Community Trust Bancorp, Inc. Reports Record Earnings for the 4th Quarter and Year 2025

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

Earnings Summary

Community Trust Bancorp, Inc. (NASDAQ-CTBI) achieved record earnings for the fourth quarter 2025 of $27.3 million, or $1.51 per basic share, compared to $23.9 million, or $1.33 per basic share, earned during the third quarter 2025 and $22.5 million, or $1.25 per basic share, earned during the fourth quarter 2024. Total revenue for the quarter was $3.2 million above prior quarter and $9.0 million above prior year same quarter. Net interest revenue for the quarter increased $2.6 million compared to prior quarter and $8.6 million compared to prior year same quarter, and noninterest income increased $0.7 million compared to prior quarter and $0.4 million compared to prior year same quarter. Our provision for credit losses for the quarter decreased $1.0 million from prior quarter but increased $0.3 million from prior year same quarter. Noninterest expense decreased $0.3 million compared to prior quarter but increased $2.7 million compared to prior year same quarter. Earnings for the year 2025 were a record $98.1 million, $15.2 million, or $0.83 per basic share, above prior year.

4^th Quarter 2025 Highlights

• Net interest income for the quarter of $58.1 million was $2.6 million, or 4.6%, above prior quarter and $8.6 million, or 17.3%, above prior year same quarter, as our net interest margin increased 7 basis points from prior quarter and 24 basis points from prior year same quarter.
• Provision for credit losses at $2.9 million for the quarter decreased $1.0 million from prior quarter but increased $0.3 million from prior year same quarter.
• Noninterest income for the quarter ended December 31, 2025 of $16.6 million was $0.7 million, or 4.1%, above prior quarter and $0.4 million, or 2.7%, above prior year same quarter.
• Noninterest expense for the quarter ended December 31, 2025 of $36.5 million was $0.3 million, or 0.8%, below prior quarter but $2.7 million, or 7.9%, above prior year same quarter.
• Our loan portfolio at $4.9 billion increased $101.0 million, an annualized 8.4%, from prior quarter and $408.3 million, or 9.1%, from prior year.
• We had net loan charge-offs of $1.8 million, an annualized 0.14% of average loans, for the fourth quarter 2025 compared to $2.7 million, an annualized 0.23% of average loans, for the third quarter 2025 and $1.0 million, an annualized 0.09% of average loans, for the fourth quarter 2024.
• Our total nonperforming loans at $19.2 million at December 31, 2025 decreased $5.5 million from prior quarter and $7.5 million from prior year. Nonperforming assets at $22.2 million decreased $7.3 million from prior quarter and $8.1 million from prior year.
• Deposits, including repurchase agreements, at $5.7 billion increased $27.5 million, an annualized 1.9%, from prior quarter and $387.5 million, or 7.3%, from prior year.
• Shareholders' equity at $856.1 million increased $24.7 million, an annualized 11.8%, from prior quarter and $98.5 million, or 13.0%, from prior year.

Net Interest Income

Net interest income for the quarter of $58.1 million was $2.6 million, or 4.6%, above prior quarter and $8.6 million, or 17.3%, above prior year same quarter, as our net interest margin, on a fully tax equivalent basis, increased 7 basis points from prior quarter and 24 basis points from prior year same quarter. Our quarterly average earning assets increased $170.8 million, an annualized 11.0%, from prior quarter and $542.5 million, or 9.4%, from prior year same quarter. Our yield on average earning assets decreased 9 basis points from prior quarter and 2 basis points from prior year same quarter, while our cost of funds increased 23 basis points from prior quarter and 40 basis points from prior year same quarter. Net interest income for the year 2025 at $219.0 million was $33.0 million, or 17.7%, above prior year.

Our ratio of average loans to deposits, including repurchase agreements, was 84.9% for the quarter ended December 31, 2025 compared to 85.6% for the quarter ended September 30, 2025 and 84.4% for the quarter ended December 31, 2024.

Noninterest Income

Noninterest income for the quarter ended December 31, 2025 of $16.6 million was $0.7 million, or 4.1%, above prior quarter and $0.4 million, or 2.7%, above prior year same quarter. The variance quarter over quarter was primarily the result of increases in net securities gains ($0.6 million) and net gains on the sale of fixed assets ($0.5 million), partially offset by decreased deposit related fees ($0.6 million). Year over year increases for the quarter in trust revenue ($0.5 million), bank owned life insurance revenue ($0.3 million), and net gains on the sale of fixed assets ($0.5 million) were partially offset by decreases in loan related fees ($0.5 million) and securities gains ($0.3 million). Noninterest income for the year 2025 of $63.6 million was a $1.1 million, or 1.7%, increase from prior year. Primary factors in the year over year increase were increases in trust revenue ($1.9 million), insurance commissions ($0.4 million), net gains on the sale of fixed assets ($0.5 million), partially offset by decreases in loan related fees ($0.9 million), securities gains ($0.3 million), and bank owned life insurance revenue ($0.8 million). The decrease in loan related fees resulted primarily from the fluctuation in the fair market value of our mortgage servicing rights. The variances in securities gains primarily resulted from changes in the valuation of our equity securities.

In an attempt to modernize our delivery channel in the Mt. Sterling Market, we are in the process of consolidating two of our branches into a newly constructed modern branch. During the fourth quarter, we recognized the sale of one of the branch locations being closed, along with a parking lot, resulting in a $0.5 million gain on the sale of fixed assets. We are also donating one of the branch locations, which resulted in a $0.4 million contribution expense.

