Community Trust Bancorp, Inc. (NASDAQ:
CTBI):
Earnings Summary
(in
thousands except per share data)
3Q2016
2Q2016
3Q2015
9 Months2016
9 Months2015
Net income $12,312 $11,566 $11,222 $35,480 $34,562 Earnings
per share $0.70 $0.66 $0.64 $2.02 $1.98 Earnings per share -
diluted $0.70 $0.66 $0.64 $2.02 $1.98 Return on average
assets 1.25% 1.19% 1.18% 1.21% 1.23% Return on average equity 9.81%
9.46% 9.50% 9.63% 9.99% Efficiency ratio 57.45% 59.98% 60.53%
58.68% 58.82% Tangible common equity 11.24% 11.17% 10.82%
Dividends declared per share $0.32 $0.31 $0.31 $0.94 $0.91 Book
value per share $28.40 $28.11 $26.87 Weighted average shares
17,554 17,530 17,440 17,532 17,420 Weighted average shares -
diluted 17,569
17,542 17,491
17,548 17,472
Community Trust Bancorp, Inc. (NASDAQ: CTBI) reports earnings
for the third quarter 2016 of $12.3 million, or $0.70 per basic
share, compared to $11.2 million, or $0.64 per basic share, earned
during the third quarter 2015 and $11.6 million, or $0.66 per basic
share, earned during the second quarter 2016. Earnings for the nine
months ended September 30, 2016 were $35.5 million, or $2.02 per
basic share, compared to $34.6 million, or $1.98 per basic share
earned for the nine months ended September 30, 2015.
3rd Quarter 2016 Highlights
- Our loan portfolio increased $110.8
million from September 30, 2015 but decreased $0.1 million during
the quarter.
- Our investment portfolio increased
$54.0 million from September 30, 2015 and $51.6 million during the
quarter.
- Deposits, including repurchase
agreements, increased $84.9 million from September 30, 2015 and
$13.0 million during the quarter.
- Nonperforming loans at $28.3 million
decreased $4.4 million from September 30, 2015 but increased $3.6
million from June 30, 2016. Nonperforming assets at $66.1 million
decreased $1.4 million from September 30, 2015 but increased $3.5
million from June 30, 2016.
- Net loan charge-offs for the quarter
ended September 30, 2016 were $2.1 million, or 0.28% of average
loans annualized, compared to $2.2 million, or 0.31%, experienced
for the third quarter 2015 and $2.5 million, or 0.35%, for the
second quarter 2016.
Net Interest Income
Net interest income for the quarter of $33.2 million was an
increase of $0.3 million, or 0.8%, from prior year third quarter
and $0.2 million, or 0.5%, from prior quarter as we grew our
earning assets. Our net interest margin decreased 11 basis points
and 5 basis points during the respective time periods. The extended
low rate environment continues to have a negative impact on our net
interest margin as the yield on average earning assets continued to
decline while our cost of funds increased slightly. Average earning
assets increased $140.5 million, or 4.0%, from third quarter 2015
and $29.7 million, or 3.2%, annualized, from prior quarter, while
our yield on average earning assets decreased 6 basis points and 4
basis points, respectively, during these time periods. The cost of
interest bearing funds increased 6 basis points from prior year
third quarter and 1 basis point from prior quarter. Our ratio of
average loans to deposits, including repurchase agreements, for the
quarter ended September 30, 2016 was 88.3% compared to 87.5% for
the quarter ended September 30, 2015 and 88.1% for the quarter
ended June 30, 2016. Net interest income for the nine months ended
September 30, 2016 of $99.6 million was an increase of $0.6
million, or 0.6%, over the first nine months of 2015, although we
experienced a 13 basis point decline in our net interest
margin.
Noninterest Income
Noninterest income for the quarter ended September 30, 2016 of
$13.2 million was an increase of $1.2 million, or 9.6%, from prior
year same quarter and $1.4 million, or 12.0%, from prior quarter.
