Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Community Trust Bancorp, Inc. Reports Earnings for the 2nd Quarter 2023 By: Community Trust Bancorp, Inc. via Business Wire July 19, 2023 at 08:15 AM EDT Community Trust Bancorp, Inc. (NASDAQ-CTBI): Earnings Summary (in thousands except per share data) 2Q 2023 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Net income $19,404 $19,313 $20,271 $38,717 $39,999 Earnings per share $1.09 $1.08 $1.14 $2.17 $2.24 Earnings per share - diluted $1.08 $1.08 $1.14 $2.16 $2.24 Return on average assets 1.41% 1.44% 1.49% 1.42% 1.48% Return on average equity 11.72% 12.03% 12.75% 11.87% 12.25% Efficiency ratio 53.52% 55.29% 53.77% 54.40% 53.51% Tangible common equity 10.90% 10.82% 10.53% Dividends declared per share $0.44 $0.44 $0.40 $0.88 $0.80 Book value per share $36.71 $36.54 $35.32 Weighted average shares 17,884 17,872 17,835 17,877 17,827 Weighted average shares - diluted 17,890 17,884 17,843 17,885 17,838 Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved earnings for the second quarter 2023 of $19.4 million, or $1.09 per basic share, compared to $19.3 million, or $1.08 per basic share, earned during the first quarter 2023 and $20.3 million, or $1.14 per basic share, earned during the second quarter 2022. Total revenue was $0.2 million above prior quarter and $2.5 million above prior year same quarter. Net interest revenue decreased $0.8 million compared to prior quarter but increased $2.3 million compared to prior year same quarter, and noninterest income increased $1.1 million compared to prior quarter and $0.3 million compared to prior year same quarter. Our provision for credit losses for the quarter increased $0.9 million for the quarter and was $1.9 million higher than second quarter 2022. Noninterest expense decreased $0.9 million compared to prior quarter but was $1.0 million higher than prior year same quarter. Earnings for the six months ended June 30, 2023 were $38.7 million, or $2.17 per basic share, compared to $40.0 million, or $2.24 per basic share for the six months ended June 30, 2022. 2nd Quarter 2023 Highlights Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter, as our net interest margin decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter. Provision for credit losses at $2.0 million for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter. Our loan portfolio at $3.9 billion increased $152.3 million, an annualized 16.2%, from March 31, 2023 and $371.3 million, or 10.4%, from June 30, 2022. We had net loan charge-offs of $674 thousand, or 0.07% of average loans annualized for the second quarter 2023 compared to $414 thousand, or 0.04% of average loans annualized for the first quarter 2023 and $43 thousand, or 0.00% of average loans annualized, for the quarter ended June 30, 2022. Our total nonperforming loans decreased to $11.7 million at June 30, 2023 from $12.2 million at March 31, 2023 and $13.8 million at June 30, 2022. Nonperforming assets at $13.8 million decreased $1.2 million from March 31, 2023 and $2.0 million from June 30, 2022. Deposits, including repurchase agreements, at $4.7 billion decreased $6.5 million, or an annualized 0.6%, from March 31, 2023 but increased $34.0 million, or 0.7% from June 30, 2022. Shareholders’ equity at $660.1 million increased $3.3 million, or an annualized 2.0%, during the quarter and $28.1 million, or 4.4%, from June 30, 2022. Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter. Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter. Net Interest Income Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Percent Change Components of net interest income: Income on earning assets $64,827 $60,995 $45,352 6.3% 42.9% $125,822 $88,879 41.6% Expense on interest bearing liabilities 21,748 17,079 4,562 27.3% 376.7% 38,827 8,057 381.9% Net interest income 43,079 43,916 40,790 (1.9%) 5.6% 86,995 80,822 7.6% TEQ 298 298 232 0.1% 28.6% 596 467 27.6% Net interest income, tax equivalent $43,377 $44,214 $41,022 (1.9%) 5.7% $87,591 $81,289 7.8% Average yield and rates paid: Earning assets yield 5.03% 4.84% 3.56% 3.9% 41.5% 4.94% 3.51% 40.9% Rate paid on interest bearing liabilities 2.54% 2.06% 0.54% 23.3% 368.2% 2.30% 0.48% 376.7% Gross interest margin 2.49% 2.78% 3.02% (10.4%) (17.5%) 2.64% 3.03% (12.8%) Net interest margin 3.35% 3.49% 3.20% (4.1%) 4.7% 3.42% 3.19% 7.3% Average balances: Investment securities $1,230,556 $1,251,948 $1,452,021 (1.7%) (15.3%) $1,241,193 $1,468,193 (15.5%) Loans $3,836,446 $3,739,443 $3,538,324 2.6% 8.4% $3,788,213 $3,489,652 8.6% Earning assets $5,189,716 $5,131,385 $5,140,656 1.1% 1.0% $5,160,712 $5,137,421 0.5% Interest-bearing liabilities $3,435,072 $3,362,331 $3,373,741 2.2% 1.8% $3,398,902 $3,362,039 1.1% Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.35% decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter. Our average earning assets increased $58.3 million from prior quarter and $49.1 million from prior year same quarter. Our yield on average earning assets increased 19 basis points from prior quarter and 147 basis points from prior year same quarter, and our cost of funds increased 48 basis points from prior quarter and 200 basis points from prior year same quarter. Money market accounts, certificates of deposit, and other time deposits all experienced significant increases in rates during the quarter. Our net interest income for the six months ended June 30, 2023 was $87.0 million compared to $80.8 million for the six months ended June 30, 2022. Our ratio of average loans to deposits, including repurchase agreements, was 81.2% for the quarter ended June 30, 2023 compared to 79.8% for the quarter ended March 31, 2023 and 75.2% for the quarter ended June 30, 2022. Noninterest Income Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Percent Change Deposit related fees $7,513 $7,287 $7,263 3.1% 3.4% $14,800 $14,009 5.6% Trust revenue 3,351 3,079 3,198 8.9% 4.8% 6,430 6,446 (0.2%) Gains on sales of loans 115 121 519 (5.3%) (77.9%) 236 1,116 (78.9%) Loan related fees 1,197 845 1,415 41.7% (15.4%) 2,042 3,477 (41.3%) Bank owned life insurance revenue 735 858 702 (14.4%) 4.7% 1,593 1,393 14.4% Brokerage revenue 388 348 459 11.5% (15.4%) 736 1,049 (29.8%) Other 1,457 1,144 945 27.4% 54.3% 2,601 1,976 31.6% Total noninterest income $14,756 $13,682 $14,501 7.9% 1.8% $28,438 $29,466 (3.5%) Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter. The quarter over quarter increase included a $0.2 million increase in deposit related fees, a $0.3 million increase in trust revenue, and a $0.4 million increase in loan related fees due to the change in the fair market value of our mortgage servicing rights. The year over year increase included a $0.3 million increase in deposit related fees, a $0.2 million increase in trust revenue, and a $0.4 million increase in securities gains, partially offset by a $0.4 million decline in gains on sales of loans and a $0.2 million decline in loan related fees also resulting from the fluctuation in the fair market value of our mortgage servicing rights. Noninterest income