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CT

COMMUNITY TRUST BANCORP INC /KY/ (CTBI)·Q2 2025 Earnings Summary

Executive Summary

  • Record profitability: Net income $24.90M and diluted EPS $1.38 exceeded Q1 and prior year; net interest margin expanded to 3.64% and efficiency improved to 50.70% .
  • Solid beat vs consensus: EPS beat by 9.1% and revenue by 0.2% in Q2; prior quarter revenue missed by 3.6% while EPS beat modestly (S&P Global consensus)*.
  • Balance sheet strength: Loans rose to $4.70B (+1.4% QoQ), deposits to $5.46B (+1.9% QoQ), shareholders’ equity to $806.9M; reserve coverage improved to 237.1% while net charge-offs remained low at 0.12% annualized .
  • Dividend catalyst: Board raised quarterly dividend 12.8% to $0.53 starting with the Oct 1, 2025 payment (45th consecutive annual increase), supporting capital return narrative .

What Went Well and What Went Wrong

What Went Well

  • Net interest margin expansion: TE NIM rose to 3.64% (+7 bps QoQ; +26 bps YoY) on higher earning asset yields and lower cost of funds; net interest income grew 5.4% QoQ to $54.04M .
  • Broad-based loan and deposit growth: Loans reached $4.70B (+$65.3M QoQ) with strength in residential and commercial; deposits and repos climbed to $5.46B (+$100.2M QoQ) with strong time deposit growth .
  • Efficiency improvement: Efficiency ratio improved to 50.70% from 51.86% in Q1 and 52.17% in prior year; ROA rose to 1.58%, ROE to 12.51% .

What Went Wrong

  • Higher operating expenses: Noninterest expense increased 4.3% QoQ (to $35.66M), driven by higher incentive accruals and data processing expense (+$0.5M) .
  • Asset quality mixed: Nonperforming assets were $29.2M (down $2.1M QoQ but up $7.8M YoY); nonaccrual loans increased $0.2M QoQ and $10.8M YoY, though reserve coverage improved .
  • Bank owned life insurance revenue declined YoY: BOLI revenue fell $0.7M YoY in Q2, partially offsetting gains in trust and securities income .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$58.41*$62.60*$68.12*
Diluted EPS ($USD)$1.09 $1.22 $1.38
Net Income ($USD Millions)$19.50 $21.97 $24.90
Net Interest Income ($USD Millions)$45.68 $51.27 $54.04
Total Noninterest Income ($USD Millions)$15.71 $14.90 $16.17
Provision for Credit Losses ($USD Millions)$2.97 $3.57 $2.09
Net Interest Margin (TE) (%)3.38% 3.57% 3.64%
Efficiency Ratio (TE) (%)52.17% 51.86% 50.70%
ROA (%)1.35% 1.44% 1.58%
ROE (%)11.03% 11.50% 12.51%
Note: Values with asterisk (*) retrieved from S&P Global. Revenue equals net interest income + noninterest income − provision for credit losses.

Noninterest Income Breakdown ($USD Thousands)

CategoryQ2 2024Q1 2025Q2 2025
Deposit Related Fees7,308 6,822 7,350
Trust Revenue3,736 3,981 4,092
Gains on Sales of Loans119 47 77
Loan Related Fees1,320 965 1,249
Bank Owned Life Insurance1,815 1,035 1,102
Brokerage Revenue683 494 526
Other727 1,553 1,775
Total15,708 14,897 16,171

Loan Portfolio Composition ($USD Thousands)

CategoryQ2 2024Q1 2025Q2 2025
Total Commercial2,151,776 2,357,626 2,382,565
Total Residential1,132,455 1,239,661 1,289,807
Total Consumer977,016 1,039,249 1,029,421
Total Loans4,261,247 4,636,536 4,701,793

KPIs and Credit Metrics

MetricQ2 2024Q1 2025Q2 2025
Deposits & Repurchase Agreements ($USD Millions)$4,961.37 $5,357.86 $5,458.08
Shareholders’ Equity ($USD Millions)$719.32 $784.17 $806.87
Net Charge-offs ($USD Thousands)1,395 1,575 1,353
Net Charge-offs (% of Avg Loans, annualized)0.13% 0.14% 0.12%
Reserve Coverage (ACL / NPLs)263.0% 214.7% 237.1%
ACL as % of Loans1.22% 1.23% 1.23%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend per ShareOct 1, 2025 payment$0.47 $0.53 Raised
Financial Guidance (Revenue, Margins, OpEx, Tax Rate)FY/Q2 2025Not providedNot providedMaintained (no formal guidance)

