Community Trust Bancorp, Inc. (NASDAQ:CTBI):
Earnings
Summary (in thousands except per share data)
4Q
2016
3Q
2016
4Q
2015
Year
2016
Year
2015
Net income $ 11,866 $ 12,312 $ 11,870 $ 47,346 $ 46,432 Earnings
per share $ 0.67 $ 0.70 $ 0.68 $ 2.70 $ 2.66 Earnings per share -
diluted $ 0.67 $ 0.70 $ 0.68 $ 2.70 $ 2.66 Return on average
assets 1.19 % 1.25 % 1.22 % 1.21 % 1.23 % Return on average equity
9.41 % 9.81 % 9.91 % 9.58 % 9.97 % Efficiency ratio 58.15 % 57.45 %
56.35 % 58.54 % 58.20 % Tangible common equity 11.25 % 11.24 %
10.68 % Dividends declared per share $ 0.32 $ 0.32 $ 0.31 $
1.26 $ 1.22 Book value per share $ 28.40 $ 28.40 $ 27.12
Weighted average shares 17,593 17,554 17,464 17,548 17,431 Weighted
average shares - diluted 17,617
17,569
17,516 17,566
17,483
Community Trust Bancorp, Inc. (NASDAQ:CTBI) reports earnings for
the fourth quarter 2016 of $11.9 million, or $0.67 per basic share,
compared to $12.3 million, or $0.70 per basic share, earned during
the third quarter 2016 and $11.9 million, or $0.68 per basic share,
earned during the fourth quarter 2015. Earnings for the year ended
December 31, 2016 were a record $47.3 million, or $2.70 per basic
share, compared to $46.4 million, or $2.66 per basic share earned
for the year ended December 31, 2015.
4th Quarter 2016 Highlights
- Our loan portfolio increased $7.1
million during the quarter and $64.4 million from December 31,
2015.
- Our investment portfolio decreased
$26.1 million during the quarter but increased $9.7 million from
December 31, 2015.
- Deposits, including repurchase
agreements, increased $16.1 million during the quarter and $100.4
million from December 31, 2015.
- Nonperforming loans at $27.5 million
decreased $0.8 million from September 30, 2016 and $1.1 million
from December 31, 2015. Nonperforming assets at $63.4 million
decreased $2.6 million from September 30, 2016 and $6.0 million
from December 31, 2015.
- Net loan charge-offs for the quarter
ended December 31, 2016 were $1.9 million, or 0.26% of average
loans annualized, compared to $2.1 million, or 0.28%, experienced
for the third quarter 2016 and $1.4 million, or 0.19%, for the
fourth quarter 2015. Net charge-offs for the year 2016 were $8.0
million, or 0.28% of average loans, compared to $7.0 million, or
0.25%, for the year 2015.
Net Interest Income
Net interest income for the quarter of $33.4 million was an
increase of $0.2 million, or 0.6%, from third quarter 2016 and $0.2
million, or 0.7%, from prior year fourth quarter. Our net interest
margin remained flat to prior quarter at 3.66% but decreased 8
basis points from prior year same quarter, while our average
earnings assets increased $25.9 million and $111.9 million,
respectively, during those same periods. Our cost of funds
increased 2 basis points from prior quarter and 6 basis points from
prior year same quarter. Our ratio of average loans to deposits,
including repurchase agreements, for the quarter ended December 31,
2016 was 87.9% compared to 88.3% for the quarter ended September
30, 2016 and 87.5% for the quarter ended December 31, 2015. Net
interest income for the year ended December 31, 2016 of $133.0
million was an increase of $0.8 million, or 0.6%, over 2015,
although we experienced an 11 basis point decline in our net
interest margin. Average earning assets for the year ended December
31, 2016 increased $128.2 million over prior year.
