Community Trust Bancorp, Inc. Reports Record Earnings for 2012

  Community Trust Bancorp, Inc. Reports Record Earnings for 2012

Business Wire

PIKEVILLE, Ky. -- January 16, 2013

Community Trust Bancorp, Inc. (NASDAQ: CTBI):

                                                             
Earnings Summary                                          
                                                                             
(in thousands         4Q          3Q          4Q         Year        Year
except per share                                                   
data)                 2012        2012        2011       2012        2011
Net income            $10,552     $10,209     $9,888     $44,862     $38,827
Earnings per          $0.68       $0.66       $0.64      $2.90       $2.54
share
Earnings per          $0.68       $0.66       $0.64      $2.89       $2.53
share – diluted
                                                                             
Return on average     1.15%       1.11%       1.09%      1.23%       1.11%
assets
Return on average     10.47%      10.26%      10.71%     11.52%      10.91%
equity
Efficiency ratio      60.75%      58.19%      60.15%     57.93%      60.23%
Tangible common       9.36%       9.22%       8.52%      9.36%       8.52%
equity
                                                                             
Dividends
declared per          $0.315      $0.315      $0.310     $1.25       $1.23
share
Book value per        $25.64      $25.38      $23.78     $25.64      $23.78
share
                                                                             
Weighted average      15,516      15,491      15,332     15,466      15,313
shares
Weighted average    15,572    15,555    15,384   15,521    15,364  
shares – diluted
                                                                             

Community Trust Bancorp, Inc. (NASDAQ: CTBI) reports earnings for the fourth
quarter 2012 of $10.6 million, or $0.68 per basic share, compared to $9.9
million, or $0.64 per basic share, earned during the fourth quarter 2011 and
$10.2 million, or $0.66 per basic share, earned during the third quarter 2012.
Earnings for the year ended December 31, 2012 were $44.9 million, or $2.90 per
basic share, a 15.5% increase from the $38.8 million, or $2.54 per basic share
earned during the year 2011.

4^th Quarter and Year 2012 Highlights

  *CTBI’s basic earnings per share for the quarter increased $0.04 per share
    from the fourth quarter 2011 and $0.02 per share from the third quarter
    2012. Basic earnings per share for the year 2012 increased $0.36 per share
    from prior year. The increase in earnings from prior year was supported by
    increased net interest income and noninterest income and decreased
    provision for loan loss and noninterest expense.
  *Net interest income for the quarter increased 2.6% from prior year fourth
    quarter and 2.2% from prior quarter as our net interest margin increased 5
    basis points and 7 basis points, respectively, for those time periods. Net
    interest income for the year increased 0.5% while our net interest margin
    declined 14 basis points.
  *Nonperforming loans at $36.0 million decreased $1.3 million from December
    31, 2011 but increased $2.0 million from September 30, 2012. Nonperforming
    assets at $83.0 million decreased $10.9 million from prior year and $6.6
    million from prior quarter.
  *Net loan charge-offs for both of the quarters ended December 31, 2012 and
    September 30, 2012 were $2.9 million, or 0.45% of average loans
    annualized, compared to $4.9 million, or 0.75%, experienced for the fourth
    quarter 2011. Net charge-offs for the year 2012 were $9.4 million compared
    to $14.9 million for the year 2011.
  *Our loan loss provision for the quarter decreased $0.09 million from prior
    year fourth quarter and $0.03 million from prior quarter. Our loan loss
    provision for the year 2012 was $3.8 million below 2011 as net charge-offs
    declined $5.5 million and loans declined $6.0 million.
  *Our loan loss reserve as a percentage of total loans outstanding remained
    at 1.30% from December 31, 2011 to December 31, 2012. Our reserve coverage
    (allowance for loan loss reserve to nonperforming loans) at December 31,
    2012 was 92.3% compared to 89.0% at December 31, 2011 and 97.5% at
    September 30, 2012.
  *Noninterest income increased 3.3% for the quarter ended December 31, 2012
    compared to the same period in 2011 and 10.2% from prior quarter.
    Noninterest income for the year 2012 has increased 4.8% as a result of
    increased gains on sales of loans, trust revenue, and loan related fees,
    as well as a $1.0 million increase in net securities gains.
  *Noninterest expense for the quarter ended December 31, 2012 increased from
    prior year fourth quarter and prior quarter, primarily as a result of
    increased personnel expense associated with the employee incentive
    accrual. Noninterest expense for the year decreased 2.7% from prior year
    as a result of decreases in FDIC insurance premiums, legal fees, other
    real estate owned expense, and repossession expense, partially offset by
    an increase in personnel expense.
  *Our loan portfolio decreased $6.0 million from prior year and $1.0 million
    during the quarter.
  *Our investment portfolio increased $75.9 million from prior year but
    decreased $17.9 million during the quarter.
  *Deposits, including repurchase agreements, increased $18.4 million from
    prior year but declined $16.4 million from prior quarter.
  *Our tangible common equity/tangible assets ratio remains strong at 9.36%.

