EX-1 4 er0304.htm FIRST QTR 04 EARNINGS RELEASE First Qtr 04 Earnings Release
Exhibit 1.

FOR IMMEDIATE RELEASE
April 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 earnings for the first quarter 2004 of $7.3 million or $0.54 per share.

Earnings Summary
 
 
 
 
 
  
1Q
2004
4Q
2003
1Q
2003
   
Net income (in thousands)
 
$
7,280
 
$
7,553
 
$
6,993
 
Earnings per share
   
0.54
   
0.56
   
0.52
 
Earnings per share (diluted)
   
0.53
   
0.55
   
0.51
 
 
    
 
    
 
    
 
  
Return on average assets
   
1.18
%
 
1.20
%
 
1.15
%
Return on average equity
   
12.97
   
13.61
   
13.38
 
Efficiency ratio
   
58.53
   
59.18
   
61.81
 
 
    
 
    
 
    
 
  
Dividends declared per share
 
$
0.23
 
$
0.23
 
$
0.19
 
Book value per share
   
16.81
   
16.45
   
15.63
 
       

    Community Trust Bancorp, Inc. (NASDAQ-CTBI) is reporting first quarter 2004 earnings of $7.3 million or $0.54 per share compared to $7.0 million or $0.52 per share earned during the first quarter of 2003 and $7.6 million or $0.56 per share earned during the fourth quarter of 2003. First quarter 2003 earnings included $0.05 per share due to gains on the sale of securities.

First Quarter Highlights

v The Company's basic earnings per share of $0.54 for the first quarter 2004 reflects an increase of 3.8% over prior year.

v The Company's net interest margin improved 35 basis points from prior year and 16 basis points from prior quarter.

v Noninterest income was negatively impacted by a charge to our valuation reserve for capitalized mortgage servicing rights of $0.6 million for the quarter ended March 31, 2004

v The Company experienced growth in its loan portfolio at an annualized rate of 8.9% from prior year and 7.9% from the fourth quarter 2003.

v Asset quality improved for the Company from prior year with nonperforming loans decreasing to $17.9 million, a 29.9% decrease from the $25.6 million of March 31, 2003.

    Return on average assets for the quarter ended March 31, 2004 was 1.18% compared to 1.15% for the first quarter 2003 and 1.20% for the fourth quarter 2003. Return on average shareholders’ equity for the quarter ended March 31, 2004 was 12.97% compared to 13.38% for the quarter ended March 31, 2003 and 13.61% for the quarter ended December 31, 2003. CTBI’s efficiency ratio for the quarter ended March 31, 2004 improved to 58.53% from 61.81% for the quarter ended March 31, 2003 and 59.18% for the quarter ended December 31, 2003.

Net Interest Income

    Our net interest margin of 4.09% for the quarter ended March 31, 2004 is a 35 basis point increase from the 3.74% for the quarter ended March 31, 2003 and a 16 basis point increase from the 3.93% for the quarter ended December 31, 2003. Management expects its net interest margin to stabilize as loan growth and the reallocation of earning assets from the investment portfolio to the higher yielding loan portfolio continue.

Noninterest Income

    Noninterest income decreased 6.2% for the quarter ended March 31, 2004 compared to March 31, 2003 and 1.6% compared to December 31, 2003. Noninterest income for the quarter ended March 31, 2003 included approximately $1.0 million in securities gains. Also, as residential mortgage refinancing slowed, the Company had a decrease in gains on sales of loans of $1.1 million from prior year and $0.5 million from prior quarter. Noninterest income was also negatively impacted by a charge to our valuation reserve for capitalized mortgage servicing rights of $0.6 million for the quarter ended March 31, 2004 compared to $0.4 million for the quarter ended March 31, 2003. Increases in deposit service charges of $0.4 million and other noninterest income of $1.2 million offset part of the decrease from prior year. Other noninterest income includes $0.8 million 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 value.
 
Noninterest Expense
 
    Noninterest expense of $18.2 million increased 3.3% from the $17.6 million for the first quarter 2003 and remained relatively flat to the fourth quarter 2003. The increase in noninterest expense from prior year was primarily attributable to increased personnel expense.

Balance Sheet Review

    The Company's loan portfolio grew $144.9 million or 9% 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 March 31, 2004 represent a modest decline of 0.7% from March 31, 2003. The Company’s assets were $2.5 billion at March 31, 2004 and at March 31, 2003.

    The Company continues to grow its shareholders’ equity while also providing a dividend yield of 2.79% to shareholders. Shareholders’ equity of $225.9 million on March 31, 2004 is a 7.0% increase from the $211.1 million on March 31, 2003 and a 2.0% increase from the $221.4 million on December 31, 2003.

