Community Trust Bancorp, Inc. Reports Record Earnings for the 2nd Quarter 2025

Community Trust Bancorp, Inc.:

Earnings Summary

Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved record earnings for the second quarter 2025 of $24.9 million, or $1.38 per basic share, compared to $22.0 million, or $1.22 per basic share, earned during the first quarter 2025 and $19.5 million, or $1.09 per basic share, earned during the second quarter 2024. Total revenue for the quarter was $4.0 million above prior quarter and $8.8 million above prior year same quarter. Net interest revenue for the quarter increased $2.8 million compared to prior quarter and $8.4 million compared to prior year same quarter, and noninterest income increased $1.3 million compared to prior quarter and $0.5 million compared to prior year same quarter. Our provision for credit losses for the quarter decreased $1.5 million from prior quarter and $0.9 million from prior year same quarter. Noninterest expense increased $1.5 million compared to prior quarter and $3.2 million compared to prior year same quarter. Earnings for the six months ended June 30, 2025 were $8.7 million, or $0.47 per basic share, above prior year.

2^nd Quarter 2025 Highlights

• Net interest income for the quarter of $54.0 million was $2.8 million, or 5.4%, above prior quarter and $8.4 million, or 18.3%, above prior year same quarter, as our net interest margin increased 7 basis points from prior quarter and 26 basis points from prior year same quarter.

• Provision for credit losses at $2.1 million for the quarter decreased $1.5 million from prior quarter and $0.9 million from prior year same quarter.

• Noninterest income for the quarter ended June 30, 2025 of $16.2 million was $1.3 million, or 8.6%, above prior quarter and $0.5 million, or 2.9%, above prior year same quarter.

• Noninterest expense for the quarter ended June 30, 2025 of $35.7 million was $1.5 million, or 4.3%, above prior quarter and $3.2 million, or 10.0%, above prior year same quarter.

• Our loan portfolio at $4.7 billion increased $65.3 million, an annualized 5.6%, from March 31, 2025 and $440.5 million, or 10.3%, from June 30, 2024.

• We had net loan charge-offs of $1.4 million, an annualized 0.12% of average loans, for the second quarter 2025 compared to $1.6 million, an annualized 0.14% of average loans, for the first quarter 2025 and $1.4 million, an annualized 0.13% of average loans, for the second quarter 2024.

• Our total nonperforming loans at $24.4 million at June 30, 2025 decreased $2.1 million from March 31, 2025 but increased $4.6 million from June 30, 2024. Nonperforming assets at $29.2 million decreased $2.1 million from March 31, 2025 but increased $7.8 million from June 30, 2024.

• Deposits, including repurchase agreements, at $5.5 billion increased $100.2 million, an annualized 7.5%, from March 31, 2025 and $496.7 million, or 10.0%, from June 30, 2024.

• Shareholders' equity at $806.9 million increased $22.7 million, an annualized 11.6%, during the quarter and $87.5 million, or 12.2%, from June 30, 2024.

Net Interest Income

Net interest income for the quarter of $54.0 million was $2.8 million, or 5.4%, above prior quarter and $8.4 million, or 18.3%, above prior year same quarter. Our net interest margin, on a fully tax equivalent basis, at 3.64% increased 7 basis points from prior quarter and 26 basis points from prior year same quarter. Our quarterly average earning assets increased $135.0 million, an annualized 9.3%, from prior quarter and $513.3 million, or 9.4%, from prior year same quarter. Our yield on average earning assets increased 5 basis points from prior quarter and 10 basis points from prior year same quarter, while our cost of funds decreased 2 basis points from prior quarter and 30 basis points from prior year same quarter.

Our ratio of average loans to deposits, including repurchase agreements, was 86.6% for the quarter ended June 30, 2025 compared to 85.9% for the quarter ended March 31, 2025 and 84.5% for the quarter ended June 30, 2024.

Noninterest Income

Noninterest income for the quarter ended June 30, 2025 of $16.2 million was $1.3 million, or 8.6% above prior quarter and $0.5 million, or 2.9% above prior year same quarter. The variance quarter over quarter was primarily the result of increases in deposit related fees ($0.5 million) and loan related fees ($0.3 million). Year over year increases in trust revenue ($0.4 million) and securities gains ($0.6 million) were partially offset by a decrease in bank owned life insurance revenue ($0.7 million). Noninterest income for the six months ended June 30, 2025 increased $0.2 million, or 0.7%, from prior year.

