EX-99.1 2 ctb8ker0309ex99-1.htm CTBI 1ST QUARTER 2009 EARNINGS RELEASE 8-K EX. 99.1 ctb8ker0309ex99-1.htm
Exhibit 99.1

FOR IMMEDIATE RELEASE
April 15, 2009

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 FIRST QUARTER 2009.

Earnings Summary
                  
(in thousands except per share data)
    
1Q 2009
      
4Q 2008
      
1Q 2008
  
Net income
   $ 7,363     $ 6,485     $ 8,545  
Earnings per share
   $ 0.49     $ 0.43     $ 0.57  
Earnings per share (diluted)
   $ 0.48     $ 0.43     $ 0.57  
                         
Return on average assets
     1.00 %     0.87 %     1.18 %
Return on average equity
     9.52 %     8.44 %     11.20 %
Efficiency ratio
     64.06 %     61.45 %     56.39 %
Tangible common equity/tangible assets ratio
     8.34 %     8.37 %     8.46 %
                         
Dividends declared per share
   $ 0.30     $ 0.30     $ 0.29  
Book value per share
   $ 20.74     $ 20.46     $ 20.48  
                         
Weighted average shares
     15,076       15,065       15,000  
Weighted average shares (diluted)
     15,193       15,221       15,116  
 
Community Trust Bancorp, Inc. (NASDAQ-CTBI) reports earnings for the quarter ended March 31, 2009 of $7.4 million or $0.49 per basic share compared to $6.5 million or $0.43 per basic share earned during the quarter ended December 31, 2008 and $8.5 million or $0.57 per basic share earned during the first quarter of 2008.  The increase from prior quarter resulted from a $1.6 million decrease in provision for loan losses as the loan portfolio and net charge-offs declined, $0.5 million in securities gains from repositioning of the investment portfolio, and a $1.7 million increase in gains on sales of loans resulting from increased refinancing by consumers of residential real estate.  The decrease from prior year first quarter was primarily the result of a $1.8 million decrease in net interest income as interest rates remain at historically low levels.
 
CTBI continues to maintain a significantly higher level of capital than required by regulatory authorities to be designated as well-capitalized.  On March 31, 2009, our Tangible Common Equity/Tangible Assets Ratio remained significantly higher than our peer institutions at 8.34%, our Tier 1 Leverage Ratio of 10.38% was 538 basis points higher than the 5.00% required, our Tier 1 Risk-Based Capital Ratio of 13.08% was 708 basis points higher than the required 6.00%, and our Total Risk-Based Capital Ratio of 14.33% was 433 basis points higher than the 10.00% regulatory requirement for this designation.

First Quarter 2009 Highlights

v  
CTBI's basic earnings per share increased 14.0% from prior quarter and decreased 14.0% from prior year first quarter as we continue to successfully operate within challenging economic conditions.  Our prior quarter earnings were impacted by the other than temporary impairment charge of $1.1 million based upon the market value of Freddie Mac and Fannie Mae trust preferred pass-through auction rate securities, as well as a $1.1 million decline in the fair value of mortgage servicing rights.

v  
Pressure continued on our net interest margin due to the current interest rate environment and economic conditions.  Our net interest margin for the quarter ended March 31, 2009 decreased 8 basis points from prior quarter and 39 basis points from prior year.  Net interest income decreased $0.7 million and $1.8 million from prior quarter and prior year as average earning assets increased by $37.9 million and $105.2 million, respectively.

v  
Noninterest income for the first quarter 2009, excluding gains and losses on securities, increased 22.4% over prior quarter and 16.4% over prior year first quarter.  The quarter over quarter increase included a $1.5 million increase in gains on sales of loans and a positive $0.8 million variance in the fair value of mortgage servicing rights.

v  
During the quarter, CTBI did a small repositioning of our investment portfolio.  Gains on sales of securities for the 1st quarter 2009 were $519 thousand, and the reinvestment of the proceeds allowed us to increase the yield in the portfolio while only slightly increasing the overall duration of the portfolio.

v  
Noninterest expense increased 7.9% from prior quarter and 12.1% from prior year first quarter primarily due to increases in legal, other real estate owned, insurance, and repossession expenses from increased collection activity, as well as increased personnel expense.

v  
Nonperforming loans remained relatively flat from December 31, 2008 to March 31, 2009 at $52.2 million.  Nonperforming assets (nonperforming loans plus OREO) increased $4.7 million from prior quarter-end, December 31, 2008, and $17.3 million from prior year quarter-end, March 31, 2008.

v  
Our loan portfolio decreased an annualized 2.3% during the quarter with a $13.0 million decline, primarily in the residential loan portfolio due to the high level of refinancing activity from portfolio adjustable rate loans to secondary market long-term fixed rate loans.  Loan growth from prior year was $83.8 million or 3.7%.

v  
Our investment portfolio decreased $2.2 million for the quarter and $40.2 million year over year.

v  
Our tangible common equity/tangible assets ratio remains strong at 8.34%.
 
