Exhibit 1
FOR IMMEDIATE RELEASE
July 13, 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 second quarter 2005 of $8.5 million or $0.57 per share.
Earnings Summary | ||||||||||
2Q 2005 | 1Q 2005 | 2Q 2004 | ||||||||
Net income (in thousands) | $ | 8,478 | $ | 7,961 | $ | 7,756 | ||||
Earnings per share (basic) | 0.57 | 0.54 | 0.52 | |||||||
Earnings per share (diluted) | 0.56 | 0.53 | 0.51 | |||||||
Return on average assets | 1.21 | % | 1.18 | % | 1.26 | % | ||||
Return on average equity | 13.96 | 13.50 | 13.81 | |||||||
Efficiency ratio | 57.86 | 59.13 | 58.37 | |||||||
Dividends declared per share | $ | 0.24 | $ | 0.24 | $ | 0.21 | ||||
Book value per share | 16.46 | 16.02 | 15.25 |
Community Trust Bancorp, Inc. (NASDAQ-CTBI) is reporting record earnings for the second quarter 2005 of $8.5 million or $0.57 per share compared to $7.8 million or $0.52 per share earned during the second quarter of 2004 and $8.0 million or $0.54 per share earned during the first quarter of 2005. Year-to-date earnings for the six months ended June 30, 2005 were $16.4 million or $1.11 per share compared to $15.0 million or $1.02 per share for the six months ended June 30, 2004.
Second Quarter and Year-to-Date Highlights
v | The Company's basic earnings per share of $0.57 for the second quarter 2005 reflects an increase of 9.6% over prior year. Year-to-date earnings per share increased 8.8% over prior year. |
v | The Company's net interest margin of 3.95% for the second quarter 2005 was a decrease of 2 basis points and 14 basis points, respectively, from prior quarter and prior year. |
v | Noninterest income for the second quarter 2005 was positively impacted by $0.6 million with the final valuation adjustment of loans obtained from the Hazard acquisition in 2001 to their net realizable value. Noninterest income for the quarter was negatively impacted by less income from gains on sales of residential real estate loans as customers continue to favor portfolio loan products. A charge of $0.1 million was taken to the valuation reserve for capitalized mortgage servicing rights due to the current interest rate environment. |
v | The Company experienced growth in its loan portfolio at a rate of 14.0% from June 30, 2004 and an annualized rate of 27.1% from the first quarter 2005. Total loan growth for the second quarter 2005 was $131.9 million including the $74.6 million obtained from the Danville acquisition. Total loans have grown $254.8 million from June 30, 2004. |
v | Total deposits including repurchase agreements grew by $66.2 million during the second quarter to $2.3 billion due to the Danville acquisition. Management began pricing deposits at the middle of the market during the second quarter to retain and grow deposits less aggressively. Total deposits have grown by 9.9% or $210.8 million from the $2.1 billion on June 30, 2004. Internal growth was 67.1% of the growth in deposits since June 30, 2004. Deposits totaling $69.4 million were obtained in the Danville acquisition. |
Return on average assets for the quarter ended June 30, 2005 was 1.21% compared to 1.26% for the second quarter 2004 and 1.18% for the first quarter 2005. Return on average assets for the first six months of 2005 was 1.20% compared to 1.22% for the first six months of 2004. Return on average shareholders’ equity for the quarter ended June 30, 2005 was 13.96% compared to 13.81% for the quarter ended June 30, 2004 and 13.50% for the quarter ended March 31, 2005. Return on average equity for the six months ended June 30, 2005 was 13.73% compared to 13.39% for the first six months of 2004. CTBI’s efficiency ratio for the six months ended June 30, 2005 was 58.48% compared 58.45% for the six months ended June 30, 2004.
Net Interest Income
Our net interest margin of 3.95% for the quarter ended June 30, 2005 was a 14 basis point decrease from the 4.09% for the quarter ended June 30, 2004 and a 2 basis point decrease from the quarter ended March 31, 2005. The decrease in the net interest margin was primarily attributable to our increased cost of funds from competitive pricing as $158.7 million of our $210.8 million growth in deposits and repurchase agreements from June 30, 2004 to June 30, 2005 was in interest bearing deposits.
Noninterest Income
Noninterest income of $8.5 million for the quarter ended June 30, 2005 was a 10.8% increase from the $7.7 million earned for the quarter ended March 31, 2005 and a
6.4% decrease from the quarter ended June 30, 2004. The following table displays the quarterly activity in the various significant noninterest income accounts.
