EX-1 2 ex1er1204.htm EXHIBIT 1. DECEMBER 31, 2004 EARNINGS RELEASE Exhibit 1. December 31, 2004 Earnings Release
Exhibit 1.


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, 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 $2.7 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