for the first six months of 2023 was $28.4 million compared to $29.5 million for the six months ended June 30, 2022. Noninterest Expense Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Percent Change Salaries $12,732 $12,633 $12,219 0.8% 4.2% $25,365 $23,958 5.9% Employee benefits 5,573 6,275 6,315 (11.2%) (11.7%) 11,848 12,114 (2.2%) Net occupancy and equipment 2,895 3,028 2,756 (4.4%) 5.1% 5,923 5,610 5.6% Data processing 2,383 2,303 2,095 3.5% 13.8% 4,686 4,296 9.1% Legal and professional fees 912 816 884 11.8% 3.2% 1,728 1,751 (1.3%) Advertising and marketing 704 820 659 (14.1%) 6.9% 1,524 1,411 8.0% Taxes other than property and payroll 433 432 425 0.1% 1.7% 865 851 1.6% Net other real estate owned expense 61 119 43 (48.4%) 43.6% 180 396 (54.6%) Other 5,332 5,464 4,582 (2.4%) 16.4% 10,796 8,950 20.6% Total noninterest expense $31,025 $31,890 $29,978 (2.7%) 3.5% $62,915 $59,337 6.0% Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter. The decrease in noninterest expense quarter over quarter was primarily a result of a decrease in the accruals for incentive payments based on our current projected earnings for the year. The year over year increase included a $0.3 million increase in data processing expense, a $0.3 million increase in FDIC insurance premiums, and a $0.1 million increase in occupancy and equipment. A year over year decrease in personnel costs of $0.2 million was the result of reduction in the accruals for incentive payments of $1.3 million, partially offset by increases in salary expense ($0.5 million), group medical and life insurance expense ($0.5 million), and other employee benefits ($0.1 million). Noninterest expense for the first six months of 2023 was $62.9 million compared to $59.3 million for the six months ended June 30, 2022. Balance Sheet Review Total Loans Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 Commercial nonresidential real estate $787,598 $750,498 $758,227 4.9% 3.9% Commercial residential real estate 393,309 385,328 354,668 2.1% 10.9% Hotel/motel 372,981 348,876 280,956 6.9% 32.8% Other commercial 396,741 392,398 403,664 1.1% (1.7%) Total commercial 1,950,629 1,877,100 1,797,515 3.9% 8.5% Residential mortgage 883,104 846,435 793,249 4.3% 11.3% Home equity loans/lines 132,033 124,096 110,828 6.4% 19.1% Total residential 1,015,137 970,531 904,077 4.6% 12.3% Consumer indirect 806,081 772,570 697,060 4.3% 15.6% Consumer direct 157,848 157,158 159,791 0.4% (1.2%) Total consumer 963,929 929,728 856,851 3.7% 12.5% Total loans $3,929,695 $3,777,359 $3,558,443 4.0% 10.4% Total Deposits and Repurchase Agreements Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 Non-interest bearing deposits $1,361,078 $1,409,839 $1,408,148 (3.5%) (3.3%) Interest bearing deposits Interest checking 142,542 120,678 99,055 18.1% 43.9% Money market savings 1,389,081 1,408,314 1,243,817 (1.4%) 11.7% Savings accounts 611,772 642,232 671,349 (4.7%) (8.9%) Time deposits 1,012,187 962,361 1,050,559 5.2% (3.7%) Repurchase agreements 229,020 208,777 238,733 9.7% (4.1%) Total interest bearing deposits and repurchase agreements 3,384,602 3,342,362 3,303,513 1.3% 2.5% Total deposits and repurchase agreements $4,745,680 $4,752,201 $4,711,661 (0.1%) 0.7% CTBI’s total assets at $5.5 billion as of June 30, 2023 decreased $8.5 million, or 0.6% annualized, from March 31 2023 but increased $73.4 million, or 1.3%, from June 30, 2022. Loans outstanding at June 30, 2023 were $3.9 billion, an increase of $152.3 million, an annualized 16.2%, from March 31, 2023 and $371.3 million, or 10.4%, from June 30, 2022. The increase in loans from prior quarter included a $73.5 million increase in the commercial loan portfolio, a $44.6 million increase in the residential loan portfolio, a $33.5 million increase in the indirect consumer loan portfolio, and a $0.7 million increase in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $39.7 million, or an annualized 12.8%, from March 31, 2023 and $200.5 million, or 14.3%, from June 30, 2022. Deposits in other banks decreased $117.5 million from prior quarter and $78.7 million from June 30, 2022. Deposits, including repurchase agreements, at $4.7 billion decreased $6.5 million, or an annualized 0.6%, from March 31, 2023 but increased $34.0 million, or 0.7%, from June 30, 2022. Shareholders’ equity at $660.1 million increased $3.3 million, or an annualized 2.0%, during the quarter and $28.1 million, or 4.4%, from June 30, 2022, as unrealized losses on our securities portfolio continue to impact equity. Net unrealized losses on securities, net of deferred taxes, were $121.3 million at June 30, 2023, compared to $112.4 million at March 31, 2023 and $97.9 million at June 30, 2022. Management has evaluated the unrealized losses and determined that they were primarily driven by market rates. Management has the ability and intent to hold these securities to recovery or maturity. CTBI’s annualized dividend yield to shareholders as of June 30, 2023 was 4.95%. Asset Quality Our total nonperforming loans decreased to $11.7 million at June 30, 2023 from $12.2 million at March 31, 2023 and $13.8 million at June 30, 2022. Prior year nonperforming loans, as previously reported, exclude troubled debt restructurings which have been eliminated in the current period due to implementation of Accounting Standard Update 2022-02. Accruing loans 90+ days past due at $6.4 million increased $0.2 million from prior quarter and $1.4 million from June 30, 2022. Nonaccrual loans at $5.3 million decreased $0.6 million from prior quarter and $3.5 million from June 30, 2022. Accruing loans 30-89 days past due at $12.2 million increased $0.4 million from prior quarter and $1.6 million from June 30, 2022. 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 was $2.0 million at June 30, 2023 compared to $2.8 million at March 31, 2023 and $2.0 million at June 30, 2022. Sales of foreclosed properties for the quarter ended June 30, 2023 totaled $0.9 million while new foreclosed properties totaled $0.1 million. At June 30, 2023, the book value of properties under contracts to sell was $0.7 million; however, the closings had not occurred at quarter-end. We had net loan charge-offs of $674 thousand, or 0.07% of average loans annualized for the second quarter 2023 compared to $414 thousand, or 0.04% of average loans annualized for the first quarter 2023 and $43 thousand, or 0.00% of average loans annualized, for the quarter ended June 30, 2022. Net charge-offs for the six months ended June 30, 2023 were $1.1 million, or 0.06% of average loans annualized compared to $0.4 million, or 0.02% of average loans annualized for the six months ended June 30, 2022. Allowance for Credit Losses Our provision for credit losses for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter. Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2023 was 408.9% compared to 382.3% at March 31, 2023 and 305.9% at June 30, 2022. Our credit loss reserve as a percentage of total loans outstanding at June 30, 2023 was 1.22% compared to 1.24% at March 31, 2023 and 1.19% at June 30, 2022. 