Community Trust Bancorp, Inc. (NASDAQ:CTBI):
Earnings Summary
(in thousands except per share data)
1Q
2014
4Q
2013
1Q
2013
Net income $10,140 $8,757 $11,820 Earnings per share $0.64 $0.56
$0.76 Earnings per share – diluted $0.64 $0.55 $0.76 Return
on average assets 1.13% 0.95% 1.31% Return on average equity 9.72%
8.33% 11.82% Efficiency ratio 62.00% 69.62% 57.72% Tangible common
equity 9.88% 9.85% 9.44% Dividends declared per share $0.320
$0.320 $0.315 Book value per share $26.66 $26.07 $25.98
Weighted average shares 15,735 15,691 15,539 Weighted average
shares – diluted 15,821 15,782
15,592
Community Trust Bancorp, Inc. (NASDAQ:CTBI) reports earnings for
the first quarter 2014 of $10.1 million, or $0.64 per basic share,
compared to $11.8 million, or $0.76 per basic share, earned during
the first quarter 2013 and $8.8 million, or $0.56 per basic share,
earned during the fourth quarter 2013. The variance from prior
quarter was impacted by the $6.2 million in accrued expenses during
the fourth quarter 2013 related to the Federal Reserve
determination previously disclosed.
1st Quarter 2014 Highlights
- CTBI’s basic earnings per share for the
quarter decreased $0.12 per share from the first quarter 2013 but
increased $0.08 from fourth quarter 2013.
- Net interest income for the quarter
decreased 1.3% from prior year first quarter and 3.7% from prior
quarter as our net interest margin decreased 5 basis points and 8
basis points, respectively, for those time periods. Average earning
assets decreased 0.1% from first quarter 2013 but increased 0.4%
from prior quarter while our yield on average earning assets
decreased 13 basis points and 9 basis points, respectively.
- Nonperforming loans at $42.4 million
increased $8.6 million from March 31, 2013 but declined $1.1
million from December 31, 2013. Nonperforming assets at $78.7
million decreased $0.3 million from March 31, 2013 and $4.0 million
from December 31, 2013.
- Net loan charge-offs for the quarter
ended March 31, 2014 were $1.7 million, or 0.27% of average loans
annualized, compared to $1.4 million, or 0.22%, experienced for the
first quarter 2013 and $1.2 million, or 0.19%, for the fourth
quarter 2013.
- Our loan loss provision for the quarter
decreased $0.2 million from prior year first quarter but increased
$0.1 million from prior quarter.
- Our loan loss reserve as a percentage
of total loans outstanding remained at 1.30% from March 31, 2013 to
March 31, 2014. Our reserve coverage (allowance for loan loss
reserve to nonperforming loans) at March 31, 2014 was 79.2%
compared to 98.6% at March 31, 2013 and 78.1% at December 31,
2013.
- Noninterest income decreased 15.6% for
the quarter ended March 31, 2014 compared to the same period in
2013 and decreased 16.4% from prior quarter. The decrease was
primarily attributable to decreases in gains on sales of loans,
deposit service charges, and loan related fees.
- Noninterest expense for the quarter
ended March 31, 2014 increased 2.1% from prior year first quarter
but decreased 17.0% from prior quarter. The variance from prior
quarter was primarily due to the $6.2 million accrued expenses
related to the Federal Reserve investigation in the fourth quarter
2013.
- Our loan portfolio increased $22.2
million from March 31, 2013 but declined $29.8 million during the
quarter.
- Our investment portfolio decreased
$27.4 million from March 31, 2013 but increased $40.7 million
during the quarter.
- Deposits, including repurchase
agreements, declined $5.3 million from March 31, 2013 but increased
$78.7 million during the quarter.
- Our tangible common equity/tangible
assets ratio remains strong at 9.88%.
