Community Trust Bancorp, Inc. Reports Earnings for the 4th Quarter and Year 2024

Published: 2025-01-15 08:16:04 ET CTBI

Community Trust Bancorp, Inc. (NASDAQ-CTBI):

Earnings Summary

(in thousands except per share data)

2024

2023

Year

2024

Year

2023

Net income

$22,493

$22,142

$18,659

$82,813

$78,004

Earnings per share

$1.25

$1.23

$1.04

$4.61

$4.36

Earnings per share - diluted

$1.25

$1.23

$1.04

$4.61

$4.36

Return on average assets

1.47%

1.50%

1.30%

1.41%

1.40%

Return on average equity

11.77%

10.98%

11.31%

11.75%

Efficiency ratio

51.60%

51.75%

55.74%

52.57%

54.29%

Tangible common equity

11.30%

11.79%

11.16%

Dividends declared per share

$0.47

$0.46

$1.86

$1.80

Book value per share

$41.95

$42.14

$39.01

Weighted average shares

17,971

17,962

17,901

17,950

17,887

Weighted average shares - diluted

18,009

17,991

17,926

17,977

17,900

Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved earnings for the fourth quarter 2024 of $22.5 million, or $1.25 per basic share, compared to $22.1 million, or $1.23 per basic share, earned during the third quarter 2024 and $18.7 million, or $1.04 per basic share, earned during the fourth quarter 2023. Total revenue for the quarter was $2.9 million above prior quarter and $9.0 million above prior year same quarter. Net interest revenue for the quarter increased $2.3 million compared to prior quarter and $6.6 million compared to prior year same quarter, and noninterest income increased $0.6 million compared to prior quarter and $2.4 million compared to prior year same quarter. Our provision for credit losses for the quarter decreased $0.1 million from prior quarter but increased $0.8 million from prior year same quarter. Noninterest expense increased $1.3 million compared to prior quarter and $2.1 million compared to prior year same quarter. Net income for the year ended December 31, 2024 was $82.8 million, or $4.61 per basic share, compared to $78.0 million, or $4.36 per basic share, for the year ended December 31, 2023.

4th Quarter 2024 Highlights

Net Interest Income

Percent Change

4Q 2024

Compared to:

($ in thousands)

2024

2023

2024

2023

Year

2024

Year

2023

Percent Change

Components of net interest income:

Income on earning assets

$81,979

$79,814

$73,329

2.7%

11.8%

313,443

$268,650

16.7%

Expense on interest bearing liabilities

32,452

32,615

30,354

(0.5%)

6.9%

127,448

95,540

33.4%

Net interest income

49,527

47,199

42,975

4.9%

15.2%

185,995

173,110

7.4%

TEQ

273

280

297

(2.6%)

(8.0%)

1,139

1,191

(4.3%)

Net interest income, tax equivalent

$49,800

$47,479

$43,272

4.9%

15.1%

187,134

$174,301

7.4%

Average yield and rates paid:

Earning assets yield

5.66%

5.72%

5.43%

(1.0%)

4.2%

5.65%

5.15%

9.8%

Rate paid on interest bearing liabilities

3.18%

3.36%

3.27%

(5.4%)

(2.6%)

3.30%

2.72%

21.2%

Gross interest margin

2.48%

2.36%

2.16%

5.2%

15.1%

2.35%

2.43%

(3.1%)

Net interest margin

3.43%

3.39%

3.19%

1.1%

7.5%

3.36%

3.32%

1.1%

Average balances:

Investment securities

$1,075,698

$1,091,258

$1,144,078

(1.4%)

(6.0%)

1,102,434

$1,200,965

(8.2%)

Loans

$4,399,291

$4,300,652

4,022,547

2.3%

9.4%

4,247,762

3,888,585

9.2%

Earning assets

$5,779,438

$5,570,160

5,377,827

3.8%

7.5%

5,569,948

5,244,128

6.2%

Interest-bearing liabilities

$4,059,061

$3,859,978

3,687,660

5.2%

10.1%

3,867,733

3,514,142

10.1%

Net interest income for the quarter of $49.5 million was $2.3 million, or 4.9%, above prior quarter and $6.6 million, or 15.2%, above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.43% increased 4 basis points from prior quarter and 24 basis points from prior year same quarter. Our quarterly average earning assets increased $209.3 million from prior quarter and $401.6 million from prior year same quarter. Our yield on average earning assets decreased 6 basis points from prior quarter but increased 23 basis points from prior year same quarter, while our cost of funds decreased 18 basis points from prior quarter and 9 basis points from prior year same quarter. Net interest income for the year ended December 31, 2024 was $186.0 million compared to $173.1 million for the year ended December 31, 2023.

