Exhibit 1.
FOR IMMEDIATE RELEASE
October 18, 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 third quarter 2005 of $9.1 million or $0.61 per share.
Earnings Summary | ||||||||||
3Q 2005 | 2Q 2005 | 3Q 2004 | ||||||||
Net income (in thousands) | $ | 9,083 | $ | 8,478 | $ | 8,014 | ||||
Earnings per share (basic) | $ | 0.61 | $ | 0.57 | $ | 0.54 | ||||
Earnings per share (diluted) | $ | 0.60 | $ | 0.56 | $ | 0.53 | ||||
Return on average assets | 1.26 | % | 1.21 | % | 1.26 | % | ||||
Return on average equity | 14.50 | % | 13.96 | % | 13.83 | % | ||||
Efficiency ratio | 55.27 | % | 57.86 | % | 59.35 | % | ||||
Dividends declared per share | $ | 0.24 | $ | 0.24 | $ | 0.21 | ||||
Book value per share | $ | 16.77 | $ | 16.46 | $ | 15.73 |
Community Trust Bancorp, Inc. (NASDAQ-CTBI) is reporting record earnings for the third quarter 2005 of $9.1 million or $0.61 per share compared to $8.0 million or $0.54 per share earned during the third quarter of 2004 and $8.5 million or $0.57 per share earned during the second quarter of 2005. Year-to-date earnings for the nine months ended September 30, 2005 were $25.5 million or $1.71 per share compared to $23.1 million or $1.56 per share for the nine months ended September 30, 2004.
Third Quarter and Year-to-Date Highlights
v | The Company's basic earnings per share of $0.61 for the third quarter 2005 reflects an increase of 13.0% over prior year. Year-to-date earnings per share increased 9.6% over prior year. |
v | The Company's net interest margin of 4.08% for the third quarter 2005 was flat to prior year but an increase of 13 basis points from prior quarter. |
v | Deposit related fees for the third quarter 2005 increased 4.3% from prior quarter and 5.9% from the third quarter 2004. Loan related fees for the third quarter 2005 increased 5.5% from prior quarter and 9.0% from the third quarter 2004. |
v | The Company experienced growth in its loan portfolio, including the Danville acquisition, at a rate of 12.8% from September 30, 2004 and an annualized rate of 6.7% from the second quarter 2005. Total loan growth for the third quarter 2005 was $34.9 million. Total loans have grown $239.1 million from September 30, 2004, with $165.4 million being internal growth. |
v | Total deposits, including repurchase agreements, grew by $23.5 million during the third quarter to $2.4 billion. Total deposits have grown by 10.8% or $229.7 million, including the Danville acquisition, from the $2.1 billion on September 30, 2004, with $159.9 million being internal growth. |
Return on average assets for the quarter ended September 30, 2005 was 1.26% compared to 1.26% for the third quarter 2004 and 1.21% for the second quarter 2005. Return on average assets for the first nine months of 2005 was 1.22% compared to 1.24% for the first nine months of 2004. Return on average shareholders’ equity for the quarter ended September 30, 2005 was 14.50% compared to 13.83% for the quarter ended September 30, 2004 and 13.96% for the quarter ended June 30, 2005. Return on average equity for the nine months ended September 30, 2005 was 14.00% compared to 13.54% for the first nine months of 2004. CTBI’s efficiency ratio for the nine months ended September 30, 2005 was 57.36% compared to 58.75% for the nine months ended September 30, 2004.
Net Interest Income
Our net interest margin of 4.08% for the quarter ended September 30, 2005 was flat to the quarter ended September 30, 2004 but was a 13 basis point increase from 3.95% for the quarter ended June 30, 2005. The increase in the net interest margin was primarily attributable to our increased yield on interest earning assets from prior quarter.
Noninterest Income
Noninterest income of $8.7 million for the quarter ended September 30, 2005 was a 1.1% increase from the $8.6 million earned for the quarter ended September 30, 2004, and a 1.5% increase from the quarter ended June 30, 2005. The following table displays the quarterly activity in the various significant noninterest income accounts.
Noninterest Income Summary | ||||||||||
(in thousands) | 3Q 2005 | 2Q 2005 | 3Q 2004 | |||||||
Deposit related fees | $ | 4,723 | $ | 4,460 | $ | 4,525 | ||||
Loan related fees | 1,408 | 1,292 | 1,334 | |||||||
Mortgage servicing rights | 81 | (94 | ) | (200 | ) | |||||
Trust revenue | 750 | 740 | 638 | |||||||
Gains on sales of loans | 440 | 347 | 368 | |||||||
Securities gains | 0 | 3 | 588 | |||||||
Other revenue | 1,266 | 1,790 | 1,322 | |||||||
Total noninterest income | $ | 8,668 | $ | 8,538 | $ | 8,575 |
Noninterest income for the third quarter 2005 was positively impacted by increases in both deposit and loan related fees. Deposit related fees for the third quarter 2005 increased $0.2 million or 4.3% compared to prior year third quarter and $0.3 million or 5.9% compared to the second quarter 2005. Loan related fees for the third quarter 2005 increased $0.1 million or 5.5% compared to prior year third quarter and $0.1 million or 9.0% compared to the second quarter 2005. The increase in loan related fees primarily consisted of increases in consumer lending fees.
