Community Trust Bancorp, Inc. (NASDAQ: CTBI): � � � � � � �
Earnings Summary (in thousands except per share data) � 1Q 2007 �
4Q 2006 � 1Q 2006 Net income $ 8,022� $ 9,520� $ 9,768� Earnings
per share $ 0.53� $ 0.63� $ 0.65� Earnings per share (diluted) $
0.52� $ 0.62� $ 0.64� � Return on average assets 1.09% 1.28% 1.36%
Return on average equity 11.33% 13.45% 15.27% Efficiency ratio
64.68% 57.43% 58.21% � Dividends declared per share $ 0.27� $ 0.27�
$ 0.26� Book value per share $ 18.93� $ 18.63� $ 17.30� � Weighted
average shares 15,191� 15,154� 15,011� Weighted average shares
(diluted) � � 15,437� � � 15,417� � � 15,252� � Community Trust
Bancorp, Inc. (NASDAQ: CTBI) is pleased to report earnings for the
quarter ended March 31, 2007 of $8.0 million or $0.53 per basic
share compared to $9.5 million or $0.63 per share earned during the
quarter ended December 31, 2006 and $9.8 million or $0.65 per share
earned during the first quarter of 2006. First Quarter 2007
Highlights The Company had previously announced that it would elect
the early adoption of Statement of Financial Accounting Standards
("SFAS") No. 159. Upon review of emerging guidance, the Company has
determined that it is inappropriate for us to early adopt SFAS No.
159. Accordingly, the Company will not early adopt the standard. As
previously announced, the Company has refunded its trust preferred
securities and has incurred a pre-tax charge from unamortized debt
issuance costs of approximately $1.9 million in the first quarter
of 2007. The Company's basic earnings per share for the first
quarter 2007 decreased 15.9% from prior quarter and 18.5% from
prior year first quarter. In addition to the impact to earnings
discussed above, the Company has also experienced continuing
pressure on its net interest margin as time deposits have continued
repricing in the current stable rate environment. Period over
period earnings comparisons also reflect normal changes in our loan
loss provision as reserve adequacy is reviewed on a quarterly
basis. As anticipated by management, the Company's net interest
margin decreased 11 basis points from prior quarter and 20 basis
points from prior year first quarter as the Company continues
operating within the inverted yield curve environment. The
Company�s average earning assets for the quarter ended March 31,
2007 increased 1.7% over the quarter ended December 31, 2006 and
3.2% from the quarter ended March 31, 2006. The Company's
investment portfolio increased an annualized 10.6% from prior
quarter but decreased 9.1% from March 31, 2006. The Company's loan
portfolio grew at an annualized rate of 0.8% during the quarter and
3.3% from March 31, 2006. Nonperforming loans as a percentage of
total loans at March 31, 2007 were 0.83% of total loans, an
increase of $3.7 over prior quarter and a $2.0 million increase
from same period prior year. The increase in nonperforming loans is
primarily in smaller commercial loans with collateral. These loans
are reviewed for impairment and specific reserves are established
when appropriate. Return on average assets for the quarter ended
March 31, 2007 was 1.09% compared to 1.28% and 1.36% for prior
quarter and prior year first quarter, respectively. Our return on
average shareholders' equity for the quarter ended March 31, 2007
was 11.33% compared to 13.45% for the fourth quarter 2006 and
15.27% for the first quarter 2006. CTBI's efficiency ratio for the
quarter was 64.68% compared to 57.43% and 58.21% for prior quarter
and prior year first quarter, respectively. Net Interest Income As
interest rates have stabilized, our net interest margin has
continued to compress as expected. Our net interest margin for the
first quarter 2007 was 3.84% compared to 3.95% for the fourth
quarter 2006 and 4.04% for the first quarter 2006. Net interest
income decreased 3.2% from prior quarter and 1.8% from prior year.