Our ratio of average loans to deposits, including repurchase agreements, was 84.4% for the quarter ended December 31, 2024 compared to 85.8% for the quarter ended September 30, 2024 and 81.8% for the quarter ended December 31, 2023.

Noninterest Income

Percent Change

4Q 2024

Compared to:

($ in thousands)

2024

2023

2024

2023

Year

2024

Year

2023

Percent Change

Deposit related fees

$7,619

$7,886

$7,312

(3.4%)

4.2%

29,824

$29,935

(0.4%)

Trust revenue

3,961

3,707

3,318

6.9

19.4%

14,921

13,025

14.6%

Gains on sales of loans

(37.6)

(8.0%)

294

395

(25.6%)

Loan related fees

1,472

813

467

81.2%

215.5%

4,957

3,792

30.7%

Bank owned life insurance revenue

915

1,214

816

(24.6%)

12.1%

5,236

3,517

48.9%

Brokerage revenue

536

563

285

(4.8%)

88.2%

2,272

1,473

54.3%

Other

1,607

1,300

1,473

23.6%

9.1%

5,061

5,522

(8.3%)

Total noninterest income

$16,160

$15,563

$13,725

3.8%

17.7%

62,565

$57,659

8.5%

Noninterest income for the quarter ended December 31, 2024 of $16.2 million was $0.6 million, or 3.8%, above prior quarter and $2.4 million, or 17.7%, above prior year same quarter. Quarter over quarter increases in loan related fees ($0.7 million), trust revenue ($0.3 million), and securities gains ($0.3 million) were offset by decreases in deposit related fees ($0.3 million) and bank owned life insurance revenue ($0.3 million). Year over year increases included loan related fees ($1.0 million), trust fees ($0.6 million), deposit related fees ($0.3 million), securities gains ($0.3 million), and brokerage revenue ($0.2 million). The increase in loan related fees for the quarter resulted primarily from the fluctuation in the fair market value of our mortgage servicing rights. The increase in securities gains for the quarter was primarily the result of the valuation of our Visa Class B stock. Noninterest income for the year 2024 was $62.6 million compared to $57.7 million for the year 2023.

Noninterest Expense

Percent Change

4Q 2024

Compared to:

($ in thousands)

2024

2023

2024

2023

Year

2024

Year

2023

Percent Change

Salaries

$13,310

$13,374

$13,163

(0.5%)

1.1%

$52,757

$51,283

2.9%

Employee benefits

6,883

6,147

5,282

12.0%

30.3%

26,670

22,428

18.9%

Net occupancy and equipment

3,015

3,072

3,045

(1.9%)

(1.0%)

12,204

11,843

3.1%

Data processing

3,181

2,804

2,630

13.4%

20.9%

11,172

9,726

14.9%

Legal and professional fees

1,039

1,024

900

1.4%

15.4%

3,873

3,350

15.6%

Advertising and marketing

821

876

923

(6.3%)

(11.0%)

3,130

3,214

(2.6%)

Taxes other than property and payroll

436

438

421

(0.5%)

3.5%

1,754

1,706

2.8%

Other

5,084

4,777

5,264

6.4%

(3.4%)

19,363

21,840

(11.3%)

Total noninterest expense

$33,769

$32,512

$31,628

3.9%

6.8%

$130,923

$125,390

4.4%

Noninterest expense for the quarter ended December 31, 2024 of $33.8 million was $1.3 million, or 3.9%, above prior quarter and $2.1 million, or 6.8%, above prior year same quarter. The quarter over quarter increase primarily resulted from increases in personnel expense ($0.7 million) and data processing expense ($0.4 million). The year over year increase was primarily due to increases in personnel expense ($1.7 million, which included a $1.1 million increase in bonuses and incentives and a $0.5 million increase in the cost of group medical and life insurance benefits) and data processing ($0.6 million). Other noninterest expense was positively impacted year over year by the accounting method change related to investments in tax credit structures (ASU No. 2023-02). Noninterest expense for the year 2024 was $130.9 million compared to $125.4 million for the year 2023.

