Community Trust Bancorp, Inc. (NASDAQ:CTBI):
Earnings Summary (in thousands except per share data)
3Q
2012
2Q
2012
3Q
2011
9 Months
2012
9 Months
2011
Net income $10,209 $12,232 $10,665 $34,310 $28,939 Earnings per
share $0.66 $0.79 $0.70 $2.22 $1.89 Earnings per share - diluted
$0.66 $0.79 $0.70 $2.21 $1.89 Return on average assets 1.11%
1.35% 1.20% 1.26% 1.11% Return on average equity 10.26% 12.77%
11.75% 11.89% 10.99% Efficiency ratio 58.19% 54.94% 58.10% 56.95%
60.25% Tangible common equity 9.22% 8.99% 8.44% 9.22% 8.44%
Dividends declared per share $0.315 $0.310 $0.310 $0.935 $0.920
Book value per share $25.38 $24.88 $23.44 $25.38 $23.44
Weighted average shares 15,491 15,451 15,318 15,450 15,307 Weighted
average shares - diluted 15,555 15,501
15,339 15,501 15,331
Community Trust Bancorp, Inc. (NASDAQ:CTBI) reports earnings for
the third quarter 2012 of $10.2 million, or $0.66 per basic share,
compared to $10.7 million, or $0.70 per basic share, earned during
the third quarter 2011 and $12.2 million, or $0.79 per basic share,
earned during the second quarter 2012. Earnings for the nine months
ended September 30, 2012 were $34.3 million, or $2.22 per basic
share, a 18.6% increase from the $28.9 million, or $1.89 per basic
share earned during the first nine months of 2011.
3rd Quarter 2012 Highlights
- CTBI's basic earnings per share for the
quarter decreased $0.04 per share from third quarter 2011 and $0.13
per share from second quarter 2012. Year-to-date basic earnings per
share, however, increased $0.33 per share from prior year. The
year-to-date increase in earnings was supported by increased
noninterest income and decreased provision for loan loss and
noninterest expense.
- Net interest income for the quarter
decreased slightly from prior year third quarter but increased $0.7
million from prior quarter as our net interest margin declined 15
basis points and increased 3 basis points, respectively, for those
time periods. Year-to-date net interest income decreased $0.2
million as our net interest margin declined 20 basis points.
- Nonperforming loans at $34.0 million
decreased $3.5 million from September 30, 2011 and $1.3 million
from June 30, 2012. Nonperforming assets at $89.6 million decreased
$6.0 million from prior year and $1.6 million from prior
quarter.
- Net loan charge-offs for the quarter
ended September 30, 2012 were $2.9 million, or 0.45% of average
loans annualized, compared to $2.7 million, or 0.41%, experienced
for the third quarter 2011 and prior quarter’s $2.5 million, or
0.39%. Year-to-date net charge-offs for the nine months ended
September 30, 2012 were $6.5 million compared to $10.0 million for
the nine months ended September 30, 2011.
- Our loan loss provision for the quarter
increased $0.4 million from prior year third quarter and $0.5
million from prior quarter. Our loan loss provision for the first
nine months of 2012 was $3.7 million below the first nine months of
2011 as net charge-offs declined $3.5 million and loans declined
$22.0 million.
- Our loan loss reserve as a percentage
of total loans outstanding remained at 1.30% from June 30, 2012 to
September 30, 2012, a decrease from the 1.36% at September 30,
2011. Our reserve coverage (allowance for loan loss reserve to
nonperforming loans) at September 30, 2012 was 97.5% compared to
93.3% at September 30, 2011 and 93.8% at June 30, 2012.
- Noninterest income decreased 0.9% for
the quarter ended September 30, 2012 compared to the same period in
2011 and 9.6% from prior quarter. However, noninterest income for
the first nine months of 2012 has increased 5.4% as a result of
increased gains on sales of loans, trust revenue, and loan related
fees, as well as a $0.8 million net securities gain in the second
quarter.
- Noninterest expense for the quarter
ended September 30, 2012 decreased slightly from prior year third
quarter but increased 6.9% from prior quarter. Year-to-date
noninterest expense decreased 4.8% from prior year as a result of
decreases in FDIC insurance premiums, legal fees, other real estate
owned expense, and repossession expense, partially offset by an
increase in personnel expense.
- Our loan portfolio decreased $22.0
million from prior year but increased $4.1 million during the
quarter.
- Our investment portfolio increased
$157.6 million from prior year but decreased $8.0 million during
the quarter.
- Deposits, including repurchase
agreements, increased $92.5 million from prior year but declined
$12.2 million from prior quarter.
- Our tangible common equity/tangible
assets ratio remains strong at 9.22%.
