EX-99.1 2 ct8k0606erex99.htm CTBI 2ND QUARTER EARNINGS RELEASE 8-K EXHIBIT 99.1 CTBI 2nd Quarter Earnings Release 8-K Exhibit 99.1
Exhibit 99.1


FOR IMMEDIATE RELEASE
July 18, 2006
 
CORRECTED RELEASE
Certain immaterial prior year reclassifications were inadvertently not reflected in the year-over-year comparisons included in the original release. The complete corrected text follows.

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 RECORD EARNINGS FOR THE SECOND QUARTER 2006.
 
Earnings Summary
                      
(in thousands except per share data)
    
2Q
2006
 
 
1Q
2006
 
 
2Q
2005
 
 
6 Months
2006
 
 
6 Months
2005
  
Net income
  
 $
9,892
     $
9,768
  
 $ 
8,478
    $ 
19,660
     $
16,439
  
Earnings per share
  
  
0.66
     
0.65
  
 
0.57
    
1.31
    
1.11
  
Earnings per share (diluted)
     
0.65
    
0.64
    
0.56
    
1.29
    
1.08
  
                                 
Return on average assets
    
1.33
%
  
1.36
%
  
1.21
%
  
1.35
%
  
1.20
%
Return on average equity
    
15.02
%
  
15.27
%
  
13.96
%
  
15.14
%
  
13.73
%
Efficiency ratio
    
55.73
%
  
58.21
%
  
57.86
%
  
56.95
%
  
58.48
%
                                 
Dividends declared per share
     $
0.26
     $
0.26
     $
0.24
     $
0.52
     $
0.48
  
Book value per share
    
17.54
    
17.30
    
16.46
    
17.54
    
16.46
  
                                 
Weighted average shares
    
15,051
    
15,011
    
14,881
    
15,031
    
14,869
  
Weighted average shares (diluted)
    
15,274
    
15,252
    
15,167
    
15,246
    
15,153
  

Community Trust Bancorp, Inc. (NASDAQ-CTBI) is pleased to report earnings for the second quarter 2006 of $9.9 million or $0.66 per share compared to $8.5 million or $0.57 per share earned during the second quarter of 2005 and $9.8 million or $0.65 per share earned during the first quarter of 2006. Earnings for the six months ended June 30, 2006 were $19.7 million or $1.31 per share compared to $16.4 million or $1.11 per share earned during the six months ended June 30, 2005.

Second Quarter Highlights

v  
The Company's basic earnings per share for the second quarter 2006 reflects an increase of 15.8% over the second quarter 2005 and 1.5% over the first quarter 2006. Year-to-date earnings per share increased 18.0% from prior year.

v  
The Company's net interest margin at 4.02% for the second quarter 2006 increased 7 basis points from prior year second quarter and remained stable from the first quarter 2006. The year-to-date net interest margin increased 6 basis points from prior year.

v  
Net interest revenue for the quarter increased 8.3% from the second quarter 2005 and 3.2% from the first quarter 2006. Net interest revenue for the six months ended June 30, 2006 was an 8.1% increase from the same period last year.

v  
The Company’s average earning assets for the quarter ended June 30, 2006 increased 5.9% from the quarter ended June 30, 2005 and 2.2% from the quarter ended March 31, 2006. Average earning assets for the six months ended June 30, 2006 was a 6.0% increase over the six months ended June 30, 2005.

v  
The Company's loan portfolio grew at a rate of 3.4% from June 30, 2005 and at an annualized rate of 7.2% from prior quarter.

v  
Nonperforming loans as of percentage of total loans at June 30, 2006 were a 24 basis point decrease from June 30, 2005, but an increase of 3 basis points from prior quarter.

v  
As a result of the improvement in credit quality trends, and a reduction in overall losses, provision for loan losses for the six months ended June 30, 2006 decreased to $1.4 million compared to $3.1 million for the same period last year.

v  
Return on average assets was 1.33% for the quarter ended June 30, 2006 compared to 1.21% for the quarter ended June 30, 2005 and 1.36% for the quarter ended March 31, 2006. Return on average assets for the six months ended June 30, 2006 was 1.35%, a 12.5% increase from the 1.20% for the six months ended June 30, 2005.

v  
Return on average shareholders' equity for the quarter ended June 30, 2006 was 15.02% compared to 13.96% for the quarter ended June 30, 2005 and 15.27% for the quarter ended March 31, 2006. Our return on average equity for the six months ended June 30, 2006 of 15.14% reflects a 141 basis point increase from the 13.73% for the six months ended June 30, 2005.

v  
CTBI's efficiency ratio for the quarter ended June 30, 2006 was 55.73% compared to 57.86% for the quarter ended June 30, 2005 and 58.21% for the quarter ended March 31, 2006. Our efficiency ratio for the six months ended June 30, 2006 improved 153 basis points to 56.95% compared to 58.48% for the six months ended June 30, 2005.

