Business Wire | Jul 21, 2021 08:15AM EDT

Community Trust Bancorp, Inc. Reports Record Earnings for the Second Consecutive Quarter 2021

Jul. 21, 2021

PIKEVILLE, Ky.--(BUSINESS WIRE)--Jul. 21, 2021--Community Trust Bancorp, Inc. (NASDAQ:CTBI):

Earnings Summary

(in thousands except per 2Q 1Q 2Q YTD YTDshare data) 2021 2021 2020 2021 2020

Net income $ 23,931 $ 23,618 $ 19,652 $ 47,549 $ 26,231

Earnings per share $ 1.35 $ 1.33 $ 1.11 $ 2.67 $ 1.48

Earnings per share - diluted $ 1.34 $ 1.33 $ 1.11 $ 2.67 $ 1.48



Return on average assets 1.76 % 1.84 % 1.63 % 1.80 % 1.14 %

Return on average equity 14.20 % 14.48 % 12.66 % 14.34 % 8.45 %

Efficiency ratio 53.17 % 50.37 % 55.17 % 51.76 % 57.12 %

Tangible common equity 11.39 % 11.27 % 11.42 %



Dividends declared per share $ 0.385 $ 0.385 $ 0.380 $ 0.770 $ 0.760

Book value per share $ 38.36 $ 37.14 $ 35.51



Weighted average shares 17,784 17,774 17,739 17,779 17,746

Weighted average shares - 17,800 17,787 17,742 17,794 17,753 diluted

Community Trust Bancorp, Inc. (NASDAQ:CTBI) experienced record earnings for the second consecutive quarter as our loan portfolio quality and the industry outlook continue to see improvement, allowing a reduction in credit loss reserves. Earnings for the second quarter 2021 were a record $23.9 million, or $1.35 per basic share, compared to $23.6 million, or $1.33 per basic share, earned during the first quarter 2021 and $19.7 million, or $1.11 per basic share, earned during the second quarter 2020. Earnings for the six months ended June 30, 2021 were $47.5 million compared to $26.2 million for the six months ended June 30, 2020. Deposit growth as a result of the government stimulus, along with lack of loan growth, continues to put pressure on our net interest margin. Total revenue declined from prior quarter as a result of the continued pressure on our net interest margin, but noninterest income remained steady.

2nd Quarter 2021 Highlights

* Net interest income for the quarter of $40.0 million was $0.2 million, or 0.6%, below prior quarter but $1.5 million, or 4.0%, above second quarter 2020.

* We recovered $4.3 million of our provision for credit losses during the quarter ended June 30, 2021. The reduction to our allowance for credit losses was the result of continued positive credit metrics, the lack of pandemic related losses provided for in the first quarter 2020, and an improvement in the industry outlook for certain industries included in our concentrations of credit. We also recognized a recapture of allowance for credit losses in the first quarter 2021 and the second quarter 2020 with credits to the provision for credit losses of $2.5 million and $49 thousand, respectively.

* Our loan portfolio decreased $90.3 million, an annualized 10.2%, during the quarter and $90.3 million, or 2.6%, from June 30, 2020.

* CTBI experienced continued improvement in loan losses, as we saw a net recovery of loan losses of $0.6 million for the quarter ended June 30, 2021, compared to net loan charge-offs of $0.2 million, or 0.02% of average loans annualized, for the quarter ended March 31, 2021 and $2.8 million, or 0.32% annualized, for the second quarter 2020.

* Asset quality remains strong from prior quarter as our nonperforming loans, excluding troubled debt restructurings, remained relatively flat from $21.0 million at March 31, 2021 to $21.1 million at June 30, 2021, down $15.0 million from June 30, 2020. Nonperforming assets at $27.0 million decreased $0.3 million from March 31, 2021 and $26.8 million from June 30, 2020.

* Deposits, including repurchase agreements, increased $106.3 million, an annualized 9.3%, during the quarter and $426.0 million, or 10.0%, from June 30, 2020.