Net Interest Income
Net interest income for the quarter decreased $0.4 million, or
1.3%, from prior year first quarter and $1.2 million, or 3.7% from
prior quarter as our net interest margin decreased 5 basis points
and 8 basis points, respectively, for those time periods. The
decrease in our net interest margin is attributable to the reversal
of $0.5 million in accrued interest, representing 7 basis points of
the margin, with the placement of an income producing commercial
real estate loan on nonaccrual. Average earning assets decreased
0.1% from first quarter 2013 but increased 0.4% from prior quarter.
The yield on average earning assets decreased 13 basis points and 9
basis points for these respective time periods. Loans represented
76.6% of our average earning assets for the quarter ended March 31,
2014 compared to 75.2% for the quarter ended March 31, 2013 and
77.1% for the quarter ended December 31, 2013. The cost of interest
bearing funds decreased 9 basis points from prior year first
quarter and 2 basis points from prior quarter.
Noninterest Income
Noninterest income decreased 15.6% for the quarter ended March
31, 2014 compared to the same period in 2013 and 16.4% from prior
quarter. The decrease was primarily attributable to decreases in
gains on sales of loans, deposit service charges, and loan related
fees. Gains on sales of loans decreased $1.2 million from prior
year same quarter and $0.1 million from prior quarter which is
reflective of the decline in secondary market residential real
estate mortgage activity. Deposit service charges decreased $0.3
million from the first quarter 2013 and $0.9 million from the
fourth quarter 2013. The decrease from first quarter 2013 was
primarily a result of a change in our processing of overdrafts,
while the decrease from the fourth quarter 2013 was also a result
of seasonality. Loan related fees decreased $0.3 million and $0.5
million, respectively, from the first quarter 2013 and the fourth
quarter 2013, primarily due to variances in fair value adjustments
to our mortgage servicing rights.
Noninterest Expense
Noninterest expense for the quarter ended March 31, 2014
increased 2.1% from prior year first quarter but decreased 17.0%
from prior quarter. The increase from prior year same quarter
included increases in personnel expense, occupancy and equipment
expense, and data processing expense. The variance from prior
quarter was primarily due to the $6.2 million accrued expenses
related to the Federal Reserve determination in the fourth quarter
2013. During the first quarter of 2014, this accrual was reduced by
$0.6 million as a result of updated information obtained regarding
the amount of refunds to be issued. This reduction, however, was
offset by higher than anticipated operational losses during the
first quarter 2014.
Balance Sheet Review
CTBI’s total assets at $3.7 billion decreased $3.5 million, or
0.1%, from March 31, 2013 but increased $86.9 million, or an
annualized 9.8%, during the quarter. Loans outstanding at March 31,
2014 were $2.6 billion, increasing $22.2 million, or 0.9%, from
March 31, 2013 but decreasing $29.8 million, or an annualized 4.6%,
during the quarter. We experienced declines during the quarter of
$21.6 million in the commercial loan portfolio and $9.7 million in
the consumer loan portfolio, partially offset by growth of $1.4
million in the residential loan portfolio. CTBI’s investment
portfolio decreased $27.4 million, or 4.0%, from March 31, 2013 but
increased $40.7 million, or an annualized 27.0%, during the
quarter. Deposits, including repurchase agreements, at $3.1 billion
decreased $5.3 million, or 0.2%, from March 31, 2013 but increased
$78.7 million, or an annualized 10.4%, from prior quarter.
Shareholders’ equity at March 31, 2014 was $422.0 million
compared to $406.6 million at March 31, 2013 and $412.5 million at
December 31, 2013. CTBI’s annualized dividend yield to shareholders
as of March 31, 2014 was 3.09%.
Asset Quality
CTBI’s total nonperforming loans were $42.4 million at March 31,
2014, a 25.3% increase from the $33.9 million at March 31, 2013 but
a 2.6% decrease from the $43.6 million at December 31, 2013. Loans
90+ days past due decreased $8.1 million for the quarter, primarily
due to the movement of a $7.3 million income producing commercial
real estate loan relationship to nonaccrual. Without the movement
of this loan, both 90+ days past due and nonaccrual loans would
have shown improvement. Loans 30-89 days past due at $23.5 million
is a decrease of $2.6 million from March 31, 2013 but an increase
of $7.6 million from December 31, 2013. The increase in 30-89 days
past due loans is attributable to one borrower relationship which
was negatively impacted during the first quarter by weather and
permit issues. 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 March 31, 2014 totaled $65.5
million, compared to $66.5 million at March 31, 2013 and $65.3
million at December 31, 2013.
