Community Trust Bancorp, Inc. Reports Second Quarter 2003 Earnings of $7.1 Million or $0.58 Per Share.Business Editors PIKEVILLE Pikeville may refer to:
Community Trust Bancorp, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CTBI CTBI Churches Together in Britain and Ireland )
Earnings Summary
($ in thousands except per share data)
2Q 1Q 2Q 6 Months 6 Months
2003 2003 2002 2003 2002
-----------------------------------------
Net income $7,064 $6,993 $6,377 $14,057 $12,699
Earnings per share $ 0.58 $ 0.57 $ 0.51 $ 1.14 $ 1.01
Earnings per share (diluted) $ 0.57 $ 0.56 $ 0.50 $ 1.13 $ 1.00
Return on average assets 1.14% 1.15% 1.04% 1.14% 1.03%
Return on average equity 13.27% 13.38% 12.81% 13.33% 12.90%
Efficiency ratio 56.95% 61.81% 57.43% 59.34% 57.72%
Dividends declared per share $ 0.21 $ 0.21 $ 0.19 $ 0.42 $ 0.38
Book value per share $17.47 $17.20 $16.12
Community Trust Bancorp, Inc. (NASDAQ:CTBI) is pleased to report second quarter 2003 earnings of $7.1 million or $0.58 per share. This exceeds by $0.07 per share or 13.7% the $6.4 million or $0.51 per share earned during the same period in 2002 and exceeds by $0.01 per share the $7.0 million or $0.57 per share earned during the first quarter of 2003. Earnings for the six months ended June June: see month. 30, 2003 were $14.1 million or $1.14 per share, a 12.9% increase from the $12.7 million or $1.01 per share earned during the first six months of 2002. The increase in earnings is reflected in the Company's performance ratios. Return on average assets increased 9.6% to 1.14% for the three months ended June 30, 2003 compared to 1.04% for the second quarter of 2002. Return on average assets for the six months ended June 30, 2003 increased 10.7% to 1.14% compared to 1.03% for the six months ended June 30, 2002. Return on average shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. improved 3.6% to 13.27% for the quarter ended June 30, 2003 as compared to 12.81% for the same period in 2002. Return on average shareholders' equity was 13.33% for the six months ended June 30, 2003, a 3.3% increase compared to 12.90% for the six months ended June 30, 2002. CTBI's efficiency ratio improved to 56.95% for the quarter ended June 30, 2003 from the 57.43% for the same period in 2002. Balance Sheet Review The Company's assets increased to $2.5 billion at June 30, 2003 from $2.4 billion at June 30, 2002. The Company continues to meet the challenges of operating in an unpredictable economic environment with the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. uncertainties that restrain the growth usually seen in its banking operations. The Company experienced an increase of $14 million in loans outstanding during the second quarter of 2003; however, commercial loan demand remains relatively weak and the Company continues to experience a decline in its consumer and residential real estate loan portfolios as customers continue to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. existing debt by taking advantage of the low long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. fixed rates available for secondary market loans. The loan portfolio decreased to $1.6 billion from the $1.7 billion at June 30, 2002. Total deposits of $2.1 billion at June 30, 2003 represents an increase in deposits of $49 million from June 30, 2002. The Company continues to have a high level of liquidity since investment opportunities are limited with interest rates at 45-year lows. The Company continues its policy of pricing interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid deposits at the mid-range
Nonperforming loans on June 30, 2003 were $24.1 million, a 26.7% decrease from the $33.0 million at June 30, 2002 and a 5.5% decrease from the $25.6 million at March 31, 2003. Specific reserves are established for all large loans where management believes a loss may occur; therefore, no significant losses are anticipated except for those loans with specific reserve allocations. Foreclosed properties on June 30, 2003 were $3.5 million, a decrease from the $3.7 million reported at March 31, 2003. Net charge-offs for the quarter ended June 30, 2003 were $3.4 million, an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate of 0.8% of average loans, compared to $2.5 million or 0.6% of average loans for the second quarter of 2002 and $1.8 million or 0.4% of average loans for the first quarter of 2003. The significant increase in net charge-offs for the quarter ended June 30, 2003 is primarily due to the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most of one commercial loan customer which resulted in a $1.8 million charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. . Our reserve for losses on loans as a percentage of total loans outstanding at June 30, 2003 remained flat to prior quarter at 1.42% and decreased from 1.45% at June 30, 2002. The Company continues to grow its shareholders' equity while also providing a dividend yield of 3.21% to shareholders. Shareholders' equity of $213.1 million on June 30, 2003 is a 5.6% increase from the $201.7 million on June 30, 2002. The Company continues to be active in its stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program as it continues to believe that during this period of limited investment opportunity that the Company's stock is a good investment. The Company repurchased 98,500 shares during the second quarter of 2003 and has repurchased 194,767 shares since January January: see month. 