Net Interest Income
Net interest income for the quarter decreased slightly from
prior year but increased $0.7 million from prior quarter with
average earning assets increasing 4.3% and 0.5% and our net
interest margin declining 15 basis points and increasing 3 basis
points for the same periods. The yield on average earning assets
decreased 33 basis points from prior year third quarter and 6 basis
points from prior quarter. Loans represented 75.4% of our average
earning assets for the quarter ended September 30, 2012 compared to
79.7% for the quarter ended September 30, 2011 and 75.8% for the
quarter ended June 30, 2012. The cost of interest bearing funds
decreased 21 basis points from prior year third quarter and 10
basis points from prior quarter. Net interest income for the first
nine months of 2012 decreased 0.2% as our net interest margin
declined 20 basis points and average earning assets increased 5.0%.
The increased cost of our Hoops CD product resulting from the
University of Kentucky’s national championship win increased our
cost of interest bearing funds and decreased our net interest
margin by approximately 7 basis points during the second quarter
and 6 basis points in the third quarter 2012. The fourth quarter
2012 impact is expected to be 2 basis points as the CDs begin to
mature. The impact to the net interest margin for the year 2012 as
a result of the rate increase is expected to be approximately 4
basis points.
Noninterest Income
Noninterest income decreased 0.9% for the quarter ended
September 30, 2012 compared to the same period in 2011 and 9.6%
from prior quarter. Noninterest income for the first nine months of
2012 has increased 5.4% as a result of increased gains on sales of
loans, trust revenue, and loan related fees, partially offset by a
decline in deposit service charges. Loan related fees were impacted
by $0.5 million in adjustments to the fair value of our mortgage
servicing rights for the first nine months of the year. Noninterest
income was also impacted by a $0.8 million net securities gain in
the second quarter 2012.
Noninterest Expense
Noninterest expense decreased slightly from prior year third
quarter but increased 6.9% from prior quarter primarily due to an
increase in the incentive compensation accrual and other real
estate owned expense. Year-to-date noninterest expense decreased
4.8% from prior year as a result of decreases in FDIC insurance
premiums, legal fees, other real estate owned expense, and
repossession expense, partially offset by an increase in personnel
expense.
Balance Sheet Review
CTBI’s total assets at $3.6 billion increased $84.9 million, or
2.4%, from September 30, 2011 and $5.8 million, or an annualized
0.6%, during the quarter. Loans outstanding at September 30, 2012
were $2.6 billion, decreasing $22.0 million, or 0.9%, from
September 30, 2011, but increasing $4.1 million, or an annualized
0.6%, during the quarter. Loan growth during the quarter of $2.6
million in the commercial loan portfolio and $14.1 million in the
residential loan portfolio was partially offset by a decline of
$12.5 million in the consumer loan portfolio, primarily in our
indirect auto lending area. CTBI's investment portfolio increased
$157.6 million, or 33.9%, from September 30, 2011 but decreased
$8.0 million, or an annualized 5.1%, during the quarter. Deposits,
including repurchase agreements, at $3.1 billion increased $92.5
million, or 3.0%, from September 30, 2011 but decreased $12.2
million, or an annualized 1.5%, from prior quarter.
Shareholders’ equity at September 30, 2012 was $396.1 million
compared to $361.3 million at September 30, 2011 and $387.3 million
at June 30, 2012. CTBI's annualized dividend yield to shareholders
as of September 30, 2012 was 3.55%.
Asset Quality
CTBI's total nonperforming loans were $34.0 million at September
30, 2012, a 9.3% decrease from the $37.5 million at September 30,
2011 and a 3.6% decrease from the $35.3 million at June 30, 2012.
The decrease for the quarter included a $2.4 million decrease in
nonaccrual loans partially offset by a $1.1 million increase in the
90+ days past due category. Loans 30-89 days past due at $21.5
million is a decline of $4.6 million from September 30, 2011 but a
$4.5 million increase from prior quarter. Our loan portfolio
management processes focus on the immediate identification,
management, and resolution of problem loans to maximize recovery
and minimize loss. Impaired loans, loans not expected to meet
contractual principal and interest payments other than
insignificant delays, at September 30, 2012 totaled $60.9 million,
compared to $56.0 million at September 30, 2011 and $64.4 million
at June 30, 2012.
Our level of foreclosed properties at $55.6 million at September
30, 2012 was a decrease from $58.0 million at September 30, 2011
and $55.9 million at June 30, 2012. Sales of foreclosed properties
for the nine months ended September 30, 2012 totaled $11.0 million
while new foreclosed properties totaled $10.7 million. At September
30, 2012, the book value of properties under contracts to sell was
$7.3 million; however, the closings had not occurred at
quarter-end.
