Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Community Trust Bancorp, Inc. Reports Earnings for the 3rd Quarter 2022 By: Community Trust Bancorp, Inc. via Business Wire October 19, 2022 at 08:15 AM EDT Community Trust Bancorp, Inc. (NASDAQ:CTBI): Earnings Summary (in thousands except per share data) 3Q 2022 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Net income $19,372 $20,271 $21,142 $59,371 $68,691 Earnings per share $1.09 $1.14 $1.19 $3.33 $3.86 Earnings per share - diluted $1.08 $1.14 $1.19 $3.33 $3.86 Return on average assets 1.40% 1.49% 1.54% 1.46% 1.71% Return on average equity 12.08% 12.75% 12.06% 12.20% 13.55% Efficiency ratio 53.70% 53.77% 53.50% 53.58% 52.35% Tangible common equity 9.93% 10.53% 11.77% Dividends declared per share $0.44 $0.40 $0.40 $1.24 $1.17 Book value per share $33.66 $35.32 $38.78 Weighted average shares 17,841 17,835 17,790 17,832 17,783 Weighted average shares - diluted 17,857 17,843 17,808 17,844 17,798 Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved earnings for the third quarter 2022 of $19.4 million, or $1.09 per basic share, compared to $20.3 million, or $1.14 per basic share, earned during the second quarter 2022 and $21.1 million, or $1.19 per basic share, earned during the third quarter 2021. Total revenue was $2.9 million above prior quarter and $1.8 million above prior year same quarter. Net interest revenue increased $2.7 million compared to prior quarter and $1.5 million compared to prior year same quarter, and noninterest income increased $0.2 million compared to prior quarter and $0.3 million compared to prior year same quarter. Provision for credit losses for the quarter was $2.4 million, compared to provision of $0.1 million for the quarter ended June 30, 2022 and a recovery of provision of $0.2 million for the third quarter 2021. Noninterest expense increased $1.5 million compared to prior quarter and $1.1 million compared to prior year same quarter. Net income for the nine months ended September 30, 2022 was below prior year by $9.3 million, primarily due to the $6.9 million recovery of provision for credit losses taken in 2021 and the $4.2 million decline in gains on sales of loans. 3rd Quarter 2022 Highlights Net interest income for the quarter of $43.5 million was $2.7 million above prior quarter and $1.5 million above prior year same quarter. Provision for credit losses for the quarter was $2.4 million, compared to provision of $0.1 million for the quarter ended June 30, 2022 and a recovery of provision of $0.2 million for the third quarter 2021. Our loan portfolio increased $72.2 million, an annualized 8.0%, from June 30, 2022 and $232.4 million, or 6.8%, from September 30, 2021. Net loan charge-offs were $0.3 million, or 0.04% of average loans annualized, for the quarter ended September 30, 2022 compared to $0.04 million, or less than 0.01% of average loans annualized, for the second quarter 2022 and $0.3 million, or 0.04% of average loans annualized for the quarter ended September 30, 2021. Our nonperforming loans, excluding troubled debt restructurings, decreased slightly to $13.7 million at September 30, 2022 from $13.8 million at June 30, 2022 but were $5.0 million below the $18.7 million at September 30, 2021. Nonperforming assets at $15.6 million decreased $0.2 million from June 30, 2022 and $7.5 million from September 30, 2021. Deposits, including repurchase agreements, at $4.8 billion increased $53.5 million, or an annualized 4.5%, from June 30, 2022 and $176.9 million, or 3.9%, from September 30, 2021. Shareholders’ equity declined $29.5 million, or an annualized 18.5%, during the quarter and $89.1 million, or 12.9%, from September 30, 2021, as a result of the continued increase in unrealized losses on our securities portfolio. Noninterest income for the quarter ended September 30, 2022 of $14.7 million was $0.2 million, or 1.2%, above prior quarter and $0.3 million, or 2.0%, above prior year same quarter. Noninterest expense for the quarter ended September 30, 2022 of $31.5 million was $1.5 million, or 5.0%, higher than prior quarter and $1.1 million, or 3.8%, above prior year same quarter. Net Interest Income Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Percent Change Components of net interest income: Income on earning assets $51,405 $45,352 $45,726 13.3% 12.4% $140,284 $133,812 4.8% Expense on interest bearing liabilities 7,869 4,562 3,712 72.5% 112.0% 15,926 11,549 37.9% Net interest income 43,536 40,790 42,014 6.7% 3.6% 124,358 122,263 1.7% TEQ 240 233 226 3.0% 6.2% 707 673 5.1% Net interest income, tax equivalent $43,776 $41,023 $42,240 6.7% 3.6% $125,065 $122,936 1.7% Average yield and rates paid: Earning assets yield 3.97% 3.56% 3.52% 11.6% 12.8% 3.66% 3.52% 4.1% Rate paid on interest bearing liabilities 0.93% 0.54% 0.43% 71.4% 115.2% 0.63% 0.46% 39.1% Gross interest margin 3.04% 3.02% 3.09% 0.7% (1.6%) 3.03% 3.06% (1.0%) Net interest margin 3.36% 3.20% 3.23% 5.1% 4.1% 3.25% 3.22% 1.0% Average balances: Investment securities $1,380,881 $1,452,021 $1,511,178 (4.9%) (8.6%) $1,438,769 $1,266,850 13.6% Loans $3,568,174 $3,538,324 $3,400,194 0.8% 4.9% $3,516,114 $3,480,860 1.0% Earning assets $5,163,624 $5,140,656 $5,184,749 0.4% (0.4%) $5,146,251 $5,109,934 0.7% Interest-bearing liabilities $3,359,242 $3,373,741 $3,410,286 (0.4%) (1.5%) $3,361,097 $3,390,178 (0.9%) Net interest income for the quarter of $43.5 million was $2.7 million above prior quarter and $1.5 million above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.36% increased 16 basis points from prior quarter and 13 basis points from prior year same quarter, as our average earning assets increased $23.0 million from prior quarter but decreased $21.1 million from prior year same quarter. Our yield on average earning assets increased 41 basis points from prior quarter and 45 basis points from prior year same quarter, and our cost of funds increased 39 basis points from prior quarter and 50 basis points from prior year same quarter. Noninterest bearing deposits increased $72.9 million over prior quarter and $162.9 million over prior year. Net interest income for the nine months ended September 30, 2022 increased $2.1 million or 1.7% from the nine months ended September 30, 2021. Our ratio of average loans to deposits, including repurchase agreements, was 75.4% for the quarter ended September 30, 2022 compared to 75.2% for the quarter ended June 30, 2022 and 73.1% for the quarter ended September 30, 2021. Noninterest Income Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Percent Change Deposit related fees $7,629 $7,263 $7,066 5.0% 8.0% $21,638 $19,446 11.3% Trust revenue 2,989 3,198 3,039 (6.5%) (1.6%) 9,435 9,339 1.0% Gains on sales of loans 235 519 1,239 (54.7%) (81.0%) 1,351 5,579 (75.8%) Loan related fees 1,589 1,415 1,050 12.3% 51.3% 5,066 4,324 17.2% Bank owned life insurance revenue 743 702 654 5.8% 13.6% 2,136 1,808 18.1% Brokerage revenue 453 459 519 (1.3%) (12.8%) 1,502 1,530 (1.8%) Other 1,041 945 821 10.3% 26.9% 3,017 3,460 (12.8%) Total noninterest income $14,679 $14,501 $14,388 1.2% 2.0% $44,145 $45,486 (2.9%) Noninterest income for the quarter ended September 30, 2022 of $14.7 million was $0.2 million, or 1.2%, above prior quarter and $0.3 million, or 2.0%, above prior year same quarter. The quarter over quarter increase included a $0.4 million increase in deposit related fees and a $0.2 million increase in loan related fees, partially offset by a $0.3 million decrease in gains on sales of loans and a $0.2 million decrease in trust revenue. Year-to-date noninterest income decreased $1.3 million from the nine months ended September 30, 2021 due to