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Section 1: 8-K (CTBI MARCH 31, 2016 EARNINGS RELEASE 8-K)

 


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549


FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
March 31, 2016


Community Trust Bancorp, Inc.
(Exact name of registrant as specified in its charter)


Kentucky
61-0979818
(State or other jurisdiction of
(IRS Employer Identification Number)
incorporation or organization)
 
   
346 North Mayo Trail
 
Pikeville, Kentucky
41501
(Address of principal executive offices)
(Zip code)


 (606) 432-1414
(Registrant's telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[   ] Soliciting material pursuant to Rule 425 under the Securities Act (17 CFR 240.14a-12)
[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 

 

 
Item 2.02 – Results of Operations and Financial Condition

On April 20, 2016, Community Trust Bancorp, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2016.  A copy of this press release is being furnished to the Securities and Exchange Commission pursuant to Item 2.02 – Results of Operations and Financial Condition and Item 7.01 – Regulation FD Disclosure of Form 8-K and is attached hereto as Exhibit 99.1.  The information in this Form 8-K and in Exhibit 99.1 attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.

Item 9.01 – Financial Statements and Exhibits

(d) Exhibits

The following exhibit is filed with this report:

99.1
Press Release dated April 20, 2016


 


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


   
COMMUNITY TRUST BANCORP, INC.
     
Date:
April 20, 2016
By:
     
   
/s/ Jean R. Hale
   
Jean R. Hale
   
Chairman, President and Chief Executive Officer
 
 


 
Exhibit Index

Exhibit No.
Description
   
99.1
Press Release dated April 20, 2016

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Section 2: EX-99.1 (CTBI MARCH 31, 2016 EARNINGS RELEASE 8-K EXHIBIT 99.1)

Exhibit 99.1

FOR IMMEDIATE RELEASE
April 20, 2016

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 2016

Earnings Summary
                 
(in thousands except per share data)
 
1Q
2016
   
4Q
2015
   
1Q
2015
 
Net income
 
$
11,602
   
$
11,870
   
$
10,938
 
Earnings per share
 
$
0.66
   
$
0.68
   
$
0.63
 
Earnings per share – diluted
 
$
0.66
   
$
0.68
   
$
0.63
 
                         
Return on average assets
   
1.20
%
   
1.22
%
   
1.18
%
Return on average equity
   
9.63
%
   
9.91
%
   
9.70
%
Efficiency ratio
   
58.63
%
   
56.35
%
   
58.66
%
Tangible common equity
   
11.01
%
   
10.68
%
   
10.60
%
                         
Dividends declared per share
 
$
0.310
   
$
0.310
   
$
0.300
 
Book value per share
 
$
27.67
   
$
27.12
   
$
26.17
 
                         
Weighted average shares
   
17,513
     
17,464
     
17,400
 
Weighted average shares – diluted
   
17,533
     
17,516
     
17,451
 

Community Trust Bancorp, Inc. (NASDAQ-CTBI) reports earnings for the first quarter 2016 of $11.6 million, or $0.66 per basic share, compared to $10.9 million, or $0.63 per basic share, earned during the first quarter 2015 and $11.9 million, or $0.68 per basic share, earned during the fourth quarter 2015.

1st Quarter 2016 Highlights

v
Our loan portfolio increased $142.8 million from March 31, 2015 and $15.3 million during the quarter.

v
Our investment portfolio decreased $45.4 million from March 31, 2015 and $14.0 million during the quarter.

v
Deposits, including repurchase agreements, increased $109.2 million from March 31, 2015 and $61.3 million during the quarter.

v
Nonperforming loans at $27.0 million decreased $8.1 million from March 31, 2015 and $1.6 million from December 31, 2015.  Nonperforming assets at $66.1 million decreased $7.9 million from March 31, 2015 and $3.4 million from December 31, 2015.

v
Net loan charge-offs for the quarter ended March 31, 2016 were $1.5 million, or 0.21% of average loans annualized, compared to $1.7 million, or 0.26%, experienced for the first quarter 2015 and $1.4 million, or 0.19%, for the fourth quarter 2015.

Net Interest Income

Net interest income for the quarter of $33.3 million was an increase of $0.4 million, or 1.3%, from prior year first quarter and $0.1 million, or 0.4%, from prior quarter.  Our net interest margin decreased 13 basis points and increased 2 basis points during the respective time periods.  Average earning assets increased $139.7 million, or 4.0%, from first quarter 2015 and $41.8 million, or 1.2%, from prior quarter, while our yield on average earning assets decreased 10 basis points and increased 4 basis points, respectively, during these time periods.  The cost of interest bearing funds increased 4 basis points from prior year first quarter and 1 basis points from prior quarter.  Our ratio of average loans to deposits, including repurchase agreements, for the quarter ended March 31, 2016 was 88.4% compared to 86.6% for the quarter ended March 31, 2015 and 87.5% for the quarter ended December 31, 2015.