Net Interest Income

Net interest income for the quarter increased $0.9 million from prior year and
$0.7 million from prior quarter with average earning assets increasing 1.9%
and 0.3% and our net interest margin increasing 5 basis points and 7 basis
points for the same periods. The yield on average earning assets decreased 19
basis points from prior year fourth quarter and 6 basis points from prior
quarter. Loans represented 75.5% of our average earning assets for the quarter
ended December 31, 2012 compared to 77.3% for the quarter ended December 31,
2011 and 75.4% for the quarter ended September 30, 2012. The cost of interest
bearing funds decreased 28 basis points from prior year fourth quarter and 16
basis points from prior quarter. Net interest income for the year 2012
increased $0.7 million as our net interest margin declined 14 basis points and
average earning assets increased 4.2%. The increased cost of our Hoops CD
product resulting from the University of Kentucky’s national championship win
increased our cost of interest bearing funds and decreased our net interest
margin by approximately 2 basis points during the fourth quarter 2012,
approximately 6 basis points during the third quarter 2012, and approximately
4 basis points for the year.

Noninterest Income

Noninterest income increased 3.3% for the fourth quarter 2012 compared to the
fourth quarter 2011 and 10.2% from prior quarter, primarily as a result of
increased loan related fees. Noninterest income for the year 2012 has
increased 4.8% as a result of increased gains on sales of loans, trust
revenue, and loan related fees, partially offset by a decline in deposit
service charges. Loan related fees were impacted by a $0.8 million variance
year over year in adjustments to the fair value of our mortgage servicing
rights, as well as the receipt of a $0.4 million commercial loan prepayment
penalty. Noninterest income was also impacted by $1.2 million in net
securities gains for the year 2012 compared to $0.2 million for the year 2011.

Noninterest Expense

Noninterest expense for the fourth quarter 2012 increased from prior year
fourth quarter and prior quarter, primarily as a result of increased personnel
expense associated with the employee incentive accrual. Noninterest expense
for the year decreased 2.7% from prior year as a result of decreases in FDIC
insurance premiums, legal fees, other real estate owned expense, and
repossession expense, partially offset by an increase in personnel expense.

Balance Sheet Review

CTBI’s total assets at $3.6 billion increased $44.5 million, or 1.2%, from
December 31, 2011 but declined $5.9 million, or an annualized 0.6%, during the
quarter. Loans outstanding at December 31, 2012 were $2.6 billion, decreasing
$6.0 million, or 0.2%, from December 31, 2011 and $1.0 million, or an
annualized 0.2%, during the quarter. Loan growth during the year of $8.5
million in the commercial loan portfolio and $45.8 million in the residential
loan portfolio was offset by a decline of $60.3 million in the consumer loan
portfolio, primarily in our indirect auto lending area. CTBI’s investment
portfolio increased $75.9 million, or 14.4%, from December 31, 2011 but
decreased $17.9 million, or an annualized 11.4%, during the quarter. Deposits,
including repurchase agreements, at $3.1 billion increased $18.4 million, or
0.6%, from December 31, 2011 but decreased $16.4 million, or an annualized
2.1%, from prior quarter.

Shareholders’ equity at December 31, 2012 was $400.3 million compared to
$366.9 million at December 31, 2011 and $396.1 million at September 30, 2012.
CTBI’s annualized dividend yield to shareholders as of December 31, 2012 was
3.84%.