a $4.2 million decline in gains on sales of loans, partially offset by a $2.2 million increase in deposit related fees and a $0.7 million increase in loan related fees. Gains on sales of loans continue to be impacted by the slowdown in the industry-wide mortgage refinancing boom. Deposit related fees were primarily impacted by debit card income and overdraft charges. Loan related fees were primarily impacted by the change in the fair market value of mortgage servicing rights. The decrease in trust revenue quarter over quarter was due to the decline in the market value of managed assets. Noninterest Expense Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Percent Change Salaries $12,537 $12,219 $11,962 2.6% 4.8% $36,495 $35,080 4.0% Employee benefits 6,009 6,315 6,891 (4.8%) (12.8%) 18,123 19,566 (7.4%) Net occupancy and equipment 2,897 2,756 2,733 5.1% 6.0% 8,507 8,229 3.4% Data processing 2,270 2,095 1,911 8.3% 18.8% 6,566 5,940 10.5% Legal and professional fees 752 884 685 (15.0%) 9.7% 2,503 2,331 7.4% Advertising and marketing 769 659 819 16.7% (6.1%) 2,180 2,251 (3.2%) Taxes other than property and payroll 422 425 464 (0.8%) (9.1%) 1,274 1,209 5.4% Net other real estate owned expense 41 43 296 (4.3%) (86.2%) 438 1,102 (60.2%) Other 5,778 4,582 4,567 26.1% 26.5% 14,726 12,428 18.5% Total noninterest expense $31,475 $29,978 $30,328 5.0% 3.8% $90,812 $88,136 3.0% Noninterest expense for the quarter ended September 30, 2022 of $31.5 million was $1.5 million, or 5.0%, higher than prior quarter and $1.1 million, or 3.8%, above prior year same quarter. The increase in noninterest expense quarter over quarter was primarily the result of a $1.4 million accrual for customer refunds of re-presented returned item fees. Noninterest expense for the nine months ended September 30, 2022 was $2.7 million higher than the nine months ended September 30, 2021. Balance Sheet Review Total Loans Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 Commercial nonresidential real estate $756,138 $758,227 $732,442 (0.3%) 3.2% Commercial residential real estate 359,643 354,668 330,660 1.4% 8.8% Hotel/motel 335,253 280,956 252,951 19.3% 32.5% SBA guaranteed PPP loans 1,958 7,788 99,116 (74.9%) (98.0%) Other commercial 383,398 395,876 347,632 (3.2%) 10.3% Total commercial 1,836,390 1,797,515 1,762,801 2.2% 4.2% Residential mortgage 814,944 793,249 763,005 2.7% 6.8% Home equity loans/lines 115,400 110,828 105,007 4.1% 9.9% Total residential 930,344 904,077 868,012 2.9% 7.2% Consumer indirect 703,016 697,060 612,394 0.9% 14.8% Consumer direct 160,866 159,791 155,022 0.7% 3.8% Total consumer 863,882 856,851 767,416 0.8% 12.6% Total loans $3,630,616 $3,558,443 $3,398,229 2.0% 6.8% Total Deposits and Repurchase Agreements Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 Non-interest bearing deposits $1,481,078 $1,408,148 $1,318,158 5.2% 12.4% Interest bearing deposits Interest checking 100,680 99,055 90,657 1.6% 11.1% Money market savings 1,268,682 1,243,817 1,210,551 2.0% 4.8% Savings accounts 683,697 671,349 616,561 1.8% 10.9% Time deposits 1,000,931 1,050,559 1,060,309 (4.7%) (5.6%) Repurchase agreements 230,123 238,733 292,022 (3.6%) (21.2%) Total interest bearing deposits and repurchase agreements 3,284,113 3,303,513 3,270,100 (0.6%) 0.4% Total deposits and repurchase agreements $4,765,191 $4,711,661 $4,588,258 1.1% 3.9% CTBI’s total assets at $5.5 billion increased $27.0 million, or 2.0% annualized, from June 30, 2022 and $88.8 million, or 1.6%, from September 30, 2021. Loans outstanding at September 30, 2022 were $3.6 billion, an increase of $72.2 million, an annualized 8.0%, from June 30, 2022 and $232.4 million, or 6.8%, from September 30, 2021. The increase in loans included a $38.9 million increase in the commercial loan portfolio, a $26.3 million increase in the residential loan portfolio, a $5.9 million increase in the indirect consumer loan portfolio, and a $1.1 million increase in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $103.7 million, or an annualized 29.3%, from June 30, 2022 and $227.6 million, or 14.9%, from September 30, 2021. Deposits in other banks increased $62.8 million from prior quarter and $58.4 million from prior year same quarter. Deposits, including repurchase agreements, at $4.8 billion increased $53.5 million, or an annualized 4.5%, from June 30, 2022 and $176.9 million, or 3.9%, from September 30, 2021. Shareholders’ equity declined $29.5 million, or an annualized 18.5%, during the quarter and $89.1 million, or 12.9%, from September 30, 2021, as a result of the continued increase in unrealized losses on our securities portfolio due to the current increasing interest rate environment. Management has the ability and intent to hold these securities to recovery or maturity. We experienced a $41.5 million increase in accumulated other comprehensive loss, net of tax, resulting from increases in unrealized losses on our securities portfolio during the quarter. CTBI’s annualized dividend yield to shareholders as of September 30, 2022 was 4.34%. Asset Quality Our total nonperforming loans, excluding troubled debt restructurings, decreased slightly to $13.7 million at September 30, 2022 from $13.8 million at June 30, 2022 but were $5.0 million below the $18.7 million at September 30, 2021. Accruing loans 90+ days past due at $5.6 million increased $0.5 million from prior quarter but decreased $1.1 million from September 30, 2021. Nonaccrual loans at $8.1 million decreased $0.7 million from prior quarter and $3.9 million from September 30, 2021. Accruing loans 30-89 days past due at $12.1 million increased $1.5 million from prior quarter and $3.2 million from September 30, 2021. Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss. Our level of foreclosed properties were $1.9 million at September 30, 2022 compared to $2.0 million at June 30, 2022 and $4.3 million at September 30, 2021. Sales of foreclosed properties for the quarter ended September 30, 2022 totaled $0.1 million while new foreclosed properties totaled $0.03 million. At September 30, 2022, the book value of properties under contracts to sell was $0.4 million; however, the closings had not occurred at quarter-end. Net loan charge-offs were $0.3 million, or 0.04% of average loans annualized, for the quarter ended September 30, 2022 compared to $0.04 million, or less than 0.01% of average loans annualized, for the second quarter 2022 and $0.3 million, or 0.04% of average loans annualized for the quarter ended September 30, 2021. Year-to-date net loan charge-offs were $0.7 million, or 0.03% of average loans annualized, compared to a net recovery of loan charge-offs of $0.1 million for the first nine months of 2021. Allowance for Credit Losses Provision for credit losses for the quarter was $2.4 million, compared to provision of $0.1 million for the quarter ended June 30, 2022 and a recovery of provision of $0.2 million for the third quarter 2021. Year-to-date provision was $3.4 million compared to a recovery of $6.9 million during the first nine months of 2021. Our reserve coverage (allowance for credit losses to nonperforming loans) at September 30, 2022 was 324.5% compared to 305.9% at June 30, 2022 and 220.0% at September 30, 2021. Our credit loss reserve as a percentage of total loans outstanding at September 30, 2022 was 1.22% compared to 1.19% at June 30, 2022 and 1.21% at September 30, 2021. 