Average earning assets increased to $2.8 billion from $2.7 billion
for the quarters ended December 31, 2006 and March 31, 2006,
respectively. Average earning assets as a percentage of total
assets of 92.7% have remained relatively stable compared to prior
quarter and prior year first quarter of 92.4% and 92.3%
respectively. Noninterest Income Noninterest income for the quarter
was a decrease of 0.9% from the quarter ended December 31, 2006,
but an increase of 9.8% from prior year first quarter. The
increases in loan related fees and trust revenue from prior quarter
were offset by decreases in deposit service charges and
nonrecurring revenue items. Noninterest Expense Noninterest expense
increased 9.7% over prior quarter and 12.0% over prior year first
quarter as a result of the charge from unamortized debt issuance
costs with the redemption of trust preferred securities. Balance
Sheet Review The Company�s total assets grew $129 million or 4.3%
from prior quarter and prior year first quarter. The growth in
assets included $59.5 million in temporary funds related to a
timing difference with the refinance of our trust preferred capital
securities. Loans outstanding at March 31, 2007 were $2.2 billion
reflecting a $4.0 million, annualized 0.8%, increase during the
quarter. Deposits, including repurchase agreements, increased $58.7
million, an annualized 9.5%, during the quarter. The growth in
deposits after funding of loans resulted in an increase in our
investment portfolio of $12.9 million during the quarter, and
federal funds sold increased $130.4 million, including the $59.5
million discussed above. Shareholders� equity of $287.8 million on
March 31, 2007 was an annualized increase of 7.8% from the $282.4
million on December 31, 2006 and a 10.8% increase from the $259.8
million on March 31, 2006. Asset Quality Nonperforming loans at
March 31, 2007 were $17.9 million compared to $14.2 million at
December 31, 2006 and $16.0 million at March 31, 2006. The increase
in nonperforming loans was primarily smaller commercial loans with
collateral that are individually reviewed with specific reserves
established when appropriate. Foreclosed properties at March 31,
2007 of $3.5 million are a $1.0 million decrease from the $4.5
million on December 31, 2006 and a $1.5 million decrease from the
$5.0 million on March 31, 2006. Net loan charge-offs for the
quarter of $0.9 million, or 0.17% of average loans annualized, was
a decrease of 45.3% from prior quarter and 33.5% from prior year
first quarter. Reflective of the improvement in net charge-offs,
our reserve for losses on loans as a percentage of total loans
outstanding at March 31, 2007 decreased to 1.25% from the 1.27% at
December 31, 2006 and the 1.34% at March 31, 2006. 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 $3.1 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. Additional information follows. Community
Trust Bancorp, Inc. Financial Summary (Unaudited) March 31, 2007
(in thousands except per share data) � Three Months Ended Three
Months Ended Three Months Ended March 31, 2007 December 31, 2006
March 31, 2006 Interest income $ 49,179� $ 49,234� $ 44,388�
Interest expense 23,289� 22,496� 18,031� Net interest income
25,890� 26,738� 26,357� Loan loss provision 470� 1,200� -� � Gains
on sales of loans 296� 380� 304� Deposit service charges 4,804�
5,081� 4,552� Trust revenue 1,199� 1,074� 881� Loan related fees
1,021� 700� 624� Other noninterest income 1,178� 1,337� 1,382�
Total noninterest income 8,498� 8,572� 7,743� � Personnel expense
11,114� 11,607� 10,965� Occupancy and equipment 2,989� 2,779�
2,986� Amortization of core deposit intangible 159� 158� 159� Other
noninterest expense 8,234� 5,962� 5,967� Total noninterest expense
22,496� 20,506� 20,077� � Net income before taxes 11,422� 13,604�
14,023� Income taxes 3,400� 4,084� 4,255� Net income $ 8,022� $