Noninterest Expense

Noninterest expense for the quarter ended December 31, 2025 of $36.5 million was $0.3 million, or 0.8%, below prior quarter but $2.7 million, or 7.9%, above prior year same quarter. The quarter over quarter decrease primarily resulted from decreases in data processing expense ($0.7 million) and repossession expense ($0.7 million), partially offset by increases in personnel expense ($0.2 million) and contributions ($0.6 million). The year over year increase for the quarter included increases in personnel expense ($1.7 million), occupancy and equipment expense ($0.4 million), taxes other than property and payroll ($0.3 million), and contributions ($0.6 million), partially offset by decreases in data processing expense ($0.3 million) and repossession expense ($0.3 million). Noninterest expense for the year 2025 of $143.1 million increased $12.1 million, or 9.3%, from prior year. We experienced increased expenses year over year in personnel ($6.1 million), data processing ($1.5 million), occupancy and equipment ($1.0 million), taxes other than property and payroll ($0.6 million), legal ($0.5 million), and contributions ($0.7 million). The year over year increase in personnel expense included increases in salaries ($2.1 million), bonuses and incentives ($1.9 million), and other employee benefits ($2.1 million). The increase in contribution expense was primarily a result of the $0.4 million contribution expense resulting from a donation of one of our Mt. Sterling branch locations discussed above in the Noninterest Income section.

Balance Sheet Review

Total Loans

Total Deposits and Repurchase Agreements

CTBI's total assets at $6.7 billion as of December 31, 2025 increased $46.0 million, or 2.7% annualized, from prior quarter and $490.9 million, or 7.9%, from prior year. Loans outstanding at $4.9 billion increased $101.0 million, an annualized 8.4%, from prior quarter and $408.3 million, or 9.1%, from prior year. The increase in loans from prior quarter included a $68.4 million increase in the commercial loan portfolio and a $51.9 million increase in the residential loan portfolio, partially offset by a $15.1 million decrease in the consumer indirect loan portfolio and a $4.2 million decrease in the consumer direct loan portfolio. CTBI's investment portfolio at $1.1 billion increased $82.9 million, an annualized 31.6%, from prior quarter and $65.4 million, or 6.2%, from prior year. Deposits in other banks decreased $135.6 million from prior quarter, as a result of funding our investment portfolio and loan growth, but increased $4.3 million from December 31, 2024. Deposits, including repurchase agreements, at $5.7 billion increased $27.5 million, an annualized 1.9%, from prior quarter and $387.5 million, or 7.3%, from prior year. CTBI is not dependent on any one customer or group of customers for their source of deposits. As of December 31, 2025, two customers accounted for 3% each of our $5.4 billion in deposits. Only two customer relationships accounted for more than 1% each.

Shareholders' equity at $856.1 million increased $24.7 million, an annualized 11.8%, during the quarter and $98.5 million, or 13.0%, from prior year end. Net unrealized losses on securities, net of deferred taxes, were $64.8 million at December 31, 2025, compared to $71.1 million at September 30, 2025 and $98.4 million at December 31, 2024. CTBI's annualized dividend yield to shareholders as of December 31, 2025 was 3.75%.

Asset Quality

Our total nonperforming loans at $19.2 million at December 31, 2025 decreased $5.5 million from prior quarter and $7.5 million from prior year. Nonaccrual loans at $8.5 million decreased $7.1 million from prior quarter and $7.8 million from prior year. Accruing loans 90+ days past due at $10.6 million increased $1.6 million from prior quarter and $0.3 million from prior year. Accruing loans 30-89 days past due at $20.2 million increased $1.7 million from prior quarter and $3.3 million from prior year. 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 $1.8 million, an annualized 0.14% of average loans, for the fourth quarter 2025 compared to $2.7 million, an annualized 0.23% of average loans, for the third quarter 2025 and $1.0 million, an annualized 0.09% of average loans, for the fourth quarter 2024. Of the net charge-offs for the quarter, $1.0 million were in commercial loans, $0.6 million were in consumer indirect loans, and $0.2 million were in consumer direct loans. Net-charge offs for the year 2025 were $7.4 million, an annualized 0.16% of average loans, compared to $5.5 million, an annualized 0.13% of average loans, for the year 2024.

Allowance for Credit Losses

Our provision for credit losses at $2.9 million for the quarter decreased $1.0 million from prior quarter but increased $0.3 million from prior year same quarter. Of the provision for the quarter, $2.6 million was allotted to fund changes in loan volume and composition, $0.2 million was allotted based on quantitative and qualitative factors, and $0.1 million was allotted for unfunded commitments. Provision for credit losses for the year 2025 of $12.4 million was a $1.5 million increase over the year 2024. Our reserve coverage (allowance for credit losses to nonperforming loans) at December 31, 2025 was 314.0% compared to 239.5% at September 30, 2025 and 206.0% at December 31, 2024. Our loan loss reserve as a percentage of total loans outstanding at December 31, 2025 remained at 1.23% from September 30, 2025 and December 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'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 $6.7 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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FOR ADDITIONAL INFORMATION, PLEASE CONTACT MARK A. GOOCH, CHAIRMAN, PRESIDENT, AND CEO, COMMUNITY TRUST BANCORP, INC. AT (606) 437-3229