Net Interest Income
 
Our quarterly net interest margin declined 8 basis points from prior quarter and 39 basis points from prior year first quarter as repricing of deposits in our asset sensitive balance sheet is slower than the repricing of loans.  Net interest income for the quarter decreased 2.7% from prior quarter and 7.0% from prior year first quarter, although average earning assets increased 1.4% and 3.9%, respectively, for the same periods.  The yield on average earnings assets decreased 25 basis points from prior quarter and 123 basis points from prior year in comparison to the 20 basis point and 101 basis point decreases in the cost of interest bearing funds during the same periods.

Noninterest Income
 
As discussed above, noninterest income for the first quarter 2009, excluding gains and losses on securities, increased 22.4% over prior quarter and 16.4% over prior year first quarter.  The increases in noninterest income quarter over quarter and year over year resulted primarily from increased gains on sales of residential real estate loans and positive variances in the fair value of mortgage servicing rights.  Gains on sales of securities for the 1st quarter 2009 were $0.5 million, while 4th quarter 2008 was impacted by an other than temporary impairment charge of $1.1 million based upon the market value of Freddie Mac and Fannie Mae trust preferred pass-through auction rate securities.

Noninterest Expense
 
  Noninterest expense for the quarter increased 7.9% from prior quarter and 12.1% from prior year first quarter.  Personnel expense increased $0.6 million over prior quarter and prior year, and legal, other real estate owned, insurance and repossession expenses increased approximately $1.1 million compared to the same period 2008 and $0.6 million from prior quarter due to increased collection activity.

Balance Sheet Review
 
CTBI’s total assets at $3.0 billion increased 2.3% from prior quarter and 4.1% from prior year.  Loans outstanding at March 31, 2009 were $2.3 billion reflecting an annualized 2.3% decline during the quarter and a 3.7% growth from March 31, 2008.  CTBI's investment portfolio, however, decreased an annualized 3.0% from prior quarter and 12.1% from prior year.  Federal funds sold and deposits in other banks increased $76.3 million quarter over quarter and $67.5 million year over year.  Deposits, including repurchase agreements, at $2.5 billion increased an annualized 7.0% from prior quarter and 3.2% from prior year.
 
Shareholders’ equity at March 31, 2009 was $313 million compared to $308.2 million at December 31, 2008 and $306.8 at March 31, 2008.  CTBI's annualized dividend yield to shareholders as of March 31, 2009 was 4.49%.

Asset Quality
 
Nonperforming loans remained relatively flat during the first quarter 2009.  CTBI's total nonperforming loans were $52.2 million at March 31, 2009 and December 31, 2008 and $42.6 million at March 31, 2008.  Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss.
 
Foreclosed properties increased during the first quarter 2009 to $15.2 million from the $10.4 million at December 31, 2008 and the $7.4 million at March 31, 2008, as the legal system remains strained due to current economic conditions and CTBI continues working through a prolonged foreclosure process.  Sales of foreclosed properties during the first quarter 2009 totaled $0.5 million while new foreclosed properties totaled $5.5 million.  Our nonperforming loans and foreclosed properties remain concentrated in our Central Kentucky Region.
 
Net loan charge-offs for the quarter of $2.2 million, or 0.38% of average loans annualized, was a decrease from prior quarter's 0.45% of average loans annualized but an increase from the 0.33% for prior year first quarter.  Allocations to loan loss reserve were $2.0 million for the quarter ended March 31, 2009 compared to $3.6 million for the quarter ended December 31, 2008 and $2.4 million for the quarter ended March 31, 2008.  Our loan loss reserve as a percentage of total loans outstanding at March 31, 2009 remained at 1.31% from December 31, 2008, but increased from the 1.27% at March 31, 2008.  The adequacy of our loan loss reserve is analyzed quarterly and adjusted as necessary with a focus on maintaining appropriate reserves for potential losses.