Noninterest income for the quarter ended September 30, 2005 was also positively impacted by $0.3 million compared to the third quarter 2004 and by $0.2 million compared to the second quarter 2005 because of the improvement in the fair value of our capitalized mortgage servicing rights.
Noninterest Expense
Noninterest expense of $19.8 million was a 4.6% increase from the $18.9 million for the third quarter 2004 and a 0.5% increase from the second quarter 2005. The increase in noninterest expense is reflective of the additional operating expenses, primarily personnel, associated with the three new branches and two new loan production offices which have been opened in the past 12 months, as well as the two recently acquired branches. Included in the three new branches is the Allen, Kentucky branch which opened on October 3, 2005.
Balance Sheet Review
The Company’s assets were $2.8 billion at September 30, 2005, an increase of 6.7% from prior year. Total assets decreased $10.8 million from June 30, 2005 as a result of the payment of $40 million in FHLB advances which matured in September. The Company's loan portfolio grew $239.1 million or 12.8% 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 which occurred in June 2005, totaled $165.4 million. Total deposits and repurchase agreements of $2.4 billion at September 30, 2005 represent an increase of 10.8% from September 30, 2004. Deposit growth excluding the Danville acquisition totaled $159.9 million.
Shareholders’ equity of $250.3 million on September 30, 2005 was a 7.5% increase from the $232.9 million on September 30, 2004. The Company's annualized dividend yield to shareholders as of September 30, 2005 was 2.98%.
Asset Quality
Nonperforming loans at September 30, 2005 were $21.8 million, or 1.0% of total loans, compared to $21.4 million, or 1.1% of total loans, at September 30, 2004 and $21.4 million, or 1.0% of total loans, at June 30, 2005. The increase in nonperforming loans was minimal with respect to the increase in the loan portfolio; therefore, the percentage of nonperforming loans to total loans decreased. The mix of nonperforming loans changed, however, as nonaccrual loans decreased $2.0 million from prior quarter and loans 90 days past due and still accruing interest increased $2.3 million from prior quarter. Loans past due 90 days or more must be well secured and in the process of collection to continue accruing interest.
Foreclosed properties on September 30, 2005 were $5.7 million, relatively flat to September 30, 2004, but a decrease from the $5.9 million at June 30, 2005.
Net loan charge-offs for the quarter ended September 30, 2005 of $1.9 million, or 0.4% of average loans, increased from the $1.3 million, or 0.3% of average loans for the third quarter of 2004 and the $1.8 million, or 0.4% of average loans for the second quarter of 2005. Year-to-date 2005 net loan charge-offs of $4.6 million, or 0.3% of average loans, was an increase from $4.1 million, or 0.3% of average loans, for the same period 2004. Our reserve for losses on loans as a percentage of total loans outstanding at September 30, 2005 was 1.41% compared to 1.41% at June 30, 2005 and 1.42% at September 30, 2004.
