Community Trust Bancorp Inc. (CTBI, Financial) filed Quarterly Report for the period ended 2012-03-31.
Commun Trust Bc has a market cap of $496.9 million; its shares were traded at around $32.78 with a P/E ratio of 11.9 and P/S ratio of 2.5. The dividend yield of Commun Trust Bc stocks is 3.9%. Commun Trust Bc had an annual average earning growth of 1.5% over the past 10 years.
Net interest income for the quarter increased 1.3% from prior year and 0.3% from prior quarter with average earning assets increasing 6.1% from prior year and remaining relatively flat to prior quarter. CTBI experienced a 22 basis point decline in its net interest margin for the first quarter 2012 compared to prior year but increased 7 basis points from prior quarter. The yield on average earning assets decreased 45 basis points from prior year first quarter but increased 4 basis points from prior quarter. The decline in yield on earning assets from prior year is the result of a change in our earning asset mix with an increase in our investment portfolio as loan demand remains tepid. Loans represented 77.1% of our average earning assets for the quarter ended March 31, 2012 compared to 82.9% for the quarter ended March 31, 2011. The cost of interest bearing funds decreased 29 basis points from prior year first quarter and 4 basis points from prior quarter; however, we expect our cost of funds to increase during the next three quarters from our Hoops CD product. Our Hoops CD customers received a 100 basis point increase in rate as a result of the University of Kentucky s NCAA Championship win. This increase in rate will result in an increase in interest paid of approximately $0.6 million pre-tax in each of the 2nd and 3rd quarters of 2012 and $0.2 million pre-tax in the 4th quarter of 2012. We have offered our Hoops CD product for over 15 years, and having paid this premium in 1996 and 1998 as well as this year, we believe this product provides a marketing and promotional benefit to our company and helps to retain and serve our customers.
When foreclosed properties are acquired, appraisals are obtained and the properties are booked at the current market value less expected sales expense. Additionally, periodic updated appraisals are obtained on unsold foreclosed properties. When an updated appraisal reflects a market value below the current book value, a charge is booked to current earnings to reduce the property to its new market value less expected sales expense. There were 35 properties reappraised during the first quarter of 2012 totaling $4.4 million. Of these, eleven were written down by a total of $0.2 million or 4.0%. Charges during the quarters ended March 31, 2011 and December 31, 2011 were $0.4 million and $3.6 million, respectively. Our policy for determining the frequency of periodic reviews is based upon consideration of the specific properties and the known or perceived market fluctuations in a particular market and is typically between 12 and 18 months. Sixty-nine percent of our OREO properties have been reappraised within the past 12 months. Our nonperforming loans and foreclosed properties remain primarily concentrated in our Central Kentucky Region. Management anticipates that our foreclosed properties will remain elevated as we work through current market conditions.
We continue to grow our shareholders equity while also providing an annual dividend yield for the quarter ended March 31, 2012 of 3.87% to shareholders. Shareholders equity increased 8.8% from March 31, 2011 to $375.0 million at March 31, 2012. Our primary source of capital growth is the retention of earnings. Cash dividends were $0.31 per share for March 31, 2012 and $0.305 per share for March 31, 2011. We retained 59.7% of our earnings for the first three months of 2012 compared to 50.0% for the first three months of 2011.
Other Real Estate Owned – When foreclosed properties are acquired, appraisals are obtained and the properties are booked at the current market value less expected sales costs. Additionally, periodic updated appraisals are obtained on unsold foreclosed properties. When an updated appraisal reflects a market value below the current book value, a charge is booked to current earnings to reduce the property to its new market value less expected sales costs. Our policy for determining the frequency of periodic reviews is based upon consideration of the specific properties and the known or perceived market fluctuations in a particular market and is typically between 12 and 18 months. All revenues and expenses related to the carrying of other real estate owned are recognized by a charge to income.
