Community Trust Bancorp, Inc. Announces Issuance of $59.5 Million in Trust Preferred Capital Securities and Redemption of Outsta
April 02 2007 - 6:04PM
Business Wire
Community Trust Bancorp, Inc. (Nasdaq: CTBI) announced today that
it issued $59.5 million in aggregate liquidation amount of capital
securities in a private placement to institutional investors
through a Delaware statutory trust subsidiary. The capital
securities, which mature in 30 years but are redeemable at par at
the Company's option after five years, require quarterly payments
to the holders of the capital securities at a rate of 6.52% until
June 1, 2012, and thereafter at a floating rate based on the
three-month LIBOR. The proceeds of the capital securities were used
to fund the redemption on March 31, 2007 of all the Company's
outstanding 9.0% and 8.25% trust preferred securities in the total
amount of $59.5 million. The Company previously announced that it
expected to incur a pre-tax charge from unamortized debt issuance
costs of approximately $1.9 million in the first quarter of 2007 as
a result of the redemption of the trust preferred securities.
However, based on the Company's election to early adopt FASB
Statement No. 159 effective January 1, 2007, with respect to the
then-outstanding trust preferred securities, the Company will not
incur the pre-tax charge to earnings. Instead the unamortized debt
issuance costs were included in the cumulative effect adjustment
related to adopting FASB Statement No. 159 and were recorded to the
January 1, 2007 opening balance of retained earnings. The Company
estimates that the combined effect of the issuance of the capital
securities and the redemption of trust preferred securities will
reduce the Company's interest expense by approximately $1.1 million
in 2007 and $1.4 million annually thereafter through 2011.
Forward-Looking Statements Certain of the statements contained
herein that are not historical facts are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act.
The Company�s actual results may differ materially from those
included in the forward-looking statements. Forward-looking
statements are typically identified by words or phrases such as
"believe," "expect," "anticipate," "intend," "estimate," "may
increase," "may fluctuate," and similar expressions or future or
conditional verbs such as "will," "should," "would," and "could."
These forward-looking statements involve risks and uncertainties
including, but not limited to, economic conditions, portfolio
growth, the credit performance of the portfolios, including
bankruptcies, and seasonal factors; changes in general economic
conditions including the performance of financial markets, the
performance of coal and coal related industries, prevailing
inflation and interest rates, realized gains from sales of
investments, gains from asset sales, and losses on commercial
lending activities; results of various investment activities; the
effects of competitors� pricing policies, of changes in laws and
regulations on competition and of demographic changes on target
market populations� savings and financial planning needs; industry
changes in information technology systems on which we are highly
dependent; failure of acquisitions to produce revenue enhancements
or cost savings at levels or within the time frames originally
anticipated or unforeseen integration difficulties; the adoption by
the Company of an FFIEC policy that provides guidance on the
reporting of delinquent consumer loans and the timing of associated
credit charge-offs for financial institution subsidiaries; and the
resolution of legal proceedings and related matters. In addition,
the banking industry in general is subject to various monetary and
fiscal policies and regulations, which include those determined by
the Federal Reserve Board, the Federal Deposit Insurance
Corporation, and state regulators, whose policies and regulations
could affect the Company�s results. These statements are
representative only on the date hereof, and the Company undertakes
no obligation to update any forward-looking statements made.
Community Trust Bancorp, Inc., with assets of $3.0 billion, is
headquartered in Pikeville, Kentucky and has 74 banking locations
across eastern, northeast, central, and south central Kentucky,
five banking locations in southern West Virginia, and five trust
offices across Kentucky.
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