[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the quarterly period ended March 31, 2009
|
|
Or
|
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the transition period from _____________ to
_____________
|
|
Kentucky
|
61-0979818
|
(State
or other jurisdiction of incorporation or organization)
|
IRS
Employer Identification No.
|
346
North Mayo Trail
Pikeville,
Kentucky
(address
of principal executive offices)
|
41501
(Zip
Code)
|
Yes ü
|
No
|
Large
accelerated filer
|
Accelerated
filer ü
|
Non-accelerated
filer
|
Smaller
reporting company
|
(Do
not check if a smaller reporting company)
|
Yes
|
No
ü
|
(dollars
in thousands)
|
(unaudited)
March
31
2009
|
December
31
2008
|
||||||
Assets:
|
||||||||
Cash
and due from banks
|
$ | 86,646 | $ | 89,576 | ||||
Interest
bearing deposits
|
6,601 | 5,422 | ||||||
Federal
funds sold
|
97,498 | 45,880 | ||||||
Cash
and cash equivalents
|
190,745 | 140,878 | ||||||
Other
short-term investments
|
23,620 | 100 | ||||||
Securities
available-for-sale at fair value
|
||||||||
(amortized
cost of $263,661 and $265,999, respectively)
|
267,003 | 267,376 | ||||||
Securities
held-to-maturity at amortized cost
|
||||||||
(fair
value of $24,150 and $25,496, respectively)
|
23,782 | 25,597 | ||||||
Loans
held for sale
|
3,085 | 623 | ||||||
Loans
|
2,335,607 | 2,348,651 | ||||||
Allowance
for loan losses
|
(30,599 | ) | (30,821 | ) | ||||
Net
loans
|
2,305,008 | 2,317,830 | ||||||
Premises
and equipment, net
|
51,280 | 51,590 | ||||||
Federal
Reserve Bank and Federal Home Loan Bank stock
|
29,045 | 29,040 | ||||||
Goodwill
|
65,059 | 65,059 | ||||||
Core
deposit intangible (net of accumulated amortization of $6,380
and
|
||||||||
$6,222,
respectively)
|
1,124 | 1,282 | ||||||
Bank
owned life insurance
|
25,289 | 24,135 | ||||||
Mortgage
servicing rights
|
2,475 | 2,168 | ||||||
Other
assets
|
34,684 | 28,853 | ||||||
Total
assets
|
$ | 3,022,199 | $ | 2,954,531 | ||||
Liabilities
and shareholders’ equity:
|
||||||||
Deposits
|
||||||||
Noninterest
bearing
|
$ | 469,096 | $ | 450,360 | ||||
Interest
bearing
|
1,914,344 | 1,881,474 | ||||||
Total
deposits
|
2,383,440 | 2,331,834 | ||||||
Repurchase
agreements
|
148,707 | 157,422 | ||||||
Federal
funds purchased and other short-term borrowings
|
26,497 | 11,492 | ||||||
Advances
from Federal Home Loan Bank
|
60,708 | 60,727 | ||||||
Long-term
debt
|
61,341 | 61,341 | ||||||
Other
liabilities
|
28,892 | 23,509 | ||||||
Total
liabilities
|
2,709,585 | 2,646,325 | ||||||
Shareholders’
equity:
|
||||||||
Preferred
stock, 300,000 shares authorized and unissued
|
- | - | ||||||
Common
stock, $5 par value, shares authorized 25,000,000;
|
||||||||
shares
outstanding 2009 –15,075,662 ; 2008 – 15,066,248
|
75,378 | 75,331 | ||||||
Capital
surplus
|
150,472 | 150,037 | ||||||
Retained
earnings
|
84,783 | 81,943 | ||||||
Accumulated
other comprehensive income, net of tax
|
1,981 | 895 | ||||||
Total
shareholders’ equity
|
312,614 | 308,206 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 3,022,199 | $ | 2,954,531 |
Three
Months Ended
|
||||||||
March
31
|
||||||||
(in
thousands except per share data)