Net Interest Income

Our net interest margin for the second quarter 2006 was 4.02% compared to 3.95% for the second quarter 2005 and 4.02% for the first quarter 2006. Net interest income for the quarter of $26.8 million was an increase of 8.3% from the $24.8 million for the second quarter 2005 and a 3.2% increase from the $25.1 million for the first quarter 2006. Year-to-date net interest income increased 8.1% or $3.9 million from the six months ended June 30, 2005. Average earnings assets increased to $2.7 billion for the quarter ended June 30, 2006, a 5.9% increase over the quarter ended June 30, 2005 and a 2.2% increase over prior quarter. Average earning assets for the six months ended June 30, 2006 increased 6.0% or $151.6 million over the six months ended June 30, 2005.

Noninterest Income

Noninterest income for the quarter ended June 30, 2006 decreased 4.7% from the quarter ended June 30, 2005 but increased 3.9% from the quarter ended March 31, 2006.  Year-to-date noninterest income decreased 1.8% to $16.6 million for the six months ended June 30, 2006 from the $16.9 million for the same period last year.

The following table displays the quarterly activity in the various significant noninterest income accounts.

Noninterest Income Summary
          
(in thousands)
2Q
2006
1Q
2006
2Q
2005
6 Months
2006
6 Months
2005
Deposit related fees
$
5,309
$
4,552
$
4,460
$
9,861
$
8,507
Loan related fees
  
488
  
624
  
1,198
  
1,112
  
2,642
Trust revenue
  
861
  
881
  
740
  
1,742
  
1,480
Gains on sales of loans
  
316
  
304
  
347
  
620
  
652
Other revenue
  
1,470
  
1,763
  
2,119
  
3,233
  
3,583
 
Total noninterest income
$
8,444
$
8,124
$
8,864
$
16,568
$
16,864

Noninterest Expense

Noninterest expense for the quarter ended June 30, 2006 of $19.9 million was a 0.9% increase from the $19.7 million for the second quarter 2005 but a 1.0% decrease from the $20.1 million for the first quarter 2006.

Balance Sheet Review

The Company’s total assets at June 30, 2006 were $3.0 billion compared to $2.8 billion at June 30, 2005 and $3.0 billion at March 31, 2006. Loans outstanding grew $69.7 million year over year representing an increase of 3.4% from June 30, 2005 to June 30, 2006. Loan growth for the quarter was $37.6 million, an annualized growth rate of 7.2%. The investment portfolio decreased 2.3% or $12.3 million year over year and an annualized 10.4% or $13.8 million during the quarter. Deposits including repurchase agreements of $2.5 billion at June 30, 2006 increased 5.8% from June 30, 2005 and an annualized 1.2% from March 31, 2006. Total deposit growth, including repurchase agreements, was $136.8 million year over year and $7.4 million for the quarter.

Shareholders’ equity of $264.6 million on June 30, 2006 was an 8.0% increase from the $245.0 million on June 30, 2005 and an increase of 1.8% from the $259.8 million on March 31, 2006. The Company's annualized dividend yield to shareholders as of June 30, 2006 was 2.98%.

Asset Quality

Nonperforming loans at June 30, 2006 were $17.0 million compared to $21.4 million at June 30, 2005 and $16.0 million at March 31, 2006. Nonperforming loans as of percentage of total loans at June 30, 2006 were a 24 basis point decrease from June 30, 2005, but an increase of 3 basis points from prior quarter.

Foreclosed properties at June 30, 2006 were $5.0 million compared to $5.9 million on June 30, 2005 and $5.0 million on March 31, 2006.

Net loan charge-offs for the quarter ended June 30, 2006 were $1.7 million, or 0.3% of average loans annualized, compared to $1.8 million, or 0.4% of average loans annualized, for the quarter ended June 30, 2005 and $1.4 million, or 0.3% of average loans annualized, for the quarter ended March 31, 2006. Our reserve for losses on loans as a percentage of total loans outstanding at June 30, 2006 decreased to 1.30% from the 1.41% at June 30, 2005 and the 1.34% at March 31, 2006.