Noninterest Income

Noninterest income for the quarter ended March 31, 2016 of $11.0 million was an increase of $0.2 million, or 2.2%, from prior year same quarter but a decrease of $0.8 million, or 7.1%, from prior quarter.  The increase from prior year same quarter was primarily due to a $0.3 million increase in deposit service charges. The decrease in noninterest income from prior quarter was impacted by decreases in gains on sales of loans ($0.1 million), deposit service charges ($0.5 million), trust revenue ($0.1 million), and loan related fees ($0.5 million), partially offset by $0.1 million in securities gains compared to $0.2 million in securities losses in the prior quarter.  The decrease in deposit related fees was primarily seasonal.  Loan related fees decreased from prior year and prior quarter as a result of fluctuations in the fair value adjustments of our mortgage servicing rights ($0.2 million year over year and $0.5 million quarter over quarter).

Noninterest Expense

Noninterest expense for the quarter ended March 31, 2016 of $26.2 million was an increase of $0.4 million, or 1.6%, from prior year first quarter and $0.5 million, or 1.8%, from prior quarter.  The increase in noninterest expense was primarily due to increases in personnel expense ($0.5 million year over year and $0.8 million quarter over quarter).  Personnel expense year over year was impacted by a $0.3 million increase in salaries, a $0.2 million increase in bonuses and incentives, and a $0.2 million increase in the cost of group medical and life insurance.  The year over year increase was partially offset by a $0.4 million decline in data processing expense.  Quarter over quarter personnel expense was impacted a $0.7 million increase in bonuses and incentives and a $0.3 million increase in payroll taxes.  The quarter over quarter increase in bonuses and incentives was due to a true up in the fourth quarter 2015 that resulted in lower than normal expense for the quarter.  This increase was partially offset by a $0.5 million decrease in net other real estate owned expense.

Balance Sheet Review

CTBI’s total assets at $3.9 billion increased $120.5 million, or 3.2%, from March 31, 2015 but decreased $24.1 million, or an annualized 2.5%, during the quarter.  Loans outstanding at March 31, 2016 were $2.9 billion, increasing $142.8 million, or 5.2%, from March 31, 2015 and $15.3 million, or an annualized 2.1%, during the quarter.  We experienced growth during the quarter of $18.6 million in the indirect loan portfolio, partially offset by decreases of $2.8 million in the residential loan portfolio, $0.2 million in the commercial loan portfolio, and $0.3 million in the consumer direct loan portfolio.  CTBI’s investment portfolio decreased $45.4 million, or 7.2%, from March 31, 2015 and $14.0 million, or an annualized 9.4%, during the quarter.  Cash flows generated from the decline in the investment portfolio year over year were utilized to support loan growth.  Deposits, including repurchase agreements, at $3.3 billion increased $109.2 million, or 3.4%, from March 31, 2015 and $61.3 million, or an annualized 7.6%, from prior quarter.

Shareholders’ equity at March 31, 2016 was $485.6 million compared to $457.4 million at March 31, 2015 and $475.6 million at December 31, 2015.  CTBI’s annualized dividend yield to shareholders as of March 31, 2016 was 3.51%.

Asset Quality

CTBI’s total nonperforming loans were $27.0 million at March 31, 2016, a 23.1% decrease from the $35.1 million at March 31, 2015 and a 5.7% decrease from the $28.6 million at December 31, 2015.  Loans 90+ days past due decreased $3.5 million during the quarter while nonaccrual loans increased $1.9 million.  Loans 30-89 days past due at $19.1 million was an increase of $4.7 million from December 31, 2015.  Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss.  Impaired loans, loans not expected to meet contractual principal and interest payments other than insignificant delays, at March 31, 2016 totaled $59.5 million, a $3.0 million increase from the $56.5 million at March 31, 2015 and a $9.6 million increase from the $49.9 million at December 31, 2015.

Our level of foreclosed properties at $39.0 million at March 31, 2016 was a slight increase from $38.7 million at March 31, 2015 but a decrease from the $40.7 million at December 31, 2015.  Sales of foreclosed properties for the quarter ended March 31, 2016 totaled $2.8 million while new foreclosed properties totaled $1.3 million.  At March 31, 2016, the book value of properties under contracts to sell was $3.3 million; however, the closings had not occurred at quarter-end.

