EX-99.1 2 ctber12078kex99.htm CTBI DECEMBER 31, 2007 EARNINGS RELEASE ctber12078kex99.htm

Exhibit 99.1


FOR IMMEDIATE RELEASE
January 16, 2008

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 FOURTH QUARTER AND YEAR 2007.
 
Earnings Summary
                              
(in thousands except per share data)
  
4Q
2007
    
3Q
2007
    
4Q
2006
    
12 Months
2007
    
12 Months
2006
  
Net income
   $
9,271
     $
10,476
     $
9,520
     $
36,627
     $
39,064
  
Earnings per share
    
0.62
      
0.69
      
0.63
      
2.42
      
2.59
  
Earnings per share (diluted)
    
0.61
      
0.68
      
0.62
      
2.38
      
2.55
  
                                         
Return on average assets
     1.26 %     1.39 %     1.28 %     1.23 %     1.33 %
Return on average equity
     12.22 %     14.04 %     13.45 %     12.45 %     14.51 %
Efficiency ratio
     55.60 %     52.36 %     57.43 %     57.62 %     56.67 %
                                         
Dividends declared per share
   $
0.29
     $
0.27
     $
0.27
     $
1.10
     $
1.05
  
Book value per share
    
20.03
      
19.62
      
18.63
      
20.03
      
18.63
  
                                         
Weighted average shares
    
15,042
      
15,183
      
15,154
      
15,150
      
15,086
  
Weighted average shares (diluted)
    
15,192
      
15,342
      
15,417
      
15,372
      
15,300
  
 
Community Trust Bancorp, Inc. (NASDAQ-CTBI) reports earnings for the quarter ended December 31, 2007 of $9.3 million or $0.62 per basic share compared to $10.5 million or $0.69 per share earned during the quarter ended September 30, 2007 and $9.5 million or $0.63 per share earned during the fourth quarter of 2006.  Earnings for year ended December 31, 2007 were $36.6 million or $2.42 per share compared to $39.1 million or $2.59 per share earned for the year 2006.

Fourth Quarter and Year 2007 Highlights

v  
CTBI's basic earnings per share for the fourth quarter 2007 decreased 10.1% from prior quarter and 1.6% from prior year fourth quarter.  Year-to-date earnings per share decreased 6.6% from the year ended December 31, 2006.

v  
Current quarter and year-to-date earnings have been impacted by an increase in provision for loan losses of $0.4 million quarter over quarter and $2.2 million year over year.

v  
The decrease in earnings quarter over quarter was also impacted by the third quarter receipt of a $1.2 million fee in relation to the termination of the acquisition of Eagle Fidelity, Inc. and the third quarter reversal of an employee incentive accrual in the amount of $1.5 million.

v  
Core earnings for the year 2007 reflect the pressure on our net interest income as CTBI operated within an inverted yield curve through most of 2007.  Net interest income year over year decreased $1.7 million.

v  
Nonperforming loans at December 31, 2007 were $31.9 million, an increase of $0.4 million over prior quarter and a $17.7 million increase from 2006.

v  
Our loan portfolio was relatively flat for the fourth quarter compared to prior quarter, but increased 2.8% from December 31, 2006.  The market remains highly competitive and CTBI is continuing to focus on asset quality and loan yield.

v  
Our investment portfolio declined 7.2% from prior quarter and 22.1% from prior year.  The year over year decline resulted from the payment of a $40 million FHLB advance and a decline in deposits which were funded through the sale of auction rate securities.

v  
Our efficiency ratio improved during the year 2007 primarily resulting from the acquisition termination fee and the reversal of the incentive accrual in the third quarter.

Net Interest Income
 
Our quarterly net interest margin increased 16 basis points to 4.02% from prior quarter; however, there was a 12 basis point decline year over year in the year-to-date margin.
 
       Net interest income for the quarter of $26.9 million was a slight increase from prior quarter and prior year fourth quarter, but year-to-date net interest income decreased $1.7 million from prior year.  The yield on average earnings assets for the year 2007 increased 17 basis points from 2006 in comparison to the 39 basis point increase in the cost of interest bearing funds.  Average earning assets have increased 1.6% from prior year-end.
 