* Noninterest income for the quarter ended June 30, 2021 of $15.5 million decreased slightly from prior quarter by $0.1 million, or 0.4%, but increased $2.6 million, or 20.5%, from prior year same quarter.

* Noninterest expense for the quarter ended June 30, 2021 of $29.5 million increased $1.2 million, or 4.2%, from prior quarter, and $1.6 million, or 5.7%, from prior year same quarter.

COVID-19

We continue working with our customers through the COVID-19 pandemic. At June 30, 2021, the number of customers with CARES Act deferrals reduced to 60 for a total outstanding amount of $28.6 million. The majority of our CARES Act deferrals have been 90 day deferrals. Total outstanding deferrals include 21 commercial loan deferrals with a total outstanding amount of $26.0 million, 29 residential loan deferrals with a total outstanding amount of $2.4 million, and 10 consumer loan deferrals with a total outstanding amount of $0.2 million. These loan deferrals and modifications have been executed consistent with the guidelines of the CARES Act. Pursuant to the CARES Act, these loan deferrals are not included in our nonperforming loans disclosed below.

At June 30, 2021, we had closed 6,312 Paycheck Protection Program (PPP) loans totaling $401.3 million, including $124.3 million stemming from the Consolidated Appropriations Act 2021. Through June 30, 2021, we have had $217.2 million of our PPP loans forgiven by the SBA.

Net Interest Income

Percent Change

2Q 2021 Compared to:

($ in thousands) 2Q 1Q 2Q 1Q 2Q YTD YTD Percent 2021 2021 2020 2021 2020 2021 2020 Change

Components ofnet interestincome

Income on $ 44,105 $ 44,428 $ 45,149 (0.7 %) (2.3 %) $ 88,533 $ 90,017 (1.6 %)earning assets

Expense oninterest bearing 3,868 3,969 6,506 (2.5 %) (40.5 %) 7,837 14,961 (47.6 %)liabilities

Net interestincome (tax $ 40,237 $ 40,459 $ 38,643 (0.5 %) 4.1 % $ 80,696 $ 75,056 7.5 %equivalent)

Average yieldand rates paid

Earning assets 3.41 % 3.63 % 3.98 % (6.1 %) (14.3 %) 3.52 % 4.18 % (15.8 %)yield

Rate paid oninterest bearing 0.45 % 0.48 % 0.85 % (6.3 %) (47.1 %) 0.47 % 1.01 % (53.5 %)liabilities

Gross interest 2.96 % 3.15 % 3.13 % (6.0 %) (5.4 %) 3.05 % 3.17 % (3.8 %)margin

Net interest 3.11 % 3.31 % 3.41 % (6.0 %) (8.8 %) 3.21 % 3.49 % (8.0 %)margin

Average balances

Investment $ 1,223,123 $ 1,061,304 $ 711,336 15.2 % 71.9 % $ 1,142,660 $ 681,094 67.8 %securities

Loans $ 3,495,655 $ 3,548,358 $ 3,461,505 (1.5 %) 1.0 % $ 3,521,861 $ 3,362,217 4.7 %

Earning assets $ 5,184,923 $ 4,957,636 $ 4,559,670 4.6 % 13.7 % $ 5,071,907 $ 4,326,752 17.2 %

Interest-bearing $ 3,424,218 $ 3,335,206 $ 3,094,931 2.7 % 10.6 % $ 3,379,958 $ 2,971,064 13.8 %liabilities

Net interest income for the quarter of $40.0 million decreased $0.2 million, or 0.6%, from first quarter 2021 but increased $1.5 million, or 4.0%, from second quarter 2020. Our net interest margin at 3.11% decreased 20 basis points from prior quarter and 30 basis points from prior year same quarter, as our average earning assets increased $227.3 million and $625.3 million, respectively, during those same periods. Our yield on average earning assets decreased 22 basis points from prior quarter and 57 basis points from prior year same quarter, and our cost of funds decreased 3 basis points from prior quarter and 40 basis points from prior year same quarter. Net interest income for the six months ended June 30, 2021 increased $5.5 million, or 7.4%, compared to the six months ended June 30, 2020.