Noninterest Income
Noninterest income for the quarter ended December 31, 2016 of
$12.5 million was a decrease of $0.7 million, or 5.1%, from prior
quarter but an increase of $0.7 million, or 6.0%, from prior year
same quarter. The decrease from prior quarter was due to decreases
in gains on sales of loans, deposit service charges, and securities
gains, partially offset by an increase in loan related fees. Gains
on sales of loans and securities gains, however, increased from
prior year same quarter. Loan related fees were affected by
fluctuations in the fair value adjustments of our mortgage
servicing rights with an increase of $0.3 million from prior
quarter and from same quarter last year. Noninterest income for the
year ended December 31, 2016 of $48.4 million was an increase of
$1.6 million, or 3.5%, from 2015. The increase in noninterest
income year over year was primarily due to a $0.7 million increase
in deposit services charges, a $0.3 million increase in trust
revenue, a $0.3 million increase in loan related fees, and a $0.6
million positive variance in securities gains (losses).
Noninterest Expense
Noninterest expense for the quarter ended December 31, 2016 of
$27.0 million was an increase of $0.3 million, or 1.2%, from prior
quarter and $1.2 million, or 4.8%, from prior year same quarter.
Noninterest expense for the year of $107.1 million increased $1.7
million, or 1.6%, from prior year. The increase in noninterest
expense was primarily due to an increase in personnel expense,
partially offset by decreased FDIC insurance expense. The increase
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.
Balance Sheet Review
CTBI’s total assets at $3.9 billion increased $1.9 million, or
an annualized 0.2%, from September 30, 2016 and $28.2 million, or
0.7%, from prior year. Loans outstanding at December 31, 2016 were
$2.9 billion, increasing $7.1 million, or an annualized 1.0%, from
September 30, 2016 and $64.4 million, or 2.2%, from prior year. We
experienced a decline during the quarter of $5.0 million in the
commercial loan portfolio, offset by increases of $1.5 million in
the residential loan portfolio, $9.3 million in the indirect loan
portfolio, and $1.3 million in the consumer direct loan portfolio.
CTBI’s investment portfolio decreased $26.1 million, or an
annualized 16.4%, from September 30, 2016 but increased $9.7
million, or 1.6%, from prior year. Deposits in other banks
increased $29.2 million from prior quarter, but decreased $42.1
million from December 31, 2015. Deposits, including repurchase
agreements, at $3.3 billion increased $16.1 million, or an
annualized 1.9%, from September 30, 2016 and $100.4 million, or
3.1%, from prior year.
Shareholders’ equity at December 31, 2016 was $500.6 million
compared to $500.1 million at September 30, 2016 and $475.6 million
at December 31, 2015. CTBI’s annualized dividend yield to
shareholders as of December 31, 2016 was 2.58%.
Asset Quality
CTBI’s total nonperforming loans were $27.5 million at December
31, 2016, a 2.9% decrease from the $28.3 million at September 30,
2016 and a 4.0% decrease from the $28.6 million at December 31,
2015. Loans 90+ days past due decreased $0.7 million during the
quarter and $1.2 million from December 31, 2015. Nonaccrual loans
decreased $0.2 million during the quarter but increased $0.1
million from December 31, 2015. Loans 30-89 days past due at $16.4
million was a decrease of $3.4 million from September 30, 2016 but
an increase of $2.0 million from December 31, 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 December 31, 2016 totaled $52.2
million, a decrease of $2.8 million from the $55.0 million at
September 30, 2016 but an increase of $2.3 million from the $49.9
million at December 31, 2015.
Our level of foreclosed properties at $35.9 million at December
31, 2016 was a $1.8 million decrease from the $37.7 million at
September 30, 2016 and a $4.8 million decrease from the $40.7
million at December 31, 2015. Sales of foreclosed properties for
the quarter ended December 31, 2016 totaled $2.8 million while new
foreclosed properties totaled $1.6 million. At December 31, 2016,
the book value of properties under contracts to sell was $1.9
million; however, the closings had not occurred at quarter-end.
Net loan charge-offs for the quarter ended December 31, 2016
were $1.9 million, or 0.26% of average loans annualized, compared
to $2.1 million, or 0.28%, experienced for the third quarter 2016
and $1.4 million, or 0.19%, for the fourth quarter 2015. Of the net
charge-offs for the quarter, $0.7 million were in commercial loans,
$0.9 million were in indirect auto loans, $0.2 million were in
residential real estate mortgage loans, and $0.1 million were in
consumer direct loans. Net charge-offs for the year 2016 were $8.0
million, or 0.28% of average loans, compared to $7.0 million, or
0.25% of average loans, for the year 2015. Allocations to loan loss
reserves were $2.0 million for the quarter ended December 31, 2016
compared to $2.2 million for the quarter ended September 30, 2016
and $1.9 million for the quarter ended December 31, 2015.