|
2009
|
2008
|
||||||
Interest
income:
|
||||||||
Interest
and fees on loans, including loans held for sale
|
$ | 34,188 | $ | 39,755 | ||||
Interest
and dividends on securities
|
||||||||
Taxable
|
2,599 | 3,412 | ||||||
Tax
exempt
|
430 | 474 | ||||||
Interest
and dividends on Federal Reserve and Federal Home Loan Bank
stock
|
344 | 509 | ||||||
Other,
including interest on federal funds sold
|
115 | 530 | ||||||
Total
interest income
|
37,676 | 44,680 | ||||||
Interest
expense:
|
||||||||
Interest
on deposits
|
11,054 | 15,527 | ||||||
Interest
on repurchase agreements and other short-term borrowings
|
672 | 1,468 | ||||||
Interest
on advances from Federal Home Loan Bank
|
476 | 377 | ||||||
Interest
on long-term debt
|
1,000 | 1,000 | ||||||
Total
interest expense
|
13,202 | 18,372 | ||||||
Net
interest income
|
24,474 | 26,308 | ||||||
Provision
for loan losses
|
1,981 | 2,369 | ||||||
Net
interest income after provision for loan losses
|
22,493 | 23,939 | ||||||
Noninterest
income:
|
||||||||
Service
charges on deposit accounts
|
4,949 | 5,099 | ||||||
Gains
on sales of loans, net
|
1,931 | 546 | ||||||
Trust
income
|
1,162 | 1,191 | ||||||
Loan
related fees
|
748 | 299 | ||||||
Bank
owned life insurance
|
256 | 263 | ||||||
Securities
gains (losses)
|
519 | (50 | ) | |||||
Other
|
1,188 | 1,395 | ||||||
Total
noninterest income
|
10,753 | 8,743 | ||||||
Noninterest
expense:
|
||||||||
Salaries
and employee benefits
|
11,268 | 10,711 | ||||||
Occupancy,
net
|
1,804 | 1,626 | ||||||
Equipment
|
1,119 | 1,053 | ||||||
Data
processing
|
1,487 | 1,381 | ||||||
Bank
franchise tax
|
910 | 890 | ||||||
Legal
and professional fees
|
1,070 | 713 | ||||||
Other
|
4,764 | 3,627 | ||||||
Total
noninterest expense
|
22,422 | 20,001 | ||||||
Income
before income taxes
|
10,824 | 12,681 | ||||||
Income
taxes
|
3,461 | 4,136 | ||||||
Net
income
|
7,363 | 8,545 | ||||||
Other
comprehensive income, net of tax:
|
||||||||
Unrealized
holding gains on securities available-for-sale
|
1,086 | 3,031 | ||||||
Comprehensive
income
|
$ | 8,449 | $ | 11,576 | ||||
Basic
earnings per share
|
$ | 0.49 | $ | 0.57 | ||||
Diluted
earnings per share
|
$ | 0.48 | $ | 0.57 | ||||
Weighted
average shares outstanding-basic
|
15,076 | 15,000 | ||||||
Weighted
average shares outstanding-diluted
|
15,193 | 15,116 | ||||||
Dividends
per share
|
$ | 0.30 | $ | 0.29 |
Three
months ended
|
||||||||
March
31
|
||||||||
(in
thousands)
|
2009
|
2008
|
||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 7,363 | $ | 8,545 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
1,274 | 1,292 | ||||||
Deferred
taxes
|
3,191 | 1,492 | ||||||
Stock
based compensation
|
147 | 186 | ||||||
Excess
tax benefits of stock-based compensation
|
149 | 241 | ||||||
Provision
for loan and other real estate losses
|
2,308 | 2,401 | ||||||
Securities
gains/(losses)
|
(519 | ) | 50 | |||||
Gains
on sale of mortgage loans held for sale
|
(1,931 | ) | (546 | ) | ||||
Losses
on sale of assets, net
|
(11 | ) | (37 | ) | ||||
Proceeds
from sale of mortgage loans held for sale
|
96,211 | 26,056 | ||||||
Funding