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript available in our search window; themes reflect 8-K and press releases.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Net Interest MarginQ4: 3.43%, +4 bps QoQ ; Q1: 3.57%, +14 bps QoQ 3.64%, +7 bps QoQ; yields up, cost of funds down Improving
Credit QualityQ4: NPLs $26.7M; NCO 0.09% ; Q1: NPLs $26.5M; NCO 0.14% NPLs $24.4M; NCO 0.12%; reserve coverage 237.1% Stabilizing QoQ; higher YoY NPA
Deposit Growth & MixQ4: $5.31B; strong time deposits ; Q1: $5.36B $5.46B; time deposits +7.3% QoQ Growing
Technology/OperationsData processing $3.18M in Q4; $2.86M in Q1 $3.33M; higher OpEx partly from incentive accruals Elevated
Trust & Fee MomentumTrust $3.96M (Q4) ; $3.98M (Q1) $4.09M (Q2) Growing
Deposit DiversificationNo customer >4% (Q4) No customer >3% (Q2) Diversified

Management Commentary

  • Strategic focus evident in the quarter: Management highlighted margin expansion (higher earning asset yields, lower funding costs), loan growth across commercial and residential, and deposit growth outpacing loans, which increased other earning assets .
  • Operating discipline: Efficiency improved to 50.70% despite higher incentive accruals; data processing investments contributed to OpEx but were offset by lower occupancy and legal costs QoQ .
  • Credit stance: Provision fell to $2.09M (down $1.5M QoQ); reserve coverage improved to 237.1%, with ACL steady at 1.23% of loans .
  • Quote (capital return): “We are pleased to have increased the cash dividend to our shareholders for the 45th consecutive year” — Mark A. Gooch, Chairman, President, and CEO .

Q&A Highlights

  • No earnings call transcript located for Q2 2025 in our search window; thus, Q&A themes, guidance clarifications, and tone changes vs prior quarters are unavailable from primary sources.

Estimates Context

MetricQ2 2024 Estimate*Q2 2024 ActualSurpriseQ1 2025 Estimate*Q1 2025 ActualSurpriseQ2 2025 Estimate*Q2 2025 ActualSurprise
EPS ($)1.035*1.09 +$0.055 (+5.3%)1.1867*1.22 +$0.033 (+2.8%)1.265*1.38 +$0.115 (+9.1%)
Revenue ($USD Millions)58.00*58.41*+$0.41 (+0.7%)64.92*62.60*−$2.32 (−3.6%)68.00*68.12*+$0.12 (+0.2%)
Note: Values marked with * retrieved from S&P Global.

Implications: The Q2 EPS beat was driven by NIM expansion and lower provision, while the Q1 revenue miss reflected softer noninterest income and higher provision for credit losses .

Key Takeaways for Investors

  • Positive margin trajectory: Continued NIM expansion suggests earnings support if deposit pricing remains disciplined and asset yields hold; watch funding mix and rate path .
  • Quality growth: Loans and deposits grew concurrently; residential and commercial segments led growth; deposit growth outpacing loans lifted liquidity buffers .
  • Expense watch: Incentive accruals and data processing are upward pressures; efficiency gains imply underlying cost control but monitor OpEx normalization into H2 .
  • Credit stable but monitor NPAs: NPLs declined QoQ and coverage improved; net charge-offs remain low; continue tracking nonaccruals given YoY increase .
  • Capital return tailwind: Dividend raised to $0.53 (Oct 1, 2025), signaling confidence in earnings durability and balance sheet strength .
  • Estimate revisions likely upward for EPS: Beat magnitude and NIM improvement may prompt modest EPS estimate lifts; revenue trajectory aligns with net interest trends (S&P Global consensus)*.
  • Near-term trading lens: The combination of EPS beat, margin expansion, and dividend hike is supportive for sentiment; any signs of accelerating OpEx or uptick in NPAs would be the key risk monitor .