8-K
COMMUNITY TRUST BANCORP INC /KY/ (CTBI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
June 30, 2024
Commission file number 001-31220
Community Trust Bancorp, Inc.
(Exact name of registrant as specified in its charter)
| Kentucky | 61-0979818 |
|---|---|
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
| P.O. Box 2947<br><br> <br>346 North Mayo Trail<br><br> <br>Pikeville,<br> Kentucky | 41502 |
| (Address of principal executive offices) | (Zip code) |
| (606)<br> 432-1414<br><br> <br>(Registrant’s telephone number) | |
| Securities registered pursuant to Section 12(b) of the Act: | |
| Common Stock<br><br> <br>(Title of class) | |
| CTBI | The NASDAQ Global Select Market |
| (Trading symbol) | (Name of exchange on which registered) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 – Regulation FD Disclosure
Community Trust Bancorp, Inc. (“CTBI”) is presenting to investors at the Raymond James U.S. Bank and Banking on Technology Conferences in Chicago, Illinois on Wednesday, September 4, 2024. A presentation is being provided that is accompanied by a series of slides. These slides include information relating to CTBI’s current and historical financial results, as well as future performance goals. A copy of these slides is being furnished to the Securities and Exchange Commission pursuant to Item 7.01 – Regulation FD Disclosure of Form 8-K and is attached hereto as Exhibit 99.1. The information in this Form 8-K and in Exhibit 99.1 attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.
Item 9.01 – Financial Statements and Exhibits
(d) Exhibits
The following exhibit is filed with this report:
| 99.1 | September 2024 Investor Presentation |
|---|
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| COMMUNITY TRUST BANCORP, INC. | ||
|---|---|---|
| By: | ||
| Date: | September 3, 2024 | /s/ Mark A. Gooch |
| Mark A. Gooch | ||
| Chairman, President, and Chief Executive Officer |
Exhibit 99.1
September 2024
Cautionary Statement Information provided herein by CTBI contains “forward-looking” information. CTBI cautions that any forward-looking statements made are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. Please refer to CTBI’s 2023 Annual Report on Form 10-K, Cautionary Statement Regarding Forward Looking Statements for additional information. 2
Key Metrics Total Assets $5.8 billion Market Capitalization $787.0 million Cash Dividend Yield 4.21% P/E Ratio 10.0x Price to Book Value 1.1x Price to Tangible Book Value 1.2x Tangible Common Equity Ratio 11.39% Competitive Position 3rd largest Kentucky domiciled bank holding company 2nd in Kentucky in deposit market share of all Kentucky domiciled FDIC insured institutions 7th largest bank in Kentucky in terms of deposit market share of all FDIC insured institutions Financial data as of June 30, 2024 Deposit market share as of June 30, 2023 3
Corporate History 1903 Pikeville National bank formed 1987-2005 Acquired 14 banks and purchased 17 branch locations 1997 Changed name to Community Trust Bancorp, Inc. 2010 Acquired LaFollette First National Corporation Presently Two operational subsidiaries~ Community Trust Bank, Inc. and Community Trust and Investment Company 4
Our Banking Franchise Serving customers in 81 locations in 36 counties throughout Kentucky, Tennessee, and West Virginia, including 5 trust offices in Kentucky and Tennessee
Our Banking Franchise Central Region Eastern Region Northeastern Region Loans - $985 million Loans - $1.0 billion Loans - $478 million Deposits - $1.2 billion Deposits - $1.9 billion Deposits - $659 million • Danville • Floyd/Knott/Johnson • Advantage Valley • Lexington • Hazard • Ashland • Mt. Sterling • Pikeville • Flemingsburg • Richmond • Tug Valley • Summersville • Versailles • Whitesburg • Winchester South Central Region Indirect Lending Loans - $926 million Loans - $819 million Deposits - $1.1 billion • Campbellsville CTIC • LaFollette Assets Under Management - $3.5 billion (including $1.1 billion CTB) • Middlesboro Revenues - $21.0 million annualized • Mt. Vernon • Williamsburg • Ashland • LaFollette • Lexington • Pikeville • Versailles Financial data as of June 30, 2024 6
Trust Assets Under Management & Trust Revenue Includes CTB portfolio Assets in billions Revenue in millions 7 Jun ‘24 Revenue annualized