Balance Sheet Review

Total Loans

Percent Change

4Q 2024 Compared to:

($ in thousands)

2024

2023

2024

2023

Commercial nonresidential real estate

$865,031

$834,985

$778,637

3.6%

11.1%

Commercial residential real estate

508,310

485,004

417,943

4.8%

21.6%

Hotel/motel

458,832

453,465

395,765

1.2%

15.9%

Other commercial

440,506

440,636

391,390

(0.0%)

12.5%

Total commercial

2,272,679

2,214,090

1,983,735

2.6%

14.6%

Residential mortgage

1,043,401

1,003,123

937,524

4.0%

11.3%

Home equity loans/lines

167,425

163,013

147,036

2.7%

13.9%

Total residential

1,210,826

1,166,136

1,084,560

3.8%

11.6%

Consumer indirect

850,289

816,187

823,505

4.2%

3.3%

Consumer direct

152,843

154,061

159,106

(0.8%)

(3.9%)

Total consumer

1,003,132

970,248

982,611

3.4%

2.1%

Total loans

$4,486,637

$4,350,474

$4,050,906

3.1%

10.8%

Total Deposits and Repurchase Agreements

Percent Change

4Q 2024 Compared to:

($ in thousands)

2024

2023

2024

2023

Noninterest bearing deposits

$1,242,676

$1,204,515

$1,260,690

3.2%

(1.4%)

Interest bearing deposits

Interest checking

167,736

156,249

123,927

7.4%

35.4%

Money market savings

1,781,415

1,658,758

1,525,537

7.4%

16.8%

Savings accounts

511,378

501,933

535,063

1.9%

(4.4%)

Time deposits

1,366,984

1,316,807

1,279,405

3.8%

6.8%

Repurchase agreements

240,166

233,324

225,245

2.9%

6.6%

Total interest bearing deposits and repurchase agreements

4,067,679

3,867,071

3,689,177

5.2%

10.3%

Total deposits and repurchase agreements

$5,310,355

$5,071,586

$4,949,867

4.7%

7.3%

CTBI’s total assets at $6.2 billion as of December 31, 2024 increased $230.3 million, or 15.4% annualized, from September 30, 2024 and $423.5 million, or 7.3%, from December 31, 2023. Loans outstanding at $4.5 billion increased $136.2 million, an annualized 12.5%, from September 30, 2024 and $435.7 million, or 10.8%, from December 31, 2023. The increase in loans from prior quarter included a $58.6 million increase in the commercial loan portfolio, a $44.7 million increase in the residential loan portfolio, and a $34.1 million increase in the indirect consumer loan portfolio, partially offset by a $1.2 million decrease in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $41.8 million, or an annualized 15.1%, from September 30, 2024 and $107.4 million, or 9.2%, from December 31, 2023. The decrease in our investment portfolio quarter over quarter was primarily attributable to an increase in our unrealized losses in the amount of $23.7 million, while our unrealized losses decreased year over year by $6.6 million. Deposits in other banks increased $141.5 million from prior quarter and $83.9 million from December 31, 2023. Deposits, including repurchase agreements, at $5.3 billion increased $238.8 million, or an annualized 18.7%, from September 30, 2024 and $360.5 million, or 7.3%, from December 31, 2023. CTBI is not dependent on any one customer or group of customers for their source of deposits. As of December 31, 2024, no one customer accounted for more than 4% of our $5.1 billion in deposits. Only three customer relationships accounted for more than 1% each.

Shareholders’ equity at $757.6 million decreased $3.2 million, or an annualized 1.7%, during the quarter but increased $55.4 million, or 7.9%, from December 31, 2023. Net unrealized losses on securities, net of deferred taxes, were $98.4 million at December 31, 2024, compared to $80.6 million at September 30, 2024 and $103.3 million at December 31, 2023. CTBI’s annualized dividend yield to shareholders as of December 31, 2024 was 3.55%.

Asset Quality

Our total nonperforming loans increased to $26.7 million at December 31, 2024 from $25.1 million at September 30, 2024 and $14.0 million at December 31, 2023. Accruing loans 90+ days past due at $10.3 million decreased $8.8 million from prior quarter but increased $0.4 million from December 31, 2023. Nonaccrual loans at $16.4 million increased $10.4 million from prior quarter and $12.3 million from December 31, 2023. The increase in nonaccrual loans included an $8.0 million credit that is 80% USDA guaranteed. Accruing loans 30-89 days past due at $16.8 million decreased $3.7 million from prior quarter but increased $1.5 million from December 31, 2023. Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss.

We had net loan charge-offs of $1.0 million, or an annualized 0.09% of average loans, for the fourth quarter 2024 compared to $1.5 million, or an annualized 0.14% of average loans, for the third quarter 2024 and $1.0 million, or 0.10% of average loans annualized, for the fourth quarter 2023. Of the net charge-offs for the quarter, $0.5 million were in indirect consumer loans, $0.2 million were in commercial loans, $0.2 million were in direct consumer loans, and $0.1 million were in residential loans. Net loan charge-offs for the year 2024 were in line with management’s expectations at $5.5 million, or 0.13% of average loans, compared to $3.2 million, or 0.08% of average loans for the year 2023.