Noninterest Income Summary | ||||||||||
(in thousands) | 2Q 2005 | 1Q 2005 | 2Q 2004 | |||||||
Deposit related fees | $ | 4,460 | $ | 4,047 | $ | 4,462 | ||||
Loan related fees | 1,292 | 1,218 | 1,349 | |||||||
Mortgage servicing rights | (94 | ) | 226 | 763 | ||||||
Trust revenue | 740 | 740 | 614 | |||||||
Gains on sales of loans | 347 | 305 | 410 | |||||||
Other revenue | 1,793 | 1,169 | 1,522 | |||||||
Total noninterest income | $ | 8,538 | $ | 7,705 | $ | 9,120 |
Noninterest income for the quarter ended June 30, 2005 was negatively impacted by a $0.1 million charge to our valuation reserve for capitalized mortgage servicing rights. Noninterest income for the second quarter 2004 and the first quarter 2005 was positively impacted by $0.8 million and $0.2 million pre-tax, respectively, because of the improvement in the fair market value of our capitalized mortgage servicing rights.
Noninterest Expense
Noninterest expense of $19.7 million was a 4.9% increase from the $18.8 million for the second quarter 2004 and a 2.5% increase from the first quarter 2005. The increase in noninterest expense is reflective of the additional operating expenses, primarily personnel, associated with the six new branches and loan production offices opened during the first quarter 2005 and the last six months of 2004. The impact to noninterest expense relative to the Danville acquisition was immaterial.
Balance Sheet Review
The Company's loan portfolio grew $254.8 million or 14.0% from prior year as growth occurred in all three major loan categories, commercial, residential real estate, and consumer loans. Loan growth excluding the Danville acquisition totaled approximately $180 million. Total deposits and repurchase agreements of $2.3 billion at June 30, 2005 represent an increase of 9.9% from June 30, 2004. Deposit growth excluding the Danville acquisition was approximately $142 million. The Company’s assets were $2.8 billion at June 30, 2005, an increase of 16.4% from prior year.
Shareholders’ equity of $245.0 million on June 30, 2005 was an 8.6% increase from the $225.6 million on June 30, 2004. The Company's annualized dividend yield to shareholders as of June 30, 2005 was 2.93%.
Asset Quality
Nonperforming loans increased to $21.4 million, or 1.0% of total loans, from the $19.9 million, or 1.1% of total loans, at June 30, 2004 and the $17.9 million, or 0.9% of total loans, at March 31, 2005. The increase in nonperforming loans is attributable to an increase in nonaccrual loans resulting primarily from a $1.9 million loan which is a workout and $1 million in various loans from the Danville acquisition. Specific reserves have been established for any potential losses. The Company does not believe that these customers are indicators of an overall weakness in a particular industry or economic sector.
Foreclosed properties on June 30, 2005 were $5.9 million, a decrease from the $6.2 million at June 30, 2004 but an increase from the $5.0 million reported at March 31, 2005. The increase in foreclosed properties during the second quarter is primarily attributable to a property obtained in the Danville acquisition which has been sold subsequent to quarter-end.
Net loan charge-offs for the quarter ended June 30, 2005 of $1.8 million, or 0.4% of average loans, increased from the $1.2 million, or 0.3% of average loans for the second quarter of 2004 and the $0.9 million, or 0.2% of average loans for the first quarter of 2005. Year-to-date 2005 net loan charge-offs are less than the same period 2004. Our reserve for losses on loans as a percentage of total loans outstanding at June 30, 2005 decreased to 1.41% from the 1.42% at June 30, 2004 and March 31, 2005.
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 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 $2.8 billion, is headquartered in Pikeville, Kentucky and has 74 banking locations across eastern, northern, central, and south central Kentucky, five banking locations in southern West Virginia, two loan production offices in Kentucky, and five trust offices across Kentucky.
Additional information follows.
