Community Trust Bancorp, Inc. (NASDAQ-CTBI):
Earnings Summary | |||||
(in thousands except per share data) | 2Q
| 1Q
| 2Q
| YTD
| YTD
|
Net income | $19,404 | $19,313 | $20,271 | $38,717 | $39,999 |
Earnings per share | $1.09 | $1.08 | $1.14 | $2.17 | $2.24 |
Earnings per share - diluted | $1.08 | $1.08 | $1.14 | $2.16 | $2.24 |
Return on average assets | 1.41% | 1.44% | 1.49% | 1.42% | 1.48% |
Return on average equity | 11.72% | 12.03% | 12.75% | 11.87% | 12.25% |
Efficiency ratio | 53.52% | 55.29% | 53.77% | 54.40% | 53.51% |
Tangible common equity | 10.90% | 10.82% | 10.53% | ||
Dividends declared per share | $0.44 | $0.44 | $0.40 | $0.88 | $0.80 |
Book value per share | $36.71 | $36.54 | $35.32 | ||
Weighted average shares | 17,884 | 17,872 | 17,835 | 17,877 | 17,827 |
Weighted average shares - diluted | 17,890 | 17,884 | 17,843 | 17,885 | 17,838 |
Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved earnings for the second quarter 2023 of $19.4 million, or $1.09 per basic share, compared to $19.3 million, or $1.08 per basic share, earned during the first quarter 2023 and $20.3 million, or $1.14 per basic share, earned during the second quarter 2022. Total revenue was $0.2 million above prior quarter and $2.5 million above prior year same quarter. Net interest revenue decreased $0.8 million compared to prior quarter but increased $2.3 million compared to prior year same quarter, and noninterest income increased $1.1 million compared to prior quarter and $0.3 million compared to prior year same quarter. Our provision for credit losses for the quarter increased $0.9 million for the quarter and was $1.9 million higher than second quarter 2022. Noninterest expense decreased $0.9 million compared to prior quarter but was $1.0 million higher than prior year same quarter. Earnings for the six months ended June 30, 2023 were $38.7 million, or $2.17 per basic share, compared to $40.0 million, or $2.24 per basic share for the six months ended June 30, 2022.
2nd Quarter 2023 Highlights
- Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter, as our net interest margin decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter.
- Provision for credit losses at $2.0 million for the quarter increased $0.9 million from prior quarter and $1.9 million from prior year same quarter.
- Our loan portfolio at $3.9 billion increased $152.3 million, an annualized 16.2%, from March 31, 2023 and $371.3 million, or 10.4%, from June 30, 2022.
- We had net loan charge-offs of $674 thousand, or 0.07% of average loans annualized for the second quarter 2023 compared to $414 thousand, or 0.04% of average loans annualized for the first quarter 2023 and $43 thousand, or 0.00% of average loans annualized, for the quarter ended June 30, 2022.
- Our total nonperforming loans decreased to $11.7 million at June 30, 2023 from $12.2 million at March 31, 2023 and $13.8 million at June 30, 2022. Nonperforming assets at $13.8 million decreased $1.2 million from March 31, 2023 and $2.0 million from June 30, 2022.
- Deposits, including repurchase agreements, at $4.7 billion decreased $6.5 million, or an annualized 0.6%, from March 31, 2023 but increased $34.0 million, or 0.7% from June 30, 2022.
- Shareholders’ equity at $660.1 million increased $3.3 million, or an annualized 2.0%, during the quarter and $28.1 million, or 4.4%, from June 30, 2022.
- Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter.
- Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter.
Net Interest Income
Percent Change | ||||||||
2Q 2023
| ||||||||
($ in thousands) | 2Q
| 1Q
| 2Q
| 1Q
| 2Q
| YTD
| YTD
| Percent
|
Components of net interest income: | ||||||||
Income on earning assets | $64,827 | $60,995 | $45,352 | 6.3% | 42.9% | $125,822 | $88,879 | 41.6% |
Expense on interest bearing liabilities | 21,748 | 17,079 | 4,562 | 27.3% | 376.7% | 38,827 | 8,057 | 381.9% |
Net interest income | 43,079 | 43,916 | 40,790 | (1.9%) | 5.6% | 86,995 | 80,822 | 7.6% |
TEQ | 298 | 298 | 232 | 0.1% | 28.6% | 596 | 467 | 27.6% |
Net interest income, tax equivalent | $43,377 | $44,214 | $41,022 | (1.9%) | 5.7% | $87,591 | $81,289 | 7.8% |
Average yield and rates paid: | ||||||||
Earning assets yield | 5.03% | 4.84% | 3.56% | 3.9% | 41.5% | 4.94% | 3.51% | 40.9% |
Rate paid on interest bearing liabilities | 2.54% | 2.06% | 0.54% | 23.3% | 368.2% | 2.30% | 0.48% | 376.7% |
Gross interest margin | 2.49% | 2.78% | 3.02% | (10.4%) | (17.5%) | 2.64% | 3.03% | (12.8%) |
Net interest margin | 3.35% | 3.49% | 3.20% | (4.1%) | 4.7% | 3.42% | 3.19% | 7.3% |
Average balances: | ||||||||
Investment securities | $1,230,556 | $1,251,948 | $1,452,021 | (1.7%) | (15.3%) | $1,241,193 | $1,468,193 | (15.5%) |
Loans | $3,836,446 | $3,739,443 | $3,538,324 | 2.6% | 8.4% | $3,788,213 | $3,489,652 | 8.6% |
Earning assets | $5,189,716 | $5,131,385 | $5,140,656 | 1.1% | 1.0% | $5,160,712 | $5,137,421 | 0.5% |
Interest-bearing liabilities | $3,435,072 | $3,362,331 | $3,373,741 | 2.2% | 1.8% | $3,398,902 | $3,362,039 | 1.1% |
Net interest income for the quarter of $43.1 million was $0.8 million below prior quarter but $2.3 million above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.35% decreased 14 basis points from prior quarter but increased 15 basis points from prior year same quarter. Our average earning assets increased $58.3 million from prior quarter and $49.1 million from prior year same quarter. Our yield on average earning assets increased 19 basis points from prior quarter and 147 basis points from prior year same quarter, and our cost of funds increased 48 basis points from prior quarter and 200 basis points from prior year same quarter. Money market accounts, certificates of deposit, and other time deposits all experienced significant increases in rates during the quarter. Our net interest income for the six months ended June 30, 2023 was $87.0 million compared to $80.8 million for the six months ended June 30, 2022.
