Exhibit 99.1
FOR IMMEDIATE RELEASE
July 17, 2007
FOR ADDITIONAL INFORMATION PLEASE CONTACT JEAN R. HALE, CHAIRMAN, PRESIDENT, AND C.E.O., COMMUNITY TRUST BANCORP, INC. AT (606) 437-3294
Pikeville, Kentucky:
COMMUNITY TRUST BANCORP, INC. REPORTS EARNINGS FOR THE SECOND QUARTER 2007.
Earnings Summary | ||||||||||||||||||||
(in thousands except per share data) | 2Q 2007 | 1Q 2007 | 2Q 2006 | 6 Months 2007 | 6 Months 2006 | |||||||||||||||
Net income | $ | 8,858 | $ | 8,022 | $ | 9,892 | $ | 16,880 | $ | 19,660 | ||||||||||
Earnings per share | 0.58 | 0.53 | 0.66 | 1.11 | 1.31 | |||||||||||||||
Earnings per share (diluted) | 0.57 | 0.52 | 0.65 | 1.09 | 1.29 | |||||||||||||||
Return on average assets | 1.18 | % | 1.09 | % | 1.33 | % | 1.13 | % | 1.35 | % | ||||||||||
Return on average equity | 12.16 | 11.33 | 15.02 | 11.75 | 15.14 | |||||||||||||||
Efficiency ratio | 58.22 | 64.68 | 55.73 | 61.40 | 56.95 | |||||||||||||||
Dividends declared per share | $ | 0.27 | $ | 0.27 | $ | 0.26 | $ | 0.54 | $ | 0.52 | ||||||||||
Book value per share | 19.17 | 18.93 | 17.54 | 19.17 | 17.54 | |||||||||||||||
Weighted average shares | 15,216 | 15,191 | 15,051 | 15,203 | 15,031 | |||||||||||||||
Weighted average shares (diluted) | 15,448 | 15,437 | 15,274 | 15,421 | 15,246 |
Community Trust Bancorp, Inc. (NASDAQ-CTBI) reports earnings for the quarter ended June 30, 2007 of $8.9 million or $0.58 per basic share compared to $8.0 million or $0.53 per share earned during the quarter ended March 31, 2007 and $9.9 million or $0.66 per share earned during the second quarter of 2006. Earnings for the six months ended June 30, 2007 were $16.9 million or $1.11 per share compared to $19.7 million or $1.31 per share earned for the first six months of 2006.
Second Quarter 2007 Highlights
v | The Company's basic earnings per share for the second quarter 2007 increased 9.4% from prior quarter but decreased 12.1% from prior year second quarter. Year-to-date earnings per share have decreased 15.3% from the six months ended June 30, 2006. Both the prior quarter and YTD earnings comparisons are impacted by the one-time expense associated with the refinancing of the Company's trust preferred securities during the first quarter 2007. Core earnings for the quarter and YTD 2007 continue to reflect the pressure on the Company's net interest margin as deposits grew during the first six months of 2007 more quickly than the Company has been able to deploy them into higher yielding loans versus short-term investments. During 2006, the Company's loans repriced more quickly than its deposits resulting in a stronger net interest margin than the Company has experienced in 2007 as deposit repricing continued. |
v | The Company's net interest margin increased 2 basis points from prior quarter but has declined 17 basis points from prior year second quarter as the Company continues operating within the inverted yield curve environment. Our year-to-date net interest margin has declined 18 basis points from the first six months of 2006. Since deposit repricing has been through a 12-month cycle, management anticipates that the margin will continue to improve incrementally during the remainder of 2007 in the current stable rate environment. |
v | The Company's loan portfolio grew at an annualized rate of 8.0% during the quarter and 3.6% from June 30, 2006. |
v | Nonperforming loans as a percentage of total loans at June 30, 2007 were 1.08%, an increase of $6.0 million over prior quarter and a $6.9 million increase from same period prior year. The increase in nonperforming loans is primarily in smaller commercial loans with collateral. These loans are reviewed for impairment and specific reserves are established when appropriate. |
v | CTBI's year-to-date efficiency ratio improved during the second quarter 2007 and is anticipated to continue to improve for the remainder of 2007 as the first quarter was impacted by the one-time charge for the redemption and refinancing of the Company's trust preferred securities. |
Net Interest Income
Our net interest margin for the second quarter 2007 was 3.86% compared to 3.84% for the first quarter 2007, an improvement of 2 basis points, and a decline of 17 basis points compared to the 4.03% for the second quarter 2006. The year-to-date net interest margin decline was 18 basis points. As deposits have completed a 12-month repricing cycle, management anticipates incremental improvement in the net interest margin for the remainder of 2007 in the current stable rate environment.