Executive Management Team Banking Yrs. w/ Name Position Experience CTBI Mark A. Gooch Chairman, President, and CEO 43 years 43 Richard W. Newsom CTB President 41 years 41 Andy Waters CTIC President and CEO 37 years 20 Kevin J. Stumbo EVP/Chief Financial Officer 37 years 29 C. Wayne Hancock EVP/Chief Legal Officer 15 years 15 Mark Smith EVP/Chief Credit Officer 31 years 17 James B. Draughn EVP/Operations 31 years 31 Steven E. Jameson EVP/Chief Risk Officer 39 years 20 Ricky Sparkman EVP/SC KY/TN President 39 years 30 D. Andrew Jones EVP/NE KY/WV President 37 years 37 David Tackett EVP/E KY President 36 years 32 Billie Dollins EVP/C KY President 43 years 14 8
Operational Philosophy Traditional community banking business model Executive management and board of director commitment to strong corporate governance Decentralized decision making and centralized operations and risk management Strong loan portfolio risk management process Specialized product offerings Maintain a strong tangible equity position Organic growth expectations combined with de novo branching and acquisition Consistent long-term performance 9
Consistent Financial Performance YTD 2024 2023 2022 2021 2020 EPS $2.13 $4.36 $4.59 $4.94 $3.35 ROAA 1.33% 1.40% 1.50% 1.63% 1.23% ROAE 10.82% 11.75% 12.74% 12.88% 9.36% Net Int. Margin 3.31% 3.32% 3.32% 3.21% 3.33% Efficiency Ratio 53.51% 54.29% 53.07% 53.11% 58.30% Nonperforming Loans 0.47% 0.34% 0.41% 0.49% 0.75% Net Charge-offs 0.15% 0.08% 0.02% 0.00% 0.18% % of Average Assets: Noninterest Income 1.07% 1.02% 1.07% 1.13% 1.09% Noninterest Expense 2.24% 2.25% 2.23% 2.21% 2.46% 10 All information is for the year ended December 31 except YTD 2024 which is for the six months ended June 30.
Earnings Review
Earnings Per Share YTD EPS decreased 1.9% from June 2023 to June 2024 2024 EPS goal - $4.31 to $4.49 per share 12
Net Income YTD net income decreased 1.4% from June 2023 to June 2024 2024 goal for net income - $77.7 to $80.8 million (in millions) 13
Revenues YTD revenues increased 3.8% from June 2023 to June 2024 2024 goal for revenues - $236.8 to $246.5 million (in millions) 14 Jun ‘23 and Jun ‘24 annualized
Noninterest Incomeas a % of Total Revenue YTD noninterest income increased 8.5% from June 2023 to June 2024 2024 goal for noninterest revenue – 23.5% to 25.5% of total revenue (in millions) 15 Jun ’24 annualized
Net Interest Revenue Net interest revenue increased by 2.6% year over year for the six months ended June 30 Net interest margin decreased 11 basis points Average earning assets increased $303.2 million, or 5.9% (in millions) 16 Jun ’24 annualized
Net Interest Margin Peer data obtained from the Federal Reserve Bank Holding Company Performance Report as of 6/30/2024 for bank holding companies with consolidated assets of $3 billion to $10 billion. 17 Jun ‘24 Mar ‘24 Dec ‘23 Sept ‘23 Jun ‘23 Mar ‘23 Net Interest Margin 3.38% 3.23% 3.19% 3.27% 3.35% 3.49% Yield on Earning Assets 5.66% 5.55% 5.43% 5.25% 5.03% 4.84% Cost of Interest Bearing Deposits 3.30% 3.35% 3.27% 2.93% 2.54% 2.06% Benefit of Noninterest Bearing Deposits 1.02% 1.03% 1.02% 0.95% 0.86% 0.71%
Net Noninterest Expenseas a % of Average Earning Assets Peer data obtained from the Federal Reserve Bank Holding Company Performance Report as of 6/30/2024 for bank holding companies with consolidated assets of $3 billion to $10 billion. (in millions) 18 Noninterest Expense & Efficiency Ratio (in millions) Jun ’24 annualized
Return on Average Assets Peer data obtained from the Federal Reserve Bank Holding Company Performance Report as of 6/30/2024 for bank holding companies with consolidated assets of $3 billion to $10 billion. 19
Balance Sheet Review
Total Assets Total assets at 6/30/24 increased $34.6 million, or an annualized 1.2%, from 12/31/23 Loans increased $210.3 million or an annualized 10.4% Investment portfolio decreased $73.4 million or an annualized 12.7% Deposits increased $11.5 million or an annualized 0.5% 2024 goal for total assets - $5.74 to $6.10 billion (in billions) 21
Total Loans Loans increased $210.3 million, or an annualized 10.4%, from 12/31/23 2024 goal for total loans - $4.18 to $4.35 billion (in billions) 22 Loan Portfolio Mix June 30, 2024 Loan Rate Mix
Concentrations of Creditas a % of Total Loans June 30, 2024 23 There were no net losses or nonperforming loans in any of these loan categories for the six months ended June 30, 2024.