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; the effects of the COVID-19 pandemic on our business operations and credit quality and on general economic and financial market conditions, as well as our ability to respond to the related challenges; 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, regulations, and enforcement actions 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 $5.5 billion, is headquartered in Pikeville, Kentucky and has 68 banking locations across eastern, northeastern, central, and south central Kentucky, six banking locations in southern West Virginia, three 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, 2022 (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, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Interest income $ 51,405 $ 45,352 $ 45,726 $ 140,284 $ 133,812 Interest expense 7,869 4,562 3,712 15,926 11,549 Net interest income 43,536 40,790 42,014 124,358 122,263 Loan loss provision 2,414 77 (163) 3,366 (6,919) Gains on sales of loans 235 519 1,239 1,351 5,579 Deposit related fees 7,629 7,263 7,066 21,638 19,446 Trust revenue 2,989 3,198 3,039 9,435 9,339 Loan related fees 1,589 1,415 1,050 5,066 4,324 Securities gains (losses) (159) (225) (62) (285) 50 Other noninterest income 2,396 2,331 2,056 6,940 6,748 Total noninterest income 14,679 14,501 14,388 44,145 45,486 Personnel expense 18,546 18,534 18,853 54,618 54,646 Occupancy and equipment 2,897 2,756 2,733 8,507 8,229 Data processing expense 2,270 2,095 1,911 6,566 5,940 FDIC insurance premiums 360 358 393 1,073 1,042 Other noninterest expense 7,402 6,235 6,438 20,048 18,279 Total noninterest expense 31,475 29,978 30,328 90,812 88,136 Net income before taxes 24,326 25,236 26,237 74,325 86,532 Income taxes 4,954 4,965 5,095 14,954 17,841 Net income $ 19,372 $ 20,271 $ 21,142 $ 59,371 $ 68,691 Memo: TEQ interest income $ 51,645 $ 45,584 $ 45,952 $ 140,991 $ 134,485 Average shares outstanding 17,841 17,835 17,790 17,832 17,783 Diluted average shares outstanding 17,857 17,843 17,808 17,844 17,798 Basic earnings per share $ 1.09 $ 1.14 $ 1.19 $ 3.33 $ 3.86 Diluted earnings per share $ 1.08 $ 1.14 $ 1.19 $ 3.33 $ 3.86 Dividends per share $ 0.440 $ 0.400 $ 0.400 $ 1.240 $ 1.170 Average balances: Loans $ 3,568,174 $ 3,538,324 $ 3,400,194 $ 3,516,114 $ 3,480,860 Earning assets 5,163,624 5,140,656 5,184,749 5,146,251 5,109,934 Total assets 5,477,596 5,446,263 5,457,558 5,447,439 5,376,588 Deposits, including repurchase agreements 4,733,393 4,705,492 4,650,885 4,691,322 4,585,812 Interest bearing liabilities 3,359,242 3,373,741 3,410,286 3,361,097 3,390,178 Shareholders' equity 636,038 637,542 695,490 650,877 677,632 Performance ratios: Return on average assets 1.40% 1.49% 1.54% 1.46% 1.71% Return on average equity 12.08% 12.75% 12.06% 12.20% 13.55% Yield on average earning assets (tax equivalent) 3.97% 3.56% 3.52% 3.66% 3.52% Cost of interest bearing funds (tax equivalent) 0.93% 0.54% 0.43% 0.63% 0.46% Net interest margin (tax equivalent) 3.36% 3.20% 3.23% 3.25% 3.22% Efficiency ratio (tax equivalent) 53.70% 53.77% 53.50% 53.58% 52.35% Loan charge-offs $ 1,203 $ 828 $ 1,042 $ 3,351 $ 3,460 Recoveries (878) (786) (725) (2,662) (3,572) Net charge-offs $ 325 $ 42 $ 317 $ 689 $ (112) Market Price: High $ 45.37 $ 42.91 $ 42.95 $ 46.30 $ 47.53 Low $ 39.65 $ 39.10 $ 38.20 $ 39.10 $ 36.02 Close $ 40.55 $ 40.44 $ 42.10 $ 40.55 $ 42.10 As of As of As of September 30, 2022 June 30, 2022 September 30, 2021 Assets: Loans $ 3,630,616 $ 3,558,443 $ 3,398,229 Loan loss reserve (44,433) (42,344) (41,215) Net loans 3,586,183 3,516,099 3,357,014 Loans held for sale 1,043 936 12,056 Securities AFS 1,298,592 1,402,127 1,525,738 Equity securities at fair value 1,969 2,128 2,461 Other equity investments 11,563 13,026 13,026 Other earning assets 201,196 140,384 143,789 Cash and due from banks 60,527 75,373 66,075 Premises and equipment 41,593 40,704 40,145 Right of use asset 12,131 12,005 12,399 Goodwill and core deposit intangible 65,490 65,490 65,490 Other assets 194,051 179,078 147,392 Total Assets $ 5,474,338 $ 5,447,350 $ 5,385,585 Liabilities and Equity: Interest bearing checking $ 100,680 $ 99,055 $ 90,657 Savings deposits 1,952,379 1,915,166 1,827,112 CD's >=$100,000 537,233 573,519 565,869 Other time deposits 463,698 477,040 494,440 Total interest bearing deposits 3,053,990 3,064,780 2,978,078 Noninterest bearing deposits 1,481,078 1,408,148 1,318,158 Total deposits 4,535,068 4,472,928 4,296,236 Repurchase agreements 230,123 238,733 292,022 Other interest bearing liabilities 58,701 58,706 58,721 Lease liability 12,636 12,479 13,229 Other noninterest bearing liabilities 35,250 32,454 33,734 Total liabilities 4,871,778 4,815,300 4,693,942 Shareholders' equity 602,560 632,050 691,643 Total Liabilities and Equity $ 5,474,338 $ 5,447,350 $ 5,385,585 Ending shares outstanding 17,901 17,895 17,837 30 - 89 days past due loans $ 12,058 $ 10,595 $ 8,874 90 days past due loans 5,554 5,018 6,650 Nonaccrual loans 8,138 8,824 12,084 Restructured loans (excluding 90 days past due and nonaccrual) 79,092 75,264 70,932 Foreclosed properties 1,864 1,954 4,314 Community bank leverage ratio 13.24% 13.14% 12.71% Tangible equity to tangible assets ratio 9.93% 10.53% 11.77% FTE employees 964 958 960 View source version on businesswire.com: https://www.businesswire.com/news/home/20221019005271/en/Contacts Mark A. Gooch Vice Chairman, President, and Ceo Community Trust Bancorp, Inc. (606) 437-3229 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Community Trust Bancorp, Inc. Reports Earnings for the 3rd Quarter 2022 By: Community Trust Bancorp, Inc. via Business Wire October 19, 2022 at 08:15 AM EDT Community Trust Bancorp, Inc. (NASDAQ:CTBI): Earnings Summary (in thousands except per share data) 3Q 2022 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Net income $19,372 $20,271 $21,142 $59,371 $68,691 Earnings per share $1.09 $1.14 $1.19 $3.33 $3.86 Earnings per share - diluted $1.08 $1.14 $1.19 $3.33 $3.86 Return on average assets 1.40% 1.49% 1.54% 1.46% 1.71% Return on average equity 12.08% 12.75% 12.06% 12.20% 13.55% Efficiency ratio 53.70% 53.77% 53.50% 53.58% 52.35% Tangible common equity 9.93% 10.53% 11.77% Dividends declared per share $0.44 $0.40 $0.40 $1.24 $1.17 Book value per share $33.66 $35.32 $38.78 Weighted average shares 17,841 17,835 17,790 17,832 17,783 Weighted average shares - diluted 17,857 17,843 17,808 17,844 17,798 Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved earnings for the third quarter 2022 of $19.4 million, or $1.09 per basic share, compared to $20.3 million, or $1.14 per basic share, earned during the second quarter 2022 and $21.1 million, or $1.19 per basic share, earned during the third quarter 2021. Total revenue was $2.9 million above prior quarter and $1.8 million above prior year same quarter. Net interest revenue increased $2.7 million compared to prior quarter and $1.5 million compared to prior year same quarter, and noninterest income increased $0.2 million compared to prior quarter and $0.3 million compared to prior year same quarter. Provision for credit losses for the quarter was $2.4 million, compared to provision of $0.1 million for the quarter ended June 30, 2022 and a recovery of provision of $0.2 million for the third quarter 2021. Noninterest expense increased $1.5 million compared to prior quarter and $1.1 million compared to prior year same quarter. Net income for the nine months ended September 30, 2022 was below prior year by $9.3 million, primarily due to the $6.9 million recovery of provision for credit losses taken in 2021 and the $4.2 million decline in gains on sales of loans. 