Net interest income increased 2.8% from prior quarter but decreased 2.2% from prior year second quarter. Year-to-date net interest income has decreased 2.0% compared to the first six months of 2006. Average earning assets as a percentage of total assets of 92.8% for the quarter ended June 30, 2007 have remained relatively stable compared to prior quarter and prior year second quarter of 92.7% and 92.3%, respectively. Year-to-date average earning assets have increased 2.6% compared to the six months ended June 30, 2006.
Noninterest Income
Noninterest income for the second quarter 2007 was a 5.6% increase from the quarter ended March 31, 2007, primarily due to increased deposit service charges. Noninterest income increased 11.4% for the second quarter compared to same period prior year and 10.6% for the six months ended June 30, 2007 compared to the first six months of 2006. Year over year increases resulted primarily from increases in trust revenue and loan related fees.
Noninterest Expense
Noninterest expense for the quarter decreased 6.9% from prior quarter as a result of the first quarter charge from unamortized debt issuance costs with the redemption of trust preferred securities, but increased 5.4% over prior year second quarter. Noninterest expense for the six months ended June 30, 2007 increased 8.7% from the six months ended June 30, 2006, with increases in personnel, data processing expenses, and the nonrecurring redemption expense.
Balance Sheet Review
The Company’s total assets decreased $98.0 million or 3.2% from prior quarter, $59.5 million of which was the decrease in federal funds sold associated with the first quarter refinance of our trust preferred capital securities. However, total assets have increased $33.8 million or 1.1% year over year. Loans outstanding at June 30, 2007 were $2.2 billion reflecting a $43.6 million, annualized 8.0%, increase during the quarter, and a $76.2 million or 3.6% increase year over year. The Company's investment portfolio decreased $17.5 million, an annualized 13.8%, and $54.8 million or 10.1%, respectively, from prior quarter and prior year second quarter. Deposits, including repurchase agreements, declined $42.0 million, an annualized 6.6%, during the quarter as the Company focused on managing its deposit growth and pricing controls due to its liquidity position resulting from deposit growth during the first quarter. Deposits have increased 1.6% year over year.
Shareholders’ equity of $291.7 million on June 30, 2007 was an annualized increase of 5.4% from the $287.8 million on March 31, 2007 and a 10.2% increase from the $264.6 million on June 30, 2006. The Company's annualized dividend yield to shareholders as of June 30, 2007 was 3.34%.
Asset Quality
Nonperforming loans at June 30, 2007 were $23.9 million compared to $17.9 million at March 31, 2007 and $17.0 million at June 30, 2006. The increase in nonperforming loans was primarily smaller commercial loans with collateral that are individually reviewed with specific reserves established when appropriate.
Foreclosed properties at June 30, 2007 of $3.9 million were a $0.4 million increase from the $3.5 million on March 31, 2007 and a $1.1 million decrease from the $5.0 million on June 30, 2006.
Net loan charge-offs for the quarter of $1.2 million, or 0.23% of average loans annualized, was an increase from prior quarter's 0.17% of average loans annualized but a decrease from the 0.31% from prior year second quarter. Our reserve for losses on loans as a percentage of total loans outstanding at June 30, 2007 decreased to 1.25% from the 1.30% at June 30, 2006. The adequacy of our reserve for losses on loans is analyzed quarterly and adjusted as necessary.
