Community Trust Bank(CTBI) - 2024 Q1 - Quarterly Results

Financial Highlights Community Trust Bancorp, Inc. reported stable Q1 2024 net income of $18.7 million, driven by strong loan growth and noninterest income Key Financial Metrics | Metric | 1Q 2024 | 4Q 2023 | 1Q 2023 | | :--- | :--- | :--- | :--- | | Net Income ($ million) | $18.7 | $18.7 | $19.3 | | Earnings Per Share (Basic, $) | $1.04 | $1.04 | $1.08 | | Return on Average Assets (%) | 1.30 | 1.30 | 1.44 | | Return on Average Equity (%) | 10.61 | 10.98 | 12.03 | | Dividends Declared Per Share ($) | $0.46 | $0.46 | $0.44 | - Total revenue increased by $2.0 million compared to the prior quarter and $1.1 million compared to the same quarter last year[2] - The loan portfolio grew to $4.2 billion, an increase of $110.3 million (10.9% annualized) from Q4 2023 and $383.8 million (10.2%) from Q1 2023[4] - Deposits, including repurchase agreements, reached $5.0 billion, up $69.1 million (5.6% annualized) from the previous quarter[22] - An accounting change (ASU No. 2023-02) reclassified $0.8 million in tax credit amortization from noninterest expense to tax expense, impacting comparability[2] Detailed Financial Performance Q1 2024 performance showed mixed results: slight net interest income growth, significant noninterest income, and modest noninterest expense Net Interest Income Net interest income slightly increased quarter-over-quarter due to margin expansion but decreased year-over-year from rising cost of funds Net Interest Income Metrics | Metric | 1Q 2024 | 4Q 2023 | 1Q 2023 | | :--- | :--- | :--- | :--- | | Net Interest Income ($ million) | $43.6 | $43.0 | $43.9 | | Net Interest Margin (TEY, %) | 3.23 | 3.19 | 3.49 | - The net interest margin increased by 4 basis points from the prior quarter but decreased by 26 basis points from the prior year's same quarter[23] - The year-over-year margin compression was driven by the cost of funds rising faster (up 129 bps) than the yield on average earning assets (up 71 bps)[23] Noninterest Income Noninterest income significantly increased quarterly and annually, driven by higher loan-related fees and bank-owned life insurance revenue Noninterest Income Metrics | Metric | 1Q 2024 | 4Q 2023 | 1Q 2023 | | :--- | :--- | :--- | :--- | | Total Noninterest Income ($ million) | $15.1 | $13.7 | $13.7 | | Change vs. 4Q 2023 (%) | +10.3 | - | - | | Change vs. 1Q 2023 (%) | +10.6 | - | - | - The quarterly increase was primarily driven by a $0.9 million rise in loan-related fees and a $0.5 million increase in bank-owned life insurance revenue[14] - The year-over-year increase was led by higher loan-related fees (+$0.5 million), bank-owned life insurance revenue (+$0.4 million), and trust revenue (+$0.4 million)[14] Noninterest Expense Noninterest expense modestly increased quarter-over-quarter due to higher personnel costs, partially offset by a tax credit accounting change Noninterest Expense Metrics | Metric | 1Q 2024 | 4Q 2023 | 1Q 2023 | | :--- | :--- | :--- | :--- | | Total Noninterest Expense ($ million) | $32.2 | $31.6 | $31.9 | | Change vs. 4Q 2023 (%) | +1.9 | - | - | | Change vs. 1Q 2023 (%) | +1.0 | - | - | - The quarter-over-quarter increase was mainly due to a $1.7 million rise in personnel expense, partially offset by a $0.7 million decrease in other direct expenses resulting from the accounting change for tax credits[16] - Personnel expense increased year-over-year by $1.2 million, driven by higher salaries and group medical/life insurance costs[16] Balance Sheet Review Q1 2024 balance sheet expanded to $5.9 billion in total assets, driven by robust loan and deposit growth, and increased shareholders' equity Loans The loan portfolio grew significantly, increasing 10.9% annualized QoQ and 