The PPP loan portfolio had an annualized yield for the quarter of 6.04%, a one basis point increase from the 6.03% yield in the first quarter 2021. Interest income on the portfolio was $0.6 million during the quarter, down $0.1 million from prior quarter, while the amortization of net loan origination fees from current outstanding loans and recognition of net fee income from paid and forgiven loans was $3.0 million, down $0.3 million from prior quarter. These fees are amortized over the life of the loan with any unamortized balance fully recognized at the time of loan forgiveness. The impact to the net interest margin of the $3.0 million in fee income recognized was 23 basis points for the second quarter 2021, a 4 basis point decline from the 27 basis points for the first quarter 2021. While the PPP loan portfolio significantly impacted the net interest margin year over year, the decrease from prior quarter was primarily the result of a reduction in yield on our commercial real estate and indirect loan portfolios, along with an increase in our lower yielding financial assets due to the decrease in our loan portfolio and an increase in our investment portfolio.

Our ratio of average loans to deposits, including repurchase agreements, was 75.0% for the quarter ended June 30, 2021 compared to 79.9% for the quarter ended March 31, 2021 and 84.5% for the quarter ended June 30, 2020.

Noninterest Income

Percent Change

2Q 2021 Compared to:

($ in 2Q 1Q 2Q 1Q 2Q YTD YTD Percentthousands) 2021 2021 2020 2021 2020 2021 2020 Change

Depositservice $ 6,358 $ 6,022 $ 4,967 5.6 % 28.0 % $ 12,380 $ 10,883 13.8 %charges

Trust 3,349 2,951 2,569 13.5 % 30.4 % 6,300 5,453 15.5 %revenue

Gains onsales of 1,907 2,433 1,753 (21.6 %) 8.8 % 4,340 2,236 94.1 %loans

Loanrelated 1,004 2,270 822 (55.8 %) 22.1 % 3,274 917 257.0 %fees

Bank ownedlife 581 573 564 1.4 % 3.0 % 1,154 1,137 1.5 %insurancerevenue

Brokerage 554 457 313 21.2 % 77.0 % 1,011 685 47.6 %revenue

Other 1,768 871 1,891 103.0 % (6.5 %) 2,639 3,089 (14.6 %)

Totalnoninterest $ 15,521 $ 15,577 $ 12,879 (0.4 %) 20.5 % $ 31,098 $ 24,400 27.5 %income

Noninterest income for the quarter ended June 30, 2021 of $15.5 million was a slight decrease of $0.1 million, or 0.4%, from prior quarter but a $2.6 million, or 20.5%, increase from prior year same quarter. Increases from prior quarter in deposit service charges, trust revenue, and securities gains were offset by declines in gains on sales of loans and loan related fees. The increase in noninterest income from prior year same quarter was primarily the result of increases in gains on sales of loans, deposit service charges, trust revenue, and loan related fees. Noninterest income for the six months ended June 30, 2021 of $31.1 million was a $6.7 million, or 27.5% increase from the six months ended June 30, 2020.

Deposit service charges were impacted during the quarter and year over year by the continued increase in deposits due to the government stimulus, as gains on sales of loans have been impacted by the slowdown in the industry-wide refinancing boom. Loan related fees were primarily impacted by the change in the fair market value of mortgage servicing rights. As trust revenue is largely driven by the market value of the portfolios managed, it has benefited from an increase in equity market values, a larger volume of managed assets, and robust sales. Brokerage revenue has benefited from a change in sales mix moving more to fee based revenue and from the low interest rates driving some investors into annuities and out of lower paying deposit products.