Additional Information
Community Trust Bancorp, Inc. entered into an agreement and plan of merger with Eagle Fidelity, Inc. on May 31, 2007. On June 21, 2007, a third party made a tender offer with certain conditions to the shareholders of Eagle Fidelity, Inc. to purchase their stock for $45 cash per share. The outcome of this action is unknown at this time.
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 $3.0 billion, is headquartered in Pikeville, Kentucky and has 74 banking locations across eastern, northeast, central, and south central Kentucky, five banking locations in southern West Virginia, and five trust offices across Kentucky.
Additional information follows.
Community Trust Bancorp, Inc. | ||||||||||||||||||||
Financial Summary (Unaudited) | ||||||||||||||||||||
June 30, 2007 | ||||||||||||||||||||
(in thousands except per share data and # of employees) | ||||||||||||||||||||
Three Months | Three Months | Three Months | Six Months | Six Months | ||||||||||||||||
Ended | Ended | Ended | Ended | Ended | ||||||||||||||||
June 30, 2007 | March 31, 2007 | June 30, 2006 | June 30, 2007 | June 30, 2006 | ||||||||||||||||
Interest income | $ | 50,085 | $ | 49,179 | $ | 47,189 | $ | 99,264 | $ | 91,577 | ||||||||||
Interest expense | 23,474 | 23,289 | 19,983 | 46,763 | 38,014 | |||||||||||||||
Net interest income | 26,611 | 25,890 | 27,206 | 52,501 | 53,563 | |||||||||||||||
Loan loss provision | 1,846 | 470 | 1,350 | 2,316 | 1,350 | |||||||||||||||
Gains on sales of loans | 316 | 296 | 316 | 612 | 620 | |||||||||||||||
Deposit service charges | 5,330 | 4,804 | 5,309 | 10,134 | 9,861 | |||||||||||||||
Trust revenue | 1,180 | 1,199 | 861 | 2,379 | 1,742 | |||||||||||||||
Loan related fees | 867 | 1,021 | 488 | 1,888 | 1,112 | |||||||||||||||
Other noninterest income | 1,281 | 1,178 | 1,080 | 2,459 | 2,462 | |||||||||||||||
Total noninterest income | 8,974 | 8,498 | 8,054 | 17,472 | 15,797 | |||||||||||||||
Personnel expense | 11,100 | 11,114 | 10,823 | 22,214 | 21,788 | |||||||||||||||
Occupancy and equipment | 2,875 | 2,989 | 2,967 | 5,864 | 5,953 | |||||||||||||||
Amortization of core deposit intangible | 158 | 159 | 158 | 317 | 317 | |||||||||||||||
Other noninterest expense | 6,805 | 8,234 | 5,919 | 15,039 | 11,886 | |||||||||||||||
Total noninterest expense | 20,938 | 22,496 | 19,867 | 43,434 | 39,944 | |||||||||||||||
Net income before taxes | 12,801 | 11,422 | 14,043 | 24,223 | 28,066 | |||||||||||||||
Income taxes | 3,943 | 3,400 | 4,151 | 7,343 | 8,406 | |||||||||||||||
Net income | $ | 8,858 | $ | 8,022 | $ | 9,892 | $ | 16,880 | $ | 19,660 | ||||||||||
Memo: TEQ interest income | $ | 50,463 | $ | 49,571 | $ | 47,580 | $ | 100,034 | $ | 92,358 | ||||||||||
Average shares outstanding | 15,216 | 15,191 | 15,051 | 15,203 | 15,031 | |||||||||||||||
Basic earnings per share | $ | 0.58 | $ | 0.53 | $ | 0.66 | $ | 1.11 | $ | 1.31 | ||||||||||
