Exhibit 1.
Community Trust Bancorp, Inc. (NASDAQ-CTBI) is pleased to report earnings for the fourth quarter 2004 of $7.9 million or $0.53 per share compared to $7.6 million or $0.51 per share earned during the fourth quarter of 2003 and $8.0 million or $0.54 per share earned during the third quarter of 2004. Earnings for the year ended December 31, 2004 were $31.0 million or $2.09 per share compared to $28.9 million or $1.95 per share earned during 2003. All per share data has been restated to reflect the 10% stock dividend distributed on December 15, 2004.
Noninterest Expense
FOR IMMEDIATE RELEASE
January 19, 2005
FOR ADDITIONAL INFORMATION PLEASE CONTACT JEAN R. HALE, CHAIRMAN, PRESIDENT, AND C.E.O., COMMUNITY TRUST BANCORP, INC. AT (606) 437-3294
Community Trust Bancorp, Inc. reports record earnings for the year 2004.
Earnings Summary | |||||||||||||||
4Q 2004 | 3Q 2004 | 4Q 2003 | 12 Months 2004 | 12 Months 2003 | |||||||||||
Net income(in thousands) | $ | 7,900 | $ | 8,014 | $ | 7,553 | $ | 30,950 | $ | 28,891 | |||||
Earnings per share | $ | 0.53 | $ | 0.54 | $ | 0.51 | $ | 2.09 | $ | 1.95 | |||||
Earnings per share (diluted) | $ | 0.52 | $ | 0.53 | $ | 0.50 | $ | 2.05 | $ | 1.93 | |||||
Return on average assets | 1.17% | 1.26% | 1.20% | 1.22% | 1.16% | ||||||||||
Return on average equity | 13.31% | 13.83% | 13.61% | 13.48% | 13.43% | ||||||||||
Efficiency ratio | 56.79% | 59.35% | 59.18% | 58.25% | 59.17% | ||||||||||
Dividends declared per share | $ | 0.24 | $ | 0.21 | $ | 0.21 | $ | 0.87 | $ | 0.75 | |||||
Book value per share | $ | 15.91 | $ | 15.73 | $ | 14.95 | $ | 15.91 | $ | 14.95 |
Community Trust Bancorp, Inc. (NASDAQ-CTBI) is pleased to report earnings for the fourth quarter 2004 of $7.9 million or $0.53 per share compared to $7.6 million or $0.51 per share earned during the fourth quarter of 2003 and $8.0 million or $0.54 per share earned during the third quarter of 2004. Earnings for the year ended December 31, 2004 were $31.0 million or $2.09 per share compared to $28.9 million or $1.95 per share earned during 2003. All per share data has been restated to reflect the 10% stock dividend distributed on December 15, 2004.
Fourth Quarter and Year-to-Date Highlights
v | The Company's basic earnings per share for the fourth quarter 2004 reflects an increase of 3.9% over the fourth quarter 2003. Year-to-date earnings per share increased 7.2% over prior year. |
v | The Company's net interest margin for the fourth quarter 2004 of 3.97% improved 4 basis points from the fourth quarter 2003 but decreased 11 basis points from prior quarter. |
v | The Company’s earning assets grew $244.2 million during the year with $47.0 million in growth occurring during the fourth quarter of 2004. |
v | The Company experienced growth in its loan portfolio at a rate of 9.6% from December 31, 2003. |
v | Asset quality improved during the fourth quarter with nonperforming loans decreasing to $20.1 million at December 31, 2004, a 6.2% decrease from the $21.4 million on September 30, 2004. However, nonperforming loans at December 31, 2004 were a 19.0% increase from December 31, 2003. |
v | Return on average assets for the year ended December 31, 2004 of 1.22% was a 5.2% increase from the December 31, 2003 return of 1.16%. Return on average assets for the fourth quarter 2004 of 1.17% was a decrease from the 1.20% and 1.26% returns for the fourth quarter 2003 and the third quarter 2004, respectively. As was anticipated, a $200 million transaction completed in August 2004, which increased our investment portfolio with funds borrowed from the Federal Home Loan Bank, has been accretive to earnings but has resulted in a lower net interest margin and return on average assets. |