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 70 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) June 30, 2023 (in thousands except per share data and # of employees) Three Three Three Six Six Months Months Months Months Months Ended Ended Ended Ended Ended June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Interest income $ 64,827 $ 60,995 $ 45,352 $ 125,822 $ 88,879 Interest expense 21,748 17,079 4,562 38,827 8,057 Net interest income 43,079 43,916 40,790 86,995 80,822 Loan loss provision 2,009 1,116 77 3,125 952 Gains on sales of loans 115 121 519 236 1,116 Deposit related fees 7,513 7,287 7,263 14,800 14,009 Trust revenue 3,351 3,079 3,198 6,430 6,446 Loan related fees 1,197 845 1,415 2,042 3,477 Securities gains (losses) 165 218 (225) 383 (126) Other noninterest income 2,415 2,132 2,331 4,547 4,544 Total noninterest income 14,756 13,682 14,501 28,438 29,466 Personnel expense 18,305 18,908 18,534 37,213 36,072 Occupancy and equipment 2,895 3,028 2,756 5,923 5,610 Data processing expense 2,383 2,303 2,095 4,686 4,296 FDIC insurance premiums 610 606 358 1,216 713 Other noninterest expense 6,832 7,045 6,235 13,877 12,646 Total noninterest expense 31,025 31,890 29,978 62,915 59,337 Net income before taxes 24,801 24,592 25,236 49,393 49,999 Income taxes 5,397 5,279 4,965 10,676 10,000 Net income $ 19,404 $ 19,313 $ 20,271 $ 38,717 $ 39,999 Memo: TEQ interest income $ 65,125 $ 61,293 $ 45,584 $ 126,418 $ 89,346 Average shares outstanding 17,884 17,872 17,835 17,877 17,827 Diluted average shares outstanding 17,890 17,884 17,843 17,885 17,838 Basic earnings per share $ 1.09 $ 1.08 $ 1.14 $ 2.17 $ 2.24 Diluted earnings per share $ 1.08 $ 1.08 $ 1.14 $ 2.16 $ 2.24 Dividends per share $ 0.44 $ 0.44 $ 0.40 $ 0.88 $ 0.800 Average balances: Loans $ 3,836,446 $ 3,739,443 $ 3,538,324 $ 3,788,213 $ 3,489,652 Earning assets 5,189,716 5,131,385 5,140,656 5,160,712 5,137,421 Total assets 5,509,776 5,458,067 5,446,263 5,484,065 5,432,110 Deposits, including repurchase agreements 4,727,386 4,688,103 4,705,492 4,707,853 4,669,938 Interest bearing liabilities 3,435,072 3,362,331 3,373,741 3,398,902 3,362,039 Shareholders' equity 663,896 651,008 637,542 657,488 658,419 Performance ratios: Return on average assets 1.41% 1.44% 1.49% 1.42% 1.48% Return on average equity 11.72% 12.03% 12.75% 11.87% 12.25% Yield on average earning assets (tax equivalent) 5.03% 4.84% 3.56% 4.94% 3.51% Cost of interest bearing funds (tax equivalent) 2.54% 2.06% 0.54% 2.30% 0.48% Net interest margin (tax equivalent) 3.35% 3.49% 3.20% 3.42% 3.19% Efficiency ratio (tax equivalent) 53.52% 55.29% 53.77% 54.40% 53.51% Loan charge-offs $ 1,953 $ 1,765 $ 828 $ 3,718 $ 2,148 Recoveries (1,279) (1,351) (786) (2,630) (1,784) Net charge-offs $ 674 $ 414 $ 42 $ 1,088 $ 364 Market Price: High $ 40.30 $ 47.35 $ 42.91 $ 47.35 $ 46.30 Low $ 32.68 $ 37.31 $ 39.10 $ 32.68 $ 39.10 Close $ 35.57 $ 37.95 $ 40.44 $ 35.57 $ 40.44 As of As of As of June 30, 2023 March 31, 2023 June 30, 2022 Assets: Loans $ 3,929,695 $ 3,777,359 $ 3,558,443 Loan loss reserve (48,018) (46,683) (42,344) Net loans 3,881,677 3,730,676 3,516,099 Loans held for sale 238 182 936 Securities AFS 1,201,253 1,241,080 1,402,127 Equity securities at fair value 2,545 2,380 2,128 Other equity investments 11,432 9,713 13,026 Other earning assets 62,726 177,209 140,384 Cash and due from banks 48,915 60,762 75,373 Premises and equipment 42,911 42,636 40,704 Right of use asset 16,678 17,037 12,005 Goodwill and core deposit intangible 65,490 65,490 65,490 Other assets 186,933 182,155 179,078 Total Assets $ 5,520,798 $ 5,529,320 $ 5,447,350 Liabilities and Equity: Interest bearing checking $ 142,542 $ 120,678 $ 99,055 Savings deposits 2,000,853 2,050,546 1,915,166 CD's >=$100,000 538,492 501,557 573,519 Other time deposits 473,695 460,804 477,040 Total interest bearing deposits 3,155,582 3,133,585 3,064,780 Noninterest bearing deposits 1,361,078 1,409,839 1,408,148 Total deposits 4,516,660 4,543,424 4,472,928 Repurchase agreements 229,020 208,777 238,733 Other interest bearing liabilities 65,195 65,254 58,706 Lease liability 17,317 17,619 12,479 Other noninterest bearing liabilities 32,481 37,425 32,454 Total liabilities 4,860,673 4,872,499 4,815,300 Shareholders' equity 660,125 656,821 632,050 Total Liabilities and Equity $ 5,520,798 $ 5,529,320 $ 5,447,350 Ending shares outstanding 17,984 17,976 17,895 30 - 89 days past due loans $ 12,158 $ 11,728 $ 10,595 90 days past due loans 6,399 6,218 5,018 Nonaccrual loans 5,345 5,993 8,824 Foreclosed properties 2,047 2,776 1,954 Community bank leverage ratio 13.82% 13.71% 13.14% Tangible equity to tangible assets ratio 10.90% 10.82% 10.53% FTE employees 975 945 958 View source version on businesswire.com: https://www.businesswire.com/news/home/20230719117172/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 2nd Quarter 2023 By: Community Trust Bancorp, Inc. via Business Wire July 19, 2023 at 08:15 AM EDT Community Trust Bancorp, Inc. (NASDAQ-CTBI): Earnings Summary (in thousands except per share data) 2Q 2023 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Net income $19,404 $19,313 $20,271 $38,717 $39,999 Earnings per share $1.09 $1.08 $1.14 $2.17 $2.24 Earnings per share - diluted $1.08 $1.08 $1.14 $2.16 $2.24 Return on average assets 1.41% 1.44% 1.49% 1.42% 1.48% Return on average equity 11.72% 12.03% 12.75% 11.87% 12.25% Efficiency ratio 53.52% 55.29% 53.77% 54.40% 53.51% Tangible common equity 10.90% 10.82% 10.53% Dividends declared per share $0.44 $0.44 $0.40 $0.88 $0.80 Book value per share $36.71 $36.54 $35.32 Weighted average shares 17,884 17,872 17,835 17,877 17,827 Weighted average shares - diluted 17,890 17,884 17,843 17,885 17,838 Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved earnings for the second quarter 2023 of $19.4 million, or $1.09 per basic share, compared to $19.3 million, or $1.08 per basic share, earned during the first quarter 2023 and $20.3 million, or $1.14 per basic share, earned during the second quarter 2022. Total revenue was $0.2 million above prior quarter and $2.5 million above prior year same quarter. Net interest revenue decreased $0.8 million compared to prior quarter but increased $2.3 million compared to prior year same quarter, and noninterest income increased $1.1 million compared to prior quarter and $0.3 million compared to prior year same quarter. Our provision for credit losses for the quarter increased $0.9 million for the quarter and was $1.9 million higher than second quarter 2022. Noninterest expense decreased $0.9 million compared to prior quarter but was $1.0 million higher than prior year same quarter. Earnings for the six months ended June 30, 2023 were $38.7 million, or $2.17 per basic share, compared to $40.0 million, or $2.24 per basic share for the six months ended June 30, 2022. 