Allocations for the year 2016 were $7.9 million compared to $8.7
million for the year 2015. Our reserve coverage (allowance for loan
and lease loss reserve to nonperforming loans) at December 31, 2016
was 130.8% compared to 126.5% at September 30, 2016 and 126.2% at
December 31, 2015. Our loan loss reserve as a percentage of total
loans outstanding remained at 1.22% at December 31, 2016 compared
to prior quarter, down from the 1.26% at December 31, 2015.
Other Matters
Based on a recent discussion with a regulatory agency
representative concerning the status of an ongoing review of two
CTB deposit add-on products, CTBI believes it is likely that it
will be cited for two violations based on alleged unfair and
deceptive practices with respect to such products. CTBI has
evaluated the possible violations and their potential financial
impact. Based upon this analysis, management established an accrual
in 2014 for possible customer reimbursements. We have not received
a final written notice citing such violations and have not been
informed as to the amount of, or relevant time period for, related
reimbursement. The actual amount of reimbursement may materially
vary from the amount management has evaluated as most likely at
December 31, 2016.
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)
December 31, 2016
(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, 2016 September
30, 2016 December 31, 2015 December 31, 2016 December 31, 2015
Interest income $ 36,996 $ 36,679 $ 36,300 $ 146,576 $ 144,020
Interest expense 3,585 3,452
3,105 13,555 11,773 Net interest
income 33,411 33,227 33,195 133,021 132,247 Loan loss provision
2,043 2,191 1,910 7,872 8,650 Gains on sales of loans 474
595 403 1,831 1,978 Deposit service charges 6,286 6,563 6,306
24,966 24,282 Trust revenue 2,474 2,440 2,384 9,585 9,286 Loan
related fees 1,497 1,260 1,074 4,107 3,821 Securities gains
(losses) 0 458 (248 ) 522 (106 ) Other noninterest income
1,784 1,870 1,891 7,430
7,548 Total noninterest income 12,515 13,186
11,810 48,441 46,809 Personnel expense 14,404 14,216 13,321
57,075 54,563 Occupancy and equipment 2,737 2,745 2,643 10,949
10,875 Data processing expense 1,768 1,601 1,539 6,497 6,743 FDIC
insurance premiums 161 469 584 1,789 2,382 Other noninterest
expense 7,935 7,656 7,691
30,816 30,880 Total noninterest expense
27,005 26,687 25,778 107,126 105,443 Net income before taxes
16,878 17,535 17,317 66,464 64,963 Income taxes 5,012
5,223 5,447 19,118
18,531 Net income $ 11,866 $ 12,312 $ 11,870
$ 47,346 $ 46,432 Memo: TEQ interest
income $ 37,515 $ 37,178 $ 36,797 $ 148,631 $ 146,047
Average shares outstanding 17,593 17,554 17,464 17,548 17,431
Diluted average shares outstanding 17,617 17,569 17,516 17,566
17,483 Basic earnings per share $ 0.67 $ 0.70 $ 0.68 $ 2.70 $ 2.66
Diluted earnings per share $ 0.67 $ 0.70 $ 0.68 $ 2.70 $ 2.66
Dividends per share $ 0.320 $ 0.320 $ 0.310 $ 1.260 $ 1.220
Average balances: Loans $ 2,939,605 $ 2,931,791 $ 2,847,128
$ 2,916,031 $ 2,791,871 Earning assets 3,690,451 3,664,598
3,578,521 3,652,714 3,524,506 Total assets 3,959,515 3,932,705
3,844,441 3,920,257 3,790,282 Deposits, including repurchase
agreements 3,343,232 3,319,608 3,253,160 3,306,550 3,201,545
Interest bearing liabilities 2,643,451 2,634,254 2,586,609