1, 2003. Net Interest Income Our net interest margin of 3.75% for the quarter ended June 30, 2003 is a 1 basis point increase from the 3.74% for the quarter ended March 31, 2003 and a 36 basis point decrease from the 4.11% for the quarter ended June 30, 2002. Management expects continuing pressure on its net interest margin during this period of historically low interest rates. Noninterest Income Noninterest income for the quarter ended June 30, 2003 of $9.6 million was a 76.1% increase from the $5.4 million earned during the same period in 2002. The increase in noninterest income is primarily the result of increased deposit service charge revenue, increased gains on sales of residential real estate loans due to increased refinancing Refinancing An extension and/or increase in amount of existing debt. activity, and increased gains on sales of securities. Second quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. 2003 earnings were positively impacted by $2.7 million or $0.22 per share and $4.6 million or $0.38 per share, respectively, as a result of increased noninterest income. Gains on the sale of securities contributed $1.0 million or $0.08 per share to earnings for the second quarter 2003 and $1.7 million or $0.14 per share year-to-date. The increase in gains on sales of loans for the second quarter and year-to-date 2003 compared to the same periods in 2002 contributed $0.7 million or $0.06 per share and $1.2 million or $0.09 per share, respectively, to net income. While the increase in residential real estate loan refinancing activity, due to the low interest rate environment, resulted in higher noninterest income from the gains on sales of loans, noninterest income was negatively impacted by charges to our valuation reserve for capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. rights of $0.8 million, $0.4 million, and $0.1 million for the quarters ended June 30, 2003, March 31, 2003, and June 30, 2002, respectively. The impact to earnings per share for the quarter ended June 30, 2003 was $0.04 per share. Noninterest Expense Noninterest expense increased 3.7% from the $16.2 million for the second quarter 2002 to $16.8 million for the second quarter 2003. The increase in noninterest expense from prior year was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to increases in legal and professional fees, operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , and other noninterest expense. Personnel expense decreased in the second quarter 2003 due to the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of a performance-based incentive of $0.8 million. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and . The Corporation'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 Subject to change; dependent upon or granted based on the occurrence of a future, uncertain event. A conditional payment is the payment of a debt or obligation contingent upon the performance of a certain specified act. 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 Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. 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 See demographics. changes on target market populations' savings and financial planning Financial planning Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against needs; industry changes in information technology systems on which we are highly dependent; failure of acquisitions to produce revenue enhancements revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. or cost savings at levels or within the time frames originally anticipated or unforeseen integration difficulties; the adoption by the Corporation of an FFIEC FFIEC Federal Financial Institutions Examination Council policy that provides guidance on the reporting of delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. consumer loans and the timing of associated credit charge-offs for financial institution subsidiaries; and the resolution of legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. 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 Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. , and state regulators, whose policies and regulations could affect the Corporation's results. These statements are representative only on the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the Corporation 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 Pikeville is a city in Pike County, Kentucky, United States. The population was 6,295 at the 2000 census. It is the county seat of Pike CountyGR6. Pike County has a population of approximately 70,000. and has 69 banking locations across eastern and central Kentucky Central Kentucky is sometimes considered the Central and Southern part of the Bluegrass region, the Far Upper Western Eastern Mountain Coal Fields, and the Far Upper Eastern Pennyroyal regions. Its major cities include Lexington and Frankfort. , and 5 banking locations in West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. . Additional information follows.
Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
June 30, 2003
(in thousands except per share data)
Three Three Three
Months Months Months
Ended Ended Ended
6/30/2003 3/31/2003 6/30/2002
----------- ----------- -----------
Interest income $32,688 $32,667 $37,364
Interest expense 11,670 12,139 14,581
----------- ----------- -----------
Net interest income 21,018 20,528 22,783
Loan loss provision 3,585 1,547 3,145
Securities gains 1,587 979 -
Gains on sales of loans 1,595 1,521 472
Deposit service charges 4,300 3,862 2,909
Trust revenue 634 613 576
Insurance commissions 138 102 61
Other noninterest income 1,331 1,469 1,424
----------- ----------- -----------
Total noninterest income 9,585 8,546 5,442
Personnel expense 7,838 9,061 8,395
Occupancy and equipment 2,414 2,300 2,261
Amortization of core deposit
intangible 145 145 145
Other noninterest expense 6,367 6,105 5,363
----------- ----------- -----------
Total noninterest expense 16,764 17,611 16,164
----------- ----------- -----------
Net income before taxes 10,254 9,916 8,916
Income taxes 3,190 2,923 2,539
----------- ----------- -----------
Net income $7,064 $6,993 $6,377
=========== =========== ===========
Memo: TEQ interest income $33,107 $33,065 $37,834
Average shares outstanding 12,253 12,306 12,538
Basic earnings per share $0.58 $0.57 $0.51
Diluted earnings per share $0.57 $0.56 $0.50
Dividends per share $0.21 $0.21 $0.19
Average balances:
Loans, net of unearned income $1,640,312 $1,622,672 $1,669,181
Earning assets 2,290,802 2,268,248 2,269,134
Total assets 2,489,213 2,468,156 2,468,276
Deposits 2,117,223 2,099,854 2,117,433
Interest bearing liabilities 1,926,411 1,915,509 1,940,641
Shareholders' equity 213,481 211,886 199,696
Performance ratios:
Return on average assets 1.14% 1.15% 1.04%
Return on average equity 13.27% 13.38% 12.81%
Yield on average earning assets
(tax equivalent) 5.80% 5.91% 6.69%
Cost of interest bearing funds (tax
equivalent) 2.43% 2.57% 3.01%
Net interest margin (tax
equivalent) 3.75% 3.74% 4.11%
Efficiency ratio 56.95% 61.81% 57.43%
Loan charge-offs $(4,136) $(2,837) $(3,590)
Recoveries 749 1,028 1,093
----------- ----------- -----------
Net charge-offs $(3,387) $(1,809) $(2,497)
Market Price:
High $30.00 $26.64 $26.79
Low 25.25 24.70 21.82
Close 26.16 25.25 25.56
Six Six
Months Months
Ended Ended
6/30/2003 6/30/2002
----------- -----------
Interest income $65,355 $75,865
Interest expense 23,809 30,645
----------- -----------
Net interest income 41,546 45,220
Loan loss provision 5,132 5,886
Securities gains 2,566 -
Gains on sales of loans 3,116 1,331
Deposit service charges 8,162 5,675
Trust revenue 1,247 1,156
Insurance commissions 240 103
Other noninterest income 2,800 2,771
----------- -----------
Total noninterest income 18,131 11,036
Personnel expense 16,899 16,852
Occupancy and equipment 4,714 4,532
Amortization of core deposit intangible 290 290
Other noninterest expense 12,472 11,033
----------- -----------
Total noninterest expense 34,375 32,707
----------- -----------
Net income before taxes 20,170 17,663
Income taxes 6,113 4,964
----------- -----------
Net income $14,057 $12,699
=========== ===========
Memo: TEQ interest income $66,172 $76,821
Average shares outstanding 12,280 12,552
Basic earnings per share $1.14 $1.01
Diluted earnings per share $1.13 $1.00
Dividends per share $0.42 $0.38
Average balances:
Loans, net of unearned income $1,631,541 $1,678,961
Earning assets 2,279,587 2,290,845
Total assets 2,478,742 2,491,637
Deposits 2,108,587 2,132,545