Noninterest Expense

Noninterest expense for the quarter ended June 30, 2025 of $35.7 million was $1.5 million, or 4.3%, above prior quarter and $3.2 million, or 10.0%, above prior year same quarter. The quarter over quarter increase primarily resulted from an increase in the accrual for the annual incentive payment to employees, based on projected net income for the year. An increase in data processing expense ($0.5 million) was offset by decreases in net occupancy and equipment expense ($0.3 million) and legal and professional fees ($0.2 million). The year over year increase was primarily due to increases in personnel expense ($2.1 million) and data processing expense ($0.7 million). Noninterest expense for the six months ended June 30, 2025 increased $5.2 million, or 8.1%, from prior year.

Balance Sheet Review

Total Loans

Total Deposits and Repurchase Agreements

CTBI's total assets at $6.4 billion as of June 30, 2025 increased $114.4 million, or 7.3% annualized, from March 31, 2025 and $586.6 million, or 10.1%, from June 30, 2024. Loans outstanding at $4.7 billion increased $65.3 million, an annualized 5.6%, from March 31, 2025 and $440.5 million, or 10.3%, from June 30, 2024. The increase in loans from prior quarter included a $24.9 million increase in the commercial loan portfolio, a $50.2 million increase in the residential loan portfolio, and a $0.3 million increase in the consumer direct loan portfolio, partially offset by a $10.1 million decrease in the indirect consumer loan portfolio. CTBI's investment portfolio decreased $13.4 million, an annualized 5.3%, from March 31, 2025 and $94.0 million, or 8.6%, from June 30, 2024. Deposits in other banks increased $46.6 million from prior quarter and $212.0 million from June 30, 2024, as a result of deposit growth outpacing loan growth. Deposits, including repurchase agreements, at $5.5 billion increased $100.2 million, an annualized 7.5%, from March 31, 2025 and $496.7 million, or 10.0%, from June 30, 2024. CTBI is not dependent on any one customer or group of customers for their source of deposits. As of June 30, 2025, no one customer accounted for more than 3% of our $5.2 billion in deposits. Only two customer relationships accounted for more than 1% each.

Shareholders' equity at $806.9 million increased $22.7 million, an annualized 11.6%, during the quarter and $87.5 million, or 12.2%, from June 30, 2024. Net unrealized losses on securities, net of deferred taxes, were $80.6 million at June 30, 2025, compared to $86.1 million at March 31, 2025 and $107.1 million at June 30, 2024. CTBI's annualized dividend yield to shareholders as of June 30, 2025 was 3.55%.

Asset Quality

Our total nonperforming loans of $24.4 million at June 30, 2025 decreased $2.1 million from March 31, 2025 but increased $4.6 million from June 30, 2024. Accruing loans 90+ days past due at $8.4 million decreased $2.4 million from prior quarter and $6.3 million from June 30, 2024. Nonaccrual loans at $15.9 million increased $0.2 million from prior quarter and $10.8 million from June 30, 2024. Accruing loans 30-89 days past due at $20.1 million increased $5.5 million from prior quarter but decreased $4.0 million from June 30, 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 $1.4 million, an annualized 0.12% of average loans, for the second quarter 2025 compared to $1.6 million, an annualized 0.14% of average loans, for the first quarter 2025 and $1.4 million, an annualized 0.13% of average loans, for the second quarter 2024. Of the net charge-offs for the quarter, $0.5 million were in commercial loans, $0.8 million were in indirect consumer loans, and $0.1 million were in direct consumer loans. Net-charge offs for the six months ended June 30, 2025 were $2.9 million, an annualized 0.13% of average loans, compared to $3.0 million, an annualized 0.15% of average loans, for the six months ended June 30, 2024.

Allowance for Credit Losses

Our provision for credit losses at $2.1 million for the quarter decreased $1.5 million from prior quarter and $0.9 million from prior year same quarter. Of the provision for the quarter, $0.9 million was allotted to fund loan growth and $123 thousand was credited against the provision for unfunded commitments. Provision for credit losses for the six months ended June 30, 2025 remained relatively stable compared to prior year. Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2025 was 237.1% compared to 214.7% at March 31, 2025 and 263.0% at June 30, 2024. Our loan loss reserve as a percentage of total loans outstanding at June 30, 2025 remained at 1.23% from March 31, 2025 compared to 1.22% at June 30, 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's 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; 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 $6.4 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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MARK A. GOOCH, CHAIRMAN, PRESIDENT, AND CEO, COMMUNITY TRUST BANCORP, INC. AT (606) 437-3229