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 $3.0 billion, is headquartered in Pikeville, Kentucky and has 71 banking locations across eastern, northeastern, central, and south central Kentucky, six banking locations in southern West Virginia, and five trust offices across Kentucky.

Additional information follows.

 
 
 


Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
March 31, 2009
(in thousands except per share data)
                         
               
 Three
  
 Three
  
 Three
               
 Months
  
 Months
  
 Months
               
 Ended
  
Ended
  
 Ended
               
 March 31, 2009
  
 December 31, 2008
  
 March 31, 2008
Interest income
              
 $                       37,676
  
 $                       39,557
  
 $                       44,680
Interest expense
              
                            13,202
  
                            14,409
  
                            18,372
Net interest income
            
                           24,474
  
                            25,148
  
                           26,308
Loan loss provision
            
                               1,981
  
                             3,560
  
                             2,369
                         
Gains on sales of loans
            
                               1,931
  
                                  251
  
                                 546
Deposit service charges
            
                             4,949
  
                             5,545
  
                             5,099
Trust revenue
              
                               1,162
  
                               1,180
  
                                1,191
Loan related fees
            
                                 748
  
                                  (19)
  
                                 299
Securities gains
              
                                  519
  
                            (1,053)
  
                                 (50)
Other noninterest income
            
                              1,444
  
                              1,408
  
                              1,658
Total noninterest income
            
                            10,753
  
                              7,312
  
                             8,743
                         
Personnel expense
            
                             11,268
  
                            10,625
  
                              10,711
Occupancy and equipment
            
                             2,923
  
                             2,839
  
                             2,679
Amortization of core deposit intangible
            
                                  159
  
                                  158
  
                                  158
Other noninterest expense
            
                             8,072
  
                              7,166
  
                             6,453
Total noninterest expense
            
                           22,422
  
                           20,788
  
                            20,001
                         
Net income before taxes
            
                            10,824
  
                               8,112
  
                             12,681
Income taxes
              
                              3,461
  
                              1,627
  
                              4,136
Net income
              
 $                         7,363
  
 $                         6,485
  
 $                         8,545
                         
Memo: TEQ interest income
            
 $                       37,967
  
 $                       39,872
  
 $                       45,047
                         
Average shares outstanding
            
15,076
  
15,065
  
15,000
Basic earnings per share
            
 $                           0.49
  
 $                           0.43
  
 $                            0.57
Diluted earnings per share
            
 $                           0.48
  
 $                           0.43
  
 $                            0.57
Dividends per share
            
 $                           0.30
  
 $                           0.30
  
 $                            0.29
                         
Average balances:
                      
Loans, net of unearned income
            
 $                  2,352,178
  
 $                  2,336,535
  
    $                   2,239,608
Earning assets
              
                      2,784,261
  
                   2,746,404
  
                     2,679,069
Total assets
              
                      2,991,982
  
                     2,959,249
  
                     2,900,533
Deposits
              
                      2,363,123
  
                       2,332,311
  
                      2,288,910
Interest bearing liabilities
            
                       2,190,415
  
                       2,170,691
  
                       2,142,185
Shareholders' equity
            
                         313,680
  
                        305,702
  
                         306,961
                         
Performance ratios:
                      
Return on average assets
            
1.00%
  
0.87%
  
1.18%
Return on average equity
            
9.52%
  
8.44%
  
11.20%
Yield on average earning assets (tax equivalent)
            
5.53%
  
5.78%
  
6.76%
Cost of interest bearing funds (tax equivalent)
            
2.44%
  
2.64%
  
3.45%
Net interest margin (tax equivalent)
            
3.61%
  
3.69%
  
4.00%
Efficiency ratio (tax equivalent)
            
64.06%
  
61.45%
  
56.39%
                         
Loan charge-offs
            
 $                         3,059
  
 $                          3,414
  
 $                          2,410
Recoveries
              
                               (856)
  
                               (767)
  
                               (586)
Net charge-offs
              
 $                         2,203
  
 $                         2,647
  
 $                          1,824
                         
Market Price:
                        
High
              
 $                         37.17
  
 $                         37.22
  
 $                          30.87
Low
              
22.55
  
23.05
  
23.38
Close
              
26.75
  
36.75
  
29.30

 
 
 

Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
March 31, 2009
(in thousands except per share data)
 