Allowance for Credit Losses

Our provision for credit losses at $2.6 million for the quarter decreased $0.1 million from prior quarter but increased $0.8 million from prior year same quarter. Of the provision for the quarter, $1.6 million was allotted to fund loan growth. Provision for credit losses for the year 2024 increased $4.1 million from the year 2023. Our reserve coverage (allowance for credit losses to nonperforming loans) at December 31, 2024 was 206.0% compared to 212.7% at September 30, 2024 and 354.7% at December 31, 2023. Our credit loss reserve as a percentage of total loans outstanding at December 31, 2024 remained at 1.23% from September 30, 2024 compared to 1.22% at December 31, 2023.

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, prevailing inflation and interest rates, realized gains from sales of investments, gains from asset sales, and losses on commercial lending activities; the effects of epidemics, pandemics, or other infectious disease outbreaks; 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, regulations, and enforcement actions 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 $6.2 billion, is headquartered in Pikeville, Kentucky and has 72 banking locations across eastern, northeastern, central, and south central Kentucky, six banking locations in southern West Virginia, three banking locations in northeastern Tennessee, four trust offices across Kentucky, and one trust office in Tennessee.

Additional information follows.

December 31, 2024

September 30, 2024

December 31, 2023

December 31, 2024

December 31, 2023

81,979

79,814

73,329

313,443

268,650

32,452

32,615

30,354

127,448

95,540

49,527

47,199

42,975

185,995

173,110

2,587

2,736

1,815

10,951

6,811

294

395

7,619

7,886

7,312

29,824

29,935

3,961

3,707

3,318

14,921

13,025

1,472

813

467

4,957

3,792

521

213

258

631

996

2,537

2,864

2,316

11,938

9,516

16,160

15,563

13,725

62,565

57,659

20,193

19,521

18,445

79,427

73,711

3,015

3,072

3,045

12,204

11,843

3,181

2,804

2,630

11,172

9,726

670

629

655

2,586

2,483

6,710

6,486

6,853

25,534

27,627

33,769

32,512

31,628

130,923

125,390

29,331

27,514

23,257

106,686

98,568

6,838

5,372

4,598

23,873

20,564

22,493

22,142

18,659

82,813

78,004

82,252

80,094

73,626

314,582

269,841

17,971

17,962

17,901

17,950

17,887

18,009

17,991

17,926

17,977

17,900

1.25

1.23

1.04

4.61

4.36

1.25

1.23

1.04

4.61

4.36

0.47

0.46

1.86

1.80

4,399,291

4,300,652

4,022,547

4,247,762

3,888,585

5,779,438

5,570,160

5,377,827

5,569,948

5,244,128

6,100,136

5,891,157

5,713,977

5,893,995

5,572,141

5,215,204

5,014,506

4,916,208

5,036,906

4,771,106

4,059,061

3,859,978

3,687,660

3,867,733

3,514,142

760,223

748,098

674,349

732,119

663,664

1.47

1.50

1.30

1.41

1.40

11.77

10.98

11.31

11.75

5.66

5.72

5.43

5.65

5.15

3.18

3.36

3.27

3.30

2.72

3.43

3.39

3.19

3.36

3.32

51.60

51.75

55.74

52.57

54.29

2,264

2,736

2,529

10,503

8,259

(1,285

)

(1,212

)

(1,538

)

(4,977

)

(5,010

)

979

1,524

991

5,526

3,249

61.66

52.22

45.74

61.66

47.35

46.55

41.50

33.91

38.44

32.68

53.03

49.66

43.86

53.03

43.86

4,486,637

4,350,474

4,050,906

(54,968

)

(53,360

)

(49,543

)

4,431,669

4,297,114

4,001,363

184

115

152

1,055,728

1,098,076

1,163,724

3,781

3,266

3,158

9,949

10,060

9,599

298,580

157,092

214,664

73,021

85,944

58,833

49,630

47,519

45,311

14,385

14,718

15,703

65,490

190,828

183,574

191,699

6,193,245

5,962,968

5,769,696

167,736

156,249

123,927

2,292,793

2,160,691

2,060,600

795,619

753,253

704,222

571,365

563,554

575,183

3,827,513

3,633,747

3,463,932

1,242,676

1,204,515

1,260,690

5,070,189

4,838,262

4,724,622

240,166

233,324

225,245

64,830

64,893

65,075

15,190

15,530

16,393

45,286

50,197

36,153

5,435,661

5,202,206

5,067,488

757,584

760,762

702,208

6,193,245

5,962,968

5,769,696

18,058

18,052

18,000

16,833

20,578

15,343

10,317

19,111

9,920

16,369

5,980

4,048

3,647

1,344

1,616

13.76

13.99

13.69

11.30

11.79

11.16

934

943

967

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