Community Bankers (ESXB) Misses Q1 EPS by 9c

Community Bankers (NASDAQ: ESXB) reported Q1 EPS of $0.06, $0.09 worse than the analyst estimate of $0.15.

OPERATING HIGHLIGHTS

• Provision for loan losses for the first quarter of 2020 was $3.3 million, which resulted in an allowance for loan losses to total loans of 1.10% at March 31, 2020, compared with 0.80% at December 31, 2019. The provision was the result of rapidly evolving uncertainties and potential effects of the coronavirus disease 2019 ("COVID-19").
• Loans, excluding purchased credit impaired (PCI) loans, grew $20.9 million, or 2.0%, since year end 2019.
• Deposits grew $57.6 million, or 5.0%, since year end 2019.
• Noninterest bearing deposits grew $22.6 million, or 13.6%, year over year.
• Net interest margin was 3.68% in the first quarter of 2020 compared with 3.74% in the fourth quarter of 2019 and 3.81% in the first quarter of 2019.
• Federal Home Loan Bank advances of $58.3 million decreased $10.2 million, or 14.8%, from year end.

MANAGEMENT COMMENTS

Rex L. Smith, III, President and Chief Executive Officer, stated, "The COVID-19 pandemic had an obvious impact on the results for the quarter, the largest of which was a prudent increase in the allowance for loan and lease losses as we try to anticipate the final effect of the economic and business disruption. But, amid this challenging situation, we have provided crucial and necessary services to all of our communities, both large and small. We continue our focus on meeting our customers' needs with superior service and flexibility that only a community bank could deliver in this environment. All of our branches have remained open with by appointment and full service drive-through options. Additionally, we have expanded the hours of our Customer Service Center to help in this time of need."

Smith added, "We also continue to work with our loan customers to provide payment relief on preexisting loans and to assist them through the CARES Act Payroll Protection Program. Helping our customers and our communities is the most important job we have, especially when we are in challenging times."

Smith continued, "Despite the large allowance expense, the Company had numerous positive metrics that will positively affect earnings once we turn the corner on the healthcare crisis. Loan and deposit growth for the quarter were strong and both noninterest income and noninterest expense showed improvement."

Smith concluded, "There will be more challenges ahead, but we have a strong capital position, a very experienced management team that has navigated through tough times before and a dedicated group of associates who are working harder than ever to meet the challenges our customers and communities face."

For earnings history and earnings-related data on Community Bankers (ESXB) click here.

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