10.2% YoY, primarily in commercial and residential segments Loan Portfolio Metrics | Metric | 1Q 2024 | 4Q 2023 | 1Q 2023 | | :--- | :--- | :--- | :--- | | Total Loans ($ million) | $4,161.2 | $4,050.9 | $3,777.4 | | QoQ Growth (Annualized, %) | 10.9 | - | - | | YoY Growth (%) | 10.2 | - | - | - Loan growth from the prior quarter was led by a $101.4 million increase in the commercial portfolio and a $22.6 million increase in the residential portfolio[18] - The commercial loan portfolio grew 5.1% QoQ and 11.1% YoY, while the residential portfolio grew 2.1% QoQ and 14.1% YoY[17] Deposits and Repurchase Agreements Total deposits and repurchase agreements grew 5.6% annualized QoQ and 5.6% YoY, with a shift towards interest-bearing deposits Deposits and Repurchase Agreements Metrics | Metric | 1Q 2024 | 4Q 2023 | 1Q 2023 | | :--- | :--- | :--- | :--- | | Total Deposits & Repos ($ million) | $5,018.9 | $4,949.9 | $4,752.2 | | QoQ Growth (Annualized, %) | 5.6 | - | - | | YoY Growth (%) | 5.6 | - | - | - Non-interest bearing deposits decreased 9.6% year-over-year, while interest-bearing deposits grew, notably time deposits which increased 27.4% YoY[18] - The company maintains a diversified deposit base, with no single customer accounting for more than 2.25% of total deposits[18] Shareholders' Equity Shareholders' equity increased to $707.7 million, reflecting growth despite the impact of unrealized losses on securities - Shareholders' equity increased to $707.7 million, up $5.5 million (3.2% annualized) from Q4 2023 and $50.9 million (7.7%) from Q1 2023[11][27] - Net unrealized losses on securities, net of tax, were $106.9 million at March 31, 2024, compared to $103.3 million at December 31, 2023[27] - The annualized dividend yield to shareholders was 4.31% as of March 31, 2024[27] Asset Quality Asset quality deteriorated with increased nonperforming loans and net charge-offs, leading to higher credit loss provisions, though reserve coverage remains robust Asset Quality Metrics | Metric | 1Q 2024 | 4Q 2023 | 1Q 2023 | | :--- | :--- | :--- | :--- | | Nonperforming Loans ($ million) | $15.9 | $14.0 | $12.2 | | Net Charge-offs ($ million) | $1.6 | $1.0 | $0.4 | | Net Charge-offs to Avg. Loans (%) | 0.16 | 0.10 | 0.05 | - The provision for credit losses was $2.7 million, an increase of $0.8 million from the prior quarter and $1.5 million from the prior year's same quarter[20][28] - The allowance for credit losses as a percentage of total loans outstanding remained stable at 1.22% from December 31, 2023[28] - Reserve coverage (allowance for credit losses to nonperforming loans) was 319.0% at March 31, 2024, down from 354.7% at December 31, 2023[28] Forward-Looking Statements This section cautions that forward-looking statements are subject to material risks and uncertainties, including economic, credit, interest rate, and regulatory factors - The report includes forward-looking statements that are not historical facts and are subject to risks and uncertainties[29] - Identified risks include economic conditions, portfolio growth, credit performance, interest rate fluctuations, competition, and regulatory changes[29] Financial Tables This section provides detailed, unaudited financial summaries, including income statements, balance sheets, performance ratios, and asset quality data - Provides a detailed, unaudited Financial Summary including Consolidated Statements of Income for the three months ended March 31, 2024, December 31, 2023, and March 31, 2023[31][36] - Includes a detailed, unaudited Consolidated Balance Sheet as of March 31, 2024, December 31, 2023, and March 31, 2023[32][38][39] - Contains key performance ratios, average balances, and asset quality data for the respective periods[31][39]