Asset Quality

    Nonperforming loans decreased 29.9% to $17.9 million from the $25.6 million at March 31, 2003, but increased 6.1% from the $16.9 million at December 31, 2003.

    Foreclosed properties on March 31, 2004 were $6.8 million, an increase from the $3.7 million reported at March 31, 2003 and the $6.6 million at December 31, 2003.

    Net charge-offs for the quarter ended March 31, 2004 of $1.6 million are approximately 10% less than the $1.8 million for the first quarter of 2003 but increased from the $1.3 million for the fourth quarter of 2003. The provision for loan loss expense for the first quarter 2004 increased by $586 thousand compared to the first quarter 2003 and $18 thousand compared to the fourth quarter 2003. The provision expense in both the first quarter 2004 and the fourth quarter 2003 was impacted by net loan growth during these quarters of $34.1 million and $42.5 million, respectively. Our reserve for losses on loans as a percentage of total loans outstanding at March 31, 2004 remained the same as prior quarter and prior year 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 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 $2.5 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)
March 31, 2004
(in thousands except per share data)
 
  
 
 
 
 
  
Three
Three
Three
 
  
Months
Months
Months
 
  
Ended
Ended
Ended
 
  
3/31/04
12/31/03
3/31/03
   
 
  
 
 
 
Interest income
 
$
31,297
 
$
31,739
 
$
32,667
 
Interest expense
   
8,616
   
9,442
   
12,139
 
   
 
 
 
Net interest income
   
22,681
   
22,297
   
20,528
 
Loan loss provision
   
2,133
   
2,115
   
1,547
 
 
    
 
    
 
    
 
  
Securities gains
   
1
   
-
   
979
 
Gains on sales of loans
   
459
   
964
   
1,521
 
Deposit service charges
   
4,237
   
4,412
   
3,862
 
Trust revenue
   
561
   
606
   
613
 
Insurance commissions
   
65
   
213
   
102
 
Other noninterest income
   
2,692
   
1,953
   
1,469
 
   
 
 
 
Total noninterest income
   
8,015
   
8,148
   
8,546
 
 
    
 
    
 
    
 
  
Personnel expense
   
9,691
   
8,989
   
9,061
 
Occupancy and equipment
   
2,413
   
2,416
   
2,300
 
Amortization of core deposit intangible
   
145
   
145
   
145
 
Other noninterest expense
   
5,945
   
6,699
   
6,105
 
   
 
 
 
Total noninterest expense
   
18,194
   
18,249
   
17,611
 
   
 
 
 
 
    
 
    
 
    
 
  
Net income before taxes
   
10,369
   
10,081
   
9,916
 
Income taxes
   
3,089
   
2,528
   
2,923
 
   
 
 
 
Net income
 
$
7,280
 
$
7,553
 
$
6,993
 
 
    
 
    
 
    
 
  
Memo: TEQ interest income
 
$
31,686
 
$
32,131
 
$
33,065
 
 
    
 
    
 
    
 
  
Average shares outstanding
   
13,467
   
13,452
   
13,537
 
Basic earnings per share
 
$
0.54
 
$
0.56
 
$
0.52
 
Diluted earnings per share
 
$
0.53
 
$
0.55
 
$
0.51
 
Dividends per share
 
$
0.23
 
$
0.23
 
$
0.19
 
 
    
 
    
 
    
 
  
Average balances:
   
 
    
 
    
 
  
Loans, net of unearned income
 
$
1,744,992
 
$
1,709,394
 
$
1,622,672
 
Earning assets
   
2,267,432
   
2,292,814
   
2,268,248
 
Total assets
   
2,471,939
   
2,496,483
   
2,468,156
 
Deposits
   
2,056,125
   
2,090,893
   
2,099,854
 
Interest bearing liabilities
   
1,867,324
   
1,900,093
   
1,915,509
 
Shareholders' equity
   
225,769
   
220,189
   
211,886
 
 
    
 
    
 
    
 
  
Performance ratios:
   
 
    
 
    
 
  
Return on average assets
   
1.18
%
 
1.20
%
 
1.15
%
Return on average equity
   
12.97
%
 
13.61
%
 
13.38
%
Yield on average earning assets (tax equivalent)
   
5.62
%
 
5.56
%
 
5.91
%
Cost of interest bearing funds (tax equivalent)
   
1.86
%
 
1.97
%
 
2.57
%
Net interest margin (tax equivalent)
   
4.09
%
 
3.93
%
 
3.74
%
Efficiency ratio
   
58.53
%
 
59.18
%
 
61.81
%
 
    
 
    
 
    
 
  
Loan charge-offs
 
$
(2,564
)
$
(2,247
)
$
(2,837
)
Recoveries
    

929

    