2nd Quarter 2023 Highlights Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter, as our net interest margin decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter. Provision for credit losses at $2.0 million for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter. Our loan portfolio at $3.9 billion increased $152.3 million, an annualized 16.2%, from March 31, 2023 and $371.3 million, or 10.4%, from June 30, 2022. We had net loan charge-offs of $674 thousand, or 0.07% of average loans annualized for the second quarter 2023 compared to $414 thousand, or 0.04% of average loans annualized for the first quarter 2023 and $43 thousand, or 0.00% of average loans annualized, for the quarter ended June 30, 2022. Our total nonperforming loans decreased to $11.7 million at June 30, 2023 from $12.2 million at March 31, 2023 and $13.8 million at June 30, 2022. Nonperforming assets at $13.8 million decreased $1.2 million from March 31, 2023 and $2.0 million from June 30, 2022. Deposits, including repurchase agreements, at $4.7 billion decreased $6.5 million, or an annualized 0.6%, from March 31, 2023 but increased $34.0 million, or 0.7% from June 30, 2022. Shareholders’ equity at $660.1 million increased $3.3 million, or an annualized 2.0%, during the quarter and $28.1 million, or 4.4%, from June 30, 2022. Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter. Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter. Net Interest Income Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Percent Change Components of net interest income: Income on earning assets $64,827 $60,995 $45,352 6.3% 42.9% $125,822 $88,879 41.6% Expense on interest bearing liabilities 21,748 17,079 4,562 27.3% 376.7% 38,827 8,057 381.9% Net interest income 43,079 43,916 40,790 (1.9%) 5.6% 86,995 80,822 7.6% TEQ 298 298 232 0.1% 28.6% 596 467 27.6% Net interest income, tax equivalent $43,377 $44,214 $41,022 (1.9%) 5.7% $87,591 $81,289 7.8% Average yield and rates paid: Earning assets yield 5.03% 4.84% 3.56% 3.9% 41.5% 4.94% 3.51% 40.9% Rate paid on interest bearing liabilities 2.54% 2.06% 0.54% 23.3% 368.2% 2.30% 0.48% 376.7% Gross interest margin 2.49% 2.78% 3.02% (10.4%) (17.5%) 2.64% 3.03% (12.8%) Net interest margin 3.35% 3.49% 3.20% (4.1%) 4.7% 3.42% 3.19% 7.3% Average balances: Investment securities $1,230,556 $1,251,948 $1,452,021 (1.7%) (15.3%) $1,241,193 $1,468,193 (15.5%) Loans $3,836,446 $3,739,443 $3,538,324 2.6% 8.4% $3,788,213 $3,489,652 8.6% Earning assets $5,189,716 $5,131,385 $5,140,656 1.1% 1.0% $5,160,712 $5,137,421 0.5% Interest-bearing liabilities $3,435,072 $3,362,331 $3,373,741 2.2% 1.8% $3,398,902 $3,362,039 1.1% Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.35% decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter. Our average earning assets increased $58.3 million from prior quarter and $49.1 million from prior year same quarter. Our yield on average earning assets increased 19 basis points from prior quarter and 147 basis points from prior year same quarter, and our cost of funds increased 48 basis points from prior quarter and 200 basis points from prior year same quarter. Money market accounts, certificates of deposit, and other time deposits all experienced significant increases in rates during the quarter. Our net interest income for the six months ended June 30, 2023 was $87.0 million compared to $80.8 million for the six months ended June 30, 2022. Our ratio of average loans to deposits, including repurchase agreements, was 81.2% for the quarter ended June 30, 2023 compared to 79.8% for the quarter ended March 31, 2023 and 75.2% for the quarter ended June 30, 2022. Noninterest Income Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Percent Change Deposit related fees $7,513 $7,287 $7,263 3.1% 3.4% $14,800 $14,009 5.6% Trust revenue 3,351 3,079 3,198 8.9% 4.8% 6,430 6,446 (0.2%) Gains on sales of loans 115 121 519 (5.3%) (77.9%) 236 1,116 (78.9%) Loan related fees 1,197 845 1,415 41.7% (15.4%) 2,042 3,477 (41.3%) Bank owned life insurance revenue 735 858 702 (14.4%) 4.7% 1,593 1,393 14.4% Brokerage revenue 388 348 459 11.5% (15.4%) 736 1,049 (29.8%) Other 1,457 1,144 945 27.4% 54.3% 2,601 1,976 31.6% Total noninterest income $14,756 $13,682 $14,501 7.9% 1.8% $28,438 $29,466 (3.5%) Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter. The quarter over quarter increase included a $0.2 million increase in deposit related fees, a $0.3 million increase in trust revenue, and a $0.4 million increase in loan related fees due to the change in the fair market value of our mortgage servicing rights. The year over year increase included a $0.3 million increase in deposit related fees, a $0.2 million increase in trust revenue, and a $0.4 million increase in securities gains, partially offset by a $0.4 million decline in gains on sales of loans and a $0.2 million decline in loan related fees also resulting from the fluctuation in the fair market value of our mortgage servicing rights. Noninterest income for the first six months of 2023 was $28.4 million compared to $29.5 million for the six months ended June 30, 2022. Noninterest Expense Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Percent Change Salaries $12,732 $12,633 $12,219 0.8% 4.2% $25,365 $23,958 5.9% Employee benefits 5,573 6,275 6,315 (11.2%) (11.7%) 11,848 12,114 (2.2%) Net occupancy and equipment 2,895 3,028 2,756 (4.4%) 5.1% 5,923 5,610 5.6% Data processing 2,383 2,303 2,095 3.5% 13.8% 4,686 4,296 9.1% Legal and professional fees 912 816 884 11.8% 3.2% 1,728 1,751 (1.3%) Advertising and marketing 704 820 659 (14.1%) 6.9% 1,524 1,411 8.0% Taxes other than property and payroll 433 432 425 0.1% 1.7% 865 851 1.6% Net other real estate owned expense 61 119 43 (48.4%) 43.6% 180 396 (54.6%) Other 5,332 5,464 4,582 (2.4%) 16.4% 10,796 8,950 20.6% Total noninterest expense $31,025 $31,890 $29,978 (2.7%) 3.5% $62,915 $59,337 6.0% Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter. The decrease in noninterest expense quarter over quarter was primarily a result of a decrease in the accruals for incentive payments based on our current projected earnings for the year. The year over year increase included a $0.3 million increase in data processing expense, a $0.3 million increase in FDIC insurance premiums, and a $0.1 million increase in occupancy and equipment. A year over year decrease in personnel costs of $0.2 million was the result of reduction in the accruals for incentive payments of $1.3 million, partially offset by increases in salary expense ($0.5 million), group medical and life insurance expense ($0.5 million), and other employee benefits ($0.1 million). Noninterest expense for the first six months of 2023 was $62.9 million compared to $59.3 million for the six months ended June 30, 2022. Balance Sheet Review Total Loans Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 Commercial nonresidential real estate $787,598 $750,498 $758,227 4.9% 3.9% Commercial residential real estate 393,309 385,328 354,668 2.1% 10.9% Hotel/motel 372,981 348,876 280,956 6.9% 32.8% Other commercial 396,741 392,398 403,664 1.1% (1.7%) Total commercial 1,950,629 1,877,100 1,797,515 3.9% 8.5% Residential mortgage 883,104 846,435 793,249 4.3% 11.3% Home equity loans/lines 132,033 124,096 110,828 6.4% 19.1% Total residential 1,015,137 970,531 904,077 4.6% 