Community Trust Bancorp, Inc. (NASDAQ: CTBI):
Earnings
Summary
(in thousands except per share data)
4Q
2012
3Q
2012
4Q
2011
Year
2012
Year
2011
Net income $10,552 $10,209 $9,888 $44,862 $38,827 Earnings
per share $0.68 $0.66 $0.64 $2.90 $2.54 Earnings per share –
diluted $0.68 $0.66 $0.64 $2.89 $2.53 Return on average
assets 1.15% 1.11% 1.09% 1.23% 1.11% Return on average equity
10.47% 10.26% 10.71% 11.52% 10.91% Efficiency ratio 60.75% 58.19%
60.15% 57.93% 60.23% Tangible common equity 9.36% 9.22% 8.52% 9.36%
8.52% Dividends declared per share $0.315 $0.315 $0.310
$1.25 $1.23 Book value per share $25.64 $25.38 $23.78 $25.64 $23.78
Weighted average shares 15,516 15,491 15,332 15,466 15,313
Weighted average shares – diluted 15,572
15,555 15,384 15,521
15,364
Community Trust Bancorp, Inc. (NASDAQ: CTBI) reports earnings
for the fourth quarter 2012 of $10.6 million, or $0.68 per basic
share, compared to $9.9 million, or $0.64 per basic share, earned
during the fourth quarter 2011 and $10.2 million, or $0.66 per
basic share, earned during the third quarter 2012. Earnings for the
year ended December 31, 2012 were $44.9 million, or $2.90 per basic
share, a 15.5% increase from the $38.8 million, or $2.54 per basic
share earned during the year 2011.
4th Quarter and Year 2012 Highlights
- CTBI’s basic earnings per share for the
quarter increased $0.04 per share from the fourth quarter 2011 and
$0.02 per share from the third quarter 2012. Basic earnings per
share for the year 2012 increased $0.36 per share from prior year.
The increase in earnings from prior year was supported by increased
net interest income and noninterest income and decreased provision
for loan loss and noninterest expense.
- Net interest income for the quarter
increased 2.6% from prior year fourth quarter and 2.2% from prior
quarter as our net interest margin increased 5 basis points and 7
basis points, respectively, for those time periods. Net interest
income for the year increased 0.5% while our net interest margin
declined 14 basis points.
- Nonperforming loans at $36.0 million
decreased $1.3 million from December 31, 2011 but increased $2.0
million from September 30, 2012. Nonperforming assets at $83.0
million decreased $10.9 million from prior year and $6.6 million
from prior quarter.
- Net loan charge-offs for both of the
quarters ended December 31, 2012 and September 30, 2012 were $2.9
million, or 0.45% of average loans annualized, compared to $4.9
million, or 0.75%, experienced for the fourth quarter 2011. Net
charge-offs for the year 2012 were $9.4 million compared to $14.9
million for the year 2011.
- Our loan loss provision for the quarter
decreased $0.09 million from prior year fourth quarter and $0.03
million from prior quarter. Our loan loss provision for the year
2012 was $3.8 million below 2011 as net charge-offs declined $5.5
million and loans declined $6.0 million.
- Our loan loss reserve as a percentage
of total loans outstanding remained at 1.30% from December 31, 2011
to December 31, 2012. Our reserve coverage (allowance for loan loss
reserve to nonperforming loans) at December 31, 2012 was 92.3%
compared to 89.0% at December 31, 2011 and 97.5% at September 30,
2012.
- Noninterest income increased 3.3% for
the quarter ended December 31, 2012 compared to the same period in
2011 and 10.2% from prior quarter. Noninterest income for the year
2012 has increased 4.8% as a result of increased gains on sales of
loans, trust revenue, and loan related fees, as well as a $1.0
million increase in net securities gains.
- Noninterest expense for the quarter
ended December 31, 2012 increased from prior year fourth quarter
and prior quarter, primarily as a result of increased personnel
expense associated with the employee incentive accrual. Noninterest
expense for the year decreased 2.7% 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 $6.0
million from prior year and $1.0 million during the quarter.
- Our investment portfolio increased
$75.9 million from prior year but decreased $17.9 million during
the quarter.
- Deposits, including repurchase
agreements, increased $18.4 million from prior year but declined
$16.4 million from prior quarter.