Diluted earnings per share | $ | 0.57 | $ | 0.52 | $ | 0.65 | $ | 1.09 | $ | 1.29 | ||||||||||
Dividends per share | $ | 0.27 | $ | 0.27 | $ | 0.26 | $ | 0.54 | $ | 0.52 | ||||||||||
Average balances: | ||||||||||||||||||||
Loans, net of unearned income | $ | 2,199,233 | $ | 2,165,510 | $ | 2,124,485 | $ | 2,182,465 | $ | 2,110,740 | ||||||||||
Earning assets | 2,801,966 | 2,774,634 | 2,746,069 | 2,788,376 | 2,717,183 | |||||||||||||||
Total assets | 3,020,931 | 2,994,535 | 2,974,836 | 3,007,806 | 2,943,728 | |||||||||||||||
Deposits | 2,379,683 | 2,358,675 | 2,291,822 | 2,369,237 | 2,283,250 | |||||||||||||||
Interest bearing liabilities | 2,275,637 | 2,260,472 | 2,244,540 | 2,268,097 | 2,215,491 | |||||||||||||||
Shareholders' equity | 292,096 | 287,204 | 264,181 | 289,664 | 261,803 | |||||||||||||||
Performance ratios: | ||||||||||||||||||||
Return on average assets | 1.18 | % | 1.09 | % | 1.33 | % | 1.13 | % | 1.35 | % | ||||||||||
Return on average equity | 12.16 | % | 11.33 | % | 15.02 | % | 11.75 | % | 15.14 | % | ||||||||||
Yield on average earning assets (tax equivalent) | 7.22 | % | 7.25 | % | 6.95 | % | 7.23 | % | 6.85 | % | ||||||||||
Cost of interest bearing funds (tax equivalent) | 4.14 | % | 4.18 | % | 3.57 | % | 4.16 | % | 3.46 | % | ||||||||||
Net interest margin (tax equivalent) | 3.86 | % | 3.84 | % | 4.03 | % | 3.85 | % | 4.03 | % | ||||||||||
Efficiency ratio (tax equivalent) | 58.22 | % | 64.68 | % | 55.73 | % | 61.40 | % | 56.95 | % | ||||||||||
Loan charge-offs | $ | 1,843 | $ | 1,650 | $ | 2,555 | $ | 3,494 | $ | 4,916 | ||||||||||
Recoveries | (608 | ) | (731 | ) | (895 | ) | (1,340 | ) | (1,874 | ) | ||||||||||
Net charge-offs | $ | 1,235 | $ | 919 | $ | 1,660 | $ | 2,154 | $ | 3,042 | ||||||||||
Market Price: | ||||||||||||||||||||
High | $ | 37.98 | $ | 41.50 | $ | 35.50 | $ | 41.50 | $ | 35.90 | ||||||||||
Low | 31.40 | 33.87 | 31.50 | 31.40 | 30.60 | |||||||||||||||
Close | 32.30 | 36.23 | 34.93 | 32.30 | 34.93 |
Community Trust Bancorp, Inc. | ||||||||||||||||||||
Financial Summary (Unaudited) | ||||||||||||||||||||
June 30, 2007 | ||||||||||||||||||||
(in thousands except per share data and # of employees) |
As of | As of | As of | ||||||||||
June 30, 2007 | March 31, 2007 | June 30, 2006 | ||||||||||
Assets: | ||||||||||||
Loans, net of unearned | $ | 2,215,057 | $ | 2,171,484 | $ | 2,138,817 | ||||||
Loan loss reserve | (27,688 | ) | (27,077 | ) | (27,814 | ) | ||||||
Net loans | 2,187,369 | 2,144,407 | 2,111,003 | |||||||||
Loans held for sale | 3,899 | 893 | 2,140 | |||||||||
Securities AFS | 425,058 | 440,587 | 472,678 | |||||||||
Securities HTM | 36,689 | 38,655 | 44,550 | |||||||||
Other equity investments | 28,038 | 28,032 | 27,325 | |||||||||
Other earning assets | 69,072 | 195,968 | 51,226 | |||||||||
Cash and due from banks | 78,214 | 78,324 | 81,185 | |||||||||