of mortgage loans held for sale
|
(96,742 | ) | (24,485 | ) | ||||
Amortization
of securities premiums, net
|
168 | (7 | ) | |||||
Change
in cash surrender value of bank owned life insurance
|
(209 | ) | (223 | ) | ||||
Fair
value adjustments of mortgage servicing rights
|
274 | 535 | ||||||
Changes
in:
|
||||||||
Other
liabilities
|
1,305 | 996 | ||||||
Other
assets
|
(1,714 | ) | 1,422 | |||||
Net
cash provided by operating activities
|
11,264 | 17,804 | ||||||
Cash
flows from investing activities:
|
||||||||
Investment
in other short-term investments
|
(23,520 | ) | 0 | |||||
Securities
available-for-sale:
|
||||||||
Proceeds
from sales
|
37,209 | 29,950 | ||||||
Proceeds
from prepayments and maturities
|
15,242 | 10,425 | ||||||
Purchase
of securities
|
(49,745 | ) | (11,443 | ) | ||||
Securities
held-to-maturity:
|
||||||||
Proceeds
from prepayments and maturities
|
2,283 | 1,832 | ||||||
Purchase
of securities
|
(480 | ) | 0 | |||||
Change
in loans, net
|
5,387 | (27,383 | ) | |||||
Purchase
of premises, equipment, and other real estate
|
(806 | ) | (574 | ) | ||||
Proceeds
from sale of premises and equipment
|
9 | 0 | ||||||
Additional
investment in equity securities
|
(5 | ) | (4 | ) | ||||
Proceeds
from sale of other real estate and other repossessed
assets
|
460 | 2,155 | ||||||
Additional
investment in other real estate owned
|
(29 | ) | (76 | ) | ||||
Additional
investment in bank owned life insurance
|
(945 | ) | 0 | |||||
Net
cash provided by (used in) investing activities
|
(14,940 | ) | 4,882 | |||||
Cash
flows from financing activities:
|
||||||||
Change
in deposits, net
|
51,606 | 12,403 | ||||||
Change
in repurchase agreements and other short-term borrowings,
net
|
6,290 | (20,094 | ) | |||||
Payments
on advances from Federal Home Loan Bank
|
(19 | ) | (48 | ) | ||||
Issuance
of common stock
|
333 | 647 | ||||||
Purchase
of common stock
|
0 | (2,631 | ) | |||||
Excess
tax benefits of stock-based compensation
|
(149 | ) | (241 | ) | ||||
Dividends
paid
|
(4,518 | ) | (4,360 | ) | ||||
Net
cash provided by (used in) financing activities
|
53,543 | (14,324 | ) | |||||
Net
increase in cash and cash equivalents
|
49,867 | 8,362 | ||||||
Cash
and cash equivalents at beginning of period
|
140,878 | 137,250 | ||||||
Cash
and cash equivalents at end of period
|
$ | 190,745 | $ | 145,612 | ||||
Supplemental
disclosures:
|
||||||||
Income
taxes paid
|
$ | 52 | $ | 1,254 | ||||
Interest
paid
|
15,261 | 16,940 | ||||||
Non-cash
activities
|
||||||||
Loans
to facilitate the sale of other real estate and other repossessed
assets
|
81 | 281 | ||||||
Common
stock dividends accrued, paid in subsequent quarter
|
4,523 | 4,339 | ||||||
Real
estate acquired in settlement of loans
|
5,535 | 1,921 |
Three
Months Ended
|
||||||||
March
31
|
||||||||
2009
|
2008
|
|||||||
Expected
dividend yield
|
4.02 | % | 4.10 | % | ||||
Risk-free
interest rate
|
2.23 | % | 3.23 | % | ||||
Expected
volatility
|
37.12 | % | 31.01 | % | ||||
Expected
term (in years)
|
7.5 | 7.5 | ||||||
Weighted
average fair value of options
|
$ | 7.69 | $ | 6.41 |
(in
thousands)
|
Amortized
Cost
|
Fair
Value
|
||||||
U.S.