- Our tangible common equity/tangible
assets ratio remains strong at 9.36%.
Net Interest Income
Net interest income for the quarter increased $0.9 million from
prior year and $0.7 million from prior quarter with average earning
assets increasing 1.9% and 0.3% and our net interest margin
increasing 5 basis points and 7 basis points for the same periods.
The yield on average earning assets decreased 19 basis points from
prior year fourth quarter and 6 basis points from prior quarter.
Loans represented 75.5% of our average earning assets for the
quarter ended December 31, 2012 compared to 77.3% for the quarter
ended December 31, 2011 and 75.4% for the quarter ended September
30, 2012. The cost of interest bearing funds decreased 28 basis
points from prior year fourth quarter and 16 basis points from
prior quarter. Net interest income for the year 2012 increased $0.7
million as our net interest margin declined 14 basis points and
average earning assets increased 4.2%. 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 2
basis points during the fourth quarter 2012, approximately 6 basis
points during the third quarter 2012, and approximately 4 basis
points for the year.
Noninterest Income
Noninterest income increased 3.3% for the fourth quarter 2012
compared to the fourth quarter 2011 and 10.2% from prior quarter,
primarily as a result of increased loan related fees. Noninterest
income for the year 2012 has increased 4.8% 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 a $0.8 million variance year
over year in adjustments to the fair value of our mortgage
servicing rights, as well as the receipt of a $0.4 million
commercial loan prepayment penalty. Noninterest income was also
impacted by $1.2 million in net securities gains for the year 2012
compared to $0.2 million for the year 2011.
Noninterest Expense
Noninterest expense for the fourth quarter 2012 increased from
prior year fourth quarter and prior quarter, primarily as a result
of increased personnel expense associated with the employee
incentive accrual. Noninterest expense for the year decreased 2.7%
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 $44.5 million, or
1.2%, from December 31, 2011 but declined $5.9 million, or an
annualized 0.6%, during the quarter. Loans outstanding at December
31, 2012 were $2.6 billion, decreasing $6.0 million, or 0.2%, from
December 31, 2011 and $1.0 million, or an annualized 0.2%, during
the quarter. Loan growth during the year of $8.5 million in the
commercial loan portfolio and $45.8 million in the residential loan
portfolio was offset by a decline of $60.3 million in the consumer
loan portfolio, primarily in our indirect auto lending area. CTBI’s
investment portfolio increased $75.9 million, or 14.4%, from
December 31, 2011 but decreased $17.9 million, or an annualized
11.4%, during the quarter. Deposits, including repurchase
agreements, at $3.1 billion increased $18.4 million, or 0.6%, from
December 31, 2011 but decreased $16.4 million, or an annualized
2.1%, from prior quarter.
Shareholders’ equity at December 31, 2012 was $400.3 million
compared to $366.9 million at December 31, 2011 and $396.1 million
at September 30, 2012. CTBI’s annualized dividend yield to
shareholders as of December 31, 2012 was 3.84%.
Asset Quality
CTBI’s total nonperforming loans were $36.0 million at December
31, 2012, a 3.4% decrease from the $37.3 million at December 31,
2011 but a 5.8% increase from the $34.0 million at September 30,
2012. The increase for the quarter included a $3.3 million increase
in the 90+ days past due category partially offset by a $1.3
million decrease in nonaccrual loans. The increase in the 90+ past
due loans is made up of various commercial loans that are
considered to be well secured and in the process of collection.
Loans 30-89 days past due at $27.0 million is an increase of $5.3
million from December 31, 2011 and a $5.5 million increase from
prior quarter. The increase in our 30-89 days past due loans is
primarily one commercial relationship collateralized by income
producing property and is considered well secured. 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 December 31, 2012 totaled $60.7
million, compared to $47.4 million at December 31, 2011 and $60.9
million at September 30, 2012.
Our level of foreclosed properties at $47.0 million at December
31, 2012 was a decrease from $56.5 million at December 31, 2011 and
$55.6 million at September 30, 2012. Sales of foreclosed properties
for the year ended December 31, 2012 totaled $19.3 million while
new foreclosed properties totaled $12.0 million. At December 31,
2012, the book value of properties under contracts to sell was $3.3
million; however, the closings had not occurred at quarter-end.