v | Our return on average shareholders' equity for the year ended December 31, 2004 of 13.48% increased 5 basis points from year-end 2003. However, the return on average equity for the quarter ended December 31, 2004 of 13.31% was lower than the returns for the third quarter 2004 and the fourth quarter 2003 by 52 basis points and 30 basis points, respectively. |
v | CTBI's efficiency ratio for the three months ended December 31, 2004 improved to 56.79% from the 59.18% for the three months ended December 31, 2003 and the 59.35% for the three months ended September 30, 2004. The efficiency ratio for the year ended December 31, 2004 improved almost 100 basis points to 58.25% from the 59.17% for the year ended December 31, 2003. |
Balance Sheet Review
The Company’s earning assets grew $244.2 million during the year 2004; $47.0 million of the annual growth occurred during the fourth quarter. The investment portfolio grew $77.9 million during the year with $9.5 million of the growth occurring during the fourth quarter. The year-to-date growth in the investment portfolio was primarily the result of the transaction in August 2004 described above. The Company's loan portfolio grew $166.3 million during the year, $37.5 million of which occurred during the fourth quarter. Loan growth has occurred in all three major loan categories, commercial, residential real estate, and consumer loans. Total deposits and repurchase agreements of $2.2 billion at December 31, 2004 experienced growth of 4.4% over prior quarter and 3.0% from prior year-end.
Shareholders’ equity of $236.2 million on December 31, 2004 was a 6.7% increase from the $221.4 million on December 31, 2003 and an increase of 1.4% from the $232.9 million on September 30, 2004. The Company's annualized dividend yield to shareholders as of December 31, 2004 was 2.97%.
Asset Quality
Nonperforming loans at December 31, 2004 of $20.1 million, or 1.1% of total loans, is a decrease from the $21.4 million at September 30, 2004, but an increase from the $16.9 million, or 1.0% of total loans, at December 31, 2003.
The Company's continued focus on liquidation of foreclosed properties has resulted in the decrease of foreclosed properties to $4.8 million on December 31, 2004 from the $6.6 million reported at December 31, 2003 and the $5.7 million at September 30, 2004.
Year-to-date net loan charge-offs at December 31, 2004 decreased 21.0% to $6.3 million, or 0.5% of average loans, from the $8.0 million, or 0.6% of average loans, at December 31, 2003. However, net loan charge-offs for the quarter ended December 31, 2004 increased to $2.2 million from the $1.3 million for both the fourth quarter of 2003 and the third quarter of 2004. Our reserve for losses on loans as a percentage of total loans outstanding at December 31, 2004 remained flat to December 31, 2003 and September 30, 2004 at 1.42%.
Net Interest Income
Our net interest margin of 3.97% for the quarter ended December 31, 2004 is a 4 basis point increase from the quarter ended December 31, 2003 but a decrease of 11 basis points from prior quarter. Our year-to-date net interest margin increased 29 basis points from 3.76% to 4.05%. The quarter over quarter decline in margin was primarily attributable to the investment portfolio transaction in August 2004 described above. Management expects that, as interest rates continue to rise, the Company will benefit in the short term as its variable rate commercial loan portfolio reprices at a more rapid pace than its liabilities but that, by the end of a twelve-month cycle, the margin will be slightly compressed as the repricing of liabilities occurs.
Noninterest Income
Noninterest income increased less than 1% for the quarter ended December 31, 2004 compared to the quarter ended December 31, 2003 but decreased 4.3% compared to the quarter ended September 30, 2004. Year-to-date noninterest income decreased 6.7% from prior year. The following table displays the quarterly and year-to-date activity in the various significant noninterest income accounts.