Our ratio of average loans to deposits, including repurchase agreements, was 81.2% for the quarter ended June 30, 2023 compared to 79.8% for the quarter ended March 31, 2023 and 75.2% for the quarter ended June 30, 2022.
Noninterest Income
Percent Change | ||||||||
2Q 2023
| ||||||||
($ in thousands) | 2Q
| 1Q
| 2Q
| 1Q
| 2Q
| YTD
| YTD
| Percent
|
Deposit related fees | $7,513 | $7,287 | $7,263 | 3.1% | 3.4% | $14,800 | $14,009 | 5.6% |
Trust revenue | 3,351 | 3,079 | 3,198 | 8.9% | 4.8% | 6,430 | 6,446 | (0.2%) |
Gains on sales of loans | 115 | 121 | 519 | (5.3%) | (77.9%) | 236 | 1,116 | (78.9%) |
Loan related fees | 1,197 | 845 | 1,415 | 41.7% | (15.4%) | 2,042 | 3,477 | (41.3%) |
Bank owned life insurance revenue | 735 | 858 | 702 | (14.4%) | 4.7% | 1,593 | 1,393 | 14.4% |
Brokerage revenue | 388 | 348 | 459 | 11.5% | (15.4%) | 736 | 1,049 | (29.8%) |
Other | 1,457 | 1,144 | 945 | 27.4% | 54.3% | 2,601 | 1,976 | 31.6% |
Total noninterest income | $14,756 | $13,682 | $14,501 | 7.9% | 1.8% | $28,438 | $29,466 | (3.5%) |
Noninterest income for the quarter ended June 30, 2023 of $14.8 million was $1.1 million, or 7.9%, above prior quarter and $0.3 million, or 1.8%, above prior year same quarter. The quarter over quarter increase included a $0.2 million increase in deposit related fees, a $0.3 million increase in trust revenue, and a $0.4 million increase in loan related fees due to the change in the fair market value of our mortgage servicing rights. The year over year increase included a $0.3 million increase in deposit related fees, a $0.2 million increase in trust revenue, and a $0.4 million increase in securities gains, partially offset by a $0.4 million decline in gains on sales of loans and a $0.2 million decline in loan related fees also resulting from the fluctuation in the fair market value of our mortgage servicing rights. Noninterest income for the first six months of 2023 was $28.4 million compared to $29.5 million for the six months ended June 30, 2022.
Noninterest Expense
Percent Change | ||||||||
2Q 2023
| ||||||||
($ in thousands) | 2Q
| 1Q
| 2Q
| 1Q
| 2Q
| YTD
| YTD
| Percent
|
Salaries | $12,732 | $12,633 | $12,219 | 0.8% | 4.2% | $25,365 | $23,958 | 5.9% |
Employee benefits | 5,573 | 6,275 | 6,315 | (11.2%) | (11.7%) | 11,848 | 12,114 | (2.2%) |
Net occupancy and equipment | 2,895 | 3,028 | 2,756 | (4.4%) | 5.1% | 5,923 | 5,610 | 5.6% |
Data processing | 2,383 | 2,303 | 2,095 | 3.5% | 13.8% | 4,686 | 4,296 | 9.1% |
Legal and professional fees | 912 | 816 | 884 | 11.8% | 3.2% | 1,728 | 1,751 | (1.3%) |
Advertising and marketing | 704 | 820 | 659 | (14.1%) | 6.9% | 1,524 | 1,411 | 8.0% |
Taxes other than property and payroll | 433 | 432 | 425 | 0.1% | 1.7% | 865 | 851 | 1.6% |
Net other real estate owned expense | 61 | 119 | 43 | (48.4%) | 43.6% | 180 | 396 | (54.6%) |
Other | 5,332 | 5,464 | 4,582 | (2.4%) | 16.4% | 10,796 | 8,950 | 20.6% |
Total noninterest expense | $31,025 | $31,890 | $29,978 | (2.7%) | 3.5% | $62,915 | $59,337 | 6.0% |
Noninterest expense for the quarter ended June 30, 2023 of $31.0 million was $0.9 million, or 2.7%, below prior quarter but $1.0 million, or 3.5%, above prior year same quarter. The decrease in noninterest expense quarter over quarter was primarily a result of a decrease in the accruals for incentive payments based on our current projected earnings for the year. The year over year increase included a $0.3 million increase in data processing expense, a $0.3 million increase in FDIC insurance premiums, and a $0.1 million increase in occupancy and equipment. A year over year decrease in personnel costs of $0.2 million was the result of reduction in the accruals for incentive payments of $1.3 million, partially offset by increases in salary expense ($0.5 million), group medical and life insurance expense ($0.5 million), and other employee benefits ($0.1 million). Noninterest expense for the first six months of 2023 was $62.9 million compared to $59.3 million for the six months ended June 30, 2022.
Balance Sheet Review
Total Loans |