Interest bearing liabilities 1,920,990 1,964,783
Shareholders' equity 212,687 198,448
Performance ratios:
Return on average assets 1.14% 1.03%
Return on average equity 13.33% 12.90%
Yield on average earning assets (tax
equivalent) 5.85% 6.76%
Cost of interest bearing funds (tax equivalent) 2.50% 3.15%
Net interest margin (tax equivalent) 3.75% 4.06%
Efficiency ratio 59.34% 57.72%
Loan charge-offs $(6,973) $(7,392)
Recoveries 1,777 2,024
----------- -----------
Net charge-offs $(5,196) $(5,368)
Market Price:
High $30.00 $26.79
Low 24.70 19.79
Close 26.16 25.56
Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
June 30, 2003
(in thousands except per share data)
As of As of As of
6/30/2003 3/31/2003 6/30/2002
----------- ----------- -----------
Assets:
Loans, net of unearned $1,639,804 $1,625,475 $1,667,955
Loan loss reserve (23,206) (23,008) (24,166)
----------- ----------- -----------
Net loans 1,616,598 1,602,467 1,643,789
Loans held for sale 8,503 4,151 4,129
Securities AFS 466,150 516,939 453,563
Securities HTM 112,870 43,279 57,496
Other earning assets 67,499 69,692 40,181
Cash and due from banks 83,471 77,153 74,827
Premises and equipment 49,498 50,171 50,449
Goodwill and core deposit
intangible 64,241 64,386 65,115
Other assets 38,195 41,614 38,076
----------- ----------- -----------
Total Assets $2,507,025 $2,469,852 $2,427,625
=========== =========== ===========
Liabilities and Equity:
NOW accounts $15,538 $11,784 $14,890
Savings deposits 614,532 623,757 612,814
CD's greater than =$100,000 361,301 354,942 354,143
Other time deposits 791,130 788,717 790,068
----------- ----------- -----------
Total interest bearing deposits 1,782,501 1,779,200 1,771,915
Noninterest bearing deposits 347,570 330,665 309,247
----------- ----------- -----------
Total deposits 2,130,071 2,109,865 2,081,162
Other interest bearing liabilities 145,726 129,227 130,327
Noninterest bearing liabilities 18,170 19,702 14,463
----------- ----------- -----------
Total liabilities 2,293,967 2,258,794 2,225,952
Shareholders' equity 213,058 211,058 201,673
----------- ----------- -----------
Total Liabilities and Equity $2,507,025 $2,469,852 $2,427,625
=========== =========== ===========
Ending shares outstanding 12,197 12,273 12,509
Memo: Market value of HTM
Securities $114,046 $44,385 $59,374
90 days past due loans $5,164 $5,829 $3,690
Nonaccrual loans 17,434 19,463 28,974
Restructured loans 1,546 268 290
Foreclosed properties 3,521 3,723 2,116
Tier 1 leverage ratio 8.35% 8.33% 7.91%
Tier 1 risk based ratio 11.06% 11.06% 10.96%
Total risk based ratio 12.31% 12.31% 12.21%
FTE employees 902 884 872
Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
June 30, 2003
(in thousands except per share data)
Community Trust Bancorp, Inc. reported earnings for the three and six
months ending June 30, 2003 and June 30, 2002 as follows:
Three Months Ended Six Months Ended
June 30 June 30
----------------------- -----------------
2003 2002 2003 2002
----------- ----------- -------- --------
Net income $7,064 $6,377 $14,057 $12,699
Basic earnings per share $0.58 $0.51 $1.14 $1.01
Diluted earnings per share $0.57 $0.50 $1.13 $1.00
Average shares outstanding 12,253 12,538 12,280 12,552
Total assets (end of period) $2,507,025 $2,427,625
Return on average equity 13.27% 12.81% 13.33% 12.90%
Return on average assets 1.14% 1.04% 1.14% 1.03%
Provision for loan losses $3,585 $3,145 $5,132 $5,886
Gains on sales of loans $1,595 $472 $3,116 $1,331
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