Asset Quality

CTBI’s total nonperforming loans were $36.0 million at December 31, 2012, a
3.4% decrease from the $37.3 million at December 31, 2011 but a 5.8% increase
from the $34.0 million at September 30, 2012. The increase for the quarter
included a $3.3 million increase in the 90+ days past due category partially
offset by a $1.3 million decrease in nonaccrual loans. The increase in the 90+
past due loans is made up of various commercial loans that are considered to
be well secured and in the process of collection. Loans 30-89 days past due at
$27.0 million is an increase of $5.3 million from December 31, 2011 and a $5.5
million increase from prior quarter. The increase in our 30-89 days past due
loans is primarily one commercial relationship collateralized by income
producing property and is considered well secured. Our loan portfolio
management processes focus on the immediate identification, management, and
resolution of problem loans to maximize recovery and minimize loss. Impaired
loans, loans not expected to meet contractual principal and interest payments
other than insignificant delays, at December 31, 2012 totaled $60.7 million,
compared to $47.4 million at December 31, 2011 and $60.9 million at September
30, 2012.

Our level of foreclosed properties at $47.0 million at December 31, 2012 was a
decrease from $56.5 million at December 31, 2011 and $55.6 million at
September 30, 2012. Sales of foreclosed properties for the year ended December
31, 2012 totaled $19.3 million while new foreclosed properties totaled $12.0
million. At December 31, 2012, the book value of properties under contracts to
sell was $3.3 million; however, the closings had not occurred at quarter-end.

Net loan charge-offs for the quarters ended December 31, 2012 and September
30, 2012 were $2.9 million, or 0.45% of average loans annualized, compared to
$4.9 million, or 0.75%, experienced for the fourth quarter 2011. Of the total
net charge-offs for the quarter, $0.8 million were in commercial loans, $0.9
million were in indirect auto loans, and $0.4 million were in residential real
estate mortgage loans. Allocations to loan loss reserves were $2.9 million for
the quarters ended September 30, 2012 and December 31, 2012 compared to $3.0
million for the quarter ended December 31, 2011. Net charge-offs for the year
2012 were $9.4 million, or 0.37% of average loans, compared to $14.9 million,
or 0.58% of average loans, for the year 2011. Our loan loss reserve as a
percentage of total loans outstanding has remained at 1.30% from December 31,
2011 to December 31, 2012. Our reserve coverage was 92.3% at December 31,
2012.

Forward-Looking Statements

Certain of the statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. CTBI’s actual results may differ materially from those
included in the forward-looking statements. Forward-looking statements are
typically identified by words or phrases such as "believe," "expect,"
"anticipate," "intend," "estimate," "may increase," "may fluctuate," and
similar expressions or future or conditional verbs such as "will," "should,"
"would," and "could." These forward-looking statements involve risks and
uncertainties including, but not limited to, economic conditions, portfolio
growth, the credit performance of the portfolios, including bankruptcies, and
seasonal factors; changes in general economic conditions including the
performance of financial markets, the performance of coal and coal related
industries, prevailing inflation and interest rates, realized gains from sales
of investments, gains from asset sales, and losses on commercial lending
activities; results of various investment activities; the effects of
competitors’ pricing policies, of changes in laws and regulations on
competition and of demographic changes on target market populations’ savings
and financial planning needs; industry changes in information technology
systems on which we are highly dependent; failure of acquisitions to produce
revenue enhancements or cost savings at levels or within the time frames
originally anticipated or unforeseen integration difficulties; the adoption by
CTBI of an FFIEC policy that provides guidance on the reporting of delinquent
consumer loans and the timing of associated credit charge-offs for financial
institution subsidiaries; and the resolution of legal proceedings and related
matters. In addition, the banking industry in general is subject to various
monetary and fiscal policies and regulations, which include those determined
by the Federal Reserve Board, the Federal Deposit Insurance Corporation, and
state regulators, whose policies and regulations could affect CTBI’s results.
These statements are representative only on the date hereof, and CTBI
undertakes no obligation to update any forward-looking statements made.

Community Trust Bancorp, Inc., with assets of $3.6 billion, is headquartered
in Pikeville, Kentucky and has 71 banking locations across eastern,
northeastern, central, and south central Kentucky, six banking locations in
southern West Virginia, four banking locations in northeastern Tennessee, four
trust offices across Kentucky, and one trust office in Tennessee.

Additional information follows.


Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
December 31, 2012
(in thousands except per share data and # of employees)
                                                                               
                  Three             Three             Three             Twelve            Twelve
                  Months            Months            Months            Months            Months
                  Ended             Ended             Ended             Ended             Ended
                  December 31,      September 30,     December 31,      December 31,      December 31,
                  2012              2012              2011              2012              2011
Interest          $ 38,091          $ 38,450          $ 39,051          $ 153,722         $ 158,460
income
Interest           4,328           5,404           6,143           21,588          27,005    
expense
Net interest        33,763            33,046            32,908            132,134           131,455
income
Loan loss           2,946             2,919             3,040             9,450             13,262
provision
                                                                                          
Gains on
sales of            580               660               583               2,562             1,749
loans
Deposit
service             6,131             6,038             6,577             23,996            25,576
charges
Trust revenue       1,749             1,734             1,564             6,918             6,354
Loan related        1,514             631               763               4,042             2,372
fees
Securities          336               -                 218               1,155             218
gains
Other
noninterest        1,633           1,775           1,854           7,284           7,563     
income
Total
noninterest         11,943            10,838            11,559            45,957            43,832
income
                                                                                          
Personnel           13,388            13,285            11,754            51,888            48,795
expense
Occupancy and       2,871             2,926             2,855             11,422            11,679
equipment
FDIC
insurance           640               643               638               2,553             3,192
premiums
Amortization
of core             53                53                53                213               213
deposit
intangible
Other
noninterest        10,891          8,906           11,567          37,478          42,508    
expense
Total
noninterest        27,843          25,813          26,867          103,554         106,387   
expense
                                                                                          
Net income          14,917            15,152            14,560            65,087            55,638
before taxes
Income taxes       4,365           4,943           4,672           20,225          16,811    
Net income        $ 10,552         $ 10,209         $ 9,888          $ 44,862         $ 38,827    
                                                                                          
Memo: TEQ
interest          $ 38,549          $ 38,922          $ 39,468          $ 155,556         $ 160,037
income
                                                                                          
Average
shares              15,516            15,491            15,332            15,466            15,313
outstanding
Diluted
average             15,572            15,555            15,384            15,521            15,364
shares
outstanding
Basic
earnings per      $ 0.68            $ 0.66            $ 0.64            $ 2.90            $ 2.54
share
Diluted
earnings per      $ 0.68            $ 0.66            $ 0.64            $ 2.89            $ 2.53
share
Dividends per     $ 0.315           $ 0.315           $ 0.310           $ 1.25            $ 1.23
share
                                                                                          
Average
balances:
Loans             $ 2,554,130       $ 2,542,832       $ 2,566,047       $ 2,549,459       $ 2,580,351
Earning             3,381,936         3,371,420         3,320,294         3,357,134         3,221,648
assets
Total assets        3,658,845         3,650,422         3,611,517         3,641,660         3,505,903
Deposits            2,933,737         2,940,138         2,868,998         2,928,579         2,811,333
Interest
bearing             2,598,929         2,611,981         2,593,362         2,610,495         2,540,317
liabilities
Shareholders’       400,846           395,902           366,352           389,377           355,773
equity
                                                                                          
Performance
ratios:
Return on
average             1.15      %       1.11      %       1.09      %       1.23      %       1.11      %
assets
Return on
average             10.47     %       10.26     %       10.71     %       11.52     %       10.91     %
equity
Yield on
average
earning             4.53      %       4.59      %       4.72      %       4.63      %       4.97      %
assets (tax
equivalent)
Cost of
interest
bearing funds       0.66      %       0.82      %       0.94      %       0.83      %       1.06      %
(tax
equivalent)
Net interest
margin (tax         4.03      %       3.96      %       3.98      %       3.99      %       4.13      %
equivalent)
Efficiency
ratio (tax          60.75     %       58.19     %       60.15     %       57.93     %       60.23     %
equivalent)
                                                                                          
Loan              $ 3,593           $ 3,664           $ 5,446           $ 12,590          $ 17,534
charge-offs
Recoveries         (703      )      (800      )      (578      )      (3,214    )      (2,638    )
Net               $ 2,890           $ 2,864           $ 4,868           $ 9,376           $ 14,896
charge-offs
                                                                                          
Market Price:
High              $ 36.40           $ 36.92           $ 29.99           $ 36.92           $ 30.35
Low                 29.60             33.15             22.28             29.13             22.28
Close               32.78             35.53             29.42             32.78             29.42
                                                                                                      


Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
December 31, 2012
(in thousands except per share data and # of employees)

                  As of              As of              As of
                    December 31,         September 30,        December 31,
                    2012                 2012                 2011
Assets:
Loans               $  2,550,573         $  2,551,537         $  2,556,548
Loan loss             (33,245    )        (33,189    )        (33,171    )
reserve
Net loans              2,517,328            2,518,348            2,523,377
Loans held for         22,486               771                  536
sale
Securities AFS         603,343              621,230              527,398
Securities HTM         1,662                1,662                1,662
Other equity           30,558               30,558               30,556
investments
Other earning          141,290              153,663              182,484
assets
Cash and due           73,451               59,480               69,723
from banks
Premises and           54,321               55,068               54,297
equipment
Goodwill and
core deposit           66,394               66,447               66,607
intangible
Other assets          124,831            134,304            134,539    
Total Assets        $  3,635,664        $  3,641,531        $  3,591,179  
                                                              
Liabilities and
Equity:
NOW accounts        $  28,717            $  22,200            $  19,113
Savings                853,716              848,068              821,036
deposits
CD's >=$100,000        643,629              647,433              647,557
Other time            771,338            794,159            805,918    
deposits
Total interest
bearing                2,297,400            2,311,860            2,293,624
deposits
Noninterest
bearing               606,448            599,984            584,735    
deposits
Total deposits         2,903,848            2,911,844            2,878,359
Repurchase             210,120              218,511              217,177
agreements
Other interest
bearing                75,084               71,634               96,054
liabilities
Noninterest
bearing               46,268             43,445             32,723     
liabilities
Total                  3,235,320            3,245,434            3,224,313
liabilities
Shareholders'         400,344            396,097            366,866    
equity
Total
Liabilities and     $  3,635,664        $  3,641,531        $  3,591,179  
Equity
                                                              
Ending shares          15,613               15,604               15,430
outstanding
Memo: Market
value of HTM        $  1,659             $  1,664             $  1,661
securities
                                                              
30 - 89 days        $  27,030            $  21,539            $  21,721
past due loans
90 days past           19,215               15,928               11,515
due loans
Nonaccrual             16,791               18,098               25,753
loans
Restructured
loans (included
in impaired
loans,                 22,242               22,745               19,305
excluding 90+
days past due
and nonaccrual)
Foreclosed             46,986               55,551               56,545
properties
Other
repossessed            5                    25                   58
assets
                                                              
Tier 1 leverage        10.65      %         10.51      %         9.89       %
ratio
Tier 1 risk            15.23      %         14.86      %         13.88      %
based ratio
Total risk             16.49      %         16.12      %         15.14      %
based ratio
Tangible equity
to tangible            9.36       %         9.22       %         8.52       %
assets ratio
FTE employees          1,035                1,032                1,015
                                                                            


Community Trust Bancorp, Inc.
Financial Summary (Unaudited)
December 31, 2012
(in thousands except per share data and # of employees)

Community Trust Bancorp, Inc. reported earnings for the three and twelve
months ending December 31, 2012 and 2011 as follows:
                                                           
                 Three Months Ended                  Twelve Months Ended
                 December 31                         December 31
                 2012              2011              2012           2011
Net income       $ 10,552          $ 9,888           $ 44,862       $ 38,827
                                                                    
Basic
earnings per     $ 0.68            $ 0.64            $ 2.90         $ 2.54
share
                                                                    
Diluted
earnings per     $ 0.68            $ 0.64            $ 2.89         $ 2.53
share
                                                                    
Average
shares             15,516            15,332            15,466         15,313
outstanding
                                                                    
Total assets
(end of          $ 3,635,664       $ 3,591,179
period)
                                                                    
Return on
average            10.47     %       10.71     %       11.52  %       10.91  %
equity
                                                                    
Return on
average            1.15      %       1.09      %       1.23   %       1.11   %
assets
                                                                    
Provision
for loan         $ 2,946           $ 3,040           $ 9,450        $ 13,262
losses
                                                                    
Gains on
sales of         $ 580             $ 583             $ 2,562        $ 1,749
loans
                                                                    

Contact:

Community Trust Bancorp, Inc.
Jean R. Hale, 606-437-3294
Chairman, President, and C.E.O.