Noninterest Income
 
Noninterest income for the fourth quarter 2007 increased approximately $0.5 million from prior quarter after normalizing for the receipt of the $1.2 million fee associated with the termination of the Eagle Fidelity, Inc. acquisition in the third quarter, primarily a result of increased deposit service charges and loan related fees.  Year-to-date noninterest income normalized increased 8.8% from the year ended December 31, 2006, with increases in gains on sales of loans, deposit service charges, trust revenue, and loan related fees.

Noninterest Expense
 
Noninterest expense for the quarter increased 5.0% from prior quarter, primarily as a result of the reversal of an employee incentive accrual in the third quarter, but decreased 1.0% from prior year fourth quarter.  Year-to-date noninterest expense increased 3.3% as the third quarter accrual reversal was offset by the first quarter charge related to unamortized debt issuance costs with the redemption of trust preferred securities.

Balance Sheet Review
 
CTBI’s total assets decreased $26.5 million or 0.9% from prior quarter and $67.1 million or 2.3% from prior year.  The year over year decrease resulted from the payoff of a $40 million FHLB advance and a decline in deposits which were funded through the sale of auction rate securities.  Loans outstanding at December 31, 2007 were $2.2 billion reflecting a $6.6 million or 0.3% decrease during the quarter, and a $60.4 million or 2.8% increase year over year.  CTBI's investment portfolio decreased $29.9 million from prior quarter and $109.2 million from prior year-end.  Deposits, including repurchase agreements, declined $27.6 million or 1.1% during the quarter as CTBI continued its focus on managing deposit growth and pricing controls due to its liquidity position.  Deposits have declined $50.7 million or 2.0% year over year.
 
Shareholders’ equity of $301.4 million on December 31, 2007 was an increase of 2.2% from September 30, 2007 and a 6.7% increase from December 31, 2006.  CTBI's annualized dividend yield to shareholders as of December 31, 2007 was 4.21%.

Asset Quality
 
Nonperforming loans at December 31, 2007 were $31.9 million compared to $31.5 million at September 30, 2007 and $14.2 million at December 31, 2006.  All nonperforming loans are individually reviewed with specific reserves established when appropriate.  The increase in nonperforming loans is driven primarily by the increased inventory and the number of days on the market of residential real estate developments in Central Kentucky.  We anticipate nonperforming loans to remain higher than recent history as the normal legal collection time period for real estate secured assets has been slowed due to increased volumes in the industry.  Our loan portfolio management processes focus on maintaining appropriate reserves for potential losses.
 
Foreclosed properties at December 31, 2007 of $7.9 million were an approximate $1.3 million increase from the $6.6 million on September 30, 2007 and an approximate $3.4 million increase from the $4.5 million on December 31, 2006.  The year over year increase was driven by a $2.6 million increase in single family residential properties from our Central Kentucky Region where the market has softened.  The market has not experienced deflation in residential real estate, but the time on the market before sale has extended.
 
Net loan charge-offs for the quarter of $2.2 million, or 0.39% of average loans annualized, was an increase from prior quarter's 0.30% of average loans annualized and from the 0.31% from prior year fourth quarter.  Net loan charge-offs for the year ended December 31, 2007 of 0.27% of average loans annualized was a decrease from the 0.29% for 2006.  Our reserve for losses on loans as a percentage of total loans outstanding at December 31, 2007 was 1.26% compared to 1.25% at September 31, 2007 and 1.27% at December 31, 2006.  The adequacy of our reserve for losses on loans is analyzed quarterly and adjusted as necessary.

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. CTBI’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 CTBI 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 CTBI’s results.  These statements are representative only on the date hereof, and CTBI undertakes no obligation to update any forward-looking statements made.
 
Community Trust Bancorp, Inc., with assets of $2.9 billion, is headquartered in Pikeville, Kentucky and has 71 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)
  
December 31, 2007
  
(in thousands except per share data and # of employees)
  
                               
   
Three 
  
Three 
  
Three 
  
Twelve 
  
Twelve 
   
Months 
  
Months 
  
Months 
  
Months 
  
Months 
   
Ended 
  
Ended 
  
Ended 
  
Ended 
  
Ended 
   
December 31, 2007
  
September 30, 2007
  
December 31, 2006
  
December 31, 2007 
  
December 31, 2006 
Interest income
   $
47,881
     $
49,719
     $
49,234
     $
196,864
     $
189,305
  