Net loan charge-offs for the quarters ended December 31, 2012
and September 30, 2012 were $2.9 million, or 0.45% of average loans
annualized, compared to $4.9 million, or 0.75%, experienced for the
fourth quarter 2011. Of the total net charge-offs for the quarter,
$0.8 million were in commercial loans, $0.9 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 quarters ended September 30, 2012 and December 31,
2012 compared to $3.0 million for the quarter ended December 31,
2011. Net charge-offs for the year 2012 were $9.4 million, or 0.37%
of average loans, compared to $14.9 million, or 0.58% of average
loans, for the year 2011. Our loan loss reserve as a percentage of
total loans outstanding has remained at 1.30% from December 31,
2011 to December 31, 2012. Our reserve coverage was 92.3% at
December 31, 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)December 31,
2012(in thousands except per share data and # of employees)
Three Three Three Twelve Twelve Months Months Months Months
Months Ended Ended Ended Ended Ended December 31, 2012 September
30, 2012 December 31, 2011 December 31, 2012 December 31, 2011
Interest income $ 38,091 $ 38,450 $ 39,051 $ 153,722 $ 158,460
Interest expense 4,328 5,404
6,143 21,588 27,005 Net interest
income 33,763 33,046 32,908 132,134 131,455 Loan loss provision
2,946 2,919 3,040 9,450 13,262 Gains on sales of loans 580
660 583 2,562 1,749 Deposit service charges 6,131 6,038 6,577
23,996 25,576 Trust revenue 1,749 1,734 1,564 6,918 6,354 Loan
related fees 1,514 631 763 4,042 2,372 Securities gains 336 - 218
1,155 218 Other noninterest income 1,633 1,775
1,854 7,284 7,563
Total noninterest income 11,943 10,838 11,559 45,957 43,832
Personnel expense 13,388 13,285 11,754 51,888 48,795 Occupancy and
equipment 2,871 2,926 2,855 11,422 11,679 FDIC insurance premiums
640 643 638 2,553 3,192 Amortization of core deposit intangible 53
53 53 213 213 Other noninterest expense 10,891
8,906 11,567 37,478
42,508 Total noninterest expense 27,843
25,813 26,867 103,554
106,387 Net income before taxes 14,917 15,152 14,560
65,087 55,638 Income taxes 4,365 4,943
4,672 20,225 16,811 Net
income $ 10,552 $ 10,209 $ 9,888 $ 44,862
$ 38,827 Memo: TEQ interest income $ 38,549 $
38,922 $ 39,468 $ 155,556 $ 160,037 Average shares
outstanding 15,516 15,491 15,332 15,466 15,313 Diluted average
shares outstanding 15,572 15,555 15,384 15,521 15,364 Basic
earnings per share $ 0.68 $ 0.66 $ 0.64 $ 2.90 $ 2.54 Diluted
earnings per share $ 0.68 $ 0.66 $ 0.64 $ 2.89 $ 2.53 Dividends per
share $ 0.315 $ 0.315 $ 0.310 $ 1.25 $ 1.23
Average
balances: Loans $ 2,554,130 $ 2,542,832 $ 2,566,047 $ 2,549,459
$ 2,580,351 Earning assets 3,381,936 3,371,420 3,320,294 3,357,134
3,221,648 Total assets 3,658,845 3,650,422 3,611,517 3,641,660
3,505,903 Deposits 2,933,737 2,940,138 2,868,998 2,928,579
2,811,333 Interest bearing liabilities 2,598,929 2,611,981
2,593,362 2,610,495 2,540,317
Shareholders’ equity
400,846 395,902 366,352 389,377 355,773
Performance
ratios: Return on average assets 1.15 % 1.11 % 1.09 % 1.23 %
1.11 % Return on average equity 10.47 % 10.26 % 10.71 % 11.52 %
10.91 % Yield on average earning assets (tax equivalent) 4.53 %
4.59 % 4.72 % 4.63 % 4.97 % Cost of interest bearing funds (tax
equivalent) 0.66 % 0.82 % 0.94 % 0.83 % 1.06 % Net interest margin
(tax equivalent) 4.03 % 3.96 % 3.98 % 3.99 % 4.13 % Efficiency
