same time frame. For 2019 compared with 2018, securities income increased $31,000. On a tax-equivalent basis, the change was a decrease of $124,000. The average balance of tax-exempt securities declined $20.3 million, thus reducing the benefit received on a tax-equivalent basis on these securities. The tax-equivalent yield on the portfolio increased and was 3.23% for 2019 compared with 3.15% for 2018.

Interest expense of $15.5 million represented an increase of $3.4 million, or 28.5%, in 2019 compared with 2018. Average interest bearing liabilities increased $15.1 million, or 1.4%. However, the cost of interest bearing liabilities increased from 1.13% for 2018 to 1.44% for 2019. Driving the increase was growth of $46.3 million, or 8.0%, in the average balance of time deposits, from $581.6 million for 2018 to $627.9 million for 2019. This growth in time deposits, as a result of higher rates, came partly from a shift away from savings and money market accounts, which experienced a decline of $8.8 million in average balances between the comparison periods. Additionally, time deposit growth included a shift out of FHLB and other borrowings, which reflected an average balance decline of $25.3 million, or 27.8%, over the two comparison periods.

The tax-equivalent net interest margin was 3.82% for 2019 compared with 3.76% for 2018. The yield on earning assets increased by 28 basis points over this time frame. The competition for funding, however, pushed the cost of interest bearing liabilities up 31 basis points, from 1.13% to 1.44%. The net interest spread was 3.55% for 2019 and 3.58% for 2018. The net interest margin of 3.82% for 2019 was an increase from 3.76% for 2018. The net interest margin has been enhanced by year-over-year growth in the average balance of noninterest bearing deposits of $19.2 million, or 12.4%, and in shareholders' equity of $18.5 million, or 14.3%.

Year-Over-Year QuarterNet interest income increased $320,000, or 2.6%, from the fourth quarter of 2018 to the fourth quarter of 2019. Net interest income was $12.4 million in the fourth quarter of 2019 compared with $12.1 million for the same period in 2018. Interest and fees on loans increased by $1.1 million, or 9.3%, year-over-year, and was $13.3 million for the fourth quarter of 2019. Interest and fees on PCI loans of $1.2 million was a decrease of $120,000, or 9.3%. The average balance of loans, excluding PCI loans, was $1.047 billion for the fourth quarter of 2019, an increase of $71.6 million, or 7.3%, from the fourth quarter of 2018. The yield on loans also increased nine basis points year-over-year, from 4.95% in the fourth quarter of 2018 to 5.04% in the fourth quarter of 2019.

Interest income on securities of $1.7 million for the fourth quarter of 2019 was a year-over-year decrease of $234,000. Interest income on securities, on a tax-equivalent basis, was $1.8 million in the fourth quarter of 2019, which was a decrease of $282,000 compared with the fourth quarter of 2018. This decrease was driven both by average balance and yield. The average balance of the securities portfolio decreased $23.0 million year over year. Additionally, on a tax-equivalent basis, the yield on investment securities decreased from 3.31% in the fourth quarter of 2018 to 3.15% in the fourth quarter of 2019.

Interest expense increased $449,000, or 13.1%, when comparing the fourth quarter of 2019 and the fourth quarter of 2018. Interest expense on deposits increased $455,000, or 14.9%, even though the average balance of interest bearing deposits declined $3.5 million. The increase in deposit cost was driven by an increase in rates paid on interest bearing deposits. The cost of interest bearing deposits increased from 1.22% in the fourth quarter of 2018 to 1.40% in the fourth quarter of 2019. FHLB and other borrowings increased, on average, $3.8 million year-over-year, which was more than offset by a decrease in the rate paid, from 2.08% in the fourth quarter of 2018 to 1.82% in the fourth quarter of 2019. Overall, the Bank's cost of interest bearing liabilities increased 16 basis points, from 1.27% in the fourth quarter of 2018 to 1.43% in the fourth quarter of 2019.

The tax-equivalent net interest margin decreased four basis points, from 3.78% in the fourth quarter of 2018 to 3.74% in the fourth quarter of 2019. Likewise, the interest spread decreased from 3.57% to 3.47% over the same time period. The margin declined less than the decrease in spread as a result of an increase in the average balances in noninterest bearing deposits of $22.1 million and shareholders' equity of $21.2 million.

The following table compares the Company's net interest margin, on a tax-equivalent basis, for the three months ended December 31, 2019, September 30, 2019, December 31, 2018 and the year ended December 31, 2019 and December 31, 2018.

Provision for Loan Losses

The Company records a separate provision for loan losses for its loan portfolio, excluding PCI loans, and the PCI loan portfolio. There was a $200,000 provision for loan losses on the loan portfolio, excluding PCI loans, during the fourth quarter of 2019 compared with no provision for loan losses in the third quarter of 2019 and no provision in the fourth quarter of 2018. For the year ended December 31, 2019, there was a provision for loan losses of $325,000 compared with no provision for loan losses for the year ended December 31, 2018. The provision recognized in the fourth quarter of 2019 was due to loan growth of $23.8 million, or 2.3%, during the quarter and an uptick in delinquencies less than 90 days past due and still accruing interest. There was no provision for loan losses on the PCI loan portfolio during 2019 or 2018. Additional discussion of loan quality is presented below.