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, 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, 2006
  
(in thousands except per share data)
  
                       
   
Three
 
Three
 
Three
 
Six
 
Six
 
 
  
Months
 
Months
 
Months
 
Months
 
Months
 
 
  
Ended
 
Ended
  
Ended
 
Ended
 
Ended
 
 
  
6/30/2006
  
3/31/2006
  
6/30/2005
  
6/30/2006
  
6/30/2005
  
 
                                
Interest income
  
$
46,759
  
$
43,967
  
$
38,272
  
$
90,726
  
$
74,475
  
Interest expense
    
19,943
   
17,991
   
13,509
   
37,934
   
25,628
 
Net interest income
    
26,816
   
25,976
   
24,763
   
52,792
   
48,847
 
Loan loss provision
    
1,350
   
-
   
1,700
   
1,350
   
3,067
 
                                 
Securities gains
    
-
   
-
   
3
   
-
   
3
 
Gains on sales of loans
    
316
   
304
   
347
   
620
   
652
 
Deposit service charges
    
5,309
   
4,552
   
4,460
   
9,861
   
8,507
 
Trust revenue
    
861
   
881
   
740
   
1,742
   
1,480
 
Insurance commissions
    
153
   
129
   
120
   
282
   
217
 
Other noninterest income
    
1,805
   
2,258
   
3,194
   
4,063
   
6,005
 
Total noninterest income
    
8,444
   
8,124
   
8,864
   
16,568
   
16,864
 
                                 
Personnel expense
    
10,823
   
10,965
   
10,613
   
21,788
   
20,874
 
Occupancy and equipment
    
2,967
   
2,986
   
2,690
   
5,953
   
5,229
 
Amortization of core deposit intangible
    
158
   
159
   
145
   
317
   
290
 
Other noninterest expense
    
5,919
   
5,967
   
6,236
   
11,886
   
12,498
 
Total noninterest expense
    
19,867
   
20,077
   
19,684
   
39,944
   
38,891
 
                                 
Net income before taxes
    
14,043
   
14,023
   
12,243
   
28,066
   
23,753
 
Income taxes
    
4,151
   
4,255
   
3,765
   
8,406
   
7,314
 
Net income
  
$
9,892
  
$
9,768
  
$
8,478
  
$
19,660
  
$
16,439
  
                                 
Memo: TEQ interest income
  
$
47,150
  
$
44,357
  
$
38,665
  
$
91,507
  
$
75,265
  
                                 
Average shares outstanding
    
15,051
   
15,011
   
14,881
   
15,031
   
14,869
 
Basic earnings per share
  
$
0.66
  
$
0.65
  
$
0.57
  
$
1.31
  
$
1.11
  
Diluted earnings per share
  
$
0.65
  
$
0.64
  
$
0.56
  
$
1.29
  
$
1.08
  
Dividends per share
  
$
0.26
  
$
0.26
  
$
0.24
  
$
0.52
  
$
0.48
  
                                 
Average balances:
                                
Loans, net of unearned income
  
$
2,124,485
  
$
2,096,842
  
$
1,982,353
  
$
2,110,740
  
$
1,951,768
  
Earning assets
    
2,717,205
   
2,659,430
   
2,565,040
   
2,688,477
   
2,536,912
 
Total assets
    
2,972,975
   
2,910,414
   
2,801,410
   
2,941,866
   
2,770,607
 
Deposits
    
2,291,822
   
2,274,582
   
2,196,635
   
2,283,250
   
2,177,823
 
Interest bearing liabilities
    
2,242,699
   
2,184,278
   
2,122,698
   
2,213,650
   
2,101,172
 
Shareholders' equity
    
264,181
   
259,398
   
243,569
   
261,802
   
241,358
 
                                 
Performance ratios:
                                
Return on average assets
    
1.33
%
  
1.36
%
  
1.21
%
  
1.35
%
  
1.20
%
Return on average equity
    
15.02
%
  
15.27
%
  
13.96
%
  
15.14
%
  
13.73
%
Yield on average earning assets (tax equivalent)
    
6.96
%
  
6.76
%
  
6.04
%
  
6.86
%
  
5.60
%
Cost of interest bearing funds (tax equivalent)
    
3.57
%
  
3.34
%
  
2.55
%
  
3.46
%
  
1.84
%
Net interest margin (tax equivalent)
    
4.02
%
  
4.02
%
  
3.95
%
  
4.02
%
  
4.09
%
Efficiency ratio
    
55.73
%
  
58.21
%
  
57.86
%
  
56.95
%
  
58.45
%
                                 
Loan charge-offs
  
$
(2,555
)
$
(2,361
)
$
(2,607
)
$
(4,916
)
$
(4,558
)
Recoveries
    
895
   
979
   
801
   
1,874
   
1,878
 
Net charge-offs
  
$
(1,660
)
$
(1,382
)
$
(1,806
)
$
(3,042
)
$
(2,680
)
                                 
Market Price:
                                
