Exhibit 1
FOR IMMEDIATE RELEASE
July 14, 2004
FOR ADDITIONAL INFORMATION PLEASE CONTACT JEAN R. HALE, VICE CHAIRMAN, PRESIDENT, AND C.E.O., COMMUNITY TRUST BANCORP, INC. AT (606) 437-3294
Community Trust Bancorp, Inc. reports increased earnings for the second quarter 2004 of $7.8 million or $0.58 per share.
Earnings Summary | ||||||||||
2Q2004 | 1Q2004 | 2Q2003 | ||||||||
Net income(in thousands) | $7,756 | $7,280 | $7,064 | |||||||
| Earnings per share | $0.58 | $0.54 | $0.52 | |||||||
| Earnings per share (diluted) | $0.57 | $0.53 | $0.52 | |||||||
| Return on average assets | 1.26% | 1.18% | 1.14% | |||||||
| Return on average equity | 13.81% | 12.97% | 13.27% | |||||||
| Efficiency ratio | 58.37% | 58.53% | 56.95% | |||||||
| Dividends declared per share | $0.23 | $0.23 | $0.19 | |||||||
| Book value per share | $16.78 | $16.81 | $15.88 | |||||||
Community Trust Bancorp, Inc. (NASDAQ-CTBI) is reporting increased earnings for the second quarter 2004 of $7.8 million or $0.58 per share compared to $7.1 million or $0.52 per share earned during the second quarter of 2003 and $7.3 million or $0.54 per share earned during the first quarter of 2004. Year-to-date earnings for the six months ended June 30, 2004 were $15.0 million or $1.12 per share compared to $14.1 million or $1.04 per share for the six months ended June 30, 2003.
Second Quarter and Year-to-Date Highlights
vThe Company's basic earnings per share of $0.58 for the second quarter 2004 reflects an increase of 11.5% over prior year. Year-to-date earnings per share increased 7.7% over prior year.
vThe Company's net interest margin for the second quarter 2004 of 4.09% remained stable from the prior quarter and improved 34 basis points from prior year.
vNoninterest income for the second quarter 2004 was positively impacted by $0.5 million after-tax because of the improvement in the fair market value of our capitalized mortgage servicing rights. The impact to earnings per share for the quarter ended June 30, 2004 was $0.04 per share.
vThe Company experienced growth in its loan portfolio at a rate of 10.6% from June 30, 2003 and an annualized rate of 10.0% from the first quarter 2004.
vAsset quality improved for the Company from prior year with nonperforming loans decreasing to $19.9 million, a 17.6% decrease from the $24.1 million of June 30, 2003.
Return on average assets for the quarter ended June 30, 2004 was 1.26% compared to 1.14% for the second quarter 2003 and 1.18% for the first quarter 2004. Return on average assets for the first six months of 2004 was 1.22% compared to 1.14% for the first six months of 2003. Return on average shareholders’ equity for the quarter ended June 30, 2004 was 13.81% compared to 13.27% for the quarter ended June 30, 2003 and 12.97% for the quarter ended March 31, 2004. Return on average equity for the six months ended June 30, 2004 was 13.39% compared to 13.33% for the first six months of 2003. CTBI’s efficiency ratio for the six months ended June 30, 2004 improved to 58.45% from 59.34% for the six months ended June 30, 2003.
Net Interest Income
Our net interest margin of 4.09% for the quarter ended June 30, 2004 is a 34 basis point increase from the 3.75% for the quarter ended June 30, 2003 and is flat to the quarter ended March 31, 2004. Management expects its net interest margin to remain relatively stable with the redeployment of normal maturities from the investment portfolio to the higher yielding loan portfolio.
Noninterest Income
Noninterest income decreased 4.9% for the quarter ended June 30, 2004 compared to the quarter ended June 30, 2003 but increased 13.8% compared to the quarter ended March 31, 2004. Year-to-date noninterest income decreased 5.5% from prior year. Noninterest income for the quarter ended June 30, 2003 included approximately $1.6 million in securities gains. Also, as residential mortgage refinancing slowed, the Company had a decrease in gains on sales of loans of $1.2 million in the second quarter 2004 compared to the second quarter 2003.
