Community Trust Bank(CTBI) - 2025 Q3 - Quarterly Results

Executive Summary Community Trust Bancorp, Inc. reported Q3 2025 net income of $23.9 million, a decrease QoQ but an increase YoY, driven by strong net interest income growth despite higher credit loss provisions and noninterest expenses Earnings Overview Community Trust Bancorp, Inc. reported net income of $23.9 million for Q3 2025, a decrease from Q2 2025 but an increase from Q3 2024, with similar trends in earnings per share Key Financial Metrics (in thousands except per share data) | Metric (in thousands except per share data) | 3Q 2025 | 2Q 2025 | 3Q 2024 | YTD 2025 | YTD 2024 | | :--------------------------------- | :------ | :------ | :------ | :------- | :------- | | Net income | $23,911 | $24,899 | $22,142 | $70,782 | $60,320 | | Earnings per share | $1.33 | $1.38 | $1.23 | $3.93 | $3.36 | | Earnings per share - diluted | $1.32 | $1.38 | $1.23 | $3.92 | $3.36 | | Return on average assets | 1.46% | 1.58% | 1.50% | 1.50% | 1.38% | | Return on average equity | 11.53% | 12.51% | 11.77% | 11.84% | 11.15% | | Efficiency ratio | 50.86% | 50.70% | 51.75% | 51.12% | 52.91% | | Dividends declared per share | $0.53 | $0.47 | $0.47 | $1.47 | $1.39 | | Book value per share | $45.91 | $44.57 | $42.14 | | | - Net income for Q3 2025 was $23.9 million, or $1.33 per basic share, a decrease from $24.9 million ($1.38 per basic share) in Q2 2025, but an increase from $22.1 million ($1.23 per basic share) in Q3 2024[1] - Total revenue for the quarter increased $1.3 million QoQ and $8.7 million YoY. Net interest revenue increased $1.5 million QoQ and $8.4 million YoY[1] Q3 2025 Highlights Key financial highlights for Q3 2025 include a significant increase in net interest income both quarter-over-quarter and year-over-year, despite a slight decrease in net interest margin QoQ - Net interest income for Q3 2025 was $55.6 million, up 2.8% QoQ and 17.7% YoY. Net interest margin decreased 4 basis points QoQ but increased 21 basis points YoY[2] - Provision for credit losses was $3.9 million, an increase of $1.8 million QoQ and $1.1 million YoY[2] - Noninterest income was $15.9 million, down 1.4% QoQ but up 2.5% YoY[2] - Noninterest expense was $36.7 million, up 3.0% QoQ and 13.0% YoY[2] Financial Performance Analysis The company's Q3 2025 financial performance was characterized by increased net interest income and noninterest expense, with a slight decrease in noninterest income quarter-over-quarter Net Interest Income Net interest income for Q3 2025 increased significantly both quarter-over-quarter and year-over-year, driven by higher income on earning assets, with the net interest margin slightly decreasing QoQ but increasing YoY Components of Net Interest Income (in thousands) | Components of net interest income ($ in thousands) | 3Q 2025 | 2Q 2025 | 3Q 2024 | Change (%) 3Q 2025 Compared to 2Q 2025 | Change (%) 3Q 2025 Compared to 3Q 2024 | | :--------------------------------- | :------ | :------ | :------ | :------------------------------------- | :------------------------------------- | | Income on earning assets | $88,562 | $85,571 | $79,814 | 3.5 | 11.0 | | Expense on interest bearing liabilities | $33,008 | $31,531 | $32,615 | 4.7 | 1.2 | | Net interest income | $55,554 | $54,040 | $47,199 | 2.8 | 17.7 | | Net interest income, tax equivalent | $55,855 | $54,323 | $47,479 | 2.8 | 17.6 | | Net interest margin (TEQ) | 3.60% | 3.64% | 3.39% | (1.1) | 6.2 | - Net interest income for Q3 2025 was $55.6 million, up $1.5 million (2.8%) from Q2 2025 and $8.4 million (17.7%) from Q3 2024[3] - Net interest margin (tax equivalent) was 3.60%, a decrease of 4 basis points QoQ but an increase of 21 basis points YoY[3] - Average earning assets increased $168.0 million (11.1% annualized) QoQ and $581.0 million (10.4%) YoY[3] Noninterest Income Noninterest income for Q3 2025 slightly decreased quarter-over-quarter due to lower net securities gains and loan-related fees, but increased year-over-year primarily driven by higher trust revenue and deposit-related fees Noninterest Income Components (in thousands) | ($ in thousands) | 3Q 2025 | 2Q 2025 | 3Q 2024 | Change (%) 3Q 2025 Compared to 2Q 2025 | Change (%) 3Q 2025 Compared to 3Q 2024 | | :------------------------- | :------ | :------ | :------ | :------------------------------------- | :------------------------------------- | | Deposit related fees | $8,131 | $7,350 | $7,886 | 10.6 | 3.1 | | Trust revenue | $4,277 | $4,092 | $3,707 | 4.5 | 15.4 | | Loan related fees | $897 | $1,249 | $813 | (28.1) | 10.4 | | Total noninterest income | $15,946 | $16,171 | $15,563 | (1.4) | 2.5 | - Total noninterest income for Q3 2025 was $15.9 million, a 1.4% decrease QoQ but a 2.5% increase YoY[7] - QoQ variance was mainly due to decreases in net securities gains ($0.6 million) and loan related fees ($0.4 million), partially offset by increased deposit related fees ($0.8 million)[7] - YoY increases in trust revenue ($0.6 million) and deposit related fees ($0.2 million) were partially offset by a decrease in securities gains ($0.7 million)[7] Noninterest Expense Noninterest expense for Q3 2025 increased both quarter-over-quarter and year-over-year, driven by rises in repossession, data processing, and marketing expenses QoQ, and broader increases including personnel and data processing YoY Noninterest Expense Components (in thousands) | ($ in thousands) | 3Q 2025 | 2Q 2025 | 3Q 2024 | Change (%) 3Q 2025 Compared to 2Q 2025 | Change (%) 3Q 2025 Compared to 3Q 2024 | | :------------------------------- | :------ | :------ | :------ | :------------------------------------- | :------------------------------------- | | Salaries | $13,913 | $13,667 | $13,374 | 1.8 | 4.0 | | Employee benefits | $7,861 | $7,987 | $6,147 | (1.6) | 27.9 | | Data processing | $3,575 | $3,326 | $2,804 | 7.5 | 27.5 | | Total noninterest expense | $36,744 | $35,663 | $32,512 | 3.0 | 13.0 | - Total noninterest expense for Q3 2025 was $36.7 million, up 3.0% QoQ and 13.0% YoY[8] - QoQ increase was mainly due to increases in repossession expense ($0.4 million), data processing expense ($0.2 million), and marketing and promotional ($0.2 million)[8] - YoY increase included personnel expense ($2.3 million), data processing expense ($0.8 million), repossession expense ($0.4 million), and marketing and promotional ($0.2 million)[8] Balance Sheet Review The balance sheet for Q3 2025 shows growth in total loans, deposits, and shareholders' equity, with deposits outpacing loan growth Loans Total loans outstanding at September 30, 2025, reached $4.8 billion, showing growth both quarter-over-quarter and year-over-year, primarily driven by increases in commercial and residential loan portfolios Total Loans (in thousands) | Total Loans ($ in thousands) | 3Q 2025 | 2Q 2025 | 3Q 2024 | Change (%) 3Q 2025 Compared to 2Q 2025 | Change (%) 3Q 2025 Compared to 3Q 2024 | | :--------------------------------- | :---------- | :---------- | :---------- | :------------------------------------- | :------------------------------------- | | Commercial nonresidential real estate | $921,682 | $913,463 | $834,985 | 0.9 | 10.4 | | Commercial residential real estate | $573,270 | $559,906 | $485,004 | 2.4 | 18.2 | | Total commercial | $2,424,910 | $2,382,565 | $2,214,090 | 1.8 | 9.5 | | Total residential | $1,341,731 | $1,289,807 | $1,166,136 | 4.0 | 15.1 | | Total consumer | $1,027,274 | $1,029,421 | $970,248 | (0.2) | 5.9 | | Total loans | $4,793,915 | $4,701,793 | $4,350,474 | 2.0 | 10.2 | - Loans outstanding at $4.8 billion increased $92.1 million (7.8% annualized) QoQ and $443.4 million (10.2%) YoY[6][11] - The QoQ increase in loans included a $42.3 million increase in commercial loans and a $51.9 million increase in residential loans, partially offset by decreases in consumer indirect and direct loans[11] Deposits and Repurchase Agreements Total deposits and repurchase agreements grew to $5.7 billion, showing strong increases both quarter-over-quarter and year-over-year, primarily driven by increases in interest-bearing deposits, outpacing loan growth Total Deposits and Repurchase Agreements (in thousands) | Total Deposits and Repurchase Agreements ($ in thousands) | 3Q 2025 | 2Q 2025 | 3Q 2024 | Change (%) 3Q 2025 Compared to 2Q 2025 | Change (%) 3Q 2025 