Noninterest Income

Linked Quarter BasisNoninterest income was $1.4 million for the fourth quarter of 2019, a decrease of $133,000 compared with the third quarter of 2019. Gain/(loss) on securities transactions, net decreased $89,000 during the fourth quarter of 2019 versus the third period of 2019. Mortgage loan income of $148,000 in the fourth quarter of 2019 was a decrease of $28,000 compared with the third quarter of 2019. Also, other noninterest income of $320,000 was a decrease of $26,000 compared with the prior quarter. The linked quarter decrease was partially the result of income from life insurance proceeds of $120,000 recognized in the third quarter of 2019 offset by dividend income of $52,000 received in the fourth quarter of 2019. Gain on sale of loans of $104,000 was recognized in the fourth quarter of 2019 compared with no gain on sale of loans the prior quarter.

Yearly Comparison 2019 versus 2018Noninterest income was $5.4 million for 2019, an increase of $891,000, or 20.0%, compared with $4.5 million for 2018. Service charges and fees, driven by an increase in deposits, were $2.8 million for 2019, an increase of $321,000 compared with the same period in 2018. Other noninterest income was $1.1 million for 2019, an increase of $353,000 versus 2018. The 2019 period benefited from the receipt of life insurance proceeds of $120,000, dividends on an equity investment of $159,000, compared with $30,000 in 2018, and swap fee income of $87,000. Mortgage loan income of $486,000, driven by low interest rates and refinance activity, increased by $167,000 in 2019 compared with the same period in 2018. Gain on securities transactions, net was $235,000 in 2019 compared with $70,000 for 2018. Gain on sale of loans declined by $14,000 in 2019 compared with 2018.

Year-Over-Year QuarterNoninterest income increased $294,000, or 27.1%, and was $1.4 million in the fourth quarter of 2019 compared with $1.1 million for the fourth quarter of 2018. Other noninterest income increased by $131,000, driven by life insurance proceeds of $120,000, an increase in equity investment dividends of $45,000, and swap fee income of $52,000. Mortgage loan income of $148,000 was an increase of $117,000 over the same period one year earlier. Service charges and fees were $757,000 in the fourth quarter of 2019 and increased $65,000 year-over-year. Gain on sale of loans increased by $14,000 in the fourth quarter of 2019 compared with the same period in 2018. Losses on securities transactions were $39,000 in the fourth quarter of 2019 compared with losses of $12,000 for the same period in 2018.

Noninterest Expenses

Linked Quarter BasisNoninterest expenses totaled $8.7 million for the fourth quarter of 2019, as compared with $9.2 million for the third quarter of 2019, a decrease of $562,000, or 6.1%. Other real estate expenses, net decreased by $509,000, affected by $624,000 in delinquent real estate taxes paid by the Bank in the third quarter to take title to a past due loan that was moved to OREO. Other operating expenses decreased $147,000 on a linked quarter basis and were $1.4 million in the fourth quarter of 2019. Equipment expenses declined $45,000 on a linked quarter basis and were $332,000 in the fourth quarter of 2019. Offsetting decreases to noninterest expenses was an increase of $191,000 in salaries and employee benefits, which were $5.5 million for the fourth quarter of 2019.

Yearly Comparison 2019 versus 2018Noninterest expenses were $35.7 million for 2019, as compared with $34.9 million for 2018. This is an increase of $852,000, or 2.4%. Other real estate expenses, net increased $605,000 and were $718,000 for 2019, compared with $113,000 for 2018. The major cause for the increase was the payment of $624,000 in past due taxes noted above. Occupancy expenses increased $265,000 in 2019 compared with 2018 and were $3.5 million. Data processing fees increased $207,000, or 9.8% and were $2.3 million for 2019. Other operating expenses increased $223,000 and were $6.0 million for 2019. Offsetting these increases, the FDIC assessment decreased $480,000 for 2019 compared with the same period in 2018.

Year-Over-Year QuarterNoninterest expenses were $8.7 million in the fourth quarter of 2019 and decreased $365,000, or 4.0%, compared with 2018. FDIC assessment decreased $197,000 and were $177,000 in the fourth quarter of 2018 and a credit of $20,000 for the fourth quarter of 2019. Salaries and employee benefits of $5.5 million in the fourth quarter of 2019 decreased $100,000 compared with the same period in 2019. Data processing expenses were $588,000 in the fourth quarter of 2019 and decreased by $67,000 compared with the same period in 2018. Equipment expenses decreased $42,000 year-over-year and were $332,000 in the fourth quarter of 2019. Occupancy expenses of $791,000 in the fourth quarter of 2019 were a decrease of $36,000 from the fourth quarter of 2018. Other operating expenses decreased $24,000 year-over-year and were $1.4 million in the fourth quarter of 2019. Offsetting these decreases to noninterest expenses was an increase in other real estate expenses, net by $101,000, as such expenses were $56,000 for the fourth quarter of 2019.