Treasury and government agencies
|
$ | 11,998 | $ | 12,107 | ||||
State
and political subdivisions
|
44,385 | 44,978 | ||||||
U.S.
government sponsored agencies and mortgage-backed pass through
certificates
|
186,737 | 189,797 | ||||||
Collateralized
mortgage obligations
|
1 | 1 | ||||||
Total
debt securities
|
243,121 | 246,883 | ||||||
Marketable
equity securities
|
20,540 | 20,120 | ||||||
Total
available-for-sale securities
|
$ | 263,661 | $ | 267,003 |
(in
thousands)
|
Amortized
Cost
|
Fair
Value
|
||||||
State
and political subdivisions
|
$ | 1,576 | $ | 1,586 | ||||
U.S.
government sponsored agencies and mortgage-backed pass through
certificates
|
21,726 | 22,084 | ||||||
Other
debt securities
|
480 | 480 | ||||||
Total
held-to-maturity securities
|
$ | 23,782 | $ | 24,150 |
(in
thousands)
|
Amortized
Cost
|
Fair
Value
|
||||||
U.S.
Treasury and government agencies
|
$ | 18,330 | $ | 18,906 | ||||
State
and political subdivisions
|
39,738 | 39,844 | ||||||
U.S.
government sponsored agencies and mortgage-backed pass through
certificates
|
187,390 | 188,305 | ||||||
Collateralized
mortgage obligations
|
1 | 1 | ||||||
Other
debt securities
|
20,000 | 19,780 | ||||||
Total
debt securities
|
265,459 | 266,836 | ||||||
Marketable
equity securities
|
540 | 540 | ||||||
Total
available-for-sale securities
|
$ | 265,999 | $ | 267,376 |
(in
thousands)
|
Amortized
Cost
|
Fair
Value
|
||||||
State
and political subdivisions
|
$ | 1,576 | $ | 1,585 | ||||
U.S.
government sponsored agencies and mortgage-backed pass through
certificates
|
24,021 | 23,911 | ||||||
Total
held-to-maturity securities
|
$ | 25,597 | $ | 25,496 |
(in
thousands)
|
March
31
2009
|
December
31
2008
|
||||||
Commercial
construction
|
$ | 143,660 | $ | 156,425 | ||||
Commercial
secured by real estate
|
682,003 | 663,663 | ||||||
Commercial
other
|
373,903 | 365,685 | ||||||
Real
estate construction
|
52,265 | 56,298 | ||||||
Real
estate mortgage
|
578,432 | 609,394 | ||||||
Consumer
|
488,738 | 484,843 | ||||||
Equipment
lease financing
|
16,606 | 12,343 | ||||||
Total
loans
|
$ | 2,335,607 | $ | 2,348,651 |
Three
Months Ended
|
||||||||
March
31
|
||||||||
(in
thousands)
|
2009
|
2008
|
||||||
Allowance
balance at January 1
|
$ | 30,821 | $ | 28,054 | ||||
Additions
to allowance charged against operations
|
1,981 | 2,369 | ||||||
Recoveries
credited to allowance
|
856 | 586 | ||||||
Losses
charged against allowance
|
(3,059 | ) | (2,410 | ) | ||||
Allowance
balance at March 31
|
$ | 30,599 | $ | 28,599 |
Three
Months Ended
|
||||||||
March
31
|
||||||||
(in
thousands)
|
2009
|
2008
|
||||||
Net
gain on sale of loans held for sale
|
$ | 1,931 | $ | 546 | ||||
Net
loan servicing income
|
||||||||
Servicing
fees
|
238 | 213 | ||||||
Late
fees
|
18 | 17 | ||||||
Ancillary
fees
|
226 | 71 | ||||||
Fair
value adjustments
|
(274 | ) | (535 | ) | ||||
Net
loan servicing income (loss)
|
208 | (234 | ) | |||||
Mortgage
banking income
|
$ | 2,139 | $ | 312 |
Three
Months Ended
|
||||||||
March
31
|
||||||||
(in
thousands)
|
2009
|
2008
|
||||||
Fair
value, beginning of period
|
$ | 2,168 | $ | 3,258 | ||||
New
servicing assets created
|
581 | 113 | ||||||
Change
in fair value during the period due to:
|
||||||||
Time
decay (1)
|
(33 | ) | (42 | ) | ||||
Payoffs
(2)
|
(202 | ) | (72 | ) | ||||
Changes
in valuation inputs or assumptions (3)
|
(39 | ) | (420 | ) | ||||
Fair
value, end of period
|
$ | 2,475 | $ | 2,837 |
(1)
|
Represents
decrease in value due to regularly scheduled loan principal payments and
partial loan paydowns.