2,629,484 2,569,344 Shareholders' equity 501,891 499,180 475,261
494,398 465,682
Performance ratios: Return on average
assets 1.19 % 1.25 % 1.22 % 1.21 % 1.23 % Return on average equity
9.41 % 9.81 % 9.91 % 9.58 % 9.97 % Yield on average earning assets
(tax equivalent) 4.04 % 4.04 % 4.08 % 4.07 % 4.14 % Cost of
interest bearing funds (tax equivalent) 0.54 % 0.52 % 0.48 % 0.52 %
0.46 % Net interest margin (tax equivalent) 3.66 % 3.66 % 3.74 %
3.70 % 3.81 % Efficiency ratio (tax equivalent) 58.15 % 57.45 %
56.35 % 58.54 % 58.20 % Loan charge-offs $ 2,939 $ 2,962 $
2,051 $ 11,668 $ 9,870 Recoveries (1,028 ) (875 )
(695 ) (3,635 ) (2,867 ) Net charge-offs $
1,911 $ 2,087 $ 1,356 $ 8,033 $ 7,003
Market Price:
High $ 51.35 $ 37.49 $ 37.15 $ 51.35 $ 37.63 Low $ 35.85 $ 33.71 $
33.68 $ 30.89 $ 31.53 Close $ 49.60 $ 37.11 $ 34.96 $ 49.60 $ 34.96
Community Trust Bancorp, Inc. Financial Summary
(Unaudited) December 31, 2016
(in thousands except per share data and #
of employees)
As of As of As of December 31, 2016 September 30, 2016
December 31, 2015
Assets: Loans $ 2,938,371
$ 2,931,299 $ 2,873,961 Loan loss reserve (35,933 )
(35,801 ) (36,094 ) Net loans 2,902,438 2,895,498 2,837,867
Loans held for sale 1,244 2,075 1,172 Securities AFS 605,394
631,201 594,936 Securities HTM 866 1,181 1,661 Other equity
investments 22,814 22,814 22,814 Other earning assets 98,937 74,419
141,313 Cash and due from banks 48,603 49,584 51,974 Premises and
equipment 47,940 47,840 48,188 Goodwill and core deposit intangible
65,623 65,662 65,781 Other assets 138,310
139,952 138,228
Total Assets $
3,932,169 $ 3,930,226 $ 3,903,934
Liabilities and Equity: NOW accounts $ 45,872 $ 45,834 $
44,567 Savings deposits 1,054,475 1,023,590 997,042 CD's
>=$100,000 598,832 597,417 559,497 Other time deposits
614,211 623,957 629,701 Total
interest bearing deposits 2,313,390 2,290,798 2,230,807 Noninterest
bearing deposits 767,918 763,187
749,975 Total deposits 3,081,308 3,053,985 2,980,782
Repurchase agreements 251,065 262,295 251,225 Other interest
bearing liabilities 67,101 69,110 165,993 Noninterest bearing
liabilities 32,080 44,726 30,351
Total liabilities 3,431,554 3,430,116 3,428,351
Shareholders' equity 500,615 500,110
475,583
Total Liabilities and Equity $
3,932,169 $ 3,930,226 $ 3,903,934
Ending shares outstanding 17,629 17,608 17,537 Memo: Market value
of HTM securities $ 867 $ 1,182 $ 1,651 30 - 89 days past
due loans $ 16,408 $ 19,765 $ 14,401 90 days past due loans 10,847
11,498 12,046 Nonaccrual loans 16,623 16,798 16,563 Restructured
loans (excluding 90 days past due and nonaccrual) 54,633 54,026
49,283 Foreclosed properties 35,856 37,665 40,674 Other repossessed
assets 103 103 183 Common equity Tier 1 capital 15.18 %
14.97 % 14.58 % Tier 1 leverage ratio 12.75 % 12.69 % 12.40 % Tier
1 risk-based capital ratio 17.25 % 17.05 % 16.70 % Total risk based
capital ratio 18.50 % 18.30 % 17.95 % Tangible equity to tangible
assets ratio 11.25 % 11.24 % 10.68 % FTE employees 996 991 984
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version on businesswire.com: http://www.businesswire.com/news/home/20170118005754/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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