The increase for the quarter was primarily due to increases in
gains on sales of loans, deposit service charges, trust revenue,
loan related fees, and securities gains. Loan related fees were
affected by fluctuations in the fair value adjustments of our
mortgage servicing rights with an increase of $0.4 million from the
same quarter last year and an increase of $0.2 million quarter over
quarter. Noninterest income for the nine months ended September 30,
2016 of $35.9 million was an increase of $0.9 million, or 2.7%,
from the first nine months of 2015. The year-to-date increase in
noninterest income was primarily due to a $0.7 million increase in
deposit services charges, a $0.2 million increase in trust revenue,
and a $0.4 million increase in securities gains, partially offset
by declines in gains on sales of loans ($0.2 million) and loan
related fees ($0.1 million). Loan related fees decreased
year-to-date as a result of the $0.2 million decline in the fair
value of mortgage servicing rights.
Noninterest Expense
Noninterest expense for the quarter ended September 30, 2016 of
$26.7 million was a decrease of $0.8 million, or 3.1%, from prior
year third quarter and $0.5 million, or 1.9%, from prior quarter.
The decrease in noninterest expense from prior year same quarter
was primarily due to decreases in FDIC insurance, net other real
estate owned expense, and operating losses, partially offset by an
increase in personnel expense. The decrease from prior quarter in
FDIC insurance premiums and operating losses was combined with a
decrease in personnel expense, but was partially offset by an
increase in our net other real estate owned expense. The
fluctuation in our personnel expense is a result of changes in our
group medical insurance expense caused by differences in our claims
paid experience as a self-insured employer. Noninterest expense for
the nine months ended September 30, 2016 of $80.1 million was an
increase of $0.5 million, or 0.6%, compared to the first nine
months of 2015, primarily due to the $1.4 million increase in
personnel expense which included a $0.8 million increase in
salaries, a $1.1 million increase in the cost of group medical and
life insurance, and a $0.4 million decrease in bonuses. The
increase in personnel expense was partially offset by declines in
data processing expense ($0.5 million) and net other real estate
owned expense ($0.6 million).
Balance Sheet Review
CTBI’s total assets at $3.9 billion increased $122.1 million, or
3.2%, from September 30, 2015 and $34.9 million, or an annualized
3.6%, during the quarter. Loans outstanding at September 30, 2016
were $2.9 billion, increasing $110.8 million, or 3.9%, from
September 30, 2015 but decreasing $0.1 million during the quarter.
We experienced a decline during the quarter of $9.5 million in the
commercial loan portfolio and $5.7 million in the residential loan
portfolio, offset by increases of $12.6 million in the indirect
loan portfolio and $2.5 million in the consumer direct loan
portfolio. CTBI’s investment portfolio increased $54.0 million, or
9.3%, from September 30, 2015 and $51.6 million, or an annualized
35.3%, during the quarter. Excess cash on deposit at the Federal
Reserve was redeployed into short term investments offering higher
yields while maintaining the short duration position of our
investment portfolio. Deposits, including repurchase agreements, at
$3.3 billion increased $84.9 million, or 2.6%, from September 30,
2015 and $13.0 million, or an annualized 1.6%, from prior
quarter.
Shareholders’ equity at September 30, 2016 was $500.1 million
compared to $470.6 million at September 30, 2015 and $493.6 million
at June 30, 2016. CTBI’s annualized dividend yield to shareholders
as of September 30, 2016 was 3.45%.
Asset Quality
CTBI’s total nonperforming loans were $28.3 million at September
30, 2016, a 13.5% decrease from the $32.7 million at September 30,
2015 but a 14.6% increase from the $24.7 million at June 30, 2016.
Loans 90+ days past due increased $3.3 million during the quarter
but decreased $6.5 million from September 30, 2015. Nonaccrual
loans increased $0.4 million during the quarter and $2.1 million
from September 30, 2015. Loans 30-89 days past due at $19.8 million
was an increase of $0.8 million from June 30, 2016 and an increase
of $1.0 million from September 30, 2015. 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, 2016 totaled $55.0 million,
an increase of $6.7 million from the $48.3 million at September 30,
2015 and $1.7 million from the $53.3 million at June 30, 2016.
While nonperforming loans and impaired loans increased during the
quarter, the increase was primarily in loans 90+ days past due and
still accruing. These loans are considered to be well secured and
in the process of collection. Management analyzes all loans that
are 90+ days past due or otherwise impaired to determine the amount
of impairment that should be recognized. During the quarter, the
amount of impairment recognized decreased by $0.2 million.