Compared to 3Q 2024 | | :---------------------------------------- | :---------- | :---------- | :---------- | :------------------------------------- | :------------------------------------- | | Noninterest bearing deposits | $1,248,573 | $1,258,205 | $1,204,515 | (0.8) | 3.7 | | Interest checking | $194,327 | $173,795 | $156,249 | 11.8 | 24.4 | | Time deposits | $1,626,261 | $1,472,311 | $1,316,807 | 10.5 | 23.5 | | Repurchase agreements | $284,863 | $225,075 | $233,324 | 26.6 | 22.1 | | Total deposits and repurchase agreements | $5,670,324 | $5,458,083 | $5,071,586 | 3.9 | 11.8 | - Deposits, including repurchase agreements, at $5.7 billion increased $212.2 million (15.4% annualized) QoQ and $598.7 million (11.8%) YoY[6][11] - Deposit growth outpaced loan growth, leading to an increase in deposits in other banks by $117.7 million QoQ and $281.4 million YoY[11] Shareholders' Equity Shareholders' equity increased to $831.4 million, reflecting growth both quarter-over-quarter and year-over-year, alongside a reduction in net unrealized losses on securities - Shareholders' equity at $831.4 million increased $24.5 million (12.0% annualized) during the quarter and $70.6 million (9.3%) from September 30, 2024[6][12] - Net unrealized losses on securities, net of deferred taxes, decreased to $71.1 million at September 30, 2025, from $80.6 million at June 30, 2025 and September 30, 2024[12] - The annualized dividend yield to shareholders as of September 30, 2025, was 3.79%[12] Asset Quality Asset quality in Q3 2025 saw an increase in provision for credit losses and net charge-offs, while nonperforming loans remained relatively stable Nonperforming Assets and Past Due Loans Total nonperforming loans saw a slight increase QoQ but a decrease YoY, with accruing loans 90+ days past due increasing QoQ but significantly decreasing YoY - Total nonperforming loans were $24.7 million, an increase of $0.3 million QoQ but a decrease of $0.4 million YoY[6][13] - Accruing loans 90+ days past due increased $0.6 million QoQ to $9.0 million, but decreased $10.1 million YoY[13] - Nonaccrual loans decreased $0.3 million QoQ to $15.6 million, but increased $9.7 million YoY[13] Loan Charge-offs Net loan charge-offs for Q3 2025 increased significantly compared to prior periods, primarily due to a large charge-off on one commercial credit, with commercial and consumer indirect loans being the main contributors - Net loan charge-offs for Q3 2025 were $2.7 million (0.23% annualized of average loans), compared to $1.4 million (0.12% annualized) in Q2 2025 and $1.5 million (0.14% annualized) in Q3 2024[6][14] - The primary increase in net charge-offs included a $1 million charge-off on one commercial credit totaling $8 million[15] - Of the Q3 2025 net charge-offs, $1.2 million were in commercial loans and $1.2 million were in consumer indirect loans[14] Allowance for Credit Losses The provision for credit losses increased significantly in Q3 2025, primarily to fund changes in loan volume and composition, leading to an improved reserve coverage ratio while the loan loss reserve as a percentage of total loans remained stable - Provision for credit losses was $3.9 million for Q3 2025, an increase of $1.8 million QoQ and $1.1 million YoY[16] - Of the Q3 provision, $3.8 million was allotted for changes in loan volume and composition[16] - Reserve coverage (allowance for credit losses to nonperforming loans) improved to 239.5% at September 30, 2025, from 237.1% at June 30, 2025 and 212.7% at September 30, 2024[16] - Loan loss reserve as a percentage of total loans outstanding remained at 1.23% at September 30, 2025[16] Company Information The company provides forward-looking statements with inherent risks and details its profile as a $6.6 billion asset financial institution Forward-Looking Statements The report contains forward-looking statements subject to various risks and uncertainties, including economic conditions, portfolio performance, regulatory changes, and integration difficulties from acquisitions, with no obligation to update these statements - Forward-looking statements are identified by words like "believe," "expect," "anticipate," and similar expressions[17] - Risks and uncertainties include economic conditions, portfolio growth and credit performance, inflation and interest rates, regulatory changes, competition, and integration challenges from acquisitions[17] - CTBI undertakes no obligation to update any forward-looking statements[17] Company Profile Community Trust Bancorp, Inc. is headquartered in Pikeville, Kentucky, with $6.6 billion in assets and a broad banking presence across Kentucky, West Virginia, and Tennessee, including multiple trust offices - Community Trust Bancorp, Inc. has assets of $6.6 billion[18] - Headquartered in Pikeville, Kentucky, it operates 72 banking locations across Kentucky, six in southern West Virginia, and three in northeastern Tennessee[18] - The company also has four trust offices across Kentucky and one in Tennessee[18] Detailed Financial Statements This section presents comprehensive income statements, balance sheets, key financial ratios, and market price information for the reported periods Income Statement and Performance Ratios The detailed financial summary provides a comprehensive breakdown of the income statement for Q3 2025, Q2 2025, Q3 2024, and year-to-date figures, including interest income and expense, noninterest income and expense components, net income, and key performance ratios Income Statement and Performance Ratios (in thousands except per share data) | (in thousands except per share data) | Three Months Ended Sep 30, 2025 | Three Months Ended Jun 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :----------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Interest income | $88,562 | $85,571 | $79,814 | $256,187 | $231,464 | | Interest expense | $33,008 | $31,531 | $32,615 | $95,326 | $94,996 | | Net interest income | $55,554 | $54,040 | $47,199 | $160,861 | $136,468 | | Provision for credit losses | $3,866 | $2,094 | $2,736 | $9,528 | $8,364 | | Total noninterest income | $15,946 | $16,171 | $15,563 | $47,014 | $46,405 | | Total noninterest expense | $36,744 | $35,663 | $32,512 | $106,615 | $97,154 | | Net income | $23,911 | $24,899 | $22,142 | $70,782 | $60,320 | | Basic earnings per share | $1.33 | $1.38 | $1.23 | $3.93 | $3.36 | | Return on average assets | 1.46% | 1.58% | 1.50% | 1.50% | 1.38% | | Net interest margin (tax equivalent) | 3.60% | 3.64% | 3.39% | 3.61% | 3.34% | | Efficiency ratio (tax equivalent) | 50.86% | 50.70% | 51.75% | 51.12% | 52.91% | Balance Sheet and Key Ratios The balance sheet provides a snapshot of assets, liabilities, and equity as of September 30, 2025, June 30, 2025, and September 30, 2024, including key components like loans, securities, deposits, and shareholders' equity, along with critical ratios and asset quality metrics Balance Sheet and Key Ratios (in thousands) | (in thousands) | As of Sep 30, 2025 | As of Jun 30, 2025 | As of Sep 30, 2024 | | :--------------------------------- | :----------------- | :----------------- | :----------------- | | Loans | $4,793,915 | $4,701,793 | $4,350,474 | | Allowance for credit losses | $(59,135) | $(57,825) | $(53,360) | | Total Assets | $6,638,129 | $6,390,938 | $5,962,968 | | Total deposits | $5,385,461 | $5,233,008 | $4,838,262 | | Repurchase agreements | $284,863 | $225,075 | $233,324 | | Shareholders' equity | $831,373 | $806,869 | $760,762 | | 90 days past due loans | $9,040 | $8,449 | $19,111 | | Nonaccrual loans | $15,647 | $15,937 | $5,980 | | Community bank leverage ratio | 13.68% | 13.80% | 13.99% | | Tangible equity to tangible assets ratio | 11.65% | 11.72% | 11.79% | Market Price Information The market price information provides the high, low, and closing stock prices for Community Trust Bancorp, Inc. for the third quarter of 2025, second quarter of 2025, and third quarter of 2024, as well as year-to-date figures Market Price Information | Market Price | 3Q 2025 | 2Q 2025 | 3Q 2024 | YTD 2025 | YTD 2024 | | :----------- | :------ | :------ | :------ | :------- | :------- | | High | $59.67 | $53.82 | $52.22 | $59.67 | $52.22 | | Low | $52.60 | $44.60 | $41.50 | $44.60 | $38.44 | | Close | $55.95 | $52.92 | $49.66 | $55.95 | $49.66 |