Interest expense
    
20,942
      
23,127
      
22,496
      
90,832
      
81,538
  
Net interest income
    
26,939
      
26,592
      
26,738
      
106,032
      
107,767
  
Loan loss provision
    
2,309
      
1,915
      
1,200
      
6,540
      
4,305
  
                                         
Gains on sales of loans
    
342
      
384
      
380
      
1,338
      
1,265
  
Deposit service charges
    
5,567
      
5,302
      
5,081
      
21,003
      
20,162
  
Trust revenue
    
1,240
      
1,240
      
1,074
      
4,859
      
3,743
  
Loan related fees
    
702
      
606
      
700
      
3,196
      
2,473
  
Other noninterest income
    
1,351
      
2,402
      
1,337
      
6,212
      
4,916
  
Total noninterest income
    
9,202
      
9,934
      
8,572
      
36,608
      
32,559
  
                                         
Personnel expense
    
10,480
      
9,604
      
11,607
      
42,298
      
44,145
  
Occupancy and equipment
    
2,902
      
2,843
      
2,779
      
11,609
      
11,467
  
Amortization of core deposit intangible
    
158
      
159
      
158
      
634
      
634
  
Other noninterest expense
    
6,757
      
6,718
      
5,962
      
28,514
      
24,161
  
Total noninterest expense
    
20,297
      
19,324
      
20,506
      
83,055
      
80,407
  
                                         
Net income before taxes
    
13,535
      
15,287
      
13,604
      
53,045
      
55,614
  
Income taxes
    
4,264
      
4,811
      
4,084
      
16,418
      
16,550
  
Net income
   $
9,271
     $
10,476
     $
9,520
     $
36,627
     $
39,064
  
                                         
Memo: TEQ interest income
   $
48,245
     $
50,098
     $
49,631
     $
198,377
     $
190,879
  
                                         
Average shares outstanding
    
15,042
      
15,183
      
15,154
      
15,150
      
15,086
  
Basic earnings per share
   $
0.62
     $
0.69
     $
0.63
     $
2.42
     $
2.59
  
Diluted earnings per share
   $
0.61
     $
0.68
     $
0.62
     $
2.38
     $
2.55
  
Dividends per share
   $
0.29
     $
0.27
     $
0.27
     $
1.10
     $
1.05
  
                                         
Average balances:
                                        
Loans, net of unearned income
   $
2,233,594
     $
2,222,451
     $
2,160,249
     $
2,205,431
     $
2,131,649
  
Earning assets
    
2,694,129
      
2,770,100
      
2,727,043
      
2,760,014
      
2,717,325
  
Total assets
    
2,918,398
      
2,989,727
      
2,951,213
      
2,980,713
      
2,942,892
  
Deposits
    
2,317,078
      
2,356,589
      
2,328,294
      
2,352,902
      
2,294,385
  
Interest bearing liabilities
    
2,156,633
      
2,233,762
      
2,220,325
      
2,231,347
      
2,214,162
  
Shareholders' equity
    
300,952
      
296,001
      
280,707
      
294,106
      
269,202
  
                                         
Performance ratios:
                                        
Return on average assets
     1.26 %     1.39 %     1.28 %     1.23 %     1.33 %
Return on average equity
     12.22 %     14.04 %     13.45 %     12.45 %     14.51 %
Yield on average earning assets (tax equivalent)
     7.10 %     7.18 %     7.22 %     7.19 %     7.02 %
Cost of interest bearing funds (tax equivalent)
     3.85 %     4.11 %     4.02 %     4.07 %     3.68 %
Net interest margin (tax equivalent)
     4.02 %     3.86 %     3.95 %     3.90 %     4.02 %
Efficiency ratio (tax equivalent)
     55.60 %     52.36 %     57.43 %     57.62 %     56.67 %
                                         
Loan charge-offs
   $
2,627
     $
2,311
     $
2,413
     $
8,432
     $
9,430
  
Recoveries
     (439 )     (641 )     (733 )     (2,420 )     (3,145 )
Net charge-offs
   $
2,188
     $
1,670
     $
1,680
     $
6,012
     $
6,285
  
                                         
Market Price:
                                        
High
   $
32.50
     $
33.46
     $
42.59
     $
41.50
     $
42.59
  
Low
    
26.09
      
26.47
      
36.51
      
26.09
      
30.60
  
Close
    
27.53
      
30.01
      
41.53
      
27.53
      
41.53
  
                                         
                                         