We continue to experience improvement in other real estate
owned. Our level of foreclosed properties at $36.3 million at March
31, 2014 was a decrease from $45.2 million at March 31, 2013 and
$39.2 million at December 31, 2013. Sales of foreclosed properties
for the quarter ended March 31, 2014 totaled $3.3 million while new
foreclosed properties totaled $1.3 million. At March 31, 2014, the
book value of properties under contracts to sell was $6.1 million;
however, the closings had not occurred at quarter-end.
Net loan charge-offs for the quarter ended March 31, 2014 were
$1.7 million, or 0.27% of average loans annualized, compared to
$1.4 million, or 0.22%, experienced for the first quarter 2013 and
$1.2 million, or 0.19%, for the fourth quarter 2013. Of the total
net charge-offs for the quarter, $0.7 million were in commercial
loans, $0.5 million were in indirect auto loans, and $0.2 million
were in residential real estate mortgage loans. Allocations to loan
loss reserves were $1.3 million for the quarter ended March 31,
2014 compared to $1.6 million for the quarter ended March 31, 2013
and $1.2 million for the quarter ended December 31, 2013. Our loan
loss reserve as a percentage of total loans outstanding has
remained at 1.30% from March 31, 2013 to March 31, 2014.
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 $3.7 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) March 31, 2014 (in thousands except per
share data and # of employees)
Three Three Three Months Months Months Ended Ended Ended
March 31, 2014 December 31, 2013 March 31, 2013 Interest income $
35,693 $ 37,113 $ 36,776 Interest expense 2,943
3,115 3,579 Net interest income 32,750
33,998 33,197 Loan loss provision 1,345 1,219 1,559 Gains on
sales of loans 190 293 1,397 Deposit service charges 5,431 6,352
5,767 Trust revenue 2,109 2,171 2,000 Loan related fees 679 1,165
948 Securities gains (losses) (60 ) (14 ) - Other noninterest
income 1,716 2,072 1,808
Total noninterest income 10,065 12,039 11,920 Personnel
expense 13,417 13,399 12,982 Occupancy and equipment 3,064 2,939
2,905 Data processing expense 1,925 1,870 1,813 FDIC insurance
premiums 649 579 602 Other noninterest expense 7,806
13,587 7,997 Total noninterest expense
26,861 32,374 26,299 Net income before taxes 14,609 12,444
17,259 Income taxes 4,469 3,687
5,439 Net income $ 10,140 $ 8,757 $ 11,820
Memo: TEQ interest income $ 36,141 $ 37,567 $ 37,221
Average shares outstanding 15,735 15,691 15,539 Diluted
average shares outstanding 15,821 15,782 15,592 Basic earnings per
share $ 0.64 $ 0.56 $ 0.76 Diluted earnings per share $ 0.64 $ 0.55
$ 0.76 Dividends per share $ 0.320 $ 0.320 $ 0.315
Average balances: Loans $ 2,595,729 $ 2,602,680 $ 2,552,461
Earning assets 3,389,490 3,377,207 3,393,848 Total assets 3,648,545
3,642,620 3,659,884 Deposits, including repurchase agreements
3,114,169 3,114,880 3,135,605 Interest bearing liabilities
2,546,743 2,547,073 2,599,957 Shareholders' equity 423,175 417,245
405,550
Performance ratios: Return on average assets
1.13 % 0.95 % 1.31 % Return on average equity 9.72 % 8.33 % 11.82 %
Yield on average earning assets (tax equivalent) 4.32 % 4.41 % 4.45
% Cost of interest bearing funds (tax equivalent) 0.47 % 0.49 %
