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

Earnings Summary

Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved earnings for the first quarter 2025 of $22.0 million, or $1.22 per basic share, compared to $22.5 million, or $1.25 per basic share, earned during the fourth quarter 2024 and $18.7 million, or $1.04 per basic share, earned during the first quarter 2024. Total revenue for the quarter was $0.5 million above prior quarter and $7.4 million above prior year same quarter. Net interest revenue for the quarter increased $1.7 million compared to prior quarter and $7.7 million compared to prior year same quarter, and noninterest income decreased $1.3 million compared to prior quarter and $0.2 million compared to prior year same quarter. Our provision for credit losses for the quarter increased $1.0 million from prior quarter and $0.9 million from prior year same quarter. Noninterest expense increased $0.4 million compared to prior quarter and $2.0 million compared to prior year same quarter.

1st Quarter 2025 Highlights

• Net interest income for the quarter of $51.3 million was $1.7 million, or 3.5%, above prior quarter and $7.7 million, or 17.6%, above prior year same quarter, as our net interest margin increased 14 basis points from prior quarter and 34 basis points from prior year same quarter.

• Provision for credit losses at $3.6 million for the quarter increased $1.0 million from prior quarter and $0.9 million from prior year same quarter.

• Noninterest income for the quarter ended March 31, 2025 of $14.9 million was $1.3 million, or 7.8%, below prior quarter and $0.2 million, or 1.6%, below prior year same quarter.

• Noninterest expense for the quarter ended March 31, 2025 of $34.2 million was $0.4 million, or 1.3%, above prior quarter and $2.0 million, or 6.2%, above prior year same quarter.

• Our loan portfolio at $4.6 billion increased $149.9 million, an annualized 13.5%, from December 31, 2024 and $475.4 million, or 11.4%, from March 31, 2024.

• We had net loan charge-offs of $1.6 million, or an annualized 0.14% of average loans, for the first quarter 2025 compared to $1.0 million, or an annualized 0.09% of average loans, for the fourth quarter 2024 and $1.6 million, or 0.16% of average loans annualized, for the first quarter 2024.

• Our total nonperforming loans decreased to $26.5 million at March 31, 2025 from $26.7 million at December 31, 2024 but increased $10.7 million from the $15.9 million at March 31, 2024. Nonperforming assets at $31.3 million increased $1.0 million from December 31, 2024 and $14.2 million from March 31, 2024.

• Deposits, including repurchase agreements, at $5.4 billion increased $47.5 million, or an annualized 3.6%, from December 31, 2024 and $338.9 million, or 6.8%, from March 31, 2024.

• Shareholders’ equity at $784.2 million increased $26.6 million, or an annualized 14.2%, during the quarter and $76.4 million, or 10.8%, from March 31, 2024.

Net Interest Income

Net interest income for the quarter of $51.3 million was $1.7 million, or 3.5%, above prior quarter and $7.7 million, or 17.6%, above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.57% increased 14 basis points from prior quarter and 34 basis points from prior year same quarter. Our quarterly average earning assets increased $68.7 million from prior quarter and $390.0 million from prior year same quarter. Our yield on average earning assets increased 5 basis points from prior quarter and 16 basis points from prior year same quarter, while our cost of funds decreased 16 basis points from prior quarter and 33 basis points from prior year same quarter.

Our ratio of average loans to deposits, including repurchase agreements, was 85.9% for the quarter ended March 31, 2025 compared to 84.4% for the quarter ended December 31, 2024 and 82.7% for the quarter ended March 31, 2024.

Noninterest Income

Noninterest income for the quarter ended March 31, 2025 of $14.9 million was $1.3 million, or 7.8%, below prior quarter and $0.2 million, or 1.6%, below prior year same quarter. The variance quarter over quarter was primarily the result of decreases in deposit related fees ($0.8 million) and loan related fees ($0.5 million). Year over year decreases in loan related fees ($0.4 million), bank owned life insurance revenue ($0.3 million), and deposit related fees ($0.2 million) were offset by increases in trust revenue ($0.5 million) and securities gains ($0.1 million). The decrease in loan related fees resulted primarily from the fluctuation in the fair market value of our mortgage servicing rights.

Noninterest Expense

Noninterest expense for the quarter ended March 31, 2025 of $34.2 million was $0.4 million, or 1.3%, above prior quarter and $2.0 million, or 6.2%, above prior year same quarter. The quarter over quarter increase primarily resulted from increases in net occupancy and equipment expense ($0.4 million) and legal and professional fees ($0.2 million), partially offset by a decrease in data processing expense ($0.3 million). The year over year increase was primarily due to increases in net occupancy and equipment expense ($0.4 million), data processing expense ($0.3 million), legal and professional fees ($0.4 million), operating losses ($0.3 million), and loan related expenses ($0.2 million).

