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

Financial Performance - Community Trust Bancorp, Inc. reported Q3 2025 earnings of $23.9 million, or $1.33 per basic share, compared to $24.9 million, or $1.38 per basic share in Q2 2025, and $22.1 million, or $1.23 per basic share in Q3 2024 [186]. - Net interest income for Q3 2025 was $55.6 million, an increase of $1.5 million, or 2.8%, from the prior quarter, and $8.4 million, or 17.7%, from the same quarter last year [189]. - Noninterest income for Q3 2025 was $15.9 million, which was $0.2 million, or 1.4%, below the prior quarter but $0.4 million, or 2.5%, above the same quarter last year [189]. - Noninterest expense for Q3 2025 was $36.7 million, an increase of $1.1 million, or 3.0%, from the prior quarter, and $4.2 million, or 13.0%, from the same quarter last year [189]. - Total shareholders' equity increased by $24.5 million, or an annualized 12.0%, during the quarter, and by $73.8 million, or 9.7%, from the prior year end [189]. Asset and Deposit Growth - Total consolidated assets as of September 30, 2025, were $6.6 billion, with total consolidated deposits of $5.7 billion, and shareholders' equity of $831.4 million [184]. - The loan portfolio increased to $4.8 billion, reflecting a quarterly increase of $92.1 million, or an annualized 7.8%, and a year-over-year increase of $307.3 million, or 6.8% [189]. - Deposits, including repurchase agreements, increased by $212.2 million, or an annualized 15.4%, during the quarter, and by $360.0 million, or 6.8%, from the prior year end [189]. - Total assets increased to $6.6 billion, up $247.2 million (15.3% annualized) during the quarter and $444.9 million (9.6%) from the prior year end [205]. - Total deposits, including repurchase agreements, increased to $5.7 billion, up $212.2 million (15.4% annualized) during the quarter and $360.0 million (9.1%) from the prior year end [206]. Credit Quality and Loss Provisions - The provision for credit losses increased to $3.9 million for Q3 2025, up $1.8 million from the prior quarter and $1.1 million from the same quarter last year [189]. - Provision for credit losses for the nine months ended September 30, 2025, was $9,500 thousand, which is a $1,200 thousand increase over the same period in 2024 [201]. - The reserve coverage ratio (allowance for credit losses to nonperforming loans) was 239.5% as of September 30, 2025, compared to 212.7% a year earlier [201]. - Total nonperforming loans increased to $24.7 million, up $0.3 million from the prior quarter but down $2.0 million from the prior year end [213]. - Net loan charge-offs for the quarter were $2.7 million, an annualized 0.23% of average loans, compared to $1.4 million (0.12%) in the prior quarter and $1.5 million (0.14%) in the same period last year [214]. Interest Income and Margin - The net interest margin for Q3 2025 was 3.60%, reflecting a decrease of 4 basis points from the prior quarter but an increase of 21 basis points from the same quarter last year [189]. - Total interest income for the nine months ended September 30, 2025, was $24,714 thousand, with a significant contribution from loans, which increased by $23,511 thousand [199]. - The net interest margin on a fully tax equivalent basis was 3.61% for the nine months ended September 30, 2025, compared to 3.34% for the same period in 2024, reflecting an improvement of 27 basis points [200]. - The company reported a net interest spread of 2.72% for the nine months ended September 30, 2025, compared to 2.30% for the same period in 2024 [200]. Capital Management - Shareholders' equity rose to $831.4 million, an increase of $24.5 million (12.0% annualized) during the quarter and $73.8 million (13.0%) from the prior year end [208]. - Year-to-date cash dividends were $1.47 per share, with a retention rate of 62.6% of earnings compared to 58.6% in the prior year [220]. - A total of 2,465,294 shares have been repurchased under the stock repurchase program, leaving 1,034,706 shares remaining [225]. Risk Management and Credit Loss Estimation - CTBI uses a discounted cash flow (DCF) model for estimating expected credit losses, which allows for effective incorporation of reasonable forecasts [232]. - Expected credit losses are estimated based on historical credit loss experience, peer data, and current market conditions, with forecasts considered reasonable for up to one year [233]. - Qualitative factors are included in the allowance for credit losses (ACL) to capture portfolio characteristics not fully reflected in the models, requiring significant management judgment [234]. - The reserve for unfunded commitments is maintained to absorb estimated expected credit losses related to unfunded credit facilities, based on the remaining contractual life of the commitments [237]. - CTBI's interest rate risk management aims to maintain consistent growth in net interest income, with a 200 basis point increase in the yield curve estimated to increase net interest income by 2.39% over one year [239].