12.3% Consumer indirect 806,081 772,570 697,060 4.3% 15.6% Consumer direct 157,848 157,158 159,791 0.4% (1.2%) Total consumer 963,929 929,728 856,851 3.7% 12.5% Total loans $3,929,695 $3,777,359 $3,558,443 4.0% 10.4% Total Deposits and Repurchase Agreements Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 Non-interest bearing deposits $1,361,078 $1,409,839 $1,408,148 (3.5%) (3.3%) Interest bearing deposits Interest checking 142,542 120,678 99,055 18.1% 43.9% Money market savings 1,389,081 1,408,314 1,243,817 (1.4%) 11.7% Savings accounts 611,772 642,232 671,349 (4.7%) (8.9%) Time deposits 1,012,187 962,361 1,050,559 5.2% (3.7%) Repurchase agreements 229,020 208,777 238,733 9.7% (4.1%) Total interest bearing deposits and repurchase agreements 3,384,602 3,342,362 3,303,513 1.3% 2.5% Total deposits and repurchase agreements $4,745,680 $4,752,201 $4,711,661 (0.1%) 0.7% CTBI’s total assets at $5.5 billion as of June 30, 2023 decreased $8.5 million, or 0.6% annualized, from March 31 2023 but increased $73.4 million, or 1.3%, from June 30, 2022. Loans outstanding at June 30, 2023 were $3.9 billion, an increase of $152.3 million, an annualized 16.2%, from March 31, 2023 and $371.3 million, or 10.4%, from June 30, 2022. The increase in loans from prior quarter included a $73.5 million increase in the commercial loan portfolio, a $44.6 million increase in the residential loan portfolio, a $33.5 million increase in the indirect consumer loan portfolio, and a $0.7 million increase in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $39.7 million, or an annualized 12.8%, from March 31, 2023 and $200.5 million, or 14.3%, from June 30, 2022. Deposits in other banks decreased $117.5 million from prior quarter and $78.7 million from June 30, 2022. Deposits, including repurchase agreements, at $4.7 billion decreased $6.5 million, or an annualized 0.6%, from March 31, 2023 but increased $34.0 million, or 0.7%, from June 30, 2022. Shareholders’ equity at $660.1 million increased $3.3 million, or an annualized 2.0%, during the quarter and $28.1 million, or 4.4%, from June 30, 2022, as unrealized losses on our securities portfolio continue to impact equity. Net unrealized losses on securities, net of deferred taxes, were $121.3 million at June 30, 2023, compared to $112.4 million at March 31, 2023 and $97.9 million at June 30, 2022. Management has evaluated the unrealized losses and determined that they were primarily driven by market rates. Management has the ability and intent to hold these securities to recovery or maturity. CTBI’s annualized dividend yield to shareholders as of June 30, 2023 was 4.95%. Asset Quality Our total nonperforming loans decreased to $11.7 million at June 30, 2023 from $12.2 million at March 31, 2023 and $13.8 million at June 30, 2022. Prior year nonperforming loans, as previously reported, exclude troubled debt restructurings which have been eliminated in the current period due to implementation of Accounting Standard Update 2022-02. Accruing loans 90+ days past due at $6.4 million increased $0.2 million from prior quarter and $1.4 million from June 30, 2022. Nonaccrual loans at $5.3 million decreased $0.6 million from prior quarter and $3.5 million from June 30, 2022. Accruing loans 30-89 days past due at $12.2 million increased $0.4 million from prior quarter and $1.6 million from June 30, 2022. 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 was $2.0 million at June 30, 2023 compared to $2.8 million at March 31, 2023 and $2.0 million at June 30, 2022. Sales of foreclosed properties for the quarter ended June 30, 2023 totaled $0.9 million while new foreclosed properties totaled $0.1 million. At June 30, 2023, the book value of properties under contracts to sell was $0.7 million; however, the closings had not occurred at quarter-end. We had net loan charge-offs of $674 thousand, or 0.07% of average loans annualized for the second quarter 2023 compared to $414 thousand, or 0.04% of average loans annualized for the first quarter 2023 and $43 thousand, or 0.00% of average loans annualized, for the quarter ended June 30, 2022. Net charge-offs for the six months ended June 30, 2023 were $1.1 million, or 0.06% of average loans annualized compared to $0.4 million, or 0.02% of average loans annualized for the six months ended June 30, 2022. Allowance for Credit Losses Our provision for credit losses for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter. Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2023 was 408.9% compared to 382.3% at March 31, 2023 and 305.9% at June 30, 2022. Our credit loss reserve as a percentage of total loans outstanding at June 30, 2023 was 1.22% compared to 1.24% at March 31, 2023 and 1.19% at June 30, 2022. 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 70 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) June 30, 2023 (in thousands except per share data and # of employees) Three Three Three Six Six Months Months Months Months Months Ended Ended Ended Ended Ended June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Interest income $ 64,827 $ 60,995 $ 45,352 $ 125,822 $ 88,879 Interest expense 21,748 17,079 4,562 38,827 8,057 Net interest income 43,079 43,916 40,790 86,995 80,822 Loan loss provision 2,009 1,116 77 3,125 952 Gains on sales of loans 115 121 519 236 1,116 Deposit related fees 7,513 7,287 7,263 14,800 14,009 Trust revenue 3,351 3,079 3,198 6,430 6,446 Loan related fees 1,197 845 1,415 2,042 3,477 Securities gains (losses) 165 218 (225) 383 (126) Other noninterest income 2,415 2,132 2,331 4,547 4,544 Total noninterest income 14,756 13,682 14,501 28,438 29,466 Personnel expense 18,305 18,908 18,534 37,213 36,072 Occupancy and equipment 2,895 3,028 2,756 5,923 5,610 Data processing expense 2,383 2,303 2,095 4,686 4,296 FDIC insurance premiums 610 606 358 1,216 713 Other noninterest expense 6,832 7,045 6,235 13,877 12,646 Total noninterest expense 31,025 31,890 29,978 62,915 59,337 Net income before taxes 24,801 24,592 25,236 49,393 49,999 Income taxes 5,397 5,279 4,965 10,676 10,000 Net income $ 19,404 $ 19,313 $ 20,271 $ 38,717 $ 39,999 Memo: TEQ interest income $ 65,125 $ 61,293 $ 45,584 $ 126,418 $ 89,346 Average shares outstanding 17,884 17,872 17,835 17,877 17,827 Diluted average shares outstanding 17,890 17,884 17,843 17,885 17,838 Basic earnings per share $ 1.09 $ 1.08 $ 1.14 $ 2.17 $ 2.24 Diluted earnings per share $ 1.08 $ 1.08 $ 1.14 $ 2.16 $ 2.24 Dividends per share $ 0.44 $ 0.44 $ 0.40 $ 0.88 $ 0.800 Average balances: Loans $ 3,836,446 $ 3,739,443 $ 3,538,324 $ 3,788,213 $ 3,489,652 Earning assets 5,189,716 5,131,385 5,140,656 5,160,712 5,137,421 Total assets 5,509,776 5,458,067 5,446,263 5,484,065 5,432,110 Deposits, including repurchase agreements 4,727,386 4,688,103 4,705,492 4,707,853 4,669,938 Interest bearing liabilities 3,435,072 3,362,331 3,373,741 3,398,902 3,362,039 Shareholders' equity 663,896 651,008 637,542 657,488 658,419 Performance ratios: Return on average assets 1.41% 1.44% 1.49% 1.42% 1.48% Return on average equity 11.72% 12.03% 12.75% 11.87% 12.25% Yield