969

    

1,028

  
   
 
 
 
Net charge-offs
 
$
(1,635
)
$
(1,278
)
$
(1,809
)
 
    
 
    
 
    
 
  
Market Price:
   
 
    
 
    
 
  
High
 
$
33.00
 
$
33.73
 
$
24.22
 
Low
   
27.68
   
25.50
   
22.46
 
Close
   
33.00
   
30.20
   
22.96
 
 
 
     
 
 
 
  
As of
As of
As of
 
  
3/31/04
12/31/03
3/31/03
   
 
  
 
 
 
Assets:
 
 
 
 
Loans, net of unearned
 
$
1,770,332
 
$
1,736,260
 
$
1,625,475
 
Loan loss reserve
   
(25,151
)
 
(24,653
)
 
(23,008
)
   
 
 
 
Net loans
   
1,745,181
   
1,711,607
   
1,602,467
 
Loans held for sale
   
680
   
315
   
4,151
 
Securities AFS
   
366,869
   
421,855
   
516,939
 
Securities HTM
   
78,890
   
87,497
   
43,279
 
Other earning assets
   
30,822
   
9,340
   
69,692
 
Cash and due from banks
   
82,510
   
79,621
   
77,153
 
Premises and equipment
   
50,108
   
49,990
   
50,171
 
Goodwill and core deposit intangible
   
63,806
   
63,951
   
64,386
 
Other assets
   
41,567
   
49,863
   
41,614
 
   
 
 
 
Total Assets
 
$
2,460,433
 
$
2,474,039
 
$
2,469,852
 
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
  
Liabilities and Equity:
   
 
    
 
    
 
  
NOW accounts
 
$
15,376
 
$
16,578
 
$
11,784
 
Savings deposits
   
602,550
   
597,971
   
623,757
 
CD's >=$100,000
   
345,967
   
357,573
   
354,942
 
Other time deposits
   
721,412
   
736,090
   
788,717
 
   
 
 
 
Total interest bearing deposits
   
1,685,305
   
1,708,212
   
1,779,200
 
Noninterest bearing deposits
   
370,298
   
359,403
   
330,665
 
   
 
 
 
Total deposits
   
2,055,603
   
2,067,615
   
2,109,865
 
Repurchase agreements
   
87,526
   
96,507
   
48,911
 
Other interest bearing liabilities
   
71,819
   
71,478
   
80,316
 
Noninterest bearing liabilities
   
19,577
   
17,046
   
19,702
 
   
 
 
 
Total liabilities
   
2,234,525
   
2,252,646
   
2,258,794
 
Shareholders' equity
   
225,908
   
221,393
   
211,058
 
   
 
 
 
Total Liabilities and Equity
 
$
2,460,433
 
$
2,474,039
 
$
2,469,852
 
 
    
 
    
 
    
 
  
Ending shares outstanding
   
13,438
   
13,462
   
13,500
 
Memo: Market value of HTM Securities
 
$
79,479
 
$
87,061
 
$
44,385
 
 
    
 
    
 
    
 
  
90 days past due loans
 
$
4,980
 
$
5,463
 
$
5,829
 
Nonaccrual loans
   
11,423
   
9,705
   
19,463
 
Restructured loans
   
1,517
   
1,726
   
268
 
Foreclosed properties
   
6,814
   
6,566
   
3,723
 
 
    
 
    
 
    
 
  
Tier 1 leverage ratio
   
8.97
%
 
8.73
%
 
8.33
%
Tier 1 risk based ratio
   
11.63
%
 
11.35
%
 
11.06
%
Total risk based ratio
   
12.88
%
 
12.60
%
 
12.31
%
FTE employees
   
915
   
901
   
884
 
 
 
     
 
 
Community Trust Bancorp, Inc. reported earnings for the three months ending March 31, 2004 and March 31, 2003 as follows:
 
  
 
 
 
  
Three Months Ended
 
  
March 31
   
 
  
2004
2003
   
(in thousands except per share information)
  
 
 
 
  
 
 
Net income
 
$
7,280
 
$
6,993
 
 
    
 
    
 
  
Basic earnings per share
 
$
0.54
 
$
0.52
 
 
    
 
    
 
  
Diluted earnings per share
 
$
0.53
 
$
0.51
 
 
    
 
    
 
  
Average shares outstanding
   
13,467
   
13,537
 
 
    
 
    
 
  
Total assets (end of period)
 
$
2,460,433
 
$
2,469,852
 
 
    
 
    
 
  
Return on average equity
   
12.97
%
 
13.38
%
 
    
 
    
 
  
Return on average assets
   
1.18
%
 
1.15
%