Noninterest Expense

Percent Change

2Q 2021 Compared to:

($ in 2Q 1Q 2Q 1Q 2Q YTD 2021 YTD 2020 Percent thousands) 2021 2021 2020 2021 2020 Change

Salaries $ 11,706 $ 11,412 $ 11,481 2.6 % 2.0 % $ 23,118 $ 23,011 0.5 %

Employee 7,254 5,421 3,672 33.8 % 97.5 % 12,675 7,173 76.7 %benefits

Netoccupancy 2,668 2,828 2,624 (5.7 %) 1.7 % 5,496 5,330 3.1 %andequipment

Data 1,870 2,159 1,875 (13.4 %) (0.3 %) 4,029 3,853 4.6 %processing

Legal andprofessional 753 893 1,010 (15.7 %) (25.4 %) 1,646 2,056 (19.9 %)fees

Advertisingand 710 722 568 (1.7 %) 25.0 % 1,432 1,202 19.1 %marketing

Telephone 502 509 457 (1.4 %) 9.8 % 1,011 890 13.6 %

Other 4,035 4,366 6,222 (7.6 %) (35.1 %) 8,401 12,615 (33.4 %)

Totalnoninterest $ 29,498 $ 28,310 $ 27,909 4.2 % 5.7 % $ 57,808 $ 56,130 3.0 %expense

Noninterest expense for the quarter ended June 30, 2021 of $29.5 million increased $1.2 million, or 4.2%, from prior quarter, and $1.6 million, or 5.7%, from prior year same quarter. The increase in noninterest expense was the result of an increase in personnel expense. The increase in personnel expense quarter over quarter included a $1.5 million increase in bonuses and incentives as we increased the accruals for incentive payments based on our current projected earnings for the year. Noninterest expense for the six months ended June 30, 2021 increased $1.7 million, or 3.0%, compared to the six months ended June 30, 2020.

Balance Sheet Review

Total Loans

Percent Change

2Q 2021 Compared to:

($ in thousands) 2Q 1Q 2Q 1Q 2Q 2021 2021 2020 2021 2020

Commercial nonresidential $ 979,760 $ 732,978 $ 772,537 33.7 % 26.8 %real estate

Commercial residential 309,627 305,079 257,517 1.5 % 20.2 %real estate

SBA guaranteed PPP loans 175,983 254,732 266,951 (30.9 %) (34.1 %)

Other commercial 356,359 607,695 609,004 (41.4 %) (41.5 %)

Total commercial 1,821,729 1,900,484 1,906,009 (4.1 %) (4.4 %)

Residential mortgage 762,649 770,026 780,632 (1.0 %) (2.3 %)

Home equity loans/lines 102,551 101,595 108,531 0.9 % (5.5 %)

Total residential 865,200 871,621 889,163 (0.7 %) (2.7 %)

Consumer indirect 610,024 617,305 596,314 (1.2 %) 2.3 %

Consumer direct 151,540 149,394 147,284 1.4 % 2.9 %

Total consumer 761,564 766,699 743,598 (0.7 %) 2.4 %

Total loans $ 3,448,493 $ 3,538,804 $ 3,538,770 (2.6 %) (2.6 %)

Total Deposits and Repurchase Agreements

Percent Change

2Q 2021 Compared to:

($ in thousands)

2Q 2021

1Q 2021

2Q 2020

1Q 2021

2Q 2020

Non-interest bearing deposits

$

1,286,989

$

1,283,309

$

1,109,873

0.3

%

16.0

%

Interest bearing deposits

Interest checking

99,226

91,803

77,518

8.1

%

28.0

%

Money market savings

1,281,431

1,240,530

1,209,633

3.3

%

5.9

%

Savings accounts

596,426

574,181

487,172

3.9

%

22.4

%

Time deposits

1,059,630

1,043,949

1,088,113

1.5

%

(2.6

%)