Community Trust Bancorp, Inc. | ||||||||||||||||
Financial Summary (Unaudited) | ||||||||||||||||
June 30, 2005 | ||||||||||||||||
(in thousands except per share data) | ||||||||||||||||
Three | Three | Three | Six | Six | ||||||||||||
Months | Months | Months | Months | Months | ||||||||||||
Ended | Ended | Ended | Ended | Ended | ||||||||||||
6/30/2005 | 3/31/2005 | 6/30/2004 | 6/30/2005 | 6/30/2004 | ||||||||||||
Interest income | $ | 38,598 | $ | 36,498 | $ | 31,022 | $ | 75,096 | $ | 62,319 | ||||||
Interest expense | 13,509 | 12,119 | 8,368 | 25,628 | 16,984 | |||||||||||
Net interest income | 25,089 | 24,379 | 22,654 | 49,468 | 45,335 | |||||||||||
Loan loss provision | 1,700 | 1,367 | 1,785 | 3,067 | 3,918 | |||||||||||
Securities gains | 3 | - | - | 3 | 1 | |||||||||||
Gains on sales of loans | 347 | 305 | 410 | 652 | 869 | |||||||||||
Deposit service charges | 4,460 | 4,047 | 4,462 | 8,507 | 8,699 | |||||||||||
Trust revenue | 740 | 740 | 614 | 1,480 | 1,175 | |||||||||||
Insurance commissions | 120 | 97 | 79 | 217 | 144 | |||||||||||
Other noninterest income | 2,868 | 2,516 | 3,555 | 5,384 | 6,247 | |||||||||||
Total noninterest income | 8,538 | 7,705 | 9,120 | 16,243 | 17,135 | |||||||||||
Personnel expense | 10,613 | 10,261 | 10,015 | 20,874 | 19,706 | |||||||||||
Occupancy and equipment | 2,690 | 2,539 | 2,365 | 5,229 | 4,778 | |||||||||||
Amortization of core deposit intangible | 145 | 145 | 145 | 290 | 290 | |||||||||||
Other noninterest expense | 6,236 | 6,262 | 6,247 | 12,498 | 12,192 | |||||||||||
Total noninterest expense | 19,684 | 19,207 | 18,772 | 38,891 | 36,966 | |||||||||||
Net income before taxes | 12,243 | 11,510 | 11,217 | 23,753 | 21,586 | |||||||||||
Income taxes | 3,765 | 3,549 | 3,461 | 7,314 | 6,550 | |||||||||||
Net income | $ | 8,478 | $ | 7,961 | $ | 7,756 | $ | 16,439 | $ | 15,036 | ||||||
Memo: TEQ interest income | $ | 38,991 | $ | 36,895 | $ | 31,407 | $ | 75,886 | $ | 63,093 | ||||||
Average shares outstanding | 14,881 | 14,857 | 14,792 | 14,869 | 14,803 | |||||||||||
Basic earnings per share | $ | 0.57 | $ | 0.54 | $ | 0.52 | $ | 1.11 | $ | 1.02 | ||||||
Diluted earnings per share | $ | 0.56 | $ | 0.53 | $ | 0.51 | $ | 1.08 | $ | 1.00 | ||||||
Dividends per share | $ | 0.24 | $ | 0.24 | $ | 0.21 | $ | 0.48 | $ | 0.42 | ||||||
Average balances: | ||||||||||||||||
Loans, net of unearned income | $ | 1,982,353 | $ | 1,920,843 | $ | 1,791,776 | $ | 1,951,768 | $ | 1,768,384 | ||||||
Earning assets | 2,590,466 | 2,533,552 | 2,264,796 | 2,562,166 | 2,266,114 | |||||||||||
Total assets | 2,801,407 | 2,739,463 | 2,469,417 | 2,770,607 | 2,470,678 | |||||||||||
Deposits | 2,196,635 | 2,158,802 | 2,062,734 | 2,177,823 | 2,059,430 | |||||||||||
Interest bearing liabilities | 2,122,698 | 2,079,406 | 1,848,146 | 2,101,172 | 1,857,735 | |||||||||||
Shareholders' equity | 243,568 | 239,124 | 225,822 | 241,358 | 225,795 | |||||||||||
Performance ratios: | ||||||||||||||||
Return on average assets | 1.21 | % | 1.18 | % | 1.26 | % | 1.20 | % | 1.22 | % | ||||||
Return on average equity | 13.96 | % | 13.50 | % | 13.81 | % | 13.73 | % | 13.39 | % | ||||||
Yield on average earning assets (tax equivalent) | 6.04 | % | 5.91 | % | 5.58 | % | 5.97 | % | 5.60 | % | ||||||
Cost of interest bearing funds (tax equivalent) | 2.55 | % | 2.36 | % | 1.82 | % | 2.46 | % | 1.84 | % | ||||||
Net interest margin (tax equivalent) | 3.95 | % | 3.97 | % | 4.09 | % | 3.96 | % | 4.09 | % | ||||||
Efficiency ratio | 57.86 | % | 59.13 | % | 58.37 | % | 58.48 | % | 58.45 | % | ||||||
Loan charge-offs | $ | (2,607 | ) | $ | (1,952 | ) | $ | (2,040 | ) | $ | (4,558 | ) | $ | (4,604 | ) | |
Recoveries | 801 | 1,077 | 886 | 1,878 | 1,815 | |||||||||||
Net charge-offs | $ | (1,806 | ) | $ | (875 | ) | $ | (1,154 | ) | $ | (2,680 | ) | $ | (2,789 | ) | |