on average earning assets (tax equivalent) 5.03% 4.84% 3.56% 4.94% 3.51% Cost of interest bearing funds (tax equivalent) 2.54% 2.06% 0.54% 2.30% 0.48% Net interest margin (tax equivalent) 3.35% 3.49% 3.20% 3.42% 3.19% Efficiency ratio (tax equivalent) 53.52% 55.29% 53.77% 54.40% 53.51% Loan charge-offs $ 1,953 $ 1,765 $ 828 $ 3,718 $ 2,148 Recoveries (1,279) (1,351) (786) (2,630) (1,784) Net charge-offs $ 674 $ 414 $ 42 $ 1,088 $ 364 Market Price: High $ 40.30 $ 47.35 $ 42.91 $ 47.35 $ 46.30 Low $ 32.68 $ 37.31 $ 39.10 $ 32.68 $ 39.10 Close $ 35.57 $ 37.95 $ 40.44 $ 35.57 $ 40.44 As of As of As of June 30, 2023 March 31, 2023 June 30, 2022 Assets: Loans $ 3,929,695 $ 3,777,359 $ 3,558,443 Loan loss reserve (48,018) (46,683) (42,344) Net loans 3,881,677 3,730,676 3,516,099 Loans held for sale 238 182 936 Securities AFS 1,201,253 1,241,080 1,402,127 Equity securities at fair value 2,545 2,380 2,128 Other equity investments 11,432 9,713 13,026 Other earning assets 62,726 177,209 140,384 Cash and due from banks 48,915 60,762 75,373 Premises and equipment 42,911 42,636 40,704 Right of use asset 16,678 17,037 12,005 Goodwill and core deposit intangible 65,490 65,490 65,490 Other assets 186,933 182,155 179,078 Total Assets $ 5,520,798 $ 5,529,320 $ 5,447,350 Liabilities and Equity: Interest bearing checking $ 142,542 $ 120,678 $ 99,055 Savings deposits 2,000,853 2,050,546 1,915,166 CD's >=$100,000 538,492 501,557 573,519 Other time deposits 473,695 460,804 477,040 Total interest bearing deposits 3,155,582 3,133,585 3,064,780 Noninterest bearing deposits 1,361,078 1,409,839 1,408,148 Total deposits 4,516,660 4,543,424 4,472,928 Repurchase agreements 229,020 208,777 238,733 Other interest bearing liabilities 65,195 65,254 58,706 Lease liability 17,317 17,619 12,479 Other noninterest bearing liabilities 32,481 37,425 32,454 Total liabilities 4,860,673 4,872,499 4,815,300 Shareholders' equity 660,125 656,821 632,050 Total Liabilities and Equity $ 5,520,798 $ 5,529,320 $ 5,447,350 Ending shares outstanding 17,984 17,976 17,895 30 - 89 days past due loans $ 12,158 $ 11,728 $ 10,595 90 days past due loans 6,399 6,218 5,018 Nonaccrual loans 5,345 5,993 8,824 Foreclosed properties 2,047 2,776 1,954 Community bank leverage ratio 13.82% 13.71% 13.14% Tangible equity to tangible assets ratio 10.90% 10.82% 10.53% FTE employees 975 945 958 View source version on businesswire.com: https://www.businesswire.com/news/home/20230719117172/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) 2Q 2023 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Net income $19,404 $19,313 $20,271 $38,717 $39,999 Earnings per share $1.09 $1.08 $1.14 $2.17 $2.24 Earnings per share - diluted $1.08 $1.08 $1.14 $2.16 $2.24 Return on average assets 1.41% 1.44% 1.49% 1.42% 1.48% Return on average equity 11.72% 12.03% 12.75% 11.87% 12.25% Efficiency ratio 53.52% 55.29% 53.77% 54.40% 53.51% Tangible common equity 10.90% 10.82% 10.53% Dividends declared per share $0.44 $0.44 $0.40 $0.88 $0.80 Book value per share $36.71 $36.54 $35.32 Weighted average shares 17,884 17,872 17,835 17,877 17,827 Weighted average shares - diluted 17,890 17,884 17,843 17,885 17,838 Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved earnings for the second quarter 2023 of $19.4 million, or $1.09 per basic share, compared to $19.3 million, or $1.08 per basic share, earned during the first quarter 2023 and $20.3 million, or $1.14 per basic share, earned during the second quarter 2022. Total revenue was $0.2 million above prior quarter and $2.5 million above prior year same quarter. Net interest revenue decreased $0.8 million compared to prior quarter but increased $2.3 million compared to prior year same quarter, and noninterest income increased $1.1 million compared to prior quarter and $0.3 million compared to prior year same quarter. Our provision for credit losses for the quarter increased $0.9 million for the quarter and was $1.9 million higher than second quarter 2022. Noninterest expense decreased $0.9 million compared to prior quarter but was $1.0 million higher than prior year same quarter. Earnings for the six months ended June 30, 2023 were $38.7 million, or $2.17 per basic share, compared to $40.0 million, or $2.24 per basic share for the six months ended June 30, 2022. 2nd Quarter 2023 Highlights Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter, as our net interest margin decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter. Provision for credit losses at $2.0 million for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter. Our loan portfolio at $3.9 billion increased $152.3 million, an annualized 16.2%, from March 31, 2023 and $371.3 million, or 10.4%, from June 30, 2022. We had net loan charge-offs of $674 thousand, or 0.07% of average loans annualized for the second quarter 2023 compared to $414 thousand, or 0.04% of average loans annualized for the first quarter 2023 and $43 thousand, or 0.00% of average loans annualized, for the quarter ended June 30, 2022. Our total nonperforming loans decreased to $11.7 million at June 30, 2023 from $12.2 million at March 31, 2023 and $13.8 million at June 30, 2022. Nonperforming assets at $13.8 million decreased $1.2 million from March 31, 2023 and $2.0 million from June 30, 2022. Deposits, including repurchase agreements, at $4.7 billion decreased $6.5 million, or an annualized 0.6%, from March 31, 2023 but increased $34.0 million, or 0.7% from June 30, 2022. Shareholders’ equity at $660.1 million increased $3.3 million, or an annualized 2.0%, during the quarter and $28.1 million, or 4.4%, from June 30, 2022. Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter. Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter. Net Interest Income Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Percent Change Components of net interest income: Income on earning assets $64,827 $60,995 $45,352 6.3% 42.9% $125,822 $88,879 41.6% Expense on interest bearing liabilities 21,748 17,079 4,562 27.3% 376.7% 38,827 8,057 381.9% Net interest income 43,079 43,916 40,790 (1.9%) 5.6% 86,995 80,822 7.6% TEQ 298 298 232 0.1% 28.6% 596 467 27.6% Net interest income, tax equivalent $43,377 $44,214 $41,022 (1.9%) 5.7% $87,591 $81,289 7.8% Average yield and rates paid: Earning assets yield 5.03% 4.84% 3.56% 3.9% 41.5% 4.94% 3.51% 40.9% Rate paid on interest bearing liabilities 2.54% 2.06% 0.54% 23.3% 368.2% 2.30% 0.48% 376.7% Gross interest margin 2.49% 2.78% 3.02% (10.4%) (17.5%) 2.64% 3.03% (12.8%) Net interest margin 3.35% 3.49% 3.20% (4.1%) 4.7% 3.42% 3.19% 7.3% Average balances: Investment securities $1,230,556 $1,251,948 $1,452,021 (1.7%) (15.3%) $1,241,193 $1,468,193 (15.5%) Loans $3,836,446 $3,739,443 $3,538,324 2.6% 8.4% $3,788,213 $3,489,652 8.6% Earning assets $5,189,716 $5,131,385 $5,140,656 1.1% 1.0% $5,160,712 $5,137,421 0.5% Interest-bearing liabilities $3,435,072 $3,362,331 $3,373,741 2.2% 1.8% $3,398,902 $3,362,039 1.1% Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.35% decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter. Our average earning