UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2020
	Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____________ to _____________

(Exact name of registrant as specified in its charter)

Kentucky	61-0979818
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
346 North Mayo Trail P.O. Box 2947 Pikeville, Kentucky	41502
(Address of principal executive offices)	(Zip code)

(606) 432-1414

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically every interactive data file required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☑	Accelerated Filer  ☐	Non-accelerated Filer  ☐
Smaller Reporting Company ☐	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.        ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

Common stock – 17,794,598 shares outstanding at April 30, 2020

CAUTIONARY STATEMENT

REGARDING 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. Community Trust Bancorp, Inc.’s (“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 the COVID-19 pandemic on our business operations and credit quality and on general economic and financial market conditions, as well as our ability to respond to the related challenges; 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.

The accompanying information has not been audited by our independent registered public accountants; however, in the opinion of management such information reflects all adjustments necessary for a fair presentation of the results for the interim period.  All such adjustments are of a normal and recurring nature.

The accompanying condensed consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America or those normally made in the Registrant’s annual report on Form 10-K.  Accordingly, the reader of the Form 10-Q should refer to the Registrant’s Form 10-K for the year ended December 31, 2019 for further information in this regard.

Community Trust Bancorp, Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands)		(unaudited) March 31 2020				December 31 2019
Assets:
Cash and due from banks		$	67,728			$	58,680
Interest bearing deposits			124,974				206,003
Federal funds sold			0				0
Cash and cash equivalents			192,702				264,683
Certificates of deposit in other banks			245				245
Debt securities available-for-sale at fair value (amortized cost of $625,914 and $593,945, respectively)			633,479				599,844
Debt securities held-to-maturity at amortized cost (fair value of $0 and $517, respectively)			0				517
Equity securities at fair value			1,721				1,953
Loans held for sale			1,403				1,167
Loans			3,287,541				3,248,664
Allowance for credit losses*			(49,445	)			(35,096	)
Net loans			3,238,096				3,213,568
Premises and equipment, net			43,568				44,046
Right-of-use asset			14,210				14,550
Federal Home Loan Bank stock			11,354				10,474
Federal Reserve Bank stock			4,887				4,887
Goodwill			65,490				65,490
Bank owned life insurance			69,609				69,269
Mortgage servicing rights			2,481				3,263
Other real estate owned			19,816				19,480
Accrued interest receivable			14,680				14,836
Other assets			38,904				37,731
Total assets		$	4,352,645			$	4,366,003
Liabilities and shareholders’ equity:
Deposits:
Noninterest bearing		$	860,844			$	865,760
Interest bearing			2,534,264				2,539,812
Total deposits			3,395,108				3,405,572
Repurchase agreements			236,908				226,917
Federal funds purchased			4,907				7,906
Advances from Federal Home Loan Bank			411				415
Long-term debt			57,841				57,841
Deferred taxes			2,719				5,110
Operating lease liability			13,400				13,729
Finance lease liability			1,453				1,456
Accrued interest payable			3,447				2,839
Other liabilities			23,529				29,332
Total liabilities			3,739,723				3,751,117
Shareholders’ equity:
Preferred stock, 300,000 shares authorized and unissued			-				-
Common stock, $5 par value, shares authorized 25,000,000; shares outstanding 2020 – 17,787,274; 2019 – 17,793,165			88,936				88,966
Capital surplus			224,277				224,907
Retained earnings			294,223				296,760
Accumulated other comprehensive income, net of tax			5,486				4,253
Total shareholders’ equity			612,922				614,886
Total liabilities and shareholders’ equity		$	4,352,645			$	4,366,003

See notes to condensed consolidated financial statements.