Noninterest Income Summary | ||||||||||
(in thousands) | 4Q 2004 | 3Q 2004 | 4Q 2003 | 12 Months 2004 | 12 Months 2003 | |||||
Deposit related fees | $ | 4,434 | $ | 4,525 | $ | 4,412 | $ | 17,658 | $ | 17,057 |
Loan related fees | 1,377 | 1,334 | 1,203 | 5,203 | 4,644 | |||||
Mortgage servicing rights | 83 | (200) | (660) | 46 | (1,269) | |||||
Loan valuation adjustments* | 47 | 46 | 348 | 1,384 | 348 | |||||
Trust revenue | 643 | 638 | 606 | 2,456 | 2,457 | |||||
Gains on sales of loans | 382 | 368 | 964 | 1,619 | 5,693 | |||||
Securities gains | 50 | 588 | 0 | 639 | 3,042 | |||||
Other revenue | 1,191 | 1,276 | 1,275 | 4,912 | 4,400 | |||||
Total noninterest income | $ | 8,207 | $ | 8,575 | $ | 8,148 | $ | 33,917 | $ | 36,372 |
*Loan valuation adjustments consist of the adjustments to their net realizable value of loans obtained through acquisitions.
Noninterest Expense
Noninterest expense for the quarter ended December 31, 2004 of $18.7 million was a 2.5% increase from the $18.2 million for the fourth quarter 2003 but a 1.1% decrease from the third quarter 2004. Year-to-date non-interest expense increased 5.5% to $74.6 million from the $70.7 million for the year ended December 31, 2003. The increase in noninterest expense from prior year 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 $2.3 million. No incentive accrual was booked in 2003.
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, t he performance of coal and coal related industries, prevailing inflation and interest rates, realized gains from sales of investments, gains from asset sales, and losses on commercial lending activities; results of various investment activities; the effects of competitors’ pricing policies, 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 Reserve 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 $2.7 billion, is headquartered in Pikeville, Kentucky and has 71 banking locations across eastern, northern, central, and south central Kentucky, 5 banking locations in southern West Virginia, 2 Loan Production Offices in Kentucky and 5 trust offices across Kentucky.
Additional information follows.
Community Trust Bancorp, Inc. | ||||||||||||||||
Financial Summary (Unaudited) | ||||||||||||||||
December 31, 2004 | ||||||||||||||||
(in thousands except per share data) | ||||||||||||||||
Three | Three | Three | Twelve | Twelve | ||||||||||||
Months | Months | Months | Months | Months | ||||||||||||
Ended | Ended | Ended | Ended | Ended | ||||||||||||
12/31/04 | 9/30/04 | 12/31/03 | 12/31/04 | 12/31/03 | ||||||||||||
Interest income | $ | 35,459 | $ | 32,623 | $ | 31,739 | $ | 130,401 | $ | 128,514 | ||||||
Interest expense | 11,067 | 9,138 | 9,442 | 37,189 | 43,895 | |||||||||||
Net interest income | 24,392 | 23,485 | 22,297 | 93,212 | 84,619 | |||||||||||
Loan loss provision | 2,685 | 2,045 | 2,115 | 8,648 | 9,332 | |||||||||||
Securities gains | 50 | 588 | - | 639 | 3,042 | |||||||||||
Gains on sales of loans | 382 | 368 | 964 | 1,619 | 5,693 | |||||||||||
Deposit service charges | 4,434 | 4,525 | 4,412 | 17,658 | 17,057 | |||||||||||
Trust revenue | 643 | 638 | 606 | 2,456 | 2,457 | |||||||||||
Insurance commissions | 105 | 118 | 213 | 367 | 710 | |||||||||||
Other noninterest income | 2,593 | 2,338 | 1,953 | 11,178 | 7,413 | |||||||||||