Net loan charge-offs for the quarter were $2.9 million, or 0.45%
of average loans annualized, compared to prior year third quarter's
$2.7 million, or 0.41%, and prior quarter’s $2.5 million, or 0.39%.
Of the total net charge-offs for the quarter, $1.7 million were in
commercial loans, $0.5 million were in indirect auto loans, and
$0.4 million were in residential real estate mortgage loans.
Allocations to loan loss reserves were $2.9 million for the quarter
ended September 30, 2012 compared to $2.5 million for the quarter
ended September 30, 2011 and $2.4 million for the quarter ended
June 30, 2012. Year-to-date net charge-offs of $6.5 million, or
0.34% of average loans annualized, was a $3.5 million decrease from
the $10.0 million, 0.52% of average loans annualized, for the nine
months ended September 30, 2011. Our loan loss reserve as a
percentage of total loans outstanding was 1.30% at September 30,
2012 and June 30, 2012 compared to 1.36% at September 30, 2011. Our
reserve coverage was 97.5% at September 30, 2012.
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. CTBI’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
CTBI 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 CTBI’s results. These statements are representative
only on the date hereof, and CTBI undertakes no obligation to
update any forward-looking statements made.
Community Trust Bancorp, Inc., with assets of $3.6 billion, is
headquartered in Pikeville, Kentucky and has 71 banking locations
across eastern, northeastern, central, and south central Kentucky,
six banking locations in southern West Virginia, four banking
locations in northeastern Tennessee, four trust offices across
Kentucky, and one trust office in Tennessee.
Additional information follows.
Community Trust Bancorp, Inc. Financial Summary
(Unaudited) September 30, 2012 (in thousands except per
share data and # of employees)
Three Three Three Nine Nine Months Months Months Months
Months Ended Ended Ended Ended Ended September 30, 2012 June 30,
2012 September 30, 2011 September 30, 2012 September 30, 2011
Interest income $ 38,450 $ 38,355 $ 39,708 $ 115,631 $ 119,409
Interest expense 5,404 6,036
6,613 17,260 20,862 Net interest
income 33,046 32,319 33,095 98,371 98,547 Loan loss provision 2,919
2,425 2,515 6,504 10,222 Gains on sales of loans 660 705 438
1,982 1,166 Deposit service charges 6,038 5,955 6,681 17,865 18,999
Trust revenue 1,734 1,822 1,597 5,169 4,790 Loan related fees 631
610 250 2,528 1,609 Securities gains - 819 - 819 - Other
noninterest income 1,775 2,078
1,976 5,651 5,709 Total
noninterest income 10,838 11,989 10,942 34,014 32,273
Personnel expense 13,285 12,402 12,240 38,500 37,041 Occupancy and
equipment 2,926 2,854 3,021 8,551 8,824 FDIC insurance premiums 643
613 591 1,913 2,554 Amortization of core deposit intangible 53 54
53 160 160 Other noninterest expense 8,906
8,225 9,922 26,587 30,941
Total noninterest expense 25,813 24,148
25,827 75,711 79,520
Net income before taxes 15,152 17,735 15,695 50,170
41,078 Income taxes 4,943 5,503
5,030 15,860 12,139 Net income $
10,209 $ 12,232 $ 10,665 $ 34,310 $
28,939 Memo: TEQ interest income $ 38,922 $ 38,821 $
40,122 $ 117,007 $ 120,569 Average shares outstanding 15,491
15,451 15,318 15,450 15,307 Diluted average shares outstanding
15,555 15,501 15,339 15,501 15,331 Basic earnings per share $ 0.66
$ 0.79 $ 0.70 $ 2.22 $ 1.89 Diluted earnings per share $ 0.66 $
0.79 $ 0.70 $ 2.21 $ 1.89 Dividends per share $ 0.315 $ 0.310 $
0.310 $ 0.935 $ 0.920
Average balances: Loans $
2,542,832 $ 2,542,344 $ 2,577,585 $ 2,547,890 $ 2,585,172 Earning
assets 3,371,420 3,355,155 3,232,322 3,348,807 3,188,404 Total
assets 3,650,422 3,647,002 3,516,394 3,635,890 3,470,311 Deposits
2,940,138 2,940,244 2,819,166 2,926,848 2,791,900 Interest bearing