3rd Quarter 2022 Highlights Net interest income for the quarter of $43.5 million was $2.7 million above prior quarter and $1.5 million above prior year same quarter. Provision for credit losses for the quarter was $2.4 million, compared to provision of $0.1 million for the quarter ended June 30, 2022 and a recovery of provision of $0.2 million for the third quarter 2021. Our loan portfolio increased $72.2 million, an annualized 8.0%, from June 30, 2022 and $232.4 million, or 6.8%, from September 30, 2021. Net loan charge-offs were $0.3 million, or 0.04% of average loans annualized, for the quarter ended September 30, 2022 compared to $0.04 million, or less than 0.01% of average loans annualized, for the second quarter 2022 and $0.3 million, or 0.04% of average loans annualized for the quarter ended September 30, 2021. Our nonperforming loans, excluding troubled debt restructurings, decreased slightly to $13.7 million at September 30, 2022 from $13.8 million at June 30, 2022 but were $5.0 million below the $18.7 million at September 30, 2021. Nonperforming assets at $15.6 million decreased $0.2 million from June 30, 2022 and $7.5 million from September 30, 2021. Deposits, including repurchase agreements, at $4.8 billion increased $53.5 million, or an annualized 4.5%, from June 30, 2022 and $176.9 million, or 3.9%, from September 30, 2021. Shareholders’ equity declined $29.5 million, or an annualized 18.5%, during the quarter and $89.1 million, or 12.9%, from September 30, 2021, as a result of the continued increase in unrealized losses on our securities portfolio. Noninterest income for the quarter ended September 30, 2022 of $14.7 million was $0.2 million, or 1.2%, above prior quarter and $0.3 million, or 2.0%, above prior year same quarter. Noninterest expense for the quarter ended September 30, 2022 of $31.5 million was $1.5 million, or 5.0%, higher than prior quarter and $1.1 million, or 3.8%, above prior year same quarter. Net Interest Income Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Percent Change Components of net interest income: Income on earning assets $51,405 $45,352 $45,726 13.3% 12.4% $140,284 $133,812 4.8% Expense on interest bearing liabilities 7,869 4,562 3,712 72.5% 112.0% 15,926 11,549 37.9% Net interest income 43,536 40,790 42,014 6.7% 3.6% 124,358 122,263 1.7% TEQ 240 233 226 3.0% 6.2% 707 673 5.1% Net interest income, tax equivalent $43,776 $41,023 $42,240 6.7% 3.6% $125,065 $122,936 1.7% Average yield and rates paid: Earning assets yield 3.97% 3.56% 3.52% 11.6% 12.8% 3.66% 3.52% 4.1% Rate paid on interest bearing liabilities 0.93% 0.54% 0.43% 71.4% 115.2% 0.63% 0.46% 39.1% Gross interest margin 3.04% 3.02% 3.09% 0.7% (1.6%) 3.03% 3.06% (1.0%) Net interest margin 3.36% 3.20% 3.23% 5.1% 4.1% 3.25% 3.22% 1.0% Average balances: Investment securities $1,380,881 $1,452,021 $1,511,178 (4.9%) (8.6%) $1,438,769 $1,266,850 13.6% Loans $3,568,174 $3,538,324 $3,400,194 0.8% 4.9% $3,516,114 $3,480,860 1.0% Earning assets $5,163,624 $5,140,656 $5,184,749 0.4% (0.4%) $5,146,251 $5,109,934 0.7% Interest-bearing liabilities $3,359,242 $3,373,741 $3,410,286 (0.4%) (1.5%) $3,361,097 $3,390,178 (0.9%) Net interest income for the quarter of $43.5 million was $2.7 million above prior quarter and $1.5 million above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.36% increased 16 basis points from prior quarter and 13 basis points from prior year same quarter, as our average earning assets increased $23.0 million from prior quarter but decreased $21.1 million from prior year same quarter. Our yield on average earning assets increased 41 basis points from prior quarter and 45 basis points from prior year same quarter, and our cost of funds increased 39 basis points from prior quarter and 50 basis points from prior year same quarter. Noninterest bearing deposits increased $72.9 million over prior quarter and $162.9 million over prior year. Net interest income for the nine months ended September 30, 2022 increased $2.1 million or 1.7% from the nine months ended September 30, 2021. Our ratio of average loans to deposits, including repurchase agreements, was 75.4% for the quarter ended September 30, 2022 compared to 75.2% for the quarter ended June 30, 2022 and 73.1% for the quarter ended September 30, 2021. Noninterest Income Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Percent Change Deposit related fees $7,629 $7,263 $7,066 5.0% 8.0% $21,638 $19,446 11.3% Trust revenue 2,989 3,198 3,039 (6.5%) (1.6%) 9,435 9,339 1.0% Gains on sales of loans 235 519 1,239 (54.7%) (81.0%) 1,351 5,579 (75.8%) Loan related fees 1,589 1,415 1,050 12.3% 51.3% 5,066 4,324 17.2% Bank owned life insurance revenue 743 702 654 5.8% 13.6% 2,136 1,808 18.1% Brokerage revenue 453 459 519 (1.3%) (12.8%) 1,502 1,530 (1.8%) Other 1,041 945 821 10.3% 26.9% 3,017 3,460 (12.8%) Total noninterest income $14,679 $14,501 $14,388 1.2% 2.0% $44,145 $45,486 (2.9%) Noninterest income for the quarter ended September 30, 2022 of $14.7 million was $0.2 million, or 1.2%, above prior quarter and $0.3 million, or 2.0%, above prior year same quarter. The quarter over quarter increase included a $0.4 million increase in deposit related fees and a $0.2 million increase in loan related fees, partially offset by a $0.3 million decrease in gains on sales of loans and a $0.2 million decrease in trust revenue. Year-to-date noninterest income decreased $1.3 million from the nine months ended September 30, 2021 due to a $4.2 million decline in gains on sales of loans, partially offset by a $2.2 million increase in deposit related fees and a $0.7 million increase in loan related fees. Gains on sales of loans continue to be impacted by the slowdown in the industry-wide mortgage refinancing boom. Deposit related fees were primarily impacted by debit card income and overdraft charges. Loan related fees were primarily impacted by the change in the fair market value of mortgage servicing rights. The decrease in trust revenue quarter over quarter was due to the decline in the market value of managed assets. Noninterest Expense Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Percent Change Salaries $12,537 $12,219 $11,962 2.6% 4.8% $36,495 $35,080 4.0% Employee benefits 6,009 6,315 6,891 (4.8%) (12.8%) 18,123 19,566 (7.4%) Net occupancy and equipment 2,897 2,756 2,733 5.1% 6.0% 8,507 8,229 3.4% Data processing 2,270 2,095 1,911 8.3% 18.8% 6,566 5,940 10.5% Legal and professional fees 752 884 685 (15.0%) 9.7% 2,503 2,331 7.4% Advertising and marketing 769 659 819 16.7% (6.1%) 2,180 2,251 (3.2%) Taxes other than property and payroll 422 425 464 (0.8%) (9.1%) 1,274 1,209 5.4% Net other real estate owned expense 41 43 296 (4.3%) (86.2%) 438 1,102 (60.2%) Other 5,778 4,582 4,567 26.1% 26.5% 14,726 12,428 18.5% Total noninterest expense $31,475 $29,978 $30,328 5.0% 3.8% $90,812 $88,136 3.0% Noninterest expense for the quarter ended September 30, 2022 of $31.5 million was $1.5 million, or 5.0%, higher than prior quarter and $1.1 million, or 3.8%, above prior year same quarter. The increase in noninterest expense quarter over quarter was primarily the result of a $1.4 million accrual for customer refunds of re-presented returned item fees. Noninterest expense for the nine months ended September 30, 2022 was $2.7 million higher than the nine months ended September 30, 2021. Balance Sheet Review Total Loans Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 Commercial nonresidential real estate $756,138 $758,227 $732,442 (0.3%) 3.2% Commercial residential real estate 359,643 354,668 330,660 1.4% 8.8% Hotel/motel 335,253 280,956 252,951 19.3% 32.5% SBA guaranteed PPP loans 1,958 7,788 99,116 (74.9%) (98.0%) Other commercial 383,398 395,876 347,632 (3.2%) 10.3% Total commercial 1,836,390 1,797,515 1,762,801 2.2% 4.2% Residential mortgage 814,944 793,249 763,005 2.7% 6.8% Home equity loans/lines 115,400 110,828 105,007 4.1% 9.9% Total residential 930,344 904,077 