High
  
$
35.50
  
$
35.90
  
$
33.78
  
$
35.90
  
$
33.78
  
Low
    
31.50
   
30.60
   
27.94
 
 
30.60
    
27.94
 
Close
    
34.93
   
33.90
   
32.72
 
 
34.93
    
32.72
 
                                 
                                 
                                 
                                 
                                 
 
 
 
 
 
 
 
 
As of 
 
  
As of
   
As of
 
 
                
6/30/2006 
    
3/31/2006
    
6/30/2005
  
                                 
Assets:
                                
Loans, net of unearned
              
$
2,138,817
  
$
2,101,236
  
$
2,069,167
  
Loan loss reserve
                
(27,814
)
  
(28,124
)
  
(29,163
)
Net loans
                
2,111,003
   
2,073,112
   
2,040,004
 
Loans held for sale
                
2,140
   
1,367
   
110
 
Securities AFS
                
472,678
   
484,323
   
447,623
 
Securities HTM
                
44,550
   
46,690
   
55,829
 
Other earning assets
                
49,385
   
76,466
   
20,076
 
Cash and due from banks
                
81,185
   
83,804
   
82,979
 
Premises and equipment
                
57,230
   
57,695
   
57,400
 
Goodwill and core deposit intangible
                
66,391
   
66,550
   
66,976
 
Other assets
                
80,649
   
77,786
   
72,851
 
Total Assets
              
$
2,965,211
  
$
2,967,793
  
$
2,843,848
  
                                 
                                 
Liabilities and Equity:
                                
NOW accounts
              
$
25,296
  
$
19,762
  
$
15,472
  
Savings deposits
                
629,022
   
634,302
   
594,819
 
CD's >=$100,000
                
412,700
   
417,464
   
414,651
 
Other time deposits
                
774,606
   
775,094
   
781,993
 
Total interest bearing deposits
                
1,841,624
   
1,846,622
   
1,806,935
 
Noninterest bearing deposits
                
448,842
   
463,169
   
420,387
 
Total deposits
                
2,290,466
   
2,309,791
   
2,227,322
 
Repurchase agreements
                
188,224
   
161,538
   
114,576
 
Other interest bearing liabilities
                
197,320
   
214,210
   
236,008
 
Noninterest bearing liabilities
                
24,641
   
22,422
   
20,896
 
Total liabilities
                
2,700,651
   
2,707,961
   
2,598,802
 
Shareholders' equity
                
264,560
   
259,832
   
245,046
 
Total Liabilities and Equity
              
$
2,965,211
  
$
2,967,793
  
$
2,843,848
  
                                 
Ending shares outstanding
                
15,083
   
15,015
   
14,889
 
Memo: Market value of HTM Securities
              
$
42,002
  
$
44,531
  
$
54,703
  
                                 
90 days past due loans
              
$
5,644
  
$
4,148
  
$
4,237
  
Nonaccrual loans
                
10,697
   
11,072
   
16,312
 
Restructured loans
                
693
   
733
   
876
 
Foreclosed properties
                
5,000
   
4,962
   
5,945
 
                                 
Tier 1 leverage ratio
                
9.06
%
  
9.01
%
  
8.68
%
Tier 1 risk based ratio
                
11.51
%
  
11.28
%
  
11.13
%
Total risk based ratio
                
12.72
%
  
12.52
%
  
12.38
%
FTE employees
                
1,019
   
1,007
   
986
 
                                 
                                 
                                 
                                 
                                 
Community Trust Bancorp, Inc. reported earnings for the three and six months ending June 30, 2006 and 2005 as follows:
                                 
 
        
Three Months Ended 
 Six Months Ended  
 
        
June 30
 June 30
           
2006
    
2005
    
2006
    
2005
  
(in thousands except per share information)
                                
                                 
Net income
        
$
9,892
  
$
8,478
  
$
19,660
  
$
16,439
  
                                 
Basic earnings per share
        
$
0.66
  
$
0.57
  
$
1.31
  
$
1.11
  
                                 
Diluted earnings per share
        
$
0.65
  
$
0.56
  
$
1.29
  
$
1.08
  
                                 
Average shares outstanding
          
15,051
    
14,881
    
15,031
    
14,869
  
                                 
Total assets (end of period)
        
$
2,965,211
  
$
2,843,848
              
                                 
Return on average equity
          
15.02
%
  
13.96
%
  
15.14
%
  
13.73
%
                                 
Return on average assets
          
1.33
%
  
1.21
%
  
1.35
%
  
1.20
%
                                 
Provision for loan losses
        
$
1,350
  
$
1,700
  
$
1,350
  
$
3,067
  
                                 
Gains on sales of loans
        
$
316
  
$
347
  
$
620
  
$
652