Premises and equipment | 54,369 | 55,148 | 57,230 | |||||||||
Goodwill and core deposit intangible | 67,293 | 67,452 | 66,391 | |||||||||
Other assets | 50,829 | 49,320 | 53,324 | |||||||||
Total Assets | $ | 3,000,830 | $ | 3,098,786 | $ | 2,967,052 | ||||||
Liabilities and Equity: | ||||||||||||
NOW accounts | $ | 16,470 | $ | 14,910 | $ | 25,296 | ||||||
Savings deposits | 669,598 | 698,783 | 629,022 | |||||||||
CD's>=$100,000 | 445,725 | 447,914 | 412,700 | |||||||||
Other time deposits | 796,443 | 796,402 | 774,606 | |||||||||
Total interest bearing deposits | 1,928,236 | 1,958,009 | 1,841,624 | |||||||||
Noninterest bearing deposits | 436,702 | 435,023 | 448,842 | |||||||||
Total deposits | 2,364,938 | 2,393,032 | 2,290,466 | |||||||||
Repurchase agreements | 154,531 | 168,441 | 188,224 | |||||||||
Other interest bearing liabilities | 157,871 | 219,614 | 199,161 | |||||||||
Noninterest bearing liabilities | 31,833 | 29,901 | 24,641 | |||||||||
Total liabilities | 2,709,173 | 2,810,988 | 2,702,492 | |||||||||
Shareholders' equity | 291,657 | 287,798 | 264,560 | |||||||||
Total Liabilities and Equity | $ | 3,000,830 | $ | 3,098,786 | $ | 2,967,052 | ||||||
Ending shares outstanding | 15,217 | 15,203 | 15,083 | |||||||||
Memo: Market value of HTM securities | $ | 35,314 | $ | 37,371 | $ | 42,002 | ||||||
90 days past due loans | $ | 7,684 | $ | 4,270 | $ | 5,644 | ||||||
Nonaccrual loans | 16,159 | 13,605 | 10,697 | |||||||||
Restructured loans | 43 | 55 | 693 | |||||||||
Foreclosed properties | 3,898 | 3,514 | 5,000 | |||||||||
Tier 1 leverage ratio | 9.71 | % | 9.62 | % | 9.06 | % | ||||||
Tier 1 risk based ratio | 12.32 | % | 12.11 | % | 11.51 | % | ||||||
Total risk based ratio | 13.52 | % | 13.28 | % | 12.72 | % | ||||||
FTE employees | 1,012 | 1,014 | 1,019 |
Community Trust Bancorp, Inc. | ||||||||||||||||||||
Financial Summary (Unaudited) | ||||||||||||||||||||
June 30, 2007 | ||||||||||||||||||||
(in thousands except per share data and # of employees) |
Community Trust Bancorp, Inc. reported earnings for the three and six months ending June 30, 2007 and 2006 as follows: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net income | $ | 8,858 | $ | 9,892 | $ | 16,880 | $ | 19,660 | ||||||||
Basic earnings per share | $ | 0.58 | $ | 0.66 | $ | 1.11 | $ | 1.31 | ||||||||
Diluted earnings per share | $ | 0.57 | $ | 0.65 | $ | 1.09 | $ | 1.29 | ||||||||
Average shares outstanding | 15,216 | 15,051 | 15,203 | 15,031 | ||||||||||||
Total assets (end of period) | $ | 3,000,830 | $ | 2,967,052 | ||||||||||||
Return on average equity | 12.16 | % | 15.02 | % | 11.75 | % | 15.14 | % | ||||||||
Return on average assets | 1.18 | % | 1.33 | % | 1.13 | % | 1.35 | % | ||||||||
Provision for loan losses | $ | 1,846 | $ | 1,350 | $ | 2,316 | $ | 1,350 | ||||||||
Gains on sales of loans | $ | 316 | $ | 316 | $ | 612 | $ | 620 |