868,012 2.9% 7.2% Consumer indirect 703,016 697,060 612,394 0.9% 14.8% Consumer direct 160,866 159,791 155,022 0.7% 3.8% Total consumer 863,882 856,851 767,416 0.8% 12.6% Total loans $3,630,616 $3,558,443 $3,398,229 2.0% 6.8% Total Deposits and Repurchase Agreements Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 Non-interest bearing deposits $1,481,078 $1,408,148 $1,318,158 5.2% 12.4% Interest bearing deposits Interest checking 100,680 99,055 90,657 1.6% 11.1% Money market savings 1,268,682 1,243,817 1,210,551 2.0% 4.8% Savings accounts 683,697 671,349 616,561 1.8% 10.9% Time deposits 1,000,931 1,050,559 1,060,309 (4.7%) (5.6%) Repurchase agreements 230,123 238,733 292,022 (3.6%) (21.2%) Total interest bearing deposits and repurchase agreements 3,284,113 3,303,513 3,270,100 (0.6%) 0.4% Total deposits and repurchase agreements $4,765,191 $4,711,661 $4,588,258 1.1% 3.9% CTBI’s total assets at $5.5 billion increased $27.0 million, or 2.0% annualized, from June 30, 2022 and $88.8 million, or 1.6%, from September 30, 2021. Loans outstanding at September 30, 2022 were $3.6 billion, an increase of $72.2 million, an annualized 8.0%, from June 30, 2022 and $232.4 million, or 6.8%, from September 30, 2021. The increase in loans included a $38.9 million increase in the commercial loan portfolio, a $26.3 million increase in the residential loan portfolio, a $5.9 million increase in the indirect consumer loan portfolio, and a $1.1 million increase in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $103.7 million, or an annualized 29.3%, from June 30, 2022 and $227.6 million, or 14.9%, from September 30, 2021. Deposits in other banks increased $62.8 million from prior quarter and $58.4 million from prior year same quarter. Deposits, including repurchase agreements, at $4.8 billion increased $53.5 million, or an annualized 4.5%, from June 30, 2022 and $176.9 million, or 3.9%, from September 30, 2021. Shareholders’ equity declined $29.5 million, or an annualized 18.5%, during the quarter and $89.1 million, or 12.9%, from September 30, 2021, as a result of the continued increase in unrealized losses on our securities portfolio due to the current increasing interest rate environment. Management has the ability and intent to hold these securities to recovery or maturity. We experienced a $41.5 million increase in accumulated other comprehensive loss, net of tax, resulting from increases in unrealized losses on our securities portfolio during the quarter. CTBI’s annualized dividend yield to shareholders as of September 30, 2022 was 4.34%. Asset Quality Our total nonperforming loans, excluding troubled debt restructurings, decreased slightly to $13.7 million at September 30, 2022 from $13.8 million at June 30, 2022 but were $5.0 million below the $18.7 million at September 30, 2021. Accruing loans 90+ days past due at $5.6 million increased $0.5 million from prior quarter but decreased $1.1 million from September 30, 2021. Nonaccrual loans at $8.1 million decreased $0.7 million from prior quarter and $3.9 million from September 30, 2021. Accruing loans 30-89 days past due at $12.1 million increased $1.5 million from prior quarter and $3.2 million from September 30, 2021. Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss. Our level of foreclosed properties were $1.9 million at September 30, 2022 compared to $2.0 million at June 30, 2022 and $4.3 million at September 30, 2021. Sales of foreclosed properties for the quarter ended September 30, 2022 totaled $0.1 million while new foreclosed properties totaled $0.03 million. At September 30, 2022, the book value of properties under contracts to sell was $0.4 million; however, the closings had not occurred at quarter-end. Net loan charge-offs were $0.3 million, or 0.04% of average loans annualized, for the quarter ended September 30, 2022 compared to $0.04 million, or less than 0.01% of average loans annualized, for the second quarter 2022 and $0.3 million, or 0.04% of average loans annualized for the quarter ended September 30, 2021. Year-to-date net loan charge-offs were $0.7 million, or 0.03% of average loans annualized, compared to a net recovery of loan charge-offs of $0.1 million for the first nine months of 2021. Allowance for Credit Losses Provision for credit losses for the quarter was $2.4 million, compared to provision of $0.1 million for the quarter ended June 30, 2022 and a recovery of provision of $0.2 million for the third quarter 2021. Year-to-date provision was $3.4 million compared to a recovery of $6.9 million during the first nine months of 2021. Our reserve coverage (allowance for credit losses to nonperforming loans) at September 30, 2022 was 324.5% compared to 305.9% at June 30, 2022 and 220.0% at September 30, 2021. Our credit loss reserve as a percentage of total loans outstanding at September 30, 2022 was 1.22% compared to 1.19% at June 30, 2022 and 1.21% at September 30, 2021. 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; the effects of the COVID-19 pandemic on our business operations and credit quality and on general economic and financial market conditions, as well as our ability to respond to the related challenges; 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, regulations, and enforcement actions 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 $5.5 billion, is headquartered in Pikeville, Kentucky and has 68 banking locations across eastern, northeastern, central, and south central Kentucky, six banking locations in southern West Virginia, three 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, 2022 (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, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Interest income $ 51,405 $ 45,352 $ 45,726 $ 140,284 $ 133,812 Interest expense 7,869 4,562 3,712 15,926 11,549 Net interest income 43,536 40,790 42,014 124,358 122,263 Loan loss provision 2,414 77 (163) 3,366 (6,919) Gains on sales of loans 235 519 1,239 1,351 5,579 Deposit related fees 7,629 7,263 7,066 21,638 19,446 Trust revenue 2,989 3,198 3,039 9,435 9,339 Loan related fees 1,589 1,415 1,050 5,066 4,324 Securities gains (losses) (159) (225) (62) (285) 50 Other noninterest income 2,396 2,331 2,056 6,940 6,748 Total noninterest income 14,679 14,501 14,388 44,145 45,486 Personnel expense 18,546 18,534 18,853 54,618 54,646 Occupancy and equipment 2,897 2,756 2,733 8,507 8,229 Data processing expense 2,270 2,095 1,911 6,566 5,940 FDIC insurance premiums 360 358 393 1,073 1,042 Other noninterest expense 7,402 6,235 6,438 20,048 18,279 Total noninterest expense 31,475 29,978 30,328 90,812 88,136 Net income before taxes 24,326 25,236 26,237 74,325 86,532 Income taxes 4,954 4,965 5,095 14,954 17,841 Net income $ 19,372 $ 20,271 $ 21,142 $ 59,371 $ 68,691 Memo: TEQ interest income $ 51,645 $ 45,584 $ 45,952 $ 140,991 $ 134,485 Average shares outstanding 17,841 17,835 17,790 17,832 17,783 Diluted average shares outstanding 17,857 17,843 17,808 17,844 17,798 Basic earnings per share $ 1.09 $ 1.14 $ 1.19 $ 3.33 $ 3.86 Diluted earnings per share $ 1.08 $ 1.14 $ 1.19 $ 3.33 $ 3.86 Dividends per share $ 0.440 $ 0.400 $ 0.400 $ 1.240 $ 1.170 Average balances: Loans $ 3,568,174 $ 3,538,324 $ 3,400,194 $ 3,516,114 $ 3,480,860 Earning assets 5,163,624 5,140,656 5,184,749 5,146,251 5,109,934 Total assets 5,477,596 5,446,263 5,457,558 5,447,439 5,376,588 Deposits, including repurchase agreements 4,733,393 4,705,492 4,650,885 4,691,322 4,585,812 Interest bearing liabilities 3,359,242 3,373,741 3,410,286 3,361,097 3,390,178 Shareholders' equity 636,038 637,542 695,490 650,877 677,632 Performance ratios: Return on average assets 1.40% 1.49% 1.54% 1.46% 