|
(2)
|
Represents
decrease in value due to loans that paid off during the
period.
|
(3)
|
Represents
change in value resulting from market-driven changes in interest rates and
prepayment speeds.
|
(in
thousands)
|
March
31
2009
|
December
31
2008
|
||||||
Subsidiaries:
|
||||||||
Repurchase
agreements
|
$ | 148,707 | $ | 157,422 | ||||
Federal
funds purchased
|
26,497 | 11,492 | ||||||
Total
short-term debt
|
$ | 175,204 | $ | 168,914 |
(in
thousands)
|
March
31
2009
|
December
31
2008
|
||||||
Monthly
amortizing
|
$ | 708 | $ | 727 | ||||
Term
|
60,000 | 60,000 | ||||||
$ | 60,708 | $ | 60,727 |
Principal
Payments Due by Period at March 31, 2009
|
||||||||||||||||||||||||||||
(in
thousands)
|
Total
|
Within
1 Year
|
2
Years
|
3
Years
|
4
Years
|
5
Years
|
After
5 Years
|
|||||||||||||||||||||
Outstanding
advances, weighted average interest rate – 3.74%
|
$ | 708 | $ | 467 | $ | 189 | $ | 8 | $ | 8 | $ | 8 | $ | 28 |
(in
thousands)
|
March
31
2009
|
December
31
2008
|
||||||
Advance
#154, 3.17%, due 8/04/09
|
$ | 20,000 | $ | 20,000 | ||||
Advance
#155, 3.18%, due 9/02/09
|
40,000 | 40,000 | ||||||
Total
Term Advances
|
$ | 460,000 | $ | 60,000 |
(in
thousands)
|
March
31
2009
|
December
31
2008
|
||||||
Junior
subordinated debentures, 6.52%, due 6/1/37
|
$ | 61,341 | $ | 61,341 |
Three
Months Ended
|
||||||||
March
31
|
||||||||
(in
thousands)
|
2009
|
2008
|
||||||
Numerator:
|
||||||||
Net
income
|
$ | 7,363 | $ | 8,545 | ||||
Denominator:
|
||||||||
Basic
earnings per share:
|
||||||||
Weighted
average shares
|
15,076 | 15,000 | ||||||
Diluted
earnings per share:
|
||||||||
Effect
of dilutive stock options
|
117 | 116 | ||||||
Adjusted
weighted average shares
|
15,193 | 15,116 | ||||||
Earnings
per share:
|
||||||||
Basic
earnings per share
|
$ | 0.49 | $ | 0.57 | ||||
Diluted
earnings per share
|
0.48 | 0.57 |
(in
thousands)
|
Fair
Value Measurements at
March
31, 2009 Using
|
|||||||||||||||
Fair
Value
March
31
2009
|
Quoted
Prices in Active Markets for Identical Assets
(Level
1)
|
Other
Observable Inputs
(Level
2)
|
Significant
Unobservable Inputs
(Level
3)
|
|||||||||||||
Available-for-sale
securities
|
$ | 267,003 | $ | 0 | $ | 266,792 | $ | 211 | ||||||||
Mortgage
servicing rights
|
2,475 | 0 | 0 | 2,475 | ||||||||||||
Total
recurring assets measured at fair value
|
$ | 269,478 | $ | 0 | $ | 266,792 | $ | 2,686 |
(in
thousands)
|
Available-for-Sale
Securities
|
Mortgage
Servicing Rights
|
||||||
Beginning
balance, January 1, 2009
|
$ | 540 | $ | 2,168 | ||||
Total
realized and unrealized gains and losses
|
||||||||
Included
in net income
|
0 | (39 | ) | |||||
Purchases,
issuances, and settlements
|
(329 | ) | 346 | |||||
Ending
balance, March 31, 2009
|
$ | 211 | $ | 2,475 |
(in
thousands)
|
Fair
Value Measurements at