Our level of foreclosed properties at $37.7 million at September
30, 2016 was a $3.0 million increase from the $34.7 million at
September 30, 2015 but was relatively flat to June 30, 2016. Sales
of foreclosed properties for the quarter ended September 30, 2016
totaled $0.7 million while new foreclosed properties totaled $1.0
million. At September 30, 2016, the book value of properties under
contracts to sell was $4.7 million; however, the closings had not
occurred at quarter-end.
Net loan charge-offs for the quarter ended September 30, 2016
were $2.1 million, or 0.28% of average loans annualized, compared
to $2.2 million, or 0.31%, experienced for the third quarter 2015
and $2.5 million, or 0.35%, for the second quarter 2016. Of the net
charge-offs for the quarter, $0.8 million were in commercial loans,
$0.8 million were in indirect auto loans, $0.4 million were in
residential real estate mortgage loans, and $0.1 million were in
consumer direct loans. Allocations to loan loss reserves were $2.2
million for the quarter ended September 30, 2016 compared to $2.5
million for the quarter ended September 30, 2015 and $1.9 million
for the quarter ended June 30, 2016. Our reserve coverage
(allowance for loan and lease loss reserve to nonperforming loans)
at September 30, 2016 was 126.5% compared to 108.6% at September
30, 2015 and 144.6% at June 30, 2016. Our loan loss reserve as a
percentage of total loans outstanding remained at 1.22% at
September 30, 2016 compared to prior quarter, down from the 1.26%
at September 30, 2015.
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. Community Trust
Bancorp, Inc.’s (“CTBI”) 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,
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, changes in laws and
regulations, competition, and 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; and the resolution of legal
proceedings and related matters. In addition, the banking industry
in general is subject to various monetary, operational, and fiscal
policies and regulations, which include, but are not limited to,
those determined by the Federal Reserve Board, the Federal Deposit
Insurance Corporation, the Consumer Financial Protection Bureau,
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 $3.9 billion, is
headquartered in Pikeville, Kentucky and has 70 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, 2016
(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, 2016 June 30,
2016 September 30, 2015 September 30, 2016 September 30, 2015
Interest income $ 36,679 $ 36,374 $ 35,912 $ 109,580 $ 107,720
Interest expense 3,452 3,315
2,947 9,970 8,668 Net interest
income 33,227 33,059 32,965 99,610 99,052 Loan loss provision 2,191
1,873 2,520 5,829 6,740 Gains on sales of loans 595 446 462
1,357 1,575 Deposit service charges 6,563 6,272 6,348 18,680 17,976
Trust revenue 2,440 2,396 2,297 7,111 6,902 Loan related fees 1,260
739 641 2,610 2,747 Securities gains (losses) 458 (4 ) 12 522 142
Other noninterest income 1,870 1,920
2,275 5,646 5,657 Total
noninterest income 13,186 11,769 12,035 35,926 34,999
Personnel expense 14,216 14,322 13,975 42,671 41,242 Occupancy and
equipment 2,745 2,695 2,688 8,212 8,232 Data processing expense
1,601 1,559 1,577 4,729 5,204 FDIC insurance premiums 469 576 606
1,628 1,798 Other noninterest expense 7,656
8,040 8,688 22,881 23,189
Total noninterest expense 26,687 27,192 27,534 80,121 79,665
Net income before taxes 17,535 15,763 14,946 49,586 47,646
Income taxes 5,223 4,197 3,724
14,106 13,084 Net income $
12,312 $ 11,566 $ 11,222 $ 35,480 $
34,562 Memo: TEQ interest income $ 37,178 $ 36,880 $
36,414 $ 111,116 $ 109,250 Average shares outstanding 17,554
17,530 17,440 17,532 17,420 Diluted average shares outstanding