assets increased $58.3 million from prior quarter and $49.1 million from prior year same quarter. Our yield on average earning assets increased 19 basis points from prior quarter and 147 basis points from prior year same quarter, and our cost of funds increased 48 basis points from prior quarter and 200 basis points from prior year same quarter. Money market accounts, certificates of deposit, and other time deposits all experienced significant increases in rates during the quarter. Our net interest income for the six months ended June 30, 2023 was $87.0 million compared to $80.8 million for the six months ended June 30, 2022. Our ratio of average loans to deposits, including repurchase agreements, was 81.2% for the quarter ended June 30, 2023 compared to 79.8% for the quarter ended March 31, 2023 and 75.2% for the quarter ended June 30, 2022. Noninterest Income Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Percent Change Deposit related fees $7,513 $7,287 $7,263 3.1% 3.4% $14,800 $14,009 5.6% Trust revenue 3,351 3,079 3,198 8.9% 4.8% 6,430 6,446 (0.2%) Gains on sales of loans 115 121 519 (5.3%) (77.9%) 236 1,116 (78.9%) Loan related fees 1,197 845 1,415 41.7% (15.4%) 2,042 3,477 (41.3%) Bank owned life insurance revenue 735 858 702 (14.4%) 4.7% 1,593 1,393 14.4% Brokerage revenue 388 348 459 11.5% (15.4%) 736 1,049 (29.8%) Other 1,457 1,144 945 27.4% 54.3% 2,601 1,976 31.6% Total noninterest income $14,756 $13,682 $14,501 7.9% 1.8% $28,438 $29,466 (3.5%) Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter. The quarter over quarter increase included a $0.2 million increase in deposit related fees, a $0.3 million increase in trust revenue, and a $0.4 million increase in loan related fees due to the change in the fair market value of our mortgage servicing rights. The year over year increase included a $0.3 million increase in deposit related fees, a $0.2 million increase in trust revenue, and a $0.4 million increase in securities gains, partially offset by a $0.4 million decline in gains on sales of loans and a $0.2 million decline in loan related fees also resulting from the fluctuation in the fair market value of our mortgage servicing rights. Noninterest income for the first six months of 2023 was $28.4 million compared to $29.5 million for the six months ended June 30, 2022. Noninterest Expense Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 YTD 2023 YTD 2022 Percent Change Salaries $12,732 $12,633 $12,219 0.8% 4.2% $25,365 $23,958 5.9% Employee benefits 5,573 6,275 6,315 (11.2%) (11.7%) 11,848 12,114 (2.2%) Net occupancy and equipment 2,895 3,028 2,756 (4.4%) 5.1% 5,923 5,610 5.6% Data processing 2,383 2,303 2,095 3.5% 13.8% 4,686 4,296 9.1% Legal and professional fees 912 816 884 11.8% 3.2% 1,728 1,751 (1.3%) Advertising and marketing 704 820 659 (14.1%) 6.9% 1,524 1,411 8.0% Taxes other than property and payroll 433 432 425 0.1% 1.7% 865 851 1.6% Net other real estate owned expense 61 119 43 (48.4%) 43.6% 180 396 (54.6%) Other 5,332 5,464 4,582 (2.4%) 16.4% 10,796 8,950 20.6% Total noninterest expense $31,025 $31,890 $29,978 (2.7%) 3.5% $62,915 $59,337 6.0% Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter. The decrease in noninterest expense quarter over quarter was primarily a result of a decrease in the accruals for incentive payments based on our current projected earnings for the year. The year over year increase included a $0.3 million increase in data processing expense, a $0.3 million increase in FDIC insurance premiums, and a $0.1 million increase in occupancy and equipment. A year over year decrease in personnel costs of $0.2 million was the result of reduction in the accruals for incentive payments of $1.3 million, partially offset by increases in salary expense ($0.5 million), group medical and life insurance expense ($0.5 million), and other employee benefits ($0.1 million). Noninterest expense for the first six months of 2023 was $62.9 million compared to $59.3 million for the six months ended June 30, 2022. Balance Sheet Review Total Loans Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 Commercial nonresidential real estate $787,598 $750,498 $758,227 4.9% 3.9% Commercial residential real estate 393,309 385,328 354,668 2.1% 10.9% Hotel/motel 372,981 348,876 280,956 6.9% 32.8% Other commercial 396,741 392,398 403,664 1.1% (1.7%) Total commercial 1,950,629 1,877,100 1,797,515 3.9% 8.5% Residential mortgage 883,104 846,435 793,249 4.3% 11.3% Home equity loans/lines 132,033 124,096 110,828 6.4% 19.1% Total residential 1,015,137 970,531 904,077 4.6% 12.3% Consumer indirect 806,081 772,570 697,060 4.3% 15.6% Consumer direct 157,848 157,158 159,791 0.4% (1.2%) Total consumer 963,929 929,728 856,851 3.7% 12.5% Total loans $3,929,695 $3,777,359 $3,558,443 4.0% 10.4% Total Deposits and Repurchase Agreements Percent Change 2Q 2023 Compared to: ($ in thousands) 2Q 2023 1Q 2023 2Q 2022 1Q 2023 2Q 2022 Non-interest bearing deposits $1,361,078 $1,409,839 $1,408,148 (3.5%) (3.3%) Interest bearing deposits Interest checking 142,542 120,678 99,055 18.1% 43.9% Money market savings 1,389,081 1,408,314 1,243,817 (1.4%) 11.7% Savings accounts 611,772 642,232 671,349 (4.7%) (8.9%) Time deposits 1,012,187 962,361 1,050,559 5.2% (3.7%) Repurchase agreements 229,020 208,777 238,733 9.7% (4.1%) Total interest bearing deposits and repurchase agreements 3,384,602 3,342,362 3,303,513 1.3% 2.5% Total deposits and repurchase agreements $4,745,680 $4,752,201 $4,711,661 (0.1%) 0.7% CTBI’s total assets at $5.5 billion as of June 30, 2023 decreased $8.5 million, or 0.6% annualized, from March 31 2023 but increased $73.4 million, or 1.3%, from June 30, 2022. Loans outstanding at June 30, 2023 were $3.9 billion, an increase of $152.3 million, an annualized 16.2%, from March 31, 2023 and $371.3 million, or 10.4%, from June 30, 2022. The increase in loans from prior quarter included a $73.5 million increase in the commercial loan portfolio, a $44.6 million increase in the residential loan portfolio, a $33.5 million increase in the indirect consumer loan portfolio, and a $0.7 million increase in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $39.7 million, or an annualized 12.8%, from March 31, 2023 and $200.5 million, or 14.3%, from June 30, 2022. Deposits in other banks decreased $117.5 million from prior quarter and $78.7 million from June 30, 2022. Deposits, including repurchase agreements, at $4.7 billion decreased $6.5 million, or an annualized 0.6%, from March 31, 2023 but increased $34.0 million, or 0.7%, from June 30, 2022. Shareholders’ equity at $660.1 million increased $3.3 million, or an annualized 2.0%, during the quarter and $28.1 million, or 4.4%, from June 30, 2022, as unrealized losses on our securities portfolio continue to impact equity. Net unrealized losses on securities, net of deferred taxes, were $121.3 million at June 30, 2023, compared to $112.4 million at March 31, 2023 and $97.9 million at June 30, 2022. Management has evaluated the unrealized losses and determined that they were primarily driven by market rates. Management has the ability and intent to hold these securities to recovery or maturity. CTBI’s annualized dividend yield to shareholders as of June 30, 2023 was 4.95%. Asset Quality Our total nonperforming loans decreased to $11.7 million at June 30, 2023 from $12.2 million at March 31, 2023 and $13.8 million at June 30, 2022. Prior year nonperforming loans, as previously reported, exclude troubled debt restructurings which have been eliminated in the current period due to implementation of Accounting Standard Update 2022-02. Accruing loans 90+ days past due at $6.4 million increased $0.2 million from prior quarter and $1.4 million from June 30, 2022. Nonaccrual loans at $5.3 million decreased $0.6 million from prior quarter and $3.5 million from June 30, 2022. Accruing loans 30-89 days past due at $12.2 million increased $0.4 million from prior quarter and $1.6 million from June 30, 2022. 