Net loan charge-offs for the quarter ended March 31, 2016 were $1.5 million, or 0.21% of average loans annualized, compared to $1.7 million, or 0.26%, experienced for the first quarter 2015 and $1.4 million, or 0.19%, for the fourth quarter 2015.  Of the net charge-offs for the quarter, $0.4 million were in commercial loans, $0.6 million were in indirect auto loans, $0.3 million were in residential real estate mortgage loans, and $0.2 million were in consumer direct loans.  Allocations to loan loss reserves were $1.8 million for the quarter ended March 31, 2016 compared to $1.9 million for the quarters ended March 31, 2015 and December 31, 2015.  Our reserve coverage (allowance for loan and lease loss reserve to nonperforming loans) at March 31, 2016 was 134.7% compared to 98.7% at March 31, 2015 and 126.2% at December 31, 2015.  Our loan loss reserve as a percentage of total loans outstanding remained at 1.26% at March 31, 2016 from March 31, 2015 and December 31, 2015.

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. Community Trust Bancorp, Inc.’s (“CTBI”) 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, 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, changes in laws and regulations, competition, and 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; and the resolution of legal  proceedings and related matters.  In addition, the banking industry in general is subject to various monetary, operational,  and fiscal policies and regulations, which include, but are not limited to, those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, 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 $3.9 billion, is headquartered in Pikeville, Kentucky and has 70 banking locations across eastern, northeastern, central, and south central Kentucky, six banking locations in southern West Virginia, four banking locations in northeastern Tennessee, four trust offices across Kentucky, and one trust office in Tennessee.

Additional information follows.
 

Community Trust Bancorp, Inc.
 
Financial Summary (Unaudited)
 
 March 31, 2016  
(in thousands except per share data and # of employees)
 
                   
   
Three
   
Three
   
Three
 
   
Months
   
Months
   
Months
 
   
Ended
   
Ended
   
Ended
 
   
March 31, 2016
   
December 31, 2015
   
March 31, 2015
 
Interest income
 
$
36,527
   
$
36,300
   
$
35,725
 
Interest expense
   
3,203
     
3,105
     
2,820
 
Net interest income
   
33,324
     
33,195
     
32,905
 
Loan loss provision
   
1,765
     
1,910
     
1,901
 
                         
Gains on sales of loans
   
316
     
403
     
290
 
Deposit service charges
   
5,845
     
6,306
     
5,582
 
Trust revenue
   
2,275
     
2,384
     
2,239
 
Loan related fees
   
611
     
1,074
     
864
 
Securities gains (losses)
   
68
     
(248
)
   
144
 
Other noninterest income
   
1,856
     
1,891
     
1,617
 
Total noninterest income
   
10,971
     
11,810
     
10,736
 
                         
Personnel expense
   
14,133
     
13,321
     
13,645
 
Occupancy and equipment
   
2,772
     
2,643
     
2,864
 
Data processing expense
   
1,569
     
1,539
     
1,932
 
FDIC insurance premiums
   
583
     
584
     
606
 
Other noninterest expense
   
7,185
     
7,691
     
6,771
 
Total noninterest expense
   
26,242
     
25,778
     
25,818
 
                         
Net income before taxes
   
16,288
     
17,317
     
15,922
 
Income taxes
   
4,686
     
5,447
     
4,984
 
Net income
 
$
11,602
   
$
11,870
   
$
10,938
 
                         
Memo: TEQ interest income
 
$
37,058
   
$
36,797
   
$
36,238
 
                         
Average shares outstanding
   
17,513
     
17,464
     
17,400
 
Diluted average shares outstanding
   
17,533
     
17,516
     
17,451
 
Basic earnings per share
 
$
0.66
   
$
0.68
   
$
0.63
 
Diluted earnings per share
 
$
0.66
   
$
0.68
   
$
0.63
 
Dividends per share
 
$
0.310
   
$
0.310
   
$
0.300
 
                         
Average balances:
                       
Loans
 
$
2,878,833
   
$
2,847,128
   
$
2,733,297
 
Earning assets
   
3,620,318
     
3,578,521
     
3,480,600
 
Total assets
   
3,887,581
     
3,844,441
     
3,745,141
 
Deposits, including repurchase agreements
   
3,255,222
     
3,253,160
     
3,155,059
 
Interest bearing liabilities
   
2,624,218
     
2,586,609
     
2,560,596
 
Shareholders' equity
   
484,750
     
475,261
     
457,407
 
                         
Performance ratios:
                       