liabilities 2,611,981 2,625,760 2,542,397 2,614,379 2,522,441
Shareholders' equity 395,902 385,231 360,273 385,526 352,208
Performance ratios: Return on average assets 1.11 % 1.35 %
1.20 % 1.26 % 1.11 % Return on average equity 10.26 % 12.77 % 11.75
% 11.89 % 10.99 % Yield on average earning assets (tax equivalent)
4.59 % 4.65 % 4.92 % 4.67 % 5.06 % Cost of interest bearing funds
(tax equivalent) 0.82 % 0.92 % 1.03 % 0.88 % 1.11 % Net interest
margin (tax equivalent) 3.96 % 3.93 % 4.11 % 3.98 % 4.18 %
Efficiency ratio (tax equivalent) 58.19 % 54.94 % 58.10 % 56.95 %
60.25 % Loan charge-offs $ 3,664 $ 3,207 $ 3,360 $ 8,997 $
12,088 Recoveries (800 ) (744 ) (692 )
(2,511 ) (2,060 ) Net charge-offs $ 2,864 $ 2,463 $ 2,668 $
6,486 $ 10,028
Market Price: High $ 36.92 $ 33.68 $
28.82 $ 36.92 $ 30.35 Low 33.15 30.25 22.64 29.13 22.64 Close 35.53
33.49 23.29 35.53 23.29
Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
September 30, 2012
(in thousands except per share data and #
of employees)
As of As of As of September 30, 2012 June 30, 2012 September
30, 2011
Assets: Loans $ 2,551,537 $ 2,547,436 $ 2,573,557
Loan loss reserve (33,189 ) (33,134 ) (34,999
) Net loans 2,518,348 2,514,302 2,538,558 Loans held for sale 771
1,040 826 Securities AFS 621,230 629,242 463,610 Securities HTM
1,662 1,662 1,662 Other equity investments 30,558 30,557 30,556
Other earning assets 153,663 130,282 192,300 Cash and due from
banks 59,480 71,010 73,236 Premises and equipment 55,068 54,855
55,168 Goodwill and core deposit intangible 66,447 66,500 66,660
Other assets 134,304 136,277
134,085
Total Assets $ 3,641,531 $ 3,635,727
$ 3,556,661
Liabilities and Equity: NOW
accounts $ 22,200 $ 18,970 $ 19,701 Savings deposits 848,068
861,211 734,660 CD's >=$100,000 647,433 646,243 631,991 Other
time deposits 794,159 803,211
820,409 Total interest bearing deposits 2,311,860 2,329,635
2,206,761 Noninterest bearing deposits 599,984
611,080 602,061 Total deposits 2,911,844
2,940,715 2,808,822 Repurchase agreements 218,511 201,850 229,000
Other interest bearing liabilities 71,634 70,845 99,344 Noninterest
bearing liabilities 43,445 34,984
58,217 Total liabilities 3,245,434 3,248,394
3,195,383 Shareholders' equity 396,097 387,333
361,278
Total Liabilities and Equity $
3,641,531 $ 3,635,727 $ 3,556,661
Ending shares outstanding 15,604 15,569 15,415 Memo: Market value
of HTM securities $ 1,664 $ 1,662 $ 1,663 30 - 89 days past
due loans $ 21,539 $ 17,067 $ 26,177 90 days past due loans 15,928
14,811 9,543 Nonaccrual loans 18,098 20,500 27,986 Restructured
loans (excluding 90 days past due and nonaccrual) 22,745 22,532
21,347 Foreclosed properties 55,551 55,884 58,004 Other repossessed
assets 25 34 58 Tier 1 leverage ratio 10.51 % 10.32 % 10.00
% Tier 1 risk based ratio 14.86 % 14.54 % 13.65 % Total risk based
ratio 16.12 % 15.82 % 14.92 % Tangible equity to tangible assets
ratio 9.22 % 8.99 % 8.44 % FTE employees 1,032 1,034 1,019
Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
September 30, 2012
(in thousands except per share data and #
of employees)`
Community Trust Bancorp, Inc. reported earnings for the
three and nine months ending September 30, 2012 and 2011 as
follows: Three Months Ended Nine
Months Ended
September 30 September 30
2012 2011 2012 2011 Net income $ 10,209 $ 10,665 $ 34,310 $ 28,939
Basic earnings per share $ 0.66 $ 0.70 $ 2.22 $ 1.89
Diluted earnings per share $ 0.66 $ 0.70 $ 2.21 $ 1.89
Average shares outstanding 15,491 15,318 15,450 15,307 Total
assets (end of period) $ 3,641,531 $ 3,556,661 Return on
average equity 10.26 % 11.75 % 11.89 % 10.99 % Return on
average assets 1.11 % 1.20 % 1.26 % 1.11 % Provision for
loan losses $ 2,919 $ 2,515 $ 6,504 $ 10,222 Gains on sales
of loans $ 660 $ 438 $ 1,982 $ 1,166
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