9,520� $ 9,768� � Memo: TEQ interest income $ 49,571� $ 49,631� $
44,778� � Average shares outstanding 15,191� 15,154� 15,011� Basic
earnings per share $ 0.53� $ 0.63� $ 0.65� Diluted earnings per
share $ 0.52� $ 0.62� $ 0.64� Dividends per share $ 0.27� $ 0.27� $
0.26� � Average balances: Loans, net of unearned income $
2,165,510� $ 2,160,249� $ 2,096,842� Earning assets 2,774,634�
2,727,043� 2,687,976� Total assets 2,994,557� 2,951,213� 2,912,275�
Deposits 2,358,675� 2,328,294� 2,274,582� Interest bearing
liabilities 2,260,472� 2,220,325� 2,186,119� Shareholders' equity
287,218� 280,707� 259,398� � Performance ratios: Return on average
assets 1.09% 1.28% 1.36% Return on average equity 11.33% 13.45%
15.27% Yield on average earning assets (tax equivalent) 7.25% 7.22%
6.76% Cost of interest bearing funds (tax equivalent) 4.18% 4.02%
3.34% Net interest margin (tax equivalent) 3.84% 3.95% 4.04%
Efficiency ratio (tax equivalent) 64.68% 57.43% 58.21% � Loan
charge-offs $ 1,650� $ 2,413� $ 2,361� Recoveries (731) (733) (979)
Net charge-offs $ 919� $ 1,680� $ 1,382� � Market Price: High $
41.50� $ 42.59� $ 35.90� Low 33.87� 36.51� 30.60� Close 36.23�
41.53� 33.90� � Community Trust Bancorp, Inc. Financial Summary
(Unaudited) March 31, 2007 (in thousands except per share data) �
As of As of As of March 31, 2007 December 31, 2006 March 31, 2006
Assets: � Loans, net of unearned $ 2,171,484� $ 2,167,458� $
2,101,236� Loan loss reserve (27,077) (27,526) (28,124) Net loans
2,144,407� 2,139,932� 2,073,112� Loans held for sale 893� 1,431�
1,367� Securities AFS 440,587� 425,851� 484,323� Securities HTM
38,655� 40,508� 46,690� Other equity investments 28,032� 28,027�
26,999� Other earning assets 195,968� 65,043� 78,307� Cash and due
from banks 78,324� 94,336� 83,804� Premises and equipment 55,148�
55,665� 57,695� Goodwill and core deposit intangible 67,452�
67,610� 66,550� Other assets 49,320� 51,358� 50,787� Total Assets $
3,098,786� $ 2,969,761� $ 2,969,634� � � Liabilities and Equity:
NOW accounts $ 14,910� $ 18,107� $ 19,762� Savings deposits
698,783� 669,263� 634,302� CD's >=$100,000 447,914� 438,080�
417,464� Other time deposits 796,402� 785,723� 775,094� Total
interest bearing deposits 1,958,009� 1,911,173� 1,846,622�
Noninterest bearing deposits 435,023� 429,994� 463,169� Total
deposits 2,393,032� 2,341,167� 2,309,791� Repurchase agreements
168,441� 161,630� 161,538� Other interest bearing liabilities
219,614� 158,526� 216,051� Noninterest bearing liabilities 29,901�
26,063� 22,422� Total liabilities 2,810,988� 2,687,386� 2,709,802�
Shareholders' equity 287,798� 282,375� 259,832� Total Liabilities
and Equity $ 3,098,786� $ 2,969,761� $ 2,969,634� � Ending shares
outstanding 15,203� 15,158� 15,015� Memo: Market value of HTM
securities $ 37,371� $ 39,015� $ 44,531� � 90 days past due loans $
4,270� $ 4,294� $ 4,148� Nonaccrual loans 13,605� 9,863� 11,072�
Restructured loans 55� 66� 733� Foreclosed properties 3,514� 4,524�
4,962� � Tier 1 leverage ratio 9.62% 9.58% 9.01% Tier 1 risk based
ratio 12.11% 12.21% 11.28% Total risk based ratio 13.28% 13.43%
12.52% FTE employees 1,014� 1,021� 1,007� � Community Trust
Bancorp, Inc. Financial Summary (Unaudited) March 31, 2007 (in
thousands except per share data) � Community Trust Bancorp, Inc.
reported earnings for the three months ending March 31, 2007 and
2006 as follows: � � Three Months Ended March 31 2007� 2006� � � �
Net income $ 8,022� $ 9,768� � Basic earnings per share $ 0.53� $
0.65� � Diluted earnings per share $ 0.52� $ 0.64� � Average shares
outstanding 15,191� 15,011� � Total assets (end of period) $
3,098,786� $ 2,969,634� � Return on average equity 11.33% 15.27% �
Return on average assets 1.09% 1.36% � Provision for loan losses $
470� $ -� � Gains on sales of loans $ 296� $ 304�
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