Return on average assets
   
1.20
%
   
1.22
%
   
1.18
%
Return on average equity
   
9.63
%
   
9.91
%
   
9.70
%
Yield on average earning assets (tax equivalent)
   
4.12
%
   
4.08
%
   
4.22
%
Cost of interest bearing funds (tax equivalent)
   
0.49
%
   
0.48
%
   
0.45
%
Net interest margin (tax equivalent)
   
3.76
%
   
3.74
%
   
3.89
%
Efficiency ratio (tax equivalent)
   
58.63
%
   
56.35
%
   
58.66
%
                         
Loan charge-offs
 
$
2,465
   
$
2,051
   
$
2,636
 
Recoveries
   
(935
)
   
(695
)
   
(894
)
Net charge-offs
 
$
1,530
   
$
1,356
   
$
1,742
 
                         
Market Price:
                       
High
 
$
36.00
   
$
37.15
   
$
36.47
 
Low
 
$
30.89
   
$
33.68
   
$
31.53
 
Close
 
$
35.32
   
$
34.96
   
$
33.16
 
 

Community Trust Bancorp, Inc.
 
Financial Summary (Unaudited)
 
 March 31, 2016  
(in thousands except per share data and # of employees)
 
   
   
As of
   
As of
   
As of
 
   
March 31, 2016
   
December 31, 2015
   
March 31, 2015
 
Assets:
                 
Loans
 
$
2,889,291
   
$
2,873,961
   
$
2,746,482
 
Loan loss reserve
   
(36,329
)
   
(36,094
)
   
(34,606
)
Net loans
   
2,852,962
     
2,837,867
     
2,711,876
 
Loans held for sale
   
2,707
     
1,172
     
1,505
 
Securities AFS
   
580,950
     
594,936
     
626,335
 
Securities HTM
   
1,661
     
1,661
     
1,661
 
Other equity investments
   
22,814
     
22,814
     
22,814
 
Other earning assets
   
112,104
     
141,313
     
88,207
 
Cash and due from banks
   
53,727
     
51,974
     
61,351
 
Premises and equipment
   
48,160
     
48,188
     
49,363
 
Goodwill and core deposit intangible
   
65,742
     
65,781
     
65,914
 
Other assets
   
139,011
     
138,228
     
130,322
 
Total Assets
 
$
3,879,838
   
$
3,903,934
   
$
3,759,348
 
                         
Liabilities and Equity:
                       
NOW accounts
 
$
55,672
   
$
44,567
   
$
36,913
 
Savings deposits
   
1,026,527
     
997,042
     
962,101
 
CD's >=$100,000
   
568,090
     
559,497
     
583,112
 
Other time deposits
   
626,099
     
629,701
     
653,264
 
Total interest bearing deposits
   
2,276,388
     
2,230,807
     
2,235,390
 
Noninterest bearing deposits
   
757,830
     
749,975
     
704,150
 
Total deposits
   
3,034,218
     
2,980,782
     
2,939,540
 
Repurchase agreements
   
259,083
     
251,225
     
244,570
 
Other interest bearing liabilities
   
68,220
     
165,993
     
74,523
 
Noninterest bearing liabilities
   
32,680
     
30,351
     
43,266
 
Total liabilities
   
3,394,201
     
3,428,351
     
3,301,899
 
Shareholders' equity
   
485,637
     
475,583
     
457,449
 
Total Liabilities and Equity
 
$
3,879,838
   
$
3,903,934
   
$
3,759,348
 
                         
Ending shares outstanding
   
17,553
     
17,537
     
17,479
 
Memo: Market value of HTM securities
 
$
1,662
   
$
1,651
   
$
1,653
 
                         
30 - 89 days past due loans
 
$
19,125
   
$
14,401
   
$
17,826
 
90 days past due loans
   
8,534
     
12,046
     
17,798
 
Nonaccrual loans
   
18,446
     
16,563
     
17,264
 
Restructured loans (excluding 90 days past due and nonaccrual)
   
58,404
     
49,283
     
47,148
 
Foreclosed properties
   
38,985
     
40,674
     
38,735
 
Other repossessed assets
   
136
     
183
     
201
 
                         
Common equity Tier 1 capital
   
14.84
%
   
14.58
%
   
14.01
%
Tier 1 leverage ratio
   
12.44
%
   
12.40
%
   
12.16
%
Tier 1 risk-based capital ratio
   
16.97
%
   
16.70
%
   
16.17
%
Total risk based capital ratio
   
18.22
%
   
17.95
%
   
17.41
%
Tangible equity to tangible assets ratio
   
11.01
%
   
10.68
%
   
10.60
%
FTE employees
   
990
     
984
     
1,007
 
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