Total noninterest income | 8,207 | 8,575 | 8,148 | 33,917 | 36,372 | |||||||||||
Personnel expense | 9,836 | 9,959 | 8,989 | 39,501 | 34,593 | |||||||||||
Occupancy and equipment | 2,329 | 2,377 | 2,416 | 9,484 | 9,507 | |||||||||||
Amortization of core deposit intangible | 145 | 145 | 145 | 580 | 580 | |||||||||||
Other noninterest expense | 6,402 | 6,436 | 6,699 | 25,030 | 26,055 | |||||||||||
Total noninterest expense | 18,712 | 18,917 | 18,249 | 74,595 | 70,735 | |||||||||||
Net income before taxes | 11,202 | 11,098 | 10,081 | 43,886 | 40,924 | |||||||||||
Income taxes | 3,302 | 3,084 | 2,528 | 12,936 | 12,033 | |||||||||||
Net income | $ | 7,900 | $ | 8,014 | $ | 7,553 | $ | 30,950 | $ | 28,891 | ||||||
Memo: TEQ interest income | $ | 35,861 | $ | 33,021 | $ | 32,131 | $ | 131,975 | $ | 130,109 | ||||||
Average shares outstanding | 14,835 | 14,805 | 14,798 | 14,811 | 14,821 | |||||||||||
Basic earnings per share | $ | 0.53 | $ | 0.54 | $ | 0.51 | $ | 2.09 | $ | 1.95 | ||||||
Diluted earnings per share | $ | 0.52 | $ | 0.53 | $ | 0.50 | $ | 2.05 | $ | 1.93 | ||||||
Dividends per share | $ | 0.24 | $ | 0.21 | $ | 0.21 | $ | 0.87 | $ | 0.75 | ||||||
Average balances: | ||||||||||||||||
Loans, net of unearned income | $ | 1,884,571 | $ | 1,842,208 | $ | 1,709,394 | $ | 1,816,146 | $ | 1,658,289 | ||||||
Earning assets | 2,485,203 | 2,331,175 | 2,292,814 | 2,337,540 | 2,292,251 | |||||||||||
Total assets | 2,694,673 | 2,535,480 | 2,496,483 | 2,543,272 | 2,492,286 | |||||||||||
Deposits | 2,118,994 | 2,076,493 | 2,090,893 | 2,078,691 | 2,109,752 | |||||||||||
Interest bearing liabilities | 2,044,600 | 1,904,067 | 1,900,093 | 1,916,353 | 1,918,802 | |||||||||||
Shareholders' equity | 236,050 | 230,522 | 220,189 | 229,561 | 215,086 | |||||||||||
Performance ratios: | ||||||||||||||||
Return on average assets | 1.17 | % | 1.26 | % | 1.20 | % | 1.22 | % | 1.16 | % | ||||||
Return on average equity | 13.31 | % | 13.83 | % | 13.61 | % | 13.48 | % | 13.43 | % | ||||||
Yield on average earning assets (tax equivalent) | 5.74 | % | 5.64 | % | 5.56 | % | 5.65 | % | 5.68 | % | ||||||
Cost of interest bearing funds (tax equivalent) | 2.15 | % | 1.91 | % | 1.97 | % | 1.94 | % | 2.29 | % | ||||||
Net interest margin (tax equivalent) | 3.97 | % | 4.08 | % | 3.93 | % | 4.05 | % | 3.76 | % | ||||||
Efficiency ratio | 56.79 | % | 59.35 | % | 59.18 | % | 58.25 | % | 59.17 | % | ||||||
Loan charge-offs | $ | (2,839 | ) | $ | (2,145 | ) | $ | (2,247 | ) | $ | (9,588 | ) | $ | (11,704 | ) | |
Recoveries | 683 | 806 | 969 | 3,304 | 3,754 | |||||||||||
Net charge-offs | $ | (2,156 | ) | $ | (1,339 | ) | $ | (1,278 | ) | $ | (6,284 | ) | $ | (7,950 | ) | |
Market Price: | ||||||||||||||||
High | $ | 34.48 | $ | 29.55 | $ | 30.66 | $ | 34.48 | $ | 30.66 | ||||||
Low | 28.18 | 26.56 | 23.18 | $ | 25.16 | 20.41 | ||||||||||
Close | 32.36 | 28.26 | 27.46 | $ | 32.36 | 27.46 |
As of | As of | As of | ||||||||||||||
12/31/04 | 9/30/04 | 12/31/03 | ||||||||||||||
Assets: | ||||||||||||||||
Loans, net of unearned | $ | 1,902,519 | $ | 1,864,988 | $ | 1,736,260 | ||||||||||
Loan loss reserve | (27,017 | ) | (26,488 | ) | (24,653 | ) | ||||||||||
Net loans | 1,875,502 | 1,838,500 | 1,711,607 | |||||||||||||