March
31, 2009 Using
|
|||||||||||||||||||
Fair
Value
March
31
2009
|
Quoted
Prices in Active Markets for Identical Assets
(Level
1)
|
Other
Observable Inputs
(Level
2)
|
Significant
Unobservable Inputs
(Level
3)
|
Total
Gains (Losses)
|
||||||||||||||||
Impaired
loans
|
$ | 1,787 | $ | 0 | $ | 0 | $ | 1,787 | $ | (697 | ) | |||||||||
Other
real estate/assets owned
|
7,116 | 0 | 0 | 7,116 | (327 | ) |
Pay
Date
|
Record
Date
|
Amount
Per Share
|
|||
April
1, 2009
|
March
15, 2009
|
$ | 0.30 | ||
January
1, 2009
|
December
15, 2008
|
$ | 0.30 | ||
October
1, 2008
|
September
15, 2008
|
$ | 0.29 | ||
July
1, 2008
|
June
15, 2008
|
$ | 0.29 | ||
April
1, 2008
|
March
15, 2008
|
$ | 0.29 | ||
January
1, 2008
|
December
15, 2007
|
$ | 0.29 |
Earnings
Summary
|
||||||||||||
(in
thousands except per share data)
|
1Q 2009 | 4Q 2008 | 1Q 2008 | |||||||||
Net
income
|
$ | 7,363 | $ | 6,485 | $ | 8,545 | ||||||
Earnings
per share
|
$ | 0.49 | $ | 0.43 | $ | 0.57 | ||||||
Earnings
per share (diluted)
|
$ | 0.48 | $ | 0.43 | $ | 0.57 | ||||||
Return
on average assets
|
1.00 | % | 0.87 | % | 1.18 | % | ||||||
Return
on average equity
|
9.52 | % | 8.44 | % | 11.20 | % | ||||||
Efficiency
ratio
|
64.06 | % | 61.45 | % | 56.39 | % | ||||||
Tangible
common equity/tangible assets ratio
|
8.34 | % | 8.37 | % | 8.46 | % | ||||||
Dividends
declared per share
|
$ | 0.30 | $ | 0.30 | $ | 0.29 | ||||||
Book
value per share
|
$ | 20.74 | $ | 20.46 | $ | 20.48 | ||||||
Weighted
average shares
|
15,076 | 15,065 | 15,000 | |||||||||
Weighted
average shares (diluted)
|
15,193 | 15,221 | 15,116 |
v
|
CTBI
continues to maintain a significantly higher level of capital than
required by regulatory authorities to be designated as
well-capitalized. On March 31, 2009, our Tangible Common
Equity/Tangible Assets Ratio remained significantly higher than our peer
institutions at 8.34%, our Tier 1 Leverage Ratio of 10.38% was 538 basis
points higher than the 5.00% required, our Tier 1 Risk-Based Capital Ratio
of 13.08% was 708 basis points higher than the required 6.00%, and our
Total Risk-Based Capital Ratio of 14.33% was 433 basis points higher than
the 10.00% regulatory requirement for this
designation.
|
v
|
CTBI’s
basic earnings per share increased 14.0% from prior quarter as we continue
to successfully operate within challenging economic
conditions. Our prior quarter earnings were impacted by the
other than temporary impairment charge of $1.1 million based upon the
market value of Freddie Mac and Fannie Mae trust preferred pass-through
auction rate securities, as well as a $1.1 million decline in the fair
value of mortgage servicing rights. Basic earnings per share
decreased 14.0% from prior year first quarter primarily due to the decline
in net interest income.