Market Price: | ||||||||||||||||
High | $ | 33.78 | $ | 32.90 | $ | 31.18 | $ | 33.78 | $ | 31.18 | ||||||
Low | 27.94 | 28.00 | 25.84 | $ | 27.94 | 25.16 | ||||||||||
Close | 32.72 | 28.81 | 27.73 | $ | 32.72 | 27.73 | ||||||||||
As of | As of | As of | ||||||||||||||
6/30/2005 | 3/31/2005 | 6/30/2004 | ||||||||||||||
Assets: | ||||||||||||||||
Loans, net of unearned | $ | 2,069,167 | $ | 1,937,285 | $ | 1,814,343 | ||||||||||
Loan loss reserve | (29,163 | ) | (27,509 | ) | (25,782 | ) | ||||||||||
Net loans | 2,040,004 | 1,909,776 | 1,788,561 | |||||||||||||
Loans held for sale | 110 | - | 2,500 | |||||||||||||
Securities AFS | 473,717 | 467,443 | 334,317 | |||||||||||||
Securities HTM | 55,829 | 59,752 | 72,420 | |||||||||||||
Other earning assets | 20,076 | 90,061 | 15,386 | |||||||||||||
Cash and due from banks | 82,979 | 79,627 | 72,774 | |||||||||||||
Premises and equipment | 57,400 | 52,559 | 50,698 | |||||||||||||
Goodwill and core deposit intangible | 66,976 | 63,226 | 63,661 | |||||||||||||
Other assets | 46,757 | 43,014 | 41,973 | |||||||||||||
Total Assets | $ | 2,843,848 | $ | 2,765,458 | $ | 2,442,290 | ||||||||||
Liabilities and Equity: | ||||||||||||||||
NOW accounts | $ | 15,472 | $ | 15,310 | $ | 13,837 | ||||||||||
Savings deposits | 594,819 | 601,424 | 607,674 | |||||||||||||
CD's >=$100,000 | 414,651 | 402,508 | 347,184 | |||||||||||||
Other time deposits | 781,993 | 743,077 | 714,164 | |||||||||||||
Total interest bearing deposits | 1,806,935 | 1,762,319 | 1,682,859 | |||||||||||||
Noninterest bearing deposits | 420,387 | 403,537 | 368,298 | |||||||||||||
Total deposits | 2,227,322 | 2,165,856 | 2,051,157 | |||||||||||||
Repurchase agreements | 114,576 | 109,807 | 79,971 | |||||||||||||
Other interest bearing liabilities | 236,007 | 231,710 | 69,260 | |||||||||||||
Noninterest bearing liabilities | 20,897 | 20,014 | 16,271 | |||||||||||||
Total liabilities | 2,598,802 | 2,527,387 | 2,216,659 | |||||||||||||
Shareholders' equity | 245,046 | 238,071 | 225,631 | |||||||||||||
Total Liabilities and Equity | $ | 2,843,848 | $ | 2,765,458 | $ | 2,442,290 | ||||||||||
Ending shares outstanding | 14,889 | 14,863 | 14,792 | |||||||||||||
Memo: Market value of HTM Securities | $ | 54,703 | $ | 58,379 | $ | 70,411 | ||||||||||
90 days past due loans | $ | 4,237 | $ | 3,870 | $ | 6,433 | ||||||||||
Nonaccrual loans | 16,312 | 13,101 | 11,982 | |||||||||||||
Restructured loans | 876 | 934 | 1,476 | |||||||||||||
Foreclosed properties | 5,945 | 5,049 | 6,223 | |||||||||||||
Tier 1 leverage ratio | 8.68 | % | 8.81 | % | 9.16 | % | ||||||||||
Tier 1 risk based ratio | 11.13 | % | 11.71 | % | 11.80 | % | ||||||||||
Total risk based ratio | 12.38 | % | 12.95 | % | 13.05 | % | ||||||||||
FTE employees | 986 | 967 | 937 | |||||||||||||
Community Trust Bancorp, Inc. reported earnings for the three and nine months ending June 30, 2005 and 2004 as follows: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(in thousands except per share information) | ||||||||||||||||
Net income | $ | 8,478 | $ | 7,756 | $ | 16,439 | $ | 15,036 | ||||||||
Basic earnings per share | $ | 0.57 | $ | 0.52 | $ | 1.11 | $ | 1.02 | ||||||||
Diluted earnings per share | $ | 0.56 | $ | 0.51 | $ | 1.08 | $ | 1.00 | ||||||||
Average shares outstanding | 14,881 | 14,792 | 14,869 | 14,803 | ||||||||||||
Total assets (end of period) | $ | 2,843,848 | $ | 2,442,290 | ||||||||||||
Return on average equity | 13.96 | % | 13.81 | % | 13.73 | % | 13.39 | % | ||||||||
Return on average assets | 1.21 | % | 1.26 | % | 1.20 | % | 1.22 | % | ||||||||
Provision for loan losses | $ | 1,700 | $ | 1,785 | $ | 3,067 | $ | 3,918 | ||||||||
Gains on sales of loans | $ | 347 | $ | 410 | $ | 652 | $ | 869 | ||||||||