Repurchase agreements

370,568

354,235

296,007

4.6

%

25.2

%

Total interest bearing deposits and repurchase agreements

$

3,407,281

$

3,304,698

$

3,158,443

3.1

%

7.9

%

Total deposits and repurchase agreements

$

4,694,270

$

4,588,007

$

4,268,316

2.3

%

10.0

%

CTBI's total assets at $5.5 billion increased $134.0 million, or 10.0% annualized, from March 31, 2021 and $471.3 million, or 9.4%, from June 30, 2020. Loans outstanding at June 30, 2021 were $3.4 billion, a decrease of $90.3 million, an annualized 10.2%, from March 31, 2021 and $90.3 million, or 2.6%, from June 30, 2020. Loans, excluding PPP loans, declined $11.6 million during the quarter, with a $7.3 million decrease in the indirect consumer loan portfolio and a $6.4 million decrease in the residential loan portfolio, offset partially by a $2.1 million increase in the direct consumer loan portfolio. The commercial loan portfolio decreased as the result of a $78.8 million decline in PPP loans. CTBI's investment portfolio increased $202.7 million, or an annualized 70.2%, from March 31, 2021 and $617.5 million, or 83.2%, from June 30, 2020 as we continued to deploy our increased liquidity in investments due to continued soft loan demand. Deposits in other banks increased $34.1 million from prior quarter but decreased $24.4 million from prior year same quarter. Deposits, including repurchase agreements, at $4.7 billion increased $106.3 million, or an annualized 9.3%, from March 31, 2021 and $426.0 million, or 10.0%, from June 30, 2020, due to the ongoing government stimulus.

Shareholders' equity at June 30, 2021 was $684.1 million, a $22.0 million increase from the $662.1 million at March 31, 2021 and a $52.2 million increase from the $631.8 million at June 30, 2020. CTBI's annualized dividend yield to shareholders as of June 30, 2021 was 3.81%.

Asset Quality

CTBI's total nonperforming loans, not including performing troubled debt restructurings, were $21.1 million, or 0.61% of total loans, at June 30, 2021 compared to $21.0 million, or 0.59% of total loans, at March 31, 2021 and $36.2 million, or 1.02% of total loans, at June 30, 2020. Accruing loans 90+ days past due decreased $0.5 million from prior quarter and $13.5 million from June 30, 2020. Nonaccrual loans increased $0.6 million during the quarter but decreased $1.5 million from March 31, 2020. Accruing loans 30-89 days past due at $10.8 million decreased $2.4 million from prior quarter and $2.8 million from June 30, 2020. Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss.

Our level of foreclosed properties at $5.8 million at June 30, 2021 was a $0.4 million decrease from the $6.2 million at March 31, 2021 and an $11.8 million decrease from the $17.7 million at June 30, 2020. Sales of foreclosed properties for the quarter ended June 30, 2021 totaled $0.4 million while new foreclosed properties totaled $0.4 million. At June 30, 2021, the book value of properties under contracts to sell was $0.3 million; however, the closings had not occurred at quarter-end.

CTBI experienced continued improvement in loan losses, as we saw a net recovery of loan losses of $0.6 million for the quarter ended June 30, 2021, compared to net loan charge-offs of $0.2 million, or 0.02% of average loans annualized, for the quarter ended March 31, 2021 and $2.8 million, or 0.32% annualized, for the second quarter 2020. For the six months ended June 30, 2021 we experienced a net recovery of loan losses of $0.4 million compared to net charge-offs of $4.2 million, or 0.25% of average loans annualized, for the six months ended June 30, 2020.

Allowance for Credit Losses

We recovered $4.3 million of our provision for credit losses during the quarter ended June 30, 2021. The reduction was the result of continued positive credit metrics, the lack of pandemic related losses provided for in Q1 2020 as well as an improvement in the industry outlook for certain industries included in our concentrations of credit.. We also recognized a recapture of allowance for credit losses in the first quarter 2021 and the second quarter 2020 with credits to the provision for credit losses of $2.5 million and $49 thousand, respectively. Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2021 was 197.2% compared to 215.5% at March 31, 2021 and 129.0% at June 30, 2020. Our credit loss reserve as a percentage of total loans outstanding at June 30, 2021 was 1.21% (1.27% excluding PPP loans) compared to 1.28% at March 31, 2021 (1.38% excluding PPP loans) and 1.32% at June 30, 2020 (1.43% excluding PPP loans).

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.

Community Trust Bancorp, Inc., with assets of $5.5 billion, is headquartered in Pikeville, Kentucky and has 70 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.