Indirect Lending (in millions) 24 Jun’24 annualized
Net Charge-offsas a % of Average Loans Peer data obtained from the Federal Reserve Bank Holding Company Performance Report as of 6/30/2024 for bank holding companies with consolidated assets of $3 billion to $10 billion. 25 Nonperforming Loansas a % of Total Loans Commercial loans were a net charge-off of $571 thousand Consumer indirect loans were a net charge-off of $1.8 million Consumer direct loans were a net charge-off of $591 thousand Residential loans were a net charge-off of $24 thousand
Nonperforming Assetsas a % of Total Assets $1.6 million in other real estate owned 26 Loan Loss Reserve as a % of Net Loans Peer data obtained from the Federal Reserve Bank Holding Company Performance Report as of 6/30/2024 for bank holding companies with consolidated assets of $3 billion to $10 billion.
Total Other Real Estate Owned Sales of foreclosed properties for the six months ended 6/30/24 totaled $0.4 million New bookings in the first six months of 2024 totaled $0.5 million (in millions) 27
Total Depositsincluding Repurchase Agreements 2024 goal for total deposits including repurchase agreements - $4.97 to $5.17 billion (in billions) 28 Total Depositsincluding Repurchase Agreements June 30, 2024
Our Hoops CD product has been offered for over 27 years 100 basis point increase in rate in 1996, 1998, and 2012 with the University of Kentucky’s NCAA Basketball Championships $208 million in Hoops CDs as of 6/30/24 12 Month Certificate of Deposit: April 10th through maturity, rate paid is adjusted by 1 basis point for each University of Kentucky win; bonus 100 basis points added to rate for National Championship win. 29
Shareholder Value
Dividends Per Share Dividend payout ratio at June 30, 2024 was 43.2% Desired level between 40% and 50% June 30, 2024 cash dividend yield was 4.21% Cash dividend increased to $0.47 per share effective October 1, 2024, an increase of 2.2% 31 *2024 is projected DPS
Shareholders’ Equity Shareholders’ equity has increased 14.2% during the past five years 4.5% compound growth rate for the past five years 2024 goal for shareholders’ equity - $711.2 to $740.3 million (in millions) 32 4.5%
Book Value Per Share Tangible Common Equity/Assets 33
Total Market Capitalization Peer data obtained from S&P Global; peer group consists of publicly traded regional bank holding companies with comparative assets, as defined in our Proxy Statement. 34 Price to Tangible Book Value 2019 2020 2021 2022 2023 6/30/24 CTBI 1.51x 1.12x 1.23x 1.46x 1.24x 1.20x Peer 1.85x 1.73x 1.81x 1.89x 1.94x 1.31x All data is as of year-end except 2024 which is as of June 30, 2024. (in millions)
5 Year Cumulative Total ReturnComparison of CTBI, NASDAQ Stock Market (U.S.), and NASDAQ Bank Stocks An investment in CTBI stock on December 31, 2018 would have underperformed the NASDAQ Stock Market (U.S.) and the NASDAQ Bank Stocks Index at December 31, 2023. 35
Comparison to Russell 2000 Indexof Small Cap Companies 3-, 5-, and 10-year total returns annualized Return to Investors 36 June 30, 2024
Core Value Long-Term Investment 12 stock splits and 10 stock dividends 44 years of consecutive increases in cash dividends 5-year compound growth rate of cash dividends 5.5% Stock included in the NASDAQ Global Select Market, NASDAQ Dividend Achievers Index, and NASDAQ Bank Stock Index CTBI shareholders include 226 institutional investors (including CTIC – 11.1%) hold 11.3 million shares (60.8%) 277 mutual funds hold 5.7 million shares (31.3%) Data as of June 30, 2024 37
Key Strategic Initiatives
Operational Priorities Build core earnings capacity Quality loan growth Low cost deposit growth Branch expansion in growth markets Maintain net interest margin Operational efficiency Expense control Noninterest revenue growth Compliance management Increase noninterest income Wealth management Brokerage Insurance Continuing focus on improving asset quality 39
CTBI’s Franchise Value History of solid investor returns Historically strong capital position Investor focused dividend policy Dividend Achievers Index Consistent financial performance Community banking strategy Economic diversity in the markets we serve Strong experienced management team and nearly 1,000 dedicated employees Our shareholders 40
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