ratio (tax equivalent) 60.75 % 58.19 % 60.15 % 57.93 % 60.23 %
Loan charge-offs $ 3,593 $ 3,664 $ 5,446 $ 12,590 $ 17,534
Recoveries (703 ) (800 ) (578 ) (3,214
) (2,638 ) Net charge-offs $ 2,890 $ 2,864 $ 4,868 $ 9,376 $
14,896
Market Price: High $ 36.40 $ 36.92 $ 29.99 $
36.92 $ 30.35 Low 29.60 33.15 22.28 29.13 22.28 Close 32.78 35.53
29.42 32.78 29.42
Community Trust Bancorp,
Inc.Financial Summary (Unaudited)December 31,
2012(in thousands except per share data and # of employees)
As of As of As of
December 31, 2012 September 30, 2012 December 31, 2011
Assets: Loans $ 2,550,573 $ 2,551,537 $ 2,556,548 Loan loss
reserve (33,245 ) (33,189 ) (33,171 ) Net
loans 2,517,328 2,518,348 2,523,377 Loans held for sale 22,486 771
536 Securities AFS 603,343 621,230 527,398 Securities HTM 1,662
1,662 1,662 Other equity investments 30,558 30,558 30,556 Other
earning assets 141,290 153,663 182,484 Cash and due from banks
73,451 59,480 69,723 Premises and equipment 54,321 55,068 54,297
Goodwill and core deposit intangible 66,394 66,447 66,607 Other
assets 124,831 134,304 134,539
Total Assets $ 3,635,664 $ 3,641,531 $
3,591,179
Liabilities and Equity: NOW accounts
$ 28,717 $ 22,200 $ 19,113 Savings deposits 853,716 848,068 821,036
CD's >=$100,000 643,629 647,433 647,557 Other time deposits
771,338 794,159 805,918
Total interest bearing deposits 2,297,400 2,311,860 2,293,624
Noninterest bearing deposits 606,448 599,984
584,735 Total deposits 2,903,848 2,911,844
2,878,359 Repurchase agreements 210,120 218,511 217,177 Other
interest bearing liabilities 75,084 71,634 96,054 Noninterest
bearing liabilities 46,268 43,445
32,723 Total liabilities 3,235,320 3,245,434
3,224,313 Shareholders' equity 400,344 396,097
366,866
Total Liabilities and Equity $
3,635,664 $ 3,641,531 $ 3,591,179
Ending shares outstanding 15,613 15,604 15,430 Memo: Market value
of HTM securities $ 1,659 $ 1,664 $ 1,661 30 - 89 days past
due loans $ 27,030 $ 21,539 $ 21,721 90 days past due loans 19,215
15,928 11,515 Nonaccrual loans 16,791 18,098 25,753 Restructured
loans (included in impaired loans, excluding 90+ days past due and
nonaccrual) 22,242 22,745 19,305 Foreclosed properties 46,986
55,551 56,545 Other repossessed assets 5 25 58 Tier 1
leverage ratio 10.65 % 10.51 % 9.89 % Tier 1 risk based ratio 15.23
% 14.86 % 13.88 % Total risk based ratio 16.49 % 16.12 % 15.14 %
Tangible equity to tangible assets ratio 9.36 % 9.22 % 8.52 % FTE
employees 1,035 1,032 1,015
Community Trust Bancorp,
Inc.Financial Summary (Unaudited)December 31,
2012(in thousands except per share data and # of employees)
Community Trust Bancorp, Inc. reported earnings for the
three and twelve months ending December 31, 2012 and 2011 as
follows:
Three Months Ended Twelve Months Ended
December 31
December 31 2012 2011 2012 2011 Net income $ 10,552 $
9,888 $ 44,862 $ 38,827 Basic earnings per share $ 0.68 $
0.64 $ 2.90 $ 2.54 Diluted earnings per share $ 0.68 $ 0.64
$ 2.89 $ 2.53 Average shares outstanding 15,516 15,332
15,466 15,313 Total assets (end of period) $ 3,635,664 $
3,591,179 Return on average equity 10.47 % 10.71 % 11.52 %
10.91 % Return on average assets 1.15 % 1.09 % 1.23 % 1.11 %
Provision for loan losses $ 2,946 $ 3,040 $ 9,450 $ 13,262
Gains on sales of loans $ 580 $ 583 $ 2,562 $ 1,749
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