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Commun Trust Bc has a market cap of $496.9 million; its shares were traded at around $32.78 with a P/E ratio of 11.9 and P/S ratio of 2.5. The dividend yield of Commun Trust Bc stocks is 3.9%. Commun Trust Bc had an annual average earning growth of 1.5% over the past 10 years.
Highlight of Business Operations:
Noninterest income increased 4.2% for the quarter ended March 31, 2012 compared to the same period in 2011 with increases in gains on sales of loans and loan related fees but decreased 3.2% compared to prior quarter as these increases were offset by a decline in deposit service charges.Net interest income for the quarter increased 1.3% from prior year and 0.3% from prior quarter with average earning assets increasing 6.1% from prior year and remaining relatively flat to prior quarter. CTBI experienced a 22 basis point decline in its net interest margin for the first quarter 2012 compared to prior year but increased 7 basis points from prior quarter. The yield on average earning assets decreased 45 basis points from prior year first quarter but increased 4 basis points from prior quarter. The decline in yield on earning assets from prior year is the result of a change in our earning asset mix with an increase in our investment portfolio as loan demand remains tepid. Loans represented 77.1% of our average earning assets for the quarter ended March 31, 2012 compared to 82.9% for the quarter ended March 31, 2011. The cost of interest bearing funds decreased 29 basis points from prior year first quarter and 4 basis points from prior quarter; however, we expect our cost of funds to increase during the next three quarters from our Hoops CD product. Our Hoops CD customers received a 100 basis point increase in rate as a result of the University of Kentucky s NCAA Championship win. This increase in rate will result in an increase in interest paid of approximately $0.6 million pre-tax in each of the 2nd and 3rd quarters of 2012 and $0.2 million pre-tax in the 4th quarter of 2012. We have offered our Hoops CD product for over 15 years, and having paid this premium in 1996 and 1998 as well as this year, we believe this product provides a marketing and promotional benefit to our company and helps to retain and serve our customers.
When foreclosed properties are acquired, appraisals are obtained and the properties are booked at the current market value less expected sales expense. Additionally, periodic updated appraisals are obtained on unsold foreclosed properties. When an updated appraisal reflects a market value below the current book value, a charge is booked to current earnings to reduce the property to its new market value less expected sales expense. There were 35 properties reappraised during the first quarter of 2012 totaling $4.4 million. Of these, eleven were written down by a total of $0.2 million or 4.0%. Charges during the quarters ended March 31, 2011 and December 31, 2011 were $0.4 million and $3.6 million, respectively. Our policy for determining the frequency of periodic reviews is based upon consideration of the specific properties and the known or perceived market fluctuations in a particular market and is typically between 12 and 18 months. Sixty-nine percent of our OREO properties have been reappraised within the past 12 months. Our nonperforming loans and foreclosed properties remain primarily concentrated in our Central Kentucky Region. Management anticipates that our foreclosed properties will remain elevated as we work through current market conditions.
We continue to grow our shareholders equity while also providing an annual dividend yield for the quarter ended March 31, 2012 of 3.87% to shareholders. Shareholders equity increased 8.8% from March 31, 2011 to $375.0 million at March 31, 2012. Our primary source of capital growth is the retention of earnings. Cash dividends were $0.31 per share for March 31, 2012 and $0.305 per share for March 31, 2011. We retained 59.7% of our earnings for the first three months of 2012 compared to 50.0% for the first three months of 2011.
Other Real Estate Owned – When foreclosed properties are acquired, appraisals are obtained and the properties are booked at the current market value less expected sales costs. Additionally, periodic updated appraisals are obtained on unsold foreclosed properties. When an updated appraisal reflects a market value below the current book value, a charge is booked to current earnings to reduce the property to its new market value less expected sales costs. Our policy for determining the frequency of periodic reviews is based upon consideration of the specific properties and the known or perceived market fluctuations in a particular market and is typically between 12 and 18 months. All revenues and expenses related to the carrying of other real estate owned are recognized by a charge to income.
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