Noninterest income for the second quarter 2004 was positively impacted by $0.8 million pre-tax because of the improvement in the fair market value of our capitalized mortgage servicing rights. Noninterest income for the quarters ended June 30, 2003 and March 31, 2004 were negatively impacted by charges to our valuation reserve for capitalized mortgage servicing rights of $0.8 million and $0.6 million, respectively.
Noninterest income was also positively impacted by $0.5 million during the second quarter of 2004, in addition to the $0.8 million in the first quarter 2004, derived from the adjustment of the carrying value of loans acquired with the 2002 acquisition of Citizens National Bank of Hazard to its net realizable value. These loans were recorded at acquisition at an amount estimated to be their net realizable value; however, the repayment experience on these loans has been better than expected and the carrying value of these loans has been increased to reflect the higher net realizable value.
Noninterest Expense
Noninterest expense of $18.8 million is a 12.0% increase from the $16.8 million for the second quarter 2003 and a 3.2% increase from the first quarter 2004. The increase in noninterest expense from prior year and prior quarter was primarily attributable to increased personnel expense due to the filling of budgeted key positions and the accrual of a performance-based incentive in the amount of $0.8 million.
Balance Sheet Review
The Company's loan portfolio grew $174.5 million or 10.6% from prior year as growth occurred in all three major loan categories, commercial, residential real estate, and consumer loans. Total deposits and repurchase agreements of $2.1 billion at June 30, 2004 represent a decline of 2.6% from June 30, 2003. The Company’s assets were $2.4 billion at June 30, 2004, a decrease of 2.6% from prior year.
Shareholders’ equity of $225.6 million on June 30, 2004 is a 5.9% increase from the $213.1 million on June 30, 2003 and a slight decrease of 0.1% from the $225.9 on March 31, 2004. The decrease from prior quarter is due to a $5.3 million decrease in net unrealized gains on securities. The Company's annualized dividend yield to shareholders as of June 30, 2004 was 3.02%.
Asset Quality
Nonperforming loans decreased to $19.9 million, or 1.1% of total loans, from the $24.1 million, or 1.5% of total loans, at June 30, 2003, but increased from the $17.9 million, or 1.0% of total loans, at March 31, 2004.
Foreclosed properties on June 30, 2004 were $6.2 million, a decrease from the $6.8 million at March 31, 2004 but an increase from the $3.5 million reported at June 30, 2003.
Net loan charge-offs for the quarter ended June 30, 2004 of $1.2 million were 65.9% less than the $3.4 million for the second quarter of 2003 and 29.4% less than the $1.6 million for the first quarter of 2004. The improvement in net charge-offs is reflected in the decrease in provision for loan loss expense for the second quarter 2004 of $1.8 million compared to the second quarter 2003 and $0.3 million compared to the first quarter 2004. Our reserve for losses on loans as a percentage of total loans outstanding at June 30, 2004 remained flat to March 31, 2004 and June 30, 2003 at 1.42%.
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. The Company’s actual results may differ materially from those included in the forward-looking statements. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intend," "estimate," "may increase," "may fluctuate," and similar expressions or future or conditional verbs such as "will," "should," "would," and "could." These forward-looking statements involve risks and uncertainties including, but not limited to, economic conditions, portfolio growth, the credit performance of the portfolios, including bankruptcies, and seasonal factors; changes in general economic conditions including the performance of financial markets, the performance of coal and coal related industries, prevailing inflation and interest rates, realized gai ns from sales of investments, gains from asset sales, and losses on commercial lending activities; results of various investment activities; the effects of competitors’ pricing policies, of changes in laws and regulations on competition and of demographic changes on target market populations’ savings and financial planning needs; industry changes in information technology systems on which we are highly dependent; failure of acquisitions to produce revenue enhancements or cost savings at levels or within the time frames originally anticipated or unforeseen integration difficulties; the adoption by the Company of an FFIEC policy that provides guidance on the reporting of delinquent consumer loans and the timing of associated credit charge-offs for financial institution subsidiaries; and the resolution of legal proceedings and related matters. In addition, the banking industry in general is subject to various monetary and fiscal policies and regulations, which include those determined by the Federal R eserve Board, the Federal Deposit Insurance Corporation, and state regulators, whose policies and regulations could affect the Company’s results. These statements are representative only on the date hereof, and the Company undertakes no obligation to update any forward-looking statements made.