0.56 % Net interest margin (tax equivalent) 3.97 % 4.05 % 4.02 %
Efficiency ratio (tax equivalent) 62.00 % 69.62 % 57.72 %
Loan charge-offs $ 2,545 $ 2,227 $ 2,188 Recoveries (807 )
(1,003 ) (777 ) Net charge-offs $ 1,738 $ 1,224 $
1,411
Market Price: High $ 45.24 $ 46.28 $ 35.00 Low
$ 37.60 $ 38.09 $ 32.27 Close $ 41.48 $ 45.16 $ 34.03
Community Trust Bancorp, Inc. Financial Summary
(Unaudited) March 31, 2014 (in thousands except per
share data and # of employees)
As of As of As of March 31, 2014 December 31, 2013 March 31, 2013
Assets: Loans $ 2,585,508 $ 2,615,354 $ 2,563,314 Loan loss
reserve (33,615 ) (34,008 ) (33,393 ) Net
loans 2,551,893 2,581,346 2,529,921 Loans held for sale 1,610 828
1,449 Securities AFS 650,127 609,405 677,510 Securities HTM 1,662
1,662 1,662 Other equity investments 22,814 30,559 30,559 Other
earning assets 140,715 53,225 124,519 Cash and due from banks
64,386 64,828 54,589 Premises and equipment 51,182 52,000 53,491
Goodwill and core deposit intangible 66,127 66,180 66,340 Other
assets 118,062 121,683 132,055
Total Assets $ 3,668,578 $ 3,581,716 $
3,672,095
Liabilities and Equity: NOW accounts
$ 27,819 $ 31,017 $ 25,464 Savings deposits 931,135 874,907 884,000
CD's >=$100,000 605,478 613,735 641,574 Other time deposits
707,587 714,094 762,723
Total interest bearing deposits 2,272,019 2,233,753 2,313,761
Noninterest bearing deposits 652,170 621,321
619,819 Total deposits 2,924,189 2,855,074
2,933,580 Repurchase agreements 217,656 208,067 213,573 Other
interest bearing liabilities 71,321 75,092 78,000 Noninterest
bearing liabilities 33,369 30,991
40,308 Total liabilities 3,246,535 3,169,224
3,265,461 Shareholders' equity 422,043 412,492
406,634
Total Liabilities and Equity $
3,668,578 $ 3,581,716 $ 3,672,095
Ending shares outstanding 15,832 15,821 15,653 Memo: Market value
of HTM securities $ 1,619 $ 1,601 $ 1,656 30 - 89 days past
due loans $ 23,532 $ 15,980 $ 26,115 90 days past due loans 15,546
23,599 15,533 Nonaccrual loans 26,884 19,958 18,337 Restructured
loans (excluding 90 days past due and nonaccrual) 44,991 44,327
36,777 Foreclosed properties 36,299 39,188 45,168 Other repossessed
assets 5 - - Tier 1 leverage ratio 11.68 % 11.51 % 10.86 %
Tier 1 risk based ratio 16.57 % 16.15 % 15.33 % Total risk based
ratio 17.81 % 17.40 % 16.58 % Tangible equity to tangible assets
ratio 9.88 % 9.85 % 9.44 % FTE employees 1,024 1,022 1,028
Community Trust Bancorp, Inc. Financial Summary
(Unaudited) March 31, 2014 (in thousands except per
share data and # of employees)
Community Trust Bancorp, Inc. reported
earnings for the three months ending March 31, 2014 and 2013 as
follows: Three Months Ended March 31 2014 2013
Net income $ 10,140 $ 11,820 Basic earnings per share $ 0.64
$ 0.76 Diluted earnings per share $ 0.64 $ 0.76
Average shares outstanding 15,735 15,539 Total assets (end
of period) $ 3,668,578 $ 3,672,095 Return on average equity
9.72 % 11.82 % Return on average assets 1.13 % 1.31 %
Provision for loan losses $ 1,345 $ 1,559 Gains on sales of
loans $ 190 $ 1,397
Community Trust Bancorp, Inc.Jean R. Hale,
606-437-3294Chairman, President, and C.E.O.
Community Trust Bancorp (NASDAQ:CTBI)
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