|
v
|
Pressure
continued on our net interest margin due to the current interest rate
environment and economic conditions. Our net interest margin
for the quarter ended March 31, 2009 decreased 8 basis points from prior
quarter and 39 basis points from prior year. Net interest
income decreased $0.7 million and $1.8 million from prior quarter and
prior year as average earning assets increased by $37.9 million and $105.2
million, respectively.
|
v
|
Noninterest
income for the first quarter 2009, excluding gains and losses on
securities, increased 22.4% over prior quarter and 16.4% over prior year
first quarter. The quarter over quarter increase included a
$1.7 million increase in gains on sales of loans and a positive $0.8
million variance in the fair value of mortgage servicing
rights.
|
v
|
During
the quarter, CTBI did a small repositioning of our investment
portfolio. Gains on sales of securities for the 1st
quarter 2009 were $519 thousand, and the reinvestment of the proceeds
allowed us to increase the yield in the portfolio while only slightly
increasing the overall duration of the
portfolio.
|
v
|
Noninterest
expense increased 7.9% from prior quarter and 12.1% from prior year first
quarter primarily due to increases in legal, other real estate owned,
insurance, and repossession expenses from increased collection activity,
as well as increased personnel
expense.
|
v
|
Nonperforming
loans remained relatively flat from December 31, 2008 to March 31, 2009 at
$52.2 million. Nonperforming assets (nonperforming loans plus
OREO) increased $4.7 million from prior quarter-end, December 31, 2008,
and $17.3 million from prior year quarter-end, March 31,
2008.
|
v
|
Our
loan portfolio decreased an annualized 2.3% during the quarter with a
$13.0 million decline, primarily in the residential loan portfolio due to
the high level of refinancing activity from portfolio adjustable rate
loans to secondary market long-term fixed rate loans. Loan
growth from prior year was $83.8 million or
3.7%.
|
v
|
Our
investment portfolio decreased $2.2 million for the quarter and $40.2
million year over year.
|
v
|
Our
tangible common equity/tangible assets ratio remains strong at
8.34%.
|
Three
Months Ended
|
||||||||
March
31
|
||||||||
2009
|
2008
|
|||||||
Return
on average shareholders’ equity
|
9.52 | % | 11.20 | % | ||||
Return
on average assets
|
1.00 | % | 1.18 | % |
Three
Months Ended
|
||||||||
March
31
|
||||||||
2009
|
2008
|
|||||||
Yield
on interest earning assets
|
5.53 | % | 6.76 | % | ||||
Cost
of interest bearing funds
|
2.44 | % | 3.45 | % | ||||
Net
interest spread
|
3.09 | % | 3.31 | % | ||||
Net
interest margin
|
3.61 | % | 4.00 | % |
Three
Months Ended
|
||||||||
March
31
|
||||||||
(in
thousands)
|
2009
|
2008
|
||||||
Allowance
balance at January 1
|
$ | 30,821 | $ | 28,054 | ||||
Additions
to allowance charged against operations
|
1,981 | 2,369 | ||||||
Recoveries
credited to allowance
|
856 | 586 | ||||||
Losses
charged against allowance
|
(3,059 | ) | (2,410 | ) | ||||
Allowance
balance at March 31
|
$ | 30,599 | $ | 28,599 | ||||
Allowance
for loan losses to period-end loans
|
1.31 | % | 1.27 | % | ||||
Average
loans, net of unearned income
|
$ | 2,352,178 | $ | 2,239,608 | ||||
Provision
for loan losses to average loans, annualized
|
0.34 | % | 0.43 | % | ||||
Loan