Community Trust Bancorp, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(unaudited)

		Three Months Ended
		March 31
(in thousands except per share data)		2020				2019
Interest income:
Interest and fees on loans, including loans held for sale		$	40,465			$	40,910
Interest and dividends on securities
Taxable			3,046				3,163
Tax exempt			527				678
Interest and dividends on Federal Reserve Bank and Federal Home Loan Bank stock			140				296
Interest on Federal Reserve Bank deposits			496				786
Other, including interest on federal funds sold			25				56
Total interest income			44,699				45,889
Interest expense:
Interest on deposits			6,942				8,075
Interest on repurchase agreements and federal funds purchased			1,004				1,156
Interest on advances from Federal Home Loan Bank			0				39
Interest on long-term debt			509				636
Total interest expense			8,455				9,906
Net interest income			36,244				35,983
Provision for credit losses*			12,707				190
Net interest income after provision for credit losses			23,537				35,793
Noninterest income:
Service charges on deposit accounts			5,916				6,120
Gains on sales of loans, net			483				330
Trust and wealth management income			2,884				2,575
Loan related fees			95				573
Bank owned life insurance			573				558
Brokerage revenue			372				261
Securities gains			249				356
Other noninterest income			949				1,397
Total noninterest income			11,521				12,170
Noninterest expense:
Officer salaries and employee benefits			2,751				3,374
Other salaries and employee benefits			12,280				12,585
Occupancy, net			1,985				2,051
Equipment			721				739
Data processing			1,978				1,763
Bank franchise tax			1,812				1,715
Legal fees			477				430
Professional fees			569				531
Advertising and marketing			634				792
FDIC insurance			147				177
Other real estate owned provision and expense			869				771
Repossession expense			135				377
Amortization of limited partnership investments			888				777
Other noninterest expense			2,975				3,001
Total noninterest expense			28,221				29,083
Income before income taxes			6,837				18,880
Income taxes			258				3,941
Net income			6,579				14,939
Other comprehensive income:
Unrealized holding gains on securities available-for-sale:
Unrealized holding gains arising during the period			2,147				6,124
Less: Reclassification adjustments for realized gains included in net income			481				1
Tax expense			433				1,286
Other comprehensive income, net of tax			1,233				4,837
Comprehensive income		$	7,812			$	19,776
Basic earnings per share		$	0.37			$	0.84
Diluted earnings per share		$	0.37			$	0.84
Weighted average shares outstanding-basic			17,752				17,712
Weighted average shares outstanding-diluted			17,763				17,723

See notes to condensed consolidated financial statements.

Consolidated Statements of Changes in Shareholders’ Equity

Quarterly

(in thousands except per share and share amounts)		Common Shares				Common Stock				Capital Surplus				Retained Earnings				Accumulated Other Comprehensive Income (Loss), Net of Tax				Total
Balance, December 31, 2018			17,732,853			$	88,665			$	223,161			$	258,935			$	(6,611	)		$	564,150
Implementation of ASU 2016-02															(480	)			0				(480	)
Balance, January 1, 2019			17,732,853				88,665				223,161				258,455				(6,611	)			563,670
Net income															14,939								14,939
Other comprehensive income, net of tax of $1,286																			4,837				4,837
Cash dividends declared ($0.36 per share)															(6,378	)							(6,378	)
Issuance of common stock			19,065				95				163												258
Vesting of restricted stock			(12,186	)			(61	)			61												0
Issuance of restricted stock			27,921				140				(140	)											0
Forfeiture of restricted stock			(59	)			0				0												0
Stock-based compensation											181												181
Balance, March 31, 2019			17,767,594			$	88,839			$	223,426			$	267,016			$	(1,774	)		$	577,507

(in thousands except per share and share amounts)		Common Shares				Common Stock				Capital Surplus				Retained Earnings				Accumulated Other Comprehensive Income (Loss), Net of Tax				Total
Balance, December 31, 2019			17,793,165			$	88,966			$	224,907			$	296,760			$	4,253			$	614,886
Implementation of ASU 2016-13															(2,366	)							(2,366	)
Balance, January 1, 2020			17,793,165				88,966				224,907				294,394				4,253				612,520
Net income															6,579								6,579
Other comprehensive income, net of tax of $433																			1,233				1,233
Cash dividends declared ($0.38 per share)															(6,750	)							(6,750	)
Issuance of common stock			21,953				110				122												232
Repurchase of common stock			(32,664	)			(164	)			(935	)											(1,099	)
Issuance of restricted stock			21,544				108				(108	)											0
Vesting of restricted stock			(16,724	)			(84	)			84												0
Stock-based compensation											207												207
Balance, March 31, 2020			17,787,274			$	88,936			$	224,277			$	294,223			$	5,486			$	612,922