Balance Sheet Review

Total Loans

Total Deposits and Repurchase Agreements

CTBI’s total assets at $6.3 billion as of March 31, 2025 increased $83.3 million, or 5.5% annualized, from December 31, 2024 and $426.3 million, or 7.3%, from March 31, 2024. Loans outstanding at $4.6 billion increased $149.9 million, an annualized 13.5%, from December 31, 2024 and $475.4 million, or 11.4%, from March 31, 2024. The increase in loans from prior quarter included a $85.0 million increase in the commercial loan portfolio, a $28.8 million increase in the residential loan portfolio, and a $38.3 million increase in the indirect consumer loan portfolio, partially offset by a $2.2 million decrease in the consumer direct loan portfolio. CTBI’s investment portfolio decreased $46.7 million, or an annualized 17.9%, from December 31, 2024 and $102.2 million, or 9.2%, from March 31, 2024. The decrease in the investment portfolio during the quarter was due to management’s decision to reinvest certain maturities into the loan portfolio. Deposits in other banks decreased $24.4 million from prior quarter but increased $34.7 million from March 31, 2024. Deposits, including repurchase agreements, at $5.4 billion increased $47.5 million, or an annualized 3.6%, from December 31, 2024 and $338.9 million, or 6.8%, from March 31, 2024. CTBI is not dependent on any one customer or group of customers for their source of deposits. As of March 31, 2025, no one customer accounted for more than 3% of our $5.1 billion in deposits. Only two customer relationships accounted for more than 1% each.

Shareholders’ equity at $784.2 million increased $26.6 million, or an annualized 14.2%, during the quarter and $76.4 million, or 10.8%, from March 31, 2024. Net unrealized losses on securities, net of deferred taxes, were $86.1 million at March 31, 2025, compared to $98.4 million at December 31, 2024 and $106.9 million at March 31, 2024. CTBI’s annualized dividend yield to shareholders as of March 31, 2025 was 3.73%.

Asset Quality

Our total nonperforming loans decreased to $26.5 million at March 31, 2025 from $26.7 million at December 31, 2024 but increased from $15.9 million at March 31, 2024. Accruing loans 90+ days past due at $10.8 million increased $0.5 million from prior quarter but decreased $0.7 million from March 31, 2024. Nonaccrual loans at $15.7 million decreased $0.7 million from prior quarter but increased $11.4 million from March 31, 2024. Accruing loans 30-89 days past due at $14.5 million decreased $2.3 million from prior quarter but increased $2.3 million from March 31, 2024. Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss.

We had net loan charge-offs of $1.6 million, or an annualized 0.14% of average loans, for the first quarter 2025 compared to $1.0 million, or an annualized 0.09% of average loans, for the fourth quarter 2024 and $1.6 million, or 0.16% of average loans annualized, for the first quarter 2024. Of the net charge-offs for the quarter, $0.4 million were in indirect consumer loans, $0.3 million were in commercial loans, $0.8 million were in direct consumer loans, and $0.1 million were in residential loans.

Allowance for Credit Losses

Our provision for credit losses at $3.6 million for the quarter increased $1.0 million from prior quarter and $0.9 million from prior year same quarter. Of the provision for the quarter, $2.0 million was allotted to fund loan growth. Our reserve coverage (allowance for credit losses to nonperforming loans) at March 31, 2025 was 214.7% compared to 206.0% at December 31, 2024 and 319.0% at March 31, 2024. Our credit loss reserve as a percentage of total loans outstanding at March 31, 2025 remained at 1.23% from December 31, 2024 compared to 1.22% at March 31, 2024.

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 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, prevailing inflation and interest rates, realized gains from sales of investments, gains from asset sales, and losses on commercial lending activities; the effects of epidemics, pandemics, or other infectious disease outbreaks; results of various investment activities; the effects of competitors’ pricing policies, changes in laws and regulations, competition, and 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; and the resolution of legal proceedings and related matters. In addition, the banking industry in general is subject to various monetary, operational, and fiscal policies and regulations, which include, but are not limited to, those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, and state regulators, whose policies, regulations, and enforcement actions 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 $6.3 billion, is headquartered in Pikeville, Kentucky and has 72 banking locations across eastern, northeastern, central, and south central Kentucky, six banking locations in southern West Virginia, three banking locations in northeastern Tennessee, four trust offices across Kentucky, and one trust office in Tennessee.

Additional information follows.

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