Total Deposits andRepurchase Agreements

Percent Change

2Q 2021 Compared to:

($ in thousands) 2Q 1Q 2Q 1Q 2Q 2021 2021 2020 2021 2020

Non-interest bearing $ 1,286,989 $ 1,283,309 $ 1,109,873 0.3 % 16.0 %deposits

Interest bearing deposits

Interest checking 99,226 91,803 77,518 8.1 % 28.0 %

Money market savings 1,281,431 1,240,530 1,209,633 3.3 % 5.9 %

Savings accounts 596,426 574,181 487,172 3.9 % 22.4 %

Time deposits 1,059,630 1,043,949 1,088,113 1.5 % (2.6 %)

Repurchase agreements 370,568 354,235 296,007 4.6 % 25.2 %

Total interest bearingdeposits and repurchase $ 3,407,281 $ 3,304,698 $ 3,158,443 3.1 % 7.9 %agreements

Total deposits and $ 4,694,270 $ 4,588,007 $ 4,268,316 2.3 % 10.0 %repurchase agreements

CTBI's total assets at $5.5 billion increased $134.0 million, or 10.0% annualized, from March 31, 2021 and $471.3 million, or 9.4%, from June 30, 2020. Loans outstanding at June 30, 2021 were $3.4 billion, a decrease of $90.3 million, an annualized 10.2%, from March 31, 2021 and $90.3 million, or 2.6%, from June 30, 2020. Loans, excluding PPP loans, declined $11.6 million during the quarter, with a $7.3 million decrease in the indirect consumer loan portfolio and a $6.4 million decrease in the residential loan portfolio, offset partially by a $2.1 million increase in the direct consumer loan portfolio. The commercial loan portfolio decreased as the result of a $78.8 million decline in PPP loans. CTBI's investment portfolio increased $202.7 million, or an annualized 70.2%, from March 31, 2021 and $617.5 million, or 83.2%, from June 30, 2020 as we continued to deploy our increased liquidity in investments due to continued soft loan demand. Deposits in other banks increased $34.1 million from prior quarter but decreased $24.4 million from prior year same quarter. Deposits, including repurchase agreements, at $4.7 billion increased $106.3 million, or an annualized 9.3%, from March 31, 2021 and $426.0 million, or 10.0%, from June 30, 2020, due to the ongoing government stimulus.

Shareholders' equity at June 30, 2021 was $684.1 million, a $22.0 million increase from the $662.1 million at March 31, 2021 and a $52.2 million increase from the $631.8 million at June 30, 2020. CTBI's annualized dividend yield to shareholders as of June 30, 2021 was 3.81%.

Asset Quality

CTBI's total nonperforming loans, not including performing troubled debt restructurings, were $21.1 million, or 0.61% of total loans, at June 30, 2021 compared to $21.0 million, or 0.59% of total loans, at March 31, 2021 and $36.2 million, or 1.02% of total loans, at June 30, 2020. Accruing loans 90+ days past due decreased $0.5 million from prior quarter and $13.5 million from June 30, 2020. Nonaccrual loans increased $0.6 million during the quarter but decreased $1.5 million from March 31, 2020. Accruing loans 30-89 days past due at $10.8 million decreased $2.4 million from prior quarter and $2.8 million from June 30, 2020. Our loan portfolio management processes focus on the immediate identification, management, and resolution of problem loans to maximize recovery and minimize loss.

Our level of foreclosed properties at $5.8 million at June 30, 2021 was a $0.4 million decrease from the $6.2 million at March 31, 2021 and an $11.8 million decrease from the $17.7 million at June 30, 2020. Sales of foreclosed properties for the quarter ended June 30, 2021 totaled $0.4 million while new foreclosed properties totaled $0.4 million. At June 30, 2021, the book value of properties under contracts to sell was $0.3 million; however, the closings had not occurred at quarter-end.

CTBI experienced continued improvement in loan losses, as we saw a net recovery of loan losses of $0.6 million for the quarter ended June 30, 2021, compared to net loan charge-offs of $0.2 million, or 0.02% of average loans annualized, for the quarter ended March 31, 2021 and $2.8 million, or 0.32% annualized, for the second quarter 2020. For the six months ended June 30, 2021 we experienced a net recovery of loan losses of $0.4 million compared to net charge-offs of $4.2 million, or 0.25% of average loans annualized, for the six months ended June 30, 2020.