17,569 17,542 17,491 17,548 17,472 Basic earnings per share $ 0.70
$ 0.66 $ 0.64 $ 2.02 $ 1.98 Diluted earnings per share $ 0.70 $
0.66 $ 0.64 $ 2.02 $ 1.98 Dividends per share $ 0.32 $ 0.31 $ 0.31
$ 0.94 $ 0.91
Average balances: Loans $ 2,931,791 $
2,913,461 $ 2,803,332 $ 2,908,115 $ 2,773,249 Earning assets
3,664,598 3,634,945 3,524,058 3,640,043 3,506,303 Total assets
3,932,705 3,900,660 3,788,917 3,907,076 3,772,031 Deposits,
including repurchase agreements 3,319,608 3,307,591 3,203,122
3,294,233 3,184,151 Interest bearing liabilities 2,634,254
2,615,806 2,562,274 2,624,794 2,563,526
Shareholders’ equity
499,180 491,634 468,442 491,882 462,454
Performance
ratios: Return on average assets 1.25 % 1.19 % 1.18 % 1.21 %
1.23 % Return on average equity 9.81 % 9.46 % 9.50 % 9.63 % 9.99 %
Yield on average earning assets (tax equivalent) 4.04 % 4.08 % 4.10
% 4.08 % 4.17 % Cost of interest bearing funds (tax equivalent)
0.52 % 0.51 % 0.46 % 0.51 % 0.45 % Net interest margin (tax
equivalent) 3.66 % 3.71 % 3.77 % 3.71 % 3.84 % Efficiency ratio
(tax equivalent) 57.45 % 59.98 % 60.53 % 58.68 % 58.82 %
Loan charge-offs $ 2,962 $ 3,302 $ 2,899 $ 8,729 $ 7,819 Recoveries
(875 ) (797 ) (729 ) (2,607 )
(2,172 ) Net charge-offs $ 2,087 $ 2,505 $ 2,170 $ 6,122 $ 5,647
Market Price: High $ 37.49 $ 36.95 $ 37.63 $ 37.49 $
37.63 Low $ 33.71 $ 32.98 $ 33.62 $ 30.89 $ 31.53 Close $ 37.11 $
34.66 $ 35.51 $ 37.11 $ 35.51
Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
September 30, 2016
(in thousands except per share data and #
of employees)
As of As of As of September 30, 2016 June 30, 2016 September
30, 2015
Assets: Loans $ 2,931,299 $ 2,931,385 $ 2,820,460
Loan loss reserve (35,801 ) (35,697 ) (35,540
) Net loans 2,895,498 2,895,688 2,784,920 Loans held for sale 2,075
1,707 1,983 Securities AFS 631,201 579,115 576,713 Securities HTM
1,181 1,661 1,661 Other equity investments 22,814 22,814 22,814
Other earning assets 74,419 81,894 116,754 Cash and due from banks
49,584 59,700 54,041 Premises and equipment 47,840 48,104 48,541
Goodwill and core deposit intangible 65,662 65,702 65,821 Other
assets 139,952 138,937 134,900
Total Assets $ 3,930,226 $ 3,895,322 $
3,808,148
Liabilities and Equity: NOW accounts
$ 45,834 $ 50,362 $ 32,249 Savings deposits 1,023,590 1,025,394
1,004,635
CD’s >=$100,000
597,417 574,657 561,856 Other time deposits 623,957
626,103 638,832 Total interest bearing
deposits 2,290,798 2,276,516 2,237,572 Noninterest bearing deposits
763,187 765,467 737,657
Total deposits 3,053,985 3,041,983 2,975,229 Repurchase agreements
262,295 261,298 256,153 Other interest bearing liabilities 69,110
66,674 71,640 Noninterest bearing liabilities 44,726
31,757 34,541 Total liabilities
3,430,116 3,401,712 3,337,563
Shareholders’ equity
500,110 493,610 470,585
Total Liabilities and Equity $ 3,930,226 $ 3,895,322
$ 3,808,148 Ending shares outstanding 17,608
17,560 17,513 Memo: Market value of HTM securities $ 1,182 $ 1,662
$ 1,651 30 - 89 days past due loans $ 19,765 $ 18,995 $
18,812 90 days past due loans 11,498 8,237 18,001 Nonaccrual loans
16,798 16,447 14,722 Restructured loans (excluding 90 days past due
and nonaccrual) 54,026 55,088 43,081 Foreclosed properties 37,665
37,740 34,654 Other repossessed assets 103 136 136 Common
equity Tier 1 capital 14.97 % 14.79 % 14.49 % Tier 1 leverage ratio
12.69 % 12.57 % 12.40 % Tier 1 risk-based capital ratio 17.05 %
16.88 % 16.63 % Total risk based capital ratio 18.30 % 18.13 %
17.88 % Tangible equity to tangible assets ratio 11.24 % 11.17 %
10.82 % FTE employees 991 998 980
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161019005769/en/
Community Trust Bancorp, Inc.Jean R. Hale, 606-437-3294Chairman,
President, and C.E.O.
Community Trust Bancorp (NASDAQ:CTBI)
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