                                         
                                         
 
  
                   
As of 
  
As of 
  
As of 
                   
December 31, 2007
  
September 30, 2007 
  
December 31, 2006 
Assets:
                                        
Loans, net of unearned
                   $
2,227,897
     $
2,234,494
     $
2,167,458
  
Loan loss reserve
                     (28,054 )     (27,933 )     (27,526 )
Net loans
                    
2,199,843
      
2,206,561
      
2,139,932
  
Loans held for sale
                    
2,334
      
1,719
      
1,431
  
Securities AFS
                    
324,153
      
352,973
      
425,851
  
Securities HTM
                    
32,959
      
34,107
      
40,508
  
Other equity investments
                    
28,060
      
28,041
      
28,027
  
Other earning assets
                    
37,689
      
45,993
      
65,043
  
Cash and due from banks
                    
101,412
      
83,804
      
94,336
  
Premises and equipment
                    
53,391
      
53,650
      
55,665
  
Goodwill and core deposit intangible
                    
66,976
      
67,134
      
67,610
  
Other assets
                    
55,867
      
55,160
      
51,358
  
Total Assets
                   $
2,902,684
     $
2,929,142
     $
2,969,761
  
                                         
Liabilities and Equity:
                                        
NOW accounts
                   $
18,663
     $
17,942
     $
18,107
  
Savings deposits
                    
636,156
      
664,561
      
669,263
  
CD's>=$100,000
                    
442,831
      
436,833
      
438,080
  
Other time deposits
                    
745,653
      
787,171
      
785,723
  
Total interest bearing deposits
                    
1,843,303
      
1,906,507
      
1,911,173
  
Noninterest bearing deposits
                    
449,861
      
426,368
      
429,994
  
Total deposits
                    
2,293,164
      
2,332,875
      
2,341,167
  
Repurchase agreements
                    
158,980
      
146,876
      
161,630
  
Other interest bearing liabilities
                    
120,611
      
117,762
      
158,526
  
Noninterest bearing liabilities
                    
28,574
      
36,713
      
26,063
  
Total liabilities
                    
2,601,329
      
2,634,226
      
2,687,386
  
Shareholders' equity
                    
301,355
      
294,916
      
282,375
  
Total Liabilities and Equity
                   $
2,902,684
     $
2,929,142
     $
2,969,761
  
                                         
Ending shares outstanding
                    
15,044
      
15,032
      
15,158
  
Memo: Market value of HTM securities
                   $
32,350
     $
33,090
     $
39,015
  
                                         
90 days past due loans
                   $
9,622
     $
12,261
     $
4,294
  
Nonaccrual loans
                    
22,237
      
19,192
      
9,863
  
Restructured loans
                    
20
      
61
      
66
  
Foreclosed properties
                    
7,851
      
6,624
      
4,524
  
                                         
Tier 1 leverage ratio
                     10.32 %     9.87 %     9.58 %
Tier 1 risk based ratio
                     13.24 %     12.75 %     12.21 %
Total risk based ratio
                     14.49 %     13.99 %     13.43 %
FTE employees
                    
1,011
      
999
      
1,021
  
                                         
                                         
                                         
                                         
                                         
Community Trust Bancorp, Inc. reported earnings for the three and twelve months ending December 31, 2007 and 2006 as follows:
                  
                                         
   
Three Months Ended
  
Twelve Months Ended
        
   
December 31
  
December 31
        
   
2007
  
2006
  
2007
  
2006
        
Net income
   $
9,271
     $
9,520
     $
36,627
     $
39,064
          
                                         
Basic earnings per share
   $
0.62
     $
0.63
     $
2.42
     $
2.59
          
                                         
Diluted earnings per share
   $
0.61
     $
0.62
     $
2.38
     $
2.55
          
                                         
Average shares outstanding
    
15,042
      
15,154
      
15,150
      
15,086
          
                                         
Total assets (end of period)
   $
2,902,684
     $
2,969,761
                          
                                         
Return on average equity
     12.22 %     13.45 %     12.45 %     14.51 %        
                                         
Return on average assets
     1.26 %     1.28 %     1.23 %     1.33 %        
                                         
Provision for loan losses
   $
2,309
     $
1,200
     $
6,540
     $
4,305
          
                                         
Gains on sales of loans
   $
342
     $
380
     $
1,338
     $
1,265