               
 As of
  
 As of
  
 As of
               
 March 31, 2009
  
 December 31, 2008
  
March 31, 2008
Assets:
                        
Loans, net of unearned
            
 $                 2,335,607
  
 $                  2,348,651
  
 $                  2,251,846
Loan loss reserve
            
                         (30,599)
  
                          (30,821)
  
                         (28,599)
Net loans
              
                     2,305,008
  
                      2,317,830
  
                     2,223,247
Loans held for sale
            
                             3,085
  
                                 623
  
                               1,310
Securities AFS
              
                        267,003
  
                        267,376
  
                         299,831
Securities HTM
              
                           23,782
  
                           25,597
  
                             31,137
Other equity investments
            
                           29,045
  
                           29,040
  
                           28,064
Other earning assets
            
                         129,570
  
                           53,253
  
                           62,049
Cash and due from banks
            
                           86,646
  
                           89,576
  
                            85,414
Premises and equipment
            
                            51,280
  
                            51,590
  
                           52,823
Goodwill and core deposit intangible
            
                            66,183
  
                            66,341
  
                            66,817
Other assets
              
                           60,597
  
                           53,305
  
                           53,792
Total Assets
              
 $                  3,022,199
  
 $                  2,954,531
  
$                 2,904,484
                         
Liabilities and Equity:
                      
NOW accounts
              
 $                        20,170
  
 $                       21,739
  
  $                      18,691
Savings deposits
            
                        646,744
  
                          615,041
  
                        650,686
CD's >=$100,000
              
                        464,265
  
                        463,973
  
                        439,430
Other time deposits
            
                         783,165
  
                         780,721
  
                        762,727
Total interest bearing deposits
            
                       1,914,344
  
                       1,881,474
  
                       1,871,534
Noninterest bearing deposits
            
                        469,096
  
                        450,360
  
                        434,033
Total deposits
              
                     2,383,440
  
                      2,331,834
  
                     2,305,567
Repurchase agreements
            
                         148,707
  
                         157,422
  
                         148,739
Other interest bearing liabilities
            
                         148,546
  
                         133,560
  
                           110,710
Noninterest bearing liabilities
            
                           28,892
  
                           23,509
  
                            32,619
Total liabilities
              
                     2,709,585
  
                     2,646,325
  
                     2,597,635
Shareholders' equity
            
                          312,614
  
                        308,206
  
                        306,849
Total Liabilities and Equity
            
 $                  3,022,199
  
 $                  2,954,531
  
 $                 2,904,484
                         
Ending shares outstanding
            
                            15,076
  
                            15,066
  
                            14,979
Memo: Market value of HTM securities
            
 $                        24,150
  
 $                       25,496
  
 $                        31,384
                         
90 days past due loans
            
 $                        12,760
  
 $                       11,245
  
 $                        14,365
Nonaccrual loans
            
                           39,406
  
                           40,945
  
                           28,239
Restructured loans
            
                                     0
  
                                     0
  
                                    0
Foreclosed properties
            
                             15,176
  
                            10,425
  
                             7,425
                         
Tier 1 leverage ratio
            
10.38%
  
10.37%
  
10.49%
Tier 1 risk based ratio
            
13.08%
  
13.05%
  
13.33%
Total risk based ratio
            
14.33%
  
14.30%
  
14.58%
Tangible common equity/tangible assets ratio
            
8.34%
  
8.37%
  
8.46%
FTE employees
              
                                 996
  
                                 986
  
                                 996

 
 
 

Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
March 31, 2009
(in thousands except per share data)
 
Community Trust Bancorp, Inc. reported earnings for the three months ending March 31, 2009 and 2008 as follows:
    
                     
               
 Three Months Ended
               
March 31
               
2009
  
2008
Net income
              
 $                          7,363
  
 $                         8,545
                     
Basic earnings per share
            
 $                            0.49
  
 $                           0.57
                     
Diluted earnings per share
            
 $                            0.48
  
 $                           0.57
                     
Average shares outstanding
            
15,076
  
15,000
                     
Total assets (end of period)
            
 $                   3,022,199
  
 $                  2,904,484
                     
Return on average equity
            
9.52%
  
11.20%
                     
Return on average assets
            
1.00%
  
1.18%
                     
Provision for loan losses
            
 $                           1,981
  
 $                         2,369
                     
Gains on sales of loans
            
 $                           1,931
  
 $                            546