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 75 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) | ||||||||||||||||
September 30, 2005 | ||||||||||||||||
(in thousands except per share data) | ||||||||||||||||
Three | Three | Three | Nine | Nine | ||||||||||||
Months | Months | Months | Months | Months | ||||||||||||
Ended | Ended | Ended | Ended | Ended | ||||||||||||
9/30/2005 | 6/30/2005 | 9/30/2004 | 9/30/2005 | 9/30/2004 | ||||||||||||
Interest income | $ | 41,572 | $ | 38,598 | $ | 32,623 | $ | 116,668 | $ | 94,942 | ||||||
Interest expense | 14,825 | 13,509 | 9,138 | 40,453 | 26,122 | |||||||||||
Net interest income | 26,747 | 25,089 | 23,485 | 76,215 | 68,820 | |||||||||||
Loan loss provision | 2,470 | 1,700 | 2,045 | 5,537 | 5,963 | |||||||||||
Securities gains | - | 3 | 588 | 3 | 589 | |||||||||||
Gains on sales of loans | 440 | 347 | 368 | 1,092 | 1,237 | |||||||||||
Deposit service charges | 4,723 | 4,460 | 4,525 | 13,230 | 13,224 | |||||||||||
Trust revenue | 750 | 740 | 638 | 2,230 | 1,813 | |||||||||||
Insurance commissions | 112 | 120 | 118 | 329 | 262 | |||||||||||
Other noninterest income | 2,643 | 2,868 | 2,338 | 8,027 | 8,585 | |||||||||||
Total noninterest income | 8,668 | 8,538 | 8,575 | 24,911 | 25,710 | |||||||||||
Personnel expense | 10,816 | 10,613 | 9,959 | 31,690 | 29,665 | |||||||||||
Occupancy and equipment | 2,808 | 2,690 | 2,377 | 8,037 | 7,155 | |||||||||||
Amortization of core deposit intangible | 159 | 145 | 145 | 449 | 435 | |||||||||||
Other noninterest expense | 6,007 | 6,236 | 6,436 | 18,505 | 18,628 | |||||||||||
Total noninterest expense | 19,790 | 19,684 | 18,917 | 58,681 | 55,883 | |||||||||||
Net income before taxes | 13,155 | 12,243 | 11,098 | 36,908 | 32,684 | |||||||||||
Income taxes | 4,072 | 3,765 | 3,084 | 11,386 | 9,634 | |||||||||||
Net income | $ | 9,083 | $ | 8,478 | $ | 8,014 | $ | 25,522 | $ | 23,050 | ||||||
Memo: TEQ interest income | $ | 41,964 | $ | 38,991 | $ | 33,021 | $ | 117,850 | $ | 96,114 | ||||||
Average shares outstanding | 14,917 | 14,881 | 14,805 | 14,885 | 14,804 | |||||||||||
Basic earnings per share | $ | 0.61 | $ | 0.57 | $ | 0.54 | $ | 1.71 | $ | 1.56 | ||||||
Diluted earnings per share | $ | 0.60 | $ | 0.56 | $ | 0.53 | $ | 1.68 | $ | 1.53 | ||||||
Dividends per share | $ | 0.24 | $ | 0.24 | $ | 0.21 | $ | 0.72 | $ | 0.63 | ||||||
Average balances: | ||||||||||||||||
Loans, net of unearned income | $ | 2,085,841 | $ | 1,982,353 | $ | 1,842,208 | $ | 1,996,950 | $ | 1,793,171 | ||||||
Earning assets | 2,638,037 | 2,590,466 | 2,331,175 | 2,587,734 | 2,287,959 | |||||||||||
Total assets | 2,857,569 | 2,801,407 | 2,535,480 | 2,799,913 | 2,492,436 | |||||||||||
Deposits | 2,250,172 | 2,196,635 | 2,076,493 | 2,202,204 | 2,065,159 | |||||||||||
Interest bearing liabilities | 2,159,150 | 2,122,698 | 1,904,067 | 2,120,710 | 1,873,291 | |||||||||||
Shareholders' equity | 248,594 | 243,568 | 230,522 | 243,797 | 227,382 | |||||||||||
Performance ratios: | ||||||||||||||||
Return on average assets | 1.26 | % | 1.21 | % | 1.26 | % | 1.22 | % | 1.24 | % | ||||||
Return on average equity | 14.50 | % | 13.96 | % | 13.83 | % | 14.00 | % | 13.54 | % | ||||||
Yield on average earning assets (tax equivalent) | 6.31 | % | 6.04 | % | 5.64 | % | 6.09 | % | 5.61 | % | ||||||
Cost of interest bearing funds (tax equivalent) | 2.72 | % | 2.55 | % | 1.91 | % | 2.55 | % | 1.86 | % | ||||||
Net interest margin (tax equivalent) | 4.08 | % | 3.95 | % | 4.08 | % | 4.00 | % | 4.09 | % | ||||||
Efficiency ratio | 55.27 | % | 57.86 | % | 59.35 | % | 57.36 | % | 58.75 | % | ||||||
Loan charge-offs | $ | (2,593 | ) | $ | (2,607 | ) | $ | (2,145 | ) | $ | (7,151 | ) | $ | (6,749 | ) | |
Recoveries | 659 | 801 | 806 | 2,537 | 2,621 | |||||||||||