Allowance for Credit Losses

We recovered $4.3 million of our provision for credit losses during the quarter ended June 30, 2021. The reduction was the result of continued positive credit metrics, the lack of pandemic related losses provided for in Q1 2020 as well as an improvement in the industry outlook for certain industries included in our concentrations of credit.. We also recognized a recapture of allowance for credit losses in the first quarter 2021 and the second quarter 2020 with credits to the provision for credit losses of $2.5 million and $49 thousand, respectively. Our reserve coverage (allowance for credit losses to nonperforming loans) at June 30, 2021 was 197.2% compared to 215.5% at March 31, 2021 and 129.0% at June 30, 2020. Our credit loss reserve as a percentage of total loans outstanding at June 30, 2021 was 1.21% (1.27% excluding PPP loans) compared to 1.28% at March 31, 2021 (1.38% excluding PPP loans) and 1.32% at June 30, 2020 (1.43% excluding PPP loans).

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.

Community Trust Bancorp, Inc., with assets of $5.5 billion, is headquartered in Pikeville, Kentucky and has 70 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.

Community Trust Bancorp, Inc.Financial Summary (Unaudited)June 30, 2021(in thousands except per share data and # of employees) Three Three Three Six Six Months Months Months Months Months Ended Ended Ended Ended Ended June 30, 2021 March 31, June 30, 2020 June 30, 2021 June 30, 2020 2021Interest $ 43,875 $ 44,211 $ 44,968 $ 88,086 $ 89,667 incomeInterest 3,868 3,969 6,506 7,837 14,961 expenseNet interest 40,007 40,242 38,462 80,249 74,706 incomeLoan loss (4,257 ) (2,499 ) (49 ) (6,756 ) 12,658 provision Gains on 1,907 2,433 1,753 4,340 2,236 sales ofloansDeposit 6,358 6,022 4,967 12,380 10,883 servicechargesTrust revenue 3,349 2,951 2,569 6,300 5,453

Loan related 1,004 2,270 822 3,274 917 feesSecurities 280 (168 ) 937 112 1,186 gains(losses)Other 2,623 2,069 1,831 4,692 3,725 noninterestincomeTotal 15,521 15,577 12,879 31,098 24,400 noninterestincome Personnel 18,960 16,833 15,153 35,793 30,184 expenseOccupancy and 2,668 2,828 2,624 5,496 5,330 equipmentData 1,870 2,159 1,875 4,029 3,853 processingexpenseFDIC 323 326 294 649 441 insurancepremiumsOther 5,677 6,164 7,963 11,841 16,322 noninterestexpenseTotal 29,498 28,310 27,909 57,808 56,130 noninterestexpense Net income 30,287 30,008 23,481 60,295 30,318 before taxesIncome taxes 6,356 6,390 3,829 12,746 4,087

Net income $ 23,931 $ 23,618 $ 19,652 $ 47,549 $ 26,231

Memo: TEQ $ 44,105 $ 44,428 $ 45,149 $ 88,533 $ 90,017 interestincome Average 17,784 17,774 17,739 17,779 17,746 sharesoutstandingDilutedaverage 17,800 17,787 17,742 17,794 17,753 sharesoutstandingBasic $ 1.35 $ 1.33 $ 1.11 $ 2.67 $ 1.48 earnings pershareDiluted $ 1.34 $ 1.33 $ 1.11 $ 2.67 $ 1.48 earnings pershareDividends per $ 0.385 $ 0.385 $ 0.38 $ 0.770 $ 0.76 share Averagebalances:Loans $ 3,495,655 $ 3,548,358 $ 3,461,505 $ 3,521,861 $ 3,362,217

Earning 5,184,923 4,957,636 4,559,670 5,071,907 4,326,752 assetsTotal assets 5,450,182 5,219,406 4,837,293 5,335,432 4,609,851