1.71% Return on average equity 12.08% 12.75% 12.06% 12.20% 13.55% Yield on average earning assets (tax equivalent) 3.97% 3.56% 3.52% 3.66% 3.52% Cost of interest bearing funds (tax equivalent) 0.93% 0.54% 0.43% 0.63% 0.46% Net interest margin (tax equivalent) 3.36% 3.20% 3.23% 3.25% 3.22% Efficiency ratio (tax equivalent) 53.70% 53.77% 53.50% 53.58% 52.35% Loan charge-offs $ 1,203 $ 828 $ 1,042 $ 3,351 $ 3,460 Recoveries (878) (786) (725) (2,662) (3,572) Net charge-offs $ 325 $ 42 $ 317 $ 689 $ (112) Market Price: High $ 45.37 $ 42.91 $ 42.95 $ 46.30 $ 47.53 Low $ 39.65 $ 39.10 $ 38.20 $ 39.10 $ 36.02 Close $ 40.55 $ 40.44 $ 42.10 $ 40.55 $ 42.10 As of As of As of September 30, 2022 June 30, 2022 September 30, 2021 Assets: Loans $ 3,630,616 $ 3,558,443 $ 3,398,229 Loan loss reserve (44,433) (42,344) (41,215) Net loans 3,586,183 3,516,099 3,357,014 Loans held for sale 1,043 936 12,056 Securities AFS 1,298,592 1,402,127 1,525,738 Equity securities at fair value 1,969 2,128 2,461 Other equity investments 11,563 13,026 13,026 Other earning assets 201,196 140,384 143,789 Cash and due from banks 60,527 75,373 66,075 Premises and equipment 41,593 40,704 40,145 Right of use asset 12,131 12,005 12,399 Goodwill and core deposit intangible 65,490 65,490 65,490 Other assets 194,051 179,078 147,392 Total Assets $ 5,474,338 $ 5,447,350 $ 5,385,585 Liabilities and Equity: Interest bearing checking $ 100,680 $ 99,055 $ 90,657 Savings deposits 1,952,379 1,915,166 1,827,112 CD's >=$100,000 537,233 573,519 565,869 Other time deposits 463,698 477,040 494,440 Total interest bearing deposits 3,053,990 3,064,780 2,978,078 Noninterest bearing deposits 1,481,078 1,408,148 1,318,158 Total deposits 4,535,068 4,472,928 4,296,236 Repurchase agreements 230,123 238,733 292,022 Other interest bearing liabilities 58,701 58,706 58,721 Lease liability 12,636 12,479 13,229 Other noninterest bearing liabilities 35,250 32,454 33,734 Total liabilities 4,871,778 4,815,300 4,693,942 Shareholders' equity 602,560 632,050 691,643 Total Liabilities and Equity $ 5,474,338 $ 5,447,350 $ 5,385,585 Ending shares outstanding 17,901 17,895 17,837 30 - 89 days past due loans $ 12,058 $ 10,595 $ 8,874 90 days past due loans 5,554 5,018 6,650 Nonaccrual loans 8,138 8,824 12,084 Restructured loans (excluding 90 days past due and nonaccrual) 79,092 75,264 70,932 Foreclosed properties 1,864 1,954 4,314 Community bank leverage ratio 13.24% 13.14% 12.71% Tangible equity to tangible assets ratio 9.93% 10.53% 11.77% FTE employees 964 958 960 View source version on businesswire.com: https://www.businesswire.com/news/home/20221019005271/en/Contacts Mark A. Gooch Vice Chairman, President, and Ceo Community Trust Bancorp, Inc. (606) 437-3229
Community Trust Bancorp, Inc. (NASDAQ:CTBI): Earnings Summary (in thousands except per share data) 3Q 2022 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Net income $19,372 $20,271 $21,142 $59,371 $68,691 Earnings per share $1.09 $1.14 $1.19 $3.33 $3.86 Earnings per share - diluted $1.08 $1.14 $1.19 $3.33 $3.86 Return on average assets 1.40% 1.49% 1.54% 1.46% 1.71% Return on average equity 12.08% 12.75% 12.06% 12.20% 13.55% Efficiency ratio 53.70% 53.77% 53.50% 53.58% 52.35% Tangible common equity 9.93% 10.53% 11.77% Dividends declared per share $0.44 $0.40 $0.40 $1.24 $1.17 Book value per share $33.66 $35.32 $38.78 Weighted average shares 17,841 17,835 17,790 17,832 17,783 Weighted average shares - diluted 17,857 17,843 17,808 17,844 17,798 Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved earnings for the third quarter 2022 of $19.4 million, or $1.09 per basic share, compared to $20.3 million, or $1.14 per basic share, earned during the second quarter 2022 and $21.1 million, or $1.19 per basic share, earned during the third quarter 2021. Total revenue was $2.9 million above prior quarter and $1.8 million above prior year same quarter. Net interest revenue increased $2.7 million compared to prior quarter and $1.5 million compared to prior year same quarter, and noninterest income increased $0.2 million compared to prior quarter and $0.3 million compared to prior year same quarter. Provision for credit losses for the quarter was $2.4 million, compared to provision of $0.1 million for the quarter ended June 30, 2022 and a recovery of provision of $0.2 million for the third quarter 2021. Noninterest expense increased $1.5 million compared to prior quarter and $1.1 million compared to prior year same quarter. Net income for the nine months ended September 30, 2022 was below prior year by $9.3 million, primarily due to the $6.9 million recovery of provision for credit losses taken in 2021 and the $4.2 million decline in gains on sales of loans. 3rd Quarter 2022 Highlights Net interest income for the quarter of $43.5 million was $2.7 million above prior quarter and $1.5 million above prior year same quarter. Provision for credit losses for the quarter was $2.4 million, compared to provision of $0.1 million for the quarter ended June 30, 2022 and a recovery of provision of $0.2 million for the third quarter 2021. Our loan portfolio increased $72.2 million, an annualized 8.0%, from June 30, 2022 and $232.4 million, or 6.8%, from September 30, 2021. Net loan charge-offs were $0.3 million, or 0.04% of average loans annualized, for the quarter ended September 30, 2022 compared to $0.04 million, or less than 0.01% of average loans annualized, for the second quarter 2022 and $0.3 million, or 0.04% of average loans annualized for the quarter ended September 30, 2021. Our nonperforming loans, excluding troubled debt restructurings, decreased slightly to $13.7 million at September 30, 2022 from $13.8 million at June 30, 2022 but were $5.0 million below the $18.7 million at September 30, 2021. Nonperforming assets at $15.6 million decreased $0.2 million from June 30, 2022 and $7.5 million from September 30, 2021. Deposits, including repurchase agreements, at $4.8 billion increased $53.5 million, or an annualized 4.5%, from June 30, 2022 and $176.9 million, or 3.9%, from September 30, 2021. Shareholders’ equity declined $29.5 million, or an annualized 18.5%, during the quarter and $89.1 million, or 12.9%, from September 30, 2021, as a result of the continued increase in unrealized losses on our securities portfolio. Noninterest income for the quarter ended September 30, 2022 of $14.7 million was $0.2 million, or 1.2%, above prior quarter and $0.3 million, or 2.0%, above prior year same quarter. Noninterest expense for the quarter ended September 30, 2022 of $31.5 million was $1.5 million, or 5.0%, higher than prior quarter and $1.1 million, or 3.8%, above prior year same quarter. Net Interest Income Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Percent Change Components of net interest income: Income on earning assets $51,405 $45,352 $45,726 13.3% 12.4% $140,284 $133,812 4.8% Expense on interest bearing liabilities 7,869 4,562 3,712 72.5% 112.0% 15,926 11,549 37.9% Net interest income 43,536 40,790 42,014 6.7% 3.6% 124,358 122,263 1.7% TEQ 240 233 226 3.0% 6.2% 707 673 5.1% Net interest income, tax equivalent $43,776 $41,023 $42,240 6.7% 3.6% $125,065 $122,936 1.7% Average yield and rates paid: Earning assets yield 3.97% 3.56% 3.52% 11.6% 12.8% 3.66% 3.52% 4.1% Rate paid on interest bearing liabilities 0.93% 0.54% 0.43% 71.4% 115.2% 0.63% 0.46% 39.1% Gross interest margin 3.04% 3.02% 3.09% 0.7% (1.6%) 3.03% 3.06% (1.0%) Net interest margin 3.36% 3.20% 3.23% 5.1% 4.1% 3.25% 3.22% 1.0% Average balances: Investment securities $1,380,881 $1,452,021 $1,511,178 (4.9%) (8.6%) $1,438,769 $1,266,850 13.6% Loans $3,568,174 $3,538,324 $3,400,194 0.8% 4.9% $3,516,114 $3,480,860 1.0% Earning assets $5,163,624 $5,140,656 $5,184,749 0.4% (0.4%) $5,146,251 $5,109,934 0.7% Interest-bearing liabilities $3,359,242 $3,373,741 $3,410,286 (0.4%) (1.5%) $3,361,097 $3,390,178 (0.9%) Net interest income for the quarter of $43.5 million was $2.7 million above prior quarter and $1.5 million above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.36% increased 16 basis points from prior quarter and 13 basis points from prior year same quarter, as our average earning assets increased $23.0 million from prior quarter but decreased $21.1 million from prior year same quarter. Our yield on average earning assets increased 41 basis points from prior quarter and 45 basis points from prior year same quarter, and our cost of funds increased 39 basis points from prior quarter and 50 basis points from prior year same quarter. Noninterest bearing deposits increased $72.9 million over prior quarter and $162.9 million over prior year. Net interest income for the nine months ended September 30, 2022 increased $2.1 million or 1.7% from the nine months ended September 30, 2021. Our ratio of average loans to deposits, including repurchase agreements, was 75.4% for the quarter ended September 30, 2022 compared to 75.2% for the quarter ended June 30, 2022 and 73.1% for the quarter ended September 30, 2021. Noninterest Income Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Percent Change Deposit related fees $7,629 $7,263 $7,066 5.0% 8.0% $21,638 $19,446 11.3% Trust revenue 2,989 3,198 3,039 (6.5%) (1.6%) 9,435 9,339 1.0% Gains on sales of loans 235 519 1,239 (54.7%) (81.0%) 1,351 5,579 (75.8%) Loan related fees 1,589 1,415 1,050 12.3% 51.3% 5,066 4,324 17.2% Bank owned life insurance revenue 743 702 654 5.8% 13.6% 2,136 1,808 18.1% Brokerage revenue 453 459 519 (1.3%) (12.8%) 1,502 1,530 (1.8%) Other 1,041 945 821 10.3% 26.9% 3,017 3,460 (12.8%) Total noninterest income $14,679 $14,501 $14,388 1.2% 2.0% $44,145 $45,486 (2.9%) Noninterest income for the quarter ended September 30, 2022 of $14.7 million was $0.2 million, or 1.2%, above prior quarter and $0.3 million, or 2.0%, above prior year same quarter. The quarter over quarter increase included a $0.4 million increase in deposit related fees and a $0.2 million increase in loan related fees, partially offset by a $0.3 million decrease in gains on sales of loans and a $0.2 million decrease in trust revenue. Year-to-date noninterest income decreased $1.3 million from the nine months ended September 30, 2021 due to a $4.2 million decline in gains on sales of loans, partially offset by a $2.2 million increase in deposit related fees and a $0.7 million increase in loan related fees. Gains on sales of loans continue to be impacted by the slowdown in the industry-wide mortgage refinancing boom. Deposit related fees were primarily impacted by debit card income and overdraft charges. Loan related fees were primarily impacted by the change in the fair market value of mortgage servicing rights. The decrease in trust revenue quarter over quarter was due to the decline in the market value of managed assets. Noninterest Expense Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 YTD 2022 YTD 2021 Percent Change Salaries $12,537 $12,219 $11,962 2.6% 4.8% $36,495 $35,080 4.0% Employee benefits 6,009 6,315 6,891 (4.8%) (12.8%) 18,123 19,566 (7.4%) Net occupancy and equipment 2,897 2,756 2,733 5.1% 6.0% 8,507 8,229 3.4% Data processing 2,270 2,095 1,911 8.3% 18.8% 6,566 5,940 10.5% Legal and professional fees 752 884 685 (15.0%) 9.7% 2,503 2,331 7.4% Advertising and marketing 769 659 819 16.7% (6.1%) 2,180 2,251 (3.2%) Taxes other than property and payroll 422 425 464 (0.8%) (9.1%) 1,274 1,209 5.4% Net other real estate owned expense 41 43 296 (4.3%) (86.2%) 438 1,102 (60.2%) Other 5,778 4,582 4,567 26.1% 26.5% 14,726 12,428 18.5% Total noninterest expense $31,475 $29,978 $30,328 5.0% 3.8% $90,812 $88,136 3.0% Noninterest expense for the quarter ended September 30, 2022 of $31.5 million was $1.5 million, or 5.0%, higher than prior quarter and $1.1 million, or 3.8%, above prior year same quarter. The increase in noninterest expense quarter over quarter was primarily the result of a $1.4 million accrual for customer refunds of re-presented returned item fees. Noninterest expense for the nine months ended September 30, 2022 was $2.7 million higher than the nine months ended September 30, 2021. Balance Sheet Review Total Loans Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 Commercial nonresidential real estate $756,138 $758,227 $732,442 (0.3%) 3.2% Commercial residential real estate 359,643 354,668 330,660 1.4% 8.8% Hotel/motel 335,253 280,956 252,951 19.3% 32.5% SBA guaranteed PPP loans 1,958 7,788 99,116 (74.9%) (98.0%) Other commercial 383,398 395,876 347,632 (3.2%) 10.3% Total commercial 1,836,390 1,797,515 1,762,801 2.2% 4.2% Residential mortgage 814,944 793,249 763,005 2.7% 6.8% Home equity loans/lines 115,400 110,828 105,007 4.1% 9.9% Total residential 930,344 904,077 868,012 2.9% 7.2% Consumer indirect 703,016 697,060 612,394 0.9% 14.8% Consumer direct 160,866 159,791 155,022 0.7% 3.8% Total consumer 863,882 856,851 767,416 0.8% 12.6% Total loans $3,630,616 $3,558,443 $3,398,229 2.0% 6.8% Total Deposits and Repurchase Agreements Percent Change 3Q 2022 Compared to: ($ in thousands) 3Q 2022 2Q 2022 3Q 2021 2Q 2022 3Q 2021 Non-interest bearing deposits $1,481,078 $1,408,148 $1,318,158 5.2% 12.4% Interest bearing deposits Interest checking 100,680 99,055 90,657 1.6% 11.1% Money market savings 1,268,682 1,243,817 1,210,551 2.0% 4.8% Savings accounts 683,697 671,349 616,561 1.8% 10.9% Time deposits 1,000,931 1,050,559 1,060,309 (4.7%) (5.6%) Repurchase agreements 230,123 238,733 292,022 (3.6%) (21.2%) Total interest bearing deposits and repurchase agreements 3,284,113 3,303,513 3,270,100 (0.6%) 0.4% Total deposits and repurchase agreements $4,765,191 $4,711,661 $4,588,258 1.1% 3.9% CTBI’s total assets at $5.5 billion increased $27.0 million, or 2.0% annualized, from June 30, 2022 and $88.8 million, or 1.6%, from September 30, 2021. Loans outstanding at September 30, 2022 were $3.6 billion, an increase of $72.2 million, an annualized 8.0%, from June 30, 2022 and $232.4 million, or 6.8%, from September 30, 2021. The increase in loans included a $38.9 million increase in the commercial loan portfolio, a $26.3 million increase in the residential loan portfolio, a $5.9 million increase in the indirect consumer loan portfolio, and a $1.1 million increase in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $103.7 million, or an annualized 29.3%, from June 30, 2022 and $227.6 million, or 14.9%, from September 30, 2021. Deposits in other banks increased $62.8 million from prior quarter and $58.4 million from prior year same quarter. Deposits, including repurchase agreements, at $4.8 billion increased $53.5 million, or an annualized 4.5%, from June 30, 2022 and $176.9 million, or 3.9%, from September 30, 2021. Shareholders’ equity declined $29.5 million, or an annualized 18.5%, during the quarter and $89.1 million, or 12.9%, from September 30, 2021, as a result of the continued increase in unrealized losses on our securities portfolio due to the current increasing interest rate environment. Management has the ability and intent to hold these securities to recovery or maturity. We experienced a $41.5 million increase in accumulated other comprehensive loss, net of tax, resulting from increases in unrealized losses on our securities portfolio during the quarter. CTBI’s annualized dividend yield to shareholders as of September 30, 2022 was 4.34%. Asset Quality Our total nonperforming loans, excluding troubled debt restructurings, decreased slightly to $13.7 million at September 30, 2022 from $13.8 million at June 30, 2022 but were $5.0 million below the $18.7 million at September 30, 2021. Accruing loans 90+ days past due at $5.6 million increased $0.5 million from prior quarter but decreased $1.1 million from September 30, 2021. Nonaccrual loans at $8.1 million decreased $0.7 million from prior quarter and $3.9 million from September 30, 2021. Accruing loans 30-89 days past due at $12.1 million increased $1.5 million from prior quarter and $3.2 million from September 30, 2021. Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss. Our level of foreclosed properties were $1.9 million at September 30, 2022 compared to $2.0 million at June 30, 2022 and $4.3 million at September 30, 2021. Sales of foreclosed properties for the quarter ended September 30, 2022 totaled $0.1 million while new foreclosed properties totaled $0.03 million. At September 30, 2022, the book value of properties under contracts to sell was $0.4 million; however, the closings had not occurred at quarter-end. Net loan charge-offs were $0.3 million, or 0.04% of average loans annualized, for the quarter ended September 30, 2022 compared to $0.04 million, or less than 0.01% of average loans annualized, for the second quarter 2022 and $0.3 million, or 0.04% of average loans annualized for the quarter ended September 30, 2021. Year-to-date net loan charge-offs were $0.7 million, or 0.03% of average loans annualized, compared to a net recovery of loan charge-offs of $0.1 million for the first nine months of 2021. Allowance for Credit Losses Provision for credit losses for the quarter was $2.4 million, compared to provision of $0.1 million for the quarter ended June 30, 2022 and a recovery of provision of $0.2 million for the third quarter 2021. Year-to-date provision was $3.4 million compared to a recovery of $6.9 million during the first nine months of 2021. Our reserve coverage (allowance for credit losses to nonperforming loans) at September 30, 2022 was 324.5% compared to 305.9% at June 30, 2022 and 220.0% at September 30, 2021. Our credit loss reserve as a percentage of total loans outstanding at September 30, 2022 was 1.22% compared to 1.19% at June 30, 2022 and 1.21% at September 30, 2021. 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; the effects of the COVID-19 pandemic on our business operations and credit quality and on general economic and financial market conditions, as well as our ability to respond to the related challenges; 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, regulations, and enforcement actions 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 $5.5 billion, is headquartered in Pikeville, Kentucky and has 68 banking locations across eastern, northeastern, central, and south central Kentucky, six banking locations in southern West Virginia, three 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, 2022 (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, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Interest income $ 51,405 $ 45,352 $ 45,726 $ 140,284 $ 133,812 Interest expense 7,869 4,562 3,712 15,926 11,549 Net interest income 43,536 40,790 42,014 124,358 122,263 Loan loss provision 2,414 77 (163) 3,366 (6,919) Gains on sales of loans 235 519 1,239 1,351 5,579 Deposit related fees 7,629 7,263 7,066 21,638 19,446 Trust revenue 2,989 3,198 3,039 9,435 9,339 Loan related fees 1,589 1,415 1,050 5,066 4,324 Securities gains (losses) (159) (225) (62) (285) 50 Other noninterest income 2,396 2,331 2,056 6,940 6,748 Total noninterest income 14,679 14,501 14,388 44,145 45,486 Personnel expense 18,546 18,534 18,853 54,618 54,646 Occupancy and equipment 2,897 2,756 2,733 8,507 8,229 Data processing expense 2,270 2,095 1,911 6,566 5,940 FDIC insurance premiums 360 358 393 1,073 1,042 Other noninterest expense 7,402 6,235 6,438 20,048 18,279 Total noninterest expense 31,475 29,978 30,328 90,812 88,136 Net income before taxes 24,326 25,236 26,237 74,325 86,532 Income taxes 4,954 4,965 5,095 14,954 17,841 Net income $ 19,372 $ 20,271 $ 21,142 $ 59,371 $ 68,691 Memo: TEQ interest income $ 51,645 $ 45,584 $ 45,952 $ 140,991 $ 134,485 Average shares outstanding 17,841 17,835 17,790 17,832 17,783 Diluted average shares outstanding 17,857 17,843 17,808 17,844 17,798 Basic earnings per share $ 1.09 $ 1.14 $ 1.19 $ 3.33 $ 3.86 Diluted earnings per share $ 1.08 $ 1.14 $ 1.19 $ 3.33 $ 3.86 Dividends per share $ 0.440 $ 0.400 $ 0.400 $ 1.240 $ 1.170 Average balances: Loans $ 3,568,174 $ 3,538,324 $ 3,400,194 $ 3,516,114 $ 3,480,860 Earning assets 5,163,624 5,140,656 5,184,749 5,146,251 5,109,934 Total assets 5,477,596 5,446,263 5,457,558 5,447,439 5,376,588 Deposits, including repurchase agreements 4,733,393 4,705,492 4,650,885 4,691,322 4,585,812 Interest bearing liabilities 3,359,242 3,373,741 3,410,286 3,361,097 3,390,178 Shareholders' equity 636,038 637,542 695,490 650,877 677,632 Performance ratios: Return on average assets 1.40% 1.49% 1.54% 1.46% 1.71% Return on average equity 12.08% 12.75% 12.06% 12.20% 13.55% Yield on average earning assets (tax equivalent) 3.97% 3.56% 3.52% 3.66% 3.52% Cost of interest bearing funds (tax equivalent) 0.93% 0.54% 0.43% 0.63% 0.46% Net interest margin (tax equivalent) 3.36% 3.20% 3.23% 3.25% 3.22% Efficiency ratio (tax equivalent) 53.70% 53.77% 53.50% 53.58% 52.35% Loan charge-offs $ 1,203 $ 828 $ 1,042 $ 3,351 $ 3,460 Recoveries (878) (786) (725) (2,662) (3,572) Net charge-offs $ 325 $ 42 $ 317 $ 689 $ (112) Market Price: High $ 45.37 $ 42.91 $ 42.95 $ 46.30 $ 47.53 Low $ 39.65 $ 39.10 $ 38.20 $ 39.10 $ 36.02 Close $ 40.55 $ 40.44 $ 42.10 $ 40.55 $ 42.10 As of As of As of September 30, 2022 June 30, 2022 September 30, 2021 Assets: Loans $ 3,630,616 $ 3,558,443 $ 3,398,229 Loan loss reserve (44,433) (42,344) (41,215) Net loans 3,586,183 3,516,099 3,357,014 Loans held for sale 1,043 936 12,056 Securities AFS 1,298,592 1,402,127 1,525,738 Equity securities at fair value 1,969 2,128 2,461 Other equity investments 11,563 13,026 13,026 Other earning assets 201,196 140,384 143,789 Cash and due from banks 60,527 75,373 66,075 Premises and equipment 41,593 40,704 40,145 Right of use asset 12,131 12,005 12,399 Goodwill and core deposit intangible 65,490 65,490 65,490 Other assets 194,051 179,078 147,392 Total Assets $ 5,474,338 $ 5,447,350 $ 5,385,585 Liabilities and Equity: Interest bearing checking $ 100,680 $ 99,055 $ 90,657 Savings deposits 1,952,379 1,915,166 1,827,112 CD's >=$100,000 537,233 573,519 565,869 Other time deposits 463,698 477,040 494,440 Total interest bearing deposits 3,053,990 3,064,780 2,978,078 Noninterest bearing deposits 1,481,078 1,408,148 1,318,158 Total deposits 4,535,068 4,472,928 4,296,236 Repurchase agreements 230,123 238,733 292,022 Other interest bearing liabilities 58,701 58,706 58,721 Lease liability 12,636 12,479 13,229 Other noninterest bearing liabilities 35,250 32,454 33,734 Total liabilities 4,871,778 4,815,300 4,693,942 Shareholders' equity 602,560 632,050 691,643 Total Liabilities and Equity $ 5,474,338 $ 5,447,350 $ 5,385,585 Ending shares outstanding 17,901 17,895 17,837 30 - 89 days past due loans $ 12,058 $ 10,595 $ 8,874 90 days past due loans 5,554 5,018 6,650 Nonaccrual loans 8,138 8,824 12,084 Restructured loans (excluding 90 days past due and nonaccrual) 79,092 75,264 70,932 Foreclosed properties 1,864 1,954 4,314 Community bank leverage ratio 13.24% 13.14% 12.71% Tangible equity to tangible assets ratio 9.93% 10.53% 11.77% FTE employees 964 958 960 View source version on businesswire.com: https://www.businesswire.com/news/home/20221019005271/en/