Loans held for sale | - | 532 | 315 | |||||||||||||
Securities AFS | 482,280 | 508,870 | 421,855 | |||||||||||||
Securities HTM | 62,671 | 64,809 | 87,497 | |||||||||||||
Other earning assets | 51,982 | 13,269 | 9,340 | |||||||||||||
Cash and due from banks | 77,598 | 71,058 | 79,621 | |||||||||||||
Premises and equipment | 53,111 | 51,711 | 49,990 | |||||||||||||
Goodwill and core deposit intangible | 63,371 | 63,516 | 63,951 | |||||||||||||
Other assets | 42,579 | 42,662 | 49,863 | |||||||||||||
Total Assets | $ | 2,709,094 | $ | 2,654,927 | $ | 2,474,039 | ||||||||||
�� | ||||||||||||||||
Liabilities and Equity: | ||||||||||||||||
NOW accounts | $ | 15,101 | $ | 15,606 | $ | 16,578 | ||||||||||
Savings deposits | 602,484 | 589,916 | 597,971 | |||||||||||||
CD's >=$100,000 | 389,011 | 366,141 | 357,573 | |||||||||||||
Other time deposits | 730,030 | 714,268 | 736,090 | |||||||||||||
Total interest bearing deposits | 1,736,626 | 1,685,931 | 1,708,212 | |||||||||||||
Noninterest bearing deposits | 403,792 | 375,266 | 359,403 | |||||||||||||
Total deposits | 2,140,418 | 2,061,197 | 2,067,615 | |||||||||||||
Repurchase agreements | 88,404 | 74,447 | 96,507 | |||||||||||||
Other interest bearing liabilities | 226,131 | 266,410 | 71,478 | |||||||||||||
Noninterest bearing liabilities | 17,972 | 19,942 | 17,046 | |||||||||||||
Total liabilities | 2,472,925 | 2,421,996 | 2,252,646 | |||||||||||||
Shareholders' equity | 236,169 | 232,931 | 221,393 | |||||||||||||
Total Liabilities and Equity | $ | 2,709,094 | $ | 2,654,927 | $ | 2,474,039 | ||||||||||
Ending shares outstanding | 14,845 | 14,808 | 14,808 | |||||||||||||
Memo: Market value of HTM Securities | $ | 61,947 | $ | 64,261 | $ | 87,061 | ||||||||||
90 days past due loans | $ | 5,319 | $ | 4,775 | $ | 5,463 | ||||||||||
Nonaccrual loans | 13,808 | 15,613 | 9,705 | |||||||||||||
Restructured loans | 974 | 1,051 | 1,726 | |||||||||||||
Foreclosed properties | 4,756 | 5,702 | 6,566 | |||||||||||||
Tier 1 leverage ratio | 8.78 | % | 9.14 | % | 8.73 | % | ||||||||||
Tier 1 risk based ratio | 11.82 | % | 11.75 | % | 11.35 | % | ||||||||||
Total risk based ratio | 13.07 | % | 13.00 | % | 12.60 | % | ||||||||||
FTE employees | 954 | 939 | 901 |
Community Trust Bancorp, Inc. reported earnings for the three and nine months ending December 31, 2004 and 2003 as follows: | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31 | December 31 | |||||||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||||||
(in thousands except per share information) | ||||||||||||||||
Net income | $ | 7,900 | $ | 7,553 | $ | 30,950 | $ | 28,891 | ||||||||
Basic earnings per share | $ | 0.53 | $ | 0.51 | $ | 2.09 | $ | 1.95 | ||||||||
Diluted earnings per share | $ | 0.52 | $ | 0.50 | $ | 2.05 | $ | 1.93 | ||||||||
Average shares outstanding | 14,835 | 14,798 | 14,811 | 14,821 | ||||||||||||
Total assets (end of period) | $ | 2,709,094 | $ | 2,474,039 | ||||||||||||
Return on average equity | 13.31 | % | 13.61 | % | 13.48 | % | 13.43 | % | ||||||||
Return on average assets | 1.17 | % | 1.20 | % | 1.22 | % | 1.16 | % | ||||||||
Provision for loan losses | $ | 2,685 | $ | 2,115 | $ | 8,648 | $ | 9,332 | ||||||||
Gains on sales of loans | $ | 382 | $ | 964 | $ | 1,619 | $ | 5,693 |