Deposits,including 4,661,615 4,442,647 4,096,647 4,552,736 3,863,536 repurchaseagreementsInterest 3,424,218 3,335,206 3,094,931 3,379,958 2,971,064 bearingliabilitiesShareholders' 675,727 661,302 624,111 668,555 624,261 equity Performanceratios:Return on 1.76 % 1.84 % 1.63 % 1.80 % 1.14 %averageassetsReturn on 14.20 % 14.48 % 12.66 % 14.34 % 8.45 %averageequityYield onaverage 3.41 % 3.63 % 3.98 % 3.52 % 4.18 %earningassets (taxequivalent)Cost ofinterest 0.45 % 0.48 % 0.85 % 0.47 % 1.01 %bearing funds(taxequivalent)Net interest 3.11 % 3.31 % 3.41 % 3.21 % 3.49 %margin (taxequivalent)Efficiency 53.17 % 50.37 % 55.17 % 51.76 % 57.12 %ratio (taxequivalent) Loan $ 948 $ 1,470 $ 3,809 $ 2,418 $ 6,224 charge-offsRecoveries (1,554 ) (1,293 ) (1,047 ) (2,847 ) (2,064 )

Net $ (606 ) $ 177 $ 2,762 $ (429 ) $ 4,160 charge-offs Market Price:High $ 45.95 $ 47.53 $ 37.07 $ 47.53 $ 46.87

Low $ 39.76 $ 36.02 $ 26.45 $ 36.02 $ 26.45

Close $ 40.38 $ 44.03 $ 32.76 $ 40.38 $ 32.76

As of As of As of June 30, 2021 March 31, June 30, 2020 2021Assets:Loans $ 3,448,493 $ 3,538,804 $ 3,538,770

Loan loss (41,695 ) (45,346 ) (46,634 )reserveNet loans 3,406,798 3,493,458 3,492,136

Loans held 4,912 17,748 28,987 for saleSecurities 1,357,597 1,155,195 740,479 AFSEquity 2,523 2,243 2,093 securities atfair valueOther equity 13,915 14,858 15,295 investmentsOther earning 392,591 358,529 416,980 assetsCash and due 63,917 66,664 63,194 from banksPremises and 40,391 40,997 42,810 equipmentRight of use 12,729 12,787 13,867 assetGoodwill and 65,490 65,490 65,490 core depositintangibleOther assets 133,300 132,150 141,510

Total Assets $ 5,494,163 $ 5,360,119 $ 5,022,841

Liabilitiesand Equity:Interest $ 99,226 $ 91,803 $ 77,518 bearingcheckingSavings 1,877,857 1,814,711 1,696,805 depositsCD's >= 561,269 547,767 537,124 $100,000Other time 498,361 496,182 550,989 depositsTotalinterest 3,036,713 2,950,463 2,862,436 bearingdepositsNoninterest 1,286,989 1,283,309 1,109,873 bearingdepositsTotal 4,323,702 4,233,772 3,972,309 depositsRepurchase 370,568 354,235 296,007 agreementsOtherinterest 58,726 58,731 59,246 bearingliabilitiesLease 13,529 13,549 14,550 liabilityOthernoninterest 43,555 37,763 48,882 bearingliabilitiesTotal 4,810,080 4,698,050 4,390,994 liabilitiesShareholders' 684,083 662,069 631,847 equityTotal $ 5,494,163 $ 5,360,119 $ 5,022,841 Liabilitiesand Equity Ending shares 17,831 17,826 17,795 outstanding 30 - 89 days $ 10,847 $ 13,204 $ 13,666 past dueloans90 days past 8,283 8,816 21,799 due loansNonaccrual 12,863 12,223 14,358 loansRestructured loans 66,887 68,485 59,823 (excluding 90 days past dueand nonaccrual)Foreclosed 5,848 6,224 17,675 properties Community 12.45 % 12.70 % 12.92 %bank leverageratioTangibleequity to 11.39 % 11.27 % 11.42 %tangibleassets ratioFTE employees 961 970 979

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CONTACT: Community Trust Bancorp, Inc. Jean R. Hale,(606) 437-3294 Chairman, President, and C.E.O.