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 was $2.0 million at June 30, 2023 compared to $2.8 million at March 31, 2023 and $2.0 million at June 30, 2022. Sales of foreclosed properties for the quarter ended June 30, 2023 totaled $0.9 million while new foreclosed properties totaled $0.1 million. At June 30, 2023, the book value of properties under contracts to sell was $0.7 million; however, the closings had not occurred at quarter-end. We had net loan charge-offs of $674 thousand, or 0.07% of average loans annualized for the second quarter 2023 compared to $414 thousand, or 0.04% of average loans annualized for the first quarter 2023 and $43 thousand, or 0.00% of average loans annualized, for the quarter ended June 30, 2022. Net charge-offs for the six months ended June 30, 2023 were $1.1 million, or 0.06% of average loans annualized compared to $0.4 million, or 0.02% of average loans annualized for the six months ended June 30, 2022. Allowance for Credit Losses Our provision for credit losses for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter. Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2023 was 408.9% compared to 382.3% at March 31, 2023 and 305.9% at June 30, 2022. Our credit loss reserve as a percentage of total loans outstanding at June 30, 2023 was 1.22% compared to 1.24% at March 31, 2023 and 1.19% at June 30, 2022. 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 70 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) June 30, 2023 (in thousands except per share data and # of employees) Three Three Three Six Six Months Months Months Months Months Ended Ended Ended Ended Ended June 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023 June 30, 2022 Interest income $ 64,827 $ 60,995 $ 45,352 $ 125,822 $ 88,879 Interest expense 21,748 17,079 4,562 38,827 8,057 Net interest income 43,079 43,916 40,790 86,995 80,822 Loan loss provision 2,009 1,116 77 3,125 952 Gains on sales of loans 115 121 519 236 1,116 Deposit related fees 7,513 7,287 7,263 14,800 14,009 Trust revenue 3,351 3,079 3,198 6,430 6,446 Loan related fees 1,197 845 1,415 2,042 3,477 Securities gains (losses) 165 218 (225) 383 (126) Other noninterest income 2,415 2,132 2,331 4,547 4,544 Total noninterest income 14,756 13,682 14,501 28,438 29,466 Personnel expense 18,305 18,908 18,534 37,213 36,072 Occupancy and equipment 2,895 3,028 2,756 5,923 5,610 Data processing expense 2,383 2,303 2,095 4,686 4,296 FDIC insurance premiums 610 606 358 1,216 713 Other noninterest expense 6,832 7,045 6,235 13,877 12,646 Total noninterest expense 31,025 31,890 29,978 62,915 59,337 Net income before taxes 24,801 24,592 25,236 49,393 49,999 Income taxes 5,397 5,279 4,965 10,676 10,000 Net income $ 19,404 $ 19,313 $ 20,271 $ 38,717 $ 39,999 Memo: TEQ interest income $ 65,125 $ 61,293 $ 45,584 $ 126,418 $ 89,346 Average shares outstanding 17,884 17,872 17,835 17,877 17,827 Diluted average shares outstanding 17,890 17,884 17,843 17,885 17,838 Basic earnings per share $ 1.09 $ 1.08 $ 1.14 $ 2.17 $ 2.24 Diluted earnings per share $ 1.08 $ 1.08 $ 1.14 $ 2.16 $ 2.24 Dividends per share $ 0.44 $ 0.44 $ 0.40 $ 0.88 $ 0.800 Average balances: Loans $ 3,836,446 $ 3,739,443 $ 3,538,324 $ 3,788,213 $ 3,489,652 Earning assets 5,189,716 5,131,385 5,140,656 5,160,712 5,137,421 Total assets 5,509,776 5,458,067 5,446,263 5,484,065 5,432,110 Deposits, including repurchase agreements 4,727,386 4,688,103 4,705,492 4,707,853 4,669,938 Interest bearing liabilities 3,435,072 3,362,331 3,373,741 3,398,902 3,362,039 Shareholders' equity 663,896 651,008 637,542 657,488 658,419 Performance ratios: Return on average assets 1.41% 1.44% 1.49% 1.42% 1.48% Return on average equity 11.72% 12.03% 12.75% 11.87% 12.25% Yield on average earning assets (tax equivalent) 5.03% 4.84% 3.56% 4.94% 3.51% Cost of interest bearing funds (tax equivalent) 2.54% 2.06% 0.54% 2.30% 0.48% Net interest margin (tax equivalent) 3.35% 3.49% 3.20% 3.42% 3.19% Efficiency ratio (tax equivalent) 53.52% 55.29% 53.77% 54.40% 53.51% Loan charge-offs $ 1,953 $ 1,765 $ 828 $ 3,718 $ 2,148 Recoveries (1,279) (1,351) (786) (2,630) (1,784) Net charge-offs $ 674 $ 414 $ 42 $ 1,088 $ 364 Market Price: High $ 40.30 $ 47.35 $ 42.91 $ 47.35 $ 46.30 Low $ 32.68 $ 37.31 $ 39.10 $ 32.68 $ 39.10 Close $ 35.57 $ 37.95 $ 40.44 $ 35.57 $ 40.44 As of As of As of June 30, 2023 March 31, 2023 June 30, 2022 Assets: Loans $ 3,929,695 $ 3,777,359 $ 3,558,443 Loan loss reserve (48,018) (46,683) (42,344) Net loans 3,881,677 3,730,676 3,516,099 Loans held for sale 238 182 936 Securities AFS 1,201,253 1,241,080 1,402,127 Equity securities at fair value 2,545 2,380 2,128 Other equity investments 11,432 9,713 13,026 Other earning assets 62,726 177,209 140,384 Cash and due from banks 48,915 60,762 75,373 Premises and equipment 42,911 42,636 40,704 Right of use asset 16,678 17,037 12,005 Goodwill and core deposit intangible 65,490 65,490 65,490 Other assets 186,933 182,155 179,078 Total Assets $ 5,520,798 $ 5,529,320 $ 5,447,350 Liabilities and Equity: Interest bearing checking $ 142,542 $ 120,678 $ 99,055 Savings deposits 2,000,853 2,050,546 1,915,166 CD's >=$100,000 538,492 501,557 573,519 Other time deposits 473,695 460,804 477,040 Total interest bearing deposits 3,155,582 3,133,585 3,064,780 Noninterest bearing deposits 1,361,078 1,409,839 1,408,148 Total deposits 4,516,660 4,543,424 4,472,928 Repurchase agreements 229,020 208,777 238,733 Other interest bearing liabilities 65,195 65,254 58,706 Lease liability 17,317 17,619 12,479 Other noninterest bearing liabilities 32,481 37,425 32,454 Total liabilities 4,860,673 4,872,499 4,815,300 Shareholders' equity 660,125 656,821 632,050 Total Liabilities and Equity $ 5,520,798 $ 5,529,320 $ 5,447,350 Ending shares outstanding 17,984 17,976 17,895 30 - 89 days past due loans $ 12,158 $ 11,728 $ 10,595 90 days past due loans 6,399 6,218 5,018 Nonaccrual loans 5,345 5,993 8,824 Foreclosed properties 2,047 2,776 1,954 Community bank leverage ratio 13.82% 13.71% 13.14% Tangible equity to tangible assets ratio 10.90% 10.82% 10.53% FTE employees 975 945 958 View source version on businesswire.com: https://www.businesswire.com/news/home/20230719117172/en/