Community Trust Bancorp, Inc., with assets of $2.4 billion, is headquartered in Pikeville, Kentucky and has 70 banking locations across eastern, northern, central, and south central Kentucky, 5 banking locations in southern West Virginia, and 5 trust offices across Kentucky.
Additional information follows.
Community Trust Bancorp, Inc. | ||||||||||||||||
Financial Summary (Unaudited) | ||||||||||||||||
June 30, 2004 | ||||||||||||||||
(in thousands except per share data) | ||||||||||||||||
| Three | Three | Three | Six | Six | ||||||||||||
| Months | Months | Months | Months | Months | ||||||||||||
| Ended | Ended | Ended | Ended | Ended | ||||||||||||
| 6/30/04 | 3/31/04 | 6/30/03 | 6/30/04 | 6/30/03 | ||||||||||||
| Interest income | $ | 31,022 | $ | 31,297 | $ | 32,688 | $ | 62,319 | $ | 65,355 | ||||||
| Interest expense | 8,368 | 8,616 | 11,670 | 16,984 | 23,809 | |||||||||||
| Net interest income | 22,654 | 22,681 | 21,018 | 45,335 | 41,546 | |||||||||||
| Loan loss provision | 1,785 | 2,133 | 3,585 | 3,918 | 5,132 | |||||||||||
| Securities gains | - | 1 | 1,587 | 1 | 2,566 | |||||||||||
| Gains on sales of loans | 410 | 459 | 1,595 | 869 | 3,116 | |||||||||||
| Deposit service charges | 4,462 | 4,237 | 4,300 | 8,699 | 8,162 | |||||||||||
| Trust revenue | 614 | 561 | 634 | 1,175 | 1,247 | |||||||||||
| Insurance commissions | 79 | 65 | 138 | 144 | 240 | |||||||||||
| Other noninterest income | 3,555 | 2,692 | 1,331 | 6,247 | 2,800 | |||||||||||
| Total noninterest income | 9,120 | 8,015 | 9,585 | 17,135 | 18,131 | |||||||||||
| Personnel expense | 10,015 | 9,691 | 7,838 | 19,706 | 16,899 | |||||||||||
| Occupancy and equipment | 2,365 | 2,413 | 2,414 | 4,778 | 4,714 | |||||||||||
| Amortization of core deposit intangible | 145 | 145 | 145 | 290 | 290 | |||||||||||
| Other noninterest expense | 6,247 | 5,945 | 6,367 | 12,192 | 12,472 | |||||||||||
| Total noninterest expense | 18,772 | 18,194 | 16,764 | 36,966 | 34,375 | |||||||||||
| Net income before taxes | 11,217 | 10,369 | 10,254 | 21,586 | 20,170 | |||||||||||
| Income taxes | 3,461 | 3,089 | 3,190 | 6,550 | 6,113 | |||||||||||
| Net income | $ | 7,756 | $ | 7,280 | $ | 7,064 | $ | 15,036 | $ | 14,057 | ||||||
| Memo: TEQ interest income | $ | 31,407 | $ | 31,686 | $ | 33,107 | $ | 63,093 | $ | 66,172 | ||||||
| Average shares outstanding | 13,447 | 13,467 | 13,478 | 13,457 | 13,507 | |||||||||||
| Basic earnings per share | $ | 0.58 | $ | 0.54 | $ | 0.52 | $ | 1.12 | $ | 1.04 | ||||||
| Diluted earnings per share | $ | 0.57 | $ | 0.53 | $ | 0.52 | $ | 1.10 | $ | 1.03 | ||||||
| Dividends per share | $ | 0.23 | $ | 0.23 | $ | 0.19 | $ | 0.46 | $ | 0.38 | ||||||
