Community Trust Bank(US:CTBI)2024-11-08 13:31Financial Performance - Community Trust Bancorp, Inc. reported third quarter 2024 earnings of $22.1 million, or $1.23 per basic share, compared to $19.5 million, or $1.09 per basic share in the prior quarter, and $20.6 million, or $1.15 per basic share in the same quarter last year [207]. - Total revenue for the third quarter 2024 was $1.4 million above the prior quarter and $4.1 million above the same quarter last year [207]. - Net interest income for the quarter was $47.2 million, an increase of $1.5 million, or 3.3%, from the prior quarter and $4.1 million, or 9.4%, from the same quarter last year [208]. - Noninterest income for the quarter was $15.6 million, which was $0.1 million, or 0.9%, below the prior quarter but $0.1 million, or 0.4%, above the same quarter last year [211]. - Total noninterest expense for the quarter was $32.5 million, an increase of $1.7 million, or 5.4%, from the same quarter last year [222]. - Cash dividends for Q3 2024 were $0.47 per share, an increase from $0.46 per share in the previous quarter [232]. Loan and Deposit Growth - The loan portfolio increased to $4.4 billion, up $89.2 million, or an annualized 8.3%, from June 30, 2024, and $299.6 million, or an annualized 9.9%, from December 31, 2023 [209]. - Total deposits, including repurchase agreements, reached $5.1 billion, an increase of $110.2 million, or an annualized 8.8%, from June 30, 2024, and $121.7 million, or 2.5%, from December 31, 2023 [210]. - The average loans to deposits ratio was 85.8% for the quarter ended September 30, 2024, compared to 84.5% for the prior quarter and 83.2% for the same quarter last year [217]. - Total deposits and repurchase agreements increased by 2.2% to $5,071,586 thousand in Q3 2024 compared to Q2 2024 [227]. - Noninterest bearing deposits decreased by 3.0% to $1,204,515 thousand in Q3 2024 compared to Q2 2024 [227]. Credit Quality - The provision for credit losses for the quarter was $2.7 million, a decrease of $0.2 million from the prior quarter but an increase of $0.9 million from the same quarter last year [208]. - Nonperforming loans increased to $25.1 million at September 30, 2024, from $19.8 million at June 30, 2024, and $14.0 million at December 31, 2023 [210]. - The credit loss reserve as a percentage of total loans outstanding was 1.23% as of September 30, 2024 [219]. - Net loan charge-offs for Q3 2024 were $1.5 million, or 0.14% of average loans annualized, compared to $1.4 million, or 0.13% in Q2 2024 [231]. - Total nonperforming loans rose to $25.1 million in Q3 2024, up from $19.8 million in Q2 2024 and $14.0 million at YE 2023 [229]. Shareholder Equity - Shareholders' equity increased to $760.8 million, up $41.4 million, or an annualized 22.9%, during the quarter and $58.6 million, or 8.3%, from December 31, 2023 [211]. - As of September 30, 2024, CTBI had approximately $240.9 million in cash and cash equivalents, down from $271.4 million at YE 2023 [233]. - CTBI's community bank leverage ratio was 13.99% as of September 30, 2024, indicating strong capital resources [240]. Investment Portfolio - The investment portfolio decreased by $65.6 million, or an annualized 7.5%, from December 31, 2023 [223]. - The investment portfolio was entirely in available-for-sale securities, comprising approximately 144% of equity capital as of September 30, 2024 [234]. Risk Management - Interest rate risk is a significant concern, with management employing various techniques to mitigate its impact on net interest income [235]. - CTBI's allowance for credit losses (ACL) is based on ongoing assessments of loan collectability, considering historical credit loss experience and current market conditions [248]. - The ACL is maintained at a level CTBI considers adequate, with provisions recorded to adjust the ACL to current estimates of expected credit losses [249]. - Larger commercial loans exceeding $1 million are individually evaluated for ACL if they exhibit credit weaknesses or are 90 days or more past due [250]. - Expected credit losses for loans not individually evaluated are estimated collectively, using discounted cash flow (DCF) modeling [251]. - CTBI's expected credit loss models consider historical credit loss experience and forecasted changes in market conditions for up to one year [252]. - The reserve for unfunded commitments is maintained to absorb estimated expected credit losses related to unfunded credit facilities [256]. Goodwill and Impairment Testing - Goodwill is tested for impairment annually, with the next assessment scheduled for October 1 [257]. Yield Curve Sensitivity - A 200 basis point increase in the yield curve is estimated to increase net interest income by 1.11% over one year and 2.08% over two years [261]. - A 200 basis point decrease in the yield curve would decrease net interest income by an estimated 2.57% over one year and 5.65% over two years [261]. Stock Repurchase Program - CTBI has repurchased a total of 2,465,294 shares under its stock repurchase program as of September 30, 2024 [244].