The following table compares the Company's other operating expenses included in noninterest expenses for the three months ended December 31, 2019, September 30, 2019, December 31, 2018 and the year ended December 31, 2019 and December 31, 2018.

Income Taxes

Income tax expense was $878,000 for the three months ended December 31, 2019, compared with income tax expense of $1.1 million for the third quarter of 2019 and $787,000 for the fourth quarter of 2018. For the year ended December 31, 2019, income tax expense was $3.6 million compared with $3.1 million for 2018. The effective tax rate for the fourth quarter of 2019 was 17.8% versus 19.1% for the third quarter of 2019 and 19.0% in the fourth quarter of 2018. The effective tax rate was 18.4% for each of the years ended December 31, 2019 and 2018.

FINANCIAL CONDITION

Total assets increased $38.1 million, or 2.7%, during 2019 to $1.431 billion at December 31, 2019. Total loans, excluding PCI loans, were $1.058 billion at December 31, 2019, increasing $64.6 million, or 6.5%, from year end 2018. Total PCI loans were $32.5 million at December 31, 2019 versus $38.3 million at year end 2018.

Construction and land development loans increased by the largest dollar amount during 2019, $26.2 million, or 21.7%, and were $146.6 million at December 31, 2019, or 13.9% of total loans. Commercial mortgage loans, the largest category of loans, grew by $17.0 million during 2019 and were $396.9 million at December 31, 2019, or 37.5% of total loans. Multifamily loans grew by $13.4 million during 2019 and were $73.0 million, or 6.9% of total loans. Residential 1 – 4 family loans grew $7.3 million during 2019 and were $223.5 million, or 21.1% of total loans at year end 2019. Commercial loans, 18.1% of total loans, were $191.2 million at December 31, 2019 and grew by $2.5 million during 2019.

The Company's securities portfolio, excluding restricted equity securities, decreased $26.1 million, or 10.5%, since year end 2018, to $222.7 million at December 31, 2019. State, county and municipal bonds, 55.8% of total securities, decreased $20.3 million during the year and totaled $124.3 million at December 31, 2019. Gains on securities transactions, net totaled $235,000 during 2019 compared with $70,000 in 2018. The Company actively manages the portfolio to improve its liquidity and maximize the return within the desired risk profile.

The Company had cash and cash equivalents of $28.7 million at December 31, 2019 compared with $34.2 million at December 31, 2018. There were federal funds purchased of $24.4 million at December 31, 2019 and $19.4 million at December 31, 2018. Interest bearing bank deposits were $11.7 million at December 31, 2019 compared with $15.9 million at December 31, 2018. Cash and due from banks was $17.0 million at December 31, 2019 compared with $18.3 million at December 31, 2018.

Interest bearing deposits at December 31, 2019 were $984.9 million, a decrease of $15.0 million, or 1.5%, from December 31, 2018. Time deposits over $250,000 declined by $9.5 million and were $119.5 million at December 31, 2019. Time deposits less than or equal to $250,000 decreased $7.7 million and totaled $477.5 million at December 31, 2019. Money market deposit accounts, $120.8 million at December 31, 2019, decreased by $6.1 million during 2019. Offsetting these decreases to interest bearing deposits was an increase of $4.6 million in NOW accounts and an increase of $3.7 million in savings accounts.

FHLB borrowings were $68.5 million at December 31, 2019, compared with $59.4 million at December 31, 2018.

Shareholders' equity was $155.5 million at December 31, 2019, an increase of $18.0 million, or 13.1%, from shareholders' equity of $137.5 million at December 31, 2018. Shareholders' equity to assets was 10.9% at December 31, 2019 compared with 9.9% at December 31, 2018.

Asset Quality – non-covered assets

The allowance for loan losses equaled 159.3% of nonaccrual loans at December 31, 2019, compared with 146.1% at September 30, 2019, 79.85% at June 30, 2019 and 94.6% at December 31, 2018. The ratio of nonperforming assets to loans and OREO was 0.92% at December 31, 2019, 1.01% at September 30, 2019, 1.17% at June 30, 2019 and 1.07% at December 31, 2018.

Capital Requirements

The Bank's ratio of total risk-based capital was 13.9% at December 31, 2019 compared with 13.3% at December 31, 2018. The tier 1 risk-based capital ratio was 13.2% at December 31, 2019 and 12.6% at December 31, 2018. The Bank's tier 1 leverage ratio was 11.0% at December 31, 2019 and 10.2% at December 31, 2018. All capital ratios exceed regulatory minimums to be considered well capitalized. BASEL III introduced the common equity tier 1 capital ratio, which was 13.2% at December 31, 2019 and 12.6% at December 31, 2018.

About Community Bankers Trust Corporation and Essex Bank

Community Bankers Trust Corporation is the holding company for Essex 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.

Additional information on the Bank is available on the Bank's website at www.essexbank.com. For information on Community Bankers Trust Corporation, please visit its website at www.cbtrustcorp.com.