Net charge-offs | $ | (1,934 | ) | $ | (1,806 | ) | $ | (1,339 | ) | $ | (4,614 | ) | $ | (4,128 | ) | |
Market Price: | ||||||||||||||||
High | $ | 35.01 | $ | 33.78 | $ | 29.55 | $ | 35.01 | $ | 31.18 | ||||||
Low | 30.77 | 27.94 | 26.56 | $ | 27.94 | 25.16 | ||||||||||
Close | 32.18 | 32.72 | 28.26 | $ | 32.18 | 28.26 | ||||||||||
As of | As of | As of | ||||||||||||||
9/30/2005 | 6/30/2005 | 9/30/2004 | ||||||||||||||
Assets: | ||||||||||||||||
Loans, net of unearned | $ | 2,104,067 | $ | 2,069,167 | $ | 1,864,988 | ||||||||||
Loan loss reserve | (29,699 | ) | (29,163 | ) | (26,488 | ) | ||||||||||
Net loans | 2,074,368 | 2,040,004 | 1,838,500 | |||||||||||||
Loans held for sale | 745 | 110 | 532 | |||||||||||||
Securities AFS | 419,205 | 473,717 | 508,870 | |||||||||||||
Securities HTM | 50,957 | 55,829 | 64,809 | |||||||||||||
Other earning assets | 27,684 | 20,076 | 13,269 | |||||||||||||
Cash and due from banks | 82,982 | 82,979 | 71,058 | |||||||||||||
Premises and equipment | 57,585 | 57,400 | 51,711 | |||||||||||||
Goodwill and core deposit intangible | 68,398 | 66,976 | 63,516 | |||||||||||||
Other assets | 51,076 | 46,757 | 42,662 | |||||||||||||
Total Assets | $ | 2,833,000 | $ | 2,843,848 | $ | 2,654,927 | ||||||||||
Liabilities and Equity: | ||||||||||||||||
NOW accounts | $ | 14,590 | $ | 15,472 | $ | 15,606 | ||||||||||
Savings deposits | 611,217 | 594,819 | 589,916 | |||||||||||||
CD's >=$100,000 | 414,811 | 414,651 | 366,141 | |||||||||||||
Other time deposits | 770,233 | 781,993 | 714,268 | |||||||||||||
Total interest bearing deposits | 1,810,851 | 1,806,935 | 1,685,931 | |||||||||||||
Noninterest bearing deposits | 437,872 | 420,387 | 375,266 | |||||||||||||
Total deposits | 2,248,723 | 2,227,322 | 2,061,197 | |||||||||||||
Repurchase agreements | 116,628 | 114,576 | 74,447 | |||||||||||||
Other interest bearing liabilities | 193,429 | 236,007 | 266,410 | |||||||||||||
Noninterest bearing liabilities | 23,933 | 20,897 | 19,942 | |||||||||||||
Total liabilities | 2,582,713 | 2,598,802 | 2,421,996 | |||||||||||||
Shareholders' equity | 250,287 | 245,046 | 232,931 | |||||||||||||
Total Liabilities and Equity | $ | 2,833,000 | $ | 2,843,848 | $ | 2,654,927 | ||||||||||
Ending shares outstanding | 14,922 | 14,889 | 14,808 | |||||||||||||
Memo: Market value of HTM Securities | $ | 49,717 | $ | 54,703 | $ | 64,261 | ||||||||||
90 days past due loans | $ | 6,556 | $ | 4,237 | $ | 4,775 | ||||||||||
Nonaccrual loans | 14,314 | 16,312 | 15,613 | |||||||||||||
Restructured loans | 894 | 876 | 1,051 | |||||||||||||
Foreclosed properties | 5,674 | 5,945 | 5,702 | |||||||||||||
Tier 1 leverage ratio | 8.68 | % | 8.68 | % | 9.14 | % | ||||||||||
Tier 1 risk based ratio | 11.34 | % | 11.13 | % | 11.75 | % | ||||||||||
Total risk based ratio | 12.59 | % | 12.38 | % | 13.00 | % | ||||||||||
FTE employees | 988 | 986 | 939 | |||||||||||||
Community Trust Bancorp, Inc. reported earnings for the three and nine months ending September 30, 2005 and 2004 as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(in thousands except per share information) | ||||||||||||||||
Net income | $ | 9,083 | $ | 8,014 | $ | 25,522 | $ | 23,050 | ||||||||
Basic earnings per share | $ | 0.61 | $ | 0.54 | $ | 1.71 | $ | 1.56 | ||||||||
Diluted earnings per share | $ | 0.60 | $ | 0.53 | $ | 1.68 | $ | 1.53 | ||||||||
Average shares outstanding | 14,917 | 14,805 | 14,885 | 14,804 | ||||||||||||
Total assets (end of period) | $ | 2,833,000 | $ | 2,654,927 | ||||||||||||
Return on average equity | 14.50 | % | 13.83 | % | 14.00 | % | 13.54 | % | ||||||||
Return on average assets | 1.26 | % | 1.26 | % | 1.22 | % | 1.24 | % | ||||||||
Provision for loan losses | $ | 2,470 | $ | 2,045 | $ | 5,537 | $ | 5,963 | ||||||||
Gains on sales of loans | $ | 440 | $ | 368 | $ | 1,092 | $ | 1,237 |