charge-offs net of recoveries, to average loans,
annualized
|
0.38 | % | 0.33 | % |
(in
thousands)
|
Nonaccrual
Loans
|
As
a % of Loan Balances by Category
|
Restructured
Loans
|
As
a % of Loan Balances by Category
|
Accruing
Loans Past Due 90 Days or More
|
As
a % of Loan Balances by Category
|
Total
Loan Balances
|
|||||||||||||||||||||
March
31, 2009
|
||||||||||||||||||||||||||||
Commercial
construction
|
$ | 18,278 | 12.72 | % | $ | 0 | 0.00 | % | $ | 2,092 | 1.46 | % | $ | 143,660 | ||||||||||||||
Commercial
secured by real estate
|
11,304 | 1.66 | 0 | 0.00 | 5,824 | 0.85 | 682,003 | |||||||||||||||||||||
Commercial
other
|
4,895 | 1.31 | 0 | 0.00 | 2,257 | 0.60 | 373,903 | |||||||||||||||||||||
Consumer
real estate construction
|
759 | 1.45 | 0 | 0.00 | 1 | 0.00 | 52,265 | |||||||||||||||||||||
Consumer
real estate secured
|
4,170 | 0.72 | 0 | 0.00 | 2,256 | 0.39 | 578,432 | |||||||||||||||||||||
Consumer
other
|
0 | 0.00 | 0 | 0.00 | 330 | 0.07 | 488,738 | |||||||||||||||||||||
Equipment
lease financing
|
0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 16,606 | |||||||||||||||||||||
Total
|
$ | 39,406 | 1.69 | % | $ | 0 | 0.00 | % | $ | 12,760 | 0.55 | % | $ | 2,335,607 |
(in
thousands)
|
Nonaccrual
Loans
|
As
a % of Loan Balances by Category
|
Restructured
Loans
|
As
a % of Loan Balances by Category
|
Accruing
Loans Past Due 90 Days or More
|
As
a % of Loan Balances by Category
|
Total
Loan Balances
|
|||||||||||||||||||||
December
31, 2008
|
||||||||||||||||||||||||||||
Commercial
construction
|
$ | 21,602 | 13.81 | % | $ | 0 | 0.00 | % | $ | 3,741 | 2.39 | % | $ | 156,425 | ||||||||||||||
Commercial
secured by real estate
|
10,780 | 1.62 | 0 | 0.00 | 3,319 | 0.50 | 663,663 | |||||||||||||||||||||
Commercial
other
|
4,471 | 1.22 | 0 | 0.00 | 634 | 0.17 | 365,685 | |||||||||||||||||||||
Consumer
real estate construction
|
1,255 | 2.23 | 0 | 0.00 | 55 | 0.10 | 56,298 | |||||||||||||||||||||
Consumer
real estate secured
|
2,837 | 0.47 | 0 | 0.00 | 3,008 | 0.49 | 609,394 | |||||||||||||||||||||
Consumer
other
|
0 | 0.00 | 0 | 0.00 | 488 | 0.10 | 484,843 | |||||||||||||||||||||
Equipment
lease financing
|
0 | 0.00 | 0 | 0.00 | 0 | 0.00 | 12,343 | |||||||||||||||||||||
Total
|
$ | 40,945 | 1.74 | % | $ | 0 | 0.00 | % | $ | 11,245 | 0.48 | % | $ | 2,348,651 |
Item
1.
|
Legal
Proceedings
|
None
|
Item
1A.
|
Risk
Factors
|
None
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
None
|
Item
3.
|
Defaults
Upon Senior Securities
|
None
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
None
|
Item
5.
|
Other
Information:
|
|
CTBI’s
Principal Executive Officer and Principal Financial Officer have furnished
to the SEC the certifications with respect to this Form 10-Q that are
required by Sections 302 and 906 of the Sarbanes-Oxley Act of
2002
|
||
Item
6.
|
a.
Exhibits:
|
|
(1) Certifications
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
|
Exhibit
31.1
Exhibit
31.2
|
|
(2) Certifications
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
|
Exhibit
32.1
Exhibit
32.2
|
COMMUNITY TRUST BANCORP, INC. | |||
Date:
May 8, 2009
|
By:
|
/s/ Jean R. Hale | |
Jean R. Hale | |||
Chairman, President and Chief Executive Officer | |||
|
By:
|
/s/ Kevin J. Stumbo | |
Kevin J. Stumbo | |||
Executive Vice President/Treasurer | |||
(Principal Financial Officer) |