Average balances: | ||||||||||||||||
| Loans, net of unearned income | $ | 1,791,776 | $ | 1,744,992 | $ | 1,640,313 | $ | 1,768,384 | $ | 1,631,541 | ||||||
| Earning assets | 2,264,796 | 2,267,432 | 2,290,802 | 2,266,114 | 2,279,587 | |||||||||||
| Total assets | 2,469,417 | 2,471,939 | 2,489,213 | 2,470,678 | 2,478,742 | |||||||||||
| Deposits | 2,062,734 | 2,056,125 | 2,117,223 | 2,059,430 | 2,108,587 | |||||||||||
| Interest bearing liabilities | 1,848,146 | 1,867,324 | 1,926,411 | 1,857,735 | 1,920,990 | |||||||||||
| Shareholders' equity | 225,822 | 225,769 | 213,481 | 225,795 | 212,687 | |||||||||||
Performance ratios: | ||||||||||||||||
| Return on average assets | 1.26 | % | 1.18 | % | 1.14 | % | 1.22 | % | 1.14 | % | ||||||
| Return on average equity | 13.81 | 12.97 | 13.27 | 13.39 | 13.33 | |||||||||||
| Yield on average earning assets (tax equivalent) | 5.58 | 5.62 | 5.80 | 5.60 | 5.85 | |||||||||||
| Cost of interest bearing funds (tax equivalent) | 1.82 | 1.86 | 2.43 | 1.84 | 2.50 | |||||||||||
| Net interest margin (tax equivalent) | 4.09 | 4.09 | 3.75 | 4.09 | 3.75 | |||||||||||
| Efficiency ratio | 58.37 | 58.53 | 56.95 | 58.45 | 59.34 | |||||||||||
| Loan charge-offs | $ | (2,040 | ) | $ | (2,564 | ) | $ | (4,136 | ) | $ | (4,604 | ) | $ | (6,973 | ) | |
| Recoveries | 886 | 929 | 749 | 1,815 | 1,777 | |||||||||||
| Net charge-offs | $ | (1,154 | ) | $ | (1,635 | ) | $ | (3,387 | ) | $ | (2,789 | ) | $ | (5,196 | ) | |
Market Price: | ||||||||||||||||
| High | $ | 34.30 | $ | 33.00 | $ | 27.27 | $ | 34.30 | $ | 27.27 | ||||||
| Low | 28.42 | 27.68 | 22.96 | 27.68 | 22.46 | |||||||||||
| Close | 30.50 | 33.00 | 23.78 | 30.50 | 23.78 | |||||||||||
As of | As of | As of | |||||||||||||||
| 6/30/04 | 3/31/04 | 6/30/03 | |||||||||||||||
Assets: | |||||||||||||||||
| Loans, net of unearned | $ | 1,814,343 | $ | 1,770,332 | $ | 1,639,804 | |||||||||||
| Loan loss reserve | (25,782 | ) | (25,151 | ) | (23,206 | ) | |||||||||||
| Net loans | 1,788,561 | 1,745,181 | 1,616,598 | ||||||||||||||
| Loans held for sale | 2,500 | 680 | 8,503 | ||||||||||||||
| Securities AFS | 334,317 | 366,869 | 466,150 | ||||||||||||||
| Securities HTM | 72,420 | 78,890 | 112,870 | ||||||||||||||
| Other earning assets | 15,386 | 30,822 | 67,499 | ||||||||||||||
| Cash and due from banks | 72,774 | 82,510 | 83,471 | ||||||||||||||
| Premises and equipment | 50,698 | 50,108 | 49,498 | ||||||||||||||
| Goodwill and core deposit intangible | 63,661 | 63,806 | 64,241 | ||||||||||||||
| Other assets | 41,973 | 41,567 | 38,195 | ||||||||||||||
Total Assets | $ | 2,442,290 | $ | 2,460,433 | $ | 2,507,025 | |||||||||||
Liabilities and Equity: | |||||||||||||||||
