10. Community Trust Bancorp

Company Profile

Shares of Community Trust Bancorp ( CTBI) of Pikeville, Ky. closed at $29.81 Monday, up 27% year-to-date. Based on a quarterly payout of 31 cents, the shares have a dividend yield of 4.09%.

On November 17 the company entered the Tennessee market, completing its acquisition of LaFollette First National Corp. and its subsidiary First National Bank of LaFollette, Tenn., for $16.1 million in stock, bringing on $182 million in assets and four branches.

Income Statement

Third-quarter net income was $8.5 million, or 55 cents a share, improving from $5.6 million, or 37 cents a share during the third quarter of 2009. The main factor in the earnings improvement was a decline in the provision for loan losses to $3.7 million in the third quarter from $5.8 million a year earlier.

The company's tax-adjusted net interest margin for the third quarter was 4.04%, according to SNL Financial, rising from 3.67% a year earlier.

Community Trust Bancorp's third-quarter return on average assets was 1.04%, which was third-highest among this group of ten holding companies. The dividend payout ratio - cash dividends paid per share as a percentage of diluted EPS after extraordinary items - was 55%, which was the lowest among the group of ten holding companies. Despite comfortably covering the dividend with earnings the payout ratio, ranging from 41% to 46% from 2005 through 2007, was still higher than it was before the credit crisis began affecting most banks' earnings.

Balance Sheet

Total assets were $3.2 billion as of September 30 and the nonperforming assets ratio was 2.97% compared to 2.63% a year earlier. The NPA ratio peaked at 3.13% in June. The third-quarter ratio of net charge-offs to average loans was 0.92% and loan loss reserves were well "ahead of the pace," covering 1.40% of total loans as of September 30.

Like all 10 companies listed here, Community Trust was well-capitalized as of September 30, with a Tier 1 leverage ratio of 10.22% and a total risk-based capital ratio of 14.62% as of September 30. The tangible common equity ratio was 8.58% according to SNL Financial.

Stock Ratios

The shares trade for 1.7 times tangible book value according to SNL and 14 times the 2011 consensus earnings estimate of $2.10 a share among analysts polled by Thomson Reuters.

Analyst Ratings

Two of the four analysts covering Community Trust Bancorp rate the shares a buy, while the other two recommend investors hold the shares.

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