Community Trust Bank(US:CTBI)2022-02-27 16:00Financial Performance - Community Trust Bancorp, Inc. reported net income of $87.9 million, or $4.94 per basic share, for the year ended December 31, 2021, compared to $59.5 million, or $3.35 per basic share, for the year ended December 31, 2020, representing a 47.8% increase [159]. - Basic earnings per share for 2021 were $4.94, exceeding the goal range of $3.76 - $3.92 [158]. - The company aims for 2022 goals of net income between $74.1 million and $77.1 million, and basic earnings per share between $4.15 and $4.31 [158]. - Net income for the year ended December 31, 2021, was $87,939 thousand, representing an increase from the previous year's net income of $59,504 thousand [257]. - Basic earnings per share rose to $4.94, up from $3.35, reflecting an increase of approximately 47.4% [255]. Income and Expenses - Noninterest income for the year ended December 31, 2021, was $60.5 million, an increase of $5.9 million, or 10.8%, compared to the previous year [164]. - Total noninterest expense remained relatively flat at $119.3 million for the year ended December 31, 2021, with a slight increase in personnel expenses offset by decreases in taxes and legal fees [180]. - The company experienced a net recovery of loan losses of $0.1 million for the year ended December 31, 2021, compared to net charge-offs of $6.2 million for the previous year [162]. - The provision for credit losses for 2021 was a recovery of $6.4 million, compared to a provision of $16.0 million in 2020 [177]. Assets and Liabilities - Total consolidated assets at December 31, 2021, were $5.4 billion, with total consolidated deposits of $4.6 billion, reflecting a $243.4 million, or 5.6%, increase from December 31, 2020 [155][164]. - Total assets increased to $5,418,257, up from $5,139,141 in 2020, representing a growth of approximately 5.4% [252]. - Total liabilities increased to $4,720,055 from $4,484,276, representing a growth of about 5.3% [252]. - Shareholders' equity rose to $698.2 million, a 6.6% increase from $654.9 million at the end of 2020, with an annualized dividend yield of 3.67% [184]. Loans and Credit Quality - The loan portfolio decreased by $145.4 million, or 4.1%, from December 31, 2020, while loans excluding PPP loans increased by $59.9 million during the year [162]. - Nonperforming loans decreased by $10.0 million, or 37.4%, to $16.6 million at December 31, 2021 [163]. - The allowance for credit losses improved to $(41,756) from $(48,022), indicating a reduction in provisions by about 13.1% [252]. - Nonperforming assets to loans and foreclosed properties were 0.6% as of December 31, 2021, compared to 1.0% at the end of 2020, indicating an improvement in asset quality [193]. Investment and Securities - The investment portfolio increased by $457.9 million, or 45.8%, from December 31, 2020 [182]. - The total available-for-sale securities amounted to $1.461 billion, with a fair value of $1.455 billion as of December 31, 2021 [322]. - The percentage of total debt securities with unrealized losses rose significantly to 72.4% as of December 31, 2021, compared to 16.2% as of December 31, 2020 [329]. - The fair value adjustment in equity securities resulted in a gain of $218 million, contrasting with a loss of $(518) million in the previous year [258]. Capital Management - The company retained 68.2% of its earnings in 2021, up from 54.3% in 2020 [220]. - The stock repurchase program has repurchased a total of 2,465,294 shares, with 1,034,706 shares remaining under the current authorization [229]. - CTBI's community bank leverage ratio (CBLR) as of December 31, 2021 was 13.00%, indicating a strong capital position [222]. - The total capital surplus as of December 31, 2021, was $227,085 thousand, reflecting a slight increase from $225,507 thousand in 2020 [257]. Risk Management and Credit Losses - CTBI maintains an Allowance for Credit Losses (ACL) based on ongoing assessments, considering historical credit loss experience and current market conditions [236]. - The reserve for unfunded commitments is maintained to absorb estimated expected credit losses related to unfunded credit facilities [244]. - CTBI's expected credit loss models are based on historical credit loss experience and macroeconomic conditions, with forecasts considered reasonable for up to one year [241]. - The company utilizes an internal risk grading system for commercial credits, with loans of $1 million or greater subject to individual evaluation [282]. Tax and Regulatory Compliance - The effective income tax rate for 2021 was 21%, up from 15% in 2020, due to changes in Kentucky tax legislation [159]. - Income tax liabilities and assets are established based on current year taxes payable or refundable, involving estimates and assumptions [249]. - CTBI does not engage in material hedging or derivative activities, with interest rate sensitivity analyzed in the financial condition discussion [251].