| NOW accounts | $ | 13,837 | $ | 15,376 | $ | 15,538 | |||||||||||
| Savings deposits | 607,674 | 602,550 | 614,532 | ||||||||||||||
| CD's >=$100,000 | 347,184 | 345,967 | 361,301 | ||||||||||||||
| Other time deposits | 714,164 | 721,412 | 791,130 | ||||||||||||||
| Total interest bearing deposits | 1,682,859 | 1,685,305 | 1,782,501 | ||||||||||||||
| Noninterest bearing deposits | 368,298 | 370,298 | 347,570 | ||||||||||||||
| Total deposits | 2,051,157 | 2,055,603 | 2,130,071 | ||||||||||||||
| Repurchase agreements | 79,971 | 87,526 | 58,653 | ||||||||||||||
| Other interest bearing liabilities | 69,260 | 71,819 | 87,073 | ||||||||||||||
| Noninterest bearing liabilities | 16,271 | 19,577 | 18,170 | ||||||||||||||
| Total liabilities | 2,216,659 | 2,234,525 | 2,293,967 | ||||||||||||||
| Shareholders' equity | 225,631 | 225,908 | 213,058 | ||||||||||||||
Total Liabilities and Equity | $ | 2,442,290 | $ | 2,460,433 | $ | 2,507,025 | |||||||||||
| Ending shares outstanding | 13,447 | 13,438 | 13,417 | ||||||||||||||
| Memo: Market value of HTM Securities | $ | 70,411 | $ | 79,479 | $ | 114,046 | |||||||||||
| 90 days past due loans | $ | 6,433 | $ | 4,980 | $ | 5,164 | |||||||||||
| Nonaccrual loans | 11,982 | 11,423 | 17,434 | ||||||||||||||
| Restructured loans | 1,476 | 1,517 | 1,546 | ||||||||||||||
| Foreclosed properties | 6,223 | 6,814 | 3,521 | ||||||||||||||
| Tier 1 leverage ratio | 9.16 | % | 8.97 | % | 8.35 | % | |||||||||||
| Tier 1 risk based ratio | 11.80 | % | 11.63 | % | 11.06 | % | |||||||||||
| Total risk based ratio | 13.05 | % | 12.88 | % | 12.31 | % | |||||||||||
| FTE employees | 937 | 915 | 902 | ||||||||||||||
| Community Trust Bancorp, Inc. reported earnings for the three and six months ending June 30, 2004 and 2003 as follows: | |||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||
| June 30 | June 30 | ||||||||||||
| 2004 | 2003 | 2004 | 2003 | ||||||||||
(in thousands exceptper share information) | |||||||||||||
| Net income | $ | 7,756 | $ | 7,064 | $ | 15,036 | $ | 14,057 | |||||
| Basic earnings per share | $ | 0.58 | $ | 0.52 | $ | 1.12 | $ | 1.04 | |||||
| Diluted earnings per share | $ | 0.57 | $ | 0.52 | $ | 1.10 | $ | 1.03 | |||||
| Average shares outstanding | 13,447 | 13,478 | 13,457 | 13,507 | |||||||||
| Total assets (end of period) | $ | 2,442,290 | $ | 2,507,025 | |||||||||
| Return on average equity | 13.81 | % | 13.27 | % | 13.39 | % | 13.33 | % | |||||
| Return on average assets | 1.26 | % | 1.14 | % | 1.22 | % | 1.14 | % | |||||
| Provision for loan losses | $ | 1,785 | $ | 3,585 | $ | 3,918 | $ | 5,132 | |||||
| Gains on sales of loans | $ | 410 | $ | 1,595 | $ | 869 | $ | 3,116 | |||||